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OFFON

US ECOLOGY, INC.

(ECOL)
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US ECOLOGY : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/02/2021 | 01:05pm EDT
The information contained in this section should be read in conjunction with our
unaudited consolidated financial statements and related notes thereto appearing
elsewhere in this quarterly report on Form 10-Q. In this report words such as
"we," "us," "our," "US Ecology" and "the Company" refer to US Ecology, Inc.
and
its subsidiaries.



OVERVIEW



US Ecology is a leading provider of environmental services to commercial and
governmental entities. The Company addresses the complex waste management and
response needs of its customers, offering treatment, disposal and recycling of
hazardous, non-hazardous and radioactive waste, leading emergency response and
standby services, and a wide range of complementary field and industrial
services. US Ecology's focus on safety, environmental compliance and
best-in-class customer service enables us to effectively meet the needs of our
customers and to build long-lasting relationships.

We have a network of fixed facilities and service centers operating primarily in
the United States, Canada, the United Kingdom and Mexico. Our fixed facilities
include five RCRA subtitle C hazardous waste landfills, three landfills serving
waste streams regulated by the RRC and one LLRW landfill. We also have various
other treatment, storage and disposal facilities ("TSDF") located throughout the
United States. These facilities generate revenue from fees charged to transport,
recycle, treat and dispose of waste and to perform various field and industrial
services for our customers.



Effective in the fourth quarter of 2020, we made changes to the manner in which
we manage our business, make operating decisions and assess our performance. The
energy waste business that was acquired through the NRC Merger now comprises our
Energy Waste segment. Prior to this change, the energy waste business was
included in the Waste Solutions segment (formerly "Environmental Services").
Throughout this Quarterly Report on Form 10-Q, all periods presented have been
recast to reflect these changes. Under our new structure our operations are
managed in three reportable segments reflecting our internal management
reporting structure and nature of services offered as follows:



Waste Solutions (formerly "Environmental Services") - This segment provides safe
and compliant specialty waste management services including treatment, disposal,
beneficial re-use, and recycling of hazardous, non-hazardous, and other
specialty waste at Company-owned treatment, storage, and disposal facilities,
excluding the services within our Energy Waste segment.



Field Services (formerly "Field & Industrial Services") - This segment provides
safe and compliant logistics and response solutions focusing on "in-field'
service offerings through our network of 10-day transfer facilities. Our
logistics solutions include specialty waste packaging, collection,
transportation, and total waste management. Our response solutions include land
and marine based emergency response, OSRO standby compliance, remediation, and
industrial services. The Field Services segment completes our vertically
integrated model and serves to increase waste volumes into our Waste Solutions
segment.



Energy Waste - This segment provides safe and compliant energy waste management
and critical support services to up-stream oil and gas customers in the Permian
and Eagle Ford basins primarily operating in Texas. Services include spill
containment and site remediation, equipment cleaning and maintenance services,
specialty equipment rental, including tanks, pumps and containment, safety
monitoring and management and transportation and disposal. This segment includes
all of the energy waste business of the legacy NRC operations and none of the
legacy US Ecology operations.



The operations not managed through our three reportable segments are recorded as
"Corporate." Corporate selling, general and administrative expenses include
typical corporate items of a general nature such as certain labor, information
technology, legal, accounting and other expenses not associated with a specific
reportable segment. Income taxes are assigned to Corporate, but all other items
are included in the segment where they originated. Inter-company transactions
have been eliminated from the segment information and are not significant
between segments.



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Effective in the first quarter of 2021, we changed our management structure
resulting in the reclassification of certain overhead expenses from our Waste
Solutions, Field Services and Energy Waste reportable segments to Corporate. As
a result, certain regional overhead costs historically presented within our
reportable segments as Direct operating costs were further reclassified to
Corporate as Selling, general and administrative expenses to conform to the
current period's presentation. Throughout this Quarterly Report on Form 10-Q,
all periods presented have been recast to reflect these changes.



In order to provide insight into the underlying drivers of our waste volumes and
related treatment and disposal ("T&D") revenues, we evaluate period-to-period
changes in our T&D revenue for our Waste Solutions segment based on the industry
of the waste generator, based on North American Industry Classification System
codes.



The composition of the Waste Solutions segment T&D revenues by waste generator
industry for the three and six months ended June 30, 2021 and 2020 were as
follows:




                                                       % of Treatment and Disposal Revenue (1) for the
                                                                 Three Months Ended June 30,
Generator Industry                                           2021                           2020
Chemical Manufacturing                                        17%                            21%
Metal Manufacturing                                           17%                            14%
Broker / TSDF                                                 12%                            12%
General Manufacturing                                         11%                            10%
Government                                                    9%                             8%
Refining                                                      5%                             8%
Transportation                                                4%                             3%
Mining, Exploration and Production                            4%                             2%
Utilities                                                     3%                             8%
Waste Management & Remediation                                3%           
                 2%
Other (2)                                                     15%                            12%





                                                       % of Treatment and Disposal Revenue (1) for the
                                                                  Six Months Ended June 30,
Generator Industry                                           2021                           2020
Chemical Manufacturing                                        18%                            21%
Metal Manufacturing                                           18%                            15%
Broker / TSDF                                                 12%                            13%
General Manufacturing                                         11%                            11%
Government                                                    8%                             7%
Refining                                                      5%                             7%
Utilities                                                     4%                             5%
Transportation                                                4%                             5%
Waste Management & Remediation                                4%                             2%
Mining, Exploration and Production                            3%           
                 2%
Other (2)                                                     13%                            12%

(1) Excludes all transportation service revenue.

(2) Includes retail and wholesale trade, rate regulated, construction and other

    industries.



We also categorize our Waste Solutions segment T&D revenue as either "Base Business" or "Event Business" based on the underlying nature of the revenue source.

Base Business consists of waste streams from ongoing industrial activities and
tends to be recurring in nature. We define Event Business as non-recurring
projects that are expected to equal or exceed 1,000 tons, with Base Business
defined as all other business not meeting the definition of Event Business. The
duration of Event Business projects can last from a several-week cleanup of a
contaminated site to a multiple year cleanup project.



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For the three months ended June 30, 2021, Base Business revenue increased 7%
compared to the three months ended June 30, 2020. For the three months ended
June 30, 2021, approximately 76% of our total T&D revenue was derived from our
Base Business, up from 72% for the three months ended June 30, 2020. For the six
months ended June 30, 2021, Base Business revenue increased 2% compared to the
six months ended June 30, 2020. For the six months ended June 30, 2021,
approximately 76% of our total T&D revenue was derived from our Base Business,
up from 74% for the six months ended June 30, 2020. Our business is highly
competitive and no assurance can be given that we will maintain these revenue
levels or increase our market share.



A significant portion of our disposal revenue is attributable to discrete Event
Business projects which vary widely in size, duration and unit pricing. For the
three months ended June 30, 2021, approximately 24% of our total T&D revenue was
derived from Event Business projects, down from 28% for the three months ended
June 30, 2020. For the three months ended June 30, 2021, Event Business revenue
decreased 13% compared to the three months ended June 30, 2020. For the six
months ended June 30, 2021, approximately 24% of our total T&D revenue was
derived from Event Business projects, down from 26% for the six months ended
June 30, 2020. For the six months ended June 30, 2021, Event Business revenue
decreased 10% compared to the six months ended June 30, 2020. The one-time
nature of Event Business, diverse spectrum of waste types received and widely
varying unit pricing necessarily creates variability in revenue and earnings.
This variability may be influenced by general and industry-specific economic
conditions, funding availability, changes in laws and regulations, government
enforcement actions or court orders, public controversy, litigation, weather,
commercial real estate, closed military bases and other project timing,
government appropriation and funding cycles and other factors. The types and
amounts of waste received from Base Business also vary from quarter to quarter.



This variability can also cause significant quarter-to-quarter and year-to-year
differences in revenue, gross profit, gross margin, operating income and net
income. While we pursue many projects months or years in advance of work
performance, cleanup project opportunities routinely arise with little or no
prior notice. These market dynamics are inherent to the waste disposal business
and are factored into our projections and externally communicated business
outlook statements. Our projections combine historical experience with
identified sales pipeline opportunities, new or expanded service line
projections and prevailing market conditions.



We serve oil refineries, chemical production plants, steel mills, waste
brokers/aggregators serving small manufacturers and other industrial customers
that are generally affected by the prevailing economic conditions and credit
environment. Adverse conditions may cause our customers as well as those they
serve to curtail operations, resulting in lower waste production and/or delayed
spending on off-site waste shipments, maintenance, waste cleanup projects and
other work. Factors that can impact general economic conditions and the level of
spending by customers include, but are not limited to, consumer and industrial
spending, increases in fuel and energy costs, conditions in the real estate and
mortgage markets, labor and healthcare costs, access to credit, consumer
confidence and other global economic factors affecting spending behavior. Market
forces may also induce customers to reduce or cease operations, declare
bankruptcy, liquidate or relocate to other countries, any of which could
adversely affect our business. To the extent business is either government
funded or driven by government regulations or enforcement actions, we believe it
is less susceptible to general economic conditions. Spending by government
agencies may be reduced due to declining tax revenues resulting from a weak
economy or changes in policy. Disbursement of funds appropriated by Congress may
also be delayed for various reasons.



COVID-19 PANDEMIC UPDATE



The COVID-19 pandemic continued to affect our business through the second
quarter of 2021. The impact of temporary closures and staff reductions by
industrial facilities has resulted in delays in mobilization and in regulatory
approvals at our customers' sites. Although we have seen evidence of volume
recovery in the first six months of 2021 as the economy continues to rebound and
industrial facilities return to pre-pandemic levels of production, we have
experienced cost and inflationary pressures in areas such as labor and supplies.
We have also experienced, and expect to continue to experience, delays and
deferments of some of our field services as our customers continue to limit
on-site visitation and delay noncritical services based on business conditions.
While uncertainty caused by the COVID-19 pandemic remains, including the spread
of new variants of the virus and government and private sector responses to
prevent and manage the disease, we expect to continue to see improvements in our
business as vaccines become more widely available and vaccination rates
increase.



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  Table of Contents

We expect that the COVID-19 pandemic will continue to affect our results of operations for the foreseeable future. See "Item 1A - Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.


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  Table of Contents

RESULTS OF OPERATIONS



THREE MONTHS ENDED JUNE 30, 2021 COMPARED TO THREE MONTHS ENDED JUNE 30, 2020

Operating results and percentage of revenues were as follows:




                                                   Three Months Ended June 30,              2021  vs. 2020
$s in thousands                                  2021        %        2020        %      $ Change     % Change
Revenue
Waste Solutions                               $  108,364     45 %  $  103,043      48 %  $   5,321           5 %
Field Services                                   124,660     52 %     103,509      48 %     21,151          20 %
Energy Waste                                       7,749      3 %       7,366       4 %        383           5 %
Total                                         $  240,773    100 %  $  213,918     100 %  $  26,855          13 %
Gross Profit
Waste Solutions                               $   35,666     33 %  $   42,216      41 %  $ (6,550)        (16) %
Field Services                                    18,080     15 %      14,760      14 %      3,320          22 %
Energy Waste                                         807     10 %     (1,956)    (27) %      2,763       (141) %
Total                                         $   54,553     23 %  $   55,020      26 %  $   (467)         (1) %
Selling, General & Administrative Expenses
Waste Solutions                               $    6,770      6 %  $    6,546       6 %  $     224           3 %
Field Services                                    12,333     10 %      11,379      11 %        954           8 %
Energy Waste                                       3,331     43 %       4,893      66 %    (1,562)        (32) %
Corporate                                         28,735    n/m        26,878     n/m        1,857           7 %
Total                                         $   51,169     21 %  $   49,696      23 %  $   1,473           3 %
Adjusted EBITDA
Waste Solutions                               $   39,951     37 %  $   46,064      45 %  $ (6,113)        (13) %
Field Services                                    17,167     14 %      16,041      15 %      1,126           7 %
Energy Waste                                       2,309     30 %     (1,132)    (15) %      3,441       (304) %
Corporate                                       (25,217)    n/m      (22,274)     n/m      (2,943)          13 %
Total                                         $   34,210     14 %  $   38,699      18 %  $ (4,489)        (12) %



Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")




Management uses Adjusted EBITDA as a financial measure to assess segment
performance. Adjusted EBITDA is defined as net income before interest expense,
interest income, income tax expense, depreciation, amortization, share-based
compensation, accretion of closure and post-closure liabilities, foreign
currency gain/loss, business development and integration expenses and other
income/expense. The reconciliation of Net loss to Adjusted EBITDA is as follows:




                                                    Three Months Ended June 30,            2021 vs. 2020
$s in thousands                                       2021                2020         $ Change     % Change
Net loss                                         $      (4,163)      $      (5,183)    $   1,020        (20) %
Income tax expense                                          257               2,261      (2,004)        (89) %
Interest expense                                          7,521               7,853        (332)         (4) %
Interest income                                           (390)               (153)        (237)         155 %
Foreign currency loss                                       355                 671        (316)        (47) %
Other income                                              (196)               (125)         (71)          57 %
Depreciation and amortization of plant and
equipment                                                17,963              18,418        (455)         (2) %
Amortization of intangible assets                         8,780               9,193        (413)         (4) %
Share-based compensation                                  2,107               1,524          583          38 %
Accretion and non-cash adjustment of closure
& post-closure liabilities                                1,191               1,267         (76)         (6) %
Business development and integration expenses               785            
  2,973      (2,188)        (74) %
Adjusted EBITDA                                  $       34,210      $       38,699    $ (4,489)        (12) %



Adjusted EBITDA is a complement to results provided in accordance with GAAP and
we believe that such information provides additional useful information to
analysts, stockholders and other users to understand the Company's operating
performance. Since Adjusted EBITDA is not a measurement determined in accordance
with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as
presented may not be comparable to other similarly titled measures of other
companies. Items excluded from Adjusted EBITDA are significant components in
understanding and assessing our financial performance. Adjusted EBITDA 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 statement data presented in the consolidated financial
statements as indicators of financial performance or liquidity.

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Table of Contents

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

? Adjusted EBITDA does not reflect changes in, or cash requirements for, our

working capital needs;

? Adjusted EBITDA does not reflect our interest expense, or the requirements

necessary to service interest or principal payments on our debt;

? Adjusted EBITDA does not reflect our income tax expenses or the cash

requirements to pay our taxes;

? Adjusted EBITDA does not reflect our cash expenditures or future requirements

for capital expenditures or contractual commitments;

Although depreciation and amortization charges are non-cash charges, the assets

? being depreciated and amortized will often have to be replaced in the future,

and Adjusted EBITDA does not reflect any cash requirements for such

replacements; and

? Adjusted EBITDA does not reflect our business development and integration

expenses, which may vary significantly from quarter to quarter.


Revenue


Total revenue increased 13% to $240.8 million for the second quarter of 2021 compared with $213.9 million for the second quarter of 2020.



Waste Solutions



Waste Solutions segment revenue increased 5% to $108.4 million for the second
quarter of 2021, compared to $103.0 million for the second quarter of 2020. T&D
revenue increased 4% compared to the second quarter of 2020, primarily as a
result of a 7% increase in Base Business revenue, partially offset by a 13%
decrease in project-based Event Business revenue. Transportation and logistics
service revenue increased 13% compared to the second quarter of 2020, primarily
reflecting Event Business projects utilizing more of the Company's
transportation and logistics services. Total tons of waste disposed of or
processed across all of our facilities for the second quarter of 2021 was
consistent with the second quarter of 2020. Tons of waste disposed of or
processed at our landfills increased 15% for the second quarter of 2021 compared
to the second quarter of 2020.



T&D revenue from recurring Base Business waste generators increased 7% for the
second quarter of 2021 compared to the second quarter of 2020 and comprised 76%
of total T&D revenue for the second quarter of 2021. Comparing the second
quarter of 2021 to the second quarter of 2020, increases in Base Business T&D
revenue from the metal manufacturing, mining, exploration & production, general
manufacturing, and chemical manufacturing industry groups were partially offset
by a decrease in Event Business T&D revenue from the refining industry group.



T&D revenue from Event Business waste generators decreased 13% for the second
quarter of 2021 compared to the second quarter of 2020 and comprised 24% of
total T&D revenue for the second quarter of 2021. Comparing the second quarter
of 2021 to the second quarter of 2020, decreases in Event Business T&D revenue
from the chemical manufacturing and utilities industry groups were partially
offset by increases in Event Business T&D revenue from the Other, waste
management & remediation, metal manufacturing and transportation industry
groups.



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  Table of Contents

The following table summarizes combined Base Business and Event Business T&D
revenue growth, within the Waste Solutions segment, by generator industry for
the second quarter of 2021 as compared to the second quarter of 2020:




                                   Treatment and Disposal Revenue Growth
                                   Three Months Ended June 30, 2021 vs.
                                     Three Months Ended June 30, 2020
Waste Management & Remediation                     119%
Mining, Exploration & Production                   106%
Metal Manufacturing                                 26%
Transportation                                      22%
Government                                          14%
General Manufacturing                               14%
Other                                               13%
Broker / TSDF                                       4%
Chemical Manufacturing                             -18%
Refining                                           -33%
Utilities                                          -61%




Field Services



Field Services segment revenue increased 20% to $124.7 million for the second
quarter of 2021 compared with $103.5 million for the second quarter of 2020. The
increase in Field Services segment revenue is primarily attributable to higher
revenues from our Remediation, Industrial Services, Total Waste Management,
Treatment & Disposal and Small Quantity Generation business lines, partially
offset by lower revenues from our Other and Emergency Response business lines.



Energy Waste



Energy Waste segment revenue increased 5% to $7.7 million for the second quarter
of 2021 compared with $7.4 million for the second quarter of 2020, primarily
attributable to a partial recovery in energy markets and increases in
energy-related exploration and production activities in the markets we serve.



Gross Profit


Total gross profit decreased 1% to $54.6 million for the second quarter of 2021,
down from $55.0 million for the second quarter of 2020. Total gross margin was
23% for the second quarter of 2021 compared with 26% for the second quarter
of
2020.



Waste Solutions


Waste Solutions segment gross profit decreased 16% to $35.7 million for the
second quarter of 2021, down from $42.2 million for the second quarter of 2020.
Total segment gross margin for the second quarter of 2021 was 33% compared with
41% for the second quarter of 2020. The decrease in segment gross margin was
primarily attributable to a less favorable service mix, partially offset by
higher volumes, in the second quarter of 2021 compared with the second quarter
of 2020. T&D gross margin was 38% for the second quarter of 2021 compared with
45% for the second quarter of 2020.



Field Services


Field Services segment gross profit increased 22% to $18.1 million for the
second quarter of 2021, up from $14.8 million for the second quarter of 2020.
Total segment gross margin was 15% for the second quarter of 2021 compared with
14% for the second quarter of 2020. The increase in segment gross margin was
primarily attributable to higher volumes and a more favorable service mix in the
second quarter of 2021 compared with the second quarter of 2020.



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  Table of Contents

Energy Waste



Energy Waste segment gross profit was $807,000 for the second quarter of 2021
compared to a gross loss of $2.0 million for the second quarter of 2020. Total
segment gross margin was 10% for the second quarter of 2021 compared with (27)%
for the second quarter of 2020. The increase in segment gross margin was
primarily attributable to lower costs in the second quarter of 2021 as a result
of our restructuring activities undertaken in the second quarter of 2020 in
response to reduced energy-related exploration and production investments in the
markets we serve.


Selling, General and Administrative Expenses ("SG&A")

Total SG&A increased 3% to $51.2 million, or 21% of total revenue, for the second quarter of 2021, up from $49.7 million, or 23% of total revenue, for the second quarter of 2020.



Waste Solutions


Waste Solutions segment SG&A increased 3% to $6.8 million, or 6% of segment revenue, for the second quarter of 2021 compared with $6.5 million, or 6% of segment revenue, for the second quarter of 2020.



Field Services



Field Services segment SG&A increased 8% to $12.3 million, or 10% of segment
revenue, for the second quarter of 2021 compared with $11.4 million, or 11% of
segment revenue, for the second quarter of 2020. Field Services segment SG&A for
the second quarter of 2020 includes a $2.2 million gain associated with the
settlement of a contingent consideration liability.  Excluding the impact of
this gain, segment SG&A decreased 9% for the second quarter of 2021 compared
with the second quarter of 2020, primarily attributable to lower employee labor
and benefits costs.



Energy Waste


Energy Waste segment SG&A decreased 32% to $3.3 million, or 43% of segment
revenue, for the second quarter of 2021 compared with $4.9 million, or 66% of
segment revenue, for the second quarter of 2020. The decrease in segment SG&A
was primarily attributable to lower employee labor and benefits costs in the
second quarter of 2021 as a result of our restructuring activities undertaken in
the second quarter of 2020 in response to reduced energy-related exploration and
production investments in the markets we serve.



Corporate


Corporate SG&A increased 7% to $28.7 million, or 12% of total revenue, for the
second quarter of 2021 compared with $26.9 million, or 13% of total revenue, for
the second quarter of 2020. The increase in Corporate SG&A primarily reflects
higher employee labor and benefits costs and higher consulting and professional
services expenses, partially offset by lower business development and
integration expenses in the second quarter of 2021 compared to the second
quarter of 2020.



Components of Adjusted EBITDA



Income tax expense



Income tax expense for the second quarter of 2021 was $257,000, resulting in a
consolidated effective income tax rate of (6.6)%. Income tax expense for the
second quarter of 2020 was $2.3 million, resulting in a consolidated effective
income tax rate of (77.4)%. We have used a discrete effective tax rate method to
calculate taxes for the six months ended June 30, 2021. For additional
information on our consolidated effective income tax rate, see Note 13 of the
Notes to Consolidated Financial Statements in "Part I, Item 1. Financial
Statements (Unaudited)" of this Quarterly Report on Form 10-Q.



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Interest expense



Interest expense was $7.5 million for the second quarter of 2021 compared with
$7.9 million for the second quarter of 2020. The decrease is the result of the
impact of lower interest rates on the variable portion of our outstanding debt
as well as lower outstanding debt levels in the second quarter of 2021 compared
to the second quarter of 2020.



Foreign currency loss



We recognized a $355,000 foreign currency loss for the second quarter of 2021
compared with a $671,000 foreign currency loss for the second quarter of 2020.
Foreign currency gains and losses reflect changes in business activity conducted
in a currency other than the U.S. dollar ("USD"), our functional currency.
Additionally, we established intercompany loans with certain of our Canadian
subsidiaries, whose functional currency is the Canadian dollar ("CAD") as part
of a tax and treasury management strategy allowing for repayment of third-party
bank debt. These intercompany loans are payable by our Canadian subsidiaries to
US Ecology in CAD requiring us to revalue the outstanding loan balance through
our statements of operations based on USD/CAD currency movements from period to
period. At June 30, 2021, we had $33.2 million of intercompany loans subject to
currency revaluation.



Other income


Other income was $196,000 for the second quarter of 2021 compared with other income of $125,000 for the second quarter of 2020.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense decreased 2% to $18.0 million for the second quarter of 2021 compared with $18.4 million for the second quarter of 2020.

Amortization of intangible assets

Intangible assets amortization expense decreased 4% to $8.8 million for the second quarter of 2021 compared with $9.2 million for the second quarter of 2020.




Share-based compensation



Share-based compensation expense increased 38% to $2.1 million for the second quarter of 2021 compared with $1.5 million for the second quarter of 2020, primarily reflecting an increase in equity-based awards granted to employees.

Accretion and non-cash adjustment of closure and post-closure liabilities

Accretion and non-cash adjustment of closure and post-closure liabilities decreased 6% to $1.2 million for the second quarter of 2021 compared with $1.3 million for the second quarter of 2020.

Business development and integration expenses

Business development and integration expenses decreased 74% to $785,000 in the
second quarter of 2021, compared to $3.0 million in the second quarter of 2020,
primarily attributable to lower NRC Merger integration expenses incurred in the
second quarter of 2021 compared to the second quarter of 2020.



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SIX MONTHS ENDED JUNE 30, 2021 COMPARED TO SIX MONTHS ENDED JUNE 30, 2020

Operating results and percentage of revenues were as follows:





                                                     Six Months Ended June 30,              2021  vs. 2020
$s in thousands                                  2021        %        2020        %      $ Change     % Change
Revenue
Waste Solutions                               $  212,507     45 %  $  212,434     47 %  $       73           0 %
Field Services                                   242,909     52 %     217,503     48 %      25,406          12 %
Energy Waste                                      13,976      3 %      24,701      5 %    (10,725)        (43) %
Total                                         $  469,392    100 %  $  454,638    100 %  $   14,754           3 %
Gross Profit
Waste Solutions                               $   70,617     33 %  $   81,523     38 %  $ (10,906)        (13) %
Field Services                                    36,385     15 %      33,036     15 %       3,349          10 %
Energy Waste                                         424      3 %       2,900     12 %     (2,476)        (85) %
Total                                         $  107,426     23 %  $  117,459     26 %  $ (10,033)         (9) %
Selling, General & Administrative Expenses
Waste Solutions                               $   13,071      6 %  $   13,434      6 %  $    (363)         (3) %
Field Services                                    25,058     10 %      24,232     11 %         826           3 %
Energy Waste                                       6,674     48 %      10,180     41 %     (3,506)        (34) %
Corporate                                         57,734    n/m        54,225    n/m         3,509           6 %
Total                                         $  102,537     22 %  $  102,071     22 %  $      466           0 %
Adjusted EBITDA
Waste Solutions                               $   80,088     38 %  $   88,985     42 %  $  (8,897)        (10) %
Field Services                                    34,304     14 %      33,506     15 %         798           2 %
Energy Waste                                       3,566     26 %       4,073     16 %       (507)        (12) %
Corporate                                       (50,544)    n/m      (44,645)    n/m       (5,899)          13 %
Total                                         $   67,414     14 %  $   81,919     18 %  $ (14,505)        (18) %




Adjusted EBITDA



Management uses Adjusted EBITDA as a financial measure to assess segment
performance. Adjusted EBITDA is defined as net income before interest expense,
interest income, income tax expense, depreciation, amortization, share-based
compensation, accretion of closure and post-closure liabilities, foreign
currency gain/loss, non-cash goodwill impairment charges, business development
and integration expenses and other income/expense. The reconciliation of Net
loss to Adjusted EBITDA is as follows:




                                                    Six Months Ended June 30,            2021 vs. 2020
$s in thousands                                       2021              2020         $ Change      % Change
Net loss                                          $     (4,959)     $  (303,269)    $   298,310        (98) %
Income tax (benefit) expense                            (1,187)           
1,998        (3,185)       (159) %
Interest expense                                         14,878           17,163        (2,285)        (13) %
Interest income                                           (663)            (242)          (421)         174 %
Foreign currency loss (gain)                                726            (266)            992       (373) %
Other income                                            (3,906)            (296)        (3,610)       1,220 %
Goodwill impairment charges                                   -          300,300      (300,300)       (100) %
Depreciation and amortization of plant and
equipment                                                36,197           36,396          (199)         (1) %
Amortization of intangible assets                        17,915           18,634          (719)         (4) %
Share-based compensation                                  4,035            3,088            947          31 %
Accretion and non-cash adjustment of closure &
post-closure liabilities                                  2,373            2,533          (160)         (6) %
Business development and integration expenses             2,005           
5,880        (3,875)        (66) %
Adjusted EBITDA                                   $      67,414     $     81,919    $  (14,505)        (18) %



Adjusted EBITDA is a complement to results provided in accordance with GAAP and
we believe that such information provides additional useful information to
analysts, stockholders and other users to understand the Company's operating
performance. Since Adjusted EBITDA is not a measurement determined in accordance
with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as
presented may not be comparable to other similarly titled measures of other
companies. Items excluded from Adjusted EBITDA are significant components in
understanding and assessing our financial performance. Adjusted EBITDA 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 statement data presented in the consolidated financial
statements as indicators of financial performance or liquidity.

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Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

? Adjusted EBITDA does not reflect changes in, or cash requirements for, our

working capital needs;

? Adjusted EBITDA does not reflect our interest expense, or the requirements

necessary to service interest or principal payments on our debt;

? Adjusted EBITDA does not reflect our income tax expenses or the cash

requirements to pay our taxes;

? Adjusted EBITDA does not reflect our cash expenditures or future requirements

for capital expenditures or contractual commitments;

Although depreciation and amortization charges are non-cash charges, the assets

? being depreciated and amortized will often have to be replaced in the future,

and Adjusted EBITDA does not reflect any cash requirements for such

replacements; and

? Adjusted EBITDA does not reflect our business development and integration

   expenses.


Revenue


Total revenue increased 3% to $469.4 million for the first six months of 2021 compared with $454.6 million for the first six months of 2020.



Waste Solutions


Waste Solutions segment revenue was $212.5 million for the first six months of
2021, compared to $212.4 million for the first six months of 2020. T&D revenue
for the first six months of 2021 was consistent with the first six months of
2020, primarily as a result of a 2% increase in Base Business revenue, partially
offset by a 10% decrease in project-based Event Business revenue. Transportation
and logistics service revenue decreased 1% compared to the first six months of
2020, primarily reflecting Event Business projects utilizing less of the
Company's transportation and logistics services. Total tons of waste disposed of
or processed across all of our facilities decreased 14% for the first six months
of 2021 compared to the first six months of 2020. Tons of waste disposed of or
processed at our landfills during the first six months of 2021 was consistent
with the first six months of 2020.



T&D revenue from recurring Base Business waste generators increased 2% for the
first six months of 2021 compared to the first six months of 2020 and comprised
76% of total T&D revenue for the first six months of 2021. Comparing the first
six months of 2021 to the first six months of 2020, increases in Base Business
T&D revenue from the mining, exploration & production, chemical manufacturing,
and metal manufacturing industry groups were partially offset by decreases in
Base Business T&D revenue from the refining and broker/TSDF industry groups.



T&D revenue from Event Business waste generators decreased 10% for the first six
months of 2021 compared to the first six months of 2020 and comprised 24% of
total T&D revenue for the first six months of 2021. Comparing the first six
months of 2021 to the first six months of 2020, decreases in Event Business T&D
revenue from the chemical manufacturing, utilities and transportation industry
groups were partially offset by increases in Event Business T&D revenue from the
metal manufacturing, Other and waste management & remediation industry groups.



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The following table summarizes combined Base Business and Event Business T&D
revenue growth, within the Waste Solutions segment, by generator industry for
the first six months of 2021 as compared to the first six months of 2020:




                                   Treatment and Disposal Revenue Growth
                                    Six Months Ended June 30, 2021 vs.
                                      Six Months Ended June 30, 2020
Mining, Exploration & Production                    93%
Waste Management & Remediation                      54%
Metal Manufacturing                                 14%
Other                                               10%
Government                                          6%
General Manufacturing                               0%
Broker / TSDF                                       -4%
Chemical Manufacturing                             -15%
Refining                                           -23%
Transportation                                     -27%
Utilities                                          -34%




Field Services



Field Services segment revenue increased 12% to $242.9 million for the first six
months of 2021 compared with $217.5 million for the first six months of 2020.
The increase in Field Services segment revenue is primarily attributable to
higher revenues from our Remediation, Total Waste Management, Small Quantity
Generation and Treatment & Disposal business lines, partially offset by lower
revenues from our Other business line.



Energy Waste



Energy Waste segment revenue decreased 43% to $14.0 million for the first six
months of 2021 compared with $24.7 million for the first six months of 2020,
primarily attributable to declines in the energy markets and impacts from the
COVID-19 pandemic.



Gross Profit


Total gross profit decreased 9% to $107.4 million for the first six months of
2021, down from $117.5 million for the first six months of 2020. Total gross
margin was 23% for the first six months of 2021 compared with 26% for the first
six months of 2020.



Waste Solutions


Waste Solutions segment gross profit decreased 13% to $70.6 million for the
first six months of 2021, down from $81.5 million for the first six months of
2020. Total segment gross margin for the first six months of 2021 was 33%
compared with 38% for the first six months of 2020. The decrease in segment
gross margin was primarily attributable to a less favorable service mix in the
first six months of 2021 compared to the first six months of 2020. T&D gross
margin was 37% for the first six months of 2021 compared with 43% for the first
six months of 2020.



Field Services


Field Services segment gross profit increased 10% to $36.4 million for the first
six months of 2021, up from $33.0 million for the first six months of 2020.
Total segment gross margin was 15% for both the first six months of 2021 and
2020.



Energy Waste


Energy Waste segment gross profit  decreased 85% to $424,000 for the first six
months of 2021, down from $2.9 million for the first six months of 2020. Total
segment gross margin was 3% for the first six months of 2021 compared with
12%

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for the first six months of 2020. The decrease in segment gross margin was primarily attributable to lower volumes and a less favorable service mix in the first six months of 2020 compared to the first six months of 2020.

Selling, General and Administrative Expenses ("SG&A")




Total SG&A increased to $102.5 million, or 22% of total revenue, for the first
six months of 2021, up from $102.1 million, or 22% of total revenue, for the
first six months of 2020.



Waste Solutions



Waste Solutions segment SG&A decreased 3% to $13.1 million, or 6% of segment
revenue, for the first six months of 2021 compared with $13.4 million, or 6% of
segment revenue, for the first six months of 2020.



Field Services



Field Services segment SG&A increased 3% to $25.1 million, or 10% of segment
revenue, for the first six months of 2021 compared with $24.2 million, or 11% of
segment revenue, for the first six months of 2020. Field Services segment SG&A
for the first six months of 2020 includes $3.3 million of gains associated with
the settlement and changes in fair value of contingent consideration
liabilities. Excluding the impact of these gains, segment SG&A decreased 9% for
the first six months of 2021 compared with the first six months of 2020,
primarily attributable to lower employee labor and benefits costs.



Energy Waste


Energy Waste segment SG&A decreased 34% to $6.7 million, or 48% of segment
revenue, for the first six months of 2021 compared with $10.2 million, or 41% of
segment revenue, for the first six months of 2020. The decrease in segment SG&A
was primarily attributable to lower employee labor and benefits costs in the
first six months of 2021 as a result of our restructuring activities undertaken
in the first six months of 2020 in response to reduced energy-related
exploration and production investments in the markets we serve.



Corporate


Corporate SG&A increased 6% to $57.7 million, or 12% of total revenue, for the
first six months of 2021 compared with $54.2 million, or 12% of total revenue,
for the first six months of 2020. The increase in Corporate SG&A primarily
reflects higher employee labor and benefit costs, lower bad debt recoveries,
higher consulting and professional services expenses and higher insurance costs,
partially offset by lower business development and integration expenses in the
first six months of 2021 compared to the first six months of 2020.



Components of Adjusted EBITDA



Income tax (benefit) expense



Income tax benefit for the first six months of 2021 was $1.2 million, resulting
in a consolidated effective income tax rate of 19.3%. Income tax expense for the
first six months of 2020 was $2.0 million, resulting in a consolidated effective
income tax rate of (0.7)%. The increase in our effective tax rate for the first
six months of 2021 compared to the first six months of 2020 was primarily due to
non-deductible goodwill impairment charges incurred during the first six months
of 2020, and lower pre-tax earnings, excluding impairments, for the first six
months of 2021 which resulted in a tax benefit from the year-to-date loss of our
US operations, partially offset by foreign tax expense from the year-to-date
earnings of our foreign operations.



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Interest expense



Interest expense was $14.9 million for the first six months of 2021 compared
with $17.2 million for the first six months of 2020. The decrease is the result
of the impact of lower interest rates on the variable portion of our outstanding
debt as well as lower outstanding debt levels in the first six months of 2021
compared to the first six months of 2020.



Foreign currency loss (gain)


We recognized a $726,000 foreign currency loss for the first six months of 2021
compared with a $266,000 foreign currency gain for the first six months of 2020.
Foreign currency gains and losses reflect changes in business activity conducted
in a currency other than the USD, our functional currency. Additionally, we
established intercompany loans with certain of our Canadian subsidiaries, whose
functional currency is the CAD as part of a tax and treasury management strategy
allowing for repayment of third-party bank debt. These intercompany loans are
payable by our Canadian subsidiaries to US Ecology in CAD requiring us to
revalue the outstanding loan balance through our statements of operations based
on USD/CAD currency movements from period to period. At June 30, 2021, we had
$33.2 million of intercompany loans subject to currency revaluation.



Other income



Other income was $3.9 million for the first six months of 2021 compared with
other income of $296,000 for the first six months of 2020. In the first quarter
of 2021, the company recognized a gain of $3.5 million related to the change in
the fair value of a minority interest investment.



Goodwill impairment charges


We performed an interim assessment of the fair value of certain reporting units as of March 31, 2020. Based on the results of the assessment, we recognized goodwill impairment charges of $300.3 million in the first quarter of 2020.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense decreased 1% to $36.2 million for the first six months of 2021 compared with $36.4 million for the first six months of 2020.

Amortization of intangible assets




Intangible assets amortization expense decreased 4% to $17.9 million for the
first six months of 2021 compared with $18.6 million for the first six months of
2020.



Share-based compensation


Share-based compensation expense increased 31% to $4.0 million for the first six months of 2021 compared with $3.1 million for the first six months of 2020, primarily reflecting an increase in equity-based awards granted to employees.

Accretion and non-cash adjustment of closure and post-closure liabilities

Accretion and non-cash adjustment of closure and post-closure liabilities decreased 6% to $2.4 million for the first six months of 2021 compared with $2.5 million for the first six months of 2020.

Business development and integration expenses

Business development and integration expenses decreased 66% to $2.0 million for
the first six months of 2021, compared to $5.9 million for the first six months
of 2020, primarily attributable to lower NRC Merger integration expenses
incurred in the first six months of 2021 compared to the first six months of
2020.



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CRITICAL ACCOUNTING POLICIES



Financial statement preparation requires management to make estimates and
judgments that affect reported assets, liabilities, revenue and expenses and
disclosure of contingent assets and liabilities. The accompanying unaudited
consolidated financial statements are prepared using the same critical
accounting policies disclosed in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2020.



RECENTLY ISSUED ACCOUNTING STANDARDS

For information about recently issued accounting standards, see Note 1 of the Notes to Consolidated Financial Statements in "Part I, Item 1. Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q.

LIQUIDITY AND CAPITAL RESOURCES




We are continually evaluating the impact of the COVID-19 pandemic on our
financial condition and liquidity. Although the situation remains uncertain, we
believe that we have sufficient cash flow from operations and available
borrowings under the Revolving Credit Facility to execute our business strategy
in the short and longer term. While management continues to closely monitor the
impact of the COVID-19 pandemic, including the spread of new variants of the
virus and government and private sector responses to it in each of the locations
and sectors in which the Company does business, we believe that the Company's
strategy during the pandemic has increased the Company's resiliency and
positioned the Company to take advantage of any post-pandemic recovery.



Our primary sources of liquidity are cash and cash equivalents, cash generated
from operations and borrowings under the Credit Agreement. At June 30, 2021, we
had $85.2 million in unrestricted cash and cash equivalents immediately
available and $82.8 million of borrowing capacity, subject to our leverage
covenant limitation, available under our Revolving Credit Facility. We assess
our liquidity in terms of our ability to generate cash to fund our operating,
investing and financing activities. Our primary ongoing cash requirements are
funding operations, capital expenditures, paying principal and interest on our
long-term debt, and paying declared dividends pursuant to our dividend policy.
We believe future operating cash flows will be sufficient to meet our future
operating, investing and dividend cash needs for the foreseeable future.
Furthermore, existing cash balances and availability of additional borrowings
under the Credit Agreement provide additional sources of liquidity should they
be required. On June 29, 2021, Predecessor US Ecology amended the Credit
Agreement to extend the maturity date for the existing revolving credit facility
to June 29, 2026. The Credit Agreement was also amended to extend the existing
covenant relief period to end on the earlier of December 31, 2022 and the date
Predecessor US Ecology elects to end such covenant relief period pursuant to the
terms therein and to permanently increase Predecessor US Ecology's consolidated
total net leverage ratio requirement as of the end of each fiscal quarter ending
on and after December 31, 2022 to 4.50 to 1.00. See additional information on
the Fourth Amendment under "Amendments to the Credit Agreement," below.



Operating Activities



For the six months ended June 30, 2021, net cash provided by operating
activities was $44.1 million. This primarily reflects net loss of $5.0 million,
non-cash depreciation, amortization and accretion of $56.5 million, an increase
in deferred revenue of $4.5 million and share-based compensation expense of $4.0
million, partially offset by an increase in accounts receivable of $7.8 million,
deferred incomes taxes of $4.3 million and a gain of $3.5 million related to a
change in the fair value of a minority interest investment. Impacts on net
income are due to the factors discussed above under "Results of Operations." The
increase in deferred revenue is primarily attributable to cash payments that are
received, or advance billings charged, prior to performance of services and
waste that has been received but not yet treated or disposed at the end of the
period. Changes in accounts receivable are attributable to the timing of
customer payments.



We calculate days sales outstanding ("DSO") as a rolling four quarter average of
our net accounts receivable divided by our quarterly revenue. Our net accounts
receivable balance for the DSO calculation includes trade accounts receivable,
net of allowance for doubtful accounts, and unbilled accounts receivable,
adjusted for changes in deferred revenue. DSO was 89 days as of June 30, 2021,
compared to 86 days as of December 31, 2020, and 85 days as of June 30, 2020.

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For the six months ended June 30, 2020, net cash provided by operating
activities was $59.5 million. This primarily reflects net loss of $303.3
million, non-cash goodwill impairment charges of $300.3 million, non-cash
depreciation, amortization and accretion of $57.6 million and a decrease in
accounts receivable of $43.6 million, partially offset by a decrease in accounts
payable and accrued liabilities of $32.2 million, a decrease in accrued salaries
and benefits of $6.5 million and an increase in other assets of $5.2 million.
Impacts on net income are due to the factors discussed above under "Results of
Operations." Changes in accounts receivable and accounts payable and accrued
liabilities are attributable to the timing of payments from customers and
payments to vendors for products and services. The decrease in accrued salaries
and benefits is primarily attributable to the payment of accrued
employee-incentive compensation related to fiscal 2019 financial performance.



Investing Activities



For the six months ended June 30, 2021, net cash used in investing activities
was $25.1 million, primarily related to capital expenditures of $26.4 million
and a $712,000 investment in the preferred stock of a privately held company,
partially offset by $2.0 million in proceeds from the sale of property and
equipment. Capital projects consisted primarily of infrastructure upgrades at
our operating facilities and landfill cell development.



For the six months ended June 30, 2020, net cash used in investing activities
was $38.6 million, primarily related to capital expenditures of $36.0 million
and the acquisition of Impact Environmental, Inc. for $3.3 million in January
2020. Capital projects consisted primarily of equipment purchases and
infrastructure upgrades at our corporate and operating facilities.



Financing Activities



For the six months ended June 30, 2021, net cash used in financing activities
was $8.9 million, consisting primarily of a $6.0 million payment on our
revolving credit facility, $2.9 million in payments on our equipment financing
obligations, $2.5 million in payments to settle acquired contingent
consideration liabilities and $2.3 million in quarterly payments on our term
loan, partially offset by net short-term borrowings under our sweep arrangement
of $6.3 million. Quarterly cash dividends have been suspended and no dividends
were paid in the first six months of 2021.



For the six months ended June 30, 2020, net cash provided by financing
activities was $61.6 million, consisting primarily of $90.0 million in
borrowings on our revolving credit facility, partially offset by repurchases of
our common stock of $18.3 million and dividend payments to our stockholders
of
$5.7 million.



Credit Agreement
On April 18, 2017, Predecessor US Ecology, a wholly-owned subsidiary of the
Company, entered into the Credit Agreement that provides for a $500.0 million,
five-year revolving credit facility (the "Revolving Credit Facility"), including
a $75.0 million sublimit for the issuance of standby letters of credit and a
$40.0 million sublimit for the issuance of swingline loans used to fund
short-term working capital requirements. The Credit Agreement also contains an
accordion feature whereby Predecessor US Ecology may request up to $200.0
million of additional funds through an increase to the Revolving Credit
Facility, through incremental term loans, or some combination thereof. As
described herein, the Credit Agreement was amended in August and November 2019
in connection with the NRC Merger; and further amended on June 26, 2020 and June
29, 2021 pursuant to the Third Amendment and Fourth Amendment (each as defined
herein), respectively.



During the six months ended June 30, 2021, the effective interest rate on the
Revolving Credit Facility, after giving effect to the impact of our interest
rate swap and the amortization of the loan discount and debt issuance costs, was
4.13%. Interest only payments are due either quarterly or on the last day of any
interest period, as applicable. In March 2020, the Company entered into an
interest rate swap agreement, effectively fixing the interest rate on $460.0
million, or approximately 58%, of the Revolving Credit Facility and term loan
borrowings outstanding as of June 30, 2021.



As modified by the Fourth Amendment as described herein, Predecessor US Ecology
is required to pay a commitment fee ranging from 0.175% to 0.40% on the average
daily unused portion of the Revolving Credit Facility, with such

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commitment fee to be based upon Predecessor US Ecology's total net leverage
ratio (as defined in the Credit Agreement). The maximum letter of credit
capacity under the Revolving Credit Facility is $75.0 million and the Credit
Agreement provides for a letter of credit fee equal to the applicable margin for
LIBOR loans under the Revolving Credit Facility. At June 30, 2021, there were
$341.0 million of revolving credit loans outstanding on the Revolving Credit
Facility. These revolving credit loans are due upon the earliest to occur of (i)
June 29, 2026 (or, with respect to any lender, such later date as requested by
us and accepted by such lender), (ii) the date of termination of the entire
revolving credit commitment (as defined in the Credit Agreement) by us, and
(iii) the date of termination of the revolving credit commitment and are
presented as long-term debt in the consolidated balance sheets.



Predecessor US Ecology has entered into a sweep arrangement whereby day-to-day
cash requirements in excess of available cash balances are advanced to the
Company on an as-needed basis with repayments of these advances automatically
made from subsequent deposits to our cash operating accounts (the "Sweep
Arrangement"). Total advances outstanding under the Sweep Arrangement are
subject to the $40.0 million swingline loan sublimit under the Revolving Credit
Facility. Predecessor US Ecology's revolving credit loans outstanding under the
Revolving Credit Facility are not subject to repayment through the Sweep
Arrangement. As of June 30, 2021, there were $6.3 million in borrowings
outstanding subject to the Sweep Arrangement, which are presented as Short-term
borrowings in the consolidated balance sheet.



As of June 30, 2021, the availability under the Revolving Credit Facility was
$82.8 million, subject to our leverage covenant limitation, with $14.7 million
of the Revolving Credit Facility issued in the form of standby letters of credit
utilized as collateral for closure and post-closure financial assurance and
other assurance obligations.



Amendments to the Credit Agreement

On August 6, 2019, Predecessor US Ecology entered into the First Amendment to
the Credit Agreement, by and among Predecessor US Ecology, the subsidiaries of
Predecessor US Ecology party thereto, the lenders referred to therein and Wells
Fargo, as issuing lender, swingline lender and administrative agent. Effective
November 1, 2019, the First Amendment, among other things, extended the
expiration of the Revolving Credit Facility to November 1, 2024, permitted the
issuance of a $400.0 million incremental term loan to be used to refinance the
indebtedness of NRC and pay related transaction expenses in connection with the
NRC Merger, modified the accordion feature allowing Predecessor US Ecology to
request up to the greater of (x) $250.0 million and (y) 100% of consolidated
EBITDA plus certain additional amounts, increased the sublimit for the issuance
of swingline loans to $40.0 million and increased the maximum consolidated total
net leverage ratio to 4.00 to 1.00.



On November 1, 2019, Predecessor US Ecology entered into the lender joinder
agreement and the Second Amendment to the Credit Agreement. Effective November
1, 2019, the Second Amendment, among other things, amended the Credit Agreement
to increase the capacity for incremental term loans by $50.0 million and
provided for Wells Fargo lending $450.0 million in incremental term loans to
Predecessor US Ecology to pay off the existing debt of NRC in connection with
the NRC Merger, to pay certain fees, costs and expenses incurred in connection
with the NRC Merger and to repay outstanding borrowings under the Revolving
Credit Facility. The seven-year incremental term loan matures November 1, 2026,
requires principal repayment of 1% annually, and bears interest at LIBOR plus
2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base
rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a
stable or better outlook) or better from S&P and Ba2 (with a stable or better
outlook) or better from Moody's). During the six months ended June 30, 2021, the
effective interest rate on the term loan, including the impact of the
amortization of debt issuance costs, was 2.88%.



On June 26, 2020, Predecessor US Ecology entered into the Third Amendment to the
Credit Agreement. Among other things, the Third Amendment amended the Credit
Agreement to provide a covenant relief period through the earlier of March 31,
2022 and the date Predecessor US Ecology elects to end such covenant relief
period pursuant to the terms therein. During the covenant relief period, the
Third Amendment increased Predecessor US Ecology's consolidated total net
leverage ratio requirement as of the end of each fiscal quarter to certain
ratios above the 4.00 to 1.00 ratio in effect immediately before giving effect
to the Third Amendment, subject to compliance with certain restrictions on
restricted payments and permitted acquisitions during such covenant relief
period. Furthermore, during the covenant relief period, under the Revolving
Credit Facility, revolving credit loans are available based on a base rate
(as
defined in the Credit

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  Table of Contents

Agreement) or LIBOR, at the Company's option, plus an applicable margin, which
is determined according to a pricing grid under which the interest rate
decreases or increases based on our ratio of funded debt to consolidated
earnings before interest, taxes, depreciation and amortization (as defined
in
the Credit Agreement).


On June 29, 2021, Predecessor US Ecology entered into the Fourth Amendment to
the Credit Agreement. Among other things, the Fourth Amendment amends the Credit
Agreement to extend the maturity date for the existing revolving credit facility
to June 29, 2026 (or such earlier date as the revolving credit facility may
otherwise terminate pursuant to the terms of the Credit Agreement). The Fourth
Amendment also amends the Credit Agreement (i) to extend the existing covenant
relief period to end on the earlier of December 31, 2022 and the date
Predecessor US Ecology elects to end such covenant relief period pursuant to the
terms therein and (ii) to permanently increase Predecessor US Ecology's
consolidated total net leverage ratio requirement as of the end of each fiscal
quarter ending on and after December 31, 2022 to 4.50 to 1.00. During the
covenant relief period until the fiscal quarter ending December 31, 2022, the
Fourth Amendment increases Predecessor US Ecology's consolidated total net
leverage ratio requirement as of the end of each fiscal quarter to certain
ratios above the 4.50 to 1.00 ratio otherwise in effect after giving effect to
the Fourth Amendment, subject to compliance with certain restrictions on
restricted payments and permitted acquisitions during such covenant relief
period. Furthermore, after giving effect to the Fourth Amendment and whether or
not the covenant relief period is in effect, (i) if the Borrower's consolidated
total net leverage ratio is equal to or greater than 4.00 to 1.00 but less than
4.50 to 1.00, the interest rate on all outstanding borrowings of revolving
credit loans under the Credit Agreement will step-up to the LIBOR plus 2.25% or
a base rate plus 1.25% and the commitment fee will step-up to 0.375% and (ii) if
Predecessor US Ecology's consolidated total net leverage ratio is greater than
4.50 to 1.00, the interest rate on all outstanding borrowings of revolving
credit loans under the Credit Agreement will step-up to LIBOR plus 2.50% or a
base rate plus 1.50% and the commitment fee will step-up to 0.40%, in each case,
pursuant to the terms of the Credit Agreement. The Fourth Amendment also reset
any outstanding usage of certain negative covenant baskets, including baskets in
connection with the indebtedness, liens, investments, asset dispositions,
restricted payments and affiliate transactions negative covenants.



For additional information see Note 11 of the Notes to Consolidated Financial Statements in "Part I, Item 1. Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q.

CONTRACTUAL OBLIGATIONS AND GUARANTEES




In March 2020, the Company entered into an interest rate swap agreement with
Wells Fargo, effectively fixing the interest rate on $460.0 million, or
approximately 58%, of the Revolving Credit Facility and term loan borrowings
outstanding as of June 30, 2021. In connection with our entry into the March
2020 interest rate swap, we terminated our existing interest rate swap prior to
its scheduled maturity date of June 2021. For more information, see Note 11 of
the Notes to Consolidated Financial Statements in "Part I, Item 1. Financial
Statements (Unaudited)" of this Quarterly Report on Form 10-Q.



Except as set forth above, there were no material changes in the amounts of our
contractual obligations and guarantees during the six months ended June 30,
2021. For further information on our contractual obligations and guarantees,
refer to our Annual Report on Form 10-K for the fiscal year ended December 31,
2020.

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07/29US ECOLOGY : Q2 Earnings Snapshot
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07/29US ECOLOGY : Announces Second Quarter 2021 Results (Form 8-K)
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07/29US ECOLOGY, INC. : Results of Operations and Financial Condition, Financial Stat..
AQ
07/29Us Ecology, Inc. Reports Earnings Results for the Second Quarter Ended June 3..
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Financials (USD)
Sales 2021 966 M - -
Net income 2021 15,1 M - -
Net Debt 2021 689 M - -
P/E ratio 2021 70,7x
Yield 2021 -
Capitalization 1 049 M 1 049 M -
EV / Sales 2021 1,80x
EV / Sales 2022 1,65x
Nbr of Employees 3 600
Free-Float 98,1%
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Technical analysis trends US ECOLOGY, INC.
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TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 5
Last Close Price 33,57 $
Average target price 44,00 $
Spread / Average Target 31,1%
EPS Revisions
Managers and Directors
Jeffrey R. Feeler Chairman, President & Chief Executive Officer
Eric L. Gerratt Chief Financial Officer, Treasurer & Executive VP
Frank Russo Chief Information Officer & Vice President
Simon G. Bell Chief Operating Officer & Executive Vice President
Andrew Marshall Executive VP-Regulatory Compliance & Safety
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