Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 25, 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 | Sep. 30, 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 | Q3 | |
Trading Symbol | ECOL | |
Entity Common Stock, Shares Outstanding | 21,849,165 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 9,244 | $ 7,015 |
Receivables, net | 117,140 | 96,819 |
Prepaid expenses and other current assets | 10,463 | 7,458 |
Income taxes receivable | 2,524 | 4,076 |
Total current assets | 139,371 | 115,368 |
Property and equipment, net | 230,874 | 226,237 |
Restricted cash and investments | 5,812 | 5,787 |
Intangible assets, net | 228,736 | 234,356 |
Goodwill | 194,948 | 193,621 |
Other assets | 2,910 | 1,031 |
Total assets | 802,651 | 776,400 |
Current Liabilities: | ||
Accounts payable | 13,560 | 13,948 |
Deferred revenue | 12,237 | 7,820 |
Accrued liabilities | 26,821 | 22,605 |
Accrued salaries and benefits | 13,497 | 10,720 |
Income taxes payable | 1,319 | 165 |
Current portion of closure and post-closure obligations | 2,271 | 2,256 |
Short-term borrowings | 2,177 | |
Current portion of long-term debt | 2,903 | |
Total current liabilities | 69,705 | 62,594 |
Long-term closure and post-closure obligations | 74,918 | 72,826 |
Long-term debt | 277,000 | 274,459 |
Other long-term liabilities | 4,101 | 5,164 |
Deferred income taxes | 81,265 | 81,333 |
Total liabilities | 506,989 | 496,376 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock $0.01 par value, 50,000 authorized; 21,849 and 21,780 shares issued, respectively | 218 | 218 |
Additional paid-in capital | 176,523 | 172,704 |
Retained earnings | 128,699 | 121,879 |
Treasury stock, at cost, 2 and 7 shares, respectively | (68) | (52) |
Accumulated other comprehensive loss | (9,710) | (14,725) |
Total stockholders' equity | 295,662 | 280,024 |
Total liabilities and stockholders' equity | $ 802,651 | $ 776,400 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 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 | 21,849 | 21,780 |
Treasury stock, shares | 2 | 7 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 134,054 | $ 124,824 | $ 370,345 | $ 360,493 |
Direct operating costs | 96,321 | 85,470 | 264,843 | 249,025 |
Gross profit | 37,733 | 39,354 | 105,502 | 111,468 |
Selling, general and administrative expenses | 22,444 | 18,439 | 62,158 | 57,683 |
Operating income | 15,289 | 20,915 | 43,344 | 53,785 |
Other income (expense): | ||||
Interest income | 18 | 8 | 49 | 90 |
Interest expense | (2,783) | (4,288) | (15,387) | (13,150) |
Foreign currency gain (loss) | 275 | (224) | 521 | 192 |
Other | 234 | (19) | 537 | 2,480 |
Total other expense | (2,256) | (4,523) | (14,280) | (10,388) |
Income before income taxes | 13,033 | 16,392 | 29,064 | 43,397 |
Income tax expense | 4,668 | 6,278 | 10,465 | 16,828 |
Net income | $ 8,365 | $ 10,114 | $ 18,599 | $ 26,569 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.38 | $ 0.47 | $ 0.86 | $ 1.22 |
Diluted (in dollars per share) | $ 0.38 | $ 0.46 | $ 0.85 | $ 1.22 |
Shares used in earnings per share calculation: | ||||
Basic (in shares) | 21,774 | 21,714 | 21,750 | 21,700 |
Diluted (in shares) | 21,931 | 21,804 | 21,893 | 21,780 |
Dividends paid per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.54 | $ 0.54 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 8,365 | $ 10,114 | $ 18,599 | $ 26,569 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain | 2,436 | (734) | 4,427 | 2,555 |
Net changes in interest rate hedge, net of taxes of $134, $253, $317, and ($1,063), respectively | 249 | 469 | 588 | (1,976) |
Comprehensive income, net of tax | $ 11,050 | $ 9,849 | $ 23,614 | $ 27,148 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other comprehensive income (loss): | ||||
Net changes in interest rate hedge, tax | $ 134 | $ 253 | $ 317 | $ (1,063) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 18,599 | $ 26,569 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 21,007 | 18,561 |
Amortization of intangible assets | 7,586 | 7,907 |
Accretion of closure and post-closure obligations | 3,245 | 3,081 |
Gain on disposition of business | (2,035) | |
Unrealized foreign currency gain | (1,500) | (381) |
Deferred income taxes | (1,011) | (2,832) |
Share-based compensation expense | 2,954 | 2,182 |
Net (gain) loss on disposition of assets | 287 | (228) |
Amortization and write-off of debt issuance costs | 5,806 | 1,583 |
Amortization and write-off of debt discount | 667 | 111 |
Changes in assets and liabilities: | ||
Receivables | (20,142) | 8,713 |
Income taxes receivable | 1,592 | 1,102 |
Other assets | (2,638) | 395 |
Accounts payable and accrued liabilities | 6,174 | (6,560) |
Deferred revenue | 4,228 | (1,942) |
Accrued salaries and benefits | 2,676 | 126 |
Income taxes payable | 1,112 | 63 |
Closure and post-closure obligations | (1,277) | (32) |
Net cash provided by operating activities | 49,365 | 56,383 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (26,354) | (22,550) |
Deposits on Vernon acquisition | (5,049) | |
Business acquisition (net of cash acquired) | (4,934) | |
Purchases of restricted cash and investments | (832) | (1,040) |
Proceeds from divestitures (net of cash divested) | 2,723 | |
Proceeds from sale of restricted cash and investments | 807 | 978 |
Proceeds from sale of property and equipment | 957 | 524 |
Net cash used in investing activities | (25,422) | (29,348) |
Cash flows from financing activities: | ||
Payments on long-term debt | (287,040) | (17,326) |
Proceeds from long-term debt | 281,000 | |
Payment on short-term borrowings | (13,438) | (30,546) |
Proceeds from short-term borrowings | 11,260 | 32,849 |
Dividends paid | (11,778) | (11,754) |
Proceeds from exercise of stock options | 1,050 | 229 |
Payment of equipment financing obligations | (268) | |
Other | (121) | (188) |
Deferred financing costs paid | (2,967) | |
Net cash used in financing activities | (22,302) | (26,736) |
Effect of foreign exchange rate changes on cash | 588 | 95 |
Increase in cash and cash equivalents | 2,229 | 394 |
Cash and cash equivalents at beginning of period | 7,015 | 5,989 |
Cash and cash equivalents at end of period | 9,244 | 6,383 |
Supplemental Disclosures | ||
Income taxes paid, net of receipts | 9,274 | 18,600 |
Interest paid | 8,981 | 11,430 |
Non-cash investing and financing activities: | ||
Capital expenditures in accounts payable | 1,044 | 3,855 |
Restricted stock issued from treasury shares | $ 113 | $ 415 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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. 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 currently 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 currently 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 currently 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 ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently anticipates adopting this ASU using the modified retrospective method. 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 will adopt the ASU, as amended, effective January 1, 2018. To assess the impact of ASU 2014-09, we have read the amended guidance, attended trainings and have consulted with external accounting professionals on a regular basis to assist with the understanding and interpretation of the ASU to our revenue recognition. The Company has completed its review of customer contracts in each of its operating segments for all significant service lines and has reached conclusions on key accounting assessments related to the ASU. Based on our review of the Company’s treatment and disposal contracts, and in light of the shift from a “risks and rewards” based model under ASC 605 to a “control” based model under Topic 606, we have determined that it is necessary to further assess the precise moment in time when control of waste transfers, from the customer’s perspective. The timing of when we recognize treatment and disposal revenue under Topic 606 may be different, based on the conclusions reached in our assessments, from the timing of when we currently recognize treatment and disposal revenue under ASC 605; however, any change in timing is expected to result in immaterial differences in the amount of revenue recognized in any given period. We continue to perform additional analysis on revenue recognized from our managed services, retail, and remediation lines of business to finalize our conclusions. Additionally, under ASU 2014-09, the principal vs. agent considerations differ from the current guidance and are more focused on the control aspect of the relationship and we continue to assess the level of impact this guidance may have on our various revenue streams. As we finalize our analysis and implementation of ASU 2014-09, we continue to identify and implement appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. Additionally, the Company continues to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession to adjust the Company’s assessment and implementation plans accordingly. While the Company continues to assess all potential impacts of adopting ASU 2014-09, including those mentioned above, based upon information available to date, the Company does not expect the adoption of the ASU to have a material impact on either the timing or recognition of revenues; however, the full extent of the impact is subject to the completion of our assessment. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 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 Currency on Interest Rate Translation Hedge Total Balance at December 31, 2016 $ (12,649) $ (2,076) $ (14,725) Other comprehensive income (loss) before reclassifications, net of tax 4,427 (593) 3,834 Amounts reclassified out of AOCI, net of tax (1) — 1,181 1,181 Other comprehensive income, net 4,427 588 5,015 Balance at September 30, 2017 $ (8,222) $ (1,488) $ (9,710) (1) Before-tax reclassifications of $474,000 ($308,000 after-tax) and $1.8 million ( $1.2 million after-tax) for the three and nine months ended September 30, 2017, respectively, and before-tax reclassifications of $798,000 ($519,000 after-tax) and $2.4 million ($1.6 million after-tax) for the three and nine months ended September 30, 2016, 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 $1.9 million ($1.2 million after-tax). |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 9 Months Ended |
Sep. 30, 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 or nine months ended September 30, 2017 or the three or nine months ended September 30, 2016. No customer accounted for more than 10% of total trade receivables as of September 30, 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 | 9 Months Ended |
Sep. 30, 2017 | |
RECEIVABLES | |
RECEIVABLES | NOTE 4. RECEIVABLES Receivables consisted of the following: September 30, December 31, $s in thousands 2017 2016 Trade $ 97,012 $ Unbilled revenue 18,819 Other 3,905 Total receivables 119,736 99,153 Allowance for doubtful accounts (2,596) Receivables, net $ 117,140 $ 96,819 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 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 and accrued liabilities 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 September 30, 2017, the carrying value of the Company’s variable-rate debt approximates fair value due to the short-term nature of the interest rates. The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following: September 30, 2017 Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ 1,004 $ 3,074 $ — $ 4,078 Money market funds (2) 1,734 — — 1,734 Total $ 2,738 $ 3,074 $ — $ 5,812 Liabilities: Interest rate swap agreement (3) $ — $ 2,293 $ — $ 2,293 Total $ — $ 2,293 $ — $ 2,293 December 31, 2016 Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ 607 $ 3,473 $ — $ 4,080 Money market funds (2) 1,707 — — 1,707 Total $ 2,314 $ 3,473 $ — $ 5,787 Liabilities: Interest rate swap agreement (3) $ — $ 3,198 $ — $ 3,198 Total $ — $ 3,198 $ — $ 3,198 (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 accumulated 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 interest rate swap continued to be effective following the termination of the Company’s senior secured credit agreement, dated June 17, 2014. 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 September 30, 2017 and December 31, 2016. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: September 30, December 31, $s in thousands 2017 2016 Cell development costs $ 141,522 $ 128,821 Land and improvements 36,302 34,285 Buildings and improvements 85,774 78,081 Railcars 17,299 17,299 Vehicles and other equipment 117,066 110,267 Construction in progress 21,535 24,392 Total property and equipment 419,498 393,145 Accumulated depreciation and amortization (188,624) (166,908) Property and equipment, net $ 230,874 $ 226,237 Depreciation and amortization expense for the three months ended September 30, 2017 and 2016 was $7.4 million and $6.5 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2017 and 2016 was $21.0 million and $18.6 million, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 7. GOODWILL AND INTANGIBLE ASSETS Changes in goodwill for the nine months ended September 30, 2017 consisted of the following: Field & Environmental Industrial $s in thousands Services Services Total Balance at December 31, 2016 $ 149,490 $ 44,131 $ 193,621 Foreign currency translation 1,327 — 1,327 Balance at September 30, 2017 $ 150,817 $ 44,131 $ 194,948 Intangible assets, net consisted of the following: September 30, 2017 December 31, 2016 Accumulated Accumulated $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: Permits, licenses and lease $ 111,961 $ (11,814) $ 100,147 $ $ $ Customer relationships 85,003 (18,781) 66,222 Technology - formulae and processes 7,296 (1,582) 5,714 Customer backlog 3,652 (1,200) 2,452 Tradename 4,318 (4,318) — Developed software 2,928 (1,246) 1,682 Non-compete agreements 748 (748) — Internet domain and website 540 (93) 447 Database 393 (148) 245 Total amortizing intangible assets 216,839 (39,930) 176,909 214,373 (31,788) Nonamortizing intangible assets: Permits and licenses 51,691 — 51,691 51,645 — 51,645 Tradename 136 — 136 126 — 126 Total intangible assets $ 268,666 $ (39,930) $ 228,736 $ 266,144 $ (31,788) $ 234,356 Amortization expense for the three months ended September 30, 2017 and 2016 was $2.3 million and $2.7 million, respectively. Amortization expense for the nine months ended September 30, 2017 and 2016 was $7.6 million and $7.9 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | NOTE 8. DEBT Long-term debt consisted of the following: September 30, December 31, $s in thousands 2017 2016 Revolving credit facility $ 277,000 $ — Former term loan — Unamortized discount and debt issuance costs — Total debt 277,000 Current portion of long-term debt — Long-term debt $ $ New Credit Agreement On April 18, 2017, the Company entered into a new senior secured credit agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender, that provides for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The New Credit Agreement also contains an accordion feature whereby the Company may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. In connection with the Company’s entry into the New Credit Agreement, the Company terminated its existing credit agreement with Wells Fargo, dated June 17, 2014 (the “Former Credit Agreement”). Immediately prior to the termination of the Former Credit Agreement, there were $278.3 million of term loans and no revolving loans outstanding under the Former Credit Agreement. No early termination penalties were incurred as a result of the termination of the Former Credit Agreement. The Company wrote off 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 through a one-time non-cash charge of $5.5 million to interest expense 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 credit 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), as set forth in the table below: Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 3.25 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% At September 30, 2017, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap, was 3.39%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable. In October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $195.0 million, or 70%, of the Revolving Credit Facility borrowings as of September 30, 2017. The interest rate swap agreement continued in place following the termination of the Company’s Former Credit Agreement. The critical terms of the interest rate swap and the forecasted transaction (periodic interest payments on the Company’s variable-rate debt) did not change as a result of the refinancing therefore the interest rate swap continues to qualify as a highly-effective cash flow hedge, with gains and losses deferred in accumulated other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. 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 and the New Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At September 30, 2017, there were $277.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (a) April 18, 2022 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (b) the date of termination of the entire revolving credit commitment (as defined in the New Credit Agreement) by us, and (c) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets. The Company has entered into a sweep arrangement whereby day-to-day cash requirements in excess of available cash balances are advanced to the Company on an as-needed basis with repayments of these advances automatically made from subsequent deposits to our cash operating accounts (the “Sweep Arrangement”). Total advances outstanding under the Sweep Arrangement are subject to the $25.0 million swingline loan sublimit under the Revolving Credit Facility. The Company’s revolving credit loans outstanding under the Revolving Credit Agreement are not subject to repayment through the Sweep Arrangement. As of September 30, 2017, there were no amounts outstanding subject to the Sweep Arrangement. As of September 30, 2017, the availability under the Revolving Credit Facility was $216.7 million with $6.3 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations. 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. At September 30, 2017, we were in compliance with all of the financial covenants in the New Credit Agreement. |
CLOSURE AND POST-CLOSURE OBLIGA
CLOSURE AND POST-CLOSURE OBLIGATIONS | 9 Months Ended |
Sep. 30, 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 Nine Months Ended $s in thousands September 30, 2017 September 30, 2017 Closure and post-closure obligations, beginning of period $ 76,611 $ 75,082 Accretion expense 1,090 3,245 Payments (591) (1,279) Foreign currency translation 79 141 Closure and post-closure obligations, end of period 77,189 77,189 Less current portion (2,271) (2,271) Long-term portion $ 74,918 $ 74,918 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 10. INCOME TAXES Our effective tax rate for the three months ended September 30, 2017 was 35.8%, down from 38.3% for the three months ended September 30, 2016. Our effective tax rate for the nine months ended September 30, 2017 was 36.0%, down from 38.8% for the nine months ended September 30, 2016. The decrease for the three and nine months ended September 30, 2017 compared with the three and nine months ended September 30, 2016 primarily reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate. The decrease was partially offset by a higher U.S. effective tax rate in the third quarter of 2017 as a result of the impact of nondeductible expenses due to the reduction of forecasted U.S. earnings as well as a higher overall effective state tax rate resulting from changes in our apportionment between the various states in which we operate. 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 2014 through 2016. EQ is also subject to examination by the IRS for tax year 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 approximately $43,000 and $120,000 for the three and nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 11. EARNINGS PER SHARE Three Months Ended September 30, 2017 2016 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income $ 8,365 $ 8,365 $ 10,114 $ 10,114 Weighted average basic shares outstanding 21,774 21,774 21,714 21,714 Dilutive effect of stock-based awards 157 90 Weighted average diluted shares outstanding 21,931 21,804 Earnings per share $ 0.38 $ 0.38 $ 0.47 $ 0.46 Anti-dilutive shares excluded from calculation 117 195 Nine Months Ended September 30, 2017 2016 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income $ 18,599 $ 18,599 $ 26,569 $ 26,569 Weighted average basic shares outstanding 21,750 21,750 21,700 21,700 Dilutive effect of stock-based awards 143 80 Weighted average diluted shares outstanding 21,893 21,780 Earnings per share $ 0.86 $ 0.85 $ 1.22 $ 1.22 Anti-dilutive shares excluded from calculation 115 267 |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 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 or nine months ended September 30, 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 September 30, 2017, 1,147,801 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 $ 49.15 Expected term (years) Expected volatility 31 % Risk-free interest rate 1.5 % Expected dividend yield 1.5 % A summary of our PSU, restricted stock and RSU activity for the nine months ended September 30, 2017 is as follows: PSUs Restricted Stock RSUs Weighted Weighted Weighted Average Average Average Grant Date Grant Date Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding as of December 31, 2016 19,463 $ 48.62 55,201 $ 42.78 19,930 $ 39.10 Granted 11,500 62.45 28,988 49.67 34,870 47.93 Vested — — (17,231) 46.36 (6,456) 39.10 Cancelled, expired or forfeited — — (257) 47.89 (1,193) 41.92 Outstanding as of September 30, 2017 30,963 $ 53.76 66,701 $ 44.83 47,151 $ 45.56 Stock Options A summary of our stock option activity for the nine months ended September 30, 2017 is as follows: Weighted Average Exercise Shares Price Outstanding as of December 31, 2016 446,498 $ 36.49 Granted 38,087 49.27 Exercised (49,200) 27.55 Cancelled, expired or forfeited (5,656) 41.46 Outstanding as of September 30, 2017 429,729 $ 38.58 Exercisable as of September 30, 2017 236,026 $ 37.33 Treasury Stock During the nine months ended September 30, 2017, the Company repurchased 2,502 shares of the Company’s common stock in connection with the net share settlement of employee equity awards at an average cost of $48.54 per share. During the nine months ended September 30, 2017, option holders exercised 49,200 options with a weighted-average exercise price of $27.55 per option, and 6,043 shares were tendered to option holders in connection with options exercised via net share settlement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 77,071 $ 2,595 $ — $ 79,666 Services Revenue: Transportation and Logistics (1) 20,590 4,955 — 25,545 Industrial Cleaning (2) — 4,328 — 4,328 Technical Services (3) — 20,314 — 20,314 Remediation (4) — 2,672 — 2,672 Other (5) — 1,529 — 1,529 Total Revenue $ 97,661 $ 36,393 $ — $ 134,054 Depreciation, amortization and accretion $ 9,342 $ 1,316 $ 118 $ 10,776 Capital expenditures $ 7,594 $ 561 $ 647 $ 8,802 Total assets $ 619,156 $ 124,053 $ 59,442 $ 802,651 Three Months Ended September 30, 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 70,719 $ 3,737 $ — $ 74,456 Services Revenue: Transportation and Logistics (1) 17,066 4,073 — 21,139 Industrial Cleaning (2) — 5,025 — 5,025 Technical Services (3) — 20,364 — 20,364 Remediation (4) — 3,326 — 3,326 Other (5) — 514 — 514 Total Revenue $ 87,785 $ 37,039 $ — $ 124,824 Depreciation, amortization and accretion $ 8,665 $ 1,356 $ 115 $ 10,136 Capital expenditures $ 1,960 $ 450 $ 546 $ 2,956 Total assets $ 589,841 $ 124,351 $ 59,118 $ 773,310 Nine Months Ended September 30, 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 217,012 $ 8,133 $ — $ 225,145 Services Revenue: Transportation and Logistics (1) 51,543 15,218 — 66,761 Industrial Cleaning (2) — 13,252 — 13,252 Technical Services (3) — 55,778 — 55,778 Remediation (4) — 6,495 — 6,495 Other (5) — 2,914 — 2,914 Total Revenue $ 268,555 $ 101,790 $ — $ 370,345 Depreciation, amortization and accretion $ 27,238 $ 4,225 $ 375 $ 31,838 Capital expenditures $ 21,204 $ 2,900 $ 2,250 $ 26,354 Total assets $ 619,156 $ 124,053 $ 59,442 $ 802,651 Nine Months Ended September 30, 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 204,352 $ 9,386 $ — $ 213,738 Services Revenue: Transportation and Logistics (1) 47,754 14,416 — 62,170 Industrial Cleaning (2) — 16,497 — 16,497 Technical Services (3) — 57,136 — 57,136 Remediation (4) — 8,816 — 8,816 Other (5) — 2,136 — 2,136 Total Revenue $ 252,106 $ 108,387 $ — $ 360,493 Depreciation, amortization and accretion $ 25,117 $ 4,070 $ 362 $ 29,549 Capital expenditures $ 18,309 $ 1,883 $ 2,358 $ 22,550 Total assets $ 589,841 $ 124,351 $ 59,118 $ 773,310 (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 September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 Net income $ 8,365 $ 10,114 $ 18,599 $ 26,569 Income tax expense 4,668 6,278 10,465 16,828 Interest expense 2,783 4,288 15,387 13,150 Interest income (18) (8) (49) (90) Foreign currency (gain) loss (275) 224 (521) (192) Other (income) expense (234) 19 (537) (2,480) Depreciation and amortization of plant and equipment 7,386 6,454 21,007 18,561 Amortization of intangibles 2,300 2,651 7,586 7,907 Stock-based compensation 995 605 2,954 2,182 Accretion and non-cash adjustment of closure & post-closure liabilities 1,090 1,031 3,245 3,081 Adjusted EBITDA $ 27,060 $ 31,656 $ 78,136 $ 85,516 Adjusted EBITDA, by operating segment, is as follows: Three Months Ended September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 Adjusted EBITDA: Environmental Services $ 35,524 $ 37,747 $ 102,022 $ 104,352 Field & Industrial Services 3,646 4,466 9,829 13,267 Corporate (12,110) (10,557) (33,715) (32,103) Total $ 27,060 $ 31,656 $ 78,136 $ 85,516 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 September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 United States $ 112,821 $ 111,005 $ 319,776 $ 325,379 Canada 21,233 13,819 50,569 35,114 Total revenue $ 134,054 $ 124,824 $ 370,345 $ 360,493 Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows: September 30, December 31, $s in thousands 2017 2016 United States $ 400,269 $ 405,767 Canada 59,341 54,826 Total long-lived assets $ 459,610 $ 460,593 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 15. SUBSEQUENT EVENTS Quarterly Dividend On October 2, 2017, we declared a quarterly dividend of $0.18 per common share to stockholders of record on October 20, 2017. The dividend was paid using cash on hand on October 27, 2017 in an aggregate amount of $3.9 million. |
GENERAL (Policies)
GENERAL (Policies) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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. 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 currently 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 currently 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 currently 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 ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently anticipates adopting this ASU using the modified retrospective method. 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 will adopt the ASU, as amended, effective January 1, 2018. To assess the impact of ASU 2014-09, we have read the amended guidance, attended trainings and have consulted with external accounting professionals on a regular basis to assist with the understanding and interpretation of the ASU to our revenue recognition. The Company has completed its review of customer contracts in each of its operating segments for all significant service lines and has reached conclusions on key accounting assessments related to the ASU. Based on our review of the Company’s treatment and disposal contracts, and in light of the shift from a “risks and rewards” based model under ASC 605 to a “control” based model under Topic 606, we have determined that it is necessary to further assess the precise moment in time when control of waste transfers, from the customer’s perspective. The timing of when we recognize treatment and disposal revenue under Topic 606 may be different, based on the conclusions reached in our assessments, from the timing of when we currently recognize treatment and disposal revenue under ASC 605; however, any change in timing is expected to result in immaterial differences in the amount of revenue recognized in any given period. We continue to perform additional analysis on revenue recognized from our managed services, retail, and remediation lines of business to finalize our conclusions. Additionally, under ASU 2014-09, the principal vs. agent considerations differ from the current guidance and are more focused on the control aspect of the relationship and we continue to assess the level of impact this guidance may have on our various revenue streams. As we finalize our analysis and implementation of ASU 2014-09, we continue to identify and implement appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. Additionally, the Company continues to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession to adjust the Company’s assessment and implementation plans accordingly. While the Company continues to assess all potential impacts of adopting ASU 2014-09, including those mentioned above, based upon information available to date, the Company does not expect the adoption of the ASU to have a material impact on either the timing or recognition of revenues; however, the full extent of the impact is subject to the completion of our assessment. |
ACCUMULATED OTHER COMPREHENSI24
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
Schedule of changes in accumulated other comprehensive income (loss) | Foreign Unrealized Loss Currency on Interest Rate Translation Hedge Total Balance at December 31, 2016 $ (12,649) $ (2,076) $ (14,725) Other comprehensive income (loss) before reclassifications, net of tax 4,427 (593) 3,834 Amounts reclassified out of AOCI, net of tax (1) — 1,181 1,181 Other comprehensive income, net 4,427 588 5,015 Balance at September 30, 2017 $ (8,222) $ (1,488) $ (9,710) Before-tax reclassifications of $474,000 ($308,000 after-tax) and $1.8 million ( $1.2 million after-tax) for the three and nine months ended September 30, 2017, respectively, and before-tax reclassifications of $798,000 ($519,000 after-tax) and $2.4 million ($1.6 million after-tax) for the three and nine months ended September 30, 2016, 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 $1.9 million ($1.2 million after-tax). |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
RECEIVABLES | |
Schedule of receivables | September 30, December 31, $s in thousands 2017 2016 Trade $ 97,012 $ Unbilled revenue 18,819 Other 3,905 Total receivables 119,736 99,153 Allowance for doubtful accounts (2,596) Receivables, net $ 117,140 $ 96,819 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | September 30, 2017 Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ 1,004 $ 3,074 $ — $ 4,078 Money market funds (2) 1,734 — — 1,734 Total $ 2,738 $ 3,074 $ — $ 5,812 Liabilities: Interest rate swap agreement (3) $ — $ 2,293 $ — $ 2,293 Total $ — $ 2,293 $ — $ 2,293 December 31, 2016 Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs $s in thousands (Level 1) (Level 2) (Level 3) Total Assets: Fixed-income securities (1) $ 607 $ 3,473 $ — $ 4,080 Money market funds (2) 1,707 — — 1,707 Total $ 2,314 $ 3,473 $ — $ 5,787 Liabilities: Interest rate swap agreement (3) $ — $ 3,198 $ — $ 3,198 Total $ — $ 3,198 $ — $ 3,198 (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. 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 accumulated 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 interest rate swap continued to be effective following the termination of the Company’s senior secured credit agreement, dated June 17, 2014. 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 September 30, 2017 and December 31, 2016. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | September 30, December 31, $s in thousands 2017 2016 Cell development costs $ 141,522 $ 128,821 Land and improvements 36,302 34,285 Buildings and improvements 85,774 78,081 Railcars 17,299 17,299 Vehicles and other equipment 117,066 110,267 Construction in progress 21,535 24,392 Total property and equipment 419,498 393,145 Accumulated depreciation and amortization (188,624) (166,908) Property and equipment, net $ 230,874 $ 226,237 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | Field & Environmental Industrial $s in thousands Services Services Total Balance at December 31, 2016 $ 149,490 $ 44,131 $ 193,621 Foreign currency translation 1,327 — 1,327 Balance at September 30, 2017 $ 150,817 $ 44,131 $ 194,948 |
Schedule of intangible assets, net | September 30, 2017 December 31, 2016 Accumulated Accumulated $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: Permits, licenses and lease $ 111,961 $ (11,814) $ 100,147 $ $ $ Customer relationships 85,003 (18,781) 66,222 Technology - formulae and processes 7,296 (1,582) 5,714 Customer backlog 3,652 (1,200) 2,452 Tradename 4,318 (4,318) — Developed software 2,928 (1,246) 1,682 Non-compete agreements 748 (748) — Internet domain and website 540 (93) 447 Database 393 (148) 245 Total amortizing intangible assets 216,839 (39,930) 176,909 214,373 (31,788) Nonamortizing intangible assets: Permits and licenses 51,691 — 51,691 51,645 — 51,645 Tradename 136 — 136 126 — 126 Total intangible assets $ 268,666 $ (39,930) $ 228,736 $ 266,144 $ (31,788) $ 234,356 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of long-term debt | September 30, December 31, $s in thousands 2017 2016 Revolving credit facility $ 277,000 $ — Former term loan — Unamortized discount and debt issuance costs — Total debt 277,000 Current portion of long-term debt — Long-term debt $ $ |
Schedule of interest margins based on the total net leverage ratio | Total Net Leverage Ratio LIBOR Rate Loans Interest Margin Base Rate Loans Interest Margin Equal to or greater than 3.25 to 1.00 2.00% 1.00% Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00 1.75% 0.75% Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00 1.50% 0.50% Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00 1.25% 0.25% Less than 1.00 to 1.00 1.00% 0.00% |
CLOSURE AND POST-CLOSURE OBLI30
CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
Schedule of changes to reported closure and post closure obligations | Three Months Ended Nine Months Ended $s in thousands September 30, 2017 September 30, 2017 Closure and post-closure obligations, beginning of period $ 76,611 $ 75,082 Accretion expense 1,090 3,245 Payments (591) (1,279) Foreign currency translation 79 141 Closure and post-closure obligations, end of period 77,189 77,189 Less current portion (2,271) (2,271) Long-term portion $ 74,918 $ 74,918 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
Schedule of earnings per share | Three Months Ended September 30, 2017 2016 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income $ 8,365 $ 8,365 $ 10,114 $ 10,114 Weighted average basic shares outstanding 21,774 21,774 21,714 21,714 Dilutive effect of stock-based awards 157 90 Weighted average diluted shares outstanding 21,931 21,804 Earnings per share $ 0.38 $ 0.38 $ 0.47 $ 0.46 Anti-dilutive shares excluded from calculation 117 195 Nine Months Ended September 30, 2017 2016 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Net income $ 18,599 $ 18,599 $ 26,569 $ 26,569 Weighted average basic shares outstanding 21,750 21,750 21,700 21,700 Dilutive effect of stock-based awards 143 80 Weighted average diluted shares outstanding 21,893 21,780 Earnings per share $ 0.86 $ 0.85 $ 1.22 $ 1.22 Anti-dilutive shares excluded from calculation 115 267 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EQUITY | |
Schedule of assumptions for determining the fair value for PSU awards using Monte Carlo simulation models | 2017 Stock price on grant date $ 49.15 Expected term (years) Expected volatility 31 % Risk-free interest rate 1.5 % Expected dividend yield 1.5 % |
Summary of PSU, restricted stock and RSU activity | PSUs Restricted Stock RSUs Weighted Weighted Weighted Average Average Average Grant Date Grant Date Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding as of December 31, 2016 19,463 $ 48.62 55,201 $ 42.78 19,930 $ 39.10 Granted 11,500 62.45 28,988 49.67 34,870 47.93 Vested — — (17,231) 46.36 (6,456) 39.10 Cancelled, expired or forfeited — — (257) 47.89 (1,193) 41.92 Outstanding as of September 30, 2017 30,963 $ 53.76 66,701 $ 44.83 47,151 $ 45.56 |
Summary of stock option activity | Weighted Average Exercise Shares Price Outstanding as of December 31, 2016 446,498 $ 36.49 Granted 38,087 49.27 Exercised (49,200) 27.55 Cancelled, expired or forfeited (5,656) 41.46 Outstanding as of September 30, 2017 429,729 $ 38.58 Exercisable as of September 30, 2017 236,026 $ 37.33 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
OPERATING SEGMENTS | |
Summary of financial information of our reportable segments | Three Months Ended September 30, 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 77,071 $ 2,595 $ — $ 79,666 Services Revenue: Transportation and Logistics (1) 20,590 4,955 — 25,545 Industrial Cleaning (2) — 4,328 — 4,328 Technical Services (3) — 20,314 — 20,314 Remediation (4) — 2,672 — 2,672 Other (5) — 1,529 — 1,529 Total Revenue $ 97,661 $ 36,393 $ — $ 134,054 Depreciation, amortization and accretion $ 9,342 $ 1,316 $ 118 $ 10,776 Capital expenditures $ 7,594 $ 561 $ 647 $ 8,802 Total assets $ 619,156 $ 124,053 $ 59,442 $ 802,651 Three Months Ended September 30, 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 70,719 $ 3,737 $ — $ 74,456 Services Revenue: Transportation and Logistics (1) 17,066 4,073 — 21,139 Industrial Cleaning (2) — 5,025 — 5,025 Technical Services (3) — 20,364 — 20,364 Remediation (4) — 3,326 — 3,326 Other (5) — 514 — 514 Total Revenue $ 87,785 $ 37,039 $ — $ 124,824 Depreciation, amortization and accretion $ 8,665 $ 1,356 $ 115 $ 10,136 Capital expenditures $ 1,960 $ 450 $ 546 $ 2,956 Total assets $ 589,841 $ 124,351 $ 59,118 $ 773,310 Nine Months Ended September 30, 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 217,012 $ 8,133 $ — $ 225,145 Services Revenue: Transportation and Logistics (1) 51,543 15,218 — 66,761 Industrial Cleaning (2) — 13,252 — 13,252 Technical Services (3) — 55,778 — 55,778 Remediation (4) — 6,495 — 6,495 Other (5) — 2,914 — 2,914 Total Revenue $ 268,555 $ 101,790 $ — $ 370,345 Depreciation, amortization and accretion $ 27,238 $ 4,225 $ 375 $ 31,838 Capital expenditures $ 21,204 $ 2,900 $ 2,250 $ 26,354 Total assets $ 619,156 $ 124,053 $ 59,442 $ 802,651 Nine Months Ended September 30, 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 204,352 $ 9,386 $ — $ 213,738 Services Revenue: Transportation and Logistics (1) 47,754 14,416 — 62,170 Industrial Cleaning (2) — 16,497 — 16,497 Technical Services (3) — 57,136 — 57,136 Remediation (4) — 8,816 — 8,816 Other (5) — 2,136 — 2,136 Total Revenue $ 252,106 $ 108,387 $ — $ 360,493 Depreciation, amortization and accretion $ 25,117 $ 4,070 $ 362 $ 29,549 Capital expenditures $ 18,309 $ 1,883 $ 2,358 $ 22,550 Total assets $ 589,841 $ 124,351 $ 59,118 $ 773,310 (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 September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 Net income $ 8,365 $ 10,114 $ 18,599 $ 26,569 Income tax expense 4,668 6,278 10,465 16,828 Interest expense 2,783 4,288 15,387 13,150 Interest income (18) (8) (49) (90) Foreign currency (gain) loss (275) 224 (521) (192) Other (income) expense (234) 19 (537) (2,480) Depreciation and amortization of plant and equipment 7,386 6,454 21,007 18,561 Amortization of intangibles 2,300 2,651 7,586 7,907 Stock-based compensation 995 605 2,954 2,182 Accretion and non-cash adjustment of closure & post-closure liabilities 1,090 1,031 3,245 3,081 Adjusted EBITDA $ 27,060 $ 31,656 $ 78,136 $ 85,516 Three Months Ended September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 Adjusted EBITDA: Environmental Services $ 35,524 $ 37,747 $ 102,022 $ 104,352 Field & Industrial Services 3,646 4,466 9,829 13,267 Corporate (12,110) (10,557) (33,715) (32,103) Total $ 27,060 $ 31,656 $ 78,136 $ 85,516 |
Summary of revenues by geographic location | Three Months Ended September 30, Nine Months Ended September 30, $s in thousands 2017 2016 2017 2016 United States $ 112,821 $ 111,005 $ 319,776 $ 325,379 Canada 21,233 13,819 50,569 35,114 Total revenue $ 134,054 $ 124,824 $ 370,345 $ 360,493 |
Schedule of long-lived assets by geographic location | September 30, December 31, $s in thousands 2017 2016 United States $ 400,269 $ 405,767 Canada 59,341 54,826 Total long-lived assets $ 459,610 $ 460,593 |
ACCUMULATED OTHER COMPREHENSI34
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | $ 280,024 |
Balance at the end | 295,662 |
Foreign Currency Translation | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (12,649) |
Other comprehensive income (loss) before reclassifications, net of tax | 4,427 |
Other comprehensive income | 4,427 |
Balance at the end | (8,222) |
Unrealized Loss on Interest Rate Hedge | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (2,076) |
Other comprehensive income (loss) before reclassifications, net of tax | (593) |
Amounts reclassified out of AOCI, net of tax (1) | 1,181 |
Other comprehensive income | 588 |
Balance at the end | (1,488) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated other comprehensive income (loss) | |
Balance at the beginning | (14,725) |
Other comprehensive income (loss) before reclassifications, net of tax | 3,834 |
Amounts reclassified out of AOCI, net of tax (1) | 1,181 |
Other comprehensive income | 5,015 |
Balance at the end | $ (9,710) |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) -Reclassifications Line Items (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification adjustments | ||||
Interest expense | $ 2,783,000 | $ 4,288,000 | $ 15,387,000 | $ 13,150,000 |
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 | 1,900,000 | 1,900,000 | ||
Amounts in AOCI expected to be recognized over the next 12 months, net of taxes | 1,200,000 | 1,200,000 | ||
Unrealized Loss on Interest Rate Hedge | Interest rate swap agreement | Reclassification out of accumulated other comprehensive income | ||||
Reclassification adjustments | ||||
Interest expense | 474,000 | 798,000 | 1,800,000 | 2,400,000 |
Interest expense, net of tax | $ 308,000 | $ 519,000 | $ 1,200,000 | $ 1,600,000 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
RECEIVABLES | ||
Trade | $ 97,012 | $ 84,487 |
Unbilled revenue | 18,819 | 13,835 |
Other | 3,905 | 831 |
Total receivables | 119,736 | 99,153 |
Allowance for doubtful accounts | (2,596) | (2,334) |
Receivables, net | $ 117,140 | $ 96,819 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 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 | ||
Recurring | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | $ 5,812 | $ 5,787 | |
Liabilities fair value disclosure | 2,293 | 3,198 | |
Recurring | Interest rate swap agreement | |||
Assets measured at fair value on a recurring basis | |||
Liabilities fair value disclosure | 2,293 | 3,198 | |
Recurring | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 4,078 | 4,080 | |
Recurring | Money market funds | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 1,734 | 1,707 | |
Recurring | Quoted Prices in Active Markets (Level 1) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 2,738 | 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 | 1,004 | 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 | 1,734 | 1,707 | |
Recurring | Other Observable Inputs (Level 2) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 3,074 | 3,473 | |
Liabilities fair value disclosure | 2,293 | 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 | 2,293 | 3,198 | |
Recurring | Other Observable Inputs (Level 2) | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | $ 3,074 | $ 3,473 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | $ 419,498 | $ 419,498 | $ 393,145 | ||
Accumulated depreciation and amortization | (188,624) | (188,624) | (166,908) | ||
Property and equipment, net | 230,874 | 230,874 | 226,237 | ||
Depreciation and amortization of plant and equipment | 7,386 | $ 6,454 | 21,007 | $ 18,561 | |
Cell development costs | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 141,522 | 141,522 | 128,821 | ||
Land and improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 36,302 | 36,302 | 34,285 | ||
Buildings and improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 85,774 | 85,774 | 78,081 | ||
Railcars | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 17,299 | 17,299 | 17,299 | ||
Vehicles and other equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | 117,066 | 117,066 | 110,267 | ||
Construction in progress | |||||
PROPERTY AND EQUIPMENT | |||||
Total property and equipment | $ 21,535 | $ 21,535 | $ 24,392 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Changes in goodwill | |
Balance at the beginning of the period | $ 193,621 |
Foreign currency translation | 1,327 |
Balance at the end of the period | 194,948 |
Environmental Services | |
Changes in goodwill | |
Balance at the beginning of the period | 149,490 |
Foreign currency translation | 1,327 |
Balance at the end of the period | 150,817 |
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 | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Intangible Assets | |||||
Amortizing intangible assets, Cost | $ 216,839 | $ 216,839 | $ 214,373 | ||
Accumulated amortization | (39,930) | (39,930) | (31,788) | ||
Amortizing intangible assets, Net | 176,909 | 176,909 | 182,585 | ||
Total intangible assets, cost | 268,666 | 268,666 | 266,144 | ||
Total intangible assets, net | 228,736 | 228,736 | 234,356 | ||
Amortization of intangibles | 2,300 | $ 2,651 | 7,586 | $ 7,907 | |
Permits and licenses | |||||
Intangible Assets | |||||
Nonamortizing intangible assets | 51,691 | 51,691 | 51,645 | ||
Tradename | |||||
Intangible Assets | |||||
Nonamortizing intangible assets | 136 | 136 | 126 | ||
Permits, licenses and lease | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 111,961 | 111,961 | 110,341 | ||
Accumulated amortization | (11,814) | (11,814) | (9,462) | ||
Amortizing intangible assets, Net | 100,147 | 100,147 | 100,879 | ||
Customer relationships | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 85,003 | 85,003 | 84,711 | ||
Accumulated amortization | (18,781) | (18,781) | (14,519) | ||
Amortizing intangible assets, Net | 66,222 | 66,222 | 70,192 | ||
Technology - Formulae and processes | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 7,296 | 7,296 | 6,770 | ||
Accumulated amortization | (1,582) | (1,582) | (1,305) | ||
Amortizing intangible assets, Net | 5,714 | 5,714 | 5,465 | ||
Customer backlog | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 3,652 | 3,652 | 3,652 | ||
Accumulated amortization | (1,200) | (1,200) | (926) | ||
Amortizing intangible assets, Net | 2,452 | 2,452 | 2,726 | ||
Tradename | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 4,318 | 4,318 | 4,318 | ||
Accumulated amortization | (4,318) | (4,318) | (3,650) | ||
Amortizing intangible assets, Net | 668 | ||||
Developed software | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 2,928 | 2,928 | 2,907 | ||
Accumulated amortization | (1,246) | (1,246) | (994) | ||
Amortizing intangible assets, Net | 1,682 | 1,682 | 1,913 | ||
Non-compete agreements | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 748 | 748 | 747 | ||
Accumulated amortization | (748) | (748) | (742) | ||
Amortizing intangible assets, Net | 5 | ||||
Internet domain and website | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 540 | 540 | 540 | ||
Accumulated amortization | (93) | (93) | (72) | ||
Amortizing intangible assets, Net | 447 | 447 | 468 | ||
Database | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 393 | 393 | 387 | ||
Accumulated amortization | (148) | (148) | (118) | ||
Amortizing intangible assets, Net | $ 245 | $ 245 | $ 269 |
DEBT - Schedule (Details)
DEBT - Schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Total debt | $ 277,000 | $ 277,362 |
Current portion of long-term debt | (2,903) | |
Long-term debt | 277,000 | 274,459 |
Revolving Credit Facility | ||
Long-term debt | ||
Term loan | $ 277,000 | |
Former Term Loan | ||
Long-term debt | ||
Term loan | 283,040 | |
Unamortized discount and debt issuance costs | $ (5,678) |
DEBT - Paragraph (Details)
DEBT - Paragraph (Details) - USD ($) $ in Thousands | Apr. 18, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Apr. 17, 2017 | Dec. 31, 2016 |
Sweep Arrangements | |||||
DEBT | |||||
Advances outstanding | $ 0 | $ 0 | |||
Interest Expense | |||||
DEBT | |||||
Amortization of Financing Costs and Discounts | 5,500 | ||||
Former Term Loan | |||||
DEBT | |||||
Amount outstanding | $ 278,300 | ||||
Term loan | $ 283,040 | ||||
Former Revolving Credit Facility | |||||
DEBT | |||||
Amount outstanding | $ 0 | ||||
Revolving credit facility | |||||
DEBT | |||||
Availability for borrowings under line of credit | 216,700 | 216,700 | |||
Line of credit issued in the form of a standby letters of credit | $ 6,300 | $ 6,300 | |||
Revolving Credit Facility | |||||
DEBT | |||||
Maximum borrowing capacity | $ 500,000 | ||||
Contractual term | 5 years | ||||
Accordion feature | $ 200,000 | ||||
Effective interest rate (as a percent) | 3.39% | 3.39% | |||
Amount of debt hedged | $ 195,000 | $ 195,000 | |||
Debt instrument hedged (as a percent) | 70.00% | 70.00% | |||
Term loan | $ 277,000 | $ 277,000 | |||
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% | ||||
Equity interest in domestic subsidiaries pledged as security (as a percent) | 100.00% | ||||
Minimum consolidated senior secured leverage ratio | 3 | ||||
Maximum consolidated senior secured leverage ratio | 3.50 | ||||
Revolving Credit Facility | Minimum | |||||
DEBT | |||||
Commitment fee (as a percent) | 0.175% | ||||
Revolving Credit Facility | Maximum | |||||
DEBT | |||||
Commitment fee (as a percent) | 0.35% | ||||
Revolving Credit Facility | Equal To Or Greater Than 3.25 to 1.00 | |||||
DEBT | |||||
Minimum consolidated senior secured leverage ratio | 3.25 | ||||
Revolving Credit Facility | Equal To Or Greater Than 2.50 to 1.00, But Less Than 3.25 to 1.00 | |||||
DEBT | |||||
Minimum consolidated senior secured leverage ratio | 2.50 | ||||
Maximum consolidated senior secured leverage ratio | 3.25 | ||||
Revolving Credit Facility | Equal To Or Greater Than 1.75 to 1.00, But Less Than 2.50 to 1.00 | |||||
DEBT | |||||
Minimum consolidated senior secured leverage ratio | 1.75 | ||||
Maximum consolidated senior secured leverage ratio | 2.50 | ||||
Revolving Credit Facility | Equal To Or Greater Than 1.00 to 1.00, But Less Than 1.75 to 1.00 | |||||
DEBT | |||||
Minimum consolidated senior secured leverage ratio | 1 | ||||
Maximum consolidated senior secured leverage ratio | 1.75 | ||||
Revolving Credit Facility | Less Than 1.00 to 1.00 | |||||
DEBT | |||||
Maximum consolidated senior secured leverage ratio | 1 | ||||
Revolving Credit Facility | Base rate | Equal To Or Greater Than 3.25 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 1.00% | ||||
Revolving Credit Facility | Base rate | Equal To Or Greater Than 2.50 to 1.00, But Less Than 3.25 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 0.75% | ||||
Revolving Credit Facility | Base rate | Equal To Or Greater Than 1.75 to 1.00, But Less Than 2.50 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 0.50% | ||||
Revolving Credit Facility | Base rate | Equal To Or Greater Than 1.00 to 1.00, But Less Than 1.75 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 0.25% | ||||
Revolving Credit Facility | Base rate | Less Than 1.00 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 0.00% | ||||
Revolving Credit Facility | LIBOR | Equal To Or Greater Than 3.25 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 2.00% | ||||
Revolving Credit Facility | LIBOR | Equal To Or Greater Than 2.50 to 1.00, But Less Than 3.25 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 1.75% | ||||
Revolving Credit Facility | LIBOR | Equal To Or Greater Than 1.75 to 1.00, But Less Than 2.50 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 1.50% | ||||
Revolving Credit Facility | LIBOR | Equal To Or Greater Than 1.00 to 1.00, But Less Than 1.75 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 1.25% | ||||
Revolving Credit Facility | LIBOR | Less Than 1.00 to 1.00 | |||||
DEBT | |||||
Percentage points added to the reference rate | 1.00% | ||||
New Credit Agreement, Letter Of Credit | |||||
DEBT | |||||
Maximum borrowing capacity | $ 75,000 | ||||
New Credit Agreement, Swingline Loans | |||||
DEBT | |||||
Maximum borrowing capacity | $ 25,000 | ||||
New Credit Agreement, Swingline Loans | Sweep Arrangements | |||||
DEBT | |||||
Maximum borrowing capacity | $ 25,000 | $ 25,000 |
CLOSURE AND POST-CLOSURE OBLI43
CLOSURE AND POST-CLOSURE OBLIGATIONS - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Changes to reported closure and post-closure obligations | ||||
Closure and post-closure obligations, beginning of period | $ 76,611 | $ 75,082 | ||
Accretion expense | 1,090 | 3,245 | $ 3,081 | |
Payments | (591) | (1,279) | ||
Foreign currency translation | 79 | 141 | ||
Closure and post-closure obligations, end of period | 77,189 | 77,189 | ||
Less current portion | (2,271) | (2,271) | $ (2,256) | |
Long-term portion | $ 74,918 | $ 74,918 | $ 72,826 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
INCOME TAXES | ||||
Effective tax rate (as a percent) | 35.80% | 38.30% | 36.00% | 38.80% |
Accounting Accounting Standards Update 2016-09 | ||||
INCOME TAXES | ||||
Income tax benefit | $ 43,000 | $ 120,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic | ||||
Net income, basic | $ 8,365 | $ 10,114 | $ 18,599 | $ 26,569 |
Weighted average basic shares outstanding | 21,774 | 21,714 | 21,750 | 21,700 |
Earnings per share (in dollars per share) | $ 0.38 | $ 0.47 | $ 0.86 | $ 1.22 |
Diluted | ||||
Net income, diluted | $ 8,365 | $ 10,114 | $ 18,599 | $ 26,569 |
Weighted average basic shares outstanding | 21,774 | 21,714 | 21,750 | 21,700 |
Dilutive effect of stock-based awards (in shares) | 157 | 90 | 143 | 80 |
Weighted average diluted shares outstanding | 21,931 | 21,804 | 21,893 | 21,780 |
Earnings per share (in dollars per share) | $ 0.38 | $ 0.46 | $ 0.85 | $ 1.22 |
Anti-dilutive shares excluded from calculation | 117 | 195 | 115 | 267 |
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 | Sep. 30, 2017 | May 27, 2015 |
Stock-Based Compensation Plans | ||
Number of shares authorized for grant | 1,500,000 | |
Number of shares available for future grant | 1,147,801 |
EQUITY - PSUs, Restricted Stock
EQUITY - PSUs, Restricted Stock and RSU (Details) - USD ($) | Jan. 02, 2017 | Sep. 30, 2017 |
PSUs | ||
Stock-Based Compensation Plans | ||
Number of Common Stock Shares Each Performance Stock Unit Can Be Settled For | 1 | |
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) | 28,988 | |
Vested (in shares) | (17,231) | |
Cancelled, expired or forfeited (in shares) | (257) | |
Outstanding at the end of the year (in shares) | 66,701 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 42.78 | |
Granted (in dollars per share) | 49.67 | |
Vested (in dollars per share) | 46.36 | |
Cancelled, expired or forfeited (in dollars per share) | 47.89 | |
Outstanding at the end of the period (in dollars per share) | $ 44.83 | |
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) | (1,193) | |
Outstanding at the end of the year (in shares) | 47,151 | |
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) | 41.92 | |
Outstanding at the end of the period (in dollars per share) | $ 45.56 |
EQUITY - Stock Options (Details
EQUITY - Stock Options (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Shares | |
Exercised (in shares) | shares | (49,200) |
Weighted Average Exercise Price | |
Exercised (in dollars per share) | $ / shares | $ 27.55 |
Stock options | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 446,498 |
Granted (in shares) | shares | 38,087 |
Exercised (in shares) | shares | (49,200) |
Cancelled, expired or forfeited (in shares) | shares | (5,656) |
Outstanding at the end of the period (in shares) | shares | 429,729 |
Exercisable at the end of the period (in shares) | shares | 236,026 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 36.49 |
Granted (in dollars per share) | $ / shares | 49.27 |
Exercised (in dollars per share) | $ / shares | 27.55 |
Cancelled, expired or forfeited (in dollars per share) | $ / shares | 41.46 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 38.58 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 37.33 |
EQUITY - Treasury Stock (Detail
EQUITY - Treasury Stock (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Treasury Stock | |
Repurchase of common stock (in shares) | 2,502 |
Average cost of repurchase (in dollars per share) | $ / shares | $ 48.54 |
Number of options exercised (in shares) | 49,200 |
Weighted-average exercise price of options exercised (in dollars per share) | $ / shares | $ 27.55 |
Number of options exercised via net share settlement | 6,043 |
Stock options | |
Treasury Stock | |
Number of options exercised (in shares) | 49,200 |
Weighted-average exercise price of options exercised (in dollars per share) | $ / shares | $ 27.55 |
OPERATING SEGMENTS - Summarized
OPERATING SEGMENTS - Summarized Financial Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
OPERATING SEGMENTS | |||||
Number of reportable segments | segment | 2 | ||||
Total revenue | $ 134,054 | $ 124,824 | $ 370,345 | $ 360,493 | |
Depreciation, amortization and accretion | 10,776 | 10,136 | 31,838 | 29,549 | |
Capital expenditures | 8,802 | 2,956 | 26,354 | 22,550 | |
Total assets | 802,651 | 773,310 | 802,651 | 773,310 | $ 776,400 |
Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Total revenue | 79,666 | 74,456 | 225,145 | 213,738 | |
Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Total revenue | 25,545 | 21,139 | 66,761 | 62,170 | |
Industrial Cleaning | |||||
OPERATING SEGMENTS | |||||
Total revenue | 4,328 | 5,025 | 13,252 | 16,497 | |
Technical Services | |||||
OPERATING SEGMENTS | |||||
Total revenue | 20,314 | 20,364 | 55,778 | 57,136 | |
Remediation | |||||
OPERATING SEGMENTS | |||||
Total revenue | 2,672 | 3,326 | 6,495 | 8,816 | |
Other | |||||
OPERATING SEGMENTS | |||||
Total revenue | 1,529 | 514 | 2,914 | 2,136 | |
Corporate | |||||
OPERATING SEGMENTS | |||||
Depreciation, amortization and accretion | 118 | 115 | 375 | 362 | |
Capital expenditures | 647 | 546 | 2,250 | 2,358 | |
Total assets | 59,442 | 59,118 | 59,442 | 59,118 | |
Environmental Services | Operating Segment | |||||
OPERATING SEGMENTS | |||||
Total revenue | 97,661 | 87,785 | 268,555 | 252,106 | |
Depreciation, amortization and accretion | 9,342 | 8,665 | 27,238 | 25,117 | |
Capital expenditures | 7,594 | 1,960 | 21,204 | 18,309 | |
Total assets | 619,156 | 589,841 | 619,156 | 589,841 | |
Environmental Services | Operating Segment | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Total revenue | 77,071 | 70,719 | 217,012 | 204,352 | |
Environmental Services | Operating Segment | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Total revenue | 20,590 | 17,066 | 51,543 | 47,754 | |
Field & Industrial Services | Operating Segment | |||||
OPERATING SEGMENTS | |||||
Total revenue | 36,393 | 37,039 | 101,790 | 108,387 | |
Depreciation, amortization and accretion | 1,316 | 1,356 | 4,225 | 4,070 | |
Capital expenditures | 561 | 450 | 2,900 | 1,883 | |
Total assets | 124,053 | 124,351 | 124,053 | 124,351 | |
Field & Industrial Services | Operating Segment | Treatment and disposal | |||||
OPERATING SEGMENTS | |||||
Total revenue | 2,595 | 3,737 | 8,133 | 9,386 | |
Field & Industrial Services | Operating Segment | Transportation and Logistics | |||||
OPERATING SEGMENTS | |||||
Total revenue | 4,955 | 4,073 | 15,218 | 14,416 | |
Field & Industrial Services | Operating Segment | Industrial Cleaning | |||||
OPERATING SEGMENTS | |||||
Total revenue | 4,328 | 5,025 | 13,252 | 16,497 | |
Field & Industrial Services | Operating Segment | Technical Services | |||||
OPERATING SEGMENTS | |||||
Total revenue | 20,314 | 20,364 | 55,778 | 57,136 | |
Field & Industrial Services | Operating Segment | Remediation | |||||
OPERATING SEGMENTS | |||||
Total revenue | 2,672 | 3,326 | 6,495 | 8,816 | |
Field & Industrial Services | Operating Segment | Other | |||||
OPERATING SEGMENTS | |||||
Total revenue | $ 1,529 | $ 514 | $ 2,914 | $ 2,136 |
OPERATING SEGMENTS - Reconcilia
OPERATING SEGMENTS - Reconciliation of EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Net Income to Adjusted EBITDA | ||||
Net income | $ 8,365 | $ 10,114 | $ 18,599 | $ 26,569 |
Income tax expense | 4,668 | 6,278 | 10,465 | 16,828 |
Interest expense | 2,783 | 4,288 | 15,387 | 13,150 |
Interest income | (18) | (8) | (49) | (90) |
Foreign currency (gain) loss | (275) | 224 | (521) | (192) |
Other income | (234) | 19 | (537) | (2,480) |
Depreciation and amortization of plant and equipment | 7,386 | 6,454 | 21,007 | 18,561 |
Amortization of intangibles | 2,300 | 2,651 | 7,586 | 7,907 |
Stock-based compensation | 995 | 605 | 2,954 | 2,182 |
Accretion and non-cash adjustment of closure & post-closure liabilities | 1,090 | 1,031 | 3,245 | 3,081 |
Adjusted EBITDA | 27,060 | 31,656 | 78,136 | 85,516 |
Operating Segment | Environmental Services | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | 35,524 | 37,747 | 102,022 | 104,352 |
Operating Segment | Field & Industrial Services | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | 3,646 | 4,466 | 9,829 | 13,267 |
Corporate | ||||
Reconciliation of Net Income to Adjusted EBITDA | ||||
Adjusted EBITDA | $ (12,110) | $ (10,557) | $ (33,715) | $ (32,103) |
OPERATING SEGMENTS - Revenue an
OPERATING SEGMENTS - Revenue and Long-lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenue and Long-Lived Assets Outside of the United States | |||||
Total revenue | $ 134,054 | $ 124,824 | $ 370,345 | $ 360,493 | |
Total long- lived assets | 459,610 | 459,610 | $ 460,593 | ||
United States | |||||
Revenue and Long-Lived Assets Outside of the United States | |||||
Total revenue | 112,821 | 111,005 | 319,776 | 325,379 | |
Total long- lived assets | 400,269 | 400,269 | 405,767 | ||
Canada | |||||
Revenue and Long-Lived Assets Outside of the United States | |||||
Total revenue | 21,233 | $ 13,819 | 50,569 | $ 35,114 | |
Total long- lived assets | $ 59,341 | $ 59,341 | $ 54,826 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 27, 2017 | Oct. 02, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
SUBSEQUENT EVENTS | ||||
Dividend paid in cash | $ 11,778 | $ 11,754 | ||
Subsequent event | ||||
SUBSEQUENT EVENTS | ||||
Quarterly dividend declared (in dollars per share) | $ 0.18 | |||
Dividend paid in cash | $ 3,900 |