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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-Q
(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___  to  ___.

Commission file number: 1-07908

ADAMS RESOURCES & ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
74-1753147
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)

17 South Briar Hollow Lane, Suite 100
Houston, Texas 77027
(Address of Principal Executive Offices, including Zip Code)
(713) 881-3600
(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.10 Par Value AE NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☑
Smaller reporting company
☑
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

A total of 4,251,015 shares of Common Stock were outstanding at May 1, 2021.

Table of Contents


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

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1
Table of Contents


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, December 31,
2021 2020
ASSETS
Current assets:
Cash and cash equivalents $ 58,985  $ 39,293 
Restricted cash 12,377  12,772 
Accounts receivable, net of allowance for doubtful
accounts of $113 and $114, respectively
111,068  99,799 
Accounts receivable – related party 13  — 
Inventory 29,223  19,336 
Derivative assets 576  61 
Income tax receivable 11,638  13,288 
Prepayments and other current assets 3,621  2,964 
Total current assets 227,501  187,513 
Property and equipment, net 90,643  94,134 
Operating lease right-of-use assets, net 7,774  8,051 
Intangible assets, net 3,902  4,106 
Other assets 2,482  2,383 
Total assets $ 332,302  $ 296,187 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 122,155  $ 85,991 
Derivative liabilities 546  52 
Current portion of finance lease obligations 4,494  4,112 
Current portion of operating lease liabilities 2,172  2,050 
Other current liabilities 19,888  22,343 
Total current liabilities 149,255  114,548 
Other long-term liabilities:
Asset retirement obligations 2,325  2,308 
Finance lease obligations 12,202  11,507 
Operating lease liabilities 5,603  6,000 
Deferred taxes and other liabilities 11,900  12,732 
Total liabilities 181,285  147,095 
Commitments and contingencies (Note 14)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding
—  — 
Common stock – $0.10 par value, 7,500,000 shares
authorized, 4,251,015 and 4,243,716 shares outstanding, respectively
423  423 
Contributed capital 13,494  13,340 
Retained earnings 137,100  135,329 
Total shareholders’ equity 151,017  149,092 
Total liabilities and shareholders’ equity $ 332,302  $ 296,187 

See Notes to Unaudited Condensed Consolidated Financial Statements.
2
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended
March 31,
2021 2020
Revenues:
Marketing $ 304,023  $ 337,221 
Transportation 21,235  16,256 
Pipeline and storage 233  — 
Total revenues 325,491  353,477 
Costs and expenses:
Marketing 295,207  352,865 
Transportation 17,460  13,185 
Pipeline and storage 544  — 
General and administrative 3,376  2,894 
Depreciation and amortization 5,053  4,473 
Total costs and expenses 321,640  373,417 
Operating earnings (losses) 3,851  (19,940)
Other income (expense):
Interest and other income 134  365 
Interest expense (220) (150)
Total other (expense) income, net (86) 215 
Earnings (Losses) before income taxes 3,765  (19,725)
Income tax (provision) benefit (957) 8,298 
Net earnings (losses) $ 2,808  $ (11,427)
Earnings (Losses) per share:
Basic net earnings (losses) per common share $ 0.66  $ (2.70)
Diluted net earnings (losses) per common share $ 0.66  $ (2.69)
Dividends per common share $ 0.24  $ 0.24 


See Notes to Unaudited Condensed Consolidated Financial Statements.
3
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months Ended
March 31,
2021 2020
Operating activities:
Net earnings (losses) $ 2,808  $ (11,427)
Adjustments to reconcile net earnings (losses) to net cash
provided by (used in) operating activities:
Depreciation and amortization 5,053  4,473 
Gains on sales of property (83) (140)
Provision for doubtful accounts (1) (24)
Stock-based compensation expense 185  134 
Deferred income taxes (829) (2,689)
Net change in fair value contracts (21) (19)
Changes in assets and liabilities:
Accounts receivable (11,268) 41,617 
Accounts receivable/payable, affiliates (13) 1 
Inventories (9,887) 16,386 
Income tax receivable 1,650  (5,530)
Prepayments and other current assets (657) 253 
Accounts payable 36,127  (68,384)
Accrued liabilities 51  1,506 
Other (114) (3)
Net cash provided by (used in) operating activities 23,001  (23,846)
Investing activities:
Property and equipment additions (170) (2,212)
Proceeds from property sales 1,005  502 
Insurance and state collateral (deposits) refunds —  1,128 
Net cash provided by (used in) investing activities 835  (582)
Financing activities:
Principal repayments of finance lease obligations (1,014) (532)
Payment for financed portion of VEX acquisition (2,500) — 
Payment of contingent consideration liability —  (54)
Dividends paid on common stock (1,025) (1,016)
Net cash used in financing activities (4,539) (1,602)
Increase (Decrease) in cash and cash equivalents, including restricted cash 19,297  (26,030)
Cash and cash equivalents, including restricted cash, at beginning of period 52,065  122,255 
Cash and cash equivalents, including restricted cash, at end of period $ 71,362  $ 96,225 


See Notes to Unaudited Condensed Consolidated Financial Statements.

4
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)

Total
Common Contributed Retained Shareholders’
Stock Capital Earnings Equity
Balance, January 1, 2021 $ 423  $ 13,340  $ 135,329  $ 149,092 
Net earnings —  —  2,808  2,808 
Stock-based compensation expense —  185  —  185 
Cancellation of shares withheld to
cover taxes upon vesting —  (31) —  (31)
Dividends declared:
Common stock, $0.24/share
—  —  (1,019) (1,019)
Awards under LTIP, $0.24/share
—  —  (18) (18)
Balance, March 31, 2021 $ 423  $ 13,494  $ 137,100  $ 151,017 



Total
Common Contributed Retained Shareholders’
Stock Capital Earnings Equity
Balance, January 1, 2020 $ 423  $ 12,778  $ 138,440  $ 151,641 
Net losses —  —  (11,427) (11,427)
Stock-based compensation expense —  134  —  134 
Dividends declared:
Common stock, $0.24/share
—  —  (1,016) (1,016)
Awards under LTIP, $0.24/share
—  —  (6) (6)
Balance, March 31, 2020 $ 423  $ 12,912  $ 125,991  $ 139,326 


See Notes to Unaudited Condensed Consolidated Financial Statements.
5
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, transportation, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with fifteen terminals across the U.S. Unless the context requires otherwise, references to “we,” “us,” “our” or “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in three business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; and (iii) pipeline transportation, terminalling and storage of crude oil. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three months ended March 31, 2021 are not necessarily indicative of results expected for the full year of 2021. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”) filed with the SEC on March 5, 2021. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

At March 31, 2021 and December 31, 2020, $5.1 million and $5.1 million, respectively, of the restricted cash balance represented amounts held in a segregated bank account by Wells Fargo as collateral for outstanding letters of credit. At March 31, 2021 and December 31, 2020, $1.5 million and $1.5 million, respectively, of the restricted cash balance related to the initial capitalization of our captive insurance company formed in late 2020 and $5.7 million and $6.1 million, respectively, represented the amount paid to our captive insurance company for insurance premiums.

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Cash and cash equivalents $ 58,985  $ 39,293 
Restricted cash 12,377  12,772 
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows $ 71,362  $ 52,065 

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

Common
shares
Balance, January 1, 2021
4,243,716 
Vesting of restricted stock unit awards 8,544 
Shares withheld to cover taxes upon vesting of restricted stock unit awards (1,245)
Balance, March 31, 2021
4,251,015 

Earnings Per Share

Basic earnings (losses) per share is computed by dividing our net earnings (losses) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (losses) per share is computed by giving effect to all potential shares of common stock outstanding, including our stock related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (“2018 LTIP”) are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 11 for further discussion).


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the calculation of basic and diluted earnings (losses) per share was as follows for the periods indicated (in thousands, except per share data):

Three Months Ended
March 31,
2021 2020
Earnings (losses) per share — numerator:
Net earnings (losses) $ 2,808  $ (11,427)
Denominator:
Basic weighted average number of shares outstanding 4,246  4,236 
Basic earnings (losses) per share $ 0.66  $ (2.70)
Diluted earnings (losses) per share:
Diluted weighted average number of shares outstanding:
Common shares 4,246  4,236 
Restricted stock unit awards 18  12 
Performance share unit awards (1)
7  2 
Total diluted shares 4,271  4,250 
Diluted earnings (losses) per share $ 0.66  $ (2.69)
_______________
(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 10 for further information).


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.

We have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us for the fiscal years 2018 and 2019. We carried back our NOL for fiscal year 2018 to 2013, and in June 2020, we received a cash refund of approximately $2.7 million. We have income tax receivables at March 31, 2021 of approximately $3.7 million for the benefit of carrying back the NOL for the fiscal year 2019 to 2014 and approximately $6.8 million for the benefit of carrying back the NOL for the fiscal year 2020 to 2015 and 2016. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage expenses on our consolidated statements of operations. During the three months ended March 31, 2020, we recorded a charge of $24.2 million related to the write-down of our crude oil inventory in our crude oil marketing segment due to declines in prices.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 11 for additional information regarding our 2018 LTIP.


Note 3. Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):
Reporting Segments
Marketing Transportation Pipeline and storage Total
Three Months Ended March 31, 2021
Revenues from contracts with customers $ 297,475  $ 21,235  $ 233  $ 318,943 
Other (1)
6,548  —  —  6,548 
Total revenues $ 304,023  $ 21,235  $ 233  $ 325,491 
Timing of revenue recognition:
Goods transferred at a point in time $ 297,475  $ —  $ —  $ 297,475 
Services transferred over time —  21,235  233  21,468 
Total revenues from contracts with customers $ 297,475  $ 21,235  $ 233  $ 318,943 
Three Months Ended March 31, 2020
Revenues from contracts with customers $ 319,717  $ 16,256  $ —  $ 335,973 
Other (1)
17,504  —  —  17,504 
Total revenues $ 337,221  $ 16,256  $ —  $ 353,477 
Timing of revenue recognition:
Goods transferred at a point in time $ 319,717  $ —  $ —  $ 319,717 
Services transferred over time —  16,256  —  16,256 
Total revenues from contracts with customers $ 319,717  $ 16,256  $ —  $ 335,973 
_______________
(1)Other crude oil marketing revenues are recognized under ASC 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Revenue gross-up $ 134,866  $ 157,439 



Note 4. Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):
March 31, December 31,
2021 2020
Insurance premiums $ 793  $ 690 
Vendor prepayment 1,690  1,085 
Rents, licenses and other 1,138  1,189 
Total prepayments and other current assets $ 3,621  $ 2,964 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):
Estimated
Useful Life March 31, December 31,
in Years 2021 2020
Tractors and trailers
5 – 6
$ 101,535  $ 101,813 
Field equipment
2 – 5
22,318  22,139 
Finance lease ROU assets (1)
3 – 6
22,357  20,266 
Pipeline and related facilities
20 – 25
21,275  21,265 
Linefill and base gas (2)
N/A 3,333  3,333 
Buildings
5 – 39
14,977  14,977 
Office equipment
2 – 5
1,905  1,893 
Land N/A 1,790  1,790 
Construction in progress N/A 716  1,626 
Total 190,206  189,102 
Less accumulated depreciation and amortization (99,563) (94,968)
Property and equipment, net $ 90,643  $ 94,134 
_______________
(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers, a tank storage and throughput arrangement and office equipment (see Note 13 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $6.2 million and $5.0 million at March 31, 2021 and December 31, 2020, respectively.
(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Depreciation and amortization, excluding amounts under finance leases $ 3,913  $ 3,920 
Amortization of property and equipment under finance leases 1,140  553 
Total depreciation and amortization $ 5,053  $ 4,473 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Other Assets

Components of other assets were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Amounts associated with liability insurance program:
Insurance collateral deposits $ 714  $ 714 
Excess loss fund 617  617 
Accumulated interest income 459  449 
Other amounts:
State collateral deposits 42  31 
Materials and supplies 460  488 
Other 190  84 
Total other assets $ 2,482  $ 2,383 

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the maximum assessment under our insurance policies. Insurance collateral deposits are invested at the discretion of our insurance carrier. Excess amounts in our loss fund represent premium payments in excess of claims incurred to date that we may be entitled to recover through settlement or commutation as claim periods are closed. Interest income is earned on the majority of amounts held by the insurance companies and will be paid to us upon settlement of policy years.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Segment Reporting

We operate and report in three business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; and (iii) pipeline transportation, terminalling and storage of crude oil.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

Reporting Segments
Marketing Transportation Pipeline and storage Other Total
Three Months Ended March 31, 2021
Segment revenues (1)
$ 304,023  $ 21,268  $ 419  $ —  $ 325,710 
Less: Intersegment revenues (1)
—  (33) (186) —  (219)
Revenues $ 304,023  $ 21,235  $ 233  $ —  $ 325,491 
Segment operating earnings (losses) (2)
7,018  774  (565) —  7,227 
Depreciation and amortization 1,798  3,001  254  —  5,053 
Property and equipment additions (3)(4)(5)
210  (58) 10  8  170 
Three Months Ended March 31, 2020
Segment revenues $ 337,221  $ 16,256  $ —  $ —  $ 353,477 
Less: Intersegment revenues —  —  —  —  — 
Revenues $ 337,221  $ 16,256  $ —  $ —  $ 353,477 
Segment operating earnings (losses) (2)
(17,651) 605  —  —  (17,046)
Depreciation and amortization 2,007  2,466  —  —  4,473 
Property and equipment additions (3) (4)
2,032  41  —  139  2,212 
_______________
(1)Segment revenues include intersegment amounts that are eliminated in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.
(2)Our crude oil marketing segment’s operating (losses) earnings included inventory liquidation gains of $6.9 million and inventory valuation losses of $24.2 million for the three months ended March 31, 2021 and 2020, respectively.
(3)Our segment property and equipment additions do not include assets acquired under finance leases during the three months ended March 31, 2021. See Note 13 for further information.
(4)During the three months ended March 31, 2021 and 2020, we had $8.0 thousand and $0.1 million, respectively, of property and equipment additions for computer equipment and leasehold improvements at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.
(5)During the three months ended March 31, 2021, we received a refund of approximately $0.3 million for amounts previously spent in our transportation segment, which has been reflected as a reduction in property and equipment additions.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Segment operating earnings (losses) reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to earnings (losses) before income taxes, as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Segment operating earnings (losses) $ 7,227  $ (17,046)
General and administrative (3,376) (2,894)
Operating earnings (losses) 3,851  (19,940)
Interest and other income 134  365 
Interest expense (220) (150)
Earnings (losses) before income taxes $ 3,765  $ (19,725)

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Reporting segment:
Marketing $ 153,723  $ 128,441 
Transportation 65,572  72,247 
Pipeline and storage 24,290  24,541 
Cash and other (1)
88,717  70,958 
Total assets $ 332,302  $ 296,187 
_______________
(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.


Note 8. Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities including direct cost reimbursement for shared phone and administrative services. In addition, we lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA Industries, Inc., which is an affiliated entity.

Activities with affiliates were as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Affiliate billings to us $ 12  $ 17 
Billings to affiliates 1  1 
Rentals paid to affiliate 174  122 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Other Current Liabilities

The components of other current liabilities were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Accrued purchase price for VEX acquisition $ 7,500  $ 10,000 
Accrual for payroll, benefits and bonuses 5,865  6,575 
Accrued automobile and workers’ compensation claims 3,913  3,171 
Accrued medical claims 1,033  915 
Other 1,577  1,682 
Total other current liabilities $ 19,888  $ 22,343 


Note 10. Derivative Instruments and Fair Value Measurements

Derivative Instruments

In the normal course of our operations, our crude oil marketing segment purchases and sells crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, these transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for these contracts at fair value, unless the normal purchase and sale exception is applicable. These types of underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments.

At March 31, 2021, we had in place seven commodity purchase and sale contracts, of which five had a fair value associated with them as the contractual prices of crude oil were outside of the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately 740 barrels per day of crude oil during April 2021 through December 2021.
At December 31, 2020, we had in place six commodity purchase and sale contracts, of which three had a fair value associated with them as the contractual prices of crude oil were outside the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately 192 barrels per day of crude oil during January 2021 through December 2021.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheets were as follows at the dates indicated (in thousands):
Balance Sheet Location and Amount
Current Other Current Other
Assets Assets Liabilities Liabilities
March 31, 2021
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation $ 576  $ —  $ —  $ — 
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation —  —  546  — 
Less counterparty offsets —  —  —  — 
As reported fair value contracts $ 576  $ —  $ 546  $ — 
December 31, 2020
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation $ 61  $ —  $ —  $ — 
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation —  —  52  — 
Less counterparty offsets —  —  —  — 
As reported fair value contracts $ 61  $ —  $ 52  $ — 

We only enter into commodity contracts with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At March 31, 2021 and December 31, 2020, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

Gains (losses)
Three Months Ended
March 31,
2021 2020
Revenues – marketing $ 20  $ 19 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurements

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

Fair Value Measurements Using
Quoted Prices
in Active Significant
Markets for Other Significant
Identical Assets Observable Unobservable
and Liabilities Inputs Inputs Counterparty
(Level 1) (Level 2) (Level 3) Offsets Total
March 31, 2021
Derivatives:
Current assets $ —  $ 576  $ —  $ —  $ 576 
Current liabilities —  (546) —  —  (546)
Net value $ —  $ 30  $ —  $ —  $ 30 
December 31, 2020
Derivatives:
Current assets $ —  $ 61  $ —  $ —  $ 61 
Current liabilities —  (52) —  —  (52)
Net value $ —  $ 9  $ —  $ —  $ 9 

These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of these inputs requires judgments.

When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by us or our counterparties. At March 31, 2021 and December 31, 2020, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11. Stock-Based Compensation Plan

We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. The maximum number of shares authorized for issuance under the 2018 LTIP is 150,000 shares, and the 2018 LTIP is effective until May 8, 2028. After giving effect to awards granted and forfeitures made under the 2018 LTIP, the achievement of performance factors through December 31, 2020, and assuming the potential achievement of the maximum amounts of the performance factors through March 31, 2021, a total of 37,761 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Compensation expense $ 185  $ 134 

At March 31, 2021 and December 31, 2020, we had $62,900 and $50,800, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:
Weighted-
Average Grant
Number of Date Fair Value
Shares
per Share (1)
Restricted stock unit awards at January 1, 2021
27,490  $ 28.64 
Granted (2)
26,369  $ 29.70 
Vested (8,544) $ 24.83 
Forfeited —  $ — 
Restricted stock unit awards at March 31, 2021
45,315  $ 29.97 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of restricted stock unit awards issued during 2021 was $0.8 million based on a grant date market price of our common shares ranging from $29.70 to $30.00 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.9 million at March 31, 2021. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:
Weighted-
Average Grant
Number of Date Fair Value
Shares
per Share (1)
Performance share unit awards at January 1, 2021
16,241  $ 27.67 
Granted (2)
12,205  $ 29.70 
Vested —  $ — 
Forfeited —  $ — 
Performance share unit awards at March 31, 2021
28,446  $ 28.54 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of performance share unit awards issued during 2021 was $0.4 million based on a grant date market price of our common shares of $29.70 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.6 million at March 31, 2021. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.5 years.


Note 12. Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Cash paid for interest $ 220  $ 150 
Cash paid for federal and state income taxes 2  21 
Non-cash transactions:
Change in accounts payable related to property and equipment additions (44) 1,129 
Property and equipment acquired under finance leases 2,091  — 

See Note 13 for information related to other non-cash transactions related to leases.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13. Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Finance lease cost:
Amortization of ROU assets $ 1,140  $ 553 
Interest on lease liabilities 110  74 
Operating lease cost 623  679 
Short-term lease cost 3,212  2,503 
Variable lease cost 1  — 
Total lease expense $ 5,086  $ 3,809 

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)
$ 622  $ 678 
Operating cash flows from finance leases 109  105 
Financing cash flows from finance leases 1,014  532 
ROU assets obtained in exchange for new lease liabilities:
Finance leases 2,091  — 
Operating leases 264  81 
______________
(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

Three Months Ended
March 31,
2021 2020
Weighted-average remaining lease term (years):
Finance leases 4.10 2.78
Operating leases 4.32 4.58
Weighted-average discount rate:
Finance leases 2.8% 4.9%
Operating leases 4.2% 5.0%


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Assets
Finance lease ROU assets (1)
$ 16,202  $ 15,251 
Operating lease ROU assets 7,774  8,051 
Liabilities
Current
Finance lease liabilities 4,494  4,112 
Operating lease liabilities 2,172  2,050 
Noncurrent
Finance lease liabilities 12,202  11,507 
Operating lease liabilities 5,603  6,000 
______________
(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at March 31, 2021 (in thousands):

Finance Operating
Lease Lease
Remainder of 2021 $ 3,657  $ 1,845 
2022 3,942  2,128 
2023 3,145  1,839 
2024 2,350  1,702 
2025 3,773  222 
Thereafter 802  674 
Total lease payments 17,669  8,410 
Less: Interest (973) (635)
Present value of lease liabilities 16,696  7,775 
Less: Current portion of lease obligation (4,494) (2,172)
Total long-term lease obligation $ 12,202  $ 5,603 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table provides maturities of undiscounted lease liabilities at December 31, 2020 (in thousands):
Finance Operating
Lease Lease
2021 $ 4,496  $ 2,343 
2022 3,562  2,002 
2023 2,764  1,821 
2024 1,969  1,700 
2025 2,992  222 
Thereafter 802  675 
Total lease payments 16,585  8,763 
Less: Interest (966) (713)
Present value of lease liabilities 15,619  8,050 
Less: Current portion of lease obligation (4,112) (2,050)
Total long-term lease obligation $ 11,507  $ 6,000 


Note 14. Commitments and Contingencies

Insurance

We have accrued liabilities for estimated workers’ compensation and other casualty claims incurred based upon claim reserves plus an estimate for loss development and incurred but not reported claims. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability, with a self-insured retention of $1.0 million. Insurance is purchased over our retention to reduce our exposure to catastrophic events. We also share 20 percent of the risk of loss, capped at $1.0 million for any claims in excess of $5.0 million. Estimates are recorded for potential and incurred outstanding liabilities for workers’ compensation, auto and general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historical experience and statistical methods commonly used within the insurance industry that we believe are reliable. We have also engaged a third-party actuary to perform a review of our accrued liability for these claims as well as potential funded losses in our captive insurance company. Insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices and the selection of estimated loss among estimates derived using different methods. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

On October 1, 2020, we elected to utilize a wholly owned insurance captive to insure the self-insured retention for our workers’ compensation, general liability and automobile liability insurance programs. All accrued liabilities associated with periods from October 1, 2017 through current were transferred to the captive.

We maintain excess property and casualty reinsurance programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs. Our operating subsidiaries pay premiums to both the excess and reinsurance carriers and our captive for the estimated losses based on an external actuarial analysis. These premiums held by our wholly owned captive are currently held in a restricted account, resulting in a transfer of risk from our operating subsidiaries to the captive.

We also maintain a self-insurance program for managing employee medical claims in excess of employee deductibles. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.4 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $7.5 million.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Pre-funded premiums for losses incurred but not reported $ 55  $ 55 
Accrued automobile and workers’ compensation claims 3,913  3,171 
Accrued medical claims 1,033  915 

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position, results of operations or cash flows.


Note 15. Subsequent Event

On May 4, 2021, we entered into a Credit Agreement (“Credit Agreement”) with Wells Fargo Bank, National Association, as Agent and Issuing Lender, under which we may borrow an aggregate of up to $40.0 million under a revolving credit facility (the “Revolving Credit Facility”), which will mature on May 4, 2024, subject to our compliance with certain financial covenants.

For each borrowing under the Revolving Credit Facility, we can elect whether the loans bear interest at (i) the Base Rate plus Applicable Margin; or (ii) the LIBOR Rate plus Applicable Margin. Base Rate is the highest of (a) the Prime Rate, (b) the Federal Funds Rate, plus 0.50% and (c) LIBOR for an interest period of three months plus 1.00%. The Applicable Margin to be added to a Base Rate borrowing is 0.75%. The LIBOR Rate is (x) LIBOR (which shall not be less than 1.00%) divided by (y) 1.00 minus the Eurodollar Reserve Percentage. The Applicable Margin to be added to a LIBOR borrowing is 1.75%. A commitment fee of 0.25% per annum will accrue on the daily average unused amount of the commitments under the Revolving Credit Facility.

Under the Credit Agreement, we are required to maintain compliance with certain financial covenants, as described in the Credit Agreement, commencing with the quarter ending June 30, 2021. Our obligations under the Credit Agreement are secured by a pledge of substantially all of our personal property and substantially all of the personal property of certain of our other direct and indirect subsidiaries.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and accompanying Notes included in this quarterly report on Form 10-Q and the Audited Consolidated Financial Statements and related Notes, together with our discussion and analysis of financial position and results of operations, included in our annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), as filed on March 5, 2021 with the U.S. Securities and Exchange Commission (“SEC”).  Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).


Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and information that are based on our beliefs, as well as assumptions made by us and information currently available to us. When used in this document, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “would,” “will,” “believe,” “may,” “potential” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements. Although we believe that our expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that such expectations will prove to be correct.  Forward-looking statements are subject to a variety of risks, uncertainties and assumptions as described in more detail under Part I, Item 1A of our 2020 Form 10-K.  If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected.  You should not put undue reliance on any forward-looking statements.  The forward-looking statements in this quarterly report speak only as of the date hereof.  Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.


Overview of Business

Adams Resources & Energy, Inc., a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in crude oil marketing, transportation, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with fifteen terminals across the U.S. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in three business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; and (iii) pipeline transportation, terminalling and storage of crude oil. See Note 7 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our business segments.



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Recent Developments and Outlook

COVID-19 Update

The global COVID-19 outbreak, associated countermeasures implemented by governments around the world, as well as increased business uncertainty, changes in consumer behavior related to the slowdown of the economy and the disruption of historical supply and demand patterns during 2020 resulted in a decline in our crude oil marketing operations and significantly decreased demand for our transportation services through global shutdowns and supply chain and operational disruptions at times during 2020. We took a variety of actions in 2020 to help mitigate the financial impact, including executing temporary cost saving measures and reducing our capital spending. As economic conditions improve, we are beginning to resume normal capital spending activities, but may implement additional cost saving measures in the future, if needed.

Our primary focus continues to be the safety of our employees and operations while providing uninterrupted service to our customers. We will continue to maintain the safety protocols we established, including encouraging our employees to seek vaccination when eligible. We are actively monitoring the global situation and its effect on our financial condition, liquidity, operations, customers, industry and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we cannot estimate the length or gravity of the impacts of these events at this time. While we consider the overall effects of the pandemic to be temporary, if the pandemic and its economic effects continue, it may have a material adverse effect on our results of future operations, financial position and liquidity in 2021.

We plan to continue to operate our remaining business segments with internally generated cash flows during the remainder of 2021, but intend to remain flexible as the focus will be on increasing efficiencies and on business development opportunities. During the remainder of 2021, we plan to integrate our newly acquired terminals and leverage back haul opportunities with the continued efforts to diversify service offerings, and we plan to grow in new or existing areas with our crude oil marketing segment.

Credit Agreement

On May 4, 2021, we entered into a Credit Agreement (“Credit Agreement”) with Wells Fargo Bank, National Association, as Agent and Issuing Lender, under which we may borrow an aggregate of up to $40.0 million under a revolving credit facility (the “Revolving Credit Facility”), which will mature on May 4, 2024, subject to our compliance with certain financial covenants. See Note 15 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information.


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Results of Operations

Crude Oil Marketing

Our crude oil marketing segment revenues, operating earnings (losses) and selected costs were as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Change (1)
Revenues $ 304,023  $ 337,221  (10  %)
Operating earnings (losses) (2)
7,018  (17,651) (140  %)
Depreciation and amortization 1,798  2,007  (10  %)
Driver compensation 4,390  5,293  (17  %)
Insurance 1,977  2,474  (20  %)
Fuel 1,741  2,034  (14  %)
_______________
(1)Represents the percentage increase (decrease) from the prior year period.
(2)Operating earnings (losses) included inventory liquidation gains of $6.9 million and inventory valuation losses of $24.2 million for the three months ended March 31, 2021 and 2020, respectively.

Volume and price information were as follows for the periods indicated:

Three Months Ended
March 31,
2021 2020
Field level purchase volumes – per day (1)
Crude oil – barrels 82,889  109,253 
Average purchase price
Crude oil – per barrel $ 54.91  $ 44.87 
_______________
(1)Reflects the volume purchased from third parties at the field level of operations.

Crude oil marketing revenues decreased by $33.2 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, primarily as a result of lower overall crude oil volumes, which decreased revenues by approximately $101.2 million, partially offset by an increase in the market price of crude oil, which increased revenues by approximately $68.0 million. The average crude oil price received was $44.87 during the three months ended March 31, 2020, which increased to $54.91 during the three months ended March 31, 2021. The 2020 period was impacted by a lower market price of crude oil due to the effects of the COVID-19 outbreak and the delay of OPEC to agree on crude oil production levels, both of which resulted in market disruptions that decreased the demand for and price of crude oil during the three months ended March 31, 2020. The 2021 period was impacted by increased demand for crude oil, but with less supply as production has not yet increased to previous levels, thus increasing the market price of crude oil. Volumes decreased during the 2021 period as compared to the prior year period as a result of increased competition for supply from shippers and marketers to fill obligations to pipelines with the lower crude oil production available.


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Our crude oil marketing operating earnings increased by $24.7 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to inventory valuation changes (as shown in the table below) and lower insurance, fuel and driver compensation costs and higher crude oil prices, partially offset by lower crude oil volumes.

Driver compensation decreased by $0.9 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily as a result of a decrease in the number of drivers required for volumes transported in the 2021 period as compared to the 2020 period.

Insurance costs decreased by $0.5 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to a lower driver count and lower miles driven in the 2021 period. Fuel costs decreased by $0.3 million during the three months ended March 31, 2021 as compared to the same period in 2020, consistent with a lower driver count and lower miles driven in the current period.

Depreciation and amortization expense decreased by $0.2 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2020 and 2021.

Field Level Operating Earnings (Non-GAAP Financial Measure). Inventory valuations and forward commodity contract (derivatives or mark-to-market) valuations are two significant factors affecting comparative crude oil marketing segment operating earnings (losses). As a purchaser and shipper of crude oil, we hold inventory in storage tanks and third-party pipelines. During periods of increasing crude oil prices, we recognize inventory liquidation gains while during periods of falling prices, we recognize inventory liquidation and valuation losses.

Crude oil marketing operating earnings (losses) can be affected by the valuations of our forward month commodity contracts (derivative instruments). These non-cash valuations are calculated and recorded at each period end based on the underlying data existing as of such date. We generally enter into these derivative contracts as part of a pricing strategy based on crude oil purchases at the wellhead (field level). The valuation of derivative instruments at period end requires the recognition of non-cash “mark-to-market” gains and losses.

The impact of inventory liquidations and valuations and derivative valuations on our crude oil marketing segment operating earnings (losses) is summarized in the following reconciliation of our non-GAAP financial measure for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
As reported segment operating earnings (losses) (1)
$ 7,018  $ (17,651)
Add (subtract):
Inventory liquidation gains (6,943) — 
Inventory valuation losses —  24,215 
Derivative valuation (gains) losses (20) (19)
Field level operating earnings (2)
$ 55  $ 6,545 
_______________
(1)Our crude oil marketing segment’s operating earnings (losses) included inventory liquidation gains of $6.9 million and inventory valuation losses of $24.2 million for the three months ended March 31, 2021 and 2020, respectively.
(2)The use of field level operating earnings is unique to us, not a substitute for a GAAP measure and may not be comparable to any similar measures developed by industry participants. We utilize this data to evaluate the profitability of our operations.


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Field level operating earnings and field level purchase volumes depict our day-to-day operation of acquiring crude oil at the wellhead, transporting the product and delivering the product to market sales point. Field level operating earnings decreased during the three months ended March 31, 2021 as compared to the same period in 2020 primarily due to lower revenues resulting from lower crude oil volumes, partially offset by lower insurance, fuel and driver compensation costs.

We held crude oil inventory at a weighted average composite price as follows at the dates indicated (in barrels):

March 31, 2021 December 31, 2020
Average Average
Barrels Price Barrels Price
Crude oil inventory 469,226  $ 62.20  421,759  $ 45.83 

Prices received for crude oil have been volatile and unpredictable with price volatility expected to continue. See “Part I, Item 1A. Risk Factors” in our 2020 Form 10-K.

Transportation

Our transportation segment revenues, operating earnings and selected costs were as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Change (1)
Revenues $ 21,235  $ 16,256  31  %
Operating earnings $ 774  $ 605  28  %
Depreciation and amortization $ 3,001  $ 2,466  22  %
Driver commissions $ 3,596  $ 2,607  38  %
Insurance $ 2,148  $ 1,524  41  %
Fuel $ 1,875  $ 1,281  46  %
Maintenance expense $ 913  $ 831  10  %
Mileage (000s) 6,932  5,240  32  %
_______________
(1)Represents the percentage increase (decrease) from the prior year period.

Our revenue rate structure includes a component for fuel costs in which fuel cost fluctuations are largely passed through to the customer. Revenues, net of fuel cost, were as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Total transportation revenue $ 21,235  $ 16,256 
Diesel fuel cost (1,875) (1,281)
Revenues, net of fuel cost (1)
$ 19,360  $ 14,975 
_______________
(1) Revenues, net of fuel cost, is a non-GAAP financial measure and is utilized for internal analysis of the results of our transportation segment.

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Transportation revenues increased by $5.0 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. Transportation revenues, net of fuel cost, increased by $4.4 million during the three months ended March 31, 2021, as compared to the prior year period. These increases were primarily due to increased revenues resulting from the acquisition of substantially all of the transportation assets of CTL Transportation, LLC, a subsidiary of Comcar Industries, Inc. (the “CTL acquisition”) in June 2020 and increased transportation rates, partially offset by a decrease in business activities of our customers as a result of the continuing effects of the COVID-19 outbreak and the effects of extreme weather conditions in February 2021. On June 26, 2020, we completed the CTL acquisition, which added new customers, new market areas and new product lines to our portfolio. As a result of the CTL acquisition, we added services to new and existing customers in six new market areas, including new terminals in Louisiana, Missouri, Ohio, Georgia and Florida. We also hired approximately 140 additional drivers in connection with this acquisition. We have also been working with our customers to increase our transportation rates, which has resulted in an increase in revenues as compared to the prior year period.

The adverse economic effects of the COVID-19 outbreak, including the continued restrictions in place by governments, changes in consumer behavior related to the slowdown of the economy and the disruption of historical supply and demand patterns, decreased demand for our transportation services during early to mid-2020. However, during the second half of 2020, demand for transportation of chemicals and personal care products, along with automotive plants coming back online and strong home building product lines, resulted in an increase in our transportation operations, which continued into the first quarter of 2021. In February 2021, a severe winter storm and resulting power outages affected Texas, which resulted in a significant decline in transportation services for over a week and a temporary loss of revenues. When production and customer facilities resumed normal operating conditions, demand for truck transportation increased to even higher levels as a result of the disruption of the supply chain normally serviced by rail capacity shifting to truck transportation in an effort to get products to the end users in a more timely manner.

Our transportation operating earnings increased by $0.2 million for the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to higher revenues resulting from increased miles traveled primarily as a result of the CTL acquisition, partially offset by higher depreciation and amortization expense related to new assets placed into service and higher insurance, fuel costs, maintenance expense and other operating expenses.

Fuel costs increased by $0.6 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, primarily as a result of the CTL acquisition, which increased the number of miles traveled during the 2021 period. Insurance costs increased by $0.6 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to the CTL acquisition which resulted in a higher driver count and increased miles driven in the 2021 period. Depreciation and amortization expense increased by $0.5 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily as a result of the CTL asset acquisition in June 2020 and the purchase and lease of new tractors and trailers in 2020.


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Pipeline and Storage

Our pipeline and storage segment revenues, operating losses and selected costs were as follows for the period indicated (in thousands):
Three Months
Ended
March 31,
2021
Segment revenues (1)
$ 419 
Less: Intersegment revenues (1)
(186)
Revenues $ 233 
Operating losses (565)
Depreciation and amortization 254 
Insurance 210 
_______________
(1)Segment revenues represent revenues from the crude oil marketing segment, which are eliminated in our unaudited condensed consolidated statements of operations.

We are continuing to focus on opportunities to increase our pipeline and storage capacity utilization, by identifying opportunities with our existing and new customers to increase volumes. In addition, we are exploring new connections for the pipeline system both upstream and downstream of the pipeline, to increase the crude oil supply and take-away capability of the system.

General and Administrative Expense

General and administrative expense increased by $0.5 million during the three months ended March 31, 2021 as compared to the same period in 2020, primarily due to higher salaries and wages, outside service costs, insurance costs and office rental costs.

Income Taxes

Provision for (benefit from) income taxes is based upon federal and state tax rates, and variations in amounts are consistent with taxable income (loss) in the respective accounting periods.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.

We have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us for the fiscal years 2018 and 2019. We carried back our NOL for fiscal year 2018 to 2013, and in June 2020, we received a cash refund of approximately $2.7 million. We have income tax receivables at March 31, 2021 of approximately $3.7 million for the benefit of carrying back the NOL for the fiscal year 2019 to 2014 and approximately $6.8 million for the benefit of carrying back the NOL for the fiscal year 2020 to 2015 and 2016. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.


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Liquidity and Capital Resources

Liquidity

Our liquidity is from our cash balance and net cash provided by operating activities and is therefore dependent on the success of future operations. If our cash inflow subsides or turns negative, we will evaluate our investment plan accordingly and remain flexible.

At March 31, 2021 and December 31, 2020, we had no bank debt or other forms of debenture obligations. On May 4, 2021, we entered into a Credit Agreement (“Credit Agreement”) with Wells Fargo Bank, National Association, as Agent and Issuing Lender, under which we may borrow an aggregate of up to $40.0 million under a revolving credit facility (the “Revolving Credit Facility”), which will mature on May 4, 2024, subject to our compliance with certain financial covenants. See Note 15 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

We maintain cash balances in order to meet the timing of day-to-day cash needs. Cash and cash equivalents (excluding restricted cash) and working capital, the excess of current assets over current liabilities, were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Cash and cash equivalents $ 58,985  $ 39,293 
Working capital 78,246  72,965 

Our cash balance at March 31, 2021 increased by 50 percent from December 31, 2020, as discussed further below. We believe current cash balances, together with expected cash generated from future operations, and the ease of financing truck and trailer additions through leasing arrangements (should the need arise) will be sufficient to meet our short-term and long-term liquidity needs. In March 2021, we made a cash payment of $2.5 million, representing the first of four quarterly installments, plus interest of 4.0 percent per annum, of the remaining $10.0 million purchase price for the VEX acquisition. As a result of the continued uncertainty relating to the economic environment resulting from the COVID-19 pandemic, we have also continued to significantly curtail our capital spending.

On December 23, 2020, we entered into an At Market Issuance Sales Agreement (“ATM Agreement”) with B. Riley Securities, Inc., as agent (the “Agent”). Pursuant to the ATM Agreement, we may offer to sell shares of our common stock through or to the Agent for cash from time to time. We filed a registration statement initially registering an aggregate of $20.0 million of shares of common stock for sale under the ATM Agreement. The total number of shares of common stock to be sold, if any, and the price the shares will be sold at will be determined by us periodically in connection with any such sales, though the total amount sold may not exceed the limitations stated in the registration statement. We did not sell any shares of common stock under the ATM Agreement during the first quarter of 2021.

We utilize cash from operations to make discretionary investments in our crude oil marketing, transportation and pipeline and storage businesses. With the exception of operating and finance lease commitments primarily associated with storage tank terminal arrangements, leased office space, tractors, trailers and other equipment, and payment of our remaining purchase price for the VEX Pipeline System, our future commitments and planned investments can be readily curtailed if operating cash flows decrease. See “Other Items” below for information regarding our operating and finance lease obligations.

The most significant item affecting future increases or decreases in liquidity is earnings from operations, and these earnings are dependent on the success of future operations. See “Part I, Item 1A. Risk Factors” in our 2020 Form 10-K.
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Cash Flows from Operating, Investing and Financing Activities

Our consolidated cash flows from operating, investing and financing activities were as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
2021 2020
Cash provided by (used in):
Operating activities $ 23,001  $ (23,846)
Investing activities 835  (582)
Financing activities (4,539) (1,602)

Operating activities. Net cash flows provided by operating activities was $23.0 million for the three months ended March 31, 2021 as compared to net cash flows used in operating activities of $23.8 million for the three months ended March 31, 2020. The increase in net cash flows from operating activities of $46.8 million was primarily due to higher earnings in the current period and changes in our working capital accounts.

At various times each month, we may make cash prepayments and/or early payments in advance of the normal due date to certain suppliers of crude oil within our crude oil marketing operations. Crude oil supply prepayments are recouped and advanced from month to month as the suppliers deliver product to us. In addition, in order to secure crude oil supply, we may also “early pay” our suppliers in advance of the normal payment due date of the twentieth of the month following the month of production. These “early payments” reduce cash and accounts payable as of the balance sheet date.

We also require certain customers to make similar early payments or to post cash collateral with us in order to support their purchases from us. Early payments and cash collateral received from customers increases cash and reduces accounts receivable as of the balance sheet date.

Early payments received from customers and prepayments to suppliers were as follows at the dates indicated (in thousands):

March 31, December 31,
2021 2020
Early payments received $ 20,095  $ 939 
Prepayments to suppliers 7,358  1,085 

We rely heavily on our ability to obtain open-line trade credit from our suppliers especially with respect to our crude oil marketing operations. During December 2020, we received a small amount of early payments from certain customers in our crude oil marketing operations, while during March 2021, we received an increase in early payments from customers. Our cash balance increased by approximately $19.7 million as of March 31, 2021 relative to the year ended December 31, 2020 primarily as a result of the timing of the receipt of these early payments received during each period resulting from an increase in crude oil marketing activities, partially offset by early payments made to our suppliers.

Investing activities. Net cash flows provided by investing activities was $0.8 million for the three months ended March 31, 2021 as compared to net cash flows used in investing activities of $0.6 million for the three months ended March 31, 2020. This increase in net cash flows from investing activities of $1.4 million was primarily due to a decrease of $2.0 million in capital spending for property and equipment (see following table) and an increase of $0.5 million in cash proceeds from the sales of assets, partially offset by a decrease of $1.1 million in insurance and state collateral refunds.

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Capital spending was as follows for the periods indicated (in thousands):

Three Months Ended
March 31,
2021 2020
Crude oil marketing (1)
$ 210  $ 2,032 
Transportation (2)
(58) 41 
Pipeline and storage 10  — 
Other (3)
8  139 
Capital spending $ 170  $ 2,212 
_______________
(1)2021 amount primarily relates to the purchase of other field equipment. 2020 amount primarily relates to the purchase of 16 tractors and other field equipment.
(2)During the three months ended March 31, 2021, we received a refund of approximately $0.3 million for amounts previously spent in our transportation segment, which has been reflected as a reduction in property and equipment additions. The remaining 2021 amount relates to the purchase of two trailers and computer software and equipment.
(3)2021 amount relates to the purchase of computer software and equipment, and the 2020 amount relates to leasehold improvements at our corporate headquarters, both of which are not attributed to any of our reporting segments.

Financing activities. Cash used in financing activities for the three months ended March 31, 2021 increased by $2.9 million when compared to the same period in 2020. The increase was primarily due to the payment of the first $2.5 million installment related to the purchase of the VEX pipeline in October 2020, and an increase of $0.5 million in principal repayments made for finance lease obligations. See “Other Items” below for further information regarding our finance leases. During each of the three months ended March 31, 2021 and 2020, we paid a cash dividend of $0.24 per common share, or a total of $1.0 million.


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Other Items

Contractual Obligations

The following table summarizes our significant contractual obligations at March 31, 2021 (in thousands):

Payments due by period
Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years
Finance lease obligations (1)
$ 17,669  $ 4,876  $ 6,486  $ 5,580  $ 727 
Operating lease obligations (2)
8,410  2,400  3,837  1,553  620 
Payments for VEX Pipeline
System acquisition (3)
7,750  7,750  —  —  — 
Purchase obligations (4)
15,670  15,670  —  —  — 
Total contractual obligations $ 49,499  $ 30,696  $ 10,323  $ 7,133  $ 1,347 
_______________
(1)Amounts represent our principal contractual commitments, including interest, outstanding under finance leases for certain tractors, trailers, tank storage and throughput arrangements and other equipment.
(2)Amounts represent rental obligations under non-cancelable operating leases and terminal arrangements with terms in excess of one year.
(3)Amount represents our contractual obligation, including interest, related to the remaining three equal quarterly installments for the remaining purchase price for the acquisition of the VEX Pipeline System in October 2020.
(4)Amount represents commitments to purchase 31 new tractors and 50 new trailers in our transportation business and 51 new tractors in our crude oil marketing business.

See Note 13 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our finance and operating leases.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably expected to have a material current or future effect on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements    

For information regarding recent accounting pronouncements, see Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements.

Related Party Transactions

For more information regarding related party transactions, see Note 8 in the Notes to Unaudited Condensed Consolidated Financial Statements.


Critical Accounting Policies and Use of Estimates

A discussion of our critical accounting policies and estimates is included in our 2020 Form 10-K. Certain of these accounting policies require the use of estimates. There have been no material changes to our accounting policies since the disclosures provided in our 2020 Form 10-K.


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Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our “Quantitative and Qualitative Disclosures about Market Risk” that have occurred since the disclosures provided in our 2020 Form 10-K.


Item 4. Controls and Procedures

As of the end of the period covered by this quarterly report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15(e) of the Exchange Act. Based on this evaluation, as of the end of the period covered by this quarterly report, our Chief Executive Officer and our Chief Financial Officer concluded:

(i)that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow for timely decisions regarding required disclosures; and

(ii)that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e) under the Exchange Act) during the fiscal quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.


Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2020 Form 10-K and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our Risk Factors from those disclosed in Item 1A of our 2020 Form 10-K or our other SEC filings.


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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.


Item 3. Defaults Upon Senior Securities

None.


Item 4. Mine Safety Disclosures

Not applicable.


Item 5. Other Information

None.


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Item 6. Exhibits

Exhibit
Number
Exhibit
3.1
3.2
10.1+*
31.1*
31.2*
32.1*
32.2*
101.CAL*
Inline XBRL Calculation Linkbase Document
101.DEF*
Inline XBRL Definition Linkbase Document
101.INS*
Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.LAB*
Inline XBRL Labels Linkbase Document
101.PRE*
Inline XBRL Presentation Linkbase Document
101.SCH*
Inline XBRL Schema Document
104* Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
____________
* Filed or furnished (in the case of Exhibits 32.1 and 32.2) with this report.
+ Management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ADAMS RESOURCES & ENERGY, INC.
(Registrant)
Date: May 6, 2021 By: /s/ Kevin J. Roycraft
Kevin J. Roycraft
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Tracy E. Ohmart
Tracy E. Ohmart
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)

39
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