Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Document Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-39120 | |
Entity Registrant Name | US ECOLOGY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2421185 | |
Entity Address, Address Line One | 101 S. Capitol Blvd., SuiteĀ 1000 | |
Entity Address, City or Town | Boise | |
Entity Address, State or Province | ID | |
Entity Address, Postal Zip Code | 83702 | |
City Area Code | 208 | |
Local Phone Number | 331-8400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,512,324 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001783400 | |
Amendment Flag | false | |
Common Stock | ||
Document Information | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | ECOL | |
Security Exchange Name | NASDAQ | |
Warrants | ||
Document Information | ||
Title of 12(b) Security | Warrants to Purchase Common Stock | |
Trading Symbol | ECOLW |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 102,038 | $ 41,281 |
Receivables, net | 227,602 | 255,310 |
Prepaid expenses and other current assets | 30,739 | 25,136 |
Income taxes receivable | 17,476 | 11,244 |
Total current assets | 377,855 | 332,971 |
Property and equipment, net | 475,038 | 478,768 |
Operating lease assets | 50,977 | 57,396 |
Restricted cash and investments | 5,451 | 5,069 |
Intangible assets, net | 547,385 | 574,902 |
Goodwill | 471,523 | 766,980 |
Other assets | 18,066 | 15,158 |
Total assets | 1,946,295 | 2,231,244 |
Current Liabilities: | ||
Accounts payable | 39,966 | 46,906 |
Deferred revenue | 17,545 | 14,788 |
Accrued liabilities | 49,047 | 65,869 |
Accrued salaries and benefits | 26,463 | 29,653 |
Income taxes payable | 1,015 | 726 |
Current portion of long-term debt | 3,359 | 3,359 |
Current portion of closure and post-closure obligations | 4,019 | 2,152 |
Current portion of operating lease liabilities | 17,175 | 17,317 |
Total current liabilities | 158,589 | 180,770 |
Long-term debt | 823,323 | 765,842 |
Long-term closure and post-closure obligations | 84,797 | 84,231 |
Long-term operating lease liabilities | 34,181 | 39,954 |
Other long-term liabilities | 36,482 | 20,722 |
Deferred income taxes, net | 125,134 | 128,345 |
Total liabilities | 1,262,506 | 1,219,864 |
Commitments and contingencies (See Note 16) | ||
Stockholders' Equity: | ||
Common stock $0.01 par value per share, 50,000 authorized; 31,144 and 31,461 shares issued and outstanding, respectively | 315 | 315 |
Additional paid-in capital | 819,344 | 816,345 |
Retained (deficit) earnings | (96,044) | 206,574 |
Treasury stock, at cost, 369 and 0 shares, respectively | (16,291) | |
Accumulated other comprehensive loss | (23,535) | (11,854) |
Total stockholders' equity | 683,789 | 1,011,380 |
Total liabilities and stockholders' equity | $ 1,946,295 | $ 2,231,244 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 31,144 | 31,461 |
Common stock, shares outstanding | 31,144 | 31,461 |
Treasury stock, shares | 369 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 238,142 | $ 167,402 | $ 692,780 | $ 454,241 |
Direct operating costs | 175,099 | 110,862 | 514,804 | 312,877 |
Gross profit | 63,043 | 56,540 | 177,976 | 141,364 |
Selling, general and administrative expenses | 49,890 | 33,329 | 149,435 | 77,683 |
Goodwill impairment charges | 300,300 | |||
Operating income (loss) | 13,153 | 23,211 | (271,759) | 63,681 |
Other income (expense): | ||||
Interest income | 9 | 158 | 251 | 567 |
Interest expense | (7,964) | (3,891) | (25,127) | (11,509) |
Foreign currency loss | (421) | (90) | (155) | (613) |
Other | 86 | 110 | 382 | 342 |
Total other expense | (8,290) | (3,713) | (24,649) | (11,213) |
Income (loss) before income taxes | 4,863 | 19,498 | (296,408) | 52,468 |
Income tax (benefit) expense | (1,456) | 6,428 | 542 | 15,864 |
Net Income (loss) | $ 6,319 | $ 13,070 | $ (296,950) | $ 36,604 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.20 | $ 0.59 | $ (9.54) | $ 1.66 |
Diluted (in dollars per share) | $ 0.20 | $ 0.59 | $ (9.54) | $ 1.65 |
Shares used in earnings (loss) per share calculation: | ||||
Basic (in shares) | 31,069,000 | 22,013,000 | 31,142,000 | 22,002,000 |
Diluted (in shares) | 31,324,000 | 22,231,000 | 31,142,000 | 22,212,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income (loss) | $ 6,319 | $ 13,070 | $ (296,950) | $ 36,604 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss) | 1,923 | (995) | (3,328) | 2,374 |
Net changes in interest rate hedge, net of taxes of $196, $(40), $(2,220) and ($537), respectively | 739 | (150) | (8,353) | (2,018) |
Comprehensive income (loss), net of tax | $ 8,981 | $ 11,925 | $ (308,631) | $ 36,960 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other comprehensive income (loss): | ||||
Net changes in interest rate hedge, tax | $ 196 | $ (40) | $ (2,220) | $ (537) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (296,950) | $ 36,604 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 54,831 | 26,656 |
Amortization of intangible assets | 27,812 | 8,600 |
Accretion of closure and post-closure obligations | 3,812 | 3,397 |
Property and equipment impairment charges | 25 | |
Goodwill impairment charges | 300,300 | |
Unrealized foreign currency loss (gain) | 87 | (361) |
Deferred income taxes | 79 | 3,873 |
Share-based compensation expense | 4,861 | 3,713 |
Share-based payments of business development and integration expenses | 1,142 | |
Unrecognized tax benefits | (8) | (238) |
Net loss (gain) on disposition of assets | 1,817 | 665 |
Gain on insurance proceeds from damaged property and equipment | (9,651) | |
Amortization and write-off of debt issuance costs | 1,640 | 613 |
Amortization and write-off of debt discount | 121 | |
Change in fair value of contingent consideration | (3,207) | |
Changes in assets and liabilities (net of effects of business acquisitions): | ||
Receivables | 25,297 | (9,449) |
Income taxes receivable | (6,250) | 2,292 |
Other assets | (8,345) | (7,206) |
Accounts payable and accrued liabilities | (19,177) | 1,873 |
Deferred revenue | 930 | 1,770 |
Accrued salaries and benefits | (4,494) | 2,665 |
Income taxes payable | 287 | (425) |
Closure and post-closure obligations | (1,341) | (1,414) |
Net cash provided by operating activities | 83,244 | 64,002 |
Cash flows from investing activities: | ||
Business acquisitions (net of cash acquired) | (3,309) | (17,851) |
Purchases of property and equipment | (45,124) | (38,443) |
Insurance proceeds from damaged property and equipment | 1,131 | 10,000 |
Minority interest investment | (7,870) | |
Proceeds from sale of property and equipment | 1,079 | 549 |
Purchases of restricted investments | (1,113) | (798) |
Proceeds from sale of restricted investments | 970 | 751 |
Net cash used in investing activities | (46,366) | (53,662) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 90,000 | 20,000 |
Payments on long-term debt | (33,375) | (30,000) |
Payments on short-term borrowings | (72,353) | (51,018) |
Proceeds from short-term borrowings | 72,353 | 52,553 |
Repurchase of common stock | (18,332) | |
Dividends paid | (5,667) | (11,915) |
Payment of acquired contingent consideration liabilities | (2,085) | |
Deferred financing costs paid | (1,144) | |
Payment of equipment financing obligations | (4,827) | (619) |
Other | 28 | (852) |
Net cash provided by (used in) financing activities | 24,598 | (21,851) |
Effect of foreign exchange rate changes on cash | (480) | 673 |
Increase (decrease) in Cash and cash equivalents and restricted cash | 60,996 | (10,838) |
Cash and cash equivalents and restricted cash at beginning of period | 42,140 | 32,753 |
Cash and cash equivalents and restricted cash at end of period | 103,136 | 21,915 |
Supplemental Disclosures: | ||
Income taxes paid, net of receipts | 6,385 | 10,422 |
Interest paid | 21,773 | 10,340 |
Non-cash investing and financing activities: | ||
Capital expenditures in accounts payable | 883 | 558 |
Restricted stock issued from treasury shares | $ 2,041 | $ 514 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Restricted cash and investments) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Reconciliation of Cash and cash equivalents and restricted cash | ||||
Cash and cash equivalents | $ 102,038 | $ 41,281 | $ 21,074 | $ 31,969 |
Restricted cash | 1,098 | 859 | 841 | 784 |
Cash and cash equivalents and restricted cash | $ 103,136 | $ 42,140 | $ 21,915 | $ 32,753 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balances at Dec. 31, 2018 | $ 220 | $ 183,834 | $ 189,324 | $ (370) | $ (13,791) | $ 359,217 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 36,604 | 36,604 | ||||
Other comprehensive income (loss) | 356 | |||||
Share-based compensation | 3,713 | |||||
Stock option exercised and issuance of common stock and restricted common stock | 1 | (1,093) | ||||
Dividends paid | (11,915) | |||||
Repurchase of common stock | (916) | |||||
Issuance of restricted common stock from treasury shares | (514) | 514 | ||||
Ending balances at Sep. 30, 2019 | 221 | 185,940 | 214,013 | (772) | (13,435) | 385,967 |
Beginning balances at Jun. 30, 2019 | 221 | 184,747 | 204,916 | (835) | (12,290) | 376,759 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 13,070 | 13,070 | ||||
Other comprehensive income (loss) | (1,145) | |||||
Share-based compensation | 1,246 | |||||
Stock option exercised and issuance of common stock and restricted common stock | 10 | |||||
Dividends paid | (3,973) | |||||
Issuance of restricted common stock from treasury shares | (63) | 63 | ||||
Ending balances at Sep. 30, 2019 | 221 | 185,940 | 214,013 | (772) | (13,435) | 385,967 |
Beginning balances at Dec. 31, 2019 | 315 | 816,345 | 206,574 | (11,854) | 1,011,380 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (296,950) | (296,950) | ||||
Other comprehensive income (loss) | (11,681) | |||||
Share-based compensation | 4,861 | |||||
Stock option exercised and issuance of common stock and restricted common stock | (468) | |||||
Dividends paid | (5,667) | |||||
Other | (1) | |||||
Share-based payments of business development and integration expenses | 1,143 | |||||
Repurchase of common stock | (18,332) | |||||
Issuance of restricted common stock from treasury shares | (2,537) | 2,041 | ||||
Ending balances at Sep. 30, 2020 | 315 | 819,344 | (96,044) | (16,291) | (23,535) | 683,789 |
Beginning balances at Jun. 30, 2020 | 315 | 817,557 | (102,362) | (16,366) | (26,197) | 672,947 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 6,319 | 6,319 | ||||
Other comprehensive income (loss) | 2,662 | |||||
Share-based compensation | 1,773 | |||||
Stock option exercised and issuance of common stock and restricted common stock | (31) | |||||
Other | (1) | |||||
Share-based payments of business development and integration expenses | 170 | |||||
Issuance of restricted common stock from treasury shares | (125) | 75 | ||||
Ending balances at Sep. 30, 2020 | $ 315 | $ 819,344 | $ (96,044) | $ (16,291) | $ (23,535) | $ 683,789 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2020 | |
GENERAL | |
GENERAL | NOTE 1. GENERAL ā Basis of Presentation ā The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All inter-company balances have been eliminated. Throughout these consolidated financial statements words such as āwe,ā āus,ā āour,ā āUS Ecologyā and āthe Companyā refer to US Ecology, Inc. and its subsidiaries. ā In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (āSECā). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (āGAAPā) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Companyās Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2020. ā The Companyās consolidated balance sheet as of December 31, 2019 has been derived from the Companyās audited consolidated balance sheet as of that date. ā Use of Estimates ā The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future. ā Recently Issued Accounting Pronouncements ā In December 2019, the FASB issued ASU No. 2019-12, āIncome Taxesā (Topic 740): Simplifying the Accounting for Income Taxes (āASU 2019-12ā), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, āFinancial Instruments - Credit Lossesā (Topic 326), which became effective for reporting periods beginning after December 15, 2019. The standard replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company adopted the new credit loss standard effective January 1, 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners, and external market factors. The Company will continue to actively monitor the impact of the recent coronavirus (āCOVID-19ā) pandemic on expected credit losses. ā |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2020 | |
REVENUES | |
REVENUES | NOTE 2. REVENUES ā Our operations are managed in two reportable segments, Environmental Services and Field & Industrial Services, reflecting our internal reporting structure and nature of services offered. See Note 17 for additional information on our operating segments. ā The following table presents our revenue disaggregated by our reportable segments and service lines: ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 91,226 ā $ 13,861 ā $ 105,087 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 21,201 ā ā 11,162 ā ā 32,363 Industrial Services (3) ā ā ā ā ā 28,464 ā ā 28,464 Small Quantity Generation (4) ā ā ā ā ā 13,056 ā ā 13,056 Total Waste Management (5) ā ā ā ā ā 9,998 ā ā 9,998 Remediation (6) ā ā ā ā ā 6,733 ā ā 6,733 Emergency Response (7) ā ā ā ā ā 30,120 ā ā 30,120 Domestic Standby Services (8) ā ā ā ā ā 7,873 ā ā 7,873 Other (9) ā ā ā ā ā 4,448 ā ā 4,448 Revenue ā $ 112,427 ā $ 125,715 ā $ 238,142 ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 98,554 ā $ 3,312 ā $ 101,866 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 23,658 ā ā 12,070 ā ā 35,728 Industrial Services (3) ā ā ā ā ā 4,850 ā ā 4,850 Small Quantity Generation (4) ā ā ā ā ā 10,001 ā ā 10,001 Total Waste Management (5) ā ā ā ā ā 8,674 ā ā 8,674 Remediation (6) ā ā ā ā ā 1,388 ā ā 1,388 Emergency Response (7) ā ā ā ā ā 3,294 ā ā 3,294 Other (9) ā ā ā ā ā 1,601 ā ā 1,601 Revenue ā $ 122,212 ā $ 45,190 ā $ 167,402 ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 282,231 ā $ 33,744 ā $ 315,975 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 67,351 ā ā 22,577 ā ā 89,928 Industrial Services (3) ā ā ā ā ā 85,528 ā ā 85,528 Small Quantity Generation (4) ā ā ā ā ā 35,292 ā ā 35,292 Total Waste Management (5) ā ā ā ā ā 25,315 ā ā 25,315 Remediation (6) ā ā ā ā ā 21,911 ā ā 21,911 Emergency Response (7) ā ā ā ā ā 78,308 ā ā 78,308 Domestic Standby Services (8) ā ā ā ā ā 25,441 ā ā 25,441 Other (9) ā ā ā ā ā 15,082 ā ā 15,082 Revenue ā $ 349,582 ā $ 343,198 ā $ 692,780 ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 266,646 ā $ 9,241 ā $ 275,887 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 60,743 ā ā 31,922 ā ā 92,665 Industrial Services (3) ā ā ā ā ā 15,830 ā ā 15,830 Small Quantity Generation (4) ā ā ā ā ā 27,516 ā ā 27,516 Total Waste Management (5) ā ā ā ā ā 25,393 ā ā 25,393 Remediation (6) ā ā ā ā ā 4,003 ā ā 4,003 Emergency Response (7) ā ā ā ā ā 9,520 ā ā 9,520 Other (9) ā ā ā ā ā 3,427 ā ā 3,427 Revenue ā $ 327,389 ā $ 126,852 ā $ 454,241 ā (1) We categorize our treatment and disposal revenue as either āBase Businessā or āEvent Businessā based on the underlying nature of the revenue source. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business. For the three months ended September 30, 2020 and 2019, 30% and 25% , respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 70% and 75% of our treatment and disposal revenue for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, 28% and 22% , respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 72% and 78% of our treatment and disposal revenue for the nine months ended September 30, 2020 and 2019, respectively. (2) Includes collection and transportation of non-hazardous and hazardous waste. (3) Includes industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, marine terminals and refinery services such as tank cleaning and temporary storage. (4) Includes retail services, laboratory packing, less-than-truck-load service and household hazardous waste collection. Contracts for Small Quantity Generation may extend beyond one year and a portion of the transaction price can be fixed. (5) Through our total waste management (āTWMā) program, customers outsource the management of their waste compliance program to us, allowing us to organize and coordinate their waste management disposal activities and environmental compliance. TWM contracts may extend beyond one year and a portion of the transaction price can be fixed. (6) Includes site assessment, onsite treatment, project management and remedial action planning and execution. Contracts for Remediation may extend beyond one year and a portion of the transaction price can be fixed. (7) Includes spill response, waste analysis and treatment and disposal planning. (8) We provide government-mandated, commercial standby oil spill compliance solutions to companies that store, transport, produce or handle petroleum and certain nonpetroleum oils on or near U.S. waters. Our standby services customers pay annual retainer fees under long-term or evergreen contracts for access to our regulatory certifications, specialized assets and highly trained personnel. When a customer with a retainer contract experiences a spill incident, we coordinate and manage the spill response, which results in incremental revenue for the services provided, in addition to the retainer fees. (9) Includes equipment rental and other miscellaneous services. ā We provide services primarily in the United States, Canada and the Europe, Middle East, and Africa (āEMEAā) region. The following table presents our revenue disaggregated by our reportable segments and geographic location where the underlying services were performed: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Services Services Total United States ā $ 94,659 ā $ 119,610 ā $ 214,269 ā $ 99,554 ā $ 44,332 ā $ 143,886 Canada ā ā 17,768 ā ā 991 ā ā 18,759 ā ā 22,658 ā ā 858 ā ā 23,516 EMEA ā ā ā ā ā 4,195 ā ā 4,195 ā ā ā ā ā ā ā ā ā Other (1) ā ā ā 919 ā 919 ā ā ā ā ā ā Total revenue ā $ 112,427 ā $ 125,715 ā $ 238,142 ā $ 122,212 ā $ 45,190 ā $ 167,402 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Services Services Total United States ā $ 296,297 ā $ 322,811 ā $ 619,108 ā $ 262,699 ā $ 125,994 ā $ 388,693 Canada ā 53,285 ā 2,566 ā 55,851 ā 64,690 ā 858 ā 65,548 EMEA ā ā ā ā ā 13,349 ā ā 13,349 ā ā ā ā ā ā ā ā ā Other (1) ā ā ā ā ā 4,472 ā ā 4,472 ā ā ā ā ā ā ā ā ā Total revenue ā $ 349,582 ā $ 343,198 ā $ 692,780 ā $ 327,389 ā $ 126,852 ā $ 454,241 ā (1) Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions. ā Deferred Revenue We record deferred revenue when cash payments are received, or advance billings are charged, prior to performance of services, such as waste that has been received but not yet treated or disposed. Revenue is recognized when these services are performed. During the three months ended September 30, 2020 and 2019, we recognized $735,000 and $738,000 of revenue that was included in the deferred revenue balance at the beginning of each year, respectively. During the nine months ended September 30, 2020 and 2019, we recognized $13.6 million and $9.7 million of revenue that was included in the deferred revenue balance at the beginning of each year, respectively. ā Receivables ā Our receivables include invoiced and unbilled amounts where the Company has an unconditional right to payment. ā Principal versus Agent Considerations ā The Company commonly contracts with third-parties to perform certain waste-related services that we have promised in our customer contracts. We consider ourselves the principal in these arrangements as we direct the timing, nature and pricing of the services ultimately provided by the third-party to the customer. ā Costs to obtain a contract ā The Company pays sales commissions to employees, which qualify as costs to obtain a contract. Sales commissions are expensed as incurred as the commissions are earned by the employee and paid by the Company over time as the related revenue is recognized. Other commissions and incremental costs to obtain a contract are not material. ā Practical Expedients and Optional Exemptions ā Our payment terms may vary based on type of service or customer; however, we do not adjust the promised amount of consideration in our contracts for the time value of money as payment terms extended to our customers do not exceed one year and are not considered a significant financing component in our contracts. ā We do not disclose the value of unsatisfied performance obligations as contracts with an original expected length of more than one year and contracts for which we do not recognize revenue at the amount to which we have the right to invoice for services performed is insignificant and the aggregate amount of fixed consideration allocated to unsatisfied performance obligations is not material. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2020 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | NOTE 3. BUSINESS COMBINATIONS ā Acquisition of Impact Environmental Services, Inc. ā On January 28, 2020, we acquired Impact Environmental Services, Inc., an industrial cleaning and environmental services company based in Romulus, Michigan for $3.3 million. The acquired operations are reported as part of our Field & Industrial Services segment, however, revenues, net income, earnings per share and total assets are not material to our consolidated financial position or results of operations. ā We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, resulting in $300,000 allocated to goodwill and $900,000 allocated to amortizing intangible assets (primarily customer relationships) to be amortized over a weighted average life of approximately 12 years. All of the goodwill recognized was assigned to our Field & Industrial Services segment and is expected to be deductible for income tax purposes over a 15-year amortization period. ā NRC Group Holdings Corp. ā On November 1, 2019, the Company completed its acquisition (the āNRC Mergerā) of NRC Group Holdings Corp. (āNRCā), a provider of comprehensive environmental, compliance and waste management services to the marine and rail transportation, general industrial and energy industries. The addition of NRCās substantial service network strengthened and expanded US Ecologyās suite of environmental services, including new energy waste disposal and service capabilities, and provided expanded opportunities to establish US Ecology as a leader in standby and emergency response services. ā The total merger consideration was $1,024.8 million, comprised of the following: ā ā ā ā ā ā ā November 1, $s in thousands 2019 Fair value of US Ecology common stock issued (1) ā $ 581,101 Fair value of replacement warrants issued (2) ā 44,858 Fair value of replacement restricted stock units issued (3) ā 141 Fair value of replacement stock options (4) ā 360 Repayment of NRCās term loan and revolving credit facility ā 398,373 Total merger consideration ā $ 1,024,833 (1) The fair value of US Ecology common stock issued was calculated based on 9,337,949 shares of US Ecology common stock multiplied by the closing price of US Ecology common stock of $62.23 per share on October 31, 2019, the day immediately preceding the closing of the NRC Merger. (2) The fair value of replacement warrants issued was calculated based on 3,772,753 replacement warrants multiplied by the fair value per warrant of $11.89 . The fair value per warrant was based on the closing price of the replaced NRC warrants (NYSE: NRCG.WS) of $2.33 on October 31, 2019, the day immediately preceding the closing of the NRC Merger, divided by the exchange ratio of 0.196 pursuant to that certain Agreement and Plan of Merger, dated as of June 23, 2019, by and among the Company, US Ecology Holdings, Inc. (formerly known as US Ecology, Inc.), ECOL Merger Sub, Inc., NRC and Rooster Merger Sub, Inc. (the āMerger Agreementā). (3) The fair value of replacement restricted stock units issued was calculated based on 118,239 replacement restricted stock units multiplied by the closing price of US Ecology common stock of $62.23 per share on October 31, 2019, the day immediately preceding the closing of the NRC Merger, further multiplied by the ratio of the precombination service period to the remaining vesting period, or approximately 1.9% . (4) The fair value of replacement stock options issued was calculated based on 29,400 replacement stock options multiplied by the fair value per option of $12.26 . The fair value per option was calculated using the Black-Scholes option pricing model, with the following weighted-average assumptions: strike price of $52.30 per option, dividend yield of 1.2% ; expected volatility of 28.9% ; average risk-free interest rate of 1.5% ; and an expected term of 1 year. The replacement stock options became fully vested at the merger date therefore the entire fair value is considered merger consideration. The payment of transaction fees and expenses and repayment of $398.4 million of NRCās debt were funded using proceeds from a new $450.0 million seven-year term loan. See Note 11 for more information. We have recognized the assets and liabilities of NRC based on our preliminary estimates of their acquisition date fair values. The purchase price allocations are preliminary and subject to change. We continue to gather information relevant to our determination of the fair value of acquired assets and liabilities primarily related to, but not limited to, property and equipment, identifiable intangible assets and deferred income taxes. Any adjustments to the purchase price allocations are made as soon as practicable but no later than one year from the merger date. The following table summarizes the merger consideration and the preliminary fair value estimates of assets acquired and liabilities assumed, recognized at the merger date, with purchase price allocation adjustments since the preliminary purchase price allocation as previously disclosed as of December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā ā September 30, $s in thousands 2019 Adjustments 2020 Current assets ā $ 131,653 ā $ ā ā $ 131,653 Property and equipment ā ā 197,045 ā ā ā ā ā 197,045 Identifiable intangible assets ā ā 303,600 ā ā ā ā ā 303,600 Other assets ā ā 41,687 ā ā ā ā ā 41,687 Current liabilities ā ā (83,460) ā ā (5,776) ā ā (89,236) Deferred income tax liabilities ā ā (56,596) ā ā 671 ā ā (55,925) Other liabilities ā ā (57,581) ā ā ā ā ā (57,581) Total identifiable net assets ā ā 476,348 ā ā (5,105) ā ā 471,243 Goodwill ā ā 548,485 ā ā 5,105 ā ā 553,590 Total purchase price ā $ 1,024,833 ā $ ā ā $ 1,024,833 ā Purchase price allocation adjustments related primarily to the receipt of additional information regarding the fair values of accrued liabilities, deferred income taxes and residual goodwill. Goodwill of $553.6 million arising from the acquisition is primarily attributable to the assembled workforce of NRC and expected synergies from combining operations. $311.7 million of the goodwill recognized was allocated to our Environmental Services segment and $241.9 million of the goodwill recognized was allocated to Field & Industrial Services segment. We expect $33.3 million of the acquired goodwill to be deductible for income tax purposes. During the first quarter of 2020, management determined that the projected future cash flows of certain reporting units identified as part of the NRC Merger indicated that the fair value of the reporting units may be below their respective carrying amounts. Accordingly, we performed an interim assessment of each reporting unitās goodwill as of March 31, 2020. Based on the results of this assessment, we recognized goodwill impairment charges of $283.6 million related to our Environmental Services segment and $16.7 million related to our Field & Industrial Services segment in the first quarter of 2020. Refer to Note 10 for additional information. ā The preliminary fair value of identifiable intangible assets related to the acquisition of NRC by major intangible asset class and corresponding weighted average amortization period are as follows: ā ā ā ā ā ā ā ā ā ā ā ā Average ā ā ā ā ā Amortization $s in thousands Fair Value Period (Years) Amortizing intangible assets: ā ā ā ā ā Customer relationships - noncontractual ā $ 193,700 ā 14 Customer relationships - contractual ā ā 34,400 ā 7 Permits and licenses ā ā 8,700 ā 16 Tradenames ā ā 6,100 ā 2 Non-compete agreements ā ā 3,300 ā 2 Total identified amortizing intangible assets ā ā 246,200 ā ā Non-amortizing intangible assets: ā ā ā ā ā Permits and licenses ā ā 57,400 ā n/a Total identified intangible assets ā $ 303,600 ā ā ā The following unaudited pro forma financial information presents the combined results of operations as if NRC had been combined with US Ecology as of January 1, 2019. The pro forma financial information includes the accounting effects of the business combination, including the amortization of intangible assets, depreciation of property, plant and equipment, and interest expense. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented, nor should it be taken as indication of our future consolidated results of operations. ā ā ā ā ā ā ā ā ā ā (unaudited) ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2019 September 30, 2019 Pro forma combined: ā ā ā ā ā ā Revenue ā ā 268,597 ā ā 776,654 Net income ā ā 4,790 ā ā 8,095 ā The amounts of revenue and operating loss from NRC included in the Companyās consolidated statements of operations for the three months ended September 30, 2020 were $80.9 million and $6.9 million, respectively. The amounts of revenue and operating loss from NRC included in the Companyās consolidated statements of operations for the nine months ended September 30, 2020 were $238.0 million and $323.2 million, respectively. NRC Merger-related business development and integration expenses of $1.6 million and $7.4 million are included in Selling, general and administrative expenses in the Companyās consolidated statements of operations for the three and nine months ended September 30, 2020, respectively. W.I.S.E. Environmental Solutions Inc. ā On August 1, 2019, we acquired 100% of the outstanding shares of W.I.S.E. Environmental Solutions Inc. (āUS Ecology Sarniaā), an equipment rental and waste services company based in Sarnia, Ontario, Canada for 23.5 million Canadian dollars, which translated to $17.9 million U.S. dollars at the time of transaction and was funded with borrowings under the Credit Agreement. US Ecology Sarnia is reported as part of our Field & Industrial Services segment. The Company assessed the revenues, net income, earnings per share and total assets of US Ecology Sarnia and concluded they are not material to our consolidated financial position or results of operations. As such, pro forma financial information has not been provided. ā We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, resulting in $7.7 million allocated to goodwill and $6.2 million allocated to intangible assets (primarily customer relationships) to be amortized over a weighted average life of approximately 14 years. ā Goodwill of $7.7 million arising from the acquisition is attributable to the assembled workforce and the future economic benefits of synergies with our other regional facilities and expansion into new markets. All of the goodwill recognized was assigned to our Field & Industrial Services segment and is not expected to be deductible for income tax purposes. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 4. ACCUMULATED OTHER COMPREHENSIVE LOSS ā Changes in accumulated other comprehensive income (loss) (āAOCIā) consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā Foreign ā Unrealized Gain ā ā ā ā ā Currency ā (Loss) on Interest ā ā ā $s in thousands Translation Rate Hedge Total Balance at December 31, 2019 ā $ (10,925) ā $ (929) ā $ (11,854) Other comprehensive loss before reclassifications, net of tax ā (3,328) ā (10,074) ā (13,402) Amounts reclassified out of AOCI, net of tax (1) ā ā ā 1,721 ā 1,721 Other comprehensive loss, net ā (3,328) ā (8,353) ā (11,681) Balance at September 30, 2020 ā $ (14,253) ā $ (9,282) ā $ (23,535) (1) Before-tax reclassifications of $1.2 million ($921,000 after-tax) and $2.2 million ($1.7 million after-tax) for the three and nine months ended September 30, 2020, were included in Interest expense in the Companyās consolidated statements of operations. Amounts relate to the Companyās interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made or, for terminated swap agreements, amortized to interest expense over the period from termination to original maturity. Amounts in AOCI expected to be reclassified to interest expense over the next 12 months total approximately $4.1 million ($3.2 million after-tax). ā ā ā ā ā ā ā ā ā ā ā ā ā Foreign ā Unrealized Gain ā ā ā ā ā Currency ā (Loss) on Interest ā ā ā $s in thousands Translation Rate Hedge Total Balance at December 31, 2018 ā $ (14,697) ā $ 906 ā $ (13,791) Other comprehensive income (loss) before reclassifications, net of tax ā 2,374 ā (1,780) ā 594 Amounts reclassified out of AOCI, net of tax (2) ā ā ā (238) ā (238) Other comprehensive income (loss), net ā 2,374 ā (2,018) ā 356 Balance at September 30, 2019 ā $ (12,323) ā $ (1,112) ā $ (13,435) (2) Before-tax reclassifications of $35,000 ($27,000 after-tax) and $301,000 ($238,000 after-tax) for the three and nine months ended September 30, 2019, were included as a reduction of Interest expense in the Companyās consolidated statements of operations. Amounts relate to the Companyās interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made. |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 9 Months Ended |
Sep. 30, 2020 | |
CONCENTRATIONS AND CREDIT RISK | |
CONCENTRATIONS AND CREDIT RISK | NOTE 5. CONCENTRATIONS AND CREDIT RISK ā Major Customers ā No customer accounted for more than 10% of total revenue for the three or nine months ended September 30, 2020 or 2019, respectively. No customer accounted for more than 10% of total trade receivables as of September 30, 2020 or December 31, 2019. ā Credit Risk Concentration ā We maintain most of our cash and cash equivalents with nationally recognized financial institutions. Substantially all balances are uninsured and are not used as collateral for other obligations. Concentrations of credit risk on accounts receivable are believed to be limited due to the number, diversification and character of the obligors and our credit evaluation process. Credit risk associated with a portion of the Companyās trade receivables is reduced by our ability to submit claims to the Oil Spill Liability Trust Fund (āOSLTFā) for reimbursement of unpaid customer receivables related to services regulated under the provisions of the Oil Pollution Act of 1990 (āOPA 90ā). As of September 30, 2020, the Company did not have any trade receivables that are eligible for submission to the OSLTF for reimbursement. ā |
RECEIVABLES
RECEIVABLES | 9 Months Ended |
Sep. 30, 2020 | |
RECEIVABLES | |
RECEIVABLES | NOTE 6. RECEIVABLES ā Receivables consisted of the following: ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 Trade ā $ 174,569 ā $ 196,593 Unbilled revenue ā 48,055 ā 54,727 Other ā 7,275 ā 7,000 Total receivables ā 229,899 ā 258,320 Allowance for credit losses ā (2,297) ā (3,010) Receivables, net ā $ 227,602 ā $ 255,310 ā |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 7. FAIR VALUE MEASUREMENTS ā Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, as follows: ā Level 1 - Quoted prices in active markets for identical assets or liabilities; ā Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; ā Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability. The Companyās financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash and investments, accounts payable and accrued liabilities, debt, interest rate swap agreements and contingent consideration. The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to the short-term nature of these instruments. On September 19, 2019, the Company invested $7.9 million in the preferred stock of a privately held company which is included in Other assets in the Companyās consolidated balance sheets. The investment does not have a readily determinable fair value therefore the investment is valued at cost, less impairment, plus or minus observable price changes of an identical or similar investment of the same issuer, if any. As of September 30, 2020, there have been no identified events or changes in circumstances that would indicate the cost method investment should be impaired nor have there been any observable price changes of an identical or similar investment of the same issuer. The Company estimates the fair value of its variable-rate debt using Level 2 inputs, such as interest rates, related terms and maturities of similar obligations. At September 30, 2020, the fair value of the Companyās variable rate term loan was estimated to be $442.2 million, and the carrying value of the Companyās variable-rate revolving credit facility approximates fair value due to the short-term nature of the interest rates. The Company estimates the fair value of its contingent consideration liabilities using Level 3 inputs, including both observable and unobservable inputs. As a result, unrealized gains and losses may include changes in fair value that are attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. The Companyās assets and liabilities measured at fair value on a recurring basis consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā ā Quoted Prices in ā Other Observable ā Unobservable ā ā ā ā ā Active Markets ā Inputs ā Inputs ā ā ā $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Fixed-income securities (1) ā $ 2,424 ā $ 1,929 ā $ ā ā $ 4,353 Money market funds (2) ā ā 30,634 ā ā ā ā ā ā ā ā 30,634 Total ā $ 33,058 ā $ 1,929 ā $ ā ā $ 34,987 ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā ā ā ā ā ā ā Interest rate swap agreement (3) ā $ ā ā $ 12,584 ā $ ā ā $ 12,584 Contingent consideration (4) ā ā ā ā ā ā ā ā 2,896 ā ā 2,896 Total ā $ ā ā $ 12,584 ā $ 2,896 ā $ 15,480 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā Quoted Prices in ā Other Observable ā Unobservable ā ā ā ā ā Active Markets ā Inputs ā Inputs ā ā ā $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Fixed-income securities (1) ā $ 2,380 ā $ 1,830 ā $ ā ā $ 4,210 Money market funds (2) ā ā 859 ā ā ā ā ā ā ā ā 859 Total ā $ 3,239 ā $ 1,830 ā $ ā ā $ 5,069 ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā ā ā ā ā ā ā Interest rate swap agreement (3) ā $ ā ā $ 1,176 ā $ ā ā $ 1,176 Contingent consideration (4) ā ā ā ā ā ā ā ā 8,283 ā ā 8,283 Total ā $ ā ā $ 1,176 ā $ 8,283 ā $ 9,459 (1) We invest a portion of our Restricted cash and investments in fixed-income securities, including U.S. Treasury and U.S. agency securities. We measure the fair value of U.S. Treasury securities using quoted prices for identical assets in active markets. We measure the fair value of U.S. agency securities using observable market activity for similar assets. The fair value of our fixed-income securities approximates our cost basis in the investments. ā (2) We invest portions of our Cash and cash equivalents and Restricted cash and investments in money market funds. We measure the fair value of these money market fund investments using quoted prices for identical assets in active markets. The portion of Restricted cash and investments that is invested in money market funds is considered restricted cash for purposes of reconciling the beginning-of-period and end-of-period amounts presented in the Companyās consolidated statements of cash flows. ā (3) In order to manage interest rate exposure, we entered into an interest rate swap agreement in March 2020 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a highly-effective cash flow hedge, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of March 31, 2020 in an initial notional amount of $500.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated (i) at the contracted interest rates and (ii) at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other long-term liabilities in the Companyās consolidated balance sheet. ā (4) Our contingent consideration liabilities represent the estimated fair value of potential future payments the Company may be required to remit under the terms of historical purchase agreements entered into by NRC prior to the NRC Merger. The payments are contingent on the acquired businessesā achievement of annual earnings targets in certain years and other events considered in the purchase agreements. The fair value of our contingent consideration liabilities are calculated using either a Monte Carlo simulation or modified Black-Scholes analyses based on earnings projections for the respective earn-out periods, corresponding earnings thresholds, and approximate timing of payments as outlined in the purchase agreements. The analyses utilize the following assumptions: (i) expected term; (ii) risk-adjusted net sales or earnings; (iii) risk-free interest rate; and (iv) expected volatility of earnings. Estimated payments, as determined through the respective models, are discounted by a credit spread assumption to account for credit risk. At September 30, 2020, the fair value of our contingent consideration liability of $2.9 million was included in Accrued liabilities. At December 31, 2019, the fair value of our contingent consideration liabilities of $6.6 million and $1.7 million were included in Accrued liabilities and Other long-term liabilities, respectively. We revalue our contingent consideration payments each period and any increases or decreases to fair value are included in Selling, general and administrative expenses in our consolidated statements of operations. Fair values may be impacted by certain unobservable inputs, most significantly with regard to discount rates, expected volatility and historical and projected performance. Significant changes to these inputs in isolation could result in a significantly different fair value measurement. ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2020 September 30, 2020 Contingent consideration, beginning of period ā $ 2,657 ā $ 8,283 Change in fair value of contingent consideration ā ā 75 ā ā (3,207) Contingent consideration paid ā ā ā ā ā (2,085) Foreign currency translation ā 164 ā (95) Contingent consideration, end of period ā $ 2,896 ā $ 2,896 ā |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 8. PROPERTY AND EQUIPMENT ā Property and equipment consisted of the following: ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 Cell development costs ā $ 178,675 ā $ 174,561 Land and improvements ā 58,705 ā 52,909 Buildings and improvements ā 114,725 ā 109,580 Railcars ā 17,299 ā 17,299 Vehicles, vessels and other equipment ā 345,974 ā 317,472 Construction in progress ā 60,665 ā 61,537 Total property and equipment ā 776,043 ā 733,358 Accumulated depreciation and amortization ā (301,005) ā (254,590) Property and equipment, net ā $ 475,038 ā $ 478,768 ā Depreciation and amortization expense for the three months ended September 30, 2020 and 2019 was $18.4 million and $9.4 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2020 and 2019 was $54.8 million and $26.7 million, respectively. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
LEASES | |
LEASES | NOTE 9. LEASES ā We lease certain facilities, office space, land and equipment. Our lease payments are primarily fixed, but also include variable payments that are based on usage of the leased asset. Initial lease terms range from one may one None ā Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense is recognized on a straight-line basis over the lease term. We combine lease and non-lease components in our leases. We use the rate implicit in the lease, when available, to discount lease payments to present value. However, many of our leases do not provide a readily determinable implicit rate and we estimate our incremental borrowing rate to discount payments based on information available at lease commencement. ā Lease assets and liabilities consisted of the following: ā ā ā ā ā ā ā ā $s in thousands September 30, 2020 December 31, 2019 Assets: ā ā ā ā ā ā Operating right-of-use assets (1) ā $ 50,977 ā $ 57,396 Finance right-of-use assets (2) ā ā 22,426 ā ā 20,499 Total ā $ 73,403 ā $ 77,895 ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā Current: ā ā ā ā ā ā Operating (3) ā $ 17,175 ā $ 17,317 Finance (4) ā ā 4,706 ā ā 4,128 Long-term: ā ā ā ā ā ā Operating (5) ā ā 34,181 ā ā 39,954 Finance (6) ā ā 18,343 ā ā 16,308 Total ā $ 74,405 ā $ 77,707 (1) Included in Operating lease assets in the Companyās consolidated balance sheets. (2) Included in Property and equipment, net in the Companyās consolidated balance sheets. Finance right-of-use assets are recorded net of accumulated amortization of $6.7 million and $2.7 million as of September 30, 2020 and December 31, 2019, respectively. (3) Included in Current portion of operating lease liabilities in the Companyās consolidated balance sheets. (4) Included in Accrued liabilities in the Companyās consolidated balance sheets. (5) Included in Long-term operating lease liabilities in the Companyās consolidated balance sheets. (6) Included in Other long-term liabilities in the Companyās consolidated balance sheets. ā Lease expense consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā Nine Months Ended September 30, $s in thousands 2020 2019 2020 2019 Operating lease cost (1) ā $ 5,008 ā $ 1,691 ā $ 14,947 ā $ 5,146 Finance lease cost: ā ā ā ā ā ā ā ā ā ā ā ā Amortization of leased assets (2) ā ā 1,330 ā ā 249 ā ā 3,974 ā ā 725 Interest on lease liabilities (3) ā ā 292 ā ā 28 ā ā 925 ā ā 78 Total ā $ 6,630 ā $ 1,968 ā $ 19,846 ā $ 5,949 (1) Included in Direct operating costs and Selling, general, and administrative expenses in the Companyās consolidated statements of operations. Operating lease cost includes short-term leases, excluding expenses relating to leases with a term of one month or less, which are not material. Operating lease cost excludes variable lease costs which are not material. (2) Included in Direct operating costs in the Companyās consolidated statements of operations. (3) Included in Interest expense in the Companyās consolidated statements of operations. ā Supplemental cash flow information related to our leases is as follows: ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, $s in thousands 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: ā ā ā ā ā ā Operating cash flows from operating leases ā $ 14,547 ā $ 4,868 Operating cash flows from finance leases ā $ 925 ā $ 78 Financing cash flows from finance leases ā $ 3,457 ā $ 619 ā ā ā ā ā ā ā Non-cash investing and financing activities: ā ā ā ā ā ā Right-of-use assets obtained in exchange for new operating lease liabilities ā $ 7,195 ā $ 3,817 Right-of-use assets obtained in exchange for new finance lease liabilities ā $ 6,089 ā $ 1,844 ā |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 10. GOODWILL AND INTANGIBLE ASSETS ā Changes in goodwill for the nine months ended September 30, 2020 consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Services ā Services ā ā ā ā ā ā ā Accumulated ā ā ā Accumulated ā ā ā $s in thousands Gross Impairment Gross Impairment Total Balance at December 31, 2019 ā $ 475,271 ā $ (6,870) ā $ 298,579 ā $ ā ā $ 766,980 Impairment charges ā ā ā ā ā (283,600) ā ā ā ā ā (16,700) ā ā (300,300) NRC Merger purchase price allocation adjustment ā ā 2,875 ā ā ā ā ā 2,230 ā ā ā ā ā 5,105 Impact Environmental acquisition ā ā ā ā ā ā ā ā 300 ā ā ā ā ā 300 Foreign currency translation ā (390) ā ā ā ā (172) ā ā ā ā (562) Balance at September 30, 2020 ā $ 477,756 ā $ (290,470) ā $ 300,937 ā $ (16,700) ā $ 471,523 ā We assess goodwill for impairment during the fourth quarter as of October 1 of each year, and also if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ā In connection with our financial review and forecasting procedures performed during the first quarter of 2020, management determined that the projected future cash flows of our Energy Waste Disposal Services (āEWDSā) reporting unit and our International reporting unit (described below) indicated that the fair value of such reporting units may be below their respective carrying amounts. Accordingly, we performed an interim assessment of each reporting unitās fair value as of March 31, 2020 (the āInterim Assessmentā). Based on the results of the Interim Assessment, we recognized goodwill impairment charges of $283.6 million related to our EWDS reporting unit and $16.7 million related to our International reporting unit in the first quarter of 2020. As of September 30, 2020, after the recording these impairment charges, remaining goodwill balances for the EWDS and International reporting units were $28.1 million and $1.8 million, respectively. ā Our EWDS reporting unit, a component of our Environmental Services segment, provides energy-related services including solid and liquid waste treatment and disposal, equipment cleaning and maintenance, specialty equipment rental, spill containment and site remediation for a full complement of oil and gas waste streams, predominately to upstream energy customers currently concentrated in the Eagle Ford and Permian Basins in Texas. Our International reporting unit, a component of our Field & Industrial Services segment, provides industrial and emergency response services to the offshore oil and gas sector in the North Sea and land-based industries across the EMEA region. Both our EWDS and International reporting units are dependent on energy-related exploration and production investments and expenditures by our energy industry customers. Lower crude oil prices and the volatility of such prices affect the level of investment as it impacts the ability of energy companies to access capital on economically advantageous terms or at all. In addition, energy companies decrease investments when the projected profits are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices. Such reductions in capital spending negatively impact energy waste generation and therefore the demand for our services. Recent volatility and historically low oil prices have adversely impacted customers of our EWDS reporting unit and our International reporting unit, negatively affecting demand for our services. ā The principal factors contributing to the goodwill impairment charges for both the EWDS and International reporting units related to historically-low energy commodity prices reducing anticipated energy-related exploration and production investments and expenditures by our energy industry customers, which negatively impacted each reporting unitās prospective cash flows and each reporting unit's estimated fair value. A longer-than-expected recovery in crude oil pricing and energy-related exploration and production investments became evident during the first quarter of 2020 as we assessed the projected impact of the COVID-19 pandemic and foreign oil production increases on the global demand for oil and updated the long-term projections for each reporting unit which, as a result, decreased each reporting unitās anticipated future cash flows as compared to those estimated previously. The EWDS and International reporting units were acquired as part of the NRC Merger on November 1, 2019. As part of the preliminary purchase price allocation, the assets and liabilities of NRC were recorded at their preliminary fair value with the purchase price in excess of net fair value recorded as goodwill. Goodwill was allocated to the reporting units based on the relative preliminary fair value of each reporting unit to the total fair value of NRC. Consistent with our annual impairment testing methodology, we utilized a weighted average of (1) an income approach and (2) a market approach to determine the fair value of each of the reporting units for the Interim Assessment. The income approach is based on the estimated present value of future cash flows for each reporting unit. The market approach is based on assumptions about how market data relates to each reporting unit. Assessing impairment inherently involves management judgments as to the assumptions used to calculate fair value of the reporting units and the impact of market conditions on those assumptions. The key inputs that management uses in its assumptions to estimate the fair value of our reporting units under the income-based approach are as follows: ā Projected cash flows of the reporting unit, with consideration given to projected revenues, operating margins and the levels of capital investment required to generate the corresponding revenues; and ā Weighted average cost of capital (āWACCā), the risk-adjusted rate used to discount the projected cash flows. To develop the projected cash flows of our reporting units, management considers factors that may impact the revenue streams within each reporting unit. These factors include, but are not limited to, economic conditions on both a global scale and specifically in the regions in which the reporting units operate, customer relationships, strategic plans and opportunities, required returns on invested capital and competition from other service providers. With regard to operating margins, management considers its historical reporting unit operating margins on the revenue streams within each reporting unit, adjusting historical margins for the projected impact of current market trends on both fixed and variable costs. Expected future after-tax operating cash flows of each reporting unit are discounted to a present value using a risk-adjusted discount rate. Estimates of future cash flows require management to make significant assumptions regarding future operating performance including the projected mix of revenue streams within each reporting unit, projected operating margins, the amount and timing of capital investments and the overall probability of achieving the projected cash flows, as well as future economic conditions, which may result in actual future cash flows that are different than managementās estimates. The discount rate, which is intended to reflect the risks inherent in future cash flow projections, used in estimating the present value of future cash flows, is based on estimates of the WACC of market participants relative to the reporting units. Financial and credit market volatility can directly impact certain inputs and assumptions used to develop the WACC. The rapid and sustained decline in the energy markets served by our EWDS and International reporting units, exacerbated by the uncertainty surrounding the impact of the COVID-19 pandemic and foreign oil production increases, has inherently increased the risk associated with the future cash flows of these reporting units. Accordingly, when performing the Interim Assessment, we increased the discount rates and decreased the projected capital investment for each reporting unit compared to the assumptions used in the initial fair value assessment in connection with the NRC Merger on November 1, 2019. We believe these changes are reflective of market participant inputs in consideration of the current economic uncertainty. We also considered the estimated fair value of our EWDS and International reporting units under a market-based approach by applying industry-comparable multiples of revenues and operating earnings to reporting unit revenues and operating earnings. The lack of a broad base of publicly available market data specific to the industry in which we operate, combined with the general market volatility attributable to the COVID-19 pandemic, results in a wide range of currently observable market multiples. Accordingly, we applied less weight to the estimated fair value of our reporting units calculated under the market-based approach (10%) compared to the income approach (90%) described above. We believe that the discount rates, projected cash flows and other inputs and assumptions used in the Interim Assessment are consistent with those that a market participant would use based on the events described above and are reflective of the current market assessment of the fair value of our EWDS and International reporting units. In addition, we believe that our estimates and assumptions about future revenues and margin projections in the Interim Assessment were reasonable and consistent with the current economic uncertainty, both in general and specific to the energy markets served by our EWDS and International reporting units. During the three months ended September 30, 2020, we did not identify any events that occurred or circumstances that changed that would indicate the fair value of our EWDS and International reporting units may be below their respective carrying amounts. Accordingly, as of September 30, 2020, we believe the carrying values of our EWDS and International reporting units approximates their fair values. As such, there is a risk of additional goodwill impairment to either or both reporting units if future events related to the respective reporting unit are less favorable than what we have assumed or estimated in our Interim Assessment. We will continue to monitor events occurring or circumstances changing which may suggest that goodwill should be reevaluated during future interim periods prior to the annual impairment test. These events and circumstances include, but are not limited to, a further sustained decline in energy commodity prices and unanticipated impacts from the COVID-19 pandemic, as well as quantitative and qualitative factors specific to each reporting unit which indicate potential events that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Additionally, the carrying values of our EWDS and International reporting units are based on preliminary estimates of their acquisition date fair values. As such, changes to these preliminary fair value estimates may result in an adjustment, during the measurement period, to the impairment charges recognized in the first quarter of 2020. See Note 3 for additional information on the preliminary nature of the NRC Merger purchase price allocation. Intangible assets, net consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 ā ā ā ā ā Accumulated ā ā ā ā ā ā ā Accumulated ā ā ā $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits, licenses and lease ā $ 173,862 ā $ (21,648) ā $ 152,214 ā $ 174,339 ā $ (18,707) ā $ 155,632 Customer relationships ā ā 333,680 ā ā (54,745) ā ā 278,935 ā ā 333,090 ā ā (35,254) ā ā 297,836 Technology - formulae and processes ā 6,809 ā (2,132) ā 4,677 ā 6,964 ā (2,013) ā 4,951 Customer backlog ā 3,652 ā (2,296) ā 1,356 ā 3,652 ā (2,022) ā 1,630 Tradename ā 10,390 ā ā (7,269) ā ā 3,121 ā ā 10,390 ā ā (4,832) ā ā 5,558 Developed software ā ā 2,889 ā ā (2,097) ā ā 792 ā ā 2,895 ā ā (1,884) ā ā 1,011 Non-compete agreements ā 5,541 ā (3,721) ā 1,820 ā 5,455 ā (1,694) ā 3,761 Internet domain and website ā ā 536 ā ā (177) ā ā 359 ā ā 536 ā ā (156) ā ā 380 Database ā ā 386 ā ā (205) ā ā 181 ā ā 388 ā ā (191) ā ā 197 Total amortizing intangible assets ā 537,745 ā (94,290) ā 443,455 ā 537,709 ā (66,753) ā 470,956 Non-amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits and licenses ā 103,803 ā ā ā ā 103,803 ā 103,816 ā ā ā ā 103,816 Tradename ā 127 ā ā ā ā ā 127 ā 130 ā ā ā ā ā 130 Total intangible assets ā $ 641,675 ā $ (94,290) ā $ 547,385 ā $ 641,655 ā $ (66,753) ā $ 574,902 ā In connection with the interim goodwill impairment assessment of the EWDS and International reporting units in the first quarter of 2020, we also assessed the reporting unitsā finite-lived tangible and intangible assets for impairment as of March 31, 2020. Based on the results of the assessment, the carrying amounts of the finite-lived tangible and intangible assets did not exceed the estimated undiscounted cash flows of the asset groups and, as a result, no impairment charges were recorded in the first quarter of 2020. ā During the nine months ended September 30, 2020, the Company acquired Impact Environmental Services, Inc. and recorded $300,000 of goodwill and $900,000 of amortizing intangible assets (consisting primarily of customer relationships). See Note 3 for additional information. ā Amortization expense for the three months ended September 30, 2020 and 2019 was $9.2 million and $2.9 million, respectively. Amortization expense for the nine months ended September 30, 2020 and 2019 was $27.8 million and $8.6 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
DEBT | NOTE 11. DEBT ā Long-term debt consisted of the following: ā ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands 2020 2019 Revolving credit facility ā $ 387,000 ā $ 327,000 Term loan ā ā 446,625 ā ā 450,000 Unamortized term loan discount and debt issuance costs ā ā (6,943) ā ā (7,799) Total debt ā ā 826,682 ā ā 769,201 Current portion of long-term debt ā ā (3,359) ā ā (3,359) Long-term debt ā $ 823,323 ā $ 765,842 ā Credit Agreement ā On April 18, 2017, US Ecology Holdings, Inc. (f/k/a US Ecology, Inc.) (āPredecessor US Ecologyā), now a wholly-owned subsidiary of the Company, entered into a new senior secured credit agreement (as amended, restated, supplemented or otherwise modified through the date hereof, the āCredit Agreementā) with Wells Fargo Bank, National Association (āWells Fargoā), as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender, that provides for a $500.0 million, five-year revolving credit facility (the āRevolving Credit Facilityā), including a $75.0 million sublimit for the issuance of standby letters of credit and a $40.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The Credit Agreement also contains an accordion feature whereby Predecessor US Ecology may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. As described below, the Credit Agreement was amended in November 2019 in connection with the NRC Merger and further amended on June 26, 2020 pursuant to the Third Amendment (as defined below). ā The Revolving Credit Facility provides up to $500.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes (including acquisitions and capital expenditures). Except as modified by the Third Amendment as described below, under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the Credit Agreement) or the London Inter-Bank Offered Rate (āLIBORā), at the Companyās option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Credit Agreement), as set forth in the table below: ā ā ā ā Consolidated Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 3.25 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% ā During the nine months ended September 30, 2020, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap and the amortization of the loan discount and debt issuance costs, was 3.74%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable. ā Except as modified by the Third Amendment as described below, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to 0.35% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecologyās total net leverage ratio (as defined in the Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At September 30, 2020, there were $387.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (i) November 1, 2024 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (ii) the date of termination of the entire revolving credit commitment (as defined in the Credit Agreement) by us, and (iii) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets. ā Predecessor US Ecology has entered into a sweep arrangement whereby day-to-day cash requirements in excess of available cash balances are advanced to the Company on an as-needed basis with repayments of these advances automatically made from subsequent deposits to our cash operating accounts (the āSweep Arrangementā). Total advances outstanding under the Sweep Arrangement are subject to the $40.0 million swingline loan sublimit under the Revolving Credit Facility. Predecessor US Ecologyās revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of September 30, 2020, there were no borrowings outstanding subject to the Sweep Arrangement. ā As of September 30, 2020, the availability under the Revolving Credit Facility was $102.7 million with $10.3 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations. ā Predecessor US Ecology may at any time and from time to time prepay revolving credit loans and swingline loans, in whole or in part, without premium or penalty, subject to the obligation to indemnify each of the lenders against any actual loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR rate loan (as defined in the Credit Agreement) or from fees payable to terminate the deposits from which such funds were obtained) with respect to the early termination of any LIBOR rate loan. The Credit Agreement provides for mandatory prepayment at any time if the revolving credit outstanding exceeds the revolving credit commitment (as such terms are defined in the Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness. ā Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by Predecessor US Ecology and its domestic subsidiaries on April 18, 2017, Predecessor US Ecologyās obligations under the Credit Agreement are (or will be) jointly and severally and fully and unconditionally guaranteed on a senior basis by all of the Companyās existing and certain future domestic subsidiaries and are secured by substantially all of the assets of Predecessor US Ecology and the Companyās existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of the Companyās domestic subsidiaries and 65% of the voting equity interests of the Companyās directly owned foreign subsidiaries (and 100% of the non-voting equity interests of the Companyās directly owned foreign subsidiaries). ā The Credit Agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting the ability of the Company to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. Upon the occurrence of an event of default (as defined in the Credit Agreement), among other things, amounts outstanding under the Credit Agreement may be accelerated and the commitments may be terminated. ā The Credit Agreement also contains financial maintenance covenants, a maximum consolidated total net leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Credit Agreement). Except as further modified by the Third Amendment as described below, our consolidated total net leverage ratio as of the last day of the respective fiscal quarter, may not exceed the maximum consolidated total net leverage ratios set forth in the table below, subject to certain exceptions: ā Fiscal Quarter(s) Consolidated Total Net Leverage Ratio Fiscal Quarters ending June 30, 2017 through September 30, 2019 3.50:1.00 Fiscal Quarters ending December 31, 2019 and thereafter 4.00:1.00 ā Our consolidated interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2017, may not be less than 3.00 to 1.00. ā Amendments to the Credit Agreement ā On August 6, 2019, Predecessor US Ecology entered into the first amendment (the āFirst Amendmentā) to the Credit Agreement, by and among Predecessor US Ecology, the subsidiaries of Predecessor US Ecology party thereto, the lenders referred to therein and Wells Fargo, as issuing lender, swingline lender and administrative agent. Effective November 1, 2019, the First Amendment, among other things, extended the expiration of the Revolving Credit Facility to November 1, 2024, permitted the issuance of a $400.0 million incremental term loan to be used to refinance the indebtedness of NRC and pay related transaction expenses in connection with the NRC Merger, modified the accordion feature allowing Predecessor US Ecology to request up to the greater of (x) $250.0 million and (y) 100% of consolidated EBITDA plus certain additional amounts, increased the sublimit for the issuance of swingline loans to $40.0 million and increased the maximum consolidated total net leverage ratio to 4.00 to 1.00. ā On November 1, 2019, Predecessor US Ecology entered into the lender joinder agreement and second amendment (the āSecond Amendmentā) to the Credit Agreement. Effective November 1, 2019, the Second Amendment, among other things, amended the Credit Agreement to increase the capacity for incremental term loans by $50.0 million and provided for Wells Fargo lending $450.0 million in incremental term loans to Predecessor US Ecology to pay off the existing debt of NRC in connection with the NRC Merger, to pay certain fees, costs and expenses incurred in connection with the NRC Merger and to repay outstanding borrowings under the Revolving Credit Facility. The seven-year incremental term loan matures November 1, 2026, requires principal repayment of 1% annually, and bears interest at LIBOR plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moodyās). During the nine months ended September 30, 2020, the effective interest rate on the term loan, including the impact of the amortization of debt issuance costs, was 3.50%. ā On June 26, 2020, Predecessor US Ecology entered into the third amendment (the āThird Amendmentā) to the Credit Agreement. Among other things, the Third Amendment amended the Credit Agreement to provide a covenant relief period through the earlier of March 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein. During the covenant relief period, the Third Amendment increased Predecessor US Ecologyās consolidated total net leverage ratio requirement as of the end of each fiscal quarter to certain ratios above the 4.00 to 1.00 ratio in effect immediately before giving effect to the Third Amendment, subject to compliance with certain restrictions on restricted payments and permitted acquisitions during such covenant relief period. Furthermore, during the covenant relief period, under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the Credit Agreement) or LIBOR, at the Companyās option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Credit Agreement), as set forth in the table below: ā ā ā ā Consolidated Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 4.50 to 1.00 2.50% 1.50% Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00 2.25% 1.25% Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% ā Additionally, during the covenant relief period, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to 0.40% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecologyās total net leverage ratio (as defined in the Credit Agreement). ā At September 30, 2020, we were in compliance with all of the financial covenants in the Credit Agreement. ā Interest Rate Swap ā In March 2020, the Company entered into an interest rate swap agreement with Wells Fargo, effectively fixing the interest rate on $490.0 million, or approximately 59%, of the Revolving Credit Facility and term loan borrowings outstanding as of September 30, 2020. In connection with our entry into the March 2020 interest rate swap, we terminated our existing interest rate swap prior to its scheduled maturity date of June 2021. As the original hedged forecasted transaction (periodic interest payments on our variable-rate debt) remains probable, the $1.8 million net loss related to the terminated swap reported in AOCI at the termination date will be amortized as additional interest expense over its original maturity. |
CLOSURE AND POST-CLOSURE OBLIGA
CLOSURE AND POST-CLOSURE OBLIGATIONS | 9 Months Ended |
Sep. 30, 2020 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | NOTE 12. CLOSURE AND POST-CLOSURE OBLIGATIONS ā Our accrued closure and post-closure liability represents the expected future costs, including corrective actions, associated with closure and post-closure of our operating and non-operating disposal facilities. We record the fair value of our closure and post-closure obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For our individual landfill cells, the required closure and post-closure obligations under the terms of our permits and our intended operation of the landfill cell are triggered and recorded when the cell is placed into service and waste is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting waste. We perform periodic reviews of both non-operating and operating facilities and revise accruals for estimated closure and post-closure, remediation or other costs as necessary. Recorded liabilities are based on our best estimates of current costs and are updated periodically to include the effects of existing technology, presently enacted laws and regulations, inflation and other economic factors. ā Changes to closure and post-closure obligations consisted of the following: ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2020 ā September 30, 2020 Closure and post-closure obligations, beginning of period ā $ 88,046 ā $ 86,383 Accretion expense ā 1,279 ā 3,812 Payments ā (542) ā (1,340) Foreign currency translation ā 33 ā (39) Closure and post-closure obligations, end of period ā 88,816 ā 88,816 Less current portion ā (4,019) ā (4,019) Long-term portion ā $ 84,797 ā $ 84,797 ā |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 13. INCOME TAXES ā We account for our provision for income taxes in accordance with ASC 740, Income Taxes, which requires an estimate of the Annual Effective Tax Rate (āAETRā) for the full year to be applied to the interim period, taking into account year-to-date amounts and projected results for the full year. The provision for income taxes represents federal, foreign, state, and local income taxes. Our effective tax rate could fluctuate significantly from quarter to quarter based on recurring and nonrecurring factors including, but not limited to: variations in the estimated and actual level of pre-tax income or loss by jurisdiction; changes in enacted tax laws and regulations, and interpretations thereof, including with respect to tax credits and state and local income taxes; developments in tax audits and other matters; and certain nondeductible expenses. Changes in judgment from the evaluation of new information resulting in the recognition, derecognition, or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change ā Our effective tax rate for the three months ended September 30, 2020 was (29.9)%, down from 33.0% for the three months ended September 30, 2019. The decrease in our effective tax rate for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was primarily due to an income tax benefit upon the issuance of final regulations by the United States Treasury regarding taxation on foreign earnings. This benefit was partially offset by state income taxes and income tax expense on foreign earnings for the three months ended September 30, 2020. Our effective tax rate for the nine months ended September 30, 2020 was (0.2)%, down from 30.2% for the nine months ended September 30, 2019. The decrease in our effective tax rate for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 was primarily due to the tax benefit on year-to-date losses offset by non-deductible goodwill impairment charges, income tax expense on foreign earnings and decreased non-deductible expenses in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. ā Gross unrecognized tax benefits, included in Other long-term liabilities in the consolidated balance sheets, were $8.3 million as of September 30, 2020 and December 31, 2019, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $239,000 to the provision for income taxes thereby favorably impacting the Companyās effective tax rate. The remaining $8.1 million is related to the acquired NRC net operating losses and is recorded as a reduction to our net operating losses deferred tax asset. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Accrued interest and penalties related to unrecognized tax benefits are recorded in Interest expense and Selling, general and administrative expenses, respectively. The total accrued interest related to unrecognized tax benefits as of September 30, 2020 and December 31, 2019 were not significant. There is no ā The Company files income tax returns in the United States and various state, local and foreign jurisdictions. The Company is subject to examination by the IRS for tax years 2016 through 2019. The 2015 through 2019 state tax returns are subject to examination by state tax authorities. US Ecology Sarnia is currently under examination by the Canadian Revenue Agency for the pre-acquisition years 2016 and 2017. The tax years 2015 through 2019 remain subject to examination in our significant foreign jurisdictions. The Company does not anticipate any material change as a result of any current examinations in progress. ā |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | NOTE 14. EARNINGS (LOSS) PER SHARE ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā ā 2020 ā 2019 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income ā $ 6,319 ā $ 6,319 ā $ 13,070 ā $ 13,070 Weighted average basic shares outstanding ā 31,069 ā 31,069 ā 22,013 ā 22,013 ā ā ā ā ā ā ā ā ā ā ā ā ā Dilutive effect of share-based awards and warrants ā ā ā ā 255 ā ā ā ā 218 Weighted average diluted shares outstanding ā ā ā ā 31,324 ā ā ā ā 22,231 ā ā ā ā ā ā ā ā ā ā ā ā ā Earnings per share ā $ 0.20 ā $ 0.20 ā $ 0.59 ā $ 0.59 Anti-dilutive shares excluded from calculation ā ā ā ā 4,233 ā ā ā ā 80 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, ā ā 2020 ā 2019 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net (loss) income ā $ (296,950) ā $ (296,950) ā $ 36,604 ā $ 36,604 Weighted average basic shares outstanding ā 31,142 ā 31,142 ā 22,002 ā 22,002 ā ā ā ā ā ā ā ā ā ā ā ā ā Dilutive effect of share-based awards ā ā ā ā ā ā ā ā ā 210 Weighted average diluted shares outstanding ā ā ā ā 31,142 ā ā ā ā 22,212 ā ā ā ā ā ā ā ā ā ā ā ā ā Loss (earnings) per share ā $ (9.54) ā $ (9.54) ā $ 1.66 ā $ 1.65 Anti-dilutive shares excluded from calculation ā ā ā ā 4,208 ā ā ā ā 84 ā |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
EQUITY | |
EQUITY | NOTE 15. EQUITY ā Stock Repurchase Program ā On June 1, 2016, the Companyās Board of Directors authorized the repurchase of up to $25.0 million of the Companyās outstanding common stock. On May 29, 2018, the repurchase program was extended. On December 30, 2019, the Companyās Board of Directors authorized the repurchase of up to $25.0 million of the Companyās outstanding warrants (such dollar amount considered in the aggregate with the dollar amount of shares of common stock repurchased by the Company, if any, under the Companyās share repurchase program) as part of the Companyās share repurchase program. On June 6, 2020, our authorization by the Companyās Board of Directors to repurchase the Companyās outstanding shares of common stock and warrants under the share repurchase program expired. In the future, the Board of Directors may consider reauthorizing the repurchase program at any time, and the timing of any future repurchases of common stock or warrants will be based upon prevailing market conditions and other factors. The Company may from time to time also consider other options for repurchasing some or all of its warrants, including but not limited to a tender offer for all of the outstanding warrants. During the nine months ended September 30, 2020, the Company repurchased 397,600 shares of common stock in an aggregate amount of $17.3 million under the repurchase program. ā Omnibus Incentive Plan ā On May 27, 2015, the stockholders of Predecessor US Ecology approved the Omnibus Incentive Plan (as amended, āOmnibus Planā), which was approved by Predecessor US Ecologyās Board of Directors on April 7, 2015. In connection with the closing of the NRC Merger, the Company assumed the Omnibus Plan by adopting the Amended and Restated US Ecology, Inc. Omnibus Incentive Plan for the purposes of issuing replacement awards to award recipients under the Omnibus Plan pursuant to the Merger Agreement and for the issuance of additional awards in the future. The Omnibus Plan was developed to provide additional incentives through equity ownership in US Ecology and, as a result, encourage employees and directors to contribute to our success. The Omnibus Plan provides, among other things, the ability for the Company to grant restricted stock, performance stock, options, stock appreciation rights, restricted stock units, performance stock units and other share-based awards or cash awards to officers, employees, consultants and non-employee directors. The Omnibus Plan expires on April 7, 2025 and authorizes 1,500,000 shares of common stock for grant over the life of the Omnibus Plan. As of September 30, 2020, 543,895 shares of common stock remain available for grant under the Omnibus Plan. Subsequent to the approval of the Omnibus Plan by Predecessor US Ecology in May 2015, we stopped granting equity awards under our 2008 Stock Option Incentive Plan (ā2008 Stock Option Planā). However, in connection with the closing of the NRC Merger, the Company assumed the 2008 Stock Option Plan for the purpose of issuing replacement awards to award recipients thereunder and will remain in effect solely for the settlement of awards granted under such plan. No shares that are reserved but unissued under the 2008 Stock Option Plan or that are outstanding under the 2008 Stock Option Plan and reacquired by the Company for any reason will be available for issuance under the Omnibus Plan. In addition, in connection with the closing of the NRC Merger, the Company assumed the NRC Group Holdings Corp. 2018 Equity Incentive Plan previously maintained by NRC by adopting the Amended and Restated US Ecology, Inc. 2018 Equity and Incentive Compensation Plan. Like the 2008 Stock Option Plan, the NRC Group Holdings Corp. 2018 Equity Incentive Plan was assumed by the Company solely for the purpose of issuing replacement awards to award recipients pursuant to the Merger Agreement, and no future grants may be made under the 2018 Equity and Incentive Compensation Plan. ā PSUs, RSUs and Restricted Stock ā On January 24, 2020, the Company granted 5,358 PSUs to certain employees. Each PSU represents the right to receive, on the settlement date, one share of the Companyās common stock. The actual number of PSUs that will vest and be settled in shares is determined based on the achievement of certain milestones. The fair value of the PSUs estimated on the grant date was $54.55 per unit. Compensation expense is recorded over the awardsā milestone measurement period. ā On July 16, 2020, the Company granted 51,922 PSUs to certain employees. Each PSU represents the right to receive, on the settlement date, one share of the Companyās common stock. The total number of PSUs each participant is eligible to earn ranges from 0% to 200% of the target number of PSUs granted. The actual number of PSUs that will vest and be settled in shares is determined at the end of a 2.5-year performance period beginning July 1, 2020, based on the Companyās total shareholder return relative to a set of peer companies. The fair value of the PSUs estimated on the grant date using a Monte Carlo simulation was $42.47 per unit. Compensation expense is recorded over the awardsā vesting period. ā Assumptions used in the Monte Carlo simulation to calculate the fair value of the PSUs granted on July 16, 2020 are as follows: ā ā ā ā ā ā ā July 16, 2020 Stock price on grant date ā $ 32.89 ā Expected term ā 2.5 years Expected volatility ā ā 40.6 % Risk-free interest rate ā 0.2 % ā A summary of our PSU, restricted stock and RSU activity for the nine months ended September 30, 2020 is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PSUs ā Restricted Stock ā RSUs ā ā ā ā Weighted ā ā ā Weighted ā ā ā Weighted ā ā ā ā Average ā ā ā Average ā ā ā Average ā ā ā ā Grant Date ā ā ā Grant Date ā ā ā Grant Date ā Shares Fair Value Shares Fair Value Shares Fair Value Outstanding as of December 31, 2019 42,711 ā $ 61.11 64,654 ā $ 55.62 ā 131,199 ā $ 59.05 Granted 57,350 ā ā 43.60 51,700 ā ā 48.35 ā 111,830 ā ā 33.21 Vested (11,929) ā 62.17 (43,588) ā 53.93 ā (57,674) ā 57.89 Cancelled, expired or forfeited ā ā ā ā ā ā ā (18,635) ā 57.63 Outstanding as of September 30, 2020 88,132 ā $ 49.57 72,766 ā $ 51.47 ā 166,720 ā $ 42.28 ā During the nine months ended September 30, 2020, 11,929 PSUs vested and PSU holders earned 7,226 shares of the Companyās common stock. ā Stock Options ā A summary of our stock option activity for the nine months ended September 30, 2020 is as follows: ā ā ā ā ā ā ā ā ā ā ā Weighted ā ā ā ā Average ā ā ā ā Exercise ā Shares Price Outstanding as of December 31, 2019 293,588 ā $ 48.23 Granted 78,700 ā ā 54.20 Exercised (6,880) ā 34.69 Cancelled, expired or forfeited (8,375) ā 42.89 Outstanding as of September 30, 2020 357,033 ā $ 49.93 Exercisable as of September 30, 2020 240,303 ā $ 47.06 ā During the nine months ended September 30, 2020, option holders tendered 3,738 options in connection with options exercised via net share settlement. ā Treasury Stock ā During the nine months ended September 30, 2020, the Company repurchased 17,169 shares of the Companyās common stock in connection with the net share settlement of employee equity awards at an average cost of $57.91 per share and repurchased 397,600 shares of the Companyās common stock under our stock repurchase program at an average cost of $43.61 per share. ā Dividends ā On March 31, 2020, the Board of Directors approved a plan to suspend quarterly cash dividends, beginning with the second quarter of 2020. The Company did not of $0.18 per common share and $0.54 per common share during the nine months ended September 30, 2020 and 2019, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 16. COMMITMENTS AND CONTINGENCIES ā Litigation and Regulatory Proceedings ā In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters. In December 2010, National Response Corporation, a subsidiary of NRC acquired by the Company in the NRC Merger, was named as one of many āDispersant Defendantsā in multi-district litigation, arising out of the explosion of the BP Deepwater Horizon (āBPā) oil rig, filed in the U.S. District Court for the Eastern District of Louisiana (ā In re Deepwater Horizon In January 2019, Kevin Sullivan, a driver for NRC from May 1, 2018 to August 22, 2018 filed a class action complaint against NRC in California Superior Court ( Kevin Sullivan et. Al. v. National Response Corp., NRC Environmental Services, Inc. and Paul Taveira et al. claims without prejudice and proceed solely with the PAGA claim. Unlike class claims, PAGA claims cannot be waived by an employeeās agreement to individual arbitration; therefore, the case is proceeding as a pure representative PAGA claim only, absent any individual or class claims against the Company or NRC. The parties participated in a confidential mediation on August 3, 2020, and reached a settlement resolving the pending PAGA claim, subject to court approval of such settlement agreement. On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facilityās primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. In addition to initiating and conducting our own investigation into the incident, we fully cooperated with the Idaho Department of Environmental Quality, the U.S. Environmental Protection Agency and the Occupational Safety and Health Administration (āOSHAā) to support their comprehensive and independent investigations of the incident. On January 10, 2020, we entered into a settlement agreement with OSHA settling a complaint made by OSHA relating to the incident for $50,000. On January 28, 2020, the Occupational Safety and Health Review Commission issued an order terminating the proceeding relating to such OSHA complaint. We maintain workersā compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion in excess of our deductibles are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses. ā The Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The Company recognized insurance recoveries of $462,000 for the nine months ended September 30, 2020, related to expenses incurred to continue limited operations at the facility. ā Other than as described above, during the period covered by this Quarterly Report on Form 10-Q, we have not been a party to any material legal proceedings. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENTS | |
OPERATING SEGMENTS | NOTE 17. OPERATING SEGMENTS ā Financial Information by Segment ā Our operations are managed in two reportable segments reflecting our internal management reporting structure and nature of services offered as follows: ā Environmental Services ā Field & Industrial Services ā The operations not managed through our two reportable segments are recorded as āCorporate.ā Corporate selling, general and administrative expenses include typical corporate items such as legal, accounting and other items of a general corporate nature. Income taxes are assigned to Corporate, but all other items are included in the segment where they originated. Inter-company transactions have been eliminated from the segment information and are not significant between segments. ā Summarized financial information of our reportable segments is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 112,427 ā $ 125,715 ā $ ā ā $ 238,142 Depreciation, amortization and accretion ā $ 16,003 ā $ 12,129 ā $ 760 ā $ 28,892 Capital expenditures ā $ 6,459 ā $ 2,531 ā $ 177 ā $ 9,167 Total assets ā $ 989,227 ā $ 859,511 ā $ 97,557 ā $ 1,946,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 122,212 ā $ 45,190 ā $ ā ā $ 167,402 Depreciation, amortization and accretion ā $ 10,790 ā $ 2,319 ā $ 358 ā $ 13,467 Capital expenditures ā $ 12,188 ā $ 1,018 ā $ 579 ā $ 13,785 Total assets ā $ 750,915 ā $ 167,996 ā $ 81,238 ā $ 1,000,149 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 349,582 ā $ 343,198 ā $ ā ā $ 692,780 Depreciation, amortization and accretion ā $ 47,976 ā $ 36,420 ā $ 2,059 ā $ 86,455 Capital expenditures ā $ 28,062 ā $ 12,997 ā $ 4,065 ā $ 45,124 Total assets ā $ 989,227 ā $ 859,511 ā $ 97,557 ā $ 1,946,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 327,389 ā $ 126,852 ā $ ā ā $ 454,241 Depreciation, amortization and accretion ā $ 30,793 ā $ 6,601 ā $ 1,259 ā $ 38,653 Capital expenditures ā $ 33,485 ā $ 3,126 ā $ 1,832 ā $ 38,443 Total assets ā $ 750,915 ā $ 167,996 ā $ 81,238 ā $ 1,000,149 ā Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (āAdjusted EBITDAā) ā Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash property and equipment impairment charges, non-cash goodwill impairment charges, gain on property insurance recoveries, business development and integration expenses and other income/expense. In 2019, we updated our Adjusted EBITDA definition to include adjustments for business development and integration expenses and gain on property insurance recoveries. Throughout this Quarterly Report on Form 10-Q, our Adjusted EBITDA results for all periods presented have been recast to reflect these adjustments. Adjusted EBITDA is a complement to results provided in accordance with GAAP and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Companyās operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are: ā Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; ā Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt; ā Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes; ā Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; ā Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and ā Adjusted EBITDA does not reflect our business development and integration expenses. ā A reconciliation of Net income to Adjusted EBITDA is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā Nine Months Ended September 30, $s in thousands 2020 2019 2020 2019 Net income (loss) ā $ 6,319 ā $ 13,070 ā $ (296,950) ā $ 36,604 Income tax (benefit) expense ā ā (1,456) ā ā 6,428 ā ā 542 ā ā 15,864 Interest expense ā ā 7,964 ā ā 3,891 ā ā 25,127 ā ā 11,509 Interest income ā ā (9) ā ā (158) ā ā (251) ā ā (567) Foreign currency loss ā ā 421 ā ā 90 ā ā 155 ā ā 613 Other income ā ā (86) ā ā (110) ā ā (382) ā ā (342) Property and equipment impairment charges ā ā ā ā ā ā ā ā ā ā ā 25 Goodwill impairment charges ā ā ā ā ā ā ā ā 300,300 ā ā ā Depreciation and amortization of plant and equipment ā ā 18,435 ā ā 9,402 ā ā 54,831 ā ā 26,656 Amortization of intangible assets ā ā 9,178 ā ā 2,926 ā ā 27,812 ā ā 8,600 Share-based compensation ā ā 1,773 ā ā 1,246 ā ā 4,861 ā ā 3,713 Accretion and non-cash adjustment of closure & post-closure liabilities ā ā 1,279 ā ā 1,139 ā ā 3,812 ā ā 3,397 Gain on property insurance recoveries ā ā ā ā ā (498) ā ā ā ā ā (9,651) Business development and integration expenses ā ā 1,627 ā ā 4,025 ā ā 7,507 ā ā 6,696 Adjusted EBITDA ā $ 45,445 ā $ 41,451 ā $ 127,364 ā $ 103,117 ā Adjusted EBITDA, by operating segment, is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, Nine Months Ended September 30, $s in thousands ā 2020 2019 ā 2020 2019 Environmental Services $ 44,287 ā $ 51,409 $ 133,826 ā $ 133,725 Field & Industrial Services 21,340 ā 5,848 49,082 ā 13,424 Corporate (20,182) ā (15,806) (55,544) ā (44,032) Total $ 45,445 ā $ 41,451 $ 127,364 ā $ 103,117 ā Property and Equipment and Intangible Assets Outside of the United States ā We provide services primarily in the United States, Canada and the EMEA region. Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows: ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 United States ā $ 922,020 ā $ 954,102 Canada ā 65,893 ā 70,691 EMEA ā ā 20,374 ā ā 23,587 Other (1) ā ā 14,136 ā ā 5,290 Total long-lived assets ā $ 1,022,423 ā $ 1,053,670 (1) Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions. |
GENERAL (Policies)
GENERAL (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
GENERAL | |
Basis of Presentation | Basis of Presentation ā The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All inter-company balances have been eliminated. Throughout these consolidated financial statements words such as āwe,ā āus,ā āour,ā āUS Ecologyā and āthe Companyā refer to US Ecology, Inc. and its subsidiaries. ā In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (āSECā). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (āGAAPā) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Companyās Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2020. ā The Companyās consolidated balance sheet as of December 31, 2019 has been derived from the Companyās audited consolidated balance sheet as of that date. |
Use of Estimates | Use of Estimates ā The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements ā In December 2019, the FASB issued ASU No. 2019-12, āIncome Taxesā (Topic 740): Simplifying the Accounting for Income Taxes (āASU 2019-12ā), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, āFinancial Instruments - Credit Lossesā (Topic 326), which became effective for reporting periods beginning after December 15, 2019. The standard replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company adopted the new credit loss standard effective January 1, 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners, and external market factors. The Company will continue to actively monitor the impact of the recent coronavirus (āCOVID-19ā) pandemic on expected credit losses. |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
REVENUES | |
Schedule of disaggregation of revenues | ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 91,226 ā $ 13,861 ā $ 105,087 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 21,201 ā ā 11,162 ā ā 32,363 Industrial Services (3) ā ā ā ā ā 28,464 ā ā 28,464 Small Quantity Generation (4) ā ā ā ā ā 13,056 ā ā 13,056 Total Waste Management (5) ā ā ā ā ā 9,998 ā ā 9,998 Remediation (6) ā ā ā ā ā 6,733 ā ā 6,733 Emergency Response (7) ā ā ā ā ā 30,120 ā ā 30,120 Domestic Standby Services (8) ā ā ā ā ā 7,873 ā ā 7,873 Other (9) ā ā ā ā ā 4,448 ā ā 4,448 Revenue ā $ 112,427 ā $ 125,715 ā $ 238,142 ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 98,554 ā $ 3,312 ā $ 101,866 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 23,658 ā ā 12,070 ā ā 35,728 Industrial Services (3) ā ā ā ā ā 4,850 ā ā 4,850 Small Quantity Generation (4) ā ā ā ā ā 10,001 ā ā 10,001 Total Waste Management (5) ā ā ā ā ā 8,674 ā ā 8,674 Remediation (6) ā ā ā ā ā 1,388 ā ā 1,388 Emergency Response (7) ā ā ā ā ā 3,294 ā ā 3,294 Other (9) ā ā ā ā ā 1,601 ā ā 1,601 Revenue ā $ 122,212 ā $ 45,190 ā $ 167,402 ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 282,231 ā $ 33,744 ā $ 315,975 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 67,351 ā ā 22,577 ā ā 89,928 Industrial Services (3) ā ā ā ā ā 85,528 ā ā 85,528 Small Quantity Generation (4) ā ā ā ā ā 35,292 ā ā 35,292 Total Waste Management (5) ā ā ā ā ā 25,315 ā ā 25,315 Remediation (6) ā ā ā ā ā 21,911 ā ā 21,911 Emergency Response (7) ā ā ā ā ā 78,308 ā ā 78,308 Domestic Standby Services (8) ā ā ā ā ā 25,441 ā ā 25,441 Other (9) ā ā ā ā ā 15,082 ā ā 15,082 Revenue ā $ 349,582 ā $ 343,198 ā $ 692,780 ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Treatment & Disposal Revenue (1) ā $ 266,646 ā $ 9,241 ā $ 275,887 Services Revenue: ā ā ā ā ā ā ā ā ā Transportation and Logistics (2) ā ā 60,743 ā ā 31,922 ā ā 92,665 Industrial Services (3) ā ā ā ā ā 15,830 ā ā 15,830 Small Quantity Generation (4) ā ā ā ā ā 27,516 ā ā 27,516 Total Waste Management (5) ā ā ā ā ā 25,393 ā ā 25,393 Remediation (6) ā ā ā ā ā 4,003 ā ā 4,003 Emergency Response (7) ā ā ā ā ā 9,520 ā ā 9,520 Other (9) ā ā ā ā ā 3,427 ā ā 3,427 Revenue ā $ 327,389 ā $ 126,852 ā $ 454,241 ā (1) We categorize our treatment and disposal revenue as either āBase Businessā or āEvent Businessā based on the underlying nature of the revenue source. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business. For the three months ended September 30, 2020 and 2019, 30% and 25% , respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 70% and 75% of our treatment and disposal revenue for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, 28% and 22% , respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 72% and 78% of our treatment and disposal revenue for the nine months ended September 30, 2020 and 2019, respectively. (2) Includes collection and transportation of non-hazardous and hazardous waste. (3) Includes industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, marine terminals and refinery services such as tank cleaning and temporary storage. (4) Includes retail services, laboratory packing, less-than-truck-load service and household hazardous waste collection. Contracts for Small Quantity Generation may extend beyond one year and a portion of the transaction price can be fixed. (5) Through our total waste management (āTWMā) program, customers outsource the management of their waste compliance program to us, allowing us to organize and coordinate their waste management disposal activities and environmental compliance. TWM contracts may extend beyond one year and a portion of the transaction price can be fixed. (6) Includes site assessment, onsite treatment, project management and remedial action planning and execution. Contracts for Remediation may extend beyond one year and a portion of the transaction price can be fixed. (7) Includes spill response, waste analysis and treatment and disposal planning. (8) We provide government-mandated, commercial standby oil spill compliance solutions to companies that store, transport, produce or handle petroleum and certain nonpetroleum oils on or near U.S. waters. Our standby services customers pay annual retainer fees under long-term or evergreen contracts for access to our regulatory certifications, specialized assets and highly trained personnel. When a customer with a retainer contract experiences a spill incident, we coordinate and manage the spill response, which results in incremental revenue for the services provided, in addition to the retainer fees. (9) Includes equipment rental and other miscellaneous services. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Services Services Total United States ā $ 94,659 ā $ 119,610 ā $ 214,269 ā $ 99,554 ā $ 44,332 ā $ 143,886 Canada ā ā 17,768 ā ā 991 ā ā 18,759 ā ā 22,658 ā ā 858 ā ā 23,516 EMEA ā ā ā ā ā 4,195 ā ā 4,195 ā ā ā ā ā ā ā ā ā Other (1) ā ā ā 919 ā 919 ā ā ā ā ā ā Total revenue ā $ 112,427 ā $ 125,715 ā $ 238,142 ā $ 122,212 ā $ 45,190 ā $ 167,402 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Environmental ā Industrial ā ā ā $s in thousands Services Services Total Services Services Total United States ā $ 296,297 ā $ 322,811 ā $ 619,108 ā $ 262,699 ā $ 125,994 ā $ 388,693 Canada ā 53,285 ā 2,566 ā 55,851 ā 64,690 ā 858 ā 65,548 EMEA ā ā ā ā ā 13,349 ā ā 13,349 ā ā ā ā ā ā ā ā ā Other (1) ā ā ā ā ā 4,472 ā ā 4,472 ā ā ā ā ā ā ā ā ā Total revenue ā $ 349,582 ā $ 343,198 ā $ 692,780 ā $ 327,389 ā $ 126,852 ā $ 454,241 ā (1) Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions. ā |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of preliminary fair value of identifiable intangible assets related to the acquisition of NRCG | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 ā ā ā ā ā Accumulated ā ā ā ā ā ā ā Accumulated ā ā ā $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits, licenses and lease ā $ 173,862 ā $ (21,648) ā $ 152,214 ā $ 174,339 ā $ (18,707) ā $ 155,632 Customer relationships ā ā 333,680 ā ā (54,745) ā ā 278,935 ā ā 333,090 ā ā (35,254) ā ā 297,836 Technology - formulae and processes ā 6,809 ā (2,132) ā 4,677 ā 6,964 ā (2,013) ā 4,951 Customer backlog ā 3,652 ā (2,296) ā 1,356 ā 3,652 ā (2,022) ā 1,630 Tradename ā 10,390 ā ā (7,269) ā ā 3,121 ā ā 10,390 ā ā (4,832) ā ā 5,558 Developed software ā ā 2,889 ā ā (2,097) ā ā 792 ā ā 2,895 ā ā (1,884) ā ā 1,011 Non-compete agreements ā 5,541 ā (3,721) ā 1,820 ā 5,455 ā (1,694) ā 3,761 Internet domain and website ā ā 536 ā ā (177) ā ā 359 ā ā 536 ā ā (156) ā ā 380 Database ā ā 386 ā ā (205) ā ā 181 ā ā 388 ā ā (191) ā ā 197 Total amortizing intangible assets ā 537,745 ā (94,290) ā 443,455 ā 537,709 ā (66,753) ā 470,956 Non-amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits and licenses ā 103,803 ā ā ā ā 103,803 ā 103,816 ā ā ā ā 103,816 Tradename ā 127 ā ā ā ā ā 127 ā 130 ā ā ā ā ā 130 Total intangible assets ā $ 641,675 ā $ (94,290) ā $ 547,385 ā $ 641,655 ā $ (66,753) ā $ 574,902 |
NRC | |
Summary of total merger consideration | ā ā ā ā ā ā ā November 1, $s in thousands 2019 Fair value of US Ecology common stock issued (1) ā $ 581,101 Fair value of replacement warrants issued (2) ā 44,858 Fair value of replacement restricted stock units issued (3) ā 141 Fair value of replacement stock options (4) ā 360 Repayment of NRCās term loan and revolving credit facility ā 398,373 Total merger consideration ā $ 1,024,833 (1) The fair value of US Ecology common stock issued was calculated based on 9,337,949 shares of US Ecology common stock multiplied by the closing price of US Ecology common stock of $62.23 per share on October 31, 2019, the day immediately preceding the closing of the NRC Merger. (2) The fair value of replacement warrants issued was calculated based on 3,772,753 replacement warrants multiplied by the fair value per warrant of $11.89 . The fair value per warrant was based on the closing price of the replaced NRC warrants (NYSE: NRCG.WS) of $2.33 on October 31, 2019, the day immediately preceding the closing of the NRC Merger, divided by the exchange ratio of 0.196 pursuant to that certain Agreement and Plan of Merger, dated as of June 23, 2019, by and among the Company, US Ecology Holdings, Inc. (formerly known as US Ecology, Inc.), ECOL Merger Sub, Inc., NRC and Rooster Merger Sub, Inc. (the āMerger Agreementā). (3) The fair value of replacement restricted stock units issued was calculated based on 118,239 replacement restricted stock units multiplied by the closing price of US Ecology common stock of $62.23 per share on October 31, 2019, the day immediately preceding the closing of the NRC Merger, further multiplied by the ratio of the precombination service period to the remaining vesting period, or approximately 1.9% . (4) The fair value of replacement stock options issued was calculated based on 29,400 replacement stock options multiplied by the fair value per option of $12.26 . The fair value per option was calculated using the Black-Scholes option pricing model, with the following weighted-average assumptions: strike price of $52.30 per option, dividend yield of 1.2% ; expected volatility of 28.9% ; average risk-free interest rate of 1.5% ; and an expected term of 1 year. The replacement stock options became fully vested at the merger date therefore the entire fair value is considered merger consideration. |
Summary of preliminary fair value estimates of assets acquired and liabilities assumed | ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā ā September 30, $s in thousands 2019 Adjustments 2020 Current assets ā $ 131,653 ā $ ā ā $ 131,653 Property and equipment ā ā 197,045 ā ā ā ā ā 197,045 Identifiable intangible assets ā ā 303,600 ā ā ā ā ā 303,600 Other assets ā ā 41,687 ā ā ā ā ā 41,687 Current liabilities ā ā (83,460) ā ā (5,776) ā ā (89,236) Deferred income tax liabilities ā ā (56,596) ā ā 671 ā ā (55,925) Other liabilities ā ā (57,581) ā ā ā ā ā (57,581) Total identifiable net assets ā ā 476,348 ā ā (5,105) ā ā 471,243 Goodwill ā ā 548,485 ā ā 5,105 ā ā 553,590 Total purchase price ā $ 1,024,833 ā $ ā ā $ 1,024,833 |
Schedule of preliminary fair value of identifiable intangible assets related to the acquisition of NRCG | ā ā ā ā ā ā ā ā ā ā ā ā Average ā ā ā ā ā Amortization $s in thousands Fair Value Period (Years) Amortizing intangible assets: ā ā ā ā ā Customer relationships - noncontractual ā $ 193,700 ā 14 Customer relationships - contractual ā ā 34,400 ā 7 Permits and licenses ā ā 8,700 ā 16 Tradenames ā ā 6,100 ā 2 Non-compete agreements ā ā 3,300 ā 2 Total identified amortizing intangible assets ā ā 246,200 ā ā Non-amortizing intangible assets: ā ā ā ā ā Permits and licenses ā ā 57,400 ā n/a Total identified intangible assets ā $ 303,600 ā ā |
Schedule of unaudited pro forma financial information | ā ā ā ā ā ā ā ā ā ā (unaudited) ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2019 September 30, 2019 Pro forma combined: ā ā ā ā ā ā Revenue ā ā 268,597 ā ā 776,654 Net income ā ā 4,790 ā ā 8,095 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of changes in accumulated other comprehensive income (loss) | ā ā ā ā ā ā ā ā ā ā ā ā ā Foreign ā Unrealized Gain ā ā ā ā ā Currency ā (Loss) on Interest ā ā ā $s in thousands Translation Rate Hedge Total Balance at December 31, 2019 ā $ (10,925) ā $ (929) ā $ (11,854) Other comprehensive loss before reclassifications, net of tax ā (3,328) ā (10,074) ā (13,402) Amounts reclassified out of AOCI, net of tax (1) ā ā ā 1,721 ā 1,721 Other comprehensive loss, net ā (3,328) ā (8,353) ā (11,681) Balance at September 30, 2020 ā $ (14,253) ā $ (9,282) ā $ (23,535) (1) Before-tax reclassifications of $1.2 million ($921,000 after-tax) and $2.2 million ($1.7 million after-tax) for the three and nine months ended September 30, 2020, were included in Interest expense in the Companyās consolidated statements of operations. Amounts relate to the Companyās interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made or, for terminated swap agreements, amortized to interest expense over the period from termination to original maturity. Amounts in AOCI expected to be reclassified to interest expense over the next 12 months total approximately $4.1 million ($3.2 million after-tax). ā ā ā ā ā ā ā ā ā ā ā ā ā Foreign ā Unrealized Gain ā ā ā ā ā Currency ā (Loss) on Interest ā ā ā $s in thousands Translation Rate Hedge Total Balance at December 31, 2018 ā $ (14,697) ā $ 906 ā $ (13,791) Other comprehensive income (loss) before reclassifications, net of tax ā 2,374 ā (1,780) ā 594 Amounts reclassified out of AOCI, net of tax (2) ā ā ā (238) ā (238) Other comprehensive income (loss), net ā 2,374 ā (2,018) ā 356 Balance at September 30, 2019 ā $ (12,323) ā $ (1,112) ā $ (13,435) (2) Before-tax reclassifications of $35,000 ($27,000 after-tax) and $301,000 ($238,000 after-tax) for the three and nine months ended September 30, 2019, were included as a reduction of Interest expense in the Companyās consolidated statements of operations. Amounts relate to the Companyās interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
RECEIVABLES | |
Schedule of receivables | ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 Trade ā $ 174,569 ā $ 196,593 Unbilled revenue ā 48,055 ā 54,727 Other ā 7,275 ā 7,000 Total receivables ā 229,899 ā 258,320 Allowance for credit losses ā (2,297) ā (3,010) Receivables, net ā $ 227,602 ā $ 255,310 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā ā Quoted Prices in ā Other Observable ā Unobservable ā ā ā ā ā Active Markets ā Inputs ā Inputs ā ā ā $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Fixed-income securities (1) ā $ 2,424 ā $ 1,929 ā $ ā ā $ 4,353 Money market funds (2) ā ā 30,634 ā ā ā ā ā ā ā ā 30,634 Total ā $ 33,058 ā $ 1,929 ā $ ā ā $ 34,987 ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā ā ā ā ā ā ā Interest rate swap agreement (3) ā $ ā ā $ 12,584 ā $ ā ā $ 12,584 Contingent consideration (4) ā ā ā ā ā ā ā ā 2,896 ā ā 2,896 Total ā $ ā ā $ 12,584 ā $ 2,896 ā $ 15,480 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā Quoted Prices in ā Other Observable ā Unobservable ā ā ā ā ā Active Markets ā Inputs ā Inputs ā ā ā $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Fixed-income securities (1) ā $ 2,380 ā $ 1,830 ā $ ā ā $ 4,210 Money market funds (2) ā ā 859 ā ā ā ā ā ā ā ā 859 Total ā $ 3,239 ā $ 1,830 ā $ ā ā $ 5,069 ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā ā ā ā ā ā ā Interest rate swap agreement (3) ā $ ā ā $ 1,176 ā $ ā ā $ 1,176 Contingent consideration (4) ā ā ā ā ā ā ā ā 8,283 ā ā 8,283 Total ā $ ā ā $ 1,176 ā $ 8,283 ā $ 9,459 (1) We invest a portion of our Restricted cash and investments in fixed-income securities, including U.S. Treasury and U.S. agency securities. We measure the fair value of U.S. Treasury securities using quoted prices for identical assets in active markets. We measure the fair value of U.S. agency securities using observable market activity for similar assets. The fair value of our fixed-income securities approximates our cost basis in the investments. ā (2) We invest portions of our Cash and cash equivalents and Restricted cash and investments in money market funds. We measure the fair value of these money market fund investments using quoted prices for identical assets in active markets. The portion of Restricted cash and investments that is invested in money market funds is considered restricted cash for purposes of reconciling the beginning-of-period and end-of-period amounts presented in the Companyās consolidated statements of cash flows. ā (3) In order to manage interest rate exposure, we entered into an interest rate swap agreement in March 2020 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a highly-effective cash flow hedge, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of March 31, 2020 in an initial notional amount of $500.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated (i) at the contracted interest rates and (ii) at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other long-term liabilities in the Companyās consolidated balance sheet. ā (4) Our contingent consideration liabilities represent the estimated fair value of potential future payments the Company may be required to remit under the terms of historical purchase agreements entered into by NRC prior to the NRC Merger. The payments are contingent on the acquired businessesā achievement of annual earnings targets in certain years and other events considered in the purchase agreements. The fair value of our contingent consideration liabilities are calculated using either a Monte Carlo simulation or modified Black-Scholes analyses based on earnings projections for the respective earn-out periods, corresponding earnings thresholds, and approximate timing of payments as outlined in the purchase agreements. The analyses utilize the following assumptions: (i) expected term; (ii) risk-adjusted net sales or earnings; (iii) risk-free interest rate; and (iv) expected volatility of earnings. Estimated payments, as determined through the respective models, are discounted by a credit spread assumption to account for credit risk. At September 30, 2020, the fair value of our contingent consideration liability of $2.9 million was included in Accrued liabilities. At December 31, 2019, the fair value of our contingent consideration liabilities of $6.6 million and $1.7 million were included in Accrued liabilities and Other long-term liabilities, respectively. We revalue our contingent consideration payments each period and any increases or decreases to fair value are included in Selling, general and administrative expenses in our consolidated statements of operations. Fair values may be impacted by certain unobservable inputs, most significantly with regard to discount rates, expected volatility and historical and projected performance. Significant changes to these inputs in isolation could result in a significantly different fair value measurement. |
Schedule of changes in Level 3 liabilities measured at fair value | ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2020 September 30, 2020 Contingent consideration, beginning of period ā $ 2,657 ā $ 8,283 Change in fair value of contingent consideration ā ā 75 ā ā (3,207) Contingent consideration paid ā ā ā ā ā (2,085) Foreign currency translation ā 164 ā (95) Contingent consideration, end of period ā $ 2,896 ā $ 2,896 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 Cell development costs ā $ 178,675 ā $ 174,561 Land and improvements ā 58,705 ā 52,909 Buildings and improvements ā 114,725 ā 109,580 Railcars ā 17,299 ā 17,299 Vehicles, vessels and other equipment ā 345,974 ā 317,472 Construction in progress ā 60,665 ā 61,537 Total property and equipment ā 776,043 ā 733,358 Accumulated depreciation and amortization ā (301,005) ā (254,590) Property and equipment, net ā $ 475,038 ā $ 478,768 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LEASES | |
Summary of leased assets and liabilities | ā ā ā ā ā ā ā ā $s in thousands September 30, 2020 December 31, 2019 Assets: ā ā ā ā ā ā Operating right-of-use assets (1) ā $ 50,977 ā $ 57,396 Finance right-of-use assets (2) ā ā 22,426 ā ā 20,499 Total ā $ 73,403 ā $ 77,895 ā ā ā ā ā ā ā Liabilities: ā ā ā ā ā ā Current: ā ā ā ā ā ā Operating (3) ā $ 17,175 ā $ 17,317 Finance (4) ā ā 4,706 ā ā 4,128 Long-term: ā ā ā ā ā ā Operating (5) ā ā 34,181 ā ā 39,954 Finance (6) ā ā 18,343 ā ā 16,308 Total ā $ 74,405 ā $ 77,707 (1) Included in Operating lease assets in the Companyās consolidated balance sheets. (2) Included in Property and equipment, net in the Companyās consolidated balance sheets. Finance right-of-use assets are recorded net of accumulated amortization of $6.7 million and $2.7 million as of September 30, 2020 and December 31, 2019, respectively. (3) Included in Current portion of operating lease liabilities in the Companyās consolidated balance sheets. (4) Included in Accrued liabilities in the Companyās consolidated balance sheets. (5) Included in Long-term operating lease liabilities in the Companyās consolidated balance sheets. (6) Included in Other long-term liabilities in the Companyās consolidated balance sheets. |
Summary of lease cost | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā Nine Months Ended September 30, $s in thousands 2020 2019 2020 2019 Operating lease cost (1) ā $ 5,008 ā $ 1,691 ā $ 14,947 ā $ 5,146 Finance lease cost: ā ā ā ā ā ā ā ā ā ā ā ā Amortization of leased assets (2) ā ā 1,330 ā ā 249 ā ā 3,974 ā ā 725 Interest on lease liabilities (3) ā ā 292 ā ā 28 ā ā 925 ā ā 78 Total ā $ 6,630 ā $ 1,968 ā $ 19,846 ā $ 5,949 (1) Included in Direct operating costs and Selling, general, and administrative expenses in the Companyās consolidated statements of operations. Operating lease cost includes short-term leases, excluding expenses relating to leases with a term of one month or less, which are not material. Operating lease cost excludes variable lease costs which are not material. (2) Included in Direct operating costs in the Companyās consolidated statements of operations. (3) Included in Interest expense in the Companyās consolidated statements of operations. |
Schedule of cash flow supplemental information | ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, $s in thousands 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: ā ā ā ā ā ā Operating cash flows from operating leases ā $ 14,547 ā $ 4,868 Operating cash flows from finance leases ā $ 925 ā $ 78 Financing cash flows from finance leases ā $ 3,457 ā $ 619 ā ā ā ā ā ā ā Non-cash investing and financing activities: ā ā ā ā ā ā Right-of-use assets obtained in exchange for new operating lease liabilities ā $ 7,195 ā $ 3,817 Right-of-use assets obtained in exchange for new finance lease liabilities ā $ 6,089 ā $ 1,844 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Field & ā ā ā ā ā Environmental ā Industrial ā ā ā ā Services ā Services ā ā ā ā ā ā ā Accumulated ā ā ā Accumulated ā ā ā $s in thousands Gross Impairment Gross Impairment Total Balance at December 31, 2019 ā $ 475,271 ā $ (6,870) ā $ 298,579 ā $ ā ā $ 766,980 Impairment charges ā ā ā ā ā (283,600) ā ā ā ā ā (16,700) ā ā (300,300) NRC Merger purchase price allocation adjustment ā ā 2,875 ā ā ā ā ā 2,230 ā ā ā ā ā 5,105 Impact Environmental acquisition ā ā ā ā ā ā ā ā 300 ā ā ā ā ā 300 Foreign currency translation ā (390) ā ā ā ā (172) ā ā ā ā (562) Balance at September 30, 2020 ā $ 477,756 ā $ (290,470) ā $ 300,937 ā $ (16,700) ā $ 471,523 |
Schedule of intangible assets, net | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 ā ā ā ā ā Accumulated ā ā ā ā ā ā ā Accumulated ā ā ā $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits, licenses and lease ā $ 173,862 ā $ (21,648) ā $ 152,214 ā $ 174,339 ā $ (18,707) ā $ 155,632 Customer relationships ā ā 333,680 ā ā (54,745) ā ā 278,935 ā ā 333,090 ā ā (35,254) ā ā 297,836 Technology - formulae and processes ā 6,809 ā (2,132) ā 4,677 ā 6,964 ā (2,013) ā 4,951 Customer backlog ā 3,652 ā (2,296) ā 1,356 ā 3,652 ā (2,022) ā 1,630 Tradename ā 10,390 ā ā (7,269) ā ā 3,121 ā ā 10,390 ā ā (4,832) ā ā 5,558 Developed software ā ā 2,889 ā ā (2,097) ā ā 792 ā ā 2,895 ā ā (1,884) ā ā 1,011 Non-compete agreements ā 5,541 ā (3,721) ā 1,820 ā 5,455 ā (1,694) ā 3,761 Internet domain and website ā ā 536 ā ā (177) ā ā 359 ā ā 536 ā ā (156) ā ā 380 Database ā ā 386 ā ā (205) ā ā 181 ā ā 388 ā ā (191) ā ā 197 Total amortizing intangible assets ā 537,745 ā (94,290) ā 443,455 ā 537,709 ā (66,753) ā 470,956 Non-amortizing intangible assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Permits and licenses ā 103,803 ā ā ā ā 103,803 ā 103,816 ā ā ā ā 103,816 Tradename ā 127 ā ā ā ā ā 127 ā 130 ā ā ā ā ā 130 Total intangible assets ā $ 641,675 ā $ (94,290) ā $ 547,385 ā $ 641,655 ā $ (66,753) ā $ 574,902 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
Schedule of long-term debt | ā ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands 2020 2019 Revolving credit facility ā $ 387,000 ā $ 327,000 Term loan ā ā 446,625 ā ā 450,000 Unamortized term loan discount and debt issuance costs ā ā (6,943) ā ā (7,799) Total debt ā ā 826,682 ā ā 769,201 Current portion of long-term debt ā ā (3,359) ā ā (3,359) Long-term debt ā $ 823,323 ā $ 765,842 |
Schedule of interest margins based on the total net leverage ratio | ā ā ā ā Consolidated Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 3.25 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% ā ā ā ā Consolidated Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 4.50 to 1.00 2.50% 1.50% Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00 2.25% 1.25% Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% |
Schedule of maximum consolidated leverage ratio for different periods | ā Fiscal Quarter(s) Consolidated Total Net Leverage Ratio Fiscal Quarters ending June 30, 2017 through September 30, 2019 3.50:1.00 Fiscal Quarters ending December 31, 2019 and thereafter 4.00:1.00 |
CLOSURE AND POST-CLOSURE OBLI_2
CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
Schedule of changes to reported closure and post closure obligations | ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended $s in thousands September 30, 2020 ā September 30, 2020 Closure and post-closure obligations, beginning of period ā $ 88,046 ā $ 86,383 Accretion expense ā 1,279 ā 3,812 Payments ā (542) ā (1,340) Foreign currency translation ā 33 ā (39) Closure and post-closure obligations, end of period ā 88,816 ā 88,816 Less current portion ā (4,019) ā (4,019) Long-term portion ā $ 84,797 ā $ 84,797 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS (LOSS) PER SHARE | |
Schedule of earnings (loss) per share | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā ā 2020 ā 2019 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income ā $ 6,319 ā $ 6,319 ā $ 13,070 ā $ 13,070 Weighted average basic shares outstanding ā 31,069 ā 31,069 ā 22,013 ā 22,013 ā ā ā ā ā ā ā ā ā ā ā ā ā Dilutive effect of share-based awards and warrants ā ā ā ā 255 ā ā ā ā 218 Weighted average diluted shares outstanding ā ā ā ā 31,324 ā ā ā ā 22,231 ā ā ā ā ā ā ā ā ā ā ā ā ā Earnings per share ā $ 0.20 ā $ 0.20 ā $ 0.59 ā $ 0.59 Anti-dilutive shares excluded from calculation ā ā ā ā 4,233 ā ā ā ā 80 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, ā ā 2020 ā 2019 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net (loss) income ā $ (296,950) ā $ (296,950) ā $ 36,604 ā $ 36,604 Weighted average basic shares outstanding ā 31,142 ā 31,142 ā 22,002 ā 22,002 ā ā ā ā ā ā ā ā ā ā ā ā ā Dilutive effect of share-based awards ā ā ā ā ā ā ā ā ā 210 Weighted average diluted shares outstanding ā ā ā ā 31,142 ā ā ā ā 22,212 ā ā ā ā ā ā ā ā ā ā ā ā ā Loss (earnings) per share ā $ (9.54) ā $ (9.54) ā $ 1.66 ā $ 1.65 Anti-dilutive shares excluded from calculation ā ā ā ā 4,208 ā ā ā ā 84 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of PSU, restricted stock and RSU activity | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PSUs ā Restricted Stock ā RSUs ā ā ā ā Weighted ā ā ā Weighted ā ā ā Weighted ā ā ā ā Average ā ā ā Average ā ā ā Average ā ā ā ā Grant Date ā ā ā Grant Date ā ā ā Grant Date ā Shares Fair Value Shares Fair Value Shares Fair Value Outstanding as of December 31, 2019 42,711 ā $ 61.11 64,654 ā $ 55.62 ā 131,199 ā $ 59.05 Granted 57,350 ā ā 43.60 51,700 ā ā 48.35 ā 111,830 ā ā 33.21 Vested (11,929) ā 62.17 (43,588) ā 53.93 ā (57,674) ā 57.89 Cancelled, expired or forfeited ā ā ā ā ā ā ā (18,635) ā 57.63 Outstanding as of September 30, 2020 88,132 ā $ 49.57 72,766 ā $ 51.47 ā 166,720 ā $ 42.28 |
Summary of stock option activity | ā ā ā ā ā ā ā ā ā ā ā Weighted ā ā ā ā Average ā ā ā ā Exercise ā Shares Price Outstanding as of December 31, 2019 293,588 ā $ 48.23 Granted 78,700 ā ā 54.20 Exercised (6,880) ā 34.69 Cancelled, expired or forfeited (8,375) ā 42.89 Outstanding as of September 30, 2020 357,033 ā $ 49.93 Exercisable as of September 30, 2020 240,303 ā $ 47.06 |
PSUs | |
Schedule of assumptions for determining the fair value for PSU awards using Monte Carlo simulation models | ā ā ā ā ā ā ā July 16, 2020 Stock price on grant date ā $ 32.89 ā Expected term ā 2.5 years Expected volatility ā ā 40.6 % Risk-free interest rate ā 0.2 % |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENTS | |
Summary of financial information of our reportable segments | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 112,427 ā $ 125,715 ā $ ā ā $ 238,142 Depreciation, amortization and accretion ā $ 16,003 ā $ 12,129 ā $ 760 ā $ 28,892 Capital expenditures ā $ 6,459 ā $ 2,531 ā $ 177 ā $ 9,167 Total assets ā $ 989,227 ā $ 859,511 ā $ 97,557 ā $ 1,946,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 122,212 ā $ 45,190 ā $ ā ā $ 167,402 Depreciation, amortization and accretion ā $ 10,790 ā $ 2,319 ā $ 358 ā $ 13,467 Capital expenditures ā $ 12,188 ā $ 1,018 ā $ 579 ā $ 13,785 Total assets ā $ 750,915 ā $ 167,996 ā $ 81,238 ā $ 1,000,149 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 349,582 ā $ 343,198 ā $ ā ā $ 692,780 Depreciation, amortization and accretion ā $ 47,976 ā $ 36,420 ā $ 2,059 ā $ 86,455 Capital expenditures ā $ 28,062 ā $ 12,997 ā $ 4,065 ā $ 45,124 Total assets ā $ 989,227 ā $ 859,511 ā $ 97,557 ā $ 1,946,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2019 ā ā ā ā Field & ā ā ā ā ā ā ā ā Environmental ā Industrial ā ā ā ā ā ā $s in thousands Services Services Corporate Total Revenue ā $ 327,389 ā $ 126,852 ā $ ā ā $ 454,241 Depreciation, amortization and accretion ā $ 30,793 ā $ 6,601 ā $ 1,259 ā $ 38,653 Capital expenditures ā $ 33,485 ā $ 3,126 ā $ 1,832 ā $ 38,443 Total assets ā $ 750,915 ā $ 167,996 ā $ 81,238 ā $ 1,000,149 |
Reconciliation of Net Income to Adjusted EBITDA and adjusted EBITDA by operating segment | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā Nine Months Ended September 30, $s in thousands 2020 2019 2020 2019 Net income (loss) ā $ 6,319 ā $ 13,070 ā $ (296,950) ā $ 36,604 Income tax (benefit) expense ā ā (1,456) ā ā 6,428 ā ā 542 ā ā 15,864 Interest expense ā ā 7,964 ā ā 3,891 ā ā 25,127 ā ā 11,509 Interest income ā ā (9) ā ā (158) ā ā (251) ā ā (567) Foreign currency loss ā ā 421 ā ā 90 ā ā 155 ā ā 613 Other income ā ā (86) ā ā (110) ā ā (382) ā ā (342) Property and equipment impairment charges ā ā ā ā ā ā ā ā ā ā ā 25 Goodwill impairment charges ā ā ā ā ā ā ā ā 300,300 ā ā ā Depreciation and amortization of plant and equipment ā ā 18,435 ā ā 9,402 ā ā 54,831 ā ā 26,656 Amortization of intangible assets ā ā 9,178 ā ā 2,926 ā ā 27,812 ā ā 8,600 Share-based compensation ā ā 1,773 ā ā 1,246 ā ā 4,861 ā ā 3,713 Accretion and non-cash adjustment of closure & post-closure liabilities ā ā 1,279 ā ā 1,139 ā ā 3,812 ā ā 3,397 Gain on property insurance recoveries ā ā ā ā ā (498) ā ā ā ā ā (9,651) Business development and integration expenses ā ā 1,627 ā ā 4,025 ā ā 7,507 ā ā 6,696 Adjusted EBITDA ā $ 45,445 ā $ 41,451 ā $ 127,364 ā $ 103,117 ā Adjusted EBITDA, by operating segment, is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, Nine Months Ended September 30, $s in thousands ā 2020 2019 ā 2020 2019 Environmental Services $ 44,287 ā $ 51,409 $ 133,826 ā $ 133,725 Field & Industrial Services 21,340 ā 5,848 49,082 ā 13,424 Corporate (20,182) ā (15,806) (55,544) ā (44,032) Total $ 45,445 ā $ 41,451 $ 127,364 ā $ 103,117 |
Schedule of long-lived assets by geographic location | ā ā ā ā ā ā ā ā ā September 30, ā December 31, $s in thousands ā 2020 2019 United States ā $ 922,020 ā $ 954,102 Canada ā 65,893 ā 70,691 EMEA ā ā 20,374 ā ā 23,587 Other (1) ā ā 14,136 ā ā 5,290 Total long-lived assets ā $ 1,022,423 ā $ 1,053,670 (1) Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions. |
REVENUES (Details)
REVENUES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Disaggregation of revenue | ||||
Number of reportable segments | segment | 2 | |||
Revenue | $ 238,142 | $ 167,402 | $ 692,780 | $ 454,241 |
Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 327,389 | |||
Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 126,852 | |||
Treatment and disposal | ||||
Disaggregation of revenue | ||||
Revenue | 105,087 | 101,866 | 315,975 | 275,887 |
Treatment and disposal | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 266,646 | |||
Treatment and disposal | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 9,241 | |||
Transportation and Logistics | ||||
Disaggregation of revenue | ||||
Revenue | 32,363 | 35,728 | 89,928 | 92,665 |
Transportation and Logistics | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 60,743 | |||
Transportation and Logistics | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 31,922 | |||
Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 28,464 | 4,850 | 85,528 | 15,830 |
Industrial Services | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 15,830 | |||
Small Quantity Generation | ||||
Disaggregation of revenue | ||||
Revenue | 13,056 | 10,001 | 35,292 | 27,516 |
Small Quantity Generation | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 27,516 | |||
Total Waste Management | ||||
Disaggregation of revenue | ||||
Revenue | 9,998 | 8,674 | 25,315 | 25,393 |
Total Waste Management | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 25,393 | |||
Remediation | ||||
Disaggregation of revenue | ||||
Revenue | 6,733 | 1,388 | 21,911 | 4,003 |
Remediation | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 4,003 | |||
Emergency Response | ||||
Disaggregation of revenue | ||||
Revenue | 30,120 | 3,294 | 78,308 | 9,520 |
Emergency Response | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 9,520 | |||
Domestic Standby Services | ||||
Disaggregation of revenue | ||||
Revenue | 7,873 | 25,441 | ||
Other | ||||
Disaggregation of revenue | ||||
Revenue | 4,448 | 1,601 | 15,082 | 3,427 |
Other | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 3,427 | |||
Operating Segment | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 112,427 | 122,212 | 349,582 | 327,389 |
Operating Segment | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 125,715 | 45,190 | 343,198 | $ 126,852 |
Operating Segment | Treatment and disposal | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 91,226 | 98,554 | 282,231 | |
Operating Segment | Treatment and disposal | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 13,861 | 3,312 | 33,744 | |
Operating Segment | Transportation and Logistics | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 21,201 | 23,658 | 67,351 | |
Operating Segment | Transportation and Logistics | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 11,162 | 12,070 | 22,577 | |
Operating Segment | Industrial Services | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 28,464 | 4,850 | 85,528 | |
Operating Segment | Small Quantity Generation | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 13,056 | 10,001 | 35,292 | |
Operating Segment | Total Waste Management | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 9,998 | 8,674 | 25,315 | |
Operating Segment | Remediation | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 6,733 | 1,388 | 21,911 | |
Operating Segment | Emergency Response | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 30,120 | 3,294 | 78,308 | |
Operating Segment | Domestic Standby Services | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 7,873 | 25,441 | ||
Operating Segment | Other | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | $ 4,448 | $ 1,601 | $ 15,082 |
REVENUES - Treatment and Dispos
REVENUES - Treatment and Disposal Revenue (Details) - Treatment and disposal - T | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Event Business | ||||
Disaggregation of revenue | ||||
Threshold Tons of Non-recurring projects | 1,000 | |||
Revenue (in percent) | 30.00% | 25.00% | 28.00% | 22.00% |
Base Business | ||||
Disaggregation of revenue | ||||
Revenue (in percent) | 70.00% | 75.00% | 72.00% | 78.00% |
REVENUES - Geography (Details)
REVENUES - Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of revenue | ||||
Revenue | $ 238,142 | $ 167,402 | $ 692,780 | $ 454,241 |
United States | ||||
Disaggregation of revenue | ||||
Revenue | 214,269 | 143,886 | 619,108 | 388,693 |
Canada | ||||
Disaggregation of revenue | ||||
Revenue | 18,759 | 23,516 | 55,851 | 65,548 |
EMEA | ||||
Disaggregation of revenue | ||||
Revenue | 4,195 | 13,349 | ||
Other | ||||
Disaggregation of revenue | ||||
Revenue | 919 | 4,472 | ||
Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 327,389 | |||
Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 126,852 | |||
Operating Segment | Environmental Services | ||||
Disaggregation of revenue | ||||
Revenue | 112,427 | 122,212 | 349,582 | 327,389 |
Operating Segment | Environmental Services | United States | ||||
Disaggregation of revenue | ||||
Revenue | 94,659 | 99,554 | 296,297 | 262,699 |
Operating Segment | Environmental Services | Canada | ||||
Disaggregation of revenue | ||||
Revenue | 17,768 | 22,658 | 53,285 | 64,690 |
Operating Segment | Field and Industrial Services | ||||
Disaggregation of revenue | ||||
Revenue | 125,715 | 45,190 | 343,198 | 126,852 |
Operating Segment | Field and Industrial Services | United States | ||||
Disaggregation of revenue | ||||
Revenue | 119,610 | 44,332 | 322,811 | 125,994 |
Operating Segment | Field and Industrial Services | Canada | ||||
Disaggregation of revenue | ||||
Revenue | 991 | $ 858 | 2,566 | $ 858 |
Operating Segment | Field and Industrial Services | EMEA | ||||
Disaggregation of revenue | ||||
Revenue | 4,195 | 13,349 | ||
Operating Segment | Field and Industrial Services | Other | ||||
Disaggregation of revenue | ||||
Revenue | $ 919 | $ 4,472 |
REVENUES - Practical Expedients
REVENUES - Practical Expedients (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES | ||||
Deferred revenue recognized in revenue | $ 735,000 | $ 738,000 | $ 13,600,000 | $ 9,700,000 |
Revenue, Practical Expedient, Financing Component | true | |||
Revenue, Practical Expedient, Initial Application and Transition, Nonrestatement of Modified Contract | true |
BUSINESS COMBINATIONS - 2020 (D
BUSINESS COMBINATIONS - 2020 (Details) - USD ($) | Jan. 28, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Acquisition | |||
Goodwill | $ 471,523,000 | $ 766,980,000 | |
Impact Environmental Services Inc | |||
Acquisition | |||
Total purchase price | $ 3,300,000 | ||
Goodwill | 300,000 | ||
Field and Industrial Services | |||
Acquisition | |||
Goodwill | 300,937,000 | 298,579,000 | |
Field and Industrial Services | Impact Environmental Services Inc | |||
Acquisition | |||
Goodwill | 300,000 | ||
Identifiable intangible assets | $ 900,000 | ||
Weighted average amortization period | 12 years | ||
Amortization period of goodwill recognized and expected to be deductible for income tax purposes | 15 years | ||
Environmental Services | |||
Acquisition | |||
Goodwill | $ 477,756,000 | $ 475,271,000 |
BUSINESS COMBINATIONS - Merger
BUSINESS COMBINATIONS - Merger consideration (Details) | Nov. 01, 2019USD ($)Y$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Oct. 31, 2019$ / shares |
Business Acquisition [Line Items] | ||||
Proceeds from term loan | $ 90,000,000 | $ 20,000,000 | ||
NRC | ||||
Business Acquisition [Line Items] | ||||
Repayment of NRC's term loan and revolving credit facility | $ 398,373,000 | |||
Total merger consideration | 1,024,833,000 | |||
Transaction fees and expenses | 398,400,000 | |||
Proceeds from term loan | $ 450,000,000 | |||
Term of long term debt | 7 years | |||
NRC | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Fair value of US Ecology common stock issued | $ 581,101,000 | |||
Shares Issued | shares | 9,337,949 | |||
Closing share price | $ / shares | $ 62.23 | |||
NRC | Warrants | ||||
Business Acquisition [Line Items] | ||||
Fair value of replacement warrants issued | $ 44,858,000 | |||
Shares Issued | shares | 3,772,753 | |||
Fair value per warrant | $ / shares | $ 11.89 | |||
Closing share price | $ / shares | $ 2.33 | |||
Exchange ratio | 0.196 | |||
NRC | RSUs | ||||
Business Acquisition [Line Items] | ||||
Fair value of replacement RSUs issued | $ 141,000 | |||
Shares Issued | shares | 118,239 | |||
Ratio of precombination service period to vesting period | 1.90% | |||
NRC | Stock options | ||||
Business Acquisition [Line Items] | ||||
Fair value of replacement stock options | $ 360,000 | |||
Shares Issued | shares | 29,400 | |||
Fair value per option | $ / shares | $ 12.26 | |||
Strike price | $ / shares | $ 52.30 | |||
NRC | Stock options | Dividend yield | ||||
Business Acquisition [Line Items] | ||||
Fair value of option | 1.2 | |||
NRC | Stock options | Expected volatility | ||||
Business Acquisition [Line Items] | ||||
Fair value of option | 28.9 | |||
NRC | Stock options | Risk free rate | ||||
Business Acquisition [Line Items] | ||||
Fair value of option | 1.5 | |||
NRC | Stock options | Expected term | ||||
Business Acquisition [Line Items] | ||||
Fair value of option | Y | 1 |
BUSINESS COMBINATIONS - NRCG Me
BUSINESS COMBINATIONS - NRCG Merger (Details) $ in Thousands, $ in Millions | Aug. 01, 2019USD ($) | Aug. 01, 2019CAD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Nov. 01, 2019USD ($) |
Acquisition | ||||||||
Payment to acquire business, net of cash acquired | $ 3,309 | $ 17,851 | ||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | ||||||||
Goodwill | $ 471,523 | 471,523 | $ 766,980 | |||||
Additional information | ||||||||
Revenue since acquisition included in consolidated statements of operations | 80,900 | 238,000 | ||||||
Operating loss since acquisition included in consolidated statements of operations | 6,900 | 323,200 | ||||||
Acquisition-related costs included in selling, general and administrative expenses | 1,627 | $ 4,025 | 7,507 | 6,696 | ||||
Field and Industrial Services | ||||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | ||||||||
Goodwill | 300,937 | 300,937 | 298,579 | |||||
NRC | ||||||||
Acquisition | ||||||||
Acquisition price | 1,024,833 | 1,024,833 | ||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | ||||||||
Current assets | 131,653 | 131,653 | 131,653 | |||||
Property and equipment | 197,045 | 197,045 | 197,045 | |||||
Identifiable intangible assets | 303,600 | 303,600 | 303,600 | |||||
Other assets | 41,687 | 41,687 | 41,687 | |||||
Current liabilities | (89,236) | (89,236) | (83,460) | |||||
Other liabilities | (57,581) | (57,581) | (57,581) | |||||
Total identifiable net assets | 471,243 | 471,243 | 476,348 | |||||
Goodwill | 553,590 | 553,590 | 548,485 | $ 553,600 | ||||
Total purchase price | 1,024,833 | $ 1,024,833 | ||||||
Adjustments | ||||||||
Current liabilities - adjustments | 5,776 | |||||||
Deferred income tax liabilities - adjustments | (671) | |||||||
Total identifiable net assets - adjustment | (5,105) | |||||||
Goodwill - adjustment | 5,105 | |||||||
Additional information | ||||||||
Acquisition-related costs included in selling, general and administrative expenses | $ 1,600 | 7,400 | ||||||
Pro forma combined: | ||||||||
Revenue | 268,597 | 776,654 | ||||||
Net income | $ 4,790 | $ 8,095 | ||||||
NRC | Field and Industrial Services | ||||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | ||||||||
Goodwill | $ 241,900 | |||||||
Adjustments | ||||||||
Goodwill - adjustment | $ 2,230 | |||||||
US Ecology Sarnia | ||||||||
Acquisition | ||||||||
Percentage of outstanding shares acquired | 100.00% | |||||||
Acquisition price | $ 17,900 | $ 23.5 | ||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | ||||||||
Identifiable intangible assets | 6,200 | |||||||
Goodwill | 7,700 | |||||||
Total purchase price | $ 17,900 | $ 23.5 | ||||||
Additional information | ||||||||
Weighted average amortization period | 14 years | 14 years |
BUSINESS COMBINATIONS - Prelimi
BUSINESS COMBINATIONS - Preliminary fair value estimates of assets acquired and liabilities assumed recognized (Details) $ in Millions | Jan. 28, 2020USD ($) | Aug. 01, 2019USD ($) | Aug. 01, 2019CAD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 01, 2019USD ($) |
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | $ 471,523,000 | $ 766,980,000 | |||||
Goodwill impairment charge | 300,300,000 | ||||||
Field and Industrial Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | 300,937,000 | 298,579,000 | |||||
Goodwill impairment charge | $ 16,700,000 | 16,700,000 | |||||
Environmental Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | 477,756,000 | 475,271,000 | |||||
Goodwill impairment charge | $ 283,600,000 | 283,600,000 | |||||
Impact Environmental Services Inc | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | 300,000 | ||||||
Total purchase price | $ 3,300,000 | ||||||
Impact Environmental Services Inc | Field and Industrial Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Identifiable intangible assets | 900,000 | ||||||
Goodwill | $ 300,000 | ||||||
NRC | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Current assets | 131,653,000 | 131,653,000 | |||||
Property and equipment | 197,045,000 | 197,045,000 | |||||
Identifiable intangible assets | 303,600,000 | 303,600,000 | |||||
Other assets | 41,687,000 | 41,687,000 | |||||
Current liabilities | (89,236,000) | (83,460,000) | |||||
Deferred income tax liabilities | (55,925,000) | (56,596,000) | |||||
Other liabilities | (57,581,000) | (57,581,000) | |||||
Total identifiable net assets | 471,243,000 | 476,348,000 | |||||
Goodwill | 553,590,000 | 548,485,000 | $ 553,600,000 | ||||
Total purchase price | 1,024,833,000 | $ 1,024,833,000 | |||||
Goodwill expected to be deductible for income tax purposes | 33,300,000 | ||||||
Adjustments | |||||||
Current liabilities - adjustments | 5,776,000 | ||||||
Deferred income tax liabilities - adjustments | (671,000) | ||||||
Total identifiable net assets - adjustment | (5,105,000) | ||||||
Goodwill - adjustment | 5,105,000 | ||||||
NRC | Field and Industrial Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | 241,900,000 | ||||||
Adjustments | |||||||
Goodwill - adjustment | 2,230,000 | ||||||
NRC | Environmental Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | $ 311,700,000 | ||||||
Adjustments | |||||||
Goodwill - adjustment | $ 2,875,000 | ||||||
US Ecology Sarnia | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Identifiable intangible assets | $ 6,200,000 | ||||||
Goodwill | 7,700,000 | ||||||
Total purchase price | $ 17,900,000 | $ 23.5 |
BUSINESS COMBINATIONS - preli_2
BUSINESS COMBINATIONS - preliminary fair value of identifiable intangible assets (Details) - NRC $ in Thousands | Nov. 01, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 246,200 |
Total identified intangible assets | 303,600 |
Customer relationships - noncontractual | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 193,700 |
Average Amortization Period | 14 years |
Customer relationships - contractual | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 34,400 |
Average Amortization Period | 7 years |
Permits and licenses | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 8,700 |
Average Amortization Period | 16 years |
Tradename | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 6,100 |
Average Amortization Period | 2 years |
Non-compete agreements | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total identified intangible assets | $ 3,300 |
Average Amortization Period | 2 years |
Permits and licenses | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Non-amortizing intangible assets | $ 57,400 |
BUSINESS COMBINATIONS - Pro for
BUSINESS COMBINATIONS - Pro forma information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Additional information | ||||
Revenue since acquisition included in consolidated statements of operations | $ 80,900 | $ 238,000 | ||
Operating loss since acquisition included in consolidated statements of operations | 6,900 | 323,200 | ||
Acquisition-related costs included in selling, general and administrative expenses | 1,627 | $ 4,025 | 7,507 | $ 6,696 |
NRC | ||||
Pro forma combined: | ||||
Revenue | 268,597 | 776,654 | ||
Net income | $ 4,790 | $ 8,095 | ||
Additional information | ||||
Acquisition-related costs included in selling, general and administrative expenses | $ 1,600 | $ 7,400 |
BUSINESS COMBINATIONS - Other 2
BUSINESS COMBINATIONS - Other 2019 (Details) $ in Thousands, $ in Millions | Aug. 01, 2019USD ($) | Aug. 01, 2019CAD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Acquisition | |||||||
Payment to acquire business, net of cash acquired | $ 3,309 | $ 17,851 | |||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | $ 471,523 | 471,523 | $ 766,980 | ||||
Additional information | |||||||
Revenue since acquisition included in consolidated statements of operations | 80,900 | 238,000 | |||||
Operating loss since acquisition included in consolidated statements of operations | 6,900 | 323,200 | |||||
Acquisition-related costs included in selling, general and administrative expenses | 1,627 | $ 4,025 | 7,507 | $ 6,696 | |||
Field and Industrial Services | |||||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Goodwill | $ 300,937 | $ 300,937 | $ 298,579 | ||||
US Ecology Sarnia | |||||||
Acquisition | |||||||
Percentage of outstanding shares acquired | 100.00% | ||||||
Acquisition price | $ 17,900 | $ 23.5 | |||||
Consideration paid and the fair value of assets acquired and liabilities assumed | |||||||
Identifiable intangible assets | 6,200 | ||||||
Goodwill | 7,700 | ||||||
Total purchase price | $ 17,900 | $ 23.5 | |||||
Additional information | |||||||
Weighted average amortization period | 14 years | 14 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated other comprehensive income (loss) | ||||
Beginning balances | $ 672,947 | $ 376,759 | $ 1,011,380 | $ 359,217 |
Ending balances | 683,789 | 385,967 | 683,789 | 385,967 |
Foreign Currency Translation | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balances | (10,925) | (14,697) | ||
Other comprehensive income (loss) before reclassifications, net of tax | (3,328) | 2,374 | ||
Other comprehensive income (loss), net | (3,328) | 2,374 | ||
Ending balances | (14,253) | (12,323) | (14,253) | (12,323) |
Unrealized Gain (Loss) on Interest Rate Hedge | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balances | (929) | 906 | ||
Other comprehensive income (loss) before reclassifications, net of tax | (10,074) | (1,780) | ||
Amounts reclassified out of AOCI, net of tax | 1,721 | (238) | ||
Other comprehensive income (loss), net | (8,353) | (2,018) | ||
Ending balances | (9,282) | (1,112) | (9,282) | (1,112) |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balances | (26,197) | (12,290) | (11,854) | (13,791) |
Other comprehensive income (loss) before reclassifications, net of tax | (13,402) | 594 | ||
Amounts reclassified out of AOCI, net of tax | 1,721 | (238) | ||
Other comprehensive income (loss), net | 2,662 | (1,145) | (11,681) | 356 |
Ending balances | $ (23,535) | $ (13,435) | $ (23,535) | $ (13,435) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS -Reclassifications Line Items (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification adjustments | ||||
Interest expense | $ 7,964 | $ 3,891 | $ 25,127 | $ 11,509 |
Unrealized Gain (Loss) on Interest Rate Hedge | Interest rate swap agreement | ||||
Reclassification adjustments | ||||
Amounts in AOCI expected to be recognized over the next 12 months before tax | 4,100 | 4,100 | ||
Amounts in AOCI expected to be recognized over the next 12 months, net of taxes | 3,200 | 3,200 | ||
Unrealized Gain (Loss) on Interest Rate Hedge | Interest rate swap agreement | Reclassification out of accumulated other comprehensive income | ||||
Reclassification adjustments | ||||
Interest expense | 1,200 | 35 | 2,200 | 301 |
Interest expense, net of tax | $ 921 | $ 27 | $ 1,700 | $ 238 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
RECEIVABLES | ||
Trade | $ 174,569 | $ 196,593 |
Unbilled revenue | 48,055 | 54,727 |
Other | 7,275 | 7,000 |
Total receivables | 229,899 | 258,320 |
Allowance for credit losses | (2,297) | (3,010) |
Receivables, net | $ 227,602 | $ 255,310 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 19, 2019 |
Assets measured at fair value on a recurring basis | ||||
Initial notional amount | $ 500,000 | |||
Equity securities without readily determinable fair value | ||||
Investment in privately held company | $ 7,900 | |||
Interest rate swap agreement | ||||
Assets measured at fair value on a recurring basis | ||||
Initial notional amount | $ 490,000 | |||
Other Observable Inputs (Level 2) | Variable-rate debt | ||||
Equity securities without readily determinable fair value | ||||
Variable rate | $ 442,200 | |||
Level 3 | Contingent Consideration | Accrued Liabilities | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 2,900 | $ 6,600 | ||
Level 3 | Contingent Consideration | Other long-term liabilities | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 1,700 | |||
Recurring | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 34,987 | 5,069 | ||
Liabilities fair value disclosure | 15,480 | 9,459 | ||
Recurring | Interest rate swap agreement | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 12,584 | 1,176 | ||
Recurring | Fixed-income securities | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 4,353 | 4,210 | ||
Recurring | Money market funds | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 30,634 | 859 | ||
Recurring | Contingent Consideration | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 2,896 | 8,283 | ||
Recurring | Quoted Prices in Active Markets (Level 1) | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 33,058 | 3,239 | ||
Recurring | Quoted Prices in Active Markets (Level 1) | Fixed-income securities | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 2,424 | 2,380 | ||
Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 30,634 | 859 | ||
Recurring | Other Observable Inputs (Level 2) | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 1,929 | 1,830 | ||
Liabilities fair value disclosure | 12,584 | 1,176 | ||
Recurring | Other Observable Inputs (Level 2) | Interest rate swap agreement | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 12,584 | 1,176 | ||
Recurring | Other Observable Inputs (Level 2) | Fixed-income securities | ||||
Assets measured at fair value on a recurring basis | ||||
Assets fair value disclosure | 1,929 | 1,830 | ||
Recurring | Level 3 | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | 2,896 | 8,283 | ||
Recurring | Level 3 | Contingent Consideration | ||||
Assets measured at fair value on a recurring basis | ||||
Liabilities fair value disclosure | $ 2,896 | $ 8,283 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level 3 liabilities measured at fair value (Details) - Level 3 - Recurring - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of period | $ 2,657 | $ 8,283 |
Change in fair value of contingent consideration | 75 | (3,207) |
Contingent consideration paid | (2,085) | |
Foreign currency translation | 164 | (95) |
Balance at end of period | $ 2,896 | $ 2,896 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | $ 776,043 | $ 776,043 | $ 733,358 | ||
Accumulated depreciation and amortization | (301,005) | (301,005) | (254,590) | ||
Property and equipment, net | 475,038 | 475,038 | 478,768 | ||
Depreciation and amortization of plant and equipment | 18,435 | $ 9,402 | 54,831 | $ 26,656 | |
Cell development costs | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 178,675 | 178,675 | 174,561 | ||
Land and improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 58,705 | 58,705 | 52,909 | ||
Buildings and improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 114,725 | 114,725 | 109,580 | ||
Railcars | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 17,299 | 17,299 | 17,299 | ||
Vehicles, vessels and other equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 345,974 | 345,974 | 317,472 | ||
Construction in progress | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | $ 60,665 | $ 60,665 | $ 61,537 |
LEASES (Details)
LEASES (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Operating lease - existence of option to renew | true |
Finance lease - existence of option to renew | true |
Minimum | |
Leases | |
Operating lease - term | 1 year |
Finance lease - term | 1 year |
Maximum | |
Leases | |
Operating lease - term | 15 years |
Operating lease - renewal term | 40 years |
Finance lease - term | 15 years |
Finance lease - renewal term | 40 years |
LEASES - Leased assets and liab
LEASES - Leased assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Operating lease assets | $ 50,977 | $ 57,396 |
Finance right-of-use lease assets | 22,426 | 20,499 |
Total | 73,403 | 77,895 |
Finance leased assets - accumulated amortization | 6,700 | 2,700 |
Liabilities: | ||
Operating lease, current | 17,175 | 17,317 |
Finance lease, current | 4,706 | 4,128 |
Long-term operating lease liabilities | 34,181 | 39,954 |
Finance lease, long term | 18,343 | 16,308 |
Total | $ 74,405 | $ 77,707 |
LEASES - Lease cost (Details)
LEASES - Lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lease cost | ||||
Operating lease cost | $ 5,008 | $ 1,691 | $ 14,947 | $ 5,146 |
Amortization of leased assets | 1,330 | 249 | 3,974 | 725 |
Interest on lease liabilities | 292 | 28 | 925 | 78 |
Total | $ 6,630 | $ 1,968 | $ 19,846 | $ 5,949 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
LEASES | ||
Operating cash flows from operating leases | $ 14,547 | $ 4,868 |
Operating cash flows from finance leases | 925 | 78 |
Financing cash flows from finance leases | 3,457 | 619 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 7,195 | 3,817 |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 6,089 | $ 1,844 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2020 | Sep. 30, 2020 | Jan. 28, 2020 | Dec. 31, 2019 | Nov. 01, 2019 | Aug. 01, 2019 | |
Changes in goodwill | ||||||
Balance at the beginning of the period | $ 766,980,000 | $ 766,980,000 | ||||
Foreign currency translation | (562,000) | |||||
Balance at the end of the period | 471,523,000 | |||||
Accumulated Impairment | ||||||
Impairment charges | (300,300,000) | |||||
NRC | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 548,485,000 | 548,485,000 | ||||
Purchase price allocation adjustment | 5,105,000 | |||||
Balance at the end of the period | 553,590,000 | |||||
Identifiable intangible assets | 303,600,000 | $ 303,600,000 | ||||
Total identified intangible assets | $ 246,200,000 | |||||
Impact Environmental Services Inc | ||||||
Changes in goodwill | ||||||
Acquisition | 300,000 | |||||
Balance at the end of the period | 300,000 | |||||
US Ecology Sarnia | ||||||
Changes in goodwill | ||||||
Identifiable intangible assets | $ 6,200,000 | |||||
Environmental Services | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 475,271,000 | 475,271,000 | ||||
Foreign currency translation | (390,000) | |||||
Balance at the end of the period | 477,756,000 | |||||
Accumulated Impairment | ||||||
Accumulated impairment at the beginning | (6,870,000) | (6,870,000) | ||||
Impairment charges | (283,600,000) | (283,600,000) | ||||
Accumulated impairment at the ending | (290,470,000) | |||||
Environmental Services | NRC | ||||||
Changes in goodwill | ||||||
Purchase price allocation adjustment | 2,875,000 | |||||
Field and Industrial Services | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 298,579,000 | 298,579,000 | ||||
Foreign currency translation | (172,000) | |||||
Balance at the end of the period | 300,937,000 | |||||
Accumulated Impairment | ||||||
Impairment charges | $ (16,700,000) | (16,700,000) | ||||
Accumulated impairment at the ending | (16,700,000) | |||||
Field and Industrial Services | NRC | ||||||
Changes in goodwill | ||||||
Purchase price allocation adjustment | $ 2,230,000 | |||||
Field and Industrial Services | Impact Environmental Services Inc | ||||||
Changes in goodwill | ||||||
Identifiable intangible assets | $ 900,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Goodwill | |||
Impairment charges | $ 300,300 | ||
Goodwill | 471,523 | $ 766,980 | |
Impairment charges of finite-lived assets | $ 0 | ||
EWDS | |||
Goodwill | |||
Impairment charges | 283,600 | ||
Goodwill | 28,100 | ||
International reporting unit | |||
Goodwill | |||
Impairment charges | $ 16,700 | ||
Goodwill | $ 1,800 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 28, 2020 | Dec. 31, 2019 | Aug. 01, 2019 | |
Intangible Assets | |||||||
Amortizing intangible assets, Cost | $ 537,745,000 | $ 537,745,000 | $ 537,709,000 | ||||
Accumulated amortization | (94,290,000) | (94,290,000) | (66,753,000) | ||||
Amortizing intangible assets, Net | 443,455,000 | 443,455,000 | 470,956,000 | ||||
Total intangible assets, cost | 641,675,000 | 641,675,000 | 641,655,000 | ||||
Total intangible assets, net | 547,385,000 | 547,385,000 | 574,902,000 | ||||
Amortization of intangible assets | 9,178,000 | $ 2,926,000 | 27,812,000 | $ 8,600,000 | |||
Goodwill | 471,523,000 | 471,523,000 | 766,980,000 | ||||
Permits and licenses | |||||||
Intangible Assets | |||||||
Non-amortizing intangible assets | 103,803,000 | 103,803,000 | 103,816,000 | ||||
Tradename | |||||||
Intangible Assets | |||||||
Non-amortizing intangible assets | 127,000 | 127,000 | 130,000 | ||||
Permits, licenses and lease | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 173,862,000 | 173,862,000 | 174,339,000 | ||||
Accumulated amortization | (21,648,000) | (21,648,000) | (18,707,000) | ||||
Amortizing intangible assets, Net | 152,214,000 | 152,214,000 | 155,632,000 | ||||
Customer relationships | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 333,680,000 | 333,680,000 | 333,090,000 | ||||
Accumulated amortization | (54,745,000) | (54,745,000) | (35,254,000) | ||||
Amortizing intangible assets, Net | 278,935,000 | 278,935,000 | 297,836,000 | ||||
Technology - formulae and processes | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 6,809,000 | 6,809,000 | 6,964,000 | ||||
Accumulated amortization | (2,132,000) | (2,132,000) | (2,013,000) | ||||
Amortizing intangible assets, Net | 4,677,000 | 4,677,000 | 4,951,000 | ||||
Customer backlog | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 3,652,000 | 3,652,000 | 3,652,000 | ||||
Accumulated amortization | (2,296,000) | (2,296,000) | (2,022,000) | ||||
Amortizing intangible assets, Net | 1,356,000 | 1,356,000 | 1,630,000 | ||||
Tradename | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 10,390,000 | 10,390,000 | 10,390,000 | ||||
Accumulated amortization | (7,269,000) | (7,269,000) | (4,832,000) | ||||
Amortizing intangible assets, Net | 3,121,000 | 3,121,000 | 5,558,000 | ||||
Developed software | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 2,889,000 | 2,889,000 | 2,895,000 | ||||
Accumulated amortization | (2,097,000) | (2,097,000) | (1,884,000) | ||||
Amortizing intangible assets, Net | 792,000 | 792,000 | 1,011,000 | ||||
Non-compete agreements | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 5,541,000 | 5,541,000 | 5,455,000 | ||||
Accumulated amortization | (3,721,000) | (3,721,000) | (1,694,000) | ||||
Amortizing intangible assets, Net | 1,820,000 | 1,820,000 | 3,761,000 | ||||
Internet domain and website | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 536,000 | 536,000 | 536,000 | ||||
Accumulated amortization | (177,000) | (177,000) | (156,000) | ||||
Amortizing intangible assets, Net | 359,000 | 359,000 | 380,000 | ||||
Database | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 386,000 | 386,000 | 388,000 | ||||
Accumulated amortization | (205,000) | (205,000) | (191,000) | ||||
Amortizing intangible assets, Net | 181,000 | 181,000 | 197,000 | ||||
Impact Environmental Services Inc | |||||||
Intangible Assets | |||||||
Amortizing intangible assets, Cost | 900,000 | 900,000 | |||||
Goodwill | 300,000 | 300,000 | |||||
US Ecology Sarnia | |||||||
Intangible Assets | |||||||
Goodwill | $ 7,700,000 | ||||||
Environmental Services | |||||||
Intangible Assets | |||||||
Goodwill | 477,756,000 | 477,756,000 | 475,271,000 | ||||
Field and Industrial Services | |||||||
Intangible Assets | |||||||
Goodwill | $ 300,937,000 | $ 300,937,000 | $ 298,579,000 | ||||
Field and Industrial Services | Impact Environmental Services Inc | |||||||
Intangible Assets | |||||||
Goodwill | $ 300,000 |
DEBT - Schedule (Details)
DEBT - Schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term debt | ||
Unamortized discount and debt issuance costs | $ (6,943) | $ (7,799) |
Total debt | 826,682 | 769,201 |
Current portion of long-term debt | (3,359) | (3,359) |
Long-term debt | 823,323 | 765,842 |
Credit agreement | ||
Long-term debt | ||
Loan amount | 387,000 | 327,000 |
Term Loan | ||
Long-term debt | ||
Loan amount | $ 446,625 | $ 450,000 |
DEBT - Paragraph (Details)
DEBT - Paragraph (Details) $ in Thousands | Jun. 26, 2020 | Nov. 01, 2019USD ($) | Aug. 06, 2019 | Apr. 18, 2017USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
DEBT | |||||||
Notional amount | $ 500,000 | ||||||
Interest rate swap agreement | |||||||
DEBT | |||||||
Notional amount | $ 490,000 | ||||||
Percentage of outstanding debt | 59.00% | ||||||
Net loss related to terminated swap | $ 1,800 | ||||||
Sweep Arrangements | |||||||
DEBT | |||||||
Advances outstanding | $ 0 | ||||||
Credit agreement | |||||||
DEBT | |||||||
Maximum borrowing capacity | $ 500,000 | ||||||
Loan amount | 387,000 | $ 327,000 | |||||
Contractual term | 5 years | ||||||
Accordion feature | $ 250,000 | $ 200,000 | |||||
Percentage of EBITDA plus certain additional amounts used to determine additional borrowing capacity | 100.00% | ||||||
Amount outstanding | $ 387,000 | ||||||
Effective interest rate (as a percent) | 3.74% | ||||||
Availability for borrowings under line of credit | $ 102,700 | ||||||
Equity interest in domestic subsidiaries pledged as security (as a percent) | 100.00% | ||||||
Voting equity interest in foreign subsidiaries pledged as security (as a percent) | 65.00% | ||||||
Non-voting equity interest in foreign subsidiaries pledged as security (as a percent) | 100.00% | ||||||
Total leverage ratio | 4 | 4 | |||||
Credit agreement | Minimum | |||||||
DEBT | |||||||
Commitment fee (as a percent) | 0.175% | 0.175% | |||||
Credit agreement | Maximum | |||||||
DEBT | |||||||
Commitment fee (as a percent) | 0.40% | 0.35% | |||||
Credit Agreement, Letter Of Credit | |||||||
DEBT | |||||||
Maximum borrowing capacity | $ 75,000 | ||||||
Line of credit issued in the form of a standby letters of credit | $ 10,300 | ||||||
Credit Agreement, Swingline Loans | |||||||
DEBT | |||||||
Maximum borrowing capacity | $ 40,000 | $ 40,000 | |||||
Credit Agreement, Swingline Loans | Sweep Arrangements | |||||||
DEBT | |||||||
Maximum borrowing capacity | 40,000 | ||||||
Incremental Term Loans | |||||||
DEBT | |||||||
Increase in capacity | 50,000 | ||||||
Maximum borrowing capacity | $ 450,000 | ||||||
Loan amount | $ 400,000 | ||||||
Contractual term | 7 years | ||||||
Required annual principal repayment (as a percent) | 1.00% | ||||||
Effective interest rate (as a percent) | 3.50% | ||||||
Incremental Term Loans | LIBOR | |||||||
DEBT | |||||||
Percentage points added to the reference rate | 2.25% | ||||||
Incremental Term Loans | Base rate | |||||||
DEBT | |||||||
Percentage points added to the reference rate | 1.25% |
DEBT - Loan Interest Margin (De
DEBT - Loan Interest Margin (Details) | Jun. 26, 2020 | Nov. 01, 2019 | Apr. 18, 2017 |
Credit agreement | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 3 | ||
Credit agreement | Equal to or greater than 4.50 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 4.50 | ||
Credit agreement | Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 4 | ||
Maximum consolidated senior secured leverage ratio | 4.50 | ||
Credit agreement | Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 3.25 | 3.25 | |
Maximum consolidated senior secured leverage ratio | 4 | ||
Credit agreement | Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 2.50 | 2.50 | |
Maximum consolidated senior secured leverage ratio | 3.25 | 3.25 | |
Credit agreement | Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 1.75 | 1.75 | |
Maximum consolidated senior secured leverage ratio | 2.50 | 2.50 | |
Credit agreement | Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 | |||
DEBT | |||
Minimum consolidated senior secured leverage ratio | 1 | 1 | |
Maximum consolidated senior secured leverage ratio | 1.75 | 1.75 | |
Credit agreement | Less than 1.00 to 1.00 | |||
DEBT | |||
Maximum consolidated senior secured leverage ratio | 1 | 1 | |
Credit agreement | LIBOR | Equal to or greater than 4.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 2.50% | ||
Credit agreement | LIBOR | Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 2.25% | ||
Credit agreement | LIBOR | Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 2.00% | 2.00% | |
Credit agreement | LIBOR | Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.75% | 1.75% | |
Credit agreement | LIBOR | Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.50% | 1.50% | |
Credit agreement | LIBOR | Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.25% | 1.25% | |
Credit agreement | LIBOR | Less than 1.00 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.00% | 1.00% | |
Credit agreement | Base rate | Equal to or greater than 4.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.50% | ||
Credit agreement | Base rate | Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.25% | ||
Credit agreement | Base rate | Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 1.00% | 1.00% | |
Credit agreement | Base rate | Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 0.75% | 0.75% | |
Credit agreement | Base rate | Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 0.50% | 0.50% | |
Credit agreement | Base rate | Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 0.25% | 0.25% | |
Credit agreement | Base rate | Less than 1.00 to 1.00 | |||
DEBT | |||
Percentage points added to the reference rate | 0.00% | 0.00% | |
Incremental Term Loans | LIBOR | |||
DEBT | |||
Percentage points added to the reference rate | 2.25% | ||
Incremental Term Loans | LIBOR | Step Up Rate Based On Credit Ratings | |||
DEBT | |||
Percentage points added to the reference rate | 2.50% | ||
Incremental Term Loans | Base rate | |||
DEBT | |||
Percentage points added to the reference rate | 1.25% | ||
Incremental Term Loans | Base rate | Step Up Rate Based On Credit Ratings | |||
DEBT | |||
Percentage points added to the reference rate | 1.50% |
DEBT - Leverage Ratio (Details)
DEBT - Leverage Ratio (Details) - Credit agreement | Jun. 26, 2020 | Aug. 06, 2019 | Apr. 18, 2017 |
DEBT | |||
Total leverage ratio | 4 | 4 | |
Fiscal Quarters ending June 30, 2017 through September 30, 2019 | |||
DEBT | |||
Total leverage ratio | 3.50 | ||
Fiscal Quarters ending December 31, 2019 and thereafter | |||
DEBT | |||
Total leverage ratio | 4 |
CLOSURE AND POST-CLOSURE OBLI_3
CLOSURE AND POST-CLOSURE OBLIGATIONS - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Changes to reported closure and post-closure obligations | ||||
Closure and post-closure obligations, beginning of period | $ 88,046 | $ 86,383 | ||
Accretion expense | 1,279 | 3,812 | $ 3,397 | |
Payments | (542) | (1,340) | ||
Foreign currency translation | 33 | (39) | ||
Closure and post-closure obligations, end of period | 88,816 | 88,816 | ||
Less current portion | (4,019) | (4,019) | $ (2,152) | |
Long-term portion | $ 84,797 | $ 84,797 | $ 84,231 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
INCOME TAXES | |||||
Effective tax rate (as a percent) | (29.90%) | 33.00% | (0.20%) | 30.20% | |
Unrecognized Tax Benefits | $ 8,300 | $ 8,300 | $ 8,300 | ||
Possible reduction in the provision for income taxes if the unrecognized tax benefits were recognized | 239 | ||||
Penalties accrued on unrecognized tax benefits | $ 0 | 0 | |||
Change in net operating losses deferred tax asset | $ (8,100) |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
EARNINGS (LOSS) PER SHARE | ||||
Net income (loss) | $ 6,319 | $ 13,070 | $ (296,950) | $ 36,604 |
Basic | ||||
Weighted average basic shares outstanding | 31,069,000 | 22,013,000 | 31,142,000 | 22,002,000 |
Loss (earnings) per share-Basic (in dollars per share) | $ 0.20 | $ 0.59 | $ (9.54) | $ 1.66 |
Diluted | ||||
Net income, diluted | $ 6,319 | $ 13,070 | $ (296,950) | $ 36,604 |
Dilutive effect of share-based awards (in shares) | 210,000 | |||
Dilutive effect of share-based awards and warrants (in shares) | 255,000 | 218,000 | ||
Weighted average diluted shares outstanding | 31,324,000 | 22,231,000 | 31,142,000 | 22,212,000 |
Loss (earnings) per share-Diluted (in dollars per share) | $ 0.20 | $ 0.59 | $ (9.54) | $ 1.65 |
Anti-dilutive shares excluded from calculation | 4,233,000 | 80,000 | 4,208,000 | 84,000 |
EQUITY - Stock Repurchase Progr
EQUITY - Stock Repurchase Program (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 30, 2019 | Jun. 01, 2016 | |
Repurchase of Common Stock | |||
Authorized repurchase amount of outstanding common stock | $ 25 | $ 25 | |
Common stock repurchase program | |||
Repurchase of Common Stock | |||
Repurchase of common stock (in shares) | 397,600 | ||
Repurchase of common stock value | $ 17.3 |
EQUITY - Omnibus Incentive Plan
EQUITY - Omnibus Incentive Plan (Details) - Omnibus Plan - shares | Sep. 30, 2020 | May 27, 2015 |
Stock-Based Compensation Plans | ||
Number of shares authorized for grant | 1,500,000 | |
Number of shares available for future grant | 543,895 | |
Number of shares outstanding | 0 |
EQUITY - PSUs, Restricted Stock
EQUITY - PSUs, Restricted Stock and RSU (Details) - USD ($) | Jul. 16, 2020 | Jan. 24, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Assumptions used in Monte Carlo simulation | ||||
Common stock, shares issued | 31,144,000 | 31,461,000 | ||
PSUs | ||||
Stock-Based Compensation Plans | ||||
Number of common shares each PSU represents (in shares) | 1 | 1 | ||
Vesting period | 2 years 6 months | |||
Shares | ||||
Outstanding at the beginning of the year (in shares) | 42,711 | |||
Granted (in shares) | 51,922 | 5,358 | 57,350 | |
Vested (in shares) | (11,929) | |||
Outstanding at the end of the year (in shares) | 88,132 | |||
Weighted Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 61.11 | |||
Granted (in dollars per share) | $ 42.47 | $ 54.55 | 43.60 | |
Vested (in dollars per share) | 62.17 | |||
Outstanding at the end of the period (in dollars per share) | $ 49.57 | |||
Assumptions used in Monte Carlo simulation | ||||
Stock price on grant date | $ 32.89 | |||
Expected term (years) | 2 years 6 months | |||
Expected volatility (as a percent) | 40.60% | |||
Risk-free interest rate (as a percent) | 0.20% | |||
Common stock, shares issued | 7,226 | |||
PSUs | Minimum | ||||
Stock-Based Compensation Plans | ||||
Percentage payout rate | 0.00% | |||
PSUs | Maximum | ||||
Stock-Based Compensation Plans | ||||
Percentage payout rate | 200.00% | |||
Restricted stock | ||||
Shares | ||||
Outstanding at the beginning of the year (in shares) | 64,654 | |||
Granted (in shares) | 51,700 | |||
Vested (in shares) | (43,588) | |||
Outstanding at the end of the year (in shares) | 72,766 | |||
Weighted Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 55.62 | |||
Granted (in dollars per share) | 48.35 | |||
Vested (in dollars per share) | 53.93 | |||
Outstanding at the end of the period (in dollars per share) | $ 51.47 | |||
RSUs | ||||
Shares | ||||
Outstanding at the beginning of the year (in shares) | 131,199 | |||
Granted (in shares) | 111,830 | |||
Vested (in shares) | (57,674) | |||
Cancelled, expired or forfeited (in shares) | (18,635) | |||
Outstanding at the end of the year (in shares) | 166,720 | |||
Weighted Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 59.05 | |||
Granted (in dollars per share) | 33.21 | |||
Vested (in dollars per share) | 57.89 | |||
Cancelled, expired or forfeited (in dollars per share) | 57.63 | |||
Outstanding at the end of the period (in dollars per share) | $ 42.28 |
EQUITY - Stock Options (Details
EQUITY - Stock Options (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Additional disclosures | |
Number of options exercised via net share settlement | 3,738 |
Stock options | |
Shares | |
Outstanding at the beginning of the period (in shares) | 293,588 |
Granted (in shares) | 78,700 |
Exercised (in shares) | (6,880) |
Cancelled, expired or forfeited (in shares) | (8,375) |
Outstanding at the end of the period (in shares) | 357,033 |
Exercisable at the end of the period (in shares) | 240,303 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 48.23 |
Granted (in dollars per share) | $ / shares | 54.20 |
Exercised (in dollars per share) | $ / shares | 34.69 |
Cancelled, expired or forfeited (in dollars per share) | $ / shares | 42.89 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 49.93 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 47.06 |
EQUITY - Treasury Stock (Detail
EQUITY - Treasury Stock (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Dividends | ||||
Dividends paid per share (in dollars per share) | $ 0 | $ 0.18 | $ 0.18 | $ 0.54 |
Share repurchase program related to net share settlement | ||||
Treasury Stock | ||||
Repurchase of common stock (in shares) | 17,169 | |||
Average cost of repurchase (in dollars per share) | $ 57.91 | |||
Common stock repurchase program | ||||
Treasury Stock | ||||
Repurchase of common stock (in shares) | 397,600 | |||
Average cost of repurchase (in dollars per share) | $ 43.61 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Litigation and Regulatory Proceedings (Details) $ in Thousands | Jan. 10, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Nov. 17, 2018employee |
Litigation and Regulatory Proceedings | |||||
Insurance proceeds from damaged property and equipment | $ 1,131 | $ 10,000 | |||
Property insurance recoveries | $ 498 | $ 9,651 | |||
Explosion at the Grand View, Idaho Facility | |||||
Litigation and Regulatory Proceedings | |||||
Number of fatalities | employee | 1 | ||||
Continued limited operations insurance recoveries | $ 462 | ||||
Occupational Safety and Health Review Commission | |||||
Litigation and Regulatory Proceedings | |||||
Settlement | $ 50 |
OPERATING SEGMENTS - Summarized
OPERATING SEGMENTS - Summarized Financial Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
OPERATING SEGMENTS | |||||
Number of reportable segments | segment | 2 | ||||
Revenue | $ 238,142 | $ 167,402 | $ 692,780 | $ 454,241 | |
Depreciation, amortization and accretion | 28,892 | 13,467 | 86,455 | 38,653 | |
Capital expenditures | 9,167 | 13,785 | 45,124 | 38,443 | |
Total assets | 1,946,295 | 1,000,149 | 1,946,295 | 1,000,149 | $ 2,231,244 |
Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Revenue | 105,087 | 101,866 | 315,975 | 275,887 | |
Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Revenue | 32,363 | 35,728 | 89,928 | 92,665 | |
Remediation | |||||
OPERATING SEGMENTS | |||||
Revenue | 6,733 | 1,388 | 21,911 | 4,003 | |
Other | |||||
OPERATING SEGMENTS | |||||
Revenue | 4,448 | 1,601 | 15,082 | 3,427 | |
Corporate | |||||
OPERATING SEGMENTS | |||||
Depreciation, amortization and accretion | 760 | 358 | 2,059 | 1,259 | |
Capital expenditures | 177 | 579 | 4,065 | 1,832 | |
Total assets | 97,557 | 81,238 | 97,557 | 81,238 | |
Environmental Services | |||||
OPERATING SEGMENTS | |||||
Revenue | 327,389 | ||||
Environmental Services | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Revenue | 266,646 | ||||
Environmental Services | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Revenue | 60,743 | ||||
Environmental Services | Operating Segment | |||||
OPERATING SEGMENTS | |||||
Revenue | 112,427 | 122,212 | 349,582 | 327,389 | |
Depreciation, amortization and accretion | 16,003 | 10,790 | 47,976 | 30,793 | |
Capital expenditures | 6,459 | 12,188 | 28,062 | 33,485 | |
Total assets | 989,227 | 750,915 | 989,227 | 750,915 | |
Environmental Services | Operating Segment | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Revenue | 91,226 | 98,554 | 282,231 | ||
Environmental Services | Operating Segment | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Revenue | 21,201 | 23,658 | 67,351 | ||
Field and Industrial Services | |||||
OPERATING SEGMENTS | |||||
Revenue | 126,852 | ||||
Field and Industrial Services | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Revenue | 9,241 | ||||
Field and Industrial Services | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Revenue | 31,922 | ||||
Field and Industrial Services | Remediation | |||||
OPERATING SEGMENTS | |||||
Revenue | 4,003 | ||||
Field and Industrial Services | Other | |||||
OPERATING SEGMENTS | |||||
Revenue | 3,427 | ||||
Field and Industrial Services | Operating Segment | |||||
OPERATING SEGMENTS | |||||
Revenue | 125,715 | 45,190 | 343,198 | 126,852 | |
Depreciation, amortization and accretion | 12,129 | 2,319 | 36,420 | 6,601 | |
Capital expenditures | 2,531 | 1,018 | 12,997 | 3,126 | |
Total assets | 859,511 | 167,996 | 859,511 | $ 167,996 | |
Field and Industrial Services | Operating Segment | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Revenue | 13,861 | 3,312 | 33,744 | ||
Field and Industrial Services | Operating Segment | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Revenue | 11,162 | 12,070 | 22,577 | ||
Field and Industrial Services | Operating Segment | Remediation | |||||
OPERATING SEGMENTS | |||||
Revenue | 6,733 | 1,388 | 21,911 | ||
Field and Industrial Services | Operating Segment | Other | |||||
OPERATING SEGMENTS | |||||
Revenue | $ 4,448 | $ 1,601 | $ 15,082 |
OPERATING SEGMENTS - Reconcilia
OPERATING SEGMENTS - Reconciliation of EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of Net Income to Adjusted EBITDA | ||||
Net Income (loss) | $ 6,319 | $ 13,070 | $ (296,950) | $ 36,604 |
Income tax (benefit) expense | (1,456) | 6,428 | 542 | 15,864 |
Interest expense | 7,964 | 3,891 | 25,127 | 11,509 |
Interest income | (9) | (158) | (251) | (567) |
Foreign currency loss | 421 | 90 | 155 | 613 |
Other income | (86) | (110) | (382) | (342) |
Property and equipment impairment charges | 25 | |||
Goodwill impairment charges | 300,300 | |||
Depreciation and amortization of plant and equipment | 18,435 | 9,402 | 54,831 | 26,656 |
Amortization of intangibles assets | 9,178 | 2,926 | 27,812 | 8,600 |
Share-based compensation | 1,773 | 1,246 | 4,861 | 3,713 |
Accretion and non-cash adjustment of closure & post-closure liabilities | 1,279 | 1,139 | 3,812 | 3,397 |
Gain on property insurance recoveries | (498) | (9,651) | ||
Business development and integration expenses | (1,627) | (4,025) | (7,507) | (6,696) |
Adjusted EBITDA | 45,445 | 41,451 | 127,364 | 103,117 |
Operating Segment | Environmental Services | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | 44,287 | 51,409 | 133,826 | 133,725 |
Operating Segment | Field and Industrial Services | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | 21,340 | 5,848 | 49,082 | 13,424 |
Corporate | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | $ (20,182) | $ (15,806) | $ (55,544) | $ (44,032) |
OPERATING SEGMENTS - Revenue an
OPERATING SEGMENTS - Revenue and Long-lived Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue and Long-Lived Assets Outside of the United States | ||
Total long- lived assets | $ 1,022,423 | $ 1,053,670 |
United States | ||
Revenue and Long-Lived Assets Outside of the United States | ||
Total long- lived assets | 922,020 | 954,102 |
Canada | ||
Revenue and Long-Lived Assets Outside of the United States | ||
Total long- lived assets | 65,893 | 70,691 |
EMEA | ||
Revenue and Long-Lived Assets Outside of the United States | ||
Total long- lived assets | 20,374 | 23,587 |
Other | ||
Revenue and Long-Lived Assets Outside of the United States | ||
Total long- lived assets | $ 14,136 | $ 5,290 |