Brian Recatto: And we’ll continue to base load these non-hazardous waste processing facilities, which over time, as you increase the volume going into these sites, you’re going to naturally improve margins. It’s a whole new endeavor for us. Obviously, historically, we never processed any waste and we processed 88,000 containers this year. With the same footprint, we’ll process another 30,000 containers in 2023 and that’ll continue to grow. We’re adding some mechanical processing capabilities of one of our facilities, which will greatly enhance the throughput. So that’ll begin to drive the cost structure down as we base load the facilities.
Kevin Steinke: All right. Thanks. Thanks for the insight. That’s all I had. Thanks.
Brian Recatto: Thank you.
Operator: Your final question comes from the line of Gerry Sweeney from ROTH Capital. Your line is open.
Gerard Sweeney: Hey. Good morning, Mark and Brian.
Brian Recatto: Hi, Gerry.
Mark DeVita: Hi, Gerry.
Gerard Sweeney: I got dropped for a few minutes, so if I repeat a question just let me know and I’ll look at the transcript. But just following on a little bit on the waste disposal side, you mentioned 88,000 barrels this year, adding 30,000. How much €“ well, how much do you want to internalize in terms of maybe percentage of business? And at some point some of these waste streams are potentially could be inconsistent in certain areas. Would you actually take some waste from third parties? And is there an opportunity from that perspective?
Brian Recatto: Yes. Good question. We are taking some waste already from third parties, so that’s certainly going to be an avenue that we pursue. But in terms of number of containers last year, 280,000 containers, we touched over the course of 2022. And as we build out this network, I’d like to see the internal processing get to a 70% level, which I think is doable based on the type of waste streams that we’re currently picking up. And as you know, and I’ve mentioned on other calls, we’re permitting some part B facilities because we think it’s important. As we pursue long-term growth in creating shareholder value, we want to be able to take waste, we want to be able to enhance the cost structure by changing the physical state, consolidating it, shipping it out in bulk versus shipping it out in containers.
Those are all things that we’re going to work on. But near-term, with our current capabilities and as we add plants geographically, we have a goal of getting to 70% internal processing.
Gerard Sweeney: Got it. Thanks. And then this question may have been asked, but on the split of the ES to ES and field services over time, do those same two businesses have, I know you give a little guidance on where margins will be, but over the long-term, are those similar margin businesses or is one a little better than the other?
Brian Recatto: Our legacy ES business will have higher margins, especially as we base load the waste treatment plants. ES is being more project-driven, but very important our field services business performs well. Should over the long-haul come in a couple of percentage points lower than our traditional branch business.
Gerard Sweeney: And on that branch business, historically, well I should €“ I believe historically if you target around 27%. Is that still the case or is that change a little bit with the split out?
Brian Recatto: Yes. I’m going to €“ we are going to get it back in 27%.
Gerard Sweeney: Got it.
Brian Recatto: No doubt. I mean, it’s been a business for 35 years. So last couple of years have been unbelievably difficult from a supply chain standpoint and understanding that a lot of our waste has to be third-party to a competitor. Most of these competitors have been overloaded with waste and backed up and have tons of pricing power. If you’ve heard from their conference calls, that has negatively impacted us. Our goal is to continue to capture market share. We’ve got to be competitive. So that’s why we worked really hard over the last couple of years to build out our own capabilities and we’re going to keep doing that because we want to be a full service environmental company that compete with anybody.
