Vertex Energy Announces Third Quarter 2023 Results

Vertex Energy, Inc. (NASDAQ: VTNR) (“Vertex” or the “Company”), a leading specialty refiner and marketer of high-quality refined products, today announced its financial results for the third quarter ended September 30, 2023.

The Company will host a conference call to discuss third quarter 2023 results today, at 8:30 A.M. Eastern Time. Details regarding the conference call are included at the end of this release.

THIRD QUARTER 2023 HIGHLIGHTS

Reported net income attributable to common shareholders of $19.8 million, or $0.17 per fully-diluted share
Reported Adjusted EBITDA of $51.5 million
Continued safe operation of the Company’s Mobile, Alabama refinery (the “Mobile Refinery”) with third quarter 2023 conventional throughput of 80,171 barrels per day (bpd), which was above prior guidance and reflecting 107% of stated facility conventional operational capacity
Renewable diesel (“RD”) throughput of 5,397 bpd, reflecting Phase One capacity utilization of 67.5%
Total cash and cash equivalents of $79.3 million, including restricted cash of $3.6 million as of September 30, 2023

Vertex reported third quarter 2023 net income attributable to common shareholders of $19.8 million, or $0.17 per fully-diluted share, versus net income attributable to common shareholders of $22.2 million, or $0.15 per fully-diluted share for the third quarter of 2022. Adjusted EBITDA (see “Non-GAAP Financial Measures and Key Performance Indicators”, below) was $51.5 million for the third quarter 2023, compared to Adjusted EBITDA of $1.6 million in the prior-year period. Financial results for the third quarter of 2023 include an inventory valuation adjustment charge in the amount of $9.4 million during the quarter.

Schedules reconciling the Company’s generally accepted accounting principles in the United States (“GAAP”) and non-GAAP financial results, including Adjusted EBITDA and certain key performance indicators, are included later in this release (see also “Non-GAAP Financial Measures and Key Performance Indicators”, below).

MANAGEMENT COMMENTARY

Mr. Benjamin P. Cowart, Vertex’s Chief Executive Officer stated, “During the third quarter, we demonstrated yet another quarter of safe, reliable operations at the Mobile Refinery, exceeding our operational expectations for the period. Favorable commodity prices which provided a tailwind to results during the third quarter, presented an opportunity for our risk management team to secure attractive pricing for approximately 27% of our gasoline production during the seasonally weak fourth quarter of the year.” Mr. Cowart continued, “We continue to advance our alternative feedstock strategy for optimization of our renewable diesel operations, and are actively assessing strategic options related to this asset in an effort to bring a portion of what we believe is the substantial unrecognized value of this asset forward to add liquidity and greater financial flexibility to the Company.”

MOBILE REFINERY OPERATIONS

Conventional Fuels Refining

Total conventional throughput at the Mobile Refinery was 80,171 bpd in the third quarter of 2023. Total production of finished high-value, light products, such as gasoline, diesel and jet fuel, represented approximately 67% of total production in the third quarter of 2023, vs. 61% in the second quarter of 2023, and slightly ahead of management’s original expectations, reflecting a continued successful yield optimization initiative at the Mobile conventional refining facility.

The Mobile Refinery’s conventional operations generated a gross profit of $86.2 million and $129.5 million of fuel gross margin (a KPI discussed below) or $17.56 per barrel during the third quarter of 2023, versus generating a gross profit of $49.1 million, and fuel gross margin (a KPI discussed below) of $92.9 million, or $14.86 per barrel in the third quarter of 2022.

Renewable Diesel Facility

Total renewable throughput at the Mobile Renewable Diesel facility was 5,397 bpd in the third quarter of 2023. Total production of renewable diesel was 5,276 bpd reflecting a product yield of 97.8%.

The Mobile Renewable Diesel facility operations generated a gross loss of $(8.5) million and $2.4 million of fuel gross margin (a non-GAAP measure) or $4.78 per barrel during the third quarter of 2023.

Feedstock Supply Strategy Advanced. During the third quarter, Vertex continued to advance its alternative feedstock supply strategy. The Company has completed the required temporary filings for LCFS credits at the default carbon intensity (“C.I.”) score. Vertex expects the initial default level LCFS credits to be applied to all volumes of renewable diesel produced during the 3rd and 4th quarter of 2023 and to contribute to financial results in the 4th quarter.

During the quarter the company successfully completed runs to support filing for proprietary carbon intensity scores of LCFS pathways for Soy, DCO and Canola and is completing the necessary Tallow runs in November. The filings for each of these four feedstocks are expected to be completed during the 4th quarter as scheduled. Once completed, these filings will allow Vertex to receive the increased credit value available with their lower carbon intensity production as compared to the default temporary values.

Third Quarter 2023 Mobile Refinery Financial and Operating Results ($/millions unless otherwise noted)

Conventional Fuels Refinery

1Q23

2Q23

3Q23

2023 YTD

Total Throughput (bpd)

71,328

76,330

80,171

75,976

Total Throughput (MMbbl)

6.42

6.95

7.38

20.74

Conventional Facility Capacity Utilization1

95.1%

101.8%

106.9%

101.3%

Direct Opex Per Barrel ($/bbl)

$3.84

$3.35

$2.40

$3.17

Fuel Gross Margin ($/MM)

$103.8

$55.7

$129.5

$289.0

Fuel Gross Margin Per Barrel ($/bbl)

$16.17

$8.03

$17.56

$13.94

Production Yield

Gasoline (bpd)

15,723

17,812

21,287

18,295

% Production

22.7%

23.2%

26.6%

24.3%

ULSD (bpd)

14,720

15,618

16,479

15,612

% Production

21.2%

20.3%

20.6%

20.7%

Jet (bpd)

12,789

13,570

15,823

14,072

% Production

18.4%

17.7%

19.8%

18.7%

Total Finished Fuel Products

43,232

47,000

53,589

47,979

% Production

62.3%

61.2%

67.0%

63.6%

Other2

26,119

29,828

26,419

27,456

% Production

37.7%

38.8%

33.0%

36.4%

Total Production (bpd)

69,351

76,828

80,008

75,435

Total Production (MMbbl)

6.24

6.99

7.36

20.59

Renewable Fuels Refinery

1Q23

2Q23

3Q23

2023 YTD

Total Renewable Throughput (bpd)

2,490

5,397

3,952

Total Renewable Throughput (MMbbl)

0.23

0.50

1.08

Renewable Diesel Facility Capacity Utilization3

31.1%

67.5%

49.4%

Direct Opex Per Barrel ($/bbl)

$31.23

$23.05

$25.61

Renewable Fuel Gross Margin ($/MM)

($3.1)

$2.4

($0.7)

Renewable Fuel Gross Margin Per Barrel ($/bbl)

($13.66)

$4.78

($1.00)

Renewable Diesel Production (bpd)

2,208

5,276

3,750

Renewable Diesel Production (MMbbl)

0.20

0.49

1.02

Renewable Diesel Production Yield (%)

88.7%

97.8%

94.9%

1.) Assumes 75,000 barrels per day of conventional operational capacity

2.) Other includes naphtha, intermediates, and LPG

3.) Assumes 8,000 barrels per day of renewable fuels operational capacity

Balance Sheet and Liquidity Update

As of September 30, 2023, Vertex had total debt outstanding of $242.3 million, including $15.2 million in 6.25% Senior Convertible Notes, $148.0 million outstanding on the Company’s Term Loan, finance lease obligations of $69.0 million, and $10.1 million in other obligations. The Company had total cash and equivalents of $79.3 million, including $3.6 million of restricted cash on the balance sheet as of September 30, 2023, for a net debt position of $163.0 million. The ratio of net debt to trailing twelve month Adjusted EBITDA was 1.3 times as of September 30, 2023. (see also “Non-GAAP Financial Measures and Key Performance Indicators”, below).

Commodity Price Risk Management

During the third quarter, Vertex’s commodity price risk management team identified an opportunity to secure attractive future refining margins for a portion of the Company’s forecast gasoline production ahead of the projected seasonally weak fourth quarter for this specific market. The Company entered hedge positions covering approximately 27% of planned gasoline production for the fourth quarter of 2023.

Management Outlook

All guidance presented below is current as of the time of this release and is subject to change. All prior financial guidance should no longer be relied upon.

Conventional Fuels

4Q 2023

Operational:

Low

High

Mobile Refinery Conventional Throughput Volume (Mbpd)

68.0

71.0

Capacity Utilization

91%

95%

Production Yield Profile:

Percentage Finished Products1

64%

68%

Intermediate & Other Products2

36%

32%

Renewable Fuels

4Q 2023

Operational:

Low

High

Mobile Refinery Renewable Throughput Volume (Mbpd)

4.0

6.0

Capacity Utilization

50%

75%

Production Yield

97%

98%

Yield Loss

Consolidated

4Q 2023

Operational:

Low

High

Mobile Refinery Total Throughput Volume (Mbpd)

72.0

77.0

Capacity Utilization

87%

93%

Financial Guidance:

Direct Operating Expense ($/bbl)

$3.95

$4.20

Capital Expenditures ($/MM)

$15.00

$20.00

1.) Finished products include gasoline, ULSD, and Jet A

2.) Intermediate & Other products include Vacuum Gas Oil (VGO), Liquified Petroleum Gases (LPGs), and Vacuum Tower Bottoms (VTBs)

CONFERENCE CALL AND WEBCAST DETAILS

A conference call will be held today, November 7, 2023 at 8:30 A.M. Eastern Time to review the Company’s financial results, discuss recent events and conduct a question-and-answer session. An audio webcast of the conference call and accompanying presentation materials will also be available in the “Events and Presentation” section of Vertex’s website at www.vertexenergy.com. To listen to a live broadcast, visit the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference:

Domestic: (888) 350-3870 International: (646) 960-0308 Conference ID: 8960754

To listen to a replay of the teleconference, which will be available through November 21, 2023, either go to the “Events and Presentation” section of Vertex's website at www.vertexenergy.com, or call the number below:

Domestic Replay: (800) 770-2030 Access Code: 8960754

ABOUT VERTEX ENERGY

Vertex Energy is a leading energy transition company that specializes in producing both renewable and conventional fuels. Our innovative solutions are designed to enhance the performance of our 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 projected Outlook for the fourth quarter of 2023, as discussed above; statements concerning: the Company’s engagement of BofA Securities, Inc., as previously disclosed; the review and evaluation of potential joint ventures, divestitures, acquisitions, mergers, business combinations, or other strategic transactions and their impact 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; the ability of the Company to obtain low carbon fuel standard (LCFS) credits, 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 Company’s refinery located in Mobile, Alabama (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 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, increased interest rates, recessions and inflation; 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.

PROJECTIONS

The financial projections (the “Projections”) included herein were prepared by Vertex in good faith using assumptions believed to be reasonable. A significant number of assumptions about the operations of the business of Vertex were based, in part, on economic, competitive, and general business conditions prevailing at the time the Projections were developed. Any future changes in these conditions, may materially impact the ability of Vertex to achieve the financial results set forth in the Projections. The Projections are based on numerous assumptions, including realization of the operating strategy of Vertex; industry performance; no material adverse changes in applicable legislation or regulations, or the administration thereof, or generally accepted accounting principles; general business and economic conditions; competition; retention of key management and other key employees; absence of material contingent or unliquidated litigation, indemnity, or other claims; minimal changes in current pricing; static material and equipment pricing; no significant increases in interest rates or inflation; and other matters, many of which will be beyond the control of Vertex, and some or all of which may not materialize. The Projections also assume the continued uptime of the Company’s facilities at historical levels and the successful funding of, timely completion of, and successful outcome of, planned capital projects. Additionally, to the extent that the assumptions inherent in the Projections are based upon future business decisions and objectives, they are subject to change. Although the Projections are presented with numerical specificity and are based on reasonable expectations developed by Vertex’s management, the assumptions and estimates underlying the Projections are subject to significant business, economic, and competitive uncertainties and contingencies, many of which will be beyond the control of Vertex. Accordingly, the Projections are only estimates and are necessarily speculative in nature. It is expected that some or all of the assumptions in the Projections will not be realized and that actual results will vary from the Projections. Such variations may be material and may increase over time. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections. The projected financial information contained herein should not be regarded as a representation or warranty by Vertex, its management, advisors, or any other person that the Projections can or will be achieved. Vertex cautions that the Projections are speculative in nature and based upon subjective decisions and assumptions. As a result, the Projections should not be relied on as necessarily predictive of actual future events.

NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS

In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), in this news release we also present certain non-U.S. GAAP financial measures and key performance indicators. Non-U.S. GAAP financial measures include Adjusted Gross Margin, Fuel Gross Margin and Refining Adjusted EBITDA, for the Company’s Legacy Refining and Marketing segment, and the total Refining and Marketing segment, as a whole, and Net Long-Term Debt and Ratio of Net Long-Term Debt (collectively, the “Non-U.S. GAAP Financial Measures”). Key performance indicators include Adjusted Gross Margin, Fuel Gross Margin and Refining Adjusted EBITDA for Conventional, Renewable and the Mobile Refinery as a whole, and Fuel Gross Margin Per Barrel of Throughput and Adjusted Gross Margin Per Barrel of Throughput for Conventional, Renewable and the Mobile Refinery as a whole (collectively, the “KPIs”). EBITDA represents net income before interest, taxes, depreciation and amortization, for continued and discontinued operations. Adjusted EBITDA represents net income (loss) from operations plus unrealized gain or losses on hedging activities, Renewable Fuel Standard (RFS) costs (mainly related to Renewable Identification Numbers (RINs), and inventory adjustments, depreciation and amortization, acquisition costs, gain on change in value of derivative warrant liability, environmental clean-up, stock-based compensation, (gain) loss on sale of assets, interest expense, and certain other unusual or non-recurring charges included in selling, general, and administrative expenses. Adjusted Gross Margin is defined as gross profit (loss) plus or minus unrealized gain or losses on hedging activities and inventory valuation adjustments. Fuel Gross Margin is defined as Adjusted Gross Margin, plus production costs, operating expenses and depreciation attributable to cost of revenues and other non-fuel items included in costs of revenues including realized and unrealized gain or losses on hedging activities, RFS costs (mainly related to RINs), inventory valuation adjustments, fuel financing costs and other revenues and cost of sales items. Fuel Gross Margin Per Barrel of Throughput is calculated as fuel gross margin divided by total throughput barrels for the period presented. Operating Expenses Per Barrel of Throughput is defined as total operating expenses divided by total barrels of throughput. RIN Adjusted Fuel Gross Margin is defined as [Fuel Gross Margin minus RIN expense divided by total barrels of throughput. RIN Adjusted Fuel Gross Margin Per Barrel of Throughput is calculated as RIN Adjusted Fuel Gross Margin divided by total throughput barrels for the period presented. Net Long-Term Debt is long-term debt and lease obligations, adjusted for unamortized discount and deferred financing costs, insurance premiums financed, less cash and cash equivalents and restricted cash. Ratio of Net Long-Term Debt is defined as Long-Term Debt divided by Adjusted EBITDA.

Each of the Non-U.S. GAAP Financial Measures and KPIs are discussed in greater detail below. The (a) Non-U.S. GAAP Financial Measures are “non-U.S. GAAP financial measures”, and (b) the KPIs are, presented as supplemental measures of the Company’s performance. They are not presented in accordance with U.S. GAAP. We use the Non-U.S. GAAP Financial Measures and KPIs as supplements to U.S. GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to allocate resources and to compare our performance relative to our peers. Additionally, these measures, when used in conjunction with related U.S. GAAP financial measures, provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. The Non-U.S. GAAP Financial Measures and KPIs are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. Non-U.S. GAAP financial information and KPIs similar to the Non-U.S. GAAP Financial Measures and KPIs are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. The Non-U.S. GAAP Financial Measures and KPIs are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under U.S. GAAP. Some of these limitations are: the Non-U.S. GAAP Financial Measures and KPIs do not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments; the Non-GAAP Financial Measures and KPIs do not reflect changes in, or cash requirements for, working capital needs; the Non-GAAP Financial Measures and KPIs do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, the Non-U.S. GAAP Financial Measures and KPIs do not reflect any cash requirements for such replacements; the Non-U.S. GAAP Financial Measures and KPIs represent only a portion of our total operating results; and other companies in this industry may calculate the Non-U.S. GAAP Financial Measures and KPIs differently than we do, limiting their usefulness as a comparative measure. You should not consider the Non-U.S. GAAP Financial Measures and KPIs in isolation, or as substitutes for analysis of the Company’s results as reported under U.S. GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-U.S. GAAP Financial Measures and KPIs to the most comparable U.S. GAAP measure below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-U.S. GAAP Financial Measures and KPIs in conjunction with the most directly comparable U.S. GAAP financial measure.

We compensate for these limitations by providing a reconciliation of each of the non-GAAP Financial Measures to the most comparable GAAP measure and reconciliation of the KPIs, below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view the non-GAAP Financial Measures in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures and KPIs, please see the sections titled “Unaudited Reconciliation of Gross Profit (Loss) From Continued and Discontinued Operations to Adjusted Gross Margin, Fuel Gross Margin, Fuel Gross Margin Per Barrel of Throughput and Operating Expenses Per Barrel of Throughput”, “Unaudited Reconciliation of Adjusted EBITDA to Net loss from Continued and Discontinued Operations”, and “Unaudited Reconciliation of Long-Term Debt to Net Long-Term Debt and Net Leverage”, at the end of this release.

VERTEX ENERGY, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except number of shares and par value) (UNAUDITED)

September 30, 2023

December 31, 2022

ASSETS

Current assets

Cash and cash equivalents

75,705

141,258

Restricted cash

3,605

4,929

Accounts receivable, net

36,816

34,548

Inventory

222,685

135,473

Derivative commodity asset

4,991

—

Prepaid expenses and other current assets

57,315

36,660

Assets held for sale, current

—

20,560

Total current assets

401,117

373,428

Fixed assets, net

321,314

201,749

Finance lease right-of-use assets

65,317

44,081

Operating lease right-of use assets

90,413

53,557

Intangible assets, net

11,207

11,827

Deferred taxes assets

—

2,498

Other assets

3,310

2,245

TOTAL ASSETS

892,678

689,385

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

63,628

20,997

Accrued expenses

69,315

81,711

Finance lease liability-current

2,297

1,363

Operating lease liability-current

26,047

9,012

Current portion of long-term debt, net

18,321

13,911

Obligations under inventory financing agreements, net

182,487

117,939

Derivative commodity liability

—

242

Liabilities held for sale, current

—

3,424

Total current liabilities

362,095

248,599

Long-term debt, net

125,010

170,010

Finance lease liability-long-term

66,751

45,164

Operating lease liability-long-term

64,367

44,545

Deferred tax liabilities

1,257

—

Derivative warrant liability

9,234

14,270

Other liabilities

1,377

Total liabilities

630,091

523,965

COMMITMENTS AND CONTINGENCIES (Note 4)

—

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value per share;

750,000,000 shares authorized; 93,514,346 and 75,668,826 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.

Additional paid-in capital

382,849

279,552

Accumulated deficit

(123,588

)

(115,893

)

Total Vertex Energy, Inc. stockholders' equity

259,355

163,735

Non-controlling interest

3,232

1,685

Total equity

262,587

165,420

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

892,678

689,385

VERTEX ENERGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2022

2023

2022

Revenues

1,018,407

809,529

2,444,442

1,913,435

Cost of revenues (exclusive of depreciation and amortization shown separately below)

925,542

749,654

2,274,543

1,817,787

Depreciation and amortization attributable to costs of revenues

7,896

4,049

18,863

9,139

Gross profit

84,969

55,826

151,036

86,509

Operating expenses:

Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below)

43,137

37,142

127,715

90,039

Depreciation and amortization attributable to operating expenses

1,033

1,119

3,077

2,655

Total operating expenses

44,170

38,261

130,792

92,694

Income (loss) from operations

40,799

17,565

20,244

(6,185

)

Other income (expense):

Other income (loss)

(133

)

416

1,023

1,059

Gain on change in value of derivative warrant liability

4,621

12,312

5,036

7,788

Interest expense

(13,523

)

(13,028

)

(103,536

)

(64,961

)

Total other expense

(9,035

)

(300

)

(97,477

)

(56,114

)

Income (loss) from continuing operations before income tax

31,764

17,265

(77,233

)

(62,299

)

Income tax benefit (expense)

(12,231

)

—

15,445

—

Income (loss) from continuing operations

19,533

17,265

(61,788

)

(62,299

)

Income from discontinued operations, net of tax (see note 23)

—

4,905

53,680

19,878

Net income (loss)

19,533

22,170

(8,108

)

(42,421

)

Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from continuing operations

(310

)

(49

)

(413

)

Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from discontinued operations

—

(15

)

—

6,847

Net income (loss) attributable to Vertex Energy, Inc.

19,843

22,234

(7,695

)

(49,283

)

Accretion of redeemable noncontrolling interest to redemption value from continued operations

—

(428

)

Net income (loss) attributable to common stockholders from continuing operations

19,843

17,314

(61,375

)

(62,742

)

Net income attributable to common stockholders from discontinued operations, net of tax

—

4,920

53,680

13,031

Net income (loss) attributable to common shareholders

19,843

22,234

(7,695

)

(49,711

)

Basic loss per common share

Continuing operations

0.21

0.23

(0.74

)

(0.91

)

Discontinued operations, net of tax

—

0.07

0.65

0.19

Basic loss per common share

0.21

0.30

(0.09

)

(0.72

)

Diluted income (loss) per common share

Continuing operations

0.17

0.10

(0.74

)

(0.91

)

Discontinued operations, net of tax

—

0.05

0.65

0.19

Diluted income (loss) per common share

0.17

0.15

(0.09

)

(0.72

)

Shares used in computing earnings per share

Basic

93,381

75,591

82,928

69,007

Diluted

100,427

97,126

82,928

69,007

VERTEX ENERGY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except par value) (UNAUDITED)

Nine Months Ended September 30, 2023

Common Stock

Series A Preferred

Shares

$0.001 Par

Shares

$0.001 Par

Additional Paid-In Capital

Retained Earnings

Non- controlling Interest

Total Equity

Balance on January 1, 2023

75,669

—

279,552

(115,893

)

1,685

165,420

Exercise of options

166

—

209

—

209

Stock based compensation expense

—

365

—

365

Non controlling shareholder contribution

—

980

Net income (loss)

—

53,863

(50

)

53,813

Balance on March 31, 2023

75,835

—

280,126

(62,030

)

2,615

220,787

Exercise of options

195

—

169

—

169

Stock based compensation expense

—

368

—

368

Senior Note Converted

17,207

—

101,113

—

101,130

Non-controlling shareholder contribution

—

490

Net loss

—

(81,401

)

(53

)

(81,454

)

Balance on June 30, 2023

93,237

—

381,776

(143,431

)

3,052

241,490

Exercise of options

165

—

304

—

305

Stock based compensation expense

—

769

—

769

Issue of restricted common stock

113

—

Non-controlling shareholder contribution

—

490

Net income (loss)

—

19,843

(310

)

19,533

Balance on September 30, 2023

93,515

—

382,849

(123,588

)

3,232

262,587

VERTEX ENERGY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except par value) (UNAUDITED)

Nine Months Ended September 30, 2022

Common Stock

Series A Preferred

Shares

$0.001 Par

Shares

$0.001 Par

Additional Paid-In Capital

Retained Earnings

Non- controlling Interest

Total Equity

Balance on January 1, 2022

63,288

386

—

138,620

(110,614

)

1,997

30,066

Exercise of options

—

Exercise of warrants

1,113

—

)

—

Stock based compensation expense

—

250

—

250

Conversion of Series A Preferred stock to common

—

)

—

Reclassification of derivative liabilities

—

78,789

—

78,789

Accretion of redeemable non-controlling interest to redemption value

—

(422

)

—

(422

)

Net income (loss)

—

(4,547

)

3,739

(808

)

Less: amount attributable to redeemable non-controlling interest

—

(3,769

)

(3,769

)

Balance on March 31, 2022

64,466

381

—

217,734

(115,583

)

1,967

104,182

Exercise of options to common

498

—

553

—

554

Exercise of options to common- unissued

—

Distribution to non-controlling shareholder

—

(380

)

(380

)

Adjustment of redeemable non controlling interest

—

(29

)

—

Conversion of Convertible Senior Notes to common

10,165

—

59,812

—

59,822

Share based compensation expense

—

324

—

324

Conversion of Series A Preferred stock to common

381

(381

)

—

Accretion of redeemable non-controlling interest to redemption value

—

)

—

)

Net income (loss)

—

(66,970

)

3,188

(63,782

)

Less: amount attributable to redeemable non-controlling interest

—

(3,023

)

(3,023

)

Balance on June 30, 2022

75,510

—

278,455

(182,588

)

1,752

97,695

Exercise of options to common

—

Exercise of options to common- unissued

—

Exercise of warrants

—

Share based compensation expense

—

378

—

378

Net income (loss)

—

22,234

(64

)

22,170

Balance on September 30, 2022

75,610

—

278,930

(160,354

)

1,688

120,340

VERTEX ENERGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED)

Nine Months Ended September 30,

2023

2022

Cash flows from operating activities

Net income (loss)

(8,108

)

(42,421

)

Income from discontinued operations, net of tax

53,680

19,878

Loss from continuing operations

(61,788

)

(62,299

)

Adjustments to reconcile net loss from continuing operations to cash used in operating activities

Stock based compensation expense

1,502

952

Depreciation and amortization

21,940

11,794

Deferred income tax benefit

(15,445

)

—

Gain on sale of assets

)

(112

)

Provision for environment clean up

—

1,428

(Decrease) increase in allowance for bad debt

(132

)

157

(Decrease) increase in fair value of derivative warrant liability

(5,036

)

(7,788

)

Loss on commodity derivative contracts

219

87,217

Net cash settlements on commodity derivatives

(2,061

)

(100,253

)

Amortization of debt discount and deferred costs

74,618

44,537

Changes in operating assets and liabilities

Accounts receivable and other receivables

(3,819

)

(39,202

)

Inventory

(85,796

)

(31,387

)

Prepaid expenses and other current assets

(24,601

)

(16,437

)

Accounts payable

42,219

58,275

Accrued expenses

(12,500

)

37,404

Other assets

(987

)

Net cash used in operating activities from continuing operations

(71,669

)

(15,632

)

Cash flows from investing activities

Acquisition of business, net of cash

(7,642

)

—

Purchase of intangible assets

(2,500

)

(106

)

Investment in Mobile Refinery assets

—

(227,525

)

Purchase of fixed assets

(128,599

)

(34,743

)

Proceeds from sale of discontinued operation

92,034

—

Proceeds from sale of fixed assets

188

Net cash used in investing activities from continuing operations

(46,702

)

(262,186

)

Cash flows from financing activities

Payments on finance leases

(1,469

)

(201

)

Proceeds from exercise of options and warrants to common stock

683

729

Distributions to noncontrolling interest

—

(380

)

Contributions received from noncontrolling interest

1,960

—

Net change on inventory financing agreements

63,798

133,744

Redemption of noncontrolling interest

—

(50,666

)

Proceeds from note payable

19,641

173,315

Payments on note payable

(32,969

)

(14,101

)

Net cash provided by financing activities from continuing operations

51,644

242,440

Discontinued operations:

Net cash provided by (used in) operating activities

(150

)

23,021

Net cash used in investing activities

—

(1,877

)

Net cash provided by (used in) discontinued operations

(150

)

21,144

Net decrease in cash, cash equivalents and restricted cash

(66,877

)

(14,234

)

Cash, cash equivalents, and restricted cash at beginning of the period

146,187

136,627

Cash, cash equivalents, and restricted cash at end of period

79,310

122,393

VERTEX ENERGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED) (Continued)

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the same amounts shown in the consolidated statements of cash flows (in thousands).

Nine Months Ended

September 30, 2023

September 30, 2022

Cash and cash equivalents

75,705

117,464

Restricted cash

3,605

4,929

Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows

79,310

122,393

SUPPLEMENTAL INFORMATION

Cash paid for interest

35,553

65,083

Cash paid for taxes

—

NON-CASH INVESTING AND FINANCING TRANSACTIONS

Equity component of the convertible note issuance

—

78,789

ROU assets obtained from new finance lease obligation

23,990

45,096

Exchange of Convertible Senior Notes to common stock

79,948

59,822

ROU assets obtained from new operating lease obligation

36,856

20,061

Accretion of redeemable non-controlling interest to redemption value

—

428

Unaudited segment information for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands):

Three Months Ended September 30, 2023

Refining & Marketing

Black Oil & Recovery

Corporate and Eliminations

Total

Revenues:

Refined products

966,805

38,642

(4,632

)

1,000,815

Re-refined products

4,509

2,966

—

7,475

Services

7,398

2,719

—

10,117

Total revenues

978,712

44,327

(4,632

)

1,018,407

Cost of revenues (exclusive of depreciation and amortization shown separately below)

893,612

36,569

(4,639

)

925,542

Depreciation and amortization attributable to costs of revenues

6,527

1,369

—

7,896

Gross profit

78,573

6,389

84,969

Selling, general and administrative expenses

31,485

5,231

6,421

43,137

Depreciation and amortization attributable to operating expenses

829

166

1,033

Income (loss) from operations

46,259

1,120

(6,580

)

40,799

Other income (expenses)

Other income (expense)

—

(167

)

(133

)

Gain on change in value of derivative warrant liabilities

—

4,621

Interest expense

(4,394

)

(41

)

(9,088

)

(13,523

)

Net income (loss)

41,865

912

(11,013

)

31,764

Capital expenditures

20,875

8,449

—

29,324

Three Months Ended September 30, 2022

Refining &

Marketing

Black Oil & Recovery

Corporate and Eliminations

Total

Revenues:

Refined products

748,190

37,607

—

785,797

Re-refined products

16,434

4,587

—

21,021

Services

2,144

567

—

2,711

Total revenues

766,768

42,761

—

809,529

Cost of revenues (exclusive of depreciation and amortization shown separately below)

714,976

34,678

—

749,654

Depreciation and amortization attributable to costs of revenues

3,111

938

—

4,049

Gross profit

48,681

7,145

—

55,826

Selling, general and administrative expenses

28,269

4,803

4,070

37,142

Depreciation and amortization attributable to operating expenses

850

231

1,119

Income (loss) from operations

19,562

2,304

(4,301

)

17,565

Other income (expenses)

Other income

—

416

—

416

Gain on change in value of derivative warrant liabilities

—

12,312

Interest expense

(3,444

)

—

(9,584

)

(13,028

)

Net income (loss)

16,118

2,720

(1,573

)

17,265

Capital expenditures

26,333

412

—

26,745

Nine Months Ended September 30, 2023

Refining & Marketing

Black Oil & Recovery

Corporate and Eliminations

Total

Revenues:

Refined products

2,322,452

89,863

(9,775

)

2,402,540

Re-refined products

13,874

10,912

—

24,786

Services

13,133

3,983

—

17,116

Total revenues

2,349,459

104,758

(9,775

)

2,444,442

Cost of revenues (exclusive of depreciation and amortization shown separately below)

2,194,382

90,250

(10,089

)

2,274,543

Depreciation and amortization attributable to costs of revenues

15,389

3,474

—

18,863

Gross profit

139,688

11,034

314

151,036

Selling, general and administrative expenses

90,940

14,535

22,240

127,715

Depreciation and amortization attributable to operating expenses

2,459

114

504

3,077

Income (loss) from operations

46,289

(3,615

)

(22,430

)

20,244

Other income (expenses)

Other income

—

989

1,023

Gain on change in value of derivative warrant liabilities

—

5,036

Interest expense

(12,799

)

(126

)

(90,611

)

(103,536

)

Net income (loss)

33,490

(2,752

)

(107,971

)

(77,233

)

Capital expenditures

118,545

16,123

—

134,668

Nine Months Ended September 30, 2022

Refining & Marketing

Black Oil & Recovery

Corporate and Eliminations

Total

Revenues:

Refined products

1,721,044

129,078

—

1,850,122

Re-refined products

42,381

14,860

—

57,241

Services

4,452

1,620

—

6,072

Total revenues

1,767,877

145,558

—

1,913,435

Cost of revenues (exclusive of depreciation and amortization shown separately below)

1,707,746

110,041

—

1,817,787

Depreciation and amortization attributable to costs of revenues

6,339

2,800

—

9,139

Gross profit

53,792

32,717

—

86,509

Selling, general and administrative expenses

53,073

13,125

23,841

90,039

Depreciation and amortization attributable to operating expenses

1,784

142

729

2,655

Income (loss) from operations

(1,065

)

19,450

(24,570

)

(6,185

)

Other income (expenses)

Other income

1,041

—

1,059

Gain on change in value of derivative warrant liabilities

—

7,788

Interest expense

(6,694

)

(51

)

(58,216

)

(64,961

)

Net income (loss)

(7,741

)

20,440

(74,998

)

(62,299

)

Capital expenditures

142,927

2,830

—

145,757

The following summarized unaudited financial information has been segregated from continuing operations and reported as discontinued operations for the three and nine months ended September 30, 2023, and 2022 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2022

2023

2022

Revenues

—

22,859

7,366

65,618

Cost of revenues (exclusive of depreciation shown separately below)

—

14,953

4,589

37,871

Depreciation and amortization attributable to costs of revenues

—

394

124

1,176

Gross profit

—

7,512

2,653

26,571

Operating expenses:

Selling, general and administrative expenses (exclusive of depreciation shown separately below)

—

2,534

632

6,472

Depreciation and amortization expense attributable to operating expenses

—

188

Total operating expenses

—

2,597

653

6,660

Income from operations

—

4,915

2,000

19,911

Other income (expense)

Interest expense

—

(10

)

—

(33

)

Total other expense

—

(10

)

—

(33

)

Income before income tax

—

4,905

2,000

19,878

Income tax expense

—

(528

)

—

Gain on sale of discontinued operations, net of $0 and $18,671 of tax for three and nine months ended September 30, 2023

—

52,208

—

Income from discontinued operations, net of tax

—

4,905

53,680

19,878

Unaudited Reconciliation of Gross Profit (Loss) From Continued and Discontinued Operations to Adjusted Gross Margin, Fuel Gross Margin, Fuel Gross Margin Per Barrel of Throughput and Operating Expenses Per Barrel of Throughput.

Three Months Ended September 30, 2023

In thousands

Conventional

Renewable

Mobile Refinery Total

Gross profit

86,185

(8,515

)

77,670

Unrealized (gain) loss on hedging activities

(4,620

)

(3,622

)

(8,242

)

Inventory valuation adjustments

13,225

(3,851

)

9,374

Adjusted gross margin

94,790

(15,988

)

78,802

Variable production costs attributable to cost of revenues

26,847

12,958

39,805

Depreciation and amortization attributable to cost of revenues

2,982

3,320

6,302

RINs

7,058

Realized loss on hedging activities

2,854

2,401

5,255

Financing costs

1,772

205

1,977

Other revenues

(6,804

)

(524

)

(7,328

)

Fuel gross margin

129,499

2,372

131,871

Throughput (bpd)

80,171

5,397

85,568

Fuel gross margin per barrel of throughput

17.56

4.78

16.75

Total OPEX

17,720

11,445

29,165

Operating expenses per barrel of throughput

2.40

23.05

3.70

Three Months Ended June 30, 2023

In thousands

Conventional

Renewable

Mobile Refinery Total

Gross profit

6,544

(13,006

)

(6,462

)

Unrealized (gain) loss on hedging activities

849

2,913

3,762

Inventory valuation adjustments

(4,246

)

3,745

(501

)

Adjusted gross margin

3,147

(6,348

)

(3,201

)

Variable production costs attributable to cost of revenues

28,686

28,763

Depreciation and amortization attributable to cost of revenues

3,351

2,018

5,369

RINs

25,410

Realized loss on hedging activities

(1,150

)

1,288

138

Financing costs

(87

)

(29

)

Other revenues

(3,610

)

(190

)

(3,800

)

Fuel gross margin

55,747

(3,097

)

52,650

Throughput (bpd)

76,330

2,490

78,820

Fuel gross margin per barrel of throughput

8.03

(13.66

)

7.34

Total OPEX

23,299

7,076

30,375

Operating expenses per barrel of throughput

3.35

31.23

4.23

Three Months Ended March 31, 2023

In thousands

Conventional

Renewable

Mobile Refinery Total

Gross profit

65,470

Unrealized (gain) loss on hedging activities

(570

)

(570

)

Inventory valuation adjustments

(1,532

)

(1,532

)

Adjusted gross margin

63,368

Variable production costs attributable to cost of revenues

21,252

Depreciation and amortization attributable to cost of revenues

3,144

RINs

16,115

Realized loss on hedging activities

(439

)

(439

)

Financing costs

2,295

Other revenues

(1,933

)

(1,933

)

Fuel gross margin

103,802

Throughput (bpd)

71,328

Fuel gross margin per barrel of throughput

16.17

Total OPEX

24,681

Operating expenses per barrel of throughput

3.84

Nine Months Ended September 30, 2023

In thousands

Conventional

Renewable

Mobile Refinery Total

Gross profit

158,198

(21,521

)

136,677

Unrealized (gain) loss on hedging activities

(4,341

)

(709

)

(5,050

)

Inventory valuation adjustments

7,447

(106

)

7,341

Adjusted gross margin

161,304

(22,336

)

138,968

Variable production costs attributable to cost of revenues

76,785

13,035

89,820

Depreciation and amortization attributable to cost of revenues

9,477

5,338

14,815

RINs

48,583

Realized loss on hedging activities

1,265

3,689

4,954

Financing costs

3,980

263

4,243

Other revenues

(12,347

)

(714

)

(13,061

)

Fuel gross margin

289,047

(725

)

288,322

Throughput (bpd)

75,976

3,952

79,928

Fuel gross margin per barrel of throughput

13.94

(1.00

)

13.21

Total OPEX

65,700

18,521

84,221

Operating expenses per barrel of throughput

3.17

25.61

3.86

Unaudited Reconciliation of Adjusted EBITDA to Net loss from Continued and Discontinued Operations.

In thousands

Three Months Ended

Nine Months Ended

Twelve Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Net income (loss)

19,534

22,172

(8,107

)

(42,421

)

36,310

(47,771

)

Depreciation and amortization

8,929

5,623

22,085

13,157

27,847

15,088

Income tax expense (benefit)

12,231

3,754

1,265

Interest expense

13,523

13,129

103,536

65,069

118,493

67,921

EBITDA

54,217

40,924

121,268

35,805

183,915

35,239

Unrealized (gain) loss on hedging activities

(8,348

)

(47,756

)

(5,233

)

(1,123

)

(4,256

)

(1,375

)

Inventory valuation adjustments

9,374

17,972

7,341

41,152

16,955

41,152

Gain on change in value of derivative warrant liability

(4,621

)

(12,312

)

(5,036

)

(7,788

)

(5,069

)

(3,483

)

Stock-based compensation

769

378

1,502

951

2,125

1,201

(Gain) loss on sale of assets

(70,881

)

(70,558

)

(1,041

)

Acquisition costs

2,889

4,308

16,526

4,309

20,092

Environmental clean-up reserve

1,428

Other

132

(417

)

(1,022

)

(1,042

)

2,106

Adjusted EBITDA

51,523

1,678

52,247

85,909

127,413

95,318

Three Months Ended September 30, 2023

Mobile Refinery

Legacy Refining & Marketing

Total Refining & Marketing

Black Oil and Recovery

Corporate

Consolidated

In thousands

Conventional

Renewable

Net income (loss)

65,161

(21,807

)

(1,489

)

41,865

912

(42,443

)

335

Depreciation and amortization

3,718

3,341

297

7,356

1,407

166

8,929

Income tax expense (benefit)

31,430

Interest expense

2,568

1,826

4,394

9,089

13,523

EBITDA

71,447

(16,640

)

(1,192

)

53,615

2,360

(1,758

)

54,217

Unrealized (gain) loss on hedging activities

(4,620

)

(3,622

)

(40

)

(8,282

)

(66

)

(8,348

)

Inventory valuation adjustments

13,225

(3,851

)

9,374

Gain on change in value of derivative warrant liability

(4,621

)

(4,621

)

Stock-based compensation

769

Other

167

(35

)

132

Adjusted EBITDA

80,052

(24,113

)

(1,232

)

54,707

2,461

(5,645

)

51,523

Nine Months Ended September 30, 2023

Mobile Refinery

Legacy Refining & Marketing

Total Refining & Marketing

Black Oil and Recovery

Corporate

Consolidated

In thousands

Conventional

Renewable

Net income (loss)

79,686

(42,272

)

(3,924

)

33,490

50,929

(111,726

)

(27,306

)

Depreciation and amortization

11,685

5,373

790

17,848

3,733

504

22,085

Income tax expense (benefit)

19,199

3,754

22,953

Interest expense

10,604

2,195

12,799

126

90,612

103,536

EBITDA

101,975

(34,704

)

(3,134

)

64,137

73,987

(16,856

)

121,268

Unrealized (gain) loss on hedging activities

(4,341

)

(709

)

(82

)

(5,132

)

(101

)

(5,233

)

Inventory valuation adjustments

7,447

(106

)

7,341

Gain on change in value of derivative warrant liability

(5,036

)

(5,036

)

Stock-based compensation

1,502

(Gain) loss on sale of assets

(70,884

)

(70,881

)

Acquisition costs

4,308

Other

(984

)

(38

)

(1,022

)

Adjusted EBITDA

105,081

(35,519

)

(3,216

)

66,346

2,018

(16,117

)

52,247

Three Months Ended September 30, 2022

In thousands

Mobile Refinery

Legacy Refining & Marketing

Total Refining & Marketing

Black Oil

Corporate

Consolidated

Net income (loss)

18,369

(2,251

)

16,118

7,638

(1,585

)

22,172

Depreciation and amortization

3,693

268

3,961

1,431

231

5,623

Interest expense

3,536

)

9,595

13,129

EBITDA

25,599

(1,983

)

23,616

9,067

8,241

40,924

Unrealized (gain) loss on hedging activities

(46,977

)

(775

)

(47,752

)

(47,756

)

Inventory valuation adjustments

17,972

Gain on change in value of derivative warrant liability

(12,312

)

(12,312

)

Stock-based compensation

378

Acquisition costs

2,889

Other

(417

)

(417

)

Adjusted EBITDA

(517

)

(2,758

)

(3,275

)

8,646

(3,693

)

1,678

Nine Months Ended September 30, 2022

In thousands

Mobile Refinery

Legacy Refining & Marketing

Total Refining & Marketing

Black Oil

Corporate

Consolidated

Net income (loss)

(5,593

)

(2,147

)

(7,740

)

40,399

(75,080

)

(42,421

)

Depreciation and amortization

7,416

707

8,123

4,305

729

13,157

Interest expense

6,768

58,297

65,069

EBITDA

8,591

(1,440

)

7,151

44,708

(16,054

)

35,805

Unrealized (gain) loss on hedging activities

(76

)

(68

)

(144

)

(979

)

(1,123

)

Inventory valuation adjustments

41,152

Gain on change in value of derivative warrant liability

(7,788

)

(7,788

)

Stock-based compensation

951

Acquisition costs

11,967

4,559

16,526

Environmental clean-up reserve

1,428

Other

(1,042

)

(1,042

)

Adjusted EBITDA

63,062

(1,508

)

61,554

42,687

(18,332

)

85,909

Unaudited Reconciliation of Long-Term Debt to Net Long-Term Debt and Net Leverage.

In thousands

As of

September 30, 2023

September 30, 2022

December 31, 2022

Long-Term Debt:

Senior Convertible Note

15,230

95,178

Term Loan 2025

148,013

165,000

Finance lease liability long-term

66,751

44,339

45,164

Finance lease liability short-term

2,297

1,155

1,363

Insurance premiums financed

10,071

10,449

5,602

Long-Term Debt and Lease Obligations

242,362

316,121

312,307

Unamortized discount and deferred financing costs

(29,983

)

(86,384

)

(81,918

)

Long-Term Debt and Lease Obligations per Balance Sheet

212,379

229,737

230,389

Cash and Cash Equivalents

(75,705

)

(117,464

)

(141,258

)

Restricted Cash

(3,605

)

(4,929

)

(4,929

)

Total Cash and Cash Equivalents

(79,310

)

(122,393

)

(146,187

)

Net Long-Term Debt

163,052

193,728

166,120

Adjusted EBITDA

127,413

95,318

161,000

Net Leverage

1.3x

2.0x

1.0x

View source version on businesswire.com: https://www.businesswire.com/news/home/20231107484081/en/

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