Clean Harbors Reports Steady Growth with Q4, FY2023 Financial Results

Clean Harbors, Inc. (Clean Harbors) (NYSE: CLH) released its financial results for the fourth quarter and full year of 2023 (ending on December 31, 2023) today in which both time frames saw modest revenue growth compared to the previous periods in the prior year.

“Our Environmental Services (ES) segment capped a year of record growth with an outstanding fourth quarter,” said Mike Battles, Co-Chief Executive Officer. “Demand for our ES services remained robust, as steady volumes, healthy project flow and continued customer interest in our service offerings drove favorable pricing.

For Q4 2023, revenues for Clean Harbors grew 5 percent up to $1.34 billion, a modest increase compared to the $1.28 million revenue reported for the same period of 2022. Income operations saw an increase of 16 percent to 147.3 million, up $19.9 million compared to Q4 in 2022. Net income for Q4 2023 came in at $98.3 million and adjusted net income finished the final quarter of last year at $98.7 million.

Adjust EBITDA also saw steady growth from 2022’s Q4 to 2023’s final quarter, coming at $254.9 million, an increase of 14 percent.

“Our ES segment delivered a 16 percent increase in Adjusted EBITDA and a 190-basis point margin improvement year-over-year on 7 percent revenue growth,” said Eric Gerstenberg, Co-Chief Executive Officer.

“All of our service businesses grew revenue from a year ago, led by Safety-Kleen Environmental Services (SKSS) revenue growth of 11 percent. Industrial Services revenue increased 8 percent, which includes contributions from our acquisition of Thompson Industrial. Technical Services grew 5 percent as our incineration utilization was 85 percent, up from a year ago. Average incineration price was 7 percent above the fourth quarter of 2022, as we continued to prioritize higher value waste streams and capitalized on the backlog of containerized waste in our network. Project volumes in our landfill business were strong in the quarter as tonnage increased 24 percent from the same period in 2022. In addition, the pipeline for our unique Total PFAS Solution continues to grow.

Revenue for Clean Harbor’s full year 2023 report saw an identical percentage growth, increasing 5 percent to $5.41 billion, up from $5.17 billion in 2022. Income from operations, however, finished the year at $612.4 million, which is lower than the reported $634.7 million in 2022.

Net income for the company in 2023 finished the year at $377.9 million with an adjusted net income of $379.9 million. Adjusted EBITDA just missed matching Clean Harbors 2022 amount, finishing 2023 at $1.01 billion, compared with $1.02 billion from the previous year. Although, Clean Harbors did generate an 11 percent increase in adjusted cash flow to $321.9 million, which the company attributes largely to improvements in working capital management.

“2023 was an outstanding year for the Company, highlighted by a record financial performance in our ES segment, notable operational accomplishments and extraordinary safety results,” Gerstenberg said.

“Adjusted EBITDA margin in the ES segment expanded by 160 basis points through the combination of 8 percent revenue growth and a 16 percent increase in Adjusted EBITDA. Beyond our financial strength, 2023 was a year of substantial achievement. We accelerated the construction of our Nebraska incinerator, acquired Thompson Industrial, expanded our billable headcount, significantly improved our ESG ratings and lowered voluntary turnover to below pre-pandemic levels. Most importantly, we achieved a TRIR of 0.63 – the best annual safety performance in our history. Our continuous commitment to safety keeps our workforce safe and enhances our ability to win business, protect the communities we serve, and attract and retain talented people.”

Looking to 2024, Clean Harbors expects its Adjusted EBITDA to grow 2-3 percent compared to the first quarter of 2023. For the full scope of 2024, the company expects Adjusted EBITDA to be in the range of $1.05 to $1.11 billion, an outlook of 7 percent growth year-over-year.

“We begin 2024 with considerable momentum in our ES segment as our facilities network and service lines remain in high demand,” Gerstenberg said.

“We expect the favorable market conditions that drove our 2023 success, including U.S. manufacturing and regulatory trends, to continue to support our profitable growth plans in 2024.”