Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | US ECOLOGY, INC. | ||
Entity Central Index Key | 742,126 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,090 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ECOL | ||
Entity Common Stock, Shares Outstanding | 21,875,407 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 27,042 | $ 7,015 |
Receivables, net | 110,777 | 96,819 |
Prepaid expenses and other current assets | 9,138 | 7,458 |
Income taxes receivable | 4,076 | |
Total current assets | 146,957 | 115,368 |
Property and equipment, net | 234,432 | 226,237 |
Restricted cash and investments | 5,802 | 5,787 |
Intangible assets, net | 222,812 | 234,356 |
Goodwill | 189,373 | 193,621 |
Other assets | 2,700 | 1,031 |
Total assets | 802,076 | 776,400 |
Current Liabilities: | ||
Accounts payable | 14,868 | 13,948 |
Deferred revenue | 8,532 | 7,820 |
Accrued liabilities | 22,888 | 22,605 |
Accrued salaries and benefits | 14,242 | 10,720 |
Income taxes payable | 2,970 | 165 |
Current portion of closure and post-closure obligations | 2,330 | 2,256 |
Short-term borrowings | 2,177 | |
Current portion of long-term debt | 2,903 | |
Total current liabilities | 65,830 | 62,594 |
Long-term closure and post-closure obligations | 73,758 | 72,826 |
Long-term debt | 277,000 | 274,459 |
Other long-term liabilities | 3,828 | 5,164 |
Deferred income taxes, net | 57,583 | 81,333 |
Total liabilities | 477,999 | 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 | 177,498 | 172,704 |
Retained earnings | 155,533 | 121,879 |
Treasury stock, at cost, 3 and 7 shares, respectively | (68) | (52) |
Accumulated other comprehensive loss | (9,104) | (14,725) |
Total stockholders' equity | 324,077 | 280,024 |
Total liabilities and stockholders' equity | $ 802,076 | $ 776,400 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 21,849 | 21,780 |
Treasury stock, shares | 3 | 7 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Revenue | $ 504,042 | $ 477,665 | $ 563,070 |
Direct operating costs | 350,915 | 330,070 | 391,660 |
Gross profit | 153,127 | 147,595 | 171,410 |
Selling, general and administrative expenses | 84,466 | 77,566 | 93,079 |
Impairment charges | 8,903 | 6,700 | |
Operating income | 59,758 | 70,029 | 71,631 |
Other income (expense): | |||
Interest income | 62 | 96 | 65 |
Interest expense | (18,157) | (17,317) | (23,370) |
Foreign currency gain (loss) | 516 | (138) | (2,196) |
Gain (loss) on divestiture | 2,034 | (542) | |
Other | 791 | 597 | 1,267 |
Total other expense | (16,788) | (14,728) | (24,776) |
Income before income taxes | 42,970 | 55,301 | 46,855 |
Income tax expense (benefit) | (6,395) | 21,049 | 21,244 |
Net income | $ 49,365 | $ 34,252 | $ 25,611 |
Earnings per share: | |||
Basic (in dollars per share) | $ 2.27 | $ 1.58 | $ 1.18 |
Diluted (in dollars per share) | $ 2.25 | $ 1.57 | $ 1.18 |
Shares used in earnings per share calculation: | |||
Basic (in shares) | 21,758 | 21,704 | 21,637 |
Diluted (in shares) | 21,902 | 21,789 | 21,733 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 49,365 | $ 34,252 | $ 25,611 |
Other comprehensive income (loss): | |||
Foreign currency translation gain (loss) | 4,046 | 1,379 | (8,380) |
Net changes in interest rate hedge, net of taxes of $985, $517, and ($539), respectively | 1,575 | 962 | (1,000) |
Comprehensive income, net of tax | $ 54,986 | $ 36,593 | $ 16,231 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other comprehensive income (loss): | |||
Net changes in interest rate hedge, tax | $ 985 | $ 517 | $ (539) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 49,365 | $ 34,252 | $ 25,611 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Impairment charges | 8,903 | 6,700 | |
Depreciation and amortization of property and equipment | 28,302 | 25,304 | 27,931 |
Amortization of intangible assets | 9,888 | 10,575 | 12,307 |
Accretion of closure and post-closure obligations | 3,026 | 3,953 | 4,584 |
Unrealized foreign currency loss (gain) | (1,283) | 65 | 3,271 |
Deferred income taxes | (25,309) | (2,704) | (2,714) |
Share-based compensation expense | 3,933 | 2,925 | 2,297 |
Loss (gain) on disposition of business | (2,034) | 542 | |
Net (gain) loss on disposition of assets | 408 | (569) | 741 |
Amortization and write-off of debt issuance costs | 6,009 | 2,006 | 4,428 |
Amortization and write-off of debt discount | 667 | 148 | 148 |
Changes in assets and liabilities (net of effects of business acquisitions and divestitures): | |||
Receivables | (13,861) | 10,912 | 1,565 |
Income taxes receivable | 4,121 | (2,043) | 4,830 |
Other assets | (1,328) | 1,149 | 734 |
Accounts payable and accrued liabilities | 2,012 | (7,735) | (6,481) |
Deferred revenue | 617 | (281) | (4,449) |
Accrued salaries and benefits | 3,420 | (864) | (901) |
Income taxes payable | 3,921 | 49 | (3,918) |
Closure and post-closure obligations | (1,795) | (481) | (5,679) |
Net cash provided by operating activities | 81,016 | 74,627 | 71,547 |
Cash flows from investing activities: | |||
Proceeds from divestitures (net of cash divested) | 2,723 | 58,728 | |
Purchases of property and equipment | (36,240) | (35,696) | (39,370) |
Purchases of restricted cash and investments | (1,628) | (2,317) | (2,075) |
Proceeds from sale of restricted cash and investments | 1,613 | 2,278 | 2,057 |
Proceeds from sale of property and equipment | 974 | 991 | 948 |
Business acquisition (net of cash acquired) | (9,983) | ||
Net cash used in investing activities | (35,281) | (42,004) | 20,288 |
Cash flows from financing activities: | |||
Payments on long-term debt | (287,040) | (17,954) | (94,623) |
Proceeds from long-term debt | 281,000 | ||
Payment on short-term borrowings | (13,438) | (47,228) | (10,316) |
Proceeds from short-term borrowings | 11,260 | 49,405 | 10,316 |
Dividends paid | (15,711) | (15,673) | (15,612) |
Proceeds from exercise of stock options | 1,050 | 229 | 1,823 |
Deferred financing costs paid | (2,967) | ||
Payment of equipment financing obligations | (377) | (179) | |
Other | (121) | (189) | 54 |
Net cash used in financing activities | (26,344) | (31,589) | (108,358) |
Effect of foreign exchange rate changes on cash | 636 | (8) | (459) |
Increase in cash and cash equivalents | 20,027 | 1,026 | (16,982) |
Cash and cash equivalents at beginning of period | 7,015 | 5,989 | 22,971 |
Cash and cash equivalents at end of period | $ 27,042 | $ 7,015 | $ 5,989 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at the beginning at Dec. 31, 2014 | $ 216 | $ 165,524 | $ 93,301 | $ (18) | $ (7,686) | $ 251,337 |
Balance (in shares) at Dec. 31, 2014 | 21,632,443 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 25,611 | 25,611 | ||||
Other comprehensive income (loss) | (9,380) | (9,380) | ||||
Dividend paid | (15,612) | (15,612) | ||||
Tax benefit of equity based awards | 376 | 376 | ||||
Share-based compensation | 2,297 | 2,297 | ||||
Stock option exercises | $ 1 | 1,822 | 1,823 | |||
Stock option exercises (in shares) | 80,112 | |||||
Repurchase of common stock: 2,502, 6,589 and 6,150 shares for the years ended December 31, 2017, 2016 and 2015, respectively | (317) | (317) | ||||
Issuance of restricted common stock (in shares) | 31,417 | |||||
Issuance of restricted common stock from treasury shares | (146) | 146 | ||||
Balance at the end at Dec. 31, 2015 | $ 217 | 169,873 | 103,300 | (189) | (17,066) | 256,135 |
Balance (in shares) at Dec. 31, 2015 | 21,743,972 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 34,252 | 34,252 | ||||
Other comprehensive income (loss) | 2,341 | 2,341 | ||||
Dividend paid | (15,673) | (15,673) | ||||
Tax benefit of equity based awards | 85 | 85 | ||||
Share-based compensation | 2,925 | 2,925 | ||||
Stock option exercises | 229 | 229 | ||||
Stock option exercises (in shares) | 11,856 | |||||
Repurchase of common stock: 2,502, 6,589 and 6,150 shares for the years ended December 31, 2017, 2016 and 2015, respectively | (271) | (271) | ||||
Issuance of restricted common stock | $ 1 | 1 | ||||
Issuance of restricted common stock (in shares) | 23,888 | |||||
Issuance of restricted common stock from treasury shares | (408) | 408 | ||||
Balance at the end at Dec. 31, 2016 | $ 218 | 172,704 | 121,879 | (52) | (14,725) | 280,024 |
Balance (in shares) at Dec. 31, 2016 | 21,779,716 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 49,365 | 49,365 | ||||
Other comprehensive income (loss) | 5,621 | 5,621 | ||||
Dividend paid | (15,711) | (15,711) | ||||
Share-based compensation | 3,933 | 3,933 | ||||
Stock option exercises | 1,047 | 1,047 | ||||
Stock option exercises (in shares) | 43,175 | |||||
Repurchase of common stock: 2,502, 6,589 and 6,150 shares for the years ended December 31, 2017, 2016 and 2015, respectively | (121) | (121) | ||||
Issuance of restricted common stock | (81) | (81) | ||||
Issuance of restricted common stock (in shares) | 26,274 | |||||
Issuance of restricted common stock from treasury shares | (105) | 105 | ||||
Balance at the end at Dec. 31, 2017 | $ 218 | $ 177,498 | $ 155,533 | $ (68) | $ (9,104) | $ 324,077 |
Balance (in shares) at Dec. 31, 2017 | 21,849,165 |
CONSOLIDATED STATEMENTS OF STO9
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Repurchase of common stock, number of shares | 2,502 | 6,589 | 6,150 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2017 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | NOTE 1. DESCRIPTION OF BUSINESS US Ecology, Inc. was most recently incorporated as a Delaware corporation in May 1987 as American Ecology Corporation. On February 22, 2010 the Company changed its name from American Ecology Corporation to US Ecology, Inc. US Ecology, Inc., through its subsidiaries, is a leading North American provider of environmental services to commercial and government entities. The Company addresses the complex waste management needs of its customers, offering treatment, disposal and recycling of hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. US Ecology, Inc. has been protecting the environment since 1952, with operations in the United States, Canada and Mexico. Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries. Our operations are managed in two reportable segments reflecting our internal reporting structure and nature of services offered: Environmental Services and Field & Industrial Services. Our Environmental Services segment provides a broad range of hazardous material management services including the transportation, recycling, treatment and disposal of hazardous and non-hazardous waste at Company-owned landfill, wastewater and other treatment facilities. Our Field & Industrial Services segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through our 10-day storage 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. On November 1, 2015, we sold our Allstate Power Vac, Inc. ("Allstate") subsidiary, which was previously reported as part of our Field & Industrial Services segment, to a private investor group. See Note 5 for additional information. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying financial statements are prepared on a consolidated basis. All inter‑company balances and transactions have been eliminated in consolidation. Our year‑end is December 31. Cash and Cash Equivalents Cash and cash equivalents consist primarily of cash on deposit, money market accounts or short-term investments with original maturities of 90 days or less at the date of acquisition. Cash and cash equivalents totaled $27.0 million and $7.0 million at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, we had $18.6 million and $4.8 million, respectively, of cash at our operations outside the United States. Receivables Receivables are stated at an amount management expects to collect. Based on management’s assessment of the credit history of the customers having outstanding balances and factoring in current economic conditions, management has concluded that potential unidentified losses on balances outstanding at year‑end will not be material. Unbilled receivables are recorded for work performed under contracts that have not yet been invoiced to customers and arise due to the timing of billings. Substantially all unbilled receivables at December 31, 2017, were billed in the following month. Restricted Cash and Investments Restricted cash and investments of $5.8 million at December 31, 2017 and 2016, represent funds held in third-party managed trust accounts as collateral for our financial assurance obligations for post-closure activities at our non-operating facilities. These funds are invested in fixed-income U.S. Treasury and government agency securities and money market accounts. The balances are adjusted monthly to fair market value based on quoted prices in active markets for identical or similar assets. Revenue Recognition We recognize revenue when persuasive evidence of an arrangement exists, delivery and disposal have occurred or services have been rendered, the price is fixed or determinable and collection is reasonably assured. We recognize revenue from three primary sources: 1) waste treatment, recycling and disposal, 2) field and industrial waste management services and 3) waste transportation services. Waste treatment and disposal revenue results primarily from fees charged to customers for treatment and/or disposal or recycling of specified wastes. Waste treatment and disposal revenue is generally charged on a per-ton or per-yard basis based on contracted prices and is recognized when services are complete. Field and industrial waste management services revenue results primarily from specialty onsite services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response at refineries, chemical plants, steel and automotive plants, and other government, commercial and industrial facilities. These services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. Revenues are recognized over the term of the agreements or as services are performed. Revenue is recognized on contracts with retainage when services have been rendered and collectability is reasonably assured. Transportation revenue results from delivering customer waste to a disposal facility for treatment and/or disposal or recycling. Transportation services are generally not provided on a stand-alone basis and instead are bundled with other Company services. However, in some instances we provide transportation and logistics services for shipment of waste from cleanup sites to disposal facilities operated by other companies. We account for our bundled arrangements as multiple deliverable arrangements and determine the amount of revenue recognized for each deliverable (unit of accounting) using the relative fair value method. Transportation revenue is recognized when the transported waste is received at the disposal facility. Waste treatment and disposal revenue under bundled arrangements is recognized when services are complete and the waste is disposed in the landfill. Burial fees collected from customers for each ton or cubic yard of waste disposed in our landfills are paid to the respective local and/or state government entity and are not included in revenue. Revenue and associated cost from waste that has been received but not yet treated and disposed of in our landfills are deferred until disposal occurs. Our Richland, Washington disposal facility is regulated by the Washington Utilities and Transportation Commission (“ WUTC”), which approves our rates for disposal of low-level radioactive waste (“LLRW”). Annual revenue levels are established based on a rate agreement with the WUTC at amounts sufficient to cover the costs of operation, including facility maintenance, equipment replacement and related costs, and provide us with a reasonable profit. Per-unit rates charged to LLRW customers during the year are based on our evaluation of disposal volume and radioactivity projections submitted to us by waste generators. Our proposed rates are then reviewed and approved by the WUTC. If annual revenue exceeds the approved levels set by the WUTC, we are required to refund excess collections to facility users on a pro-rata basis. Refundable excess collections, if any,are recorded in Accrued liabilities in the consolidated balance sheets. The current rate agreement with the WUTC was extended in 2013 and is effective until January 1, 2020. Deferred Revenue Revenue from waste that has been received but not yet treated or disposed or advance billings prior to treatment and disposal services are deferred until such services are completed. Property and Equipment Property and equipment are recorded at cost and depreciated on the straight‑line method over estimated useful lives. Replacements and major repairs of property and equipment are capitalized and retirements are made when assets are disposed of or when the useful life has been exhausted. Minor components and parts are expensed as incurred. Repair and maintenance expenses were $14.8 million, $11.8 million and $13.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. We assume no salvage value for our depreciable fixed assets. The estimated useful lives for significant property and equipment categories are as follows: Useful Lives Vehicles and other equipment to 10 years Disposal facility and equipment to 20 years Buildings and improvements to 40 years Railcars 40 years Disposal Cell Accounting Qualified disposal cell development costs such as personnel and equipment costs incurred to construct new disposal cells are recorded and capitalized at cost. Capitalized cell development costs, net of recorded amortization, are added to estimated future costs of the permitted disposal cell to be incurred over the remaining construction of the cell, to determine the amount to be amortized over the remaining estimated cell life. Estimates of future costs are developed using input from independent engineers and internal technical and accounting managers. We review these estimates at least annually. Amortization is recorded on a unit of consumption basis, typically applying cost as a rate per cubic yard disposed. Disposal facility costs are expected to be fully amortized upon final closure of the facility, as no salvage value applies. Costs associated with ongoing disposal operations are charged to expense as incurred. We have material financial commitments for closure and post‑closure obligations for certain facilities we own or operate. We estimate future cost requirements for closure and post‑closure monitoring based on RCRA and conforming state requirements and facility permits. RCRA requires that companies provide the responsible regulatory agency acceptable financial assurance for closure work and subsequent post‑closure monitoring of each facility for 30 years following closure. Estimates for final closure and post‑closure costs are developed using input from our technical and accounting managers as well as independent engineers and are reviewed by management at least annually. These estimates involve projections of costs that will be incurred after the disposal facility ceases operations, through the required post‑closure care period. The present value of the estimated closure and post‑closure costs are accreted using the interest method of allocation to direct costs in our consolidated statements of operations so that 100% of the future cost has been incurred at the time of payment. Business Combinations We account for business combinations under the acquisition method of accounting. The cost of an acquired company is assigned to the tangible and identifiable intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is assigned to goodwill. The transaction costs associated with business combinations are expensed as they are incurred. Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired. Goodwill is not amortized, but instead is assessed for impairment annually in the fourth quarter as of October 1 and also if an event occurs or circumstances change that may indicate a possible impairment. In the event that we determine that the value of goodwill has become impaired, we will incur an accounting charge for the amount of impairment during the period in which the determination has been made. See Note 3 for additional information related to the use of estimates in the Company’s goodwill impairment tests and Note 12 for additional information related to the $5.5 million goodwill impairment charge recorded in the fourth quarter of 2017. Intangible Assets Intangible assets are stated at the fair value assigned in a business combination net of amortization. We amortize our finite‑lived intangible assets using the straight‑line method over their estimated economic lives ranging from 1 to 45 years. We review intangible assets with indefinite useful lives for impairment during the fourth quarter as of October 1 of each year. We also review both indefinite‑lived and finite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an intangible asset may not be recoverable. See Note 3 for additional information related to the use of estimates in the Company’s intangible assets impairment tests and Note 12 for additional information related to the $3.4 million indefinite-lived intangible asset impairment charge recorded in the fourth quarter of 2017. Our acquired permits and licenses generally have renewal terms of approximately 5-10 years. We have a history of renewing these permits and licenses as demonstrated by the fact that each of the sites’ treatment permits and licenses have been renewed regularly since the facility began operations. We intend to continue to renew our permits and licenses as they come up for renewal for the foreseeable future. Costs incurred to renew or extend the term of our permits and licenses are recorded in Selling, general and administrative expenses in our consolidated statements of operations. Impairment of Long‑Lived Assets Long-lived assets consist primarily of property and equipment facility development costs and finite-lived intangible assets. The recoverability of long-lived assets is evaluated periodically through analysis of operating results and consideration of other significant events or changes in the business environment. If an operating unit had indications of possible impairment, we would evaluate whether impairment exists on the basis of undiscounted expected future cash flows from operations over the remaining amortization period. If an impairment loss were to exist, the carrying amount of the related long-lived assets would be reduced to their estimated fair value. Deferred Financing Costs Deferred financing costs are amortized over the life of our new senior secured credit agreement (the “New Credit Agreement”). Amortization of deferred financing costs is included as a component of interest expense in the consolidated statements of operations. Deferred financing costs associated with the New Credit Agreement were $3.4 million, net of accumulated amortization and have been recorded in Prepaid expenses and other current assets and Other assets in the consolidated balance sheets as of December 31, 2017. Deferred financing costs associated with our Former Term Loan were $5.0 million, net of accumulated amortization and have been recorded to Long-term debt in the consolidated balance sheets as of December 31, 2016. Deferred financing costs associated with our Former Revolving Credit Facility were $1.4 million, net of accumulated amortization and have been recorded in Prepaid expenses and other current assets and Other assets in the consolidated balance sheets as of December 31, 2016. 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 charge of $5.5 million to Interest expense in the second quarter of 2017. Derivative Instruments 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. Changes in the fair value of the interest rate swap are recorded as a component of accumulated other comprehensive income within stockholders' equity, and are recognized in interest expense in the period in which the payment is settled. The interest rate swap has an effective date of December 31, 2014 in an initial notional amount of $250.0 million. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. Foreign Currency Our Canadian operations’ functional currency is the Canadian dollar (“CAD”). Assets and liabilities are translated to U.S. dollars (“USD”) at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period. Gains and losses from the translation of the consolidated financial statements of our Canadian subsidiaries into USD are included in stockholders' equity as a component of Accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are recognized in the consolidated statements of operations. Recorded balances that are denominated in a currency other than the functional currency are re‑measured to the functional currency using the exchange rate at the balance sheet date and gains or losses are recorded in the statements of operations. Income Taxes Income taxes are accounted for using an asset and liability approach. This requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities at the applicable tax rates. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax‑planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The application of income tax law is inherently complex. Tax laws and regulations are voluminous and at times ambiguous and interpretations of guidance regarding such tax laws and regulations change over time. This requires us to make many subjective assumptions and judgments regarding the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. A liability for uncertain tax positions is recorded in our consolidated financial statements on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax position taken will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. As facts and circumstances change, we reassess these probabilities and record any changes in the financial statements as appropriate. Our tax returns are subject to audit by the Internal Revenue Service (“IRS”), various states in the U.S. and the Canadian Revenue Agency. Insurance Accrued costs for our self‑insured health care coverage were $1.1 million and $1.0 million at December 31, 2017 and 2016, respectively. Earnings Per Share Basic earnings per share is calculated based on the weighted‑average number of outstanding common shares during the applicable period. Diluted earnings per share is based on the weighted‑average number of outstanding common shares plus the weighted‑average number of potential outstanding common shares. Potential common shares that would increase earnings per share or decrease loss per share are anti‑dilutive and are excluded from earnings per share computations. Earnings per share is computed separately for each period presented. Treasury Stock Shares of common stock repurchased by us are recorded at cost as treasury stock and result in a reduction of stockholders’ equity in our consolidated balance sheets. Treasury shares are reissued using the weighted average cost method for determining the cost of the shares reissued. The difference between the cost of the shares reissued and the issuance price is added or deducted from additional paid‑in capital. Recently Issued Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) . This ASU amends the guidance in Accounting Standards Codification (“ASC”) 220 on the reclassification of certain tax effects from accumulated other comprehensive income. The primary purpose of the ASU is to address industry concerns related to the application of ASC 740 to certain provisions of the new tax reform legislation also known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The guidance is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. An entity will apply this guidance to each period in which the effect of the Tax Act (or portion thereof) is recorded and may apply it either (1) retrospectively as of the date of enactment or (2) as of the beginning of the period of adoption. The Company plans to adopt this pronouncement on January 1, 2018 and does not expect the impact on its consolidated financial statements to be material. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Because of the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under accounting principles generally accepted in the United States (“GAAP”), we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether we expect to have future U.S. inclusions in taxable income related to GILTI depends on not only our current structure and estimated future results of global operations but also our intent and ability to modify our structure and/or our business, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments related to potential GILTI tax in our consolidated financial statements and have not made a policy decision regarding whether to record deferred taxes on GILTI. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Where the Company was able to make reasonable estimates of the effects of elements for which the analysis is not yet complete, the Company recorded provisional amounts. Where the Company was not yet able to make reasonable estimates of the impact of certain elements, we have not recorded any provisional amounts related to those elements and have continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. In January 2017, the FASB issued 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 did not 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 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 presente The Company will adopt this pronouncement on January 1, 2018, using a retrospective adoption method. Upon adoption, amounts described as restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-year and end-of-year amounts presented on the statements of 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. The Company will adopt this pronouncement on January 1, 2018, using a retrospective adoption method and does not expect the impact on its consolidated financial statements to be material. 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. We have elected to account for forfeitures as they occur. 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 will adopt 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 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. As a result of our analysis, we identified and implemented appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. The Company has concluded that the new guidance will not materially affect the timing and amount of revenue recognized. However, the presentation and disclosure requirements of the standard will result in expanded disclosures around the disaggregation of revenue among other new disclosures. |
USE OF ESTIMATES
USE OF ESTIMATES | 12 Months Ended |
Dec. 31, 2017 | |
USE OF ESTIMATES | |
USE OF ESTIMATES | NOTE 3. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Listed below are the estimates and assumptions that we consider to be significant in the preparation of our consolidated financial statements. · Allowance for Doubtful Accounts - We estimate losses for uncollectible accounts based on the aging of the accounts receivable and an evaluation of the likelihood of success in collecting the receivable. · Recovery of Long‑Lived Assets - We evaluate the recovery of our long‑lived assets periodically by analyzing our operating results and considering significant events or changes in the business environment. · Income Taxes - We assume the deductibility of certain costs in our income tax filings, estimate our income tax rate and estimate the future recovery of deferred tax assets. · Legal and Environmental Accruals - We estimate the amount of potential exposure we may have with respect to litigation and environmental claims and assessments. · Disposal Cell Development and Final Closure/Post‑Closure Amortization - We expense amounts for disposal cell usage and closure and post‑closure costs for each cubic yard of waste disposed of at our operating facilities. In determining the amount to expense for each cubic yard of waste disposed, we estimate the cost to develop each disposal cell and the closure and post‑closure costs for each disposal cell and facility. The expense for each cubic yard is then calculated based on the remaining permitted capacity and total permitted capacity. Estimates for closure and post‑closure costs are developed using input from third‑party engineering consultants, and our internal technical and accounting personnel. Management reviews estimates at least annually. Estimates for final disposal cell closure and post‑closure costs consider when the costs would actually be paid and, where appropriate, inflation and discount rates. · Business Acquisitions - The Company records assets and liabilities of the acquired business at their fair values. Acquisition‑related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business acquisition. · Goodwill - We assess goodwill for impairment during the fourth quarter as of October 1 of each year or sooner if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The assessment consists of comparing the estimated fair value of the reporting unit to the carrying value of the net assets assigned to the reporting unit, including goodwill. Fair values are generally determined by using both the market approach, applying a multiple of earnings based on guideline for publicly traded companies, and the income approach, discounting projected future cash flows based on our expectations of the current and future operating environment. The rates used to discount projected future cash flows reflect a weighted average cost of capital based on our industry, capital structure and risk premiums including those reflected in the current market capitalization. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. Failure to execute on planned growth initiatives within the related reporting units, coupled with the other factors mentioned above, could lead to the impairment of goodwill and other long-lived assets in future periods. · Intangible Assets - We review intangible assets with indefinite useful lives for impairment during the fourth quarter as of October 1 of each year. Fair value is generally determined by considering an internally-developed discounted projected cash flow analysis. If the fair value of an asset is determined to be less than the carrying amount of the intangible asset, an impairment in the amount of the difference is recorded in the period in which the annual assessment occurs. We also review finite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an intangible asset may not be recoverable. In order to assess whether a potential impairment exists, the assets' carrying values are compared with their undiscounted expected future cash flows. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. Impairments are measured by comparing the fair value of the asset to its carrying value. Fair value is generally determined by considering: (i) the internally-developed discounted projected cash flow analysis; (ii) a third‑party valuation; and/or (iii) information available regarding the current market environment for similar assets. If the fair value is determined to be less than the carrying amount of the intangible assets, an impairment in the amount of the difference is recorded in the period in which the events or changes in circumstances that indicated the carrying value of the intangible assets may not be recoverable occurred. 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. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2017 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | NOTE 4. BUSINESS COMBINATIONS Environmental Services Inc. On May 2, 2016, the Company acquired 100% of the outstanding shares of Environmental Services Inc., (“ESI”), an environmental services company based in Tilbury, Ontario, Canada. ESI is focused primarily on hazardous and non-hazardous transportation and disposal, hazardous and non-hazardous waste treatment, industrial services, confined space rescue and emergency response work throughout Ontario. The total purchase price was $4.9 million, net of cash acquired, and was funded with cash on hand. ESI is reported as part of our Environmental Services segment, however, revenues, net income, earnings per share and total assets of ESI are not material to our consolidated financial position or results of operations. We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, resulting in $1.0 million allocated to goodwill (which is not deductible for tax purposes), $813,000 allocated to intangible assets (primarily customer relationships) to be amortized over a weighted average life of approximately 14 years, and $686,000 allocated to indefinite-lived environmental permits. Acquisition of Vernon, California Facility On October 1, 2016, we acquired the Vernon, California based RCRA Part B, liquids and solids waste treatment and storage facility of Evoqua Water Technologies LLC for $5.0 million. The Vernon, California facility is reported as part of our Environmental Services segment, however, revenues, net income, earnings per share and total assets of the Vernon, California facility are not material to our consolidated financial position or results of operations. We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, resulting in $354,000 allocated to goodwill, $1.9 million allocated to intangible assets (primarily customer relationships) to be amortized over a weighted average life of approximately 20 years, and $1.3 million allocated to indefinite-lived environmental permits. |
DIVESTITURES
DIVESTITURES | 12 Months Ended |
Dec. 31, 2017 | |
DIVESTITURES | |
DIVESTITURES | NOTE 5. DIVESTITURES Divestiture of Augusta, Georgia Facility On April 5, 2016, we completed the divestiture of our Augusta, Georgia facility for cash proceeds of $1.9 million. The Augusta, Georgia facility was reported as part of our Environmental Services segment. Sales, net income and total assets of the Augusta, Georgia facility are not material to our consolidated financial position or results of operations in any period presented. We recognized a $1.9 million pre-tax gain on the divestiture of the Augusta, Georgia facility, which is included in Other income (expense) in our consolidated statements of operations for the year ended December 31, 2016. Divestiture of Allstate On November 1, 2015, we completed the divestiture of Allstate for cash proceeds at closing of $58.8 million. For the year ended December 31, 2015, we recognized a pre-tax loss on the divestiture of Allstate, including transaction-related costs, of $542,000, which was included in Other income (expense) in our consolidated statements of operations. On April 25, 2016, we received additional cash proceeds of $827,000 in settlement of final post-closing adjustments. We recognized a $178,000 pre-tax gain on the divestiture of Allstate, which is included in Other income (expense) in our consolidated statements of operations for the year ended December 31, 2016. Prior to the divesture, Allstate represented the majority of the industrial services business included in our Field & Industrial Services segment. As a result of this divestiture and management’s strategic review, we evaluated the recoverability of the assets associated with our industrial services business. Based on this analysis, we recorded a non-cash goodwill impairment charge of $6.7 million in the second quarter of 2015. The sale of Allstate did not meet the requirements to be reported as a discontinued operation as defined in ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Loss before income taxes from Allstate of $4.9 million is reflected in the Company’s consolidated statements of operations for the year ended December 31, 2015 and includes a non-cash goodwill impairment charge of $6.4 million. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) (“AOCI”) consisted of the following: Foreign Unrealized Gain Currency (Loss) on Interest $s in thousands Translation Rate Hedge Total Balance at December 31, 2015 $ (14,028) $ (3,038) $ (17,066) Other comprehensive income (loss) before reclassifications, net of tax 1,379 (1,121) 258 Amounts reclassified out of AOCI, net of tax (1) — 2,083 2,083 Other comprehensive income, net 1,379 962 2,341 Balance at December 31, 2016 $ (12,649) $ (2,076) $ (14,725) Other comprehensive income before reclassifications, net of tax 4,046 45 4,091 Amounts reclassified out of AOCI, net of tax (2) — 1,530 1,530 Other comprehensive income, net 4,046 1,575 5,621 Balance at December 31, 2017 $ (8,603) $ (501) $ (9,104) (1) Before-tax reclassifications of $3.2 million ($2.1 million after-tax) for the year ended December 31, 2016 were included in Interest expense in the Company’s consolidated statements of operations. Amount relates to the Company’s interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made. Amounts in AOCI expected to be recognized in interest expense over the next 12 months total approximately $3.2 million ($2.1 million after tax). (2) Before-tax reclassifications of $2.3 million ($1.5 million after-tax) for the year ended December 31, 2017 were included in Interest expense in the Company’s consolidated statements of operations. Amount relates 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 $1.8 million ($1.4 million after tax). |
DISCLOSURE OF SUPPLEMENTAL CASH
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION | |
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 7. DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION For the Year Ended December 31, $s in thousands 2017 2016 2015 Income taxes and interest paid: Income taxes paid, net of receipts $ 10,714 $ 25,729 $ 27,252 Interest paid 11,364 14,304 18,587 Non-cash investing and financing activities: Closure/Post-closure retirement asset (352) 426 Capital expenditures in accounts payable 2,302 2,906 3,805 Acquisition of equipment with financing arrangements 531 1,156 — Restricted stock issuances from treasury shares 105 408 127 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 8. 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 and 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 December 31, 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 at December 31, 2017 and 2016 consisted of the following: 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) $ 1,396 $ 2,649 $ — $ 4,045 Money market funds (2) 1,757 — — 1,757 Total $ 3,153 $ 2,649 $ — $ 5,802 Liabilities: Interest rate swap agreement (3) $ — $ 638 $ — $ 638 Total $ — $ 638 $ — $ 638 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 other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of December 31, 2014 with an initial notional amount of $250.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of the interest rate swap agreement quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other long-term liabilities in the Company’s consolidated balance sheet as of December 31, 2017 and 2016. |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
CONCENTRATIONS AND CREDIT RISK | |
CONCENTRATIONS AND CREDIT RISK | NOTE 9. CONCENTRATIONS AND CREDIT RISK Major Customers No customer accounted for more than 10% of total revenue for the years ended December 31, 2017, 2016 or 2015. No customer accounted for more than 10% of total receivables as of December 31, 2017 or 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. Labor Concentrations As of December 31, 2017, 27 employees were represented by the Paper, Allied-Industrial Chemical & Energy Workers International Union, AFL-CIO, CLC (PACE) on behalf of Local 9777 and Local 12-369; 117 employees at our Blainville, Québec, Canada facility were represented by the Communications, Energy and Paperworkers Union of Canada; 146 employees were represented by the Local 324 Operating Engineers Union; and 49 employees were represented by the International Brotherhood of Teamsters on behalf of Local 283, Local 560, and Local 728. As of December 31, 2017, our 1,233 other employees did not belong to a union. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2017 | |
RECEIVABLES | |
RECEIVABLES | NOTE 10. RECEIVABLES Receivables as of December 31, 2017 and 2016 consisted of the following: $s in thousands 2017 2016 Trade $ 96,760 $ Unbilled revenue 16,176 Other 637 Total receivables 113,573 99,153 Allowance for doubtful accounts (2,796) Receivables, net $ 110,777 $ 96,819 The allowance for doubtful accounts is a provision for uncollectible accounts receivable and unbilled receivables. The allowance is evaluated and adjusted to reflect our collection history and an analysis of the accounts receivables aging. The allowance is decreased by accounts receivable as they are written off. The allowance is adjusted periodically to reflect actual experience. The change in the allowance during 2017, 2016 and 2015 was as follows: Charged Balance at (Credited) to Recoveries Beginning of Costs and (Deductions/ Balance at $s in thousands Period Expenses Write-offs) Adjustments End of Period Year ended December 31, 2017 $ 2,334 $ 704 $ (255) $ 13 $ 2,796 Year ended December 31, 2016 $ 3,226 $ (186) $ (705) $ (1) $ 2,334 Year ended December 31, 2015 $ 704 $ 2,224 $ 848 $ (550) (1) $ 3,226 (1) |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 11. PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2017 and 2016 consisted of the following: $s in thousands 2017 2016 Cell development costs $ 142,144 $ 128,821 Land and improvements 36,499 34,285 Buildings and improvements 87,034 78,081 Railcars 17,299 17,299 Vehicles and other equipment 122,697 110,267 Construction in progress 23,334 24,392 Total property and equipment 429,007 393,145 Accumulated depreciation and amortization (194,575) (166,908) Property and equipment, net $ 234,432 $ 226,237 Depreciation and amortization expense was $28.3 million, $25.3 million and $27.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 12. GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets as of December 31, 2017, were the result of our acquisitions of ESI and the Vernon, California based RCRA Part B, liquids and solids waste treatment and storage facility of Evoqua Water Technologies LLC in 2016, EQ in 2014, Dynecol in 2012 and Stablex in 2010. Changes in goodwill for the years ended December 31, 2017 and 2016 were as follows: Field & Environmental Industrial Services Services Accumulated Accumulated $s in thousands Gross Impairment Gross Impairment Total Balance at December 31, 2015 $ 147,692 $ — $ 44,131 $ — $ 191,823 ESI Acquisition 1,011 — — — 1,011 Vernon Acquisition 354 — — — 354 Foreign currency translation and other adjustments 433 — — — 433 Balance at December 31, 2016 149,490 — 44,131 — 193,621 Impairment charges — (5,457) — — (5,457) Foreign currency translation and other adjustments 1,209 — — — 1,209 Balance at December 31, 2017 $ 150,699 $ (5,457) $ 44,131 $ — $ 189,373 We assess goodwill for impairment during the fourth quarter as of October 1 of each year, and also if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The assessment consists of comparing the fair value of the reporting unit to the carrying value of the net assets assigned to the reporting unit, including goodwill. Fair values are generally determined by using a market approach, applying a multiple of earnings based on guideline for publicly traded companies, an income approach, discounting projected future cash flows based on our expectations of the current and future operating environment, or a combination thereof. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. The rates used to discount projected future cash flows reflect a weighted average cost of capital based on our industry, capital structure and risk premiums including those reflected in the current market capitalization. The result of the annual assessment of goodwill undertaken in the fourth quarter of 2017 indicated that the fair value of each of our reporting units was in excess of its respective carrying value, with the exception of the Resource Recovery reporting unit. In performing the annual goodwill impairment test, the estimated fair value of the Resource Recovery reporting unit was determined under an income approach using discounted projected future cash flows and then compared to the reporting unit’s carrying amount as of October 1, 2017. Based on the results of that evaluation, the carrying amount of the Resource Recovery reporting unit, including $5.5 million of goodwill, exceeded the estimated fair value of the reporting unit by more than $5.5 million and, as a result, we recognized a $5.5 million impairment charge, representing the reporting unit’s entire goodwill balance, in the fourth quarter of 2017. Our Resource Recovery reporting unit offers full-service storm water management and propylene glycol (“PG”) deicing fluid recovery at major airports. Recovered fluids are transported to our recycling facility where they are distilled and resold to industrial users. The Resource Recovery reporting unit also generates revenues from brokered PG sales and services revenues for PG collection at the airports we service. The factors contributing to the $5.5 million goodwill impairment charge principally related to weak PG commodity prices and reduced PG collection volumes at the airports we service, which negatively impacted the reporting unit’s prospective financial information in its discounted cash flow model and the reporting unit's estimated fair value. A longer-than-expected recovery in PG commodity pricing and PG collection volumes became evident during the fourth quarter of 2017 as management completed its 2018 budgeting cycle and updated the long-term projections for the reporting unit which, as a result, decreased the reporting unit’s anticipated future cash flows as compared to those estimated previously. Intangible assets as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Accumulated Accumulated $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: Permits, licenses and lease $ 111,818 $ (12,459) $ 99,359 $ $ $ Customer relationships 84,977 (20,168) 64,809 Technology - formulae and processes 7,250 (1,630) 5,620 Customer backlog 3,652 (1,291) 2,361 Tradename 4,318 (4,318) — Developed software 2,926 (1,319) 1,607 Non-compete agreements 748 (748) — Internet domain and website 540 (100) 440 Database 393 (153) 240 Total amortizing intangible assets 216,622 (42,186) 174,436 214,373 (31,788) Nonamortizing intangible assets: Permits and licenses 48,241 — 48,241 51,645 — 51,645 Tradename 135 — 135 126 — 126 Total intangible assets $ 264,998 $ (42,186) $ 222,812 $ 266,144 $ (31,788) $ 234,356 We review intangible assets with indefinite useful lives for impairment during the fourth quarter as of October 1 of each year. Fair value is generally determined by considering an internally-developed discounted projected cash flow analysis. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. If the fair value of an asset is determined to be less than the carrying amount of the intangible asset, an impairment in the amount of the difference is recorded in the period in which the annual assessment occurs. The result of the annual assessment of intangible assets with indefinite useful lives undertaken in the fourth quarter of 2017 indicated no impairment charges were required, with the exception of the indefinite-lived intangible waste collection, recycling and resale permit associated with our Resource Recovery business. In performing the annual indefinite-lived intangible assets impairment test, the estimated fair value of the Resource Recovery waste collection, recycling and resale permit was determined under an income approach using discounted projected future cash flows associated with the permit and then compared to the $3.7 million carrying amount of the permit as of October 1, 2017. Based on the results of that evaluation, the carrying amount of the permit exceeded the estimated fair value of the permit and, as a result, we recognized a $3.4 million impairment charge in the fourth quarter of 2017. The factors and timing contributing to the nonamortizing permit impairment charge were the same as the factors and timing described above with regards to the Resource Recovery reporting unit goodwill impairment charge. In the fourth quarter of 2017, we performed an assessment of the Resource Recovery business’ finite-lived tangible and intangible assets, as events indicated their carrying values may not be recoverable. The result of the assessment indicated no impairment charges were required. Amortization expense of amortizing intangible assets was $9.9 million, $10.6 million and $12.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation. Future amortization expense of amortizing intangible assets is expected to be as follows: Expected $s in thousands Amortization 2018 $ 9,215 2019 9,215 2020 9,215 2021 9,215 2022 9,215 Thereafter 128,361 $ 174,436 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE 13. EMPLOYEE BENEFIT PLANS Defined Contribution Plans We maintain the US Ecology, Inc., 401(k) Savings and Retirement Plan (“the Plan”) for employees who voluntarily contribute a portion of their compensation, thereby deferring income for federal income tax purposes. The Plan covers substantially all of our employees in the United States. Participants may contribute a percentage of salary up to the IRS limitations. The Company contributes a matching contribution equal to 55% of participant contributions up to 6% of eligible compensation. The Company contributed matching contributions to the Plan of $2.1 million, $1.9 million and $2.3 million in 2017, 2016 and 2015, respectively. We also maintain the Stablex Canada Inc. Simplified Pension Plan (“the SPP”). This defined contribution plan covers substantially all of our employees at our Blainville, Québec facility in Canada. Participants receive a Company contribution equal to 5% of their annual salary. The Company contributed $556,000, $507,000 and $515,000 to the SPP in 2017, 2016 and 2015, respectively. Multi-Employer Defined Benefit Pension Plans Certain of the Company’s wholly-owned subsidiaries acquired in connection with the acquisition of EQ on June 17, 2014 participate in three multi-employer defined benefit pension plans under the terms of collective bargaining agreements covering most of the subsidiaries’ union employees. Contributions are determined in accordance with the provisions of negotiated labor contracts and are generally based on stipulated rates per hours worked. Benefits under these plans are generally based on compensation levels and years of service. The financial risks of participating in multi-employer plans are different from single employer defined benefit pension plans in the following respects: · Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. · If a participating employer discontinues contributions to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers. · If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. Information regarding significant multi-employer pension benefit plans in which the Company participates is shown in the following table: Pension Protection Act Certified Plan Employer Plan Zone Status Name of Plan ID Number Number 2017 2016 Operating Engineers Local 324 Pension Fund 38-1900637 Red Red The Company contributed $1.0 million and $933,000 to the Operating Engineers Local 324 Pension Fund (the “Local 324 Plan”) in 2017 and 2016, respectively. The Company also contributed $217,000 and $229,000 to other multi-employer plans in 2017 and 2016, respectively, which are excluded from the table above as they are not individually significant. Based on information as of April 30, 2017 and 2016, the year end of the Local 324 Plan, the Company's contributions made to the Local 324 Plan represented less than 5% of total contributions received by the Local 324 Plan during the 2017 and 2016 plan years. The certified zone status in the table above is defined by the Department of Labor and the Pension Protection Act of 2006 and represents the level at which the plan is funded. Plans in the red zone are less than 65% funded; plans in the yellow zone are less than 80% funded; and plans in the green zone are at least 80% funded. The certified zone status is as of the Local 324 Plan's year end of April 30, 2017 and 2016. A financial improvement or rehabilitation plan, as defined under ERISA, was adopted by the Local 324 Plan on March 17, 2011 and the Rehabilitation Period began May 1, 2013. As of December 31, 2017, 146 employees were employed under union collective bargaining agreements with the Local 324 Operating Engineers union. Our three remaining collective bargaining agreements expire on May 31, 2018, November 30, 2020 and April 30, 2022. |
CLOSURE AND POST-CLOSURE OBLIGA
CLOSURE AND POST-CLOSURE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2017 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | NOTE 14. 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. We do not presently bear significant financial responsibility for closure and/or post-closure care of the disposal facilities located on state-owned land at our Beatty, Nevada site; Provincial-owned land in Blainville, Québec; or state-leased federal land on the Department of Energy Hanford Reservation near Richland, Washington. The States of Nevada and Washington and the Province of Québec collect fees from us based on the waste received on a quarterly or annual basis. Such fees are deposited in dedicated, government-controlled funds to cover the future costs of closure and post-closure care and maintenance. Such fees are periodically reviewed for adequacy by the governmental authorities. We also maintain a surety bond for closure costs associated with the Stablex facility. Our lease agreement with the Province of Québec requires that the surety bond be maintained for 25 years after the lease expires. At December 31, 2017 we had $752,000 in commercial surety bonds dedicated for closure obligations. In accounting for closure and post-closure obligations, which represent our asset retirement obligations, we recognize a liability as part of the fair value of future asset retirement obligations and an associated asset as part of the carrying amount of the underlying asset. This obligation is valued based on our best estimates of current costs and current estimated closure and post-closure costs taking into account current technology, material and service costs, laws and regulations. These cost estimates are increased by an estimated inflation rate, estimated to be 2.6% at December 31, 2017. Inflated current costs are then discounted using our credit‑adjusted risk‑free interest rate, which approximates our incremental borrowing rate, in effect at the time the obligation is established or when there are upward revisions to our estimated closure and post‑closure costs. Our weighted‑average credit‑adjusted risk‑free interest rate at December 31, 2017 approximated 5.9%. Changes to reported closure and post‑closure obligations for the years ended December 31, 2017 and 2016, were as follows: $s in thousands 2017 2016 Closure and post-closure obligations, beginning of year $ 75,082 $ 71,154 Accretion expense 3,026 3,953 Payments (1,794) (1,754) Adjustments (352) 1,697 Foreign currency translation 126 32 Closure and post-closure obligations, end of year 76,088 75,082 Less current portion (2,330) (2,256) Long-term portion $ 73,758 $ 72,826 Adjustment to the obligations represents changes in the expected timing or amount of cash expenditures based upon actual and estimated cash expenditures. The adjustments in 2017 were primarily attributable to an $897,000 decrease in closure and post-closure obligations at our Grand View, Idaho operating facility due to a change in closure timing, partially offset by a $545,000 increase to the obligation for our Blainville, Québec, Canada operating facility associated with a newly-constructed disposal cell. The adjustments in 2016 were primarily attributable to a $1.3 million increase in post-closure obligations for our non-operating facilities due to changes in estimated post-closure costs and a $496,000 increase to the obligation for our Blainville, Québec, Canada operating facility associated with a newly-constructed disposal cell. Changes in the reported closure and post‑closure asset, recorded as a component of Property and equipment, net, in the consolidated balance sheet, for the years ended December 31, 2017 and 2016 were as follows: $s in thousands 2017 2016 Net closure and post-closure asset, beginning of year $ 22,408 $ 23,043 Additions or adjustments to closure and post-closure asset (352) 426 Amortization of closure and post-closure asset (1,757) (1,128) Foreign currency translation 196 67 Net closure and post-closure asset, end of year $ 20,495 $ 22,408 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2017 | |
DEBT | |
DEBT | NOTE 15. DEBT Long-term debt consisted of the following: 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 $ $ Future maturities of long-term debt, excluding unamortized discount and debt issuance costs, as of December 31, 2017 consist of the following: $s in thousands Maturities 2018 $ — 2019 — 2020 — 2021 — 2022 277,000 Thereafter — $ 277,000 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 December 31, 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 $190.0 million, or 69%, of the Revolving Credit Facility borrowings as of December 31, 2017. The interest rate swap agreement continued in place following the termination of the 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 December 31, 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 Facility are not subject to repayment through the Sweep Arrangement. As of December 31, 2017, there were no amounts outstanding subject to the Sweep Arrangement. As of December 31, 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 December 31, 2017, we were in compliance with all of the financial covenants in the New Credit Agreement. Former Credit Agreement On June 17, 2014, the Company entered into a $540.0 million senior secured credit agreement with a syndicate of banks comprised of a $415.0 million term loan (the “Former Term Loan”) with a maturity date of June 17, 2021 and a $125.0 million revolving line of credit (the “Former Revolving Credit Facility”) with a maturity date of June 17, 2019. The Former Term Loan provided an initial commitment amount of $415.0 million and bore interest at a base rate (as defined in the Former Credit Agreement) plus 2.00% or LIBOR plus 3.00%, at the Company’s option. The Former Revolving Credit Facility provided up to $125.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes. Under the Former Revolving Credit Facility, revolving loans were available based on a base rate (as defined in the Former Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which was determined according to a pricing grid under which the interest rate decreased or increased based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Former Credit Agreement). The maximum letter of credit capacity under the Former Revolving Credit Facility was $50.0 million and the Former Credit Agreement provided for a letter of credit fee equal to the applicable margin for LIBOR loans under the Former Revolving Credit Facility. At December 31, 2016, there were $2.2 million of working capital borrowings outstanding on the Former Revolving Credit Facility. These borrowings were due “on demand” and presented as short-term borrowings in the consolidated balance sheets. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 16. INCOME TAXES The components of the income tax expense consisted of the following: $s in thousands 2017 2016 2015 Current: U.S. Federal $ 11,157 $ 17,866 $ 17,818 State 2,482 3,324 2,830 Foreign 5,398 2,459 3,279 Total current 19,037 23,649 23,927 Deferred: U.S. Federal (27,029) (1,790) (2,355) State 2,323 (275) 125 Foreign (726) (535) (453) Total deferred (25,432) (2,600) (2,683) Income tax (benefit) expense $ (6,395) $ 21,049 $ 21,244 On December 22, 2017, the Tax Act was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has calculated a provisional amount of the impact of the Tax Act in its year end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing and as a result has recorded $23.8 million as a net income tax benefit in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional benefit amount related to the re-measurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future was $25.2 million. The provisional expense amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was $1.4 million based on cumulative foreign earnings of $26.7 million. In connection with the Tax Act being signed into law on December 22, 2017, the SEC staff issued SAB 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, we have determined that the $25.2 million of the deferred tax benefit recorded in connection with the re-measurement of certain deferred tax assets and liabilities and the $1.4 million of current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings are provisional amounts estimated based on information available as of December 31, 2017. These amounts are subject to change as we obtain information necessary to complete the calculations. Any subsequent adjustment to these provisional amounts will be recorded to current tax expense in 2018 when the analysis is complete. We expect to complete our analysis of the provisional items during the second half of 2018. The effects of other provisions of the Tax Act are being analyzed and are subject to change as additional information, guidance, and regulation become available. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. Accordingly, prior to the enactment of the Tax Act, no U.S. income and foreign withholding taxes had been provided on such earnings. As a result of the Tax Act being signed into law on December 22, 2017 we recorded a provisional expense related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings of $1.4 million based on cumulative foreign earnings of $26.7 million. Any actual repatriation from our non-U.S. subsidiaries could still be subject to additional foreign withholding taxes and U.S. state taxes. We are currently analyzing our global working capital and cash requirements and the potential tax liabilities attributable to a repatriation, including calculating any excess of the amount for financial reporting over the tax basis in our foreign subsidiaries, but we have yet to determine whether we plan to change our prior assertion and repatriate earnings. Accordingly, we have not recorded any deferred taxes attributable to our investments in our foreign subsidiaries. We will record the tax effects of any change in our prior assertion in the period that we complete our analysis and are able to make a reasonable estimate, and disclose any unrecognized deferred tax liability for temporary differences related to our foreign investments, if practicable. Due to the adoption of ASU 2016-09 in 2017, all excess tax benefits and deficiencies are recognized as income tax expense in the Company’s consolidated statement of operations. This will result in increased volatility in the Company’s effective tax rate. A reconciliation between the effective income tax rate and the applicable statutory federal and state income tax rate is as follows: 2017 2016 2015 Taxes computed at statutory rate 35.0 % 35.0 % 35.0 % Impairment and loss on divestiture 4.4 — 5.7 State income taxes (net of federal income tax benefit) 2.9 3.3 4.0 Non-deductible transaction costs — 0.2 0.3 Tax Cuts and Jobs Act of 2017 (55.4) — — Foreign rate differential (2.9) (1.1) (1.8) Other 1.1 0.7 2.1 (14.9) % 38.1 % 45.3 % The components of the total net deferred tax assets and liabilities as of December 31, 2017 and 2016 consisted of the following: $s in thousands 2017 2016 Deferred tax assets: Net operating loss, foreign tax credit and capital loss carry forwards $ 2,493 $ 3,307 Accruals, allowances and other 3,603 5,269 Environmental compliance and other site related costs 8,549 12,479 Unrealized foreign exchange gains and losses 1,120 2,153 Unrealized gains and losses on interest rate hedge 134 1,119 Total deferred tax assets 15,899 24,327 Less: valuation allowance (2,242) (3,058) Net deferred tax assets 13,657 21,269 Deferred tax liabilities: Property and equipment (18,386) (26,258) Intangible assets (51,575) (74,731) Other (1,279) (1,613) Total deferred tax liabilities (71,240) (102,602) Net deferred tax liability $ (57,583) $ (81,333) All deferred tax assets and liabilities are recorded in Deferred income taxes, net on the consolidated balance sheets as of December 31, 2017 and 2016. In evaluating its ability to realize the deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. The Company re-measured these non-current assets and liabilities at the applicable tax rate of 21% in accordance with the Tax Act. The re-measurement resulted in a total decrease in these net liabilities of $25.2 million. As of December 31, 2017, we have no federal NOLs available to offset future income, and have approximately $8.9 million in state and local NOLs for which we maintain a substantial valuation allowance. We have historically recorded a valuation allowance for certain deferred tax assets due to uncertainties regarding future operating results and limitations on utilization of state and local NOLs for tax purposes. State and local NOLs expire between 2019 and 2036. At December 31, 2017 and 2016, we maintained a valuation allowance of approximately $182,000 and $278,000, respectively, for state NOLs that are not expected to be utilizable prior to expiration. As of December 31, 2017, we have foreign tax credit carry forwards of approximately $1.4 million that expire starting in 2024. As of December 31, 2017, we have capital loss carry forwards of approximately $2.7 million that expire in 2020. We believe it is more likely than not the foreign tax credit and capital loss carry forwards will not be utilized and therefore maintain a valuation allowance on the entire balance. The domestic and foreign components of Income (loss) before income taxes consisted of the following: $s in thousands 2017 2016 2015 Domestic $ 26,051 $ 47,859 $ 36,367 Foreign 16,919 7,442 10,488 Income before income taxes $ 42,970 $ 55,301 $ 46,855 We apply the provisions of ASC 740 related to income tax uncertainties which clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is require to meet before being recognized in the consolidated financial statements. As of December 31, 2017, we have no material unrecognized tax benefits. We file a consolidated U.S. federal income tax return with the IRS as well as tax returns in various states, Canada, and Mexico. The Company is subject to examination by the IRS for tax years 2014 through 2017. EQ is subject to examination by the IRS for pre-acquisition tax year 2014. We may be subject to examinations by various state and local taxing jurisdictions for tax years 2013 through 2017. The Company has no significant foreign jurisdiction audits underway. The tax years 2013 through 2017 remain subject to examination by foreign jurisdictions. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 17. 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 our regulators for non‑compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters. 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 Leases Lease agreements primarily cover railcars, the disposal site at our Stablex facility and corporate office space. Future minimum lease payments on non-cancellable operating leases as of December 31, 2017 are as follows: $s in thousands Payments 2018 $ 5,046 2019 3,721 2020 1,554 2021 1,301 2022 1,106 Thereafter 1,926 $ 14,654 Rental expense under operating leases was $7.6 million, $7.8 million and $8.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
EQUITY | |
EQUITY | NOTE 18. 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 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, performance stock units 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 (“Previous Plans”), and 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 December 31, 2017, 1,148,041 shares of common stock remain available for grant under the Omnibus Plan. Performance Stock Units (PSUs) We have PSU awards outstanding under the Omnibus Plan. 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 based on total stockholder return relative to a set of peer companies, over a three-year performance period. Compensation expense is recorded over the awards' three-year vesting period. A summary of our PSU activity is as follows: Weighted Average Grant Date Units Fair Value Outstanding as of December 31, 2016 19,463 $ 48.62 Granted 11,500 62.45 Vested — — Cancelled, expired or forfeited — — Outstanding as of December 31, 2017 30,963 $ 53.76 The fair value of PSUs is estimated as of the date of grant using a Monte Carlo simulation model. The grant date fair value of PSUs granted during 2017, 2016 and 2015 was $62.45, $41.22 and $65.78 per unit, respectively. Assumptions used in the Monte Carlo simulation to calculate the fair value of the PSUs granted are as follows: 2017 2016 2015 Stock price on grant date $ 49.15 $ 35.05 $ 46.89 Expected term 3.0 years 3.0 years 2.6 years Expected volatility 31 % 29 % 29 % Risk-free interest rate 1.5 % 1.3 % 0.9 % Expected dividend yield 1.5 % 2.1 % 1.5 % Stock Options We have stock option awards outstanding under the 2008 Stock Option Incentive Plan (“2008 Stock Option Plan”) and the Omnibus Plan. Subsequent to the approval of the Omnibus Plan in May 2015, we stopped granting equity awards under the 2008 Stock Option Plan. The 2008 Stock Option Plan will remain in effect solely for the settlement of awards previously granted. Stock options expire ten years from the date of grant and vest over a period ranging from three to five years from the date of grant. Vesting requirements for non-employee directors are contingent on attending a minimum of 75% of regularly scheduled board meetings during the year. Upon the exercise of stock options, common stock is issued from treasury stock or, when depleted, from new stock issuances. A summary of our stock option activity is as follows: Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Term (Years) 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 December 31, 2017 429,729 $ 38.58 $ 5,335 7.0 Exercisable as of December 31, 2017 236,026 $ 37.33 $ 3,227 6.4 The weighted average grant date fair value of all stock options granted during 2017, 2016 and 2015 was $10.92, $8.19 and $11.83 per share, respectively. The total intrinsic value of stock options exercised during 2017, 2016 and 2015 was $1.0 million, $307,000 and $2.0 million, respectively. During 2017, option holders exercised 7,471 options via net share settlement. The fair value of each stock option is estimated as of the date of grant using the Black‑Scholes option‑pricing model. Expected volatility is estimated based on an average of actual historical volatility and implied volatility corresponding to the stock option’s estimated expected term. We believe this approach to determine volatility is representative of future stock volatility. The expected term of a stock option is estimated based on analysis of stock options already exercised and foreseeable trends or changes in behavior. The risk‑free interest rates are based on the U.S. Treasury securities maturities as of each applicable grant date. The dividend yield is based on analysis of actual historical dividend yield. The significant weighted‑average assumptions relating to the valuation of each option grant are as follows: 2017 2016 2015 Expected life 3.8 years 3.8 years 3.6 years Expected volatility 31 % 31 % 35 % Risk-free interest rate 1.5 % 1.1 % 1.2 % Expected dividend yield 1.7 % 1.7 % 1.6 % Restricted Stock We have restricted stock awards outstanding under the 2006 Restricted Stock Plan and the Omnibus Plan. Subsequent to the approval of the Omnibus Plan in May 2015, we stopped granting equity awards under the 2006 Restricted Stock Plan. The 2006 Restricted Stock Plan will remain in effect solely for the settlement of awards previously granted. Generally, restricted stock awards vest annually over a three-year period. Vesting of restricted stock awards to non-employee directors is contingent on the non-employee director attending a minimum of 75% of regularly scheduled board meetings and 75% of the meetings of each committee of which the non ‐ employee director is a member during the year. Upon the vesting of restricted stock awards, common stock is issued from treasury stock or, when depleted, from new stock issuances. A summary of our restricted stock activity is as follows: Weighted Average Grant Date Shares Fair Value Outstanding as of December 31, 2016 55,201 $ 42.78 Granted 28,988 49.67 Vested (17,231) 46.36 Cancelled, expired or forfeited (257) 47.89 Outstanding as of December 31, 2017 66,701 $ 44.83 The total fair value of restricted stock vested during 2017, 2016 and 2015 was $868,000, $1.4 million and $1.4 million, respectively. Restricted Stock Units We have restricted stock unit awards outstanding under the Omnibus Plan. Each restricted stock unit represents the right to receive, on the settlement date, one share of the Company’s common stock. Generally, restricted stock unit awards vest annually over a three-year period. Upon the vesting of restricted stock unit awards, common stock is issued from treasury stock or, when depleted, from new stock issuances. A summary of our restricted stock unit activity is as follows: Weighted Average Grant Date Units Fair Value Outstanding as of December 31, 2016 19,930 $ 39.10 Granted 34,870 47.93 Vested (6,456) 39.10 Cancelled, expired or forfeited (1,193) 41.92 Outstanding as of December 31, 2017 47,151 $ 45.56 The total fair value of restricted stock units vested during 2017 was $314,000. No restricted stock units vested in 2016 or 2015. Treasury Stock During 2017, the Company issued 7,500 shares of restricted stock, under the Omnibus Plan, from our treasury stock at an average cost of $15.06 per share and 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. Share‑Based Compensation Expense All share‑based compensation is measured at the grant date based on the fair value of the award, and is recognized as an expense in earnings over the requisite service period. The components of pre‑tax share‑based compensation expense (primarily included in Selling, general and administrative expenses in our consolidated statements of operations) and related tax benefits were as follows: $s in thousands 2017 2016 2015 Share-based compensation from: Stock options $ 1,141 $ 1,123 $ 808 Restricted stock 1,505 1,272 1,375 Restricted stock units 716 216 — Performance stock units 571 314 114 Total share-based compensation 3,933 2,925 2,297 Income tax benefit (1,403) (1,113) (1,041) Share-based compensation, net of tax $ 2,530 $ 1,812 $ 1,256 Unrecognized Share‑Based Compensation Expense As of December 31, 2017, there was $4.1 million of unrecognized compensation expense related to unvested share‑based awards granted under our share‑based award plans. The expense is expected to be recognized over a weighted average remaining vesting period of approximately two years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 19. EARNINGS PER SHARE 2017 2016 2015 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Basic Diluted Net income $ 49,365 $ 49,365 $ 34,252 $ 34,252 $ 25,611 $ 25,611 Weighted average basic shares outstanding 21,758 21,758 21,704 21,704 21,637 21,637 Dilutive effect of stock-based awards 144 85 96 Weighted average diluted shares outstanding 21,902 21,789 21,733 Earnings per share $ 2.27 $ 2.25 $ 1.58 $ 1.57 $ 1.18 $ 1.18 Anti-dilutive shares excluded from calculation 103 249 192 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 20. SEGMENT REPORTING 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. Effective January 1, 2016, we changed our internal reporting structure by moving the financial results of our Sulligent, Alabama and Tampa, Florida facilities from our Environmental Services segment to our Field & Industrial Services segment. The purpose of this change is to align our internal reporting structure with how we manage our business based on the primary service offering of each facility. Throughout this Annual Report on Form 10-K, our segment results for all periods presented have been recast to reflect this change. Summarized financial information of our reportable segments for the years ended December 31, 2017, 2016 and 2015 is as follows: 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 298,320 $ 10,999 $ — $ 309,319 Services Revenue: Transportation and Logistics (1) 67,988 21,964 — 89,952 Industrial Cleaning (2) — 17,760 — 17,760 Technical Services (3) — 74,876 — 74,876 Remediation (4) — 8,012 — 8,012 Other (5) — 4,123 — 4,123 Total Revenue $ 366,308 $ 137,734 $ — $ 504,042 Depreciation, amortization and accretion $ 35,137 $ 5,578 $ 501 $ 41,216 Capital expenditures $ 28,783 $ 4,206 $ 3,251 $ 36,240 Total assets $ 609,174 $ 125,110 $ 67,792 $ 802,076 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 275,236 $ 12,582 $ — $ 287,818 Services Revenue: Transportation and Logistics (1) 62,535 17,839 — 80,374 Industrial Cleaning (2) — 21,021 — 21,021 Technical Services (3) — 74,191 — 74,191 Remediation (4) — 11,600 — 11,600 Other (5) — 2,661 — 2,661 Total Revenue $ 337,771 $ 139,894 $ — $ 477,665 Depreciation, amortization and accretion $ 33,839 $ 5,481 $ 512 $ 39,832 Capital expenditures $ 30,098 $ 2,572 $ 3,026 $ 35,696 Total assets $ 599,300 $ 119,198 $ 57,902 $ 776,400 2015 Field & Environmental Industrial $s in thousands Services Services (6) Corporate Total Treatment & Disposal Revenue $ 291,062 $ 12,911 $ — $ 303,973 Services Revenue: Transportation and Logistics (1) 67,978 29,060 — 97,038 Industrial Cleaning (2) — 85,783 — 85,783 Technical Services (3) — 67,479 — 67,479 Remediation (4) — 6,734 — 6,734 Other (5) — 2,063 — 2,063 Total Revenue $ 359,040 $ 204,030 $ — $ 563,070 Depreciation, amortization and accretion $ 34,870 $ 9,425 $ 527 $ 44,822 Capital expenditures $ 29,823 $ 7,513 $ 2,034 $ 39,370 Total assets $ 586,561 $ 124,127 $ 61,299 $ 771,987 (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. (6) Financial data includes the operations of our Allstate business. We completed the divestiture of Allstate on November 1, 2015. 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, non‑cash impairment charges, gain/loss on divestiture 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 for the years ended December 31, 2017, 2016 and 2015 is as follows: $s in thousands 2017 2016 2015 Net income $ 49,365 $ 34,252 $ 25,611 Income tax (benefit) expense (6,395) 21,049 21,244 Interest expense 18,157 17,317 23,370 Interest income (62) (96) (65) Foreign currency (gain) loss (516) 138 2,196 Loss (gain) on divestiture — (2,034) 542 Other income (791) (597) (1,267) Impairment charges 8,903 — 6,700 Depreciation and amortization of plant and equipment 28,302 25,304 27,931 Amortization of intangibles 9,888 10,575 12,307 Stock-based compensation 3,933 2,925 2,297 Accretion and non-cash adjustment of closure & post-closure liabilities 3,026 3,953 4,584 Adjusted EBITDA $ 113,810 $ 112,786 $ 125,450 Adjusted EBITDA, by operating segment, for the years ended December 31, 2017, 2016 and 2015 is as follows: $s in thousands 2017 2016 2015 Adjusted EBITDA: Environmental Services $ 146,371 $ 139,698 $ 150,067 Field & Industrial Services 14,709 16,342 21,388 Corporate (47,270) (43,254) (46,005) Total $ 113,810 $ 112,786 $ 125,450 Revenue and Long-Lived 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 for the years ended December 31, 2017, 2016 and 2015 were as follows: $s in thousands 2017 2016 2015 United States $ 434,511 $ 428,778 $ 521,092 Canada 69,531 48,887 41,978 Total revenue $ 504,042 $ 477,665 $ 563,070 Long‑lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location as of December 31, 2017 and 2016 are as follows: $s in thousands 2017 2016 United States $ 396,066 $ 405,767 Canada 61,178 54,826 Total long-lived assets $ 457,244 $ 460,593 |
QUARTERLY FINANCIAL DATA (unaud
QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (unaudited) | |
QUARTERLY FINANCIAL DATA (unaudited) | NOTE 21. QUARTERLY FINANCIAL DATA (unaudited) The unaudited consolidated quarterly results of operations for 2017 and 2016 were as follows: Three-Months Ended $s and shares in thousands, except per share amounts Mar. 31, June 30, Sept. 30, Dec. 31, Year 2017 Revenue $ 110,234 $ 126,057 $ 134,054 $ 133,697 $ 504,042 Gross profit 31,873 35,896 37,733 47,625 153,127 Operating income 12,159 15,896 15,289 16,414 59,758 Net income 5,185 5,049 8,365 30,766 49,365 Earnings per share—diluted (1) $ 0.24 $ 0.23 $ 0.38 $ 1.40 $ 2.25 Weighted average common shares outstanding used in the diluted earnings per share calculation 21,845 21,890 21,931 21,927 21,902 Dividends paid per share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72 2016 Revenue $ 113,318 $ 122,351 $ 124,824 $ 117,172 $ 477,665 Gross profit 35,208 36,906 39,354 36,127 147,595 Operating income 15,783 17,087 20,915 16,244 70,029 Net income 7,517 8,938 10,114 7,683 34,252 Earnings per share—diluted (1) $ 0.35 $ 0.41 $ 0.46 $ 0.35 $ 1.57 Weighted average common shares outstanding used in the diluted earnings per share calculation 21,745 21,790 21,804 21,814 21,789 Dividends paid per share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72 (1) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 22. SUBSEQUENT EVENT On January 2, 2018, the Company declared a dividend of $0.18 per common share for stockholders of record on January 19, 2018. The dividend was paid from cash on hand on January 26, 2018 in an aggregate amount of $3.9 million. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The accompanying financial statements are prepared on a consolidated basis. All inter‑company balances and transactions have been eliminated in consolidation. Our year‑end is December 31. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist primarily of cash on deposit, money market accounts or short-term investments with original maturities of 90 days or less at the date of acquisition. Cash and cash equivalents totaled $27.0 million and $7.0 million at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, we had $18.6 million and $4.8 million, respectively, of cash at our operations outside the United States. |
Receivables | Receivables Receivables are stated at an amount management expects to collect. Based on management’s assessment of the credit history of the customers having outstanding balances and factoring in current economic conditions, management has concluded that potential unidentified losses on balances outstanding at year‑end will not be material. Unbilled receivables are recorded for work performed under contracts that have not yet been invoiced to customers and arise due to the timing of billings. Substantially all unbilled receivables at December 31, 2017, were billed in the following month. |
Restricted Cash and Investments | Restricted Cash and Investments Restricted cash and investments of $5.8 million at December 31, 2017 and 2016, represent funds held in third-party managed trust accounts as collateral for our financial assurance obligations for post-closure activities at our non-operating facilities. These funds are invested in fixed-income U.S. Treasury and government agency securities and money market accounts. The balances are adjusted monthly to fair market value based on quoted prices in active markets for identical or similar assets. |
Revenue Recognition | Revenue Recognition We recognize revenue when persuasive evidence of an arrangement exists, delivery and disposal have occurred or services have been rendered, the price is fixed or determinable and collection is reasonably assured. We recognize revenue from three primary sources: 1) waste treatment, recycling and disposal, 2) field and industrial waste management services and 3) waste transportation services. Waste treatment and disposal revenue results primarily from fees charged to customers for treatment and/or disposal or recycling of specified wastes. Waste treatment and disposal revenue is generally charged on a per-ton or per-yard basis based on contracted prices and is recognized when services are complete. Field and industrial waste management services revenue results primarily from specialty onsite services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response at refineries, chemical plants, steel and automotive plants, and other government, commercial and industrial facilities. These services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. Revenues are recognized over the term of the agreements or as services are performed. Revenue is recognized on contracts with retainage when services have been rendered and collectability is reasonably assured. Transportation revenue results from delivering customer waste to a disposal facility for treatment and/or disposal or recycling. Transportation services are generally not provided on a stand-alone basis and instead are bundled with other Company services. However, in some instances we provide transportation and logistics services for shipment of waste from cleanup sites to disposal facilities operated by other companies. We account for our bundled arrangements as multiple deliverable arrangements and determine the amount of revenue recognized for each deliverable (unit of accounting) using the relative fair value method. Transportation revenue is recognized when the transported waste is received at the disposal facility. Waste treatment and disposal revenue under bundled arrangements is recognized when services are complete and the waste is disposed in the landfill. Burial fees collected from customers for each ton or cubic yard of waste disposed in our landfills are paid to the respective local and/or state government entity and are not included in revenue. Revenue and associated cost from waste that has been received but not yet treated and disposed of in our landfills are deferred until disposal occurs. Our Richland, Washington disposal facility is regulated by the Washington Utilities and Transportation Commission (“ WUTC”), which approves our rates for disposal of low-level radioactive waste (“LLRW”). Annual revenue levels are established based on a rate agreement with the WUTC at amounts sufficient to cover the costs of operation, including facility maintenance, equipment replacement and related costs, and provide us with a reasonable profit. Per-unit rates charged to LLRW customers during the year are based on our evaluation of disposal volume and radioactivity projections submitted to us by waste generators. Our proposed rates are then reviewed and approved by the WUTC. If annual revenue exceeds the approved levels set by the WUTC, we are required to refund excess collections to facility users on a pro-rata basis. Refundable excess collections, if any,are recorded in Accrued liabilities in the consolidated balance sheets. The current rate agreement with the WUTC was extended in 2013 and is effective until January 1, 2020. |
Deferred Revenue | Deferred Revenue Revenue from waste that has been received but not yet treated or disposed or advance billings prior to treatment and disposal services are deferred until such services are completed. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated on the straight‑line method over estimated useful lives. Replacements and major repairs of property and equipment are capitalized and retirements are made when assets are disposed of or when the useful life has been exhausted. Minor components and parts are expensed as incurred. Repair and maintenance expenses were $14.8 million, $11.8 million and $13.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. We assume no salvage value for our depreciable fixed assets. The estimated useful lives for significant property and equipment categories are as follows: Useful Lives Vehicles and other equipment to 10 years Disposal facility and equipment to 20 years Buildings and improvements to 40 years Railcars 40 years |
Disposal Cell Accounting | Disposal Cell Accounting Qualified disposal cell development costs such as personnel and equipment costs incurred to construct new disposal cells are recorded and capitalized at cost. Capitalized cell development costs, net of recorded amortization, are added to estimated future costs of the permitted disposal cell to be incurred over the remaining construction of the cell, to determine the amount to be amortized over the remaining estimated cell life. Estimates of future costs are developed using input from independent engineers and internal technical and accounting managers. We review these estimates at least annually. Amortization is recorded on a unit of consumption basis, typically applying cost as a rate per cubic yard disposed. Disposal facility costs are expected to be fully amortized upon final closure of the facility, as no salvage value applies. Costs associated with ongoing disposal operations are charged to expense as incurred. We have material financial commitments for closure and post‑closure obligations for certain facilities we own or operate. We estimate future cost requirements for closure and post‑closure monitoring based on RCRA and conforming state requirements and facility permits. RCRA requires that companies provide the responsible regulatory agency acceptable financial assurance for closure work and subsequent post‑closure monitoring of each facility for 30 years following closure. Estimates for final closure and post‑closure costs are developed using input from our technical and accounting managers as well as independent engineers and are reviewed by management at least annually. These estimates involve projections of costs that will be incurred after the disposal facility ceases operations, through the required post‑closure care period. The present value of the estimated closure and post‑closure costs are accreted using the interest method of allocation to direct costs in our consolidated statements of operations so that 100% of the future cost has been incurred at the time of payment. |
Business Combinations | Business Combinations We account for business combinations under the acquisition method of accounting. The cost of an acquired company is assigned to the tangible and identifiable intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is assigned to goodwill. The transaction costs associated with business combinations are expensed as they are incurred. |
Goodwill | Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired. Goodwill is not amortized, but instead is assessed for impairment annually in the fourth quarter as of October 1 and also if an event occurs or circumstances change that may indicate a possible impairment. In the event that we determine that the value of goodwill has become impaired, we will incur an accounting charge for the amount of impairment during the period in which the determination has been made. See Note 3 for additional information related to the use of estimates in the Company’s goodwill impairment tests and Note 12 for additional information related to the $5.5 million goodwill impairment charge recorded in the fourth quarter of 2017. |
Intangible Assets | Intangible Assets Intangible assets are stated at the fair value assigned in a business combination net of amortization. We amortize our finite‑lived intangible assets using the straight‑line method over their estimated economic lives ranging from 1 to 45 years. We review intangible assets with indefinite useful lives for impairment during the fourth quarter as of October 1 of each year. We also review both indefinite‑lived and finite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an intangible asset may not be recoverable. See Note 3 for additional information related to the use of estimates in the Company’s intangible assets impairment tests and Note 12 for additional information related to the $3.4 million indefinite-lived intangible asset impairment charge recorded in the fourth quarter of 2017. Our acquired permits and licenses generally have renewal terms of approximately 5-10 years. We have a history of renewing these permits and licenses as demonstrated by the fact that each of the sites’ treatment permits and licenses have been renewed regularly since the facility began operations. We intend to continue to renew our permits and licenses as they come up for renewal for the foreseeable future. Costs incurred to renew or extend the term of our permits and licenses are recorded in Selling, general and administrative expenses in our consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets Long-lived assets consist primarily of property and equipment facility development costs and finite-lived intangible assets. The recoverability of long-lived assets is evaluated periodically through analysis of operating results and consideration of other significant events or changes in the business environment. If an operating unit had indications of possible impairment, we would evaluate whether impairment exists on the basis of undiscounted expected future cash flows from operations over the remaining amortization period. If an impairment loss were to exist, the carrying amount of the related long-lived assets would be reduced to their estimated fair value. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are amortized over the life of our new senior secured credit agreement (the “New Credit Agreement”). Amortization of deferred financing costs is included as a component of interest expense in the consolidated statements of operations. Deferred financing costs associated with the New Credit Agreement were $3.4 million, net of accumulated amortization and have been recorded in Prepaid expenses and other current assets and Other assets in the consolidated balance sheets as of December 31, 2017. Deferred financing costs associated with our Former Term Loan were $5.0 million, net of accumulated amortization and have been recorded to Long-term debt in the consolidated balance sheets as of December 31, 2016. Deferred financing costs associated with our Former Revolving Credit Facility were $1.4 million, net of accumulated amortization and have been recorded in Prepaid expenses and other current assets and Other assets in the consolidated balance sheets as of December 31, 2016. 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 charge of $5.5 million to Interest expense in the second quarter of 2017. |
Derivative Instruments | Derivative Instruments 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. Changes in the fair value of the interest rate swap are recorded as a component of accumulated other comprehensive income within stockholders' equity, and are recognized in interest expense in the period in which the payment is settled. The interest rate swap has an effective date of December 31, 2014 in an initial notional amount of $250.0 million. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. |
Foreign Currency | Foreign Currency Our Canadian operations’ functional currency is the Canadian dollar (“CAD”). Assets and liabilities are translated to U.S. dollars (“USD”) at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period. Gains and losses from the translation of the consolidated financial statements of our Canadian subsidiaries into USD are included in stockholders' equity as a component of Accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are recognized in the consolidated statements of operations. Recorded balances that are denominated in a currency other than the functional currency are re‑measured to the functional currency using the exchange rate at the balance sheet date and gains or losses are recorded in the statements of operations. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability approach. This requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities at the applicable tax rates. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax‑planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The application of income tax law is inherently complex. Tax laws and regulations are voluminous and at times ambiguous and interpretations of guidance regarding such tax laws and regulations change over time. This requires us to make many subjective assumptions and judgments regarding the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. A liability for uncertain tax positions is recorded in our consolidated financial statements on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax position taken will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. As facts and circumstances change, we reassess these probabilities and record any changes in the financial statements as appropriate. Our tax returns are subject to audit by the Internal Revenue Service (“IRS”), various states in the U.S. and the Canadian Revenue Agency. |
Insurance | Insurance Accrued costs for our self‑insured health care coverage were $1.1 million and $1.0 million at December 31, 2017 and 2016, respectively. |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated based on the weighted‑average number of outstanding common shares during the applicable period. Diluted earnings per share is based on the weighted‑average number of outstanding common shares plus the weighted‑average number of potential outstanding common shares. Potential common shares that would increase earnings per share or decrease loss per share are anti‑dilutive and are excluded from earnings per share computations. Earnings per share is computed separately for each period presented. |
Treasury Stock | Treasury Stock Shares of common stock repurchased by us are recorded at cost as treasury stock and result in a reduction of stockholders’ equity in our consolidated balance sheets. Treasury shares are reissued using the weighted average cost method for determining the cost of the shares reissued. The difference between the cost of the shares reissued and the issuance price is added or deducted from additional paid‑in capital. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) . This ASU amends the guidance in Accounting Standards Codification (“ASC”) 220 on the reclassification of certain tax effects from accumulated other comprehensive income. The primary purpose of the ASU is to address industry concerns related to the application of ASC 740 to certain provisions of the new tax reform legislation also known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The guidance is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. An entity will apply this guidance to each period in which the effect of the Tax Act (or portion thereof) is recorded and may apply it either (1) retrospectively as of the date of enactment or (2) as of the beginning of the period of adoption. The Company plans to adopt this pronouncement on January 1, 2018 and does not expect the impact on its consolidated financial statements to be material. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Because of the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under accounting principles generally accepted in the United States (“GAAP”), we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether we expect to have future U.S. inclusions in taxable income related to GILTI depends on not only our current structure and estimated future results of global operations but also our intent and ability to modify our structure and/or our business, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments related to potential GILTI tax in our consolidated financial statements and have not made a policy decision regarding whether to record deferred taxes on GILTI. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Where the Company was able to make reasonable estimates of the effects of elements for which the analysis is not yet complete, the Company recorded provisional amounts. Where the Company was not yet able to make reasonable estimates of the impact of certain elements, we have not recorded any provisional amounts related to those elements and have continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. In January 2017, the FASB issued 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 did not 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 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 presente The Company will adopt this pronouncement on January 1, 2018, using a retrospective adoption method. Upon adoption, amounts described as restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-year and end-of-year amounts presented on the statements of 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. The Company will adopt this pronouncement on January 1, 2018, using a retrospective adoption method and does not expect the impact on its consolidated financial statements to be material. 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. We have elected to account for forfeitures as they occur. 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 will adopt 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 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. As a result of our analysis, we identified and implemented appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. The Company has concluded that the new guidance will not materially affect the timing and amount of revenue recognized. However, the presentation and disclosure requirements of the standard will result in expanded disclosures around the disaggregation of revenue among other new disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property and equipment | Useful Lives Vehicles and other equipment to 10 years Disposal facility and equipment to 20 years Buildings and improvements to 40 years Railcars 40 years |
ACCUMULATED OTHER COMPREHENSI34
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
Schedule of changes in accumulated other comprehensive income (loss) | Foreign Unrealized Gain Currency (Loss) on Interest $s in thousands Translation Rate Hedge Total Balance at December 31, 2015 $ (14,028) $ (3,038) $ (17,066) Other comprehensive income (loss) before reclassifications, net of tax 1,379 (1,121) 258 Amounts reclassified out of AOCI, net of tax (1) — 2,083 2,083 Other comprehensive income, net 1,379 962 2,341 Balance at December 31, 2016 $ (12,649) $ (2,076) $ (14,725) Other comprehensive income before reclassifications, net of tax 4,046 45 4,091 Amounts reclassified out of AOCI, net of tax (2) — 1,530 1,530 Other comprehensive income, net 4,046 1,575 5,621 Balance at December 31, 2017 $ (8,603) $ (501) $ (9,104) (1) Before-tax reclassifications of $3.2 million ($2.1 million after-tax) for the year ended December 31, 2016 were included in Interest expense in the Company’s consolidated statements of operations. Amount relates to the Company’s interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made. Amounts in AOCI expected to be recognized in interest expense over the next 12 months total approximately $3.2 million ($2.1 million after tax). Before-tax reclassifications of $2.3 million ($1.5 million after-tax) for the year ended December 31, 2017 were included in Interest expense in the Company’s consolidated statements of operations. Amount relates 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 $1.8 million ($1.4 million after tax). |
DISCLOSURE OF SUPPLEMENTAL CA35
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of disclosure of supplemental cash flow information | For the Year Ended December 31, $s in thousands 2017 2016 2015 Income taxes and interest paid: Income taxes paid, net of receipts $ 10,714 $ 25,729 $ 27,252 Interest paid 11,364 14,304 18,587 Non-cash investing and financing activities: Closure/Post-closure retirement asset (352) 426 Capital expenditures in accounts payable 2,302 2,906 3,805 Acquisition of equipment with financing arrangements 531 1,156 — Restricted stock issuances from treasury shares 105 408 127 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | 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) $ 1,396 $ 2,649 $ — $ 4,045 Money market funds (2) 1,757 — — 1,757 Total $ 3,153 $ 2,649 $ — $ 5,802 Liabilities: Interest rate swap agreement (3) $ — $ 638 $ — $ 638 Total $ — $ 638 $ — $ 638 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 other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of December 31, 2014 with an initial notional amount of $250.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of the interest rate swap agreement quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other long-term liabilities in the Company’s consolidated balance sheet as of December 31, 2017 and 2016. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RECEIVABLES | |
Schedule of receivables | $s in thousands 2017 2016 Trade $ 96,760 $ Unbilled revenue 16,176 Other 637 Total receivables 113,573 99,153 Allowance for doubtful accounts (2,796) Receivables, net $ 110,777 $ 96,819 |
Schedule of change in the allowance for doubtful accounts receivable | Charged Balance at (Credited) to Recoveries Beginning of Costs and (Deductions/ Balance at $s in thousands Period Expenses Write-offs) Adjustments End of Period Year ended December 31, 2017 $ 2,334 $ 704 $ (255) $ 13 $ 2,796 Year ended December 31, 2016 $ 3,226 $ (186) $ (705) $ (1) $ 2,334 Year ended December 31, 2015 $ 704 $ 2,224 $ 848 $ (550) (1) $ 3,226 (1) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | $s in thousands 2017 2016 Cell development costs $ 142,144 $ 128,821 Land and improvements 36,499 34,285 Buildings and improvements 87,034 78,081 Railcars 17,299 17,299 Vehicles and other equipment 122,697 110,267 Construction in progress 23,334 24,392 Total property and equipment 429,007 393,145 Accumulated depreciation and amortization (194,575) (166,908) Property and equipment, net $ 234,432 $ 226,237 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | Field & Environmental Industrial Services Services Accumulated Accumulated $s in thousands Gross Impairment Gross Impairment Total Balance at December 31, 2015 $ 147,692 $ — $ 44,131 $ — $ 191,823 ESI Acquisition 1,011 — — — 1,011 Vernon Acquisition 354 — — — 354 Foreign currency translation and other adjustments 433 — — — 433 Balance at December 31, 2016 149,490 — 44,131 — 193,621 Impairment charges — (5,457) — — (5,457) Foreign currency translation and other adjustments 1,209 — — — 1,209 Balance at December 31, 2017 $ 150,699 $ (5,457) $ 44,131 $ — $ 189,373 |
Schedule of intangible assets, net | 2017 2016 Accumulated Accumulated $s in thousands Cost Amortization Net Cost Amortization Net Amortizing intangible assets: Permits, licenses and lease $ 111,818 $ (12,459) $ 99,359 $ $ $ Customer relationships 84,977 (20,168) 64,809 Technology - formulae and processes 7,250 (1,630) 5,620 Customer backlog 3,652 (1,291) 2,361 Tradename 4,318 (4,318) — Developed software 2,926 (1,319) 1,607 Non-compete agreements 748 (748) — Internet domain and website 540 (100) 440 Database 393 (153) 240 Total amortizing intangible assets 216,622 (42,186) 174,436 214,373 (31,788) Nonamortizing intangible assets: Permits and licenses 48,241 — 48,241 51,645 — 51,645 Tradename 135 — 135 126 — 126 Total intangible assets $ 264,998 $ (42,186) $ 222,812 $ 266,144 $ (31,788) $ 234,356 |
Schedule of future amortization expense of amortizing intangible assets | Expected $s in thousands Amortization 2018 $ 9,215 2019 9,215 2020 9,215 2021 9,215 2022 9,215 Thereafter 128,361 $ 174,436 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of information regarding significant multi-employer pension benefit plans | Pension Protection Act Certified Plan Employer Plan Zone Status Name of Plan ID Number Number 2017 2016 Operating Engineers Local 324 Pension Fund 38-1900637 Red Red |
CLOSURE AND POST-CLOSURE OBLI41
CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CLOSURE AND POST-CLOSURE OBLIGATIONS | |
Schedule of changes to reported closure and post closure obligations | $s in thousands 2017 2016 Closure and post-closure obligations, beginning of year $ 75,082 $ 71,154 Accretion expense 3,026 3,953 Payments (1,794) (1,754) Adjustments (352) 1,697 Foreign currency translation 126 32 Closure and post-closure obligations, end of year 76,088 75,082 Less current portion (2,330) (2,256) Long-term portion $ 73,758 $ 72,826 |
Schedule of changes in the reported closure and post-closure asset recorded as a component of Property and equipment, net | $s in thousands 2017 2016 Net closure and post-closure asset, beginning of year $ 22,408 $ 23,043 Additions or adjustments to closure and post-closure asset (352) 426 Amortization of closure and post-closure asset (1,757) (1,128) Foreign currency translation 196 67 Net closure and post-closure asset, end of year $ 20,495 $ 22,408 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DEBT | |
Schedule of long-term debt | 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 future maturities of long-term debt, excluding the unamortized discount and debt issuance costs | $s in thousands Maturities 2018 $ — 2019 — 2020 — 2021 — 2022 277,000 Thereafter — $ 277,000 |
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% |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of components of the income tax expense | $s in thousands 2017 2016 2015 Current: U.S. Federal $ 11,157 $ 17,866 $ 17,818 State 2,482 3,324 2,830 Foreign 5,398 2,459 3,279 Total current 19,037 23,649 23,927 Deferred: U.S. Federal (27,029) (1,790) (2,355) State 2,323 (275) 125 Foreign (726) (535) (453) Total deferred (25,432) (2,600) (2,683) Income tax (benefit) expense $ (6,395) $ 21,049 $ 21,244 |
Schedule of reconciliation between the effective income tax rate and the applicable statutory federal and state income tax rate | 2017 2016 2015 Taxes computed at statutory rate 35.0 % 35.0 % 35.0 % Impairment and loss on divestiture 4.4 — 5.7 State income taxes (net of federal income tax benefit) 2.9 3.3 4.0 Non-deductible transaction costs — 0.2 0.3 Tax Cuts and Jobs Act of 2017 (55.4) — — Foreign rate differential (2.9) (1.1) (1.8) Other 1.1 0.7 2.1 (14.9) % 38.1 % 45.3 % |
Schedule of components of the total net deferred tax assets and liabilities | $s in thousands 2017 2016 Deferred tax assets: Net operating loss, foreign tax credit and capital loss carry forwards $ 2,493 $ 3,307 Accruals, allowances and other 3,603 5,269 Environmental compliance and other site related costs 8,549 12,479 Unrealized foreign exchange gains and losses 1,120 2,153 Unrealized gains and losses on interest rate hedge 134 1,119 Total deferred tax assets 15,899 24,327 Less: valuation allowance (2,242) (3,058) Net deferred tax assets 13,657 21,269 Deferred tax liabilities: Property and equipment (18,386) (26,258) Intangible assets (51,575) (74,731) Other (1,279) (1,613) Total deferred tax liabilities (71,240) (102,602) Net deferred tax liability $ (57,583) $ (81,333) |
Schedule of domestic and foreign components of Income (loss) before income taxes | $s in thousands 2017 2016 2015 Domestic $ 26,051 $ 47,859 $ 36,367 Foreign 16,919 7,442 10,488 Income before income taxes $ 42,970 $ 55,301 $ 46,855 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments on non-cancelable operating leases | $s in thousands Payments 2018 $ 5,046 2019 3,721 2020 1,554 2021 1,301 2022 1,106 Thereafter 1,926 $ 14,654 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of stock option activity | Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Term (Years) 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 December 31, 2017 429,729 $ 38.58 $ 5,335 7.0 Exercisable as of December 31, 2017 236,026 $ 37.33 $ 3,227 6.4 |
Schedule of significant weighted-average assumptions relating to the valuation of each option grant | 2017 2016 2015 Expected life 3.8 years 3.8 years 3.6 years Expected volatility 31 % 31 % 35 % Risk-free interest rate 1.5 % 1.1 % 1.2 % Expected dividend yield 1.7 % 1.7 % 1.6 % |
Schedule of components of pre-tax share-based compensation expense (primarily included in Selling, general and administrative expenses in our consolidated statements of operations) and related tax benefits | $s in thousands 2017 2016 2015 Share-based compensation from: Stock options $ 1,141 $ 1,123 $ 808 Restricted stock 1,505 1,272 1,375 Restricted stock units 716 216 — Performance stock units 571 314 114 Total share-based compensation 3,933 2,925 2,297 Income tax benefit (1,403) (1,113) (1,041) Share-based compensation, net of tax $ 2,530 $ 1,812 $ 1,256 |
PSUs | |
Summary of PSU, restricted stock and RSU activity | Weighted Average Grant Date Units Fair Value Outstanding as of December 31, 2016 19,463 $ 48.62 Granted 11,500 62.45 Vested — — Cancelled, expired or forfeited — — Outstanding as of December 31, 2017 30,963 $ 53.76 |
Schedule of assumptions for determining the fair value for PSU awards using Monte Carlo simulation models | 2017 2016 2015 Stock price on grant date $ 49.15 $ 35.05 $ 46.89 Expected term 3.0 years 3.0 years 2.6 years Expected volatility 31 % 29 % 29 % Risk-free interest rate 1.5 % 1.3 % 0.9 % Expected dividend yield 1.5 % 2.1 % 1.5 % |
Restricted stock | |
Summary of PSU, restricted stock and RSU activity | Weighted Average Grant Date Shares Fair Value Outstanding as of December 31, 2016 55,201 $ 42.78 Granted 28,988 49.67 Vested (17,231) 46.36 Cancelled, expired or forfeited (257) 47.89 Outstanding as of December 31, 2017 66,701 $ 44.83 |
RSUs | |
Summary of PSU, restricted stock and RSU activity | Weighted Average Grant Date Units Fair Value Outstanding as of December 31, 2016 19,930 $ 39.10 Granted 34,870 47.93 Vested (6,456) 39.10 Cancelled, expired or forfeited (1,193) 41.92 Outstanding as of December 31, 2017 47,151 $ 45.56 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
Schedule of earnings per share | 2017 2016 2015 $s and shares in thousands, except per share amounts Basic Diluted Basic Diluted Basic Diluted Net income $ 49,365 $ 49,365 $ 34,252 $ 34,252 $ 25,611 $ 25,611 Weighted average basic shares outstanding 21,758 21,758 21,704 21,704 21,637 21,637 Dilutive effect of stock-based awards 144 85 96 Weighted average diluted shares outstanding 21,902 21,789 21,733 Earnings per share $ 2.27 $ 2.25 $ 1.58 $ 1.57 $ 1.18 $ 1.18 Anti-dilutive shares excluded from calculation 103 249 192 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT REPORTING | |
Summary of financial information of our reportable segments | 2017 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 298,320 $ 10,999 $ — $ 309,319 Services Revenue: Transportation and Logistics (1) 67,988 21,964 — 89,952 Industrial Cleaning (2) — 17,760 — 17,760 Technical Services (3) — 74,876 — 74,876 Remediation (4) — 8,012 — 8,012 Other (5) — 4,123 — 4,123 Total Revenue $ 366,308 $ 137,734 $ — $ 504,042 Depreciation, amortization and accretion $ 35,137 $ 5,578 $ 501 $ 41,216 Capital expenditures $ 28,783 $ 4,206 $ 3,251 $ 36,240 Total assets $ 609,174 $ 125,110 $ 67,792 $ 802,076 2016 Field & Environmental Industrial $s in thousands Services Services Corporate Total Treatment & Disposal Revenue $ 275,236 $ 12,582 $ — $ 287,818 Services Revenue: Transportation and Logistics (1) 62,535 17,839 — 80,374 Industrial Cleaning (2) — 21,021 — 21,021 Technical Services (3) — 74,191 — 74,191 Remediation (4) — 11,600 — 11,600 Other (5) — 2,661 — 2,661 Total Revenue $ 337,771 $ 139,894 $ — $ 477,665 Depreciation, amortization and accretion $ 33,839 $ 5,481 $ 512 $ 39,832 Capital expenditures $ 30,098 $ 2,572 $ 3,026 $ 35,696 Total assets $ 599,300 $ 119,198 $ 57,902 $ 776,400 2015 Field & Environmental Industrial $s in thousands Services Services (6) Corporate Total Treatment & Disposal Revenue $ 291,062 $ 12,911 $ — $ 303,973 Services Revenue: Transportation and Logistics (1) 67,978 29,060 — 97,038 Industrial Cleaning (2) — 85,783 — 85,783 Technical Services (3) — 67,479 — 67,479 Remediation (4) — 6,734 — 6,734 Other (5) — 2,063 — 2,063 Total Revenue $ 359,040 $ 204,030 $ — $ 563,070 Depreciation, amortization and accretion $ 34,870 $ 9,425 $ 527 $ 44,822 Capital expenditures $ 29,823 $ 7,513 $ 2,034 $ 39,370 Total assets $ 586,561 $ 124,127 $ 61,299 $ 771,987 (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. Financial data includes the operations of our Allstate business. We completed the divestiture of Allstate on November 1, 2015. |
Reconciliation of Net Income to Adjusted EBITDA and adjusted EBITDA by operating segment | A reconciliation of Net Income to Adjusted EBITDA for the years ended December 31, 2017, 2016 and 2015 is as follows: $s in thousands 2017 2016 2015 Net income $ 49,365 $ 34,252 $ 25,611 Income tax (benefit) expense (6,395) 21,049 21,244 Interest expense 18,157 17,317 23,370 Interest income (62) (96) (65) Foreign currency (gain) loss (516) 138 2,196 Loss (gain) on divestiture — (2,034) 542 Other income (791) (597) (1,267) Impairment charges 8,903 — 6,700 Depreciation and amortization of plant and equipment 28,302 25,304 27,931 Amortization of intangibles 9,888 10,575 12,307 Stock-based compensation 3,933 2,925 2,297 Accretion and non-cash adjustment of closure & post-closure liabilities 3,026 3,953 4,584 Adjusted EBITDA $ 113,810 $ 112,786 $ 125,450 Adjusted EBITDA, by operating segment, for the years ended December 31, 2017, 2016 and 2015 is as follows: $s in thousands 2017 2016 2015 Adjusted EBITDA: Environmental Services $ 146,371 $ 139,698 $ 150,067 Field & Industrial Services 14,709 16,342 21,388 Corporate (47,270) (43,254) (46,005) Total $ 113,810 $ 112,786 $ 125,450 |
Summary of revenues by geographic location | $s in thousands 2017 2016 2015 United States $ 434,511 $ 428,778 $ 521,092 Canada 69,531 48,887 41,978 Total revenue $ 504,042 $ 477,665 $ 563,070 |
Schedule of long-lived assets by geographic location | $s in thousands 2017 2016 United States $ 396,066 $ 405,767 Canada 61,178 54,826 Total long-lived assets $ 457,244 $ 460,593 |
QUARTERLY FINANCIAL DATA (una48
QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (unaudited) | |
Schedule of unaudited consolidated quarterly results of operations | Three-Months Ended $s and shares in thousands, except per share amounts Mar. 31, June 30, Sept. 30, Dec. 31, Year 2017 Revenue $ 110,234 $ 126,057 $ 134,054 $ 133,697 $ 504,042 Gross profit 31,873 35,896 37,733 47,625 153,127 Operating income 12,159 15,896 15,289 16,414 59,758 Net income 5,185 5,049 8,365 30,766 49,365 Earnings per share—diluted (1) $ 0.24 $ 0.23 $ 0.38 $ 1.40 $ 2.25 Weighted average common shares outstanding used in the diluted earnings per share calculation 21,845 21,890 21,931 21,927 21,902 Dividends paid per share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72 2016 Revenue $ 113,318 $ 122,351 $ 124,824 $ 117,172 $ 477,665 Gross profit 35,208 36,906 39,354 36,127 147,595 Operating income 15,783 17,087 20,915 16,244 70,029 Net income 7,517 8,938 10,114 7,683 34,252 Earnings per share—diluted (1) $ 0.35 $ 0.41 $ 0.46 $ 0.35 $ 1.57 Weighted average common shares outstanding used in the diluted earnings per share calculation 21,745 21,790 21,804 21,814 21,789 Dividends paid per share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72 (1) |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
DESCRIPTION OF BUSINESS | |
Number of operating segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Property and Equipment | ||||
Repair and maintenance expenses | $ 14,800 | $ 11,800 | $ 13,900 | |
Salvage value for the depreciable fixed assets | 0 | |||
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents, at Carrying Value | 27,042 | 7,015 | $ 5,989 | $ 22,971 |
Restricted Cash and Investments | ||||
Restricted cash and investments | $ 5,802 | 5,787 | ||
Revenue Recognition | ||||
Number of primary sources for revenue recognition | item | 3 | |||
Non-US Operations | ||||
Cash and Cash Equivalents | ||||
Cash | $ 18,600 | $ 4,800 | ||
Vehicles and other equipment | Minimum | ||||
Property and Equipment | ||||
Useful Lives | 3 years | |||
Vehicles and other equipment | Maximum | ||||
Property and Equipment | ||||
Useful Lives | 10 years | |||
Disposal facility and equipment | Minimum | ||||
Property and Equipment | ||||
Useful Lives | 3 years | |||
Disposal facility and equipment | Maximum | ||||
Property and Equipment | ||||
Useful Lives | 20 years | |||
Buildings and improvements | Minimum | ||||
Property and Equipment | ||||
Useful Lives | 5 years | |||
Buildings and improvements | Maximum | ||||
Property and Equipment | ||||
Useful Lives | 40 years | |||
Railcars | ||||
Property and Equipment | ||||
Useful Lives | 40 years |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Intangible Assets | ||||
Indefinite lived intangible asset impairment | $ 3,400 | |||
Disposal Cell Accounting | ||||
Period of acceptable financial assurance for closure and post-closure monitoring of each facility as per RCRA requirements | 30 years | |||
Goodwill. | ||||
Impairment charges | 5,500 | $ 5,457 | ||
Derivative Instruments | ||||
Initial notional amount | 250,000 | 250,000 | $ 250,000 | |
Insurance | ||||
Accrued costs for self-insured health care coverage | $ 1,100 | $ 1,100 | $ 1,000 | |
Minimum | ||||
Intangible Assets | ||||
Estimated economic lives | 1 year | |||
Maximum | ||||
Intangible Assets | ||||
Estimated economic lives | 45 years | |||
Permits and licenses | Minimum | ||||
Intangible Assets | ||||
Renewal terms of acquired intangible assets | 5 years | |||
Permits and licenses | Maximum | ||||
Intangible Assets | ||||
Renewal terms of acquired intangible assets | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DEFERRED FINANCING COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Former Credit Agreement | |||
Deferred Financing Costs | |||
Amortization of Financing Costs and Discounts, Total | $ 5.5 | ||
Long-term Debt. | Former Term Loan | |||
Deferred Financing Costs | |||
Deferred financing costs, net of amortization | $ 5 | ||
Prepaid Expenses and other current assets | Former Revolving Credit Facility | |||
Deferred Financing Costs | |||
Deferred financing costs, net of amortization | $ 1.4 | ||
Prepaid Expenses and other current assets | New Credit Agreement, Letter Of Credit | |||
Deferred Financing Costs | |||
Deferred financing costs, net of amortization | $ 3.4 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) | Oct. 01, 2016 | May 02, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 |
BUSINESS ACQUISITIONS | |||||
Payment to acquire business, net of cash acquired | $ 9,983,000 | ||||
Goodwill | $ 193,621,000 | $ 189,373,000 | $ 191,823,000 | ||
ESI | |||||
BUSINESS ACQUISITIONS | |||||
Percentage of outstanding shares acquired | 100.00% | ||||
Payment to acquire business, net of cash acquired | $ 4,900,000 | ||||
Goodwill | 1,000,000 | ||||
Identifiable intangible assets | $ 813,000 | ||||
Weighted average amortization period | 14 years | ||||
Indefinite-lived environmental permits | $ 686,000 | ||||
Vernon | |||||
BUSINESS ACQUISITIONS | |||||
Goodwill | $ 354,000 | ||||
Identifiable intangible assets | $ 1,900,000 | ||||
Weighted average amortization period | 20 years | ||||
Indefinite-lived environmental permits | $ 1,300,000 | ||||
Total purchase price | $ 5,000,000 |
DIVESTITURES (Details)
DIVESTITURES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 25, 2016 | Apr. 05, 2016 | Nov. 01, 2015 | |
Divestiture | |||||||
Gain (loss) on divestiture | $ 2,034,000 | $ (542,000) | |||||
Non-cash goodwill impairment charge | $ 5,500,000 | $ 5,457,000 | |||||
Augusta Georgia facility | Disposed of by Sale | |||||||
Divestiture | |||||||
Cash consideration | $ 1,900,000 | ||||||
Gain (loss) on divestiture | 1,900,000 | ||||||
Allstate | Disposed of by Sale | |||||||
Divestiture | |||||||
Cash consideration | $ 827,000 | $ 58,800,000 | |||||
Gain (loss) on divestiture | $ 178,000 | (542,000) | |||||
Non-cash goodwill impairment charge | 6,400,000 | ||||||
Loss before income taxes | $ (4,900,000) |
ACCUMULATED OTHER COMPREHENSI55
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated other comprehensive income (loss) | |||
Balance at the beginning | $ 280,024 | $ 256,135 | $ 251,337 |
Other comprehensive income | 5,621 | 2,341 | (9,380) |
Balance at the end | 324,077 | 280,024 | 256,135 |
Foreign Currency Translation | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning | (12,649) | (14,028) | |
Other comprehensive income (loss) before reclassifications, net of tax | 4,046 | 1,379 | |
Other comprehensive income | 4,046 | 1,379 | |
Balance at the end | (8,603) | (12,649) | (14,028) |
Unrealized Gain (Loss) on Interest Rate Hedge | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning | (2,076) | (3,038) | |
Other comprehensive income (loss) before reclassifications, net of tax | 45 | (1,121) | |
Amounts reclassified out of AOCI, net of tax | 1,530 | 2,083 | |
Other comprehensive income | 1,575 | 962 | |
Balance at the end | (501) | (2,076) | (3,038) |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning | (14,725) | (17,066) | (7,686) |
Other comprehensive income (loss) before reclassifications, net of tax | 4,091 | 258 | |
Amounts reclassified out of AOCI, net of tax | 1,530 | 2,083 | |
Other comprehensive income | 5,621 | 2,341 | (9,380) |
Balance at the end | $ (9,104) | $ (14,725) | $ (17,066) |
ACCUMULATED OTHER COMPREHENSI56
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) -Reclassifications Line Items (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification adjustments | |||
Interest expense | $ 18,157 | $ 17,317 | $ 23,370 |
Unrealized Gain (Loss) on Interest Rate Hedge | Interest rate swap agreement | |||
Reclassification adjustments | |||
Amounts in AOCI expected to be recognized over the next 12 months before tax | 1,800 | 3,200 | |
Amounts in AOCI expected to be recognized over the next 12 months, net of taxes | 1,400 | 2,100 | |
Unrealized Gain (Loss) on Interest Rate Hedge | Interest rate swap agreement | Reclassification out of accumulated other comprehensive income | |||
Reclassification adjustments | |||
Interest expense | 2,300 | 3,200 | |
Interest expense, net of tax | $ 1,500 | $ 2,100 |
DISCLOSURE OF SUPPLEMENTAL CA57
DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes and interest paid: | |||
Income taxes paid, net of receipts | $ 10,714 | $ 25,729 | $ 27,252 |
Interest paid | 11,364 | 14,304 | 18,587 |
Non-cash investing and financing activities: | |||
Closure/Post-closure retirement asset | (352) | (349) | |
Closure/Post-closure retirement asset | 426 | ||
Capital expenditures in accounts payable | 2,302 | 2,906 | 3,805 |
Acquisition of equipment with financing arrangements | 531 | 1,156 | |
Restricted stock issued from treasury shares | $ 105 | $ 408 | $ 127 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
Assets measured at fair value on a recurring basis | |||
Initial notional amount | $ 250,000 | $ 250,000 | |
Recurring | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 5,802 | $ 5,787 | |
Liabilities fair value disclosure | 638 | 3,198 | |
Recurring | Interest rate swap agreement | |||
Assets measured at fair value on a recurring basis | |||
Liabilities fair value disclosure | 638 | 3,198 | |
Recurring | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 4,045 | 4,080 | |
Recurring | Money market funds | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 1,757 | 1,707 | |
Recurring | Quoted Prices in Active Markets (Level 1) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 3,153 | 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 | 1,396 | 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 | 1,757 | 1,707 | |
Recurring | Other Observable Inputs (Level 2) | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | 2,649 | 3,473 | |
Liabilities fair value disclosure | 638 | 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 | 638 | 3,198 | |
Recurring | Other Observable Inputs (Level 2) | Fixed-income securities | |||
Assets measured at fair value on a recurring basis | |||
Assets fair value disclosure | $ 2,649 | $ 3,473 |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK (Details) - Labor Concentrations | Dec. 31, 2017employee |
Non-unionized employees | |
CONCENTRATIONS AND CREDIT RISK | |
Number of employees | 1,233 |
Paper, Allied-Industrial Chemical & Energy Workers International Union | Unionized employees | |
CONCENTRATIONS AND CREDIT RISK | |
Number of employees | 27 |
Communications, Energy and Paperworkers Union of Canada | Unionized employees | |
CONCENTRATIONS AND CREDIT RISK | |
Number of employees | 117 |
Local 324 Operating Engineers Union | Unionized employees | |
CONCENTRATIONS AND CREDIT RISK | |
Number of employees | 146 |
Teamsters and Operating Engineers Union | Unionized employees | |
CONCENTRATIONS AND CREDIT RISK | |
Number of employees | 49 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
RECEIVABLES | |||||
Trade | $ 96,760 | $ 84,487 | |||
Unbilled revenue | 16,176 | 13,835 | |||
Other | 637 | 831 | |||
Total receivables | 113,573 | 99,153 | |||
Allowance for doubtful accounts | $ (2,334) | $ (3,226) | $ (704) | (2,796) | (2,334) |
Receivables, net | $ 110,777 | $ 96,819 | |||
Change in the allowance for doubtful accounts receivable | |||||
Balance at Beginning of Period | 2,334 | 3,226 | 704 | ||
Charged to Costs and Expenses | 2,224 | ||||
Credited to Costs and Expenses | 704 | (186) | |||
Deductions/Write-offs | (255) | (705) | 848 | ||
Adjustments | 13 | (1) | (550) | ||
Balance at End of Period | $ 2,796 | $ 2,334 | $ 3,226 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 429,007 | $ 393,145 | |
Accumulated depreciation and amortization | (194,575) | (166,908) | |
Property and equipment, net | 234,432 | 226,237 | |
Depreciation and amortization of plant and equipment | 28,302 | 25,304 | $ 27,931 |
Cell development costs | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 142,144 | 128,821 | |
Land and improvements | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 36,499 | 34,285 | |
Buildings and improvements | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 87,034 | 78,081 | |
Railcars | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 17,299 | 17,299 | |
Vehicles and other equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 122,697 | 110,267 | |
Construction in progress | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 23,334 | $ 24,392 |
GOODWILL AND INTANGIBLE ASSET62
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 01, 2017 | |
Changes in goodwill | |||||
Balance at the beginning of the period | $ 193,621 | $ 191,823 | |||
Foreign currency translation and other adjustments | 1,209 | 433 | |||
Balance at the end of the period | $ 189,373 | 189,373 | 193,621 | ||
Accumulated Impairment | |||||
Impairment charges | (5,500) | (5,457) | |||
ESI | |||||
Changes in goodwill | |||||
Acquisition | 1,011 | ||||
Vernon | |||||
Changes in goodwill | |||||
Acquisition | 354 | ||||
Environmental Services | |||||
Changes in goodwill | |||||
Balance at the beginning of the period | 149,490 | 147,692 | |||
Foreign currency translation and other adjustments | 1,209 | 433 | |||
Balance at the end of the period | 150,699 | 150,699 | 149,490 | ||
Accumulated Impairment | |||||
Impairment charges | $ (6,700) | (5,457) | |||
Accumulated impairment at the ending | (5,457) | (5,457) | |||
Environmental Services | ESI | |||||
Changes in goodwill | |||||
Acquisition | 1,011 | ||||
Environmental Services | Vernon | |||||
Changes in goodwill | |||||
Acquisition | 354 | ||||
Environmental Services | Resource Recovery | |||||
Changes in goodwill | |||||
Balance at the beginning of the period | 5,500 | ||||
Accumulated Impairment | |||||
Impairment charges | (5,500) | ||||
Carrying value greater than fair value | $ 5,500 | ||||
Field and Industrial Services | |||||
Changes in goodwill | |||||
Balance at the beginning of the period | 44,131 | 44,131 | |||
Balance at the end of the period | $ 44,131 | $ 44,131 | $ 44,131 |
GOODWILL AND INTANGIBLE ASSET63
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 01, 2017 | |
Intangible Assets | |||||
Amortizing intangible assets, Cost | $ 216,622 | $ 216,622 | $ 214,373 | ||
Accumulated amortization | (42,186) | (42,186) | (31,788) | ||
Amortizing intangible assets, Net | 174,436 | 174,436 | 182,585 | ||
Total intangible assets, cost | 264,998 | 264,998 | 266,144 | ||
Total intangible assets, net | 222,812 | 222,812 | 234,356 | ||
Indefinite lived intangible asset impairment | 3,400 | ||||
Amortization of intangible assets | 9,888 | 10,575 | $ 12,307 | ||
Permits and licenses | |||||
Intangible Assets | |||||
Nonamortizing intangible assets | 48,241 | 48,241 | 51,645 | ||
Tradename | |||||
Intangible Assets | |||||
Nonamortizing intangible assets | 135 | 135 | 126 | ||
Permits, licenses and lease | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 111,818 | 111,818 | 110,341 | ||
Accumulated amortization | (12,459) | (12,459) | (9,462) | ||
Amortizing intangible assets, Net | 99,359 | 99,359 | 100,879 | ||
Customer relationships | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 84,977 | 84,977 | 84,711 | ||
Accumulated amortization | (20,168) | (20,168) | (14,519) | ||
Amortizing intangible assets, Net | 64,809 | 64,809 | 70,192 | ||
Technology - formulae and processes | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 7,250 | 7,250 | 6,770 | ||
Accumulated amortization | (1,630) | (1,630) | (1,305) | ||
Amortizing intangible assets, Net | 5,620 | 5,620 | 5,465 | ||
Customer backlog | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 3,652 | 3,652 | 3,652 | ||
Accumulated amortization | (1,291) | (1,291) | (926) | ||
Amortizing intangible assets, Net | 2,361 | 2,361 | 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 | 2,926 | 2,926 | 2,907 | ||
Accumulated amortization | (1,319) | (1,319) | (994) | ||
Amortizing intangible assets, Net | 1,607 | 1,607 | 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 | (100) | (100) | (72) | ||
Amortizing intangible assets, Net | 440 | 440 | 468 | ||
Database | |||||
Intangible Assets | |||||
Amortizing intangible assets, Cost | 393 | 393 | 387 | ||
Accumulated amortization | (153) | (153) | (118) | ||
Amortizing intangible assets, Net | 240 | $ 240 | $ 269 | ||
Resource Recovery | Environmental Services | |||||
Intangible Assets | |||||
Total intangible assets, net | $ 3,700 | ||||
Indefinite lived intangible asset impairment | $ 3,400 |
GOODWILL AND INTANGIBLE ASSET64
GOODWILL AND INTANGIBLE ASSETS - Future amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Expected future amortization expense of amortizing intangible assets | ||
2,018 | $ 9,215 | |
2,019 | 9,215 | |
2,020 | 9,215 | |
2,021 | 9,215 | |
2,022 | 9,215 | |
Thereafter | 128,361 | |
Amortizing intangible assets, Net | $ 174,436 | $ 182,585 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)planitememployee | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Defined contribution plans | |||
Number of remaining collective bargaining agreements | item | 3 | ||
The Plan | |||
Defined contribution plans | |||
Entity's matching contribution (as a percent) | 55.00% | ||
Company's contribution as a percentage of eligible compensation | 6.00% | ||
Entity's matching contributions to the Plan | $ 2,100,000 | $ 1,900,000 | $ 2,300,000 |
The SPP | |||
Defined contribution plans | |||
Company's contribution as a percentage of eligible compensation | 5.00% | ||
Entity's matching contributions to the Plan | $ 556,000 | 507,000 | $ 515,000 |
Multi-employer defined benefit pension plans | |||
Defined contribution plans | |||
Number of multi-employer plans | plan | 3 | ||
Operating Engineers Local 324 Pension Fund | |||
Defined contribution plans | |||
Total contributions made | $ 1,000,000 | 933,000 | |
Number of employees under union contracts | employee | 146 | ||
Contributions to multi-employer plans not individually significant | |||
Defined contribution plans | |||
Total contributions made | $ 217,000 | $ 229,000 |
CLOSURE AND POST-CLOSURE OBLI66
CLOSURE AND POST-CLOSURE OBLIGATIONS (Details) - Surety bond | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Closure obligations | |
Period for which the guarantee obligation is required to be maintained | 25 years |
Carrying value of Commercial bonds dedicated for closure obligations | $ 752,000 |
CLOSURE AND POST-CLOSURE OBLI67
CLOSURE AND POST-CLOSURE OBLIGATIONS - FAIR VALUE ASSUMPTIONS (Details) - Asset retirement obligations | 12 Months Ended |
Dec. 31, 2017 | |
Fair value of future asset retirement obligations | |
Estimated inflation rate (as a percent) | 2.60% |
Weighted-average | |
Fair value of future asset retirement obligations | |
Risk-free interest rate (as a percent) | 5.90% |
CLOSURE AND POST-CLOSURE OBLI68
CLOSURE AND POST-CLOSURE OBLIGATIONS - Rollforward (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes to reported closure and post-closure obligations | |||
Closure and post-closure obligations, beginning of period | $ 75,082,000 | $ 71,154,000 | |
Accretion expense | 3,026,000 | 3,953,000 | $ 4,584,000 |
Payments | (1,794,000) | (1,754,000) | |
Adjustments | (352,000) | 1,697,000 | |
Foreign currency translation | 126,000 | 32,000 | |
Closure and post-closure obligations, end of period | 76,088,000 | 75,082,000 | $ 71,154,000 |
Less current portion | (2,330,000) | (2,256,000) | |
Long-term portion | 73,758,000 | 72,826,000 | |
Grand View, Idaho | Operating disposal facilities | |||
Changes to reported closure and post-closure obligations | |||
Adjustments | (897,000) | ||
Blainville, Quebec, Canada | Non-operating disposal facilities | |||
Changes to reported closure and post-closure obligations | |||
Adjustments | 1,300,000 | ||
Blainville, Quebec, Canada | Operating disposal facilities | |||
Changes to reported closure and post-closure obligations | |||
Adjustments | $ 545,000 | $ 496,000 |
CLOSURE AND POST-CLOSURE OBLI69
CLOSURE AND POST-CLOSURE OBLIGATIONS - CHANGES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in the reported closure and post-closure asset, recorded as a component of Property and equipment, net | ||
Net closure and post-closure asset, beginning of year | $ 22,408 | $ 23,043 |
Additions or adjustments to closure and post-closure asset | (352) | 426 |
Amortization of closure and post-closure asset | (1,757) | (1,128) |
Foreign currency translation | 196 | 67 |
Net closure and post-closure asset, end of year | $ 20,495 | $ 22,408 |
DEBT - Schedule (Details)
DEBT - Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Loan amount | $ 277,000 | |
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 | ||
Loan amount | $ 277,000 | |
Former Term Loan | ||
Long-term debt | ||
Loan amount | 283,040 | |
Unamortized discount and debt issuance costs | $ (5,678) |
DEBT - Future Maturities (Detai
DEBT - Future Maturities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Future maturities of long-term debt, excluding unamortized net discount | |
2,022 | $ 277,000 |
Term loan | $ 277,000 |
DEBT - Paragraph (Details)
DEBT - Paragraph (Details) - USD ($) $ in Thousands | Apr. 18, 2017 | Jun. 17, 2014 | Jun. 30, 2017 | Dec. 31, 2017 | Apr. 17, 2017 | Dec. 31, 2016 |
DEBT | ||||||
Loan amount | $ 277,000 | |||||
Sweep Arrangements | ||||||
DEBT | ||||||
Advances outstanding | 0 | |||||
Interest Expense. | ||||||
DEBT | ||||||
Amortization of Financing Costs and Discounts | $ 5,500 | |||||
Former Credit Agreement | ||||||
DEBT | ||||||
Maximum borrowing capacity | $ 540,000 | |||||
Early termination penalties incurred | $ 0 | |||||
Amortization of Financing Costs and Discounts | $ 5,500 | |||||
Former Term Loan | ||||||
DEBT | ||||||
Maximum borrowing capacity | $ 415,000 | |||||
Amount outstanding | $ 278,300 | |||||
Loan amount | $ 283,040 | |||||
Former Term Loan | LIBOR | ||||||
DEBT | ||||||
Percentage points added to the reference rate | 3.00% | |||||
Former Term Loan | Base rate | ||||||
DEBT | ||||||
Percentage points added to the reference rate | 2.00% | |||||
Former Revolving Credit Facility | ||||||
DEBT | ||||||
Maximum borrowing capacity | $ 125,000 | |||||
Amount outstanding | $ 0 | $ 2,200 | ||||
Revolving credit facility | ||||||
DEBT | ||||||
Availability for borrowings under line of credit | 216,700 | |||||
Line of credit issued in the form of a standby letters of credit | $ 6,300 | |||||
Letter of credit | ||||||
DEBT | ||||||
Maximum borrowing capacity | $ 50,000 | |||||
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% | |||||
Amount of debt hedged | $ 190,000 | |||||
Debt instrument, aggregate annual amortization as a percentage of original principal amount | 69.00% | |||||
Loan amount | $ 277,000 | |||||
Voting equity interest in foreign subsidiaries pledged as security (as a percent) | 100.00% | |||||
Non-voting equity interest in foreign subsidiaries pledged as security (as a percent) | 65.00% | |||||
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 | |||||
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 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||
U.S. Federal | $ 11,157 | $ 17,866 | $ 17,818 | ||
State | 2,482 | 3,324 | 2,830 | ||
Foreign | 5,398 | 2,459 | 3,279 | ||
Total current | 19,037 | 23,649 | 23,927 | ||
Deferred: | |||||
U.S. Federal | (27,029) | (1,790) | (2,355) | ||
State | 2,323 | (275) | 125 | ||
Foreign | (726) | (535) | (453) | ||
Total deferred | (25,432) | (2,600) | (2,683) | ||
Income tax expense | $ (6,395) | $ 21,049 | $ 21,244 | ||
Reconciliation between the effective income tax rate and the applicable statutory federal and state income tax rate | |||||
Taxes computed at statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | ||
Impairment and loss on divestiture | 4.40% | 5.70% | |||
State income taxes (net of federal income tax benefit) (as a percent) | 2.90% | 3.30% | 4.00% | ||
Non-deductible transaction costs (as a percent) | 0.20% | 0.30% | |||
Tax Cuts and Jobs Act of 2017 (as a percent) | (55.40%) | ||||
Foreign rate differential (as a percent) | (2.90%) | (1.10%) | (1.80%) | ||
Other (as a percent) | 1.10% | 0.70% | 2.10% | ||
Total (as a percent) | (14.90%) | 38.10% | 45.30% | ||
Net income tax benefit | $ (23,800) | ||||
Tax benefit related to the remeasurment of certain deferred tax assets and liabilities | (25,200) | ||||
Foreign earnings | 1,400 | ||||
Cumulative foreign earnings | 26,700 | ||||
Current tax expense | $ 1,400 | ||||
Forecast | |||||
Reconciliation between the effective income tax rate and the applicable statutory federal and state income tax rate | |||||
Taxes computed at statutory rate (as a percent) | 21.00% |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss and foreign tax credit and capital loss carry forwards | $ 2,493,000 | $ 3,307,000 |
Accruals, allowances and other | 3,603,000 | 5,269,000 |
Environmental compliance and other site related costs | 8,549,000 | 12,479,000 |
Unrealized foreign exchange gains and losses | 1,120,000 | 2,153,000 |
Unrealized gains and losses on interest rate hedge | 134,000 | 1,119,000 |
Total deferred tax assets | 15,899,000 | 24,327,000 |
Less: valuation allowance | (2,242,000) | (3,058,000) |
Net deferred tax assets | 13,657,000 | 21,269,000 |
Deferred tax liabilities: | ||
Property and equipment | (18,386,000) | (26,258,000) |
Intangible assets | (51,575,000) | (74,731,000) |
Other | (1,279,000) | (1,613,000) |
Total deferred tax liabilities | (71,240,000) | (102,602,000) |
Net deferred tax liability | (57,583,000) | (81,333,000) |
Capital loss carry forwards | 2,700,000 | |
Valuation allowance for certain deferred tax assets | 182,000 | $ 278,000 |
Foreign | ||
Deferred tax liabilities: | ||
Foreign tax credit carry forwards | 1,400,000 | |
Valuation allowance for certain deferred tax assets | 0 | |
State | ||
Deferred tax liabilities: | ||
Valuation allowance for certain deferred tax assets | $ 8,900,000 |
INCOME TAXES - DOMESTIC AND FOR
INCOME TAXES - DOMESTIC AND FOREIGN COMPONENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation Allowance | |||
Valuation allowance | $ 2,242 | $ 3,058 | |
Domestic and foreign components of Income (loss) before income taxes | |||
Domestic | 26,051 | 47,859 | $ 36,367 |
Foreign | 16,919 | 7,442 | 10,488 |
Income before income taxes | 42,970 | $ 55,301 | $ 46,855 |
Changes to unrecognized tax benefits (excluding related penalties and interest) | |||
Unrecognized tax benefits | $ 0 |
COMMITMENTS AND CONTINGENCIES76
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Future minimum lease payments on non-cancellable operating leases | |||
2,018 | $ 5,046 | ||
2,019 | 3,721 | ||
2,020 | 1,554 | ||
2,021 | 1,301 | ||
2,022 | 1,106 | ||
Thereafter | 1,926 | ||
Total | 14,654 | ||
Rental expense under operating leases | $ 7,600 | $ 7,800 | $ 8,200 |
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 | Dec. 31, 2017 | May 27, 2015 |
Stock-Based Compensation Plans | ||
Number of shares authorized for grant | 1,500,000 | |
Number of shares available for future grant | 1,148,041 |
EQUITY - PSUs, Restricted Stock
EQUITY - PSUs, Restricted Stock and RSU (Details) - USD ($) | Jan. 04, 2016 | Jan. 01, 2016 | May 27, 2015 | Jan. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
PSUs | |||||||
Stock-Based Compensation Plans | |||||||
Number of Common Stock Shares Each Performance Stock Unit Can Be Settled For | 1 | 1 | |||||
Vesting period | 3 years | 3 years | |||||
Assumptions used in Monte Carlo simulation | |||||||
Stock price on grant date | $ 49.15 | $ 35.05 | $ 46.89 | ||||
Expected term (years) | 3 years | 3 years | 2 years 7 months 6 days | ||||
Expected volatility (as a percent) | 31.00% | 29.00% | 29.00% | ||||
Risk-free interest rate (as a percent) | 1.50% | 1.30% | 0.90% | ||||
Expected dividend yield (as a percent) | 1.50% | 2.10% | 1.50% | ||||
Shares | |||||||
Outstanding at the beginning of the year (in shares) | 19,463 | ||||||
Granted (in shares) | 11,500 | ||||||
Outstanding at the end of the year (in shares) | 30,963 | 19,463 | |||||
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 | ||||||
Outstanding at the end of the period (in dollars per share) | $ 53.76 | $ 48.62 | |||||
Additional disclosures | |||||||
Total fair value of restricted stock vested | $ 62.45 | $ 41.22 | $ 65.78 | ||||
PSUs | Minimum | |||||||
Stock-Based Compensation Plans | |||||||
Percentage payout rate | 0.00% | 0.00% | |||||
PSUs | Maximum | |||||||
Stock-Based Compensation Plans | |||||||
Percentage payout rate | 200.00% | 200.00% | |||||
Restricted stock | |||||||
Stock-Based Compensation Plans | |||||||
Vesting period | 3 years | ||||||
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 | 55,201 | |||||
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 | $ 42.78 | |||||
Additional disclosures | |||||||
Total fair value of restricted stock vested | $ 868,000 | $ 1,400,000 | 1,400,000 | ||||
RSUs | |||||||
Stock-Based Compensation Plans | |||||||
Vesting period | 3 years | ||||||
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 | 19,930 | |||||
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 | $ 39.10 | |||||
Additional disclosures | |||||||
Total fair value of restricted stock vested | $ 314,000 | $ 0 | $ 0 | ||||
Director Plan | Restricted stock | Minimum | Non-employee directors | |||||||
Stock-Based Compensation Plans | |||||||
Vesting requirement condition, percentage of attendance in regularly scheduled board meetings | 75.00% | ||||||
Vesting requirement condition, percentage of attendance in regularly scheduled committee meetings that they are a member of | 75.00% |
EQUITY - Stock Options (Details
EQUITY - Stock Options (Details) - Stock options - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assumptions used in Monte Carlo simulation | |||
Expected term (years) | 3 years 9 months 18 days | 3 years 9 months 18 days | 3 years 7 months 6 days |
Expected volatility (as a percent) | 31.00% | 31.00% | 35.00% |
Risk-free interest rate (as a percent) | 1.50% | 1.10% | 1.20% |
Expected dividend yield (as a percent) | 1.70% | 1.70% | 1.60% |
Shares | |||
Outstanding at the beginning of the period (in shares) | 446,498 | ||
Granted (in shares) | 38,087 | ||
Exercised (in shares) | (49,200) | ||
Cancelled, expired or forfeited (in shares) | (5,656) | ||
Outstanding at the end of the period (in shares) | 429,729 | 446,498 | |
Exercisable at the end of the period (in shares) | 236,026 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 36.49 | ||
Granted (in dollars per share) | 49.27 | ||
Exercised (in dollars per share) | 27.55 | ||
Cancelled, expired or forfeited (in dollars per share) | 41.46 | ||
Outstanding at the end of the period (in dollars per share) | 38.58 | $ 36.49 | |
Exercisable at the end of the period (in dollars per share) | $ 37.33 | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the year (in dollars) | $ 5,335,000 | ||
Exercisable at the end of the year (in dollars) | $ 3,227,000 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Outstanding at the end of the year | 7 years | ||
Exercisable at the end of the year | 6 years 4 months 24 days | ||
Additional disclosures | |||
Expiration term | 10 years | ||
Weighted average grant date fair value (in dollars per share) | $ 10.92 | $ 8.19 | $ 11.83 |
Intrinsic value of stock options exercised | $ 1,000,000 | $ 307,000 | $ 2,000,000 |
Number of options exercised via net share settlement | 7,471 | ||
Minimum | |||
Additional disclosures | |||
Performance period | 3 years | ||
Minimum | Non-employee directors | |||
Additional disclosures | |||
Vesting requirement condition, percentage of attendance in regularly scheduled board meetings | 75.00% | ||
Maximum | |||
Additional disclosures | |||
Performance period | 5 years |
EQUITY - Treasury Stock (Detail
EQUITY - Treasury Stock (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Treasury Stock | |
Repurchase of common stock (in shares) | shares | 2,502 |
Average cost of repurchase (in dollars per share) | $ / shares | $ 48.54 |
Restricted stock | |
Treasury Stock | |
Issuance of restricted stock from treasury stock (in shares) | shares | 7,500 |
Average cost (in dollars per share) | $ / shares | $ 15.06 |
EQUITY - SHARE-BASED COMPENSATI
EQUITY - SHARE-BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation Expense | |||
Total share-based compensation | $ 3,933 | $ 2,925 | $ 2,297 |
Income tax benefit | (1,403) | (1,113) | (1,041) |
Share-based compensation, net of tax | 2,530 | 1,812 | 1,256 |
Unrecognized Share-Based Compensation Expense | |||
Unrecognized compensation expense related to unvested share-based awards granted | $ 4,100 | ||
Weighted average remaining vesting period over which expense is expected to be recognized | 2 years | ||
Stock options | |||
Share-Based Compensation Expense | |||
Total share-based compensation | $ 1,141 | 1,123 | 808 |
Restricted stock | |||
Share-Based Compensation Expense | |||
Total share-based compensation | 1,505 | 1,272 | 1,375 |
RSUs | |||
Share-Based Compensation Expense | |||
Total share-based compensation | 716 | 216 | |
PSUs | |||
Share-Based Compensation Expense | |||
Total share-based compensation | $ 571 | $ 314 | $ 114 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
EARNINGS PER SHARE | |||||||||||
Net income | $ 30,766 | $ 8,365 | $ 5,049 | $ 5,185 | $ 7,683 | $ 10,114 | $ 8,938 | $ 7,517 | $ 49,365 | $ 34,252 | $ 25,611 |
Basic | |||||||||||
Weighted average basic shares outstanding | 21,758 | 21,704 | 21,637 | ||||||||
Earnings per share (in dollars per share) | $ 2.27 | $ 1.58 | $ 1.18 | ||||||||
Diluted | |||||||||||
Weighted average basic shares outstanding | 21,758 | 21,704 | 21,637 | ||||||||
Dilutive effect of stock-based awards (in shares) | 144 | 85 | 96 | ||||||||
Weighted average diluted shares outstanding | 21,927 | 21,931 | 21,890 | 21,845 | 21,814 | 21,804 | 21,790 | 21,745 | 21,902 | 21,789 | 21,733 |
Earnings per share (in dollars per share) | $ 1.40 | $ 0.38 | $ 0.23 | $ 0.24 | $ 0.35 | $ 0.46 | $ 0.41 | $ 0.35 | $ 2.25 | $ 1.57 | $ 1.18 |
Anti-dilutive shares excluded from calculation | 103 | 249 | 192 |
SEGMENT REPORTING - Summarized
SEGMENT REPORTING - Summarized Financial Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
OPERATING SEGMENTS | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Total revenue | $ 133,697 | $ 134,054 | $ 126,057 | $ 110,234 | $ 117,172 | $ 124,824 | $ 122,351 | $ 113,318 | $ 504,042 | $ 477,665 | $ 563,070 |
Depreciation, amortization and accretion | 41,216 | 39,832 | 44,822 | ||||||||
Capital expenditures | 36,240 | 35,696 | 39,370 | ||||||||
Total assets | 802,076 | 776,400 | 802,076 | 776,400 | 771,987 | ||||||
Treatment and disposal | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 309,319 | 287,818 | 303,973 | ||||||||
Transportation and Logistics | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 89,952 | 80,374 | 97,038 | ||||||||
Industrial Cleaning | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 17,760 | 21,021 | 85,783 | ||||||||
Technical Services | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 74,876 | 74,191 | 67,479 | ||||||||
Remediation | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 8,012 | 11,600 | 6,734 | ||||||||
Other | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 4,123 | 2,661 | 2,063 | ||||||||
Corporate | |||||||||||
OPERATING SEGMENTS | |||||||||||
Depreciation, amortization and accretion | 501 | 512 | 527 | ||||||||
Capital expenditures | 3,251 | 3,026 | 2,034 | ||||||||
Total assets | 67,792 | 57,902 | 67,792 | 57,902 | 61,299 | ||||||
Environmental Services | Operating Segment | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 366,308 | 337,771 | 359,040 | ||||||||
Depreciation, amortization and accretion | 35,137 | 33,839 | 34,870 | ||||||||
Capital expenditures | 28,783 | 30,098 | 29,823 | ||||||||
Total assets | 609,174 | 599,300 | 609,174 | 599,300 | 586,561 | ||||||
Environmental Services | Operating Segment | Treatment and disposal | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 298,320 | 275,236 | 291,062 | ||||||||
Environmental Services | Operating Segment | Transportation and Logistics | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 67,988 | 62,535 | 67,978 | ||||||||
Field and Industrial Services | Operating Segment | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 137,734 | 139,894 | 204,030 | ||||||||
Depreciation, amortization and accretion | 5,578 | 5,481 | 9,425 | ||||||||
Capital expenditures | 4,206 | 2,572 | 7,513 | ||||||||
Total assets | $ 125,110 | $ 119,198 | 125,110 | 119,198 | 124,127 | ||||||
Field and Industrial Services | Operating Segment | Treatment and disposal | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 10,999 | 12,582 | 12,911 | ||||||||
Field and Industrial Services | Operating Segment | Transportation and Logistics | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 21,964 | 17,839 | 29,060 | ||||||||
Field and Industrial Services | Operating Segment | Industrial Cleaning | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 17,760 | 21,021 | 85,783 | ||||||||
Field and Industrial Services | Operating Segment | Technical Services | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 74,876 | 74,191 | 67,479 | ||||||||
Field and Industrial Services | Operating Segment | Remediation | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | 8,012 | 11,600 | 6,734 | ||||||||
Field and Industrial Services | Operating Segment | Other | |||||||||||
OPERATING SEGMENTS | |||||||||||
Total revenue | $ 4,123 | $ 2,661 | $ 2,063 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
Net income | $ 30,766 | $ 8,365 | $ 5,049 | $ 5,185 | $ 7,683 | $ 10,114 | $ 8,938 | $ 7,517 | $ 49,365 | $ 34,252 | $ 25,611 |
Income tax (benefit) expense | (6,395) | 21,049 | 21,244 | ||||||||
Interest expense | 18,157 | 17,317 | 23,370 | ||||||||
Interest income | (62) | (96) | (65) | ||||||||
Foreign currency (gain) loss | (516) | 138 | 2,196 | ||||||||
Loss (gain) on divestiture | (2,034) | 542 | |||||||||
Other income | (791) | (597) | (1,267) | ||||||||
Impairment charges | 8,903 | 6,700 | |||||||||
Depreciation and amortization of plant and equipment | 28,302 | 25,304 | 27,931 | ||||||||
Amortization of intangibles | 9,888 | 10,575 | 12,307 | ||||||||
Stock-based compensation | 3,933 | 2,925 | 2,297 | ||||||||
Accretion and non-cash adjustment of closure & post-closure liabilities | 3,026 | 3,953 | 4,584 | ||||||||
Adjusted EBITDA | 113,810 | 112,786 | 125,450 | ||||||||
Operating Segment | Environmental Services | |||||||||||
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
Adjusted EBITDA | 146,371 | 139,698 | 150,067 | ||||||||
Operating Segment | Field and Industrial Services | |||||||||||
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
Adjusted EBITDA | 14,709 | 16,342 | 21,388 | ||||||||
Corporate | |||||||||||
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
Adjusted EBITDA | $ (47,270) | $ (43,254) | $ (46,005) |
SEGMENT REPORTING - Revenue and
SEGMENT REPORTING - Revenue and Long-lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue and Long-Lived Assets Outside of the United States | |||||||||||
Total revenue | $ 133,697 | $ 134,054 | $ 126,057 | $ 110,234 | $ 117,172 | $ 124,824 | $ 122,351 | $ 113,318 | $ 504,042 | $ 477,665 | $ 563,070 |
Total long- lived assets | 457,244 | 460,593 | 457,244 | 460,593 | |||||||
United States | |||||||||||
Revenue and Long-Lived Assets Outside of the United States | |||||||||||
Total revenue | 434,511 | 428,778 | 521,092 | ||||||||
Total long- lived assets | 396,066 | 405,767 | 396,066 | 405,767 | |||||||
Canada | |||||||||||
Revenue and Long-Lived Assets Outside of the United States | |||||||||||
Total revenue | 69,531 | 48,887 | $ 41,978 | ||||||||
Total long- lived assets | $ 61,178 | $ 54,826 | $ 61,178 | $ 54,826 |
QUARTERLY FINANCIAL DATA (una87
QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
QUARTERLY FINANCIAL DATA (unaudited) | |||||||||||
Revenue | $ 133,697 | $ 134,054 | $ 126,057 | $ 110,234 | $ 117,172 | $ 124,824 | $ 122,351 | $ 113,318 | $ 504,042 | $ 477,665 | $ 563,070 |
Gross profit | 47,625 | 37,733 | 35,896 | 31,873 | 36,127 | 39,354 | 36,906 | 35,208 | 153,127 | 147,595 | 171,410 |
Operating income | 16,414 | 15,289 | 15,896 | 12,159 | 16,244 | 20,915 | 17,087 | 15,783 | 59,758 | 70,029 | 71,631 |
Net income | $ 30,766 | $ 8,365 | $ 5,049 | $ 5,185 | $ 7,683 | $ 10,114 | $ 8,938 | $ 7,517 | $ 49,365 | $ 34,252 | $ 25,611 |
Diluted (in dollars per share) | $ 1.40 | $ 0.38 | $ 0.23 | $ 0.24 | $ 0.35 | $ 0.46 | $ 0.41 | $ 0.35 | $ 2.25 | $ 1.57 | $ 1.18 |
Weighted average common shares outstanding used in the diluted earnings per share calculation | 21,927 | 21,931 | 21,890 | 21,845 | 21,814 | 21,804 | 21,790 | 21,745 | 21,902 | 21,789 | 21,733 |
Dividends paid per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.72 | $ 0.72 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 26, 2018 | Jan. 02, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
SUBSEQUENT EVENTS | |||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.72 | $ 0.72 | |||
Dividend paid in cash | $ 15,711 | $ 15,673 | $ 15,612 | ||||||||||
Subsequent event | |||||||||||||
SUBSEQUENT EVENTS | |||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.18 | ||||||||||||
Dividend paid in cash | $ 3,900 |