1Q Earnings Wrap-up


The first quarter saw a rebound in net income for Calumet, increased revenue for rerefiner Heritage-Crystal Cleans oil business segment, and reduced third-party revenues for Clean Harbors oil rerefining and recycling business segment, all compared to the same period of 2014.


Calumet Specialty Products Partners L.P. reported net income of $23.8 million for the first quarter, up from a $49.8 million net loss in 2014s first quarter.

The Indianapolis-based companys first quarter sales slid to $1 billion, down 23.1 percent from $1.3 billion.

First-quarter sales volumes for specialty products rose in the first quarter, to 26,079 barrels per day, compared to 24,594 b/d in the year-earlier quarter. Lubricating oils reached 12,090 b/d, up from 10, 617 b/d a year earlier. Packaged and synthetic specialty products declined to 1,491 b/d in the first quarter, down from 1,554 b/d. Other fourth-quarter totals included 9,879 b/d solvents and 1,707 b/d waxes, each up from first-quarter 2014 figures.

Calumet said it now expects to complete its Louisiana, Mo., esters plant expansion during the third quarter of 2015, increasing production capacity 35 million pounds per year to reach a total of 75 million pounds/year. Esters are a key base stock used in the aviation, refrigerant and automotive lubricants markets.

Clean Harbors

Norwell, Mass.-based Clean Harbors oil rerefining and recycling business segment reported $96.8 million in third-party revenues for the first quarter, down 24.9 percent from $128.9 million a year earlier. Third-party revenues represent the refining groups sales of base oil, blended and reclaimed fuel oil and a small amount of byproducts.

Clean Harbors Chairman and CEO Alan McKim noted the company substantially reduced its average pay-for-oil cost during the quarter, and it is expected to relieve some of the margin compression the Clean Harbors has experienced in its oil rererefining and recycling segment.

We did not realize that benefit in the first quarter of 2015 because waste oil inventory, collected when PFO costs were higher, was still being processed, McKim said in the companys quarterly earnings news release. The processing of that higher-priced inventory, and the decline in base oil pricing late last year, produced a loss in the segment in the first quarter. However, with average PFO costs soon to be approaching zero, we are encouraged about the prospects for the oil rerefining and recycling segment in 2015.

In his business outlook, McKim added that within oil rerefining and recycling, the reduction in PFO and transportation costs will enable us to more than offset the spread compression caused by lower base oil pricing.

Clean Harbors acquired rerefiner Evergreen Oil out of bankruptcy for $60 million in 2013 and Safety-Kleen for $1.3 billion in December 2012. Evergreen Oils Newark, Calif., rerefinery – now considered part of Safety-Kleen operations – has 1,150 barrels per day of API Group II capacity. Safety-Kleens East Chicago, Ind., rerefinery has 800 b/d of Group I and 4,200 b/d of Group II capacity. Its rerefinery in Breslau, Canada, has 700 b/d of Group I and 1,200 b/d of Group II capacity.

Heritage-Crystal Clean

Heritage-Crystal Cleans oil business segment, which includes used oil collection and rerefining activities, reported $31.2 million in total revenues for the quarter ending March 28, up 15.1 percent from $27.1 million in 2014s first fiscal quarter.

As a whole, the company posted a $900,000 net loss, on $84 million in sales. That compared to a $1.6 million net loss on $66 million in sales in the year-earlier period. The company doesnt break out net income for its oil business segment.

Base lube oil gallons sold increased 33 percent over the first quarter of fiscal 2014, but during the first quarter of fiscal 2015, the average spot market price for the type of Group II base oil we produce declined approximately 35 percent compared to the first quarter of fiscal 2014, Elgin, Ill.-based Heritage-Crystal Clean said in its quarterly earnings news release.

During the first quarter, we saw the price of crude oil stabilize and start to moderately strengthen towards the end of the quarter, Joe Chalhoub, Heritage-Crystal Cleans founder, president and CEO, said in its earnings news release. Due to negative market conditions, we responded by decreasing the weighted average price paid to generators for their used oil by over 45 cents per gallon from the fourth quarter of fiscal 2014 to the first quarter of fiscal 2015.

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