(Mark One)
|
||
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the fiscal year ended
|
December 31, 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.)
|
Title of Class
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
|
NASDAQ Global Select Market
|
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
l
|
Non-hazardous Program for Parts Cleaning. In our non-hazardous program for parts cleaning, we provide our customers with an alternative solvent that is not included in the EPA's definition of hazardous waste due to its increased flashpoint, and we educate each participating customer to prevent harmful contaminants from being added to the solvent during use. Because of the reduced solvent flammability, as long as the customer doesn't add toxic or flammable contaminants during use, neither the clean solvent that we supply nor the resulting used solvent generated by customers participating in our non-hazardous program for parts cleaning is classified as hazardous waste by the EPA and as a result can be managed as non-hazardous waste. After we collect the used solvent from customers participating in our non-hazardous program for parts cleaning, we recycle it via distillation for re-delivery to our parts cleaning customers, while at the same time minimizing the burdensome hazardous waste regulations faced by our customers. In order to most efficiently operate our non-hazardous program for parts cleaning, we have built a solvent recycling system at our Indianapolis hub capable of recycling up to 6 million gallons per year of used solvent generated by customers participating in our non-hazardous program.
|
|
|
l
|
Product Reuse Program for Parts Cleaning. Rather than managing used solvent as a waste, we have developed a program that uses the solvent as an ingredient in the manufacture of asphalt roofing materials. Used solvent generated by customers participating in our product reuse program for parts cleaning is sold as a direct substitute for virgin solvent that is otherwise used in the asphalt manufacturing process. Because the used solvent is destined for reuse, it is not deemed a waste, and therefore it is not subject to hazardous waste regulations. To enhance the marketing of these programs, in the past 20 years we and our predecessor Heritage Environmental Services have voluntarily obtained concurrence letters from more than 30 state environmental agencies to validate this approach.
|
Name
|
|
Age
|
|
Position
|
|||
|
|
||||||
Joseph Chalhoub
|
|
|
65
|
|
|
|
Founder, President, Chief Executive Officer, and Director
|
|
|
|
|
|
|
|
|
Gregory Ray
|
|
|
51
|
|
|
|
Chief Operating Officer and Secretary
|
|
|
|
|
|
|
|
|
John Lucks
|
|
|
58
|
|
|
|
Senior Vice President of Sales and Marketing
|
|
|
|
|
|
|
|
|
Tom Hillstrom
|
|
|
51
|
|
|
|
Vice President of Operations
|
|
|
|
|
|
|
|
|
Mark DeVita
|
|
|
43
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
Ellie Chaves
|
|
|
48
|
|
|
|
Chief Accounting Officer, Vice President Oil, Vice President of Sales,
|
l
|
|
Used Oil Feedstock - Operating at capacity depends on our ability to obtain the required volume from either Company customers or third party collectors.
|
|
|
|
l
|
|
Operation of the Re-refinery - Operating at capacity depends on the ability of our employees and management to run the re-refinery at design rates, safely and in compliance with all relevant regulations.
|
|
|
|
l
|
|
Logistics - Operating at capacity depends on our ability to efficiently transport used oil to our Indianapolis site, and transport base lube oil and related by-products out of our Indianapolis site; and
|
|
|
|
l
|
|
Base Lube Oil Demand - Operating at capacity depends on the demand for base lube oil in general and specifically the base lube oil produced at our Indianapolis site.
|
l
|
|
elimination of the reuse exception to the definition of hazardous waste;
|
|
|
|
l
|
|
increase in the minimum flashpoint threshold at which solvent becomes included in the definition of hazardous waste;
|
|
|
|
l
|
|
increased requirements to test the used solvent that we pick up from our customers for the presence of toxic or more flammable contaminants; and
|
|
|
|
l
|
|
adoption of regulations similar to those enacted in some California air quality districts that prohibit the use of the solvents of the type that we sell for parts cleaning operations.
|
|
|
|
l
|
|
regulate the collection, transportation, handling, processing, and disposal of the hazardous and non-hazardous wastes that we collect from our customers;
|
|
|
|
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
|
l
|
|
adversely impact our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;
|
|
|
|
l
|
|
require us to dedicate a substantial portion of our cash flow to the payment of interest or principal on our indebtedness;
|
|
|
|
l
|
|
subject us to the risk of increased sensitivity to interest rate increases based upon variable interest rates; and
|
|
|
|
l
|
|
increase the possibility of an event of default under the financial and operating covenants contained in our debt instruments.
|
|
|
|
l
|
|
the failure to successfully integrate the acquired businesses or facilities into our operations;
|
|
|
|
l
|
|
the inability to maintain key pre-acquisition business relationships;
|
|
|
|
l
|
|
loss of key personnel of the acquired business or facility;
|
|
|
|
l
|
|
exposure to unanticipated liabilities; and
|
|
|
|
l
|
|
the failure to realize efficiencies, synergies and cost savings.
|
l
|
|
cease selling products that use the challenged intellectual property;
|
|
|
|
l
|
|
obtain from the owner of the infringed intellectual property a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all; or
|
|
|
|
l
|
|
redesign those products that use infringing intellectual property.
|
|
|
|
l
|
|
variations in our operating results, including variations due to changes in the price of crude oil;
|
|
|
|
l
|
|
announcements by us, our competitors or others of significant business developments, changes in customer relationships, acquisitions or expansion plans;
|
|
|
|
l
|
|
analysts' earnings estimates, ratings and research reports;
|
|
|
|
l
|
|
the depth and liquidity of the market for our common stock;
|
|
|
|
l
|
|
speculation in the press;
|
|
|
|
l
|
|
strategic actions by us or our competitors, such as sales promotions or acquisitions;
|
|
|
|
l
|
|
actions by our large stockholders or by institutional and other stockholders;
|
|
|
|
l
|
|
conditions in the industrial and hazardous waste services industry as a whole and in the geographic markets served by our branches; and
|
|
|
|
l
|
|
domestic and international economic factors unrelated to our performance.
|
2010
|
|
High
|
|
Low
|
|
||||
First Quarter
|
|
$
|
12.39
|
|
|
$
|
8.19
|
|
|
Second Quarter
|
|
$
|
12.05
|
|
|
$
|
7.51
|
|
|
Third Quarter
|
|
$
|
9.95
|
|
|
$
|
7.51
|
|
|
Fourth Quarter
|
|
$
|
10.95
|
|
|
$
|
9.27
|
|
|
|
|
|
|
|
|
||||
2011
|
|
High
|
|
Low
|
|
||||
First Quarter
|
|
$
|
13.00
|
|
|
$
|
9.87
|
|
|
Second Quarter
|
|
$
|
19.08
|
|
|
$
|
12.95
|
|
|
Third Quarter
|
|
$
|
22.56
|
|
|
$
|
15.04
|
|
|
Fourth Quarter
|
|
$
|
20.00
|
|
|
$
|
13.30
|
|
|
|
|
3/12/2008
|
|
1/3/2009
|
|
1/2/2010
|
|
1/1/2011
|
|
12/31/2011
|
Heritage-Crystal Clean, Inc.
|
|
100.00
|
|
100.87
|
|
90.96
|
|
87.48
|
|
144.00
|
NASDAQ Composite Index
|
|
100.00
|
|
72.74
|
|
101.13
|
|
118.23
|
|
116.10
|
NASDAQ Industrial Index
|
|
100.00
|
|
65.93
|
|
92.55
|
|
115.66
|
|
114.83
|
|
|
|
Fiscal Year
|
|
||||||||||||||||||
|
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
||||||||||
|
|
|
(Dollars in thousands, except per share data)
|
|
||||||||||||||||||
STATEMENT OF OPERATIONS DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sales
|
|
$
|
152,858
|
|
|
$
|
112,118
|
|
|
$
|
98,398
|
|
|
$
|
108,143
|
|
|
$
|
89,734
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Operating Costs
|
|
124,000
|
|
|
83,773
|
|
|
74,371
|
|
|
79,809
|
|
|
64,080
|
|
|
|||||
|
Cost of sales - inventory impairment
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,778
|
|
|
2,182
|
|
|
|||||
|
Selling, general, and administrative expenses
|
|
20,715
|
|
|
18,035
|
|
|
16,438
|
|
|
19,691
|
|
|
15,123
|
|
|
|||||
|
Depreciation and amortization
|
|
5,657
|
|
|
4,629
|
|
|
4,308
|
|
|
3,630
|
|
|
2,873
|
|
|
|||||
|
Loss (gain) on disposal of fixed assets - net
|
|
(10
|
)
|
|
39
|
|
|
159
|
|
|
17
|
|
|
—
|
|
|
|||||
|
Proceeds from contract termination
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|
|||||
Operating income
|
|
2,496
|
|
|
5,642
|
|
|
3,122
|
|
|
2,218
|
|
|
8,476
|
|
|
||||||
Interest expense
|
|
37
|
|
|
—
|
|
|
3
|
|
|
408
|
|
|
1,408
|
|
|
||||||
Income before income taxes
|
|
2,459
|
|
|
5,642
|
|
|
3,119
|
|
|
1,810
|
|
|
7,068
|
|
|
||||||
Provision for income taxes
(2)
|
|
985
|
|
|
2,371
|
|
|
1,326
|
|
|
2,618
|
|
|
—
|
|
|
||||||
Net income (loss)
|
|
1,474
|
|
|
3,271
|
|
|
1,793
|
|
|
(808
|
)
|
|
7,068
|
|
|
||||||
Preferred return
|
|
—
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
1,691
|
|
|
||||||
Net income (loss) available to common stockholders
|
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
$
|
1,793
|
|
|
$
|
(1,147
|
)
|
|
$
|
5,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) per share available to common stockholders: basic
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.75
|
|
|
|
Net income (loss) per share available to common stockholders: diluted
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
—
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Number of weighted average common shares outstanding
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
14,313
|
|
|
12,645
|
|
|
10,700
|
|
|
9,985
|
|
|
7,178
|
|
|
||||||
Diluted
|
|
14,710
|
|
|
12,704
|
|
|
10,772
|
|
|
9,985
|
|
|
7,229
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
PRO FORMA DATA (UNAUDITED):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
$
|
1,793
|
|
|
$
|
(808
|
)
|
|
$
|
7,068
|
|
|
|
Pro forma provision for income taxes
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
497
|
|
|
2,898
|
|
|
||||||
Return on preferred and mandatorily redeemable capital units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|
1,730
|
|
|
||||||
Pro forma net income (loss) available to common stockholders
|
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
$
|
1,793
|
|
|
$
|
(1,677
|
)
|
|
$
|
2,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pro forma net income (loss) per share: basic
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.34
|
|
|
|
Pro forma net income (loss) per share: diluted
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER OPERATING DATA (UNAUDITED):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average sales per working day - Environmental Services
|
|
470
|
|
|
410
|
|
|
370
|
|
|
400
|
|
|
340
|
|
|
||||||
Number of branches at end of fiscal year
|
|
67
|
|
|
62
|
|
|
58
|
|
|
54
|
|
|
48
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At Fiscal Year End
|
|
||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
||||||||||
|
|
(Dollars in thousands)
|
|
||||||||||||||||||
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
2,186
|
|
|
$
|
21,757
|
|
|
$
|
1,090
|
|
|
$
|
327
|
|
|
$
|
479
|
|
|
Total assets
|
|
152,416
|
|
|
89,572
|
|
|
53,987
|
|
|
52,016
|
|
|
47,984
|
|
|
|||||
Total debt
|
|
21,891
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
22,045
|
|
|
|||||
Redeemable capital units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,261
|
|
|
|||||
Total stockholders' equity/members' capital
|
|
78,553
|
|
|
73,544
|
|
|
43,925
|
|
|
41,556
|
|
|
12,708
|
|
|
(1)
|
In fiscal 2008, we incurred a $2.8 million non-cash inventory impairment charge related to valuing our reuse solvent inventory which is held for sale to market value. This charge was due to a sharp decline in crude oil prices which resulted in the market value for our reuse solvent declining below historic (FIFO) values. In fiscal 2007, we received $3.0 million from the termination of a contract with a customer for our used solvent who had failed to meet its volume purchase obligations. We recorded an impairment charge of $2.2 million in fiscal 2007 to reduce solvent inventories to net realizable value in connection with this settlement.
|
|
|
(2)
|
On March 11, 2008, the date of our initial public offering, we reorganized our corporate legal structure from a limited liability company to a “C” Corporation. As a limited liability company, we were not subject to federal or state corporate income taxes. Therefore, net income does not give effect to taxes. For comparison purposes, we have presented pro forma net income, which reflects income taxes assuming we had been a corporation since the time of our formation and assuming tax rates equal to the rates that would have been in effect had we been required to report tax expense in such years.
|
|
|
(3)
|
In fiscal year 2007, the weighted average shares outstanding information reflects the 500-for-1 exchange of common units for common stock and the issuance of 1,217,390 shares of common stock in our reorganization that occurred immediately prior to our initial public offering in March 2008. We have included the redeemable common capital units outstanding prior to the reorganization in the calculation of basic and diluted earnings per share as the effect of excluding them would be anti-dilutive. In accordance with FASB guidance, the shares of common stock that were mandatorily redeemable are excluded from the calculation of basic and diluted earnings per share. We have deducted earnings attributable to mandatorily redeemable units from income available to common unit holders.
|
|
Fiscal 2011 versus Fiscal 2010
|
||||||||||
|
Fiscal Year ended
|
|
Fiscal Year ended
|
||||||||
|
December 31,
2011 |
|
January 1,
2011 |
||||||||
|
|
|
|
|
|
||||||
Sales
|
$
|
152,858
|
|
100.0
|
%
|
|
$
|
112,118
|
|
100.0
|
%
|
Operating expenses -
|
|
|
|
|
|
||||||
Operating costs
|
124,000
|
|
81.1
|
%
|
|
83,773
|
|
74.7
|
%
|
||
Selling, general and administrative expenses
|
20,715
|
|
13.6
|
%
|
|
18,035
|
|
16.1
|
%
|
||
Depreciation and amortization
|
5,657
|
|
3.7
|
%
|
|
4,629
|
|
4.1
|
%
|
||
Loss (gain) on disposal of fixed assets - net
|
(10
|
)
|
—
|
%
|
|
39
|
|
—
|
%
|
||
Operating income
|
2,496
|
|
1.6
|
%
|
|
5,642
|
|
5.0
|
%
|
||
Interest expense – net
|
37
|
|
—
|
%
|
|
—
|
|
—
|
%
|
||
Income before income taxes
|
2,459
|
|
1.6
|
%
|
|
5,642
|
|
5.0
|
%
|
||
Provision for income taxes
|
985
|
|
0.6
|
%
|
|
2,371
|
|
2.1
|
%
|
||
Net income
|
$
|
1,474
|
|
1.0
|
%
|
|
$
|
3,271
|
|
2.9
|
%
|
|
|
|
Fiscal 2011 versus Fiscal 2010
|
|
Increase
|
|||||||||||
|
|
|
Fiscal Year ended
|
|
Fiscal Year ended
|
|
|
|
|
|||||||
|
|
|
December 31, 2011
|
|
January 1, 2011
|
|
$
|
|
%
|
|||||||
Sales:
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
$
|
119,512
|
|
|
$
|
104,220
|
|
|
$
|
15,292
|
|
|
14.7
|
%
|
|
|
Oil Business
|
33,346
|
|
|
7,898
|
|
|
25,448
|
|
|
322.2
|
%
|
||||
|
|
Total
|
$
|
152,858
|
|
|
$
|
112,118
|
|
|
$
|
40,740
|
|
|
36.3
|
%
|
|
|
|
Fiscal 2011 versus Fiscal 2010
|
|
Increase (Decrease)
|
|||||||||||
|
|
|
Fiscal Year ended
|
|
Fiscal Year ended
|
|
|
|
|
|||||||
|
|
|
December 31, 2011
|
|
January 1, 2011
|
|
$
|
|
%
|
|||||||
Profit (loss) before corporate SG&A*
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
$
|
24,543
|
|
|
$
|
26,288
|
|
|
$
|
(1,745
|
)
|
|
(6.6
|
)%
|
|
|
Oil Business
|
(708
|
)
|
|
(1,929
|
)
|
|
1,221
|
|
|
63.3
|
%
|
||||
|
|
Total
|
$
|
23,835
|
|
|
$
|
24,359
|
|
|
$
|
(524
|
)
|
|
(2.2
|
)%
|
|
Fiscal 2010 versus Fiscal 2009
|
||||||||||
|
Fiscal Year ended
|
|
Fiscal Year ended
|
||||||||
|
January 1,
2011 |
|
January 2,
2010 |
||||||||
|
|
|
|
|
|
||||||
Sales
|
$
|
112,118
|
|
100.0
|
%
|
|
$
|
98,398
|
|
100.0
|
%
|
Operating expenses -
|
|
|
|
|
|
|
|
||||
Operating costs
|
83,773
|
|
74.7
|
%
|
|
74,371
|
|
75.6
|
%
|
||
Selling, general and administrative expenses
|
18,035
|
|
16.1
|
%
|
|
16,438
|
|
16.7
|
%
|
||
Depreciation and amortization
|
4,629
|
|
4.1
|
%
|
|
4,308
|
|
4.4
|
%
|
||
Loss on disposal of fixed assets - net
|
39
|
|
—
|
%
|
|
159
|
|
0.2
|
%
|
||
Operating income
|
5,642
|
|
5.0
|
%
|
|
3,122
|
|
3.2
|
%
|
||
Interest expense – net
|
—
|
|
—
|
%
|
|
3
|
|
—
|
%
|
||
Income before income taxes
|
5,642
|
|
5.0
|
%
|
|
3,119
|
|
3.2
|
%
|
||
Provision for income taxes
|
2,371
|
|
2.1
|
%
|
|
1,326
|
|
1.3
|
%
|
||
Net income
|
$
|
3,271
|
|
2.9
|
%
|
|
$
|
1,793
|
|
1.8
|
%
|
|
|
|
Fiscal 2010 versus Fiscal 2009
|
|
Increase
|
|||||||||||
|
|
|
Fiscal Year ended
|
|
Fiscal Year ended
|
|
|
|
|
|||||||
|
|
|
January 1, 2011
|
|
January 2, 2010
|
|
$
|
|
%
|
|||||||
Sales:
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
$
|
104,220
|
|
|
$
|
93,039
|
|
|
$
|
11,181
|
|
|
12.0
|
%
|
|
|
Oil Business
|
7,898
|
|
|
5,359
|
|
|
2,539
|
|
|
47.4
|
%
|
||||
|
|
Total
|
$
|
112,118
|
|
|
$
|
98,398
|
|
|
$
|
13,720
|
|
|
13.9
|
%
|
|
For the Fiscal Years Ended, (Dollars in thousands)
|
|||||||||
|
December 31,
2011 |
|
January 1,
2011 |
|
January 2, 2010
|
|||||
Net cash provided by (used in):
|
|
|
|
|
|
|||||
Operating activities
|
$
|
4,903
|
|
|
$
|
7,900
|
|
|
10,263
|
|
Investing activities
|
(45,615
|
)
|
|
(12,968
|
)
|
|
(9,683
|
)
|
||
Financing activities
|
21,141
|
|
|
25,735
|
|
|
183
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(19,571
|
)
|
|
$
|
20,667
|
|
|
763
|
|
•
|
Inventory
— The increase in inventory negatively affected cash flows from operations by
$7.5 million
in fiscal
2011
compared to fiscal 2010. The change reflects an increase in inventory pricing, driven by an increase in crude oil prices. In addition, we increased the volume of our used oil inventory on hand at year end in order to have available feedstock for the used oil re-refinery to produce lube oil in early 2012.
|
•
|
Accounts Payable
—
The increase in accounts payable positively affected cash flows from operations by
$4.0 million
in fiscal 2011. The increase in fiscal 2011 was the result of capital expenditures for the used oil re-refinery, increased used oil collection efforts and the related payables to used oil providers, and increased payables related to operating expenses for the front portion of the used oil re-refinery. In addition, the Company's operational costs and related payables increased as a result of growth in the Environmental Services segment.
|
•
|
Earnings decline
— Our net income for fiscal
2011
negatively impacted our net cash provided by operating activities by
$1.8 million
compared to fiscal 2010.
|
•
|
Accounts Receivable
— The increase of accounts receivable negatively affected cash flows from operations by
$1.7 million
in fiscal
2011
compared to fiscal 2010. During fiscal
2011
, we experienced an improvement in sales compared to fiscal 2010. In the third and fourth quarters of 2011, we began selling intermediate products from the start-up of the used oil re-refinery. This acceleration of sales led to a higher accounts receivable balance at the end of
2011
.
|
•
|
Capital expenditures and software and intangible assets—
We used
$45.6 million
and
$13.0 million
for capital expenditures during fiscal
2011
and fiscal 2010, respectively. During fiscal
2011
, we spent $36.9 million dollars on the used oil re-refining project compared to $7.9 million in fiscal
2010
. Additionally, in fiscal
2011
, approximately $4.6 million of the capital expenditures were for purchases of parts cleaning machines compared to $3.9 million in fiscal 2010. Also, in fiscal
2011
, we acquired the assets of the Warrior Group, net of cash for approximately
$0.9 million
and certain assets of Crystal Flash for $1.3 million. The remaining $1.9 million in fiscal
2011
was for other items including office equipment, leasehold improvements, software, and intangible assets compared to $1.2 million in fiscal 2010.
|
•
|
Proceeds from the issuance of common stock, net of offering costs —
During fiscal
2010
, we received approximately
$25.5 million
in net proceeds in conjunction with a secondary public offering of common stock.
|
•
|
Proceeds from note payable - bank —
During fiscal
2011
, we borrowed
$20 million
on our term loan. We did not have any borrowings in fiscal 2010.
|
•
|
Accounts Receivable -
The significant increase in accounts receivable negatively affected cash flows from operations by $3.9 million in fiscal 2010 compared to fiscal 2009. During fiscal 2010 we saw an increase of our accounts receivable primarily due to stronger sales.
|
•
|
Inventory -
The increase in inventory negatively affected cash flows from operations by $2.6 million in fiscal 2010 compared to fiscal 2009. 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.
|
•
|
Accounts Payable -
The increase in accounts payable positively affected the comparison of our cash flows from operations by approximately $3.0 million in fiscal 2010 compared to fiscal 2009. This was primarily due to the increase in used oil re-refinery construction costs in accounts payable.
|
•
|
Earnings
improvements
- Our net income in fiscal 2010 positively impacted our net cash provided by operating activities by $1.5 million compared to fiscal 2009.
|
•
|
We used $13.0 million in fiscal 2010 for capital expenditures, compared with $9.7 million in fiscal 2009. The
|
•
|
Proceeds from issuance of common stock, net of offering costs
- During 2010, we received approximately
$25.5 million
in net proceeds from a secondary public offering of common stock
.
We used these proceeds to fund a portion of the construction costs for the used oil re-refinery in Indianapolis, Indiana.
|
Contractual Obligations
|
|
Total
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
||||||
Operating lease obligations
(1)
|
|
39,935
|
|
10,608
|
|
|
8,608
|
|
|
6,701
|
|
|
5,255
|
|
|
3,598
|
|
|
5,165
|
|
Purchase obligations
(2)
|
|
12,174
|
|
12,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(1)
|
We lease office space, equipment and vehicles under noncancelable operating lease agreements which expire through 2018.
|
|
|
(2)
|
Our purchase obligations are open purchase orders as of December 31, 2011, and are primarily for used oil, solvent, and machine purchases. While our purchase obligations are generally cancelable without penalty, certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract.
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,186
|
|
|
$
|
21,757
|
|
Accounts receivable - net
|
17,047
|
|
|
13,478
|
|
||
Income tax receivables - current
|
1,040
|
|
|
27
|
|
||
Inventory - net
|
21,260
|
|
|
11,647
|
|
||
Deferred income taxes
|
986
|
|
|
731
|
|
||
Other current assets
|
1,955
|
|
|
2,154
|
|
||
Total Current Assets
|
44,474
|
|
|
49,794
|
|
||
Property, plant and equipment - net
|
66,690
|
|
|
22,049
|
|
||
Equipment at customers - net
|
16,408
|
|
|
15,002
|
|
||
Goodwill
|
1,761
|
|
|
—
|
|
||
Software and intangible assets - net
|
4,469
|
|
|
2,727
|
|
||
Deferred income taxes - noncurrent
|
18,360
|
|
|
—
|
|
||
Income tax receivables - noncurrent
|
254
|
|
|
—
|
|
||
Total Assets
|
$
|
152,416
|
|
|
$
|
89,572
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
||
Accounts payable
|
21,266
|
|
|
10,058
|
|
||
Accrued salaries, wages, and benefits
|
2,930
|
|
|
2,242
|
|
||
Taxes payable
|
1,121
|
|
|
913
|
|
||
Current maturities of long-term debt
|
1,053
|
|
|
—
|
|
||
Other accrued expenses
|
2,562
|
|
|
1,139
|
|
||
Total Current Liabilities
|
28,932
|
|
|
14,352
|
|
||
Contingent Consideration, less current portion
|
1,027
|
|
|
—
|
|
||
Term Loan, less current maturities
|
19,500
|
|
|
—
|
|
||
Long-term debt, less current maturities
|
1,338
|
|
|
—
|
|
||
Deferred income taxes
|
23,066
|
|
|
1,676
|
|
||
Total Liabilities
|
73,863
|
|
|
16,028
|
|
||
|
|
|
|
||||
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
||
Common stock - 22,000,000 shares authorized at $0.01 par value, 14,448,331 and 14,220,321 shares issued and outstanding at December 31, 2011 and January 1, 2011, respectively
|
144
|
|
|
142
|
|
||
Additional paid-in capital
|
73,065
|
|
|
69,532
|
|
||
Retained earnings
|
5,344
|
|
|
3,870
|
|
||
Total Stockholders' Equity
|
78,553
|
|
|
73,544
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
152,416
|
|
|
$
|
89,572
|
|
|
|
|
For the Fiscal Years Ended,
|
||||||||||
|
|
|
December 31,
2011 |
|
January 1,
2011 |
|
January 2,
2010 |
||||||
|
|
|
|
|
|
|
|
||||||
Sales
|
|
|
$
|
152,858
|
|
|
$
|
112,118
|
|
|
$
|
98,398
|
|
Operating expenses -
|
|
|
|
|
|
|
|||||||
|
Operating costs
|
|
124,000
|
|
|
83,773
|
|
|
74,371
|
|
|||
|
Selling, general, and administrative expenses
|
|
20,715
|
|
|
18,035
|
|
|
16,438
|
|
|||
|
Depreciation and amortization
|
|
5,657
|
|
|
4,629
|
|
|
4,308
|
|
|||
|
Loss (gain) on disposal of fixed assets – net
|
|
(10
|
)
|
|
39
|
|
|
159
|
|
|||
Operating income
|
|
2,496
|
|
|
5,642
|
|
|
3,122
|
|
||||
Interest expense – net
|
|
37
|
|
|
—
|
|
|
3
|
|
||||
Income before income taxes
|
|
2,459
|
|
|
5,642
|
|
|
3,119
|
|
||||
Provision for income taxes
|
|
985
|
|
|
2,371
|
|
|
1,326
|
|
||||
Net income
|
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
$
|
1,793
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|||||||
Net income per share: basic
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
Net income per share: diluted
|
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|||||||
Number of weighted average shares outstanding: basic
|
|
14,313
|
|
|
12,645
|
|
|
10,700
|
|
||||
Number of weighted average shares outstanding: diluted
|
|
14,710
|
|
|
12,704
|
|
|
10,772
|
|
|
Shares
|
|
Par
Value
Common
|
|
Paid
–
in
Capital
|
|
Retained Earnings
|
|
Total
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, January 3, 2009
|
10,680,609
|
|
|
$
|
107
|
|
|
$
|
42,643
|
|
|
$
|
(1,194
|
)
|
|
$
|
41,556
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,793
|
|
|
1,793
|
|
||||
Issuance of common stock – ESPP
|
18,790
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
||||
Share–based compensation
|
9,072
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
373
|
|
||||
Balance, January 2, 2010
|
10,708,471
|
|
|
$
|
107
|
|
|
$
|
43,219
|
|
|
$
|
599
|
|
|
$
|
43,925
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,271
|
|
|
3,271
|
|
||||
Proceeds from issuance of common stock - net
|
3,450,000
|
|
|
35
|
|
|
25,488
|
|
|
—
|
|
|
25,523
|
|
||||
Issuance of common stock – ESPP
|
23,188
|
|
|
—
|
|
|
213
|
|
|
—
|
|
|
213
|
|
||||
Share–based compensation
|
38,662
|
|
|
—
|
|
|
612
|
|
|
—
|
|
|
612
|
|
||||
Balance, January 1, 2011
|
14,220,321
|
|
|
$
|
142
|
|
|
$
|
69,532
|
|
|
$
|
3,870
|
|
|
$
|
73,544
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,474
|
|
|
1,474
|
|
||||
Issuance of common stock – Warrior acquisition
|
64,516
|
|
|
1
|
|
|
799
|
|
|
—
|
|
|
800
|
|
||||
Issuance of common stock – ESPP
|
18,685
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
274
|
|
||||
Exercise of stock options
|
118,317
|
|
|
1
|
|
|
1,400
|
|
|
—
|
|
|
1,401
|
|
||||
Share–based compensation
|
26,492
|
|
|
—
|
|
|
1,060
|
|
|
—
|
|
|
1,060
|
|
||||
Balance, December 31, 2011
|
14,448,331
|
|
|
$
|
144
|
|
|
$
|
73,065
|
|
|
$
|
5,344
|
|
|
$
|
78,553
|
|
|
|
For the Fiscal Years Ended,
|
||||||||||
|
|
December 31,
2011 |
|
January 1,
2011 |
|
January 2, 2010
|
||||||
Cash flows from Operating Activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
1,793
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
5,657
|
|
|
4,629
|
|
|
4,308
|
|
|||
Bad debt provision
|
|
493
|
|
|
767
|
|
|
1,030
|
|
|||
Share-based compensation
|
|
1,060
|
|
|
612
|
|
|
373
|
|
|||
Deferred rent
|
|
45
|
|
|
37
|
|
|
85
|
|
|||
Non-cash interest expense
|
|
41
|
|
|
—
|
|
|
—
|
|
|||
Deferred taxes
|
|
2,775
|
|
|
804
|
|
|
939
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in accounts receivable
|
|
(3,984
|
)
|
|
(2,304
|
)
|
|
1,645
|
|
|||
Decrease (increase) in income tax receivables
|
|
(1,267
|
)
|
|
353
|
|
|
100
|
|
|||
Decrease (increase) in inventory
|
|
(9,327
|
)
|
|
(1,802
|
)
|
|
764
|
|
|||
Decrease (increase) in prepaid and other current assets
|
|
199
|
|
|
(184
|
)
|
|
317
|
|
|||
Increase (decrease) in accounts payable
|
|
5,999
|
|
|
2,002
|
|
|
(1,015
|
)
|
|||
Increase (decrease) in accrued expenses
|
|
1,738
|
|
|
(285
|
)
|
|
(76
|
)
|
|||
Cash provided by (used in) operating activities
|
|
4,903
|
|
|
7,900
|
|
|
10,263
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from Investing Activities:
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
(42,849
|
)
|
|
(12,736
|
)
|
|
(8,068
|
)
|
|||
Software and intangible asset expenditures
|
|
(514
|
)
|
|
(232
|
)
|
|
(1,615
|
)
|
|||
Business acquisitions, net of cash acquired
|
|
(2,252
|
)
|
|
—
|
|
|
—
|
|
|||
Cash used in investing activities
|
|
(45,615
|
)
|
|
(12,968
|
)
|
|
(9,683
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from Financing Activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from issuance of common stock
|
|
274
|
|
|
25,735
|
|
|
203
|
|
|||
Proceeds from the exercise of stock options
|
|
1,222
|
|
|
—
|
|
|
—
|
|
|||
Tax benefit from the exercise of stock options
|
|
179
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from term loan
|
|
20,000
|
|
|
—
|
|
|
3,800
|
|
|||
Repayments of note payable - affiliates
|
|
(534
|
)
|
|
—
|
|
|
(3,820
|
)
|
|||
Cash provided by financing activities
|
|
21,141
|
|
|
25,735
|
|
|
183
|
|
|||
|
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
(19,571
|
)
|
|
20,667
|
|
|
763
|
|
|||
Cash and cash equivalents, beginning of period
|
|
21,757
|
|
|
1,090
|
|
|
327
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
2,186
|
|
|
$
|
21,757
|
|
|
1,090
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
||||
Income taxes paid
|
|
310
|
|
|
1,835
|
|
|
303
|
|
|||
Cash paid for interest, net of capitalized interest of $223
|
|
—
|
|
—
|
|
—
|
|
|
3
|
|
||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
|
|
|
||||
Payables for construction in progress
|
|
8,602
|
|
|
3,394
|
|
|
78
|
|
|||
Business acquisitions, liabilities assumed
|
|
15
|
|
|
—
|
|
|
—
|
|
|||
Business acquisitions, notes issued
|
|
2,384
|
|
|
—
|
|
|
—
|
|
|||
Issuance of common stock – Warrior acquisition
|
|
800
|
|
|
—
|
|
|
—
|
|
|
|
Oil Business
|
|
Environmental Services
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Balance at January 1, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Warrior Acquisition
|
|
1,137
|
|
|
—
|
|
|
1,137
|
|
|||
Crystal Flash Acquisition
|
|
624
|
|
|
—
|
|
|
624
|
|
|||
Balance at December 31, 2011
|
|
$
|
1,761
|
|
|
$
|
—
|
|
|
$
|
1,761
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Trade
|
$
|
16,988
|
|
|
$
|
13,914
|
|
Less allowance for doubtful accounts
|
(698
|
)
|
|
(647
|
)
|
||
Trade - net
|
16,290
|
|
|
13,267
|
|
||
Trade - affiliates
|
197
|
|
|
102
|
|
||
Other
|
560
|
|
|
109
|
|
||
Total accounts receivable - net
|
$
|
17,047
|
|
|
$
|
13,478
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Balance at beginning of period
|
$
|
647
|
|
|
$
|
601
|
|
Provision for bad debts
|
493
|
|
|
767
|
|
||
Accounts written off, net of recoveries
|
(442
|
)
|
|
(721
|
)
|
||
Balance at end of period
|
$
|
698
|
|
|
$
|
647
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Oil
|
$
|
8,009
|
|
|
$
|
1,175
|
|
Solvents
|
7,906
|
|
|
5,622
|
|
||
Machines
|
2,658
|
|
|
2,502
|
|
||
Drums
|
1,440
|
|
|
1,350
|
|
||
Accessories
|
1,406
|
|
|
1,183
|
|
||
Total inventory
|
21,419
|
|
|
11,832
|
|
||
Less reserves
|
(159
|
)
|
|
(185
|
)
|
||
Total inventory - net
|
$
|
21,260
|
|
|
$
|
11,647
|
|
|
Fiscal Year 2011
|
|
Fiscal Year 2010
|
||||
|
|
|
|
||||
Balance at beginning of period
|
$
|
185
|
|
|
$
|
220
|
|
Amounts written off
|
(26
|
)
|
|
(35
|
)
|
||
Balance at end of period
|
$
|
159
|
|
|
$
|
185
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Prepaid and other current assets
|
$
|
1,955
|
|
|
$
|
1,798
|
|
Prepaid income taxes
|
—
|
|
|
356
|
|
||
Total other current assets
|
$
|
1,955
|
|
|
$
|
2,154
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Land
(a)
|
$
|
677
|
|
|
$
|
183
|
|
Buildings and storage tanks
(a) (b)
|
26,306
|
|
|
3,602
|
|
||
Leasehold improvements
(a)
|
1,755
|
|
|
600
|
|
||
Machinery, vehicles and equipment
(a)
|
21,293
|
|
|
12,553
|
|
||
Construction in progress
(b)
|
25,309
|
|
|
12,010
|
|
||
Total property, plant and equipment
|
75,340
|
|
|
28,948
|
|
||
Less accumulated depreciation
|
(8,650
|
)
|
|
(6,899
|
)
|
||
Property, plant and equipment - net
|
$
|
66,690
|
|
|
$
|
22,049
|
|
|
|
|
|
||||
|
December 31,
2011 |
|
January 1,
2011 |
||||
Equipment at customers
|
$
|
36,803
|
|
|
$
|
32,213
|
|
Less accumulated depreciation
|
(20,395
|
)
|
|
(17,211
|
)
|
||
Equipment at customers - net
|
$
|
16,408
|
|
|
$
|
15,002
|
|
|
Fiscal Year 2011
|
|
Fiscal Year 2010
|
||||||||||||||||||||
|
Gross
|
|
|
|
|
Net
|
|
Gross
|
|
|
|
|
Net
|
||||||||||
|
Carrying
|
|
Accumulated
|
|
Carrying
|
|
Carrying
|
|
Accumulated
|
|
Carrying
|
||||||||||||
|
Amount
|
|
Amortization
|
|
Amount
|
|
Amount
|
|
Amortization
|
|
Amount
|
||||||||||||
Software
|
$
|
3,575
|
|
|
$
|
2,369
|
|
|
$
|
1,206
|
|
|
$
|
3,345
|
|
|
$
|
2,071
|
|
|
$
|
1,274
|
|
Patents
|
|
1,048
|
|
|
|
194
|
|
|
|
854
|
|
|
|
1,007
|
|
|
|
109
|
|
|
|
898
|
|
Non-competes
(a)
|
|
777
|
|
|
|
379
|
|
|
|
398
|
|
|
|
455
|
|
|
|
269
|
|
|
|
186
|
|
Other
(a)
|
|
2,206
|
|
|
|
195
|
|
|
|
2,011
|
|
|
|
440
|
|
|
|
71
|
|
|
|
369
|
|
Total software and intangible assets
|
$
|
7,606
|
|
|
$
|
3,137
|
|
|
$
|
4,469
|
|
|
$
|
5,247
|
|
|
$
|
2,520
|
|
|
$
|
2,727
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Accounts payable
|
$
|
20,678
|
|
|
$
|
9,886
|
|
Accounts payable - affiliates
|
588
|
|
|
172
|
|
||
Total accounts payable
|
$
|
21,266
|
|
|
$
|
10,058
|
|
|
December 31,
2011 |
|
January 1,
2011 |
||||
Contingent Consideration - current portion
(a)
|
$
|
548
|
|
|
$
|
25
|
|
Workers compensation
|
576
|
|
|
381
|
|
||
Other
|
1,438
|
|
|
733
|
|
||
Total other accrued expenses
|
$
|
2,562
|
|
|
$
|
1,139
|
|
Fiscal Year:
|
|
Notes Payable
|
|
Term Loan
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
2012
|
|
$
|
553
|
|
|
$
|
500
|
|
|
$
|
1,053
|
|
2013
|
|
553
|
|
|
1,250
|
|
|
1,803
|
|
|||
2014
|
|
483
|
|
|
1,875
|
|
|
2,358
|
|
|||
2015
|
|
460
|
|
|
1,875
|
|
|
2,335
|
|
|||
2016
|
|
—
|
|
|
14,500
|
|
|
14,500
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total debt
|
|
2,049
|
|
|
20,000
|
|
|
22,049
|
|
|||
Less: Unamortized discount
|
|
(158
|
)
|
|
—
|
|
|
(158
|
)
|
|||
Net debt
|
|
$
|
1,891
|
|
|
$
|
20,000
|
|
|
$
|
21,891
|
|
|
|
Fiscal 2011
|
|
Fiscal 2010
|
|
Fiscal 2009
|
||||||||||||||||||
|
|
Sales
|
|
Expenses Paid
|
|
Sales
|
|
Expenses Paid
|
|
Sales
|
|
Expenses Paid
|
||||||||||||
Heritage Environmental Services
|
|
$
|
338
|
|
|
$
|
904
|
|
|
$
|
293
|
|
|
$
|
889
|
|
|
$
|
326
|
|
|
$
|
1,370
|
|
Other related parties
|
|
1,147
|
|
|
3,913
|
|
|
787
|
|
|
1,950
|
|
|
1,111
|
|
|
2,131
|
|
||||||
Total
|
|
$
|
1,485
|
|
|
$
|
4,817
|
|
|
$
|
1,080
|
|
|
$
|
2,839
|
|
|
$
|
1,437
|
|
|
$
|
3,501
|
|
For the Fiscal Year Ended,
|
|||||||||||||||||
December 31, 2011
|
|||||||||||||||||
|
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
119,512
|
|
|
$
|
33,346
|
|
|
$
|
—
|
|
|
$
|
152,858
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
90,751
|
|
|
33,249
|
|
|
—
|
|
|
124,000
|
|
||||
|
Operating depreciation and amortization
|
|
4,218
|
|
|
805
|
|
|
—
|
|
|
5,023
|
|
||||
Profit (loss) before corporate selling, general, and administrative expenses
|
|
24,543
|
|
|
(708
|
)
|
|
|
|
23,835
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
—
|
|
|
20,715
|
|
|
20,715
|
|
|||||
Depreciation and amortization from SG&A
|
|
—
|
|
|
—
|
|
|
634
|
|
|
634
|
|
|||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
21,350
|
|
|
21,350
|
|
|||||||
Loss (gain) from disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||||
Operating income
|
|
|
|
|
|
|
|
2,496
|
|
||||||||
Interest expense - net
|
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
2,459
|
|
||||||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
985
|
|
|
985
|
|
|||||
Net income
|
|
|
|
|
|
|
|
$
|
1,474
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||
For the Fiscal Year Ended,
|
|||||||||||||||||
January 1, 2011
|
|||||||||||||||||
|
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
104,220
|
|
|
$
|
7,898
|
|
|
$
|
—
|
|
|
$
|
112,118
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
73,987
|
|
|
9,786
|
|
|
—
|
|
|
83,773
|
|
||||
|
Operating depreciation and amortization
|
|
3,945
|
|
|
41
|
|
|
—
|
|
|
3,986
|
|
||||
Profit (loss) before corporate selling, general, and administrative expenses
|
|
26,288
|
|
|
(1,929
|
)
|
|
|
|
24,359
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
—
|
|
|
18,035
|
|
|
18,035
|
|
|||||
Depreciation and amortization from SG&A
|
|
—
|
|
|
—
|
|
|
643
|
|
|
643
|
|
|||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
18,678
|
|
|
18,678
|
|
|||||||
Loss from disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
5,642
|
|
||||||||
Interest expense - net
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Income before income taxes
|
|
|
|
|
|
|
|
5,642
|
|
||||||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
2,371
|
|
|
2,371
|
|
|||||
Net income
|
|
|
|
|
|
|
|
$
|
3,271
|
|
For the Fiscal Year Ended,
|
|||||||||||||||||
January 2, 2010
|
|||||||||||||||||
|
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
93,039
|
|
|
$
|
5,359
|
|
|
$
|
—
|
|
|
$
|
98,398
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
68,252
|
|
|
6,119
|
|
|
—
|
|
|
74,371
|
|
||||
|
Operating depreciation and amortization
|
|
3,579
|
|
|
30
|
|
|
—
|
|
|
3,609
|
|
||||
Profit (loss) before corporate selling, general, and administrative expenses
|
|
21,208
|
|
|
(790
|
)
|
|
|
|
20,418
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
—
|
|
|
16,438
|
|
|
16,438
|
|
|||||
Depreciation and amortization from SG&A
|
|
—
|
|
|
—
|
|
|
699
|
|
|
699
|
|
|||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
17,137
|
|
|
17,137
|
|
|||||||
Loss from disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
159
|
|
|
159
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
3,122
|
|
||||||||
Interest expense - net
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
3,119
|
|
||||||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
1,326
|
|
|
1,326
|
|
|||||
Net income
|
|
|
|
|
|
|
|
$
|
1,793
|
|
|
|
|
December 31, 2011
|
|
January 1, 2011
|
||||
Total Assets:
|
|
|
|
||||||
|
Environmental Services
|
$
|
32,208
|
|
|
$
|
26,498
|
|
|
|
Oil Business
|
67,008
|
|
|
13,261
|
|
|||
|
Unallocated Corporate Assets
|
53,200
|
|
|
49,813
|
|
|||
|
|
Total
|
$
|
152,416
|
|
|
$
|
89,572
|
|
|
|
For the Fiscal Years Ended,
|
||||||||||
|
|
December 31, 2011
|
|
January 1, 2011
|
|
January 2, 2010
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(1,643
|
)
|
|
$
|
1,140
|
|
|
$
|
190
|
|
State
|
|
(147
|
)
|
|
427
|
|
|
197
|
|
|||
Total current
|
|
$
|
(1,790
|
)
|
|
$
|
1,567
|
|
|
$
|
387
|
|
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
|
|||||
Federal
|
|
$
|
2,604
|
|
|
$
|
766
|
|
|
$
|
814
|
|
State
|
|
171
|
|
|
38
|
|
|
125
|
|
|||
Total deferred
|
|
$
|
2,775
|
|
|
$
|
804
|
|
|
$
|
939
|
|
|
|
|
|
|
|
|
|
|||||
Income tax provision
|
|
$
|
985
|
|
|
$
|
2,371
|
|
|
$
|
1,326
|
|
|
|
For the Fiscal Years Ended,
|
||||||
|
|
December 31, 2011
|
|
January 1, 2011
|
||||
Tax at statutory federal rate
|
|
$
|
836
|
|
|
$
|
1,918
|
|
State and local tax, net of federal benefit
|
|
186
|
|
|
320
|
|
||
Other
|
|
(37
|
)
|
|
133
|
|
||
Total income tax provision
|
|
$
|
985
|
|
|
$
|
2,371
|
|
|
|
As of,
|
||||||
|
|
December 31, 2011
|
|
January 1, 2011
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net Operating Loss Carryforward
|
|
$
|
15,196
|
|
|
$
|
—
|
|
Tax intangible assets
|
|
1,673
|
|
|
1,794
|
|
||
Allowances
|
|
576
|
|
|
423
|
|
||
Accrued other
|
|
481
|
|
|
381
|
|
||
Income tax credits
|
|
275
|
|
|
159
|
|
||
Stock compensation
|
|
1,461
|
|
|
1,287
|
|
||
Total deferred tax asset
|
|
$
|
19,662
|
|
|
$
|
4,044
|
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Prepaids
|
|
$
|
(316
|
)
|
|
$
|
(245
|
)
|
Depreciation and amortization
|
|
(23,066
|
)
|
|
(4,744
|
)
|
||
Total deferred tax liability
|
|
(23,382
|
)
|
|
(4,989
|
)
|
||
|
|
|
|
|
||||
Net deferred tax liability
|
|
(3,720
|
)
|
|
(945
|
)
|
||
|
|
|
|
|
||||
Current deferred tax asset
|
|
986
|
|
|
731
|
|
||
Noncurrent deferred tax asset
|
|
18,360
|
|
|
—
|
|
||
Noncurrent deferred tax liability
|
|
(23,066
|
)
|
|
(1,676
|
)
|
||
|
|
|
|
|
||||
Net deferred tax liability
|
|
$
|
(3,720
|
)
|
|
$
|
(945
|
)
|
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
|
(118,317
|
)
|
|
10.33
|
|
|
|
|
|
|
|
Options outstanding at December 31, 2011
|
771,337
|
|
|
10.83
|
|
|
6.38
|
|
|
4,421
|
|
|
|
|
|
|
|
|
|
||||
Nonvested stock options at December 31, 2011
|
78,805
|
|
|
7.33
|
|
|
7.23
|
|
|
727
|
|
Options vested and exercisable at December 31, 2011
|
692,532
|
|
|
11.23
|
|
|
6.28
|
|
|
3,694
|
|
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 December 31, 2011
|
78,805
|
|
|
3.24
|
|
|
$3.24 per option granted in March 2009
|
|
$3.90 per option granted in March 2008
|
||||
|
|
|
|
|
|
||
Expected volatility
|
41.6
|
%
|
|
|
33.2
|
%
|
|
Risk
-
free interest rate
|
2.4
|
%
|
|
|
2.8
|
%
|
|
Dividend yield
|
—
|
|
|
|
—
|
|
|
Expected life
|
6.25
|
|
years
|
|
5
|
|
years
|
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
|
|
Granted – October 2011
|
|
12,783
|
|
|
16.53
|
|
Vested
|
|
(15,492
|
)
|
|
9.68
|
|
Expired
|
|
—
|
|
|
—
|
|
Forfeited
|
|
—
|
|
|
—
|
|
Nonvested shares outstanding at December 31, 2011
|
|
114,038
|
|
|
12.82
|
|
•
|
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)
|
|
For the Fiscal Years Ended,
|
||||||||||
|
December 31, 2011
|
|
January 1, 2011
|
|
January 2, 2010
|
||||||
Net income
|
$
|
1,474
|
|
|
$
|
3,271
|
|
|
$
|
1,793
|
|
|
|
|
|
|
|
||||||
Number of shares outstanding at year end
|
14,448
|
|
|
14,220
|
|
|
10,708
|
|
|||
Effect of using weighted average shares outstanding
|
(135
|
)
|
|
(1,575
|
)
|
|
(8
|
)
|
|||
Weighted average basic shares outstanding
|
14,313
|
|
|
12,645
|
|
|
10,700
|
|
|||
Dilutive shares for share–based compensation plans
|
397
|
|
|
59
|
|
|
72
|
|
|||
Weighted average diluted shares outstanding
|
14,710
|
|
|
12,704
|
|
|
10,772
|
|
|||
|
|
|
|
|
|
||||||
Potentially issuable shares
|
903
|
|
|
939
|
|
|
962
|
|
|||
Number of anti–dilutive potentially issuable shares excluded from diluted shares outstanding
|
—
|
|
|
732
|
|
|
732
|
|
|||
|
|
|
|
|
|
||||||
Net income per share: basic
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
Net income per share: diluted
|
$
|
0.10
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
(1)
|
Reflects a sixteen week quarter.
|
|
|
(2)
|
During the third quarter of fiscal 2011, the Company identified an error in the ending inventory balance in the Company's Environmental Services segment for the second quarter of fiscal 2011 in which inventory was understated by $0.2 million. In accordance with ASC Topic 250, Accounting Changes and Error Corrections, the Company evaluated the materiality of the error from a qualitative and quantitative perspective and concluded that the error was not material to the inventory balance in the second quarter. Further, the Company evaluated the materiality of the error on the results of operations for the second and third quarters of fiscal 2011, as well as the expected results of operations for the full year and concluded that the error was not material to either quarter and was not anticipated to be material to the full year or the trend of financial results. The Company corrected the quarterly financial data from what was previously reported in the second and third quarter to reflect the correction of the error. As such, operating expenses from the second quarter decreased $0.2 million and after tax net income increased by $0.1 million from what was previously reported. Operating expenses from the third quarter increased $0.2 million, and net income decreased by $0.1 million from what was previously reported.
|
Equity Compensation Plan Information
|
|
|
|
||||
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
|
|
|
|
||||
|
(a)
|
(b)
|
(c)
|
||||
Equity compensation plans approved by security holders
|
692,532
|
|
$
|
11.23
|
|
857,159
|
|
|
|
|
|
||||
Equity compensation plans not approved by security holders
|
n/a
|
|
n/a
|
|
n/a
|
|
|
|
|
|
|
||||
Total
|
692,532
|
|
$
|
11.23
|
|
857,159
|
|
|
|
|
|
||||
|
|
|
|
Date:
|
February 29, 2012
|
By:
|
/s/ Joseph Chalhoub
|
|
|
|
|
|
|
|
Joseph Chalhoub
|
|
|
|
President, Chief Executive Officer, and Director
|
Signature
|
|
Title
|
|
|
|
/s/ Joseph Chalhoub
|
|
President, Chief Executive Officer and Director (Principal Executive Officer of the Registrant)
|
Joseph Chalhoub
|
|
|
/s/ Gregory Ray
|
|
Chief Operating Officer
|
Gregory Ray
|
|
|
/s/ Mark DeVita
|
|
Chief Financial Officer,
(Principal Financial Officer of the Registrant)
|
Mark DeVita
|
|
|
/s/ Ellie Chaves
|
|
Chief Accounting Officer of the Registrant
|
Ellie Chaves
|
|
|
/s/ Fred Fehsenfeld, Jr.
|
|
Director
|
Fred Fehsenfeld, Jr.
|
|
|
/s/ Donald Brinckman
|
|
Director
|
Donald Brinckman
|
|
|
/s/ Bruce Bruckmann
|
|
Director
|
Bruce Bruckmann
|
|
|
/s/ Carmine Falcone
|
|
Director
|
Carmine Falcone
|
|
|
/s/ Charles E. Schalliol
|
|
Director
|
Charles E. Schalliol
|
|
|
/s/ Robert W. Willmschen, Jr.
|
|
Director
|
Robert W. Willmschen, Jr.
|
|
|
Exhibit
|
|
|
||
Number
|
|
Exhibit
|
||
|
|
|
|
|
|
3
|
.1
|
|
Certificate of Incorporation of Heritage-Crystal Clean, Inc., amended***
|
|
3
|
.2
|
|
By-Laws of Heritage-Crystal Clean, Inc. (Incorporated herein by reference to Exhibit 3.2 of Amendment No. 6 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on February 25, 2008)
|
|
4
|
.1
|
|
Form of Specimen Common Stock Certificate of Heritage-Crystal Clean, Inc. (Incorporated herein by reference to Exhibit 4.1 of Amendment No. 7 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on March 7, 2008)
|
|
10
|
.1
|
|
Third Amended and Restated Credit Agreement dated as of December 14, 2009 by and between the Company and Bank of America, N.A. (Incorporated herein by reference to Exhibit 10.1 to Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q/A filed with the SEC on March 4, 2011.)
|
|
10
|
.2
|
|
First Amendment dated as of May 14, 2011 to the Third Amended and Restated Credit Agreement dated as of December 14, 2009 by and between the Company and Bank of America N.A. (Incorporated herein by reference to the Current Report on Form 8-K filed with the SEC on May 18, 2010.)
|
|
10
|
.3
|
|
Second Amendment dated as of June 1, 2011 to the Third Amended and Restated Credit Agreement dated as of December 14, 2009 by and between the Company and Bank of America N.A. (Incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on July 30, 2010)
|
|
10
|
.4
|
|
Third Amendment dated as of March 5, 2011 to the Third Amended and Restated Credit Agreement dated as of December 14, 2009 by and between the Company and Bank of America N.A. (Incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed with the SEC on March 21, 2011).
|
|
10
|
.5
|
|
Promissory Note dated February 23, 2011 made by Heritage-Crystal Clean, LLC and payable to C&J Recovery, LLC (Incorporated herein by reference to Exhibit 10-.1 to the Company's Current Report on Form 8-K filed with the SEC on March 1, 2011)
|
|
10
|
.6
|
|
Promissory Note dated February 23, 2011 made by Heritage-Crystal Clean, LLC and payable to JBS Oil, Inc. (Incorporated herein by reference to Exhibit 10-.1 to the Company's Current Report on Form 8-K filed with the SEC on March 1, 2011)
|
|
10
|
.7
|
|
Promissory Note dated February 23, 2011 made by Heritage-Crystal Clean, LLC and payable to Warrior Oil Service, Inc. (Incorporated herein by reference to Exhibit 10-.1 to the Company's Current Report on Form 8-K filed with the SEC on March 1, 2011)
|
*
|
10
|
.8
|
|
Employment Agreement, dated as of August 24, 1999 by and between Heritage-Crystal Clean, LLC and Joseph Chalhoub, as amended March 1, 2000 (Incorporated herein by reference to Exhibit 10.8 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
|
|
10
|
.9
|
|
Form of Participation Rights Agreement between Heritage-Crystal Clean, Inc. and The Heritage Group (Incorporated herein by reference to Exhibit 10.9 of Amendment No. 7 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on March 7, 2008)
|
*
|
10
|
.10
|
|
Employment Agreement, dated as of March 1, 2000 by and between Heritage-Crystal Clean, LLC and John Lucks (Incorporated herein by reference to Exhibit 10.10 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
|
*
|
10
|
.11
|
|
Employment Agreement, dated as of November 15, 1999 by and between Heritage-Crystal Clean, LLC and Gregory Ray (Incorporated herein by reference to Exhibit 10.12 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
|
*
|
10
|
.12
|
|
Employment Agreement, dated as of July 14, 2002 by and between Heritage-Crystal Clean, LLC and Tom Hillstrom (Incorporated herein by reference to Exhibit 10.14 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
|
*
|
10
|
.13
|
|
Non-Competition and Non-Disclosure Agreement between Donald Brinckman and Heritage-Crystal Clean, LLC dated March 22, 2002 (Incorporated herein by reference to Exhibit 10.16 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
|
|
10
|
.14
|
|
Multi-Story Office Building Lease between Heritage-Crystal-Clean, LLC and RP 2 Limited Partnership dated November 28, 2005 (Incorporated herein by reference to Exhibit 10.17 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
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*
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10
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.15
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Heritage-Crystal Clean, LLC Key Employee Membership Interest Trust Agreement dated February 1, 2002, as amended (Incorporated herein by reference to Exhibit 10.18 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-1438640) filed with the SEC on August 3, 2007)
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(A)
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Common Stock
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(1)
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Voting Rights
. The holders of shares of Common Stock shall be entitled to one vote for each share so held with respect to all matters voted on by the stockholders of the Corporation, subject in all cases to the voting rights, if any, of any holders of Undesignated Preferred Stock.
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(2)
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Liquidation Rights
. Subject to the prior and superior right, if any, of any classes or series of the Undesignated Preferred Stock, upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the holders of Common Stock shall be entitled to receive that portion of the remaining funds to be distributed. Such funds shall be paid to the holders of Common Stock on the basis of the number of shares of Common Stock held by each of them.
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(3)
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Dividends
. Subject to the rights, if any, of any holders of Undesignated Preferred
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(4)
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Residual Rights
. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary herein (or in any amendment hereto) shall be vested in the Common Stock.
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(5)
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No Preemptive Rights
. Other than pursuant to the Participation Rights Agreement by and between the Corporation and The Heritage Group dated on or around March 12, 2008, as the same may be amended, supplemented or otherwise modified from time to time, no holder of Common Stock shall have any preemptive rights with respect to the Common Stock or any other securities of the Corporation, or to any obligations convertible (directly or indirectly) into securities of the Corporation whether now or hereafter authorized.
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(B)
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Preferred Stock
.
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Number of Option Shares
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Exercise Price Per Option Share
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127,264
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$11.50
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Date
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Vested % of Option Shares Awarded
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March 17, 2008
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100%
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1.
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I have reviewed this report on Form 10-K of Heritage-Crystal Clean, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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
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b.
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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.
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Date: February 29, 2012
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By:
/s/ Joseph Chalhoub
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Joseph Chalhoub
|
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President, CEO and Director — Principal Executive Officer
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1.
|
I have reviewed this report on Form 10-K of Heritage-Crystal Clean, Inc.;
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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
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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.
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Date: February 29, 2012
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By:
/s/ Mark DeVita
|
|
|
|
Mark DeVita
|
|
Chief Financial Officer
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Date: February 29, 2012
|
By:
/s/ Joseph Chalhoub
|
|
|
|
Joseph Chalhoub
|
|
President, CEO and Director — Principal Executive Officer
|
Date: February 29, 2012
|
By:
/s/ Mark DeVita
|
|
|
|
Mark DeVita
|
|
Chief Financial Officer
|