SEGMENT REPORTING

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

The Refining and Marketing segment consists primarily of the sale of gasoline, diesel and jet fuel produced at the Mobile Refinery as well as pygas and industrial fuels, which are produced at a third-party facility. During the second quarter of 2023, the Mobile Refinery began processing soybean oil into renewable diesel, and during the second quarter of 2024, the Company completed running all renewable feedstock and began optimizing the Mobile Refinery hydrocracker capacity from renewable diesel to conventional fuels with expected contribution from conventional fuel operations to be generated in the fourth quarter of 2024.

The Black Oil and Recovery segment consists primarily of the sale of (a) petroleum products which include base oil and industrial fuels—which consist of used motor oils, cutterstock and fuel oil generated by our facilities; (b) oil collection services—which consist of used oil sales, burner fuel sales, antifreeze sales and service charges; (c) the sale of other re-refinery products including asphalt, condensate, recovered products, and used motor oil; (d) transportation revenues; (e) the sale of VGO/marine fuel; and (f) the sale of ferrous and non-ferrous recyclable metal products that are recovered from manufacturing and consumption. The Black Oil and Recovery segment excludes all property and assets owned by Vertex OH, including inventory associated with the Heartland Refinery, and all real and leased property and permits owned by Vertex OH, and all used motor oil collection and recycling assets and operations owned by Vertex OH (collectively with the Heartland Refinery, the “Heartland Assets and Operations”), which are presented herein as discontinued operations.

We also disaggregate our revenue by product category for each of our segments, as we believe such disaggregation helps depict how our revenue and cash flows are affected by economic factors.

Segment information for the three months ended June 30, 2024 and 2023 is as follows (in thousands):

	Three Months Ended June 30, 2024
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Total
Revenues:
Refined products	$	707,622	$	26,682	$	(1,892)	$	732,412
Re-refined products	4,877		5,346		—		10,223
Services	4,504		2,922		—		7,426
Total revenues	717,003		34,950		(1,892)		750,061
Cost of revenues (exclusive of depreciation and amortization shown separately below)	714,003		29,091		(1,892)		741,202
Depreciation and amortization attributable to costs of revenues	6,945		1,668		—		8,613
Gross profit (loss)	(3,945)		4,191		—		246
Selling, general and administrative expenses	25,457		5,327		6,657		37,441
Depreciation and amortization attributable to operating expenses	815		72		238		1,125
Loss from operations	(30,217)		(1,208)		(6,895)		(38,320)
Other income (expenses)
Other income (expense)	—		(56)		576		520
Gain on change in derivative liability	—		—		1,680		1,680
Interest expense	(5,353)		(141)		(12,231)		(17,725)
Total other expense	(5,353)		(197)		(9,975)		(15,525)
Loss from continuing operations before income tax	$	(35,570)	$	(1,405)	$	(16,870)	$	(53,845)
Capital expenditures	$	9,102	$	2,168	$	—	$	11,270

	Three Months Ended June 30, 2023
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Total
Revenues:
Refined products	$	702,606	$	21,797	$	(2,411)	$	721,992
Re-refined products	5,011		3,536		—		8,547
Services	3,802		552		—		4,354
Total revenues	711,419		25,885		(2,411)		734,893
Cost of revenues (exclusive of depreciation and amortization shown separately below)	710,958		23,263		(4,572)		729,649
Depreciation and amortization attributable to costs of revenues	5,568		1,062		—		6,630
Gross profit (loss)	(5,107)		1,560		2,161		(1,386)
Selling, general and administrative expenses	32,969		4,504		5,163		42,636
Depreciation and amortization attributable to operating expenses	822		38		168		1,028
Loss from operations	(38,898)		(2,982)		(3,170)		(45,050)
Other income (expenses)
Other income (expense)	—		(499)		3		(496)
Loss on change in derivative liability	—		—		9,600		9,600
Interest expense	(4,529)		(28)		(72,979)		(77,536)
Total other expense	(4,529)		(527)		(63,376)		(68,432)
Loss from continuing operations before income tax	$	(43,427)	$	(3,509)	$	(66,546)	$	(113,482)
Capital expenditures	$	27,762	$	2,827	$	—	$	30,589

	Six Months Ended June 30, 2024
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Total
Revenues:
Refined products	$	1,358,381	$	58,406	$	(2,914)	$	1,413,873
Re-refined products	8,744		10,561		—		19,305
Services	7,585		4,624		—		12,209
Total revenues	1,374,710		73,591		(2,914)		1,445,387
Cost of revenues (exclusive of depreciation and amortization shown separately below)	1,336,978		59,172		(2,914)		1,393,236
Depreciation and amortization attributable to costs of revenues	13,485		3,314		—		16,799
Gross profit	24,247		11,105		—		35,352
Selling, general and administrative expenses	51,604		10,724		14,895		77,223
Depreciation and amortization attributable to operating expenses	1,608		144		477		2,229
Income (loss) from operations	(28,965)		237		(15,372)		(44,100)
Other income (expenses)
Other income (expense)	(685)		(415)		571		(529)
Gain on change in derivative liability	—		—		8,338		8,338
Interest expense	(10,100)		(237)		(25,071)		(35,408)
Total other expense	(10,785)		(652)		(16,162)		(27,599)
Loss from continuing operations before income tax	$	(39,750)	$	(415)	$	(31,534)	$	(71,699)
Capital expenditures	$	20,401	$	5,595	$	—	$	25,996

	Six Months Ended June 30, 2023
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Total
Revenues:
Refined products	$	1,355,648	$	51,220	$	(5,143)	$	1,401,725
Re-refined products	9,365		7,947		—		17,312
Services	5,734		1,264		—		6,998
Total revenues	1,370,747		60,431		(5,143)		1,426,035
Cost of revenues (exclusive of depreciation and amortization shown separately below)	1,300,770		53,681		(5,450)		1,349,001
Depreciation and amortization attributable to costs of revenues	8,862		2,105		—		10,967
Gross profit	61,115		4,645		307		66,067
Selling, general and administrative expenses	59,455		9,303		15,820		84,578
Depreciation and amortization attributable to operating expenses	1,630		76		338		2,044
Income (loss) from operations	30		(4,734)		(15,851)		(20,555)
Other income (expenses)
Other income	—		1,156		—		1,156
Loss on change in derivative liability	—		—		415		415
Interest expense	(8,405)		(85)		(81,523)		(90,013)
Total other income (expense)	(8,405)		1,071		(81,108)		(88,442)
Loss from continuing operations before income tax	$	(8,375)	$	(3,663)	$	(96,959)	$	(108,997)
Capital expenditures	$	97,670	$	7,674	$	—	$	105,344

Total assets by segment were as follows (in thousands):

As of June 30, 2024
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Total assets	$	635,367	$	113,721	$	23,280	$	772,368
As of December 31, 2023
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Total assets	$	661,101	$	106,524	$	86,999	$	854,624

Segment assets for the Refining and Marketing and Black Oil and Recovery segments consist of property, plant, and equipment, right-of-use assets, intangible assets, accounts receivable, inventories and other assets. Assets for the corporate unallocated amounts consist of property, plant, and equipment used at the corporate headquarters, intangible assets, derivative commodity assets and cash.