GlobeNewswire Inc | Nov 5, 2021 06:00AM EDT

November 05, 2021

THIRD QUARTER HIGHLIGHTS COMPARED TO PRIOR YEAR:

-- Waste Solutions Base Business growth accelerates to 11% on strong underlying fundamentals -- Waste Solutions Event Business declines 18% due to ongoing project deferments and service mix -- Field Services segment revenue grows 5% despite difficult comparison to last year -- Energy Waste recovery continues; revenue doubling and adjusted EBITDA margin improving to 34% -- Total revenue increases 8% to $257.2 million -- Net Income of $6.7 million, earnings per diluted share of $0.21 -- Adjusted EBITDA of $45.4 million -- Adjusted free cash flow of $14.9 million

BOISE, Idaho, Nov. 05, 2021 (GLOBE NEWSWIRE) -- US Ecology, Inc. (NASDAQ-GS: ECOL) (US Ecology or the Company) today reported results for the third quarter ended September 30, 2021.

We remain encouraged by the acceleration in our underlying business activity, seeing sequential improvement in both revenue and profitability in the third quarter despite continued supply chain and pandemic-related challenges, commented Chairman and Chief Executive Officer, Jeff Feeler. Our Base Business generated double-digit revenue growth, driven by continued improvement in fundamentals and landfill volumes increasing approximately 13% compared to the third quarter last year. In terms of profitability, we are pleased that margins improved sequentially across all three of our operating segments despite ongoing delays in our Event Business, a less favorable service mix and cost inflation seen in the Waste Solutions segment.

Our Field Services segment saw continued revenue growth over strong performance in the third quarter last year, even with much lower COVID decontamination work and absent a large scale Emergency Response project. Meanwhile, margin compression in Field Services resulted from a less favorable service mix, labor constraints and cost inflation for both materials and transportation.

Higher activity levels and the continued recovery of our Energy Waste segment delivered strong growth, with revenue doubling to over $10 million from a year ago and adjusted EBITDA margin increasing to 34%."

Feeler continued, The trends we are seeing support the clear business recovery underway. We are confident the successful execution of our strategic priorities will drive stronger results in 2022 and beyond. I am proud of the hard work and dedication of our talented team, and we remain committed to driving our strategy, bringing down our leverage and building long-term growth and shareholder value.

THIRD QUARTER 2021 RESULTS

Revenue was $257.2 million in the third quarter of 2021, up 8% compared to $238.1 million in the third quarter of 2020.

Revenue for the Waste Solutions segment was $115.2 million, up 7% from $107.2 million in the third quarter of 2020. The increase was driven by an 11% increase in Base Business and a 25% increase in transportation revenue, partially offset by a 18% decline in Event Business compared to the same period in 2020.

Revenue for the Field Services segment was $131.6 million, up 5% from $125.7 million in the third quarter of 2020, primarily driven by increases in our Remediation, Small Quantity Generation and Industrial Services service lines partially offset by lower revenues from our Emergency Response and Transportation and Logistics service lines.

Revenue for the Energy Waste segment was $10.4 million compared to $5.2 million in the third quarter of 2020 driven by recovering oil demand and higher rig counts.

Net income was $6.7 million, or $0.21 per diluted share, compared to a net income of $6.3 million, or $0.20 per diluted share, in the third quarter of 2020. Adjusted earnings per diluted share was $0.22 and compares to adjusted earnings per diluted share of $0.25 in the third quarter of 2020.

Cash earnings per diluted share was $0.42 compared to $0.46 for the third quarter of 2020. Adjusted EBITDA was $45.4 million, consistent with the third quarter of 2020.

YEAR-TO-DATE RESULTS

Revenue for the first nine months of 2021 grew 5% to $726.6 million compared to $692.8 million in the first nine months of 2020.

Net income was $1.8 million, or $0.06 per diluted share, in the first nine months of 2021 compared to a net loss of $297.0 million, or $9.54 per diluted share, in the first nine months of 2020. Adjusted earnings per diluted share was $0.04 for the first nine months of 2021 compared to adjusted earnings per diluted share of $0.29 for the first nine months of 2020.

Cash earnings per diluted share was $0.65 for the first nine months of 2021 compared to $0.93 for the first nine months of 2020.

Adjusted free cash flow was $40.1 million for the first nine months of 2021 compared to $51.5 million in the first nine months of 2020.

Definitions and reconciliations of net income (loss) to adjusted EBITDA, earnings (loss) per diluted share to adjusted earnings per diluted share, earnings (loss) per diluted share to cash earnings per diluted share, and net cash provided by operating activities to adjusted free cash flow are attached as Exhibit A to this release.

2021 BUSINESS OUTLOOK

Despite significant improvement in fundamentals relative to 2020, the industrial sector, as measured by industrial production, is still operating below pre-pandemic levels. We continue to navigate its varying impacts on supply chain, transportation and logistics and labor, which continues to constrain waste flows and service opportunities. This has created headwinds to growth, increased our cost structure through inflation and resulted in further Event Business delays that are pushing additional volumes into 2022.

Even with these short term challenges, the positive trends across our segments combined with the strengthening of our Event Business pipeline are expected to drive growth next year. Our competitive position remains as strong as ever, and we continue to leverage our network of facilities and service offerings to win business and position US Ecology for the future, commented Feeler.

The Company now expects revenue for the full year in 2021 to be between $960 million and $990 million compared to the previous range of $940 million to $990 million, adjusted EBITDA to be between $158 million and $167 million compared to the previous range of $165 million to $175 million and adjusted earnings per diluted share to be between $0.22 to $0.41 compared to the previous guidance range of $0.37 to $0.60. Adjusted free cashflow is expected to be between $42 million and $54 million compared to the previous range of $42 million and $57 million.

The Companys revised 2021 business outlook is summarized in the table below:

(in millions, except per share data) Waste Field Energy Total Solutions Services Waste CompanyRevenue $433 - $445 $494 - $33 - $960 - $510 $35 $990Adjusted EBITDA $171 - $176 $75 - $79 $9 - $10 $158 - $167Adjusted earnings per n/a n/a n/a $0.22 -diluted share $0.41Cash earnings per share n/a n/a n/a $0.95 - $1.14Adjusted free cashflow n/a n/a n/a $42 - $54Capital Expenditures n/a n/a n/a $75 - $80

The following table reconciles projected net income to projected adjusted EBITDA guidance range:

For the Year Ending December 31, 2021(in thousands) Low High Projected Net Income $ 7,413 $ 13,476 Income tax expense 4,079 7,016 Interest expense, net 27,486 27,486 Foreign currency loss (gain) 385 385 Other income (4,099 ) (4,099 )Depreciation and amortization of plant and 72,311 72,311 equipmentAmortization of intangible assets 34,947 34,947 Accretion and non-cash adjustments of closure 5,054 5,054 & post-closure obligationsBusiness development and integration expenses 2,812 2,812 Share-based compensation 7,612 7,612 Projected Adjusted EBITDA $ 158,000 $ 167,000

The following table reconciles projected earnings per diluted share to projected adjusted earnings per diluted share and to projected cash earnings per diluted share:

For the Year Ending December 31, 2021 Low High Projected earnings per diluted share $ 0.24 $ 0.43 Adjustments: Plus: Business development and integration 0.06 0.06 expensesLess: Gain on minority interest investment (0.08 ) (0.08 )Foreign currency loss (gain) - - Projected adjusted earnings per diluted share $ 0.22 $ 0.41 Plus: projected amortization of Intangible 0.73 0.73 assets Projected cash earnings per diluted share $ 0.95 $ 1.14 Shares used in earnings per diluted share 31,385 31,385 calculation (in thousands)

The following table reconciles projected net cash provided by operating activities to projected adjusted free cash flow:

Year Ended December 31, 2021(in thousands) Low End of High End of Guidance GuidanceProjected net cash provided by operating $ 113,255 $ 120,255 activitiesLess: Purchases of property and equipment $ (80,000 ) $ (75,000 )Plus: Business development and integration $ 2,041 $ 2,041 expenses, net of taxPlus: Purchases of property and equipment for $ 1,719 $ 1,719 the Idaho facility rebuildPlus: Payment of deferred/contingent purchase $ 2,553 $ 2,553 considerationPlus: proceeds from sale of equipment $ 2,432 $ 2,432 Projected Adjusted Free Cash Flow $ 42,000 $ 54,000

Adjusted EBITDA and adjusted earnings per diluted share guidance exclude gains on minority interest investments, business development and integration expenses and foreign currency translation gains or losses.

CONFERENCE CALL

US Ecology, Inc. will hold an investor conference call on Friday, November 5, 2021 at 11:00 a.m. Eastern Daylight Time (9:00 a.m. Mountain Daylight Time) to discuss these results and its current financial position and business outlook. Questions will be invited after managements presentation. Interested parties can access the conference call by dialing 877-512-4138 or 412-317-5478. The conference call will also be broadcast live on the Companys website at www.usecology.com. An audio replay will be available through November 12, 2021 by calling 877-344-7529 or 412-317-0088 and using the passcode 10160909. The replay will also be accessible on the US Ecology website at www.usecology.com.

ABOUT US ECOLOGY, INC.

US Ecology, Inc. is a leading provider of environmental services to commercial and government entities. The company addresses the complex waste management and response needs of its customers offering treatment, disposal, beneficial re-use, and recycling of hazardous, non-hazardous, radioactive and other specialty waste. US Ecology also provides a variety of vertically integrated field services including logistics and response at its customers in-field locations and through its network of 10-day transfer facilities. Logistics solutions include specialty waste packaging, collection lab pack, transportation, and total waste management. Response solutions include emergency response, oil spill response standby services, spill clean-up services, remediation, and industrial services. US Ecologys focus on safety, environmental compliance, and best-in-class customer service enables us to effectively meet the needs of US Ecologys customers and to build long lasting relationships. US Ecology has been protecting the environment since 1952. For more information, visit www.usecology.com.

Forward looking statements are only predictions and are not guarantees of performance. These statements are based on managements beliefs and assumptions, which in turn are based on currently available information. Important assumptions include, among others, those regarding demand for the Companys services, expansion of service offerings geographically or through new or expanded service lines, the timing and cost of planned capital expenditures, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. Forward looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include developments related to the COVID-19 pandemic, fluctuations in commodity markets related to our business, the loss or failure to renew significant contracts, competition in our markets, adverse economic conditions, our compliance with applicable laws and regulations, potential liability in connection with providing oil spill response services and waste disposal services, the effect of existing or future laws and regulations related to greenhouse gases and climate change, the effect of our failure to comply with U.S. or foreign anti-bribery laws, the effect of compliance with laws and regulations, an accident at one of our facilities, incidents arising out of the handling of dangerous substances, our failure to maintain an acceptable safety record, our ability to perform under required contracts, limitations on our available cash flow as a result of our indebtedness, liabilities arising from our participation in multi-employer pension plans, the effect of changes in the method of determining the London Interbank Offered Rate or the replacement thereto, risks associated with our international operations, the impact of changes to U.S. tariff and import and export regulations, a change in our classification as an Oil Spill Removal Organization, cyber security threats, unanticipated changes in tax rules and regulations, loss of key personnel, a deterioration in our labor relations or labor disputes, our reliance on contractors to provide emergency response services, our access to insurance, 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, renewals of our operating permits or lease agreements with regulatory bodies, our access to cost-effective transportation services, lawsuits, our implementation of new technologies, fluctuations in foreign currency markets and foreign affairs, our integration of acquired businesses, our ability to pay dividends or repurchase stock, anti-takeover regulations, stock market volatility, the failure of the warrants to be in the money or their expiration worthless and risks related to our compliance with maritime regulations (including the Jones Act).

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, we undertake 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 that the expectations reflected in forward looking statements are reasonable, we cannot guarantee future results or performance.

US ECOLOGY, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenue Waste $ 115,201 $ 107,249 $ 327,708 $ 319,684 SolutionsField Services 131,582 125,715 374,491 343,217 Energy Waste 10,399 5,178 24,375 29,879 Total 257,182 238,142 726,574 692,780 Gross profit (loss)Waste 39,548 41,518 110,165 123,042 SolutionsField Services 22,164 24,938 58,549 57,973 Energy Waste 1,442 (2,163 ) 1,866 737 Total 63,154 64,293 170,580 181,752 Selling,general & administrativeexpensesWaste 6,672 6,407 19,743 19,841 SolutionsField Services 11,761 13,637 36,819 37,869 Energy Waste 3,301 3,277 9,975 13,457 Corporate 25,949 27,819 83,683 82,044 Total 47,683 51,140 150,220 153,211 Goodwill andintangible asset impairmentchargesField Services - - - 16,700 Energy Waste - - - 283,600 Operating 15,471 13,153 20,360 (271,759 )income (loss) Other income (expense):Interest 485 9 1,148 251 incomeInterest (7,144 ) (7,964 ) (22,022 ) (25,127 )expenseForeigncurrency gain 341 (421 ) (385 ) (155 )(loss)Other 114 86 4,020 382 Total other (6,204 ) (8,290 ) (17,239 ) (24,649 )expense Income (loss)before income 9,267 4,863 3,121 (296,408 )taxesIncome taxexpense 2,535 (1,456 ) 1,348 542 (benefit) Net income $ 6,732 $ 6,319 $ 1,773 $ (296,950 )(loss) Earnings(loss) per share:Basic $ 0.22 $ 0.20 $ 0.06 $ (9.54 )Diluted $ 0.21 $ 0.20 $ 0.06 $ (9.54 ) Shares used inearnings (loss)per share calculation:Basic 31,151 31,069 31,131 31,142 Diluted 31,400 31,324 31,377 31,142 Dividends paid $ - $ - $ - $ 0.18 per share

US ECOLOGY, INC.CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited) September 30, December 31, 2021 2020Assets Current Assets: Cash and cash equivalents $ 71,432 $ 73,848 Receivables, net 261,128 241,978 Prepaid expenses and other current assets 31,799 28,379 Income tax receivable 18,340 18,279 Total current assets 382,699 362,484 Property and equipment, net 450,720 456,637 Operating lease assets 44,947 51,474 Restricted cash and investments 3,758 5,598 Intangible assets, net 497,636 523,988 Goodwill 413,101 413,037 Other assets 26,062 18,065 Total assets $ 1,818,923 $ 1,831,283 Liabilities and Stockholders? Equity Current Liabilities: Accounts payable $ 66,402 $ 35,881 Deferred revenue 17,475 15,267 Accrued liabilities 51,750 59,296 Accrued salaries and benefits 27,681 30,918 Income tax payable 48 977 Current portion of long-term debt 3,359 3,359 Current portion of closure and post-closure 8,234 6,471 obligationsCurrent portion of operating lease 15,114 17,048 liabilitiesTotal current liabilities 190,063 169,217 Long-term debt 753,965 782,484 Long-term closure and post-closure 90,107 89,398 obligationsLong-term operating lease liabilities 30,739 35,069 Other long-term liabilities 18,718 32,201 Deferred income taxes, net 119,358 120,983 Total liabilities 1,202,950 1,229,352 Commitments and contingencies Stockholders? Equity Common stock 315 315 Additional paid-in capital 820,600 820,567 Retained deficit (186,679 ) (188,452 )Treasury stock (10,919 ) (15,841 )Accumulated other comprehensive loss (7,344 ) (14,658 )Total stockholders? equity 615,973 601,931 Total liabilities and stockholders? equity $ 1,818,923 $ 1,831,283

US ECOLOGY, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited) For the Nine Months Ended September 30, 2021 2020 Cash Flows From Operating Activities: Net income (loss) $ 1,773 $ (296,950 )Adjustments to reconcile net income (loss) to net cash provided byoperating activities: Depreciation and amortization of property 54,095 54,831 and equipmentAmortization of intangible assets 26,501 27,812 Accretion of closure and post-closure 3,571 3,812 obligationsChange in fair value of minority interest (3,509 ) - investmentUnrealized foreign currency (gain) loss (1,028 ) 87 Deferred income taxes (3,822 ) 79 Share-based compensation expense 5,748 4,861 Share-based payment of business development 417 1,142 and integration expensesUnrecognized tax benefits 37 (8 )Net (gain) loss on disposition of assets (337 ) 1,817 Amortization of debt discount 121 121 Amortization of debt issuance costs 1,851 1,640 Goodwill impairment charges - 300,300 Change in fair value of contingent 282 (3,207 )considerationChanges in assets and liabilities (net of effects of business acquisitions):Receivables (19,064 ) 25,297 Income tax receivable (70 ) (6,250 )Other assets (7,093 ) (8,345 )Accounts payable and accrued liabilities 20,666 (19,177 )Deferred revenue 2,185 930 Accrued salaries and benefits (3,239 ) (4,494 )Income tax payable (943 ) 287 Closure and post-closure obligations (1,101 ) (1,341 )Net cash provided by operating activities 77,041 83,244 Cash Flows From Investing Activities: Purchases of property and equipment (45,347 ) (45,124 )Proceeds from sale of property and equipment 2,431 1,079 Proceeds from sale of restricted investments 3,192 970 Purchases of restricted investments (1,014 ) (1,113 )Minority interest investment (712 ) - Insurance proceeds from damaged property and - 1,131 equipmentBusiness acquisitions, net of cash acquired - (3,309 )Net cash used in investing activities (41,450 ) (46,366 ) Cash Flows From Financing Activities: Proceeds from short-term borrowings 61,326 72,353 Payments on short-term borrowings (61,326 ) (72,353 )Payments on long-term debt (29,375 ) (33,375 )Payment of equipment financing obligations (4,344 ) (4,827 )Payment of contingent consideration (2,553 ) (2,085 )liabilitiesDeferred financing costs paid (957 ) (1,144 )Repurchases of common stock (465 ) (18,332 )Proceeds from long-term debt - 90,000 Dividends paid - (5,667 )Other - 28 Net cash (used in) provided by financing (37,694 ) 24,598 activities Effect of foreign exchange rate changes on 26 (480 )cash (Decrease) increase in cash and cash (2,077 ) 60,996 equivalents and restricted cash Cash and cash equivalents and restricted 75,104 42,140 cash at beginning of period Cash and cash equivalents and restricted $ 73,027 $ 103,136 cash at end of period

EXHIBIT ANon-GAAP Results and Reconciliations

US Ecology reports adjusted EBITDA, adjusted earnings (loss) per diluted share, cash earnings per diluted share results and adjusted free cash flow, which are non-GAAP financial measures, as a complement to results provided in accordance with generally accepted accounting principles in the United States (GAAP) and believes that such information provides analysts, stockholders, and other users information to better understand the Companys operating performance. Because adjusted EBITDA, adjusted earnings (loss) per diluted share and adjusted free cash flow are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations they may not be comparable to similar measures used by other companies. Items excluded from adjusted EBITDA, adjusted earnings (loss) per diluted share and adjusted free cash flow are significant components in understanding and assessing financial performance.

Adjusted EBITDA, adjusted earnings (loss) per diluted share, cash earnings per diluted share and adjusted free cash flow 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. Adjusted EBITDA, adjusted earnings (loss) per diluted share and adjusted free cash flow have limitations as analytical tools 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 cash requirements for such replacements; -- Adjusted EBITDA does not reflect our business development and integration expenses, which may vary significantly quarter to quarter;

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, non-cash impairment charges, business development and integration expenses and other income/expense.

The following reconciliation itemizes the differences between reported net income (loss) and adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020:

(in Three Months Ended Nine Months Endedthousands) September 30, September 30, 2021 2020 2021 2020 Net income $ 6,732 $ 6,319 $ 1,773 $ (296,950 )(loss)Income taxexpense 2,535 (1,456 ) 1,348 542 (benefit)Interest 7,144 7,964 22,022 25,127 expenseInterest (485 ) (9 ) (1,148 ) (251 )incomeForeigncurrency (341 ) 421 385 155 (gain) lossOther income (114 ) (86 ) (4,020 ) (382 )Goodwillimpairment - - - 300,300 chargesDepreciationandamortization 17,898 18,435 54,095 54,831 of plant andequipmentAmortizationof 8,586 9,178 26,501 27,812 intangibleassetsShare-based 1,713 1,773 5,748 4,861 compensationAccretionand non-cashadjustments 1,198 1,279 3,571 3,812 of closure &post-closureobligationsBusinessdevelopmentand 523 1,627 2,528 7,507 integrationexpensesAdjusted $ 45,389 $ 45,445 $ 112,803 $ 127,364 EBITDA

Adjusted Earnings Per Diluted Share

The Company defines adjusted earnings per diluted share as net income (loss) adjusted for the after-tax impact of the gain on a minority interest investment, the after-tax impact of business development and integration costs, the after-tax impact of non-cash goodwill impairment charges, and non-cash foreign currency translation gains or losses, divided by the number of diluted shares used in the earnings (loss) per diluted share calculation.

The gain on a minority interest investment excluded from the earnings (loss) per diluted share calculation represents an increase in the fair value of our investment based on a recent observable transaction in the equity of the entity. Impairment charges excluded from the earnings (loss) per diluted share calculation are related to the Companys assessment of goodwill associated with its Energy Waste and international businesses. Business development and integration costs excluded from the earnings (loss) per diluted share calculation relate to expenses incurred to evaluate businesses for potential acquisition or costs related to closing and integrating successfully acquired businesses and transaction expenses. The foreign currency translation gains or losses excluded from the earnings (loss) per diluted share calculation are related to 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.

We believe excluding the gain on minority interest investment, business development and integration costs, non-cash impairment charges, and non-cash foreign currency translation gains or losses from the earnings (loss) per diluted share calculation provides meaningful information to investors regarding the operational and financial performance of the Company.

Cash Earnings Per Diluted Share

The Company defines cash earnings per diluted share as adjusted earnings per diluted share (see definition above) plus amortization of intangible assets, net of tax.

The following reconciliation itemizes the differences between reported net income (loss) and earnings (loss) per diluted share to adjusted net income and adjusted earnings per diluted share and cash earnings per diluted share for the three and nine months ended September 30, 2021 and 2020:

(inthousands, Three Months Ended September 30,except pershare data) 2021 2020 Income Income tax Income (loss) Income tax (loss) benefit Net income per share before income benefit Net income per share before (expense) (loss) taxes (expense) (loss) income taxesAs Reported $ 9,267 $ (2,535 ) $ 6,732 $ 0.21 $ 4,863 $ 1,456 $ 6,319 $ 0.20 Adjustments: Plus:Businessdevelopment 523 (144 ) 379 0.01 1,627 (447 ) 1,180 0.04 andintegrationexpensesForeigncurrency (341 ) 94 (247 ) - 421 (116 ) 305 0.01 (gain) loss As Adjusted $ 9,449 $ (2,585 ) $ 6,864 $ 0.22 $ 6,911 $ 893 $ 7,804 $ 0.25 Plus:Amortizationof $ 8,586 $ (2,367 ) 6,219 0.20 $ 9,178 $ (2,529 ) 6,649 0.21 intangibleassets Cashearnings per $ 18,035 $ (4,952 ) $ 13,083 $ 0.42 $ 16,089 $ (1,636 ) $ 14,453 $ 0.46 dilutedshare Shares usedin earningsper diluted 31,400 31,324 sharecalculation (inthousands, Nine Months Ended September 30,except pershare data) 2021 2020 Income Income tax (Loss) income Income tax (loss) benefit Net income per share before income benefit Net (loss) per share before (expense) (loss) taxes (expense) income income taxesAs Reported $ 3,121 $ (1,348 ) $ 1,773 $ 0.06 $ (296,408 ) $ (542 ) $ (296,950 ) $ (9.54 ) Adjustments: Less: Gainon minority (3,509 ) 965 (2,544 ) (0.08 ) - - - - interestinvestmentPlus:Goodwill - - - - 300,300 - 300,300 9.64 impairmentchargesPlus:Businessdevelopment 2,528 (695 ) 1,833 0.06 7,507 (2,064 ) 5,443 0.18 andintegrationexpensesForeigncurrency 385 (106 ) 279 - 155 (43 ) 112 0.01 loss As Adjusted $ 2,525 $ (1,184 ) $ 1,341 $ 0.04 $ 11,554 $ (2,649 ) $ 8,905 $ 0.29 Plus:Amortizationof $ 26,501 $ (7,296 ) 19,205 0.61 $ 27,812 $ (7,716 ) 20,096 0.64 intangibleassets Cashearnings per $ 29,026 $ (8,480 ) $ 20,546 $ 0.65 $ 39,366 $ (10,365 ) $ 29,001 $ 0.93 dilutedshare Shares usedin earnings(loss) per 31,377 31,142 dilutedsharecalculation

Adjusted Free Cash Flow

The Company defines adjusted free cash flow as net cash provided by operating activities less purchases of property plant and equipment, plus business development and integration expenses, plus payments of deferred/contingent purchase consideration, plus purchases of property and equipment for the Grand View, Idaho facility rebuild, plus proceeds from sale of property and equipment.

The following reconciliation itemizes the differences between reported net cash from operating activities to adjusted free cash flow for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended Nine Months Ended September 30, September 30,(in thousands) 2021 2020 2021 2020 Adjusted FreeCash Flow ReconciliationNet cashprovided by $ 32,967 $ 23,718 $ 77,041 $ 83,244 operatingactivitiesLess: Purchasesof property and (18,916 ) (9,167 ) (45,347 ) (45,124 )equipmentPlus: Businessdevelopment andintegration 379 1,180 1,833 5,443 expenses, netof taxPlus: Purchasesof property andequipment for - 825 1,636 2,815 the IdahofacilityrebuildPlus: Paymentof deferred/contingent - - 2,553 4,000 purchaseconsiderationPlus: Proceedsfrom sale of 432 291 2,431 1,079 property andequipment Adjusted Free $ 14,862 $ 16,847 $ 40,147 $ 51,457 Cash Flow

Contact:Alison ZieglerDarrow Associates(201)220-2678aziegler@darrowir.comwww.usecology.com