As a whole, Elgin, Ill.-based Heritage-Crystal Clean reported $1 million in net income for the third fiscal quarter ending Sept. 8, on $62.1 million in sales or 6 cents per diluted share. That compared to $608,000 net income on sales of $37.2 million, or 4 cents per diluted share, in 2011s third quarter. The company doesnt break out net income for its oil business segment.

The rerefinery in Indianapolis is expected eventually to recycle up to 50 million gallons of used oil and produce up to 30 million gallons of API Group II base oil, or about 2,000 barrels per day.

During the quarter we fed 10 million gallons of used oil into the rerefinery and we increased our base oil production rate to 89 percent of nameplate capacity, up from 69 percent in the previous quarter, Heritage-Crystal Clean founder, President and CEO Joe Chalhoub said. We continue to work through the logistical and operational challenges which are typical with a new rerefinery, but we are pleased with our overall progress.

Heritage Chief Financial Officer Mark DeVita said that while the company continues to grow its oil business revenue, its margins in the segment remain under pressure.

From the second quarter to the third quarter there was a decrease of approximately 44 cents per gallon (a 10 percent decrease) in the average spot market price for base oil, as established by major refiners, DeVita said. The decline in pricing negatively impacted our revenue and margin for the quarter. We also continued to experience high transportation costs and high used oil collection costs due to our large number of new oil collection routes. As we collect and process more used oil, we expect our margins in this segment to improve.