Clean Harbors Raises Outlook as Profit Climbs
Adjusted EBITDA rose 22% to $409.0 million as margins widened.
Clean Harbors (CLH), an environmental and industrial-services provider, reported a 34% increase in second-quarter net income as stronger waste volumes and re-refined-product pricing lifted results. Net income reached $170.5 million, or $3.22 a diluted share, compared with $63.2 million, or $1.19 a share, in the first quarter.
Revenue rose 12% from a year earlier to a record $1.735 billion and increased about 19% sequentially from $1.46 billion. Adjusted EBITDA growth accelerated from 6% in the first quarter, while the consolidated adjusted EBITDA margin expanded 190 basis points to 23.6%, following a 60-basis-point expansion in the preceding quarter.
Environmental Services extended its run of year-over-year adjusted EBITDA margin gains to 17 consecutive quarters, with the margin reaching 27.9%. Technical Services revenue rose 18%, accelerating from 5% growth in the first quarter, as disposal, recycling, project and PFAS-related demand supported the business.
Incineration utilization, including the new Kimball unit, increased to 91% from 80% in the first quarter and 86% a year earlier. Landfill-volume growth slowed to 7% from 34% in the preceding quarter, while Field Services revenue growth eased to 3% against a prior-year period that included large emergency-response projects.
Safety-Kleen Sustainability Solutions revenue rose 41%, and adjusted EBITDA increased 143% as global refined-product supply disruptions lifted re-refined-product pricing. The segment's margin increased more than 70% from a year earlier, reversing pressure associated with the weak base-oil pricing environment reported in the second half of 2023. Waste-oil collections recovered to 61 million gallons from 53 million in the first quarter.
Quarterly operating cash flow increased 15% to $239.2 million. Adjusted free cash flow edged up 2% to $135.7 million as capital spending rose 40% to $126.2 million.
Clean Harbors raised the midpoint of its 2024 adjusted EBITDA outlook by $110 million to $1.38 billion, with guidance now ranging from $1.35 billion to $1.41 billion. The company also raised the midpoint of its adjusted-free-cash-flow forecast by $30 million to $550 million and now expects $520 million to $580 million.
A new 10-year disposal contract, estimated at $600 million, is scheduled to begin in the fourth quarter and reach full capacity in 2030. Clean Harbors also announced a planned $305 million acquisition of ES&H, which generates about $90 million in annual revenue and $30 million in adjusted EBITDA, expanding Field Services as the company introduced a data-center offering to offset softness among industrial customers.