Company Wrench Ltd., Carroll, Ohio, has announced it is the new dealer for Kobelco Construction Machinery USA Inc. in Central Florida. Company Wrench also represents Kobelco in five other states, including North Carolina, South Carolina, New Jersey, Pennsylvania and Tennessee. 

Company Wrench President Cam Gabbard believes the territory expansion is the result of a mutual admiration between the parties.

“Company Wrench has successfully represented the Kobelco product in a number of key markets over the years,” he says. “Adding the Central Florida territory is probably the most substantial development in our relationship with Kobelco since we first signed as a dealer in 2013. We are excited to show this booming market what the Kobelco product has to offer.”

Gabbard believes the high standards of both parties make Company Wrench and Kobelco a perfect fit. 

“From innovation to performance, Kobelco has established itself among the premier manufacturers of excavators in the United States. Company Wrench has built a reputation for providing unmatched levels of customer service. When paired together, our customers receive a great product with expert support just a phone call away,” he says.

Company Wrench will represent the full line of Kobelco Excavator and Demolition products in Brevard, Citrus, Hernando, Hillsborough, Lake, Orange, Osceola, Pasco, Pinellas, Polk, Seminole and Sumter counties.

Cascade Environmental, a Bothell, Washington-based field services contractor of drilling, site investigation and remediation services, announced Nov. 2 it has appointed Ron Thalacker as its CEO.

Thalacker has more than 35 years of experience in the drilling industry. He joined Cascade in 2016 as senior vice president of drilling operations. He was promoted to COO, Drilling Services in July.

“Our path forward is focused on the sharing of equipment, people and expertise across lines of business and geographic regions to deliver the best possible service every day,” Thalacker says.

Thalacker succeeds former CEO John Cowdery, who plans to retire in June 2021. Cowdery will stay on as executive chairman until that time.

“My decision to retire comes at a time when the company is positioned for growth and continued success,” Cowdery says. “I’m confident Cascade will continue to thrive under Ron’s leadership.”

Clean Harbors Inc., Norwell, Massachusetts, announced financial results for the third quarter on Nov. 4.

Highlights from Q3 earnings include:

• The company reported Q3 revenues of $779.3 million
• The company had a net income of $54.9 million, earnings per share (EPS) of 99 cents and adjusted EPS of 90 cents in Q3
• The company had an adjusted EBITDA of $161.2 million, including $13.3 million from government assistance programs in Q3
• The company generated $29 million in decontamination emergency response revenue in Q3
• The company delivered record quarterly adjusted free cash flow of $123.5 million

“We delivered strong third quarter results that came in ahead of our expectations,” Clean Harbors President and CEO Alan McKim says. “Our performance reflects the resiliency of our business model, as well as the dedication of our people. We have now improved our adjusted EBITDA margins for 11 consecutive quarters. In response to the pandemic and the dynamic market conditions it created, we established a leadership position in providing advanced decontamination and disposal services for customers affected by COVID-19. We also substantially improved our operational efficiencies and lowered our overall cost structure, which is reflected in our third quarter margin performance. During the quarter, we saw a steady sequential pick-up from the second quarter across several of our core lines of business, particularly within Safety-Kleen.”

Q3 results breakdown

Revenues were $779.3 million in Q3 compared with $891.7 million in the same period of 2019. Income from operations was $83.9 million compared with $80.4 million in the third quarter of 2019.

Net income was $54.9 million, or 99 cents per diluted share during the quarter. This compares with net income of $36.4 million, or 65 cents per diluted share, for the same period in 2019. Adjusted for certain items in both periods, adjusted net income was $49.9 million, or 90 cents per diluted share for the third quarter, compared with adjusted net income of $40.7 million, or 72 cents per diluted share, in the same period of 2019.

Adjusted EBITDA was $161.2 million, including $13.3 million of benefit from U.S. and Canadian government assistance programs, compared with $156.6 million in the same period of 2019.

“Environmental Services delivered strong profitability through a combination of cost reductions, productivity improvements, a healthy mix of higher-margin work and government incentives,” McKim says. “We experienced a lower utilization rate of 80 percent at our incinerators in the quarter due to the timing of turnarounds and a production lag from some customers, but we continued to execute on our strategy to capture higher-value waste streams across our network. This resulted in an average price per pound increase of 5 percent from the prior year. Landfill volumes declined nominally, as stronger base business largely offset the lack of remediation and waste projects caused by the pandemic. While still below historical averages, activity in other service areas of the segment, including Technical Services and Industrial Services, saw steady increases in demand at key customers during the quarter.

“Revenue from COVID-19 decontamination work totaled $29 million in the quarter, which helped drive a 20 percent top-line increase in Field Services. Our team has now completed more than 9,000 COVID-19 responses, reinforcing our leadership position. We are extremely proud of the decontamination work being done by our people out on the front lines as they limit the spread of this virus, protect our customers and make our communities and workplaces safe again.

“Safety-Kleen rebounded from the shelter-in-place restrictions that had severely disrupted customer demand in the second quarter of 2020. In fact, on a year-over-year basis, revenue in our branch business was only off 6 percent in Q3—much better than we anticipated. The lifting of local restrictions across much of North America led to an increase in vehicle miles driven, generating improved lubricant demand. Based on the strength of the recovery in near-term demand for base oil and finished lube products, we restarted three re-refineries that were taken offline at the outset of the pandemic. Given the declining market value of waste oil, we maintained high charge-for-oil (CFO) rates for used motor oil (UMO) and increased our collection volumes to 50 million gallons, 16 percent ahead of second quarter levels.”

Business outlook and financial guidance

“We enter the final quarter of 2020 positioned for continued success in the current environment,” McKim says. “Our market leadership and renowned emergency response capabilities have enabled us to capitalize on opportunities and safely navigate the challenges presented by the pandemic. Over the past two quarters, prudent cost actions and reduced capital spending have helped us drive record adjusted EBITDA margins and adjusted free cash flow. We believe that our COVID-19 decontamination business can continue to help hedge against potential slowdowns in revenue and profitability in other parts of the company.

“Within Environmental Services, we anticipate a sequential uptick in incineration utilization in the fourth quarter as we saw steady increases in production and waste volumes at our key customers during the third quarter. Because virus-related project delays remain, we do not expect landfills to fully recover until sometime in 2021, when we believe PFAS and other larger opportunities start to come to market. For Industrial Services and Technical Services, we anticipate our core service offerings to close out the year on an upward trajectory. Field Services remains on track for a great year, with anticipated COVID-related revenue exceeding $100 million.

“Our Safety-Kleen branch business remains below historical levels, but demand has improved markedly from the lows of April and May. With the ongoing spike in COVID-19 cases, we are sensitive to the possibility of new shelter-in-place mandates that could disrupt the recovery of this business. For Safety-Kleen Oil, our primary re-refineries are all back online and base oil pricing is stable. We continue to actively manage our CFO rates with the goal of growing collection volumes to supply our re-refinery network.”

Based on its year-to-date financial performance and current market conditions, Clean Harbors raised its adjusted EBITDA and adjusted free cash flow guidance ranges and currently expects:

Adjusted EBITDA in the range of $530 million to $550 million based on anticipated 2020 GAAP net income in the range of $104 million to $130 million; and

Adjusted free cash flow in the range of $250 million to $270 million based on anticipated 2020 net cash from operating activities in the range of $405 million to $445 million.

Harsco Corp., Camp Hill, Pennsylvania, announced its Q3 results on Nov. 3.

Here are some of the Q3 highlights:

• Revenues increased 14 percent from Q2 to $509 million, and they increased 20 percent from Q3 2019 due mainly to the company's acquisition of Stericycle's Environmental Solutions (ESOL) business
• Third quarter GAAP operating income of $5 million and GAAP diluted loss per share of 10 cents including planned integration expenditures from its acquisition of ESOL
• Q3 adjusted earnings per share of 8 cents
• Adjusted Q3 EBITDA of $59 million 
• Net cash provided by operating activities of $21 million and free cash flow increased to $18 million in Q3 as a result of capital spending discipline and working capital initiatives
• Q4 adjusted EBITDA anticipated to be between $58 million and $63 million; Q4 free cash flow expected to be between $20 million and $25 million

“Underlying market fundamentals within Harsco Environmental and Clean Earth steadily improved during the quarter and our businesses continued to execute well,” Harsco chairman and CEO Nick Grasberger says. “In recent months, we also have made strong progress on our key initiatives, including our focus on preserving financial flexibility and integrating ESOL. With respect to ESOL, during the third quarter we began executing on major improvement initiatives to strengthen operational and commercial performance, after spending our initial 100 days focused on foundation-building integration. We're confident these actions will enable us to achieve our long-term financial goals at ESOL.”

Grasberger adds: “Looking forward, while we expect business conditions to continue improving in the fourth quarter, our visibility remains limited and the economic environment remains fluid. In this context, we continue to focus on factors within our control, including the safety and well-being of our employees and operational excellence in all functions of our business, as well as ongoing cost and capital-spending management to preserve our financial flexibility. We believe these actions will position us to continue our progress towards becoming a single-thesis environmental solutions company and to capitalize on growth opportunities as the global economy recovers.” 

Consolidated Q3 operating results

Consolidated total revenues from continuing operations were $509 million, an increase of 20 percent compared with the prior-year quarter due to the acquisition of ESOL in April and higher revenues in the Rail segment. Foreign currency translation impacts on third quarter revenues were nominal compared with the prior-year period.

GAAP operating income from continuing operations was $5 million for the third quarter, compared with $47 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled $59 million in the third quarter versus $87 million in the third quarter of 2019. This EBITDA change is attributable to COVID-19 impacts in each business segment, partially offset by ESOL contributions following its acquisition earlier in 2020.

Environmental

Environmental revenues totaled $223 million in the third quarter, compared with $261 million in the prior-year quarter. The segment's GAAP operating income and adjusted EBITDA totaled $12 million and $40 million, respectively, in the third quarter. These figures compare with GAAP operating income of $33 million and adjusted EBITDA of $60 million in the prior-year period. The change in the segment's adjusted EBITDA relative to the prior-year quarter is principally attributable to lower demand for environmental services and applied products as a result of COVID-19. Adjusted EBITDA margin was 17.9 percent in the third quarter.

Clean Earth*

Clean Earth revenues totaled $194 million in the third quarter, compared with $88 million in the prior-year quarter. Segment operating income was $9 million and adjusted EBITDA totaled $20 million in the third quarter. These figures compare with $11 million and $19 million, respectively, in the prior-year period. The increase in revenues and adjusted EBITDA is attributable to the ESOL acquisition in the second quarter and higher contributions from dredged material processing, partially offset by lower demand for hazardous and contaminated materials services as a result of the COVID-19 pandemic.

Rail

Rail revenues increased 24 percent compared with the prior-year quarter to $93 million. This change reflects higher equipment sales including revenues from long-duration supply contracts. The segment's operating income and adjusted EBITDA totaled $4 million and $5 million, respectively, in the third quarter. These figures compare with operating income of $12 million and adjusted EBITDA of $14 million in the prior-year quarter. The EBITDA change year-on-year is attributable to a less favorable product mix and lower aftermarket parts and technology product volumes.

Cash flow

Net cash provided by operating activities totaled $21 million in the third quarter, compared with net cash provided by operating activities of $45 million in the prior-year period. Free cash flow was $18 million (before transaction expenses) in the third quarter, compared with $5 million in the prior-year period. The improvement in free cash flow compared with the prior-year quarter is attributable to changes in net cash from operating activities, including cash generated from working capital and lower capital expenditures.

Q4 outlook

The company says its underlying business conditions improved during the third quarter; however, the improvement realized was uneven and the pace of recovery varied within relevant end markets. Fundamental improvement was most apparent within Harsco Environmental and Clean Earth and the company says it expects these positive trends to continue in the fourth quarter. Meanwhile, its Rail segment has yet to see a positive inflection as customers, particularly in North America, continue to defer capital spending as a result of pandemic-related pressures within the freight and passenger rail market. In total, the company anticipates that its adjusted EBITDA in the fourth quarter will modestly improve, at the mid-point of guidance, versus the third quarter. Specifically, Harsco expects its Q4 EBITDA to be within a range of $58 million to $63 million. This outlook also assumes that corporate spending will be modestly higher in the fourth quarter compared with Q3 due to the timing of certain expenses.

Additionally, measures implemented earlier in 2020 to control costs remain in place and the company is mindful that further cost actions may be necessary if the pace of economic recovery slows, it says. The company is also maintaining its capital spending and working capital discipline to support positive free cash flow. These ongoing actions are expected to enable Harsco to generate free cash flow of $20 million to $25 million in the final quarter of the year, it says.

This outlook is subject to certain risks related to COVID-19 and other factors, and it assumes that any such factors will not alter the ongoing recovery in the fourth quarter.

*The 2019 financial information provided for Clean Earth does not include a corporate cost allocation and does not include ESOL.