Adams Resources & Energy, Inc. Announces Results For Second Quarter 2021 And Declares Quarterly Dividend

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    <br /> Adams Resources & Energy, Inc. Announces Results For Second Quarter 2021 And Declares Quarterly Dividend<br />

    Adams Resources & Energy, Inc. Announces Results For Second Quarter 2021 And Declares Quarterly Dividend

    PR Newswire


    HOUSTON

    ,

    Aug. 12, 2021

    /PRNewswire/ — Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (”

    Adams

    ” or the “Company”) today announced operational and financial results for the three months ended June 30, 2021 and declared a quarterly cash dividend of

    $0.24

    per common share.

    • Reported net earnings of

      $4.7 million

      , or

      $1.10

      per diluted common share, on revenues of

      $486.7 million

      for the second quarter of 2021, compared to

      $3.5 million

      , or

      $0.82

      per diluted common share, on revenues of

      $152.3 million

      for the second quarter of 2020.
    • Generated net cash provided by operating activities of

      $29.1 million

      for the second quarter of 2021, compared to net cash used in operating activities of

      $6.6 million

      for the second quarter of 2020. The increase was primarily driven by changes in working capital due to an increase in the market price of crude oil.
    • Reported adjusted net earnings of

      $1.9 million

      , or

      $0.44

      per diluted common share, for the second quarter of 2021, compared to an adjusted net loss of

      $0.8 million

      , or a loss of

      $0.18

      per diluted common share, for the second quarter of 2020.
    • Adjusted cash flow for the second quarter of 2021 was

      $7.4 million

      versus

      $1.9 million

      for the second quarter of 2020.


    Adjusted net earnings (losses), adjusted earnings (losses) 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 Highlights for Q2 2021

    • Maintained strong financial flexibility at

      June 30, 2021

      , including

      $88.7 million

      in cash and cash equivalents. This represented a 126% increase from

      $39.3 million

      at

      December 31, 2020

      .
    • Liquidity of

      $111.4 million

      at

      June 30, 2021

      , including cash and cash equivalents and

      $22.8 million

      available under the Company’s

      $40.0 million

      Credit Agreement entered into in

      May 2021

      .
    • Adam’s crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed approximately 89,585 barrels per day (“bpd”) of crude oil during the second quarter of 2021, compared to 81,152 bpd during the second quarter of 2020 and 82,889 bpd during the first quarter of 2021. GulfMark held 413,973 barrels of crude oil inventory at

      June 30, 2021

      , compared to 421,759 barrels at

      December 31, 2020

      .
    • The collective fleet of Service Transport Company (“Service Transport”),

      Adams’

      liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled approximately 7.25 million miles during the second quarter of 2021, compared to 3.89 million miles during the second quarter of 2020 and 6.93 million miles during the first quarter of 2021. Significantly contributing to the year-over-year increase in miles traveled for the second quarter was the

      June 2020

      purchase of assets from CTL Transportation, which added new services and product lines for the Company’s new and existing customers in new markets in

      Florida

      ,

      Georgia

      ,

      Illinois

      ,

      Missouri

      and

      Ohio

      .


    Kevin J. Roycraft

    ,

    Adams’

    Chief Executive Officer, commented, “We were pleased with our results for the second quarter of 2021, including generating adjusted cash flow that was almost four times higher than both the first quarter of this year and the second quarter of 2020.  Contributing to our financial performance for this year’s second quarter was a continued improvement in the economic backdrop, including increased demand for crude oil and a resulting higher price environment. Our recent acquisitions in our transportation and pipeline and storage segments also benefited our results for the period.  We were especially pleased with the second quarter performance of the VEX Pipeline System, which we acquired in October of last year, producing positive cash flow in its second full quarter of operation.”


    Capital Investments and Dividends

    During the second quarter of 2021, the Company spent capital of

    $3.4 million

    for trailers and other field equipment.  In addition,

    Adams

    paid dividends of

    $1.0 million

    , or

    $0.24

    per common share.


    Adams’

    Board of Directors has declared a quarterly cash dividend for the second quarter of 2021 of

    $0.24

    per common share, payable on

    September 17, 2021

    , to shareholders of record as of

    September 3

    , 2021.

    Adams’

    has consistently paid a dividend since 1994.


    Outlook

    Mr. Roycraft concluded, “Looking to the second half of 2021, we remain focused on increasing efficiencies in each of our business segments.  This includes further integrating our newly acquired terminals and leveraging back haul opportunities with continued efforts to diversify our offerings.  We also plan to grow in new and existing areas with our crude oil marketing segment.  Finally, as we have successfully done in the past, we will continue to evaluate business development opportunities that complement our core businesses and support our mission of providing unparalleled service quality and reliability for our customers.”

    “Underpinning our strategic initiatives to enhance and expand our business is ensuring we maintain a solid financial position.  Our strong balance sheet and significant liquidity served us well in the economic depths associated with the pandemic, and we believe our financial flexibility will continue to differentiate

    Adams

    in the marketplace moving forward.  Also key to our past and future success is the dedicated efforts of our full employee team.  I look forward to working closely with them as we identify and execute on additional targeted opportunities to prudently grow the business for the long-term benefit of our shareholders.”


    Use of Non-GAAP Financial Measures

    This press release and accompanying schedules includes 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.  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 engaged in crude oil marketing, transportation, terminalling and storage and tank truck transportation of liquid chemicals and dry bulk through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC and GulfMark Terminals, LLC.  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


    [email protected]


    (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,



    2021



    2020



    2021



    2020



    Revenues:


    Marketing


    $


    463,092


    $


    140,141


    $


    767,115


    $


    477,362


    Transportation


    23,497


    12,145


    44,732


    28,401


    Pipeline and storage


    155


    —


    388


    —


    Total revenues


    486,744


    152,286


    812,235


    505,763



    Costs and expenses:


    Marketing


    453,081


    131,454


    748,288


    484,319


    Transportation


    19,078


    10,888


    36,538


    24,073


    Pipeline and storage


    488


    —


    1,032


    —


    General and administrative


    2,961


    2,731


    6,337


    5,625


    Depreciation and amortization


    4,801


    4,278


    9,854


    8,751


    Total costs and expenses


    480,409


    149,351


    802,049


    522,768



    Operating earnings (losses)


    6,335


    2,935


    10,186


    (17,005)



    Other income (expense):


    Interest and other income


    62


    144


    196


    509


    Interest expense


    (204)


    (68)


    (424)


    (218)


    Total other (expense) income, net


    (142)


    76


    (228)


    291



    Earnings (losses) before income taxes


    6,193


    3,011


    9,958


    (16,714)


    Income tax (provision) benefit


    (1,484)


    492


    (2,441)


    8,790



    Net earnings (losses)


    $


    4,709


    $


    3,503


    $


    7,517


    $


    (7,924)



    Earnings (losses) per share:


    Basic net earnings (losses) per common share


    $


    1.11


    $


    0.83


    $


    1.77


    $


    (1.87)


    Diluted net earnings (losses) per common share


    $


    1.10


    $


    0.82


    $


    1.76


    $


    (1.87)



    Dividends per common share


    $


    0.24


    $


    0.24


    $


    0.48


    $


    0.48



    ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES



    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



    (In thousands)



    June 30,



    December 31,



    2021



    2020



    ASSETS


    Current assets:


    Cash and cash equivalents


    $


    88,668


    $


    39,293


    Restricted cash


    7,033


    12,772


    Accounts receivable, net of allowance for doubtful accounts


    125,910


    99,799


    Accounts receivable – related party


    4


    —


    Inventory


    29,712


    19,336


    Derivative assets


    1,255


    61


    Income tax receivable


    5,846


    13,288


    Prepayments and other current assets


    2,122


    2,964


    Total current assets


    260,550


    187,513


    Property and equipment, net


    90,577


    94,134


    Operating lease right-of-use assets, net


    7,249


    8,051


    Intangible assets, net


    3,700


    4,106


    Other assets


    2,930


    2,383


    Total assets


    $


    365,006


    $


    296,187



    LIABILITIES AND SHAREHOLDERS’ EQUITY


    Current liabilities:


    Accounts payable


    $


    151,113


    $


    85,991


    Derivative liabilities


    1,221


    52


    Current portion of finance lease obligations


    4,333


    4,112


    Current portion of operating lease liabilities


    2,184


    2,050


    Other current liabilities


    13,556


    22,343


    Total current liabilities


    172,407


    114,548


    Other long-term liabilities:


    Long-term debt


    8,000


    —


    Asset retirement obligations


    2,342


    2,308


    Finance lease obligations


    11,246


    11,507


    Operating lease liabilities


    5,067


    6,000


    Deferred taxes and other liabilities


    11,093


    12,732


    Total liabilities


    210,155


    147,095


    Commitments and contingencies


    Shareholders’ equity


    154,851


    149,092


    Total liabilities and shareholders’ equity


    $


    365,006


    $


    296,187



    ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES



    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



    (In thousands)



    Six Months Ended



    June 30,



    2021



    2020



    Operating activities:


    Net earnings (losses)


    $


    7,517


    $


    (7,924)


    Adjustments to reconcile net earnings (losses) to net cash


    provided by (used in) operating activities:


    Depreciation and amortization


    9,854


    8,751


    Gains on sales of property


    (265)


    (140)


    Provision for doubtful accounts


    (2)


    (24)


    Stock-based compensation expense


    417


    304


    Deferred income taxes


    (1,636)


    (1,534)


    Net change in fair value contracts


    (25)


    (12)



    Changes in assets and liabilities:


    Accounts receivable


    (26,109)


    27,103


    Accounts receivable/payable, affiliates


    (4)


    1


    Inventories


    (10,376)


    6,570


    Income tax receivable


    7,442


    (4,733)


    Prepayments and other current assets


    842


    262


    Accounts payable


    63,831


    (63,013)


    Accrued liabilities


    1,235


    3,875


    Other


    (614)


    55


    Net cash provided by (used in) operating activities


    52,107


    (30,459)



    Investing activities:


    Property and equipment additions


    (3,602)


    (2,880)


    Asset acquisition


    —


    (9,137)


    Proceeds from property sales


    1,316


    514


    Insurance and state collateral refunds


    —


    1,129


    Net cash used in investing activities


    (2,286)


    (10,374)



    Financing activities:


    Borrowings under Credit Agreement


    8,000


    —


    Principal repayments of finance lease obligations


    (2,123)


    (1,070)


    Payment for financed portion of VEX acquisition


    (10,000)


    —


    Payment of contingent consideration liability


    —


    (111)


    Dividends paid on common stock


    (2,062)


    (2,044)


    Net cash used in financing activities


    (6,185)


    (3,225)



    Increase (Decrease) in cash and cash equivalents, including restricted cash


    43,636


    (44,058)



    Cash and cash equivalents, including restricted cash, at beginning of period


    52,065


    122,255



    Cash and cash equivalents, including restricted cash, at end of period


    $


    95,701


    $


    78,197



    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,



    2021



    2020



    2021



    2020



    Reconciliation of Adjusted Cash Flow to



    Net Earnings (Losses):


    Net earnings (losses)


    $


    4,709


    $


    3,503


    $


    7,517


    $


    (7,924)


    Add (subtract):


    Income tax (benefit) provision


    1,484


    (492)


    2,441


    (8,790)


    Depreciation and amortization


    4,801


    4,278


    9,854


    8,751


    Gains on sales of property


    (182)


    —


    (265)


    (140)


    Stock-based compensation expense


    232


    170


    417


    304


    Early retirement and terminations costs


    —


    431


    —


    431


    Inventory liquidation gains


    (3,650)


    (6,031)


    (10,593)


    —


    Inventory valuation losses


    —


    —


    —


    18,184


    Net change in fair value contracts


    (4)


    7


    (25)


    (12)


    Adjusted cash flow


    $


    7,390


    $


    1,866


    $


    9,346


    $


    10,804



    Three Months Ended



    Six Months Ended



    June 30,



    June 30,



    2021



    2020



    2021



    2020



    Adjusted net (losses) earnings and (losses)



    earnings per common share (Non-GAAP):


    Net earnings (losses)


    $


    4,709


    $


    3,503


    $


    7,517


    $


    (7,924)


    Add (subtract):


    Gains on sales of property


    (182)


    —


    (265)


    (140)


    Stock-based compensation expense


    232


    170


    417


    304


    Early retirement and terminations costs


    —


    431


    —


    431


    Net change in fair value contracts


    (4)


    7


    (25)


    (12)


    Inventory liquidation gains


    (3,650)


    (6,031)


    (10,593)


    —


    Inventory valuation losses


    —


    —


    —


    18,184


    Tax effect of adjustments to earnings (losses)


    757


    1,139


    2,197


    (3,941)


    Adjusted net earnings (losses)


    $


    1,862


    $


    (781)


    $


    (752)


    $


    6,902


    Adjusted earnings (losses) per common share


    $


    0.44


    $


    (0.18)


    $


    (0.19)


    $


    1.63



    ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES



    NON-GAAP RECONCILIATIONS



    (In thousands)



    Three Months Ended



    Six Months Ended



    June 30,



    June 30,



    2021



    2020



    2021



    2020



    Reconciliation of Adjusted Cash Flow to Net Cash



    Provided by (Used in) Operating Activities:


    Net cash provided by (used in) operating activities


    $


    29,106


    $


    (6,613)


    $


    52,107


    $


    (30,459)


    Add (subtract):


    Income tax provision (benefit)


    1,484


    (492)


    2,441


    (8,790)


    Deferred income taxes


    807


    (1,155)


    1,636


    1,534


    Provision for doubtful accounts


    1


    —


    2


    24


    Early retirement and terminations costs


    —


    431


    —


    431


    Inventory liquidation gains


    (3,650)


    (6,031)


    (10,593)


    —


    Inventory valuation losses


    —


    —


    —


    18,184


    Changes in assets and liabilities


    (20,358)


    15,726


    (36,247)


    29,880


    Adjusted cash flow


    $


    7,390


    $


    1,866


    $


    9,346


    $


    10,804

    Cision
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    SOURCE Adams Resources & Energy, Inc.

    PR Newswire
    August 12, 2021 – 1:05 PM PDT