Vertex Energy, Inc

Good morning, ladies and gentlemen, and welcome to the Vertex Energy, Inc. Third Quarter 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Noel Ryan. Sir, the floor is yours.

Good morning, everyone, and welcome to Vertex Energy's Third Quarter 2021 Results Conference Call. Leading the call today are our Chairman and CEO, Ben Cowart, CFO, Chris Carlson, and EVP of Development, Alvaro Ruiz. We issued a press release before the market opened this morning detailing our third quarter results. I'd like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For discussion of some of the risk factors that cause actual results to differ, please refer to the risk factor section of Vertex Energy's latest annual and quarterly filings with the SEC. Additionally, please note you can find reconciliations of the historical non-GAAP financial measures discussed during our call and the press release issued today. Today's call will begin with remarks from Ben Cowart, followed by a financial review from Chris Carlson. The conclusion of these prepared remarks will open the line for questions. And with that, I'll turn the call over to Ben.

Thank you, Noel. Good morning, everybody. Thank you for joining the call today. I'd like to begin our call with a brief overview of our third quarter results, followed by a progress update on our pending acquisition of the mobile refinery, including those key milestones leading up to the close of the transaction. We generated strong year-over-year growth in Adjusted EBITDA during the third quarter, given a combination of improved refining economics and continued operational execution. UMO collections increased 9% year-over-year in the third quarter, while refined product margin reached elevated levels given higher overall commodity prices. This performance serves to more than offset a 14-day weather-related outage at our Morero Refinery in September, together with lower utilization at our Heartland Refinery as a key hydrogen supplier was forced into temporary force majeure for the period. Despite these internal headwinds, our team delivered an exceptional performance in the period, focusing on those factors within their control. Chris will provide more detail on our financial performance in the third quarter during his prepared remarks following my comments here. Since we first announced our planned acquisition of the mobile refinery earlier this year, our team was working diligently to recapitalize our balance sheet as we prepare the business for the next important phase of growth. Following months of discussion with commercial lenders and capital providers, we've begun to lay the foundation for a long-term, low-cost capital structure capable of supporting the planned growth of our business with minimum dilution to our existing equity shareholders. To that end, In November, we completed $155 million offering of 6.25% convertible senior notes due 2027. This heavily oversubscribed transaction achieved several important objectives for Vertex at a critical moment in time. First, it allowed us to lock in an attractive fixed rate on long-term notes maturing seven years from now second given the structure of the transaction we have the option to settle future conversions in either stock or cash subject to timing and conversion price restrictions outlined in the offering memorandum given the significant free cash flow we intend to generate from the mobile asset over the next three years we may choose to settle future conversions in cash which could serve to significantly reduce potential equity dilution third This transaction is more than sufficient to fund the entire $75 million purchase price of the mobile refinery without having to issue equity. And finally, this transaction introduces Vertex to an entirely new base of sophisticated, high-quality institutional funds who believe in the long-term potential of our story, some whom we have both chosen to own equity in the bond. In summary, this transaction was a significant win for the entire company and its shareholders. We want to thank our partners at Oppenheimer who led the transaction together with co-managers Craig Hallam and HC Wainwright for executing this successful capital raise. In addition to the net cash proceeds collected from the convertible notes offering, we are currently engaged in final negotiations with a capital provider to secure a $125 million term loan which will be used for the capital investments at the mobile refinery together with 125 million working capital facility with a commercial lender that will be used to support the purchase of inventories at closing. We expect that both the term loan and the working capital facility will be finalized during the first quarter of 2022 in conjunction with the closing of the mobile transaction. Before I conclude my prepared remarks, allow me to share a brief update On where we stand with the planned measure of our UMO collection and recycling assets to safety claim. This month, we intend to respond to a previously disclosed second request of additional information, documentary materials from the U.S. Federal Trade Commission in conjunction with our proposed asset sales safety claim. Upon closing of the transaction, we currently anticipate total cash proceeds to Vertex will be between $90 and $100 million. As the FTC is currently evaluating the transaction, we will not provide additional comments on the matter. We currently expect the transaction to close during the first half of 2022 subject to FTC approval. In summary, our team continues to demonstrate a consistent track record of execution and value creation with our legacy operations. In fact, we expect record fourth quarter as we close out 2021. Additionally, we've nurtured a culture of safety and reliability throughout our current refining systems. Looking forward, we've made significant progress to ensure that upon the closing of the mobile refinery acquisition, we have the people, systems, and processes in place to support a seamless transition of its commercial operations. Our balance sheet is stronger than it's ever been, bolstered by a combination of free cash flow from our legacy operations, recent cash proceeds from the convertible offerings, together with expectations for additional availability under a planned term loan and working capital facility, all of which are expected to support our plans for growth. With that, I'll hand the call over to Chris Carlson for a review of our recent financial performance.