Second Quarter Highlights Include:

-- Revenue of $105.0 million, a second quarter record, was 4.7% higher than our second quarter of 2018. -- Environmental Services segment revenue was also a second quarter record at $70.2 million, an increase of 8.9% compared to the second quarter of 2018. -- Environmental Services segment profit before corporate selling, general, and administrative expenses was a 12-week quarter high of $19.0 million, compared to $16.5 million in the second quarter of 2018. -- Net income of $7.1 million during the second quarter was a record high for a 12-week quarter. -- Diluted earnings per share for the second quarter was $0.30 compared to $0.26 in the year-ago quarter. -- EBITDA during the second quarter was $13.6 million. -- Adjusted diluted income per share for the second quarter was $0.35, which represents a record high for a 12-week quarter. -- Adjusted EBITDA was a record $15.9 million for the quarter compared to $13.9 million in the second quarter of 2018.

ELGIN, Ill., July 24, 2019 (GLOBE NEWSWIRE) -- 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 15, 2019.

Second Quarter Review

Revenue for the second quarter of 2019 was $105.0 million compared to $100.3 million for the same quarter of 2018, an increase of 4.7%.

Operating margin increased to 21.8% compared to 21.1% in the second quarter of 2018 primarily as a result of improved operating results in our Environmental Services segment. Our second quarter SG&A expense was 11.2% of revenue which is approximately 100 basis points lower than the same period in 2018 mainly driven by higher revenue and lower severance costs, partially offset by higher bad debt expense.

Net income attributable to common shareholders for the second quarter was $7.1 million compared to net income attributable to common shareholders of $6.0 million in the year earlier quarter. Diluted earnings per share was $0.30 compared to diluted earnings per share of $0.26 in the year-ago quarter. Excluding the impact of site closure costs incurred during the quarter, second quarter adjusted diluted earnings per share was $0.35.

Segments

Our Environmental Services segment includes parts cleaning, containerized waste, vacuum services, antifreeze recycling, and field services. Environmental Services revenue was $70.2 million during the quarter compared to $64.4 million during the second quarter of fiscal 2018. The 8.9% increase in revenue was driven by growth in most of our product and service lines with the antifreeze, vacuum, and containerized waste businesses being the largest contributors to growth. Excluding the impact of a large field services project from our second quarter 2018 results, our organic revenue growth in the segment during the second quarter 2019 was 11.3%. Environmental Services profit before corporate selling, general, and administrative expenses was $19.0 million, or 27.0% of revenue, compared to $16.5 million, or 25.6% of revenue, in the year-ago quarter. The $2.5 million increase was mainly driven by higher revenue along with lower disposal costs, partially offset by higher labor costs.

President and CEO Brian Recatto commented, "The second quarter represents the sixth-straight quarter of high single or double-digit revenue growth in our Environmental Services segment. This continued strong growth and improved cost management resulted in record operating profit for a 12-week quarter."

Our Oil Business segment includes used oil collection activities, re-refining activities, and sales of recycled fuel oil. During the second quarter of fiscal 2019, Oil Business revenues decreased (2.9)% to $34.8 million compared to $35.9 million in the second quarter of fiscal 2018. The decline in revenue was mainly due to a decrease in our selling price of base oil, partially offset by an increase in the volume of base oil gallons sold. Oil Business segment operating margin fell to 11.2% in the second quarter of 2019 compared to 13.0% in the second quarter of fiscal 2018. The lower operating margin compared to the second quarter of 2018 was mainly due to a decrease in the spread between our selling price for base oil and our feedstock costs.

Recatto commented, "We are encouraged by the vast improvement in oil business profitability compared to the first quarter and the overall double-digit operating margin percentage. This strong performance was mainly due to higher base oil selling prices compared to the first quarter, and record production at our re-refinery 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: 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 in the price of crude oil, the selling price of lubricating base oil, solvent, fuel, energy, and commodity costs; our ability to successfully integrate businesses that we acquire; 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 processing facilities including other 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; our ability to effectively manage our extended network of branch locations; the control of The Heritage Group over the Company; and the risks identified in our Annual Report on Form 10-K filed with the SEC on March 6, 2019 and subsequent filings with the SEC. 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, vacuum truck services, 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, we recycle 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 we recycle spent antifreeze and produce a full line of virgin-quality antifreeze products. Heritage-Crystal Clean, Inc. is headquartered in Elgin, Illinois, and operates through 91 branches serving over 95,000 customer locations.

Conference Call

The Company will host a conference call on Thursday, July 25, 2019 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 in the call by dialing (720) 545-0014.

The Company uses its website to make information available to investors and the public at www.crystal-clean.com.

CONTACT

Mark DeVita, Chief Financial Officer, at (847) 836-5670

Heritage-Crystal Clean, Inc.Condensed Consolidated Balance Sheets(In Thousands, Except Share and Par Value Amounts)(Unaudited)

June 15, December 29, 2019 2018 ---------- ------------ ASSETS Current assets: Cash and cash equivalents $ 52,168 $ 43,579 Accounts receivable - net 54,976 51,744 Inventory - net 29,052 33,059 Other current assets 7,422 6,835 --------- --------- -- Total current assets 143,618 135,217 Property, plant and equipment - net 145,599 139,987 Right of use assets 70,160 — Equipment at customers - net 23,866 23,814 Software and intangible assets - net 16,756 14,681 Goodwill 32,742 34,123 --------- Total assets $ 432,741 $ 347,822 - ------- - ------- -- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 38,323 $ 32,630 Current portion of lease liabilities 20,708 — Contract liabilities - net 2,371 166 Accrued salaries, wages, and benefits 4,890 6,024 Taxes payable 6,924 6,120 Other current liabilities 5,670 5,089 --------- --------- -- Total current liabilities 78,886 50,029 Lease liabilities, net of current portion 49,894 — Long-term debt 29,186 29,046 Deferred income taxes 15,666 14,516 --------- --------- -- Total liabilities $ 173,632 $ 93,591 STOCKHOLDERS' EQUITY: Common stock - 26,000,000 shares authorized at $0.01 par value, 23,180,012 shares and 23,058,584 shares issued and outstanding at June 15, 2019 and December 29, 2018, $ 232 $ 231 respectively Additional paid-in capital 198,074 197,533 Retained earnings 60,363 55,819 --------- --------- -- Total Heritage-Crystal Clean, Inc. stockholders' equity 258,669 253,583 Noncontrolling interest 440 648 --------- --------- -- Total equity 259,109 254,231 Total liabilities and stockholders' equity $ 432,741 $ 347,822 - ------- - ------- --

Heritage-Crystal Clean, Inc.Condensed Consolidated Statements of Income(In Thousands, Except per Share Amounts)(Unaudited)

Second Quarter Ended, First Half Ended, June 15, June 16, June 15, June 16, 2019 2018 2019 2018 ---------- ---------- ---------- ---------- Revenues Service revenues $ 57,936 $ 60,014 $ 114,309 $ 114,151 Product revenues 41,302 40,289 77,160 69,299 Rental income 5,762 — 9,304 — --------- --------- --------- --------- Total revenues $ 105,000 $ 100,303 $ 200,773 $ 183,450 Operating expenses Operating costs $ 78,849 $ 76,272 $ 161,332 $ 144,658 Selling, general, and administrative expenses 11,042 11,522 23,438 22,544 Depreciation and amortization 4,061 3,659 8,196 7,302 Other expense - net 1,514 341 1,457 729 --------- --------- --------- --------- Operating income 9,534 8,509 6,350 8,217 Interest expense – net 219 240 449 486 --------- --------- --------- --------- Income before income taxes 9,315 8,269 5,901 7,731 Provision for income taxes 2,151 2,149 1,165 1,713 --------- --------- --------- --------- Net income 7,164 6,120 4,736 6,018 Income attributable to noncontrolling interest 108 121 192 139 --------- --------- Net income attributable to Heritage-Crystal $ 7,056 $ 5,999 $ 4,544 $ 5,879 Clean, Inc. common stockholders - ------- - ------- - ------- - ------- Net income per share: basic $ 0.30 $ 0.26 $ 0.20 $ 0.26 Net income per share: diluted $ 0.30 $ 0.26 $ 0.19 $ 0.25 - ------- - ------- - ------- - ------- Number of weighted average shares outstanding: 23,137 23,029 23,127 22,995 basic Number of weighted average shares outstanding: 23,368 23,361 23,366 23,246 diluted --------- --------- --------- ---------

Heritage-Crystal Clean, Inc.Reconciliation of Operating Segment Information(Unaudited)

Second Quarter Ended, June 15, 2019 (thousands) Environmental Oil Business Corporate and Consolidated Services Eliminations ---------------------------------------- ------------- ------------ ------------- ------------ Revenues Service revenues $ 54,332 $ 3,604 $ — $ 57,936 Product revenues 10,178 31,124 — 41,302 Rental income 5,686 76 — 5,762 -------- ---- -------- --- -------- ---- --------- -- Total revenues $ 70,196 $ 34,804 $ — $ 105,000 Operating expenses Operating costs 49,374 29,475 — 78,849 Operating depreciation and amortization 1,872 1,436 — 3,308 -------- ---- -------- --- -------- ---- --------- -- Profit before corporate selling, $ 18,950 $ 3,893 $ — $ 22,843 general, and administrative expenses Selling, general, and administrative 11,042 11,042 expenses Depreciation and amortization from SG&A 753 753 -------- ---- --------- -- Total selling, general, and $ 11,795 $ 11,795 administrative expenses Other expense - net 1,514 1,514 -------- ---- --------- -- Operating income 9,534 Interest expense – net 219 219 -------- ---- --------- -- Income before income taxes $ 9,315 - ------- --

Second Quarter Ended, June 16, 2018 (thousands) Oil Business Corporate and Consolidated Environmental Eliminations Services ---------------------------------------- ------------- ------------ ------------- ------------ Revenues Service revenues $ 56,924 $ 3,090 $ — $ 60,014 Product revenues 7,521 32,768 — 40,289 -------- ---- --------- -- Total revenues $ 64,445 $ 35,858 $ — $ 100,303 Operating expenses Operating costs 46,456 29,816 — 76,272 Operating depreciation and amortization 1,502 1,389 — 2,891 -------- ---- -------- --- -------- ---- --------- -- Profit before corporate selling, $ 16,487 $ 4,653 $ — $ 21,140 general, and administrative expenses Selling, general, and administrative 11,522 11,522 expenses Depreciation and amortization from SG&A 768 768 -------- ---- --------- -- Total selling, general, and $ 12,290 $ 12,290 administrative expenses Other expense - net 341 341 -------- ---- --------- -- Operating income 8,509 Interest expense – net 240 240 -------- ---- --------- -- Income before income taxes $ 8,269 - ------- --

First Half Ended, June 15, 2019 (thousands) Oil Corporate and Consolidated Environmental Business Eliminations Services --------------------------------------- ------------- ---------- ------------- ------------ Revenues Service revenues $ 107,207 $ 7,102 $ — $ 114,309 Product revenues 20,315 56,845 — 77,160 Rental income 9,171 133 — 9,304 -------- ---- --------- -- Total revenues $ 136,693 $ 64,080 $ — $ 200,773 Operating expenses Operating costs 99,538 61,794 — 161,332 Operating depreciation and amortization 3,508 2,868 — 6,376 --------- --- -------- - -------- ---- --------- -- Profit (loss) before corporate selling, $ 33,647 $ (582 ) $ — $ 33,065 general, and administrative expenses Selling, general, and administrative 23,438 23,438 expenses Depreciation and amortization from SG&A 1,820 1,820 -------- ---- --------- -- Total selling, general, and $ 25,258 $ 25,258 administrative expenses Other expense - net 1,457 1,457 -------- ---- --------- -- Operating income 6,350 Interest expense – net 449 449 -------- ---- --------- -- Income before income taxes $ 5,901 - ------- --

First Half Ended, June 16, 2018 (thousands) Oil Business Corporate and Consolidated Environmental Eliminations Services --------------------------------------- ------------- ------------ ------------- ------------ Revenues Service revenues $ 107,956 $ 6,195 $ — $ 114,151 Product revenues 13,964 55,335 — 69,299 -------- ---- --------- -- Total revenues $ 121,920 $ 61,530 $ — $ 183,450 Operating expenses Operating costs 89,181 55,477 — 144,658 Operating depreciation and amortization 2,992 2,777 — 5,769 --------- --- -------- --- -------- ---- --------- -- Profit before corporate selling, $ 29,747 $ 3,276 $ — $ 33,023 general, and administrative expenses Selling, general, and administrative 22,544 22,544 expenses Depreciation and amortization from SG&A 1,533 1,533 -------- ---- --------- -- Total selling, general, and $ 24,077 $ 24,077 administrative expenses Other expense - net 729 729 -------- ---- --------- -- Operating income 8,217 Interest expense – net 486 486 -------- ---- --------- -- Income before income taxes $ 7,731 - ------- --

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 15, June 16, June 15, June 16, 2019 2018 2019 2018 ----------- ------------------------------------ --------- ---------- --------- --------- Net income $ 7,164 $ 6,120 $ 4,736 $ 6,018 Interest expense – net 219 240 449 486 Provision for income taxes 2,151 2,149 1,165 1,713 Depreciation and amortization 4,061 3,659 8,196 7,302 -------- -------- - -------- -------- EBITDA (a) $ 13,595 $ 12,168 $ 14,546 $ 15,519 Adoption of ASC 842 lease accounting standard(b) — — 2,202 — Non-cash compensation (c) 833 1,042 1,721 1,869 Retirement costs and severance (d) — 532 656 659 Site closure costs (e) 1,510 184 1,510 509 Implementation costs of ASC 842(f) — — 355 — Adjusted EBITDA (g) $ 15,938 $ 13,926 $ 20,990 $ 18,556 - ------ - ------ - - ------ - ------ (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) Revenue deferred during the first quarter from the adoption of ASC 842 lease accounting standard. (c) Non-cash compensation expenses which are recorded in SG&A. (d) Cost associated with retirement of our former SVP Sales and other employee separations. (e) Costs mainly associated with the closure of the Company’s facility located in Wilmington, Delaware. (f) One-time cost associated with the implementation of ASC 842. (g) 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.

Use of Non-GAAP Financial Measures Adjusted net income and adjusted net income per share are non-GAAP financial measures. Non-GAAP financial measures should be considered in addition to, but not as substitute for, financial measures prepared in accordance with GAAP. Management believes that adjusted net income and adjusted net income per share provides investors and management useful information about the income impact from the site closure costs adjustment for the second quarter of 2019 compared to the second fiscal quarter of 2018. ------------------------------------------------------------ Reconciliation of our Net Income and Net Income Per Share Determined in Accordance with U.S. GAAP to our Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Income Per Share (In thousands, except per share amounts) Second Quarter Ended, June 15, June 16, 2019 2018 --------- --------- GAAP net income $ 7,164 $ 6,120 Site Closure costs 1,510 184 Net tax effect of items above (355 ) (48 ) Adjusted net income $ 8,319 $ 6,256 - ----- - - ----- - GAAP diluted income per share $ 0.30 $ 0.26 Site closure costs per share 0.07 0.01 Net tax effect per share of items above (0.02 ) — Adjusted diluted net income per share $ 0.35 $ 0.27 - ----- - - ----- -

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