Clean Harbors, Inc. Price & Performance (CLH)

Thank you, Christine, and good morning, everyone. With me on today's call are our Co Chief Executive Officer, Eric Gerstenberg and Mike Battles our EVP and Chief Financial Officer, Eric Dugas and SVP of Investor Relations, Jim Buckley. Slides for today's call are posted on our Investor Relations website we invite you to follow along. Matters we are discussing today that are not historical facts are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Reflect management's opinions only as of today 02/19/2025. Information on potential factors and risks that could take effect effect our results is included in our SEC filings. The company undertakes no obligation to revise or publicly release the results of any revision of the statements made today other than through filings made concerning this Today's discussion includes references to non GAAP measures Cleanharvest believes that such information provides an additional measurement and consistent historical comparison [indiscernible] Reconciliations of these measures to the most directly comparable GAAP measures are available in today's news release on our website and in the appendix of today's presentation. Let me turn the call over to Eric Rosenberg Tussaud. Thanks, Michael. Good morning, everyone, and thank you for joining us.

We continue to execute on our strategic priorities in Q4. Delivering strong consolidated results and beating Street expectations. The quarter was highlighted by sustained momentum in our Environmental Services segment and concluded 2024 as another strong year with consolidated EBITDA growth of 10%. Before we get into the results, let me spotlight our team's outstanding safety performance. Remain laser focused on safety and continuous improvement in the quarter. Which contributed to a total recordable incident rate that enabled us to surpass our 2024 goal.

While we're proud of this achievement, we recognize that safety an ongoing journey. Turning to our financial performance on Slide three. Our results were in line with our expectations. As our ES segment capped a record year with solid fourth quarter. We have steady demand for our ES services allowed us to conclude 2024 with strong waste collection volumes, a healthy flow of project work, resulting in full year revenue growth of 11% and adjusted EBITDA margins exceeding 25%. SK assets as expected faced a challenging commodity pricing environment with market conditions for base oil and lubricants further deteriorating toward year end. Announced in November, our team took very aggressive actions in our used oil collection pricing to offset the lubricant pricing deterioration. Reflecting the strength of the year overall, we delivered record revenue. Adjusted EBITDA and adjusted free cash flow in 2024. Operationally, we also achieved a number of milestones including the completion and commercial launch of our Kimball Nebraska incinerator. The acquisition and integration of HEPAKO Noble Oil, Growth in our workforce and improved retention as we lowered turnover by two fifty basis points The launch of our total PFOS solution initial expansion of our Baltimore hub, our partnership with Castrol for its more circular offering, and more than 20,000 emergency response events Turning to our segments' reviews, beginning with ES on Slide four.

Adjusted EBITDA increased 11% with a 9% increase in revenue translating to a 50 basis point margin improvement.

EPCO accounted for half of the segment's $103,000,000 revenue increase. With the remainder from organic growth driven by a combination of volume and price, Q4 marked the eleventh consecutive quarter of year over year improvement in the ES segment adjusted EBITDA margin. Which has increased by more than 500 basis when compared with Q4 of twenty twenty one.

Looking at segment components, field services revenue grew 47% driven primarily by HEPAKO and organic growth.

In technical services, higher network volumes and pricing, drove an 8% revenue increase.

Average pricing in the incinerators rose 4% while achieving 94% incineration utilization in the quarter. Demand was robust and our plants ran very efficiently.

We are beginning to realize the benefits from investments and process improvements we have made in our network in the recent years.

Safety, Clean, Environmental Services completed another year of steady revenue growth with the segment. Generating 6% in Q4.

We performed 246,000 parts wash Other core branch offerings also performed well. Our industrial services team did a great job driving price improvements, and managing their cost structure during the slower fall turnaround season. Turning to Slide five. After completing final inspections and incurring some startup related costs, our new incinerator in Kendall, Nebraska launched commercial operations in December. We are proud to have successfully completed this multi year project ahead of our original timeline. Our engineering team did an outstanding job hitting every milestone of this [indiscernible] Kimball's design mirrors the Arkansas incinerator we opened in 2017.

The initial shakedown phase for Kimball is underway. We expect the incinerator ramp up gradually as we optimize its operations over the next twelve to eighteen months. Opening of the incinerator comes at an opportune time for our customers. Kimball's ability to handle more complex waste streams aligns well with the demand environment. Which is highlighted by reshoring infrastructure spending efforts to regulate PFOS, in the current administration's pro Kimbell increased our overall North American capacity by 12% presenting solutions for captive incineration customers. We have a proven playbook that we continue to share with our captive customers to evaluate their strategic options including closure. Before turning the call over to Mike, I want to touch on P plus. Which is a topic we often get asked about. We shared on our Q3 call we were planning to conduct our next round of testing to meet the EPA's more stringent emission standards for PFAS consideration. That testing took place in November at our Utah facility with both the EPA and DoD on-site during testing. These tests involve considerable data collection to scientifically prove that PFOS elimination in our incinerators occurs up to six nines of destruction with no emissions concerns.

We expect the results of the testing to be available in Q2 and we are confident that the data will continue to support our previous testing results.

Clearly demonstrating that PFAS can be safely eliminated using our high temperature RECRA permitted incinerators. Appreciate the government's active participation in our latest study. The consensus is building around the need to address these forever chemicals and eliminate their threat to human health. Many industry analysts believe that PFOS remediation and destruction carries potential of creating a multibillion dollar market [indiscernible] We are seeing an ever increasing pipeline to support that belief. We expect PFAS to remain a priority for the current administration and state regulators. We look forward to keeping you updated on the results of our study once they are finalized. With that, let me turn things over to Mike. Mike, Thank you, Eric, and good morning, everyone. Turning to our SKSS segment results on Slide six.

Revenue and EBITDA decreased year over year in Q4 reflecting soft demand and lower pricing during what is already the seasonally weak quarter. These results reflect the ongoing challenges in the base oil and lubricants market, In response to that market softness, we took action on several fronts.

In mid November, we shifted to a charge for oil position We also idled our California re refinery in Q4 to address our inventory buildup and support our CFO initiative. We believe these actions along with comprehensive cost cutting initiatives, we'll support this business in 2025, In the quarter, we gathered 63,000,000 gallons of waste oil, higher than the prior year, reflecting the addition of Noble Oil.

During the November shift in our due to a November shift in our collection approach, Q4 collection costs were at the CFO average versus the PFO average in Q3. We expect to continue to increase our price to collect used motor oil in 2025.

Our goal is always to balance the feedstock levels our refinery refineries need with collecting oil at the best possible price.

Addition to aggressively moving to CFO and reducing oil collection costs in light of base oil pricing, Our strategy to minimize volatility in this business include selling more blended gallons, producing Group three and capitalizing on our partnership leverage our low carbon footprint products like we have with BP Castro. Our blended volumes in the quarter came in as expected at 20% of total volumes sold. Our Group three program is moving forward and we expect to increase Group III production this year. Our Castell partnership generates its first major fleet customer for their more circular offering Their sales and marketing rollout continues and we're excited to see the potential of this partnership get realized with more large fleets. Turning to capital allocation on Slide seven.

We ended the year with a healthy cash balance and low leverage, that will enable us to execute the overall Clean Harbors growth strategy. We continue to look for opportunities whether those are internal or external, to generate the best returns on our shareholders' capital.

Internally, we continue to see opportunity to invest within multiple parts of the company. Eric detailed our success with launching Kimball, which is a $200,000,000 plus project that will pay an attractive return for decades. We had smaller, lucrative opportunities as well. In 2024, we allocated approximately $20,000,000 of capital to the expansion of our Baltimore location. 2025, intend to replicate that success through another similar growth project by expanding our presence in Phoenix response to rapid market growth in the Southwest Region, particularly in the semiconductor market. We are purchasing and upgrading a site that allowed comprehensive hazardous waste collection and service capabilities and estimated cost of $15,000,000 We remain very active in the M and A front.

Evaluating potential acquisition candidates that will support our growth plans while enable us enabling us to capture synergies and then drive additional volumes into our network.

The pipeline is as active as ever. We intend to execute our share buyback plan to at least maintain a flat share count and be opportunistic with large purchases when conditions are ideal just as we have for the past decades. In conclusion, we entered the first quarter of twenty twenty We expect another year of consistent profitable growth led by our ES segment.

We are bullish about our prospects this year demand for our services remain strong. With multiple tailwinds supporting us from re shoring to infrastructure investments, to potential captive closures. We continue to have a healthy waste backlog and a robust pipeline of remediation waste projects. The commercial ramp up of our timber incinerator is underway The outlook for field services is positive given the early returns on HEPAKO and the growing need of our skilled workforce and ER capabilities. We anticipate a recovery in industrial services this year after a challenging 20 and fully expect our SK Environmental Services to continue to achieve record waste collection support our network.

In 2025, Clean Harbor celebrated its forty fifth anniversary.

Our commitment to our core values has never been stronger, We believe that we have the ideal growth strategies in place to deliver an outstanding financial performance in twenty twenty five.

Including record adjusted EBITDA and cash flows.

In addition, we anticipate continued margin improvement based on our pricing, cost mitigation plans and product review initiatives. With that, let me turn it over to our CFO, Eric Dubious.

Thank you, Mike.

And good morning, everyone. Turning to the income statement on Slide nine. Our Q4 results exceeded the guidance provided on our last earnings call. Led by profitable growth in ES, continued margin expansion in that segment. Demand across our core lines of business remained robust as we concluded the year.

Overall, we grew total company revenues dollars or 7% and by over $480,000,000 or 9% for the year. CES segment led the way with 15% adjusted EBITDA growth for the year with the associated margin exceeding 25%.

Fourth quarter adjusted EBITDA of $257,000,000 was driven by great results in the ES segment.

Offset by a decline in SKFS and higher corporate costs. This total reflects a $4,000,000 adjustment related to startup costs [indiscernible] That were incurred leading up to the launch of its commercial operations. December, Our adjusted EBITDA margin of 18% in Q4 was down year over year but up 30 basis points for the full year to 19%. This annual improvement speaks to the strength of our ES business where margins improved 90 basis points for the year. By leveraging our overall facilities network in part from a record level of drum weights collected, and the significant growth of field services.

SG and A expense as a percentage of revenue was 12.7% in Q4, similar to the full year percentage of 12.6%.

These levels were in line with our expectations as the primary factors behind the dollar increase from prior periods were related to M and A activity, increased labor and benefit related costs, [indiscernible] For full year 2025, we anticipate our SG and A expense, a percentage of revenue, to remain in the mid-twelve percent range. Depreciation and amortization in Q4 came in as expected at $105,000,000 and $4.00 $1,000,000 for the year.

Up from 2023 due to acquisitions. For 2025, we expect depreciation and amortization in the range of $440,000,000 to $450,000,000 Income from operations in Q4 was $137,000,000 and $670,000,000 for the full year. Representing a 9% increase Q4 net income was down versus the same period a year ago while increasing for the full year as we delivered EPS of $7.42 in fiscal twenty twenty four, Turning to Slide 10 and the balance sheet. Cash and short term marketable securities At year end, were $790,000,000 up $195,000,000 from the end of Q3 and approximately $240,000,000 over the course of 2024. We saw a meaningful decrease in our receivables balance of $127,000,000 in Q4 as we focused on collections related to HEPCO billings, that were slowed by a previous system changeover. On our Q3 earnings call, we had lowered our free cash flow estimate for the year in recognition of these challenges. However, cash collections in this area exceeded our expectation down the stretch. Resulting in a strong Q4 free cash flow. I want to thank the team for their great effort in finishing the year strong. [indiscernible] Our balance sheet continues to be a source of strength for us.

Our net debt to EBITDA ratio at year end was just under two times with no material debt amounts coming due until 2027.

We continue to be opportunistic in addressing our interest rates as we did in October we repriced our term loan to generate approximately $2,000,000 in annual interest savings. Our overall interest rate at year end was 5.38%. Turning to cash flows on Slide 11.

Net cash from operating activities in Q4 $3.00 $4,000,000 up $25,000,000 from prior year. CapEx net of disposals was $60,000,000 down considerably from prior year and in line with our expectations. As we are wrapping up our Kimball spend. As Eric mentioned, the Kimball incinerator commercially launched in December with total spend on the project of approximately $210,000,000 including the $75,000,000 that was spent in 2024. For the quarter, adjusted free cash flow $248,000,000 finishing the year at $358,000,000 These results exceeded expectations based on the working capital improvements I spoke to a moment ago. For 2025, we expect our net CapEx excluding the Phoenix Growth Project, to be in the range of $345,000,000 to $375,000,000 During Q4, we bought back more than 101,000 shares of stock for a total of $25,000,000 bringing our year to date total to $55,000,000 Moving to guidance on Slide 12.

Based on our Q4 and 2024 results, along with current market conditions for both of our operating segments, we expect 2025 adjusted EBITDA in the range of $1,150,000,000 to $1,210,000 with a midpoint of $1,180,000,000 Looking at our annual guidance from a quarterly perspective, A consolidated basis. For full year 2025, adjusted EBITDA guidance In Environmental Services, we expect adjusted EBITDA in twenty twenty five the midpoint of our guidance, [indiscernible] 5% to 8% from 2024. Overall demand for our core ES services remains strong. And will drive continued growth in 2025. With Kimbell ramping up, and offering additional capacity along with macro tailwinds we expect to introduce more volumes into our facilities network along with continued expansion in the SK branch and field services businesses, and return to growth in industrial services. For SKSS, expect full year 2025 adjusted EBITDA at the midpoint of our guidance to be $140,000,000 The environment remains challenging as we begin the New Year and we remain conscious in our oil pricing assumptions. Within corporate, at the midpoint of our guide, we now expect negative adjusted EBITDA to be up 3% to 7% compared to 2024. The year over year increase primarily relates to rising expenses areas such as wages and benefits, insurance, and growth in the business For adjusted free cash flow, current expectation for 2025 is for a range of $430,000,000 to $490,000,000 or a midpoint of $460,000,000 As Mike mentioned, we are planning to invest $15,000,000 in a growth project in Phoenix this year.

Are going to exclude spend from this long term growth project from adjusted free cash flow going forward. We believe this will create a more accurate picture of our free cash flow generation as a company. [indiscernible] In summary, our growing ES segment delivered an exceptional performance in 2024 capped by a strong fourth quarter. The favorable market dynamics propelling this business position it for greater earnings potential particularly as we anticipate a high growth U. S. Economy. In the coming years. The ramp up of our Kimball incinerator is underway. With our remaining network operating at a high capacity. Moreover, the potential for increased volumes related to PFAS destruction are on the horizon. As we move into 2025, presenting exciting growth opportunities. The integration of TEPCO has progressed nicely and we're confident in another solid year for field services. Our SK branch operations continued to deliver profitable growth quarter after quarter showcasing our operational excellence, and we're optimistic that Industrial Services will grow in 2025. Overall, we remain encouraged by the trajectory of our company and the market conditions to support and potentially accelerate that profitable growth This year. With that, Christine, open up the call for questions.

Thank you. We will now be conducting a question and answer session. Thank you. Our first question comes from the line of Ty Brown with Raymond James. Please proceed with your question.

Hey, good morning. Hey, Todd. Good morning, Todd. Hey, sorry, I'm a little under the weather here.

But There have been a number of articles about the California wildfires maybe a sizable HazWave Clean effort. I'm just curious if you guys are seeing any incremental there anything kind of baked into the guidance there? Yes, Tyler. This is Eric answering. Are participating actively in helping with the cleanup and the remediation. I'd say though that wildfires were underway, They did have some typical disruption to our branch collections. We were pleased however, that none of our operating branches had any effect in thankfully our people did not have any effect their homes By and large, And so after that conclusion of getting the fire under Our teams have done an awesome job in helping with the environmental hazardous waste cleanup of that fire progresses today. How long that's going to go on is really really unknown at this point, but we continue to support the efforts there. I think it's just in terms of the guidance to address your guidance question. Tyler, for Q1, maybe some modest benefits from the work that Eric talked about, but largely kind of a net neutral event, I think, because of the slowdown in that region. Due to the fires as well.

So how we kind of see Q1 But as Eric said, time will tell, scope of that work. Okay. And then if I come back on Birdful, I know I've asked about this before, but the culling numbers are really high. Particularly in December and into January. I think you participated back in 2015, but are you guys mustering any resource in that effort as well? Or could that be an opportunity to at least to help?

It could be Tyler. At this point, we've actively assistance. There hasn't been anything that's sizable at this point that we would speak of. Nothing material, Okay. And then Eric, Gee, you mentioned this captive solution now that you've added 12% more capacity to the Clean. I'm just curious now that Kimbell is online, are you getting any inbounds about possibly filling those burn slots with captive closures? Is there anything material to talk about there?

Yes, certainly Tyler. We've talked about a number of times in the past. As you know, all those captive incinerators continue to be our customers. [indiscernible] we have some outstanding relationships there. And as things have evolved, we continue to work work actively with some of those captives on helping to evaluate their next steps as things progress with Kimbell coming online, but also as they really evaluate their cost structure and what could change in the regulations to affect their air emissions controls All those types of things are in play in a challenging environment. So yes, we work with them and continue to to get closer with a few of them that opportunity exists there.

Okay. My last one just real quick. That's helpful. On M and A, there have been a number of deals in, let's call it, the specialty waste space I think, by both financial and strategic buyers. It seems that multiple [indiscernible] Just curious if you think you guys will get some M and A across the line this year? Things a little rich? It sounds like the pipeline is good, but just any more color on that would be helpful. Thank you.

This is Mike. We remain very active in the market. As you noted, there's a lot of deals out there. We've been very active in frustration and looking at those deals And we remain active. Pipeline is, as I said in my prepared remarks, as busy as ever. And we're trying to find the right deal that makes sense financially and strategically And we're going to continue to be active in that marketplace. Prices have gone up. We think there's real value there and we'll be an active participant in 2025. Feel better. Thanks. Our next question comes from the line of Noah Kaye with Oppenheimer.

Please proceed with your question.

Well, good morning folks. Thanks for taking the questions.

I would just like to start by getting a sense of some of the moving parts for the 1Q guide. Specifically, I think what drives a bit softer ES segment growth versus the full year average? I mean, those are moving pieces I would think about would be, you get a couple of months of rollover EBITDA contribution I don't think price was too strong tech last year, utilization wasn't too high. So is there anything kind of one time or kind of a net headwind in the ES to call out that we should be thinking about that maybe improve throughout the year? Hey, Noah. It's Eric. I'll take this one. Just in in looking at kind of our guide for Q1, as I said in my remarks, the ES segment still kind of guiding to about a 5.5% growth rate. Here in Q1. You're right, some big pieces just in there. Another quarter, HEPAKO with some synergies. So that'll be nice. But we are seeing again, the team has done a great job getting some pricing in here as the calendar turns, particularly in the SK branch business. Our volumes remain strong. So we're still seeing still seeing those things and guiding that way into Q1.

There was a little bit of slowdown obviously from weather and the California fires that Eric alluded to a moment ago. But still seeing core growth in those core lines of business. I'd say on the IS side of things, maybe a little bit of headwind in Q1 here from some large project that we had in IS last year in Q1. So that's driving like I said 5.5% growth rate in ES.

SKSS obviously pricing headwinds are offsetting that to arrive at kind of a flat guide for Q1. As I project out for the rest of 2025, I think the biggest item there leading to kind of the midpoint of our ES guide of 7% is the introduction of that will begin to ramp up through the year. We are being a little modest there full year growth. Probably $10,000,000 ish maybe in that range for the year. But that's the big one And then I'd say the other item that we could see an upside to the guide would be just the level of ER responses. 2024 was a great year in terms of ERs, particularly in FS. And if we can continue to see the high level VRs there that would be upside.

Very helpful detail.

Just on the subject of Kimball, I guess the ramp up of a new facility introduces some unique elements to utilization and price mix. So maybe help us understand kind of how you're thinking about fleet average and whether or not you're going to sort of break out Kimball separately from kind of typical metrics you report around utilization and price mix? [indiscernible] [indiscernible] Just wrapping through some of that. On Kimball, we expect to to incinerate over 28,000 incremental tons. Throughout the course of this year. And as we started out the gates here in January, [indiscernible] We began with some really rough weather which impeded our ability to get the tonnage throughput that we expected in January. That being said, the team has done an awesome job of helping to get over some startup issues and we're really having a great stretch of how we're performing and burning Currently and expect to meet our goal of tonnage throughput here in the first quarter. So that's great. Overall for the course of the year, as we've mentioned in the past, we expect incremental $8,000,000 to $12,000,000 of EBITDA contribution through that incinerator at 28,000 tons. And so excited with how we're progressing right now through the quarter.

Over the next few years, we'll continue to ramp up. Contributing $25,000,000 to $35,000,000 to $45,000,000 of EBITDA over the next three to four years. And Noah, just as a point as you look at it from a quarterly standpoint in Timbalt, this is not perfect, but let's say it's not much of a contribution in Q1, then it goes if you say the midpoint is 10, it's $2,000,000 in Q2, $3,000,000 in Q3 and $5,000,000 in Q4 as we ramp up the year as as depending on obviously depending on whether in plant production, there's a lot of variables in that number, but that's kind of directionally as we thought about the guide for the year and the breakout by quarter, [indiscernible] reiterate, I've said it many times, Kemble is part of a network and there's another incinerated right outside it's sometimes it's hard to break that out specifically as to the profitability of each individual Clean. That's kind of how we've done it from a guidance standpoint.

Very good. Thank you. Maybe just one last one and I'll pick on incineration. I guess what are you all hearing on the update to the MAX standards? Maybe frame for us a little bit potential timing, where you think the regulations might go and to what extent could this be a tailwind in an opportunity? Yes. Noah, Eric here again. So Certainly, it continues to evolve. We know that the EPA is actively engaged. And doing our review of performance of current incinerators both captive and commercial. And that review will continue on for a while. Obviously, there's a there's some change of administration that affects some of the timing of that. But we know that that's long overdue. And we do expect that that will have impact on particularly maybe on the captive area of evaluating some of those incineration in units.

We with new standards are going to come capital investment And we know confidently that our units perform exceptionally well. We also know that some of the captive units are are old and tired and will need some sort of upgrade. So for that, we think that pertains to opportunity for us in future years. I think it really is going to play itself out over the next three to five years implementation whatever upgrades captives or commercials we'll need to do there'll be an implementation schedule that'll take a over the next three to five years.

And Noah, the only thing I'd add to that is that these MAX standards are air quality standards.

And the current administration has repeated many times clean air, clean water. And so this is I think nothing changes nothing slows here I think with the change administration because clearly what we're talking about here is Air Quality. Great stuff. Thanks very much guys. [indiscernible] Our next question comes from the line of Larry Solow with CJS Securities. Please proceed with your question.

Great. Good morning, everybody. First question, just on the Good morning. On the Environmental Services, I know you don't guide to margin. You spoke about margin expansion averaging looks like a little over 100 bps for the last four years. Sounds like a bunch of moving parts in 2025, a little bit of I guess, a tailwind still from HEPAKO.

Pricing made a little bit of a benefit and then there's obviously the ramp of may be a little bit of a negative impact. So how should we think sort of what are you incorporating Is that a little bit of a slowdown in margin expansion this year? You did mention overall margin expansion, so just trying to dissect by segment. Sure, Larry. Eric Douglass here. I'll take that one.

And certainly, I mean, I think margin expansion in our Environmental Services segment is just a highlight the last few years. I mean, 90 basis points delivered into 2024. More than 100 basis points in 2023. So it's been a great story. Kind of implicit in our guide for 2025, we do continue to have margin expansion, but at a slightly lower level. Given the midpoint of our guide. I think the puts and takes that you mentioned a moment ago, Larry, you're onto the right things. I do think we have a couple of headwinds built into the guide relative to our growing field services business. And really just not being able perhaps forecast some of the same level of large ER responses that we saw this year and perhaps a little degradation in margin there. And then also obviously, we're very excited about Kimball, but as that [indiscernible] it won't be as contributory to margins just because of the ramp up. So those are a couple of headwinds you kind of adjust for those, you're in that high kind of 60 to 90 basis points of improvement in the rest of the business. So again, great story. We're going to continue to do all the things around pricing, getting leverage from the network, cost cutting, all those things to continue to drive margin. [indiscernible] Got you.

And just on Kimball, you mentioned start up costs. Taking it a little bit slower this time around. I remember the go back in Eldorado, I guess, I think it was 2017. Were a little bit more hiccups than expected, but feels like lessons learned. I think this is a similar blueprint, but any color there Great.

Yes, sure Larry. As I mentioned in my script, [indiscernible] unit that we just completed and starting up in Kimball is really a replica of what we built in El Dorado. With design improvements.

So that is contributing to a smoother start up here of this unit than what we experienced in the El Dorado unit. Now the team is really doing a solid job. Of getting the unit online. It's [indiscernible] well, as I mentioned earlier, as we go through February here. So really excited about hitting our goals that we've laid out for that unit.

Great. And just last one, just follow-up on Noah's question, just on the PFAS. So obviously, a sounds like a significant and growing multi opportunity and I know you've spoken about bookings growing sequentially double digit, I think quarter over quarter for the last several years. You build in significant actual growth in revenue this year, are we still kind of in a somewhat of a holding Larry, I would say this that we did not build out build in a significant revenue growth associated with PFAS year over year. We continue we do continue to see an active pipeline a growing pipeline Our pipeline has been increasing about 20% quarter over quarter. So we have really had an active market there. In fact, We just had a nice opportunity of really the first state in the country securing AFFF collection So we're seeing activity across the board and the the prospects that we have are solid. But we did not really include anything very material Normal growth rates vary in the model. From what we've seen in the past few years. And we've made investments, as Eric said, [indiscernible] Got it. Thanks, Mike. Thanks, guys. Appreciate it. Thanks, Larry.

Thanks, Larry.

Our next question comes from the line of David Manthey with Baird.

Hi, guys. Good morning. First question is on SKSS. With the addition of Noble and the mothballing of California in 2024, what is the current nameplate base oil re refining input and output capacity of your system today?

Two sixty, I think the number is. About what it was. Last year has been kind of subtracted to Act one.

And in the fourth quarter of 'twenty three, what would be the comparable number there?

There's been between the acquisition of Noble, and the offset of Newark, it's far less about very comparable, Dave.

Okay.

All right. And Based on the guidance that you provided here, by segment, first off, is $80,000,000 does that seem in the ballpark corporate items in the first quarter? [indiscernible] lower than that, Dave.

Yes, okay.

All right. But regardless, when we look at the segments here, there's pretty significant jump in EBITDA to get from the first quarter to get to some sort of run rate that gets you to the full year EBITDA guidance in SKSS specifically And I'm wondering if you could talk through the factors that are impacting the first quarter that either go away or get better in some way from from 1Q to 2Q that gets you up to that sort of run rate, so you can hit that $140,000,000 for the year?

Sure, Dave. It's Eric. I'll answer the question here. You look at Q1 obviously in our guidance implied down from Q1 last year. Pricing certainly down, that's how we see it in Q1. But the other thing too is still have some of that higher cost inventory rolling through rolling through the numbers here in Q1. Mike emphasized in his comments, great job that the team has done changing to a higher charge for oil here. We'll begin seeing a lot of those benefits kind of late in the quarter and then on to Q2 and Q3. When hopefully pricing improves a little bit, still lower than last year. But certainly the run rate in SKSS in Q2 and Q3 improved because of that the better inventory costs. Yes. We're going to see better CFO pricing, kind of summer driving season [indiscernible] of the network as we roll out through Q1. Okay.

And then finally, ex HEPAKO, if we're looking just at organic growth in field and emergency response, what was the growth there? And then to round that out, Other than the softness you saw in 2024, why is it you expect growth in industrial services in 2025?

Dave, Eric here answering. And when you think about industrial services, we talk about in Q3 of last year that the refinery world in particular ratcheted down [indiscernible] The refinery turnaround number still hold in place, but what they the extent and size of their turnarounds was really constrained. And that affected us. What we're seeing so far this year is that our number of turnarounds that we already have booked for 2025 is up substantially. Hard to quantify total spend on that. Is a significant change So what we're seeing is that some of the things that most likely that were pushed from 2024 have to get done in 2025. So the team is has a pretty bullish outlook on what we have in the book so far, and how that business will be better and well is certainly some specialty things that go along with those turnarounds that we expect to have happen as well. So good early look at how 2024 is going to enhance and help a better position for industrial services in 2025.

And Dave, you asked about field service ex HEPAKO. I think organically for the year it's up high single digits, 7%, 8%. On a consolidated basis, [indiscernible] So that was definitely a driver of that 7% or 8%, a lot of it was from the larger projects we talked about. And we had a great year in project work Grandline worked that year and we're and we're forecasting that continuing to 2025.

I appreciate it. Thanks guys. [indiscernible] Our next question comes from the line of Brian Butler with Stifel.

Hey, good morning. Thanks for taking the questions. Just on the SK assets, when you think about the oil that you're collecting, how much are you over collecting versus what what the capacity is now? I think you just told us where that is, but much are you over collecting? And what's the safety margin on what you'd like to collect?

Put it that way. Brian, this is Mike.

I'll start and of the Eric's I'm sure Clean chime in if you want. We're not over collecting. We went aggressively at as we talked about in the call, we went aggressively on CFO pricing. And we're losing some gallons to do that. That led to the closure of the California re refinery. So I think that's that's what's happening. We've kind of drawn a line with the industry professionals who have been really very adamant about driving CFO pricing. And to some extent, we've lost some gallons. And that's okay. And so we are are certainly beyond the over collecting world. We're a little under collecting in the Namda to continue to be aggressive in that area around plants. Yes, Brian, just to build on that. One of the key things when we as we push so hard In the past, we were taking some gallons from some of our our partners, I'll call it, into our refineries. That we're also collectors in the used motor oil market. Those are the first ones to go. As we raise our prices there, We're not taking those gallons nearly to the extent that we passed from those competitors that or collectors that are off the market as well.

So The direct customers are the ones that we're really Managing collectively as a team to drive that right CFO rate.

And we're holding the line on those prices that we have not. We have no intent to change that.

Okay. And then On the captive incinerator, opportunity, can you maybe just refresh everybody on the size of that potential market and what's the reality of some of those converting in the next couple of years? Obviously, you're working with all of them, but again, let's just try to size that and understand how big because that's not built into any any of your is that it's not built into 2025, but is it part of your vision 2027 as well? It's Brian, just I'll give you a recap. It's really not part of our vision 2027. It's all opportunity. To size it today there is 41 active captive incinerators out there. All those captive incinerators continue to be our customers. We handle waste streams, and support their shutdowns when they occur.

About 20 of those have a probability that something may change with them, whether it's due to the changes in air regulations, or them evaluating their utilization and their cost structure, or all of the above. And the change in products that they might be making that affect the waste streams that go in all those types of things are in play. And it's it seems clear that there is an active opportunity with a few of them over the next three to five years. None of that is built into our thought process We just just like we did with three ms, we went through strategic reviews with them as partners to help evaluate what is the best path But we do see opportunities with them and to help them lower their cost structure and And we anticipate that continuing to be a trend, especially in light of [indiscernible] we have such redundancy in our incineration units to be able to handle anything that they need us to handle.

In our footprint. So good strong opportunities there we think.

Great. Thanks for taking the questions. Sure. Thanks, Brian. Our next question comes from the line of Jerry Revich with Goldman Sachs.

Please proceed with your question.

Hi, this is Adam on for Gary today. Good morning. Over the last five years, you folks have had a really strong focus on pricing for appropriate returns in industrial and field services. Can you just update us on how customer retention metrics are tracking in those businesses? Have you seen any change over the last twelve months Adam, yes, Eric here to begin. I'm sure my partners will add in We, as you mentioned, we've continued to price aggressively in the market with our field services and industrial to make sure that the returns that we're getting in those businesses is commensurate with the passage associated with those services. And we've seen strong solid results with the teams implementing that. We've obviously stayed ahead of inflation as well. When we look at the overall market basket of customers, I can name on one one hand, that of those customers that we've decided proactively to walk away with. That weren't willing to accept what we were doing and help work with us And so small, small attrition of customers overall.

No real change in customer churn.

Based on price increases. That's the punchline. No change.

Understood. And then in SKSS, [indiscernible] CFL will take some time to flow through the financials, but are you fully caught up on your base oil market pricing? Are there any other front end actions that can be taken or are we fully caught up at this point?

Yes. This is Mike. I'll answer the question. Basal pricing has come down. We're a price taker in that marketplace. And it's really hard for us to predict what's going to happen to base oil price. Now as we think about our guidance, we don't assume that pricing [indiscernible] tick in the back half of the year, but really we're assuming kind of where we are today. It's the best we can do. And if Adam you're kind of referring to our pricing relative to used motor oil collection and if we're caught up there, that is something that we'll be dynamic and flexible on. Based upon the base oil pricing that Mike just alluded to. So we continue to see deterioration in base oil, we'll counteract that through our used motor oil collection pricing. So, that's the other variable there. Great. Thanks so much. Our next question comes from the line of Tobey Sommer with Truist. Please proceed with your question. Good morning. This is Tyler Barish on for Tivity. Clean you just explain the impact of the Trump administration's tariff policy on your business? Potential incremental risk to refining margins or environmental services demand. [indiscernible] We do not think that there is going to be any material effect on regulations that really are the foundation of the business.

They go back such a long time And there isn't any anticipation that we would see or even think rollbacks and regulations that would affect our business. I think In fact, as the Trump administration has changed, new EPA leader. He's been talking about how he wants to help solve their issues and grow by onshoring and helping with permits on manufacturing and and really supporting the business and hopefully taking care of getting more regulations in place around PFAS. So the we don't see any step backward on any of the regulatory environment parameters that affect our business. Got it. And maybe just a little more broadly, can you talk about demand trends by customer vertical, whether it's refineries or global chemical companies. Sure, Tyler. We still see very strong demand across the board. The refinery business what's going on there? As we've mentioned in the past, has affected the later half of twenty twenty four with turnarounds.

As we mentioned earlier in the call here, are seeing a stronger count of [indiscernible] That continues to be influx a little. The rest of the markets that we're servicing particularly around chemical, retail, manufacturing, we still see strong growth. Our collection volumes of containerized waste as we begin 2025 Our single digit, high single digits ahead of last year. So that's positive. Team is doing a great job making sure that we're staying tight with our customers servicing them well, making sure we're staying in contact with them and we see that in the early stages here. Our collections. And as Eric alluded to earlier that there are some normal effects in Q1 weather that affect certain areas, but Overall, the verticals that we're servicing and it's obviously a broad range verticals, we're seeing some solid trends though.

Thank you.

Our next question comes from the line of Jim Ricchiuti with Needham. Please Hi, good morning. This is Chris Granga on for Jim. You'd mentioned that you'd signed the first fleet customer for the oil at the end of the year. Is there a collection arrangement in conjunction with that? And could you talk a little bit about the funnel for similar types of fleet opportunities as you enter the New Year? Thanks. Chris, this is Mike. I'll answer that. So yes, that's exactly what happened. So we have as far as the more circular offering, we [indiscernible] cash flow customer site and sell them base oil at a little bit of a premium versus the market rate because it's Because it's low carbon footprint offering. And so that that is how the more circular offering works. The capital team has put a fair amount of sales and marketing effort behind it. They've been investing a lot in different avenues to try to grow that. And we do think that there's plenty of opportunity to see a lot of lines in the water. The pipeline is very strong. And the progress that they're making to sell the more circuit, they're offering the As I said in my prepared remarks, I did sign up one very large customer.

I think they have another one very Clean. To being complete and there's more in the pipeline. So stay tuned. I do that we work very actively with them as far as as we go to market together and sell our services, and sell our grade base well. And so I think that been a good partnership so far. And as you know, Chris, the lead time on large Clean chance is is long. So that's part of the challenge here. But I think the progress has been Got it. Thank you. And you had mentioned the expansion in Phoenix related to to the semiconductor vertical. I'm just curious, are you evaluating other potential geographic nodes where there are semiconductor fabs underway.

Yes, we certainly are, Chris. The expansion that would our customer base out in the Phoenix area has been really strong so far. We fully anticipate that's going to [indiscernible] And then on a couple of other select geographies, we have strong opportunities as well, growing relationships with customers there. So it's been an area that we see growth Great.

Thank you.

Thank you.

Mr. Gersenberg, we have no further questions at this time. I'd like to turn the floor back over to you for closing comments. Thank you, Christine. I want to thank the Clean Harbors team for their great work in 2024.

At 25,000 strong, their focus on safety sustainability and exceeding customer expectations. Led to another year of great results and positions us well for continued growth. We hope to see you all at our investor conferences in the coming weeks. Have a good rest of your week and most of all please stay safe.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. [indiscernible] [indiscernible]