Clean Harbors (CLH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $1.55 billion, up 11% year-over-year, driven by strong Environmental Services growth and the HEPACO acquisition.

• Net income increased 15% to $133.3 million, with diluted EPS of $2.46, and Adjusted EBITDA rose 14% to $327.8 million, both surpassing prior year results.

• Environmental Services segment delivered 12% revenue growth and 18% Adjusted EBITDA growth, with margin expansion and record incinerator utilization; SKSS rebounded sequentially but faced ongoing market volatility.

• Integration of HEPACO and Noble Oil acquisitions contributed to segment growth, synergy realization, and expanded service offerings.

• Corporate expenses rose due to acquisitions, incentive compensation, and non-recurring legal/environmental costs.

Financial highlights

• Gross profit was $517.2 million (33.3% margin), up from $450.4 million (32.2%) in Q2 2023.

• Adjusted EBITDA margin improved to 21.1% (up 50 basis points year-over-year).

• Q2 net income was $133.3 million and EPS was $2.46, both up 15% year-over-year.

• Cash and short-term marketable securities at quarter end were $493 million; net debt to EBITDA ratio was 2.3x.

• Adjusted free cash flow for Q2 was $84.2 million, nearly flat year-over-year.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance raised to $1.125–$1.165 billion, a 13% increase at the midpoint over 2023.

• Adjusted free cash flow for 2024 projected at $350–$390 million, including $65 million for the Kimball incinerator and $20 million for Baltimore expansion.

• Q3 2024 Adjusted EBITDA expected to grow 20–24% year-over-year.

• ES segment 2024 Adjusted EBITDA expected to increase 13–16%; SKSS segment expected to grow 3–5% from 2023.

• New Kimball, Nebraska incinerator on track to open in Q4 2024, expected to add significant capacity.