Heritage-Crystal Clean, Inc. Announces Record First Quarter 2021 Financial Results
Heritage-Crystal Clean (Nasdaq: HCCI) reported a 1.8% decline in Q1 2021 revenues, totaling $105.4 million compared to $107.3 million in Q1 2020. Net income rose to $9.2 million or $0.39 per share, up from $5.3 million or $0.23 per share a year earlier. The company achieved an operating margin increase to 24.8% due to strong oil business performance. Environmental Services revenue declined 10.3% to $69.5 million, impacted by previous large projects and COVID-19 effects. The Oil Business segment reached a record of $35.9 million in revenue.
- Net income increased by 73.6% YoY to $9.2 million.
- Diluted EPS rose to $0.39, up from $0.23 in the prior year.
- Operating margin improved to 24.8% from 18.4% YoY.
- Oil Business revenue reached a record of $35.9 million, up 21% YoY.
- Total revenue decreased by 1.8% YoY.
- Environmental Services revenue declined by 10.3% compared to the prior year.
Heritage-Crystal Clean, Inc. (Nasdaq: HCCI), a leading provider of parts cleaning, used oil re-refining, and hazardous and non-hazardous waste services primarily focused on small and mid-sized customers, today announced results for the first quarter which ended March 27, 2021.
First Quarter Review
Revenue for the first quarter of 2021 was
Overall Operating Margin jumped to
Net income for the first quarter was
During the first quarter we amended our credit agreement and paid off our
President and CEO Brian Recatto commented, "We are very pleased with the level of profitability achieved during the first quarter and realize it would not have been possible without the support of our loyal customers and the unrelenting efforts of our entire team."
Segments
Our Environmental Services segment includes parts cleaning, containerized waste, wastewater and vacuum, antifreeze recycling, and field services. Environmental Services revenue was
Recatto commented, "During the first quarter our team continued to make progress in overcoming the negative effects of the COVID-19 pandemic. We are proud of the fact that our team worked hard to provide the great service our customers have come to expect while doing so in a safe manner despite the disruptive winter storms which occurred in several parts of the U.S. market."
Our Oil Business segment includes used oil collection activities, re-refining activities, and sales of recycled fuel oil. During the first quarter of fiscal 2021, Oil Business revenues were a first quarter record of
Recatto commented, "We continued to execute well at our re-refinery during the first quarter which enabled us to produce
COVID-19 Update
During the first quarter of 2021, we continued executing the Company's pandemic response plan to combat the COVID-19 outbreak-induced downturn in our business and remain focused on ensuring the health and safety of all our employees and their families.
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: developments in the COVID-19 pandemic and the resulting impact on our business and operations, 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; our ability to enforce our rights under the FCC Environmental purchase agreement; 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 ability to expand our non-hazardous programs for parts cleaning; 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 2, 2021. 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, and hazardous and non-hazardous waste services primarily to small and mid-sized customers in the vehicle maintenance sector as well as manufacturers and other industrial businesses. Our service programs include parts cleaning, containerized waste management, used oil collection and re-refining, wastewater and vacuum, waste antifreeze collection, recycling and product sales, and field services. These services help our customers manage their used chemicals and liquid and solid wastes, while also helping to minimize their regulatory burdens. Our customers include businesses involved in vehicle maintenance operations, such as car dealerships, automotive repair shops, and trucking firms, as well as small-to-medium sized manufacturers, such as metal product fabricators and printers, and other industrial businesses. Through our used oil re-refining program during fiscal 2020, we recycled approximately 61 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 2020 we recycled approximately 3.7 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 2020 we recycled 4 million gallons of used solvent into virgin-quality solvent to be used again by our customers. Through our containerized waste program during fiscal 2020 we collected 20 tons of regulated waste which was sent for energy recovery. Through our wastewater and vacuum services program during fiscal 2020 we treated approximately 52 million gallons of wastewater. Heritage-Crystal Clean, Inc. is headquartered in Elgin, Illinois, and operates through 89 branches serving approximately 89,000 customer locations.
Conference Call
The Company will host a conference call on Wednesday May 5, 2021 at 9:30 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, http://crystal-clean.com/investor-relations/, and can participate on the call by dialing (833) 772-0398. After dialing the number, you will be required to provide the following passcode before being joined to the conference call: 4669677.
The Company uses its website to make information available to investors and the public at www.crystal-clean.com.
Heritage-Crystal Clean, Inc. |
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Condensed Consolidated Balance Sheets |
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(In Thousands, Except Share and Par Value Amounts) |
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(Unaudited) |
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March 27, |
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January 2, |
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2021 |
2021 |
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ASSETS |
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Current assets: |
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|
|
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Cash and cash equivalents |
|
$ |
46,669 |
|
|
$ |
67,575 |
|
Accounts receivable - net |
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52,614 |
|
|
48,479 |
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Inventory - net |
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25,530 |
|
|
24,978 |
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Assets held for sale |
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2,446 |
|
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2,446 |
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Other current assets |
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5,574 |
|
|
8,005 |
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Total current assets |
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132,833 |
|
|
151,483 |
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Property, plant and equipment - net |
|
154,747 |
|
|
153,016 |
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Right of use assets |
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76,089 |
|
|
78,942 |
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Equipment at customers - net |
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23,930 |
|
|
23,111 |
|
||
Software and intangible assets - net |
|
18,484 |
|
|
19,576 |
|
||
Goodwill |
|
35,541 |
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FAQ
What were Heritage-Crystal Clean's (HCCI) Q1 2021 earnings?
Heritage-Crystal Clean reported Q1 2021 net income of $9.2 million, or $0.39 per share.
How much did Heritage-Crystal Clean's revenue decline in Q1 2021?
The revenue for Q1 2021 was $105.4 million, a decrease of 1.8% compared to $107.3 million in Q1 2020.
What contributed to the increase in Heritage-Crystal Clean's operating margin?
The operating margin increased to 24.8% due to strong performance from the Oil Business segment.
What were the revenue figures for the Oil Business segment in Q1 2021?
The Oil Business segment achieved a record revenue of $35.9 million, reflecting a 21% increase compared to Q1 2020.
Heritage-Crystal Clean, Inc
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