Vertex Energy Inc. - FORM 8-K - EX-99 - PRESS RELEASE - March 29, 2016

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8-K - CURRENT REPORT - Vertex Energy Inc.vtnr-8k_032916.htm

 

Vertex Energy 8-K

 Exhibit 99.1

 

 

 

 

VERTEX ENERGY, INC. ANNOUNCES FOURTH QUARTER AND YEAR-END 2015 FINANCIAL RESULTS

 

Gross Profit Increased 108% in Fourth Quarter

 

Conference Call to Be Held March 29th at 9:00 A.M. EDT

 

HOUSTON, TX – March XX , 2016 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, 2015.

 

FINANCIAL HIGHLIGHTS FOR THREE MONTHS ENDED DECEMBER 31, 2015

•         Revenue for the fourth quarter of 2015 was $20.9 million, compared to $62.6 million in the fourth quarter of 2014.

•         Gross profit for the fourth quarter was $378,136, a 108% increase from a year ago.

•         Net Loss of $3.0 million, compared to a loss of $11.5 million a year ago.

•         Per barrel margin was up 115% quarter-over-quarter.

 

FINANCIAL HIGHLIGHTS FOR YEAR ENDED DECEMBER 31, 2015

•         For full-year 2015, revenue was $146.9 million compared to $258.9 million a year ago.

•         Gross profit for the year declined 10% to $10.7 million from $11.9 million for 2014.

•         Reduced debt owed to senior lender

 

Benjamin P. Cowart, Chairman and CEO of Vertex Energy stated, “We continue to face a challenging commodity pricing market. However, we have survived the decline in crude prices from $100 per barrel to less than $30 per barrel. Tighter spreads, caused by the substantial drop in commodity prices, had negative effects on our business, not least of which was a slowdown in our overall expansion plans.”

 

Mr. Cowart, added, “We have dealt with the challenges created by lower oil prices by being diligent in our business operations, reducing costs, leveraging our asset portfolio, leading the shift to a charge for oil pricing model, and exploring new markets with our flexible technologies. In addition, I am particularly pleased about the pay-down of our debt owed to Goldman Sachs to approximately $6 million and our total long-term debt to approximately $13 million today. Also, the recent sale of the Nevada facility eliminated $1.5 million in quarterly costs, and increased our cash position to more than $10 million.”

 

Mr. Cowart, concluded, “We believe that the industry in 2016 will continue to feel the pressures that made 2015 difficult. However, we have seen so far this year significant improvements in our margins and our spreads. We believe that the business climate we operate in should be turning more positive for the whole industry in 2016.”

 

 

 

 

 
 

Management of Vertex Energy will host a conference call today 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 June 30, 2016, 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 #13631738.

 

ABOUT VERTEX ENERGY, INC.

 

Vertex Energy, Inc. (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, 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.

 

 

 

 

 
 

 

Contact:

Vertex Energy, Inc.

Marlon Nurse, DM

Senior VP – Investor Relations

212-564-4700

 

 

 

 

 

VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
  December 31, 2015   December 31, 2014
ASSETS      
Current assets          
Cash and cash equivalents $ 765,364     $ 6,017,076  
Accounts receivable, net   6,315,414       9,936,948  
Current portion of notes receivable, net   —       3,150,000  
Inventory   3,548,311     12,620,616  
Prepaid expenses   1,367,442     1,245,307  
Costs in excess of billings —     779,285  
Assets being held for sale 11,170,243     —  
Total current assets 23,166,774     33,749,232  
Non-current assets      
Fixed assets 60,846,824     59,919,721  
Less accumulated depreciation (7,818,217 )   (3,758,373 )
Net fixed assets 53,028,607     56,161,348  
Note receivable —     8,308,000  
Intangible assets, net 16,967,985     18,512,960  
Goodwill —     4,922,353  
Deferred financing cost, net 1,693,872     2,191,888  
Deferred tax assets —     9,495,000  
Other assets 481,450     481,450  
Total non-current assets 72,171,914     100,072,999  
TOTAL ASSETS $ 95,338,688     $ 133,822,231  
       
LIABILITIES AND EQUITY      
Current liabilities      
Accounts payable and accrued expenses $ 13,244,388     $ 21,984,136  
Dividends payable 376,571     —  
Capital leases 186,948     172,654  
Current portion of long-term debt 19,483,363     40,136,584  
Revolving note 1,744,122     —  
Deferred revenue 323,891     463,210  
Total current liabilities 35,359,283     62,756,584  
Long-term liabilities      
Long-term debt 5,539,659     2,187,675  
Derivative liability 1,548,604     —  
Contingent consideration —     6,069,000  
Deferred federal income tax —     4,189,000  
Total liabilities 42,447,546     75,202,259  
       
Commitments and contingencies      
       
TEMPORARY EQUITY      
Series B preferred shares, $0.001 par value per share;
10,000,000 shares authorized, 8,160,809 and 0 shares issued
and outstanding at December 31, 2015 and 2014, respectively with liquidation preference of $24,899,994 at December 31, 2015		 11,955,207     —  
       
EQUITY      
50,000,000 shares authorized      
Series A Convertible Preferred stock, $0.001 par value,
5,000,000 shares authorized and 612,943 and 630,419 shares issued
and outstanding at December 31, 2015 and 2014, respectively, with a liquidation preference of $913,285 and $939,324 at December 2015 and December 31,2014, respectively		 613     630  
Common stock, $0.001 par value per share;
750,000,000 shares authorized; 28,239,276 and 28,108,105
issued and outstanding at December 31, 2015 and 2014, respectively		 28,239     28,109  
Additional paid-in capital 53,014,054     46,595,472  
Retained earnings (accumulated deficit) (12,106,971 )   11,995,761  
Total stockholders' equity 40,935,935     58,619,972  
       
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY $ 95,338,688     $ 133,822,231  

 

 

 

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2015 and 2014
  2015   2014
Revenues $ 146,942,461     $ 258,904,867  
Cost of revenues 136,246,273     246,999,109  
Gross profit 10,696,188     11,905,758  
Reduction of contingent liability (6,069,000 )   (5,248,588 )
Selling, general and administrative expenses 24,046,464     19,089,545  
Depreciation and amortization 6,636,593     4,277,843  
Acquisition related expenses 175,172     3,813,668  
Inventory impairment charge —     467,911  
Total selling, general and administrative expenses 24,789,229     22,400,379  
Loss from operations (14,093,041 )   (10,494,621 )
Other income (expense)      
Provision for doubtful accounts (654,820 )   —  
Goodwill impairment (4,922,353 )   —  
Other income (expense) (4,446 )   333,612  
Gain on bargain purchase —     6,948,686  
Gain (loss) on sale of assets 13,944     (10,866 )
Gain on change in value of derivative liability 5,479,463     —  
Realized gain on futures contracts 551,090     —  
Interest expense (3,580,726 )   (2,636,690 )
Total other income (expense) (3,117,848 )   4,634,742  
Loss before income taxes (17,210,889 )   (5,859,879 )
Income tax expense (5,306,000 )   (11,763 )
Net loss (22,516,889 )   (5,871,642 )
Net income attributable to non-controlling interest —     325,399  
Net loss attributable to Vertex Energy, Inc. $ (22,516,889 )   $ (5,546,243 )
       
Less: accretion of discount on series B 780,069     —  
Less: accrual of dividend on series B 805,742     —  
Less: other —     —  
Net loss available to common shareholders $ (24,102,700 )   $ (5,546,243 )
       
  Earnings per common share      
Basic $ (0.86 )   $ (0.23 )
Diluted $ (0.86 )   $ (0.23 )
Shares used in computing earnings per share      
Basic 28,181,096     23,807,780  
Diluted 28,181,096     23,807,780  

 

 

 

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
  2015   2014
Cash flows from operating activities      
Net loss $ (22,516,889 )   $ (5,871,642 )
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:      
Stock-based compensation expense 423,911     332,266  
Depreciation and amortization 6,636,593     4,277,843  
Dividends in kind for preferred Series B stock (679,289 )   —  
Accretion for preferred Series B stock (805,742 )   —  
Bargain purchase gain —     (6,948,686 )
Deferred federal income tax 5,306,000     —  
Inventory impairment charge —     467,911  
Net decrease in fair value of derivative liability 1,548,604     —  
Reduction in contingent consideration (6,069,000 )   (5,248,588 )
Impairment of goodwill 4,922,353     —  
Changes in operating assets and liabilities:      
Accounts receivable 1,769,725     714,698  
Allowance for doubtful accounts 2,810,146     2,013,167  
Inventory 9,072,305     1,891,932  
Prepaid expenses (122,135 )   (12,586 )
Costs in excess of billings 779,285     (779,285 )
Accounts payable and accrued expenses (8,539,803 )   7,255,722  
Deferred revenue (139,319 )   463,210  
Dividends payable 376,571     —  
Other deposits —     (81,450 )
Net cash used in operating activities (5,226,684 )   (1,525,488 )
Cash flows from investing activities      
 Note receivable (500,000 )   (3,150,000 )
 Payments on capital leases (172,654 )   —  
 Net proceeds from the sale of assets 92,271     —  
 Acquisition, net (487,076 )   (31,114,140 )
 Purchase of fixed assets (2,236,637 )   (5,940,890 )
 Other (17 )   —  
Net cash used in investing activities (3,304,113 )   (40,205,030 )
Cash flows from financing activities      
 Line of credit (payments) proceeds, net 1,744,122     —  
 Proceeds from exercise of common stock options and warrants 11,306     370,337  
 Note receivable payments received 1,000,000     —  
 Proceeds from sale of stock —     17,315,143  
 Proceeds from preferred Series B stock/share offering 17,637,947     —  
 Payments on contingent consideration —     (136,662 )
 Proceeds from notes payable 2,305,277     41,309,433  
 Payments made on notes payable (19,419,567 )   (11,337,128 )
 Debt issuance cost —     (2,452,157 )
   Net cash provided by financing activities 3,279,085     45,068,966  
Net change in cash and cash equivalents (5,251,712 )   3,338,448  
Cash and cash equivalents at beginning of the period 6,017,076     2,678,628  
Cash and cash equivalents at end of period $ 765,364     $ 6,017,076  
       
SUPPLEMENTAL INFORMATION      
Cash paid for interest during the year $ 3,563,145     $ 2,636,690  
Cash paid for income taxes during the year $ —     $ 122,763  
       
NON-CASH INVESTING AND FINANCING TRANSACTIONS      
Conversion of Series A Preferred Stock into common stock $ 17     $ 689  
Conversion of Series B Preferred Stock into common stock $ 100,795     $ —  
Series B Preferred Stock - dividends accrued for payment in 2016 $ 376,570     $ —  
Series B Preferred Stock - dividends paid by stock in kind $ 402,740     $ —  
Series B Preferred Stock - beneficial conversion feature $ 5,682,741     $ —  
Series B Preferred Stock - fair value of warrants issued with Series B Stock $ 1,548,604     $ —  
Issued 2,701,601 shares of stock to purchase Heartland and Omega $ —     $ 9,004,000  
Accretion of discount on Series B Preferred Stock $ 1,585,843     $ —  
Common shares issued as payment $ 200,000     $ —  

 

  

 

 

 

Vertex Energy Inc. Reports