Vertex Energy Inc. reported higher gross profit and increased revenues for the quarter ended Sept. 30 for its used motor oil collection and processing business, which it is being sold to Clean Harbors.
In a U.S. Securities and Exchange Commission filing, Vertex Energy said it has revised its financial statements to classify its used motor oil collection and processing business as discontinued operations. Gross profit from those operations grew 92% to $8.8 million, while income from operations reached $3.4 million in the quarter, improving from a $789,000 loss in 2020’s third quarter. Revenues from the discontinued operations reached $37 million in the third quarter, a 72% increase.
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“We continued to execute on-plan during the third quarter, as elevated product margins and improved growth in used motor oil collections contributed to strong profitability,” CEO Ben Cowart said in the company’s earnings news release.
Total revenue for the black oil segment rose 55% to $446,676, improving from $288,000. The segment’s revenue is made up primarily of product sales from Vertex’s rerefineries and feedstock sales – used motor oil – which are purchased from such generators of used motor oil as oil change shops and garages, as well as a network of local and regional suppliers.
Vertex operates a rerefinery in Columbus, Ohio, which can produce 1,500 barrels per day of API Group II base stocks and a rerefinery in Marrero, Louisiana, which produces finished vacuum gas oil.
“Importantly, we achieved these strong operating results despite a 14-day weather-related outage at our Marrero refinery in September and a temporary hydrogen supply shortage at our Heartland refinery in Ohio,” Cowart said.
Clean Harbors will pay $140 million in cash to acquire Vertex Energy’s Heartland base oil rerefinery in Ohio, a second rerefinery in Louisiana and its used oil collections businesses, the two companies announced in late June. “During November, we intend to respond to the FTC’s request for additional information in conjunction with the planned divestiture of our UMO and recycling operations to Safety-Kleen,” Cowart said, referring to the Federal Trade Commission. “At this time, we anticipate the transaction should close during the first half of 2022, subject to regulatory approval.”