US ECOLOGY, INC. (Form: 10-Q, Received: 05/06/2019 17:13:46)

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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 March 31, 2019

☐ 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)

101 S. Capitol Blvd., Suite 1000
Boise, Idaho		83702
(Address of principal executive offices)		(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ECOL	NASDAQ Global Select Market

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 every Interactive Data File required to be submitted 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 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 ☐

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 April 30, 2019, there were 22,089,018 shares of the registrant’s Common Stock outstanding.

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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 March 31, 2019 and December 31, 2018	3

	Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018	4

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018	5

	Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	6

	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2019 and 2018	7

	Notes to Consolidated Financial Statements	8

	Report of Independent Registered Public Accounting Firm	26

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
3.	Quantitative and Qualitative Disclosures About Market Risk	36
4.	Controls and Procedures	37

	PART II — OTHER INFORMATION

	Cautionary Statement	38
1.	Legal Proceedings	39
1A.	Risk Factors	39
2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
3.	Defaults Upon Senior Securities	40
4.	Mine Safety Disclosures	40
5.	Other Information	40
6.	Exhibits	40
	SIGNATURE	41

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value amount)


	March 31, 2019		December 31, 2018
Assets
Current Assets:
Cash and cash equivalents	$	16,120	$	31,969
Receivables, net		127,970		144,690
Prepaid expenses and other current assets		11,121		10,938
Income taxes receivable		8,559		7,071
Total current assets		163,770		194,668

Property and equipment, net		256,902		258,443
Operating lease assets		18,270		—
Restricted cash and investments		4,977		4,941
Intangible assets, net		277,263		279,666
Goodwill		210,126		207,177
Other assets		2,024		3,003
Total assets	$	933,332	$	947,898

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	16,408	$	17,754
Deferred revenue		10,441		10,451
Accrued liabilities		27,133		35,524
Accrued salaries and benefits		13,367		16,732
Income taxes payable		—		505
Short-term borrowings		2,118		—
Current portion of closure and post-closure obligations		2,214		2,266
Current portion of operating lease liabilities		5,358		—
Total current liabilities		77,039		83,232

Long-term debt		334,000		364,000
Long-term closure and post-closure obligations		76,842		76,097
Long-term operating lease liabilities		12,769		—
Other long-term liabilities		3,098		2,146
Deferred income taxes, net		66,092		63,206
Total liabilities		569,840		588,681

Commitments and contingencies

Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 22,089 and 22,040 shares issued, respectively		221		220
Additional paid-in capital		183,953		183,834
Retained earnings		193,397		189,324
Treasury stock, at cost, 22 and 8 shares, respectively		(1,286)		(370)
Accumulated other comprehensive loss		(12,793)		(13,791)
Total stockholders’ equity		363,492		359,217
Total liabilities and stockholders’ equity	$	933,332	$	947,898

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended March 31,
	2019		2018
Revenue	$	131,037	$	120,059
Direct operating costs		95,796		84,388
Gross profit		35,241		35,671
Selling, general and administrative expenses		20,305		22,232
Operating income		14,936		13,439
Other income (expense):
Interest income		207		24
Interest expense		(4,030)		(2,809)
Foreign currency loss		(139)		(14)
Other		110		2,123
Total other expense		(3,852)		(676)

Income before income taxes		11,084		12,763
Income tax expense		3,041		3,520
Net income	$	8,043	$	9,243

Earnings per share:
Basic	$	0.37	$	0.42
Diluted	$	0.36	$	0.42

Shares used in earnings per share calculation:
Basic		21,987		21,801
Diluted		22,197		21,957

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2019		2018
Net income	$	8,043	$	9,243
Other comprehensive income (loss):
Foreign currency translation gain (loss)		1,689		(1,871)
Net changes in interest rate hedge, net of taxes of ($184) and $425, respectively		(691)		1,595
Comprehensive income, net of tax	$	9,041	$	8,967

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2019		2018
Cash flows from operating activities:
Net income	$	8,043	$	9,243
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		8,125		6,605
Amortization of intangible assets		2,811		2,302
Accretion of closure and post-closure obligations		1,125		1,074
Property and equipment impairment charges		25		—
Unrealized foreign currency loss (gain)		(371)		654
Deferred income taxes		2,905		450
Share-based compensation expense		1,222		1,068
Unrecognized tax benefits		131		—
Net loss (gain) on disposition of assets		(272)		17
Gain on insurance proceeds from damaged property and equipment		(4,653)		—
Amortization of debt issuance costs		204		202
Changes in assets and liabilities:
Receivables		16,577		14,947
Income taxes receivable		(1,487)		(573)
Other assets		525		(792)
Accounts payable and accrued liabilities		(11,935)		(4,163)
Deferred revenue		(47)		301
Accrued salaries and benefits		(3,417)		(2,432)
Income taxes payable		(517)		215
Closure and post-closure obligations		(470)		(288)
Net cash provided by operating activities		18,524		28,830

Cash flows from investing activities:
Purchases of property and equipment		(7,223)		(7,558)
Insurance proceeds from damaged property and equipment		5,000		—
Proceeds from sale of property and equipment		459		42
Purchases of restricted investments		(23)		(498)
Proceeds from sale of restricted investments		—		417
Net cash used in investing activities		(1,787)		(7,597)

Cash flows from financing activities:
Payments on long-term debt		(30,000)		—
Payments on short-term borrowings		(4,331)		—
Proceeds from short-term borrowings		6,449		—
Dividends paid		(3,970)		(3,938)
Payment of equipment financing obligations		(199)		(108)
Proceeds from exercise of stock options		—		731
Other		(915)		(312)
Net cash used in financing activities		(32,966)		(3,627)

Effect of foreign exchange rate changes on cash		393		(488)

Increase (decrease) in Cash and cash equivalents and restricted cash		(15,836)		17,118
Cash and cash equivalents and restricted cash at beginning of period		32,753		28,799
Cash and cash equivalents and restricted cash at end of period	$	16,917	$	45,917

Reconciliation of Cash and cash equivalents and restricted cash
Cash and cash equivalents at beginning of period		31,969		27,042
Restricted cash at beginning of period		784		1,757
Cash and cash equivalents and restricted cash at beginning of period	$	32,753	$	28,799
Cash and cash equivalents at end of period		16,120		44,251
Restricted cash at end of period		797		1,666
Cash and cash equivalents and restricted cash at end of period	$	16,917	$	45,917
Supplemental Disclosures:
Income taxes paid, net of receipts	$	2,085	$	3,429
Interest paid	$	3,462	$	2,554
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	912	$	245
Restricted stock issued from treasury shares	$	—	$	11

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2019		2018
Total stockholders' equity, beginning balances	$	359,217	$	324,077

Common stock:
Beginning balances	$	220	$	218
Stock option exercises and issuance of common stock and restricted common stock		1		1
Ending balances	$	221	$	219

Additional paid-in capital:
Beginning balances	$	183,834	$	177,498
Share-based compensation		1,222		1,068
Stock option exercises and issuance of common stock and restricted common stock		(1,103)		285
Issuance of restricted common stock from treasury shares		—		(11)
Ending balances	$	183,953	$	178,840

Retained earnings:
Beginning balances	$	189,324	$	155,533
Net income		8,043		9,243
Dividend paid		(3,970)		(3,938)
Ending balances	$	193,397	$	160,838

Treasury stock:
Beginning balances	$	(370)	$	(68)
Repurchase of common stock		(916)		(313)
Issuance of restricted common stock from treasury shares		—		11
Ending balances	$	(1,286)	$	(370)

Accumulated other comprehensive income (loss):
Beginning balances	$	(13,791)	$	(9,104)
Other comprehensive income (loss)		998		(276)
Ending balances	$	(12,793)	$	(9,380)

Total stockholders' equity, ending balances	$	363,492	$	330,147

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

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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, 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2019.

The Company’s consolidated balance sheet as of December 31, 2018 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 August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” adopting amendments to certain disclosure rules that were redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, GAAP or changes in the information environment. In addition, the amendments expanded the disclosure requirements relating to the analysis of equity for interim financial statements. Under the amendments, an analysis of the changes in each caption of shareholders’ equity and noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis must present a reconciliation of the beginning balance to the ending balance of each period for which a statement of earnings is required to be filed. The final rule was effective on November 5, 2018. The Company adopted the final rule effective for the first quarter of 2019. The adoption of the final rule did not have an impact on the Company’s consolidated financial position or results of operations.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU amends the guidance in ASC 815 to better align an entity’s risk management activities and financial reporting for hedging relationships

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through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU 2017-12 on January 1, 2019 and the standard did not have a material impact on its consolidated financial statements.

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 Company adopted ASU 2016-02 on January 1, 2019 utilizing the modified retrospective transition method and elected not to recast comparative periods. We elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets.

Adoption of ASU 2016-02 resulted in the recognition of right-of-use assets and lease liabilities for operating leases of $18.1 million on its consolidated balance sheet as of March 31, 2019, with no material impact on its consolidated statement of stockholders’ equity or consolidated statements of operations. See Note 9 for additional information and disclosure on our leases.

NOTE 2. REVENUES

Our operations are managed in two reportable segments, Environmental Services and Field & Industrial Services, reflecting our internal reporting structure and nature of services offered. See Note 17 for additional information on our operating segments.

Effective December 31, 2018, we changed our presentation of disaggregated revenues to align with changes in how we manage our service lines within our Field & Industrial Services segment. Revenues previously combined and reported as Technical Services are now disaggregated into two service lines, Small Quantity Generation (“SQG”) and Total Waste Management (“TWM”) and certain revenues formerly classified as Technical Services are now included in Remediation. Also, marine terminal services revenues, formerly classified as Other, are now included in Industrial Services. Effective January 1, 2019, Emergency Response revenues, formerly classified as Other, are now presented as a discrete service line. We also conformed the allocation of intercompany revenues between Treatment & Disposal Revenue and Services Revenue to be consistent across both segments. Throughout this Quarterly Report on Form 10-Q, our disaggregated revenues for all periods presented have been recast to reflect these changes.

The following table presents our revenue disaggregated by our reportable segments and service lines:


	Three Months Ended March 31, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	77,713	$	2,796	$	80,509
Services Revenue:
Transportation and Logistics (2)		14,619		7,093		21,712
Industrial Services (3)		—		6,016		6,016
Small Quantity Generation (4)		—		8,189		8,189
Total Waste Management (5)		—		8,714		8,714
Remediation (6)		—		1,726		1,726
Emergency Response (7)		—		3,046		3,046
Other (8)		—		1,125		1,125
Revenue	$	92,332	$	38,705	$	131,037

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	Three Months Ended March 31, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	72,710	$	2,646	$	75,356
Services Revenue:
Transportation and Logistics (2)		13,761		5,651		19,412
Industrial Services (3)		—		3,879		3,879
Small Quantity Generation (4)		—		8,327		8,327
Total Waste Management (5)		—		10,222		10,222
Remediation (6)		—		2,190		2,190
Emergency Response (7)		—		642		642
Other (8)		—		31		31
Revenue	$	86,471	$	33,588	$	120,059

(1)

We categorize our treatment and disposal 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. For the three months ended March 31, 2019 and 2018, 16% and 17%, respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 84% and 83% of our treatment and disposal revenue for the three months ended March 31, 2019 and 2018, respectively.

(2)

Includes collection and transportation of non-hazardous and hazardous waste.

(3)

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

(4)

Includes retail services, laboratory packing, less-than-truck-load service and household hazardous waste collection. Contracts for Small Quantity Generation may extend beyond one year and a portion of the transaction price can be fixed.

(5)

Through our TWM program, customers outsource the management of their waste compliance program to us, allowing us to organize and coordinate their waste management disposal activities and environmental compliance. TWM c ontracts may extend beyond one year and a portion of the transaction price can be fixed.

(6)

Includes site assessment, onsite treatment, project management and remedial action planning and execution. Contracts for Remediation may extend beyond one year and a portion of the transaction price can be fixed.

(7)

Includes spill response, waste analysis and treatment and disposal planning.

(8)

Includes equipment rental and other miscellaneous services.

We provide services in the United States and Canada. The following table presents our revenue disaggregated by our reportable segments and geographic location where the underlying services were performed:


	Three Months Ended March 31, 2019						Three Months Ended March 31, 2018
			Field &						Field &
	Environmental		Industrial				Environmental		Industrial
$s in thousands	Services		Services		Total		Services		Services		Total
United States	$	77,359	$	38,705	$	116,064	$	74,986	$	33,588	$	108,574
Canada		14,973		—		14,973		11,485		—		11,485
Total revenue	$	92,332	$	38,705	$	131,037	$	86,471	$	33,588	$	120,059

Deferred Revenue

We record deferred revenue when cash payments are received, or advance billings are charged, prior to performance of services. Deferred revenue includes waste that has been received but not yet treated or disposed, and is recognized when services are performed. During the three months ended March 31, 2019 and 2018, we recognized $7.5 million and $6.3 million of revenue, respectively, that was included in the deferred revenue balance at the beginning of each year.

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Receivables

Our receivables include invoiced and unbilled amounts where the Company has an unconditional right to payment.

Principal versus Agent Considerations

The Company commonly contracts with third-parties to perform certain waste-related services that we have promised in our customer contracts. We consider ourselves the principal in these arrangements as we direct the timing, nature and pricing of the services ultimately provided by the third-party to the customer.

Costs to obtain a contract

The Company pays sales commissions to employees, which qualify as costs to obtain a contract. Sales commissions are expensed as incurred as the commissions are earned by the employee and paid by the Company over time as the related revenue is recognized.

Practical Expedients and Optional Exemptions

Our payment terms may vary based on type of service or customer; however, we do not adjust the promised amount of consideration in our contracts for the time value of money as payment terms extended to our customers do not exceed one year and are not considered a significant financing component in our contracts.

We do not disclose the value of unsatisfied performance obligations as contracts with an original expected length of more than one year and contracts for which we do not recognize revenue at the amount to which we have the right to invoice for services performed is insignificant and the aggregate amount of fixed consideration allocated to unsatisfied performance obligations is not material.

NOTE 3. BUSINESS COMBINATION

Ecoserv Industrial Disposal, LLC

On November 14, 2018, the Company acquired Ecoserv Industrial Disposal, LLC (“Winnie”), which provides non-hazardous industrial wastewater disposal solutions and employs deep-well injection technology in the southern United States.

The following table summarizes the consideration paid for Winnie and the fair value estimates of assets acquired and liabilities assumed, recognized at the acquisition date, with purchase price allocation adjustments since the preliminary purchase price allocation as previously disclosed as of December 31, 2018:


	Purchase Price Allocation
	December 31,				March 31,
$s in thousands	2018		Adjustments		2019
Current assets	$	1,923	$	(63)	$	1,860
Property and equipment		6,300		(2,324)		3,976
Identifiable intangible assets		66,600		(100)		66,500
Current liabilities		(755)		—		(755)
Other liabilities		(512)		—		(512)
Total identifiable net assets		73,556		(2,487)		71,069
Goodwill		13,573		2,586		16,159
Total purchase price	$	87,129	$	99	$	87,228

Purchase price allocation adjustments relate primarily to the receipt of additional information regarding the fair values of property and equipment, a post-closing price adjustment based on working capital requirements and residual goodwill.

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NOTE 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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


	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2018	$	(14,697)	$	906	$	(13,791)
Other comprehensive income (loss) before reclassifications, net of tax		1,689		(581)		1,108
Amounts reclassified out of AOCI, net of tax (1)		—		(110)		(110)
Other comprehensive income, net		1,689		(691)		998
Balance at March 31, 2019	$	(13,008)	$	215	$	(12,793)

(1)

Before-tax reclassifications of $ 139,000 ($110,000 after-tax) for the three months ended March 31, 2019, were included as a reduction of 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 as a reduction of interest expense over the next 12 months total approximately $ 557,000 ($440,000 after-tax).


	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2017	$	(8,603)	$	(501)	$	(9,104)
Other comprehensive income (loss) before reclassifications, net of tax		(1,871)		1,382		(489)
Amounts reclassified out of AOCI, net of tax (2)		—		213		213
Other comprehensive income, net		(1,871)		1,595		(276)
Balance at March 31, 2018	$	(10,474)	$	1,094	$	(9,380)

(2)

Before-tax reclassifications of $ 273,000 ($213,000 after-tax) for the three months ended March 31, 2018, 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.

NOTE 5. CONCENTRATIONS AND CREDIT RISK

Major Customers

No customer accounted for more than 10% of total revenue for the three months ended March 31, 2019 or 2018, respectively. No customer accounted for more than 10% of total trade receivables as of March 31, 2019 or December 31, 2018.

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.

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NOTE 6. RECEIVABLES

Receivables consisted of the following:


	March 31,		December 31,
$s in thousands	2019		2018
Trade	$	103,118	$	118,909
Unbilled revenue		21,848		26,538
Other		5,794		2,241
Total receivables		130,760		147,688
Allowance for doubtful accounts		(2,790)		(2,998)
Receivables, net	$	127,970	$	144,690

NOTE 7. 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 March 31, 2019, the carrying value of the Company’s variable-rate debt approximates fair value due to the short-term nature of the interest rates.

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


	March 31, 2019
	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)	$	1,569	$	2,611	$	—	$	4,180
Money market funds (2)		797		—		—		797
Interest rate swap agreement (3)		—		272		—		272
Total	$	2,366	$	2,883	$	—	$	5,249

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	December 31, 2018
	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)	$	1,561	$	2,596	$	—	$	4,157
Money market funds (2)		784		—		—		784
Interest rate swap agreement (3)		—		1,147				1,147
Total	$	2,345	$	3,743	$	—	$	6,088

(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. Money market funds are considered restricted cash for purposes of reconciling the beginning-of-period and end-of-period amounts presented in the Company’s consolidated statements of cash flows.

(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 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 assets in the Company’s consolidated balance sheet as of March 31, 2019 and December 31, 2018.

NOTE 8. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


	March 31,		December 31,
$s in thousands	2019		2018
Cell development costs	$	146,720	$	146,155
Land and improvements		51,580		50,481
Buildings and improvements		89,495		91,358
Railcars		17,299		17,299
Vehicles and other equipment		156,535		154,014
Construction in progress		18,415		14,554
Total property and equipment		480,044		473,861
Accumulated depreciation and amortization		(223,142)		(215,418)
Property and equipment, net	$	256,902	$	258,443

Depreciation and amortization expense for the three months ended March 31, 2019 and 2018 was $8.1 million and $6.6 million, respectively.

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NOTE 9. LEASES

We lease certain facilities, office space, land and equipment. Our lease payments are primarily fixed, but also include variable payments that are based on usage of the leased asset. Initial lease terms range from one to 15 years, and may include one or more options to renew, with renewal terms extending a lease up to 40 years. None of our renewal options are considered reasonably certain to be exercised. Provisions for residual value guarantees exist in some of our equipment leases, however amounts associated with these provisions are not material. Our leases do not include any material restrictive covenants.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense is recognized on a straight-line basis over the lease term. We combine lease and nonlease components in our leases, except for equipment leases that include maintenance related services. We use the rate implicit in the lease, when available, to discount lease payments to present value. However, many of our leases do not provide a readily determinable implicit rate and we estimate our incremental borrowing rate to discount payments based on information available at lease commencement.

Lease assets and liabilities consisted of the following:


$s in thousands	March 31, 2019
Assets:
Operating right-of-use assets (1)	$	18,270
Finance right-of-use assets (2)		3,277
Total	$	21,547

Liabilities:
Current:
Operating (3)	$	5,358
Finance (4)		859
Long-term:
Operating (5)		12,769
Finance (6)		2,460
Total	$	21,446

(1)

Included in Operating lease assets in the Company’s consolidated balance sheets.

(2)

Included in Property and equipment, net in the Company’s consolidated balance sheets. Finance right-of-use assets are recorded net of accumulated amortization of $1.3 million as of March 31, 2019.

(3)

Included in Current portion of operating lease liabilities in the Company’s consolidated balance sheets.

(4)

Included in Accrued liabilities in the Company’s consolidated balance sheets.

(5)

Included in Long-term operating lease liabilities in the Company’s consolidated balance sheets.

(6)

Included in Other long-term liabilities in the Company’s consolidated balance sheets.

Lease expense consisted of the following:


	Three Months Ended
$s in thousands	March 31, 2019
Operating lease cost (1)	$	1,742
Finance lease cost:
Amortization of leased assets (2)		228
Interest on lease liabilities (3)		20
Total	$	1,990

(1)

Included in Direct operating costs and Selling, general, and administrative expenses in the Company’s consolidated statements of operations. Operating lease cost includes short-term leases, excluding expenses relating to leases with a term of one month or less, which are not material. Operating lease cost excludes variable lease costs which are not material.

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(2)

Included in Direct operating costs in the Company’s consolidated statements of operations.

(3)

Included in Interest expense in the Company’s consolidated statements of operations.

Supplemental cash flow information related to our leases is as follows:


	Three Months Ended
$s in thousands	March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,615
Operating cash flows from finance leases		20
Financing cash flows from finance leases		199

Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,628
Right-of-use assets obtained in exchange for new finance lease liabilities		1,844

Other information related to our leases is as follows:


	March 31, 2019
Weighted-average remaining lease term (years):
Operating leases		5.6
Finance leases		3.9
Weighted-average discount rate:
Operating leases		4.37	%
Finance leases		3.64	%

The Company’s maturity analysis of its lease liabilities as of March 31, 2019 is as follows:


	Operating		Finance
$s in thousands	Leases		Leases		Total
2019 (excluding the three months ended March 31, 2019)	$	4,433	$	726	$	5,159
2020		3,936		792		4,728
2021		3,487		619		4,106
2022		2,199		548		2,747
2023		1,722		612		2,334
Thereafter		5,096		354		5,450
Total	$	20,873	$	3,651	$	24,524
Less: Interest		2,746		332		3,078
Present value of lease liabilities	$	18,127	$	3,319	$	21,446

Future minimum lease payments on non-cancellable operating leases as of December 31, 2018 are as follows:


$s in thousands	Payments
2019	$	5,638
2020		3,644
2021		3,184
2022		1,885
2023		1,457
Thereafter		5,065
	$	20,873

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NOTE 10. GOODWILL AND INTANGIBLE ASSETS

Changes in goodwill for the three months ended March 31, 2019 consisted of the following:


					Field &
	Environmental				Industrial
	Services				Services
			Accumulated				Accumulated
$s in thousands	Gross		Impairment		Gross		Impairment		Total
Balance at December 31, 2018	$	162,816	$	(6,870)	$	51,231	$	—	$	207,177
Winnie purchase price allocation adjustment		2,586		—		—		—		2,586
Foreign currency translation		363		—		—		—		363
Balance at March 31, 2019	$	165,765	$	(6,870)	$	51,231	$	—	$	210,126

Intangible assets, net consisted of the following:


	March 31, 2019						December 31, 2018
			Accumulated						Accumulated
$s in thousands	Cost		Amortization		Net		Cost		Amortization		Net
Amortizing intangible assets:
Permits, licenses and lease	$	165,184	$	(15,812)	$	149,372	$	164,840	$	(14,804)	$	150,036
Customer relationships		99,321		(27,284)		72,037		99,241		(25,676)		73,565
Technology - formulae and processes		6,816		(1,806)		5,010		6,672		(1,714)		4,958
Customer backlog		3,652		(1,748)		1,904		3,652		(1,656)		1,996
Developed software		2,889		(1,659)		1,230		2,884		(1,581)		1,303
Non-compete agreements		1,542		(975)		567		1,542		(875)		667
Internet domain and website		536		(135)		401		536		(128)		408
Database		386		(174)		212		384		(167)		217
Total amortizing intangible assets		280,326		(49,593)		230,733		279,751		(46,601)		233,150
Non-amortizing intangible assets:
Permits and licenses		46,403		—		46,403		46,391		—		46,391
Tradename		127		—		127		125		—		125
Total intangible assets	$	326,856	$	(49,593)	$	277,263	$	326,267	$	(46,601)	$	279,666

Amortization expense for the three months ended March 31, 2019 and 2018 was $2.8 million and $2.3 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation.

NOTE 11. DEBT

Long-term debt consisted of the following:


	March 31,		December 31,
$s in thousands	2019		2018
Revolving credit facility	$	334,000	$	364,000
Long-term debt	$	334,000	$	364,000

2017 Credit Agreement

On April 18, 2017, the Company entered into a senior secured credit agreement (the “2017 Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and 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 2017 Credit Agreement also contains an accordion feature whereby the Company may request up to $200.0 million of

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additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof.

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 2017 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 2017 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 March 31, 2019, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap, was 3.58%. 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 $165.0 million, or 49%, of the Revolving Credit Facility borrowings as of March 31, 2019.

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 2017 Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the 2017 Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At March 31, 2019, there were $334.0 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 2017 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.

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 Facility are not subject to repayment through the Sweep Arrangement. As of March 31, 2019, there were $2.1 million in borrowings outstanding subject to the Sweep Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.

As of March 31, 2019, the availability under the Revolving Credit Facility was $158.2 million with $5.7 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 2017 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 2017 Credit Agreement

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provides for mandatory prepayment at any time if the revolving credit outstanding exceeds the revolving credit commitment (as such terms are defined in the 2017 Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the 2017 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 2017 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 2017 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 2017 Credit Agreement), among other things, amounts outstanding under the 2017 Credit Agreement may be accelerated and the commitments may be terminated.

The 2017 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 2017 Credit Agreement). Our consolidated total net leverage ratio as of the last day of any fiscal quarter 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 may not be less than 3.00 to 1.00.

At March 31, 2019, we were in compliance with all of the financial covenants in the 2017 Credit Agreement.

NOTE 12. 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
$s in thousands	March 31, 2019
Closure and post-closure obligations, beginning of period	$	78,363
Accretion expense		1,125
Payments		(470)
Foreign currency translation		38
Closure and post-closure obligations, end of period		79,056
Less current portion		(2,214)
Long-term portion	$	76,842

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NOTE 13. INCOME TAXES

Our effective tax rate for the three months ended March 31, 2019 was 27.4%, down from 27.6% for the three months ended March 31, 2018. The decrease for the three months ended March 31, 2019, compared to the three months ended March 31, 2018, was primarily due to a higher discrete benefit from the recognition of excess tax benefits of share-based compensation and federal research and development credits, partially offset by effects of the international tax provisions from U.S. tax reform that became effective in 2018. For the three months ended March 31, 2019 and 2018, the Company recognized a discrete tax benefit related to the excess tax benefits from share-based compensation of $304,000 and $235,000, respectively.

Gross unrecognized tax benefits, included in Other long-term liabilities in the consolidated balance sheets, were $616,000 and $555,000 as of March 31, 2019 and December 31, 2018, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $544,000 to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. We do not anticipate our total unrecognized tax benefits to increase or decrease materially within the next twelve months. We recognize interest assessed by taxing authorities or interest associated with uncertain tax positions as a component of interest expense. We recognize any penalties assessed by taxing authorities or penalties associated with uncertain tax positions as a component of Selling, general and administrative expenses.

We file a consolidated U.S. federal income tax return with the Internal Revenue Service (“IRS”) as well as tax returns in various states, Canada, and Mexico. The Company is subject to examination by the IRS for tax years 2014 through 2018. The Company is currently under examination by the state of Idaho for years 2014 through 2018 and the state of Texas for the year 2014. We may be subject to examinations by various state and local taxing jurisdictions for tax years 2014 through 2018. The Company has no significant foreign jurisdiction audits underway. The tax years 2014 through 2018 remain subject to examination by foreign jurisdictions.

NOTE 14. EARNINGS PER SHARE


	Three Months Ended March 31,
	2019				2018
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	8,043	$	8,043	$	9,243	$	9,243
Weighted average basic shares outstanding		21,987		21,987		21,801		21,801

Dilutive effect of share-based awards				210				156
Weighted average diluted shares outstanding				22,197				21,957

Earnings per share	$	0.37	$	0.36	$	0.42	$	0.42
Anti-dilutive shares excluded from calculation				79				95

NOTE 15. 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 months ended March 31, 2019. On May 29, 2018 the repurchase program was extended and will remain in effect until June 6, 2020, unless further extended by our Board of Directors.

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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 the Company 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 share-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 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 March 31, 2019, 885,417 shares of common stock remain available for grant under the Omnibus Plan.

PSUs, RSUs and Restricted Stock

On March 1, 2019, the Company granted 17,111 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 300% 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, 2019, based on adjusted earnings per share and return on invested capital relative to established targets with an additional adjustment 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 $58.20 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 2019 are as follows:


	2019
Stock price on grant date	$	58.40
Expected term		3.0	years
Expected volatility		30	%
Risk-free interest rate		2.5	%
Expected dividend yield		1.1	%

A summary of our PSU, restricted stock and RSU activity for the three months ended March 31, 2019 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, 2018	39,200	$	55.48	74,988	$	46.74	66,785	$	53.77
Granted	17,111		58.20	20,000		63.85	33,020		56.21
Vested	(13,600)		41.22	(30,134)		39.14	(26,362)		48.28
Cancelled, expired or forfeited	—		—	—		—	(243)		45.66
Outstanding as of March 31, 2019	42,711	$	61.11	64,854	$	55.55	73,200	$	56.88

During the three months ended March 31, 2019, 13,600 PSUs vested and PSU holders earned 19,414 shares of the Company’s common stock.

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Stock Options

A summary of our stock option activity for the three months ended March 31, 2019 is as follows:


		Weighted
		Average
		Exercise
	Shares	Price
Outstanding as of December 31, 2018	236,503	$	44.93
Granted	36,600		63.85
Exercised	(2,643)		43.01
Cancelled, expired or forfeited	(1,540)		43.55
Outstanding as of March 31, 2019	268,920	$	47.53
Exercisable as of March 31, 2019	192,359	$	43.82

During the three months ended March 31, 2019, option holders tendered 1,862 options in connection with options exercised via net share settlement.

Treasury Stock

During the three months ended March 31, 2019, the Company repurchased 14,462 shares of the Company’s common stock in connection with the net share settlement of employee equity awards at an average cost of $63.34 per share.

Dividends

The Company paid dividends of $0.18 per common share during each of the three months ended March 31, 2019 and 2018.

NOTE 16. 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 our 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.

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. We resumed limited operations at our Grand View, Idaho facility in February 2019. In addition to initiating and conducting our own investigation into the incident, we are fully cooperating with Idaho Department of Environmental Quality (“IDEQ”), the U.S. Environmental Protection Agency (“USEPA”) and the Occupational Safety and Health Administration (“OSHA”) to support their comprehensive and independent investigations of the incident. As we continue to investigate the cause of the incident, we are evaluating its impact, but, at this time, we are unable to predict the timing and outcome of the investigation. As such, we cannot presently estimate the potential liability, if any, related to the incident and, therefore, no amounts related to such claims have been recorded in our financial statements as of March 31, 2019. We have not been named as a defendant in any action relating to the incident. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the

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explosion, in excess of our deductibles, are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses.

The Company received $5.0 million of property-related insurance payments in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The Company recognized $4.7 million of property-related insurance recovery gains in the first quarter of 2019. Although the Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims, as of March 31, 2019, the Company has neither received nor recognized any business interruption insurance recoveries related to the loss of business, profits or customers.

Other than as described above, 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 17. 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, non-hazardous and radioactive waste at Company-owned landfill, wastewater, deep-well injection 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 field services such as industrial cleaning and maintenance, remediation, lab packs, retail services, transportation, 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.

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Summarized financial information of our reportable segments is as follows:


	Three Months Ended March 31, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	92,332	$	38,705	$	—	$	131,037
Depreciation, amortization and accretion	$	9,625	$	2,132	$	304	$	12,061
Capital expenditures	$	6,712	$	178	$	333	$	7,223
Total assets	$	703,453	$	161,299	$	68,580	$	933,332


	Three Months Ended March 31, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	86,471	$	33,588	$	—	$	120,059
Depreciation, amortization and accretion	$	8,510	$	1,355	$	116	$	9,981
Capital expenditures	$	6,004	$	1,038	$	516	$	7,558
Total assets	$	595,304	$	124,184	$	81,597	$	801,085

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

Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash property and equipment impairment charges, property insurance recoveries 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.

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


	Three Months Ended March 31,
$s in thousands	2019		2018
Net income	$	8,043	$	9,243
Income tax expense		3,041		3,520
Interest expense		4,030		2,809
Interest income		(207)		(24)
Foreign currency loss		139		14
Other income		(110)		(2,123)
Property and equipment impairment charges		25		—
Depreciation and amortization of plant and equipment		8,125		6,605
Amortization of intangible assets		2,811		2,302
Share-based compensation		1,222		1,068
Accretion and non-cash adjustment of closure & post-closure liabilities		1,125		1,074
Property insurance recoveries		(4,653)		—
Adjusted EBITDA	$	23,591	$	24,488

Adjusted EBITDA, by operating segment, is as follows:


	Three Months Ended March 31,
$s in thousands	2019		2018
Adjusted EBITDA:
Environmental Services	$	35,260	$	34,672
Field & Industrial Services		2,554		2,345
Corporate		(14,223)		(12,529)
Total	$	23,591	$	24,488

Property and Equipment and Intangible Assets Outside of the United States

We provide services in the United States and Canada. Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows:


	March 31,		December 31,
$s in thousands	2019		2018
United States	$	475,703	$	480,322
Canada		58,462		57,787
Total long-lived assets	$	534,165	$	538,109

NOTE 18. SUBSEQUENT EVENTS

Quarterly Dividend

On April 1, 2019, we declared a quarterly dividend of $0.18 per common share to stockholders of record on April 19, 2019. The dividend was paid using cash on hand on April 26, 2019 in an aggregate amount of $4.0 million.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of US Ecology, Inc.

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of US Ecology, Inc. and subsidiaries (the “Company”) as of March 31, 2019, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for the three-month periods ended March 31, 2019 and 2018, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying 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) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2018, 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 28, 2019, 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, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. 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 PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Boise, Idaho

May 6, 2019

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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 transport, recycle, treat and dispose of waste and 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.

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The composition of Environmental Services segment T&D revenues by waste generator industry for the three months ended March 31, 2019 and 2018 were as follows:


	% of Treatment and Disposal Revenue (1) for the
	Three Months Ended March 31,
Generator Industry	2019	2018
Metal Manufacturing	16%	14%
Chemical Manufacturing	15%	13%
Broker / TSDF	15%	13%
General Manufacturing	13%	12%
Refining	10%	11%
Government	7%	5%
Transportation	4%	3%
Utilities	3%	4%
Waste Management & Remediation	2%	4%
Mining, Exploration and Production	2%	2%
Other (2)	13%	19%

(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.

Base Business consists of waste streams from ongoing industrial activities and tends to be recurring in nature. 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. The duration of Event Business projects can last from a several-week cleanup of a contaminated site to a multiple year cleanup project.

For the three months ended March 31, 2019, Base Business revenue increased 8% compared to the three months ended March 31, 2018. For the three months ended March 31, 2019, approximately 84% of our total T&D revenue was derived from our Base Business, up from 83% for the three months ended March 31, 2018. Our business is highly competitive and no assurance can be given that we will maintain these revenue levels or increase our market share.

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 March 31, 2019, approximately 16% of our total T&D revenue was derived from Event Business projects, down from 17% for the three months ended March 31, 2018. For the three months ended March 31, 2019, Event Business revenue decreased 1% compared to the three months ended March 31, 2018. 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 also cause significant quarter-to-quarter and year-to-year differences in revenue, gross profit, gross margin, operating income and net income. While we pursue many projects months or years in advance of work performance, 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.

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

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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 bundled service strategy further drive 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 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.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2019 COMPARED TO THREE MONTHS ENDED MARCH 31, 2018

Operating results and percentage of revenues were as follows:


	Three Months Ended March 31,								2019 vs. 2018
$s in thousands	2019		%		2018		%		$ Change		% Change
Revenue
Environmental Services	$	92,332	70	%	$	86,471	72	%	$	5,861	7	%
Field & Industrial Services		38,705	30	%		33,588	28	%		5,117	15	%
Total		131,037	100	%		120,059	100	%		10,978	9	%
Gross Profit
Environmental Services		31,556	34	%		32,452	38	%		(896)	(3)	%
Field & Industrial Services		3,685	10	%		3,219	10	%		466	14	%
Total		35,241	27	%		35,671	30	%		(430)	(1)	%
Selling, General & Administrative Expenses
Environmental Services		1,406	2	%		6,376	7	%		(4,970)	(78)	%
Field & Industrial Services		3,385	9	%		2,257	7	%		1,128	50	%
Corporate		15,514	n/m			13,599	n/m			1,915	14	%
Total		20,305	15	%		22,232	19	%		(1,927)	(9)	%
Adjusted EBITDA
Environmental Services		35,260	38	%		34,672	40	%		588	2	%
Field & Industrial Services		2,554	7	%		2,345	7	%		209	9	%
Corporate		(14,223)	n/m			(12,529)	n/m			(1,694)	14	%
Total	$	23,591	18	%	$	24,488	20	%	$	(897)	(4)	%

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


	Three Months Ended March 31,				2019 vs. 2018
$s in thousands	2019		2018		$ Change		% Change
Net income	$	8,043	$	9,243	$	(1,200)	(13)	%
Income tax expense		3,041		3,520		(479)	(14)	%
Interest expense		4,030		2,809		1,221	43	%
Interest income		(207)		(24)		(183)	763	%
Foreign currency loss		139		14		125	893	%
Other income		(110)		(2,123)		2,013	(95)	%
Property and equipment impairment charges		25		—		25	n/m
Depreciation and amortization of plant and equipment		8,125		6,605		1,520	23	%
Amortization of intangible assets		2,811		2,302		509	22	%
Share-based compensation		1,222		1,068		154	14	%
Accretion and non-cash adjustment of closure & post-closure liabilities		1,125		1,074		51	5	%
Property insurance recoveries		(4,653)		—		(4,653)	n/m
Adjusted EBITDA	$	23,591	$	24,488	$	(897)	(4)	%

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 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

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Revenue

Total revenue increased 9% to $131.0 million for the first quarter of 2019 compared with $120.1 million for the first quarter of 2018.

Environmental Services

Environmental Services segment revenue increased 7% to $92.3 million for the first quarter of 2019, compared to $86.5 million for the first quarter of 2018. T&D revenue increased 7% compared to the first quarter of 2018, primarily as a result of an 8% increase in Base Business revenue, partially offset by a 1% decrease in project-based Event Business revenue. Transportation service revenue increased 6% compared to the first quarter of 2018, 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 27% for the first quarter of 2019 compared to the first quarter of 2018, primarily reflecting incremental volumes disposed at our Winnie, Texas deep-well facility that was acquired in the fourth quarter of 2018. Tons of waste disposed of or processed at our landfills decreased 1% for the first quarter of 2019 compared to the first quarter of 2018.

T&D revenue from recurring Base Business waste generators increased 8% for the first quarter of 2019 compared to the first quarter of 2018 and comprised 84% of total T&D revenue for the first quarter of 2019. During the first quarter of 2019, increases in Base Business T&D revenue were primarily attributable to the metal manufacturing and broker/TSDF industry groups.

T&D revenue from Event Business waste generators decreased 1% for the first quarter of 2019 compared to the first quarter of 2018 and comprised 16% of total T&D revenue for the first quarter of 2019. During the first quarter of 2019, decreases in Event Business T&D revenue from the “Other” and waste management & remediation industry groups were partially offset by an increase in Event Business T&D revenue from the chemical manufacturing and government 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 quarter of 2019 as compared to the first quarter of 2018:


		Treatment and Disposal Revenue Growth
		Three Months Ended March 31, 2019 vs.
		Three Months Ended March 31, 2018
Transportation		58%
Government		30%
Chemical Manufacturing		23%
Metal Manufacturing		17%
Broker / TSDF		17%
Mining, Exploration & Production		13%
General Manufacturing		5%
Utilities		-1%
Refining		-8%
Other		-19%
Waste Management & Remediation		-50%

Field & Industrial Services

Field & Industrial Services segment revenue increased 15% to $38.7 million for the first quarter of 2019 compared with $33.6 million for the first quarter of 2018. The increase in Field & Industrial Services segment revenue is primarily attributable to growth in our Emergency Response business line as a result of our acquisition of ES&H of Dallas, LLC (“ES&H Dallas”) in the third quarter of 2018 as well as growth in our Industrial Services and Transportation and Logistics business lines, partially offset by lower revenues from our Total Waste Management business line.

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Gross Profit

Total gross profit decreased 1% to $35.2 million for the first quarter of 2019, down from $35.7 million for the first quarter of 2018. Total gross margin was 27% for the first quarter of 2019 compared with 30% for the first quarter of 2018.

Environmental Services

Environmental Services segment gross profit decreased 3% to $31.6 million for the first quarter of 2019, down from $32.5 million for the first quarter of 2018. Total segment gross margin for the first quarter of 2019 was 34% compared with 38% for the first quarter of 2018, primarily reflecting a less favorable service mix in segment transportation revenue. T&D gross margin was 39% for both the first quarter of 2019 and the first quarter of 2018.

Field & Industrial Services

Field & Industrial Services segment gross profit increased 14% to $3.7 million for the first quarter of 2019, up from $3.2 million for the first quarter of 2018. Total segment gross margin was 10% for both the first quarter of 2019 and the first quarter of 2018.

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

Total SG&A was $20.3 million, or 15% of total revenue, for the first quarter of 2019, down from $22.2 million, or 19% of total revenue, for the first quarter of 2018.

Environmental Services

Environmental Services segment SG&A decreased 78% to $1.4 million, or 2% of segment revenue, for the first quarter of 2019 compared with $6.4 million, or 7% of segment revenue, for the first quarter of 2018, primarily reflecting property insurance recoveries of $4.7 million recognized in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018.

Field & Industrial Services

Field & Industrial Services segment SG&A increased 50% to $3.4 million, or 9% of segment revenue, for the first quarter of 2019 compared with $2.3 million, or 7% of segment revenue, for the first quarter of 2018, primarily reflecting incremental costs associated with new facilities.

Corporate

Corporate SG&A was $15.5 million, or 12% of total revenue, for the first quarter of 2019 compared with $13.6 million, or 11% of total revenue, for the first quarter of 2018, primarily reflecting higher employee labor costs and higher information technology related expenses in the first quarter of 2019 compared with the first quarter of 2018.

Components of Adjusted EBITDA

Income tax expense

Our effective income tax rate for the first quarter of 2019 was 27.4%, compared with 27.6% for the first quarter of 2018. The decrease in the effective tax rate was primarily due to a higher discrete benefit from the recognition of excess tax benefits of share-based compensation and federal research and development credits, partially offset by effects of the international tax provisions from U.S. tax reform that became effective in 2018.

Interest expense

Interest expense was $4.0 million for the first quarter of 2019 compared with $2.8 million for the first quarter of 2018.

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The increase is the result of higher outstanding debt levels in the first quarter of 2019 due to the acquisition of Ecoserv Industrial Disposal, LLC (“Winnie”) in November of 2018, as well as higher interest rates on the variable portion of our outstanding debt.

Foreign currency gain (loss)

We recognized a $139,000 foreign currency loss for the first quarter of 2019 compared with a $14,000 foreign currency loss for the first quarter of 2018. 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 March 31, 2019, we had $17.9 million of intercompany loans subject to currency revaluation.

Other income

Other income was $110,000 for the first quarter of 2019 compared with other income of $2.1 million for the first quarter of 2018. Other income for the first quarter of 2018 includes a $2.0 million gain on the issuance of a property easement on a portion of unutilized Company-owned land at one of our operating facilities.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense was $8.1 million for the first quarter of 2019 compared with $6.6 million for the first quarter of 2018, primarily reflecting additional depreciation expense on assets associated with ES&H Dallas and Winnie that were acquired in the third and fourth quarter of 2018, respectively.

Amortization of intangible assets

Intangible assets amortization expense was $2.8 million for the first quarter of 2019 compared with $2.3 million for the first quarter of 2018, primarily reflecting additional amortization of intangible assets recorded as a result of the ES&H Dallas and Winnie acquisitions in the third and fourth quarter of 2018, respectively.

Share-based compensation

Share-based compensation expense was $1.2 million for the first quarter of 2019 compared with $1.1 million for the first quarter 2018.

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 first quarter of both 2019 and 2018.

Property insurance recoveries

The Company recognized property-related insurance recoveries of $4.7 million in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018.

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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, 2018, other than the adoption of the Accounting Standards Codification Topic 842, Leases , described in Note 1 and Note 9 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

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 (Unaudited)” of this Quarterly Report on Form 10-Q.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the 2017 Credit Agreement entered into on April 18, 2017. At March 31, 2019, we had $16.1 million in cash and cash equivalents immediately available and $158.2 million of borrowing capacity available under the 2017 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 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 the 2017 Credit Agreement provide additional sources of liquidity should they be required.

Operating Activities

For the three months ended March 31, 2019, net cash provided by operating activities was $18.5 million. This primarily reflects net income of $8.0 million, non-cash depreciation, amortization and accretion of $12.1 million, a decrease in accounts receivable of $16.6 million and deferred incomes taxes of $2.9 million, partially offset by a decrease in accounts payable and accrued liabilities of $11.9 million, a $4.7 million gain on insurance proceeds from damaged property and equipment, a decrease in accrued salaries and benefits of $3.4 million and an increase in income taxes receivable of $1.5 million. 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 of customer payments. Changes in deferred income taxes are primarily attributable to deferred tax gains resulting from involuntary conversions related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The decrease in accounts payable and accrued liabilities is primarily attributable to the timing of payments to vendors for products and services. We recognized property-related insurance recoveries in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The decrease in accrued salaries and benefits is primarily attributable to cash payments during the first quarter of 2019 for accrued 2018 incentive compensation. The increase in income taxes receivable is primarily attributable to the timing of income tax payments.

Days sales outstanding were 81 days as of March 31, 2019, compared to 77 days as of December 31, 2018 and 76 days as of March 31, 2018.

For the three months ended March 31, 2018, net cash provided by operating activities was $28.8 million. This primarily reflects net income of $9.2 million, non-cash depreciation, amortization and accretion of $10.0 million and a decrease in accounts receivable of $14.9 million, partially offset by a decrease in accounts payable and accrued liabilities of $4.2 million and a decrease in accrued salaries and benefits of $2.4 million. 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 of customer payments. The decrease in accounts payable and accrued liabilities is primarily attributable to the timing of payments to vendors for products and services. The decrease in accrued salaries and benefits is primarily attributable to cash payments during the first quarter of 2018 for accrued 2017 incentive compensation.

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Investing Activities

For the three months ended March 31, 2019, net cash used in investing activities was $1.8 million, primarily related to capital expenditures of $7.2 million, partially offset by property insurance proceeds of $5.0 million related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. Significant capital projects included construction of additional disposal capacity at our Blainville, Quebec, Canada and our Robstown, Texas facilities as well as equipment purchases and infrastructure upgrades at our corporate and operating facilities.

For the three months ended March 31, 2018, net cash used in investing activities was $7.6 million, primarily related to capital expenditures. Significant capital projects included continuing construction of additional disposal capacity and railway expansion at our Blainville, Quebec, Canada location and equipment purchases and infrastructure upgrades at our corporate and operating facilities.

Financing Activities

For the three months ended March 31, 2019, net cash used in financing activities was $33.0 million, consisting primarily of $30.0 million in payments on our revolving credit facility, dividend payments to our stockholders of $4.0 million and net short-term borrowings under our sweep arrangement of $2.1 million.

For the three months ended March 31, 2018, net cash used in financing activities was $3.6 million, consisting primarily of dividend payments to our stockholders.

2017 Credit Agreement

The 2017 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 2017 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 2017 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 2017 Credit Agreement).

At March 31, 2019, the effective interest rate on the Revolving Credit Facility, including the impact of our interest rate swap, was 3.58%. 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 $165.0 million, or 49%, of the Revolving Credit Facility borrowings as of March 31, 2019.

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 2017 Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the 2017 Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At March 31, 2019, there were $334.0 million of borrowings outstanding on the Revolving Credit Facility. These borrowings are due on the revolving credit maturity date (as defined in the 2017 Credit Agreement) and presented as long-term debt in the consolidated balance sheets.

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Company’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of March 31, 2019, there were $2.1 million in borrowings outstanding subject to the Sweep Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.

As of March 31, 2019, the availability under the Revolving Credit Facility was $158.2 million with $5.7 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.

For more information about our debt, see Note 11 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

There were no material changes in the amounts of our contractual obligations and guarantees during the three months ended March 31, 2019. 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, 2018.

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 March 31, 2019, $5.0 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 2017 Credit Agreement. Under the 2017 Credit Agreement, Revolving Credit Facility borrowings incur interest at a base rate (as defined in the 2017 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 2017 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. Under the terms of the swap, the Company pays interest at the fixed effective rate of 3.67% and receives interest at the variable one-month LIBOR rate on an initial notional amount of $250.0 million.

As of March 31, 2019, there were $334.0 million of revolving loans outstanding under the 2017 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 2017 Credit Agreement.

Based on the outstanding indebtedness of $334.0 million under the 2017 Credit Agreement at March 31, 2019 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 $1.8 million 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 three months ended March 31, 2019, our Canadian subsidiaries transacted approximately 59% 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.

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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 March 31, 2019, we had $17.9 million of intercompany loans outstanding between our Canadian subsidiaries and US Ecology. During the three months ended March 31, 2019, the CAD strengthened as compared to the USD resulting in a $417,000 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 March 31, 2019, a $0.01 CAD increase or decrease in currency rate compared to the USD at March 31, 2019 would have generated a gain or loss of approximately $179,000 for the three months ended March 31, 2019.

We had a total pre-tax foreign currency loss of $139,000 for the three months ended March 31, 2019. 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 March 31, 2019. 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.

SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessment of internal control over financial reporting for a period not to exceed one year from the date of acquisition. Accordingly, we have assessed neither ES&H Dallas’ nor Winnie’s internal control over financial reporting as of March 31, 2019.

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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 an accident at one of our facilities, incidents resulting from the handling of dangerous substances, the loss or failure to renew significant contracts, competition in our markets, adverse economic conditions, our compliance with applicable laws and regulations, the realization of anticipated benefits from acquired operations, our ability to perform under required contracts, limitations on our available cash flow as a result of our indebtedness, liabilities arising from our participation in multi-employer pension plans, cyber security threats, unanticipated changes in tax rules and regulations, loss of key personnel, a deterioration in our labor relations or labor disputes, our ability to pay dividends or repurchase stock, anti-takeover regulations, stock market volatility, our access to insurance, surety bonds and other financial assurances, our litigation risk not covered by insurance, the replacement of non-recurring event projects, our ability to permit and contract for timely construction of new or expanded disposal space, renewals of our operating permits or lease agreements with regulatory bodies, our ability or the timing of reconstructing and receiving regulatory approvals for the reopening of the Grand View, Idaho treatment facility, the timing or amount of insurance recoveries associated with the reconstruction and business interruption losses for the Grand View, Idaho treatment facility, our access to cost-effective transportation services, lawsuits, our implementation of new technologies, fluctuations in foreign currency markets and foreign affairs.

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, 2018 and in other reports we file with the SEC 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.

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ITEM 1. LEGAL PROCEEDINGS

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. We resumed limited operations at our Grand View, Idaho facility in February 2019. In addition to initiating and conducting our own investigation into the incident, we are fully cooperating with IDEQ, the USEPA and OSHA to support their comprehensive and independent investigations of the incident. As we continue to investigate the cause of the incident, we are evaluating its impact, but, at this time, we are unable to predict the timing and outcome of the investigation. As such, we cannot presently estimate the potential liability, if any, related to the incident and, therefore, no amounts related to such claims have been recorded in our financial statements as of March 31, 2019. We have not been named as a defendant in any action relating to the incident. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion, in excess of our deductibles, are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses.

Other than described above, 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.

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, 2018 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 months ended March 31, 2019. On May 29, 2018 the repurchase program was extended and will remain in effect until June 6, 2020, unless further extended by our Board of Directors.

The following table summarizes the purchases of shares of our common stock during the three months ended March 31, 2019:


				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, 2019 (1)	14,462	$	63.34	—	$	25,000,000
February 1 to 28, 2019	—		—	—		25,000,000
March 1 to 31, 2019	—		—	—		25,000,000
Total	14,462	$	63.34	—	$	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 and performance stock units.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


10.1		US Ecology, Inc. 2019 Management Incentive Plan *

10.2		Form of Performance Stock Unit Award Agreement *

10.3		Form of Restricted Stock Award Agreement *

10.4		Form of Incentive Stock Option Award Agreement *

10.5		Form of Non-Statutory Stock Option Award Agreement *

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 March 31, 2019 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.

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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: May 6, 2019	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 10.1

US ECOLOGY, INC.

2019 Management Incentive Plan

PURPOSE

The US Ecology, Inc. Omnibus Incentive Plan (“ Omnibus Plan ”) authorizes the Compensation Committee (“ Committee ”) of the Board of Directors (“ Board ”) of US Ecology, Inc. (“ Company ”) to grant performance-based awards denominated in cash in such amounts and subject to such terms and conditions as the Compensation Committee may determine. The US Ecology, Inc. 2019 Management Incentive Plan (“ Plan ”) provides a variable component of compensation for certain employees for achievement of objectives set by the Committee during calendar year 2019 (“ Plan Year ”). The Plan is designed to align the interests of employees with those of stockholders and attract, motivate and retain key employees critical to the long-term success of the Company.

II.

ADMINISTRATION

The administrator of the Plan shall be the Committee; hereinafter referred to as “Administrator”. The Administrator shall have full power, discretion and authority to, among other things, interpret the Plan, verify all amounts paid under the Plan, and establish rules and procedures for its administration, as deemed necessary and appropriate. The Administrator may rely on opinions, reports or statements of the Company’s officers, public accountants and other professionals. The calculation of any amounts to be paid under the Plan shall be performed by the Company’s Chief Financial Officer and submitted by the Chief Executive Officer (“ CEO ”) to the Administrator for approval. Any interpretation of the Plan or act of the Administrator, or its designee, in administering the Plan, shall be final and binding.

No member of the Board shall be liable for any action, interpretation or construction made in good faith with respect to the Plan. The Company shall indemnify, to the fullest extent permitted by law, each member of its Board who may become liable in any civil action or proceeding with respect to decisions made relating to the Plan.

III.

ELIGIBILITY

Eligibility to participate in the Plan is limited to designated key employees of the Company (each a “ Participant ”) as approved by the CEO and shall be evidenced by a letter from the CEO (“ Participant Letter ”).

To be eligible to receive an award under the Plan, a Participant must have been employed by the Company (i) on a full-time basis during the Plan Year and (ii) on the date of any payment under the Plan, except as otherwise provided for in this Plan or when such requirement is waived by the CEO.

New Hire/Rehire — A Participant whose employment with the Company began during the Plan Year shall be eligible for an award on a pro-rata basis, provided the CEO has approved participation and other conditions of the Plan are satisfied. An award will be pro-rated based upon the number of calendar days the Participant was employed in an eligible position during the Plan Year. In the case of rehires, there shall be no credit for prior service, unless otherwise approved in writing by the CEO.

Leave of Absence — Provided other requirements of the Plan are satisfied; (i) a Participant who is absent from full-time employment with the Company under an unpaid leave of absence shall be eligible for a pro-rated award, calculated by excluding the days for which the Participant is absent under such unpaid leave; and (ii) a Participant who is absent from full-time employment with the Company for

more than thirteen (13) consecutive weeks of the Plan Year under a paid leave of absence shall be eligible for a pro-rated award, calculated by including the number of days worked in the Plan Year and the thirteen (13) weeks of paid leave.

Promotion — If a Participant is promoted to an eligible position or from one eligible position to another eligible position (with a higher award potential) during the Plan Year, a pro-rated award will be calculated by factoring the number of calendar days in each eligible position and considering the Target Incentive, Plan Objectives, metrics and weights applicable during the Participant’s tenure in each position.

Demotion – If a Participant is demoted from an eligible position during the Plan Year, such Participant shall be deemed ineligible for receipt of any payments under the Plan, unless otherwise approved in writing by the CEO.

Removal from Plan — A Participant may be removed from the Plan or an award adjusted, including elimination of any right to an award under the Plan, for insubordination, misconduct, malfeasance, or any formal disciplinary action taken by the Company during the Plan Year or prior to payment.

IV.

INCENTIVE AWARD

The Administrator shall establish the objectives (each a “ Plan Objective ”) that must be achieved for a Participant to receive payment of all or a portion of his/her target incentive amount, which amount is the product of the Participant’s annual salary and an established percentage (“ Target Incentive ”), established by the CEO.

Payments under the Plan, if any, shall be made to a Participant upon certification by the CEO that such payments are authorized and all applicable criteria have been satisfied. Payments shall be made as soon as practicable after approval and availability of the Company’s final audited Plan Year financial statements, but in any event will be made by March 31, 2020.

PLAN OBJECTIVES

Plan Objectives fall into one of four categories: a) Financial (60% of Target Incentive) , b) Individual Performance ( 20% of Target Incentive ), c) Health and Safety (10% of Target Incentive) , and d) Compliance (10% of Target Incentive) . Plan Objectives are independent and mutually exclusive from each other, so that the applicable percentage of the Target Incentive may be earned if one Plan Objective is met, even if the threshold performance is not met for another Plan Objective.

Financial – The Financial Plan Objective is based on the Plan Year’s actual consolidated operating income before Plan expenses. The target amount is set and approved by the Administrator (“ Operating Income Target ”). Achievement will be determined by comparing the Plan Year’s actual financial results (based on audited financial information) to the Operating Income Target. Achievement of the Operating Income Target will be weighted at 60% of a Participant’s Target Incentive.

The Administrator, in its sole discretion, may include or exclude certain non-recurring or special transactions from calculated operating income for purposes of determining the amount of an award under the Plan.

The portion of a Participant’s Target Incentive he or she may receive based on operating income results (“ Finance Target Incentive ”) is scalable. Upon achieving 85% of the Operating Income Target the earned Finance Target Incentive shall be 50%. For every percentage point achievement over 85% of the

Operating Income Target, up to and including 100%, a Participant shall earn an additional 3.33% of the Finance Target Incentive. Upon 100% achievement of the Operating Income Target, 100% of the Finance Target Incentive shall be available to a Participant.

If the Operating Income Target is exceeded, a Participant shall be eligible for an additional amount, calculated by multiplying the Participant’s Target Incentive by 10% for every 1% increase over the Operating Income Target (“ Additional Finance Incentive ”). The Additional Finance Incentive is capped at one times the Participant’s Target Incentive, and will be reached at 110% of the Operating Income Target.

By way of example only , a Participant with an annual base salary of $100,000 who has a Target Incentive of 20% would receive the following amounts based on various levels of achievement.

EXAMPLE


CONSOLIDATED OPERATING INCOME TARGET
(WEIGHTED 60% OF TARGET INCENTIVE)
Achievement	% of Award	Cumulative	Payout	Achievement	% of Award	Cumulative	Payout
				92%	3.33%	73.33%	$8,800
84%	0%	0%	$0	93%	3.33%	76.67%	$9,200
85%	0.00%	50.00%	$6,000	94%	3.33%	80.00%	$9,600
86%	3.33%	53.33%	$6,400	95%	3.33%	83.33%	$10,000
87%	3.33%	56.67%	$6,800	96%	3.33%	86.67%	$10,400
88%	3.33%	60.00%	$7,200	97%	3.33%	90.00%	$10,800
89%	3.33%	63.33%	$7,600	98%	3.33%	93.33%	$11,200
90%	3.33%	66.67%	$8,000	99%	3.33%	96.67%	$11,600
91%	3.33%	70.00%	$8,400	100%	3.33%	100.00%	$12,000

Assuming 95% achievement of the Operating Income Target, the Participant in this example would be entitled to $10,000, calculated as follows:

	OPERATING INCOME
	TARGET
Annual Salary	$100,000
Target Incentive	X 20%
Target Incentive Award	$20,000
Financial Objective Weight	X 60%
Weighted Target Incentive Award	$12,000
Cumulative Award Percent Earned	X 83.33%
Earned Award	$10,000

Assuming instead a 105% achievement of the Operating Income Target, the Participant would be entitled to $22,000, calculated as follows:

	OPERATING INCOME
	TARGET
Annual Salary	$100,000
Target Incentive	X 20%
Target Incentive Award	$20,000
Financial Objective Weight	X 60%
Weighted Target Incentive Award	$12,000
Cumulative Award Percent Earned	X 100.00%
Earned Award	$12,000


	ADDITIONAL FINANCE INCENTIVE
Target Incentive	$20,000
Cumulative Excess Percentage (10% X 5)	X 50%
Additional Finance Incentive Award	$10,000

Finance Target Incentive	$12,000
Additional Finance Incentive	$10,000
Earned Award	$22,000

Assuming instead a 145% achievement of the Operating Income Target, the Participant would be entitled to an Additional Finance Incentive of $20,000 and a total earned amount of $32,000, calculated as follows:


	ADDITIONAL FINANCE INCENTIVE
Target Incentive	$20,000
Cumulative Excess Percentage (10% X 45)	X 450%
Additional Finance Incentive Award	$90,000
Additional Finance Incentive Award Cap (0.20 x $100,000)	($20,000)
Excess Additional Finance Incentive Award Disallowed	$70,000

Finance Target Incentive	$12,000
Additional Finance Incentive	$20,000
Earned Award	$32,000

Individual Performance - Up to an additional 20% of a Participant’s Target Incentive shall be awarded, at the sole discretion of the Administrator (“ Individual Performance Incentive ”) based on 1) achieving established objectives that align with the Company’s strategic priorities, 2) overall individual performance level, and 3) how the participant leads including living our shared values and promoting the Humble, Hungry and Smart virtues. This metric is independent so that a percentage of the Individual Performance Incentive may be earned independent and mutually exclusive of achievement of any other Plan Objective.

Health and Safety - The metrics for this Plan Objective are identified below and are weighted cumulatively at 10% of a Participant’s Target Incentive. Each metric is independent and mutually exclusive from the other metrics so that a percentage of the Target Incentive related to Health and Safety may be earned independent of achievement of any other Health and Safety metric or other Plan Objective.

Total Recordable Incident Rate (“ TRIR ”) (2% Weight) – The Target Incentive related to TRIR shall be earned if the Company-wide metric, as set and approved by the Administrator, is achieved as determined by the Administrator.

ii.

Days Away Restricted Time (“ DART ”) (3% Weight) – The Target Incentive related to DART shall be earned if the Company-wide metric, as set and approved by the Administrator, is achieved as determined by the Administrator.

iii.

Lost Time Incident (“ LTI ”) (5% Weight) - The Target Incentive related to LTI shall be earned if the Company-wide metric, as set and approved by the Administrator, is achieved as determined by the Administrator.

Compliance – The metric for this Plan Objective is the Company’s avoidance of Notices of Violation or Enforcement with monetary penalties during the Plan Year and is weighted at 10% of a Participant’s Target Incentive. The Target Incentive related to Compliance (“ Compliance Target Incentive ”) shall be earned based on a determination by the Administrator, taking into consideration, among other things, the dollar amount of a monetary penalty paid (or accrued under generally accepted accounting principles – “ GAAP ”) in the Plan Year, severity of the Notices of Violation or Enforcement, regulatory basis for penalty and respective fact patterns. This metric is independent so that a percentage of the Compliance Target Incentive may be earned independent and mutually exclusive of achievement of any other Plan Objective.

The CEO will include in each Participant Letter the applicable Target Incentive, Plan Objectives, metrics, weights and such other information as may be determined.

VI.

MISCELLANEOUS

Interests Not Transferable – Any interest of a Participant under the Plan may not be voluntarily sold, transferred, alienated, assigned or encumbered, other than by will or pursuant to the laws of descent and distribution. Notwithstanding the foregoing, if a Participant dies during the Plan Year, or after the Plan Year and prior to payment of an award, then a pro-rata portion of the award to which the Participant would have been eligible absent death shall be paid to the deceased’s beneficiary, as designated in writing by such Participant (attached hereto as Exhibit A ); provided however, that if the

deceased Participant has not designated a beneficiary then such amount shall be payable to the deceased Participant’s estate. Payment shall be based on the number of calendar days the Participant was employed in an eligible position during the Plan Year and shall be made at the time other Participants are paid. The requirement that the Participant be an employee on that date of payment shall be waived.

Withholding Taxes – The Company shall withhold from any amounts payable under the Plan applicable withholding including, but not limited to, federal, state, city and local taxes, FICA and Medicare as shall be legally required. Additionally, the Company will withhold from any amounts payable under the Plan the applicable contribution for the Participant’s 401(k) Savings and Retirement Plan as defined in the US Ecology, Inc. 401(K) Plan description protected under ERISA.

No Right of Employment – Nothing in this Plan will be construed as creating any contract of employment or conferring upon any Participant any right to continue in the employ or other service of the Company or limit in any way the right of Company to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause.

No Representations – The Company does not represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will result from participation in the Plan.

Section Headings – The section headings contained herein are for convenience only and, in the event of any conflict, the text of the Plan, rather than the section headings, will control.

Severability – In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

Invalidity – If any term or provision contained herein is to any extent invalid or unenforceable, such term or provision shall be reformed so that it is valid, and such invalidity or unenforceability shall not affect any other provision or part hereof.

Amendment, Modification or Termination – The Administrator reserves the right to unilaterally amend, modify or terminate the Plan at any time as it deems necessary or advisable.

Applicable Law – Except to the extent superseded by the laws of the United States, the laws of the State of Idaho, without regard to its conflicts of laws principles, shall govern in all matters relating to the Plan.

Effect on Other Plans – Payments or benefits provided to a Participant under any stock, deferred compensation, savings, retirements or other employee benefit plan are governed solely by the terms of each of such plans.

Effective Date – The Plan is effective as of January 1, 2019

EXHIBIT A

BENEFICIARY DESIGNATION

I hereby designate the following person or persons as Beneficiary to receive any management incentive payments due under the attached US Ecology, Inc. 2019 Management Incentive Plan, effective January 1, 2019, in the event of my death, reserving the full right to revoke or modify this designation, or any modification thereof, at any time by a further written designation:

Primary Beneficiary



Name of Individual	Relationship to me	Birth Date (if minor)



Address



Name of Trust		Date of Trust

Provided, however, that if such Primary Beneficiary shall not survive me by at least sixty (60) days, the following shall be the Beneficiary:

Contingent Beneficiary



Name of Individual	Relationship to me	Birth Date (if minor)



Address



Name of Trust		Date of Trust

This Beneficiary Designation shall not affect any other beneficiary designation form that I may have on file with US Ecology, Inc. regarding benefits other than that referred to above.



Date


Name


Signature

EXHIBIT 10.2

US Ecology, Inc.

Performance Stock Unit Agreement

This Performance Stock Unit Agreement (" Agreement ") is made and entered into effective ____________ (" Grant Date ") by and between US Ecology, Inc., a Delaware corporation (" Company "), and _____________ (the " Grantee ").

WHEREAS , the Company has adopted the US Ecology, Inc. Omnibus Incentive Plan (" Plan ") pursuant to which Performance Stock Units may be granted; and

WHEREAS , the Committee has determined that it is in the best interests of the Company and its stockholders to grant the award of Performance Stock Units provided for herein.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Grant of Performance Stock Units . Pursuant to Section 6.6 of the Plan, the Company hereby grants to the Grantee an Award for a target number of ___________ Performance Stock Units (" Target Award "). Each Performance Stock Unit (" PSU ") represents the right to receive, on the settlement date, one Share, subject to the achievement of the applicable Performance Goals (defined below) and all other terms and conditions set forth in this Agreement and the Plan. The number of PSUs that the Grantee actually earns for the Performance Period (up to a maximum of ____________) will be determined by the level of achievement of the Performance Goals in accordance with Section 3. Capitalized terms that are used but not defined herein have the meanings ascribed to them in the Plan.

2. Performance Period . For purposes of this Agreement, the Performance Period shall be the period commencing on January 1, 2019 and ending on December 31, 2021.

3. Performance Goals .

3.1 Subject to the Grantee’s continued employment with the Company through the last day of the Performance Period (except as provided below), (i) 50% of the Target Award may be earned based on the cumulative sum of the Company’s Adjusted Earnings Per Share (“ AEPS ”) calculated annually over the Performance Period and (ii) 50% of the Target Award may be earned based on the average of the Company’s Return on Invested Capital (“ ROIC ”) over the Performance Period (collectively “ Performance Goals ”); the targets and payout scales of which are set forth on Exhibits 1 and 2, respectively.

3.2 After the payout under the PSUs is determined according to Section 3.1 , the number of shares to be provided is subject to modification (“ TSR Modifier ”) based on the percentage change in the price of common stock (“ TSR ”) of the Company from January 1, 2019 to December 31, 2021 relative to the TSR of certain companies in the environmental and facilities industry during such period as set forth on Exhibit 3 (“ TSR Peer Group ”). Based on the percentage of the TSR Peer Group companies whose TSR the Company exceeded during the Performance Period (“ TSR Ranking ”), the payout will be modified as follows:


TSR Ranking	Percentage of Modification of PSU Payout
< 25 th Percentile	-50%
25 th to 75 th Percentile	0%
>75 th Percentile	+50%

TSR will be calculated assuming that dividends paid during the Performance Period by a member of the TSR Peer Group are immediately reinvested in shares of the company paying such dividend. TSR as of any date will be calculated based on the average closing price of the common stock of each member of the TSR Peer Group for the 20 consecutive trading days immediately preceding such date. Any company whose stock ceases to be publicly traded or whose TSR cannot otherwise be determined, in each case, for any reason shall be removed from the TSR Peer Group and any calculations made hereunder shall be revised to reflect the removal of such company. All determinations as to whether the applicable Performance Goals have been achieved and at what levels, the number of PSUs earned by the Grantee, and all other matters related to this Section ‎ 3 shall be made by the Committee in its sole discretion.

3.3 Any PSUs earned for the Performance Period shall be settled in accordance with the Plan within 30 days after the expiration or earlier termination of the Performance Period .

4. Termination of Service . Unless otherwise provided in an effective employment, consulting, severance or similar agreement with the Company or a Subsidiary, or as otherwise may be determined by the Committee, (i) upon the Grantee’s termination of employment with the Company (A) at any time, due to the Grantee’s death or Disability

or (B) within 24 months following a Change in Control, by the Company or a Subsidiary without Cause or by the Grantee for Good Reason, the unvested portion of the PSUs shall vest in full (with the applicable Performance Goals being deemed to have been achieved at target or, if greater, actual levels), the Performance Period shall terminate and the PSUs shall be settled in accordance with Section 3.3 and (ii) upon the Grantee’s termination of employment with the Company for any other reason, the unvested portion of the PSUs shall be forfeited with no compensation due the Grantee .

5. Transferability . Except as permitted by the Committee in accordance with Section 13 of the Plan, no PSU or other right or interest of the Grantee hereunder shall be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of the Grantee to, any party, other than the Company or any Subsidiary, or assigned or transferred by the Grantee otherwise than by will or the laws of descent and distribution, and all rights hereunder shall be exercisable during the lifetime of the Grantee only by the Grantee or his or her guardian or legal representative.

6. Stockholder Rights . Nothing contained in this Agreement shall be construed to give the Grantee any rights as a stockholder with respect to any Shares underlying the PSUs (including, without limitation, any voting, dividend or derivative or other similar rights) unless and until such Shares are issued to the Grantee upon the settlement of the PSUs.

7. No Right to Continued Service . Neither the Plan nor this Agreement shall be construed as giving the Grantee any right to be retained in the employ or service of the Company or any Subsidiary .

8. Taxes . The Grantee must make appropriate arrangements for the payment of any taxes relating to the PSUs granted hereunder. The Company is authorized to withhold from any payment relating to the PSUs, including from a distribution of Shares or any payroll or other payment to the Grantee, amounts of withholding and other taxes due in connection with the PSUs, and to take such other action as the Committee may deem advisable to enable the Company and the Grantee to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the PSUs. This authority shall include the ability to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of the Grantee's tax obligations and to require the Grantee to enter into elections in respect of taxes. Withholding of taxes in the form of Shares shall not occur at a rate that exceeds the minimum required statutory federal and state withholding rates. If the Grantee is subject to the reporting requirements of Section 16 of the Exchange Act, the Grantee shall have the right to pay all or a portion of any withholding or other taxes due in connection with the PSUs by directing the Company to withhold Shares that would otherwise be received in connection with the PSUs up to the minimum required withholding amount.

9. Compliance with Securities Law .

9.1 No Shares may be issued hereunder if the Company shall at any time determine that to do so would (i) violate the listing requirements of an applicable securities exchange, or adversely affect the registration or qualification of the Company's Shares under any state or federal law or regulation, or (ii) require the consent or approval of any regulatory body or the satisfaction of withholding tax or other withholding liabilities. In any of the events referred to in clause (i) or clause (ii) above, the issuance of such Shares shall be suspended and shall not be effective unless and until such withholding, listing, registration, qualifications or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole discretion, notwithstanding any termination of the Award or any portion of the Award during the period when issuance has been suspended.

9.2 The Committee may require, as a condition to the issuance of Shares hereunder, representations, warranties and agreements to the effect that such Shares are being purchased or acquired by the Grantee for investment only and without any present intention to sell or otherwise distribute such Shares and that the Grantee will not dispose of such Shares in transactions which, in the opinion of counsel to the Company, would violate the registration provisions of the Securities Act and the rules and regulations thereunder.

10. Governing Law . To the extent that Federal laws do not otherwise control, the validity and construction of this Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to the choice of law principles thereof .

11. Recoupment . This Award shall be subject to mandatory repayment by the Grantee to the Company pursuant to the terms of any applicable Company "clawback" or recoupment policy.

12. PSUs Subject to Plan . This Agreement is subject to the Plan as approved by the Company's stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

13. Successors and Assigns . The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee's beneficiaries, executors, administrators and the person(s) to whom the PSUs may be transferred by will or the laws of descent or distribution .

14. Amendment . The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, this Agreement; provided, however, that without the consent of the Grantee, no such amendment, alteration, suspension, discontinuation, or termination of this Agreement may materially and adversely affect the rights of the Grantee under this Agreement, except insofar as any such action is necessary to ensure the Agreement’s compliance with applicable law or regulation or the listing requirements of an applicable securities exchange, including, without limitation, Code Section 409A.

15. Section 409A . This Agreement is intended to comply with, or be exempt from, Code Section 409A and all regulations, guidance, compliance programs and other interpretative authority thereunder, and all provisions of this Agreement shall be applied and interpreted in a manner consistent therewith. Notwithstanding anything contained herein to the contrary, in the event the Award is subject to Code Section 409A, the Committee may, in its sole discretion and without the Grantee’s prior consent, amend this Agreement or take any other actions as deemed appropriate by the Committee to (i) exempt this Agreement from the application of Code Section 409A, (ii) preserve the intended tax treatment of the Award or (iii) comply with the requirements of Code Section 409A. In the event that the Grantee is a "specified employee" within the meaning of Code Section 409A, and a payment or benefit provided for under this Agreement would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6) months after the Grantee’s separation from service (within the meaning of Code Section 409A), then such payment or benefit shall not be paid (or commence) during the six (6) month period immediately following the Grantee’s separation from service except as provided in the immediately following sentence. In such an event, any payments or benefits that would otherwise have been made or provided during such six (6) month period and which would have incurred such additional tax under Code Section 409A shall instead be paid to the Grantee in a lump-sum cash payment, without interest, on the earlier of (a) the first business day of the seventh month following the Grantee's separation from service or (b) the tenth business day following the Grantee’s death. Notwithstanding the foregoing, none of the Company, its Affiliates or their respective directors, officers, employees or advisors will be held liable for any taxes, interest or other amounts owed by the Grantee as a result of the application of Code Section 409A.

16. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

17. Acceptance . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions hereof and

thereof, and accepts the PSUs subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the vesting or settlement of the PSUs or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such vesting, settlement or disposition.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written.


	US ECOLOGY, INC.
	By: _____________________ Name: Title:
	*
	By: _____________________

Exhibit 1

[AEPS]

	Payout Scale

	AEPS	% Earned	AEPS	% Earned
Threshold 	$ 7.32	50%	$ 7.59	104%
	$ 7.33	52%	$ 7.60	107%
	$ 7.34	54%	$ 7.61	111%
	$ 7.35	56%	$ 7.62	115%
	$ 7.36	57%	$ 7.63	118%
	$ 7.37	59%	$ 7.64	122%
	$ 7.38	61%	$ 7.65	126%
	$ 7.39	63%	$ 7.66	129%
	$ 7.40	65%	$ 7.67	133%
	$ 7.41	67%	$ 7.68	137%
	$ 7.42	68%	$ 7.69	141%
	$ 7.43	70%	$ 7.70	144%
	$ 7.44	72%	$ 7.71	148%
	$ 7.45	74%	$ 7.72	152%
	$ 7.46	76%	$ 7.73	155%
	$ 7.47	78%	$ 7.74	159%
	$ 7.48	80%	$ 7.75	163%
	$ 7.49	81%	$ 7.76	167%
	$ 7.50	83%	$ 7.77	170%
	$ 7.51	85%	$ 7.78	174%
	$ 7.52	87%	$ 7.79	178%
	$ 7.53	89%	$ 7.80	181%
	$ 7.54	91%	$ 7.81	185%
	$ 7.55	92%	$ 7.82	189%
	$ 7.56	94%	$ 7.83	192%
	$ 7.57	96%	$ 7.84	196%
Target 	$ 7.58	100%	$ 7.85	200%	 Superior

EXHIBIT 2

[ROIC]

	Payout Scale

	ROIC	LTI	ROIC	LTI	ROIC		LTI	ROIC	LTI
	9.99%	0%	10.60%	70%	11.30%		93%	12.00%	150%
Threshold 	10.00%	50%	10.70%	73%	11.40%		97%	12.10%	160%
	10.10%	53%	10.80%	77%	11.50%	100%		12.20%	170%
	10.20%	57%	10.90%	80%	11.60%	↑ ↑ ↑ ↑ ↑	110%	12.30%	180%
	10.30%	60%	11.00%	83%	11.70%		120%	12.40%	190%
	10.40%	63%	11.10%	87%	11.80%		130%	12.50%	200%	 Superior
	10.50%	67%	11.20%	90%	11.90%		140%
						Target

Exhibit 3

[Peer Group]

Aegion Corporation

Casella Waste Systems, Inc.

CECO Environmental Corp.

Clean Harbors, Inc.

Covanta Holding Corp.

Ecology and Environment, Inc.

Heritage-Crystal Clean, Inc.

Matrix Service Company

North America Construction Group Ltd.

10.

NV5 Global, Inc.

11.

Perma-Fix Environmental Services, Inc.

12.

Secure Energy Services, Inc.

13.

Stericycle, Inc.

14.

Team, Inc.

15.

Tervita Corporation

16.

TETRA Technologies, Inc.

17.

Tetra Tech, Inc.

Exhibit 10.3

US ECOLOGY, INC.

RESTRICTED SHARE AGREEMENT

THIS RESTRICTED SHARE AGREEMENT is entered into as of _________ (the “ Grant Date ”), between US Ecology, Inc., a Delaware corporation (the “ Company ”), and ________ (the “ Grantee ”).

WHEREAS, the Company has adopted the US Ecology, Inc. Omnibus Incentive Plan (the “ Plan ”) pursuant to which Restricted Shares may be granted; and

WHEREAS, the Compensation Committee of the Company’s Board of Directors (the “ Committee ”) has determined that it is in the best interests of the Company and its stockholders to grant the award of Restricted Shares provided for herein.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Grant of Restricted Shares.

Pursuant to Section 6.5 of the Plan, the Company hereby grants to the Grantee an Award of Restricted Shares (the “ Award ”). The Restricted Shares granted pursuant to the Award shall be administered by the Company or its designated agent and shall be subject to the execution and return of this Agreement by the Grantee (or the Grantee’s estate, if applicable) to the Company as provided in Section 5 hereof. Capitalized terms that are used but not defined herein have the meanings ascribed to them in the Plan.

2. Restrictions on Transfer.

Except as permitted by the Committee in accordance with Section 13 of the Plan, no Restricted Share or other right or interest of the Grantee hereunder shall be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of the Grantee to, any party, other than the Company or any Subsidiary, or assigned or transferred by the Grantee otherwise than by will or the laws of descent and distribution, and all rights hereunder shall be exercisable during the lifetime of the Grantee only by the Grantee or his or her guardian or legal representative.

3. Lapse of Restrictions Generally.

Except as provided in Section 4 hereof, the Restricted Shares granted hereunder shall vest as follows:

of the Restricted Shares shall vest on January 1, 2020;

of the Restricted Shares shall vest on January 1, 2021; and

of the Restricted Shares shall vest on January 1, 2022.

In each case, the Restricted Shares shall be settled as soon as reasonably practicable, and in no event more than thirty (30) days following the vesting date.

4. Effect of Certain Terminations of Employment.

If the Grantee’s employment is terminated at any time (i) due to the Grantee’s death or Disability; or (ii) within eighteen (18) months following a Change in Control, by the Company or a Subsidiary without Cause or by the Grantee for Good Reason, all Restricted Shares which have not vested in accordance with Section 3 shall vest as of the date of such termination and shall be settled as soon as reasonably practicable thereafter, and in no event more than thirty (30) days following the vesting date. Upon the Grantee’s termination of employment for any other reason, the unvested portion of the Restricted Shares shall be forfeited with no compensation due to the Grantee.

5. Execution of Award Agreement.

The Restricted Shares granted to the Grantee pursuant to the Award shall be subject to the Grantee’s execution and return of this Agreement to the Company or its designee (including by electronic means, if so provided) no later than the earlier of (i) April 2, 2019; and (ii) the date that is immediately prior to the date that the Restricted Shares vest pursuant to Section 3 or 4 hereof (the “ Grantee Return Date ”); provided that if the Grantee dies before the Grantee Return Date, this requirement shall be deemed to be satisfied if the executor or administrator of the Grantee’s estate executes and returns this Agreement to the Company or its designee no later than ninety (90) days following the Grantee’s death (the “ Executor Return Date ”). If this Agreement is not so executed and returned on or prior to the Grantee Return Date or the Executor Return Date, as applicable, the Restricted Shares evidenced by this Agreement shall be forfeited, and neither the Grantee nor the Grantee’s heirs, executors, administrators and successors shall have any rights with respect thereto.

6. Delivery of Restricted Shares.

The Company may settle vested Restricted Shares by providing the Grantee with either evidence of book entry Shares or stock certificates with respect to such vested Restricted Shares, with the form of settlement to be determined by the Company in its sole discretion.

7. Stockholder Rights.

The Grantee shall have all rights as a stockholder with respect to any Restricted Shares (including, without limitation, any voting, dividend or derivative or other similar rights).

8. No Right to Continued Service.

Neither the Plan nor this Agreement shall be construed as giving the Grantee any right to be retained in the employ or service of the Company or any Subsidiary.

9. Withholding of Taxes.

The Grantee must make appropriate arrangements for the payment of any taxes relating to the Restricted Shares granted hereunder. The Company is authorized to withhold from any payment relating to the Restricted Shares, including from a distribution of Shares or any payroll or other payment to the Grantee, amounts of withholding and other taxes due in connection with the Restricted Shares, and to take such other action as the Committee may deem advisable to enable the Company and the Grantee to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the Restricted Shares. This authority shall include the ability to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of the Grantee's tax obligations and to require the Grantee to enter into elections in respect of taxes. Withholding of taxes in the form of Shares shall not occur at a rate that exceeds the minimum required statutory federal and state withholding rates. If the Grantee is subject to the reporting requirements of Section 16 of the Exchange Act, the Grantee shall have the right to pay all or a portion of any withholding or other taxes due in connection with the Restricted Shares by directing the Company to withhold Shares that would otherwise be received in connection with the Restricted Shares up to the minimum required withholding amount.

10. Compliance with Securities Law.

10.1 No Shares may be issued hereunder if the Company shall at any time determine that to do so would (i) violate the listing requirements of an applicable securities exchange, or adversely affect the registration or qualification of the Company's Shares under any state or federal law or regulation, or (ii) require the consent or approval of any regulatory body or the satisfaction of withholding tax or other withholding liabilities. In any of the events referred to in clause (i) or

clause (ii) above, the issuance of such Shares shall be suspended and shall not be effective unless and until such withholding, listing, registration, qualifications or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole discretion, notwithstanding any termination of the Award or any portion of the Award during the period when issuance has been suspended.

10.2 The Committee may require, as a condition to the issuance of Shares hereunder, representations, warranties and agreements to the effect that such Shares are being purchased or acquired by the Grantee for investment only and without any present intention to sell or otherwise distribute such Shares and that the Grantee will not dispose of such Shares in transactions which, in the opinion of counsel to the Company, would violate the registration provisions of the Securities Act and the rules and regulations thereunder.

11. Amendment.

The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, this Agreement; provided, however, that without the consent of the Grantee, no such amendment, alteration, suspension, discontinuation, or termination of this Agreement may materially and adversely affect the rights of the Grantee under this Agreement, except insofar as any such action is necessary to ensure the Agreement’s compliance with applicable law or regulation or the listing requirements of an applicable securities exchange, including, without limitation, Code Section 409A.

12. Severability.

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

13. Governing Law.

To the extent that Federal laws do not otherwise control, the validity and construction of this shall be construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to the choice of law principles thereof.

14. Recoupment.

This Award shall be subject to mandatory repayment by the Grantee to the Company pursuant to the terms of any applicable Company "clawback" or recoupment policy.

15. Restricted Shares Subject to Plan.

This Agreement is subject to the Plan as approved by the Company's stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

16. Successors and Assigns.

The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee's beneficiaries, executors, administrators and the person(s) to whom the Restricted Shares may be transferred by will or the laws of descent or distribution.

17. Section 409A.

This Agreement is intended to comply with, or be exempt from, Code Section 409A and all regulations, guidance, compliance programs and other interpretative authority thereunder, and all provisions of this Agreement shall be applied and interpreted in a manner consistent therewith. Notwithstanding anything contained herein to the contrary, in the event the Award is subject to Code Section 409A, the Committee may, in its sole discretion and without the Grantee’s prior consent, amend this Agreement or take any other actions as deemed appropriate by the Committee to (i) exempt this Agreement from the application of Code Section 409A, (ii) preserve the intended tax treatment of the Award or (iii) comply with the requirements of Code Section 409A. In the event that the Grantee is a "specified employee" within the meaning of Code Section 409A, and a payment or benefit provided for under this Agreement would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6) months after the Grantee’s separation from service (within the meaning of Code Section 409A), then such payment or benefit shall not be paid (or commence) during the six (6) month period immediately following the Grantee’s separation from service except as provided in the immediately following sentence. In such an event, any payments or benefits that would otherwise have been made or provided during such six (6) month period and which would have incurred such additional tax under Code Section 409A shall instead be paid to the Grantee in a lump-sum cash payment, without interest, on the earlier of (i) the first business day of the seventh month following the Grantee's separation from service or (ii) the tenth business day following the Grantee’s death. Notwithstanding the foregoing, none of the Company, its Affiliates or their respective directors, officers, employees or advisors will be held liable for any taxes, interest or other amounts owed by the Grantee as a result of the application of Code Section 409A. Each payment payable hereunder shall be treated as a separate payment in a series of payments within the meaning of, and for purposes of, Code Section 409A.

18. Resolution of Disputes.

Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Grantee, the Grantee’s heirs, executors, administrators and successors, and the Company for all purposes.

19. Entire Agreement.

This Agreement and the applicable terms and conditions of the Plan constitute the entire understanding between the Grantee and the Company, and supersede all other agreements, whether written or oral, with respect to the Award. In the event of a conflict between this Agreement and the Plan, this Agreement shall govern.

20. Headings.

The headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

21. Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

22. Acceptance.

The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions hereof and thereof, and accepts the Restricted Shares subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the vesting, settlement or disposition of the Restricted Shares and that the Grantee has been advised to consult a tax advisor prior to such vesting, settlement or disposition.

IN WITNESS WHEREOF, this Agreement has been executed effective January 2, 2019 .


	US ECOLOGY, INC.


	By:	Jeffrey R. Feeler

	Its:	President and Chief Executive Officer


	GRANTEE


	Name:
	Address:
	TaxID#:

EXHIBIT 10.4

US ECOLOGY, INC.

FORM OF INCENTIVE STOCK OPTION AGREEMENT

Effective ____________ (the “Effective Date”), US Ecology, Inc., a Delaware corporation (the “Company”) hereby grants to ___________ (the “Optionee”), an Incentive Stock Option (the “ISO”) to purchase from the Company, at a price of $______ per share, ______ shares of the Company’s authorized and unissued common stock, $0.01 par value per share (the “Common Stock”) subject, however, to the following terms and conditions.

1. Incentive Stock Option . This stock option is designated as an Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). If, during one taxable year, this stock option and any other Incentive Stock Options granted to you by the Company or its subsidiaries vests for Common Stock with an aggregate fair market value in excess of $100,000, then the stock option, as to the excess, shall be treated as a non-statutory stock option that does not meet the requirements of Section 422 of the Code. If and to the extent that the stock option fails to qualify as an Incentive Stock Option under the Code, the stock option shall remain outstanding according to its terms as a non-statutory stock option.

2. Stock Option Plan . This Stock Option Agreement (the “Agreement”) and the stock option granted herein are made and accepted pursuant to and in accordance with the Company’s 2015 Omnibus Incentive Plan (the “Plan”). The terms and provisions of the Plan, and any amendments thereto, are incorporated herein by reference. Unless specifically set forth herein, in the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan will prevail. Unless otherwise stated, all capitalized terms used herein shall have the meanings set forth in the Plan.

3. Term and Vesting . The stock option granted herein shall vest and become exercisable as follows, provided the Optionee remains employed by the Company or its subsidiaries through each applicable vesting date:

 0 of the stock options shall vest on January 1, 2020;

 _____ of the stock options shall vest on January 1, 2021; and

 _____ of the stock options shall vest on January 1, 2022.

Subject to the terms of the Plan and your continued employment with the Company or any of its subsidiaries, your stock option will remain exercisable until the tenth anniversary of the Effective Date (the “ Expiration Date ”) or January 1, 2029. Upon the date of termination of your employment with the Company and its subsidiaries (a “ Termination Date ”), your stock option shall remain exercisable (the “ Exercise Period ”) only in accordance with the following provisions:

(a) Upon the termination of your employment with the Company or any of its subsidiaries, other than as a result of your death or total disability, any vested portion of your stock option shall remain exercisable until the earlier of (i) thirty (30) days after your Termination Date or (ii) the Expiration Date.

(b) Upon termination of your employment by the Company without cause or by you for good reason, unvested stock options shall continue to vest according to your employment agreement in effect on the date of termination or, if one does not exist, for the shorter of a period of one year or the original expiration date of such options.

(c) Upon the termination of your employment with the Company and its subsidiaries by reason of your death or total disability, any vested portion of your stock option shall remain exercisable until the earlier of: (i) twelve (12) months after your Termination Date or (ii) the Expiration Date.

Any vested and exercisable portion of your stock option that is not so exercised within the applicable Exercise Period shall be forfeited with no further compensation due to you. Additionally, unless otherwise provided by the Compensation Committee, any portion of your stock option that is not vested or exercisable as of your Termination Date shall be immediately forfeited on such date with no further compensation due to you.

4. Limitation Upon Transfer . The stock option granted herein (a) shall be nonassignable and nontransferable by the Optionee, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the Optionee’s domicile at the time of death, (b) during the Optionee’s lifetime, shall be exercisable only by the Optionee, and (c) shall, under no circumstances, be transferable in exchange for consideration.

5. Method of Exercise . The stock option granted herein may be exercised in whole or in part by tendering to the Company written notice of exercise accompanied by the aggregate purchase price for the shares with respect to which this stock option is being exercised. The purchase price of shares of Common Stock of the Company acquired upon the exercise of this stock option shall be paid by the Optionee by the delivery of cash or check payable to the order of the Company, or with the consent of the Board of Directors, in whole or in part, Common Stock of the Company valued at fair market value. The Optionee may also request net share settlment whereby the Company delivers only gain shares (i.e. shares with a fair market value equal to the option spread upon exercise) directly to the optionee.

6. Disqualifying Disposition . If your dispose of any shares of Common Stock acquired upon the exercise of this stock option within two years from the Effective Date or one year after such shares were acquired pursuant to the exercise of this stock option (either disposition, a “ Disqualifying Disposition ”), you acknowledge and agree that you shall notify the Company in writing of such disposition. Any notice of a Disqualifying Disposition must be given within 30 days of such disposition.

7. Registration of Stock . Notwithstanding any of the provisions of this Agreement, the stock option granted herein will not be exercisable, in whole or in part, unless (a) all shares issuable on the exercise thereof have been registered under the Securities Act of 1933, as amended (the “1933 Act”), or (b) the Company shall have received an opinion of its counsel that registration under the 1933 Act and all other applicable securities laws is not required in connection with such issuance. The Optionee further agrees that all shares acquired under the exercise of the stock option granted hereunder will not be sold or transferred unless such shares have been registered for resale under the 1933 Act or unless the Company shall receive an opinion of counsel satisfactory to it that such shares may be resold without registration under the 1933 Act.

8. Successors of Company and Optionee . This Agreement shall inure to the benefit of and be binding upon the Company and the Optionee and their respective heirs, legal representatives, successors and assigns, subject to the restrictions on assignability and transferability set forth herein.

9. Adjustments . The number of shares of Common Stock and prices per share contained herein shall be proportionately adjusted from time to time as and when provided in the Plan.

10. Taxes . Optionee shall be responsible to make appropriate provisions for all taxes required to be paid in connection with the stock option granted herein and the exercise thereof.

[ Signature Page Follows ]

IN WITNESS WHEREOF, this Agreement has been executed this 2 nd day of January, 2019.


	US ECOLOGY, INC.


	By:	Jeffrey R. Feeler
	Its:	President and Chief Executive Officer


OPTIONEE


Name:
Address:
SS#:

EXHIBIT 10.5

US ECOLOGY, INC.

FORM OF NON-STATUTORY STOCK OPTION AGREEMENT

Effective __________ (the “Effective Date”), US Ecology, Inc., a Delaware corporation (the “Company”) hereby grants to _________ (the “Optionee”), a non-statutory stock option (the “NQ”) to purchase from the Company, at a price of $_____ per share, ______ shares of the Company’s authorized and unissued common stock, $0.01 par value per share (the “Common Stock”) subject, however, to the following terms and conditions.

1. Stock Option Plan . This Stock Option Agreement (the “Agreement”) and the stock option granted herein are made and accepted pursuant to and in accordance with the Company’s 2015 Omnibus Incentive Plan (the “Plan”). The terms and provisions of the Plan, and any amendments thereto, are incorporated herein by reference. Unless specifically set forth herein, in the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan will prevail. Unless otherwise stated, all capitalized terms used herein shall have the meanings set forth in the Plan.

2. Term and Vesting. The stock option granted herein shall vest and become exercisable as follows, provided the Optionee remains employed by the Company or its subsidiaries through each applicable vesting date:

_____ of the stock options shall vest on January 1, 2020;

_____ of the stock options shall vest on January 1, 2021; and

_____ of the stock options shall vest on January 1, 2022.

Subject to the terms of the Plan and your continued employment with the Company or any of its subsidiaries, your stock option will remain exercisable until the tenth anniversary of the Effective Date (the “ Expiration Date ”). Upon the date of termination of your employment with the Company and its subsidiaries (a “ Termination Date ”), your stock option shall remain exercisable (the “ Exercise Period ”) only in accordance with the following provisions:

(b) Upon termination of your employment by the Company without cause or by you for good reason , unvested stock options shall continue to vest according to your employment agreement in effect on the date of termination or, if one does not exist, for the shorter of a period of one year or the original expiration date of such options.

3. Limitation Upon Transfer . The stock option granted herein (a) shall be nonassignable and nontransferable by the Optionee, either voluntarily or by operation of law, except by will or by the laws of

descent and distribution of the state or country of the Optionee’s domicile at the time of death, (b) during the Optionee’s lifetime, shall be exercisable only by the Optionee, and (c) shall, under no circumstances, be transferable in exchange for consideration.

4. Method of Exercise . The stock option granted herein may be exercised in whole or in part by tendering to the Company written notice of exercise accompanied by the aggregate purchase price for the shares with respect to which this stock option is being exercised. The purchase price of shares of Common Stock of the Company acquired upon the exercise of this stock option shall be paid by the Optionee by the delivery of cash or check payable to the order of the Company, or with the consent of the Board of Directors, in whole or in part, Common Stock of the Company valued at fair market value. The Optionee may also request net share settlment whereby the Company delivers only gain shares (i.e. shares with a fair market value equal to the option spread upon exercise) directly to the optionee.

5. Registration of Stock . Notwithstanding any of the provisions of this Agreement, the stock option granted herein will not be exercisable, in whole or in part, unless (a) all shares issuable on the exercise thereof have been registered under the Securities Act of 1933, as amended (the “1933 Act”), or (b) the Company shall have received an opinion of its counsel that registration under the 1933 Act and all other applicable securities laws is not required in connection with such issuance. The Optionee further agrees that all shares acquired under the exercise of the stock option granted hereunder will not be sold or transferred unless such shares have been registered for resale under the 1933 Act or unless the Company shall receive an opinion of counsel satisfactory to it that such shares may be resold without registration under the 1933 Act.

6. Successors of Company and Optionee . This Agreement shall inure to the benefit of and be binding upon the Company and the Optionee and their respective heirs, legal representatives, successors and assigns, subject to the restrictions on assignability and transferability set forth herein.

7. Adjustments . The number of shares of Common Stock and prices per share contained herein shall be proportionately adjusted from time to time as and when provided in the Plan.

8. Taxes . Optionee shall be responsible to make appropriate provisions for all taxes required to be paid in connection with the stock option granted herein and the exercise thereof.

[ Signature Page Follows ]

IN WITNESS WHEREOF, this Agreement has been executed this 2 nd day of January, 2019.


	US ECOLOGY, INC.


	By:	Jeffrey R. Feeler
	Its:	President and Chief Executive Officer


	OPTIONEE


	Name:
	Address:
	SS#:

EXHIBIT 15

May 6, 2019

US Ecology, Inc.

101 S. Capitol Blvd. Suite #1000

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 periods ended March 31, 2019 and 2018, as indicated in our report dated May 6, 2019; 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 March 31, 2019, 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

Boise, Idaho

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: May 6, 2019	/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: May 6, 2019	/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 March 31, 2019, 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: May 6, 2019	/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