US ECOLOGY, INC. (Form: 10-Q, Received: 07/31/2017 15:36:41)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐ TRANSITION REPORT PURSUANT TO Section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 0000-11688

US ECOLOGY, INC.

(Exact name of registrant as specified in its charter)


Delaware		95-3889638
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)

251 E. Front St., Suite 400
Boise, Idaho		83702
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (208) 331-8400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐

(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

At July 26, 2017, there were 21,828,819 shares of the registrant’s Common Stock outstanding.

Table of Contents

US ECOLOGY, INC.

FORM 10-Q

TABLE OF CONTENTS


Item		Page

	PART I — FINANCIAL INFORMATION

1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	3

	Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016	4

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016	5

	Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016	6

	Notes to Consolidated Financial Statements	7

	Report of Independent Registered Public Accounting Firm	22

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
3.	Quantitative and Qualitative Disclosures About Market Risk	37
4.	Controls and Procedures	38

	PART II — OTHER INFORMATION

	Cautionary Statement	39
1.	Legal Proceedings	39
1A.	Risk Factors	40
2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
3.	Defaults Upon Senior Securities	40
4.	Mine Safety Disclosures	40
5.	Other Information	40
6.	Exhibits	41
	SIGNATURE	42

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value amount)


	June 30, 2017		December 31, 2016
Assets
Current Assets:
Cash and cash equivalents	$	4,902	$	7,015
Receivables, net		110,394		96,819
Prepaid expenses and other current assets		8,761		7,458
Income taxes receivable		2,070		4,076
Total current assets		126,127		115,368

Property and equipment, net		230,117		226,237
Restricted cash and investments		5,805		5,787
Intangible assets, net		229,967		234,356
Goodwill		194,224		193,621
Other assets		3,206		1,031
Total assets	$	789,446	$	776,400

Liabilities And Stockholders’ Equity

Current Liabilities:
Accounts payable	$	13,513	$	13,948
Deferred revenue		12,712		7,820
Accrued liabilities		27,047		22,605
Accrued salaries and benefits		10,336		10,720
Income taxes payable		52		165
Current portion of closure and post-closure obligations		2,237		2,256
Short-term borrowings		—		2,177
Current portion of long-term debt		—		2,903
Total current liabilities		65,897		62,594

Long-term closure and post-closure obligations		74,374		72,826
Long-term debt		277,000		274,459
Other long-term liabilities		4,607		5,164
Deferred income taxes		80,419		81,333
Total liabilities		502,297		496,376

Commitments and contingencies

Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 21,827 and 21,780 shares issued, respectively		218		218
Additional paid-in capital		175,088		172,704
Retained earnings		124,263		121,879
Treasury stock, at cost, 2 and 7 shares, respectively		(25)		(52)
Accumulated other comprehensive loss		(12,395)		(14,725)
Total stockholders’ equity		287,149		280,024
Total liabilities and stockholders’ equity	$	789,446	$	776,400

The accompanying notes are an integral part of these financial statements.

Table of Contents

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenue	$	126,057	$	122,351	$	236,291	$	235,669
Direct operating costs		90,161		85,445		168,522		163,555
Gross profit		35,896		36,906		67,769		72,114
Selling, general and administrative expenses		20,000		19,819		39,714		39,244
Operating income		15,896		17,087		28,055		32,870
Other income (expense):
Interest income		21		33		31		82
Interest expense		(8,474)		(4,303)		(12,604)		(8,862)
Foreign currency gain (loss)		158		(343)		246		416
Other		166		2,330		303		2,499
Total other expense		(8,129)		(2,283)		(12,024)		(5,865)

Income before income taxes		7,767		14,804		16,031		27,005
Income tax expense		2,718		5,866		5,797		10,550
Net income	$	5,049	$	8,938	$	10,234	$	16,455

Earnings per share:
Basic	$	0.23	$	0.41	$	0.47	$	0.76
Diluted	$	0.23	$	0.41	$	0.47	$	0.76

Shares used in earnings per share calculation:
Basic		21,751		21,700		21,738		21,692
Diluted		21,890		21,790		21,874		21,768
Dividends paid per share	$	0.18	$	0.18	$	0.36	$	0.36

The accompanying notes are an integral part of these financial statements.

Table of Contents

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net income	$	5,049	$	8,938	$	10,234	$	16,455
Other comprehensive income (loss):
Foreign currency translation gain		1,552		36		1,991		3,289
Net changes in interest rate hedge, net of taxes of $(105), ($297), $182, and ($1,316), respectively		(195)		(551)		339		(2,445)
Comprehensive income, net of tax	$	6,406	$	8,423	$	12,564	$	17,299

The accompanying notes are an integral part of these financial statements.

Table of Contents

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2017		2016
Cash flows from operating activities:
Net income	$	10,234	$	16,455
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		13,621		12,106
Amortization of intangible assets		5,286		5,256
Accretion of closure and post-closure obligations		2,155		2,049
Gain on disposition of business		—		(2,208)
Unrealized foreign currency gain		(425)		(685)
Deferred income taxes		(1,379)		(1,340)
Share-based compensation expense		1,959		1,578
Net loss on disposition of assets		245		22
Amortization and write-off of debt issuance costs		5,604		1,065
Amortization and write-off of debt discount		667		74
Changes in assets and liabilities:
Receivables		(14,486)		6,613
Income taxes receivable		2,020		(1,439)
Other assets		(4,038)		1,272
Accounts payable and accrued liabilities		5,819		(872)
Deferred revenue		4,770		(1,220)
Accrued salaries and benefits		(429)		787
Income taxes payable		(115)		49
Closure and post-closure obligations		(686)		(848)
Net cash provided by operating activities		30,822		38,714

Cash flows from investing activities:
Purchases of property and equipment		(17,552)		(14,488)
Business acquisitions (net of cash acquired)		—		(4,934)
Purchases of restricted cash and investments		(820)		(1,043)
Proceeds from divestitures (net of cash divested)		—		2,723
Proceeds from sale of restricted cash and investments		802		973
Proceeds from sale of property and equipment		86		96
Net cash used in investing activities		(17,484)		(16,673)

Cash flows from financing activities:
Payments on long-term debt		(287,040)		(11,502)
Proceeds from long-term debt		281,000		—
Payments on short-term borrowings		(13,438)		(22,166)
Proceeds from short-term borrowings		11,260		26,132
Dividends paid		(7,849)		(7,835)
Proceeds from exercise of stock options		609		124
Payment of equipment financing obligations		(176)		—
Other		(77)		(162)
Net cash used in financing activities		(15,711)		(15,409)

Effect of foreign exchange rate changes on cash		260		168
Increase (decrease) in cash and cash equivalents		(2,113)		6,800
Cash and cash equivalents at beginning of year		7,015		5,989
Cash and cash equivalents at end of year	$	4,902	$	12,789

Supplemental Disclosures
Income taxes paid, net of receipts	$	5,804	$	13,203
Interest paid	$	6,431	$	7,438
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	1,991	$	2,403
Restricted stock issued from treasury shares	$	113	$	415

The accompanying notes are an integral part of these financial statements.

Table of Contents

US ECOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. GENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All inter-company balances have been eliminated. Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2017.

The Company’s consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited consolidated balance sheet as of that date.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future.

Recently Issued Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) . This ASU removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the ASU, “an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.” The guidance is effective prospectively for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company early adopted ASU 2017-04 on January 1, 2017 and the standard is not expected to have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18 , Restricted Cash (Topic 230) . This ASU amends the guidance in Accounting Standards Codification (“ASC”) 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. ASU 2016-18 is based on the EITF’s consensuses reached on Issue 16-A. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied

Table of Contents

retrospectively to all periods presented. Early adoption is permitted. We are currently assessing the impact the adoption of ASU 2016-18 may have on our consolidated cash flows.

In August 2016, the FASB issued ASU No. 2016-15, Statements of Cash Flows (Topic 230) . This ASU amends the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. We are currently assessing the impact the adoption of ASU 2016-15 may have on our consolidated cash flows.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) . This ASU requires excess tax benefits and tax deficiencies, which arise due to differences between the measure of compensation expense and the amount deductible for tax purposes, to be recorded directly through earnings as a component of income tax expense. Previously, these differences were generally recorded in additional paid-in capital and thus had no impact on net income. The change in treatment of excess tax benefits and tax deficiencies also impacts the computation of diluted earnings per share, and the cash flows associated with those items are classified as operating activities on the consolidated statements of cash flows. Additionally, ASU 2016-09 permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as allowed under previous standards, or recognized when they occur. The amendments in this ASU became effective in the first quarter of 2017. The Company adopted this ASU on January 1, 2017 and the standard did not have a material impact on its consolidated financial statements. Adoption of the ASU did not result in any cumulative effect adjustments to retained earnings or other components of stockholders’ equity as of the date of adoption, as well as there were no retrospective adjustments to our consolidated cash flows.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The ASU significantly changes the accounting model used by lessees to account for leases, requiring that all material leases be presented on the balance sheet. Lessees will recognize substantially all leases on the balance sheet as a right-of-use asset and a corresponding lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. The guidance is effective for annual and interim periods beginning after December 15, 2018. The guidance must be applied using the modified retrospective approach. Early adoption is permitted. We are currently assessing the impact the adoption of ASU 2016-02 may have on our consolidated financial position, results of operations and cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance for revenue recognition. The ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance permits the use of either the retrospective or cumulative effect transition method. The ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued ASU 2015-14: Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date established in ASU 2014-09. The amendments in ASU 2014-09 are now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company currently anticipates adopting this ASU using the modified retrospective method.

To assess the impact of ASU 2014-09, we have read the amended guidance, attended trainings and have consulted with external accounting professionals on a regular basis to assist with the understanding and interpretation of the ASU to our revenue recognition. The Company has completed our preliminary review of customer contracts in each of its operating segments for all significant service lines. Based upon the preliminary review of customer contracts, the Company believes that the majority of our standard contracts are not impacted by ASU 2014-09 revenue recognition criteria. We are in the process of performing additional analysis over non-standard contracts that may be impacted by the adoption of ASU 2014-09, to understand whether our revenue recognition is impacted. We are also performing additional analysis on revenue recognized from our managed services line of business, as the contractual provisions within this revenue stream can vary in comparison to our more standard contracts. Under ASU 2014-09, the principal vs. agent considerations differ from the current guidance and are more focused on the control aspect of the relationship. We are currently assessing the level of

Table of Contents

impact this guidance may have on our various revenue streams, to determine the appropriate classification under ASU 2014-09. Further, we are in the process of identifying and implementing appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard.

While the Company continues to assess all potential impacts of adopting ASU 2014-09, based upon information available to date, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on either the timing or recognition of revenues, however, the full extent of the impact is subject to the completion of our assessment.

NOTE 2. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss) (“AOCI”) consisted of the following:


	Foreign		Unrealized Loss
	Currency		on Interest Rate
	Translation		Hedge		Total
Balance at December 31, 2016	$	(12,649)	$	(2,076)	$	(14,725)
Other comprehensive income (loss) before reclassifications, net of tax		1,991		(534)		1,457
Amounts reclassified out of AOCI, net of tax (1)		—		873		873
Other comprehensive income, net		1,991		339		2,330
Balance at June 30, 2017	$	(10,658)	$	(1,737)	$	(12,395)

(1)

Before-tax reclassifications of $603,000 ($392,000 after-tax) and $1.3 million ( $873,000 after-tax) for the three and six months ended June 30, 2017, respectively, and before-tax reclassifications of $808,000 ($525,000 after-tax) and $1.6 million ($1.1 million after-tax) for the three and six months ended June 30, 2016, were included in Interest expense in the Company’s consolidated statements of operations. Amounts relate to the Company’s interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made. Amounts in AOCI expected to be recognized in interest expense over the next 12 months total approximately $2.4 million ($1.6 million after-tax).

NOTE 3. CONCENTRATIONS AND CREDIT RISK

Major Customers

No customer accounted for more than 10% of total revenue for the three or six months ended June 30, 2017 or the three or six months ended June 30, 2016. No customer accounted for more than 10% of total trade receivables as of June 30, 2017 or December 31, 2016.

Credit Risk Concentration

We maintain most of our cash and cash equivalents with nationally recognized financial institutions. Substantially all balances are uninsured and are not used as collateral for other obligations. Concentrations of credit risk on accounts receivable are believed to be limited due to the number, diversification and character of the obligors and our credit evaluation process.

Table of Contents

NOTE 4. RECEIVABLES

Receivables consisted of the following:


	June 30,		December 31,
$s in thousands	2017		2016
Trade	$	94,358	$	84,487
Unbilled revenue		14,728		13,835
Other		3,694		831
Total receivables		112,780		99,153
Allowance for doubtful accounts		(2,386)		(2,334)
Receivables, net	$	110,394	$	96,819

NOTE 5. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash and investments, accounts payable, accrued liabilities, debt and interest rate swap agreements. The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to the short-term nature of these instruments.

The Company estimates the fair value of its variable-rate debt using Level 2 inputs, such as interest rates, related terms and maturities of similar obligations. At June 30, 2017, the fair value of the Company’s variable-rate debt was estimated to be $277.0 million.

The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following:


	June 30, 2017
	Quoted Prices in		Other Observable		Unobservable
	Active Markets		Inputs		Inputs
$s in thousands	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed-income securities (1)	$	1,006	$	3,068	$	—	$	4,074
Money market funds (2)		1,731		—		—		1,731
Total	$	2,737	$	3,068	$	—	$	5,805

Liabilities:
Interest rate swap agreement (3)	$	—	$	2,677	$	—	$	2,677
Total	$	—	$	2,677	$	—	$	2,677

Table of Contents


	December 31, 2016
	Quoted Prices in		Other Observable		Unobservable
	Active Markets		Inputs		Inputs
$s in thousands	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed-income securities (1)	$	607	$	3,473	$	—	$	4,080
Money market funds (2)		1,707		—		—		1,707
Total	$	2,314	$	3,473	$	—	$	5,787

Liabilities:
Interest rate swap agreement (3)	$	—	$	3,198	$	—	$	3,198
Total	$	—	$	3,198	$	—	$	3,198

(1)

We invest a portion of our Restricted cash and investments in fixed-income securities, including U.S. Treasury and U.S. agency securities. We measure the fair value of U.S. Treasury securities using quoted prices for identical assets in active markets. We measure the fair value of U.S. agency securities using observable market activity for similar assets. The fair value of our fixed-income securities approximates our cost basis in the investments.

(2)

We invest a portion of our Restricted cash and investments in money market funds. We measure the fair value of these money market fund investments using quoted prices for identical assets in active markets.

(3)

In order to manage interest rate exposure, we entered into an interest rate swap agreement in October 2014 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a cash flow hedge, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of December 31, 2014 with an initial notional amount of $250.0 million. The interest rate swap continued to be effective following the termination of the Company’s senior secured credit agreement, dated June 17, 2014. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of the interest rate swap agreement quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other long-term liabilities in the Company’s consolidated balance sheet as of June 30, 2017 and December 31, 2016.

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


	June 30,		December 31,
$s in thousands	2017		2016
Cell development costs	$	130,458	$	128,821
Land and improvements		34,557		34,285
Buildings and improvements		81,347		78,081
Railcars		17,299		17,299
Vehicles and other equipment		114,215		110,267
Construction in progress		33,096		24,392
Total property and equipment		410,972		393,145
Accumulated depreciation and amortization		(180,855)		(166,908)
Property and equipment, net	$	230,117	$	226,237

Depreciation and amortization expense for the three months ended June 30, 2017 and 2016 was $7.0 million and $6.2 million, respectively. Depreciation and amortization expense for the six months ended June 30, 2017 and 2016 was $13.6 million and $12.1 million, respectively.

Table of Contents

NOTE 7. GOODWILL AND INTANGIBLE ASSETS

Changes in goodwill for the six months ended June 30, 2017 consisted of the following:


			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Balance at December 31, 2016	$	149,490	$	44,131	$	193,621
Foreign currency translation		603		—		603
Balance at June 30, 2017	$	150,093	$	44,131	$	194,224

Intangible assets, net consisted of the following:


	June 30, 2017						December 31, 2016
			Accumulated						Accumulated
$s in thousands	Cost		Amortization		Net		Cost		Amortization		Net
Amortizing intangible assets:
Permits, licenses and lease	$	111,078	$	(10,966)	$	100,112	$	110,341	$	(9,462)	$	100,879
Customer relationships		84,843		(17,340)		67,503		84,711		(14,519)		70,192
Technology - formulae and processes		7,009		(1,464)		5,545		6,770		(1,305)		5,465
Customer backlog		3,652		(1,109)		2,543		3,652		(926)		2,726
Tradename		4,318		(4,318)		—		4,318		(3,650)		668
Developed software		2,917		(1,157)		1,760		2,907		(994)		1,913
Non-compete agreements		747		(747)		—		747		(742)		5
Internet domain and website		540		(86)		454		540		(72)		468
Database		390		(137)		253		387		(118)		269
Total amortizing intangible assets		215,494		(37,324)		178,170		214,373		(31,788)		182,585
Nonamortizing intangible assets:
Permits and licenses		51,666		—		51,666		51,645		—		51,645
Tradename		131		—		131		126		—		126
Total intangible assets	$	267,291	$	(37,324)	$	229,967	$	266,144	$	(31,788)	$	234,356

Amortization expense for the three months ended June 30, 2017 and 2016 was $2.6 million and $2.6 million, respectively. Amortization expense for the six months ended June 30, 2017 and 2016 was $5.3 million and $5.3 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation.

NOTE 8. DEBT

Long-term debt consisted of the following:


	June 30,		December 31,
$s in thousands	2017		2016
Revolving credit facility	$	277,000	$	—
Former term loan		—		283,040
Unamortized discount and debt issuance costs		—		(5,678)
Total debt		277,000		277,362
Current portion of long-term debt		—		(2,903)
Long-term debt	$	277,000	$	274,459

New Credit Agreement

On April 18, 2017, the Company entered into a new senior secured credit agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and

Table of Contents

issuing lender, and Bank of America, N.A., as an issuing lender, that provides for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The New Credit Agreement also contains an accordion feature whereby the Company may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. In connection with the Company’s entry into the New Credit Agreement, the Company terminated its existing credit agreement with Wells Fargo, dated June 17, 2014 (the “Former Credit Agreement”). Immediately prior to the termination of the Former Credit Agreement, there were $278.3 million of term loans and no revolving loans outstanding under the Former Credit Agreement. No early termination penalties were incurred as a result of the termination of the Former Credit Agreement. The Company wrote off certain unamortized deferred financing costs and original issue discount associated with the Former Credit Agreement that were to be amortized to interest expense in future periods through a one-time non-cash charge of $5.5 million to interest expense in the second quarter of 2017.

The Revolving Credit Facility provides up to $500.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes (including acquisitions and capital expenditures). Under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the New Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the New Credit Agreement), as set forth in the table below:

Total Net Leverage Ratio	LIBOR Rate Loans Interest Margin	Base Rate Loans Interest Margin
Equal to or greater than 3.25 to 1.00	2.00%	1.00%
Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00	1.75%	0.75%
Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00	1.50%	0.50%
Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00	1.25%	0.25%
Less than 1.00 to 1.00	1.00%	0.00%

At June 30, 2017, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap, was 3.37%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable.

In October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $200.0 million, or 72%, of the Revolving Credit Facility borrowings as of June 30, 2017. The interest rate swap agreement continued in place following the termination of the Company’s Former Credit Agreement. The critical terms of the interest rate swap and the forecasted transaction (periodic interest payments on the Company’s variable-rate debt) did not change as a result of the refinancing therefore the interest rate swap continues to qualify as a highly-effective cash flow hedge, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings.

The Company is required to pay a commitment fee ranging from 0.175% to 0.35% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be reduced based upon the Company’s total net leverage ratio (as defined in the New Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the New Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At June 30, 2017, there were $277.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (a) April 18, 2022 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (b) the date of termination of the entire revolving credit commitment (as defined in the New Credit Agreement) by us, and (c) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets.

Table of Contents

Sweep Arrangement are subject to the $25.0 million swingline loan sublimit under the Revolving Credit Facility. The Company’s revolving credit loans outstanding under the Revolving Credit Agreement are not subject to repayment through the Sweep Arrangement. As of June 30, 2017, there were no amounts outstanding subject to the Sweep Arrangement.

As of June 30, 2017, the availability under the Revolving Credit Facility was $216.7 million with $6.3 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

The Company may at any time and from time to time prepay revolving credit loans and swingline loans, in whole or in part, without premium or penalty, subject to the obligation to indemnify each of the lenders against any actual loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR rate loan (as defined in the New Credit Agreement) or from fees payable to terminate the deposits from which such funds were obtained) with respect to the early termination of any LIBOR rate loan. The New Credit Agreement provides for mandatory prepayment at any time if the revolving credit outstandings exceed the revolving credit commitment (as such terms are defined in the New Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the New Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness.

Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by the Company and its domestic subsidiaries on April 18, 2017, the Company’s obligations under the New Credit Agreement are (or will be) jointly and severally and fully and unconditionally guaranteed on a senior basis by all of the Company’s existing and certain future domestic subsidiaries and are secured by substantially all of the assets of the Company and the Company’s existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of the Company’s domestic subsidiaries and 65% of the voting equity interests of the Company’s directly owned foreign subsidiaries (and 100% of the non-voting equity interests of the Company’s directly owned foreign subsidiaries).

The New Credit Agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting the ability of the Company to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. Upon the occurrence of an event of default (as defined in the New Credit Agreement), among other things, amounts outstanding under the New Credit Agreement may be accelerated and the commitments may be terminated.

The New Credit Agreement also contains financial maintenance covenants, a maximum consolidated total net leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the New Credit Agreement). Our consolidated total net leverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2017, may not exceed 3.50 to 1.00, subject to certain exceptions. Our consolidated interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2017, may not be less than 3.00 to 1.00.

At June 30, 2017, we were in compliance with all of the financial covenants in the New Credit Agreement.

Former Credit Agreement

On June 17, 2014, the Company entered into a $540.0 million senior secured credit agreement (the “Former Credit Agreement”) with a syndicate of banks comprised of a $415.0 million term loan (the “Former Term Loan”) with a maturity date of June 17, 2021 and a $125.0 million revolving line of credit (the “Former Revolving Credit Facility”) with a maturity date of June 17, 2019.

The Former Term Loan provided an initial commitment amount of $415.0 million and bore interest at a base rate (as defined in the Former Credit Agreement) plus 2.00% or LIBOR plus 3.00%, at the Company’s option.

The Former Revolving Credit Facility provided up to $125.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes. Under the Former Revolving Credit Facility, revolving loans were available based on a base rate (as defined in the Former Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which was determined according to a pricing grid under which the

Table of Contents

interest rate decreased or increased based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Former Credit Agreement). The maximum letter of credit capacity under the Former Revolving Credit Facility was $50.0 million and the Former Credit Agreement provided for a letter of credit fee equal to the applicable margin for LIBOR loans under the Former Revolving Credit Facility. At December 31, 2016, there were $2.2 million of working capital borrowings outstanding on the Former Revolving Credit Facility. These borrowings were due “on demand” and presented as short-term borrowings in the consolidated balance sheets.

NOTE 9. CLOSURE AND POST-CLOSURE OBLIGATIONS

Our accrued closure and post-closure liability represents the expected future costs, including corrective actions, associated with closure and post-closure of our operating and non-operating disposal facilities. We record the fair value of our closure and post-closure obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For our individual landfill cells, the required closure and post-closure obligations under the terms of our permits and our intended operation of the landfill cell are triggered and recorded when the cell is placed into service and waste is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting waste. We perform periodic reviews of both non-operating and operating facilities and revise accruals for estimated closure and post-closure, remediation or other costs as necessary. Recorded liabilities are based on our best estimates of current costs and are updated periodically to include the effects of existing technology, presently enacted laws and regulations, inflation and other economic factors.

Changes to closure and post-closure obligations consisted of the following:


	Three Months Ended		Six Months Ended
$s in thousands	June 30, 2017		June 30, 2017
Closure and post-closure obligations, beginning of period	$	75,899	$	75,082
Accretion expense		1,082		2,155
Payments		(418)		(688)
Foreign currency translation		48		62
Closure and post-closure obligations, end of period		76,611		76,611
Less current portion		(2,237)		(2,237)
Long-term portion	$	74,374	$	74,374

NOTE 10. INCOME TAXES

Our effective tax rate for the three months ended June 30, 2017 was 35.0%, down from 39.6% for the three months ended June 30, 2016. Our effective tax rate for the six months ended June 30, 2017 was 36.2%, down from 39.1% for the six months ended June 30, 2016. The decrease for the three and six months ended June 30, 2017 compared with the three and six months ended June 30, 2016 primarily reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate. The effective tax rate for the three and six months ended June 30, 2017 reflects the impact of discrete events including the recognition of excess tax benefits related to employee stock compensation as a result of the adoption of ASU 2016-09.

We file a consolidated U.S. federal income tax return with the Internal Revenue Service (“IRS”) as well as income tax returns in various states and Canada. US Ecology, Inc. is subject to examination by the IRS for tax years 2013 through 2016. EQ is also subject to examination by the IRS for tax years 2013 and 2014. We may be subject to examinations by the Canada Revenue Agency as well as various state and local taxing jurisdictions for tax years 2012 through 2016. We are currently not aware of any examinations by taxing authorities.

As discussed in Note 1 to the consolidated financial statements, the Company adopted ASU 2016-09 in the first quarter of 2017. The Company recorded all income tax effects of stock-based compensation awards in its provision for income taxes in the consolidated statement of operations on a prospective basis. Adoption of ASU 2016-09 resulted in net excess tax

Table of Contents

benefits in our provision for income taxes of $9,000 and $77,000 for the three and six months ended June 30, 2017. No other provisions of ASU 2016-09 had a material impact on the Company’s consolidated financial statements or disclosures.

NOTE 11. EARNINGS PER SHARE


	Three Months Ended June 30,
	2017				2016
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	5,049	$	5,049	$	8,938	$	8,938
Weighted average basic shares outstanding		21,751		21,751		21,700		21,700

Dilutive effect of stock options and restricted stock				139				90
Weighted average diluted shares outstanding				21,890				21,790

Earnings per share	$	0.23	$	0.23	$	0.41	$	0.41
Anti-dilutive shares excluded from calculation				115				251


	Six Months Ended June 30,
	2017				2016
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	10,234	$	10,234	$	16,455	$	16,455
Weighted average basic shares outstanding		21,738		21,738		21,692		21,692

Dilutive effect of stock options and restricted stock				136				76
Weighted average diluted shares outstanding				21,874				21,768

Earnings per share	$	0.47	$	0.47	$	0.76	$	0.76
Anti-dilutive shares excluded from calculation				113				304

NOTE 12. EQUITY

Stock Repurchase Program

On June 1, 2016, the Company’s Board of Directors authorized the repurchase of $25.0 million of the Company’s outstanding common stock. Repurchases may be made from time to time in the open market or through privately negotiated transactions. The timing of any repurchases will be based upon prevailing market conditions and other factors. The Company did not repurchase any shares of common stock under the repurchase program during the three or six months ended June 30, 2017. The repurchase program will remain in effect until June 2, 2018, unless extended by our Board of Directors.

Omnibus Incentive Plan

On May 27, 2015, our stockholders approved the Omnibus Incentive Plan (“Omnibus Plan”), which was approved by our Board of Directors on April 7, 2015. The Omnibus Plan was developed to provide additional incentives through equity ownership in US Ecology and, as a result, encourage employees and directors to contribute to our success. The Omnibus Plan provides, among other things, the ability for the Company to grant restricted stock, performance stock, options, stock appreciation rights, restricted stock units (“RSUs”), performance stock units (“PSUs”) and other stock-based awards or cash awards to officers, employees, consultants and non-employee directors. Subsequent to the approval of the Omnibus Plan in May 2015, we stopped granting equity awards under our 2008 Stock Option Incentive Plan and our 2006 Restricted Stock Plan (collectively, the “Previous Plans”). The Previous Plans will remain in effect solely for the settlement of awards granted under the Previous Plans. No shares that are reserved but unissued under the Previous Plans or that are outstanding under the Previous Plans and reacquired by the Company for any reason will be available for issuance under the Omnibus

Table of Contents

Plan. The Omnibus Plan expires on April 7, 2025 and authorizes 1,500,000 shares of common stock for grant over the life of the Omnibus Plan. As of June 30, 2017, 1,149,001 shares of common stock remain available for grant under the Omnibus Plan.

PSUs, RSUs and Restricted Stock

On January 2, 2017, the Company granted 11,500 PSUs to certain employees. Each PSU represents the right to receive, on the settlement date, one share of the Company’s common stock. The total number of PSUs each participant is eligible to earn ranges from 0% to 200% of the target number of PSUs granted. The actual number of PSUs that will vest and be settled in shares is determined at the end of a three-year performance period beginning January 1, 2017, based on total stockholder return relative to a set of peer companies. The fair value of the PSUs estimated on the grant date using a Monte Carlo simulation was $62.45 per unit. Compensation expense is recorded over the awards' vesting period.

Assumptions used in the Monte Carlo simulation to calculate the fair value of the PSUs granted in 2017 are as follows:


	2017
Stock price on grant date	$	49.15
Expected term (years)		3.0
Expected volatility		31	%
Risk-free interest rate		1.5	%
Expected dividend yield		1.5	%

A summary of our PSU, restricted stock and RSU activity for the six months ended June 30, 2017 is as follows:


	PSUs			Restricted Stock			RSUs
		Weighted			Weighted			Weighted
		Average			Average			Average
		Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Outstanding as of December 31, 2016	19,463	$	48.62	55,201	$	42.78	19,930	$	39.10
Granted	11,500		62.45	27,788		49.53	34,870		47.93
Vested	—		—	(14,426)		46.80	(6,456)		39.10
Cancelled, expired or forfeited	—		—	(166)		49.97	(1,193)		41.92
Outstanding as of June 30, 2017	30,963	$	53.76	68,397	$	44.66	47,151	$	45.56

Stock Options

A summary of our stock option activity for the six months ended June 30, 2017 is as follows:



		Weighted
		Average
		Exercise
	Shares	Price
Outstanding as of December 31, 2016	446,498	$	36.49
Granted	38,087		49.27
Exercised	(26,185)		30.45
Cancelled, expired or forfeited	(5,656)		41.46
Outstanding as of June 30, 2017	452,744	$	37.86
Exercisable as of June 30, 2017	248,886	$	35.84

Treasury Stock

During the six months ended June 30, 2017, the Company repurchased 1,613 shares of the Company’s common stock in connection with the net share settlement of employee equity awards at an average cost of $48.57 per share. During the six

Table of Contents

months ended June 30, 2017, option holders exercised 26,185 options with a weighted-average exercise price of $30.45 per option, and 3,778 shares were tendered to option holders in connection with options exercised via net share settlement.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory Proceedings

In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by regulators for non-compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters.

We are not currently a party to any material pending legal proceedings and are not aware of any other claims that could, individually or in the aggregate, have a materially adverse effect on our financial position, results of operations or cash flows.

NOTE 14. OPERATING SEGMENTS

Financial Information by Segment

Our operations are managed in two reportable segments reflecting our internal reporting structure and nature of services offered as follows:

Environmental Services - This segment provides a broad range of hazardous material management services including transportation, recycling, treatment and disposal of hazardous and non-hazardous waste at Company-owned landfill, wastewater and other treatment facilities.

Field & Industrial Services - This segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through our 10-day transfer facilities. Services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste. This segment also provides specialty services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response and other services to commercial and industrial facilities and to government entities.

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

Table of Contents

Summarized financial information of our reportable segments is as follows:


	Three Months Ended June 30, 2017
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Treatment & Disposal Revenue	$	71,238	$	2,901	$	—	$	74,139
Services Revenue:
Transportation and Logistics (1)		18,353		4,943		—		23,296
Industrial Cleaning (2)		—		4,705		—		4,705
Technical Services (3)		—		19,802		—		19,802
Remediation (4)		—		3,217		—		3,217
Other (5)		—		898		—		898
Total Revenue	$	89,591	$	36,466	$	—	$	126,057
Depreciation, amortization and accretion	$	9,105	$	1,451	$	128	$	10,684
Capital expenditures	$	7,771	$	1,839	$	723	$	10,333
Total assets	$	608,207	$	124,466	$	56,773	$	789,446


	Three Months Ended June 30, 2016
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Treatment & Disposal Revenue	$	66,908	$	2,897	$	—	$	69,805
Services Revenue:
Transportation and Logistics (1)		15,889		4,955		—		20,844
Industrial Cleaning (2)		—		7,201		—		7,201
Technical Services (3)		—		19,167		—		19,167
Remediation (4)		—		4,653		—		4,653
Other (5)		—		681		—		681
Total Revenue	$	82,797	$	39,554	$	—	$	122,351
Depreciation, amortization and accretion	$	8,371	$	1,377	$	125	$	9,873
Capital expenditures	$	5,575	$	1,021	$	673	$	7,269
Total assets	$	591,511	$	127,836	$	58,905	$	778,252


	Six Months Ended June 30, 2017
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Treatment & Disposal Revenue	$	139,941	$	5,538	$	—	$	145,479
Services Revenue:
Transportation and Logistics (1)		30,953		10,263		—		41,216
Industrial Cleaning (2)		—		8,924		—		8,924
Technical Services (3)		—		35,464		—		35,464
Remediation (4)		—		3,823		—		3,823
Other (5)		—		1,385		—		1,385
Total Revenue	$	170,894	$	65,397	$	—	$	236,291
Depreciation, amortization and accretion	$	17,895	$	2,909	$	258	$	21,062
Capital expenditures	$	13,610	$	2,339	$	1,603	$	17,552
Total assets	$	608,207	$	124,466	$	56,773	$	789,446

Table of Contents


	Six Months Ended June 30, 2016
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Treatment & Disposal Revenue	$	133,633	$	5,649	$	—	$	139,282
Services Revenue:
Transportation and Logistics (1)		30,688		10,343		—		41,031
Industrial Cleaning (2)		—		11,472		—		11,472
Technical Services (3)		—		36,772		—		36,772
Remediation (4)		—		5,490		—		5,490
Other (5)		—		1,622		—		1,622
Total Revenue	$	164,321	$	71,348	$	—	$	235,669
Depreciation, amortization and accretion	$	16,451	$	2,713	$	247	$	19,411
Capital expenditures	$	11,414	$	1,521	$	1,553	$	14,488
Total assets	$	591,511	$	127,836	$	58,905	$	778,252

(1)

Includes such services as collection, transportation and disposal of non-hazardous and hazardous waste.

(2)

Includes such services as industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, and refinery services such as tank cleaning and temporary storage.

(3)

Includes such services as Total Waste Management ("TWM") programs, retail services, laboratory packing, less-than-truck-load (“LTL”) service and Household Hazardous Waste ("HHW") collection.

(4)

Includes such services as site assessment, onsite treatment, project management and remedial action planning and execution.

(5)

Includes such services as emergency response and marine.

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

The primary financial measure used by management to assess segment performance is Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, stock based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss and other income/expense. Adjusted EBITDA is a complement to results provided in accordance with GAAP and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; and

Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

Table of Contents

A reconciliation of Net Income to Adjusted EBITDA is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2017		2016		2017		2016
Net income	$	5,049	$	8,938	$	10,234	$	16,455
Income tax expense		2,718		5,866		5,797		10,550
Interest expense		8,474		4,303		12,604		8,862
Interest income		(21)		(33)		(31)		(82)
Foreign currency (gain) loss		(158)		343		(246)		(416)
Other income		(166)		(2,330)		(303)		(2,499)
Depreciation and amortization of plant and equipment		6,987		6,202		13,621		12,106
Amortization of intangibles		2,615		2,646		5,286		5,256
Stock-based compensation		1,043		783		1,959		1,578
Accretion and non-cash adjustment of closure & post-closure liabilities		1,082		1,025		2,155		2,049
Adjusted EBITDA	$	27,623	$	27,743	$	51,076	$	53,859

Adjusted EBITDA, by operating segment, is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2017		2016		2017		2016
Adjusted EBITDA:
Environmental Services	$	34,642	$	33,551	$	66,498	$	66,604
Field & Industrial Services		4,119		5,123		6,183		8,801
Corporate		(11,138)		(10,931)		(21,605)		(21,546)
Total	$	27,623	$	27,743	$	51,076	$	53,859

Revenue, Property and Equipment and Intangible Assets Outside of the United States

We provide services in the United States and Canada. Revenues by geographic location where the underlying services were performed were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2017		2016		2017		2016
United States	$	110,763	$	111,183	$	206,955	$	214,374
Canada		15,294		11,168		29,336		21,295
Total revenue	$	126,057	$	122,351	$	236,291	$	235,669

Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows:


	June 30,		December 31,
$s in thousands	2017		2016
United States	$	403,448	$	405,767
Canada		56,636		54,826
Total long-lived assets	$	460,084	$	460,593

NOTE 15. SUBSEQUENT EVENTS

Quarterly Dividend

On July 3, 2017, we declared a quarterly dividend of $0.18 per common share to stockholders of record on July 21, 2017. The dividend was paid using cash on hand on July 28, 2017 in an aggregate amount of $3.9 million.

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

US Ecology, Inc.

Boise, Idaho

We have reviewed the accompanying consolidated balance sheet of US Ecology, Inc. and subsidiaries (the "Company") as of June 30, 2017, and the related consolidated statements of operations and comprehensive income for the three-month and six month periods ended June 30, 2017 and 2016, and cash flows for the six-month periods ended June 30, 2017 and 2016. This interim financial information is the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial information taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of US Ecology, Inc. and subsidiaries as of December 31, 2016, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 27, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP

Boise, Idaho

July 31, 2017

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

OVERVIEW

US Ecology, Inc. is a leading North American provider of environmental services to commercial and government entities. The Company addresses the complex waste management needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. US Ecology’s comprehensive knowledge of the waste business, its collection of waste management facilities and focus on safety, environmental compliance, and customer service enables us to effectively meet the needs of our customers and to build long-lasting relationships.

We have fixed facilities and service centers operating in the United States, Canada and Mexico. Our fixed facilities include five Resource Conservation and Recovery Act of 1976, subtitle C, hazardous waste landfills and one low-level radioactive waste landfill located near Beatty, Nevada; Richland, Washington; Robstown, Texas; Grand View, Idaho; Detroit, Michigan and Blainville, Québec, Canada. These facilities generate revenue from fees charged to treat and dispose of waste and from fees charged to perform various field and industrial services for our customers.

Our operations are managed in two reportable segments reflecting our internal management reporting structure and nature of services offered as follows:

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

Table of Contents

composition of Environmental Services segment T&D revenues by waste generator industry for the three and six months ended June 30, 2017 and 2016 were as follows:


	% of Treatment and Disposal Revenue (1) for the
	Three Months Ended June 30,
Generator Industry	2017	2016
Metal Manufacturing	17%	17%
Chemical Manufacturing	15%	13%
Broker / TSDF	12%	15%
General Manufacturing	12%	14%
Refining	10%	10%
Government	6%	6%
Utilities	4%	5%
Transportation	3%	2%
Mining, Exploration and Production	2%	3%
Waste Management & Remediation	2%	2%
Other(2)	17%	13%

(1)

Excludes all transportation service revenue

(2)

Includes retail and wholesale trade, rate regulated, construction and other industries


	% of Treatment and Disposal Revenue (1) for the
	Six Months Ended June 30,
Generator Industry	2017	2016
Metal Manufacturing	16%	17%
Broker / TSDF	14%	15%
Chemical Manufacturing	13%	13%
General Manufacturing	13%	13%
Refining	12%	11%
Government	6%	6%
Utilities	4%	5%
Mining, Exploration and Production	2%	3%
Transportation	2%	3%
Waste Management & Remediation	2%	2%
Other(2)	16%	12%

(1) Excludes all transportation service revenue

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

We also categorize our Environmental Services T&D revenue as either “Base Business” or “Event Business” based on the underlying nature of the revenue source. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business.

A significant portion of our disposal revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For the three months ended June 30, 2017, approximately 23% of our T&D revenue was derived from Event Business projects, up from 20% for the three months ended June 30, 2016. For the three months ended June 30, 2017, Event Business revenue increased 24% compared to the three months ended June 30, 2016. For the six months ended June 30, 2017, approximately 19% of our T&D revenue was derived from Event Business projects, consistent with 19% for the six months ended June 30, 2016. For the six months ended June 30, 2017, Event Business revenue increased 7% compared to the six months ended June 30, 2016. The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversy, litigation, weather, commercial real estate, closed military bases and other project timing, government appropriation and funding cycles and other factors. The types and amounts of waste received from Base Business also vary from quarter to quarter. This variability can cause significant

Table of Contents

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

For the three months ended June 30, 2017, Base Business revenue increased 3% compared to the three months ended June 30, 2016. Base Business revenue was approximately 77% of total T&D revenue for the three months ended June 30, 2017, down from 80% for the three months ended June 30, 2016. For the six months ended June 30, 2017, Base Business revenue increased 3% compared to the six months ended June 30, 2016. Base Business revenue was approximately 81% of total T&D revenue for the six months ended June 30, 2017, consistent with 81% for the six months ended June 30, 2016. Our business is highly competitive and no assurance can be given that we will maintain these revenue levels or increase our market share.

Depending on project-specific customer needs and competitive economics, transportation services may be offered at or near our cost to help secure new business. For waste transported by rail from the eastern United States and other locations distant from our Grand View, Idaho and Robstown, Texas facilities, transportation-related revenue can account for as much as 75% of total project revenue. While bundling transportation and disposal services reduces overall gross profit as a percentage of total revenue (“gross margin”), this value-added service has allowed us to win multiple projects that management believes we could not have otherwise competed for successfully. Our Company-owned fleet of gondola railcars, which is periodically supplemented with railcars obtained under operating leases, has reduced our transportation expenses by largely eliminating reliance on more costly short-term rentals. These Company-owned railcars also help us to win business during times of demand-driven railcar scarcity.

The increased waste volumes resulting from projects won through this bundling service strategy further drive the operating leverage benefits inherent to the disposal business, increasing profitability. While waste treatment and other variable costs are project-specific, the incremental earnings contribution from large and small projects generally increases as overall disposal volumes increase. Based on past experience, management believes that maximizing operating income, net income and earnings per share is a higher priority than maintaining or increasing gross margin. We intend to continue aggressively bidding bundled transportation and disposal services based on this proven strategy.

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

Table of Contents

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2017 COMPARED TO THREE MONTHS ENDED JUNE 30, 2016

Operating results and percentage of revenues were as follows:


	Three Months Ended June 30,								2017 vs. 2016
$s in thousands	2017		%		2016		%		$ Change		% Change
Revenue
Environmental Services	$	89,591	71	%	$	82,797	68	%	$	6,794	8	%
Field & Industrial Services		36,466	29	%		39,554	32	%		(3,088)	(8)	%
Total		126,057	100	%		122,351	100	%		3,706	3	%
Gross Profit
Environmental Services		30,673	34	%		30,595	37	%		78	0	%
Field & Industrial Services		5,223	14	%		6,311	16	%		(1,088)	(17)	%
Total		35,896	28	%		36,906	30	%		(1,010)	(3)	%
Selling, General & Administrative Expenses
Environmental Services		5,260	6	%		5,538	7	%		(278)	(5)	%
Field & Industrial Services		2,628	7	%		2,621	7	%		7	0	%
Corporate		12,112	n/m			11,660	n/m			452	4	%
Total		20,000	16	%		19,819	16	%		181	1	%
Adjusted EBITDA
Environmental Services		34,642	39	%		33,551	41	%		1,091	3	%
Field & Industrial Services		4,119	11	%		5,123	13	%		(1,004)	(20)	%
Corporate		(11,138)	n/m			(10,931)	n/m			(207)	2	%
Total	$	27,623	22	%	$	27,743	23	%	$	(120)	(0)	%

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


	Three Months Ended June 30,				2017 vs. 2016
$s in thousands	2017		2016		$ Change		% Change
Net Income	$	5,049	$	8,938	$	(3,889)	(44)	%
Income tax expense		2,718		5,866		(3,148)	(54)	%
Interest expense		8,474		4,303		4,171	97	%
Interest income		(21)		(33)		12	(36)	%
Foreign currency (gain) loss		(158)		343		(501)	(146)	%
Other income		(166)		(2,330)		2,164	(93)	%
Depreciation and amortization of plant and equipment		6,987		6,202		785	13	%
Amortization of intangibles		2,615		2,646		(31)	(1)	%
Stock‑based compensation		1,043		783		260	33	%
Accretion and non‑cash adjustment of closure and post‑closure liabilities		1,082		1,025		57	6	%
Adjusted EBITDA	$	27,623	$	27,743	$	(120)	(0)	%

Adjusted EBITDA is a complement to results provided in accordance with accounting principles generally accepted in the United States (“GAAP”) and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted

Table of Contents

EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity.

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

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; and

Revenue

Total revenue increased 3% to $126.1 million for the second quarter of 2017 compared with $122.4 million for the second quarter of 2016.

Environmental Services

Environmental Services segment revenue increased 8% to $89.6 million for the second quarter of 2017 compared to $82.8 million for the second quarter of 2016. T&D revenue increased 6% compared to the second quarter of 2016, primarily as a result of a 24% increase in project-based Event Business revenue and a 3% increase in Base Business revenue. Transportation service revenue increased 15% compared to the second quarter of 2016, reflecting more Event Business projects utilizing the Company’s transportation and logistics services. Total tons of waste disposed of or processed across all of our facilities increased 5% for the second quarter of 2017 compared to the second quarter of 2016. Tons of waste disposed of or processed at our landfills increased 19% for the second quarter of 2017 compared to the second quarter of 2016.

T&D revenue from recurring Base Business waste generators increased 3% for the second quarter of 2017 compared to the second quarter of 2016 and comprised 77% of total T&D revenue for the second quarter of 2017. During the second quarter of 2017, increases in Base Business T&D revenue from the refining, metal manufacturing, and “Other” industry groups were partially offset by a decrease in Base Business T&D revenue from the broker/TSDF industry group.

T&D revenue from Event Business waste generators increased 24% for the second quarter of 2017 compared to the second quarter of 2016 and comprised 23% of total T&D revenue for the second quarter of 2017. During the second quarter of 2017, increases in Event Business T&D revenue from the “Other”, chemical manufacturing and government industry groups were partially offset by decreases in Event Business T&D revenue from the refining and general manufacturing industry groups.

Table of Contents

The following table summarizes combined Base Business and Event Business T&D revenue growth, within the Environmental Services segment, by generator industry for the second quarter of 2017 as compared to the second quarter of 2016:


		Treatment and Disposal Revenue Growth
		Three Months Ended June 30, 2017 vs.
		Three Months Ended June 30, 2016
Other		40%
Chemical Manufacturing		26%
Government		17%
Transportation		16%
Waste Management & Remediation		9%
Refining		7%
Metal Manufacturing		6%
Utilities		-8%
General Manufacturing		-10%
Broker / TSDF		-13%
Mining, Exploration & Production		-20%

Field & Industrial Services

Field & Industrial Services segment revenue decreased 8% to $36.5 million for the second quarter of 2017 compared with $39.6 million for the second quarter of 2016. The decrease in Field & Industrial Services segment revenue is primarily attributable to the expiration of a contract that was not renewed or replaced and softer overall market conditions for industrial and remediation services.

Gross Profit

Total gross profit decreased 3% to $35.9 million for the second quarter of 2017, down from $36.9 million for the second quarter of 2016. Total gross margin was 28% for the second quarter of 2017 compared with 30% for the second quarter of 2016.

Environmental Services

Environmental Services segment gross profit increased less than 1% to $30.7 million for the second quarter of 2017, up from $30.6 million for the second quarter of 2016. Total segment gross margin for the second quarter of 2017 was 34% compared with 37% for the second quarter of 2016. T&D gross margin was 38% for the second quarter of 2017 compared with 42% for the second quarter of 2016. The decrease in T&D gross margin primarily reflects the impact of the temporary closure of one of our treatment facilities during the second quarter of 2017 due to severe wind damage.

Field & Industrial Services

Field & Industrial Services segment gross profit decreased 17% to $5.2 million for the second quarter of 2017, down from $6.3 million for the second quarter of 2016. Total segment gross margin was 14% for the second quarter of 2017 compared with 16% for the second quarter of 2016. The decrease in segment gross margin is primarily attributable to lower revenue and a less favorable service mix in the second quarter of 2017 compared to the second quarter of 2016.

Selling, General and Administrative Expenses (“SG&A”)

Total SG&A was $20.0 million, or 16% of total revenue, for the second quarter of 2017 compared with $19.8 million, or 16% of total revenue, for the second quarter of 2016.

Table of Contents

Environmental Services

Environmental Services segment SG&A decreased 5% to $5.3 million, or 6% of segment revenue, for the second quarter of 2017 compared with $5.5 million, or 7% of segment revenue, for the second quarter of 2016, primarily reflecting the recognition of insurance proceeds related to the repair of one of our treatment facilities, which suffered severe wind damage, partially offset by higher employee labor costs, higher professional services expenses and higher rental expenses in the second quarter of 2017 compared to the second quarter of 2016. We expect to recognize additional insurance proceeds in the second half of 2017 upon settlement of our business interruption insurance claim for lost profits during the period our treatment facility was temporarily closed.

Field & Industrial Services

Field & Industrial Services segment SG&A remained consistent at $2.6 million, or 7% of segment revenue, for the second quarter of 2017 compared with $2.6 million, or 7% of segment revenue, for the second quarter of 2016.

Corporate

Corporate SG&A was $12.1 million, or 10% of total revenue, for the second quarter of 2017 compared with $11.7 million, or 10% of total revenue, for the second quarter of 2016, primarily reflecting higher employee labor costs, partially offset by lower business development costs in the second quarter of 2017 compared with the second quarter of 2016.

Components of Adjusted EBITDA

Income tax expense

Our effective income tax rate for the second quarter of 2017 was 35.0% compared with 39.6% for the second quarter of 2016. The decrease primarily reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, in the second quarter of 2017 compared with the second quarter of 2016. The effective tax rate for the three months ended June 30, 2017 also reflects the impact of discrete events including the recognition of excess tax benefits related to employee stock compensation as a result of the adoption of Accounting Standards Update 2016-09.

Interest expense

Interest expense was $8.5 million for the second quarter of 2017 compared with $4.3 million for the second quarter of 2016. The Company wrote off certain unamortized deferred financing costs and original issue discount associated with the Former Credit Agreement that were to be amortized to interest expense in future periods through a one-time non-cash charge of $5.5 million to interest expense in the second quarter of 2017. This increase is partially offset by lower debt levels in the second quarter of 2017 compared to the second quarter of 2016, and a lower effective interest rate under the New Credit Agreement compared to the Former Credit Agreement.

Foreign currency gain (loss)

We recognized a $158,000 non-cash foreign currency gain for the second quarter of 2017 compared with a $343,000 non-cash foreign currency loss for the second quarter of 2016. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the United States dollar (“USD”), our functional currency. Additionally, we established intercompany loans between our Canadian subsidiaries, whose functional currency is the Canadian dollar (“CAD”), and our parent company, US Ecology, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable by our Canadian subsidiaries to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period. At June 30, 2017, we had $18.8 million of intercompany loans subject to currency revaluation.

Table of Contents

Other income

Other income for the second quarter of 2016 includes approximately $2.2 million related to the gain on sale of the Augusta, Georgia facility in April 2016 and final closing adjustments on the divestiture of our Allstate Power Vac, Inc. (“Allstate”) subsidiary to a private investor group recorded in the second quarter of 2016.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense was $7.0 million for the second quarter of 2017 compared with $6.2 million for the second quarter of 2016.

Amortization of intangibles

Intangible assets amortization expense was $2.6 million for the second quarter of 2017 compared with $2.6 million for the second quarter of 2016.

Stock-based compensation

Stock-based compensation expense increased 33% to $1.0 million for the second quarter of 2017 compared with $783,000 for the second quarter of 2016 as a result of an increase in equity-based awards granted to employees.

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

Accretion and non-cash adjustment of closure and post-closure liabilities was $1.1 million for the second quarter of 2017 compared with $1.0 million for the second quarter of 2016.

Table of Contents

SIX MONTHS ENDED JUNE 30, 2017 COMPARED TO SIX MONTHS ENDED JUNE 30, 2016

Operating results and percentage of revenues were as follows:


	Six Months Ended June 30,								2017 vs. 2016
$s in thousands	2017		%		2016		%		$ Change		% Change
Revenue
Environmental Services	$	170,894	72	%	$	164,321	70	%	$	6,573	4	%
Field & Industrial Services		65,397	28	%		71,348	30	%		(5,951)	(8)	%
Total		236,291	100	%		235,669	100	%		622	0	%
Gross Profit
Environmental Services		59,360	35	%		61,050	37	%		(1,690)	(3)	%
Field & Industrial Services		8,409	13	%		11,064	16	%		(2,655)	(24)	%
Total		67,769	29	%		72,114	31	%		(4,345)	(6)	%
Selling, General & Administrative Expenses
Environmental Services		10,991	6	%		11,116	7	%		(125)	(1)	%
Field & Industrial Services		5,269	8	%		5,074	7	%		195	4	%
Corporate		23,454	n/m			23,054	n/m			400	2	%
Total		39,714	17	%		39,244	17	%		470	1	%
Adjusted EBITDA
Environmental Services		66,498	39	%		66,604	41	%		(106)	(0)	%
Field & Industrial Services		6,183	9	%		8,801	12	%		(2,618)	(30)	%
Corporate		(21,605)	n/m			(21,546)	n/m			(59)	0	%
Total	$	51,076	22	%	$	53,859	23	%	$	(2,783)	(5)	%

Adjusted EBITDA

As discussed above, the primary financial measure used by management to assess segment performance is Adjusted EBITDA. The reconciliation of Net Income to Adjusted EBITDA is as follows:


	Six Months Ended June 30,				2017 vs. 2016
$s in thousands	2017		2016		$ Change		% Change
Net Income	$	10,234	$	16,455	$	(6,221)	(38)	%
Income tax expense		5,797		10,550		(4,753)	(45)	%
Interest expense		12,604		8,862		3,742	42	%
Interest income		(31)		(82)		51	(62)	%
Foreign currency gain		(246)		(416)		170	(41)	%
Other income		(303)		(2,499)		2,196	(88)	%
Depreciation and amortization of plant and equipment		13,621		12,106		1,515	13	%
Amortization of intangibles		5,286		5,256		30	1	%
Stock‑based compensation		1,959		1,578		381	24	%
Accretion and non‑cash adjustment of closure and post‑closure liabilities		2,155		2,049		106	5	%
Adjusted EBITDA	$	51,076	$	53,859	$	(2,783)	(5)	%

Revenue

Total revenue increased less than 1% to $236.3 million for the first six months of 2017 compared with $235.7 million for the first six months of 2016.

Environmental Services

Environmental Services segment revenue increased 4% to $170.9 million for the first six months of 2017 compared to $164.3 million for the first six months of 2016. T&D revenue increased 5% compared to the first six months of 2016,

Table of Contents

primarily as a result of a 7% increase in project-based Event Business revenue and a 3% increase in Base Business revenue. Transportation service revenue for the first six months of 2017 was consistent with the first six months of 2016. Total tons of waste disposed of, or processed, across all of our facilities increased 4% for the first six months of 2017 compared to the first six months of 2016. Tons of waste disposed of or processed at our landfills increased 9% for the first six months of 2017 compared to the first six months of 2016.

T&D revenue from recurring Base Business waste generators increased 3% for the first six months of 2017 compared to the first six months of 2016 and comprised 81% of total T&D revenue for the first six months of 2017. During the first six months of 2017, increases in Base Business T&D revenue from the refining, “Other” and metal manufacturing industry groups were partially offset by decreases in Base Business T&D revenue from the broker/TSDF and transportation industry groups.

T&D revenue from Event Business waste generators increased 7% for the first six months of 2017 compared to the first six months of 2016 and comprised 19% of total T&D revenue for the first six months of 2017. During the first six months of 2017, increases in Event Business T&D revenue from the “Other” and chemical manufacturing industry groups were partially offset by decreases in Event Business T&D revenue from the utilities and mining, exploration & production industry groups.

The following table summarizes combined Base Business and Event Business T&D revenue growth, within the Environmental Services segment, by generator industry for the first six months of 2017 as compared to the first six months of 2016:


		Treatment and Disposal Revenue Growth
		Six Months Ended June 30, 2017 vs.
		Six Months Ended June 30, 2016
Other		22%
Refining		15%
Waste Management & Remediation		15%
Chemical Manufacturing		5%
General Manufacturing		5%
Government		4%
Metal Manufacturing		2%
Transportation		-6%
Broker / TSDF		-7%
Mining, Exploration & Production		-15%
Utilities		-19%

Field & Industrial Services

Field & Industrial Services segment revenue decreased 8% to $65.4 million for the first six months of 2017 compared with $71.4 million for the first six months of 2016. The decrease in Field & Industrial Services segment revenue is primarily attributable to the expiration of a contract that was not renewed or replaced and softer overall market conditions for industrial and remediation services.

Gross Profit

Total gross profit decreased 6% to $67.8 million for the first six months of 2017, down from $72.1 million for the first six months of 2016. Total gross margin was 29% for the first six months of 2017 compared with 31% for the first six months of 2016.

Environmental Services

Environmental Services segment gross profit decreased 3% to $59.4 million for the first six months of 2017, down from $61.1 million for the first six months of 2016. Total segment gross margin for the first six months of 2017 was 35% compared with 37% for the first six months of 2016. T&D gross margin was 38% for the first six months of 2017 compared

Table of Contents

with 41% for the first six months of 2016. The decrease in T&D gross margin primarily reflects the impact of the temporarily closure of one of our treatment facilities due to severe wind damage as well as a less favorable service mix in the first six months of 2017 compared to the first six months of 2016.

Field & Industrial Services

Field & Industrial Services segment gross profit decreased 24% to $8.4 million for the first six months of 2017, down from $11.1 million for the first six months of 2016. Total segment gross margin was 13% for the first six months of 2017 compared with 16% for the first six months of 2016. The decrease in segment gross margin is primarily attributable to lower revenue and a less favorable service mix in the first six months of 2017 compared to the first six months of 2016.

Selling, General and Administrative Expenses (“SG&A”)

Total SG&A was $39.7 million, or 17% of total revenue, for the first six months of 2017 compared with $39.2 million, or 17% of total revenue, for the first six months of 2016.

Environmental Services

Environmental Services segment SG&A decreased 1% to $11.0 million, or 6% of segment revenue, for the first six months of 2017 compared with $11.1 million, or 7% of segment revenue, for the first six months of 2016, primarily reflecting the recognition of insurance proceeds related to the repair of one of our large treatment facilities, which suffered severe wind damage, partially offset by higher employee labor costs, higher professional services expenses, higher rental expenses and higher insurance costs in the first six months of 2017 compared to the first six months of 2016.

Field & Industrial Services

Field & Industrial Services segment SG&A increased 4% to $5.3 million, or 8% of segment revenue, for the first six months of 2017 compared with $5.1 million, or 7% of segment revenue, for the first six months of 2016. The increase in segment SG&A primarily reflects higher worker’s compensation costs and higher equipment and supplies expenses in the first six months of 2017 compared with the first six months of 2016.

Corporate

Corporate SG&A was $23.5 million, or 10% of total revenue, for the first six months of 2017 compared with $23.1 million, or 10% of total revenue, for the first six months of 2016, primarily reflecting higher employee labor costs, partially offset by lower business development costs in the first six months of 2017 compared with the first six months of 2016.

Components of Adjusted EBITDA

Income tax expense

Our effective income tax rate for the first six months of 2017 was 36.2% compared with 39.1% for the first six months of 2016. The decrease primarily reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, in the first six months of 2017 compared with the first six months of 2016. The effective tax rate for the six months ended June 30, 2017 also reflects the impact of discrete events including the recognition of excess tax benefits related to employee stock compensation as a result of the adoption of Accounting Standards Update 2016-09.

Interest expense

Interest expense was $12.6 million for the first six months of 2017 compared with $8.9 million for the first six months of 2016. The Company wrote off certain unamortized deferred financing costs and original issue discount associated with the Former Credit Agreement that were to be amortized to interest expense in future periods through a one-time non-cash charge of $5.5 million to interest expense in the second quarter of 2017. This increase is partially offset by lower debt

Table of Contents

levels in the first six months of 2017 compared to the first six months of 2016, and a lower effective interest rate under the New Credit Agreement compared to the Former Credit Agreement.

Foreign currency gain (loss)

We recognized a $246,000 non-cash foreign currency gain for the first six months of 2017 compared with a $416,000 non-cash foreign currency gain for the first six months of 2016. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the USD, our functional currency. Additionally, we established intercompany loans between our Canadian subsidiaries, whose functional currency is the CAD, and our parent company, US Ecology, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable by our Canadian subsidiaries to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period. At June 30, 2017, we had $18.8 million of intercompany loans subject to currency revaluation.

Other income

Other income for the first six months of 2016 includes approximately $2.2 million related to the gain on sale of the Augusta, Georgia facility in April 2016 and final closing adjustments on the Allstate divestiture recorded in the second quarter of 2016.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense was $13.6 million for the first six months of 2017 compared with $12.1 million for the first six months of 2016.

Amortization of intangibles

Intangible assets amortization expense was $5.3 million for the first six months of 2017 compared with $5.3 million for the first six months of 2016.

Stock-based compensation

Stock-based compensation expense increased 24% to $2.0 million for the first six months of 2017 compared with $1.6 million for the first six months of 2016 as a result of an increase in equity-based awards granted to employees.

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

Accretion and non-cash adjustment of closure and post-closure liabilities was $2.2 million for the first six months of 2017 compared with $2.0 million for the first six months of 2016.

CRITICAL ACCOUNTING POLICIES

Financial statement preparation requires management to make estimates and judgments that affect reported assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The accompanying unaudited consolidated financial statements are prepared using the same critical accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

RECENTLY ISSUED ACCOUNTING STANDARDS

For information about recently issued accounting standards, see Note 1 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the new senior secured credit agreement (the “New Credit Agreement”). At June 30, 2017, we had $4.9 million in cash and cash equivalents immediately available and $216.7 million of borrowing capacity available under our New Credit Agreement. We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our primary ongoing cash requirements are funding operations, capital expenditures, paying interest and required principal payments on our long-term debt, and paying declared dividends pursuant to our dividend policy. We believe future operating cash flows will be sufficient to meet our future operating, investing and dividend cash needs for the foreseeable future. Furthermore, existing cash balances and availability of additional borrowings under our New Credit Agreement provide additional sources of liquidity should they be required.

Operating Activities

For the six months ended June 30, 2017, net cash provided by operating activities was $30.8 million. This primarily reflects net income of $10.2 million, non-cash depreciation, amortization and accretion of $21.1 million, an increase in accounts payable and accrued liabilities of $5.8 million, amortization and write-off of debt issuance costs of $5.6 million, an increase in deferred revenue of $4.8 million and a decrease in income taxes receivable of $2.0 million, partially offset by an increase in accounts receivable of $14.5 million and an increase in other assets of $4.0 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” The increase in accounts payable and accrued liabilities is primarily attributable to the timing of payments to vendors for products and services. The increase in deferred revenue is primarily attributable to the timing of the treatment and disposal of waste received but not yet processed. The increase in accounts receivable is primarily attributable to the timing of customer payments. The decrease in income taxes receivable is primarily attributable to the timing of income tax payments.

Days sales outstanding were 77 days as of June 30, 2017, compared to 73 days as of December 31, 2016 and 74 days as of June 30, 2016.

For the six months ended June 30, 2016, net cash provided by operating activities was $38.7 million. This primarily reflects net income of $16.5 million, non-cash depreciation, amortization and accretion of $19.4 million, a decrease in accounts receivable of $6.6 million, share-based compensation expense of $1.6 million, a decrease in other assets of $1.3 million, and non-cash amortization of debt issuance costs of $1.1 million, partially offset by the gain recognized on the divestiture of the Augusta, Georgia facility in April 2016 and final closing adjustments on the Allstate divestiture of $2.2 million, an increase in income taxes receivable of $1.4 million, a decrease in deferred income taxes of $1.3 million, a decrease in deferred revenue of $1.2 million, a decrease in accounts payable and accrued liabilities of $872,000 and a decrease in closure and post-closure obligations of $848,000. Impacts on net income are due to the factors discussed above under “Results of Operations.” The decrease in receivables is primarily attributable to the timing customer payments. The increase in income taxes receivable is primarily attributable to the timing of estimated income tax payments. The decrease in deferred revenue is primarily attributable to the timing of the treatment and disposal of waste received but not yet processed. The decrease in closure and post-closure obligations is primarily attributable to payments made for closure and post-closure activities primarily at our closed landfills.

Investing Activities

For the six months ended June 30, 2017, net cash used in investing activities was $17.5 million, primarily related to capital expenditures. Significant capital projects included construction of additional disposal capacity at our Beatty, Nevada and Blainville, Quebec, Canada locations and equipment purchases and infrastructure upgrades at our corporate and operating facilities.

For the six months ended June 30, 2016, net cash used in investing activities was $16.7 million, primarily related to capital expenditures of $14.5 million and the purchase of Environmental Services Inc., (“ESI”), for $4.9 million, net of cash acquired, partially offset by proceeds from the divestiture of our Augusta, Georgia facility for $2.7 million, net of cash divested. Significant capital projects included construction of additional disposal capacity at our Blainville, Quebec,

Table of Contents

Canada and Robstown, Texas facilities and equipment purchases and infrastructure upgrades at our corporate and operating facilities.

Financing Activities

For the six months ended June 30, 2017, net cash used in financing activities was $15.7 million, consisting primarily of $283.0 million of repayment of the Company’s long-term debt under the Former Credit Agreement, $281.0 million of initial proceeds from the issuance of long-term debt under the New Credit Agreement, $4.0 million of subsequent payments of long-term debt under the New Credit Agreement, $7.8 million of dividend payments to our stockholders and net payment activity on the Company’s short-term borrowings of $2.2 million.

For the six months ended June 30, 2016, net cash used in financing activities was $15.4 million, consisting primarily of $11.5 million of payments on the Company’s long-term debt under the Former Credit Agreement and $7.8 million of dividend payments to our stockholders, partially offset by $4.0 million of net short-term borrowings under the Former Credit Agreement to fund working capital requirements.

New Credit Agreement

The New Credit Agreement provides for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The New Credit Agreement also contains an accordion feature whereby the Company may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. Proceeds from the Revolving Credit Facility are restricted solely for working capital and other general corporate purposes (including acquisitions and capital expenditures). Under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the New Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the New Credit Agreement).

At June 30, 2017, the effective interest rate on the Revolving Credit Facility, including the impact of our interest rate swap, was 3.37%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable. In October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $200.0 million, or 72%, of the Revolving Credit Facility borrowings as of June 30, 2017. The interest rate swap agreement continued to be effective following the termination of the Company’s Former Credit Agreement.

The Company is required to pay a commitment fee ranging from 0.175% to 0.35% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be reduced based upon the Company’s total net leverage ratio (as defined in the New Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the New Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At June 30, 2017, there were $277.0 million of borrowings outstanding on the Revolving Credit Facility. These borrowings are due on the revolving credit maturity date (as defined in the New Credit Agreement) and presented as long-term debt in the consolidated balance sheets.

The Company has entered into a sweep arrangement whereby day-to-day cash requirements in excess of available cash balances are advanced to the Company on an as-needed basis with repayments of these advances automatically made from subsequent deposits to our cash operating accounts (the “Sweep Arrangement”). Total advances outstanding under the Sweep Arrangement are subject to the $25.0 million swingline loan sublimit under the Revolving Credit Facility. The Company’s revolving credit loans outstanding under the Revolving Credit Agreement are not subject to repayment through the Sweep Arrangement. As of June 30, 2017, there were no amounts outstanding subject to the Sweep Arrangement.

As of June 30, 2017, the availability under the Revolving Credit Facility was $216.7 million with $6.3 million of the Revolving Credit Facility issued in the form of standby letter of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

Table of Contents

For more information about our debt, see Note 8 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

CONTRACTUAL OBLIGATIONS AND GUARANTEES

Except as set forth in the paragraph below, there were no material changes in the amounts of our contractual obligations and guarantees during the six months ended June 30, 2017. For further information on our contractual obligations and guarantees, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

On April 18, 2017, the Company entered into the New Credit Agreement. In connection with the Company’s entry into the New Credit Agreement, the Company terminated the Former Credit Agreement. For more information about our refinancing, see Note 8 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We do not maintain equities, commodities, derivatives, or any other similar instruments for trading purposes. We have minimal interest rate risk on investments or other assets due to our preservation of capital approach to investments. At June 30, 2017, $5.8 million of restricted cash was invested in fixed-income U.S. Treasury and U.S. government agency securities and money market accounts.

We are exposed to changes in interest rates as a result of our borrowings under the New Credit Agreement. Under the New Credit Agreement, Revolving Credit Facility borrowings incur interest at a base rate (as defined in the New Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the New Credit Agreement). On October 29, 2014, the Company entered into an interest rate swap agreement with the intention of hedging the Company’s interest rate exposure on a portion of the Company’s outstanding LIBOR-based variable rate debt. The interest rate swap agreement continued to be effective following the termination of the Company’s Former Credit Agreement. Under the terms of the swap, the Company pays interest at the fixed effective rate of 5.17% and receives interest at the variable one-month LIBOR rate on an initial notional amount of $250.0 million.

As of June 30, 2017, there were $277.0 million of revolving loans outstanding under the New Credit Agreement. If interest rates were to rise and outstanding balances remain unchanged, we would be subject to higher interest payments on our outstanding debt. Subsequent to the effective date of the interest rate swap on December 31, 2014, we are subject to higher interest payments on only the unhedged borrowings under the New Credit Agreement.

Based on the outstanding indebtedness of $277.0 million under the New Credit Agreement at June 30, 2017 and the impact of our interest rate hedge, if market rates used to calculate interest expense were to average 1% higher in the next twelve months, our interest expense would increase by approximately $845,000 for the corresponding period.

Foreign Currency Risk

We are subject to currency exposures and volatility because of currency fluctuations. The majority of our transactions are in USD; however, our Canadian subsidiaries conduct business in both Canada and the United States. In addition, contracts for services that our Canadian subsidiaries provide to U.S. customers are generally denominated in USD. During the six months ended June 30, 2017, our Canadian subsidiaries transacted approximately 56% of their revenue in USD and at any time have cash on deposit in USD and outstanding USD trade receivables and payables related to these transactions. These USD cash, receivable and payable accounts are subject to non-cash foreign currency translation gains or losses. Exchange rate movements also affect the translation of Canadian generated profits and losses into USD.

Table of Contents

We established intercompany loans between our Canadian subsidiaries and our parent company, US Ecology, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable using CAD and are subject to mark-to-market adjustments with movements in the CAD. At June 30, 2017, we had $18.8 million of intercompany loans outstanding between our Canadian subsidiaries and US Ecology. During the six months ended June 30, 2017, the CAD strengthened as compared to the USD resulting in a $536,000 non-cash foreign currency translation gain being recognized in the Company’s consolidated statements of operations related to the intercompany loans. Based on intercompany balances as of June 30, 2017, a $0.01 CAD increase or decrease in currency rate compared to the USD at June 30, 2017 would have generated a gain or loss of approximately $188,000 for the six months ended June 30, 2017.

We had a total pre-tax foreign currency gain of $246,000 for the six months ended June 30, 2017. We currently have no foreign exchange contracts, option contracts or other foreign currency hedging arrangements. Management evaluates the Company’s risk position on an ongoing basis to determine whether foreign exchange hedging strategies should be employed.

ITEM 4. CONTROLS AND PROCEDURES

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer of the Company, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2017. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, including the accumulation and communication of disclosures to the Company’s Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure, are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission (“SEC”).

There were no changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

Cautionary Statement for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar expressions. These statements include, among others, statements regarding our financial and operating results, strategic objectives and means to achieve those objectives, the amount and timing of capital expenditures, repurchases of its stock under approved stock repurchase plans, the amount and timing of interest expense, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions include, among others, those regarding demand for Company 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 the replacement of non-recurring event cleanup projects, a loss of a major customer, our ability to permit and contract for timely construction of new or expanded disposal cells, our ability to renew our operating permits or lease agreements with regulatory bodies, loss of key personnel, compliance with and changes to applicable laws, rules, or regulations, access to insurance, surety bonds and other financial assurances, a deterioration in our labor relations or labor disputes, our ability to perform under required contracts, failure to realize anticipated benefits and operational performance from acquired operations, adverse economic or market conditions, government funding or competitive pressures, incidents or adverse weather conditions that could limit or suspend specific operations, access to cost effective transportation services, fluctuations in foreign currency markets, lawsuits, our willingness or ability to repurchase stock or pay dividends, implementation of new technologies, limitations on our available cash flow as a result of our indebtedness and our ability to effectively execute our acquisition strategy and integrate future acquisitions.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under 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. Before you invest in our common stock, you should be aware that the occurrence of the events described in the “Risk Factors” section in our Form 10-K for the fiscal year ended December 31, 2016 could harm our business, prospects, operating results, and financial condition.

Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, we have a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of US Ecology, Inc.

ITEM 1. LEGAL PROCEEDINGS

Table of Contents

ITEM 1A. RISK FACTORS

The Company is subject to various risks and uncertainties that could have a material impact on our business, financial condition, results of operations and cash flows. The discussion of these risk factors is included in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and there have been no material changes from the risk factors reported on the Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 1, 2016, the Company’s Board of Directors authorized the repurchase of $25.0 million of the Company’s outstanding common stock. Repurchases may be made from time to time in open market or through privately negotiated transactions. The timing of any repurchases will be based upon prevailing market conditions and other factors. The Company did not repurchase any shares of common stock under the repurchase program during the three or six months ended June 30, 2017. The repurchase program will remain in effect until June 2, 2018, unless extended by our Board of Directors.

The following table summarizes the purchases of shares of our common stock during the six months ended June 30, 2017:


				Total Number of	Approximate Dollar
				Shares Purchased as	Value of Shares that
				Part of Publicly	May Yet be Purchased
	Total Number of	Average Price		Announced Plan or	Under the Plans or
Period	Shares Purchased	Paid per Share		Program	Programs
January 1 to 31, 2017	—	$	—	—	$	25,000,000
February 1 to 28, 2017	—		—	—		25,000,000
March 1 to 31, 2017 (1)	1,569		48.50	—		25,000,000
April 1 to 30, 2017	—		—	—		25,000,000
May 1 to 31, 2017	—		—	—		25,000,000
June 1 to 30, 2017 (1)	44		50.95	—		25,000,000
Total	1,613	$	48.57	—	$	25,000,000

(1)

Represents shares surrendered or forfeited in connection with certain employees’ tax withholding obligations related to the vesting of shares of restricted stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

In light of the results of the advisory vote on the frequency of Say-on-Pay votes at our annual meeting held on May 23, 2017, our Board of Directors determined that the Company will continue to hold an advisory Say-on-Pay vote annually. Our Board of Directors will re-evaluate this determination no later than after our next stockholder vote on the frequency of Say-on-Pay votes.

Table of Contents

ITEM 6. EXHIBITS


10.1		Credit Agreement, dated April 18, 2017, by and among US Ecology, Inc., the lenders referred to therein, Wells Fargo Bank, National Association, as administrative agent, as swingline lender and as an issuing lender, and Bank of America, N.A., as an issuing lender, incorporated by reference to Exhibit 10.1 of the Form 8-K filed April 20, 2017.

10.2		Employment Agreement, effective May 23, 2017, between the Company and Andrew Marshall.*

15		Letter re: Unaudited Interim Financial Statements

31.1		Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from the quarterly report on Form 10-Q of US Ecology, Inc. for the quarter ended June 30, 2017 formatted in Extensible Business Reporting Language (XBRL) include: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Cash Flows, and (v) Notes to the Unaudited Consolidated Financial Statements

* Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	US Ecology, Inc.
	(Registrant)

Date: July 31, 2017	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Employment Agreement ” or this “ Agreement ”) is made and entered into effective as of the 23 rd day of May, 2017 (the “ Effective Date ”), by and between US Ecology, Inc., a Delaware corporation (the “ Company ”), and Andrew Marshall (“ Executive ”). The Company and Executive are sometimes collectively referred to herein as the “ Parties ,” and individually, as a “ Party .”

Whereas , the Parties desire to enter into this Agreement, to continue Executive’s employment, on the terms and conditions hereinafter set forth, to reflect, inter alia , Executive’s status as Executive Vice President of Regulatory Compliance and Safety.

Now, Therefore , in consideration of the premises, the mutual promises, covenants and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:

1.0. Employment .

Section 1.01. Employment . The Company hereby employs Executive, and Executive hereby accepts employment with the Company, all upon the terms and subject to the conditions set forth in this Employment Agreement, effective as of the Effective Date first set forth above.

Section 1.02. Term of Employment . The term of employment of Executive by the Company pursuant to this Employment Agreement shall be for the period commencing on the Effective Date and ending December 31, 2019 (the “ Employment Term ”), or such earlier date that Executive’s employment is terminated in accordance with the provisions of this Employment Agreement; provided , however , that the Employment Term shall automatically renew for additional one year periods if neither the Company nor Executive has notified the other in writing of its or his intention not to renew this Employment Agreement on or before 60 days prior to the expiration of the Employment Term (including any renewal(s) thereof).

Section 1.03. Capacity and Duties . Executive is and shall be employed in the capacity of Executive Vice President of Regulatory Compliance and Safety of the Company and its subsidiaries and shall have such other duties, responsibilities and authorities as may be assigned to him from time to time by the President and Chief Executive Officer (“CEO”) or the Board of Directors of the Company (the “ Board ”), which are not materially inconsistent with Executive’s positions with the Company. Except as otherwise herein provided, Executive shall devote his entire business time, best efforts and attention to promote and advance the business of the Company and its subsidiaries and to perform diligently and faithfully all the duties, responsibilities and obligations of Executive to be performed by him under this Employment Agreement. Upon termination of Employee's employment for any reason, unless otherwise requested by the Board, Employee will be deemed to have resigned from the Board (and all other positions held at the Company and its affiliates) voluntarily, without any further action by Employee, as of the end of Employee's employment and Employee, at the Board's request, will execute any documents necessary to reflect his resignation.

Section 1.04. Place of Employment . Executive’s principal place of work shall be the main corporate office of the Company, currently located in Boise, Idaho; provided , however , that the location of the Company and any of its offices may be moved from time to time in the discretion of the Board.

Section 1.05. No Other Employment . During the Term, Executive shall not be employed in any other business activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; provided , however , that this restriction shall not be construed as preventing Executive from (i) participating in charitable, civic, educational, professional, community or industry affairs; (ii) sitting on one outside board of directors for a public or private company that does not compete with the Company, with the prior concurrence of the Board that the required time commitment with respect to such position is acceptable; and (iii) investing his personal assets in a business which does not compete with the Company or its subsidiaries or with any other company or entity affiliated with the Company, where the form or manner of such investment will not require services on the part of Executive in the operation of the affairs of the business in which such investment is made and in which his participation is solely that

of a passive investor or advisor, so long as the activities in clauses (i), (ii) and (iii), above, do not materially interfere with the performance of Executive’s duties hereunder or create a potential business conflict or the appearance thereof.

Section 1.06. Adherence to Standards . Executive shall comply with the written policies, standards, rules and regulations of the Company from time to time established for all executive officers of the Company consistent with Executive’s position and level of authority.

Section 1.07. Review of Performance . The CEO shall periodically review and evaluate with Executive his performance under this Employment Agreement.

2.0. Compensation .

During the Employment Term, subject to all the terms and conditions of this Employment Agreement and as compensation for all services to be rendered by Executive hereunder, the Company shall pay to or provide Executive with the following:

Section 2.01. Base Salary . During the Employment Term, the Company shall pay to Executive an annual base salary (“ Base Salary ”) in an amount not less than Two Hundred Seventy-Five Thousand Dollars and No/100 ($275,000). Such Base Salary shall be payable in accordance with the regular payroll practices and procedures of the Company.

Section 2.02. Incentive Pay . Executive shall be eligible to participate in any cash incentive or bonus plans of the Company which are in effect for executives from time to time, including the annual cash incentive payment opportunity granted to Executive under the Company’s Management Incentive Plan (“ MIP ” and together with any other cash incentive or bonus plans of the Company, the “ Cash Incentive Plans ”), subject to the terms and conditions thereof, at a minimum 60% of Base Salary (“ Target Bonus ”) at a 100% of MIP target basis, which such MIP target shall be set annually by the Board. Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or terminate any or all of its Cash Incentive Plans at any time. In the event of any inconsistency between the terms of this Employment Agreement and the terms of any Cash Incentive Plan, the Cash Incentive Plan shall govern and control.

Section 2.03. Paid Time Off and Other Benefits . Executive shall be entitled to five weeks Paid Time Off (“ PTO ”) per year, and shall have the right, on the same basis as other members of senior management of the Company, to participate in any and all employee benefit plans and programs of the Company, including medical plans, insurance plans and other benefit plans and programs as shall be, from time to time, in effect for executive employees and senior management personnel of the Company. Such participation shall be subject to the terms of the applicable plan documents, generally applicable Company policies and the discretion of the Board or any administrative or other committee provided for in, or contemplated by, each such plan or program. Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or terminate such benefit plans and programs at any time.

Section 2.04. Expenses . The Company shall reimburse Executive for all reasonable, ordinary and necessary expenses including, but not limited to, automobile and other business travel and customer and business entertainment expenses incurred by him in connection with his employment in accordance with the Company’s expense reimbursement policy; provided , however , Executive shall render to the Company a complete and accurate accounting of all such expenses in accordance with the substantiation requirements of the Internal Revenue Code of 1986, as amended (the “ Code ”). Executive’s right to reimbursement hereunder may not be liquidated or exchanged for any other benefit, the amount of expenses eligible for reimbursement hereunder in a calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year, and Executive shall be reimbursed for eligible expenses no later than the close of the calendar year following the year in which Executive incurs the applicable expense.

3.0. Omitted

4.0. Termination of Employment .

EXECUTIVE EMPLOYMENT AGREEMENT - 2

Section 4.01. Termination of Employment . Executive’s employment and this Employment Agreement may be terminated prior to expiration of the Employment Term as follows (with the date of termination of Executive’s employment hereunder being referred to hereinafter as the “ Termination Date ”):

(a) By either Party by delivering 60 days’ prior written notice of non-renewal as set forth in the Section 1.02 ( Term of Employment );

(b) Upon no less than 30 days’ written notice from the Company to Executive at any time without Cause (as hereinafter defined) and other than due to Executive’s death or Disability, subject to the provisions of Section 5.02 ( Termination by the Company Without Cause or by the Executive For Good Reason );

(c) By the Company for Cause (as hereinafter defined) immediately upon written notice stating the basis for such termination;

(d) Due to the death or Disability (as hereinafter defined) of Executive;

(e) By Executive at any time with or without Good Reason (as hereinafter defined) upon 30 days’ written notice from Executive to the Company (or such shorter period) to which the Company may agree; and

(f) Upon the mutual agreement of the Company and Executive.

Section 4.02. Effect of Termination . In the event of termination of Executive’s employment with the Company for any reason, or if Executive is required by the Board, Executive agrees to resign, and shall automatically be deemed to have resigned, from any offices (including any directorship) Executive holds with the Company or any of its subsidiaries effective as of the Termination Date or, if applicable, effective as of a date selected by the Board.

5.0. Payments and Benefits Upon Termination of Employment .

Section 5.01. Termination by the Company For Cause or by the Executive Without Good Reason. If Executive’s employment and this Employment Agreement are terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay Executive the Accrued Obligations (as hereinafter defined) ( other than , however, any amounts due under any Cash Incentive Plan which shall be forfeited pursuant to the terms of such plan), in a single, lump-sum payment in accordance with applicable payroll laws but in no event longer than 45 days following such termination.

Section 5.02. Termination by the Company Without Cause or by the Executive For Good Reason . If Executive’s employment and this Employment Agreement are terminated by the Company without Cause or if Executive terminates his employment and this Employment Agreement for Good Reason, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment in accordance with applicable payroll laws but in no event longer than 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan. In addition, subject to Sections 6.0, 7.0 and 8.0 , Executive shall be entitled to receive the following: (i) an amount equal to the sum of two year’s Base Salary and two times Target Bonus (“ Severance Payment ”) which shall be payable as provided below; (ii) continued vesting of granted stock options and the continued right to exercise such stock options following the Termination Date for the shorter of a period of one year or the original expiration date of such option; (iii) continued vesting of restricted stock and restricted stock unit grants for a period of one year following the Termination Date (in the case of unvested restricted stock or unvested restricted stock units subject to “cliff” vesting, the number of shares or units in which the Executive shall vest shall be calculated based on a period from the start of the vesting period to the first anniversary of the Termination Date, as a percentage of the total vesting period); (iv) continued vesting of performance stock units for a period of one year following the Terminations Date with payment calculated based on a period from the start of the performance period to the Termination Date, as a percentage of the total performance period); and (v) continued medical, hospitalization, life insurance and disability benefits to which Executive was entitled at the Termination Date (any of which shall, to the extent required to avoid subjecting Executive to an additional tax under Section 409A of the Code or as otherwise determined by the Company in its discretion, be structured so as to require that Executive pay the premiums for such

EXECUTIVE EMPLOYMENT AGREEMENT - 3

benefits on a timely basis, in which case the Company shall reimburse Executive for such premiums in accordance with Section 8.02 so that Executive is made whole on an after-tax basis) for a period of the lesser of 24 months following the Termination Date or the date Executive receives similar or comparable coverage from a new employer; provided, however, that the Company may unilaterally amend the foregoing clause (v) or eliminate the benefit provided thereunder to the extent it deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or any of its subsidiaries or affiliates, including, without limitation, under Code Section 4980D. All such additional payments and benefits under this Section 5.02 shall be conditional on Executive’s timely execution and non-revocation of the Release (as defined in Section 7.0 ) and Executive’s continued compliance with Section 11.0 ( Return of Property ), Section 14.0 ( Confidentiality ), Section 15.0 ( Work Product Assignment ), and Section 16.0 ( Covenant Not to Compete ). Payment of the Severance Payment shall be made in bi-weekly installments, in accordance with the regular payroll practices and procedures of the Company commencing on the first regularly scheduled payroll date occurring after Executive's Release becomes effective; provided, however, that if the period during which Executive can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then payment of the Severance Payment shall commence on the later of (a) the first regularly scheduled payroll date occurring after Executive's Release becomes effective, and (b) the first regularly scheduled payroll date occurring in the subsequent calendar year. The first such payment shall include any installments of the Severance Payment that would have been made on previous payroll dates but for the requirement that Executive execute a Release. The period, if any, during which Executive and his spouse and children are eligible to continue their coverage under the Company's group health plans pursuant to Section 4980B of the Code ("COBRA") shall run simultaneously with the period specified in clause (iv) (provided that nothing in such clause (iv) shall be deemed to extend such COBRA continuation period beyond the minimum period required by applicable law). For the avoidance of doubt, a termination of employment pursuant to Section 4.01(a) by notice of non-renewal by the Company for any reason other than Cause, shall be deemed a termination of employment by the Company without Cause for purposes of this Section 5.02.

Section 5.03. Termination Due to Death . If Executive’s employment and this Employment Agreement are terminated due to Executive’s death, the Company shall pay the estate of Executive the Accrued Obligations in a single, lump-sum payment within 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.

Section 5.04. Termination Due to Disability . If Executive’s employment and this Employment Agreement are terminated due to his Disability, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment in accordance with applicable payroll laws but in no event longer than 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan. In addition, Executive will be eligible to participate in the Company’s Long-Term Disability Plan or any other Disability Plans, on a basis no less favorable to Executive than other senior executives of the Company.

Section 5.05. Retirement . If Executive’s employment and this Employment Agreement are terminated by virtue of Executive’s Retirement prior to the expiration of the Employment Term, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment in accordance with applicable payroll laws but in no event longer than 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.

6.0. Payment and Benefits Upon Change of Control .

Subject to Sections 7.0 and 8.0 , upon a Change of Control of the Company (as hereinafter defined) during the Employment Term and subsequent termination from the Company under Section 5.02 within 24 months after such Change of Control (including, for purposes of this Section, a termination for Good Reason), Executive shall receive, in lieu of the Severance Payment, a payment equal to two times the sum of (i) his annual Base Salary; and (ii) the greater of (a) any earned but unpaid amount due under any Cash Incentive Plan (as determined by the terms of the Cash Incentive Plan); and (b) the Executive’s Target Bonus amount; and (c) the Cash Incentive Plan payment received (if any) for the fiscal year immediately preceding the Cash Incentive Plan year in Subsection (ii)(a) herein (collectively, the “ Change of Control Payment ”). Such Change of Control Payment shall be paid in a single lump-sum payment in accordance with applicable payroll laws but in no event longer than 45 days after Executive's Release becomes effective; provided, however, that if the period during which Executive can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then the lump sum will be paid in the subsequent

EXECUTIVE EMPLOYMENT AGREEMENT - 4

calendar year (and in any event by March 15 of such year), regardless of when Executive's Release becomes effective, and even if payment occurs more than 45 days after Executive's Release becomes effective. However, if a portion of the Change of Control Payment is based on (ii)(a) or (ii) (b) of this Section 6.0, such amount shall be paid according to the terms of the corresponding Cash Incentive Plan. The Executive shall be entitled to the other benefits set forth in Section 5.02 (other than the Severance Payment), except that all unvested stock options and restricted stock shall become fully vested upon the Termination Date under this Section 6.0 ; provided , however , that if unvested stock options and restricted stock held by the Executive are not continued, substituted for or assumed by the successor company in connection with a Change of Control, such awards shall immediately vest upon the Change of Control. In the event of an inconsistency between this Section 6.0 and Section 5.02 , this Section 6.0 shall govern and control.

7.0. Release .

Executive's entitlement to the payments and benefits described in the second sentence of Section 5.02 and in Section 6.0 is subject to and conditioned upon Executive's timely execution, without subsequent revocation, of a release of claims (in a form satisfactory to the Company) in favor of the Company and its subsidiaries and affiliates (the “ Release ”); provided, however, that notwithstanding the foregoing, the Release is not intended to and will not waive the Executive's rights: (i) to indemnification pursuant to any applicable provision of the Company's Bylaws or Certificate of Incorporation, as amended, pursuant to any written indemnification agreement between the Executive and the Company, or pursuant to applicable law; (ii) to vested benefits or payments specifically to be provided to the Executive under this Agreement or any Company employee benefit plans or policies; or (iii) respecting any claims the Executive may have solely by virtue of the Executive's status as a stockholder of the Company. The Release also shall not impose any restrictive covenant on the Executive's conduct post-termination that the Executive had not agreed to prior to the Executive's termination in this Agreement or otherwise) or include claims that an employee cannot lawfully release through execution of a general release of claims.

To be timely, the Release must become effective (i.e., Executive must sign it and any revocation period must expire without Executive revoking the Release) within 60 days, or such shorter period specified in the Release, after Executive's date of termination of employment. If the Release does not become effective within such time period, then Executive shall not be entitled to such payments and benefits. The Company is obligated to provide Executive the Release within 39 calendar days from Termination Date and Executive shall have a minimum of 21 calendar days to review and comment on the Release.

8.0. Compliance With Section 409A .

Section 8.01. General . The provisions of this Employment Agreement are intended to comply with the requirements of Section 409A of the Code and any regulations and official guidance promulgated thereunder (“ Section 409A ”) or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A, shall in all respects be interpreted and administered in accordance with Section 409A. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. Each payment of compensation under this Employment Agreement shall be treated as a separate payment of compensation for purposes of Section 409A and a right to a series of installment payments under this Employment Agreement (including pursuant to Section 5.02) shall be treated as a right to a series of separate and distinct payments. All payments to be made upon a termination of employment under this Employment Agreement may only be made upon a “separation from service” under Section 409A. In no event may Executive, directly or indirectly, designate the calendar year of any payment under this Plan.

Section 8.02. In-Kind Benefits and Reimbursements . Notwithstanding anything to the contrary in this Employment Agreement, all reimbursements and in-kind benefits provided hereunder shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (a) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified herein); (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, except, if such benefits consist of the reimbursement of expenses referred to in Section 105(b) of the Code, a maximum, if provided under the terms of the plan providing such medical benefit, may be imposed on the amount of such reimbursements over some or all of the period in which such benefit is to be provided to Executive as described in Treasury Regulation Section 1.409A-3(i)(1)(iv)(B); (c) the reimbursement of an eligible expense will be made no

EXECUTIVE EMPLOYMENT AGREEMENT - 5

later than the last day of the calendar year following the calendar year in which the expense is incurred, provided that reimbursement shall be made only if Executive has submitted an invoice for such expenses at least 10 days before the end of the calendar year following the calendar year in which such expenses were incurred; and (d) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

Section 8.03. Delay of Payments . Notwithstanding any other provision of this Employment Agreement to the contrary, if Executive is considered a “specified employee” for purposes of Section 409A (as determined in accordance with the methodology established by the Company as in effect on the date of termination of employment), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A that is otherwise due to Executive hereunder during the six-month period following Executive’s separation from service (as determined in accordance with Section 409A) on account of Executive’s separation from service shall be accumulated and paid to Executive on the first business day after the date that is six months following Executive’s separation from service (the “ Delayed Payment Date ”). The Executive shall be entitled to interest (at a per annum rate equal to the highest rate of interest applicable to six-month non-callable certificates of deposit with daily compounding offered by the following institutions: Citibank, N.A., Wells Fargo Bank, N.A. or Bank of America, on the date of such separation from service) on any cash payments so delayed from the scheduled date of payment to the Delayed Payment Date. If Executive dies during the postponement period, the amounts and entitlements delayed on account of Section 409A shall be paid to the personal representative of Executive’s estate on the first to occur of the Delayed Payment Date or 30 days after the date of Executive’s death.

Section 8.04. Cooperation . Executive and the Company agree to work together in good faith to consider amendments to this Employment Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

9.0. Limitation on Payments .

In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 9.0 , would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits under the foregoing clause (i) will be either:

(a) delivered in full; or

(b) delivered as to such lesser extent as would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,

Whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction shall occur in the following order: (i) reduction of cash payments; (ii) cancellation of awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G); (iii) cancellation of accelerated vesting of equity awards; and (iv) reduction of employee benefits; provided that the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Executive’s equity awards. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 9.0 will be made in writing by an independent firm (the “ Firm ”) immediately prior to Change of Control, whose determination will be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this Section 9.0 , the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 9.0 . The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section.

EXECUTIVE EMPLOYMENT AGREEMENT - 6

10.0. Definitions .

In addition to the words and terms elsewhere defined in this Employment Agreement, certain capitalized words and terms used herein shall have the meanings given to them by the definitions and descriptions in this Section 10.0 , unless the context or use indicates another or different meaning or intent, and such definition shall be equally applicable to both the singular and plural forms of any of the capitalized words and terms herein defined. The following words and terms are defined terms under this Employment Agreement:

(a) “ Accrued Obligations ” shall include (i) any unpaid Base Salary through the Termination Date and any accrued PTO in accordance with the Company’s policy; (ii) reimbursement for any un-reimbursed business expenses incurred through the Termination Date; and (iii) all other payments, benefits or fringe benefits to which Executive may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Employment Agreement. Accrued Obligations shall also include any cash incentive earned under any Cash Incentive Plan and shall be paid on a pro-rata basis based on days employed during the fiscal year of such plan if any. For the sake of clarity and by way of example only, if the Executive is employed for 270 days of a fiscal year and the management incentive plan in place at the time pays out 100% of target, the Executive would be owed 74% (270/365) of any incentive payments to which he would have been entitled had his employment not been terminated. Such payments shall be made in accordance with the terms of any Cash Incentive Plan in effect at the time, except that any requirement that the recipient must be an employee at the time of payment shall be waived by the Company under this policy.

(b) A termination for “ Cause ” shall mean a termination of this Employment Agreement by reason of a determination by two-thirds (2/3) of the members of the Board (excluding, for such purposes, Executive, if Executive is a member of the Board) voting that Executive:

(i) Has engaged in willful neglect (other than neglect resulting from his incapacity due to physical or mental illness) or willful misconduct in the performance of his duties for the Company under this Employment Agreement;

(ii) Has engaged in willful conduct the consequences of which are materially adverse to the Company, monetarily or otherwise;

(iii) Has materially breached the terms of this Employment Agreement, and such breach persisted after notice thereof from the Company and a reasonable opportunity to cure; or

(iv) Has been convicted of (or has plead guilty or no contest to) any felony other than a traffic violation.

(i) The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company (each, a “ Business Combination ”), unless, following such Business Combination, all or substantially all of the individuals and entities that were the beneficial owners of the combined voting power of the Company’s outstanding securities immediately prior to such Business Combination beneficially own, directly or indirectly, at least 60% of the combined voting power of the then-outstanding securities of the entity resulting from such Business Combination in substantially the same proportions as their ownership of the combined voting power of the Company’s outstanding securities immediately prior to the Business Combination; provided , however , that a public offering of the Company’s securities shall not constitute a Business Combination;

(ii) The sale, transfer, or other disposition of all or substantially all of the Company’s assets; or

(iii) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% of the total voting power represented by the Company’s then outstanding voting securities. For

EXECUTIVE EMPLOYMENT AGREEMENT - 7

purposes of this subparagraph (iii) , the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act, but shall exclude (x) a trustee or other fiduciary holding securities under an Executive benefit plan of the Company or of a subsidiary and (y) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

(iv) A change in the composition of the Board in any two-year period as a result of which fewer than a majority of the directors are Incumbent Directors. “ Incumbent Directors ” shall mean directors who either (a) are directors of the Company as of the start of the period or (b) are elected, or nominated for election, to the Board with the affirmative votes (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for election as a director without objection to such nomination) of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors of the Company).

(d) “ Disability ” shall be as defined in the Company’s Long-Term Disability Plan.

(e) “ Good Reason ” shall mean the occurrence of any of the following without Executive’s prior written consent during the Employment Period, which occurrence continues for 10 days after written notice thereof from Executive to the Board:

(i) Any material diminution or adverse change in Executive’s position, status, title, authorities or responsibilities, office or duties under this Employment Agreement which represents a demotion from such position, status, title, authorities or responsibilities, office or duties which are materially inconsistent with his position, status, title, authorities or responsibilities, office or duties set forth in this Employment Agreement, or any removal of Executive from, or failure to appoint, elect, reappoint or reelect Executive to, any of his positions, except in connection with the termination of his employment with or without Cause, or as a result of his death or Disability.

(ii) The exclusion of Executive in any incentive, bonus or other compensation plan in which Executive participated at the time that this Employment Agreement is executed, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to the failure to continue such plan, or the failure by the Company to continue Executive’s participation therein, or any action by the Company which would directly or indirectly materially reduce his participation therein or reward opportunities thereunder; provided , however , that Executive continues to meet all eligibility requirements thereof. Notwithstanding the foregoing, this provision shall not apply to the exclusion of Executive in any incentive, bonus or other compensation plan in which Executive participated at the time that this Employment Agreement is executed to the extent that such termination is required by law;

(iii) The failure by the Company to include or continue Executive’s participation in any material employee benefit plan (including any medical, hospitalization, life insurance or disability benefit plan in which Executive participates or in which other Company executives participate), or any material fringe benefit or prerequisite enjoyed by him unless an equitable arrangement (embodied in an ongoing substitute or alternative plan, if applicable) has been made with respect to the failure to include Executive in such plan, or the failure by the Company to continue Executive's participation therein, or any action by the Company which would directly or indirectly materially reduce his participation therein or reward opportunities thereunder, or the failure by the Company to provide him with the benefits to which he is entitled under this Employment Agreement; provided , however , that Executive continues to meet all eligibility requirements thereof. Notwithstanding the foregoing, this provision shall not apply to the exclusion of Executive in any Executive benefit plan in which Executive participated at the time that this Employment Agreement is executed to the extent that such termination is required by law, or the failure to continue such plan or benefit is applicable to the Company's executive officers and/or Executives generally; or

(iv) Any material breach by the Company of any provision of this Employment Agreement.

EXECUTIVE EMPLOYMENT AGREEMENT - 8

(v) The movement of main corporate office of the Company beyond a 50 mile radius from Boise, Idaho or beyond a 50 mile radius the Executive’s primary place of employment if not in the corporate office.

Notwithstanding any other provision of this Agreement to the contrary, Executive shall be deemed not to have terminated his employment for Good Reason unless (i) Executive notifies the Board in writing of the condition that Executive believe constitutes Good Reason within 90 days of the initial existence thereof (which notice specifically identifies such condition and the details regarding its existence), (ii) the Company fails to remedy such condition within 10 days after the date on the Board receives such notice (the “ Remedial Period ”), and (iii) Executive terminates employment with the Company (and its subsidiaries and affiliates) within 60 days after the end of the Remedial Period. The failure by Executive to include in the notice any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his or her rights hereunder.

(f) “ Retirement ” shall mean retirement upon “normal retirement age” as defined in the Company’s 401(k) retirement plan.

11.0. Return of Property .

Executive agrees, upon the termination of his employment with the Company, to return all physical, computerized, electronic or other types of records, documents, proposals, notes, lists, files and any and all other materials, including without limitation, computerized and/or electronic information that refers, relates or otherwise pertains to the Company and/or its subsidiaries, and any and all business dealings of said persons and entities. In addition, Executive shall return to the Company all property and equipment that Executive has been issued during the course of his employment or which he otherwise currently possesses, including but not limited to, any computers, cellular phones, personal digital assistants, pagers and/or similar items. Executive shall immediately deliver to the Company any such physical, computerized, electronic or other types of records, documents, proposals, notes, lists, files, materials, property and equipment that are in Executive’s possession. Executive further agrees that he will immediately forward to the Company any business information regarding the Company and/or its subsidiaries that has been or is inadvertently directed to Executive following his last day of employment with the Company. The provisions of this Section 11.0 are in addition to any other written agreements on this subject that Executive may have with the Company and/or its subsidiaries, and are not meant to and do not excuse any additional obligations that Executive may have under such agreements.

12.0. Notices .

For the purposes of this Employment Agreement, notices and all other communications provided for hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, or by expedited (overnight) courier with established national reputation, shipping prepaid or billed to sender, in either case addressed to the respective addresses last given by each Party to the other (provided that all notices to the Company shall be directed to the attention of the Chief Executive Officer) or to such other address as either Party may have furnished to the other in writing in accordance herewith. All notices and communication shall be deemed to have been received on the date of delivery thereof, or on the second day after deposit thereof with an expedited courier service, except that notice of change of address shall be effective only upon receipt. Notices shall be addressed as follows:

If to the Company:

251E. Front St., Suite 400, Boise, Idaho 83702.

If to the Executive:

251 E. Front Street, Suite 400, Boise, Idaho 83706, or

as on file with the Company’s Corporate Secretary

13.0. Life Insurance .

EXECUTIVE EMPLOYMENT AGREEMENT - 9

The Company may, at any time after the execution of this Employment Agreement, apply for and procure as owner and for its own benefit, life insurance on Executive, in such amounts and in such form or forms as the Company may determine. The Executive shall, at the request of the Company, submit to such medical examinations, supply such information, and execute such documents as may be required by the insurance company or companies to whom the Company has applied for such insurance.

14.0. Confidentiality .

Executive agrees not to disclose or reveal to any person or entity outside the Company any secret or confidential information concerning any Company product, process, equipment, machinery, design, formula, business, or other activity (collectively, “ Confidential Information ”) without prior permission of the Company in writing. Confidential Information shall not include any information which is in the public domain or becomes publicly known through no wrongful act on the part of Executive or breach of this Employment Agreement. Executive acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to the Company. The obligation to protect the secrecy of such information continues after employment with Company may be terminated. In furtherance of this agreement, Executive acknowledges that all Confidential Information which Executive now possesses, or shall hereafter acquire, concerning and pertaining to the business and secrets of the Company and all inventions or discoveries made or developed, or suggested by or to Executive during said term of employment relating to Company’s business shall, at all times and for all purposes, be regarded as acquired and held by Executive in his fiduciary capacity and solely for the benefit of Company.

15.0. Work Product Assignment .

Executive agrees that all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the actual or anticipated business, research and development or existing or future products or services of the Company or of any of its subsidiaries or affiliates, and which are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Company, together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as the “ Work Product ”), belong in all instances to the Company or its subsidiaries or affiliates, as applicable, and Executive hereby assigns to the Company all Work Product and all of his interest therein. Executive will promptly perform all actions reasonably requested by the Board (whether during or after his employment with the Company) to establish and confirm the ownership of such Work Product (including, without limitation, the execution and delivery of assignments, consents, powers of attorney and other instruments) by the Company or its subsidiaries or affiliates, as applicable, and to provide reasonable assistance to the Company or any of its subsidiaries and affiliates in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.

16.0. Covenant Not to Compete .

Section 16.01. Acknowledgment of Executive . Executive acknowledges that his employment with the Company has special, unique and extraordinary value to the Company; that the Company has a lawful interest in protecting its investment in entrusting its Confidential Information to him; and that the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of this Employment Agreement because in performing such services Executive would inevitably disclose the Company’s Confidential Information to third parties and that the restrictions, prohibitions and other provision of this Section 16.0 are reasonable, fair and equitable in scope, terms, and duration to protect the legitimate business interests of the Company, and are a material inducement to the Company to enter into this Employment Agreement.

Section 16.02. Non-Competition Covenant . Without the consent in writing of the Board, Executive will not, during the Employment Agreement and for a period of 12 months after such termination of employment (if by the Company for Cause or by Executive without Good Reason), acting alone or in conjunction with others, directly or indirectly engage (either as owner, investor, partner, stockholder, employer, employee, consultant, advisor or director) in activities on behalf of any entity or entities engaged in waste processing and disposal services for low-

EXECUTIVE EMPLOYMENT AGREEMENT - 10

level radioactive-wastes, naturally occurring, accelerator produced, and exempt radioactive materials, and hazardous and PCB wastes. It is agreed that the ownership of not more than five percent (5%) of the equity securities of any company having securities listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be deemed inconsistent with this Section 16.02 .

Section 16.03. Non-Solicitation of Vendors and Customers . Without the consent in writing of the Board, after Executive’s employment has terminated for any reason, Executive will not, during the Employment Agreement and for a period of 18 months thereafter acting alone or in conjunction with others, either directly or indirectly induce any vendors or customers of the Company to curtail or cancel their business with the Company or any of its subsidiaries.

Section 16.04. Non-Solicitation of Employees . Without the consent in writing of the Board, after Executive’s employment has terminated for any reason, Executive will not, during the Employment Agreement and for a period of 24 months thereafter, acting alone or in conjunction with others, either directly or indirectly induce, or attempt to influence, any employee of the Company or any of its subsidiaries to terminate his or her employment.

17.0. Remedies .

Section 17.01. Specific Performance; Costs of Enforcement . Executive acknowledges that the covenants and agreements, which he has made in this Employment Agreement are reasonable and are required for the reasonable protection of the Company and its business. Executive agrees that the breach of any covenant or agreement contained herein will result in irreparable injury to the Company and that, in addition to all other remedies provided by law or in equity with respect to the breach of any provision of this Employment Agreement, the Company and its successors and assigns will be entitled to enforce the specific performance by Executive of his obligations hereunder and to enjoin him from engaging in any activity in violation hereof and that no claim by Executive against the Company or its successors or assigns will constitute a defense or bar to the specific enforcement of such obligations. Executive agrees that the Company and any successor or assign shall be entitled to recover all costs of enforcing any provision of this Employment Agreement, including, without limitation, reasonable attorneys’ fees and costs of litigation. In the event of a breach by Executive of any covenant or agreement contained herein, the running of the restrictive covenant periods (but not of Executive’s obligations hereunder) shall be tolled during the period of the continuance of any actual breach or violation.

Section 17.02. Remedy for Breach of Restrictive Covenants . The provisions of Section 14.0 ( Confidentiality ), Section 15.0 ( Work Product Assignment ), and Section 16.0 ( Covenant Not to Compete ) are separate and distinct commitments independent of each of the other Sections. Accordingly, notwithstanding any other provisions of this Employment Agreement, Executive agrees that damages in the event of a breach or a threatened breach by Executive of Section 14.0 ( Confidentiality ) and Section 16.0 ( Covenant Not to Compete ) would be difficult if not impossible to ascertain and an inadequate remedy, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, shall have the right to an immediate injunction or other equitable relief enjoining any such threatened or actual breach, without any requirement to post bond or provide similar security. The existence of this right shall not preclude the Company from pursuing any other rights and remedies at law or in equity that the Company may have, including recovery of damages for any breach of such Sections.

Section 17.03. Right to Cancel Payments .

(a) In addition to the remedies set forth above in Sections 17.01 and 17.02 , the Company may, at the sole discretion of the Board, cancel, rescind, suspend, withhold or otherwise limit or restrict the Severance Payment under Section 5.02 ( Termination by the Company Without Cause or by the Executive For Good Reason ) (which excludes any other payments made to Executive under Section 2.0 and under Sections 5.0 and 6.0 above), whether vested or not, at any time if:

(i) Executive is not in compliance with all of the provisions of Section 14.0 ( Confidentiality ), Section 15.0 ( Work Product Assignment ) and Section 16.0 ( Covenant Not to Compete ); and

EXECUTIVE EMPLOYMENT AGREEMENT - 11

(ii) Such non-compliance has been finally determined by binding arbitration pursuant to Section 18.0 ( Dispute Resolution ).

(b) As a condition to the receipt of any Severance Payment, Executive shall certify to the Company that he is in compliance with the provisions set forth above.

(c) In the event that Executive fails to comply with the provisions set forth in Section 14.0 ( Confidentiality ), Section 15.0 ( Work Product Assignment ) and/or Section 16.0 ( Covenant Not to Compete ), as finally determined by binding arbitration pursuant to Section 18.0 ( Dispute Resolution ), prior to or within twelve (12) months after any payment by the Company with respect to any Severance Payment under Section 5.02 , such payment may be rescinded by the Company within 12 months thereafter. In the event of such rescission, Executive shall pay to the Company, within 12 months of the Company’s rescission of one or more Severance Payments, the amount of any such payment(s) received as a result of the rescinded payment(s), without interest, in such further manner and on such further terms and conditions as may be required by the Company; and the Company shall be entitled to set-off against the amount of such payment any amount owed to Executive by the Company, other than wages.

(d) Executive acknowledges that the foregoing provisions are fair, equitable and reasonable for the protection of the Company’s interests in a stable workforce and the time and expense the Company has incurred to develop its business and its customer and vendor relationships.

18.0. Dispute Resolution .

Except as described above in Section 17.02 ( Remedy for Breach of Restrictive Covenants ):

Section 18.01. Initial Negotiations . Company and Executive agree to resolve all disputes arising out of their employment relationship by the following alternative dispute resolution process: (a) the Company and Executive agree to seek a fair and prompt negotiated resolution; but if this is not possible, (b) all disputes shall be resolved by binding arbitration; provided, however , that during this process, at the request of either Party, made not later than 60 days after the initial arbitration demand, the Parties agree to attempt to resolve any dispute by non-binding, third-party intervention, including either mediation or evaluation or both but without delaying the arbitration hearing date. BY ENTERING INTO THIS EMPLOYMENT AGREEMENT, BOTH PARTIES GIVE UP THEIR RIGHT TO HAVE THE DISPUTE DECIDED IN COURT BY A JUDGE OR JURY.

Section 18.02. Mandatory Arbitration . Any controversy or claim arising out of or connected with Executive’s employment at the Company, including but not limited to claims for compensation or severance and claims of wrongful termination, age, sex or other discrimination or civil rights shall be decided by arbitration. In the event the Parties cannot agree on an arbitrator, then the arbitrator shall be selected by the administrator of the American Arbitration Association (“ AAA ”) office in Salt Lake City, Utah. The arbitrator shall be an attorney with at least 15 years’ experience in employment law in Idaho. Boise, Idaho shall be the site of the arbitration. All statutes of limitation, which would otherwise be applicable, shall apply to any arbitration proceeding hereunder. Any issue about whether a controversy or claim is covered by this Employment Agreement shall be determined by the arbitrator.

Section 18.03. Arbitration Rules .

(a) The arbitration shall be conducted in accordance with this Employment Agreement, using as appropriate the AAA Employment Dispute Resolution Rules in effect on the date hereof. The arbitrator shall not be bound by the rules of evidence or of civil procedure, but rather may consider such writings and oral presentations as reasonable business people would use in the conduct of their day-to-day affairs, and may require both Parties to submit some or all of their respective cases by written declaration or such other manner of presentation as the arbitrator may determine to be appropriate. The Parties agree to limit live testimony and cross-examination to the extent necessary to ensure a fair hearing on material issues.

(b) The arbitrator shall take such steps as may be necessary to hold a private hearing within 120 days of the initial request for arbitration and to conclude the hearing within two days; and the arbitrator's written decision shall be made not later than 14 calendar days after the hearing. The Parties agree that they

EXECUTIVE EMPLOYMENT AGREEMENT - 12

have included these time limits in order to expedite the proceeding, but they are not jurisdictional, and the arbitrator may for good cause allow reasonable extensions or delays, which shall not affect the validity of the award. Both written discovery and depositions shall be allowed. The extent of such discovery will be determined by the Parties and any disagreements concerning the scope and extent of discovery shall be resolved by the arbitrator. The written decision shall contain a brief statement of the claim(s) determined and the award made on each claim. In making the decision and award, the arbitrator shall apply applicable substantive law. The arbitrator may award injunctive relief or any other remedy available from a judge, including consolidation of this arbitration with any other involving common issues of law or fact which may promote judicial economy, and may award attorneys’ fees and costs to the prevailing Party, but shall not have the power to award punitive or exemplary damages. The Parties specifically state that the agreement to limit damages was agreed to by the Parties after negotiations.

19.0. Attorneys’ Fees .

Section 19.01. Prevailing Party Entitled to Attorneys’ Fees . In any action at law or in equity to enforce any of the provisions or rights under this Employment Agreement, the unsuccessful Party to such litigation, as determined by the arbitrator in accordance with the dispute resolution provisions set forth above, shall pay the successful Party or Parties all costs, expenses and reasonable attorneys’ fees incurred therein by such Party or Parties (including, without limitation, such costs, expenses and fees on appeal), excluding, however, any time spent by Company employees, including in-house legal counsel, and if such successful Party or Parties shall recover judgment in any such action or proceeding, such costs, expenses and attorneys’ fees shall be included as part of such judgment.

Section 19.02. Limitation on Fees . Notwithstanding the foregoing provision, in no event shall the successful Party or Parties be entitled to recover an amount from the unsuccessful Party for costs, expenses and attorneys’ fees that exceeds the unsuccessful Party’s or Parties’ costs, expenses and attorneys’ fees in connection with the action or proceeding.

20.0. Miscellaneous Provisions .

Section 20.01. Prior Employment Agreements . Executive represents and warrants that Executive’s performance of all the terms of this Employment Agreement and as an Executive of the Company does not, and will not, breach any employment agreement, arrangement or understanding or any agreement, arrangement or understanding to keep in confidence proprietary information acquired by Executive in confidence or in trust prior to Executive’s employment by the Company. Executive has not entered into, and shall not enter into, any agreement, arrangement or understanding, either written or oral, which is in conflict with this Employment Agreement or which would be violated by Executive entering into, or carrying out his obligations under, this Employment Agreement. This Employment Agreement supersedes any former oral agreement and any former written agreement heretofore executed relating generally to the employment of Executive with the Company, including without limitation, the Prior Agreement.

Section 20.02. Assignment; Binding Effect . This Employment Agreement may not be assigned by Executive in whole or in part. Notwithstanding the foregoing, this Employment Agreement shall inure to the benefit of and be enforceable by Executive’s personal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Employment Agreement to Executive’s estate.

Section 20.03. Headings . Headings used in this Employment Agreement are for convenience only and shall not be used to interpret or construe its provisions.

Section 20.04. Waiver . No provision of this Employment Agreement may be waived or discharged unless such waiver or discharge is agreed to in writing and signed by the Chairman of the Board. No waiver by either Party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Employment Agreement to be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

EXECUTIVE EMPLOYMENT AGREEMENT - 13

Section 20.05. Amendments . No amendments or variations of the terms and conditions of this Employment Agreement shall be valid unless the same is in writing and signed by the Parties hereto.

Section 20.06. Severability . The invalidity or unenforceability of any provision of this Employment Agreement, whether in whole or in part, shall not in any way affect the validity and/or enforceability of any other provision contained herein. Any invalid or unenforceable provision shall be deemed severable to the extent of any such invalidity or unenforceability. It is expressly understood and agreed that while the Company and Executive consider the restrictions contained in this Employment Agreement reasonable for the purpose of preserving for the Company the good will, other proprietary rights and intangible business value of the Company, if a final judicial determination is made by a court having jurisdiction that the time or territory or any other restriction contained in this Employment Agreement is an unreasonable or otherwise unenforceable restriction against Executive, the provisions of such clause shall not be rendered void but shall be deemed amended to apply as to maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable.

Section 20.07. Governing Law . This Employment Agreement shall be construed and enforced pursuant to the laws of the State of Idaho.

Section 20.08. Executive Officer Status . Executive acknowledges that he may be deemed to be an “executive officer” of the Company for purposes of the Securities Act of 1933, as amended (the “ 1933 Act ”), and the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”) and, if so, he shall comply in all respects with all the rules and regulations under the 1933 Act and the 1934 Act applicable to him in a timely and non-delinquent manner. In order to assist the Company in complying with its obligations under the 1933 Act and 1934 Act, Executive shall provide to the Company such information about Executive as the Company shall reasonably request including, but not limited to, information relating to personal history and stockholdings. Executive shall report to the Secretary of the Company or other designated officer of the Company all changes in beneficial ownership of any shares of the Company’s Common Stock deemed to be beneficially owned by Executive and/or any members of Executive's immediate family. Executive further agrees to comply with all requirements placed on him by the Sarbanes-Oxley Act of 2002, Public Law 107-204.

Section 20.09. Tax Withholding . To the extent required by law, the Company shall deduct or withhold from any payments under this Employment Agreement all applicable Federal, state or local income taxes, Social Security, FICA, FUTA and other amounts that the Company determines in good faith are required by law to be withheld.

Section 20.10. Counterparts . This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one document.

Section 20.11. Exhibits . Any Exhibits attached hereto are incorporated herein by reference and are an integral part of this Employment Agreement and are deemed incorporated herein by reference.

Section 20.12. Retention of Counsel . Executive acknowledges that he has had the opportunity to review this Employment Agreement and the transactions contemplated hereby with his own legal counsel.

[ The remainder of this page intentionally left blank ]

EXECUTIVE EMPLOYMENT AGREEMENT - 14

IN WITNESS WHEREOF , this Executive Employment Agreement has been duly executed by the Company and Executive as of the date first above written.

EXECUTIVE:

/s/Andrew Marshall

Andrew Marshall

COMPANY:

US Ecology, Inc.

By: /s/Jeffrey R. Feeler

Name: Jeffrey R. Feeler

Title: President and Chief Executive Officer

EXECUTIVE EMPLOYMENT AGREEMENT - 15

EXHIBIT 15

July 31, 2017

US Ecology, Inc.

251 E. Front St.

Boise, Idaho 83702

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of US Ecology, Inc. and subsidiaries for the three-month and six month periods ended June 30, 2017 and 2016, as indicated in our report dated July 31, 2017; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, is incorporated by reference in Registration Statement Nos. 333-157529, 333-68868, 333-93105, 333-140419, 333-69863 and 333-207811 on Form S-8, Registration Statement No. 333-211807 on Form S-3, and Registration Statement No. 333-187003 on Form S-4.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP

EXHIBIT 31.1

US ECOLOGY, INC.

CERTIFICATIONS PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Jeffrey R. Feeler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of US Ecology, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: July 31, 2017	/s/ Jeffrey R. Feeler
	Jeffrey R. Feeler
	President and Chief Executive Officer

EXHIBIT 31.2

US ECOLOGY, INC.

CERTIFICATIONS PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Eric L. Gerratt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of US Ecology, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: July 31, 2017	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of US Ecology, Inc., (the “Company”) for the quarterly period ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jeffrey R. Feeler and Eric L. Gerratt, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.


Date: July 31, 2017	/s/ Jeffrey R. Feeler
	Jeffrey R. Feeler
	President and Chief Executive Officer

	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer