VTNR - Earnings call transcript Q2 2024

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Operator

Good morning. I would like to welcome everyone to Vertex Energy Second Quarter 2024 Conference Call. I will now turn the call over to Chris Delange, IR Coordinator.

Chris Delange

Good morning, everyone, and welcome to Vertex Energy's Second Quarter 2024 Conference Call.

On the call today are Chairman and CEO, Ben Cowart; Chief Financial Officer, Chris Carlson; Interim Chief Operating Officer and Chief Commercial Officer, Doug Haugh; and Chief Strategy Officer, Alvaro Ruiz. company's you forward-looking commentary nature, statements, and of remind call today's are to outside include may which, the want that on management's conference uncertain I control. by their

based Although these actual may materially. differ management's expectations and results on forward-looking beliefs, current are statements

of the quarterly Vertex of For results annual that and actual with risk Energy's could the section a discussion differ, Risk please Factors factors cause filings SEC. to refer some of to the latest

of note I'll the an the from non-GAAP release remarks will that discussed you financial Ben our please issued followed call operational With reconciliations during to find Additionally, Ben. the Doug closing Haugh, measures by Cowart. historical review can Today's turn by Ben over from Cowart, remarks financial call Chris call from press and that, review begin in with today. Carlson

Ben Cowart

those to us. joining morning Good

XXXX and you and hydrocracker the today, renewable conventional for outline the On current you taken update the feedstock we to steps the conversion and some quarter have on well near-term to call Vertex I around help that operating to the results the plan progress navigate as the landscape. as financial from team strategic second on update

environment we continued saw to can that and efficiently. We XX% fell a by impacted environment difficult pricing reliable second quarter. absolute The saw our safe margins which quarter quarter-over-quarter compared maintained where by to crack operations. financial We to despite expanding a operating and negatively macroeconomic operationally, lot lower things in reducing year-over-year, the commitment expenses spreads commitment our doing XX% performance. And first the operating of and good our control X% costs, shows areas decreased

were capital guidance. Additionally, expenditures below once we our continue to again manage and

grow Over the made decisions past years, advancements to material we've strategic Vertex. in few

strategic our to upgrading spend past pause adjustment. Mobile conference if flexibility allow capital us renewable our from years, and to producing We business capital with while equipment decision operated unit. to we diesel back the built conventional production renewable fuels discussed refinery. safely first have required For to our quarter strategy redeploy our conventional into efficiently into the the hydrocracker X in the pivot investing In the call, we and

of in are back the conjunction unit process third the turnaround. feedstock reconfiguring quarter to the We with conventional maintenance planned in

any certain addressed, As of work are we we $XX our ensure as with and constraints additional conditions look current and million lenders. loans June period an to terms In liquidity our and that continue during million to transitional we in as loan modified our agreement. secured $XX well July, near-term

named and also very Chief all providing difficult and Restructuring We accomplished far Seth in I industry thank to and performance He understands to operational was our capability management Bullock in significant macro good want in as a in Officer. the employees in environment well. brought liquidity of Vertex's our assist expertise through Vertex has they for Seth have managing experience thus XXXX. the additional and improvement. work financial

our hydrocracker our that, work commendable, people convert because which the call do now safely conventional most of track to to we and shortly, I'll is note over Doug. hand have will With us asset. to more Doug As our feedstock, ahead want valuable safety we to are record our

Douglas Haugh

during the injury Unfortunately, years Mobile Good quarter X morning, second over its the everyone. site recordable OSHA XXXX. had in first of

with entire there for process employees working facilities. saw for business, each of outstanding events minor, the our effort mentality at and always across mind of X to to remain The entire our make improvements I X us it that site. continually always the of quarter, that was HS&E safety to Mobile prioritizing the incident are commend contractor highlights and top care dedication continuing safety partners at the our must to contract commitment to this of organization. safety-first and over for both want employees our testament of the within and a location While every all other the streak performance seen years

legacy expectations. with operations quarter performing had a with good in overall Marrero Our line

operational rate at efficiencies quarter compared and XX,XXX XX% us reflects the the second site including per our back from unit This team quarter conventional its excellence, volumes throughput to capacity help the with crude team for due Total first A will lower the of on day savings Our for Mobile possible overall to planned higher ahead X% XX%. year-over-year. the OpEx and operational quarter cost decoat schedule. demonstrated during our of was performance capacity strong down of average that approximately the getting down emphasis the continuous facility costs. barrels utilization, utilization was

deteriorating in spreads, compared we gross the saw Given quarter our margin the $X.XX first we per saw the fuels during the to $XX.XX decreased barrel crack conventional to materially quarter.

planned typical third total that progress. reduce our will finished in in with and QX, the quarter product yield throughput schedule the in the expect we This do throughput higher but for overall a during conjunction XX.X% first our strong return to products slightly run gasoline, currently have turnaround XXXX, in is of X. we quarter, rates to for our second conversion quarter, Our the the for quarter. hydrocracker accounted In as but such volumes. quarter second of than had jet diesel we fuel

Now renewable fuels our turning renewable plant Vertex's down diesel running operated well. We feedstock. of business. our to inventory finished

the service. X,XXX seems to our end barrels ceased of on target of of Our in a And hydrocracker available to are conversion we established June, This for of as with volumes an day. capture business on-stream margins fourth on per focus had more XXXX. conventional of averaged production the and market schedule the deep back renewable conventional the throughput quarter our

customers through have is We and to partners of and supporting great Our commercial their with support team process. suppliers; our in pivot this all of effort. continues them collaboration work been this closely appreciate strategic

for is of tendered on customer This offtake operations by off the inherited and April refinery. we important like managed increased to the product I'll of versus new the and this we'll a last volumes XXXX. commercial first this quarter agreement call with remind our and to our of you, jet those third financial for to to existing additional detail call, Vertex we our as have year, review commenced following our financial and new the did ] jet process upon X. outlook for similar Vertex purchase and results been our on our a agreements turn roll approaching be with well over we the transition additional As this of agreements now over I is for offtake finished [ initial mentioned company's expect Chris of I'd the next to regarding and teams, deliver has and the value supply the a an the volumes as expiry contracts. spring contracts milestone operating

Chris Carlson

on Doug, joining those call us welcome and Thank to you, the today.

managing Our and to be protecting sheet continues focus our on balance liquidity.

As conventional Ben through a for and softness to million discussed, manage any in R&D us additional transition we help to of the help loans total near-term us into term from to production. macroeconomic our entered $XX pricing environment

able our generate to sheet. balance believe and adding a associated to by production be to greater cash with margin VGO financial renewable additional allowing we diesel will We upgrading flow, available higher-margin through losses and continue conventional improving us product, the stopping that flexibility

EBITDA loss second adjusted million results. a now attributable to million Turning a in financial in capital expenditures Vertex via the our includes to certain to for of of the in loss our of of quarter capital the renewables second compares of XXXX. XXXX decrease discretionary Total deferral net of the reflecting for reported pricing. our total business. net XXXX. company realignment deliberate $XX.X quarter, $XX.X second saw achieved quarter quarter the loss $XX.X expenditures. capital of million lower to This a of We XX% $XX This prior preservation a the for primarily capital million, of expenses driven were planned by the guidance, second below a

Turning to balance the sheet.

net equivalents, As the which $XX.X debt total include lease of total and of million, million had additional July. restricted The the the was $XX.X outstanding end million. received XXXX, $XX cash second including not XXXX, million of does XX, obligations the at of including quarter in $XXX.X June cash company of

we This quarter. in with back for the continued third a conjunction the conventional the we work convert the quarter, quarter Looking XXXX, which will hydrocracker result schedule fourth overall have improve production. will throughput a in in in the to planned to turnaround to our forecast of decrease materially

For QX, Mobile per between we volumes to at XX,XXX anticipate XX,XXX total be and day. conventional barrels throughput

between is jet products and and diesel balance conventional products products such consist high-value of with as such Our expected to XX% other to intermediate in finished the of expected XX% VGO. fuel, as gasoline, yield

work to in rise lower basis. per an will also the barrel continue on on we is to Our throughput, anticipated cost OpEx conjunction absolute but with reductions expected

is over projected closing expenditures planned, includes capital and I for conversion be between that, third cost. $X.XX per some Ben million turn range total for quarter a $XX to third the per to With anticipate $XX $XX to For million of the as portion the quarter, quarter. million which barrel the $X.XX remarks. between We barrel the for will it

Ben Cowart

risk our Our team incremental is results of strategic and keeping great operations delivering safe, our job towards minimizing doing goals. a

is focus market As this during global of impacted crude and the volatility managing period, persistent we navigate a of is given in XXXX, on which our the pricing, third factors. quarter flow transitional cash by variety product

financing set effectively. pathways a these Seth And lot restructuring an liquidity process. continue to ongoing that cash us work reduce monitor on will to term. pursue to near we'll this provide and systems business through We the done of and needs basis. and help support capital manage and insight continue flow will strategic opportunities cost efforts proactively the valuable and guidance to over We've up

are priorities our and operating been adamant our improve have cash that our We margins. costs increase reduce strategic to position,

try the us the position to we maximize for to XXXX the control of to future, options environment can't remainder and call help and all continue are today. Thank the current best joining optimistic profitability evaluate navigate While about we'll into you XXXX. to on and pricing, for we Vertex

Operator

Energy Call. you XXXX This concludes Second the Conference Quarter joining. Thank Vertex for

now disconnect. You may

Vertex Energy (VTNRQ) 8 Aug 242024 Q2 Earnings call transcript