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 fourth
quarter ended December 31, 2023.
The Company will host a conference call to discuss fourth
quarter 2023 results today, at 8:30 A.M. Eastern Time. Details
regarding the conference call are included at the end of this
release.
FOURTH QUARTER 2023 HIGHLIGHTS
- Reported net loss attributable to the Company of ($63.9)
million, or ($0.84) per fully-diluted share
- Reported Adjusted EBITDA of ($35.1) million (see “Non-GAAP
Financial Measures and Key Performance Indicators”, below).
- Continued safe operation of the Company’s Mobile, Alabama
refinery (the “Mobile Refinery”) with fourth quarter 2023
conventional throughput of 67,083 barrels per day (bpd), in line
with prior guidance.
- Renewable diesel (“RD”) throughput of 3,926 bpd, reflecting
Phase One capacity utilization of 49.1%.
- Total cash and cash equivalents of $80.6 million, including
restricted cash of $3.6 million and $50 million in additional term
loan proceeds received during the quarter ended December 31,
2023.
FULL-YEAR 2023 HIGHLIGHTS
- Reported net loss attributable to the Company of ($71.5)
million for the full year 2023, versus net loss attributable to the
Company of ($4.8) million in 2022.
- Reported Adjusted EBITDA of $17.1 million for the full-year
versus Adjusted EBITDA of $161.0 million for the full year 2022
(see “Non-GAAP Financial Measures and Key Performance Indicators”,
below).
- Conventional throughput volumes of 73,734 barrels per day (bpd)
for 2023 (98.3% utilization).
- Completion of Phase I of Renewable Diesel conversion project
with the launch of Renewables business and Marine Fuels and
Logistics business in Mobile, Alabama.
Vertex reported fourth quarter 2023 net loss attributable to the
Company of ($63.9) million, or ($0.84) per fully-diluted share,
versus net income attributable to the Company of $44.4 million, or
$0.07 per fully-diluted share for the fourth quarter of 2022.
Adjusted EBITDA (see “Non-GAAP Financial Measures and Key
Performance Indicators”, below) was ($35.1) million for the fourth
quarter 2023, compared to Adjusted EBITDA of $75.2 million in the
prior-year period.
For the full-year 2023, the Company reported a net loss
attributable to the Company of ($71.5) million versus ($4.8)
million for the full-year 2022, largely attributable to losses in
the Renewables segment due to elevated costs for Refined, Bleached
and Deodorized (“RBD”) soybean oil feedstock, and increased
corporate segment expenses for overhead to support business
expansion. The Company also reported Adjusted EBITDA of $17.1
million, versus $161.0 million for the full years 2023 and 2022,
respectively. Full-year financial results for 2023 include several
non-cash items such as inventory valuation adjustments of $6
million, changes in the value of derivative liabilities which
amounted to $8 million and a one-time pre-tax gain on the sale of
assets of $70.9 million related to the sale of the Heartland
facility.
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, “In 2023, we focused on establishing new lines of business,
expanding our capabilities, and positioning ourselves for growth
into new markets. We believe the launch of Vertex Renewables and
optimization of feedstocks have positioned the Company for margin
opportunities under the new credit regime post-2024. Additionally,
the inauguration of our Marine Fuels and Logistics business
alongside our Supply and Trading division has enabled us to
leverage strategic integration opportunities, enhancing netbacks
and capturing additional value for our finished products.” Mr.
Cowart continued, “As we move into 2024, our priorities are to
increase our cash position, reduce our operating costs, and improve
margins.”
MOBILE REFINERY OPERATIONS
Conventional Fuels Refining
Total conventional throughput at the Mobile Refinery was 67,083
bpd in the fourth quarter of 2023. Total production of finished
high-value, light products, such as gasoline, diesel, and jet fuel,
represented approximately 66% of total production in the fourth
quarter of 2023, vs. 64% in the third quarter of 2023, and in line
with 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 $7.3 million and $29.6 million of fuel gross margin (a
Key performance indicator (KPI) discussed below) or $4.79 per
barrel during the fourth quarter of 2023, versus generating a gross
profit of $89.9 million, and fuel gross margin of $147.0 million,
or $20.50 per barrel in the fourth quarter of 2022.
Total conventional throughput at the Mobile Refinery was 73,734
bpd for the full year 2023, reflecting capacity utilization of 98%.
Total production of finished high-value, light products, such as
gasoline, diesel, and jet fuel, represented approximately 63% of
total production in 2023, vs. 70% in the nine-month operating
period in 2022.
The Mobile Refinery’s conventional operations generated a gross
profit of $165.5 million and $318.6 million of fuel gross margin (a
KPI discussed below) or $11.84 per barrel during the full year
2023, versus generating a gross profit of $140.9 million, and fuel
gross margin of $398.4 million, or $19.93 per barrel in the
nine-month operating period in 2022.
Renewable Diesel Facility
Total renewable throughput at the Mobile Renewable Diesel
facility was 3,926 bpd in the fourth quarter of 2023. Total
production of renewable diesel was 3,786 bpd reflecting a product
yield of 96.4%.
The Mobile Renewable Diesel facility operations generated a
gross loss of $(17.6) million and $4.4 million of fuel gross margin
(a KPI discussed below) or $12.11 per barrel during the fourth
quarter of 2023.
Feedstock Supply Strategy Advanced. During the fourth
quarter, Vertex continued to advance its alternative feedstock
supply strategy. The Company had recently completed the required
temporary filings for low carbon fuel standard (“LCFS”) credits at
the default carbon intensity (“CI”) score. As previously
communicated, the Company expected that the initial default level
LCFS credits would be applied to all volumes of renewable diesel
produced during the third and fourth quarter of 2023 and to
contribute to financial results in the fourth quarter. As
anticipated, during the fourth quarter of 2023, Vertex received an
initial LCFS payment calculated using the temporary default CI
score, resulting in a net payment of $9.6 million.
During the fourth quarter, the Company successfully completed
runs to support filing for proprietary carbon intensity scores of
LCFS pathways for Tallow. In addition to the testing completed for
Soy, distiller’s corn oil (“DCO”) and Canola completed during the
third quarter of 2023, the Company has now successfully completed
the filings for each of these four feedstocks allowing Vertex to
receive the increased credit value available with their lower
carbon intensity production as compared to the default temporary
values for all future renewable diesel production values.
Fourth Quarter and Full Year 2023 Mobile Refinery
Results Summary ($/millions unless otherwise noted)
Conventional Fuels Refinery
1Q23
2Q23
3Q23
4Q23
FY2023
Total Throughput (bpd)
71,328
76,330
80,171
67,083
73,734
Total Throughput (MMbbl)
6.42
6.95
7.38
6.17
26.91
Conventional Facility Capacity
Utilization1
95.1%
101.8%
106.9%
89.4%
98.3%
Direct Opex Per Barrel ($/bbl)
$3.84
$3.35
$2.40
$2.46
$3.00
Fuel Gross Margin ($/MM)
$103.8
$55.7
$129.5
$29.6
$318.6
Fuel Gross Margin Per Barrel ($/bbl)
$16.17
$8.03
$17.56
$4.79
$11.84
Production
Yield
Gasoline (bpd)
15,723
17,812
19,211
17,826
17,653
% Production
22.7%
23.2%
24.0%
25.9%
23.9%
ULSD (bpd)
14,720
15,618
16,479
14,510
15,334
% Production
21.2%
20.3%
20.6%
21.1%
20.8%
Jet (bpd)
12,789
13,570
15,823
12,937
13,786
% Production
18.4%
17.7%
19.8%
18.8%
18.7%
Total Finished Fuel Products
43,232
47,000
51,513
45,273
46,773
% Production
62.3%
61.2%
64.4%
65.9%
63.4%
Other2
26,119
29,828
28,495
23,457
26,972
% Production
37.7%
38.8%
35.6%
34.1%
36.6%
Total Production (bpd)
69,351
76,828
80,008
68,730
73,745
Total Production (MMbbl)
6.24
6.99
7.36
6.32
26.92
Renewable Fuels Refinery
1Q23
2Q23
3Q23
4Q23
FY2023
Total Renewable Throughput (bpd)
-
2,490
5,397
3,926
3,943
Total Renewable Throughput (MMbbl)
-
0.23
0.50
0.36
1.08
Renewable Diesel Facility Capacity
Utilization3
-
31.1%
67.5%
49.1%
49.3%
Direct Opex Per Barrel ($/bbl)
-
$31.23
$23.05
$27.32
$26.17
Renewable Fuel Gross Margin
-
($3.1)
$2.4
$4.4
$3.7
Renewable Fuel Gross Margin Per Barrel
($/bbl)
-
($13.66)
$4.78
$12.11
$3.37
Renewable Diesel Production (bpd)
-
2,208
5,276
3,786
3,762
Renewable Diesel Production (MMbbl)
-
0.20
0.49
0.35
1.03
Renewable Diesel Production Yield (%)
-
88.7%
97.8%
96.4%
95.4%
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 December 31, 2023, Vertex had total debt outstanding of
$286 million, including $15.2 million in 6.25% Senior Convertible
Notes, $196.0 million outstanding on the Company’s Term Loan,
finance lease obligations of $68.6 million, and $6.2 million in
other obligations. The Company had total cash and equivalents of
$80.6 million, including $3.6 million of restricted cash on the
balance sheet as of December 31, 2023, for a net debt position of
$205.5 million. The ratio of net debt to trailing twelve-month
Adjusted EBITDA was 12.0 times as of December 31, 2023 (see also
“Non-GAAP Financial Measures and Key Performance Indicators”,
below).
As previously announced on January 2, 2024, the Company reached
an agreement with its existing lending group to modify certain
terms and conditions of the current term loan agreement. The
amended term loan provided an incremental $50.0 million in
borrowings, the full amount of which was borrowed upon closing on
December 29, 2023 and therefore reflected in Vertex’s year end cash
position of $80.6 million.
Vertex management continuously monitors current market
conditions to assess expected cash generation and liquidity needs
against its available cash position, using the forward crack
spreads in the market.
As of the current year-end, the Company believes it has adequate
financial flexibility to meet its needs based on the total
liquidity position. Furthermore, the Company is currently going
through a strategic evaluation process with BofA Securities, which
started in October 2023, that may result in further enhancements to
its current liquidity options.
Commodity Price Risk Management
During the fourth quarter, Vertex’s commodity price risk
management team entered into hedge positions covering approximately
38% of planned diesel production and distillate production for the
first quarter of 2024 as discussed below:
Asset
Contract
Contract
Price
Mid-Point
Hedged
Approximate %
Type
Details
Period
($/bbl)
Prod'n (Bbl)
Volumes (bbl)
Hedged1
Fixed Price Swap
ULSD/LLS Swap
January
$25.55
762,600
100,000
13.1%
Fixed Price Swap
ULSD/LLS Swap
February
$30.68
713,400
375,000
52.6%
Fixed Price Swap
ULSD/LLS Swap
March
$28.95
762,600
375,000
49.2%
Total
$28.39
2,238,600
850,000
38.0%
1.) % hedged assumes mid-point of
operating guidance of 61.5 Mbbld and mid-point of distillate
production yield of 40%
Management Outlook
All guidance presented below is current as of the time of this
release and is subject to change. All prior financial guidance
should no longer be relied upon.
Conventional Fuels
1Q 2024
Operational:
Low
High
Mobile Refinery Conventional Throughput
Volume (Mbpd)
60.0
63.0
Capacity Utilization
80%
84%
Production Yield Profile:
Percentage Finished Products1
64%
68%
Intermediate & Other Products2
36%
32%
Renewable Fuels
1Q 2024
Operational:
Low
High
Mobile Refinery Renewable Throughput
Volume (Mbpd)
3.0
5.0
Capacity Utilization
38%
63%
Production Yield
96%
98%
Yield Loss
4%
2%
Consolidated
1Q 2024
Operational:
Low
High
Mobile Refinery Total Throughput Volume
(Mbpd)
63.0
68.0
Capacity Utilization
76%
82%
Financial Guidance:
Direct Operating Expense ($/bbl)
$4.59
$4.95
Capital Expenditures ($/MM)
$20.00
$25.00
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, February 28, 2024 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 Thursday, March 14, 2024, 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. The
Company’s 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 first quarter of 2024, 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, the outcome of such
review, and the impact on any such transactions, or the review
thereof, 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 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 to 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,
changes in interest rates and inflation, and potential recessions;
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 (including the Company’s Annual Report
on Form 10-K for the year ended December 31, 2023, when filed by
the Company) 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 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 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 or minus
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.
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
(unaudited in thousands,
except number of shares and par value)
(UNAUDITED)
31-Dec-23
31-Dec-22
ASSETS Current assets Cash and cash equivalents
$
76,967
$
141,258
Restricted cash
3,606
4,929
Accounts receivable, net
36,164
34,548
Inventory
182,120
135,473
Prepaid expenses and other current assets
53,174
36,660
Assets held for sale
—
20,560
Total current assets
352,031
373,428
Fixed assets, net
326,111
201,749
Finance lease right-of-use assets, net
64,499
44,081
Operating lease right-of-use assets, net
96,394
53,557
Intangible assets, net
11,541
11,827
Deferred tax assets
—
2,498
Other assets
4,048
2,245
Total non-current assets
502,593
315,957
TOTAL ASSETS
$
854,624
$
689,385
LIABILITIES AND EQUITY Current liabilities Accounts
payable
$
75,004
$
20,997
Accrued expenses and other current liabilities
73,636
81,953
Finance lease-current
2,435
1,363
Operating lease-current
20,296
3,713
Current portion of long-term debt
16,362
13,911
Obligations under inventory financing agreements, net
141,093
117,939
Liabilities held for sale, current
—
3,424
Total current liabilities
328,826
243,300
Long-term debt, net
170,701
170,010
Finance lease-non-current
66,206
45,164
Operating lease-non-current
74,444
49,844
Deferred tax liabilities
2,776
—
Derivative warrant liability
9,907
14,270
Other liabilities
1,377
1,377
Total liabilities
654,237
523,965
EQUITY 50,000,000 of total Preferred shares
authorized: Common stock, $0.001 par value per share; 750,000,000
shares authorized; 93,514,346 and 75,668,826 issued and outstanding
at December 31, 2023 and 2022, respectively.
94
76
Additional paid-in capital
383,632
279,552
Accumulated deficit
(187,379
)
(115,893
)
Total Vertex Energy, Inc. stockholders' equity
196,347
163,735
Non-controlling interest
4,040
1,685
Total equity
200,387
165,420
TOTAL LIABILITIES AND EQUITY
$
854,624
$
689,385
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
FOR THE YEARS ENDED DECEMBER
31,
(in thousands, except per
share amounts)
(UNAUDITED)
2023
2022
2021
Revenues
$
3,177,187
$
2,791,715
$
207,760
Cost of revenues (exclusive of depreciation and amortization shown
separately below)
3,005,996
2,598,276
178,786
Depreciation and amortization attributable to costs of revenues
27,018
13,429
4,043
Gross profit
144,173
180,010
24,931
Operating expenses: Selling, general and administrative
expenses
168,640
127,782
30,606
Loss on assets impairment
—
—
2,124
Depreciation and amortization attributable to operating expenses
4,146
3,673
1,681
Total operating expenses
172,786
131,455
34,411
Income (loss) from operations
(28,613
)
48,555
(9,480
)
Other income (expense): Other income (expense)
633
(306
)
4,158
Gain (loss) on change in value of derivative warrant liability
7,992
7,821
(15,685
)
Interest expense
(119,567
)
(79,911
)
(3,832
)
Total other expense
(110,942
)
(72,396
)
(15,359
)
Loss from continuing operations before income tax
(139,555
)
(23,841
)
(24,839
)
Income tax benefit
13,385
7,171
—
Loss from continuing operations
(126,170
)
(16,670
)
(24,839
)
Income from discontinued operations, net of tax (see operation
report of discontinued operation below)
54,197
18,667
17,178
Net income (loss)
(71,973
)
1,997
(7,661
)
Net income (loss) attributable to non-controlling interest and
redeemable non-controlling interest from continuing operations
(487
)
(63
)
207
Net income attributable to non-controlling interest and redeemable
non-controlling interest from discontinued operations
—
6,882
10,496
Net loss attributable to Vertex Energy, Inc.
(71,486
)
(4,822
)
(18,364
)
Accretion of redeemable noncontrolling interest to
redemption value
—
(428
)
(1,992
)
Accretion of discount on Series B and B-1 Preferred Stock
—
—
(507
)
Dividends on Series B and B-1 Preferred Stock
—
—
258
Net loss attributable to stockholders from continuing
operations
(125,683
)
(17,035
)
(27,287
)
Net income attributable to stockholders from discontinued
operations, net of tax
54,197
11,785
6,682
Net loss attributable to common stockholders
$
(71,486
)
$
(5,250
)
$
(20,605
)
Basic income (loss) per common share Continuing operations
$
(1.47
)
$
(0.24
)
$
(0.48
)
Discontinued operations, net of tax
0.63
0.17
0.12
Basic loss per common share
$
(0.84
)
$
(0.07
)
$
(0.36
)
Diluted income (loss) per common share Continuing operations
$
(1.47
)
$
(0.24
)
$
(0.48
)
Discontinued operations, net of tax
0.63
0.17
0.12
Diluted loss per common share
$
(0.84
)
$
(0.07
)
$
(0.36
)
Shares used in computing income (loss) per share Basic
85,596
70,686
56,303
Diluted
85,596
70,686
56,303
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
FOR THE YEARS ENDING DECEMBER
31, 2023, 2022 AND 2021
(in thousands except par
value)
(UNAUDITED)
Common Stock
Series A Preferred
Additional
Paid-in
Capital
Accumulated
Deficit
Non-
controlling
Interest
Total
Stockholders'
Equity
Shares
$0.001 Par
Shares
$0.001 Par
Balance on December 31, 2020
45,555
$
46
420
$
—
$
94,570
$
(90,009
)
$
1,318
$
5,925
Dividends on Series B and B1 Preferred Stock
—
—
—
—
—
(372
)
—
(372
)
Accretion of discount on Series B and B1 Preferred Stock
—
—
—
—
—
(507
)
—
(507
)
Conversion of B1 Preferred Stock to common
7,722
7
—
—
12,038
—
—
12,045
Share based compensation expense
—
—
—
—
863
—
—
863
Exercise of options
1,800
2
—
—
2,188
—
—
2,190
Exercise of B1 warrants
3,093
3
—
—
16,402
—
—
16,405
Conversion of Series A Preferred stock to common stock
34
—
(34
)
—
—
—
—
—
Conversion of Series B Preferred Stock to common stock
5,084
5
—
—
12,559
630
—
13,194
Distribution to noncontrolling
—
—
—
—
—
—
(169
)
(169
)
Adjustment of redeemable noncontrolling interest to redemption
value
—
—
—
—
—
(1,992
)
—
(1,992
)
Contribution from noncontrolling interest
—
—
—
—
—
—
(11
)
(11
)
Net income (loss)
—
—
—
—
—
(18,364
)
10,703
(7,661
)
Less: amount attributable to redeemable non-controlling interest
—
—
—
—
—
—
(9,844
)
(9,844
)
Balance on December 31, 2021
63,288
63
386
—
138,620
(110,614
)
1,997
30,066
Conversion of Series A Preferred stock to common stock
386
1
(386
)
—
—
—
—
1
Conversion of Convertible Senior Notes to common (net of tax)
10,165
10
—
—
59,812
—
—
59,822
Reclass of derivative liabilities
—
—
—
—
78,789
—
—
78,789
Share based compensation expense
—
—
—
—
1,574
—
—
1,574
Exercise of warrants
1,209
1
—
—
(1
)
—
—
—
Exercise of options
622
1
—
—
729
—
—
730
Adjustment of redeemable non controlling interest
—
—
—
—
29
(29
)
—
—
Distribution to noncontrolling
—
—
—
—
—
—
(380
)
(380
)
Adjustment of redeemable noncontrolling interest to redemption
value
—
—
—
—
—
(428
)
—
(428
)
Redemption of noncontrolling interest
—
—
—
—
—
—
41
41
Net income (loss)
—
—
—
—
—
(4,822
)
6,819
1,997
Less: amount attributable to redeemable non-controlling interest
—
—
—
—
—
—
(6,792
)
(6,792
)
Balance on December 31, 2022
75,670
76
—
—
279,552
(115,893
)
1,685
165,420
Issuance of restricted stock
113
—
—
—
—
—
—
—
Exercise of options
526
1
—
—
682
—
—
683
Share based compensation expense
—
—
—
—
2,285
—
—
2,285
Conversion of Convertible Senior Note, net
17,206
17
—
—
101,113
—
—
101,130
Contribution from noncontrolling shareholder
—
—
—
—
—
—
2,842
2,842
Net loss
—
—
—
—
—
(71,486
)
(487
)
(71,973
)
Balance on December 31, 2023
93,515
$
94
—
$
—
$
383,632
$
(187,379
)
$
4,040
$
200,387
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE YEARS ENDING DECEMBER
31, 2023, 2022 AND 2021
(UNAUDITED)
2023
2022
2021
Cash flows from operating activities Net income (loss)
$
(71,973
)
$
1,997
$
(7,661
)
Net income from discontinued operations, net of tax
54,197
18,667
17,178
Net loss from continuing operations
(126,170
)
(16,670
)
(24,839
)
Adjustments to reconcile net income (loss) from continuing
operations to cash used in operating activities: Stock-based
compensation expense
2,285
1,574
862
Depreciation and amortization
31,165
17,102
5,724
(Reduction in) Provision for bad debt
(224
)
242
826
Loss (gain) on commodity derivative contracts
(2,858
)
87,978
2,258
Provision for environment clean up
—
1,428
—
Gain on forgiveness of debt
—
—
(4,222
)
Net cash settlement on commodity derivatives
6,575
(92,556
)
(2,436
)
Loss on sale of assets
(1
)
220
64
Loss on assets impairment
—
—
2,124
Amortization of debt discount and deferred costs
78,779
49,251
1,231
Deferred income tax benefit
(13,385
)
(7,171
)
—
Loss (gain) on change in value of derivative warrant liability
(7,992
)
(7,821
)
15,685
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(3,075
)
(27,183
)
(821
)
Inventory
(45,231
)
2,586
(3,997
)
Prepaid expenses
(21,027
)
(26,724
)
(1,615
)
Accounts payable
53,593
10,850
1,054
Accrued expenses
(9,855
)
77,647
2,551
Other assets
(1,061
)
56
(48
)
Net cash (used in) provided by operating activities from continuing
operations
(58,482
)
70,809
(5,599
)
Cash flows from investing activities Deposit for refinery purchase
and related costs
—
—
(13,663
)
Internally developed or purchased software
(3,223
)
(149
)
—
Proceeds from sale of discontinued operation
92,034
—
—
Redemption of noncontrolling entity
—
556
—
Proceeds from the sale of assets
7
395
75
Acquisition of business, net of cash
(7,775
)
(227,525
)
2
Purchase of fixed assets
(140,313
)
(75,512
)
(2,331
)
Net cash used in investing activities from continuing operations
(59,270
)
(302,235
)
(15,917
)
Cash flows from financing activities Line of credit payments, net
—
—
(133
)
Proceeds received from exercise of options and warrants
683
730
6,921
Net borrowings on inventory financing agreements
22,154
117,189
—
Contribution received from noncontrolling interest
2,842
—
2
Distribution to non-controlling interest
—
(380
)
(169
)
Redemption of redeemable noncontrolling interest
—
(50,666
)
—
Payments on finance leases
(2,045
)
(819
)
(844
)
Proceeds from issuance of notes payable
68,236
173,256
143,831
Payments made on notes payable
(39,582
)
(18,948
)
(15,836
)
Net cash provided by financing activities from continuing
operations
52,288
220,362
133,772
Discontinued operations: Net cash (used in) provided
by operating activities
(150
)
25,287
15,349
Net cash used in investing activities
—
(4,663
)
(1,973
)
Net cash provided by (used in) discontinued operations
(150
)
20,624
13,376
Net change in cash and cash equivalents and restricted cash
(65,614
)
9,560
125,632
Cash and cash equivalents and restricted cash at beginning of the
year
146,187
136,627
10,995
Cash and cash equivalents and restricted cash at end of year
$
80,573
$
146,187
$
136,627
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).
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE YEARS ENDING DECEMBER
31, 2023, 2022 AND 2021
(UNAUDITED)
(Continued)
2023
2022
2021
Cash and cash equivalents
$
76,967
$
141,258
$
36,130
Restricted cash
3,606
4,929
100,497
Cash and cash equivalents and restricted cash as shown in the
consolidated statements of cash flows
$
80,573
$
146,187
$
136,627
SUPPLEMENTAL INFORMATION Cash paid for interest
$
47,430
$
33,901
$
2,273
Cash paid for income taxes
—
—
—
NON-CASH INVESTING AND FINANCING TRANSACTIONS Conversion of
Series B and B1 Preferred Stock into common stock
$
—
$
—
$
24,610
Dividends on Series B and B-1 Preferred Stock
$
—
$
—
$
(258
)
Accretion of discount on Series B and B-1 Preferred Stock
$
—
$
—
$
507
Accretion of redeemable noncontrolling interest to redemption value
$
—
$
428
$
1,992
Equipment acquired under finance leases
$
24,159
$
46,351
$
552
Equipment acquired under operating leases
$
55,114
$
20,452
$
89
Reclass derivative liabilities
$
—
$
78,789
$
—
Conversion of Convertible Senior note
$
79,948
$
59,822
$
—
Unaudited segment information for the three and twelve months
ended December 31, 2023, 2022 and 2021 is as follows (in
thousands):
YEAR ENDED DECEMBER 31,
2023
Refining and
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues: Refined products
$
3,007,937
$
121,122
$
(13,039
)
$
3,116,020
Re-refined products
17,997
15,959
—
33,956
Services
20,057
7,154
—
27,211
Total revenues
3,045,991
144,235
(13,039
)
3,177,187
Cost of revenues (exclusive of depreciation and amortization shown
separately below)
2,894,617
124,731
(13,352
)
3,005,996
Depreciation and amortization attributable to costs of revenues
22,118
4,900
—
27,018
Gross profit
129,256
14,604
313
144,173
Selling, general and administrative expenses
118,165
19,788
30,687
168,640
Depreciation and amortization attributable to operating expenses
3,311
164
671
4,146
Income (loss) from operations
7,780
(5,348
)
(31,045
)
(28,613
)
Other income (expenses) Other income (expense)
—
600
33
633
Gain on change in derivative liability
—
—
7,992
7,992
Interest expense
(18,092
)
(188
)
(101,287
)
(119,567
)
Total other income (expense)
(18,092
)
412
(93,262
)
(110,942
)
Income (loss) before income tax
$
(10,312
)
$
(4,936
)
$
(124,307
)
$
(139,555
)
Total capital expenditures
$
122,827
$
17,486
$
—
$
140,313
YEAR ENDED DECEMBER 31,
2022
Refining and
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues: Refined products
$
2,370,240
$
163,095
$
—
$
2,533,335
Re-refined products
229,793
19,105
—
248,898
Services
6,611
2,871
—
9,482
Total revenues
2,606,644
185,071
—
2,791,715
Cost of revenues (exclusive of depreciation and amortization shown
separately below)
2,453,809
144,467
—
2,598,276
Depreciation and amortization attributable to costs of revenues
9,605
3,824
—
13,429
Gross profit
143,230
36,780
—
180,010
Selling, general and administrative expenses
83,001
17,241
27,540
127,782
Depreciation and amortization attributable to operating expenses
2,593
180
900
3,673
Income (loss) from operations
57,636
19,359
(28,440
)
48,555
Other income (expenses) Other income (expense)
18
(104
)
(220
)
(306
)
Gain on change in derivative liability
—
—
7,821
7,821
Interest expense
(10,414
)
(50
)
(69,447
)
(79,911
)
Total other income (expense)
(10,396
)
(154
)
(61,846
)
(72,396
)
Income (loss) before income tax
$
47,240
$
19,205
$
(90,286
)
$
(23,841
)
Total capital expenditures
$
72,588
$
2,924
$
—
$
75,512
YEAR ENDED DECEMBER 31,
2021
Refining and
Marketing
Black Oil &
Recovery
Corporate and
Eliminations
Total
Revenues: Refined products
$
78,191
$
85,253
$
—
$
163,444
Re-refined products
15,039
25,611
—
40,650
Services
—
3,666
—
3,666
Total revenues
93,230
114,530
—
207,760
Cost of revenues (exclusive of depreciation and amortization shown
separately below)
89,570
89,216
—
178,786
Depreciation and amortization attributable to costs of revenues
509
3,534
—
4,043
Gross profit
3,151
21,780
—
24,931
Selling, general and administrative expenses
3,277
14,444
12,885
30,606
Loss on Assets Impairment
—
2,124
—
2,124
Depreciation and amortization attributable to operating expenses
434
234
1,013
1,681
Income (loss) from operations
(560
)
4,978
(13,898
)
(9,480
)
Other income (expenses) Other income (expense)
—
—
4,158
4,158
Loss on change in derivative liability
—
—
(15,685
)
(15,685
)
Interest expense
—
—
(3,832
)
(3,832
)
Total other income
—
—
(15,359
)
(15,359
)
Income (loss) before income tax
$
(560
)
$
4,978
$
(29,257
)
$
(24,839
)
Total capital expenditures
$
—
$
2,331
$
—
$
2,331
The following summarized unaudited financial information has
been segregated from continuing operations and reported as
Discontinued Operations for the years ended December 31, 2023, 2022
and 2021 (in thousands):
For The Year Ended December
31
2023
2022
2021
Revenues
$
7,366
$
85,495
$
58,248
Cost of revenues (exclusive of depreciation shown separately below)
4,589
51,815
32,467
Depreciation and amortization attributable to costs of revenues
124
1,566
1,566
Gross profit
2,653
32,114
24,215
Operating expenses: Selling, general and administrative expenses
632
8,501
6,727
(exclusive of acquisition related expenses) Depreciation and
amortization expense attributable to operating expenses
21
251
251
Total Operating expenses
653
8,752
6,978
Income from operations
2,000
23,362
17,237
Other income (expense) Interest expense
-
-39
-59
Total other expense
-
-39
-59
Income before income tax
2,000
23,323
17,178
Income tax expense
(1,572
)
(4,683
)
—
Gain on sale of discontinued operations, net of tax of 1,711
53,769
27
—
Income from discontinued operations, net of tax
$
54,197
$
18,667
$
17,178
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 December
31, 2023
In thousands
Conventional
Renewable
Mobile Refinery
Total
Gross profit
$
7,283
$
(17,557
)
$
(10,273
)
Unrealized (gain) loss on hedging activities
4,892
77
4,969
Inventory valuation adjustments
(3,400
)
2,152
(1,248
)
Adjusted gross margin
$
8,775
$
(15,328
)
$
(6,553
)
Variable production costs attributable to cost of revenues
19,770
19,497
39,267
Depreciation and amortization attributable to cost of revenues
2,492
3,997
6,489
RINs
6,662
-
6,662
Realized (gain) loss on hedging activities
(3,751
)
(3,587
)
(7,338
)
Financing costs
1,989
157
2,146
Other revenues
(6,361
)
(361
)
(6,722
)
Fuel gross margin
$
29,576
$
4,375
$
33,951
Throughput (bpd)
67,083
3,926
71,009
Fuel gross margin per barrel of throughput
$
4.79
$
12.11
$
5.20
Total OPEX
$
15,162
$
9,868
$
25,030
Operating expenses per barrel of throughput
$
2.46
$
27.32
$
3.83
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 (gain) 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 (gain) 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
Twelve Months Ended December
31, 2023
In thousands
Conventional
Renewable
Mobile Refinery
Total
Gross profit
$
165,481
$
(39,078
)
$
126,403
Unrealized (gain) loss on hedging activities
551
(632
)
(81
)
Inventory valuation adjustments
4,047
2,046
6,093
Adjusted gross margin
$
170,079
$
(37,664
)
$
132,415
Variable production costs attributable to cost of revenues
96,555
32,532
129,087
Depreciation and amortization attributable to cost of revenues
11,969
9,335
21,304
RINs
55,245
-
55,245
Realized (gain) loss on hedging activities
(2,486
)
102
(2,384
)
Financing costs
5,969
420
6,389
Other revenues
(18,708
)
(1,075
)
(19,783
)
Fuel gross margin
$
318,623
$
3,650
$
322,273
Throughput (bpd)
73,734
3,943
77,677
Fuel gross margin per barrel of throughput
$
11.84
$
3.37
$
11.37
Total OPEX
$
80,862
$
28,389
$
109,251
Operating expenses per barrel of throughput
$
3.00
$
26.18
$
3.85
Unaudited Reconciliation of Adjusted EBITDA to Net loss from
Continued and Discontinued Operations.
In thousands
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net income (loss)
$
(63,865
)
$
44,418
$
(71,973
)
$
1,997
Depreciation and amortization
9,225
5,761
31,310
18,919
Income tax expense (benefit)
1,543
(2,489
)
5,297
(2,488
)
Interest expense
16,029
14,956
119,566
79,950
EBITDA
$
(37,068
)
$
62,646
$
84,200
$
98,378
Unrealized (gain) loss on hedging activities
4,981
978
(252
)
(146
)
Inventory valuation adjustments
(1,248
)
9,614
6,093
50,766
Gain on change in value of derivative warrant liability
(2,956
)
(33
)
(7,992
)
(7,821
)
Stock-based compensation
783
622
2,285
1,574
(Gain) loss on sale of assets
3
-
(70,878
)
-
Acquisition costs
-
-
4,308
16,527
Environmental clean-up reserve
-
-
-
1,428
Other
388
1,339
(634
)
280
Adjusted EBITDA
$
(35,117
)
$
75,166
$
17,130
$
160,986
Three Months Ended December
31, 2023
Mobile Refinery
Legacy Refining
& Marketing
Total Refining &
Marketing
Black Oil and
Recovery
Corporate
Consolidated
In thousands
Conventional
Renewable
Net income (loss)
$
(11,112
)
$
(30,266
)
$
(2,424
)
$
(43,801
)
$
(1,670
)
$
(18,395
)
$
(63,865
)
Depreciation and amortization
3,252
4,017
313
7,582
1,476
167
9,225
Income tax expense (benefit)
-
-
-
-
(517
)
2,060
1,543
Interest expense
2,473
2,820
-
5,293
62
10,675
16,029
EBITDA
$
(5,387
)
$
(23,429
)
$
(2,111
)
$
(30,926
)
$
(649
)
$
(5,493
)
$
(37,068
)
Unrealized (gain) loss on hedging activities
4,892
77
(7
)
4,962
19
-
4,981
Inventory valuation adjustments
(3,400
)
2,152
-
(1,248
)
-
-
(1,248
)
Gain on change in value of derivative warrant liability
-
-
-
-
-
(2,956
)
(2,956
)
Stock-based compensation
-
-
-
-
-
783
783
(Gain) loss on sale of assets
-
-
-
-
-
3
3
Other
-
-
-
-
389
(1
)
388
Adjusted EBITDA
$
(3,895
)
$
(21,200
)
$
(2,118
)
$
(27,212
)
$
(241
)
$
(7,664
)
$
(35,117
)
Twelve Months Ended December
31, 2023
Mobile Refinery
Legacy Refining
& Marketing
Total Refining &
Marketing
Black Oil and
Recovery
Corporate
Consolidated
In thousands
Conventional
Renewable
Net income (loss)
$
68,574
$
(72,537
)
$
(6,349
)
$
(10,312
)
$
49,260
$
(110,922
)
$
(71,973
)
Depreciation and amortization
14,937
9,390
1,103
25,430
5,209
671
31,310
Income tax expense (benefit)
-
-
-
-
18,682
(13,385
)
5,297
Interest expense
13,077
5,015
-
18,092
188
101,287
119,566
EBITDA
$
96,588
$
(58,132
)
$
(5,246
)
$
33,210
$
73,339
$
(22,349
)
$
84,200
Unrealized (gain) loss on hedging activities
551
(632
)
(89
)
(170
)
(82
)
-
(252
)
Inventory valuation adjustments
4,047
2,046
-
6,093
-
-
6,093
Gain on change in value of derivative warrant liability
-
-
-
-
-
(7,992
)
(7,992
)
Stock-based compensation
-
-
-
-
-
2,285
2,285
(Gain) loss on sale of assets
-
-
-
-
(70,884
)
6
(70,878
)
Acquisition costs
-
-
-
-
-
4,308
4,308
Other
-
-
-
-
(595
)
(39
)
(634
)
Adjusted EBITDA
$
101,186
$
(56,718
)
$
(5,335
)
$
39,133
$
1,778
$
(23,781
)
$
17,130
Three Months Ended December
31, 2022
In thousands
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil
Corporate
Consolidated
Net income (loss)
$
56,839
$
(1,860
)
$
54,979
$
4,706
$
(15,267
)
$
44,418
Depreciation and amortization
3,857
-
3,857
1,733
171
5,761
Income tax expense (benefit)
-
-
-
-
(2,489
)
(2,489
)
Interest expense
3,721
-
3,721
25
11,210
14,956
EBITDA
$
64,417
$
(1,860
)
$
62,557
$
6,464
$
(6,375
)
$
62,646
Unrealized (gain) loss on hedging activities
165
138
303
675
-
978
Inventory valuation adjustments
14,011
-
14,011
(4,397
)
-
9,614
Gain on change in value of derivative warrant liability
-
-
-
-
(33
)
(33
)
Stock-based compensation
-
-
-
-
622
622
Other
-
-
-
1,119
220
1,339
Adjusted EBITDA
$
78,593
$
(1,722
)
$
76,871
$
3,861
$
(5,566
)
$
75,166
Twelve Months Ended December
31, 2022
In thousands
Mobile Refinery
Legacy Refining &
Marketing
Total Refining &
Marketing
Black Oil
Corporate
Consolidated
Net income (loss)
$
51,247
$
(4,007
)
$
47,240
$
18,968
$
(64,211
)
$
1,997
Depreciation and amortization
11,273
925
12,198
4,004
2,717
18,919
Income tax expense (benefit)
-
-
-
-
(2,488
)
(2,488
)
Interest expense
10,414
-
10,414
67
69,469
79,950
EBITDA
$
72,934
$
(3,082
)
$
69,852
$
23,039
$
5,487
$
98,378
Unrealized (gain) loss on hedging activities
90
69
159
(305
)
-
(146
)
Inventory valuation adjustments
37,764
-
37,764
13,002
-
50,766
Gain on change in value of derivative warrant liability
-
-
-
-
(7,821
)
(7,821
)
Stock-based compensation
-
-
-
-
1,574
1,574
Acquisition costs
11,967
-
11,967
4,560
-
16,527
Environmental clean-up reserve
1,428
-
1,428
-
-
1,428
Other
13,282
-
13,282
(13,222
)
220
280
Adjusted EBITDA
$
137,465
$
(3,013
)
$
134,452
$
27,074
$
(540
)
$
160,986
Unaudited Reconciliation of Long-Term Debt to Net Long-Term Debt
and Net Leverage.
In thousands
As of
December 31, 2023
December 31, 2022
Long-Term Debt: Senior Convertible Note
$
15,230
$
95,178
Term Loan 2025
195,950
165,000
Finance lease liability long-term
66,206
45,164
Finance lease liability short-term
2,435
1,363
Insurance premiums financed
6,237
5,661
Long-Term Debt and Lease Obligations
$
286,058
$
312,366
Unamortized discount and deferred financing costs
(30,354
)
(81,918
)
Long-Term Debt and Lease Obligations per Balance Sheet
$
255,704
$
230,448
Cash and Cash Equivalents
(76,967
)
(141,258
)
Restricted Cash
(3,606
)
(4,929
)
Total Cash and Cash Equivalents
$
(80,573
)
$
(146,187
)
Net Long-Term Debt
$
205,485
$
166,179
Adjusted EBITDA
$
17,130
$
160,985
Net Leverage
12.0x
1.0x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228792460/en/
IR@vertexenergy.com 203-682-8284
Vertex Energy (NASDAQ:VTNR)
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