08 Nov 2019, 21:01 GMT+10
HOUSTON, TX / ACCESSWIRE / November 8, 2019 / Vertex Energy, Inc. (NASDAQ:VTNR) ('Vertex' or the 'Company'), a leading specialty refiner and marketer of high-quality hydrocarbon products, today announced financial results for the third quarter 2019.
For the three months ended September 30, 2019, the Company reported revenue of $37.8 million, versus $50.6 million in the prior-year period. Vertex reported an operating loss of ($2.5) million in the third quarter of 2019, versus $0.6 million of operating income in the prior-year period. The Company reported a net loss available to common shareholders of ($3.9) million, or ($0.09) per basic share, in the third quarter 2019, versus a net loss of ($4.6) million, or ($0.13) per basic share, in the third quarter 2018. Vertex reported Adjusted EBITDA of $1.8 million in the third quarter 2019, versus $3.2 million in the quarter 2018. A schedule reconciling the Company's GAAP and non-GAAP financial results (including Adjusted EBITDA) is included later in this release.
During the third quarter 2019, the Company benefited from strong growth in used motor oil (UMO) collections and widening product spreads on middle distillates ahead of the January 1, 2020 transition to low-sulfur marine fuels mandated by the International Maritime Organization (IMO). Despite favorable market conditions, Hurricane Barry extended the duration of a planned turnaround at the Marrero (Louisiana) refinery during July, resulting in an additional negative $1.5 million impact in the third quarter. The Company's Marrero and Heartland (Ohio) refineries are currently operating near peak nameplate capacity, given strong demand for the Company's specialty products.
Direct collections of UMO increased 24.5% in the third quarter of 2019, when compared to the prior-year's period. UMO collections represented approximately 48.6% of overall feedstock processed at the Company's refineries in the third quarter of 2019, versus 38.7% in the third quarter of 2018, with the remaining feedstock being sourced from third-party UMO suppliers.
'During the past four years, we have invested significant time and resources preparing Vertex to capitalize on the International Maritime Organization's low sulfur marine fuel mandate that comes into effect January 1, 2020,' stated Benjamin P. Cowart, President and CEO of Vertex. 'With the IMO transition now just weeks away, our facilities are now ready to execute on this opportunity. We have seen product spreads widen versus prior-year levels, supported by a decline in feedstock costs together with a corresponding increase in distillate values. Current market conditions are setting up favorably as we look ahead to the fourth quarter and into 2020.'
'Our Marrero and Heartland refineries operated near peak capacity since August,' continued Cowart. 'This month, we will recommence TCEP production at our Baytown facility as we seek to capitalize on improved demand for lower sulfur marine fuels, continued Cowart. 'Our TCEP technology converts feedstock into a low sulfur marine fuel that can be sold into the new 0.5% low sulfur marine fuel specification mandated under IMO 2020.'
As announced on July 31, 2019, Vertex has entered into a joint venture with Tensile Capital Management LLC, as referred to in previous public disclosures. Subject in part to a successful pilot program that is expected to reach completion by year-end 2019, Vertex will receive approximately $13.5 million of non-recourse funding that it intends to use for debt reduction, investment in organic UMO collections growth, and the targeted acquisition of third-party UMO collections operations.
Vertex operates a tank terminal facility in Baytown, TX where the Company collects and processes used motor oil into higher value feedstocks through its patented Thermal Chemical Extraction Process (TCEP) technology.
In the fourth quarter 2019, the Company expects to produce approximately 30,000 barrels of marine fuel using the TCEP technology, the first such production since the third quarter 2015. All required capital investments have been made in the facility, which is now prepared to commence operations.
For the fourth quarter 2019, the Company anticipates Adjusted EBITDA in the range of $2.5 million to $3.0 million. For the full-year 2020, the Company anticipates Adjusted EBITDA in the range of $15 million to $20 million. All guidance is current as of the time provided and is subject to change.
Conference Call and Webcast
A conference call will be held on November 8, 2019 at 9:00 AM ET to review the Company's financial results, discuss recent events and conduct a question-and-answer session. A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the Company's website at www.vertexenergy.com. To listen to a live broadcast, go to 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 Live: 844-369-8770
To listen to a replay of the teleconference, which will be available through December 8, 2019:
Domestic Replay: 877-481-4010
Conference ID: 54092
About Vertex Energy Inc.
Houston-based Vertex Energy, Inc. (NASDAQ:VTNR) is a specialty refiner of alternative feedstocks and marketer of high-purity petroleum products. Vertex is one of the largest processors of used motor oil in the U.S., with operations located in Houston and Port Arthur (TX), Marrero (LA) and Heartland (OH). Vertex also co-owns a facility, Myrtle Grove, located on a 41-acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydro-processing and plant infrastructure assets, that include nine million gallons of storage. The Company has built a reputation as a key supplier of Group II+ and Group III base oils to the lubricant manufacturing industry throughout North America.
Cautionary Statement Forward-Looking Statements
This press release may contain forward-looking statements, including information about management's view of Vertex Energy's future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the 'Act'). In particular, when used in the preceding discussion, the words 'believes,' 'hopes,' 'expects,' 'intends,' 'plans,' 'anticipates,' or 'may,' and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Vertex Energy, its divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents Vertex Energy files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Vertex Energy's future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex Energy cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex Energy undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex Energy.
Noel Ryan, IRC
Reconciliation of Net Loss attributable to Vertex Energy, Inc., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA*
|For the Three Months Ended||For the Trailing Twelve Months|
|September 30, 2019||September 30, 2018||September 30, 2019||September 30, 2018|
attributable to Vertex Energy, Inc.
Depreciation and amortization
Loss (gain) on change in value of derivative warrant liability
Unrealized (gain) loss on derivative instruments
Adjusted EBITDA *
* EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.
EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense and gain (loss) on change in value of derivative warrant liability and unrealized gains and losses on derivative instruments for hedging activities. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
|September 30, 2019||December 31,|
Cash and cash equivalents
Accounts receivable, net
Federal income tax receivable
Derivative commodity asset
Total current assets
Fixed assets, at cost
Less accumulated depreciation
Fixed assets, net
Finance lease right-of-use assets
Operating lease right-of use assets
Intangible assets, net
Federal income tax receivable
LIABILITIES, TEMPORARY EQUITY, AND EQUITY
Finance lease liability-current
Operating lease liability-current
Current portion of long-term debt, net of unamortized finance costs
Derivative commodity liability
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