Vertex Energy Reports A 247% Increase In Operating Income For Fiscal 2011 Compared To 2010

Vertex Energy, Inc. (OTCBB: VTNR), an environmental services company that recycles industrial waste streams and off-specification commercial chemical products, today announced its financial results for the fourth quarter and full year ended December 31, 2011.

Financial highlights for the year include:
  • Revenue increased 89% to $109.7 million for the year ended 2011 compared with $58.1 million in 2010;
  • Gross profit increased to $8.1 million, a 90% increase over the $4.2 million reported in 2010;
  • Income from operations improved 247% to $4.0 million, compared with $1.1 million reported last year;
  • Net income improved to $5.8 million or $0.39 per fully diluted share, compared with net income of $1.2 million or $0.09 per fully diluted share in 2010. Included in net income for the 2011 year is a $1.8 million tax benefit, the majority of which is attributed to the company’s net operating losses related to the 2009 World Waste Technologies merger;
  • Company-wide sales volumes increased 26% over 2010; and
  • Total margin per barrel increased by 52% relative to 2010.

Financial highlights for the unaudited fourth quarter include:
  • Revenue increased nearly 100% to $31.3 million for the fourth quarter of 2011, compared with $15.7 million in revenue for the fourth quarter of 2010;
  • Gross profit was $1.31 million compared with $1.48 million during the fourth quarter of 2010;
  • Income from operations was $235,829 compared with $510,205 during the fourth quarter of 2010;
  • Net income was $2.1 million compared to $467,280 in last year's fourth quarter, with $1.8 million of this increase attributable to the tax benefit stemming from the net operating losses related largely to the World Waste Technologies merger; and
  • Sales volumes improved 29% in the fourth quarter of 2011 compared to the same quarter in 2010.

Benjamin P. Cowart, Chief Executive Officer of Vertex Energy said, “We had another solid year of profitable growth, and made tremendous strides in executing our business strategy. Much of our improvement came from increased production and improved operating efficiencies that we realized from our Thermal Chemical Extraction Process (“TCEP”) business as well as from increased commodity prices. Revenue from our TCEP operations improved 168% relative to last year.”

“While the fourth quarter income results were behind last year’s fourth quarter, we are entering the new year in a position of strength. We believe improvements will continue into 2012, and expect the first quarter 2012 to outperform the first quarter of 2011.” Mr. Cowart added, “For the remainder of 2012, we expect to continue to focus on making additional enhancements to the TCEP process, which would enable us to capture additional margin from used motor oil. We also anticipate evaluating new ways to capitalize on our competitive advantage in aggregating distressed hydrocarbon feedstock streams, including the analysis of other re-refining technologies that we believe could contribute to the continued growth of our business. Additionally, with increased merger and acquisition activity in our sector, we continue to actively review opportunities that will enhance our business. As part of that overall process, a subcommittee of our Board of Directors is currently evaluating and negotiating the potential acquisition of Vertex Holdings, LP, a privately held business, owned and controlled by related parties of the company, involved in oil collection and terminal operations. If consummated, this acquisition would make our company a more vertically integrated operation within the used oil sector.”

Mr. Cowart continued, “With relatively no long-term debt, significantly increased cash flow, and advantageous market conditions, we expect to report continued operating improvements in 2012. We are excited about the available opportunities in the industry and expect to actively explore acquisitions that would complement our business model, and contribute to our expected growth.”

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 webcast will also be available at:  www.vertexenergy.com.

A digital replay will be available by telephone approximately two hours after the call’s completion until April 13, 2012, and may be accessed by dialing 877-407-4019 from the U.S. or 201-689-8337 for international callers, Acct # 380; Replay ID# 391361.

ABOUT VERTEX ENERGY, INC.

Vertex Energy, Inc. (OTCBB: 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. The company 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 a facility operated by a related party that uses a proprietary Thermal Chemical Extraction Process (“TCEP”) technology. Based in Houston, Texas, Vertex Energy also has 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 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,
  2011   2010
 
ASSETS
 
Current assets
Cash and cash equivalents $ 675,188 $ 744,313
Accounts receivable, net 5,436,006 1,482,510
Accounts receivable- related party 2,459 -
Inventory 6,408,780 3,901,781
Prepaid expenses and other current assets   151,821   100,485
Total current assets   12,674,254   6,229,089
 
Noncurrent assets
Licensing agreement, net 1,929,549 1,833,966
Fixed assets, net 124,168 76,290
Deferred federal income tax   2,006,000   -
Total noncurrent assets   4,059,717   1,910,256
 
TOTAL ASSETS $ 16,733,971 $ 8,139,345
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities
Accounts payable and accrued expenses $ 6,464,193 $ 4,593,199
Accounts payable-related party 620,724 407,273
Deposits   235,557   -
Total current liabilities   7,320,474   5,000,472
 
Long-term liabilities
Mandatorily redeemable preferred stock, Series B, $.001 par value, 2,000,000 shares authorized, 0 and 600,000 issued and outstanding as of December 31, 2011 and December 31, 2010 (includes $150,000 to a related party) - 600,000
Deferred federal income tax   76,000   -
Total liabilities   7,396,474   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 4,426,639 and
4,675,716 issued and outstanding at December 31,
2011 and December 31, 2010, respectively 4,427 4,676

Common stock, $0.001 par value per share; 750,000,000 shares authorized; 9,414,926 and 8,370,849 issued and outstanding at December 31, 2011 and December 31, 2010, respectively

 

9,415

 

8,371
Additional paid-in capital 3,319,388 2,275,074
Retained earnings   6,004,267   250,752
Total stockholders’ equity   9,337,497   2,538,873
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 16,733,971 $ 8,139,345
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 2011 AND 2010
     
 
 
 
  2011     2010  
 
Revenues $ 109,722,279 $ 58,135,407
Revenues-related parties   17,978     5,578  
109,740,257 58,140,985
 
Cost of revenues   101,666,187     53,901,041  
 
Gross profit 8,074,070 4,239,944
 
 
Selling, general and administrative expenses   4,099,682     3,093,307  
 
Income from operations   3,974,388     1,146,637  
 
Other income (expense)
Other income - 219,333
Interest expense   (62,686 )   (116,747 )
Total other income (expense)   (62,686 )   102,586  
 
Income before income taxes 3,911,702 1,249,223
 
Income tax (expense) benefit   1,841,813     (20,797 )
 
Net income (loss) $ 5,753,515   $ 1,228,426  
 
 
Earnings per common share
Basic $ 0.65   $ 0.15  
Diluted $ 0.39   $ 0.09  
 
Shares used in computing earnings per share
Basic   8,884,681     8,294,436  
Diluted   14,775,339     14,128,864  
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2011 AND 2010
 
   
 
 

2011
       

2010
 
 
 
Cash flows operating activities
Net income $ 5,753,515 $ 1,228,426
Adjustments to reconcile net income to cash
provided by (used in) operating activities
Stock based compensation expense 138,859 182,321
Depreciation and amortization 161,048 145,977
Deferred federal income tax (1,930,000 ) -
Changes in assets and liabilities
Accounts receivable (3,953,496 ) 705,913
Accounts receivable- related parties (2,459 ) -
Inventory (2,506,999 ) (922,898 )
Prepaid expenses and other current assets (51,336 ) 15,056
Accounts payable and accrued expenses 1,870,994 (459,358 )
Accounts payable-related parties 213,451 (120,459 )
Other deposits   235,557     -  
Net cash provided by (used in) operating activities   (70,866 )   774,978  
 
Cash flows from investing activities
Purchase of intangible assets (241,454 ) (288,015 )
Purchase of fixed assets   (63,055 )   (17,214 )
Net cash used in investing activities   (304,509 )   (305,229 )
 
Cash flows from financing activities
Proceeds from sale of Series B Preferred “B” stock - 600,000
Proceeds from exercise of common stock warrants 306,250 2,283
Payments on due to related party balance   -     (841,855 )
Net cash provided by (used in) financing activities   306,250     (239,572 )
 
Net increase in cash and cash equivalents (69,125 ) 230,177
 
Cash and cash equivalents at beginning of the period   744,313     514,136  
 
Cash and cash equivalents at end of period $ 675,188   $ 744,313  
 
SUPPLEMENTAL INFORMATION
Cash paid for interest during the period $ 80,756   $ 95,874  
Cash paid for income taxes during the period $ 107,000   $ 10,500  
 
NON-CASH TRANSACTIONS
Conversion of Series A Preferred Stock into common stock $ 249   $ -  

Conversion of Series B Preferred Stock into common stock

$

600,000
 

$

-
 
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOURTH QUARTER 2011 AND 2010
(unaudited)
   
 
    2011     2010
 
Revenues $ 31,339,169 $ 15,706,666
 
Cost of revenues   30,034,121     14,221,862  
 
Gross profit 1,305,048 1,484,804
 

Selling, general and

administrative expenses
 

1,069,219
   

974,599
 
 
Income from operations 235,829 510,205
 
Interest expense   (4,875 )   (27,628 )
 
Income before income tax 230,954 482,577
 
Income tax expense   1,879,000     (15,297 )
 
Net income $ 2,109,954   $ 467,280  
 

Copyright Business Wire 2010

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