US Ecology, Inc. (ECOL) Q2 2010 Earnings Conference Call July 27, 2010 10:00 AM ET Executives Jeff Feller – VP & CFO Jim Baumgardner – President and CEO Steve Welling – SVP, Sales and Marketing Simon Bell – VP, Operations Analysts Rich Wesolowski – Sidoti & Company Ted Kundtz – Needham and Company Jamie Sullivan – RBC Capital Markets Al Kaschalk – Wedbush Securities Patt Mclaughlin – UBS Eric Prouty – Canaccord Michael Hoffman – Wonder League Securities Presentation Operator
Management cannot control or predict many factors that determine future results. Listeners should not place undue reliance on forward-looking statements which reflect management’s views only on the date such statements are made. We undertake no obligation to revise or update any forward-looking statements or to make other forward-looking statements whether as a result of new information, future events, or otherwise.For those joining by webcast, you can follow along with today’s presentation. For those listening by phone, you can obtain a copy of today’s presentation at our website at www.usecology.com. Now I’ll turn the call over to Jim. Jim Baumgardner Thank you, Jeff and good morning, everyone. As outlined on our agenda on slide four of our webcast PowerPoint presentation. I’ll start this morning’s call with a quick overview of the quarter results released earlier today. After which time I’ll turn the call back to Jeff to provide a more detailed view on the financial results. Then I’ll let Steve Welling provide a general market update including an overview of our recent award announcement with General Electric. I mean, I’ll close today’s call and our prepared remarks with an update on the outlook for the balance of 2010. As noted on Slide 5, and as expected, the second quarter continued to be sluggish. But it did show signs of improvement. Our recurring business was up 7% as compared to the second quarter of last year and up 3% on a sequential basis when compared to the first quarter of 2010. However, our event business was down 48% during the quarter when compared to the second quarter of last year primarily due to completed Honeywell project in 2009. When the revenue contribution from the Honeywell is excluded from the second quarter of 2009, our event business was only down about 1% in the second quarter. Sequentially, the event business was down 12% compared to the first quarter of 2010 due to the completion of a project in Q1 that was not fully replaced in Q2. Despite the softness in the event business during the quarter, our Q2 2010 pipeline is robust. Several deferred projects are expected to shift in the second half as is the recently announced GE as an inert project.
For the second quarter of 2010, net income was $2.3 million or $0.13 per diluted share as compared to $3.5 million or $0.19 per diluted share in the same quarter last year. To help with this quarter’s earnings in perspective, we estimate that Honeywell contributed $0.09 per share for the second quarter of 2009. So our core business excluding Honeywell generated $0.13 per share which was actually 30% better than the EPS generated in the same quarter last year excluding Honeywell again.Q2 2010 was also better than Q1 of 2010. When we posted $0.10 per share compared to the $0.13 in Q2. With that quick overview, I’ll turn the call back to Jeff to provide a more detailed overview of the financial results released earlier today. Jeff Feller Thank you. Jim. As you can see on slide six of today’s presentation, second quarter 2010 revenue was $19.8 million as compared to $36.4 million in the same quarter last year. This reflects an 83% quarter-over-quarter decline in transportation service revenue and a 19% decline in treatment and disposal revenue. Declines in total revenue were primarily a result of the completion of the Honeywell in in October 2009. Honeywell contribute to $18.5 million in total revenue or 51% of total revenue in the second quarter of 2009. Excluding the Honeywell revenue contribution from the second quarter of 2009, total revenue in the second quarter of 2010 was up 11% from the same quarter last year. As Jim noted, treatment and disposal revenue from recurring customers or base business increased 7% in the second quarter of 2010 over the same quarter last year. An increased shipments from our refinery, other industry, government and broker paid customers. Event business was 48% lower in the second quarter of 2010 than the same quarter last year reflecting the completion of the Honeywell project. Read the rest of this transcript for free on seekingalpha.com