PR Newswire | Aug 12, 2021 04:06PM EDT

Declares Quarterly Dividend

08/12 15:05 CDT

Adams Resources & Energy, Inc. Announces Results For Second Quarter 2021 And Declares Quarterly Dividend HOUSTON, Aug. 12, 2021

HOUSTON, Aug. 12, 2021 /PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced operational and financial results for the three months ended June 30, 2021 and declared a quarterly cash dividend of $0.24 per common share.

* Reported net earnings of $4.7 million, or $1.10 per diluted common share, on revenues of $486.7 million for the second quarter of 2021, compared to $3.5 million, or $0.82 per diluted common share, on revenues of $152.3 million for the second quarter of 2020. * Generated net cash provided by operating activities of $29.1 million for the second quarter of 2021, compared to net cash used in operating activities of $6.6 million for the second quarter of 2020. The increase was primarily driven by changes in working capital due to an increase in the market price of crude oil. * Reported adjusted net earnings of $1.9 million, or $0.44 per diluted common share, for the second quarter of 2021, compared to an adjusted net loss of $0.8 million, or a loss of $0.18 per diluted common share, for the second quarter of 2020. * Adjusted cash flow for the second quarter of 2021 was $7.4 million versus $1.9 million for the second quarter of 2020.

Adjusted net earnings (losses), adjusted earnings (losses) per diluted 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 later in this release.

Additional Highlights for Q2 2021

* Maintained strong financial flexibility at June 30, 2021, including $88.7 million in cash and cash equivalents. This represented a 126% increase from $39.3 million at December 31, 2020. * Liquidity of $111.4 million at June 30, 2021, including cash and cash equivalents and $22.8 million available under the Company's $40.0 million Credit Agreement entered into in May 2021. * Adam's crude oil marketing subsidiary, GulfMark Energy, Inc. ("GulfMark"), marketed approximately 89,585 barrels per day ("bpd") of crude oil during the second quarter of 2021, compared to 81,152 bpd during the second quarter of 2020 and 82,889 bpd during the first quarter of 2021. GulfMark held 413,973 barrels of crude oil inventory at June 30, 2021, compared to 421,759 barrels at December 31, 2020. * The collective fleet of Service Transport Company ("Service Transport"), Adams' liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled approximately 7.25 million miles during the second quarter of 2021, compared to 3.89 million miles during the second quarter of 2020 and 6.93 million miles during the first quarter of 2021. Significantly contributing to the year-over-year increase in miles traveled for the second quarter was the June 2020 purchase of assets from CTL Transportation, which added new services and product lines for the Company's new and existing customers in new markets in Florida, Georgia, Illinois, Missouri and Ohio.

Kevin J. Roycraft, Adams' Chief Executive Officer, commented, "We were pleased with our results for the second quarter of 2021, including generating adjusted cash flow that was almost four times higher than both the first quarter of this year and the second quarter of 2020. Contributing to our financial performance for this year's second quarter was a continued improvement in the economic backdrop, including increased demand for crude oil and a resulting higher price environment. Our recent acquisitions in our transportation and pipeline and storage segments also benefited our results for the period. We were especially pleased with the second quarter performance of the VEX Pipeline System, which we acquired in October of last year, producing positive cash flow in its second full quarter of operation."

Capital Investments and Dividends

During the second quarter of 2021, the Company spent capital of $3.4 million for trailers and other field equipment. In addition, Adams paid dividends of $1.0 million, or $0.24 per common share.

Adams' Board of Directors has declared a quarterly cash dividend for the second quarter of 2021 of $0.24 per common share, payable on September 17, 2021, to shareholders of record as of September 3, 2021. Adams' has consistently paid a dividend since 1994.

Outlook

Mr. Roycraft concluded, "Looking to the second half of 2021, we remain focused on increasing efficiencies in each of our business segments. This includes further integrating our newly acquired terminals and leveraging back haul opportunities with continued efforts to diversify our offerings. We also plan to grow in new and existing areas with our crude oil marketing segment. Finally, as we have successfully done in the past, we will continue to evaluate business development opportunities that complement our core businesses and support our mission of providing unparalleled service quality and reliability for our customers."

"Underpinning our strategic initiatives to enhance and expand our business is ensuring we maintain a solid financial position. Our strong balance sheet and significant liquidity served us well in the economic depths associated with the pandemic, and we believe our financial flexibility will continue to differentiate Adams in the marketplace moving forward. Also key to our past and future success is the dedicated efforts of our full employee team. I look forward to working closely with them as we identify and execute on additional targeted opportunities to prudently grow the business for the long-term benefit of our shareholders."

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 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 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. 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. The non-GAAP financial measures are defined and reconciled in the financial tables below.

About Adams Resources & Energy, Inc.

Adams Resources & Energy, Inc. is engaged in crude oil marketing, transportation, terminalling and storage and tank truck transportation of liquid chemicals and dry bulk through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC and GulfMark Terminals, LLC. 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. 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.

Contact

Tracy E. OhmartEVP, Chief Financial Officertohmart@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 Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Revenues:

Marketing $463,092$140,141$767,115$477,362

Transportation 23,497 12,145 44,732 28,401

Pipeline and storage 155 - 388 -

Total revenues 486,744 152,286 812,235 505,763



Costs and expenses:

Marketing 453,081 131,454 748,288 484,319

Transportation 19,078 10,888 36,538 24,073

Pipeline and storage 488 - 1,032 -

General and administrative 2,961 2,731 6,337 5,625

Depreciation and amortization 4,801 4,278 9,854 8,751

Total costs and expenses 480,409 149,351 802,049 522,768



Operating earnings (losses) 6,335 2,935 10,186 (17,005)



Other income (expense):

Interest and other income 62 144 196 509

Interest expense (204) (68) (424) (218)

Total other (expense) income, net (142) 76 (228) 291



Earnings (losses) before income taxes 6,193 3,011 9,958 (16,714)

Income tax (provision) benefit (1,484) 492 (2,441) 8,790



Net earnings (losses) $4,709 $3,503 $7,517 $(7,924)



Earnings (losses) per share:

Basic net earnings (losses) per common share $1.11 $0.83 $1.77 $(1.87)

Diluted net earnings (losses) per common share$1.10 $0.82 $1.76 $(1.87)



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,

2021 2020

ASSETS

Current assets:

Cash and cash equivalents $88,668 $39,293

Restricted cash 7,033 12,772

Accounts receivable, net of allowance for doubtful accounts125,910 99,799

Accounts receivable - related party 4 -

Inventory 29,712 19,336

Derivative assets 1,255 61

Income tax receivable 5,846 13,288

Prepayments and other current assets 2,122 2,964

Total current assets 260,550 187,513



Property and equipment, net 90,577 94,134

Operating lease right-of-use assets, net 7,249 8,051

Intangible assets, net 3,700 4,106

Other assets 2,930 2,383

Total assets $365,006$296,187



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $151,113$85,991

Derivative liabilities 1,221 52

Current portion of finance lease obligations 4,333 4,112

Current portion of operating lease liabilities 2,184 2,050

Other current liabilities 13,556 22,343

Total current liabilities 172,407 114,548

Other long-term liabilities:

Long-term debt 8,000 -

Asset retirement obligations 2,342 2,308

Finance lease obligations 11,246 11,507

Operating lease liabilities 5,067 6,000

Deferred taxes and other liabilities 11,093 12,732

Total liabilities 210,155 147,095



Commitments and contingencies



Shareholders' equity 154,851 149,092

Total liabilities and shareholders' equity $365,006$296,187

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



Six Months Ended

June 30,

2021 2020

Operating activities:

Net earnings (losses) $7,517 $(7,924)

Adjustments to reconcile net earnings (losses) to net cash

provided by (used in) operating activities:

Depreciation and amortization 9,854 8,751

Gains on sales of property (265) (140)

Provision for doubtful accounts (2) (24)

Stock-based compensation expense 417 304

Deferred income taxes (1,636) (1,534)

Net change in fair value contracts (25) (12)

Changes in assets and liabilities:

Accounts receivable (26,109)27,103

Accounts receivable/payable, affiliates (4) 1

Inventories (10,376)6,570

Income tax receivable 7,442 (4,733)

Prepayments and other current assets 842 262

Accounts payable 63,831 (63,013)

Accrued liabilities 1,235 3,875

Other (614) 55

Net cash provided by (used in) operating activities 52,107 (30,459)



Investing activities:

Property and equipment additions (3,602) (2,880)

Asset acquisition - (9,137)

Proceeds from property sales 1,316 514

Insurance and state collateral refunds - 1,129

Net cash used in investing activities (2,286) (10,374)



Financing activities:

Borrowings under Credit Agreement 8,000 -

Principal repayments of finance lease obligations (2,123) (1,070)

Payment for financed portion of VEX acquisition (10,000)-

Payment of contingent consideration liability - (111)

Dividends paid on common stock (2,062) (2,044)

Net cash used in financing activities (6,185) (3,225)



Increase (Decrease) in cash and cash equivalents, including restricted cash 43,636 (44,058)

Cash and cash equivalents, including restricted cash, at beginning of period52,065 122,255

Cash and cash equivalents, including restricted cash, at end of period $95,701$78,197

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,

2021 2020 2021 2020

Reconciliation of Adjusted Cash Flow to

Net Earnings (Losses):

Net earnings (losses) $4,709$3,503 $7,517 $(7,924)

Add (subtract):

Income tax (benefit) provision 1,484 (492) 2,441 (8,790)

Depreciation and amortization 4,801 4,278 9,854 8,751

Gains on sales of property (182) - (265) (140)

Stock-based compensation expense 232 170 417 304

Early retirement and terminations costs - 431 - 431

Inventory liquidation gains (3,650)(6,031) (10,593)-

Inventory valuation losses - - - 18,184

Net change in fair value contracts (4) 7 (25) (12)

Adjusted cash flow $7,390$1,866 $9,346 $10,804





Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Adjusted net (losses) earnings and (losses)

earnings per common share (Non-GAAP):

Net earnings (losses) $4,709$3,503 $7,517 $(7,924)

Add (subtract):

Gains on sales of property (182) - (265) (140)

Stock-based compensation expense 232 170 417 304

Early retirement and terminations costs - 431 - 431

Net change in fair value contracts (4) 7 (25) (12)

Inventory liquidation gains (3,650)(6,031) (10,593)-

Inventory valuation losses - - - 18,184

Tax effect of adjustments to earnings (losses)757 1,139 2,197 (3,941)

Adjusted net earnings (losses) $1,862$(781) $(752) $6,902



Adjusted earnings (losses) per common share $0.44 $(0.18)$(0.19)$1.63

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands)



Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Reconciliation of Adjusted Cash Flow to Net Cash Provided by (Used in) Operating Activities:

Net cash provided by (used in) operating activities$29,106$(6,613)$52,107$(30,459)

Add (subtract):

Income tax provision (benefit) 1,484 (492) 2,441 (8,790)

Deferred income taxes 807 (1,155) 1,636 1,534

Provision for doubtful accounts 1 - 2 24

Early retirement and terminations costs - 431 - 431

Inventory liquidation gains (3,650) (6,031) (10,593)-

Inventory valuation losses - - - 18,184

Changes in assets and liabilities (20,358)15,726 (36,247)29,880

Adjusted cash flow $7,390 $1,866 $9,346 $10,804

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SOURCE Adams Resources & Energy, Inc.