Heritage-Crystal Cleans oil business, including oil collection and rerefining, reported $30.9 million in sales for the quarter ending Sept. 7, up 3.4 percent from $29.9 million in the year-earlier quarter.
As a whole, Elgin, Ill.-based Heritage-Crystal Clean reported $1.3 million net income for the third quarter, on $67.6 million in sales. That is up from $1 million in net income on sales of $62.1 million, in 2012s third quarter. The company does not break out net income for its oil business segment.
Improved profitability was achieved due to efficiency gains resulting from increased throughput at the rerefinery as we began our project to expand the capacity of the plant, said Joe Chalhoub, Heritage-Crystal Cleans founder, president and CEO. Near the end of the third quarter, a portion of the increased capacity came on stream, allowing us to boost production to record levels.
Production at its Indianapolis rerefinery during the third quarter was 113 percent of the rerefinerys original nameplate capacity.
For the final four weeks of the third quarter, we were able to process feedstock at an annualized rate of over 60 million gallons, Chalhoub said. Upon completion of the project, planned for mid-next year, the plant should be able to process 75 million gallons of used oil annually, which will represent a 50 percent increase compared to our original nameplate capacity of 50 million gallons per year. Our margins in the oil business continue to be negatively impacted by depressed market prices for base lube oil.
Chief Financial Officer Mark DeVita stated that the companys oil business segment generated a 4 percent margin in the third quarter, compared to 1.9 percent in the second quarter of this year. The margin improvement was achieved despite a continued low base oil pricing market for the type of base oil we sell, DeVita noted.