Greetings and welcome to the Vertex Energy Fourth Quarter and Year-End 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Ben Cowart, Chairman and Chief Executive Officer for Vertex. Thank you Mr. Cowart, you may begin.

Thank you, operator, and good morning, everyone. Joining me today on the call is Mr. Chris Carlson, our Chief Financial Officer; Mr. Matt Lieb, our Chief Operating Officer; and Michael Porter, Investor Relations Consultant at Porter, LeVay & Rose. Before we begin the business portion of this call and on behalf of the company, I would like to inform you that the company expects to make forward-looking statements during today's call today. Statements including words such as believe, anticipate, expect, and statements in the future tense are forward-looking statements. These statements involve known and unknown risks and uncertainties and are based on management's current views and assumptions regarding future events and operating performance. A number of factors could cause the company's actual future results to differ materially from its current expectations. Thank you again for joining us today for our fiscal year 2013 earnings call for Vertex Energy. This call coincides with today's filings of our 10-K for the year ending December 31, 2013. I want to start off by giving you a few highlights from the fiscal year 2013 and then I'll turn the call over to Chris Carlson, our CFO, so he can walk you through our Q4 and full year financial performance. Following Chris's presentation, I'll provide some thoughts on our plans for the remainder of 2014 and I'll make some closing remarks. We'll then open the line for questions. On this call, we do not intend to go into detail on the Omega acquisition as that material was covered in the 8-K filed on March 19 and during the conference call on March 20. In 2013, we achieved our highest annual levels of revenue, gross profit and net income. I'm very pleased with our performance this year in a number of areas and believe, we are very well positioned for 2014 and beyond. Here are a few quick highlights that we'll touch on more detail during this call. Our E-Source acquisition has come off very well and continues to improve as we move forward. We had a very successful public offering in November. Our growth in organic street collections has been very good and our overall volume of products sold, which is a key metric for the business that we track, continues to prove very well for the company. We've increased by 20% for the fiscal year 2013 versus 2012. This increase in sold product volume is largely a result of continued throughput improvements at our TCEP facility, combined with our increased ability to source feedstock to support the process, as well as strong growth in our Refining & Marketing division. Our focus on profitable growth played out well for us in 2013 as we were able to grow the top line, our gross profit and our net income related to the previous years. We grew revenue by 20% in 2013 compared to 2012, consolidated revenue was $162 million for the year. We increased gross profit for the year by 67% over last year to $16.34 million. Gross profit is an important metric for us because it helps us understand how we are performing as a business, while minimizing the impact to commodity prices. Lastly, net income improved to 115% compared to last year, $7.88 million, or $0.39 per fully diluted share. Before discussing our outlook for 2014, I'd first like to turn the call over to our CFO, Chris Carlson, for a more detailed review of our financial performance in both the fourth quarter and the full year 2013. Chris?

Thank you, Ben. For more information, please refer to our press release issued yesterday, our latest Form 10-K for the fiscal year ending December 31, 2013, as well as our other filings made with the Securities and Exchange Commission. I also want to mention before we proceed that all financial numbers are prepared, unless noted, in accordance with generally accepted accounting principles. I also wanted to point out that we are now reporting an additional business segment called Vertex Recovery. This new segment incorporates the business from our recent E-Source acquisition, as well as our long-standing business as a generator solutions company for the proper recovery and management of hydrocarbon streams. I'd like to now discuss our results. For the quarter ended December 31, 2013, we reported consolidated revenue of $46.8 million compared to $32.3 million in the fourth quarter of 2012. This represents a 45% revenue increase. The revenue increase was due primarily to increased volumes of approximately 32%, which were offset by a slight decrease in the average sales price of our various end products. Fiscal year 2013 saw a revenue increase of 20% compared to 2012. Revenue for the full year was $162 million versus $135 million last year. This increase was mainly a result of our increased production volumes and the growth in our Vertex Recovery business. You can find more detailed information on the various pricing benchmarks that are most applicable to our business in our 10-K that was filed today. Our Black Oil Division revenue for the fourth quarter of 2013 increased 19% compared to the same quarter last year to $23.7 million. For fiscal year 2013, revenue was $89.12 million as compared to $89.13 million in 2012, essentially flat year-over-year. The Refining & Marketing division saw a revenue increase of 44% to $16.75 million for the quarter. For the full year, this division produced revenue of $55.73 million versus $44.34 million in 2012. This represents an increase over the prior year of over 26%. This increase is primarily a result of a 32% increase in volume. TCEP, which, again, is a business unit within our Black Oil Division, generated $17.05 million in revenue during Q4 2013. This represents a 17% increase versus the fourth quarter of 2012. For the fiscal year, TCEP produced revenue of $56.54 million, which represents a 5% decrease relative to the full year 2012 figure of $59.84 million. Vertex Recovery had Q4 2013 revenue of $6.4 million versus $701,000 in the fourth quarter of 2012. For the full year, Recovery produced revenue of $17.12 million versus only $1.11 million in fiscal year 2012. This increase is a result of both of the E-source acquisition, as well the fact that Vertex Recovery business was acquired during the second half of 2012. And thus did not report a full year performance here in 2012. For the fourth quarter of 2013, gross profit increased 83% to $5.43 million. For the full year, gross profit increased from $9.79 million to $16.34 million. This 67% increase is primarily attributed to increased product volumes and a contribution from our Vertex Recovery business. Gross profit for the Black Oil Division was just over $1.94 million for Q4 of 2013, which represented a 2% increase relative to the same quarter last year. For the full year, gross profit increased 39%, from $4.96 million to $6.89 million. The Refining & Marketing division as a whole generated gross profit of $1.54 million in the fourth quarter of 2013. This represented a 50% increase in gross profit compared to Q4 2012. For fiscal year 2013, Refining & Marketing generated gross profit of $5.23 million, a 10% increase over 2012's gross profit of $4.75 million. TCEP's gross profit in the fourth quarter of this past year was $1.8 million versus $1.9 million for Q4 2012. TCEP had a full year gross profit of $6.05 million in 2013, a nearly 24% increase over fiscal year 2012. TCEP gross margin of approximately $4.57 million. The gross profit for Vertex Recovery in the fourth quarter of 2013 was $1.94 million versus only $43,000 during the same period last year. For the full year, our Recovery division produced $4.22 million in gross profit as compared to $67,000 for the full year 2012. As mentioned previously, Vertex Recovery has only been a part of the company since late third quarter of 2012. Selling, general and administrative expenses increased in Q4 2013 by 59% relative to Q4 2012. For the full year, SG&A increased from $7.39 million to $9.29 million, which represents a 26% increase. We incurred additional SG&A cost in 2013 as a result of closing our Vertex Holdings acquisition in the third quarter of 2012 resulting in 2013 having a full year of SG&A cost at the fully loaded combined company level. As a result of the Vertex Holdings and E-source acquisitions, we now have 154 employees as opposed to 12 employees before these acquisitions. It is our belief that the improved gross margins associated with growth in our business will more than offset the increased SG&A associated with these growth efforts as we move forward. The fourth quarter produced net income of approximately $2.57 million versus only $137,000 in the fourth quarter of 2012. Our earnings per share in Q4 of 2013 was $0.13 per fully diluted share versus only $0.01 per fully diluted share in the fourth quarter of last year. For the full year, we had net income of roughly $7.88 million or $0.39 per fully diluted share. This was a 115% increase compared to 2012's net income of roughly $3.66 million, which represented a per fully diluted share figure of $0.25. Included in our 2013 net income figure is a $1.7 million income tax benefit, stemming from our net operating losses related to our merger with World Waste Technologies, which is somewhat offset by a $432,000 deduction for the noncontrolling interest we have in E-Source. Our current assets, as of December 31, 2013, increased roughly 68% from the same time the previous year from $14.3 million to $24.1 million. Over the past year, stockholders' equity increased more than 87% from $20.4 million to $38.3 million as of December 31, 2013. As of December 31, 2013, our long-term debt stands at $6.56 million. I'd like to now turn the call back over to Ben Cowart, our CEO.

Thank you, Chris. As the numbers Chris presented, illustrate, we have made tremendous strides in the past year and the company is continuing to grow. As we look forward to 2014, I want to share some of our thoughts on what transpired in 2013 and where the business is heading. We're executing against our regional build-out strategy. This recent Omega acquisition brings two new hubs into our network. There's more information that will be coming out in our super 8-K that you can look into. We've focused on the results of this past year. We accomplished our goals that we set and we met our targets and expectations that we set for the company. We believe there are meaningful follow-on opportunities to leverage our platform. We now have increased refining capacity, which will be important as we seek to continue to grow our collection volumes. Growing importance of our Vertex Recovery business, we now have additional capacities that will allow us to better service the full range of material recovery needs of our generating partners. Changes in the industry, consolidation and overall health, the changes taking place in the industry provide opportunities for us to grow our business in a number of ways. As we look at our target models that we set for the company, and we look at the new acquisition coming in, we now have those two new regions to go with our Houston region that we can build our business on. We also are very pleased with our performance around our gross profit increase, that a key opportunity for us to demonstrate our ability to manage the business and capture these margins. In the fourth quarter, we closed at 11.6% gross profit. Our target was between 12% and 15% over the next 3 to 5 years. We're already very close to being inside that range. We also finished the year at 10% gross profit on the business compared to last year at around 7.3%. So we are clearly executing and doing the work to bring the profit now from the growth that we've captured over the last 5 years. That will continue to move forward for the company. So before we move on to the question-and-answer portion of this call, I want to let the listeners know that if you have any follow-on questions or comments, please feel free to contact Porter, LeVay & Rose, our Investor Relations representative, Marlon Nurse, at area code (212) 564-4700. Also, I want to mention that a digital replay will be available by telephone approximately 2 hours after the call's completion for the next 2 weeks. Details on how to access the replay can be found in our recent press releases. Operator, we're now ready to take a limited number of questions pertaining to the matters discussed on this call and our 10-K. Remember, we're unable to discuss any information or business plans, which are not publicly available.

[Operator Instructions] Our first question is from Chad Bennett of Craig-Hallum.

Just a few questions for me. Maybe for Ben, first. Ben, so how should we think about, I guess -- can you give us an update on the pricing environment year-to-date? I'm hearing tangentially things have slightly improved in the market and want to drill down more specifically to the markets you deal in on the end product side. And then also, how should we think about for the Vertex only business, obviously not talking about Omega? How should we think about volume growth this year versus what -- pretty good volume growth last year?

Okay. So we'll talk about the market for a minute. The finished product pricing has improved for our TCEP product. The third-party supply coming into the plant is slightly up because of winter demand for BTUs. So the market is somewhat short at the moment. This cold winter has pulled a lot of product out of the U.S. market. So we had somewhat of a tick up on third-party supply. I am pleased to say that our collection business has done a really good job of lowering our pay-for-all on the street level. So we are continuing to capture more gross profit under those market conditions because of an improved sale price and just overall better spread than what we had in the third quarter. So we're expecting the supply market to lengthen again and we believe there's additional margin and spread to capture in the the first quarter and going into this year. Did that answer the question?

Yes. So gross margin should improve again in the March quarter here?

Yes. And one of the benefits that we have going for us now in the first quarter and we've seen this start to come in at the end of the fourth quarter is all the production improvements with our TCEP plant. So we made a lot of investments in the second, third quarter last year and now we're starting to enjoy those gained efficiencies. So we've got more production capacity, more leverage on our fixed assets and a higher yield and a higher price for our finished product.

Okay. And then volume growth, Ben, how should we think about it this year?

We're -- we just finished our third year of volume growth, that's at a minimum of 20% year-over-year. And obviously, with the acquisition coming on, that's going to change drastically. But if we just looked at a continuation of our existing business, I may be stretching a little bit to say we can continue this 20% growth, but I believe we can and I believe we're on target right now to see that happen.

And you have the ability to do that either through TCEP volume growth or through your aggregation, basically?

Yes, that is correct. We're getting good growth also from our Refining & Marketing business. So TCEP production's going to give us additional growth and even if we make an assumption, our aggregation business is somewhat flat, and I still believe, we've got 20% volume growth opportunity for this year.

Okay. And then, Ben, can you give us an update of how much -- of your TCEP plant, how much of production is coming from internal collections versus third-party today?

Yes, we finished our direct collections volume around 10 plus million gallons and we're planning this year for about 12 million gallons, maybe 12.5 million gallons for 2014. That's organic growth based on all our work that we're doing in our current branches and markets and that's going well. So, yes, still about 1/3.

Okay, great. And then a couple of more questions. So the recovery biz looks like it had a really great quarter at about $6.5 million or $6.4 million, how much did E-Source contribute to that? Is there a way of -- I'm sure there is, is there a way of separating that out?

Yes. In the fourth quarter, E-Source was the majority of that revenue, about $5 million of it. So E-Source had a very strong fourth quarter. One thing as we look at E-Source, and again, we're still working through understanding all of the details and moving parts of that business, but it seems to be somewhat lumpy. It's very project-based. So they will have very strong quarters and then may have some lower quarters as we go forward.

Okay. And I know when we acquired it, we thought about that business being -- I'm trying to remember, maybe $10 million to $12 million annually with kind of upwards of, hopefully, 20% gross margins. I guess, should we expect annually that revenue number to be higher than that, considering the run rate today, but I know it's lumpy and should we think anything differently on gross margins for that overall Recovery business?

Well, let me answer that question, Chad. We've got a pretty strong pipeline of work for 2014 at E-Source and we've signed some really big companies onto those projects. So these are companies like Motiva and enterprise products and just really, really good opportunities. So we feel like the numbers that you just laid out are pretty conservative for this year. Now like Chris said, it is project-related business and -- but a lot of this is under contract. We already have the purchase orders and we're moving well down that path. There's some very interesting opportunities that are in the bid process that we can't speak more about today. But they hold a lot of upside over that projection.

Okay, all right. And then last one for me, maybe for Chris. Chris, can you give us an update on kind of where the balance sheet is today from a cash and debt perspective?

Yes, good question. Cash today is about $2.6 million. Debt, as noted, is about $6.5 million and again, that's with Bank of America. We don't have anything drawn at year-end or today on the line, which has a $10 million availability.

And we're also up pretty good on current assets, inventory and receivables.

So do you expect, I mean, yes, receivables were up and it sounds like, they're still up. Do we expect that to come down and kind of monetize those in the next month or so?

Our receivables, I think, as you know, turn very quickly. So whether that's going to come down in the first quarter or second quarter, I can't answer it. But as long as we keep bringing in volume and keep inventory moving, those receivables are going to be there.

The next question is from Michael Hoffman of Wunderlich.

Actually, we didn't get a cash flow statement. So could you tell us what your cash flow from operations was in the fourth -- or for the year end?

Yes. Let me jump to that for you real quick.

And while you're looking at that, if we could drill a little more narrowly along the business lines and just sort of think about what your expectations are? I mean, to talk about sort of the high level 20% volumes. So if we sort of broke it out across the 3 major segments: Black Oil, Refining and vertex Recovery, how do you -- what's your expectations as you work through the year in each of those businesses as the core legacy company? And what could change, I know you're not supposed to touch on Omega, but what could change as a result of Omega?

Well, the Black Oil business, in general, it hit somewhat of a flat spot in 2013 because we were at capacity at the one facility that we had. So as we add the two more locations, the two regions and the additional refining capacity, that's a big game changer from a volume standpoint. But just putting that aside for a moment, just the improvements we've made in the last part of 2013 has now given us new growth for the existing operation. So we're going to see that come through in the first quarter. Our capacity has stepped up quite a bit more than what we've planned for. So our end of the year production rates were in the 70,000 -- mid-70,000-barrel range, which annualizes much different than the 28 million gallon, and I'm changing gallons and barrels, so work with me there. But we did 28 million gallons of product sales out of TCEP at the end of September. So if you -- we anticipate 35 million, 40 million gallon refining capacity in Houston going forward. So that's going to give us growth. So we see growth coming there. Our Refining & Marketing business is up 31% and so we believe that is a new trend. There's some new opportunities there. Our manager on that division is doing a really good job and it seems to be continuing to improve. So we believe there's growth there. And then our Recovery business has some really interesting projects in the pipeline. We think they're going to bring volume growth to the business for this year.

So in Refining & Marketing, it's up -- I mean, that's a pretty healthy increase year-over-year. What pace can you sustain in that business off the legacy? Because it seems like Omega is going to go into.

Yes, I guess, we didn't talk much about this on our last call, but we've made capital improvements into the Chemtex facility that has opened up more growth capacity for us and we are filling that capacity and we've got some good uptick on our volumes, and the market has been really good for us at the refining level, that's why we increased the asset and production capacity there.

So is this just a debottlenecking, or an added -- a true expansion?

It was debottlenecking and our -- I guess, our relationship with Chemtex has allowed us to expand our volumes. We had to make some capital improvements with the tower, where we have more of a dedicated tower to run our product, instead of a shared tower. And with those investments we made, they've given us more throughput capacity. And Greg Wallace -- they, that runs business has accessed more feedstock to take advantage of that.

Okay. And then on the project pipeline, do you have a sense of -- could you talk about sort of the backlog of proposals out there, just sort of give us a scope of what that addressable market looks like this year?

Yes, I mean, just talking about the pipeline and what we've got in the queue, so to speak, I mean, we've got about 12 to 18 months of work right now sitting in that pipeline ready to go. There's lots of opportunities out there that we continue to look at, but we also have to test our current bandwidth as well as we look to grow the E-Source business long term.

Okay. So about your time there, Chris, did you get that CFFO amount number?

Yes, let me take a look at the cash provided by operating activities for you. So I was looking at the balance sheet, we've got $4.3 million in 2013 compared to $3 million in 2012. As you noted from the balance sheet, you can see inventory has increased a little over $2 million, receivables increased a little over $3 million, and cash was up substantially year-over-year. So that's where a lot of that came from.

The next question is from Anne Margaret Crow of Edison.

I've got a couple of questions. Looking -- first of all, at the percentage of oil that you're handling altogether and how much of that percentage of oil being handled with process by TCEP during FY '13 compared to FY '12? And then of the oil processed by TCEP, we've got a view of how much was collected in-house during FY '13? It's about 1/3. How does that compare with volume that has been collected in-house in FY '12?

So I'd answer that one pretty quick. It's about the same. So as we've continued to expand our refining capacity, we're maintaining about a 33% ratio of street collections into that refining capacity. So we've just taken another step forward, and obviously, our goal is to organically grow the street collections with that new capacity. So on the other question, I'll let Chris answer.

So looking at the TCEP volume compared to the overall company volume handled, it's about 40% in 2013, went through our TCEP process.

Okay and how does that compare with the previous year?

The previous year, I mean, it's not exact, but it was probably closer to 50% that went through the TCEP process.

That's 55 0?

5 0, 50, yes.

And what are your targets for the percentage of oil that you're handling being processed in-house to get high margins and your percentage of oil being collected in-house to get the higher margins?

Anne, that's a long-term goal for us, but we -- and when I say long term, over the next 3 to 5 years, we believe we'll collect somewhere in the 50% range of total volume. We put the target models out there that a little bit more conservative than that. But with the new refining capacity that will come into the business from Omega, we believe it allows us to capture more street-level volumes. And so we're going to pursue that as a real priority over the next 3 to 5 years.

Okay. A target for the amount of oil that you're handling actually being re-refined or processed in some way. Would you be looking to increase that so you get a higher margin from almost all that goes through?

Yes, we have, with the Omega transaction, a trailing 12 production capacity of about 110 million gallons a year. And we believe, over the next couple of years, that will increase to, maybe, 130 million gallons on those assets. So there is continued improvements in the refining capacity, I'll say, opportunity to improve. So if that answers the questions.

The next question is from Jeremy Hellman of Singular Research.

Hey just kind of a general bigger picture question and I don't know if this is overthinking it. But just looking at geopolitical developments over in Ukraine and Russia, do you see that filtering down to affecting the end markets for you guys in any significant way, and if so, how?

No, I don't -- as oil prices in general, crude oil prices and specifically, Brent crude prices are affected by those geopolitical situations. It does have a short-term impact on pricing of our finished products because our products are tied more to Brent crude than WTI. But it's temporary and -- because we buy and sell on index, our business adjusts to whatever those index prices work out to be. So in the short term, it could have a positive or negative impact. If oil prices go up, that's positive, but when they come down, that creates a negative adjustment to whatever we have on hand.

Right. Do you see any increased activity in the amount of calls from nondomestic buyers or other parties that might be looking to find a different source for some of their petroleum-based products or no?

To date, I would say no. We've really focused on the U.S. market and with the new refining capacity, we do have some potential sources outside the U.S. that could play into the business. So that will be an interesting subject as we go forward. But at this time, it's really everything's here in the U.S.

[Operator Instructions] And the next question is from Bob Evans of Pennington Capital.

You had mentioned earlier in the call you're kind of approaching your target market -- margin range of 12% to 15%, how does that change kind of post acquisitions? Given kind of scale and synergies and everything else that you're doing, how might that target margin range improve?

Yes. We definitely believe we're going to be inside our target. Hopefully, we're going to be more on the 15% side of things than the 12% side. The acquisition should allow us more leverage in our overall business model to improve our gross profit. That's our expectation.

Okay, okay. So coming out of this, can we get there sooner versus later?

Yes, I think that was the point, that was a 3- to 5-year march, if you will, and that was having to rollout TCEP facilities in some of these other regions and this transaction accelerates that very well because we have operating plants in two new regions. So all we have to do now is roll the other parts of our model out into those markets. Street collections is a big part of that. So we're definitely ahead of schedule.

The next question is from Jack Lasday of Morgan Stanley.

Hey, can you give us just a little bit of color with regard to your view or sight for the future with regard to the future acquisitions, future expansion, your kind of theory going forward? I know that the acquisition was part of that, but what else is in the pipeline? Not specifics, obviously you can't talk about, but just give us an idea theory-wise what you're still thinking?

Yes, Jack, this acquisition with Omega is transformative to our business and to the industry, in general. It's the building block. So it's -- the heavy lifting now has been done. The opportunities going forward are going to be organic growth around this refining capacity. And we believe that there's some real strain in certain verticals, specifically, around the collections of oil, the street-level collections that will allow us to layer in smaller collection companies into this platform, and there may be some interesting acquisition opportunities that we'll continue to build on our model in general. So we've got to digest what we've got, make sure that everything marries up and our systems are in place. So we're going to be focused the rest of this year on really synergizing the refining capacities between all 3 plants. We've got just a phenomenal operations team that comes with this acquisition that will be taking over the operations of our Houston plant, along with the other two locations. And so there's some improvements that we're going to be making to really streamline our refining capacity. And while we're doing that and getting all our house in order, we're going to be developing our plans to take our growth at a street level and look for the right time in the market to do that. So we're -- we believe that we'll be blocking and tackling now for a little while.

Is your vision to eventually have additional geographics, I'll call them, put into the system as well?

Well, we do believe that we can deploy a national strategy. It's really going to be based on our consolidation of these 2 plants in these two regions and getting those well underway. Deploying the strategy there and then lifting up and looking for some of these other regional markets that we believe we could do really well at and look for strategic opportunities. What's interesting about the market today is, in general, it's been in distress. So we don't know tomorrow if another key opportunity presents itself, we'll have to look at that. And what's really good about where we are, we didn't just get the assets of Omega, we've got a very deep operating team that can deliver a lot more in growth and in oversight and senior leadership than what we had before. So I'm going to spend a lot of time with our new leaders and see what our capacity is and just be cautious to take on what we can execute and do well at, like we've done so far. But we are building our business and we believe there are some real opportunities still ahead of us, and we're going to move on those very carefully. But we do believe that we could move forward. So it's hard to say, on a timing basis, but I certainly see us adding more regions to our business.

We have no further questions in the queue at this time. I would like to turn the floor back over to management for any closing remarks.

Okay. Well, thank you very much for dialing in and your interest in Vertex Energy and our story and what we're trying to do. We're very excited about the results of 2013 and our fourth quarter. We're very excited about the acquisition with Omega and the platform that we now have to grow the business. I'm very excited about the team that we have, the performance of our people over the last 5 years as we've been public and we've had year-over-year sustainable performance through many challenges that the industry has presented. And our team has overcome each one of them and has demonstrated the ability to manage and run this business in a progressive and profitable way, while sustaining continued growth. With the acquisition of Omega, the same type of people are coming in with additional bandwidth. So I'm just very pleased with our people more than I am the assets and what we have, that's very important to work with. But as a growth company, you really need the experience, you need the people that know the business and we have that, we have the team. So we're looking forward to the challenges that we have bringing this new acquisition in and the continued challenges that are in our industry. We believe they provide opportunity for us and we'll figure those out as we move forward. So thank you everyone. Appreciate your interest in calling in today.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.