Vertex Energy Reports A 53% Increase In Gross Profit For Third Quarter 2013 Compared To Third Quarter 2012

Vertex Energy, Inc. (NASDAQ: VTNR), an environmental services company that recycles industrial waste streams and off-specification commercial chemical products, today announced its financial results for the quarter and nine months ended September 30, 2013.

Financial highlights for the quarter include:
  • Gross profit increased by approximately 53% relative to the same quarter last year to $4.88 million;
  • Revenue increased by 29% relative to the third quarter of last year to $46.8 million;
  • Overall volumes of product sold increased by 19% for the third quarter of 2013 versus the third quarter of 2012;
  • Our overall per barrel margin increased by 29% relative to the same quarter a year ago;
  • Income before income taxes improved by 486% for the quarter; and
  • Net income improved by 11% relative to the third quarter of last year to $2.33 million.

Benjamin P. Cowart, Chief Executive Officer of Vertex Energy said, “We are continuing to see growth in our gross margin and overall sales volumes year over year. Despite challenging market conditions relative to a year ago, we were able to grow both the top line and our net income during the third quarter of 2013 as benefits from our acquisition last year continue to take hold.”

Mr. Cowart continued, “We continue to pursue both organic growth such as our recent entry into the Dallas-Fort Worth used oil collection market as well as growth through acquisition as evidenced by our recent transaction with E-Source.” Mr. Cowart concluded, “We believe that our progress through three quarters of 2013, as well as recent efforts to expand our customer base for finished product and our overall collection footprint, will result in a year-end revenue figure of between $140 million and $150 million, net income to be greater than $5 million, with fully diluted earnings per share in excess of $0.30.”

CONFERENCE CALL

As previously announced, management of Vertex Energy will host a conference call today, November 6 th, at 10:00 a.m. EDT. Those who wish to participate in the conference call may telephone 877-869-3847 from the U.S. International callers may telephone 201-689-8261, 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 completion of the call until November 30, 2013, 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 #: 423349.

ABOUT VERTEX ENERGY, INC.

Vertex Energy, Inc. (NASDAQ: VTNR), is a leading environmental services company that recycles industrial waste streams and off-specification commercial chemical products. Its primary focus is recycling used motor oil and other petroleum by-product streams. Vertex 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 the company’s facility, which 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
(Unaudited)
 
    September 30,     December 31,
2013 2012
ASSETS
 
Current assets
Cash and cash equivalents $ 531,226 $ 807,940
Accounts receivable, net 7,955,601 7,160,780
Inventory 8,208,121 5,870,121
Prepaid expenses   571,392   492,467
Total current assets   17,266,340   14,331,308
 
Noncurrent assets
Fixed assets, net 11,963,374 11,617,368
Intangible assets, net 15,036,770 15,934,724
Goodwill 3,515,977 3,515,977
Deferred federal income taxes   3,863,000   3,703,000
Total noncurrent assets   34,379,121   34,771,069
 
TOTAL ASSETS $ 51,645,461 $ 49,102,377
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities
Accounts payable and accrued expenses $ 12,385,290 $ 8,869,234
Line of credit 3,500,000 -
Current portion of long-term debt   1,700,000   1,749,329
Total current liabilities   17,585,290   10,618,563
 
Long-term liabilities
Long-term debt 4,958,333 6,281,457
Contingent consideration 2,861,000 4,711,000
Line of credit - 6,750,000
Deferred federal income tax   357,000   341,000
Total liabilities   25,761,623   28,702,020
 
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 1,323,837 and 1,512,891 issued and outstanding at September 30, 2013 and December 31, 2012, respectively

1,324

1,513

Common stock, $0.001 par value per share; 750,000,000 shares authorized; 17,804,724 and 16,965,464 issued and outstanding at September 30, 2013 and December 31, 2012, respectively

 

17,805

 

16,965
Additional paid-in capital 10,897,515 10,719,345
Retained earnings   14,967,194   9,662,534
Total stockholders’ equity   25,883,838   20,400,357
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 51,645,461 $ 49,102,377
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
       
Three Months Ended Nine Months Ended
September 30, September 30,
2013     2012 2013     2012
 
Revenues $ 46,830,647 $ 36,195,570 $ 115,196,850 $ 102,316,702
 
Cost of revenues   41,945,879     33,011,934     104,287,660     95,497,261  
 
Gross profit 4,884,768 3,183,636 10,909,190 6,819,441
 

Reduction of contingent liability
- - (1,850,000 ) -
 

Selling, general and administrative expenses (exclusive of acquisition related expenses)
2,495,748

1,610,146
7,129,673 3,724,120

Acquisition related expenses
 

-
   

1,154,612
   

-
   

1,154,612
 
 

Total selling, general and administrative expenses
  2,495,748    

2,764,758
    7,129,673     4,878,732  
 
 
Income from operations 2,389,020 418,878 5,629,517 1,940,709
 
Other income (expense)
Other income - 949 - 1,582
Other expense (3,949 ) - (31,690 ) -
Interest expense   (95,488 )   (28,972 )   (314,627 )   (29,016 )
Total other (expense)   (99,437 )   (28,023 )   (346,317 )   (27,434 )
 
Income before income tax 2,289,583 390,855 5,283,200 1,913,275
 
Income tax benefit   40,211     1,714,813     21,460     1,607,641  
 
Net income $ 2,329,794   $ 2,105,668   $ 5,304,660   $ 3,520,916  
 
Earnings per common share
Basic $ 0.13   $ 0.17   $ 0.30   $ 0.35  
Diluted $ 0.12   $ 0.13   $ 0.27   $ 0.25  
 
Shares used in computing earnings per share
Basic   17,715,786     12,255,372     17,402,501     10,085,206  
Diluted   19,997,257     16,484,023     19,766,263  

 
  14,358,691  
 
 

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED)
       

Nine Months Ended

September 30,

September 30,

2013

2012
 
Cash flows from operating activities

Net income

$

5,304,660
$

3,520,916

Adjustments to reconcile net income to cash provided by operating activities
Stock-based compensation expense 123,571 124,626
Depreciation and amortization 1,615,657 180,402
Deferred federal income tax (144,000 ) (1,639,000 )
Reduction of contingent liability (1,850,000 ) -
Changes in operating assets and liabilities
Accounts receivable (794,821 ) (1,073,778 )
Accounts receivable-other - (127,162 )
Accounts receivable- related parties - 2,459
Inventory (2,338,000 ) (85,658 )
Prepaid expenses (78,925 ) 23,313
Accounts payable 3,516,056 1,005,932
Accounts payable-related parties - 296,795
Deposits   -     (235,557 )
Net cash provided by operating activities   5,354,198     1,993,288  
 
Cash flows from investing activities
Purchase of intangible assets - (209,061 )
Acquisition, net (67,972 ) (1,319,015 )
Refund of asset acquisition 675,558 -
Purchase of fixed assets   (1,671,295 )   (77,232 )
Net cash used in investing activities   (1,063,709 )   (1,605,308 )
 
Cash flows from financing activities
Line of credit payments, net (3,250,000 ) -
Payments on note payable (1,372,453 ) (3,777 )
Proceeds from exercise of common stock warrants   55,250     91,625  
Net cash provided by (used in) financing activities   (4,567,203 )   87,848  
 
Net increase (decrease) in cash and cash equivalents (276,714 ) 475,828
 
Cash and cash equivalents at beginning of the period   807,940     675,188  
 
Cash and cash equivalents at end of period $ 531,226   $ 1,151,016  
 
SUPPLEMENTAL INFORMATION
Cash paid for interest during the period $ 323,956   $ 1,005  
Cash paid for income taxes during the period $ 122,001   $ 6,187  
 
NON-CASH TRANSACTIONS
Conversion of Series A Preferred Stock into common stock $ 189   $ 78  

Copyright Business Wire 2010

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