Vertex Energy Reports a 20% Increase in Gross Profit for First Quarter 2013 Compared to First Quarte

Vertex Energy Reports a 20% Increase in Gross Profit for First Quarter 2013 Compared to First Quarter 2012

10% Increase in Output Volume and 9% Per Barrel Margin Improvement for the Quarter

—Conference Call Today at 10:00 A.M. EDT—


HOUSTON--(BUSINESS WIRE)-- 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 ended March 31, 2013.

Financial highlights for the year include:

  • Gross profit increased 20% from the first quarter of 2012 to $3.47 million for the quarter ended March 31, 2013;

  • Company-wide product volume sales increased 10% over Q1 2012;

  • Overall per barrel margin increased by 9% relative to the first quarter of last year.

Benjamin P. Cowart, Chief Executive Officer of Vertex Energy said, "We are now seeing the benefits of our recent acquisition in the form of improved margins. Our Black Oil Division experienced a 60% increase in gross profit versus the same quarter a year ago, while our TCEP business experienced an 80% improvement in gross profit relative to Q1 2012. Additionally, we are showing improvements in reducing our SG&A expenses quarter over quarter as we were able to reduce that expense line by 10.2% relative to the fourth quarter of 2012."

"We are optimistic regarding our business as we move further into 2013 as we have recently implemented a material process change at TCEP that we believe will improve both operating efficiency and product quality," Mr. Cowart added. "We anticipate the results of this important upgrade at TCEP to become evident in the third quarter and beyond."

Mr. Cowart continued, "In addition to increasing the performance of TCEP, we are continuing to evaluate acquisition possibilities that are both accretive to the company and allow us to secure greater volumes of feedstock at reduced prices." Mr. Cowart concluded, "Our continued development of used oil to fuel opportunities will be another area of growth for the company in 2013."

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 completion of the call until May 31, 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 #: 413045.

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)

March 31,

December 31,

2013

2012

ASSETS

Current assets

Cash and cash equivalents

$

1,316,831

$

807,940

Accounts receivable, net

7,383,050

7,160,780

Inventory

5,907,992

5,870,121

Prepaid expenses

519,198

492,467

Total current assets

15,127,071

14,331,308

Noncurrent assets

Fixed assets, net

11,279,296

11,617,368

Intangible assets, net

15,680,721

15,934,724

Goodwill

3,515,977

3,515,977

Deferred federal income taxes

3,735,000

3,703,000

Total noncurrent assets

34,210,994

34,771,069

TOTAL ASSETS

$

49,338,065

$

49,102,377

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

$

10,641,158

$

8,869,234

Current portion of long-term debt

1,722,400

1,749,329

Total current liabilities

12,363,558

10,618,563

Long-term liabilities

Long-term debt

5,834,651

6,281,457

Contingent consideration

4,744,850

4,711,000

Line of credit

4,500,000

6,750,000

Deferred federal income tax

363,000

341,000

Total liabilities

27,806,059

28,702,020

Commitments and contingencies

STOCKHOLDERS' EQUITY

Preferred stock, $0.001 par value per share:

50,000,000 shares authorized

Series B Preferred stock, $0.001 par value, 2,000,000 authorized

Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 1,428,923 and 1,512,891 issued and outstanding at March 31, 2013 and December 31, 2012, respectively

1,429

1,513

Common stock, $0.001 par value per share; 750,000,000 shares authorized; 17,176,001 and 16,965,464 issued and outstanding at March 31, 2013 and December 31, 2012, respectively

17,176

16,965

Additional paid-in capital

10,767,272

10,719,345

Retained earnings

10,746,129

9,662,534

Total stockholders' equity

21,532,006

20,400,357

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

49,338,065

$

49,102,377

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(UNAUDITED)

March 31,

2013

March 31,

2012

Revenues

$

33,254,801

$

34,827,939

Cost of revenues

29,785,043

31,942,875

Gross profit

3,469,758

2,885,064

Selling, general and administrative expenses

2,221,492

1,194,747

Acquisition related expenses

36,592

-

Total selling, general and administrative expenses

2,258,084

1,194,747

Income from operations

1,211,674

1,690,317

Other income (expense)

Other income

25,289

-

Other expense

(40,726

)

-

Interest expense

(106,140

)

(44

)

Total other income (expense)

(121,577

)

(44

)

Income before income taxes

1,090,097

1,690,273

Income tax expense

(6,502

)

(116,000

)

Net income

$

1,083,595

$

1,574,273

Earnings per common share

Basic

$

0.06

$

0.17

Diluted

$

0.05

$

0.10

Shares used in computing earnings per common share

Basic

17,079,242

9,434,094

Diluted

20,139,182

15,473,017

VERTEX ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(UNAUDITED)

Three Months Ended

March 31,

2013

March 31,

2012

Cash flows from operating activities

Net income

$

1,083,595

$

1,574,273

Adjustments to reconcile net income to cash provided by operating activities

Stock-based compensation expense

48,054

44,441

Depreciation and amortization

532,718

40,913

Deferred federal income tax

(10,000

)

98,000

Changes in assets and liabilities

Accounts receivable

(222,270

)

(565,497

)

Accounts receivable- related parties

-

798

Inventory

(37,871

)

(549,934

)

Prepaid expenses

(26,731

)

27,775

Accounts payable

1,771,924

1,926,954

Accounts payable-related parties

-

606,588

Deposits

-

444,383

Net cash provided by operating activities

3,139,419

3,648,694

Cash flows from investing activities

Purchase of intangible assets

-

(59,519

)

Acquisition, net

(34,122

)

-

Refund of asset acquisition

675,558

-

Purchase of fixed assets

(548,229

)

(2,091

)

Net cash provided by (used in) investing activities

93,207

(61,610

)

Cash flows from financing activities

Line of credit payments, net

(2,250,000

)

Payments on note payable

(473,735

)

Proceeds from exercise of common stock warrants

-

34,187

Net cash provided by financing activities

(2,723,735

)

34,187

Net increase in cash and cash equivalents