ELGIN, Ill., Dec. 1, 2011 (GLOBE NEWSWIRE) -- Heritage-Crystal Clean, Inc. (Nasdaq:HCCI) ("the Company"), a leading provider of parts cleaning and hazardous and non-hazardous waste services to small and mid-sized customers, today announced the signing of an asset purchase agreement to acquire certain assets of the used oil collection business of Crystal Flash Limited Partnership of Michigan.
Crystal Flash Limited Partnership of Michigan, operating as "Crystal Flash Energy", will continue to operate its fuel distribution business, primarily within the State of Michigan, servicing over 30,000 customers for their fuel needs with a fleet of 125 trucks.
Based on the historical performance of Crystal Flash Energy, the Company expects the transaction will result in additional used oil collection volume of approximately 3.5 million gallons per year, primarily in the state of Michigan. The Company anticipates that this will serve as an important source of supply for its used oil re-refinery being built in Indianapolis, Indiana. The Company is acquiring the Crystal Flash Energy assets for approximately $3.5 million, consisting of approximately $1.7 million in cash at the time of closing and an estimated $1.8 million in future payments linked to the continuing performance of the acquired business.
Mr. Joseph Chalhoub, President and Chief Executive Officer of Heritage-Crystal Clean, Inc. commented: "We are very pleased to be adding the Crystal Flash Energy personnel to our team, and their assets to our organization. Crystal Flash Energy has a long and proud history as one of the best used oil collectors in the state of Michigan. We expect this acquisition to add approximately $6 to $7 million of annual revenue, based on current market prices and historical performance. Furthermore, once our re-refinery is complete, we plan to upgrade the value of the collected used oil by converting it to lube base stock."
Chalhoub added: "With this acquisition, we expect to add approximately 2,000 new customers, and this should fit nicely into our existing branch infrastructure. Over the past decade, we have made significant investments to build a network that today includes 67 branch locations, and we have developed the excellent team that operates our business at each of these sites. Because of these historic investments, we have been able to smoothly merge acquired assets into our Company operations, and we have also been able to achieve organic growth in the used oil collection business."
Safe Harbor Statement
All references to the "Company," "we," "our," and "us" refer to Heritage-Crystal Clean, Inc., and its subsidiary.
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 complete our used oil re-refinery as anticipated; the used oil re-refinery does not perform as anticipated; we are unable to generate sufficient funds to build and support our used oil re-refinery; we do not realize the anticipated benefits from our acquisition of the Warrior Group; 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 recent 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 and used 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 4, 2011 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 and 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 67 branches serving over 44,000 customer locations.
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The Company uses its website to make available information to investors and the public at www.crystal-clean.com.