First Quarter Highlights Include:
- Net income was $16.6 million; up 28.8% compared to net income
of $12.9 million in the first quarter of 2022.
- Basic earnings per share were $0.70 for the quarter, an
increase of 27.3% compared to $0.55 for the first quarter of
2022.
- Revenue for the first quarter of 2023 was $193.5 million, a
record for a three-month quarter, compared to $139.4 million for
the same quarter of 2022, an increase of 38.8%.
- Environmental Services segment revenue was $94.8 million, a
record for a three-month quarter, and an increase of 28.9% from the
year-ago quarter.
- Industrial and Field Services segment revenue was a record
$45.8 million, an increase of 312.0% from the year-ago
quarter.
- Industrial and Field Services segment profit before corporate
selling, general and administrative expenses was $7.5 million, an
increase of $6.4 million from the year-ago quarter.
- EBITDA for the quarter was a first quarter record of $36.2
million, up 50.4% compared to EBITDA of $24.1 million in the first
quarter of 2022.
Heritage-Crystal Clean, Inc. (Nasdaq: HCCI), a leading provider
of parts cleaning, hazardous and non-hazardous waste services, used
oil re-refining, antifreeze recycling, industrial and field
services, and emergency and spill response services today announced
results for the first quarter which ended March 31, 2023.
First Quarter Review
Beginning with our 2023 fiscal year, we changed our financial
reporting cycle to a calendar year-end and end-of-month quarterly
reporting cycle. The first quarter of 2023 includes 4 additional
working days as a result of our fiscal quarter change. We estimate
that the additional working days resulted in an increase in
revenues of 6.3% in the first quarter of 2023 when compared to the
first quarter of 2022.
Revenue for the first quarter of 2023 was $193.5 million
compared to $139.4 million for the same quarter of 2022, an
increase of 38.8%.
Overall Operating Margin increased by $11.6 million and
decreased slightly on a percentage of revenue basis to 22.9%
compared to 23.4% during the first quarter of 2022. This decrease
was driven primarily by the decrease in revenues in the Oil
Business segment. Our first quarter corporate SG&A expense was
$20.7 million, or 10.7% of revenue, compared to $15.3 million, or
11.0% of revenue, for the first quarter of 2022.
Net income for the first quarter was $16.6 million compared to
net income of $12.9 million in the year-ago quarter. Basic earnings
per share were $0.70 compared to $0.55 in the year-ago quarter.
Segments
Effective January 1, 2023, the Company revised its reportable
segments based on our investment in Patriot Environmental Services
in 2022. Previously we had two reportable segments: "Environmental
Services," and "Oil Business." Under the revised segment
presentation, the Company now has three reportable segments:
"Environmental Services," "Oil Business," and "Industrial and Field
Services." Prior period segment results presented for comparative
purposes below have been recast to reflect the newly reportable
segment, Industrial and Field Services, as a separate segment.
Our Environmental Services segment includes parts cleaning,
containerized waste management, wastewater vacuum services, and
antifreeze recycling activities. Environmental Services revenue was
$94.8 million during the quarter compared to $73.5 million during
the first quarter of fiscal 2022. The 28.9% increase in revenue was
mainly due to the continued increase in demand and higher prices
for our services compared to the prior year quarter. We experienced
revenue increases across all service lines in the segment when
compared to the first quarter of 2022. Environmental Services
profit before corporate selling, general, and administrative
expenses was $22.7 million, or 24.0% of revenue, compared to the
recast profit of $13.1 million, or 17.7% of revenue, in the
year-ago quarter. The increase in operating margin was mainly
driven by increased pricing relative to increased operating
costs.
President and CEO Brian Recatto commented, "The first quarter
marked the third-straight quarter in which our sales and services
team delivered organic growth of over 24% in this segment. In
addition, we are pleased to see an increasing amount of this
revenue translated into operating profit during the first quarter
compared to the first quarter of 2022."
The Industrial and Field Services segment consists of the
Company's industrial and field services, as well as the activities
at our non-hazardous waste processing facilities. Industrial and
Field Services revenue was $45.8 million for the first quarter of
fiscal 2023 compared to $11.1 million for the first quarter of
fiscal 2022. The $34.7 million increase in revenue was mainly
driven by revenue from our acquisition of Patriot Environmental
Services during the second half of 2022 and, to a lesser extent, by
higher demand and increased prices for our products and services.
Industrial and Field Services profit before corporate SG&A
expense increased $6.4 million, or 583.6%, in the first quarter of
2023 compared to the first quarter of fiscal 2022. Operating margin
for the first quarter of 2023 was 16.3% compared to the recast
margin of 9.8% in the first quarter of 2022. The first quarter
operating margin is reflective of a permanent change we made during
the quarter to reclassify certain labor and benefits cost in our
Patriot business in the amount of $1.5 million from corporate
SG&A expense to Operating Expense. Without this change our
operating margin for the first quarter would have been 19.5%. The
increase in operating margin was mainly driven by increased
revenues in comparison with the increase in operating costs as a
result of the Patriot Environmental acquisition made during the
second half of 2022.
Recatto commented, "We're delighted by the revenue growth
generated during the first quarter in the Industrial and Field
Services segment. We are also optimistic that the growth in this
segment will also provide opportunity for additional growth in our
Environmental Services segment in the quarters and years to
come."
Our Oil Business segment includes used oil collection and
re-refining activities, as well as sales of recycled fuel oil.
During the first quarter of 2023, Oil Business revenue was $53.0
million, a decrease of $1.8 million, or 3.2%, compared to $54.7
million in the first quarter of fiscal 2022. A decrease in base oil
sales volume was the main driver of the decrease in revenue
compared to the prior year quarter, partially offset by an increase
in base oil sales price. Oil Business segment operating margin
decreased to 26.5% in the first quarter of 2023 compared to 33.8%
in the first quarter of fiscal 2022. The lower operating margin
compared to the first quarter of 2022 was mainly due to a decrease
in revenue from lower base oil sales volume along with increased
labor costs and transportation expenses.
Recatto commented, "We are pleased by the fact that during the
first quarter, despite a sequentially declining base oil netback,
and intentionally running our re-refinery at slower rates due to
soft base oil demand, we were still able to produce what would have
been considered a record operating margin percentage only two years
ago."
Safe Harbor Statement
All references to the “Company,” “we,” “our,” and “us” refer to
Heritage-Crystal Clean, Inc., and its subsidiaries. This release
contains forward-looking statements that are based upon current
management expectations. Generally, the words "aim," "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan,"
"project," "should," "will be," "will continue," "will likely
result," "would" and similar expressions identify forward-looking
statements. These forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could
cause our actual results, performance or achievements or industry
results to differ materially from any future results, performance
or achievements expressed or implied by these forward-looking
statements. These risks, uncertainties and other important factors
include, among others: our ability to successfully integrate our
acquisition of Patriot Environmental Services, Inc. and achieve the
benefits contemplated by the acquisition; general economic
conditions and downturns in the business cycles of automotive
repair shops, industrial manufacturing businesses and small
businesses in general; increased solvent, fuel and energy costs and
volatility, including a drop in the price of crude oil, the selling
price of lubricating base oil, solvent, fuel, energy, and commodity
costs; the impact of inflationary pressures on our business; our
ability to pay our debt when due and comply with our debt
covenants; our ability to successfully operate our used oil
re-refinery and to cost-effectively collect or purchase used oil or
generate operating results; increased market supply or decreased
demand for base oil; further consolidation and/or declines in the
United States automotive repair and manufacturing industries; the
impact of extensive environmental, health and safety and employment
laws and regulations on our business; legislative or regulatory
requirements or changes adversely affecting our business;
competition in the industrial and hazardous waste services
industries and from other used oil re-refineries; claims and
involuntary shutdowns relating to our handling of hazardous
substances; the value of our used solvents and oil inventory, which
may fluctuate significantly; our dependency on key employees; our
level of indebtedness, which could affect our ability to fulfill
our obligations, impede the implementation of our strategy, and
expose us to interest rate risk; the impact of legal proceedings
and class action litigation on us and our ability to estimate the
cash payments we will make under litigation settlements; our
ability to effectively manage our network of branch locations; the
control of The Heritage Group over the Company; and the risks
identified in the Company's Annual Report on Form 10-K filed with
the SEC on March 1, 2023. Given these uncertainties, you are
cautioned not to place undue reliance on these forward-looking
statements. We assume no obligation to update or revise them or
provide reasons why actual results may differ. The information in
this release should be read in light of such risks and in
conjunction with the consolidated financial statements and the
notes thereto included elsewhere in this release.
About Heritage-Crystal Clean, Inc.
Heritage-Crystal Clean, Inc. provides parts cleaning, used oil
re-refining, hazardous and non-hazardous waste disposal, emergency
and spill response, and industrial and field services to vehicle
maintenance businesses, manufacturers and other industrial
businesses, as well as utilities and governmental entities. Our
service programs include parts cleaning, regulated containerized
and bulk waste management, used oil collection and re-refining,
wastewater vacuum, emergency and spill response, industrial and
field services, waste antifreeze collection, recycling and product
sales. These services help our customers manage their used
chemicals and liquid and solid wastes, while also helping to
minimize their regulatory burdens. Through our used oil re-refining
program, during fiscal 2022, we recycled approximately 66 million
gallons of used oil into high quality lubricating base oil, and we
are a supplier to firms that produce and market finished
lubricants. Through our antifreeze program during fiscal 2022 we
recycled approximately 4.5 million gallons of spent antifreeze
which was used to produce a full line of virgin-quality antifreeze
products. Through our parts cleaning program during fiscal 2022 we
recycled 2.3 million gallons of used solvent into virgin-quality
solvent to be used again by our customers. In addition, we sold 0.6
million gallons of used solvent into the reuse market. Through our
containerized waste program during fiscal 2022 we collected
approximately 22 thousand tons of regulated waste which was sent
for energy recovery. Through our wastewater vacuum services program
during fiscal 2022 we treated approximately 84 million gallons of
wastewater. Heritage-Crystal Clean, Inc. is headquartered in
Hoffman Estates, Illinois, and operates through 105 branch and
industrial services locations serving approximately 104,000
customer locations.
Conference Call
The Company will host a conference call on Wednesday May 10,
2023 at 9:00 AM Central Time, during which management will give a
brief presentation focusing on the Company's operations and
financial results. Interested parties can listen to the audio
webcast available through our company website,
https://crystal-clean.com/investor-relations/, and can participate
on the call by dialing (888) 440-4149. After dialing the number,
you will be required to provide the following passcode before being
joined to the conference call: 8889427.
The Company uses its website to make information available to
investors and the public at www.crystal-clean.com.
Heritage-Crystal Clean,
Inc.
Condensed Consolidated Balance
Sheets
(In Thousands, Except Share
and Par Value Amounts)
(Unaudited)
March 31, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
35,338
$
22,053
Accounts receivable - net
113,069
114,408
Inventory - net
47,294
40,727
Assets held for sale
—
1,125
Other current assets
10,840
12,989
Total current assets
206,541
191,302
Property, plant and equipment - net
225,581
222,942
Right of use assets
124,857
123,742
Equipment at customers - net
26,827
26,465
Software and intangible assets - net
99,747
102,335
Goodwill
112,236
112,236
Other assets
15,219
15,219
Total assets
$
811,008
$
794,241
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
54,535
$
55,087
Current portion of lease liabilities
28,298
27,277
Contract liabilities - net
3,213
2,525
Accrued salaries, wages, and benefits
9,104
12,443
Taxes payable
7,200
6,037
Other current liabilities
10,755
12,382
Current portion of long term debt
5,000
—
Total current liabilities
118,105
115,751
Lease liabilities, net of current
portion
101,571
100,738
Other long term liabilities
642
986
Long-term debt, net of current portion
84,431
89,383
Deferred income taxes
60,298
57,155
Total liabilities
$
365,047
$
364,013
STOCKHOLDERS' EQUITY:
Common stock - 26,000,000 shares
authorized at $0.01 par value, 23,664,515 and 23,593,163 shares
issued and outstanding at March 31, 2023 and December 31, 2022,
respectively
$
237
$
236
Additional paid-in capital
207,673
208,533
Retained earnings
238,415
221,826
Accumulated other comprehensive loss
(364
)
(367
)
Total stockholders' equity
$
445,961
430,228
Total liabilities and stockholders'
equity
$
811,008
$
794,241
Heritage-Crystal Clean,
Inc.
Condensed Consolidated
Statements of Income
(In Thousands, Except per
Share Amounts)
(Unaudited)
First Quarter Ended,
March 31, 2023 (90
days)
March 26, 2022 (84
days)
Revenues
Service revenues
$
119,452
$
68,916
Product revenues
66,340
64,473
Rental income
7,691
5,977
Total revenues
$
193,483
$
139,366
Operating expenses
Operating costs
$
140,062
$
101,783
Selling, general, and administrative
expenses
17,700
13,735
Depreciation and amortization
12,168
6,507
Other (income) - net
(469
)
(210
)
Operating income
24,022
17,551
Interest expense – net
1,814
223
Income before income taxes
22,208
17,328
Provision for income taxes
5,619
4,450
Net income
$
16,589
$
12,878
Net income per share: basic
$
0.70
$
0.55
Net income per share: diluted
$
0.70
$
0.54
Number of weighted average shares
outstanding: basic
23,649
23,476
Number of weighted average shares
outstanding: diluted
23,863
23,636
Heritage-Crystal Clean,
Inc.
Reconciliation of Operating
Segment Information
(Unaudited)
First Quarter Ended,
March 31, 2023 (90
days)
(thousands)
Environmental
Services
Oil Business
Industrial and Field
Services
Corporate and
Eliminations
Consolidated
Revenues
Service revenues
$
71,000
$
2,810
$
45,642
$
—
$
119,452
Product revenues
16,200
50,140
—
—
66,340
Rental income
7,567
7
117
—
7,691
Total revenues
$
94,767
$
52,957
$
45,759
$
—
$
193,483
Operating expenses
Operating costs
68,541
36,298
35,223
—
140,062
Operating depreciation and
amortization
3,500
2,605
3,078
—
9,183
Profit before corporate selling, general,
and administrative expenses
$
22,726
$
14,054
$
7,458
$
—
$
44,238
Selling, general, and administrative
expenses
17,700
17,700
Depreciation and amortization from
SG&A
2,985
2,985
Total selling, general, and administrative
expenses
$
20,685
$
20,685
Other (income) - net
(469
)
(469
)
Operating income
24,022
Interest expense – net
1,814
1,814
Income before income taxes
$
22,208
First Quarter Ended,
March 26, 2022 (84
days)
(thousands)
Environmental
Services
Oil Business
Industrial and Field
Services
Corporate and
Eliminations
Consolidated
Revenues
Service revenues
$
55,202
$
2,608
$
11,106
$
—
$
68,916
Product revenues
12,380
52,093
—
—
64,473
Rental income
5,963
14
—
—
5,977
Total revenues
$
73,545
$
54,715
$
11,106
$
—
$
139,366
Operating expenses
Operating costs
58,025
34,165
9,593
—
101,783
Operating depreciation and
amortization
2,466
2,084
422
—
4,972
Profit before corporate selling, general,
and administrative expenses
$
13,054
$
18,466
$
1,091
$
—
$
32,611
Selling, general, and administrative
expenses
13,735
13,735
Depreciation and amortization from
SG&A
1,535
1,535
Total selling, general, and administrative
expenses
$
15,270
$
15,270
Other (income) - net
(210
)
(210
)
Operating income
17,551
Interest expense – net
223
223
Income before income taxes
$
17,328
Heritage-Crystal Clean,
Inc.
Reconciliation of our Net
Income Determined in Accordance with U.S. GAAP to Earnings Before
Interest, Taxes, Depreciation & Amortization (EBITDA) and to
Adjusted EBITDA
(Unaudited)
First Quarter Ended,
(thousands)
March 31, 2023 (90
days)
March 26, 2022 (84
days)
Net income
$
16,589
$
12,878
Interest expense – net
1,814
223
Provision for income taxes
5,619
4,450
Depreciation and amortization
12,168
6,507
EBITDA (a)
$
36,190
$
24,058
Non-cash compensation (b)
1,257
1,493
Adjusted EBITDA (c)
$
37,447
$
25,551
(a)
EBITDA represents net income before
provision for income taxes, interest income, interest expense,
depreciation and amortization. We have presented EBITDA because we
consider it an important supplemental measure of our performance
and believe it is frequently used by analysts, investors, our
lenders, and other interested parties in the evaluation of
companies in our industry. Management uses EBITDA as a measurement
tool for evaluating our actual operating performance compared to
budget and prior periods. Other companies in our industry may
calculate EBITDA differently than we do. EBITDA is not a measure of
performance under U.S. GAAP and should not be considered as a
substitute for net income prepared in accordance with U.S. GAAP.
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation or as a substitute for analysis of our
results as reported under U.S. GAAP. Some of these limitations
are:
EBITDA does not reflect our cash
expenditures, or future requirements, for capital expenditures or
contractual commitments;
EBITDA does not reflect interest expense
or the cash requirements necessary to service interest or principal
payments on our debt;
EBITDA does not reflect tax expense or the
cash requirements necessary to pay for tax obligations; and
Although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and EBITDA does not
reflect any cash requirements for such replacements.
We compensate for these limitations by
relying primarily on our U.S. GAAP results and using EBITDA only as
a supplement.
(b)
Non-cash compensation expenses which are
recorded in SG&A.
(c)
We have presented Adjusted EBITDA because
we consider it an important supplemental measure of our performance
and believe it may be used by analysts, investors, our lenders, and
other interested parties in the evaluation of our performance.
Other companies in our industry may calculate Adjusted EBITDA
differently than we do. Adjusted EBITDA is not a measure of
performance under U.S. GAAP and should not be considered as a
substitute for net income prepared in accordance with U.S. GAAP.
Adjusted EBITDA has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under U.S. GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006217/en/
Mark DeVita, Executive Vice President and Chief Financial
Officer, at (847) 836-5670
Hertiage Crystal Clean (NASDAQ:HCCI)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Hertiage Crystal Clean (NASDAQ:HCCI)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024