UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 5, 2011
Heritage-Crystal Clean, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE |
001-33987 |
26-0351454 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2175 Point Boulevard, Suite 375, Elgin, IL |
60123 |
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(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (847) 836-5670
________________________________________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On May 5, 2011 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated May 5, 2011
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Heritage-Crystal Clean, Inc.
(Registrant) |
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May 5, 2011
(Date) |
/s/ GREGORY RAY
Gregory Ray Chief Financial Officer, Vice President, Business Management and Secretary |
Exhibit Index | ||
99.1 | Press release dated May 5, 2011 |
EXHIBIT 99.1
ELGIN, Ill., May 5, 2011 (GLOBE NEWSWIRE) -- Heritage-Crystal Clean, Inc. (Nasdaq:HCCI), a leading provider of parts cleaning and hazardous and non-hazardous waste services to small and mid-sized customers, today announced results for the first quarter of fiscal year 2011, which ended March 26, 2011.
First quarter highlights include:
This quarter we are pleased to initiate segment reporting.
Mr. Joseph Chalhoub, President and Chief Executive Officer of Heritage-Crystal Clean, Inc. commented, "We are pleased with our first quarter, as we delivered results better than our plans despite the rise in the cost of our services mainly due to higher crude oil cost. Sales of Environmental Services continued to show strength, growing by 15% compared to the first quarter a year ago."
Chalhoub added: "We continue to ramp up our used oil collection services in preparation for the start-up of the used oil re-refinery; our 66 branches provide our company an extensive base to build our oil collection network. Construction of the re-refinery continues ahead of schedule, and we expect production of intermediate products in the third quarter of this year and lube oil near the end of the year."
Mr. Greg Ray, Chief Financial Officer and Vice President of Business Management, stated, "During the first quarter we experienced good volume increases in all of our lines of business, as our branch network continued to grow and add new accounts. Notwithstanding the improved revenue, our profit margin was less than a year ago, primarily because the expansion of our used oil collection services, as expected, resulted in higher losses from the Oil Business segment. Also, escalating costs for fuel and solvent had a negative impact on our margins, although this impact was partially mitigated by improved inventory valuations. The previously-announced Warrior Group acquisition made during the first quarter added revenue for our Oil Business, and the integration of the acquired employees and customers has been proceeding as planned."
Ray added, "During the first quarter, we increased our bank credit facility to $40 million, comprised of a $20 million Term A Loan and a $20 million revolving credit facility. At the end of the first quarter we had not yet drawn on this facility and we had approximately $11 million of cash on hand."
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; 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 66 branches serving over 44,000 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 Friday May 6, 2011 at 9:30 AM 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, http://www.crystal-clean.com/investor/FinancialReleases.asp, and can participate in the call by dialing (720) 545-0014.
The Company uses its website to make available information to investors and the public at www.crystal-clean.com.
Heritage-Crystal Clean, Inc. | ||
Consolidated Balance Sheets | ||
(In Thousands, Except Share and Par Value Amounts) | ||
(Unaudited) | ||
March 26, 2011 | January 1, 2011 | |
ASSETS | ||
Current Assets: | ||
Cash and cash equivalents | $10,790 | $21,757 |
Accounts receivable - net | 14,888 | 13,478 |
Income tax receivables | 450 | 27 |
Inventory - net | 13,552 | 11,647 |
Deferred income taxes | 898 | 731 |
Other current assets | 2,105 | 2,154 |
Total Current Assets | 42,683 | 49,794 |
Property, plant and equipment - net | 48,977 | 37,051 |
Goodwill | 1,024 | — |
Software and intangible assets - net | 3,582 | 2,727 |
Total Assets | $96,266 | $89,572 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current Liabilities: | ||
Current maturities of long-term debt | $668 | $ — |
Accounts payable | 12,673 | 10,058 |
Accrued salaries, wages, and benefits | 1,977 | 2,242 |
Taxes payable | 1,291 | 913 |
Other accrued expenses | 1,241 | 1,139 |
Total Current Liabilities | 17,850 | 14,352 |
Long-term debt, less current maturities | 1,719 | — |
Deferred income taxes | 1,703 | 1,676 |
Total Liabilities | 21,272 | 16,028 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Common stock - 18,000,000 shares authorized at $0.01 par value, | ||
14,290,188 and 14,220,321 shares issued and outstanding at March 26, 2011 and January 1, 2011, respectively | 143 | 142 |
Additional paid-in capital | 70,643 | 69,532 |
Retained earnings | 4,208 | 3,870 |
Total Stockholders' Equity | 74,994 | 73,544 |
Total Liabilities and Stockholders' Equity | $96,266 | $89,572 |
Heritage-Crystal Clean, Inc. | ||
Consolidated Statements of Operations | ||
(In Thousands, Except per Share Amounts) | ||
(Unaudited) | ||
First Quarter Ended, | ||
March 26, 2011 | March 27, 2010 | |
Sales | $28,739 | $24,005 |
Operating expenses – | ||
Operating costs | 22,512 | 17,618 |
Selling, general and administrative expenses | 4,541 | 4,218 |
Depreciation and amortization | 1,110 | 1,029 |
Operating income | 576 | 1,140 |
Interest expense - net | 4 | — |
Income before income taxes | 572 | 1,140 |
Provision for income taxes | 234 | 478 |
Net income | $338 | $662 |
Net income per share: basic | $0.02 | $0.06 |
Net income per share: diluted | $0.02 | $0.06 |
Number of weighted average shares outstanding: basic | 14,249 | 10,713 |
Number of weighted average shares outstanding: diluted | 14,369 | 10,793 |
Heritage-Crystal Clean, Inc. | ||||
Reconciliation of Operating Segment Information | ||||
(In Thousands) | ||||
(Unaudited) | ||||
First Quarter Ended, | ||||
March 26, 2011 | ||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |
Sales | $26,112 | $2,627 | $ — | $28,739 |
Operating expenses – | ||||
Operating costs | 19,146 | 3,366 | — | 22,512 |
Depreciation and amortization* | 935 | 38 | — | 973 |
Profit (loss) before corporate selling, general and administrative expenses | $6,031 | $ (777) | 5,254 | |
Selling, general and administrative expenses† | — | — | 4,678 | 4,678 |
Operating income | 576 | |||
Interest expense - net | — | — | 4 | 4 |
Income before income taxes | 572 | |||
Provision for income taxes | — | — | 234 | 234 |
Net income | $338 | |||
Assets | $27,763 | $26,506 | $41,997 | $96,266 |
First Quarter Ended, | ||||
March 27, 2010 | ||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |
Sales | $22,764 | $1,241 | $ — | $24,005 |
Operating expenses – | ||||
Operating costs | 16,122 | 1,496 | — | 17,618 |
Depreciation and amortization* | 875 | 8 | — | 883 |
Profit (loss) before corporate selling, general and administrative expenses | $5,767 | $(263) | 5,504 | |
Selling, general and administrative expenses† | — | — | 4,364 | 4,364 |
Operating income | 1,140 | |||
Interest expense - net | — | — | — | — |
Income before income taxes | 1,141 | |||
Provision for income taxes | — | — | 478 | 478 |
Net income | $662 | |||
Assets | $24,944 | $1,960 | $62,668 | $89,572 |
*Includes depreciation and amortization related to operating activity but not depreciation and amortization related to corporate selling, general and administrative activity. | ||||
†Includes depreciation and amortization related to corporate selling, general and administrative activity. |
Heritage-Crystal Clean, Inc. | ||
Reconciliation of our Net Income Determined in Accordance with U.S. GAAP to Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) |
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(Unaudited) | ||
First Quarter Ended, | ||
(Dollars in thousands) | ||
March 26, 2011 | March 27, 2010 | |
Net income | $338 | $662 |
Interest expense – net | 4 | — |
Provision for income taxes | 234 | 478 |
Depreciation and amortization | 1,110 | 1,029 |
EBITDA(a) | $1,686 | $2,169 |
(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. |
CONTACT: Greg Ray, Chief Financial Officer and VP Business Management (847) 836-5670