Heritage-Crystal Clean, Inc. Announces Second Quarter 2023 Financial Results
- Heritage-Crystal Clean, Inc. reported a record high revenue of $192.2 million for the second quarter, representing a 22.7% increase from the same quarter last year.
- The Environmental Services segment achieved a record high revenue of $96.0 million, a 22.8% increase from the year-ago quarter.
- The Industrial and Field Services segment experienced a significant revenue increase of 243.5% to $47.1 million.
- However, overall operating profit decreased by $9.5 million compared to the second quarter of 2022.
- Net income for the second quarter was $8.6 million, a decrease from $21.1 million in the year-ago quarter.
- None.
Second Quarter Highlights Include:
-
Revenue for the second quarter of 2023 was
$192.2 million $156.6 million 22.7% .
-
Environmental Services segment revenue of
$96.0 million 22.8% from the year-ago quarter.
-
Environmental Services segment profit before corporate selling, general and administrative expenses was a three-month quarter record of
$23.9 million 28.3% from the recast profit of the year-ago quarter.
-
Industrial and Field Services segment revenue was a record
$47.1 million 243.5% from the year-ago quarter. Compared to the first quarter of 2023, this represents an increase of$1.3 million 3% .
-
Industrial and Field Services segment profit before corporate selling, general and administrative expenses was
$7.5 million $6.3 million
Second 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 second quarter of 2023 includes 5 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
Revenue for the second quarter of 2023 was
Overall operating profit decreased by
Net income for the second quarter was
Heritage-Crystal Clean, Inc. Acquisition by J.F. Lehman & Company
On July 19, 2023, the Company announced that it has entered into a definitive merger agreement (the “merger agreement”) to be acquired by an investment affiliate of J.F. Lehman & Company (“JFLCO”), a leading private equity investment firm focused on the aerospace, defense, maritime and environmental sectors, in an all-cash transaction that values the Company at approximately
Due to the pending transaction with J.F. Lehman, the Company will not be hosting a conference call for the second quarter of 2023.
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 & Field Services." Prior period segment results presented for comparative purposes below have been recast to reflect the newly reportable segment, Industrial & 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
President and CEO Brian Recatto commented, "We are pleased with the strong revenue growth and continued improvement in the operating margin in this segment. Early in the third quarter, we implemented another price increase in our containerized waste business to help offset continual cost increases from some of our disposal vendors. We are confident this action will allow us to show continued, incremental improvement in our operating margin percentage in this segment in the coming quarters."
The Industrial & 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 & Field Services revenue was
Recatto commented, "Despite activity at some of our customers in this segment being less than forecasted, we were still able to produce incremental revenue growth and higher operating margin dollars compared to the first quarter of 2023. We are also optimistic that we will generate additional growth as we continue to invest and expand our PFAS infrastructure and service offering."
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 2023, Oil Business revenue was
Recatto commented, "Despite a significant decline in base oil netback, a soft demand market for base oil, and intentionally moving up the timing of our annual extended turnaround to the second quarter, we were still able to produce an operating margin percentage which was consistent with our second quarter conference call expectations.
Since the end of the second quarter we have made great progress on lowering our pay-for-oil. Early in the third quarter of 2023, on a run-rate basis, our pay-for-oil has decreased by approximately
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: the occurrence of any event, change or other circumstances that could give rise to the termination of our merger agreement with JFLCO; the inability to complete the proposed merger with JFLCO due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger; risks related to disruption of management’s attention from the Company's ongoing business operations due to the proposed merger; unexpected costs, charges or expenses resulting from the proposed merger; The Company's ability to retain and hire key personnel in light of the proposed merger; certain restrictions during the pendency of the proposed merger that may impact the Company's ability to pursue certain business opportunities or strategic transactions; the ability of the buyer to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the proposed merger; potential litigation relating to the proposed merger that could be instituted against the parties to the merger agreement or their respective directors, managers or officers, including the effects of any outcomes related thereto; the effect of the announcement of the proposed merger on the Company's relationships with its customers, operating results and business generally; and the risk that the proposed merger will not be consummated in a timely manner, if at all; 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
Participants in the Solicitation
The Company and JFLCO and their respective directors, executive officers and other members of management and employees, under Securities and Exchange Commission (“SEC”) rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of the Company in favor of the proposed merger. Information about the Company’s directors and executive officers is set forth in the Company's Proxy Statement on Schedule 14A for its 2023 Annual Meeting of Shareholders, which was filed with the SEC on May 1, 2023. To the extent holdings of the Company’s securities by its directors or executive officers have changed since the amounts set forth in such 2023 proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of the Company's participants in the solicitation, which may, in some cases, be different than those of the Company's stockholders generally, will be set forth in the Company's proxy statement relating to the proposed merger when it becomes available.
Additional Information and Where to Find It
This release may be deemed to be solicitation material in respect of the proposed acquisition of the Company by JFLCO. In connection with the proposed transaction, the Company intends to file relevant materials with the SEC, including a proxy statement in preliminary and definitive form. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE COMPANY'S PROXY STATEMENT (IF AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. INVESTORS AND SECURITY HOLDERS ARE OR WILL BE ABLE TO OBTAIN THE DOCUMENTS (if and when available) free of charge at the SEC’s website at www.sec.gov, or free of charge from the Company by directing a request to Mark DeVita, EVP & CFO, at mark.devita@crystal-clean.com.
No Offer or Solicitation
This release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in
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
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) |
||||||||
|
|
June 30,
|
|
December 31,
|
||||
|
|
(unaudited) |
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
33,100 |
|
|
$ |
22,053 |
|
Accounts receivable - net |
|
|
104,704 |
|
|
|
114,408 |
|
Inventory - net |
|
|
47,024 |
|
|
|
40,727 |
|
Assets held for sale |
|
|
— |
|
|
|
1,125 |
|
Other current assets |
|
|
14,652 |
|
|
|
12,989 |
|
Total current assets |
|
|
199,480 |
|
|
|
191,302 |
|
Property, plant and equipment - net |
|
|
232,318 |
|
|
|
222,942 |
|
Right of use assets |
|
|
126,290 |
|
|
|
123,742 |
|
Equipment at customers - net |
|
|
30,157 |
|
|
|
26,465 |
|
Software and intangible assets - net |
|
|
97,091 |
|
|
|
102,335 |
|
Goodwill |
|
|
112,236 |
|
|
|
112,236 |
|
Other assets |
|
|
15,219 |
|
|
|
15,219 |
|
Total assets |
|
$ |
812,791 |
|
|
$ |
794,241 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
52,602 |
|
|
$ |
55,087 |
|
Current portion of lease liabilities |
|
|
28,490 |
|
|
|
27,277 |
|
Contract liabilities - net |
|
|
3,259 |
|
|
|
2,525 |
|
Accrued salaries, wages, and benefits |
|
|
9,339 |
|
|
|
12,443 |
|
Taxes payable |
|
|
3,211 |
|
|
|
6,037 |
|
Other current liabilities |
|
|
10,553 |
|
|
|
12,382 |
|
Total current liabilities |
|
|
107,454 |
|
|
|
115,751 |
|
Lease liabilities, net of current portion |
|
|
103,426 |
|
|
|
100,738 |
|
Other long term liabilities |
|
|
770 |
|
|
|
986 |
|
Long-term debt, net of current portion |
|
|
84,479 |
|
|
|
89,383 |
|
Deferred income taxes |
|
|
60,765 |
|
|
|
57,155 |
|
Total liabilities |
|
$ |
356,894 |
|
|
$ |
364,013 |
|
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY: |
|
|
|
|
||||
Common stock - 36,000,000 shares authorized at |
|
$ |
237 |
|
|
$ |
236 |
|
Additional paid-in capital |
|
|
208,913 |
|
|
|
208,533 |
|
Retained earnings |
|
|
247,057 |
|
|
|
221,826 |
|
Accumulated other comprehensive loss |
|
|
(310 |
) |
|
|
(367 |
) |
Total stockholders' equity |
|
|
455,897 |
|
|
|
430,228 |
|
|
|
|
|
|
||||
Total liabilities and stockholders' equity |
|
$ |
812,791 |
|
|
$ |
794,241 |
|
Heritage-Crystal Clean, Inc. Condensed Consolidated Statements of Income (In Thousands, Except per Share Amounts) (Unaudited) |
||||||||||||||
|
|
Second Quarter Ended, |
|
First Half Ended, |
||||||||||
|
|
June 30, 2023
|
|
June 18, 2022
|
|
June 30, 2023
|
|
June 18, 2022
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Revenues |
|
|
|
|
|
|
|
|
||||||
Service revenues |
|
$ |
121,342 |
|
|
$ |
75,584 |
|
$ |
240,794 |
|
|
$ |
144,500 |
Product revenues |
|
|
62,141 |
|
|
|
74,789 |
|
|
128,481 |
|
|
|
139,262 |
Rental income |
|
|
8,683 |
|
|
|
6,274 |
|
|
16,372 |
|
|
|
12,251 |
Total revenues |
|
$ |
192,166 |
|
|
$ |
156,647 |
|
$ |
385,647 |
|
|
$ |
296,013 |
|
|
|
|
|
|
|
|
|
||||||
Operating expenses |
|
|
|
|
|
|
|
|
||||||
Operating costs |
|
$ |
146,387 |
|
|
$ |
104,755 |
|
$ |
286,448 |
|
|
$ |
206,538 |
Selling, general, and administrative expenses |
|
|
20,361 |
|
|
|
15,024 |
|
|
38,061 |
|
|
|
28,759 |
Depreciation and amortization |
|
|
11,802 |
|
|
|
6,777 |
|
|
23,969 |
|
|
|
13,285 |
Other (income) expense - net |
|
|
(265 |
) |
|
|
1,001 |
|
|
(734 |
) |
|
|
791 |
Operating income |
|
|
13,881 |
|
|
|
29,090 |
|
|
37,903 |
|
|
|
46,640 |
Interest expense – net |
|
|
1,929 |
|
|
|
250 |
|
|
3,743 |
|
|
|
473 |
Income before income taxes |
|
|
11,952 |
|
|
|
28,840 |
|
|
34,160 |
|
|
|
46,167 |
Provision for income taxes |
|
|
3,310 |
|
|
|
7,733 |
|
|
8,929 |
|
|
|
12,182 |
Net income |
|
$ |
8,642 |
|
|
$ |
21,107 |
|
$ |
25,231 |
|
|
$ |
33,985 |
|
|
|
|
|
|
|
|
|
||||||
Net income per share: basic |
|
$ |
0.36 |
|
|
$ |
0.90 |
|
$ |
1.07 |
|
|
$ |
1.45 |
Net income per share: diluted |
|
$ |
0.36 |
|
|
$ |
0.89 |
|
$ |
1.06 |
|
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
||||||
Number of weighted average shares outstanding: basic |
|
|
23,681 |
|
|
|
23,489 |
|
|
23,665 |
|
|
|
23,482 |
Number of weighted average shares outstanding: diluted |
|
|
23,931 |
|
|
|
23,644 |
|
|
23,898 |
|
|
|
23,640 |
Heritage-Crystal Clean, Inc. Reconciliation of Operating Segment Information (Unaudited)
|
|||||||||||||||||
Second Quarter Ended, |
|||||||||||||||||
June 30, 2023
|
|||||||||||||||||
(thousands) |
|
Environmental Services |
|
Oil Business |
|
Industrial and Field Services |
|
Corporate and Eliminations |
|
Consolidated |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenues |
|
$ |
72,018 |
|
$ |
2,855 |
|
$ |
46,469 |
|
$ |
— |
|
|
$ |
121,342 |
|
Product revenues |
|
|
15,875 |
|
|
46,266 |
|
|
— |
|
|
— |
|
|
|
62,141 |
|
Rental income |
|
|
8,072 |
|
|
11 |
|
|
600 |
|
|
— |
|
|
|
8,683 |
|
Total revenues |
|
$ |
95,965 |
|
$ |
49,132 |
|
$ |
47,069 |
|
$ |
— |
|
|
$ |
192,166 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating costs |
|
|
68,459 |
|
|
40,781 |
|
|
37,147 |
|
|
— |
|
|
|
146,387 |
|
Operating depreciation and amortization |
|
|
3,641 |
|
|
2,675 |
|
|
2,398 |
|
|
— |
|
|
|
8,714 |
|
Profit before corporate selling, general, and administrative expenses |
|
$ |
23,865 |
|
$ |
5,676 |
|
$ |
7,524 |
|
$ |
— |
|
|
$ |
37,065 |
|
Selling, general, and administrative expenses |
|
|
|
|
|
|
|
|
20,361 |
|
|
|
20,361 |
|
|||
Depreciation and amortization from SG&A |
|
|
|
|
|
|
|
|
3,088 |
|
|
|
3,088 |
|
|||
Total selling, general, and administrative expenses |
|
|
|
|
|
|
|
$ |
23,449 |
|
|
$ |
23,449 |
|
|||
Other (income) - net |
|
|
|
|
|
|
|
|
(265 |
) |
|
|
(265 |
) |
|||
Operating income |
|
|
|
|
|
|
|
|
|
|
13,881 |
|
|||||
Interest expense – net |
|
|
|
|
|
|
|
|
1,929 |
|
|
|
1,929 |
|
|||
Income before income taxes |
|
|
|
|
|
|
|
|
|
$ |
11,952 |
|
|||||
Second Quarter Ended, |
|||||||||||||||
June 18, 2022
|
|||||||||||||||
(thousands) |
|
Environmental Services |
|
Oil Business |
|
Industrial and Field Services |
|
Corporate and Eliminations |
|
Consolidated |
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues |
|
$ |
59,277 |
|
$ |
2,604 |
|
$ |
13,703 |
|
$ |
— |
|
$ |
75,584 |
Product revenues |
|
|
12,633 |
|
|
62,156 |
|
|
— |
|
|
— |
|
|
74,789 |
Rental income |
|
|
6,265 |
|
|
9 |
|
|
— |
|
|
— |
|
|
6,274 |
Total revenues |
|
$ |
78,175 |
|
$ |
64,769 |
|
$ |
13,703 |
|
$ |
— |
|
$ |
156,647 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|||||
Operating costs |
|
|
56,812 |
|
|
35,841 |
|
|
12,102 |
|
|
— |
|
|
104,755 |
Operating depreciation and amortization |
|
|
2,769 |
|
|
2,125 |
|
|
423 |
|
|
— |
|
|
5,317 |
Profit before corporate selling, general, and administrative expenses |
|
$ |
18,594 |
|
$ |
26,803 |
|
$ |
1,178 |
|
$ |
— |
|
$ |
46,575 |
Selling, general, and administrative expenses |
|
|
|
|
|
|
|
|
15,024 |
|
|
15,024 |
|||
Depreciation and amortization from SG&A |
|
|
|
|
|
|
|
|
1,460 |
|
|
1,460 |
|||
Total selling, general, and administrative expenses |
|
|
|
|
|
|
|
$ |
16,484 |
|
$ |
16,484 |
|||
Other expense - net |
|
|
|
|
|
|
|
|
1,001 |
|
|
1,001 |
|||
Operating income |
|
|
|
|
|
|
|
|
|
|
29,090 |
||||
Interest expense – net |
|
|
|
|
|
|
|
|
250 |
|
|
250 |
|||
Income before income taxes |
|
|
|
|
|
|
|
|
|
$ |
28,840 |
||||
First Half Ended, |
|||||||||||||||||
June 30, 2023
|
|||||||||||||||||
(thousands) |
|
Environmental Services |
|
Oil Business |
|
Industrial and Field Services |
|
Corporate and Eliminations |
|
Consolidated |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenues |
|
$ |
143,018 |
|
$ |
5,665 |
|
$ |
92,111 |
|
$ |
— |
|
|
$ |
240,794 |
|
Product revenues |
|
|
32,075 |
|
|
96,406 |
|
|
— |
|
|
— |
|
|
|
128,481 |
|
Rental income |
|
|
15,639 |
|
|
17 |
|
|
716 |
|
|
— |
|
|
|
16,372 |
|
Total revenues |
|
$ |
190,732 |
|
$ |
102,088 |
|
$ |
92,827 |
|
$ |
— |
|
|
$ |
385,647 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating costs |
|
|
136,999 |
|
|
77,079 |
|
|
72,370 |
|
|
— |
|
|
|
286,448 |
|
Operating depreciation and amortization |
|
|
7,140 |
|
|
5,280 |
|
|
5,476 |
|
|
— |
|
|
|
17,896 |
|
Profit before corporate selling, general, and administrative expenses |
|
$ |
46,593 |
|
$ |
19,729 |
|
$ |
14,981 |
|
$ |
— |
|
|
$ |
81,303 |
|
Selling, general, and administrative expenses |
|
|
|
|
|
|
|
|
38,061 |
|
|
|
38,061 |
|
|||
Depreciation and amortization from SG&A |
|
|
|
|
|
|
|
|
6,073 |
|
|
|
6,073 |
|
|||
Total selling, general, and administrative expenses |
|
|
|
|
|
|
|
$ |
44,134 |
|
|
$ |
44,134 |
|
|||
Other (income) - net |
|
|
|
|
|
|
|
|
(734 |
) |
|
|
(734 |
) |
|||
Operating income |
|
|
|
|
|
|
|
|
|
|
37,903 |
|
|||||
Interest expense – net |
|
|
|
|
|
|
|
|
3,743 |
|
|
|
3,743 |
|
|||
Income before income taxes |
|
|
|
|
|
|
|
|
|
$ |
34,160 |
|
|||||
First Half Ended, |
|||||||||||||||
June 18, 2022
|
|||||||||||||||
(thousands) |
|
Environmental Services |
|
Oil Business |
|
Industrial and Field Services |
|
Corporate and Eliminations |
|
Consolidated |
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues |
|
$ |
114,479 |
|
$ |
5,212 |
|
$ |
24,809 |
|
$ |
— |
|
$ |
144,500 |
Product revenues |
|
|
25,013 |
|
|
114,249 |
|
|
— |
|
|
— |
|
|
139,262 |
Rental income |
|
|
12,228 |
|
|
23 |
|
|
— |
|
|
— |
|
|
12,251 |
Total revenues |
|
$ |
151,720 |
|
$ |
119,484 |
|
$ |
24,809 |
|
$ |
— |
|
$ |
296,013 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|||||
Operating costs |
|
|
114,837 |
|
|
70,006 |
|
|
21,695 |
|
|
— |
|
|
206,538 |
Operating depreciation and amortization |
|
|
5,236 |
|
|
4,209 |
|
|
845 |
|
|
— |
|
|
10,290 |
Profit before corporate selling, general, and administrative expenses |
|
$ |
31,647 |
|
$ |
45,269 |
|
$ |
2,269 |
|
$ |
— |
|
$ |
79,185 |
Selling, general, and administrative expenses |
|
|
|
|
|
|
|
|
28,759 |
|
|
28,759 |
|||
Depreciation and amortization from SG&A |
|
|
|
|
|
|
|
|
2,995 |
|
|
2,995 |
|||
Total selling, general, and administrative expenses |
|
|
|
|
|
|
|
$ |
31,754 |
|
$ |
31,754 |
|||
Other expense - net |
|
|
|
|
|
|
|
|
791 |
|
|
791 |
|||
Operating income |
|
|
|
|
|
|
|
|
|
|
46,640 |
||||
Interest expense – net |
|
|
|
|
|
|
|
|
473 |
|
|
473 |
|||
Income before income taxes |
|
|
|
|
|
|
|
|
|
$ |
46,167 |
||||
Heritage-Crystal Clean, Inc. |
||||||||||||
Reconciliation of our Net Income Determined in Accordance with |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
Second Quarter Ended, |
|
First Half Ended, |
||||||||
|
|
|
|
|
|
|
|
|
||||
(thousands) |
|
June 30, 2023
|
|
June 18, 2022
|
|
June 30, 2023
|
|
June 18, 2022
|
||||
Net income |
|
$ |
8,642 |
|
$ |
21,107 |
|
$ |
25,231 |
|
$ |
33,985 |
Interest expense – net |
|
|
1,929 |
|
|
250 |
|
|
3,743 |
|
|
473 |
Provision for income taxes |
|
|
3,310 |
|
|
7,733 |
|
|
8,929 |
|
|
12,182 |
Depreciation and amortization |
|
|
11,802 |
|
|
6,777 |
|
|
23,969 |
|
|
13,285 |
EBITDA (a) |
|
$ |
25,683 |
|
$ |
35,867 |
|
$ |
61,872 |
|
$ |
59,925 |
Non-cash compensation (b) |
|
|
1,197 |
|
|
1,292 |
|
|
2,455 |
|
|
2,785 |
Costs associated with mergers and business acquisitions (c) |
|
|
458 |
|
|
823 |
|
|
507 |
|
|
835 |
Loss on disposal of re-refinery assets (d) |
|
|
— |
|
|
1,194 |
|
|
— |
|
|
1,194 |
Provision for civil action settlement (e) |
|
|
— |
|
|
750 |
|
|
— |
|
|
750 |
Adjusted EBITDA (f) |
|
$ |
27,338 |
|
$ |
39,926 |
|
$ |
64,834 |
|
$ |
65,489 |
(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 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
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 |
||||||||||
|
|
|||||||||
(b) |
Non-cash compensation expenses which are recorded in SG&A. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
(c) |
Costs associated with mergers and business acquisitions which are recorded in SG&A. |
|||||||||
|
|
|||||||||
(d) |
Loss on disposal of assets related to our re-refinery operations. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
(e) |
Civil action settlement accrual recorded in Corporate SG&A Expense. |
|||||||||
|
|
|||||||||
(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 |
|||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809666854/en/
Mark DeVita, Executive Vice President and Chief Financial Officer, at (847) 836-5670
Source: Heritage-Crystal Clean, Inc.
FAQ
What was Heritage-Crystal Clean, Inc.'s second-quarter revenue?
What was the revenue of the Environmental Services segment?
What was the revenue of the Industrial and Field Services segment?
Did Heritage-Crystal Clean, Inc.'s operating profit increase or decrease in the second quarter?
What was Heritage-Crystal Clean, Inc.'s net income for the second quarter?
