us ecology, inc. q4 2015 earnings conference call/media/files/u/us... · q4 2015 earnings...

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US Ecology, Inc.Q4 2015 Earnings Conference Call

February 19, 2016

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Today’s Hosts

Jeff Feeler

Chairman & Chief Executive Officer

Eric Gerratt

Executive Vice President & Chief Financial Officer

Steve Welling

Executive Vice President of Sales and Marketing

Simon Bell

Executive Vice President of Operations – Environmental Services

Mario Romero

Executive Vice President of Operations – Field and Industrial Services

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During the course of this presentation the Company will be making forward-looking statements (as such term is defined in the PrivateSecurities Litigation Reform Act of 1995) that are based on our current expectations, beliefs and assumptions about the industry andmarkets in which US Ecology, Inc. and its subsidiaries operate. Such statements may include, but are not limited to, statements aboutthe Company's ability to integrate its acquisition of EQ—The Environmental Quality Company (EQ), expected synergies from thetransaction, projections of the financial results of the combined company and other statements that are not historical facts. Suchstatements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company todiffer materially from the results expressed or implied by such statements, including general economic and business conditions,conditions affecting the industries served by US Ecology, EQ and their respective subsidiaries, conditions affecting our customers andsuppliers, competitor responses to our products and services, the overall market acceptance of such products and services, theintegration and performance of acquisitions (including the acquisition of EQ) and other factors disclosed in the Company's periodicreports filed with the Securities and Exchange Commission. For information on other factors that could cause actual results to differmaterially from expectations, please refer to US Ecology, Inc.'s December 31, 2014 Annual Report on Form 10-K and other reports filedwith the Securities and Exchange Commission. Many of the factors that will determine the Company's future results are beyond theability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflectmanagement's views only as of the date such statements are made. The Company undertakes no obligation to revise or update anyforward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events orotherwise.

Important assumptions and other important factors that could cause actual results to differ materially from those set forth in theforward-looking information include the replacement of non-recurring event clean-up projects, a loss of a major customer, our abilityto permit and contract for timely construction of new or expanded disposal cells, our ability to renew our operating permits or leaseagreements with regulatory bodies, loss of key personnel, compliance with and changes to applicable laws, rules, or regulations,access to insurance, surety bonds and other financial assurances, a deterioration in our labor relations or labor disputes, our ability toperform under required contracts, failure to realize anticipated benefits and operational performance from acquired operations,including our acquisition of EQ Holdings, Inc. in June 2014, adverse economic or market conditions, government funding orcompetitive pressures, incidents or adverse weather conditions that could limit or suspend specific operations, access to costeffective transportation services, fluctuations in foreign currency markets, lawsuits, our willingness or ability to pay dividends,implementation of new technologies, limitations on our available cash flow as a result of our indebtedness and our ability toeffectively execute our acquisition strategy and integrate future acquisitions.

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Safe Harbor

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Highlights

Financial Review• Q4 2015

• 2015

• Financial Position, Cash Flow & Return Metrics

2016 Business Outlook

Questions & Comments

Appendix: Reconciliations

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Agenda

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• Quarter slightly above our expectations

• Divested Allstate Power Vac on November 1st

― $59 million of proceeds; used to pay down debt

• Adjusted EBITDA1 of $33.0 million, up 6% from Q4-14

― Excluding Business Development and Allstate, Pro

Forma Adjusted EBITDA was $32.6 million, up 10% over

Q4-14

• Base Business Up 3% over Q4-14

― Up 6% sequentially from Q3-15

― Higher Base Business across several industry verticals General manufacturing

Refining

1See definition and reconciliation of adjusted EBITDA and adjusted earnings per share on pages 23 – 30 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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Q4-15 Highlights

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• Event Business down as expected

― Cycled completion of large east coast cleanup

project

― Continued project deferrals

• Field and industrial Services posted better than expected

results

• Continued focus on revenue quality and margin

enhancement

• Healthy balance sheet with debt balance of $300.2 million

• 2015 Debt to Pro forma Adjusted EBITDA stands at 2.4

times

• Paid down $94.6 million total in 2015

• Remain bullish on the business despite recent headwinds

1See definition and reconciliation of adjusted EBITDA and adjusted earnings per share on pages 23 - 30 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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Q4-15 Highlights

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Financial

Review

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Starting with the third quarter of 2015 we redefined “Base” and “Event” Business as we

integrate the legacy EQ ES business into these metrics. Previously, US Ecology defined “Event

Business” as non-recurring projects regardless of size. “Base Business” represented that

business that was not considered “Event” and represented recurring waste streams. We now

define “Event Business” as non-recurring projects that are equal to, or greater than 1,000 tons.

We believe this new definition is a better representation of Base and Event Business and will

provide better insight into the business taken as a whole. As we report future quarters, prior

periods presented will be recast based on the new definition. The following table presents

historical comparisons of legacy US Ecology Base and Event business under both the previous

and current definitions:

Base vs. Event

Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14 Q1 '14

As previously defined:

Base 68% 61% 61% 59% 61% 56%

Event 32% 39% 39% 41% 39% 44%

Increase/decrease from comparable quarter:

Base 3% 7% n/a n/a n/a n/a

Event -23% -17% n/a n/a n/a n/a

As currently defined:

Base 76% 67% 68% 70% 70% 65%

Event 24% 33% 32% 30% 30% 35%

Increase/decrease from comparable quarter:

Base 3% 2% n/a n/a n/a n/a

Event -26% -9% n/a n/a n/a n/a

Legacy USE Environmental Services T&D Revenue

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• Total revenue $138.3 million compared with $157.2 million last year

• ES revenue $97.0 million, down from $100.6 million in prior year

― 3% lower treatment and disposal revenue

― 5% lower transportation revenue

― Lower revenues from the chemical manufacturing and transportation industries, partially offset by higher revenues from the other, general manufacturing and refining industries

― Base business up 3% compared to the prior year

― Event business down 28% compared to prior year

• FIS revenue $41.3 million, down from $56.6 million in prior year

− Allstate revenue of $8.1 million (one month), down from $17.4 million (three months) in prior year

− Lower transportation services and remedial project work

Q4-15 Financial Review

70%

30%

Revenue by Segment

ES

FIS

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Percent Change

Q4 '15 Q4 '14 Q4 '15 vs. Q4 '14

Chemical Manufacturing 16% 22% -33%

Metal Manufacturing 16% 16% -1%

Broker / TSDF 14% 14% -2%

General Manufacturing 13% 11% 16%

Refining 8% 7% 7%

Government 8% 8% -2%

Utilit ies 4% 3% 4%

Mining and E&P 3% 3% -15%

Transportat ion 2% 4% -42%

Waste Management & Remediation 2% 2% 3%

Other 14% 10% 20%

Environmental Services T&D Revenue by Industry

Percent of Total

Base Event

Chemical Manufacturing -2% -56%

Metal Manufacturing -6% 84%

Broker / TSDF 4% -71%

General Manufacturing 15% 32%

Refining 42% -65%

Government -30% 15%

Utilit ies -24% 42%

Mining and E&P -4% -83%

Transportat ion -9% -100%

Waste Management & Remediation 26% -60%

Other 7% 198%

Environmental Services T&D Revenue by Industry

Q4' 15 - Q4'14 Percent Change

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• Gross profit of $44.2 million, down from $46.2 million in Q4-14

― ES gross profit of $37.2 million, up from $37.1 million in Q4-14; T&D margin of 43% in Q4-15 vs. 42% in Q4-14

― FIS gross profit of $7.0 million, down from $9.1 million in Q4-14; Allstate contributed $1.6 million of gross profit in Q4-15 compared with $4.0 million in Q4-14

• SG&A of $22.0 million compared with $27.1 million in Q4-14

― Total SG&A includes $88,000 of business development expenses, compared to $838,000 in Q4-14

― Allstate contributed $1.0 million of SG&A in Q4-15 compared with $3.0 million in Q4-14

• Operating income of $22.2 million, up from $19.1 million in Q4-14

― Allstate contributed $538,000 of operating income in Q4-15 compared with $997,000 in Q4-14

• Interest expense of $7.2 million, up from $5.2 million in Q4-14

― $2.4 million, $0.07 per diluted share, in incremental non-cash amortization of deferred financing fees due to substantial debt pay downs, including Allstate proceeds

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1See definition and reconciliation of adjusted earnings per share, adjusted EBITDA , and Pro Forma adjusted EBITDA on pages 23 - 30 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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• Effective tax rate up to 45.5%, from 36.3% in Q4-14

― Higher U.S. state rate and other adjustments associated with filed tax returns

― Estimate $1.1 million, or $0.05 per diluted share impact

― Higher overall tax rate also impacted by non-deductibility of goodwill impairment and loss on sale of Allstate

• Net income of $7.7 million, down from $8.7 million in Q4-14

• Adjusted EPS1

of $0.36 per share, down from $0.40 per share in Q4-14

― Includes approximately $0.07 related to incremental non-cash amortization of deferred financing fees and approximately $0.05 in higher than expected income taxes

― Excluding deferred financing fees and higher tax rate, Adjusted EPS would have been $0.48 per diluted share

• Adjusted EBITDA1

of $33.0 million, up from $31.2 million in Q4-14

― Pro Forma adjusted EBITDA1

of $32.6 million, up from $29.5 million

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1See definition and reconciliation of adjusted earnings per share, adjusted EBITDA , and Pro Forma adjusted EBITDA on pages 23 -30 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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• Total revenue was $563.1 million, up from $447.4 million in 2014

― Allstate contributed $59.1 million of revenue in 2015, compared $37.0 million in 2014

• ES Segment revenue was $375.8 million, compared to $319.8 million in 2014

• FIS Segment revenue was $187.2 million in 2015, compared to $127.6 million in 2014

― Allstate contributed $59.1 million of revenue in 2015, compared $37.0 million in 2014

• Adjusted EBITDA was $125.4 million, compared to $109.0 million

― Allstate contributed $5.1 million in 2015 and $5.0 million in 2014

• Pro Forma Adjusted EBITDA, which excludes Allstate and business development expenses, was $122.6 million, compared to $110.4 million

• Adjusted EPS1

of $1.57 per share, down from $1.99 per share in 2014

― Includes approximately $0.07 related to incremental non-cash amortization of deferred financing fees and approximately $0.05 in higher than expected income taxes

― Excluding deferred financing fees and higher tax rate, Adjusted EPS would have been $1.69 per diluted share

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2015 Financial Review Highlights

1See definition and reconciliation of adjusted earnings per share, adjusted EBITDA , and Pro Forma adjusted EBITDA on pages 23 -30 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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Financial Position, Cash Flow & Return Metrics

• Exited quarter with cash of $5.9 million

• Net borrowings on credit agreement of $294.3 million

• Working Capital = $54.5 million

• 2015 Cash generated from operations = $71.5 million

• 2015 Capital expenditures = $39.4 million

• 2015 Dividends paid = $15.6 million

• 2015 Payments on long-term debt = $94.6 million

Return Metrics (excl. $6.7 million of Q2 ‘15 impairment charges):

• Return on total capital = 6.2% (6.7%)

• Return on total assets = 3.0% (3.8%)

• Return on total equity = 10.1% (12.6%)

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• 2016 revenue estimate of $502 million to $528 million

― ES revenue range of $378 million to $396 million

― FIS revenue estimate of $124 million to $132 million

• Adjusted EBITDA1

estimated to range from $126 million to $132 million

― Represents growth up to 8% over 2015 Pro Forma adjusted EBITDA

• Earnings Per Share1

estimated between $1.80 to $1.95 per diluted

share

― Represents growth up to 15% over 2015 Adjusted EPS excluding

incremental deferred financing amortization and higher tax

expense

1Guidance excludes non-cash foreign currency translation gains or losses, gain/loss on divestiture and business development expenses

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Business Climate and Segment Outlook:

• ES Segment

― Base Business annual growth of low single digits

― Event pipeline remains strong, solid bidding activity

Pipeline is building as we gain visibility to summer work

Have secured or identified several larger opportunities to

backfill large projects completed in 2015

• FIS Segment

― Expanding our field services opportunities and solutions under

expanded network

― Continued focus on revenue quality

― Growth masked by culled revenue during 2015

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• Seasonality:

― Normal seasonality expected with Q1 being the lowest quarter in

revenues and profits, building balance of the year

― Expect Q1 ’16 much softer than Q1’ 15, resulting from:

• Cycling large cleanup projects completed and not yet replaced

• Limited waste stock piles in weather impacted regions

• Continued economic headwinds

• Capital Expenditures estimated between $35 million to $38 million

― Heavy landfill year with over $12 million allocated to airspace

― $3 million in continued IT system and infrastructure development

― Remaining in growth and maintenance capital

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2016 Business Outlook• 2016 Key Initiatives:

― Fine tuning our integration

― Significant Information System Development

― Obtaining select permit expansions throughout our network

― Leveraging our National Accounts to penetrate new markets within

Field Services

― Look for selective acquisitions to build out our network, service

capabilities and growth plans

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We invite your questions &

comments!

Questions and

Comments

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We invite your questions &

comments!

Appendix

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2121

Allstate Power Vac Quarterly Income Statements: 2015For the Year Ended

March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 December 31, 2015

Revenue 13,935$ 16,925$ 20,139$ 8,056$ 59,055$

Direct operating costs 11,293 13,666 15,249 6,480 46,688

Gross profit 2,642 3,259 4,890 1,576 12,367

Selling, general and administrative expenses 3,040 3,657 3,213 1,039 10,949

Impairment charges - 6,367 - - 6,367

Operating income (398) (6,765) 1,677 538 (4,948)

Other income (expense):

Interest income - - - - -

Interest expense (21) (6) - - (27)

Foreign currency loss - - - - -

Other 33 33 33 (531) (432)

Total other income (expense) 12 27 33 (531) (459)

Income before income taxes (386) (6,738) 1,710 7 (5,407)

Income tax expense (benefit) (147) (2,560) 650 3 (2,054)

Net income (239)$ (4,178)$ 1,060$ 4$ (3,353)$

Earnings per share:

Basic ( 0.01 )$ ( 0.19 )$ 0.05$ -$ ( 0.16 )$

Diluted ( 0.01 )$ ( 0.19 )$ 0.05$ -$ ( 0.16 )$

Shares used in earnings per share calculation:

Basic 21,583 21,617 21,655 21,676 21,637

Diluted 21,689 21,748 21,749 21,748 21,733

Net Income (239)$ (4,178)$ 1,060$ 4$ (3,353)$

Income tax expense (147) (2,560) 650 3 (2,055)

Interest expense 21 6 - - 27

Interest income - - - - -

Foreign currency loss - - - - -

Other income (33) (33) (33) 531 432

Impairment charges - 6,367 - - 6,367

Depreciation and amortization of plant and equipment 899 967 377 - 2,243

Amortization of intangible assets 569 569 235 - 1,373

Stock-based compensation 12 20 24 (35) 21

Accretion and non-cash adjustments of

closure & post-closure obligations - - - - -

Adjusted EBITDA 1,082$ 1,158$ 2,313$ 502$ 5,055$

For the Three Months Ended

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Allstate Power Vac Quarterly Income Statements: 2014For the Year Ended

June 30, 2014 * September 30, 2014 December 31, 2014 December 31, 2014

Revenue 2,603$ 16,975$ 17,445$ 37,023$

Direct operating costs 2,035 13,294 13,469 28,798

Gross profit 568 3,681 3,976 8,225

Selling, general and administrative expenses 439 3,205 2,979 6,623

Impairment charges - - - -

Operating income 129 476 997 1,602

Other income (expense):

Interest income - - - -

Interest expense (61) (22) (24) (107)

Foreign currency loss - - - -

Other (32) (189) (188) (409)

Total other income (expense) (93) (211) (212) (516)

Income before income taxes 36 265 785 1,086

Income tax expense (benefit) 14 101 298 413

Net income 22$ 164$ 487$ 673$

Earnings per share:

Basic 0.00$ 0.01$ 0.02$ 0.03$

Diluted 0.00$ 0.01$ 0.02$ 0.03$


Basic 21,528 21,570 21,571 21,537

Diluted 21,667 21,680 21,673 21,655

Net Income 22$ 164$ 487$ 673$

Income tax expense 14 101 298 413

Interest expense 61 22 24 107

Interest income - - - -

Foreign currency loss - - - -

Other income 32 189 188 409

Impairment charges - - - -

Depreciation and amortization of plant and equipment 214 1,019 828 2,061

Amortization of intangible assets 89 625 620 1,334

Stock-based compensation - 7 11 18

Accretion and non-cash adjustments of closure & post-

closure obligations - - - -

Adjusted EBITDA 432$ 2,127$ 2,456$ 5,015$

*Allstate was acquired on June 17, 2014 as part of the EQ acquistion

For the Three Months Ended

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US Ecology reports adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per

diluted share, which are non-GAAP financial measures, as a complement to results provided in

accordance with generally accepted accounting principles in the United States (GAAP) and

believes that such information provides analysts, stockholders, and other users information to

better understand the Company’s operating performance. Because adjusted EBITDA, Pro

Forma adjusted EBITDA and adjusted earnings per diluted share are not measurements

determined in accordance with GAAP and are thus susceptible to varying calculations they

may not be comparable to similar measures used by other companies. Items excluded from

adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share are

significant components in understanding and assessing financial performance.

Adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share should

not be considered in isolation or as an alternative to, or substitute for, revenue, net income,

cash flows generated by operations, investing or financing activities, or other financial

statement data presented in the consolidated financial statements as indicators of financial

performance or liquidity. Adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings

per diluted share have limitations as analytical tools and should not be considered in isolation

or a substitute for analyzing our results as reported under GAAP.

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Non-GAAP Financial Measures

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Adjusted EBITDA

The Company defines adjusted EBITDA as net income before interest expense, interest income, income tax expense,depreciation, amortization, stock based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss,non-cash impairment charges, loss on divestiture and other income/expense, which are not considered part of usual businessoperations.

Pro Forma adjusted EBITDA

The Company defines Pro Forma adjusted EBITDA as adjusted EBITDA (see definition above) less the EBITDA related to the divestedAllstate business, plus business development expenses incurred during the period. We believe Pro Forma adjusted EBITDA is helpfulin understanding our business and how it relates to our 2016 guidance which includes neither the divested Allstate business norbusiness development expenses.

Adjusted Earnings Per Diluted Share

The Company defines adjusted earnings per diluted share as net income adjusted for the after-tax impact of non-cash, non-operational impairment charges and foreign currency gains or losses (“Foreign Currency Gain/Loss”), the after-tax impact ofbusiness development costs, and the after-tax impact of the divested Allstate business, divided by the number of diluted sharesused in the earnings per share calculation.

Impairment charges excluded from the earnings per diluted share calculation are related to the Company’s decision to explorestrategic alternatives for our industrial services business. The Foreign Currency Gain/Loss excluded from the earnings per dilutedshare calculation are related to intercompany loans between our Canadian subsidiary and the U.S. parent which have beenestablished as part of our tax and treasury management strategy. These intercompany loans are payable in Canadian dollars(“CAD”) requiring us to revalue the outstanding loan balance through our consolidated income statement based on theCAD/United States currency movements from period to period. We believe excluding the currency movements for these

intercompany financial instruments provides meaningful information to investors regarding the operational and financialperformance of the Company. Business development costs relate to expenses incurred to evaluate businesses for potentialacquisition or costs related to closing and integrating successfully acquired businesses.

We believe excluding these non-cash impairment charges, foreign currency movements for intercompany financial instrumentsand business development costs provides meaningful information to investors regarding the operational and financialperformance of the Company.

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Non-GAAP Financial Measures - Definitions

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Financial Results: Q4‘15 vs. Q4‘14

1Includes pre-tax Business Development expenses of $0.1 million and $0.8 million for the three months ended December 31, 2015 and 2014, respectively

(in t housands, except per share dat a) 2015 2014 $ Change % Change

Revenue $ 138,273 $ 157,174 $ (18,901) -12.0%

Gross profit 44,156 46,213 (2,057) -4.5%

SG&A1

22,004 27,065

Operating income1 22,152 19,148 3,004 15.7%

Interest expense, net (7,161) (5,158) (2,003) 38.8%

Foreign currency loss (427) (472) 45 -9.5%

Loss on divest iture (542) - (542) n.m.

Other 111 93 18 19.4%

Income before income taxes 14,133 13,611 522 3.8%

Income tax expense 6,429 4,934 1,495 30.3%

Net income $ 7,704 $ 8,677 $ (973) -11.2%

Earnings per share:

Basic $ 0.36 $ 0.40 $ (0.04) -10.0%

Diluted $ 0.35 $ 0.40 $ (0.05) -12.5%


Basic 21,676 21,571

Diluted 21,748 21,673

Three Months Ended December 31,

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(in t housands) 2015 2014 $ Change % Change

Adjusted EBITDA / Pro Forma adjusted EBITDA Reconciliation

Net income 7,704$ 8,677$

Income tax expense 6,429 4,934

Interest expense, net 7,161 5,158

Foreign currency loss 427 472

Loss on divest iture 542 -

Other income (111) (93)

Impairment charges - -

Depreciat ion and amort izat ion 6,205 7,682

Amort izat ion of intangibles 2,749 2,974

Stock-based compensation 561 382

Accret ion and non-cash adjustments

of closure & post-closure obligations 1,376 981

Adjusted EBITDA1 33,043 31,167 1,876$ 6.0%

EBITDA related to divested Allstate business (502) (2,456)

Business development expenses 88 838

Pro Forma adjusted EBITDA 32,629$ 29,549$ 3,080$ 10.4%


1Includes pre-tax Business Development expenses of $0.1 million and $0.8 million for the three months ended December 31, 2015 and 2014, respectively

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(in t housands, except per share dat a)

Adjusted Earnings Per Share Reconciliation per share per share

Net income / earnings per diluted share 7,704$ 0.35$ 8,677$ 0.40$

Adjustments, net of tax:

Divested Allstate businesss (4) - (487) (0.02)

Non-cash foreign currency translat ion loss 88 0.01 77 -

Business development costs 51 - 514 0.02

Adjusted net income / adjusted earnings per diluted share 7,839$ $ 0.36 8,781$ $ 0.40

Shares used in earnings per diluted share calculat ion 21,748 21,673


2015 2014

2828

Financial Results: 2015 vs. 2014

1Includes pre-tax Business Development expenses of $2.2 million and $6.4 million for the year ended December 31, 2015 and 2014, respectively

(in t housands, except per share dat a) 2015 2014 $ Change % Change

Revenue $ 563,070 $ 447,411 $ 115,659 25.9%

Gross profit 171,410 145,786 25,624 17.6%

SG&A1

93,079 73,336

Operating income1 71,631 72,450 (819) -1.1%

Interest expense, net (23,305) (10,570) (12,735) 120.5%

Foreign currency loss (2,196) (1,499) (697) 46.5%

Loss on divest iture (542) - (542) n.m.

Other 1,267 669 598 89.4%

Income before income taxes 46,855 61,050 (14,195) -23.3%

Income tax expense 21,244 22,814 (1,570) -6.9%

Net income $ 25,611 $ 38,236 $ (12,625) -33.0%

Earnings per share:

Basic $ 1.18 $ 1.78 $ (0.60) -33.7%

Diluted $ 1.18 $ 1.77 $ (0.59) -33.3%


Basic 21,637 21,537

Diluted 21,733 21,655

Year Ended December 31,

2929


1Includes pre-tax Business Development expenses of $2.2 million and $6.4 million for the year ended December 31, 2015 and 2014, respectively

(in t housands) 2015 2014 $ Change % Change

Adjusted EBITDA / Pro Forma adjusted EBITDA Reconciliation

Net income 25,611$ 38,236$

Income tax expense 21,244 22,814

Interest expense, net 23,305 10,570

Foreign currency loss 2,196 1,499

Loss on divest iture 542 -

Other income (1,267) (669)

Impairment charges 6,700 -

Depreciat ion and amort izat ion 27,931 24,413

Amort izat ion of intangibles 12,307 8,207

Stock-based compensation 2,297 1,250

Accret ion and non-cash adjustments

of closure & post-closure obligations 4,584 2,656

Adjusted EBITDA1 125,450 108,976 16,474$ 15.1%

EBITDA related to divested Allstate business (5,055) (5,015)

Business development expenses 2,212 6,402

Pro Forma adjusted EBITDA 122,607$ 110,363$ 12,244$ 11.1%


3030


(in t housands, except per share dat a)

Adjusted Earnings Per Share Reconciliation per share per share

Net income / earnings per diluted share 25,611$ 1.18$ 38,236$ 1.77$

Adjustments, net of tax:

Impairment charges 6,700 0.31 - -

Divested Allstate businesss (595) (0.03) (673) (0.03)

Non-cash foreign currency translat ion loss 1,167 0.05 700 0.03

Business development costs 1,279 0.06 4,851 0.22

Adjusted net income / adjusted earnings per diluted share 34,162$ $ 1.57 43,114$ $ 1.99

Shares used in earnings per diluted share calculat ion 21,733 21,655


2015 2014

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