• Revenue Growth: Full-year revenue growth of 11%.
• Adjusted EBITDA Margin: Exceeded 25% for the full year.
• Consolidated EBITDA Growth: 10% for the year.
• Environmental Services Segment Revenue Increase: 9% increase in revenue.
• Field Services Revenue Growth: 47% increase, driven by HEPACO and organic growth.
• Technical Services Revenue Increase: 8% increase driven by higher network volumes and pricing.
• Incineration Utilization: Achieved 94% utilization in the quarter.
• Safety-Kleen Environmental Services Revenue Growth: 6% in Q4.
• Net Income: EPS of $7.42 for fiscal 2024.
• Cash and Short-term Marketable Securities: $790 million at year-end.
• Net Debt-to-EBITDA Ratio: Just under 2 times at year-end.
• Adjusted Free Cash Flow: $358 million for the year.
• SG&A Expense: 12.7% of revenue in Q4.
• Depreciation and Amortization: $401 million for the year.
• Adjusted EBITDA Guidance for 2025: $1.15 billion to $1.21 billion.
• Adjusted Cash Flow Guidance for 2025: $430 million to $490 million.

• Warning! GuruFocus has detected 10 Warning Signs with OGE.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clean Harbors Inc (NYSE:CLH) delivered strong consolidated results in Q4, beating street expectations with a 10% growth in consolidated EBITDA.
• The Environmental Services (ES) segment concluded 2024 with a record year, achieving an 11% revenue growth and adjusted EBITDA margins exceeding 25%.
• The company successfully launched its new incinerator in Kimball, Nebraska, ahead of schedule, increasing North American capacity by 12%.
• Clean Harbors Inc (NYSE:CLH) achieved significant operational milestones, including the acquisition and integration of HEPACO and Noble Oil, and improved workforce retention by lowering turnover by 250 basis points.
• The company ended the year with a healthy cash balance and low leverage, enabling continued execution of growth strategies and capital allocation plans.

Negative Points

• The Safety-Kleen Sustainability Solutions (SKSS) segment faced challenges due to a deteriorating commodity pricing environment, resulting in decreased revenue and EBITDA in Q4.
• The company had to idle its California re-refinery in Q4 to address inventory buildup, reflecting ongoing challenges in the base oil and lubricants market.
• Clean Harbors Inc (NYSE:CLH) anticipates a cautious outlook for the SKSS segment in 2025, with pricing headwinds expected to persist.
• The company experienced higher corporate costs in Q4, which offset some of the gains from the ES segment.
• The ramp-up of the Kimball incinerator is expected to be gradual, with initial start-up costs impacting short-term profitability.

Q & A Highlights

Q: Are there any incremental opportunities from the California wildfires cleanup effort, and is this reflected in the guidance? A: Eric Gerstenberg, Co-CEO, stated that Clean Harbors is actively participating in the cleanup and remediation efforts. While the wildfires caused some disruption, none of their branches were affected. The guidance for Q1 includes some modest benefits from this work, but overall, it is considered a net neutral event due to the slowdown in the region caused by the fires.

Q: With the addition of 12% more capacity from the Kimball incinerator, are there any opportunities to fill those slots with captive closures? A: Eric Gerstenberg, Co-CEO, mentioned that they continue to work with captive incinerator customers to evaluate their next steps, especially with Kimball coming online. There are opportunities to help these customers evaluate their cost structures and regulatory changes, which could lead to filling those slots.

Q: Can you provide more details on the ramp-up of the Kimball incinerator and its expected contribution? A: Eric Gerstenberg, Co-CEO, explained that they expect to incinerate over 28,000 incremental tons this year, with an EBITDA contribution of $8 million to $12 million. The ramp-up will continue over the next few years, contributing $25 million to $45 million of EBITDA over three to four years.

Q: What are the expectations for growth in the Industrial Services segment in 2025? A: Eric Gerstenberg, Co-CEO, noted that the number of refinery turnarounds booked for 2025 is up significantly, indicating a recovery from the constrained spending in 2024. This increase in turnarounds and specialty services is expected to drive growth in the Industrial Services segment.

Q: How is the customer retention in Industrial and Field Services given the focus on pricing for appropriate returns? A: Eric Gerstenberg, Co-CEO, stated that despite aggressive pricing, customer retention has remained strong, with minimal attrition. The company has successfully implemented pricing strategies to ensure returns are commensurate with the hazards associated with their services.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.