The segment’s revenue comes primarily from product of Vertex’s rerefineries and sales of used motor oil purchased from generators such as oil change shops and garages as well as a network of collectors.

The company reported base oil revenues of $5.6 million in the third quarter, down 38% from $9.1 million in the same quarter last year. Revenue from oil collection services rose to 20% to $2.4 million.

The copmany’s direct collections of used oil rose 5% year over year, despite a decrease nationally in total vehicle miles traveled due to pandemic-related disruptions. The company noted that on a sequential basis, those collections were up 36%, thanks to a rebound in miles traveled.

“As shelter-in-place orders were lifted earlier this year, travel activity increased back toward normal levels during the third quarter, contributing to improved availability of [used motor oil] feedstock,” Vertex President and CEO Ben Cowart said in the company’s earnings news release. “To that end, total direct collections increased 36% on a sequential basis in the third quarter, supported by increased vehicle miles traveled, together with organic volume growth from new customers.”

Vertex operates a rerefinery in Columbus, Ohio, that can produce 1,500 barrels per day of API Group II base stocks and a Marrero, Louisiana, refinery that produces vacuum gas oil. The facilities operated at 90% and 99% of capacity in the third quarter, respectively, the company said, given increased access to feedstock, coupled with stable demand for refined products.

The company noted that disruptions from August and September hurricanes impacted its operations on the Gulf Coast and more than offset organic growth in direct used motor oil collections and a strong performance at its Heartland rerefinery, which operated at peak capacity during the third quarter.

Vertex’s recovery division includes the business operations of Vertex Recovery Management as well as its Group III base oil business. Vertex is exclusive U.S. marketer for Netherlands-based Penthol C.V. of Group III base oil from Abu Dhabi National Oil Co.’s plant in the United Arab Emirates. The division’s base oil revenue reached $733,180 for the third quarter, up 14% from $640,642.

Vertex as a whole posted a $2 million loss for the third quarter, down further from a $1.2 million loss in 2019’s third quarter. Third quarter revenue decreased slightly from $37.8 million to $37.4 million.

Cowart said that consistent with their commitment to maximize value for all investors in Vertex, the company has launched an internal review of strategic alternatives for its business. “These alternatives may include continuing as a public standalone organization, going private or selling certain assets to a strategic partner, subject to the review and approval of our board of directors,” he noted. “There is no formal timeline for this process, nor have we chosen any one specific alternative at this time. We will provide further updates on the matter at such time that our board determines appropriate.”