Adams Resources & Energy, Inc. Announces Results For Second Quarter 2017 And Declares Quarterly Dividend
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.
