Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2023

ADAMS RESOURCES & ENERGY, INC.

(Exact name of registrant as specified in its charter)


Delaware	1-7908	74-1753147
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


			17 South Briar Hollow Lane, Suite 100, Houston, Texas			77027
			(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (713) 881-3600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

NYSE American LLC


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
	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. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 8, 2023, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 2023. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is hereby incorporated herein by reference.

The information provided in this Item 2.02 (including the press release attached as Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, except to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


99.1			Press release of Adams Resources & Energy, Inc. issued November 8 , 2023.

104			Cover Page Interactive Data File — the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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 hereunto duly authorized.


			ADAMS RESOURCES & ENERGY, INC.



Date:	November 8, 2023	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer
			(Principal Financial Officer and
			Principal Accounting Officer)

Exhibit 99.1

FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES

THIRD QUARTER 2023 RESULTS AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Wednesday, November 8, 2023) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”), a company engaged in marketing, transportation, logistics and repurposing of crude oil, refined products and dry bulk materials, today announced operational and financial results for the quarter ended September 30, 2023. The Company also declared a quarterly cash dividend of $0.24 per common share.

Q3 2023 Financial Summary

•Total revenue of $760.6 million, versus $852.9 million for the third quarter of 2022.

•Net earnings of $2.3 million, or $0.88 per diluted common share, compared to earnings of $0.8 million, or $0.32 per common share for the second quarter of 2023 and net earnings of $2.2 million, or $0.50 per diluted common share for the third quarter of 2022.

•Net cash provided by operating activities of $11.4 million for the third quarter of 2023, a decrease of $28.6 million from the prior-year quarter. This decrease was primarily driven by the timing of payments and receipts from crude oil customers and changes in inventory due to fluctuations in crude oil pricing and barrels held.

•Adjusted cash flow of $4.8 million for the third quarter of 2023, compared to $7.1 million for the second quarter of 2023 and $12.6 million in the prior-year.

•Cash and cash equivalents were $16.3 million as of September 30, 2023, versus $9.0 million at June 30, 2023, primarily due to the timing of receipts and early payments from crude oil customers.

•Liquidity of $55.9 million at September 30, 2023, versus $48.6 million at June 30, 2023.

•Paid dividends totaling $0.24 per share during the third quarter of 2023. The Company has consistently paid a dividend since 1994.

Adjusted cash flow is a non-generally accepted accounting principle (“non-GAAP”) financial measure that is defined and reconciled, along with the non-GAAP financial measures adjusted net (losses) earnings and adjusted net (losses) earnings per diluted common share, in the financial tables later in this release.

Additional Operational Highlights

•Adams’ crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 92,556 barrels per day (“bpd”) of crude oil during the third quarter of 2023, compared to 91,878 bpd during the third quarter of 2022 and 92,152 bpd during the second quarter of 2023.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.51 million miles during the third quarter of 2023, versus 6.78 million miles during the third quarter of 2022 and 6.30 million miles during the second quarter of 2023.

•Adams’ crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System (“VEX Pipeline System”), throughput was 8,548 bpd for the third quarter of 2023, compared to 9,963 bpd for the third quarter of 2022 and 8,560 bpd for the second quarter of 2023, and terminalling volumes were 9,350 bpd for the third quarter of 2023, compared to 9,716 bpd in the third quarter of 2022, and 10,785 bpd for the second quarter of 2023.

•The logistics and repurposing segment, which includes the Firebird Bulk Carriers, Inc. (“Firebird”) and Phoenix Oil, Inc. (“Phoenix”) businesses acquired in August 2022, had a positive impact on quarterly cash flow.

•Remained solidly positioned with 307,175 barrels of crude oil inventory at September 30, 2023, compared to 328,562 barrels at December 31, 2022.

“Our performance in the third quarter showcased several encouraging highlights in a very challenging environment. Our crude oil marketing segment demonstrated a sequential increase in operating income despite a number of headwinds,” said Kevin J. Roycraft, Chief Executive Officer of Adams. “Moreover, we increased our cash balance and liquidity and nearly tripled our net income on a sequential basis.”

Capital Investments and Dividends

During the third quarter of 2023, the Company had capital expenditures of $3.0 million primarily for the previously announced purchase of ten tractors, eight trailers and other field equipment. In addition, Adams paid dividends of $0.6 million, or $0.24 per common share.

As part of Adams’ on-going capital allocation strategy, the Board of Directors declared a quarterly cash dividend for the third quarter of 2023 of $0.24 per common share, payable on December 15, 2023, to shareholders of record as of December 1, 2023.

Outlook

“We believe the challenges facing our GulfMark and Service Transport segments are expected to remain in place for the next few months, with a gradual recovery to begin late in the first half of 2024,” Mr. Roycraft continued. “Our Company remains in a very strong financial position to navigate the continued macroeconomic challenges affecting our industries. We are well-prepared to deliver meaningful performance when our key markets begin to improve. In

addition, our continued commitment to our dividend should deliver long-term value to our shareholders,” Mr. Roycraft concluded.

Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-GAAP financial measures of adjusted cash flow, adjusted net earnings (losses) and adjusted earnings (losses) per common share. The accompanying schedules provide definitions of these non-GAAP financial measures and reconciliations to their most directly comparable financial measures calculated and presented in accordance with GAAP. Company management believes these measures are useful indicators of the financial performance of our business and uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against peer companies. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, net cash flow provided by operating activities, earnings per share or any other measure of financial performance calculated and presented in accordance with GAAP. Adams’ 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 Adams does.

Conference Call

The Company will host a conference call to discuss its third quarter results on Thursday, November 9, 2023 at 9:00 a.m. ET (8:00 a.m. CT). To participate in the live conference call, dial 1-844-413-3976 (Toll-Free) within the U.S., or 1-412-317-1802 (Toll-Required) outside the U.S., or log into the webcast, available on Adams’ investor relations website at adamsresources.com/investor-relations. A replay will also be available on the Company’s website or by dialing 1-877-344-7529 (Toll-Free) within the U.S., or 1-412-317-0088 (Toll-Required) outside the U.S. and entering code 6806573.

About Adams Resources & Energy, Inc.

Adams Resources & Energy, Inc. is engaged in crude oil marketing, transportation, terminalling and storage, tank truck transportation of liquid chemicals and dry bulk, interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC, GulfMark Terminals, LLC, Firebird Bulk Carriers, Inc. and Phoenix Oil, Inc. 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, capital deployment plans 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. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, and any other risk factors included in Adams’ reports filed with the Securities and Exchange Commission. 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.

Company Contact

Tracy E. Ohmart

EVP, Chief Financial Officer

tohmart@adamsresources.com

(713) 881-3609

Investor Relations Contact

John Beisler or Steven Hooser

Three Part Advisors

(817) 310-8776

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues:
Marketing	$	719,925	$	814,394	$	1,913,673	$	2,524,465
Transportation	24,206		29,830		75,103		86,054
Pipeline and storage	59		—		308		—
Logistics and repurposing	16,424		8,677		46,458		8,677
Total revenues	760,614		852,901		2,035,542		2,619,196

Costs and expenses:
Marketing	710,169		807,316		1,894,416		2,498,474
Transportation	19,642		23,732		62,315		68,271
Pipeline and storage	659		640		2,350		1,799
Logistics and repurposing	15,121		7,582		41,448		7,582
General and administrative	4,162		4,630		10,649		12,860
Depreciation and amortization	6,936		6,008		21,289		16,109
Total costs and expenses	756,689		849,908		2,032,467		2,605,095

Operating earnings	3,925		2,993		3,075		14,101

Other income (expense):
Interest and other income	119		338		893		665
Interest expense	(1,027)		(119)		(2,525)		(369)
Total other (expense) income, net	(908)		219		(1,632)		296

Earnings before income taxes	3,017		3,212		1,443		14,397
Income tax provision	(759)		(1,022)		(357)		(3,641)

Net earnings	$	2,258	$	2,190	$	1,086	$	10,756

Earnings per share:
Basic net earnings per common share	$	0.89	$	0.50	$	0.43	$	2.46
Diluted net earnings per common share	$	0.88	$	0.50	$	0.42	$	2.44

Dividends per common share	$	0.24	$	0.24	$	0.72	$	0.72

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	September 30,		December 31,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	16,313	$	20,532
Restricted cash	8,575		10,535
Accounts receivable, net of allowance for doubtful accounts	219,263		189,039

Inventory	27,650		26,919
Derivative assets	5		—
Income tax receivable	510		—
Prepayments and other current assets	2,470		3,118
Total current assets	274,786		250,143

Property and equipment, net	111,042		106,425
Operating lease right-of-use assets, net	6,212		7,720
Intangible assets, net	8,407		9,745
Goodwill	6,673		6,428
Other assets	3,475		3,698
Total assets	$	410,595	$	384,159

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	226,613	$	204,391
Accounts payable – related party	—		31
Derivative liabilities	—		330
Current portion of finance lease obligations	6,863		4,382
Current portion of operating lease liabilities	2,769		2,712
Current portion of long-term debt	2,500		—
Other current liabilities	13,856		19,214
Total current liabilities	252,601		231,060
Other long-term liabilities:
Long-term debt	20,000		24,375
Asset retirement obligations	2,499		2,459
Finance lease obligations	22,292		12,085
Operating lease liabilities	3,446		5,007
Deferred taxes and other liabilities	15,696		15,996
Total liabilities	316,534		290,982

Commitments and contingencies

Shareholders’ equity	94,061		93,177
Total liabilities and shareholders’ equity	$	410,595	$	384,159

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating activities:
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization	6,936		6,008		21,289		16,109
Gains on sales of property	(663)		(771)		(1,429)		(1,709)
Provision for doubtful accounts	39		(12)		29		(20)
Stock-based compensation expense	389		254		1,044		712
Change in contingent consideration liability	—		—		(2,566)		—
Deferred income taxes	773		(1,429)		3		(1,761)
Net change in fair value contracts	(35)		(1,254)		(335)		(1,884)
Changes in assets and liabilities:
Accounts receivable	(60,869)		73,777		(30,253)		(56,060)
Accounts receivable/payable, affiliates	—		17		(31)		17
Inventories	(1,127)		32,080		(731)		(10,259)
Income tax receivable	(41)		—		(510)		6,424
Prepayments and other current assets	138		86		648		468
Accounts payable	63,845		(74,219)		22,239		46,925
Accrued liabilities	(145)		3,875		(2,709)		6,489
Other	(52)		(592)		64		(375)
Net cash provided by operating activities	11,446		40,010		7,838		15,832

Investing activities:
Property and equipment additions	(3,009)		(2,014)		(8,917)		(6,797)
Acquisition of Firebird and Phoenix, net of cash acquired	—		(33,590)		—		(33,590)
Proceeds from property sales	1,634		835		3,078		2,209
Insurance and state collateral refunds	—		331		—		331
Net cash used in investing activities	(1,375)		(34,438)		(5,839)		(37,847)

Financing activities:
Borrowings under Credit Agreement	38,000		15,000		76,000		45,000
Repayments under Credit Agreement	(38,625)		—		(77,875)		(30,000)
Principal repayments of finance lease obligations	(1,697)		(1,185)		(4,944)		(3,491)

Net proceeds from sale of equity	—		—		549		283

Dividends paid on common stock	(619)		(1,054)		(1,908)		(3,180)
Net cash (used in) provided by financing activities	(2,941)		12,761		(8,178)		8,612

Increase (Decrease) in cash and cash equivalents, including restricted cash	7,130		18,333		(6,179)		(13,403)
Cash and cash equivalents, including restricted cash, at beginning of period	17,758		75,581		31,067		107,317
Cash and cash equivalents, including restricted cash, at end of period	$	24,888	$	93,914	$	24,888	$	93,914

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Reconciliation of Adjusted Cash Flow to Net Earnings:

Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Add (subtract):
Income tax provision	759		1,022		357		3,641
Depreciation and amortization	6,936		6,008		21,289		16,109
Gains on sales of property	(663)		(771)		(1,429)		(1,709)
Stock-based compensation expense	389		254		1,044		712
Change in contingent consideration liability	—		—		(2,566)		—
Inventory liquidation gains	(4,890)		—		(2,922)		(2,062)
Inventory valuation losses	—		5,122		—		—
Net change in fair value contracts	(35)		(1,254)		(335)		(1,884)
Adjusted cash flow	$	4,754	$	12,571	$	16,524	$	25,563





Reconciliation of Adjusted net earnings (losses) and earnings
(losses) per common share (Non-GAAP) to Net Earnings:
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Add (subtract):
Gains on sales of property	(663)		(771)		(1,429)		(1,709)
Stock-based compensation expense	389		254		1,044		712
Change in contingent consideration liability	—		—		(2,566)		—
Net change in fair value contracts	(35)		(1,254)		(335)		(1,884)
Inventory liquidation gains	(4,890)		—		(2,922)		(2,062)
Inventory valuation losses	—		5,122		—		—
Tax effect of adjustments to earnings (losses)	1,092		(704)		1,304		1,038
Adjusted net (losses) earnings	$	(1,849)	$	4,837	$	(3,818)	$	6,851

Adjusted (losses) earnings per common share	$	(0.72)	$	1.09	$	(1.49)	$	1.55





Reconciliation of Adjusted Cash Flow to Net Cash
Provided By Operating Activities:
Net cash provided by operating activities	$	11,446	$	40,010	$	7,838	$	15,832
Add (subtract):
Income tax provision (benefit)	759		1,022		357		3,641
Deferred income taxes	(773)		1,429		(3)		1,761
Provision for doubtful accounts	(39)		12		(29)		20
Inventory liquidation gains	(4,890)		—		(2,922)		(2,062)
Inventory valuation losses	—		5,122		—		—
Changes in assets and liabilities	(1,749)		(35,024)		11,283		6,371
Adjusted cash flow	$	4,754	$	12,571	$	16,524	$	25,563

###

Cover Page	Nov. 08, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 08, 2023
Entity Registrant Name	ADAMS RESOURCES & ENERGY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-7908
Entity Tax Identification Number	74-1753147
Entity Address, Address Line One	17 South Briar Hollow Lane
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	713
Local Phone Number	881-3600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.10 par value
Trading Symbol	AE
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false
Entity Central Index Key	0000002178
Amendment Flag	false