(Mark One) | ||
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | June 18, 2011 | |
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from _________________to _________________ |
Delaware | 26-0351454 | |
State or other jurisdiction of | (I.R.S. Employer | |
Incorporation | Identification No.) |
Large accelerated filer o | Accelerated Filer o | ||
Non-accelerated filer x | Smaller reporting company o |
June 18, 2011 | January 1, 2011 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 7,423 | $ | 21,757 | |||
Accounts receivable - net | 17,017 | 13,478 | |||||
Income tax receivables | 23 | 27 | |||||
Inventory - net | 17,682 | 11,647 | |||||
Deferred income taxes | 604 | 731 | |||||
Other current assets | 2,590 | 2,154 | |||||
Total Current Assets | 45,339 | 49,794 | |||||
Property, plant and equipment - net | 57,852 | 37,051 | |||||
Goodwill | 1,137 | — | |||||
Software and intangible assets - net | 3,509 | 2,727 | |||||
Total Assets | $ | 107,837 | $ | 89,572 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 12,718 | $ | 10,058 | |||
Accrued salaries, wages, and benefits | 2,511 | 2,242 | |||||
Taxes payable | 1,136 | 913 | |||||
Current maturities of long-term debt | 553 | — | |||||
Other accrued expenses | 1,333 | 1,139 | |||||
Total Current Liabilities | 18,251 | 14,352 | |||||
Term Loan | 10,000 | — | |||||
Long-term debt, less current maturities | 1,591 | — | |||||
Deferred income taxes | 1,952 | 1,676 | |||||
Total Liabilities | 31,794 | 16,028 | |||||
STOCKHOLDERS' EQUITY: | |||||||
Common stock - 18,000,000 shares authorized at $0.01 par value, 14,322,053 and 14,220,321 shares issued and outstanding at June 18, 2011 and January 1, 2011, respectively | 143 | 142 | |||||
Additional paid-in capital | 70,973 | 69,532 | |||||
Retained earnings | 4,927 | 3,870 | |||||
Total Stockholders' Equity | 76,043 | 73,544 | |||||
Total Liabilities and Stockholders' Equity | $ | 107,837 | $ | 89,572 |
Second Quarter Ended, | First Half Ended, | ||||||||||||||||
June 18, 2011 | June 19, 2010 | June 18, 2011 | June 19, 2010 | ||||||||||||||
Sales | $ | 31,968 | $ | 25,338 | $ | 60,707 | $ | 49,343 | |||||||||
Operating expenses - | |||||||||||||||||
Operating costs | 24,729 | 18,323 | 47,241 | 35,941 | |||||||||||||
Selling, general, and administrative expenses | 4,815 | 4,285 | 9,356 | 8,503 | |||||||||||||
Depreciation and amortization | 1,215 | 1,055 | 2,325 | 2,084 | |||||||||||||
Loss (gain) on disposal of fixed assets – net | (12 | ) | 39 | (12 | ) | 39 | |||||||||||
Operating income | 1,221 | 1,636 | 1,797 | 2,776 | |||||||||||||
Interest expense – net | 10 | — | 14 | — | |||||||||||||
Income before income taxes | 1,211 | 1,636 | 1,783 | 2,776 | |||||||||||||
Provision for income taxes | 492 | 705 | 726 | 1,183 | |||||||||||||
Net income | $ | 719 | $ | 931 | $ | 1,057 | $ | 1,593 | |||||||||
Net income per share: basic | $ | 0.05 | $ | 0.09 | $ | 0.07 | $ | 0.15 | |||||||||
Net income per share: diluted | $ | 0.05 | $ | 0.08 | $ | 0.07 | $ | 0.15 | |||||||||
Number of weighted average shares outstanding: basic | 14,306 | 10,909 | 14,277 | 10,811 | |||||||||||||
Number of weighted average shares outstanding: diluted | 14,750 | 10,973 | 14,583 | 10,871 |
Shares | Par Value Common | Paid–in Capital | Retained Earnings | Total | |||||||||||||||
Balance, January 1, 2011 | 14,220,321 | $ | 142 | $ | 69,532 | $ | 3,870 | $ | 73,544 | ||||||||||
Net income | — | — | — | 1,057 | 1,057 | ||||||||||||||
Issuance of common stock – Warrior acquisition | 64,516 | 1 | 799 | — | 800 | ||||||||||||||
Issuance of common stock – ESPP | 9,513 | — | 114 | — | 114 | ||||||||||||||
Conversion of restricted shares to common stock | 26,492 | — | 166 | — | 166 | ||||||||||||||
Exercise of stock options | 1,211 | — | 16 | — | 16 | ||||||||||||||
Share–based compensation | — | — | 346 | — | 346 | ||||||||||||||
Balance, June 18, 2011 | 14,322,053 | $ | 143 | $ | 70,973 | $ | 4,927 | $ | 76,043 |
First Half Ended, | |||||||
June 18, 2011 | June 19, 2010 | ||||||
Cash flows from Operating Activities: | |||||||
Net income | $ | 1,057 | $ | 1,593 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 2,325 | 2,084 | |||||
Bad debt provision | 268 | 418 | |||||
Share-based compensation | 511 | 264 | |||||
Deferred rent | 22 | 24 | |||||
Non-cash interest expense | 14 | — | |||||
Deferred taxes | 403 | (111 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in accounts receivable | (3,729 | ) | (2,016 | ) | |||
Decrease (increase) in income tax receivables | 4 | 350 | |||||
Decrease (increase) in inventory | (6,035 | ) | (1,465 | ) | |||
Decrease (increase) in prepaid and other current assets | (437 | ) | (298 | ) | |||
Increase (decrease) in accounts payable | 1,144 | 1,994 | |||||
Increase (decrease) in accrued expenses | 676 | 229 | |||||
Cash provided by (used in) operating activities | (3,777 | ) | 3,066 | ||||
Cash flows from Investing Activities: | |||||||
Capital expenditures | (19,197 | ) | (3,465 | ) | |||
Software and intangible asset expenditures | (316 | ) | (40 | ) | |||
Business acquisitions, net of cash acquired | (921 | ) | — | ||||
Cash used in investing activities | (20,434 | ) | (3,505 | ) | |||
Cash flows from Financing Activities: | |||||||
Proceeds from issuance of common stock | 114 | 22,076 | |||||
Proceeds from the exercise of stock options | 13 | — | |||||
Tax benefit from the exercise of stock options | 4 | — | |||||
Proceeds from term loan | 10,000 | — | |||||
Repayments of note payable - affiliates | (254 | ) | — | ||||
Cash provided by financing activities | 9,877 | 22,076 | |||||
Net increase (decrease) in cash and cash equivalents | (14,334 | ) | 21,637 | ||||
Cash and cash equivalents, beginning of period | 21,757 | 1,090 | |||||
Cash and cash equivalents, end of period | $ | 7,423 | $ | 22,727 | |||
Supplemental disclosure of cash flow information: | |||||||
Income taxes paid | 201 | 954 | |||||
Supplemental disclosure of non-cash information: | |||||||
Payables for construction in process | 4,910 | 759 | |||||
Business acquisitions, liabilities assumed | 15 | — | |||||
Business acquisitions, notes issued | 2,384 | — | |||||
Issuance of common stock – Warrior acquisition | 800 | — |
June 18, 2011 | January 1, 2011 | ||||||
Trade | $ | 17,319 | $ | 13,914 | |||
Less allowance for doubtful accounts | (641 | ) | (647 | ) | |||
Trade - net | 16,678 | 13,267 | |||||
Trade - affiliates | 174 | 102 | |||||
Other | 165 | 109 | |||||
Total accounts receivable - net | $ | 17,017 | $ | 13,478 |
June 18, 2011 | January 1, 2011 | ||||||
Balance at beginning of period | $ | 647 | $ | 601 | |||
Provision for bad debts | 268 | 767 | |||||
Accounts written off, net of recoveries | (274 | ) | (721 | ) | |||
Balance at end of period | $ | 641 | $ | 647 |
June 18, 2011 | January 1, 2011 | ||||||
Machines | $ | 2,362 | $ | 2,502 | |||
Solvents | 8,111 | 5,622 | |||||
Oil | 4,877 | 1,175 | |||||
Drums | 1,146 | 1,350 | |||||
Accessories | 1,356 | 1,183 | |||||
Total inventory | 17,852 | 11,832 | |||||
Less reserves | (170 | ) | (185 | ) | |||
Total inventory - net | $ | 17,682 | $ | 11,647 |
June 18, 2011 | January 1, 2011 | ||||||
Prepaid and other current assets | $ | 2,590 | $ | 1,798 | |||
Prepaid income taxes | — | 356 | |||||
Total other current assets | $ | 2,590 | $ | 2,154 |
June 18, 2011 | January 1, 2011 | ||||||
Land (a) | $ | 414 | $ | 183 | |||
Buildings and storage tanks (a) | 4,168 | 3,602 | |||||
Leasehold improvements (a) | 632 | 600 | |||||
In-service equipment | 34,438 | 32,213 | |||||
Machinery, vehicles and equipment (a) | 13,922 | 12,553 | |||||
Construction in progress | 30,329 | 12,010 | |||||
Total property, plant and equipment | 83,903 | 61,161 | |||||
Less accumulated depreciation | (26,051 | ) | (24,110 | ) | |||
Property, plant and equipment - net | $ | 57,852 | $ | 37,051 |
June 18, 2011 | January 1, 2011 | |||||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
Software | $ | 3,527 | $ | 2,225 | $ | 1,302 | $ | 3,345 | $ | 2,071 | $ | 1,274 | ||||||||||||
Patents | 1,048 | 158 | 890 | 1,007 | 109 | 898 | ||||||||||||||||||
Non-competes (a) | 617 | 311 | 306 | 455 | 269 | 186 | ||||||||||||||||||
Other (a) | 1,115 | 104 | 1,011 | 440 | 71 | 369 | ||||||||||||||||||
Total software and intangible assets | $ | 6,307 | $ | 2,798 | $ | 3,509 | $ | 5,247 | $ | 2,520 | $ | 2,727 |
June 18, 2011 | January 1, 2011 | ||||||
Accounts payable | $ | 12,698 | $ | 9,886 | |||
Accounts payable - affiliates | 20 | 172 | |||||
Total accounts payable | $ | 12,718 | $ | 10,058 |
June 18, 2011 | January 1, 2011 | ||||||
Workers compensation | $ | 474 | $ | 381 | |||
Other | 859 | 758 | |||||
Total other accrued expenses | $ | 1,333 | $ | 1,139 |
Second Quarter Ended, | ||||||||||||||||||
June 18, 2011 | ||||||||||||||||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |||||||||||||||
Sales | $ | 27,641 | $ | 4,327 | $ | — | $ | 31,968 | ||||||||||
Operating expenses | ||||||||||||||||||
Operating costs | 20,051 | 4,678 | — | 24,729 | ||||||||||||||
Operating depreciation and amortization | 959 | 89 | — | 1,048 | ||||||||||||||
Profit (loss) before corporate selling, general, and administrative expenses | 6,631 | (440 | ) | 6,191 | ||||||||||||||
Selling, general, and administrative expenses | — | — | 4,815 | 4,815 | ||||||||||||||
Depreciation and amortization from SG&A | — | — | 167 | 167 | ||||||||||||||
Total selling, general, and administrative expenses | 4,982 | 4,982 | ||||||||||||||||
Loss (gain) from disposal of fixed assets | — | — | (12 | ) | (12 | ) | ||||||||||||
Operating income | 1,221 | |||||||||||||||||
Interest expense - net | — | — | 10 | 10 | ||||||||||||||
Income before income taxes | 1,211 | |||||||||||||||||
Provision for income taxes | — | — | 492 | 492 | ||||||||||||||
Net income | $ | 719 | ||||||||||||||||
Second Quarter Ended, | ||||||||||||||||||
June 19, 2010 | ||||||||||||||||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |||||||||||||||
Sales | $ | 24,132 | $ | 1,206 | $ | — | $ | 25,338 | ||||||||||
Operating expenses | ||||||||||||||||||
Operating costs | 16,609 | 1,714 | — | 18,323 | ||||||||||||||
Operating depreciation and amortization | 896 | 9 | — | 905 | ||||||||||||||
Profit (loss) before corporate selling, general, and administrative expenses | 6,627 | (517 | ) | 6,110 | ||||||||||||||
Selling, general, and administrative expenses | — | — | 4,285 | 4,285 | ||||||||||||||
Depreciation and amortization from SG&A | — | — | 150 | 150 | ||||||||||||||
Total selling, general, and administrative expenses | 4,435 | 4,435 | ||||||||||||||||
Loss (gain) from disposal of fixed assets | — | — | 39 | 39 | ||||||||||||||
Operating income | 1,636 | |||||||||||||||||
Interest expense - net | — | — | — | — | ||||||||||||||
Income before income taxes | 1,636 | |||||||||||||||||
Provision for income taxes | — | — | 705 | 705 | ||||||||||||||
Net income | $ | 931 | ||||||||||||||||
First Half Ended, | ||||||||||||||||||
June 18, 2011 | ||||||||||||||||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |||||||||||||||
Sales | $ | 53,753 | $ | 6,954 | $ | — | $ | 60,707 | ||||||||||
Operating expenses | ||||||||||||||||||
Operating costs | 39,197 | 8,044 | — | 47,241 | ||||||||||||||
Operating depreciation and amortization | 1,894 | 127 | — | 2,021 | ||||||||||||||
Profit (loss) before corporate selling, general, and administrative expenses | 12,662 | (1,217 | ) | 11,445 | ||||||||||||||
Selling, general, and administrative expenses | — | — | 9,356 | 9,356 | ||||||||||||||
Depreciation and amortization from SG&A | — | — | 304 | 304 | ||||||||||||||
Total selling, general, and administrative expenses | 9,660 | 9,660 | ||||||||||||||||
Loss (gain) from disposal of fixed assets | — | — | (12 | ) | (12 | ) | ||||||||||||
Operating income | 1,797 | |||||||||||||||||
Interest expense - net | — | — | — | 14 | ||||||||||||||
Income before income taxes | 1,783 | |||||||||||||||||
Provision for income taxes | — | — | 726 | 726 | ||||||||||||||
Net income | $ | 1,057 | ||||||||||||||||
First Half Ended, | ||||||||||||||||||
June 19, 2010 | ||||||||||||||||||
Environmental Services | Oil Business | Corporate and Eliminations | Consolidated | |||||||||||||||
Sales | $ | 46,896 | $ | 2,447 | $ | — | $ | 49,343 | ||||||||||
Operating expenses | ||||||||||||||||||
Operating costs | 32,731 | 3,210 | — | 35,941 | ||||||||||||||
Operating depreciation and amortization | 1,771 | 17 | — | 1,788 | ||||||||||||||
Profit (loss) before corporate selling, general, and administrative expenses | 12,394 | (780 | ) | 11,614 | ||||||||||||||
Selling, general, and administrative expenses | — | — | 8,503 | 8,503 | ||||||||||||||
Depreciation and amortization from SG&A | — | — | 296 | 296 | ||||||||||||||
Total selling, general, and administrative expenses | 8,799 | 8,799 | ||||||||||||||||
Loss (gain) from disposal of fixed assets | — | — | 39 | 39 | ||||||||||||||
Operating income | 2,776 | |||||||||||||||||
Interest expense - net | — | — | — | — | ||||||||||||||
Income before income taxes | 2,776 | |||||||||||||||||
Provision for income taxes | — | — | 1,183 | 1,183 | ||||||||||||||
Net income | $ | 1,593 |
June 18, 2011 | January 1, 2011 | ||||||||
Total Assets: | |||||||||
Environmental Services | $ | 29,681 | $ | 26,498 | |||||
Oil Business | 39,468 | 13,261 | |||||||
Unallocated corporate assets | 38,688 | 49,813 | |||||||
Totalˆ | $ | 107,837 | $ | 89,572 |
Stock Options | Number of Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value as of Date Listed (in thousands) | |||||||||
Outstanding at January 1, 2011 | 889,654 | $ | 10.76 | 7.39 | $ | 430 | |||||||
Granted | — | ||||||||||||
Exercised | (1,211 | ) | 7.33 | ||||||||||
Options outstanding at June 18, 2011 | 888,443 | 10.77 | 6.93 | 5,441 | |||||||||
Unvested stock options at June 18, 2011 | 78,805 | 7.33 | 7.77 | 753 | |||||||||
Vested stock options at June 18, 2011 | 809,638 | 11.10 | 6.85 | 4,687 | |||||||||
Options exercisable at June 18, 2011 | 809,638 | 11.10 | 6.85 | 4,687 |
Stock Options | Number of Options | Weighted Average Grant-Date Fair Value Per Option | ||||
Nonvested stock options outstanding at January 1, 2011 | 118,219 | $ | 3.24 | |||
Granted | — | — | ||||
Vested | 39,414 | $ | 3.24 | |||
Expired | — | — | ||||
Forfeited | — | — | ||||
Nonvested stock options outstanding at June 18, 2011 | 78,805 | $ | 3.24 |
Restricted Stock (Nonvested Shares) | Number of Shares | Weighted Average Grant-Date Fair Value Per Share | ||||
Nonvested shares outstanding at January 1, 2011 | 15,492 | $ | 9.68 | |||
Granted – March 2011 | 92,909 | $ | 11.85 | |||
Granted – May 2011 | 8,346 | $ | 17.96 | |||
Vested | 15,492 | $ | 9.68 | |||
Expired | — | — | ||||
Forfeited | — | — | ||||
Nonvested shares outstanding at June 18, 2011 | 101,255 | $ | 12.35 |
• | The performance condition was eliminated; |
• | 40% of the 55,000 restricted shares or 22,000 shares became fully vested on the date of modification; |
• | Portions of the remaining 33,000 restricted shares will vest using the following schedule: |
◦ | May 17, 2011 (One-third) |
◦ | May 17, 2012 (One-third) |
◦ | May 17, 2013 (One-third) |
Second Quarter Ended, | First Half Ended, | ||||||||||||||
June 18, 2011 | June 19, 2010 | June 18, 2011 | June 19, 2010 | ||||||||||||
Net income | $ | 719 | $ | 931 | $ | 1,057 | $ | 1,593 | |||||||
Number of shares outstanding at quarter end | 14,322 | 13,757 | 14,322 | 13,757 | |||||||||||
Effect of using weighted average shares outstanding | (16 | ) | (2,848 | ) | (45 | ) | (2,946 | ) | |||||||
Weighted average basic shares outstanding | 14,306 | 10,909 | 14,277 | 10,811 | |||||||||||
Dilutive shares for share–based compensation plans | 444 | 64 | 306 | 60 | |||||||||||
Weighted average diluted shares outstanding | 14,750 | 10,973 | 14,583 | 10,871 | |||||||||||
Potentially issuable shares | 919 | 939 | 919 | 939 | |||||||||||
Number of anti–dilutive potentially issuable shares excluded from diluted shares outstanding | — | 732 | — | 732 | |||||||||||
Net income per share: basic | $ | 0.05 | $ | 0.09 | $ | 0.07 | $ | 0.15 | |||||||
Net income per share: diluted | $ | 0.05 | $ | 0.08 | $ | 0.07 | $ | 0.15 |
Second Quarter Ended, | First Half Ended, | ||||||||||||||||||||||
June 18, 2011 | June 19, 2010 | June 18, 2011 | June 19, 2010 | ||||||||||||||||||||
Sales | $ | 31,968 | 100.0 | % | $ | 25,338 | 100.0 | % | $ | 60,707 | 100.0 | % | $ | 49,343 | 100.0 | % | |||||||
Operating expenses - | |||||||||||||||||||||||
Operating costs | 24,729 | 77.4 | % | 18,323 | 72.3 | % | 47,241 | 77.8 | % | 35,941 | 72.8 | % | |||||||||||
Selling, general and administrative expenses | 4,815 | 15.1 | % | 4,285 | 16.9 | % | 9,356 | 15.4 | % | 8,503 | 17.2 | % | |||||||||||
Depreciation and amortization | 1,215 | 3.8 | % | 1,055 | 4.2 | % | 2,325 | 3.8 | % | 2,084 | 4.2 | % | |||||||||||
Loss (gain) on disposal of fixed assets - net | (12 | ) | — | % | 39 | 0.2 | % | (12 | ) | — | % | 39 | 0.1 | % | |||||||||
Operating income | 1,221 | 3.8 | % | 1,636 | 6.5 | % | 1,797 | 3.0 | % | 2,776 | 5.6 | % | |||||||||||
Interest expense – net | 10 | — | % | — | — | % | 14 | — | % | — | — | % | |||||||||||
Income before income taxes | 1,211 | 3.8 | % | 1,636 | 6.5 | % | 1,783 | 2.9 | % | 2,776 | 5.6 | % | |||||||||||
Provision for income taxes | 492 | 1.5 | % | 705 | 2.8 | % | 726 | 1.2 | % | 1,183 | 2.4 | % | |||||||||||
Net income | $ | 719 | 2.2 | % | $ | 931 | 3.7 | % | $ | 1,057 | 1.7 | % | $ | 1,593 | 3.2 | % |
Second Quarter Ended, | Increase | |||||||||||||||
June 18, 2011 | June 19, 2010 | $ | % | |||||||||||||
Sales: | ||||||||||||||||
Environmental Services | $ | 27,641 | $ | 24,132 | $ | 3,509 | 14.5 | % | ||||||||
Oil Business | 4,327 | 1,206 | 3,121 | 258.8 | % | |||||||||||
Total | $ | 31,968 | $ | 25,338 | $ | 6,630 | 26.2 | % | ||||||||
First Half Ended, | Increase | |||||||||||||||
June 18, 2011 | June 19, 2010 | $ | % | |||||||||||||
Sales: | ||||||||||||||||
Environmental Services | 53,753 | 46,896 | 6,857 | 14.6 | % | |||||||||||
Oil Business | 6,954 | 2,447 | 4,507 | 184.2 | % | |||||||||||
Total | 60,707 | 49,343 | 11,364 | 23.0 | % |
Second Quarter Ended, | Increase | |||||||||||||||
June 18, 2011 | June 19, 2010 | $ | % | |||||||||||||
Profit before SG&A* | ||||||||||||||||
Environmental Services | $ | 6,631 | $ | 6,627 | $ | 4 | 0.1 | % | ||||||||
Oil Business | (440 | ) | (517 | ) | 77 | 14.9 | % | |||||||||
Total | $ | 6,191 | $ | 6,110 | $ | 81 | 1.3 | % | ||||||||
First Half Ended, | Increase (Decrease) | |||||||||||||||
June 18, 2011 | June 19, 2010 | $ | % | |||||||||||||
Profit before SG&A* | ||||||||||||||||
Environmental Services | 12,662 | 12,394 | 268 | 2.2 | % | |||||||||||
Oil Business | (1,217 | ) | (780 | ) | (437 | ) | (56.0 | )% | ||||||||
Total | 11,445 | 11,614 | (169 | ) | (1.5 | )% |
First Half Ended, (Dollars in thousands) | |||||||
June 18, 2011 | June 19, 2010 | ||||||
Net cash provided by (used in): | |||||||
Operating activities | $ | (3,777 | ) | $ | 3,066 | ||
Investing activities | (20,434 | ) | (3,505 | ) | |||
Financing activities | 9,877 | 22,076 | |||||
Net increase (decrease) in cash and cash equivalents | $ | (14,334 | ) | $ | 21,637 |
• | Earnings decline — Our net income for the first half of 2011 negatively impacted our net cash provided by operating activities by $0.5 million compared to the first half of 2010. |
• | Accounts Receivable — The increase of accounts receivable negatively affected cash flows from operations by $1.7 million in the first half of 2011 compared to first half of 2010. During the first half of 2011, we experienced an improvement in sales compared to the first half of 2010. This acceleration of sales led to a higher accounts receivable balance at the end of the first half of 2011. |
• | Inventory — The increase in inventory negatively affected cash flows from operations by $4.6 million in the first half of 2011 compared to the first half of 2010. The change mostly reflects the increasing value of our inventories due to the increase of crude oil prices along with the increase of our used oil inventories associated with the ramp up of used oil collection efforts associated with the used oil re-refining project. |
• | Capital expenditures and software and intangible assets— We used $20.4 million and $3.5 million for capital expenditures during the first half of 2011 and the first half of 2010, respectively. During the first half of 2011, we spent $17.0 million dollars on the used oil re-refining project compared to $1.1 million in the first half of 2010. In the first half of 2011, we acquired the assets of the Warrior Group, net of cash for approximately $0.9 million. The remaining $0.3 million in the first half of 2011 was for other items including office equipment, leasehold improvements, software and intangible assets compared to $0.6 million in the first half of 2010. Additionally, in the first half of 2011, approximately $2.2 million of the capital expenditures were for purchases of parts cleaning machines compared to $1.8 million in the first half of 2010. |
• | Proceeds from the issuance of common stock, net of offering costs — During the first half of 2010, we received approximately $22 million in net proceeds in conjunction with a secondary public offering of common stock. |
• | Proceeds from note payable - bank — During the first half of 2011, we borrowed $10.0 million on our term loan. We did not have any borrowings in the first half of 2010. |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxomony Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
Date: | August 1, 2011 | By: | /s/ Gregory Ray |
Gregory Ray | |||
Chief Financial Officer, Vice President, Business Management and Secretary |
1. | I have reviewed this Form 10-Q for the quarter ended June 18, 2011 of Heritage-Crystal Clean, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 1, 2011 | By: /s/ Joseph Chalhoub |
Joseph Chalhoub | |
President, CEO and Director — Principal Executive Officer |
1. | I have reviewed this Form 10-Q for the quarter ended June 18, 2011 of Heritage-Crystal Clean, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 1, 2011 | By: /s/ Gregory Ray |
Gregory Ray | |
Chief Financial Officer, Vice President, Business Management and Secretary |
Date: August 1, 2011 | By: /s/ Joseph Chalhoub |
Joseph Chalhoub | |
President, CEO and Director — Principal Executive Officer |
Date: August 1, 2011 | By: /s/ Gregory Ray |
Gregory Ray | |
Chief Financial Officer, Vice President, Business Management and Secretary |
Consolidated Balance Sheets Parenthetical (USD $)
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Jun. 18, 2011
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Jan. 01, 2011
|
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Common stock, shares authorized | 18,000,000 | 18,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 14,322,053 | 14,220,321 |
Common stock, shares outstanding | 14,322,053 | 14,220,321 |
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
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Jun. 18, 2011
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Jun. 19, 2010
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Jun. 18, 2011
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Jun. 19, 2010
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Sales | $ 31,968 | $ 25,338 | $ 60,707 | $ 49,343 |
Operating expenses - | Â | Â | Â | Â |
Operating costs | 24,729 | 18,323 | 47,241 | 35,941 |
Selling, general and administrative expenses | 4,815 | 4,285 | 9,356 | 8,503 |
Depreciation and amortization | 1,215 | 1,055 | 2,325 | 2,084 |
Loss (gain) on disposal of fixed assets - net | (12) | 39 | (12) | 39 |
Operating income | 1,221 | 1,636 | 1,797 | 2,776 |
Interest expense – net | 10 | 0 | 14 | 0 |
Income before income taxes | 1,211 | 1,636 | 1,783 | 2,776 |
Provision for income taxes | 492 | 705 | 726 | 1,183 |
Net income | $ 719 | $ 931 | $ 1,057 | $ 1,593 |
Net income per share: basic | $ 0.05 | $ 0.09 | $ 0.07 | $ 0.15 |
Net income per share: diluted | $ 0.05 | $ 0.08 | $ 0.07 | $ 0.15 |
Number of weighted average common shares outstanding: basic | 14,306 | 10,909 | 14,277 | 10,811 |
Number of weighted average common shares outstanding: diluted | 14,750 | 10,973 | 14,583 | 10,871 |
Document and Entity Information
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6 Months Ended | |
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Jun. 18, 2011
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Jul. 18, 2011
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Document Information [Line Items] | Â | Â |
Entity Registrant Name | Heritage-Crystal Clean, Inc. | Â |
Entity Central Index Key | 0001403431 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Non-accelerated Filer | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 18, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Amendment Flag | false | Â |
Entity Common Stock, Shares Outstanding | Â | 14,325,589 |
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Other Assets
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Jun. 18, 2011
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets Disclosure [Text Block] | OTHER ASSETS Other current assets consisted of the following (in thousands):
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Debt And Financing Arrangements
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6 Months Ended |
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Jun. 18, 2011
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Debt Disclosure [Abstract] | Â |
Debt Disclosure [Text Block] | DEBT AND FINANCING ARRANGEMENTS Bank Credit Facility In March 2011, the Company amended its secured bank credit facility to allow for up to $40 million in borrowings, of which $20 million is available as a term loan having a maturity date of March 15, 2016. The remaining $20 million is available as a revolving loan which expires on December 14, 2012. On June 9, 2011, the Company borrowed $10 million under the term loan. The Company did not have any amounts outstanding under the credit facility during fiscal year 2010. Under the terms of the credit facility, interest is payable monthly at the prime rate plus 25 basis points, unless the total leverage ratio is greater than or equal to 2.75 to 1. The allowed total leverage ratio is on a graduated scale that allows for maximum total leverage ratios from 3.25 to 1 to 4.0 to 1. The credit facility also includes an excess cash flow provision that requires additional principal payments on the term loan if the excess earnings before interest, taxes, depreciation and amortization ("EBITDA") for the fiscal year exceeds the formula rate set forth in the credit facility. Amounts borrowed under the credit facility are secured by substantially all of the Company’s tangible and intangible assets. As of June 18, 2011, and January 1, 2011, we were in compliance with all covenants under the credit facility. As of June 18, 2011, and January 1, 2011, the Company had $0.3 million and $0.2 million of standby letters of credit issued, respectively, and $29.7 million and $29.8 million was available for borrowing under the bank credit facility, respectively. Notes Payable On February 23, 2011, the Company executed promissory notes with each of the three entities of the Warrior Group with a combined face value of $2.6 million in conjunction with the acquisition of the Warrior Group. The three principals of the Warrior Group are currently employees of the Company. Each of the promissory notes are non-interest bearing and are subordinated to the Company's secured bank credit facility. The promissory notes require quarterly principal payments and have maturity dates of February 1, 2014 and November 1, 2015. The promissory notes are recorded at the net present value of the notes of approximately $2.1 million as of June 18, 2011 of which $0.6 million is recorded as current maturities of long-term debt. In the first half of 2011, the Company made principal payments of $0.3 million on the notes. In the second quarter and first half of 2011, the Company accrued imputed interest expense on these notes of $10,078 and $13,798, respectively. |
Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 18, 2011
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Accounting Policies Abstract [Abstract] | Â |
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires the use of certain estimates by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Significant items subject to such estimates and assumptions are the allowance for doubtful accounts receivable and valuation of inventory at lower of cost or market. Actual results could differ from those estimates. Operating Costs Within operating costs are cost of sales. Cost of sales includes the costs of the materials the Company sells and provides in its services, such as solvent and other chemicals, depreciation on the parts cleaning machines the Company owns and provides to customers, cleaning machines sold to customers, transportation of solvents and waste, and payments to other parties to recycle or dispose of the waste materials that the Company collects. The Company’s used solvent that it retrieves from customers in its product reuse program is accounted for as a reduction in net cost of solvent under cost of sales, whether placed in inventory or sold to a purchaser for reuse. If the used solvent is placed in inventory it is recorded at its net realizable value. Operating costs include the Company's costs of operating its branch system and hubs, including personnel costs (including commissions), facility rent, and truck leases, fuel and maintenance. Fair Value of Financial Instruments The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data. The Company’s financial instruments consist primarily of cash, trade receivables, trade payables and notes payable. As of June 18, 2011 and January 1, 2011, the carrying values of cash, trade receivables, trade payables, and notes payable are considered to be representative of their respective fair values. Acquisitions The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired, liabilities assumed, contractual contingencies and contingent consideration be recorded at the date of acquisition at their respective fair values. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred, and restructuring costs to be expensed in periods subsequent to the acquisition date. The Company has recorded a preliminary purchase price allocation for its acquisition. The Company will finalize the purchase price allocation as additional information, relative to the fair values of the assets acquired becomes known. Identifiable Intangible Assets The fair value of identifiable intangible assets are based on significant judgments made by management. The Company may engage third party valuation appraisal firms to assist the Company in determining the fair values and useful lives of the assets acquired. Such valuations and useful life determinations require the Company to make significant estimates and assumptions. These estimates and assumptions are based on historical experience and information obtained from the management of the acquired companies, and also include, but are not limited to, future expected cash flows to be earned from the continued operation of the acquired business and discount rates applied in determining the present value of those cash flows. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Acquisition-related finite lived intangible assets are amortized on a straight-line basis over their estimated economic lives. The Company evaluates the estimated benefit periods and recoverability of its intangible assets when facts and circumstances indicate that the lives may not be appropriate and/or the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Goodwill Goodwill is measured as a residual amount as of the acquisition date, which in most cases results in measuring goodwill as an excess of the purchase consideration transferred plus the fair value of any noncontrolling interest in the acquiree over the fair value of the net assets acquired, including any contingent consideration. The Company will test goodwill for impairment annually and in interim periods if changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. New Accounting Pronouncements Business Combinations: Disclosure of Supplementary Pro Forma Information In December 2010, the FASB issued ASU No. 2010-29, “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the FASB Emerging Issues Task Force),” which amends authoritative guidance on business combinations regarding how public entities disclose supplemental pro forma information for business combinations that occur during the year. Entities that present comparative financial statements for business combinations must disclose the revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the prior annual reporting period. The authoritative guidance also expanded the disclosures for entities to provide the nature and amount of material, nonrecurring pro forma adjustments directly related to the business combination that is included in the reported pro forma revenue and earnings. The authoritative guidance is effective for business combinations completed in the periods beginning after December 15, 2010 and is applied prospectively as of the date of adoption. The Company adopted the authoritative guidance on January 2, 2011. The Company has determined that the asset purchase as described in Note 3 Business Combination was immaterial from a financial statement perspective and therefore has not presented pro forma financial information. Fair Value Measurements and Disclosures In May 2011, the FASB issued Accounting Standards Update No. 2011-04 ("ASU 2011-04"), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This update provides guidance that is expected to result in common fair value measurement and disclosure requirements between U.S. GAAP and IFRS, and changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. This update is not intended to result in a change in the application of the requirements in Topic 820. The amendments in this update include those that clarify the FASB's intent about the application of existing fair value measurement requirements and those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update are effective for interim and annual periods beginning after December 15, 2011, and are to be applied prospectively. The Company does not expect the adoption of ASU 2011-04 to have a material effect on its consolidated financial results. |
Software And Other Intangible Assets
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Jun. 18, 2011
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Software and Other Intangible Assets [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | SOFTWARE AND OTHER INTANGIBLE ASSETS Following is a summary of software and other intangible assets (in thousands):
________________ (a) Includes preliminary fair values of assets acquired in the acquisition described in Note 3 that may be adjusted as additional information becomes known. Amortization expense was $0.3 million for the first half ended June 18, 2011 and $0.5 million for fiscal year ended January 1, 2011. The weighted average useful lives of software, patents, non-competes and other intangibles was 9 years, 15 years, 5 years and 8 years, respectively. The expected amortization expense for fiscal years 2011, 2012, 2013, 2014 and 2015 is $0.6 million, $0.5 million, $0.4 million, $0.3 million, and $0.3 million, respectively. The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, disposal of intangible assets, accelerated amortization of intangible assets and other events. |
Commitments And Contingencies
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6 Months Ended |
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Jun. 18, 2011
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Commitments and Contingencies Disclosure [Abstract] | Â |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES The Company may enter into purchase obligations with certain vendors. These purchase obligations are generally cancelable without notice, without penalty, although certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract. The Company has purchase obligations in the form of open purchase orders of $14.2 million as of June 18, 2011, of which $6.1 million is related to the construction of the Company’s used oil re-refinery. The remaining $8.1 million is primarily for solvent and machine purchases as well as disposal expense. The Company may be subject to investigations, claims or lawsuits as a result of operating its business, including matters governed by environmental laws and regulations. When claims are asserted, the Company evaluates the likelihood that a loss will occur and records a liability for those instances when the likelihood is deemed probable and the exposure is reasonably estimable. The Company carries insurance at levels it believes are adequate to cover loss contingencies based on historical claims activity. When the potential loss exposure is limited to the insurance deductible and the likelihood of loss is determined to be probable, the Company accrues for the amount of the required deductible, unless a lower amount of exposure is estimated. As of June 18, 2011 and January 1, 2011, the Company had accrued $0.2 million and $0.2 million related to loss contingencies, respectively. On October 1, 2010, Ecological Services, Inc. (“ESI”), a non-hazardous wastewater treatment facility in Indiana, filed a Chapter 7 Bankruptcy proceeding. The U.S. Environmental Protection Agency (“EPA”) has determined that the Company was the third largest Potential Responsible Party ("PRP") of waste to the site over the last six years of ESI's operation and assigned the Company the proportional share of 9.5% of the costs related to the clean up of the ESI site. On March 30, 2011, the Company signed an Administrative Consent Agreement with the EPA and the other significant PRPs to manage storm water at the site and clean the process residues from tanks (the “Consent Agreement”). Under the Consent Agreement, the PRPs are responsible for the EPA's past and future costs and the cost of removing all waste and chemicals remaining at the ESI site. The EPA's cost estimate for waste removal and other remediation at the site is $2.4 million. The Company's best estimate of its proportional share of the total exposure is $162,000. As of June 18, 2011, the Company had paid $154,000 in remediation costs to the fund, of which $95,000 related to costs already incurred, before consideration for any insurance reimbursement the Company may receive. The Company filed a claim with its insurance carrier for coverage under an existing policy. The Company has also filed a claim under ESI's environmental insurance policy under which it is listed as an additional insured. The Company received $5,000 from its insurance carrier in the second quarter for its obligation, but the Company's insurance provider has declined to make subsequent payments. The Company intends to challenge its insurance carrier's position regarding coverage and to also pursue insurance coverage under ESI's environmental insurance policy. |
Accounts Payable
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Jun. 18, 2011
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Accounts Payable Disclosure [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable Disclosure [Text Block] | ACCOUNTS PAYABLE Accounts payable consisted of the following (in thousands):
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Property, Plant and Equipment
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Jun. 18, 2011
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Property, Plant and Equipment [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands):
________________ (a) Includes preliminary fair values of assets acquired in the acquisition described in Note 3 that may be adjusted as additional information becomes known. |
Business Combination
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6 Months Ended |
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Jun. 18, 2011
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Business Combinations [Abstract] | Â |
Business Combination Disclosure [Text Block] | BUSINESS COMBINATION On February 23, 2011, the Company acquired certain assets and liabilities of Warrior Oil Service, Inc., JBS Oil, Inc., C&J Recovery, LLC, and affiliates, a group of related companies (collectively, “Warrior Group”) in exchange for $0.9 million in cash, $0.8 million of the Company's common stock, and $2.6 million in subordinated notes. The preliminary purchase price allocation resulted in allocating $2.1 million to property, plant and equipment, $1.1 million to goodwill, $0.8 million to intangible assets, and $0.1 million to inventory for a total of $4.1 million. The difference between the consideration of $4.3 million and the allocation of $4.1 million is due to the non-interest bearing promissory notes being recorded at their net present value which is $0.2 million less than the face value of the notes. The Company has recorded expense of less than $0.1 million in transaction costs related to this acquisition. The Company is continuing to evaluate the initial purchase price allocations for the acquisition and will adjust the allocations if additional information, relative to the fair values of the assets and liabilities becomes known. The Company acquired the Warrior Group to add used oil collection volume primarily in the states of Indiana, Illinois, and Kentucky. The operating results of the Warrior Group acquisition are included in the Company's consolidated results of operations and also in the Oil Business segment from the date of acquisition. In addition, the Company has allocated the assets acquired, including goodwill, to the Oil Business segment. In the second fiscal quarter and first half of 2011, the Company also acquired small tuck-in acquisitions that have been immaterial to the financial statements. |
Accounts Receivable
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Jun. 18, 2011
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Accounts Receivable [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following (in thousands):
The following table provides the changes in the Company’s allowance for doubtful accounts for the first half ended June 18, 2011 and the fiscal year ended January 1, 2011 (in thousands):
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3T-N]UT_M^3?SHI6S-,:QU$-D.I)HPLK XV?5O?O#9[]@SO-$_3S$'0=\V!HFL]LC\]O>2=RSNI
MKATXS;:[T;EG.. 080.J9]&G&C_`O;^TGO"B=(DPFT@?$`!5O@P*"YE=G$#((U@M9
M=H@W^1EM5;..@Z2V80^D&V[:9^63D%$+I%R`4(U[B-VB=+DG1`1/36&>V.0G
MM`V,6P[*].8UT*SK?=,6LV/'*J_*I$""(-PKA)47R`,`3.46#<1>!^=;Z@]36ZL`SH^W\"8?\EA6F&T#Q=J%+U7]2VEI]/F]I@L@J4MYH"A
M:*=ZJN-Q,ZDGT>8.-#L=-\,PZ;V3%D.,D2HG4O#L5(R1,$::YQM$;:PRPO'Y
M!L9(2W8R@E99EJ3A1E.CZP_B5LSS'],@CZB-]4];P]86L\)8JU,]WBFYJ:37
M-_JAFV*LMOMJ^O+(B:?5\S@RY>Y&>[J*Z7L,VS!LF^,<4D\GZ!P8MVV!\B>(
MVOB>6I;>8^2V&Y1O)7JPXVE7HO9L:9O"]HK&^`Z#N1;U@Z?DN7IS\VKHN1C?
M;1+?">="S/+]F%]#E4[;@MSAZ\%VX8A3B(TUO;FUU:N@:8LQ8/#
W)869!5LLDAQ4!ZX9I'VX%4:Z+#N8WSV]3Z;>.`'+M9Z%B*WO1K"&7RO1
MOIQT2B]@-Q)T,4=YFSRDF6.ZDL,FT#>8L<#1.-9ZI
M+26PK*MTTE6C='8=L[FR:D>8U6OX/:OZ$`D%H`_H`_J`OA.0+M#7FF?0$N*V
MQ]<178H_'5R$!Y98^QZIK;H'$]I)8`ANZ;'=THX+[9:)QZ@&/:?;$P%D!5GM
MV[P]3K5?IV0%7`%7P!5P=2JR`JZ`*^"J@X[/HC].)]#6<+.'C&]SU.R_MJ/<
M^'WBXWTY'M=I/"H?=,6&:3*2_C$+,WJ7%"0C-I+/!W_`7``P'N:Q1+O5D>)2P'Z`"Z-:!S=Q.@NQ%R_32;IEE8,"E,
M1L_/)D$<3:(D+*(T`4*!T,.HQ3Z!C?>24#H"Z"[:>ZWBG.;1PYP0%41UP4F9
M3H@*J`*J@"J@ZA1$!50!54!5U[P=;$-6?+H*8^PX=I)D[?PN".TM67H.5NV?
M\]W^:B3-D%4=^]0L@LE0.E`Z4#I[W[]7L:!SH'.@
GFM9?('S`D8S2D&U@]8GQK)U(-X0VK?
72:)8M]X!_(EL\2D)W!+A[!?9/YT-8>T`,7
M"#V&9:7XN!^1T1!EO[-B;<.]83$+N?>?SV+A?,QB/@KC,3VA$6^8M_[#!9&T
M*WKR*P$O%`CLTX#F;3AGIS($^]>3_R2-1WHKG
8+7O5JBPV[R"CF`-/4_JFX_=\+=`UV_=Z@:*[MCJP#-U>
MV3E)E'\?N3;DY5VP>]UY?C?\>*W?ZVQ.@DT^;?\*TBKI
M:2CY`>I-3;Q=.4Y;K9UDJ&/379#IQ)?O!R)C+$F:P3A%,4]"PED<"IY1+"/.
M0<)=&7&SZ']L/;:AW=Y4^V?