Clean Harbors Q1 2025 Earnings Report

Clean Harbors EPS Results

• Actual EPS: $1.09
• Consensus EPS: $1.02
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $1.29

Clean Harbors Revenue Results

• Actual Revenue: $1.43 billion
• Expected Revenue: $1.44 billion
• Beat/Miss: Missed by -$10.81 million
• YoY Revenue Growth: +4.00%

Clean Harbors Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 9:00AM ET

Clean Harbors (NYSE:CLH) is a leading provider of environmental, energy and industrial services in North America. The company specializes in the collection, transportation and disposal of hazardous and non-hazardous wastes, emergency spill response and remediation, industrial cleaning and on-site field services. Its comprehensive service offering also includes chemical neutralization, drum crushing, high-pressure water blasting, tank cleaning and vacuum services designed to help customers meet stringent environmental regulations.

Founded in 1980 by Alan S. McKim and headquartered in Norwell, Massachusetts, Clean Harbors has grown through organic expansion and strategic acquisitions to establish a network of more than 400 service centers, treatment, storage and disposal facilities and emergency response locations across the United States and Canada. The company’s history of targeted investments has allowed it to broaden its technical capabilities, enhance its service portfolio and integrate specialized businesses that strengthen its position in key end markets such as manufacturing, energy production, healthcare and government.

Clean Harbors employs a workforce of technicians, engineers and environmental specialists who deliver solutions tailored to complex waste management and environmental challenges. Under the leadership of founder and long-time chief executive Alan S. McKim, the company has built a reputation for operational excellence, safety and regulatory compliance. Clean Harbors continues to leverage its expansive geographic footprint and technical expertise to support customers’ sustainability initiatives and lifecycle management of environmental liabilities.

Clean Harbors Q1 2025 Earnings Call Transcript

Key Takeaways

• Exceptional safety performance: Total recordable incident rate was a historic low 0.46 in Q1, marking the best quarter in company history.
• Strong Q1 financial results: Company revenues rose 4% and adjusted EBITDA reached $235 M, beating guidance despite challenging weather, while free cash flow and corporate results aligned with expectations.
• Robust ES segment growth: ES revenues grew 3% and adjusted EBITDA increased 4% with a 10 bps margin improvement, driven by higher incineration pricing (+5%) and utilization (88%) alongside the Kimball incinerator ramping up.
• SKSS outperformance and pricing initiative: SKSS exceeded Q1 EBITDA guidance, doubled its charge-for-oil pricing to collect 58 M gallons of used oil, and optimized operations by idling a high-cost re-refinery while advancing partnerships like BP Castrol.
• Reaffirmed 2025 guidance and strong balance sheet: Full-year adjusted EBITDA guidance is maintained at $1.15–1.21 B, free cash flow projected at $430–490 M, supported by ~$600 M cash, 2.1× leverage and $55 M in share repurchases.

Presentation

[Operator]

Greetings and welcome to the Clean Harbors First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Jim Buckley, Senior Vice President of Investor Relations for Clean Harbors. Mr. Buckley, please go ahead.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Thank you, Melissa, 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. 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 meaning of the Private Securities Litigation Reform Act. Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, April 30, 2025. Information on potential factors and risks that could affect our results is included in our SEC filings. 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.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Clean Harbors believes such information provides an additional measurement and consistent historical comparison of its performance. Reconciliation of these measures to the most directly comparable GAAP measures is available in today's news release on our IR website and in the appendix of today's presentation. Let me turn the call over to Eric Gerstenberg to start. Eric?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Jim. Good morning, everyone, and thank you for joining us. To start, I want to highlight our safety results for Q1. They are not a financial metric, but as we often say, they are our most important metric. Our total recordable incident rate, or TRIR, was an outstanding 0.46 in the quarter. That represents not just our best Q1, but the best quarter in the company's history. Hats off to our entire team for the energy and effort they put into having our safety programs, for fostering a strong safety culture, and for protecting themselves and each other. Turning to our financial performance on slide three, our overall Q1 results finished ahead of expectations. Our ES segment began the year with an encouraging first quarter that included a strong contribution in March after a period of unfavorable weather in January.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Our SKSS segment outperformed our guidance due to better pricing of our used oil collection services that Mike will discuss. Overall, company revenue was up 4% in Q1. Demand trends for our disposal and recycling assets were positive. We exited the quarter with momentum in most of our ES segment businesses and are optimistic about SKSS's ability to achieve its annual target. Our adjusted free cash flow and corporate segment results were also in line with expectations we provided in February. All in all, a solid start to 2025 for the company. Turning to our segment review, beginning on slide four with ES, adjusted EBITDA increased 4% with a 3% increase in revenue, resulting in a 10 basis point margin improvement.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Our top-line growth increased due to the 2024 acquisition of HEPACO, as well as growth from pricing and higher incineration utilization, which offset a year-over-year decline in industrial services driven by the refinery sector. Looking at our revenue by segment components, Field Services grew 32%, driven mostly by HEPACO, supported by organic growth in our legacy business. In total, we responded to more than 5,000 emergency response events in Q1, in line with recent quarters. In technical services, higher incineration volumes and pricing drove a 5% revenue increase. Incineration price rose more than 5% in Q1 on a mix-adjusted basis. Incineration utilization was an impressive 88% versus 79% in Q1 2024. For comparison purposes, this quarter's utilization number excludes the new kiln and kiln belt as we ramp up.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

As we have stated publicly, our goal for the new kiln this year is to process 28,000 more tons or more, with growth in 2026 as we complete our shakedown process. In Q1, the new incinerator processed 5,000 tons, running well despite challenging weather conditions in January. Overall, incineration demand was high all quarter long and shows no signs of slowing as reshoring and other market dynamics play out. We are continuing to realize the benefits of investments we have made in our disposal and recycling network to enable more efficient processing and movement of waste. Safety-Kleen Environmental Services continued its consistent and steady performance, notching another quarter of profitable growth by increasing revenues by 5% from a year ago. We performed 245,000 parts wash services in the quarter, down slightly from a year ago, reflecting the service interruptions from bad weather.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Our pricing initiatives, record containerized waste services, and new products, including some innovative aqueous parts washers, drove the growth in this business. We faced some challenges in Q1 with our Industrial Services business, where revenue was down 10% from a year ago, as we continue to see some refinery customers delay spending and defer maintenance amid the current environment. Lastly, I'm sure someone will ask questions about tariffs. While we suspect that tariff and trade uncertainty may be behind some of the industrial services weakness this quarter, refinery customers have been under pressure for some time due to local crack spreads. We haven't seen a material impact from tariff uncertainty on our waste volumes in TS or in SK Branch or on the number of ERs we've conducted in Field Services. A stated goal of the current administration is to generate more U.S.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Manufacturing and industrial production, which should ultimately benefit Clean Harbors. We do not expect any of the core environmental regulations that have been the foundation of our business and have protected human health and the environment across the U.S. for decades to change under the current administration. As it relates to tariffs and our supply chain, most of our purchasing is domestically sourced, so we don't anticipate any disruptions to our growth plans. That said, we have recently enacted a nominal price increase to offset the higher costs we expect for our vehicle fleet, the chemicals we use, and other supplies. To protect our margins, we remain committed to further adjusting our pricing and reducing our cost structure to offset any additional inflation that may come as a result of tariffs. With that, let me turn things over to Mike to discuss SKSS and capital allocation. Mike.

[Mike Battles, Co-CEO at Clean Harbors]

Thank you, Eric, and good morning, everyone. Turning to our SKSS segment results on slide five, revenue increased year over year, reflecting greater volumes, including the addition of Noble, as well as a shift to a substantially higher charge for oil, or CFO. Those items more than offset the continued lower pricing we saw for base oil caused by a weak demand environment. While our Q1 adjusted EBITDA decreased slightly from a year ago, the $28 million we achieved exceeded our guidance we provided in February. Adjusted EBITDA margin was down year over year due to base oil pricing, but again, ahead of our initial expectations. This performance is a direct result of the team's hard work in responding to the ongoing challenges in the base oil and lubricants market. We announced in mid-November that we are shifting to a charge for oil position for all customers.

[Mike Battles, Co-CEO at Clean Harbors]

In fact, since year-end, we have successfully doubled the average price per gallon we are charging for the collection of used oil, while also maintaining the volumes needed to meet our production goals. In the quarter, we gathered 58 million gallons of waste oil to feed our plants, compared with 55 million gallons a year ago. As we highlighted in our last call, we have idled our California re-refinery, not just to pause our highest-cost location, but to support our CFO initiative by requiring fewer overall gallons to feed our network. We believe these actions, including executing a range of cost-cutting initiatives, enable us to exceed our profitability expectations in Q1. We remain committed to earning a fair price on our used motor oil collection services in order to drive consistent profitability in this segment. We advanced two other important programs in the quarter.

[Mike Battles, Co-CEO at Clean Harbors]

We are working closely with BP Castrol to support our partnership around Castrol's more circular offering, which enables corporate fleets to lower their carbon footprint without sacrificing quality in their lubricants. We believe they are generating strong interest in the marketplace and building a healthy pipeline of potential customers with two large fleets signed up and more to come. Another initiative that should support greater stability and profitability in this segment is our Group 3 program, which we've outlined on prior calls. We expect to produce 2-3 million additional gallons of Group 3 this year versus 2024. Turning to capital allocation on slide six, we continue to look for internal and external opportunities to generate the best returns on our shareholders' capital. Importantly, we ended the quarter with a large cash balance and low leverage to execute both those facets of our growth strategy.

[Mike Battles, Co-CEO at Clean Harbors]

On the M&A front, we have been actively reviewing multiple deals and being selective about what we move forward on. We continue to look at deals at varying sizes with an emphasis on where we can capture synergies in costs and cross-selling while capitalizing on our expansive network of assets. Internally, we see opportunities to invest across several areas. Kimball is now open and running well. Our Baltimore expansion continues. In April, we closed on our new site in Phoenix, where we'll replicate that hub concept again. Within ES, we opened 10 additional Field Service branches in Q1 while adding more processing and recycling capabilities to current locations as we capitalize on market opportunities. We're also evaluating potential methods to further process some of our byproducts we produce in our re-refining business as we believe there is value to be harvested here.

[Mike Battles, Co-CEO at Clean Harbors]

Eric Dugas will cover our buyback activity in Q1, but we intend to be opportunistic with large purchases when conditions warrant. We are optimistic about our prospects in 2025. We ended Q1 slightly ahead of plan overall, with SKSS outperforming our expectations. Furthermore, we believe that there are many tailwinds supporting our business to achieve our guidance despite the potential impact of tariffs. Demand for our services remains strong, particularly on the disposal side from TS and SKD customers. Kimball is ramping up as expected. Interest in our total PFAS solution and its offerings remain high. We expect our EPA and DOD-supported incineration study to be published in the coming months. Reshoring and expansion of customer sites is ongoing. We see a robust pipeline of remediation and waste projects.

[Mike Battles, Co-CEO at Clean Harbors]

The potential for captive closures in the coming year is real as we continue to have healthy discussions with some of those operators. Our growth outlook for field service is strong with the addition of HEPACO and its national call center. While the recovery in industrial services we anticipate this year may be somewhat muted, we still like the long-term prospects of this business given the necessity of the services we provide. SK is doing well, executing within the areas it can control, especially collection costs. In short, there are a lot of positive fact

[Mike Battles, Co-CEO at Clean Harbors]

ors to support our planned growth as we celebrate our 45th anniversary in 2025. With that, let me turn the call over to our CFO, Eric Dugas.

[Eric Dugas, CFO at Clean Harbors]

Thank you, Mike. Good morning, everyone. Turning to the income statement on slide eight, our Q1 results topped the guidance we provided on our Q4 earnings call. The solid results were achieved with continued year-over-year growth in profitability in our ES segment and better-than-expected results in SKSS. Overall, we grew total company revenues in the quarter by $55 million, or 4%, with the ES segment accounting for two-thirds of that growth. Q1 adjusted EBITDA of $235 million was driven by higher earnings in our ES segment, which offset a slight decline in SKSS and slightly higher corporate costs as compared to Q1 of last year. Our adjusted EBITDA margin of 16.4% in Q1 was down year-over-year, but in line with our expectations.

[Eric Dugas, CFO at Clean Harbors]

Even with a tough start to the quarter due to extreme weather, the team achieved expected margin performance in Q1 by delivering a good mix of high-margin work and controlling spending. SG&A expense as a percentage of revenue was 12.8% in Q1. For the full year 2025, we continue to anticipate SG&A expense as a percentage of revenue will be in the mid-12% range. Depreciation and amortization in Q1 came in as expected at $112 million, up due to acquisitions and our first full quarter of Kimball. For 2025, we continue to expect depreciation and amortization in the range of $440-$450 million. Income from operations in Q1 was $111.6 million, down from the same period a year ago when we had less depreciation and amortization. Q1 net income was also down, as expected, versus the same period a year ago as we delivered earnings per share of $1.09.

[Eric Dugas, CFO at Clean Harbors]

Turning to slide nine in the balance sheet, cash and short-term marketable securities at quarter-end approached $600 million. Given that high cash balance, we continue to view our balance sheet as a competitive advantage, particularly given the uncertainty in the credit markets. Our net debt-to-EBITDA ratio at quarter-end remained at approximately 2.1 times, with no material debt amounts due till 2027. Our overall interest rate at quarter-end was 5.3%. During the quarter, we received a credit rating upgrade by Moody's based upon our recent financial performance, overall growth, and our strong capital policies. This upgrade puts our overall debt rating just one notch below investment grade and our secured debt at an investment grade rating. Turning to our cash flows on slide 10, net cash from operating activities in Q1 was $1.6 million, which was as expected.

[Eric Dugas, CFO at Clean Harbors]

Capex, net of disposals, was just over $117 million, down from the prior year as we have completed our Kimball Capex spend. We expect the majority of the $15 million associated with our Phoenix project that we called out on our Q4 call to occur here in Q2 as the site was purchased in early April. For the quarter, adjusted free cash flow was a -$116 million and consistent with Q1 a year ago. In addition to Capex spend, the negative free cash flow in both periods reflects the timing of incentive comp payments, interest payments, and seasonal working capital increases. For 2025, we continue to expect our net Capex, excluding the Phoenix Growth Project, to be in the range of $345 to $375 million. During Q1, we bought back nearly 260,000 shares of stock at a total spend of $55 million.

[Eric Dugas, CFO at Clean Harbors]

We currently have more than $430 million remaining under our repurchase program authorization, and we continue to view our shares, particularly in light of the recent pullback, as undervalued. Moving to guidance on slide 11, based on our Q1 results, along with current market conditions for both of our operating segments, we are reiterating our 2025 adjusted EBITDA guidance range of $1.15 billion to $1.21 billion for a midpoint of $1.18 billion, which represents 6% annual growth. Looking at our annual guidance from a quarterly perspective, we currently expect adjusted EBITDA for Q2 to grow 1%-3% compared with the prior year, with 3-5% growth in the ES segment and lower expense in the corporate segment, which will more than offset an expected year-over-year decline in SKSS. As a reminder, we also had a number of good-sized ERs in Q2 a year ago in the ES segment.

[Eric Dugas, CFO at Clean Harbors]

For full year 2025, adjusted EBITDA guidance will translate to our reporting segments as follows. In Environmental Eervices, we continue to expect adjusted EBITDA in 2025 at the midpoint of our guidance to increase 5-8% from 2024. Demand for disposal, recycling, remediation work, and SK branch offerings have all continued year to date. The only exception, as previously noted, is industrial services, where customers can defer maintenance or slow spending during times of economic uncertainty. Our Kimball facility will continue its ramp toward full production as planned. Given the momentum from reshoring projects and PFAS, as well as support from our sales team, we expect our facilities network to process record volumes this year. We also expect to see continued expansion in the SK branch and Field Services businesses.

[Eric Dugas, CFO at Clean Harbors]

For SKSS, we continue to expect full year 2025 adjusted EBITDA at the midpoint of our guidance to be $140 million. While we exceeded our expectations for Q1, given the outstanding work by the team in improving our collection rates, we remain cautious in our assumptions for this segment given its commodity exposure. Within corporate, at the midpoint of our guide, we continue to expect negative adjusted EBITDA to be up 3%-7% compared to 2024. The year-over-year increase primarily relates to the company's expected revenue growth, wages and benefits, and insurance, partly offset by our cost savings initiatives. For adjusted free cash flow, our 2025 guidance remains in the range of $430 million to $490 million, or a midpoint of $460 million, which represents a nearly 30% increase from 2024.

[Eric Dugas, CFO at Clean Harbors]

As we highlighted last quarter, this range excludes our $15 million growth investment to create a new hub location in Phoenix. We believe the exclusion of long-term growth projects creates a more accurate picture of our free cash flow generation as a company. In summary, Q1 was a good start to 2025. We continue to expect the demand environment and our pricing initiatives to support our anticipated profitable growth this year. The ES segment has a strong backlog of waste, a robust pipeline of project opportunities, including PFAS, and most of our services businesses have good momentum. Within SKSS, we believe we should stabilize this business this year as we focus our energy on strategies to maximize the value of these assets while minimizing any downside potential.

[Eric Dugas, CFO at Clean Harbors]

Overall, we are encouraged by the trajectory of the company and look forward to the remainder of this year as we continue to execute against our longer-term goals. With that, Melissa, please open the call for questions.

[Operator]

Thank you. If you'd like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Tyler Brown with Raymond James. Please proceed with your question.

[Tyler Brown, Associate Vice President at Raymond James]

Hey, good morning, guys.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Hey, Tyler.

[Mike Battles, Co-CEO at Clean Harbors]

Morning, Tyler.

[Tyler Brown, Associate Vice President at Raymond James]

Hey. Hey, morning. Just, you guys mentioned, I think, that ES was up 4% in the quarter. It did sound like weather had an impact. I mean, I think it snowed in Houston, for example. Any way you could quantify what that drag was? Will those volumes effectively be made up, or are they kind of lost?

[Eric Dugas, CFO at Clean Harbors]

Hey, Tyler, Eric Dugas here. I'll start off with that. Yeah, you're absolutely right. Weather was very difficult in January, and we had incorporated, you know, much of that into our guidance that we gave in February. You know, if I, if, you know, it's difficult to perfectly quantify it, but we had talked about maybe $10 million to $12 million of lost EBITDA due to weather. You know, I think as we moved through the quarter, what we saw is when weather improved, you know, the strong March that Eric mentioned, we were really excited about what we saw there, helped to make up for some of the drag on weather, but really gives us kind of good positive momentum as we go into Q2.

[Eric Dugas, CFO at Clean Harbors]

What we've seen in early April is, you know, consistent with what we saw in March. Excited about ES and continued strong demand there as we move into Q2.

[Tyler Brown, Associate Vice President at Raymond James]

Okay. That sounds good. Just to be clear on the Q2 guide, one, last year, I think HEPACO had some large-scale work. I think you mentioned it. Just to be clear, the 3-5% incorporates lapping that work. It does not include any outsized work. Two, what are the expectations for refinery turnarounds and industrial services? Is that expected to start ramping in Q2, or is that more of a back half thing, or is that really just upside to the guidance altogether?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, Tyler, this is the other Eric answering. First, I'd say that, yes, our Q2 guide does not include any expected emergency large-scale emergency response events. We are being a little bit conservative there. As far as the industrial network, we'd say that our turnaround strength of what we have booked at this point is still very strong. In fact, over 150 turnarounds we still have planned, which is pretty substantial from a year ago at this time. We are expecting a better second half. Obviously, those refineries are continuing to try to watch their costs as they go into this year. We all know that at some point, those refineries need to be taken down and maintenance needs to be done. Might be a little bit more conservative on some of the investment and among capital projects and so forth.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Overall, we have a real solid pipeline in the U.S. and Canada around turnarounds for the second half of this year. Not much change over the past 90 days that we've seen since last time we talked about it.

[Tyler Brown, Associate Vice President at Raymond James]

Okay. Perfect. Just my last one, Eric, I continue to get a lot of questions from investors around the cycle, the cyclicality of your business. Obviously, you guys have bucked the industrial production trend over the last couple of years. You offer a very high necessity, non-deferable service. Mike, I think, frankly, you laid out a number of idiosyncratic drivers. Can you, at a very high level, talk about the cyclicality specifically of the ES segment and maybe how cyclical the various lines of business are, again, in ES? Any color there, I think, would be helpful. Appreciate it, guys.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. I think we'd say, Tyler, that, you know, our business on the environmental side is really recession resistant. We really see continued strong growth in the second and third quarters around our TS, our SKE business, our FS business continues to be strong. IS, as we mentioned a little bit, that's gonna flow up and down year to year based on the size and scope of the turnarounds. We all know that maintenance work needs to be done. Really, the cyclicality, we're not really seeing any early recession trends or any recession trends at all in any of our businesses.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

As Eric just talked to, our pipeline across the board in our businesses, our waste projects, our drum count, and how we look at that coming out of March and into the second quarter already, really, really strong. We see some real positive momentum here.

[Eric Dugas, CFO at Clean Harbors]

Yeah, Tyler, I would say that, that on what Eric said is that, you know, you see a, you see in, in a majority of the ES business, you see a continued, this is, you know, year three of, of kind of year-over-year margin expansion in light of the cyclicality in industrial that we saw, as Eric said, in his prepared remarks late last year. You know, now we see it again in Q1. If you remember, Tyler, you know, when, when, you know, the refineries were, you know, making all the, all their gasoline and with the inflation, and this is back in 2022. Then, you know, we had a great 2023 because, as Eric just said, you can't delay these things forever. We are hopeful that that comes. We're not planning a, a, you know, we have a good pipeline.

[Eric Dugas, CFO at Clean Harbors]

We do not have an extraordinary pipeline, but we are hopeful that, you know, those things come to be. The industrial business kind of recovers. In the interim, we, you know, we take out costs. We are managing the P&Ls very tightly, and we are managing that business well to still provide a fair margin for it. It is down year over year and in Q1 like it was in the back half of 2024.

[Tyler Brown, Associate Vice President at Raymond James]

Perfect. Thank you, guys.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Tyler.

[Operator]

Thank you. Our next question comes from the line of Noah Kaye with Oppenheimer & Co. Please proceed with your question.

[Noah Kaye, Managing Director and Senior Research at Oppenheimer & Co]

Hey, morning, folks. Thanks for taking the questions. Maybe we can start with PFAS. Just give us an update if you can on the pipeline, what you're thinking for PFAS revenue growth this year, and maybe get your view on the plan of attack the administration announced on Monday. Looks like more frequent updates to destruction disposal guidance could be a positive. Just your thoughts there.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, no, a great, great question. We continue to see a very strong, robust pipeline growing quarter to quarter across our business. Team has done a great job reaching out to all those potential customers and servicing our existing. You mentioned, on April 28th, the EPA and Lee Zeldin put a great announcement out that really designated, creating a PFAS lead, more frequent updates on destruction and disposal, using record authorities to address releases. We are continuing to see momentum there on a strengthening regulatory framework that will drive PFAS collection disposal, our total PFAS solution as we've talked about it in a number of ways. All that momentum is real positive for what we've been talking about for a long time. Just an update on the study.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We've talked about that in the past that we did our incineration, secondary sampling and burn testing. We expect the results of those to be published in Q2. Really bullish about how that has demonstrated that high temperature record incineration is just the, the really sound way to manage remediation and cleanup of all those nasty materials. Good stuff there.

[Noah Kaye, Managing Director and Senior Research at Oppenheimer & Co]

Thanks. And just to put a finer point on this, is it fair to think about kind of a 15%-20% revenue growth for the year is still the right range? Kind of your view towards that?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. We believe that's a continued path that we're seeing.

[Mike Battles, Co-CEO at Clean Harbors]

We meet regularly and we meet regularly as a team to talk about, you know, kind of ways to go faster on that. How do we and do we have the right resources? Do we have enough resources? You know, where do we go from there? That is what we are committing to today. Make no mistake, we see this as a great opportunity for long-term growth for the company.

[Noah Kaye, Managing Director and Senior Research at Oppenheimer & Co]

Nice. I wanted to ask about incineration. You know, you get the mix-adjusted incineration ASP up over 5%. You know, at the same time, you're ramping Kimball. I think that, you know, this maybe goes to a question that investors have had around, you know, the ability of, you know, this new capacity to, you know, see sufficient demand. Certainly seems like, you know, pricing off to a good start for the year. Is mid-single digits kind of the right growth rate to think about for pricing for the balance of the year? Maybe you can comment on how Kimball might have affected, you know, the discussions that you've had with, you know, some of your customers as you think about, you know, offtake for the rest of the year.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. No, we certainly believe that the mid-single digits is a good point to really continue to think about our incineration pricing. Kimball did have an effect overall as we started up that plant. We said in our script that we processed over 5,000 tons. And our goal this year is to process over 28,000 tons. We very much see that in reach. The team's done a great job working through some difficult weather events in January as we ramped up. The momentum coming through March and into April is very strong. Our network of drums is very strong. The ramp-up, you know, we have a real solid outlook at being able to potentially exceed some of our early looks at what we laid out for our plan there.

[Mike Battles, Co-CEO at Clean Harbors]

You know, some of the concerns you had, the investment community had around, you know, overcapacity is clearly not the case. I mean, we see that the plant's running well. It's got plenty of waste in the network. And as Eric said, you know, March was a great drum month, and April beat that. April's, so far. We are really excited about, you know, the prospects of that plant and incineration, pricing in general.

[Noah Kaye, Managing Director and Senior Research at Oppenheimer & Co]

All right. Thanks. I'll turn it over.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Tom.

[Mike Battles, Co-CEO at Clean Harbors]

Thanks, Tom.

[Operator]

Thank you. Our next question comes from the line of Larry Solow with CJS Securities. Please proceed with your question.

[Larry Solow, Managing Director at CJS Securities]

Great. Good morning, folks. I guess just, just following up on the, on the guidance and the outlook. It feels like you, you know, you haven't really changed guidance, much tweaks here and there, but a little bit industrial, a little bit slower, and then obviously a little bit of direct tariff expenses. Not building in, I guess my concern is, is there any concern as the year goes on? Obviously, most of your work is domestic, but a lot of your customers are international. Do you, do you fear that a recession or a considerable slowdown in the economy or a further slowdown could impact the outlook as we, you know, as we, as the quarters progress? I guess waste volumes are a little bit of a laggard, right? Just any thoughts on, on that, you know, as we head out?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, Larry, I'll take a first shot at that one. We, what we're trying to do right now when some of our customers are talking about, you know, tariffs and what the impacts could have on their business is we're trying to get closer to our key customers and expand our overall wallet with them and grow within those key customers to drive Industrial Services, Field Services. We think there's great opportunity for the company to continue to grow with large customers and continue to work through that based on our presence, our capabilities, our network, our redundancy of our disposal network. All those are positive things of how we can continue to grow with those customers.

[Mike Battles, Co-CEO at Clean Harbors]

Hey, Larry, you know, one thing that we've talked about quite a bit, this is Mike, one we talked about quite a bit is reshoring. And reshoring is happening. I think that is, if there's concerns around tariffs and other things like that, that's a winner for us. We certainly see that kind of in our pipeline and in our network. As we talk to these larger customers, as Eric said, also if there's pressure on, maybe there's vendor consolidation and we're the largest player in all the end markets that we operate in. I think that's a great opportunity for us to, as Eric said, get more share of wallet.

[Mike Battles, Co-CEO at Clean Harbors]

You know, the last thing I'd say around it is that when you look at, you know, recessions, and if there is a recession, I don't think there is one coming. If there is one coming, and you look at the stock performance of the company over any recession, and one of our sell-side analysts did a really interesting analysis around this going back 20 years and looking at performance of the stock in these recessionary times, they all did, we all did great. We came out, we came, us and the industry came out the other side terrific. That is really just a testament to the fact that, you know, we are, as Eric said earlier, recession resistant. I feel I really believe that.

[Mike Battles, Co-CEO at Clean Harbors]

I think that, you know, we're very nimble and we're very aggressive in cost controls and others if we need to go down that path.

[Larry Solow, Managing Director at CJS Securities]

Right. No, no, that's all fair. I appreciate all that color. Just on environmental, I know you don't break exact price volume down in guidance, but incinerator pricing sounds like it's going up mid-single. Is it fair to say sort of the mid-single digit overall growth in environmental is maybe a little bit more favored pricing and a little bit of volume growth? Is that a kind of a good way to break that out on an overall basis?

[Eric Dugas, CFO at Clean Harbors]

Yeah, Larry, it's Eric Dugas here. I think that's fair. Certainly in Q1 because of some of the tough weather at the beginning of the quarter, certainly price is playing a little bit greater piece in that logarithm. I think as we move throughout the year, kind of built into our guide is almost kind of a 50/50 mix between those two.

[Eric Dugas, CFO at Clean Harbors]

If I could just squeeze one more, Kimball ramping sounds like pretty much in line. Fair to say that was probably a little bit dilutive or maybe just modestly positive on the earnings side? Anything you're learning from the ramp, Kimball versus El Dorado from a few years ago? Thanks.

[Eric Dugas, CFO at Clean Harbors]

I mean, I'll address the first part of that, Larry, in terms of its contribution in the first quarter. And it did pretty much exactly as we thought. I think we had foreshadowed that it probably wouldn't contribute much in earnings in Q1 and then ramp up throughout the year. That's exactly how it's played out. I'll let you guys comment. Kind of lessons learned, I think.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, Larry, I'll talk to the ramp-up, compared to El Dorado. This team has done an awesome job at bringing this plant online. We continue to ramp up faster than what we did with El Dorado when that unit came online. The design has been proven. We worked through a lot of shakedown issues, despite the weather. I can't talk enough about how great the team did. We are really excited about how it's run coming out of the gates here for us.

[Larry Solow, Managing Director at CJS Securities]

Great. Thank you. I appreciate it all.

[Eric Dugas, CFO at Clean Harbors]

Thanks, Larry.

[Operator]

Thank you. Our next question comes from the line of David Manthey with Baird. Please proceed with your question.

[David Manthey, Senior Research at Baird]

Thank you. Good morning, guys. In your comment about weather impacting multiple areas of your business, I'm wondering if you could just talk about the key areas of variability. And then related to that, do those revenues catch up in subsequent periods, or are they just gone forever?

[Mike Battles, Co-CEO at Clean Harbors]

I would start, David, by saying that, you know, whether it's cold every winter, we kind of get that. But, you know, January and February were really very poor. And us and other people in similar industries have said that kind of publicly. You know, some parts of our business we can recover. But when our customers are shut down, we're shut down. They're not producing waste. Then there's nothing to go pick up. Those are kind of lost forever. I am of the view that, you know, February is better than January, March is better than February, April's gonna be better than March. I really feel like it was isolated to weather issues.

[Mike Battles, Co-CEO at Clean Harbors]

I, you know, I think that us and others in the industry thought that perhaps this was a concern, but it really was related to weather. We talked about, you know, snow in New Orleans and all kinds of interesting things like that. I do believe that that was a very temporary thing. As you look at the back half of the year, you know, we're gonna get some of that back. A lost day's a lost day.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, David, I'd just add a couple of comments to that. Our quarter-over-quarter, our deferred inventory increased. We built a little bit of a backlog of inventory. What's great about our network, we're starting Kimball up today and how we're running logistics and transportation. We have the opportunity now to improve and get those services back as we get into the second quarter here and into the third quarter. The network is moving better than ever to be able to deal with those unforeseen weather events, those extreme weather events that Mike spoke about that we all saw in January and into February.

[David Manthey, Senior Research at Baird]

Okay. I'm hearing you say that some of it's related to production. Some of it might be related to inefficiencies in transportation because of weather. It sounds like that's what you're saying.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, the impacts of being able to service the customers due to those extreme weather events. All that waste needs to be moved and has timeframes set against it. We'll get it caught up.

[David Manthey, Senior Research at Baird]

Got it. Okay. And then, quick one on PFAS, allowable contaminant levels. If the number goes from four parts per trillion to something higher, even parts per billion, that wouldn't be a significant change in your prospects relative to PFAS, would it?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

No, we don't think so at all. In fact, what we've really said all along here is that we are seeing customers not really react around a contaminant level, but knowing any contamination of PFAS, that they're acting. They're beginning to work with us as our pipeline has been growing on making sure that they remediate PFAS or deal with treatment of PFAS and drinking water and industrial water. That really is relatively good. We don't see that as a direct impact at all to how we would service our customers.

[Mike Battles, Co-CEO at Clean Harbors]

You know, Dave, we like the news release that came out by the EPA talking about, you know, getting updated in guidance every year. I mean, that's been a gate to our gate to some acceleration of growth. The fact that Zeldin and the administration is very supportive of PFAS remediation, and he's, as Eric said, he's gonna put a leader of PFAS waking up every day thinking about how to remediate PFAS, is really kind of music to our ears.

[David Manthey, Senior Research at Baird]

Yep. Definitely sounds positive. All right, guys. Thank you.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, David.

[Operator]

Thank you. Our next question comes from the line of James Ricchiuti with Needham & Company. Please proceed with your question.

[James Ricchiuti, Analyst at Needham & Company]

Hi, thanks. Good morning. I know, you know, from the standpoint of the economy, you guys still feel things are pretty firm. I'm just wondering, if we are going into a slower patch, what does that do to the M&A pipeline? Maybe if you could just talk to what you're seeing out there, just in the current environment.

[Mike Battles, Co-CEO at Clean Harbors]

Hey, David, this is Mike. I'll start. Eric can certainly chime in. You know, the way I see it is that valuations are still pretty high for these valuable assets, these permanent related facilities. The valuations for assets are still high. As Eric Dugas said in his prepared remarks, you know, we have a very strong balance sheet, and we have a network of assets. We can leverage those assets to drive synergies, both from a cost standpoint and a cross-sell initiative to drive value to make these deals work. We are excited about the pipeline of deals. We have not seen the deals slow up or speed up. It is still the same, still a lot of assets to look at. We have been very busy in that area. We want to be very selective.

[Mike Battles, Co-CEO at Clean Harbors]

We want to make financial sense, have to make strategic sense, have to make cultural sense. It all has to work. If we get to those points and we look at a lot of assets, you know, we will be aggressive in the marketplace because we do feel like, you know, as you know, Jim, you have followed us for many years. You know, when things are tough, that is a great opportunity for us to find value. We have been able to capitalize on that and be a little contrarian. That has been the basis of the company.

[James Ricchiuti, Analyst at Needham & Company]

Got it. Just moving, another follow-up question as it relates to Kimball. Sounds like you're satisfied with how it's progressing, notwithstanding some weather. What can you say, you guys have talked in the past about the opportunity with Captives as it relates to Kimball. What are you seeing there? Any new developments to talk about?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, we have continued active discussions with multiple Captives and helping to evaluate their cost structure. As we've said multiple times in the past, every Captive, every company that owns a Captive out there is part of our customer base. We service them during shutdowns and other waste streams that their incinerator can't handle. We also do see today a continued opportunity that people are evaluating their cost structure. Knowing that we have such a great network of service branches to be able to make sure that their waste volumes are moved on time should they contemplate a Captive, we can provide that as a company. That is unique to us in the industry. It continues to be a great opportunity. Yes, the pipeline and opportunities look strong for us.

[James Ricchiuti, Analyst at Needham & Company]

How important is that opportunity in relation to how you see Kimball scaling next year?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

It's not, we did not base our ramp-up, the growth of the company at all, on additional Captive closures. As we've talked about how we'll go from 28,000 tons to ramp up over the next couple of three years, Captive closures was not contemplated at all in that volume, that we're gonna take in and manage as a company.

[Eric Dugas, CFO at Clean Harbors]

Yeah, as you talked about it in our investor presentation, that's all upside to any models.

[James Ricchiuti, Analyst at Needham & Company]

Good. Thank you.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Eric Dugas, CFO at Clean Harbors]

Thanks, Jim.

[Operator]

Thank you. Our next question comes from the line of James Schumm with TD Cowen. Please proceed with your question.

[James Schumm, Analyst at TD Cowen]

Hey, good morning, guys. Congrats on reiterating guidance in a tough environment. Can you talk a little bit about base oil pricing over the past month or so given the weakness in oil prices?

[Mike Battles, Co-CEO at Clean Harbors]

Yeah. Dave, this is Mike. I'll answer. I'll take a shot at this. You know, the base oil pricing has been under pressure, lower than our expectations. What really happened was that the team, as I said in my remarks, the team did an excellent job of driving kind of the UMO collection cost and, as a charge for oil versus a pay for oil, where we were earlier in 2024. That change, and as I said in my remarks, we doubled the price that we were charging from where we ended in December to where we ended in March, is just a terrific offset to lower base oil pricing. I think we were very aggressive. We talked, we had issued a press release back in November, if you recall, and really drove that pricing.

[Mike Battles, Co-CEO at Clean Harbors]

As I said in my remarks, you know, we closed one of our re-refineries, not just to close a high-cost plant, which it was, but also to limit the need for the collection of used motor oil to drive our teams to make sure that we're getting the price that we need to hit our targets. You know, base oil price can go up. It can go down. We are assuming that oil prices can deteriorate a bit in the guide.

[James Schumm, Analyst at TD Cowen]

Okay. The guidance contemplated some of that. Okay. I, you know, I'm just, you know, because I know that there's a lag from when you collect to when you refine it and sell it. I was thinking that maybe you'd have a hard time not lowering guidance in this environment. Maybe could you talk about the SKSS inventories? Where were they last quarter? Where are they now? How is that, how is that looking?

[Eric Dugas, CFO at Clean Harbors]

Yeah, Jim, Eric Dugas here. When you think about kind of the inventory values, you know, your comment a moment ago around the lag, you know, there is probably a quarter, quarter and a half a lag between, you know, when we're, when we're talking about what we used to pay for oil and now we're charging for oil. What that creates is as we close out Q1 here, our inventory costs are lower than they've been in historical periods. You know, that gives us a good feeling about Q2. In our guide, we do have, you know, profitability in the business increasing a bit in Q2. Some of that is because of the lower cost of our base oil inventories. That is really where you see that lag come through kind of on the cost side.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, Jim, I just reiterate to you that we all feel pretty comfortable about continuing to focus on that 140 as our guide this year. Team has done an awesome job at turning around our used motor oil collections to a high CFO rate, as Michael talked about. We feel pretty good about where we are, what we've done, how we're operating, how we've managed costs in the business, even with some continued anticipated fluctuations in base oil pricing. We're in a good spot, we think.

[Eric Dugas, CFO at Clean Harbors]

Yeah, we think we've turned the corner, to be fair.

[James Schumm, Analyst at TD Cowen]

Okay. That's great. And then just lastly for me, 'cause I get this question a lot, but, yeah, I know in the past, you were never interested in selling this business because there'd be some dyssynergies, if that's a word. I'm curious if your thinking there has changed at all or what would have to occur for that to happen or is that even possible?

[Mike Battles, Co-CEO at Clean Harbors]

Yeah. You know, obviously, we always think about all these types of things and what the best interests of our shareholders are. We are always thinking about, you know, kind of what we do with all our assets, whether, whatever business it is. We do that from time to time related to the SKSS business. The challenge in that business is that, as I said publicly, is that many of the locations are shared locations with our SK branch business, which, as Eric said in his remarks, was having, continued to have a terrific year and had a terrific few years as far as an industry leader.

[Mike Battles, Co-CEO at Clean Harbors]

Our concern has always been, even if we get through the exercise of separating the business, you know, from Harbors and try to sell it or do something with it, there is a risk there that the buyer of that business would wanna create a competitor to our SK branch business. We would not be able to offer a bundled offering that we do today like some of our competitors do. Not only is it a competitive disadvantage to the SK branch business, but perhaps we could create a competitor to our SK branch business because obviously whoever buys that business would have to go and service our customers just like we do. Perhaps they would wanna sell, you know, similar types of services. There are a lot of reasons behind that.

[Mike Battles, Co-CEO at Clean Harbors]

We think it'd be very difficult to separate the permits. We think it'd be very difficult to separate the locations. Even if we get through all of that, I think we create not only a competitor, but then also perhaps hurt what we think is a very profitable and growing business in our SK branch business.

[James Schumm, Analyst at TD Cowen]

Right. That makes a lot of sense. Okay. Thanks, Mike. And thanks, guys, for all the color. Appreciate it.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Adam Bubes with Goldman Sachs. Please proceed with your question.

[Operator]

Hi, this is Adam Bubes on for Jerry Revich today. Good morning.

[Mike Battles, Co-CEO at Clean Harbors]

Hi.

[Adam Bubes, Vice President, Equity Research at Goldman Sachs]

Hi. Good morning. I'm wondering, in Safety-Kleen, you know, it's pretty impressive because the 1Q results are very similar to last year in a much worse base oil pricing environment. How does the charge for oil that you're flowing through right now compare to past cycles in similar base oil pricing environments? Are you seeing any changes in the competitive landscape there? Is that having an impact?

[Mike Battles, Co-CEO at Clean Harbors]

Adam, this is Mike. First of all, thank you for pointing that out. We appreciate your recognition. We've had our challenges with that business, so we appreciate you acknowledging that that is done well. You know, what I would say is that, you know, we changed tactics and were very aggressive on CFO pricing. We did that with a public announcement. We were aggressive in Q4, and we stayed aggressive in Q1. We're gonna continue to stay aggressive. I think the industry has followed, if that's your question. We do think that there's been, since we're the national player, we're the largest collector of used motor oil in the country, you know, I think that other people have recognized the fact that they're under pressure to try to manage a spread as well.

[Mike Battles, Co-CEO at Clean Harbors]

They're having to do the same thing. I see this as a, you know, we were assuming we'd lose more gallons. That's really what the surprise is for the quarter, that the collection gallons are actually up year over year. There's some M&A in there that clouds it a little bit. The level of collection gallons still being very high kind of year over year, which is a testament to the fact that we believe that the industry is kind of full of used motor oil. Pricing is there. We're gonna, we are aggressive. We're gonna remain aggressive. I'm really excited about, as Eric said, we feel good about the 140 we kind of committed to today. Nothing changes that.

[Mike Battles, Co-CEO at Clean Harbors]

As a matter of fact, I feel better than I did 90 days ago.

[Adam Bubes, Vice President, Equity Research at Goldman Sachs]

Great. And then in Environmental Services, guidance embeds an acceleration in organic growth in Q2 and then another acceleration in the back half of the year. You know, obviously, you have Kimball ramping. Weather presumably won't be a headwind. You also have some, you know, Field Services projects that were a good gu y in 2Q last year. Just wondering if you can parse out the puts and takes on the organic growth cadence in the balance of the year and any other moving pieces we should be thinking of.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Sure. Adam, Eric here. You're exactly right. As we move into kind of Q2 and Q3, the organic growth does increase from Q1 here, which, as we tried to call out, was greatly impacted by weather. You know, as we move into Q2, obviously, the pricing strategies, the great volume momentum we're seeing, we do have a headwind with those ERs in Q2. I think last year when we spoke to the street in July around Q2, we talked about roughly $24 million of larger types of ERs. That is a headwind. Making up for some of that will be just overall growth in Field Services. We opened 10 new Field Services branches this quarter. There will be some organic growth there to help offset.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

As you move into Q3, you know, again, same kind of pricing strategies, good volume. As Eric Gerstenberg mentioned a moment ago, that's where, you know, we're hoping to see some stronger turnarounds in the Industrial Services Business that'll go up against that Q3 comp last year. Q4, probably a little bit smaller just sequentially from an organic growth, but again, growth over last year. Those are the largest puts and takes. The underpinning of all that is all the great things we're doing in the businesses in Environmental Services, the Kimball ramp-up, pricing strategies, cost-cutting initiatives, all those things, introduction of some new technologies. Those are all driving the organic growth.

[James Schumm, Analyst at TD Cowen]

Great. Thanks so much.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Adam.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Our next question comes from the line of Tobey Sommer with Truist Securities. Please proceed with your question.

[Mike Battles, Co-CEO at Clean Harbors]

Tobey?

[Tobey Sommer, Managing Director at Truist Securities]

Yeah. Good morning. I wanted to ask on the labor expense side, if we do get a pickup in inflation, how do you think the company's positioned to be able to adjust pricing mid-year and respond to that to keep the margins and return profile that you're targeting?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. Tobey, Eric here. We will continue to outpace, through pricing initiatives, our increased costs due to labor. I would say that on the labor side, the team's done a great job at continuing to reduce our turnover in a difficult environment, strong employee base. We will no doubt work through increases in labor by price adjustments in the market.

[Mike Battles, Co-CEO at Clean Harbors]

Yeah. Just to follow along what Eric just said, you know, our voluntary turnover for our direct labor, our cost of goods sold labor, is the lowest it's been in over three years. It really is a testament to all the things, all the investments we've been making in our organization and our people. That allows us to be, you know, aggressive in how we price and our customer service. It really has a virtuous cycle that we're in right now.

[Operator]

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Davis Baynton with BMO Capital Markets. Please proceed with your question.

[Davis Baynton, Senior Equity Research Associate at BMO Capital Markets]

Hi. Good morning. This is Davis on for Devin Dodge. Just a quick question for me. I'm just wondering if there's an update or any commentary you can give on how the ramp-up of Group 3 oil processing is going.

[Mike Battles, Co-CEO at Clean Harbors]

Yeah. Yeah, Davis, I can answer that question. It is, you know, it's, it's growing. It's gonna grow up, you know, two to three million more gallons this year than last year. And it, it's a slow ramp. I mean, we wanna make sure our plant, you know, works well. And, you know, collection logistics is always a challenge. Make sure we're getting all the Group 3 that we need to fill the plant, and move forward. That goes along kind of unabated here in 2025.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Davis, probably just to add to that, our Castrol partnership, they've really expressed a lot of interest in helping to grow and manage the Group 3 that we're producing under the Castrol brand. There is good solid opportunity there.

[Mike Battles, Co-CEO at Clean Harbors]

Good point.

[Davis Baynton, Senior Equity Research Associate at BMO Capital Markets]

Okay. Great. Thanks. I'll turn it over.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Gerstenberg for any final comments.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you. Thank everyone for joining us today. Next week, management will be at the WasteExpo in Las Vegas and participating at Stifel's Investor Summit there, as well as the virtual Oppenheimer Industrial Growth Conference later in the week. We also have several conferences lined up in Boston and in New York in early June. Based on that active calendar, we look forward to seeing some of you at those events. Have a great rest of your week. Please stay safe.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Mike Battles, Co-CEO
• Jim Buckley, SVP of Investor Relations
• Eric Dugas, CFO

Analysts

• David Manthey, Senior Research at Baird
• Davis Baynton, Senior Equity Research Associate at BMO Capital Markets
• Noah Kaye, Managing Director and Senior Research at Oppenheimer & Co
• Tyler Brown, Associate Vice President at Raymond James
• Adam Bubes, Vice President, Equity Research at Goldman Sachs
• Tobey Sommer, Managing Director at Truist Securities
• James Schumm, Analyst at TD Cowen
• Larry Solow, Managing Director at CJS Securities
• Eric Gerstenberg, Co-CEO at Clean Harbors
• James Ricchiuti, Analyst at Needham & Company