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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hertiage Crystal Clean Inc | NASDAQ:HCCI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 45.51 | 45.28 | 44.00 | 0 | 01:00:00 |
(Mark One)
|
||
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended
|
September 10, 2016
|
|
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
x
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
|
|
|
ITEM 1A. RISK FACTORS
|
30
|
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
32
|
33
|
|
|
|
34
|
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
|
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
29,767
|
|
|
$
|
23,608
|
|
Accounts receivable - net
|
|
47,370
|
|
|
41,592
|
|
||
Inventory - net
|
|
20,723
|
|
|
24,774
|
|
||
Other current assets
|
|
6,563
|
|
|
4,810
|
|
||
Total Current Assets
|
|
104,423
|
|
|
94,784
|
|
||
Property, plant and equipment - net
|
|
131,400
|
|
|
131,365
|
|
||
Equipment at customers - net
|
|
23,277
|
|
|
23,172
|
|
||
Software and intangible assets - net
|
|
20,786
|
|
|
22,202
|
|
||
Goodwill
|
|
31,510
|
|
|
30,325
|
|
||
Total Assets
|
|
$
|
311,396
|
|
|
$
|
301,848
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|||
Current Liabilities:
|
|
|
|
|
|
|||
Accounts payable
|
|
$
|
31,612
|
|
|
$
|
25,129
|
|
Current maturities of long-term debt
|
|
6,659
|
|
|
6,700
|
|
||
Accrued salaries, wages, and benefits
|
|
4,875
|
|
|
4,330
|
|
||
Taxes payable
|
|
7,209
|
|
|
6,735
|
|
||
Other current liabilities
|
|
3,965
|
|
|
3,617
|
|
||
Total Current Liabilities
|
|
54,320
|
|
|
46,511
|
|
||
Long term debt, less current maturities
|
|
59,917
|
|
|
62,778
|
|
||
Deferred income taxes
|
|
3,699
|
|
|
2,726
|
|
||
Total Liabilities
|
|
$
|
117,936
|
|
|
$
|
112,015
|
|
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|||
Common stock - 26,000,000 shares authorized at $0.01 par value, 22,272,941 and 22,213,364 shares issued and outstanding at September 10, 2016 and January 2, 2016, respectively
|
|
$
|
223
|
|
|
$
|
222
|
|
Additional paid-in capital
|
|
183,788
|
|
|
182,558
|
|
||
Retained earnings
|
|
8,784
|
|
|
6,385
|
|
||
Total Heritage-Crystal Clean, Inc. Stockholders' Equity
|
|
192,795
|
|
|
189,165
|
|
||
Noncontrolling interest
|
|
665
|
|
|
668
|
|
||
Total Equity
|
|
$
|
193,460
|
|
|
$
|
189,833
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
311,396
|
|
|
$
|
301,848
|
|
|
|
|
Third Quarter Ended,
|
|
First Three Quarters Ended,
|
||||||||||||
|
|
|
September 10,
2016 |
|
September 12,
2015 |
|
September 10,
2016 |
|
September 12,
2015 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
27,182
|
|
|
$
|
32,888
|
|
|
$
|
75,582
|
|
|
$
|
99,509
|
|
|
Service revenues
|
|
54,690
|
|
|
49,797
|
|
|
165,295
|
|
|
150,154
|
|
||||
Total revenues
|
|
$
|
81,872
|
|
|
$
|
82,685
|
|
|
$
|
240,877
|
|
|
$
|
249,663
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
$
|
61,695
|
|
|
$
|
63,499
|
|
|
$
|
187,654
|
|
|
$
|
197,576
|
|
|
Selling, general, and administrative expenses
|
|
10,726
|
|
|
9,872
|
|
|
34,455
|
|
|
31,553
|
|
||||
|
Depreciation and amortization
|
|
4,196
|
|
|
4,419
|
|
|
12,442
|
|
|
13,050
|
|
||||
|
Other expense (income) - net
|
|
1,439
|
|
|
99
|
|
|
1,238
|
|
|
(153
|
)
|
||||
Operating income
|
|
3,816
|
|
|
4,796
|
|
|
5,088
|
|
|
7,637
|
|
|||||
Interest expense – net
|
|
463
|
|
|
404
|
|
|
1,432
|
|
|
1,366
|
|
|||||
Income before income taxes
|
|
3,353
|
|
|
4,392
|
|
|
3,656
|
|
|
6,271
|
|
|||||
Provision for income taxes
|
|
942
|
|
|
1,637
|
|
|
1,140
|
|
|
2,418
|
|
|||||
Net income
|
|
2,411
|
|
|
2,755
|
|
|
2,516
|
|
|
3,853
|
|
|||||
Income attributable to noncontrolling interest
|
|
76
|
|
|
46
|
|
|
117
|
|
|
115
|
|
|||||
Net income attributable to Heritage-Crystal Clean, Inc. common stockholders
|
|
$
|
2,335
|
|
|
$
|
2,709
|
|
|
$
|
2,399
|
|
|
$
|
3,738
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income per share: basic
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
|
Net income per share: diluted
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Number of weighted average shares outstanding: basic
|
|
22,267
|
|
|
22,153
|
|
|
22,246
|
|
|
22,136
|
|
|||||
Number of weighted average shares outstanding: diluted
|
|
22,550
|
|
|
22,438
|
|
|
22,417
|
|
|
22,405
|
|
|
Shares
|
|
Par
Value
Common
|
|
Additional Paid
–
in
Capital
|
|
Retained Earnings
|
|
Total Heritage-Crystal Clean, Inc. Stockholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 2, 2016
|
22,213,364
|
|
|
$
|
222
|
|
|
$
|
182,558
|
|
|
$
|
6,385
|
|
|
$
|
189,165
|
|
|
$
|
668
|
|
|
$
|
189,833
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,399
|
|
|
2,399
|
|
|
117
|
|
|
2,516
|
|
||||||
Distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
(120
|
)
|
||||||
Issuance of common stock – ESPP
|
32,036
|
|
|
1
|
|
|
324
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
325
|
|
||||||
Exercise of stock options
|
2,202
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
|
|
16
|
|
|||||||
Share-based compensation
|
25,339
|
|
|
—
|
|
|
890
|
|
|
—
|
|
|
890
|
|
|
—
|
|
|
890
|
|
||||||
Balance at September 10, 2016
|
22,272,941
|
|
|
$
|
223
|
|
|
$
|
183,788
|
|
|
$
|
8,784
|
|
|
$
|
192,795
|
|
|
$
|
665
|
|
|
$
|
193,460
|
|
|
|
For the First Three Quarters Ended,
|
||||||
|
|
September 10,
2016 |
|
September 12,
2015 |
||||
Cash flows from Operating Activities:
|
|
|
|
|
||||
Net income
|
|
$
|
2,516
|
|
|
$
|
3,853
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
12,442
|
|
|
13,050
|
|
||
Non-cash inventory impairment
|
|
1,651
|
|
|
6,846
|
|
||
Bad debt provision
|
|
714
|
|
|
1,081
|
|
||
Share-based compensation
|
|
890
|
|
|
815
|
|
||
Deferred taxes
|
|
973
|
|
|
2,250
|
|
||
Amortization of deferred gain on lease conversion
|
|
(201
|
)
|
|
(245
|
)
|
||
Other, net
|
|
383
|
|
|
914
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
(Increase) decrease in accounts receivable
|
|
(6,131
|
)
|
|
3,031
|
|
||
Decrease (increase) in inventory
|
|
2,428
|
|
|
(3,163
|
)
|
||
(Increase) decrease in other current assets
|
|
(1,753
|
)
|
|
3,403
|
|
||
Increase (decrease) increase in accounts payable
|
|
8,890
|
|
|
(11,106
|
)
|
||
Increase (decrease) in accrued expenses
|
|
1,197
|
|
|
(3,704
|
)
|
||
Cash provided by operating activities
|
|
$
|
23,999
|
|
|
$
|
17,025
|
|
|
|
|
|
|
||||
Cash flows from Investing Activities:
|
|
|
|
|
|
|
||
Capital expenditures
|
|
$
|
(12,594
|
)
|
|
$
|
(12,526
|
)
|
Business acquisitions, net of cash acquired
|
|
(2,400
|
)
|
|
—
|
|
||
Proceeds from the sale of property, plant, and equipment
|
|
$
|
304
|
|
|
$
|
106
|
|
Cash used in investing activities
|
|
$
|
(14,690
|
)
|
|
$
|
(12,420
|
)
|
|
|
|
|
|
||||
Cash flows from Financing Activities:
|
|
|
|
|
|
|
||
Payments on term loan
|
|
$
|
(3,371
|
)
|
|
$
|
(5,303
|
)
|
Payments of notes payable
|
|
—
|
|
|
(241
|
)
|
||
Payments of contingent consideration
|
|
—
|
|
|
(95
|
)
|
||
Proceeds from the issuance of common stock
|
|
341
|
|
|
345
|
|
||
Distributions to noncontrolling interest
|
|
(120
|
)
|
|
(410
|
)
|
||
Cash used in financing activities
|
|
$
|
(3,150
|
)
|
|
$
|
(5,704
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
6,159
|
|
|
(1,099
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
23,608
|
|
|
21,555
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
29,767
|
|
|
$
|
20,456
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||
Income taxes paid
|
|
$
|
315
|
|
|
$
|
263
|
|
Cash paid for interest, net of capitalized interest of $100 and $439, respectively
|
|
1,473
|
|
|
1,161
|
|
||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
|
||
Payables for construction in progress
|
|
$
|
287
|
|
|
$
|
1,026
|
|
Accounting standards not yet adopted
|
||||||||
Standard
|
|
Issuance Date
|
|
Description
|
|
Our Effective Date
|
|
Effect on the Financial Statements
|
ASU 2016-09 Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting.
(Topic 718)
|
|
March 2016
|
|
This update addresses the simplification of accounting for employee share-based payment transactions as it pertains to income taxes, the classification of awards as equity or liabilities, accounting for forfeitures, statutory tax withholding requirements, and certain classifications on the statement of cash flows. Early adoption is permitted.
|
|
January 1, 2017
|
|
The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations.
|
ASU 2016-02
Leases
(Topic 842)
|
|
February 2016
|
|
This update was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Early application of the amendments in this update is permitted for all entities.
|
|
January 4, 2019
|
|
The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations.
|
ASU 2014-15 Presentation of Financial Statements - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.
(Subtopic 205-40)
|
|
August 2014
|
|
This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Early adoption is permitted.
|
|
December 31, 2016
|
|
The adoption of ASU 2014-15 is not expected to have an impact on the Company’s consolidated financial statements.
|
ASU 2014-09 Revenue from Contracts with Customers, and
ASU 2015-14 Revenue from Contracts with Customers: Deferral of the Effective Date (Topic 606)
|
|
May 2014
|
|
The underlying principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. Early adoption is not permitted.
|
|
December 31, 2017
|
|
This update could impact the timing and amounts of revenue recognized. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations upon adoption.
|
(Thousands)
|
|
Phoenix Environmental Services
|
||
|
|
|
||
Accounts receivable
|
|
$
|
361
|
|
Inventory
|
|
27
|
|
|
Property, plant, & equipment
|
|
374
|
|
|
Equipment at customers
|
|
55
|
|
|
Intangible assets
|
|
710
|
|
|
Goodwill
(a)
|
|
1,173
|
|
|
Total purchase price
|
|
2,700
|
|
|
Less: contingent consideration
|
|
(300
|
)
|
|
Net cash paid
|
|
$
|
2,400
|
|
|
|
Third Quarter Ended,
|
|
Third Quarter Ended
|
||||
(In thousands, except per share data)
|
|
September 10, 2016
|
|
September 12, 2015
|
||||
Total revenues
|
|
$
|
81,872
|
|
|
$
|
83,600
|
|
Net income
|
|
2,335
|
|
|
2,892
|
|
||
Income per share
|
|
|
|
|
||||
Basic
|
|
$
|
0.10
|
|
|
$
|
0.13
|
|
Diluted
|
|
0.10
|
|
|
0.13
|
|
|
|
First Three Quarters Ended,
|
|
First Three Quarters Ended,
|
||||
(In thousands, except per share data)
|
|
September 10, 2016
|
|
September 12, 2015
|
||||
Total revenues
|
|
$
|
241,602
|
|
|
$
|
252,121
|
|
Net income
|
|
2,357
|
|
|
4,107
|
|
||
Income per share
|
|
|
|
|
||||
Basic
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
Diluted
|
|
0.11
|
|
|
0.18
|
|
(Thousands)
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
Trade
|
|
$
|
42,597
|
|
|
$
|
38,379
|
|
Less: allowance for doubtful accounts
|
|
2,394
|
|
|
2,207
|
|
||
Trade - net
|
|
40,203
|
|
|
36,172
|
|
||
Related parties
|
|
1,378
|
|
|
1,250
|
|
||
Other
|
|
5,789
|
|
|
4,170
|
|
||
Total accounts receivable - net
|
|
$
|
47,370
|
|
|
$
|
41,592
|
|
|
|
For the First Three Quarters Ended,
|
|
For the Fiscal Year Ended,
|
||||
(Thousands)
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
Balance at beginning of period
|
|
$
|
2,207
|
|
|
$
|
3,927
|
|
Balance acquired from FCC Environmental, including measurement period adjustments
|
|
—
|
|
|
2,701
|
|
||
Provision for bad debts
|
|
714
|
|
|
1,009
|
|
||
Accounts written off, net of recoveries
|
|
(527
|
)
|
|
(5,430
|
)
|
||
Balance at end of period
|
|
$
|
2,394
|
|
|
$
|
2,207
|
|
(Thousands)
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
Used oil and processed oil
|
|
$
|
7,254
|
|
|
$
|
9,045
|
|
Solvents and solutions
|
|
4,543
|
|
|
6,285
|
|
||
Machines
|
|
3,127
|
|
|
3,827
|
|
||
Drums and supplies
|
|
4,417
|
|
|
4,226
|
|
||
Other
|
|
1,630
|
|
|
1,681
|
|
||
Total inventory
|
|
20,971
|
|
|
25,064
|
|
||
Less: machine refurbishing reserve
|
|
248
|
|
|
290
|
|
||
Total inventory - net
|
|
$
|
20,723
|
|
|
$
|
24,774
|
|
(Thousands)
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
Machinery, vehicles, and equipment
(a)
|
|
$
|
77,775
|
|
|
$
|
75,129
|
|
Buildings and storage tanks
|
|
69,723
|
|
|
69,317
|
|
||
Land
|
|
10,368
|
|
|
9,295
|
|
||
Leasehold improvements
(a)
|
|
4,758
|
|
|
4,523
|
|
||
Construction in progress
|
|
7,076
|
|
|
4,474
|
|
||
Assets held for sale
|
|
178
|
|
|
189
|
|
||
Total property, plant and equipment
|
|
169,878
|
|
|
162,927
|
|
||
Less: accumulated depreciation
|
|
(38,478
|
)
|
|
(31,562
|
)
|
||
Property, plant and equipment - net
|
|
$
|
131,400
|
|
|
$
|
131,365
|
|
|
|
|
|
|
||||
(Thousands)
|
|
September 10,
2016 |
|
January 2,
2016 |
||||
Equipment at customers
(a)
|
|
$
|
62,380
|
|
|
$
|
59,216
|
|
Less: accumulated depreciation
|
|
(39,103
|
)
|
|
(36,044
|
)
|
||
Equipment at customers - net
|
|
$
|
23,277
|
|
|
$
|
23,172
|
|
(Thousands)
|
|
Oil Business
|
|
Environmental Services
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Balance at January 2, 2016
|
|
$
|
—
|
|
|
$
|
30,325
|
|
|
$
|
30,325
|
|
Phoenix Environmental acquisition
|
|
—
|
|
|
1,173
|
|
|
1,173
|
|
|||
Adjustments
|
|
—
|
|
|
12
|
|
|
12
|
|
|||
Balance at September 10, 2016
|
|
$
|
—
|
|
|
$
|
31,510
|
|
|
$
|
31,510
|
|
|
|
September 10, 2016
|
|
January 2, 2016
|
||||||||||||||||||||
(Thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Customer & supplier relationships
|
|
$
|
22,930
|
|
|
$
|
5,927
|
|
|
$
|
17,003
|
|
|
$
|
22,202
|
|
|
$
|
4,369
|
|
|
$
|
17,833
|
|
Software
|
|
4,573
|
|
|
3,557
|
|
|
1,016
|
|
|
4,455
|
|
|
3,382
|
|
|
1,073
|
|
||||||
Non-compete agreements
|
|
2,939
|
|
|
2,043
|
|
|
896
|
|
|
2,930
|
|
|
1,713
|
|
|
1,217
|
|
||||||
Patents, formulae, and licenses
|
|
1,769
|
|
|
556
|
|
|
1,213
|
|
|
1,769
|
|
|
510
|
|
|
1,259
|
|
||||||
Other
|
|
1,348
|
|
|
690
|
|
|
658
|
|
|
1,354
|
|
|
534
|
|
|
820
|
|
||||||
Total software and intangible assets
|
|
$
|
33,559
|
|
|
$
|
12,773
|
|
|
$
|
20,786
|
|
|
$
|
32,710
|
|
|
$
|
10,508
|
|
|
$
|
22,202
|
|
Third Quarter Ended,
|
|||||||||||||||||
September 10, 2016
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
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 expense - net
|
|
|
|
|
|
1,439
|
|
1,439
|
|
||||||||
Operating income
|
|
|
|
|
|
|
|
3,816
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
463
|
|
463
|
|
||||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
3,353
|
|
Third Quarter Ended,
|
|||||||||||||||||
September 12, 2015
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
4,923
|
|
|
$
|
27,965
|
|
|
$
|
—
|
|
|
$
|
32,888
|
|
|
Service revenues
|
|
47,199
|
|
|
2,598
|
|
|
—
|
|
|
49,797
|
|
||||
Total revenues
|
|
$
|
52,122
|
|
|
$
|
30,563
|
|
|
$
|
—
|
|
|
$
|
82,685
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
35,532
|
|
|
27,967
|
|
|
—
|
|
|
63,499
|
|
||||
|
Operating depreciation and amortization
|
|
1,647
|
|
|
1,949
|
|
|
—
|
|
|
3,596
|
|
||||
Profit before corporate selling, general, and administrative expenses
|
|
$
|
14,943
|
|
|
$
|
647
|
|
|
$
|
—
|
|
|
$
|
15,590
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
9,872
|
|
|
9,872
|
|
|||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
823
|
|
823
|
|
||||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
10,695
|
|
|
$
|
10,695
|
|
|||||
Other expense - net
|
|
|
|
|
|
99
|
|
|
99
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
4,796
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
404
|
|
|
404
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
4,392
|
|
First Three Quarters Ended,
|
|||||||||||||||||
September 10, 2016
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
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
|
|
First Three Quarters Ended,
|
|||||||||||||||||
September 12, 2015
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental Services |
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
15,634
|
|
|
$
|
83,875
|
|
|
$
|
—
|
|
|
$
|
99,509
|
|
|
Service revenues
|
|
142,344
|
|
|
7,810
|
|
|
—
|
|
|
150,154
|
|
||||
Total revenues
|
|
$
|
157,978
|
|
|
$
|
91,685
|
|
|
$
|
—
|
|
|
$
|
249,663
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
109,836
|
|
|
87,740
|
|
|
—
|
|
|
197,576
|
|
||||
|
Operating depreciation and amortization
|
|
5,045
|
|
|
5,653
|
|
|
—
|
|
|
10,698
|
|
||||
Profit (loss) before corporate selling, general, and administrative expenses
|
|
$
|
43,097
|
|
|
$
|
(1,708
|
)
|
|
$
|
—
|
|
|
$
|
41,389
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
31,553
|
|
|
31,553
|
|
|||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
2,352
|
|
|
2,352
|
|
|||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
33,905
|
|
|
$
|
33,905
|
|
|||||
Other (income) - net
|
|
|
|
|
|
(153)
|
|
|
(153)
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
7,637
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
1,366
|
|
|
1,366
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
6,271
|
|
(Thousands)
|
|
September 10, 2016
|
|
January 2, 2016
|
||||||
Total Assets:
|
|
|
|
|
||||||
|
Environmental Services
|
|
$
|
130,384
|
|
|
$
|
133,718
|
|
|
|
Oil Business
|
|
137,377
|
|
|
132,556
|
|
|||
|
Unallocated Corporate Assets
|
|
43,635
|
|
|
35,574
|
|
|||
|
|
Total
|
|
$
|
311,396
|
|
|
$
|
301,848
|
|
Outstanding 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)
|
|||||
Options outstanding at January 2, 2016
|
534,428
|
|
|
$
|
10.97
|
|
|
2.34
|
|
$
|
224
|
|
Exercised
|
(2,202
|
)
|
|
12.35
|
|
|
|
|
|
|||
Options outstanding at September 10, 2016
|
532,226
|
|
|
$
|
10.98
|
|
|
1.64
|
|
$
|
942
|
|
Restricted Stock (Nonvested Shares)
|
|
Number of Shares
|
|
Weighted Average Grant-Date Fair Value Per Share
|
|||
Nonvested shares outstanding at January 2, 2016
|
|
91,529
|
|
|
$
|
14.47
|
|
Granted
|
|
71,882
|
|
|
9.92
|
|
|
Vested
|
|
(25,882
|
)
|
|
12.59
|
|
|
Nonvested shares outstanding at September 10, 2016
|
|
137,529
|
|
|
$
|
12.44
|
|
|
|
Third Quarter Ended,
|
|
First Three Quarters Ended,
|
||||||||||||
(Thousands)
|
|
September 10, 2016
|
|
September 12, 2015
|
|
September 10, 2016
|
|
September 12, 2015
|
||||||||
Net income
|
|
$
|
2,411
|
|
|
$
|
2,755
|
|
|
$
|
2,516
|
|
|
$
|
3,853
|
|
Less: Income attributable to noncontrolling interest
|
|
76
|
|
|
46
|
|
|
117
|
|
|
115
|
|
||||
Net income attributable to Heritage-Crystal Clean, Inc. available to common stockholders
|
|
$
|
2,335
|
|
|
$
|
2,709
|
|
|
$
|
2,399
|
|
|
$
|
3,738
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic shares outstanding
|
|
22,267
|
|
|
22,153
|
|
|
22,246
|
|
|
22,136
|
|
||||
Dilutive shares from share–based compensation plans
|
|
283
|
|
|
285
|
|
|
171
|
|
|
269
|
|
||||
Weighted average diluted shares outstanding
|
|
22,550
|
|
|
22,438
|
|
|
22,417
|
|
|
22,405
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: basic
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
Net income per share: diluted
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
|
|
For the Third Quarter Ended,
|
|
For the First Three Quarters Ended,
|
||||||||
(Thousands)
|
|
September 10,
2016 |
|
September 12,
2015 |
|
September 10,
2016 |
|
September 12,
2015 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues
|
|
$27,182
|
33.2%
|
|
$32,888
|
39.8%
|
|
$75,582
|
31.4%
|
|
$99,509
|
39.9%
|
Service revenues
|
|
54,690
|
66.8%
|
|
49,797
|
60.2%
|
|
165,295
|
68.6%
|
|
150,154
|
60.1%
|
Total Revenues
|
|
$81,872
|
100.0%
|
|
$82,685
|
100.0%
|
|
$240,877
|
100.0%
|
|
$249,663
|
100.0%
|
Operating expenses -
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
|
|
$61,695
|
75.4%
|
|
$63,499
|
76.8%
|
|
$187,654
|
77.9%
|
|
$197,576
|
79.1%
|
Selling, general and administrative expenses
|
|
10,726
|
13.1%
|
|
9,872
|
11.9%
|
|
34,455
|
14.3%
|
|
31,553
|
12.6%
|
Depreciation and amortization
|
|
4,196
|
5.1%
|
|
4,419
|
5.3%
|
|
12,442
|
5.2%
|
|
13,050
|
5.2%
|
Other expense (income) - net
|
|
1,439
|
1.8%
|
|
99
|
0.1%
|
|
1,238
|
0.5%
|
|
(153)
|
(0.1)%
|
Operating income
|
|
3,816
|
4.7%
|
|
4,796
|
5.8%
|
|
5,088
|
2.1%
|
|
7,637
|
3.1%
|
Interest expense – net
|
|
463
|
0.6%
|
|
404
|
0.5%
|
|
1,432
|
0.6%
|
|
1,366
|
0.5%
|
Income before income taxes
|
|
3,353
|
4.1%
|
|
4,392
|
5.3%
|
|
3,656
|
1.5%
|
|
6,271
|
2.5%
|
Provision for income taxes
|
|
942
|
1.2%
|
|
1,637
|
2.0%
|
|
1,140
|
0.5%
|
|
2,418
|
1.0%
|
Net income
|
|
2,411
|
2.9%
|
|
2,755
|
3.3%
|
|
2,516
|
1.0%
|
|
3,853
|
1.5%
|
Income attributable to noncontrolling interest
|
|
76
|
0.1%
|
|
46
|
0.1%
|
|
117
|
—%
|
|
115
|
—%
|
Net income attributable to Heritage-Crystal Clean, Inc. common stockholders
|
|
$2,335
|
2.9%
|
|
$2,709
|
3.3%
|
|
$2,399
|
1.0%
|
|
$3,738
|
1.5%
|
|
|
|
|
For the Third Quarter Ended,
|
|
Change
|
|||||||||||
(Thousands)
|
|
|
|
|
|
|
|
|
|||||||||
|
September 10, 2016
|
|
September 12, 2015
|
|
$
|
|
%
|
||||||||||
|
|
|
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
51,282
|
|
|
$
|
52,122
|
|
|
$
|
(840
|
)
|
|
(1.6
|
)%
|
|
|
Oil Business
|
|
30,590
|
|
|
30,563
|
|
|
27
|
|
|
0.1
|
%
|
||||
|
|
Total
|
|
$
|
81,872
|
|
|
$
|
82,685
|
|
|
$
|
(813
|
)
|
|
(1.0
|
)%
|
|
|
|
|
For the First Three Quarters Ended,
|
|
Change
|
|||||||||||
(Thousands)
|
|
|
|
|
|
|
|
|
|||||||||
|
September 10, 2016
|
|
September 12, 2015
|
|
$
|
|
%
|
||||||||||
|
|
|
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
156,080
|
|
|
$
|
157,978
|
|
|
$
|
(1,898
|
)
|
|
(1.2
|
)%
|
|
|
Oil Business
|
|
84,797
|
|
|
91,685
|
|
|
(6,888
|
)
|
|
(7.5
|
)%
|
||||
|
|
Total
|
|
$
|
240,877
|
|
|
$
|
249,663
|
|
|
$
|
(8,786
|
)
|
|
(3.5
|
)%
|
|
|
|
|
For the First Three Quarters Ended,
|
|
Change
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
(Thousands)
|
|
September 10, 2016
|
|
September 12, 2015
|
|
$
|
|
%
|
|||||||||
|
|
|
|||||||||||||||
Profit (loss) before corporate SG&A*
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
44,022
|
|
|
$
|
43,097
|
|
|
$
|
925
|
|
|
2.1
|
%
|
|
|
Oil Business
|
|
(754
|
)
|
|
(1,708
|
)
|
|
954
|
|
|
55.9
|
%
|
||||
|
|
Total
|
|
$
|
43,268
|
|
|
$
|
41,389
|
|
|
$
|
1,879
|
|
|
4.5
|
%
|
•
|
An interest coverage ratio (based on interest expense and EBITDA) of at least 3.5 to 1.0;
|
•
|
A total leverage ratio no greater than 3.0 to 1.0; and
|
•
|
A capital expenditures covenant limiting certain capital expenditures to $15.0 million annually
|
|
|
For the First Three Quarters Ended,
|
||||||
(Thousands)
|
|
September 10,
2016 |
|
September 12,
2015 |
||||
Net cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
23,999
|
|
|
$
|
17,025
|
|
Investing activities
|
|
(14,690
|
)
|
|
(12,420
|
)
|
||
Financing activities
|
|
(3,150
|
)
|
|
(5,704
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
6,159
|
|
|
$
|
(1,099
|
)
|
•
|
Accounts Payable
— The increase in accounts payable favorably affected cash flows from operations by
$20.0 million
in the first three quarters of fiscal
2016
compared to the first three quarters of fiscal 2015. The increase in accounts payable in the first three quarters of fiscal 2016 was mainly driven by higher legal fees and amounts payable in conjunction with the settlement described in Part II, Item 1 "Legal Proceedings." In the first three quarters of fiscal 2015, accounts payable decreased significantly due to the lower unit cost of raw materials such as used oil and solvent.
|
•
|
Accrued expenses
— In the first three quarters of fiscal 2016, accrued expenses increased $4.9 million compared to the first three quarters of fiscal 2015 driven mainly by higher legal fee accruals year over year. In the first three quarters of fiscal 2015, accrued expenses decreased due to reductions in accrued severance and lower accrued wages and benefits.
|
•
|
Accounts Receivable
— The increase in accounts receivable had a negative impact on cash provided by operating activities of
$9.2 million
in the first three quarters of fiscal 2016 compared to the first three quarters of fiscal 2015 primarily due to a net increase in the selling price of oil products and used oil collection services during the first three quarters of fiscal 2016 compared to a net decrease in the selling price of oil products during the first three quarters of fiscal 2015.
|
•
|
Capital expenditures —
We used
$12.6 million
and
$12.5 million
for capital expenditures during the first three quarters of fiscal
2016
and fiscal 2015, respectively. During the first three quarters of fiscal 2016, we spent $6.3 million for capital improvements to the re-refinery, compared to $4.2 million on capital improvements at the re-refinery in the first three quarters of fiscal 2015. Additionally, in the first three quarters of fiscal
2016
, approximately $3.2 million of the capital expenditures were for purchases of parts cleaning machines compared to $3.8 million in the first three quarters of fiscal 2015. The remaining $3.1 million in the first three quarters of fiscal
2016
was for other items including leasehold improvements and intangible assets compared to approximately $4.4 million spent in the first three quarters of fiscal 2015.
|
•
|
Acquisitions
— In the first three quarters of fiscal 2016, we used $2.4 million for the purchase of the assets of Phoenix Environmental.
|
l
|
|
regulate the collection, sale, transportation, handling, processing, and disposal of the hazardous and non-hazardous wastes that we collect from our customers;
|
|
|
|
l
|
|
regulate the treatment and processing of waste material that we collect from our customers and the discharge of treated material;
|
|
|
|
l
|
|
impose liability on persons involved in generating, handling, processing, transporting, or disposing hazardous materials; and
|
|
|
|
l
|
|
impose joint and several liability for the remediation and clean-up of environmental contamination
|
Period
|
|
Total Number of Shares Purchased
(a)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
|
|||||
August 2016
|
|
543
|
|
|
$
|
13.01
|
|
|
—
|
|
|
—
|
|
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 Taxonomy 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:
|
October 20, 2016
|
By:
|
/s/ Mark DeVita
|
|
|
|
|
|
|
|
Mark DeVita
|
|
|
|
Chief Financial Officer
|
1 Year Hertiage Crystal Clean Chart |
1 Month Hertiage Crystal Clean Chart |
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