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US Ecology (NASDAQ:ECOL)

Q4 2013 Earnings Call

February 13, 2014 10:00 am ET

Executives

Eric L. Gerratt - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Treasurer

Jeffrey R. Feeler - Chief Executive Officer, President and Director

Steven D. Welling - Executive Vice President of Sales and Marketing

Analysts

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Tyson L. Bauer - Kansas City Capital Associates

Justin Ward - Wells Fargo Securities, LLC, Research Division

Joe Box - KeyBanc Capital Markets Inc., Research Division

Barbara Noverini - Morningstar Inc., Research Division

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 US Ecology Inc. Earnings Conference Call. My name is Tahisha, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Eric Gerratt, Executive Vice President and Chief Financial Officer. Please proceed.

Eric L. Gerratt

Good morning, and thank you for joining us today. Joining me on the call this morning is President and Chief Executive Officer, Jeff Feeler. Also on the line is Executive Vice President of Sales and Marketing, Steve Welling.

Before we begin, please note that certain statements contained in this conference call that do not describe historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Since forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. Factors that could cause results to differ materially from those expressed include, but are not limited to, those discussed in the company's filings with the Securities and Exchange Commission. Management cannot control or predict many factors that determine future results. Listeners should not place undue reliance on forward-looking statements, which reflect management's views only on the date such statements are made. We undertake no obligation to revise or update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

For those joining by webcast, you can follow along with today's presentation. For those listening by phone, you can access today's presentation on our website at www.usecology.com.

Throughout our call today and yesterday's earnings release, we refer to adjusted EBITDA and adjusted earnings per share. Both adjusted EBITDA and adjusted earnings per share are not determined in accordance with Generally Accepted Accounting Principles and are therefore susceptible to varying calculation. A definition, calculation and reconciliation to the financial statements of each can be found in Exhibit A of our earnings release. We believe these 2 non-GAAP metrics are useful in evaluating our reported results.

With that, I'll now turn the call over to Jeff.

Jeffrey R. Feeler

Thank you, Eric, and good morning, everybody. I'll start this morning's call with a few summary comments on the fourth quarter results released yesterday and some key highlights from our record 2013. I'll then turn the call back to Eric, who will provide more details on the financials. I'll close out the call with comments regarding our 2014 business outlook, after which we'll open up the call for questions and comments. For those following by webcast, I direct your attention to Slide 5.

The momentum experienced in the first 9 months of 2013 carried through the fourth quarter, allowing us to close out what has been the best year in the company's 62-year history. Needless to say, we are very proud of the results that were released yesterday.

During the fourth quarter, we delivered 15% growth in our Treatment and Disposal revenue over the same quarter last year. A 6% increase in volume and favorable service mix allowed us to expand our Treatment and Disposal margin by over 400 basis points. Margin expansion, combined by continued cost control and SG&A spending, allowed us to generate 42% growth in operating income during the quarter, just shy of last quarter's record.

Adjusted EBITDA grew 29% to a new quarterly record of $20.2 million. Adjusted earnings per share was $0.52 per share. All in, just an outstanding quarter across the entire company, with the Northeast market continuing to be extremely active, as well as strong results in both the Gulf Coast and Southern California markets.

The fourth quarter capped off another record year for US Ecology. Delivering these results on the heels of what had been the company's strongest year in 2012 is a true testament to the value of US Ecology's assets, broad permits and best-in-class team of people across the entire organization.

Before Eric dives in deeper into the financials, I'd like to highlight several of the accomplishments. We set a new annual record for Treatment and Disposal revenue at $165 million, as well as a new record in total revenue at $201 million. Operating income grew 30% over 2012 levels, reaching a record $52.9 million. Net income grew 25% to a record $32.2 million. Adjusted EBITDA climbed 22% to a record $71.2 million. Adjusted earnings per share grew over 31% year-over-year.

In addition to delivering excellent results, we did raise $96 million in an equity offering in December. Part of these proceeds were used to pay off debt, leaving $74 million of cash on our balance sheet. The cash, combined with our debt capacity, allows us the flexibility to pursue high-quality assets and service platforms in order to extend our geographic reach and enhance our competitive position. As I will cover at the end of our prepared remarks, the outlook for 2014 has continued to improve, even from a couple months ago, as we start gaining visibility into the construction remedial season.

With that, I'll turn the call back to Eric.

Eric L. Gerratt

Thank you, Jeff. As shown on Slide 7, revenue for the fourth quarter of 2013 was up 18% to $59.4 million. This was driven by higher Treatment and Disposal revenue, which was up 15% over the fourth quarter of 2012, and higher transportation revenue. We disposed of 308,000 tons in the fourth quarter of 2013, up 6% from the 291,000 tons disposed in the fourth quarter of 2012. Our average selling price, or ASP, increased 9% in the fourth quarter of 2013 over the same period last year as a result of a more favorable service mix.

Slide 8 breaks down our Base and Event Business over the last 6 quarters. Recurring Base Business contributed 59% of Treatment and Disposal revenue during the fourth quarter of 2013 and increased 4% compared to the fourth quarter last year. After adjusting for the lost business from industry consolidation and the completed multiyear broker project in late 2012, Base Business grew approximately 9%. The Event Business was 41% of Treatment and Disposal revenue, up 32% from the fourth quarter last year.

Slide 9 breaks down Treatment and Disposal revenue for both Base and Event Business by customer category. Treatment and Disposal revenue from private cleanup events increased 190% in the fourth quarter of 2013 compared to the same period last year. This increase primarily reflects shipments from a nuclear fuel fabrication decommissioning project and an East Coast cleanup project in the fourth quarter of 2013.

Treatment and Disposal revenue from third-party waste brokers was up 11% in the fourth quarter of 2013 over the fourth quarter of 2012. This reflects increased shipments across the diverse range of waste generators directly served by our multiple broker customers, partially offset by lower volumes of brokered thermal recycling projects.

When excluding the lost broker business from industrial consolidation, our broker business was up 15% in the fourth quarter of 2013 compared to the fourth quarter of 2012.

Our Refinery business was up 9% quarter-over-quarter. This increase reflects higher landfill disposal volumes and improved pricing on thermal recycling projects sourced directly from Refinery customers.

Treatment and Disposal revenue from our other industry customer group increased 6% over the same quarter last year, reflecting increased shipments from a broad group of industrial customers.

Thermal recycling business may be included in our Refinery, broker or other industry category, depending on who our customer is. Thermal recycling revenue decreased 32% to $3.7 million in the fourth quarter of 2013. This was driven by a 32% decline in volume, a direct result of a less favorable product mix, which decreased throughput. Similar to our landfill operation, service mix is a key factor in results of our thermal recycling business. To put a finer point on this quarter's thermal recycling performance, the fourth quarter of 2012 had some unique waste streams that allowed for higher throughput than we saw in the fourth quarter of 2013.

Our government cleanup business decreased 64% in the fourth quarter of 2013. This decline was anticipated and primarily due to lower volumes from the U.S. Army Corps of Engineers and a now-completed military base cleanup project.

Treatment and Disposal revenue from the Army Corps was 40% lower in the fourth quarter of 2013 than the same period last year.

Continuing to Slide 10, gross profit was $23.1 million in the fourth quarter of 2013. This was up 26% from the $18.3 million in the fourth quarter last year. Overall, gross margin was 38.8% in the fourth quarter of 2013, up from 36.3% in the same quarter last year.

Treatment and Disposal gross margin for the fourth quarter of 2013 was 48.5%, up from 44.2% in the same quarter last year. This gross margin improvement reflects higher volumes and ASPs in the fourth quarter of 2013.

Selling, general and administrative spending, or SG&A, was $7.7 million in the fourth quarter of 2013. This was up slightly from $7.5 million in the fourth quarter last year but down as a percentage of sales, from 15% to 13%.

Operating income grew 42% to a quarterly record of $15.4 million for the fourth quarter of 2013, up from $10.8 million in the same quarter last year.

Adjusted EBITDA for the fourth quarter of 2013 was $20.2 million, also a quarterly record and an increase of 29% from $15.6 million in the same quarter last year.

We realized $879,000 of noncash net foreign currency losses in the fourth quarter of 2013 on a weaker Canadian dollar. This compared to a noncash net foreign currency loss of $562,000 in the fourth quarter last year.

Net income was $9.2 million or $0.48 per diluted share. Adjusted earnings per share, which excludes the foreign currency loss of $0.03 per diluted share and business development costs of $0.01 per diluted share, was $0.52. This was up 44% from adjusted earnings per share of $0.36 in the fourth quarter last year.

Turning to year-to-date results on Slide 13. Revenue for 2013 was $201.1 million. This was up from $169.1 million in 2012. Treatment and Disposal revenue was up 13% in 2013 compared to 2012, while Transportation service revenue was up 54% in 2013 compared to last year, which reflected more bundled transportation and disposal services on our project-based work.

Excluding US Ecology Michigan, Base Business revenue increased 2% in 2013 compared to 2012, while Event Business was up 27% from 2012. After adjusting for the lost business from industry consolidation and the completed multiyear broker project in late 2012, Base Business grew approximately 7%.

Our average selling price was up 11% in 2013 compared to last year, and volumes were up 2%.

Slide 14 breaks down Treatment and Disposal revenue for both Base and Event Business by customer category, excluding US Ecology Michigan. Our private cleanup business was up 188%, reflecting shipments from a nuclear fuel fabrication decommissioning project and an East Coast cleanup project in 2013.

Treatment and Disposal revenue from our Refinery customer group increased 33%, reflecting higher landfill disposal volumes and improved pricing on thermal recycling projects sourced directly from Refinery customers.

Our government cleanup business decreased 45% in 2013 compared to 2012. This decline was primarily due to lower volumes from the U.S. Army Corps of Engineers and other government project work.

Treatment and Disposal gross margin for 2013 was 47.8%, up from 45.7% in 2012, reflecting a more favorable service mix.

SG&A was $26.1 million in 2013, up from $25.7 million in 2012 but down as a percentage of sales, from 15% to 13%.

Operating income grew 30% to $52.9 million in 2013 compared to $40.6 million in 2012.

Adjusted EBITDA for 2013 was a record $71.2 million, up 22% from the previous record of $58.4 million in 2012.

Net income for 2013 was $32.2 million or $1.72 per diluted share. Net income was $25.7 million or $1.40 per diluted share in 2012. Adjusted earnings per share grew 31% to $1.82 per diluted share in 2013, up from $1.39 per diluted share in 2012.

Slide 18 summarizes our financial position and return metrics. At December 31, 2013, we had $73.9 million in cash and no borrowings on our credit agreement. This left $79.9 million available under our credit facility for future borrowings.

In 2013, we generated $49.6 million of cash from operating activities. We invested $21.4 million in capital projects and raised $96.4 million in net proceeds from our common stock offering in December 2013. We also paid down our reducing revolving line of credit by $45 million and paid out $10 million in dividends to our stockholders. Our return on invested capital for the 12 months ended December 31, 2013, was 17.3%. Our return on total assets was 12.4%, and return on equity for the same period was 18.7%.

With that, I'll turn the call back to Jeff.

Jeffrey R. Feeler

Thank you, Eric. I could not be more pleased with the performance of our entire team in 2013, posting record results in almost every metric that we measure. Moving into 2014, as summarized on Slide 19, market conditions and demand for our services remain strong. Since our preliminary outlook provided in early December, our project pipeline has been filling out nicely with new and emerging opportunities as we gain visibility into the summertime cleanup season. While fully replacing the accelerated project volume that benefited 2013 will be a challenge, I can assure you that our best-in-class sales team is determined to make it happen.

With regard to Base Business in 2014, we continue to expect growth in line with industrial production, plus normal pricing increases.

We are currently estimating that 2014 adjusted EBITDA will range between $70 million and $74 million and earnings per share will range between $1.50 and $1.60 per share, and this excludes any foreign currency gains or losses or business development expenses.

Estimated earnings per share amounts are based on the company's new share count, which approximates 21.5 million shares and includes the nearly 3 million shares issued in December of 2013. For comparative purposes, if 2014 estimated share count of 21.5 million shares would have been outstanding for all of 2013, adjusted earnings per share would have approximated $1.58 per share.

We expect our effective tax rate to increase to approximately 37% as a result of higher expected earnings in the United States. The change in the tax rate is reflected in our guidance, and its impact is approximately $0.03 per share.

Finally, we expect our Treatment and Disposal gross margin to range between 46% and 47%, with SG&A growing at inflationary rates from 2013 levels.

In 2013, we spent $21.4 million in capital investment, which was down from the expected $23 million. As we look to 2014, we expect capital spending to range from $20 million to $21 million, which includes approximately $2.3 million in capital projects that are carried over from 2013.

2014 capital expenditures will be devoted primarily to the construction of additional disposal space, ongoing infrastructure upgrades, equipment replacements at our operating facilities.

As we look longer term, we are very well positioned to continue executing on our strategy to use our best-in-class assets as a platform to drive both organic growth and to build out our disposal network by acquiring high-quality Treatment and Disposal assets or service offerings. We have a thorough due diligence process in place to evaluate potential acquisitions, with a focus on strategic fit and long-term shareholder returns. We are committed to deploy resources in 2014 and identify these high-quality assets that will allow us to enhance our competitive position.

In closing, I would like to thank everyone that made 2013 such a great year. To our operating facilities, thank you for the remarkable accomplishments of driving higher volumes, executing on targeted initiatives that will position us well for the long term, and providing best-in-class compliance and safety record; to our industry-leading sales and customer service teams who understand that customer service is the key to our success and who continue to deliver results year in and year out; and to our corporate office and support personnel, thank you for the strong commitment and support you provide the entire organization, allowing us to focus on what's truly important. You all continue to impress me daily, and I look forward to working together to continue to grow our business in 2014 and beyond.

And with that, I'll turn it back to the operator to open it up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Michael Hoffman from Wunderlich.

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Can we walk through -- the U.S. Army Corps obviously was down for sequestration and a lower budget number. As you think about the higher budget line item that's in there, it's almost up $20 million year-over-year. And is there any visibility on how that you think they're going to spend? And so can you give us some thoughts about that in the context of your outlook for this year?

Steven D. Welling

Michael, this is Steve Welling. Yes, we do know some of the project sites that are scheduled to move this year. A couple of them are slated to go to our facility already, and we have in addition to the ongoing sites that we've been handling for multiple years. What we don't always know is, as we get near the end of the government's fiscal year, is do they shift any of that money from disposal to something else or do they get extra money? We've had multiple years when they've had additional moneys moved towards disposal. So at this point, we think we have a pretty good handle on where we're headed, at least for 2014.

Jeffrey R. Feeler

Michael, this is Jeff. I'll just add to that a little bit. 2013's Army Corps shipments were not up to our expectations. A lot of multiple factors that really led to that, the biggest one just being the overall budget situation that the U.S. government's in. As we look out to '14, we do -- are expecting to see some growth in that area. We think that 2013's going to be a trough year on that business. However, when we look at 2012, it's probably not going to recover to that same level, but there definitely, we feel, is growth in 2014.

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

All right, perfect. And then foreign exchange, is there a new thing we have to deal with, with you all on the -- and the Canadian dollars plummeted here in the first 6 weeks. Is that $0.90 number, that's where the Canadian dollar is part of your guidance at this point?

Jeffrey R. Feeler

Yes, Michael, this is Jeff. It is part of our guidance. At the end of the day, the actual foreign currency translation gains and losses that we back out of adjusted earnings per share has to do with an intercompany note that Generally Accepted Accounting Principles make us mark-to-market. It's really a noncash item. From a competitive standpoint, to be quite frank, with the devalued Canadian dollar, it helps our Canadian facilities sell into the U.S. at a better rate. So from that side of things, it could be a problematic for us [ph].

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Okay. And then do you have an accordion feature in your revolver? So is there more than the $80 million available?

Jeffrey R. Feeler

It is -- there's not. But Michael, I'll add to that, which I think is pretty clear, is raising capital in this environment today, whether it's through a line of credit or otherwise, is not going to be a challenge for us.

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Yes, I would think so. And then if I look at Page 14, which is the mix -- the disposal revenue mix, if you slip your guidance in through that [indiscernible], how would you move -- where do we see the movement around in '14?

Jeffrey R. Feeler

So Michael, you were breaking up a little bit in there. I didn't get part of the question.

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

At Page 14 with the pie chart, as I think about 2014, how does that pie chart look as you've rolled out your guidance in 2014? Government, not negative, it's positive, that kind of thing, I mean...

Jeffrey R. Feeler

Yes, what I would directionally say is what you're going to see is, is you're not going to see the strong growth in the private cleanup business. I would see substantial improvement in the government cleanup business. I think there's some upside there, especially from the 45% decline you saw in '13. With regard to the other industry, refining sectors, broker sectors, those are really tied a lot to industrial production and the health of the economy. There's also embedded in there some project work that will be coming out. So in those, I mean, they could -- in aggregate, we see positive growth in all those sectors.

Operator

Your next question comes from the line of Tyson Bauer from KC Capital.

Tyson L. Bauer - Kansas City Capital Associates

A couple of quick questions. Event pipeline, you characterized that as improving as you enter into 2014. Can you give us a little more flavor on what you're seeing as new opportunities without getting specific on projects, but in generalities, what you're seeing in certain industries that may be percolating for you? And are some of these Event-type projects things that have been in the pipeline for a while that now may come to fruition?

Steven D. Welling

Okay, Tyson, Steve Welling again. We're seeing strength in the Gulf area already in the first quarter, in particular, and Southern California. The Northeast, we're working on a number of projects, trying to lock up for second and third quarter, but it really is somewhat across-the-board. So there's projects in every geography.

Tyson L. Bauer - Kansas City Capital Associates

Are you then anticipating or suggesting that the hazardous waste volumes for the industry wide is growing at a faster rate than we've seen kind of that GDP growth in the past?

Steven D. Welling

For Base Business, no. That would be pretty much following the GDP other than where we're taking share. For Event work, I guess that will be -- remain to be seen this year. But the pipeline seems to be stacking up nicely for the year.

Jeffrey R. Feeler

And I think it's regionalized. Some of the markets we operate in, Tyson, I think that are seeing some higher growth. I mean, the Gulf Coast is a prime example. There's a lot of activity that we're starting to see some benefits from and we have seen some benefits from over the last several years. We still have a good position in Southern California. The Northeast is the most highly concentrated place for event cleanup work. And we're well positioned for that as well. So there's a number of different things that are shaking up that we see potential for some nice back half of the year projects.

Tyson L. Bauer - Kansas City Capital Associates

Okay. Given your outlook, I'm trying to put pieces together, are we looking at a little bit of a shift more toward the Event Business in '14 and maybe, in future years, with that Base Business kind of growing at that steady rate?

Jeffrey R. Feeler

Yes, I think long term from the Base Business and what we've been very consistent on our guidance is we really expect that business in the mid single digits to, on the kind of a really good year, kind of low double-digits range. The Event Business is going to be just dependent on the opportunities. We are seeing some increased activity and have been seeing some increased activity. As I look from a revenue split based off our business today, I mean, I really am guiding towards a 60-40 split, with 60% being Base Business and 40% being Event Business. And that's going to move around maybe 5% plus or minus depending on the projects that are moving at any given point in time.

Tyson L. Bauer - Kansas City Capital Associates

Are you more exposed on that 40% Event at the beginning of this year, where you're still confident but don't have the POs in hand as of yet than maybe in years past? Or are we pretty stable that maybe we've got 20% yet to secure, but you're fairly confident we will get that throughout the year?

Jeffrey R. Feeler

This is Jeff. Obviously, we're confident that we're going to get it throughout the year. If you put it in perspective, last year, when we provided guidance, we had a number of the projects that ultimately delivered in contract that were shipping real-time. There's probably a higher percentage today where we sit right now that we have contracted but haven't started shipping yet or are -- and I'll call it the high probability of being contracted. So if you put it in that pure construct, there's probably a little less confidence this year than last year. However, the pipeline still looks good, and we know that we win more than our fair share of project-based business. And so we're very comfortable in the guidance that we've given.

Tyson L. Bauer - Kansas City Capital Associates

That sounds great. We saw EPA ruled coal ash nonhazardous. Somehow, they came up with that decision. Any other things we should keep watch from the Washington D.C.? We got our annual BRAC funding request that has been getting denied for 5 straight years. Any inroads there as they look for BRAC for 2015 or other EPA decisions that we should keep an eye on?

Jeffrey R. Feeler

Tyson, this is Jeff. I'll start and let Steve fill in. I'm not seeing anything of note. I mean, anything with government funding is always in jeopardy, I mean, just because we don't know where the money is going to be allocated to. There's a lot of opportunities there. And I think that, that's one thing that we take note of, is that even if the government funding doesn't come through in a given year, those projects don't disappear. So it's still a long-term pipeline for us to compete for. They will ultimately get cleaned up. But from a regulatory standpoint, we're not seeing anything that's drastically changing the industry in one way or the other.

Steven D. Welling

Yes, most of the BRAC work that we do is actually sites that were closed in earlier rounds, rounds 1 or 2. And the government has made deals with local communities for redevelopment. And most of that money has been put aside, and we're seeing work continue anyway, regardless of what they might vote on this year.

Tyson L. Bauer - Kansas City Capital Associates

Okay. And a last question for me. You talked about increased Event work Q2, Q3, back-half loaded, all these things. Are you then suggesting that we'll see a little greater seasonal rollout through '14?

Jeffrey R. Feeler

How I would put what we're seeing today is I expect a really strong first half right now. As we gain more visibility, the back half will be solid, but I would expect the first half to actually be stronger than the second half just because some of the projects that are shipping in the third and fourth quarters and actually have been shipping most of -- all of '13 are continuing today. And those are going to continue to ship through, if not the entirety of the year, at least stronger through the first half.

Operator

Your next question comes from the line of Justin Ward from Wells Fargo.

Justin Ward - Wells Fargo Securities, LLC, Research Division

Actually, just piggybacking off that last question. Do you guys have within your guidance a rough breakout of percentage of EPS or EBITDA we should expect in the first half versus the second half? I mean, I think you just noted that you expect it higher in the first half, but the last 4 years it's been heavily weighted towards the back half. How much of that expectation of it being weighted in the first half this year has to do with visibility versus the strong Event projects that are trailing off by midyear?

Jeffrey R. Feeler

Yes, Justin, we don't get into quarter-by-quarter guidance. We do it directionally. So we don't have that breakout for you. Qualitatively, yes, we expect the first half to be strong. I actually think that, that gives -- the second half, we just don't have a lot of visibility there yet. As the year progresses, I think every year that we come in, the guidance, the second half has less visibility to it. And there's been positive surprises that it strengthened a lot faster than -- and been stronger than what we had anticipated. So from that side of things, I see a really strong first half. Second half, there -- it still needs some clarity around it. I think that there's some upside in the second half that we have not factored into our guidance.

Justin Ward - Wells Fargo Securities, LLC, Research Division

Okay. And then I guess as you look at the private event work in the pipeline, maybe can you touch on some of the key motivations behind those projects? I mean, is it simply that we're at the point in the cycle where property values have rebounded enough and businesses are profitable, profitability has improved enough where these businesses are starting to invest in cleanup as a tax shield or prepare those properties for selling? Maybe if you can touch on the key drivers there and then sort of how those could trend over the next couple of years.

Steven D. Welling

Okay, this is Steve Welling. There's -- that's one of the multiple drivers that result in Event work, would be real estate transfers having to do with property development. Second one would be court-ordered cleanup. And we have a couple of projects moving right now that there are deadlines set by the court when they have to have it cleaned up. And we're benefiting from those. And then also, the third would be increasing plant capacity. And that's partly why we're seeing some of the Gulf activity, which is cleaning up an old property in order to upgrade and put in new equipment to increase the capacity at a refinery or at a petrochemical plant. So we're seeing a little bit of all 3. I personally haven't seen a lot of redevelopment quite yet. I live in California and haven't quite seen the money being spent, but that is definitely an upside, as the economy continues to recover, that money will be spent to turn old contaminated properties into beautiful condos along the beach and that type of thing.

Justin Ward - Wells Fargo Securities, LLC, Research Division

All right, that's very helpful. And I guess just last question on the Base Business. I mean, you touched on what sort of growth we should expect there. And I think as you guys sort of anniversary some of those onetime dampeners, including that Safety-Kleen business, is it safe to assume that we can sustainably see that mid-to-high single digits over the next few years growth in the Base Business there?

Jeffrey R. Feeler

Yes. This is Jeff. I would echo that comment. We do think that we're going to able to see the mid -- a mid single- to high single-digit growth in that area. We will cycle through some of those lost business opportunities really after the first quarter of 2014. It took a quarter for us to almost fully lose most of that business during the year. So you'll start seeing it in the numbers without having to dig into the details.

Operator

[Operator Instructions] Your next question comes from the line of Joe Box from KeyBanc Capital Markets.

Joe Box - KeyBanc Capital Markets Inc., Research Division

Just sticking with Justin's question. I think, Eric, you mentioned earlier that your lost broker business or your -- excuse me, your Base revenues were up 9% if you x out that lost broker business. Can you maybe just give us a feel of what the volume versus price contribution was on that 9% growth?

Eric L. Gerratt

Joe, yes. That number, that 9% is really based on a revenue -- on a T&D revenue perspective from a historical. I think it was Safety-Kleen pricing is kind of all over the map based on waste stream and mix. But I would tell you, again, the 9% is the T&D revenue, and we're not really going to get into volume versus price. I mean, it's again, it varies quarter-to-quarter depending on waste stream, but it's on a T&D revenue perspective.

Jeffrey R. Feeler

Yes, I'll just add to that a little bit, is that we instituted some pricing increases in the late first quarter, second quarter last year. And those, as we've talked about on the Base Business, were inflationary-type levels. It's not across-the-board, but just kind of think about it in the 3% range. So those would've cycled through in the fourth quarter. The rest of it, we did have strong volumes in the fourth quarter, as when we talked about in early December, we started seeing customers that were, I'll call it, using up their budgets and other things like that. That not only impacted some of the project work that we saw in the fourth quarter, but it also helped the Base Business too.

Joe Box - KeyBanc Capital Markets Inc., Research Division

Great, that's helpful. And then I'm sure this is probably also kind of tough to nail down, but from what you could see right now, I mean, how do you think the ASP is kind of shaping up for 2014? I mean, is it possible to drive more upside with some of your larger jobs winding down? Just trying to get a better handle on that.

Jeffrey R. Feeler

Yes, it would not be -- it would not surprise me if we actually see some contraction in ASP. And remember, the ASP metrics that are quoted is just purely math. It's revenue divided by volume. And all of our waste streams are not created equal. And so when we take a look at that, I could see some downward pressure on that metric. However, on individual waste streams, I would expect to see, on the Base Business side, inflationary pricing increases somewhere to 2% to 5%, depending on markets and all that and the types of waste streams.

Jeffrey R. Feeler

Yes, Joe, the real wildcard is kind of on the Event side, from a Base perspective, we expected inflationary slightly better, but it's really going to depend on, particularly in the second half, kind of how those Event projects play out and what the mix of those is.

Joe Box - KeyBanc Capital Markets Inc., Research Division

Right. So any impact is going to be kind of mix-dependent.

Jeffrey R. Feeler

That's right.

Joe Box - KeyBanc Capital Markets Inc., Research Division

I want to go back to kind of a theme from earlier, just the cadence of how things could play out through the year. Jeff, you gave us the T&D margins that you expect for the full year, and that's helpful. Can you maybe just give us a sense of how the margin cadence could play out over the course of the year as it's kind of incorporated in your guidance?

Jeffrey R. Feeler

We don't have a quarter-by-quarter margin from that. Typically, if you go back and look seasonally at our margin, there is some of a correlation to that. First and fourth quarters actually tend to be some of our lower margin just because the wintertime conditions create some, especially up in the Northeast and especially this year, are creating higher operating costs to be able -- and lower throughput on those. In the summertime conditions, you actually see the opposite happen. And then mix is the other big thing. The mix of business that we've seen in the first half coming through the gate is going to be very similar to what we saw in '13. We have that known. The second half of the year is going to be more mix-dependent that we don't really have visibility to. All in, blended, we think 46%, 47%, in that range. That's up from pre-'13 levels just because of some of the operational efficiencies we've put in place. That being said, ultimately, it's going to be dependent on the Event projects and the type of waste that comes through the gate that drives that number.

Operator

Your next question comes from the line of Barbara Noverini from Morningstar.

Barbara Noverini - Morningstar Inc., Research Division

Jeff, Eric, Steve, you had mentioned the type of lease accepted at your thermal desorption units slowed throughput, leading to a decline in volumes in that segment. What's your visibility like for those types of projects? Is this more like filling capacity as opportunities occur, or is there longer-term scheduling for these units?

Steven D. Welling

This is Steve Welling, Barbara. Right now, we have about a 6- to 8-week, what we call, backlog on the solids. And we reported that fourth quarter was a bit slower in '13 due to service mix. That was partially due to lack of liquids. However, first quarter now, we disclosed a new liquid project that's going to fill the gap and actually show, hopefully, good improvement in Q1. So in terms of visibility right now, we're 2 to 3 months, and we're also talking to refineries about what their plans are for this summer and future. So we're pretty well on top of what's upcoming this year, at least for the next 3 to 6 months.

Barbara Noverini - Morningstar Inc., Research Division

Okay. So it's safe to say that over the next couple of quarters, you expect that to be more positive than what you saw in the fourth quarter?

Steven D. Welling

At least for Q1, we know we have liquids filling the gap that we didn't have in Q4. I can't tell you for sure we know we'll have liquids later in the year, but that's what we're working to close.

Operator

[Operator Instructions] Your next question comes from the line of Justin Ward from Wells Fargo.

Justin Ward - Wells Fargo Securities, LLC, Research Division

Just a follow-up on your Event Business pipeline. I'm just curious, how does it stack up relative to this time last year? You gave a little bit of commentary around having started shipping a little bit more at this time last year. But just generally, your Event Business pipeline compared to this point last year, how does it look?

Steven D. Welling

Actually, to me -- this is Steve Welling. We look strong. We had a couple of weeks of weather delays in the Northeast and, I guess today, in the South. But overall, we're starting the year with multiple projects under contract, and it looks good.

Jeffrey R. Feeler

I guess I would just add to that is, when you look at the number of projects and the opportunities out there, it's probably equal, if not slightly positive to what we're seeing from a year ago. The confidence we had last year is that there was big projects shipping that ultimately delivered a lot of the results that we saw in '13 in connection. So a lot of good opportunities have presented themselves, even in the first quarter. And it gives us a lot of, I'll call it, optimism that there's going to be even more opportunities that we're not even tracking today in the back half.

Operator

We have a follow-up question from Michael Hoffman from Wunderlich.

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Steve, we're transitioning off of one of your bigger low-activity nuclear projects. Can you talk about the outlook for that type of work? Are there projects that you know are out there, and they may not hit this year, but you're aware that there is a pipeline of those percolating? Can you share some thoughts about that?

Steven D. Welling

Yes, sure. Michael, this is Steve. The project that you're referring to should be done sometime later this year. And we're currently working on at least 2 or 3 other projects. However, they won't likely start until first of '15. I don't necessarily see anything kicking in, although things are always subject to change. But at the moment, the projects we're tracking look like '15 starts. Nothing for sure locked up and contracted. However, we're working it. We think we have a very good service offering that the customers are interested in.

Operator

And we have no more questions in the queue. I would now like to turn the call back over to Jeff Feeler for closing remarks.

Jeffrey R. Feeler

All right. Thanks to everybody for their interest in the company, and we look forward to talking to you at the end of Q1.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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