Vertex Energy(US:VTNR)2024-08-08 10:30Financial Performance - Vertex Energy reported a net loss of $53.8 million, or $0.58 per fully-diluted share, for Q2 2024, compared to a net loss of $17.7 million, or $0.19 per share in Q1 2024[11]. - Adjusted EBITDA for Q2 2024 was $(22.4) million, a significant decrease from $18.6 million in Q1 2024, primarily due to a 28% decrease in crack spreads[11]. - Total revenues for Q2 2024 were $750,061, an increase from $734,893 in Q2 2023, representing a growth of approximately 2%[30]. - Gross profit for the six months ended June 30, 2024, was $35,352, compared to $66,067 for the same period in 2023, indicating a decline of about 46.5%[30]. - The net loss attributable to Vertex Energy, Inc. for Q2 2024 was $53,773, compared to a net loss of $81,401 in Q2 2023, showing an improvement of approximately 34%[30]. - The company reported a loss from operations of $(38,320) for Q2 2024, compared to $(45,050) in Q2 2023, indicating a reduction in operational losses of about 15.3%[30]. - The company reported a net loss from continuing operations of $(35,570) thousand for the three months ended June 30, 2024, compared to a loss of $(53,845) thousand for the same period in 2023, showing an improvement of approximately 34%[36]. - The company incurred stock-based compensation expense of $861 thousand for the six months ended June 30, 2024, compared to $733 thousand for the same period in 2023, representing an increase of approximately 17.5%[34]. - The company reported a gross profit of $246 thousand for the three months ended June 30, 2024, compared to a gross loss of $(3,945) thousand for the same period in 2023, indicating a turnaround in profitability[36]. - The company experienced a net cash decrease of $(61,710) thousand for the six months ended June 30, 2024, compared to $(94,052) thousand for the same period in 2023, indicating a reduction in cash outflow[34]. Operational Highlights - The Mobile Refinery achieved a conventional throughput of 67,758 barrels per day (bpd) in Q2 2024, with finished high-value light products making up approximately 64% of total production[4]. - Total renewable throughput at the Mobile Renewable Diesel facility was 3,092 bpd in Q2 2024, with a production yield of 99.7%[10]. - The company is transitioning its hydrocracking unit from renewable fuels to conventional fuels, with an expected operational target in Q4 2024[6]. - Financial guidance for Q3 2024 includes a conventional throughput volume target of 55,000 to 60,000 bpd and direct operating expenses projected between $5.52 and $6.02 per barrel[14]. - The future production of the Mobile Refinery includes both renewable diesel and conventional production, with specific production rates and yields yet to be determined[20]. - Total throughput for the six months was 69,502 barrels per day (bpd), with Conventional at 65,911 bpd and Renewable at 3,591 bpd[45]. Financial Position - As of June 30, 2024, Vertex had total debt of $303.8 million and cash and cash equivalents of $18.9 million, resulting in a net debt position of $284.9 million[11]. - Total current assets decreased to $276,321 as of June 30, 2024, down from $352,031 at the end of 2023, a reduction of about 21.5%[29]. - Current liabilities increased significantly to $494,555 as of June 30, 2024, compared to $328,826 at the end of 2023, an increase of approximately 50.4%[29]. - The accumulated deficit grew to $(258,886) as of June 30, 2024, compared to $(187,379) at the end of 2023, reflecting an increase of about 38%[31]. - Total assets decreased to $772,368 as of June 30, 2024, down from $854,624 at the end of 2023, a decline of approximately 9.6%[29]. - Total equity decreased to $129,549 as of June 30, 2024, down from $200,387 at the end of 2023, a decline of approximately 35.4%[29]. - Long-term debt and lease obligations increased to $303,772 thousand as of June 30, 2024, compared to $244,910 thousand a year earlier[61]. - Net long-term debt rose to $284,909 thousand, up from $192,775 thousand in the previous year, reflecting increased leverage[61]. - The company's net leverage ratio significantly increased to 22.5x as of June 30, 2024, compared to 2.5x a year prior, indicating heightened financial risk[61]. Strategic Initiatives - Vertex secured new loans of $15 million and $20 million to enhance liquidity and appointed Seth Bullock as Chief Restructuring Officer to assist in navigating financial challenges[2][3]. - The company is engaged in reviewing potential joint ventures, acquisitions, and strategic transactions to enhance shareholder value[20]. - The company anticipates the need for additional capital to complete capital projects and satisfy liabilities, including amounts owed under its outstanding term loan[20]. - The company reported a significant focus on maintaining supplier relationships and obtaining adequate supplies of feedstocks to ensure operational efficiency[20]. - The company emphasizes the importance of retaining key personnel and managing competition within the industry[20]. Risks and Uncertainties - The company is subject to various risks, including changes in commodity prices and potential disruptions in infrastructure that could impact operations[20]. - The financial projections are based on numerous assumptions, including industry performance and economic conditions, which may impact future results[22]. - The company cautions that actual results may vary significantly from projections due to various uncertainties and risks[22].