microcapclub invitational: vertex energy (vtnr)

recovering tomorrow’s energy

Business Overview NASDAQ: VTNR

February 2013

recovering tomorrow’s energy 2

Disclaimer

This document may contain forward-looking statements including words such as “may,” “can,”

“could,” “should,” “predict,” “aim,” “potential,” “continue,” “opportunity,” “intend,” “goal,”

“estimate,” “expect,” “expectations,” “project,” “projections,” “plans,” “anticipates,” “believe,”

“think,” “confident,” “scheduled,” or similar expressions, as well as information about

management’s view of Vertex Energy’s future expectations, plans and prospects, within the safe

harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements

involve known and unknown risks, uncertainties and other factors which may cause the results of

Vertex Energy, its divisions and concepts to be materially different than those expressed or

implied in such statements. These risk factors and others are included from time to time in

documents Vertex Energy files with the Securities and Exchange Commission, including but not

limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors

also could have material adverse effects on Vertex Energy’s future results. The forward-looking

statements included in this presentation are made only as of the date hereof. Vertex Energy

cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you

should not place undue reliance on these forward-looking statements. Finally, Vertex Energy

undertakes no obligation to update these statements after the date of this presentation, except as

required by law, and also takes no obligation to update or correct information prepared by third

parties that are not paid for by Vertex Energy.


Vertex Energy is a leading environmental services company focused on recycling petroleum-based waste streams

The Company Recently completed a strategic acquisition of substantially all of the assets of Vertex Holdings

The Acquisition creates a vertically integrated business which spans the entire petroleum recycling value chain

» Collection: Collect and purchase used oil directly from generators such as Jiffy Lube and car dealerships

› Approximately 9 million gallons collected during the 12-month period ended September 30, 2012

» Aggregation: Purchase used oil, transmix, and off-specification commercial chemical products from an established network of local and regional collectors

› Approximately 58 million gallons aggregated during the 12-month period ended September 30, 2012

» Logistics: Manage the transportation, storage and delivery of aggregated feedstock and re-refined products

» Re-refining: Process waste streams into higher-value feedstocks or end products using in-house proprietary TCEP technology or 3rd party outsourcing for transmix and chemical byproducts

» Sales: Sell used oil and re-refined products to re-refineries & fuel blenders

Headquartered in Houston, Texas, with approximately 90 employees

Company Overview


Generators Collectors Aggregators

Black Oil Div.

Processors End Users

Refining & Marketing Div.

Third parties Generate used oil through core business

Jiffy Lube, car dealerships, etc.

Collect used oil from generators

Typically local or regional

Highly fragmented

Purchase used oil from collectors

Sell and deliver it as feedstock for processors

Process used oil

Technology upgrades input into higher value end products

End product is used as an industrial fuel, ship fuel, base oil, or refinery feedstock

Vertex’s Role in the Petroleum Recycling Value Chain

4

Vertex Energy Historical

Acquired Businesses*

Overview

TCEP

* EBITDA for 2011 was $6 million & 9 months ending 9/30/2012 was $4 million


Markets for Used Oil

USED OIL

Burners (paper mill, asphalt kiln)

Vacuum Gas Oil (VGO)

High Value Fuel (TCEP)

5

Export (utility blends) Re-refineries (Base Stock)


Compelling Business Model

Used Oil Pipeline Transmix & Chemical Byproduct

Black Oil Division

Historically, an aggregator and logistics manager of used oil feedstock

Acquisition gives Vertex Energy collection capabilities

Used oil sold to third-party Re-refineries, VGO, Export or transferred to Refining & Marketing Division

Fuel Blenders Re-refineries

Fuel Blenders Chemical-Refiners

Refining & Marketing

Thermal Chemical Extraction Process –

TCEP

Patent pending technology developed by Vertex

Converts used motor oil into a refining feedstock or cutterstock-diesel replacement.

Refining & Marketing

Aggregator and logistics manager of transmix and byproduct feedstocks

Oversee 3rd party re-refining process

Sell re-refined products

Fuel Blenders Refiners


Facilities

KMTEX – Port Arthur Location CMT – TCEP facility

7


Map of Black Oil Division and Distribution

8


Volumes & Financials

NOL’s of ~$35mm from reverse merger

1) Includes only one month of financial results from Vertex Holdings

2) Adjusted EBITDA excludes merger related expenses

3)Net Income includes a deferred income tax benefit of $1.9M relating to decrease in the Company’s valuation allowance on net

operating losses.

9

FYE FYE FYE 9 Months Ending 9/30,

2009 2010 2011 2011 2012

Volume (in bbls. sold)

906,452 921,422 1,175,829 855,854 1,061,515

YoY % Change 0.96% 1.65% 27.61% 27.13% 24.03%

Revenue $ 38,703,847 $ 58,140,985 $ 109,740,257 $ 78,401,089 $ 102,316,702

YoY % Change (40.7%) 50.2% 88.7% 84.8% 30.5%

Gross Profit 2,729,552 4,239,944 8,074,070 6,769,022 6,819,441

Gross Margin % 7.1% 7.3% 7.4% 8.6% 6.7%

Adjusted EBITDA 174 1,474,935 4,281,413 3,953,057 3,400,349

EBITDA Margin % 0.0% 2.5% 3.9% 5.0% 3.3%

Net Income (609,384) 1,228,426 5,753,515 3,680,750 3,520,916

Net Income % (1.6%) 2.1% 5.2% 4.7% 3.4%

Diluted EPS $ (0.08) $ 0.09 $ 0.39 $ 0.25 $ 0.25


$38.7

$58.1

$109.7

$78.4

$102.3

$0

$20

$40

$60

$80

$100

$120

FY 2009

FY 2010

FY 2011

9 Months 9/30/11

9 Months 9/30/12

$2.7

$4.2

$8.1

$6.8 $6.8

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

FY 2009

FY 2010

FY 2011

9 Months 9/30/11

9 Months 9/30/12

($0.6)

$1.2

$5.8 *

$3.7 $3.5 *

($1.0)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

FY 2009

FY 2010

FY 2011

9 Months 9/30/11

9 Months 9/30/12

$0.0

$1.5

$4.3

$4.0

$3.4 *

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

FY 2009

FY 2010

FY 2011

9 Months 9/30/11

9 Months 9/30/12

Strong Financial Performance

Note: All $ figures in millions * Includes $1.8 million tax adjustment

Revenue Gross Profit

Adjusted EBITDA Net Income

10


Successfully leveraging our history

as a value-added feedstock

logistics provider to become a

leading re-refiner of used

petroleum products

TCEP contribution ramping up

dramatically and should aid

margin improvement

Gross Profit Mix

100%

68%

46%

25% 22%

30%

32%

54%

75% 78%

70%

0%

20%

40%

60%

80%

100%

FY 2008

FY 2009

FY 2010

FY 2011

9 Months 9/30/11

9 Months 9/30/12

Black Oil Refining & Marketing

Percentage of Gross Profit By Division

11


Expand Feedstock Supply Volume

» Grow street collections and aggregation operations

» Expand existing relationships with suppliers

Replicate and rollout additional TCEP facilities

» Locate new TCEP facility sites at marine ports to capitalize on feedstock availability

» Expand existing Baytown capacity

Acquire Collectors

» Partner with or acquire collection and aggregation assets

Vertical Integration

» Leverage existing process technologies in the market

» Expand other recycling and processing technologies for bi-products such as oil filters and antifreeze

» End Product sales to Consumers

» Direct Fuel Blending

Growth Strategy


Own the intellectual property rights to patent pending TCEP process

TCEP upgrades used oil into higher-value feedstock and diesel replacement fuel

TCEP refinery capital expenditures are significantly less than conventional re-refineries

Investment Highlights

Estimated $2.3 billion market opportunity

Services span the entire petroleum recycling value chain from collection to end product sales

Well positioned to capitalize on growth trends through scale, technology, and key strategic relationships with feedstock generators and aggregators

Expand feedstock aggregation volumes and geographic footprint

Acquire used oil collectors and pursue other vertical integration opportunities

Develop or acquire technologies to upgrade TCEP finished product into base oil

Expand TCEP capacity – 30 million gallon run-rate at first TCEP processing facility

Demonstrated growth in revenue, gross profit, EBITDA and net income

Acquisition of Vertex Holdings expected to be accretive to earnings and improve margins

Proven, highly experienced management team averaging 20 years of industry experience

Diverse network of feedstock generators and collectors covering 13 states

Insulated from commodity price risk through supplier and customer contracts

Aggregated 58 million gallons of feedstock in during the twelve months ended September 30, 2012

Strong Position in Growing Petroleum Recycling Industry

Proprietary TCEP Re-refinement

Technology

Key Strategic Relationships

Compelling Growth Opportunities

Proven Financial Performance &

Management Team

13


Management Team

Benjamin P. Cowart | Chief Executive Officer, Chairman of the Board, Founder

26+ years petroleum recovery industry, pioneering the reclamation industry by developing recycling options for many hydrocarbon residual materials once managed as hazardous wastes

Matthew Lieb | Chief Operating Officer

17+ years business leadership, operations, consulting expertise, 3 startups and public company experience

Chris Carlson | Chief Financial Officer

12+ years financial management, energy, commodity, treasury and risk management

John Strickland | Manager of Supply & Trading

27+ years management and marketing of fuels and petroleum blending operations

Greg Wallace | Manager of Refining & Marketing

22+ years processing, trading and marketing of petroleum and chemicals Mike Stieneker| General Manager of H&H Oil Collections

20+ years management and operations of Used Oil Collections Mike Carter| General Manager of Operations and Regulatory Compliance

20+ years management and terminal operations


Contact Information

Ben Cowart

CEO

(281) 486-4182

[email protected]

www.vertexenergy.com

microcapclub invitational: vertex energy (vtnr)

Economy & Finance