HOUSTON, Aug. 6, 2020 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced
operational and financial results for the three months ended
June 30, 2020 and declared a quarterly cash dividend of
$0.24 per common share.
- Reported net earnings of $3.5
million, or $0.82 per diluted
common share, on revenues of $152.3
million for the second quarter of 2020, compared to net
earnings of $0.1 million on revenues
of $484.4 million for the second
quarter of 2019.
- Incurred inventory liquidation gains of approximately
$6.0 million during the second
quarter of 2020 as a result of the recovery in crude oil prices
following 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 global COVID-19
pandemic.
- Reported net cash used in operating activities of $6.6 million for the second quarter of 2020,
compared to net cash provided by operating activities of
$12.7 million for the second quarter
of 2019. The decrease was primarily driven by changes in working
capital due to a reduction in the market price of crude oil.
- Reported adjusted net losses of $0.8
million, or $0.18 loss per
diluted common share, for the second quarter of 2020, compared to
adjusted net earnings of $0.6
million, or $0.13 of earnings
per diluted common share, for the second quarter of 2019.
- Reported adjusted cash flow $1.9
million for the second quarter of 2020, versus $5.0 million for the second quarter of 2019.
Adjusted net (losses) earnings, adjusted (losses) earnings
per diluted 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 Highlights for Q2 2020
- Announced on May 17, 2020 and
closed on June 26, 2020 Service
Transport Company's ("Service Transport"), Adams' transportation subsidiary, purchase of
substantially all of the assets of CTL Transportation, LLC ("CTL"),
a subsidiary of Comcar Industries, Inc. The acquisition grew
Service Transport's collective fleet size through the addition of
approximately 163 tractor trailer trucks and 328 trailers, and
expanded its footprint of operations into Florida, Georgia, Illinois, Missouri and Ohio.
- Maintained strong financial flexibility at June 30, 2020, with no short- or long-term debt
and $70.2 million in cash and cash
equivalents. Cash and cash equivalents were $87.4 million at March 31,
2020.
- Adam's crude oil marketing subsidiary, GulfMark Energy, Inc.
("GulfMark"), marketed approximately 81,152 barrels per day ("bpd")
of crude oil during the second quarter of 2020, compared to 101,884
bpd during the second quarter of 2019 and 109,253 bpd during the
first quarter of 2020. GulfMark held 519,927 barrels of crude oil
inventory at June 30, 2020, compared
to 494,812 barrels at March 31,
2020.
- The collective fleet of Service Transport traveled
approximately 3.890 million miles during the second quarter of
2020, compared to 5.639 million miles during the second quarter of
2019 and 5.240 million miles during the first quarter of 2020.
- Adams' stock (NYSE AMERICAN:
AE) was added to the Russell 3000® Index and Russell 2000® Index
effective June 29, 2020. The Company
expects that joining the indexes will drive increased awareness
among institutional investors and additional liquidity in the
trading of its shares.
Kevin J. Roycraft, Adams' Chief Executive Officer, commented, "We
are pleased with our overall performance given the challenging
backdrop brought on by the COVID-19 pandemic and global decline in
crude oil demand. These events have driven an unprecedented
slowdown in global economic activity and disrupted historical
supply and demand patterns. While this resulted in a decline
in demand for our crude oil marketing operations and transportation
services during the second quarter, we were able to mitigate these
declines through operational efficiencies, pricing flexibility and
product diversification."
"Both GulfMark and Service Transport saw a noticeable
improvement in customer activity levels in the latter half of the
second quarter after seeing significant declines at the end of the
first quarter and beginning of the second quarter of 2020. In
this volatile environment, we remain squarely focused on ensuring
we maintain maximum flexibility in our operations and effectively
controlling our cost
structure."
"I am very proud of the entire Adams' team for their commitment to safety and
customer satisfaction as we provide essential services that keep
this country moving."
Capital Investments and Dividends
During the second quarter of 2020, the Company spent capital of
$9.1 million for the purchase of
substantially all of the assets of CTL, as well as $0.7 million for leasehold improvements and other
equipment. 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 second quarter of 2020
in the amount of $0.24 per common
share, payable on September 18, 2020
to shareholders of record as of September
4, 2020. Adams' has
consistently paid a dividend since 1994, or more than 25
years.
Outlook
Mr. Roycraft concluded, "Over the past couple of months we have
been pleased to see overall improvement in our customer's activity
levels. We currently expect this trend will continue but also
recognize there will be ongoing volatility in the marketplace until
the COVID-19 pandemic has effectively ended and the global economy
begins to recover more fully. We believe our proven business
model and strong balance sheet – including a substantial cash
balance and no debt – places us in a unique position for both near
and long-term success. Supporting our efforts is what I
believe to be one of the best teams in the business, and I want to
thank all of our employees for their continued efforts as we work
together safely and provide our customers unsurpassed service
quality and reliability."
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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$
|
140,141
|
|
|
$
|
467,040
|
|
|
$
|
477,362
|
|
|
$
|
896,801
|
|
Transportation
|
|
12,145
|
|
|
17,393
|
|
|
28,401
|
|
|
32,800
|
|
Total
revenues
|
|
152,286
|
|
|
484,433
|
|
|
505,763
|
|
|
929,601
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
131,454
|
|
|
463,774
|
|
|
484,319
|
|
|
884,315
|
|
Transportation
|
|
10,888
|
|
|
14,436
|
|
|
24,073
|
|
|
27,537
|
|
General and
administrative
|
|
2,731
|
|
|
2,582
|
|
|
5,625
|
|
|
5,266
|
|
Depreciation and
amortization
|
|
4,278
|
|
|
4,284
|
|
|
8,751
|
|
|
7,873
|
|
Total costs and
expenses
|
|
149,351
|
|
|
485,076
|
|
|
522,768
|
|
|
924,991
|
|
|
|
|
|
|
|
|
|
|
Operating (losses)
earnings
|
|
2,935
|
|
|
(643)
|
|
|
(17,005)
|
|
|
4,610
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
investment
|
|
—
|
|
|
75
|
|
|
—
|
|
|
573
|
|
Interest
income
|
|
144
|
|
|
731
|
|
|
509
|
|
|
1,387
|
|
Interest
expense
|
|
(68)
|
|
|
(117)
|
|
|
(218)
|
|
|
(182)
|
|
Total other
income (expense), net
|
|
76
|
|
|
689
|
|
|
291
|
|
|
1,778
|
|
|
|
|
|
|
|
|
|
|
(Losses) Earnings
before income taxes
|
|
3,011
|
|
|
46
|
|
|
(16,714)
|
|
|
6,388
|
|
Income tax benefit
(provision)
|
|
492
|
|
|
(40)
|
|
|
8,790
|
|
|
(1,474)
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
3,503
|
|
|
$
|
6
|
|
|
$
|
(7,924)
|
|
|
$
|
4,914
|
|
|
|
|
|
|
|
|
|
|
(Losses) Earnings
per share:
|
|
|
|
|
|
|
|
|
Basic net (losses)
earnings per common share
|
|
$
|
0.83
|
|
|
$
|
—
|
|
|
$
|
(1.87)
|
|
|
$
|
1.16
|
|
Diluted net (losses)
earnings per common share
|
|
$
|
0.82
|
|
|
$
|
—
|
|
|
$
|
(1.87)
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.48
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
70,215
|
|
|
$
|
112,994
|
|
Restricted
cash
|
|
7,982
|
|
|
9,261
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
67,455
|
|
|
94,534
|
|
Inventory
|
|
19,837
|
|
|
26,407
|
|
Derivative
assets
|
|
26
|
|
|
—
|
|
Income tax
receivable
|
|
10,005
|
|
|
2,569
|
|
Prepayments and other
current assets
|
|
1,297
|
|
|
1,559
|
|
Total current
assets
|
|
176,817
|
|
|
247,324
|
|
|
|
|
|
|
Property and
equipment, net
|
|
69,280
|
|
|
69,046
|
|
Operating lease
right-of-use assets, net
|
|
8,599
|
|
|
9,576
|
|
Intangible assets,
net
|
|
4,491
|
|
|
1,597
|
|
Cash deposits and
other assets
|
|
2,147
|
|
|
3,299
|
|
Total
assets
|
|
$
|
261,334
|
|
|
$
|
330,842
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
83,410
|
|
|
$
|
147,851
|
|
Accounts payable –
related party
|
|
6
|
|
|
5
|
|
Derivative
liabilities
|
|
14
|
|
|
—
|
|
Current portion of
finance lease obligations
|
|
2,482
|
|
|
2,167
|
|
Current portion of
operating lease liabilities
|
|
2,159
|
|
|
2,252
|
|
Other current
liabilities
|
|
11,167
|
|
|
7,302
|
|
Total current
liabilities
|
|
99,238
|
|
|
159,577
|
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
1,598
|
|
|
1,573
|
|
Finance lease
obligations
|
|
4,647
|
|
|
4,376
|
|
Operating lease
liabilities
|
|
6,442
|
|
|
7,323
|
|
Deferred taxes and
other liabilities
|
|
7,519
|
|
|
6,352
|
|
Total
liabilities
|
|
119,444
|
|
|
179,201
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
141,890
|
|
|
151,641
|
|
Total liabilities and
shareholders' equity
|
|
$
|
261,334
|
|
|
$
|
330,842
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2020
|
|
2019
|
Operating
activities:
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(7,924)
|
|
|
$
|
4,914
|
|
Adjustments to
reconcile net (losses) earnings to net cash provided by (used in) operating
activities:
|
|
|
|
|
Depreciation
and amortization
|
|
8,751
|
|
|
7,873
|
|
Gains on sales
of property
|
|
(140)
|
|
|
(434)
|
|
Provision for
doubtful accounts
|
|
(24)
|
|
|
(36)
|
|
Stock-based
compensation expense
|
|
304
|
|
|
197
|
|
Deferred income
taxes
|
|
(1,534)
|
|
|
1,012
|
|
Net change in
fair value contracts
|
|
(12)
|
|
|
19
|
|
Gain on
dissolution of AREC
|
|
—
|
|
|
(573)
|
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
27,103
|
|
|
11,812
|
|
Accounts
receivable/payable, affiliates
|
|
1
|
|
|
(23)
|
|
Inventories
|
|
6,570
|
|
|
2,802
|
|
Income tax
receivable
|
|
(4,733)
|
|
|
187
|
|
Prepayments and
other current assets
|
|
262
|
|
|
(271)
|
|
Accounts
payable
|
|
(63,013)
|
|
|
1,505
|
|
Accrued
liabilities
|
|
3,875
|
|
|
3,765
|
|
Other
|
|
55
|
|
|
999
|
|
Net cash provided by
(used in) operating activities
|
|
(30,459)
|
|
|
33,748
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(2,880)
|
|
|
(13,121)
|
|
Asset
acquisition
|
|
(9,137)
|
|
|
(5,611)
|
|
Proceeds from property
sales
|
|
514
|
|
|
1,287
|
|
Proceeds from
dissolution of AREC
|
|
—
|
|
|
998
|
|
Insurance and state
collateral refunds
|
|
1,129
|
|
|
774
|
|
Net cash used
in investing activities
|
|
(10,374)
|
|
|
(15,673)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments of
finance lease obligations
|
|
(1,070)
|
|
|
(651)
|
|
Payment of contingent
consideration liability
|
|
(111)
|
|
|
—
|
|
Dividends paid on
common stock
|
|
(2,044)
|
|
|
(1,944)
|
|
Net cash used
in financing activities
|
|
(3,225)
|
|
|
(2,595)
|
|
|
|
|
|
|
(Decrease)
Increase in cash and cash equivalents, including restricted
cash
|
|
(44,058)
|
|
|
15,480
|
|
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
|
|
$
|
78,197
|
|
|
$
|
132,546
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to Net (Losses) Earnings:
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
3,503
|
|
|
$
|
6
|
|
|
$
|
(7,924)
|
|
|
$
|
4,914
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
(492)
|
|
|
40
|
|
|
(8,790)
|
|
|
1,474
|
|
Depreciation and
amortization
|
|
4,278
|
|
|
4,284
|
|
|
8,751
|
|
|
7,873
|
|
Gains on sales of
property
|
|
—
|
|
|
(256)
|
|
|
(140)
|
|
|
(434)
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(75)
|
|
|
—
|
|
|
(573)
|
|
Stock-based
compensation expense
|
|
170
|
|
|
74
|
|
|
304
|
|
|
197
|
|
Early retirement and
terminations costs
|
|
431
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Inventory liquidation
gains
|
|
(6,031)
|
|
|
—
|
|
|
—
|
|
|
(3,510)
|
|
Inventory valuation
losses
|
|
—
|
|
|
952
|
|
|
18,184
|
|
|
—
|
|
Net change in fair
value contracts
|
|
7
|
|
|
—
|
|
|
(12)
|
|
|
19
|
|
Adjusted cash
flow
|
|
$
|
1,866
|
|
|
$
|
5,025
|
|
|
$
|
10,804
|
|
|
$
|
9,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted net
(losses) earnings and (losses) earnings per common share
(Non-GAAP):
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
3,503
|
|
|
$
|
6
|
|
|
$
|
(7,924)
|
|
|
$
|
4,914
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(75)
|
|
|
—
|
|
|
(573)
|
|
Gains on sales of
property
|
|
—
|
|
|
(256)
|
|
|
(140)
|
|
|
(434)
|
|
Stock-based
compensation expense
|
|
170
|
|
|
74
|
|
|
304
|
|
|
197
|
|
Early retirement and
terminations costs
|
|
431
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Net change in fair
value contracts
|
|
7
|
|
|
—
|
|
|
(12)
|
|
|
19
|
|
Inventory liquidation
gains
|
|
(6,031)
|
|
|
—
|
|
|
—
|
|
|
(3,510)
|
|
Inventory valuation
losses
|
|
—
|
|
|
952
|
|
|
18,184
|
|
|
—
|
|
Tax effect of
adjustments to (losses) earnings
|
|
1,139
|
|
|
(146)
|
|
|
(3,941)
|
|
|
903
|
|
Adjusted net (losses)
earnings
|
|
$
|
(781)
|
|
|
$
|
555
|
|
|
$
|
6,902
|
|
|
$
|
1,516
|
|
|
|
|
|
|
|
|
|
|
Adjusted (losses)
earnings per common share
|
|
$
|
(0.18)
|
|
|
$
|
0.13
|
|
|
$
|
1.63
|
|
|
$
|
0.35
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to Net Cash Provided by (Used in)
Operating Activities:
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
(6,613)
|
|
|
$
|
12,732
|
|
|
$
|
(30,459)
|
|
|
$
|
33,748
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
(492)
|
|
|
40
|
|
|
(8,790)
|
|
|
1,474
|
|
Deferred income
taxes
|
|
(1,155)
|
|
|
(178)
|
|
|
1,534
|
|
|
(1,012)
|
|
Provision for doubtful
accounts
|
|
—
|
|
|
4
|
|
|
24
|
|
|
36
|
|
Early retirement and
terminations costs
|
|
431
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Inventory liquidation
gains
|
|
(6,031)
|
|
|
—
|
|
|
—
|
|
|
(3,510)
|
|
Inventory valuation
losses
|
|
—
|
|
|
952
|
|
|
18,184
|
|
|
—
|
|
Changes in assets and
liabilities
|
|
15,726
|
|
|
(8,525)
|
|
|
29,880
|
|
|
(20,776)
|
|
Adjusted cash
flow
|
|
$
|
1,866
|
|
|
$
|
5,025
|
|
|
$
|
10,804
|
|
|
$
|
9,960
|
|
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SOURCE Adams Resources & Energy, Inc.