UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: August 14, 2014
Date of Earliest Event Reported: August 14, 2014

VERTEX ENERGY, INC.
(Exact name of registrant as specified in its charter)

Nevada
001-11476
94-3439569
(State or other jurisdiction
of incorporation)
(Commission File
Number)
(I.R.S. Employer
Identification No.)

1331 Gemini Street
Suite 250
Houston, Texas 77058
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (866) 660-8156

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[__]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[__]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[__]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[__]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

Item 2.02 Results of Operations and Financial Condition.

On August 14, 2014, Vertex Energy, Inc. (“Vertex”) issued a press release and will hold a conference call regarding its financial results for the three and six months ended June 30, 2014.  A copy of the press release, which includes information on the conference call, is furnished as Exhibit 99.1 to this Form 8-K.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01 Financial Statements And Exhibits.

Exhibit No.
  
Description
     
99.1*
  
Press Release of Vertex Energy, Inc., dated August 14, 2014

* Furnished herewith.


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
VERTEX ENERGY, INC.
   
Date: August 14, 2014
By: /s/ Chris Carlson
 
Chris Carlson
 
Chief Financial Officer
 
 

 
 
 
EXHIBIT INDEX
   
Exhibit No.
  
Description
     
99.1*
  
Press Release of Vertex Energy, Inc., dated August 14, 2014
 
* Furnished herewith.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ex99-1.htm
Exhibit 99.1
 
 
 
Investor Relations Contact
Marlon Nurse, DM
 
Senior VP – Investor Relations
 
212-564-4700
Vertex Energy, Inc.
 
VERTEX ENERGY ANNOUNCES SECOND QUARTER REVENUE
IMPROVES 105% FROM A YEAR AGO

Second Quarter EPS was $0.28

Volumes Sold up 84% in Second Quarter Year Over Year
 
Conference Call Today at 10:00 A.M. EDT
 
Houston, TX – August 14, 2014 Vertex Energy, Inc. (NASDAQ:VTNR), an environmental services company that recycles industrial waste streams and off-specification commercial chemical products, announced today its financial results for the second quarter and first half of 2014.
 
FINANCIAL HIGHLIGHTS FOR SECOND QUARTER 2014
 
·  
Revenue increased by 105% relative to the second quarter of last year to $72.1 million.
 
·  
Gross profit increased by approximately 248% relative to the same quarter last year to $8.9 million  Our gross profit as a percentage of sales increased from 7.28% during the second quarter of last year to 12.3% during the same period this year.
 
·  
Overall volumes of product sold—an important metric for our business as it illustrates our reach into the market--increased by 84% for the second quarter of 2014 vs. the second quarter of 2013.  This was primarily a result of further increases in Thermal Chemical Extraction Process (TCEP) production as well as vacuum gas oil (VGO) production from the facility formerly owned by Omega Refining and acquired in May 2014.
 
·  
Earnings per fully diluted share reached $0.28 for the second quarter of 2014 compared to $0.10 per fully diluted share in the second quarter of 2013.
 
FINANCIAL HIGHLIGHTS FOR FIRST HALF 2014
 
·  
Revenue increased in the first half of 2014 to $119.4 million compared to $68.4 million in the first half of 2013.
 
·  
Gross profit increased to $14.0 million in the first half of 2014 from $6.0 million in the first half of 2013.
 
·  
Earnings per fully diluted share reached 33 cents in the first half 2014 compared to 15 cents per fully diluted share in the first half of 2013.
 
 
1
 
OTHER HIGHLIGHTS
 
·  
Vertex continues to see improvements in the TCEP business both in terms of production and profitability.
 
·  
The integration of the Omega Refining business has gone very well as the company continues to work on building out its Regional Strategy.
 
·  
Vertex closed on approximately $17 million in financing to support our Regional Strategy and our expansion in the Western U.S. in particular. The company has a total of $19.6 million in cash on hand and still has its entire $20 million line of credit available.
 
Benjamin P. Cowart, Chairman and CEO of Vertex said, “The second quarter of this year showed an improvement in nearly all areas relative to the second quarter of 2013.  Our results reflect the acquisition and integration of Omega Refining. Although the results only reflect approximately two months of contribution by Omega Refining in this quarter, we are encouraged by the direction of the performance and what our team has managed to achieve in such a short time. Our balance sheet improved during the quarter as we now have roughly $20 million in cash and a $20 million line of credit available."
 
Mr. Cowart continued, "As we continue through the second half of 2014, we are excited about the opportunities ahead of us. The Omega Base Oil facility in Nevada was not included in our second quarter financials as the closing has not yet occurred. We expect to close on this facility in the third quarter. We are excited about our performance to date, and are encouraged that Vertex's Regional Strategy gives the company a strong position and flexibility in our industry as we have broadened our geographic footprint and our array of end products."
 
CONFERENCE CALL
 
Management will host a conference call today at 10:00 a.m. EDT. Those who wish to participate in the conference call may telephone 877-869-3847 from the U.S.  and International callers may telephone 201-689-8261, approximately 15 minutes before the call. A webcast will also be available under the Investor Relations section of the company’s website at: www.vertexenergy.com.
 
A digital replay will be available by telephone approximately two hours after the completion of the call until August 31, 2014, and may be accessed by dialing 877-660-6853 from the U.S. or 201-612-7415 for international callers, and using the Conference ID #13588185.
 
ABOUT VERTEX ENERGY, INC.
 
Vertex Energy, Inc. (NASDAQ: VTNR) is a leading environmental services company that recycles industrial waste streams and off-specification commercial chemical products. Its primary focus is recycling used motor oil and other petroleum by-product streams. Vertex purchases these streams from an established network of local and regional collectors and generators. Vertex also manages the transport, storage and delivery of the aggregated feedstock and product streams to end users, and manages the re-refining of a portion of its aggregated petroleum streams in order to sell them as higher-value end products. Vertex sells its aggregated petroleum streams as feedstock to other re-refineries and fuel blenders or as replacement fuel for use in industrial burners. The re-refining of used motor oil that Vertex manages takes place at its facility, which uses a proprietary Thermal Chemical Extraction Process (“TCEP”) technology. Based in Houston, Texas, Vertex also has offices in Georgia, Chicago, and California. More information on Vertex can be found at www.vertexenergy.com.
 
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," "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 also takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex Energy.
 
 
2
 
 
VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   
June 30,
 2014
  
December 31,
 2013
ASSETS
            
Current assets
            
Cash and cash equivalents
  
$
19,651,831
    
$
2,678,628
  
Accounts receivable, net
  
13,952,805
    
11,714,813
  
Accounts receivable-related party
  
9,335,321
    
—
  
Inventory
  
16,412,448
    
8,540,459
  
Prepaid expenses
  
3,530,682
    
1,161,721
  
Total current assets
  
62,883,087
    
24,095,621
  
Noncurrent assets
            
Other assets
  
2,925,096
    
—
  
Fixed assets, net
  
46,725,108
    
15,091,176
  
Intangible assets, net
  
16,733,683
    
15,172,816
  
Goodwill
  
4,922,353
    
4,502,743
  
Deferred federal income tax
  
5,684,000
    
5,684,000
  
Total noncurrent assets
  
76,990,240
    
40,450,735
  
TOTAL ASSETS
  
$
139,873,327
    
$
64,546,356
  
             
LIABILITIES AND EQUITY
            
Current liabilities
            
Accounts payable and accrued expenses
  
$
26,004,141
    
$
14,096,185
  
Capital leases
  
809,497
    
—
  
Current portion of long-term debt
  
2,417,335
    
1,956,847
  
        Total current liabilities
  
29,230,973
    
16,053,032
  
Long-term liabilities
            
Long-term debt
  
40,173,643
    
6,558,851
  
Contingent consideration
  
5,385,250
    
3,220,250
  
Line of credit
  
304,000
    
—
  
Deferred federal income tax
  
378,000
    
378,000
  
Total liabilities
  
75,471,866
    
26,210,133
  
Commitments and contingencies
            
             
EQUITY
            
Preferred stock, $0.001 par value per share:
            
50,000,000 shares authorized
            
Series A Convertible Preferred stock, $0.001 par value,
            
5,000,000 authorized and 675,558 and 1,319,002 issued
            
and outstanding at June 30, 2014 and December 31,
            
2013, respectively
  
675
    
1,319
  
Common stock, $0.001 par value per share;
            
750,000,000 shares authorized; 25,019,450 and 21,205,609
            
issued and outstanding at June 30, 2014 and
            
December 31, 2013, respectively
  
25,019
    
21,206
  
Additional paid-in capital
  
39,189,263
    
19,579,732
  
Retained earnings
  
25,405,251
    
17,542,004
  
 Total Vertex Energy, Inc. stockholders' equity
  
64,620,208
    
37,144,261
  
Non-controlling interest
  
(218,747
)
  
1,191,962
  
Total equity
  
64,401,461
    
38,336,223
  
             
TOTAL LIABILITIES AND EQUITY
  
$
139,873,327
    
$
64,546,356
  
 
 
3
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
   
Three Months Ended June 30,
  
Six Months Ended June 30,
   
2014
    
2013
    
2014
    
2013
  
Revenues
  
$
72,079,622
    
$
35,111,402
    
$
119,429,280
    
$
68,366,204
  
Cost of revenues
  
63,200,942
    
32,556,738
    
105,406,112
    
62,341,782
  
Gross profit
  
8,878,680
    
2,554,664
    
14,023,168
    
6,024,422
  
                         
Reduction of contingent liability
  
—
    
(1,850,000
)
  
—
    
(1,850,000
)
                         
Operating expenses:
                        
Selling, general and administrative expenses
  (exclusive of acquisition related expenses)
  
6,075,517
    
2,395,745
    
9,663,006
    
4,653,829
  
  Acquisition related expenses
  
1,959,418
    
—
    
2,559,830
    
—
  
Total operating expenses
  
8,034,935
    
2,395,745
    
12,222,836
    
4,653,829
  
                         
Income from operations
  
843,745
    
2,008,919
    
1,800,332
    
3,220,593
  
                         
Other income (expense)
                        
Other income
  
7
    
7,598
    
377
    
32,888
  
 Bargain purchase gain related to Omega acquisition
  
6,481,051
    
—
    
6,481,051
    
—
  
Other expense
  
(10,866
)
  
—
    
(10,866
)
  
(40,726
)
Interest expense
  
(657,235
)
  
(112,999
)
  
(733,046
)
  
(219,139
)
Total other income (expense)
  
5,812,957
    
(105,401
)
  
5,737,516
    
(226,977
)
                         
Income before income tax
  
6,656,702
    
1,903,518
    
7,537,848
    
2,993,616
  
                         
Income tax benefit (expense)
  
—
    
(12,248
)
  
—
    
(18,751
)
                         
Net income
  
$
6,656,702
    
$
1,891,270
    
$
7,537,848
    
$
2,974,865
  
                         
Net income attributable to non-controlling interest
  
344,380
    
—
    
325,399
    
—
  
                         
Net income attributable to Vertex Energy, Inc.
  
$
7,001,082
    
$
1,891,270
    
$
7,863,247
    
$
2,974,865
  
                         
Earnings  per common share
                        
Basic
  
$
0.31
    
$
0.11
    
$
0.36
    
$
0.17
  
Diluted
  
$
0.28
    
$
0.10
    
$
0.33
    
$
0.15
  
                         
Shares used in computing earnings per share
                        
Basic
  
22,826,102
    
17,409,034
    
22,025,316
    
17,243,762
  
Diluted
  
24,847,456
    
19,887,288
    
23,879,500
    
19,798,989
  
 
 
4
 
 
VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
     
   
Six Months Ended
   
June 30,
 2014
  
June 30,
 2013
             
Cash flows from operating activities
            
Net income
  
$
7,537,848
    
$
2,974,865
  
  Adjustments to reconcile net income to cash
  provided by operating activities
            
Stock based compensation expense
  
101,378
    
94,466
  
Depreciation and amortization
  
1,800,950
    
1,069,035
  
Gain on acquisition
  
(6,481,051
)
  
—
  
Deferred federal income tax
  
—
    
11,000
  
Reduction of contingent liability
  
—
    
(1,850,000
)
Changes in operating assets and liabilities
            
Accounts receivable
  
(2,237,992
)
  
(930,490
)
Accounts receivable-other
  
950,000
    
—
  
 Accounts receivable-related party
  
(1,027,321
)
  
—
  
Inventory
  
(3,679,989
)
  
(3,465,205
)
Prepaid expenses
  
(2,717,571
)
  
(45,451
)
Accounts payable
  
9,464,956
    
3,669,339
  
     Other assets
  
(79,806
)
  
—
  
Net cash provided by operating activities
  
3,631,402
    
1,527,559
  
             
Cash flows from investing activities
            
Acquisition of Omega
  
(28,764,099
)
  
(67,972
)
Refund of asset acquisition
  
—
    
675,558
  
Purchase of fixed assets
  
(2,635,882
)
  
(1,010,485
)
Net cash (used in) investing activities
  
(31,399,981
)
  
(402,899
)
             
Cash flows from financing activities
            
Line of credit (payments) proceeds, net
  
304,000
    
(750,000
)
Proceeds related to primary stock offering
  
15,803,000
    
—
  
Proceeds from note payable
  
40,509,906
    
—
  
Payments on note payable
  
(9,634,029
)
  
(922,873
)
Proceeds from exercise of common stock options and warrants
  
211,062
    
37,501
  
Debt issue costs
  
(2,452,157
)
  
—
  
Net cash provided by (used in) financing activities
  
44,741,782
    
(1,635,372
)
             
Net change in cash and cash equivalents
  
16,973,203
    
(510,712
)
             
Cash and cash equivalents at beginning of the period
  
2,678,628
    
807,940
  
             
Cash and cash equivalents at end of period
  
$
19,651,831
    
$
297,228
  
             
SUPPLEMENTAL INFORMATION
            
Cash paid for interest
  
$
733,046
    
$
199,737
  
Cash paid for income taxes
  
$
—
    
$
21,249
  
             
NON-CASH INVESTING AND FINANCING TRANSACTIONS
            
Conversion of Series A Preferred Stock into common stock
  
$
644
    
$
168
  
   Note payable for acquisition of E-Source interest
  
$
854,050
    
$
—
  
   Additional paid in capital for acquisition of E-Source interest
  
$
231,260
    
$
—
  
 
 
5