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0000002178FALSE00000021782023-05-092023-05-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 9, 2023

ADAMS RESOURCES & ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-7908
74-1753147
(State or other jurisdiction (Commission
(IRS Employer
of incorporation) File Number)
Identification No.)
17 South Briar Hollow Lane, Suite 100, Houston, Texas
 77027
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (713) 881-3600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.10 par value AE NYSE American LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02 Results of Operations and Financial Condition.

On May 9, 2023, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended March 31, 2023. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is hereby incorporated herein by reference.

The information provided in this Item 2.02 (including the press release attached as Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, except to the extent that such filing incorporates by reference any or all of such information by express reference thereto.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
99.1
104 Cover Page Interactive Data File — the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ADAMS RESOURCES & ENERGY, INC.
Date: May 9, 2023 By: /s/ Tracy E. Ohmart
Tracy E. Ohmart
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

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EX-99.1 2 a1q2023erexhibit991.htm EX-99.1 Document

Exhibit 99.1
FOR IMMEDIATE RELEASE
adamslogoa03a.jpg

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES
FIRST QUARTER 2023 RESULTS AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Tuesday, May 9, 2023) -- 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 March 31, 2023. The Company also declared a quarterly cash dividend of $0.24 per common share.

Q1 2023 Financial Summary

•Total revenue of $650.2 million, versus $774.2 million for the first quarter of 2022.

•Net loss of $2.0 million, or ($0.79) per common share, compared to net earnings of $6.1 million, or $1.39 per diluted common share for the first quarter of 2022.

•Net cash provided by operating activities of $23.7 million for the first quarter of 2023, an increase of $17.8 million from the prior-year quarter. The increase was primarily driven by the timing of payments and receipts from crude oil customers and changes in inventory due to fluctuations in crude oil pricing and barrels held.

•Adjusted net loss of $1.4 million, or ($0.55) per common share, compared to adjusted net loss of $1.0 million, or ($0.24) per diluted common share, for the first quarter of 2022.

•Adjusted cash flow of $4.7 million, an increase of $0.7 million from the first quarter of 2022.

•Cash and cash equivalents were $42.1 million at March 31, 2023, versus $20.5 million at December 31, 2022, primarily due to the timing of receipts and early payments from crude oil customers.

•Liquidity of $81.7 million at March 31, 2023.

•Paid dividends totaling $0.24 per share during the first quarter of 2023. The Company has consistently paid a dividend since 1994.

Adjusted net (loss) earnings, adjusted (loss) earnings 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.

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Additional Operational Highlights

•Adams’ crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 94,030 barrels per day (“bpd”) of crude oil during the first quarter of 2023, compared to 90,385 bpd during the first quarter of 2022 and 99,441 bpd during the fourth quarter of 2022.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.55 million miles during the first quarter of 2023, versus 6.80 million miles during the first quarter of 2022 and 6.07 million miles during the fourth quarter of 2022.

•Adams’ crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System (“VEX Pipeline System”), throughput was 10,088 bpd for the first quarter of 2023, compared to 10,486 bpd for the first quarter of 2022 and 10,615 bpd for the fourth quarter of 2022, and terminalling volumes were 10,395 bpd for the first quarter of 2023, compared to 10,948 bpd in the first quarter of 2022, and 10,833 bpd for the fourth quarter of 2022.

•The recently added logistics and repurposing segment, which includes the Firebird Bulk Carriers, Inc. (“Firebird”) and Phoenix Oil, Inc. (“Phoenix”) businesses acquired in August 2022, had a positive impact on quarterly cash flow.

•Remained solidly positioned with 285,440 barrels of crude oil inventory at March 31, 2023, compared to 328,562 barrels at December 31, 2022.

“Our first quarter results reflect the improved performance across our segments despite continued economic headwinds,” said Kevin J. Roycraft, Chief Executive Officer of Adams. “GulfMark’s adjusted cash flows increased compared to both fourth quarter 2022 and the prior-year quarter as we continue to make progress adjusting cost structures and improving contract pricing. Quarterly results for Phoenix and Firebird both improved sequentially, and Service Transport generated positive quarterly cash flow despite pricing pressures and lower shipment volumes.”

Capital Investments and Dividends

During the first quarter of 2023, the Company had capital expenditures of $1.9 million primarily for construction of the pipeline connection, for two tractors and other field equipment. In addition, Adams paid dividends of $0.7 million, or $0.24 per common share.

As part of Adams’ on-going capital allocation strategy, the Board of Directors has declared a quarterly cash dividend for the first quarter of 2023 of $0.24 per common share, payable on June 23, 2023, to shareholders of record as of June 9, 2023.

Outlook

Mr. Roycraft continued, “Overall, we believe Adams is well-positioned for any potential challenges that lie ahead in 2023. The connection for the VEX Pipeline System to Max Midstream is nearly complete and should begin flowing later this summer. We expect continued challenges through the second quarter as GulfMark works to realize the benefits of their cost cutting efforts and improving margins.
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Customer activity for Service Transport suggests we will benefit from a stronger second half of the year.”

“Adams has been built on a solid foundation. We have a growing cash position, and our fundamentals remain strong. Our acquisitions of Phoenix and Firebird highly complement our other segments and will allow us to succeed even in challenging markets. We expect improved performance as the year progresses, especially in the second half of the year,” concluded Mr. Roycraft.

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 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. 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 first quarter results on Wednesday, May 10, 2023 at 9:00 a.m. ET (8:00 a.m. CT). To participate in the live conference call, dial 1-877-270-2148 (Toll-Free) within the U.S., or 1-412-902-6510 (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 6664735.

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.


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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. 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.

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
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended
March 31,
2023 2022
Revenues:
Marketing $ 608,476  $ 747,555 
Transportation 26,445  26,690 
Pipeline and storage —  — 
Logistics and repurposing 15,241  — 
Total revenues 650,162  774,245 
Costs and expenses:
Marketing 604,494  735,647 
Transportation 22,413  20,865 
Pipeline and storage 938  554 
Logistics and repurposing 13,125  — 
General and administrative 4,772  4,018 
Depreciation and amortization 7,050  5,013 
Total costs and expenses 652,792  766,097 
Operating (losses) earnings (2,630) 8,148 
Other income (expense):
Interest and other income 204  24 
Interest expense (696) (114)
Total other (expense) income, net (492) (90)
(Losses) Earnings before income taxes (3,122) 8,058 
Income tax benefit (provision) 1,123  (1,968)
Net (losses) earnings $ (1,999) $ 6,090 
(Losses) Earnings per share:
Basic net (losses) earnings per common share $ (0.79) $ 1.40 
Diluted net (losses) earnings per common share $ (0.79) $ 1.39 
Dividends per common share $ 0.24  $ 0.24 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

March 31, December 31,
2023 2022
ASSETS
Current assets:
Cash and cash equivalents $ 42,135  $ 20,532 
Restricted cash 8,847  10,535 
Accounts receivable, net of allowance for doubtful accounts 158,126  189,039 
Inventory 22,275  26,919 
Derivative assets 157  — 
Prepayments and other current assets 3,028  3,118 
Total current assets 234,568  250,143 
Property and equipment, net 110,264  106,425 
Operating lease right-of-use assets, net 7,414  7,720 
Intangible assets, net 9,294  9,745 
Goodwill 6,428  6,428 
Other assets 3,595  3,698 
Total assets $ 371,563  $ 384,159 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 191,704  $ 204,391 
Accounts payable – related party —  31 
Derivative liabilities —  330 
Current portion of finance lease obligations 5,221  4,382 
Current portion of operating lease liabilities 2,821  2,712 
Current portion of long-term debt 2,500  — 
Other current liabilities 16,627  19,214 
Total current liabilities 218,873  231,060 
Other long-term liabilities:
Long-term debt 21,250  24,375 
Asset retirement obligations 2,434  2,459 
Finance lease obligations 18,677  12,085 
Operating lease liabilities 4,595  5,007 
Deferred taxes and other liabilities 14,579  15,996 
Total liabilities 280,408  290,982 
Commitments and contingencies
Shareholders’ equity 91,155  93,177 
Total liabilities and shareholders’ equity $ 371,563  $ 384,159 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months Ended
March 31,
2023 2022
Operating activities:
Net (losses) earnings $ (1,999) $ 6,090 
Adjustments to reconcile net (losses) earnings to net cash
provided by operating activities:
Depreciation and amortization 7,050  5,013 
Gains on sales of property (31) (491)
Provision for doubtful accounts (3) (5)
Stock-based compensation expense 283  195 
Deferred income taxes (1,424) 561 
Net change in fair value contracts (487) (20)
Changes in assets and liabilities:
Accounts receivable 30,916  (74,660)
Accounts receivable/payable, affiliates (31) 48 
Inventories 4,644  (23,440)
Income tax receivable —  1,284 
Prepayments and other current assets 90  684 
Accounts payable (12,653) 91,211 
Accrued liabilities (2,514) (775)
Other (134) 178 
Net cash provided by operating activities 23,707  5,873 
Investing activities:
Property and equipment additions (1,900) (3,694)
Proceeds from property sales 441  856 
Net cash used in investing activities (1,459) (2,838)
Financing activities:
Borrowings under Credit Agreement 18,000  — 
Repayments under Credit Agreement (18,625) — 
Principal repayments of finance lease obligations (1,576) (1,139)
Net proceeds from sale of equity 549  — 
Dividends paid on common stock (681) (1,068)
Net cash used in financing activities (2,333) (2,207)
Increase in cash and cash equivalents, including restricted cash 19,915  828 
Cash and cash equivalents, including restricted cash, at beginning of period 31,067  107,317 
Cash and cash equivalents, including restricted cash, at end of period $ 50,982  $ 108,145 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)

Three Months Ended
March 31,
2023 2022
Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings:
Net (losses) earnings $ (1,999) $ 6,090 
Add (subtract):
Income tax (benefit) provision (1,123) 1,968 
Depreciation and amortization 7,050  5,013 
Gains on sales of property (31) (491)
Stock-based compensation expense 283  195 
Inventory liquidation gains —  (8,717)
Inventory valuation losses 1,017  — 
Net change in fair value contracts (487) (20)
Adjusted cash flow $ 4,710  $ 4,038 

Adjusted net (losses) earnings and (losses) earnings
per common share (Non-GAAP):
Net (losses) earnings $ (1,999) $ 6,090 
Add (subtract):
Gains on sales of property (31) (491)
Stock-based compensation expense 283  195 
Net change in fair value contracts (487) (20)
Inventory liquidation gains —  (8,717)
Inventory valuation losses 1,017  — 
Tax effect of adjustments to earnings (losses) (164) 1,897 
Adjusted net losses $ (1,381) $ (1,046)
Adjusted losses per common share $ (0.55) $ (0.24)

Reconciliation of Adjusted Cash Flow to Net Cash
   Provided by Operating Activities:
Net cash provided by operating activities $ 23,707  $ 5,873 
Add (subtract):
Income tax (benefit) provision (1,123) 1,968 
Deferred income taxes 1,424  (561)
Provision for doubtful accounts 3  5 
Inventory liquidation gains —  (8,717)
Inventory valuation losses 1,017  — 
Changes in assets and liabilities (20,318) 5,470 
Adjusted cash flow $ 4,710  $ 4,038 


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