ELGIN, Ill., Oct. 20, 2009 (GLOBE NEWSWIRE) -- Heritage-Crystal Clean, Inc. (Nasdaq:HCCI), a leading provider of parts cleaning, hazardous and non-hazardous waste services to small and mid-sized customers, today announced results for the third fiscal quarter of 2009, which ended September 12, 2009.
Third quarter highlights include:
-- Average sales per working day in the third quarter of 2009
were approximately $380,000, the same as the second quarter of
fiscal 2009, but down from $440,000 in the third quarter of
fiscal 2008.
-- Sales were $22.3 million, a decline of 13% compared to $25.6
million in the third quarter of fiscal 2008. Year-to-date
sales decreased 7% to $68.4 million, compared to $73.5 million
in 2008.
-- Same-branch sales declined 15%, measured for the 54 branches
that were in operation throughout both the third fiscal
quarters of 2009 and 2008. On a year-to-date basis,
same-branch sales declined 8%.
-- EPS (basic and diluted) was $0.05 compared to $0.06 in the
second quarter of 2009, and compared to $0.15 in the third
quarter of fiscal 2008.
Mr. Joseph Chalhoub, President and Chief Executive Officer of Heritage-Crystal Clean, Inc., commented, "While the third quarter was flat with the second quarter, we are pleased that our average sales per working day stabilized after declining in the prior three quarters. During the third quarter we continued to gain new customers, which helped to offset reduced activity at many of our accounts. We remain optimistic that the Company is well positioned to resume growth in sales and earnings as our customers return to their historic levels of activity."
Mr. Chalhoub added: "As previously announced, during the quarter we began to explore the development of a used oil re-refinery to recycle used motor oil into lubricating oil. We believe that this has the potential to provide an important new growth opportunity for the Company while allowing us to leverage our branch infrastructure."
Mr. Greg Ray, CFO and VP of Business Management, stated, "Our financial performance for the third quarter of 2009 continued to be adversely impacted by lower revenue. However, our efforts to reduce costs resulted in significant reductions in both operating costs and SG&A expenses compared to the year-ago quarter. We continued to generate cash, ending the quarter with no bank debt after paying $3.5 million to acquire the property we have been occupying as a tenant in Indianapolis."
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 comply with the extensive environmental, health and safety and employment laws and regulations that our Company is subject to; changes in environmental laws that affect our business model; competition; claims relating to our handling of hazardous substances; the limited demand for our used solvent; our dependency on key employees; our ability to effectively manage our extended network of branch locations; warranty expense and liability claims; personal injury litigation; dependency of suppliers; economic conditions including the current recession and financial crisis, and downturns in the business cycles of automotive repair shops, industrial manufacturing business and small businesses in general; increased solvent, fuel and energy costs and volatility in the price of crude oil; the control of The Heritage Group over our Company; and the risks identified in our Annual Report on Form 10-K filed with the SEC on March 30, 2009. 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, hazardous and non-hazardous waste services to small and mid-sized customers in both the manufacturing and automotive service sectors. Our service programs include parts cleaning, containerized waste management, used oil collection, and vacuum truck 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 manufacturers, such as metal product fabricators and printers. Heritage-Crystal Clean, Inc. is headquartered in Elgin, Illinois, and operates through 58 branches serving over 39,000 customer locations.
The Heritage-Crystal Clean, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4974
Conference Call
The Company will host a conference call on Wednesday October 21, 2009 at 2 PM Central Time, during which management will make 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, www.crystal-clean.com/investor/, and can participate in the call by dialing (913) 312-9313.
Financial Statements
Heritage-Crystal Clean, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share and Par Value Amounts)
(Unaudited)
September 12, January 3,
2009 2009
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,190 $ 327
Receivables:
Trade, net of allowance for
doubtful accounts of $369
and $616 at September 12,
2009 and January 3, 2009,
respectively 12,183 14,040
Trade - affiliates 184 331
Other 133 245
------------- -------------
Total receivables 12,500 14,616
Income tax refund -- 480
Inventory - net 9,303 10,609
Deferred tax assets 794 942
Prepaid income taxes 701 901
Prepaid and other current assets 1,811 1,386
------------- -------------
Total Current Assets 26,299 29,261
Property, plant and equipment:
Land 183 --
Buildings and storage tanks 3,615 --
Leasehold improvements 503 758
In-service equipment 27,045 24,634
Machinery, vehicles and
equipment 11,705 11,492
Construction in progress 731 427
------------- -------------
43,782 37,311
Less: Accumulated
depreciation (18,786) (16,433)
------------- -------------
Net property, plant and
equipment 24,996 20,878
Software and intangible assets,
net of accumulated
amortization of $1,824 and
$1,524 at September 12, 2009
and January 3, 2009,
respectively 2,875 1,877
------------- -------------
Total Assets $ 54,170 $ 52,016
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,536 $ 5,227
Accounts payable - affiliates 254 534
Accrued salaries, wages and
benefits 2,037 1,920
Taxes payable 1,051 978
Accrued workers compensation 644 526
Other accrued expenses 698 876
------------- -------------
Total Current Liabilities 10,220 10,061
Note payable - bank -- 20
Deferred tax liabilities 718 379
------------- -------------
Total Liabilities 10,938 10,460
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common stock - 15,000,000 shares
authorized at $0.01 par value,
10,704,643 and 10,680,609 shares
issued and outstanding at
September 12, 2009 and January
3, 2009, respectively 107 107
Additional paid-in capital 43,048 42,643
Retained earnings (accumulated
deficit) 77 (1,194)
------------- -------------
Total Stockholders' Equity 43,232 41,556
------------- -------------
Total Liabilities and
Stockholders' Equity $ 54,170 $ 52,016
============= =============
Heritage-Crystal Clean, Inc.
Consolidated Statements of Operations
(In Thousands, Except per Share Amounts)
(Unaudited)
First Three
Third Quarter Ended Quarters Ended,
Sept. 12, Sept. 6, Sept. 12, Sept. 6,
2009 2008 2009 2008
-------- -------- -------- --------
Sales $ 22,284 $ 25,646 $ 68,441 $ 73,482
Cost of sales 5,553 6,020 18,290 17,936
-------- -------- -------- --------
Gross profit 16,731 19,626 50,151 55,546
Operating costs 11,772 12,523 36,105 36,640
Selling, general and
administrative
expenses 3,834 4,278 11,664 15,042
-------- -------- -------- --------
Operating income 1,125 2,825 2,382 3,864
Interest expense -
net 3 24 3 395
Loss on retirement
of fixed assets -
net 100 -- 159 --
-------- -------- -------- --------
Income before income
taxes 1,022 2,801 2,220 3,469
Provision for income
taxes 453 1,179 949 3,206
-------- -------- -------- --------
Net income 569 1,622 1,271 263
Preferred return -- -- -- 339
-------- -------- -------- --------
Net income (loss)
available to
common stockholders $ 569 $ 1,622 $ 1,271 $ (76)
======== ======== ======== ========
Net income (loss)
per share available
to common
stockholders: basic $ 0.05 $ 0.15 $ 0.12 $ (0.01)
Net income (loss)
per share available
to common
stockholders:
diluted $ 0.05 $ 0.15 $ 0.12 $ (0.01)
======== ======== ======== ========
Number of weighted
average common
shares outstanding:
basic 10,704 10,675 10,696 9,657
Number of weighted
average common
shares outstanding:
diluted 10,834 10,848 10,753 9,657
======== ======== ======== ========
Heritage-Crystal Clean, Inc.
Reconciliation of our Net Income Determined in Accordance with GAAP
to Earnings Before Interest, Taxes, Depreciation & Amortization
(EBITDA)
(Unaudited)
First Three Quarters
Third Quarter Ended, Ended,
(Dollars in thousands) (Dollars in thousands)
Sept. 12, Sept. 6, Sept. 12, Sept. 6,
2009 2008 2009 2008
---------------------- ----------------------
Net income $ 569 $ 1,622 $ 1,271 $ 263
Interest expense
- net 3 24 3 395
Provision for income
taxes 453 1,179 949 3,206
Depreciation and
amortization 1,052 844 2,858 2,441
-------- -------- -------- --------
EBITDA(a) $ 2,077 $ 3,669 $ 5,081 $ 6,305
======== ======== ======== ========
(a) EBITDA represents net income before income tax expense, 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 GAAP and should not
be considered as a substitute for net income prepared in
accordance with 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 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
GAAP results and using EBITDA only as a supplement.