HOUSTON, Nov. 5, 2020 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced
operational and financial results for the three months ended
September 30, 2020 and declared a quarterly cash dividend of
$0.24 per common share.
- Reported net earnings of $3.1
million, or $0.72 per diluted
common share, on revenues of $266.9
million for the third quarter of 2020, compared to net
earnings of $0.6 million, or
$0.15 per diluted common share, on
revenues of $450.3 million for the
third quarter of 2019.
- Reported net cash used in operating activities of $19.6 million for the third quarter of 2020,
compared to net cash provided by operating activities of
$9.4 million for the third quarter of
2019. The decrease was primarily driven by changes in working
capital due to a reduction in the market price of crude oil.
- Reported adjusted net earnings of $2.5
million, or $0.60 per diluted
common share, for the third quarter of 2020, compared to adjusted
net earnings of $1.6 million, or
$0.38 per diluted common share, for
the third quarter of 2019.
- Reported adjusted cash flow of $10.3
million for the third quarter of 2020, versus $6.5 million for the third quarter of 2019.
Adjusted net (losses) earnings, adjusted (losses) earnings
per diluted 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.
Additional Highlights for Q3 2020
- Maintained strong financial flexibility at September 30, 2020, including $53.1 million in cash and cash equivalents. Cash
and cash equivalents were $70.2
million at June 30, 2020.
- Adam's crude oil marketing subsidiary, GulfMark Energy, Inc.
("GulfMark"), marketed approximately 90,896 barrels per day ("bpd")
of crude oil during the third quarter of 2020, compared to 105,801
bpd during the third quarter of 2019 and 81,152 bpd during the
second quarter of 2020. GulfMark held 411,380 barrels of crude oil
inventory at September 30, 2020,
compared to 519,927 barrels at June 30,
2020.
- The collective fleet of Service Transport Company ("Service
Transport") traveled approximately 7.625 million miles during the
third quarter of 2020, compared to 5.152 million miles during the
third quarter of 2019 and 3.890 million miles during the second
quarter of 2020.
Kevin J. Roycraft, Adams' Chief Executive Officer, commented,
"Our third quarter benefited from a significant uptick in activity
levels from this year's second quarter in both of our
businesses. The result was sequential quarterly revenue
growth of 75% and, more importantly, a more than five-fold increase
in adjusted cash flow. Our third quarter financial
performance is a direct result of the efforts of our employees, and
I want to thank them for their continued hard work and dedication
as we focus on safely serving the needs of our customers during
these challenging times."
"At GulfMark, we saw improved topline driven by a 12% increase
in marketed volumes along with strengthening crude pricing from the
second quarter. GulfMark's third quarter results also
benefited from the cost and operational efficiency initiatives we
put in place in the first half of the year to help offset the
impact of reduced crude oil demand due to the COVID-19
pandemic."
"Substantially contributing to Service Transport's sequential
quarterly revenue growth of almost 80% was the impact of our recent
purchase of assets from CTL Transportation. With the closing
of the transaction on June 26, we
grew our collective fleet of tractors and trailers by more than
50%, as well as expanded our footprint of operations into important
markets in Florida, Georgia, Illinois, Missouri and Ohio."
Capital Investments and Dividends
During the third quarter of 2020, the Company spent capital of
$0.7 million for leasehold
improvements and other equipment. In addition, Adams paid dividends of $1.0 million ($0.24
per common share).
Adams' Board of Directors has
declared a quarterly cash dividend for the third quarter of 2020 in
the amount of $0.24 per common share,
payable on December 18, 2020 to
shareholders of record as of December
4, 2020. Adams' has
consistently paid a dividend since 1994, or more than 25
years.
Outlook
Mr. Roycraft concluded, "As we look to the remainder of the year
and into 2021, we believe both of our businesses are well
positioned for success despite the continued market volatility as a
result of the ongoing COVID-19 pandemic. Supporting our view
are the two strategic M&A transactions we recently executed
that significantly enhance and expand our service offerings and
footprint of operations."
"The integration of the assets of CTL Transportation into
Service Transport's business has gone very well, and we look
forward to leveraging the opportunities provided by our entrance
into five new strategic markets. We are also excited about
GulfMark's recently completed acquisition of the VEX Pipeline
System, which includes a 90,000 barrel per day capacity crude oil
and condensate pipeline that connects the heart of the Eagle Ford
Basin to the Gulf Coast waterborne market through two terminals,
along with 350,000 barrels of above ground storage and two eight
bay truck offload stations. In addition, the acquisition
significantly enhances our position at the Port of Victoria where we now control 450,000 barrels
of storage with three docks. The VEX Pipeline System has been
key to GulfMark's crude oil supply and marketing business, and we
look forward to leveraging our expanded midstream offerings to
better serve our end-user markets along the Gulf Coast."
"While our recent expansion initiatives are key milestones, as
important to our long-term success is our strong balance
sheet. Having financial flexibility is critical, especially
in today's environment, and affords our first-class group of
employees the ability to remain solely focused on providing our
customers unparalleled service quality and reliability."
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,
earnings per share 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. The non-GAAP
financial measures are defined and reconciled in the financial
tables below.
About Adams Resources & Energy, Inc.
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. 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.
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
|
$
|
245,184
|
|
|
$
|
434,609
|
|
|
$
|
722,546
|
|
|
$
|
1,331,410
|
|
Transportation
|
|
21,720
|
|
|
15,698
|
|
|
50,121
|
|
|
48,498
|
|
Total
revenues
|
|
266,904
|
|
|
450,307
|
|
|
772,667
|
|
|
1,379,908
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
|
237,479
|
|
|
429,507
|
|
|
721,798
|
|
|
1,313,822
|
|
Transportation
|
|
17,105
|
|
|
13,365
|
|
|
41,178
|
|
|
40,902
|
|
General and
administrative
|
|
1,405
|
|
|
2,739
|
|
|
7,030
|
|
|
8,005
|
|
Depreciation and
amortization
|
|
4,859
|
|
|
4,393
|
|
|
13,610
|
|
|
12,266
|
|
Total costs and
expenses
|
|
260,848
|
|
|
450,004
|
|
|
783,616
|
|
|
1,374,995
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
(losses)
|
|
6,056
|
|
|
303
|
|
|
(10,949)
|
|
|
4,913
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
573
|
|
Interest
income
|
|
105
|
|
|
758
|
|
|
614
|
|
|
2,145
|
|
Interest
expense
|
|
(70)
|
|
|
(242)
|
|
|
(288)
|
|
|
(424)
|
|
Total other income
(expense), net
|
|
35
|
|
|
516
|
|
|
326
|
|
|
2,294
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
before income taxes
|
|
6,091
|
|
|
819
|
|
|
(10,623)
|
|
|
7,207
|
|
Income tax
(provision) benefit
|
|
(3,018)
|
|
|
(179)
|
|
|
5,772
|
|
|
(1,653)
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
3,073
|
|
|
$
|
640
|
|
|
$
|
(4,851)
|
|
|
$
|
5,554
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share:
|
|
|
|
|
|
|
|
|
Basic net earnings
(losses) per common share
|
|
$
|
0.72
|
|
|
$
|
0.15
|
|
|
$
|
(1.14)
|
|
|
$
|
1.31
|
|
Diluted net earnings
(losses) per common share
|
|
$
|
0.72
|
|
|
$
|
0.15
|
|
|
$
|
(1.14)
|
|
|
$
|
1.31
|
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.72
|
|
|
$
|
0.70
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
53,106
|
|
|
$
|
112,994
|
|
Restricted
cash
|
|
4,865
|
|
|
9,261
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
94,654
|
|
|
94,534
|
|
Inventory
|
|
15,942
|
|
|
26,407
|
|
Derivative
assets
|
|
3
|
|
|
—
|
|
Income tax
receivable
|
|
7,054
|
|
|
2,569
|
|
Prepayments and other
current assets
|
|
1,417
|
|
|
1,559
|
|
Total current
assets
|
|
177,041
|
|
|
247,324
|
|
|
|
|
|
|
Property and
equipment, net
|
|
64,469
|
|
|
69,046
|
|
Operating lease
right-of-use assets, net
|
|
8,453
|
|
|
9,576
|
|
Intangible assets,
net
|
|
4,304
|
|
|
1,597
|
|
Cash deposits and
other assets
|
|
2,193
|
|
|
3,299
|
|
Total
assets
|
|
$
|
256,460
|
|
|
$
|
330,842
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
76,407
|
|
|
$
|
147,851
|
|
Accounts payable –
related party
|
|
158
|
|
|
5
|
|
Current portion of
finance lease obligations
|
|
2,505
|
|
|
2,167
|
|
Current portion of
operating lease liabilities
|
|
2,137
|
|
|
2,252
|
|
Other current
liabilities
|
|
11,687
|
|
|
7,302
|
|
Total current
liabilities
|
|
92,894
|
|
|
159,577
|
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
|
1,610
|
|
|
1,573
|
|
Finance lease
obligations
|
|
4,011
|
|
|
4,376
|
|
Operating lease
liabilities
|
|
6,314
|
|
|
7,323
|
|
Deferred taxes and
other liabilities
|
|
7,547
|
|
|
6,352
|
|
Total
liabilities
|
|
112,376
|
|
|
179,201
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
144,084
|
|
|
151,641
|
|
Total liabilities and
shareholders' equity
|
|
$
|
256,460
|
|
|
$
|
330,842
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2020
|
|
2019
|
Operating
activities:
|
|
|
|
|
Net (losses)
earnings
|
|
$
|
(4,851)
|
|
|
$
|
5,554
|
|
Adjustments to
reconcile net (losses) earnings to net cash
|
|
|
|
|
(used in) provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
13,610
|
|
|
12,266
|
|
Gains on sales of
property
|
|
(985)
|
|
|
(1,386)
|
|
Provision for doubtful
accounts
|
|
(27)
|
|
|
(36)
|
|
Stock-based
compensation expense
|
|
453
|
|
|
352
|
|
Deferred income
taxes
|
|
(1,503)
|
|
|
1,493
|
|
Net change in fair
value contracts
|
|
(3)
|
|
|
20
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
(573)
|
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(93)
|
|
|
8,520
|
|
Accounts
receivable/payable, affiliates
|
|
153
|
|
|
(23)
|
|
Inventories
|
|
10,465
|
|
|
(2,121)
|
|
Income tax
receivable
|
|
(1,782)
|
|
|
(135)
|
|
Prepayments and other
current assets
|
|
142
|
|
|
166
|
|
Accounts
payable
|
|
(70,082)
|
|
|
13,613
|
|
Accrued
liabilities
|
|
4,396
|
|
|
4,561
|
|
Other
|
|
17
|
|
|
871
|
|
Net cash (used in)
provided by operating activities
|
|
(50,090)
|
|
|
43,142
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(3,589)
|
|
|
(25,425)
|
|
Asset
acquisition
|
|
(9,163)
|
|
|
(5,624)
|
|
Proceeds from property
sales
|
|
2,282
|
|
|
2,853
|
|
Proceeds from
dissolution of AREC
|
|
—
|
|
|
998
|
|
Insurance and state
collateral refunds
|
|
1,127
|
|
|
750
|
|
Net cash used in
investing activities
|
|
(9,343)
|
|
|
(26,448)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments of
finance lease obligations
|
|
(1,677)
|
|
|
(1,171)
|
|
Payment of contingent
consideration liability
|
|
(111)
|
|
|
—
|
|
Dividends paid on
common stock
|
|
(3,063)
|
|
|
(2,960)
|
|
Net cash used in
financing activities
|
|
(4,851)
|
|
|
(4,131)
|
|
|
|
|
|
|
(Decrease)
Increase in cash and cash equivalents, including restricted
cash
|
|
(64,284)
|
|
|
12,563
|
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
122,255
|
|
|
117,066
|
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
|
57,971
|
|
|
$
|
129,629
|
|
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to
Net Earnings (Losses):
|
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
|
$
|
3,073
|
|
|
$
|
640
|
|
|
$
|
(4,851)
|
|
|
$
|
5,554
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
3,018
|
|
|
179
|
|
|
(5,772)
|
|
|
1,653
|
|
Depreciation and
amortization
|
|
4,859
|
|
|
4,393
|
|
|
13,610
|
|
|
12,266
|
|
Gains on sales of
property
|
|
(845)
|
|
|
(952)
|
|
|
(985)
|
|
|
(1,386)
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(573)
|
|
Stock-based
compensation expense
|
|
149
|
|
|
155
|
|
|
453
|
|
|
352
|
|
Early retirement and
terminations costs
|
|
—
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Inventory liquidation
gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,459)
|
|
Inventory valuation
losses
|
|
12
|
|
|
2,051
|
|
|
18,196
|
|
|
—
|
|
Net change in fair
value contracts
|
|
9
|
|
|
1
|
|
|
(3)
|
|
|
20
|
|
Adjusted cash
flow
|
|
$
|
10,275
|
|
|
$
|
6,467
|
|
|
$
|
21,079
|
|
|
$
|
16,427
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted net
earnings and earnings
per common share (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net earnings
(losses)
|
|
$
|
3,073
|
|
|
$
|
640
|
|
|
$
|
(4,851)
|
|
|
$
|
5,554
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gain on dissolution of
AREC
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(573)
|
|
Gains on sales of
property
|
|
(845)
|
|
|
(952)
|
|
|
(985)
|
|
|
(1,386)
|
|
Stock-based
compensation expense
|
|
149
|
|
|
155
|
|
|
453
|
|
|
352
|
|
Early retirement and
terminations costs
|
|
—
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Net change in fair
value contracts
|
|
9
|
|
|
1
|
|
|
(3)
|
|
|
20
|
|
Inventory liquidation
gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,459)
|
|
Inventory valuation
losses
|
|
12
|
|
|
2,051
|
|
|
18,196
|
|
|
—
|
|
Tax effect of
adjustments to earnings (losses)
|
|
142
|
|
|
(264)
|
|
|
(3,799)
|
|
|
639
|
|
Adjusted net
earnings
|
|
$
|
2,540
|
|
|
$
|
1,631
|
|
|
$
|
9,442
|
|
|
$
|
3,147
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
common share
|
|
$
|
0.60
|
|
|
$
|
0.38
|
|
|
$
|
2.23
|
|
|
$
|
0.74
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Adjusted Cash Flow to Net Cash
(Used in) Provided by Operating
Activities:
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
$
|
(19,631)
|
|
|
$
|
9,394
|
|
|
$
|
(50,090)
|
|
|
$
|
43,142
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
3,018
|
|
|
179
|
|
|
(5,772)
|
|
|
1,653
|
|
Deferred income
taxes
|
|
(31)
|
|
|
(481)
|
|
|
1,503
|
|
|
(1,493)
|
|
Provision for doubtful
accounts
|
|
3
|
|
|
—
|
|
|
27
|
|
|
36
|
|
Early retirement and
terminations costs
|
|
—
|
|
|
—
|
|
|
431
|
|
|
—
|
|
Inventory liquidation
gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,459)
|
|
Inventory valuation
losses
|
|
12
|
|
|
2,051
|
|
|
18,196
|
|
|
—
|
|
Changes in assets and
liabilities
|
|
26,904
|
|
|
(4,676)
|
|
|
56,784
|
|
|
(25,452)
|
|
Adjusted cash
flow
|
|
$
|
10,275
|
|
|
$
|
6,467
|
|
|
$
|
21,079
|
|
|
$
|
16,427
|
|
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SOURCE Adams Resources & Energy, Inc.