Jeremy L. Dillon
RW Monitor
5/9/2014
After experiencing a better than expected first quarter in 2014, U.S. Ecology has upped its expected EBITA for the year by $4-8 million to an estimated $74-78 million, the company said in its first quarter results released this week. According to U.S. Ecology, net income for the first quarter of 2014 was $9.4 million, up from $5.4 million in the first quarter of 2013, while operating income for the first quarter of 2014 was $15.5 million, up from $9.7 million in the first quarter last year. Adjusted EBITDA for the first quarter of 2014 was a record $20.3 million, up from $13.9 million in the same period last year. “First quarter results continued the positive momentum seen in 2013 and puts us on track for another strong year in 2014,” U.S. Ecology President and CEO Jeff Feeler said in a statement.
Much of the success U.S. Ecology enjoyed this quarter came from the commercial side of the business, making up for softer government spending. “The strength in the event business was driven by the commercial sector more than offsetting the continuing softness in our government services business,” Feeler said during a call with investors held this week. Eric Gerratt, the company’s Chief Financial Officer, said the government cleanup business decreased 41 percent during the first quarter, mainly due to lower volumes from the U.S. Army Corps Engineers and a now-completed military base cleanup project. Treatment and disposal revenue from the Corps was down 71 percent in the first quarter compared to the same period in 2013, Gerratt said, but the company expects that segment to bounce back in the rest of 2014. “Despite the lower first quarter volumes from the U.S. Army Corps outlook for the balance of the year looks strong as shipments are expected to increase based on project specific disposable schedules,” Gerratt said.
The project pipeline for the rest of the year has given the company confidence that it will continue its success, Feeler said. “Our project pipeline has been filling out nicely as we gained visibility in to the summer time clean up season,” Feeler said. “Several of our ongoing projects grew in size and duration while new opportunities are emerging for the back half of the year.” He added, “As we look at the pipeline moving out we are continuing to see emerging opportunities that we’re going to be able to compete for, some under contract, some that we’re just going through the bidding process. And so that’s what gives us the confidence which is atypical at this time of the year to really raise guidance and so that really demonstrates the balance of the year and how we are seeing things play out.”