Market Overview

Vertex Energy, Inc. Announces 2018 Second Quarter and Year-To-Date Financial Results

Share:

Revenue increased 27%, Gross Profit jumped 86%

Gross Profit Margin was 22%, Net Income Earnings Per Share of $0.03

Conference call to be held today at 9:00 A.M. EDT

HOUSTON, Aug. 09, 2018 (GLOBE NEWSWIRE) -- Vertex Energy, Inc. (VTNR), a specialty refiner of alternative feedstocks and marketer of high-purity petroleum products, announced today its financial results for the second quarter and six months ended June 30, 2018.

FINANCIAL HIGHLIGHTS FOR SECOND QUARTER OF 2018

  • Consolidated revenue increased to $46.9 million, a 27% increase from the second quarter of 2017.
  • Gross profit was $10.1 million, an increase of 86% from the second quarter of 2017.
  • Gross profit margin was 22%.
  • Total overall volume declined 7% from a year ago.
  • Consolidated per barrel margin increased 102% over the same period a year ago.
  • Net income available to common shareholders was $1.4 million, or $0.03 per share.

FINANCIAL HIGHLIGHTS FOR FIRST SIX MONTHS OF 2018

  • Consolidated revenue increased to $88.3 million, a 23% rise from the same period in 2017.
  • Gross profit was $16.4 million, an improvement of 73% from the prior year.
  • Gross profit margin was 19%.
  • Total overall volume decreased 5% from a year ago.
  • Consolidated per barrel margin increased 83% over the same period a year ago.
  • Net loss available to common shareholders was $2.0 million, or a loss of $0.06 per share.

Benjamin P. Cowart, Chairman and CEO of Vertex Energy, Inc., stated, "We are pleased with our second quarter financial results, as our capital investments continue to yield positive results. Our spreads at both the Marrero and Heartland facilities were strong, while there was high demand for both base oil and fuels. Our gross margin and net income also showed improvement year-over-year."

Mr. Cowart added, "We are encouraged by our business operations and financial performance in the second quarter. Based on these results, we believe that momentum can carry over into the second half of 2018. We continue to see higher production volumes and better sales for our products at both of our facilities. Also, our collected volume, which represents the volumes we collect with our own equipment and provides a significant margin contribution, rose 22% year-over-year and puts us on target to collect 30 million gallons at the end of 2018. We collected 26 million gallons of used motor oil in 2017. We remain committed to our capital funded project timeline."

SECOND QUARTER 2018 FINANCIAL RESULTS CONFERENCE CALL DETAILS

Management will host a conference call today at 9 A.M. EDT. Those who wish to participate in the conference call may telephone 1-877-869-3847 from the U.S. and International callers may telephone 1-201-689-8261, approximately 15 minutes before the call. A webcast will also be available under the Investor Relations section at www.vertexenergy.com.

A digital replay will be available by telephone approximately two hours after the completion of the call until November 15, 2018, and may be accessed by dialing 1-877-660-6853 from the U.S. or 1-201-612-7415 for international callers using conference ID #13681767.

ABOUT VERTEX ENERGY, INC.

Vertex Energy, Inc. (NASDAQ:VTNR) is a specialty refiner of alternative feedstocks and marketer of high-purity petroleum products. With its headquarters in Houston, Texas, Vertex is one of the largest processors of used motor oil in the U.S. and has processing capacity of over 115 million gallons annually with operations located in Houston and Port Arthur (TX), Marrero (LA), and Columbus (OH). Vertex also has a facility, Myrtle Grove, located on a 41 acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydroprocessing and plant infrastructure assets, that includes nine million gallons of storage. Vertex has implemented a cost-effective strategy for building its feedstock supply by establishing a successful self-collection and aggregation system. The Company has built a reputation as a key supplier of Group II+ and Group III base oils to the lubricant manufacturing industry in North America. For more information on Vertex Energy please contact Porter, LeVay & Rose, Inc.'s investor relations representative Marlon Nurse, D.M. at 212-564-4700 or visit our website at www.vertexenergy.com.

Investor Relations Contact:
Marlon Nurse, D.M.
Senior Vice President
212-564-4700

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management's view of Vertex Energy's future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "believes," "hopes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Vertex Energy, its divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents Vertex Energy files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Vertex Energy's future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex Energy cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex Energy undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex Energy.

Vertex Energy, Inc.
Reconciliation of Net Income (Loss) attributable to Vertex Energy, Inc., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA*

       
    For the Three Months Ended For the Six Months Ended
    June. 30 2018       June. 30, 2017       June. 30 2018       June. 30 2017  
Net (Loss) Income                          
Attribute to Vertex Energy, Inc. $ 2,530,068     $ (1,867,506 )   $ 271,446     $ (5,063,914 )
Add (deduct):                          
Interest Income   (659 )     (2,277 )     (659 )     (4,229 )
Interest Expense   847,456       618,448       1,649,971       1,954,935  
Depreciation and amortization   1,733,076       1,645,030       3,427,175       3,245,090  
                           
EBITDA*   5,109,941       393,695       5,347,933       131,882  
                             
Add (deduct): Stock-Based Compensation   183,750       148,736       329,721       297,473  
                             
Adjusted EBITDA $ 5,293,691     $ 542,431     $ 5,677,654     $ 429,355  
                             

* EBITDA and adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.

EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense. EBITDA and adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:

  • EBITDA and adjusted EBITDA do not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
  • EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs;
  • EBITDA and adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;
  • Although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements; and
  • Other companies in this industry may calculate EBITDA and adjusted EBITDA differently than Vertex Energy does, limiting its usefulness as a comparative measure.

VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

  June 30,
 2018
  December 31,
 2017
ASSETS      
Current assets      
Cash and cash equivalents $ 1,718,830     $ 1,105,787  
Accounts receivable, net 12,589,375     11,288,991  
Federal income tax receivable 274,423      
Inventory 8,461,737     6,304,842  
Prepaid expenses 1,313,173     1,771,832  
Total current assets 24,357,538     20,471,452  
       
Noncurrent assets      
Fixed assets, at cost 67,226,898     65,237,652  
  Less accumulated depreciation (18,945,357 )   (16,617,824 )
  Fixed assets, net 48,281,541     48,619,828  
Goodwill and other intangible assets, net 13,666,774     14,499,354  
Federal income tax receivable

 
    274,423  
Other assets 646,359     440,417  
TOTAL ASSETS $ 86,952,212     $ 84,305,474  
       
LIABILITIES, TEMPORARY EQUITY, AND EQUITY      
Current liabilities      
Accounts payable and accrued expenses $ 12,265,972     $ 10,318,738  
Dividends payable 548,904     420,713  
Capital leases-current 121,864      
Current portion of long-term debt, net of unamortized finance costs 906,548     1,616,926  
Derivative commodity liability 46,614      
Revolving note 3,774,730     4,591,527  
 Total current liabilities 17,664,632     16,947,904  
Long-term liabilities      
  Long-term debt, net of unamortized finance costs 14,532,663     13,531,179  
Capital leases-long-term 317,437      
Contingent consideration 236,680     236,680  
Derivative warrant liability 2,201,246     2,245,408  
Total liabilities 34,952,658     32,961,171  
       
COMMITMENTS AND CONTINGENCIES (Note 3)      
       
TEMPORARY EQUITY      
Series B Convertible Preferred Stock, $0.001 par value per share;
10,000,000 shares designated, 3,499,059 and 3,427,597 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively with a liquidation preference of $10,847,083 and $10,625,551 at June 30, 2018 and December 31, 2017, respectively.
7,931,530     7,190,467  
       
Series B1 Convertible Preferred Stock, $0.001 par value per share;
17,000,000 shares designated, 13,105,989 and 13,151,989 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively with a liquidation preference of $20,445,343 and $20,517,103 at June 30, 2018 and December 31, 2017, respectively.
16,100,770     15,769,478  
Total Temporary Equity 24,032,300     22,959,945  
EQUITY      
50,000,000 of total Preferred shares authorized:      
Series A Convertible Preferred Stock, $0.001 par value;
5,000,000 shares designated, 419,859 and 453,567 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively with a liquidation preference of $625,590 and $675,815 at June 30, 2018 and December 31, 2017, respectively.
420     454  
       
Series C Convertible Preferred Stock, $0.001 par value;
44,000 shares designated, 31,568 and 31,568 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively with a liquidation preference of $3,156,800 and $3,156,800 at June 30, 2018 and December 31, 2017, respectively.
32     32  
       
Common stock, $0.001 par value per share;
750,000,000 shares authorized; 33,357,538 and 32,658,176 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively.
33,358     32,658  
Additional paid-in capital 69,185,118     67,768,509  
Accumulated deficit (41,832,954 )   (39,816,300 )
Total Vertex Energy, Inc. stockholders' equity 27,385,974     27,985,353  
Non-controlling interest 581,280     399,005  
Total Equity 27,967,254     28,384,358  
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY $ 86,952,212     $ 84,305,474  
               
               

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

    Three Months
Ended June 30,
  Six Months
Ended June 30,
 
    2018   2017   2018     2017    
Revenues   $ 46,917,770     $ 36,912,779       $ 88,285,965       $ 71,683,393    
Cost of revenues (exclusive of depreciation and amortization shown separately below)   36,796,258     31,466,029       71,841,409       62,167,583    
Gross profit   10,121,512     5,446,750       16,444,556       9,515,810    
                   
Operating expenses:                  
Selling, general and administrative expenses   5,364,591     5,359,897       11,010,033       10,589,734    
Depreciation and amortization   1,733,076     1,645,030       3,427,175       3,245,090    
Total operating expenses   7,097,667     7,004,927       14,437,208       13,834,824    
Income (loss) from operations   3,023,845     (1,558,177   )   2,007,348       (4,319,014   )
Other income (expense):                  
Interest income   659     2,277       659       4,229    
Gain (loss) on sale of assets   8,843     (26,399   )   51,523       (39,499   )
Gain (loss) on change in value of derivative liability   475,913     384,769       44,162       1,305,441    
Interest expense   (847,456 )   (618,448   )   (1,649,971   )   (1,954,935   )
Total other income (expense)   (362,041 )   (257,801   )   (1,553,627   )   (684,764   )
Income (loss) before income tax   2,661,804     (1,815,978   )   453,721       (5,003,778   )
Income tax benefit (expense)                      
Net income (loss)   2,661,804     (1,815,978   )   453,721       (5,003,778   )
Net income (loss) attributable to non-controlling interest   131,736     51,528       182,275       60,136    
Net income (loss) attributable to Vertex Energy, Inc.   2,530,068     (1,867,506   )   271,446       (5,063,914   )
                   
Accretion of discount on Series B and B-1 Preferred Stock   (470,825 )   (410,097   )   (928,678   )   (843,298   )
Accrual of dividends on Series B and B-1 Preferred Stock   (620,069 )   (418,571   )   (1,359,423   )   (836,208   )
Net income (loss) available to common shareholders   $ 1,439,174     $ (2,696,174   )   $ (2,016,655 )     $ (6,743,420   )
Income (loss) per common share                  
Basic   $ 0.03     $ (0.08 )     $ (0.06 )     $ (0.21 )  
Diluted   $ 0.03     $ (0.08 )     $ (0.06 )     $ (0.21 )  
Shares used in computing earnings per share                  
Basic   33,300,456     32,350,218       33,182,748       32,650,347    
Diluted   37,013,651     32,350,218       33,182,748       32,650,347    
                               
                               

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)

  Six Months Ended June 30,
   2018   2017
Cash flows from operating activities      
Net income (loss) $ 453,721     $ (5,003,778 )
 Adjustments to reconcile net loss to cash provided by (used in) operating activities      
Stock based compensation expense 329,721     297,473  
Depreciation and amortization 3,427,175     3,245,090  
(Gain) loss on sale of assets (51,523 )   39,499  
(Increase) decrease in fair value of derivative warrant liability (44,162 )   (1,305,441 )
  Loss on commodity derivative contracts 1,212,087      
  Net cash settlements on commodity derivatives (1,393,970 )    
  Amortization of debt discount and deferred costs 290,746     428,159  
Changes in operating assets and liabilities      
Accounts receivable (1,300,384 )   1,331,191  
Inventory (2,156,895 )   (208,027 )
Prepaid expenses 687,156     1,883,798  
Accounts payable and accrued expenses 1,947,234     (1,615,582 )
  Other assets (205,942 )   129,200  
Net cash provided by (used in) operating activities 3,194,964     (778,418 )
Cash flows from investing activities      
Acquisition of SES (269,823 )    
Acquisition of Acadiana     (710,350 )
Acquisition of Nickco     (1,096,730 )
Purchase of fixed assets (1,570,094 )   (990,096 )
Proceeds from sale of  fixed assets 85,230     223,296  
Net cash provided by (used in) investing activities (1,754,687 )   (2,573,880 )
Cash flows from financing activities      
Payments on capital leases (10,797 )    
Payment of debt issuance costs     (1,718,088 )
Line of credit (payments) proceeds, net (816,797 )   109,710  
Proceeds from note payable 1,667,426     14,763,297  
Payments on note payable (1,667,066 )   (11,041,958 )
Net cash provided by (used in) financing activities (827,234 )   2,112,961  
Net change in cash, cash equivalents and restricted cash 613,043     (1,239,337 )
Cash, cash equivalents, and restricted cash at beginning of the period 1,105,787     3,206,158  
Cash, cash equivalents, and restricted cash at end of period $ 1,718,830     $ 1,966,821  
       


SUPPLEMENTAL INFORMATION                                                                             
Cash paid for interest $ 1,126,362     $     746,893  
Cash received for income tax benefit $     $  
NON-CASH INVESTING AND FINANCING TRANSACTIONS      
Conversion of Series A Preferred Stock into common stock $ 34     $ 36  
Conversion of Series B-1 Preferred Stock into common stock $ 987,259     $ 119,440  
Accretion of discount on Series B and B-1 Preferred Stock $ 928,678     $ 843,298  
Dividends-in-kind  accrued on Series B and B-1 Preferred Stock $ 1,359,423     $ 836,207  
Equipment acquired under capital leases $ 450,098     $  
Contingent consideration on Nickco acquisition $     $ 284,410  
Common restricted shares for Nickco acquisition $     $ 408,000  
Return of common shares for sale escrow $     $ 1,109  

Primary Logo

View Comments and Join the Discussion!