HOUSTON, Nov. 7, 2018 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company")
today announced its financial results for the three months ended
September 30, 2018.
The Company reported net earnings of $2.0
million, or $0.48 per common
share, on revenues of $467.9 million
for the third quarter of 2018, compared to a net loss of
$3.0 million, or ($0.72) per common share, on revenues of
$295.3 million for the third quarter
of 2017. On an adjusted basis, net earnings were $1.3 million, or $0.30 per common share, for the third quarter of
2018, compared to a net loss of $0.2
million, or ($0.04) per common
share, for the third quarter of 2017.
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.
Third Quarter 2018 Highlights:
- Gross revenues of approximately $467.9
million for the third quarter of 2018 compared to
$295.3 million for the third quarter
of 2017
- Our crude oil marketing subsidiary, GulfMark Energy, Inc.,
marketed approximately 70,635 per day ("bpd") of crude oil during
the third quarter of 2018, compared to 64,104 bpd of crude oil
during the third quarter of 2017
- Cash and cash equivalents increased by 20 percent from
December 31, 2017 levels of $109.4
million to $130.8 million at
September 30, 2018
- $59.6 million of undrawn capacity
under our letter of credit facility at September 30, 2018
- Adjusted cash flow of $4.2
million for the third quarter of 2018 compared to
$2.3 million for the third quarter of
2017
- Approximately 476,703 barrels of crude oil inventory at
September 30, 2018 compared to 198,011 barrels at December 31, 2017
- Dividend of $0.22 per share for
the third quarter of 2018
- No short or long term debt as of September 30, 2018
"During the third quarter of 2018, our Service Transport
business unit continued to generate improved financial and
operating results as our revenue per mile increased 1 percent from
the second quarter of 2018 and 21 percent from the third quarter of
2017," said Townes G. Pressler,
Executive Chairman. "As customer demand continues to be
strong in this segment, improved trucking rates allow improved
hiring and retention of skilled drivers as we continue to provide
dependable superior service to our customers at Service
Transport. We are continuing on schedule with improving the
age of our fleet, with the purchase of 40 new tractors through
September 30, 2018 and commitments to
purchase an additional 61 tractors and 20 trailers by the end of
the first quarter of 2019."
"At our GulfMark business unit, crude oil marketing volumes for
the third quarter of 2018 were consistent with the second quarter
of 2018 and increased 10 percent from the third quarter of 2017,
primarily as a result of increased production in our market
areas. Our overall marketing margins have increased as a
result of the exit of areas with thin margins."
"During the remainder of 2018, we will remain focused on
introducing efficiencies in our crude oil marketing division,
integrating our crude oil gathering company acquisition into our
business, replacing aging tractors and right sizing our tractor and
trailer fleets in both business units, improving company-wide
driver retention and increasing driver count, and placing safety
first in all of our operations. We will continue to explore
synergic growth opportunities in our core businesses, both
organically and in the open market," continued Pressler.
Capital Investments and Dividends
During the third quarter of 2018, the Company recorded
approximately $5.0 million of capital
costs and paid dividends of $0.9
million ($0.22 per
share). The majority of the capital costs relate to the
purchase of tractors in our Service Transport subsidiary.
The Company's Board of Directors also declared a quarterly cash
dividend for the third quarter of 2018 in the amount of
$0.22 per common share, payable on
December 21, 2018 to shareholders of
record as of December 7, 2018.
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 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.
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 and ISO
tank container storage and transportation 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
|
|
Nine Months
Ended
|
|
September 30,
|
|
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
Marketing
|
$
|
453,626
|
|
|
$
|
282,229
|
|
|
$
|
1,266,055
|
|
|
$
|
872,020
|
|
Transportation
|
14,265
|
|
|
13,082
|
|
|
41,509
|
|
|
40,153
|
|
Oil and natural
gas
|
—
|
|
|
—
|
|
|
—
|
|
|
1,427
|
|
Total
revenues
|
467,891
|
|
|
295,311
|
|
|
1,307,564
|
|
|
913,600
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Marketing
|
449,367
|
|
|
277,906
|
|
|
1,250,233
|
|
|
860,567
|
|
Transportation
|
12,412
|
|
|
12,668
|
|
|
36,603
|
|
|
36,681
|
|
Oil and natural
gas
|
—
|
|
|
—
|
|
|
—
|
|
|
951
|
|
General and
administrative
|
1,533
|
|
|
2,787
|
|
|
6,100
|
|
|
6,884
|
|
Depreciation,
depletion and amortization
|
2,340
|
|
|
3,240
|
|
|
7,014
|
|
|
10,772
|
|
Total costs
and expenses
|
465,652
|
|
|
296,601
|
|
|
1,299,950
|
|
|
915,855
|
|
|
|
|
|
|
|
|
|
Operating earnings
(losses)
|
2,239
|
|
|
(1,290)
|
|
|
7,614
|
|
|
(2,255)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Loss on
deconsolidation of subsidiary
|
—
|
|
|
(1,870)
|
|
|
—
|
|
|
(3,505)
|
|
Impairment of
investment in unconsolidated affiliate
|
—
|
|
|
(2,500)
|
|
|
—
|
|
|
(2,500)
|
|
Interest
income
|
601
|
|
|
370
|
|
|
1,486
|
|
|
789
|
|
Interest
expense
|
(26)
|
|
|
(8)
|
|
|
(60)
|
|
|
(10)
|
|
Total other
income (expense), net
|
575
|
|
|
(4,008)
|
|
|
1,426
|
|
|
(5,226)
|
|
|
|
|
|
|
|
|
|
(Losses) earnings
before income taxes
|
2,814
|
|
|
(5,298)
|
|
|
9,040
|
|
|
(7,481)
|
|
Income tax benefit
(provision)
|
(779)
|
|
|
2,265
|
|
|
(2,247)
|
|
|
3,306
|
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,035
|
|
|
$
|
(3,033)
|
|
|
$
|
6,793
|
|
|
$
|
(4,175)
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share:
|
|
|
|
|
|
|
|
Basic net (losses)
earnings per common share
|
$
|
0.48
|
|
|
$
|
(0.72)
|
|
|
$
|
1.61
|
|
|
$
|
(0.99)
|
|
Diluted net (losses)
earnings per common share
|
$
|
0.48
|
|
|
$
|
(0.72)
|
|
|
$
|
1.61
|
|
|
$
|
(0.99)
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
$
|
0.22
|
|
|
$
|
0.22
|
|
|
$
|
0.66
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands,
except share data)
|
|
|
September 30,
|
|
December 31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
130,774
|
|
|
$
|
109,393
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
108,662
|
|
|
121,353
|
|
Inventory
|
34,760
|
|
|
12,192
|
|
Derivative
assets
|
263
|
|
|
166
|
|
Income tax
receivable
|
—
|
|
|
1,317
|
|
Prepayments and other
current assets
|
1,271
|
|
|
1,264
|
|
Total current
assets
|
275,730
|
|
|
245,685
|
|
|
|
|
|
Property and
equipment, net
|
30,918
|
|
|
29,362
|
|
Investment in
unconsolidated affiliate
|
425
|
|
|
425
|
|
Cash deposits and
other
|
6,239
|
|
|
7,232
|
|
Total
assets
|
$
|
313,312
|
|
|
$
|
282,704
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
146,895
|
|
|
$
|
124,706
|
|
Accounts payable –
related party
|
6
|
|
|
5
|
|
Derivative
liabilities
|
247
|
|
|
145
|
|
Current portion of
capital lease obligations
|
568
|
|
|
338
|
|
Other current
liabilities
|
8,219
|
|
|
4,404
|
|
Total current
liabilities
|
155,935
|
|
|
129,598
|
|
Other long-term
liabilities:
|
|
|
|
Asset retirement
obligations
|
1,414
|
|
|
1,273
|
|
Capital lease
obligations
|
2,041
|
|
|
1,351
|
|
Deferred taxes and
other liabilities
|
2,655
|
|
|
3,363
|
|
Total
liabilities
|
162,045
|
|
|
135,585
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity
|
151,267
|
|
|
147,119
|
|
Total liabilities and
shareholders' equity
|
$
|
313,312
|
|
|
$
|
282,704
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net (losses)
earnings
|
$
|
6,793
|
|
|
$
|
(4,175)
|
|
Adjustments to
reconcile net (losses) earnings to net cash
|
|
|
|
provided by operating
activities:
|
|
|
|
Depreciation, depletion and amortization
|
7,014
|
|
|
10,772
|
|
Gains on
sales of property
|
(890)
|
|
|
(347)
|
|
Impairment of oil and natural gas properties
|
—
|
|
|
3
|
|
Provision for doubtful accounts
|
(95)
|
|
|
(9)
|
|
Stock-based compensation expense
|
144
|
|
|
—
|
|
Deferred
income taxes
|
(685)
|
|
|
(1,198)
|
|
Net
change in fair value contracts
|
5
|
|
|
48
|
|
Impairment of investment in
unconsolidated affiliate
|
—
|
|
|
2,500
|
|
Loss on
deconsolidation of subsidiary
|
—
|
|
|
3,505
|
|
Changes in assets
and liabilities:
|
|
|
|
Accounts
receivable
|
12,830
|
|
|
5,228
|
|
Accounts
receivable/payable, affiliates
|
1
|
|
|
266
|
|
Inventories
|
(22,568)
|
|
|
(9,328)
|
|
Income tax
receivable
|
1,317
|
|
|
(1,412)
|
|
Prepayments and other
current assets
|
(7)
|
|
|
927
|
|
Accounts
payable
|
22,254
|
|
|
9,482
|
|
Accrued
liabilities
|
3,815
|
|
|
465
|
|
Other
|
(103)
|
|
|
(240)
|
|
Net cash provided by
operating activities
|
29,825
|
|
|
16,487
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Property and equipment
additions
|
(7,756)
|
|
|
(2,465)
|
|
Proceeds from property
sales
|
1,314
|
|
|
430
|
|
Insurance and state
collateral refunds
|
1,070
|
|
|
439
|
|
Net cash used in
investing activities
|
(5,372)
|
|
|
(1,596)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Principal repayments
of capital lease obligations
|
(288)
|
|
|
—
|
|
Dividends paid on
common stock
|
(2,784)
|
|
|
(2,784)
|
|
Net cash used in
financing activities
|
(3,072)
|
|
|
(2,784)
|
|
|
|
|
|
Increase in cash
and cash equivalents
|
21,381
|
|
|
12,107
|
|
Cash and cash
equivalents at beginning of period
|
109,393
|
|
|
87,342
|
|
Cash and cash
equivalents at end of period
|
$
|
130,774
|
|
|
$
|
99,449
|
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reconciliation of
Adjusted Cash Flow to
Net
(Losses) Earnings:
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,035
|
|
|
$
|
(3,033)
|
|
|
$
|
6,793
|
|
|
$
|
(4,175)
|
|
Income tax benefit
(provision)
|
779
|
|
|
(2,265)
|
|
|
2,247
|
|
|
(3,306)
|
|
Depreciation,
depletion and amortization
|
2,340
|
|
|
3,240
|
|
|
7,014
|
|
|
10,772
|
|
Gains on sales of
property
|
(444)
|
|
|
(218)
|
|
|
(890)
|
|
|
(347)
|
|
Impairment of oil and
natural gas properties
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Loss on
deconsolidation of subsidiary
|
—
|
|
|
1,870
|
|
|
—
|
|
|
3,505
|
|
Stock-based
compensation expense
|
141
|
|
|
—
|
|
|
144
|
|
|
—
|
|
Impairment of
investment in unconsolidated affiliate
|
—
|
|
|
2,500
|
|
|
—
|
|
|
2,500
|
|
Inventory liquidation
gains
|
(60)
|
|
|
(1,954)
|
|
|
(2,535)
|
|
|
—
|
|
Inventory valuation
losses
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
Net change in fair
value contracts
|
8
|
|
|
748
|
|
|
5
|
|
|
48
|
|
Costs of voluntary
early retirement program
|
—
|
|
|
1,435
|
|
|
—
|
|
|
1,435
|
|
Insurance proceeds
for Hurricane Harvey claims
|
(610)
|
|
|
—
|
|
|
(610)
|
|
|
—
|
|
Legal and other
accrual reversals
|
—
|
|
|
—
|
|
|
—
|
|
|
(840)
|
|
Adjusted cash
flow
|
$
|
4,189
|
|
|
$
|
2,323
|
|
|
$
|
12,168
|
|
|
$
|
9,704
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
|
|
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Adjusted net
(losses) earnings and (losses)
earnings per common share (Non-GAAP):
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
2,035
|
|
|
$
|
(3,033)
|
|
|
$
|
6,793
|
|
|
$
|
(4,175)
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Loss on
deconsolidation of subsidiary
|
—
|
|
|
1,870
|
|
|
—
|
|
|
3,505
|
|
Impairment of
investment in unconsolidated affiliate
|
—
|
|
|
2,500
|
|
|
—
|
|
|
2,500
|
|
Gains on sales of
property
|
(444)
|
|
|
(218)
|
|
|
(890)
|
|
|
(347)
|
|
Impairment of oil and
natural gas properties
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Stock-based
compensation expense
|
141
|
|
|
—
|
|
|
144
|
|
|
—
|
|
Costs of voluntary
early retirement program
|
—
|
|
|
1,435
|
|
|
—
|
|
|
1,435
|
|
Net change in fair
value of contracts
|
8
|
|
|
748
|
|
|
5
|
|
|
48
|
|
Inventory liquidation
gains
|
(60)
|
|
|
(1,954)
|
|
|
(2,535)
|
|
|
—
|
|
Inventory valuation
losses
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
Legal and other
accrual reversals
|
—
|
|
|
—
|
|
|
—
|
|
|
(840)
|
|
Insurance proceeds
for Hurricane Harvey claims
|
(610)
|
|
|
—
|
|
|
(610)
|
|
|
—
|
|
Tax effect of
adjustments to (losses) earnings
|
203
|
|
|
(1,533)
|
|
|
817
|
|
|
(2,245)
|
|
Adjusted net
(losses) earnings
|
$
|
1,273
|
|
|
$
|
(185)
|
|
|
$
|
3,724
|
|
|
$
|
(7)
|
|
|
|
|
|
|
|
|
|
Adjusted (losses)
earnings per common share
|
$
|
0.30
|
|
|
$
|
(0.04)
|
|
|
$
|
0.88
|
|
|
$
|
—
|
|
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SOURCE Adams Resources & Energy, Inc.