Revenue of $35.8 million and EBITDA of $3.9 million fourth quarter 2017.
Revenue of $118.4 million and EBITDA of $15.5 million in 2017.

SHERWOOD PARK, AB, March 19, 2018 /CNW/ - (TSX.V:VTX) - Vertex Resource Group Ltd. (Vertex or the Company) is pleased to report its financial and operational results for the fourth quarter and year ended December 31, 2017. The following should be read in conjunction with the Management Discussion and Analysis ("MD&A") and the consolidated financials and notes of Vertex for the year ended December 31, 2017 which are available on SEDAR at www.sedar.com

FINANCIAL AND OPERATIONAL HIGHLIGHTS
Key financial and operational highlights for the quarters and years ending December 31, 2017 and 2016 are as follows:

SOLID RESULTS FOR 2017 AND FOURTH QUARTER OF 2017
The results for the year and fourth quarter were in line with management's expectations, reflecting a strong company performance with an increase in economic activity in Western Canada.  The positive trends from the third quarter continued into the fourth quarter of 2017.  In addition, Vertex's efforts to shift and expand its service offerings have yielded positive increases in utilization rates in both equipment and consulting personnel.  Vertex also successfully completed six complimentary and opportunistic acquisitions during 2017, which, along with Vertex's capital program, have contributed to the results.  Vertex continues to integrate and realize the full potential of its acquisitions in 2017 through cross-selling opportunities across business lines, as well as reducing redundant costs. Vertex is making a concerted effort to reduce the costs of the business and diversify its services, product offerings and customer base. These efforts will continue to improve performance and the financial position of the Company in order to capitalize on strategic growth opportunities. As commodity prices have stabilized in 2017, Vertex has been able to invest in the Company, diversify the business and generate positive operational results.

Revenue, gross profit and EBITDA improved and net loss decreased from 2016, as highlighted below:

• Revenue increased to $35.8 million or 43% in the fourth quarter 2017 from $25.0 million for the same quarter in 2016.  Revenue increased to $118.4 million in 2017, up 38% or $32.3 million from 2016. This growth is attributable to a modest rebound in customer spending, the Company's 2017 capital expenditure program, and industry diversification and acquisitions. Vertex's Environmental Services segment has improved utilization of equipment and consultants for its customers both in the oil and gas industry as well as other industries. Revenue increased by securing additional environmental industrial cleaning turnarounds and maintenance contracts as Vertex continues to build this segment of its business. 
  
  
• Gross profit increased to $8.5 million or 24% in the fourth quarter 2017 from $6.9 million for the same quarter in 2016.  Vertex's 2017 gross profit of $32.3 million increased by 30% or $7.5 million from last year. Gross profit, as a percentage of revenue, was slightly down in the quarter and year, given competition for projects and resources have slightly increased. Vertex's gross profit as a percentage of revenue for the fourth quarter of 2017 and year was 24% and 27%, respectively, compared to 27% and 29% for the fourth quarter and 2016.
  
  
• EBITDA for the fourth quarter of $3.9 million increased 198% compared to the same quarter in 2016.  EBITDA was $15.5 million in 2017, up 239% or $10.9 million from the previous year.  This increase was driven by demand for its services which continued to increase the utilization of assets and consultants. Vertex also made improvements in its operating cost structure from prior years that continue to benefit the Company. These factors combined have resulted in significant gains in EBITDA per share as it has improved to $0.20 in 2017 compared to $0.09 in 2016.
  
  
• Net loss for the fourth quarter decreased by 30% or $0.7 million, from a loss of $2.4 million in 2016 to a loss of $1.7 million in 2017. Net loss for the year was $2.9 million in 2017 compared to $8.2 million in 2016.  This decrease is due to improved revenue and the absence of non-recurring restructuring costs that were incurred in 2016. Loss per share was $0.04 in 2017 compared to $0.16 in 2016.  Taking into account the tax affected restructuring costs, net loss has improved relative to 2016 by $1.3 million even though the company incurred additional costs on the capital restructuring of VIER Capital Corp ("Transaction"). Net loss for the quarter included one-time expenses related to the Transaction of $0.8 million net of tax.
  
  
• During the fourth quarter of 2017, capital expenditures were $2.6 million with $1.0 million of proceeds from asset disposals. The Company's capital expenditures were $5.7 million in 2017. Also in 2017, the Company sold $2.4 million worth of capital assets and used proceeds to redeploy capital late in the fourth quarter of 2017. These expenditures were primarily for environmental services equipment to support additional secured work in the second quarter of 2018.

OUTLOOK
Heading into 2018, Vertex anticipates continued positive momentum in operating activities consistent with 2017, along with positive contributions from acquisitions to further improve its overall asset utilization. With the current cost structure and controls in place, increases in revenue are expected to have positive impacts on gross margins, EBITDA and net income as the Company focuses on profitability.

Vertex is encouraged by growth opportunities in its Environmental Services segment through abandonments, water solutions and environmental liability management for its customers both in western Canada and the United States in 2018. Vertex continues to focus on diversifying its customer base and increasing its exposure directly to operating and maintenance budgets of its customers. The Company also continues to cultivate and pursue opportunities to provide its services to customers outside of the oil and gas industry. Vertex anticipates the pricing and margin of its services to improve slightly in 2018 as demand for its services increase. Vertex will continue to focus on achieving efficiencies and cost reductions throughout its operations, including a continued focus on the integration of recent acquisitions and cross-selling complementary services, between segments.

The Company understands the need to focus on enhancing its capital structure to facilitate and invest in these growth initiatives. To this point, Vertex continues to focus on reducing debt, managing working capital and adhering to a prudent capital expenditure plan. Accretive, complementary acquisitions remain an essential component of Vertex's long-term growth plans. Vertex is committed to further improving its operational and financial performance while ensuring that it is creating shareholder value for the longer term.

ABOUT VERTEX
Established in 1976, Vertex has grown to become a leading provider of environmental and environmentally focused industrial services. Headquartered in Sherwood Park, Alberta, Vertex employs a staff of approximately 700 employees that service a wide array of customers in industries such as oil and gas, utilities, telecommunication, forestry, agriculture and government. Vertex's management team is comprised of industry veterans with a successful track record for industry consolidation and opportunistic acquisitions. Vertex principally operates in western Canada and maintains a presence in select locations in the United States.

NON-IFRS FINANCIAL MEASURES
This news release includes certain terms or performance measures that are not defined under International Financial Reporting Standards ("IFRS"), including "EBITDA". The data presented is intended to provide additional information that should not be considered in isolation or as 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.

Net loss before interest, income taxes, depreciation and amortization ("EBITDA") is a non-IFRS measure, calculated by adding back to net income (loss) the sum of income taxes, finance costs, amortization of property and equipment and intangible assets. The Company uses EBITDA as an indicator of its principal business activities prior to consideration of how its activities are financed and the impact of taxation and non-cash depreciation and amortization. EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures provided by other companies. EBITDA is used by many analysts as one of several important analytical tools and management of Vertex believes it is useful for providing readers with additional clarity on Vertex's operational performance prior to consideration of how its activities are financed, taxed, amortized or depreciated. This measure is also considered important by the Company's lenders and is adjusted in determining compliance by the Company with the financial covenants under its lending arrangements. Please refer to the MD&A under the heading "Financial Highlights – EBITDA" for a reconciliation of EBITDA to net income for the three-month periods ended December 31, 2017 and 2016.

FORWARD-LOOKING INFORMATION
Certain statements contained in this news release, such as the Company's expectations regarding its results and the impact of its cost controls, and diversification efforts for the remainder of the year, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company's expectation regarding the impact of its costs controls and diversification efforts are accurate and assumptions regarding future commodity prices, exchange rates and demand for the Company's services. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, as well as the other risks and uncertainties applicable to the provision of environmental and industrial services and to the Company as set forth in the Company's Annual Information Form filed under the Company's SEDAR profile at www.sedar.com. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.

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

SOURCE Vertex Resource Group Ltd.

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