February 22, 2016
Boise, Idaho-based environmental services firm US Ecology Inc. posted slightly better than expected operating results in the fourth quarter and posted higher full-year revenues and profits than in 2014.
“Overall, I am pleased with the team's focus and execution, and our ability to deliver these strong results in the current economic environment,” Chairman and CEO Jeff Feeler said in a conference call with investors.
Here are some highlights from the company’s quarterly results.
Total revenue for the fourth quarter of 2015 was $138.3 million. This was down from $157.2 million in the same quarter last year.
Revenue for the firm’s environmental services segment was $97.0 million for the fourth quarter of 2015, down from $100.6 million in the fourth quarter of 2014. The company attributed the decline to a 3 percent drop in treatment and disposal revenue and a 5 percent decrease in transportation revenue.
Revenue for its field and industrial services segment was $41.3 million for the fourth quarter of 2015 compared to $56.6 million in the same period of 2014.
For the fourth quarter of 2015, gross profit was $44.2 million, down from $46.2 million in the same quarter last year.
Operating income for the fourth quarter of 2015 was $22.2 million, up 16 percent from $19.1 million in the fourth quarter of 2014.
Adjusted EBITDA for the fourth quarter of 2015 was $33.0 million, up 6 percent from $31.2 million in the same period last year. Pro forma adjusted EBITDA, which excludes the divested Allstate business and business development expenses, was $32.6 million in the fourth quarter of 2015 compared to $29.5 million in the fourth quarter of 2014.
Net income for the fourth quarter of 2015 was $7.7 million, or $0.35 per diluted share, compared to $8.7 million, or $0.40 per diluted share in the fourth quarter of 2014.
And some highlights from the company’s full-year numbers:
Gross profit was $171.4 million, up from $145.8 million for the year ended December 31, 2014.
Adjusted EBITDA for 2015 was $125.5 million compared to $109.0 million in 2014. Pro Forma adjusted EBITDA, which excludes the divested Allstate business and business development expenses, increased 11 percent to $122.6 million in 2015 compared to $110.4 million in 2014.
Net income for 2015 was $25.6 million, or $1.18 per diluted share, compared to $38.2 million, or $1.77 per diluted share in 2014.
Based on current estimates, management is projecting 2016 revenue of $502 to $528 million, adjusted EBITDA of $126 to $132 million and earnings per diluted share between $1.80 and $1.95. This guidance reflects adjusted EBITDA growth up to 8 percent, compared to 2015 Pro Forma adjusted EBITDA.
“As we enter in 2016, demand for services remained healthy and we're seeing many opportunities on both sides of our business to grow the company,” Feeler said during the call, “However, despite being optimistic, we are mindful that these are uncertain times and the current macroeconomic conditions facing many of our customers, will likely remain a challenge again this year in 2016.”
Coming out of the conference call, Stifel’s Michael E. Hoffman wrote in a research note, “We reiterate our BUY rating and $45 target price on US Ecology (ECOL, BUY, $35.23). From the ECOL conference call we picked up incremental clarity on the outlook for the industrial economy, which is transitioning to a lower long-term rate of growth and that transition is nearly complete. Underpinning the ECOL outlook is mid-single digit growth in the Base business of Environmental Services and healthy recovery of project work going into the 2H16. The major risk is project delays from some of the large multi-year projects ECOL has picked up to replace PPG and Westinghouse. The delays are not about the economy but more about the ever changing scope of work as the site clean-up begins to gain momentum.”