HOUSTON, Aug. 9, 2023
/PRNewswire/ -- 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
June 30, 2023. The Company also
declared a quarterly cash dividend of $0.24 per common share.
Q2 2023 Financial Summary
- Total revenue of $624.8 million,
versus $992.1 million for the second
quarter of 2022.
- Net earnings of $0.8 million, or
$0.32 per diluted common share,
compared to a net loss of $2.0
million, or a loss of $0.79
per common share for the first quarter of 2023 and net earnings of
$2.5 million, or $0.56 per diluted common share for the second
quarter of 2022.
- Net cash used in operating activities of $27.3 million for the second quarter of 2023, a
decrease of $2.7 million in net cash
used in operating activities 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 $7.1
million for the second quarter of 2023, compared to
$4.7 million for the first quarter of
2023 and $9.0 million in the
prior-year.
- Cash and cash equivalents were $9.0
million as of June 30, 2023,
versus $20.5 million at December 31, 2022, primarily due to the timing of
receipts and early payments from crude oil customers.
- Liquidity of $48.6 million at
June 30, 2023.
- Paid dividends totaling $0.24 per
share during the second 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 92,152 barrels per day ("bpd") of crude oil
during the second quarter of 2023, compared to 94,876 bpd during
the second quarter of 2022 and 94,030 bpd during the first quarter
of 2023.
- The collective fleet of Service Transport Company ("Service
Transport"), Adams' liquid chemicals, pressurized gases, asphalt
and dry bulk transportation subsidiary, traveled 6.30 million miles
during the second quarter of 2023, versus 6.86 million miles during
the second quarter of 2022 and 6.55 million miles during the first
quarter of 2023.
- Adams' crude oil pipeline and storage segment, which includes
the Victoria Express Pipeline System ("VEX Pipeline System"),
throughput was 8,560 bpd for the second quarter of 2023,
compared to 13,281 bpd for the second quarter of 2022 and 10,088
bpd for the first quarter of 2023, and terminalling volumes were
10,785 bpd for the second quarter of 2023, compared to 13,704 bpd
in the second quarter of 2022, and 10,395 bpd for the first 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 369,738 barrels of crude oil
inventory at June 30, 2023, compared
to 328,562 barrels at December 31,
2022.
"Our second quarter performance contains multiple bright spots
in a challenging environment, including our crude oil marketing
segment posting a sequential increase in operating income despite a
number of headwinds," said Kevin J.
Roycraft, Chief Executive Officer of Adams. "Adjusted
cash flows also improved sequentially as each segment contributed
positively, and we returned to positive net earnings for the
quarter."
Capital Investments and Dividends
During the second quarter of 2023, the Company had capital
expenditures of $4.0 million
primarily for the previously announced purchase of land for the
Dayton project, construction of the pipeline connection, three
tractors, one trailer 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
second quarter of 2023 of $0.24 per
common share, payable on September 22,
2023, to shareholders of record as of September 8, 2023.
Outlook
"We believe the challenges facing our GulfMark and Service
Transport segments have reached their lowest point, and we expect a
more gradual recovery across our business over the remainder of the
year and into 2024," Mr. Roycraft continued.
"Our Company remains in a very strong financial position to
withstand the continued macroeconomic challenges facing our
industries and is poised to deliver meaningful performance when our
key markets begin to improve. This plus 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) nd 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 second
quarter results on Thursday, August 10,
2023 at 9:00 a.m. ET
(8:00 a.m. CT). To participate in the
live conference call, dial 1-877-344-7529 (Toll-Free) within the
U.S., or 1-412-317-0088 (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 1-877-317-6789
(Toll-Free) within the U.S., or 1-412-317-6789 (Toll-Required)
outside the U.S. and entering code 6520493.
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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$ 585,272
|
|
$
962,516
|
|
$
1,193,748
|
|
$
1,710,071
|
Transportation
|
|
24,452
|
|
29,534
|
|
50,897
|
|
56,224
|
Pipeline and
storage
|
|
249
|
|
—
|
|
249
|
|
—
|
Logistics and
repurposing
|
|
14,793
|
|
—
|
|
30,034
|
|
—
|
Total
revenues
|
|
624,766
|
|
992,050
|
|
1,274,928
|
|
1,766,295
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
579,753
|
|
955,511
|
|
1,184,247
|
|
1,691,158
|
Transportation
|
|
20,260
|
|
23,674
|
|
42,673
|
|
44,539
|
Pipeline and
storage
|
|
753
|
|
606
|
|
1,691
|
|
1,160
|
Logistics and
repurposing
|
|
13,202
|
|
—
|
|
26,327
|
|
—
|
General and
administrative
|
|
1,715
|
|
4,211
|
|
6,487
|
|
8,229
|
Depreciation and
amortization
|
|
7,303
|
|
5,088
|
|
14,353
|
|
10,101
|
Total costs and
expenses
|
|
622,986
|
|
989,090
|
|
1,275,778
|
|
1,755,187
|
|
|
|
|
|
|
|
|
|
Operating earnings
(losses)
|
|
1,780
|
|
2,960
|
|
(850)
|
|
11,108
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
570
|
|
303
|
|
774
|
|
327
|
Interest
expense
|
|
(802)
|
|
(136)
|
|
(1,498)
|
|
(250)
|
Total other (expense)
income, net
|
|
(232)
|
|
167
|
|
(724)
|
|
77
|
|
|
|
|
|
|
|
|
|
Earnings (Losses)
before income taxes
|
|
1,548
|
|
3,127
|
|
(1,574)
|
|
11,185
|
Income tax (provision)
benefit
|
|
(721)
|
|
(651)
|
|
402
|
|
(2,619)
|
|
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
|
$
827
|
|
$
2,476
|
|
$
(1,172)
|
|
$
8,566
|
|
|
|
|
|
|
|
|
|
Earnings (Losses)
per share:
|
|
|
|
|
|
|
|
|
Basic net earnings
(losses) per common share
|
|
$
0.33
|
|
$
0.57
|
|
$
(0.46)
|
|
$
1.96
|
Diluted net earnings
(losses) per common share
|
|
$
0.32
|
|
$
0.56
|
|
$
(0.46)
|
|
$
1.95
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
8,974
|
|
$
20,532
|
Restricted
cash
|
|
8,784
|
|
10,535
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
158,433
|
|
189,039
|
Inventory
|
|
26,523
|
|
26,919
|
Income tax
receivable
|
|
469
|
|
—
|
Prepayments and other
current assets
|
|
2,608
|
|
3,118
|
Total current
assets
|
|
205,791
|
|
250,143
|
|
|
|
|
|
Property and equipment,
net
|
|
111,834
|
|
106,425
|
Operating lease
right-of-use assets, net
|
|
6,783
|
|
7,720
|
Intangible assets,
net
|
|
8,837
|
|
9,745
|
Goodwill
|
|
6,673
|
|
6,428
|
Other assets
|
|
3,564
|
|
3,698
|
Total
assets
|
|
$
343,482
|
|
$
384,159
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
162,787
|
|
$
204,391
|
Accounts payable –
related party
|
|
—
|
|
31
|
Derivative
liabilities
|
|
30
|
|
330
|
Current portion of
finance lease obligations
|
|
6,444
|
|
4,382
|
Current portion of
operating lease liabilities
|
|
2,802
|
|
2,712
|
Current portion of
long-term debt
|
|
2,500
|
|
—
|
Other current
liabilities
|
|
14,011
|
|
19,214
|
Total current
liabilities
|
|
188,574
|
|
231,060
|
Other long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
|
20,625
|
|
24,375
|
Asset retirement
obligations
|
|
2,650
|
|
2,459
|
Finance lease
obligations
|
|
20,693
|
|
12,085
|
Operating lease
liabilities
|
|
3,986
|
|
5,007
|
Deferred taxes and
other liabilities
|
|
15,233
|
|
15,996
|
Total
liabilities
|
|
251,761
|
|
290,982
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity
|
|
91,721
|
|
93,177
|
Total liabilities and
shareholders' equity
|
|
$
343,482
|
|
$
384,159
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
$
827
|
|
$
2,476
|
|
$
(1,172)
|
|
$
8,566
|
Adjustments to
reconcile net earnings (losses) to net cash
|
|
|
|
|
|
|
|
used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
7,303
|
|
5,088
|
|
14,353
|
|
10,101
|
Gains on sales of
property
|
(735)
|
|
(447)
|
|
(766)
|
|
(938)
|
Provision for doubtful
accounts
|
(7)
|
|
(3)
|
|
(10)
|
|
(8)
|
Stock-based
compensation expense
|
372
|
|
263
|
|
655
|
|
458
|
Change in contingent
consideration liability
|
(2,566)
|
|
—
|
|
(2,566)
|
|
—
|
Deferred income
taxes
|
654
|
|
(893)
|
|
(770)
|
|
(332)
|
Net change in fair
value contracts
|
187
|
|
(610)
|
|
(300)
|
|
(630)
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(300)
|
|
(55,177)
|
|
30,616
|
|
(129,837)
|
Accounts
receivable/payable, affiliates
|
—
|
|
(48)
|
|
(31)
|
|
—
|
Inventories
|
(4,248)
|
|
(18,899)
|
|
396
|
|
(42,339)
|
Income tax
receivable
|
(469)
|
|
5,140
|
|
(469)
|
|
6,424
|
Prepayments and other
current assets
|
420
|
|
(302)
|
|
510
|
|
382
|
Accounts
payable
|
(28,953)
|
|
29,933
|
|
(41,606)
|
|
121,144
|
Accrued
liabilities
|
(50)
|
|
3,389
|
|
(2,564)
|
|
2,614
|
Other
|
250
|
|
39
|
|
116
|
|
217
|
Net cash used in
operating activities
|
(27,315)
|
|
(30,051)
|
|
(3,608)
|
|
(24,178)
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Property and equipment
additions
|
(4,008)
|
|
(1,089)
|
|
(5,908)
|
|
(4,783)
|
Proceeds from property
sales
|
1,003
|
|
518
|
|
1,444
|
|
1,374
|
Net cash used in
investing activities
|
(3,005)
|
|
(571)
|
|
(4,464)
|
|
(3,409)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Borrowings under Credit
Agreement
|
20,000
|
|
30,000
|
|
38,000
|
|
30,000
|
Repayments under Credit
Agreement
|
(20,625)
|
|
(30,000)
|
|
(39,250)
|
|
(30,000)
|
Principal repayments of
finance lease obligations
|
(1,671)
|
|
(1,167)
|
|
(3,247)
|
|
(2,306)
|
Net proceeds from sale
of equity
|
—
|
|
283
|
|
549
|
|
283
|
Dividends paid on
common stock
|
(608)
|
|
(1,058)
|
|
(1,289)
|
|
(2,126)
|
Net cash used in
financing activities
|
(2,904)
|
|
(1,942)
|
|
(5,237)
|
|
(4,149)
|
|
|
|
|
|
|
|
|
Decrease in cash and
cash equivalents, including
restricted cash
|
(33,224)
|
|
(32,564)
|
|
(13,309)
|
|
(31,736)
|
Cash and cash
equivalents, including restricted cash,
at
beginning of period
|
50,982
|
|
108,145
|
|
31,067
|
|
107,317
|
Cash and cash
equivalents, including restricted cash,
at end
of period
|
$
17,758
|
|
$
75,581
|
|
$
17,758
|
|
$
75,581
|
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,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Adjusted Cash Flow to
|
|
|
|
|
|
|
|
|
Net Earnings
(Losses):
|
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
|
$
827
|
|
$
2,476
|
|
$
(1,172)
|
|
$
8,566
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
721
|
|
651
|
|
(402)
|
|
2,619
|
Depreciation and
amortization
|
|
7,303
|
|
5,088
|
|
14,353
|
|
10,101
|
Gains on sales of
property
|
|
(735)
|
|
(447)
|
|
(766)
|
|
(938)
|
Stock-based
compensation expense
|
|
372
|
|
263
|
|
655
|
|
458
|
Change in contingent
consideration liability
|
|
(2,566)
|
|
—
|
|
(2,566)
|
|
—
|
Inventory liquidation
gains
|
|
—
|
|
—
|
|
—
|
|
(7,184)
|
Inventory valuation
losses
|
|
951
|
|
1,533
|
|
1,968
|
|
—
|
Net change in fair
value contracts
|
|
187
|
|
(610)
|
|
(300)
|
|
(630)
|
Adjusted cash
flow
|
|
$
7,060
|
|
$
8,954
|
|
$
11,770
|
|
$
12,992
|
Adjusted net
earnings (losses) and earnings
|
|
|
|
|
|
|
|
|
(losses) per common
share (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
|
$
827
|
|
$
2,476
|
|
$
(1,172)
|
|
$
8,566
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gains on sales of
property
|
|
(735)
|
|
(447)
|
|
(766)
|
|
(938)
|
Stock-based
compensation expense
|
|
372
|
|
263
|
|
655
|
|
458
|
Change in contingent
consideration liability
|
|
(2,566)
|
|
—
|
|
(2,566)
|
|
—
|
Net change in fair
value contracts
|
|
187
|
|
(610)
|
|
(300)
|
|
(630)
|
Inventory liquidation
gains
|
|
—
|
|
—
|
|
—
|
|
(7,184)
|
Inventory valuation
losses
|
|
951
|
|
1,533
|
|
1,968
|
|
—
|
Tax effect of
adjustments to earnings (losses)
|
|
376
|
|
(155)
|
|
212
|
|
1,742
|
Adjusted net (losses)
earnings
|
|
$
(588)
|
|
$
3,060
|
|
$
(1,969)
|
|
$
2,014
|
|
|
|
|
|
|
|
|
|
Adjusted (losses)
earnings per common share
|
|
$
(0.23)
|
|
$
0.69
|
|
$
(0.78)
|
|
$
0.46
|
Reconciliation of
Adjusted Cash Flow to Net Cash
|
|
|
|
|
|
|
Used in
Operating Activities:
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
$
(27,315)
|
|
$
(30,051)
|
|
$
(3,608)
|
|
$
(24,178)
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
721
|
|
651
|
|
(402)
|
|
2,619
|
Deferred income
taxes
|
|
(654)
|
|
893
|
|
770
|
|
332
|
Provision for doubtful
accounts
|
|
7
|
|
3
|
|
10
|
|
8
|
Inventory liquidation
gains
|
|
—
|
|
—
|
|
—
|
|
(7,184)
|
Inventory valuation
losses
|
|
951
|
|
1,533
|
|
1,968
|
|
—
|
Changes in assets and
liabilities
|
|
33,350
|
|
35,925
|
|
13,032
|
|
41,395
|
Adjusted cash
flow
|
|
$
7,060
|
|
$
8,954
|
|
$
11,770
|
|
$
12,992
|
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SOURCE Adams Resources & Energy, Inc.