Heritage-Crystal Clean, Inc. Announces Record Second Quarter 2021 Financial Results
Heritage-Crystal Clean (HCCI) reported a robust second quarter for 2021, with revenue of $117.3 million, up 47.4% from $79.5 million year-over-year. The operating margin surged to 17.6%, aided by strong performance in its Oil Business segment, which achieved a record revenue of $44.6 million, reflecting a 126.0% increase from the previous year. Net income reached $15.1 million, a significant turnaround from a net loss of $2.7 million in Q2 2020. Basic earnings per share improved to $0.65 from a loss of $0.11.
- Revenue increased by 47.4% year-over-year to $117.3 million.
- Operating margin improved to 17.6% from a negative margin of 3.2% year-over-year.
- Net income rose to $15.1 million, a substantial recovery from a net loss of $2.7 million in Q2 2020.
- Basic earnings per share improved to $0.65 from a loss of $0.11 in the previous year.
- Oil Business segment revenue set a record at $44.6 million, up 126.0% year-over-year.
- None.
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 second quarter which ended June 19, 2021.
Second Quarter Review
Revenue for the second quarter of 2021 was
Overall Operating Margin jumped to
Net income for the second quarter was
President and CEO Brian Recatto commented, "We are very excited with our overall results for the second quarter. We are also pleased that both segments made significant contributions during the quarter to help achieve our record-setting results."
Segments
Our Environmental Services segment includes parts cleaning, containerized waste, wastewater vacuum, antifreeze recycling, and field services. Environmental Services revenue was
Recatto commented, "During the second quarter our team worked hard to put the negative impacts of the COVID-19 pandemic behind us and get back to growing our business. We were pleased that segment revenue during the quarter exceeded segment revenue during the second quarter of 2019 by
Our Oil Business segment includes used oil collection and re-refining activities, as well as sales of recycled fuel oil. During the second quarter of fiscal 2021, Oil Business revenue was a second quarter record of
Recatto commented, "We continued to execute well at our re-refinery during the second quarter which enabled us to produce more base oil volume compared to the prior year quarter when we intentionally idled the facility due to the negative impact of the COVID-19 pandemic. This allowed us to take advantage of very favorable base oil pricing conditions to produce record profitability in our Oil Business segment during the second quarter."
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 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 thousand tons of regulated waste which was sent for energy recovery. Through our wastewater 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 Thursday July 29, 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: 6091366.
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) |
||||||||
|
|
June 19,
|
|
January 2,
|
||||
|
|
|
|
|||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
67,272 |
|
|
$ |
67,575 |
|
Accounts receivable - net |
|
59,393 |
|
|
48,479 |
|
||
Inventory - net |
|
25,956 |
|
|
24,978 |
|
||
Assets held for sale |
|
1,125 |
|
|
2,446 |
|
||
Other current assets |
|
5,053 |
|
|
8,005 |
|
||
Total current assets |
|
158,799 |
|
|
151,483 |
|
||
Property, plant and equipment - net |
|
156,039 |
|
|
153,016 |
|
||
Right of use assets |
|
76,908 |
|
|
78,942 |
|
||
Equipment at customers - net |
|
23,950 |
|
|
23,111 |
|
||
Software and intangible assets - net |
|
17,824 |
|
|
19,576 |
|
||
Goodwill |
|
35,541 |
|
|
35,541 |
|
||
Other assets |
|
780 |
|
|
— |
|
||
Total assets |
|
$ |
469,841 |
|
|
$ |
461,669 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
32,186 |
|
|
$ |
29,663 |
|
Current portion of lease liabilities |
|
20,770 |
|
|
19,198 |
|
||
Contract liabilities - net |
|
2,314 |
|
|
1,983 |
|
||
Accrued salaries, wages, and benefits |
|
6,154 |
|
|
6,647 |
|
||
Taxes payable |
|
10,120 |
|
|
10,592 |
|
||
Other current liabilities |
|
6,341 |
|
|
4,918 |
|
||
Total current liabilities |
|
77,885 |
|
|
73,001 |
|
||
Lease liabilities, net of current portion |
|
57,904 |
|
|
60,294 |
|
||
Long-term debt, less current maturities |
|
— |
|
|
29,656 |
|
||
Other long term liabilities |
|
196 |
|
|
— |
|
||
Deferred income taxes |
|
29,830 |
|
|
21,218 |
|
||
Total liabilities |
|
$ |
165,815 |
|
|
$ |
184,169 |
|
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY: |
|
|
|
|
||||
Common stock - 26,000,000 shares authorized at |
|
$ |
234 |
|
|
$ |
233 |
|
Additional paid-in capital |
|
203,356 |
|
|
201,148 |
|
||
Retained earnings |
|
100,436 |
|
|
76,119 |
|
||
Total stockholders' equity |
|
$ |
304,026 |
|
|
$ |
277,500 |
|
|
|
|
|
|
||||
Total liabilities and stockholders' equity |
|
$ |
469,841 |
|
|
$ |
461,669 |
|
Heritage-Crystal Clean, Inc. |
|||||||||||||||||||||
Condensed Consolidated Statements of Income |
|||||||||||||||||||||
(In Thousands, Except per Share Amounts) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
|
|
|
Second Quarter Ended, |
|
First Half Ended, |
||||||||||||||||
|
|
|
June 19,
|
|
June 13,
|
|
June 19,
|
|
June 13,
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|||||||||||||
|
Service revenues |
|
$ |
60,033 |
|
|
|
$ |
52,247 |
|
|
|
$ |
117,732 |
|
|
|
$ |
116,004 |
|
|
|
Product revenues |
|
51,551 |
|
|
|
21,863 |
|
|
|
93,817 |
|
|
|
59,584 |
|
|
||||
|
Rental income |
|
5,695 |
|
|
|
5,408 |
|
|
|
11,111 |
|
|
|
11,194 |
|
|
||||
Total revenues |
|
$ |
117,279 |
|
|
|
$ |
79,518 |
|
|
|
$ |
222,660 |
|
|
|
$ |
186,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|||||||||||||
|
Operating costs |
|
$ |
78,329 |
|
|
|
$ |
72,293 |
|
|
|
$ |
155,099 |
|
|
|
$ |
155,543 |
|
|
|
Selling, general, and administrative expenses |
|
13,039 |
|
|
|
11,134 |
|
|
|
25,228 |
|
|
|
22,656 |
|
|
||||
|
Depreciation and amortization |
|
5,619 |
|
|
|
5,455 |
|
|
|
9,401 |
|
|
|
10,723 |
|
|
||||
|
Other (income) - net |
|
(330 |
) |
|
|
(6,796 |
) |
|
|
(439 |
) |
|
|
(6,525 |
) |
|
||||
Operating income (loss) |
|
20,622 |
|
|
|
(2,568 |
) |
|
|
33,371 |
|
|
|
4,385 |
|
|
|||||
Interest expense – net |
|
177 |
|
|
|
344 |
|
|
|
501 |
|
|
|
558 |
|
|
|||||
Income (loss) before income taxes |
|
20,445 |
|
|
|
(2,912 |
) |
|
|
32,870 |
|
|
|
3,827 |
|
|
|||||
Provision for (benefit from) income taxes |
|
5,334 |
|
|
|
(254 |
) |
|
|
8,553 |
|
|
|
1,194 |
|
|
|||||
Net income (loss) |
|
$ |
15,111 |
|
|
|
$ |
(2,658 |
) |
|
|
$ |
24,317 |
|
|
|
$ |
2,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per share: basic |
|
$ |
0.65 |
|
|
|
$ |
(0.11 |
) |
|
|
$ |
1.04 |
|
|
|
$ |
0.11 |
|
|
|
Net income (loss) per share: diluted |
|
$ |
0.64 |
|
|
|
$ |
(0.11 |
) |
|
|
$ |
1.03 |
|
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Number of weighted average shares outstanding: basic |
|
23,404 |
|
|
|
23,260 |
|
|
|
23,389 |
|
|
|
23,249 |
|
|
|||||
Number of weighted average shares outstanding: diluted |
|
23,565 |
|
|
|
23,260 |
|
|
|
23,537 |
|
|
|
23,434 |
|
|
Heritage-Crystal Clean, Inc. |
|||||||||||||||
Reconciliation of Operating Segment Information |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Second Quarter Ended, |
|||||||||||||||
June 19, 2021 |
|||||||||||||||
(thousands) |
|
Environmental
|
|
Oil Business |
|
Corporate and
|
|
Consolidated |
|||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|||||||
|
Service revenues |
|
$ |
56,403 |
|
$ |
3,630 |
|
$ |
— |
|
|
$ |
60,033 |
|
|
Product revenues |
|
10,627 |
|
40,924 |
|
— |
|
|
51,551 |
|
||||
|
Rental income |
|
5,686 |
|
9 |
|
— |
|
|
5,695 |
|
||||
Total revenues |
|
$ |
72,716 |
|
$ |
44,563 |
|
$ |
— |
|
|
$ |
117,279 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|||||||
|
Operating costs |
|
51,119 |
|
27,210 |
|
— |
|
|
78,329 |
|
||||
|
Operating depreciation and amortization |
|
2,430 |
|
2,109 |
|
— |
|
|
4,539 |
|
||||
Profit before corporate selling, general, and administrative expenses |
|
$ |
19,167 |
|
$ |
15,244 |
|
$ |
— |
|
|
$ |
34,411 |
|
|
Selling, general, and administrative expenses |
|
|
|
|
|
13,039 |
|
|
13,039 |
|
|||||
Depreciation and amortization from SG&A |
|
|
|
|
|
1,080 |
|
|
1,080 |
|
|||||
Total selling, general, and administrative expenses |
|
|
|
|
|
$ |
14,119 |
|
|
$ |
14,119 |
|
|||
Other (income) - net |
|
|
|
|
|
(330 |
) |
|
(330 |
) |
|||||
Operating income |
|
|
|
|
|
|
|
20,622 |
|
||||||
Interest expense – net |
|
|
|
|
|
177 |
|
|
177 |
|
|||||
Income before income taxes |
|
|
|
|
|
|
|
$ |
20,445 |
|
Second Quarter Ended, |
||||||||||||||||
June 13, 2020 |
||||||||||||||||
(thousands) |
|
Environmental
|
|
Oil Business |
|
Corporate and
|
|
Consolidated |
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues |
|
|
|
|
|
|
|
|
||||||||
|
Service revenues |
|
$ |
46,097 |
|
$ |
6,150 |
|
|
$ |
— |
|
|
$ |
52,247 |
|
|
Product revenues |
|
8,295 |
|
13,568 |
|
|
— |
|
|
21,863 |
|
||||
|
Rental income |
|
5,408 |
|
— |
|
|
— |
|
|
5,408 |
|
||||
Total revenues |
|
$ |
59,800 |
|
$ |
19,718 |
|
|
$ |
— |
|
|
$ |
79,518 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
|
Operating costs |
|
49,104 |
|
23,189 |
|
|
— |
|
|
72,293 |
|
||||
|
Operating depreciation and amortization |
|
2,348 |
|
2,082 |
|
|
— |
|
|
4,430 |
|
||||
Profit (loss) before corporate selling, general, and administrative expenses |
|
$ |
8,348 |
|
$ |
(5,553 |
) |
|
$ |
— |
|
|
$ |
2,795 |
|
|
Selling, general, and administrative expenses |
|
|
|
|
|
11,134 |
|
|
11,134 |
|
||||||
Depreciation and amortization from SG&A |
|
|
|
|
|
1,025 |
|
|
1,025 |
|
||||||
Total selling, general, and administrative expenses |
|
|
|
|
|
$ |
12,159 |
|
|
$ |
12,159 |
|
||||
Other income - net |
|
|
|
|
|
(6,796 |
) |
|
(6,796 |
) |
||||||
Operating loss |
|
|
|
|
|
|
|
(2,568 |
) |
|||||||
Interest expense – net |
|
|
|
|
|
344 |
|
|
344 |
|
||||||
Loss before income taxes |
|
|
|
|
|
|
|
$ |
(2,912 |
) |
First Half Ended, |
|||||||||||||||
June 19, 2021 |
|||||||||||||||
(thousands) |
|
Environmental
|
|
Oil Business |
|
Corporate and
|
|
Consolidated |
|||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|||||||
|
Service revenues |
|
$ |
109,706 |
|
$ |
8,026 |
|
$ |
— |
|
|
$ |
117,732 |
|
|
Product revenues |
|
21,374 |
|
72,443 |
|
— |
|
|
93,817 |
|
||||
|
Rental income |
|
11,093 |
|
18 |
|
— |
|
|
11,111 |
|
||||
Total revenues |
|
$ |
142,173 |
|
$ |
80,487 |
|
$ |
— |
|
|
$ |
222,660 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|||||||
|
Operating costs |
|
102,999 |
|
52,100 |
|
— |
|
|
155,099 |
|
||||
|
Operating depreciation and amortization |
|
4,008 |
|
3,058 |
|
— |
|
|
7,066 |
|
||||
Profit before corporate selling, general, and administrative expenses |
|
$ |
35,166 |
|
$ |
25,329 |
|
$ |
— |
|
|
$ |
60,495 |
|
|
Selling, general, and administrative expenses |
|
|
|
|
|
25,228 |
|
|
25,228 |
|
|||||
Depreciation and amortization from SG&A |
|
|
|
|
|
2,335 |
|
|
2,335 |
|
|||||
Total selling, general, and administrative expenses |
|
|
|
|
|
$ |
27,563 |
|
|
$ |
27,563 |
|
|||
Other (income) - net |
|
|
|
|
|
(439 |
) |
|
(439 |
) |
|||||
Operating income |
|
|
|
|
|
|
|
33,371 |
|
||||||
Interest expense – net |
|
|
|
|
|
501 |
|
|
501 |
|
|||||
Income before income taxes |
|
|
|
|
|
|
|
$ |
32,870 |
|
First Half Ended, |
||||||||||||||||
June 13, 2020 |
||||||||||||||||
(thousands) |
|
Environmental Services |
|
Oil Business |
|
Corporate and
|
|
Consolidated |
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues |
|
|
|
|
|
|
|
|
||||||||
Service revenues |
|
$ |
107,056 |
|
$ |
8,948 |
|
|
$ |
— |
|
|
$ |
116,004 |
|
|
Product revenues |
|
19,023 |
|
40,561 |
|
|
— |
|
|
59,584 |
|
|||||
Rental income |
|
11,173 |
|
21 |
|
|
— |
|
|
11,194 |
|
|||||
Total revenues |
|
$ |
137,252 |
|
$ |
49,530 |
|
|
$ |
— |
|
|
$ |
186,782 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
Operating costs |
|
105,508 |
|
50,035 |
|
|
— |
|
|
155,543 |
|
|||||
Operating depreciation and amortization |
|
4,618 |
|
4,136 |
|
|
— |
|
|
8,754 |
|
|||||
Profit (loss) before corporate selling, general, and administrative expenses |
|
$ |
27,126 |
|
$ |
(4,641 |
) |
|
$ |
— |
|
|
$ |
22,485 |
|
|
Selling, general, and administrative expenses |
|
|
|
|
|
22,656 |
|
|
22,656 |
|
||||||
Depreciation and amortization from SG&A |
|
|
|
|
|
1,969 |
|
|
1,969 |
|
||||||
Total selling, general, and administrative expenses |
|
|
|
|
|
$ |
24,625 |
|
|
$ |
24,625 |
|
||||
Other income - net |
|
|
|
|
|
(6,525 |
) |
|
(6,525 |
) |
||||||
Operating income |
|
|
|
|
|
|
|
4,385 |
|
|||||||
Interest expense – net |
|
|
|
|
|
558 |
|
|
558 |
|
||||||
Income before income taxes |
|
|
|
|
|
|
|
$ |
3,827 |
|
||||||
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) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
Second Quarter Ended, |
|
First Half Ended, |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
(thousands) |
|
|
June 19, 2021 |
|
June 13, 2020 |
|
June 19, 2021 |
|
June 13, 2020 |
|||||||
Net income |
|
$ |
15,111 |
|
$ |
(2,658 |
) |
|
$ |
24,317 |
|
$ |
2,633 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense – net |
|
177 |
|
344 |
|
|
501 |
|
558 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Provision for (benefit from) income taxes |
|
5,334 |
|
(254 |
) |
|
8,553 |
|
1,194 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
5,619 |
|
5,455 |
|
|
9,401 |
|
10,723 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
EBITDA (a) |
|
|
$ |
26,241 |
|
$ |
2,887 |
|
|
$ |
42,772 |
|
$ |
15,108 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-cash compensation (b) |
|
1,668 |
|
552 |
|
|
2,886 |
|
1,621 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Retirement costs and severance (c) |
|
|
|
327 |
|
|
|
|
369 |
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and asset write-offs associated with site closures (d) |
|
|
|
|
|
|
|
138 |
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Reversal of settlement provision in excess of payout (e) |
|
|
|
(6,502 |
) |
|
|
|
(6,502 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA (f) |
|
$ |
27,909 |
|
$ |
(2,736 |
) |
|
$ |
45,658 |
|
$ |
10,734 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
(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) |
Costs associated with employee separations. |
|||||||||||||||
|
|
|||||||||||||||
(d) |
Cost associated with write-offs of site closures. |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
(e) |
Reversal of a portion of the provision for a class action settlement originally charged against income in the fourth quarter of 2019. |
|||||||||||||||
|
|
|||||||||||||||
(f) |
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/20210728006050/en/
FAQ
What were Heritage-Crystal Clean's earnings for Q2 2021?
How much revenue did HCCI generate in the second quarter of 2021?
What was HCCI's basic earnings per share for Q2 2021?
How did HCCI's Oil Business segment perform in Q2 2021?