Clean Harbors’ Waste Net Income Drops in 2013

Solid and hazardous waste firm Clean Harbors Inc. reported a drop in net income for its fourth quarter and year, hurt by bad weather conditions and a large tax benefit in 2012.

The Norwell, Mass.-based Clean Harbors also said in a news release that its directors have authorized the repurchase of up to $150 million of its common stock. The company intends to fund the repurchases through its available cash resources.

Net income for the period ended Dec. 31 for Clean Harbors fell 56.7 percent to $26.8 million, or 44 cents per diluted share, compared with $61.9 million, or $1.11 per diluted share, in the 2012 quarter.

Revenue climbed 57.3 percent to $879.4 million, compared with $559 million in the year-ago period.

“Our fourth-quarter results were below expectations, as an unanticipated slowdown due to adverse weather and the timing of holidays in December affected our business after a very strong start in October,” said Alan McKim, chairman and CEO.

Fourth-quarter income in 2012 included a $52.4 million tax benefit, partially offset by about $7.5 million (net of tax) in acquisition-related costs.

For the year, net earnings declined 26.3 percent to $95.6 million, or $1.57 per diluted share, compared with $129.7 million, or $2.40 per diluted share, in 2012. Revenue for 2013 jumped 60.3 percent to $3.51 billion from $2.19 billion a year earlier.

“While we did not hit the financial targets we established for 2013 due to challenging market conditions, it still was a year of significant achievement for the company,” McKim said.  He cited achieving the firm’s safety goals for the year and integrating the purchase of Safety-Kleen.

Because of expected headwinds in 2014 Clean Harbors has revised downward its guidance for 2014. It now expects earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $525 million to $555 million, compared with its previous guidance of $610 million to $640 million.  It revised its revenue guidance to a range of $3.5 billion to $3.6 billion, compared with its previous guidance of $3.7 billion to $3.8 billion.

Clean Harbors expects to reduce its cost structure by $75 million in 2014.