HOUSTON, Nov. 12, 2024 (GLOBE NEWSWIRE) — 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 September 30, 2024. The Company also declared a quarterly cash dividend of $0.24 per common share.
Third Quarter 2024 Financial Summary
Total revenue of $695.2 millionNet loss of $4.5 million, or ($1.76) per common shareEBITDA of $0.2 millionAdjusted EBITDA of $2.3 million, which excludes inventory valuation lossesCash and cash equivalents of $25.1 million, versus $33.3 million at December 31, 2023Liquidity of $73.6 million, versus $80.3 million at December 31, 2023Paid cash 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.
“We are encouraged by the increase in Adjusted EBITDA 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,” said Kevin Roycraft, President and CEO of the Company. “Our third quarter results reflect the impact of power outages and flooding on our operations throughout the Gulf Coast caused by multiple hurricanes and the prolonged weakness across the specialty chemicals market through a combination of lower demand due to excess capacity, and continued inflationary pressures.”
Additional Operational Highlights
Adams’ crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 72,208 barrels per day (“bpd”) of crude oil during the third quarter of 2024, compared to 92,556 bpd during the third quarter of 2023 and 67,099 bpd during the second 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, Adams’ liquid chemicals and dry bulk transportation subsidiary, traveled 5.89 million miles during the third quarter of 2024, versus 6.51 million miles during the third quarter of 2023 and 6.32 million miles during the second quarter of 2024.
Throughput in Adams’ crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System, was 10,326 bpd for the third quarter of 2024, compared to 8,548 bpd for the third quarter of 2023 and 13,881 bpd for the second quarter of 2024, and terminalling volumes were 11,319 bpd for the third quarter of 2024, compared to 9,350 bpd in the third quarter of 2023, and 16,660 bpd for the second quarter of 2024.
Adams’ remained solidly positioned with 411,426 barrels of crude oil inventory at September 30, 2024, compared to 267,731 barrels at December 31, 2023.
Capital Investments and Dividends
During the third quarter of 2024, the Company had capital expenditures of $4.8 million primarily for the purchase of two tractors, eleven 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 third quarter of 2024 of $0.24 per common share, payable on December 20, 2024, to shareholders of record as of December 6, 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
In light of the proposed transaction with Tres Energy LLC announced earlier today, the Company has cancelled the conference call, previously scheduled for Wednesday, November 13, 2024, to discuss its results for the third quarter of fiscal 2024.
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. Forward-looking statements include statements about the expected timing, closing, and impact of the proposed merger transaction announced earlier today. 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
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, 2024 2023 2024 2023 Revenues: Marketing $660,842 $719,925 $1,967,491 $1,913,673 Transportation 21,758 24,206 67,745 75,103 Pipeline and storage 43 59 67 308 Logistics and repurposing 12,520 16,424 39,403 46,458 Total revenues 695,163 760,614 2,074,706 2,035,542 Costs and expenses: Marketing 657,191 710,169 1,948,591 1,894,416 Transportation 19,778 19,642 59,284 62,315 Pipeline and storage 929 659 2,568 2,350 Logistics and repurposing 12,555 15,121 40,579 41,448 General and administrative 4,520 4,162 13,755 10,649 Depreciation and amortization 5,752 6,936 18,287 21,289 Total costs and expenses 700,725 756,689 2,083,064 2,032,467 Operating (losses) earnings (5,562) 3,925 (8,358) 3,075 Other income (expense): Interest and other income 528 119 1,662 893 Interest expense (572) (1,027) (2,036) (2,525)Total other expense, net (44) (908) (374) (1,632) (Losses) Earnings before income taxes (5,606) 3,017 (8,732) 1,443 Income tax benefit (provision) 1,066 (759) 1,465 (357) Net (losses) earnings $(4,540) $2,258 $(7,267) $1,086 (Losses) Earnings per share: Basic net (losses) earnings per common share $(1.76) $0.89 $(2.83) $0.43 Diluted net (losses) earnings per common share $(1.76) $0.88 $(2.83) $0.42 Dividends per common share $0.24 $0.24 $0.72 $0.72
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) September 30, December 31, 2024 2023ASSETS Current assets: Cash and cash equivalents $25,089 $33,256Restricted cash 10,448 11,990Accounts receivable, net of allowance for credit losses 144,334 164,295Inventory 30,028 19,827Income tax receivable 823 —Prepayments and other current assets 2,322 3,103Total current assets 213,044 232,471 Property and equipment, net 99,607 105,065Operating lease right-of-use assets, net 3,971 5,832Intangible assets, net 6,743 7,985Goodwill 6,673 6,673Other assets 2,956 3,308Total assets $332,994 $361,334 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $178,617 $183,102Current portion of finance lease obligations 5,843 6,206Current portion of operating lease liabilities 1,688 2,829Current portion of long-term debt 2,500 2,500Other current liabilities 16,720 16,150Total current liabilities 205,368 210,787Other long-term liabilities: Long-term debt 12,500 19,375Asset retirement obligations 2,551 2,514Finance lease obligations 15,248 19,685Operating lease liabilities 2,293 3,006Deferred taxes and other liabilities 10,254 13,251Total liabilities 248,214 268,618 Commitments and contingencies Shareholders’ equity 84,780 92,716Total liabilities and shareholders’ equity $332,994 $361,334
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Operating activities: Net (losses) earnings$(4,540) $2,258 $(7,267) $1,086 Adjustments to reconcile net (losses) earnings to net cash (used in) provided by operating activities: Depreciation and amortization 5,752 6,936 18,287 21,289 Gains on sales of property (57) (663) (912) (1,429)Provision for credit losses — 39 (75) 29 Stock-based compensation expense 423 389 1,181 1,044 Change in contingent consideration liability — — — (2,566)Deferred income taxes (1,086) 773 (2,709) 3 Net change in fair value contracts — (35) — (335)Changes in assets and liabilities: Accounts receivable 27,537 (60,869) 20,172 (30,253)Accounts receivable/payable, affiliates — — — (31)Inventories (10,133) (1,127) (10,201) (731)Income tax receivable/payable (714) (41) (823) (510)Prepayments and other current assets 1,006 138 781 648 Accounts payable (25,246) 63,845 (4,574) 22,239 Accrued liabilities 256 (145) 649 (2,709)Other 127 (52) 194 64 Net cash (used in) provided by operating activities (6,675) 11,446 14,703 7,838 Investing activities: Property and equipment additions (4,806) (3,009) (13,316) (8,917)Proceeds from property sales 196 1,634 2,506 3,078 Net cash used in investing activities (4,610) (1,375) (10,810) (5,839) Financing activities: Borrowings under Credit Agreement — 38,000 — 76,000 Repayments under Credit Agreement (625) (38,625) (6,875) (77,875)Principal repayments of finance lease obligations (1,551) (1,697) (4,800) (4,944)Net proceeds from sale of equity — — — 549 Dividends paid on common stock (638) (619) (1,927) (1,908)Net cash used in financing activities (2,814) (2,941) (13,602) (8,178) (Decrease) Increase in cash and cash equivalents, including restricted cash (14,099) 7,130 (9,709) (6,179)Cash and cash equivalents, including restricted cash, at beginning of period 49,636 17,758 45,246 31,067 Cash and cash equivalents, including restricted cash, at end of period$35,537 $24,888 $35,537 $24,888
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Reconciliation of EBITDA and Adjusted EBITDA to Net (Losses) Earnings: Net (losses) earnings $(4,540) $2,258 $(7,267) $1,086 Add (subtract): Interest income (528) (119) (1,662) (893)Interest expense 572 1,027 2,036 2,525 Income tax (benefit) expense (1,066) 759 (1,465) 357 Depreciation and amortization 5,752 6,936 18,287 21,289 EBITDA $190 $10,861 $9,929 $24,364 Inventory liquidation gains — (4,890) — (2,922)Inventory valuation losses 2,118 — 821 — Adjusted EBITDA $2,308 $5,971 $10,750 $21,442
