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

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

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

    PR Newswire


    HOUSTON

    ,

    Nov. 4, 2021

    /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, 2021 and declared a quarterly cash dividend of

    $0.24

    per common share.

    • Reported net earnings of

      $1.5 million

      , or

      $0.36

      per diluted common share, on revenues of

      $568.2 million

      for the third quarter of 2021, compared to

      $3.1 million

      , or

      $0.72

      per diluted common share, on revenues of

      $266.9 million

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

      $12.1 million

      for the third quarter of 2021, versus net cash used in operating activities of

      $19.6 million

      for the third 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

      $1.8 million

      , or

      $0.41

      per diluted common share, for the third quarter of 2021, compared to

      $2.5 million

      , or

      $0.60

      per diluted common share, for the third quarter of 2020.
    • Produced adjusted cash flow for the third quarter of 2021 of

      $7.3 million

      versus

      $10.3 million

      for the third quarter of 2020.


    Adjusted net earnings, adjusted 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 Highlights for Q3 2021

    • Grew its cash and cash equivalents position to

      $95.6 million

      at

      September 30, 2021

      , which represented a 143% increase from

      $39.3 million

      at

      December 31, 2020

      .
    • Increased its financial flexibility with liquidity of

      $122.1 million

      at

      September 30, 2021

      , including cash and cash equivalents and

      $26.5 million

      available under the Company’s

      $40.0 million

      Credit Agreement.
    • Adam’s crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 91,941 barrels per day (“bpd”) of crude oil during the third quarter of 2021, compared to 90,896 bpd during the third quarter of 2020 and 89,585 bpd during the second quarter of 2021. GulfMark held 340,276 barrels of crude oil inventory at

      September 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 6.93 million miles during the third quarter of 2021, versus 7.63 million miles during the third quarter of 2020 and 7.25 million miles during the second quarter of 2021. Contributing to the third quarter year-over-year decrease in miles traveled was the temporary reduction of activity levels in

      Louisiana

      due to the impacts of Hurricane Ida. This was partially offset by increased activity related to 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

      .

    • Adams’

      crude oil pipeline and storage segment, which was established following the purchase of the Victoria Express Pipeline System (“VEX Pipeline System”) in

      October 2020

      , further expanded its scope of operations during the third quarter of 2021. Pipeline throughput increased to 9,759 bpd from 7,876 bpd for the second quarter of 2021, and terminalling volumes grew to 9,159 bpd for the third quarter of 2021 from 8,106 bpd for the second quarter of 2021.


    Kevin J. Roycraft

    ,

    Adams’

    Chief Executive Officer, commented, “We are pleased with the operational and financial performance of both GulfMark and Service Transport during the third quarter of 2021.  GulfMark continued to be a steady performer during the period while Service Transport’s improved efficiencies overcame some of the operational disruptions from Hurricane Ida.  Looking at our pipeline and storage segment, we remain pleased with the performance of the VEX Pipeline System that was acquired in October of last year as we produced another quarter of positive cash flow.”


    Capital Investments and Dividends

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

    $6.3 million

    for tractors 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 third quarter of 2021 of

    $0.24

    per common share, payable on

    December 17, 2021

    , to shareholders of record as of

    December 3

    , 2021.

    Adams’

    has consistently paid a dividend since 1994.


    Outlook

    Mr. Roycraft continued, “As we look to the remainder of this year and into 2022, we believe we are well positioned to execute on additional targeted initiatives to drive increased efficiencies designed for further leverage on our recently acquired assets and diversify our service offerings for the benefit of our customers.  We also look forward to leveraging additional opportunities to prudently expand our business through prudent acquisitions as we have done so successfully in the past.”

    “We believe our strong financial position remains a key differentiator for

    Adams

    as we operate in a continued positive operating backdrop moving into 2022,” Mr. Roycraft concluded. “As important is our best-in-class team of employees that remain squarely focused on ensuring our customers receive unparalleled service quality and reliability. I look forward to continuing to work closely with our dedicated team as we strive to take the Company to new heights and drive incremental long-term value to 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 and adjusted 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 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



    Nine Months Ended



    September 30,



    September 30,



    2021



    2020



    2021



    2020



    Revenues:


    Marketing


    $


    543,228


    $


    245,184


    $


    1,310,343


    $


    722,546


    Transportation


    24,826


    21,720


    69,558


    50,121


    Pipeline and storage


    127


    —


    515


    —


    Total revenues


    568,181


    266,904


    1,380,416


    772,667



    Costs and expenses:


    Marketing


    537,362


    237,479


    1,285,650


    721,798


    Transportation


    19,605


    17,105


    56,143


    41,178


    Pipeline and storage


    562


    —


    1,594


    —


    General and administrative


    3,502


    1,405


    9,839


    7,030


    Depreciation and amortization


    4,849


    4,859


    14,703


    13,610


    Total costs and expenses


    565,880


    260,848


    1,367,929


    783,616



    Operating earnings (losses)


    2,301


    6,056


    12,487


    (10,949)



    Other income (expense):


    Interest and other income


    37


    105


    233


    614


    Interest expense


    (178)


    (70)


    (602)


    (288)


    Total other (expense) income, net


    (141)


    35


    (369)


    326



    Earnings (losses) before income taxes


    2,160


    6,091


    12,118


    (10,623)


    Income tax (provision) benefit


    (614)


    (3,018)


    (3,055)


    5,772



    Net earnings (losses)


    $


    1,546


    $


    3,073


    $


    9,063


    $


    (4,851)



    Earnings (losses) per share:


    Basic net earnings (losses) per common share


    $


    0.36


    $


    0.72


    $


    2.13


    $


    (1.14)


    Diluted net earnings (losses) per common share


    $


    0.36


    $


    0.72


    $


    2.12


    $


    (1.14)



    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,



    2021



    2020



    ASSETS


    Current assets:


    Cash and cash equivalents


    $


    95,634


    $


    39,293


    Restricted cash


    6,788


    12,772


    Accounts receivable, net of allowance for doubtful accounts


    130,169


    99,799


    Accounts receivable – related party


    5


    —


    Inventory


    24,362


    19,336


    Derivative assets


    1,005


    61


    Income tax receivable


    6,189


    13,288


    Prepayments and other current assets


    1,509


    2,964


    Total current assets


    265,661


    187,513


    Property and equipment, net


    90,739


    94,134


    Operating lease right-of-use assets, net


    7,551


    8,051


    Intangible assets, net


    3,509


    4,106


    Other assets


    2,965


    2,383


    Total assets


    $


    370,425


    $


    296,187



    LIABILITIES AND SHAREHOLDERS’ EQUITY


    Current liabilities:


    Accounts payable


    $


    154,860


    $


    85,991


    Derivative liabilities


    964


    52


    Current portion of finance lease obligations


    4,028


    4,112


    Current portion of operating lease liabilities


    2,201


    2,050


    Other current liabilities


    13,084


    22,343


    Total current liabilities


    175,137


    114,548


    Other long-term liabilities:


    Long-term debt


    8,000


    —


    Asset retirement obligations


    2,359


    2,308


    Finance lease obligations


    10,434


    11,507


    Operating lease liabilities


    5,353


    6,000


    Deferred taxes and other liabilities


    11,060


    12,732


    Total liabilities


    212,343


    147,095


    Commitments and contingencies


    Shareholders’ equity


    158,082


    149,092


    Total liabilities and shareholders’ equity


    $


    370,425


    $


    296,187



    ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES



    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



    (In thousands)



    Nine Months Ended



    September 30,



    2021



    2020



    Operating activities:


    Net earnings (losses)


    $


    9,063


    $


    (4,851)


    Adjustments to reconcile net earnings (losses) to net cash


    provided by (used in) operating activities:


    Depreciation and amortization


    14,703


    13,610


    Gains on sales of property


    (532)


    (985)


    Provision for doubtful accounts


    (3)


    (27)


    Stock-based compensation expense


    641


    453


    Deferred income taxes


    (1,664)


    (1,503)


    Net change in fair value contracts


    (32)


    (3)



    Changes in assets and liabilities:


    Accounts receivable


    (30,367)


    (93)


    Accounts receivable/payable, affiliates


    (5)


    153


    Inventories


    (5,026)


    10,465


    Income tax receivable


    7,099


    (1,782)


    Prepayments and other current assets


    1,455


    142


    Accounts payable


    68,766


    (70,082)


    Accrued liabilities


    770


    4,396


    Other


    (636)


    17


    Net cash provided by (used in) operating activities


    64,232


    (50,090)



    Investing activities:


    Property and equipment additions


    (9,929)


    (3,589)


    Asset acquisition


    —


    (9,163)


    Proceeds from property sales


    1,886


    2,282


    Insurance and state collateral refunds


    —


    1,127


    Net cash used in investing activities


    (8,043)


    (9,343)



    Financing activities:


    Borrowings under Credit Agreement


    8,000


    —


    Principal repayments of finance lease obligations


    (3,240)


    (1,677)


    Payment for financed portion of VEX acquisition


    (10,000)


    —


    Net proceeds from sale of equity


    2,504


    —


    Payment of contingent consideration liability


    —


    (111)


    Dividends paid on common stock


    (3,096)


    (3,063)


    Net cash used in financing activities


    (5,832)


    (4,851)



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


    50,357


    (64,284)



    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


    $


    102,422


    $


    57,971



    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,



    2021



    2020



    2021



    2020



    Reconciliation of Adjusted Cash Flow to



    Net Earnings (Losses):


    Net earnings (losses)


    $


    1,546


    $


    3,073


    $


    9,063


    $


    (4,851)


    Add (subtract):


    Income tax (benefit) provision


    614


    3,018


    3,055


    (5,772)


    Depreciation and amortization


    4,849


    4,859


    14,703


    13,610


    Gains on sales of property


    (267)


    (845)


    (532)


    (985)


    Stock-based compensation expense


    224


    149


    641


    453


    Early retirement and terminations costs


    —


    —


    —


    431


    Inventory liquidation gains


    —


    —


    (10,282)


    —


    Inventory valuation losses


    311


    12


    —


    18,196


    Net change in fair value contracts


    (7)


    9


    (32)


    (3)


    Adjusted cash flow


    $


    7,270


    $


    10,275


    $


    16,616


    $


    21,079



    Three Months Ended



    Nine Months Ended



    September 30,



    September 30,



    2021



    2020



    2021



    2020



    Adjusted net (losses) earnings and (losses)



    earnings per common share (Non-GAAP):


    Net earnings (losses)


    $


    1,546


    $


    3,073


    $


    9,063


    $


    (4,851)


    Add (subtract):


    Gains on sales of property


    (267)


    (845)


    (532)


    (985)


    Stock-based compensation expense


    224


    149


    641


    453


    Early retirement and terminations costs


    —


    —


    —


    431


    Net change in fair value contracts


    (7)


    9


    (32)


    (3)


    Inventory liquidation gains


    —


    —


    (10,282)


    —


    Inventory valuation losses


    311


    12


    —


    18,196


    Tax effect of adjustments to earnings (losses)


    (55)


    142


    2,142


    (3,799)


    Adjusted net earnings


    $


    1,752


    $


    2,540


    $


    1,000


    $


    9,442


    Adjusted earnings per common share


    $


    0.41


    $


    0.60


    $


    0.23


    $


    2.23



    ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES



    NON-GAAP RECONCILIATIONS



    (In thousands)



    Three Months Ended



    Nine Months Ended



    September 30,



    September 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


    $


    12,125


    $


    (19,631)


    $


    64,232


    $


    (50,090)


    Add (subtract):


    Income tax provision (benefit)


    614


    3,018


    3,055


    (5,772)


    Deferred income taxes


    28


    (31)


    1,664


    1,503


    Provision for doubtful accounts


    1


    3


    3


    27


    Early retirement and terminations costs


    —


    —


    —


    431


    Inventory liquidation gains


    —


    —


    (10,282)


    —


    Inventory valuation losses


    311


    12


    —


    18,196


    Changes in assets and liabilities


    (5,809)


    26,904


    (42,056)


    56,784


    Adjusted cash flow


    $


    7,270


    $


    10,275


    $


    16,616


    $


    21,079

    Cision
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    SOURCE Adams Resources & Energy, Inc.

    PR Newswire
    November 4, 2021 – 1:05 PM PDT