Q1 2024 Clean Harbors Inc Earnings Call

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It is now my pleasure to turn the floor over to your host Michael Mcdonald General Counsel for clean harbors, Sir the floor is yours.

Thank you Christine and good morning, everyone with me on today's call.

Co Chief Executive officers, Furstenberg, and Mike battles, and our EVP and Chief Financial Officer, and SVP of Investor Relations, Jim Buckley slides for today's call are posted on our Investor Relations website.

Matters, we are discussing today that are not historical facts are considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 99.

Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today may one 2020 barrel infill.

Information on potential factors and risks that could affect our results is included in our SEC filings.

<unk> undertakes no obligation to revise or publicly release the results of any revision to the statements made today other than through filings made concerning this reporting period. Today's discussion includes references to non-GAAP measures clean harbors believes that such information provides an additional measurement and consistent historical comparison of its performance reconciliations of these measures.

The most directly comparable GAAP measures are available in today's news release on our website and in the appendix of today's presentation let.

Let me turn the call over to Eric Furstenberg, Eric.

Thanks, Michael Good morning, everyone and thank you for joining us before we get into our prepared remarks, I want to take a moment to recognize our 23000 strong clean harbors team for their efforts in Q1.

For your focus and dedication to safely delivering on our commitments to customers and the communities we serve.

I also wanted to welcome to have a go and noble teams to clean towers, we look forward to your leadership and insight as we continue to set the standard for our industry.

I also wanted to highlight our safety results for Q1, not a financial metric, but in our view the most important metric our total recordable incident rate or <unk> was <unk> 69 per quarter, which gets us off to a good start to the year.

Starting on slide three we opened the year with an even stronger than expected first quarter performance as we exceeded the guidance we provided on our yearend earnings call.

A 5% top line growth drove a 7% increase in adjusted EBITDA with margins improving year over year.

Robust demand continues across our environmental services segment, all of our businesses Technical services safety Kleen, environmental industrial services and field services delivered better than expected growth in the quarter.

Volumes coming into our disposal and recycling network continue we'll increase our Es segment grew both organically and through strategic M&A from ethical.

Within F Ksf's, which Mike will cover in more detail lubricant pricing was soft until the very end of the quarter. Our corporate segment was up year over year due to compensation acquisitions and professional fees.

Turning to environmental services on Slide four segment revenue increased 10% with two thirds driven by organic growth from volumes and pricing and a third from the acquisitions of Thompson and half ago.

Adjusted EBITDA increased 16%, resulting in margin expansion of 130 basis points from the first quarter of 2023.

Q1 represented our 10th consecutive quarter of year over year adjusted EBITDA growth in this segment and the highest Q1 adjusted EBITDA margin for the Es in company's history.

Our technical services business was the primary contributor to top line growth posting a revenue increase of 11%.

Our record level of Q1 drum volumes slowed throughout our network, which also helped drive the record deferred revenue you see on our balance sheet.

As a result of heavy Q1 maintenance schedule and weather disruptions in January which we noted on our year end call incineration utilization was 79% in the quarter in line with our expectations average incineration pricing increased 6% in the quarter, thanks to mix and pricing.

Despite all the turnaround time than you've had in the early part of 2024, we still expect that our incinerator should deliver mid to high <unk> utilization for the full year.

Although landfill.

Modestly year over year healthy drum volumes base business drove a 16% increase in average price per ton.

As with our incinerators landfills should deliver a very good quarter at 2024, given the market conditions, we see today.

Those favorable conditions should also support the other 100, plus permanent hazardous waste management facilities, we maintain in our network.

Safety Kleen environmental services generated another quarter of record revenue growth climbing, 9% largely on the strength of containerized waste and other core services.

Field service revenue was up 10% in Q1, driven by consistent base business E. Our events and high employee utilization.

Service results included in the first week of contributions from <unk>, which we acquired towards the end of March early returns on that acquisition I was very encouraged about its future potential.

Industrial service revenue grew 7% in the quarter largely from the addition of Thompson as that group continues to focus on higher margin work and cost controls.

Overall, he has produced an excellent start to 2024 and in Q1 with that let me turn things over to Mike Mike.

Thanks, Eric and good morning.

S. K S. F. On slide five you began with the challenging demand environment for both Batesville, and lubricants, which led to lower pricing, particularly for our non contracted volumes sold in the spot market.

The volumes produced and sold were similar to the prior year. So it really was the pricing environment that impacted us, which you can see in the euro year over year adjusted EBITDA comparison.

The weakness in pricing was partially offset by the ship. We had completed two a charge for oil collection model versus the pay for oil average, we had a year ago and our waste oil collection services.

We added 55 million gallons of waste oil as we aggressively manage our spread together feedstock at the best price possible.

Despite the difficult Q1, we're encouraged by more recent trends based oil demand has begun to recover leading to a rising market prices as we head into the balance of the year.

In Q1, we increased our blended sales volumes by 36% as we focus on more value added products blend.

Blended sales where pricing tends to be less volatile than base oil accounted for 21% of our total volume sold up from 15% a year ago.

Another program, which will assist in both the stability and profitability of this segment is our group III base oil project.

Now have we now have dedicated one of our smaller re refineries to full time group three production.

We are enthusiastic about the long term potential for this initiative as we moved to open more group III production in the coming quarters.

And lastly, we have been hard at work in recent years to find the ideal partner that recognizes the value of our clean plus base oil and lower carbon footprint and carriers wanting to align with someone who has the brand recognition to meaningfully impact the lubricants market.

Turning to slide six we are partnering with capital on the nationwide launch of more circular a lower carbon footprint.

This is an exciting and innovative program and we're thrilled to work alongside with the industry, leading brands to bring it to their customers.

Under the terms of this multiyear agreement capital will be responsible for selling this sustainable product offering by using or considering considerable marketing muscle to drive this success.

Safety Kleen will be responsible for the collection of wastewater from Castro customers in the program. We will also supply a baseball at the castle to include in there more circuitry lubricants.

We see this arrangement is a strong validation of our high quality sustainable base oil given the recognition of capital lubricants and brand.

This program a ball following a series of highly successful market trials and will be officially launched later this month and a key industry Expo.

We are thrilled to have capsules endorsement by partnering with us on their close their own closed loop solution.

We have said and E V transition plays out, we said that and as easy Danjus. It plays out over the next several decades, we see our green base oil as an ideal bridge for this mark it offers an opportunity for companies, particularly those with large vehicle fleets to immediately lower their carbon footprint.

We look forward to updating you on this promising program in the quarters ahead.

Turning to slide seven Eric and I, along with the entire executive team are laser focused on our capital allocation strategy.

We are now in the second year of vision 2027, our five year growth plan that relies on a mix of organic growth and acquisitions.

As I outlined on our last call and I believe it bears repeating the foundation of the strategy is to drive margin improvement every year through pricing and productivity gains and by achieving economies of scale not only a highly levered to network a permanent facilities and unique assets, but also a highly trained personnel provider.

Customers with increased value from our services.

This will continue to lead to increasing cash flow generation and long term shareholder value creation.

The ethical acquisition with a headline M&A transaction in Q1, we also recently completed an attractive bolt on deal with the acquisition of no oil to support our collection footprint in the mid Atlantic market and add more re refining capacity.

We continue to evaluate other potential transactions and see a healthy pipeline of candidates, we expect to remain active with acquisitions as we execute against vision 2027.

In terms of growth Capex, we continue to advance our Kimball, Nebraska centimeter, which remains on track to open commercially in Q4.

Suffice to say, we are eager to bring this $200 million online and that capacity is much needed in the market based on many trends be shoring to new regulations that feedback to government infrastructure spending.

recently completed and attracted Bolton deal with the acquisition of no oil to support our collection footprint in the mid-Atlantic market and add more re-refining capacity.

Unknown Executive: We also recently completed an attractive bolt-on deal with the acquisition of Noble Oil to support our collection footprint in the mid-Atlantic market and add more re-refining capacity. We continue to evaluate other potential transactions and see a healthy pipeline of candidates. We expect to remain active with acquisitions as we execute against Vision 2027. In terms of growth CapEx, we continue to advance our Kimmel, Nebraska incinerator, which remains on track to open commercially in Q4.

Adding this permitted scarce asset will create another long term competitive advantage for clean harbors.

On our last call, we detailed the planned $20 million expansion of our Baltimore facility to create a regional hub with manufacturing capabilities. We completed the purchase in Q1, and we'll be investing in and upgrade the site over the course of the year with material savings to be achieved in 2025.

We continue to evaluate other potential transactions and see a healthy pipeline of candidates. We expect to remain active with acquisitions as the execute against Vision 2027.

In terms of growth cap X, we continue to advance our Kimmel, Nebraska incinerator, which remains on track to open commercially in Q4. Suffice to say, we are eager to bring this $200 million investment online, as that capacity is much needed in the market based on many trends, from reshoring to new regulations such as PFAS to government infrastructure spending.

Let me conclude my remarks by emphasizing how bullish we are and our growth prospects in 2024.

Unknown Executive: Suffice to say, we are eager to bring this $200 million investment online, as that capacity is much needed in the market based on many trends, from reshoring to new regulations such as PFAS to government infrastructure spending. Adding a permitted scarce asset will create another long-term competitive advantage for Clean Harbors.

Favorable market dynamics in the current economy should support our continued momentum we have a clear line of sight across multiple businesses that should enable us to achieve our profitable growth plans for this year.

Adding a permitted scarce asset will create another long-term competitive advantage for Clean Harpers.

Demand for our services continues to accelerate as evidenced by Eric mentioned of a record deferred revenue and strong pipeline of products.

On our last call, we detailed the plan 20 million expansion of our Baltimore facility to create a regional hub with manufacturing capabilities. We completed the purchase in Q1 and we'll be investing in and upgrading the site over the course of the year with material savings to be achieved in 2025.

Unknown Executive: On our last call, we detailed the planned $20 million expansion of our Baltimore facility to create a regional hub with manufacturing capabilities. We completed the purchase in Q1 and will be investing in and upgrading the site over the course of the year, with material savings to be achieved in 2025. Let me conclude my remarks by emphasizing how bullish we are on our growth prospects in 2024. Favorable market dynamics and the current economy should support our continued momentum.

In addition, our conversations with customers about their future needs and the opening of the Kimball incinerator reinforces our confidence in the Es segment.

For S. K S S with all the initiatives highlighted earlier, several which have great multiyear potential we expect to return that segment to more stable profitable growth in 2024 overall, we have must be excited about in both of our operating segments. This year with that let me turn it over to our CFO Eric duties.

Let me conclude my remarks by emphasizing how bullish we are on our growth prospects in 2024.

Favorable market dynamics and the current economy should support our continued momentum. We have a clear line of sight across multiple businesses that should enable us to achieve our profitable goal plans for this year. Demand for our services continues to accelerate, as evidenced by Eric's mention of our record deferred revenue and strong pipeline of products.

Unknown Executive: We have a clear line of sight across multiple businesses that should enable us to achieve our profitable growth plans for this year. Demand for our services continues to accelerate, as evidenced by Eric's mention of our record deferred revenue and strong pipeline of products. In addition, our conversations with customers about their future needs and the opening of the Kimbell Incinerator reinforce our confidence in the ES sector. For SKSS, with all of the initiatives highlighted earlier, several of which have great multi-year potential.

Thank you, Mike and good morning, everyone.

Turning to the income statement on slide nine you started off the year on a strong note with another great performance by the Es segment.

The positive demand trends that have underpinned three straight years of healthy revenue growth. In this segment continued in Q1 as revenues across all four businesses, yes, we're up from the prior year.

In addition, our conversations with customers about their future needs and the opening of the Kimball Incinerator reinforces our confidence in the ES segment.

For SKSS, with all the initiatives highlighted earlier, several of which have great multi-year potential, we expect to return that segment to more stable, profitable growth in 2024.

Adjusted EBITDA of $230 million was above the expectations, we provided on our Q4 call and up 15 million from a year ago.

Unknown Executive: We expect to return that segment to more stable, profitable growth in 2020. Overall, we have much to be excited about in both our operating segments. With that, let me turn it over to our CFO, Eric. Thank you, Mike, and good morning.

Our adjusted EBITDA margin in the quarter was 16, 7% up 20 basis points year on year and driven by the Es segment.

Overall, we have much to be excited about in both our operating segments this year. With that, let me turn it over to our CFO , Eric Dutus. Thank you, Mike, and good morning, everyone.

Gross margin in the quarter was 29, 5% an increase of 80 basis points from a year ago within.

Eric: Thank you, Mike, and good morning, everyone. Turning to the income statement on slide 9, we start off the year on a strong note with another great performance by the EF Secondary. The positive demand trends that have underpinned three straight years of healthy revenue growth in this segment continued in Q1, as revenues across all four businesses in PS were up from the prior year. Our adjusted EBITDA of $230 million was above the expectations we provided on our Q4 call and up $15 million from a year ago. Gross margin in the quarter was 29.5%, an increase of 80 basis points from a year ago. Within gross margin, we are seeing the benefit of our continued focus on pricing, greater productivity, and operational efficiency.

Eric J. Dugas: Turning to the income statement on slide 9, we started off the year on a strong note with another great performance by the ES segment.

Within gross margin, we are seeing the benefit of our continued focus on pricing greater productivity and operational efficiencies.

Eric J. Dugas: The positive demand trends that have underpinned three straight years of healthy revenue growth in this segment continued in Q1, as revenues across all four businesses in PSWRUp from the prior year.

SG&A expense as a percentage of revenue was 13, 2% in Q1, which is slightly higher than the prior year's quarter.

Eric J. Dugas: Adjusted EBDA of 230 million was above the expectations we provided on our Q4 call and up 15 million from a year ago.

Some of that increase was acquisition related as we absorbed some initial SG&A costs and incurred some incremental transaction related severance costs as well as higher professional fees.

Our adjusted EBITDA margin in a quarter was 16.7%, up 20 basis points year on year, and driven by the ES segment.

We expect this percentage to improve in the upcoming quarters as we continue to manage SG&A head count and further integrate the hepa co and noble oil acquisition.

Gross margin in the quarter was 29.5%, an increase of 80 basis points from a year ago. Within gross margin, we are seeing the benefit of our continued focus on pricing, greater productivity, and operational efficiencies.

For the full year 2024, we anticipate our SG&A expense as a percentage of revenue to be in the mid 12% range, which is consistent with prior year.

Eric J. Dugas: SGNA expense as a percentage of revenue was 13.2% in Q1, which is slightly higher than the prior year's quarter. Some of that increase was acquisition related as we absorbed some initial SG&A costs and incurred some incremental transaction-related severance costs as well as higher professional fees.

Unknown Executive: SG&A expense as a percentage of revenue was 13.2% in Q1, which is slightly higher than the prior year's quarter. Some of that increase was acquisition-related, as we absorbed some initial SG&A costs and incurred some incremental transaction-related severance costs, as well as higher professional fees. We expect this percentage to improve in the upcoming quarters as we continue to manage SG&A headcount to further integrate the HEPA Co For the full year 2024, we anticipate our SG&A expense as a percentage of revenue to be in the mid 12% range, consistent with prior years.

Depreciation and amortization in Q1 came in at $95 million up from a year ago due to our acquisitions.

For 2024, now expect depreciation and amortization in the range of $390 million to $400 million.

Income from operations in Q1 was approximately $125 million.

Eric Dutus: We expect this percentage to improve in the upcoming quarters as we continue to manage SGNA headcount and further integrate the hepo and noble oil acquisition.

Up slightly from the prior year.

Q1, net income was $69 8 million, resulting in an earnings per share of $1 29.

Eric Dutus: For the full year 2024, we anticipate our SG&A expense as a percentage of revenue to be in the mid-12% range.

Turning to the balance sheet highlights on slide 10 cash.

Cash and short term marketable securities at quarter end were $443 million.

Eric Dutus: which is consistent with prior year.

Eric Dutus: Depreciation and the eminization in Q1 came in at 95 million, up from a year ago due to our acquisitions.

In connection with the help of Cowen Novo transactions, we added $500 million and incremental debt to our term loan to finance those deals.

Unknown Executive: Appreciation and Amortization Q1 came in at $95 million, up from a year ago due to our acquisition. For 2024, we now expect depreciation and amortization in the range of $390 to $400 million. Income from operations in Q1 was approximately $125 million, up slightly from the prior year. She won net income with $69.8 million, resulting in an earnings per share of $1.29.

Eric Dutus: For 2024, we now expect depreciation and humanization in the range of 390 to 400 million.

Even with those additional borrowings our balance sheet remains strong.

We ended Q1 with total debt of $2 8 billion.

Eric Dutus: Income from operations in Q1 was approximately 125 million.

Our net debt to EBITDA ratio of two four times.

Eric Dutus: Up slightly from the prior year.

And continue to have no significant debt amounts coming due until 2027.

Eric Dutus: G1 net income was $69.8 million, resulting in an earnings per share of $1.29.

Our weighted average pretax cost of debt at quarter end was five 7%.

Eric Dutus: Turning to the balance sheet highlights on slide 10,

Unknown Executive: Turning to the balance sheet highlights on slide 10, cash and short-term marketable securities at quarter end were $443 million. We added $500 million in incremental debt to our term loan to finance those deals. Even with those additional borrowings, our balance sheet remains strong.

Turning to cash flows on slide 11.

Eric Dutus: Cash and short-term marketable securities at quarter end were $443 million.

Cash provided from operations in Q1 was $19 million.

Eric Dutus: In connection with the Hepaco and Noble transactions,

Reflecting our seasonally weakest quarter.

Eric Dutus: We added $500 million in incremental debt to our term loan to finance those deals.

Capex net of disposals was $137 million.

Up significantly from prior year due to investments in our facilities network, including approximately $20 million for our Kimball expansion and $15 million, our Baltimore facility.

Eric Dutus: Even with those additional borrowings, our balance chief remains strong.

Eric Dutus: We ended Q1 with total debt of $2.8 billion.

Unknown Executive: We end Q1 with total debt of $2.8 billion, a net debt to EBITDA ratio of 2.4 times, and continue to have no significant debt amounts coming due until 2027. The weighted average pre-tax cost of debt at quarter end was 5.7 percent, turning to cash flows on slide 11. Cash provided from operations in Q1 was $19 million, reflecting our Seasonally Weakest Quarter.

Eric Dutus: A net debt to EBITI ratio of 2.4 times.

In the quarter adjusted free cash flow was a negative $118 million, which was in line with our expectations.

Eric Dutus: and continue to have no significant debt amounts coming due until 2027.

Eric Dutus: Our weighted average pre-tax cost of debt at quarter end was 5.7%.

In addition to Capex spend this total reflects the timing of incentive comp payments interest payments and working capital.

Eric Dutus: Starting to cash flows on Flight 11, cash provided from operations in Q1 was 19 million.

For the full year 2024, we now expect our net capex to be in the range of $400 million to $430 million.

Eric Dutus: Reflecting our seasonly weakest quarter,

Eric Dutus: CapEx, net of disposals was 137 million.

This range includes the new additions of <unk> and Novo oil plus approximately 65 million to complete the construction of our Kimball incinerator and approximately $20 million for the purchase and expansion of the Baltimore facility.

Unknown Executive: CapEx net of disposals was $137 million, up significantly from the prior year due to investments in our facilities network, including approximately $20 million for our Kimball expansion and $15 million for our Baltimore facility. In the second quarter, adjusted free cash flow was a negative $118 million, which was in line with our expectations.

Eric Dutus: Up significantly from Prya here, due to investments in our facilities network, including approximately 20 million for our Kimball expansion and 15 million for our Baltimore facility.

During Q1, we bought back approximately 27000 shares of stock at a total cost of $5 million or an average price of approximately $183 a share.

Eric Dutus: In the quarter, adjusted free cash flow was a negative 118 million, which was in line with our expectations.

Eric Dutus: In addition to capex spend, this total reflects the timing of incentive comp payments, interest payments, and working capital.

Unknown Executive: In addition to CapEx spend, this total reflects the timing of incentive comp payments, interest payments, and working capital. For the full year 2024, we now expect our net capex to be in the range of $400 to $430 million. This range includes the new additions of HEPACO and Noble Oil, plus approximately $65 million to complete the construction of our Kimbell incinerator and approximately $20 million for the purchase and expansion of the Baltimore facility.

At March 31st we had $549 million remaining in our repurchase program.

Eric Dutus: For the full year of 2024, we now expect our net cap X to be in the range of 400 to 430 million.

Moving to slide 12.

Based on our Q1 results current market conditions and our recent acquisitions, we are raising our 2024 adjusted EBITDA to a range of 1.10 billion to 1.15 billion.

Eric Dutus: This range includes the new additions of Hepico and Noble Oil, plus approximately $65 million to complete the construction of our Kimball Incinerator, and approximately $20 million for the purchase and expansion of the Baltimore facility.

With a midpoint of $1 125 billion.

This guidance assumes $30 million of contribution from <unk>, this year and approximately $5 million from noble oil.

Eric Dutus: During Q1, we bought back approximately 27,000 shares of stock at a total cost of $5 million, or an average price of approximately $183 a share.

Unknown Executive: During Q1, we bought back approximately 27,000 shares of stock at a total cost of $5 million, or an average price of approximately $183 a share. On March 31st, we had $549 million remaining in our repurchase program. Moving to slide 12.

Looking at our annual guidance from a quarterly perspective.

We're expecting Q2, adjusted EBITDA growth of 7% to 8% versus prior year.

Eric Dutus: At March 31st, we had 549 million remaining in our repurchase program.

We expect to continue its upward trajectory and F gas that's should benefit from the rising base oil pricing environment to deliver growth versus prior year.

Eric Dutus: Moving to slide 12.

Eric Dutus: Based on our Q1 results, current market conditions, and our recent acquisitions, we are raising our 2024-ad to a range of $1.10 billion to 1.15 billion.

Unknown Executive: Based on our Q1 results, current market conditions, and our recent acquisitions, we are raising our 2024 adjusted EBITDA to a range of $1.10 billion to $1.15 billion, with a midpoint of $1.125 billion. This guidance assumes $30 million of contribution from HEPA code this year and approximately $5 million from Noble Oil. Looking at our annual guidance from a quarterly perspective, we are expecting Q2 adjusted EBITDA growth of 7-8% versus the prior year. We expect ES to continue its upward trajectory, and FKSS should benefit from the rising base oil pricing environment to deliver growth versus the prior year.

We now expect this revised full year 2024, our adjusted EBITDA guidance to translate to our segments as follows.

Eric Dutus: with a midpoint of 1.125 billion.

In environmental services, we expect adjusted EBITDA in 2024 at the midpoint of our guidance to increase 10% to 12% from 2023.

Eric Dutus: This guidance assumes $30 million of contribution from Hepico this year and approximately $5 million from Noble Oil.

Leveraging our network of assets volume growth in our core lines of business.

Eric Dutus: Looking at our annual guidance from a quarterly perspective, we are expecting Q2 adjusted ebidogros of 7 to 8% versus prior year.

<unk> strategies. The addition of avocado and multiple cost mitigation initiatives will drive this result.

Eric Dutus: We expect ES's continuance upward trajectory, and SKSS should benefit from the rising base oil pricing environment to deliver growth versus prior year.

For S. K S. S. We expect full year 2024, adjusted EBITDA at the midpoint of our guidance to increase 6% to 8% for 2023.

Eric Dutus: We now expect this revised, full year 2024 adjusted EBITDA guidance to translate to our segments as follows.

Unknown Executive: We now expect this revised full-year 2024 adjusted EBITDA guidance to translate to our segments as follows. Environmental Service: We expect Adjusted EBITDA in 2024, at the midpoint of our guidance, to increase 10 to 12% from 2023. Leveraging our network of assets, volume growth, and our core lines of business. Pricing Strategies, the addition of HEBACO, and multiple cost mitigation initiatives will drive the... For SKSS, we expect full year 2024 adjusted EBITDA at the midpoint of our guidance to increase 6 to 8% from 2023.

Given current market conditions, and where we are today, we expect pricing to improve here in Q2 and into the back half.

Eric Dutus: in environmental services,

Eric Dutus: We expect adjusted EBIT in 2024 at the midpoint of our guidance to increase 10 to 12% from 2023.

The promising initiatives that Mike outlined gave us confidence that we can achieve the anticipated level of growth.

Flight despite the slow start of the year.

Eric Dutus: Leveraging our network of assets, volume growth in our core lines of business,

In our corporate segment at the midpoint of our guide we expect negative adjusted EBITDA results to be 8% to 9% to be up 8% to 9% this year compared to 2023.

Eric Dutus: pricing strategies, the addition of Hepico, and multiple cost mitigation initiatives will drive this result.

Eric Dutus: For SKSS, we expect full year, 24, adjusted EBAA at the midpoint of our guidance to increase 6 to 8% from 2023.

More than half of that increase to the additional costs from the acquired companies and related severance and integration costs.

Looking at it looking at it as a percentage of revenue, we expect corporate segment results to be flat to slightly down from prior year.

Eric Dutus: given current market conditions, and where we are today, we expect pricing to improve here in Q2 and into the back half.

Unknown Executive: Given current market conditions and where we are today, we expect pricing to improve in Q2 and into the back half. The promising initiatives that Mike outlined give us confidence that we can achieve this anticipated level of growth despite the slow start of the year. In our corporate segment, at the midpoint of our guide, we expect negative adjusted EBITDA results to be up 8-9% this year compared to 2023. More than half of that increase is additional costs from the acquired company, related severance, and integration.

Our adjusted free cash flow, we continue to expect a range of $340 million to $400 million 2024, or a midpoint of $370 million.

Eric Dutus: The promising initiatives that Mike outlines give us confidence that we can achieve this anticipated level of growth despite the slow start of the year.

You take that midpoint and add back the Kimball and Baltimore spend you arrive adjusted free cash flow of $455 million.

Eric Dutus: In our corporate segment, at the midpoint of our guide, we expect negative adjusted EBADAO results to be 8 to 9 percent, to be up 8 to 9 percent this year compared to 2023.

Which is greater than 40% of our adjusted EBITDA expectations at the midpoint.

Eric Dutus: More than half of that increase is additional costs from the acquired companies

In summary, Q1 was a great start to the year.

Eric Dutus: and related severance and integration costs.

We expect a favorable demand environment to support strong profitable growth throughout the remainder of this year.

Eric Dutus: Looking at it, looking at it as a percentage of revenue, we expect corporate segment results to be flat, just slightly down from prior year.

Unknown Executive: Looking at it as a percentage of revenue, we expect corporate segment results to be flat, just slightly down from prior years, or Adjusted Free Cash Flow. Continue to expect a range of $340 to $400 million for 2024, or a midpoint of $370 million. Then, you take that midpoint and add back the Kimball and Baltimore span.

Yes segment has a healthy backlog of waste a robust project pipeline, including defense opportunities and our services business all have good momentum.

Eric Dutus: For adjusted free cash flow, we continue to expect a range of $340 to $400 million for 2024, or a bid point of $370 million.

And we expect our sks that segment to begin posting year over year growth this year.

Overall, we look forward to the remainder of this year and continued to execute against our longer term vision 2027 goals.

Eric Dutus: If you take that midpoint and add back the Kimball and Baltimore spend, you arrive at adjusted free cash flow of $455 million.

Unknown Executive: You arrive at an adjusted free cash flow of $455,000,000, which is greater than 40% of our adjusted EBITDA expectations for the mid-term. In summary, Q1 was a great start to the year. We expect the favorable demand environment to support strong profitable growth throughout the remainder of this year. The ES segment has a healthy backlog of waste. Robust Project Pipeline, including DFAS opportunities, and our services business all have good momentum, and we expect our FKSS segment to begin posting year-over-year growth. Overall, we look forward to the remainder of this year and continue to execute against our longer-term vision 2027 goals. With that, Christine, please open the call for questions.

And with that Christine Please open the call for questions.

Eric Dutus: which is greater than 40% of our adjusted EBITDA expectations at the midpoint.

Thank you we will now be conducting a question and answer session.

Eric Dutus: In summary, Q1 was a great start to the year.

If he would like to ask a question. Please press star one on your telephone keypad.

Eric Dutus: We expect the favorable demand environment to support strong profitable growth throughout the remainder of this year.

A confirmation tone will indicate your line of my question queue.

Eric Dutus: The ES segment has a healthy backlog of waste, a robust project pipeline, including DFAS opportunities,

You May press star two if he would like to remove your question from the queue.

Call participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Eric Dutus: and our services business all have good momentum.

One moment, please while we poll for questions.

Eric Dutus: And we expect our SKSF segment to begin posting year-over-year growth this year.

Thank you. Our first question comes from the line of Michael Hoffman with Stifel. Please proceed with your question.

Eric Dutus: Overall, we look forward to the remainder of this year and continue to execute against our longer-term vision 2027 goals.

Good morning, and a well done given this is normally a seasonally tough quarter. If we think about and yes like you said in the comments.

Eric Dutus: And with that, Christine, please open the call for questions.

Christine: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question Q.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Operator Thank you. Our first question comes from the line of Michael Hoffman with Stiefel. Please proceed with your question.

But I wanted to clarify you absolutely had volume growth where last year. We were really looking at most of the growth was price driven in some M&A.

There is a clear volume improving volume trends and then on the price side, you're managing a positive price cost spread so you're driving operating leverage there as well that's correct observation.

Christine: You may press star two if you would like to remove your question from the queue.

Christine: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions.

Absolutely Michael this is Eric our volumes have been a very strong to start 2024 here, particularly in the the drum growth area Cross our network of T. S. DFS Cinerator, so real strong volume growth across the board.

Christine: Thank you. Our first question comes to the line of Michael Hoffman with Steeffle. Please proceed with your question.

Michael Edward Hoffman: Good morning and well done, given this is normally a seasonal top quarter. If we think about in ES, you said it in the comment,

Michael Edward Hoffman: Good morning and well done given this is normally a seasonal top quarter. If we think about in ES, you said it in the comment. But I want to clarify that you absolutely had volume growth where last year we were really looking at that most of the growth was price driven and some M&A. There's a clear volume, improving volume trend. And then on the price side, you're managing a positive price cost spread. So you're driving operating leverage there as well. Is that a correct observation?

Suffered says you know we continue to have a very disciplined pricing approach across the board.

Michael Edward Hoffman: But I want to clarify, you absolutely had volume growth where last year we were really looking at most of the growth was price driven and some M&A. There's a clear volume and improving volume trend and then on the price side, you're managing a positive price cost spread so you're driving operating leverage there as well. Is that correct observation? Okay.

And we see that continuing to outpace inflation to know a lot of focus there.

And then on the billable hours segments, I guess and field services can you talk about what your billable hour utilization look like.

Michael Edward Hoffman: Absolutely, Michael, this is Eric. Our volumes have been very strong to start 2024 here, particularly in the

Eric: Absolutely, Michael. This is Eric. Our volumes have been very strong to start 2024 here, particularly in the drum growth area across our network of TSDFs, incinerators, so really strong volume growth across the board. Price efforts, as you know, we continue to have a very disciplined pricing approach across the board, and we see that continuing to outpace inflation, continue to be a lot of focus.

Yeah. Michael This is first of all my congratulations on your new role. We're all excited for you.

We're gonna Miss yet we're also excited for your for your new role and the NW I suppose congratulations.

Eric J. Dugas: the drum growth area across our network of TSDFs, incinerators, so real strong volume growth across the board.

Answer your question on utilization.

Eric J. Dugas: Price efforts, as you know, we continue to have a very disciplined pricing approach across the board, and we see that continuing to outpace inflation. Continue a lot of focus there.

We have been able to do a good job of utilizing people. We've got some good data out of the system to really drive utilization for both S. N I S and I think that what what's really been driving that productivity is also we've been doing a good job with voluntary turnover, our turnover is down 400 basis points year over year and having.

Speaker Change: And then on the billable hour segments, S and field services, can you talk about what your billable hour utilization look like?

More and more experienced people in those roles drive quiet can be less training time, let's start up time, and that's really been helping us with utilization, which is again a key metric that we measure across the organization, especially in those.

Speaker Change: Yeah, Michael, this is, first of all, Michael, congratulations on your new role. We're all excited for you. We're going to miss you. We're all excited for you for your new role in the NWRI, so congratulations.

Unknown Executive: Yes, Michael. First of all, Michael, congratulations on your new role. We're all excited for you. We're gonna miss you. We're also excited for your new role in the NWRI. So congratulations.

Hi, labor hours like in I S NFS.

Speaker Change: The, uh, uh,

Speaker Change: Answer your question on utilization, you know, we have been able to do a good job of utilizing people. We've got some good data and audit system to really drive utilization for both FS and IS.

Just just to add one other point Michael too.

We really have seen a great job by our teams cross selling and driving utilization of people by sharing people and assets across branch types within our network. So that's a real positive trend for the team working together out there to service our customer needs.

Speaker Change: And I think that what's really been driving that productivity is also we've been doing a good job with voluntary turnover our turnover is down and

Speaker Change: 400 basis points year over year.

And just to tease out a little bit given the performance. It feels like you ought to be in the mid to upper eighties, and billable hours utilization, which is a nice place to be.

Speaker Change: and having more experienced people in those roles

Speaker Change: drives productivity, less training time, less startup time, and that's really been helping us with utilization, which is again, a key metric that we measure across the organization, especially in those, you know, high labor hours like an IS and FS.

And that type of business.

Absolutely that's what it is that's where it is yep, Okay, and then with regards to P. Fast we all know and I think we all believe there's a great opportunity coming.

Speaker Change: Just add one other point, Michael, to that, is that we really have seen a great job by our teams cross-selling.

Unknown Executive: Just to add one other point, Michael, to that is that we really have seen a great job by our team in cross-selling and driving utilization of people by sharing people and assets across

Speaker Change: and driving utilization of people by sharing people and assets across branch types within our network. So that's a real positive trend for the team, working together out there to service our customer needs.

And you have an underlying base level of activity, but for one of the things we still need just to manage everybody's expectation is a remediation mcl with gun drinking water, but that's not really your niche even though you are doing drinking water naval base Pearl.

Speaker Change: And just to tease that a little bit, given the performance, it feels like you ought to be in the mid to upper 80s and billable hour utilization, which is a nice place to be in that type of business.

We really need a remediation M C L.

Unknown Executive: And just to tease out a little bit, I mean, given the performance, it feels like you ought to be in the mid to upper 80s on billable hour utilization, which is a nice place to be.

Is that correct.

Understanding what creates the real momentum.

Eventually, yes, yeah, yeah, no doubt about it Michael but I'd I'd consider it out reiterates that are we really are in the drinking water, we're seeing a lot of opportunities there.

Speaker Change: Absolutely. That's where it is. Yep. Okay. And then with regards to PIFAS, we all know, and I think we all believe there's a great opportunity

Unknown Executive: Absolutely. That's where it is. That's where it is. Yep.

Michael Edward Hoffman: Okay, and then with regard to PFAS, we all know and I think we all believe there's a great opportunity coming, and you have an underlying base level of activity, but one of the things we still need just to manage everybody's expectation is a remediation MCL. We've got drinking water, but that's not really your niche, even though you are doing drinking water and naval-based PERL. We really need a remediation MCL.

As you know from our total focus here across the board, where we're really focused on sampling analysis baseline whether it be a remediation event, whether it be drinking water, whether it be industrial and giving our customers that baseline.

Speaker Change: and you have an underlying base level of activity, but one of the things we still need just to manage everybody's expectation is a remediation MCL. We've got a drinking water, but that's not really your niche, even though you are doing drinking water at Naval Base Pearl.

We can help them make strategic decisions on the way forward.

Speaker Change: We really need a remediation MCL. Is that correct in understanding what creates the real momentum?

Certainly where we've mentioned many times that our pipeline continues to grow.

And where are the total solutions provider with a network of incinerators or landfills and wastewater treatment plants and our team remediation. That's out there trainees are jerking and industrial water. So.

Speaker Change: Eventually. Yeah, no doubt about it, Michael, but I continue to reiterate that we really are in the drinking water. We're seeing a lot of opportunities there.

Unknown Executive: Yeah, no doubt about it, Michael, but I continue to reiterate that we really are in the drinking water. We're seeing a lot of opportunities there. As you know from our total focus here across the board, we're really focused on sampling, analysis, and baseline, whether it be a remediation event, whether it be drinking water, whether it be industrial, in giving our customers that baseline so that we can help them make strategic decisions on the way forward. We mentioned many times that our pipeline continues to grow, and we're the total solutions provider with our network of incinerators and our landfills and our wastewater treatment Our team is out there.

Speaker Change: As you know, from our total focus here across the board, we're really focused on sampling, analysis, baseline, whether it be a remediation event, whether it be drinking water, whether it be industrial, in giving our customers that baseline so that we can help them make strategic decisions on the way forward.

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We see strong our team is out there, but we're also working with EPA is directly on a reaganite incinerator, where we're doing updated testing there's been more parameters that have been put in place on a new method.

For background incineration throughput and efficiency and we've we're working with them to redo an upgrade that test to them.

Speaker Change: Certainly we're

Speaker Change: We've mentioned many times that our pipeline continues to grow.

Speaker Change: and where are the total solutions provider with our network of incinerators and our landfills

Show that to continue to show that high temperature thermal one consideration is the preferred method. So your point is dead on with remediation we need that standard. However, we are we continue to see bullish opportunities in pipeline growing there in many different areas.

Speaker Change: and our wastewater treatment plants and our team remediation that's out there, trainees and jerking in industrial water.

Speaker Change: The pipeline we see strong. Our team is out there. We're also working with...

Unknown Executive: We're also working with EPA directly on our aragonite incinerator, where we're doing updated testing. There are more parameters that have been put in place on a new method for background incineration throughput and efficiency, and we're working with them to redo and upgrade that test to show that, and continue to show that high-temperature repra thermal incineration is the preferred method. So your point is dead on with remediation. We need that standard. However, we continue to see bullish opportunities and pipeline growth in many different areas.

And just to close the loop on your comment about the testing you feel really good about being able to meet O. T. M 50, where you hit the ball out of the park on O T. M 45, but theres nothing about O T. M 50 that you'd say preclude you from proving to EPA for most of the right answer.

Speaker Change: EPA directly on our Aragonite incinerator where we're doing updated testing. There's been more parameters that have been put in place on a new method.

Speaker Change: for background incineration, throughput, and efficiency, and we're working with them to redo and upgrade that test.

Highly highly confident now not a problem.

Speaker Change: to show that, to continue to show,

And would you use the same consulting group to help do that test since the kind of experience.

Speaker Change: that high-temperature reprothermal incineration is the preferred method. So your point is dead on with remediation. We need that standard. However, we continue to see bullish opportunities and pipeline grow in there in many different areas.

Yeah, absolutely absolutely I think it's also important to note that we see more and more interest in cooperation with EPA on helping to make sure that.

The test and the parameters and everything that we're doing there they're supportive up so good good cooperation.

Speaker Change: And just to close the loop on your comment about the testing, you feel really good about being able to meet OTM 50 where you hit the ball out of the park on OTM 45, but there's nothing about OTM 50 that you say preclude you from proving to EPA thermal is the right answer.

Unknown Executive: And just to close the loop on your comment about the testing, you feel really good about being able to meet OTM-50 where you hit the ball out of the park with OTM-45, but there's nothing about OTM-50 that usually precludes you from proving EPA thermals the right answer.

Alright, well thank you.

Clean harbors for the kind words that you appreciate that and thank you for taking the questions.

Thanks, Mike I might see you Monday.

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

Speaker Change: Highly, highly confident, not a problem.

Unknown Executive: Highly, highly confident, not a problem.

Speaker Change: And would you use the same consulting group to help do that test since they've got an experience?

Unknown Executive: And would you use the same consulting group to help do that test since they've got experience? Yeah, absolutely. Absolutely. I think it's also important

Yes, hi, good morning, everyone.

Gary I Wonder if you could just hi, I'm wondering if you just ask you to update us on your M&A.

Speaker Change: Yeah, absolutely, absolutely. I think it's also important to note that we see more and more interest in cooperation with EPA on helping to make sure that the tests and the parameters and everything that we're doing there, they're supportive of, so good cooperation.

Unknown Executive: Yeah, absolutely. Absolutely. I think it's also important to note that we see more and more interest in cooperation with EPA in helping to make sure that the tests and the parameters and everything that we're doing there, they're supportive of, so good, good cooperation. All right.

Jerry Revich: Pipeline today, obviously pretty active couple of quarters for you folks.

Can you talk about what's the range of outcomes in terms of potential additional deal flow over the next 12 to 24 months based on your discussions.

Speaker Change: All right, well, thank you, Clean Harbors, for the kind words. I do appreciate that, and thank you for taking the questions.

Unknown Executive: All right. Well, thank you, Clean Harbors, for the kind words. I do appreciate that. And thank you for taking the question.

Yeah. Jerry This is Mike you know I think that it's a the pipeline remains really strong and you know we closed two deals here, both the Pepco transaction, which was pretty material, but also an acquisition in the oil space and when we look at a lot of deals.

Speaker Change: Thanks, Michael. All right, Michael. We'll see you Monday.

Unknown Executive: Thanks, Michael. All right, Michael. We'll see you Monday.

Speaker Change: Our next question comes from the line of Jerry Reavich with Goldman Sachs. Please receive with your question.

Jerry Revich: Our next question comes from the line of Jerry Revich with Goldman Sachs. Please proceed with your question.

And both parts of the business.

Jerry Revich: Yes, hi, good morning, everyone.

Jerry Revich: Yes, hi. Good morning, everyone. I hear you. I wonder if we could just...

You know two to three a week at least and we have discussions and a lot of them don't make the cut and so it's hard to kind of prove a negative on this call, but we do do a lot of it has to make strategic sense that make financial sense, we kind of we have to measure that but the pipeline remains strong on both businesses. Obviously you know we're excited about the ethical deal.

Jerry Revich: Hi, I'm wondering if you just, hi, I'm wondering if we just ask you to update us on your M&A pipeline today, obviously pretty active, a couple of quarters for you folks. Can you talk about what's the range of outcomes in terms of potential additional deal flow over the next 12 to 24 months based on your discussions?

I think that's going to turn out to be a homerun noble also it could be a really good deal. We're looking for acquisitions in that type of areas. So pipeline strong very active leverages at pretty good shape, and we're generating it would generate a fair amount of interest in our in our term loan. We did put in connection with that transaction I think more to come very active as you try to is as we try to go after business.

Jerry Revich: Yeah, Jerry, this is Mike. You know, I think that it's a pipeline made really strong. And, you know, we closed, you know, two deals here, both the HEPCO transaction, which was pretty material, but also an acquisition in the oil space. And we look at a lot of deals in both parts of the business.

Unknown Executive: Yeah, Jerry, this is Mike. You know, I think that it's a pipeline from which it's really strong. And you know, we closed two deals here, both the HEPCO transaction, which was pretty material, but also an acquisition in the oil space. And we look at a lot of deals in both parts of the business, you know, two to three a week, at least, and we have discussions, and a lot of them don't make the cut. So it's hard to kind of prove a negative on this call.

Jerry Revich: So we're going to generate a fair amount of free cash flow in the back half of the year and we want to put to work.

Jerry Revich: you know, two to three a week at least, and we have discussions and a lot of them don't make the cut, so it's hard to kind of prove a negative on this call. But we do a lot of it has to make strategic sense, that has to make financial sense, we kind of, we have to manage to measure that. But the pipeline remains strong on both businesses. Obviously, you know, we're excited about the HEPACO deal. I think that's going to turn out to be a home run. Noble also should be a really good deal. We're looking for acquisitions in that.

Super and then in terms of the.

Unknown Executive: But we do do a lot of it has to make strategic sense, it has to make financial sense, we kind of have to manage and measure that. But there's the pipeline remains strong on both businesses. Obviously, you know, we're excited about the HEPCO deal that turned out to be a home run. Noble also should be a really good deal. We're looking for acquisitions in that type of area.

Marketing arrangement that you reached with safety Kleen can you expand a little bit about that.

Unknown Executive: Transcripts provided by Transcription Outsourcing, LLC.

Whereas the pricing point versus Virgin base oil or are we starting to see it.

Premium or open up and whats the opportunity there.

Jerry Revich: that type of area so pipeline strong very active our leverage is in pretty good shape you know we're generating a fair amount of interest in our in our term loan we did with the connection with the ethical transaction I think more to come very active as we try to as we try to go after vision 2027 we're going to generate a fair amount of free cash flow in the back half of the year and we want to put to work

But for the premium to widen over time.

Yeah, I think that it's a you know we don't give out financial details on our on our deal with capital and we're really excited about the opportunity as I said in my prepared remarks kind of validates sustainability of our all of our baseball immediately lowers our customers and their customers I'm footprint.

Unknown Executive: I'm going to generate a fair amount of free cash flow in the back of the room.

Speaker Change: Super. And then in terms of the marketing arrangement that you reach with Safety Clean, can you expand a little bit about that? Where's the pricing point versus virgin base oil? Are we starting to see premium open up and, you know, what's the opportunity under the agreement for that premium to widen over time?

Jerry Revich: A lot of good that we've talking about going after large seats for years, and we partnered with tactful and they have the marketing and the sales muscle to go in and penetrate those markets and I think that it really is going to be a great great partnership.

Unknown Executive: The super and then in terms of the marketing arrangement that you reached with Safety Clean, can you expand a little bit on that? Where's the pricing point versus virgin base oil? Are we starting to see a premium open up? And you know, what's the opportunity under the agreement for that premium to widen

Jerry Revich: I do think that overall it was telling about contracting oil is that a better price in the spot market. So, but we're not going to give financial details on this call.

Speaker Change: Yeah, I think that it's, you know, we don't give out financial details on our deal with Castro. You know, we're really excited about the opportunity. As I said, in my prepared remarks, it validates the sustainability of our base law. It immediately lowers our customers and their customers' carbon footprint. There's a lot of good value. We've been talking about, you know, going after large fleets for years, and we partnered with Castro, and they have the marketing and the sales muscle to go and penetrate those markets. that it really is going to be a great partnership. And I do think that, you know, overall, you know, selling more contracted oil is at a better price than the spot market. So, but we're not going to get financial details on this goal.

Unknown Executive: Yeah, I think that it's, you know, we don't give out financial details on our deal with Castrol. But, we're really excited about the opportunity, as I said, in my prepared remarks, to kind of validate the sustainability of our, of our, of our, baseload. It immediately lowers our customers' and their customers' carbon footprint. And there's a lot of good value. We've been talking about, you know, going after large fleets for years, and we partnered with Castrol, and they have the marketing and the sales muscle to penetrate those markets.

Okay.

And.

In terms of the industrial services business, you know at the Analyst day, we discussed a pretty clean runway in terms of improving global terms and driving higher contract.

Jerry Revich: Boy hours can you just update us on progress on that journey. This year, how much of a contributor was that in.

Jerry Revich: Quarter end.

Jerry Revich: Where do we stand in terms of potential additional upside I'm continuing to improve those terms.

Unknown Executive: And I think that it really is going to be a great, great partnership. And I do think that, you know, overall, selling more contracted oil is at a better price in the spot market. So, but we're not going to give any financial details.

Speaker Change: Yeah, Jerry our our industrial team continues to do a solid job of placing more of our employees that are billable rates within the sites, where we work on day in day out.

Speaker Change: Okay. And in terms of the industrial services business, you know, at the analyst's day, we discussed the pretty clean runway in terms of improving billable terms and driving higher contractable hours. Can you just update us on progress on that journey this year? How much a contributor was that in the quarter? And where do we stand in terms of potential additional upside on continuing to improve those terms? Okay.

A large chemical plants large refineries building.

Unknown Executive: And in terms of the industrial services business, you know, at Analyst Day, we discussed a pretty clean runway in terms of improving billable terms and driving higher contracted billable hours. Can you just update us on progress on that journey this year? How much of a contributor was that in the quarter? And where do we stand in terms of potential additional upside on continuing to improve those terms? Yeah, Jerry, our industrial team continues to do so.

Building out our insights programs the tools that we can provide for them and the automated tools all of that is in an effort to have more of our industrial teams day in day out with high billable hours at our customer sites and the team is really focused on doing that in the.

The results are showing that.

So it was a meaningful driver in the quarter.

Speaker Change: It has we've we see our utilization of our employees continue to improve year over year.

Speaker Change: Yeah, Jerry, our industrial team continues to do a solid job of placing more of our employees at a billable rates within the sites that we work on day and day out. Large chemical plants, large refineries,

Unknown Executive: Yeah, Jerry, our industrial team continues to do a solid job of placing more of our employees at billable rates within the sites that we work on day in, day out, large chemical plants, large refineries, building out our insight programs, the tools that we can provide for them, the automated tools. All that is in an effort to have more of our industrial teams day in, day out with high billable hours at our customer sites. The team is really focused on doing that, and the results are showing it.

That along with some of the things that we've been doing are doing on a pricing side better price improvement on our billable labor on site has also been a key driver. The Thompson industrial continues to work with our teams very well.

Jerry: building out our insight programs, the tools that we can provide for them, the automated tools, all that is in an effort to have more of our industrial teams day in, day out, with high billable hours at our customer sites. And the team is really focused on doing that, and the results are showing that.

Speaker Change: And the teams working together Thompson and our H B C on customer sites and growing our verticals has has also shown up in our results.

Thank you.

Speaker Change: So was a meaningful driver in the quarter, Eric?

Speaker Change: Well thanks.

Unknown Executive: So it was a meaningful driver in the quarter, Eric?

Victor.

Eric J. Dugas: It has. We've seen our utilization of our employees continue to improve year over year.

Speaker Change: Our next question comes from the line of Tobey Sommer Winter with please proceed with your question.

Unknown Executive: It has. We've seen our utilization of our employees continue to improve year over year. That, along with some of the things that we've been doing on the pricing side, better truck price improvement on our billable labor on site has also been a key driver. Thompson Industrial continues to work with our teams very well. And the teams working together, Thompson and our HBC on customer sites and growing our verticals, has also shown up in our results.

Hey, Good morning. This is Jasper bibb on for Tobey I'm following up on the environmental services about performance in the first quarter of the higher guide there'd be anyway. The I guess quantified the expected pricing outperformance relative to your initial assumptions.

Eric J. Dugas: That along with some of the things that we've been doing on a pricing side, better price improvement on our billable labor on site has also been a key driver. The Thompson Industrial continues to work with our teams very well, and the teams working together, Thompson and our HBC on customer sites and growing our verticals has also shown up in our results.

Speaker Change: Yeah across the board.

I would say that are about 50% to 60% as price and about 40% volume.

Jerry Revich: We you know, we're really focused on making sure price is ahead of inflation in our cost structure, along with efficiencies and improvements that we're seeing in volumes or robust as we mentioned earlier on the call volume is very strong in the first quarter and we anticipate that the.

Speaker Change: Thank you.

Speaker Change: Welcome. Thank you.

Unknown Executive: Welcome. Thank you.

Speaker Change: Our next question comes from the line of Toby Somer with Truist. Please proceed with your question.

Tobey O'Brien Sommer: Our next question comes from the line of Tobey Sommer with Truist. Please proceed with your question.

Speaker Change: Hey, good morning. This is Jasper, Midbond for Toby. Following up on environmental services outperformance in the first quarter of the higher guide, would there be any way to, I guess, quantify the expected pricing outperformance relative to your initial assumptions?

Jasper James Bibb: Hey, good morning. This is Jasper Bibb on behalf of Tobey. Following up on environmental services outperformance in the first quarter of the hire guide, would there be any way to, I guess, quantify the expected pricing outperformance relative to your initial assumption?

Continuing to grow as we go into the second half of the year, when we look to get our new Kimball incinerator onboard here.

And so Jeff for the exit.

Speaker Change: Just adding on to.

Jeff: That kind of a little bit of I would say that in terms of pricing I think it was in line with our expectations in terms of what we see in the marketplace and what we're able to do against our goals I think volume became a larger piece of the pie here in Q1 because of the significant growth that we're seeing on drum counts that are Christian as Barry mentioned earlier. So you know the 60.

Jasper: Yeah, across the board, we would say that about 50 to 60% is priced and about 40% volume.

Unknown Executive: Yeah, across the board, we would say that about 50 to 60% is price and about 40% is volume. And we're really focused on making sure price is ahead of inflation and our cost structure, along with efficiencies, improvements that we're seeing. And volumes are robust, as we mentioned earlier on the call, volumes very strong in the first quarter. And we anticipate that continuing to grow as we go into the second half of the year when we look to get our new Kimbell incinerator on board. So Jasper, this is Eric. I'm going to have to stay in that comment a little bit.

Jasper: And we're really focused on making sure price.

Jasper: is ahead of inflation and our cost structure, along with efficiencies, improvements that we're seeing, and volumes are robust, as we mentioned earlier on the call. Volume is very strong in the first quarter, and we anticipate that continuing to grow as we go into the second half of the year when we look to get our new Kimball incinerator on board here.

Speaker Change: Boarding pricing, we'd probably came into the quarter thinking it would be a little bit higher on the pricing side of that equation, but volumes have just been really strong not just with drums, but also.

Speaker Change: You probably noticed the growth in field services as well as SK branch those businesses. Both grew at about 10%. This quarter. So volume certainly a key component this quarter as well.

Speaker Change: And so, Jeff, for the case, Eric, I can have to say that comment a little bit. I would say that in terms of pricing, I think, it was in line with our expectations in terms of what we see in the marketplace and what we're able to do against our goals.

Yeah. That's helpful. And then you mentioned the improvement in base oil demand for the quarter was just hoping you could maybe give a bit more color on what you've seen in April so far from a pricing and spread perspective.

Unknown Executive: I think it was in line with our expectations in terms of what we see in the marketplace and what we're able to do against our goals. I think volume became a larger piece of the pie here in Q1 because of the significant growth that we're seeing on drum counts, as Eric Gerstenberg mentioned earlier. So the 60-40 pricing, we probably came into the quarter thinking it would be a little bit higher on the pricing side of that equation, but volumes have just been really strong, not just with drums, but also, you probably noticed the growth in field services as well as FK Brands. Those businesses both grew at about 10% this quarter. So volume is certainly a key component this quarter as well.

Speaker Change: I think volume became a larger piece of the pie here in Q1 because of the significant growth that we're seeing on drum counts that Eric Kirstenberg mentioned earlier.

Speaker Change: Yeah. This is Mike the United States that we ended the quarter kind of on a good note there were two.

Speaker Change: You know, the 60-40 pricing, we probably came into the quarter thinking would be a little bit higher on the pricing side of that equation. But volumes have just been really strong, not just with drums.

Mike: Posted price increases are not all of which will get into Q2, but a good chunk of them well and I think that we have a big Oh, we have some growth from Q1 into Q2, and we see kind of the summer driving season, the normal seasonality returning and I think April so far is actually to be a pretty good pretty good month in New York with that gives us a good start.

Speaker Change: But also, you know, you probably notice the growth in field services as well as FK branch. Those businesses both grew at about 10% this quarter. So volume is certainly a key component this quarter as well.

For the quarter.

Speaker Change: Yeah, it's helpful. And then you mentioned the improvement in base oil demand through the corridor, which is just hoping you could maybe give a bit more color on what you've seen in April so far from a pricing and spread perspective.

Unknown Executive: Yeah, it's helpful. And then you mentioned the improvement in base oil demand through the quarter. I was just hoping you could maybe give a bit more color on what you've seen in April so far from a pricing and spread perspective.

Makes sense last one for me just any change to the interest expense assumptions for the 24, guys with the incremental borrowings in the quarter.

No I think we're still in mind kind of was with what we what we guided that we did guide I think as we as it came to the quota for some incremental debt.

Speaker Change: Yeah, this is Mike. The, you know, I think that

Mike: Yeah, this is Mike. I think that we ended the quarter kind of on a good note; there were two price increases. Not all of them will get into Q2, but a good chunk of them will. And I think that we have a big, we have some growth from Q1 into Q2, and we see kind of the summer driving season, the normal seasonality returning. And I think April, you know, so far, is actually going to be a pretty good, pretty good month in the oil business. And that gives us a good running start into the quarter.

Mike: We ended the quarter kind of on a good note. There were two, you know, posted price increases, not all of which will get into Q2, but a good chunk of them will. And I think that we have a big, we have some growth from Q1 into Q2, and we see kind of the summer driving season, the normal seasonality returning. And I think April , you know, so far is actually going to be a pretty good month in the oil business. And that gives us a good running start into the quarter.

That incremental debt to $500 million today, it's roughly at 7%. So I'll, let you kind of do the math there but.

And when you think about overall cash flow for the year are some of the incremental cash that well see from acquisitions is being offset.

By the incremental interest as well as some capital investments that we always do with some of these things.

Speaker Change: And that's what's.

Speaker Change: Makes sense. Last one for me, just any change to the interest expense assumptions for the 24 guys with the incremental borrowings in the quarter?

Driving the flattish kind of free cash flow or a flattish to what our guidance was in Q1. So.

Unknown Executive: Makes sense. Last one for me, was there just any change to the interest expense assumptions for the 24 guide with the incremental borrowings in the quarter?

Speaker Change: But again as Mike said really strong balance sheet.

We have some moving parts in our debt portfolio coming up here and we'll continue to be very smart with how we are.

Unknown Executive: Now, I think we're still in line kind of with what we guided that we did guide, I think, as we came to the quarter for some incremental debt, you know, but that incremental debt, the 500 million, you know, today, it's roughly at, you know, 7%. So I'll let you kind of do the math there.

How we manage that.

Mike: I think the team has done a good job of managing interest rate risk. It's only a five 7% here in Q1 and the team's done a good job of getting good returns on their cash. So you know that's at four 5%. So really the arbitrage on the incrementals that hasn't been too bad.

Unknown Executive: But when you think about overall cash flow for the year, some of the incremental cash that we'll see from acquisitions is being offset by the incremental interest as well as some capital investments that we always do with some of these things. And that's what's driving the Flatish kind of free cash flow or flat to what our guidance was in Q1. So, again, as Mike said, a really strong balance sheet. You know, we have some moving parts in our debt portfolio coming up here, and we'll continue to be very smart with how we manage that.

Got it thanks for taking the questions.

Speaker Change: Okay. Thank you.

Speaker Change: And that's what's driving the flattish kind of free cash flow or flattish to what our guidance was in Q1. So, but again, as Mike said, really strong balance sheet. You know, we have some moving parts in our debt portfolio coming up here and we'll continue to be very smart with how we manage that.

Our next question comes from the line of James Ricchiuti with Needham. Please proceed with your question.

James Andrew Ricchiuti: Hi, good morning.

A question I don't know.

James Andrew Ricchiuti: A question on <unk> I know, it's early but I'm just wondering how we should be.

Thinking about the revenue synergies it seems like there's some real good opportunities here.

Mike: Yeah, I think the team has done a good job with managing, you know, interest rate risk. It's only at 5.7% here in Q1, and the team's done a good job of getting good returns on their cash. So, you know, that's at, you know, 4% or 5%. So really the arbitrage of the incremental debt hasn't meant too bad from the P&L's

Unknown Executive: I think the team has done a good job of managing interest rate risk. It's only at 5.7% here in Q1. And the team has done a good job of getting good returns on their cash. So, you know, that's at 4 or 5%. So, really, the arbitrage or the incremental debt hasn't been too bad for the P&L team.

Yeah, James So Eric here I'll begin one one thing that Africa was roll it really brought to the table is their penetration in the rail vertical they've had some great relationships with some of the largest railroads.

Speaker Change: Got it. I actually taking the questions.

Jasper James Bibb: Got it. Thanks for taking the questions.

Speaker Change: Okay, thank you.

Speaker Change: Have a great team that responds to not only events, but ongoing services for the rail industry that that.

Speaker Change: Our next question comes from line of James Rishuity with Needham. Please receive with your question.

James Andrew Ricchiuti: Our next question comes from the line of James Ricchiuti with Needham. Please proceed with your question.

<unk>.

James Andrew Ricchiuti: Hi, good morning. Question.

Speaker Change: We're going to plan on building on that nationwide.

James Andrew Ricchiuti: Hi, good morning.

So that were participants in all rail activities. So that's a great revenue synergy there. We also have seen some great work with our teams working together across the customer base and sharing assets already out of the 40 different branches that have to co has brought to the table.

James Andrew Ricchiuti: How are you? A question on Hepico, I know it's early, but I'm just wondering how we should be thinking about the revenue synergies. Seems like there's some real good opportunities here.

James Andrew Ricchiuti: Yeah, James, so Eric here I'll begin. One thing that Hepico is really brought to the table is their penetration in the rail vertical. They've had some great relationships with some of the largest railroads, and I've had a great team that responds to not only events, but ongoing services for the rail industry.

Unknown Executive: [inaudible]

James Andrew Ricchiuti: How are you? A question on the HEPA code.

There's about a 22 of those that are in new markets for us. So that we can grow with the customer base. There. The other 18 ish are working in conjunction with our teams that existing field service branches sharing.

James Andrew Ricchiuti: that

Speaker Change: And people to grow our revenue base, so great opportunities. There. They also brought to the table a wonderful National response call Center that allows small spills and particular in servicing large trucking companies to have our network respond and internalize those.

James Andrew Ricchiuti: We're going to plan on building on that nationwide so that we're a participant in

Speaker Change: all rail activities.

Speaker Change: So that's a great revenue synergy there.

Speaker Change: We also have seen some great work with our teams working together across the customer base and sharing assets already.

Speaker Change: Ralph North America, so great opportunities in all three of those areas, yes, so far Jim It really is a hand in glove, you really see a great partnership and even in that we own them for a week in the month of in the month of March we were already cross sharing resources across the network even in the first week of ownership. So would you just right.

Speaker Change: Out of the 40 different branches that Hepico has brought to the table,

Speaker Change: There's about 22 of those that are in new markets for us so that we can grow with the customer base there. The other 18-ish are working in conjunction with our teams at existing field service branches, sharing assets and people to grow our revenue base. So great opportunities there. They also brought to the table a wonderful national response call center that allows small spills in particular and servicing large trucking companies to have our network respond and internalize those throughout North America. So

Got it hey by the way did you size the acquisition related.

Severance expense that impacted SG&A.

Speaker Change: Maybe could you size that.

Speaker Change: Yeah, there are about $4 million of severance and integration kind of run through corporate this quarter.

Speaker Change: Got it Okay and last question.

Speaker Change: Great. Thank you last question I had is just in light of the announcement with casual and by the way congratulations on that I'm wondering is that spring discussions are you in discussions.

Speaker Change: great opportunities in all three of those areas. Yeah, so far, Jim, it's really the hand in glove, and you really see a great partnership. And even in the, we owned it for a week in the month of March, and we were already sharing resources across the network, even in the first week of ownership, which are just terrific.

Eric: I know it's early, but I'm just wondering how we should be thinking about the revenue synergies. Seems like there are some really good opportunities here. Yeah, James.

Eric: Yeah, James. So Eric here, I'll begin. One thing that HEPACO has really brought to the table is their penetration in the rail vertical. They've had some great relationships with some of the largest railroads, and I've had a great team that responds to not only events but ongoing services for the rail industry. That, that, We're going to plan on building on that nationwide so that we're a participant in all rail Activities.

Unknown Executive: So that's a great revenue synergy there. We also have seen some great work with our teams working together across the customer base and sharing assets already. Out of the 40 different branches that HEPACO has brought to the table, there are about 22 of those that are in new markets for us so that we can grow with the customer base there. The other 18-ish are working in conjunction with our teams at existing field service branches, sharing assets and people to grow our revenue base.

Unknown Executive: Great opportunities there. They also brought to the table a wonderful national response call center that allows for small spills, in particular, and servicing large trucking companies to have our network respond to and internalize those. [inaudible] Great opportunities in all three of those areas. Yeah, so far, Jim, it's been great.

Unknown Executive: Yeah, so far, Jim, it really is a hand in glove. You really see a great partnership. And even in the first week of ownership, we were already sharing resources across the network, even in the first week of ownership, which is just terrific.

Speaker Change: Italy that you could talk to are with other lubricants suppliers or will you just had.

Speaker Change: See how this plays out hopefully up he's come onboard.

Speaker Change: Got it. By the way, did you size the acquisition related

Unknown Executive: And by the way, did you size the acquisition related and Seven Sixpence that impacted SG&A? Maybe could you size that?

Yeah, we we just announced the partnership with with capital, we're going to we're going to work with capital we have.

Speaker Change: and severance expense that impacted SGNA, or maybe could you size that?

Speaker Change: Yeah, there were about $4 million of Severton integration kind of running through corporate this quarter.

Speaker Change: Get some trials.

Unknown Executive: Yeah, there are about $4 million of severance and integration kind of running through corporate disclosures.

Did some pilots.

Speaker Change: Great relationship were excited about working with Guy. So we're going to we're going to drive that you know they have they had this great brand.

Speaker Change: And last question.

Unknown Executive: And last question. Great, thank you.

Speaker Change: Great, thank you. Last question I had is just in light of the announcement with Castro, and by the way, congratulations on that. I'm wondering, is that spurring discussions, are you in discussions?

Unknown Executive: My last question is just in light of the announcement about cash flow, and, by the way, congratulations on that. I'm wondering if that is spurring discussions? Are you in discussions, potentially, that you could talk to other lubricant suppliers about? Or will you just, you know, see how this plays out, and hopefully, others will come on board?

Speaker Change: Great well respected brand in the industry and we're excited.

Speaker Change: And James just to add to that Mike mentioned earlier the.

James: The great partnership there was really to help grow fleet sales Castro brand has been in a number of large fleets already in the circular off our AR collections and then putting our re refined base oil into those fleet some of the Castro Brennan.

Speaker Change: potentially that you could talk to with other lubricant suppliers or will you just, you know, see how this plays out and hopefully others come on board.

Speaker Change: Dan, you know, we just announced the partnership with Castro. We're going to work with Castro. You know, we did some trials, did some pilots. Great relationship. We're excited about working with Castro.

Unknown Executive: Yeah, no, we just announced the partnership with Castrol. We're gonna, we're gonna work with Castrol. You know, we did some trials, did some pilots, a great, great relationship. We're excited about working with Castrol. So we're gonna, we're gonna drive that, you know, they have they have this great brand, very, very well respected brand in the industry. We're excited.

Speaker Change: <unk> is the real opportunity there so a great start.

Speaker Change: That makes sense good partner. Thank you congratulations.

Speaker Change: Hey, Jim.

Speaker Change: Our next question comes from the line of David Manthey with Baird. Please proceed with your question.

Speaker Change: So we're going to drive that. You know, they have this great brand, a very well-respected brand in the industry, and we're excited to work with them.

David John Manthey: Good morning, everyone and thank you.

Speaker Change: And James, just to add to that, as Mike mentioned earlier, the great partnership there is really to help grow fleet sales. Castrol brand has been in a number of large fleets already, and that circular offer of collections and then putting our re-refined base oil into those fleets under the Castro brand is the real opportunity there. So great stuff.

David John Manthey: I did want to hit it.

Unknown Executive: And James, just to add to that, as Mike mentioned earlier, the great partnership there is really to help grow fleet sales. The Castro brand has been in a number of large fleets already. And the circular offer of collections and then putting our re refined base oil into those fleets under the Castro brand is the real opportunity.

David John Manthey: The first question Big picture should we assume that the guidance update here reflects the acquisitions.

David John Manthey: And then a little bit of <unk> performance and maybe some a little.

David John Manthey: The little change in the corporate expense, but the message here if I'm reading you right kind of product is high but theres no real underlying change in your EBITDA expectations, just given that we're early in the year or is that how we should read this guidance update.

James Andrew Ricchiuti: That makes sense, good partner to have. Thank you.

Unknown Executive: Yeah, that makes sense. A good partner to have. Thank you. Congratulations.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of David Manthy with Baird. Please proceed with your question.

David John Manthey: Our next question comes from the line David Manthey with Baird.

David John Manthey: Hey, David It's Eric did you say I I think youre reading it didnt do it the right way being early in the year. The guide is the raised as you know.

David John Manthey: Good morning, everyone, thank you. Hi, David.

David John Manthey: Good morning, everyone. Thank you. First question, big picture: should we assume that the guidance update here reflects the acquisitions being added and a little bit of one QL performance and maybe some, a little change in corporate expenses? But the message here, if I'm reading it right, confidence is high, but there's no real underlying change in your EBITDA expectations, just given that we're early in the year? Is that how we should read this guidance update? Hey Dave, it's Eric.

David John Manthey: First question, big picture. Should we assume that the guidance update here reflects the acquisitions being added and a little bit of one Q out performance and maybe some

Eric: Having the new acquisitions.

Eric: As he talks about them laid out in the prepared remarks.

Eric: And then kind of the success, we saw in Q1, and then maybe a little bit of uptick throughout the whole year, but given Q1.

Eric: Our our history of wine and meet and beat them, we set up some guidance that we feel very comfortable being engineered going forward, but youre reading into it the exact right way.

David John Manthey: a little change in the corporate expense. But the message here, if I'm reading it right, confidence is high, but there's no real underlying change in your EBITDA expectations, just given that we're early in the year. Is that how we should read this guidance update?

Eric: Okay.

Eric: And on the first quarter turnarounds were any of those unplanned and therefore offsetting expected work for later in this year I think that you have sort of a once in every five year turnaround at Deer Park coming up in the second quarter.

David John Manthey: Hey Dave, it's Eric Dugas. I think you're reading it into it the right way. You know, being early in the year, you know, the guide is, the raises, you know, counting the new acquisitions.

Eric J. Dugas: Hey Dave, it's Eric Dugas. I think you're reading into it the right way, you know, being early in the year, you know, the guides, the raises, you know, counting the new acquisitions, as we talked about and laid out in the prepared remarks, and then kind of the success we saw in Q1, and then maybe a little bit of an uptick throughout the whole year. But given Q1, you know, given our history of wanting to meet and beat, we set up some guidance that we feel very comfortable beating here going, You're reading into it the exact right way. And on the first quarter turnaround.

Eric: As it relates to that just wondering if we should factor that into utilization or yes growth profitability in the second quarter specifically.

Eric J. Dugas: as we talked about and laid out in the prepared remarks, and then kind of the success we saw in Q1, and then maybe a little bit of uptick throughout the whole year. But given Q1, you know, given our history of wine a meet and beat, we set up some guidance that we feel very comfortable beating in here going forward. But you're reading into it the exact right way.

Speaker Change: Yes, David a couple of things there, we did have a little bit of a small amount of weather related activities that were associated with the deep freeze that occurred in January but it was it was pretty small last year. When we ran into those issues. We we've spent some capital on upgrade.

Speaker Change: Okay. And on the first quarter turnarounds, were any of those unplanned and therefore offsetting

Unknown Executive: Okay. And on the first quarter turnarounds, were any of those unplanned and therefore offsetting expected work for later in this year? I think that you have sort of a once in every five-year kind of turnaround at Deer Park coming up in the second quarter. And as it relates to that, just wondering if we should factor that into utilization or ES growth profitability in the second quarter specifically?

Eric: <unk>.

Eric: Weather protection.

Speaker Change: expected work for later in this year, I think

Eric: Cross our El Dorado facility, so that prevented one of our trains from having to come down in those deep freeze. So we really solid results of being able to stay online for the most part through that deep freeze there is a little on one of the train.

Speaker Change: that you have sort of a once and every five year kind of turnaround at Deer Park coming up in the second quarter. And as it relates to that, just wondering if we should factor that into utilization or ES growth profitability in the second quarter specifically. Okay.

Eric: In addition to that we have planned turnarounds, we had a major outage that we did up at our Canadian incinerator at Sarnia that.

Speaker Change: Yeah, David, a couple of things there. We did have a little bit, a small amount of weather-related activities that were associated with that deep freeze that occurred in January , but it was pretty small. Last year, when we ran into those issues, we

Unknown Executive: Yeah, David, there are a couple of things there. We did have some

Eric: That really drove most of the incremental down days that we had year over year in Q1. So that was planned activities. So by and large to answer your question land activities. We do have a large shutdown that we're working through at our Deer Park plant as you mentioned, that's a seven eight year event that we're doing to really read too.

Speaker Change: We spent some nice capital on upgrading.

Unknown Executive: Spent some nice capital on upgrading the weather protection across our El Dorado facility, so that prevented one of our trains from having to come down in those deep freezes. So we really saw the results of being able to stay online for the most part through that deep freeze, although there is a little on one of the trains.

Speaker Change: the weather protection across our El Dorado facility, so that prevented

Eric: Some of the wastewater treatment activities down there that are on the back end of that plant that is proceeding extremely well the team's doing a good job. So we expected the 90, 879% and 80% of that area and we still fully anticipate with the activities that we have underway that will be into that mid to high upper.

Speaker Change: one of our trains from having to come down in those deep freeze, so we really saw the results of being able to

Speaker Change: stay online for the most part through that deep breeze. There is a little on one of the train.

Speaker Change: In addition to that, we had planned turnarounds. We had a major outage that we did up at our Canadian incinerator in Sarnia that

Unknown Executive: In addition to that, we had planned turnarounds. We had a major outage that we did at our Canadian incinerator in Sarnia that really drove most of the incremental down days that we had year over year in Q1, so that were planned activities. So by and large, to answer your question about planned activities, we do have a large shutdown that we're working through at our Deer Park plant. As you mentioned, that's a seven, eight-year event that we're doing to retool some of the wastewater treatment activities down there that are on the back end of that plant.

David John Manthey: that really drove most of the incremental down days that we had year over year in Q1. So that was planned activities. So by and large, to answer your question, planned activities,

Eric: <unk> for 2024.

Speaker Change: Only thing I'd add to that David.

Speaker Change: To that point in Q2, the margins in Es, you know there won't be enough there'll be a good there'll be good margin growth and they'll be material margin growth, but it won't be a standard that is what we see in.

David John Manthey: We do a little large shutdown that we're working through at our Deer Park plant. As you mentioned, that's a seven, eight-year event that we're doing to reattule some of the wastewater treatment activities down there that are on the back end of that plant. That is proceeding extremely well. Teams doing good job. So we expected the 979%, 80% that area, and we still fully anticipate with the activities that we have underway that will be into that mid-to-high upper radius. for 2024.

Eric: In Q1.

Eric: Right.

Speaker Change: To follow on that train.

Eric: Train of thought here at the my understanding is that the killing right now in Deer Park isn't able to take certain materials because of the the.

Unknown Executive: That is proceeding extremely well; the team's doing a good job. So we expected the 79%, 80% in that area, and we still fully anticipate with the activities that we have underway that we'll be into that mid to high upper 80s for 2022. The only thing I'd add to that

Eric: Our state of the kill them today and.

Eric: I'm wondering going forward could we see an uptick in.

Speaker Change: The only thing I'd add to that, Dave, is that to that point, in Q2, the margins in ES, you know, there won't be enough, there'll be a good, there'll be good margin growth, and there'll be material for margin growth, but it won't be as a standard as what we see.

Unknown Executive: The only thing I'd add to that, Dave, is that at that point, in Q2, the margins in ES won't be enough. There'll be good margin growth, there'll be material for margin growth, but it won't be as sustainable as what we see. Okay. And just to follow on that.

Eric: Value there just given that your you'll you'll have that refreshed and ready to go.

Eric: The David the Deer Park incineration units.

Eric: Have very robust capabilities, they take a very diverse suite.

Speaker Change: you want.

Dave: Right, and just to follow on that train of thought here, my understanding is that the kiln right now in Deer Park isn't able to take certain materials because of the

Unknown Executive: Right. And just to follow on that, that train of thought here at the, my understanding is that the kiln right now in Deer Park isn't able to take certain materials because of the State of the Kiln today and the, I'm wondering, going forward, could we see an uptick in value there, just given that you'll have that refreshed and ready to go?

Eric: Fight along with their El Dorado site can take everything.

Eric: So the it's not that we're adding additional capabilities the capabilities there are as robust as any plant in our network in any plants in the industry for that matter. So we do we handle a significant amount of the direct burn streams from that Gulf market on there but.

Unknown Executive: state of the kiln today and the

Dave: I'm wondering going forward could we see an uptick in value there just given that you'll have that refreshed and ready to go?

Eric: By and large very robust capabilities and that will continue.

Speaker Change: Gotcha. Thank you.

Unknown Executive: The, David, the Deer Park incineration units

David John Manthey: The, uh, David, the...

Speaker Change: Thanks, Dave.

Speaker Change: Our next question comes from the line of Timna Tanners with Wolfe Research. Please proceed with your question.

Dave: have very robust capabilities. They take a very diverse suite. That site, along with our El Dorado site, can take everything.

Timna Beth Tanners: Yeah, Hey, good morning, everyone hope you're doing well.

Unknown Executive: That site, along with our El Dorado site, can take everything. So it's not that we're adding additional capabilities. The capabilities there are as robust as any plant in our network and any plant in the industry, for that matter. So we do handle a significant amount of the direct burn streams from that Gulf market on there, but by and large, very robust capabilities in that.

Timna Beth Tanners: Good morning.

Unknown Executive: So it's not that we're adding additional capabilities, the capabilities there are as robust as any plant in our network and any plant in the industry for that matter. So we do, we handle a significant amount of the direct burn streams from that Gulf market on there, but by and large, very robust capabilities and that will continue.

Timna Beth Tanners: I wanted to ask about the base oil outlet and what you're budgeting in your guidance given the comments about the uptake is.

Timna Beth Tanners: So great to see some of the measures you've taken it we're hopeful that he and the negative comparison behind but just wanted a little bit more color on how youre thinking about that trajectory and your estimate forecast.

Timna Beth Tanners: Yeah. This is Mike. Thanks for the question Yeah, we are going to have it's a pretty modest uptake and we've tried to be thoughtful as he does as you're giving guys. We've been we've been burnt a little bit in the past a bias we were although that base oil prices bolstered pricing has gone up quite a bit or was that a month or so we've been pretty cautious and sprint.

Speaker Change: Got you. Thank you.

Speaker Change: Thank you.

Unknown Executive: Our next question comes from the line of Timna Tanners with Wolf Research. Please receive with your question.

Unknown Executive: Yeah, hey, good morning, everyone. Hope you're doing well.

Unknown Executive: Yeah, hey, good morning everyone. I hope you're doing well. Good morning.

Timna Beth Tanners: Good morning. Good morning. I wanted to ask about the base oil outlook, what you're budgeting in your guidance, given the comments about the uptick. It's so great to see some of the measures you're taking. We're hopeful to see the negative comparisons behind, but just wanted a little bit more color on how you're thinking about the trajectory in your estimates forecast.

Timna Beth Tanners: Modest increase in our in the pricing environment, We're hopeful will come back in 90 days from now and before you know a nice.

Timna Beth Tanners: And I speak to that number and and to your point you know put that put the negative these kind of behind us.

Speaker Change: Okay Fair enough. That's helpful and then regarding capital allocation and you know what what drives the pace of buybacks corner to corner, how how do you think about that.

Unknown Executive: Yeah, this is Mike, and thanks for the question. You know, we are going to have, it's a pretty modest uptick. You know, we try to be thoughtful as we've given guys. We've been burnt a little bit in the past by it, so we were, although the base oil prices, posted pricing has gone up, you know, quite a bit over the past month or so, we've been pretty cautious, and it's a pretty modest increase in the pricing environment. We're hopeful to come back to your 90 days from now and report, you know, a nice beat to that number. and, and to your point, you know, put the negative Vs kind of behind us.

Mike: Yeah, this is Mike, and thanks for the question. You know, we are going to have, it's a pretty modest uptick, you know, we try to be thoughtful, as we've, as we've given guys, we've been, we've been burnt a little bit in the past, by us, we were, although the base oil price and posted pricing has gone up, you know, quite a bit over the past month or so, we've been pretty cautious, and it's pretty modest increase in, in the pricing environment.

Speaker Change: How do you balance that and the pipeline for M&A with buybacks and you know I need debt Paydown, but you don't have to do it sounds like that could do just just any thoughts there.

Speaker Change: Yeah, Tim and Eric here.

Speaker Change: When we think about buybacks, but we're really opportunistic under that program I think we utilize it when we think the share prices are extremely undervalued and when he also utilize it so as not to dilute our current shareholders as new shares come into that.

Mike: We're hopeful to come back to the United Nations now and report, you know, a nice, nice beat to that number. And, and to your point, you know, put the, put the negative B's kind of behind us.

Tim: And to the market. So that's really the way we've handled that program in the last couple of years when each of last two years, we bought back about $50 million and that's accomplished those goals. So I would anticipate that we'll continue to use the program in that manner. When you think about overall capital allocation as evidenced by what we did this quarter with the two acquisitions.

Speaker Change: Okay, fair, that's helpful. And then regarding capital allocation, you know, what drives the pace of buybacks quarter to quarter? How do you think about that? How do you balance the pipeline for M&A with buybacks and, you know, any debt pay down, which you don't have to do, it sounds like, but could do? Just any thoughts there.

Unknown Executive: Okay, fair, that's helpful. And then regarding capital allocation, you know, what drives the pace of buybacks quarter to quarter? How do you think about that? How do you balance the pipeline for M&A with buybacks and, you know, any debt paydown, which you don't have to do, it sounds like, but could do? Just any thoughts there?

Speaker Change: Acquisitions, and you know accretive internal growth projects.

Speaker Change: Yeah, Tim and Eric here. You know, when we think about buybacks, we're really opportunistic under that program. I think we utilize it when we think the share price is extremely undervalued and we also utilize it so as not to dilute our current shareholders as new shares come into the

Tim and Eric: Yeah, Tim and Eric here. You know, when we think about buybacks, we're really opportunistic under that program. I think we utilize it when we think the share price is extremely undervalued, and we also utilize it so as not to dilute our current shareholders as new shares come into the market. So that's really the way we've handled that program the last couple years. In each of the last two years, we've bought back about 50 million dollars, and that accomplishes those goals.

Speaker Change: Kimball and like the Baltimore project. Those are those are where we'll put most of our capital and we'll continue that going forward.

Speaker Change: That's always an option, we certainly like our debt portfolio from the perspective of we do have some debt where we can pay down if if that's an attractive option for us.

Dave: into the market. So that's really the way we handled that program in the last couple years, when each of the last two years we bought back about $50 million, and that's accomplished those goals. So I would anticipate that we'll continue to use the program in that manner. When I think about overall capital allocation, you know, as evidenced by what we did this quarter with the two acquisitions, acquisitions and, you know, accretive internal growth projects like Kimball and like the Baltimore project, those are where we'll put most of our capital. continue that going forward.

Speaker Change: But certainly I think acquisitions has and will continue to be the heavy hammer there when it comes to capital allocation.

Speaker Change: Okay helpful very much thank you.

Speaker Change: Thank you. Thank you.

Tim and Eric: So I would anticipate that we'll continue to use the program in that manner. When I think about overall capital allocation, you know, as evidenced by what we did this quarter with the two acquisitions. Acquisitions and, you know, accretive internal growth projects like Kimball and like the Baltimore project are where we'll put most of our capital, and we'll continue that going forward. That's always an option. We certainly like our debt portfolio from the perspective that we do have some debt where we can pay it down if that's an attractive option for us. You know, but certainly, I think acquisitions have and will continue to be the heavy hammer when it comes to capital allocation. Okay, very helpful very much.

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

Noah Duke Kaye: Hey, good morning, Thanks for taking the questions.

Speaker Change: First.

Noah Duke Kaye: Discuss that.

Noah Duke Kaye: Previously just coming at a little bit more granular on the free cash flow guide walk.

Tim and Eric: That's always an option. We certainly like our debt portfolio from the perspective of we do have some debt where we can pay down if that's an attractive option for us. You know, but certainly I think acquisitions has and will continue to be the heavy hammer there when it comes to capital allocation.

Noah Duke Kaye: You know raising EBITDA 50 million.

Speaker Change: Operating cash flow.

Speaker Change: Looks like about $10 million or so.

Speaker Change: So it doesn't sound like that was interest expense.

Speaker Change: Maybe some capex relate.

Speaker Change: Related to <unk>, but just help us maybe think about the bridge there.

Speaker Change: Okay, helpful very much. Thank you.

Unknown Executive: Okay. Very helpful very much. Thank you.

Speaker Change: Thank you. Thank you.

Speaker Change: Yeah, I mean I.

Speaker Change: No. It's Eric I think I'd start with the uptick in EBITDA from the acquisitions and the good Q1.

Dave: Our next question comes from line of Noah Kay with Oppenheimer. Please proceed with your question.

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

Noah Duke Kaye: Hey, good morning. Thanks for taking the questions. First, you discussed it previously, just coming it a little bit more granular on the free cash flow guide walk, you know, raising EBITDA, 50 million operating cash flow.

Noah Duke Kaye: Hey, good morning. Thanks for taking the questions. First, you discussed it previously, just coming in a little bit more granular on the free cash flow guide walk, you know, raising EBITDA, 50 million operating cash flow Transcripts provided by Transcription Outsourcing, LLC. Yeah, I mean, I...

Eric: And then I think as I reconcile from kind of keep it at that.

Speaker Change: Free cash flow and the rationale for keeping free cash flow guide flat to what we said last quarter.

Speaker Change: It is really the incremental debt. So you've got based upon today's rates are about $25 million of incremental interest payments on the debt and then as we know when we buy these acquisitions there's always.

Noah Duke Kaye: Looks like about 10 million or so. So it doesn't sound like that was interest expense, maybe some cap-ex related to Hepico, but to just help us maybe think about the bridge there. Okay.

Speaker Change: Theres always some incremental capex. So there's probably another as you saw we increased our capital expenditures this year by $10 million. So you've kind of got $35 million, there and our free cash flow guide, that's incremental to last quarter, but.

Unknown Executive: Yeah, I mean, no, it's Eric, I think you start with the uptick in Ibadah from the acquisitions and the good Q1 growth.

Eric: Yeah, I mean, Noah, it's Eric. I think I'd start with the uptick in EBITDA from the acquisitions and good Q1 growth. And then I think it was a reconciliation from kind of EBITDA to free cash flow and the rationale for keeping free cash flow guys flat to what we said last quarter is really the incremental debt. So you've got, based upon today's rates, about $25 million of incremental interest payments on the debt.

Speaker Change: But keep in mind I think when we look at the certainly the the two acquisitions.

Speaker Change: We have a little bit of synergies kind of built into the forecast that much as we continue to integrate this business throughout the year, but as those synergies come.

James Andrew Ricchiuti: And then I think it was they reconcile from kind of EBITDA to free cash flow and the rationale for keeping free cash flow guys flat to what we said last quarter. It is really the incremental debt. So you've got based upon today's rates about, you know, $25 million of incremental interest payments.

Speaker Change: And particularly the type of coal, we feel really really good about the synergies having owned them for about a month now.

Speaker Change: Certainly from a free cash flow perspective, those kind of those things will become more accretive towards the end of the year and certainly into 2025.

Eric: And then, as we know, when we buy these acquisitions, there's always some incremental cap backs. So there's probably another, as you saw, we increased our capital expenditures this year by $10 million. So you've kind of got $35 million there in our free cash flow guide that's incremental to last quarter. But keep in mind, I think, when we look at certainly the two acquisitions, we have a little bit of synergies kind of built into the forecast, not much as we continue to integrate this business throughout the year.

Eric: on the debt. And then as we know, when we buy these acquisitions, there's always some incremental CAP-X. So there's probably another, as you saw, we increased our capital expenditures this year by 10 million.

Speaker Change: Yeah. Thanks for anticipating the synergies question I think you had you had targeted 20 million after year, one and if you're not putting as much. This year, obviously that could be upsides, okay. How do we think about kimball ramping capacity.

Eric: So you've kind of got $35 million there in our free cash flow guide that's incremental to last quarter. But keep in mind, I think, when we look at the, certainly the two acquisitions, you know, we have a little bit of synergies kind of built into the forecast, not much as we continue to integrate this business throughout the year. But as those synergies come, and particularly with Heppoco, we feel really, really good about the synergies, having owned them for about a month now. Certainly from free cash flow perspective, those things will become more accretive. at the end of the year and certainly end into 2025.

Speaker Change: How do we think about mix, maybe we can start with <unk> and then think about the plan for <unk> called the first half of next year.

Eric: But as those synergies come in, in particular with Tepico, we feel really, really good about the synergies having owned them for about a month now. Certainly, from a free cash flow perspective, those things will become more accretive towards the end of the year and certainly into 2020.

Speaker Change: Yeah, I know Eric here, So we're excited.

Eric: To be on schedule to open Kimball in Q3 and into Q4 of this year coming online our focus will be again really around the drum volumes that are throughout our network that we've seen really substantial drum volumes increased year over year.

Speaker Change: Yeah, thanks for anticipating the Synergy's question. I think you had targeted 20 million after year one, and if you're not putting in much this year, obviously that could be upside. Okay, how do we think about Kimball ramping capacity and how we think about mix? Maybe we can start with 4Q and then think about the plan for, call it the first half of next year.

Eric: Thanks for anticipating the Synergies question. I think you had targeted $20 million after year one, and if you're not putting in much this year, obviously, that could be upside. Okay, how do we think about Kimball ramping capacity and how do we think about mix? Maybe we can start with 4Q and then think about the plan for the first half of next year. Yeah, no, Eric here. So we're excited.

Eric: So we will have really a ramp up in Q4, and then into 2025, we would anticipate doing 2025 to 30000 tonnes through that unit.

Eric: 2025 around that sweet spot of drums and also the reference.

Eric: Need water streams as we ramp up throughout the course of the year.

Eric: Yeah, no, Eric here. So we're excited to be on schedule to open Kimball in Q3 and into Q4 of this year coming online. Our focus will begin really around the drum volumes throughout our network that we've seen really substantial drum volumes increase year over year.

Eric: Yeah, Noah, and Eric here. So we're excited to be on schedule to open Kimball in Q3 and into Q4 of this year. Coming online, our focus will begin really around the drum volumes that are throughout our network that we've seen really substantial drum volumes increase year over year. So we'll have a really ramp up in Q4 and then into 2025, we would anticipate doing 20, 25 to 30,000 tons through that unit in 2025 around that sweet spot of drums and also direct burn. Clean Water Streams as we ramp up throughout the course of the year.

Speaker Change: Okay terrific.

Speaker Change: And then just to circle back on P. Fast Michael asked the questions are around that opportunity.

Eric: I guess just to simplify it for me what impact has the team seen as a result of some of these regulations and I know there was.

Eric: So we'll have really a ramp up in Q4, and then into 2025, we would anticipate doing 20, 25 to 30,000 tons through that unit, 2025 around that sweet spot of drums and also direct burns and

Eric: Some visibility to those coming so not necessarily suggesting you know speed was open but but just talk about the impact on the pipeline that you've seen now that we have some official regulations.

Eric: lean water streams as we ramp up throughout the course of the year.

Eric: And the circle of designation.

Eric: Yeah.

Speaker Change: Yeah, No we've as we've said previously.

Speaker Change: Okay, terrific.

Speaker Change: We're doing about 50 to 70 million of T bus related work throughout our network from all the different opportunities we see on our total coupons solutions.

Speaker Change: And just to circle back on PFS, you know, Michael asked the questions around that opportunity.

Unknown Executive: Okay, terrific. And just to circle back on PFAS, you know, Michael asked the questions surrounding that opportunity. I guess just to simplify it for me, what impacts has the team seen as a result of some of these regulations? And I know there was, you know, some visibility to those coming, so not necessarily suggesting, you know, a spigot was open, but just talk about the impacts on the pipeline that you've seen, now that we have some official regulations and the circular desk.

Unknown Executive: I guess just to simplify it for me, what impact has the team seen as a result of some of these regulations? And I know there was some visibility to those coming, so not necessarily suggesting, you know, a speaker was open. But just talk about the impacts on the pipeline that you've seen now that we have some official regulations and the circular designation.

Speaker Change: Our total pipeline seems to be growing at about 15% to 20% each each quarter as we go into 2025.

Speaker Change: So real strong pipeline growth and I would say the pipeline growth is pretty diverse it's looking at industrial water opportunities drinking water opportunities sampling and background analysis, but also remedial events, we do see activity where are already customers.

Speaker Change: Yeah, Noah, we've, as we've said previously, we're doing about 50 to 70 million of PFS related work throughout our network from all the different opportunities we see on our total PFA solutions.

Unknown Executive: Yeah, Noah, we're, as we've said previously, doing about 50 to 70 million PFAS-related work throughout our network from all the different opportunities we see in our total PFAS solution. Our total pipeline seems to be growing at about 15 to 20 percent each quarter as we go into 2025. So, really strong pipeline growth, and I would say the pipeline growth is pretty diverse. It's looking at industrial water opportunities, drinking water opportunities, sampling and background analysis, but also remedial events.

Speaker Change: <unk> are saying, Hey, we want to plan them remediation because we have a construction of events that we want to use that slide four we also see some opportunities across with a triple S change outs throughout different districts, where regulations and the heightened awareness of all people up.

Unknown Executive: Our total pipeline,

Unknown Executive: seems to be growing at about 15 to 20%.

Unknown Executive: each quarter as we go into 2025.

Unknown Executive: So real strong pipeline growth. And I would say the pipeline broke

Speaker Change: <unk> is causing.

Speaker Change: I hear departments to want to have a plant where they are or I'm, sorry different customers that they need to have a plan to change out there a triple S. In their lives that need to be drained and recharge so that disposal of existing a triple left as some of the opportunities that we see as well and how we might serve.

Unknown Executive: is pretty diverse.

Unknown Executive: It's looking at

Unknown Executive: Industrial water opportunities, drinking water opportunities,

Unknown Executive: Sampling and Background Analysis,

Unknown Executive: but also remedial events. We do see activity where already customers are saying, hey, we want to plan a remediation because we have a construction event that we want to use that site for. We also see some opportunities across with A triple F changeouts.

Unknown Executive: We do see activity where customers are already saying, hey, we want to plan a remediation because we have a construction event that we want to use that site for. We also see some opportunities with AFFF change outs throughout different districts where regulations and the heightened awareness of all PFAS-related issues are causing Fire Departments to want to have a plan where they, or I'm sorry, different customers, that they need to have a plan to change out their AFFF in their lines that need to be drained and recharged so that disposal of existing AFFF is some of the opportunities that we see as They need to make sure they put non-PFAS related AFFF in their lines. So that's, it's really across the board where we're at...

Speaker Change: Or is that on a broad basis, knowing that there are many areas that need that before they have in them that they need to make sure. They put on a few bumps related each are molybdenum alloy. So that's.

Unknown Executive: throughout different districts where regulations and the height and awareness of all PFOS related is causing

Speaker Change: It's really across the board, where we're seeing opportunities should know I just go back to Michael's question in your question obviously.

Unknown Executive: Fire departments,

Unknown Executive: to want to have a plan where they, or I'm sorry, different customers that they need to have a plan to change out their A triple F in their lines that need to be drained and recharge. So that disposal of existing A triple F is some of the opportunities that we see as well and how we might service that on a broad basis, knowing that there are many areas that need that before they have an event. They need to make sure they put non-POPs related A-TOPPOS. to live in the alliance.

Speaker Change: Obviously, new regulations very important how clean is clean we've said that many many times and I don't think we're stopping nor our customers shopping in areas like Triple S. In other areas, where we know theres a high concentration of P. Fast. We're doing you know we rolled out the total P. Fast solution, we talked about that last quarter.

Speaker Change: Lot of training a lot of a lot of marketing around that it was getting kind of all all of our sales organization and educated on the benefit because it affects all of our businesses as Eric said eight triple S firefighting foam, whether it'd be soils, whether it be you know what even field service cleanout work, it's going to affect all different lines of our business as we continue to grow and I do think that this has gone.

Unknown Executive: It's really across the board where we're seeing opportunities.

Speaker Change: So, Noah, just go back to Michael's question and your question.

Unknown Executive: So Noah, just to go back to Michael's question and your question. Obviously, new regulation is very important. How clean is clean? We've said that many, many times, but I don't think we're stopping, or our customers are stopping, in areas like AFFF and other areas where we know there's a high concentration of PFAS. We're doing, you know; we rolled out the total PFAS solution. We talked about that last quarter.

Speaker Change: Got you know the fact that we've got the drinking water standards out there and and I'm getting more and more regulation around circle rules around this we have that solution and we you know, it's very very important for us and our customers to have a total destruction.

Unknown Executive: Obviously new regulation, very important. How clean is clean, we've said that many, many times. But I don't think we're stopping, nor are our customers stopping, in areas like A triple F and other areas where we know there's a high concentration of PFS. We're doing, you know, we rolled out the total PFS solution. We talked about that last quarter. We're doing a lot of training, a lot of marketing around that. And we're getting kind of all our sales organization educated on the benefits. It affects all our businesses.

Unknown Executive: We're doing a lot of training, a lot of marketing around that, and we're getting kind of all our sales organization kind of educated on the benefits. It affects all our businesses. As Eric said, AFFF firefighting foam, whether it be soil, whether it be, you know, even field service, and clean out work, it's going to affect all different lines of our business as we continue to grow. And I do think that this has got, you know, the fact that we've got the drinking water standards out there and they're getting more and more regulation around circular rules around this. We have that solution, and we, you know, it's very, very important for us and our customers to have a total destruction solution. We have that.

Speaker Change: Good restructuring solution, we have that today.

Speaker Change: Perfect. Thanks, so much for the comprehensive answer.

Speaker Change: Thank you.

Speaker Change: As a reminder, if you would like to ask a question press star one on your telephone keypad.

Unknown Executive: As Eric said, AEAW firefighting foam, whether it be soils, whether it be, you know, even field service cleanout work, it's going to affect all different lines of our business as we continue to grow. And I do think that this has got, you know, the fact that we've got the drinking rotter standards out there, and they're getting more and more regulation around circular rules around this. You know, we have that solution. You know, it's very, very important for us and our customers to have, you know, a total destruction, you know, a total destruction solution. We have that today. Thank you.

Speaker Change: Our next question comes from the line of Larry Solow with CJS Securities. Please proceed with your question.

Lawrence Scott Solow: Great Good morning, guys.

Lawrence Scott Solow: Most of them.

Lawrence Scott Solow: Hey, Thanks, most of my questions have been answered no stole my last couple there I guess just coming.

Lawrence Scott Solow: Coming back to the cadence of just the cadence on S. K S. S. It sounds like obviously, you're building in a pretty nice ramp.

Lawrence Scott Solow: It looks like you almost have to get to like a average of like 50 million a quarter to kind of get to the mid point of the the numbers. So do we.

Speaker Change: Perfect. Thanks so much for the comprehensive answer.

Unknown Executive: Perfect. Thanks so much for the comprehensive answer.

Speaker Change: Thank you. Thanks, Tom.

Lawrence Scott Solow: It kind of any second quarter, a little bit up in the back half of the year is really where you get the full impact of.

Unknown Executive: As a reminder, if you would like to ask a question, press Star 1 on your telephone keypad.

Lawrence Scott Solow: As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question comes from the line of Larry Solo with CJS Securities. Please proceed with your question.

Lawrence Scott Solow: Some of these projects to in some of the ramp of the base oils blended I mean, yeah. Yeah, you got it right and there is a pretty big jump from where we ended Q1 into Q2.

Lawrence Scott Solow: Our next question comes from the line of Larry Solo with CJS Securities. Please receive with your question.

Lawrence Scott Solow: Pricing that started production in our plants and a few others.

Lawrence Scott Solow: Great, good morning, guys. Most of my questions...

Lawrence Scott Solow: Great. Good morning, guys. Most of my questions have been answered. Noah stole my last couple there.

Lawrence Scott Solow: Good things are happening for us, including who treat.

Lawrence Scott Solow: Hey, hey, most of my questions have been answered. Noah stole my last couple there. I guess just coming back to the cadence, just the cadence on SKSS. It sounds like obviously you're building in a pretty nice ramp. Looks like you almost have to get to like an average of like 50 million a quarter to kind of get to the midpoint of the numbers. So do we...

Lawrence Scott Solow: Our rollout and and until you have a bit of a bit of a beat in Q2, obviously, a big beat in Q3 because of of where we are versus the fee. We added in Q3.

Unknown Executive: I guess just come back to the cadence, just the cadence on SKSS. It sounds like, obviously, you're building in a pretty nice ramp. Looks like you almost have to get to like an average of like 50 million a quarter to kind of get to the midpoint of the number. So is it kind of an easy second quarter, a little bit up, and then the back half of the year is really where you get the full impact of, you know, some of these projects, too, and some of the ramp of the base oils or the blended ones, I mean.

Speaker Change: Right got you, Okay, and then just on Kimball and on the Capex I think $65 million. This year that does that is that basically complete the majority of the bulk of the spending and then going forward. It just incremental maintenance stops.

Unknown Executive: Is it kind of an E, second quarter a little bit up, and then the back half of the year is really where you get the full impact of some of these projects too and some of the ramp of the base oils?

Speaker Change: Yeah, that's right Larry will that $65 million will get us to that 200 Mark.

Speaker Change: Of the blended of me? Yeah, you got it right, man. It's a pretty big jump from where we ended Q1 into Q2. I think that's better pricing, that's better production in our plants, and a few other good things that are happening for us, including Group 3 and a rollout. And so a bit of a beat in Q2, obviously a big beat in Q3 because of where we are versus the B we added in Q3 and Q2.

Unknown Executive: Yeah, you got it right, man. There's a pretty big jump from where we end in Q1 to where we end in Q2. I think that's better pricing, that's better production in our plants, and a few other good things that are happening for us, including Group 3 and a rollout. And so, a bit of a beat in Q2, obviously, a big beat in Q3 because of where we are versus the B we added in Q3. Right, gotcha. Okay.

Larry: Well, we'll have some related to startup additional capital that's really just us stuff.

Speaker Change: Got it okay, great and then just lastly, I hate to call. It sounds like you're you know you're reaffirming all the it sounds like things are going good. It's early on obviously early days, but.

Larry: The synergies I guess.

Larry: You're not building in much of this year it feels like right, but maybe there is a little bit upside there, but you're still kind of holding firm. So within the first 12 months, you don't realize that $20 million, but.

Speaker Change: Right, gotcha. Okay. And then just on Kimball, on the Kepaks, I think 65 million this year, does that, is that basically complete the majority of the bulk of the spending and then going forward to just the incremental maintenance stuff?

Unknown Executive: Right, gotcha. Okay. And then just on Kimball, on the CapEx, I think $65 million this year. Does that basically complete the majority, the bulk of the spending, and then going forward, it's just the incremental maintenance stuff?

Unknown Executive: And then just on Kimball on the cutback.

Lawrence Scott Solow: Beyond that the 12 months that the 20 million should be realized right and is that kind of the way to look at it.

Speaker Change: Yeah, that's right, Larry, it will. The $65 million will get us to that $200 mark.

Lawrence Scott Solow: You could do 60 million EBITDA and yeah next year, maybe or you know.

Unknown Executive: Well, we'll have some related startup additional capital, but that's really gets us full spend.

Unknown Executive: Well, we'll have some related startup additional capital, but that's really gets us spent.

Lawrence Scott Solow: So that's how we're thinking about Alere I I think a smaller amount of synergies. This year, obviously as we roll in we'll have some offsetting severance integration costs, we talked about but certainly in that 20 million number 12 months from now that's the run rate and I think safe to say, we feel really good about that.

Speaker Change: Got it. Okay, great. And then just last, it, Hippico, it sounds like, you know, you're reaffirming all the, sounds like things are going good. It's early on, obviously, early days, but the synergies, I guess, you know,

Unknown Speaker: Unknown Speaker Got it. Okay, great.

Speaker Change: You're not building in much this year, it feels like, right? But maybe there is a little bit upside there, but you're still kind of holding firm. So within the first 12 months, you don't realize that $20 million, but beyond that 12 months, that $20 million should be realized, right? Is that kind of a good way to look at it? You could do $60 million even, yeah, next year maybe, or, you know.

Lawrence Scott Solow: Strong possibility, it's probably even a little bit better ourselves.

Lawrence Scott Solow: You know really loved the acquisition fits in nicely as Mike and Eric alluded to we are first week in March.

Lawrence Scott Solow: So really nice to see that fit in with the hardware. So that's got great excellent. Thanks, Thanks, guys I appreciate it.

Unknown Executive: And then just let's say a heap of calls, it sounds like you know, you're reaffirming all the things that sound like things are going well. It's early on, obviously, early days, but the synergies, I guess, you're not building in much this year, it feels like right, but maybe there is a little bit of an upside there, but you're still kind of holding firm. So within the first 12 months, you don't realize that 20 million, but beyond that, those 12 months, that 20 million should be realized, right? Is that kind of a good way to look at it? You could do 60 million EBITDA, and yeah, next year, maybe, or you know.

Speaker Change: Thank you Mr. Grossman broke we have no further questions at this time I would like to turn the floor back over to you for closing comments.

Speaker Change: Is that fair? Yeah, that's how we're thinking about it, Larry. I think a smaller amount of synergies this year, obviously, as we roll in, we'll have some offsetting severance integration costs we talked about. But certainly that's 20 million number, you know, 12 months from now, that's the run rate. And I think safe to say, we feel really good about that strong possibility. It's probably a little bit better, so.

Unknown Executive: Yeah, that's how we're thinking about it, Larry. I think a smaller amount of synergy this year, obviously, as we roll in, we'll have some offsetting, severance, and integration costs we talked about. But certainly that $20 million number, you know, 12 months from now, that's the run rate. And I think it's safe to say we feel really good about that strong possibility. It's probably even a little bit.

Speaker Change: Thanks for joining us today next week management will be at the waste Expo in Las Vegas, and participating Stifles Investor Summit, there as well as the Oppenheimer Industrial growth conference later in the week.

Speaker Change: We also have several conferences wind up in Boston and New York in early June.

Speaker Change: After calendar, we look forward to seeing some of you at these and other events. Thank you.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.