Vertex Energy, Inc

Good day, ladies and gentlemen, and welcome to the Vertex Energy Q4 2021 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for 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.

Hey, thank you, Holly. Good morning, and welcome to Vertex Energy's fourth quarter and full year 2021 results conference call. Leading the call today are 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 recent operational and financial 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 a discussion of some of the risk factors that could cause actual results to differ, please refer to the risk factors 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 in 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. With that, I'll turn the call over to Ben.

Thank you, Noel, and good morning, everybody. Thank you for joining the call with us today. I'd like to begin our call with a brief overview of our fourth quarter and four-year results, followed by a progress update on our pending acquisition of the Shell Mobile Refinery, including those key milestones leading up to the closing of the transaction. I'm pleased to report that we delivered record fourth quarter and four-year results from our legacy business, driven by a combination of improved refined product margins, increased sales volumes, and strong operational execution, both at our Marrero and Hartman refineries. Adjusted net income increased by more than $7 million year over year to $4.6 million in the fourth quarter, accumulating in record full-year adjusted net income of $17.4 million. Adjusted EBITDA increased nearly $10 million year over year to $9.5 million in the fourth quarter, bringing full-year adjusted EBITDA to more than $25 million. Operationally, our team did an outstanding job throughout the year as we continue to capitalize on elevated refined product spreads. Total throughputs at our Marrero refinery increased materially on both year-over-year and sequential basis in the fourth quarter as the refineries operated at full capacity throughout the period. Mike Valdes, week long outage at heartland refinery during the fourth quarter, we still managed to achieve capacity utilization of 95% in the period post posting us to capital capitalize on consecutive market lead price increases in base oil prices that continued on during the first quarter of this year. We have continued to see further market lead base oil price increases during the last 60 days on our Group 2 Plus product. Back in January, we announced our intentions to terminate the planned divestiture of our UMO and re-refining assets to safety clean. Following the prolonged regulatory review process, we determined that to move forward with this transaction would not be in the best interest of our shareholders. Given the balance sheet recapitalization we've engineered over the last six months in advance of the mobile refinery acquisition, Vertex is in much better position today than we've ever been in our history, supported by profitable growth of the business. I'm incredibly proud of our operations team throughout this process. Never lost focus and stayed the course over the last year, delivering record results to our shareholders. Last week, we announced that we had accelerated our call option to repurchase the Tencel Capital 65% interest in our Heartland refining business and 15% interest in our Myrtle Grove facility as planned. Once completed, These transactions will simply simplify our asset portfolio structure positioning vertex to become the sole owner of these assets once again. Given evident strength within our broader markets and specifically within the basehold markets, we believe these assets are worth significantly more today than they were a year ago. We expect this transaction will provide us with increased flexibility and optionality while allowing Vertex to reap the full financial benefits being generated by these assets. Looking ahead, we anticipate our first quarter performance should be consistent with that of the fourth quarter as product spreads remain very strong entering the year within our legacy assets. Moving now to discuss the mobile refinery acquisition. During the first quarter, We reached several key financial commercial milestones in advance of a planned closing on Mobile, which we expect to assume ownership as of April 1, 2022, subject to the finalization of key financial agreements. Last month, we received a commitment letter with a syndicate of lenders with respect to a three-year $125 million first lien senior secured term loan facility. The term loan proceeds, which have been funded in escrow, are expected to be used to fund a portion of the purchase price of the mobile refinery, a portion of the planned renewable diesel conversion project at the mobile refinery, liquidity needs, and certain fees and expenses associated with the closing of the term loan. The term loan is expected to be secured by substantially all the present and after acquired assets of the company and its subsidiaries, and to be guaranteed by the company and certain of its subsidiaries. Also in February, we announced that Vertex had entered into an initial five-year product offtake agreement with Itamitsu Apollo Renewable Corporation. As one of the largest suppliers of both conventional and renewable fuels in North America, Itamitsu is a valued offtake partner that provides us with the depth, a product marketing experience, and access to growing regional markets in the Western United States and Canada. This agreement will ensure offtake of all the produced renewable diesel production at the Mobile Refinery while we expect Shell and Bunker One will assume offtake of our conventional fuel production as previously disclosed. Finally, we recently entered into a contract with Alder Topsoil a global provider of carbon emission reduction technologies for the chemical and refining industries to lead the technology implementation for the planned conversion of our existing hydrocracking unit at the Mobile Refinery upon closing of the acquisition. Mobile Refinery's hydrocracker is uniquely suited for renewable diesel production, requiring a low complexity conversion process. Separately, Vertex has moved forward with initial design, engineering, and procurement activities with Worley, a global provider of professional project and asset services in the energy, chemical, and resources sectors, and expects renewable diesel production to commence by the end of fourth quarter 2022, assuming the project's timeline for the mobile refinery acquisition and related conversion RD conversions. From here, The two key remaining milestones ahead of closing involve the finalization of the 125 million term loan together with the planned completion of our working capital facility, both of which are expected to close in conjunction with the closing of the mobile acquisition. Once we close on mobile, we intend to provide an update, combined company forecast, marketing to market, latest assumptions, which we currently intend to provide on our first quarter 2022 earnings call. We continue to believe that Vertex is uniquely positioned to capitalize on growing demand for advanced renewable fuels driven by carbon reduction policies supportive of the global energy transition. As an energy transition company of scale, we are actively exploring a variety of low carbon intensity feedstocks along with sustainable aviation fuel, carbon sequestration, and green hydrogen as we seek to grow in emerging and adjacent markets. Beginning in late 2022, we intend to launch an internal ESG reporting initiative, one that will provide our investors with deep appreciation of how Vertex is working to drive value creation for our shareholders while helping to make the communities where we live and work, great places to be. We look forward to providing a heightened level of disclosure and transparency as our business enters this next chapter of growth. With that, I'll hand the call over to Chris for a review of our recent financial performance.