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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): November 8, 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 November 8, 2023, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 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: November 8, 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 a3q2023erexhibit991.htm EX-99.1 Document

Exhibit 99.1
FOR IMMEDIATE RELEASE
adamslogoa03a.jpg

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

Houston, Texas (Wednesday, November 8, 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 September 30, 2023. The Company also declared a quarterly cash dividend of $0.24 per common share.

Q3 2023 Financial Summary

•Total revenue of $760.6 million, versus $852.9 million for the third quarter of 2022.

•Net earnings of $2.3 million, or $0.88 per diluted common share, compared to earnings of $0.8 million, or $0.32 per common share for the second quarter of 2023 and net earnings of $2.2 million, or $0.50 per diluted common share for the third quarter of 2022.

•Net cash provided by operating activities of $11.4 million for the third quarter of 2023, a decrease of $28.6 million from the prior-year quarter. This decrease 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 cash flow of $4.8 million for the third quarter of 2023, compared to $7.1 million for the second quarter of 2023 and $12.6 million in the prior-year.

•Cash and cash equivalents were $16.3 million as of September 30, 2023, versus $9.0 million at June 30, 2023, primarily due to the timing of receipts and early payments from crude oil customers.

•Liquidity of $55.9 million at September 30, 2023, versus $48.6 million at June 30, 2023.

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

Adjusted cash flow is a non-generally accepted accounting principle (“non-GAAP”) financial measure that is defined and reconciled, along with the non-GAAP financial measures adjusted net (losses) earnings and adjusted net (losses) earnings per diluted common share, 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 92,556 barrels per day (“bpd”) of crude oil during the third quarter of 2023, compared to 91,878 bpd during the third quarter of 2022 and 92,152 bpd during the second quarter of 2023.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.51 million miles during the third quarter of 2023, versus 6.78 million miles during the third quarter of 2022 and 6.30 million miles during the second quarter of 2023.

•Adams’ crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System (“VEX Pipeline System”), throughput was 8,548 bpd for the third quarter of 2023, compared to 9,963 bpd for the third quarter of 2022 and 8,560 bpd for the second quarter of 2023, and terminalling volumes were 9,350 bpd for the third quarter of 2023, compared to 9,716 bpd in the third quarter of 2022, and 10,785 bpd for the second quarter of 2023.

•The 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 307,175 barrels of crude oil inventory at September 30, 2023, compared to 328,562 barrels at December 31, 2022.

“Our performance in the third quarter showcased several encouraging highlights in a very challenging environment. Our crude oil marketing segment demonstrated a sequential increase in operating income despite a number of headwinds,” said Kevin J. Roycraft, Chief Executive Officer of Adams. “Moreover, we increased our cash balance and liquidity and nearly tripled our net income on a sequential basis.”

Capital Investments and Dividends

During the third quarter of 2023, the Company had capital expenditures of $3.0 million primarily for the previously announced purchase of ten tractors, eight trailers and other field equipment. 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 2023 of $0.24 per common share, payable on December 15, 2023, to shareholders of record as of December 1, 2023.

Outlook

“We believe the challenges facing our GulfMark and Service Transport segments are expected to remain in place for the next few months, with a gradual recovery to begin late in the first half of 2024,” Mr. Roycraft continued. “Our Company remains in a very strong financial position to navigate the continued macroeconomic challenges affecting our industries. We are well-prepared to deliver meaningful performance when our key markets begin to improve. In addition, our continued commitment to our dividend should deliver long-term value to our shareholders,” Mr. Roycraft concluded.
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Use of Non-GAAP Financial Measures

This press release and accompanying schedules include 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. 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 third quarter results on Thursday, November 9, 2023 at 9:00 a.m. ET (8:00 a.m. CT). To participate in the live conference call, dial 1-844-413-3976 (Toll-Free) within the U.S., or 1-412-317-1802 (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 6806573.

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 Nine Months Ended
September 30, September 30,
2023 2022 2023 2022
Revenues:
Marketing $ 719,925  $ 814,394  $ 1,913,673  $ 2,524,465 
Transportation 24,206  29,830  75,103  86,054 
Pipeline and storage 59  —  308  — 
Logistics and repurposing 16,424  8,677  46,458  8,677 
Total revenues 760,614  852,901  2,035,542  2,619,196 
Costs and expenses:
Marketing 710,169  807,316  1,894,416  2,498,474 
Transportation 19,642  23,732  62,315  68,271 
Pipeline and storage 659  640  2,350  1,799 
Logistics and repurposing 15,121  7,582  41,448  7,582 
General and administrative 4,162  4,630  10,649  12,860 
Depreciation and amortization 6,936  6,008  21,289  16,109 
Total costs and expenses 756,689  849,908  2,032,467  2,605,095 
Operating earnings 3,925  2,993  3,075  14,101 
Other income (expense):
Interest and other income 119  338  893  665 
Interest expense (1,027) (119) (2,525) (369)
Total other (expense) income, net (908) 219  (1,632) 296 
Earnings before income taxes 3,017  3,212  1,443  14,397 
Income tax provision (759) (1,022) (357) (3,641)
Net earnings $ 2,258  $ 2,190  $ 1,086  $ 10,756 
Earnings per share:
Basic net earnings per common share $ 0.89  $ 0.50  $ 0.43  $ 2.46 
Diluted net earnings per common share $ 0.88  $ 0.50  $ 0.42  $ 2.44 
Dividends per common share $ 0.24  $ 0.24  $ 0.72  $ 0.72 

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

September 30, December 31,
2023 2022
ASSETS
Current assets:
Cash and cash equivalents $ 16,313  $ 20,532 
Restricted cash 8,575  10,535 
Accounts receivable, net of allowance for doubtful accounts 219,263  189,039 
Inventory 27,650  26,919 
Derivative assets 5  — 
Income tax receivable 510  — 
Prepayments and other current assets 2,470  3,118 
Total current assets 274,786  250,143 
Property and equipment, net 111,042  106,425 
Operating lease right-of-use assets, net 6,212  7,720 
Intangible assets, net 8,407  9,745 
Goodwill 6,673  6,428 
Other assets 3,475  3,698 
Total assets $ 410,595  $ 384,159 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 226,613  $ 204,391 
Accounts payable – related party —  31 
Derivative liabilities —  330 
Current portion of finance lease obligations 6,863  4,382 
Current portion of operating lease liabilities 2,769  2,712 
Current portion of long-term debt 2,500  — 
Other current liabilities 13,856  19,214 
Total current liabilities 252,601  231,060 
Other long-term liabilities:
Long-term debt 20,000  24,375 
Asset retirement obligations 2,499  2,459 
Finance lease obligations 22,292  12,085 
Operating lease liabilities 3,446  5,007 
Deferred taxes and other liabilities 15,696  15,996 
Total liabilities 316,534  290,982 
Commitments and contingencies
Shareholders’ equity 94,061  93,177 
Total liabilities and shareholders’ equity $ 410,595  $ 384,159 

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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,
2023 2022 2023 2022
Operating activities:
Net earnings $ 2,258  $ 2,190  $ 1,086  $ 10,756 
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 6,936  6,008  21,289  16,109 
Gains on sales of property (663) (771) (1,429) (1,709)
Provision for doubtful accounts 39  (12) 29  (20)
Stock-based compensation expense 389  254  1,044  712 
Change in contingent consideration liability —  —  (2,566) — 
Deferred income taxes 773  (1,429) 3  (1,761)
Net change in fair value contracts (35) (1,254) (335) (1,884)
Changes in assets and liabilities:
Accounts receivable (60,869) 73,777  (30,253) (56,060)
Accounts receivable/payable, affiliates —  17  (31) 17 
Inventories (1,127) 32,080  (731) (10,259)
Income tax receivable (41) —  (510) 6,424 
Prepayments and other current assets 138  86  648  468 
Accounts payable 63,845  (74,219) 22,239  46,925 
Accrued liabilities (145) 3,875  (2,709) 6,489 
Other (52) (592) 64  (375)
Net cash provided by operating activities 11,446  40,010  7,838  15,832 
Investing activities:
Property and equipment additions (3,009) (2,014) (8,917) (6,797)
Acquisition of Firebird and Phoenix, net of cash acquired —  (33,590) —  (33,590)
Proceeds from property sales 1,634  835  3,078  2,209 
Insurance and state collateral refunds —  331  —  331 
Net cash used in investing activities (1,375) (34,438) (5,839) (37,847)
Financing activities:
Borrowings under Credit Agreement 38,000  15,000  76,000  45,000 
Repayments under Credit Agreement (38,625) —  (77,875) (30,000)
Principal repayments of finance lease obligations (1,697) (1,185) (4,944) (3,491)
Net proceeds from sale of equity —  —  549  283 
Dividends paid on common stock (619) (1,054) (1,908) (3,180)
Net cash (used in) provided by financing activities (2,941) 12,761  (8,178) 8,612 
Increase (Decrease) in cash and cash equivalents, including
   restricted cash		 7,130  18,333  (6,179) (13,403)
Cash and cash equivalents, including restricted cash,
   at beginning of period		 17,758  75,581  31,067  107,317 
Cash and cash equivalents, including restricted cash,
   at end of period		 $ 24,888  $ 93,914  $ 24,888  $ 93,914 

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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,
2023 2022 2023 2022
Reconciliation of Adjusted Cash Flow to Net Earnings:
Net earnings $ 2,258  $ 2,190  $ 1,086  $ 10,756 
Add (subtract):
Income tax provision 759  1,022  357  3,641 
Depreciation and amortization 6,936  6,008  21,289  16,109 
Gains on sales of property (663) (771) (1,429) (1,709)
Stock-based compensation expense 389  254  1,044  712 
Change in contingent consideration liability —  —  (2,566) — 
Inventory liquidation gains (4,890) —  (2,922) (2,062)
Inventory valuation losses —  5,122  —  — 
Net change in fair value contracts (35) (1,254) (335) (1,884)
Adjusted cash flow $ 4,754  $ 12,571  $ 16,524  $ 25,563 

Reconciliation of Adjusted net earnings (losses) and earnings
(losses) per common share (Non-GAAP) to Net Earnings:
Net earnings $ 2,258  $ 2,190  $ 1,086  $ 10,756 
Add (subtract):
Gains on sales of property (663) (771) (1,429) (1,709)
Stock-based compensation expense 389  254  1,044  712 
Change in contingent consideration liability —  —  (2,566) — 
Net change in fair value contracts (35) (1,254) (335) (1,884)
Inventory liquidation gains (4,890) —  (2,922) (2,062)
Inventory valuation losses —  5,122  —  — 
Tax effect of adjustments to earnings (losses) 1,092  (704) 1,304  1,038 
Adjusted net (losses) earnings $ (1,849) $ 4,837  $ (3,818) $ 6,851 
Adjusted (losses) earnings per common share $ (0.72) $ 1.09  $ (1.49) $ 1.55 

Reconciliation of Adjusted Cash Flow to Net Cash
   Provided By Operating Activities:
Net cash provided by operating activities $ 11,446  $ 40,010  $ 7,838  $ 15,832 
Add (subtract):
Income tax provision (benefit) 759  1,022  357  3,641 
Deferred income taxes (773) 1,429  (3) 1,761 
Provision for doubtful accounts (39) 12  (29) 20 
Inventory liquidation gains (4,890) —  (2,922) (2,062)
Inventory valuation losses —  5,122  —  — 
Changes in assets and liabilities (1,749) (35,024) 11,283  6,371 
Adjusted cash flow $ 4,754  $ 12,571  $ 16,524  $ 25,563 

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