Vertex Energy — Q3 2023 Earnings Presentation
27 slides from Vertex Energy's earnings presentation, Nov 7, 2023
Slide 1: Third Quarter 2023 Quarterly Results Summary Presentation
Third Quarter 2023 Quarterly Results Summary Presentation November 2023
Slide 2: 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: Non-GAAP Financial Measures and Key Performance 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 presentation we also present certain non - U.S. GAAP financial measures
Slide 4: Third Quarter 2023 Performance Summary
THIRD QUARTER 2023 Performance Summary
Slide 5: 3Q23 Performance Indicators
3Q23 Performance Indicators COMPANY PERFORMANCE SUMMARY Third 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 de
Slide 6: Mobile Refinery Performance Indicators
Mobile Performance Indicators MOBILE REFINERY PERFORMANCE Third Quarter 2023 6 • Operated at 107% conventional capacity utilization in 3Q23, with total crude throughput of 80,171 barrels per day (bpd) • Conventional fuel business operations generated $129.5 million of fuel gross margin before RIN ex
Slide 7: Renewable Diesel Update
RENEWABLE DIESEL UPDATE 7 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 8: Domestic Fuels Demand
5 6 7 8 9 10 11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '17-'22 '17-'22 Average 2022 2023 DOMESTIC FUELS DEMAND Conventional Refined Fuels Demand Remains Strong 8 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-'22 '17-'
Slide 9: 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 9 ( MMbbl ) US Distillate Inventories ( MMbbl ) Source: Bloomberg; data as of 10/26/2023 80 100 120 140 160 180 200 Jan Feb Mar Apr May Jun Ju
Slide 10: Domestic Fuels Production Levels
DOMESTIC FUELS PRODUCTION LEVELS Production Levels In - Line With Historical Averages US Conventional Gasoline Production 10 ( MMbpd ) US Distillate Production ( MMbpd ) Source: Bloomberg; data as of 10/26/2023 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-'
Slide 11: Commodities Futures Markets: Gasoline & Diesel
$1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00 $/Gal COMMODITIES FUTURES MARKETS Gasoline & Diesel Futures Pricing Reflects More Normalized Margin Environment In 2024 11 Gasoline Monthly Futures Price ($/Gal) ULSD Monthly Futures Price ($/Gal) $2.00 $2.20 $2.40 $2.60 $2.80 $3.00 $/Gal FY 2024 4Q24 3Q24 2
Slide 12: Crude Futures Curve Remains Backwardated
Crude Futures Curve Remains Backwardated 12 COMMODITIES FUTURES MARKETS FY 2024 4Q24 3Q24 2Q24 1Q24 FY 2023 4Q23 3Q23 2Q23 1Q23 $2.34 $2.17 $2.41 $2.48 $2.28 $2.52 $2.41 $2.69 $2.61 $2.37 Gasoline ($/gal) $2.66 $2.60 $2.62 $2.66 $2.76 $2.86 $2.62 $3.00 $2.65 $3.17 ULSD ($/gal) $80.11 $77.68 $79.13 $
Slide 13: Balance Sheet Update
BALANCE SHEET UPDATE Reduction of High Interest Term Loan, Convertible Notes, Remains a Priority 13 Outstanding Debt Details ($/MM) Debt Maturity Schedule ($/MM) ► Current total long - term debt $242.3 million ► Current cash & equivalents $79.3 million ► Net long - term debt = $163.0 million ► 9/30/
Slide 14: Hedge Position Contract Details
Hedge Position Contract Details FINANCIAL AND OPERATING GUIDANCE Fourth Quarter 2023 Fixed Price Hedges 14 • Seasonal weakness in gasoline markets anticipated • Opportunistic sale of fixed price gasoline swaps • Average of 25% of expected 4Q 2023 gasoline production hedged • Weighted average fixed p
Slide 15: Projected Financial Guidance: Fourth Quarter 2023 Outlook
Projected Financial Guidance COMMODITY PRICE RISK MANAGEMENT Fourth Quarter 2023 Outlook 15 Management Commentary • For the fourth quarter 2023, the Company expects the Mobile Refinery to generate total throughput of between 68,000 to 71,000 bpd, reflecting between 91% and 95% total conventional fac
Slide 16: Our Strategic Focus
OUR STRATEGIC FOCUS 16 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 17: Appendix
APPENDIX
Slide 18: Gross Profit to Adjusted Gross Margin and Fuel Gross Margin
NON - GAAP RECONCILIATION 18 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 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: EBITDA and Adjusted EBITDA to Net Loss
NON - GAAP RECONCILIATION 22 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations In thousands September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income (loss) $ 19,534 $ 22,17
Slide 23: EBITDA and Adjusted EBITDA to Net Loss
NON - GAAP RECONCILIATION 23 Unaudited Reconciliation of EBITDA and Adjusted EBITDA to Net loss from Continued and Discontinued Operations 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
Slide 24: EBITDA and Adjusted EBITDA to Net Loss
NON - GAAP RECONCILIATION 24 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) $ 18,369 $ (2,251) $ 16,11
Slide 25: EBITDA and Adjusted EBITDA to Net Loss
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) $ 79,686 $ (42,272) $ (3,924) $ 33,490 $ 50,929 $ (111,726) $ (27,306) Depreciation and amortization 11,685
Slide 26: EBITDA and Adjusted EBITDA to Net Loss
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) $ (5,593) $ (2,147) $ (7,7
Slide 27: Long-Term Debt to Net Long-Term Debt and Net Leverage
NON - GAAP RECONCILIATION 27 Unaudited Reconciliation of Long - Term Debt to Net Long - Term Debt and Net Leverage In thousands September 30, 2023 September 30, 2022 December 31, 2022 Long-Term Debt: Senior Convertible Note $ 15,230 $ 95,178 $ 95,178 Term Loan 2025 148,013 165,000 165,000 Finance le