Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 26, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | US ECOLOGY, INC. | |
Entity Central Index Key | 742,126 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ECOL | |
Entity Common Stock, Shares Outstanding | 21,822,522 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 10,309 | $ 7,015 |
Receivables, net | 93,387 | 96,819 |
Prepaid expenses and other current assets | 7,892 | 7,458 |
Income taxes receivable | 2,039 | 4,076 |
Total current assets | 113,627 | 115,368 |
Property and equipment, net | 225,760 | 226,237 |
Restricted cash and investments | 5,794 | 5,787 |
Intangible assets, net | 231,905 | 234,356 |
Goodwill | 193,765 | 193,621 |
Other assets | 875 | 1,031 |
Total assets | 771,726 | 776,400 |
Current Liabilities: | ||
Accounts payable | 12,529 | 13,948 |
Deferred revenue | 9,867 | 7,820 |
Accrued liabilities | 19,903 | 22,605 |
Accrued salaries and benefits | 10,605 | 10,720 |
Income taxes payable | 105 | 165 |
Current portion of closure and post-closure obligations | 2,257 | 2,256 |
Revolving credit facility | 2,177 | |
Current portion of long-term debt | 2,862 | 2,903 |
Total current liabilities | 58,128 | 62,594 |
Long-term closure and post-closure obligations | 73,642 | 72,826 |
Long-term debt | 270,171 | 274,459 |
Other long-term liabilities | 4,399 | 5,164 |
Deferred income taxes | 81,870 | 81,333 |
Total liabilities | 488,210 | 496,376 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock $0.01 par value, 50,000 authorized; 21,823 and 21,780 shares issued, respectively | 218 | 218 |
Additional paid-in capital | 174,044 | 172,704 |
Retained earnings | 123,141 | 121,879 |
Treasury stock, at cost, 9 and 7 shares, respectively | (135) | (52) |
Accumulated other comprehensive loss | (13,752) | (14,725) |
Total stockholders' equity | 283,516 | 280,024 |
Total liabilities and stockholders' equity | $ 771,726 | $ 776,400 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 21,823 | 21,780 |
Treasury stock, shares | 9 | 7 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 110,234 | $ 113,318 |
Direct operating costs | 78,361 | 78,110 |
Gross profit | 31,873 | 35,208 |
Selling, general and administrative expenses | 19,714 | 19,425 |
Operating income | 12,159 | 15,783 |
Other income (expense): | ||
Interest income | 10 | 49 |
Interest expense | (4,130) | (4,559) |
Foreign currency gain | 88 | 759 |
Other | 137 | 169 |
Total other expense | (3,895) | (3,582) |
Income before income taxes | 8,264 | 12,201 |
Income tax expense | 3,079 | 4,684 |
Net income | $ 5,185 | $ 7,517 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.24 | $ 0.35 |
Diluted (in dollars per share) | $ 0.24 | $ 0.35 |
Shares used in earnings per share calculation: | ||
Basic (in shares) | 21,725 | 21,684 |
Diluted (in shares) | 21,845 | 21,745 |
Dividends paid per share (in dollars per share) | $ 0.18 | $ 0.18 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 5,185 | $ 7,517 |
Other comprehensive income (loss): | ||
Foreign currency translation gain | 439 | 3,253 |
Net changes in interest rate hedge, net of taxes of $288 and ($1,019), respectively | 534 | (1,894) |
Comprehensive income, net of tax | $ 6,158 | $ 8,876 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other comprehensive income (loss): | ||
Net changes in interest rate hedge, tax | $ 288 | $ (1,019) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 5,185 | $ 7,517 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 6,633 | 5,904 |
Amortization of intangible assets | 2,670 | 2,610 |
Accretion of closure and post-closure obligations | 1,073 | 1,024 |
Unrealized foreign currency gain | (168) | (846) |
Deferred income taxes | 179 | (699) |
Share-based compensation expense | 918 | 795 |
Net loss (gain) on disposition of assets | 219 | (17) |
Amortization of debt issuance costs | 504 | 638 |
Amortization of debt discount | 37 | 37 |
Changes in assets and liabilities: | ||
Receivables | 2,991 | 12,222 |
Income taxes receivable | 2,045 | 943 |
Other assets | (417) | 365 |
Accounts payable and accrued liabilities | (2,577) | 571 |
Deferred revenue | 2,037 | (1,461) |
Accrued salaries and benefits | (124) | (2,122) |
Income taxes payable | (61) | 3,243 |
Closure and post-closure obligations | (271) | (472) |
Net cash provided by operating activities | 20,873 | 30,252 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (7,151) | (7,219) |
Purchases of restricted cash and investments | (13) | (53) |
Proceeds from sale of restricted cash and investments | 6 | 6 |
Proceeds from sale of property and equipment | 40 | 56 |
Net cash used in investing activities | (7,118) | (7,210) |
Cash flows from financing activities: | ||
Payments on long-term debt | (4,726) | (10,764) |
Dividends paid | (3,923) | (3,918) |
Proceeds from revolving credit facility | 11,260 | 6,934 |
Payments on revolving credit facility | (13,438) | (6,934) |
Proceeds from exercise of stock options | 496 | |
Payment of equipment financing obligations | (85) | |
Other | (74) | (225) |
Net cash used in financing activities | (10,490) | (14,907) |
Effect of foreign exchange rate changes on cash | 29 | 158 |
Increase in cash and cash equivalents | 3,294 | 8,293 |
Cash and cash equivalents at beginning of period | 7,015 | 5,989 |
Cash and cash equivalents at end of period | 10,309 | 14,282 |
Supplemental Disclosures | ||
Income taxes paid, net of receipts | 886 | 1,230 |
Interest paid | 3,618 | 3,880 |
Non-cash investing and financing activities: | ||
Capital expenditures in accounts payable | $ 1,766 | 2,511 |
Restricted stock issued from treasury shares | $ 155 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2017 | |
GENERAL | |
GENERAL | NOTE 1. GENERAL Basis of Presentation 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 financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries. 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 (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2017. The Company’s consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited consolidated balance sheet as of that date. Use of Estimates 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 In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This ASU removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the ASU, “an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.” The guidance is effective prospectively for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company early adopted ASU 2017-04 on January 1, 2017 and the standard is not expected to have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (Topic 230). This ASU amends the guidance in Accounting Standards Codification (“ASC”) 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The classification of restricted cash in the statement of cash flows, along with eight other cash flow-related issues, was initially addressed by the Emerging Issues Task Force (“EITF”) in Issue 15-F. However, after deliberation of those issues, the EITF decided to address the diversity in practice related to the cash flow classification of restricted cash separately, in Issue 16-A. ASU 2016-18 is based on the EITF’s consensuses reached on Issue 16-A. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-18 may have on our consolidated cash flows. In August 2016, the FASB issued ASU No. 2016-15, Statements of Cash Flows (Topic 230). This ASU amends the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-15 may have on our consolidated cash flows. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) . This ASU requires excess tax benefits and tax deficiencies, which arise due to differences between the measure of compensation expense and the amount deductible for tax purposes, to be recorded directly through earnings as a component of income tax expense. Previously, these differences were generally recorded in additional paid-in capital and thus had no impact on net income. The change in treatment of excess tax benefits and tax deficiencies also impacts the computation of diluted earnings per share, and the cash flows associated with those items are classified as operating activities on the consolidated statements of cash flows. Additionally, ASU 2016-09 permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as allowed under previous standards, or recognized when they occur. The amendments in this ASU became effective in the first quarter of 2017. The Company adopted this ASU on January 1, 2017 and the standard did not have a material impact on its consolidated financial statements. Adoption of the ASU did not result in any cumulative effect adjustments to retained earnings or other components of stockholders’ equity as of the date of adoption, as well as there were no retrospective adjustments to our consolidated cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The ASU significantly changes the accounting model used by lessees to account for leases, requiring that all material leases be presented on the balance sheet. Lessees will recognize substantially all leases on the balance sheet as a right-of-use asset and a corresponding lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. The guidance is effective for annual and interim periods beginning after December 15, 2018. The guidance must be applied using the modified retrospective approach. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-02 may have on our consolidated financial position, results of operations and cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance for revenue recognition. The ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance permits the use of either the retrospective or cumulative effect transition method. The ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued ASU 2015-14: Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date established in ASU 2014-09. The amendments in ASU 2014-09 are now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of adopting ASU 2014-19 on its consolidated financial statements. The Company is currently reviewing customer contracts in each of its operating segments for all services provided, assessing the impact of applying ASU 2014-19, and comparing this to the Company’s historical revenue recognition criteria. Based upon the preliminary review of customer contracts, the Company believes that the Company’s revenue recognition policies are consistent with the requirements of ASU 2014-19. While the Company continues to assess all potential impacts of adopting ASU 2014-19, based upon information available to date, the Company does not expect the adoption of ASU 2014-19 to have a significant impact either on the timing or recognition of revenues. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 2. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) (“AOCI”) consisted of the following: Foreign Unrealized Loss Total Balance at December 31, 2016 $ ) $ ) $ ) Other comprehensive income before reclassifications, net of tax Amounts reclassified out of AOCI, net of tax (1) — Other comprehensive income Balance at March 31, 2017 $ ) $ ) $ ) (1) Before-tax reclassifications of $740,000 ($481,000 after-tax) and $826,000 ($536,000 after-tax) for the three months ended March 31, 2017 and 2016, respectively, were included in Interest expense in the Company’s consolidated statements of operations. Amounts relate to the Company’s 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. Amounts in AOCI expected to be recognized in interest expense over the next 12 months total approximately $3.0 million ($1.9 million after-tax). |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 3 Months Ended |
Mar. 31, 2017 | |
CONCENTRATIONS AND CREDIT RISK | |
CONCENTRATIONS AND CREDIT RISK | NOTE 3. CONCENTRATIONS AND CREDIT RISK Major Customers No customer accounted for more than 10% of total revenue for the three months ended March 31, 2017 or 2016. No customer accounted for more than 10% of total trade receivables as of March 31, 2017 or December 31, 2016. Credit Risk Concentration 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. |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2017 | |
RECEIVABLES | |
RECEIVABLES | NOTE 4. RECEIVABLES Receivables consisted of the following: March 31, December 31, $s in thousands 2017 2016 Trade $ $ Unbilled revenue Other Total receivables Allowance for doubtful accounts ) ) Receivables, net $ $ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 5. FAIR VALUE MEASUREMENTS 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: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; 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 Company’s financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash and investments, accounts payable, accrued liabilities, debt and interest rate swap agreements. The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and revolving credit facility approximate their carrying value due to the short-term nature of these instruments. 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 March 31, 2017, the fair value of the Company’s variable-rate debt was estimated to be $280.4 million. The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following: March 31, 2017 Quoted Prices in Other Observable Unobservable $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ $ $ — $ Money market funds (2) — — Total $ $ $ — $ Liabilities: Interest rate swap agreement (3) $ — $ $ — $ Total $ — $ $ — $ December 31, 2016 Quoted Prices in Other Observable Unobservable $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ $ $ — $ Money market funds (2) — — Total $ $ $ — $ Liabilities: Interest rate swap agreement (3) $ — $ $ — $ Total $ — $ $ — $ (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. (2) We invest a portion of our 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. (3) In order to manage interest rate exposure, we entered into an interest rate swap agreement in October 2014 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a 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 December 31, 2014 with an initial notional amount of $250.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of the interest rate swap agreement 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 Company’s consolidated balance sheet as of March 31, 2017 and December 31, 2016. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: March 31, December 31, $s in thousands 2017 2016 Cell development costs $ $ Land and improvements Buildings and improvements Railcars Vehicles and other equipment Construction in progress Total property and equipment Accumulated depreciation and amortization ) ) Property and equipment, net $ $ Depreciation and amortization expense for the three months ended March 31, 2017 and 2016 was $6.6 million and $5.9 million, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 7. GOODWILL AND INTANGIBLE ASSETS Changes in goodwill for the three months ended March 31, 2017 consisted of the following: $s in thousands Environmental Field & Total Balance at December 31, 2016 $ $ $ Foreign currency translation — Balance at March 31, 2017 $ $ $ Intangible assets, net consisted of the following: March 31, 2017 December 31, 2016 $s in thousands Cost Accumulated Net Cost Accumulated Net Amortizing intangible assets: Permits, licenses and lease $ $ ) $ $ $ ) $ Customer relationships ) ) Technology - formulae and processes ) ) Customer backlog ) ) Tradename ) ) Developed software ) ) Non-compete agreements ) ) Internet domain and website ) ) Database ) ) Total amortizing intangible assets ) ) Nonamortizing intangible assets: Permits and licenses — — Tradename — — Total intangible assets, net $ $ ) $ $ $ ) $ Amortization expense for the three months ended March 31, 2017 and 2016 was $2.7 million and $2.6 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2017 | |
DEBT | |
DEBT | NOTE 8. DEBT Long-term debt consisted of the following: March 31, December 31, $s in thousands 2017 2016 Term loan $ $ Unamortized discount and debt issuance costs ) ) Total debt Current portion of long-term debt ) ) Long-term debt $ $ On June 17, 2014, the Company entered into a new $540.0 million senior secured credit agreement (the “Former Credit Agreement”) with a syndicate of banks comprised of a $415.0 million term loan (the “Former Term Loan”) with a maturity date of June 17, 2021 and a $125.0 million revolving line of credit (the “Former Revolving Credit Facility”) with a maturity date of June 17, 2019. Former Term Loan The Former Term Loan provided an initial commitment amount of $415.0 million and bore interest at a base rate (as defined in the Former Credit Agreement) plus 2.00% or LIBOR plus 3.00%, at the Company’s option. At March 31, 2017, the effective interest rate on the Former Term Loan, including the impact of our interest rate swap, was 4.75%. In October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $205.0 million, or 74%, of the Former Term Loan principal outstanding as of March 31, 2017. Former Revolving Credit Facility The Former Revolving Credit Facility provided up to $125.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes. Under the Former Revolving Credit Facility, revolving loans were available based on a base rate (as defined in the Former Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which was determined according to a pricing grid under which the interest rate decreased or increased based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Former Credit Agreement). The maximum letter of credit capacity under the Former Revolving Credit Facility was $50.0 million and the Former Credit Agreement provided for a letter of credit fee equal to the applicable margin for LIBOR loans under the Former Revolving Credit Facility. At March 31, 2017, there were no borrowings outstanding on the Former Revolving Credit Facility and we were in compliance with all of the financial covenants in the Former Credit Agreement. On April 18, 2017, the Company entered into a senior secured credit agreement (the “New Credit Agreement”), which provides for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit. In connection with the Company’s entry into the New Credit Agreement, the Company refinanced the Former Credit Agreement. For more information about our refinancing, see Note 15 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q. |
CLOSURE AND POST-CLOSURE OBLIGA
CLOSURE AND POST-CLOSURE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2017 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | NOTE 9. CLOSURE AND POST-CLOSURE OBLIGATIONS 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. Changes to closure and post-closure obligations consisted of the following: Three Months Ended $s in thousands March 31, 2017 Closure and post-closure obligations, beginning of period $ Accretion expense Payments ) Foreign currency translation Closure and post-closure obligations, end of period Less current portion ) Long-term portion $ |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 10. INCOME TAXES Our effective tax rate for the three months ended March 31, 2017 was 37.3%, down from 38.4% for the three months ended March 31, 2016. The decrease for the three months ended March 31, 2017 compared with the three months ended March 31, 2016 primarily reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate. The decrease is partially offset by a higher U.S. effective tax rate for the three months ended March 31, 2017, which is primarily driven by a higher overall effective state tax rate resulting from changes in our apportionment between the various states in which we operate. The effective tax rate for the three months ended March 31, 2017 reflects the impact of discrete events including the recognition of excess tax benefits related to employee stock compensation as a result of the adoption of ASU 2016-09. We file a consolidated U.S. federal income tax return with the Internal Revenue Service (“IRS”) as well as income tax returns in various states and Canada. US Ecology, Inc. is subject to examination by the IRS for tax years 2013 through 2016. EQ is also subject to examination by the IRS for tax years 2013 and 2014. We may be subject to examinations by the Canada Revenue Agency as well as various state and local taxing jurisdictions for tax years 2012 through 2016. We are currently not aware of any examinations by taxing authorities. As discussed in Note 1 to the consolidated financial statements, the Company adopted ASU 2016-09 in the first quarter of 2017. The Company recorded all income tax effects of stock-based compensation awards in its provision for income taxes in the consolidated statement of operations on a prospective basis. Adoption of ASU 2016-09 resulted in net excess tax benefits in our provision for income taxes of $68,000 for the three months ended March 31, 2017. No other provisions of ASU 2016-09 had a material impact on the Company’s consolidated financial statements or disclosures. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 11. EARNINGS PER SHARE $s and shares in thousands, except per share Three Months Ended March 31, amounts 2017 2016 Basic Diluted Basic Diluted Net income $ $ $ $ Weighted average basic shares outstanding Dilutive effect of stock-based awards Weighted average diluted shares outstanding Earnings per share $ $ $ $ Anti-dilutive shares excluded from calculation |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
EQUITY | |
EQUITY | NOTE 12. EQUITY Stock Repurchase Program On June 1, 2016, the Company’s Board of Directors authorized the repurchase of $25.0 million of the Company’s outstanding common stock. Repurchases may be made from time to time in the open market or through privately negotiated transactions. The timing of any repurchases will be based upon prevailing market conditions and other factors. The Company did not repurchase any shares of common stock under the repurchase program during the three months ended March 31, 2017. The repurchase program will remain in effect until June 2, 2018, unless extended by our Board of Directors. Omnibus Incentive Plan On May 27, 2015, our stockholders approved the Omnibus Incentive Plan (“Omnibus Plan”), which was approved by our Board of Directors on April 7, 2015. 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 (“RSUs”), performance stock units (“PSUs”) and other stock-based awards or cash awards to officers, employees, consultants and non-employee directors. Subsequent to the approval of the Omnibus Plan in May 2015, we stopped granting equity awards under our 2008 Stock Option Incentive Plan and our 2006 Restricted Stock Plan (collectively, the “Previous Plans”). The Previous Plans will remain in effect solely for the settlement of awards granted under the Previous Plans. No shares that are reserved but unissued under the Previous Plans or that are outstanding under the Previous Plans and reacquired by the Company for any reason will be available for issuance under the Omnibus Plan. 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 March 31, 2017, 1,159,404 shares of common stock remain available for grant under the Omnibus Plan. PSUs, RSUs and Restricted Stock On January 2, 2017, the Company granted 11,500 PSUs to certain employees. Each PSU represents the right to receive, on the settlement date, one share of the Company’s 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 three-year performance period beginning January 1, 2017, based on total stockholder 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 $62.45 per unit. Compensation expense is recorded over the awards’ vesting period. Assumptions used in the Monte Carlo simulation to calculate the fair value of the PSUs granted in 2017 are as follows: 2017 Stock price on grant date $ Expected term (years) Expected volatility % Risk-free interest rate % Expected dividend yield % A summary of our PSU, restricted stock and RSU activity for the three months ended March 31, 2017 is as follows: PSUs Restricted Stock RSUs Shares Weighted Shares Weighted Shares Weighted Outstanding as of December 31, 2016 $ $ $ Granted Vested — — ) ) Cancelled, expired or forfeited — — ) ) Outstanding as of March 31, 2017 $ $ $ Stock Options A summary of our stock option activity for the three months ended March 31, 2017 is as follows: Shares Weighted Outstanding as of December 31, 2016 $ Granted Exercised ) Cancelled, expired or forfeited ) Outstanding as of March 31, 2017 $ Exercisable as of March 31, 2017 $ Treasury Stock During the three months ended March 31, 2017, the Company repurchased 1,569 shares of the Company’s common stock in connection with the net share settlement of employee equity awards at an average cost of $48.50 per share. During the three months ended March 31, 2017, option holders exercised 21,327 options with a weighted-average exercise price of $28.73 per option. Option holders exercised 2,938 of these options via net share settlement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES Litigation and Regulatory Proceedings 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 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. We are not currently a party to any material pending legal proceedings and are not aware of any other claims that could, individually or in the aggregate, have a materially adverse effect on our financial position, results of operations or cash flows. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2017 | |
OPERATING SEGMENTS | |
OPERATING SEGMENTS | NOTE 14. OPERATING SEGMENTS Financial Information by Segment Our operations are managed in two reportable segments reflecting our internal reporting structure and nature of services offered as follows: Environmental Services - This segment provides a broad range of hazardous material management services including transportation, recycling, treatment and disposal of hazardous and non-hazardous waste at Company-owned landfill, wastewater and other treatment facilities. Field & Industrial Services - This segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through our 10-day transfer facilities. Services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste. This segment also provides specialty services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response and other services to commercial and industrial facilities and to government entities. The operations not managed through our two reportable segments are recorded as “Corporate.” 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. Summarized financial information of our reportable segments is as follows: Three Months Ended March 31, 2017 $s in thousands Environmental Field & Corporate Total Treatment & Disposal Revenue $ $ $ — $ Services Revenue: Transportation and Logistics (1) — Industrial Cleaning (2) — — Technical Services (3) — — Remediation (4) — — Other (5) — — Total Revenue $ $ $ — $ Depreciation, amortization and accretion $ $ $ $ Capital expenditures $ $ $ $ Total assets $ $ $ $ Three Months Ended March 31, 2016 $s in thousands Environmental Field & Corporate Total Treatment & Disposal Revenue $ $ $ — $ Services Revenue: Transportation and Logistics (1) — Industrial Cleaning (2) — — Technical Services (3) — — Remediation (4) — — Other (5) — — Total Revenue $ $ $ — $ Depreciation, amortization and accretion $ $ $ $ Capital expenditures $ $ $ $ Total assets $ $ $ $ (1) Includes such services as collection, transportation and disposal of non-hazardous and hazardous waste. (2) Includes such services as industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, and refinery services such as tank cleaning and temporary storage. (3) Includes such services as Total Waste Management (“TWM”) programs, retail services, laboratory packing, less-than-truck-load (“LTL”) service and Household Hazardous Waste (“HHW”) collection. (4) Includes such services as site assessment, onsite treatment, project management and remedial action planning and execution. (5) Includes such services as emergency response and marine. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) The primary financial measure used by management to assess segment performance is Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, stock based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss and other income/expense. 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 Company’s 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: · Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; · Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt; · Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes; · Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; and · 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. A reconciliation of Net Income to Adjusted EBITDA is as follows: Three Months Ended March 31, $s in thousands 2017 2016 Net income $ $ Income tax expense Interest expense Interest income ) ) Foreign currency gain ) ) Other income ) ) Depreciation and amortization of plant and equipment Amortization of intangibles Stock-based compensation Accretion and non-cash adjustment of closure & post-closure liabilities Adjusted EBITDA $ $ Adjusted EBITDA, by operating segment, is as follows: Three Months Ended March 31, $s in thousands 2017 2016 Adjusted EBITDA: Environmental Services $ $ Field & Industrial Services Corporate ) ) Total $ $ Revenue, Property and Equipment and Intangible Assets Outside of the United States We provide services in the United States and Canada. Revenues by geographic location where the underlying services were performed were as follows: Three Months Ended March 31, $s in thousands 2017 2016 United States $ $ Canada Total revenue $ $ Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows: March 31, December 31, $s in thousands 2017 2016 United States $ Canada Total long-lived assets $ $ |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 15. SUBSEQUENT EVENTS Quarterly Dividend On April 3, 2017, we declared a quarterly dividend of $0.18 per common share to stockholders of record on April 21, 2017. The dividend was paid using cash on hand on April 28, 2017 in an aggregate amount of $3.9 million. Debt Refinancing On April 18, 2017, the Company entered into the New Credit Agreement with Wells Fargo Bank, National Association, 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, including a $75.0 million sublimit for the issuance of standby letters of credit. In connection with the Company’s entry into the New Credit Agreement, the Company refinanced the Former Credit Agreement. The Company expects that certain unamortized deferred financing costs and original issue discount associated with the Former Credit Agreement that were to be amortized to interest expense in future periods will be eliminated from the balance sheet through a non-cash charge to earnings of approximately $5.4 million in the second quarter of 2017. 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). Under the Revolving Credit Facility, revolving loans are available based on a base rate (as defined in the New Credit Agreement) or LIBOR, at the Company’s 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 New Credit Agreement). The Company 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 reduced based upon the Company’s total net leverage ratio (as defined in the New Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million. The Company 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 New 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 New Credit Agreement provides for mandatory prepayment at any time if the revolving credit outstandings exceed the revolving credit commitment (as such terms are defined in the New Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the New Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness. Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by the Company and its domestic subsidiaries on April 18, 2017, the Company’s obligations under the New Credit Agreement are (or will be) jointly and severally and fully and unconditionally guaranteed on a senior basis by all of the Company’s existing and certain future domestic subsidiaries and are secured by substantially all of the assets of the Company and the Company’s existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of the Company’s domestic subsidiaries and 65% of the voting equity interests of the Company’s directly owned foreign subsidiaries (and 100% of the non-voting equity interests of the Company’s directly owned foreign subsidiaries). The New 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 New Credit Agreement), among other things, amounts outstanding under the New Credit Agreement may be accelerated and the commitments may be terminated. The New 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 New Credit Agreement). Our Consolidated Total Net Leverage Ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2017, may not exceed 3.50 to 1.00, subject to certain exceptions. 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. |
GENERAL (Policies)
GENERAL (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
GENERAL | |
Basis of Presentation | Basis of Presentation 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 financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries. 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 (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2017. The Company’s consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited consolidated balance sheet as of that date. |
Use of Estimates | Use of Estimates 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 In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This ASU removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the ASU, “an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.” The guidance is effective prospectively for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company early adopted ASU 2017-04 on January 1, 2017 and the standard is not expected to have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (Topic 230). This ASU amends the guidance in Accounting Standards Codification (“ASC”) 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The classification of restricted cash in the statement of cash flows, along with eight other cash flow-related issues, was initially addressed by the Emerging Issues Task Force (“EITF”) in Issue 15-F. However, after deliberation of those issues, the EITF decided to address the diversity in practice related to the cash flow classification of restricted cash separately, in Issue 16-A. ASU 2016-18 is based on the EITF’s consensuses reached on Issue 16-A. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-18 may have on our consolidated cash flows. In August 2016, the FASB issued ASU No. 2016-15, Statements of Cash Flows (Topic 230). This ASU amends the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-15 may have on our consolidated cash flows. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) . This ASU requires excess tax benefits and tax deficiencies, which arise due to differences between the measure of compensation expense and the amount deductible for tax purposes, to be recorded directly through earnings as a component of income tax expense. Previously, these differences were generally recorded in additional paid-in capital and thus had no impact on net income. The change in treatment of excess tax benefits and tax deficiencies also impacts the computation of diluted earnings per share, and the cash flows associated with those items are classified as operating activities on the consolidated statements of cash flows. Additionally, ASU 2016-09 permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as allowed under previous standards, or recognized when they occur. The amendments in this ASU became effective in the first quarter of 2017. The Company adopted this ASU on January 1, 2017 and the standard did not have a material impact on its consolidated financial statements. Adoption of the ASU did not result in any cumulative effect adjustments to retained earnings or other components of stockholders’ equity as of the date of adoption, as well as there were no retrospective adjustments to our consolidated cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The ASU significantly changes the accounting model used by lessees to account for leases, requiring that all material leases be presented on the balance sheet. Lessees will recognize substantially all leases on the balance sheet as a right-of-use asset and a corresponding lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. The guidance is effective for annual and interim periods beginning after December 15, 2018. The guidance must be applied using the modified retrospective approach. Early adoption is permitted. We are assessing the impact the adoption of ASU 2016-02 may have on our consolidated financial position, results of operations and cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance for revenue recognition. The ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance permits the use of either the retrospective or cumulative effect transition method. The ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued ASU 2015-14: Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date established in ASU 2014-09. The amendments in ASU 2014-09 are now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of adopting ASU 2014-19 on its consolidated financial statements. The Company is currently reviewing customer contracts in each of its operating segments for all services provided, assessing the impact of applying ASU 2014-19, and comparing this to the Company’s historical revenue recognition criteria. Based upon the preliminary review of customer contracts, the Company believes that the Company’s revenue recognition policies are consistent with the requirements of ASU 2014-19. While the Company continues to assess all potential impacts of adopting ASU 2014-19, based upon information available to date, the Company does not expect the adoption of ASU 2014-19 to have a significant impact either on the timing or recognition of revenues. |
ACCUMULATED OTHER COMPREHENSI24
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of changes in accumulated other comprehensive income (loss) | Foreign Unrealized Loss Total Balance at December 31, 2016 $ ) $ ) $ ) Other comprehensive income before reclassifications, net of tax Amounts reclassified out of AOCI, net of tax (1) — Other comprehensive income Balance at March 31, 2017 $ ) $ ) $ ) (1) Before-tax reclassifications of $740,000 ($481,000 after-tax) and $826,000 ($536,000 after-tax) for the three months ended March 31, 2017 and 2016, respectively, were included in Interest expense in the Company’s consolidated statements of operations. Amounts relate to the Company’s 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. Amounts in AOCI expected to be recognized in interest expense over the next 12 months total approximately $3.0 million ($1.9 million after-tax). |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
RECEIVABLES | |
Schedule of receivables | March 31, December 31, $s in thousands 2017 2016 Trade $ $ Unbilled revenue Other Total receivables Allowance for doubtful accounts ) ) Receivables, net $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | March 31, 2017 Quoted Prices in Other Observable Unobservable $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ $ $ — $ Money market funds (2) — — Total $ $ $ — $ Liabilities: Interest rate swap agreement (3) $ — $ $ — $ Total $ — $ $ — $ December 31, 2016 Quoted Prices in Other Observable Unobservable $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ $ $ — $ Money market funds (2) — — Total $ $ $ — $ Liabilities: Interest rate swap agreement (3) $ — $ $ — $ Total $ — $ $ — $ (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. (2) We invest a portion of our 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. (3) In order to manage interest rate exposure, we entered into an interest rate swap agreement in October 2014 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a 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 December 31, 2014 with an initial notional amount of $250.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of the interest rate swap agreement 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 Company’s consolidated balance sheet as of March 31, 2017 and December 31, 2016. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | March 31, December 31, $s in thousands 2017 2016 Cell development costs $ $ Land and improvements Buildings and improvements Railcars Vehicles and other equipment Construction in progress Total property and equipment Accumulated depreciation and amortization ) ) Property and equipment, net $ $ |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | $s in thousands Environmental Field & Total Balance at December 31, 2016 $ $ $ Foreign currency translation — Balance at March 31, 2017 $ $ $ |
Schedule of intangible assets, net | March 31, 2017 December 31, 2016 $s in thousands Cost Accumulated Net Cost Accumulated Net Amortizing intangible assets: Permits, licenses and lease $ $ ) $ $ $ ) $ Customer relationships ) ) Technology - formulae and processes ) ) Customer backlog ) ) Tradename ) ) Developed software ) ) Non-compete agreements ) ) Internet domain and website ) ) Database ) ) Total amortizing intangible assets ) ) Nonamortizing intangible assets: Permits and licenses — — Tradename — — Total intangible assets, net $ $ ) $ $ $ ) $ |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
DEBT | |
Schedule of long-term debt | March 31, December 31, $s in thousands 2017 2016 Term loan $ $ Unamortized discount and debt issuance costs ) ) Total debt Current portion of long-term debt ) ) Long-term debt $ $ |
CLOSURE AND POST-CLOSURE OBLI30
CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
Schedule of changes to reported closure and post closure obligations | Three Months Ended $s in thousands March 31, 2017 Closure and post-closure obligations, beginning of period $ Accretion expense Payments ) Foreign currency translation Closure and post-closure obligations, end of period Less current portion ) Long-term portion $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS PER SHARE | |
Schedule of earnings per share | $s and shares in thousands, except per share Three Months Ended March 31, amounts 2017 2016 Basic Diluted Basic Diluted Net income $ $ $ $ Weighted average basic shares outstanding Dilutive effect of stock-based awards Weighted average diluted shares outstanding Earnings per share $ $ $ $ Anti-dilutive shares excluded from calculation |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
EQUITY | |
Schedule of assumptions for determining the fair value for PSU awards using Monte Carlo simulation models | 2017 Stock price on grant date $ Expected term (years) Expected volatility % Risk-free interest rate % Expected dividend yield % |
Summary of PSU, restricted stock and RSU activity | PSUs Restricted Stock RSUs Shares Weighted Shares Weighted Shares Weighted Outstanding as of December 31, 2016 $ $ $ Granted Vested — — ) ) Cancelled, expired or forfeited — — ) ) Outstanding as of March 31, 2017 $ $ $ |
Summary of stock option activity | Shares Weighted Outstanding as of December 31, 2016 $ Granted Exercised ) Cancelled, expired or forfeited ) Outstanding as of March 31, 2017 $ Exercisable as of March 31, 2017 $ |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
OPERATING SEGMENTS | |
Summary of financial information of our reportable segments | Three Months Ended March 31, 2017 $s in thousands Environmental Field & Corporate Total Treatment & Disposal Revenue $ $ $ — $ Services Revenue: Transportation and Logistics (1) — Industrial Cleaning (2) — — Technical Services (3) — — Remediation (4) — — Other (5) — — Total Revenue $ $ $ — $ Depreciation, amortization and accretion $ $ $ $ Capital expenditures $ $ $ $ Total assets $ $ $ $ Three Months Ended March 31, 2016 $s in thousands Environmental Field & Corporate Total Treatment & Disposal Revenue $ $ $ — $ Services Revenue: Transportation and Logistics (1) — Industrial Cleaning (2) — — Technical Services (3) — — Remediation (4) — — Other (5) — — Total Revenue $ $ $ — $ Depreciation, amortization and accretion $ $ $ $ Capital expenditures $ $ $ $ Total assets $ $ $ $ (1) Includes such services as collection, transportation and disposal of non-hazardous and hazardous waste. (2) Includes such services as industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, and refinery services such as tank cleaning and temporary storage. (3) Includes such services as Total Waste Management (“TWM”) programs, retail services, laboratory packing, less-than-truck-load (“LTL”) service and Household Hazardous Waste (“HHW”) collection. (4) Includes such services as site assessment, onsite treatment, project management and remedial action planning and execution. (5) Includes such services as emergency response and marine. |
Reconciliation of Net Income to Adjusted EBITDA and adjusted EBITDA by operating segment | Three Months Ended March 31, $s in thousands 2017 2016 Net income $ $ Income tax expense Interest expense Interest income ) ) Foreign currency gain ) ) Other income ) ) Depreciation and amortization of plant and equipment Amortization of intangibles Stock-based compensation Accretion and non-cash adjustment of closure & post-closure liabilities Adjusted EBITDA $ $ Three Months Ended March 31, $s in thousands 2017 2016 Adjusted EBITDA: Environmental Services $ $ Field & Industrial Services Corporate ) ) Total $ $ |
Summary of revenues by geographic location | Three Months Ended March 31, $s in thousands 2017 2016 United States $ $ Canada Total revenue $ $ |
Schedule of long-lived assets by geographic location | March 31, December 31, $s in thousands 2017 2016 United States $ Canada Total long-lived assets $ $ |
ACCUMULATED OTHER COMPREHENSI34
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | $ 280,024 |
Balance at the end | 283,516 |
Foreign Currency Translation | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (12,649) |
Other comprehensive income before reclassifications, net of tax | 439 |
Other comprehensive income | 439 |
Balance at the end | (12,210) |
Unrealized Loss on Interest Rate Hedge | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (2,076) |
Other comprehensive income before reclassifications, net of tax | 53 |
Amounts reclassified out of AOCI, net of tax (1) | 481 |
Other comprehensive income | 534 |
Balance at the end | (1,542) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (14,725) |
Other comprehensive income before reclassifications, net of tax | 492 |
Amounts reclassified out of AOCI, net of tax (1) | 481 |
Other comprehensive income | 973 |
Balance at the end | $ (13,752) |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) -Reclassifications Line Items (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reclassification adjustments | ||
Interest expense | $ 4,130,000 | $ 4,559,000 |
Unrealized 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 | 3,000,000 | |
Amounts in AOCI expected to be recognized over the next 12 months, net of taxes | 1,900,000 | |
Unrealized Loss on Interest Rate Hedge | Interest rate swap agreement | Reclassification out of accumulated other comprehensive income | ||
Reclassification adjustments | ||
Interest expense | 740,000 | 826,000 |
Interest expense, net of tax | $ 481,000 | $ 536,000 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
RECEIVABLES | ||
Trade | $ 80,867 | $ 84,487 |
Unbilled revenue | 12,105 | 13,835 |
Other | 2,578 | 831 |
Total receivables | 95,550 | 99,153 |
Allowance for doubtful accounts | (2,163) | (2,334) |
Receivables, net | $ 93,387 | $ 96,819 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
Interest rate swap agreement | |||
Assets measured at fair value on a recurring basis | |||
Initial notional amount | $ 250,000 | ||
Other Observable Inputs (Level 2) | Variable-rate debt | |||
Assets measured at fair value on a recurring basis | |||
Liabilities fair value disclosure | $ 280,400 | ||
Recurring | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 5,794 | $ 5,787 | |
Liabilities fair value disclosure | 2,376 | 3,198 | |
Recurring | Interest rate swap agreement | |||
Assets measured at fair value on a recurring basis | |||
Liabilities fair value disclosure | 2,376 | 3,198 | |
Recurring | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 4,082 | 4,080 | |
Recurring | Money market funds | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 1,712 | 1,707 | |
Recurring | Quoted Prices in Active Markets (Level 1) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 2,318 | 2,314 | |
Recurring | Quoted Prices in Active Markets (Level 1) | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 606 | 607 | |
Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 1,712 | 1,707 | |
Recurring | Other Observable Inputs (Level 2) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 3,476 | 3,473 | |
Liabilities fair value disclosure | 2,376 | 3,198 | |
Recurring | Other Observable Inputs (Level 2) | Interest rate swap agreement | |||
Assets measured at fair value on a recurring basis | |||
Liabilities fair value disclosure | 2,376 | 3,198 | |
Recurring | Other Observable Inputs (Level 2) | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | $ 3,476 | $ 3,473 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 399,211 | $ 393,145 | |
Accumulated depreciation and amortization | (173,451) | (166,908) | |
Property and equipment, net | 225,760 | 226,237 | |
Depreciation and amortization of plant and equipment | 6,633 | $ 5,904 | |
Cell development costs | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 128,927 | 128,821 | |
Land and improvements | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 34,343 | 34,285 | |
Buildings and improvements | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 78,108 | 78,081 | |
Railcars | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 17,299 | 17,299 | |
Vehicles and other equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 111,962 | 110,267 | |
Construction in progress | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 28,572 | $ 24,392 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Changes in goodwill | |
Balance at the beginning of the period | $ 193,621 |
Foreign currency translation | 144 |
Balance at the end of the period | 193,765 |
Environmental Services | |
Changes in goodwill | |
Balance at the beginning of the period | 149,490 |
Foreign currency translation | 144 |
Balance at the end of the period | 149,634 |
Field & Industrial Services | |
Changes in goodwill | |
Balance at the beginning of the period | 44,131 |
Balance at the end of the period | $ 44,131 |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Intangible Assets | |||
Amortizing intangible assets, Cost | $ 214,639 | $ 214,373 | |
Accumulated amortization | (34,512) | (31,788) | |
Amortizing intangible assets, Net | 180,127 | 182,585 | |
Total intangible assets, cost | 266,417 | 266,144 | |
Total intangible assets, net | 231,905 | 234,356 | |
Amortization of intangibles | 2,670 | $ 2,610 | |
Permits and licenses | |||
Intangible Assets | |||
Nonamortizing intangible assets | 51,650 | 51,645 | |
Tradename | |||
Intangible Assets | |||
Nonamortizing intangible assets | 128 | 126 | |
Permits, licenses and lease | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 110,517 | 110,341 | |
Accumulated amortization | (10,170) | (9,462) | |
Amortizing intangible assets, Net | 100,347 | 100,879 | |
Customer relationships | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 84,740 | 84,711 | |
Accumulated amortization | (15,920) | (14,519) | |
Amortizing intangible assets, Net | 68,820 | 70,192 | |
Technology - formulae and processes | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 6,827 | 6,770 | |
Accumulated amortization | (1,371) | (1,305) | |
Amortizing intangible assets, Net | 5,456 | 5,465 | |
Customer backlog | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 3,652 | 3,652 | |
Accumulated amortization | (1,017) | (926) | |
Amortizing intangible assets, Net | 2,635 | 2,726 | |
Tradename | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 4,318 | 4,318 | |
Accumulated amortization | (4,009) | (3,650) | |
Amortizing intangible assets, Net | 309 | 668 | |
Developed software | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 2,910 | 2,907 | |
Accumulated amortization | (1,073) | (994) | |
Amortizing intangible assets, Net | 1,837 | 1,913 | |
Non-compete agreements | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 747 | 747 | |
Accumulated amortization | (746) | (742) | |
Amortizing intangible assets, Net | 1 | 5 | |
Internet domain and website | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 540 | 540 | |
Accumulated amortization | (79) | (72) | |
Amortizing intangible assets, Net | 461 | 468 | |
Database | |||
Intangible Assets | |||
Amortizing intangible assets, Cost | 388 | 387 | |
Accumulated amortization | (127) | (118) | |
Amortizing intangible assets, Net | $ 261 | $ 269 |
DEBT - Schedule (Details)
DEBT - Schedule (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Term loan | $ 278,314 | $ 283,040 |
Unamortized discount and debt issuance costs | (5,281) | (5,678) |
Total debt | 273,033 | 277,362 |
Current portion of long-term debt | (2,862) | (2,903) |
Long-term debt | $ 270,171 | $ 274,459 |
DEBT - Paragraph (Details)
DEBT - Paragraph (Details) - USD ($) $ in Millions | Apr. 18, 2017 | Jun. 17, 2014 | Mar. 31, 2017 |
Former Credit Agreement | |||
DEBT | |||
Maximum borrowing capacity | $ 540 | ||
Term Loan | |||
DEBT | |||
Amount of debt hedged | $ 205 | ||
Debt instrument hedged (as a percent) | 74.00% | ||
Former Term Loan | |||
DEBT | |||
Maximum borrowing capacity | $ 415 | ||
Effective interest rate (as a percent) | 4.75% | ||
Former Term Loan | Base rate | |||
DEBT | |||
Percentage points added to the reference rate | 2.00% | ||
Former Term Loan | LIBOR | |||
DEBT | |||
Percentage points added to the reference rate | 3.00% | ||
Letter of credit | |||
DEBT | |||
Maximum borrowing capacity | $ 50 | ||
Former Revolving Credit Facility | |||
DEBT | |||
Maximum borrowing capacity | $ 125 | ||
Amount outstanding | $ 0 | ||
New Credit Agreement, Revolving Credit Facility | Subsequent event | |||
DEBT | |||
Maximum borrowing capacity | $ 500 | ||
Contractual term | 5 years | ||
New Credit Agreement, Letter Of Credit | Subsequent event | |||
DEBT | |||
Maximum borrowing capacity | $ 75 |
CLOSURE AND POST-CLOSURE OBLI43
CLOSURE AND POST-CLOSURE OBLIGATIONS - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Changes to reported closure and post-closure obligations | |||
Closure and post-closure obligations, beginning of period | $ 75,082 | ||
Accretion expense | 1,073 | $ 1,024 | |
Payments | (270) | ||
Foreign currency translation | 14 | ||
Closure and post-closure obligations, end of period | 75,899 | ||
Less current portion | (2,257) | $ (2,256) | |
Long-term portion | $ 73,642 | $ 72,826 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
INCOME TAXES | ||
Effective tax rate (as a percent) | 37.30% | 38.40% |
Provision for income taxes | $ 3,079 | $ 4,684 |
Accounting Accounting Standards Update 2016-09 | ||
INCOME TAXES | ||
Provision for income taxes | $ 68 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic | ||
Net income, basic | $ 5,185 | $ 7,517 |
Weighted average basic shares outstanding | 21,725 | 21,684 |
Earnings per share (in dollars per share) | $ 0.24 | $ 0.35 |
Diluted | ||
Net income, diluted | $ 5,185 | $ 7,517 |
Weighted average basic shares outstanding | 21,725 | 21,684 |
Dilutive effect of stock-based awards (in shares) | 120 | 61 |
Weighted average diluted shares outstanding | 21,845 | 21,745 |
Earnings per share (in dollars per share) | $ 0.24 | $ 0.35 |
Anti-dilutive shares excluded from calculation | 112 | 356 |
EQUITY - Stock Repurchase Progr
EQUITY - Stock Repurchase Program (Details) $ in Millions | Jun. 01, 2016USD ($) |
EQUITY | |
Authorized repurchase amount of outstanding common stock | $ 25 |
EQUITY - Omnibus Incentive Plan
EQUITY - Omnibus Incentive Plan (Details) - Omnibus Plan - shares | Mar. 31, 2017 | May 27, 2015 |
Stock-Based Compensation Plans | ||
Number of shares authorized for grant | 1,500,000 | |
Number of shares available for future grant | 1,159,404 |
EQUITY - PSUs, Restricted Stock
EQUITY - PSUs, Restricted Stock and RSU (Details) - USD ($) | Jan. 02, 2017 | Mar. 31, 2017 |
PSUs | ||
Stock-Based Compensation Plans | ||
Performance period | 3 years | |
Assumptions used in Monte Carlo simulation | ||
Stock price on grant date | $ 49.15 | |
Expected term (years) | 3 years | |
Expected volatility (as a percent) | 31.00% | |
Risk-free interest rate (as a percent) | 1.50% | |
Expected dividend yield (as a percent) | 1.50% | |
Shares | ||
Outstanding at the beginning of the year (in shares) | 19,463 | |
Granted (in shares) | 11,500 | 11,500 |
Outstanding at the end of the year (in shares) | 30,963 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 48.62 | |
Granted (in dollars per share) | $ 62.45 | 62.45 |
Outstanding at the end of the period (in dollars per share) | $ 53.76 | |
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) | 55,201 | |
Granted (in shares) | 19,100 | |
Vested (in shares) | (6,293) | |
Cancelled, expired or forfeited (in shares) | (166) | |
Outstanding at the end of the year (in shares) | 67,842 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 42.78 | |
Granted (in dollars per share) | 49.15 | |
Vested (in dollars per share) | 46.18 | |
Cancelled, expired or forfeited (in dollars per share) | 49.97 | |
Outstanding at the end of the period (in dollars per share) | $ 44.24 | |
RSUs | ||
Shares | ||
Outstanding at the beginning of the year (in shares) | 19,930 | |
Granted (in shares) | 34,870 | |
Vested (in shares) | (6,456) | |
Cancelled, expired or forfeited (in shares) | (640) | |
Outstanding at the end of the year (in shares) | 47,704 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 39.10 | |
Granted (in dollars per share) | 47.93 | |
Vested (in dollars per share) | 39.10 | |
Cancelled, expired or forfeited (in dollars per share) | 39.10 | |
Outstanding at the end of the period (in dollars per share) | $ 45.56 |
EQUITY - Stock Options (Details
EQUITY - Stock Options (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Shares | |
Exercised (in shares) | shares | (21,327) |
Weighted Average Exercise Price | |
Exercised (in dollars per share) | $ / shares | $ 28.73 |
Stock options | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 446,498 |
Granted (in shares) | shares | 34,600 |
Exercised (in shares) | shares | (21,327) |
Cancelled, expired or forfeited (in shares) | shares | (4,446) |
Outstanding at the end of the period (in shares) | shares | 455,325 |
Exercisable at the end of the period (in shares) | shares | 253,615 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 36.49 |
Granted (in dollars per share) | $ / shares | 49.15 |
Exercised (in dollars per share) | $ / shares | 28.73 |
Cancelled, expired or forfeited (in dollars per share) | $ / shares | 42.10 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 37.76 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 35.87 |
EQUITY - Treasury Stock (Detail
EQUITY - Treasury Stock (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Treasury Stock | |
Repurchase of common stock (in shares) | 1,569 |
Average cost of repurchase (in dollars per share) | $ / shares | $ 48.50 |
Number of options exercised (in shares) | 21,327 |
Weighted-average exercise price of options exercised (in dollars per share) | $ / shares | $ 28.73 |
Number of options exercised via net share settlement | 2,938 |
OPERATING SEGMENTS - Summarized
OPERATING SEGMENTS - Summarized Financial Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
OPERATING SEGMENTS | |||
Number of reportable segments | segment | 2 | ||
Total revenue | $ 110,234 | $ 113,318 | |
Depreciation, amortization and accretion | 10,376 | 9,538 | |
Capital expenditures | 7,151 | 7,219 | |
Total assets | 771,726 | 768,225 | $ 776,400 |
Treatment & Disposal Revenue | |||
OPERATING SEGMENTS | |||
Total revenue | 71,340 | 69,476 | |
Transportation and Logistics | |||
OPERATING SEGMENTS | |||
Total revenue | 17,920 | 20,187 | |
Industrial Cleaning | |||
OPERATING SEGMENTS | |||
Total revenue | 4,219 | 4,271 | |
Technical Services | |||
OPERATING SEGMENTS | |||
Total revenue | 15,662 | 17,605 | |
Remediation | |||
OPERATING SEGMENTS | |||
Total revenue | 606 | 838 | |
Other | |||
OPERATING SEGMENTS | |||
Total revenue | 487 | 941 | |
Corporate | |||
OPERATING SEGMENTS | |||
Depreciation, amortization and accretion | 128 | 122 | |
Capital expenditures | 899 | 880 | |
Total assets | 58,421 | 60,661 | |
Environmental Services | Operating Segment | |||
OPERATING SEGMENTS | |||
Total revenue | 81,303 | 81,524 | |
Depreciation, amortization and accretion | 8,790 | 8,079 | |
Capital expenditures | 4,214 | 5,839 | |
Total assets | 594,310 | 586,668 | |
Environmental Services | Operating Segment | Treatment & Disposal Revenue | |||
OPERATING SEGMENTS | |||
Total revenue | 68,703 | 66,724 | |
Environmental Services | Operating Segment | Transportation and Logistics | |||
OPERATING SEGMENTS | |||
Total revenue | 12,600 | 14,800 | |
Field & Industrial Services | Operating Segment | |||
OPERATING SEGMENTS | |||
Total revenue | 28,931 | 31,794 | |
Depreciation, amortization and accretion | 1,458 | 1,337 | |
Capital expenditures | 2,038 | 500 | |
Total assets | 118,995 | 120,896 | |
Field & Industrial Services | Operating Segment | Treatment & Disposal Revenue | |||
OPERATING SEGMENTS | |||
Total revenue | 2,637 | 2,752 | |
Field & Industrial Services | Operating Segment | Transportation and Logistics | |||
OPERATING SEGMENTS | |||
Total revenue | 5,320 | 5,387 | |
Field & Industrial Services | Operating Segment | Industrial Cleaning | |||
OPERATING SEGMENTS | |||
Total revenue | 4,219 | 4,271 | |
Field & Industrial Services | Operating Segment | Technical Services | |||
OPERATING SEGMENTS | |||
Total revenue | 15,662 | 17,605 | |
Field & Industrial Services | Operating Segment | Remediation | |||
OPERATING SEGMENTS | |||
Total revenue | 606 | 838 | |
Field & Industrial Services | Operating Segment | Other | |||
OPERATING SEGMENTS | |||
Total revenue | $ 487 | $ 941 |
OPERATING SEGMENTS - Reconcilia
OPERATING SEGMENTS - Reconciliation of EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reconciliation of Net Income to Adjusted EBITDA | ||
Net income | $ 5,185 | $ 7,517 |
Income tax expense | 3,079 | 4,684 |
Interest expense | 4,130 | 4,559 |
Interest income | (10) | (49) |
Foreign currency gain | (88) | (759) |
Other income | (137) | (169) |
Depreciation and amortization of plant and equipment | 6,633 | 5,904 |
Amortization of intangibles | 2,670 | 2,610 |
Stock-based compensation | 918 | 795 |
Accretion and non-cash adjustment of closure & post-closure liabilities | 1,073 | 1,024 |
Adjusted EBITDA | 23,453 | 26,116 |
Operating Segment | Environmental Services | ||
Reconciliation of Net Income to Adjusted EBITDA | ||
Adjusted EBITDA | 31,856 | 33,052 |
Operating Segment | Field & Industrial Services | ||
Reconciliation of Net Income to Adjusted EBITDA | ||
Adjusted EBITDA | 2,064 | 3,678 |
Corporate | ||
Reconciliation of Net Income to Adjusted EBITDA | ||
Adjusted EBITDA | $ (10,467) | $ (10,614) |
OPERATING SEGMENTS - Revenue an
OPERATING SEGMENTS - Revenue and Long-lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Revenue and Long-Lived Assets Outside of the United States | |||
Total revenue | $ 110,234 | $ 113,318 | |
Total long- lived assets | 457,665 | $ 460,593 | |
United States | |||
Revenue and Long-Lived Assets Outside of the United States | |||
Total revenue | 96,192 | 103,191 | |
Total long- lived assets | 402,668 | 405,767 | |
Canada | |||
Revenue and Long-Lived Assets Outside of the United States | |||
Total revenue | 14,042 | $ 10,127 | |
Total long- lived assets | $ 54,997 | $ 54,826 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 28, 2017 | Apr. 18, 2017 | Apr. 03, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 17, 2014 |
SUBSEQUENT EVENTS | |||||||
Dividend paid in cash | $ 3,923 | $ 3,918 | |||||
Letter of credit | |||||||
Debt Refinancing | |||||||
Maximum borrowing capacity | $ 50,000 | ||||||
Subsequent event | |||||||
SUBSEQUENT EVENTS | |||||||
Quarterly dividend declared (in dollars per share) | $ 0.18 | ||||||
Dividend paid in cash | $ 3,900 | ||||||
Subsequent event | Forecast | |||||||
Debt Refinancing | |||||||
Non-cash charge to earnings for unamortized discount and debt issuance costs | $ 5,400 | ||||||
Subsequent event | New Credit Agreement, Revolving Credit Facility | |||||||
Debt Refinancing | |||||||
Maximum borrowing capacity | $ 500,000 | ||||||
Contractual term | 5 years | ||||||
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% | ||||||
Maximum consolidated senior secured leverage ratio | 3.50 | ||||||
Minimum consolidated senior secured leverage ratio | 3 | ||||||
Subsequent event | New Credit Agreement, Revolving Credit Facility | Minimum | |||||||
Debt Refinancing | |||||||
Commitment fee (as a percent) | 0.175% | ||||||
Subsequent event | New Credit Agreement, Revolving Credit Facility | Maximum | |||||||
Debt Refinancing | |||||||
Commitment fee (as a percent) | 0.35% | ||||||
Subsequent event | New Credit Agreement, Letter Of Credit | |||||||
Debt Refinancing | |||||||
Maximum borrowing capacity | $ 75,000 |