Q2 2025 Clean Harbors Inc Earnings Call
Christine: Greetings, and welcome to the Clean Harbors Inc. second quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael McDonald, General Counsel for Clean Harbors Inc. Mr. McDonald, please go ahead.
Greetings and welcome to the Clean Harbors. Second quarter, 2025 Financial results conference call.
This time, all participants are in a listen-only mode.
A brief question and answer session will follow the formal presentation.
As a reminder, this conference is being recorded.
Michael Mcdonald: Thank you, Christine, and good morning, everyone. With me on today's call are our Co-Chief Executive Officers, Eric Gerstenberg and Mike Battles, our EVP and Chief Financial Officer, Eric Dugas, and our SVP of Investor Relations, Jim Buckley. Slides for today's call are posted on our investor relations website, and we invite you to follow along. 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 1995. Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, July 30th, 2025. Information on potential factors and risks that could affect our results is included in our SEC filings. The company undertakes no obligation to revise or publicly release the results of any revisions of the statements made today other than through filings made concerning this reporting period.
It is now my pleasure to introduce your host. Michael McDonald general counsel for Clean Harbors, Mr. MacDonald please go ahead
Thank you, Christine and good morning everyone.
With me on today’s call is our Chief Co-Chief Executive Officer.
Our request to work and Mike Battles.
Our EVP.
Chief Financial Officer, Eric Dugas and our SVP investor relations. Jim Buckley, slides for today's call are posted on our investor relations website and we invite you to follow along
Matters. We are discussing today that are not historical facts. Are considered what we're looking statements within the meaning of the private Securities. Litigation Reform Act of 1995 participants are cautioned not to place under Alliance on these statements which reflect Management's opinions. Only of today, July 30th 2025
Michael Mcdonald: Today's discussion includes references to non-GAAP measures. CLEAN HARBORS INC. believes that such information provides an additional measurement and consistent historical comparison of its performance. Reconciliation of these measures, the most directly comparable GAAP measures, are available in today's news release, on our IR website, and in the appendix of today's presentation. Let me turn the call over to Eric Gerstenberg to start. Eric.
Information on potential factors and risks that could affect our results is included in our SEC products. The company 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 Dean hovers believes that such information provides an additional measurement and consistent historical comparison of its performance. Reconciliation of these measures the most directly comparable. Gaap measures are available in today's news release on our IR website, and in the appendix of today's presentation.
Eric Gerstenberg: Thanks, Michael. Good morning, everyone, and thank you for joining us. As always, let me start with our safety results. We achieved our lowest ever quarterly TRIR of 0.40 in Q2, setting a new company benchmark for safety performance. Year to date, our TRIR stands at 0.45, reflecting our ongoing commitment to operational excellence and a culture of continuous improvement. This approach delivers significant benefits, including measurable advantages to costs and fewer lost workdays. There are also intangibles, like a stronger reputation with our customers, the ability to attract the best people, and most importantly, making sure everyone knows they're protected and valued at work. Turning to our financial performance on slide three, our results in Q2 highlighted the sustained profitable growth of Environmental Services and the stabilization of Safety-Kleen Sustainability Solutions, as both segments came in ahead of our expectations.
Let me turn the call over to Eric G to start. Eric.
Thanks, Michael. Good morning, everyone and thank you for joining us.
As always, let me start with our safety results.
We achieved our lowest ever quarterly TRIF of 0.40 in Q2, setting a new company benchmark for safety performance.
Year-to-date, our try stands at 045, reflecting our ongoing commitment to operational excellence in a culture of continuous improvement.
This approach delivers significant benefits including measurable advantages to costs and fewer loss work days.
The best people and most importantly, making sure everyone knows they're protected and valued at work.
Eric Gerstenberg: Consolidated adjusted EBITDA margin increased by 60 basis points to 21.7%, driven by strong demand of our disposal and recycling assets and lower SG&A costs. Mike will cover SKSS shortly, but it's clear our waste oil collection strategies in that segment are delivering results. Corporate segment costs were lower year over year due to cost-cutting actions and non-recurring items that were included in Q2 of 2024, partly offset by higher insurance, severance costs, and technology investments. Overall, our results reflect continued business momentum from late Q1. Turning to our segment reviews, beginning with ES on slide four, segment adjusted EBITDA margin grew year over year for the 13th consecutive quarter. The primary drivers were increased volumes combined with pricing and efficiency gains.
Turning to our financial performance on slide 3. Our results in Q2 highlighted the sustained profitable growth of Environmental Services in the stabilization of safety claims Sustainable Solutions as both segments came in ahead of our expectations.
Consolidated adjusted Eva to our margin increased by 60 basis points. The 21.7% driven by strong demand of our disposal and recycling assets and lower sgna costs.
Mike will cover SKSS shortly, but it's clear our waste oil collection strategies and that segment are delivering results.
Corporate segment costs were lower year-over-year due to cost, cutting actions and non-recurring items that were included in Q2 of 2024, partly offset by higher Insurance Severance costs and Technology Investments.
Overall, our results. Reflect continued business. Momentum from Lake q1.
Turning to our segment reviews, beginning with es on slide 4 segments, adjusted Eva de margin, grew year-over-year for the 13th consecutive quarter.
Eric Gerstenberg: Segment top line growth was all organic, as increases in disposal revenue, waste projects, and pricing programs more than offset the fewer large emergency response events in Q2 this year. Looking at revenues by segment components, Safety-Kleen Environmental led the growth at 9%, driven by pricing gains and growth in core service offerings. The number of parts washer services was down slightly from a year ago due to actions we are taking on the waste oil collection side, as well as the more advanced parts wash models we are introducing that generate higher revenue per stop. In addition, the SK branches continue to drive substantial volumes of containerized waste into our permitted facilities. In technical services, higher incineration and landfill volumes supported by pricing programs drove a 4% revenue increase. Incineration price rose 7% on a mixed adjusted basis. Incineration utilization was 89% versus 88% a year ago.
The primary drivers were increased volumes combined with pricing and efficiency. Gains.
Segment. Topline growth was all organic as increases in disposal Revenue, waste projects and pricing programs.
More than offset the fewer large emergency response events in Q2 this year.
looking at re revenues by segment components safety clean environmental led the growth at 9% driven by price and gains and growth in core Services offering
The number of Parts Wash Services was down slightly from a year ago. Due to actions we are taking on the waste oil collection side, as well as the more advanced Parts Wash models, we are introducing that generate higher revenue per stop.
In addition, the city SK branches continue to drive substantial volumes of containerized waste.
Into our permanent facilities.
In Technical Services, hire your incineration and landfill volumes supported by pricing programs drove by 4%, Revenue increase in Federation Pro price, Rose 7% on a mixed adjusted basis.
Eric Gerstenberg: For comparison purposes, this quarter's utilization number excludes the new Kalman-Kimball as we ramp up. With the inclusion of Kimball, our utilization rate would still be strong at 86%. We are successfully completing our shakedown process of the new unit, which processed more than 10,000 tons in the quarter. We are also seeing more network efficiency in terms of waste and transportation as Kimball processes greater volumes and waste types. Even with the tariff uncertainty hitting some of our customers in early April, incineration demand remained high throughout Q2 and continues to show no signs of slowdown, with reshoring and manufacturing expansion top of mind for many of our key customers across multiple verticals. At the same time, we still see the potential for captive closures as we continue to have good discussions with several operators.
Consideration utilization was 89% versus 88% a year ago.
For comparison purposes. This quarter is utilization number excludes, the new kelman Kimmel as we ramp up.
With the inclusion of Kimball, our utilization rate would still be strong at 86%.
We are successfully completing our Shakedown process of the new unit, which processed more than 10,000 tons, in the quarter.
We are also seeing more Network efficiency in terms of waste and transportation.
The Kimbell processes greater volumes and waste types.
Even with the Tariff uncertainty hitting some of our customers in early April incineration demand remained High throughout Q2 and continues to show. No signs of slowdown with reshoring and Manufacturing expansion. Top of mind for many of our key customers across, multiple verticals.
Eric Gerstenberg: We're looking to cut costs by partnering with a vendor that has the capacity and network redundancy to safely handle and dispose of their incineration waste streams. Field services revenue was down from a year ago due to fewer large events. However, the team performed very well in Q2, generating strong margins on its base business. Within industrial services, revenue was up slightly year over year, reflecting a larger number of turnarounds that carried a lower average spend. Due to these market conditions, we have been enhancing workforce and equipment utilization while taking out costs. We are seeing those efforts as margins improve from a year ago, despite what has been a challenging environment for customer spending. We remain cautiously optimistic that the worst of the maintenance deferrals from IS customers is now behind us. Lastly, I wanted to touch on PFAS, given investor interest in this topic.
At the same time, we still see the potential for captive closures as we continue to have good discussions with several operators who are looking to cut costs by partnering with the vendor that has the capacity and network redundancy to safely handle and dispose of their incineration waste streams.
Field Services Revenue was down from a year ago due to fewer large events. However the team performed very well in Q2 generating strong margins on its base business.
With an Industrial Services Revenue was up, slightly year-over-year reflecting a larger number of turnarounds that carried a lower average spend.
Due to these market conditions, we have been enhancing Workforce and Equipment utilization while taking out costs.
We are seeing those efforts as margins improved from a year ago. Despite what has been a challenging environment for customer spending.
We remain cautiously optimistic that the worst of the maintenance of pearls from is customers is now behind us.
Eric Gerstenberg: The threat of litigation is creating a sense of urgency at the local, state, and federal levels to address contamination, either in water supplies or in site locations. Based on our discussions with the federal EPA and supported by their public statements, this administration remains committed to addressing the public health threat from PFAS. In addition, many states are attempting to mitigate the threat of forever chemicals, as more than 350 PFAS-related legislative bills have been introduced across 39 states. PFAS remediation is rapidly becoming a national priority, and we are the only company positioned to offer an end-to-end solution that includes permanent, scalable destruction. With new EPA guidance pending and at state-level action accelerating, we are prepared to lead in what many expect to be a multi-billion dollar opportunity.
Lastly, I wanted to touch on on Pas given investor interest in this topic.
The threat of litigation is creating a sense of urgency at the local, state, and federal levels to address contamination.
Either in water supplies or at site locations, based on our discussions with the federal EPA and supported by their public statements, this Administration remains committed to addressing the public health threat from POS.
In addition, many states are attempting to mitigate the threat of forever. Chemicals, as more than 350 Pas related, legislative bills have been introduced across 39 States.
Customer remediation is rapidly becoming a national priority and we are the only company positioned to offer an end-to-end solution that includes permanent scalable destruction.
Eric Gerstenberg: We believe that our retro permitted high-temperature incinerators with rigorous pollution controls remain the most viable and commercially scalable option for customers. The data from our last PFAS incineration site, which was performed in conjunction with the EPA, demonstrated that our incinerator achieved six nines of destruction of the key PFAS compounds and with emissions eight to ten times lower than the most restrictive state or federal standards. Very compelling data for any customers or government entities that may have been unsure about the safety or effectiveness of PFAS incineration. At the same time, our PFAS total solution offering continues to gain traction in the marketplace. With that, let me turn things over to Mike to discuss SKSS and capital allocation. Mike.
With new EPA, guidance, pending and and state level action. Accelerating, we are prepared to lead in what many expect to be a multi-billion dollar opportunity.
We believe that our record permitted, high temperature incinerators with rigorous pollution controls, Remain the most viable and commercially scalable option for customers.
The data from our last Pas incineration study, which was performed in conjunction with the EPA demonstrated that our incinerator achieved 69s of destruction of the key POS compounds in with emissions, 8 to 10 times lower than the most restrictive state or federal standards.
Very compelling data for any customers or government entities. That may have been unsure about the safety or effectiveness of POS incineration.
At the same time, rpos total solution offering continues to gain Traction in the marketplace.
Mike Battles: Thank you, Eric, and good morning. Turning to our Safety-Kleen Sustainability Solutions results on slide five, for the past several quarters, the team has done a terrific job shifting our customers to higher charge-for-oil or CFO, which helped drive our better-than-anticipated results in this segment. Our revenue decreased year over year as expected, reflecting lower market pricing and reduced volume sold. The $38 million we delivered in Q2 exceeded our expectations and reflects meaningful progress the team has made across a range of initiatives. We continue to aggressively manage our re-refining spread while lowering our cost structure and improving the efficiency of our operations. The shift to a CFO position that began in November continued in Q2. In the quarter, we gathered 64 million gallons of waste oil, which is up 11% sequentially.
With that, let me turn things over to Mike to discuss skss and capital allocation Mike.
Thank you, Eric and good morning turning to our skss results on slide. 5 for the past, several quarters. The team has done a terrific job. Shifting our customers to higher charge for oil or CFO which helped Drive our better than anticipated results in this segment.
Our Revenue decrease year-over-year as expected reflecting lower market pricing and reduced volume sold.
The $38 million we delivered in Q2 exceeded our expectations and reflects the meaningful progress the team has made across a range of initiatives.
We continue to aggressively manage our re-refining spread while lowering our cost structure and improving the efficiency of our operations.
The shift to a CFO position that began in November continued in Q2.
Mike Battles: We believe we are achieving a healthy balance between charging appropriately for the used oil collection services we provide against the value of waste oil in the market and the quantities we need to optimally run our plants. We made progress on several key initiatives in Q2. We modestly increased our direct blended sales in the quarter. These sales provide greater stability to our business as pricing tends to be less volatile, and they represent our highest margin gallons. During the quarter, we also advanced our partnership with BP Castrol as we support their more circular offering for corporate fleets. This lower carbon footprint solution is attracting more interest in the market, with several fleets signed up and more evaluating the offering.
In the quarter, we gathered 64 million gallons of waste oil, which is up 11% sequentially.
We believe We Are achieving a healthy balance between charging appropriately for the used oil collection Services. We provide against the value of waste oil in the market and the quantities. We need optimally, run our plans.
We made progress and kept several key initiatives. In Q2, we honestly increase our direct Blended sales in the quarter. These sales provide greater stability to our business. As pricing tend to be less volatile and they represent our highest margin gallons.
During the quarter, we also advanced our partnership with BP Castro, as we support their more circular offering for corporate fleets.
Mike Battles: We continue to grow our Group 3 gallons and are tracked to add several million gallons of Group 3 this year versus last year, which should support greater stability in this segment. Turn to slide six. We continue to evaluate opportunities to execute on various elements of our capital allocation strategy with the goal of generating the best long-term returns. In Q2, strong cash flows resulted in higher cash balances and our leverage improved. As a result, our strong balance sheet only got stronger, putting us in the ideal position to grow both internally and externally. On the M&A front, we remain active in evaluating both bolt-on transactions and larger transactions that would provide us with more permanent facilities, leverageable assets with high synergy potential, or ones that support our market position.
This lower carbon footprint. Solution is attracting more interest in the market with several Fleet signed up and more evaluating the offering.
We continue to grow our group 3 gallons and are on track to add several million gallons of group 3. This year versus last year, we should support greater stability in this segment.
Trying to slide 6, we continue to evaluate the opportunity to execute on various elements of our capital allocation strategy, with the goal of generating the best long-term returns.
In Q2 strong cash flows resulted in higher cash, balances and our leverage improved.
As a result, our strong balance sheet, only got stronger, putting us an ideal in in the ideal position to grow both internally and externally.
Mike Battles: Given our expansive network of assets, we believe that the right acquisition affords us the ability to unlock considerable long-term value, but we remain selective as always. Internally, we are evaluating additional organic investments to drive shareholder returns. With Kimball now on the path to success, we are looking at ways to increase incineration throughput at other locations in the years ahead. In Q2, we purchased our new Phoenix site, where we replicate the hub concept we are executing in Baltimore. We have other reasons to apply the same playbook going forward, as well as adding more processing or recycling capabilities like e-waste to other locations. We are also addressing the potential for further processing of our re-refined byproducts as we believe there is value to be harvested there.
On the m&a front, we remain active in evaluating both bolt-on transactions and larger transactions. That would provide us with more per permanent facilities leverageable assets with higher energy potential or 1 that supported our Market position.
Given our expansive network of assets, we believe that the right acquisition affords us the the ability to unlock considerable long-term value. But we remain selected as always.
Internally, we are evaluating uh additional organic Investments to drive shareholder returns.
With Kimball non the path to success. We're looking at ways to increase incineration throughput and other locations in the years ahead.
In Q2, we purchased our new Phoenix site where we replicate The Hub concept. We are executing in Baltimore.
We have other reasons to apply the same Playbook going forward as well as adding more processing or recycling capabilities, like E-Waste to other locations.
Mike Battles: With $700 million in cash, low leverage, a strong free cash flow, and free cash flow expected in the second half of 2025, we are in an ideal position to accelerate our growth and scale through both organic investments and strategic M&A. The pipeline is strong, and we fully expect to deploy significant capital in the quarters ahead in ways that enhance growth and long-term margins. As we are entering the back half of 2025 with strong momentum and a high level of confidence in our ability to deliver outstanding results, with the ongoing reshoring trend and substantial planned industrial investments in the U.S., our optimism is supported by a promising economic outlook. Reshoring is no longer a headline; it is becoming a funded reality. Our customers are breaking ground, expanding production, and creating more demand for our services.
Where also addressing the potential of the further for further processing of our redefining byproducts. As we believe there's value to be harvested their
With 700 million in cash, low, leverage a strong free cash flow and free cash flow expected in the second half of 2025. We're in an in an ideal position to accelerate our growth and scale through both organic Investments and strategic m&a.
The pipeline is strong and we fully expect to deploy significant capital in the quarters ahead. In ways that enhance growth and long-term markets
As we're entering the back, half of 2025, with strong momentum, and high level of confidence in our ability to deliver outstanding results.
By by promising economic Outlook.
Reassuring is no longer a headline, it is becoming a funded reality.
Mike Battles: Although near-term trade headwinds persist, we expect that the tangible benefits of the recent tax bill and incentive to invest in America manufacturing will drive greater customer activity. We see no indications that a healthy customer demand for our services will slow down anytime soon. We have multiple customers with plans to move ahead with remediation projects in the coming quarters, all of which would further support our recycling disposal assets, including Kimball. In SKSS, we remain focused on driving increased returns throughout its value chain through disciplined collection pricing, optimized re-refining operations, and the expansion of programs like our direct blended direct sales and Castrol more circular partnership. Our favorable outlook is underpinned by a powerful combination of macro and company-specific catalysts. We remain focused on executing our pricing strategies, cost mitigation efforts, and operational efficiencies to drive further margin improvement.
Our customers are breaking ground expanding production and creating more demand for our services.
Although near-term trade wind trade trade, headwinds persist.
We expect that the tangible benefits of the recent tax, bill and incentives to invest in America, manufacturing will drive greater customer activity.
We see no indication that that a healthy customer demands for our serviceable slowdown anytime soon.
We have multiple customers with plans to move ahead with remediation projects in the coming quarters.
all of which would further support our recycling disposal assets, including Kimball
In skss, we remain focused on driving increased returns, throughout its value training.
Through disciplined collection pricing.
Optimized re-refining operations and the expansion of programs like our direct. I blended direct sales and Castro. More circular partnership.
Our favorable Outlook is under underpinned by a powerful combination of macro and Company specific catalysts.
Mike Battles: We anticipate leveraging the strength of both our operating segments to achieve record top line and bottom line results in 2025. With that, let me turn it over to our CFO, Eric Dugas.
We we remain focused and executing our pricing strategies cost mitigation efforts and operational efficiencies to drive further margin Improvement.
We anticipate leveraging the strengths of both our operating segments to achieve record Topline and bottom line results in 2025.
Eric Dugas: Thank you, Mike. Good morning, everyone. Turning to the income statement on slide eight, our Q2 results came in slightly ahead of the guidance we provided on our Q1 earnings call. Within Environmental Services, we grew revenue and expanded EBITDA margins in that segment despite a challenging comp with prior year, and SKSS performed better than we expected. Total company revenue was essentially flat with Q2 of 2024, as the growth in ES offset the decline in SKSS. Q2 adjusted EBITDA of $336 million was driven by higher earnings in our ES segment and improvement in corporate costs versus prior year, which more than offset the lower SKSS EBITDA contribution. As Eric mentioned, one of the areas we are especially proud of is our margin performance. Our Q2 adjusted EBITDA margin of 21.7% was up an impressive 60 basis points from a year ago.
With that, let me turn it over to our CFO, Eric Dugas.
Thank you, Mike. Good morning, everyone.
Turning to the income statement on slide 8.
Our Q2 results came in slightly ahead of the guidance. We provided on our q1 earnings call.
Within Environmental Services, we grew revenue and expanded ibid out margins in that segment.
despite a challenge in comp with prior year,
And fkss performed better than we expected.
Total company Revenue was essentially flat with Q2 of 2024 as the growth in es offset the decline in skss.
Q2 adjusted evida of 336 million.
Was driven by higher earnings in our ES segment and improvement in corporate costs versus the prior year.
Which more than offset, the lower skss Eva doc contribution.
As Eric mentioned, 1 of the areas we are especially proud of is our margin performance.
Eric Dugas: The team delivered a better-than-expected margin in Q2 through pricing, greater overall volumes within our disposal and recycling assets, strong labor management, and disciplined SG&A cost reductions. SG&A expense, as a percentage of revenue, decreased 70 basis points from a year ago to 12%. For full year 2025, we anticipate SG&A expense, as a percentage of revenue, will be in the low to mid-12% range. Depreciation and amortization in Q2 came in as expected at $116 million, up primarily due to Kimball and increased landfill amortization due to higher landfill volumes. For 2025, we continue to expect depreciation and amortization in the range of $440 million to $450 million. Income from operations in Q2 was $210.3 million, down slightly from the same period last year, primarily due to higher depreciation and amortization that I just mentioned.
Our Q2 adjusted ibida margin of 21.7% was up and impressive 60 basis points from a year ago.
The team delivered, a better than expected margin in Q2 through pricing.
Greater overall volumes when our disposal and recycling assets.
Strong Labor Management and disciplined sgna cost. Reductions.
Sgna expense as a percentage of Revenue, decreased 70 basis points from a year ago to 12%.
For full year 2025.
We anticipate sgna expense as a percentage of Revenue will be in the low to mid 12% range.
Depreciation and amortization in Q2 came in as expected at 116 million.
Up primarily due to Kimball.
And increased landfill amortization due to higher landfill volumes.
For 2025, we continue to expect depreciation and amortization in the range of 440 to 450 million.
Income from operations in Q2 was 210.3 Million.
Down slightly from the same period last year.
Eric Dugas: As expected, Q2 net income also declined modestly year over year, with earnings per share $2.36. Turning to the balance sheet and slide nine, cash and short-term marketable securities at quarter end was nearly $700 million. A strong balance sheet remains a competitive advantage for us and gives us the flexibility to execute the capital allocation strategy that Mike covered. Our net debt to EBITDA ratio at quarter end was down to approximately two times, with no material debt amounts due until 2027. Overall interest rate at quarter end remained at 5.3%. As I highlighted on our Q1 call, following a Moody's upgrade earlier this year, our overall debt rating is just one notch below investment grade, and our secured debt is at an investment grade rating. Turning to cash flows on slide 10, net cash from operating activities in Q2 was $208 million.
Primarily due to higher depreciation and amortization that I just mentioned.
As expected Q2, net income, also declined modestly year-over-year.
With earnings per share of $2.36.
According to the balance sheet and Slide 9.
Cash and short-term marketable Securities at quarter end was nearly 700 million.
A strong balance sheet remains a competitive Advantage for us and gives us the flexibility to execute the capital allocation strategy that might covered.
Our net debt to ibida ratio at quarter end was down to approximately 2 times.
With no material debt amounts due until 2027.
Overall, interest rate at quarter end remained at 5.3%.
As I highlighted on our q1 call.
Following a Moody's upgrade earlier this year, our overall debt rating is just 1 Notch, below investment grade, and our secured debt is at an investment grade rate.
Turning to cash flows on slide 10.
Eric Dugas: Adjusted free cash flow was a Q2 record of $133 million, up nearly $50 million, which is approximately 60% greater than the prior year. CapEx net of disposals was $87 million, down substantially from the prior year when our Kimball construction was still in full swing. In Q2 of this year, we purchased the Phoenix property and spent the bulk of the $15 million that we allocated for that project this year. We will be renovating and building out this location to create our next strategic hub facility. For 2025, we continue to expect our net CapEx, excluding the Phoenix growth project, to be in the range of $345 million to $375 million. During Q2, we bought back approximately 62,000 shares of stock for a total spend of $12 million. We currently have $430 million remaining under our share repurchase program authorization.
208 million.
Adjusted free cash flow with a Q2 record of 133, million.
Up nearly 50 million.
Which is approximately 60% greater than the prior year.
CapEx, net of disposals, was $87 million.
Down substantially from the prior year when our Kimball construction was still in full swing.
In Q2 of this year.
We purchased the Phoenix property and spent the bulk of the $15 million that we allocated for that project this year.
We will be renting in building out this location to create our next strategic Hub, facility.
For 2025, we continue to expect our net capex. Excluding the Phoenix growth project to be in the range of 345 to 375 million.
During Q2, we brought back approximately 62,000 shares of stock for a total spend of $122 million.
We currently have 430 million remaining under our share repurchase program authorization.
Eric Dugas: Turning to our guidance on slide 11, based on our year-to-date results, along with current market conditions for both of our operating segments, we are reiterating the midpoint of our 2025 adjusted EBITDA guidance of $1.18 billion, based on a range of $1.16 billion to $1.2 billion. That midpoint represents year-over-year growth of 6% in adjusted EBITDA. Looking at our annual guidance from a quarterly perspective, we currently expect adjusted EBITDA for Q3 to grow 9% to 12% compared with the prior year and by a 10% to 14% growth in the ES segment. For full year 2025, adjusted EBITDA guidance will translate to our reporting segment as follows. In Environmental Services, we expect adjusted EBITDA in 2025 at the midpoint of our guidance to increase 6% to 8% for 2024. As highlighted earlier, overall project pipeline is encouraging and should feed good volumes into our facilities network.
Turning to our guidance on slide 11.
Based on our year-to-date results along with current market conditions for both of our operating segments. We are reiterating the midpoint of our 2025 adjusted Eva dog guidance.
1.18 billion.
Based on a range of 1.16 billion to 1.2 billion.
That midpoint represents year-over-year growth of 6% in adjusted Ava.
Looking at our annual guidance from a quarterly perspective.
We currently expect adjusted EVA for Q3 to grow 9% to 12% compared with the prior year.
And Pi a 10 to 14% growth in the es segment.
For full year 2025.
Adjusted Eva dot guidance will translate to our reporting statements as follows.
An environmental services.
We expect adjusted evida in 2025.
At the midpoint of our guidance to increase 6 to 8% for 2024.
Highlighted earlier.
Eric Dugas: PFAS remediation and reshoring continue to represent good upside potential for us in the back half of the year and certainly over the longer term. For SKSS, we continue to expect full year 2025 adjusted EBITDA at the midpoint of our guidance to be $140 million. We exceeded our expectations in each of the first two quarters due to the terrific work by the SKSS team in improving our collection rates while controlling costs. We anticipate growth and profitability in this segment in both the third and fourth quarters. Within corporate, at the midpoint of our guide, we expect negative adjusted EBITDA to now be up 5% to 7% compared to 2024. The year-over-year increase relates to the company's expected growth, higher wages and benefits, technology investments, and rising insurance costs, partly offset by our many cost-savings initiatives.
Overall project pipeline is encouraging and should be good volumes into our facilities. Networks
Pfas and restoring container represent. Good upside potential for us in the back half of the year and certainly over the longer term.
For skss, we continue to expect full year 2025 adjusted, evida at the midpoint of our guidance to be 140 million.
We exceeded our expectations. In each of the first 2 quarters, due to the terrific work by the skss team, in improving our collection rates while controlling costs,
We anticipate growth and profitability in this segment in both the third and fourth quarters.
Within corporate.
At the midpoint of our guidance, we expect negative adjusted EVA to now be up 5% to 7% compared to 2024.
The year-over-year increase relates to the company's expected, growth, higher wages and benefits, technology, Investments, and Rising Insurance costs.
Eric Dugas: For adjusted free cash flow, full-year guidance remains in the range of $430 million to $490 million, or a midpoint of $460 million, which represents nearly a 30% increase from 2024. In summary, the growth in Q2 was a continuation of the momentum we experienced in late Q1. The demand environment has held up well for us, even in the face of tariff uncertainty that has impacted some of our customers. I share the enthusiasm of our entire executive team about our growth prospects for the second half of 2025 and beyond. One of the hallmarks of Clean Harbors Inc. is our consistency and resiliency, as evidenced by our financial performance. We see no material changes in our markets today that would prevent us from continuing on our current path of profitable growth. We look forward to the remainder of this year as we execute against our longer-term goals.
Partly offset by our many cost savings initiatives.
Or adjusted free. Cash flow.
Full year guidance remains in the range of 430.
To 490 million or a midpoint of 460 million.
Which represents nearly a 30% increase from 2024?
In summary our growth in Q2 was a continuation of the momentum. We experienced in late, q1.
The demand environment has held up well for us.
Even in the face of Terror Fund certainty that has impacted some of our customers.
I share the enthusiasm of our entire executive team, but our growth prospects for the second half of 2025 and Beyond.
One of the Hallmarks of Clean Harbors is our consistency and resiliency. That's evidenced by our financial performance.
We see no material changes in our markets today that would prevent us from continuing on our current path of profitable growth.
Eric Dugas: With that, Christine, please open the call for questions.
We look forward to the remainder of this year as we execute against our longer-term goals.
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 one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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. Thank you. Our first question comes from a line of Tyler Brown with Raymond James. Please proceed with your question.
Thank you. We will now be conducting a question and answer session.
A confirmation tone will indicate your line is in the question queue.
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Tyler Brown: Hey, good morning, guys.
Thank you. Our first question comes from the line of Tyler Brown with Raymond James. Please proceed with your question.
Unknown: Hey, guys.
Hey, good morning, guys.
Eric Gerstenberg: Good morning, Tyler.
Tyler Brown: Hey, I just wanted to get your all's broad view on the macro. It sounded like yesterday a competitor was maybe a touch more downbeat on their call, but you guys seem pretty optimistic. I think you used the word enthusiasm. You noted healthy demand. You have a good pipeline, maybe some reshoring activity. Just any thoughts broadly? Do you feel like you are taking share? Or maybe you can help us just appreciate how your diverse portfolio really positions you to win despite what looks like a pretty slow industrial macro.
You got it morning, Tyler.
Hey, um, I just wanted to get your all kind of broad view on the macro. It, it sounded like yesterday. A competitor was maybe a touch more downbeat on their call, but you guys seem
Pretty optimistic, I think you use the word enthusiasm. Um, you noted healthy demand, you've got a good pipeline. Maybe some resharing activity but just any thoughts, broadly, do you feel like you're taking share or maybe you can help us just appreciate how your diverse portfolio really positions you to win? Despite what looks like a pretty slow industrial macro.
Eric Gerstenberg: Yeah, Tyler, this is Eric. I will begin, and I am sure these guys will add on. First of all, our volumes into our network continue to be at all-time high. Our drum receipts into our processing plants, our incinerators, our TSDFs, very, very strong. Our overall pipeline from our sales team in all regions is up year over year, so very strong. The verticals that we are servicing, very strong waste from our verticals, as well as our project demands. Our project pipeline that we are seeing going into Q3, as Eric mentioned in his script, very, very solid, driving volumes into our landfills, our incinerators, some into our wastewater treatment plants. So all of our indicators for disposal and recycling assets, as we have talked about, have been very good and continue. Whether or not we are taking share, we think so.
Yeah, Tyler. This is Eric. I'll begin. And I'm sure these guys will add on, um, first of all, our, uh, our volumes into our Network.
Continue to be at all-time high.
Our drum receipts into our processing. Plants our incinerators, our tsds.
Very, very strong.
Our overall pipeline from our sales team in all regions is up year-over-year, so very strong. The verticals that we're servicing are very strong, including waste from our verticals, as well as our project demands. Our project pipeline that we're seeing going into Q3, as Eric mentioned in his script, is very solid, driving volumes into our landfills, our incinerators, and some into our wastewater treatment plants.
Eric Gerstenberg: We absolutely do think that our footprint enables us to leverage better relationships with our customers servicing their national footprints, and that is where we have really seen some strong growth. We also have done a great job of growing with new customers and have had a number of different plans in place with a variety of different types of sales roles, hunters to go get new business to drive into our networks. On the service side of our businesses, our branch offerings, field services, mentioning that, year to date, we have opened 13 more field service branches, and what that allows us to do is service more emergency response events. Our goal is to make sure that we are the first call on all of our emergency response events.
So, all of our indicators for disposal and recycling assets, as we've talked about, have been uh, very good and continue whether or not we're uh, taking share, we think so. We absolutely do think that uh our footprint, enables us to leverage better relationships with our customers servicing, their National Footprints. And that's where we've really seen some strong growth. We also have done a great job of uh growing with new customers and um have had a number of different plans in place with a variety of different types of sales roles Hunters to go get new business to drive into our Networks.
Eric Gerstenberg: So field service team, industrial service team, even with, as mentioned in our script, we talked about that and how the refinery business seems to be stabilizing a little bit. Our count of turnarounds is in excess of 15% more than last year, although the revenue is a little bit hampered because they are controlling our costs. But our industrial team has been doing a good job trying to expand our base of facilities we service with our top-tier accounts. So very strong in a number of different areas as we enter into Q3. No signs of letting up.
Mike Battles: The only thing I would add to that, Tyler, Eric said it well, is around the pipeline. The sales pipeline that we see is very robust across all different regions and across many verticals. One of the things that may differentiate us is we are not tied to any one end market. Our verticals are very broad, as you know, Tyler. If there have been slowdowns in certain parts of our business, we have been making it up in other parts of our business because of our very diverse end market approach. That has been a competitive advantage for us.
On the service side of our businesses, our Branch offerings Field Services um mentioning that we um year to date, we have uh opened 13 more field service branches and what that allows us to do is service more emergency response events. Our goal is to make sure that we are the the first call on all of our emergency response events. So um field service Team Industrial Service team. Even with uh, as mentioned in our script, we talk about that and how the refinery business seems to be stabilizing a little bit. Our count of, uh, turnarounds is um, is in excess of 15% more than last year. Although the revenue was a little bit tampered because they're controlling our costs. But our industrial team has been doing a good job trying to expand our base of facilities. We service with our top tier accounts. So very strong and uh, a number of different areas as we enter into Q3 no signs of life.
Setting up.
The only thing I would add to that time. Eric said, well, is is uh, is around the pipeline, you know, the the sales pipeline that that we see uh, is very robust across all different regions and across many verticals, you know, 1 of the things that may differentiate us is we are not tied to any 1 1 End Market. Our vertical is a very broad as as you know, Tyler and so you know, if there's been slowdowns in certain parts of our business, we've been making it up in other parts of our business because because of our very diverse
Tyler Brown: Yeah, excellent. That is excellent, Tyler. I do want to come back, though, because I get this question a lot from investors around the refinery turnarounds. It sounds like that's maybe showing some signs of life, but how much of the back half ES guidance is really predicated on a ramp in those refinery turnarounds, and how much of a risk is that if it doesn't materialize?
Hi group number and market approach. So I think that's been a competitive advantage for us.
Yeah, excellent. Oh, that is excellent color. So I want, I do want to come back though because I get this question a lot from investors around the refinery turnarounds.
Eric Gerstenberg: Yeah, Tyler, just to begin, the back half doesn't have a significant ramp at all. It isn't dependent on IS turnarounds. Overall, for the year, I continue to say that the count turnarounds we're servicing is up 15% year over year. But our back end guidance really is not dependent on a significant ramp of IS turnarounds. What we're really focusing on IS is making sure we're servicing the best customers with the best margins and efficiently managing our labor and how we service those turnarounds in just the base industrial holistically. We've been making sure that we implement a new service platform for that, which really enhances our margin improvement. But just to come back around to your full question, we don't anticipate a major ramp-up. Our back half guidance is not dependent on a significant IS ramp-up.
so it it sounds like that's maybe showing some signs of life, but how, how much of the back half es guidance is really predicated on a ramp in those refiner turnarounds and how much of a risk is that if it doesn't materialize
Yeah, Tyler, just to begin the back half, it doesn't have a significant ramp at all and isn't dependent on its turnaround. So, overall, for the year,
Tyler Brown: Okay. That's extremely helpful. My last one, Eric Dugas, can you shape the benefit from bonus depreciation here in 2025? Do those changes possibly make some other, let's say, larger investments organically more attractive in the coming years?
Yes uh turnaround. So what we're really focusing on is is making sure with service in the best customers with the best, margins and efficiently, managing our labor, and how we service those turnarounds in just the base industrial holistically. Now, we've been, um, making sure that we Implement a new service platform for that which uh, really, uh, enhances our margin Improvement. But um, just to come back around to your full question. We, um, we don't anticipate a major ramp up our back cap. Guidance is not dependent on a significant is ramped up.
Okay, that's extremely helpful. My last 1.
Eric Dugas, Can you shape the benefit from Bonus depreciation here in 25 and this is maybe just big picture but do those changes possibly make some other? Let's say, larger Investments, organically more attractive in the in the coming years.
Eric Dugas: Yeah, Tyler, great question. When you look at the announcement of the most recent half there, we do believe that here in 2025, we will see some incremental cash tax savings from that. We have estimated that at somewhere between $10 million and $15 million of incremental cash this year, and some more in 2026. Still refining those estimates, but that is what we are looking at. I think you touched on something that is probably even more important and we are more excited about as it relates to the act. I think it is just another step to drive companies and further investment in the U.S., which is certainly a good thing for Clean Harbors Inc. on balance.
Yeah, Tyler
The enactment of the most recent plan there. We do believe that, uh, here in 2025, we'll see some incremental, uh, cash tax savings from that.
Eric Dugas: I think we are even starting to see with some of the discussion we are seeing with customers today around some movement and some activity and incremental investment and build-out, which comes from a lot of different factors, but I think the recent tax law changes are driving that as well. We are really excited about manufacturing in the U.S., and we think it is a continued tailwind for us.
Uh, We've estimated that at at somewhere between 10 and 15 million dollars of incremental cash this year, uh, and, and some more in 2026 still refining those estimates. But that's what we're looking at it. But I think you, you touched on, you know, something that's probably even more important and we're more excited about, as it relates to the ACT is, you know, I think it's just another step to drive companies and further investment in the US, uh, which is certainly a good thing for a clean harbors on balance. So, you know, I think we're even starting to see with some of the discussion we're seeing with customers today around some, some movement, and some activity and and incremental investment and buildout.
which, which is coming from a lot of different factors, but I think the recent tax law changes,
When you're driving that as well.
Mike Battles: Tyler, to your point, though, I do not think that changes our view on capital deployment. We have been very aggressive in capital deployment for CapEx, and we will continue to do that. We do it based on return on invested capital, and the cash flow from that change does not really impact that as much.
We're really excited about manufacturing in the U.S., and we think it's a continued tailwind for us.
Tyler Brown: Okay. Yep. No, that's very helpful. Thanks, guys.
What kind of to your point, though? I I, I don't think that that changes our view on on Capital deployment. We have been very aggressive in capital deployment uh for capex and we will continue to do that. You know, we do it, we do it based on return on invested capital and and the the cash flows on that change doesn't really impact that as much.
Mike Battles: Good guy.
Okay, yep. No, that's very helpful. Thanks, guys.
Good job. Thanks Phil.
Christine: Our next question comes from a line of David Manthey with Baird. Please proceed with your question.
Our next question comes from the line of David manthy with beard. Please receive with your question.
David Manthey: Hi guys, good morning. First off, you reported just under half of your full-year guidance in SKSS through the first half of the year. Given that the fourth quarter sometimes has negative seasonality, what gives you confidence in seeing an uptick in the third quarter from the second quarter in SKSS EBITDA? Related, you made a comment about improvement in the third and fourth quarter. Could you clarify and say, did you mean that EBITDA margin or EBITDA dollars would be better in 3Q and 4Q in SKSS?
Um,
first off you,
You've reported just under half of your full year guidance, um, in skss through, uh, the first half of the year and given that the fourth quarter sometimes has negative seasonality, what gives you confidence and seeing an uptick in the third quarter from the second quarter in skss ebit. And then related, uh, you made a comment about uh, Improvement in the third and fourth quarter could could you clarify and say, did you mean that ebit? Uh ebita margin or ebit dollars would be better in uh 3 q and 4 q in skss.
Mike Battles: Dave, this is Mike. I will take it. When you think about SKSS, we are seeing, if you remember, last year was a kind of tough comp for SKSS. They had a pretty bad Q3, if you recall. So the comps on that get a lot better here in Q3 of 2025. We are seeing kind of positive, we are forecasting positive EBITDA growth kind of year on year in Q3 versus Q3 last year. The two busiest quarters are Q2 and Q3 for the oil business. We see good kind of positive momentum in that business. Really, Dave, it comes down to the shift we made in Q3 last year in early Q4, where we moved away from our paid-for oil to a charge-for oil and focused on the pricing we are charging to pick up the oil versus feeding our plant.
I'll take it the uh when you think about skss we are seeing, you know, if you remember last year was a tough kind of tough comp for SKS as it had a pretty bad, pretty bad. Q3 if you recall. So the cons on that, get a lot better here in Q3 or 20205. And so we are seeing kind of positive. We are forecasting positive, given a growth, kind of year on year, in Q3 versus Q3 versus Q3 last year. And and, you know, the 2 bus quarters aren't Q2 and Q3 for that, for the oil business. So, we, we see a good kind of positive momentum in that business. Really, Dave, it comes down to the the, the shift
Mike Battles: As you know, we closed the plant in Q3 and Q4 last year. Those costs are there, so it should help from a profitability standpoint year on year. Really, that is what is driving how we get to the 140 through the first half of the year. We feel very confident, and as we see here today, better than ever from a reset perspective as far as how we feel about our ability to charge for used motor oil and our ability to leverage that in the marketplace. Let that be the driver of profitability versus feeding our plants.
We made really in Q3 last year, uh, in early Q4, where we where we moved away from, you know, uh, our pay for oil to a charge for oil and focused on the pricing. We are charging to pick up the oil versus feeding our plants. And as you know, we closed the plant in Q in Q in Q3 and Q4 last year and so those costs are there. So it shouldn't help from a from a profitability standpoint, you're on year. And so, really, that's, that's what's driving, the we're going to how we get to the 140, through the first half of the year. And so I really I we feel very confident and as we see here today better than ever from a, from a reset perspective, as far as how we feel about our ability to, to charge for, for use motor oil, and our ability to to to uh deliver that in the marketplace, and let that be the driver of profitability versus feeding our plants.
David Manthey: Okay, thank you. I am also interested in your outlook for turnaround activity and major projects in the back half. You said that turnarounds are up 15% in the second quarter, and you also said that you have confidence that the maintenance deferrals are behind us. If I put those two together, even though that is not in your guidance, if that level of activity continued, would it represent an acceleration in the back half of the year? Is that potential upside? I am not trying to bake it in, but it sounds like if I put those two things together, the outlook is pretty good, and you are saying it is not in your current outlook.
Okay, thank you. And I'm also interested in your, your outlook for, uh, turnaround activity and major projects in the back half.
15% in the second quarter and you also said that you have confidence that the maintenance deferrals are behind us. If I put those 2 together, even though, um, that's not in your guidance. If that level of activity continued, would it represent an acceleration in the back half of the year? Is that potential upside? I'm not trying to bake it in, but it, it sounds like, if I put those 2 things together, the Outlook is pretty good and you're saying it's not in your current Outlook.
Mike Battles: Hey, Dave, Eric Dugas here. I think you got it right. As Eric said, when you look at the back half for industrial services, our guidance does not necessarily depend upon a great comeback there. We are cautiously optimistic that we will see a better back half with the turnaround schedule we have here. We do feel like we are starting to come out of the maintenance deferrals. I think any kind of significant upside in the back half would be upside of the guidance as well.
Hey Dave, uh, Eric Dugas here? I think you got it, right? Uh, as Eric said, you know, when we look at the back half for Industrial Services, our guidance does not necessarily depend upon a great comeback there. We are cautiously optimistic that we'll see a better back half with the turnaround schedule we have here, and we do feel like we're starting to come out of the maintenance deferral. So, I think any kind of significant upside in the back half would be, you know, upside down in guidance as well.
David Manthey: Got it. Thanks so much, Ted.
Eric Gerstenberg: Dave, just to clarify one key point, the overall turnaround count that we're servicing in 2025, that's up about 15% compared to 2024. The average spend, the average revenue that we're invoicing on the turnaround is down roughly about 10%, 15%. So the turnarounds have obviously been compacted a little. They're not doing as much specialty services. However, we really see that we are turning the corner, as mentioned here. There's not a lot in our guidance around it, but the team's doing a great job.
Got it. Thank you so much. Yeah, just to clear.
Dave, just to clarify one key point: the overall turnaround count that we're servicing in 2025 is up about 15% compared to 2024. However, the average spend—the average revenue that we're invoicing on the turnaround—is down roughly about 10 to 15%. So, the turnarounds have obviously been compacted a little; they're not, uh, they're not doing as much Specialty Services.
However, we really see that we are turning the corner as mentioned here. There's not a lot in our guidance around
But the team's doing a a great job servicing the turnarounds ahead of us.
David Manthey: Okay. Thanks for that clarification, Eric.
Okay, thanks for that clarification, Eric.
Christine: Our next question comes from a line of Larry Solow with CJS Securities. Please proceed with your question.
Our next question comes from line of Larry solo with CJs Securities. Please receive with your question.
Tyler Brown: Good morning, guys. I guess just in that same vein, you talked about the tariff uncertainty starting probably in April. Has that, you know, persisted? Has that changed at all? Is that kind of tied into some of these delays on the remediation projects you spoke about? I guess that's a separate, you know, kind of subject from the industrial turnarounds, right?
Good morning, guys. Um, I guess just in that same vein. Um, you talked about the, the Tariff uncertainty. Um, sorry, starting probably in April, has that, you know, persisted is that changed at all and, and is that kind of tied into some of these delays on the, on the remediation projects, you spoke about
I guess that's a separate, you know, kind of subject from the industrial turnarounds, right?
Eric Gerstenberg: Larry, I wouldn't correlate our growth in projects and remediation and stuff to anything going on with tariffs. I think that we've just been doing a solid job of looking out and servicing our customers and making sure that we're ahead of any of their remedial projects. The spending is clear. The pipeline is up. We have some that have already begun into Q3. There's a lot of activity across the board. But we've also been doing a good job at getting ahead of those projects and those events. Now we see them starting to take hold and have a real, real solid project pipeline here.
Yeah, Larry, I I wouldn't uh, correlate, um, our growth in uh, projects and Remediation, and stuff to um, to anything going on with tariffs. I think that we've just been, uh, we want a solid job of, uh, looking out and servicing our customers and making sure that we're ahead of any of their remedial projects. They, um, the spending is clear, the pipeline is up, we, uh, we have some that have already begun into the Q3. So we, uh, there's a lot of activity across the board, but we've also been going doing a good job of getting ahead of those projects and those events. And and uh,
Mike Battles: When you look at the project work that is feeding our landfill, Larry Solow, this is work that is starting. It is there. It is not.
But now we see them starting to take hold and have a real solid project pipeline here.
Eric Gerstenberg: Some of it is, as Eric said, the pipeline is very strong. We feel good about the back half of the years, our sales, but that is work that has not been executed yet. This work is either signed, sealed, delivered, or started already.
Yeah, when you look at the project work, that's feeding our landfills Larry. If this is work, that started it, sticks there. So it's, it's not some of it is there. It said the pipeline's very strong, we feel good about the back half of the years our sales. But that's that's work. That hasn't been executed yet this work is is either assigned Sealed Delivered or started already.
Tyler Brown: Gotcha. Okay. Just switching gears onto PFAS, I appreciate some of the update and looks like getting a little more push from the state side. Any update? I know you guys were, I think, presenting or had this incineration study, DOD and EPA, I think, were that was going to be presented soon. Any update there and just thoughts on when we might get, you know, some guidelines from the EPA or more guidelines? Maybe I know that's important, but I guess maybe with the state pushing harder, maybe you have all to, you know, other paths to get customers to drive, you know, not just orders, but revenue.
Gotcha. Okay. And then just Switching gears on on the Pas. Appreciate some of the updated. And uh, looks like, you know, getting a little more push from the state side just any update. You know I know you guys were I think presenting or had this incineration study um DOD and Epi I think we're we're we're we're we're we're um,
Eric Gerstenberg: Larry, sure. As mentioned earlier, we completed our PFAS study at our incinerator in Utah, and the results of that study were excellent. Just a real strong performance across the board, proving that high-temperature thermal incineration is the preferred method for destruction of PFAS compounds. That being said, the EPA participated actively with us. We have been working with them on obviously pushing to get their announcement out and backing that. With what has been going on with the EPA, it has been a little bit delayed. We expect that and anticipate that hopefully here in the third quarter. The evidence is clear. That being said, also, the market is acting as if regulations are in place. That is evidence of how our pipeline is growing and some of the projects that we are doing.
That was going to be presented soon, any update there and just thoughts on when we might get, you know, some guidelines from the EPA or more guidelines. And maybe I know that's important. But I guess maybe with the states pushing harder, maybe of all to, you know, other paths to get, uh, customers to drive, you know, not just orders but Revenue
Larry sure.
Incinerator in Utah and the results of those that study was excellent. Um, just a real strong performance across the board proving that high temperature, reprah thermal incineration is the preferred method for Destruction.
Eric Gerstenberg: The amount of business that we are servicing on the PFAS side into our network has been growing. There are indications. We all know it is a bad material, and it affects human health and the environment. Even without those changes, the administration is clear, and they have said that they continue to want to act on it. We are seeing that discipline from our customers.
So the market is acting as if regulations are in place, and that's evidence of how our pipeline is growing and some of the projects that we're doing. The amount of business that we're servicing on the POS side, into our network, has been growing. So there are indications; I mean, we all know it's a bad material, and it affects human health and the environment. Even without those changes, the administration is clear and they said that they continue to act on it. And we are seeing that discipline from our customers.
Tyler Brown: Got it. Thanks, Eric.
Got it. Thank thanks, Eric.
Sure.
Thanks Larry.
Christine: Our next question comes from a line of James Buckley with Needham & Company. Please proceed with your question.
Our next question comes from the line of James Rudy with namin company. Please receive with your question.
David Manthey: Thanks. Good morning. Just a couple of questions. I think in the you had talked about your expectations for Kimball, I think, in previous quarters. I do not know. You may have given some broad guidance on it in the call this morning, and I may have missed it. But I am just wondering how we should think about the scale-up in the back half and then looking out to next year in terms of, you know, how we might think about the EBITDA contribution.
Thanks, uh, good morning. Just a couple of questions. I, I think in the, uh, you had talked about your expectations for Kimble. I think in in previous quarters that I don't know, you may have given some, uh, some broad guidance on it, uh, in the call this morning and I may have missed it, but I'm just wondering how we should think about the scale up in the back half, and then looking out to, uh, to next year, in terms of, you know, how we might think about the IBA contribution.
Eric Gerstenberg: Yeah, James, I will begin, and then Eric will add on. The scale-up from a tonnage standpoint, we are ahead of track. We had talked about pushing 28,000 tons through that unit through 2025, and we are meeting that objective. Also, the benefit that we looked at from an EBITDA perspective to our network overall, I have talked about the $10 million number in the past. We continue to ramp up. We see strong volumes into and through the next three to four years, ramping up to more full-scale production.
Yeah, James. Uh, I'll begin and then Eric will add on the, um, the scale up from a tonnage standpoint. We're ahead of track. We had, uh, talked about, um, pushing 28,000 tons through that unit.
Eric Dugas: Yeah. I think I would add to that, Jim, as well as Eric said, still confident around the incremental EBITDA for bringing this unit online across the network. Also point in mind, as we move throughout the year, with more production and more EBITDA coming through that unit. Right now, it is a little bit of a drag to our margins. The incremental margin that we produced in the ES this quarter, there was a little drag from the startup. You have a full allocation of costs, but not a plant running at its full capacity yet. That is kind of some upside that we will continue to see, as Eric mentioned, going forward over the coming quarters and years as the plant rolls up. I think to reiterate Eric's point, really happy with production so far and the volumes that we are getting through there.
Through 2025 and, uh, we're meeting that objective. Also, the the benefit that we looked at, from an Evita perspective to our Network overall. Uh, talked about the 10 million number in the past. We continue to ramp up, uh, we, we see strong volumes and into and through the next 3, to 4 years ramping up to more full-scale production. Yeah.
Mike Battles: Yeah, nothing has changed, Tim, in our view of the long-term view of Clean Harbors Inc.
Thing I would add add to that. Jim, as well as Eric said, still confident around the, uh, the incremental. He butt out from bringing this unit out online across the network. Um, you know, but also point of mind kind of, as we move throughout the year, um, you know, with more production and more Eva out coming through that unit, uh right now it is a little bit of a drag to our margins. Uh so the incremental margin that we produce in es this quarter. Uh there was a little drag from the startup, you have a full allocation of costs but not a plant running at its full capacity yet. So uh that is kind of some upside that will continue to see you. As Eric mentioned, going forward, over the coming quarters and years. It's it's the plant rolls up but um I think to reiterate Eric's Point, really happy with production so far and the volumes that we're getting through there.
David Manthey: Good. Thanks. The follow-up question I have is a little bit more longer term. I am just going back to the analyst event that you guys held back in March 2023. Obviously, there have been a lot of changes, certainly in the political environment. I am wondering if your view of the M&A opportunities out there has changed. I almost get the sense that you are looking at more organic investment opportunities. Maybe you could talk a little bit about the way you are thinking about the business longer term.
yeah, nothing has changed Jim in our, in our view of the long-term view of people
Good, thanks. Um, the follow-up question I have is, is a little bit more longer term and I'm just going back to, uh, you know, the analysts, uh, event that you guys held back in, in March, I, I guess, 2023. And obviously there's been a lot of been. A lot of changes certainly in the political environment, but I'm wondering if, if your view of the
Mike Battles: Hey, Jim, this is Mike. I appreciate the question. When we think about M&A, the pipeline is very full of opportunities, some small, some medium. We are focused on making sure we get a good return for our shareholders, and we are very disciplined around that. It has got to make kind of cultural fit, financial sense. We have got to see a path to synergy and a path to value. We are trying to improve our, get our ROIC up and get that business kind of contributing at the rates that we think is important to us. At the same time, to your point, there are a lot of internal investments that are out there, whether they be the Phoenix hub we talked about, the Baltimore hub, the investment in Kimball. There is more out there, and those are terrific investments as well.
M&a opportunities out, there has changed. I almost get the sense that you're looking at more organic investment opportunities. So maybe you could talk a little bit about the way you're you're thinking about the business longer term.
Mike Battles: They take longer to execute on, but frankly, they do not come with a lot of goodwill, if you will. I think that is really, I think we are measuring all those things. We think that those are all great uses of our capital. We look at, we share that, but it is all based on returns. Whether that is M&A that is in our swim lane or capital projects that drive long-term value, there is, I think there is, as you can see from the balance sheet and the cash flow generation, there is going to be plenty of opportunity to do all of that going forward.
Full of opportunities. Some some small, some medium. Uh, if but we are focused, uh, on on making sure we get a good return for our shareholders and we we are very disciplined around that. It's got to make kind of cultural fit Financial sense. We got to see a path to Synergy the path to Value. We're trying to trying to improve our, you know, get our get our roic up and and get that business kind of contributing at the rate that we think is important to us. At the same time to your point. There are a lot of internal Investments that are out there, whether they be, you know, that the Phoenix Hub, we talked about the, the Baltimore Hub, the investment in Kimball there, there's more out there and we and and those are those are terrific Investments as well, you know.
To take longer to execute on. But frankly, you know, they don't they don't come with a lot of, a lot of a lot of uh Goodwill if you will. So I think that's really uh I think, I think we are measuring all those things. We think that those are all great uses of our Capital. We look at we share that, it's all based on returns and so whether that's whether that's, you know, m&a that's in our swim lane or or capital projects, that drive long-term value. There's I think there's as, as you can see from the balance sheet and the cash flow generation. There's going to be plenty of opportunity to do all of that going forward.
David Manthey: Got it. Thank you.
Got it. Thank you.
Christine: Our next question comes from a line of Noah Kaye with Oppenheimer. Please proceed with your question.
David Manthey: Hey, guys. Thanks for taking the questions. Can we talk about Environmental Services margins? You entered the quarter with a very tough comp from last year. You didn't have as much revenue. You had the drive from Kimball, and you still expanded 30 bps year over year. Can we first unpack the puts and takes of getting that expansion? Then can you share with us, quantitatively if possible, how we should think about margin trends in ES for the balance of the year?
Our next question comes from the line of Noah K with Oppenheimer, please receive with your question.
Talk about environmental services margins because you entered the quarter with a very tough comp from last year. You didn't have as much ER revenue.
you had the drive from Kimball
And you still expanded 30 Pips year over year. So can we can we first unpack the puts and takes of getting that expansion and then can you share with us quantitatively possible how we should think about margin Trends Ines for the balance of the year?
Eric Gerstenberg: Noah, just to begin, as we have talked about before, our goal is to get the overall Environmental Services business to close to those 30% EBITDA margins. As you know, over the past few years, we have really been executing on that plan. In the second quarter, we saw a strong margin improvement from all the service businesses. Our Safety-Kleen Environmental branch business, very strong margin improvement on the lines of business that drive waste into our plants, but also parts washer, vacs, material as well, driving that into our facilities. We saw margin expansion. On the field services side, as pointed out, we were down on large emergency response events. Last year, we did about $24 million, this year, about $10 million.
For our goal is to get uh the overall Environmental Services business to close to those 30% deep it up of margins and as you know over the past few years we've really been executing on that plan.
in the second quarter, we saw strong margin improvement from all the service businesses, our safety claim environmental Branch business, very strong,
Uh, March and improvement on the lines of business that, uh, drive waste into our plants, but also parts washers backs.
Eric Gerstenberg: Our base business and how we have driven efficiencies in the business, the number of overall ERs, we have had a lot of base business ERs and base business from our customers, and our team has done a great job managing labor and efficiencies and how we dispatch our crews. There was margin improvement in field services, which is great to see. Industrial services as well. We talked about that, our industrial services margins. We saw an improvement, even with the flat line that we have seen in overall revenue, we are just slightly ahead of last year. We have driven margin improvement through managing labor tightly of our crews and how we respond to base business customers. Then, of course, our technical services, price growth, volume growth, driving that material, more volume of waste into our facilities.
Material as well. Driving that into our facilities, we saw margin expansion on the field services side as pointed out. Uh yeah, we were down on large, emergency response been events. Last year, we did about 24 million this year of 10 million but our base business and how we've tried to driven efficiencies in the business. The number of
Overall.
Eric Gerstenberg: We saw a margin growth. We are really pleased overall with how each of the different business units have driven cost efficiencies in our business, how we have been driving price, how we have been driving volume, managing our labor properly. All those things really came to fruition here in the second quarter as we continued down that path of driving towards that 30%.
PRS. We've had a lot of basic business ERS and based business from our customers and our team has done a great job managing labor and efficiencies on how we dispatch our crews. So there was margin Improvement Field Services which is great to see Industrial Services as well. We talked about that our Industrial Services margins. Uh we saw Improvement even even with the the flat line we've seen in overall revenue or just slightly ahead of last year. We've driven margin improvements through managing labor, tightly, uh, of our crews on how we respond to base business customers and then, uh, and of course, our Technical Services price growth volume growth growth driving at uh, material more volume of waste into our facilities. We saw margin groups so really pleased overall with how each of the different business units. Have, uh, driven cost efficiencies in our business. Uh, we've been driving the price how we've been driving volume, managing our labor
properly. All those things really uh uh came to fruition here in the second quarter as we continue down that path of driving towards that 30%. So good stuff.
David Manthey: Appreciate it. The second part of the question is around how to think about margins for the second half of the year in Environmental Services?
Appreciate it. And and the second part of the question around how to think about margins for the second half of the year.
NES.
Mike Battles: Yeah, I think all the progress that Eric just articulated around pricing, labor management, cost efficiencies, transportation, those continue. As you know, the comp in Q3 gets a lot easier because there is not that large event work that Eric mentioned earlier. So I think that the margin progression that we are going to see for Q3 and Q4, out of 13 consecutive quarters, I think is going to expand based on how we are looking at our own internal models. I am of the view that we are going to have this trend continues, especially around all the things we are talking about when we talk about pipeline and the view we see around our sales pipeline and our ability to execute against that. I am very bullish on the back half to be a margin expansion in Environmental Services and in 2026.
Mike Battles: I do not think any of these things are a one-off. I think they are clearly long-term structural changes we are making in the organization to drive profitable growth.
David Manthey: Right. I think the comps do get easier in the back half as well. So it is fair to think about expansion probably at a higher rate, right, in the back half. I mean, that seems to be implied in the dial.
Yeah, no. I I think all the, all the progress that Eric just articulated around pricing Labor Management cost efficiencies Transportation. I mean, those continue, uh, as you know, the, the, the, the comping to 3 gets a lot easier because there's not the there's not that large Network that that Eric mentioned earlier. So I think that that the margin progression that we're going to see for the for Q3 and Q4, you know, I13 consecutive quarters. I think is going to expand uh based on kind of how we're looking at that our own internal models. And so I I'm up with you that that, you know, we're going to have, you know, this, this this train continues. Uh, especially around all the things we're talking about. When we talk about pipeline, uh, in the, in the view, we see around our sales Pipeline and our ability to execute against that. So I'm very bullish about the back, half of the Year margin expansion and environmental services and in 2026. None of these. I don't think anything's are 1 of these. I think they are clearly. You know, long-term structural changes. We're making in the organization that drive profitable growth
Mike Battles: Yeah.
David Manthey: Okay.
Mike Battles: are right. We came into the quarter with a view that perhaps Q2 would be a margin contraction given all the event work we had last year. But as Eric said, every one of our businesses did very well from a margin expansion standpoint.
Right. I think I think the columns do get easier in the back half as well. So it's it's fair to think about it expansion. Uh probably at a higher rate right in the back half. I mean that's that seems to be implied very much so very much so okay, but you're right, we came to the quarter with a few. Then we came into the quarter with a view that perhaps you too. Would be a margin contraction. Given all the event work we had last year but as Eric said, you know, every single 1 of our businesses did very well from a from a large expansion.
Standpoint.
David Manthey: Thanks, Mike. I just want to pick up on the M&A question and maybe try to put a little bit of meat on the bone here as net leverage continues to trend down. Anything you can share on, you know, LOIs, size of targets? I mean, you're talking about a very full pipeline here. Just help us understand a little bit more what you're looking at.
Uh,
Thanks, Mike. I just want to pick up on the M&A question and maybe try to put a little bit of meat on the bone here as net leverage continues to trend down. Um, anything you can share on...
Mike Battles: Yeah, it's really tough to get very specific as to the targets because, you know, we want to make sure we're disciplined and we sometimes go very late in the process and don't go further. So it's really hard to say, Noah Kaye, what's going to close, when is it going to close? We get questions like that all the time, like, what's your view over the next 12 to 18 months? It's very difficult to get that.
You know, Louis, the size of targets. I mean, you're talking about a very full pipeline here. Just help us understand a little bit more what you're looking at.
Christine: I would rather talk about our process, which I think is incredibly disciplined, but incredibly robust. We have a team of people who have done over 75 acquisitions in our history. I do think that we have an incredible, talented team of people who can execute not just on the go-to side, but on the integration synergy capture side, where we really, especially businesses that we bought last year like HEPACO, we are seeing terrific returns on that. Eric articulated in the margin story around field services. That is internalizing those emergency response callouts has been a huge win for us. I think that the engine is very strong, and we are getting a lot of good pipeline of things to look at, both large and medium, and some small and medium, some large. We will continue to be very active with our strong balance sheet.
What's your view over the next 12 to 18 months? It's very difficult to give that answer. I I'd rather talk about our process, which I think is incredibly disciplined. But quite incredibly robust, we have a team of people who've done. We've done over 75 Acquisitions in our history and I do think that we have incredible talented team of people who can ask you on on on not just on the dodin side but on the integration Synergy capture side where we really especially businesses that we bought last year. Like Keo, we are seeing terrific returns uh on that and and and Erica articulated in the margin story around field service. That's internalizing those those those uh those emergency response callouts has been a huge win for us. So I'm I I think that uh the engine the engine is very strong and we're getting a lot, a good pipeline of of, of, of things to look at both large and medium and some small and medium some some large. And so and we'll be very and we'll continue to be very active with with, uh, with our strong balance sheet.
Unknown: All right. Well, stay tuned. Thank you.
Nathan Brown: Thanks, Noah.
All right, well, stay tuned. Thank you.
Michael Mcdonald: Thanks, Noah.
Thank you.
Eric Gerstenberg: Our next question comes from a line of James Buckley with TD Cowen. Please proceed with your question.
Our next question comes from the line of James schum. With TD Cowen, please receive with your question.
Unknown: Hey, good morning, guys.
Nathan Brown: Morning, Bob.
Hey, good morning, guys.
Michael Mcdonald: Morning.
Nathan Brown: Hey, Jim.
Good morning. Good morning, good.
Unknown: On the SKSS guidance, you guys sound very confident in the 140 this year. If we just look at the numbers, you were asked this before, but if you just look at the first half and then Q3, it is supposed to be up year over year, but that could be $42 million. It still, I don't think, gives investors a ton of confidence because Q4 could be weak. I just wanted to ask, is there something else? It is FIFO accounting, right? If your pricing has been going up, are we working through the backlog of pricing from six months ago that was lower? Maybe you have something in hand that we can't see, that we're not aware of, but maybe you could just talk to the charge for oil pricing that maybe has gone up.
um,
So, on the SKSS guidance, you guys sound very confident in the $140 million this year, but if we just look at the numbers, I mean, you were asked this before, but if you just look at the first half and then Q3, you know, it's supposed to be up year-over-year, but that could be $42 million.
It's still.
I don't think that gives investors a ton of confidence, like, you know, because Q4 could be weak. So.
Unknown: So Q3 could look a lot stronger than Q2 based on what you already have in the system. Any help you could give there would be great.
I I just wanted to ask is there something else um wanted to it. It is fifo accounting, right? So if your pricing has been going up, are we working through the the backlog of pricing from 6 months ago? That was lower than, you know. So so maybe you have something in hand that we can't see that. We're not aware of, but maybe you could just talk to, you know, the the charge for oil pricing that maybe has gone up. And so 3 Q could look a lot stronger than 2 Q based on what you already have in the system. Any help you could give there would be great.
Michael Mcdonald: Sure, Jim. This is Eric Dugas, so I will take that. I think a lot of what you said there is right on. To talk about the second half and the growth prospects there that Mike touched on, we see sequential growth in SKSS from Q2 to Q3. One of the primary drivers of that is, in fact, the lower-cost inventory that is now in the system. We have sold through under a FIFO basis. We have sold through that higher-cost inventory from last year. That is all gone now. That gives us comfort into Q3 and Q4 here that we are going to expand the profitability of the business. We do expect to continue to see kind of the typical seasonality from Q3 to Q4, but probably not as deep as last year.
Michael Mcdonald: As we said in our prepared comments, we have been very happy with the first half of the year. Each Q1 and Q2, we have exceeded expectations in this business a little bit. We are almost 50% to our full-year goal. We anticipate greater profitability in the back half here. Very, very good. Again, I would just emphasize that the team has done a phenomenal job here transforming the economics and changing to a charge for oil position. I think the market has followed. That has been great. That is probably the single biggest driver of the change here and our comfort in our guidance this year.
Sharon, this is uh, Eric Dugas. So I'll take that and I I think a lot of what you said there is is right on but just to talk about the second half and and the growth prospects there that that might touched on, you know, certainly we see sequential growth in skss from Q2 to Q3 and 1 of the primary drivers of that is, in fact, you know, the lower cost inventory, uh, that is now in the system. So we've, we've sold through under a fifo basis. We've sold through that higher cost inventory from, uh, last year, that's all gone. Now, uh, that gives us Comfort into Q3 and Q4 here that, uh, we're going to expand the profitability of the business. We will we do expect to continue to see kind of the seasonality, uh, typical seasonality from Q3 to Q4, uh, but probably not as deep as last year. Um, so like we said, I, I think our prepared comments, you know, we've been very happy with the first half of the Year. Each q1 and Q2, we've exceeded expectations in this business a little bit. Uh, we're almost 50% to our full year goal and we anticipate, you know, greater problem.
Unknown: Okay. Great, Eric. Thanks for that. I just wanted to ask, in Environmental Services, can you talk about your pricing and contract structures? How do they vary? How many of your contracts are long-term contracts? If you could specifically address, are there long-term group price agreements for your incineration volumes?
Profitability in the back half here. So, um, very, very good again. I, I would just emphasize that the team has done a phenomenal job here. Uh, transforming the economics and and changing, uh, to a charge for oil position. And and I think the market has followed, uh, and that's been great, and that's probably the single biggest driver of the change here and our comfort in our guidance, this year.
Okay, great, Eric. Thanks for that. Um and then I just wanted to ask an environmental services. Can you talk about like your your pricing and contract structures? You know how they vary? Do you have? You know how many of your contracts are long-term contracts?
And then, if you could just specifically address, are there long-term group price agreements for your incinerator volume?
Mike Battles: Yeah, James. This is Eric here. I will start with that. Most of our contracts with our larger customers are in the one to three-year area, where we have a very, very disciplined price improvement plan with our contracts with our customers every time they get reviewed. Our cadence is such that we are reviewing prices across the board and do that on a cadence a couple of times a month, go through every single different business unit, the whole breadth of customers, see what contracts are getting renewed. So we continue to have opportunity there. We all know that our price improvement has continued to outpace inflation. Overall, we continue to have opportunity to drive price improvement. We are doing it. We are outpacing inflation, and we see more opportunity.
Dude, so we continue to have opportunity there. We all know that our price improvement has continued to outpace inflation. Overall, we continue to have the opportunity to drive price improvement. We're doing it; we're outpacing inflation, and we see more opportunity.
Unknown: Okay. Thank you for that. Then just on the incinerator part, is that what you are referring to, typically a one to three-year agreement there? Is that the same throughout Environmental Services?
Mike Battles: Yeah. It's really our top-tier customers across the board. It's not related just specifically to incineration. It's really all the waste streams, all the services, whether it's labor, equipment, materials, disposal pricing. That is across the board in the Environmental Services side.
Okay, thank you for that. And then, just on the, on the incinerator part. Uh, is that, is that, is that what you're referring to typically a 1 to 3 year agreement? There is, is that the same throughout ES
Yeah. It's it's really our top tier customers across the board. It's not related. Just specifically to incineration. It's really all the way streams all the services, whether it's labor equipment materials, disposal pricing, that is um that's across the board in the es side.
Unknown: Okay. Got it. Thank you very much.
Mike Battles: You.
Okay, got it. Thank you very much.
Thank you.
Eric Gerstenberg: As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question comes from a line of Toby Somer with Truist. Please proceed with your question.
as a reminder, if you would like to ask a question press star 1 on your telephone keypad,
Our next question comes from the line of Toby Somer with truist, please receive with your question.
Unknown: Thanks. I wanted to start out and see if you could provide us some additional color on the strategic and financial advantages of the hub concept that you talked about in your prepared remarks that you are proliferating throughout the system.
I wanted to start out and see if you could provide us some additional color on the Strategic and financial advantages of the Hub. Concept that you talked about your prepared remarks, that you're sort of proliferating throughout the system.
Mike Battles: Yeah, Toby, I will begin. When we think about and how we talked about Phoenix and Baltimore and some of the other major hubs, Chicago as an example, that is where we are getting leverage across the different business units. We combine multiple types of businesses that we have within the organization at one location. They are working off the same customers. They are cross-selling. They are sharing people, assets. The cost that we feed of supplies and transportation through our network gets leveraged. It is really an entire mix of driving efficiencies, driving cross-sell, working together as a team, collaborating on how we better serve our customers, and really meeting those needs across all the different businesses. So it is that hub concept.
Mike Battles: Also, I cannot fail to mention, from a distribution side, we are selling a lot of products as well, whether it be oil, whether it be materials and supplies, how we get back calls in our transportation through those hubs in a spoke network, very important for us. So we really look at that as an opportunity. We also consolidate real estate costs as well when we find a good hub, get out of all of the smaller branches, get everybody in a big location, and we get leverage off of that.
Yeah, Toby, uh I'll begin. Uh so when we think about and how we talk about Phoenix and Baltimore and some of other major Habs Chicago as an example, that's where we're getting leveraged across the different business units. We combine multiple types of businesses that we have within the organization at 1 location. They're working off the same customers, they're cross-selling, they're sharing people assets. The costs that we feed of supplies and transportation through our Network gets leveraged. So it's really a, uh, it's all its entire mix of driving efficiencies driving cross cells working together as a team collaborating on how we better serve our customers and really Meeting those needs across all the different businesses. So it's um that Hub concept and all. And also I can't uh I can't fail to mention from a distribution.
Christine: The real dollar location, dollar savings that Eric sort of articulated around cross-selling, around logistics, around maintenance, and all those in kind of these larger hubs, I think this is important. It provides an opportunity for our employees to develop and grow without having them to have to move. When you have a large hub like that, when you get a smart young person, he or she can move around in the site, do different things, whether it is different parts of the business, whether in distribution or maintenance, as Eric just articulated, this or oil and re-refining, all those types of services that we provide in these hubs give people an opportunity to grow and develop without having to leave the company or move.
Side. We're selling a lot of products as well. Whether it be oil, whether it be materials and supplies, how we get back calls on our transportation through those hubs and a Spoke Network, very important for us. So we we really look at that as an opportunity, we also consolidate re real estate costs as well. When we find a good Hub, get out, get out of all of the smaller branches, get everybody in a big location and we get leverage off of that. Yeah. So there are real Dollar locations dollar savings that Eric and articulated around cross selling around Logistics around maintenance kind of
All those companies larger hubs.
Christine: Really, I think from a turnover standpoint, and our turnover is very, very low, but our turnover standpoint, we have been able to keep good people in the company because they can grow and develop in the site, this much larger site of it.
I think just as important as it provides an opportunity for our employees to develop and grow without having them to have to move. And so when you have a larger Hub like that when you get a a smart young person he he or she can move around in the in the site do different things. But there are different types of business whether they're in distribution or maintenance. Is there anything that's articulated? You know this or or oil we refining it all those types of services that we provide in these hubs gives people an opportunity to grow and develop without having to leave the company or move. And so really that I think is a from a from a
Turnover standpoint, and our turnover is very, very low but our internal standpoint. You know, we've been able to keep good people in the company because they can grow and develop uh it would and in the site that's much larger site.
Unknown: Thank you for that. From a competitive behavior perspective within Environmental Services, what does it look like from a pricing vantage point? Are you seeing any players out in the market nip at business at prices that don't generate the kind of returns that you want, and therefore, you're kind of foregoing some business because of that?
And thank you for that, from a competitive behavior perspective, within EES.
What does it look like? Uh, from a, a pricing Vantage Point? Um, are, are you seeing any, any players out in the market, uh, nip at, uh, at business at at at prices that don't, uh, generate the kind of returns that you want and therefore, uh, you're, you're kind of forgoing some business because of that.
Mike Battles: Toby, I would say more now than ever, there are very disciplined competitors in our space, and that has improved substantially over the past couple of years. So, I think for the most part, when we are getting our margin improvements, we are really driving price, but we are also driving efficiencies across the board. There is a disciplined environment out there now. We, as we know, what we do and the waste streams that we handle, it is difficult. We should get paid accordingly for those services. I think the investments that different companies have made into the ES space show that discipline and higher multiples are being paid. So, there has to be price discipline there.
Into the es. Space shows that discipline and higher multiples are being paid. So there is there has to be Place price discipline there.
Unknown: Thank you very much.
Thank you very much.
Thank you, Toby.
Eric Gerstenberg: Thank you. Mr. Gerstenberg, we have no further questions at this time. I would like to turn the floor back over to you for closing comments.
Thank you, Mr. Gerson B, we have no further questions at this time. I'd like to turn the floor back over to you for closing comments.
Michael Mcdonald: Thanks, Christine, and thanks, everyone, for joining us today. Our next investor event will be at the Raven James Virtual Industrial Showcase in mid-August, followed by more IR activity in the September timeframe. Have a great, safe day, and enjoy the rest of your summer.
Thanks, Christine, and thanks everyone for joining us today. Our next investor event will be at the Raven James virtual industrial showcase in mid-August.
Followed by more IR activity in the September time frame.
Have a great safe day and enjoy the rest of your summer.
Eric Gerstenberg: 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.
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.