Clean Harbors, Inc. (NYSE:CLH) Q1 2024 Earnings Call Transcript

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And I do think that this has got — the fact that we’ve got the drinking router standards out there and they’re getting more and more regulation around circular rules around this. We have that solution. We — it’s very, very important for us and our customers to have a total instruction solution, and we have that today.

Noah Kaye: Perfect. Thanks so much for the comprehensive insert.

Eric Gerstenberg: Thank you.

Michael Battles: Thank you.

Operator: [Operator Instructions]. Our next question comes from the line of Larry Solow with CJS Securities. Please proceed with your question.

Lawrence Solow: Hi, great. Good morning guys. Most of my questions have been answered. Now still my last couple there. I guess just coming back to the cadence on SKSS. It sounds like, obviously, you’re building in a pretty nice ramp looks like you have to get to like an average of like $50 million a quarter to kind of get to the midpoint of the numbers. So do we — is it kind of an ease second quarter a little bit up, and then the back half of the year is really where you get the full impact of some of these projects to and some of the ramp of the base oils or the blended to me.

Michael Battles: Yes, you got it right. There’s a pretty big jump from where we ended Q1 into Q2. I think that’s better pricing, that’s better production in our plants and a few other good things that are happening for us including Group 3, and a roll out. And a bit of a beat in Q2, obviously, a big beat in Q3 because of where we are versus the view we had in Q3 and in Q4.

Lawrence Solow: Right. Got you. Okay. And then just on Kimball on the CapEx. I think $65 million this year. Does that — is that basically complete the majority of the bulk of the spending, and then going forward is just the incremental maintenance stuff?

Eric Gerstenberg: Yes, that’s right, Larry. It will. The $65 million will get us to that $200 million mark, and we’ll have some related start-up additional capital, but that really gets us full spend.

Lawrence Solow: Got it. Okay. Great. And then just lastly, a HEPACO. It sounds like you’re reaffirming all the — it sounds like things are going good. It’s early on obviously early days. But the synergies, I guess, you’re not building in much this year, it feels like, right? But maybe there is a little bit of upside there. But you’re still kind of holding firm. So within the first 12 months, you don’t realize that $20 million, but beyond that 12 months, that $20 million should be realized, right? Is that kind of the way to look at it? You could do $60 million EBITDA next year maybe or — is that fair?

Eric Gerstenberg: That’s how we’re thinking about it, Larry. I think a smaller amount of synergies this year, obviously, as we roll in, we’ll have some offsetting severance integration costs we talked about. But certainly, that $20 million number — 12 months from now, that’s the run rate. And I think it’s safe to say we feel really good about that. Strong possibility. It’s probably even a little bit better. So really love the acquisition, fits in nicely. And as Mike and Eric alluded to, we — first week in March, really nice to see them fit in with Clean Harbor or so.

Lawrence Solow: Got it. Great. Excellent. Thanks guys. Appreciate it.

Operator: Thank you. Mr. Gerstenberg, we have no further questions at this time. I would like to turn the floor back over to you for closing comments.

Eric Gerstenberg: Thanks for joining us today. Next week, management will be at the Waste Expo in Las Vegas in participating in Cycles Investor Summit there as well as the Oppenheimer Industrial Growth Conference later in the week, we also have several conferences lined up in Boston and New York in early June. With that after calendar, we look forward to seeing some of you at these and other events. Thank you.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

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