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ADAMS RESOURCES & ENERGY, INC. ANNOUNCES THIRD QUARTER 2023 RESULTS AND DECLARES QUARTERLY DIVIDEND

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.

(PRNewsfoto/Adams Resources & Energy, Inc.)
(PRNewsfoto/Adams Resources & Energy, Inc.)

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

 

Cision
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SOURCE Adams Resources & Energy, Inc.

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