Vertex Energy, Inc. Announces Increased Revenues and Volumes Sold in Fourth Quarter and Full Year 2014
Revenue up 34% in Fourth Quarter, Up 60% Year over Year
Volumes Sold up 82% in Fourth Quarter, 65% Year over Year
Conference Call Today April 1, 2015 at 9:00 A.M. EDT
HOUSTON--(BUSINESS WIRE)-- 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 twelve months ended December 31, 2014. The Company will host a conference call today April 1, 2015 at 9 am EDT.
FINANCIAL HIGHLIGHTS FOR FOURTH QUARTER OF 2014
- Revenue for the fourth quarter of 2014 vs fourth quarter of 2013 was up 34% to $62.5 million
- Overall volumes of product sold, an important metric for our business because it illustrates our reach into the market, increased 82% for the fourth quarter of 2014 versus 2013
FINANCIAL HIGHLIGHTS FOR FULL YEAR 2014
- Revenue for 2014 vs 2013 was up 60% to $259 million compared to $162 million in 2013
- Overall volumes of product sold rose 65% for 2014
- Pay-for-oil on the street collection level was down 75% year over year and by 90% from January 2014 to January 2015
- Pay-for-oil to third-parties declined 50% year over year
Benjamin P. Cowart, Chairman and CEO of Vertex Energy said, “Like the rest of the industry, our fourth quarter performance was affected in large part by the sudden and steep decline in oil prices. However, our ability to adjust the spread has helped and will continue to move the Company in the right direction. We have begun moving to a service fee model for collection of used motor oil and environmental services. Removing used oil is a value-add that our industry provides in handling this regulated waste stream, and as of January, we are charging for these services.”
Mr. Cowart continued, “We have improved inventory management to alleviate our exposure to precipitous declines in our prices. We completed our acquisition of all the assets of Heartland Group Holdings, LLC, in the fourth quarter 2014, after entering into a consulting agreement in the third quarter 2014. The acquisition includes a 16 million gallon per year refinery and a well-established 6.8 million gallon collection operation in a four-state region. We anticipate that the Heartland assets will make a solid contribution in 2015.”
Mr. Cowart concluded, “As we look at the year ahead, we believe the Company will return to profitability. This year started slow as the first quarter saw another sharp decline in oil prices in January. Our inventory carry is impacted when oil prices take a sharp turn. However, we have taken steps to protect against renewed downside risk in oil prices. Furthermore, we are reaping the benefits of the improved pricing on our raw materials. Prior to this most recent decline in oil prices, we had a clear target on profitability. Going into the second quarter of 2015, our spreads are set now for these low levels and should remain and improve as oil prices stabilize and increase.”
Complete information regarding Vertex’s results of operations for the fourth quarter of 2014 and 2014 fiscal year, our plan of operations, discussion of operating results, risk factors regarding an investment in Vertex and other matters can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 31, 2015, which can be viewed at www.sec.gov.
Management of Vertex will host a conference call today, April 1, 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 at: www.vertexenergy.com.
A digital replay will be available by telephone approximately two hours after the completion of the call until April 30, 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 #13602582.
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 purchases these streams from an established network of local and regional collectors and generators. Vertex 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 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 manages takes place at its facility, which uses a proprietary Thermal Chemical Extraction Process (“TCEP”) technology. Vertex collects oil through its H&H Oil in the Texas region and Heartland Petroleum in a four-state region. Based in Houston, Texas, Vertex also has offices in California, Chicago, Illinois, Columbus, Ohio and Georgia. More information on Vertex 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. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 6,017,076 | $ | 2,678,628 | ||||
| Accounts receivable, net | 9,936,948 | 11,714,813 | ||||||
| Accounts receivable, net - related party (Note 10) | 3,150,000 | — | ||||||
| Inventory | 12,620,616 | 8,540,459 | ||||||
| Prepaid expenses | 1,245,307 | 1,161,721 | ||||||
| Costs in excess of billings on uncompleted contracts | 779,285 | — | ||||||
|
Total current assets |
33,749,232 | 24,095,621 | ||||||
| Non-current assets | ||||||||
| Fixed assets | 59,919,721 | 16,444,346 | ||||||
| Less accumulated depreciation | (3,758,373 | ) | (1,353,170 | ) | ||||
| Net fixed assets | 56,161,348 | 15,091,176 | ||||||
| Notes receivable - related party (Note 11) | 8,308,000 | — | ||||||
| Intangible assets, net | 18,512,960 | 15,098,545 | ||||||
| Goodwill | 4,922,353 | 4,502,743 | ||||||
| Deferred financing cost, net | 2,191,888 | 74,271 | ||||||
| Deferred tax assets | 9,495,000 | 5,684,000 | ||||||
| Other assets | 481,450 | — | ||||||
| Total non-current assets | 100,072,999 | 40,450,735 | ||||||
| TOTAL ASSETS | $ | 133,822,231 | $ | 64,546,356 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 21,984,136 | $ | 14,096,185 | ||||
| Capital leases | 492,755 | — | ||||||
| Current portion of long-term debt | 40,136,584 | 1,956,847 | ||||||
| Deferred revenue | 463,210 | — | ||||||
| Total current liabilities | 63,076,685 | 16,053,032 | ||||||
| Long-term liabilities | ||||||||
| Long-term debt | 1,867,574 | 6,558,851 | ||||||
| Contingent consideration | 6,069,000 | 3,220,250 | ||||||
| Deferred tax liabilities | 4,189,000 | 378,000 | ||||||
| Total liabilities | 75,202,259 | 26,210,133 | ||||||
| Commitments and contingencies | ||||||||
| 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 shares authorized and 630,419 and 1,319,002 shares issued and outstanding at December 31, 2014 and 2013, respectively |
630 | 1,319 | ||||||
| Common stock, $0.001 par value per share; | ||||||||
|
750,000,000 shares authorized; 28,108,105 and 21,205,609 issued and outstanding at December 31, 2014 and December 31, 2013, respectively |
28,109 | 21,206 | ||||||
| Additional paid-in capital | 46,595,472 | 19,579,732 | ||||||
| Retained earnings | 11,995,761 | 17,542,004 | ||||||
| Total Vertex Energy, Inc. stockholders' equity | 58,619,972 | 37,144,261 | ||||||
| Non-controlling interest | — | 1,191,962 | ||||||
| Total equity | 58,619,972 | 38,336,223 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 133,822,231 | $ | 64,546,356 | ||||
| VERTEX ENERGY, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| Revenues | $ | 258,904,867 | $ | 161,967,252 | $ | 134,573,243 | ||||||
| Cost of revenues | 244,292,715 | 145,628,215 | 124,788,116 | |||||||||
| Gross profit | 14,612,152 | 16,339,037 | 9,785,127 | |||||||||
| Reduction of contingent liability | (5,248,588 | ) | (2,238,750 | ) | — | |||||||
| Selling, general and administrative expenses | 26,073,782 | 11,472,842 | 6,137,301 | |||||||||
| Acquisition related expenses | 3,813,668 | 53,742 | 1,256,576 | |||||||||
| Inventory impairment charge | 467,911 | — | — | |||||||||
| Total selling, general and administrative expenses | 25,106,773 | 9,287,834 | 7,393,877 | |||||||||
| Income (loss) from operations | (10,494,621 | ) | 7,051,203 | 2,391,250 | ||||||||
| Other income (expense) | ||||||||||||
| Other income | 333,612 | 37,696 | 1,740 | |||||||||
| Gain on bargain purchase | 6,948,686 | — | — | |||||||||
| Other expense | (10,866 | ) | (54,513 | ) | — | |||||||
| Interest expense | (2,636,690 | ) | (422,954 | ) | (135,364 | ) | ||||||
| Total other income (expense) | 4,634,742 | (439,771 | ) | (133,624 | ) | |||||||
| Income (loss) before income taxes | (5,859,879 | ) | 6,611,432 | 2,257,626 | ||||||||
| Income tax benefit (expense) | (11,763 | ) | 1,700,000 | 1,400,641 | ||||||||
| Net income (loss) | (5,871,642 | ) | 8,311,432 | 3,658,267 | ||||||||
| Net income (loss) attributable to non-controlling interest | 325,399 | (431,962 | ) | — | ||||||||
| Net income (loss) attributable to Vertex Energy, Inc. | $ | (5,546,243 | ) | $ | 7,879,470 | $ | 3,658,267 | |||||
| Earnings per common share | ||||||||||||
| Basic | $ | (0.23 | ) | $ | 0.44 | $ | 0.30 | |||||
| Diluted | $ | (0.23 | ) | $ | 0.39 | $ | 0.25 | |||||
| Shares used in computing earnings per share | ||||||||||||
| Basic | 23,807,780 | 17,830,194 | 12,138,229 | |||||||||
| Diluted | 23,807,780 | 20,182,829 | 14,866,134 | |||||||||
| VERTEX ENERGY, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012 | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income (loss) | $ | (5,871,642 | ) | $ | 8,311,432 | $ | 3,658,267 | |||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||||||
| Stock-based compensation expense | 332,266 | 175,152 | 178,968 | |||||||||
| Depreciation and amortization | 4,277,843 | 2,320,735 | 711,555 | |||||||||
| Bargain purchase gain | (6,948,686 | ) | — | — | ||||||||
| Deferred federal income tax | — | (1,944,000 | ) | (1,432,000 | ) | |||||||
| Inventory impairment charge | 467,911 | — | — | |||||||||
| Reduction of contingent consideration | (5,248,588 | ) | (2,238,750 | ) | — | |||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 714,698 | (3,468,033 | ) | 128,184 | ||||||||
| Accounts receivable- related parties | — | — | 2,459 | |||||||||
| Bad debt expense | 2,013,167 | — | — | |||||||||
| Inventory | 1,891,932 | (2,670,338 | ) | 551,438 | ||||||||
| Prepaid expenses | (12,586 | ) | (571,254 | ) | (247,337 | ) | ||||||
| Costs in excess of billings | (779,285 | ) | — | — | ||||||||
| Accounts payable and accrued expenses | 7,255,722 | 4,220,957 | 304,861 | |||||||||
| Deferred revenue | 463,210 | — | — | |||||||||
| Accounts payable-related parties | — | — | (620,724 | ) | ||||||||
| Other deposits | (81,450 | ) | 256,729 | (235,557 | ) | |||||||
| Net cash provided by (used in) operating activities | (1,525,488 | ) | 4,392,630 | 3,000,114 | ||||||||
| Cash flows from investing activities | ||||||||||||
| Bango note receivable | (3,150,000 | ) | — | — | ||||||||
| Refund of asset acquisition | — | 675,558 | — | |||||||||
| Acquisition, net | (31,114,140 | ) | (539,325 | ) | (2,013,450 | ) | ||||||
| Purchase of fixed assets | (5,940,890 | ) | (2,603,369 | ) | (1,134,575 | ) | ||||||
| Net cash used in investing activities | (40,205,030 | ) | (2,467,136 | ) | (3,148,025 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Line of credit (payments) proceeds, net | — | (6,750,000 | ) | 750,000 | ||||||||
| Proceeds from exercise of common stock options and warrants | 370,337 | 60,936 | 112,625 | |||||||||
| Proceeds from primary stock offering | 17,315,143 | 8,628,346 | — | |||||||||
| Payments on contingent consideration | (136,662 | ) | — | — | ||||||||
| Proceeds from notes payable | 41,309,433 | — | — | |||||||||
| Payments made on notes payable | (11,337,128 | ) | (1,994,088 | ) | (581,962 | ) | ||||||
| Debt issuance cost | (2,452,157 | ) | — | — | ||||||||
| Net cash provided by (used in) financing activities | 45,068,966 | (54,806 | ) | 280,663 | ||||||||
| Net change in cash and cash equivalents | 3,338,448 | 1,870,688 | 132,752 | |||||||||
| Cash and cash equivalents at beginning of the period | 2,678,628 | 807,940 | 675,188 | |||||||||
| Cash and cash equivalents at end of period | $ | 6,017,076 | $ | 2,678,628 | $ | 807,940 | ||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| Cash paid for interest during the year | $ | 2,636,690 | $ | 396,440 | $ | 128,838 | ||||||
| Cash paid for income taxes during the year | $ | 122,763 | $ | 136,334 | $ | 23,359 | ||||||
| NON-CASH TRANSACTIONS | ||||||||||||
| Conversion of Series A Preferred Stock into common stock | $ | 689 | $ | 194 | $ | 2,914 | ||||||
| Issued 2,701,601 shares of stock to purchase Heartland and Omega | $ | 9,004,000 | $ | — | $ | — | ||||||
Porter, LeVay & Rose, Inc.
Marlon Nurse, DM, 212-564-4700
SVP
– Investor Relations
Source: Vertex Energy, Inc.