HOUSTON, Aug. 8, 2017 /PRNewswire/ -- Adams Resources
& Energy, Inc. (NYSE: AE) ("Adams" or the "Company") today
announced its financial results for the three months ended
June 30, 2017.
The Company reported a net loss of $0.3
million, or ($0.07) per common
share, on revenues of $315.2 million
for the second quarter of 2017, compared to net income of
$3.4 million, or $0.81 per common share, on revenues of
$293.2 million for the second quarter
of 2016. On an adjusted basis, net earnings were $1.4 million, or $0.34 per common share, for the second quarter of
2017, compared to a net loss of $0.1
million, or ($0.02) per common
share, for the second quarter of 2016. The second quarter of
2017 includes a loss of $1.6 million
related to the deconsolidation of our oil and gas exploration
segment, which voluntarily filed for Chapter 11 bankruptcy in
April 2017.
Adjusted net (losses) earnings, adjusted (losses) earnings per
common share and cash flow from operations before changes in
working capital are non-generally accepted accounting principle
("non-GAAP") financial measures that are defined and reconciled in
the financial tables below.
Second Quarter 2017 Highlights:
- Gross revenues of approximately $315
million for the second quarter of 2017 compared to
$293 million for the second quarter
of 2016
- Our crude oil marketing subsidiary, GulfMark Energy, Inc.,
marketed approximately 66,817 barrels per day ("bpd") of crude oil
during the second quarter of 2017 and 66,374 bpd of crude oil
during the first quarter of 2017, compared to 75,986 bpd of crude
oil during the second quarter of 2016
- $164 million of liquidity
($104 million of cash and cash
equivalents and $60 million of
undrawn letter of credit facility) as of June 30, 2017
- Generated cash flow from operations before changes in working
capital of $3.5 million for the
second quarter of 2017 compared to $6.5
million for the second quarter of 2016
- Dividend of $0.22 per share for
the second quarter of 2017
- No short or long term debt as of June
30, 2017
"Adams made significant progress toward its strategic exit of
the upstream exploration and production segment, and we anticipate
the sale of substantially all of the upstream assets to close
during the third quarter of 2017. Our diversification of
Service Transport's offerings continued with the launch of ISO tank
container storage and transportation in July 2017. GulfMark
Energy continues to find ways to create value for upstream
producers as evidenced by the slight increase in volumes over the
first quarter of 2017. We are continuing to focus on
leveraging our strong balance sheet through exploring business
development opportunities and strengthening our core businesses
during the second half of 2017," said Thomas S. Smith, President and Chief Executive
Officer.
Capital Investments and Dividends
During the second quarter of 2017, the Company invested
approximately $1.1 million of capital
and paid dividends of $0.9 million
($0.22 per share). The majority of
the capital during the second quarter of 2017 was invested in the
upstream oil and gas exploration and production subsidiary as the
Company participated in several wells in the Permian Basin.
As we disclosed in our press release on April 20, 2017, our oil and gas exploration and
production division filed a voluntary petition of reorganization
under Chapter 11 of the Bankruptcy Code in Delaware. The
Company retained Oil & Gas Asset Clearinghouse, LLC to conduct
an auction, which concluded on August 1,
2017 with the anticipated sale of these assets for aggregate
gross proceeds of approximately $5.0
million. The sale is expected to close during the
third quarter of 2017.
The Company's Board of Directors also declared a quarterly cash
dividend for the second quarter of 2017 in the amount of
$0.22 per common share, payable on
September 20, 2017 to shareholders of
record as of September 6, 2017.
Use of Non-GAAP Financial Measures
This press release
and accompanying schedules includes the non-GAAP financial measures
of operating cash flow before changes in working capital, 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 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 engaged in the
business of crude oil marketing, tank truck transportation of
liquid chemicals and dry bulk, and oil and gas exploration and
production. 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. The actual results of operations can and will be affected
by a variety of risks and other matters including, but not limited
to, changes in commodity prices; changes in expected levels of
natural gas and oil reserves or production; operating hazards,
drilling risks, unsuccessful exploratory activities; limited access
to capital or significantly higher cost of capital related to
illiquidity or uncertainty in the domestic or international
financial markets; international monetary conditions; unexpected
cost increases; potential liability for remedial actions under
existing or future environmental regulations; potential liability
resulting from pending or future litigation; and general domestic
and international economic and political conditions; as well as
changes in tax, environmental and other laws applicable to our
business. Other factors that could cause actual results to differ
materially from those described in the forward-looking statements
include other economic, business, competitive and/or regulatory
factors affecting our business generally as set forth in our
filings with the Securities and Exchange Commission. 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: Josh C. Anders
EVP, Chief Financial Officer
janders@adamsresources.com
(281) 974-9442
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Marketing
|
$
|
301,176
|
|
|
$
|
278,529
|
|
|
$
|
589,791
|
|
|
$
|
514,923
|
|
|
Transportation
|
13,616
|
|
|
13,860
|
|
|
27,071
|
|
|
27,207
|
|
|
Oil and natural
gas
|
410
|
|
|
774
|
|
|
1,427
|
|
|
1,564
|
|
|
Total
revenues
|
315,202
|
|
|
293,163
|
|
|
618,289
|
|
|
543,694
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Marketing
|
297,508
|
|
|
268,780
|
|
|
582,661
|
|
|
497,837
|
|
|
Transportation
|
11,851
|
|
|
11,309
|
|
|
24,013
|
|
|
22,498
|
|
|
Oil and natural
gas
|
201
|
|
|
779
|
|
|
951
|
|
|
1,410
|
|
|
General and
administrative
|
1,460
|
|
|
1,938
|
|
|
4,097
|
|
|
4,138
|
|
|
Depreciation,
depletion and amortization
|
3,563
|
|
|
4,756
|
|
|
7,532
|
|
|
9,871
|
|
|
Total costs
and expenses
|
314,583
|
|
|
287,562
|
|
|
619,254
|
|
|
535,754
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
(losses)
|
619
|
|
|
5,601
|
|
|
(965)
|
|
|
7,940
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Loss on
deconsolidation of subsidiary
|
(1,635)
|
|
|
—
|
|
|
(1,635)
|
|
|
—
|
|
|
Losses from equity
investments
|
—
|
|
|
(209)
|
|
|
—
|
|
|
(400)
|
|
|
Interest
income
|
260
|
|
|
96
|
|
|
419
|
|
|
199
|
|
|
Interest
expense
|
(1)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
Total other income
(expense), net
|
(1,376)
|
|
|
(113)
|
|
|
(1,218)
|
|
|
(201)
|
|
|
|
|
|
|
|
|
|
|
(Losses) earnings
before income taxes
|
(757)
|
|
|
5,488
|
|
|
(2,183)
|
|
|
7,739
|
|
|
Income tax benefit
(provision)
|
475
|
|
|
(2,084)
|
|
|
1,041
|
|
|
(2,905)
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
(282)
|
|
|
$
|
3,404
|
|
|
$
|
(1,142)
|
|
|
$
|
4,834
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share:
|
|
|
|
|
|
|
|
|
Basic and diluted net
(losses) earnings
|
|
|
|
|
|
|
|
|
per common
share
|
$
|
(0.07)
|
|
|
$
|
0.81
|
|
|
$
|
(0.27)
|
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common
|
|
|
|
|
|
|
|
|
shares
outstanding
|
4,218
|
|
|
4,218
|
|
|
4,218
|
|
|
4,218
|
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
$
|
0.22
|
|
|
$
|
0.22
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands,
except share data)
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
103,687
|
|
|
$
|
87,342
|
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
72,923
|
|
|
87,162
|
|
|
Accounts receivable –
related party
|
417
|
|
|
—
|
|
|
Inventory
|
15,957
|
|
|
13,070
|
|
|
Derivative
assets
|
782
|
|
|
112
|
|
|
Income tax
receivable
|
3,071
|
|
|
2,735
|
|
|
Prepayments and other
current assets
|
1,208
|
|
|
2,097
|
|
|
Total current
assets
|
198,045
|
|
|
192,518
|
|
|
|
|
|
|
Property and
equipment, net
|
33,105
|
|
|
46,325
|
|
|
Investments in
unconsolidated affiliates
|
7,570
|
|
|
2,500
|
|
|
Cash deposits and
other
|
5,230
|
|
|
5,529
|
|
|
Total
assets
|
$
|
243,950
|
|
|
$
|
246,872
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
83,228
|
|
|
$
|
79,897
|
|
|
Accounts payable –
related party
|
—
|
|
|
53
|
|
|
Derivative
liabilities
|
34
|
|
|
64
|
|
|
Other current
liabilities
|
4,912
|
|
|
6,060
|
|
|
Total current
liabilities
|
88,174
|
|
|
86,074
|
|
|
Other long-term
liabilities:
|
|
|
|
|
Asset retirement
obligations
|
1,236
|
|
|
2,329
|
|
|
Deferred taxes and
other liabilities
|
6,226
|
|
|
7,157
|
|
|
Total
liabilities
|
95,636
|
|
|
95,560
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
148,314
|
|
|
151,312
|
|
|
Total liabilities and
shareholders' equity
|
$
|
243,950
|
|
|
$
|
246,872
|
|
|
ADAMS RESOURCES
& ENERGY, INC. AND SUBSIDIARIES
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
Six Months
Ended
|
|
June
30,
|
|
2017
|
|
2016
|
|
Operating
activities:
|
|
|
|
|
Net (losses)
earnings
|
$
|
(1,142)
|
|
|
$
|
4,834
|
|
|
Adjustments to
reconcile net (losses) earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
7,532
|
|
|
9,871
|
|
|
Gains on sale
of property
|
(129)
|
|
|
(1,275)
|
|
|
Impairment of
oil and natural gas properties
|
3
|
|
|
87
|
|
|
Provision for
doubtful accounts
|
(8)
|
|
|
93
|
|
|
Deferred
income taxes
|
(926)
|
|
|
(1,965)
|
|
|
Net change in
fair value contracts
|
(700)
|
|
|
(124)
|
|
|
Losses from
equity investment
|
—
|
|
|
400
|
|
|
Loss on
deconsolidation of subsidiary
|
1,635
|
|
|
—
|
|
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
13,581
|
|
|
(10,073)
|
|
|
Accounts
receivable/payable, affiliates
|
(151)
|
|
|
—
|
|
|
Inventories
|
(2,887)
|
|
|
(5,191)
|
|
|
Income tax
receivable
|
(336)
|
|
|
2,587
|
|
|
Prepayments and other
current assets
|
887
|
|
|
(1,683)
|
|
|
Accounts
payable
|
3,357
|
|
|
7,043
|
|
|
Accrued
liabilities
|
(483)
|
|
|
1,570
|
|
|
Other
|
(461)
|
|
|
(22)
|
|
|
Net cash provided by
operating activities
|
19,772
|
|
|
6,152
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property and equipment
additions
|
(2,108)
|
|
|
(4,812)
|
|
|
Proceeds from property
sales
|
190
|
|
|
2,860
|
|
|
Investments in
unconsolidated affiliates
|
—
|
|
|
(4,700)
|
|
|
Insurance and state
collateral (deposits) refunds
|
347
|
|
|
1,250
|
|
|
Net cash used in
investing activities
|
(1,571)
|
|
|
(5,402)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Dividends paid on
common stock
|
(1,856)
|
|
|
(1,856)
|
|
|
Net cash used in
financing activities
|
(1,856)
|
|
|
(1,856)
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
16,345
|
|
|
(1,106)
|
|
|
Cash and cash
equivalents at beginning of period
|
87,342
|
|
|
91,877
|
|
|
Cash and cash
equivalents at end of period
|
$
|
103,687
|
|
|
$
|
90,771
|
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Operating cash
flow before changes in working capital reconciliation
(Non-GAAP):
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
(282)
|
|
|
$
|
3,404
|
|
|
$
|
(1,142)
|
|
|
$
|
4,834
|
|
|
Adjustments to
reconcile net (losses) earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
3,563
|
|
|
4,756
|
|
|
7,532
|
|
|
9,871
|
|
|
Gains on sale
of property
|
(136)
|
|
|
(1,155)
|
|
|
(129)
|
|
|
(1,275)
|
|
|
Impairment of
oil and natural gas properties
|
—
|
|
|
58
|
|
|
3
|
|
|
87
|
|
|
Provision for
doubtful accounts
|
(8)
|
|
|
93
|
|
|
(8)
|
|
|
93
|
|
|
Deferred
income taxes
|
(986)
|
|
|
(613)
|
|
|
(926)
|
|
|
(1,965)
|
|
|
Net change in
fair value contracts
|
(280)
|
|
|
(282)
|
|
|
(700)
|
|
|
(124)
|
|
|
Losses from
equity investment
|
—
|
|
|
209
|
|
|
—
|
|
|
400
|
|
|
Loss on
deconsolidation of subsidiary
|
1,635
|
|
|
—
|
|
|
1,635
|
|
|
—
|
|
|
Operating cash
flow before changes in working capital
|
$
|
3,506
|
|
|
$
|
6,470
|
|
|
$
|
6,265
|
|
|
$
|
11,921
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Adjusted net
(losses) earnings and (losses) earnings per common share
(Non-GAAP):
|
|
|
|
|
|
|
|
|
Net (losses)
earnings
|
$
|
(282)
|
|
|
$
|
3,404
|
|
|
$
|
(1,142)
|
|
|
$
|
4,834
|
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
|
Loss on
deconsolidation of subsidiary
|
1,635
|
|
|
—
|
|
|
1,635
|
|
|
—
|
|
|
Gains on sale of
property
|
(136)
|
|
|
(1,155)
|
|
|
(129)
|
|
|
(1,275)
|
|
|
Impairment of oil and
natural gas properties
|
—
|
|
|
58
|
|
|
3
|
|
|
87
|
|
|
Derivative valuation
gains
|
(280)
|
|
|
(282)
|
|
|
(700)
|
|
|
(124)
|
|
|
Inventory liquidation
gains
|
—
|
|
|
(4,008)
|
|
|
—
|
|
|
(6,211)
|
|
|
Inventory valuation
losses
|
1,405
|
|
|
—
|
|
|
2,063
|
|
|
—
|
|
|
Tax effect of
adjustments to (losses) earnings
|
(918)
|
|
|
1,885
|
|
|
(1,005)
|
|
|
2,633
|
|
|
Adjusted net
(losses) earnings
|
$
|
1,424
|
|
|
$
|
(98)
|
|
|
$
|
725
|
|
|
$
|
(56)
|
|
|
|
|
|
|
|
|
|
|
Adjusted (losses) earnings per common share
|
$
|
0.34
|
|
|
$
|
(0.02)
|
|
|
$
|
0.17
|
|
|
$
|
(0.01)
|
|
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SOURCE Adams Resources & Energy, Inc.