HOUSTON, Nov. 6, 2019 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company")
today announced financial results for the three months ended
September 30, 2019 and declared a quarterly cash dividend of
$0.24 per common share.
The Company reported net earnings of $0.6
million, or $0.15 per common
share, on revenues of $450.3 million
for the third quarter of 2019, compared to net earnings of
$2.0 million, or $0.48 per common share, on revenues of
$467.9 million for the third quarter
of 2018. On an adjusted basis, net earnings were $1.6 million, or $0.38 per common share, for the third quarter of
2019, compared to net earnings of $1.3
million, or $0.30 per common
share, for the third quarter of 2018.
Adjusted net (losses) earnings, adjusted (losses) earnings per
common share and adjusted cash flow are non-generally accepted
accounting principle ("non-GAAP") financial measures that are
defined and reconciled in the financial tables below.
Key Highlights for Third Quarter 2019:
- Generated revenues of $450.3
million for the third quarter of 2019 compared to
$467.9 million for the third quarter
of 2018
- Net cash flow from operating activities increased from
$8.6 million for the third quarter of
2018 to $9.4 million for the third
quarter of 2019. Grew adjusted cash flow to $6.5 million for the third quarter of 2019 from
$4.2 million for the third quarter of
2018.
- Increased cash and cash equivalents by approximately 7% from
$117.1 million at December 31, 2018 to $124.7 million at September 30, 2019
- Retained strong financial flexibility with no short- or
long-term debt as of September 30,
2019
- Adam's crude oil marketing subsidiary, GulfMark Energy, Inc.,
marketed approximately 105,801 barrels per day ("bpd") of crude oil
during the third quarter of 2019, compared to 70,635 bpd of crude
oil during the third quarter of 2018 — an increase of approximately
50%
- Solidly positioned with 439,173 barrels of crude oil inventory
at September 30, 2019 compared to
415,523 barrels at December 31,
2018
"We were pleased with our overall results for this year's third
quarter, which included a 54% increase in adjusted cash flow from
the third quarter of 2018," said Townes G.
Pressler, Executive Chairman. "We also saw 28% growth
in adjusted net earnings year-over-year for the quarter, while
revenues and net earnings decreased primarily due to declining
gathered crude oil volumes from our captive customer in the Red
River area."
"Our Service Transport business unit began to see lagging market
conditions during the quarter, while as our revenue per mile
increased 4% from the third quarter of 2018, it decreased 1% from
this year's second quarter. In this environment of slightly
declining demand for chemical transport, we are working closely
with our customers to maintain trucking rates given our strong
history of on-time and safe product delivery. Supporting
these efforts, we remain on schedule with 'stair-casing' the age of
our fleet, including the purchase of 86 new tractors and 46 new
trailers during the first nine months of 2019, and commitments to
purchase an additional 55 tractors and 15 trailers during the
remainder of 2019 and into 2020."
"At GulfMark, our legacy and Red
River combined crude oil volumes for the third quarter of
2019 increased 4% from the second quarter of 2019 primarily due to
volumes increases in the Gulf Coast that were partially offset by
continued decreased production in our Red
River market areas. Similar to Service Transport, we
are actively improving the combined age of our GulfMark fleet,
including the replacement and purchase of 28 new tractors during
the first nine months of 2019."
Capital Investments and Dividends
During the third quarter of 2019, the Company spent
approximately $12.3 million of
capital and paid dividends of $1.0
million ($0.24 per common
share). The majority of the capital spending related to the
aforementioned purchase of tractors in Adams' Service Transport
subsidiary.
The Company's Board of Directors declared a quarterly cash
dividend for the third quarter of 2019 in the amount of
$0.24 per common share, payable on
December 20, 2019 to shareholders of
record as of December 6, 2019.
Adams' has consistently paid a dividend since 1994, or more than 25
years.
Outlook
Mr. Pressler concluded, "While the macro-environment has become
more challenging over the past months, the Company remains solidly
positioned for continued long-term success given our best-in-class
safety performance, strategically located footprint of operations,
targeted investments to improve the quality of our vehicle fleet
and strong corporate financial position. Supported by our
diverse customer base, we also continue to benefit from
substantially stable crude oil gathered volumes in our legacy areas
that are relatively resilient to resource play production
swings."
"For the remainder of this year and into 2020, we remain
laser-focused on our peer-leading safety initiatives, including
further fleet modernization and enhanced company-wide processes for
recruiting and retaining drivers. In addition, we will
execute on additional opportunities to increase efficiencies in our
crude oil marketing transportation division, including right sizing
the Red River operation to reflect current operating
conditions. Finally, buttressed by a cash position of well
over $100 million and no debt
outstanding, we are exploring both organic and open market
opportunities to further grow the business. As in the past,
all potential investments will be evaluated on a risk-adjusted
basis and for what we believe will provide the most long-term
benefit for all of our shareholders."
Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes the
non-GAAP financial measures of adjusted cash flow, adjusted net
(losses) earnings and adjusted (losses) earnings per common
share. The accompanying schedules provide definitions of
these non-GAAP financial measures and reconciliations to their most
directly comparable financial measures calculated and presented in
accordance with GAAP. Company management believes these
measures are useful indicators of the financial performance of our
business and uses these measurements as aids in monitoring the
Company's ongoing financial performance from quarter to quarter and
year to year on a regular basis and for benchmarking against peer
companies. Our non-GAAP financial measures should not be
considered as alternatives to GAAP measures such as net income,
operating income, net cash flow provided by operating activities or
any other measure of financial performance calculated and presented
in accordance with GAAP. Our non-GAAP financial measures may
not be comparable to similarly titled measures of other companies
because they may not calculate such measures in the same manner as
we do.
Adams Resources & Energy, Inc. is primarily engaged
in the business of crude oil marketing, transportation and storage,
tank truck transportation of liquid chemicals and dry bulk through
its two subsidiaries, GulfMark Energy, Inc. and Service Transport
Company, respectively. For more information, visit
www.adamsresources.com.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"intend," "plan," "project," "estimate," "continue," "potential,"
"should," "could," "may," "will," "objective," "guidance,"
"outlook," "effort," "expect," "believe," "predict," "budget,"
"projection," "goal," "forecast," "target" or similar words.
Statements may be forward looking even in the absence of these
particular words. Where, in any forward-looking statement, the
Company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. Unless
legally required, Adams undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact: Tracy E.
Ohmart
EVP, Chief Financial Officer
tohmart@adamsresources.com
(713) 881-3609
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$
|
434,609
|
|
$
|
453,626
|
|
$
|
1,331,410
|
|
$
|
1,266,055
|
Transportation
|
|
15,698
|
|
14,265
|
|
48,498
|
|
41,509
|
Total
revenues
|
|
450,307
|
|
467,891
|
|
1,379,908
|
|
1,307,564
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
429,507
|
|
449,367
|
|
1,313,822
|
|
1,250,233
|
Transportation
|
|
13,365
|
|
12,412
|
|
40,902
|
|
36,603
|
General and
administrative
|
|
2,739
|
|
1,533
|
|
8,005
|
|
6,100
|
Depreciation and
amortization
|
|
4,393
|
|
2,340
|
|
12,266
|
|
7,014
|
Total costs and
expenses
|
|
450,004
|
|
465,652
|
|
1,374,995
|
|
1,299,950
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
303
|
|
2,239
|
|
4,913
|
|
7,614
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
investment
|
|
—
|
|
—
|
|
573
|
|
—
|
Interest
income
|
|
758
|
|
601
|
|
2,145
|
|
1,486
|
Interest
expense
|
|
(242)
|
|
(26)
|
|
(424)
|
|
(60)
|
Total other income
(expense), net
|
|
516
|
|
575
|
|
2,294
|
|
1,426
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
819
|
|
2,814
|
|
7,207
|
|
9,040
|
Income tax
provision
|
|
(179)
|
|
(779)
|
|
(1,653)
|
|
(2,247)
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
640
|
|
$
|
2,035
|
|
$
|
5,554
|
|
$
|
6,793
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
$
|
0.15
|
|
$
|
0.48
|
|
$
|
1.31
|
|
$
|
1.61
|
Diluted net earnings
per common share
|
|
$
|
0.15
|
|
$
|
0.48
|
|
$
|
1.31
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
|
$
|
0.24
|
|
$
|
0.22
|
|
$
|
0.70
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
124,726
|
|
$
|
117,066
|
Restricted
cash
|
|
4,903
|
|
—
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
77,665
|
|
85,197
|
Accounts receivable –
related party
|
|
—
|
|
425
|
Inventory
|
|
24,900
|
|
22,779
|
Derivative
assets
|
|
129
|
|
162
|
Income tax
receivable
|
|
2,539
|
|
2,404
|
Prepayments and other
current assets
|
|
1,391
|
|
1,557
|
Total current
assets
|
|
236,253
|
|
229,590
|
|
|
|
|
|
Property and
equipment, net
|
|
62,733
|
|
44,623
|
Operating lease
right-of-use assets, net
|
|
10,137
|
|
—
|
Intangible assets,
net
|
|
1,704
|
|
—
|
Cash deposits and
other assets
|
|
3,018
|
|
4,657
|
Total
assets
|
|
$
|
313,845
|
|
$
|
278,870
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
128,607
|
|
$
|
116,068
|
Accounts payable –
related party
|
|
6
|
|
29
|
Derivative
liabilities
|
|
126
|
|
139
|
Current portion of
finance lease obligations
|
|
2,142
|
|
883
|
Current portion of
operating lease liabilities
|
|
2,245
|
|
—
|
Other current
liabilities
|
|
10,709
|
|
6,148
|
Total current
liabilities
|
|
143,835
|
|
123,267
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
1,549
|
|
1,525
|
Finance lease
obligations
|
|
4,927
|
|
3,209
|
Operating lease
liabilities
|
|
7,890
|
|
—
|
Deferred taxes and
other liabilities
|
|
5,763
|
|
4,271
|
Total
liabilities
|
|
163,964
|
|
132,272
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
149,881
|
|
146,598
|
Total liabilities and
shareholders' equity
|
|
$
|
313,845
|
|
$
|
278,870
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2019
|
|
2018
|
Operating
activities:
|
|
|
|
|
Net
earnings
|
|
$
|
5,554
|
|
$
|
6,793
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
12,266
|
|
7,014
|
Gains on sales of
property
|
|
(1,386)
|
|
(890)
|
Provision for doubtful
accounts
|
|
(36)
|
|
(95)
|
Stock-based
compensation expense
|
|
352
|
|
144
|
Deferred income
taxes
|
|
1,493
|
|
(685)
|
Net change in fair
value contracts
|
|
20
|
|
5
|
Gain on dissolution of
AREC
|
|
(573)
|
|
—
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
8,520
|
|
12,830
|
Accounts
receivable/payable, affiliates
|
|
(23)
|
|
1
|
Inventories
|
|
(2,121)
|
|
(22,568)
|
Income tax
receivable
|
|
(135)
|
|
1,317
|
Prepayments and other
current assets
|
|
166
|
|
(7)
|
Accounts
payable
|
|
13,613
|
|
22,254
|
Accrued
liabilities
|
|
4,561
|
|
3,815
|
Other
|
|
871
|
|
(103)
|
Net cash provided by
operating activities
|
|
43,142
|
|
29,825
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(25,425)
|
|
(7,756)
|
Asset
acquisition
|
|
(5,624)
|
|
—
|
Proceeds from property
sales
|
|
2,853
|
|
1,314
|
Proceeds from
dissolution of AREC
|
|
998
|
|
—
|
Insurance and state
collateral refunds
|
|
750
|
|
1,070
|
Net cash used in
investing activities
|
|
(26,448)
|
|
(5,372)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments of
finance lease obligations
|
|
(1,171)
|
|
(288)
|
Dividends paid on
common stock
|
|
(2,960)
|
|
(2,784)
|
Net cash used in
financing activities
|
|
(4,131)
|
|
(3,072)
|
|
|
|
|
|
Increase in cash
and cash equivalents, including restricted cash
|
|
12,563
|
|
21,381
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
117,066
|
|
109,393
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
|
129,629
|
|
$
|
130,774
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Cash Flow to
Net Earnings:
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
640
|
|
$
|
2,035
|
|
$
|
5,554
|
|
$
|
6,793
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
179
|
|
779
|
|
1,653
|
|
2,247
|
Depreciation and
amortization
|
|
4,393
|
|
2,340
|
|
12,266
|
|
7,014
|
Gains on sales of
property
|
|
(952)
|
|
(444)
|
|
(1,386)
|
|
(890)
|
Gain on dissolution of
AREC
|
|
—
|
|
—
|
|
(573)
|
|
—
|
Stock-based
compensation expense
|
|
155
|
|
141
|
|
352
|
|
144
|
Inventory liquidation
gains
|
|
—
|
|
(60)
|
|
(1,459)
|
|
(2,535)
|
Inventory valuation
losses
|
|
2,051
|
|
—
|
|
—
|
|
—
|
Net change in fair
value contracts
|
|
1
|
|
8
|
|
20
|
|
5
|
Insurance proceeds for
Hurricane
Harvey claims
|
|
—
|
|
(610)
|
|
—
|
|
(610)
|
Adjusted cash
flow
|
|
$
|
6,467
|
|
$
|
4,189
|
|
$
|
16,427
|
|
$
|
12,168
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted net
earnings and earnings per
common share (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
640
|
|
$
|
2,035
|
|
$
|
5,554
|
|
$
|
6,793
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
AREC
|
|
—
|
|
—
|
|
(573)
|
|
—
|
Gains on sales of
property
|
|
(952)
|
|
(444)
|
|
(1,386)
|
|
(890)
|
Stock-based
compensation expense
|
|
155
|
|
141
|
|
352
|
|
144
|
Net change in fair
value contracts
|
|
1
|
|
8
|
|
20
|
|
5
|
Inventory liquidation
gains
|
|
—
|
|
(60)
|
|
(1,459)
|
|
(2,535)
|
Inventory valuation
losses
|
|
2,051
|
|
—
|
|
—
|
|
—
|
Insurance proceeds for
Hurricane
Harvey claims
|
|
—
|
|
(610)
|
|
—
|
|
(610)
|
Tax effect of
adjustments to earnings
|
|
(264)
|
|
203
|
|
639
|
|
817
|
Adjusted net
earnings
|
|
$
|
1,631
|
|
$
|
1,273
|
|
$
|
3,147
|
|
$
|
3,724
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
common share
|
|
$
|
0.38
|
|
$
|
0.30
|
|
$
|
0.73
|
|
$
|
0.88
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Cash Flow to
Net Cash Provided by Operating
Activities:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
9,394
|
|
$
|
8,588
|
|
$
|
43,142
|
|
$
|
29,825
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
|
179
|
|
779
|
|
1,653
|
|
2,247
|
Deferred income
taxes
|
|
(481)
|
|
(147)
|
|
(1,493)
|
|
685
|
Provision for doubtful
accounts
|
|
—
|
|
63
|
|
36
|
|
95
|
Inventory liquidation
gains
|
|
—
|
|
(60)
|
|
(1,459)
|
|
(2,535)
|
Inventory valuation
losses
|
|
2,051
|
|
—
|
|
—
|
|
—
|
Harvey insurance
proceeds
|
|
—
|
|
(610)
|
|
—
|
|
(610)
|
Changes in assets and
liabilities
|
|
(4,676)
|
|
(4,424)
|
|
(25,452)
|
|
(17,539)
|
Adjusted cash
flow
|
|
$
|
6,467
|
|
$
|
4,189
|
|
$
|
16,427
|
|
$
|
12,168
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/adams-resources--energy-inc-announces-results-for-third-quarter-2019-and-declares-quarterly-dividend-300953192.html
SOURCE Adams Resources & Energy, Inc.