Q1 2013 Investor Presentation Unlinked FINAL

7/27/2019 Q1 2013 Investor Presentation Unlinked FINAL

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US Ecology, Inc.Q1 2013 Earnings Conference Call

April 25, 2013


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Jeff FeelerActing President & Chief Operating Officer

Steve WellingSenior Vice President of Sales and Marketing

Simon BellVice President of Operations

Eric GerrattVice President & Acting Chief Financial Officer

Todays Hosts

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During the course of this presentation the Company will be making forward-looking statements (assuch term is defined in the Private Securities Litigation Reform Act of 1995) that are based on our

current expectations, beliefs and assumptions about the industry and markets in which US Ecology,Inc. and its subsidiaries operate. Because such statements include risks and uncertainties, actualresults may differ materially from what is expressed herein and no assurance can be given that theCompany will meet its 2013 earnings estimates, successfully execute its growth strategy, or declareor pay future dividends. For information on other factors that could cause actual results to differmaterially from expectations, please refer to US Ecology, Inc.s December 31, 2012 Annual Report onForm 10-K and other reports filed with the Securities and Exchange Commission. Many of the factorsthat will determine the Companys future results are beyond the ability of management to control or

predict. Participants should not place undue reliance on forward-looking statements, which reflect

managements views only as of the date hereof. The Company undertakes no obligation to revise orupdate any forward-looking statements, or to make any other forward-looking statements, whether asa result of new information, future events or otherwise.

Important assumptions and other important factors that could cause actual results to differ materiallyfrom those set forth in the forward-looking information include a loss of a major customer or contract,compliance with and changes to applicable laws, rules, or regulations, access to cost effectivetransportation services, access to insurance, surety bonds and other financial assurances, loss of key

personnel, lawsuits, labor disputes, adverse economic conditions, government funding or competitive

pressures, incidents or adverse weather conditions that could limit or suspend specific operations,implementation of new technologies, market conditions, average selling prices for recycled materials,our ability to replace business from recently completed large projects, our ability to perform underrequired contracts, our ability to permit and contract for timely construction of new or expandeddisposal cells, our willingness or ability to pay dividends and our ability to effectively close andintegrate future acquisitions.

Safe Harbor

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Highlights

Financial Results

Q1 2013 Financial Position, Cash Flow & Return Metrics

2013 Earnings & Capital Expenditure Outlook

Questions & Comments

Agenda

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Strong revenue growth up 30% Treatment and Disposal (T&D) revenue up 21% Event Business revenue up 54%

Operating income up 49% to $9.7 million

Adjusted EBITDA1 up 31% to $13.9 million

Net Income up 20%

Adjusted EPS1

of $0.32 per share, up 52% from $0.21 per share in Q1 12

Solid performance by all facilities & business lines

Q1 2013 Highlights

51See reconciliation of Adjusted EBITDA and Adjusted earnings per share on page 10 & 11 of this presentation or attached as Exhibit A toour earnings release filed with the SEC on Form 8-K


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Total Revenue: $42.9 million vs. $33.0 million Q1 12 T&D revenue $36.3 million = +21%

Transportation service revenue $6.6 million = +114%

US Ecology Michigan (formerly Dynecol) contributed $2.9 million in total

revenue

Volumes:

Average selling price (ASP) up 19% Quarterly volume increase and ASP improvement primarily due to

US Ecology Michigan acquisition.

Financial Results: Q1 2013

(tons) 2012 2013 Change

Q1 215,000 223,000 +8,000 (+4%)

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0%

20%

40%

60%

80%

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Percentages*

Base Event

Base Business down 1% vs. Q1 12

Event Business up 54% vs. Q1 12

T&D Revenue Trends: Q1 2013

$-

$10.0

$20.0

$30.0

$40.0

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

$s in millions*

Base Event

* Excludes transportation services+ Excludes US Ecology Michigan which was acquired on May 31,2012

+

+

+

+

7

+

+

+

+


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Disposal Revenue Analysis*

8%

4%

11%

51%

16%

10%

% of Q1'13 T&D Revenue

Government Cleanup Rate Regulated

Refinery BrokerOther Industry Private Cleanup

% Change

Q1 '13 vs. Q1 '12

Private Cleanup 149%

Refinery 29%

Rate Regulated 15%

Broker 10%

Government Cleanup 9%

Other Industry -11%

8*Excludes transportation services & US Ecology Michigan acquired May 31, 2012


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Gross Profit

$15.4 million, up 27% from $12.1 million in Q1 12 Gross margin: 35.9% of total revenue, down from 36.6% in Q1 12

T&D gross margin: 42.0% of T&D revenue, up from 41.1% in Q1 12

SG&A $5.7 million (13.3% of total revenue) vs. $5.6 million (17% of total revenue) in Q1 12

Operating Income $9.7 million, up 49% from $6.5 million in Q1 12

Adjusted EBITDA1 $13.9 million, up 31% from $10.6 million in Q1 12

Net income $5.4 million, $0.29 per diluted share Foreign exchange (Fx) translation non-cash loss of $0.03 per share on weaker CAD$

Adjusted EPS1 of $0.32 excluding Fx translation loss

Financial Results: Q1 2013

91See reconciliation of Adjusted EBITDA and Adjusted earnings per share on page 10 & 11 of this presentation or attached as Exhibit A toour earnings release filed with the SEC on Form 8-K


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Financial Results: Q1 2013 vs. Q1 2012

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amounts in thousands except per share data Q1 2013 Q1 2012 $ Change

%

Change

Revenue $ 42,899 $ 33,013 $ 9,886 29.9%Gross profit 15,382 12,076 3,306 27.4%

SG&A 5,726 5,605 121 2.2%

Operating income 9,656 6,471 3,185 49.2%

Interest expense, net (216) (219) 3 -1.4%

Foreign currency gain (loss) (938) 1,091 (2,029) -186.0%

Other 97 80 17 21.3%

Pretax income 8,599 7,423 1,176 15.8%

Income tax expense 3,193 2,900 293 10.1%

Net income $ 5,406 $ 4,523 $ 883 19.5%

Diluted EPS $ 0.29 $ 0.25 $ 0.04 16.0%

Diluted shares outstanding 18,407 18,254

Adjusted EBITDA Reconciliation

Net Income 5,406$ 4,523$

Income tax expense 3,193 2,900

Interest expense, net 216 219Foreign currency (gain) loss 938 (1,091)

Other income (97) (80)

Depreciation and amortization 3,439 3,223

Amortization of intangibles 367 350

Stock-based compensation 146 203

Accretion of c losure & post-closure liabilities 307 335

Adjusted EBITDA 13,915$ 10,582$ 3,333$ 31.5%


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Financial Results: Q1 2013 vs. Q1 2012

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(in thousands, except per share data)

Adjusted Earnings Per Share Reconciliation per share per share

Net income / earnings per diluted share 5,406$ 0.29$ 4,523$ 0.25$

Business development costs, net of tax - - 41 -

Non-cash foreign currency (gain)/loss, net of tax 595 0.03 (702) (0.04)

Adjusted net income / adjusted earnings per

diluted share 6,001$ $ 0.32 3,862$ $ 0.21

Shares used in earnings per diluted share

calculation 18,407 18,254

Three Months Ended March 31,

2013 2012


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$4.5 million in cash

$41.0 million of debt ($36.5 million of net debt)

$47.2 million available lines of credit

Q1 13 Cash Flow Stats:

$12.3 million cash flow from operations

$4.0 million debt payments

$6.8 million capital investments

Trailing Twelve Month Return Metrics:

Return on Capital = 15.3%

Return on Assets = 12.7%

Return on Equity = 24.1%

Financial Position, Cash Flow & Return Metrics

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Earnings per share estimated at $1.45-$1.551

Up to 12% growth Adjusted EBITDA estimated to range from $62-65 million

Up to 11% growth

Business Climate: Base Business growth projected Event Business sales pipeline remains strong

2013 T&D gross margin projected at 43%-45%

Tax rate estimated at 39% for full year, up from previous guidance of 38%

Capital Expenditures estimated at $22-$23 million Includes $3.4 million carryover not spent in 2012 Nevada landfill construction moved up from 2014 due to strong business conditions

New landfill space construction in Texas and Quebec

Purchased land in Texas to support long-term expansion

Continue to invest in infrastructure and equipment upgrades to support growth

Reaffirm 2013 Outlook

131Guidance excludes non-cash foreign currency translation gains or losses


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We invite your questions & comments!

Questions and Comments

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Documents

Q1 2013 Investor Presentation Unlinked FINAL