Used oil re-refiner, Heritage-Crystal Clean, last Thursday announced results for the first quarter of fiscal 2013, which ended March 23, 2013. Revenue increased 18.8% to $60.0 million, compared to $50.5 million in the first quarter of fiscal 2012. This increase was due to organic growth in the Environmental Services segment and the ramp up of the Oil Business segment. Heritage-Crystal Clean's Oil Business segment includes used oil collection and re-refining activities.

 

The Company's Founder, President, and Chief Executive Officer, Joe Chalhoub, commented, "During the first quarter of 2013 the negative impact of unfavorable commodity prices continued to weigh on the profitability of our Oil Business segment and on our overall profitability. Base oil pricing continued to decline during most of the quarter. Fortunately, we believe that the unsustainable economic conditions present in the industry during the first quarter have begun to subside."

 

Chalhoub added: "We're happy to report that our board of directors has approved our plan to expand the annual input capacity of our Indianapolis, Indiana re-refinery by 25 million gallons. This expansion will bring the nameplate capacity of the facility from its current 50 million gallon level up to 75 million gallons. We expect the additional capacity to be added incrementally over the remainder of 2013 and the first half of 2014 with the entire amount of additional capacity in place by mid-2014. Completion of the expansion project will allow us to further increase the efficiency of our re-refining operation."

 

Heritage-Crystal Clean had previously announced this past February in its 2012 full year and fourth quarter report that it obtained the required air permit to allow the company to expand the annual capacity at its Indianapolis, Indiana re-refinery from 50 million to 75 million gallons of used oil, allowing the company to produce 45 million gallons of API Group II lube base oil, or about 3,000 barrels per day. For further details, please refer to the story Heritage-Crystal Clean to Increase Capacity 50% in the March 4, 2013 issue of the OEM/Lube News.

Mark DeVita, Chief Financial Officer stated, "We are pleased with the double digit revenue growth and continued margin improvement in our Environmental Services segment. The Environmental Services segment delivered a margin before corporate SG&A of 23.5% (or 23.3% excluding the impact of our new Mirachem subsidiary) compared to 22.8% in the fourth quarter of 2012."'

DeVita added: "Negative base oil pricing trends were a headwind during the first quarter. The average spot market price for the grade of base oil we produce declined approximately 9% for the first quarter compared to the fourth quarter of 2012. This follows declines in both the third and fourth quarters of 2012."