HispanicBusiness

CORPORATE OVERVIEW

Fourth quarter revenue was up 8% year-over-year to $198.4 million while Adjusted EBITDA was $33.3 million, 9% lower compared to Q4 2011. Increased demand for our onsite contracts and projects was more than offset by the impact of lower value received for our recovered products and reduced oilfield activity. The impact of the lower value received for recovered crude oil, base oil and lead was $5.3 million. In addition, drilling activity was down 28% year-over-year. Excluding the lower value received for our products, Adjusted EBITDA would have been $38.6 million in Q4 2012. Reduced operational results and higher stock-based compensation, offset in part by lower finance charges, caused net earnings to decline 32% to $4.1 million in Q4 2012. Our Total Debt to Adjusted EBITDA ratio increased from 2.35 in Q4 2011 to 2.41 in Q4 2012.

In 2012, revenue increased 6% to $726.2 million (2011 - $682.8 million) and Adjusted EBITDA declined to $142.1 million (2011 - $146.5 million). Stronger demand for our contract and project services was offset by the lower value received for our products of $13.4 million, reduced oilfield activity and higher Adjusted SG&A expenses. In addition, drilling activity in 2012 decreased 15% from 2011. Excluding the lower value received for our products, Adjusted EBITDA would have been $155.5 million in 2012. Net earnings for the year increased 28% to $42.8 million. Lower finance charges, lower deferred income tax expense and gain on embedded derivatives contributed to the increase in net earnings.

Revenue and gross profit from Facilities in the quarter were $122.9 million and $21.7 million, down 1% and 17%, respectively, from Q4 2011. Compared to Q4 2011, active rigs decreased 28% and meters drilled were down 19%. Declines in the prices of crude oil, base oil and lead resulted in reduced prices received for our products of $4.3 million. Western Facilities efficiency improvements for the quarter were offset by the impact of lower oilfield activity. Eastern Facilities were positively impacted by an increase in volumes at Stoney Creek Landfill ("SCL") as compared to Q4 prior year. VSC volumes were 11% lower than Q4 2011. Compared to 2011, revenue and gross profit for the year declined 4% and 6%, respectively. The impact of lower value received for our products was $11.8 million.

Onsite revenue and gross profit in the quarter were $75.5 million and $17.3 million, up 26% and 5%, respectively, from Q4 2011. Strong demand for our contract and project services was impacted by lower value received for our products and reduced drilling activity. Declines in the price of crude oil resulted in reduced prices received for our products of $1.0 million. For the year, revenue and gross profit increased 28% and 19%, respectively, from the prior year. The increase was driven by our contract to process MFT and strong demand for our project services. This increase was partially offset by the impact of lower drilling activity and a decline in value received for our products. The impact of lower value received for our products was $1.6 million.

Return on capital decreased to 13.3% in Q4 2012 from 15.2% in Q4 2011. During the quarter, we closed an equity financing issuing 5.5 million shares for gross proceeds of $77.0 million (net $74.4 million).

Revenue ($ millions) and Adjusted EBITDA ($ millions): http://media3.marketwire.com/docs/213nal_graphs.pdf