Revenue: Reported a 5% top line growth for Q1 2024.
Adjusted EBITDA: Increased by 7%, with margins improving year-over-year.
Environmental Services Segment Revenue: Increased by 10%, with two-thirds driven by organic growth and one-third from the acquisition of Thompson and HEPACO.
Adjusted EBITDA in Environmental Services: Increased by 16%, resulting in margin expansion of 130 basis points from Q1 2023.
Safety-Kleen Performance: Faced a challenging demand environment for both base oil and lubricants leading to lower pricing; however, volumes produced and sold were similar to the prior year.
Net Income for Q1: $69.8 million, resulting in earnings per share of $1.29.
Gross Margin: Improved by 80 basis points year-over-year to 29.5%.
Future Guidance
Adjusted EBITDA Guidance for 2024: Raised to a range of $1.10 billion to $1.15 billion, with contributions from HEPACO and Noble Oil included.
Environmental Services Growth: Expected to increase 10% to 12% from 2023.
Safety-Kleen Segment Growth: Anticipated to increase 6% to 8% from 2023.
Corporate Segment Results: Expected to be up 8% to 9% this year compared to 2023, with negative adjusted EBITDA results as a percentage of revenue to be flat to slightly down from the prior year.
Adjusted Free Cash Flow: Forecasted at a range of $340 million to $400 million for 2024.
Capital Expenditures for 2024: Planned in the range of $400 million to $430 million, including significant investments in the Kimball incinerator and the Baltimore facility expansion.
Trends, Market Conditions, Sentiment
Volume Growth: Especially noted in the Environmental Services sector with strong drum volumes across their network.
Pricing Strategy: Continued focus on disciplined pricing approach to outpace inflation and improve margins.
PFAS Opportunities: Highlighted as a key area for growth, with a healthy pipeline of projects and anticipation of regulatory standards setting a stronger foundation for market expansion.
Partnerships and Innovation: The partnership with Castrol on a sustainable product offering marks a significant validation of Clean Harbors’ sustainable base oil.
M&A Activity: Clean Harbors continues to see a strong pipeline for acquisitions, with a focus on strategic deals that complement their growth strategy.
Market Dynamics: Favorable conditions and strong demand across several of Clean Harbors’ service lines are key drivers for ongoing growth.
Notable Quotes
”Our total recordable incident rate or TRIR was $0.69 for the quarter, which gets us off to a good start to the year.” - Marking the emphasis on safety performance.
”We opened the year with an even stronger than expected first quarter performance as we exceeded the guidance that we provided on our year-end earnings call.” - Highlighting the strong start to the year.
”We have a clear line of sight across multiple businesses that should enable us to achieve our profitability goals for this year.” - Reflecting confidence in meeting financial targets.
”Q1 represented our tenth consecutive quarter of year-over-year adjusted EBITDA growth in this segment and the highest Q1 adjusted EBITDA margin for the ES and company’s history.” - Demonstrating continued financial success and growth.
”We are thrilled to have [indiscernible] endorsement by partnering with us on their close — their own closed loop solution.” - On partnering with Castrol for a sustainable lubricant product.
