U.S. Ecology (ECOL) Misses Q1 EPS by 5c

U.S. Ecology (NASDAQ: ECOL) reported Q1 EPS of $0.12, $0.05 worse than the analyst estimate of $0.17. Revenue for the quarter came in at $240.7 million versus the consensus estimate of $227.41 million.

2020 BUSINESS OUTLOOK:

On March 31, 2020, we announced certain capital preservation initiatives as a result of the unprecedented uncertainty due to the COVID-19 pandemic that included:

• Implementation of cost control initiatives expected to generate $15 million to $20 million in annual savings
• Reductions to the 2020 capital spending plan by approximately 30%, or $30 million
• The suspension of the quarterly dividend to preserve free cash flow by approximately $6 million per quarter and enhance liquidity

We also announced the withdrawal of our 2020 financial guidance due to the increased uncertainty the COVID-19 pandemic has on the Company’s business.

“Although the impact of the COVID-19 pandemic on our first quarter 2020 results was fairly limited we currently expect the second quarter to be adversely impacted as social distancing measures and shelter in place took effect.” commented Feeler. “In addition to the capital preservation initiatives announced earlier this year, the Company continues to evaluate additional cost saving measures and cash flow enhancements to strengthen our already strong balance sheet position, particularly if conditions worsen beyond our current expectations. We continue to manage US Ecology for the long term and we are committed to protecting our valuable workforce, managing through lower business activity with redeployment of team members to other business lines, reducing hours and taking advantage of furlough programs to prepare to take advantage of better business conditions. With approximately $110 million of cash and $76 million of capacity on our revolving line of credit, our liquidity and balance sheet remain strong and we anticipate that we will generate strong free cash flow despite results being lower than initially anticipated coming into the year.”

For earnings history and earnings-related data on U.S. Ecology (ECOL) click here.

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