Jeremy L. Dillon
RW Monitor
2/14/2014
U.S. Ecology experienced its best year ever in 2013 with record revenue and gross profits, according to U.S. Ecology President and CEO Jeff Feeler in an investor’s call held this week. In previous investor’s calls, the company had warned that record revenues may not hold up through the fourth quarter of 2013 and onward through 2014, but it appears those warnings were conservative. “The momentum experienced in the first nine months carried through the fourth quarter allowing us to close out what has been the best year in the company’s 52 year history,” Feeler said. “Needless to say, we are very proud of the results released yesterday.”
U.S. Ecology reported a gross profit for 2013 of $79 million, up 19 percent from $66.3 million in 2012. Revenue for 2013 was $201.1 million, up 19 percent from $169.1 million in 2012 while T&D revenue increased 13 percent in 2013 compared to 2012 and transportation revenue increased 54 percent in 2013 compared to 2012, according to the company. “Double digit organic growth in our treatment and disposal revenue, related margin expansion by more than two full percentage points and continued SG&A expense control drove operating income, earnings and Adjusted EBITDA to new record levels," Feeler said. “Delivering these record results on the heels of what had been the Company’s strongest year in 2012 is a testament to the value of US Ecology’s fixed facility assets, broad permits and operational expertise.”
Much of the positive fourth quarter came from private disposal, making up for a slowed government market, Vice President and Chief Financial Officer Eric Gerratt said. “We are very pleased with our strong fourth quarter operating performance,” Gerratt said. “Continued treatment and disposal revenue growth reflected another quarter of strong private event business, which more than offset expected softness in our government business. Treatment and disposal margins increased on a more favorable service mix and continued operational efficiencies across our facilities,” he said. Much of the private waste stemmed from a nuclear reactor decommissioning project as well as from East coast cleanup work.
2014 Outlook
U.S. Ecology also went on to highlight its “strong” expectations for 2014. “Moving into 2014, market conditions and demand for our services continues to be strong,” Feeler said. “Our Event Business pipeline has strengthened over the last two months as we gain visibility into the summer clean-up season. While it will be a challenge to fully replace our 2013 Event Business results, our pipeline is filling out nicely with new opportunities.” With contracts established for the first half of 2014, the company expects positive results for that time period that it hopes will carry-over momentum to the second half of the year, Garret said. Included in these expectations is bounce back revenue from the Army Corp’s of Engineers’ Formerly Utilized Sites Remedial Action Program (FUSRAP), which is expected to expand its disposal work in the coming year, according to Garrett.
Feller also hinted at growth within the company in the coming year stemming from the stock dividend conducted in December that gave the company $79 million in available cash for acquisitions. "We look forward to executing our long-term growth strategy with what we believe are best-in-class assets and permits," Feeler said. "With our successful equity raise in December 2013, we are focused on executing on our organic growth plan while actively seeking high quality assets and service platforms to extend our geographic reach and enhance our competitive position."
