Strategic Drivers
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A record quarterly security performance was achieved with an incident rate of 0.39, which management is investing in technology acquisitions and investments.
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Environmental services (ES) growth was driven by a 34% increase in waste disposal volumes and strong emergency response activity, including one $10 million event.
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The company introduced a PFAS management framework aimed at helping clients navigate legal uncertainty and make economic treatment decisions.
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Safety-Kleen Sustainable Solutions (SKSS) has successfully revolutionized the ‘oil charge’ model, more than doubling rates year over year to accommodate market volatility.
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Management noted that while Industrial Services is being challenged by refiners prioritizing fuel production over maintenance, the majority of ES came out in March with 10% revenue growth.
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The company uses AI to improve waste classification and invoice verification, building on a technology strategy launched in 2017.
2026 Strategic Outlook & Direction
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Raised 2026 adjusted EBITDA guidance to $1.24 billion–$1.30 billion, reflecting strong oil price performance and strong ES demand.
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Burner utilization is expected to reach mid to high 80% for the full year as major maintenance cycles are completed.
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He plans to open 10 field service branches by 2026 to capture sales opportunities in the company’s 60 different locations.
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The guidance assumes that SKSS will deliver $165 million in EBITDA, although management has warned that the timing of international conflicts is causing oil prices to fluctuate.
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It expects PFAS-related revenue growth to accelerate to a 25% to 35% range as regulatory recommendations for incineration and landfilling move the pipeline forward.
Important Investments and Risks
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Increased CapEx guidance for 2026 to $350 million to $410 million, in the middle of $380 million, to fund rapid growth opportunities in select regional markets.
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The Kimball incinerator expansion is meeting financial targets, with its EBITDA contribution expected to increase by $10 million to $15 million over the $10 million achieved by 2025.
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The regional softness identified in Industrial Services as a headwind, as refiners slow full replacements to increase current production spreads.
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Maintains a structured M&A strategy focused on ‘inflow’ of sustainable resources and accumulation networks within the ES segment.
Highlights of the Q&A Session
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Oil price stability in a growing market
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Executives said they were ‘reluctant’ to roll back price gains after a painful 18-month change to the oil charging model.
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The strategy is to remain selective to ensure volume flow while maintaining a service-based cost structure regardless of base oil price cycles.
The impact of the Middle East conflict on performance and demand
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The conflict did not cause operational disruptions but caused a ‘temporary pop’ in US manufacturing as customers prioritized closer supply chains.
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The rising cost of diesel is largely offset by the monthly re-imbursement fee, making the impact of the Environmental Works negligible.
Changing the cadence of Refinery and Industrial Services
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Current refining activity is characterized by ‘stops’ rather than major shifts as customers increase production of high-quality fuel.
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The management does not include a major recovery of the change in the guidance of the second half, to maintain the year-to-year projections of this sub-section.
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