HOUSTON, May 9, 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
March 31, 2023. The Company also declared a quarterly
cash dividend of $0.24 per common
share.
Q1 2023 Financial Summary
- Total revenue of $650.2 million,
versus $774.2 million for the first
quarter of 2022.
- Net loss of $2.0 million, or
($0.79) per common share, compared to
net earnings of $6.1 million, or
$1.39 per diluted common share for
the first quarter of 2022.
- Net cash provided by operating activities of $23.7 million for the first quarter of 2023, an
increase of $17.8 million from the
prior-year quarter. The increase 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 net loss of $1.4
million, or ($0.55) per common
share, compared to adjusted net loss of $1.0
million, or ($0.24) per
diluted common share, for the first quarter of 2022.
- Adjusted cash flow of $4.7
million, an increase of $0.7
million from the first quarter of 2022.
- Cash and cash equivalents were $42.1
million at March 31, 2023,
versus $20.5 million at December 31, 2022, primarily due to the timing of
receipts and early payments from crude oil customers.
- Liquidity of $81.7 million at
March 31, 2023.
- Paid dividends totaling $0.24 per
share during the first quarter of 2023. The Company has
consistently paid a dividend since 1994.
Adjusted net (loss) earnings, adjusted (loss) 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 later in this
release.
Additional Operational Highlights
- Adams' crude oil marketing subsidiary, GulfMark Energy, Inc.
("GulfMark"), marketed 94,030 barrels per day ("bpd") of crude oil
during the first quarter of 2023, compared to 90,385 bpd during the
first quarter of 2022 and 99,441 bpd during the fourth quarter of
2022.
- The collective fleet of Service Transport Company ("Service
Transport"), Adams' liquid chemicals, pressurized gases, asphalt
and dry bulk transportation subsidiary, traveled 6.55 million miles
during the first quarter of 2023, versus 6.80 million miles during
the first quarter of 2022 and 6.07 million miles during the fourth
quarter of 2022.
- Adams' crude oil pipeline and storage segment, which includes
the Victoria Express Pipeline System ("VEX Pipeline System"),
throughput was 10,088 bpd for the first quarter of 2023, compared
to 10,486 bpd for the first quarter of 2022 and 10,615 bpd for the
fourth quarter of 2022, and terminalling volumes were 10,395 bpd
for the first quarter of 2023, compared to 10,948 bpd in the first
quarter of 2022, and 10,833 bpd for the fourth quarter of
2022.
- The recently added 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 285,440 barrels of crude oil
inventory at March 31, 2023, compared
to 328,562 barrels at December 31,
2022.
"Our first quarter results reflect the improved performance
across our segments despite continued economic headwinds," said
Kevin J. Roycraft, Chief Executive
Officer of Adams. "GulfMark's adjusted cash flows increased
compared to both fourth quarter 2022 and the prior-year quarter as
we continue to make progress adjusting cost structures and
improving contract pricing. Quarterly results for
Phoenix and Firebird both improved
sequentially, and Service Transport generated positive quarterly
cash flow despite pricing pressures and lower shipment
volumes."
Capital Investments and Dividends
During the first quarter of 2023, the Company had capital
expenditures of $1.9 million
primarily for construction of the pipeline connection, for two
tractors and other field equipment. In addition, Adams paid
dividends of $0.7 million, or
$0.24 per common
share.
As part of Adams' on-going capital allocation strategy, the
Board of Directors has declared a quarterly cash dividend for the
first quarter of 2023 of $0.24 per
common share, payable on June 23,
2023, to shareholders of record as of June 9, 2023.
Outlook
Mr. Roycraft continued, "Overall, we believe Adams is
well-positioned for any potential challenges that lie ahead in
2023. The connection for the VEX Pipeline System to Max
Midstream is nearly complete and should begin flowing later this
summer. We expect continued challenges through the second quarter
as GulfMark works to realize the benefits of their cost cutting
efforts and improving margins. Customer activity for Service
Transport suggests we will benefit from a stronger second half of
the year."
"Adams has been built on a solid foundation. We have a growing
cash position, and our fundamentals remain strong. Our
acquisitions of Phoenix and
Firebird highly complement our other segments and will allow us to
succeed even in challenging markets. We expect improved performance
as the year progresses, especially in the second half of the year,"
concluded Mr. Roycraft.
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. 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 first
quarter results on Wednesday, May 10,
2023 at 9:00 a.m. ET
(8:00 a.m. CT). To participate in the
live conference call, dial 1-877-270-2148 (Toll-Free) within the
U.S., or 1-412-902-6510 (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 6664735.
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
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
Marketing
|
|
$
608,476
|
|
$
747,555
|
Transportation
|
|
26,445
|
|
26,690
|
Pipeline and
storage
|
|
—
|
|
—
|
Logistics and
repurposing
|
|
15,241
|
|
—
|
Total
revenues
|
|
650,162
|
|
774,245
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Marketing
|
|
604,494
|
|
735,647
|
Transportation
|
|
22,413
|
|
20,865
|
Pipeline and
storage
|
|
938
|
|
554
|
Logistics and
repurposing
|
|
13,125
|
|
—
|
General and
administrative
|
|
4,772
|
|
4,018
|
Depreciation and
amortization
|
|
7,050
|
|
5,013
|
Total costs and
expenses
|
|
652,792
|
|
766,097
|
|
|
|
|
|
Operating (losses)
earnings
|
|
(2,630)
|
|
8,148
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Interest and other
income
|
|
204
|
|
24
|
Interest
expense
|
|
(696)
|
|
(114)
|
Total other (expense)
income, net
|
|
(492)
|
|
(90)
|
|
|
|
|
|
(Losses) Earnings
before income taxes
|
|
(3,122)
|
|
8,058
|
Income tax benefit
(provision)
|
|
1,123
|
|
(1,968)
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
(1,999)
|
|
$
6,090
|
|
|
|
|
|
(Losses) Earnings
per share:
|
|
|
|
|
Basic net (losses)
earnings per common share
|
|
$
(0.79)
|
|
$
1.40
|
Diluted net (losses)
earnings per common share
|
|
$
(0.79)
|
|
$
1.39
|
|
|
|
|
|
Dividends per common
share
|
|
$
0.24
|
|
$
0.24
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands)
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
42,135
|
|
$
20,532
|
Restricted
cash
|
|
8,847
|
|
10,535
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
158,126
|
|
189,039
|
Inventory
|
|
22,275
|
|
26,919
|
Derivative
assets
|
|
157
|
|
—
|
Prepayments and other
current assets
|
|
3,028
|
|
3,118
|
Total current
assets
|
|
234,568
|
|
250,143
|
|
|
|
|
|
Property and equipment,
net
|
|
110,264
|
|
106,425
|
Operating lease
right-of-use assets, net
|
|
7,414
|
|
7,720
|
Intangible assets,
net
|
|
9,294
|
|
9,745
|
Goodwill
|
|
6,428
|
|
6,428
|
Other assets
|
|
3,595
|
|
3,698
|
Total
assets
|
|
$
371,563
|
|
$
384,159
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
191,704
|
|
$
204,391
|
Accounts payable –
related party
|
|
—
|
|
31
|
Derivative
liabilities
|
|
—
|
|
330
|
Current portion of
finance lease obligations
|
|
5,221
|
|
4,382
|
Current portion of
operating lease liabilities
|
|
2,821
|
|
2,712
|
Current portion of
long-term debt
|
|
2,500
|
|
—
|
Other current
liabilities
|
|
16,627
|
|
19,214
|
Total current
liabilities
|
|
218,873
|
|
231,060
|
Other long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
|
21,250
|
|
24,375
|
Asset retirement
obligations
|
|
2,434
|
|
2,459
|
Finance lease
obligations
|
|
18,677
|
|
12,085
|
Operating lease
liabilities
|
|
4,595
|
|
5,007
|
Deferred taxes and
other liabilities
|
|
14,579
|
|
15,996
|
Total
liabilities
|
|
280,408
|
|
290,982
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
91,155
|
|
93,177
|
Total liabilities and
shareholders' equity
|
|
$
371,563
|
|
$
384,159
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
|
Net (losses)
earnings
|
|
$
(1,999)
|
|
$
6,090
|
Adjustments to
reconcile net (losses) earnings to net cash
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
7,050
|
|
5,013
|
Gains on sales of
property
|
|
(31)
|
|
(491)
|
Provision for doubtful
accounts
|
|
(3)
|
|
(5)
|
Stock-based
compensation expense
|
|
283
|
|
195
|
Deferred income
taxes
|
|
(1,424)
|
|
561
|
Net change in fair
value contracts
|
|
(487)
|
|
(20)
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
30,916
|
|
(74,660)
|
Accounts
receivable/payable, affiliates
|
|
(31)
|
|
48
|
Inventories
|
|
4,644
|
|
(23,440)
|
Income tax
receivable
|
|
—
|
|
1,284
|
Prepayments and other
current assets
|
|
90
|
|
684
|
Accounts
payable
|
|
(12,653)
|
|
91,211
|
Accrued
liabilities
|
|
(2,514)
|
|
(775)
|
Other
|
|
(134)
|
|
178
|
Net cash provided by
operating activities
|
|
23,707
|
|
5,873
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
|
(1,900)
|
|
(3,694)
|
Proceeds from property
sales
|
|
441
|
|
856
|
Net cash used in
investing activities
|
|
(1,459)
|
|
(2,838)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Borrowings under Credit
Agreement
|
|
18,000
|
|
—
|
Repayments under Credit
Agreement
|
|
(18,625)
|
|
—
|
Principal repayments of
finance lease obligations
|
|
(1,576)
|
|
(1,139)
|
Net proceeds from sale
of equity
|
|
549
|
|
—
|
Dividends paid on
common stock
|
|
(681)
|
|
(1,068)
|
Net cash used in
financing activities
|
|
(2,333)
|
|
(2,207)
|
|
|
|
|
|
Increase in cash and
cash equivalents, including restricted cash
|
|
19,915
|
|
828
|
Cash and cash
equivalents, including restricted cash, at beginning of
period
|
|
31,067
|
|
107,317
|
Cash and cash
equivalents, including restricted cash, at end of
period
|
|
$
50,982
|
|
$
108,145
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES NON-GAAP
RECONCILIATIONS (In thousands, except per share
data)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
Reconciliation of
Adjusted Cash Flow to Net (Losses) Earnings:
|
|
|
|
|
Net (losses)
earnings
|
|
$
(1,999)
|
|
$
6,090
|
Add
(subtract):
|
|
|
|
|
Income tax (benefit)
provision
|
|
(1,123)
|
|
1,968
|
Depreciation and
amortization
|
|
7,050
|
|
5,013
|
Gains on sales of
property
|
|
(31)
|
|
(491)
|
Stock-based
compensation expense
|
|
283
|
|
195
|
Inventory liquidation
gains
|
|
—
|
|
(8,717)
|
Inventory valuation
losses
|
|
1,017
|
|
—
|
Net change in fair
value contracts
|
|
(487)
|
|
(20)
|
Adjusted cash
flow
|
|
$
4,710
|
|
$
4,038
|
|
|
|
|
|
Adjusted net
(losses) earnings and (losses) earnings
|
|
|
|
|
per common share
(Non-GAAP):
|
|
|
|
|
Net (losses)
earnings
|
|
$
(1,999)
|
|
$
6,090
|
Add
(subtract):
|
|
|
|
|
Gains on sales of
property
|
|
(31)
|
|
(491)
|
Stock-based
compensation expense
|
|
283
|
|
195
|
Net change in fair
value contracts
|
|
(487)
|
|
(20)
|
Inventory liquidation
gains
|
|
—
|
|
(8,717)
|
Inventory valuation
losses
|
|
1,017
|
|
—
|
Tax effect of
adjustments to earnings (losses)
|
|
(164)
|
|
1,897
|
Adjusted net
losses
|
|
$
(1,381)
|
|
$
(1,046)
|
|
|
|
|
|
Adjusted losses per
common share
|
|
$
(0.55)
|
|
$
(0.24)
|
|
|
|
Reconciliation of
Adjusted Cash Flow to Net Cash
Provided by Operating Activities:
|
|
|
Net cash provided by
operating activities
|
|
$
23,707
|
|
$
5,873
|
Add
(subtract):
|
|
|
|
|
Income tax (benefit)
provision
|
|
(1,123)
|
|
1,968
|
Deferred income
taxes
|
|
1,424
|
|
(561)
|
Provision for doubtful
accounts
|
|
3
|
|
5
|
Inventory liquidation
gains
|
|
—
|
|
(8,717)
|
Inventory valuation
losses
|
|
1,017
|
|
—
|
Changes in assets and
liabilities
|
|
(20,318)
|
|
5,470
|
Adjusted cash
flow
|
|
$
4,710
|
|
$
4,038
|
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SOURCE Adams Resources & Energy, Inc.