Clean Harbors (CLH) 2 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to the Clean Harbors, Incorporated Third Quarter 2022 Conference Call. At this time all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Clean your Harbors, my General Michael now for Counsel Incorporated. is to host, introduce McDonald, It Thank you, Mr. McDonald.

You may begin.

references in are GAAP provides our the on Reconciliations includes of comparable measures today's non-GAAP affect an risks discussion reporting call to call Officer, Information President XXXX. Thank these everyone. The you you, and Mike historical that XXXX. Buckley. no invite Securities of X, November or today's our directly Gerstenberg; to as Investor believes Chief obligation of in Battles; to Chairman, we Officer, reflect along. today's information Chief Financial Relations, Jim facts SEC Matters results any and considered With through the to morning, place Harbors our in McKim, measures performance. today and its included today's website, appendix Executive Today's the Act made within news and Participants presentation. publicly today, Private Relations additional discussing are company filings follow not Eric me on which to revision management's President could of on Slides of and made measures. Daryl, undue website statements today's filings. are undertakes call of Officer, consistent are revise than that are such Clean opinions comparison and Chief of on we factors this cautioned and Alan operations Litigation is the in Reform S. the good historical release other measurement reliance and SVP posted Operating only not that concerning our available are Investor potential statements, the on EVP to and forward-looking of are statements for release, most results meaning period. of these

Alan call McKim. and the to Alan? our over Founder, CEO me Let turn

Michael. you for joining Thanks Thank Good us. everyone. morning

three. to Turning slide

this discussing executive Before changes. touch to announcement morning regarding I other major results, quarterly management our wanted on our

be of Battles March remain Eric of our future. years XX assume the I'll Chief Officer And Co Board Officer Mike Chief the Chief of this Technology XXst, company. Next that CEOs. foreseeable stepping role as Executive wonderful after time, Operating Financial Officer, will Gerstenberg for the At down and leading Chairman and I'll

For has board the discussed planning years, its past our part regular meeting as succession of agenda. several

and has The with news in been today's strategically, in some financially, is great leading So market for all company share shape strong our works of core time. and is businesses. the

deep to company term a margin and with a in XXXX. me all I in I reviewed results options time model best moving strengthened been built is of the accomplishment The intentions. a decided It have board. and be had long the down on it our $X We felt transition. most made EBITDA verge would of right board organization has of for I've that or Co our billion $X in Therefore, recently achieve Board our the financial XX%. that CEO, and a in and to we're even to my CEO a revenue seamless was billion goal of our aware A realizing step that plan as the for

driving team. strategy, amongst effective M&A focus it the day-to-day And we'll leaders, responsibilities will Gerstenberg Eric months, executive team two these elected With I'll outstanding together. Mike leadership a leadership and transition Battles will overall chairman As shift Xst. responsibilities over technology. take running several to over the company keep senior our company, my April moving guys and turn over founder we role, led the an me the next as to to to

to we're Oracle of middle For the ERP our converting PeopleSoft. in example, from

as lead, several executives, committees, and priority. strong ability of in been management with all steering wider are its of lead So to other are place together the have for their I'll grow us Mike has initiatives my who that company strategic team Mike, as demonstrated Eric to exceptional our in confident been and completing since The that our our and It and underway. number manage continue to founding the company years, leadership I of are will that three a team, continue clearly management keeping Eric stakeholders. results worked top well and oversee this for the grow tech the has well and honor to deliver XXXX. The have under of board along that company.

four. slide to Turning

As we highlight $XXX results reported in for with in quarter, our million and strong growth. contributing consecutive of second EBITDA quarter another this adjusted segments exceeding company morning's earnings the release, both to the QX,

On line, organic we've HPC, healthy the offset from inflation. and pricing top that benefited growth

over and significantly of adjusted were Our his And and flow income, free through year valuable cash working in leveraging allocation prior bottom line up is take our assets that performance net as highlighted the period. remarks. Mike diligent will strategy details EBITDA you adjusted the capital

our the key income Rather, this it's spend a my our From perspective, quarter. you'll Before TRIR, takeaways safety. about Incident a the most of key is not Total one Recordable statement. segment that numbers, see the or on talking let quarter metric Rate, from we me into third important moment get measure our some from of

history. is for first months outstanding. achieve of the our XXXX both X.XX, TRIR one an just through first we our for in was XXXX, the goal annual which TRIR X.XX, sit of nine are and Our In than time QX, at to of less

note, all done has the other standard So as industry. set each Ian. themselves related to job want continue for also our amazing the work did keeping in during a I On safety highlight team somewhat the really that we safe, team year Hurricane our and to an of outstanding

happy teams of Florida within other report storm, facilities assisted in directly the each in that home. and including I'm they by to and nearby to safe, before We we Clean to help our impacted the Harbors the how up proud in all path, states return rallied days. about. and hundreds were temporary able teams all XX several were back It's and storm's have all for Florida, were with of housing some that is that what get running employees I'm other. could

the from from verticals, unprecedented we takeaway disposal and QX our key general many tailwinds. Another for chemical saw is particularly benefiting across demand network manufacturing. of We're assets strong

markets levels branches, for As and U.S. our higher network. to both business in we record parts at regulatory more to stricter coming they on volumes waste continues generate other of our generating do containerized and focus of facilities. is retail Safety-Kleen This manufacturing Through start seeing regulations are are best. ever XXXX than the result what direct into Safety-Kleen a we of undertook our waste the reorganization of

business, Since Clean of grown Harbors year, our we high. an great net the labor across are XXXX demand the of level record retain a And is committed we've to basis. our continuing start all-time nearly and the people. finally at by on force to With direct attract employees

people, of to our expect a continues we investments trend is in continuing a which more for decline, And we great our the As to are turnover result thing one deliver will to returns ongoing that shareholders. continue. hope

is over tripled company back on return our returns invested low today clearly assets. all that Our past extracting teens, into is the years. the five great has capital and on The

fully results second transaction. HPC with the history the yet our that largest last and acquisition ROIC October have in Our potential even are completed not of more really impressive, realized we considering that

Turning the Services HPC more for little half of XX% to increase accounted slide Environmental segments on of the five, revenues. a addition the than in

XX% the out in healthy our summer recycling to and base And Services XX% disposal on HPC's grew through season services from in also Safety-Kleen same QX, XX%. team increased utilities utilization and enjoy addition was HPC. more generated by project revenues XX% drive growth projects, organic We contributions average its grew service higher busy as by service pricing steady we strong facilities, an offerings. benefited rose waste the by and emergency We continues incineration for opportunities. the as Landfill time, core business. response in increased field in volumes business, demand to continue our quarter, reflecting gains and demand. the of environmental capitalized of a Incineration Industrial at group, XX%, pricing our

segment increasing outpaced efforts, kept a network pace locations cost we XX%, and with Environmental margin by our Pricing points as assets. with inflation raised and leveraged productivity from extensive at by growth Looking of line, Service EBITDA basis adjusted top we our and ES year our our our profitability, combined ago. XXX

of year ago. Moving to segment products our in Revenue on in and pricing up SKSS strength increasing the both of base XX% blended a six. versus slide oil QX, was our

base continues we at more additive industry, and increased, gallons filter achieve gathered with in as QX Sales profitability. expectations, including our the also oil collection our We given in a segment, waste this oil volumes XX products by market oil. The than compared SKSS volumes levels, million and XX%. us in conditions, to shortages conditions blended we with to collection base team Adjusted capitalize market million, XX the services favorable direct were of and offer EBITDA or and year in line maximize recycling in gallons ago. oil volumes available wasted to million on in favorable including ongoing cost the $XX the antifreeze profitability recycling. growth oil available Waste rose

of our to all seven. to elements evaluating Turning strategy. We're opportunities slide execute on allocation capital

that would to evaluate and market. provide transactions or more leverageable permanent both M&A acquisitions the assets On continue us in we our large bolt-on support some front, a particular leadership facilities,

have our and given downturn, we we ensure for continuing be future the balance want We to maintain opportunistic. to flexibility to are economic sheet, potential strong the

to drive continue to We invest business our growth. additional also in organic

this also us XX,XXX proceeding Recently, And a XXXX take capacity $XXX we online tons in Kimball, in more And through of concrete and in warehouse help our incinerator accelerate elements share already of will plan. XXXX. will we in new come for remarks. prepare them example, will state-of-the-art the that For We're as greater timeline to the And project repurchase the foundation's of upon foot volumes expanding landfills the our could that wish square facilities the shape. debt we've capacity touch is poured than build-out cell his our winter key XX,XXX built of million yards Nebraska, at we while the strategy phase. several of construction Mike years. year, coming early on

conclude fourth to with strong expect we ahead, quarter. Looking a XXXX

recycling batteries a of of while project forward, to environmental combination for and scarce key such to a initiatives, base businesses our among on We're can that facilitate plans final reshoring to as how well believe infrastructure bill, ends in year of on and hire of great year significantly growth backlog disposal our additional anticipate segment of our rapidly going as new quarter manage environmental environmental spread. we waste based and entering EV party lowering PFAS, having the finish to network We Within also demonstrate semiconductors, through of shape service the business our it results standalone other service positive number as trends, U.S. record are and work. markets the and across XXXX our the high-tech third to business continue a favorable this we're as a All production a of manufacturers trajectory. service, to of a the are benefit maintain With achieving assets. spend. our continue re-refining domestic continuing record and SKSS, both expand healthy we products. demand We now possible regulations strong

all sales. business from production well executing phases, in re-refining is collection Our to to

Clean products, sustainable the solutions. Plus versus our years our only increase ESG in in including confident our value will interest market growing brand, ahead. that of launched the as remain seek recently friendly the more oil base experiencing general We are customers We

which in continuing changes And of are gather and On the collection to side the continuing the which the spread, we for made organization, services the we internal historical rates value impact at that IMO really, XXXX to our the billion, systems supply improvements increase product. guidance of results and $X our overall We In we execute XXXX. available service operating better anticipate this volumes necessary The our demand capture than on margins. for and bottom strengths and our is more EBITDA market. our eight in climate, are We of line annual cost the adjusted mitigation, our inflationary strategies the pricing, and focused collection norms. to believe the re-refineries, of our due better to record for acceleration of continuing reflects both to top efficiencies environmentally our we're on transportation. operational to our than this leveraging achieve segments in to drive

So it let with turn Battles. over Mike that, Mike? me to

Thank morning, you, Alan, and good everyone.

that costs. We year That growth of our perform this from Adjusted points basis XX ability segments. revenue environment, to XXX a a three to statement billion, a basis demonstrates to record and our the basis on was margin from approximately margin controls Even and to and HPC. higher substantially $XXX.X of margin the at and XX% acquisition than gross over as increased XX% this a through both less improve by to revenue and rose HPC other and QX strong Gross the a XX.X%. $XX improved organic, to non of to to on dollar nine, absolute XXXX. margin SG&A industrial million, was basis Turning ago, more coming leveraging exercising million. all largely profit QX improvement points our point improved year. continues down operational in XX.X%, revenue, record a income QX to consisting proven in inflation, than achieve EBITDA to percentage In last we've Margin of slide in initiatives improving addition over of billable spending, expectations. gross of $X.XX equates an price of our improvement XXX of quarter efficiency million gains. performance $XXX SG&A our productivity with business SG&A The number and success reduce XX.X%, HPC

For as XXXX approximately to XX% revenue increased largely expense in HPC. to continue XXXX, a reflecting expected $XX.X of of full expect our as million, we percentage below be level. substantially addition amortization SG&A and the Appreciation QX year to

year margin million income $XXX million. figure from in efforts more for $XXX Income in we double revenue and board XX% QX result the XXXX, to a amortization of as anticipate depreciation with the range million operations $XXX in of was a to For quarter improvements. than combined double essentially our the to continue growth from across $XXX.X Net our the ago. million,

improved ended securities term from of was to debt $X.X less June the to slide marketable expect being year. our net billion. basis short just over a of reduce by XX XX. we sheet at up two for the start QX end. quarter on at XX. balance million, Turning the of Based months Cash end $XXX times and after trailing to midpoint has now to our We three million year the of $XXX approximately on X.X Leverage approximately with guidance, times debt-to-EBITDA than north times on leverage

was cash in accounted the of debt of cash as record, compared million with also a cost is in million by X.XX%, Our to rates. incinerator was ongoing Turn year of We a for XX. neighborhood on weighted year slide million HPC currently $XX.X date. $XX average of The debt doubled construction from was about in free driven approximately XXXX. flows $XX is QX a from $XXX.X and at fixed ago. XX% This million, CapEx to for QX phase a in $XX of ago. $XX QX, Cash and the to that Adjusted be $XX $XX.X now million, net new to primarily our Nebraska disposals to up operations million QX, year in more than flow project million expect million incinerator. the $XXX.X million.

now XXXX, be net in $XXX range of expect For our to we $XXX million. the million CapEx to

cost a During we've million. total bought shares over share. $XX.X date, of XXX,XXX just for an purchased stock shares of to a million cost of back of XXX,XXX cost Year at average QX, a at $XX we $XX.X

buyback approximately our remaining XXX under have We million existing program.

our In value year. to we're from expect streams $X.XX volumes operating $X.XX $X.XX drive raising for benefiting approximately and revised billion. guidance Services, adjusted a This of Demand XXXX us XX. year EBITDA both And our segments, from range here's to full XX% billion slide how we at to waste segments. of more billion Environmental midpoint now full enabled XXXX a our high year our EBITDA all we -- our midpoint HPC. the a quarter how with of facilities recycling translates and contributions to conditions increase XXXX. full current I results EBITDA has of to is the of on third adjusted market are Moving Based year guidance our from for adjusted guidance to disposal

cash full costs a impact fourth Our a $XXX negative to remainder related. year, adjusted year $XXX adjusted of made year, seasonal we cash profitable on our XXXX capital positive the approximately This sees midpoint year primary anticipate XX% inflation, offset rates as results, were our or both The at a segment, of payments our pricing lower pricing and XXXX. significant there along third the adjusted the and wage assumptions, factors the integration strict expect reflects for by midpoint. growth. HPC industry we million, typically expenses the QX, rates, higher free through the that working strong corporate expect increase cost XXXX be we in of now working well corporate as proximately controls trends our with and that largely slowness capital higher with interest guidance the flow In range severance recent cash flow on needs our quarter latest timing ago. free SKSS, the addition Based operational oil EBITDA now at to also Along ultimately market, full due million increased have in to $XXX of two Through rising at to the XX% million interest XXXX. paid up from our from EBITDA our guidance year-over-year base midpoint the in increases the and of to quarter due guidance, the with

those which perspective. much receivables from and can expected, creating was payroll, First, Cash stronger collect few These growth fuel a -- cash as like we creating timing those in our would were -- over collected upfront generated strong come capital paid working faster from the in revenue expenses the our resulting next a expenses, door. revenue supplies we rapid has timing be higher even than the item. months than been

expect as Second, our term, decision be those facilities. We're consistent to receivables of including our a end We cash of CapEx chain setting called all in process, We strategic ongoing light year in inventory capital timely And expectations our levels. we to XXXX historical managing business that buckets two we our receivable anticipated to will of what return it's needs have increase with not increase for any we for Combination that fashion range of there when we for that go the adjusted aging to normal than current in upon. disruptions, global our means when more XXXX, that We're made inventory. working our fully you to a collect spoke bad and working we is is imperative we in customers share items, going use budgeting to critical still in $XX million forward. XXXX free supplies that long and debt our above supply our February. develop our assuming up guidance flow capital August. through our the in

In performance I will operationally the from Kimball as will again planned another re-refining through cash quarter cost Harbors, our Clean terrific, well quarter be service good as However, intelligent pressures spend as robust pricing disposal Margin combined of next led addressing network million. summary, demand for inflationary of with businesses. free north was strong Incinerator in on we by contributions management spread, a with mitigation. and $XX even capitalize million that much and would year's anticipate QX for was $XXX flow, of our

our for Based opportunity outlook. near strong prospects maintaining promising. are QX, remain bullish term XXXX, growth we pipeline Our on and a expected

coming preliminary today. and budget While to another our for months, We Clean in we any XXXX. run year profitable next providing need the guidance of process are for do Harbors expect year growth not in through

as about we and to the nine my recognize me Alan at the board to legacy Let with to company. and our Alan's have shown and the that fill. CEO. I I'm working Eric have at conclude the I'm I'm thankful and formed and belief our shoes working Clean me by chapter for over Co directors Eric in the saying relationship company. thrilled personally, big continue opportunity confident they've Eric, years a of we great Harbors, closely of ability with success while next

Before few as we I comments to questions. well, call Eric open Eric. a for up know the wanted add

I to XX take Thanks, first Mike. Alan good leadership to for the past thank would for publicly morning, the And everyone. his opportunity like tireless years.

service environmental you but You Harbors waste you more provider safer then far America, process in Alan's when service home itself capabilities, offerings our in And is Co geographical is its the Thanks coverage, for not only into the compliant and XX my in years, built and personally the XX started. role. the has last and hazardous been been Clean team. unmatched North something directly the transform that today largest to of industry Clean CEO for to of the quality Harbors honored the working which efforts. excited I'm company have lead Alan. in

opportunity for questions. this extend in our profitably There and please similar company to For you lab know here My don't working a Officer look one overseen those significant that our employees being XX shareholders. of Alan's plus makes grow career, and to year branches Alan I call I've environmental named our Manager Chief rose and background. prosper stages chemist during field Mike of organization. At industry that that open record track to started frontlines and facilities, the disposal and operator, I know success. business our the the on the and General decades I've forward my last with With XXXX, with in in is to I've to of before our and Operating of what the continues of as several worked been Alan, of both XXXX. path pack the for this be two closely well. in through our know my company different our benefit

Thank you.

with the Please Our Raymond questions. and Brown be with come will from of conducting We now Instructions] is your line session. proceed answer James. [Operator question question Tyler first a

good guys. morning, Hey,

Good morning, Tyler.

is [ph] But congrats everything including slowdown. your an on of economic strong, all high. XX backlog the even lot hand-wringing just I potential know there's a time very a at like maybe sounds Hey, Eric, about record. It

So ES year, if in do eating bit a things next of slow help, even that could out XXXX? that backlog that you down maybe think smooth some

as inventory mentioned, backlog deferred our strong. to Tyler, you've very continues be Yes.

Our volumes, finishing incinerator And we quarter anticipate backlog year the first. a We the expect into it we are strong. out down that we of with as volumes through fourth do do strong to whole little throughout smooth to and progressed utilization. do the the anticipate network strong work But in XXXX. continued

Yes, perfect.

Is Okay. include right? Mike That's be [Indiscernible]. year guidance want the the not And quickly helpful. divestiture. just does very I $XX million to this clear, that

Tyler, you're repeat up. Can you the please? question, breaking

over. does to though, $XX not this me year? so divestiture clear sorry. on be the the guidance, cash Let switch flow The side include million Hey,

divestiture The of Airborne in June?

correct. Yes. That's

The cash flow guidance includes that.

include flow cash nor does That not proceeds. any includes the divestitures. guidance It divestiture. M&A today any No. include doesn't Our

interest year? perfect. Okay, year, of is expense, headwind million I QX going next seems it like to if baseline kind through be that next mean, we are like it's something just call million. a $XX -- And back into we if into XX is interest circa it

so. say I'd Yes,

preliminary cash kind have If But, it bit. rates to up a XXXX what going guess at we of as are thought a had we've do about to you flows, take going interest be?

kind on cash Okay. And then pieces next free a moving year. flow in just sounds of just moving -- lot there's that like

I've if of pieces. see to the some big got want Just

It interest But for taxes a to conceptual guy. step a because is of up up. a Kimball. the there's will of going kinds big maybe to like step cash likely working down. those of cash There's potential be potential up some sounds of be capital Are step to with then good the depreciation So some probably pieces? for CapEx

Yes.

that in The Act, other in to back had a to, XXXX. of that as to of We million of part Tyler, And is pay did Cares here we in -- $XX we're And a portion XXXX. the portion -- repay. have $XX thing payroll a repaid defer is paid we we going million about another there taxes XXXX.

we'll done. then be so, And

And my from be so kind that mind we're that the in interest as going that big you XXXX of good mind, guy, of of kind I to think my about some in expense offset think a doing. --

perfect. Okay,

it I over. Thank turn you. Okay. will

Tyler. Thanks,

Thank you.

Our next question of with Hoffman questions. Stifel. is Please your line Michael come with from the proceed

Thank fun doing lot of years. you much. been And your of you last this the for XX it's very Alan, with XX a

boat So to you fishing? the take first where do go

as Soon I'm season of the tuner there. Michael, opens up,

Alright. Could a the with beats XXXX, everybody to -- thesis heck one we as on pivot and XXXX. they of XXXX, the continue markets the immediately And touch you've doing XXXX. of had

One of the seen. things in you've again haven't done XX years XXXX, I which in my

like much growth ever never in organic You've used a XXXX? price permanent as you've of price industry. How change is part business a this of in the model going into

good assets, strong and -- and I I services, that can question, we certainly opportunities. even high use and there's I think accordingly. given we inflation, in pricing. and them, see were Because can -- good we've that learned pricing there's with we safety compliance team, because Yes, and our think aggressive strong a XXXX, scarce our and Michael, we we did it's our in price have for that demand

as think I see an you as I about I changing. think, see as I said, that XXXX, don't opportunity. see that that others -- have

kind a of associated we regulation, them inflation have that we compliance them, of money. amount don't huge a So back of on know these feel well, all it's a costs I why I changed that huge have down bit. like scarce tack let's we with that maintain assets important amount such comes that say, this. and

about through which I process, we're feel have days, through pricing we XXXX, XXXX. think into I really going about budget the roll as early to like good now. we feel I as So a But go right

pipeline we say, strong. that also pipeline, one some very a have that, are QX The is Salesforce, which -- of of point other a some opportunities, XXXX. pipeline thing I'd relate near very last And use we remains have into just but we term, we related,

only not at say, we ago, than I'm have this I are was, about but opportunities talked to really pipeline So let's of which bullish to morning, a thinking look XX remains QX, strong the robust. because days XXXX, more about we going XXXX

going good into if running will, give start, that's so And you us to XXXX. a

Okay.

tie to a Just loose end that. around

You've had because inflation. an unbelievable price of

Let's X%. weren't a say world, normalize pricing number. has Call you a in some point. X% We'll Historically, it it for. to at inflation pick

You volume through a leverage of and relied little bit on price. operating

to of part if of unreasonable way about growth? four at think have the not inflation we to an four, So organic the about price way is is, think

the that's case. say I'd Yes,

I certainly think together, business, containerized wastes of have have continue feeding ability that They price that's landfills, especially into to in price and -- to think Michael, our our -- we're putting budgets I and Safety-Kleen, and we technical think, incinerators. certain again, an businesses. I our aggressively. parts these in as a services

of the a supply lot, IMO Everybody's cool. higher the how think at XXXX, the but. profit at end No, as out to give rebalances about what spread price low and imbalance SKSS happens that because on Can figure the that up overall supply much going in of total management? selling world demand? what demand. to trying in the you might premium But SKSS, us sense to be corrects? we're how Alright, some a better was for And

kick off. I'll this in. can then, Michael, add Mike And Yes.

in the motor -- think we're side And the before. long is I signs. are good all XXXX, since good out better market a I of We're the job business IMO, think, Those business the on than we use have our really oil of growing we with managing I volumes. that think, separated side. coupled ever seeing done think I

over VGO of inventory diesel a We you lot process, a into and refining low that being that side there's moving that to would. at of the be of oil also know level fuel going sort year, with if XX

think And get of we're change base I here. to to not And of wanting being be quite anticipating any oil, Many recycled so, we're significant premium to reflection really frankly, their now that customers is people have have percentage now product. required a re-refined. our are I our oil starting a base think for some

on. inquiries a where the getting other as And well so that of of in for here both the as the world demand parts U.S. we're in lot

really have some Ukraine lot still So, the even think disruption war. global that that runway there's we of been a though business, with we in

Okay.

think so just, I So heard correct. that I --

a You take price. have to used to on discount

suggesting par at premium. to you're you're a on Now

probably there's the premium if base those So oil, work two good? offset -- not even to supply demand in supply a or premium

say point year, be I'd a lot it's Plus, of to additive more we higher were that, Then this opportunity the blended There'll of sell think of we and so more if the has additives products a view didn't Yes, blended forth. sell price our a really that. overall normalizes, to I'm that's world they because contribution. and what EBITDA be which going oil, higher and there'll an shortages happen.

right. All

if would were exposure, that EBITDA energy the industrial total at Of what's I that that markets back into of to what upstream course recession. look sort When throw XXXX, of wringing industrial what only the your the pandemic, And and XX%? all hands to was the sure some Europe. today true a us recession, recession. and but in is on was their Fed got true out there's happened down. about take We've dampen the everybody's What's going XX cyclical months. we that and not more XX% XX% XX% half call of somewhere of importantly, versus going down it second in different the And down XXXX, model the last X% I down X%,

been way I maybe recessions XXXX think being advantage really continue downturns went to a grow other number And a of those company's the of opportunistic during think can and out I there. company where weakness has and crude periods. take in we competitors through and to crashes the positioned during

past it's recession, shape where in here we've have we I grow through like or Michael. there, with financially great our that a at sheet any in the balance think four experienced we're five

Okay.

This is Eric, Michael, add to that. I'll

hazardous capacity some is industry I the time. think strong, the offline, disposal Obviously, utilization of be than that in captives is at coming tighter our utilization to by strong. continues today, market waste the

than in was past. the overall the in capacity market there's less there So much

in new here seeing And than I in think I closer global, construction, business think relook at to more we're that supply rather global. manufacturing, like our And in of than forced spoken whole home seeing really disruption that helping companies that's local really staying we've North increased volumes about, onshoring the chain America. the to clearly, has

some I China. B, of Yes. anywhere but saw the C paper, A,

Yep.

big that has One a XX% vendor Any visibility competitor has last to a about back market is of the due fire. when incineration your been me for on? and offline causing capacity comes

It's be the there'll Michael, quarter. first that December, our into understanding, the up capacity online and comes again in ramping mid

Okay. Thank very you much.

Thank you.

Michael. Thanks.

Thank you.

proceed the questions. with from Jerry of Goldman Sachs. Please coming is Revich line your question with next Our

Yes. everyone. congratulations. And Mike, Hi. Alan, Eric, morning, Good

Thank you.

strategic you of be about is of envision will one I'm early, you context? potential the own to one but CEO a business priorities talk And for sure each outline you Obviously, if you but give Eric, of roles. Mike, just you Will strategy that just any us you take you this wonder the bring or on? would each point? that role? the us Can Co at the other? of your I'm bit focusing will What flavor the know it's core I same, how

Yes, Jerry.

the of given we conversations the out the through answer why Alan that have we've that's to of how as purpose so to with kind team go responsibilities. Eric so about the more But as was more that, we is, kind I can says of the the and to and what. announced So, we that, directionally. we who And have with talked of have to we've is Certainly, matter organization kind work does can that getting announcement as forward. the process. conversations open-end board of fact today, kind of we The today good

defined. years, the as roles all we're kind I responsible Eric together it. for end as well continue of -- kinds those nine the for opinion, to of my in well to that. so have do of past I At And and of will CEOs, Co and do And are worked those day, said, the

the that be has to as everything. like working thing Continuing that still be can conquer Board. Officer. But with to so, He's great divide to and we're relationship we don't and a And is to going think Alan need of still Alan. work. a going to is Technology been. And a Chairman going it's think I the it obviously, to way that and work going all I the is be working be together

going to of experience certainly and forward. his kind as on we're we lean go knowledge So

really of Super. in annual strong within targeting services expansion we've How performance just really environmental the basis that performance And the on term the of we you then, given an this are year, long we strong about margin think the seen year? should context trajectory? margin folks level revisit can this

Jerry. Yes,

XXXX get of were we in back to one numbers So, colleagues -- our bit I'm going that And to we're going this QX report that your on be to of a get margins for to we kind asked we're by based in talked XXXX the ES. back us, to QX to numbers going here U.S. morning, beat in able of about quite kind our to those XXXX

I'm kind proud team of cost the that of get of answer. So really to kind to of around and rallying controls pricing

XXXX. even the we landed above, So we XXXX, had year ES, finish, where it's say with slow QX for start of in that let's going to in the

and margins up pricing there. strategic on view, And so, on ability XXXX from bring our beyond cost pricing, as and I'm controls, execute bullish earlier, intelligent of I in said to to really my

So year low XXs. in we're the the for the going to end ES

basis to the our intelligence, manage run I contracts, sure price of I points think XX, grows safe it plants there. and compliant. really believe from kind well, XX that run ability our make

those think continue. this And from I And you morning. see it stats. safety from see results our our all you things

Yes, this to would is Eric And Jerry. I that. add

that we strategy with out now there the in I that play will continue think be our drive continues more to opportunistic in take opportunity consistent things into we to And over we'll particular, continue year drive to there. costs the right to be And business. have of past effect XXXX. everything price,

on just power Super. view you talk about how in prepared the You earnings structural of cycle lot a And the spoke Safety-Kleen. business? range remarks. full your lastly, that folks changes Can you of in

all if for outlined the us in to business update wondering I'm so, of items And on call? the earlier given the the looks through-cycle bear like performance that in what you today, you your could framework

really in made, here -- is The to lot argument products at acquisition really take $XXX midpoint going guidance gave the shot you forward? oil think some you're I getting of Yes, globally. a of the I been sides Jerry. I'll feel, in that. in as -- morning, we're going at did And XXXX. returns both really separate I we the This a business, the as so $XXX of focus million. year mike. this the XXXX both to end we've this has in the have blended think with how business million, kind on recycled our I And spread that XXXX, kind again, that U.S. the continues. kind of communicated the we I asking Plus that of is managing increased The think, Alan and regulations, of And Clean kind traction well, a what managing goes of

XXXX that next going factors macro and mean, think beyond really have lot I helping factors I us feel of that are again, us So, that about to year, a year. help internal And bullish I kind are for there are SK of this if business. we that

oil of think crude what of through and happens that, kind so, manage able we'll oil to base And to have. like I like be that, we things regardless and always

Thanks. Super.

you. Thank

you. Thank

from David Our is next questions. coming Please line of with the with your Manthey Baird. question proceed

you short to Any clock I CFO you. everyone. of Alan, comments Mike, Thank any ticking And and Good board's roles? is timeline. on here congratulations Eric, direction in Maybe a like the you Do It missed three it. morning, succession for insights have seems you. on the provide? CEO can relatively initial the all

Yes.

the the we're earlier, and talk down about said -- I to need path. the We of fact of working have the as we that get role. purpose the kind announcement recognize that CEO CFO was to a again, and So, Alan to

that. work where have do We that I'm, on still front still think from about us, standpoint. have a Dave, tomorrow, Eric's of again, the few the more I to we And the kind to is COO. purpose are we I'm Today CFO, CEO and and a in today of talk of was months

kind to forward. move already with of broader We that to open is of more plans honest the that. a conversation kind have and organization, with have board. of good -- do shared we got the purpose just We've can We so the today

add. This as that, now. while obviously, a first quarter we continue is succession we've would the for on on have I here worked Eric. has quite Dave on plan a going those that to roles. to in And and been just play forward work planning

all if that. then had of list down if they're for And here, of single interested a versus just your and good give you rank, because you two economy have even here, markets into are pretty operationally, you can top of Thank idea, out the to end well, looking growing and more which I'm kind top Okay. which broad you sort two, in an of window stack the us bottom are bottom? doing the

had Alan, a things a shortfall Well, would mentioned is our probably stronger we couple have is would if much this in probably that for couple, it a I the year additive wasn't there. SKSS,

also at able But base additives also ourselves. need. into both been constrained, have constrained oil buyer they been really they customers the we've So been to get haven't because our

for that margin really And acquisition it's would say pricing, innings regard improvement, there in be thing I I we're think the would cost year. to management. into second early is, the the HPC

and it's $XXX XX I think When $XXX is EBITDA think homerun going business. of like excited of a Safety-Kleen at years about back us here. that We're really for really the Safety-Kleen XXXX, early about today, days, acquisition and million ago to you million acquisition, in I their think be that. in EBITDA kind a

headwinds we front. put additive year Safety-Kleen numbers wasn't if those And place I and drive some the where numbers, better where it on can had systems processes and of for right think be it those we shows the the management would this even margin. we in really

or So Mike, I I'm Eric. other or not mention. really two those want to to you not points things if think, are sure here add

Yes.

there's that top XX. add top a of I'd Alan, a instead think two, like of I I think more

there's certainly, strong business trends many think, I of year. the various areas this been across

strong. and business within are well Field On utilities sales the And waste containerized business, grown Throughout volumes, Our collection strong. collections high. branch an very earlier, base volumes mentioned we've very business collections SKSS branch motor technical and our oil accounts. as collection used had very services, service strong. our oil all-time

top there's So many items.

think, opportunity I on, much that said aligned Alan there. there those but work what on we continue items two need with to to totally

you Thank Terrific. all.

Dave. Thank

you. Thank

is Company. come Our the with proceed James & Ricchiuti Needham of question Please from line next your questions. with

some that last Thank I Is increase could the transition. in Mike, to think morning. add you. Good about I'll elaborate I my think, critical Maybe shortfall you additive to I point you that if in alluded the - that on supplies. congratulations on you've inventory your experienced. opening that wonder of remarks?

Sure, Jim.

So, two happened. things have

say, at decision of all, capacity. a tremendous that There's sure plants try to you a first our We network, we earlier with I'm you strategic made for the of our to cover. demand, downtime in -- problems So incinerators. to unplanned network peers any days, any we Eric in other as said of want avoid looking types down

sure an so, suffer don't unplanned time. for want make And our any period to extended plants that of outage we

want are And to we spares that, so make there. supplies sure critical to do that and

we that, Europe, we we in had wanted place for if and so, Asia lead these that online back could time there our from get and relatively make sure coming the supplies of to And at those was so made problem, a some given long site, we quickly.

critical across prevent network of to spares a So inventory our to decision for the we of try made strategic add to more the little facilities that. kind

cash bad bit a a perspective. that's of from guy flow a So

long that our have incinerators think of well from as other spares. term critical a to in the facilities importance these bode of strategic will kind of kind you about standpoint, think far I as

let's was the, that the side. on deal the say, So spare

can On sure a go in about that's our a months we winter of to the customers the service just pricing being higher, oil strategic the make the -- try putting cost as forward. little side, we little tanks through to and oil be more that our

bode And well I a So again, -- to we've in added into XXXX. our little inventory. that have think in oil

maybe have I on you that a when don't in look kind the the you more Thanks. it. a about business? And opportunity base it's know XXXX. And it to wondering think like contribution, thinking XXXX? impact has business? Got this are PFAS How what potential the of case guys I'm Is meaningful might the meaningful of in area in

answer So I'll Jim, is Eric. this that.

taking of to advantage Our high temperature units. around our at strategy continues permitted incineration RCRA be predominantly

As we incinerators have And PFAS said, our have that compliance that. treatment ago, sites manage we being properly into our contaminated wastes landfills, and technology on opportunities portfolio to to well our undertaken activities. other continue also can out we mentioned, That quarter destroy testing advantage that have remedial as to water a we have proven customer contaminated systems build perform as material. and those treat the our to of we take well

point grow We really what But particular how are to our contribution contaminated seeing pipeline, here we that into soils said be and at a be continues XXXX. opportunities this needless for and work with treatment, might continued define that hard in customers, us. growth in our to water pipeline to

of of I And well. the question and to the gone then, or future you've way impacting have terms appears me in anniversaried acquisition you're last integration that impacted term for is, M&A? final near is month the perhaps guess, about thinking intermediate I'm how has opportunities, opportunities HPC the wondering

Yes, Jim.

focus mentioned end more Alan's going much your focus year work to been think in on the success. our it's probably times two this from shape in are that a cash leverage to standpoint, point, innings and has good been our balance would to earlier. and and, good with there's really still say a So Mike. I has been I'd to say levered. he is sheet to I we're the that, focus integrate our HydroChem And think to as under But I integration. that, and being point, early do,

in I that there out to the opportunity, that continue smaller nature plenty of at. are think of we tuck-ins there's probably look

other to Alan recession that -- opportunities of and permanent there if out said were XXXX, to there. some there may come that of facilities of kind coming buy optimistic key not companies in want our some a we is And too, assets are be earlier As so these out there if good.

and to cash problem could in our sheet, a we're strategic flows, as advantage to we was give ourselves the around so that to take there And priorities that try nimble around of. balance be opportunity going if

Thank you.

Thank you.

your Please proceed Our from Oppenheimer. line the next question with comes Kaye with Noah questions. of

Alan, And of on to right the and amount you. you mean, personalities about taking shared CEO and mix you succession. boxes. makes of Eric, the successful, I of being questions. what check the for skill And values all Eric responsibilities ask think I fair is board. business and need sets I a right? There then and congratulations, of and decision Happy structure complementary a Thanks rights And And really Co want delineated. organizational those Mike. for literature Mike, this clear backing

delineating to and it responsibilities. the seems you're respects, in months, to So, how obviously, important over communicate a lot of investors coming those

So just the when street? anticipate communicating to that and how do you

Well, Noah, this is Eric.

about prepared boxes more continue So out be get we'll, to internal the details after being Mike as that we QX work would through mentioned, talk a of organizational get we we'll That of to are The support do Co said responsibilities and shared earlier, to of throughout great structure many said, QX. worked you long the as the Alan, board, we've the check a that together support the time. relationship We've to many for the here. have we to CEO today. of point

Harbors. the Clean needless future. to But is it do for check the so, And to Mike. more with again, details We we'll of boxes you're be structure here say, disclosing here. And work And excited I'm us right. those an in all just excellent

to do kind And point strategy add enable good our going kind are think think want of kind the to responsibilities, the of XXXX. forward, important opportunity that. to talk some who going team. how we be in Investor the I Not who's but a day, your would I exactly I Noah, just form it's that to sure to about of to do exact that, we to can say Day have that

there this which the want We're then year? versus date, have just for helped momentum levers specific like, It of taken call. this as little a for seems folks business. already then your into forward And Maybe quarter? talk price pricing prior XXXX. actions Great. the that pricing taking come you price you've could go parts rolls I in us much of looking volume actions a contribution back to discussed we lot about ES bit within into of pricing some a are how and continued that on to lot to to about think of to And next were quarters, unpack year impact in over how think growth that.

no, is Mike. Yes, this

taken, XXXX. there a So of costs here are that and whether will be we've impact have challenger it our be as QX, into is, into and have into QX, rollover actions kind also costs gone it amount labor, well, XXXX. fair supplies, rollover it in of whether be QX, whether pricing good trans, those The up

think My through I the we into year. the in that of of And will going put view think in certainly we'll of pricing we're to continue that that, that place. half so, is fair good bode a well, -- And the rollover have to amount I initiatives drive XXXX. price first have should

markets. down survive think turn of increases, any see price I in For type us help any we that to end kind that's going new and of

Okay. Thanks very much.

Thanks, Noah.

Thank you.

Our Please line from Larry Securities. with your proceed the CJS with next of coming question is Solow questions.

good It's Pete Larry. morning. for Lucas Hi,

You offset me months? Can the in over those speak potential of delayed to timing those see lot with as the about it a economy? leaves side. a have so we And been turnarounds manufacturing XX you on perhaps just major question XXXX of Have of lot, covered last the a can one facilities? industrial at more guys a slowing

Peter. Yes,

Eric. is So this

year, this course business very as the industrial Our been plants strong throughout -- turnaround XXXX. turnarounds their delayed of the into has

QX extended So, point all we they season, market and experienced more And markets, turnaround robust, said, to refining chemical very to bit and of continue of turnarounds season were usual little they're that running what know we very more tilt making a continued be through the probably performed. strong. be shorter than QX, strong and work the and into robust anticipate because to had that run we of we the refinery oils. very, the being That needed continue than from a but because turnaround products amount turnarounds full

strength very continuing, especially season bullish we're turnaround and industrial combined platform HPC the so, on our And about with the business.

on to wraps plan. and Fantastic. it congratulations me, the for succession all you That up of

Thanks, Pete.

Thank you.

the question next Our from comes with Zane Davidson. questions. line with of your proceed Karimi D.A. Please

Mike again, of Eric for respective strong Hey, congrats Alan, and each your results. congrats on transitions. gentlemen, morning, good the And

Thank you, Dave.

but on are been consolidation to should being believe due we questions effective what taking significant internal asked, And initiatives moving improvement, helped alluded the as you of to forward? lot to you rents reflected HPC. with a be other a the percent what little improvement? SG&A expecting touch So, that more fairly want of right? a with bit I [ph], which a But They

Mike. a data there out done kind our revenue things of kind large manage is there's is this Whether of SG&A, And there. at are Yes. costs, we've pretty to of good. our that growth. you structure or The Zane, given lot look corporate those that up both of ticked moderately cost

project be versus simple, our to try much locations. still we continues a more We've party consolidation is resources rent priority this that. tried limit operating of do that sites a things our We of do. third expense for and as to of to manage work to internally to There's using Some and Site amount far the third more pay party done have help lot year us. to as to spend a work. lot

three in the and And We year cost help some most here to kind of importantly, been look jurisdictions for also labor. that's a and past two, of cost or out offset like year we us that used have helper, as of lower exercise. of the

corporate have see cost I that XXXX. management the -- good So down. driven manage SG&A well. all see on the continuing all do and I We kind kind I those things this don't of slowing very ourselves of side. really see into headcount

us a can incremental much hold kind to business grown. tried line of work. offset been have as technology headcount has That's for the winner as on flat the the using remain headcount, a big We to as we and level

non-billable continue again, part to lean our of think just culture, culture, things is is. and And all try very as That so our possible that, doesn't And that. do continue tightly. to of That headcount we'll on think these CEO I Zane, in whoever I as we as manage part XXXX. also, our as run to change

gentlemen. you, Thank

Zane. Thanks,

Our Levine questions final come Scott of from line your the questions. with with proceed Bloomberg. Please

Hey, you how cetera, or terms to in grow of couple continuing last about blending them regard good it strong IMO I pull on will recycling, back an the And want levels first a way demand If have continued around to know in that an now prices prices? And is, base increase off -- the more we the pullback been mix off the it enable seeing little couple think on little bit. is business my But indeed oil killing morning, surging, a the we grow? years? and business obviously, the see continue that issue to shortage years guess guys with last push everybody. I I that blending. in question congratulations a to bit confident been to of promotions. very grow of we're do can et oil based you additive and have Are just all

of out which in be or and to sales the where Alan. for we this were start anticipate back somewhere us normalizes, additive take Yes. because shortage side, better there next a place more That second This probably our demand. to we is margin year, on I'll quarter there strong when will was blended first here. certainly shifting the

we direct a that with But for even but built a support I have refineries with clearly, were on as materials hydrogen we've of to additives, had We have as those well. sell shortfalls, effort. continued that mean, organization this also number mentioned to locations distribution we now year. allocation and our hydrogen

have get so our pressurized plant We going Majeure. Force own are been to larger to added COX, our caught in a plants not a was COX run Baltimore CapEx Even putting again, our short to generate hydrogen and in because of we -- we're our on allocation. that number

bit of really there's a been disruption. So quite

on sort been some sales when the think blended as as of track XXXX, of byproducts with our you about out with coming plants. at we've successful things back our well So, that of to getting be program, able

through our the gas, of Our continue some really work all next year. vacuum things, that is asphalt bottoms, to momentum think we and those done going team great oil, fuels, has

So a lot in there I headway think. good the future, of

Alan. Good really one One stuff. Thanks, last quickly.

as in again, you fields, are you as have guys and the growth they on businesses. have the energy that seeing in clearly et guys interest Do with production several U.S. potential, And really heard years haven't we're We cetera. the here where much shale and or of last when is oil the not you prices oriented with growing you maybe or larger something in that businesses get in want process really businesses maybe interest the energy on newer any get thought a business to think you side into in those want or to about line? your

Yes.

of in ongoing ourselves but us captives XX which want the the well oil very that number is. in for strong its the a really focused been really business And years. seen on particularly are gas And our Been oil thing that's or got the sort industrial. environmental and space. is extent some how sort Canada, of area, that Western an presence side more about is of year. we've shale coming to particularly feed really to that of incinerators at trying that TSDFs the additional would really Kimball activities our Our disposal but us interest those get like We focus. going leverage and disposable we grow with the talked on our sands, the considering doing with help of processing business. up environmental certainly on down, [ph] shutting our area looking the that waste all in is XX on the in in do that's picking in focus over we've where up realizing assets this We really to position We capabilities to really last Eric

Thanks. Understood.

Yes.

Thanks Scott.

this the I back turn now And for There you. questions Thank like the comments. call over at to McKim closing to Mr. time. to would any

the Eric Mike, be at week and Okay. Thanks will in next us myself Baird's Conference participating for Industrial Chicago. today. joining

you stay to Thank see or events. of we and a today. some safe future there investor hope you So

Thank you. today's concludes does This teleconference.

you for at great participation, your lines day. may You and a time. this disconnect your have Thank