HOUSTON, Aug. 11,
2022 /PRNewswire/ -- Adams Resources & Energy,
Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announces
operational and financial results for the three months ended
June 30, 2022 and declares a
quarterly cash dividend of $0.24 per
common share.
Q2 2022 Financial Highlights
- Net earnings of $2.5 million, or
$0.56 per diluted common share, on
revenues of $992.1 million for the
second quarter of 2022, compared to net earnings of $4.7 million, or $1.10 per diluted common share, on revenues of
$486.7 million for the second quarter
of 2021.
- Net cash used in operating activities was $30.1 million, versus net cash generated by
operating activities of $29.1 million
for the second quarter of 2021. The decrease was primarily driven
by an increase in the market price of crude oil and an increase in
crude oil inventory and changes in working capital.
- Adjusted net earnings of $3.1
million, or $0.69 per diluted
common share, compared to adjusted net earnings of $1.9 million, or $0.44 per diluted common share, for the second
quarter of 2021.
- Adjusted cash flow of $9.0
million versus $7.4 million
for the second quarter of 2021.
Adjusted net earnings (losses), adjusted earnings (losses)
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 later in this
release.
Additional Q2 2022 Highlights
- Cash and cash equivalents position was $67.7 million at June 30,
2022, versus $97.8 million at
December 31, 2021, primarily due to
an increase in crude oil inventory barrels, due in part to timing
of customer deliveries, together with an increase in crude oil
prices.
- Enhanced financial liquidity of $102.0
million at June 30, 2022,
including cash and cash equivalents and $34.3 million available under the Company's
$40.0 million Credit Agreement.
- Adam's crude oil marketing subsidiary, GulfMark Energy, Inc.
("GulfMark"), marketed 94,876 barrels per day ("bpd") of crude oil,
compared to 89,585 bpd during the second quarter of 2021 and 90,385
bpd during the first quarter of 2022. GulfMark held 573,036 barrels
of crude oil inventory at June 30,
2022, compared to 259,489 barrels at December 31, 2021.
- The collective fleet of Service Transport Company ("Service
Transport"), Adams' liquid chemicals, pressurized gases, asphalt
and dry bulk transportation subsidiary, traveled 6.86 million miles
versus 7.25 million miles during the second quarter of 2021 and
6.80 million miles during the first quarter of 2022.
- Adams' crude oil pipeline and storage segment, which was
established following the purchase of the Victoria Express Pipeline
System ("VEX Pipeline System") in October
2020, further expanded its scope of operations. Pipeline
throughput increased to 13,281 bpd from 7,876 bpd for the second
quarter of 2021 and 10,486 bpd for the first quarter of 2022, and
terminalling volumes grew to 13,704 bpd from 8,106 bpd in the
second quarter of 2021 and 10,948 bpd for the first quarter of
2022.
Kevin J. Roycraft, Adams' Chief
Executive Officer, said, "We are delighted to report continued
momentum through the second quarter, resulting in a strong first
half of 2022 both operationally and financially. All three of
our segments made important progress on their strategic initiatives
designed to sustain profitability and grow their respective
businesses for the long-term benefit of our shareholders. I
want to thank all of our team members for their steadfast
dedication to providing our customers with a safe, efficient and
best-in-class service offering."
Capital Investments and Dividends
During the second quarter of 2022, the Company spent capital of
$1.1 million for tractors, trailers
and other field equipment. In addition, Adams paid dividends
of $1.1 million, or $0.24 per common
share.
As part of Adams' on-going capital allocation strategy, the
Board of Directors has declared a quarterly cash dividend for the
second quarter of 2022 of $0.24 per
common share, payable on September 23,
2022, to shareholders of record as of September 9, 2022. Adams' has consistently
paid a dividend since 1994.
Outlook
Mr. Roycraft concluded, "We look forward to further executing
our strategic plan to drive increased efficiencies across the
entire organization. We continue to have a strong financial
position, which includes a liquidity position of more than
$102 million at the end of this
year's second quarter. As in the past, we will continue to
leverage our significant operational expertise and financial
flexibility to execute on opportunities designed to prudently grow
our business. We remain laser focused on providing
significant long-term value for our shareholders, demonstrated by
the regular return on capital through our consistent payment of
quarterly cash dividends."
Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes 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. The non-GAAP
financial measures are defined and reconciled in the financial
tables below.
About Adams Resources & Energy, Inc.
Adams Resources & Energy, Inc. is engaged in crude oil
marketing, transportation, terminalling and storage and tank truck
transportation of liquid chemicals and dry bulk through its
subsidiaries, GulfMark Energy, Inc., Service Transport Company,
Victoria Express Pipeline, LLC and GulfMark Terminals, LLC.
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. 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
Gary Guyton or Steven
Hooser
Three Part Advisors
(214) 442-0016
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$
962,516
|
|
$
463,092
|
|
$
1,710,071
|
|
$
767,115
|
Transportation
|
|
29,534
|
|
23,497
|
|
56,224
|
|
44,732
|
Pipeline and
storage
|
|
—
|
|
155
|
|
—
|
|
388
|
Total
revenues
|
|
992,050
|
|
486,744
|
|
1,766,295
|
|
812,235
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
955,511
|
|
453,081
|
|
1,691,158
|
|
748,288
|
Transportation
|
|
23,674
|
|
19,078
|
|
44,539
|
|
36,538
|
Pipeline and
storage
|
|
606
|
|
488
|
|
1,160
|
|
1,032
|
General and
administrative
|
|
4,211
|
|
2,961
|
|
8,229
|
|
6,337
|
Depreciation and
amortization
|
|
5,088
|
|
4,801
|
|
10,101
|
|
9,854
|
Total costs and
expenses
|
|
989,090
|
|
480,409
|
|
1,755,187
|
|
802,049
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
2,960
|
|
6,335
|
|
11,108
|
|
10,186
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
303
|
|
62
|
|
327
|
|
196
|
Interest
expense
|
|
(136)
|
|
(204)
|
|
(250)
|
|
(424)
|
Total other (expense)
income, net
|
|
167
|
|
(142)
|
|
77
|
|
(228)
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
3,127
|
|
6,193
|
|
11,185
|
|
9,958
|
Income tax
provision
|
|
(651)
|
|
(1,484)
|
|
(2,619)
|
|
(2,441)
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
2,476
|
|
$
4,709
|
|
$
8,566
|
|
$
7,517
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
$
0.57
|
|
$
1.11
|
|
$
1.96
|
|
$
1.77
|
Diluted net earnings
per common share
|
|
$
0.56
|
|
$
1.10
|
|
$
1.95
|
|
$
1.76
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
0.24
|
|
$
0.24
|
|
$
0.48
|
|
$
0.48
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
67,728
|
|
$
97,825
|
Restricted
cash
|
|
7,853
|
|
9,492
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
267,634
|
|
137,789
|
Accounts receivable –
related party
|
|
2
|
|
2
|
Inventory
|
|
61,281
|
|
18,942
|
Derivative
assets
|
|
1,501
|
|
347
|
Income tax
receivable
|
|
—
|
|
6,424
|
Prepayments and other
current assets
|
|
2,007
|
|
2,389
|
Total current
assets
|
|
408,006
|
|
273,210
|
|
|
|
|
|
Property and equipment,
net
|
|
84,528
|
|
88,036
|
Operating lease
right-of-use assets, net
|
|
6,437
|
|
7,113
|
Intangible assets,
net
|
|
2,938
|
|
3,317
|
Other assets
|
|
2,714
|
|
3,027
|
Total
assets
|
|
$
504,623
|
|
$
374,703
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
289,381
|
|
$
168,224
|
Derivative
liabilities
|
|
848
|
|
324
|
Current portion of
finance lease obligations
|
|
4,308
|
|
3,663
|
Current portion of
operating lease liabilities
|
|
2,228
|
|
2,178
|
Other current
liabilities
|
|
14,207
|
|
11,622
|
Total current
liabilities
|
|
310,972
|
|
186,011
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
2,406
|
|
2,376
|
Finance lease
obligations
|
|
8,609
|
|
9,672
|
Operating lease
liabilities
|
|
4,205
|
|
4,938
|
Deferred taxes and
other liabilities
|
|
10,979
|
|
11,320
|
Total
liabilities
|
|
337,171
|
|
214,317
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
167,452
|
|
160,386
|
Total liabilities and
shareholders' equity
|
|
$
504,623
|
|
$
374,703
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
|
Net earnings
|
|
$
8,566
|
|
$
7,517
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
|
(used in) provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
10,101
|
|
9,854
|
Gains on sales of
property
|
|
(938)
|
|
(265)
|
Provision for doubtful
accounts
|
|
(8)
|
|
(2)
|
Stock-based
compensation expense
|
|
458
|
|
417
|
Deferred income
taxes
|
|
(332)
|
|
(1,636)
|
Net change in fair
value contracts
|
|
(630)
|
|
(25)
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(129,837)
|
|
(26,109)
|
Accounts
receivable/payable, affiliates
|
|
—
|
|
(4)
|
Inventories
|
|
(42,339)
|
|
(10,376)
|
Income tax
receivable
|
|
6,424
|
|
7,442
|
Prepayments and other
current assets
|
|
382
|
|
842
|
Accounts
payable
|
|
121,144
|
|
63,831
|
Accrued
liabilities
|
|
2,614
|
|
1,235
|
Other
|
|
217
|
|
(614)
|
Net cash (used in)
provided by operating activities
|
|
(24,178)
|
|
52,107
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(4,783)
|
|
(3,602)
|
Proceeds from property
sales
|
|
1,374
|
|
1,316
|
Net cash used in
provided by investing activities
|
|
(3,409)
|
|
(2,286)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Borrowings under Credit
Agreement
|
|
30,000
|
|
8,000
|
Repayments under Credit
Agreement
|
|
(30,000)
|
|
—
|
Principal repayments of
finance lease obligations
|
|
(2,306)
|
|
(2,123)
|
Payment for financed
portion of VEX acquisition
|
|
—
|
|
(10,000)
|
Net proceeds from sale
of equity
|
|
283
|
|
—
|
Dividends paid on
common stock
|
|
(2,126)
|
|
(2,062)
|
Net cash used in
financing activities
|
|
(4,149)
|
|
(6,185)
|
|
|
|
|
|
(Decrease) Increase
in cash and cash equivalents, including restricted
cash
|
|
(31,736)
|
|
43,636
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
107,317
|
|
52,065
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
75,581
|
|
$
95,701
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted Cash Flow to Net
Earnings:
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
2,476
|
|
$
4,709
|
|
$
8,566
|
|
$
7,517
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
651
|
|
1,484
|
|
2,619
|
|
2,441
|
Depreciation and
amortization
|
|
5,088
|
|
4,801
|
|
10,101
|
|
9,854
|
Gains on sales of
property
|
|
(447)
|
|
(182)
|
|
(938)
|
|
(265)
|
Stock-based
compensation expense
|
|
263
|
|
232
|
|
458
|
|
417
|
Inventory liquidation
gains
|
|
—
|
|
(3,650)
|
|
(7,184)
|
|
(10,593)
|
Inventory valuation
losses
|
|
1,533
|
|
—
|
|
—
|
|
—
|
Net change in fair
value contracts
|
|
(610)
|
|
(4)
|
|
(630)
|
|
(25)
|
Adjusted cash
flow
|
|
$
8,954
|
|
$
7,390
|
|
$
12,992
|
|
$
9,346
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Adjusted net
earnings (losses) and earnings
|
|
|
|
|
|
|
|
|
(losses) per common
share (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
2,476
|
|
$
4,709
|
|
$
8,566
|
|
$
7,517
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gains on sales of
property
|
|
(447)
|
|
(182)
|
|
(938)
|
|
(265)
|
Stock-based
compensation expense
|
|
263
|
|
232
|
|
458
|
|
417
|
Net change in fair
value contracts
|
|
(610)
|
|
(4)
|
|
(630)
|
|
(25)
|
Inventory liquidation
gains
|
|
—
|
|
(3,650)
|
|
(7,184)
|
|
(10,593)
|
Inventory valuation
losses
|
|
1,533
|
|
—
|
|
—
|
|
—
|
Tax effect of
adjustments to earnings (losses)
|
|
(155)
|
|
757
|
|
1,742
|
|
2,197
|
Adjusted net earnings
(losses)
|
|
$
3,060
|
|
$
1,862
|
|
$
2,014
|
|
$
(752)
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(losses) per common share
|
|
$
0.69
|
|
$
0.44
|
|
$
0.46
|
|
$
(0.19)
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted Cash Flow to Net Cash
(Used
in) Provided by Operating Activities:
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
$
(30,051)
|
|
$
29,106
|
|
$
(24,178)
|
|
$
52,107
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
651
|
|
1,484
|
|
2,619
|
|
2,441
|
Deferred income
taxes
|
|
893
|
|
807
|
|
332
|
|
1,636
|
Provision for doubtful
accounts
|
|
3
|
|
1
|
|
8
|
|
2
|
Inventory liquidation
gains
|
|
—
|
|
(3,650)
|
|
(7,184)
|
|
(10,593)
|
Inventory valuation
losses
|
|
1,533
|
|
—
|
|
—
|
|
—
|
Changes in assets and
liabilities
|
|
35,925
|
|
(20,358)
|
|
41,395
|
|
(36,247)
|
Adjusted cash
flow
|
|
$
8,954
|
|
$
7,390
|
|
$
12,992
|
|
$
9,346
|
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SOURCE Adams Resources & Energy, Inc.