HCCI - Earnings call transcript Q2 2021 | Heritage-Crystal Clean, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Heritage-Crystal Clean, Inc Second Quarter 2021 Earnings Conference Call. Today's call is being recorded. [Operator Instructions].

Some of the comments we will make today are forward-looking. Generally, the words aim, anticipate, believe, could, estimate, expect, intend, may, plan, project, should, will be, will continue, will likely result, would and similar expressions identify forward-looking statements. number to and anticipated differ forward-looking a cause that by involve statements. results actual materially statements of uncertainties risk could these These from those which variety and factors, include risks our a These some uncertainties of are beyond control. of today, as on representing in These views should future. as you of statements not and forward-looking our the speak rely them undertake no call. this obligation We to after update these statements on Form our filings, affect XX-K our for factors refer SEC including press our release Report risk earnings to detailed posted well as our more on website as a the description our Please Annual results. of may that Copies Relations from the section of SEC Investor website. be our the visiting these documents of may or obtained by before adjusted measures or certain note Also, interest, may EBITDA please depreciation earnings financial we EBITDA measures. and are amortization on this non-GAAP and use that taxes, call as such Please measures website financial of to these GAAP. see non-GAAP for our reconciliations

and today would Brian Officer, Brian With DeVita. ahead, For turn company are more at website this Mr. information www.crystal-clean.com. President Executive over call Please about the sir. our to Recatto. our from I go Chief time, Financial the visit At and the please Chief Officer, us like Mark company, to the Recatto; Mr.

Brian Recatto

total exceeded records us $XXX.X will helped Thank let provide results record team, quarter $XX.X we and and record you you. Mark the our were today. detail. the EBITDA quarter second than In how last quarter, which with entire including The during record-setting investors thank second Good pleased significantly the released previous On net We total know several cases, I for per revenue, morning, results of million, our second joining our behalf expectations second earnings to million. EBITDA. several produce produced everyone, Crystal-Clean want we income, revenue night. share are performance. of at quarter additional higher

the results Environmental to our outstanding discuss segment first, I like our compelled I given our feel discuss cover the first. but Services segments. Oil to Typically, Business, segment of I of Now results both would this reporting in

second The for of XXXX quarter was the to per netback quarter increase of than for in quarter of the increase XXXX, fiscal of gallon our oil doubled $XX.X gallon an per Business compared million. the second Oil XXXX. quarter to more base compared revenues During in revenue to the of first due mainly $X.XX by fiscal XXXX and compared $X.XX second

as quarter base Additionally, was second revenue to Business performance. and XXXX during of operating margin improvement volume further oil during the of Oil and volume was of oil quarter second the the an cost of between of price selling lack the the of the the of pay-for-oil oil, during to quarter of our for oil rise. of used during extended fiscal during price shutdown XXXX. from which a first position compared gallons second base our operating our our occurred We our second segment contributed with XXXX higher oil the charge-for-oil The to quarter XX.X to a the re-refinery, crude margin of base record feedstock quarter sales than along the million due mainly voluntary the during to sold continued XX% the slight position quarter the was a second quarter. XXXX record moved XX.X% higher

our third will minutes. We in a at provide which operating Mark oil during detail parties fair from more feedstock continue quarter. prices, attract improve the to margin used helped few

the the than approximately quarter had pandemic. XX quarter, at temporarily facility which re-refinery. execute due continue the second unplanned the we team oil re-refinery We since of produced has negative It second the downtime the to of and we've idled significant to more XX% an demand base XX.X million quarters impacts and Our quarter. during was the well gallons XXXX, been during

continue we believe Business. a demonstrate of We strength is the why now Oil re-refinery operation our to

the on Environmental Services quarter the segment. Let's was now for compared of $XX.X segment, revenue The million of compared our was by increase of growth last quarter the XX.X%. the lines Environmental the million increase Services of driven XXXX, the XXXX or In quarter in to in of an COVID-XX of was year, second the same revenue by to as $XX.X pandemic. to all which for impacted move $XX.X negatively second business effects million

we pandemic-impacted the the for While second it revenue even that our to in exceeded relative revenue by to second of XXXX this great improvement from XXXX, quarter pleased are segment. X.X% more was see our results the to from see quarter

Our Services in severely in last compared the This our year, exceeded potential impacted by quarter our leverage demonstrates profitability have second in pandemic. model. the to Environmental the and was XXX% profitability segment we increase by service expectations the increased route-based which

an from recovery for indication shifted Now outlook again. have to that our we our focused I'd Environmental look like segment, from to future. to the being and on the growth growth compared discuss forward In is Services XXXX pandemic our

From face disposal year continue pressure percentage for inflationary While growth chain the related effectively to and facing to current single-digit half margin there we we in still transportation, still expect we other We of grow supply mid- environment. fiscal and been and in confident operating operate and continue risks the are that issues a standpoint, XXXX are rate. to items. to the XXXX, continue an at to COVID-XX, Delta have containers, of second variant compared can to the expect to drive exiting growth revenue waste

disposal, also at which typical year. quarter, increase We counteract negative implement price of is currently non-hazardous do normally to we by a at in are of annual the a believe pressure items our we we experiencing beginning the would to least transitory. earlier than these fourth the hard working impacts is the inflationary We are plan portion waste of more internalizing and

cost the pressure, unclear our approach end our the in if has prices Despite it push of goal perspective, costs the have higher margin Business in will XX% segment higher From oil fiscal year. supply into through remains Oil into an the However, of continue these even to to continue the segment or end of quarter. XXXX. see continued third is to we XXXX market, some operating tight the the base by which

believe we strong the much some with the as enter driving we most temporary, base prices quarter. we second fourth factors are expect the continue to for oil of year While tightness of supply the half of easy the

range, based For capacity profitability netback, degree From by uptick higher quarter expect is and perspective, base offset near quarter, mentioned some margin the our as and a we and revenue be from expect in inflationary to to oil pricing operating slight we areas, record third but the third higher charge-for-oil. higher with quarter second nameplate production from in other transportation pay-for-oil revenue I pressures on earlier. which less in a XX% the

While expect the a do fourth quarter. for it the expectations feedstock should our perspective, netback norms, between oil quarter for our longer-term experienced our the From expect we we decrease see at to cost and second quarter. base compared spread continue in the the not we to to margin above to operating historical level third do remain

outages this second is say gallon was the is new the impact $X spread or quarter and second due how in spread We earlier from per how compared due factors, such the the the XXXX lower cannot expansion distillate IMO to Our higher XXXX. of quarter much in as pandemic-related regulations. in to the of of of much of production the to effects indirect year, at weather-related XXXX virgin-refineries approximately

enjoying creating we today. role spread meaningful believe that all in are the the we factors However, of are playing a

these of some believe in factors also We nature. are transitory

and lessen we our the XXXX what relates continue Business. As on their Oil refineries will to impacts oil rebuilding better distillate driven for demand to base virgin a idea the of as by finish have expect in it pandemic to inventories,

While economy rates in U.S. the infection outlook. parts aware our will over and due variant, team that of the will continue this by this as to the past not recover it outlook has caused challenges our to be navigate are will impact we case, successfully negatively Delta to continue year, pandemic. Should the of rising certain the general the our assumes the COVID-XX that

ESG turn things our over that to I focused remain want Mark, Heritage-Crystal to on remind at Before investors promoting I we Clean.

this program earlier the sustainability to We launched formal work continue on we year.

the reach through business. and financial issuing We beginning of our sustainability remain goal great our to have believe the quarter. of With sustainability waste with to create take results. tell that, the products, quarter used near a and a Mark report fourth we program formal everyone. our with solvent on better was sustainability into antifreeze stakeholders our about the need activities built oil, and reasonable such company to as our our will sharing aspects look We turning waste While to on-track inform forward we story first to us foundation second realized our of public general the of

Mark DeVita

in net not diluted second to quarter compares million in This But net of morning. the for income we to million be which million year-earlier XX-week in Thanks, the was Net the from row the increase $XX.X quarter previous of a compared a in of we XXXX income for was higher per per of COVID-XX share XX.X%. pandemic, impacted In a by for second diluted record quarter $X.XX $XXX.X impact or quarter million record the was this increase high growth $X.X This It's was in income. was quarter Brian. share mainly our the this revenue $XX.X net or driven first continued or million in XXXX. of the had revenue. same recovery quarter. million to the of XX% second year, XXXX, which quarter of negatively in which a revenue $X.XX an loss the of record quarter. quarter XXXX, past great $XX.X $XX.X everyone with only generated

Business an were fiscal the XXXX. Oil of a and of quarter oil for our a prior compared due volume The quarter for increase to oil. XX-week to talk offset XXXX compared base price in the or the year an increase of sold, quarter XXX% let's revenues XXXX in oil to fiscal in mainly million, was fiscal quarter the $XX.X base revenues increase in by XX% selling and the of an of Now increase charge-for-oil decline $XX.X million minimally to second of increase quarter record revenue. an compared of segment second second

was quarter compared our capacity our the operating our second price in it base position From per $X.XX charge-for-oil second the extended significantly gallon of of to first was selling a base of $X provided base margin XXXX costs. to standpoint, feedstock to of to the occurred approximately the Oil quarter gallon. of quarter to during ran oil year at oil per quarter compared the to an lack compared change earlier and The compared nameplate $XX.X price quarter profitability our Our of net the first oil the which weighted a quarter experienced second compared XXXX. Comparing oil a XXXX. basis, to which second mainly the fiscal to segment Brian last a the spread of standpoint, due of also quarter compared in second shutdown a higher second oil We of pay-for-oil quarter re-refinery fiscal second at collection charge-for-oil XXXX, increased second XXXX. year, million voluntary in base a to to draw net volume sales position volume second the the record the quarter quarter, to Business the the allowed and quarter the in by per on last XX.X% used a was and From the the second during of increased us up from which the the fixed XXXX. quarter the quarter the of used leveraging of second X.X% quarter, also increase quarter quarter significant throughput in quarter, the to negative gallon XX.X% compared the we sales of freight but fiscal with is re-refinery, same netback, of improved costs, which oil mentioned first higher during from but the of year in our the oil, pay-for-oil slight was operating of decrease quarter cost between XXXX. improvement of net to average $X.XX XXXX second fiscal during our of margin base re-refinery along increase significantly XXX.X% selling

compared despite XX% we quarter during our Fortunately, we oil compared to the by used efficiency increased that quarter collection continue last to routes. and XX% same the quarter add fact service the the to of first oil year XXXX,

quarter. third-party increased of during feedstock cost the expect, the used might also you As oil

of cost feedstock increased first gallon the quarter by this the per quarter. from However, the to only second $X.XX

this in a for increase cost reason decline modest for demand was material. the this For

mainly feedstock XX% we quarter. reported $XX.X Onto the segment compared our second or to revenue The to in revenue Services $XX.X purchases Environmental business XXXX. third-party XX.X% quarter was the quarter, COVID-XX the compared from increase the increases of Environmental million, second XX.X% of compared in quarter all first lowered to due compared During to increase an to continuing our lines The year second quarter. pandemic the our the million volume by We saw Services. of ago of of XXXX. when of recovery

businesses showing mentioned, growth business led for XXXX, the second also our also higher. vacuum, revenues results our antifreeze were second waste with quarter Brian compared services containerized This to of As growth. the wastewater XXXX and quarter field was by

less quarter was second in parts slightly the business Our revenue XXXX. cleaning of performance

quarter corporate profit to expense XXXX. XXXX by record $XX.X driven XXXX increased Services SG&A of is in The a higher leveraging revenues the second $XX.X XXX.X% impacts margin increase quarter due to costs. fiscal of million second second XX% was for quarter of quarter Operating to improved fiscal or million compared Environmental before produced the of mainly XXXX. XX.X% second of fixed the to pandemic, compared Our of COVID-XX the in waning which the negative

basis operating also quarter results our of the for segment. our XX which Our goal this run second rate percentage XXXX, below is points year-end margin only XX%, is for

fiscal the oil due costs, which quarter activity was business operating costs a company the used the quarter and during of due impact increased higher second to total compared COVID-XX result expenses $X costs, higher X.X% XXXX feedstock to welfare Our XXXX, transportation-related to and second million lessening pandemic. mainly labor costs of of or the health more of as our

second driven or $XX the an an million share-based expense increase overall Our XX.X% by $X.X year increase represents compared ago compensation SG&A as to million, of mainly corporate as in was quarter for was X.X% X.X% of projected the to record and quarter, up year to and a in of tax the of effective the XXXX. company's was quarter higher than EBITDA was expense. compared non-deductible million year. $XX.X the loss $XX.X fees year second attributable The as record compared opposing fiscal quarter XXXX. rate increase second projected previous is software was quarter XX% of travel This to quarter. first to income compared a of the licensing quarter million The expenses consecutive the fiscal record and income principally ago the effects rate EBITDA from well of EBITDA third XXXX

had of Looking off sheet. XXXX, the the which quarter a of at even of term million quarter, relatively end is we million of the compared paid cash balance during the fiscal at end first to the We $XX.X loan this on flat year. $XX hand though

from in the sources quarter, borrow to of cash $XX.X available which increase second primary We cash represents a operations Our the facility. liquidity revolving bank flow credit are XXX% generated quarter to of million compared and during XXXX. operations funds quarter under for flows from the our

cash free flow the second million generated of also during We $XX.X quarter.

pursue continued the balance our acquisition look remainder summarize, believe pleased impact on continue we intent, X under negative to we look of of we past multiple at We least move these before are segment opportunities and XXXX to utilize sheet improvement with of pandemic. To very we during and strong Services Environmental beyond. currently opportunities the in the seeing the will year-end. capitalize COVID-XX we close of we're as to and We inorganic have growth X letters transactions to our

to remarks. our will This I favorable concludes your operator take take execution call in are the questions. to now Business the market of over to advantage prepared We segment our also our and turn ability conditions. Oil about excited

Operator

question [Operator Instructions] Your Manthey first comes David from Baird. from

David Manthey

Yes.

slightly XXXX momentum, see well? higher rate ES we the Or sequential quarter be question. segment down you as a that the third to XXXX, daily could and as First your daily year of gains quarter. average actually In were case the second Would this sales business sales? from the expect to

Mark DeVita

know typically, main in I in case that an I 'XX is do back in holiday wasn't prior extra don't have standpoint, think QX years. why the and we Mark, the

that, something I don't Sequential we growth are we we recovering not continued at backwards, QX. have any and pandemic expect of the you versus into material single-digit from but that's typically growth get expect on see still kind getting to whether to because growth single you steps where what or for that expect of think basis. a So but low mid- anything year-over-year it's rate going 'XX, [indiscernible]

Brian Recatto

hard obviously which agree in our guiding get are after lot with XX% in can we we heard there towards there well third-party margins, now. of terms costs, I end supplies, our pressure, right David, work remarks to as going why for labor, more you of would prepared all Yes. We're rolling but which run it's the out logistics, QX, over place out worried we're in back the inflationary the about I we mean, that. price maintenance rate. stocks, a as is increase there's year the of now. Fuel pressure

David Manthey

a when should quarter? your effect? benefiting And when timing the Did from into you it when And increase standpoint, does fourth go start you? say price

Brian Recatto

Yes.

feeling. it in speed going the expect it bit to We're a year up happen, little this We pressure October. because to attractive of that be we're

David Manthey

of an that about at? is look the some like. consider mean acceptable volatile. of started would Or of be ran sort in you rate expenses And you then line Monte corporate Carlo at this And to It's know simulations finally, you you and project, I Understandable. Yes. there? a before I you're consider sand? thinking sort the Oil XX% wildly a Business, when should look sort good when level of you what profitability would what been where

Brian Recatto

a IMO north talked a of opinion But XX%. bit motor than market. remarks, to see see of is, as think on we're are margins We're like base help level seeing we should we oil by to we is little in supply it bump return the some personal to in going oil now given us shortage that outcome we've going shift pressure pricing certainly There's of mean, about utilization. year I going normalcy more got our Obviously, as the XXXX. those to bit. normal function which increase as overall ultimate of prepared supply they're little some at which distillates, much just a historically can fundamental expect to power base a used us now, is they little give to end produce of I'd refineries now supply, And which seeing the less we my as have back mean, the to of utilization. I seen, of a the up refinery oil

positives more We that we'll mean, may marketplace the we requirements, in think normalize. XXXX, hope ESG and in hope we So in I care of of of some our are into of seeing oil, interested look view the a that as about having see it give out David, as bit will product ESG. terms our and used people price. in motor structurally, us because we our and change to bump product we the relates on a

I'd to XX%, better out see between north about we're it I'm it, the working hard. structurally, range costs So of And that personally. feeling XX% like and up in XX% certainly XX%.

our X done into over years. CPG We've mid-XXs, from the consistently. costs seen the XXs we've driven what You've down

well. as helped that's So

Mark DeVita

there. all about Yes, uptime it’s

mean, there difference. of a years are couple of having unplanned I plus an in all the a So makes row downtime, not

Operator

& from from question Jim next comes Needham Your Company. Ricchiuti

Jim Ricchiuti

compare I the you've like past? through be sounds we're price you do taken on hikes were you some think prior But with any of will alluded in years? that what compare Lastly, this of little Just actions to me, October, that pricing the remind there a don't question a with just in how seeing. light in does these It earlier. how putting

Brian Recatto

prior a didn't do the a seeing that years, driven we in going XXXX the by It's pressure. fact And we're pandemic. because higher a be bit than bit to inflationary more lot little of

all shoot for feel like across of going a number we're to single-digit our the we board mid-to-high customers. with So

Mark DeVita

you're like with, we rate probably then above with basis Again, as to slightly in if the not have I probably as up being think see. situations, every get there's end same But completely usually XXX XXX and familiar we be flexibility. that, we Jim, to it realization into go before. would we the approach But would a customer. probably out that what already expect said prescribed might there's I specific to what long-term for a number, it's points lower single average,

So contrast is rate rate focus on. I really of you And effective with how the is realization earlier what kind years. think of want what it prior to that's said I

Brian Recatto

to we push are this with going discipline increase. But it for price

Mark DeVita

on another control. that has system things sure Brian phrase, not use people are doing exceptions, guess, eyes eyes need when that I'll I is that with. it's are making to We everyone the to cost have systems That's wise, make on, that something mentioned everyone that something we area, least and wise it's board not at on,

Jim Ricchiuti

could And longer pricing respect seeing this of of that, a we're I lasting? the end these this some of talking are that seeing, being But you transitory. folks pressures about seeing you some lot being just up pressures comfort that the cost to of with gives evidence any think you're

Mark DeVita

Go ahead.

Brian Recatto

getting Yes, but up, field, in seeing which with logistics even they're up which and problem chain expecting staffed are and our customer we're not overall supply with the chain. is into to driving They're base XXXX, see having out we're current supply trouble trouble having the causing drag is the the issues price. this, problems,

see start ability levels begin disposal of work as will even will that we normalize back think year. But people next to to it the that this to September. struggling to that back employees to because a we'll front to into get go is believe the are sites pre-pandemic get and year. the we And more So lot our to on vendors, shifts. how and for we We to operating the be to the get employees the back we end multiple certainly as of end deal customers disposal year. in able end of get up problem year, into and our get and a seeing attract we'll our back going improve of really with We're balance and the back normal of as internally it staff be more

Jim Ricchiuti

just key And Is this? there you M&A healthy. the of any Okay. on part color give a can pretty expand still footprint? pipeline, of it's the to geographic -- that Is part

Brian Recatto

you sorry. were think I talking about acquisitions, you but broke up,

Jim Ricchiuti

I'm Yes, That's was exactly I sorry. what about. talking

Brian Recatto

Yes, at density certainly, business we of X talk deals focus, ES about half the as no is call expansion invest we’re because Mississippi West on our major is in conference lack of geographic U.S. the every Western that the of River problem. our And looking of in of quarterly the are our a and component.

already that to where some a adding area, on as Southeast, especially it we to any South, suggest density, to us not treatment has So good relates been in focus Midwest, the pass capabilities that have opportunities network. we’re to going up our

been period, which think we of internally, important never historically the I X,XXX handle side an and processing. of processed to services exposure a drums minimize Last to work we’re internal on doing almost component on cost our goods the get that that’s third-party done. we’ve our

to processing, most out waste happen focus we’re to going we’re going on will of focus expansion, which So and West. geographic on

Operator

Your of next Brian question comes from Butler Stifel.

Brian Butler

back quarter occur? scheduled third a you the fourth will utilization bit talk you where little and when the first is quarter, think in downtime kind going of one. half to Just be Can

Brian Recatto

opportunities We've with pricing. turnaround, it think, currently to Yes. days, on our the which we spring. We're a We've the turnaround obviously XX going I back -- got left do is we got big seeing schedule. pushed it normally, because we're in

So more that the of be that back half may days an will X-day will And X have one or in get the then take done we will year. turnaround. which pigging, X

current the suggests QX, balance we We're in to range gallon projecting XX forecast days similar then numbers And QX. quarter. produce XX will we'll for So on did XX,XXX,XXX be year. of in that in QX fourth the our in the the that

Mark DeVita

Yes.

quarter. first those it's but days XX-week a Well, it's a large shutdown, as So most of of are QX. you remember, all,

when And So because we're days why going that. his we said Brian the in to see basis you operating more remarks, in those Most X that's driven our a down people nameplate lack look or of mentioned at And most shutdown. remember, TTM, the capacity earlier still of and if to at can is last need extend the of we demand. that the is quarters by last QX year it's number. XX-million-plus

really So to going weren't extended we a once right but anyway, be the TTM shutdown you now. busy don't year in have

remember got that. to you've So

Brian Recatto

the and strong expect oil the we we be And continue to through end of year. Base demand.

Brian Butler

That's then helpful. maybe how the give part, ES exiting on branch quarter weekly can the on what color second was you quarter some XXXX? the average of revenue And kind and that compares to second

Mark DeVita

Yes.

XXXX. to wage roughly between, and on probably on pre-COVID rates and in million QX $X.XX basis, up QX in that the definitely XXXX maybe million versus the $X.X along your same of sample on probably size. it's depends revenue numbers exceeded week somewhere a a top it's on and that, at weekly we Looking that the But depends

in So mid range. low that single-digit it's to

Brian Butler

that's right. XXXX Above right. Okay. levels, That

Mark DeVita

Yes.

Brian Recatto

Yes.

Brian Butler

we're services enough Okay. rebound to a economy kind you in seeing see recovery sales And in industrial think volume? then the of the on field the

Brian Recatto

about Yes. X.X% XX% seeing services. field I we to I mean With lots tracking I GDP we're of growth like I mean, was pretty opportunities. in the we're number had, feeling quarter, it. good every certainly mean, I feel close think at

because that's this they're to really We big manage. partly like any to tough mid-sized landed year. haven't And We projects. the small projects

certainly think we that year. So business is this going to continue recover to

Mark DeVita

already services. top field with on What XXXX Brian of said, we're

So...

Brian Butler

give That's I the one, you're any Can middle? M&A. small you magnitude then on really the helpful. at, back the size looking in on really deals are And mean, of these last maybe circle the big, just color wise?

Brian Recatto

in they're that middle. currently of but because important these they're small offer of we they some I Yes, marketplaces. acquisitions, treatment to capabilities tuck-in they're the regional kind mean don't have in

Brian Butler

service to opposed Are these service-based as kind of -- really assets? more more

Brian Recatto

they're based, definitely. all focused. nice a it's No, mix. waste think I assets, industrial hazardous X and contain service other waste Yes. the

So right our in wheelhouse.

Mark DeVita

those to at are in in the to so we mentioned first larger addition process, chase we much ones continue and in that beyond prepared before process stage further our in And that are remarks, speak, that as well. to

it’s enough So any to and close percentage of hope You any them. you sales like look certain similar process, right? a to at

is shortage sure So as I’m you opportunities. market, knows, as there’s opportunities. The and as number It’s expensive. also hot for no of fairly That’s sure. of far everybody pretty

going to the it the is So deals. we’re to that’s right really money, doing comes where make on sure if hard in work spend we’re

Operator

is Research. from Kevin from Steinke next Your question Barrington

Kevin Steinke

I to mentioned any you you're the past moving going given are there imply a in planned drive XXXX a levels. or now to the the more recovery think mostly mode, growth you ES that in you're segment forward, versus that increases phase? investments comments up that So of prepared mode growth recovery now Does from see

Brian Recatto

Yes.

going -- I were by think the think said the in his closed Mark get acquisitions we prepared to I we mentioned of X remarks, that end year.

I it's to And be personally. the got of think going we've pipeline. X X,

begin is shot have to deeper will invested it of into just rolling feet growth, in -- as will we're And forward. have that The year. treatment expanded capabilities. we're on business. certainly ES our that plant We've Yes. We we some take mean, capital our the The get improve we think certainly will stock. probably going done getting XXXX. the in early other going organic get to one spending I we

Mark DeVita

little we're to side be organic head it's we, a first company, are. next that always to real kind before count. stretch, add in waiting and And a little the from growth the an stretched normally not unusual that's and even more a investment be pandemic than but Yes, of

look the If pandemic. before vis-a-vis back you

the some subside And challenge. when on COVID of more then won't fade thing kind that comfortable, and the issue. organic as the are all be growth. people to keeping government factors people get starts going the those sidelines When hope are come governor biggest an here of on factors, the removes that's to based other hopefully together, conditions we on away. So -- big really of And programs we personnel that

Kevin Steinke

Yes, understood.

attractive actually nature it of or or product from just product. the that ESG oil is that based market materialize potential actually your I the now? in in mentioned also you're of oil improved a the base is buyers that on recycled the You for in perhaps the future something pricing seeing being hearing and materializing could mean, base terms

Brian Recatto

Yes.

hope in to and our hope ESG. still pricing that we that opportunities continue that we're in going high demand We're to see prepared supply just remarks experiencing, certainly we're improved we seeing see issues demand said would the in our tremendous I overall of it think I because was by XXXX base oil the into you mentioned in and driven QX, structurally, that our that's I for how We can't base believe it's but continue pricing, last tell to result changing will our a are point. that QX. don't We the product. certainly But into through could long this QX know market at we going oil bit. QX. think that dynamics higher

Mark DeVita

Yes. I powerful. that's pretty mean

whether whether refine it's If are oil you look the base at group moment mostly well meaningful. the typically posted it's discounts it's X or Kevin, and we've about we spot it, custody that as stuff, for the price as ourselves for, talked

per you about oil much from set gallon the is ago, that but of most can talked difference you you at merchant get more potentially have believe So that. dollar the now factors a than refiners years are don't base a price and completely that premium, are increasing that lesser discount far that replace are selling could transitory on number, posted we couple we way

of brands And heck is. in a an par be as base think still elsewhere oil. will there's a we re-refine apparent used then become even demand re-refined there Even oil might on can little you real that every better, single there. So or of because XXXX, get if in would if lesser gallon you market the total more much scarcity that than of that how puts premium a opportunity get There's on in theory, the a you to shortage.

something long-term, So there. there be could

Kevin Steinke

right. Great. All

oil I collection I to update Any there? quick lube on targeting think had progress larger service. around pilot ask a Lastly, that chains color your used going, of wanted the or about, you with some

Brian Recatto

Yes.

regions We’re so it year. into pretty out We excited about far it. this X rolled

We some already. few We take at Certainly, larger our have a on seen corporate look it go success deals. closed a account website.

the of pulled campaign that marketing together. we proud pretty We’re

motor spirit it. route and us on trying our obviously excited oil of you’ve density about used talk heard to, the very our the on our We’re structure controlling and own about increasing In density offering we’re this for think way us We largest to and it’s already. a the approach antifreeze to have retail going accounts, important success seeing the automotive recyclers. to direct we’re is it. And

pretty So excited about it.

Operator

at participation concludes you Again, appreciate and and There today's questions Instructions] on conference. interest call. This are today's we no thank time. your [Operator this

disconnect. now may You

Brian Recatto

you. Thank

Mark DeVita

Thank you.

Heritage-Crystal Clean (HCCI) 31 Jul 212021 Q2 Earnings call transcript