Vertex Energy, Inc. Reports Increased Net Income, Revenue And Gross Profit For The First Quarter Of 2011 Compared To The First Quarter Of 2010

Vertex Energy, Inc. (OTCBB: VTNR), a leader in the aggregation, re-refining and processing of distressed petroleum streams such as used oil, transmix, fuel oils and off-specification commercial chemical products, today announced its financial results for the first quarter ended Mach 31, 2011.

Financial highlights for the first quarter of 2011 include:
  • Revenue for the quarter increased 53% to $20.3 million compared to $13.3 million for the first quarter of 2010;
  • Gross profit increased 121% to $2.3 million compared with $1.0 million for the first quarter of 2010;
  • Net income improved to $1.2 million compared to $270,000 in the first quarter of 2010;
  • Earnings per share increased to $0.09 per fully diluted share, compared with $0.02 per diluted share in the first quarter of 2010;
  • Overall volumes increased 20% compared to Q1 2010; and
  • Gross margin per barrel handled increased by 84% relative to the same quarter last year.

Benjamin P. Cowart, Chief Executive Officer of Vertex Energy said, “The strong results of the first quarter of 2011 were the result of the efforts we made over the past two years to strengthen our operations, including our investment in our patent-pending Thermal-Chemical Extraction Process (“TCEP”). We also increased our volumes through aggressively acquiring the supply of raw materials. Our net income for the quarter, which was $1.2 million, was nearly equal to our full year 2010 net income, and was enabled through improved revenue and gross margins in all of our business units relative to the first quarter of 2010.”

Mr. Cowart continued, “TCEP accounted for nearly 42% of our revenue during the first quarter of 2011. TCEP allows us to process used oil into a refining feedstock or diesel replacement that can be used in all grades of fuel oil. We believe that the combination of our used oil aggregating capabilities, a traditional strength of the company, and the TCEP technology, gives us a competitive advantage in the market by allowing us to capture higher margins by processing the used oil that we aggregate into a more valuable product that is sold into an extremely large fuel market. We believe that the demand for the TCEP finished product is evidenced by the fact that our entire finished product volume has been contracted for sale.”

Mr. Cowart concluded, “We believe that the first quarter of 2011 marks a breakout period for Vertex Energy which lays the groundwork for further growth for the rest of the year. Our efforts for the remainder of 2011 will be focused on making further enhancements to TCEP and driving increased margins in our other business lines. We also expect to continue to evaluate new ways to capitalize on our competitive advantage in aggregating distressed hydrocarbon feedstock streams by analyzing other re-refining technologies that we believe could contribute to our business as well as reviewing potential acquisitions that could enhance our competitive positioning within the industry.”

CONFERENCE CALL

As previously announced, Management of Vertex Energy will host a conference call today at 10:00 a.m. EDT. Those who wish to participate in the conference call may telephone 877-407-4019 from the U.S.; international callers may telephone 201-689-8337, approximately 15 minutes before the call. A digital replay will be available by telephone approximately two hours after the call’s completion for two weeks, and may be accessed by dialing 877-660-6853 from the U.S. or 201-612-7415 for international callers, Acct # 380; Replay ID# 372420.

ABOUT VERTEX ENERGY, INC.

Vertex Energy, Inc. (OTCBB: VTNR) is a leader in the aggregation, re-refining and processing of distressed petroleum streams such as used oil, transmix, fuel oils and off-specification commercial chemical products thereby reducing the United States’ reliance on foreign crude oil. Vertex’s focus, as a participant in the alternative energy and environmentally friendly investment sectors, is on creating increased value in the products it manages and produces through a variety of strategies and technologies that facilitate the re-refining of used oil and off specification commercial chemical products into higher value commodities. By creating higher value products from distressed hydrocarbon streams, the Company is positioned to produce both financial and environmental benefits. Vertex is based in Houston, Texas with offices in Georgia and California. More information on the Company can be found at  www.vertexenergy.com.

This press release may contain forward-looking statements, including information about management’s view of Vertex’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, 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 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’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 also takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex.
 
VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
 
 

   March 31,   
  December 31,
2011 2010
(unaudited)
ASSETS
 
Current assets
Cash and cash equivalents $ 1,207,465 $ 744,313
Accounts receivable, net 1,954,047 1,482,510
Accounts receivable- related party 10,361 -
Inventory 5,825,120 3,901,781
Prepaid expenses 234,870 100,485
Total current assets 9,231,863 6,229,089
 
Noncurrent assets
Licensing agreement, net 1,873,028 1,833,966
Fixed assets, net 73,274 76,290
Total noncurrent assets 1,946,302 1,910,256
 
TOTAL ASSETS $ 11,178,165 $ 8,139,345
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities
Accounts payable and accrued expenses $ 5,757,110 $ 4,593,199
Accounts payable-related party 1,048,670 407,273
Total current liabilities 6,805,780 5,000,472
 
Long-term liabilities
Mandatorily redeemable preferred stock, Series B, $.001 par value, 2,000,000 shares authorized, 600,000 issued and outstanding as of March 31, 2011 and December 31, 2010 (includes $150,000 to a related party) 600,000 600,000
Total liabilities 7,405,780 5,600,472
 
Commitments and contingencies
 
STOCKHOLDERS’ EQUITY
 
Preferred stock, $0.001 par value per share:
50,000,000 shares authorized

Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 4,634,396 and 4,675,716 issued and outstanding at March 31, 2011 and December 31, 2010 respectively

4,635

4,676

Common stock, $0.001 par value per share; 750,000,000 shares authorized; 8,452,169 and 8,370,849 issued and outstanding at March 31, 2011 and December 31, 2010 respectively

8,452

8,371
Additional paid-in capital 2,312,449 2,275,074
Retained earnings 1,446,849 250,752
Total stockholders’ equity 3,772,385 2,538,873
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,178,165 $ 8,139,345
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(UNAUDITED)
   
 
March 31, March 31,
2011 2010
 
Revenues $ 20,290,925 $ 13,273,080
Revenues-related parties   17,978     -  
20,308,903 13,273,080

 
Cost of revenues   18,038,007  

 
  12,245,250  
 
Gross profit 2,270,896 1,027,830
 
Selling, general and administrative expenses   1,026,055     751,173  
 
Income from operations 1,244,841 276,657
 
Other income (expense)
Other income - 30,000
Interest expense   (29,041 )   (36,646 )
Total other income (expense)   (29,041 )   (6,646 )
 
Income before income tax 1,215,800 270,011
 
Income tax expense   (19,703 )   -  
 
Net income $ 1,196,097   $ 270,011  
 
 
Earnings per common share
Basic $ 0.14   $ 0.03  
Diluted $ 0.09   $ 0.02  
 
Shares used in computing earnings per share
Basic   8,440,064     8,254,256  
Diluted   13,935,781     13,726,756  
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(unaudited)
 
 
March 31,

2011
  March 31,

2010
 
 
Cash flows operating activities
Net income $ 1,196,097 $ 270,011
Adjustments to reconcile net income to cash
used by operating activities
Stock based compensation expense 33,415 46,848
Depreciation and amortization 37,305 33,448
Changes in assets and liabilities
Accounts receivable (471,537 ) (486,702 )
Accounts receivable- related parties (10,361 ) -
Inventory (1,923,339 ) 382,476
Prepaid expenses (134,385 ) 12,810
Accounts payable 1,163,911 (1,439,143 )
Accounts payable – related parties   641,397     90,133  
Net cash provided (used) by operating activities   532,503     (1,090,119 )
 
Cash flows from investing activities
Purchase of intangible assets (73,351 ) (149,956 )
Purchase of fixed assets   -     (2,716 )
Net cash used by investing activities   (73,351 )   (152,672 )
 
Cash flows from financing activities
Proceeds from sale of Preferred “B” shares - 100,000
Proceeds from exercise of common stock warrants 4,000 -
Line of credit proceeds, net - 1,100,000
Payments on due to related party balance   -     (400,000 )
Net cash provided by financing activities   4,000     800,000  
 
Net increase in cash and cash equivalents 463,152 (442,791 )
 
Cash and cash equivalents at beginning of the period   744,313     514,136  
 
Cash and cash equivalents at end of period $ 1,207,465   $ 71,345  
 
SUPPLEMENTAL INFORMATION
Cash paid for interest during the period $ 31,914   $ 33,443  
Cash paid for income taxes during the period $ 12,000   $ -  
 
NON-CASH TRANSACTIONS
Conversion of Series A Preferred Stock into common shares $ 41   $ -  

Copyright Business Wire 2010

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