Reports Year-over-Year Increase in Cash Flow
from Operations and Total Liquidity
HOUSTON, March 13,
2024 /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 and year ended December
31, 2023.
Fourth Quarter 2023 Financial Summary
- Total revenue of $709.8 million,
versus $747.7 million for the fourth
quarter of 2022.
- Net loss for the quarter improved $6.4
million year-over-year to ($0.9)
million, or ($0.34) per common
share.
- Adjusted net earnings of $0.1
million, or $0.03 per diluted
common share, compared to adjusted net loss of ($2.7) million, or ($0.85) per common share, for the prior-year
quarter.
- Net cash provided by operating activities of $22.4 million, versus net cash used in operating
activities of $2.1 million for the
fourth quarter of 2022.
- Cash and cash equivalents of $33.3
million at December 31, 2023
versus $20.5 million at December 31, 2022 and $16.3 million at September
30, 2023.
- Liquidity of $80.3 million at
December 31, 2023, versus
$55.9 million at September 30, 2023 and $72.1 million at December
31, 2022.
- Paid dividends of $0.24 per
common share.
Full Year 2023 Financial Summary
- Net income of $0.2 million, or
$0.08 per diluted common share, on
revenues of $2.75 billion, compared
to $3.5 million, or $0.85 per diluted common share, on revenues of
$3.37 billion for the prior
year.
- Adjusted net loss of ($3.7)
million, or ($1.45) per common
share, compared to adjusted net earnings of $4.2 million, or $1.02 per diluted common share in the prior
year.
- Net cash provided by operating activities of $30.3 million, compared to $13.8 million for the full year 2022.
Adjusted net (losses) earnings and adjusted net (losses)
earnings per common share are non-generally accepted accounting
principle ("non-GAAP") financial measures that are defined and
reconciled, along with the non-GAAP financial measure adjusted cash
flow in the financial tables later in this release.
"Our performance in the fourth quarter showcased several
encouraging highlights in a very challenging environment. Our crude
oil marketing segment demonstrated a sequential increase in
operating income despite a number of headwinds," said Kevin J. Roycraft, Chief Executive Officer of
Adams. "Moreover, we increased our
cash balance and liquidity and nearly tripled our net income on a
sequential basis."
"We believe the challenges facing our GulfMark and Service
Transport segments are expected to remain in place for the next few
months, and we anticipate a gradual recovery to begin late in the
first half of 2024," Mr. Roycraft continued. "Our Company remains
in a very strong financial position to navigate the continued
macroeconomic challenges affecting our industries. We are
well-prepared to deliver meaningful performance when our key
markets begin to improve. In addition, our continued commitment to
our dividend should deliver long-term value to our shareholders,"
Mr. Roycraft concluded.
Additional Operational Highlights
- In the fourth quarter, Adams'
crude oil marketing subsidiary, GulfMark Energy, Inc. ("GulfMark"),
successfully exited its Red River
operations in Oklahoma and
North Texas, recognizing nearly
$1 million in one-time expenses
associated with the closure, as well as $2.6
million in gains on sales of liquidated equipment. GulfMark
marketed 73,381 barrels per day ("bpd") of crude oil during the
fourth quarter of 2023, compared to 99,441 bpd during the fourth
quarter of 2022 and 92,556 bpd for the third quarter of 2023. The
primary driver for the barrel reduction was the Red River closure.
For the full year 2023, GulfMark marketed 87,985 bpd of crude oil
versus 94,873 bpd for the full year 2022.
- The collective fleet of Service Transport Company ("Service
Transport"), Adams' liquid
chemicals, pressurized gases, asphalt and dry bulk transportation
subsidiary, traveled 6.13 million miles during the fourth quarter
of 2023, versus 6.07 million miles during the fourth quarter of
2022 and 6.51 million miles during the third quarter of 2023. For
the full year 2023, Service Transport traveled 25.5 million miles
versus 26.5 million miles for the full year 2022.
- Adams' crude oil pipeline and
storage segment, which includes the Victoria Express Pipeline
System, throughput was 9,377 bpd for the fourth quarter of 2023,
compared to 10,615 bpd for the fourth quarter of 2022 and 8,548 bpd
for the third quarter of 2023. Terminalling volumes were 9,589 bpd
for the fourth quarter of 2023, versus 10,833 bpd for the fourth
quarter of 2022 and 9,350 bpd for the third quarter of 2023. For
the full year 2023, pipeline throughput was 9,140 bpd versus 11,084
bpd for the full year 2022, while terminalling volumes were 10,026
bpd for 2023 versus 11,296 bpd for 2022.
- The logistics and repurposing segment, which includes the
Firebird Bulk Carriers, Inc. and Phoenix Oil, Inc. businesses
acquired in August 2022, had another
quarter of positive impact on quarterly and full year 2023 cash
flow.
- Adams' remained solidly
positioned with 267,731 barrels of crude oil inventory at
December 31, 2023 compared to 328,562
barrels at December 31, 2022.
- Ended 2023 with a combined owned or leased fleet across the
organization of 605 tractors and 1,131 trailers compared to 668
tractors and 1,219 trailers at the end of 2022. Through its
continued targeted efforts to maintain a modernized fleet,
Adams' average life of its tractor
fleet was 3.5 years at December 31,
2023 compared to 3.6 years at December 31, 2022.
Capital Investments and Dividends
During the fourth quarter of 2023, the Company had capital
expenditures of $3.0 million for the
purchase of eight tractors, thirteen trailers and other field
equipment. In addition, Adams paid dividends of $0.6 million, or $0.24 per common share.
For the full year 2023, Adams
had capital expenditures of $11.9
million relating to the purchase of 26 tractors and 24
trailers, the purchase of land for our Dayton expansion project,
and other various
equipment.
As previously announced on February 20,
2024, the Company's Board of Directors declared a quarterly
cash dividend for the fourth quarter of 2023 in the amount of
$0.24 per common share, payable on
March 22, 2024 to shareholders of
record as of March 8, 2024.
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 reconciliations of
these non-GAAP financial measures 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 fourth
quarter results on Thursday, March 14,
2024 at 9:00 a.m. ET
(8:00 a.m. CT). To participate in the
live conference call, dial 1-844-413-3976 (Toll-Free) within the
U.S., or 1-412-317-1802 (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 1-877-344-7529
(Toll-Free) within the U.S., or 1-412-317-0088 (Toll-Required)
outside the U.S. and entering code 9826581.
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 as
well as future industry developments and economic conditions. 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 or conditions, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
Marketing
|
$ 671,682
|
|
$ 707,728
|
|
$ 2,585,355
|
|
$ 3,232,193
|
Transportation
|
23,256
|
|
26,322
|
|
98,359
|
|
112,376
|
Pipeline and
storage
|
15
|
|
—
|
|
323
|
|
—
|
Logistics and
repurposing
|
14,798
|
|
13,671
|
|
61,256
|
|
22,348
|
Total
revenues
|
709,751
|
|
747,721
|
|
2,745,293
|
|
3,366,917
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Marketing
|
665,868
|
|
710,121
|
|
2,560,284
|
|
3,208,595
|
Transportation
|
18,676
|
|
21,702
|
|
80,991
|
|
89,973
|
Pipeline and
storage
|
757
|
|
703
|
|
3,107
|
|
2,502
|
Logistics and
repurposing
|
14,269
|
|
12,069
|
|
55,717
|
|
19,651
|
General and
administrative
|
4,283
|
|
4,858
|
|
14,932
|
|
17,718
|
Depreciation and
amortization
|
6,574
|
|
6,598
|
|
27,863
|
|
22,707
|
Total costs and
expenses
|
710,427
|
|
756,051
|
|
2,742,894
|
|
3,361,146
|
|
|
|
|
|
|
|
|
Operating (losses)
earnings
|
(676)
|
|
(8,330)
|
|
2,399
|
|
5,771
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
578
|
|
256
|
|
1,471
|
|
921
|
Interest
expense
|
(859)
|
|
(918)
|
|
(3,384)
|
|
(1,287)
|
Total other
(expense) income, net
|
(281)
|
|
(662)
|
|
(1,913)
|
|
(366)
|
|
|
|
|
|
|
|
|
(Losses) earnings
before income taxes
|
(957)
|
|
(8,992)
|
|
486
|
|
5,405
|
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
83
|
|
1,723
|
|
(274)
|
|
(1,918)
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
(874)
|
|
$
(7,269)
|
|
$
212
|
|
$
3,487
|
|
|
|
|
|
|
|
|
(Losses) earnings
per share:
|
|
|
|
|
|
|
|
Basic net (losses)
earnings per common share
|
$
(0.34)
|
|
$
(2.34)
|
|
$
0.08
|
|
$
0.86
|
Diluted net (losses)
earnings per common share
|
$
(0.34)
|
|
$
(2.34)
|
|
$
0.08
|
|
$
0.85
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
$
0.24
|
|
$
0.24
|
|
$
0.96
|
|
$
0.96
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
|
|
December
31,
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
33,256
|
|
$
20,532
|
Restricted
cash
|
11,990
|
|
10,535
|
Accounts receivable,
net of allowance for doubtful accounts
|
164,295
|
|
189,039
|
Inventory
|
19,827
|
|
26,919
|
Prepayments and other
current assets
|
3,103
|
|
3,118
|
Total current
assets
|
232,471
|
|
250,143
|
|
|
|
|
Property and equipment,
net
|
105,065
|
|
106,425
|
Operating lease
right-of-use assets, net
|
5,832
|
|
7,720
|
Intangible assets,
net
|
7,985
|
|
9,745
|
Goodwill
|
6,673
|
|
6,428
|
Other assets
|
3,308
|
|
3,698
|
Total
assets
|
$
361,334
|
|
$
384,159
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
183,102
|
|
$
204,391
|
Accounts payable –
related party
|
—
|
|
31
|
Derivative
liabilities
|
—
|
|
330
|
Current portion of
finance lease obligations
|
6,206
|
|
4,382
|
Current portion of
operating lease liabilities
|
2,829
|
|
2,712
|
Current portion of
long-term debt
|
2,500
|
|
—
|
Other current
liabilities
|
16,150
|
|
19,214
|
Total current
liabilities
|
210,787
|
|
231,060
|
Other long-term
liabilities:
|
|
|
|
Long-term
debt
|
19,375
|
|
24,375
|
Asset retirement
obligations
|
2,514
|
|
2,459
|
Finance lease
obligations
|
19,685
|
|
12,085
|
Operating lease
liabilities
|
3,006
|
|
5,007
|
Deferred taxes and
other liabilities
|
13,251
|
|
15,996
|
Total
liabilities
|
268,618
|
|
290,982
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity
|
92,716
|
|
93,177
|
Total liabilities and
shareholders' equity
|
$
361,334
|
|
$
384,159
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
(874)
|
|
$
(7,269)
|
|
$
212
|
|
$
3,487
|
Adjustments to
reconcile net (losses) earnings to net cash
provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
6,574
|
|
6,598
|
|
27,863
|
|
22,707
|
Gains on sales of
property
|
(2,607)
|
|
(803)
|
|
(4,036)
|
|
(2,512)
|
Provision for doubtful
accounts
|
—
|
|
—
|
|
29
|
|
(20)
|
Stock-based
compensation expense
|
149
|
|
310
|
|
1,193
|
|
1,022
|
Change in contingent
consideration liability
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Deferred income
taxes
|
(2,419)
|
|
(375)
|
|
(2,416)
|
|
(2,136)
|
Net change in fair
value contracts
|
5
|
|
2,237
|
|
(330)
|
|
353
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
54,968
|
|
9,483
|
|
24,715
|
|
(46,577)
|
Accounts
receivable/payable, affiliates
|
—
|
|
16
|
|
(31)
|
|
33
|
Inventories
|
7,823
|
|
2,925
|
|
7,092
|
|
(7,334)
|
Income tax
receivable
|
510
|
|
—
|
|
—
|
|
6,424
|
Prepayments and other
current assets
|
(633)
|
|
(1,060)
|
|
15
|
|
(592)
|
Accounts
payable
|
(43,509)
|
|
(12,163)
|
|
(21,270)
|
|
34,762
|
Accrued
liabilities
|
2,294
|
|
(2,162)
|
|
(415)
|
|
4,327
|
Other
|
156
|
|
208
|
|
220
|
|
(167)
|
Net cash
provided by (used in) operating
activities
|
22,437
|
|
(2,055)
|
|
30,275
|
|
13,777
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Property and equipment
additions
|
(2,980)
|
|
(694)
|
|
(11,897)
|
|
(7,491)
|
Acquisition of Firebird
and Phoenix, net of cash acquired
|
—
|
|
443
|
|
—
|
|
(33,147)
|
Proceeds from property
sales
|
5,707
|
|
893
|
|
8,785
|
|
3,102
|
Insurance and state
collateral refunds
|
—
|
|
1,202
|
|
—
|
|
1,533
|
Net cash
provided by (used in) investing activities
|
2,727
|
|
1,844
|
|
(3,112)
|
|
(36,003)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Borrowings under Credit
Agreement
|
—
|
|
72,000
|
|
76,000
|
|
117,000
|
Repayments under Credit
Agreement
|
(625)
|
|
(62,625)
|
|
(78,500)
|
|
(92,625)
|
Principal repayments of
finance lease obligations
|
(3,572)
|
|
(1,250)
|
|
(8,516)
|
|
(4,741)
|
Cash paid for debt
issuance costs
|
—
|
|
(1,679)
|
|
—
|
|
(1,679)
|
Repurchase of common
shares from KSA
|
—
|
|
(69,928)
|
|
—
|
|
(69,928)
|
Net proceeds from sale
of equity
|
—
|
|
1,441
|
|
549
|
|
1,724
|
Dividends paid on
common stock
|
(609)
|
|
(595)
|
|
(2,517)
|
|
(3,775)
|
Net cash
used in financing activities
|
(4,806)
|
|
(62,636)
|
|
(12,984)
|
|
(54,024)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
in cash and cash equivalents,
including restricted cash
|
20,358
|
|
(62,847)
|
|
14,179
|
|
(76,250)
|
Cash and cash
equivalents, including restricted cash,
at
beginning of period
|
24,888
|
|
93,914
|
|
31,067
|
|
107,317
|
Cash and cash
equivalents, including restricted cash,
at end
of period
|
$
45,246
|
|
$
31,067
|
|
$
45,246
|
|
$
31,067
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Adjusted Cash Flow to
|
|
|
|
|
|
|
|
|
Net (Losses)
Earnings:
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
(874)
|
|
$ (7,269)
|
|
$
212
|
|
$
3,487
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
(83)
|
|
(1,723)
|
|
274
|
|
1,918
|
Depreciation and
amortization
|
|
6,574
|
|
6,598
|
|
27,863
|
|
22,707
|
Gains on sales of
property
|
|
(2,607)
|
|
(803)
|
|
(4,036)
|
|
(2,512)
|
Stock-based
compensation expense
|
|
149
|
|
310
|
|
1,193
|
|
1,022
|
Change in contingent
consideration liability
|
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Inventory valuation
losses
|
|
3,673
|
|
4,070
|
|
751
|
|
2,008
|
Net change in fair
value contracts
|
|
5
|
|
2,237
|
|
(330)
|
|
353
|
Adjusted cash
flow
|
|
$
6,837
|
|
$
3,420
|
|
$ 23,361
|
|
$ 28,983
|
Reconciliation of
Net (Losses) Earnings to Adjusted
|
|
|
|
|
|
|
|
|
Net (Losses)
Earnings and Adjusted (Losses)
|
|
|
|
|
|
|
|
|
Earnings per Common
Share:
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
|
$
(874)
|
|
$ (7,269)
|
|
$
212
|
|
$
3,487
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Gains on sales of
property
|
|
(2,607)
|
|
(803)
|
|
(4,036)
|
|
(2,512)
|
Stock-based
compensation expense
|
|
149
|
|
310
|
|
1,193
|
|
1,022
|
Change in contingent
consideration liability
|
|
—
|
|
—
|
|
(2,566)
|
|
—
|
Net change in fair
value contracts
|
|
5
|
|
2,237
|
|
(330)
|
|
353
|
Inventory valuation
losses
|
|
3,673
|
|
4,070
|
|
751
|
|
2,008
|
Tax effect of
adjustments to (losses) earnings
|
|
(256)
|
|
(1,221)
|
|
1,048
|
|
(183)
|
Adjusted net earnings
(losses)
|
|
$
90
|
|
$ (2,676)
|
|
$ (3,728)
|
|
$
4,175
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(losses) per common share
|
|
$
0.03
|
|
$
(0.85)
|
|
$
(1.45)
|
|
$
1.02
|
Reconciliation of
Adjusted Cash Flow to Net Cash
|
|
|
|
|
|
|
|
|
Provided by (Used
in) Operating Activities:
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$ 22,437
|
|
$ (2,055)
|
|
$ 30,275
|
|
$ 13,777
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
(83)
|
|
(1,723)
|
|
274
|
|
1,918
|
Deferred income
taxes
|
|
2,419
|
|
375
|
|
2,416
|
|
2,136
|
Provision for doubtful
accounts
|
|
—
|
|
—
|
|
(29)
|
|
20
|
Inventory valuation
losses
|
|
3,673
|
|
4,070
|
|
751
|
|
2,008
|
Changes in assets and
liabilities
|
|
(21,609)
|
|
2,753
|
|
(10,326)
|
|
9,124
|
Adjusted
cash flow
|
|
$
6,837
|
|
$
3,420
|
|
$ 23,361
|
|
$ 28,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Adams Resources & Energy, Inc.