AE
$38.55
Adams Resources & Energy
$.24
.63%
Earnings Details
Quarter September 2019
Wednesday, November 6, 2019 4:03:00 PM
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Summary

Adams Resources & Energy (AE) Recent Earnings

Adams Resources & Energy (AE) reported Quarter September 2019 earnings of $0.35 per share on revenue of $450.3 million.. Revenue fell 3.8% compared to the same quarter a year ago.

Results
Reported Earnings
$0.35
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$450.3 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Adams Resources & Energy, Inc. Announces Results For Third Quarter 2019 And Declares Quarterly Dividend

HOUSTON, Nov. 6, 2019 /PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced financial results for the three months ended September 30, 2019 and declared a quarterly cash dividend of $0.24 per common share. 

(PRNewsfoto/Adams Resources & Energy, Inc.)

The Company reported net earnings of $0.6 million, or $0.15 per common share, on revenues of $450.3 million for the third quarter of 2019, compared to net earnings of $2.0 million, or $0.48 per common share, on revenues of $467.9 million for the third quarter of 2018.  On an adjusted basis, net earnings were $1.6 million, or $0.38 per common share, for the third quarter of 2019, compared to net earnings of $1.3 million, or $0.30 per common share, for the third quarter of 2018.

Adjusted net (losses) earnings, adjusted (losses) earnings per 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 below. 

Key Highlights for Third Quarter 2019:

  • Generated revenues of $450.3 million for the third quarter of 2019 compared to $467.9 million for the third quarter of 2018
  • Net cash flow from operating activities increased from $8.6 million for the third quarter of 2018 to $9.4 million for the third quarter of 2019. Grew adjusted cash flow to $6.5 million for the third quarter of 2019 from $4.2 million for the third quarter of 2018.
  • Increased cash and cash equivalents by approximately 7% from $117.1 million at December 31, 2018 to $124.7 million at September 30, 2019
  • Retained strong financial flexibility with no short- or long-term debt as of September 30, 2019
  • Adam's crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 105,801 barrels per day ("bpd") of crude oil during the third quarter of 2019, compared to 70,635 bpd of crude oil during the third quarter of 2018 — an increase of approximately 50%
  • Solidly positioned with 439,173 barrels of crude oil inventory at September 30, 2019 compared to 415,523 barrels at December 31, 2018

"We were pleased with our overall results for this year's third quarter, which included a 54% increase in adjusted cash flow from the third quarter of 2018," said Townes G. Pressler, Executive Chairman.  "We also saw 28% growth in adjusted net earnings year-over-year for the quarter, while revenues and net earnings decreased primarily due to declining gathered crude oil volumes from our captive customer in the Red River area." 

"Our Service Transport business unit began to see lagging market conditions during the quarter, while as our revenue per mile increased 4% from the third quarter of 2018, it decreased 1% from this year's second quarter.  In this environment of slightly declining demand for chemical transport, we are working closely with our customers to maintain trucking rates given our strong history of on-time and safe product delivery.  Supporting these efforts, we remain on schedule with 'stair-casing' the age of our fleet, including the purchase of 86 new tractors and 46 new trailers during the first nine months of 2019, and commitments to purchase an additional 55 tractors and 15 trailers during the remainder of 2019 and into 2020."

"At GulfMark, our legacy and Red River combined crude oil volumes for the third quarter of 2019 increased 4% from the second quarter of 2019 primarily due to volumes increases in the Gulf Coast that were partially offset by continued decreased production in our Red River market areas.  Similar to Service Transport, we are actively improving the combined age of our GulfMark fleet, including the replacement and purchase of 28 new tractors during the first nine months of 2019."

Capital Investments and Dividends

During the third quarter of 2019, the Company spent approximately $12.3 million of capital and paid dividends of $1.0 million ($0.24 per common share).  The majority of the capital spending related to the aforementioned purchase of tractors in Adams' Service Transport subsidiary.  

The Company's Board of Directors declared a quarterly cash dividend for the third quarter of 2019 in the amount of $0.24 per common share, payable on December 20, 2019 to shareholders of record as of December 6, 2019.  Adams' has consistently paid a dividend since 1994, or more than 25 years.    

Outlook

Mr. Pressler concluded, "While the macro-environment has become more challenging over the past months, the Company remains solidly positioned for continued long-term success given our best-in-class safety performance, strategically located footprint of operations, targeted investments to improve the quality of our vehicle fleet and strong corporate financial position.  Supported by our diverse customer base, we also continue to benefit from substantially stable crude oil gathered volumes in our legacy areas that are relatively resilient to resource play production swings."

"For the remainder of this year and into 2020, we remain laser-focused on our peer-leading safety initiatives, including further fleet modernization and enhanced company-wide processes for recruiting and retaining drivers.  In addition, we will execute on additional opportunities to increase efficiencies in our crude oil marketing transportation division, including right sizing the Red River operation to reflect current operating conditions.  Finally, buttressed by a cash position of well over $100 million and no debt outstanding, we are exploring both organic and open market opportunities to further grow the business.  As in the past, all potential investments will be evaluated on a risk-adjusted basis and for what we believe will provide the most long-term benefit for all 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 (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 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.

Adams Resources & Energy, Inc. is primarily engaged in the business of crude oil marketing, transportation and storage, tank truck transportation of liquid chemicals and dry bulk through its two subsidiaries, GulfMark Energy, Inc. and Service Transport Company, respectively.  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. 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
tohmart@adamsresources.com
(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,



2019


2018


2019


2018

Revenues:









Marketing


$

434,609


$

453,626


$

1,331,410


$

1,266,055

Transportation


15,698


14,265


48,498


41,509

Total revenues


450,307


467,891


1,379,908


1,307,564










Costs and expenses:









Marketing


429,507


449,367


1,313,822


1,250,233

Transportation


13,365


12,412


40,902


36,603

General and administrative


2,739


1,533


8,005


6,100

Depreciation and amortization


4,393


2,340


12,266


7,014

Total costs and expenses


450,004


465,652


1,374,995


1,299,950










Operating earnings


303


2,239


4,913


7,614










Other income (expense):









Gain on dissolution of investment




573


Interest income


758


601


2,145


1,486

Interest expense


(242)


(26)


(424)


(60)

Total other income (expense), net


516


575


2,294


1,426










Earnings before income taxes


819


2,814


7,207


9,040

Income tax provision


(179)


(779)


(1,653)


(2,247)










Net earnings


$

640


$

2,035


$

5,554


$

6,793










Earnings per share:









Basic net earnings per common share


$

0.15


$

0.48


$

1.31


$

1.61

Diluted net earnings per common share


$

0.15


$

0.48


$

1.31


$

1.61










Dividends per common share


$

0.24


$

0.22


$

0.70


$

0.66










 

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)




September 30,


December 31,



2019


2018

ASSETS





Current assets:





Cash and cash equivalents


$

124,726


$

117,066

Restricted cash


4,903


Accounts receivable, net of allowance for doubtful accounts


77,665


85,197

Accounts receivable – related party



425

Inventory


24,900


22,779

Derivative assets


129


162

Income tax receivable


2,539


2,404

Prepayments and other current assets


1,391


1,557

Total current assets


236,253


229,590






Property and equipment, net


62,733


44,623

Operating lease right-of-use assets, net


10,137


Intangible assets, net


1,704


Cash deposits and other assets


3,018


4,657

Total assets


$

313,845


$

278,870






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





Accounts payable


$

128,607


$

116,068

Accounts payable – related party


6


29

Derivative liabilities


126


139

Current portion of finance lease obligations


2,142


883

Current portion of operating lease liabilities


2,245


Other current liabilities


10,709


6,148

Total current liabilities


143,835


123,267

Other long-term liabilities:





Asset retirement obligations


1,549


1,525

Finance lease obligations


4,927


3,209

Operating lease liabilities


7,890


Deferred taxes and other liabilities


5,763


4,271

Total liabilities


163,964


132,272






Commitments and contingencies










Shareholders' equity


149,881


146,598

Total liabilities and shareholders' equity


$

313,845


$

278,870

 

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)




Nine Months Ended



September 30,



2019


2018

Operating activities:





Net earnings


$

5,554


$

6,793

Adjustments to reconcile net earnings to net cash





provided by operating activities:





Depreciation and amortization


12,266


7,014

Gains on sales of property


(1,386)


(890)

Provision for doubtful accounts


(36)


(95)

Stock-based compensation expense


352


144

Deferred income taxes


1,493


(685)

Net change in fair value contracts


20


5

Gain on dissolution of AREC


(573)


Changes in assets and liabilities:





Accounts receivable


8,520


12,830

Accounts receivable/payable, affiliates


(23)


1

Inventories


(2,121)


(22,568)

Income tax receivable


(135)


1,317

Prepayments and other current assets


166


(7)

Accounts payable


13,613


22,254

Accrued liabilities


4,561


3,815

Other


871


(103)

Net cash provided by operating activities


43,142


29,825






Investing activities:





Property and equipment additions


(25,425)


(7,756)

Asset acquisition


(5,624)


Proceeds from property sales


2,853


1,314

Proceeds from dissolution of AREC


998


Insurance and state collateral refunds


750


1,070

Net cash used in investing activities


(26,448)


(5,372)






Financing activities:





Principal repayments of finance lease obligations


(1,171)


(288)

Dividends paid on common stock


(2,960)


(2,784)

Net cash used in financing activities


(4,131)


(3,072)






Increase in cash and cash equivalents, including restricted cash


12,563


21,381

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


117,066


109,393

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


$

129,629


$

130,774

 

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,



2019


2018


2019


2018

Reconciliation of Adjusted Cash Flow to
   Net Earnings:









Net earnings


$

640


$

2,035


$

5,554


$

6,793

Add (subtract):









Income tax provision


179


779


1,653


2,247

Depreciation and amortization


4,393


2,340


12,266


7,014

Gains on sales of property


(952)


(444)


(1,386)


(890)

Gain on dissolution of AREC




(573)


Stock-based compensation expense


155


141


352


144

Inventory liquidation gains



(60)


(1,459)


(2,535)

Inventory valuation losses


2,051




Net change in fair value contracts


1


8


20


5

Insurance proceeds for Hurricane
   Harvey claims



(610)



(610)

Adjusted cash flow


$

6,467


$

4,189


$

16,427


$

12,168













Three Months Ended


Nine Months Ended



September 30,


September 30,



2019


2018


2019


2018

Adjusted net earnings and earnings per
   common share (Non-GAAP):









Net earnings


$

640


$

2,035


$

5,554


$

6,793

Add (subtract):









Gain on dissolution of AREC




(573)


Gains on sales of property


(952)


(444)


(1,386)


(890)

Stock-based compensation expense


155


141


352


144

Net change in fair value contracts


1


8


20


5

Inventory liquidation gains



(60)


(1,459)


(2,535)

Inventory valuation losses


2,051




Insurance proceeds for Hurricane
   Harvey claims



(610)



(610)

Tax effect of adjustments to earnings


(264)


203


639


817

Adjusted net earnings


$

1,631


$

1,273


$

3,147


$

3,724










Adjusted earnings per common share


$

0.38


$

0.30


$

0.73


$

0.88

 

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands)




Three Months Ended


Nine Months Ended



September 30,


September 30,



2019


2018


2019


2018

Reconciliation of Adjusted Cash Flow to
  Net Cash Provided by Operating
  Activities:









Net cash provided by operating activities


$

9,394


$

8,588


$

43,142


$

29,825

Add (subtract):









Income tax benefit (provision)


179


779


1,653


2,247

Deferred income taxes


(481)


(147)


(1,493)


685

Provision for doubtful accounts



63


36


95

Inventory liquidation gains



(60)


(1,459)


(2,535)

Inventory valuation losses


2,051




Harvey insurance proceeds



(610)



(610)

Changes in assets and liabilities


(4,676)


(4,424)


(25,452)


(17,539)

Adjusted cash flow


$

6,467


$

4,189


$

16,427


$

12,168

 

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SOURCE Adams Resources & Energy, Inc.