Vivakor Reports 111% Revenue Growth to $59.3 Million Revenue for 2023

Rhea-AI Summary

Vivakor reported a significant 111% revenue growth to $59.3 million for the year 2023. Gross profit increased by 75% to $5.0 million with a gross margin of 8.5%. Operating loss decreased by 72% to $6.3 million. Adjusted EBITDA saw a remarkable 122% increase to $0.5 million. Net loss decreased by 45% to $10.7 million. The company signed definitive merger agreements with Empire Diversified Energy and Endeavor Entities, foreseeing a combined enterprise value of $370 million.

Positive

• Vivakor achieved a substantial revenue growth of 111% to $59.3 million in 2023, showcasing strong financial performance.

• Gross profit increased by 75% to $5.0 million, indicating improved operational efficiency and profitability for the company.

• Adjusted EBITDA surged by approximately 122% to $0.5 million, reflecting enhanced financial health and management effectiveness.

• The signed definitive merger agreements with Empire Diversified Energy and Endeavor Entities are expected to advance Vivakor as a prominent player in the clean energy technology sector, projecting a combined enterprise value of $370 million.

Negative

• Although the operating loss decreased by 72% to $6.3 million, the company still faces challenges in achieving profitability, indicating the need for further cost control measures.

• The gross margin decreased from 10.2% to 8.5%, signaling potential operational inefficiencies that could impact the company's overall financial performance.

• Despite a decrease in net loss by 45% to $10.7 million, Vivakor needs to focus on sustained profitability to ensure long-term business sustainability.

Insights

Financial Analyst

Vivakor's report of 111% revenue growth is a significant metric, signaling a strong increase in sales from $28.1 million to $59.3 million year-over-year. This jump could be attributed to the successful integration of newly acquired operations and suggests that the company is expanding its market share within the clean energy and oil remediation sector. However, the decrease in gross margin from 10.2% to 8.5% could raise some concerns about cost management and pricing power. Investors should also note the stark reduction in operating loss by 72%, which may reflect improved operational efficiency or cost-cutting measures. The conversion from a negative Adjusted EBITDA to a positive figure indicates a healthier financial position, although it remains modest at $0.5 million. Regarding the net loss reduction, it is vital to analyze whether this is due to operational improvements or one-time benefits. Understanding the nature of non-cash expenses like depreciation and stock-based compensation, which seem to constitute a large portion of the operating losses, is important for investors assessing the company's actual cash-burn rate. The acquisitions of Empire Diversified Energy and the Endeavor Entities could be a double-edged sword: they promise synergies and revenue growth, but also carry risks related to integration and additional debt.

Energy Sector Analyst

The strategic moves by Vivakor to strengthen its foothold in the clean energy space through acquisitions like Empire Diversified Energy highlight the ongoing industry shift towards sustainable energy solutions. Empire’s operations, including the waste-to-energy pyrolysis plant and involvement in the Appalachian Regional Clean Hydrogen Hub, underscore a trend towards investing in cleaner technologies that may become increasingly valuable as policy and market demand drive the energy transition. Investors should be aware of the potential long-term benefits of these investments against the backdrop of global decarbonization efforts. However, the capital-intensive nature of these projects coupled with the early stages of commercialization of such technologies, like RPC, could mean that significant returns may not materialize in the short term. The focus should be on Vivakor's ability to effectively integrate these technologies and manage the costs associated with scaling up their operations.

Mergers & Acquisitions Expert

While the proposed acquisitions and merger with Empire Diversified Energy and Endeavor Entities are significant, investors should exercise caution. The involvement of the CEO in the Endeavor Entities might raise questions about potential conflicts of interest, which should be thoroughly vetted. It is also important to consider the terms of the acquisition deals, specifically the long-term take-or-pay contracts which secure minimum revenue levels but also impose certain obligations that could affect cash flow. The ability of Vivakor to meet these contract terms and the specific conditions that must be satisfied for acquisitions to close are vital to understanding the company's future financial health. Moreover, the combined enterprise value of $250 million for the merger with Empire Diversified Energy represents a major investment and the integration process will be a critical factor to watch.

DALLAS, TX / ACCESSWIRE / April 29, 2024 / Vivakor, Inc. (Nasdaq:VIVK) ("Vivakor" or the "Company"), a clean energy technology company focused on the oil remediation and natural resources sectors, today announced financial and operational results for the twelve months ended December 31, 2023.

Key Financial Highlights for the Year Ended December 31, 2023 (year-over-year):

• Revenue increased 111% to $59.3 million
• Gross profit increased 75% to $5.0 million
• Gross margin of 8.5%
• Operating loss decreased 72% to $6.3 million
• Adjusted EBITDA increased approximately 122% to $0.5 million
• Net loss decreased 45% to $10.7 million

Subsequent to the End of 2023:

• Signed Definitive Merger Agreement with Empire Diversified Energy for a Combined Enterprise Value of Approximately $250 Million at Time of Signing
• Signed Definitive Agreement to Acquire Endeavor Entities for $120 Million

Management Commentary

Vivakor Chairman and Chief Executive Officer James Ballengee commented, "We are pleased with our 2023 financial results, as our operating assets in Colorado City, Texas and Delhi, Louisiana continue to meet our expectations. This was our first full year owning these midstream crude oil storage and gathering operations under Vivakor and they have provided us a solid platform from which to build upon."

Ballengee concluded, "We remain enthused about various opportunities to commercialize our RPC technology, and we are repositioning such assets in order to maximize their potential. We believe our Houston site provides a tremendous opportunity to be able to recover and reuse approximately 1.3 barrels of oil per ton of waste. We continue to work with local authorities in Kuwait to re-position and ready our equipment to initiate production. Our recently announced proposed acquisitions of Empire Diversified Energy and the Endeavor Entities are both expected to advance us to our next phase as a socially responsible operator, acquirer and developer of clean energy technologies and environmental solutions."

March 4, 2024:

Signed Definitive Merger Agreement with Empire Diversified Energy for a Combined Enterprise Value of Approximately $250 Million

Empire's primary location is in Follansbee, West Virginia, where it operates The Port of West Virginia within its Eco-Industrial Complex, situated along the Ohio River, with nearly 1,000 acres of contiguous land where it serves as the crossroads of the East Coast and Midwest through its trimodal (road, river, rail) terminal facility. Empire is currently deploying a host of innovative and sustainable technologies serving the transportation, recyclable waste, steel, warehousing, and other energy sectors to help decarbonize the region.

In additional to the traditional facilities at The Port, Empire's flagship waste-to-energy pyrolysis plant, which is slated to come online in the second fiscal quarter of this year, is intended to provide behind-the-grid electrical power to The Port, while producing salable hydrochloric acid and excess gas. The plant is designed to recycle 70 tons of plastics per day through a pyrolysis process that employs high heat in the absence of oxygen, is environmentally friendly and virtually emission free. Additionally, the U.S. Department of Energy's (DOE) Office of Clean Energy Demonstrations (OCED) has selected the Appalachian Regional Clean Hydrogen Hub (ARCH2) as a recipient of up to $925 million in funding to advance the development of hydrogen projects throughout West Virginia, as well as parts of eastern Ohio and western Pennsylvania. Empire was selected from over 80 initial applicants and is slated to receive a portion of these funds to assist in the engineering and buildout of an anaerobic digester project at The Port as part of the ARCH2 project consortium. Our acquisition of Empire is scheduled to close on or before September 30, 2024, but certain closing conditions must be met by all parties in order for the transaction to close.

March 25, 2024

Signed Definitive Agreement to Acquire Endeavor Entities for $120 Million

The Endeavor Entities operate in the midstream segment of the oil industry, which targets oil logistics, gathering and storage, including crude oil and produced water trucking and disposal services, and also operate a crude oil pipeline gathering system and pipeline injection stations. Vivakor expects to benefit from the possible synergies these acquisitions will create. In addition, each of the material businesses have 10-year take or pay contracts with White Claw Crude, LLC, an affiliate of Jorgan, which began on January 1, 2024, that provide minimum revenue levels. In the crude oil and produced water trucking business, the Endeavor Crude, LLC contract with White Claw Crude, LLC guarantees a volume of 75,000 barrels of crude oil be transported each day. The pipeline gathering contract with CPE MidCon, LLC guarantees a minimum pipeline throughput revenue of $200,000 per month. Regarding the possible acquisition of Silver Fuels Processing (SFP) injection stations, minimum contract guarantees call for 200,000 barrels per month of throughput at $0.275 per barrel. Additionally, SFP is in the process of constructing a new station located in the Permian Basin that is expected add an additional 30,000 barrels per month for a new minimum of 230,000 barrels per month. The Endeavor entities are controlled by our Chief Executive Officer. Our acquisition of the Endeavor Entities is scheduled to close on or before June 30, 2024, but certain closing conditions must be met by all parties in order for the transaction to close.

Financial Results for Twelve Months Ended December 31, 2023

• Revenue for the twelve months ended December 31, 2023 increased $31.2 million, or 111%, to $59.3 million, compared to $28.1 million for the twelve months ended December 31, 2022. This increase in revenue is primarily attributed to our oil and natural gas liquid sales which have been realized through the operations from Silver Fuels Delhi, LLC, which was acquired through a business combination, which closed on August 1, 2022.
• Gross profit for the twelve months ended December 31, 2023 increased $2.2 million, or 75%, to $5.0 million, compared to $2.9 million for the twelve months ended December 31, 2022. The resulting gross margin for the twelve months ended December 31, 2023 was 8.5%, compared to 10.2% for the twelve months ended December 31, 2022.
• Operating loss for the twelve months ended December 31, 2023 decreased $16.4 million, or 72%, to $6.3 million, compared to $22.7 million for the twelve months ended December 31, 2022. Operating loss of the twelve months ended December 31, 2023 included non-cash expenses totaling $5.5 million, and is related to depreciation and amortization expense of $3.9 million and stock-based compensation of $1.6 million, compared to a total of $5.6 million, comprised of $3.0 million of depreciation and amortization expense and $2.6 million in stock-based compensation for the twelve months ended December 31, 2022.
• Adjusted EBITDA for the twelve months ended December 31, 2023 increased $2.9 million to $0.5 million, compared to negative Adjusted EBITDA of $2.4 million for the twelve months ended December 31, 2022. Our Adjusted EBITDA is calculated by adjusting earnings before interest, taxes, depreciation, and amortization (EBITDA) for non-cash or one-time expenses, including unrealized gains or losses on marketable securities, stock compensation expense, and non-qualified stock option expense, which led to net adjustments to EBITDA for the twelve months ended December 31, 2023 and 2022 of approximately $0.9 million and $15.8 million, respectively.
• Net loss for the twelve months ended December 31, 2023 decreased $8.7 million, or 45%, to $10.7 million, compared to $19.4 million for the twelve months ended December 31, 2022. The resulting net loss per share of common stock loss for the twelve months ended December 31, 2023, was ($0.56), compared to a net loss per share of common stock of ($1.22) for the twelve months ended December 31, 2022.

About Vivakor, Inc.

Vivakor, Inc. (NASDAQ:VIVK), is a clean energy technology company focused on the oil remediation and natural resources sectors. Vivakor's corporate mission is to create, acquire, accumulate, and operate distinct assets, intellectual properties, and exceptional technologies. Its Silver Fuels Delhi, LLC, and White Claw Colorado City, LLC subsidiaries include crude oil gathering, storage, and transportation facilities, which feature long-term ten year take-or-pay contracts.

The Company's patented Remediation Processing Centers allows for the environmentally-friendly recovery of bitumen (heavy crude) and other hydrocarbons from the remediation of contaminated soils. It is believed to be the only remediation system that can clean soils with more than 5% by weight oil contamination while recovering the oil and leaving the soil fully viable for reuse. The Company's Remediation Processing Centers focus on extraction from shallow, oil-laden sands, along with other petroleum-based remediation projects. The Company currently has projects under development in Kuwait and in Houston, Texas.

For more information, please visit our website: http://vivakor.com

Forward-Looking Statements

This news release may contain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including economic slowdown affecting companies, our ability to successfully develop products, rapid change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in Vivakor's filings with the Securities and Exchange Commission, which factors may be incorporated herein by reference. Forward-looking statements may be identified but not limited by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," or "continue" and variations or similar expressions. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Investors Contact:
P:949-281-2606
info@vivakor.com

ClearThink
nyc@clearthink.capital

SOURCE: Vivakor

View the original press release on accesswire.com

FAQ

What was Vivakor's revenue growth for 2023?

Vivakor reported a 111% revenue growth to $59.3 million for the year 2023.

What was the gross profit increase for Vivakor in 2023?

The gross profit increased by 75% to $5.0 million for Vivakor in 2023.

What was the percentage change in operating loss for Vivakor in 2023?

The operating loss for Vivakor decreased by 72% to $6.3 million in 2023.

What was the net loss decrease for Vivakor in 2023?

The net loss for Vivakor decreased by 45% to $10.7 million in 2023.

What are the companies Vivakor signed merger agreements with in 2024?

Vivakor signed definitive merger agreements with Empire Diversified Energy and Endeavor Entities in 2024.