<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1996
-----------------------
Commission File Number 0-16379
CLEAN HARBORS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2997780
(State of Incorporation) (IRS Employer Identification No.)
1501 Washington Street, Braintree, MA 02184
(Address of Principal Executive Offices) (Zip Code)
(617) 849-1800 ext. 4454
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value 9,690,612
---------------------------- -------------------------------
(Class) (Outstanding at August 7, 1996)
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<PAGE> 2
CLEAN HARBORS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS Pages
-----
Consolidated Statements of Income 1
Consolidated Balance Sheets 2-3
Consolidated Statements of Cash Flows 4-5
Consolidated Statement of Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8-12
PART II: OTHER INFORMATION
Items No. 1 through 6 13
Signatures 14
<PAGE> 3
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(in thousands except for earnings per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1996 1995 1996 1995
------------------ -------------------
<S> <C> <C> <C> <C>
Revenues ......................... $49,638 $54,899 $95,374 $102,049
Cost of revenues ................. 38,936 39,367 73,818 74,219
Selling, general and
administrative expenses ........ 9,306 10,471 18,480 19,481
Depreciation and amortization .... 2,489 2,512 5,016 4,985
------- ------- ------- --------
Income (loss) from operations .... (1,093) 2,549 (1,940) 3,364
Interest expense, net ............ 2,369 2,162 4,508 4,134
------- ------- ------- --------
Income (loss) before provision for
(benefit from) income taxes .... (3,462) 387 (6,448) (770)
Provision for (benefit from)
income taxes ................... (857) 184 (2,201) (383)
------- ------- ------- --------
Net income (loss) ................ $(2,605) $ 203 $(4,247) $ (387)
======= ======= ======= ========
Net income (loss) per common and
common equivalent share ........ $ (.28) $ .01 $ (.47) $ (.06)
======= ======= ======= ========
Weighted average common and
common equivalent shares
outstanding .................... 9,624 9,448 9,592 9,447
======= ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
(1)
<PAGE> 4
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 524 $ 225
Restricted investments 1,694 2,460
Accounts receivable, net of
allowance for doubtful accounts 45,782 48,417
Prepaid expenses 2,162 2,039
Supplies inventories 3,073 2,970
Income tax receivable 722 722
Deferred tax asset 4,819 2,415
-------- --------
Total current assets 58,776 59,248
Property, plant and equipment:
Land 8,380 8,364
Buildings and improvements 39,902 39,770
Vehicles and equipment 77,740 77,384
Furniture and fixtures 2,186 2,155
Construction in progress 1,829 1,317
-------- --------
130,037 128,990
Less - Accumulated depreciation
and amortization 58,047 54,256
-------- --------
Net property, plant and equipment 71,990 74,734
-------- --------
Other assets:
Restricted investments 6,043 5,207
Goodwill, net 21,839 22,202
Permits, net 13,054 13,489
Other 3,527 3,436
-------- --------
Total other assets 44,463 44,334
-------- --------
Total assets $175,229 $178,316
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
(2)
<PAGE> 5
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
----------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
obligations $ 4,594 $ 3,605
Accounts payable 19,291 18,614
Accrued disposal costs 7,004 7,446
Other accrued expenses 12,586 17,886
Income tax payable 2 --
-------- --------
Total current liabilities 43,477 47,551
-------- --------
Long-term obligations, less
current maturities 75,605 70,391
Stockholders' equity:
Preferred Stock, $.01 par value:
Series A Convertible;
Authorized-2,000,000 shares; Issued and
outstanding - none -- --
Series B Convertible;
Authorized-156,416 shares; Issued and
outstanding 112,000 shares at June 30,
1996 and December 31, 1995 (liquidation
preference of $5.6 million) 1 1
Common Stock, $.01 par value
Authorized - 20,000,000 shares;
Issued and outstanding - 9,630,370 shares
at June 30, 1996 and 9,524,676 shares
at December 31, 1995 97 96
Additional paid-in capital 59,151 58,871
Unrealized loss on restricted investments,
net of tax (45) (7)
Retained earnings (accumulated deficit) (3,057) 1,413
-------- --------
Total stockholders' equity 56,147 60,374
-------- --------
Total liabilities and stockholders' equity $175,229 $178,316
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
(3)
<PAGE> 6
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(in thousands)
<CAPTION>
SIX MONTHS ENDING
JUNE 30,
--------------------
1996 1995
-------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,247) $ (387)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 5,016 4,985
Deferred taxes (2,379) 209
Allowance for doubtful accounts 296 118
Amortization of deferred financing costs 312 205
Gain on sale of fixed assets (49) (6)
Changes in assets and liabilities:
Accounts receivable 2,339 (2,507)
Refundable income taxes -- (1,033)
Prepaid expenses (123) (749)
Supplies inventories (103) (254)
Accounts payable 677 1,300
Accrued disposal costs (442) 1,626
Other accrued expenses (5,300) 2,253
Taxes payable 2 --
------- --------
Net cash (used in) provided
by operating activities (4,001) 5,760
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (1,469) (8,208)
Additions to permits (13) (38)
Proceeds from sale and maturities of restricted
investments 703 22
Cost of restricted investments acquired (836) (5,656)
Increase in other assets (108) (1,764)
Proceeds from sale of fixed assets 74 15
------- --------
Net cash used in investing activities (1,649) (15,629)
------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
(4)
<PAGE> 7
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Unaudited
(in thousands)
<CAPTION>
SIX MONTHS ENDING
JUNE 30,
-------------------
1996 1995
------- -------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividend distribution -- (223)
Issuance of long-term debt 6,667 10,000
Net borrowings under long-term revolver 837 789
Payments on long-term obligations (1,555) (562)
Additions to deferred financing costs (58) (770)
Proceeds from stock issuance 58 --
------- -------
Net cash provided by financing activities 5,949 9,234
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 299 (635)
Cash and equivalents, beginning of year 225 1,000
------- -------
Cash and equivalents, end of period $ 524 $ 365
======= =======
Supplemental Information:
Non cash investing and financing activities:
Stock dividend on preferred stock $ 223 --
</TABLE>
For the six months ended June 30, 1995 there were $1,799,000 of accrued
liabilities assumed as a result of the acquisition of the incinerator in
Kimball, Nebraska on May 12, 1995.
The accompanying notes are an integral part of these consolidated financial
statements.
(5)
<PAGE> 8
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Unaudited
(in thousands)
Series B
Preferred Stock Common Stock
--------------- ------------
Retained
Number $0.01 Number $0.01 Additional Unrealized Loss Earnings Total
of Par of Par Paid-In on Restricted (accumulated Stockholders'
Shares Value Shares Value Capital Investments deficit) Equity
------ ----- ------ ----- ---------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1995 112 $ 1 9,525 $96 $58,871 $ (7) $ 1,413 $60,374
Preferred stock dividends:
Series B -- -- 81 1 222 -- (223) --
Employee stock purchase
plan -- -- 24 -- 58 -- -- 58
Change in unrealized loss on
restricted investments,
net of tax -- -- -- -- -- (38) -- (38)
Net Loss -- -- -- -- -- -- (4,247) (4,247)
Balance at
June 30, 1996 112 $ 1 9,630 $97 $59,151 $(45) $(3,057) $56,147
=== === ===== === ======= ==== ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
(6)
<PAGE> 9
CLEAN HARBORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The consolidated interim financial statements included herein have been
prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange Commission, and include, in the opinion of management, all
adjustments (consisting of only normal recurring accruals) necessary for the
fair presentation of interim period results. The operating results for the six
months ended June 30, 1996 are not necessarily indicative of those to be
expected for the full fiscal year. Reference is made to the audited consolidated
financial statements and notes thereto included in Clean Harbors' Report on Form
10-K for the year ended December 31, 1995 as filed with the Securities and
Exchange Commission. The year end condensed balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
Net income (loss) per common and common equivalent share is based on net
income less preferred stock dividend requirements divided by the weighted
average number of common and common equivalent shares outstanding during each of
the respective periods. Fully diluted net income (loss) per common share has not
been presented as the amount would not differ significantly from that presented.
Common share equivalents included in the computation represent shares issuable
upon assumed exercise of stock options which would have a dilutive effect in
periods where there are earnings.
NOTE 3 KIMBALL INCINERATOR
On May 12, 1995, the Company acquired a newly constructed hazardous waste
incinerator in Kimball, Nebraska from Ecova Corporation, a wholly owned
affiliate of Amoco Oil Company. The incinerator is subject to the final permit
requirements under the federal Resource Conservation and Recovery Act of 1976,
as amended ("RCRA"), and has a RCRA "Part B" license issued by the Nebraska
Department of Environmental Quality ("NDEQ"). The incinerator is located on a
600 acre site, which includes a landfill for disposal of the ash from the
incinerator. The Company acquired the Kimball facility for $5,160,000.
(7)
<PAGE> 10
CLEAN HARBORS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REVENUES
Revenues for the second quarter of 1996 were $49,638,000, down 10% as
compared to revenues of $54,899,000 for the second quarter of the prior year.
Revenues for the first half of 1996 were $95,374,000, which was a 7% decline
from the revenues for the first half of 1995 of $102,049,000. The revenue
decline, for the comparative six months, was the result of industry-wide pricing
pressures and a decrease in the volumes of wastes which were processed through
the Company's facilities. In addition, the field service product line
experienced a 14% decline in emergency response business during the first six
months of 1996 as compared to the same period of 1995.
There are many factors which have impacted, and will continue to impact,
the Company's revenues. These factors include: competitive industry pricing;
continued efforts by generators of hazardous waste to reduce the amount of
hazardous waste they produce; industry-wide over capacity; and direct shipment
by generators of waste to the ultimate treatment or disposal location. The
Company has responded to these industry changes by enhancing its waste treatment
capabilities and improving operating efficiencies at its facilities. In the
second quarter of 1995 the Company acquired an incinerator which will allow the
Company to dispose of waste without reliance on third parties. In addition,
during 1995 the Company expanded the Chicago waste treatment facility to improve
the treatment and waste handling capabilities at this location.
<TABLE>
On June 30, 1996, the Company had service centers and sales offices located
in 24 states and Puerto Rico, and operated 12 waste management facilities.
During the second quarter of 1996, the Company continued its focus in the
Southern and Gulf Coast states. The following table sets forth, for the periods
indicated, the Company's revenues by region, based upon the locations of its
service centers as of June 30, 1996.
Service Center Revenues By Region
For The Six Quarters Ended June 30, 1996
(in thousands; unaudited)
<CAPTION>
3/31/95 6/30/95 9/30/95 12/31/95 3/31/96 6/30/96
------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Northeast $19,693 $21,449 $20,275 $21,362 $17,617 $21,159
Mid-Atlantic 15,367 16,817 17,317 16,817 13,052 15,720
Central 7,138 9,450 9,388 8,936 8,920 7,648
Midwest 4,952 7,183 7,418 5,688 6,147 5,111
------- ------- ------- ------- ------- -------
Total $47,150 $54,899 $54,398 $52,803 $45,736 $49,638
</TABLE>
(8)
<PAGE> 11
CLEAN HARBORS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
The following table sets forth for the periods indicated certain operating
data associated with the Company's results of operations.
Percentage Of Total Revenues
----------------------------
Three months ended Six months ended
June 30, June 30,
------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0
Cost of revenues:
Disposal costs paid to third parties 15.1 15.4 14.2 15.9
Other costs 63.3 56.3 63.2 56.8
------ ------ ------ ------
Total cost of revenues 78.4 71.7 77.4 72.7
Selling, general and administrative
expenses 18.8 19.1 19.3 19.1
Depreciation and amortization
of intangible assets 5.0 4.6 5.3 4.9
Income from operations (2.2) 4.6 (2.0) 3.3
Other Data:
Earnings Before Interest, Taxes,
Depreciation and Amortization
(EBITDA) (in thousands) $1,396 $5,061 $3,076 $8,349
</TABLE>
COST OF REVENUES
One of the largest components of cost of revenues is the cost of sending
waste to other companies for disposal. The Company's outside disposal costs
decreased to 14.2% of revenue in the first six months of 1996 from 15.9% of
revenue in the first six months of 1995. The reduction in outside disposal cost
is a result of the acquisition of the Kimball incinerator, which reduced the
Company's reliance on third-party disposal outlets. The remaining costs
increased to 63.3% and 63.2% of revenue for the three and six months ended June
30, 1996, respectively as compared to 56.3% and 56.8% for the same periods of
the prior year. This increase is primarily due to the fact that a large portion
of these costs are fixed in nature.
(9)
<PAGE> 12
CLEAN HARBORS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is continuing to implement cost savings plans to reduce
operating costs as a percentage of revenue during 1996. This implementation
included a reduction in workforce of approximately 4% in July 1996. This
reduction also includes administrative staff. The Company has identified
additional efficiencies and cost reductions which would allow the Company to
more fully leverage its significant assets, especially the Chicago and Kimball,
Nebraska facilities. The cost savings plans will reduce the Company's cost
structure while improving service quality and competitiveness in the
marketplace.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased 11% to $9,306,000
for the the three months ended June 30, 1996 as compared to $10,471,000 for the
same period of 1995. Selling, general and administrative expenses decreased 5%
to $18,480,000 for the six months ended June 30, 1996 as compared to $19,481,000
for the same period of 1995. The decline in expenses represents the Company's
continued efforts to control costs in areas such as rental of office space and a
reduction of administrative staff. There continues to be an effort to expand the
Company's sales and marketing capabilities, these costs have been more than
offset by cost savings programs. The Company does not anticipate any significant
increases for the remainder of 1996 in selling, general and administrative
expenses.
INTEREST EXPENSE
Interest expense increased to $2,369,000 during the second quarter of 1996
from the previous years' interest expense of $2,162,000 for the same period.
Interest expense increased to $5,016,000 during the first six months of 1996
from $4,985,000 for the comparable period of the prior year. The increase of
interest expense is due to the average borrowings for the six months ended June
1996 was $10 million greater than for the six months ended 1995. The increase in
interest expense during 1996 was offset by interest income from restricted
investments.
INCOME TAXES
The effective income tax rate for the three months ended June 30, 1996 was
25% as compared to 48% for the comparable period of 1995. The effective income
tax rate for the six months ended June 30, 1996 was 34% as compared to 50% for
the comparable period of 1995. The rate can fluctuate significantly depending on
the amount of income before taxes, as compared to the fixed amount of goodwill
amortization and other non-deductible items.
(10)
<PAGE> 13
CLEAN HARBORS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FACTORS THAT MAY AFFECT FUTURE RESULTS
From time to time, the Company and employees acting on behalf of the
Company make forward-looking statements concerning the expected revenues,
results of operations, capital expenditures, capital structure, plans and
objectives of management for future operations, and future economic performance.
This report contains forward-looking statements. There are many factors which
could cause actual results to differ materially from those projected in a
forward-looking statement, and there can be no assurance that such expectations
will be realized.
The Company's future operating results may be affected by a number of
factors, including the Company's ability to: continue to implement the treatment
and disposal reengineering program; utilize its facilities and workforce
profitably, in the face of intense price competition; successfully increase
market share in its existing service territory while expanding its product
offerings into other markets; integrate additional hazardous waste management
facilities, such as the Kimball incinerator and the expanded Chicago facility;
realize benefits from cost reduction programs; and generate incremental volumes
of waste to be handled through such facilities from existing sales offices and
service centers and others which may be opened in the future.
The future operating results of the Kimball incinerator may be affected by
factors such as its ability to: obtain sufficient volumes of waste at prices
which produce revenue sufficient to offset the operating costs of the facility;
minimize downtime and disruptions of operations; and compete successfully
against other incinerators which have an established share of the incineration
market.
The Company's operations may be affected by the commencement and completion
of major site remediation projects; seasonal fluctuations due to weather and
budgetary cycles influencing the timing of customers' spending for remedial
activities; the timing of regulatory decisions relating to hazardous waste
management projects; secular changes in the process waste industry towards waste
minimization and the propensity for delays in the remedial market; suspension of
governmental permits; and fines and penalties for noncompliance with the myriad
of regulations governing the Company's diverse operations. As a result of these
factors, the Company's revenue and income could vary significantly from quarter
to quarter, and past financial performance should not be considered a reliable
indicator of future performance.
FINANCIAL CONDITION AND LIQUIDITY
The Company has financed its operations and capital expenditures primarily
by additions to long-term debt. During the six months ended June 30, 1996, the
Company spent $1,469,000 on additions to plant and equipment and construction in
progress, as compared to its capital expenditures of $4,458,000 during the same
period of the prior year, during which the Company also spent $5,549,000 on the
acquisition of the Kimball incinerator. During the six months ended June 30,
1996, net additions to long-term debt were $6,203,000, as compared to net
additions to long-term debt of $9,662,000 during the same period of the previous
year.
(11)
<PAGE> 14
CLEAN HARBORS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
At December 31, 1995, the Company had a $45,000,000 revolving credit and
term loan agreement (the "Loan Agreement") with a financial institution. The
Loan Agreement originally provided for a $35,000,000 revolving credit portion
(the "Revolver") and a $10,000,000 term promissory note (the "Term Note"). On
March 20, 1996, the Loan Agreement was amended to increase the Term Loan from
its amortized balance of $8,333,000 to $15,000,000 and decrease the revolving
portion to $30,000,000. This amendment allows the Company greater availability
under the Loan Agreement. The new Term Note is payable in 60 monthly
installments, commencing April 1, 1996. Monthly principal payments are $250,000.
The Revolver allows the Company to borrow up to $30,000,000 in cash and letters
of credit. Letters of credit may not exceed $20,000,000 at any one time. The
Revolver has a three-year term with an option to renew annually.
The Loan Agreement terms include a borrowing limit, which fluctuates
depending on the level of accounts receivable which collateralize the Loan
Agreement. The borrowing availability within each month will fluctuate
significantly depending on the level of business activity, when during the month
the bills are sent, the resulting amount of accounts receivable, and the usage
of letters of credit. The Loan Agreement terms allow the Company to make
regularly scheduled payments of principal and interest on its other indebtedness
for borrowed money (including leases), to pay dividends in cash on its preferred
stock, to prepay such debt or redeem such preferred stock, and to make
acquisitions of other companies, provided that on each of the sixty consecutive
days prior thereto, and after giving effect thereto, the Company shall maintain
borrowing availability in excess of $4,500,000. The Company requested that its
lender waive compliance with the Loan Agreement covenant requiring $4,500,000 of
excess availability, which was granted through September 1996.
Dividends on the Company's Series B Convertible Preferred Stock are payable
on the 15th day of January, April, July and October, at the rate of $1.00 per
share, per quarter; 112,000 shares are outstanding. Under the terms of the
preferred stock, the Company can elect to pay dividends in cash or in common
stock with a market value equal to the amount of the dividend payable. The
Company elected to pay the January 15, 1996 and April 15, 1996 dividends in
common stock. The market value of the common stock as of the January and April
1996 record dates of such dividends were $2.6125 and $2.9375, respectively.
Accordingly, the Company has issued a total of 81,001 shares of common stock to
the holders of the preferred stock for the year. The Company anticipates that
the preferred stock dividends payable through 1996 will be paid in common stock.
The Company is taking steps to obtain tax-exempt revenue bond financing
through the City of Kimball to pay for a portion of the costs of the Kimball
incinerator and landfill, including the prepaid closure insurance premiums, as
well as the costs of improvements to the facility. The Company anticipates that
approximately $9,000,000 of the proceeds of the planned tax-exempt bond issue
will be used to reimburse the Company for costs of the Kimball facility, and
applied to repay or refund existing indebtedness.
Although the Company's liquidity will be constrained from time to time due
to borrowing availability, the Company believes it has adequate liquidity for
its ongoing operations and planned capital needs. The Company operations along
with the provisions of the amended Loan Agreement are expected to produce cash
flow in excess of the amounts required to finance its operations and its capital
expenditures during 1996. In addition, the Company expects to realize net cash
savings of approximately $2,500,000, primarily from the sale of certain office
and maintenance facilities. It is expected that capital expenditures in 1996
will be approximately $3,000,000.
(12)
<PAGE> 15
CLEAN HARBORS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
- --------------------------
Except as provided below, no reportable events have occurred which would
require modification of the discussion under Item 3 - Legal Proceedings
contained in the Company's Report on Form 10-K for the Year Ended December 31,
1995.
In July, three of the Company's subsidiary companies were named as
defendants, along with an unrelated corporation and an unrelated individual, in
an action in the Court of Common Pleas for Hamilton County, Ohio. The case
involves claims for wrongful death and related causes of action and arises out
of the accidental death of an employee who worked at the Company's Spring Grove
waste handling facility in Cincinnati. The Company has not as yet filed its
answer to the complaint, but does not expect that this claim will be material to
its results of operations.
ITEM 2 - CHANGES IN SECURITIES
- ------------------------------
None
ITEM 3 - DEFAULTS UPON SENIOR DEBT
- ----------------------------------
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The Company's 1996 Annual meeting of the Stockholders was held on June 17,
1996. Stockholders owning 8,233,317 shares, or 85% of eligible shares were
represented in person or by proxy. 8,147,508 shares voted for the election of
Alan S. McKim, with 85,809 shares withheld, 8,146,328 shares voted for the
election of John F. Kaslow, with 86,989 shares withheld, and 8,146,354 shares
voted for the elections of David A. Eckert, with 86,963 shares withheld, to
serve as directors until the 1999 Annual Meeting of Stockholders. Other
directors whose term of office s director continued after the meeting were
Christy W. Bell, Daniel J. McCarthy, John T. Preston and Lorne R. Waxlax.
ITEM 5 - OTHER INFORMATION
- --------------------------
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
A) Exhibit 11 - Computation of Net Income per Share.
Exhibit 27 - Financial Data Schedule.
B) Reports on Form 8-K - None
(13)
<PAGE> 16
CLEAN HARBORS, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Clean Harbors, Inc.
----------------------
Registrant
Dated: August 12, 1996 By: /s/ Alan S. McKim
----------------------
Alan S. McKim
President and
Chief Executive Officer
Dated: August 12, 1996 By: /s/ Stephen H. Moynihan
----------------------------
Stephen H. Moynihan
Senior Vice President and Treasurer
(principal financial and
accounting officer)
(14)
<PAGE> 17
CLEAN HARBORS, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Clean Harbors, Inc.
-------------------------
Registrant
Dated: August 12, 1996 By:
--------------------------------------
Alan S. McKim
President and
Chief Executive Officer
Dated: August 12, 1996 By:
-------------------------------------
Stephen H. Moynihan
Senior Vice President and Treasurer
(principal financial and
accounting officer)
(14)
<PAGE> 1
EXHIBIT 11
CLEAN HARBORS, INC. AND SUBSIDIARIES
<TABLE>
COMPUTATION OF NET INCOME PER SHARE
FOR THE SECOND QUARTER ENDED JUNE 30, 1996
(in thousands)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1996 1995 1996 1995
------------------ ------------------
<S> <C> <C> <C> <C>
Net income (loss) $(2,605) $ 203 $(4,247) $ (387)
Less preferred dividends accrued 112 112 224 223
------- ------- ------- -------
Adjusted net income (loss) $(2,717) $ 91 $(4,471) $ (610)
======= ======= ======= =======
Income (loss) per common and common
equivalent share:
Weighted average number of
shares outstanding 9,624 9,431 9,592 9,431
Incremental shares for stock options
under treasury stock method -- 17 -- 16
------- ------- ------- -------
Weighted average number of
common and common equivalent
shares outstanding 9,624 9,448 9,592 9,447
======= ======= ======= =======
Net income (loss) per common and common
equivalent share $ (.28) $ .01 $ (.47) $ (.06)
======= ======= ======= =======
Income (loss) per common and common
equivalent share - assuming full
dilution:
Weighted average number of
shares outstanding 9,624 9,431 9,592 9,431
Incremental shares for stock options
under treasury stock method -- 18 -- 16
------- ------- ------- -------
Weighted average number of common
and common equivalent shares outstanding -
assuming full dilution 9,624 9,449 9,592 9,447
======= ======= ======= =======
Net income (loss) per common and common
equivalent share - assuming full
dilution $ (.28) $ .01 $ (.47) $ (.06)
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ART.5 FDS FOR 10-Q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 524
<SECURITIES> 1,694
<RECEIVABLES> 46,837
<ALLOWANCES> (1,055)
<INVENTORY> 3,073
<CURRENT-ASSETS> 58,776
<PP&E> 130,037
<DEPRECIATION> 58,047
<TOTAL-ASSETS> 175,229
<CURRENT-LIABILITIES> 43,477
<BONDS> 75,605
<COMMON> 97
0
1
<OTHER-SE> 56,049
<TOTAL-LIABILITY-AND-EQUITY> 175,229
<SALES> 95,374
<TOTAL-REVENUES> 95,374
<CGS> 73,818
<TOTAL-COSTS> 73,818
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,508
<INCOME-PRETAX> (6,448)
<INCOME-TAX> (2,201)
<INCOME-CONTINUING> (4,247)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,247)
<EPS-PRIMARY> (.47)
<EPS-DILUTED> 0
</TABLE>
