Vertex Energy Reports Second Quarter 2020 Results
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Vertex Energy Reports Second Quarter 2020 Results

Tuesday, August 11, 2020 6:00 AM
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Topic:
Earnings

HOUSTON, TX / ACCESSWIRE / August 11, 2020 / Vertex Energy, Inc. (NASDAQ:VTNR), "Vertex" or the "Company"), a leading specialty refiner and marketer of high-quality hydrocarbon products, today announced its financial results for the second quarter of 2020.

MANAGEMENT OUTLOOK

  • Marrero and Heartland refineries operated at near peak utilization rates during July 2020
  • UMO collections improved to normalized levels in July 2020, due in part to organic growth in 1H20
  • Expect to realize $1-2 million of cost reductions during the second half 2020
  • Total cash and available liquidity of $19.6 million as of June 30, 2020

For the three months ended June 30, 2020, the Company reported a net loss attributable to Vertex Energy of ($9.0) million, versus a net loss of ($0.4) million, the second quarter 2019. Vertex reported Adjusted EBITDA of ($5.3) million for the second quarter 2020, versus $2.1 million in the prior-year period. The year-over-year decline in net income and Adjusted EBITDA was attributable to extended maintenance at the Marrero, Louisiana refinery and a year-over-year decline in refined product margins, given lower economic activity related to the novel coronavirus (COVID-19). A schedule reconciling the Company's GAAP and non-GAAP financial results, including Adjusted EBITDA, is included later in this release.

STRATEGIC UPDATE

During the second quarter, Vertex quickly adapted to the changing market dynamics resulting from the novel coronavirus. Specifically, management took action to improve feedstock availability, increase refinery utilization, reduce costs and further optimize owned assets.

  • Improved feedstock availability. During the first half of 2020, shelter-in-place orders were issued across most U.S. states and municipalities in response to COVID-19, resulting in a material decline in economic activity and travel. This decline in activity resulted in lower availability of used motor oil (UMO), the Company's primary feedstock. To that end, second quarter total collections were 21% below the same period of 2019. In response, management expanded its collection network, helping to increase availability of feedstock to support its refining operations during the first half of 2020.
  • Increased refinery utilization. During the second quarter, the Marrero and Heartland refineries operated at 62% and 78% of capacity, respectively. At Marrero, the company conducted 34 days of planned, extended maintenance that concluded in mid-June 2020, which impacted utilization in the period. At Heartland, second quarter utilization rates were impacted by reduced UMO availability. During July 2020, both the Marrero and Heartland refineries operated at levels approaching peak capacity utilization, given increased availability of UMO feedstock.
  • Targeted cost reductions. During the second quarter, management implemented a series of cost reductions throughout the organization. These actions included both reductions in contract labor, together with reductions in plant operating costs. Total selling, general and administrative expenses declined nearly 10% in the second quarter, when compared to the first quarter 2020. Management expects to realize approximately $1 to $2 million in additional, annualized cost reductions during the second half of 2020.
  • Asset optimization. Vertex continues to evaluate targeted organic growth opportunities designed to improve its utilization of existing, owned assets. During the second quarter, the Company invested in several initiatives designed to grow its market presence as a collector and recycler of used automotive waste streams. The Company expects to provide an update on these activities during the fourth quarter 2020.
  • Maintain capital discipline. Given current market volatility, Vertex remains focused on conserving available liquidity to support the long-term growth of the business. As of June 30, 2020, the Company had total cash and available liquidity of $19.6 million, versus $20.2 million as of March 31, 2020. Included in total cash amounts are cash held in the Company's special purpose vehicles (SPVs) relating to its Myrtle Grove and Heartland assets, which are limited to use by each SPV, respectively.

MANAGEMENT COMMENTARY

"As expected, our second quarter performance was impacted by a combination of low UMO availability, extended downtime at our largest refinery and a year-over-year decline in refined product margins, all of which were attributable to the historic disruption caused by the COVID-19 pandemic," stated Benjamin P. Cowart, President and CEO of Vertex. "In response to rapidly changing market dynamics, our management team took decisive action to reduce costs during the second quarter, while maintaining balance sheet discipline to support the long-term growth of our business."

"Business conditions improved during July, as shelter-in-place orders were lifted," continued Cowart. "Since the start of the third quarter, both our Marrero and Heartland refineries have operated near peak utilization, as UMO feedstock availability has returned to near-historical levels. In July, total UMO collections increased by nearly 40% versus June levels."

"During the second quarter, UMO prices were driven to elevated levels, given a lack of feedstock availability," continued Cowart. "Elevated UMO pricing resulted in less favorable product spreads, which impacted our profitability during the second quarter. As economic activity further accelerates and UMO supplies become more readily available, we expect to see a decline in feedstock prices and improved realized margins during the second half of 2020."

BALANCE SHEET

As of June 30, 2020, the Company had total cash and availability on its lending facility of $17.8 million and $1.8 million, respectively.

Vertex had total term debt outstanding of $10.2 million as of June 30, 2020, which included $4.2 million related to funds received under the Paycheck Protection Program (the "PPP") which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). Under the terms of the PPP, the entire balance of the loan may be forgiven to the extent that cash proceeds are used for qualifying expenses. As of the date of this release, the Company has allocated the entirety of PPP funds received toward qualifying expenses.

CONFERENCE CALL AND WEBCAST

A conference call will be held today at 9:00 A.M. ET to review the Company's financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of Vertex's website at www.vertexenergy.com. To listen to a live broadcast, go to 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 Live: 844-602-0380

To listen to a replay of the teleconference, which will be available through August 18, 2020:

Domestic Replay: 877-481-4010

Conference ID: 36289

ABOUT VERTEX ENERGY

Houston-based Vertex Energy, Inc. (NASDAQ: VTNR) is a specialty refiner of alternative feedstocks and marketer of high-purity petroleum products. Vertex is one of the largest processors of used motor oil in the U.S., with operations located in Houston and Port Arthur (TX), Marrero (LA) and Heartland (OH). Vertex also co-owns a facility, Myrtle Grove, located on a 41-acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydro-processing and plant infrastructure assets, that include nine million gallons of storage. The Company has built a reputation as a key supplier of Group II+ and Group III base oils to the lubricant manufacturing industry throughout North America.

FORWARD-LOOKING STATEMENTS

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," "hopes," "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 takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex Energy.

CONTACT

Investor Relations
720.778.2415
[email protected]

VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 
  June 30,
2020
    December 31,
2019
 
ASSETS
           
Current assets
           
Cash and cash equivalents
  17,754,312     4,099,655  
Restricted cash
    100,125       100,170  
Accounts receivable, net
    9,163,208       12,138,078  
Federal income tax receivable
    -       68,606  
Inventory
    3,812,752       6,547,479  
Prepaid expenses and other current assets
    2,499,104       4,452,920  
Total current assets
    33,329,501       27,406,908  
 
               
Noncurrent assets
               
Fixed assets, at cost
    70,977,927       69,469,548  
Less accumulated depreciation
    (26,992,136 )     (24,708,151 )
Fixed assets, net
    43,985,791       44,761,397  
Finance lease right-of-use assets
    1,613,661       851,570  
Operating lease right-of use assets
    34,739,105       35,586,885  
Intangible assets, net
    10,363,179       11,243,800  
Deferred income taxes
    -       68,605  
Other assets
    1,219,301       840,754  
TOTAL ASSETS
  125,250,538     120,759,919  
 
               
LIABILITIES, TEMPORARY EQUITY, AND EQUITY
               
Current liabilities
               
Accounts payable
  8,373,449     7,620,098  
Accrued expenses
    2,950,439       5,016,132  
Dividends payable
    360,203       389,176  
Finance lease liability-current
    450,835       217,164  
Operating lease liability-current
    6,004,500       5,885,304  
Current portion of long-term debt, net of unamortized finance costs
    2,814,306       2,017,345  
Derivative commodity liability
    538,297       375,850  
Revolving note
    -       3,276,230  
Total current liabilities
    21,492,029       24,797,299  
Long-term liabilities
               
Long-term debt, net of unamortized finance costs
    7,440,308       12,433,000  
Finance lease liability-long-term
    1,103,231       610,450  
Operating lease liability-long-term
    28,734,605       29,701,581  
Derivative warrant liability
    381,434       1,969,216  
Total liabilities
    59,151,607       69,511,546  
COMMITMENTS AND CONTINGENCIES (Note 3)
    -       -  
 
               
TEMPORARY EQUITY
               
Series B Convertible Preferred Stock, $0.001 par value per share;
10,000,000 shares designated, 3,941,704 and 3,826,055 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively with a liquidation preference of $12,219,282 and $11,860,771 at June 30, 2020 and December 31, 2019, respectively.
    12,219,282       11,006,406  
 
               
Series B1 Convertible Preferred Stock, $0.001 par value per share;
17,000,000 shares designated, 7,109,305 and 9,028,085 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively with a liquidation preference of $11,090,516 and $14,083,813 at June 30, 2020 and December 31, 2019, respectively.
    10,366,624       12,743,047  
 
               
Redeemable non-controlling interest
    28,334,401       4,396,894  
Total Temporary Equity
    50,920,307       28,146,347  
EQUITY
               
50,000,000 of total Preferred shares authorized:
               
Series A Convertible Preferred Stock, $0.001 par value;
5,000,000 shares designated, 419,859 shares issued and outstanding at June 30, 2020 and December 31, 2019, with a liquidation preference of $625,590 at June 30, 2020 and December 31, 2019.
    420       420  
 
               
Series C Convertible Preferred Stock, $0.001 par value;
44,000 shares designated, no shares issued or outstanding.
    -       -  
 
               
Common stock, $0.001 par value per share;
750,000,000 shares authorized; 45,554,841 and 43,395,563 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively.
    45,555       43,396  
Additional paid-in capital
    94,233,371       81,527,351  
Accumulated deficit
    (79,979,484 )     (59,246,514 )
Total Vertex Energy, Inc. stockholders' equity
    14,299,862       22,324,653  
Non-controlling interest
    878,762       777,373  
Total Equity
    15,178,624       23,102,026  
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY
  125,250,538     120,759,919  
                 

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
  Three Months Ended June 30,     Six Months Ended June 30,  
 
  2020     2019     2020     2020  
Revenues
  21,374,127     43,657,292     57,577,556     82,978,004  
Cost of revenues (exclusive of depreciation and amortization shown separately below)
    22,197,805       36,515,421       49,034,659       71,359,770  
Gross profit (loss)
    (823,678 )     7,141,871       8,542,897       11,618,234  
 
                               
Operating expenses:
                               
Selling, general and administrative expenses
    6,030,560       6,028,859       12,731,078       11,376,600  
Depreciation and amortization
    1,713,461       1,780,890       3,348,008       3,517,903  
Total operating expenses
    7,744,021       7,809,749       16,079,086       14,894,503  
Loss from operations
    (8,567,699 )     (667,878 )     (7,536,189 )     (3,276,269 )
Other income (expense):
                               
Other income
    20       1,918       100       1,918  
Gain on sale of assets
    12,344       29,150       12,344       31,443  
Gain (loss) on change in value of derivative warrant liability
    (110,965 )     746,017       1,587,782       (959,077 )
Interest expense
    (222,173 )     (738,972 )     (562,259 )     (1,496,775 )
Total other income (expense)
    (320,774 )     38,113       1,037,967       (2,422,491 )
Loss before income tax
    (8,888,473 )     (629,765 )     (6,498,222 )     (5,698,760 )
Income tax benefit (expense)
    -       -       -       -  
Net loss
    (8,888,473 )     (629,765 )     (6,498,222 )     (5,698,760 )
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest
    109,165       (202,329 )     (289,444 )     (307,760 )
Net loss attributable to Vertex Energy, Inc.
    (8,997,638 )     (427,436 )     (6,208,778 )     (5,391,000 )
 
                               
Accretion of redeemable noncontrolling interest to redemption value
    (1,381,889 )     -       (12,348,238 )     -  
Accretion of discount on Series B and B1 Preferred Stock
    (539,235 )     (532,925 )     (1,471,238 )     (1,093,600 )
Dividends on Series B and B1 Preferred Stock
    (360,217 )     (412,875 )     (704,716 )     (819,670 )
Net loss available to common shareholders
  (11,278,979 )   (1,373,236 )   (20,732,970 )   (7,304,270 )
Loss per common share
                               
Basic
  (0.25 )   (0.03 )   (0.46 )   (0.18 )
Diluted
  (0.25 )   (0.03 )   (0.46 )   (0.18 )
Shares used in computing earnings per share
                               
Basic
    45,554,841       40,294,870       45,463,600       40,245,671  
Diluted
    45,554,841       40,294,870       45,463,600       40,245,671  
                                 

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(UNAUDITED)

  Six Months Ended June 30, 2020  
 
  Common Stock     Series A Preferred     Series C Preferred                          
 
  Shares     $0.001 Par     Shares     $0.001 Par     Shares     $0.001 Par     Additional Paid-In Capital     Retained Earnings     Non-controlling Interest     Total Equity  
Balance on January 1, 2020
    43,395,563     43,396       419,859     420       -     -     81,527,351     (59,246,514 )   777,373     23,102,026  
Purchase of shares of consolidated subsidiary
    -       -       -       -       -       -       (71,171 )     -       -       (71,171 )
Adjustment of carrying mount of non-controlling interest
    -       -       -       -       -       -       9,091,068       -       -       9,091,068  
Share based compensation expense
    -       -       -       -       -       -       163,269       -       -       163,269  
Conversion of Series B1 Preferred stock to common
    2,159,278       2,159       -       -       -       -       3,366,315       -       -       3,368,474  
Dividends on Series B and B1
    -       -       -       -       -       -       -       (344,499 )     -       (344,499 )
Accretion of discount on Series B and B1
    -       -       -       -       -       -       -       (932,003 )     -       (932,003 )
Accretion of redeemable non-controlling interest to redemption value
    -       -       -       -       -       -       -       (10,966,349 )     -       (10,966,349 )
Net income
    -       -       -       -       -       -       -       2,788,860       119,268       2,908,128  
Balance on March 31, 2020
    45,554,841     45,555       419,859     420     -     -     94,076,832     (68,700,505 )   896,641     26,318,943  
Share based compensation expense
    -       -       -       -       -       -       156,539       -       -       156,539  
Dividends on Series B and B1
    -       -       -       -       -       -       -       (360,217 )     -       (360,217 )
Accretion of discount on Series B and B1
    -       -       -       -       -       -       -       (539,235 )     -       (539,235 )
Accretion of redeemable non-controlling interest to redemption value
    -       -       -       -       -       -       -       (1,381,889 )     -       (1,381,889 )
Net loss
    -       -       -       -       -       -       -       (8,997,638 )     (17,879 )     (9,015,517 )
Balance on June 30, 2020
    45,554,841     45,555       419,859     420     -     -     94,233,371     (79,979,484 )   878,762     15,178,624  
  Six Months Ended June 30, 2019  
 
  Common Stock     Series A Preferred     Series C Preferred                          
 
  Shares     $0.001 Par     Shares     $0.001 Par     Shares     $0.001 Par     Additional Paid-In Capital     Retained Earnings     Non-controlling Interest     Total Equity  
Balance on January 1, 2019
    40,174,821     40,175       419,859     420       -     -     75,131,122     (47,800,886 )   1,438,213     28,809,044  
Share based compensation expense
    -       -       -       -       -       -       143,063       -       -       143,063  
Conversion of Series B1 Preferred stock to common
    96,160       96       -       -       -       -       149,914       -       -       150,010  
Dividends on Series B and B1
    -       -       -       -       -       -       -       (406,795 )     -       (406,795 )
Accretion of discount on Series B and B1
    -       -       -       -       -       -       -       (560,675 )     -       (560,675 )
Net loss
    -       -       -       -       -       -       -       (4,963,564 )     (105,431 )     (5,068,995 )
Balance on March 31, 2019
    40,270,981     40,271       419,859     420       -     -     75,424,099     (53,731,920 )   1,332,782     23,065,652  
Exercise of options to common
    75,925       76       -       -       -       -       4,424       -       -       4,500  
Share based compensation expense
    -       -       -       -       -       -       171,002       -       -       171,002  
Distribution to noncontrolling
    -       -       -       -       -       -       -       -       (285,534 )     (285,534 )
Dividends on Series B and B1
    -       -       -       -       -       -       -       (412,875 )     -       (412,875 )
Accretion of discount on Series B and B1
    -       -       -       -       -       -       -       (532,925 )     -       (532,925 )
Net income
    -       -       -       -       -       -       -       (427,436 )     (202,329 )     (629,765 )
Balance on June 30, 2019
    40,346,906     40,347       419,859     420       -     -     75,599,525     (55,105,156 )   844,919     21,380,055  
                                                                                 

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)

 

    Six Months Ended  
 
  June 30,
2020
    June 30,
2019
 
Cash flows from operating activities
           
Net loss
  (6,498,222 )   (5,698,760 )
Adjustments to reconcile net loss to cash provided by operating activities
               
Stock based compensation expense
    319,809       314,065  
Depreciation and amortization
    3,348,008       3,517,903  
Gain on sale of assets
    (12,344 )     (31,443 )
Contingent consideration reduction
    -       (15,564 )
Bad debt and reduction in allowance for bad debt
    65,443       (360,926 )
(Decrease) increase in fair value of derivative warrant liability
    (1,587,782 )     959,077  
(Gain) loss on commodity derivative contracts
    (4,484,798 )     1,069,778  
Net cash settlements on commodity derivatives
    4,781,183       (967,708 )
Amortization of debt discount and deferred costs
    47,826       286,954  
Changes in operating assets and liabilities
               
Accounts receivable
    4,986,003       (2,111,591 )
Inventory
    3,711,239       2,338,814  
Prepaid expenses
    1,834,361       1,948,771  
Accounts payable
    (269,740 )     (518,050 )
Accrued expenses
    (2,150,272 )     (187,349 )
Other assets
    (378,547 )     -  
Net cash provided by operating activities
    3,712,167       543,971  
Cash flows from investing activities
               
Acquisition
    (1,822,690 )     -  
Internally developed software
    (49,229 )     -  
Purchase of fixed assets
    (1,526,379 )     (2,419,599 )
Proceeds from sale of fixed assets
    22,844       86,846  
Net cash used in investing activities
    (3,375,454 )     (2,332,753 )
Cash flows from financing activities
               
Payments on finance leases
    (162,312 )     (61,638 )
Proceeds from exercise of stock options
    -       4,500  
Distribution VRM LA
    -       (285,534 )
Contributions received from redeemable noncontrolling interest
    21,000,000       -  
Line of credit (payments) proceeds, net
    (3,276,230 )     1,235,251  
Proceeds from note payable (includes proceeds from PPP note)
    4,374,643       187,501  
Payments on note payable
    (8,618,202 )     (1,542,903 )
Net cash provided by (used in) financing activities
    13,317,899       (462,823 )
Net change in cash, cash equivalents and restricted cash
    13,654,612       (2,251,605 )
Cash, cash equivalents, and restricted cash at beginning of the period
    4,199,825       2,849,831  
Cash, cash equivalents, and restricted cash at end of period
  17,854,437     598,226  
 
               
SUPPLEMENTAL INFORMATION
           
Cash paid for interest
  562,259     1,221,363  
Cash paid for taxes
  -     -  
NON-CASH INVESTING AND FINANCING TRANSACTIONS
               
Conversion of Series B1 Preferred Stock into common stock
  3,368,474     150,010  
Accretion of discount on Series B and B1 Preferred Stock
  1,471,238     1,093,600  
Dividends-in-kind accrued on Series B and B1 Preferred Stock
  704,716     819,670  
Equipment acquired under finance leases
  888,764     621,000  
Initial adjustment of carrying amount redeemable noncontrolling interest
  9,091,068     -  
Accretion of redeemable noncontrolling interest to redemption value
  12,348,238     -  
                 

Reconciliation of Net Loss attributable to Vertex Energy, Inc., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA*

 

    For the Three Months Ended     For the Trailing Twelve Months  
 
  June 30, 2020     June 30, 2019     June 30, 2020     June 30, 2019  
 
                       
Net income (loss)
  ( 8,888,473 )   (629,765 )   (6,285,015 )   (8,136,060 )
Add (deduct):
                       
Interest Income
    (20 )     (1,918 )     (879 )     (1,918 )
Interest Expense
    222,173       738,972       2,135,555       3,128,659  
Depreciation and amortization
    1,713,461       1,780,890       7,010,194       7,081,738  
EBITDA
    (6,952,859)       1,888,179       2,859,855       2,072,419  
 
                       
Add (deduct):
                       
Loss (gain) on change in value of derivative warrant liability
    110,965       (746,017 )     (2,059,335 )     239,523  
Unrealized (gain) loss on derivative instruments
    1,344,093       558,360       429,740       61,944  
Stock-based compensation
    156,539       171,002       648,585       644,180  
Adjusted EBITDA *
  (5,341,262)     1,871,524     1,878,845     3,018,066  
 
                       
Net cash provided by (used in)
operating activities
    597,159       2,520,851       5,641,363       2,725,294  
Add (deduct): capital expenditures
    (1,084,199 )     (1,644,702 )     (3,014,469 )     (3,348,625 )
Free cash flow
    (487,040 )     876,149       2,626,894       (623,331 )
 
                               

* EBITDA, Adjusted EBITDA, and free cash flows are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.

EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense and gain (loss) on change in value of derivative warrant liability and unrealized gains and losses on derivative instruments for hedging activities. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA 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 GAAP. Some of these limitations are:

  • EBITDA and Adjusted EBITDA do not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
  • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs;
  • EBITDA and Adjusted EBITDA 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, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and
  • Other companies in this industry may calculate EBITDA and Adjusted EBITDA differently than Vertex Energy does, limiting its usefulness as a comparative measure.

Free cash flow represents net cash provided by (used in) operating activities less capital expenditures.

SOURCE: Vertex Energy, Inc. 

Vertex Energy, Inc.
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VTNR
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