Vertex Energy, Inc. (NASDAQ: VTNR) (“Vertex” or the “Company”),
a leading specialty refiner and marketer of high-quality refined
products, today announced its financial results for the third
quarter ended September 30, 2023.
The Company will host a conference call to discuss third quarter
2023 results today, at 8:30 A.M. Eastern Time. Details regarding
the conference call are included at the end of this release.
THIRD QUARTER 2023 HIGHLIGHTS
- Reported net income attributable to common shareholders of
$19.8 million, or $0.17 per fully-diluted share
- Reported Adjusted EBITDA of $51.5 million
- Continued safe operation of the Company’s Mobile, Alabama
refinery (the “Mobile Refinery”) with third quarter 2023
conventional throughput of 80,171 barrels per day (bpd), which was
above prior guidance and reflecting 107% of stated facility
conventional operational capacity
- Renewable diesel (“RD”) throughput of 5,397 bpd, reflecting
Phase One capacity utilization of 67.5%
- Total cash and cash equivalents of $79.3 million, including
restricted cash of $3.6 million as of September 30, 2023
Vertex reported third quarter 2023 net income attributable to
common shareholders of $19.8 million, or $0.17 per fully-diluted
share, versus net income attributable to common shareholders of
$22.2 million, or $0.15 per fully-diluted share for the third
quarter of 2022. Adjusted EBITDA (see “Non-GAAP Financial Measures
and Key Performance Indicators”, below) was $51.5 million for the
third quarter 2023, compared to Adjusted EBITDA of $1.6 million in
the prior-year period. Financial results for the third quarter of
2023 include an inventory valuation adjustment charge in the amount
of $9.4 million during the quarter.
Schedules reconciling the Company’s generally accepted
accounting principles in the United States (“GAAP”) and non-GAAP
financial results, including Adjusted EBITDA and certain key
performance indicators, are included later in this release (see
also “Non-GAAP Financial Measures and Key Performance Indicators”,
below).
MANAGEMENT COMMENTARY
Mr. Benjamin P. Cowart, Vertex’s Chief Executive Officer stated,
“During the third quarter, we demonstrated yet another quarter of
safe, reliable operations at the Mobile Refinery, exceeding our
operational expectations for the period. Favorable commodity prices
which provided a tailwind to results during the third quarter,
presented an opportunity for our risk management team to secure
attractive pricing for approximately 27% of our gasoline production
during the seasonally weak fourth quarter of the year.” Mr. Cowart
continued, “We continue to advance our alternative feedstock
strategy for optimization of our renewable diesel operations, and
are actively assessing strategic options related to this asset in
an effort to bring a portion of what we believe is the substantial
unrecognized value of this asset forward to add liquidity and
greater financial flexibility to the Company.”
MOBILE REFINERY OPERATIONS
Conventional Fuels Refining
Total conventional throughput at the Mobile Refinery was 80,171
bpd in the third quarter of 2023. Total production of finished
high-value, light products, such as gasoline, diesel and jet fuel,
represented approximately 67% of total production in the third
quarter of 2023, vs. 61% in the second quarter of 2023, and
slightly ahead of management’s original expectations, reflecting a
continued successful yield optimization initiative at the Mobile
conventional refining facility.
The Mobile Refinery’s conventional operations generated a gross
profit of $86.2 million and $129.5 million of fuel gross margin (a
KPI discussed below) or $17.56 per barrel during the third quarter
of 2023, versus generating a gross profit of $49.1 million, and
fuel gross margin (a KPI discussed below) of $92.9 million, or
$14.86 per barrel in the third quarter of 2022.
Renewable Diesel Facility
Total renewable throughput at the Mobile Renewable Diesel
facility was 5,397 bpd in the third quarter of 2023. Total
production of renewable diesel was 5,276 bpd reflecting a product
yield of 97.8%.
The Mobile Renewable Diesel facility operations generated a
gross loss of $(8.5) million and $2.4 million of fuel gross margin
(a non-GAAP measure) or $4.78 per barrel during the third quarter
of 2023.
Feedstock Supply Strategy Advanced. During the third
quarter, Vertex continued to advance its alternative feedstock
supply strategy. The Company has completed the required temporary
filings for LCFS credits at the default carbon intensity (“C.I.”)
score. Vertex expects the initial default level LCFS credits to be
applied to all volumes of renewable diesel produced during the 3rd
and 4th quarter of 2023 and to contribute to financial results in
the 4th quarter.
During the quarter the company successfully completed runs to
support filing for proprietary carbon intensity scores of LCFS
pathways for Soy, DCO and Canola and is completing the necessary
Tallow runs in November. The filings for each of these four
feedstocks are expected to be completed during the 4th quarter as
scheduled. Once completed, these filings will allow Vertex to
receive the increased credit value available with their lower
carbon intensity production as compared to the default temporary
values.
Third Quarter 2023 Mobile Refinery Financial and
Operating Results ($/millions unless otherwise noted)
Conventional Fuels Refinery
1Q23
2Q23
3Q23
2023 YTD
Total Throughput (bpd)
71,328
76,330
80,171
75,976
Total Throughput (MMbbl)
6.42
6.95
7.38
20.74
Conventional Facility Capacity
Utilization1
95.1%
101.8%
106.9%
101.3%
Direct Opex Per Barrel ($/bbl)
$3.84
$3.35
$2.40
$3.17
Fuel Gross Margin ($/MM)
$103.8
$55.7
$129.5
$289.0
Fuel Gross Margin Per Barrel ($/bbl)
$16.17
$8.03
$17.56
$13.94
Production
Yield
Gasoline (bpd)
15,723
17,812
21,287
18,295
% Production
22.7%
23.2%
26.6%
24.3%
ULSD (bpd)
14,720
15,618
16,479
15,612
% Production
21.2%
20.3%
20.6%
20.7%
Jet (bpd)
12,789
13,570
15,823
14,072
% Production
18.4%
17.7%
19.8%
18.7%
Total Finished Fuel Products
43,232
47,000
53,589
47,979
% Production
62.3%
61.2%
67.0%
63.6%
Other2
26,119
29,828
26,419
27,456
% Production
37.7%
38.8%
33.0%
36.4%
Total Production (bpd)
69,351
76,828
80,008
75,435
Total Production (MMbbl)
6.24
6.99
7.36
20.59
Renewable Fuels Refinery
1Q23
2Q23
3Q23
2023 YTD
Total Renewable Throughput (bpd)
-
2,490
5,397
3,952
Total Renewable Throughput (MMbbl)
-
0.23
0.50
1.08
Renewable Diesel Facility Capacity
Utilization3
-
31.1%
67.5%
49.4%
Direct Opex Per Barrel ($/bbl)
-
$31.23
$23.05
$25.61
Renewable Fuel Gross Margin ($/MM)
-
($3.1)
$2.4
($0.7)
Renewable Fuel Gross Margin Per Barrel
($/bbl)
-
($13.66)
$4.78
($1.00)
Renewable Diesel Production (bpd)
-
2,208
5,276
3,750
Renewable Diesel Production (MMbbl)
-
0.20
0.49
1.02
Renewable Diesel Production Yield (%)
-
88.7%
97.8%
94.9%
1.) Assumes 75,000 barrels per day of
conventional operational capacity
2.) Other includes naphtha, intermediates,
and LPG
3.) Assumes 8,000 barrels per day of
renewable fuels operational capacity
Balance Sheet and Liquidity Update
As of September 30, 2023, Vertex had total debt outstanding of
$242.3 million, including $15.2 million in 6.25% Senior Convertible
Notes, $148.0 million outstanding on the Company’s Term Loan,
finance lease obligations of $69.0 million, and $10.1 million in
other obligations. The Company had total cash and equivalents of
$79.3 million, including $3.6 million of restricted cash on the
balance sheet as of September 30, 2023, for a net debt position of
$163.0 million. The ratio of net debt to trailing twelve month
Adjusted EBITDA was 1.3 times as of September 30, 2023. (see also
“Non-GAAP Financial Measures and Key Performance Indicators”,
below).
Commodity Price Risk Management
During the third quarter, Vertex’s commodity price risk
management team identified an opportunity to secure attractive
future refining margins for a portion of the Company’s forecast
gasoline production ahead of the projected seasonally weak fourth
quarter for this specific market. The Company entered hedge
positions covering approximately 27% of planned gasoline production
for the fourth quarter of 2023.
Management Outlook
All guidance presented below is current as of the time of this
release and is subject to change. All prior financial guidance
should no longer be relied upon.
Conventional Fuels
4Q 2023
Operational:
Low
High
Mobile Refinery Conventional Throughput
Volume (Mbpd)
68.0
71.0
Capacity Utilization
91%
95%
Production Yield Profile:
Percentage Finished Products1
64%
68%
Intermediate & Other Products2
36%
32%
Renewable Fuels
4Q 2023
Operational:
Low
High
Mobile Refinery Renewable Throughput
Volume (Mbpd)
4.0
6.0
Capacity Utilization
50%
75%
Production Yield
97%
98%
Yield Loss
3%
2%
Consolidated
4Q 2023
Operational:
Low
High
Mobile Refinery Total Throughput Volume
(Mbpd)
72.0
77.0
Capacity Utilization
87%
93%
Financial Guidance:
Direct Operating Expense ($/bbl)
$3.95
$4.20
Capital Expenditures ($/MM)
$15.00
$20.00
1.) Finished products include gasoline,
ULSD, and Jet A
2.) Intermediate & Other products
include Vacuum Gas Oil (VGO), Liquified Petroleum Gases (LPGs), and
Vacuum Tower Bottoms (VTBs)
CONFERENCE CALL AND WEBCAST DETAILS
A conference call will be held today, November 7, 2023 at 8:30
A.M. Eastern Time to review the Company’s financial results,
discuss recent events and conduct a question-and-answer session. An
audio webcast of the conference call and accompanying presentation
materials will also be available in the “Events and Presentation”
section of Vertex’s website at www.vertexenergy.com. To listen to a
live broadcast, visit the site at least 15 minutes prior to the
scheduled start time in order to register, download, and install
any necessary audio software.
To participate in the live teleconference:
Domestic: (888) 350-3870 International: (646) 960-0308
Conference ID: 8960754
To listen to a replay of the teleconference, which will be
available through November 21, 2023, either go to the “Events and
Presentation” section of Vertex's website at www.vertexenergy.com,
or call the number below:
Domestic Replay: (800) 770-2030 Access Code: 8960754
ABOUT VERTEX ENERGY
Vertex Energy is a leading energy transition company that
specializes in producing both renewable and conventional fuels. Our
innovative solutions are designed to enhance the performance of our
customers and partners while also prioritizing sustainability,
safety, and operational excellence. With a commitment to providing
superior products and services, Vertex Energy is dedicated to
shaping the future of the energy industry.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication which are
not statements of historical fact constitute forward-looking
statements within the meaning of the securities laws, including the
Private Securities Litigation Reform Act of 1995, that involve a
number of risks and uncertainties. Words such as “strategy,”
“expects,” “continues,” “plans,” “anticipates,” “believes,”
“would,” “will,” “estimates,” “intends,” “projects,” “goals,”
“targets” and other words of similar meaning are intended to
identify forward-looking statements but are not the exclusive means
of identifying these statements. Any statements made in this news
release other than those of historical fact, about an action, event
or development, are forward-looking statements. The important
factors that may cause actual results and outcomes to differ
materially from those contained in such forward-looking statements
include, without limitation, the Company’s projected Outlook for
the fourth quarter of 2023, as discussed above; statements
concerning: the Company’s engagement of BofA Securities, Inc., as
previously disclosed; the review and evaluation of potential joint
ventures, divestitures, acquisitions, mergers, business
combinations, or other strategic transactions and their impact on
shareholder value; the process by which the Company engages in
evaluation of strategic transactions; the Company’s ability to
identify potential partners; the outcome of potential future
strategic transactions and the terms thereof; the future production
of the Company’s Mobile Refinery; anticipated and unforeseen events
which could reduce future production at the refinery or delay
future capital projects, and changes in commodity and credit
values; throughput volumes, production rates, yields, operating
expenses and capital expenditures at the Mobile Refinery; the
timing of, and outcome of, the evaluation and associated carbon
intensity scoring of the Company’s feedstock blends by officials in
the state of California; the ability of the Company to obtain low
carbon fuel standard (LCFS) credits, and the amounts thereof; the
need for additional capital in the future, including, but not
limited to, in order to complete future capital projects and
satisfy liabilities, the Company’s ability to raise such capital in
the future, and the terms of such funding; the timing of capital
projects at the Company’s refinery located in Mobile, Alabama (the
“Mobile Refinery”) and the outcome of such projects; the future
production of the Mobile Refinery, including but not limited to,
renewable diesel production; estimated and actual production and
costs associated with the renewable diesel capital project;
estimated revenues, margins and expenses, over the course of the
agreement with Idemitsu; anticipated and unforeseen events which
could reduce future production at the Mobile Refinery or delay
planned and future capital projects; changes in commodity and
credits values; certain early termination rights associated with
third party agreements and conditions precedent to such agreements;
certain mandatory redemption provisions of the outstanding senior
convertible notes, the conversion rights associated therewith, and
dilution caused by conversions and/or the exchanges of convertible
notes; the Company’s ability to comply with required covenants
under outstanding senior notes and a term loan and pay amounts due
under such senior notes and term loan, including interest and other
amounts due thereunder; the ability of the Company to retain and
hire key personnel; the level of competition in the Company’s
industry and its ability to compete; the Company’s ability to
respond to changes in its industry; the loss of key personnel or
failure to attract, integrate and retain additional personnel; the
Company’s ability to protect intellectual property and not infringe
on others’ intellectual property; the Company’s ability to scale
its business; the Company’s ability to maintain supplier
relationships and obtain adequate supplies of feedstocks; the
Company’s ability to obtain and retain customers; the Company’s
ability to produce products at competitive rates; the Company’s
ability to execute its business strategy in a very competitive
environment; trends in, and the market for, the price of oil and
gas and alternative energy sources; the impact of inflation on
margins and costs; the volatile nature of the prices for oil and
gas caused by supply and demand, including volatility caused by the
ongoing Ukraine/Russia conflict and/or the Israel/Hamas conflict,
increased interest rates, recessions and inflation; the Company’s
ability to maintain relationships with partners; the outcome of
pending and potential future litigation, judgments and settlements;
rules and regulations making the Company’s operations more costly
or restrictive; volatility in the market price of compliance
credits (primarily Renewable Identification Numbers (RINs) needed
to comply with the Renewable Fuel Standard (“RFS”)) under renewable
and low-carbon fuel programs and emission credits needed under
other environmental emissions programs, the requirement for the
Company to purchase RINs in the secondary market to the extent it
does not generate sufficient RINs internally, liabilities
associated therewith and the timing, funding and costs of such
required purchases, if any; changes in environmental and other laws
and regulations and risks associated with such laws and
regulations; economic downturns both in the United States and
globally, changes in inflation and interest rates, increased costs
of borrowing associated therewith and potential declines in the
availability of such funding; risk of increased regulation of the
Company’s operations and products; disruptions in the
infrastructure that the Company and its partners rely on;
interruptions at the Company’s facilities; unexpected and expected
changes in the Company’s anticipated capital expenditures resulting
from unforeseen and expected required maintenance, repairs, or
upgrades; the Company’s ability to acquire and construct new
facilities; the Company’s ability to effectively manage growth;
decreases in global demand for, and the price of, oil, due to
inflation, recessions or other reasons, including declines in
economic activity or global conflicts; expected and unexpected
downtime at the Company’s facilities; the Company’s level of
indebtedness, which could affect its ability to fulfill its
obligations, impede the implementation of its strategy, and expose
the Company’s interest rate risk; dependence on third party
transportation services and pipelines; risks related to obtaining
required crude oil supplies, and the costs of such supplies;
counterparty credit and performance risk; unanticipated problems
at, or downtime effecting, the Company’s facilities and those
operated by third parties; risks relating to the Company’s hedging
activities or lack of hedging activities; and risks relating to
planned and future divestitures, asset sales, joint ventures and
acquisitions.
Other important factors that may cause actual results and
outcomes to differ materially from those contained in the
forward-looking statements included in this communication are
described in the Company’s publicly filed reports, including, but
not limited to, the Company’s Annual Report on Form 10-K for the
year ended December 31, 2022, and the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2023, and future
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
These reports are available at www.sec.gov. The Company cautions
that the foregoing list of important factors is not complete. All
subsequent written and oral forward-looking statements attributable
to the Company or any person acting on behalf of the Company are
expressly qualified in their entirety by the cautionary statements
referenced above. Other unknown or unpredictable factors also could
have material adverse effects on Vertex’s future results. The
forward-looking statements included in this press release are made
only as of the date hereof. Vertex cannot guarantee future results,
levels of activity, performance or achievements. Accordingly, you
should not place undue reliance on these forward-looking
statements. Finally, Vertex undertakes no obligation to update
these statements after the date of this release, except as required
by law, and takes no obligation to update or correct information
prepared by third parties that are not paid for by Vertex. If we
update one or more forward-looking statements, no inference should
be drawn that we will make additional updates with respect to those
or other forward-looking statements.
PROJECTIONS
The financial projections (the “Projections”) included herein
were prepared by Vertex in good faith using assumptions believed to
be reasonable. A significant number of assumptions about the
operations of the business of Vertex were based, in part, on
economic, competitive, and general business conditions prevailing
at the time the Projections were developed. Any future changes in
these conditions, may materially impact the ability of Vertex to
achieve the financial results set forth in the Projections. The
Projections are based on numerous assumptions, including
realization of the operating strategy of Vertex; industry
performance; no material adverse changes in applicable legislation
or regulations, or the administration thereof, or generally
accepted accounting principles; general business and economic
conditions; competition; retention of key management and other key
employees; absence of material contingent or unliquidated
litigation, indemnity, or other claims; minimal changes in current
pricing; static material and equipment pricing; no significant
increases in interest rates or inflation; and other matters, many
of which will be beyond the control of Vertex, and some or all of
which may not materialize. The Projections also assume the
continued uptime of the Company’s facilities at historical levels
and the successful funding of, timely completion of, and successful
outcome of, planned capital projects. Additionally, to the extent
that the assumptions inherent in the Projections are based upon
future business decisions and objectives, they are subject to
change. Although the Projections are presented with numerical
specificity and are based on reasonable expectations developed by
Vertex’s management, the assumptions and estimates underlying the
Projections are subject to significant business, economic, and
competitive uncertainties and contingencies, many of which will be
beyond the control of Vertex. Accordingly, the Projections are only
estimates and are necessarily speculative in nature. It is expected
that some or all of the assumptions in the Projections will not be
realized and that actual results will vary from the Projections.
Such variations may be material and may increase over time. In
light of the foregoing, readers are cautioned not to place undue
reliance on the Projections. The projected financial information
contained herein should not be regarded as a representation or
warranty by Vertex, its management, advisors, or any other person
that the Projections can or will be achieved. Vertex cautions that
the Projections are speculative in nature and based upon subjective
decisions and assumptions. As a result, the Projections should not
be relied on as necessarily predictive of actual future events.
NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE
INDICATORS
In addition to our results calculated under generally accepted
accounting principles in the United States (“GAAP”), in this news release we also present
certain non-U.S. GAAP financial measures and key performance
indicators. Non-U.S. GAAP financial measures include Adjusted Gross
Margin, Fuel Gross Margin and Refining Adjusted EBITDA, for the
Company’s Legacy Refining and Marketing segment, and the total
Refining and Marketing segment, as a whole, and Net Long-Term Debt
and Ratio of Net Long-Term Debt (collectively, the “Non-U.S. GAAP Financial Measures”). Key
performance indicators include Adjusted Gross Margin, Fuel Gross
Margin and Refining Adjusted EBITDA for Conventional, Renewable and
the Mobile Refinery as a whole, and Fuel Gross Margin Per Barrel of
Throughput and Adjusted Gross Margin Per Barrel of Throughput for
Conventional, Renewable and the Mobile Refinery as a whole
(collectively, the “KPIs”). EBITDA
represents net income before interest, taxes, depreciation and
amortization, for continued and discontinued operations. Adjusted
EBITDA represents net income (loss) from operations plus unrealized
gain or losses on hedging activities, Renewable Fuel Standard (RFS)
costs (mainly related to Renewable Identification Numbers (RINs),
and inventory adjustments, depreciation and amortization,
acquisition costs, gain on change in value of derivative warrant
liability, environmental clean-up, stock-based compensation, (gain)
loss on sale of assets, interest expense, and certain other unusual
or non-recurring charges included in selling, general, and
administrative expenses. Adjusted Gross Margin is defined as gross
profit (loss) plus or minus unrealized gain or losses on hedging
activities and inventory valuation adjustments. Fuel Gross Margin
is defined as Adjusted Gross Margin, plus production costs,
operating expenses and depreciation attributable to cost of
revenues and other non-fuel items included in costs of revenues
including realized and unrealized gain or losses on hedging
activities, RFS costs (mainly related to RINs), inventory valuation
adjustments, fuel financing costs and other revenues and cost of
sales items. Fuel Gross Margin Per Barrel of Throughput is
calculated as fuel gross margin divided by total throughput barrels
for the period presented. Operating Expenses Per Barrel of
Throughput is defined as total operating expenses divided by total
barrels of throughput. RIN Adjusted Fuel Gross Margin is defined as
[Fuel Gross Margin minus RIN expense divided by total barrels of
throughput. RIN Adjusted Fuel Gross Margin Per Barrel of Throughput
is calculated as RIN Adjusted Fuel Gross Margin divided by total
throughput barrels for the period presented. Net Long-Term Debt is
long-term debt and lease obligations, adjusted for unamortized
discount and deferred financing costs, insurance premiums financed,
less cash and cash equivalents and restricted cash. Ratio of Net
Long-Term Debt is defined as Long-Term Debt divided by Adjusted
EBITDA.
Each of the Non-U.S. GAAP Financial Measures and KPIs are
discussed in greater detail below. The (a) Non-U.S. GAAP Financial
Measures are “non-U.S. GAAP financial
measures”, and (b) the KPIs are, presented as supplemental
measures of the Company’s performance. They are not presented in
accordance with U.S. GAAP. We use the Non-U.S. GAAP Financial
Measures and KPIs as supplements to U.S. GAAP measures of
performance to evaluate the effectiveness of our business
strategies, to make budgeting decisions, to allocate resources and
to compare our performance relative to our peers. Additionally,
these measures, when used in conjunction with related U.S. GAAP
financial measures, provide investors with an additional financial
analytical framework which management uses, in addition to
historical operating results, as the basis for financial,
operational and planning decisions and present measurements that
third parties have indicated are useful in assessing the Company
and its results of operations. The Non-U.S. GAAP Financial Measures
and KPIs are presented because we believe they provide additional
useful information to investors due to the various noncash items
during the period. Non-U.S. GAAP financial information and KPIs
similar to the Non-U.S. GAAP Financial Measures and KPIs are also
frequently used by analysts, investors and other interested parties
to evaluate companies in our industry. The Non-U.S. GAAP Financial
Measures and KPIs are unaudited, and 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
U.S. GAAP. Some of these limitations are: the Non-U.S. GAAP
Financial Measures and KPIs do not reflect cash expenditures, or
future requirements for capital expenditures, or contractual
commitments; the Non-GAAP Financial Measures and KPIs do not
reflect changes in, or cash requirements for, working capital
needs; the Non-GAAP Financial Measures and KPIs 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, the Non-U.S. GAAP Financial Measures
and KPIs do not reflect any cash requirements for such
replacements; the Non-U.S. GAAP Financial Measures and KPIs
represent only a portion of our total operating results; and other
companies in this industry may calculate the Non-U.S. GAAP
Financial Measures and KPIs differently than we do, limiting their
usefulness as a comparative measure. You should not consider the
Non-U.S. GAAP Financial Measures and KPIs in isolation, or as
substitutes for analysis of the Company’s results as reported under
U.S. GAAP. The Company’s presentation of these measures should not
be construed as an inference that future results will be unaffected
by unusual or nonrecurring items. We compensate for these
limitations by providing a reconciliation of each of these non-U.S.
GAAP Financial Measures and KPIs to the most comparable U.S. GAAP
measure below. We encourage investors and others to review our
business, results of operations, and financial information in their
entirety, not to rely on any single financial measure, and to view
these non-U.S. GAAP Financial Measures and KPIs in conjunction with
the most directly comparable U.S. GAAP financial measure.
We compensate for these limitations by providing a
reconciliation of each of the non-GAAP Financial Measures to the
most comparable GAAP measure and reconciliation of the KPIs, below.
We encourage investors and others to review our business, results
of operations, and financial information in their entirety, not to
rely on any single financial measure, and to view the non-GAAP
Financial Measures in conjunction with the most directly comparable
GAAP financial measure. For more information on these non-GAAP
financial measures and KPIs, please see the sections titled
“Unaudited Reconciliation of Gross Profit (Loss) From Continued and
Discontinued Operations to Adjusted Gross Margin, Fuel Gross
Margin, Fuel Gross Margin Per Barrel of Throughput and Operating
Expenses Per Barrel of Throughput”, “Unaudited Reconciliation of
Adjusted EBITDA to Net loss from Continued and Discontinued
Operations”, and “Unaudited Reconciliation of Long-Term Debt to Net
Long-Term Debt and Net Leverage”, at the end of this release.
VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (in thousands, except number
of shares and par value) (UNAUDITED)
September 30,
2023
December 31,
2022
ASSETS
Current assets
Cash and cash equivalents
$
75,705
$
141,258
Restricted cash
3,605
4,929
Accounts receivable, net
36,816
34,548
Inventory
222,685
135,473
Derivative commodity asset
4,991
—
Prepaid expenses and other current
assets
57,315
36,660
Assets held for sale, current
—
20,560
Total current assets
401,117
373,428
Fixed assets, net
321,314
201,749
Finance lease right-of-use assets
65,317
44,081
Operating lease right-of use assets
90,413
53,557
Intangible assets, net
11,207
11,827
Deferred taxes assets
—
2,498
Other assets
3,310
2,245
TOTAL ASSETS
$
892,678
$
689,385
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable
$
63,628
$
20,997
Accrued expenses
69,315
81,711
Finance lease liability-current
2,297
1,363
Operating lease liability-current
26,047
9,012
Current portion of long-term debt, net
18,321
13,911
Obligations under inventory financing
agreements, net
182,487
117,939
Derivative commodity liability
—
242
Liabilities held for sale, current
—
3,424
Total current liabilities
362,095
248,599
Long-term debt, net
125,010
170,010
Finance lease liability-long-term
66,751
45,164
Operating lease liability-long-term
64,367
44,545
Deferred tax liabilities
1,257
—
Derivative warrant liability
9,234
14,270
Other liabilities
1,377
1,377
Total liabilities
630,091
523,965
COMMITMENTS AND CONTINGENCIES (Note
4)
—
—
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value per
share;
750,000,000 shares authorized; 93,514,346
and 75,668,826 shares issued and outstanding at September 30, 2023
and December 31, 2022, respectively.
94
76
Additional paid-in capital
382,849
279,552
Accumulated deficit
(123,588
)
(115,893
)
Total Vertex Energy, Inc. stockholders'
equity
259,355
163,735
Non-controlling interest
3,232
1,685
Total equity
262,587
165,420
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
892,678
$
689,385
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) (UNAUDITED)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues
$
1,018,407
$
809,529
$
2,444,442
$
1,913,435
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
925,542
749,654
2,274,543
1,817,787
Depreciation and amortization attributable
to costs of revenues
7,896
4,049
18,863
9,139
Gross profit
84,969
55,826
151,036
86,509
Operating expenses:
Selling, general and administrative
expenses (exclusive of depreciation and amortization shown
separately below)
43,137
37,142
127,715
90,039
Depreciation and amortization attributable
to operating expenses
1,033
1,119
3,077
2,655
Total operating expenses
44,170
38,261
130,792
92,694
Income (loss) from operations
40,799
17,565
20,244
(6,185
)
Other income (expense):
Other income (loss)
(133
)
416
1,023
1,059
Gain on change in value of derivative
warrant liability
4,621
12,312
5,036
7,788
Interest expense
(13,523
)
(13,028
)
(103,536
)
(64,961
)
Total other expense
(9,035
)
(300
)
(97,477
)
(56,114
)
Income (loss) from continuing operations
before income tax
31,764
17,265
(77,233
)
(62,299
)
Income tax benefit (expense)
(12,231
)
—
15,445
—
Income (loss) from continuing
operations
19,533
17,265
(61,788
)
(62,299
)
Income from discontinued operations, net
of tax (see note 23)
—
4,905
53,680
19,878
Net income (loss)
19,533
22,170
(8,108
)
(42,421
)
Net income (loss) attributable to
non-controlling interest and redeemable non-controlling interest
from continuing operations
(310
)
(49
)
(413
)
15
Net income (loss) attributable to
non-controlling interest and redeemable non-controlling interest
from discontinued operations
—
(15
)
—
6,847
Net income (loss) attributable to Vertex
Energy, Inc.
19,843
22,234
(7,695
)
(49,283
)
Accretion of redeemable noncontrolling
interest to redemption value from continued operations
—
—
—
(428
)
Net income (loss) attributable to common
stockholders from continuing operations
19,843
17,314
(61,375
)
(62,742
)
Net income attributable to common
stockholders from discontinued operations, net of tax
—
4,920
53,680
13,031
Net income (loss) attributable to common
shareholders
$
19,843
$
22,234
$
(7,695
)
$
(49,711
)
Basic loss per common share
Continuing operations
$
0.21
$
0.23
$
(0.74
)
$
(0.91
)
Discontinued operations, net of tax
—
0.07
0.65
0.19
Basic loss per common share
$
0.21
$
0.30
$
(0.09
)
$
(0.72
)
Diluted income (loss) per common share
Continuing operations
$
0.17
$
0.10
$
(0.74
)
$
(0.91
)
Discontinued operations, net of tax
—
0.05
0.65
0.19
Diluted income (loss) per common share
$
0.17
$
0.15
$
(0.09
)
$
(0.72
)
Shares used in computing earnings per
share
Basic
93,381
75,591
82,928
69,007
Diluted
100,427
97,126
82,928
69,007
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in
thousands, except par value) (UNAUDITED)
Nine Months Ended September
30, 2023
Common Stock
Series A Preferred
Shares
$0.001 Par
Shares
$0.001 Par
Additional Paid-In
Capital
Retained Earnings
Non- controlling
Interest
Total Equity
Balance on January 1, 2023
75,669
$
76
—
$
—
$
279,552
$
(115,893
)
$
1,685
$
165,420
Exercise of options
166
—
—
—
209
—
—
209
Stock based compensation expense
—
—
—
—
365
—
—
365
Non controlling shareholder
contribution
—
—
—
—
—
—
980
980
Net income (loss)
—
—
—
—
—
53,863
(50
)
53,813
Balance on March 31, 2023
75,835
76
—
—
280,126
(62,030
)
2,615
220,787
Exercise of options
195
—
—
—
169
—
—
169
Stock based compensation expense
—
—
—
—
368
—
—
368
Senior Note Converted
17,207
17
—
—
101,113
—
—
101,130
Non-controlling shareholder
contribution
—
—
—
—
—
—
490
490
Net loss
—
—
—
—
—
(81,401
)
(53
)
(81,454
)
Balance on June 30, 2023
93,237
93
—
—
381,776
(143,431
)
3,052
241,490
Exercise of options
165
1
—
—
304
—
—
305
Stock based compensation expense
—
—
—
—
769
—
—
769
Issue of restricted common stock
113
—
—
—
—
—
—
—
Non-controlling shareholder
contribution
—
—
—
—
—
—
490
490
Net income (loss)
—
—
—
—
—
19,843
(310
)
19,533
Balance on September 30, 2023
93,515
$
94
—
$
—
$
382,849
$
(123,588
)
$
3,232
$
262,587
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in
thousands, except par value) (UNAUDITED)
Nine Months Ended September
30, 2022
Common Stock
Series A Preferred
Shares
$0.001 Par
Shares
$0.001 Par
Additional Paid-In
Capital
Retained Earnings
Non- controlling
Interest
Total Equity
Balance on January 1, 2022
63,288
$
63
386
$
—
$
138,620
$
(110,614
)
$
1,997
$
30,066
Exercise of options
60
—
—
—
76
—
—
76
Exercise of warrants
1,113
1
—
—
(1
)
—
—
—
Stock based compensation expense
—
—
—
—
250
—
—
250
Conversion of Series A Preferred stock to
common
5
—
(5
)
—
—
—
—
—
Reclassification of derivative
liabilities
—
—
—
—
78,789
—
—
78,789
Accretion of redeemable non-controlling
interest to redemption value
—
—
—
—
—
(422
)
—
(422
)
Net income (loss)
—
—
—
—
—
(4,547
)
3,739
(808
)
Less: amount attributable to redeemable
non-controlling interest
—
—
—
—
—
—
(3,769
)
(3,769
)
Balance on March 31, 2022
64,466
64
381
—
217,734
(115,583
)
1,967
104,182
Exercise of options to common
498
1
—
—
553
—
—
554
Exercise of options to common-
unissued
—
—
—
—
3
—
—
3
Distribution to non-controlling
shareholder
—
—
—
—
—
—
(380
)
(380
)
Adjustment of redeemable non controlling
interest
—
—
—
—
29
(29
)
—
—
Conversion of Convertible Senior Notes to
common
10,165
10
—
—
59,812
—
—
59,822
Share based compensation expense
—
—
—
—
324
—
—
324
Conversion of Series A Preferred stock to
common
381
1
(381
)
—
—
—
—
1
Accretion of redeemable non-controlling
interest to redemption value
—
—
—
—
—
(6
)
—
(6
)
Net income (loss)
—
—
—
—
—
(66,970
)
3,188
(63,782
)
Less: amount attributable to redeemable
non-controlling interest
—
—
—
—
—
—
(3,023
)
(3,023
)
Balance on June 30, 2022
75,510
76
—
—
278,455
(182,588
)
1,752
97,695
Exercise of options to common
4
—
—
—
—
—
—
—
Exercise of options to common-
unissued
—
—
—
—
97
—
—
97
Exercise of warrants
96
—
—
—
—
—
—
—
Share based compensation expense
—
—
—
—
378
—
—
378
Net income (loss)
—
—
—
—
—
22,234
(64
)
22,170
Balance on September 30, 2022
75,610
$
76
—
$
—
$
278,930
$
(160,354
)
$
1,688
$
120,340
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
(UNAUDITED)
Nine Months Ended September
30,
2023
2022
Cash flows from operating activities
Net income (loss)
$
(8,108
)
$
(42,421
)
Income from discontinued operations, net
of tax
53,680
19,878
Loss from continuing operations
(61,788
)
(62,299
)
Adjustments to reconcile net loss from
continuing operations to cash used in operating activities
Stock based compensation expense
1,502
952
Depreciation and amortization
21,940
11,794
Deferred income tax benefit
(15,445
)
—
Gain on sale of assets
(2
)
(112
)
Provision for environment clean up
—
1,428
(Decrease) increase in allowance for bad
debt
(132
)
157
(Decrease) increase in fair value of
derivative warrant liability
(5,036
)
(7,788
)
Loss on commodity derivative contracts
219
87,217
Net cash settlements on commodity
derivatives
(2,061
)
(100,253
)
Amortization of debt discount and deferred
costs
74,618
44,537
Changes in operating assets and
liabilities
Accounts receivable and other
receivables
(3,819
)
(39,202
)
Inventory
(85,796
)
(31,387
)
Prepaid expenses and other current
assets
(24,601
)
(16,437
)
Accounts payable
42,219
58,275
Accrued expenses
(12,500
)
37,404
Other assets
(987
)
82
Net cash used in operating activities from
continuing operations
(71,669
)
(15,632
)
Cash flows from investing activities
Acquisition of business, net of cash
(7,642
)
—
Purchase of intangible assets
(2,500
)
(106
)
Investment in Mobile Refinery assets
—
(227,525
)
Purchase of fixed assets
(128,599
)
(34,743
)
Proceeds from sale of discontinued
operation
92,034
—
Proceeds from sale of fixed assets
5
188
Net cash used in investing activities from
continuing operations
(46,702
)
(262,186
)
Cash flows from financing activities
Payments on finance leases
(1,469
)
(201
)
Proceeds from exercise of options and
warrants to common stock
683
729
Distributions to noncontrolling
interest
—
(380
)
Contributions received from noncontrolling
interest
1,960
—
Net change on inventory financing
agreements
63,798
133,744
Redemption of noncontrolling interest
—
(50,666
)
Proceeds from note payable
19,641
173,315
Payments on note payable
(32,969
)
(14,101
)
Net cash provided by financing activities
from continuing operations
51,644
242,440
Discontinued operations:
Net cash provided by (used in) operating
activities
(150
)
23,021
Net cash used in investing activities
—
(1,877
)
Net cash provided by (used in)
discontinued operations
(150
)
21,144
Net decrease in cash, cash equivalents and
restricted cash
(66,877
)
(14,234
)
Cash, cash equivalents, and restricted
cash at beginning of the period
146,187
136,627
Cash, cash equivalents, and restricted
cash at end of period
$
79,310
$
122,393
VERTEX ENERGY, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
(UNAUDITED) (Continued)
The following table provides a reconciliation of cash and cash
equivalents and restricted cash reported within the consolidated
balance sheets to the same amounts shown in the consolidated
statements of cash flows (in thousands).
Nine Months Ended
September 30,
2023
September 30,
2022
Cash and cash equivalents
$
75,705
$
117,464
Restricted cash
3,605
4,929
Cash and cash equivalents and restricted
cash as shown in the consolidated statements of cash flows
$
79,310
$
122,393
SUPPLEMENTAL INFORMATION
Cash paid for interest
$
35,553
$
65,083
Cash paid for taxes
$
—
$
—
NON-CASH INVESTING AND FINANCING
TRANSACTIONS
Equity component of the convertible note
issuance
$
—
$
78,789
ROU assets obtained from new finance lease
obligation
$
23,990
$
45,096
Exchange of Convertible Senior Notes to
common stock
$
79,948
$
59,822
ROU assets obtained from new operating
lease obligation
$
36,856
$
20,061
Accretion of redeemable non-controlling
interest to redemption value
$
—
$
428
Unaudited segment information for the three and nine months
ended September 30, 2023 and 2022 is as follows (in thousands):
Three Months Ended September
30, 2023
Refining &
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues:
Refined products
$
966,805
$
38,642
$
(4,632
)
$
1,000,815
Re-refined products
4,509
2,966
—
7,475
Services
7,398
2,719
—
10,117
Total revenues
978,712
44,327
(4,632
)
1,018,407
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
893,612
36,569
(4,639
)
925,542
Depreciation and amortization attributable
to costs of revenues
6,527
1,369
—
7,896
Gross profit
78,573
6,389
7
84,969
Selling, general and administrative
expenses
31,485
5,231
6,421
43,137
Depreciation and amortization attributable
to operating expenses
829
38
166
1,033
Income (loss) from operations
46,259
1,120
(6,580
)
40,799
Other income (expenses)
Other income (expense)
—
(167
)
34
(133
)
Gain on change in value of derivative
warrant liabilities
—
—
4,621
4,621
Interest expense
(4,394
)
(41
)
(9,088
)
(13,523
)
Net income (loss)
$
41,865
$
912
$
(11,013
)
$
31,764
Capital expenditures
$
20,875
$
8,449
$
—
$
29,324
Three Months Ended September
30, 2022
Refining &
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues:
Refined products
$
748,190
$
37,607
$
—
$
785,797
Re-refined products
16,434
4,587
—
21,021
Services
2,144
567
—
2,711
Total revenues
766,768
42,761
—
809,529
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
714,976
34,678
—
749,654
Depreciation and amortization attributable
to costs of revenues
3,111
938
—
4,049
Gross profit
48,681
7,145
—
55,826
Selling, general and administrative
expenses
28,269
4,803
4,070
37,142
Depreciation and amortization attributable
to operating expenses
850
38
231
1,119
Income (loss) from operations
19,562
2,304
(4,301
)
17,565
Other income (expenses)
Other income
—
416
—
416
Gain on change in value of derivative
warrant liabilities
—
—
12,312
12,312
Interest expense
(3,444
)
—
(9,584
)
(13,028
)
Net income (loss)
$
16,118
$
2,720
$
(1,573
)
$
17,265
Capital expenditures
$
26,333
$
412
$
—
$
26,745
Nine Months Ended September
30, 2023
Refining &
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues:
Refined products
$
2,322,452
$
89,863
$
(9,775
)
$
2,402,540
Re-refined products
13,874
10,912
—
24,786
Services
13,133
3,983
—
17,116
Total revenues
2,349,459
104,758
(9,775
)
2,444,442
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
2,194,382
90,250
(10,089
)
2,274,543
Depreciation and amortization attributable
to costs of revenues
15,389
3,474
—
18,863
Gross profit
139,688
11,034
314
151,036
Selling, general and administrative
expenses
90,940
14,535
22,240
127,715
Depreciation and amortization attributable
to operating expenses
2,459
114
504
3,077
Income (loss) from operations
46,289
(3,615
)
(22,430
)
20,244
Other income (expenses)
Other income
—
989
34
1,023
Gain on change in value of derivative
warrant liabilities
—
—
5,036
5,036
Interest expense
(12,799
)
(126
)
(90,611
)
(103,536
)
Net income (loss)
$
33,490
$
(2,752
)
$
(107,971
)
$
(77,233
)
Capital expenditures
$
118,545
$
16,123
$
—
$
134,668
Nine Months Ended September
30, 2022
Refining &
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues:
Refined products
$
1,721,044
$
129,078
$
—
$
1,850,122
Re-refined products
42,381
14,860
—
57,241
Services
4,452
1,620
—
6,072
Total revenues
1,767,877
145,558
—
1,913,435
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
1,707,746
110,041
—
1,817,787
Depreciation and amortization attributable
to costs of revenues
6,339
2,800
—
9,139
Gross profit
53,792
32,717
—
86,509
Selling, general and administrative
expenses
53,073
13,125
23,841
90,039
Depreciation and amortization attributable
to operating expenses
1,784
142
729
2,655
Income (loss) from operations
(1,065
)
19,450
(24,570
)
(6,185
)
Other income (expenses)
Other income
18
1,041
—
1,059
Gain on change in value of derivative
warrant liabilities
—
—
7,788
7,788
Interest expense
(6,694
)
(51
)
(58,216
)
(64,961
)
Net income (loss)
$
(7,741
)
$
20,440
$
(74,998
)
$
(62,299
)
Capital expenditures
$
142,927
$
2,830
$
—
$
145,757
The following summarized unaudited financial information has
been segregated from continuing operations and reported as
discontinued operations for the three and nine months ended
September 30, 2023, and 2022 (in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues
$
—
$
22,859
$
7,366
$
65,618
Cost of revenues (exclusive of
depreciation shown separately below)
—
14,953
4,589
37,871
Depreciation and amortization attributable
to costs of revenues
—
394
124
1,176
Gross profit
—
7,512
2,653
26,571
Operating expenses:
Selling, general and administrative
expenses (exclusive of depreciation shown separately below)
—
2,534
632
6,472
Depreciation and amortization expense
attributable to operating expenses
—
63
21
188
Total operating expenses
—
2,597
653
6,660
Income from operations
—
4,915
2,000
19,911
Other income (expense)
Interest expense
—
(10
)
—
(33
)
Total other expense
—
(10
)
—
(33
)
Income before income tax
—
4,905
2,000
19,878
Income tax expense
—
—
(528
)
—
Gain on sale of discontinued operations,
net of $0 and $18,671 of tax for three and nine months ended
September 30, 2023
—
—
52,208
—
Income from discontinued operations, net
of tax
$
—
$
4,905
$
53,680
$
19,878
Unaudited Reconciliation of Gross Profit (Loss) From Continued
and Discontinued Operations to Adjusted Gross Margin, Fuel Gross
Margin, Fuel Gross Margin Per Barrel of Throughput and Operating
Expenses Per Barrel of Throughput.
Three Months Ended September
30, 2023
In thousands
Conventional
Renewable
Mobile Refinery Total
Gross profit
$
86,185
$
(8,515
)
$
77,670
Unrealized (gain) loss on hedging
activities
(4,620
)
(3,622
)
(8,242
)
Inventory valuation adjustments
13,225
(3,851
)
9,374
Adjusted gross margin
$
94,790
$
(15,988
)
$
78,802
Variable production costs attributable to
cost of revenues
26,847
12,958
39,805
Depreciation and amortization attributable
to cost of revenues
2,982
3,320
6,302
RINs
7,058
-
7,058
Realized loss on hedging activities
2,854
2,401
5,255
Financing costs
1,772
205
1,977
Other revenues
(6,804
)
(524
)
(7,328
)
Fuel gross margin
$
129,499
$
2,372
$
131,871
Throughput (bpd)
80,171
5,397
85,568
Fuel gross margin per barrel of
throughput
$
17.56
$
4.78
$
16.75
Total OPEX
$
17,720
$
11,445
$
29,165
Operating expenses per barrel of
throughput
$
2.40
$
23.05
$
3.70
Three Months Ended June 30,
2023
In thousands
Conventional
Renewable
Mobile Refinery Total
Gross profit
$
6,544
$
(13,006
)
$
(6,462
)
Unrealized (gain) loss on hedging
activities
849
2,913
3,762
Inventory valuation adjustments
(4,246
)
3,745
(501
)
Adjusted gross margin
$
3,147
$
(6,348
)
$
(3,201
)
Variable production costs attributable to
cost of revenues
28,686
77
28,763
Depreciation and amortization attributable
to cost of revenues
3,351
2,018
5,369
RINs
25,410
-
25,410
Realized loss on hedging activities
(1,150
)
1,288
138
Financing costs
(87
)
58
(29
)
Other revenues
(3,610
)
(190
)
(3,800
)
Fuel gross margin
$
55,747
$
(3,097
)
$
52,650
Throughput (bpd)
76,330
2,490
78,820
Fuel gross margin per barrel of
throughput
$
8.03
$
(13.66
)
$
7.34
Total OPEX
$
23,299
$
7,076
$
30,375
Operating expenses per barrel of
throughput
$
3.35
$
31.23
$
4.23
Three Months Ended March 31,
2023
In thousands
Conventional
Renewable
Mobile Refinery Total
Gross profit
$
65,470
$
-
$
65,470
Unrealized (gain) loss on hedging
activities
(570
)
-
(570
)
Inventory valuation adjustments
(1,532
)
-
(1,532
)
Adjusted gross margin
$
63,368
$
-
$
63,368
Variable production costs attributable to
cost of revenues
21,252
-
21,252
Depreciation and amortization attributable
to cost of revenues
3,144
-
3,144
RINs
16,115
-
16,115
Realized loss on hedging activities
(439
)
-
(439
)
Financing costs
2,295
-
2,295
Other revenues
(1,933
)
-
(1,933
)
Fuel gross margin
$
103,802
$
-
$
103,802
Throughput (bpd)
71,328
-
71,328
Fuel gross margin per barrel of
throughput
$
16.17
$
-
$
16.17
Total OPEX
$
24,681
$
-
$
24,681
Operating expenses per barrel of
throughput
$
3.84
$
-
$
3.84
Nine Months Ended September
30, 2023
In thousands
Conventional
Renewable
Mobile Refinery Total
Gross profit
$
158,198
$
(21,521
)
$
136,677
Unrealized (gain) loss on hedging
activities
(4,341
)
(709
)
(5,050
)
Inventory valuation adjustments
7,447
(106
)
7,341
Adjusted gross margin
$
161,304
$
(22,336
)
$
138,968
Variable production costs attributable to
cost of revenues
76,785
13,035
89,820
Depreciation and amortization attributable
to cost of revenues
9,477
5,338
14,815
RINs
48,583
-
48,583
Realized loss on hedging activities
1,265
3,689
4,954
Financing costs
3,980
263
4,243
Other revenues
(12,347
)
(714
)
(13,061
)
Fuel gross margin
$
289,047
$
(725
)
$
288,322
Throughput (bpd)
75,976
3,952
79,928
Fuel gross margin per barrel of
throughput
$
13.94
$
(1.00
)
$
13.21
Total OPEX
$
65,700
$
18,521
$
84,221
Operating expenses per barrel of
throughput
$
3.17
$
25.61
$
3.86
Unaudited Reconciliation of Adjusted EBITDA to Net loss from
Continued and Discontinued Operations.
In thousands
Three Months Ended
Nine Months Ended
Twelve Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net income (loss)
$
19,534
$
22,172
$
(8,107
)
$
(42,421
)
$
36,310
$
(47,771
)
Depreciation and amortization
8,929
5,623
22,085
13,157
27,847
15,088
Income tax expense (benefit)
12,231
-
3,754
-
1,265
-
Interest expense
13,523
13,129
103,536
65,069
118,493
67,921
EBITDA
$
54,217
$
40,924
$
121,268
$
35,805
$
183,915
$
35,239
Unrealized (gain) loss on hedging
activities
(8,348
)
(47,756
)
(5,233
)
(1,123
)
(4,256
)
(1,375
)
Inventory valuation adjustments
9,374
17,972
7,341
41,152
16,955
41,152
Gain on change in value of derivative
warrant liability
(4,621
)
(12,312
)
(5,036
)
(7,788
)
(5,069
)
(3,483
)
Stock-based compensation
769
378
1,502
951
2,125
1,201
(Gain) loss on sale of assets
-
-
(70,881
)
-
(70,558
)
(1,041
)
Acquisition costs
-
2,889
4,308
16,526
4,309
20,092
Environmental clean-up reserve
-
-
-
1,428
-
1,428
Other
132
(417
)
(1,022
)
(1,042
)
(8
)
2,106
Adjusted EBITDA
$
51,523
$
1,678
$
52,247
$
85,909
$
127,413
$
95,318
Three Months Ended September
30, 2023
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil and Recovery
Corporate
Consolidated
In thousands
Conventional
Renewable
Net income (loss)
$
65,161
$
(21,807
)
$
(1,489
)
$
41,865
$
912
$
(42,443
)
$
335
Depreciation and amortization
3,718
3,341
297
7,356
1,407
166
8,929
Income tax expense (benefit)
-
-
-
-
-
31,430
31,430
Interest expense
2,568
1,826
-
4,394
41
9,089
13,523
EBITDA
$
71,447
$
(16,640
)
$
(1,192
)
$
53,615
$
2,360
$
(1,758
)
$
54,217
Unrealized (gain) loss on hedging
activities
(4,620
)
(3,622
)
(40
)
(8,282
)
(66
)
-
(8,348
)
Inventory valuation adjustments
13,225
(3,851
)
-
9,374
-
-
9,374
Gain on change in value of derivative
warrant liability
-
-
-
-
-
(4,621
)
(4,621
)
Stock-based compensation
-
-
-
-
-
769
769
Other
-
-
-
-
167
(35
)
132
Adjusted EBITDA
$
80,052
$
(24,113
)
$
(1,232
)
$
54,707
$
2,461
$
(5,645
)
$
51,523
Nine Months Ended September
30, 2023
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil and Recovery
Corporate
Consolidated
In thousands
Conventional
Renewable
Net income (loss)
$
79,686
$
(42,272
)
$
(3,924
)
$
33,490
$
50,929
$
(111,726
)
$
(27,306
)
Depreciation and amortization
11,685
5,373
790
17,848
3,733
504
22,085
Income tax expense (benefit)
-
-
-
-
19,199
3,754
22,953
Interest expense
10,604
2,195
-
12,799
126
90,612
103,536
EBITDA
$
101,975
$
(34,704
)
$
(3,134
)
$
64,137
$
73,987
$
(16,856
)
$
121,268
Unrealized (gain) loss on hedging
activities
(4,341
)
(709
)
(82
)
(5,132
)
(101
)
-
(5,233
)
Inventory valuation adjustments
7,447
(106
)
-
7,341
-
-
7,341
Gain on change in value of derivative
warrant liability
-
-
-
-
-
(5,036
)
(5,036
)
Stock-based compensation
-
-
-
-
-
1,502
1,502
(Gain) loss on sale of assets
-
-
-
-
(70,884
)
3
(70,881
)
Acquisition costs
-
-
-
-
-
4,308
4,308
Other
-
-
-
-
(984
)
(38
)
(1,022
)
Adjusted EBITDA
$
105,081
$
(35,519
)
$
(3,216
)
$
66,346
$
2,018
$
(16,117
)
$
52,247
Three Months Ended September
30, 2022
In thousands
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil
Corporate
Consolidated
Net income (loss)
$
18,369
$
(2,251
)
$
16,118
$
7,638
$
(1,585
)
$
22,172
Depreciation and amortization
3,693
268
3,961
1,431
231
5,623
Interest expense
3,536
-
3,536
(2
)
9,595
13,129
EBITDA
$
25,599
$
(1,983
)
$
23,616
$
9,067
$
8,241
$
40,924
Unrealized (gain) loss on hedging
activities
(46,977
)
(775
)
(47,752
)
(4
)
-
(47,756
)
Inventory valuation adjustments
17,972
-
17,972
-
-
17,972
Gain on change in value of derivative
warrant liability
-
-
-
-
(12,312
)
(12,312
)
Stock-based compensation
-
-
-
-
378
378
Acquisition costs
2,889
-
2,889
-
-
2,889
Other
-
-
-
(417
)
-
(417
)
Adjusted EBITDA
$
(517
)
$
(2,758
)
$
(3,275
)
$
8,646
$
(3,693
)
$
1,678
Nine Months Ended September
30, 2022
In thousands
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil
Corporate
Consolidated
Net income (loss)
$
(5,593
)
$
(2,147
)
$
(7,740
)
$
40,399
$
(75,080
)
$
(42,421
)
Depreciation and amortization
7,416
707
8,123
4,305
729
13,157
Interest expense
6,768
-
6,768
4
58,297
65,069
EBITDA
$
8,591
$
(1,440
)
$
7,151
$
44,708
$
(16,054
)
$
35,805
Unrealized (gain) loss on hedging
activities
(76
)
(68
)
(144
)
(979
)
-
(1,123
)
Inventory valuation adjustments
41,152
-
41,152
-
-
41,152
Gain on change in value of derivative
warrant liability
-
-
-
-
(7,788
)
(7,788
)
Stock-based compensation
-
-
-
-
951
951
Acquisition costs
11,967
-
11,967
-
4,559
16,526
Environmental clean-up reserve
1,428
-
1,428
-
-
1,428
Other
-
-
-
(1,042
)
-
(1,042
)
Adjusted EBITDA
$
63,062
$
(1,508
)
$
61,554
$
42,687
$
(18,332
)
$
85,909
Unaudited Reconciliation of Long-Term Debt to Net Long-Term Debt
and Net Leverage.
In thousands
As of
September 30, 2023
September 30, 2022
December 31, 2022
Long-Term Debt:
Senior Convertible Note
$
15,230
$
95,178
$
95,178
Term Loan 2025
148,013
165,000
165,000
Finance lease liability long-term
66,751
44,339
45,164
Finance lease liability short-term
2,297
1,155
1,363
Insurance premiums financed
10,071
10,449
5,602
Long-Term Debt and Lease
Obligations
$
242,362
$
316,121
$
312,307
Unamortized discount and deferred
financing costs
(29,983
)
(86,384
)
(81,918
)
Long-Term Debt and Lease Obligations
per Balance Sheet
$
212,379
$
229,737
$
230,389
Cash and Cash Equivalents
(75,705
)
(117,464
)
(141,258
)
Restricted Cash
(3,605
)
(4,929
)
(4,929
)
Total Cash and Cash Equivalents
$
(79,310
)
$
(122,393
)
$
(146,187
)
Net Long-Term Debt
$
163,052
$
193,728
$
166,120
Adjusted EBITDA
$
127,413
$
95,318
$
161,000
Net Leverage
1.3x
2.0x
1.0x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107484081/en/
IR@vertexenergy.com 203-682-8284
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