US Ecology, Inc.
(
ECOL
) reported earnings per share (EPS) of 39 cents (excluding special
items) in its fiscal first quarter, up 56% year over year and way
ahead of the Zacks Consensus Estimate of 20 cents.
Including non-cash loss on foreign currency translation and
business development costs, EPS in the reported quarter came in at
35 cents. Including non-cash foreign currency translation gain and
business development costs, EPS in the prior-year quarter stood at
26 cents.
Quarter in Detail
Revenues inched up 1% to $40 million in the quarter and outpaced
outpacing the Zacks Consensus Estimate of $36 million.
Treatment and disposal revenue posted a growth of 13%, on the back
of a 16% increase in Base Business (recurring waste streams).
Transportation revenue declined 48% as lesser number of
customers utilized the company's transportation and logistics
services for clean-up projects. Event business (discrete projects)
revenue remained flat on a year-over-year basis.
Total volume disposed or processed during the quarter at US
Ecology's Idaho, Michigan, Nevada, Texas and Quebec waste
facilities was 261,000 tons, up 21% from the year-ago quarter. A
relatively higher volume of direct disposal material and other
changes in service mix led to a 6% decline in average selling price
for the reported quarter.
Direct operating costs increased 2% to $18.6 million while
transportation costs decreased 51% to $4 million in the quarter.
Gross profit improved 32% to $17.3 million with gross margin at 43%
compared with 33% in the prior-year quarter. Treatment and
disposal gross margin improved to 48% from 43% a year ago due to
higher volumes, favorable service mix and flat direct costs.
Selling, general and administrative expenses increased 20% year
over over to $6.4 million. The company's operating profit improved
41% to a record $11 million from the year-ago quarter.
Operating margin expanded 780 basis points to 27.4% from 19.6%
in the year-ago quarter. Adjusted EBITDA (earnings before Interest,
tax, depreciation and amortization) was another record at $15.4
million, up 30% from the prior-year quarter.
Financials
Cash and cash equivalents were $5.9 million as of June 30, 2012,
down from $6.4 million as of March 31, 2012. During the first half
of fiscal 2012, cash flow from operations increased to $15.6
million from $15.2 million in the comparable year-ago period.
Total borrowings on line of credit were $50 million as of June
30, 2012 compared with $35 million as of March 31, 2012, reflecting
the purchase of Dynecol on May 31, 2012. As of June 30, 2012, $27.1
million remains available for future borrowings.
In May, US Ecology completed the acquisition of Dynecol, Inc for
$11.3 million. Dynecol is a permitted treatment, storage and
disposal facility located in Detroit, Michigan that provides
hazardous and non-hazardous waste treatment, transportation and
waste brokering services to the regional U.S. and Canadian
industrial markets.
During June, the one month of US Ecology's ownership of the
facility, it has processed more than 12,000 tons of waste,
contributing more than $1 million in revenue and also contributed
to operating profit.
Outlook
US Ecology expects 2012 EPS between $1.05 and $1.15, up from the
previous expectation of 92 cents to $1.02, reflecting upbeat second
quarter results and expectations of a stronger second half.
Adjusted EBITDA is now expected to lie between $48 and $52 million,
up from $46 and $49 million.
Boise, Idaho-based US Ecology through its subsidiaries, provides
radioactive, hazardous, and non-hazardous industrial waste
management and recycling services to commercial and government
entities, which include refineries and chemical production
facilities, manufacturers, electric utilities, steel mills, medical
and academic institutions and waste brokers.
It competes with
Clean Harbors, Inc.
(
CLH
),
Valhi, Inc.
(
VHI
) and
Waste Management Inc
(
WM
). US Ecology currently maintains a Zacks #3 Rank (Hold) on its
stock for the short term.
CLEAN HARBORS (CLH): Free Stock Analysis Report
US ECOLOGY INC (ECOL): Free Stock Analysis
Report
(VHI): ETF Research Reports
WASTE MGMT-NEW (WM): Free Stock Analysis Report
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