Clean Harbors, Inc.

Good day, ladies and gentlemen, and welcome to the Clean Harbors second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the form of presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the floor over to your host, Michael McDonnell, General Counsel for Clean Harbors. Sir, the floor is yours.

Thank you, LaTanya, and good morning, everyone. With me on today's call are our co-chief executive officers, Eric Gerstenberg and Mike Battles, and our EVP and chief financial officer, Eric Dugas, and SVP of Investor Relations, Jim Buckman. Slides for today's call are posted on our Investor Relations website, and we invite you to follow along. Matters we are discussing today that are not historical facts are considered forward-looking statements within the Private Securities Litigation Reform Act of 1995. Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, July 31st, 2024. Information on potential factors or risks that could affect our results is included in RCC files. The company undertakes no obligation to revise or publicly release the results of any revision to the statements made today, other than through filings made concerning this reporting period. Today's discussion includes references to non-GAAP measures. Clean Harvest believes that such information provides an additional measurement In consistent historical comparison of its performance, reconciliations of these measures to the most directly comparable gap measures are available in today's news release, on our website, and in the appendix of today's presentation. Let me turn the call over to Eric Gerstberg to start. Eric.

Thanks, Michael. Good morning, everyone, and thank you for joining us. Because safety is the foundation of our core values at Clean Harvest, I will start by highlighting our total recordable incident rating. which on a year-to-date basis is 0.70, which is consistent with where we were a year ago at this time. The recent impact on some of our employees by Hurricane Beryl in the Gulf, as well as both the Alberta and California wildfires, is a reminder of how critical it is to be prepared for any kind of crisis situation. Thankfully, all of our employees in these regions are safe. Turning to our pricing momentum. Revenue and adjusted EBITDA were the highest in our history, with adjusted EBITDA margin improving 50 basis points year over year. Environmental services continues to outperform. ES results are attributable in part to a robust demand for our facilities network and several service businesses, especially field services. This business benefited from its first full quarter of HEPCO, which we acquired in March. our SKSF segment posted a substantial sequential increase from Q1, fueled by the start of the summer driving season and improved lubricant pricing. Corporate costs were higher in the quarter due to incremental headcount from acquisitions, greater incentive compensation, and a handful of discreet expenses related to legal and environmental liability matters. Turning to slide four, into even larger profit growth. HEPCO accounted for more than half of the segment's 12% revenue increase, with a remainder coming from organic gains attributed to volume and pricing. This top-line growth drove an 18% increase in segment adjusted EBITDA, translating to 140 basis points of margin expansion. Adjusted EBITDA in environmental services has now increased year-over-year for 11 consecutive quarters. revenue increase of 14%. We again collected record levels of drum volumes through the network, which is reflected in continued increase in deferred revenue on our balance sheet. Even with completing a major turnaround at our Deer Park facility early in the quarter, our incinerators achieved utilization of 88%. Average incineration pricing rose 3% in the quarter, and we continue to expect our incinerators would deliver utilization in the mid to high 80% range for the full year. We also remain on track to open our new state-of-the-art incinerator in Kimball, Nebraska in Q4. The team has done an outstanding job keeping that construction on schedule and the plant is coming together nicely. Landfills also had a strong performance in Q2 with both volume and average price up as we saw healthy drum volumes and base business supported by project work. We continue to expect landfills to deliver a very good 2024 with a broad mix of waste streams and project opportunities. Field services generated the largest increase in the quarter, up 64%. While this was primarily driven by HEPCO, our legacy business posted low teens percentage growth. The acquisition has been a great fit with our existing field service operations. During the quarter, we responded to several larger emergency response events where both teams worked side by side. These large events in total accounted for roughly $24 million. as we fully integrate and internalize HEPCO's National Health Center operations and collaborate on future emergency response events. In Q2, Safety Clean Environmental Services extended its multi-year momentum with revenue growth of 11% as its core offerings, particularly containerized waste, remain in high demand. Industrial services revenue declined 10% due to reduced turnaround activity compared to last year. We anticipate a strong turnaround schedule this fall, and we expect to see a return to IES revenue growth in Q3. Overall, just another great quarter for our REES segment. With that, let me turn things over to Mike. Mike?