Jeremy L. Dillon
RW Monitor
10/30/2015
US Ecology tempered expectations this week for its full-year earnings results after announcing a slower-than-expected third quarter that is expected to continue in the fourth quarter. The environmental services provider is lowering expected adjusted EBITDA for its core business to between $122 million and $125 million for full-year 2015, compared to the previous guidance of $128 million to $132 million. CEO Jeff Feeler attributed the decrease to slower business activity and deferment of a remedial project.
“Third-quarter operating results did not materialize as we had expected,” Feeler said in the company’s earnings press release. “Many factors contributed to these lower than anticipated results but slower business activity and deferment of remedial project based Event Business were the primary contributors. Adjusted EBITDA from our Environmental Services segment was approximately 10% below our expectations for the quarter. With the expected reduction in volume from an east coast clean up project and unanticipated lower replacement work as a result of project deferrals and shipment schedules, we experienced a 22% decline in project-driven Event Business.”
Operating income for the third quarter of 2015 was $22.4 million, compared to $26.8 million in the third quarter of 2014. Total revenue for the third quarter of 2015 was $148.4 million, down from $170.9 million in the same quarter last year. For the third quarter of 2015, gross profit was $45.9 million, a drop from $52.3 million in the third quarter of 2014.
Feeler also said the company expects the slow third quarter to carry into the fourth quarter. “We currently expect the headwinds we encountered during the third quarter to continue in the fourth quarter,” Feeler said. “Industry verticals such as chemical and metal manufacturing are likely to see lower business activity throughout the balance of the year, creating a difficult comparison. On the Event Business side, despite seeing emerging opportunities in the market place that will benefit the fourth quarter and beyond, we continue to see other projects being delayed or deferred and certain shipping schedules slipping. Given this trend in both our Base and Event business, we expect that our final quarter of 2015 will look very similar to the just completed third quarter.”
