Vertex Resource Group Ltd. Reports Record Fourth Quarter and Year End 2022 Results

Posted On March 22, 2023

Achieved record quarterly net revenue – $59.8 million and record fourth quarter Adjusted EBITDA – $7.6 million the highest of any fourth quarter in the Company’s history.

Record annual net revenue – $218.4 million and record annual Adjusted EBITDA – $32.2 million.

Sherwood Park, Alberta, March 22, 2023 (TSXV:VTX) – Vertex Resource Group Ltd. (“Vertex” or the “Company”) reports its financial and operational results for the fourth quarter ended December 31, 2022.  The following should be read in conjunction with the Management Discussion and Analysis (“MD&A”) and the audited consolidated financial statements of Vertex for the year ended December 31, 2022, which are available on SEDAR+ at

The fourth quarter continued on momentum built in the previous three quarters and achieved the highest quarterly and annual gross and net revenue in the Company’s history.  The Company has experienced a steady demand for services from customers across multiple industries.  The Company is continuing to maintain its focus on cost containment, operating efficiencies, geographic diversification, and sector diversification while pursuing growth opportunities.

Key financial results for the three months and years ended December 31, 2022, and 2021 are as follows:

Three Months ended December 31, Year ended December 31,
(in thousands of Canadian Dollars)20222021%Change20222021%Change
Restated (1)Restated (1)
Gross revenue71,66659,95320%257,161185,04939%
Less flow through subcontractor costs11,82513,877-15%38,78325,61151%
Net revenue59,84146,07630%218,378159,43837%
Profit Margin12,63710,96915%52,25142,28824%
Adjusted EBITDA (2)7,5566,40918%32,18524,46432%
Free cash flow (2)4,4454,2275%23,53622,8413%
Adjusted EBITDA per share, basic
and diluted (2)
(1) See “Restatement of Comparative Period”
(2) See “Non-IFRS Financial Measures”


  • Vertex achieved the highest net revenue for any quarter in company history at $59.8 million.
  • Profit margin increased to $12.6 million in the quarter compared to $11.0 million in Q4 2021.
  • Record fourth quarter adjusted EBITDA2 of $7.6 million compared to $6.4 million in Q4 2021.
  • Free cash flow2 generated was $4.4 million in the quarter compared to $4.2 million in Q4 2021.


  • Net revenue of $218.4 million, an increase of 37% from $159.4 million in 2021, is the highest revenue achieved in the Company’s operating history.
  • Adjusted EBITDA2 of $32.2 million compared to $26.2 million in 2021, is also the highest in the Company’s history.
  • Reported net income of $2.0 million in 2022 compared to $1.7 million in the prior year.
  • Free cash flow2 generated was $23.5 million compared to $21.8 million in 2021.
  • Completed the second quarter acquisition of Cordy Oilfield Services Inc. (“Cordy”) and the third quarter acquisition of Young EnergyServe Inc. (“Young”). These acquisitions, combined with our existing operations will result in a transformational change for our Environmental Services segment.
  • The Company extended the maturity date of its secured credit facilities to May 31, 2025, increased the revolving loan commitment by $10.0 million and increased the syndicated term loan by $10.0 million.
  • During the year, Vertex issued a $15.0M convertible debenture, with a term of 5 years, 8.0% annual interest paid monthly, at a conversion price of $0.65.


2022 was an excellent year for Vertex with the results being driven by operational efficiencies, realized synergies from our previous acquisitions, strong, stable commodity pricing, as well as the gradual return to pre-COVID activity levels. Our outlook for 2023 is that North American economies will continue to benefit from favourable commodity prices in energy, utilities, agriculture and forestry. In addition, we have major capital projects from multiple midstream, utilities/telecommunications, municipal infrastructure, and energy transition projects in 2023 and 2024.

Vertex is well positioned for 2023 earnings growth with strong secured backlog, and increased demand for our services which is increasing our utilization of equipment and staff. The two acquisitions completed in 2022 will contribute to Vertex’s growth in 2023 and beyond.  The benefits of these acquisitions will be impactful in 2023 providing additional free cashflow generation through savings from integration, elimination of duplicate corporate office costs and by increasing the utilization of the equipment fleet and personnel.

The current trend towards less carbon-intensive energy sources is presenting new opportunities for Vertex. Vertex is working closely with several of our Indigenous Partners and customers to advance projects that reduce atmospheric carbon emissions, enhance biodiversity, carbon sequestering, utilize or convert to wind or solar, renewable natural gas (RNG), biofuels, helium, and emerging hydrogen opportunities.

Vertex’s future outlook is positive with commodity prices supporting maintenance and development activity as well as the continued strengthening of environmental legislation in both Canada and the United States resulting in increased asset retirement liabilities being addressed.  Further government and industry initiatives around energy transition and lowering carbon intensity are providing Vertex with numerous opportunities for our solutions and services.  Vertex continues to demonstrate the strength and resiliency of our business model and is in an enviable position to facilitate further growth through cross-selling of our services throughout the life-cycle of our client’s projects in a variety of industries.

Vertex’s vision of being a world-leading environmental services company has not changed. As an environmental service business, we believe we are uniquely positioned for ESG performance. We understand that we have a responsibility to maximize our internal ESG performance and have made a corporate commitment to do so. More substantially, we understand that our opportunity to support the ESG initiatives of our customers has a significantly broader global impact. As such our ESG system design includes both an internal and a customer focus. As our ESG journey evolves so too will our measurement and reporting, holding ourselves accountable to internal and customer metrics. Ultimately, our intent is to create business resiliency by becoming a primary source of executable ESG supply chain solutions for our customers.



During the finalization of the 2022 audited consolidated financial statements, management identified that revenue from certain contracts with customers was recorded net of the costs incurred to reflect an agency relationship and to match the economic nature of the cash flows of the contracts.  Under the terms of the contracts, the Company was the principal in the arrangement. As a result, revenue and direct costs had been previously understated.  The comparative period, being the year ended December 31, 2021 set out in the audited consolidated financial statements has been restated to correct the error.  There is no impact to the Company’s statement of financial position as at December 31, 2021, no impact on profit margin, net income, basic or diluted earnings per share, and no impact on operating, investing, or financing cash flows for the year ended December 31, 2021.

Given that the issue was identified prior to the imminent release of the Company’s 2022 audited consolidated financial statements and has been corrected for by restating the December 31, 2021 comparative period within those financial statements, the Company does not intend to refile the previously issued December 31, 2021 audited financial statements.  As the 2022 audited financial statements and the accompanying MD&A supersede and replace the financial information in the unaudited quarterly statements filed by the Company during 2022, the Company does not intend to refile its interim financial statements for the year ended December 31, 2022.  The Company has included a note in its audited consolidated financial statements (Note 29) as well as the accompanying MD&A (Section 6.11) which set out a more detailed description of the adjustments.



Since 1962, Vertex has been a leading North American provider of environmental services. Headquartered in Sherwood Park, Alberta, Vertex employs a staff of approximately 1050 employees and lease operators that provide services to help clients achieve their developmental and operational goals. From initial site selection, consultation and regulatory approval, through construction, operation and maintenance, to conclusion and environmental cleanup, Vertex provides a wide array of services to customers operating in industries such as energy, mining, utilities, private development, public infrastructure, construction, telecommunications, forestry, agriculture and government.

Vertex principally operates in Canada with select locations in the United States.


For further information please contact:

Terry Stephenson, CEO, or Sherry Bielopotocky, CFO at 780-464-3295

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



This news release includes certain terms or performance measures that are not defined under International Financial Reporting Standards (“IFRS”), including “Adjusted EBITDA”. The data presented is intended to provide additional information that should not be considered in isolation or as a substitute measure of performance prepared in accordance with IFRS. The non-IFRS measures should be read in conjunction with the Company’s financial statements and accompanying notes.

  1. “Adjusted EBITDA” is a non-financial measure which is calculated by adjusting net (loss) income for the sum of income taxes, finance costs including interest accretion on lease liabilities, depreciation of property and equipment and right of use assets, amortization of intangible assets, share-based compensation, restructuring costs and impairment. The Company uses Adjusted EBITDA as an indicator of its principal business activities operational performance prior to consideration of how its activities are financed and the impact of taxation, non-cash depreciation and amortization, restructuring costs and other non-cash expenses such as impairments required under IFRS. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures provided by other companies. Adjusted EBITDA is used by many analysts as an important analytical tool and management of Vertex believes it is useful for providing readers with additional clarity on Vertex’s operational performance. This measure is also considered important by the Company’s lenders in determining compliance by the Company with the financial covenants under its lending arrangements.
  2. “Free cash flow” is a non-financial measure which is calculated by reducing adjusted EBITDA by maintenance capital expenditures net of disposal proceeds.

Reconciliations of adjusted EBITDA and free cash flow are provided in the table below.

Three Months ended
December 31,
Year ended
December 31,
Net income (loss) for the period(1,295)1,3862,0421,658
Depreciation and amortization6,1664,70220,37619,621
Finance costs2,9701,5088,8756,057
Share-based compensation50-200-
Income tax expense (recovery)(335)(1,187)692(1,100)
ADJUSTED EBITDA7,5566,40932,18526,236
Environmental Consulting2,8502,36710,6538,488
Environmental Services4,9795,33726,02522,438
Adjusted EBITDA7,5566,40932,18526,236
Maintenance capex(3,868)(3,110)(12,282)(7,263)
Proceeds from disposal of property and equipment7579283,6332,831
C) “Adjusted EBITDA per share, basic and diluted” is a non-financial measure which is calculated by dividing adjusted EBITDA by the weighted average shares outstanding – basic and diluted.


Any “financial outlook” or “future oriented financial information” in this MD&A, as defined by applicable securities laws, has been approved by management of Vertex. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other circumstances.

Certain statements contained in this document constitute “forward-looking information”. When used in this document or by any of the Company’s management, the words “may”, “would”, “will”, “intend”, “plan”, “propose”, “anticipate” and “believe” are intended to identify forward-looking information. In particular, but without limiting the foregoing, this document contains forward-looking information and statements pertaining to the following: the Company’s key strategies, objectives and competitive strengths; anticipated expenses; the Company’s ability to integrate and capitalize on underutilized equipment through cross-selling opportunities across service lines and reducing redundant costs in 2023; growth opportunities in 2023; supply and demand for the Company’s services; anticipated savings in 2023; activity levels in the oil and gas industry and other industries in which the Company operates; annual gross maintenance capital expenditures for 2023; future development activities; and the Company’s ability to retain existing clients and attract new business, particularly business outside of the oil and gas industry. Such statements reflect the Company’s forecasts, estimates and expectations, as they relate to the Company’s current views based on its experience and expertise with respect to future events, and are subject to certain risks, uncertainties, and assumptions.

The forward-looking information and statements contained in this document reflect several material factors and expectations and assumptions of the Company, including, without limitation: that the Company will continue to conduct its operations in a manner consistent with past operations; positive future trends in revenue, gross profit margin, Adjusted EBITDA, Bank EBITDA and net income; the general continuance of current or, where applicable, assumed industry conditions; the mix of revenue from non-oil and gas customers in 2023; pricing of the Company’s services; the Company’s ability to market successfully to current and new clients; the Company’s ability to obtain qualified personnel and equipment in a timely and cost-effective manner; the Company’s future debt levels; the impact of competition on the Company; the Company’s ability to obtain financing on acceptable terms; the general continuance of current or, where applicable, assumed industry conditions; the continuance of existing tax, royalty and regulatory regimes; the impact of seasonal weather conditions; client activity levels; anticipated market recovery; the Company’s anticipated business strategies and expected success; the Company’s ability to utilize its equipment; levels of deployable equipment; and future sources of funding for the Company’s capital program.

The forward-looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements, including, without limitation: volatility of the oil and natural gas industry; dependence on customer contracts and market acceptance; the Company’s growth strategy may not achieve anticipated results; potential litigation claims; difficulty in attracting and retaining skilled personnel; adverse litigation judgments, settlements and exposure to liability resulting from legal proceedings could reduce profits of limit Vertex’s ability to operate; the market for Vertex’s products and services is subject to extensive government and regulatory approvals; health, safety and environment laws and regulations may require the Company to make substantial expenditures or cause it to incur substantial liabilities; the Company may fail to realize anticipated benefits of future acquisitions; Vertex’s indebtedness may adversely affect its financial flexibility and competitive position; competition in the industries in which Vertex operates; downturns in general economic and market conditions; operational hazards and unforeseen interruptions for which Vertex may not be adequately insured; positive covenants in Vertex’s material contracts could limit its ability to operate; third part credit risk; conservation measures and technological advances may reduce demand for hydrocarbons; loss of the Company’s information and computer systems or cyber-attacks; director and officer conflicts of interest; a reassessment by tax authorities of Vertex’s income calculations; volatility in the price of the Common Shares; and the risk factors set forth under the heading “Risk Factors” in the AIF.

Vertex’s business is subject to a number of risks and uncertainties. Readers are encouraged to review and carefully consider the risk factors described in the AIF, which risk factors are specifically incorporated by reference herein.

The forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this MD&A are made as of the date of this MD&A. The Company does not intend and does not assume any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, unless required by law.

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