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Vertex Energy Announces Second Quarter 2024 Results

Vertex Energy, Inc. (NASDAQ:VTNR) ("Vertex" or the "Company"), a leading specialty refiner and marketer of high-quality refined products and renewable fuels, today announced its operational and financial results for the second quarter of 2024. The Company also updated its progress in the optimization of its hydrocracking capacity between conventional production and renewables production.

The Company will host a conference call to discuss second quarter 2024 results today, at 9:00 A.M. Eastern Time. Details regarding the conference call are included at the end of this release.

Highlights for the second quarter of 2024 and through the date of this press release include:

  • Secured new $15 million and $20 million loans, as previously disclosed, enhancing the Company’s liquidity;
  • Modified certain terms and conditions of the current term loan agreement and appointed Seth Bullock as Chief Restructuring Officer;
  • Continued safe operation of the Company’s Mobile, Alabama refinery (the “Mobile Refinery”) with second quarter 2024 conventional throughput of 67,758 barrels per day (bpd);
  • Reported net loss attributable to the Company of ($53.8) million, or ($0.58) per fully-diluted share;
  • Recorded Adjusted EBITDA of ($22.4) million driven by a 28% decrease in crack spreads compared to the first quarter of 2024;
  • Decreased selling, general and administrative expense by 6% compared to the first quarter of 2024 and by 12% compared to the second quarter of 2023; and
  • Completed running all renewable feedstock and began optimizing the Mobile Refinery hydrocracker capacity from renewable diesel to conventional fuels with expected contribution in Q4 2024.

Note: 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).

Mr. Benjamin P. Cowart, Vertex’s Chief Executive Officer, stated, “We continued to demonstrate operational reliability for conventional refining and overall continued strong performance in safety. We saw a difficult crack spread environment driven by a weakening in gasoline and diesel demand in the second quarter that drove our Adjusted EBITDA lower. Consistent with the previously announced pause and pivot strategy, Vertex successfully processed the remaining inventories of renewable feedstock and safely decommissioned the hydrotreater out of renewable service. The Company also continued to manage expenses, seeing moderate reductions in capital and fixed costs across the business.”

“Given continued near-term EBITDA and liquidity constraints, the Company continues its pursuit of strategic pathways, considering alternatives and exploring financing pathways to maximize value. This includes working with our lenders to secure additional $15 and $20 million loans in June and July, as well as naming Seth Bullock as our Chief Restructuring Officer. Seth has significant experience in the industry and understands Vertex’s operational and financial capabilities very well. Seth is being brought in to assist Vertex in managing through a difficult macro-economic environment and providing additional expertise in liquidity management and performance improvement. We believe that continued support from our lenders is key to executing our strategic priorities which are focused on managing our liquidity position, reducing our operating costs, and improving margins.”

Mr. Cowart concluded, “We are focused on navigating through the recent lower crack spreads and continue to believe that the decision and execution to convert the hydrocracking unit to conventional fuels will help us toward accomplishing our strategic priorities for the second half of 2024 and into 2025.”

MOBILE REFINERY OPERATIONS

Total conventional throughput at the Mobile Refinery was 67,758 bpd in the second quarter of 2024. Total production of finished high-value, light products, such as gasoline, diesel, and jet fuel, represented approximately 64% of total production in the second quarter of 2024, flat with the first quarter of 2024, and in line with management’s original expectations, reflecting a continued solid yield at the Mobile conventional refining facility.

The Mobile Refinery’s conventional operations generated a gross profit of $6.4 million and $35.0 million of fuel gross margin (a key performance indicator (KPI) discussed below) or $5.67 per barrel during the second quarter of 2024, versus generating a gross profit of $37.5 million, and fuel gross margin of $73.6 million, or $12.63 per barrel in the first quarter of 2024. The decline in profit and margin was driven by a 28% decrease in crack spreads compared to the first quarter of 2024.

Total renewable throughput at the Mobile Renewable Diesel facility was 3,092 bpd in the second quarter of 2024. Total production of renewable diesel was 3,082 bpd reflecting a product yield of 99.7%.

The Mobile Renewable Diesel facility operations generated a gross loss of $(11.8) million and $4.5 million of fuel gross margin (a KPI discussed below) or $16.08 per barrel during the second quarter of 2024.

Renewable Business Pause and Pivot

As previously announced, Vertex is pausing renewable fuels production and redirecting the hydrocracking unit to conventional fuels and products. The Company had a previously planned catalyst and maintenance turnaround scheduled for 2024. It will use that planned turnaround to load conventional catalyst and bring the unit out of turnaround in conventional service. In addition, the total cost of about $10 million was previously budgeted as part of the planned catalyst and maintenance turnaround and does not represent a material change to our forecasted capital spend.

The Company has ceased renewable production and is on-schedule for the conversion of its Hydrocracker back to conventional service. This focus on the conventional business seeks to capture available margins in a more established market with an on-stream target of the fourth quarter of 2024.

Second Quarter 2024 Mobile Refinery Results Summary ($/millions unless otherwise noted)

Conventional Fuels Refinery

1Q24

2Q24

2024 YTD

 

 

 

 

Total Throughput (bpd)

64,065

67,758

65,911

Total Throughput (MMbbl)

5.83

6.17

12.00

Conventional Facility Capacity Utilization1 (%)

85.4%

90.3%

87.88%

 

 

 

 

Direct Opex Per Barrel ($/bbl)

$2.75

$2.59

$2.67

Fuel Gross Margin ($/MM)

$73.6

$35.0

$108.60

Fuel Gross Margin Per Barrel ($/bbl)

$12.63

$5.67

$9.06

 

 

 

 

Production Yield

 

 

 

Gasoline (bpd)

14,678

15,642

15,160

% Production

22.9%

22.6%

22.7%

ULSD (bpd)

13,441

14,174

13,808

% Production

21.0%

20.4%

20.7%

Jet (bpd)

12,595

14,848

13,722

% Production

19.6%

21.4%

20.6%

Total Finished Fuel Products (bpd)

40,714

44,664

42,690

% Production

63.5%

64.4%

64.0%

Other2 (bpd)

23,428

24,683

24,056

% Production

36.5%

35.6%

36.0%

Total Production (bpd)

64,142

69,347

66,746

Total Production (MMbbl)

5.84

6.31

12.15

 

 

 

Renewable Fuels Refinery

1Q24

2Q24

2024 YTD

 

 

 

 

Total Renewable Throughput (bpd)

4,090

3,092

3,591

Total Renewable Throughput (MMbbl)

0.37

0.28

0.65

Renewable Diesel Facility Capacity Utilization3 (%)

51.1%

38.7%

44.9%

 

 

 

 

Direct Opex Per Barrel ($/bbl)

$25.20

$31.75

$28.03

Renewable Fuel Gross Margin

$3.8

$4.5

$8.4

Renewable Fuel Gross Margin Per Barrel ($/bbl)

$10.29

16.08

$12.78

 

 

 

 

Renewable Diesel Production (bpd)

4,003

3,082

3,543

Renewable Diesel Production (MMbbl)

0.36

0.28

0.64

Renewable Diesel Production Yield (%)

97.9%

99.7%

98.7%

 

1) Assumes 75,000 barrels per day of conventional operational capacity 2) Other includes naphtha, intermediates, and LNG 3) Assumes 8,000 barrels per day of renewable fuels operational capacity

Second Quarter 2024 Financial Update

Vertex reported second quarter 2024 net loss attributable to the Company of ($53.8) million, or ($0.58) per fully-diluted share, versus net loss attributable to the Company of ($17.7) million, or ($0.19) per fully-diluted share for the first quarter of 2024. Adjusted EBITDA was $(22.4) million for the second quarter of 2024, compared to Adjusted EBITDA of $18.6 million in the first quarter of 2024. The reduction in quarter-over-quarter results was primarily driven by decreased crack spread pricing across all products.

Balance Sheet and Liquidity Update

As of June 30, 2024, Vertex had total debt outstanding of $303.8 million, including $15.2 million in 6.25% Senior Convertible Notes, $207.2 million outstanding on the Company’s Term Loan, finance lease obligations of $67.5 million, and $13.9 million in other obligations. The Company had total cash and cash equivalents of $18.9 million, including $0.1 million of restricted cash on the balance sheet as of June 30, 2024, for a net debt position of $284.9 million.

As previously disclosed, on July 24, 2024 the Company reached an agreement with its senior lenders to modify certain terms and conditions of the current term loan agreement and agreed to provide a term loan in the amount of $20 million. The new term loan provided an incremental $20.0 million in borrowings.

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. Additionally, the Company continues to evaluate strategic financial opportunities seeking further enhancements to its current liquidity position.

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

3Q 2024

Operational:

Low

 

High

Mobile Refinery Conventional Throughput Volume (Mbpd)

55.0

 

60.0

Capacity Utilization

73%

 

80%

Production Yield Profile:

 

 

 

Percentage Finished Products1

64%

 

68%

Intermediate & Other Products2

36%

 

32%

 

 

 

 

Financial Guidance:

Low

 

High

Direct Operating Expense ($/bbl)

$5.52

 

$6.02

Capital Expenditures ($/MM)

$15.00

 

$20.00

 

1) Finished products include gasoline, ULSD, and Jet A

2) Intermediate & Other products include Vacuum Gas Oil (VGO), Liquified Petroleum Gases (LPGs), and Vacuum Tower Bottoms (VTBs)

CONFERENCE CALL AND WEBCAST DETAILS

A conference call will be held today, August 8, 2024, at 9:00 A.M. Eastern Time to review the Company’s financial results, discuss recent events. 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

A replay of the teleconference will be available in the “Events and Presentation” section of Vertex’s website at www.vertexenergy.com for up to one year following the conference call.

ABOUT VERTEX ENERGY

Vertex Energy is a leading energy transition company that specializes in producing high-purity refined fuels and products. Our innovative solutions are designed to enhance the performance of our customers and partners while also prioritizing sustainability, safety, and operational excellence. With a commitment to providing superior products and services, Vertex Energy is dedicated to shaping the future of the energy industry.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. The important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the Company’s projected Outlook for the third quarter of 2024, the costs associated with, and outcome of the Company’s plans to optimize conventional fuel and renewable diesel production moving forward; 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; potential restructuring of the Company, its operations, financials, debts and assets; 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 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, including to pay amounts owed under the Company’s outstanding term loan, the Company’s ability to raise such capital in the future, and the terms of such funding, including dilution caused thereby, and steps the Company may be required to take in the future if the Company is unable to raise additional capital, including potentially seeking bankruptcy protection; 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 and conventional production and the breakdown between the two; 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 intermediation facilities, 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 and interest rates 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, 2023, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on Vertex’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

PROJECTIONS

The financial projections (the “Projections”) included herein were prepared by Vertex in good faith using assumptions believed to be reasonable. A significant number of assumptions about the operations of the business of Vertex were based, in part, on economic, competitive, and general business conditions prevailing at the time the Projections were developed. Any future changes in these conditions, may materially impact the ability of Vertex to achieve the financial results set forth in the Projections. The Projections are based on numerous assumptions, including realization of the operating strategy of Vertex; industry performance; no material adverse changes in applicable legislation or regulations, or the administration thereof, or generally accepted accounting principles; general business and economic conditions; competition; retention of key management and other key employees; absence of material contingent or unliquidated litigation, indemnity, or other claims; minimal changes in current pricing; static material and equipment pricing; no significant increases in interest rates or inflation; and other matters, many of which will be beyond the control of Vertex, and some or all of which may not materialize. The Projections also assume the continued uptime of the Company’s facilities at historical levels and the successful funding of, timely completion of, and successful outcome of, planned capital projects. Additionally, to the extent that the assumptions inherent in the Projections are based upon future business decisions and objectives, they are subject to change. Although the Projections are presented with numerical specificity and are based on reasonable expectations developed by Vertex’s management, the assumptions and estimates underlying the Projections are subject to significant business, economic, and competitive uncertainties and contingencies, many of which will be beyond the control of Vertex. Accordingly, the Projections are only estimates and are necessarily speculative in nature. It is expected that some or all of the assumptions in the Projections will not be realized and that actual results will vary from the Projections. Such variations may be material and may increase over time. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections. The projected financial information contained herein should not be regarded as a representation or warranty by Vertex, its management, advisors, or any other person that the Projections can or will be achieved. Vertex cautions that the Projections are speculative in nature and based upon subjective decisions and assumptions. As a result, the Projections should not be relied on as necessarily predictive of actual future events.

NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS

In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), in this news release we also present certain non-U.S. GAAP financial measures and key performance indicators. Non-U.S. GAAP financial measures include Adjusted Gross Margin, Fuel Gross Margin and 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 Net Leverage(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 EBITDA 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, acquisition costs, gain on change in value of derivative warrant liability, environmental clean-up, stock-based compensation, (gain) loss on sale of assets, 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), 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, and various short-term notes including insurance premium financing. Net leverage is defined as Long-Term Debt divided by trailing twelve month 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

(in thousands, except number of shares and par value)

(UNAUDITED)

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

18,763

 

 

$

76,967

 

Restricted cash

 

100

 

 

 

3,606

 

Accounts receivable, net

 

80,526

 

 

 

36,164

 

Inventory

 

126,319

 

 

 

182,120

 

Prepaid expenses and other current assets

 

50,613

 

 

 

53,174

 

Total current assets

 

276,321

 

 

 

352,031

 

 

 

 

 

Fixed assets, net

 

343,341

 

 

 

326,111

 

Finance lease right-of-use assets

 

62,519

 

 

 

64,499

 

Operating lease right-of use assets

 

76,370

 

 

 

96,394

 

Intangible assets, net

 

9,773

 

 

 

11,541

 

Other assets

 

4,044

 

 

 

4,048

 

TOTAL ASSETS

$

772,368

 

 

$

854,624

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

36,484

 

 

$

75,004

 

Accrued expenses and other current liabilities

 

137,043

 

 

 

73,636

 

Finance lease liability-current

 

2,541

 

 

 

2,435

 

Operating lease liability-current

 

12,524

 

 

 

20,296

 

Current portion of long-term debt, net

 

197,235

 

 

 

16,362

 

Obligations under inventory financing agreements, net

 

108,728

 

 

 

141,093

 

Total current liabilities

 

494,555

 

 

 

328,826

 

 

 

 

 

Long-term debt, net

 

14,530

 

 

 

170,701

 

Finance lease liability-long-term

 

64,918

 

 

 

66,206

 

Operating lease liability-long-term

 

62,702

 

 

 

74,444

 

Deferred tax liabilities

 

2,776

 

 

 

2,776

 

Derivative warrant liability

 

1,961

 

 

 

9,907

 

Other liabilities

 

1,377

 

 

 

1,377

 

Total liabilities

 

642,819

 

 

 

654,237

 

 

 

 

 

EQUITY

 

 

 

Common stock, $0.001 par value per share; 750,000,000 shares authorized; 93,514,346 shares issued and outstanding at June 30, 2024 and December 31, 2023.

 

94

 

 

 

94

 

Additional paid-in capital

 

384,493

 

 

 

383,632

 

Accumulated deficit

 

(258,886

)

 

 

(187,379

)

Total Vertex Energy, Inc. shareholders' equity

 

125,701

 

 

 

196,347

 

Non-controlling interest

 

3,848

 

 

 

4,040

 

Total equity

 

129,549

 

 

 

200,387

 

TOTAL LIABILITIES AND EQUITY

$

772,368

 

 

$

854,624

 

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(UNAUDITED)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

$

750,061

 

 

$

734,893

 

 

$

1,445,387

 

 

$

1,426,035

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

741,202

 

 

 

729,649

 

 

 

1,393,236

 

 

 

1,349,001

 

Depreciation and amortization attributable to costs of revenues

 

 

8,613

 

 

 

6,630

 

 

 

16,799

 

 

 

10,967

 

Gross profit (loss)

 

 

246

 

 

 

(1,386

)

 

 

35,352

 

 

 

66,067

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below)

 

 

37,441

 

 

 

42,636

 

 

 

77,223

 

 

 

84,578

 

Depreciation and amortization attributable to operating expenses

 

 

1,125

 

 

 

1,028

 

 

 

2,229

 

 

 

2,044

 

Total operating expenses

 

 

38,566

 

 

 

43,664

 

 

 

79,452

 

 

 

86,622

 

Loss from operations

 

 

(38,320

)

 

 

(45,050

)

 

 

(44,100

)

 

 

(20,555

)

Other income (expense):

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

520

 

 

 

(496

)

 

 

(529

)

 

 

1,156

 

Gain on change in value of derivative warrant liability

 

 

1,680

 

 

 

9,600

 

 

 

8,338

 

 

 

415

 

Interest expense

 

 

(17,725

)

 

 

(77,536

)

 

 

(35,408

)

 

 

(90,013

)

Total other expense

 

 

(15,525

)

 

 

(68,432

)

 

 

(27,599

)

 

 

(88,442

)

Loss from continuing operations before income tax

 

 

(53,845

)

 

 

(113,482

)

 

 

(71,699

)

 

 

(108,997

)

Income tax expense

 

 

 

 

 

28,688

 

 

 

 

 

 

27,676

 

Loss from continuing operations

 

 

(53,845

)

 

 

(84,794

)

 

 

(71,699

)

 

 

(81,321

)

Income from discontinued operations, net of tax (see note 22)

 

 

 

 

 

3,340

 

 

 

 

 

 

53,680

 

Net loss

 

 

(53,845

)

 

 

(81,454

)

 

 

(71,699

)

 

 

(27,641

)

Net loss attributable to non-controlling interest from continuing operations

 

 

(72

)

 

 

(53

)

 

 

(192

)

 

 

(103

)

Net loss attributable to Vertex Energy, Inc.

 

$

(53,773

)

 

$

(81,401

)

 

$

(71,507

)

 

$

(27,538

)

 

 

 

 

 

 

 

 

 

Net income loss attributable to common shareholders from continuing operations

 

$

(53,773

)

 

$

(84,741

)

 

$

(71,507

)

 

$

(81,218

)

Net income attributable to common shareholders from discontinued operations, net of tax

 

 

 

 

 

3,340

 

 

 

 

 

 

53,680

 

Net loss attributable to common shareholders

 

$

(53,773

)

 

$

(81,401

)

 

$

(71,507

)

 

$

(27,538

)

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.58

)

 

$

(1.07

)

 

$

(0.76

)

 

$

(1.05

)

Discontinued operations, net of tax

 

 

 

 

 

0.03

 

 

 

 

 

 

0.69

 

Basic loss per common share

 

$

(0.58

)

 

$

(1.04

)

 

$

(0.76

)

 

$

(0.36

)

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.58

)

 

$

(1.07

)

 

$

(0.76

)

 

$

(1.05

)

Discontinued operations, net of tax

 

 

 

 

 

0.03

 

 

 

 

 

 

0.69

 

Diluted income (loss) per common share

 

$

(0.58

)

 

$

(1.04

)

 

$

(0.76

)

 

$

(0.36

)

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share

 

 

 

 

 

 

 

 

Basic

 

 

93,514

 

 

 

79,519

 

 

 

93,514

 

 

 

77,615

 

Diluted

 

 

93,514

 

 

 

79,519

 

 

 

93,514

 

 

 

77,615

 

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except par value)

(UNAUDITED) 

 

Six Months Ended June 30, 2024

 

Common Stock

 

 

 

 

 

 

 

 

 

Shares

 

$0.001 Par

 

Additional

Paid-In

Capital

 

Accumulated

Deficit

 

Non-

controlling

Interest

 

Total Equity

Balance on January 1, 2024

93,515

 

$

94

 

$

383,632

 

$

(187,379

)

 

$

4,040

 

 

$

200,387

 

Stock based compensation expense

 

 

 

 

431

 

 

 

 

 

 

 

 

431

 

Net loss

 

 

 

 

 

 

(17,734

)

 

 

(120

)

 

 

(17,854

)

Balance on March 31, 2024

93,515

 

 

94

 

 

384,063

 

 

(205,113

)

 

 

3,920

 

 

 

182,964

 

Stock based compensation expense

 

 

 

 

430

 

 

 

 

 

 

 

 

430

 

Net loss

 

 

 

 

 

 

(53,773

)

 

 

(72

)

 

 

(53,845

)

Balance on June 30, 2024

93,515

 

$

94

 

$

384,493

 

$

(258,886

)

 

$

3,848

 

 

$

129,549

 

Six Months Ended June 30, 2023

 

Common Stock

 

 

 

 

 

 

 

 

 

Shares

 

$0.001 Par

 

Additional

Paid-In

Capital

 

Accumulated

Deficit

 

Non-

controlling

Interest

 

Total Equity

Balance on January 1, 2023

75,670

 

$

76

 

$

279,552

 

$

(115,893

)

 

$

1,685

 

 

$

165,420

 

Exercise of options

166

 

 

 

 

209

 

 

 

 

 

 

 

 

209

 

Stock based compensation expense

 

 

 

 

365

 

 

 

 

 

 

 

 

365

 

Non-controlling shareholder contribution

 

 

 

 

 

 

 

 

 

980

 

 

 

980

 

Net income (loss)

 

 

 

 

 

 

53,863

 

 

 

(50

)

 

 

53,813

 

Balance on March 31, 2023

75,836

 

 

76

 

 

280,126

 

 

(62,030

)

 

 

2,615

 

 

 

220,787

 

Exercise of options

195

 

 

 

 

169

 

 

 

 

 

 

 

 

169

 

Stock based compensation expense

 

 

 

 

368

 

 

 

 

 

 

 

 

368

 

Non-controlling shareholder contribution

 

 

 

 

 

 

 

 

 

490

 

 

 

490

 

Senior Note converted

17,206

 

 

17

 

 

101,113

 

 

 

 

 

 

 

 

101,130

 

Net income (loss)

 

 

 

 

 

 

(81,401

)

 

 

(53

)

 

 

(81,454

)

Balance on June 30, 2023

93,237

 

$

93

 

$

381,776

 

$

(143,431

)

 

$

3,052

 

 

$

241,490

 

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

 

 

Six Months Ended

 

June 30,

2024

 

June 30,

2023

Cash flows from operating activities

 

 

 

Net loss

$

(71,699

)

 

$

(27,641

)

Income from discontinued operations, net of tax

 

 

 

 

53,680

 

Loss from continuing operations

 

(71,699

)

 

 

(81,321

)

Adjustments to reconcile loss from continuing operations to cash used in operating activities from continuing operations

 

 

 

Stock based compensation expense

 

861

 

 

 

733

 

Depreciation and amortization

 

19,028

 

 

 

13,011

 

Deferred income tax expense

 

 

 

 

(27,676

)

Loss on lease modification

 

35

 

 

 

 

Loss (gain) on sale of assets

 

684

 

 

 

(2

)

Increase (decrease) in allowance for credit losses

 

(704

)

 

 

93

 

Decrease in fair value of derivative warrant liability

 

(8,338

)

 

 

(415

)

Loss on commodity derivative contracts

 

1,551

 

 

 

2,123

 

Net cash settlements on commodity derivatives contracts

 

(1,547

)

 

 

1,269

 

Amortization of debt discount and deferred costs

 

9,416

 

 

 

70,948

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable and other receivables

 

(43,658

)

 

 

(18,589

)

Inventory

 

55,801

 

 

 

(80,199

)

Prepaid expenses and other current assets

 

3,001

 

 

 

(16,546

)

Accounts payable

 

(38,518

)

 

 

20,376

 

Accrued expenses

 

53,183

 

 

 

5,932

 

Right-of use operating lease liabilities change

 

475

 

 

 

 

Other assets

 

4

 

 

 

(1,090

)

Net cash used in operating activities from continuing operations

 

(20,425

)

 

 

(111,353

)

Cash flows from investing activities

 

 

 

Software purchase

 

 

 

 

(2,500

)

Purchase of fixed assets

 

(25,996

)

 

 

(105,344

)

Proceeds from sale of discontinued operations

 

 

 

 

92,034

 

Proceeds from sale of fixed assets

 

2,584

 

 

 

5

 

Net cash used in investing activities from continuing operations

 

(23,412

)

 

 

(15,805

)

Cash flows from financing activities

 

 

 

Payments on finance leases

 

(1,187

)

 

 

(908

)

Proceeds from exercise of options and warrants to common stock

 

 

 

 

378

 

Contributions received from noncontrolling interest

 

 

 

 

1,470

 

Net change on inventory financing agreements

 

(32,615

)

 

 

43,657

 

Proceeds from note payable

 

28,997

 

 

 

13,081

 

Payments on note payable

 

(13,068

)

 

 

(24,422

)

Net cash provided by (used in) financing activities from continuing operations

 

(17,873

)

 

 

33,256

 

 

 

 

 

Discontinued operations:

 

 

 

Net cash used in operating activities

 

 

 

 

(150

)

Net cash used in discontinued operations

 

 

 

 

(150

)

 

 

 

 

Net decrease in cash, cash equivalents and restricted cash

 

(61,710

)

 

 

(94,052

)

Cash, cash equivalents, and restricted cash at beginning of the period

 

80,573

 

 

 

146,187

 

Cash, cash equivalents, and restricted cash at end of period

$

18,863

 

 

$

52,135

 

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

(Continued)

 

 

Six Months Ended

 

June 30,

2024

 

June 30,

2023

 

 

 

 

Cash and cash equivalents

$

18,763

 

 

$

48,532

Restricted cash

 

100

 

 

 

3,603

Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows

$

18,863

 

 

$

52,135

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

Cash paid for interest

$

27,772

 

 

$

24,755

Cash paid for taxes

$

 

 

$

 

 

 

 

NON-CASH INVESTING AND FINANCING TRANSACTIONS

 

 

 

Warrants issued with debt

$

(392

)

 

$

Conversion of Convertible Senior Notes to common stock

$

 

 

$

79,948

ROU assets obtained from new finance leases

$

16

 

 

$

23,990

ROU assets obtained from new operating leases

$

1,084

 

 

$

38,945

ROU assets disposed under operating leases

$

(9,747

)

 

$

Unaudited segment information for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

 

 

 

Three Months Ended June 30, 2024

 

 

Refining &

Marketing

 

Black Oil &

Recovery

 

Corporate and

Eliminations

 

Total

Revenues:

 

 

 

 

 

 

 

 

Refined products

 

$

707,622

 

 

$

26,682

 

 

$

(1,892

)

 

$

732,412

 

Re-refined products

 

 

4,877

 

 

 

5,346

 

 

 

 

 

 

10,223

 

Services

 

 

4,504

 

 

 

2,922

 

 

 

 

 

 

7,426

 

Total revenues

 

 

717,003

 

 

 

34,950

 

 

 

(1,892

)

 

 

750,061

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

714,003

 

 

 

29,091

 

 

 

(1,892

)

 

 

741,202

 

Depreciation and amortization attributable to costs of revenues

 

 

6,945

 

 

 

1,668

 

 

 

 

 

 

8,613

 

Gross profit (loss)

 

 

(3,945

)

 

 

4,191

 

 

 

 

 

 

246

 

Selling, general and administrative expenses

 

 

25,457

 

 

 

5,327

 

 

 

6,657

 

 

 

37,441

 

Depreciation and amortization attributable to operating expenses

 

 

815

 

 

 

72

 

 

 

238

 

 

 

1,125

 

Loss from operations

 

 

(30,217

)

 

 

(1,208

)

 

 

(6,895

)

 

 

(38,320

)

Other income (expenses)

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

(56

)

 

 

576

 

 

 

520

 

Gain on change in derivative liability

 

 

 

 

 

 

 

 

1,680

 

 

 

1,680

 

Interest expense

 

 

(5,353

)

 

 

(141

)

 

 

(12,231

)

 

 

(17,725

)

Total other expense

 

 

(5,353

)

 

 

(197

)

 

 

(9,975

)

 

 

(15,525

)

Loss from continuing operations before income tax

 

$

(35,570

)

 

$

(1,405

)

 

$

(16,870

)

 

$

(53,845

)

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

9,102

 

 

$

2,168

 

 

$

 

 

$

11,270

 

 

 

Three Months Ended June 30, 2023

 

 

Refining &

Marketing

 

Black Oil &

Recovery

 

Corporate and

Eliminations

 

Total

Revenues:

 

 

 

 

 

 

 

 

Refined products

 

$

702,606

 

 

$

21,797

 

 

$

(2,411

)

 

$

721,992

 

Re-refined products

 

 

5,011

 

 

 

3,536

 

 

 

 

 

 

8,547

 

Services

 

 

3,802

 

 

 

552

 

 

 

 

 

 

4,354

 

Total revenues

 

 

711,419

 

 

 

25,885

 

 

 

(2,411

)

 

 

734,893

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

710,958

 

 

 

23,263

 

 

 

(4,572

)

 

 

729,649

 

Depreciation and amortization attributable to costs of revenues

 

 

5,568

 

 

 

1,062

 

 

 

 

 

 

6,630

 

Gross profit (loss)

 

 

(5,107

)

 

 

1,560

 

 

 

2,161

 

 

 

(1,386

)

Selling, general and administrative expenses

 

 

32,969

 

 

 

4,504

 

 

 

5,163

 

 

 

42,636

 

Depreciation and amortization attributable to operating expenses

 

 

822

 

 

 

38

 

 

 

168

 

 

 

1,028

 

Loss from operations

 

 

(38,898

)

 

 

(2,982

)

 

 

(3,170

)

 

 

(45,050

)

Other income (expenses)

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

(499

)

 

 

3

 

 

 

(496

)

Loss on change in derivative liability

 

 

 

 

 

 

 

 

9,600

 

 

 

9,600

 

Interest expense

 

 

(4,529

)

 

 

(28

)

 

 

(72,979

)

 

 

(77,536

)

Total other expense

 

 

(4,529

)

 

 

(527

)

 

 

(63,376

)

 

 

(68,432

)

Loss from continuing operations before income tax

 

$

(43,427

)

 

$

(3,509

)

 

$

(66,546

)

 

$

(113,482

)

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

27,762

 

 

$

2,827

 

 

$

 

 

$

30,589

 

 

 

Six Months Ended June 30, 2024

 

 

Refining &

Marketing

 

Black Oil &

Recovery

 

Corporate and

Eliminations

 

Total

Revenues:

 

 

 

 

 

 

 

 

Refined products

 

$

1,358,381

 

 

$

58,406

 

 

$

(2,914

)

 

$

1,413,873

 

Re-refined products

 

 

8,744

 

 

 

10,561

 

 

 

 

 

 

19,305

 

Services

 

 

7,585

 

 

 

4,624

 

 

 

 

 

 

12,209

 

Total revenues

 

 

1,374,710

 

 

 

73,591

 

 

 

(2,914

)

 

 

1,445,387

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

1,336,978

 

 

 

59,172

 

 

 

(2,914

)

 

 

1,393,236

 

Depreciation and amortization attributable to costs of revenues

 

 

13,485

 

 

 

3,314

 

 

 

 

 

 

16,799

 

Gross profit

 

 

24,247

 

 

 

11,105

 

 

 

 

 

 

35,352

 

Selling, general and administrative expenses

 

 

51,604

 

 

 

10,724

 

 

 

14,895

 

 

 

77,223

 

Depreciation and amortization attributable to operating expenses

 

 

1,608

 

 

 

144

 

 

 

477

 

 

 

2,229

 

Income (loss) from operations

 

 

(28,965

)

 

 

237

 

 

 

(15,372

)

 

 

(44,100

)

Other income (expenses)

 

 

 

 

 

 

 

 

Other income (expense)

 

 

(685

)

 

 

(415

)

 

 

571

 

 

 

(529

)

Gain on change in derivative liability

 

 

 

 

 

 

 

 

8,338

 

 

 

8,338

 

Interest expense

 

 

(10,100

)

 

 

(237

)

 

 

(25,071

)

 

 

(35,408

)

Total other expense

 

 

(10,785

)

 

 

(652

)

 

 

(16,162

)

 

 

(27,599

)

Loss from continuing operations before income tax

 

$

(39,750

)

 

$

(415

)

 

$

(31,534

)

 

$

(71,699

)

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

20,401

 

 

$

5,595

 

 

$

 

 

$

25,996

 

 

 

Six Months Ended June 30, 2023

 

 

Refining &

Marketing

 

Black Oil &

Recovery

 

Corporate and

Eliminations

 

Total

Revenues:

 

 

 

 

 

 

 

 

Refined products

 

$

1,356,166

 

 

$

51,220

 

 

$

(5,143

)

 

$

1,402,243

 

Re-refined products

 

 

8,847

 

 

 

7,947

 

 

 

 

 

 

16,794

 

Services

 

 

5,734

 

 

 

1,264

 

 

 

 

 

 

6,998

 

Total revenues

 

 

1,370,747

 

 

 

60,431

 

 

 

(5,143

)

 

 

1,426,035

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

1,300,770

 

 

 

53,681

 

 

 

(5,450

)

 

 

1,349,001

 

Depreciation and amortization attributable to costs of revenues

 

 

8,862

 

 

 

2,105

 

 

 

 

 

 

10,967

 

Gross profit

 

 

61,115

 

 

 

4,645

 

 

 

307

 

 

 

66,067

 

Selling, general and administrative expenses

 

 

59,455

 

 

 

9,303

 

 

 

15,820

 

 

 

84,578

 

Depreciation and amortization attributable to operating expenses

 

 

1,630

 

 

 

76

 

 

 

338

 

 

 

2,044

 

Income (loss) from operations

 

 

30

 

 

 

(4,734

)

 

 

(15,851

)

 

 

(20,555

)

Other income (expenses)

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

1,156

 

 

 

 

 

 

1,156

 

Loss on change in derivative liability

 

 

 

 

 

 

 

 

415

 

 

 

415

 

Interest expense

 

 

(8,405

)

 

 

(85

)

 

 

(81,523

)

 

 

(90,013

)

Total other income (expense)

 

 

(8,405

)

 

 

1,071

 

 

 

(81,108

)

 

 

(88,442

)

Loss from continuing operations before income tax

 

$

(8,375

)

 

$

(3,663

)

 

$

(96,959

)

 

$

(108,997

)

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

97,670

 

 

$

7,674

 

 

$

 

 

$

105,344

 

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 June 30, 2024

In thousands

Conventional

Renewable

Mobile Refinery

Total

Gross profit

$

6,407

 

$

(11,847

)

$

(5,440

)

Unrealized (gain) loss on hedging activities

 

353

 

 

(302

)

 

51

 

Inventory valuation adjustments

 

3,233

 

 

2,524

 

 

5,757

 

Adjusted gross margin

$

9,993

 

$

(9,625

)

$

368

 

Variable production costs attributable to cost of revenues

 

19,671

 

 

12,182

 

 

31,853

 

Depreciation and amortization attributable to cost of revenues

 

2,960

 

 

3,933

 

 

6,893

 

RINs

 

9,099

 

 

-

 

 

9,099

 

Realized (gain) loss on hedging activities

 

(56

)

 

158

 

 

102

 

Financing costs

 

(4,397

)

 

85

 

 

(4,312

)

Other revenues

 

(2,296

)

 

(2,208

)

 

(4,504

)

Fuel gross margin

$

34,974

 

$

4,525

 

$

39,499

 

Throughput (bpd)

 

67,758

 

 

3,092

 

 

70,850

 

Fuel gross margin per barrel of throughput

$

5.67

 

$

16.08

 

$

6.13

 

Total OPEX

$

15,942

 

$

8,934

 

$

24,876

 

Operating expenses per barrel of throughput

$

2.59

 

$

31.75

 

$

3.86

 

Three Months Ended March 31, 2024

In thousands

Conventional

Renewable

Mobile Refinery

Total

Gross profit

$

37,508

 

$

(10,462

)

$

27,046

 

Unrealized (gain) loss on hedging activities

 

(555

)

 

934

 

 

379

 

Inventory valuation adjustments

 

9,657

 

 

4,592

 

 

14,249

 

Adjusted gross margin

$

46,610

 

$

(4,936

)

$

41,674

 

Variable production costs attributable to cost of revenues

 

25,651

 

 

6,846

 

 

32,497

 

Depreciation and amortization attributable to cost of revenues

 

2,558

 

 

3,932

 

 

6,490

 

RINs

 

(857

)

 

-

 

 

(857

)

Realized (gain) loss on hedging activities

 

2,577

 

 

(1,783

)

 

794

 

Financing costs

 

(172

)

 

132

 

 

(40

)

Other revenues

 

(2,719

)

 

(362

)

 

(3,081

)

Fuel gross margin

$

73,648

 

$

3,829

 

$

77,477

 

Throughput (bpd)

 

64,065

 

 

4,090

 

 

68,155

 

Fuel gross margin per barrel of throughput

$

12.63

 

$

10.29

 

$

12.49

 

Total OPEX

$

16,061

 

$

9,382

 

$

25,443

 

Operating expenses per barrel of throughput

$

2.75

 

$

25.21

 

$

4.10

 

Six Months Ended June 30, 2024

In thousands

Conventional

Renewable

Mobile Refinery

Total

Gross profit

$

43,917

 

$

(22,310

)

$

21,607

 

Unrealized (gain) loss on hedging activities

 

(202

)

 

632

 

 

430

 

Inventory valuation adjustments

 

12,890

 

 

7,117

 

 

20,007

 

Adjusted gross margin

$

56,605

 

$

(14,561

)

$

42,044

 

Variable production costs attributable to cost of revenues

 

45,322

 

 

19,029

 

 

64,351

 

Depreciation and amortization attributable to cost of revenues

 

5,518

 

 

7,865

 

 

13,383

 

RINs

 

8,242

 

 

-

 

 

8,242

 

Realized (gain) loss on hedging activities

 

2,521

 

 

(1,625

)

 

896

 

Financing costs

 

(4,569

)

 

217

 

 

(4,352

)

Other revenues

 

(5,015

)

 

(2,570

)

 

(7,585

)

Fuel gross margin

$

108,624

 

$

8,355

 

$

116,979

 

Throughput (bpd)

 

65,911

 

 

3,591

 

 

69,502

 

Fuel gross margin per barrel of throughput

$

9.06

 

$

12.78

 

$

9.25

 

Total OPEX

$

32,002

 

$

18,316

 

$

50,318

 

Operating expenses per barrel of throughput

$

2.67

 

$

28.03

 

$

3.98

 

Unaudited Reconciliation of Adjusted EBITDA to Net loss from Continued and Discontinued Operations.

 

In thousands

Three Months Ended

Six Months Ended

Twelve Months Ended

 

 

 

 

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net income (loss)

$

(53,845

)

$

(81,454

)

$

(71,699

)

$

(27,641

)

$

(116,031

)

$

38,947

 

Depreciation and amortization

 

9,738

 

 

7,658

 

 

19,028

 

 

13,156

 

 

37,182

 

 

24,541

 

Income tax expense (benefit)

 

-

 

 

(27,236

)

 

-

 

 

(8,477

)

 

13,774

 

 

(10,966

)

Interest expense

 

17,725

 

 

77,536

 

 

35,408

 

 

90,013

 

 

64,961

 

 

118,008

 

EBITDA

$

(26,381

)

$

(23,496

)

$

(17,263

)

$

67,051

 

$

(114

)

$

170,530

 

Unrealized (gain) loss on hedging activities

 

8

 

 

3,370

 

 

453

 

 

3,115

 

 

(2,914

)

 

(43,664

)

Inventory valuation adjustments

 

5,757

 

 

(501

)

 

20,007

 

 

(2,033

)

 

28,132

 

 

25,553

 

Gain on change in value of derivative warrant liability

 

(1,680

)

 

(9,600

)

 

(8,338

)

 

(415

)

 

(15,915

)

 

(12,760

)

Stock-based compensation

 

430

 

 

368

 

 

861

 

 

733

 

 

2,412

 

 

1,733

 

(Gain) loss on sale of assets

 

(8

)

 

(4,291

)

 

684

 

 

(72,032

)

 

686

 

 

(71,109

)

Acquisition costs

 

-

 

 

-

 

 

-

 

 

4,308

 

 

-

 

 

7,197

 

Environmental clean-up reserve

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Other

 

(512

)

 

-

 

 

(154

)

 

-

 

 

366

 

 

(3

)

Adjusted EBITDA

$

(22,386

)

$

(34,150

)

$

(3,750

)

$

727

 

$

12,654

 

$

77,477

 

 

Three Months Ended June 30, 2024

Mobile Refinery

Legacy

Refining &

Marketing

Total Refining

& Marketing

Black Oil and

Recovery

Corporate

Consolidated

In thousands

Conventional

Renewable

Net income (loss)

$

(13,046

)

$

(23,438

)

$

914

$

(35,570

)

$

(1,405

)

$

(16,870

)

$

(53,845

)

Depreciation and amortization

 

3,754

 

 

3,954

 

 

52

 

7,760

 

 

1,740

 

 

238

 

 

9,738

 

Income tax expense (benefit)

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

Interest expense

 

2,717

 

 

2,636

 

 

-

 

5,353

 

 

141

 

 

12,231

 

 

17,725

 

EBITDA

$

(6,575

)

$

(16,848

)

$

966

$

(22,457

)

$

476

 

$

(4,401

)

$

(26,382

)

Unrealized (gain) loss on hedging activities

 

353

 

 

(302

)

 

-

 

51

 

 

(42

)

 

-

 

 

9

 

Inventory valuation adjustments

 

3,233

 

 

2,524

 

 

-

 

5,757

 

 

-

 

 

-

 

 

5,757

 

Gain on change in value of derivative warrant liability

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

(1,680

)

 

(1,680

)

Stock-based compensation

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

430

 

 

430

 

(Gain) loss on sale of assets

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

(8

)

 

(8

)

Other

 

-

 

 

-

 

 

-

 

-

 

 

56

 

 

(568

)

 

(512

)

Adjusted EBITDA

$

(2,989

)

$

(14,626

)

$

966

$

(16,649

)

$

490

 

$

(6,227

)

$

(22,386

)

 

Six Months Ended June 30, 2024

Mobile Refinery

Legacy

Refining &

Marketing

Total Refining & Marketing

Black Oil and Recovery

Corporate

Consolidated

In thousands

Conventional

Renewable

Net income (loss)

$

4,492

 

$

(45,596

)

$

1,354

$

(39,750

)

$

(415

)

$

(31,534

)

$

(71,699

)

Depreciation and amortization

 

7,084

 

 

7,907

 

 

102

 

15,093

 

 

3,458

 

 

477

 

 

19,028

 

Income tax expense (benefit)

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

Interest expense

 

5,172

 

 

4,928

 

 

-

 

10,100

 

 

237

 

 

25,071

 

 

35,408

 

EBITDA

$

16,748

 

$

(32,761

)

$

1,456

$

(14,557

)

$

3,280

 

$

(5,986

)

$

(17,263

)

Unrealized (gain) loss on hedging activities

 

(202

)

 

632

 

 

20

 

450

 

 

4

 

 

-

 

 

454

 

Inventory valuation adjustments

 

12,890

 

 

7,117

 

 

-

 

20,007

 

 

-

 

 

-

 

 

20,007

 

Gain on change in value of derivative warrant liability

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

(8,338

)

 

(8,338

)

Stock-based compensation

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

861

 

 

861

 

(Gain) loss on sale of assets

 

685

 

 

-

 

 

-

 

685

 

 

5

 

 

(7

)

 

683

 

Other

 

-

 

 

-

 

 

-

 

-

 

 

410

 

 

(564

)

 

(154

)

Adjusted EBITDA

$

30,121

 

$

(25,012

)

$

1,476

$

6,585

 

$

3,699

 

$

(14,034

)

$

(3,750

)

 

Three Months Ended June 30, 2023

In thousands

Mobile

Refinery

Legacy

Refining and}Marketing

Total Refining

& Marketing

Black Oil and

Recovery

Corporate

Consolidated

 

Net income (loss)

$

(42,116

)

$

(1,312

)

$

(43,428

)

$

(3,667

)

$

(34,359

)

$

(81,454

)

Depreciation and amortization

 

6,119

 

 

272

 

 

6,391

 

 

1,100

 

 

167

 

 

7,658

 

Income tax expense (benefit)

 

-

 

 

-

 

 

-

 

 

-

 

 

(27,236

)

 

(27,236

)

Interest expense

 

4,529

 

 

-

 

 

4,529

 

 

28

 

 

72,979

 

 

77,536

 

EBITDA

$

(31,468

)

$

(1,040

)

$

(32,508

)

$

(2,539

)

$

11,551

 

$

(23,496

)

Unrealized (gain) loss on hedging activities

 

3,762

 

 

25

 

 

3,787

 

 

(417

)

 

-

 

 

3,370

 

Inventory valuation adjustments

 

(501

)

 

-

 

 

(501

)

 

-

 

 

-

 

 

(501

)

Gain on change in value of derivative warrant liability

 

-

 

 

-

 

 

-

 

 

-

 

 

(9,600

)

 

(9,600

)

Stock-based compensation

 

-

 

 

-

 

 

-

 

 

-

 

 

368

 

 

368

 

(Gain) loss on sale of assets

 

-

 

 

-

 

 

-

 

 

499

 

 

(4,790

)

 

(4,291

)

Adjusted EBITDA

$

(28,207

)

$

(1,015

)

$

(29,222

)

$

(2,457

)

$

(2,471

)

$

(34,150

)

 

Six Months Ended June 30, 2023

In thousands

Mobile

Refinery

Legacy

Refining and

Marketing

Total Refining

& Marketing

Black Oil and

Recovery

Corporate

Consolidated

 

 

 

 

 

 

Net income (loss)

$

(5,939

)

$

(2,437

)

$

(8,376

)

$

(1,663

)

$

(17,602

)

$

(27,641

)

Depreciation and amortization

 

9,999

 

 

494

 

 

10,493

 

 

2,326

 

 

337

 

 

13,156

 

Income tax expense (benefit)

 

-

 

 

-

 

 

-

 

 

-

 

 

(8,477

)

 

(8,477

)

Interest expense

 

8,405

 

 

-

 

 

8,405

 

 

85

 

 

81,523

 

 

90,013

 

EBITDA

$

12,465

 

$

(1,943

)

$

10,522

 

$

748

 

$

55,781

 

$

67,051

 

Unrealized (gain) loss on hedging activities

 

3,192

 

 

(42

)

 

3,150

 

 

(35

)

 

-

 

 

3,115

 

Inventory valuation adjustments

 

(2,033

)

 

-

 

 

(2,033

)

 

-

 

 

-

 

 

(2,033

)

Gain on change in value of derivative warrant liability

 

-

 

 

-

 

 

-

 

 

-

 

 

(415

)

 

(415

)

Stock-based compensation

 

-

 

 

-

 

 

-

 

 

-

 

 

733

 

 

733

 

(Gain) loss on sale of assets

 

-

 

 

-

 

 

-

 

 

(1,156

)

 

(70,876

)

 

(72,032

)

Acquisition costs

 

-

 

 

-

 

 

-

 

 

-

 

 

4,308

 

 

4,308

 

Adjusted EBITDA

$

13,624

 

$

(1,985

)

$

11,639

 

$

(443

)

$

(10,469

)

$

727

 

 

Three Months Ended March 31, 2024

Mobile Refinery

Legacy

Refining &

Marketing

Total Refining

& Marketing

Black Oil and

Recovery

Corporate

Consolidated

In thousands

Conventional

Renewable

Net income (loss)

$

17,535

 

$

(22,157

)

$

442

$

(4,180

)

$

990

$

(14,664

)

$

(17,854

)

Depreciation and amortization

 

3,330

 

 

3,953

 

 

51

 

7,334

 

 

1,717

 

239

 

 

9,290

 

Income tax expense (benefit)

 

-

 

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

Interest expense

 

2,455

 

 

2,292

 

 

-

 

4,747

 

 

96

 

12,840

 

 

17,683

 

EBITDA

$

23,320

 

$

(15,912

)

$

493

$

7,901

 

$

2,803

$

(1,585

)

$

9,119

 

Unrealized (gain) loss on hedging activities

 

(555

)

 

934

 

 

20

 

399

 

 

46

 

-

 

 

445

 

Inventory valuation adjustments

 

9,657

 

 

4,592

 

 

-

 

14,249

 

 

-

 

-

 

 

14,249

 

Gain on change in value of derivative warrant liability

 

-

 

 

-

 

 

-

 

-

 

 

-

 

(6,658

)

 

(6,658

)

Stock-based compensation

 

-

 

 

-

 

 

-

 

-

 

 

-

 

430

 

 

430

 

(Gain) loss on sale of assets

 

685

 

 

-

 

 

-

 

685

 

 

5

 

1

 

 

691

 

Other

 

-

 

 

-

 

 

-

 

-

 

 

354

 

4

 

 

358

 

Adjusted EBITDA

$

33,107

 

$

(10,386

)

$

513

$

23,234

 

$

3,208

$

(7,808

)

$

18,634

 

Unaudited Reconciliation of Long-Term Debt to Net Long-Term Debt and Net Leverage.

 

In thousands

As of

 

June 30, 2024

June 30, 2023

Long-Term Debt:

 

 

Senior Convertible Note

$

15,230

 

$

15,230

 

Term Loan 2025

 

207,169

 

 

150,075

 

Promissory Note

 

4,414

 

 

-

 

Finance lease liability long-term

 

64,918

 

 

67,290

 

Finance lease liability short-term

 

2,541

 

 

2,320

 

Various short term note including insurance premium financing

 

9,500

 

 

9,995

 

Long-Term Debt and Lease Obligations

$

303,772

 

$

244,910

 

Unamortized discount and deferred financing costs

 

(24,548

)

 

(33,402

)

Long-Term Debt and Lease Obligations per Balance Sheet

$

279,224

 

$

211,508

 

Cash and Cash Equivalents

 

(18,763

)

 

(48,532

)

Restricted Cash

 

(100

)

 

(3,603

)

Total Cash and Cash Equivalents

$

(18,863

)

$

(52,135

)

Net Long-Term Debt

$

284,909

 

$

192,775

 

TTM Adjusted EBITDA

$

12,654

 

$

77,477

 

Net Leverage

22.5x

2.5x

 

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