HOUSTON, Aug. 7, 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 ended June 30, 2024.  The Company also declared a quarterly cash dividend of $0.24 per common share. 

Adams Resources & Energy, Inc. (PRNewsfoto/Adams Resources & Energy, Inc.)

Second Quarter 2024 Financial Summary

  • Total revenue of $718.5 million
  • Net loss of ($2.2) million, or ($0.87) per common share
  • EBITDA of $3.7 million
  • Adjusted EBITDA of $4.2 million, which excludes inventory valuation losses
  • Cash and cash equivalents of $38.5 million, versus $33.3 million at December 31, 2023
  • Liquidity of $88.5 million, versus $80.3 million at December 31, 2023
  • Repaid an additional $3.0 million of principal under our Credit Facility
  • Paid dividends of $0.24 per share 

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA are non-generally accepted accounting principle ("non-GAAP") financial measures that are defined and reconciled to net (losses) earnings in the financial tables later in this release. 

"Our second quarter results reflect the prolonged weakness across the specialty chemicals market through a combination of lower demand, excess capacity, and continued inflationary pressures across our business as well as an additional $0.8 million of self-insurance retention expense," said Kevin Roycraft, President and CEO of the Company. "We are encouraged by the increase in earnings from crude oil marketing operations, as higher oil prices compared to the prior-year quarter more than offset the lower volumes related to our exit of the Red River operations in the fourth quarter of 2023, and with the 23% sequential growth in the throughput and terminalling volumes at our Victoria Express pipeline."

"We remain optimistic that conditions in the chemical transportation market will begin to improve in the latter half of 2024, but more so in early 2025 through improved macroeconomic conditions and with capacity continuing to exit the industry. Overall, we remain in a strong financial position to fund our operations and pay our quarterly dividend, which is a key component of our delivering long-term returns to our shareholders."

Additional Operational Highlights

  • Adams' crude oil marketing subsidiary, GulfMark Energy, Inc. ("GulfMark"), marketed 67,099 barrels per day ("bpd") of crude oil during the second quarter of 2024, compared to 92,152 bpd during the second quarter of 2023 and 64,634 bpd during the first quarter of 2024.  The decrease in volumes compared to the prior year period was largely driven by GulfMark's exit from the Red River trucking operations in the fourth quarter of 2023.
  • The collective fleet of Service Transport Company ("Service Transport"), Adams' liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.32 million miles during the second quarter of 2024, versus 6.30 million miles during the second quarter of 2023 and 6.29 million miles during the first quarter of 2024.
  • Throughput in Adams' crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System, was 13,881 bpd for the second quarter of 2024, compared to 8,560 bpd for the second quarter of 2023 and 11,256 bpd for the first quarter of 2024, and terminalling volumes were 16,660 bpd for the second quarter of 2024, compared to 10,785 bpd in the second quarter of 2023, and 11,544 bpd for the first quarter of 2024. 
  • Adams' remained solidly positioned with 244,871 barrels of crude oil inventory at June 30, 2024, compared to 267,731 barrels at December 31, 2023.

Capital Investments and Dividends

During the second quarter of 2024, the Company had capital expenditures of $2.4 million primarily for the purchase of eleven tractors, two trailers and other various equipment and spending for the continuing construction of the Dayton facility.  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 2024 of $0.24 per common share, payable on September 27, 2024, to shareholders of record as of September 13, 2024. 

Use of Non-GAAP Financial Measures

To supplement the Company's financial statements presented in accordance with generally accepted accounting principles in the United States ("GAAP"), this press release and accompanying schedules include the non-GAAP financial measures of earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA.  The accompanying schedules provide reconciliations of EBITDA and Adjusted EBITDA to net earnings (losses), their most directly comparable financial measure calculated and presented in accordance with GAAP.  The Company defines EBITDA as net earnings (or losses) before interest income or expense, income tax and depreciation and amortization expense, and Adjusted EBITDA as EBITDA after removing the effects of inventory liquidation gains and valuation losses.  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.  Management also believes that EBITDA and Adjusted EBITDA are useful to investors as they are measures commonly used by other companies in our industry and provide a comparison for investors for the Company's performance relative to its competitors.  Our non-GAAP financial measures should not be considered as alternatives to net income 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 8, 2024 at 2:00 p.m. ET (1:00 p.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 1445408.

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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)




Three Months Ended


Six Months Ended



June 30,


June 30,



2024


2023


2024


2023

Revenues:









Marketing


$      682,825


$       585,272


$    1,306,649


$    1,193,748

Transportation


22,756


24,452


45,987


50,897

Pipeline and storage


20


249


24


249

Logistics and repurposing


12,892


14,793


26,883


30,034

Total revenues


718,493


624,766


1,379,543


1,274,928










Costs and expenses:









Marketing


675,809


579,753


1,291,400


1,184,247

Transportation


19,356


20,260


39,506


42,673

Pipeline and storage


942


753


1,639


1,691

Logistics and repurposing


14,187


13,202


28,024


26,327

General and administrative


4,454


1,715


9,235


6,487

Depreciation and amortization


6,180


7,303


12,535


14,353

Total costs and expenses


720,928


622,986


1,382,339


1,275,778










Operating (losses) earnings


(2,435)


1,780


(2,796)


(850)










Other income (expense):









Interest and other income


573


570


1,134


774

Interest expense


(671)


(802)


(1,464)


(1,498)

Total other income (expense), net


(98)


(232)


(330)


(724)










(Losses) Earnings before income taxes


(2,533)


1,548


(3,126)


(1,574)

Income tax benefit (provision)


304


(721)


399


402

Net (losses) earnings


$        (2,229)


$               827


$         (2,727)


$         (1,172)










(Losses) Earnings per share:









Basic net losses (earnings) per common share


$           (0.87)


$              0.33


$            (1.06)


$            (0.46)

Diluted net losses (earnings) per common share


$           (0.87)


$              0.32


$            (1.06)


$            (0.46)

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,



2024


2023

ASSETS





Current assets:





Cash and cash equivalents


$           38,512


$           33,256

Restricted cash


11,124


11,990

Accounts receivable, net of allowance for credit losses


171,735


164,295

Inventory


19,895


19,827

Income tax receivable


109


—

Prepayments and other current assets


3,328


3,103

Total current assets


244,703


232,471






Property and equipment, net


100,426


105,065

Operating lease right-of-use assets, net


4,702


5,832

Intangible assets, net


7,144


7,985

Goodwill


6,673


6,673

Other assets


3,061


3,308

Total assets


$         366,709


$         361,334






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





Accounts payable


$         203,833


$         183,102

Current portion of finance lease obligations


6,075


6,206

Current portion of operating lease liabilities


2,096


2,829

Current portion of long-term debt


2,500


2,500

Other current liabilities


16,484


16,150

Total current liabilities


230,988


210,787

Other long-term liabilities:





Long-term debt


13,125


19,375

Asset retirement obligations


2,545


2,514

Finance lease obligations


16,567


19,685

Operating lease liabilities


2,617


3,006

Deferred taxes and other liabilities


11,637


13,251

Total liabilities


277,479


268,618






Commitments and contingencies










Shareholders' equity


89,230


92,716

Total liabilities and shareholders' equity


$         366,709


$         361,334

 

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,


2024


2023


2024


2023

Operating activities:








Net losses

$       (2,229)


$            827


$       (2,727)


$       (1,172)

Adjustments to reconcile net losses to net cash








provided by (used in) operating activities:








Depreciation and amortization

6,180


7,303


12,535


14,353

Gains on sales of property

(518)


(735)


(855)


(766)

Provision for credit losses

(52)


(7)


(75)


(10)

Stock-based compensation expense

451


372


758


655

Change in contingent consideration liability

—


(2,566)


—


(2,566)

Deferred income taxes

(1,119)


654


(1,623)


(770)

Net change in fair value contracts

—


187


—


(300)

Changes in assets and liabilities:








Accounts receivable

13,613


(300)


(7,365)


30,616

Accounts receivable/payable, affiliates

—


—


—


(31)

Inventories

7,431


(4,248)


(68)


396

Income tax receivable

(109)


(469)


(109)


(469)

Prepayments and other current assets

(790)


420


(225)


510

Accounts payable

(15,619)


(28,953)


20,672


(41,606)

Accrued liabilities

992


(50)


393


(2,564)

Other

84


250


67


116

Net cash provided by (used in) operating activities

8,315


(27,315)


21,378


(3,608)









Investing activities:








Property and equipment additions

(2,358)


(4,008)


(8,510)


(5,908)

Proceeds from property sales

1,348


1,003


2,310


1,444

Net cash used in investing activities

(1,010)


(3,005)


(6,200)


(4,464)









Financing activities:








Borrowings under Credit Agreement

—


20,000


—


38,000

Repayments under Credit Agreement

(3,625)


(20,625)


(6,250)


(39,250)

Principal repayments of finance lease obligations

(1,696)


(1,671)


(3,249)


(3,247)

Net proceeds from sale of equity

—


—


—


549

Dividends paid on common stock

(615)


(608)


(1,289)


(1,289)

Net cash used in financing activities

(5,936)


(2,904)


(10,788)


(5,237)









Increase (Decrease) in cash and cash equivalents, including

   restricted cash

1,369


(33,224)


4,390


(13,309)

Cash and cash equivalents, including restricted cash,

   at beginning of period

48,267


50,982


45,246


31,067

Cash and cash equivalents, including restricted cash,

   at end of period

$       49,636


$       17,758


$       49,636


$       17,758

 

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(In thousands)




Three Months Ended


Six Months Ended



June 30,


June 30,



2024


2023


2024


2023

Reconciliation of EBITDA and Adjusted EBITDA








to Net (Losses) Earnings:









Net (losses) earnings


$         (2,229)


$               827


$         (2,727)


$         (1,172)

Add (subtract):









Interest income


(573)


(570)


(1,134)


(774)

Interest expense


671


802


1,464


1,498

Income tax (benefit) expense


(304)


721


(399)


(402)

Depreciation and amortization


6,180


7,303


12,535


14,353

EBITDA


$           3,745


$           9,083


$           9,739


$         13,503

Inventory liquidation gains


—


—


(1,297)


—

Inventory valuation losses


456


951


—


1,968

Adjusted EBITDA


$           4,201


$         10,034


$           8,442


$         15,471

 

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SOURCE Adams Resources & Energy, Inc.

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