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