Clean Harbors at Waste Expo: Strategic Growth in Environmental Services

On Monday, 05 May 2025, Clean Harbors (NYSE:CLH) participated in the Waste Expo conference, offering insights into its strategic initiatives and financial performance. The company highlighted its resilience against economic cycles and growth in the Environmental Services segment, despite challenges in industrial services due to low crude oil prices.

Key Takeaways

- Clean Harbors reported 12 consecutive quarters of EBITDA margin growth in Environmental Services.

- The company is expanding its PFAS-related services, with expected revenue growth of 10% to 20% this year.

- A new incinerator in Kimball is performing well, and the company sees a tight market for incineration capacity.

- Clean Harbors is shifting its focus in Sustainable Solutions from volume to profitability.

- The Environmental Protection Agency (EPA) supports the company’s initiatives in cleaning up military bases and airfields.

Financial Results

- Environmental Services Margins:

- Improved by 500 basis points over the last 6-8 years.

- Achieved 12 straight quarters of year-over-year EBITDA margin growth.

- Industrial Services:

- Revenue declined by 10% year-over-year in Q1, impacted by low crude oil prices.

- PFAS Revenue:

- Currently between $80 million and $100 million annually, with expectations to grow by 10% to 20% this year.

- Revenue has tripled over the past five years from $25 million.

- Sustainable Solutions:

- Targeted $140 million in EBITDA, surpassing Q1 expectations by $8 million.

Operational Updates

- Incineration Capacity:

- The new Kimball incinerator, opened in December, is meeting expectations.

- Anticipated absorption of new capacity due to complex waste streams and reshoring.

- Emergency Response Services:

- Conducted approximately 5,000 emergency response services.

- PFAS Solutions:

- Launched a "total PFAS solution" offering a full suite of services.

- The EPA is increasing testing frequency for PFAS, now once a year.

- Sustainable Solutions:

- Closed a marginally profitable plant in California.

- Emphasizing strategic pricing over volume.

Future Outlook

- Environmental Services:

- Aims to address geographical gaps and enhance asset utilization.

- Focus on strategic acquisitions to bolster existing infrastructure.

- PFAS:

- Anticipates continued demand for PFAS remediation driven by regulatory changes.

- Sustainable Solutions:

- Optimistic about improving profitability through strategic pricing and volume management.

Q&A Highlights

- Co-CEO Mike Battles noted a strong April in drum counts, indicating positive business trends.

- CFO Eric Dugas emphasized the company’s unique position in offering a comprehensive PFAS solution at scale.

- Battles mentioned a strategic shift in mindset to prioritize profitability over plant capacity in Sustainable Solutions.

For a detailed account, please refer to the full transcript below.

Full transcript - Waste Expo:

Michael, Interviewer, Stifel: So Mike Battles, who’s Co CEO and Eric Dugas, who’s Chief Financial Officer, thanks for being up here. You’re such a smart aleck, wearing my bow tie.

Mike Battles, Co CEO, Clean Harbors: It looks very good. Well, thanks for having us.

Michael, Interviewer, Stifel: Can you actually tie it?

Mike Battles, Co CEO, Clean Harbors: Yes. I tried to go on mustache for taking a decade.

Michael, Interviewer, Stifel: Yes. All right. So Clean Harbors is the largest hazardous industrial waste service company in The United States, North America actually, just framing that. And what you’re seeing over the last six, seven years is the waste industry is becoming far more integrated in both ends of solid waste all the way through industrial, medical, hazardous. But you’re a pure play in hazardous with a little bit of medical in that thrown in there because of your incinerators.

I want to start with the marketplace, if we have a stock market angle on this for a second, looks at Clean Harvest different and they you’re an industrial waste business. So they immediately go, well, there’s more cyclicality. How do you feel about your macroeconomic outlook today sitting here in May versus when you started the year? And because a lot’s happened.

Mike Battles, Co CEO, Clean Harbors: Yes. So Michael, thanks for having us. Thanks for the Stifel team to have us here today at the Investor Summit. It’s really quite an honor to be here. I think that if you looked at January and February, and so we would we’d have our operating reviews, and they were saying weather is terrible.

And snowing in New Orleans and all what you kind of hear and read about. And so we were like, okay, but maybe it gets better. But we were concerned that this was bigger than just weather. It wasn’t weather, it was weather plus plus. But February was better than January and March was better than February and April is now going to be better than March.

So I think that I think it really was weather. And do think that our pipeline remains very strong. I think that the growth is solid. And I don’t think that I don’t see today certainly You’re not seeing

Michael, Interviewer, Stifel: the customer base pull their foot off of the accelerator at this juncture?

Mike Battles, Co CEO, Clean Harbors: Not at all. As a matter of fact, we had a as we talked about in our earnings call last week, we had kind of a great April from a drum count standpoint. And so that’s really kind of a good indicator, not just of what goes into our landfill, but that feeds our whole waste network. But that was actually a pretty good start as you look at some of the data points in kind of early April.

Michael, Interviewer, Stifel: Okay. So now let’s talk about the business. So Clean Irvers is structurally two business. You’ve Environmental Services and then you have the used oil, Safety, Clean, Sustainable Solutions. We’re going to tackle the Environmental Solutions business.

And in my old hat, I would have thought of as a fixed facility, treatment storage disposal, of that collected, processed at final disposal. And then there was a lot of services side that may have driven the disposal piece. I to break that up. I want to talk about the two pieces. But overall, you’ve improved the margins of that segment 500 basis points over the last six, eight years.

As you sit here today, how much of that do you think is absolutely structural versus it’s helped by healthy underlying business climate?

Eric Dugas, Chief Financial Officer, Clean Harbors: Yes. I’ll take that, Michael. And I think it’s really both. So when you think about the things that have impacted our margins over the last six, eight years, think you probably got to go back to our new incinerator in El Dorado, Arkansas. I think that really was kind of a jumping off point giving us more volume in a very difficult to replicate high margin asset.

And then when you think about some of the other things that have happened, obviously the arrangement we got into with three ms closing their captive, I think that was another catalyst to drive more volumes through the network. And then I think internally we’ve done a lot of great things around pricing. I think we’re much better from an Intel perspective and a competition perspective knowing what people are doing, looking at the services we’re delivering across the board to our customers and really driving margins from that perspective. Certainly in the high inflationary times that we saw coming out of COVID, pricing allowed us to really grow through that and continue to increase our margins. I guess the last thing I’d say too though is just utilization of all of our assets and by driving more of the services.

We are linking sales specialists to our general account managers. That’s driving more volume into the network and we’re using all of our very hard to permit very accretive assets throughout the network to deliver service. So I think it’s really

Mike Battles, Co CEO, Clean Harbors: more Okay.

Michael, Interviewer, Stifel: So what I think I’m hearing though is that the macro is not a macroeconomic, it was macro choices. That’s the repositioning of volume. Then there’s a better operating leverage, just ran the business better. So what I’m hearing is you could be confident that the majority of that 500,000,000 is really structural.

Eric Dugas, Chief Financial Officer, Clean Harbors: For the most part. I think said Because we’ve done a lot of great work at Clean Harbors.

Michael, Interviewer, Stifel: Yes. I mean, we I mean, it’s inevitable you’ll have an economic cycle. And your business is on the margin a little more sensitive to that than a pure solid waste play, but it’s not truly cyclical. But what I’m hearing is that there’s not a you’re not waking up going half of that margin is at risk in a cycle.

Mike Battles, Co CEO, Clean Harbors: Absolutely. Now I’d say we’re not recession proof over recession resistant. I’d also say that we’ve gone 12 straight quarters of year over year on the Environmental Services business since we brought it up, 12 straight quarters of year over year EBITDA margin growth. So that’s, in my mind, a consistent story and it hasn’t been all smooth for the past three years what we’re talking about. And I do think that tells you that, that I think people who followed us for many years see Clean Harbors as very cyclical, because of our exposure to oil is going back ten, fifteen years ago.

That’s a much smaller piece of the puzzle these days. Yes, the oilfield. That’s a very small piece of the puzzle these days. It’s $20,000,000 of revenue. And so I think that we are more like the solid waste than we ever have been.

And I think that shows in our ability to grow margins consistently regardless of the cycle. Yes, you know, Michael, industrial production has been kind of nah for years, yet we’ve still been able to grow. Okay.

Michael, Interviewer, Stifel: Lots of strong in derm and the media about tariffs and what have you and everybody is saying it’s going to trigger recession, this, that and another. But other than a business making and the opportunity, I’m going to take advantage of and pass a price increase through, has it actually affected volume?

Eric Dugas, Chief Financial Officer, Clean Harbors: No, as Mike was saying earlier, we haven’t seen that yet.

Michael, Interviewer, Stifel: Your services demands because that tends to be

Eric Dugas, Chief Financial Officer, Clean Harbors: a really discretionary. Services is still strong. So we talked about last week when we did earnings, you think about our field services business, still did about 5,000 emergency response services. So really kind of on the same pace that we were last year, maybe a little bit more in terms of pure kind of emergency response. So there’s pockets here and there, but there’s also areas of growth that we’re seeing.

Michael, Interviewer, Stifel: Yes. So in part of that conversation, people forget there’s been this reassuring thing going on for a while. We’re adding three four hundred thousand new jobs a year from that. It looks like that pace is about the same in 2025.

Mike Battles, Co CEO, Clean Harbors: I see no signs slowing down. I would say though that it has nothing to do really with tariffs. But the low price of crude has put pressure on refiners, which has put pressure on our industrial services business. If you think about kind of where we were last year, Michael, and kind of where we were in Q1, I’d say that’s one area where that’s

Michael, Interviewer, Stifel: discretionary maintenance choices of To

Mike Battles, Co CEO, Clean Harbors: a point. To a point. Point.

Michael, Interviewer, Stifel: Yes, you can’t string it out forever. That’s all you’re playing out.

Mike Battles, Co CEO, Clean Harbors: That’s right. So I think that’s kind of one area where you think about what’s impacting you. Well, low prices have put a lot of pressure on our customers. Our Industrial Services business is a big part

Michael, Interviewer, Stifel: of that, and that’s been under pressure. So if we start living in a $50 to $70 range instead of $70 to 100 does the customer rightsize? Or is it just more of a mindset?

Mike Battles, Co CEO, Clean Harbors: I mean I think you can’t postpone these forever. And as you know, you get an upset plant, upset that cost you tens of millions, not millions. So I think that’s the balancing act they’re playing. And so we’re working with our customers to And they’re

Michael, Interviewer, Stifel: they’re trying to play out that they think maybe we’ll get a lift in the price here sooner than later and therefore

Mike Battles, Co CEO, Clean Harbors: I guess my view on it is that our turnaround schedule looks pretty bullish, pretty good. So I’m hopeful that we kind of get back, and that Industrial Services for the year is slightly positive. We had a tough start to the year, we’re down 10% revenue growth in Q1 year over year, so that was tough. How much

Michael, Interviewer, Stifel: of that was weather?

Mike Battles, Co CEO, Clean Harbors: I think some of it was weather. I think some of it was slowdown.

Michael, Interviewer, Stifel: Okay. Okay. Capacity, disposal capacity, which is predominantly a conversation about incineration. The reality is there’s probably ample amount of landfill capacity. You’re a big landfill player.

Public is a big lamp. But the incineration capacity has been one that I think in some levels actually surprises players in the market, not necessarily you as a company, but the overall marketplace. And it absolutely seems to have surprised the regulators that as the composition of the waste stream has become more and more complicated, more high hazard, the ability to process that through incineration has become more constrained. Where do we stand in that marketplace today? Because you’ve added capacity now twice in the last six years.

You have another major competitor that’s essentially going to open up new capacity sometime in ’twenty five. Where is that capacity issue around that segment of the disposal market?

Eric Dugas, Chief Financial Officer, Clean Harbors: Yes. I mean, I think as you mentioned, we’ve opened some new capacity here with our new Kimball incinerator, opened it up in December. I’d say so far kind of our expectations both from that plant, how many volumes we can get in and its operating has been right online. I think when you the way we look at it, when we look at the market and some of our competitors and many of our customers look at the market, I think general consensus is that this incremental capacity will be soaked up because of the complex nature of waste streams, because of some of the longer term tailwinds that we’re seeing around reshoring, around infrastructure investments. Certainly there’s a lot of captive incinerator operators out there and you would think that logic would tell you that now with additional capacity coming online they’d be interested in making a move like three ms did.

Now I don’t think we need that Michael to fill the new incinerator or to soak up the capacity. But I do think that could be a catalyst here in the next couple of years.

Mike Battles, Co CEO, Clean Harbors: Do you

Michael, Interviewer, Stifel: think we stay short though?

Mike Battles, Co CEO, Clean Harbors: I don’t see that. I think that there’s plenty of opportunity there. I think we’re open for business. Just so I know there’s some customers here in the room. We’re certainly open for business and we’re happy.

We’re welcome kind of all your waste streams that you provide to us. But I do think that just so we’re on the same page, incineration pricing has never gone backwards. So I mean, I don’t see that happening no matter what happens with Gum Springs and when our competitors open up their new plant. I’m of the view that this is a constrained industry and it needs to be priced accordingly.

Michael, Interviewer, Stifel: Yes. So the generator is still going to seek storage capacity expansions then because the marketplace, even with the new capacity coming on, is still tight.

Mike Battles, Co CEO, Clean Harbors: Yes. Mean I think that’s a good ask for them. Yes. like everything else, you can delay the clock, you can’t stop

Michael, Interviewer, Stifel: was it that motivated three ms? Did you all help get them to make that decision? Or do they come to that conclusion on their own?

Mike Battles, Co CEO, Clean Harbors: Yes. I think that three ms had problems with their incinerator, with their capacity, and they were getting fined and they’re looking for a solution. It came down to math though. And we had to prove to them and prove to ourselves that we could do that work for them at a way cheaper than they could do themselves. And so that was really the math.

Obviously, wanted to get that plant closed. They were having problems with they keep getting dinged by regulators. So it’s kind of all worked together with a perfect storm. They could get a good win. They can close that incinerator and we can become a great partner with them.

And they’ve been it’s been a true win win. They’ve been a great reference for us as we’ve gone and talked to other potential cap. Now not as many as big as three ms, three ms was the biggest.

Michael, Interviewer, Stifel: Yes, that’s I mean they were 40,000 tons. Right.

Mike Battles, Co CEO, Clean Harbors: So I think my point being though is that that relationship has done really well. I mean, and we’ve been a win win for both parties and we’ve been using them as a reference with others.

Michael, Interviewer, Stifel: So the captive insurance incinerator market is roughly 1,000,000 tons, roughly. Not all of that is applicable to your infrastructure.

Mike Battles, Co CEO, Clean Harbors: That’s right.

Michael, Interviewer, Stifel: What is it a couple of hundred thousand potentially if it were it would fit you as far as waste streams categories?

Mike Battles, Co CEO, Clean Harbors: It’s tough to say for sure. We’d always say that there’s an equal amount of what we have capacity in the network. There’s another equal amount out there in the marketplace. So let’s say we have 549,000 tons of capacity, maybe there’s another 500,000 tons out there.

Michael, Interviewer, Stifel: Well, now you’re at a higher number, right?

Mike Battles, Co CEO, Clean Harbors: Well, with Kimball opening up, right?

Michael, Interviewer, Stifel: You got to open Kimball. Okay. So going from So you could so there’s an opportunity that not all of that’s going to close. I mean Well, but some portion would. So there’s But I

Mike Battles, Co CEO, Clean Harbors: wouldn’t again, as Eric said earlier, I wouldn’t need captive to close to fill Kimball. I mean that would be helpful, but I don’t think that

Michael, Interviewer, Stifel: No, no. I

Mike Battles, Co CEO, Clean Harbors: guess that Yes. The internal model with reshoring moving waste through our network to kind of fill that thing up.

Michael, Interviewer, Stifel: But there’s a realistic prospect that 10% to 20% of that over a 10 period is likely to close, which means the point of this ask in this market remains tight. There’s a prospective here of a tight market for a while.

Mike Battles, Co CEO, Clean Harbors: I would agree with that.

Michael, Interviewer, Stifel: I think that’s the observation. And therefore guess

Mike Battles, Co CEO, Clean Harbors: I wouldn’t I guess to answer the broader question, I’m not worried that when a competitor opens up his their plant and where our plant is running at a higher capacity than it is this year, there’s going to be concern around pricing pressure, which is what I hear from some investors.

Michael, Interviewer, Stifel: Okay. You did a lot of M and A on the services side, taking yourself from high teens, low 20s percent share to much bigger. How has that changed that business model? Because this was that was that’s a discretionary action within limits, those services, because they tend to be tied to maintenance cycles. Your turnarounds were an example of that.

How has the M and A helped make that a more stable, a little more predictable business that can absorb end market variability on what’s happening?

Mike Battles, Co CEO, Clean Harbors: I just think it’s a much bigger business than it was when we made a large acquisition in 2021 with HPC Industrial. And I think that’s allowed us to be a little more price disciplined in the marketplace since we’re such a larger share now and to survive the bumps that we’re talking about here.

Michael, Interviewer, Stifel: And introduce more end markets. You diversify the end markets broadly.

Mike Battles, Co CEO, Clean Harbors: Of course. We provide kind of a bigger share of wallet to our customers, which I think has always been helpful. And these customers are all the same chemical companies that are going picking up their hazardous waste. Right, right. Okay.

Michael, Interviewer, Stifel: When you think about M and A as part of a growth strategy in the ES segment, is this more of a now fill around the edges? Or is there something big out there that you should do?

Eric Dugas, Chief Financial Officer, Clean Harbors: Yes. I mean, I think when we think about on the ES side, it’s looking at there’s probably a few geographies out there that we could fill in. I think it’s looking at areas where we can continue to increase our capabilities around certain of our the nature of our assets. So obviously, we have a new incinerator, but there’s lots of other disposal activities that we undertake, and it’s maybe plugging in some of those hard to replicate permitted sites in some other areas, whether that be wastewater or something like that. But ultimately, on the ES side, Michael, we’re really looking for things that can feed the beast.

You’ve heard us say that before, but really take in more volumes, leverage our fixed costs and leverage our strong infrastructure. Those are the types of things we’re looking for. And then if there’s adjacencies there that can provide like a really nice platform for further growth, we’ll look at those things as well.

Michael, Interviewer, Stifel: So I’ve seen the map. I’ve seen it dynamically in the office. And when you see all the dots in it, all of a sudden you lose sight of the country because it just absorbs the whole thing. But manufacturing and industrial production and industrial activity in this country has changed dramatically. They’ve engineered out a lot of things as far as waste streams and the like.

How have you continually revisited your portfolio and said, okay, well, was an asset that worked really brilliantly in the ’90s, loses its relevance in the 2000s? Where are we in that

Mike Battles, Co CEO, Clean Harbors: like cycle I think a perfect example of that is retail. I mean retail went that was a rounding error that it was, let’s say, five years ago, Michael, and now it’s 3% to 4% of our overall revenue, which is on $6,000,000,000 is a pretty big number. And that’s retail just going after like containerized waste, bringing into our network, not all of it goes into incineration or into our end disposal, but that retail business has been going for us. And that’s where because you’re right, ultimately things get engineered out over some period of time. But at the same time, there’s more waste streams that get and the regulators never stop.

And they’re going after these large retailers around putting lithium batteries in the dumpster, if you will.

Michael, Interviewer, Stifel: And so

Mike Battles, Co CEO, Clean Harbors: that type of work has been a big win us.

Michael, Interviewer, Stifel: Okay. And when you think of the complexity of the waste stream, I got to imagine if I looked at waste categories between the four characteristics and the listed waste and what was in the actual manifest in 1990. And what I’m looking at in those manifests in 2025, there’s a huge difference in those what those waste streams are.

Mike Battles, Co CEO, Clean Harbors: I think they’re much more complex,

Michael, Interviewer, Stifel: to And they’re only getting more complex is a fair observation.

Mike Battles, Co CEO, Clean Harbors: Hence the need for these for our plans to be MACH2 compliant to be kind of up to the latest standards to kind of situate kind of the nasty of the nasty. That’s a technical Okay.

Michael, Interviewer, Stifel: PFAS, sure. I’m still a believer that PFAS from a stock market standpoint is a very investable thesis. Sadly, the market got ahead I think got ahead of itself in the expectation of the win. But where are you as a company in a PFAS journey? Yes.

Eric Dugas, Chief Financial Officer, Clean Harbors: I mean, think we’re definitely in the early innings there. But what I would say Michael and I think everybody is to your point. I think it’s evolving and it’s going to have a really long tail to it. I mean Mike and I were even sharing some e mails as early as yesterday about PCBs and we’re still collecting PCBs and when did the rules change around those. So I think it’s got a very long tail.

We as an organization, I mean, we introduced our total PFAS solution about a year ago this time, which really is a complete suite of services that we can provide to folks from the initial testing upfront right on through remediation, collection and ultimate disposal. And we believe we’re really the only company that can provide that full suite of services at scale. If you think about revenue levels, we’ve mentioned 80,000,000 to $100,000,000 is what we did last year. I give a range because there’s some aspects of those revenues that have multiple components, but certainly PFAS is part of that. And we see that growing 10% to 15%, twenty % this year as we gain more traction.

Michael, Interviewer, Stifel: And just to put this in perspective, five years ago when I was an analyst and I did write that I thought this is an investable thesis that business was million $25,000,000 right?

Mike Battles, Co CEO, Clean Harbors: That’s right. Yes.

Michael, Interviewer, Stifel: So you tripled it in a five year period. Mean it’s the real panacea though is ultimately broad based comprehensive remediation. DoD is desperate to do this work. What’s in the way of that work happening at this point?

Mike Battles, Co CEO, Clean Harbors: Well, think if you’ve been following what the EPA and the new administrator, Lee Zeldman, has talked about, he’s an advocate. He came out last week, as you may know, with kind of hiring a PFAS leader to wake up every morning thinking about how to remediate PFAS and also in soil and water and everywhere. Also, they’re going to do more update testing once a year versus once every three years. So these types of things are winners for us. And so we feel like, so you say, well, we need more regulation.

I don’t know, think the states are very active. There’s over 61 lawsuits in the courts with over 16 different states to push PFAS along faster. So it’s not just government when they’re to come out with new regulation, it’s happening either way. And to Eric’s point, when you think about the journey of PFAS, and you talked about this earlier, we were over our skis. I mean, PCBs, for example, it took over thirteen years from the time it was designated as potentially hazardous to being it to be regulated as hazardous, thirteen years.

And then fifty years later, we’re still pulling out PFAS out the ground. We still get $15,000,000 20 million dollars of our revenue last year was from PCBs. So my point being is that it is a some investors don’t have this long of horizon, I get that. But it is a long journey, but we know that the same types of things with PCBs, same types of things, cancer and liver disease and other things happen with PFAS. And it’s at a much greater scale, So I mean that is a long term winner.

I don’t see whatever happens with regulators and Zeldin and in the administration, think this is happening kind of regardless and that 20% can grow faster. And if it’s in soil, we do it today, especially around the military. As you know, Michael, we’re a test with the EPA and the DOT at our Aragon, Utah facility. That it can prove that we can meet the highest standards of compliance. That’s coming out in late Q2, early Q3, and we’re really excited about sharing

Michael, Interviewer, Stifel: that with the So you’re doing it this is your third test Third test. Third test to manage VOCs at a level where

Mike Battles, Co CEO, Clean Harbors: That’s right. Think it’s going be we’re hopeful that it’s going to be a great kind of great answer and kind of validate. And you think about what Zeldin and the EBA, they’re trying to partner with business. Well, this is a great example of us And just for the record,

Michael, Interviewer, Stifel: you succeeded in the assured destruction on the level one, you’ve seeded it on level two. That’s right. When do they actually stop saying, okay, I keep I want you to keep testing it and say,

Mike Battles, Co CEO, Clean Harbors: we’ll prove We’re hopeful this is it and this is going to if nothing else is going to show the show companies who are polluting who are making this, there is a solution out there.

Michael, Interviewer, Stifel: There’s a form of assured destruction. That’s right. And you’re a I mean it’s a niche in a good way. Not everybody is going to take their PFAS, concentrated PFAS and come at you from an incineration standpoint. There’s a role for it because there are other disposal options in the hierarchy that makes sense.

Mike Battles, Co CEO, Clean Harbors: Sure. Yes.

Michael, Interviewer, Stifel: And you can play in all those.

Mike Battles, Co CEO, Clean Harbors: Yes. So we have permitted landfills. We have deep flow We have it all. But I think that if our customers want, moving it from one hole to another hole, I’m not sure that helps us a lot. Incineration is the solution.

Especially in high concentrations.

Michael, Interviewer, Stifel: And you can do that within the existing infrastructure and still meet all of your hazardous waste demand?

Eric Dugas, Chief Financial Officer, Clean Harbors: That’s our total PFAS solution that I mentioned Yes, right.

Michael, Interviewer, Stifel: I mean that’s part of the thing that everybody understands. I mean DoD is desperate not to have another Camp Lejeune class action lawsuit, so they really want to get on with it. I mean when you work with them where are they because they I mean we have to all remember in the summer of ’twenty three they promulgated their own disposal hierarchy. The EPA kind of worked up blah, blah, blah. But this is a whole new world politically.

Mike Battles, Co CEO, Clean Harbors: I think they’re very supportive of moving forward and cleaning up their military bases and their airfields.

Michael, Interviewer, Stifel: And they had 700 sites. They’ve gotten it down to like two seventy five. They were told to go back and retest. Where do you think we land about three hundred three fifty million Tough

Mike Battles, Co CEO, Clean Harbors: to say. Okay. I think just to put

Eric Dugas, Chief Financial Officer, Clean Harbors: a final point on it along the same lines though, when you think non DoD sites, when you think private sites, if you will, for lack of a better term, I think we’re seeing a lot of customers. I know we’re seeing a lot of customers that they find some PFAS issue and they’re looking to deal with it now to avoid future litigations. Some of the work that we’re seeing come in here regardless of whatever the regulations are people are doing the right thing now and getting ahead of it.

Michael, Interviewer, Stifel: Okay. So I saved it to the very end so we didn’t have to spend more than 5% or 6% of this conversation talking about used oil. So the opening question would be why not position that as there is a minimum level this will always produce at. And when it’s better, it’s better. And when and we’ll tell you what that is.

But it will always be X and as opposed to hopefully returning back to its $200,000,000 EBITDA business.

Mike Battles, Co CEO, Clean Harbors: Yes. So I got to take a step back, Michael, and explain to the audience a little bit about what we’re doing with our SKSS business. So we go out pick up two fifty million gallons of used motor oil at automotive dealerships and other industrial services, and we process that through nine rerefineries that we take that dirty motor oil and make base oil out of it, which is the building block of motor oil. So that process, we take that $250,000,000 make about 150,000,000 gallons of basin blended oil. And so what’s happened is that right after the pandemic, oil prices spiked and there was a credit demand for oil and our profitability because the price of the base oil that we were selling went up quite a bit.

And yet, so we were collecting and we had a $300,000,000 plus year and then over the past Profitability. And EBITDA. And over the past couple of years, it’s kind of been steadily on a drumbeat down. I think that the mindset at Clean Harbors has always been we have these great rerefineries. And to make sure that our cost per gallon is at its lowest level from a cost accounting standpoint, we have to maximize the volume.

We never want to have a plant run low because it makes the cost per gallon go up. And so that’s always been the mindset. So when we push pricing on our used motor oil collection, at some point, we lose gallons to the point where the plants couldn’t run efficiently, we’d be like, stop, stop, we have to go fill the plants and pay what we need to pay to get the plants full. And so that was the mindset since I’ve been here for thirteen years or twelve of those thirteen years. And last year, we changed the mindset.

We said, you know what, some of these plants are marginally profitable anyway, especially one in California that we closed and others that we should think about not thinking about it from keep the plants full, but let’s keep the price right of our UMO collection and let the gallons kind of fall where they may. And if that means closing a plant or two to maintain a level of profitability, well, that’s what we have to do. And so we’re trying to lock down from the canoe, that’s what we did. And we held price. And we did lose some gallons in the fall and the winter, we did lose some gallons and we were concerned.

But what’s happened now is terrific. The price has stabilized, the industry has followed, and we didn’t really lose as many gallons as we thought we’re going to lose, and we kind of changed the game a little bit. Because now what happens is that since we are the biggest player, we started acting like it. And that forced them, and we didn’t have to close the plant in California, and we shuttled back another one in the East Coast. But ultimately, we feel like we found a good place now where that’s going to drive much more a much higher level, a much more consistent level of profitability than we have in the past.

And it’s really just a different mindset.

Michael, Interviewer, Stifel: What’s that number?

Mike Battles, Co CEO, Clean Harbors: I think the 140 number we’ve given, now we beat Q1 by 8,000,000. We didn’t raise guidance for the year because once is not a pattern, it’s an So let’s have a couple, three quarters of that before we start claiming victory here. But that was a good starting point. And I think that showed we didn’t lose as many gallons. Actually, coming into April, we’re gaining some gallons back that we lost in the wintertime.

So that really is very positive for us. And we’re hopeful that we turn the corner on this and stop the drumbeat of negative. Drew, exactly what you said, keep it the same and grow from there.

Michael, Interviewer, Stifel: Okay. So a shameless plug for them actually, and they’re not a member, but I’d like to get them to be a member. So Castrol is out there and has a booth. I don’t actually know the booth number. As you come in, they’re going to be on the near wall.

That’s their partner. Everybody is in the services side. If you’re not actually using re refined oil as your underlying lubricant, you’re spending too much money. They can save you money in your total lubricant equation. And here’s the important thing to know is that base oil, you can step on that molecule an infinite number of times.

And in fact, the process basically makes it pure and pure and pure every single time. You get back to a clear liquid lubricant. You then put the additives in, which gives it a bluish hue. And you know your oil is bad because it turns black because the additive package basically bakes down. Go talk to Castrol.

You will be stunned what you could save in money. And they’re a major provider of that base oil for Castrol and then blend it and make it into That’s good plug, right? Yes.

Mike Battles, Co CEO, Clean Harbors: That’s a good plug.

Michael, Interviewer, Stifel: It was a shameless plug, sorry.

Mike Battles, Co CEO, Clean Harbors: I appreciate that.

Michael, Interviewer, Stifel: All right. We’re at the end of our time. Thanks for coming.

Mike Battles, Co CEO, Clean Harbors: I do appreciate Thank you. Thanks for having

Michael, Interviewer, Stifel: us.

Mike Battles, Co CEO, Clean Harbors: I love the

Michael, Interviewer, Stifel: bow tie.

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