ELGIN, Ill., May 5, 2009 (GLOBE NEWSWIRE) -- Heritage-Crystal Clean, Inc. (Nasdaq:HCCI), a leading provider of parts cleaning, hazardous and non-hazardous waste services to small and mid-sized customers, today announced results for the first fiscal quarter of 2009, which ended March 28, 2009.
First quarter highlights include: * Sales increased 3%, to $23.8 million, compared to $23.0 million in the first quarter of fiscal 2008. * Total branch count increased by 4 during the quarter, bringing the total to 58, compared to 54 at the end of 2008. * Same-branch sales growth was 2%, measured for the 54 branches that were in operation throughout both the first fiscal quarters of 2009 and 2008. * Average sales per working day was approximately $395,000, compared to $390,000 in the first quarter of fiscal 2008. * Pro forma(1) EPS (basic and diluted) increased to $0.01 compared to $(0.48) in the first quarter of fiscal 2008. The first quarter of fiscal 2009 continued to be impacted by the decrease in the cost of solvent which led to a further reduction in the value of our solvent inventories held for use in the Company's service programs. The impact of this inventory valuation for the first quarter was $0.9 million of additional cost of sales or $0.05 EPS. During the first quarter of fiscal 2008, the Company completed its initial public offering of common stock (IPO). The first quarter of fiscal 2008 pro forma loss included a charge of $0.55 to EPS for non-cash compensation expense and deferred income taxes recorded upon our conversion from an LLC to a "C" corporation.
Mr. Joseph Chalhoub, President and Chief Executive Officer of Heritage-Crystal Clean, Inc. commented, "We are paving the way for future growth while fighting the immediate challenge presented by the recession. In addition to the new branches that commenced operation during the quarter, our customer count grew from 36,000 at the end of 2007 to more than 39,000 at the end of the first quarter 2009. However, many of our customers have reduced their level of activity, resulting in less waste generation and reduced revenue per account. We have yet to see a clear sign of recovery or bottoming of this revenue trend and it is possible that in future quarters of 2009, we could report modest revenue declines versus year-ago quarters. We believe the Company will be well positioned to resume its sales growth when our customers resume their historic levels of activity."
Mr. Greg Ray, CFO and VP of Business Management, stated, "Our financial performance for the first quarter of 2009 was adversely impacted by slow growth, and by the further revaluation of our solvent inventory. However, absent any further volatility in crude oil and solvent prices, we believe that we have now made the necessary inventory adjustments. We have a strong balance sheet, with no debt and cash generation in the first quarter of fiscal 2009 provided for a positive cash balance."
Safe Harbor Statement
All references to the "Company," "we," "our," and "us" refer to Heritage-Crystal Clean, Inc., and its subsidiaries.
This release contains forward-looking statements that are based upon current management expectations. Generally, the words "aim," "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," "will be," "will continue," "will likely result," "would" and similar expressions identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. These risks, uncertainties and other important factors include, among others: our ability to comply with the extensive environmental, health and safety and employment laws and regulations that our Company is subject to; changes in environmental laws that affect our business model; competition; claims relating to our handling of hazardous substances; the limited demand for our used solvent; our dependency on key employees; our ability to effectively manage our extended network of branch locations; warranty expense and liability claims; personal injury litigation; dependency of suppliers; economic conditions including the current recession and financial crisis, and downturns in the business cycles of automotive repair shops, industrial manufacturing business and small businesses in general; increased solvent, fuel and energy costs and volatility in the price of crude oil; the control of The Heritage Group over our Company; and the risks identified in our filings with the Securities and Exchange Commission, including our Registration Statement on Form S-1 and our other SEC filings. Given these uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. We assume no obligation to update or revise them or provide reasons why actual results may differ. The information in this release should be read in light of such risks and in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this release.
About Heritage-Crystal Clean, Inc.
Heritage-Crystal Clean, Inc. provides parts cleaning, hazardous and non-hazardous waste services to small and mid-sized customers in both the manufacturing and automotive service sectors. Our service programs include parts cleaning, containerized waste management, used oil collection, and vacuum truck services. These services help our customers manage their used chemicals and liquid and solid wastes, while also helping to minimize their regulatory burdens. Our customers include businesses involved in vehicle maintenance operations, such as car dealerships, automotive repair shops, and trucking firms, as well as small manufacturers, such as metal product fabricators and printers. Heritage-Crystal Clean, Inc. is headquartered in Elgin, Illinois, and operates through 58 branches serving over 39,000 customer locations.
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Conference Call
The Company will host a conference call on May 6, 2009 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, www.crystal-clean.com/investor/, and can participate in the call by dialing (719) 325-4757.
(1) Pro forma EPS and pro forma net loss are calculated as if we had been a 'C' corporation for the full fiscal quarter 2008.
Financial Statements Heritage-Crystal Clean, Inc. Consolidated Balance Sheets (In Thousands, Except Share and Par Value Amounts) (Unaudited) March 28, Jan 3, 2009 2009 ------- ------- ASSETS Current Assets: Cash and cash equivalents $ 2,231 $ 327 Receivables: Trade, net of allowance for doubtful accounts of $493 and $616 at March 28, 2009 and January 3, 2009, respectively 13,118 14,040 Trade - affiliates 346 331 Other 42 245 ------- ------- Total receivables 13,506 14,616 Income tax refund 480 1,381 Inventory, net 9,565 10,609 Deferred tax assets 991 942 Prepaid income taxes 974 -- Prepaid and other current assets 1,641 1,386 ------- ------- Total Current Assets 29,388 29,261 Property, plant and equipment: Leasehold improvements 758 758 In-service equipment 25,382 24,634 Machinery, vehicles, and equipment 11,618 11,492 Construction in progress 723 427 ------- ------- 38,481 37,311 Less: accumulated depreciation (17,216) (16,433) ------- ------- Net property, plant and equipment 21,265 20,878 Software and intangible assets, net of accumulated amortization of $1,616 and $1,524 at March 28, 2009 and January 3, 2009, respectively 1,822 1,877 ------- ------- Total Assets $52,475 $52,016 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 5,969 $ 5,227 Accounts payable - affiliates 256 534 Accrued salaries, wages, and benefits 1,622 1,920 Taxes payable 891 978 Accrued workers compensation 645 526 Other accrued expenses 752 876 ------- ------- Total Current Liabilities 10,135 10,061 Note payable - bank -- 20 Deferred tax liabilities 529 379 ------- ------- Total Liabilities 10,664 10,460 Commitments and contingencies STOCKHOLDERS' EQUITY: Common stock - 15,000,000 shares authorized at $0.01 par value, 10,685,006 and 10,680,609 shares issued and outstanding at March 28, 2009 and January 3, 2009, respectively 107 107 Additional paid-in capital 42,798 42,643 Accumulated deficit (1,094) (1,194) ------- ------- Total Stockholders' Equity 41,811 41,556 ------- ------- Total Liabilities and Stockholders' Equity $52,475 $52,016 ======= ======= Heritage-Crystal Clean, Inc. Consolidated Statements of Operations (In Thousands, Except per Share Amounts) (Unaudited) First Quarter Ended, March 28, March 22, 2009 2008 ------- ------- Sales $23,756 $22,997 Cost of sales 7,497 6,285 ------- ------- Gross profit 16,259 16,712 ------- ------- Operating costs 12,239 11,516 Selling, general, and administrative expenses 3,852 6,631 ------- ------- Operating income (loss) 168 (1,435) Interest expense - net -- 353 ------- ------- Income (loss) before income taxes 168 (1,788) Provision for income taxes 68 980 ------- ------- Net income (loss) 100 (2,768) Preferred return -- 339 ------- ------- Net income (loss) available to common stockholders $ 100 $(3,107) ======= ======= Net income (loss) per share available to common stockholders: basic $ 0.01 $ (0.41) Net income (loss) per share available to common stockholders: diluted $ 0.01 $ (0.41) ======= ======= Number of weighted average common shares outstanding: basic 10,685 7,620 Number of weighted average common shares outstanding: diluted 10,754 7,620 ======= ======= Pro forma data: Net income (loss) $ 100 $(2,768) Pro forma provision for income taxes -- 497 Return on preferred and mandatorily redeemable capital units -- 372 ------- ------- Pro forma net income (loss) available to common stockholders $ 100 $(3,637) ======= ======= Pro forma net income (loss) per share: basic $ 0.01 $ (0.48) Pro forma net income (loss) per share: diluted $ 0.01 $ (0.48) ======= ======= Heritage-Crystal Clean, Inc. Reconciliation of our Net Income (Loss) Determined in Accordance with GAAP to Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) (Unaudited) First Quarter Ended, (Dollars in thousands) March 28, March 22, 2009 2008 ------- ------- Net income (loss) $ 100 $(2,768) Interest expense - net -- 353 Provision for income taxes 68 980 Depreciation and amortization 877 776 ------- ------- EBITDA(a) $ 1,045 $ (659) ======= ======= (a) EBITDA represents net income before income tax expense, interest income, interest expense, depreciation and amortization. We have presented EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by analysts, investors, our lenders and other interested parties in the evaluation of companies in our industry. Management uses EBITDA as a measurement tool for evaluating our actual operating performance compared to budget and prior periods. Other companies in our industry may calculate EBITDA differently than we do. EBITDA is not a measure of performance under GAAP and should not be considered as a substitute for net income prepared in accordance with GAAP. EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: * EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; * EBITDA does not reflect interest expense or the cash requirements necessary to service interest or principal payments on our debt; * EBITDA does not reflect tax expense or the cash requirements necessary to pay for tax obligations; and * Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements. * We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only as a supplement.