VTNR Vertex Energy Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM  8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): January 23, 2024

 

VERTEX ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada	001-11476	94-3439569
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

1331 Gemini Street Suite 250 Houston, Texas	77058
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (866) 660-8156

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share	VTNR	The NASDAQ Stock Market LLC (Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On January 23, 2024, Vertex Energy, Inc. (the “Company”) issued a press release providing, among other things, an operational update for the fourth quarter of 2023. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated into this Item 7.01 by reference.

 

The information contained in, or incorporated into, this Item 7.01 of this Current Report, is furnished under Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act regardless of any general incorporation language in such filings.

 

Forward-Looking Statements

 

This Current Report on Form 8-K, including the press release furnished as Exhibit 99.1, to this Current Report on Form 8-K, contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and assumptions. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other filings with the Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements, including those referenced in the press release. Accordingly, readers should not place undue reliance on any forward-looking statements. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings with the SEC and available at www.sec.gov and in the “Investor Relations–SEC Filings” section of the Company’s website at www.vertexenergy.com. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release dated January 23, 2024
104		Inline XBRL for the cover page of this Current Report on Form 8-K

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	VERTEX ENERGY, INC.
Date: January 23, 2024	By:	/s/ Chris Carlson
		Chris Carlson
		Chief Financial Officer

 

 

 

Vertex Energy, Inc. 8-K

Exhibit 99.1

 

 

 

Vertex Energy Provides Operational Update for Fourth Quarter 2023

Conventional throughput volumes anticipated at approximately 67,000 bpd, vs. previously forecasted 68,000-71,000 bpd

Expected fourth quarter finished product yield of 65%-67%, in line with previously forecasted range of 64%-68%

Renewable throughput volumes anticipated at approximately 3,900 bpd, at the low end of previously forecasted 4,000-6,000 bpd

Average fourth quarter crack spreads on finished refined products declined 40% vs. third quarter average levels.

 

HOUSTON, TX / BUSINESSWIRE / January 23, 2024 / Vertex Energy, Inc. (NASDAQ: VTNR) (“Vertex” or the “Company”), a leading specialty refiner and marketer of high-quality refined products, today provided an update to its financial and operational outlook for the fourth quarter of 2023, and announced the timing of its Fourth Quarter and Full-Year 2023 Earnings Release and Conference Call.

Fourth Quarter Conventional Throughput Volumes Slightly Below Prior Forecasts

Reported throughput volumes at the Company’s Mobile, Alabama Refinery (the “Mobile Refinery”) for the fourth quarter of 2023 are expected to be approximately 67,000 barrels per day (bpd), just below management’s previous guidance. The slight reduction reflects a combined impact of a strategic curtailment in throughput in light of deteriorating market conditions during the quarter as well as the previously disclosed downtime to proactively replace an electrical transformer.

The expected yield of finished conventional fuel products such as gasoline, diesel, and jet fuel is expected to be between 65% and 67%, in line with the previously forecasted range of 64% to 68%. This reflects the ongoing benefit of the yield optimization efforts introduced in the second quarter of 2023.

Operating expenses per barrel for the fourth quarter of 2023 are expected to total between $3.75 to $3.95 per barrel, a 5.5% improvement vs. prior expectations at the mid-point. Capex is expected to be $8 - $10 million, 48.6% below expectations at the midpoint.

Key commodity price averages in local markets served by Vertex for the fourth quarter of 2023 include CBOB gasoline at $85.28 per barrel, ultra-low sulfur diesel at $112.38 per barrel, jet fuel at $111.18 per barrel, and Louisiana Light, Sweet Crude oil at $81.17 per barrel.

Renewable Diesel Volume Expected to be Below Prior Outlook

 

Vertex’s reported renewable diesel production for the fourth quarter 2023 is expected to be 3,900 barrels per day (bpd), just under the forecasted range of 4,000 to 6,000 bpd. The yield on renewable throughput volumes is expected to be approximately 96%, slightly below the previously anticipated range of 97% to 98%. 

 

 

Updated 4Q 2023 Guidance Summary

Conventional Fuels	4Q 2023
Operational:	As of 11/7/23		As of 1/22/24
Mobile Refinery Conventional Throughput Volume (Mbpd)	68 - 71		~67
Capacity Utilization	91% - 95%		88% - 90%
Production Yield Profile:
Percentage Finished Products1	64% - 68%		65% - 67%
Intermediate & Other Products2	36% - 32%		35% - 33%
Renewable Fuels	4Q 2023
Operational:	As of 11/7/23		As of 1/22/24
Mobile Refinery Renewable Throughput Volume (Mbpd)	4 - 6		~4
Capacity Utilization	50% - 75%		48%-50%
Production Yield	97% - 98%		95%-97%
Yield Loss	3% - 2%		3%-5%
Consolidated	4Q 2023
Operational:	As of 11/7/23		As of 1/22/24
Mobile Refinery Total Throughput Volume (Mbpd)	72 - 77		~71
Capacity Utilization	87% - 93%		85% - 88%
Financial Guidance:
Direct Operating Expense ($/bbl)	$3.95 - $4.20		$3.75 - $3.95
Capital Expenditures ($/MM)	$15 - $20		$8 - $10

 

Renewable Diesel Feedstock Supply Strategy Update

 

Vertex is pleased to report that the Company’s feedstock optimization strategy is progressing as expected. As previously communicated, the Company expected to receive LCFS credits in the fourth quarter of 2023 for its renewable diesel production volumes produced in the third and fourth quarters of 2023. The initial LCFS credits reflect a temporary carbon intensity (“CI”) score and amounted to $9.5 million in the period. Upon receiving its provisional CI score, expected sometime in the first or second quarter of 2024, Vertex anticipates the per-barrel LCFS credits to improve materially over temporary CI values.

 

Management Commentary

 

Benjamin P. Cowart, President and CEO of Vertex, stated, “The fourth quarter of 2023 presented us with deteriorating crack spreads, leading us to adjust our throughput rates in line with our economic-driven operational strategy.” Mr. Cowart continued, “Simultaneously, we opted to improve our liquidity position by further leveraging cash invested in hard assets for the Renewable Diesel project through our existing term loan partner, achieving approximately $80 million in liquidity as of December 31st, 2023. As we step into the first quarter of 2024, we're observing an improvement in crack spreads, combined with increased margin efficiency, which has led us to opportunistically ramp our production rates for conventional fuels and renewable diesel, proactively aligning increased capacity utilization with evolving market conditions.”

 

 

 

ABOUT VERTEX ENERGY

Vertex Energy is a leading energy transition company that specializes in producing both renewable and conventional fuels. The Company’s innovative solutions are designed to enhance the performance of its customers and partners while also prioritizing sustainability, safety, and operational excellence. With a commitment to providing superior products and services, Vertex Energy is dedicated to shaping the future of the energy industry.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. The important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the Company’s expected results of operations for the fourth quarter of 2023; the review and evaluation of potential joint ventures, divestitures, acquisitions, mergers, business combinations, or other strategic transactions, the outcome of such review, and the impact on any such transactions, or the review thereof, on shareholder value; the process by which the Company engages in evaluation of strategic transactions; the Company’s ability to identify potential partners; the outcome of potential future strategic transactions and the terms thereof; the future production of the Company’s Mobile Refinery; anticipated and unforeseen events which could reduce future production at the refinery or delay future capital projects, and changes in commodity and credit values; throughput volumes, production rates, yields, operating expenses and capital expenditures at the Mobile Refinery; the timing of, and outcome of, the evaluation and associated carbon intensity scoring of the Company’s feedstock blends by officials in the state of California; and the amounts thereof; the need for additional capital in the future, including, but not limited to, in order to complete future capital projects and satisfy liabilities, the Company’s ability to raise such capital in the future, and the terms of such funding; the timing of capital projects at the Mobile Refinery and the outcome of such projects; the future production of the Mobile Refinery, including but not limited to, renewable diesel production; estimated and actual production and costs associated with the renewable diesel capital project; estimated revenues, margins and expenses, over the course of the agreement with Idemitsu; anticipated and unforeseen events which could reduce future production at the Mobile Refinery or delay planned and future capital projects; changes in commodity and credits values; certain early termination rights associated with third party agreements and conditions precedent to such agreements; certain mandatory redemption provisions of the outstanding senior convertible notes, the conversion rights associated therewith, and dilution caused by conversions and/or the exchanges of convertible notes; the Company’s ability to comply with required covenants under outstanding senior notes and a term loan and to pay amounts due under such senior notes and term loan, including interest and other amounts due thereunder; the ability of the Company to retain and hire key personnel; the level of competition in the Company’s industry and its ability to compete; the Company’s

 

 

ability to respond to changes in its industry; the loss of key personnel or failure to attract, integrate and retain additional personnel; the Company’s ability to protect intellectual property and not infringe on others’ intellectual property; the Company’s ability to scale its business; the Company’s ability to maintain supplier relationships and obtain adequate supplies of feedstocks; the Company’s ability to obtain and retain customers; the Company’s ability to produce products at competitive rates; the Company’s ability to execute its business strategy in a very competitive environment; trends in, and the market for, the price of oil and gas and alternative energy sources; the impact of inflation on margins and costs; the volatile nature of the prices for oil and gas caused by supply and demand, including volatility caused by the ongoing Ukraine/Russia conflict and/or the Israel/Hamas conflict, changes in interest rates and inflation, and potential recessions; the Company’s ability to maintain relationships with partners; the outcome of pending and potential future litigation, judgments and settlements; rules and regulations making the Company’s operations more costly or restrictive; volatility in the market price of compliance credits (primarily Renewable Identification Numbers (RINs) needed to comply with the Renewable Fuel Standard (“RFS”)) under renewable and low-carbon fuel programs and emission credits needed under other environmental emissions programs, the requirement for the Company to purchase RINs in the secondary market to the extent it does not generate sufficient RINs internally, liabilities associated therewith and the timing, funding and costs of such required purchases, if any; changes in environmental and other laws and regulations and risks associated with such laws and regulations; economic downturns both in the United States and globally, changes in inflation and interest rates, increased costs of borrowing associated therewith and potential declines in the availability of such funding; risk of increased regulation of the Company’s operations and products; disruptions in the infrastructure that the Company and its partners rely on; interruptions at the Company’s facilities; unexpected and expected changes in the Company’s anticipated capital expenditures resulting from unforeseen and expected required maintenance, repairs, or upgrades; the Company’s ability to acquire and construct new facilities; the Company’s ability to effectively manage growth; decreases in global demand for, and the price of, oil, due to inflation, recessions or other reasons, including declines in economic activity or global conflicts; expected and unexpected downtime at the Company’s facilities; the Company’s level of indebtedness, which could affect its ability to fulfill its obligations, impede the implementation of its strategy, and expose the Company’s interest rate risk; dependence on third party transportation services and pipelines; risks related to obtaining required crude oil supplies, and the costs of such supplies; counterparty credit and performance risk; unanticipated problems at, or downtime effecting, the Company’s facilities and those operated by third parties; risks relating to the Company’s hedging activities or lack of hedging activities; and risks relating to planned and future divestitures, asset sales, joint ventures and acquisitions.

Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly-filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. 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 takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

PRELIMINARY FINANCIAL AND OPERATIONAL DATA

The financial and operational data for the three months ended December 31, 2023, contained in this release are preliminary in nature. The Company’s management has prepared the preliminary financial and operational data contained in this release based on the most current information available to management. The Company’s normal closing and financial reporting processes with respect to its financial and operational data for the three months ended December 31, 2023, have not been fully completed. This preliminary financial and operational data has been prepared by, and is the responsibility of, the Company’s management. Neither the Company’s independent accountants, nor any other independent accounting firm, has expressed an opinion or any other form of assurance with respect thereto. As a result, the Company’s actual financial and operational results for the three months ended December 31, 2023, could be different from the preliminary financial and operational data contained herein, and any differences could be material. The Company has prepared these estimates on a basis materially consistent with its historical financial results and in good faith based upon its internal reporting as of and for the three months ended December 31, 2023. This release is not intended to be a comprehensive statement of financial results for this period. The results of operations for an interim period may not give a true indication of the results to be expected for a full year or any future period.

 

INVESTOR CONTACT

John Ragozzino Jr., CFA (ICR)

IR@vertexenergy.com

 

v3.23.4

Cover	Jan. 23, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 23, 2024
Entity File Number	001-11476
Entity Registrant Name	VERTEX ENERGY, INC.
Entity Central Index Key	0000890447
Entity Tax Identification Number	94-3439569
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	1331 Gemini Street
Entity Address, Address Line Two	Suite 250
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77058
City Area Code	(866)
Local Phone Number	660-8156
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock,
Trading Symbol	VTNR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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