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| CLH > SEC Filings for CLH > Form 8-K/A on 8-Mar-2013 | All Recent SEC Filings |
8-Mar-2013
Financial Statements and Exhibits
Unaudited Pro Forma Condensed Combined Financial Statements:
Unaudited Pro Forma Condensed Combined Financial Information 2 Unaudited Pro Forma Condensed Combined Balance Sheet as at September 30, 2012 4 Unaudited Pro Forma Condensed Combined Statement of Income for the Year Ended December 31, 2011 6 Unaudited Pro Forma Condensed Combined Statement of Income for the Nine Months Ended September 30, 2012 7 Notes to the Unaudited Pro Forma Condensed Combined Financial Statements 8
On October 26, 2012, Clean Harbors, Inc. ("Clean Harbors" or "we") signed an agreement and plan of merger to acquire Safety-Kleen, Inc. ("Safety-Kleen") for a purchase price (subject to certain working capital and other adjustments) of $1,250.0 million. The merger agreement was subsequently closed on December 28, 2012. Under the terms of the merger agreement, we agreed to pay to the Safety-Kleen shareholders and option holders cash consideration in an amount equal to $1,250.0 million plus the amount of cash and cash equivalents held by Safety-Kleen on the closing date less the amount of debt held by Safety-Kleen on the closing date, plus or minus, as applicable, the amount by which Safety-Kleen's working capital (excluding cash) on the closing date exceeded or was less than $50.0 million. The amount of Safety-Kleen's working capital on the closing date was reduced by the amount of Safety-Kleen's legal and other expenses in connection with the merger and related transactions except to the extent that Safety-Kleen had previously paid such expenses.
We funded the purchase price for Safety-Kleen and paid our related fees and expenses through (i) our available cash, (ii) our sale on December 3, 2012 in a public offering of 6.9 million shares of our common stock at a public offering price of $56.00 per share (the "Stock Offering"), and (iii) our sale on December 7, 2012 in a private offering of $600.0 million aggregate principal amount of 5.125% senior unsecured notes due 2021 (the "Notes Offering"). The following unaudited pro forma condensed combined financial information for Clean Harbors and Safety-Kleen as a combined company gives effect to (i) the Stock Offering, (ii) the Notes Offering, (iii) the acquisition method of accounting for our acquisition of Safety-Kleen, and (iv) payment of our related fees and expenses (collectively, the "Transactions"). The unaudited pro forma condensed combined balance sheet as at September 30, 2012 is presented as if the Transactions had been completed on September 30, 2012. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2011 and for the nine months ended September 30, 2012 are presented as if the Transactions had been completed on January 1, 2011, the first day of our fiscal 2011.
The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Clean Harbors and Safety-Kleen described below. Both Safety-Kleen's and our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our fiscal year is different than Safety-Kleen's historical fiscal year. Our fiscal year ends on December 31, while Safety-Kleen has utilized a 53-week fiscal year comprised of 12 periods consisting of four weeks with the exception of period 13 which consisted of five weeks, each ending on a Saturday. The unaudited pro forma condensed combined balance sheet combines our historical condensed combined balance sheet as at September 30, 2012 with Safety-Kleen's historical consolidated balance sheet as at October 6, 2012. The unaudited pro forma combined statement of income for the nine months ended September 30, 2012 combines our historic consolidated statement of income for the nine months ended September 30, 2012 with Safety-Kleen's historical consolidated statement of income for the 40 weeks ended October 6, 2012. Safety-Kleen's fiscal year end did not differ from ours for the year ended December 31, 2011.
The following unaudited pro forma condensed combined financial information does not purport to represent what our results of operations or financial position would actually have been had the Transactions occurred on the dates described above or to project our results of operations or financial position for any future date or period. The information does not reflect cost savings, operating synergies or revenue enhancements expected to result from our acquisition of Safety-Kleen or the costs to achieve any such cost savings, operating synergies or revenue enhancements. The information reflects our preliminary estimates of the allocation of the purchase price for Safety-Kleen based upon available information and certain assumptions that we believe are reasonable under the circumstances, and actual results could differ materially from these anticipated results. The final allocation of the purchase price will be determined after completion of the merger and will be based on the final purchase price, as it may be adjusted in accordance with the merger agreement, and Safety-Kleen's tangible and identifiable intangible assets acquired and liabilities assumed.
The following unaudited pro forma condensed combined financial information and the accompanying notes should be read together with (1) Clean Harbors' audited consolidated financial statements and accompanying notes, as of and for the fiscal year ended December 31, 2011, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in Clean Harbors' Annual Report on Form 10-K for the fiscal year
ended December 31, 2011, which was filed with the SEC on February 29, 2012, as such audited financial statements, notes and Management's Discussion and Analysis were subsequently superseded or modified through Clean Harbors' Report on Form 8-K filed on July 16, 2012, (2) Clean Harbors' unaudited condensed consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2012 and Management's Discussion and Analysis of Financial Condition and Results of Operations included in Clean Harbors' Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012, which was filed with the SEC on November 9, 2012, (3) Safety-Kleen's audited consolidated financial statements as of and for the years ended December 26, 2009, December 25, 2010, and December 31, 2011, included in Clean Harbors' Report on Form 8-K which was filed with the SEC on January 4, 2013 (the "Initial Form 8-K Report"), and (4) Safety-Kleen's unaudited condensed consolidated financial statements as of and for the 40 weeks ended October 1, 2011 and October 6, 2012, included in the Initial Form 8-K Report.
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
ASSETS
AS AT SEPTEMBER 30, 2012
(dollars in thousands)
Stock and
Notes
Acquisition Offerings
Clean Pro Forma Acquisition Pro Forma
Harbors Safety-Kleen Adjustments Notes Pro Forma Adjustments Notes Pro Forma
Current assets:
Cash and cash
equivalents $ 523,614 $ 48,253 $ (1,299,024 ) (a) $ (727,157 ) $ 952,731 (a) $ 225,574
Marketable
securities 11,113 - - 11,113 - 11,113
Accounts
receivable, net 399,362 171,643 (5,064 ) (b),(h) 565,941 - 565,941
Unbilled
accounts
receivable 34,401 - 3,061 (b) 37,462 - 37,462
Deferred costs 6,995 - 10,733 (b) 17,728 - 17,728
Prepaid expenses
and other
current assets 53,252 25,363 (24,068 ) (a),(b),(c) 54,547 - 54,547
Supplies
inventories 63,934 89,544 14,736 (d) 168,214 - 168,214
Deferred tax
assets 16,617 11,054 - 27,671 - 27,671
Total current
assets 1,109,288 345,857 (1,299,626 ) 155,519 952,731 1,108,250
Property, plant
and equipment,
net 1,003,414 317,004 364,660 (b),(e) 1,685,078 - 1,685,078
Other assets:
Long-term
investments 4,326 - - 4,326 - 4,326
Deferred
financing costs 12,530 - - 12,530 10,559 (g) 23,089
Goodwill 157,724 36,787 275,753 (i) 470,264 - 470,264
Permits and
other
intangibles, net 151,810 83,369 373,531 (b),(f) 608,710 - 608,710
Deferred tax
assets - 57,756 (57,756 ) (b) - - -
Other 10,311 7,515 52,991 (b),(c) 70,817 - 70,817
Total other
assets 336,701 185,427 644,519 1,166,647 10,559 1,177,206
Total assets $ 2,449,403 $ 848,288 $ (290,447 ) $ 3,007,244 $ 963,290 $ 3,970,534
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See accompanying notes to unaudited pro forma condensed combined financial statements.
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
AS AT SEPTEMBER 30, 2012
(dollars in thousands)
Stock and
Notes
Acquisition Offerings
Pro Forma Acquisition Pro Forma
Clean Harbors Safety-Kleen Adjustments Notes Pro Forma Adjustments Notes Pro Forma
Current liabilities:
Current portion of
long-term debt $ - $ 2,500 $ (2,500 ) (k) $ - $ - $ -
Current portion of
capital lease
obligations 5,937 - - 5,937 - 5,937
Accounts payable 174,327 88,191 (2,003 ) (h) 260,515 - 260,515
Deferred revenue 29,060 32,009 - 61,069 - 61,069
Accrued expenses 136,687 87,006 18,964 (b),(c),(d),(j) 242,657 - 242,657
Accrued salaries and
benefits - 30,574 (30,574 ) (b) - - -
Current portion of
closure, post-closure
and remedial
liabilities 19,552 7,046 - 26,598 - 26,598
Income taxes payable - 1,763 (1,763 ) (b) - - -
Total current
liabilities 365,563 249,089 (17,876 ) 596,776 - 596,776
Other liabilities:
Closure and
post-closure
liabilities, less
current portion 29,712 - 16,808 (b) 46,520 - 46,520
Remedial liabilities,
less current portion 117,981 - 34,445 (b) 152,426 - 152,426
Environmental
liabilities - 51,253 (51,253 ) (b) - - -
Long-term
obligations, less
current maturities 800,000 220,625 (220,625 ) (k) 800,000 600,000 (k) 1,400,000
Capital lease
obligations, less
current portion 3,477 - - 3,477 - 3,477
Unrecognized tax
benefits and other
long-term liabilities 125,915 21,458 258,366 (e),(f) 405,739 - 405,739
Total other
liabilities 1,077,085 293,336 37,741 1,408,162 600,000 2,008,162
Stockholders' equity:
Common stock, $.01
par value:
Clean Harbors
authorized
80,000,000; pro forma
shares issued and
outstanding
60,286,280 534 509 (509 ) (l) 534 69 (l) 603
Shares held under
employee
participation plan (469 ) - - (469 ) - (469 )
Additional paid-in
capital 508,182 390,560 (390,560 ) (l) 508,182 368,409 (l) 876,591
Accumulated other
comprehensive income 59,056 4,675 (4,675 ) (l) 59,056 - 59,056
Accumulated earnings
(deficit) 439,452 (89,881 ) 85,432 (l) 435,003 (5,188 ) (l) 429,815
Total Clean Harbors
and Safety-Kleen
stockholders' equity 1,006,755 305,863 (310,312 ) 1,002,306 363,290 1,365,596
Total liabilities and
stockholders' equity $ 2,449,403 $ 848,288 $ (290,447 ) $ 3,007,244 $ 963,290 $ 3,970,534
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See accompanying notes to unaudited pro forma condensed combined financial statements.
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2011
(in thousands)
Stock and
Notes
Acquisition Offerings
Pro Forma Acquisition Pro Forma
Clean Harbors Safety-Kleen Adjustments Notes Pro Forma Adjustments Notes Pro Forma
Revenues:
Service
revenues $ 1,984,136 $ 576,120 $ (13,050 ) (m) $ 2,547,206 $ - $ 2,547,206
Product
revenues - 708,151 - 708,151 - 708,151
Total revenues 1,984,136 1,284,271 (13,050 ) 3,255,357 - 3,255,357
Costs of
revenues
(exclusive of
items shown
separately
below) 1,379,991 1,076,348 (50,093 ) (m),(n),(p) 2,406,246 - 2,406,246
Selling,
general and
administrative
expenses 254,137 73,842 49,610 (n) 377,589 - 377,589
Accretion of
environmental
liabilities 9,680 - 2,169 (n) 11,849 - 11,849
Depreciation
and
amortization 122,663 66,808 17,580 (o) 207,051 - 207,051
Income from
operations 217,665 67,273 (32,316 ) 252,622 - 252,622
Other
income(expense) 6,402 (5,925 ) - 477 - 477
Interest
expense, net (39,389 ) (10,321 ) 8,897 (q) (40,813 ) (31,992 ) (q) (72,805 )
Income (loss)
before
provision
(benefit) for
income taxes 184,678 51,027 (23,419 ) 212,286 (31,992 ) 180,294
Provision
(benefit) for
income taxes 57,426 (84,441 ) (8,197 ) (r) (35,212 ) (11,197 ) (r) (46,409 )
Net income
(loss)
attributable to
Clean Harbors
and
Safety-Kleen $ 127,252 $ 135,468 $ (15,222 ) $ 247,498 $ (20,795 ) $ 226,703
Earnings per
Share:
Basic $ 2.40 $ 2.61 $ 4.67 $ 3.79
Diluted $ 2.39 $ 2.55 $ 4.64 $ 3.76
Weighted
average common
shares
outstanding 52,961 51,876 (51,876 ) 52,961 6,900 59,861
Weighted
average common
shares
outstanding
plus
potentially
dilutive common
shares 53,324 53,064 (53,064 ) (s) 53,324 6,900 60,224
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
(in thousands)
Stock and
Notes
Acquisition Offerings
Pro Forma Acquisition Pro Forma
Clean Harbors Safety-Kleen Adjustments Notes Pro Forma Adjustments Notes Pro Forma
Revenues
Service revenues $ 1,628,946 $ 469,087 $ (8,471 ) (m) $ 2,089,562 $ - $ 2,089,562
Product revenues - 601,897 - 601,897 - 601,897
Total revenues 1,628,946 1,070,984 (8,471 ) 2,691,459 - 2,691,459
Costs of revenues
(exclusive of
items shown
separately below) 1,140,878 877,677 (48,986 ) (m),(n) 1,969,569 - 1,969,569
Selling, general
and administrative
expenses 197,892 67,109 38,628 (n) 303,629 - 303,629
Accretion of
environmental
liabilities 7,409 - 1,888 (n) 9,297 - 9,297
Depreciation and
amortization 116,794 49,436 13,855 (o) 180,085 - 180,085
Income from
operations 165,973 76,762 (13,856 ) 228,879 - 228,879
Other expense (465 ) (4,903 ) - (5,368 ) - (5,368 )
Loss on early
extinguishment of
debt (26,385 ) - - (26,385 ) - (26,385 )
Interest expense,
net (33,836 ) (10,284 ) 8,980 (q) (35,140 ) (23,994 ) (q) (59,134 )
Income (loss)
before provision
for income taxes 105,287 61,575 (4,876 ) 161,986 (23,994 ) 137,992
Provision for
income taxes 37,487 19,278 (1,706 ) (r) 55,059 (8,398 ) (r) 46,661
Net income (loss)
attributable to
Clean Harbors and
Safety-Kleen $ 67,800 $ 42,297 $ (3,170 ) $ 106,927 $ (15,596 ) $ 91,331
Earnings per
Share:
Basic $ 1.27 $ 0.82 $ 2.01 $ 1.52
Diluted $ 1.27 $ 0.80 $ 2.00 $ 1.51
Weighted average
common shares
outstanding 53,303 51,622 (51,622 ) 53,303 6,900 60,203
Weighted average
common shares
outstanding plus
potentially
dilutive common
shares 53,519 52,880 (52,880 ) (s) 53,519 6,900 60,419
|
See accompanying notes to unaudited pro forma condensed combined financial statements.
1. The Merger
On October 26, 2012, Clean Harbors and Safety-Kleen signed an Agreement and Plan of Merger dated as of that date (the "Merger Agreement") which provided that, subject to the terms and conditions contained in the Merger Agreement, Clean Harbors would acquire Safety-Kleen (the "Merger"). Safety-Kleen, a Delaware corporation headquartered in Richardson, Texas, is the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services.
Under the terms of the Merger Agreement, which was subsequently closed on December 28, 2012, Clean Harbors agreed to pay to the Safety-Kleen's shareholders and option holders cash consideration in an amount equal to $1,250.0 million plus the amount of cash and cash equivalents held by Safety-Kleen on the closing date, less the amount of debt owed by Safety-Kleen on the closing date for borrowed money and capital lease obligations, plus or minus, as applicable, the amount by which Safety-Kleen's working capital (excluding cash) on the closing date exceeded or was less than $50.0 million.
The following table summarizes the components of the estimated total consideration included in the pro forma condensed combined financial statements as if the Merger had been completed on September 30, 2012 (in thousands):
Estimated cash consideration $ 1,250,000 Plus estimated working capital adjustment at September 30, 2012 11,271 Estimated total purchase price $ 1,261,271 |
The following summarizes the preliminary purchase price allocation, as if the Merger had occurred on September 30, 2012 (in thousands):
Assets to be acquired:
Accounts receivable $ 168,582
Unbilled accounts receivable 3,061
Prepaid expenses and other current assets 11,795
Deferred costs 10,733
Inventory 104,280
Current deferred tax assets 11,054
Goodwill 312,540
Property, plant and equipment 681,664
Permits and other intangible assets 456,900
Other assets 60,505
1,821,114
Liabilities to be assumed:
Accounts payable 88,191
Deferred revenue 32,009
Accrued expenses 101,520
Current portion of closure, post-closure and remedial liabilities 7,046
Closure and post-closure liabilities, less current portion 51,253
Unrecognized tax benefits and other long-term liabilities 279,824
559,843
Net assets to be acquired(1) $ 1,261,271
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Clean Harbors has determined preliminary allocation estimates based on limited access to information and will not have sufficient information to make final . . .
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