Stock Buzz: US Ecology Inc. (NASDAQ: ECOL)

Alton Simmons

BOISE, Idaho, January 22, 2020 – Shares of US Ecology Inc. (NASDAQ: ECOL) inclined 1.20% to $55.44. The stock grabbed the investor’s attention and traded 184.796K shares as compared to its average daily volume of 184.81K shares. The stock’s institutional ownership stands at 88.00%.

US Ecology Inc. (NASDAQ: ECOL) reported total revenue of $167.40M and net income of $13.10M, or $0.59 per diluted share, for the quarter ended September 30, 2019.  Adjusted earnings per diluted share as defined in Exhibit A of this release, was $0.75 per diluted share in the third quarter of 2019, up from $0.71 per diluted share in the third quarter of 2018.

Total revenue for the third quarter of 2019 was $167.40M, up 11% from $151.40M in the same quarter last year and up 7% on an organic basis (excluding the 2018 Dallas/Midland, Winnie and Sarnia acquisitions). Revenue for the Environmental Services (“ES”) segment was up 14% to $122.20M for the third quarter of 2019 compared to $107.20M in the third quarter of 2018. This increase consisted of 19% growth in treatment and disposal (“T&D”) revenue, partially offset by a 2% decrease in transportation revenue when compared to the third quarter of 2018. Revenue for the Field and Industrial Services (“FIS”) segment was $45.20M for the third quarter of 2019, up 2% from $44.20M in the same quarter last year, reflecting our acquisition of the Dallas and Midland, Texas locations in August of 2018 and our acquisition of the Sarnia, Ontario location in August of 2019.

Gross profit for the third quarter of 2019 was $56.50M, up 20% from $47.30M in the same quarter last year. Gross profit for the ES segment was $49.40M in the third quarter of 2019, up from $39.90M in the same quarter of 2018. T&D gross margin for the ES segment increased to 47% in the third quarter of 2019 compared to 43% in the third quarter of 2018, in part due to $2.60M in business interruption insurance recoveries recorded in the third quarter of 2019 related to the Idaho facility.  Gross profit for the FIS segment in the third quarter of 2019 was $7.20M. This compares to gross profit of $7.40M in the third quarter of 2018. FIS gross margin was 16% for the third quarter of 2019 compared to 17% in the third quarter of 2018.

Selling, general and administrative (“SG&A”) expense for the third quarter of 2019 was $33.30M compared with $23.60M in the same quarter last year. The increase was partially due to $4.00M in business development expenses primarily associated with the pending merger with NRC Group Holdings Corp. (“NRCG”), increased labor and incentive compensation, increased property taxes, and higher intangible asset amortization related to 2018 acquisitions.

Operating income for the third quarter of 2019 was $23.20M, up 16% from $20.00M in the third quarter of 2018.  During the third quarter of 2018, the Company recognized a $3.70M goodwill and intangible asset impairment charge on its mobile solvent recycling business within our ES segment as a result of declining business and cash flows.

Net interest expense for the third quarter of 2019 was $3.70M, up from $3.00M in the third quarter of 2018. The increase was the result of higher outstanding debt levels in the third quarter of 2019 due to the acquisitions completed in 2018 and in 2019.

Net income for the third quarter of 2019 was $13.10M, or $0.59 per diluted share, compared with net income of $13.40M, or $0.61 per diluted share, in the third quarter of 2018. Adjusted earnings per diluted share was $0.75 per diluted share in the third quarter of 2019 compared with $0.71 per diluted share in the third quarter of 2018.

Adjusted EBITDA for the third quarter of 2019 was $37.40M, up 5% from $35.60M in the same quarter last year. Pro Forma adjusted EBITDA, which excludes business development expenses, was $41.50M in the third quarter of 2019, up 16% from $35.80M in the third quarter of 2018.

ECOL has a market value of $1.61B while its EPS was booked as $2.26 in the last 12 months. The stock has 29.01M shares outstanding. In the profitability analysis, the company has gross profit margin of 30.60% while net profit margin was 8.20%. Beta value of the company was 0.55; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.20.

Alton Simmons

Alton Simmons

I am Alton Simmons and I focus on breaking news stories and ensuring we (“Tech Business Week”) offer timely reporting on some of the most recent stories released through market wires about “Industrial Goods” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Tech Business Week specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 1075 Ashton Lane Lampasas, TX 76550, USA Phone: (+1) 512-566-9658 Email: Altonsimmons@techbusinessweek.com