Heritage-Crystal Clean, Inc. Announces Record Third Quarter 2022 Financial ResultsOctober 19, 2022 at 16:30 PM EDT
Third Quarter Highlights Include:
Heritage-Crystal Clean, Inc. (Nasdaq: HCCI), a leading provider of parts cleaning, used oil re-refining, hazardous and non-hazardous waste disposal, emergency and spill response, and industrial and field services, today announced results for the third quarter which ended September 10, 2022. Third Quarter Review Revenue for the third quarter of 2022 was $172.2 million compared to $123.2 million for the same quarter of 2021, an increase of 39.8%. Overall operating margin during the quarter increased by $12.3 million or 31.6%, driven by growth in our Environmental Services segment and both growth and improved profitability in our Oil Business segment, compared to the third quarter of 2021. Our third quarter corporate SG&A expense was $18.6 million, or 10.8% of revenue, compared to $14.4 million, or 11.7% of revenue, for the third quarter of 2021. Net income for the third quarter was $23.2 million compared to net income of $18.5 million in the year-ago quarter. Basic earnings per share were $0.98 compared $0.79 in the year-ago quarter. Segments Our Environmental Services segment includes parts cleaning, hazardous and non-hazardous waste disposal, wastewater vacuum, antifreeze recycling, emergency and spill response, and industrial and field services. Environmental Services revenue was $106.7 million during the quarter compared to $72.3 million during the third quarter of fiscal 2021. The 47.5% increase in revenue was mainly due to the increase in demand for our services compared to the prior year quarter and by revenue from acquisitions. We experienced revenue increases across all service lines in the segment when compared to the third quarter of 2021. The revenue increases were driven by improvement in both price and volume in all service lines. Environmental Services profit before corporate selling, general, and administrative expenses was $24.8 million, or 23.2% of revenue, compared to $17.3 million, or 23.9% of revenue, in the year-ago quarter. The decrease in operating margin percentage was mainly driven by higher transportation costs caused by extraordinarily high inflation and increased equipment rental costs. President and CEO Brian Recatto commented, "While our operating margin percentage was down slightly compared to last year, we are pleased that we were able to improve our operating margin percentage incrementally compared to the second quarter. The improvement was primarily the result of price actions initiated during the latter portion of the second quarter. While we face ongoing inflationary pressure in various parts of our Environmental Services segment, we continue to fight to preserve and improve our operating margin while consistently growing our revenue." Our Oil Business segment includes used oil collection and re-refining activities, as well as sales of recycled fuel oil. During the third quarter of fiscal 2022, Oil Business revenue was a record high for a 12-week quarter at $65.5 million, an increase of $14.7 million, or 28.9%, compared to $50.8 million in the third quarter of fiscal 2021. An increase in base oil prices was the main driver of the increase in revenue. Oil Business segment operating margin decreased to 40.6% in the third quarter of 2022 compared to a record high of 42.8% in the third quarter of fiscal 2021. The lower operating margin compared to the third quarter of 2021 was mainly due to an increase in transportation related expenses, increased downtime at the re-refinery and other inflationary pressures across the segment which offset an improvement in the spread between the netback (sales price net of freight impact) on our base oil sales and the price paid/charged to our customers for the removal of their used oil. Recatto commented, "We continued to manage the spreads in our Oil Business effectively, which allowed us to take advantage of high base oil prices during the quarter. Despite inflationary pressure in various areas, we were able to deliver an operating margin in excess of 40% for the second consecutive quarter for the first time in our history." 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; 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; the impact of inflationary pressures on our business; 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 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, 2022. 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 2021, 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 2021 we recycled approximately 3.9 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 2021 we recycled 2 million gallons of used solvent into virgin-quality solvent to be used again by our customers. In addition, we sold 0.5 million gallons of used solvent into the reuse market. Through our containerized waste program during fiscal 2021 we collected 21 thousand tons of regulated waste which was sent for energy recovery. Through our wastewater vacuum services program during fiscal 2021 we treated approximately 49 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 103,000 customer locations. Conference Call The Company will host a conference call on Thursday October 20, 2022 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, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221019006040/en/ ContactsMark DeVita, Chief Financial Officer, at (847) 836-5670
Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions. |
|
Stock Quote
Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions. |
|