us ecology, inc. q2 2019 earnings conference call/media/files/u/us-ecology-ir … · 3 during the...

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US Ecology, Inc.Q2 2019 Earnings Conference Call

August 2, 2019

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Today’s Hosts

Jeff Feeler

Chairman & Chief Executive Officer

Eric Gerratt

Executive Vice President & Chief Financial Officer

Simon Bell

Executive Vice President and Chief Operating Officer

Steve Welling

Executive Vice President of Sales and Marketing

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During the course of this presentation the Company will be making forward-looking statements (as such term is defined in thePrivate Securities Litigation Reform Act of 1995) that are based on our current expectations, beliefs and assumptions about theindustry and markets in which US Ecology, Inc. and its subsidiaries operate.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based onmanagement’s beliefs and assumptions, which in turn are based on currently available information. Important assumptionsinclude, among others, those regarding demand for Company services, expansion of service offerings geographically orthrough new or expanded service lines, the timing and cost of planned capital expenditures, competitive conditions andgeneral economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known andunknown risks and uncertainties, which could cause actual results to differ materially from those contained in anyforward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include an accidentat one of our facilities, incidents resulting from the handling of dangerous substances, the loss or failure to renew significantcontracts, competition in our markets, adverse economic conditions, our compliance with applicable laws and regulations, therealization of anticipated benefits from acquired operations, our ability to perform under required contracts, limitations on ouravailable cash flow as a result of our indebtedness, liabilities arising from our participation in multi-employer pension plans, cybersecurity threats, unanticipated changes in tax rules and regulations, loss of key personnel, a deterioration in our labor relations orlabor disputes, our ability to pay dividends or repurchase stock, anti-takeover regulations, stock market volatility, our access toinsurance, surety bonds and other financial assurances, our litigation risk not covered by insurance, the replacement of non-recurring event projects, our ability to permit and contract for timely construction of new or expanded disposal space, renewalsof our operating permits or lease agreements with regulatory bodies, our ability or the timing of reconstructing and receivingregulatory approvals for the reopening of the Grand View, Idaho treatment facility, the timing or amount of insurance recoveriesassociated with the reconstruction and business interruption losses for the Grand View, Idaho treatment facility, our access tocost-effective transportation services, lawsuits, our implementation of new technologies, fluctuations in foreign currency markets,foreign affairs and other factors described under “Risk Factors” and “Cautionary Statements Regarding Forward-LookingStatements” in a registration statement on Form S-4 dated July 31, 2019, filed by US Ecology Parent, Inc., with the Securities andExchange Commission (“SEC”).

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC,we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe thatthe expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.Before you invest in our common stock, you should be aware that the occurrence of the events described in the “Risk Factors”section in this report could harm our business, prospects, operating results, and financial condition.

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Safe Harbor

4

Highlights

Financial Review

― Q2 2019

― Q2 2019 YTD

― Financial Position, Cash Flow & Return Metrics

2019 Business Outlook

Questions & Comments

Appendix: Financial Results & Reconciliations

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Agenda

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Revenues up 14% to $155.8 million

• 9% organic revenue growth1

Environmental Services segment revenue grew 14%

• 11% organic revenue1 growth

• Strong Base Business revenue growth of 7%

• Event Business up 34%

Field and Industrial Services segment revenue grew 13%

• Organic growth1 of 2%

• Organic growth1 driven by transportation and logistics and industrial services

• Prior year acquisitions contributed to growth

• Headwinds in total waste management, remediation and startup costs with new

service centers

Pro forma adjusted EBITDA2 up 20% to $37.9 million

• $1.5 million of Idaho business interruption (“BI”) recognized during quarter for

period of November 17 to March 31, 2019.

• Expect another $2.5 million - $3.5 million from this same period

• Additional BI for April 1, 2019 forward expected to be recognized

Idaho regained 95% of full capabilities as of June 2019

• 15% organic revenue growth1 excluding Idaho

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Q2-19 Highlights

1Organic growth excludes the 2018 acquisitions of US Ecology Dallas/Midland and US Ecology Winnie from the 2019 operating results2 See definition and reconciliation of adjusted EBITDA , Pro forma adjusted EBITDA and adjusted earnings per diluted share on pages 17- 25 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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Financial

Review

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Q2-19 Financial Review

Total revenue $155.8 million, up 14% (9% organic1)

compared with $136.9 million last year

ES revenue $112.8 million up 14% (11% organic1)

compared to $99.0 million in prior year

• 16% higher treatment and disposal revenue

– Base business up 7% compared to Q2-18

– Event business up 34% compared Q2-18

– Excluding Idaho, Base up 10% and Event up 47%

• 9% higher transportation revenue

FIS revenue $43.0 million, up 13% (2% organic1)

from $38.0 million in prior year

• Reflects acquired field and industrial services

group based out of Dallas and Midland, TX

• Organic growth1 in transportation and industrial

services helped to offset softness in total waste

management, remediation and startup costs

associated with recently opened service centers

1Organic growth excludes the 2018 acquisitions of US Ecology Dallas/Midland and US Ecology Winnie from the 2019 operating results

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(in t housands)

Environmental

Services

Field & Industrial

ServicesTotal

Environmental

Services

Field & Industrial

ServicesTotal

Treatment & Disposal Revenue 90,379$ 3,133$ 93,512$ 78,093$ 2,902$ 80,995$

Service Revenue:

Transportat ion and Logist ics 22,465 12,760 35,225 20,867 7,598 28,465

Industrial Services - 4,963 4,963 - 4,506 4,506

Small Quantity Generation - 9,326 9,326 - 9,138 9,138

Total Waste Management - 8,004 8,004 - 9,019 9,019

Remediation - 889 889 - 3,968 3,968

Emergency Response - 3,180 3,180 - 749 749

Other - 703 703 - 72 72

Total Revenue 112,844$ 42,958$ 155,802$ 98,960$ 37,952$ 136,912$

Three Months Ended June 30,

2019 2018

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Percent Change

Q2 '19 Q2 '18 Q2 '19 vs. Q2 '18

Metal Manufacturing 18% 17% 15%

Chemical Manufacturing 17% 14% 33%

Broker / TSDF 13% 14% 3%

General Manufacturing 11% 12% 6%

Government 11% 6% 95%

Refining 9% 11% -3%

Transportation 3% 3% 29%

Utilities 3% 3% 1%

Waste Management & Remediation 2% 4% -49%

Mining and E&P 2% 2% -21%

Other 11% 14% -8%

Base Event

Metal Manufacturing 6% 63%

Chemical Manufacturing -6% 125%

Broker / TSDF 3% 0%

General Manufacturing 14% -96%

Government 24% 136%

Refining 13% -99%

Transportation 27% 49%

Utilities 23% -40%

Waste Management & Remediation -25% -100%

Mining and E&P -12% -100%

Other 10% -81%

Environmental Services T&D Revenue by Industry

Percent of Total

Environmental Services T&D Revenue by Industry

% Change - Q2 '19 vs. Q2 '18

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Gross profit of $49.6 million, up 20% from $41.4 million in Q2-18

• ES gross profit of $43.1 million, up from $35.9 million in Q2-18 (includes $2.2 million in business interruption insurance proceeds)

– T&D margin of 45% compared with 42% in Q2-18

• FIS gross profit of $6.5 million, up from $5.5 million in Q2-18

– FIS margin of 15%, consistent with Q2-18

SG&A of $24.0 million compared with $21.2 million in Q2-18

• $2.5 million business development expenses primarily associated with NRCG

• $4.5 million benefit from property insurance recoveries

• Excluding business development and property insurance recoveries, SG&A would have been

up 23% as a result of higher labor and incentive compensation, increased property taxes and higher intangible asset amortization

Operating income of $25.5 million, up 26% from $20.3 million in Q2-18

Net interest expense of $3.4 million, up from $2.9 million in Q2-18

• Higher borrowings in Q2-19 and higher interest rates on variable portion of credit facility

Net income of $15.5 million, or $0.70 per diluted share, compared with $13.2 million, or $0.60 per diluted share, in Q2-18

Adjusted EPS1 of $0.66 per diluted share compared with $0.61 per diluted share in Q2-18

Adjusted EBITDA1 of $35.4 million, up 12% from $31.7 million in Q2-18; Pro Forma adjusted EBITDA1

of $37.9 million, up 20% from $31.7 million in Q2-18

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1See definition and reconciliation of adjusted earnings per diluted share, adjusted EBITDA and Pro Forma adjusted EBITDA on pages 17- 25 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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• Total revenue of $286.8 million, up 12% from $257.0 million for the same period last year

― ES revenue of $205.2 million, up 11% from $185.4 million for the same period last year

12% increase in T&D revenue; 8% increase in transportation revenue

― FIS revenue of $81.7 million, up 14% from $71.5 million for the same period last year

• Gross profit of $84.8 million, up 10% from $77.1 million for the same period last year

― ES gross profit of $74.6 million, up from $68.4 million for the same period last year

T&D margin of 42%, up from 41% for the same period last year

― FIS gross profit of $10.2 million, up from $8.8 million for the same period last year

FIS gross margin of 12%, consistent with the same period last year

• SG&A of $44.4 million compared with $43.4 million for the same period last year

$2.7 million business development expenses as well as increased labor and incentive

compensation, property taxes and intangible asset amortization

Partially offset by $9.2 million in property insurance recoveries

• Operating income of $40.5 million, up 20% from $33.7 million for the same period last year

• Net interest expense of $7.2 million, up from $5.7 million for the same period last year

• Net income of $23.5 million, or $1.06 per diluted share, compared with $22.5 million, or $1.02 per diluted

share, for the same period last year

• Adjusted EPS1

of $0.88 per diluted share compared with $0.96 per diluted share for the same period last year

• Adjusted EBITDA1

of $59.0 million, up 5% from $56.2 million for the same period last year; Pro Forma adjusted

EBITDA1

of $61.7 million, up 10% from $56.2 million for the same period last year

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YTD Financial Review

1See definition and reconciliation of adjusted earnings per share, adjusted EBITDA and Pro Forma adjusted EBITDA on pages 17-25 of this presentation or attached as Exhibit A to our earnings release filed with the SEC on Form 8-K

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YTD Financial Review

(in t housands)

Environmental

Services

Field & Industrial

ServicesTotal

Environmental

Services

Field & Industrial

ServicesTotal

Treatment & Disposal Revenue 168,092$ 5,929$ 174,021$ 150,802$ 5,549$ 156,351$

Service Revenue:

Transportat ion and Logist ics 37,085 19,852 56,937 34,629 13,248 47,877

Industrial Services - 10,980 10,980 - 8,385 8,385

Small Quantity Generation - 17,515 17,515 - 17,465 17,465

Total Waste Management - 16,719 16,719 - 19,241 19,241

Remediation - 2,616 2,616 - 6,158 6,158

Emergency Response - 6,226 6,226 - 1,391 1,391

Other - 1,825 1,825 - 103 103

Total Revenue 205,177$ 81,662$ 286,839$ 185,431$ 71,540$ 256,971$

Six Months Ended June 30,

2019 2018

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Financial Position & Cash Flow Metrics

Net borrowings on credit

agreement = $316.3

million

Working capital = $96.8

million

YTD cash generated from

operations = $38.9 million

YTD capital expenditures =

$24.7 million

YTD payments on long-

term debt = $30.0 million

YTD dividends paid = $7.9

million

YTD free cash flow1 = $23.7

million

1See reconciliation of free cash flow on page 25 of this presentation

(in t housands) June 30, 2019 December 31, 2018

Assets

Current Assets:

Cash and cash equivalents 17,690$ 31,969$

Receivables, net 150,037 144,690

Other current assets 18,599 18,009

Total current assets 186,326 194,668

Long-term assets 775,090 753,230

Total assets 961,416$ 947,898$

Liabilities and Stockholders’ Equity

Current Liabilit ies:

Accounts payable, accrued liabilit ies,

income taxes payable 69,418$ 70,515$

Deferred revenue 12,985 10,451

Current port ion of closure and post-

closure obligations 2,231 2,266

Other current liabilit ies 4,932 -

Total current liabilities 89,566 83,232

Long-term debt 334,000 364,000

Long-term closure and post-closure

obligations 77,688 76,097

Other liabilit ies 83,403 65,352

Total liabilities 584,657 588,681

Stockholders’ Equity 376,759 359,217

Total liabilities and stockholders' equity 961,416$ 947,898$

Working Capital 96,760$ 111,436$

Selected Cash Flow Items: 2019 2018

Net cash provided by operating activit ies 38,874$ 48,010$

Free cash flow 1

23,717$ 33,050$


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2019 Business OutlookReaffirming guidance issued in February

Revenue expected to range between $583 to $627 million

• ES Segment: $408 to $438 million

• Base Business growth now expected to range from 5% - 7%

• Event Business outlook unchanged; Strong pipeline supports strong growth outlook

• FIS Segment: $175 to $189 million

Pro forma adjusted EBITDA expected to range from $135 to $145 million

Adjusted earnings per diluted share to range from $2.09 to $2.41 per share

Other Guidance Metrics:

• Capital expenditures reaffirmed at $55 to $60 million (excluding Idaho rebuild)

• Full year D&A expected to be $47 million

• Interest expense expected to be $16 million

• Full year tax rate expected at 29%

• Free cash flow expected between $45 and $50 million

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Questions and

Comments

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Appendix

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US Ecology reports adjusted EBITDA, Pro Forma adjusted EBITDA, adjusted earnings per dilutedshare and free cash flow results, which are non-GAAP financial measures, as a complement toresults provided in accordance with generally accepted accounting principles in the UnitedStates (GAAP) and believes that such information provides analysts, stockholders, and other usersinformation to better understand the Company’s operating performance. Because adjusted

EBITDA, Pro Forma adjusted EBITDA, adjusted earnings per diluted share and free cash flow are notmeasurements determined in accordance with GAAP and are thus susceptible to varyingcalculations they may not be comparable to similar measures used by other companies. Itemsexcluded from adjusted EBITDA, Pro Forma adjusted EBITDA, adjusted earnings per diluted shareand free cash flow are significant components in understanding and assessing financialperformance.

Adjusted EBITDA, Pro Forma adjusted EBITDA, adjusted earnings per diluted share and free cashflow should not be considered in isolation or as an alternative to, or substitute for, net income,cash flows generated by operations, investing or financing activities, or other financial statementdata presented in the consolidated financial statements as indicators of financial performance orliquidity. Adjusted EBITDA, Pro Forma adjusted EBITDA, adjusted earnings per diluted share and freecash flow have limitations as analytical tools and should not be considered in isolation or asubstitute for analyzing our results as reported under GAAP.

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Non-GAAP Financial Measures

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Adjusted EBITDA

The Company defines adjusted EBITDA as net income before interest expense, interest income, income tax expense/benefit, depreciation, amortization,

share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, property insurance recoveries, non-cash property

and equipment impairment charges and other income/expense, which are not considered part of usual business operations.

Pro Forma Adjusted EBITDA

The Company defines Pro Forma adjusted EBITDA as adjusted EBITDA (see definition above) plus business development expenses incurred during the

period. We believe Pro Forma adjusted EBITDA is helpful in understanding our business and how it relates to our 2019 guidance which does not include

business development expenses.

Adjusted Earnings Per Diluted Share

The Company defines adjusted earnings per diluted share as net income adjusted for the after-tax impact of property insurance recoveries, non-cash

property and equipment impairment charges, the after-tax impact of business development expenses, the after-tax impact of the gain on the issuance

of a property easement, and foreign currency gains or losses, divided by the number of diluted shares used in the earnings per share calculation.

Property and equipment impairment charges excluded from the earnings per diluted share calculation are related to the Company’s write-off of the net

book value of damaged or destroyed property and equipment as a result of the accident at our Grand View, Idaho facility in November of 2018 while

property insurance recoveries relate to payments received for the insured value of the damaged or destroyed property and equipment as a result of the

accident. The easement gain relates to the issuance of an easement on a small portion of owned land at an operating facility which should not hinder

our future use. Business development expenses relate to costs incurred to evaluate businesses for potential acquisition or costs related to closing and

integrating successfully acquired businesses. The foreign currency gains or losses excluded from the earnings per diluted share calculation are partially

related to unrealized gains or losses primarily associated with intercompany loans between our Canadian subsidiaries and the U.S. parent which have

been established as part of our tax and treasury management strategy. These intercompany loans are payable in Canadian dollars (“CAD”) requiring us

to revalue the outstanding loan balance through our consolidated income statement based on the CAD/United States currency movements from

period to period. Foreign currency gains or losses also include realized gains and losses associated with the settlement of transactions denominated in a

foreign currency.

We believe excluding the non-cash property and equipment impairment charges, the property insurance recoveries, the gain on issuance of a property

easement, the after-tax impact of business development expenses, and non-cash foreign currency translation gains or losses provides meaningful

information to investors regarding the operational and financial performance of the Company.

Free Cash Flow

The Company defines free cash flow as net cash provided by operating activities less purchases of property and equipment, net of insurance proceeds

received from damaged property and equipment.

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Non-GAAP Financial Measures - Definitions

1919

Financial Results: Q2-19 vs. Q2-18

1Includes pre-tax business development expenses of $2.5 million and $18,000 for the three months ended June 30, 2019 and 2018, respectively.

(in t housands, except per share dat a) 2019 2018 $ Change % Change

Revenue $ 155,802 $ 136,912 $ 18,890 13.8%

Gross profit 49,583 41,448 8,135 19.6%

SG&A1

24,049 21,156 2,893 13.7%

Operating income1 25,534 20,292 5,242 25.8%

Interest expense, net (3,386) (2,868) (518) 18.1%

Foreign currency loss (384) (139) (245) 176.3%

Other income 122 193 (71) -36.8%

Income before income taxes 21,886 17,478 4,408 25.2%

Income tax expense 6,395 4,258 2,137 50.2%

Net income $ 15,491 $ 13,220 $ 2,271 17.2%

Earnings per share:

Basic $ 0.70 $ 0.60 $ 0.10 16.7%

Diluted $ 0.70 $ 0.60 $ 0.10 16.7%

Shares used in earnings per share calculation:

Basic 22,006 21,867

Diluted 22,208 22,024


2020


1Includes pre-tax business development expenses of $2.5 million and $18,000 for the three months ended June 30, 2019 and 2018, respectively.

(in t housands) 2019 2018 $ Change % Change

Adjusted EBITDA / Pro Forma adjusted EBITDA Reconciliation

Net income 15,491$ 13,220$

Income tax expense 6,395 4,258

Interest expense, net 3,386 2,868

Foreign currency loss 384 139

Other income (122) (193)

Depreciat ion and amort izat ion 9,129 7,044

Amort izat ion of intangibles 2,863 2,296

Share-based compensation 1,245 1,011

Accret ion and non-cash adjustments

of closure & post-closure obligations 1,133 1,081

Property insurance recoveries (4,500) -

Adjusted EBITDA1 35,404$ 31,724$ 3,680$ 11.6%

Business development expenses 2,530 18

Pro Forma adjusted EBITDA 37,934$ 31,742$ 6,192$ 19.5%

Adjusted EBITDA by Operating Segment:

Environmental Services 47,056$ 39,860$ 7,196 18.1%

Field & Industrial Services 5,022 4,562 460 10.1%

Corporate1

(16,674) (12,698) (3,976) 31.3%

Total 35,404$ 31,724$ 3,680$ 11.6%


2121


(1) In the first quarter of 2019, the Company conformed the amount of the foreign currency gains or losses included in the calculation of adjusted earnings per diluted share with the amount of the foreign currency gains or losses included in the calculation of adjusted EBITDA and Pro forma adjusted EBITDA. In previous quarters only non-cash translation gains or losses were included in the calculation of adjusted earnings per diluted share while total foreign currency gains or losses were included in the calculation of adjusted EBITDA and Pro forma adjusted EBITDA. The calculation of adjusted earnings per diluted share for the second quarter of 2019 has been updated to include total foreign currency losses resulting in no change to adjusted earnings per share from what was previously reported in our earnings release for the quarter ended June 30, 2018.

(in t housands, except per share dat a)

Adjusted Earnings Per Share Reconciliation

Income before

income taxes

Income

tax

Net

income

per

share

Income before

income taxes

Income

tax

Net

income

per

share

As reported 21,886$ (6,395)$ 15,491$ 0.70$ 17,478$ (4,258)$ 13,220$ 0.60$

Adjustments:

Less: Property insurance recoveries (4,500) 1,315 (3,185) (0.14) - - - -

Plus: Business development expenses 2,530 (399) 2,131 0.09 18 (4) 14 -

Foreign currency loss (1)

384 (112) 272 0.01 139 (34) 105 0.01

As adjusted 20,300$ (5,591)$ 14,709$ $ 0.66 17,635$ (4,296)$ 13,339$ $ 0.61

Shares used in earnings per diluted share calculat ion 22,208 22,024


2019 2018

2222

Financial Results: 6mo. 2019 vs. 6mo. 2018

1Includes pre-tax business development expenses of $2.7 million and $29,000 for the six months ended June 30, 2019 and 2018, respectively.

(in t housands, except per share dat a) 2019 2018 $ Change % Change

Revenue $ 286,839 $ 256,971 $ 29,868 11.6%

Gross profit 84,824 77,119 7,705 10.0%

SG&A1

44,354 43,388 966 2.2%

Operating income1 40,470 33,731 6,739 20.0%

Interest expense, net (7,209) (5,653) (1,556) 27.5%

Foreign currency loss (523) (153) (370) 241.8%

Other income 232 2,316 (2,084) -90.0%

Income before income taxes 32,970 30,241 2,729 9.0%

Income tax expense 9,436 7,778 1,658 21.3%

Net income $ 23,534 $ 22,463 $ 1,071 4.8%

Earnings per share:

Basic $ 1.07 $ 1.03 $ 0.04 3.9%

Diluted $ 1.06 $ 1.02 $ 0.04 3.9%

Shares used in earnings per share calculation:

Basic 21,997 21,835

Diluted 22,203 21,991


2323


1Includes pre-tax business development expenses of $2.7 million and $29,000 for the six months ended June 30, 2019 and 2018, respectively.

(in t housands) 2019 2018 $ Change % Change

Adjusted EBITDA / Pro Forma adjusted EBITDA Reconciliation

Net income 23,534$ 22,463$

Income tax expense 9,436 7,778

Interest expense, net 7,209 5,653

Foreign currency loss 523 153

Other income (232) (2,316)

Property and equipment impairment charges 25 -

Depreciat ion and amort izat ion 17,254 13,649

Amort izat ion of intangibles 5,674 4,598

Share-based compensation 2,467 2,079

Accret ion and non-cash adjustments

of closure & post-closure obligations 2,258 2,155

Property insurance recoveries (9,153) -

Adjusted EBITDA1 58,995$ 56,212$ 2,783$ 5.0%

Business development expenses 2,671 29

Pro Forma adjusted EBITDA 61,666$ 56,241$ 5,425$ 9.6%

Adjusted EBITDA by Operating Segment:

Environmental Services 82,316$ 74,532$ 7,784 10.4%

Field & Industrial Services 7,576 6,907 669 9.7%

Corporate1

(30,897) (25,227) (5,670) 22.5%

Total 58,995$ 56,212$ 2,783$ 5.0%


2424


(1) In the first quarter of 2019, the Company conformed the amount of the foreign currency gains or losses included in the calculation of adjusted earnings per diluted share with the amount of the foreign currency gains or losses included in the calculation of adjusted EBITDA and Pro forma adjusted EBITDA. In previous quarters only non-cash translation gains or losses were included in the calculation of adjusted earnings per diluted share while total foreign currency gains or losses were included in the calculation of adjusted EBITDA and Pro forma adjusted EBITDA. The calculation of adjusted earnings per diluted share for the second quarter of 2019 has been updated to include total foreign currency losses resulting in a $0.01 reduction of adjusted earnings per share from what was previously reported in our earnings release for the six months ended June 30, 2018.

(in t housands, except per share dat a)

Adjusted Earnings Per Share Reconciliation

Income before

income taxes

Income

tax

Net

income

per

share

Income before

income taxes

Income

tax

Net

income

per

share

As reported 32,970$ (9,436)$ 23,534$ 1.06$ 30,241$ (7,778)$ 22,463$ 1.02$

Adjustments:

Less: Property insurance recoveries (9,153) 2,620 (6,533) (0.29) - - - -

Less: TX land easement gain - - - - (1,990) 512 (1,478) (0.07)

Plus: Property and equipment impairment charges 25 - 25 - - - - -

Plus: Business development expenses 2,671 (422) 2,249 0.09 29 (7) 22 -

Foreign currency loss (1)

523 (150) 373 0.02 153 (39) 114 0.01

As adjusted 27,036$ (7,388)$ 19,648$ $ 0.88 28,433$ (7,312)$ 21,121$ $ 0.96

Shares used in earnings per diluted share calculat ion 22,203 21,991


2019 2018

2525

Free Cash Flow: 6mo. 2019 vs. 6mo. 2018

(in t housands) 2019 2018

Free Cash Flow Reconciliation

Net cash provided by operating activities 38,874$ 48,010$

Purchases of property and equipment (24,657) (14,960)

Insurance proceeds from damaged property and equipment 9,500 -

Free Cash Flow 23,717$ 33,050$


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