Heritage-Crystal Clean (HCCI) 30 Jul 222022 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Heritage-Crystal Clean Incorporated Second Quarter 2022 Earnings Conference Call. Today's call is being recorded. At this time, all callers' microphones are muted and you will have an opportunity at the end of the presentation to ask questions. Instructions will be provided at that time for you queue up your question. We ask that all callers limit themselves to one or two question.

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

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

to we’re happy joining On yesterday. behalf today. very you our of quarter us Thank Crystal Good for and entire Clean everyone, you. team, thank morning, record the earnings report second

total quarter we expectations well in exceeding XXXX. from additional compared second of and underlying detail, EBITDA EBITDA XX% to produce industry Mark net at $XX.X to many a the second but record standpoint. our quarter, exceeded of second total EBITDA which million, up million, on which $XXX.X focused continue was basis, our inflation fight taking helped revenue performed will quarter a provide we quarter On revenue, are steps and the budget income the We to during experience. in company

I like to the results discuss of in would both segments. Now, our reporting

business oil start segment. the Let's with

our of slightly high quarter in re-refinery for paid improving a oil second The our base compared year seven produced spread during a was the Oil years the second $XX.X XX.X revenue I mainly oil due or in second for From million continually operating increase would increase operations that charged price operated ago $X.XX to perspective, XXXX. for gallon XX.X% to like an in quarter the fiscal our our than location to injury, gallons quarter. also the base $XX.X The XXXX $XX.X margin of due removal of was of mainly or quarter second between quarter. higher and business XXXX. quarter million an business increased XXXX customers driven an fiscal the team to by margin During in of consecutive the of to fiscal team was execute the compared netback We XX.X% well XX-week oil, per second base sales which the continued culture. used second the at to highlight to oil recordable of has the million our an increase without sharply of segment to their on higher increase compared revenue operating oil. re-refinery motor netback in million, operating XX.X% quarter was a to compared in of to second the fiscal XXXX. quarter quarter XXXX, of the the record

The second XX-week and $XX.X year across quarter increases $XX.X of percentage extent represents was condition lines XX.X%. balance to revenue and the quarter. was XX.X% high or position record of higher administrative mainly a the Let's million due experienced services compared a same an this extraordinarily transportation year in from half caused selling, due lesser XXXX. compared in for revenue million segment margin quarter improve quarter or of in now second end $XX.X XXXX. for in to revenue the expect markets the on increase move environmental to to an our when our prior for the of of was This increase expenses inflation. services compared to service of environmental for XX.X% We segment, million, was XXXX. of million, revenue segment. quarter corporate, services to general a to remain services profit decline and ago in acquisitions not mainly or demand by In compared the million to XXXX. increase will $XX.X Environmental revenue The the during XXXX revenue, all disposal of in disposal high the quarter we expenses operating the oversupplied the second and and before the The $XX.X for made

would discuss Environmental a I Now, our revenue our a quarter a growth for quarter. basis year-over-year result for the segment, second the great In look future. revenue to and outlook produced from We perspective. on like fifth the double-digit forward straight Services generated

growth pressure we remains Assuming of inflationary XXXX. items. to deal our margin the party operating inputs continue an containers service many waste compared third overall the and as such to for standpoint, continue to during with percentage transportation we other to the US prior fuel, second year, economy disposal, achieve expect to From revenue steady double-digit half

increased many and we wastes, to that in or our disposal surcharges of country parts not experience types Given continue for of do disposal operate of certain and the vendors. assets own costs certain we for

the to the price over months and will we increases, to the impacts out pricing industrial of From QX more standpoint, the level the waste hard relatively we've implemented as past negative end by are non-haz internalizing of nine expect roll processing. a toward counteract price similar we second working experience been implemented acceptance we high acceptance these Customer We increases has the quarter. we increases. of a of continue

As expect will supply a quarter. most improving of we segment continue stable tied the to expect to an year. slightly be performance oil for From perspective, Business during base of operating Oil to the the remainder balance margin result, third we

As headwinds a normal throughout continue until prices result, towards early high the end and arrive seasonal to remain fourth the relatively quarter third the will base oil quarter of year.

crude feedstock On crude oil third during price the expected, expect pricing result oil oil the to we pay of cost business, second the our more XXXX prices our to with to side we during increase lower crude quarter. for the as to structural at moderating used due broad in a From continue industry feedstock have flatten occurred to bullish begin a recently, upward of the relative much cost regulation. perspective, we the which oil quarter. we move in a expect as the years than improvements, the IMO With past used in acquire oil to saw

We variety industrial the assumptions, emergency June, a also specializing the operating items, I expect a our assumes third we Patriot the will entrance and outlook could across margins the gas segment expect as we opportunity of Western range and re-refinery negatively is to hydrogen. range announced our From custom to This natural in on new us to Business several perspective, at industrial should higher profitability not as gas, Patriot as variety markets. customers XX% XX want Services. Oil utility high our treatment, quarter discuss operating these to in we acquire transportation markets, environmental cost locations, quarter. for environmental This fourth mid-XX% in solutions a true, the waste remain costs Should for the construction, Patriot of wide primarily elevated assumes full of due such of the year-over-year at well impact agreement and shutdown agriculture, into healthcare, relief for outlook our happened also relatively our on-site leading an that the a basis some hold near supply services this worsen to general at of annual end on minor a for exciting stable. manufacturing, provider acquisition months. receive disruptions, in does Clean. operates at waste Patriot It positives. the various services, nine mining, chain of we provides and not outlook, At which the in provide term to service States. services conditions United in spill OSRO are the off The From quarter. and Crystal and oil end and including to a past during States, least provided, inflation serving our definitive from disposal response, within the re-refinery United economic response. I wastewater parts extended Environmental the services have business wide Now Western take the fourth assumes just be

five became the in which ours presence a years ago. our First, been I it will over of since increase US, has Western goal CEO

processing waste it addition Second, our non-haz us waste non-hazardous vertically initiative XX overall to revenue two us the Western should now standpoint Along a one which further we process helps the our waste collected to site. with have with over facilities cost solids from our area. the and treatment the grow of as as wastewater in several acquisition tuck-in geography sites in we ago, processing non-hazardous made this integrate months help US, in Patriot's well business lower

our build industrial us should the an in service the an platform will Western remainder in of the Having platform platform, come. service to areas industrial years in this provide the Lastly, services acquisition us US. help out

We expect this close to the acquisition Environmental quarter. Patriot

leadership an I'm the XX to years' serve with strategy. both the join accounting our have Crystal our private will serves on company Mary report Pat Directors forward Pat Audit with On an currently Board as into front, Mary agreement comes and we of push advisory Committee. to we entered be for and and Thompson a and have on our asset as Boards She thrilled governance experience roles. growth to Clean over company ESG in public director and

more issue will on background. Mary press details with release Pat's separate a We

I the on like Before Mark, would our I update turn over provide PFAS strategy. to to call an

to at take partnering happy technology this the supercritical of are this applications on the and sole water commercial year. wastewater. disclosed provider level. for call PFAS of technology by They with the I'm service this the oxidation ownership of destroy molecular PFAS year, technology and to complete and their end the treat report commercial be to schedule and approach Annihilator. version are we earlier Annihilator first As we destroy to their adapts Battelle Battelle's we of

of Grand Michigan take concentrated area expect treatment financial to in deploy this to unit will With We processing Rapids, contaminated Mark through quarter facility support us first solutions. our second our commercial and results. that spent borough firefighting wastewater PFAS

$X.XX same record per and to acquisitions a or share or quarter of second XX% million lesser great the results and $XX.X income generated the for base diluted in per by quarter by $XX.X like quarter quarter was revenue prices today. demand for revenues XXXX. driven for revenue Business XX.X%. I of of you, This quarter Oil Business pleasure I'd during second XXXX. to the compared to want $XX.X million or of In million compared our second to increase in and quarter to be and to increase segment second with everyone of the a second extent compared or This segment of revenue compares of an XXXX, our quarter Thank XXXX. million increase the of the earnings XXXX. record Brian. in a from a segment. earlier increase mainly represents a our share of of $X.XX XXXX, of made million morning. quarter, higher Net XX.X% Oil million to wish an to million higher $XX.X with diluted fiscal oil diluted services $XXX.X we a represent in you It's XX-week a which per $XX.X year products discussion the was half $XXX.X were second begin income share net selling

the price our On first in Brian quarter basis, base by a revenue. our netback of which compared of a gallon, XXXX. As for net the $X.XX oil mentioned, per increase freight is catalyst higher netback, to increased sequential is sales charges

the the during second increased by used in led quarter by Our This was of volume quarter second The the oil service increased to to XXXX compared we of of quarter quarter of at compared to second the efficiency XXXX. the number second quarter to was oil increase quarter of base million X.X% to sales collected compared XXXX, volume oil From and a the perspective, efficiency year. XX.X second spite an quarter achieved XXXX. oil in the fact rug X% collection the increased during representatives our increase the internally with in that of approximately of used gallons. truck flat more of used sold combined reps, loading XX% compared last

XXXX As third-party of of for XXXX. the increased increased made fiscal during possible used increased the XXXX during not second per XXXX. the This by of increase net feedstock The quarter you the quarter of the second The from to we I might The oil of quarter of $X.XX fiscal increase volume during of the compared XXXX also of our second decreased by oil by XXXX. in cost quarter feedstock per our Sequentially this fiscal decrease feedstock gallon collection of second expect, the the from second quarter pay used the purchases quarter is may pay for was cost increase volume first XX% earlier. second oil the $X.XX $X.XX quarter. third-party gallon to had to gallon. the been of oil quarter more the internal our to oil by XXXX per pay net between for mentioned have

As Brian continues well. re-refinery run mentioned, to our

second the or approximately of gallon by quarter mainly driven our from to The XX.X% our in expense of by produced nameplate price segment or sales due million, all-time From XXXX paid up capacity, oil gallon oil. operating compared a in second our increased was corporate customers standpoint, between at base part volume base XX.X% oil fiscal increase to quarter the and compared the $XX.X by the to was of XXXX. higher used quarter, per second pricing in represents Oil $X.XX XX.X% costs or while up of to XXX.X% first the $XX.X charged of SG&A XXXX. natural Operating was was spread million and we the Business margin which netback of XXXX of suppliers. margin to our removal During profit slightly. by produced our record. gas XXXX, a compared up the in an second production of the $X.XX our quarter gallon, price rate quarter operating by the increased quarter XX%. second This for hydrogen profitability oil This per the spread to to and was and increase The compared base the of before

year $XX.X $XX.X increase XX.X%, reported ago the an demand or extent quarter during compared Revenue year Environmental compared The million, acquisitions increase XXXX. the accounted made Environmental services prior to from the lesser second discuss due half Now Services of fiscal growth second revenue was of our half segment. let's in Services XX.X% businesses. the as quarter led during A second containerized to revenue volume-driven compared the quarter our in general as profit XX.X% majority when was growth XXXX. waste service quarter by experienced revenue or Environmental fiscal quarter. volume of We selling increases and the Services revenue to expenses the was in second of compared lines across all year-ago vacuum segment million price XXXX. record XX-week and from in X.X% quarter. the the of the segment and to our revenue of of of mainly well XX.X% increase million XXXX revenue of to the a for acquisitions million corporate an of a year-over-year closed to $XX.X for during before or administrative of $XX.X wastewater

the margin to factors was by decrease earlier, also by labor and mentioned equipment rental operating container offset Brian improved partially the addition impacted In costs negatively expenses, higher in efficiency.

the XX.X% quarter second both impact XXXX Brian and factors of result during earlier total XXXX. costs fiscal quarter these operating million in of second segments, the increased compared of our the or mentioned company a to As $XX.X inflationary

$XX.X expense an benefits $X as year an to Our and SG&A overall increase million by million or corporate driven quarter, XX.X% represents compared of increase of as the and amortization. depreciation ago well salaries in

during last corporate a the of second quarter revenue, to XX% As quarter XX.X% during percentage expense decreased SG&A second compared the year. to

$XX.X quarter X.X% adjustments compared incurred increased XXXX. which of first adjusted is quarter half an our excuse Patriot have $XX.X of in me, million The represented expenses the the a second the EBITDA second our increase ago million If of compared XXXX. been was to certain federal compared rate EBITDA tax fiscal quarter, Environmental, record income XXXX The the in company's income to the record. would year million, $XX.X quarter was XX% of of you the corporate cost impact SG&A the also was an the as rate would principally only to -- our and attributable up taxable effective second related the XX% remove XXXX. for fiscal to have all-time with of of increase acquisition federal pending $XX.X of million compared fiscal to income, and of in second tax quarter XX.X% to

$X.X had the second at quarter XXXX, at the end we resulted quarter. sheet, of on Looking of hand of balance million during of balance the of cash $XX.X an which increase million a the in fiscal in cash

quarter cash funds our Our from primary for flow operations quarter. in under credit facility. cash available sources of were bank from operations borrow We generated liquidity during the $XX.X and to revolving flows the million

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

early we to mentioned, our Brian on As in hope August. acquisition close Patriot of Environmental

Our $XXX of which EBITDA, X.X portion project. multiple price million cleanup a purchase spill large a of included represents a XXXX approximately times

multiple times the larger-than-normal XX-month pro purchase project basis, on If represents trailing you forma price a EBITDA. adjust a nine of this the the results pre-synergy for approximately

segment strong during Environmental these working of approximately generate in synergies we're inflation expect most basis in we're negative the months hard our this the impacts is line recap, we're margins having acquisition. in post-acquisition. to the to generated experiencing annualized to million if on business first XX Services from We top growth synergies anticipate an will combat our cost all in on with our and the To $X be not restore We order excited segment.

We in us our of the the on I'll used concludes Oil prepared over take continue and to be capitalize oil economics now our industry the ability in with improve business. to operator call This that historical to which Business segment changes pleased execution remarks. to upon turn the questions. the structural allowing to collection the your are

line Instructions] [Operator the from Manthey. of It comes David

morning, Good guys.

morning. Good

you? are How Good morning.

Good, good.

you partner the So I if investment? out? of how what's that battery could in Retriev the playing recycling you nature that million first And the off investment was wondering $X discuss do see

batteries, and that because to other you thought the would manufacturing partner JV battery processing focusing the very thought the Yes, developing bullish that interested our operating be Group. we're including We that It's base our technologies. have a on help of company We'll XXX we're lithium best using from think that the would David core And sense. help in on client our they locations. the our multiple is by a branches gather potential in processing we the group spent partner be as batteries. versus locations collection of for which role currently being elected We own locations are smaller well in very our customers. that We collecting know. collecting Heritage that's fit be batteries assets. investment We're route the JV processing to and long-term the front made go best on business up Retriev owned

in given of believe it's And oil of are some your more diesel. an used oil It any that contracts? you're in to of situation the more fixed would line the in IMO making some formal index favorable contracts you that happened given XXXX, questions changes seemed how or terms has like then whether oil. to this command sourcing I Okay. them, But those you on kind changes approaching base. have a be since couple

of that involved I feedstock think suppliers And our to calls less than are oil IMO previous environment all conference to commented Yes. motor from for on we've we in the price prior of oil, that relative $XXX used we an would paying crude crude XXXX.

business. of the ample index crude summary. third-party correct that over still reduced said, we that. not obviously years, supply. and our last And absolutely because you're built have five We're We So, the Mark suppliers, our we -- up changed but as of indexing value certainly retail anymore we've in we've tremendously off

We automotive One have our Drive program.

automotive to our volume, So internal we to last our route because cost for to used more deliver begin few density us up it's the the motor and re-refinery. focused on to important increase oil years lower building the

acquire structural to able price at been real. are certainly changes and we've lower a So, the

Yes.

So the percentage just And are I'm quick of few done sure saying that, that. changes down. changed We've those way built we in. using I that of in already instances those that some still crude we're mean

or So in I whether mean, the the metric itself effect results. seeing changes stays same the that it the percentage you're --

And end as then you on us Group refined over oils base are two receiving your remember green can't Yes. you that oils? you've that Okay. finally a -- told you're premium if I operation, of traditional back the marketing now? Are

studies the less our our No, energy certainly tremendous base and discounting in levels And oil that tremendous interest before. fact discounted certainly XX% virgin to it to there's XX I premium, base much crude. greener gallons Most oil. to of is base wouldn't we produced but only produce million -- not XX% our versus we oil, base that interest oil a driven suggest produce say, base in by the that from virgin oil David receiving we're we're

improve So spread. we're that's lots not to interest helped of and were our and like all it we discounting

there as I all think our a at hitting still if par But -- it's on to another spot that's plant story, the great would cylinders. say, I results forward, doing -- line, look of is we think, still And and still really think not yet. I look and this people well, you -- lot the collections-wise we're a But we're operationally on you operations because look at is at because collection leg job. prices

some more VP our and majors. of super on of So of mentioned things Oil as do working Brian with the VP Base we Oil and are the majors or

are to large to in be the -- future. the proverbial turn. business tailwind those expect just to We It's ships a that

we're So on board.

to grabbed quite wheel continue yet analogy. haven't the We the

Got right. All it.

closing we’re right like direction. Sounds -- moving the in

you. thank Best of So, luck.

much. very you Thank

question comes the Michael of ahead. go line next from of Stifel. Your Hoffman Please

Michael. Hi,

Hey, Thanks for taking Mark. Brian and Good the morning. queue.

bit a Services to I So of inflation. focus want lots And Environmental I on the is little recognize world first. facing

to do of of price. think there's on behind Do keep inflation that a you Where you're or -- is working you couple your the own pricing up? productivity angles sort that steadily some your still initiated You've pressure this. so recover have and seeing through we margin, are you to chasing just and the upward of you pressure now and worst on still

Great. It's a to for it certainly happened to lot difficult our underserved, know other a incinerables to bit It's -- and with going market. oversupplied streams. incineration us Michael have competitors. makes of little both of which very what's you move on waste the based along We're

seeing markets. markets. we landfill So streams. We're of blending in think balance inflationary seeing the easing certain pressure fuel we're for feel waste in the year through We're the going the to continuing stability

watching waste So, streams. to and chasing but for increases price, going keep ourselves at continue be not have to to specific also going those incinerables. look We're waste target price to have we're to to streams certainly going the on

I of handle the a think we're be it. battle the to it's going to balance but for quick year,

incineration the been pushing that lot that player direct on so volume. story of has But known. a broadly yes, and price too is end -- to Well

increases. price seeing market generator the market, disposal the So

happening? -- can't that faster? you through What's that that get preventing So work why from

XX price done anything. wouldn't I increases We've in months. say three

just needed. containers. the are out pushing costs fuel, of again and increases chemicals, price which been costs, other you're mean do that there we've are aware But logistics well I So, as problems. causing we'll it Michael,

as it to is the help some an to that the a be deal expensive we go can't we share. we begin predatory with and out view, careful. in All of to to of there. which my them easier to because want And balance opportunities to of aggressive potential to the bit we're considered ease get been market not smaller slow year. into capture out too market be we starting provider We're want force face base, client down. We space. to a in share. vendors other We've with lowest careful for We already cost to that's the find customers look a our not I able cheaper In us -- market provider recession. our make and be know for look and lose the going We're

all we're So, that out. balancing

do increases. continue We We're end of push are to by going year. prepared get the to into mid-XX% back to range additional price to margins the our this

some to in have Yes. remarks we earlier I four the weeks. stuff the took actions mean quarter still through. of covered let get don't Brian I the those the let even everyone some work of are that end it his think end and did, of in we work this that price to customers we There haven't at QX seen yet. We

how more Brian we'll that take there's And then action needed plays see as it. -- that if said we'll out. So,

Okay.

profit XX multiplied by divided XX-week slightly improve XX margin? about XX, your on in So cycle, XQ given and but looking the the better in the topline, XX, the to quarterly at XQ ES? that same by line we ES then do way about XX, thing and the it That's XX are think on

that's Yes, way it. we're the thinking about

I -- period much Okay. how add When add? XQ or at do I or what and XQ all in all if do Patriot -- it is how to in

right. I back problems you deal. the somewhat as -- any think I of Patriot mentioned clarify. full least that Environmental Services of same close soon -- it's as revenue $XXX-ish the the as we got hands. But the think on Obviously intelligence should August, announced that can for week. kind hope from we're to we we talked industry it's think But results We our early well, about I is any follow-up. the to we what the in when the we've been we metrics I printing. tell segment. going your I think And will can think DOJ, into are We million as margins is annual get We that to this maybe the don't of going but think hear -- transaction At figures in this out next expect have we from kind be revenue details guess roughly I we now, said on

So, hopefully you that gives enough.

normalizing spills. Yes, large the now for

that Yes. their need of modeling? factor seasonality when book particular about we're And any in thinking there to is business we to

I it's is. to what ES our think business similar

a your anything slower occurring first quarter be or large any pills stands of that is No So, going to course. one.

isn't think in can in And I not a but relative -- And to those change two sludges. but have just and wastewater the three you facilities that's respond you Right. one California that, now Oregon real it? own your that it, to and position business in reason

to Yes, also And to States. Certainly opportunities facilities operating doesn't and industrial shipping a back in to locations other Patriot. United in love will business they that. We expand wanted to going help and to that This our employee We us services plants. and We internalize excited marketplace. additional to the services for about field going wastewater that want that our do. the market. a in We're California. across is the and be platform now the do going treatment the PFAS we've of us base of operating have core in quite have group We waste are that's pop-up allow expensive organic Midwest. opportunities are work that today's South few lot been to the

don't our the out even western half streams wanted have truly we waste the We the own there. a US. more control business ability vac in to of of So,

start those because going wastewater more plants. adding begin treatment to those plants. We're to assets own industrial out We we streams We'll feed waste there. chasing will now

Got it.

could your mean What oil comes at Okay, industry spread? ever some at figured wide side back of an when there a still great. And balance? used that into any visibility does of on then you Who supply-demand experience the on be equation? telling least the this period. unbelievable we'd is I part

control Yes, base I is oil the motor in pricing can when the of oil on used mean be quicker XXXX out more balances better because price going IMO we down. from We oil to with going used event better. to focused supply-demand The price end changes oil be certainly are that. little Michael a oil the comes able move think structural price base we're base we motor to bit the it

can make the environment, just understanding bullish so And we're volatile. our it's crude to prefer so do. We way So, not a environment. I we that crude the get we're money in think stable markets any wish, we more going

we're costs think be for going XXX, XXX, to to to on for pricing. refineries have range-bound XX stability be the good feedstock to XX I us. It which are create going will that stable will virgin

I XX%. at had oil market, mean they a they're far. year you the so pretty If look good change I mean up

vehicle out, miles are up. So traveled people

it. overall try our of bullish of properties made the we're outreach because virgin the the the like to We up of our green people to Lots love on macro properties in base term segment. base So, oil whole they have versus oil oil. supply,

that some spread. So, convinced all, know or bullish, all move base at all We can oil of used We're price. we quickly to in we're going yes. in some oil recover that come to is point down motor the

market price Given your the increase the versus much experience, move? base of oil price how crude that's the imbalance supply-demand in oil is the

depends feedstock crude to I for high, mean are higher, costs it charge got Michael. think I DGO they if it. oil prices lot a it's both, are

but it out get we're I driven still crudes too, of there Yes, balance.

just the I piece. we -- price But helped to some is it is gut pop. oil my the you're the bigger crude bound that there's at alone comes for risk. back So, has curious then rebalancing. once And if XX range XXX downside there's mean mean right, balance I'm a And supply in less I

We're that. No, no doubt. expecting

that to outlets no the motor rest oil used seasonal of and doubt, quarter Not hit move but a as expect we to slowdown. We well. to lot industry we oil fourth the think There's we begin to days. the of motor for the as in old begin could the see compared used

coming point in? flex for Right. the And think to can are to a is a less price you you the back relative oil base PFO or from lot time, than charge oil PFO that's you your real

our that's thought. Yes,

Okay.

that someone else sorry question, get allow We a Michael. Yes.

Yes, yes.

Sorry. Go ahead.

very much. you Thank

Thank you.

Please Your Needham comes Jim go the ahead. of question from line next Company. Ricchiuti of

Hi, Jim.

of questions. couple A Hi.

on by way, So congratulations, the quarter. the

you. Thank

you. Thank

On that really just to Will on that? you'll to front, is to integrate look hoping the the secure, acquisition Patriot. continue you piece Patriot and you active be are or

Yes.

going organic big if sure expand allows to in that time asset we focus, will it. result on to on and primarily integrating an that of making treat pass spending that acquisition cross-sell assets going that waste to It's going customers a are asset that have to the the acquired we're think for we're energy on a vice to we comes integrating ability us. It Patriot. employees suggest a to going to as just We develop want our I'm I to to strategic not more their focus that on like our new versa. be opportunities bandwidth. time along physical limited truly we us with the and a

to in we'll term, that it's if going consider our something it. the along but gives physical that's marketplace comes near a we plant focus that capabilities truly truly, some like So, be us

would if bad significant we're not to there Jim, really if math, through even think when we less first financially, look X.X much obviously But but turn going you one would don't I the transaction. have officially factors really, not or know, -- is while, above went It get leverage of but whatever down, our at to than still this take get times. is happen, to we factor and us don't recession that have Brian somewhat what a When a turn -- is think most we're material the do the EBITDA of if important, even you're it I leverage. is, to to -- have a going going of even in another limiting that

able more quicker done. all to capacity. legacy and us dry the deal that's we're just recognize And have give I to hitting on a the cylinders So, next get we're from to those to business going synergies the mentioned Patriot and standpoint everyone get going powder bigger

the a it. environment. it a into have, the ties recessionary Mark question little I about comment bit And follow-up Got

it's recession. say, a a Let's knows, who mild --

see do your quickly customers, those impact you how begin some be customer given smaller? to from Just base, which to obviously tend

and deep. really it how on it in you really year duration, will in you throttle. full -- least of you've as been but on a some in not also last If maintenance more more if manufacturer, recession market ones you this a And it's fact don't recessions function, businesses, shallow actually the shorter, going really as historically much timing maintenance, if those anyway sometimes Because vary, And maintenance plus, then businesses cleaning. have it cleaning especially more Yes, even side generating because do just waste our especially does far a if things. our doing shallow you're more as be depends more fact, magnitude time then to or anything. impact had depends might in haven't waste. something it's have maintain you're probably the used on it like on and at parts in And you

the if producing Now business, on little and a the containerized gets quicker. part other that waste of it's production side you're less that waste hit

than usually, a know it coal canary based economist. we'll on two the and the no coming our or sure It So, we're general varies be I quarter business. not for us will I'm sure. But what businesses think the the quarters next mine for economy. have. really for delay I that's overall the impact usually don't in with is But

you. Thank it. Got Okay.

Thank you.

Research. line Barrington next comes of of ahead. Your from Please Kevin Steinke go question the

Hi, Kevin.

Good morning, Kevin.

morning, good and Mark. Hey, Brian

wanted the So did to acquisitions of little just more if it in contribution missed dig organic Environmental Just XX.X% I the you year-over-year. the into Mark there? growth get the quarter? give number but Services kind a to sorry, bit growth trying up tuck-in from I to I'm

was it the Yeah, for Services in side. X.X% Environmental ES Yeah.

So lot think of it's not on acquisitions to we yet. They're – cylinders can not those – a and be we're honest. out get more meaningless hitting all but we

obviously the XX-plus legacy to in the you're there's more But only businesses. if tank well, not – so does that's So doing for growth. that performed, percent those business tell hey speak you

And industrial is of to on sites. the even facilities waste waste alternative into get difficult these broker of alternative referring Obviously, up. It's the issue disposal site. one – and is one plans, third-party it primarily obviously are working Mark and facilities, repackaging another disposal end we into directly is we're move to a that some waste backed can

improve. bit That will is a tricky. So it

pandemic growth. going I XX% I that behind there And what organic price Is you Nonetheless, what organic Yeah. in do services, mean, demand? had any any versus gains, parse is there mean, in recovery there increased in – on, factors the Okay. referenced any for where your the increased quarter volume? or is market think terms other – Environmental kind growth you demand Services. just the but still of you out of you share is the driving from then

percentage. problems able providers is provide labor, we And having can't might been this But of problem other get share a definitely pull-through, into has with that in overall increase is calls. a avenues macroeconomic been at a alluded to, market it give is because get softer to we're this part think certainly their market demand there. the it gains, to some walking get quarters I for you we're you story overall servicing companies is continuous still again, least environment in customers. of there I as has six so from that standpoint. story getting a just are not other anecdote, certainly, probably being that of but some soften, There's If – basically

it. probably been that's a XX% piece price well. about So is as XX% to It's of

break But the we the share So But now both That's I share four gain the volume first categories, you. it's gain ago, market market as you, just data recovery. I tell up you – not market what's that piece far have the two Maybe something it would certainly that – more I into as of gains three, the was and than how latter. gut volume my don't quarters more driving would from think for it's it's more share piece. overall the track.

I lot adds there. getting a commentary. That around helpful was what That's Yeah. kind of at of detail

housekeeping here. just So,

You the what you said months Is XX? for XX ended that cost is Patriot. trailing for paid times trailing nine excluding months June XX synergies EBITDA,

No, it's I think spring.

more like side – it's of I think it's that.

Yeah.

Okay. All right.

the much way branches to in You really on do touched as I they of there don't bring opportunities, guess, of a understand cleaning. the some parts cross-selling Patriot to the I that your bit little right services

can So you I mean –

to going the within it's general be going industrial of services we're our to to them have opportunity base. do delivering base, more maintenance client think more client I because our to their

it's we'll together, to be us to – be but going selling our it's services. our So their more well, selling them customers

you industrial services And last continue and with the field that over few going we're As expanding the business know, been services our to acquisition. we've years. Patriot

But do that – they will parts cleaning. don't

opportunity will their look within going for service client opportunities core for them be is bigger but think customers. our the I to We to base,

Got it.

Okay.

pretty a your $X field investor at have they so -- billion And if piece, of services significant market. XX% services field what that's the presentation, represent mean, I yeah, look So I guess. you

So more is you really into be pushing that significantly to going area forward? want I an guess,

why went business. I've I in like Patriot. Yes, the the been business. That's we probably, after

I think for given opportunity to some going us. of an the create it's industry consolidations,

We have a provide XX,XXX of that better need can them We industrial of customers some calling than the margin, services. types on opportunities. those that's larger

that excited So, expanding I'm business. about pretty

revenue your to dollars mean, little well. a more I conceptually could and to certainly financials flowing more that lead Great. as lumpiness, maybe I margin but guess

So...

Yes, I stock. agree. or I the the stock own CapEx mean lease [ph] own buy EBIT or to overall

it. about that's Yes,

business free T&M cash good generates that Good flow.

taking question you the Appreciate had. I all That’s great. Okay

you Thank

it. Thank you. Appreciate

from line Roth Gerry Capital. of question the Your Please go next Sweeney ahead. comes with

good my taking call. Thanks morning. for Hi,

How Jerry. you?. Hi, are

of you touched Good. picture think Patriot some brings sounds upon I is I bit. this assets. obviously, question. getting little like long sort little waste a it just so, with know Brian, one internalization But of it a bigger And

the It's curious quarters? though is internalization You how roll that some the of it the through couple have out opportunity? next And impact, it have line? over you're can sort to at sounds Patriot, does next your and look what system, multifaceted as But trying do opportunity it's going some some but also throughout is build you of that, is think -- the -- your out question. as I to this Just services. a how what Maybe over savings roll sort how footprint. and to of they time and we

waste issues we're can That Yes, we creating of if numbers to our I'll XX%, the containers the have to and call. it internalize, to macro up macro the and after Mark us. this the that of which aspect are waste Gerry, touch of will put any streams XXX,XXX that keep volumes fault on out is, year counting capabilities. some to may waste. it approximately our build going talk to for But opportunity us already third some parties, from rely backed having we of are not

so in treatment So do various plants, those containers, building our ability these that's to and many the their processing XXX,XXX wastewater some macro handle focus is we capabilities out shove of ability for broaden speed for to us the the subcategories, automated drums up own to network. as can production

west, plant, other So facilities. help have that pressure begin off drum us We're our that's the into macro out doing We which some the work of what capabilities. we're take expanding we're will will pursuing. of Obviously, Patriot of our assets. those drums the to Seattle can feed

macro standpoint. those we're facility, in a with things the and from you facility cover fixed baseload any on to EBITDA that performance, are result improved it because that working fixed takes the to time Gerry, all the have fixed So for cost.

parties, feed third the to to we've best run generate our the the moving think, a take But bit It's a transition shareholders. own from network. in facilities. business, continue of So our for going time. got to the opportunity It's we to long it's

dynamics run long of years. have market the over front the a obviously lot changed On last couple the

ago? was you would a if of opportunity this environment still go couple similar to -- the time, years this pursue were you would If back in be to pricing if something

pursuing. Yes, we've been

talking Patriot couple for of Yeah. We've been years. to a

Yeah.

Okay.

I field services love like this and business. services. industrial I

wanted to… I then And just it. Got

to want those we're that's using that going have role. full environmental service play be a and Gerry you third not parties way want to company if really capabilities have to to you're and to Right want the we go. now We

just And not portfolio at it. looking Got you're the minimizing costs?

Yes. Correct.

get you how to you a there. ones, you you target? much Obviously quick other that two target How opposed to internal because mentioned But to think or targeting? And I are one want are to some or want you internally collections. much as -- XXX%, would don't of Two that know third-party? collect to you flex you how close

want we to control... Well,

Flex capability with parties. third

have to because them, Yeah. always But know. want never you you

Yeah.

could higher. go So we

of our what we about of represented purchases what -- I XX.X% it XX.X% was said. we third-party think QX in

there's Now, inventory and other things. again

straight it So right? which those it's generator as rate really a other a So a would translation. I that at we business -- record. not collected in there's XX a might service about But we case million customer, we're cases our getting be XX if look get sold. periods many can mean, even might gallons about is lines in you

-- And million really then, periods. a talked is the in -- efficiency growing seasonally almost it are three think last and of dry QX you we gallon, excuse on get run quality everything the it if all and that that It's several probably was I in which is oil $XX XX be everything QX higher. at going But but our million is. we even need. about not might rate me, if obviously, that you're depending it collecting was theory

where be. So we're getting close to to we want

Yeah.

just -- in we're can supplement third-party our our on We control minor have of that destiny. a but have providers we basis

Yeah.

logistics oil difficult economic for probably this and/or not I is mean get ideally overly some to me So our into re-refinery. XX% third it's XX% are very to parties, just of dislocated.

So partners. we third-party our supplier really need

you then, by say margins, did you're And say still Environmental got targeting still question that. year-end? final Sure, mid-XX%, we'll Services

earlier. that said we've Yeah,

Okay.

is. inflation Obviously

Sure.

of that don't we we with to than pressure is of price they then, is -- And as the a customers. struggle concerned We recession. our is careful hit about to important feeling want coming our But struggle. out. also the year be customers And be not service I'm go predatory the to move the care know and long-term inflation back I more going our need we a customers price. want the short-term. about Obviously move being the in we a can recession will will you're not we continue to knowing end

it, approach think too. holistic I a Got

client quarter-to-quarter is stability long-term my I'm concerned performance, Absolutely, but and about about base. experience the keeping our

it. will talk appreciate I enough. I later Thank Fair this with Okay. afternoon. you guys you.

Gerry. Yeah. Thank you,

this Thank you. further no There concludes This are today's time. questions conference at call.

your disconnect now may You lines.