ADAMS RESOURCES & ENERGY, INC. ANNOUNCES SECOND QUARTER 2023 RESULTS AND DECLARES QUARTERLY DIVIDEND
HOUSTON, Aug. 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 June 30, 2023. The Company also declared a quarterly cash dividend of $0.24 per common share.
Q2 2023 Financial Summary
- Total revenue of $624.8 million, versus $992.1 million for the second quarter of 2022.
- Net earnings of $0.8 million, or $0.32 per diluted common share, compared to a net loss of $2.0 million, or a loss of $0.79 per common share for the first quarter of 2023 and net earnings of $2.5 million, or $0.56 per diluted common share for the second quarter of 2022.
- Net cash used in operating activities of $27.3 million for the second quarter of 2023, a decrease of $2.7 million in net cash used in operating activities from the prior-year quarter. This decrease 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 cash flow of $7.1 million for the second quarter of 2023, compared to $4.7 million for the first quarter of 2023 and $9.0 million in the prior-year.
- Cash and cash equivalents were $9.0 million as of June 30, 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 $48.6 million at June 30, 2023.
- Paid dividends totaling $0.24 per share during the second quarter of 2023. The Company has consistently paid a dividend since 1994.
Adjusted cash flow is a non-generally accepted accounting principle ("non-GAAP") financial measure that is defined and reconciled, along with the non-GAAP financial measures adjusted net (losses) earnings and adjusted net (losses) earnings per diluted common share, in the financial tables later in this release.
Additional Operational Highlights
- Adams' crude oil marketing subsidiary, GulfMark Energy, Inc. ("GulfMark"), marketed 92,152 barrels per day ("bpd") of crude oil during the second quarter of 2023, compared to 94,876 bpd during the second quarter of 2022 and 94,030 bpd during the first quarter of 2023.
- The collective fleet of Service Transport Company ("Service Transport"), Adams' liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.30 million miles during the second quarter of 2023, versus 6.86 million miles during the second quarter of 2022 and 6.55 million miles during the first quarter of 2023.
- Adams' crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System ("VEX Pipeline System"), throughput was 8,560 bpd for the second quarter of 2023, compared to 13,281 bpd for the second quarter of 2022 and 10,088 bpd for the first quarter of 2023, and terminalling volumes were 10,785 bpd for the second quarter of 2023, compared to 13,704 bpd in the second quarter of 2022, and 10,395 bpd for the first quarter of 2023.
- The 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 369,738 barrels of crude oil inventory at June 30, 2023, compared to 328,562 barrels at December 31, 2022.
"Our second quarter performance contains multiple bright spots in a challenging environment, including our crude oil marketing segment posting a sequential increase in operating income despite a number of headwinds," said Kevin J. Roycraft, Chief Executive Officer of Adams. "Adjusted cash flows also improved sequentially as each segment contributed positively, and we returned to positive net earnings for the quarter."
Capital Investments and Dividends
During the second quarter of 2023, the Company had capital expenditures of $4.0 million primarily for the previously announced purchase of land for the Dayton project, construction of the pipeline connection, three tractors, one trailer and other field equipment. In addition, Adams paid dividends of $0.6 million, or $0.24 per common share.
As part of Adams' on-going capital allocation strategy, the Board of Directors declared a quarterly cash dividend for the second quarter of 2023 of $0.24 per common share, payable on September 22, 2023, to shareholders of record as of September 8, 2023.
Outlook
"We believe the challenges facing our GulfMark and Service Transport segments have reached their lowest point, and we expect a more gradual recovery across our business over the remainder of the year and into 2024," Mr. Roycraft continued.
"Our Company remains in a very strong financial position to withstand the continued macroeconomic challenges facing our industries and is poised to deliver meaningful performance when our key markets begin to improve. This plus our continued commitment to our dividend should deliver long-term value to our shareholders," Mr. Roycraft concluded.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the non-GAAP financial measures of adjusted cash flow, adjusted net earnings (losses) nd 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. 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 second quarter results on Thursday, August 10, 2023 at 9:00 a.m. ET (8:00 a.m. CT). To participate in the live conference call, dial 1-877-344-7529 (Toll-Free) within the U.S., or 1-412-317-0088 (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 1-877-317-6789 (Toll-Free) within the U.S., or 1-412-317-6789 (Toll-Required) outside the U.S. and entering code 6520493.
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 | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues: | ||||||||
Marketing | $ 585,272 | $ 962,516 | $ 1,193,748 | $ 1,710,071 | ||||
Transportation | 24,452 | 29,534 | 50,897 | 56,224 | ||||
Pipeline and storage | 249 | — | 249 | — | ||||
Logistics and repurposing | 14,793 | — | 30,034 | — | ||||
Total revenues | 624,766 | 992,050 | 1,274,928 | 1,766,295 | ||||
Costs and expenses: | ||||||||
Marketing | 579,753 | 955,511 | 1,184,247 | 1,691,158 | ||||
Transportation | 20,260 | 23,674 | 42,673 | 44,539 | ||||
Pipeline and storage | 753 | 606 | 1,691 | 1,160 | ||||
Logistics and repurposing | 13,202 | — | 26,327 | — | ||||
General and administrative | 1,715 | 4,211 | 6,487 | 8,229 | ||||
Depreciation and amortization | 7,303 | 5,088 | 14,353 | 10,101 | ||||
Total costs and expenses | 622,986 | 989,090 | 1,275,778 | 1,755,187 | ||||
Operating earnings (losses) | 1,780 | 2,960 | (850) | 11,108 | ||||
Other income (expense): | ||||||||
Interest and other income | 570 | 303 | 774 | 327 | ||||
Interest expense | (802) | (136) | (1,498) | (250) | ||||
Total other (expense) income, net | (232) | 167 | (724) | 77 | ||||
Earnings (Losses) before income taxes | 1,548 | 3,127 | (1,574) | 11,185 | ||||
Income tax (provision) benefit | (721) | (651) | 402 | (2,619) | ||||
Net earnings (losses) | $ 827 | $ 2,476 | $ (1,172) | $ 8,566 | ||||
Earnings (Losses) per share: | ||||||||
Basic net earnings (losses) per common share | $ 0.33 | $ 0.57 | $ (0.46) | $ 1.96 | ||||
Diluted net earnings (losses) per common share | $ 0.32 | $ 0.56 | $ (0.46) | $ 1.95 | ||||
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, | |||
2023 | 2022 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 8,974 | $ 20,532 | ||
Restricted cash | 8,784 | 10,535 | ||
Accounts receivable, net of allowance for doubtful accounts | 158,433 | 189,039 | ||
Inventory | 26,523 | 26,919 | ||
Income tax receivable | 469 | — | ||
Prepayments and other current assets | 2,608 | 3,118 | ||
Total current assets | 205,791 | 250,143 | ||
Property and equipment, net | 111,834 | 106,425 | ||
Operating lease right-of-use assets, net | 6,783 | 7,720 | ||
Intangible assets, net | 8,837 | 9,745 | ||
Goodwill | 6,673 | 6,428 | ||
Other assets | 3,564 | 3,698 | ||
Total assets | $ 343,482 | $ 384,159 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 162,787 | $ 204,391 | ||
Accounts payable – related party | — | 31 | ||
Derivative liabilities | 30 | 330 | ||
Current portion of finance lease obligations | 6,444 | 4,382 | ||
Current portion of operating lease liabilities | 2,802 | 2,712 | ||
Current portion of long-term debt | 2,500 | — | ||
Other current liabilities | 14,011 | 19,214 | ||
Total current liabilities | 188,574 | 231,060 | ||
Other long-term liabilities: | ||||
Long-term debt | 20,625 | 24,375 | ||
Asset retirement obligations | 2,650 | 2,459 | ||
Finance lease obligations | 20,693 | 12,085 | ||
Operating lease liabilities | 3,986 | 5,007 | ||
Deferred taxes and other liabilities | 15,233 | 15,996 | ||
Total liabilities | 251,761 | 290,982 | ||
Commitments and contingencies | ||||
Shareholders' equity | 91,721 | 93,177 | ||
Total liabilities and shareholders' equity | $ 343,482 | $ 384,159 | ||
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
Three Months Ended | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Operating activities: | |||||||
Net earnings (losses) | $ 827 | $ 2,476 | $ (1,172) | $ 8,566 | |||
Adjustments to reconcile net earnings (losses) to net cash | |||||||
used in operating activities: | |||||||
Depreciation and amortization | 7,303 | 5,088 | 14,353 | 10,101 | |||
Gains on sales of property | (735) | (447) | (766) | (938) | |||
Provision for doubtful accounts | (7) | (3) | (10) | (8) | |||
Stock-based compensation expense | 372 | 263 | 655 | 458 | |||
Change in contingent consideration liability | (2,566) | — | (2,566) | — | |||
Deferred income taxes | 654 | (893) | (770) | (332) | |||
Net change in fair value contracts | 187 | (610) | (300) | (630) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (300) | (55,177) | 30,616 | (129,837) | |||
Accounts receivable/payable, affiliates | — | (48) | (31) | — | |||
Inventories | (4,248) | (18,899) | 396 | (42,339) | |||
Income tax receivable | (469) | 5,140 | (469) | 6,424 | |||
Prepayments and other current assets | 420 | (302) | 510 | 382 | |||
Accounts payable | (28,953) | 29,933 | (41,606) | 121,144 | |||
Accrued liabilities | (50) | 3,389 | (2,564) | 2,614 | |||
Other | 250 | 39 | 116 | 217 | |||
Net cash used in operating activities | (27,315) | (30,051) | (3,608) | (24,178) | |||
Investing activities: | |||||||
Property and equipment additions | (4,008) | (1,089) | (5,908) | (4,783) | |||
Proceeds from property sales | 1,003 | 518 | 1,444 | 1,374 | |||
Net cash used in investing activities | (3,005) | (571) | (4,464) | (3,409) | |||
Financing activities: | |||||||
Borrowings under Credit Agreement | 20,000 | 30,000 | 38,000 | 30,000 | |||
Repayments under Credit Agreement | (20,625) | (30,000) | (39,250) | (30,000) | |||
Principal repayments of finance lease obligations | (1,671) | (1,167) | (3,247) | (2,306) | |||
Net proceeds from sale of equity | — | 283 | 549 | 283 | |||
Dividends paid on common stock | (608) | (1,058) | (1,289) | (2,126) | |||
Net cash used in financing activities | (2,904) | (1,942) | (5,237) | (4,149) | |||
Decrease in cash and cash equivalents, including restricted cash | (33,224) | (32,564) | (13,309) | (31,736) | |||
Cash and cash equivalents, including restricted cash, at beginning of period | 50,982 | 108,145 | 31,067 | 107,317 | |||
Cash and cash equivalents, including restricted cash, at end of period | $ 17,758 | $ 75,581 | $ 17,758 | $ 75,581 | |||
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, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Reconciliation of Adjusted Cash Flow to | ||||||||
Net Earnings (Losses): | ||||||||
Net earnings (losses) | $ 827 | $ 2,476 | $ (1,172) | $ 8,566 | ||||
Add (subtract): | ||||||||
Income tax provision (benefit) | 721 | 651 | (402) | 2,619 | ||||
Depreciation and amortization | 7,303 | 5,088 | 14,353 | 10,101 | ||||
Gains on sales of property | (735) | (447) | (766) | (938) | ||||
Stock-based compensation expense | 372 | 263 | 655 | 458 | ||||
Change in contingent consideration liability | (2,566) | — | (2,566) | — | ||||
Inventory liquidation gains | — | — | — | (7,184) | ||||
Inventory valuation losses | 951 | 1,533 | 1,968 | — | ||||
Net change in fair value contracts | 187 | (610) | (300) | (630) | ||||
Adjusted cash flow | $ 7,060 | $ 8,954 | $ 11,770 | $ 12,992 | ||||
Adjusted net earnings (losses) and earnings | ||||||||
(losses) per common share (Non-GAAP): | ||||||||
Net earnings (losses) | $ 827 | $ 2,476 | $ (1,172) | $ 8,566 | ||||
Add (subtract): | ||||||||
Gains on sales of property | (735) | (447) | (766) | (938) | ||||
Stock-based compensation expense | 372 | 263 | 655 | 458 | ||||
Change in contingent consideration liability | (2,566) | — | (2,566) | — | ||||
Net change in fair value contracts | 187 | (610) | (300) | (630) | ||||
Inventory liquidation gains | — | — | — | (7,184) | ||||
Inventory valuation losses | 951 | 1,533 | 1,968 | — | ||||
Tax effect of adjustments to earnings (losses) | 376 | (155) | 212 | 1,742 | ||||
Adjusted net (losses) earnings | $ (588) | $ 3,060 | $ (1,969) | $ 2,014 | ||||
Adjusted (losses) earnings per common share | $ (0.23) | $ 0.69 | $ (0.78) | $ 0.46 |
Reconciliation of Adjusted Cash Flow to Net Cash | ||||||||
Used in Operating Activities: | ||||||||
Net cash used in operating activities | $ (27,315) | $ (30,051) | $ (3,608) | $ (24,178) | ||||
Add (subtract): | ||||||||
Income tax provision (benefit) | 721 | 651 | (402) | 2,619 | ||||
Deferred income taxes | (654) | 893 | 770 | 332 | ||||
Provision for doubtful accounts | 7 | 3 | 10 | 8 | ||||
Inventory liquidation gains | — | — | — | (7,184) | ||||
Inventory valuation losses | 951 | 1,533 | 1,968 | — | ||||
Changes in assets and liabilities | 33,350 | 35,925 | 13,032 | 41,395 | ||||
Adjusted cash flow | $ 7,060 | $ 8,954 | $ 11,770 | $ 12,992 | ||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/adams-resources--energy-inc-announces-second-quarter-2023-results-and-declares-quarterly-dividend-301897214.html
SOURCE Adams Resources & Energy, Inc.