Clean Harbors, Inc. (“Clean Harbors” or the “Company”), the premier provider of environmental and industrial services across North America, has announced its financial results for the fourth quarter and full year ending December 31, 2024.
Strong Fourth-Quarter Performance and Record Year for Environmental Services Segment
According to Co-Chief Executive Officer Mike Battles, “Our fourth-quarter results met expectations as our Environmental Services (ES) segment ended a record-setting 2024 with a strong performance. This marks the 11th consecutive quarter of year-over-year margin growth.” He attributed the success to consistent demand, robust waste collection volumes, ongoing project work, and favorable pricing. The ES segment achieved 11% top-line growth for the year and an annual Adjusted EBITDA margin exceeding 25%. The Company maintained a strong commitment to safety, resulting in a Total Recordable Incident Rate (TRIR) surpassing its 2024 goal.
Fourth-Quarter 2024 Financial Results
- Revenue Growth: Increased 7% to $1.43 billion, up from $1.34 billion in Q4 2023.
- Income from Operations: Reached $137.0 million, compared to $147.3 million in Q4 2023.
- Net Income: $84.0 million ($1.55 per diluted share), compared with $98.3 million ($1.81 per diluted share) in Q4 2023.
- Adjusted EBITDA: $257.2 million, slightly up from $254.9 million in Q4 2023.
Q4 2024 Segment Review
Co-Chief Executive Officer Eric Gerstenberg highlighted, “Our ES segment experienced 9% revenue growth and an 11% rise in Adjusted EBITDA. Our Adjusted EBITDA margin increased by 50 basis points.” The growth was led by:
- Field Services: Revenue surged 47% year-over-year, bolstered by the HEPACO acquisition and organic expansion.
- Technical Services: Increased by 8%, benefiting from a strong network.
- Incineration Utilization: Reached an outstanding 94%, up from 85% a year ago.
- Safety-Kleen Environmental Services: Achieved 6% revenue growth.
However, the Safety-Kleen Sustainability Solutions (SKSS) segment faced ongoing challenges in the U.S. base oil and lubricants market, with a 5% revenue decline and lower profitability. In response, the Company implemented a charge-for-oil (CFO) strategy in mid-November and cost-cutting initiatives to mitigate pricing pressures.
Full-Year 2024 Financial Results
- Revenue: Grew 9% to $5.89 billion, up from $5.41 billion in 2023.
- Income from Operations: Increased 9% to $670.2 million from $612.4 million in 2023.
- Net Income: Reached $402.3 million ($7.42 per diluted share), compared with $377.9 million ($6.95 per diluted share) in 2023.
- Adjusted EBITDA: Increased 10% to $1.12 billion, up from $1.01 billion in 2023.
- Adjusted Free Cash Flow: $357.9 million, compared with $321.9 million in 2023.
Key Milestones in 2024
- Achieved a TRIR of 0.65, surpassing safety goals.
- Completed and commercially launched the Kimball, Nebraska incinerator.
- Acquired HEPACO and Noble Oil.
- Improved workforce retention, reducing turnover by 250 basis points.
- Introduced the Total PFAS Solution.
- Expanded the Baltimore Hub.
- Partnered with Castrol for its MoreCircular offering.
- Responded to over 20,000 emergency events.
Business Outlook and 2025 Financial Guidance
Gerstenberg expects profitable growth in 2025, primarily driven by the ES segment. A strong waste stream backlog in disposal and recycling networks, combined with favorable trends in U.S. manufacturing, infrastructure spending, and regulatory developments (particularly concerning PFAS), supports a positive forecast.
Key expectations for 2025:
- Environmental Services: Anticipates robust demand in Field Services, benefiting from the HEPACO acquisition and growing emergency response capabilities.
- Industrial Services: Expected to return to growth after a sluggish 2024.
- SK Environmental Services: Projected to drive record waste volumes into the network.
- SKSS: Focus on cost management, waste oil collection efficiency, and growth through partnerships (e.g., Castrol), Group III production, and blended sales.
2025 Financial Targets
- Adjusted EBITDA: Expected in the range of $1.15 billion to $1.21 billion (6% YoY growth), based on anticipated GAAP net income of $376 million to $427 million.
- Adjusted Free Cash Flow: Estimated between $430 million and $490 million, with a midpoint of $460 million.
- Q1 2025 Expectations: Adjusted EBITDA for the ES segment to grow 4%-6% YoY; consolidated Adjusted EBITDA to remain flat.
Commitment to Financial Strength and Growth
Battles emphasized that Clean Harbors has the right strategies in place for strong Financial Results performance in 2025. The Company expects to increase Adjusted EBITDA and free cash flow, with ongoing margin expansion driven by pricing strategies, cost reductions, and productivity improvements.
Non-GAAP Measures
Clean Harbors utilizes Adjusted EBITDA as a key performance indicator, providing investors with insights into operational efficiency and profitability. The following reconciliation outlines differences between net income and Adjusted EBITDA:
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Income | $83.97M | $98.35M | $402.30M | $377.86M |
| Accretion of Environmental Liabilities | $3.32M | $3.39M | $13.46M | $13.67M |
| Stock-Based Compensation | $7.29M | $5.89M | $27.98M | $20.70M |
| Depreciation & Amortization | $105.29M | $98.34M | $400.92M | $365.76M |
| Kimball Startup Costs | $4.34M | $0M | $4.34M | $0M |
| Other (Income) Expense, Net | ($0.98M) | ($3.15M) | $1.45M | ($2.32M) |
| Loss on Early Debt Extinguishment | $0.37M | $0.52M | $0.37M | $2.88M |
| Interest Expense, Net | $34.20M | $28.20M | $134.96M | $108.60M |
| Provision for Income Taxes | $19.40M | $23.38M | $131.14M | $125.42M |
| Adjusted EBITDA | $257.21M | $254.91M | $1.12B | $1.01B |
Clean Harbors continues to focus on operational excellence, growth strategies, and financial discipline, positioning itself for long-term success in 2025 and beyond.
