- Published: 11 August 2015
- Written by Editor
Vertex Energy, Inc. Announces Second Quarter 2015 Financial Results
Revenue Down 31.7%, Gross Margins of 11% in Second Quarter 2015 --- Conference Call Tomorrow August 11, 2015 at 9:00 A.M. EDT
HOUSTON--- Vertex Energy, Inc. (NASDAQ:VTNR), an environmental services company that recycles industrial waste streams and off-specification commercial chemical products, announced today its financial results for the three and six months ended June 30, 2015. The Company will host a conference call tomorrow, August 11, 2015 at 9 am EDT.
FINANCIAL HIGHLIGHTS FOR THREE MONTHS ENDED JUNE 30, 2015
- Revenue for the second quarter of 2015 versus second quarter of 2014 was down 31.7% to $49.1 million, resulting in Net Loss of ($0.02) Per Share.
- EBITDA* of $1,673,094 for the three months ended June 30, 2015.
- Overall volumes of product sold, which illustrates our reach into the market, increased 19% for the second quarter of 2015 over second quarter of 2014.
- Street collections increased 36% year over year (for the second quarter of 2015 versus 2014).
- We acquired a strategic collection platform in Louisiana which we believe will lower feedstock costs at our Marrero, Louisiana plant.
- We raised $25 million in a private placement and paid down $15.1 million to our senior lender Goldman Sachs, bringing our outstanding debt to $24 million owed under this senior note, a reduction of 37.7%.
- Our Heartland business unit posted positive results with gross profit of $1.3 million.
FINANCIAL HIGHLIGHTS FOR SIX MONTHS ENDED JUNE 30, 2015
- Revenue for the six months ended June 30, 2015 was $86.9 million.
- Overall volumes of product sold rose 24% for the first six months of 2015 over the same period in 2014.
- Street collections increased 53% year over year for the first six months of 2015 over the same period in 2014.
- We signed a lease for use of the re-refinery plant located in Churchill County, Nevada.
Benjamin P. Cowart, Chairman and CEO of Vertex Energy said, “We are stronger today having weathered the storm brought on by the instability in the oil markets in previous quarters. We took some key steps that have helped us navigate through that adverse environment. Consequently, our operating business and financial performance have improved. Our financial performance surpassed a majority of our internal targets in the core business."
Mr. Cowart concluded, “We are encouraged by the significant progress in our business. Our street collections volume increased 53% year over year for the current quarter. We have reduced our adjusted pay for oil to less than zero with the implementation of our service fee model for the collections of used motor oil and environmental services. In addition, we have implemented a hedging program that we expect will reduce our inventory exposure to the volatility of oil prices. We remain cautious yet vigilant given the market uncertainties.”
Management of Vertex Energy will host a conference call tomorrow, August 11, 2015, at 9:00 a.m. EDT. Those who wish to participate in the conference call may telephone 877-869-3847 from the U.S. and International callers may telephone 201-689-8261, approximately 15 minutes before the call. A webcast will also be available under the Investor Relations section of our website at: www.vertexenergy.com.
A digital replay will be available by telephone approximately two hours after the completion of the call until September 11, 2015, and may be accessed by dialing 877-660-6853 from the U.S. or 201-612-7415 for international callers, and using the Conference ID #13614668.
ABOUT VERTEX ENERGY, INC.
Vertex Energy, Inc. (NASDAQ: VTNR) is a leading environmental services company that recycles industrial waste streams and off-specification commercial chemical products. Its primary focus is recycling used motor oil and other petroleum by-product streams. Vertex Energy purchases these streams from an established network of local and regional collectors and generators. Vertex Energy also manages the transport, storage and delivery of the aggregated feedstock and product streams to end users, and manages the re-refining of a portion of its aggregated petroleum streams in order to sell them as higher-value end products. Vertex Energy sells its aggregated petroleum streams as feedstock to other re-refineries and fuel blenders or as replacement fuel for use in industrial burners. The re-refining of used motor oil that Vertex Energy manages takes place at its facility, which uses a proprietary Thermal Chemical Extraction Process (“TCEP”) technology. Based in Houston, Texas, Vertex Energy also has offices in California, Chicago, Georgia, Nevada, and Ohio. More information on Vertex Energy can be found at www.vertexenergy.com.
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," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Vertex Energy, its divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents Vertex Energy files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Vertex Energy's future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex Energy cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex Energy undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex Energy.
| VERTEX ENERGY, INC. | ||||||||||
|
RECONCILIATION OF NET INCOME (LOSS) TO EARNINGS BEFORE INTEREST TAXES |
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DEPRECIATION AND AMORTIZATION (EBITDA)* |
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| For the Three Months Ended | ||||||||||
| June 30, 2015 | June 30, 2014 | |||||||||
| Net (loss) income | $ | (445,195 | ) | $ | 7,001,082 | |||||
| Add (deduct): | ||||||||||
| Interest Expense | 556,975 | 657,235 | ||||||||
| Depreciation and amortization | 1,561,314 | 1,068,273 | ||||||||
| EBITDA* | $ | 1,673,094 | $ | 8,726,590 | ||||||
* EBITDA is a non-GAAP financial measure. This measurement is 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. EBITDA is presented because we believe it provides additional useful information to investors due to the various non-cash items during the period. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
- EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
- EBITDA does not reflect changes in, or cash requirements for, working capital needs;
- EBITDA does 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 non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
- Other companies in this industry may calculate EBITDA differently than Vertex Energy does, limiting its usefulness as a comparative measure.
| VERTEX ENERGY, INC. | |||||||||||
|
CONSOLIDATED BALANCE SHEETS
(Unaudited) |
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|
June 30, |
December 31, 2014 |
||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 5,717,543 | $ | 6,017,076 | |||||||
| Accounts receivable, net | 13,033,513 | 9,936,948 | |||||||||
| Current portion of notes receivable | 1,000,000 | 3,150,000 | |||||||||
| Inventory | 9,088,290 | 12,620,616 | |||||||||
| Prepaid expenses | 2,803,310 | 1,245,307 | |||||||||
| Costs in excess of billings | — | 779,285 | |||||||||
| Total current assets | 31,642,656 | 33,749,232 | |||||||||
| Noncurrent assets | |||||||||||
| Fixed assets, at cost | 61,032,202 | 59,919,721 | |||||||||
| Less accumulated depreciation | (5,739,802 | ) | (3,758,373 | ) | |||||||
| Net fixed assets | 55,292,400 | 56,161,348 | |||||||||
| Notes receivable | 8,308,000 | 8,308,000 | |||||||||
| Intangible assets, net | 17,640,950 | 18,512,960 | |||||||||
| Goodwill | 4,922,353 | 4,922,353 | |||||||||
| Deferred financing cost. net | 1,942,880 | 2,191,888 | |||||||||
| Deferred federal income tax | — | 9,495,000 | |||||||||
| Other assets | 481,450 | 481,450 | |||||||||
| Total noncurrent assets | 88,588,033 | 100,072,999 | |||||||||
| TOTAL ASSETS | $ | 120,230,689 | $ | 133,822,231 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued expenses | $ | 21,143,784 | $ | 21,984,136 | |||||||
| Capital leases | 408,145 | 492,755 | |||||||||
| Current portion of long-term debt | 4,387,831 | 40,136,584 | |||||||||
| Revolving note | 1,815,795 | — | |||||||||
| Deferred revenue | 524,923 | 463,210 | |||||||||
| Total current liabilities | 28,280,478 | 63,076,685 | |||||||||
| Long-term liabilities | |||||||||||
| Long-term debt | 22,555,893 | 1,867,574 | |||||||||
| Derivative liability | 5,211,085 | — | |||||||||
| Contingent consideration | 6,069,000 | 6,069,000 | |||||||||
| Deferred federal income tax | — | 4,189,000 | |||||||||
| Total liabilities | 62,116,456 | 75,202,259 | |||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
| Series B Preferred shares, $.001 par value per share: | |||||||||||
|
10,000,000 shares authorized, 8,064,534 and 0 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively with liquidation preference of $25,025,000 at June 30, 2015 |
10,791,675 |
— |
|||||||||
| EQUITY | |||||||||||
| Preferred stock, $0.001 par value per share: | |||||||||||
| 50,000,000 shares authorized | |||||||||||
|
Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 612,943 and 630,419 issued and outstanding at June 30, 2015 and December 31, 2014, respectively |
613 |
630 |
|||||||||
|
Common stock, $0.001 par value per share; |
|||||||||||
|
750,000,000 shares authorized; 28,181,761 and 28,108,105 issued and outstanding at June 30, 2015 and December 31, 2014, respectively |
28,182 |
28,109 |
|||||||||
| Additional paid-in capital | 52,709,652 | 46,595,472 | |||||||||
| Retained earnings (accumulated deficit) | (5,415,889 | ) | 11,995,761 | ||||||||
| Total Equity | $ | 47,322,558 | $ | 58,619,972 | |||||||
| TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND EQUITY | $ | 120,230,689 | $ | 133,822,231 | |||||||
| VERTEX ENERGY, INC. | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| THREE AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014 | |||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Revenues | $ | 49,119,711 | $ | 72,079,622 | $ | 86,804,050 | $ | 119,429,280 | |||||||||||||
| Cost of revenues | 43,635,177 | 63,844,569 | 81,643,633 | 106,188,202 | |||||||||||||||||
| Gross profit | 5,484,534 | 8,235,053 | 5,160,417 | 13,241,078 | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||
|
Selling, general and administrative expenses
(exclusive of acquisition related expenses) |
5,641,250 | 4,363,617 | 11,011,278 | 7,079,966 | |||||||||||||||||
| Depreciation and amortization expense | 1,561,314 | 1,068,273 | 3,118,296 | 1,800,950 | |||||||||||||||||
| Acquisition related expenses | — | 1,959,418 | 157,678 | 2,559,830 | |||||||||||||||||
| Total operating expenses | 7,202,564 | 7,391,308 | 14,287,252 | 11,440,746 | |||||||||||||||||
| Income (loss) from operations | (1,718,030 | ) | 843,745 | (9,126,835 | ) | 1,800,332 | |||||||||||||||
| Other income (expense): | |||||||||||||||||||||
| Provision for doubtful accounts | — | — | (2,650,000 | ) | — | ||||||||||||||||
| Other income | 10 | 7 | 18 | 377 | |||||||||||||||||
| Gain on bargain purchase | — | 6,481,051 | — | 6,481,051 | |||||||||||||||||
| Other income (expense) | 12,818 | (10,866 | ) | (57,660 | ) | (10,866 | ) | ||||||||||||||
| Gain on change in value of derivative liability | 1,816,982 | — | 1,816,982 | — | |||||||||||||||||
| Interest expense | (556,975 | ) | (657,235 | ) | (2,088,155 | ) | (733,046 | ) | |||||||||||||
| Total other income (expense) | 1,272,835 | 5,812,957 | (2,978,815 | ) | 5,737,516 | ||||||||||||||||
| Income (loss) before income tax | (445,195 | ) | 6,656,702 | (12,105,650 | ) | 7,537,848 | |||||||||||||||
| Income tax benefit (expense) | — | — | (5,306,000 | ) | — | ||||||||||||||||
| Net income (loss) | $ | (445,195 | ) | $ | 6,656,702 | $ | (17,411,650 | ) | $ | 7,537,848 | |||||||||||
| Net income (loss) attributable to non-controlling interest | $ | — | $ | 344,380 | $ | — | $ | 325,399 | |||||||||||||
| Net income (loss) attributable to Vertex Energy, Inc. | $ | (445,195 | ) | $ | 7,001,082 | $ | (17,411,650 | ) | $ | 7,863,247 | |||||||||||
| Earnings (loss) per common share | |||||||||||||||||||||
| Basic | $ | (0.02 | ) | $ | 0.31 | $ | (0.62 | ) | $ | 0.36 | |||||||||||
| Diluted | $ | (0.02 | ) | $ | 0.28 | $ | (0.62 | ) | $ | 0.33 | |||||||||||
| Shares used in computing earnings per share | |||||||||||||||||||||
| Basic | 28,130,575 | 22,826,102 | 28,124,492 | 22,025,316 | |||||||||||||||||
| Diluted | 28,130,575 | 24,847,456 | 28,124,492 | 23,879,500 | |||||||||||||||||
| VERTEX ENERGY, INC. | ||||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF EQUITY | ||||||||||||||||||||||||||||||||||
| FOR THE SIX MONTHS ENDED JUNE 30, 2015 | ||||||||||||||||||||||||||||||||||
|
Common |
Common |
Series A |
Series A |
Additional |
Retained |
Total Equity | ||||||||||||||||||||||||||||
| Balance on January 1, 2015 | 28,108,105 | $ | 28,109 | 630,419 | $ | 630 | 46,595,472 | $ | 11,995,761 | $ | 58,619,972 | |||||||||||||||||||||||
| Share based compensation expense, total | — | — | — | — | 176,426 | — | 176,426 | |||||||||||||||||||||||||||
| Issuance of restricted common stock | 56,180 | 56 | — | — | 199,944 | — | 200,000 | |||||||||||||||||||||||||||
| Conversion of preferred A stock to common | 17,476 | 17 | (17,476 | ) | (17 | ) | — | — | — | |||||||||||||||||||||||||
| Beneficial conversion feature on Preferred stock (APIC) | — | — | — | — | 5,737,810 | — | 5,737,810 | |||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | (17,411,650 | ) | (17,411,650 | ) | |||||||||||||||||||||||||
| Balance on June 30, 2015 | 28,181,761 | $ | 28,182 | 612,943 | $ | 613 | $ | 52,709,652 | $ | (5,415,889 | ) | $ | 47,322,558 | |||||||||||||||||||||
| VERTEX ENERGY, INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| SIX MONTHS ENDED JUNE 30, 2015 AND 2014 | |||||||||||
| (UNAUDITED) | |||||||||||
| Six Months Ended | |||||||||||
|
June 30, |
June 30, |
||||||||||
| Cash flows from operating activities | |||||||||||
| Net income (loss) | $ | (17,411,650 | ) | $ | 7,537,848 | ||||||
|
Adjustments to reconcile net income to cash
provided by (used in) operating activities |
|||||||||||
| Stock based compensation expense | 176,426 | 101,378 | |||||||||
| Depreciation and amortization | 3,118,296 | 1,800,950 | |||||||||
| Gain on acquisition | — | (6,481,051 | ) | ||||||||
| Loss on asset sale | 63,410 | — | |||||||||
| Gain on change in fair value of derivative liability | (1,816,982 | ) | — | ||||||||
| Deferred federal income tax | 5,306,000 | — | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Accounts receivable | (3,096,566 | ) | (2,237,992 | ) | |||||||
| Accounts receivable - other | — | 950,000 | |||||||||
| Allowance for doubtful accounts | 2,650,000 | — | |||||||||
| Notes receivable-related party | — | (1,027,321 | ) | ||||||||
| Inventory | 3,532,326 | (3,679,989 | ) | ||||||||
| Prepaid expenses | (327,343 | ) | (2,717,571 | ) | |||||||
| Costs in excess of billings | 779,285 | — | |||||||||
| Accounts payable | (640,352 | ) | 9,464,956 | ||||||||
| Deferred revenue | 61,713 | — | |||||||||
| Other assets | — | (79,806 | ) | ||||||||
| Net cash provided by (used in) operating activities | (7,605,437 | ) | 3,631,402 | ||||||||
| Cash flows from investing activities | |||||||||||
| Acquisition of Omega | — | (28,764,099 | ) | ||||||||
| Purchase of fixed assets | (1,196,240 | ) | (2,635,882 | ) | |||||||
| Proceeds from asset sales | 4,500 | — | |||||||||
| Notes receivable | (500,000 | ) | — | ||||||||
| Net cash used in investing activities | (1,691,740 | ) | (31,399,981 | ) | |||||||
| Cash flows from financing activities | |||||||||||
| Line of credit payments, net | — | 304,000 | |||||||||
| Proceeds from sale of stock | 23,557,552 | 15,803,000 | |||||||||
| Payments on notes payable | (16,375,703 | ) | (9,634,029 | ) | |||||||
| Proceeds from note payable | — | 40,509,906 | |||||||||
| Proceeds from revolving note | 1,815,795 | — | |||||||||
| Debt issue cost | — | (2,452,157 | ) | ||||||||
| Proceeds from exercise of common stock options and warrants | — | 211,062 | |||||||||
| Net cash provided by (used in) financing activities | 8,997,644 | 44,741,782 | |||||||||
| Net change in cash and cash equivalents | (299,533 | ) | 16,973,203 | ||||||||
| Cash and cash equivalents at beginning of the period | 6,017,076 | 2,678,628 | |||||||||
| Cash and cash equivalents at end of period | $ | 5,717,543 | $ | 19,651,831 | |||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| Cash paid for interest | $ | 2,071,299 | $ | 733,046 | |||||||
| Cash paid for income taxes | $ | — | $ | — | |||||||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS | |||||||||||
| Conversion of Series A Preferred Stock into common stock | $ | 17 | $ | 644 | |||||||
| Note payable for acquisition of E-Source interest | $ | — | $ | 854,050 | |||||||
| Additional paid in capital for acquisition of E-Source interest | $ | — | $ | 231,260 | |||||||
| Shares issued as payment | $ | 200,000 | $ | — | |||||||
| Beneficial conversion feature for Series B Preferred stock | $ | 5,725,819 | $ | — | |||||||
| Fair value of warrants issued with series B Preferred stock | $ | 7,028,067 | $ | — | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150810006409/en/
Contact:
Investor Relations Contact
Marlon Nurse, DM, 212-564-4700
Senior VP – Investor Relations
