Vertex Energy — Q4 2023 Earnings Presentation
29 slides from Vertex Energy's earnings presentation, Feb 28, 2024
Slide 1: Fourth Quarter & Full Year 2023 Results Summary Presentation
Fourth Quarter & Full Year 2023 Results Summary Presentation February 2024
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward - looking statements 2 Forward - Looking Statements Certain of the matters discussed in this presentation which are not statements of historical fact constitute forward - looking sta tements within the meaning of the securities laws, including the Private Securities Litigation Ref
Slide 3: Disclaimer: Non-GAAP Financial Measures
DISCLAIMER Non - GAAP Financial Measures 3 Non - GAAP Financial Measures and Key Performance Measures In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), in this p res entation we also present certain non - U.S. GAAP financial measures
Slide 4: Fourth Quarter & Full Year 2023 Performance Summary
FOURTH QUARTER & FULL YEAR 2023 Performance Summary
Slide 5: 4Q23 Performance Indicators
4Q23 Performance Indicators COMPANY PERFORMANCE SUMMARY Fourth Quarter 2023 5 1. A full - reconciliation of GAAP to Non - GAAP metrics is provided in the appendix of this presentation 2. Net debt defined as total long - term debt outstanding less cash and equivalents 3. Net leverage defined as net d
Slide 6: Mobile Refinery Performance Indicators
Mobile Performance Indicators MOBILE REFINERY PERFORMANCE Fourth Quarter 2023 6 • Operated at 89% conventional capacity utilization in 4Q23, with total crude throughput of 67,083 barrels per day (bpd). Full year conventional throughput of 73,734 or 98% capacity utilization reflects strength and reli
Slide 7: 2023 Performance Indicators
2023 Performance Indicators COMPANY PERFORMANCE SUMMARY Full Year 2023 7 1. A full - reconciliation of GAAP to Non - GAAP metrics is provided in the appendix of this presentation 2. Net debt defined as total long - term debt outstanding less cash and equivalents 3. Net leverage defined as net debt (
Slide 8: Renewable Diesel Update
RENEWABLE DIESEL UPDATE 8 Proven Production with Continued Feedstock Diversification Progress • Soybean Oil, Tallow, DCO 1 , and Canola completed • Sampling and Testing underway for UCO 2 Proven Feedstocks • Renewable Diesel Fuel Primary Products • Phase I Capex: $110 - 115 million ( completed ) Pro
Slide 9: Domestic Fuels Demand
5 6 7 8 9 10 11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '17-'23 '17-'23 Average 2022 2023 2024 DOMESTIC FUELS DEMAND Conventional Refined Fuels Demand Remains Strong 9 US Gasoline Demand ( MMbpd ) US Distillate Demand ( MMbpd ) 3 4 5 6 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '17-'23
Slide 10: Domestic Fuels Inventories Remain Tight
DOMESTIC FUELS INVENTORIES REMAIN TIGHT Distillate Inventory Levels Remain Below 5 - Year Average, Gasoline Inventory Levels Building US Gasoline Inventories 10 ( MMbbl ) US Distillate Inventories ( MMbbl ) 80 100 120 140 160 180 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '17-'23 '17-'23 Av
Slide 11: Domestic Fuels Production Levels
DOMESTIC FUELS PRODUCTION LEVELS Production Levels In - Line With Historical Averages US Conventional Gasoline Production 11 ( MMbpd ) US Distillate Production ( MMbpd ) 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '17-'23 '17-'23 Average 2022 2023 2024 5.0 6.0
Slide 12: Gasoline & Diesel Futures Pricing
$1.75 $2.00 $2.25 $2.50 $2.75 $/Gal COMMODITIES FUTURES MARKETS Gasoline & Diesel Futures Pricing Reflects Tightening Margin Environment In 2024 12 Gasoline Monthly Futures Price ($/Gal) ULSD Monthly Futures Price ($/Gal) $2.00 $2.25 $2.50 $2.75 $3.00 $/Gal FY 2024 4Q24 3Q24 2Q24 1Q24 FY 2023 4Q23 3
Slide 13: Crude Futures Curve Remains Backwardated
Crude Futures Curve Remains Backwardated 13 COMMODITIES FUTURES MARKETS FY 2024 4Q24 3Q24 2Q24 1Q24 FY 2023 4Q23 3Q23 2Q23 1Q23 $2.21 $2.12 $2.06 $2.30 $2.36 $2.42 $2.19 $2.37 $2.58 $2.53 Gasoline ($/gal) $2.47 $2.36 $2.43 $2.51 $2.58 $2.80 $2.82 $3.04 $2.44 $2.90 ULSD ($/gal) $73.97 $71.99 $73.46 $
Slide 14: Balance Sheet Update
BALANCE SHEET UPDATE Streamlining Of Balance Sheet Remains a Priority 14 Outstanding Debt Details ($/MM) Debt Maturity Schedule ($/MM) ► Current total long - term debt $286.0 million ► Current cash & equivalents $80.6 million ► Net long - term debt = $205.5 million ► 12/31/23 Net Leverage = 12.0x ►
Slide 15: Financial and Operating Guidance: Hedge Position
Hedge Position Contract Details FINANCIAL AND OPERATING GUIDANCE First Quarter 2024 Fixed Price Hedges 15 • Deteriorating margin environment beginning in early 4Q23 as well as ongoing capital preservation • Opportunistic sale of fixed price ULSD swaps • Average of 38% of expected 1Q 2024 ULSD & dist
Slide 16: Projected Financial Guidance: First Quarter 2024 Outlook
Projected Financial Guidance COMMODITY PRICE RISK MANAGEMENT First Quarter 2024 Outlook 16 Management Commentary • For the first quarter 2024, the Company expects the Mobile Refinery to generate total throughput of between 60,000 to 63,000 bpd, reflecting between 80% and 84% total conventional facil
Slide 17: Our Strategic Focus
OUR STRATEGIC FOCUS 17 ASSET UTILIZATION • Target investments expected to drive long - term profitability at Mobile Refinery • Leverage expertise with complementary assets in adjacent markets • Vertically integrate from feedstock to retail products MARGIN CAPITALIZATION • Conventional distillate and
Slide 18: Appendix
APPENDIX
Slide 19: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 19 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. In thousands Conventional Renewable Mobile
Slide 20: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 20 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. In thousands Conventional Renewable Mobile
Slide 21: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 21 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. In thousands Conventional Renewable Mobile
Slide 22: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 22 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. In thousands Conventional Renewable Mobile
Slide 23: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 23 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. In thousands Conventional Renewable Mobile
Slide 24: EBITDA and Adjusted EBITDA to Net Loss from Operations
NON - GAAP RECONCILIATION 24 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income (loss) $ (63,865) $ 44,418 $ (71,973) $ 1,997 Depreciation and am
Slide 25: EBITDA and Adjusted EBITDA to Net Loss from Operations
NON - GAAP RECONCILIATION 25 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands Conventional Renewable Net income (loss) $ (11,112) $ (30,266) $ (2,424) $ (43,801) $ (1,670) $ (18,395) $ (63,865) Depreciation and amortization 3,
Slide 26: EBITDA and Adjusted EBITDA to Net Loss from Operations
NON - GAAP RECONCILIATION 26 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands Mobile Refinery Legacy Refining & Marketing Total Refining & Marketing Black Oil Corporate Consolidated Net income (loss) $ 56,839 $ (1,860) $ 54,97
Slide 27: EBITDA and Adjusted EBITDA to Net Loss from Operations
NON - GAAP RECONCILIATION 27 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands Conventional Renewable Net income (loss) $ 68,574 $ (72,537) $ (6,349) $ (10,312) $ 49,260 $ (110,922) $ (71,973) Depreciation and amortization 14,9
Slide 28: EBITDA and Adjusted EBITDA to Net Loss from Operations
NON - GAAP RECONCILIATION 28 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands Mobile Refinery Legacy Refining & Marketing Total Refining & Marketing Black Oil Corporate Consolidated Net income (loss) $ 51,247 $ (4,007) $ 47,24
Slide 29: Long-Term Debt to Net Long-Term Debt and Net Leverage
NON - GAAP RECONCILIATION 29 Unaudited Reconciliation of Long - Term Debt to Net Long - Term Debt and Net Leverage In thousands December 31, 2023 December 31, 2022 Long-Term Debt: Senior Convertible Note $ 15,230 $ 95,178 Term Loan 2025 195,950 165,000 Finance lease liability long-term 66,206 45,164