SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Clean Harbors Inc – ‘424B4’ on 12/8/05

On:  Thursday, 12/8/05, at 2:21pm ET   ·   Accession #:  1047469-5-27962   ·   File #:  333-129346

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/08/05  Clean Harbors Inc                 424B4                  1:2.6M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Prospectus                                          HTML   2.62M 

Filed Pursuant to Rule 424(b)(4)
Registration No. 333-129346

2,000,000 Shares

Common Stock

        Clean Harbors, Inc. is selling 2,000,000 shares of common stock.

        Our common stock is listed on the NASDAQ National Market under the symbol "CLHB." The last reported sale price on the NASDAQ National Market on December 7, 2005 was $28.30 per share.

        The underwriters have an option to purchase a maximum of 300,000 additional shares to cover over-allotments of shares.

        Investing in our common stock involves risks. See "Risk Factors" on page 10.

        Delivery of the shares of common stock will be made on or about December 13, 2005.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse First Boston

CJS Securities, Inc.

The date of this prospectus is December 7, 2005.

TABLE OF CONTENTS

PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus or in the documents incorporated by reference into this prospectus, is not complete and may not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the "Risk Factors" section before investing in our common stock. In this prospectus, unless the context requires otherwise, "we," "our," "us," "Clean Harbors" or "the Company" refers to Clean Harbors, Inc. and its subsidiaries.

Our Company

        We are one of the largest providers of environmental services and the largest operator of non-nuclear hazardous waste treatment facilities in North America based on 2003 industry reports. We service approximately 55% of North America's commercial hazardous incineration volume, 17% of North America's hazardous landfill volume, and are the industry leader in total hazardous waste disposal facilities. We perform environmental services through a network of more than 100 service locations, and we operate five incineration facilities, nine commercial landfills, seven wastewater treatment operations, and 20 transportation, storage and disposal facilities, or TSDFs, as well as five Polychlorinated Biphenyls "PCB" management facilities and two oil and used oil products recycling facilities.

        The wastes that we handle include materials that are classified as "hazardous" because of their unique properties, as well as other materials subject to federal and state environmental regulation. We provide final treatment and disposal services designed to manage hazardous and non-hazardous wastes, which cannot be economically recycled or reused.

        Clean Harbors, Inc. was incorporated in Massachusetts in 1980 and has grown through a combination of strategic acquisitions and internal growth. The most significant of such acquisitions was our acquisition in September 2002 of substantially all of the assets of the Chemical Services Division, or CSD, of Safety-Kleen Corp. Our revenues increased from $350.1 million in 2002 to $611.0 million in 2003 primarily as a result of that acquisition.

Our Services

        We provide a wide range of environmental services and manage our business as two major segments: Technical Services and Site Services.

        Technical Services    (69% of 2004 revenue). These services involve the transport, treatment and disposal of hazardous wastes, and include physical treatment, resource recovery, fuels blending, incineration, landfill disposal, wastewater treatment, lab chemical disposal, explosives management, and CleanPack® and Apollo Onsite Services. Our CleanPack® services include the collection, logistics management, specialized packaging, transportation and disposal of laboratory chemicals and household hazardous wastes. Our Apollo Onsite Services provide outsourced environmental programs management at customer sites.

        Site Services    (31% of 2004 revenue). These services provide customers with highly skilled experts who utilize specialty equipment and resources to perform services at any chosen location. Under the Site Services umbrella, our Field Service crews and equipment are dispatched on a planned or emergency basis, and perform services such as confined space entry for tank cleaning, site decontamination, large remediation projects, selective demolition, spill cleanup, railcar cleaning, product recovery and transfer, scarifying and media-blasting and vacuum services. Additional services include used oil and oil products recycling, as well as PCB management and disposal. Also, as part of Site Services, Industrial Services crews focus on industrial cleaning and maintenance projects.

2

Our Industry

        According to industry reports, the hazardous waste disposal market in North America is in excess of $2.0 billion. We also service the much larger industrial maintenance market. The $2.0 billion estimate does not include the industrial maintenance market, except to the extent that the costs of disposal of hazardous wastes generated as a result of industrial maintenance are included. The largest generators of hazardous waste materials are companies in the chemical, petrochemical, primary metals, paper, furniture, aerospace and pharmaceutical industries.

        The hazardous waste management industry was "created" in 1976 with the passage of the Resource Conservation and Recovery Act, or RCRA. RCRA requires waste generators to distinguish between "hazardous" and "non-hazardous" wastes, and to treat, store and dispose of hazardous waste in accordance with specific regulations. This new regulatory environment, combined with strong economic growth, increased corporate concern surrounding environmental liabilities, and early-stage industry dynamics contributed to growth in the industry.

        In the mid to late 1990s, the hazardous waste management industry was characterized by overcapacity, minimal regulatory advances and pricing pressure. However, since 2001, over one-third of all North American commercial incineration capacity has been eliminated, and we believe that competition has been reduced through consolidation and that new regulations have increased the overall barriers to entry.

        The collection and disposal of solid and hazardous wastes are subject to local, state, provincial and federal requirements and regulations, which regulate health, safety, the environment, zoning and land-use. Included in these regulations is the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, of the United States. CERCLA holds generators and transporters of hazardous substances, as well as past and present owners and operators of sites where there has been a hazardous release, strictly, jointly and severally liable for environmental cleanup costs resulting from the release or threatened release. Canadian companies are regulated under similar regulations, but the responsibility and liability associated with the waste passes from the generator to the transporter or receiver of the waste, in contrast to provisions of CERCLA.

Corporate Information

        We are a publicly traded company listed on The Nasdaq National Market under the symbol "CLHB." Our corporate offices are located at 1501 Washington Street, Braintree, MA 02184-7535, Attention: Executive Offices (telephone (781) 849-1800 ext. 4454). Our website address is www.cleanharbors.com. The information contained or incorporated in our website is not part of this prospectus.

3

The Offering

        The number of shares of our common stock to be outstanding after this offering is based on the number of shares outstanding as of October 31, 2005, and does not include:

•

498,690 shares of common stock issuable upon exercise of outstanding common stock purchase warrants expiring September 10, 2009 with an exercise price of $8.00 per share;



•

212,821 shares of common stock issuable upon conversion of our outstanding Series B convertible preferred stock with a conversion price of $16.45 per common share;



•

290,637 shares of common stock issuable upon the exercise of options outstanding under our employee stock benefit plans which were either then vested or will vest within 60 days thereafter having a weighted average exercise price of $6.87 per share as of that date;



•

591,410 shares of common stock issuable from time to time in the future under our Employee Stock Purchase Plan; and



•

up to 300,000 additional shares of common stock we have agreed to sell if the underwriters exercise in full their over-allotment option.

        Unless otherwise stated, all information contained in this prospectus assumes that the underwriters will not exercise their over-allotment option.

4

Summary Historical Consolidated Financial Data

        The following summary consolidated financial information should be reviewed in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Selected Historical Consolidated Financial Data" and our financial statements and the notes thereto included elsewhere in this prospectus.

        The summary historical income statement data set forth below for the years ended December 31, 2002, 2003 and 2004 and the summary historical balance sheet data at December 31, 2003 and 2004 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary historical balance sheet data set forth below as of December 31, 2002 have been derived from the audited consolidated financial statements not included in this prospectus. The summary historical income statement data set forth below for the nine months ended September 30, 2004 and 2005 and the summary historical balance sheet data as of September 30, 2005 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The summary historical balance sheet data as of September 30, 2004 has been derived from unaudited consolidated financial statements not included in this prospectus. The unaudited financial statements include, in the opinion of our management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the data for such periods. The results of operations for the interim periods are not necessarily indicative of operating results for the full year.

5

(1)

We restated our financial statements for the years ended December 31, 2003 and 2002, in order to correct errors related to estimated self-insured workers' compensation and motor vehicle liability claims. We concluded that our previous methodology for estimating our self-insured workers' compensation and motor vehicle insurance claims resulted in an understatement of our self-insured liabilities because negative trends inherent in these types of liabilities were not considered in calculating the self-insured liability. The new methodology involves using an actuarial-based method versus the specific reserve method previously used. For the years ended December 31, 2003 and 2002, the impact of the restatements resulting from correcting our self-insured liabilities on net loss was as follows (in thousands):

The adjustments for the years ended December 31, 2003 and 2002 did not change the amount of income tax expense previously recorded for those periods. For the years ended December 31, 2003 and 2002, the impact on other accrued expenses resulting from the correction of our self-insured liabilities was as follows (in thousands):

6

At December 31, 2003 and 2002, the impact of this restatement on accumulated deficit was as follows (in thousands):

        The adjustments had no effect on net cash provided by operating activities.

(2)

Effective as of September 7, 2002, we acquired the assets of the Chemical Services Division of Safety-Kleen Corp. Amounts recorded for the year ended December 31, 2002, for revenues, cost of revenues, selling general and administrative expenses, accretion of environmental liabilities, depreciation and amortization, restructuring, other acquisition costs, other income, loss on refinancings, interest expense, provision for income taxes, working capital, total assets, long-term obligations, redeemable preferred stock and stockholders' equity were either significantly impacted by or resulted from the acquisition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Acquisition" and "—Results of Operations."

(3)

Effective January 1, 2003, we adopted Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement Obligations." Accretion of environmental liabilities for the nine months ended September 30, 2005 and 2004, and the years ended December 31, 2004 and 2003, were due primarily to the implementation as of January 1, 2003 of SFAS No. 143 and accretion of the discount for the remedial liabilities assumed as part of the CSD assets acquired. Accretion of environmental liabilities for the year ended December 31, 2002, related to the accretion of the discount for the remedial liabilities assumed in the acquisition of the CSD assets. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Environmental Liabilities."

(4)

As further discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Redemption of Series C Preferred Stock," we had outstanding prior to June 30, 2004, 25,000 shares of Series C Convertible Preferred Stock which consisted of two components, namely, the Host Contract and an Embedded Derivative which reflected the right of the holders of the Series C Preferred Stock to convert into our common stock on the terms set forth in the Series C Preferred Stock. The value of the Embedded Derivative was periodically marked to market which resulted in the inclusion of gains (losses) as a component of other income (expense) of $(1.6) million for the nine months ended September 30, 2004, and $(1.6) million, $(0.4) million and $0.1 million for the years ended December 31, 2004, 2003 and 2002, respectively.

(5)

As further discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—The 2004 Refinancing" and "—Redemption of Series C Preferred Stock," we repaid on June 30, 2004 our then outstanding debt, redeemed our then outstanding Series C Preferred Stock and settled the Embedded Derivative liability associated with our Series C Preferred Stock. For the year ended December 31, 2004, we recorded refinancing expenses, net of $7.1 million relating to these activities.

(6)

The fiscal year 2002 provision for income taxes included a $1.1 million charge to provide a valuation allowance for all net deferred tax assets.

(7)

As further discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—The 2004 Refinancing" and "—Redemption of Series C Preferred Stock," we had outstanding prior to June 30, 2004, 25,000 shares of Series C Convertible Preferred Stock. The amounts of $11.7 million and $11.8 million for the nine-month period ended September 30, 2004

7

and year ended December 31, 2004, respectively, both include $9.9 million related to the redemption of the Series C Preferred Stock.

(8)

For all periods presented, "Adjusted EBITDA" consists of net income (loss) plus accretion of environmental liabilities, depreciation and amortization, net interest expense, provision for (benefit from) income taxes, non-recurring severance charges, other non-recurring refinancing-related expenses, change in value of embedded derivative associated with our previously outstanding Series C Preferred Stock (which we redeemed June 30, 2004), and gain (loss) on sale of fixed assets. Such definition of "Adjusted EBITDA" is the same as the definition of "EBITDA" used in our current credit agreement and indenture for covenant compliance purposes. See below for a reconciliation of Adjusted EBITDA to both net income (loss) and net cash provided by operating activities for the specified periods. Our management considers Adjusted EBITDA to be a measurement of performance which provides useful information to both management and investors. Adjusted EBITDA should not be considered an alternative to net income or loss or other measurements under GAAP. Because Adjusted EBITDA is not calculated identically by all companies, our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following is a reconciliation of net income (loss) to Adjusted EBITDA for the following periods (in thousands):

(*)

See footnote (1) above describing the restatement of our financial statements for the year-ended December 31, 2003 and 2002.

8

The following reconciles Adjusted EBITDA to net cash provided by operating activities for the following periods (in thousands):

(*)

See footnote (1) above describing the restatement of our financial statements for the years ended December 31, 2003 and 2002.

(9)

Capital expenditures include costs in connection with bringing our incinerators into compliance with the new MACT standards as follows: $4.3 million, $18.9 million and $2.3 million during the years ended December 31, 2004, 2003, and 2002, respectively.

(10)

Long-term obligations (including current portion) include borrowings under our current and former revolving credit facilities.

9

RISK FACTORS

        An investment in our common stock involves certain risks, including those we describe below. You should consider carefully these risk factors together with all of the information included or referred to in this prospectus before investing in our common stock.

Risks Relating to Our Business

        We assumed significant environmental liabilities as part of the CSD acquisition, and our financial condition and results of operations would be adversely affected if we were required to pay such liabilities more rapidly or in greater amounts than now estimated.

        As part of our acquisition of the assets of the CSD effective September 7, 2002, we assumed certain environmental liabilities of the CSD which were valued as of December 31, 2004, at approximately $184.5 million. We calculate certain of these liabilities on a present value basis in accordance with generally accepted accounting principles (which takes into consideration both the amount of such liabilities and the timing when it is projected that we will be required to pay such liabilities). We anticipate such liabilities will be payable over many years and that cash flows generated from our operations will generally be sufficient to fund the payment of such liabilities when required. However, events not now anticipated (such as future changes in environmental laws and regulations or their enforcement) could require that such payments be made earlier or in greater amounts than now estimated, which could adversely affect our financial condition and results of operations.

        If we are unable to obtain at reasonable cost the significant amount of insurance and financial assurances which are required for our operations, our business and results of operations would be adversely affected.

        We are required to carry significant amounts of insurance, to occasionally post bid and performance bonds, and to provide substantial amounts of financial assurances to governmental agencies for potential closure and post-closure care of our licensed hazardous waste treatment facilities should those facilities cease operation. Our total estimated closure and post-closure costs requiring financial assurance by regulators as of September 30, 2005, was $284.5 million. We have placed most of the required financial assurance for closure through a qualified insurance company, Steadfast Insurance Company (a unit of Zurich Insurance N.A.). We were required to and have posted letters of credit of approximately $73.5 million with Steadfast Insurance Company in order to obtain the insurance policies. The term of our current insurance policy from Steadfast Insurance Company will expire in September 2006, and our ability to continue conducting our operations could be adversely affected if we should become unable to obtain sufficient insurance, surety bonds and financial assurances at reasonable cost to meet our business and regulatory requirements in the future. The availability of insurance may be influenced by developments within the insurance industry itself, as well as the insurers' or sureties' assessment of their risk of loss with us.

        The environmental services industry in which we participate is subject to significant economic and business risks.

        Our future operating results may be affected by such factors as our ability to: utilize our facilities and workforce profitably in the face of intense price competition; maintain or increase market share in an industry which has experienced significant downsizing and consolidating; realize benefits from cost reduction programs; generate incremental volumes of waste to be handled through our facilities from existing and acquired sales offices and service centers; obtain sufficient volumes of waste at prices which produce revenue sufficient to offset the operating costs of the facilities; minimize downtime and disruptions of operations; and develop the site services business. In particular, economic downturns or recessionary conditions in North America, and increased outsourcing by North American manufacturers

10

to plants located in countries with lower wage costs and less stringent environmental regulations, have adversely affected and may in the future adversely affect the demand for our services. The hazardous and industrial waste management business is also cyclical to the extent that it is dependent upon a stream of waste from cyclical industries such as the chemical and petrochemical, primary metals, paper, furniture and aerospace industries. If those cyclical industries slow significantly, the business that we receive from those industries is likely to slow.

        A significant portion of our business depends upon the demand for major remedial projects and regulatory developments over which we have no control.

        Our operations are significantly affected by the commencement and completion of major site remedial projects; cleanup of major spills or other events; seasonal fluctuations due to weather and budgetary cycles influencing the timing of customers' spending for remedial activities; the timing of regulatory decisions relating to hazardous waste management projects; changes in regulations governing the management of hazardous waste; secular changes in the waste processing industry towards waste minimization and the propensity for delays in the remedial market; and changes in the myriad of governmental regulations governing our diverse operations. We do not control such factors and, as a result, our revenue and income can vary significantly from quarter to quarter, and past financial performance for certain quarters may not be a reliable indicator of future performance for comparable quarters in subsequent years.

        Seasonality makes it harder for us to manage our business and for investors to evaluate our performance.

        Our operations may be affected by seasonal fluctuations due to weather and budgetary cycles influencing the timing of customers' spending for remedial activities. Typically during the first quarter of each calendar year there is less demand for environmental remediation due to weather related reasons, particularly in the northern and midwestern United States and Canada, and increased possibility of unplanned weather related plant shutdowns. This seasonality in our business makes it harder for us to manage our business and for investors to evaluate our performance.

        The extensive environmental regulations to which we are subject may increase our costs and potential liabilities.

        Our operations and those of others in the environmental industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada. While increasing environmental regulation often presents new business opportunities for us, it often results in increased operating and compliance costs. Efforts to conduct our operations in compliance with all applicable laws and regulations, including environmental rules and regulations, require programs to promote compliance, such as training employees and customers, purchasing health and safety equipment, and in some cases hiring outside consultants and lawyers. Even with these programs, we and other companies in the environmental services industry are routinely faced with governmental enforcement proceedings which can result in fines or other sanctions and require expenditures for remedial work on waste management facilities and contaminated sites. Certain of these laws impose strict and, under certain circumstances, joint and several liability for cleanup of releases of regulated materials, and also liability for related natural resource damages.

        From time to time, we have paid fines or penalties in governmental environmental enforcement proceedings, usually involving our waste treatment, storage and disposal facilities. Although none of these fines or penalties that we have paid in the past has had a material adverse effect upon us, we might in the future be required to make substantial expenditures as a result of governmental proceedings, which would have a negative impact on our earnings. Furthermore, regulators have the power to suspend or revoke permits or licenses needed for operation of our plants, equipment, and

11

vehicles based on, among other factors, our compliance record, and customers may decide not to use a particular disposal facility or do business with us because of concerns about our compliance record. Suspension or revocation of permits or licenses would impact our operations and could have a material adverse impact on financial results. Although we have never had any of our facilities' operating permits revoked, suspended or non-renewed involuntarily, it is possible that such an event could occur in the future.

        In the past, practices have resulted in releases at and from certain of our facilities, which may require investigation and, in some cases, remediation. We are currently conducting remedial activities at certain of our sites. While, based on available information, we do not believe these remedial activities will result in a material adverse effect upon our operations or financial condition, these activities or the discovery of previously unknown conditions could result in material costs.

        Future changes in environmental regulations may require us to make significant capital expenditures.

        Changes in environmental regulations can require us to make significant capital expenditures for our facilities. For example, in 2002, the United States Environmental Protection Agency, or EPA, promulgated Interim Standards of the Hazardous Waste Combustor Maximum Achievable Control Technology under the Federal Clean Air Act Amendments. These standards established new emissions limits and operational controls on all new and existing incinerators, cement kilns and light-weight aggregate kilns that burn hazardous waste-derived fuels. We have spent approximately $27.5 million since September 7, 2002 in order to bring our Kimball, Nebraska, Deer Park, Texas and Aragonite, Utah incineration facilities which we acquired as part of the CSD assets into compliance with the HWC MACT regulations. Future environmental regulations could cause us to make significant additional capital expenditures and adversely affect our results of operations and cash flow.

        If our assumptions relating to expansion of our landfills should prove inaccurate, our results of operations and cash flow could be adversely affected.

        When we include the expansion airspace in our calculations of available airspace, we adjust our landfill liabilities to the present value of projected costs for cell closure, and landfill closure and post-closure. It is possible that any of our estimates or assumptions could ultimately turn out to be significantly different from actual results. In some cases we may be unsuccessful in obtaining an expansion permit or we may determine that an expansion permit that we previously thought was probable has become unlikely. To the extent that such estimates, or the assumptions used to make those estimates, prove to be significantly different than actual results, or our belief that we will receive an expansion permit changes adversely in a significant manner, the landfill assets, including the assets incurred in the pursuit of the expansion, may be subject to impairment testing, and lower prospective profitability may result due to increased interest accretion and depreciation or asset impairments related to the removal of previously included expansion airspace. In addition, if our assumptions concerning the expansion airspace should prove inaccurate, certain of our cash expenditures for closure of landfills could be accelerated and adversely affect our results of operations and cash flow.

        Future conditions might require us to make substantial write-downs in our assets, which would adversely affect our balance sheet and results of operations.

        We participate in a highly volatile industry with multiple competitors, several of which have taken large write-offs and asset write-downs, operated under Chapter 11 bankruptcy protection and undergone major restructuring during the past several years. Periodically, we review long-lived assets for impairment. At the end of each of 2004, 2003 and 2002, we determined based on this review that no asset write-downs were required; however, if conditions in the industry were to deteriorate significantly, we could determine that certain of our assets were impaired and we would then be

12

required to write-off all or a portion of our costs for such assets. Any such significant write-offs would adversely affect our balance sheet and results of operations.

Other Risks Relating to Our Company and Common Stock

        Our substantial level of indebtedness and outstanding letters of credit could adversely affect our financial condition and ability to fulfill our obligations.

        As of September 30, 2005, we had $156.4 million of outstanding indebtedness and $91.5 million of outstanding letters of credit. Our substantial level of indebtedness and outstanding letters of credit may:

•

adversely impact our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes;



•

require us to dedicate a substantial portion of our cash flow to the payment of interest on our indebtedness and fees on our letters of credit;



•

subject us to the risk of increased sensitivity to interest rate increases based upon variable interest rates, including our borrowings (if any) under our revolving credit facility;



•

increase the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and



•

limit our ability to adjust to rapidly changing market conditions, reducing our ability to withstand competitive pressures and make us more vulnerable to a downturn in general economic conditions of our business than our competitors with less debt.

        If we are unable to generate sufficient cash flow from operations in the future to service our debt and fee obligations, we may be required to refinance all or a portion of our existing debt and letter of credit facilities, or to obtain additional financing and facilities. However, we may not be able to obtain any such refinancing or additional facilities on favorable terms or at all.

        The covenants in our financing agreements restrict our ability to operate our business and might lead to a default under our outstanding debt agreements.

        The agreements governing our revolving credit and letter of credit facilities and the indenture relating to our outstanding senior secured notes limit, among other things, our ability and the ability of our restricted subsidiaries to:

•

incur or guarantee additional indebtedness (including, for this purpose, reimbursement obligations under letters of credit) or issue preferred stock;



•

pay dividends or make other distributions to our stockholders;



•

purchase or redeem capital stock or subordinated indebtedness;



•

make investments;



•

create liens;



•

incur restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;



•

sell assets, including capital stock of our subsidiaries;



•

consolidate or merge with or into other companies or transfer all or substantially all of our assets; and



•

engage in transactions with affiliates.

13

        As a result of these covenants, we may not be able to respond to changes in business and economic conditions and to obtain additional financing, if needed, and we may be prevented from engaging in transactions that might otherwise be beneficial to us. Our revolving credit and letter of credit facilities require, and our future credit facilities may require, us to maintain specified financial ratios and satisfy certain financial condition tests. Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we may not be able to meet those tests. The breach of any of these covenants could result in a default under our revolving credit and letter of credit facilities. Upon the occurrence of an event of default under our revolving credit and letter of credit facilities or future credit facilities, the lenders could elect to declare all amounts outstanding under such credit facilities, including accrued interest or other obligations, to be immediately due and payable. If amounts outstanding under such credit facilities were to be accelerated, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness, including our senior secured notes.

        The instruments governing certain of our indebtedness, including the indenture governing our senior secured notes and our revolving credit and letter of credit facilities, also contain cross-default provisions. Under these provisions, a default under one instrument governing our indebtedness may constitute a default under our other instruments of indebtedness that contain cross default provisions, which could result in the related indebtedness and the indebtedness issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets and otherwise curtail operations to pay our creditors. The proceeds of such a sale of assets, or curtailment of operations, might not enable us to pay all of our liabilities.

        We have not paid, and do not anticipate paying for the foreseeable future, dividends on our common stock.

        We have not paid, and do not anticipate paying for the foreseeable future, any dividends on our common stock. Furthermore, our current credit agreement prohibits, and our indenture restricts, the payment by us of dividends on our common stock. We intend to retain future earnings, if any, for use in the operation and expansion of our business and payment of our outstanding debt.

        Our founder and other directors and executive officers, as a group, will be able to exercise substantial influence over matters submitted to our shareholders for approval.

        As of the date of this prospectus and after giving effect to the sale of shares by us in this offering, Alan S. McKim, our founder and chief executive officer, together with other directors and executive officers, will beneficially hold approximately 21.1% of our outstanding common stock assuming no exercise by the underwriters of their over-allotment option, or approximately 20.7% assuming full exercise by the underwriters of such option. As a result, our directors and executive officers will likely be able to exercise substantial influence over matters submitted to our shareholders for approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. These shareholders may also delay or prevent a change of control even if such a change of control would benefit our other shareholders. The significant concentration of stock ownership might cause the trading price of our common stock to decline if investors were to perceive that conflicts of interest may exist or arise over any such potential transactions.

14

        Potential future sales of common stock by our directors and executive officers, and our other principal shareholders, may cause our stock price to fall.

        Future sales, or the availability for future sales, of substantial amounts of our common stock could adversely affect the market price of our common stock. As described above, as of the date of this prospectus and after giving effect to the sale of shares by us in this offering, our founder and other directors and executive officers will beneficially hold approximately 21.1% (assuming no exercise by the underwriters of their over-allotment option), or 20.7% (assuming full exercise by the underwriters of such option), of our outstanding common stock. In addition, two other holders which each beneficially now own in excess of 5% of our outstanding common stock collectively own an aggregate of 2,223,575 shares (approximately 11.7% of our common stock which will be outstanding upon completion of this offering assuming no exercise of the underwriters' over-allotment option, or 11.5% assuming a full exercise of such option). A decision by one or more of these shareholders to sell a substantial number of their shares could adversely affect the market price of our common stock. All of the approximately 20,050,986 shares (20,350,986 shares if the underwriters' over-allotment option is exercised in full) of our common stock which will be outstanding or subject to then exercisable warrants, conversion rights or options upon the completion of this offering will be freely tradable without restriction or further registration under the Securities Act, except for the approximately 4,034,545 of such shares beneficially held by our "affiliates" as that term is defined in Rule 144 under the Securities Act. The shares held by our "affiliates" include the shares beneficially held by our founder and other directors and executive officers described above. Shares beneficially owned by our affiliates may not be sold except in compliance with the registration requirements of the Securities Act or pursuant to an exemption from registration, such as Rule 144. Furthermore, the shares of common stock beneficially held by our directors and executive officers are subject to lock-up agreements for a period of 90 days after the date of this prospectus.

        The Massachusetts Business Corporation Act and our By-Laws contain certain anti-takeover provisions.

        Section 8.06 and 7.02 of the Massachusetts Business Corporation Act provide that Massachusetts corporations which are publicly-held must have a staggered board of directors and that written demand by holders of at least 40% of the outstanding shares of each relevant voting group of shareholders is required for shareholders to call a special meeting unless such corporations take certain actions to affirmatively "opt-out" of such requirements. In accordance with these provisions, our By-Laws provide for a staggered Board of Directors which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% which would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for shareholders to call a special meeting. In addition, our By-Laws prohibit the removal by the shareholders of a director except for cause. These provisions could inhibit a takeover of our company by restricting shareholder action to replace the existing directors or approve other actions which a party seeking to acquire us might propose. A takeover transaction would frequently afford shareholders an opportunity to sell their shares at a premium over then market prices.

        As of December 31, 2004, we had a material weakness in our internal control over financial reporting, and we might find other material weaknesses in the future which may adversely affect our ability to provide timely and reliable financial information and satisfy our reporting obligations under federal securities laws.

        As of December 31, 2004, we did not maintain effective controls over the completeness and accuracy of our self-insured workers' compensation and motor vehicle liability reserves. Specifically, we did not then have effective controls over estimating and monitoring self-insured workers' compensation and motor vehicle reserves. This control deficiency resulted in the restatement of our consolidated financial statements for the years ending December 31, 2003 and 2002, the restatement of the quarterly

15

data for the fourth quarter ended December 31, 2003, as well as a fourth quarter audit adjustment in our 2004 financial statements. Additionally, this control deficiency could have resulted in a misstatement of workers' compensation and motor vehicle liability reserves that would have resulted in a material misstatement to annual or interim financial statements that would not be prevented or detected. Our management therefore determined that this control deficiency constituted a "material weakness" in our internal control over financial reporting as of December 31, 2004. Accordingly, the reports in Amendment No. 1 to our annual report on Form 10-K for the year ended December 31, 2004 by both our management and by PricewaterhouseCoopers, LLP, the independent registered public accounting firm which audited our 2004 financial statements, concluded that our internal control over financial reporting was not "effective" as of December 31, 2004.

        In order to remediate the control weakness in our internal control over financial reporting described above, we are now using an actuarial-based method for estimating our reserves for self-insured workers' compensation and motor vehicle liability reserves. Although we believe that utilization of this actuarial-based method satisfactorily remediates our internal controls over estimating and monitoring self-insured workers' compensation and motor vehicle reserves, we might find other material weaknesses in our internal control over financial reporting in future periods. To the extent that any significant or material weaknesses exist in our internal control over financial reporting, such weaknesses may adversely affect our ability to provide timely and reliable financial information necessary for the conduct of our business and satisfaction of our reporting obligations under federal securities laws.

16

IMPORTANT INFORMATION ABOUT THIS PROSPECTUS

        You should rely only on the information contained or incorporated by reference in this prospectus or to which we have referred you. We have not authorized anyone to provide you with information that is different. If anyone provides you with different or additional information, you should not rely on it. The information contained or incorporated by reference in this prospectus may be accurate only as of the date on the front cover of this prospectus or the date of the document incorporated by reference. We are not making an offer to sell the shares offered by this prospectus in any jurisdiction where the offer or sale is not permitted.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus and the documents incorporated herein by reference to our filings under the Securities Exchange Act of 1934 include "forward-looking statements," as defined by federal securities laws, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could" and similar expressions or phrases identify forward-looking statements.

        All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in the environmental services industry. Others are more specific to our operations. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

        Factors that may cause actual results to differ from expected results include, among others:

•

our significant indebtednesses and ability to incur substantially more debt;



•

our future cash flow and earnings;



•

our ability to meet our debt obligations;



•

our ability to increase our market share;



•

our ability to retain our significant customers;



•

our ability to manage the significant environmental liabilities which we assumed in connection with the CSD acquisition which became effective in September 2002;



•

our ability to manage business growth and diversification and the effectiveness of our information systems;



•

our ability to compete with competitors in our industry;



•

the outcome of current and potential legal proceedings;



•

the availability and costs of liability insurance and financial assurances required by governmental entities relating to our facilities;



•

our ability to attract and retain qualified management personnel;



•

the effects of general industry and economic conditions;



•

our ability to identify suitable acquisition candidates or joint venture relationships for expansion, to consummate these transactions on favorable terms and to achieve satisfactory operating results from the acquired businesses; and



•

our ability to avoid unforeseen material liabilities as a result of acquiring new companies.

17

        All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

        See the section of this prospectus entitled "Risk Factors" for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this prospectus are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements and other unknown or unpredictable factors also could harm our results. Consequently, actual results or developments anticipated by us may not be realized and, even if substantially realized, they may not have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

INDUSTRY AND MARKET DATA

        We obtained the market and certain other data used in this prospectus from our own research, surveys or studies conducted by third parties and industry or general publications, such as EI Digest, and other publicly available sources. Industry and general publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we have not independently verified the market data and related information contained in this prospectus, we believe such data and information is accurate as of the date of this prospectus or the respective earlier dates specified in this prospectus.

18

PRICE RANGE OF COMMON STOCK

        Our common stock trades on the NASDAQ National Market under the symbol "CLHB." The following table sets forth the high and low sales prices of our common stock for the indicated periods as reported by NASDAQ.

        On December 7, 2005, the last reported sale price on the Nasdaq National Market was $28.30 per share.

        On September 30, 2005, there were 521 shareholders of record of our common stock, excluding stockholders whose shares were held in nominee name. We estimate that approximately 2,900 additional shareholders held shares in street name at that date.

DIVIDEND POLICY

        We have never declared nor paid any cash dividends on our common stock, and we do not intend to pay any dividends on our common stock in the foreseeable future. We currently intend to retain our future earnings, if any, for use in the operation and expansion of our business and payment of our outstanding debt. In addition, our current credit agreement prohibits, and our indenture restricts, us from paying cash dividends on our common stock. To the extent permitted by our debt agreements then in effect, our board of directors will determine our future payment of dividends, if any, on our common stock.

USE OF PROCEEDS

        We estimate that the net proceeds to us from this offering, after deduction of underwriting discounts and expenses, will be approximately $52.4 million. We intend to use these net proceeds, together with approximately $8.9 million of the net proceeds we received in October 2005 from exercise of our previously outstanding common stock purchase warrants, to redeem $52.5 million principal amount of our outstanding 11¹/4% senior secured notes due 2012 and pay prepayment penalties and accrued interest of approximately $8.8 million in connection with such redemption.

19

CAPITALIZATION

        The following table sets forth our consolidated cash and cash equivalents, long-term debt (including current portion), and stockholders' equity as of September 30, 2005 on an actual basis, and pro forma to reflect (i) the sale of 2,000,000 shares of our common stock in this offering at the public offering price of $28.00 per share, (ii) our receipt of the net proceeds from such offering after deducting the underwriting discount and estimated offering expenses, (iii) the redemption of $52.5 million principal amount of our outstanding 11¹/4% senior secured notes due 2012 and payment of prepayment penalties and accrued interest through the anticipated redemption date of approximately $8.8 million in connection with such redemption, (iv) our write-off of the $0.6 million of unamortized discount relating to the redeemed senior secured notes, and (v) our write-off of the $1.9 million of deferred financing fees associated with the redeemed senior secured notes. The table does not reflect our issuance during October 2005 of an aggregate of 1,559,250 shares of common stock upon exercise of previously outstanding common stock purchase warrants for an aggregate exercise price of $12.5 million, or our write-off of $2.4 million of deferred financing fees and incurrence of $1.7 million of new financing fees associated with the amendment and restatement of our revolving credit and synthetic letter of credit facilities effective December 1, 2005, as described under "Description of Certain Indebtedness" elsewhere in this prospectus. This table should be read in conjunction with "Use of Proceeds," "Unaudited Pro Forma Financial Data," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and notes thereto elsewhere in this prospectus.

(1)

Our revolving credit facility, as amended effective December 1, 2005, allows us to borrow or obtain letters of credit for an aggregate of up to $70.0 million. As of September 30, 2005, we had no borrowings and $2.8 million of letters of credit outstanding under our revolving credit facility, and approximately $27.2 million available to borrow. As of December 1, 2005, we continued to have no borrowings under our revolving credit facility, but the amount of letters of credit outstanding under our revolving credit facility increased to $39.8 million, and we therefore then had $30.2 million available to borrow. The increase in the letters of credit outstanding under our revolving facility resulted primarily from the issuance of new letters of credit under that facility on December 1, 2005 in exchange for letters of credit previously outstanding under our synthetic letter of credit facility in order to reduce the total amount of letters of credit outstanding under the synthetic letter of credit facility to $50.0 million.

(2)

Long-term debt excludes $91.5 million of letters of credit outstanding on September 30, 2005.

20

UNAUDITED PRO FORMA FINANCIAL DATA

Unaudited Pro Forma Income Statement
For the Year Ended December 31, 2004

        The following unaudited pro forma income statement for the year ended December 31, 2004 reflects (i) the sale of 2,000,000 shares of our common stock in this offering at the public offering price of $28.00 per share, and (ii) our proposed redemption of $52.5 million principal amount of our outstanding 11¹/4% senior secured notes due 2012, utilizing such net proceeds and approximately $8.9 million from the exercise in October 2005 of our previously outstanding warrants. Pro forma adjustments to interest expense and income taxes have been made as if the redemption occurred on January 1, 2004. The statement does not reflect our anticipated payment of prepayment penalties and accrued interest of approximately $8.8 million in connection with such redemption and the related write-off of $0.6 million of unamortized discount and $1.9 million of deferred financing fees both relating to the $52.5 million principal amount of notes redeemed, or write-off of $2.4 million of deferred financing fees and our incurrence of $1.7 million of new financing fees associated with the amendment and restatement of our revolving credit and synthetic letter of credit facilities effective December 1, 2005, as described under "Description of Certain Indebtedness" elsewhere in this prospectus. This statement should be read in conjunction with "Use of Proceeds," "Capitalization," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and notes thereto elsewhere in this prospectus.

(1)

The pro forma adjustment of interest expense consists of the elimination of $6.2 million of interest expense related to the $52.5 million reduction in 11¹/4% senior secured notes outstanding.

(2)

The pro forma adjustment of provision for income taxes consists of an increase in U.S. federal income taxes of $0.2 million associated with alternative minimum taxes. The increase in the pro forma adjustment for provision for income taxes is less than the statutory income tax rates because of the existence of net operating loss carryforwards for which a full valuation allowance had been provided.

(3)

Does not include 1,559,250 shares which we issued in October 2005 upon the exercise of previously outstanding common stock purchase warrants.

21

Unaudited Pro Forma Income Statement
For the Nine Months Ended September 30, 2005

        The following unaudited pro forma income statement for the nine months ended September 30, 2005 reflects (i) the sale of 2,000,000 shares of our common stock in this offering at the public offering price of $28.00 per share, and (ii) our proposed redemption of $52.5 million principal amount of our outstanding 11¹/4% senior secured notes due 2012, utilizing such net proceeds and $8.9 million from the exercise in October 2005 of previously outstanding warrants. Pro forma adjustments to interest expense and income taxes have been made as if the redemption occurred on January 1, 2005. The statement does not reflect our anticipated payment of prepayment penalties and accrued interest of approximately $8.8 million in connection with such redemption and the related write-off of $0.6 million of unamortized discount and $1.9 million of deferred financing fees both relating to the $52.5 million of principal amount of notes redeemed, or our write-off of $2.4 million of deferred financing fees and incurrence of $1.7 million of new financing fees associated with the amendment and restatement of our revolving credit and synthetic letter of credit facilities effective December 1, 2005, as described under "Description of Certain Indebtedness" elsewhere in this prospectus. This statement should be read in conjunction with "Use of Proceeds," "Capitalization," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and notes thereto elsewhere in this prospectus.

(1)

The pro forma adjustment of interest expense consists of the elimination of $4.7 million of interest expense related to the $52.5 million reduction in 11¹/4% senior secured notes outstanding.

(2)

The pro forma adjustment of provision for income taxes consists of an increase in U.S. federal income taxes of $0.1 million associated with alternative minimum taxes. The increase in the pro forma adjustment for provision for income taxes is less than the statutory income tax rates because of the existence of net operating loss carryforwards for which a full valuation allowance had been provided.

(3)

Does not include 1,559,250 shares which we issued in October 2005 upon the exercise of previously outstanding common stock warrants.

22

Unaudited Pro Forma Balance Sheet
As of September 30, 2005

        The following unaudited pro forma balance sheet as of September 30, 2005 reflects (i) the sale of 2,000,000 shares of our common stock in this offering at the public offering price of $28.00 per share, after deducting underwriting discount and offering expenses, (ii) our proposed redemption, utilizing such net proceeds and approximately $8.9 million from the exercise in October 2005 of our previously outstanding warrants, of $52.5 million principal amount of our outstanding 11¹/4% senior secured notes due 2012. Pro forma adjustments to the cash and cash equivalents, deferred financing fees, other accrued expenses, income taxes payable, long-term obligations, common stock, additional paid-in capital and retained deficit have been made as if the redemption of notes had occurred on September 30, 2005. The balance sheet does not reflect either (i) our issuance during October 2005 of an aggregate of 1,559,250 shares of common stock upon exercise of previously outstanding warrants for an aggregate of $12,474,000, or (ii) our write-off of $2.4 million of deferred financing fees and our incurrence of $1.7 million of new financing fees associated with the amendment and restatement of our revolving credit and synthetic letter of credit facilities effective December 1, 2005, as described under "Description of Certain Indebtedness" elsewhere in this prospectus. This balance sheet should be read in conjunction with "Use of Proceeds," "Capitalization," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and notes thereto elsewhere in this prospectus.