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Adams Resources & Energy, Inc. Announces Results For Third Quarter 2017 And Declares Quarterly Dividend

HOUSTON, Nov. 9, 2017 /PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE MKT: AE) ("Adams" or the "Company") today announced its financial results for the three months ended September 30, 2017.

(PRNewsfoto/Adams Resources & Energy, Inc.)

The Company reported 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, compared to a net loss of $2.2 million, or ($0.51) per common share, on revenues of $256.9 million for the third quarter of 2016.  On an adjusted basis, net losses were $0.2 million, or ($0.04) per common share, for the third quarter of 2017, compared to a net loss of $1.3 million, or ($0.31) per common share, for the third quarter of 2016.

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 2017 Highlights:

  • Gross revenues of approximately $295.3 million for the third quarter of 2017 compared to $256.9 million for the third quarter of 2016
  • Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 64,104 barrels per day ("bpd") of crude oil during the third quarter of 2017, compared to 61,200 bpd of crude oil during the third quarter of 2016
  • Approximately 435,000 barrels of crude oil inventory as of September 30, 2017
  • $159.4 million of liquidity ($99.4 million of cash and cash equivalents and $60 million of undrawn letter of credit facility) as of September 30, 2017
  • Generated adjusted cash flow of $2.3 million for the third quarter of 2017 compared to $2.4 million for the third quarter of 2016
  • Dividend of $0.22 per share for the third quarter of 2017
  • No short or long term debt as of September 30, 2017

"We achieved a lot during the third quarter of 2017, but our financial results were negatively impacted by disruptions caused by Hurricane Harvey and also by various one-time charges.  GulfMark has seen a recovery of volumes after Harvey-related downtime and from several newly completed wells coming online recently in the Gulf Coast region.  We are encouraged by the demand at Service Transport Company, and we are looking forward to onboarding this month with our new President of Service Transport Company to capitalize on the opportunity seen in that sector over the coming months," said Townes Pressler, Executive Chairman.

Capital Investments and Dividends

During the third quarter of 2017, the Company recorded approximately $2.1 million of capital and paid dividends of $0.9 million ($0.22 per share).  The majority of the recorded capital relates to a 5-year capital lease of $1.8 million for new tractors at our GulfMark Energy subsidiary.

The Company's Board of Directors also declared a quarterly cash dividend for the third quarter of 2017 in the amount of $0.22 per common share, payable on December 19, 2017 to shareholders of record as of December 5, 2017.

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 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.  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. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, changes in commodity prices; changes in expected levels of natural gas and oil reserves or production; operating hazards, drilling risks, unsuccessful exploratory activities; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; international monetary conditions; unexpected cost increases; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; and general domestic and international economic and political conditions; as well as changes in tax, environmental and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. 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:  Josh C. Anders
EVP, Chief Financial Officer
janders@adamsresources.com
(281) 974-9442

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,


2017


2016


2017


2016

Revenues:








Marketing

$

282,229



$

243,704



$

872,020



$

758,627


Transportation

13,082



12,310



40,153



39,517


Oil and natural gas



863



1,427



2,427


  Total revenues

295,311



256,877



913,600



800,571










Costs and expenses:








Marketing

277,906



240,021



860,567



737,858


Transportation

12,668



11,039



36,681



33,537


Oil and natural gas



1,011



951



2,421


General and administrative

2,787



2,114



6,884



6,252


Depreciation, depletion and amortization

3,240



4,514



10,772



14,385


   Total costs and expenses

296,601



258,699



915,855



794,453










Operating earnings (losses)

(1,290)



(1,822)



(2,255)



6,118










Other income (expense):








Loss on deconsolidation of subsidiary

(1,870)





(3,505)




Impairment of investments in unconsolidated affiliates

(2,500)



(1,732)



(2,500)



(1,732)


Losses from equity investments



(68)





(468)


Interest income

370



245



789



444


Interest expense

(8)





(10)




  Total other income (expense), net

(4,008)



(1,555)



(5,226)



(1,756)










(Losses) earnings before income taxes

(5,298)



(3,377)



(7,481)



4,362


Income tax benefit (provision)

2,265



1,224



3,306



(1,681)










Net (losses) earnings

$

(3,033)



$

(2,153)



$

(4,175)



$

2,681










Earnings (losses) per share:








Basic and diluted net (losses) earnings








  per common share

$

(0.72)



$

(0.51)



$

(0.99)



$

0.64










Weighted average number of common








shares outstanding

4,218



4,218



4,218



4,218










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,


2017


2016

ASSETS




Current assets:




Cash and cash equivalents

$

99,449



$

87,342


Accounts receivable, net of allowance for doubtful accounts

81,277



87,162


Inventory

22,398



13,070


Derivative assets



112


Income tax receivable

4,147



2,735


Prepayments and other current assets

1,168



2,097


  Total current assets

208,439



192,518






Property and equipment, net

31,958



46,325


Investments in unconsolidated affiliates

3,200



2,500


Cash deposits and other

4,932



5,529


Total assets

$

248,529



$

246,872






LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

89,339



$

79,897


Accounts payable – related party



53


Derivative liabilities



64


Current portion of capital lease obligation

306




Other current liabilities

5,860



6,060


  Total current liabilities

95,505



86,074


Other long-term liabilities:




Asset retirement obligations

1,263



2,329


Capital lease obligations

1,465




Deferred taxes and other liabilities

5,943



7,157


  Total liabilities

104,176



95,560






Commitments and contingencies








Shareholders' equity

144,353



151,312


Total liabilities and shareholders' equity

$

248,529



$

246,872


 

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



Nine Months Ended


September 30,


2017


2016

Operating activities:




Net (losses) earnings

$

(4,175)



$

2,681


  Adjustments to reconcile net (losses) earnings to net cash




  provided by (used in) operating activities:




    Depreciation, depletion and amortization

10,772



14,385


    Gains on sale of property

(347)



(1,948)


    Impairment of oil and natural gas properties

3



87


    Provision for doubtful accounts

(9)



19


    Deferred income taxes

(1,198)



(1,170)


    Net change in fair value contracts

48



(305)


    Losses from equity investment



468


    Impairment of investments in unconsolidated affiliates

2,500



1,732


    Loss on deconsolidation of subsidiary

3,505




Changes in assets and liabilities:




Accounts receivable

5,228



(1,767)


Accounts receivable/payable, affiliates

266




Inventories

(9,328)



(8,395)


Income tax receivable

(1,412)



113


Prepayments and other current assets

927



(1,570)


Accounts payable

9,482



(8,795)


Accrued liabilities

465



1,378


Other

(240)



(252)


Net cash provided by (used in) operating activities

16,487



(3,339)






Investing activities:




Property and equipment additions

(2,465)



(7,186)


Proceeds from property sales

430



3,536


Investments in unconsolidated affiliates



(4,700)


Insurance and state collateral (deposits) refunds

439



1,081


Net cash used in investing activities

(1,596)



(7,269)






Financing activities:




Dividends paid on common stock

(2,784)



(2,784)


Net cash used in financing activities

(2,784)



(2,784)






Increase (decrease) in cash and cash equivalents

12,107



(13,392)


Cash and cash equivalents at beginning of period

87,342



91,877


Cash and cash equivalents at end of period

$

99,449



$

78,485


 

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,


2017


2016


2017


2016

Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings:








Net (losses) earnings

$

(3,033)



$

(2,153)



$

(4,175)



$

2,681


Income tax benefit (provision)

(2,265)



(1,224)



(3,306)



1,681


Depreciation, depletion and amortization

3,240



4,514



10,772



14,385


Gains on sale of property

(218)



(673)



(347)



(1,948)


Impairment of oil and natural gas properties





3



87


Loss on deconsolidation of subsidiary

1,870





3,505




Impairment of investments in unconsolidated affiliates

2,500



1,732



2,500



1,732


Inventory liquidation gains

(1,954)







(5,779)


Inventory valuation losses



432



109




Net change in fair value contracts

748



(181)



48



(305)


Voluntary early retirement program costs

1,435





1,435




Legal and other accrual reversals





(840)




  Adjusted cash flow

$

2,323



$

2,447



$

9,704



$

12,534












Three Months Ended


Nine Months Ended


September 30,


September 30,


2017


2016


2017


2016

Adjusted net (losses) earnings and (losses) earnings per common share (Non-GAAP):








Net (losses) earnings

$

(3,033)



$

(2,153)



$

(4,175)



$

2,681


Add (subtract):








Loss on deconsolidation of subsidiary

1,870





3,505




Impairment of investments in unconsolidated affiliates

2,500



1,732



2,500



1,732


Gains on sale of property

(218)



(673)



(347)



(1,948)


Impairment of oil and natural gas properties





3



87


Costs of voluntary early retirement program

1,435





1,435




Derivative valuation gains

748



(181)



48



(305)


Inventory liquidation gains

(1,954)







(5,779)


Inventory valuation losses



432



109




Tax effect of adjustments to (losses) earnings

(1,533)



(459)



(2,539)



2,175


  Adjusted net (losses) earnings

$

(185)



$

(1,302)



$

539



$

(1,357)










Adjusted (losses) earnings per common share

$

(0.04)



$

(0.31)



$

0.13



$

(0.32)


 

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