Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 24, 2018 | May 01, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Heritage-Crystal Clean, Inc. | |
Entity Central Index Key | 1,403,431 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 24, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 23,015,552 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 24, 2018 | Dec. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 37,557 | $ 41,889 |
Accounts receivable - net | 46,883 | 45,491 |
Inventory - net | 25,394 | 21,639 |
Other current assets | 5,122 | 5,895 |
Total Current Assets | 114,956 | 114,914 |
Property, plant and equipment - net | 128,504 | 128,119 |
Equipment at customers - net | 23,473 | 23,312 |
Software and intangible assets - net | 16,005 | 16,732 |
Goodwill | 31,580 | 31,580 |
Total Assets | 314,518 | 314,657 |
Current Liabilities: | ||
Accounts payable | 27,849 | 25,568 |
Contract liabilities - net | 237 | 0 |
Accrued salaries, wages, and benefits | 4,535 | 6,386 |
Taxes payable | 5,898 | 5,787 |
Other current liabilities | 2,562 | 2,690 |
Total Current Liabilities | 41,081 | 40,431 |
Long-term debt | 28,814 | 28,744 |
Deferred income taxes | 9,170 | 9,556 |
Total Liabilities | 79,065 | 78,731 |
STOCKHOLDERS' EQUITY: | ||
Common stock - 26,000,000 shares authorized at $0.01 par value, 23,010,733 and 22,891,674 shares issued and outstanding at March 24, 2018 and December 30, 2017, respectively | 230 | 229 |
Additional paid-in capital | 193,536 | 193,640 |
Retained earnings | 40,971 | 41,359 |
Total Heritage-Crystal Clean, Inc. Stockholders' Equity | 234,737 | 235,228 |
Noncontrolling interest | 716 | 698 |
Total Equity | 235,453 | 235,926 |
Total Liabilities and Stockholders' Equity | $ 314,518 | $ 314,657 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 24, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 26,000,000 | 26,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 23,010,733 | 22,891,674 |
Common stock, shares outstanding | 23,010,733 | 22,891,674 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | |
Revenues | ||
Product revenues | $ 29,010 | $ 26,980 |
Service revenues | 54,137 | 53,473 |
Total revenues | 83,147 | 80,453 |
Operating expenses | ||
Operating costs | 68,386 | 61,290 |
Selling, general, and administrative expenses | 11,022 | 12,341 |
Depreciation and amortization | 3,643 | 4,132 |
Other expense (income) - net | 389 | (5,006) |
Operating (loss) income | (293) | 7,696 |
Interest expense – net | 245 | 87 |
(Loss) income before income taxes | (538) | 7,609 |
(Benefit from) provision for income taxes | (436) | 2,792 |
Net (loss) income | (102) | 4,817 |
Income attributable to noncontrolling interest | 18 | 53 |
Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders | $ (120) | $ 4,764 |
Net (loss) income per share: basic (in dollars per share) | $ (0.01) | $ 0.21 |
Net (loss) income per share: diluted (in dollars per share) | $ (0.01) | $ 0.21 |
Number of weighted average shares outstanding: basic (in shares) | 22,962 | 22,353 |
Number of weighted average shares outstanding: diluted (in shares) | 22,962 | 22,892 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional Paid–in Capital | Retained Earnings | Total Heritage-Crystal Clean, Inc. Stockholders' Equity | Non-controlling Interest |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adjustment from adopting ASC 606 | $ (268) | $ (268) | $ (268) | |||
Beginning balance (in shares) at Dec. 30, 2017 | 22,891,674 | 22,891,674 | ||||
Beginning balance at Dec. 30, 2017 | $ 235,926 | $ 229 | $ 193,640 | 41,359 | 235,228 | $ 698 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (102) | (120) | (120) | 18 | ||
Issuance of common stock – ESPP (in shares) | 4,822 | |||||
Issuance of common stock – ESPP | 100 | 100 | 100 | |||
Share-based compensation (in shares) | 114,237 | |||||
Share-based compensation | 828 | $ 1 | 827 | 828 | ||
Share repurchases to satisfy tax withholding obligations | $ (1,031) | (1,031) | (1,031) | |||
Ending balance (in shares) at Mar. 24, 2018 | 23,010,733 | 23,010,733 | ||||
Ending balance at Mar. 24, 2018 | $ 235,453 | $ 230 | $ 193,536 | $ 40,971 | $ 234,737 | $ 716 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | |
Cash flows from Operating Activities: | ||
Net (loss) income | $ (102) | $ 4,817 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 3,643 | 4,132 |
Bad debt provision | 286 | (28) |
Share-based compensation | 828 | 667 |
Deferred taxes | (386) | 2,710 |
Other, net | 74 | 435 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (1,678) | 4,375 |
Increase in inventory | (3,755) | (1,166) |
Decrease in other current assets | 773 | 1,410 |
Increase (decrease) in accounts payable | 2,344 | (2,628) |
Decrease in accrued liabilities | (2,564) | (2,670) |
Cash (used in) provided by operating activities | (537) | 12,054 |
Cash flows from Investing Activities: | ||
Capital expenditures | (3,568) | (3,313) |
Proceeds from the disposal of assets | 55 | 20 |
Cash used in investing activities | (3,513) | (3,293) |
Cash flows from Financing Activities: | ||
Payments on Term loan | 0 | (64,195) |
Proceeds from new Term Loan | 0 | 30,000 |
Proceeds under revolving credit facility | 0 | 4,000 |
Payments of revolving credit facility | 0 | (4,000) |
Proceeds from the exercise of stock options | 0 | 1,018 |
Share repurchases to satisfy tax withholding obligations | (382) | (356) |
Proceeds from the issuance of common stock | 100 | 101 |
Payments of debt issuance costs | 0 | (1,051) |
Cash used in financing activities | (282) | (34,483) |
Net decrease in cash and cash equivalents | (4,332) | (25,722) |
Cash and cash equivalents, beginning of period | 41,889 | 36,610 |
Cash and cash equivalents, end of period | 37,557 | 10,888 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 2 | 0 |
Cash paid for interest | 249 | 481 |
Supplemental disclosure of non-cash information: | ||
Payables for share-based tax withholdings | 649 | 0 |
Payables for construction in progress | $ 451 | $ 0 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 24, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | ORGANIZATION AND NATURE OF OPERATIONS Heritage-Crystal Clean, Inc., a Delaware corporation and its subsidiaries (collectively the “Company”), provides parts cleaning, hazardous and non-hazardous containerized waste, used oil collection, vacuum, antifreeze recycling and field services primarily to small and mid-sized industrial and vehicle maintenance customers. The Company owns and operates a used oil re-refinery where it re-refines used oils and sells high quality base oil for lubricants as well as other re-refinery products. The Company also has multiple locations where it dehydrates used oil. The oil processed at these locations is sold as recycled fuel oil. The Company also operates multiple wastewater treatment plants and antifreeze recycling facilities at which it produces virgin-quality antifreeze. The Company operates in the United States and Ontario, Canada. The Company conducts its primary business operations through Heritage-Crystal Clean, LLC, its wholly owned subsidiary, and all intercompany balances have been eliminated in consolidation. The Company has two reportable segments: "Environmental Services" and "Oil Business." The Environmental Services segment consists of the Company's parts cleaning, containerized waste management, vacuum truck services, antifreeze recycling activities, and field services. The Oil Business segment consists of the Company's used oil collection, recycled fuel oil sales, used oil re-refining activities, and used oil filter removal and disposal services. No customer represented greater than 10% of consolidated revenues for any of the periods presented. There were no intersegment revenues. Both segments operate in the United States, and the Environmental Services segment also operates, to an immaterial degree, in Ontario, Canada. The Company’s fiscal year ends on the Saturday closest to December 31. The most recent fiscal year ended on December 30, 2017 . Each of the Company's first three fiscal quarters consists of twelve weeks while the last fiscal quarter consists of sixteen or seventeen weeks. In the Company's Environmental Services segment, product revenues include sales of solvent, machines, absorbent, accessories, and antifreeze; service revenues include servicing of parts cleaning machines, drum waste removal services, vacuum truck services, field services, and other services. In the Company's Oil Business segment, product revenues include sales of re-refined base oil, recycled fuel oil, used oil, and other products; service revenues include revenues from used oil collection activities, collecting and disposing of waste water and removal and disposal of used oil filters. Due to the Company's integrated business model, it is impracticable to separately present costs of tangible products and costs of services. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 24, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company's significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2017. There have been no material changes in these policies or their application with the exception of revenue recognition. See footnote 3 - Revenue for more information. Recently Issued Accounting Pronouncements Standard Issuance Date Description Our Effective Date Effect on the Financial Statements ASU 2016-02 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. The Company anticipates that implementation of this standard will result in an increase to assets and an increase to liabilities. To date, certain personnel have attended technical training concerning this new lease accounting standard. Recently Issued Accounting Standards Adopted Standard Issuance Date Description 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 On December 31, 2017, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method. We recognized the cumulative effect as an adjustment to our opening balance of retained earnings. Effective December 31, 2017, we adopted the requirements of Topic 606. The cumulative effects of the changes made to our statement of income and balance sheet were as follows: For the Period ended March 24, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change (thousands) Higher/(Lower) Statement of Income Service revenues $ 54,137 $ 54,106 $ 31 Total revenues 83,147 83,116 31 Operating (loss) income (293 ) (324 ) 31 (Loss) income before income taxes (538 ) (569 ) 31 (Benefit from) provision for income taxes (436 ) (461 ) 25 Net (loss) income (102 ) (108 ) 6 Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders $ (120 ) $ (126 ) $ 6 March 24, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change (thousands) Higher/(Lower) Balance Sheet Contract liabilities - net $ 237 $ — $ 237 Total Current Liabilities 41,081 40,844 237 Deferred income taxes 9,170 9,145 25 Total Liabilities 79,065 78,803 262 Retained earnings 40,971 41,233 (262 ) Total Heritage-Crystal Clean, Inc. Stockholders' Equity 234,737 234,999 (262 ) Total Equity $ 235,453 $ 235,715 $ (262 ) |
Revenue
Revenue | 3 Months Ended |
Mar. 24, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when our performance obligations under the terms of a contract with our customers are satisfied. Recognition occurs when the Company transfers control by completing the specified services at the point in time the customer benefits from the services performed or once our products are delivered. Revenue is measured as the amount of consideration we expect to receive in exchange for completing our performance obligations. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. In the case of contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative stand-alone selling prices of the various goods and/or services encompassed by the contract. We do not have any material significant payment terms as payment is generally due within 30 days after the performance obligation has been satisfactorily completed. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. In applying the guidance in Topic 606, there were no judgments or estimates made that the Company deems significant. Accounts Receivable — Net, includes amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on analysis of customer credit worthiness and historical losses. Accounts receivable are written off once the Company determines the account to be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its customers. Contract Balances — Contract assets primarily relate to the Company’s rights to consideration for work completed in relation to its services performed but not billed at the reporting date. Contract liabilities primarily consist of advance payments of performance obligations yet to be fully satisfied in the period reported. Our contract liabilities and contract assets are reported in a net position at the end of each reporting period. We disaggregate our revenue from contracts with customers by major lines of business for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following table disaggregates our revenue by major lines: For the first quarter ended March 24, 2018 Total Net Sales by Major Lines of Business (thousands) Environmental Services Oil Business Total Parts cleaning, containerized waste, & related products/services $ 39,615 $ — $ 39,615 Vacuum Services & Wastewater Treatment 11,847 — 11,847 Antifreeze Business 3,459 — 3,459 Field Services 2,155 — 2,155 Environmental Services - Other 400 — 400 Re-refinery Product Sales — 20,485 20,485 Oil Collection Services & RFO — 4,017 4,017 Oil Filter Business — 1,077 1,077 Revenues from Contracts with Customers 57,476 25,579 83,055 Other Revenue — 92 92 Total Revenues $ 57,476 $ 25,671 $ 83,147 The following table provides information about contract assets and contract liabilities from contracts with customers: (thousands) March 24, 2018 December 31, 2017 Contract assets $ 44 $ 59 Contract liabilities 281 327 Contract liabilities - net $ 237 $ 268 During the quarter ended March 24, 2018, the Company recognized $31 thousand of revenue that was included in the contract liabilities balance as of December 31, 2017. The Company had no assets recognized from costs to obtain or fulfill a contract with a customer. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 24, 2018 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: (Thousands) March 24, December 30, Trade $ 44,072 $ 43,301 Less: allowance for doubtful accounts (1,923 ) (1,881 ) Trade - net 42,149 41,420 Related parties 2,042 1,906 Other 2,692 2,165 Total accounts receivable - net $ 46,883 $ 45,491 The following table provides the changes in the Company’s allowance for doubtful accounts for the first quarter ended March 24, 2018 , and the fiscal year ended December 30, 2017 : For the Quarter Ended, For the Fiscal Year Ended, (Thousands) March 24, December 30, Balance at beginning of period $ 1,881 $ 2,176 Provision for bad debts 286 402 Accounts written off, net of recoveries (244 ) (697 ) Balance at end of period $ 1,923 $ 1,881 |
Inventory
Inventory | 3 Months Ended |
Mar. 24, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY The carrying value of inventory consisted of the following: (Thousands) March 24, December 30, Used oil and processed oil $ 8,062 $ 5,788 Solvents and solutions 6,820 6,201 Drums and supplies 4,785 4,430 Machines 3,862 3,679 Other 2,146 1,936 Total inventory 25,675 22,034 Less: machine refurbishing reserve (281 ) (395 ) Total inventory - net $ 25,394 $ 21,639 Inventory consists primarily of used oil, processed oil, solvents and solutions, new and refurbished parts cleaning machines, drums and supplies, and other items. Inventories are valued at the lower of first-in, first-out (FIFO) cost or net realizable value, net of any reserves for excess, obsolete, or unsalable inventory. The Company routinely monitors its inventory levels at each of its locations and evaluates inventories for excess or slow-moving items. If circumstances indicate the cost of inventories exceed their recoverable value, inventories are reduced to net realizable value. The Company had no inventory write downs during the first quarters of fiscal 2018 and fiscal 2017. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Mar. 24, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consisted of the following: (Thousands) March 24, December 30, Machinery, vehicles, and equipment $ 85,683 $ 85,427 Buildings and storage tanks 69,055 69,009 Land 9,557 9,562 Leasehold improvements 5,468 5,427 Construction in progress 11,280 9,378 Assets held for sale 53 53 Total property, plant and equipment 181,096 178,856 Less: accumulated depreciation (52,592 ) (50,737 ) Property, plant and equipment - net $ 128,504 $ 128,119 (Thousands) March 24, December 30, Equipment at customers $ 69,388 $ 68,234 Less: accumulated depreciation (45,915 ) (44,922 ) Equipment at customers - net $ 23,473 $ 23,312 Depreciation expense for first quarters ended March 24, 2018 and March 25, 2017 was $2.9 million and $3.4 million , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 24, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is measured as a residual amount as of the acquisition date, which in most cases results in measuring goodwill as an excess of the purchase consideration transferred plus the fair value of any noncontrolling interest in the acquiree over the fair value of the net assets acquired, including any contingent consideration. The Company tests goodwill for impairment annually in the fourth quarter and in interim periods if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company's determination of fair value requires certain assumptions and estimates, such as margin expectations, market conditions, growth expectations, expected changes in working capital, etc., regarding expected future profitability and expected future cash flows. The Company tests goodwill for impairment at each of its two reporting units, Environmental Services and Oil Business. The following table shows changes to our goodwill balances by segment from December 30, 2017, to March 24, 2018: (Thousands) Oil Business Environmental Services Total Goodwill at December 30, 2017 Gross carrying amount $ 3,952 $ 31,580 $ 35,532 Accumulated impairment loss (3,952 ) — (3,952 ) Net book value at December 30, 2017 $ — $ 31,580 $ 31,580 Measurement period adjustments — — — Goodwill at March 24, 2018 Gross carrying amount 3,952 31,580 35,532 Accumulated impairment loss (3,952 ) — (3,952 ) Net book value at March 24, 2018 $ — $ 31,580 $ 31,580 The following is a summary of software and other intangible assets: March 24, 2018 December 30, 2017 (Thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer & supplier relationships $ 23,071 $ 9,565 $ 13,506 $ 23,077 $ 9,027 $ 14,050 Software 4,724 3,954 770 4,724 3,899 825 Non-compete agreements 2,945 2,705 240 2,949 2,617 332 Patents, formulae, and licenses 1,769 657 1,112 1,769 642 1,127 Other 1,348 971 377 1,348 950 398 Total software and intangible assets $ 33,857 $ 17,852 $ 16,005 $ 33,867 $ 17,135 $ 16,732 Amortization expense was $0.7 million for the first quarter ended March 24, 2018 , and $0.8 million for first quarter ended March 25, 2017 . The weighted average useful lives of software; customer & supplier relationships; patents, formulae, and licenses; non-compete agreements, and other intangibles were 9 years, 10 years, 15 years, 5 years, and 6 years, respectively. The expected amortization expense for the remainder of fiscal 2018 and for fiscal years 2019, 2020, 2021, and 2022 is $2.3 million , $2.6 million , $2.5 million , $2.4 million , and $2.1 million , respectively. The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, disposal of intangible assets, accelerated amortization of intangible assets, and other events. |
Accounts Payable
Accounts Payable | 3 Months Ended |
Mar. 24, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable | ACCOUNTS PAYABLE Accounts payable consisted of the following: (Thousands) March 24, December 30, Accounts payable $ 27,488 $ 25,540 Accounts payable - related parties 361 28 Total accounts payable $ 27,849 $ 25,568 |
Debt and Financing Arrangements
Debt and Financing Arrangements | 3 Months Ended |
Mar. 24, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangements | DEBT AND FINANCING ARRANGEMENTS Bank Credit Facility The Company's Credit Agreement as amended ("Credit Agreement"), provides for borrowings of up to $95.0 million , subject to the satisfaction of certain terms and conditions, comprised of a term loan of $30.0 million and up to $65.0 million of borrowings under the revolving loan portion. The actual amount of borrowings available under the revolving loan portion of the Credit Agreement is limited by the Company's total leverage ratio. The amount available to draw at any point in time would be further reduced by any standby letters of credit issued. Loans made under the Credit Agreement may be Base Rate Loans or LIBOR Rate Loans, at the election of the Company subject to certain exceptions. Base Rate Loans have an interest rate equal to (i) the higher of (a) the federal funds rate plus 0.5% , (b) the London Interbank Offering Rate (“LIBOR”) plus 1% , or (c) Bank of America's prime rate, plus (ii) a variable margin of between 0.75% and 1.75% depending on the Company's total leverage ratio, calculated on a consolidated basis. LIBOR rate loans have an interest rate equal to (i) the LIBOR rate plus (ii) a variable margin of between 1.75% and 2.75% depending on the Company's total leverage ratio. Amounts borrowed under the Credit Agreement are secured by a security interest in substantially all of the Company's tangible and intangible assets. The Credit Agreement contains customary terms and provisions (including representations, covenants, and conditions) for transactions of this type. Certain covenants, among other things, restrict the Company's and its subsidiaries' ability to incur indebtedness, grant liens, make investments and sell assets. The Credit Agreement also contains customary events of default, covenants and representations and warranties. Financial covenants include: • 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. The Credit Agreement places certain limitations on acquisitions and the payment of dividends. During the first quarter of fiscal 2017, the Company paid and capitalized $1.1 million of debt issuance costs pertaining to the Credit Agreement and charged $0.2 million of unamortized debt issuance costs pertaining to the Credit Agreement to selling, general, and administrative expenses. Debt at March 24, 2018 and December 30, 2017 consisted of the following: (thousands) March 24, 2018 December 30, 2017 Principal amount $ 30,000 $ 30,000 Less: unamortized debt issuance costs 1,186 1,256 Debt less unamortized debt issuance costs $ 28,814 $ 28,744 During the first quarter of fiscal 2018 , the Company recorded interest of $0.3 million on the term loan. During the first quarter of fiscal 2017, the Company recorded interest of $0.5 million on the term loan. In the first quarter of 2018, the Company also recorded $0.1 million of amortization of debt issuance costs. No interest was capitalized during the first quarters of fiscal 2018 or 2017. The Company's weighted average interest rate for all debt as of March 24, 2018 , and March 25, 2017 was 3.4% and 3.5% , respectively. As of March 24, 2018 and December 30, 2017 , the Company was in compliance with all covenants under its Credit Agreement. As of March 24, 2018 and December 30, 2017 , the Company had $1.2 million and $0.9 million of standby letters of credit issued, respectively, and $63.8 million and $64.1 million was available for borrowing under the bank credit facility, respectively. We believe that the carrying value of our debt balance at March 24, 2018 approximates fair value. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 24, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company has two reportable segments: "Environmental Services" and "Oil Business." The Environmental Services segment consists of the Company's parts cleaning, containerized waste management, vacuum truck service, antifreeze recycling activities, and field services. The Oil Business segment consists primarily of the Company's used oil collection, used oil re-refining activities, and the dehydration of used oil to be sold as recycled fuel oil. No single customer in either segment accounted for more than 10.0% of consolidated revenues in any of the periods presented. There were no intersegment revenues. The Environmental Services segment operates in the United States and, to an immaterial degree, in Ontario, Canada. As such, the Company is not disclosing operating results by geographic segment. Segment results for the first quarters ended March 24, 2018 , and March 25, 2017 were as follows: First Quarter Ended, March 24, 2018 (Thousands) Environmental Services Oil Business Corporate and Consolidated Revenues Product revenues $ 6,444 $ 22,566 $ — $ 29,010 Service revenues 51,032 3,105 — 54,137 Total revenues $ 57,476 $ 25,671 $ — $ 83,147 Operating expenses Operating costs 42,725 25,661 — 68,386 Operating depreciation and amortization 1,490 1,389 — 2,879 Profit (loss) before corporate selling, general, and administrative expenses $ 13,261 $ (1,379 ) $ — $ 11,882 Selling, general, and administrative expenses 11,022 11,022 Depreciation and amortization from SG&A 764 764 Total selling, general, and administrative expenses $ 11,786 $ 11,786 Other expense - net 389 389 Operating (loss) (293) Interest expense – net 245 245 (Loss) before income taxes $ (538 ) First Quarter Ended, March 25, 2017 (Thousands) Environmental Services Oil Business Corporate and Consolidated Revenues Product revenues $ 5,724 $ 21,256 $ — $ 26,980 Service revenues 47,492 5,981 — 53,473 Total revenues $ 53,216 $ 27,237 $ — $ 80,453 Operating expenses Operating costs 36,520 24,770 — 61,290 Operating depreciation and amortization 1,746 1,535 — 3,281 Profit before corporate selling, general, and administrative expenses $ 14,950 $ 932 $ — $ 15,882 Selling, general, and administrative expenses 12,341 12,341 Depreciation and amortization from SG&A 851 851 Total selling, general, and administrative expenses $ 13,192 $ 13,192 Other (income) - net (5,006) (5,006) Operating income 7,696 Interest expense – net 87 87 Income before income taxes $ 7,609 Total assets by segment as of March 24, 2018 and December 30, 2017 were as follows: (Thousands) March 24, 2018 December 30, 2017 Total Assets: Environmental Services $ 133,881 $ 131,457 Oil Business 132,652 129,936 Unallocated Corporate Assets 47,985 53,264 Total $ 314,518 $ 314,657 Segment assets for the Environmental Services and Oil Business segments consist of property, plant, and equipment, intangible assets, accounts receivable, goodwill, and inventories. Assets for the corporate unallocated amounts consist of property, plant, and equipment used at the corporate headquarters as well as cash and net deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 24, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company may enter into purchase obligations with certain vendors. They represent expected payments to third party service providers and other commitments entered into during the normal course of our business. These purchase obligations are generally cancelable with or without notice, without penalty, although certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract. The Company has purchase obligations in the form of open purchase orders of $16.3 million as of March 24, 2018 , and $15.6 million as of December 30, 2017, primarily for used oil, solvent, machine purchases, disposal and transportation expenses, and capital expenditures. The Company may be subject to investigations, claims or lawsuits as a result of operating its business, including matters governed by environmental laws and regulations. The Company may also be subject to tax audits in a variety of jurisdictions. When claims are asserted, the Company evaluates the likelihood that a loss will occur and records a liability for those instances when the likelihood is deemed probable and the exposure is reasonably estimable. The Company carries insurance at levels it believes are adequate to cover loss contingencies based on historical claims activity. When the potential loss exposure is limited to the insurance deductible and the likelihood of loss is determined to be probable, the Company accrues for the amount of the required deductible, unless a lower amount of exposure is estimated. As of March 24, 2018 and December 30, 2017 , the Company had accrued $4.0 million and $4.5 million related to loss contingencies and other contingent liabilities, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 24, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was enacted into law and introduced significant changes to U.S. tax law. The Act reduces the U.S. federal corporate tax rate from 35% to 21% . The new legislation also sets forth a variety of other changes, including a limitation on the tax deductibility of interest expense, the acceleration of business asset expensing, a limitation on the use of net operating losses generated in future years, the repeal of the alternative minimum tax (AMT), and a reduction in the amount of executive pay that could qualify as a tax deduction. Due to the timing and the complexity involved in applying the provisions of the Act, the Company did not record provisional amounts in our financial statements as of December 30, 2017 related to the one time deemed repatriation of foreign earnings. As the Company collects and prepares necessary data, and interprets the Act and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (IRS), and other standard-setting bodies, the Company will record the provisional amounts related to the one time deemed repatriation of its Canadian subsidiary’s accumulated foreign earnings. The accounting for the tax effects of the deemed repatriation of foreign earnings will be completed later in 2018. The Company estimates that the income related to the deemed repatriation will be offset by U.S. net operating losses. The Company deducted for federal income tax purposes accelerated "bonus" depreciation on the majority of its capital expenditures for assets placed in service in fiscal 2011 through fiscal 2017. Therefore, the Company recorded a deferred tax liability related to the difference between the book basis and the tax basis of those assets. In addition, as a result of the federal bonus depreciation, the Company recorded a Net Operating Loss ("NOL") of $44.7 million , which will begin to expire in 2031. The unexpired balance of the NOL generated in 2011 is $13.7 million as of March 24, 2018. The Company recorded additional NOL during 2012 - 2015 of $13.0 million . The balance on the federal NOL’s generated from 2011 through 2015 at March 24, 2018 was $26.7 million , and the remaining deferred tax asset related to the Company's state and federal NOL was a tax effected balance of $6.3 million . ASU 2016-09 simplified the treatment for employee share-based compensation by allowing an entity to recognize excess tax benefits in the current period whether or not current taxes payable are reduced. Prior to 2017 the Company could not recognize windfall tax benefits associated with employee share-based compensation because it was in an NOL position and current taxes payable would not be reduced by the excess tax benefits. As a result of ASU 2016-09 the Company recognized excess tax benefits of $2.5 million from share-based compensation from prior years, resulting in cumulative-effect increases to retained earnings and deferred tax assets of approximately $1.0 million . The Company's effective tax rate for the first quarter of fiscal 2018 was 81.1% compared to 36.7% in the first quarter of fiscal 2017 . The rate difference is principally attributable to the differing treatment for financial reporting and income tax reporting of equity compensation. The Company establishes reserves when it is more likely than not that the Company will not realize the full tax benefit of a position. The Company had a reserve of $2.4 million for uncertain tax positions as of March 24, 2018 and December 30, 2017 . The gross unrecognized tax benefits would, if recognized, decrease the Company's effective tax rate. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 24, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | SHARE-BASED COMPENSATION The aggregate number of shares of common stock which may be issued under the Company’s 2008 Omnibus Plan ("Plan") is 2,602,077 plus any common stock that becomes available for issuance pursuant to the reusage provision of the Plan. As of March 24, 2018 , the number of shares available for issuance under the Plan was 536,953 shares. Stock Option Awards A summary of stock option activity under this Plan is as follows: 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 30, 2017 19,435 $ 7.33 1.23 $ 280 Exercised — — — — Options outstanding at March 24, 2018 19,435 $ 7.33 1.00 $ 301 Restricted Stock Compensation/Awards Annually, the Company grants restricted shares to its Board of Directors. The shares become fully vested one year from their grant date. The fair value of each restricted stock grant is based on the closing price of the Company's common stock on the date of grant. The Company amortizes the expense over the service period, which is the fiscal year in which the award is granted. In addition, the Company may grant restricted shares to certain members of management based on their services and contingent upon continued service with the Company. The restricted shares vest over a period of approximately three years from the grant date. The fair value of each restricted stock grant is based on the closing price of the Company's common stock on the date of grant. The following table shows a summary of restricted share grants and expense resulting from the awards: Compensation Expense (thousands, except for shares total) First Quarter Ended, Unrecognized Expense as of, Recipient of Grant Grant Date Restricted Shares March 24, 2018 March 25, 2017 March 24, 2018 December 30, 2017 Board of Directors April, 2017 14,980 $ 66 $ 66 $ — $ — Members of Management January, 2016 43,208 21 24 80 101 Members of Management February, 2017 146,564 99 93 742 841 Members of Management February, 2018 116,958 122 285 1,648 1,770 Chief Executive Officer February, 2017 500,000 511 174 1,912 2,423 In February 2017, as part of Mr. Recatto's employment agreement, the Company granted a restricted stock award of 500,000 shares of common stock, which vests through January 2021 in an amount based on the vesting table below, with the common stock price increase to be determined based on the increase in the price of the Company’s common stock (if any) from the closing price of the common stock as reported by Nasdaq on the employment commencement date ( $15.00 ) and the common stock price on the potential vesting date (determined by using the weighted average closing price of a share of the Company's common stock for the 90-day period ending on the vesting date). If the stock price does not increase by $5.00 , then no shares shall vest. During the first quarter of fiscal 2018, the Company recorded approximately $0.5 million of compensation expense, which includes $ 0.2 million of expense from the recognition of an accelerated vesting, related to this award. In the future, the Company expects to recognize compensation expense of approximately $1.9 million over the remaining requisite service period, which ends January 31, 2021. The fair value of this restricted stock award as of the grant date was estimated using a Monte Carlo simulation model. Key assumptions used in the Monte Carlo simulation to estimate the grant date fair value of this award are a risk-free rate of 1.70% , expected dividend yield of zero , and an expected volatility assumption of 41.73% . Vesting Table Increase in Stock Price From the Employment Commencement Date to the Vesting Date Total percentage of Restricted Stock Shares to Be Vested 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% Provision for possible accelerated vesting of award If the average closing price of the Company's common stock increases by the marginal levels set forth in the above vesting table for any consecutive 180 day period between the award date and final vesting date, Mr. Recatto shall become vested in 50% of the corresponding total percentage of restricted shares earned on the last day of the 180 day period. On March 14, 2018, the weighted average closing price of the Company's common stock met the 25% marginal level and Mr. Recatto became fully vested in half of the 125,000 vested shares. The following table summarizes the restricted stock activity for the period ended March 24, 2018 : Restricted Stock (Nonvested Shares) Number of Shares Weighted Average Grant-Date Fair Value Per Share Nonvested shares outstanding at December 30, 2017 685,999 $ 14.52 Granted 116,957 20.35 Vested (134,730 ) 14.42 Nonvested shares outstanding at March 24, 2018 668,226 $ 15.92 Employee Stock Purchase Plan As of March 24, 2018 , the Company had reserved 145,204 shares of common stock available for purchase under the Employee Stock Purchase Plan of 2008 . In the first quarter of fiscal 2018 , employees purchased 4,822 shares of the Company’s common stock with a weighted average fair market value of $21.90 per share. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 24, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following table reconciles the number of shares outstanding for the first quarters of fiscal 2018 and 2017 , respectively, to the number of weighted average basic shares outstanding and the number of weighted average diluted shares outstanding for the purposes of calculating basic and diluted earnings per share: First Quarter Ended, (Thousands) March 24, 2018 March 25, 2017 Net (loss) income $ (102 ) $ 4,817 Less: Income attributable to noncontrolling interest 18 53 Net (loss) income attributable to Heritage-Crystal Clean, Inc. available to common stockholders $ (120 ) $ 4,764 Weighted average basic shares outstanding 22,962 22,353 Dilutive shares from share–based compensation plans — 539 Weighted average diluted shares outstanding 22,962 22,892 Number of anti–dilutive potentially issuable shares excluded from diluted shares outstanding 170 — Net (loss) income per share: basic $ (0.01 ) $ 0.21 Net (loss) income per share: diluted $ (0.01 ) $ 0.21 |
Other Expense (Income) - Net
Other Expense (Income) - Net | 3 Months Ended |
Mar. 24, 2018 | |
Other Income and Expenses [Abstract] | |
Other Expense (Income) - Net | OTHER EXPENSE (INCOME) - NET Other expense (income) of $0.4 million for the first quarter of fiscal 2018 primarily represents $0.3 million of site closure costs for a facility in Wilmington, DE. Other expense (income) for the first quarter of fiscal 2017 included a gain of $5.1 million as a result of having received a partial award for a claim made in arbitration related to our acquisition of FCC Environmental, LLC and International Petroleum Corp. of Delaware in 2014. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 24, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Pursuant to the Heritage-Crystal Clean, Inc. Omnibus Incentive Plan of 2008, on April 13, 2018, the Company granted 350,000 shares of restricted stock to certain members of Management as part of a Special Incentive Program. The number of shares granted may be increased up to 612,500 shares depending on the Company’s level of performance with regard to certain market conditions. Between zero and 612,500 shares will vest on April 13, 2022, depending on the satisfaction of certain service and market conditions. On May 3, 2018, the Company purchased the assets of Products Plus, Inc. and AO Holding-Kansas City, LLC (collectively "PPI") pursuant to an Asset Purchase Agreement. The Company purchased the assets of PPI to expand the Company’s market share in the collection, recycling, and sales of a full line of antifreeze products. The purchase price was set at $5.9 million subject to certain adjustments, including a working capital adjustment and a contingent consideration provision. The Company initially paid $4.2 million of cash at closing. The results of PPI will be consolidated into the Company’s Environmental Services segment. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 24, 2018 | |
Accounting Policies [Abstract] | |
Fiscal Period | The Company’s fiscal year ends on the Saturday closest to December 31. The most recent fiscal year ended on December 30, 2017 . Each of the Company's first three fiscal quarters consists of twelve weeks while the last fiscal quarter consists of sixteen or seventeen weeks. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Standard Issuance Date Description Our Effective Date Effect on the Financial Statements ASU 2016-02 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. The Company anticipates that implementation of this standard will result in an increase to assets and an increase to liabilities. To date, certain personnel have attended technical training concerning this new lease accounting standard. Recently Issued Accounting Standards Adopted Standard Issuance Date Description 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 On December 31, 2017, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method. We recognized the cumulative effect as an adjustment to our opening balance of retained earnings. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Recently Issued Accounting Pronouncements | Effective December 31, 2017, we adopted the requirements of Topic 606. The cumulative effects of the changes made to our statement of income and balance sheet were as follows: For the Period ended March 24, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change (thousands) Higher/(Lower) Statement of Income Service revenues $ 54,137 $ 54,106 $ 31 Total revenues 83,147 83,116 31 Operating (loss) income (293 ) (324 ) 31 (Loss) income before income taxes (538 ) (569 ) 31 (Benefit from) provision for income taxes (436 ) (461 ) 25 Net (loss) income (102 ) (108 ) 6 Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders $ (120 ) $ (126 ) $ 6 March 24, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change (thousands) Higher/(Lower) Balance Sheet Contract liabilities - net $ 237 $ — $ 237 Total Current Liabilities 41,081 40,844 237 Deferred income taxes 9,170 9,145 25 Total Liabilities 79,065 78,803 262 Retained earnings 40,971 41,233 (262 ) Total Heritage-Crystal Clean, Inc. Stockholders' Equity 234,737 234,999 (262 ) Total Equity $ 235,453 $ 235,715 $ (262 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Major Lines | The following table disaggregates our revenue by major lines: For the first quarter ended March 24, 2018 Total Net Sales by Major Lines of Business (thousands) Environmental Services Oil Business Total Parts cleaning, containerized waste, & related products/services $ 39,615 $ — $ 39,615 Vacuum Services & Wastewater Treatment 11,847 — 11,847 Antifreeze Business 3,459 — 3,459 Field Services 2,155 — 2,155 Environmental Services - Other 400 — 400 Re-refinery Product Sales — 20,485 20,485 Oil Collection Services & RFO — 4,017 4,017 Oil Filter Business — 1,077 1,077 Revenues from Contracts with Customers 57,476 25,579 83,055 Other Revenue — 92 92 Total Revenues $ 57,476 $ 25,671 $ 83,147 |
Contract Assets and Contract Liabilities from Contracts with Customers | The following table provides information about contract assets and contract liabilities from contracts with customers: (thousands) March 24, 2018 December 31, 2017 Contract assets $ 44 $ 59 Contract liabilities 281 327 Contract liabilities - net $ 237 $ 268 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Accounts Receivable, Net [Abstract] | |
Schedule of Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable consisted of the following: (Thousands) March 24, December 30, Trade $ 44,072 $ 43,301 Less: allowance for doubtful accounts (1,923 ) (1,881 ) Trade - net 42,149 41,420 Related parties 2,042 1,906 Other 2,692 2,165 Total accounts receivable - net $ 46,883 $ 45,491 The following table provides the changes in the Company’s allowance for doubtful accounts for the first quarter ended March 24, 2018 , and the fiscal year ended December 30, 2017 : For the Quarter Ended, For the Fiscal Year Ended, (Thousands) March 24, December 30, Balance at beginning of period $ 1,881 $ 2,176 Provision for bad debts 286 402 Accounts written off, net of recoveries (244 ) (697 ) Balance at end of period $ 1,923 $ 1,881 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The carrying value of inventory consisted of the following: (Thousands) March 24, December 30, Used oil and processed oil $ 8,062 $ 5,788 Solvents and solutions 6,820 6,201 Drums and supplies 4,785 4,430 Machines 3,862 3,679 Other 2,146 1,936 Total inventory 25,675 22,034 Less: machine refurbishing reserve (281 ) (395 ) Total inventory - net $ 25,394 $ 21,639 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant, and Equipment | Property, plant, and equipment consisted of the following: (Thousands) March 24, December 30, Machinery, vehicles, and equipment $ 85,683 $ 85,427 Buildings and storage tanks 69,055 69,009 Land 9,557 9,562 Leasehold improvements 5,468 5,427 Construction in progress 11,280 9,378 Assets held for sale 53 53 Total property, plant and equipment 181,096 178,856 Less: accumulated depreciation (52,592 ) (50,737 ) Property, plant and equipment - net $ 128,504 $ 128,119 (Thousands) March 24, December 30, Equipment at customers $ 69,388 $ 68,234 Less: accumulated depreciation (45,915 ) (44,922 ) Equipment at customers - net $ 23,473 $ 23,312 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table shows changes to our goodwill balances by segment from December 30, 2017, to March 24, 2018: (Thousands) Oil Business Environmental Services Total Goodwill at December 30, 2017 Gross carrying amount $ 3,952 $ 31,580 $ 35,532 Accumulated impairment loss (3,952 ) — (3,952 ) Net book value at December 30, 2017 $ — $ 31,580 $ 31,580 Measurement period adjustments — — — Goodwill at March 24, 2018 Gross carrying amount 3,952 31,580 35,532 Accumulated impairment loss (3,952 ) — (3,952 ) Net book value at March 24, 2018 $ — $ 31,580 $ 31,580 |
Schedule of Intangible Assets | The following is a summary of software and other intangible assets: March 24, 2018 December 30, 2017 (Thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer & supplier relationships $ 23,071 $ 9,565 $ 13,506 $ 23,077 $ 9,027 $ 14,050 Software 4,724 3,954 770 4,724 3,899 825 Non-compete agreements 2,945 2,705 240 2,949 2,617 332 Patents, formulae, and licenses 1,769 657 1,112 1,769 642 1,127 Other 1,348 971 377 1,348 950 398 Total software and intangible assets $ 33,857 $ 17,852 $ 16,005 $ 33,867 $ 17,135 $ 16,732 |
Accounts Payable (Tables)
Accounts Payable (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable | Accounts payable consisted of the following: (Thousands) March 24, December 30, Accounts payable $ 27,488 $ 25,540 Accounts payable - related parties 361 28 Total accounts payable $ 27,849 $ 25,568 |
Debt and Financing Arrangemen31
Debt and Financing Arrangements (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt at March 24, 2018 and December 30, 2017 consisted of the following: (thousands) March 24, 2018 December 30, 2017 Principal amount $ 30,000 $ 30,000 Less: unamortized debt issuance costs 1,186 1,256 Debt less unamortized debt issuance costs $ 28,814 $ 28,744 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment results for the first quarters ended March 24, 2018 , and March 25, 2017 were as follows: First Quarter Ended, March 24, 2018 (Thousands) Environmental Services Oil Business Corporate and Consolidated Revenues Product revenues $ 6,444 $ 22,566 $ — $ 29,010 Service revenues 51,032 3,105 — 54,137 Total revenues $ 57,476 $ 25,671 $ — $ 83,147 Operating expenses Operating costs 42,725 25,661 — 68,386 Operating depreciation and amortization 1,490 1,389 — 2,879 Profit (loss) before corporate selling, general, and administrative expenses $ 13,261 $ (1,379 ) $ — $ 11,882 Selling, general, and administrative expenses 11,022 11,022 Depreciation and amortization from SG&A 764 764 Total selling, general, and administrative expenses $ 11,786 $ 11,786 Other expense - net 389 389 Operating (loss) (293) Interest expense – net 245 245 (Loss) before income taxes $ (538 ) First Quarter Ended, March 25, 2017 (Thousands) Environmental Services Oil Business Corporate and Consolidated Revenues Product revenues $ 5,724 $ 21,256 $ — $ 26,980 Service revenues 47,492 5,981 — 53,473 Total revenues $ 53,216 $ 27,237 $ — $ 80,453 Operating expenses Operating costs 36,520 24,770 — 61,290 Operating depreciation and amortization 1,746 1,535 — 3,281 Profit before corporate selling, general, and administrative expenses $ 14,950 $ 932 $ — $ 15,882 Selling, general, and administrative expenses 12,341 12,341 Depreciation and amortization from SG&A 851 851 Total selling, general, and administrative expenses $ 13,192 $ 13,192 Other (income) - net (5,006) (5,006) Operating income 7,696 Interest expense – net 87 87 Income before income taxes $ 7,609 |
Reconciliation of Assets from Segment to Consolidated | Total assets by segment as of March 24, 2018 and December 30, 2017 were as follows: (Thousands) March 24, 2018 December 30, 2017 Total Assets: Environmental Services $ 133,881 $ 131,457 Oil Business 132,652 129,936 Unallocated Corporate Assets 47,985 53,264 Total $ 314,518 $ 314,657 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity under this Plan is as follows: 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 30, 2017 19,435 $ 7.33 1.23 $ 280 Exercised — — — — Options outstanding at March 24, 2018 19,435 $ 7.33 1.00 $ 301 |
Schedule of Restricted Stock Unit Activity | The following table summarizes the restricted stock activity for the period ended March 24, 2018 : Restricted Stock (Nonvested Shares) Number of Shares Weighted Average Grant-Date Fair Value Per Share Nonvested shares outstanding at December 30, 2017 685,999 $ 14.52 Granted 116,957 20.35 Vested (134,730 ) 14.42 Nonvested shares outstanding at March 24, 2018 668,226 $ 15.92 The following table shows a summary of restricted share grants and expense resulting from the awards: Compensation Expense (thousands, except for shares total) First Quarter Ended, Unrecognized Expense as of, Recipient of Grant Grant Date Restricted Shares March 24, 2018 March 25, 2017 March 24, 2018 December 30, 2017 Board of Directors April, 2017 14,980 $ 66 $ 66 $ — $ — Members of Management January, 2016 43,208 21 24 80 101 Members of Management February, 2017 146,564 99 93 742 841 Members of Management February, 2018 116,958 122 285 1,648 1,770 Chief Executive Officer February, 2017 500,000 511 174 1,912 2,423 |
Schedule of Restricted Stock Vesting Percentages | Vesting Table Increase in Stock Price From the Employment Commencement Date to the Vesting Date Total percentage of Restricted Stock Shares to Be Vested 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% |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 24, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table reconciles the number of shares outstanding for the first quarters of fiscal 2018 and 2017 , respectively, to the number of weighted average basic shares outstanding and the number of weighted average diluted shares outstanding for the purposes of calculating basic and diluted earnings per share: First Quarter Ended, (Thousands) March 24, 2018 March 25, 2017 Net (loss) income $ (102 ) $ 4,817 Less: Income attributable to noncontrolling interest 18 53 Net (loss) income attributable to Heritage-Crystal Clean, Inc. available to common stockholders $ (120 ) $ 4,764 Weighted average basic shares outstanding 22,962 22,353 Dilutive shares from share–based compensation plans — 539 Weighted average diluted shares outstanding 22,962 22,892 Number of anti–dilutive potentially issuable shares excluded from diluted shares outstanding 170 — Net (loss) income per share: basic $ (0.01 ) $ 0.21 Net (loss) income per share: diluted $ (0.01 ) $ 0.21 |
Organization and Nature of Op35
Organization and Nature of Operations (Details) | 3 Months Ended |
Mar. 24, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Cumulative Effect of the Changes for Topic 606 Adoption (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 | |
Statement of Income | |||
Service revenues | $ 54,137 | $ 53,473 | |
Total revenues | 83,147 | 80,453 | |
Operating (loss) income | (293) | 7,696 | |
(Loss) income before income taxes | (538) | 7,609 | |
(Benefit from) provision for income taxes | (436) | 2,792 | |
Net (loss) income | (102) | 4,817 | |
Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders | (120) | $ 4,764 | |
Balance Sheet | |||
Contract liabilities - net | 237 | $ 0 | |
Total Current Liabilities | 41,081 | 40,431 | |
Deferred income taxes | 9,170 | 9,556 | |
Total Liabilities | 79,065 | 78,731 | |
Retained earnings | 40,971 | 41,359 | |
Total Heritage-Crystal Clean, Inc. Stockholders' Equity | 234,737 | 235,228 | |
Total Equity | 235,453 | $ 235,926 | |
Balances Without Adoption of Topic 606 | |||
Statement of Income | |||
Service revenues | 54,106 | ||
Total revenues | 83,116 | ||
Operating (loss) income | (324) | ||
(Loss) income before income taxes | (569) | ||
(Benefit from) provision for income taxes | (461) | ||
Net (loss) income | (108) | ||
Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders | (126) | ||
Balance Sheet | |||
Contract liabilities - net | 0 | ||
Total Current Liabilities | 40,844 | ||
Deferred income taxes | 9,145 | ||
Total Liabilities | 78,803 | ||
Retained earnings | 41,233 | ||
Total Heritage-Crystal Clean, Inc. Stockholders' Equity | 234,999 | ||
Total Equity | 235,715 | ||
ASU 2014-09 | Effect of Change Higher/(Lower) | |||
Statement of Income | |||
Service revenues | 31 | ||
Total revenues | 31 | ||
Operating (loss) income | 31 | ||
(Loss) income before income taxes | 31 | ||
(Benefit from) provision for income taxes | 25 | ||
Net (loss) income | 6 | ||
Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders | 6 | ||
Balance Sheet | |||
Contract liabilities - net | 237 | ||
Total Current Liabilities | 237 | ||
Deferred income taxes | 25 | ||
Total Liabilities | 262 | ||
Retained earnings | (262) | ||
Total Heritage-Crystal Clean, Inc. Stockholders' Equity | (262) | ||
Total Equity | $ (262) |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Major Lines (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | $ 83,055 | |
Other Revenue | 92 | |
Total revenues | $ 83,147 | $ 80,453 |
Payment term | 30 days | |
Parts cleaning, containerized waste, & related products/services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | $ 39,615 | |
Vacuum Services & Wastewater Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 11,847 | |
Antifreeze Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 3,459 | |
Field Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 2,155 | |
Environmental Services - Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 400 | |
Re-refinery Product Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 20,485 | |
Oil Collection Services & RFO | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 4,017 | |
Oil Filter Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 1,077 | |
Environmental Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 57,476 | |
Other Revenue | 0 | |
Total revenues | 57,476 | |
Environmental Services | Parts cleaning, containerized waste, & related products/services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 39,615 | |
Environmental Services | Vacuum Services & Wastewater Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 11,847 | |
Environmental Services | Antifreeze Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 3,459 | |
Environmental Services | Field Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 2,155 | |
Environmental Services | Environmental Services - Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 400 | |
Environmental Services | Re-refinery Product Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Environmental Services | Oil Collection Services & RFO | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Environmental Services | Oil Filter Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 25,579 | |
Other Revenue | 92 | |
Total revenues | 25,671 | |
Oil Business | Parts cleaning, containerized waste, & related products/services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | Vacuum Services & Wastewater Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | Antifreeze Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | Field Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | Environmental Services - Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 0 | |
Oil Business | Re-refinery Product Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 20,485 | |
Oil Business | Oil Collection Services & RFO | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | 4,017 | |
Oil Business | Oil Filter Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from Contracts with Customers | $ 1,077 |
Revenue - Contract Assets and C
Revenue - Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Dec. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 44 | $ 59 |
Contract liabilities | 281 | 327 |
Contract liabilities - net | 237 | $ 268 |
Revenue recognized previously included in contract liabilities | $ 31 |
Accounts Receivable - Component
Accounts Receivable - Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 24, 2018 | Dec. 30, 2017 | Dec. 31, 2016 |
Accounts Receivable, Net [Abstract] | |||
Trade | $ 44,072 | $ 43,301 | |
Less: allowance for doubtful accounts | (1,923) | (1,881) | $ (2,176) |
Trade - net | 42,149 | 41,420 | |
Related parties | 2,042 | 1,906 | |
Other | 2,692 | 2,165 | |
Total accounts receivable - net | $ 46,883 | $ 45,491 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of period | $ 1,881 | $ 2,176 | $ 2,176 |
Provision for bad debts | 286 | $ (28) | 402 |
Accounts written off, net of recoveries | (244) | (697) | |
Balance at end of period | $ 1,923 | $ 1,881 |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | ||
Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 | |
Inventory Disclosure [Abstract] | |||
Used oil and processed oil | $ 8,062,000 | $ 5,788,000 | |
Solvents and solutions | 6,820,000 | 6,201,000 | |
Drums and supplies | 4,785,000 | 4,430,000 | |
Machines | 3,862,000 | 3,679,000 | |
Other | 2,146,000 | 1,936,000 | |
Total inventory | 25,675,000 | 22,034,000 | |
Less: machine refurbishing reserve | (281,000) | (395,000) | |
Total inventory - net | 25,394,000 | $ 21,639,000 | |
Inventory write-down | $ 0 | $ 0 |
Property, Plant, and Equipmen42
Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Machinery, vehicles, and equipment | $ 85,683 | $ 85,427 | |
Buildings and storage tanks | 69,055 | 69,009 | |
Land | 9,557 | 9,562 | |
Leasehold improvements | 5,468 | 5,427 | |
Construction in progress | 11,280 | 9,378 | |
Assets held for sale | 53 | 53 | |
Total property, plant and equipment | 181,096 | 178,856 | |
Less: accumulated depreciation | (52,592) | (50,737) | |
Property, plant and equipment - net | 128,504 | 128,119 | |
Equipment at customers | 69,388 | 68,234 | |
Less: accumulated depreciation | (45,915) | (44,922) | |
Equipment at customers - net | 23,473 | $ 23,312 | |
Depreciation expense | $ 2,900 | $ 3,400 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended | |
Mar. 24, 2018USD ($)reporting_unit | Dec. 30, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of reporting units | reporting_unit | 2 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 35,532 | $ 35,532 |
Accumulated impairment loss | (3,952) | (3,952) |
Goodwill [Roll Forward] | ||
Net book value, beginning balance | 31,580 | |
Measurement period adjustments | 0 | |
Net book value, ending balance | 31,580 | |
Oil Business | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 3,952 | 3,952 |
Accumulated impairment loss | (3,952) | (3,952) |
Goodwill [Roll Forward] | ||
Net book value, beginning balance | 0 | |
Measurement period adjustments | 0 | |
Net book value, ending balance | 0 | |
Environmental Services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 31,580 | 31,580 |
Accumulated impairment loss | 0 | $ 0 |
Goodwill [Roll Forward] | ||
Net book value, beginning balance | 31,580 | |
Measurement period adjustments | 0 | |
Net book value, ending balance | $ 31,580 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets - Summary of Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 33,857 | $ 33,867 | |
Accumulated Amortization | 17,852 | 17,135 | |
Net Carrying Amount | 16,005 | 16,732 | |
Amortization of intangible assets | 700 | $ 800 | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
2,018 | 2,300 | ||
2,019 | 2,600 | ||
2,020 | 2,500 | ||
2,021 | 2,400 | ||
2,022 | 2,100 | ||
Customer & supplier relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 23,071 | 23,077 | |
Accumulated Amortization | 9,565 | 9,027 | |
Net Carrying Amount | $ 13,506 | 14,050 | |
Useful life | 10 years | ||
Software | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 4,724 | 4,724 | |
Accumulated Amortization | 3,954 | 3,899 | |
Net Carrying Amount | $ 770 | 825 | |
Useful life | 9 years | ||
Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 2,945 | 2,949 | |
Accumulated Amortization | 2,705 | 2,617 | |
Net Carrying Amount | $ 240 | 332 | |
Useful life | 5 years | ||
Patents, formulae, and licenses | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,769 | 1,769 | |
Accumulated Amortization | 657 | 642 | |
Net Carrying Amount | $ 1,112 | 1,127 | |
Useful life | 15 years | ||
Other | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,348 | 1,348 | |
Accumulated Amortization | 971 | 950 | |
Net Carrying Amount | $ 377 | $ 398 | |
Useful life | 6 years |
Accounts Payable (Details)
Accounts Payable (Details) - USD ($) $ in Thousands | Mar. 24, 2018 | Dec. 30, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 27,488 | $ 25,540 |
Accounts payable - related parties | 361 | 28 |
Total accounts payable | $ 27,849 | $ 25,568 |
Debt and Financing Arrangemen46
Debt and Financing Arrangements - Narrative (Details) - USD ($) | Feb. 21, 2017 | Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 |
Debt Instrument [Line Items] | ||||
Payments of debt issuance costs | $ 0 | $ 1,051,000 | ||
Unamortized debt issuance costs | 1,186,000 | $ 1,256,000 | ||
Amortization of Debt Issuance Costs | 100,000 | |||
Interest costs capitalized, less than $0.1 million for the second quarter and first half of 2016 | $ 0 | |||
Weighted average interest rate | 3.40% | 3.50% | ||
Letters of credit outstanding | $ 1,200,000 | 900,000 | ||
Current borrowing capacity | 63,800,000 | $ 64,100,000 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest costs incurred | $ 300,000 | $ 500,000 | ||
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Minimum interest coverage ratio | 3.5 | |||
Maximum total leverage ratio | 3 | |||
Aggregate consideration limit | $ 10,000,000 | |||
Leverage ratio at time of acquisition | 3.25 | |||
Capital expenditures covenant limit | $ 100,000,000 | |||
Percentage of EBITDA | 35.00% | |||
Payments of debt issuance costs | 1,100,000 | |||
Capitalized debt issuance costs | 1,100,000 | |||
Credit Agreement | Bank Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 95,000,000 | |||
Credit Agreement | Bank Credit Facility | Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Credit Agreement | Bank Credit Facility | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Credit Agreement | Bank Credit Facility | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Credit Agreement | Bank Credit Facility | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Credit Agreement | Bank Credit Facility | Bank of America's Prime Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
Credit Agreement | Bank Credit Facility | Bank of America's Prime Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Credit Agreement | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 | |||
Credit Agreement | Revolving Loan Portion | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 65,000,000 | |||
Prior Credit Agreement [Member] | Selling, General, and Administrative Expenses | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 200,000 |
Debt and Financing Arrangemen47
Debt and Financing Arrangements - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 24, 2018 | Dec. 30, 2017 |
Debt Disclosure [Abstract] | ||
Principal amount | $ 30,000 | $ 30,000 |
Less: unamortized debt issuance costs | 1,186 | 1,256 |
Debt less unamortized debt issuance costs | $ 28,814 | $ 28,744 |
Segment Information - Operating
Segment Information - Operating Segment Results (Details) $ in Thousands | 3 Months Ended | ||
Mar. 24, 2018USD ($)segment | Sep. 09, 2017USD ($) | Mar. 25, 2017USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Revenues | |||
Product revenues | $ 29,010 | $ 26,980 | |
Service revenues | 54,137 | 53,473 | |
Total revenues | 83,147 | 80,453 | |
Operating expenses | |||
Operating costs | 68,386 | 61,290 | |
Operating depreciation and amortization | 2,879 | 3,281 | |
Profit (loss) before corporate selling, general, and administrative expenses | 11,882 | 15,882 | |
Selling, general, and administrative expenses | 11,022 | 12,341 | |
Depreciation and amortization from SG&A | 764 | 851 | |
Total selling, general, and administrative expenses | 11,786 | 13,192 | |
Other expense (income) - net | 389 | (5,006) | |
Operating (loss) income | (293) | 7,696 | |
Interest expense – net | 245 | 87 | |
(Loss) income before income taxes | (538) | 7,609 | |
Segments | |||
Operating expenses | |||
Operating depreciation and amortization | |||
Corporate and Eliminations | |||
Revenues | |||
Product revenues | 0 | 0 | |
Service revenues | 0 | 0 | |
Total revenues | 0 | 0 | |
Operating expenses | |||
Operating costs | 0 | 0 | |
Operating depreciation and amortization | 0 | 0 | |
Profit (loss) before corporate selling, general, and administrative expenses | 0 | 0 | |
Selling, general, and administrative expenses | 11,022 | 12,341 | |
Depreciation and amortization from SG&A | 764 | 851 | |
Total selling, general, and administrative expenses | 11,786 | 13,192 | |
Other expense (income) - net | 389 | (5,006) | |
Interest expense – net | 245 | 87 | |
Environmental Services | |||
Revenues | |||
Total revenues | 57,476 | ||
Environmental Services | Segments | |||
Revenues | |||
Product revenues | 6,444 | 5,724 | |
Service revenues | 51,032 | 47,492 | |
Total revenues | 57,476 | 53,216 | |
Operating expenses | |||
Operating costs | 42,725 | 36,520 | |
Operating depreciation and amortization | 1,490 | 1,746 | |
Profit (loss) before corporate selling, general, and administrative expenses | 13,261 | 14,950 | |
Oil Business | |||
Revenues | |||
Total revenues | 25,671 | ||
Oil Business | Segments | |||
Revenues | |||
Product revenues | 22,566 | 21,256 | |
Service revenues | 3,105 | 5,981 | |
Total revenues | 25,671 | 27,237 | |
Operating expenses | |||
Operating costs | 25,661 | 24,770 | |
Operating depreciation and amortization | 1,389 | 1,535 | |
Profit (loss) before corporate selling, general, and administrative expenses | $ (1,379) | $ 932 |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | Mar. 24, 2018 | Dec. 30, 2017 |
Segment Reporting Information [Line Items] | ||
Assets | $ 314,518 | $ 314,657 |
Segments | Environmental Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 133,881 | 131,457 |
Segments | Oil Business | ||
Segment Reporting Information [Line Items] | ||
Assets | 132,652 | 129,936 |
Unallocated Corporate Assets | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 47,985 | $ 53,264 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 24, 2018 | Dec. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining amount committed | $ 16.3 | $ 15.6 |
Loss contingency accrual | $ 4 | $ 4.5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 |
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax asset, state and federal NOL | $ 6,300 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect increase due to adoption of ASU | $ (268) | |||
Effective tax rate | 81.10% | 36.70% | ||
Reserve balance | $ 2,400 | 2,400 | ||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect increase due to adoption of ASU | $ (268) | |||
Tax years 2011 - 2017 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss | 44,700 | |||
Tax year 2011 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss | 13,700 | |||
Tax years 2012 - 2015 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss | 13,000 | |||
Tax years 2011 - 2015 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss | 26,700 | |||
ASU 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Excess tax benefits from share-based compensation | $ 2,500 | |||
Cumulative-effect increase to deferred tax assets | 1,000 | |||
ASU 2016-09 | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect increase due to adoption of ASU | $ 1,000 |
Share-based Compensation - Stoc
Share-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 24, 2018 | Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of shares authorized | 2,602,077 | |
Number of shares available for grant | 536,953 | |
Number of Options Outstanding | ||
Options outstanding at Beginning of Period (in shares) | 19,435 | |
Exercised (in shares) | 0 | |
Options outstanding at End of Period (in shares) | 19,435 | 19,435 |
Weighted Average Exercise Price | ||
Options outstanding at Beginning of Period (in dollars per share) | $ 7.33 | |
Exercised (in dollars per share) | 0 | |
Options outstanding at End of Period (in dollars per share) | $ 7.33 | $ 7.33 |
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value as of Date Listed | ||
Weighted average remaining contractual term (in years) | 1 year | 1 year 2 months 23 days |
Aggregate intrinsic value as of date listed | $ 301 | $ 280 |
Share-based Compensation - Rest
Share-based Compensation - Restricted Stock Compensation/Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 14, 2018 | Feb. 28, 2018 | Apr. 30, 2017 | Feb. 28, 2017 | Jan. 31, 2016 | Mar. 24, 2018 | Mar. 25, 2017 | Dec. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 116,957 | |||||||
Vested (in shares) | 134,730 | |||||||
Mr. Recatto | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Closing share price as of employment commencement date (in dollars per share) | $ 15 | |||||||
Restricted stock | Board of Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period (in years) | 1 year | |||||||
Restricted stock | Board of Directors | April, 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 14,980 | |||||||
Compensation Expense | $ 66 | $ 66 | ||||||
Unrecognized compensation expense | $ 0 | $ 0 | ||||||
Restricted stock | Members of Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period (in years) | 3 years | |||||||
Restricted stock | Members of Management | January, 2016 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 43,208 | |||||||
Compensation Expense | $ 21 | 24 | ||||||
Unrecognized compensation expense | 80 | 101 | ||||||
Restricted stock | Members of Management | February, 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 146,564 | |||||||
Compensation Expense | 99 | 93 | ||||||
Unrecognized compensation expense | 742 | 841 | ||||||
Restricted stock | Members of Management | February, 2018 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 116,958 | |||||||
Compensation Expense | 122 | 285 | ||||||
Unrecognized compensation expense | 1,648 | 1,770 | ||||||
Restricted stock | Chief Executive Officer | February, 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 500,000 | |||||||
Compensation Expense | 511 | $ 174 | ||||||
Unrecognized compensation expense | 1,912 | $ 2,423 | ||||||
Restricted stock | Mr. Recatto | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Compensation Expense | 500 | |||||||
Accelerated vesting compensation expense | $ 200 | |||||||
Unrecognized compensation expense | $ 1,900 | |||||||
Grants in period (in shares) | 500,000 | |||||||
Vesting threshold (in dollars per share) | $ 5 | |||||||
Shares vested upon achievement of share price threshold (in shares) | 0 | |||||||
Risk-free rate | 1.70% | |||||||
Expected dividend yield | 0.00% | |||||||
Expected volatility rate | 41.73% | |||||||
Restricted stock | Mr. Recatto | Less than $5 per share increase | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period (in years) | 180 days | |||||||
Vesting percentage | 0.00% | 50.00% | ||||||
Restricted stock | Mr. Recatto | $5 per share increase | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 25.00% | 25.00% | ||||||
Vested (in shares) | 125,000 |
Share-based Compensation - Re54
Share-based Compensation - Restricted Stock Vesting Schedule by Percentage (Details) - Mr. Recatto - Restricted stock - $ / shares | Mar. 14, 2018 | Feb. 28, 2017 | Mar. 24, 2018 |
Less than $5 per share increase | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in stock price from employment commencement date (in dollars per share) | $ 5 | ||
Total percentage of Restricted Stock Shares to Be Vested | 0.00% | 50.00% | |
$5 per share increase | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in stock price from employment commencement date (in dollars per share) | $ 5 | ||
Total percentage of Restricted Stock Shares to Be Vested | 25.00% | 25.00% | |
$10 per share increase | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in stock price from employment commencement date (in dollars per share) | $ 10 | ||
Total percentage of Restricted Stock Shares to Be Vested | 50.00% | ||
$15 per share increase | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in stock price from employment commencement date (in dollars per share) | $ 15 | ||
Total percentage of Restricted Stock Shares to Be Vested | 75.00% | ||
$20 or more per share increase | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in stock price from employment commencement date (in dollars per share) | $ 20 | ||
Total percentage of Restricted Stock Shares to Be Vested | 100.00% |
Share-based Compensation - Nonv
Share-based Compensation - Nonvested Restricted Stock (Details) | 3 Months Ended |
Mar. 24, 2018$ / sharesshares | |
Number of Shares | |
Nonvested shares outstanding at Beginning of Period (in shares) | shares | 685,999 |
Granted (in shares) | shares | 116,957 |
Vested (in shares) | shares | (134,730) |
Nonvested shares outstanding at End of Period (in shares) | shares | 668,226 |
Weighted Average Grant-Date Fair Value Per Share | |
Nonvested shares outstanding at Beginning of Period (in dollars per share) | $ / shares | $ 14.52 |
Granted (in dollars per share) | $ / shares | 20.35 |
Vested (in dollars per share) | $ / shares | 14.42 |
Nonvested shares outstanding at End of Period (in dollars per share) | $ / shares | $ 15.92 |
Share-based Compensation - Empl
Share-based Compensation - Employee Stock Purchase Plan (Details) | 3 Months Ended |
Mar. 24, 2018$ / sharesshares | |
Common stock | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |
Issuance of common stock – ESPP (in shares) | 4,822 |
Employee Stock Purchase Plan of 2008 | Employee stock | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |
Shares available employee stock purchase plan (in shares) | 145,204 |
Weighted average fair value per share ESPP (in dollars per share) | $ / shares | $ 21.90 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (102) | $ 4,817 |
Less: Income attributable to noncontrolling interest | 18 | 53 |
Net (loss) income attributable to Heritage-Crystal Clean, Inc. common stockholders | $ (120) | $ 4,764 |
Weighted average basic shares outstanding (in shares) | 22,962 | 22,353 |
Dilutive shares from share–based compensation plans (in shares) | 0 | 539 |
Weighted average diluted shares outstanding (in shares) | 22,962 | 22,892 |
Number of anti–dilutive potentially issuable shares excluded from diluted shares outstanding (in shares) | 170 | 0 |
Net (loss) income per share: basic (in dollars per share) | $ (0.01) | $ 0.21 |
Net (loss) income per share: diluted (in dollars per share) | $ (0.01) | $ 0.21 |
Other Expense (Income) - Net (D
Other Expense (Income) - Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 24, 2018 | Mar. 25, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Other expense (income) | $ 389 | $ (5,006) |
Partial award | $ 5,100 | |
Facility closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Other expense (income) | $ 300 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | May 03, 2018 | Apr. 13, 2018 | Mar. 24, 2018 |
Subsequent Event [Line Items] | |||
Number of shares available for grant | 536,953 | ||
Subsequent event | |||
Subsequent Event [Line Items] | |||
Purchase price | $ 5.9 | ||
Initial payment | $ 4.2 | ||
Subsequent event | Restricted stock | Members of Management | Omnibus Incentive Plan of 2008 | |||
Subsequent Event [Line Items] | |||
Grants in period (in shares) | 350,000 | ||
Number of shares available for grant | 612,500 | ||
Subsequent event | Restricted stock | Members of Management | Omnibus Incentive Plan of 2008 | Minimum | |||
Subsequent Event [Line Items] | |||
Shares expected to vested | 0 | ||
Subsequent event | Restricted stock | Members of Management | Omnibus Incentive Plan of 2008 | Maximum | |||
Subsequent Event [Line Items] | |||
Shares expected to vested | 612,500 |