(Mark One)
|
||
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended
|
June 17, 2017
|
|
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.)
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
31
|
|
|
32
|
|
|
|
|
|
33
|
|
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
|
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
25,242
|
|
|
$
|
36,610
|
|
Accounts receivable - net
|
|
44,343
|
|
|
47,533
|
|
||
Inventory - net
|
|
18,862
|
|
|
18,558
|
|
||
Other current assets
|
|
6,448
|
|
|
6,094
|
|
||
Total Current Assets
|
|
94,895
|
|
|
108,795
|
|
||
Property, plant and equipment - net
|
|
129,540
|
|
|
131,175
|
|
||
Equipment at customers - net
|
|
23,117
|
|
|
23,033
|
|
||
Software and intangible assets - net
|
|
18,344
|
|
|
19,821
|
|
||
Goodwill
|
|
31,573
|
|
|
31,483
|
|
||
Total Assets
|
|
$
|
297,469
|
|
|
$
|
314,307
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|||
Current Liabilities:
|
|
|
|
|
|
|||
Accounts payable
|
|
$
|
28,861
|
|
|
$
|
30,984
|
|
Current maturities of long-term debt
|
|
—
|
|
|
6,936
|
|
||
Accrued salaries, wages, and benefits
|
|
5,177
|
|
|
6,312
|
|
||
Taxes payable
|
|
7,474
|
|
|
6,729
|
|
||
Other current liabilities
|
|
2,237
|
|
|
3,245
|
|
||
Total Current Liabilities
|
|
43,749
|
|
|
54,206
|
|
||
Long-term debt, less current maturities
|
|
28,582
|
|
|
56,518
|
|
||
Deferred income taxes
|
|
10,821
|
|
|
5,314
|
|
||
Total Liabilities
|
|
$
|
83,152
|
|
|
$
|
116,038
|
|
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|||
Common stock - 26,000,000 shares authorized at $0.01 par value, 22,604,189 and 22,300,007 shares issued and outstanding at June 17, 2017 and December 31, 2016, respectively
|
|
$
|
226
|
|
|
$
|
223
|
|
Additional paid-in capital
|
|
188,642
|
|
|
185,099
|
|
||
Retained earnings
|
|
24,934
|
|
|
12,227
|
|
||
Total Heritage-Crystal Clean, Inc. Stockholders' Equity
|
|
213,802
|
|
|
197,549
|
|
||
Noncontrolling interest
|
|
515
|
|
|
720
|
|
||
Total Equity
|
|
$
|
214,317
|
|
|
$
|
198,269
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
297,469
|
|
|
$
|
314,307
|
|
|
|
|
Second Quarter Ended,
|
|
First Half Ended,
|
||||||||||||
|
|
|
June 17,
2017 |
|
June 18,
2016 |
|
June 17,
2017 |
|
June 18,
2016 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
31,832
|
|
|
$
|
24,695
|
|
|
$
|
58,812
|
|
|
$
|
48,399
|
|
|
Service revenues
|
|
54,550
|
|
|
55,857
|
|
|
108,023
|
|
|
110,606
|
|
||||
Total revenues
|
|
$
|
86,382
|
|
|
$
|
80,552
|
|
|
$
|
166,835
|
|
|
$
|
159,005
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
$
|
63,270
|
|
|
$
|
61,711
|
|
|
$
|
124,560
|
|
|
$
|
125,959
|
|
|
Selling, general, and administrative expenses
|
|
10,575
|
|
|
11,521
|
|
|
22,916
|
|
|
23,729
|
|
||||
|
Depreciation and amortization
|
|
4,184
|
|
|
4,118
|
|
|
8,316
|
|
|
8,246
|
|
||||
|
Other (income) - net
|
|
(3,027
|
)
|
|
(142
|
)
|
|
(8,033
|
)
|
|
(201
|
)
|
||||
Operating income
|
|
11,380
|
|
|
3,344
|
|
|
19,076
|
|
|
1,272
|
|
|||||
Interest expense – net
|
|
412
|
|
|
451
|
|
|
499
|
|
|
969
|
|
|||||
Income before income taxes
|
|
10,968
|
|
|
2,893
|
|
|
18,577
|
|
|
303
|
|
|||||
Provision for income taxes
|
|
3,982
|
|
|
1,062
|
|
|
6,774
|
|
|
197
|
|
|||||
Net income
|
|
6,986
|
|
|
1,831
|
|
|
11,803
|
|
|
106
|
|
|||||
Income attributable to noncontrolling interest
|
|
52
|
|
|
—
|
|
|
105
|
|
|
42
|
|
|||||
Net income attributable to Heritage-Crystal Clean, Inc. common stockholders
|
|
$
|
6,934
|
|
|
$
|
1,831
|
|
|
$
|
11,698
|
|
|
$
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income per share: basic
|
|
$
|
0.31
|
|
|
$
|
0.08
|
|
|
$
|
0.52
|
|
|
$
|
—
|
|
|
Net income per share: diluted
|
|
$
|
0.30
|
|
|
$
|
0.08
|
|
|
$
|
0.51
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Number of weighted average shares outstanding: basic
|
|
22,506
|
|
|
22,246
|
|
|
22,430
|
|
|
22,236
|
|
|||||
Number of weighted average shares outstanding: diluted
|
|
22,832
|
|
|
22,419
|
|
|
22,729
|
|
|
22,392
|
|
|
Shares
|
|
Par
Value
Common
|
|
Additional Paid
–
in
Capital
|
|
Retained Earnings
|
|
Total Heritage-Crystal Clean, Inc. Stockholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2016
|
22,300,007
|
|
|
$
|
223
|
|
|
$
|
185,099
|
|
|
$
|
12,227
|
|
|
$
|
197,549
|
|
|
$
|
720
|
|
|
$
|
198,269
|
|
Adjustment adopting ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
1,009
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
11,698
|
|
|
11,698
|
|
|
105
|
|
|
11,803
|
|
||||||
Distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(310
|
)
|
|
(310
|
)
|
||||||
Issuance of common stock – ESPP
|
14,367
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
197
|
|
||||||
Exercise of stock options
|
216,253
|
|
|
2
|
|
|
2,355
|
|
|
—
|
|
|
2,357
|
|
|
—
|
|
|
2,357
|
|
||||||
Share-based compensation
|
73,562
|
|
|
1
|
|
|
991
|
|
|
—
|
|
|
992
|
|
|
—
|
|
|
992
|
|
||||||
Balance at June 17, 2017
|
22,604,189
|
|
|
$
|
226
|
|
|
$
|
188,642
|
|
|
$
|
24,934
|
|
|
$
|
213,802
|
|
|
$
|
515
|
|
|
$
|
214,317
|
|
|
|
For the First Half Ended,
|
||||||
|
|
June 17,
2017 |
|
June 18,
2016 |
||||
Cash flows from Operating Activities:
|
|
|
|
|
||||
Net income
|
|
$
|
11,803
|
|
|
$
|
106
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
8,316
|
|
|
8,246
|
|
||
Non-cash inventory impairment
|
|
—
|
|
|
1,651
|
|
||
Bad debt provision
|
|
(6
|
)
|
|
361
|
|
||
Share-based compensation
|
|
992
|
|
|
746
|
|
||
Deferred taxes
|
|
6,506
|
|
|
117
|
|
||
Amortization of deferred gain on lease conversion
|
|
—
|
|
|
(189
|
)
|
||
Other, net
|
|
991
|
|
|
324
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Decrease (increase) in accounts receivable
|
|
3,184
|
|
|
(1,895
|
)
|
||
(Increase) decrease in inventory
|
|
(304
|
)
|
|
1,598
|
|
||
(Increase) in other current assets
|
|
(356
|
)
|
|
(1,768
|
)
|
||
(Decrease) increase in accounts payable
|
|
(1,771
|
)
|
|
2,620
|
|
||
(Decrease) increase in accrued expenses
|
|
(1,443
|
)
|
|
2,474
|
|
||
Cash provided by operating activities
|
|
$
|
27,912
|
|
|
$
|
14,391
|
|
|
|
|
|
|
||||
Cash flows from Investing Activities:
|
|
|
|
|
|
|
||
Capital expenditures
|
|
$
|
(6,333
|
)
|
|
$
|
(8,671
|
)
|
Business acquisitions, net of cash acquired
|
|
—
|
|
|
(2,400
|
)
|
||
Proceeds from the sale of property, plant, and equipment
|
|
54
|
|
|
—
|
|
||
Cash used in investing activities
|
|
$
|
(6,279
|
)
|
|
$
|
(11,071
|
)
|
|
|
|
|
|
||||
Cash flows from Financing Activities:
|
|
|
|
|
|
|
||
Payments on Term loan
|
|
$
|
(64,195
|
)
|
|
$
|
(1,704
|
)
|
Proceeds from new Term Loan
|
|
30,000
|
|
|
—
|
|
||
Proceeds under revolving credit facility
|
|
4,000
|
|
|
—
|
|
||
Payments of revolving credit facility
|
|
(4,000
|
)
|
|
—
|
|
||
Proceeds from the exercise of stock options
|
|
2,357
|
|
|
—
|
|
||
Proceeds from the issuance of common stock
|
|
197
|
|
|
222
|
|
||
Payments of debt issuance costs
|
|
(1,050
|
)
|
|
—
|
|
||
Distributions to noncontrolling interest
|
|
(310
|
)
|
|
(121
|
)
|
||
Cash (used in) provided by financing activities
|
|
$
|
(33,001
|
)
|
|
$
|
(1,603
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
(11,368
|
)
|
|
1,717
|
|
||
Cash and cash equivalents, beginning of period
|
|
36,610
|
|
|
23,608
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
25,242
|
|
|
$
|
25,325
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||
Income taxes paid
|
|
$
|
208
|
|
|
$
|
242
|
|
Cash paid for interest
|
|
733
|
|
|
956
|
|
||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
|
||
Payables for construction in progress
|
|
$
|
514
|
|
|
$
|
284
|
|
Standard
|
|
Issuance Date
|
|
Description
|
|
Our Effective Date
|
|
Effect on the Financial Statements
|
ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” ASU 2014-15 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” ASU 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10 “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” and ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”
|
|
May 2014 and subsequent
|
|
These standards outline a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. The underlying principle 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 approach or a modified retrospective approach to adopt the guidance. Early adoption is permitted.
|
|
December 31, 2017
|
|
The Company is continuing to evaluate the effect that this accounting standard will have on our consolidated financial position and results of operations. To date, certain personnel have attended technical training concerning this new revenue recognition standard. The Company is working to identify each of the different types of contracts with customers and the various performance obligations associated with each type of contract. The Company is also assessing the changes that will be necessary to our information systems to enable us to capture the information necessary to recognize revenue in accordance with the new standard and comply with the additional disclosure requirements. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective approach), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective approach). The Company will adopt the standard in the first quarter of fiscal 2018 and currently anticipates applying the modified retrospective approach.
|
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.
|
2015-16 Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments (Topic 805)
|
|
September 2015
|
|
This update simplifies the accounting for measurement-period adjustments in a business combination by requiring the acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer is also required to record in the reporting period in which the adjustments are determined the effect on earnings of changes in depreciation, amortization, and other items resulting from the change to the provisional amounts.
|
|
January 3, 2016
|
|
The Company early adopted the amendments of this ASU No. 2015-16 in fiscal 2015 and it did not have an impact on our consolidated financial condition and results of operations.
|
(Thousands)
|
Phoenix Environmental
|
|
REC
|
||||
|
|
|
|
||||
Accounts receivable
|
$
|
260
|
|
|
$
|
80
|
|
Inventory
|
27
|
|
|
56
|
|
||
Property, plant, & equipment
|
398
|
|
|
457
|
|
||
Equipment at customers
|
38
|
|
|
—
|
|
||
Intangible assets
|
700
|
|
|
132
|
|
||
Goodwill
|
1,245
|
|
|
—
|
|
||
Total purchase price, net of cash acquired
|
$
|
2,668
|
|
|
$
|
725
|
|
(Thousands)
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
Trade
|
|
$
|
44,682
|
|
|
$
|
42,332
|
|
Less: allowance for doubtful accounts
|
|
1,843
|
|
|
2,176
|
|
||
Trade - net
|
|
42,839
|
|
|
40,156
|
|
||
Related parties
|
|
814
|
|
|
1,324
|
|
||
Other
|
|
690
|
|
|
6,053
|
|
||
Total accounts receivable - net
|
|
$
|
44,343
|
|
|
$
|
47,533
|
|
|
|
For the First Half Ended,
|
|
For the Fiscal Year Ended,
|
||||
(Thousands)
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
Balance at beginning of period
|
|
$
|
2,176
|
|
|
$
|
2,207
|
|
Provision for bad debts
|
|
(6
|
)
|
|
687
|
|
||
Accounts written off, net of recoveries
|
|
(327
|
)
|
|
(718
|
)
|
||
Balance at end of period
|
|
$
|
1,843
|
|
|
$
|
2,176
|
|
(Thousands)
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
Used oil and processed oil
|
|
$
|
5,815
|
|
|
$
|
5,493
|
|
Solvents and solutions
|
|
5,692
|
|
|
5,014
|
|
||
Drums and supplies
|
|
3,562
|
|
|
3,790
|
|
||
Machines
|
|
2,517
|
|
|
2,576
|
|
||
Other
|
|
1,639
|
|
|
1,899
|
|
||
Total inventory
|
|
19,225
|
|
|
18,772
|
|
||
Less: machine refurbishing reserve
|
|
363
|
|
|
214
|
|
||
Total inventory - net
|
|
$
|
18,862
|
|
|
$
|
18,558
|
|
(Thousands)
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
Machinery, vehicles, and equipment
|
|
$
|
79,018
|
|
|
$
|
78,592
|
|
Buildings and storage tanks
|
|
69,136
|
|
|
69,977
|
|
||
Land
|
|
10,366
|
|
|
10,363
|
|
||
Leasehold improvements
|
|
4,946
|
|
|
4,876
|
|
||
Construction in progress
|
|
11,914
|
|
|
8,646
|
|
||
Assets held for sale
|
|
61
|
|
|
177
|
|
||
Total property, plant and equipment
|
|
175,441
|
|
|
172,631
|
|
||
Less: accumulated depreciation
|
|
(45,901
|
)
|
|
(41,456
|
)
|
||
Property, plant and equipment - net
|
|
$
|
129,540
|
|
|
$
|
131,175
|
|
|
|
|
|
|
||||
(Thousands)
|
|
June 17,
2017 |
|
December 31,
2016 |
||||
Equipment at customers
|
|
$
|
65,663
|
|
|
$
|
63,502
|
|
Less: accumulated depreciation
|
|
(42,546
|
)
|
|
(40,469
|
)
|
||
Equipment at customers - net
|
|
$
|
23,117
|
|
|
$
|
23,033
|
|
(Thousands)
|
|
Oil Business
|
|
Environmental Services
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Goodwill at January 2, 2016
|
|
|
|
|
|
|
||||||
Gross carrying amount
|
|
$
|
3,952
|
|
|
$
|
30,325
|
|
|
$
|
34,277
|
|
Accumulated impairment loss
|
|
(3,952
|
)
|
|
—
|
|
|
(3,952
|
)
|
|||
Net book value at January 2, 2016
|
|
$
|
—
|
|
|
$
|
30,325
|
|
|
$
|
30,325
|
|
Acquisitions
|
|
—
|
|
|
1,158
|
|
|
1,158
|
|
|||
Goodwill at December 31, 2016
|
|
|
|
|
|
|
||||||
Gross carrying amount
|
|
3,952
|
|
|
31,483
|
|
|
35,435
|
|
|||
Accumulated impairment loss
|
|
(3,952
|
)
|
|
—
|
|
|
(3,952
|
)
|
|||
Net book value at December 31, 2016
|
|
$
|
—
|
|
|
$
|
31,483
|
|
|
$
|
31,483
|
|
Measurement period adjustments
|
|
—
|
|
|
90
|
|
|
—
|
|
|||
Goodwill at June 17, 2017
|
|
|
|
|
|
|
||||||
Gross carrying amount
|
|
3,952
|
|
|
31,573
|
|
|
35,525
|
|
|||
Accumulated impairment loss
|
|
(3,952
|
)
|
|
—
|
|
|
(3,952
|
)
|
|||
Net book value at June 17, 2017
|
|
$
|
—
|
|
|
$
|
31,573
|
|
|
$
|
31,573
|
|
|
|
June 17, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(Thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Customer & supplier relationships
|
|
$
|
23,050
|
|
|
$
|
7,763
|
|
|
$
|
15,287
|
|
|
$
|
23,045
|
|
|
$
|
6,682
|
|
|
$
|
16,363
|
|
Software
|
|
4,604
|
|
|
3,768
|
|
|
836
|
|
|
4,573
|
|
|
3,655
|
|
|
918
|
|
||||||
Non-compete agreements
|
|
2,937
|
|
|
2,381
|
|
|
556
|
|
|
2,934
|
|
|
2,180
|
|
|
754
|
|
||||||
Patents, formulae, and licenses
|
|
1,769
|
|
|
607
|
|
|
1,162
|
|
|
1,769
|
|
|
576
|
|
|
1,193
|
|
||||||
Other
|
|
1,348
|
|
|
845
|
|
|
503
|
|
|
1,348
|
|
|
755
|
|
|
593
|
|
||||||
Total software and intangible assets
|
|
$
|
33,708
|
|
|
$
|
15,364
|
|
|
$
|
18,344
|
|
|
$
|
33,669
|
|
|
$
|
13,848
|
|
|
$
|
19,821
|
|
•
|
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
, provided that in the event of a permitted acquisition having an aggregate consideration equal to
$10.0 million
or more, at the Borrower’s election, the foregoing
3.00
to
1.00
shall be deemed to be
3.25
to
1.00
for the fiscal quarter in which such permitted acquisition occurs and the three immediately following fiscal quarters and will thereafter revert to
3.00
to
1.00
; and
|
•
|
A capital expenditures covenant limiting capital expenditures to
$100.0 million
plus, if the capital expenditures permitted have been fully utilized, an additional amount for the remaining term of the Credit Agreement equal to
35%
of EBITDA for the thirteen “four-week” periods most recently ended immediately prior to the full utilization of such
$100.0 million
basket
|
(thousands)
|
|
June 17, 2017
|
|
December 31, 2016
|
||||
Principal amount
|
|
$
|
30,000
|
|
|
$
|
64,195
|
|
Less: unamortized debt issuance costs
|
|
1,418
|
|
|
741
|
|
||
Debt less unamortized debt issuance costs
|
|
$
|
28,582
|
|
|
$
|
63,454
|
|
Second Quarter Ended,
|
|||||||||||||||||
June 17, 2017
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
5,868
|
|
|
$
|
25,964
|
|
|
$
|
—
|
|
|
$
|
31,832
|
|
|
Service revenues
|
|
49,225
|
|
|
5,325
|
|
|
—
|
|
|
54,550
|
|
||||
Total revenues
|
|
$
|
55,093
|
|
|
$
|
31,289
|
|
|
$
|
—
|
|
|
$
|
86,382
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
36,601
|
|
26,669
|
|
—
|
|
|
63,270
|
|
||||||
|
Operating depreciation and amortization
|
|
1,801
|
|
|
1,535
|
|
|
—
|
|
|
3,336
|
|
||||
Profit before corporate selling, general, and administrative expenses
|
|
$
|
16,691
|
|
|
$
|
3,085
|
|
|
$
|
—
|
|
|
$
|
19,776
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
10,575
|
|
10,575
|
|
||||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
848
|
|
848
|
|
||||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
11,423
|
|
|
$
|
11,423
|
|
|||||
Other (income) - net
|
|
|
|
|
|
(3,027)
|
|
(3,027)
|
|
||||||||
Operating income
|
|
|
|
|
|
|
|
11,380
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
412
|
|
412
|
|
||||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
10,968
|
|
Second Quarter Ended,
|
|||||||||||||||||
June 18, 2016
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
5,106
|
|
|
$
|
19,589
|
|
|
$
|
—
|
|
|
$
|
24,695
|
|
|
Service revenues
|
|
47,331
|
|
|
8,526
|
|
|
—
|
|
|
55,857
|
|
||||
Total revenues
|
|
$
|
52,437
|
|
|
$
|
28,115
|
|
|
$
|
—
|
|
|
$
|
80,552
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
35,631
|
|
|
26,080
|
|
|
—
|
|
|
61,711
|
|
||||
|
Operating depreciation and amortization
|
|
1,710
|
|
|
1,591
|
|
|
—
|
|
|
3,301
|
|
||||
Profit before corporate selling, general, and administrative expenses
|
|
$
|
15,096
|
|
|
$
|
444
|
|
|
$
|
—
|
|
|
$
|
15,540
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
11,521
|
|
|
11,521
|
|
|||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
817
|
|
|
817
|
|
|||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
12,338
|
|
|
$
|
12,338
|
|
|||||
Other (income) - net
|
|
|
|
|
|
(142)
|
|
|
(142)
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
3,344
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
451
|
|
|
451
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
2,893
|
|
First Half Ended,
|
|||||||||||||||||
June 17, 2017
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
11,592
|
|
|
$
|
47,220
|
|
|
$
|
—
|
|
|
$
|
58,812
|
|
|
Service revenues
|
|
96,716
|
|
|
11,307
|
|
|
—
|
|
|
108,023
|
|
||||
Total revenues
|
|
$
|
108,308
|
|
|
$
|
58,527
|
|
|
$
|
—
|
|
|
$
|
166,835
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
73,121
|
|
|
51,439
|
|
|
—
|
|
|
124,560
|
|
||||
|
Operating depreciation and amortization
|
|
3,547
|
|
|
3,070
|
|
|
—
|
|
|
6,617
|
|
||||
Profit before corporate selling, general, and administrative expenses
|
|
$
|
31,640
|
|
|
$
|
4,018
|
|
|
$
|
—
|
|
|
$
|
35,658
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
22,916
|
|
|
22,916
|
|
|||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
1,699
|
|
1,699
|
|
||||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
24,615
|
|
|
$
|
24,615
|
|
|||||
Other (income) - net
|
|
|
|
|
|
(8,033)
|
|
|
(8,033)
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
19,076
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
499
|
|
|
499
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
18,577
|
|
First Half Ended,
|
|||||||||||||||||
June 18, 2016
|
|||||||||||||||||
|
(Thousands)
|
|
Environmental
Services
|
|
Oil Business
|
|
Corporate and
Eliminations |
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||
|
Product revenues
|
|
$
|
10,135
|
|
|
$
|
38,264
|
|
|
$
|
—
|
|
|
$
|
48,399
|
|
|
Service revenues
|
|
94,663
|
|
|
15,943
|
|
|
—
|
|
|
110,606
|
|
||||
Total revenues
|
|
$
|
104,798
|
|
|
$
|
54,207
|
|
|
$
|
—
|
|
|
$
|
159,005
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating costs
|
|
72,436
|
|
|
53,523
|
|
|
—
|
|
|
125,959
|
|
||||
|
Operating depreciation and amortization
|
|
3,424
|
|
|
3,171
|
|
|
—
|
|
|
6,595
|
|
||||
Profit (loss) before corporate selling, general, and administrative expenses
|
|
$
|
28,938
|
|
|
$
|
(2,487
|
)
|
|
$
|
—
|
|
|
$
|
26,451
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
|
23,729
|
|
|
23,729
|
|
|||||||
Depreciation and amortization from SG&A
|
|
|
|
|
|
1,651
|
|
|
1,651
|
|
|||||||
Total selling, general, and administrative expenses
|
|
|
|
|
|
$
|
25,380
|
|
|
$
|
25,380
|
|
|||||
Other (income) - net
|
|
|
|
|
|
(201)
|
|
|
(201)
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
1,272
|
|
||||||||
Interest expense – net
|
|
|
|
|
|
969
|
|
|
969
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
$
|
303
|
|
(Thousands)
|
|
June 17, 2017
|
|
December 31, 2016
|
||||||
Total Assets:
|
|
|
|
|
||||||
|
Environmental Services
|
|
$
|
130,944
|
|
|
$
|
129,506
|
|
|
|
Oil Business
|
|
128,596
|
|
|
135,323
|
|
|||
|
Unallocated Corporate Assets
|
|
37,929
|
|
|
49,478
|
|
|||
|
|
Total
|
|
$
|
297,469
|
|
|
$
|
314,307
|
|
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 December 31, 2016
|
514,287
|
|
|
$
|
11.00
|
|
|
1.33
|
|
|
$
|
2,414
|
|
Exercised
|
(216,253
|
)
|
|
10.90
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at June 17, 2017
|
298,034
|
|
|
$
|
11.08
|
|
|
0.85
|
|
|
$
|
1,004
|
|
|
|
|
|
|
|
Compensation Expense
|
|
|
|
|
|||||||||||
(thousands except for shares total)
|
|
First Half Ended,
|
|
Unrecognized Expense as of
|
|||||||||||||||||
Recipient of Grant
|
|
Grant Date
|
|
Restricted Shares
|
|
June 17, 2017
|
|
June 18, 2016
|
|
June 17, 2017
|
|
December 31, 2016
|
|||||||||
Board of Directors
|
|
April, 2017
|
|
28,674
|
|
|
$
|
113
|
|
|
$
|
132
|
|
|
$
|
134
|
|
|
$
|
—
|
|
Members of Management
|
|
February, 2015
|
|
38,732
|
|
|
51
|
|
|
57
|
|
|
59
|
|
|
170
|
|
||||
Members of Management
|
|
January, 2016
|
|
43,208
|
|
|
48
|
|
|
55
|
|
|
160
|
|
|
258
|
|
||||
Members of Management
|
|
February, 2017
|
|
146,564
|
|
|
200
|
|
|
264
|
|
|
1,183
|
|
|
2,028
|
|
||||
Chief Executive Officer
|
|
February, 2017
|
|
500,000
|
|
|
455
|
|
|
—
|
|
|
3,080
|
|
|
—
|
|
Vesting Table
|
||
Increase in Stock Price From the Employment Commencement Date to the Vesting Date
|
|
Total percentage of Restricted Stock
|
Less than $5 per share increase
|
|
—%
|
$5 per share increase
|
|
25%
|
$10 per share increase
|
|
50%
|
$15 per share increase
|
|
75%
|
$20 or more per share increase
|
|
100%
|
Restricted Stock (Nonvested Shares)
|
|
Number of Shares
|
|
Weighted Average Grant-Date Fair Value Per Share
|
|||
Nonvested shares outstanding at December 31, 2016
|
|
136,171
|
|
|
$
|
12.42
|
|
Granted
|
|
659,842
|
|
|
15.11
|
|
|
Vested
|
|
(96,636
|
)
|
|
13.16
|
|
|
Nonvested shares outstanding at June 17, 2017
|
|
699,377
|
|
|
$
|
14.51
|
|
|
|
Second Quarter Ended,
|
|
First Half Ended,
|
||||||||||||
(Thousands)
|
|
June 17, 2017
|
|
June 18, 2016
|
|
June 17, 2017
|
|
June 18, 2016
|
||||||||
Net income
|
|
$
|
6,986
|
|
|
$
|
1,831
|
|
|
$
|
11,803
|
|
|
$
|
106
|
|
Less: Income attributable to noncontrolling interest
|
|
52
|
|
|
—
|
|
|
105
|
|
|
42
|
|
||||
Net income attributable to Heritage-Crystal Clean, Inc. available to common stockholders
|
|
$
|
6,934
|
|
|
$
|
1,831
|
|
|
$
|
11,698
|
|
|
$
|
64
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic shares outstanding
|
|
22,506
|
|
|
22,246
|
|
|
22,430
|
|
|
22,236
|
|
||||
Dilutive shares from share–based compensation plans
|
|
326
|
|
|
173
|
|
|
299
|
|
|
156
|
|
||||
Weighted average diluted shares outstanding
|
|
22,832
|
|
|
22,419
|
|
|
22,729
|
|
|
22,392
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: basic
|
|
$
|
0.31
|
|
|
$
|
0.08
|
|
|
$
|
0.52
|
|
|
$
|
—
|
|
Net income per share: diluted
|
|
$
|
0.30
|
|
|
$
|
0.08
|
|
|
$
|
0.51
|
|
|
$
|
—
|
|
|
|
For the Second Quarter Ended,
|
|
For the First Half Ended,
|
||||||||
(Thousands)
|
|
June 17,
2017 |
|
June 18,
2016 |
|
June 17,
2017 |
|
June 18,
2016 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues
|
|
$31,832
|
36.9%
|
|
$24,695
|
30.7%
|
|
$58,812
|
35.3%
|
|
$48,399
|
30.4%
|
Service revenues
|
|
54,550
|
63.1%
|
|
55,857
|
69.3%
|
|
108,023
|
64.7%
|
|
110,606
|
69.6%
|
Total Revenues
|
|
$86,382
|
100.0%
|
|
$80,552
|
100.0%
|
|
$166,835
|
100.0%
|
|
$159,005
|
100.0%
|
Operating expenses -
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
|
|
$63,270
|
73.2%
|
|
$61,711
|
76.6%
|
|
$124,560
|
74.7%
|
|
$125,959
|
79.2%
|
Selling, general and administrative expenses
|
|
10,575
|
12.2%
|
|
11,521
|
14.3%
|
|
22,916
|
13.7%
|
|
23,729
|
14.9%
|
Depreciation and amortization
|
|
4,184
|
4.8%
|
|
4,118
|
5.1%
|
|
8,316
|
5.0%
|
|
8,246
|
5.2%
|
Other (income) - net
|
|
(3,027)
|
(3.5)%
|
|
(142)
|
(0.2)%
|
|
(8,033)
|
(4.8)%
|
|
(201)
|
(0.1)%
|
Operating income
|
|
11,380
|
13.2%
|
|
3,344
|
4.2%
|
|
19,076
|
11.4%
|
|
1,272
|
0.8%
|
Interest expense – net
|
|
412
|
0.5%
|
|
451
|
0.6%
|
|
499
|
0.3%
|
|
969
|
0.6%
|
Income before income taxes
|
|
10,968
|
12.7%
|
|
2,893
|
3.6%
|
|
18,577
|
11.1%
|
|
303
|
0.2%
|
Provision for income taxes
|
|
3,982
|
4.6%
|
|
1,062
|
1.3%
|
|
6,774
|
4.1%
|
|
197
|
0.1%
|
Net income
|
|
6,986
|
8.1%
|
|
1,831
|
2.3%
|
|
11,803
|
7.1%
|
|
106
|
0.1%
|
Income attributable to noncontrolling interest
|
|
52
|
0.1%
|
|
—
|
—%
|
|
105
|
0.1%
|
|
42
|
—%
|
Net income attributable to Heritage-Crystal Clean, Inc. common stockholders
|
|
$6,934
|
8.0%
|
|
$1,831
|
2.3%
|
|
$11,698
|
7.0%
|
|
$64
|
—%
|
|
|
|
|
For the Second Quarter Ended,
|
|
Change
|
|||||||||||
(Thousands)
|
|
|
|
|
|
|
|
|
|||||||||
|
June 17, 2017
|
|
June 18, 2016
|
|
$
|
|
%
|
||||||||||
|
|
|
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
55,093
|
|
|
$
|
52,437
|
|
|
$
|
2,656
|
|
|
5.1
|
%
|
|
|
Oil Business
|
|
31,289
|
|
|
28,115
|
|
|
3,174
|
|
|
11.3
|
%
|
||||
|
|
Total
|
|
$
|
86,382
|
|
|
$
|
80,552
|
|
|
$
|
5,830
|
|
|
7.2
|
%
|
|
|
|
|
For the First Half Ended,
|
|
Change
|
|||||||||||
(Thousands)
|
|
|
|
|
|
|
|
|
|||||||||
|
June 17, 2017
|
|
June 18, 2016
|
|
$
|
|
%
|
||||||||||
|
|
|
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
108,308
|
|
|
$
|
104,798
|
|
|
$
|
3,510
|
|
|
3.3
|
%
|
|
|
Oil Business
|
|
58,527
|
|
|
54,207
|
|
|
4,320
|
|
|
8.0
|
%
|
||||
|
|
Total
|
|
$
|
166,835
|
|
|
$
|
159,005
|
|
|
$
|
7,830
|
|
|
4.9
|
%
|
|
|
|
|
For the Second Quarter Ended,
|
|
Change
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
(Thousands)
|
|
June 17, 2017
|
|
June 18, 2016
|
|
$
|
|
%
|
|||||||||
|
|
|
|||||||||||||||
Profit before corporate SG&A*
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
16,691
|
|
|
$
|
15,096
|
|
|
$
|
1,595
|
|
|
10.6
|
%
|
|
|
Oil Business
|
|
3,085
|
|
|
444
|
|
|
2,641
|
|
|
594.8
|
%
|
||||
|
Total
|
|
$
|
19,776
|
|
|
$
|
15,540
|
|
|
$
|
4,236
|
|
|
27.3
|
%
|
|
|
|
For the First Half Ended,
|
|
Change
|
||||||||||||
(Thousands)
|
|
|
|
|
|
|
|
|
|||||||||
|
June 17, 2017
|
|
June 18, 2016
|
|
$
|
|
%
|
||||||||||
|
|
|
|
||||||||||||||
Profit (loss) before corporate SG&A*
|
|
|
|
|
|
|
|
|
|||||||||
|
Environmental Services
|
|
$
|
31,640
|
|
|
$
|
28,938
|
|
|
$
|
2,702
|
|
|
9.3
|
%
|
|
|
Oil Business
|
|
4,018
|
|
|
(2,487
|
)
|
|
6,505
|
|
|
—
|
%
|
||||
|
Total
|
|
$
|
35,658
|
|
|
$
|
26,451
|
|
|
$
|
9,207
|
|
|
34.8
|
%
|
•
|
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, provided that in the event of a permitted acquisition having an aggregate consideration equal to $10.0 million or more, at the Borrower’s election, the foregoing 3.00 to 1.00 shall be deemed to be 3.25 to 1.00 for the fiscal quarter in which such permitted acquisition occurs and the three immediately following fiscal quarters and will thereafter revert to 3.00 to 1.00;
|
•
|
A capital expenditures covenant limiting capital expenditures to $100.0 million plus, if the capital expenditures permitted have been fully utilized, an additional amount for the remaining term of the Agreement equal to 35% of EBITDA for the thirteen “four-week” periods most recently ended immediately prior to the full utilization of such $100.0 million basket
|
|
|
For the First Half Ended,
|
||||||
(Thousands)
|
|
June 17,
2017 |
|
June 18,
2016 |
||||
Net cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
27,912
|
|
|
$
|
14,391
|
|
Investing activities
|
|
(6,279
|
)
|
|
(11,071
|
)
|
||
Financing activities
|
|
(33,001
|
)
|
|
(1,603
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(11,368
|
)
|
|
$
|
1,717
|
|
•
|
Earnings increase — Our increase in net income for the first half of fiscal 2017 favorably impacted our net cash provided by operating activities by
$11.7 million
compared to the first half fiscal 2016. Net income was favorably impacted, on a pre-tax basis, by a payment of
$5.5 million
resulting from an arbitration award and a
$3.6 million
gain from a settlement, both related to our acquisition of FCC Environmental in 2014.
|
•
|
Accounts Payable
— The decrease in accounts payable unfavorably affected cash flows from operating activities by
$4.4 million
in the first half of fiscal
2017
compared to the first half of fiscal 2016. The decrease in accounts payable in the first half of fiscal 2017 was mainly driven by cash outlays of our legal fees payables.
|
•
|
Accrued expenses
— In the first half of fiscal 2017, the decrease in accrued expenses unfavorably affected cash flows from operating activities by
$3.9 million
compared to the first half of fiscal 2016 driven mainly by higher cash outlays for incentive compensation and severance payments.
|
•
|
Accounts Receivable
— The decrease in accounts receivable had a favorable impact on cash provided by operating activities of
$5.1 million
in the first half of fiscal 2017 compared to the first half of fiscal 2016 primarily due to receipt of $4.3 million related to a settlement agreement with the sellers of FCC Environmental.
|
•
|
Capital expenditures —
We used
$6.3 million
and
$8.7 million
for capital expenditures during the first half of fiscal
2017
and the first half of fiscal 2016, respectively. During the first half of fiscal 2017, we spent $2.6 million for capital improvements to the re-refinery, compared to $4.8 million on capital improvements at the re-refinery in the first half of fiscal 2016. Additionally, in the first half of fiscal
2017
, we spent approximately $2.2 million for purchases of parts cleaning machines compared to $2.0 million in the first half of fiscal 2016. The remaining $1.5 million of capital expenditures in the first half of fiscal
2017
was for other items including leasehold improvements and intangible assets compared to approximately $1.9 million spent in the first half of fiscal 2016 for other items.
|
•
|
Proceeds from New Credit Agreement —
We received $30 million of proceeds from our new Term Loan.
|
•
|
Repayment of our Old Credit Agreement —
We made $64.2 million of repayments of our prior Term Loan.
|
10.1
|
First Amendment to the Credit Agreement
|
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:
|
July 26, 2017
|
By:
|
/s/ Mark DeVita
|
|
|
|
|
|
|
|
Mark DeVita
|
|
|
|
Chief Financial Officer
|
1.
|
I have reviewed this Form 10-Q for the period ended
June 17, 2017
of Heritage-Crystal Clean, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: July 26, 2017
|
By:
/s/ Brian Recatto
|
|
|
|
Brian Recatto
|
|
President, CEO and Director — Principal Executive Officer
|
1.
|
I have reviewed this Form 10-Q for the period ended
June 17, 2017
of Heritage-Crystal Clean, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: July 26, 2017
|
By:
/s/ Mark DeVita
|
|
|
|
Mark DeVita
|
|
Chief Financial Officer
|
Date: July 26, 2017
|
By:
/s/ Brian Recatto
|
|
|
|
Brian Recatto
|
|
President, CEO and Director — Principal Executive Officer
|
Date: July 26, 2017
|
By:
/s/ Mark DeVita
|
|
|
|
Mark DeVita
|
|
Chief Financial Officer
|