HOUSTON, May 7, 2020
/PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE
AMERICAN: AE) ("Adams" or the "Company") today announced
operational and financial results for the three months ended
March 31, 2020 and declared a quarterly cash dividend of
$0.24 per common share.
- Reported a net loss of $11.4
million, or $2.69 loss per
diluted common share, on revenues of $353.5
million for the first quarter of 2020, compared to net
earnings of $4.9 million, or
$1.16 earnings per diluted common
share, on revenues of $445.2 million
for the first quarter of 2019.
- Incurred an inventory valuation loss of approximately
$24.2 million during the first
quarter of 2020 as a result of the dramatic decline in the market
price of crude oil that began in early March, substantially due to
decreased global demand and subsequent oversupply driven by the
COVID-19 global pandemic.
- Reported net cash used in operating activities of $23.8 million for the first quarter of 2020,
compared to net cash provided by operating activities of
$21.0 million for the first quarter
of 2019. The decrease was primarily driven by lower earnings
as a result of inventory valuation losses recognized in the first
quarter of 2020 and a decrease in accounts payable due to a
reduction in the market price of crude oil.
- Grew adjusted net earnings to $7.7
million, or $1.81 per diluted
common share, for the first quarter of 2020, compared to adjusted
net earnings of $1.0 million, or
$0.23 per diluted common share, for
the first quarter of 2019.
- Increased adjusted cash flow by 81% to $8.9 million for the first quarter of 2020, from
$4.9 million for the first quarter of
2019.
Adjusted net (losses) earnings, adjusted (losses) earnings
per common share and adjusted cash flow are non-generally accepted
accounting principle ("non-GAAP") financial measures that are
defined and reconciled in the financial tables below.
Additional Key Highlights for Q1 2020:
- Retained strong financial flexibility at March 31, 2020,
with no short- or long-term debt and $87.4
million in cash and cash equivalents. Cash and cash
equivalents were $113.0 million at
December 31, 2019.
- Materially grew adjusted net earnings and adjusted cash flow
from fourth quarter of 2019 levels of $0.9
million and $5.5 million,
respectively.
- Adam's crude oil marketing subsidiary, GulfMark Energy, Inc.
("GulfMark"), marketed approximately 109,253 barrels per day
("bpd") of crude oil during the first quarter of 2020, compared to
113,279 bpd during the first quarter of 2019 and 108,627 bpd during
the fourth quarter of 2019. GulfMark held 494,812 barrels of
crude oil inventory at March 31, 2020, compared to 426,397
barrels at December 31, 2019.
- The collective fleet of Adams' transportation subsidiary,
Service Transport Company ("Service Transport"), traveled
approximately 5.240 million miles during the first quarter of 2020,
compared to 5.075 million miles during the first quarter of 2019
and 4.668 million miles during the fourth quarter of
2019.
"Given the environment, we were pleased with our overall results
for the first quarter of 2020," said Kevin
J. Roycraft, Adams' Chief Executive Officer. "Like
others in the industry, our crude oil inventory was financially
impacted by the significant decrease in crude oil prices beginning
in the second week of March driven by the failure of OPEC to
collectively agree on production levels and the later dramatic
decrease in global oil demand due to the emergence of the global
COVID-19 pandemic. Despite this backdrop, we saw a steady stream of
activity throughout the first quarter as our crude oil marketing
and transportation businesses are deemed essential to U.S.
infrastructure."
"More specifically, GulfMark's total crude oil volumes for the
first quarter of 2020 increased slightly from the levels we saw in
the fourth quarter of 2019. Looking at the second quarter, we
have thus far seen a significant decline in crude oil volume levels
as a number of our customers have curtailed production given the
current price environment and related storage capacity
constraints."
"We were also pleased with Service Transport's results for the
first quarter of 2020. This included our team's quick pivot
from an environment of declining demand for chemical transport to
the effective delivery of high-demand COVID-19 related products,
including bleach, soap and disinfectant. We have seen this
trend continue to date in the second quarter. As in the past,
we will leverage our industry leading record of on-time and safe
product delivery to best serve the requirements of the individuals
and businesses in the communities in which we operate."
Capital Investments and Dividends
During the first quarter of 2020, the Company spent
approximately $2.2 million of capital
for GulfMark's purchase of tractors that had been committed in late
2019. In addition, Adams paid dividends of $1.0 million ($0.24
per common share).
Adams' Board of Directors has declared a quarterly cash dividend
for the first quarter of 2020 in the amount of $0.24 per common share, payable on June 19, 2020 to shareholders of record as of
June 5, 2020. Adams' has
consistently paid a dividend since 1994, or more than 25
years.
Outlook
Mr. Roycraft concluded, "Clearly the overall environment remains
fluid as the efforts of the U.S. and countries across the globe
remain centered on curbing the spread of COVID-19. As such,
while it is difficult to estimate the full effects of the outbreak
on our financial results for the remainder of 2020, we believe our
strong cash position will continue to serve us well. As in
the past, we remain squarely focused on executing our long-term
strategy of safely and prudently operating our businesses, driving
further efficiencies and capitalizing on business development
opportunities as appropriate."
"Finally, I want to thank all of our employees for their
continued hard work and dedication as we work closely with our
contractors and partners to safely serve the needs of our
customers. We appreciate the continued support of our
shareholders and look forward to keeping everyone apprised of our
progress as we navigate through this unprecedented period for the
global community."
Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes the
non-GAAP financial measures of adjusted cash flow, adjusted net
(losses) earnings and adjusted (losses) earnings per common
share. The accompanying schedules provide definitions of
these non-GAAP financial measures and reconciliations to their most
directly comparable financial measures calculated and presented in
accordance with GAAP. Company management believes these
measures are useful indicators of the financial performance of our
business and uses these measurements as aids in monitoring the
Company's ongoing financial performance from quarter to quarter and
year to year on a regular basis and for benchmarking against peer
companies. Our non-GAAP financial measures should not be
considered as alternatives to GAAP measures such as net income,
operating income, net cash flow provided by operating activities or
any other measure of financial performance calculated and presented
in accordance with GAAP. Our non-GAAP financial measures may
not be comparable to similarly titled measures of other companies
because they may not calculate such measures in the same manner as
we do.
About Adams Resources & Energy, Inc.
Adams Resources & Energy, Inc. is primarily engaged in the
business of crude oil marketing, transportation and storage, tank
truck transportation of liquid chemicals and dry bulk through its
two subsidiaries, GulfMark Energy, Inc. and Service Transport
Company, respectively. For more information, visit
www.adamsresources.com.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"intend," "plan," "project," "estimate," "continue," "potential,"
"should," "could," "may," "will," "objective," "guidance,"
"outlook," "effort," "expect," "believe," "predict," "budget,"
"projection," "goal," "forecast," "target" or similar words.
Statements may be forward looking even in the absence of these
particular words. Where, in any forward-looking statement, the
Company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. Unless
legally required, Adams undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact
Tracy E. Ohmart
EVP, Chief Financial Officer
tohmart@adamsresources.com
(713) 881-3609
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
Marketing
|
|
$
|
337,221
|
|
|
$
|
429,761
|
|
Transportation
|
|
16,256
|
|
|
15,407
|
|
Total
revenues
|
|
353,477
|
|
|
445,168
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Marketing
|
|
352,865
|
|
|
420,541
|
|
Transportation
|
|
13,185
|
|
|
13,101
|
|
General and
administrative
|
|
2,894
|
|
|
2,684
|
|
Depreciation and
amortization
|
|
4,473
|
|
|
3,589
|
|
Total costs and
expenses
|
|
373,417
|
|
|
439,915
|
|
|
|
|
|
|
Operating (losses)
earnings
|
|
(19,940)
|
|
|
5,253
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Gain on dissolution of
investment
|
|
—
|
|
|
498
|
|
Interest
income
|
|
365
|
|
|
656
|
|
Interest
expense
|
|
(150)
|
|
|
(65)
|
|
Total other
income (expense), net
|
|
215
|
|
|
1,089
|
|
|
|
|
|
|
(Losses) Earnings
before income taxes
|
|
(19,725)
|
|
|
6,342
|
|
Income tax benefit
(provision)
|
|
8,298
|
|
|
(1,434)
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(11,427)
|
|
|
$
|
4,908
|
|
|
|
|
|
|
(Losses) Earnings
per share:
|
|
|
|
|
Basic net (losses)
earnings per common share
|
|
$
|
(2.70)
|
|
|
$
|
1.16
|
|
Diluted net (losses)
earnings per common share
|
|
$
|
(2.69)
|
|
|
$
|
1.16
|
|
|
|
|
|
|
Dividends per
common share
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
87,398
|
|
|
$
|
112,994
|
|
Restricted
cash
|
|
8,827
|
|
|
9,261
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
52,941
|
|
|
94,534
|
|
Inventory
|
|
10,021
|
|
|
26,407
|
|
Derivative
assets
|
|
545
|
|
|
—
|
|
Income tax
receivable
|
|
14,495
|
|
|
2,569
|
|
Prepayments and other
current assets
|
|
1,306
|
|
|
1,559
|
|
Total current
assets
|
|
175,533
|
|
|
247,324
|
|
|
|
|
|
|
Property and
equipment, net
|
|
65,381
|
|
|
69,046
|
|
Operating lease
right-of-use assets, net
|
|
9,090
|
|
|
9,576
|
|
Intangible assets,
net
|
|
1,465
|
|
|
1,597
|
|
Cash deposits and
other assets
|
|
2,187
|
|
|
3,299
|
|
Total
assets
|
|
$
|
253,656
|
|
|
$
|
330,842
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
78,245
|
|
|
$
|
147,851
|
|
Accounts payable –
related party
|
|
6
|
|
|
5
|
|
Derivative
liabilities
|
|
526
|
|
|
—
|
|
Current portion of
finance lease obligations
|
|
2,193
|
|
|
2,167
|
|
Current portion of
operating lease liabilities
|
|
2,203
|
|
|
2,252
|
|
Other current
liabilities
|
|
8,808
|
|
|
7,302
|
|
Total current
liabilities
|
|
91,981
|
|
|
159,577
|
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
1,585
|
|
|
1,573
|
|
Finance lease
obligations
|
|
3,818
|
|
|
4,376
|
|
Operating lease
liabilities
|
|
6,887
|
|
|
7,323
|
|
Deferred taxes and
other liabilities
|
|
10,059
|
|
|
6,352
|
|
Total
liabilities
|
|
114,330
|
|
|
179,201
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
139,326
|
|
|
151,641
|
|
Total liabilities and
shareholders' equity
|
|
$
|
253,656
|
|
|
$
|
330,842
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
Operating
activities:
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(11,427)
|
|
|
$
|
4,908
|
|
Adjustments to
reconcile net (losses) earnings to net cash
|
|
|
|
|
provided by (used in)
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
4,473
|
|
|
3,589
|
|
Gains on sales of
property
|
|
(140)
|
|
|
(178)
|
|
Provision for doubtful
accounts
|
|
(24)
|
|
|
(32)
|
|
Stock-based
compensation expense
|
|
134
|
|
|
123
|
|
Deferred income
taxes
|
|
(2,689)
|
|
|
834
|
|
Net change in fair
value contracts
|
|
(19)
|
|
|
19
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(498)
|
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
41,617
|
|
|
(2,866)
|
|
Accounts
receivable/payable, affiliates
|
|
1
|
|
|
(23)
|
|
Inventories
|
|
16,386
|
|
|
(6,458)
|
|
Income tax
receivable
|
|
(5,530)
|
|
|
426
|
|
Prepayments and other
current assets
|
|
253
|
|
|
(52)
|
|
Accounts
payable
|
|
(68,384)
|
|
|
17,914
|
|
Accrued
liabilities
|
|
1,506
|
|
|
2,432
|
|
Other
|
|
(3)
|
|
|
878
|
|
Net cash provided by
(used in) operating activities
|
|
(23,846)
|
|
|
21,016
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(2,212)
|
|
|
(8,351)
|
|
Proceeds from property
sales
|
|
502
|
|
|
543
|
|
Proceeds from
dissolution of AREC
|
|
—
|
|
|
923
|
|
Insurance and state
collateral refunds
|
|
1,128
|
|
|
842
|
|
Net cash used
in investing activities
|
|
(582)
|
|
|
(6,043)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments of
finance lease obligations
|
|
(532)
|
|
|
(218)
|
|
Payment of contingent
consideration liability
|
|
(54)
|
|
|
—
|
|
Dividends paid on
common stock
|
|
(1,016)
|
|
|
(928)
|
|
Net cash used
in financing activities
|
|
(1,602)
|
|
|
(1,146)
|
|
|
|
|
|
|
(Decrease)
Increase in cash and cash equivalents, including restricted
cash
|
|
(26,030)
|
|
|
13,827
|
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
122,255
|
|
|
117,066
|
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
|
96,225
|
|
|
$
|
130,893
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to Net (Losses) Earnings:
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(11,427)
|
|
|
$
|
4,908
|
|
Add
(subtract):
|
|
|
|
|
Income tax (benefit)
provision
|
|
(8,298)
|
|
|
1,434
|
|
Depreciation and
amortization
|
|
4,473
|
|
|
3,589
|
|
Gains on sales of
property
|
|
(140)
|
|
|
(178)
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(498)
|
|
Stock-based
compensation expense
|
|
134
|
|
|
123
|
|
Inventory liquidation
gains
|
|
—
|
|
|
(4,462)
|
|
Inventory valuation
losses
|
|
24,215
|
|
|
—
|
|
Net change in fair
value contracts
|
|
(19)
|
|
|
19
|
|
Adjusted cash
flow
|
|
$
|
8,938
|
|
|
$
|
4,935
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
Adjusted net
earnings and earnings per common share (Non-GAAP):
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(11,427)
|
|
|
$
|
4,908
|
|
Add
(subtract):
|
|
|
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(498)
|
|
Gains on sales of
property
|
|
(140)
|
|
|
(178)
|
|
Stock-based
compensation expense
|
|
134
|
|
|
123
|
|
Net change in fair
value contracts
|
|
(19)
|
|
|
19
|
|
Inventory liquidation
gains
|
|
—
|
|
|
(4,462)
|
|
Inventory valuation
losses
|
|
24,215
|
|
|
—
|
|
Tax effect of
adjustments to earnings
|
|
(5,080)
|
|
|
1,049
|
|
Adjusted net
earnings
|
|
$
|
7,683
|
|
|
$
|
961
|
|
|
|
|
|
|
Adjusted earnings per
common share
|
|
$
|
1.81
|
|
|
$
|
0.23
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to Net Cash Provided by (Used in) Operating Activities:
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
(23,846)
|
|
|
$
|
21,016
|
|
Add
(subtract):
|
|
|
|
|
Income tax (benefit)
provision
|
|
(8,298)
|
|
|
1,434
|
|
Deferred income
taxes
|
|
2,689
|
|
|
(834)
|
|
Provision for doubtful
accounts
|
|
24
|
|
|
32
|
|
Inventory liquidation
gains
|
|
—
|
|
|
(4,462)
|
|
Inventory valuation
losses
|
|
24,215
|
|
|
—
|
|
Changes in assets and
liabilities
|
|
14,154
|
|
|
(12,251)
|
|
Adjusted cash
flow
|
|
$
|
8,938
|
|
|
$
|
4,935
|
|
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multimedia:http://www.prnewswire.com/news-releases/adams-resources--energy-inc-announces-results-for-first-quarter-2020-and-declares-quarterly-dividend-301055219.html
SOURCE Adams Resources & Energy, Inc.