Highlights:
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 third quarter
which ended September 9, 2017.
Third Quarter Review
Revenues for the third quarter of 2017 were $83.3 million
compared to $81.9 million for the same quarter of 2016, an increase
of 1.8%.
Operating margin decreased to 19.6% compared to 20.5% in the
third quarter of 2016 as both of our reporting segments experienced
higher costs in certain areas. Our third quarter SG&A expense
as a percentage of revenue remained flat at 14.2% compared to the
third quarter of 2016 as we incurred higher severance and
compensation expenses which were offset by significantly lower
legal fees compared to the prior year.
Net income attributable to common shareholders for the third
quarter was $4.7 million compared to net income attributable to
common shareholders of $2.3 million in the year earlier quarter.
Basic earnings per share was $0.21 in the third quarter of fiscal
2017 compared to basic earnings per share of $0.10 in the third
quarter of fiscal 2016. Pre-tax income during the third quarter of
2017 includes a $3.1 million gain on the sale of property,
partially offset by $1.2 million of severance cost from the
departure of our Chief Operating Officer during the third
quarter.
Segments
Our Environmental Services segment includes parts cleaning,
containerized waste, vacuum services, antifreeze recycling, and
field services. Environmental Services revenue was $55.0 million
during the quarter compared to $51.3 million during the third
quarter of fiscal 2016 as the Company saw growth in all of our
services lines except for our field services business during the
quarter. Environmental Services operating margin was 27.2%
compared to 29.4% in 2016. The decline in operating margin was
primarily due to higher labor costs due to the addition of sales
and service resources along with higher solvent and workers'
compensation expense, partly offset by lower disposal costs.
President and CEO Brian Recatto commented, "We are pleased with
the growth rate achieved in this segment during the quarter and we
continue to invest the resources required to drive additional
growth."
Our Oil Business segment includes used oil collection
activities, sales of recycled fuel oil, and re-refining activities.
During the third quarter of fiscal 2017, Oil Business revenues
decreased 7.5% to $28.3 million compared to $30.6 million in the
third quarter of fiscal 2016. Oil Business segment operating margin
was 4.9% in the third quarter of 2017 compared to 5.7% in the third
quarter of fiscal 2016. During the third quarter of fiscal 2017
rail service issues with one of our vendors negatively impacted our
Oil Business revenues by approximately $1.0 million and negatively
impacted operating profit in this segment by approximately $0.5
million. Additionally, incremental expenses due to a planned,
extended shutdown at our re-refinery negatively impacted Oil
Business operating profit by approximately $0.4 million during the
quarter.
Brian Recatto commented, "Despite additional costs associated
with a scheduled, extended shutdown during the beginning of our
third quarter and logistical challenges caused by railroad service
disruptions, we were still able to generate operating margin of
almost 5%. The capital improvements completed during the shutdown
should allow us to reduce future downtime and improve
profitability."
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 3, 2017 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 83 branches
serving over 90,000 customer locations.
Conference Call
The Company will host a conference call on Thursday, October 19,
2017 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) |
|
|
|
September 9, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
33,452 |
|
|
$ |
36,610 |
|
Accounts
receivable - net |
|
45,881 |
|
|
47,533 |
|
Inventory
- net |
|
20,934 |
|
|
18,558 |
|
Other
current assets |
|
6,832 |
|
|
6,094 |
|
Total Current
Assets |
|
107,099 |
|
|
108,795 |
|
Property,
plant and equipment - net |
|
128,123 |
|
|
131,175 |
|
Equipment
at customers - net |
|
23,052 |
|
|
23,033 |
|
Software
and intangible assets - net |
|
17,607 |
|
|
19,821 |
|
Goodwill |
|
31,580 |
|
|
31,483 |
|
Total
Assets |
|
$ |
307,461 |
|
|
$ |
314,307 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
Liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
26,730 |
|
|
$ |
30,984 |
|
Current
maturities of long-term debt |
|
— |
|
|
6,936 |
|
Accrued
salaries, wages, and benefits |
|
5,693 |
|
|
6,312 |
|
Taxes
payable |
|
7,601 |
|
|
6,729 |
|
Other
current liabilities |
|
2,725 |
|
|
3,245 |
|
Total Current
Liabilities |
|
42,749 |
|
|
54,206 |
|
Long-term
debt, less current maturities |
|
28,651 |
|
|
56,518 |
|
Deferred
income taxes |
|
13,210 |
|
|
5,314 |
|
Total
Liabilities |
|
$ |
84,610 |
|
|
$ |
116,038 |
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
Common stock -
26,000,000 shares authorized at $0.01 par value, 22,879,830 and
22,300,007 shares issued and outstanding at September 9, 2017 and
December 31, 2016, respectively |
|
$ |
229 |
|
|
$ |
223 |
|
Additional paid-in
capital |
|
192,416 |
|
|
185,099 |
|
Retained earnings |
|
29,638 |
|
|
12,227 |
|
Total Heritage-Crystal
Clean, Inc. Stockholders' Equity |
|
222,283 |
|
|
197,549 |
|
Noncontrolling
interest |
|
568 |
|
|
720 |
|
Total
Equity |
|
$ |
222,851 |
|
|
$ |
198,269 |
|
Total
Liabilities and Stockholders' Equity |
|
$ |
307,461 |
|
|
$ |
314,307 |
|
Heritage-Crystal Clean, Inc. |
Condensed Consolidated Statements of
Income |
(In Thousands, Except per Share
Amounts) |
(Unaudited) |
|
|
|
Third Quarters Ended, |
|
First Three Quarters Ended, |
|
|
September 9, 2017 |
|
September 10, 2016 |
|
September 9, 2017 |
|
September 10, 2016 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Product
revenues |
|
$ |
29,283 |
|
|
$ |
27,182 |
|
|
$ |
88,095 |
|
|
$ |
75,582 |
|
Service
revenues |
|
54,048 |
|
|
54,690 |
|
|
162,071 |
|
|
165,295 |
|
Total revenues |
|
$ |
83,331 |
|
|
$ |
81,872 |
|
|
$ |
250,166 |
|
|
$ |
240,877 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Operating
costs |
|
$ |
63,649 |
|
|
$ |
61,695 |
|
|
$ |
188,210 |
|
|
$ |
187,654 |
|
Selling,
general, and administrative expenses |
|
10,955 |
|
|
10,726 |
|
|
33,871 |
|
|
34,455 |
|
Depreciation and amortization |
|
4,186 |
|
|
4,196 |
|
|
12,501 |
|
|
12,442 |
|
Other
(income) expense - net |
|
(3,078 |
) |
|
1,439 |
|
|
(11,112 |
) |
|
1,238 |
|
Operating income |
|
7,619 |
|
|
3,816 |
|
|
26,696 |
|
|
5,088 |
|
Interest expense –
net |
|
276 |
|
|
463 |
|
|
775 |
|
|
1,432 |
|
Income before income
taxes |
|
7,343 |
|
|
3,353 |
|
|
25,921 |
|
|
3,656 |
|
Provision for income
taxes |
|
2,586 |
|
|
942 |
|
|
9,361 |
|
|
1,140 |
|
Net income |
|
4,757 |
|
|
2,411 |
|
|
16,560 |
|
|
2,516 |
|
Income attributable to
noncontrolling interest |
|
53 |
|
|
76 |
|
|
158 |
|
|
117 |
|
Net income attributable
to Heritage-Crystal Clean, Inc. common stockholders |
|
$ |
4,704 |
|
|
$ |
2,335 |
|
|
$ |
16,402 |
|
|
$ |
2,399 |
|
|
|
|
|
|
|
|
|
|
Net income per share:
basic |
|
$ |
0.21 |
|
|
$ |
0.10 |
|
|
$ |
0.73 |
|
|
$ |
0.11 |
|
Net income per share:
diluted |
|
$ |
0.20 |
|
|
$ |
0.10 |
|
|
$ |
0.72 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
Number of weighted
average shares outstanding: basic |
|
22,686 |
|
|
22,267 |
|
|
22,515 |
|
|
22,246 |
|
Number of weighted
average shares outstanding: diluted |
|
22,970 |
|
|
22,550 |
|
|
22,813 |
|
|
22,417 |
|
Heritage-Crystal Clean, Inc. |
Reconciliation of Operating Segment
Information |
(Unaudited) |
|
Third Quarter Ended, |
September 9, 2017 |
(thousands) |
|
EnvironmentalServices |
|
Oil Business |
|
Corporate and Eliminations |
|
Consolidated |
Revenues |
|
|
|
|
|
|
|
|
Product
revenues |
|
$ |
5,623 |
|
|
$ |
23,660 |
|
|
$ |
— |
|
|
$ |
29,283 |
|
Service
revenues |
|
49,419 |
|
|
4,629 |
|
|
— |
|
|
54,048 |
|
Total revenues |
|
$ |
55,042 |
|
|
$ |
28,289 |
|
|
$ |
— |
|
|
$ |
83,331 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Operating
costs |
|
38,298 |
|
|
25,351 |
|
|
— |
|
|
63,649 |
|
Operating
depreciation and amortization |
|
1,794 |
|
|
1,555 |
|
|
— |
|
|
3,349 |
|
Profit before corporate
selling, general, and administrative expenses |
|
$ |
14,950 |
|
|
$ |
1,383 |
|
|
$ |
— |
|
|
$ |
16,333 |
|
Selling, general, and
administrative expenses |
|
|
|
|
|
10,955 |
|
|
10,955 |
|
Depreciation and
amortization from SG&A |
|
|
|
|
|
837 |
|
|
837 |
|
Total selling, general,
and administrative expenses |
|
|
|
|
|
$ |
11,792 |
|
|
$ |
11,792 |
|
Other (income) -
net |
|
|
|
|
|
(3,078 |
) |
|
(3,078 |
) |
Operating income |
|
|
|
|
|
|
|
7,619 |
|
Interest expense –
net |
|
|
|
|
|
276 |
|
|
276 |
|
Income before income
taxes |
|
|
|
|
|
|
|
$ |
7,343 |
|
Third Quarter Ended, |
September 10, 2016 |
(thousands) |
|
EnvironmentalServices |
|
Oil Business |
|
Corporate and Eliminations |
|
Consolidated |
Revenues |
|
|
|
|
|
|
|
|
Product
revenues |
|
$ |
4,691 |
|
|
$ |
22,491 |
|
|
$ |
— |
|
|
$ |
27,182 |
|
Service
revenues |
|
46,591 |
|
|
8,099 |
|
|
— |
|
|
54,690 |
|
Total revenues |
|
$ |
51,282 |
|
|
$ |
30,590 |
|
|
$ |
— |
|
|
$ |
81,872 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Operating
costs |
|
34,456 |
|
|
27,239 |
|
|
— |
|
|
61,695 |
|
Operating
depreciation and amortization |
|
1,742 |
|
|
1,618 |
|
|
— |
|
|
3,360 |
|
Profit before corporate
selling, general, and administrative expenses |
|
$ |
15,084 |
|
|
$ |
1,733 |
|
|
$ |
— |
|
|
$ |
16,817 |
|
Selling, general, and
administrative expenses |
|
|
|
|
|
10,726 |
|
|
10,726 |
|
Depreciation and
amortization from SG&A |
|
|
|
|
|
836 |
|
|
836 |
|
Total selling, general,
and administrative expenses |
|
|
|
|
|
$ |
11,562 |
|
|
$ |
11,562 |
|
Other (income) -
net |
|
|
|
|
|
1,439 |
|
|
1,439 |
|
Operating income |
|
|
|
|
|
|
|
3,816 |
|
Interest expense –
net |
|
|
|
|
|
463 |
|
|
463 |
|
Income before income
taxes |
|
|
|
|
|
|
|
$ |
3,353 |
|
First Three Quarters Ended, |
September 9, 2017 |
(Thousands) |
|
EnvironmentalServices |
|
Oil Business |
|
Corporate and Eliminations |
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Product
revenues |
|
$ |
17,215 |
|
|
$ |
70,880 |
|
|
— |
|
|
$ |
88,095 |
|
Service
revenues |
|
146,135 |
|
|
15,936 |
|
|
— |
|
|
162,071 |
|
Total revenues |
|
$ |
163,350 |
|
|
$ |
86,816 |
|
|
$ |
— |
|
|
$ |
250,166 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Operating
costs |
|
111,419 |
|
|
76,791 |
|
|
— |
|
|
188,210 |
|
Operating
depreciation and amortization |
|
5,341 |
|
|
4,624 |
|
|
— |
|
|
9,965 |
|
Profit before corporate
selling, general, and administrative expenses |
|
$ |
46,590 |
|
|
$ |
5,401 |
|
|
$ |
— |
|
|
$ |
51,991 |
|
Selling, general, and
administrative expenses |
|
|
|
|
|
33,871 |
|
|
33,871 |
|
Depreciation and
amortization from SG&A |
|
|
|
|
|
2,536 |
|
|
2,536 |
|
Total selling, general,
and administrative expenses |
|
|
|
|
|
$ |
36,407 |
|
|
$ |
36,407 |
|
Other (income) -
net |
|
|
|
|
|
(11,112 |
) |
|
(11,112 |
) |
Operating income |
|
|
|
|
|
|
|
26,696 |
|
Interest expense –
net |
|
|
|
|
|
775 |
|
|
775 |
|
Income before income
taxes |
|
|
|
|
|
|
|
$ |
25,921 |
|
First Three Quarters Ended, |
September 10, 2016 |
(Thousands) |
|
EnvironmentalServices |
|
Oil Business |
|
Corporate and Eliminations |
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Product
revenues |
|
$ |
14,826 |
|
|
$ |
60,756 |
|
|
$ |
— |
|
|
$ |
75,582 |
|
Service
revenues |
|
141,254 |
|
|
24,041 |
|
|
— |
|
|
165,295 |
|
Total revenues |
|
$ |
156,080 |
|
|
$ |
84,797 |
|
|
$ |
— |
|
|
$ |
240,877 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Operating
costs |
|
106,892 |
|
|
80,762 |
|
|
— |
|
|
187,654 |
|
Operating
depreciation and amortization |
|
5,166 |
|
|
4,789 |
|
|
— |
|
|
9,955 |
|
Profit (loss) before
corporate selling, general, and administrative expenses |
|
$ |
44,022 |
|
|
$ |
(754 |
) |
|
$ |
— |
|
|
$ |
43,268 |
|
Selling, general, and
administrative expenses |
|
|
|
|
|
34,455 |
|
|
34,455 |
|
Depreciation and
amortization from SG&A |
|
|
|
|
|
2,487 |
|
|
2,487 |
|
Total selling, general,
and administrative expenses |
|
|
|
|
|
$ |
36,942 |
|
|
$ |
36,942 |
|
Other expense -
net |
|
|
|
|
|
1,238 |
|
|
1,238 |
|
Operating income |
|
|
|
|
|
|
|
5,088 |
|
Interest expense –
net |
|
|
|
|
|
1,432 |
|
|
1,432 |
|
Income before income
taxes |
|
|
|
|
|
|
|
$ |
3,656 |
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter Ended, |
|
First Three Quarters Ended, |
|
|
|
|
|
|
|
|
|
|
|
|
(thousands) |
|
September 9, 2017 |
|
September 10, 2016 |
|
September 9, 2017 |
|
September 10, 2016 |
|
Net
income |
|
$ |
4,757 |
|
|
$ |
2,411 |
|
|
$ |
16,560 |
|
|
$ |
2,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense - net |
|
276 |
|
|
463 |
|
|
775 |
|
|
1,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
2,586 |
|
|
942 |
|
|
9,361 |
|
|
1,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
4,186 |
|
|
4,196 |
|
|
12,501 |
|
|
12,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(a) |
|
$ |
11,805 |
|
|
$ |
8,012 |
|
|
$ |
39,197 |
|
|
$ |
17,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal Fees
(b) |
|
— |
|
|
1,805 |
|
|
727 |
|
|
5,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fines and
Restitution (c) |
|
— |
|
|
1,579 |
|
|
— |
|
|
1,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
compensation (d) |
|
616 |
|
|
138 |
|
|
1,962 |
|
|
897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
write down(e) |
|
— |
|
|
|
— |
|
|
— |
|
|
1,651 |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of property(f) |
|
(3,071 |
) |
|
— |
|
|
(3,071 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Severance
of COO(g) |
|
1,221 |
|
|
— |
|
|
1,221 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Gain from
Arbitration award(h) |
|
— |
|
|
— |
|
|
(5,136 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Gain from
settlement with sellers of FCCE(i) |
|
— |
|
|
— |
|
|
(3,600 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(j) |
|
$ |
10,571 |
|
|
$ |
11,534 |
|
|
$ |
31,300 |
|
|
$ |
26,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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; andAlthough
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) |
Legal fees incurred to resolve routine and non-routine matters
stemming from the acquisition of FCC Environmental and
International Petroleum Corp. |
|
|
|
|
(c) |
Fines and restitution related to activities at FCC
Environmental and International Petroleum Corp. prior to our
acquisition of these companies. |
|
|
|
|
(d) |
Non-cash compensation expenses which are recorded in
SG&A |
|
|
|
|
(e) |
The write down of inventory values resulted in lower carrying
costs for certain types of inventories. Depending on various
factors, it is possible that these lower inventory values may
result in lower cost of sales in future periods and thereby
positively impact profitability in future periods. |
|
|
|
|
|
|
|
(f) |
Gain from having sold a facility located in Pompano Beach,
Florida. |
|
|
|
|
|
|
|
(g) |
Severance charges related to the departure of our COO. |
|
|
|
|
(h) |
Gain from partial award for claims made in our arbitration
related to our acquisition of FCC Environmental and International
Petroleum Corp. in 2014. |
|
|
|
|
(i) |
Settlement of disputes related to the acquisition of FCC
Environmental and International Petroleum Corp. of Delaware. |
|
|
|
|
(j) |
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 earnings (loss) and adjusted
net earnings (loss) 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 earnings and adjusted net earnings per share provide investors
and management useful information about the earnings impact of the
settlement received in the third fiscal quarter of 2017. |
|
|
|
|
|
|
|
|
|
Reconciliation of our Net Earnings and Net
Earnings Per Share Determined in Accordance with U.S. GAAP to our
Non-GAAP Adjusted Net Earnings and Non-GAAP Adjusted Net Earnings
Per Share |
|
(Dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter Ended, |
|
|
|
|
|
|
|
|
|
|
|
September 9, 2017 |
|
September 10, 2016 |
|
|
|
|
|
|
|
|
GAAP net earnings |
|
|
$ |
4,704 |
|
|
$ |
2,335 |
|
|
|
|
|
|
|
|
|
Gain on sale of
property |
|
|
(3,071 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Severance of COO |
|
|
1,221 |
|
|
— |
|
|
|
|
|
|
|
|
|
Legal fees |
|
|
— |
|
|
1,805 |
|
|
|
|
|
|
|
|
|
Restitution |
— |
|
|
1,059 |
|
|
|
|
|
|
|
|
|
Fines |
|
|
— |
|
|
520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax effect of items
above |
|
|
691 |
|
|
(774 |
) |
|
|
|
|
|
|
|
|
Adjusted net
earnings |
|
|
$ |
3,545 |
|
|
$ |
4,945 |
|
|
|
|
|
|
|
|
|
GAAP
diluted earnings per share |
|
$ |
0.20 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
Gain on sale of
property per share |
|
|
(0.13 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Severance of COO per
share |
|
|
0.05 |
|
|
— |
|
|
|
|
|
|
|
|
|
Legal fees per
share |
|
|
— |
|
|
0.08 |
|
|
|
|
|
|
|
|
|
Restitution per
share |
|
|
— |
|
|
0.05 |
|
|
|
|
|
|
|
|
|
Fines per
share |
— |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax
effect per share of items above |
|
0.03 |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
Adjusted
diluted earnings per share |
|
$ |
0.15 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
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