HOUSTON, Nov. 8, 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 September 30,
2023. The Company also declared a quarterly cash dividend of
$0.24 per common share.
Q3 2023 Financial Summary
- Total revenue of $760.6 million,
versus $852.9 million for the third
quarter of 2022.
- Net earnings of $2.3 million, or
$0.88 per diluted common share,
compared to earnings of $0.8 million,
or $0.32 per common share for the
second quarter of 2023 and net earnings of $2.2 million, or $0.50 per diluted common share for the third
quarter of 2022.
- Net cash provided by operating activities of $11.4 million for the third quarter of 2023, a
decrease of $28.6 million 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 $4.8
million for the third quarter of 2023, compared to
$7.1 million for the second quarter
of 2023 and $12.6 million in the
prior-year.
- Cash and cash equivalents were $16.3
million as of September 30,
2023, versus $9.0 million at
June 30, 2023, primarily due to the
timing of receipts and early payments from crude oil
customers.
- Liquidity of $55.9 million at
September 30, 2023, versus
$48.6 million at June 30, 2023.
- Paid dividends totaling $0.24 per
share during the third 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 92,556 barrels per day ("bpd") of crude oil
during the third quarter of 2023, compared to 91,878 bpd during the
third quarter of 2022 and 92,152 bpd during the second quarter of
2023.
- The collective fleet of Service Transport Company ("Service
Transport"), Adams' liquid chemicals, pressurized gases, asphalt
and dry bulk transportation subsidiary, traveled 6.51 million miles
during the third quarter of 2023, versus 6.78 million miles during
the third quarter of 2022 and 6.30 million miles during the second
quarter of 2023.
- Adams' crude oil pipeline and storage segment, which includes
the Victoria Express Pipeline System ("VEX Pipeline System"),
throughput was 8,548 bpd for the third quarter of 2023, compared to
9,963 bpd for the third quarter of 2022 and 8,560 bpd for the
second quarter of 2023, and terminalling volumes were 9,350 bpd for
the third quarter of 2023, compared to 9,716 bpd in the third
quarter of 2022, and 10,785 bpd for the second 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 307,175 barrels of crude oil
inventory at September 30, 2023,
compared to 328,562 barrels at December 31,
2022.
"Our performance in the third quarter showcased several
encouraging highlights in a very challenging environment. Our
crude oil marketing segment demonstrated a sequential increase in
operating income despite a number of headwinds," said Kevin J. Roycraft, Chief Executive Officer of
Adams. "Moreover, we increased our cash balance and liquidity
and nearly tripled our net income on a sequential basis."
Capital Investments and Dividends
During the third quarter of 2023, the Company had capital
expenditures of $3.0 million
primarily for the previously announced purchase of ten tractors,
eight trailers 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 third
quarter of 2023 of $0.24 per common
share, payable on December 15, 2023,
to shareholders of record as of December
1, 2023.
Outlook
"We believe the challenges facing our GulfMark and Service
Transport segments are expected to remain in place for the next few
months, with a gradual recovery to begin late in the first half of
2024," Mr. Roycraft continued. "Our Company remains in a very
strong financial position to navigate the continued macroeconomic
challenges affecting our industries. We are well-prepared to
deliver meaningful performance when our key markets begin to
improve. In addition, 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) 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.
Conference Call
The Company will host a conference call to discuss its third
quarter results on Thursday, November 9,
2023 at 9:00 a.m. ET
(8:00 a.m. CT). To participate in the
live conference call, dial 1-844-413-3976 (Toll-Free) within the
U.S., or 1-412-317-1802 (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 1-877-344-7529
(Toll-Free) within the U.S., or 1-412-317-0088 (Toll-Required)
outside the U.S. and entering code 6806573.
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
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$ 719,925
|
|
$
814,394
|
|
$
1,913,673
|
|
$
2,524,465
|
Transportation
|
|
24,206
|
|
29,830
|
|
75,103
|
|
86,054
|
Pipeline and
storage
|
|
59
|
|
—
|
|
308
|
|
—
|
Logistics and
repurposing
|
|
16,424
|
|
8,677
|
|
46,458
|
|
8,677
|
Total
revenues
|
|
760,614
|
|
852,901
|
|
2,035,542
|
|
2,619,196
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
710,169
|
|
807,316
|
|
1,894,416
|
|
2,498,474
|
Transportation
|
|
19,642
|
|
23,732
|
|
62,315
|
|
68,271
|
Pipeline and
storage
|
|
659
|
|
640
|
|
2,350
|
|
1,799
|
Logistics and
repurposing
|
|
15,121
|
|
7,582
|
|
41,448
|
|
7,582
|
General and
administrative
|
|
4,162
|
|
4,630
|
|
10,649
|
|
12,860
|
Depreciation and
amortization
|
|
6,936
|
|
6,008
|
|
21,289
|
|
16,109
|
Total costs and
expenses
|
|
756,689
|
|
849,908
|
|
2,032,467
|
|
2,605,095
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
3,925
|
|
2,993
|
|
3,075
|
|
14,101
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
119
|
|
338
|
|
893
|
|
665
|
Interest
expense
|
|
(1,027)
|
|
(119)
|
|
(2,525)
|
|
(369)
|
Total other (expense)
income, net
|
|
(908)
|
|
219
|
|
(1,632)
|
|
296
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
3,017
|
|
3,212
|
|
1,443
|
|
14,397
|
Income tax
provision
|
|
(759)
|
|
(1,022)
|
|
(357)
|
|
(3,641)
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
2,258
|
|
$
2,190
|
|
$
1,086
|
|
$
10,756
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
$
0.89
|
|
$
0.50
|
|
$
0.43
|
|
$
2.46
|
Diluted net earnings
per common share
|
|
$
0.88
|
|
$
0.50
|
|
$
0.42
|
|
$
2.44
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
0.24
|
|
$
0.24
|
|
$
0.72
|
|
$
0.72
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
16,313
|
|
$
20,532
|
Restricted
cash
|
|
8,575
|
|
10,535
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
219,263
|
|
189,039
|
Inventory
|
|
27,650
|
|
26,919
|
Derivative
assets
|
|
5
|
|
—
|
Income tax
receivable
|
|
510
|
|
—
|
Prepayments and other
current assets
|
|
2,470
|
|
3,118
|
Total current
assets
|
|
274,786
|
|
250,143
|
|
|
|
|
|
Property and equipment,
net
|
|
111,042
|
|
106,425
|
Operating lease
right-of-use assets, net
|
|
6,212
|
|
7,720
|
Intangible assets,
net
|
|
8,407
|
|
9,745
|
Goodwill
|
|
6,673
|
|
6,428
|
Other assets
|
|
3,475
|
|
3,698
|
Total
assets
|
|
$
410,595
|
|
$
384,159
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
226,613
|
|
$
204,391
|
Accounts payable –
related party
|
|
—
|
|
31
|
Derivative
liabilities
|
|
—
|
|
330
|
Current portion of
finance lease obligations
|
|
6,863
|
|
4,382
|
Current portion of
operating lease liabilities
|
|
2,769
|
|
2,712
|
Current portion of
long-term debt
|
|
2,500
|
|
—
|
Other current
liabilities
|
|
13,856
|
|
19,214
|
Total current
liabilities
|
|
252,601
|
|
231,060
|
Other long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
|
20,000
|
|
24,375
|
Asset retirement
obligations
|
|
2,499
|
|
2,459
|
Finance lease
obligations
|
|
22,292
|
|
12,085
|
Operating lease
liabilities
|
|
3,446
|
|
5,007
|
Deferred taxes and
other liabilities
|
|
15,696
|
|
15,996
|
Total
liabilities
|
|
316,534
|
|
290,982
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
94,061
|
|
93,177
|
Total liabilities and
shareholders' equity
|
|
$
410,595
|
|
$
384,159
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
|
|
|
|
Net earnings
|
$
2,258
|
|
$
2,190
|
|
$
1,086
|
|
$
10,756
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
6,936
|
|
6,008
|
|
21,289
|
|
16,109
|
Gains on sales of
property
|
(663)
|
|
(771)
|
|
(1,429)
|
|
(1,709)
|
Provision for doubtful
accounts
|
39
|
|
(12)
|
|
29
|
|
(20)
|
Stock-based
compensation expense
|
389
|
|
254
|
|
1,044
|
|
712
|
Change in contingent
consideration liability
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Deferred income
taxes
|
773
|
|
(1,429)
|
|
3
|
|
(1,761)
|
Net change in fair
value contracts
|
(35)
|
|
(1,254)
|
|
(335)
|
|
(1,884)
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(60,869)
|
|
73,777
|
|
(30,253)
|
|
(56,060)
|
Accounts
receivable/payable, affiliates
|
—
|
|
17
|
|
(31)
|
|
17
|
Inventories
|
(1,127)
|
|
32,080
|
|
(731)
|
|
(10,259)
|
Income tax
receivable
|
(41)
|
|
—
|
|
(510)
|
|
6,424
|
Prepayments and other
current assets
|
138
|
|
86
|
|
648
|
|
468
|
Accounts
payable
|
63,845
|
|
(74,219)
|
|
22,239
|
|
46,925
|
Accrued
liabilities
|
(145)
|
|
3,875
|
|
(2,709)
|
|
6,489
|
Other
|
(52)
|
|
(592)
|
|
64
|
|
(375)
|
Net cash provided by
operating activities
|
11,446
|
|
40,010
|
|
7,838
|
|
15,832
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Property and equipment
additions
|
(3,009)
|
|
(2,014)
|
|
(8,917)
|
|
(6,797)
|
Acquisition of Firebird
and Phoenix, net of cash acquired
|
—
|
|
(33,590)
|
|
—
|
|
(33,590)
|
Proceeds from property
sales
|
1,634
|
|
835
|
|
3,078
|
|
2,209
|
Insurance and state
collateral refunds
|
—
|
|
331
|
|
—
|
|
331
|
Net cash used in
investing activities
|
(1,375)
|
|
(34,438)
|
|
(5,839)
|
|
(37,847)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Borrowings under Credit
Agreement
|
38,000
|
|
15,000
|
|
76,000
|
|
45,000
|
Repayments under Credit
Agreement
|
(38,625)
|
|
—
|
|
(77,875)
|
|
(30,000)
|
Principal repayments of
finance lease obligations
|
(1,697)
|
|
(1,185)
|
|
(4,944)
|
|
(3,491)
|
Net proceeds from sale
of equity
|
—
|
|
—
|
|
549
|
|
283
|
Dividends paid on
common stock
|
(619)
|
|
(1,054)
|
|
(1,908)
|
|
(3,180)
|
Net cash (used in)
provided by financing activities
|
(2,941)
|
|
12,761
|
|
(8,178)
|
|
8,612
|
|
|
|
|
|
|
|
|
Increase (Decrease)
in cash and cash equivalents, including
restricted cash
|
7,130
|
|
18,333
|
|
(6,179)
|
|
(13,403)
|
Cash and cash
equivalents, including restricted cash,
at
beginning of period
|
17,758
|
|
75,581
|
|
31,067
|
|
107,317
|
Cash and cash
equivalents, including restricted cash,
at end
of period
|
$
24,888
|
|
$
93,914
|
|
$
24,888
|
|
$
93,914
|
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,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Adjusted Cash Flow to Net Earnings:
|
|
|
|
|
Net earnings
|
|
$
2,258
|
|
$
2,190
|
|
$
1,086
|
|
$
10,756
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
759
|
|
1,022
|
|
357
|
|
3,641
|
Depreciation and
amortization
|
|
6,936
|
|
6,008
|
|
21,289
|
|
16,109
|
Gains on sales of
property
|
|
(663)
|
|
(771)
|
|
(1,429)
|
|
(1,709)
|
Stock-based
compensation expense
|
|
389
|
|
254
|
|
1,044
|
|
712
|
Change in contingent
consideration liability
|
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Inventory liquidation
gains
|
|
(4,890)
|
|
—
|
|
(2,922)
|
|
(2,062)
|
Inventory valuation
losses
|
|
—
|
|
5,122
|
|
—
|
|
—
|
Net change in fair
value contracts
|
|
(35)
|
|
(1,254)
|
|
(335)
|
|
(1,884)
|
Adjusted cash
flow
|
|
$
4,754
|
|
$
12,571
|
|
$
16,524
|
|
$
25,563
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted net earnings (losses) and earnings
|
|
|
|
|
|
|
(losses) per common
share (Non-GAAP) to Net Earnings:
|
|
|
|
|
|
|
Net earnings
|
|
$
2,258
|
|
$
2,190
|
|
$
1,086
|
|
$
10,756
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gains on sales of
property
|
|
(663)
|
|
(771)
|
|
(1,429)
|
|
(1,709)
|
Stock-based
compensation expense
|
|
389
|
|
254
|
|
1,044
|
|
712
|
Change in contingent
consideration liability
|
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Net change in fair
value contracts
|
|
(35)
|
|
(1,254)
|
|
(335)
|
|
(1,884)
|
Inventory liquidation
gains
|
|
(4,890)
|
|
—
|
|
(2,922)
|
|
(2,062)
|
Inventory valuation
losses
|
|
—
|
|
5,122
|
|
—
|
|
—
|
Tax effect of
adjustments to earnings (losses)
|
|
1,092
|
|
(704)
|
|
1,304
|
|
1,038
|
Adjusted net (losses)
earnings
|
|
$
(1,849)
|
|
$
4,837
|
|
$
(3,818)
|
|
$
6,851
|
|
|
|
|
|
|
|
|
|
Adjusted (losses)
earnings per common share
|
|
$
(0.72)
|
|
$
1.09
|
|
$
(1.49)
|
|
$
1.55
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Cash Flow to Net Cash
|
|
|
|
|
|
|
Provided By Operating Activities:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
11,446
|
|
$
40,010
|
|
$
7,838
|
|
$
15,832
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
759
|
|
1,022
|
|
357
|
|
3,641
|
Deferred income
taxes
|
|
(773)
|
|
1,429
|
|
(3)
|
|
1,761
|
Provision for doubtful
accounts
|
|
(39)
|
|
12
|
|
(29)
|
|
20
|
Inventory liquidation
gains
|
|
(4,890)
|
|
—
|
|
(2,922)
|
|
(2,062)
|
Inventory valuation
losses
|
|
—
|
|
5,122
|
|
—
|
|
—
|
Changes in assets and
liabilities
|
|
(1,749)
|
|
(35,024)
|
|
11,283
|
|
6,371
|
Adjusted cash
flow
|
|
$
4,754
|
|
$
12,571
|
|
$
16,524
|
|
$
25,563
|
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SOURCE Adams Resources & Energy, Inc.