Clean Harbors reports strong financial close to 2021

Clean Harbors Inc., a Norwell, Massachusetts-based provider of environmental and industrial services, has announced the financial results for the fourth quarter and 2021. 

“The fourth quarter marked a strong close to the year for Clean Harbors and demonstrated the ongoing success of our comprehensive growth strategy,” says Alan S. McKim, chairman, president and CEO of Clean Harbors. “Favorable market dynamics for both our operating segments drove our performance, including high demand for hazardous waste disposal, industrial services and rerefined products.  

According to the report, revenue in Q4 increased 41 percent to $1.12 billion from $796.2 million in the same period of 2020. Income from operations grew 33 percent to $82.2 million from $61.7 million in the fourth quarter of 2020. 

Net income was $49 million, or 90 cents per diluted share, compared with net income of $39.3 million, or 71 cents per diluted share, for the same period in 2020. Adjusted net income was $48.6 million, or 89 cents per diluted share, for the fourth quarter of 2021, compared with adjusted net income of $35 million, or 63 cents per diluted share, for the same period of 2020. Net income and adjusted net income results for the fourth quarter of 2021 included pretax integration and severance costs of $8.6 million, comparable costs in the fourth quarter of 2020 were $1.9 million. 

Adjusted earnings before income taxation depreciation and amortization (EBITDA) increased 23 percent to $174.3 million from $141.8 million in the same period of 2020. Benefits from Canadian government assistance programs accounted for $300,000 of contributions in the fourth quarter of 2021, compared with $5.6 million in benefits from both Canadian and U.S. government programs in the same period of 2020.  

“This positive market environment, combined with strong execution by our entire team, enabled us to exceed our guidance for both adjusted EBITDA and adjusted free cash flow,” McKim says. “With contributions from HydroChemPSC (HPC), which we acquired in October, we delivered more than $1 billion in quarterly revenue for the first time in our Company’s history.” 

Clean Harbors’ revenue for the year was $3.81 billion compared with $3.14 billion in 2020. Income from operations increased 38 percent to $347.9 million from $251.3 million in 2020. 

Net income was $203.2 million, or $3.71 per diluted share, compared with net income of $134.8 million, or $2.42 per diluted share, for 2020. The company reported adjusted net income for 2021 of $199.6 million, or $3.64 per diluted share, compared with adjusted net income of $129.4 million, or $2.32 per diluted share, for 2020.  

Net income and adjusted net income results for 2021 included pretax integration and severance costs of $19.7 million, with the HPC acquisition representing the largest factor. Comparable costs in 2020 were $12.5 million driven by pandemic-related workforce reductions. 

Adjusted EBITDA increased 18 percent to $676.6 million, which included $12 million of benefits from government assistance programs, compared with adjusted EBITDA of $573.8 million in 2020. This included $42.3 million of benefits from government assistance programs. The company says it also generated a record adjusted free cash flow of $326.3 million in 2021, a 23 percent increase from the prior year. 

“Beyond our financial accomplishments, 2021 was a year of significant achievement for the company, including the HPC acquisition, commencing the expansion of our incineration network in Nebraska and overcoming the deep freeze in the Southern U.S. that temporarily shut down six of our incinerators in early 2021,” McKim says. “In addition, we addressed inflationary conditions not seen in decades with rigorous pricing initiatives and navigated the various phases of the pandemic, while generating $59 million of COVID decontamination revenue.” 

For the first quarter, Clean Harbors expects adjusted EBITDA to increase 30 to 35 percent from the prior year, due to the addition of HPC and higher profitability in the SKSS segment.  

For 2022, the company expects adjusted EBITDA in the range of $765 million to $795 million. This range is based on anticipated generally accepted accounting principles net income in the range of $204 million to $237 million. 

The company is also anticipating adjusted free cash flow in the range of $250 million to $290 million, based on anticipated net cash from operating activities in the range of $560 million to $620 million. 

“We see momentum continuing across all our key business lines, which will support our plans for profitable growth in 2022,” McKim says. “The new year began with a healthy backlog of waste streams in our disposal facilities and at customer sites, with underlying trends in regulations and U.S. manufacturing further supporting our positive view.”