Heritage-Crystal Clean

Revenue for Heritage-Crystal Clean’s oil business segment was $49.1 million in the quarter ended June 30, a 24% decline from $64.8 million for the three months ended June 18, 2022. “A decrease in base oil sales price was the main driver of the decrease in revenue compared to the prior year quarter,” the company said in its earnings release.

The oil business segment reported its operating margin fell to 12% in the second quarter, compared to 41%. “The lower operating margin compared to the second quarter of 2022 was mainly due to a decrease in revenue, along with increased transportation expenses, labor costs and higher costs of goods sold,” Heritage-Crystal Clean stated.

President and CEO Brian Recatto commented, “Despite a significant decline in base oil netback, a soft demand market for base oil, and intentionally moving up the timing of our annual extended turnaround to the second quarter, we were still able to produce an operating margin percentage which was consistent with our second quarter conference call expectations.”

According to Recatto, the company made progress on lowering its pay-for-oil since the end of the second quarter. “Early in the third quarter of 2023, on a run-rate basis, our pay-for-oil has decreased by approximately [10 cents] per gallon, compared to our weighted average for the second quarter.”

The company noted that beginning with the 2023 fiscal year, it changed its financial reporting cycle to a calendar year-end and end-of-month quarterly reporting cycle, so the second quarter this year had five additional working days. Heritage-Crystal Clean estimated that the additional working days resulted in an increase in revenues of 8% in the second quarter when compared to the second quarter of last year for its environmental services and industrial & field Services segments. “Absent the significant decrease in base oil pricing, we would have otherwise estimated a similar impact in the oil business from the change in the fiscal quarter,” the company added.

On July 19, Heritage-Crystal Clean entered into a merger agreement to be acquired by an investment affiliate of J.F. Lehman & Co., a private equity investment firm, in an all-cash $1.2 billion transaction. Upon completion of the transaction, expected in the fourth quarter, Heritage-Crystal clean will become a privately held company, and shares of its common stock will no longer be listed on the Nasdaq Stock Exchange or trade in any other public market.

Cosan

Brazil-based Cosan’s Moove, its lubricants arm, earned $107.4 million reals (U.S. $21.5 million) in net income for the second quarter, a 24% drop from $142.1 million reals.

Net sales revenue for Moove rose 18% to 2.5 billion reals.

Moove’s combined lubricants and base oil sales volumes volume jumped 30% to 151,000 metric tons in the second quarter, compared to 116,000 tons.

Moove produces and distributes products under the Mobil and Comma brands, with operations in Brazil and other countries in South America – Argentina, Bolivia, Uruguay, and Paraguay – as well as in the United States and Europe – United Kingdom, Spain, Portugal, and France. It markets lubricants and other products for applications in the automotive and industrial segments, and also imports distributes base oils in the Brazilian market.