Vertex Energy, Inc. Reports Increased Net Income, Revenue and Gross Profit for the Second Quarter of 2011 Compared to the Second Quarter of 2010

—Revenue Increased by 75%—

—Gross Profit Increased by 171%—

—Conference Call Today at 11:00 A.M. EDT—

HOUSTON--(BUSINESS WIRE)--Vertex Energy, Inc. (OTCBB:VTNR), a leader in the aggregation, re-refining and processing of distressed petroleum streams such as used oil, transmix, fuel oils and off-specification commercial chemical products, today announced its financial results for the second quarter ended June 30, 2011.

Financial highlights for the second quarter and the first six months of 2011 include:

• Consolidated revenue for the quarter increased 75% to $27.8 million compared to $15.9 million for the second quarter of 2010;
• Consolidated revenue for the first six months of 2011 was $48.1 million, a 65% increase over the first six months of 2010;
• Gross profit increased 171% to $2.47 million compared with $900,000 for the second quarter of 2010;
• Gross profit for the first six months of the year increased 145% relative to the same period in 2010 to $4.74 million;
• Net income improved to $1.4 million compared to $283,000 in the second quarter of 2010;
• Net income for the first six months of 2011 improved to $2.6 million, which represents a 372% increase over the first six months of 2010;
• Earnings per fully diluted share increased to $0.10, compared with $0.02 per fully diluted share in the second quarter of 2010;
• Earnings per fully diluted share for the first six months of the year was $.19 compared to $.04 per fully diluted share in the first six months of 2010;
• Overall sales volumes increased 9% compared to Q2 2010;
• Sales volumes for the first six months of 2011 increased 14% relative to the same period last year;
• Gross margin per barrel handled increased by 149% relative to the same quarter last year; and
• Per barrel gross margin for the first six months of 2011 increased by 115% relative to the first six months of 2010.

Benjamin P. Cowart, Chief Executive Officer of Vertex Energy said, “The strong results of the second quarter of 2011 illustrate continued progress with the business, building on the strong results we generated in the first quarter of this year. We continue to grow both our overall sales volume and our per barrel margins. Our patent-pending Thermal-Chemical Extraction Process (“TCEP”) has been particularly impactful as we were able to grow TCEP revenue by 81% for the second quarter of 2011 relative to the same quarter in 2010. Our improved volumes and margins have positively impacted our bottom line with our Q2 2011 net income of $1.4mm exceeding our full year net income from 2010.”

Mr. Cowart continued, “TCEP accounted for 44% of our revenue during the first half of 2011 versus 38% during the first half of 2010. Our TCEP business allows us to process used oil into a refining feedstock or diesel replacement that can be used in all grades of fuel oil. By combining our used oil aggregating capabilities, a traditional strength of the company, with the TCEP technology, we are improving our competitive advantage in the market as this combination enables us to capture higher margins by processing the used oil that we aggregate into a more valuable product that is sold into an extremely large global fuel market.”

Mr. Cowart concluded, “For the remainder of 2011, we will continue to exploit our competitive advantage in the combination of used oil aggregation and TCEP operations, while also analyzing other re-refining technologies that we believe could contribute to the growth of our business. Additionally, we will continue to review potential acquisitions that could enhance our overall competitive positioning within the industry.”

CONFERENCE CALL

As previously announced, Management of Vertex Energy will host a conference call today, Tuesday, August 9, at 11:00 a.m. EDT. Those who wish to participate in the conference call may telephone [phone] from the U.S.; international callers may telephone [phone], approximately 15 minutes before the call. A webcast will also be available at www.vertexenergy.com as well as at the link below:

http://phx.corporate-ir.net/playerlink.zhtml?c=103547&s=wm&e=4169718.

A digital replay will be available by telephone approximately two hours after the call’s completion until August 31, 2011, and may be accessed by dialing 877-660-6853 from the U.S. or 201-612-7415 for international callers, Acct # 380; Replay ID# 376524.

ABOUT VERTEX ENERGY, INC.

Vertex Energy, Inc. (OTCBB:VTNR) is a leader in the aggregation, re-refining and processing of distressed petroleum streams such as used oil, transmix, fuel oils and off-specification commercial chemical products thereby reducing the United States’ reliance on foreign crude oil. Vertex’s focus, as a participant in the alternative energy and environmentally friendly investment sectors, is on creating increased value in the products it manages and produces through a variety of strategies and technologies that facilitate the re-refining of used oil and off specification commercial chemical products into higher value commodities. By creating higher value products from distressed hydrocarbon streams, the Company is positioned to produce both financial and environmental benefits. Vertex is based in Houston, Texas with offices in Georgia and California. More information on the Company can be found at www.vertexenergy.com.

This press release may contain forward-looking statements, including information about management’s view of Vertex’s future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the “Act”). In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Vertex, 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 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’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex undertakes no obligation to update these statements after the date of this release, 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.

VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
	June 30,		December 31,
	2011		2010
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	2,526,326	$	744,313
Accounts receivable, net		2,113,667		1,482,510
Accounts receivable- related party		3,900		-
Inventory		6,047,649		3,901,781
Prepaid expenses		112,720		100,485
Total current assets		10,804,262		6,229,089
Noncurrent assets
Licensing agreement, net		1,957,826		1,833,966
Fixed assets, net		101,129		76,290
Total noncurrent assets		2,058,955		1,910,256
TOTAL ASSETS	$	12,863,217	$	8,139,345
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	6,083,552	$	4,593,199
Accounts payable-related party		968,276		407,273
Total current liabilities		7,051,828		5,000,472
Long-term liabilities
Mandatorily redeemable preferred stock, Series B, $.001 par value, 2,000,000 shares authorized, 0 and 600,000 issued and outstanding as of June 30, 2011 and December 31, 2010 (includes $150,000 to a related party)		-		600,000
Total liabilities		7,051,828		5,600,472
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value per share:
50,000,000 shares authorized
Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 4,580,161 and 4,675,716 issued and outstanding at June 30, 2011 and December 31, 2010 respectively		4,581		4,676
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 9,106,404 and 8,370,849 issued and outstanding at June 30, 2011 and December 31, 2010 respectively		9,106		8,371
Additional paid-in capital		2,940,114		2,275,074
Retained earnings		2,857,588		250,752
Total stockholders’ equity		5,811,389		2,538,873
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	12,863,217	$	8,139,345

CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(UNAUDITED)
	Three Months Ended June 30,						Six Months Ended June 30,
		2011			2010			2011			2010
Revenues	$	27,790,860		$	15,867,061		$	48,081,785		$	29,140,141
Revenues – related parties		-			3,750			17,978			3,750
		27,790,860			15,870,811			48,099,763			29,143,891
Cost of revenues		25,325,275			14,962,107			43,363,282			27,207,357
Gross profit		2,465,585			908,704			4,736,481			1,936,534
Selling, general and administrative expenses		1,006,683			700,195			2,032,738			1,451,369
Income from operations		1,458,902			208,509			2,703,743			485,165
Other income (expense)
Other income		-			100,000			-			130,000
Interest expense		(25,177	)		(25,952	)		(54,218	)		(62,598	)
Total other income (expense)		(25,177	)		74,048			(54,218	)		67,402
Income before income tax		1,433,725			282,557			2,649,525			552,567
Income tax expense		(22,986	)		-			(42,689	)		-
Net income	$	1,410,739		$	282,557		$	2,606,836		$	552,567
Earnings per common share
Basic	$	0.17		$	0.03		$	0.31		$	0.07
Diluted	$	0.10		$	0.02		$	0.19		$	0.04
Shares used in computing earnings per share
Basic		8,535,111			8,258,493			8,487,392			8,256,375
Diluted		13,937,618			13,629,049			13,889,899			13,626,930

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(unaudited)
	Six Months Ended
	June 30, 2011			June 30, 2010
Cash flows operating activities
Net income	$	2,606,836		$	552,567
Adjustments to reconcile net income to cash provided by operating activities
Stock based compensation expense		61,680			101,163
Depreciation and amortization		78,301			70,395
Changes in assets and liabilities
Accounts receivable		(631,157	)		161,998
Accounts receivable- related parties		(3,900	)		(1,250	)
Inventory		(2,145,868	)		875,016
Prepaid expenses		(12,235	)		49,691
Accounts payable		1,490,353			(514,950	)
Accounts payable-related parties		561,003			(41,393	)
Net cash provided by operating activities		2,005,013			1,253,237
Cash flows from investing activities
Purchase of intangible assets		(194,726	)		(260,401	)
Purchase of fixed assets		(32,274	)		(7,154	)
Net cash used by investing activities		(227,000	)		(267,555	)
Cash flows from financing activities
Proceeds from sale of Preferred “B” shares		-			600,000
Proceeds from exercise of common stock warrants		4,000			33
Line of credit proceeds, net		-			1,300,000
Payments on due to related party balance		-			(841,855	)
Net cash provided by financing activities		4,000			1,058,178
Net increase in cash and cash equivalents		1,782,013			2,043,860
Cash and cash equivalents at beginning of the period		744,313			514,136
Cash and cash equivalents at end of period	$	2,526,326		$	2,557,996
SUPPLEMENTAL INFORMATION
Cash paid for interest during the period	$	74,693		$	51,798
Cash paid for income taxes during the period	$	53,000		$	-
NON-CASH TRANSACTIONS
Conversion of Series A Preferred Stock into common shares	$	95		$	27
Conversion of Series B Preferred Stock into common shares	$	600,000		$	-