Heritage-Crystal Clean, Inc. Announces First Quarter 2022 Financial Results
Heritage-Crystal Clean, Inc. (HCCI) reported a strong first quarter for 2022, with net income rising to $12.9 million, a 39.9% increase from $9.2 million in Q1 2021. Basic earnings per share climbed to $0.55, marking a 41.0% growth. Revenue reached $139.4 million, up 32.2% year-over-year, driven by a record $54.7 million in the Oil Business segment and $84.7 million in Environmental Services. However, operating margin decreased to 23.4% due to rising costs amidst high inflation. EBITDA stood at $24.1 million, a 45.5% increase.
- Record first quarter revenue of $139.4 million, a 32.2% increase year-over-year.
- Net income rose to $12.9 million, up 39.9% compared to Q1 2021.
- Earnings per share increased to $0.55, a 41.0% growth.
- Oil Business segment revenue reached a record $54.7 million, up 52.3% year-over-year.
- Operating margin decreased to 23.4% from 24.8% in Q1 2021 due to rising costs.
- Environmental Services profit margin fell to 16.7%, down from 23.0% year-over-year.
First Quarter Highlights Include:
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Net income was
; up$12.9 million 39.9% compared to net income of in the first quarter of 2021.$9.2 million
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Basic earnings per share were
for the quarter, an increase of$0.55 41.0% compared to for the first quarter of 2021.$0.39
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Oil Business segment revenue of
represents a record high for a 12-week quarter, and an increase of$54.7 million 52.3% from the year-ago quarter.
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Oil Business segment profit before corporate selling, general, and administrative expenses was a first quarter record of
with operating margin of$18.5 million 33.7% .
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Environmental Services segment revenue was
, a record for a 12-week quarter, and an increase of$84.7 million 21.9% from the year-ago quarter.
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EBITDA for the quarter was a first quarter record of
, up$24.1 million 45.5% compared to EBITDA of in the first quarter of 2021.$16.5 million
First Quarter Review
Revenue for the first quarter of 2022 was
Overall Operating Margin increased by
Net income for the first quarter was
Segments
Our Environmental Services segment includes parts cleaning, containerized waste, wastewater vacuum, antifreeze recycling, and field services. Environmental Services revenue was
President and CEO
Our Oil Business segment includes used oil collection and re-refining activities, as well as sales of recycled fuel oil. During the first quarter of fiscal 2022, Oil Business revenue was a record high for a 12-week quarter at
Recatto commented, "We're excited to report our Oil Business team continued to execute well during the first quarter in terms of managing pay-for-oil, route collection efficiency and operation of our re-refinery which allowed us to produce a record fifth straight quarter of operating margin above
Safe Harbor Statement
All references to the “Company,” “we,” “our,” and “us” refer to
About
Conference Call
The Company will host a conference call on
The Company uses its website to make information available to investors and the public at www.crystal-clean.com.
Condensed Consolidated Balance Sheets (In Thousands, Except Share and Par Value Amounts) (Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
71,066 |
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$ |
56,269 |
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Accounts receivable - net |
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70,047 |
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62,513 |
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Inventory - net |
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30,195 |
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29,536 |
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Assets held for sale |
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1,125 |
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1,125 |
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Other current assets |
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5,954 |
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6,773 |
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Total current assets |
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178,387 |
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156,216 |
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Property, plant and equipment - net |
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171,893 |
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166,301 |
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Right of use assets |
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91,528 |
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83,865 |
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Equipment at customers - net |
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24,582 |
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24,146 |
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Software and intangible assets - net |
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44,676 |
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45,949 |
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49,695 |
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49,695 |
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Other assets |
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654 |
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692 |
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Total assets |
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$ |
561,415 |
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$ |
526,864 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
43,055 |
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$ |
36,179 |
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Current portion of lease liabilities |
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21,598 |
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20,146 |
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Contract liabilities - net |
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2,570 |
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|
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2,094 |
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Accrued salaries, wages, and benefits |
|
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6,632 |
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|
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8,980 |
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Taxes payable |
|
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13,448 |
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8,474 |
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Other current liabilities |
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11,944 |
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9,476 |
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Total current liabilities |
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99,247 |
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85,349 |
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Lease liabilities, net of current portion |
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72,192 |
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65,041 |
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Other long term liabilities |
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591 |
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473 |
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Contingent consideration |
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1,410 |
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2,819 |
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Deferred income taxes |
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31,525 |
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31,126 |
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Total liabilities |
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$ |
204,965 |
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$ |
184,808 |
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STOCKHOLDERS' EQUITY: |
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Common stock - 26,000,000 shares authorized at |
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$ |
235 |
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$ |
235 |
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Additional paid-in capital |
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206,390 |
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204,920 |
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Retained earnings |
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149,945 |
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137,067 |
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Accumulated other comprehensive loss |
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(120 |
) |
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(166 |
) |
Total stockholders' equity |
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$ |
356,450 |
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342,056 |
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Total liabilities and stockholders' equity |
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$ |
561,415 |
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$ |
526,864 |
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Condensed Consolidated Statements of Income (In Thousands, Except per Share Amounts) (Unaudited) |
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First Quarter Ended, |
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Revenues |
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Service revenues |
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$ |
68,907 |
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$ |
57,700 |
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Product revenues |
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64,482 |
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42,266 |
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Rental income |
|
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5,977 |
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5,416 |
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Total revenues |
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$ |
139,366 |
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$ |
105,382 |
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Operating expenses |
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Operating costs |
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$ |
101,783 |
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$ |
76,771 |
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Selling, general, and administrative expenses |
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13,735 |
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12,188 |
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Depreciation and amortization |
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6,507 |
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3,782 |
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Other (income) - net |
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(210 |
) |
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(108 |
) |
Operating income |
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17,551 |
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12,749 |
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Interest expense – net |
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223 |
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324 |
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Income before income taxes |
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17,328 |
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12,425 |
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Provision for income taxes |
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4,450 |
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3,219 |
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Net income |
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$ |
12,878 |
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$ |
9,206 |
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Net income per share: basic |
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$ |
0.55 |
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$ |
0.39 |
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Net income per share: diluted |
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$ |
0.54 |
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$ |
0.39 |
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Number of weighted average shares outstanding: basic |
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23,476 |
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23,373 |
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Number of weighted average shares outstanding: diluted |
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23,636 |
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23,509 |
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Reconciliation of Operating Segment Information (Unaudited) |
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First Quarter Ended, |
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(thousands) |
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Environmental
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Oil Business |
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Corporate and
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Consolidated |
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Revenues |
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Service revenues |
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$ |
66,299 |
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$ |
2,608 |
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$ |
— |
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$ |
68,907 |
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Product revenues |
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12,389 |
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|
52,093 |
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— |
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64,482 |
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Rental income |
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5,963 |
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14 |
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— |
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5,977 |
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Total revenues |
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$ |
84,651 |
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$ |
54,715 |
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$ |
— |
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$ |
139,366 |
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Operating expenses |
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Operating costs |
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67,618 |
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34,165 |
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— |
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101,783 |
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Operating depreciation and amortization |
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2,888 |
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2,084 |
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— |
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4,972 |
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Profit before corporate selling, general, and administrative expenses |
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$ |
14,145 |
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$ |
18,466 |
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$ |
— |
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$ |
32,611 |
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Selling, general, and administrative expenses |
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13,735 |
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13,735 |
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Depreciation and amortization from SG&A |
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1,535 |
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1,535 |
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Total selling, general, and administrative expenses |
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$ |
15,270 |
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$ |
15,270 |
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Other (income) - net |
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(210 |
) |
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(210 |
) |
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Operating income |
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17,551 |
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Interest expense – net |
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223 |
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223 |
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Income before income taxes |
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$ |
17,328 |
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First Quarter Ended, |
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(thousands) |
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Environmental
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Oil Business |
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Corporate and
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Consolidated |
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Revenues |
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Service revenues |
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$ |
53,303 |
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$ |
4,397 |
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$ |
— |
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$ |
57,700 |
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Product revenues |
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10,747 |
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|
31,519 |
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— |
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42,266 |
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Rental income |
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5,407 |
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9 |
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— |
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5,416 |
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Total revenues |
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$ |
69,457 |
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$ |
35,925 |
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$ |
— |
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$ |
105,382 |
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Operating expenses |
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Operating costs |
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51,880 |
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|
24,891 |
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— |
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76,771 |
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Operating depreciation and amortization |
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1,579 |
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|
948 |
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— |
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2,527 |
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Profit before corporate selling, general, and administrative expenses |
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$ |
15,998 |
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$ |
10,086 |
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$ |
— |
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$ |
26,084 |
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Selling, general, and administrative expenses |
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|
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|
12,188 |
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12,188 |
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Depreciation and amortization from SG&A |
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1,255 |
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|
1,255 |
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Total selling, general, and administrative expenses |
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$ |
13,443 |
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$ |
13,443 |
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Other (income) - net |
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(108 |
) |
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(108 |
) |
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Operating income |
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12,749 |
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Interest expense – net |
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324 |
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324 |
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Income before income taxes |
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$ |
12,425 |
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Reconciliation of our Net Income Determined in Accordance with |
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(Unaudited) |
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First Quarter Ended, |
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(thousands) |
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Net income |
$ |
12,878 |
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$ |
9,206 |
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Interest expense – net |
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223 |
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|
324 |
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Provision for income taxes |
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4,450 |
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|
3,219 |
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Depreciation and amortization |
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6,507 |
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|
3,782 |
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EBITDA (a) |
$ |
24,058 |
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$ |
16,531 |
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Non-cash compensation (b) |
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1,493 |
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1,218 |
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Adjusted EBITDA (c) |
$ |
25,551 |
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$ |
17,749 |
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(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 |
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EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
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EBITDA does not reflect interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
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EBITDA does not reflect tax expense or the cash requirements necessary to pay for tax obligations; and |
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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. |
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We compensate for these limitations by relying primarily on our |
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(b) |
Non-cash compensation expenses which are recorded in SG&A. |
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(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 |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220504006184/en/
Source:
FAQ
What were Heritage-Crystal Clean's earnings for the first quarter of 2022?
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What challenges did Heritage-Crystal Clean face in Q1 2022?
What is the outlook for Heritage-Crystal Clean following their Q1 results?