Adams Resources & Energy, Inc. Announces Results For Third Quarter 2018 And Declares Quarterly Dividend
HOUSTON, Nov. 7, 2018 /PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced its financial results for the three months ended September 30, 2018.
The Company reported net earnings of $2.0 million, or $0.48 per common share, on revenues of $467.9 million for the third quarter of 2018, compared to a net loss of $3.0 million, or ($0.72) per common share, on revenues of $295.3 million for the third quarter of 2017. On an adjusted basis, net earnings were $1.3 million, or $0.30 per common share, for the third quarter of 2018, compared to a net loss of $0.2 million, or ($0.04) per common share, for the third quarter of 2017.
Adjusted net (losses) earnings, adjusted (losses) earnings per 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 below.
Third Quarter 2018 Highlights:
-- Gross revenues of approximately $467.9 million for the third quarter of
2018 compared to $295.3 million for the third quarter of 2017
-- Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed
approximately 70,635 per day ("bpd") of crude oil during the third
quarter of 2018, compared to 64,104 bpd of crude oil during the third
quarter of 2017
-- Cash and cash equivalents increased by 20 percent from December 31, 2017
levels of $109.4 million to $130.8 million at September 30, 2018
-- $59.6 million of undrawn capacity under our letter of credit facility at
September 30, 2018
-- Adjusted cash flow of $4.2 million for the third quarter of 2018
compared to $2.3 million for the third quarter of 2017
-- Approximately 476,703 barrels of crude oil inventory at September 30,
2018 compared to 198,011 barrels at December 31, 2017
-- Dividend of $0.22 per share for the third quarter of 2018
-- No short or long term debt as of September 30, 2018
"During the third quarter of 2018, our Service Transport business unit continued to generate improved financial and operating results as our revenue per mile increased 1 percent from the second quarter of 2018 and 21 percent from the third quarter of 2017," said Townes G. Pressler, Executive Chairman. "As customer demand continues to be strong in this segment, improved trucking rates allow improved hiring and retention of skilled drivers as we continue to provide dependable superior service to our customers at Service Transport. We are continuing on schedule with improving the age of our fleet, with the purchase of 40 new tractors through September 30, 2018 and commitments to purchase an additional 61 tractors and 20 trailers by the end of the first quarter of 2019."
"At our GulfMark business unit, crude oil marketing volumes for the third quarter of 2018 were consistent with the second quarter of 2018 and increased 10 percent from the third quarter of 2017, primarily as a result of increased production in our market areas. Our overall marketing margins have increased as a result of the exit of areas with thin margins."
"During the remainder of 2018, we will remain focused on introducing efficiencies in our crude oil marketing division, integrating our crude oil gathering company acquisition into our business, replacing aging tractors and right sizing our tractor and trailer fleets in both business units, improving company-wide driver retention and increasing driver count, and placing safety first in all of our operations. We will continue to explore synergic growth opportunities in our core businesses, both organically and in the open market," continued Pressler.
Capital Investments and Dividends
During the third quarter of 2018, the Company recorded approximately $5.0 million of capital costs and paid dividends of $0.9 million ($0.22 per share). The majority of the capital costs relate to the purchase of tractors in our Service Transport subsidiary.
The Company's Board of Directors also declared a quarterly cash dividend for the third quarter of 2018 in the amount of $0.22 per common share, payable on December 21, 2018 to shareholders of record as of December 7, 2018.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes the non-GAAP financial measures of adjusted cash flow, 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 primarily engaged in the business of crude oil marketing, transportation and storage, tank truck transportation of liquid chemicals and dry bulk and ISO tank container storage and transportation through its two subsidiaries, GulfMark Energy, Inc. and Service Transport Company, respectively. 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. 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
Nine Months Ended
September 30,
September 30,
2018 2017 2018 2017
---
Revenues:
Marketing $
453,626 $
282,229 $
1,266,055 $
872,020
Transportation 14,265 13,082 41,509 40,153
Oil and natural gas - 1,427
Total revenues 467,891 295,311 1,307,564 913,600
Costs and expenses:
Marketing 449,367 277,906 1,250,233 860,567
Transportation 12,412 12,668 36,603 36,681
Oil and natural gas - 951
General and
administrative 1,533 2,787 6,100 6,884
Depreciation, depletion
and amortization 2,340 3,240 7,014 10,772
Total costs and expenses 465,652 296,601 1,299,950 915,855
Operating earnings
(losses) 2,239 (1,290) 7,614 (2,255)
Other income (expense):
Loss on deconsolidation
of subsidiary - (1,870) (3,505)
Impairment of investment
in unconsolidated
affiliate - (2,500) (2,500)
Interest income 601 370 1,486 789
Interest expense (26) (8) (60) (10)
Total other income
(expense), net 575 (4,008) 1,426 (5,226)
(Losses) earnings before
income taxes 2,814 (5,298) 9,040 (7,481)
Income tax benefit
(provision) (779) 2,265 (2,247) 3,306
Net (losses) earnings $
2,035 $
(3,033) $
6,793 $
(4,175)
Earnings (losses) per share:
Basic net (losses)
earnings per common
share $
0.48 $
(0.72) $
1.61 $
(0.99)
Diluted net (losses)
earnings per common
share $
0.48 $
(0.72) $
1.61 $
(0.99)
Dividends per common
share $
0.22 $
0.22 $
0.66 $
0.66
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2018 2017
---
ASSETS
Current assets:
Cash and cash equivalents $
130,774 $
109,393
Accounts receivable, net of
allowance for doubtful
accounts 108,662 121,353
Inventory 34,760 12,192
Derivative assets 263 166
Income tax receivable - 1,317
Prepayments and other current
assets 1,271 1,264
Total current assets 275,730 245,685
Property and equipment, net 30,918 29,362
Investment in unconsolidated
affiliate 425 425
Cash deposits and other 6,239 7,232
Total assets $
313,312 $
282,704
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $
146,895 $
124,706
Accounts payable - related
party 6 5
Derivative liabilities 247 145
Current portion of capital
lease obligations 568 338
Other current liabilities 8,219 4,404
Total current liabilities 155,935 129,598
Other long-term liabilities:
Asset retirement obligations 1,414 1,273
Capital lease obligations 2,041 1,351
Deferred taxes and other
liabilities 2,655 3,363
Total liabilities 162,045 135,585
Commitments and contingencies
Shareholders' equity 151,267 147,119
Total liabilities and
shareholders' equity $
313,312 $
282,704
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
2018 2017
---
Operating activities:
Net (losses) earnings $
6,793 $
(4,175)
Adjustments to reconcile net (losses) earnings to net
cash
provided by operating activities:
Depreciation, depletion and
amortization 7,014 10,772
Gains on sales of property (890) (347)
Impairment of oil and natural gas
properties - 3
Provision for doubtful accounts (95) (9)
Stock-based compensation expense 144
Deferred income taxes (685) (1,198)
Net change in fair value contracts 5 48
Impairment of investment in
unconsolidated affiliate - 2,500
Loss on deconsolidation of
subsidiary - 3,505
Changes in assets and liabilities:
Accounts receivable 12,830 5,228
Accounts receivable/payable,
affiliates 1 266
Inventories (22,568) (9,328)
Income tax receivable 1,317 (1,412)
Prepayments and other current
assets (7) 927
Accounts payable 22,254 9,482
Accrued liabilities 3,815 465
Other (103) (240)
Net cash provided by operating
activities 29,825 16,487
Investing activities:
Property and equipment additions (7,756) (2,465)
Proceeds from property sales 1,314 430
Insurance and state collateral
refunds 1,070 439
Net cash used in investing
activities (5,372) (1,596)
Financing activities:
Principal repayments of capital
lease obligations (288)
Dividends paid on common stock (2,784) (2,784)
Net cash used in financing
activities (3,072) (2,784)
Increase in cash and cash
equivalents 21,381 12,107
Cash and cash equivalents at
beginning of period 109,393 87,342
Cash and cash equivalents at end of
period $
130,774 $
99,449
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
---
Reconciliation of Adjusted Cash Flow to
Net (Losses) Earnings:
Net (losses) earnings $
2,035 $
(3,033) $
6,793 $
(4,175)
Income tax benefit
(provision) 779 (2,265) 2,247 (3,306)
Depreciation, depletion
and amortization 2,340 3,240 7,014 10,772
Gains on sales of
property (444) (218) (890) (347)
Impairment of oil and
natural gas properties - 3
Loss on deconsolidation
of subsidiary - 1,870 3,505
Stock-based compensation
expense 141 144
Impairment of investment
in unconsolidated
affiliate - 2,500 2,500
Inventory liquidation
gains (60) (1,954) (2,535)
Inventory valuation
losses - 109
Net change in fair value
contracts 8 748 5 48
Costs of voluntary early
retirement program - 1,435 1,435
Insurance proceeds for
Hurricane Harvey claims (610) (610)
Legal and other accrual
reversals - (840)
Adjusted cash flow $
4,189 $
2,323 $
12,168 $
9,704
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
---
Adjusted net (losses) earnings and
(losses)
earnings per common share (Non-GAAP):
Net (losses) earnings $
2,035 $
(3,033) $
6,793 $
(4,175)
Add (subtract):
Loss on deconsolidation
of subsidiary - 1,870 3,505
Impairment of investment
in unconsolidated
affiliate - 2,500 2,500
Gains on sales of
property (444) (218) (890) (347)
Impairment of oil and
natural gas properties - 3
Stock-based compensation
expense 141 144
Costs of voluntary early
retirement program - 1,435 1,435
Net change in fair value
of contracts 8 748 5 48
Inventory liquidation
gains (60) (1,954) (2,535)
Inventory valuation
losses - 109
Legal and other accrual
reversals - (840)
Insurance proceeds for
Hurricane Harvey claims (610) (610)
Tax effect of adjustments
to (losses) earnings 203 (1,533) 817 (2,245)
Adjusted net (losses)
earnings $
1,273 $
(185) $
3,724 $
(7)
Adjusted (losses)
earnings per common
share $
0.30 $
(0.04) $
0.88
$
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SOURCE Adams Resources & Energy, Inc.
