HOUSTON, March 5, 2020 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company")
today announced its financial results for the three months and year
ended December 31, 2019.
The Company reported net earnings of $2.7
million, or $0.63 per common
share, on revenues of $431.3 million
for the fourth quarter of 2019, compared to net losses of
$3.8 million, or a $0.91 loss per common share, on revenues of
$442.6 million for the fourth quarter
of 2018. On an adjusted basis, net earnings were $0.9 million, or $0.22 per common share, for the fourth quarter of
2019, compared to net earnings of $2.2
million, or $0.52 per common
share, for the fourth quarter of 2018.
For the full year 2019, the Company had net earnings of
$8.2 million, or $1.94 per common share, on revenues of
$1.81 billion, compared to net
earnings of $2.9 million, or
$0.70 per common share, on revenues
of $1.75 billion for the full year
2018. On an adjusted basis, net earnings were $4.1 million, or $0.96 per common share, for the full year 2019,
compared to net earnings of $5.9
million, or $1.40 per common
share, for the full year 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.
Additional Key Highlights
- Grew net cash flow from operating activities to $3.8 million for the fourth quarter of 2019
compared to $1.2 million for the
fourth quarter of 2018. Full year 2019 net cash flow from operating
activities increased more than 50% to $46.9
million from $31.0 million in
2018.
- Adjusted cash flow for the fourth quarter of 2019 was
$5.5 million, which was relatively
flat with $5.7 million for the fourth
quarter of 2018. Grew adjusted cash flow to $21.9 million for full year 2019 — a 23% increase
from $17.9 million in 2018.
- Paid dividends totaling $0.94 per
common share in 2019. Adams has consistently paid a dividend since
1994, or more than 25 years.
- Entered 2020 with a strong balance sheet and enhanced financial
flexibility supported by cash and cash equivalents of $113.0 million and no debt at December 31, 2019.
- Marketed 108,627 barrels per day ("bpd") of crude oil during
the fourth quarter of 2019 through Adams' crude oil marketing
subsidiary, GulfMark Energy, Inc. ("GulfMark"), compared to 110,802
bpd of crude oil during the fourth quarter of 2018. For the full
year 2019, GulfMark marketed 107,383 bpd of crude oil versus 79,361
bpd of crude oil in 2018.
- Solidly positioned with 426,397 barrels of crude oil inventory
at December 31, 2019 compared to
415,523 barrels at December 31,
2018.
- Ended 2019 with owned or leased fleet across GulfMark and
Service Transport Company ("Service Transport"), Adams' liquid
chemicals and dry bulk transportation subsidiary, of 537 tractors
and 919 trailers. Through its targeted efforts to further modernize
its fleet, Adams' improved the average life of its tractor fleet to
2.4 years at December 31, 2019
compared to 4.3 years at December 31,
2018.
"We were pleased with our overall results for the fourth quarter
of 2019, which included modest improvement in gross margins from
the third quarter of 2019 in both of our businesses," said
Kevin J. Roycraft, Chief Executive
Officer and President. "We were also pleased with our full
year results for 2019, which included more than a 20% increase in
adjusted cash flow from 2018 levels."
"During the fourth quarter of 2019, our Service Transport
business unit posted a 3% increase in revenue per mile from the
third quarter despite an environment of slightly declining demand
for chemical transport. Our ability to grow or maintain
trucking rates is directly tied to customer recognition of our
industry-leading reputation of on-time and safe product
delivery. As a result, in the fourth quarter, we continued to
'stair-case' the age of our fleet through the purchase of 66 new
tractors and 31 new trailers."
"GulfMark's total crude oil volumes for the fourth quarter of
2019 increased 3% from the third quarter of 2019 primarily due to
higher volumes in the Gulf Coast, partially offset by decreased
volumes coming from our Red River
market areas as a result of decreased production. During the
fourth quarter, we also further improved the combined age of our
fleet through the replacement and purchase of 15 new tractors."
Capital Investments and Dividends
The Company spent $10.3 million of
capital and paid dividends of $1.0
million ($0.24 per common
share) during the fourth quarter of 2019. The majority of the
capital spending related to the aforementioned purchase of
tractors.
For the full year 2019, Adams' spent $35.7 million on capital projects, substantially
associated with further modernization of its combined tractor and
trailer fleet. In total, the Company purchased 195 new
tractors and 77 new trailers in 2019. In addition, on
May 6, 2019, the Company completed
the acquisition of the assets of EH Transport, Inc. and affiliates
(collectively, "EH Transport") for $6.4
million, which added 39 tractors and 51 trailers to Service
Transport's fleet.
As previously announced on February 20,
2020, the Company's Board of Directors declared a quarterly
cash dividend for the fourth quarter of 2019 in the amount of
$0.24 per common share, payable on
March 20, 2020 to shareholders of
record as of March 6, 2020.
Outlook
Mr. Roycraft concluded, "For 2020, we are focused on growing
market share in an environment where competition in both of our
core businesses is expected to remain strong. At GulfMark, we
will continue to identify and execute on opportunities to increase
margins and cash flow, including increasing our trucking fleet to
add to our ability to gather and distribute crude oil.
Service Transport's efforts will remain squarely focused on
increasing truck utilization through further enhancements in fleet
quality and driver retention and recruitment. We believe this
business is uniquely positioned to benefit from all the major
downstream infrastructure projects taking place across the Gulf
Coast, and we will continue to look for ways to enhance our
terminal footprint in support of our efforts to gain new
business."
"In addition to our multi-faceted organic development efforts,
we will also evaluate opportunities to further differentiate and
grow our market position through the acquisition of businesses that
are adjacent and complementary to our existing operating
activities. We believe our strong financial position,
including more than $100 million in
cash and no debt, places us in a strong position to execute on
strategic opportunities as appropriate. Of course, any
investment decision will be evaluated using a clear and objective
lens of 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 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.
About Adams Resources & Energy, Inc.
Adams Resources & Energy, Inc. is 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
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Marketing
|
$
|
416,646
|
|
|
$
|
428,382
|
|
|
$
|
1,748,056
|
|
|
$
|
1,694,437
|
|
Transportation
|
14,693
|
|
|
14,267
|
|
|
63,191
|
|
|
55,776
|
|
Total
revenues
|
431,339
|
|
|
442,649
|
|
|
1,811,247
|
|
|
1,750,213
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Marketing
|
409,394
|
|
|
430,812
|
|
|
1,723,216
|
|
|
1,681,045
|
|
Transportation
|
12,490
|
|
|
11,566
|
|
|
53,392
|
|
|
48,169
|
|
General and
administrative
|
2,193
|
|
|
2,837
|
|
|
10,198
|
|
|
8,937
|
|
Depreciation and
amortization
|
4,375
|
|
|
3,640
|
|
|
16,641
|
|
|
10,654
|
|
Total costs and
expenses
|
428,452
|
|
|
448,855
|
|
|
1,803,447
|
|
|
1,748,805
|
|
|
|
|
|
|
|
|
|
Operating earnings
(losses)
|
2,887
|
|
|
(6,206)
|
|
|
7,800
|
|
|
1,408
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Gain on dissolution of
investment
|
—
|
|
|
—
|
|
|
573
|
|
|
—
|
|
Interest
income
|
621
|
|
|
669
|
|
|
2,766
|
|
|
2,155
|
|
Interest
expense
|
(212)
|
|
|
(49)
|
|
|
(636)
|
|
|
(109)
|
|
Total other income
(expense), net
|
409
|
|
|
620
|
|
|
2,703
|
|
|
2,046
|
|
|
|
|
|
|
|
|
|
(Losses) earnings
before income taxes
|
3,296
|
|
|
(5,586)
|
|
|
10,503
|
|
|
3,454
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
(643)
|
|
|
1,738
|
|
|
(2,296)
|
|
|
(509)
|
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,653
|
|
|
$
|
(3,848)
|
|
|
$
|
8,207
|
|
|
$
|
2,945
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share:
|
|
|
|
|
|
|
|
Basic net (losses)
earnings per common share
|
$
|
0.63
|
|
|
$
|
(0.91)
|
|
|
$
|
1.94
|
|
|
$
|
0.70
|
|
Diluted net (losses)
earnings per common share
|
$
|
0.63
|
|
|
$
|
(0.91)
|
|
|
$
|
1.94
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
$
|
0.94
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
112,994
|
|
|
$
|
117,066
|
|
Restricted
cash
|
9,261
|
|
|
—
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
94,534
|
|
|
85,197
|
|
Accounts receivable –
related party
|
—
|
|
|
425
|
|
Inventory
|
26,407
|
|
|
22,779
|
|
Derivative
assets
|
—
|
|
|
162
|
|
Income tax
receivable
|
2,569
|
|
|
2,404
|
|
Prepayments and other
current assets
|
1,559
|
|
|
1,557
|
|
Total current
assets
|
247,324
|
|
|
229,590
|
|
|
|
|
|
Property and
equipment, net
|
69,046
|
|
|
44,623
|
|
Operating lease
right-of-use assets, net
|
9,576
|
|
|
—
|
|
Intangible assets,
net
|
1,597
|
|
|
—
|
|
Cash deposits and
other
|
3,299
|
|
|
4,657
|
|
Total
assets
|
$
|
330,842
|
|
|
$
|
278,870
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
147,851
|
|
|
$
|
116,068
|
|
Accounts payable –
related party
|
5
|
|
|
29
|
|
Derivative
liabilities
|
—
|
|
|
139
|
|
Current portion of
finance lease obligations
|
2,167
|
|
|
883
|
|
Current portion of
operating lease liabilities
|
2,252
|
|
|
—
|
|
Other current
liabilities
|
7,302
|
|
|
6,148
|
|
Total current
liabilities
|
159,577
|
|
|
123,267
|
|
Other long-term
liabilities:
|
|
|
|
Asset retirement
obligations
|
1,573
|
|
|
1,525
|
|
Finance lease
obligations
|
4,376
|
|
|
3,209
|
|
Operating lease
liabilities
|
7,323
|
|
|
—
|
|
Deferred taxes and
other liabilities
|
6,352
|
|
|
4,271
|
|
Total
liabilities
|
179,201
|
|
|
132,272
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity
|
151,641
|
|
|
146,598
|
|
Total liabilities and
shareholders' equity
|
$
|
330,842
|
|
|
$
|
278,870
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
Year
Ended
|
|
December
31,
|
|
2019
|
|
2018
|
Operating
activities:
|
|
|
|
Net
earnings
|
$
|
8,207
|
|
|
$
|
2,945
|
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
16,641
|
|
|
10,654
|
|
Gains on sales of
property
|
(1,400)
|
|
|
(1,240)
|
|
Provision for doubtful
accounts
|
(12)
|
|
|
(150)
|
|
Stock-based
compensation expense
|
478
|
|
|
255
|
|
Deferred income
taxes
|
2,085
|
|
|
936
|
|
Net change in fair
value contracts
|
23
|
|
|
(2)
|
|
Gain on dissolution of
AREC
|
(573)
|
|
|
—
|
|
Changes in assets
and liabilities:
|
|
|
|
Accounts
receivable
|
(8,373)
|
|
|
36,350
|
|
Accounts
receivable/payable, affiliates
|
(24)
|
|
|
24
|
|
Inventories
|
(3,628)
|
|
|
(10,587)
|
|
Income tax
receivable
|
(165)
|
|
|
(1,087)
|
|
Prepayments and other
current assets
|
(2)
|
|
|
(293)
|
|
Accounts
payable
|
31,795
|
|
|
(10,252)
|
|
Accrued
liabilities
|
1,154
|
|
|
1,744
|
|
Other
|
693
|
|
|
1,717
|
|
Net cash provided by
operating activities
|
46,899
|
|
|
31,014
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Property and equipment
additions
|
(35,743)
|
|
|
(11,731)
|
|
Asset
acquisitions
|
(5,624)
|
|
|
(10,272)
|
|
Proceeds from property
sales
|
3,680
|
|
|
2,038
|
|
Proceeds from
dissolution of AREC
|
998
|
|
|
—
|
|
Insurance and state
collateral (deposits) refunds
|
652
|
|
|
830
|
|
Net cash used in
investing activities
|
(36,037)
|
|
|
(19,135)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Principal repayments of
finance lease obligations
|
(1,697)
|
|
|
(495)
|
|
Dividends paid on
common stock
|
(3,976)
|
|
|
(3,711)
|
|
Net cash used in
financing activities
|
(5,673)
|
|
|
(4,206)
|
|
|
|
|
|
Increase in cash
and cash equivalents, including restricted cash
|
5,189
|
|
|
7,673
|
|
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
|
$
|
122,255
|
|
|
$
|
117,066
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS
|
(In thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Cash Flow to Net (Losses)
Earnings:
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,653
|
|
|
$
|
(3,848)
|
|
|
$
|
8,207
|
|
|
$
|
2,945
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
643
|
|
|
(1,738)
|
|
|
2,296
|
|
|
509
|
|
Depreciation and
amortization
|
4,375
|
|
|
3,640
|
|
|
16,641
|
|
|
10,654
|
|
Gains on sales of
property
|
(14)
|
|
|
(350)
|
|
|
(1,400)
|
|
|
(1,240)
|
|
Gain on dissolution of
AREC
|
—
|
|
|
—
|
|
|
(573)
|
|
|
—
|
|
Stock-based
compensation expense
|
126
|
|
|
111
|
|
|
478
|
|
|
255
|
|
Inventory liquidation
gains
|
(2,290)
|
|
|
—
|
|
|
(3,749)
|
|
|
—
|
|
Inventory valuation
losses
|
—
|
|
|
7,898
|
|
|
—
|
|
|
5,363
|
|
Net change in fair
value contracts
|
3
|
|
|
(7)
|
|
|
23
|
|
|
(2)
|
|
Insurance proceeds for
Hurricane Harvey claims
|
—
|
|
|
—
|
|
|
—
|
|
|
(610)
|
|
Adjusted cash
flow
|
$
|
5,496
|
|
|
$
|
5,706
|
|
|
$
|
21,923
|
|
|
$
|
17,874
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted net
earnings and earnings
|
|
|
|
|
|
|
|
per common share
(Non-GAAP):
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,653
|
|
|
$
|
(3,848)
|
|
|
$
|
8,207
|
|
|
$
|
2,945
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Gain on dissolution of
AREC
|
—
|
|
|
—
|
|
|
(573)
|
|
|
—
|
|
Gains on sales of
property
|
(14)
|
|
|
(350)
|
|
|
(1,400)
|
|
|
(1,240)
|
|
Stock-based
compensation expense
|
126
|
|
|
111
|
|
|
478
|
|
|
255
|
|
Net change in fair
value contracts
|
3
|
|
|
(7)
|
|
|
23
|
|
|
(2)
|
|
Inventory liquidation
gains
|
(2,290)
|
|
|
—
|
|
|
(3,749)
|
|
|
—
|
|
Inventory valuation
losses
|
—
|
|
|
7,898
|
|
|
—
|
|
|
5,363
|
|
Insurance proceeds for
Hurricane Harvey claims
|
—
|
|
|
—
|
|
|
—
|
|
|
(610)
|
|
Tax effect of
adjustments to (losses) earnings
|
457
|
|
|
(1,607)
|
|
|
1,096
|
|
|
(790)
|
|
Adjusted net
earnings
|
$
|
935
|
|
|
$
|
2,197
|
|
|
$
|
4,082
|
|
|
$
|
5,921
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
common share
|
$
|
0.22
|
|
|
$
|
0.52
|
|
|
$
|
0.96
|
|
|
$
|
1.40
|
|
ADAMS
RESOURCES & ENERGY, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Cash Flow to Net Cash Provided by Operating
Activities:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
3,757
|
|
|
$
|
1,189
|
|
|
$
|
46,899
|
|
|
$
|
31,014
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
|
643
|
|
|
(1,738)
|
|
|
2,296
|
|
|
509
|
|
Deferred income
taxes
|
|
(592)
|
|
|
(1,621)
|
|
|
(2,085)
|
|
|
(936)
|
|
Provision for doubtful
accounts
|
|
(24)
|
|
|
55
|
|
|
12
|
|
|
150
|
|
Inventory liquidation
gains
|
|
(2,290)
|
|
|
—
|
|
|
(3,749)
|
|
|
—
|
|
Inventory valuation
losses
|
|
—
|
|
|
7,898
|
|
|
—
|
|
|
5,363
|
|
Insurance proceeds for
Hurricane Harvey claims
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(610)
|
|
Changes in assets and
liabilities
|
|
4,002
|
|
|
(77)
|
|
|
(21,450)
|
|
|
(17,616)
|
|
Adjusted cash
flow
|
|
$
|
5,496
|
|
|
$
|
5,706
|
|
|
$
|
21,923
|
|
|
$
|
17,874
|
|
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SOURCE Adams Resources & Energy, Inc.