Waste, Recycling Firm Clean Harbors Posts First Period Loss

Waste and recycling firm Clean Harbors Inc. posted a net loss and lower revenue for its first quarter, as its oil and lodging operations slumped.

The Norwell, Mass.-based Clean Harbors reported for the period ended March 31 a net loss of $7.1 million, or 12 per diluted share, compared with net income of $9 million, or 15 cents per diluted share, in 2014.

Revenue fell 13 percent to $732.5 million from $846.7 million, according to a news release.

“Our first-quarter results fell short of our guidance due to a lower-than-expected performance in our Oil and Gas Field Services and Lodging Services segments,” said Alan McKim, Clean Harbors chairman and CEO. “The significant crude oil price decline caused an unprecedented slowdown in those segments as customers abruptly reduced capital budgets, cancelled projects and renegotiated contracts. This challenging environment was compounded by severe winter weather that resulted in project delays in several businesses during the quarter.”

He said landfill volumes rose 21 percent on strong waste project work.

Clean Harbors also said it has expanded its planned carve-out of some business segments. It is adding the Lodging Services segment to a stand-alone public entity that previously included just the drilling-related mobile assets and the Oil and Gas Field Services segment.

Because of market conditions Clean Harbors now expects to be at the low end of its previously announced 2015 adjusted guidance range for earnings before interest, taxes, depreciation and amortization (EBITA) of $530 million to $570 million. The guidance now includes the company’s recently completed acquisition of Thermo Fluids Inc.

For 2014 Clean Harbors posted a net loss of $28.3 million compared with net profits of $95.6 million a year earlier. The 2014 results included an impairment charge of $123.4 million. Revenue declined 31.3 percent to $3.4 billion.

But the company did complete a major acquisition during the 2015 period, purchasing hazardous waste hauler Thermo Fluids Inc. (TFI) from Nuverra Environmental Solutions Inc. for $85 million. Scottsdale, Ariz.-based TFI collects and recycles used oil, oil filters, antifreeze products, parts washers and solvents.

Clean Harbors’ 2015 results fell short of Wall Street expectations, according to the AP. The average estimate of eight analysts surveyed by Zacks Investment Research was for the company to break even on a per-share basis.

Leone Young, in her latest Waste360 Business Insights column, examined some of the common financial themes in the industry during the first quarter while focusing on the four largest publicly traded waste and recycling firms. Bad weather during the period was frequently identified as a factor. She also cited the slumping oil industry, which particularly hurt Waste Connections Inc. and its exploration and production (E&P) waste business.