HCCI - Earnings call transcript Q4 2019 | Heritage-Crystal Clean, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Heritage-Crystal Clean, Incorporated Fourth Quarter 2019 Earnings Conference Call. Today's call is being recorded. At this time, all callers' microphones are muted and you'll have an opportunity at the end of the presentation to ask questions. Instructions will be provided at that time for you to queue up your questions. We ask that all callers limit themselves to one or two questions.

we today comments forward-looking. the of will are make Some would, estimate, anticipate, may, will Generally, identify result, aim, could, statements. continue, similar expect, forward-looking likely be, the words will believe, intend, expressions should, plan, will and project,

should of and uncertainties statements cause that of include from not anticipated as a We are you beyond actual These update of statements. forward-looking some forward-looking materially our could by differ this representing variety uncertainties these speak of control. undertake which after call. to to future. on These our today rely a number views those involve risks These results statements risks obligation these factors, and the as statements them and in no

annual release as as our these description may SEC Investor report Relations be on Please results. section on our posted of visiting that obtained of the from refer a to Form our our the well our SEC more website. earnings affect website of Copies in filings, for our factors detailed or may risk XX-K documents the including

measures see Also, reconciliations these and may and note non-GAAP EBITDA EBITDA, measures amortization, financial measures. taxes, such we before for certain that call and use on depreciation, non-GAAP are to GAAP. adjusted our as earnings website please Please this interest, financial of

information our www.crystal-clean.com. company, about more For please at visit website our

President Mr. Executive Officer; Chief and Officer, are Mr. and Financial Mark DeVita. With the us company from today Recatto; Chief the Brian

Brian this Please At like would sir. turn over time, I Recatto. call to go ahead, the to

Brian Recatto

of detail financial and Mark it full begin with to and to turn Heritage-Crystal our XXXX review quarter I'll earnings results. everyone over provide year-end conference to welcome and brief and then call. our more year fourth quarter Towanda regarding Clean's you, Thank performance a fourth

your questions. Following the Mark's to we up will take lines open comments,

revenue of to and million, -- of of I in million year the $X.X record of loss record share a We an increase or income X.X% of diluted quarter increase we reported of an XXXX. increase an fourth share that quarter of with $XXX.X fourth X.X% full in excited you the $XXX.X to of diluted million million, of reported am revenue million quarter net $X.X year-over-year. share per $X.X net compared $X.XX or $X.XX of

fourth Earnings impacted due which to million the quarter of in an Mark $XX were class-action by discuss XXXX a later. charge will settlement,

or full million $X.XX per share. Our earnings were year diluted $X.X

to now Services Environmental our Turning segment.

of in We the pleased quarter at delivered XX.X% growth the are eighth quarter revenue least we the XXXX. segment. compared marks growth revenue that single-digit to consecutive of This fourth high

aided $X field new related revenue services a were quarter our or revenue which sales new growth. the of added and growth resources field during results large project, revenue XXXX. Part branches contributed to investments X.X was by points Fourth million percentage in to in

million million generated operating those and we cost of fiscal $X.X Through incurred from investments. XXXX, in $X.X revenue

New during million and revenue million positions added XXXX $X.X in in collectively $X.X added costs.

healthcare cost, compared by operating detail Environmental will Services along the cost, with ago, higher more which fourth XX.X% in in quarter Mark same disposal fleet Our higher shortly. year a of fell XX.X% to to in XXXX driven quarter the repairs, discuss margin

to The compared oil our fiscal base in in partially by X.X% on to or offset the increase XXXX, volume quarter oil. the a Moving an $X.X increased quarter sold, driven of of base million the of Oil Business was In decrease by the XXXX. fiscal price in revenues Oil gallons fourth selling Business. revenue our fourth increase of

compared the during third by fourth Our year base quarter decreased per oil gallon $X.XX of per quarter $X.XX last and the decreased gallon compared to netback to XXXX.

XXXX, XX.X oil million capacity fiscal quarter almost gallons an to million XXX.X% fourth during as we base effectively XX%. operating of at XX.X oil the continued Our gallons base produced increase of re-refinery of of compared

were we pay-for-oil fourth basis, position average as for whole. still weighted quarter a the in a a On

during decreased gallon year. Our quarter for fourth compared to increased quarter the XXXX, of of quarter per third last $X.XX compared $X.XX the to average oil but pay the fourth

the price $X.XX know per oil As increases Virgin producers in $X.XX most announced to posted the major mid-January, in gallon base of you range.

increases have erosion oil While during been slowly, we quarter. these fourth our the implemented recover to see the did begin netback price base experienced

oil However, is posted negatively a will our to at This to of this announced compression. portion pay base the a and quickly oil price decrease. end lower of producers plan spread, decline February, Virgin impact price our recent for recover

be coronavirus. primarily decline the the by the of by negative crude fear price This impact to decrease appears the of driven in price, driven

We prepared the steps level necessary employees and the high to safe, the of deliver to service to our keep the have impact customers HCC. will continuing of to coronavirus are outbreak come our from continue expect monitor to take while

The oil price first X and end widening for quarter, Unfortunately, and stable, No. price oil the which in crude. quarter high the crude the X fall saw between led of contraction fourth price the price No. oil in between crude was of the to spread a of to began a the fuel sulfur during spread of relatively the the as oil.

of oil surprised spread We move present and us and regulation. and crude again between the sulfur into new will cost pricing high are opportunity to between relationship crude the drive we the as high widen oil that sulfur lower. first IMO in believe months has feedstock XXXX our the effective fuel begin choppy an oil deeper year, to fuel post not that few the the We date been completely

integrity an equipment. and From raised the make on for the during the of quarter a XXXX, of establishment inventory officially Beginning we've oil parts of XX million base to annually re-refinery and mechanical of in quarter programs of capacity XXXX progress key to continue quarter the beginning first in the spare gallons XXXX. nameplate approximately perspective, fourth and we our first

support growth momentum to see we to in have XXXX. in to mid segment, slower the single-digit we While we of overall serve organic Services our some growth believe markets have begun high Environmental we enough during

cost taking our of disposal lower are areas fleet. logistics, perspective, margin in to steps and operating the an From we

We margins back up half our of expect to have XXXX. range the XX% in second operating to the

fleet fleet help engaged we our an discipline, management in better our of new an during maintenance Based second a half program, our on year maintenance regarding improved overall the manage preventive and fourth us costs. saw we example, quarter. For fleet increase fleet maintain on to work our last preventive company in the

costs. in to significant should contributed cost, this less lower While this our a increase events long-term, short-term in maintenance overall and result

these we As we incurred to portions at fleet, our turning were leased end-of-life, of the costs when which address work trucks. in the higher-than-expected

our in the that increased costs future. maintenance confident preventive are to will on our focus We lower allow us fleet-related

now With through more fourth us our full quarter financial results Mark walk will in that, year detail.

Mark DeVita

quarter to Thanks, everybody. took resolve a I'd like to Brian, to surcharges. against discussing to settlement related and made claims fuel good us begin we pertaining a the morning, fourth class in litigation in charge action the

became class to Back litigation was waste administrative to less settlement determined most many incur to in Under companies members. into enter the $XX companies, rather faced in the matter. other we fuel one we agreed expenses than claims involving most eventually Like surcharges. XXXX, of industry of cost continue fund it a prudent payments necessary for in with company of those and to litigate million, to attorney fees expenses, for the the deductions this up settlement,

payments fees, payments we on aware are fees claim expectation attorney related million, our less be action analysis settlement, accurate. sure from than and cash including this of, of will Based this actual fees we related to cannot we to other an rates class be settlements to administrative expect $X.X be similar although that

of to XXXX. pursuant amounts settlement of amount owed this we by to make final We are a the expect accrual. Once final adjustment the final end the be fiscal determined million second owed $XX quarter determined, will the will the

$XX $X.XX diluted or of the to this for the quarter. or per to $X.X income payments share This at compares swung diluted a difference loss $X.XX million earlier will actual are time. less per $X.X common shareholders to fourth our extent share be impact that into million; of net of XXXX. income the us attributable to quarter attributable the than year shareholders To of negative cash net in The charge taken common million

per XXXX million, shareholders the to net to settlement fiscal to income $XX.X XXXX. charge, or or was $X.X common diluted of attributable net or share. $X.XX compared per fiscal income common income $X.X $X.XX per share $X.XX diluted million, million share Excluding for for was attributable shareholders Net diluted

net share. settlement diluted charge, $XX.X was shareholders Excluding attributable to per income for year the the or $X.XX common million

million, now field I'll the revenues and million we The to million mainly by recycling or strong services, segment. in $XX.X growth driven was revenue fourth antifreeze our of waste increase In to posted turn compared Services businesses. XXXX. the quarter, the in in quarter Environmental $XX.X fourth of $XX XX.X% containerized Environmental segment Services

quarter. to due $X mainly services of we The million growth project during revenue was our in in field large the which recorded business a

expect improvement. quarter of to record growth volume a is the in both first result revenue this and XXXX. project price, $X.X with business business the approximately while of in containerized slight The to our volume-driven, in waste We our increase recycling antifreeze growth million was related during same increases price

earlier grew branch the fourth after during was the field XX.X% increase revenues from basis $X.X Same primarily due year-over-year was on antifreeze during revenues adjusting The an our this to the in volume business acquisition for Overall, XXXX. during approximately acquisition mentioned same was project quarter. quarter. million of branch quarter. the approximately a the services fourth Revenue X.X% during quarter first we made

Moving $XX.X Environmental quarter. in on, -- profit compared million, before in ago million to fell at corporate year last the to XX% the segment Services $XX.X expense margin to SG&A XX.X%. year compared was Operating XX.X%,

to and cost, items approximately during Brian These operating of headwind. quarter. expectations, margin Our of higher segment basis the disposal cost primarily already discussed, higher-than-expected short due cost repair care health operating in fell resulted fleet XXX margin three and of excess points which

of of to million Oil an of gallons over approximately the we XX.X fourth compared XX%. Business oil sold million fourth during the quarter of increase XXXX, gallons In during segment, XXXX, quarter the base XX.X

in led due XXXX. lower to downtime, costs X.X% shutdown as catalyst was SG&A expense the negative mainly corporate ago quarter. year fourth million points which in XXXX of margin the and lower before the to of period increased Oil percentage to XX.X re-refinery compared $X.X expenses compared less Business in quarter same during well to The as Profit improvement the improved to X.X% segment

in lower employee the talk by at of XX.X% non-management lower $X.X fees partially about expense compared came percentage management and expense professional XX.X%, million, bad ago to up let's corporate overall expense offset higher salaries. from and was debt Next, a SG&A quarter. benefits, services mainly year revenue expense. salaries, But health corporate Overall, as driven SG&A by

to EBITDA company's the in $XX.X million million the The year XXXX for Fourth compared fourth compared of tax for XXXX. XX%, was quarter XX.X% fourth was quarter. to the XXXX. ago $X.X was fiscal EBITDA $X.X quarter in effective compared for $XX.X to income rate quarter million, million, Adjusted

$X.X From during flow debt of perspective, quarter, the on cash was We generated at a in fourth XXXX. from sheet $XX.X in the balance of compared $XX at operations to hand year-over-year. million million. Total million end the cash steady $XX million the remained quarter quarter

deploy cash continue acquisition initiatives, excess to on we will organic We our improve our and our drive growth and for identify potential value feel to help opportunities targets shareholders. business

in fourth segment during conclusion, profitability our our both the results In quarter XXXX. Services in to and we Environmental continue look segments revenue segments the reporting strong and are pleased growth with increased in both

Heritage-Crystal joining interest the I'll Tawanda to I call their today. to now thank Clean. for back your everyone in take us for questions. want Thanks turn to

Operator

of first Our Instructions] line Manthey [Operator with you. Baird. comes question from the Thank David

Your line open. is

David Manthey

morning Hey, good guys.

Brian Recatto

Hey, David. you? are How

Mark DeVita

David. Hi,

David Manthey

I'm well. you. Yes. Thank doing

give there question, you it just catch? in prepared gave in and terms specifics your I Mark, any EBITDA at or think XXXX outlook earlier. I the that growth didn't the didn't end about maybe comments, some catch I right of you of statements revenue general growth Did First margin

Mark DeVita

from and his remarks we on acquisitions, standpoint least that, Brian, subjective is here the a least relative Well, about Yes. part actually, talked at of lot prepared are to at us working in organic an historically.

quarter-to-quarter, how I robust and pieces it's points And see or five can as go We pipeline. have back much you if that would between describe inorganic pretty a to us. to meant less as what percentage

seen get headwinds, standpoint, alluded the almost fleet, continue obviously, high up other on million have to standpoint. we and revenue in some till year. that But can which look it XX% had might if We to year-over-year headwinds, I the I at digit care into take margin growth the health But touched we some $X us was anyway, we second we think dig QX. half to in of want. to Brian back area, organic we both a single rate. least Environmental to from an Services from mid And

So, coronavirus impacted might downturn general. any also impact we and in that have on headwinds see some here and short the any business that could term be from by

Brian Recatto

to high the oilfield single reason we mid by driven the branches. went digit And to was

a to holding We our fairly with rest related what we've are It's our seeing seen the happy mostly but in slowdown. -- Mark branches, alluded up to oilfield branches Southern well. of activity are so far. Pretty

David Manthey

then, ability going is it have relates generally factor to component the does your your this Okay. as about? And a growth, Or pricing settlement concerned on forward? you're any it impact just of not price to

Mark DeVita

like. process is not back even as since that. concerned far a point, our activity this factor as energy actual dates assessing we've about. five It got mentioned the back to I much surcharges takes years, case, we we're but And This the changed before it had and long

to years. couple from driven extent a course see, we route costs be by of so what well, let's been any you're coming say, see price, the in price, last to fuel of doing shouldn't going have commodity we well. down surcharges, less It's our we diesel then as see but the So, we've impact will

Brian Recatto

really like of was money And had to It a was We we that to expensive. us. legal fees. felt was we process to we over were major like get a just with. it had going David, on distraction spending piece The litigation of resolved. be ton we for felt appeal pending, which get

Mark DeVita

really prepared as I QX, in high whatnot. fabulously the not and -- cash we think and cash cash and speak, really are remarks, But topic, any any so we wondering went that's And a Yes. haven't my accounting people look to standpoint, some a what from we're of written what long such wasn't impact, legal figure. operating as why that surprising will like. the on some materially, pure I cash had check in cost through flow probably we there But rose a standpoint, from kind probably

checks in and we're to to QX write So, whatever write QX we this. related have expect to to see to going

David Manthey

competitor you're you're then And oil it how Yes. ban? generally, your and Anything can imbalances top if of could just last and that, on here. mentioned Okay. if you speak about ends seeing XXXX, see form XXXX demand carriage to sneak check then there Are spread And maybe head believe starting the they right picture? the post on I any motor to used now one trying to both supply one in on your during how thinking benefits out? they'll IMO, just rolls the

Brian Recatto

Yes.

bit into until core oil, the oil could up spread on motor It think will in could out best I knowing market collapse disappointed went sell in this year. to as they high point, and potentially much we're Midwest, a in our extremely HSFO that with their last marketplace, is the pricing price little the supply/demand year. differential Everybody into used motor was that as last high-priced especially used which balance Northeast. interest,

season, activity. oil is into less the season, changes, went our slower which everybody So, fall less

a moving on the struggled bit, oil. we've used motor needle little So

our still remarks, motor on there bullish will time. for that over outside we're from re-refinery. of used because that, will it the plants, saw We prepared fact VGO oil change know no are you As outlets

we we a was mean us, of relative over don't in report the tell we're and February. demand guys it's shipping out you the going rankle begin mean happen to in port I long just to I L.A., the So going that what's to. differential down, the of just is commodities. think, haul The to here supposed month coronavirus XX% spread added to read for know. morning, see I like this

levels next of we're be off. here on are bullish going other. going way. going the We're months over very are our of the know this a the But the still think able feel little it see to price the I that used one fundamentals get same to until struggle to get on motor And or oil. way it. So, couple bit a we We all competitors to

We got oil; spread base get what have we've have the everybody to saw the go back. to on majors done because

David Manthey

very Got much right. it. All Thanks guys.

Brian Recatto

Thank you.

Operator

Thank you.

the comes Hoffman question Michael next Stifel. Our of with line from

open. is line Your

Michael Hoffman

Mark? How you Brian, thank are feeling Mark. Hi, you, better

Brian Recatto

Hey Mike.

Mark DeVita

Thanks Mike.

Michael Hoffman

Yes.

So much somewhat this like a around that control to. as the this like the surprised in been that we've used business that's can't gotten ES you'd gotten But the We've the and over oil to business, because as a control. get over you stuck at little repeatable, that you better bounces idea has reliable, I'm on feels almost again. up such do it spread

understand you you us going of much trying for can the there's that the of them through basis bit other character away? XX that, first to but points? it's you little get on much of basis like, are with what to year a it and pieces the that was drag three just How get still attempt And points to the two-thirds XX%, help rid understand of in how or it, out identified can of XXX to to going right half of you're stuff, the because segment? of So

Mark DeVita

Good Yes. question.

me this paint the so color. rest the picture, some to Let add speak. And will hopefully, of

that business, our and points was to So dollars rest project a impactful we're larger-than-normal QX, out bringing so in that actually, about in bigger in lower expectedly get of was working field margin, at on line during And of called we to but some that's business headwind. services we that basis the to we're projects -- or relative while little those XX typically of that mentioned, QX. higher-margin bring going still in

basis we've impact XX QX, the -- really was alone, you there. margin to look that business that points headwind, in overall, the in was then ES our at antifreeze business, line And seen down and of the if segment, about the additional year-over-year, it for

at back least a business. half or of that that first least or at to part winter the our we've was of you so mild a pretty are aware, experienced pretty mild, QX As winter was headwind had probably

Brian Recatto

Michael, other capacity and a the started of receipt it that acquisition, the had and assets we, be to production acquisition. out over going that used in And And plan will we of they took end changes. to the that people, few with and on help comment and is the after the antifreeze by additional will us antifreeze, our in plants to We and right-size be The this those did system I'll production, that cost. always that comes -- too rationalizing and we're the already have the add quarter. that plants we was course made much obviously develop and year of

Michael Hoffman

And -- it's the that's health best and so carry, fleet's a timing the that's going through just think self-insured, care, it that a that's it? is first drag to to goes away, are the probably be about antifreeze how is and but the half, carry

Brian Recatto

Yes.

I in into will a fleet think We've the -- the -- business that XXXX. the started first the carry got oil certainly quarter.

we you're when the a a turning are oil we're of seven-plus-years a for So that's business. function to going back and in. work, in, lot those have that get you leased, were a old of turn repair maintenance trucks so truck trucks that bill Inevitably,

We will work through that. we're in same there. and doing We've got obviously older thing ES, trucks the

had got it. the remarks, we trucks rid about maintenance have pent-up the that that talked in we're more preventive just aging quarter, need, fleet excess Within in fourth of fleet, and program, we're spare we've getting on feel some a better prepared of captured But desire a to of that will we eliminating. top we trucks management expense don't our to Getting little like bit do QX. our we happen the

it like of disposal. over call, to initiatives, that the talked And sure. the for So we're relative year, working we half first and we'll up the on think -- we last about also other on clean

their know, of mean As raised settled which price competitors, talk broker. prices, you our we're you they've to I we primarily get because a with a when all increase

going be the been pipeline the that a should waste third-party disposal bump. which honest. some processing our extremely to bump of doesn't waste and generating right pushed own give us over some plants some waste, to our see through obviously make our of an these we're get ability the increase. augment now, process hard our But course We've of working of down a us our the that you'll own M&A internal obligated streams the of to drive and so margin with And internalizing and is And gaining control competitors any year, out larger cost internal it program over margin relative that of we're to I streams we'll mean course have the these price from that we not our -- Mark we and want year. capabilities

Michael Hoffman

Thank Okay. you.

Brian Recatto

Thank you.

Operator

you. Thank

line Our the Company. next question comes of Jim & from with Ricchiuti Needham

Your line is open.

Jim Ricchiuti

you. Thank

some going like bulk weighted from in on half. So some it to you it QX? that the ES play there's towards anticipating in these do occur But would QX side the anticipate of that business beginning margin more see benefit you're out Is the improvement. you Or changes, the the to sounds back initiatives is some -- of as well? these of

Mark DeVita

QX. Yes. definitely to earlier of expect some We than would them see

what is we planning that what So anticipate. for and we're

Jim Ricchiuti

you got for, kind And Is you've all year, way some that doing? that of things target number what might given out drive margin various in the else looking sounds to being you're initiatives the business. like some of think margin you're a this looking of be Mark, about we improvement it just pursuing of might equal, any there part a

Mark DeVita

growth Well, now I organic in. a place that, XX% think that target had we're growth for a environment Jim, -- couple years we've a in in good that target is of

many line We fast we have hasn't top as better, on that impacted, headcount tell our But which would in would bring the I standpoint, much. years. to you, years, really chalkboard, kind hiring But people we if growing of X as in last gotten on the a growth it be had some any struggles the from as speak. even X.X would surprisingly want to we so easier hasn't put as able be market

more going general you're trying even adding try question you're you maybe could not and years and of than will to we did range. we those couple above just XX% density, balance beyond you really have as a even keep probably So we're stop look But that get that other and to than closer to to think route facilities, if margin not even X see this you out start saying, And XX% headcount, back, you range. grow approach. margins XXXX in that add but we the to you answer

Brian Recatto

And Our is strong. talked this other sheet balance on about so we've calls.

growth. Board a that, continue want to XX%, embarked but we at Our do. we're our organic what about that's for we charged And test up hunker very to can down going the they're to margins to pursue it. Yes, get not and

mean commodities you of be And simple would of source don't we West, as the as operate an can example. those of open our out it's West we things that some and branches to density, I the Seattle supplies out where locally. load get to expensive XX,XXX to And core you out marketplaces. capabilities we'll density, outside have are have its build

which with will plans a programs there, got hub have have manage We'll But density to waste our better cost comes you've to that out distribution. time. lower and have We'll for the streams.

that seeing. So because continue do the the we is to that until we not we're we're to going to in what be we're XX% down that suggest growth, we're going which slow range decide going to opportunities like to

Jim Ricchiuti

is it mentioned. of that to just regions is respect that terms looking density with you in How to comments And of some Got significant really density. the add in it. M&A just particularly just side, focus on increasing about the those

Mark DeVita

theme. glad I'm brought a that you focus. a This definitely is It recurring up. is

the If are high years us question Those have asked opportunities. you a year I other ago, -- mean, we even ago in or for would definitely this build a or even while We're priorities. we forsaking preference have X areas. so helping we're have density not less-dense --

it's do one density. going the areas But certainly, one left first we deals, prioritize to that's first to and the where a have in X do vacuum we're less

about, talking the for we're Canada. Western Eastern most U.S. general, in part, So the and

Jim Ricchiuti

now? fairly last it is you're pipeline And right of active opportunities seeing the there like question, that sounds

Mark DeVita

in, I I last of excited. we Yes. about We're really think, months have and he on time that the and think ago. a the mentioned, M&A call X started I brought first X, for Director

background manufacturing the both he's on well. got industry banking speed on the coming he's rest stuff investment knows of the really And or and he and up and M&A to the also

So to probably Jim, this, walk we deals be the wasn't results. And going in close again, that that to we're the a you're couldn't cycle, deals know pipeline and more like and to not see similar least bunch that QX early with closed. the pleased But sales here in we QX at here of do it's because bad. get coming several going you

Brian Recatto

pipeline. Pretty Yes. excited about its

Jim Ricchiuti

Good Thanks it. Got much. very luck.

Brian Recatto

Thank you Jim.

Operator

Thank you.

comes Our next question of Capital. Roth from the line Gerry with Sweeney

line open. Your is

Gerry Sweeney

on Hey come Thanks Brian Mark. Obviously, have for side. taking question a and my good morning pay-for-oil call. prices bit down last quite A oil the in the X weeks.

think through you your your remarks. those But how or you or be can customers pricing responsive You mentioned in chain? can how that on do your fast -- your push

Brian Recatto

but our do something. market commodity a took to XX% $X.XX it can in decline Mechanically, in not we we it's It trickier, the little be a XX% ago. week marketplace, push a $X.XX system could into just lower out has everybody hours. any selling this -- easier. through price that's Dynamically price to And XX to bit

going going to oil out program. have used So to get this we're is aggressively of the half do get else everybody through to our thing. and same And at back that week least motor

high up we it's a not around I route picking lot other of At motor to which, headed, mean, become a I every run like motor needs oil oil. this money spend stream, always where used the It's really waste. at look market these liquid waste used it not when collecting trucks is point, cheap to of quality.

change aggressive dynamics as it's So we've none can an of because frustrating. got extremely and oil volatile us very to control the base industry price and to try be and

the a used do job better we've oil it. control of piece, only to motor got can we So and

Mark DeVita

the But to see we're in not or we I'm much lower to in to print just alludes we're I we're being for want. $X.XX as, put a like even, -- cents realist, see if Gerry, Brian far mean you're you're not QX where given going gallon just perspective, per to at, just to much well, whatever to our going as even as able successful as

Brian Recatto

going decline. rapid a erosion going become to of see to prices will also not You're It's help. the not either, base $X.XX oil immediately which

Mark DeVita

Yes, exactly.

will those So each counterbalance other.

Gerry Sweeney

the That's a for was ago the is little paid et the it. oil from going last, if is changed different a of, -- obviously, it's going charge, bunch pay getting this environment sounds psychology years And fair? like pricing helpful. go versus little for bit there I to around guess, that of around, it and Got cetera. bit a But

Mark DeVita

long tell be I should that dynamic charged so general, mistake through paid referencing, one more about would time several But -- in catharsis back no wants since same be get went you it. we or are earlier whole years that less it a Yes. or back when no to should has you, ago. non-issue been that

Gerry Sweeney

something Shifting once large the we gears like opportunity field pretty while, to this backlog contract pretty business? for see Obviously, and pop Every a look a in. services. impactful. in What's or

And if an it the more in curious, seeing we keep should activity, on opportunity? you're more Just future? more eye out

Brian Recatto

customers. XX,XXX Yes. We're we have -- seeing

put our to market core plenty We we've our added go We've field their to we're services encouraged and cleanup field reps, opportunities do So smaller projects in services. help branches. seeing client of our for base. to it quota out

customers all focus. in to more our that's on what augment out desire this industrial it's to the we a call major So field. And of piece do part of

I to obviously, client range. our we the the capabilities which and taken it's continue like waste But like some adding impact our in business, Regulated will own to process us. where adding Focused is on happened margin, to We're what non-regulated. core stuff larger our mean, projects mostly base, that's QX. this plants. partners. broker We're

up to services mark going not field that you You're much, a can't. large job

Mark DeVita

So a Brian's in saying, else. if add seeing count of are is kind there's few at something customer we companies look or at doing that that I'll very do you we're already projects entities that -- this project -- that for

and customer's not have yes, a of is So trying our is, say, basically, just what arises just of do that. to when say give this we one to the don't to the we people like to, say, opportunity benefits need

There something a we anything business not is the customer that's exception. go maybe someone, to out that solicit have and done projects separate but where this So we is with some haven't are base.

Brian Recatto

that have they collecting And take we approach, could focus streams just these parts small-quantity the work smaller and branch washer cleanup waste that business guys it's of so to into out doing for experts projects managing the core the and they traditional are services. and doesn't there at it these fit over easier, on make branches

Gerry Sweeney

take Got dollars it. any of week. the the profit gross day I'll

So it. Thanks. I appreciate

Brian Recatto

Yes.

You agree.

Mark DeVita

That’s Yes. good.

Operator

the from comes with question Research. next Our of Kevin Instructions] [Operator Barrington line you. Steinke Thank

Your line is open.

Kevin Steinke

good morning. Hey,

Brian Recatto

morning, How Kevin. are you? Good

Kevin Steinke

Thanks. Good.

about experiencing? going larger couple Services So into And talk that been think in do can than they you've XXXX? of implement largely headwinds you Environmental been uptake look in you've talked increases? last Have some to of you inflationary you the And to the customer offset those normal? here been What's inflationary relation price calls on pressures the want just inflationary that you're seeing. the the about increases the -- of price to

Mark DeVita

is so remind everyone, But for we've In in the speak. implemented XX years begin at say, for been beast, but somewhat, cadence, offered under our the -- to second, we talk has we'd business been last the we've answer when end the our usually I'd of most that annual has basically, or Healthcare, year, services I November-ish general, use of of that varied it's segment. the to the to used we have Services most and reporting the that's in can this past its of cadence. normal revenue most about a own implement, yes. and did what price year increase, or Environmental early normal,

service portion of we get Kevin. sales portion implementation field our that a or give some as this, you we'll because that in in a usually, realize QX, to and of remember, plan personnel sure of I'm And flexibility

So if to for X% business overall, as were some overall, more probably close less price, as of but the you we're or realization, others, about really segment. look lines far than realizing

of of. we is spoke because other project for business, But And with just we're lion's that's get to services, field went work. which out field services again, around at. where realized, what is excludes I what nonrecurring the which of all the lines the share we revenue, And this

across less generic And shotgun a It say, by a a to something rate sometimes, went approach. things rifle discount existing what and of, aggressive. very opposed the was other like differentiated that little business not out as existing dollars. more we middle take a on to road, of more business about certain we or was line do we with normal, of time, What this of the aggressive factors approach like was to more but of than had x-percent we'll not -- We x-dollars a tailored.

Kevin Steinke

interesting. That's Okay. Helpful.

Brian Recatto

transportation seen you've less are which recently. And numbers, we seen inflationary mean, down. I have pressure obviously,

actually to forward. So lower opportunity going some cost our seeing we're

Mark DeVita

health card mean, Yes. I that -- the real care because is wild

Brian Recatto

of the Disposal a has too, tight wildcard been market. because

Mark DeVita

we, on have just when having There's catastrophic people we and that says you reason, which talked continued it rash, going QX, in continue. in illnesses, but about nothing that's a some to they add for But QX.

are level. now rates, of happened. that they'll premiums hopeful Now, claim what But we're because to of higher some our XXXX reinsurance the normalized back type in actual come

Kevin Steinke

the premiums higher those But least? you're capture trying health to at increases, Okay. insurance price with

Mark DeVita

Yes.

Brian Recatto

Yes.

Kevin Steinke

what plans new Okay. as as And labor XXXX? are ES Services, does to a those market, mentioned well tight investments four people. make related play still on looking How in the about into believe any be you talking can to so growth as those did that then comments challenging branches you're number year? the had five Or you roughly in personnel sometimes similar just to year for you trying this the given to maybe items add Environmental of to I add sales been are? it this also XXXX,

Mark DeVita

-- acquisition whether standpoint. brand holistic or territory. meaning really or up grassroot be through agnostic, take from approach, we're inorganic a and or a it's a from facilities facility that standpoint, trying We an We're approach do a branch Yes. open we to one a

at or be acquisition factors, staring of that it's or you at positive the we insanely to deals have of of things high last a couple been by maybe to coronavirus where or great up the overall glimpse a some things and general about not potential the earnings faced other market driven economic looking at the whether we've of lot the lot lot of multiples -- about of look headwinds, with a When we're can years. seeing a loosening

inorganic of know tells XXXX. me, we acquire to four kind gut approach. three we towards five-ish But or we're my make classic whether get to of acquire be or that -- to maybe We will not hit if the think you instead buy it still I more in one, we in it's economic sites did So trying look XXXX. that the at

as target that for heads had was only is position we around -- four, when shooting had in and XX And as that that for than far better we running number year headcount, think XX same that a And XXXX that same I XXXX. we standpoint. XXXX from added we much about what from in -- really we're had about new last

Brian Recatto

QX, And touched mean, on -- I XX. vacancies, I think we're -- still we still at we XX-plus maybe in we're had

that route. branches. agree Mark we support our So the to continue certainly work with to we existing I recruit to people like acquisition want to

off and easier grow It's much much of acquire into that. put It's well our system people and because we could easier. them you as

can't we pull Now, acquisitions. off the obviously,

the to do the one half that open are Western organically we in density way other. need and the will because of going We to or we increase U.S.,

Kevin Steinke

Okay. That's helpful taking question. That's today. the I color. for really had all Thanks. Thanks

Brian Recatto

you. Thank

Mark DeVita

Kevin. you, Thank

Kevin Steinke

it. Appreciate

Operator

further today's Ladies Thank Thank for and you questions in I'm queue. showing no conference. this the participating. concludes you. gentlemen,

wonderful You a day. disconnect. may now have Everyone,

Heritage-Crystal Clean (HCCI) 3 Mar 202019 Q4 Earnings call transcript