HOUSTON, Aug. 7, 2019 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company")
today announced its financial results for the three months ended
June 30, 2019.
The Company reported net earnings of $6
thousand on revenues of $484.4
million for the second quarter of 2019, compared to net
earnings of $3.6 million, or
$0.86 per common share, on revenues
of $452.4 million for the second
quarter of 2018. On an adjusted basis, net earnings were
$0.6 million, or $0.13 per common share, for the second quarter of
2019, compared to net earnings of $1.8
million, or $0.42 per common
share, for the second quarter of 2018.
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.
Second Quarter 2019 Highlights:
- Gross revenues were approximately $484.4
million for the second quarter of 2019 compared to
$452.4 million for the second quarter
of 2018
- Adjusted cash flow was $5.0
million for the second quarter of 2019 compared to
$4.7 million for the second quarter
of 2018
- Cash and cash equivalents increased by approximately 9 percent
from December 31, 2018 of
$117.1 million to approximately
$127.7 million at June 30, 2019
- No short or long term debt as of June
30, 2019
- Our crude oil marketing subsidiary, GulfMark Energy, Inc.,
marketed approximately 101,884 barrels per day ("bpd") of crude oil
during the second quarter of 2019, compared to 70,389 bpd of crude
oil during the second quarter of 2018
- Approximately 326,716 barrels of crude oil inventory at
June 30, 2019 compared to 415,523
barrels at December 31, 2018
"Company gross revenues and adjusted cash flow were both up,
compared to the second quarter of 2018, but net earnings were down,
reflecting a continuing drag from our Red
River acquisition as we confront declining gathered crude
oil volumes from our captive customer in the Red River area.
Crude oil gathered volumes in our legacy areas are relatively
stable and resilient to resource play production swings, which are
cushioned by our broad customer base," said Townes G. Pressler, Executive
Chairman.
"Our balance sheet remains solid with $127.7 million in cash at June 30, 2019, and no debt after our two recent
acquisitions of Red River Vehicle Holdings in October 2018 and the assets of EH Transport in
May 2019, as we continue to pursue
our acquisition and organic growth plans."
"Our safety record continues to be in the top industry leader
percentile as we continue to put safety first in all of our
operations."
"During the second quarter of 2019, our Service Transport
business unit continued to generate improved financial and
operating results as our revenue per mile increased 6 percent from
the second quarter of 2018, and increased 2 percent from the first
quarter of 2019. We are capitalizing on our acquisition of
the assets of EH Transport, by taking advantage of expanded product
markets and with new customers," said Pressler.
"Although we see some softening, customer demand for chemical
transport continues strong, allowing us to maintain trucking rates
in this segment. Our enhanced recruitment efforts continue to pay
off in the hiring and retention of skilled drivers, and our
turnover rate has been significantly reduced as we continue to
provide dependable, on time, and superior service to our customers
at Service Transport. We are on schedule with "stair-casing"
the age of our fleet, with the purchase of 51 new tractors and 12
new trailers during the first half of 2019 and commitments to
purchase an additional 95 tractors and 54 trailers during 2019,"
continued Pressler.
"At GulfMark, our legacy and Red
River combined crude oil volumes for the second quarter of
2019 decreased 10 percent from the first quarter of 2019, mainly
attributable to decreased production in our Red River market areas. In addition, we
have experienced some natural well performance decline in the Gulf
Coast."
"During the remainder of 2019, we will continue our focus on
safety first, and remaining in the top tier for all safety
statistics. We will be introducing efficiencies in our crude
oil marketing transportation division, right sizing the Red River
operation, replacing aging tractors and focusing on strategic fleet
planning in both business units, and continue company-wide driver
recruitment and retention practices to increase our driver
count. We will continue to explore synergic growth
opportunities in our core businesses, both organically and in the
open market," said Pressler.
Capital Investments and Dividends
During the second quarter of 2019, the Company spent
approximately $4.8 million of capital
and paid dividends of $1.0 million
($0.24 per common 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 second quarter of 2019 in the amount of
$0.24 per common share, payable on
September 20, 2019 to shareholders of
record as of September 6,
2019.
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.
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,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$
|
467,040
|
|
$
|
438,791
|
|
$
|
896,801
|
|
$
|
812,429
|
Transportation
|
|
17,393
|
|
13,626
|
|
32,800
|
|
27,244
|
Total
revenues
|
|
484,433
|
|
452,417
|
|
929,601
|
|
839,673
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
463,774
|
|
431,683
|
|
884,315
|
|
800,866
|
Transportation
|
|
14,436
|
|
11,890
|
|
27,537
|
|
24,191
|
General and
administrative
|
|
2,582
|
|
2,284
|
|
5,266
|
|
4,567
|
Depreciation and
amortization
|
|
4,284
|
|
2,262
|
|
7,873
|
|
4,674
|
Total costs and
expenses
|
|
485,076
|
|
448,119
|
|
924,991
|
|
834,298
|
|
|
|
|
|
|
|
|
|
Operating (losses)
earnings
|
|
(643)
|
|
4,298
|
|
4,610
|
|
5,375
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on dissolution
of investment
|
|
75
|
|
—
|
|
573
|
|
—
|
Interest
income
|
|
731
|
|
498
|
|
1,387
|
|
885
|
Interest
expense
|
|
(117)
|
|
(15)
|
|
(182)
|
|
(34)
|
Total other income
(expense), net
|
|
689
|
|
483
|
|
1,778
|
|
851
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
46
|
|
4,781
|
|
6,388
|
|
6,226
|
Income tax
provision
|
|
(40)
|
|
(1,161)
|
|
(1,474)
|
|
(1,468)
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
6
|
|
$
|
3,620
|
|
$
|
4,914
|
|
$
|
4,758
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic net earnings
per common share
|
|
$
|
—
|
|
$
|
0.86
|
|
$
|
1.16
|
|
$
|
1.13
|
Diluted net earnings
per common share
|
|
$
|
—
|
|
$
|
0.86
|
|
$
|
1.16
|
|
$
|
1.13
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
|
$
|
0.24
|
|
$
|
0.22
|
|
$
|
0.46
|
|
$
|
0.44
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except share data)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
127,670
|
|
$
|
117,066
|
Restricted
cash
|
|
4,876
|
|
—
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
74,499
|
|
85,197
|
Accounts receivable –
related party
|
|
—
|
|
425
|
Inventory
|
|
19,977
|
|
22,779
|
Derivative
assets
|
|
240
|
|
162
|
Income tax
receivable
|
|
2,217
|
|
2,404
|
Prepayments and other
current assets
|
|
1,828
|
|
1,557
|
Total current
assets
|
|
231,307
|
|
229,590
|
|
|
|
|
|
Property and
equipment, net
|
|
55,555
|
|
44,623
|
Operating lease
right-of-use assets
|
|
10,093
|
|
—
|
Intangible
assets
|
|
1,936
|
|
—
|
Cash deposits and
other assets
|
|
2,873
|
|
4,657
|
Total
assets
|
|
$
|
301,764
|
|
$
|
278,870
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
116,983
|
|
$
|
116,068
|
Accounts payable –
related party
|
|
6
|
|
29
|
Derivative
liabilities
|
|
236
|
|
139
|
Current portion of
finance lease obligations
|
|
2,116
|
|
883
|
Current portion of
operating lease liabilities
|
|
2,097
|
|
—
|
Other current
liabilities
|
|
9,913
|
|
6,148
|
Total current
liabilities
|
|
131,351
|
|
123,267
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
1,550
|
|
1,525
|
Finance lease
obligations
|
|
5,473
|
|
3,209
|
Operating lease
liabilities
|
|
7,999
|
|
—
|
Deferred taxes and
other liabilities
|
|
5,283
|
|
4,271
|
Total
liabilities
|
|
151,656
|
|
132,272
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
150,108
|
|
146,598
|
Total liabilities and
shareholders' equity
|
|
$
|
301,764
|
|
$
|
278,870
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2019
|
|
2018
|
Operating
activities:
|
|
|
|
|
Net
earnings
|
|
$
|
4,914
|
|
$
|
4,758
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
7,873
|
|
4,674
|
Gains on sales of
property
|
|
(434)
|
|
(446)
|
Provision for
doubtful accounts
|
|
(36)
|
|
(32)
|
Stock-based
compensation expense
|
|
197
|
|
3
|
Deferred income
taxes
|
|
1,012
|
|
(832)
|
Net change in fair
value contracts
|
|
19
|
|
(3)
|
Gain on dissolution
of AREC
|
|
(573)
|
|
—
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
11,812
|
|
2,852
|
Accounts
receivable/payable, affiliates
|
|
(23)
|
|
—
|
Inventories
|
|
2,802
|
|
(9,321)
|
Income tax
receivable
|
|
187
|
|
1,317
|
Prepayments and other
current assets
|
|
(271)
|
|
67
|
Accounts
payable
|
|
1,505
|
|
15,634
|
Accrued
liabilities
|
|
3,765
|
|
2,441
|
Other
|
|
999
|
|
125
|
Net cash provided by
operating activities
|
|
33,748
|
|
21,237
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and
equipment additions
|
|
(13,121)
|
|
(2,728)
|
Asset
acquisition
|
|
(5,611)
|
|
—
|
Proceeds from
property sales
|
|
1,287
|
|
655
|
Proceeds from
dissolution of AREC
|
|
998
|
|
—
|
Insurance and state
collateral refunds
|
|
774
|
|
465
|
Net cash used in
investing activities
|
|
(15,673)
|
|
(1,608)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments
of finance lease obligations
|
|
(651)
|
|
(167)
|
Dividends paid on
common stock
|
|
(1,944)
|
|
(1,856)
|
Net cash used in
financing activities
|
|
(2,595)
|
|
(2,023)
|
|
|
|
|
|
Increase in cash
and cash equivalents, including restricted cash
|
|
15,480
|
|
17,606
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
117,066
|
|
109,393
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
|
132,546
|
|
$
|
126,999
|
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,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Cash Flow to Net Earnings:
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
6
|
|
$
|
3,620
|
|
$
|
4,914
|
|
$
|
4,758
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
40
|
|
1,161
|
|
1,474
|
|
1,468
|
Depreciation and
amortization
|
|
4,284
|
|
2,262
|
|
7,873
|
|
4,674
|
Gains on sales of
property
|
|
(256)
|
|
(420)
|
|
(434)
|
|
(446)
|
Gain on dissolution
of AREC
|
|
(75)
|
|
—
|
|
(573)
|
|
—
|
Stock-based
compensation expense
|
|
74
|
|
3
|
|
197
|
|
3
|
Inventory liquidation
gains
|
|
—
|
|
(1,923)
|
|
(3,510)
|
|
(2,475)
|
Inventory valuation
losses
|
|
952
|
|
—
|
|
—
|
|
—
|
Net change in fair
value contracts
|
|
—
|
|
(1)
|
|
19
|
|
(3)
|
Adjusted cash
flow
|
|
$
|
5,025
|
|
$
|
4,702
|
|
$
|
9,960
|
|
$
|
7,979
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted net
earnings and earnings per common share
(Non-GAAP):
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
6
|
|
$
|
3,620
|
|
$
|
4,914
|
|
$
|
4,758
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gain on dissolution
of AREC
|
|
(75)
|
|
—
|
|
(573)
|
|
—
|
Gains on sales of
property
|
|
(256)
|
|
(420)
|
|
(434)
|
|
(446)
|
Stock-based
compensation expense
|
|
74
|
|
3
|
|
197
|
|
3
|
Net change in fair
value of contracts
|
|
—
|
|
(1)
|
|
19
|
|
(3)
|
Inventory liquidation
gains
|
|
—
|
|
(1,923)
|
|
(3,510)
|
|
(2,475)
|
Inventory valuation
losses
|
|
952
|
|
—
|
|
—
|
|
—
|
Tax effect of
adjustments to earnings
|
|
(146)
|
|
492
|
|
903
|
|
614
|
Adjusted net
earnings
|
|
$
|
555
|
|
$
|
1,771
|
|
$
|
1,516
|
|
$
|
2,451
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
common share
|
|
$
|
0.13
|
|
$
|
0.42
|
|
$
|
0.35
|
|
$
|
0.58
|
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SOURCE Adams Resources & Energy, Inc.