Q4 2020 Heritage-Crystal Clean Inc Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the Heritage Crystal Clean and incorporated fourth quarter 2020 earnings Conference call.
Today's call is being recorded.
At this time all colors microphones are muted and you will have an opportunity at the end of the presentation and to ask questions.
Instructions will be provided at that time for you to queue up your question.
We ask that all callers limit themselves to one or two questions.
Some of the comments, we will make today are forward looking.
Generally the words anticipates believes could estimates expects intend may plan project should will be will continue will likely result.
And similar expressions identify forward looking statements.
These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward looking statements.
These risks and uncertainties include a variety of factors some of which are beyond our control.
These forward looking statements speak as of today should.
You should not rely on them as representing our views and the future.
We undertake no obligation to update these statements after this call.
Please refer to our SEC filings, including our annual reports on form 10-K, as well as our earnings release posted on our website for a more detailed description of the risk factors that may affect our results.
Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website.
Also please note that certain financial measures. We may use on this call such as earnings before interest taxes, depreciation and amortization or EBITDA and <unk>.
And EBITDA are non-GAAP measures.
Please see our website for reconciliations of these non-GAAP financial measures to GAAP.
For more information about our company. Please visit our website at Www Crystal clean dotcom.
With us today from the company are President and Chief Executive Officer, Mr. Brian Macondo, and Chief Financial Officer, Mr. Mark Davita.
At this time I would like to turn the call over to Brian Mccarthy. Please go ahead Sir.
Thank you Chris Good morning, everyone and thank you for joining us today.
This morning, we'll begin with a quick update on the impact of the pandemic and a brief review of our fourth quarter results and full year 2020 performance.
During the fourth quarter, we continued executing the company's pandemic response plan to combat the COVID-19 outbreak induced downturn.
And remained focus on ensuring the health and safety of our employees and their families.
And as well as those customers and we came in contact with.
To safeguard the wellbeing of our employees and decrease the spread of the COVID-19 virus, we continued to execute the following steps during the four quarter.
Provided appropriate personal protective equipment and sanitizers.
We utilize this staggered work schedules to increase social distancing.
Allowed high risk or other impacted individuals to work from home when possible.
Thoroughly cleaned and disinfected our facilities as needed and lastly, we closed facilities temporarily as needed.
And that contagion.
During the fourth quarter total loss time from employees off the job due to COVID-19 related health issues and potential exposure there was almost 7900 hours companywide.
On a normalized basis. This represents a 52% increase compared to <unk> experienced during the third quarter of 2020.
Without the cooperation of our dedicated employees and the execution of the previously outlined preventative measures and it's highly likely the number of lost hours would've been even higher.
Despite increased COVID-19 infection rates, we saw increased activity at our customers' locations during the fourth quarter compared to the third quarter.
And this provides us the opportunity to exceed our expectations for the quarter and produce very positive results and both of our reporting segments compared to our performance and the third quarter.
And the environmental services segment, we experienced strong sequential growth as we continued to improve from the onset of the impact of the COVID-19 pandemic during the second quarter.
Even after adjusting for the fact that our fourth quarter containing 20 additional work days our segment revenue growth was eight 7% compared to the third quarter our.
Our field services containerized waste and antifreeze businesses led the way with solid growth.
And continued topline growth allowed us to produce sequential improvement and our operating margin and operating margin percentage for the second straight quarter.
Our fourth quarter operating margin dollars increased by $2 1 million on a normalized basis compared to the third quarter.
Let me now focus on the oil business.
During the fourth quarter of fiscal 2020 oil business revenues decreased 2% to $41 1 billion compared to the fourth quarter of fiscal 2019.
The decrease in revenue was mainly due to lower revenue from base oil and re refinery byproduct sales partially offset.
All set by revenue generated from used oil collection charges.
Well then base oil we were able to exceed four quarter 2019 sales volume during the fourth quarter of 2020.
But were unable to overcome significantly lower base oil selling prices compared to the prior year quarter.
On a sales per working day basis are all business segment revenue decreased approximately four 4% compared to the prior year quarter.
Oil business segment operating margin improved five six percentage points to nine 1% and the fourth quarter of 2020 compared to three 5% during the same period of 2019.
The increase and margin was mainly due to the fact that we were and our net charge for oil position during the fourth quarter of 2020 compared to being in the net pay for oil position during the prior year quarter.
Our results also benefited from third party used oil feedstock costs and decreasing by 41 cents per gallon compared to the prior year quarter.
Mark will provide more detail regarding cost improvements and a few minutes.
Yes.
During the fourth quarter and throughout fiscal 2020, we continued to benefit from excellent execution from our re refinery team.
While we made the decision to shut down the re refinery for most of the month of May 2020, due to the drop in demand from the impact of the COVID-19 pandemic, we did not incur any significant additional unplanned downtime as we had and the previous two years.
This was the direct result of and mechanical integrity and critical spare parts program. We have worked hard to put in place over the past two years.
While re refineries are complicated operations, we believe our performance during 2020 demonstrates and we are and a better position than ever before the run the facility and a safe and consistent manner.
As more people receive COVID-19 vaccines, we believe our customers businesses as well as ours will continue to recover from the negative impacts caused by the pandemic.
We're optimistic this positive momentum will continue on both of our reporting segments for the remainder of 2021.
And our environmental services segment, while we expect to see continued sequential improvement from a revenue standpoint.
We believe our results and the current quarter, we'll still trail our record performance from the first quarter of 2020.
From an operating margin percentage standpoint during the first quarter, we will likely experience normal seasonal headwinds of a couple of percentage points compared to our results and the fourth quarter due to the impact of winter weather in many parts of the country.
However, beyond the first quarter, we expect to see quarterly revenue growth on a year over year basis for the remainder of 2021.
We also expect to see our operating margin approach, 27% and this segment by the end of the year.
From an oil business segment perspective, we were very excited about the start of 2021. This year began with base oil prices on the rise due to continued tight supplies as a result of less distillate demand and production.
Recently supply tightness was compounded by weather related challenges and mini golf coast production facilities.
Unless there is a significant increase and the production of distillate products such as jet fuel. We believe the tight base oil supply conditions will continue for most of the first half of 2021, which should provide support for higher base oil prices.
While we've experienced downward pressure on used oil collection charges during the fourth quarter as the price of crude oil has continued to rise we expect to remain on a net charge for oil position for at least the first half of 'twenty and 'twenty one.
These improved spread dynamics should allow us to produce oil business segment operating margin percentages and the mid teens during the first half of 2021.
Before I turn things over to Mark I want to highlight a few items related to our ESG initiatives.
First during the fourth quarter, we accepted the board challenge that a black director to our board and last month, we completed that challenge.
As a result, we welcome Tony change to our board of directors.
Tony already participated in this first board meeting last week, and we look forward and many future contributions from him.
Second earlier this year, we launched a formal sustainability program.
While the foundation of our company was built on sustainability.
Activities, such as turning to used oil waste antifreeze and waste solvent and reusable products, we realized the need to create a formal program to better inform our stakeholders and the general public about the sustainability aspects of our business.
As a result of the launch of this program we plan on issuing our first sustainability report during the second half of this year.
And we truly believe we have a great story to tell and look forward to sharing it with everyone.
With that Mark will walk us through our fourth quarter financial results.
Thanks, Brian it's great to be with everyone. This morning.
And 2020 and generated $406 million and revenue compared to prior year revenue of $444 4 million, a decrease of $38 4 million or eight 7%.
The company's 2020 fiscal year was comprised of 256 working days compared.
253, working days in fiscal 2019.
And our sales per working day basis revenue decreased approximately nine 7% and fiscal 2020 compared to the prior year.
The decrease in revenue was primarily driven by a negative impacts on the COVID-19, pandemic and related shelter and place orders.
Since experiencing a 24, 3% revenue decline on a year over year basis during the second quarter amid the depth of the pandemic per year over year revenue deficit and strength of 16, 9% and the third quarter and only four 9% and the fourth quarter.
Net income attributable to common shareholders was $5 3 million or <unk> 23 per diluted share for the fourth quarter of 2020.
This compares to a net loss attributable to common shareholders of $2 2 million or <unk> <unk> per diluted share mid year earlier quarter, which included an $11 million pre tax charge for a class action lawsuit settlement pertaining to fuel surcharges.
From a reporting segment standpoint, the environmental services segment reported revenue of $90 9 million, a decrease of $6 million or six 2% during.
During the quarter compared to the fourth quarter of 2019.
The decrease in revenue was mainly due to the lingering impact on the COVID-19 related volume decline and.
And our field services parts cleaning and containerized waste service lines, partially offset by favorable pricing and our parts cleaning business.
On a sales per working day basis, Environmental services segment revenue decreased approximately eight 5% during the fourth quarter compared to the prior year quarter.
Our profit before corporate SG&A expense as a percentage of revenue was down slightly to 24, 6% compared to 25, 1% and the year ago quarter. The decline in margin was mainly due to lower revenue and higher containerized waste disposal expense.
Clean glycol costs and depreciation expense per trups, partially offset by lower field services related disposal costs workers' compensation expense and sulfur and costs.
On the positive side, our fourth quarter operating margin was 120 basis points higher and the same figure from the third quarter of 2020.
As Brian mentioned, our oil business segment revenue was down slightly despite base oil sales volume of $16 7 million gallons, which was up approximately 15% compared to the fourth quarter of 2019.
Unfortunately, our average base oil netback during the fourth quarter dropped <unk> 29 per gallon compared to last year.
We also experienced netback declines for sales of our re refinery coal products and our fall compared to the same quarter last year.
The year over year revenue decline and the fourth quarter was mostly offset by the increase and used oil collection charges.
The improvement from a net pay per oil position in the fourth quarter of 2019 to a charge for oil position in the fourth quarter of 2020 is 27 per gallon.
From a profitability standpoint oil business segment operating margin was $3 7 million or nine 1% of segment revenue during the fourth quarter.
This represents a fourth quarter record on both a dollar value and percentage basis.
The largest drivers for this improvement where the overall net charge for oil position and a significantly lower cost per gallon for third party feedstock, which Brian previously mentioned.
However, we also experienced lower expenses for shutdown maintenance health and welfare and workers' compensation.
Despite this increase and the nameplate base oil capacity and the re refinery and 47 million gallons in the fourth quarter of 2019 to 49 million gallons and the most recent quarter, we were still able to operate the re refinery at 100% based on capacity during the fourth quarter.
Our overall corporate SG&A expense of $16 3 million declined by $5 5 million compared to last year. Despite the fact, the fourth quarter of fiscal 2020, and two more working days and the fourth quarter and fiscal 2019.
The decrease was mainly driven by lower share based compensation costs travel expense and bonus expense.
Partially offset by higher software licensing fees.
Corporate SG&A expense as a percentage of revenue was 12, 3% compared to 12, 1% and year ago quarter, driven higher by the decline in revenue.
EBITDA of $16 4 million was a record and up $12 3 million compared to the year ago quarter. Adjusted EBITDA of $18 9 million was also a record and represents 14, 3% of revenue and a 13, 1% increase compared to the prior year quarter.
The company's effective income tax rate for fiscal 2020 was 28, 8% compared to 27% and fiscal 2019.
The rate increase is principally attributable to state income taxes, and the impact of non deductible expenses.
For the quarter, we generated $22 million and operating cash flow and $15 2 million of free cash flow, resulting in an end of year cash balance of $67 6 million, which was $14 9 million higher and at the end of the third quarter.
Despite the continued challenges presented by the COVID-19 outbreak our balance sheet grew stronger.
And we plan to leverage this strength to continue to drive value for our shareholders.
And I'm happy to report that our acquisition related activities on both lines as we look to utilize our strong balance sheet to capitalize on inorganic growth opportunities during the remainder of 2021.
In conclusion, we are.
<unk> pleased with the quarter over quarter improvement and both of our segments. Despite the challenges presented by the COVID-19 pandemic.
And as improvement would not have been possible without the unrelenting efforts of our employees as they strive to help our customers not only recover from this devastating pandemic, but help them execute the steps to allow their businesses to thrive and the post pandemic economy.
This concludes our prepared remarks.
I'll now turn the call back over to Chris to take your questions.
Ladies and gentlemen to ask a question you will need to press star one on your telephone keypad again Thats star one to.
To withdraw your question press, the pound or asking.
Please standby, while we compile D Q&A roster.
Our first question comes from Michael Hoffman with Stifel. Your line is open.
Good morning, Brian and Marc and thanks for taking the questions Hope all of you are well, yes, Hey, Michael and I'll.
And I Hope you are too we are thank you.
On environmental services can you frame, where you are on parts washer service cycles, and particularly since your mix is.
Approximately half industrial and half transportation and can we characterize where you are coming into this year relative.
To the full recovery of.
Activity.
I mean, I think we are.
And we're kind of in line with some of the general economic metrics you see I don't think we're ahead and we might get into and I think we're a little bit ahead on used oil collection as it relates to things like miles driven and the recovery, there, but and parts cleaning I think we're in line on a normalized basis, we had a six 5% increase over Q3, if you have that.
Throughout all of our Crazy Q4 calendar stuff and parts cleaning.
We're seeing gross.
Volume was still down price was up though I think Brian mentioned net on our prepared remarks.
We had kind of mid single digit price increase which was great and that's not much different than what we typically experience with this more mature business, it's mostly price and usually we don't see the volume declines and non pandemic environments, but but we're still kind of in that.
Same pace I guess and some of your general economic indicators at least Thats my feel and Brian.
Great Yeah, and also I, absolutely agree and Mike.
And Michael with vehicle miles driven being down roughly 10%, where we've been tracking a little bit ahead of that.
Vehicle miles driven.
We're running at about as Mark said, roughly 5% off of where we were pre pandemic.
And we think as we look out and economic indicators with GDP and we expect to see some meaningful growth and the back half of the year. We think we will start trending back to more 2019 numbers.
By the end of the second quarter as our hope provide.
Provided we don't see any further.
COVID-19 type slowdowns, but everything for us is positive and point and the direction that will begin to see.
And the recovery back to 2019 levels and the U S business by the end of the second quarter, certainly and the third quarter.
Okay and then.
And I think you've answered my question, then which was if it's 5% it's about 20 million of <unk>.
Reopening revenue and and your and what Youre, saying is on a run rate basis youre going to be at that.
Divide that by four sort of five nine and a quarter roughly I mean, I get it and I got to do the 12 week time, but.
Through the second half of the year. So there's sort of this there's assumption of picking up about 15 million of.
That.
That pandemic related.
Displacement.
And 21, and then there'd be a rollover of about $4 five into 'twenty two plus there are other underlying organic growth.
Yeah, although it got absolutely makes sense.
Alright Cool and then last question for me is it.
Is there a particular issue that drove catalysts catalysts have always been the hot button oops and.
And the used oil side, so with it was the mix of the oil coming at your different because of the changing and driving and whereas at sourcing or what drove the above average catalyst shoes.
I think we've talked about it a little bit on our last conference call. We're in the middle of 10 year tank inspections.
So we've been operating and with smaller feed tanks, which makes our feed quality and.
The less than optimal.
Put it mildly and we.
We just completed the turnaround of our used motor oil tag. So it's back on operation. This quarter that will begin to help our quality that was a primary driver for the and.
Additional catalysts expense and the fourth quarter.
And we're expecting pretty good production in Q1, we've got one five day turnaround scheduled for the first quarter, which were in the middle of right now and just the simple <unk>.
Routine cleaning for us.
Going to be battling these tank inspections throughout the years because.
And it's 10 years into the purchase of the tag. So we'll get that done. This year, we don't think it'll cause and the operating problems beyond what we've already experienced with feed quality now that we're done with the fleet. So.
So we feel pretty good and we think production will be and the 11 to 12 million gallons and Q1 so.
And that inconsistent and I think we were 10 point.
Five last year.
We had a few problems and Q1, but we.
We feel positive about the plan going into this year and obviously the spreads look much better as mark talked about and his prepared.
Prepared remarks pretty excited about base oil price and these days best I'll seize as being the CEO.
Terrific. Thanks for that added color I appreciate it and welcome thanks Michael.
Our next question is from David Manthey with Baird. Your line is open.
Hi, David Hi, Good morning, everyone. Good morning volume.
Brian you mentioned.
That by the end of the year Es operating margin could be and the 27% range are you referring to a quarterly basis or is that the annual average.
Yes definitely be this is mark David is definitely be ramping up to that we expect to see some headwinds just due to normal seasonality, which really to be honest. If you look back at 2020.
People, probably don't forget, but it was a very mild winter for the northern and eastern part of the U S. So.
If you only go back one year, you won't see it but you've covered on long enough to know that usually there is.
1% to three percentage point headwind and our.
And our margin there. So certainly we're not going to come out on the box this year with that but we will build up to that at least on a run rate basis as our thought.
Okay that makes sense.
And provided David that we see the revenue bump that we've talked and I've, just mentioned and my conversation with Michael.
Mhm.
Okay, and when you drill under the direction of Q3 to see the revenue and the margin improvement.
Okay. Okay, alright, thank you and from a cost standpoint.
I know during the pandemic.
There had been some wage cuts and some furloughed employees and things like that but you are in the process and resetting.
Those to more normal levels. So as we look at the fourth quarter and its entirety.
Labor costs relatively normal and the fourth quarter or should we expect some additional reset as we move into the first quarter of 'twenty one.
If you look at our field labor.
And did a lot of things throughout the pandemic to make sure.
And these being frontline workers and legitimate and they not only other and coming to work every day, but theyre going to five or eight or 10 different places to work. So we took steps to.
And it did result for some people keep it and then all of it wasn't completely intentional and Matt manner, but we help soften that low so we don't expect as we come completely out of this that we'll see.
And from that standpoint.
Biggest impact as you might expect as far as kind of on that.
Return to work comp, we have gradually shifted back and our sales team has done a management team has done a great job of shifting that compensation and a gradual way back to what our traditional plan is and we're going to be at that rate sometime here in the first half of 'twenty.
On our 2021, meaning compensation completely based on the same formula that we were pre pandemic. So I think it's going to be.
Pretty limited as far as.
The impact that labor is on the margin anyway.
And there's no I agree and from a pure head count standpoint, David we're probably.
Short about 80 people in the field and on.
And I think Mark was referencing that will begin to bring those people back throughout the course of the years revenue begins to decline.
Okay and then the last question I believe you noted that price paid to third party collectors is down could you talk about that dynamic do you expect that to continue.
Yes, we expect it to continue I mean.
And you've heard the other our other competitors talk about IMO 2020, and the ACSF AUM market, we're not seeing an abundance of people aggregating used motor oil for for shipment overseas. So we still think the preferred method for third parties and the ship and do a re refinery.
And we're seeing pretty good demand for third party oil.
Which means we get a debt to pay less for it because of the demand is still strong I don't really see those dynamics change and certainly we've seen crude oil price you can go up and the last 30 days and in a meaningful way I do thing.
Because of the shale plays and Opex and ability to control themselves and we.
We'll begin to see that and level off as we hit the summer I don't think crude prices are going to continue to the rocket up which should make it fairly consistent for us from a feedstock standpoint, we hope that that's what we want to see so I'm optimistic that we'll be able to keep the price of third party oil and manageable.
And we're seeing pretty good volume, David and the plant now pretty good demand.
Very good thank you Youre welcome.
Thanks, Ed.
Our next question is from Jim Ricchiuti with Needham Your line is open.
Jim Hi, good morning.
Hi.
Hello, and thanks for taking the question and just.
I was surprised that the increase but maybe not just given what we've seen from the pandemic and the.
Last time hours and the quarter versus <unk>.
Q3.
How is that tracking I'm, just curious thus far and Q1.
It's much better and Q1 and I think we are unfortunately dealt with the impact of the holidays.
And when do you have.
A lot of family gatherings, and I think people were just overall frustrated with the fact that they couldnt get and all that got out more on the fourth quarter, mainly driven by <unk>.
Time off and holidays, and we experienced a rising case counts and a November post Thanksgiving and and the.
Christmas holidays, but its certainly way more manageable today.
We were literally deal and what we were dealing with it every day.
The fourth quarter felt like and it's much better to the much more manageable.
And that's good and.
And obviously more of our employees or <unk>.
Accepting the vaccine.
Yeah, I think you're beginning to see some herd immunity out there we definitely see the case count consistent with the rest of the country. If you just read statistics way down.
From where it was and the fourth quarter.
Got it and.
It may be too early to tell but I'm just wondering if you look at the business and perhaps the business if you.
See any any lasting structural changes per.
Perhaps to the business.
And from the pandemic with respect to customer attrition or is it still a little too early to tell if there's been any kind of lasting change to the customer base.
I would suggest it's probably too early to tell we certainly have not seen it.
And then.
We're on the phone with our branch managers on BSM is on a regular basis theyre not.
C and shutdowns by our target customer base, which would be <unk>.
Small manufacturers, so and you know how many customers we have.
90000, plus and both divisions combined and we're not we're not seeing it and they were not seeing a lot of closures out there. So we're not seeing any fundamental structural changes to our business.
Okay and <unk>.
Last question you noted that.
And pickup in M&A activity you guys are out there looking and I'm just wondering.
How would you characterize the pipeline and the opportunities and maybe the valuations that are out there.
Yes, I'll, let mark talk a little bit devaluation, and I'll talk to opportunities and I think with the potential.
Change and capital gains.
<unk> structure, we're seeing a lot of smaller tuck in opportunities we've got.
A long list of pipeline opportunities I think we mentioned on the call.
Last quarter, and we think we will get a couple of deals tuck in deals closed and the first half of this year pretty excited about it because it continues to expand our.
Our footprint and gives us some capabilities at the operating level of plant level that will enhance our profitability. So long long pipeline of <unk>.
Smaller deals for us.
And I think youll see some larger deals and it'll be put in play this year.
Obviously, there's a lot of money available and multiples are pretty high.
And we'll have to manage that and.
And look for opportunities with synergies.
Lloyd overpaying for acquisitions, but the pipeline as Mark talked about very long and we think we'll get some deals close this year and I don't know if you want to opine on some of this off I would just say, Brian mentioned and valuation if you compare let's say, where we were a year ago.
You can say there is some nuance there Jim as I'm sure you can appreciate it.
And measure and it has let's say.
We're multiples of earnings our multiples of EBITDA.
And.
Method to define valuation you can say theyre back.
And it's pretty property pre pandemic and it also depends on what earnings number are you talking about and something thats been.
Aggressively adjusted or <unk>.
We had on your kind of Covid and so we're going to take out X dollars.
Add back I should say.
And so.
Without getting too nuance I would say it is probably and then same range debt. It was it's pretty much back to what it was pre pandemic, which is to say, it's not and sheet market.
Got it okay. Thanks, a lot good luck guys.
Thank you.
Thanks, Jim.
Ladies and gentlemen, as a reminder, SKU for any question you will need to press star one on your telephone keypad.
Our next question is from Kevin Steinke with Barrington Research. Your line is open hi, Kevin.
Good morning, good morning.
So you talked about your optimism with regard to base oil prices just wondering.
How quickly you think you can be doing begin to realize some of the benefits of.
These improved.
Posted prices, we've seen or has that already started to flow through here and the first quarter.
Yeah, it's certainly starting to flow through and the first quarter, we can see.
Inc.
A meaningful change and base oil pricing since the end of the year driven by the fact that on.
Market is under supplied and because of refining refinery utilization and refineries are down there, but utilization is probably off last statistic I saw was 13%. So refined products are off 10% and theres just not a need for.
Jet fuel and distillate products until we begin to.
Fly again travel again to the levels, we were prior to the pandemic. So I think we'll benefit from that as we've said our prepared remarks through the first half maybe the first three quarters of the year.
And its already beginning to flow into our income statement and a meaningful way.
If you look at Kevin and this this is going to be comparing.
Quarterly average from Q4.
And time so.
And it's in a rising price environment, so it could be a little dangerous, but given that context, and just laid out and looking at cost.
Theres been an Argus is one of the people we.
And look to to get a feel for the market and they are in their latest reported last Friday.
That market was up.
Almost 70.
From the Q4 average to one at one point and time, yes, and the last week so.
That doesn't mean.
While price is exactly up that much but that can give you a flavor for whatsapp pushing through and again net debt at $2 roughly on average improve.
And that Groupon, but.
And so the 102 hundred viscosity products of around $2 60, a gallon and what that translates to at the end of last week that has been on the right and so it hasn't been that way by any and any stretched a whole quarter, so far, but it's going on and a great direction.
Okay.
Good first quarter as we mentioned in our prepared remarks and oil.
Okay, Great that's helpful.
And did you have any.
Targets in terms of base oil production.
Either and the first quarter or 2021 that you could discuss yeah. I think I mentioned on earlier calls that were shooting for between 11, and 11 5 million gallons and the first quarter.
Yes.
Overall capacity and in terms of production is 49 million gallons and we see no reason to not get there absent and issued.
We forecast at 28 days of maintenance for the year, which is consistent with last year, we always budget a.
A few extra days for for issues, obviously, we battled a hell of a winter so far but knock on wood, we've been able to get through it without any major issues contrary to a lot of refineries that have struggled with the weather.
So all in all we're pretty.
<unk> and to get close to that.
Printed capacity.
Okay great.
And lastly, do you have any.
Our growth investments our growth plans.
And that you're thinking about or for the environmental services segment and 2021 in terms of branch openings or adding new sales resources or is that maybe something that.
You're just going to wait on until we kind of get back to more normal.
Business activity levels.
I think the game plan and well I know what the game plan and as our plans for this year to do the tuck in acquisitions and build around those tuck ins versus opening up pure organic locations. The other thing and as I mentioned on an earlier call. We'll certainly bring back furloughed reps were still do.
And sheer numbers so that on.
Will give us.
Growth is our customer and the reason, we haven't done and so far and it's very difficult to get into.
New customers I mean, it's almost impossible because of the pandemic, we think as we move deeper into the year with the vaccines the herd immunity or customers will open back up our target customers will open up we'll begin to bring back new reps, which will give us the.
The lift that we talked about getting our revenue back to 2019 levels.
But I doubt, we do any any organic offices, unless we see an opportunity or pick up a corporate account and need to open an office, but we will certainly build around these tuck in acquisitions to get and new marketplaces.
On the answers your question.
It does yeah. Thank you alright, well.
Congratulations on the nice results here, yeah. Thank you, Kevin and good quarter for US, we're very happy with.
Ladies and gentlemen, this concludes the Q&A session and today's conference call.
Thank you for your participation and at this time you may now disconnect.
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