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<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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