HOUSTON, May 8, 2019 /PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) ("Adams" or the "Company") today announced its financial results for the three months ended March 31, 2019.
The Company reported net earnings of $4.9 million, or $1.16 per common share, on revenues of $445.2 million for the first quarter of 2019, compared to net earnings of $1.1 million, or $0.27 per common share, on revenues of $387.3 million for the first quarter of 2018. On an adjusted basis, net earnings were $1.0 million, or $0.23 per common share, for the first quarter of 2019, compared to net earnings of $0.7 million, or $0.16 per common share, for the first quarter of 2018.
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.
First Quarter 2019 Highlights:
- Gross revenues were approximately $445.2 million for the first quarter of 2019 compared to $387.3 million for the first quarter of 2018
- Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 113,279 per day ("bpd") of crude oil during the first quarter of 2019, compared to 65,194 bpd of crude oil during the first quarter of 2018
- Cash and cash equivalents increased by approximately 12 percent from December 31, 2018 of $117.1 million to approximately $130.9 million at March 31, 2019
- $55.4 million of undrawn capacity under our letter of credit facility at March 31, 2019
- Adjusted cash flow of $4.9 million for the first quarter of 2019 compared to $3.3 million for the first quarter of 2018
- Approximately 452,874 barrels of crude oil inventory at March 31, 2019 compared to 415,523 barrels at December 31, 2018
- No short or long term debt as of March 31, 2019
"During the first quarter of 2019, our Service Transport business unit continued to generate improved financial and operating results as our revenue per mile increased 13 percent from the first quarter of 2018, but decreased 3 percent from the fourth quarter of 2018," 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 during the first quarter of 2019 and commitments to purchase an additional 42 tractors and 73 trailers during 2019."
"At our GulfMark business unit, crude oil marketing volumes for the first quarter of 2019 increased 2 percent from the fourth quarter of 2018 and increased 74 percent from the first quarter of 2018, primarily as a result of the acquisition of a crude oil gathering operation during October 2018, coupled with increased production in our market areas. We have seen some increase in marketing margins as a result of improved marketing conditions."
"During the remainder of 2019, we will remain focused on safety first and remaining in the top tier for all safety statistics. We will be 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, and improving company-wide driver recruitment and retention, and increasing our driver count. We will continue to explore synergic growth opportunities in our core businesses, both organically and in the open market," continued Pressler.
Capital Investments
During the first quarter of 2019, the Company spent approximately $8.4 million of capital and paid dividends of $0.9 million ($0.22 per common share). The majority of the capital costs relate to the purchase of tractors in our Service Transport subsidiary.
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 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
[email protected]
(713) 881-3609
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES |
|||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
(In thousands, except per share data) |
|||||
Three Months Ended |
|||||
March 31, |
|||||
2019 |
2018 |
||||
Revenues: |
|||||
Marketing |
$ |
429,761 |
$ |
373,638 |
|
Transportation |
15,407 |
13,618 |
|||
Total revenues |
445,168 |
387,256 |
|||
Costs and expenses: |
|||||
Marketing |
420,541 |
369,183 |
|||
Transportation |
13,101 |
12,301 |
|||
General and administrative |
2,684 |
2,283 |
|||
Depreciation and amortization |
3,589 |
2,412 |
|||
Total costs and expenses |
439,915 |
386,179 |
|||
Operating earnings |
5,253 |
1,077 |
|||
Other income (expense): |
|||||
Gain on dissolution of investment |
498 |
— |
|||
Interest income |
656 |
387 |
|||
Interest expense |
(65) |
(19) |
|||
Total other income (expense), net |
1,089 |
368 |
|||
Earnings before income taxes |
6,342 |
1,445 |
|||
Income tax provision |
(1,434) |
(307) |
|||
Net earnings |
$ |
4,908 |
$ |
1,138 |
|
Earnings per share: |
|||||
Basic net earnings per common share |
$ |
1.16 |
$ |
0.27 |
|
Diluted net earnings per common share |
$ |
1.16 |
$ |
0.27 |
|
Dividends per common share |
$ |
0.22 |
$ |
0.22 |
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES |
|||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
(In thousands, except share data) |
|||||
March 31, |
December 31, |
||||
2019 |
2018 |
||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ |
130,893 |
$ |
117,066 |
|
Accounts receivable, net of allowance for doubtful accounts |
88,095 |
85,197 |
|||
Accounts receivable – related party |
— |
425 |
|||
Inventory |
29,237 |
22,779 |
|||
Derivative assets |
274 |
162 |
|||
Income tax receivable |
1,978 |
2,404 |
|||
Prepayments and other current assets |
1,609 |
1,557 |
|||
Total current assets |
252,086 |
229,590 |
|||
Property and equipment, net |
48,917 |
44,623 |
|||
Operating lease right-of-use assets |
10,681 |
— |
|||
Cash deposits and other assets |
2,951 |
4,657 |
|||
Total assets |
$ |
314,635 |
$ |
278,870 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Accounts payable |
$ |
133,325 |
$ |
116,068 |
|
Accounts payable – related party |
6 |
29 |
|||
Derivative liabilities |
270 |
139 |
|||
Current portion of finance lease obligations |
1,002 |
883 |
|||
Current portion of operating lease liabilities |
2,160 |
— |
|||
Other current liabilities |
8,580 |
6,148 |
|||
Total current liabilities |
145,343 |
123,267 |
|||
Other long-term liabilities: |
|||||
Asset retirement obligations |
1,538 |
1,525 |
|||
Finance lease obligations |
3,428 |
3,209 |
|||
Operating lease liabilities |
8,523 |
— |
|||
Deferred taxes and other liabilities |
5,104 |
4,271 |
|||
Total liabilities |
163,936 |
132,272 |
|||
Commitments and contingencies |
|||||
Shareholders' equity |
150,699 |
146,598 |
|||
Total liabilities and shareholders' equity |
$ |
314,635 |
$ |
278,870 |
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES |
|||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
(In thousands) |
|||||
Three Months Ended |
|||||
March 31, |
|||||
2019 |
2018 |
||||
Operating activities: |
|||||
Net earnings |
$ |
4,908 |
$ |
1,138 |
|
Adjustments to reconcile net earnings to net cash |
|||||
provided by operating activities: |
|||||
Depreciation and amortization |
3,589 |
2,412 |
|||
Gains on sales of property |
(178) |
(26) |
|||
Provision for doubtful accounts |
(32) |
— |
|||
Stock-based compensation expense |
123 |
— |
|||
Deferred income taxes |
834 |
(709) |
|||
Net change in fair value contracts |
19 |
(2) |
|||
Gain on dissolution of AREC |
(498) |
— |
|||
Changes in assets and liabilities: |
|||||
Accounts receivable |
(2,866) |
4,200 |
|||
Accounts receivable/payable, affiliates |
(23) |
— |
|||
Inventories |
(6,458) |
(7,075) |
|||
Income tax receivable |
426 |
880 |
|||
Prepayments and other current assets |
(52) |
153 |
|||
Accounts payable |
17,914 |
1,377 |
|||
Accrued liabilities |
2,432 |
851 |
|||
Other |
878 |
86 |
|||
Net cash provided by operating activities |
21,016 |
3,285 |
|||
Investing activities: |
|||||
Property and equipment additions |
(8,351) |
(866) |
|||
Proceeds from property sales |
543 |
132 |
|||
Proceeds from dissolution of AREC |
923 |
— |
|||
Insurance and state collateral refunds |
842 |
603 |
|||
Net cash used in investing activities |
(6,043) |
(131) |
|||
Financing activities: |
|||||
Principal repayments of finance lease obligations |
(218) |
(83) |
|||
Dividends paid on common stock |
(928) |
(928) |
|||
Net cash used in financing activities |
(1,146) |
(1,011) |
|||
Increase in cash and cash equivalents |
13,827 |
2,143 |
|||
Cash and cash equivalents at beginning of period |
117,066 |
109,393 |
|||
Cash and cash equivalents at end of period |
$ |
130,893 |
$ |
111,536 |
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES |
|||||
NON-GAAP RECONCILIATIONS |
|||||
(In thousands, except per share data) |
|||||
Three Months Ended |
|||||
March 31, |
|||||
2019 |
2018 |
||||
Reconciliation of Adjusted Cash Flow to Net Earnings: |
|||||
Net earnings |
$ |
4,908 |
$ |
1,138 |
|
Add (subtract): |
|||||
Income tax provision |
1,434 |
307 |
|||
Depreciation and amortization |
3,589 |
2,412 |
|||
Gains on sales of property |
(178) |
(26) |
|||
Gain on dissolution of AREC |
(498) |
— |
|||
Stock-based compensation expense |
123 |
— |
|||
Inventory liquidation gains |
(4,462) |
(552) |
|||
Net change in fair value contracts |
19 |
(2) |
|||
Adjusted cash flow |
$ |
4,935 |
$ |
3,277 |
|
Three Months Ended |
|||||
March 31, |
|||||
2019 |
2018 |
||||
Adjusted net earnings and earnings per common share (Non-GAAP): |
|||||
Net earnings |
$ |
4,908 |
$ |
1,138 |
|
Add (subtract): |
|||||
Gain on dissolution of AREC |
(498) |
— |
|||
Gains on sales of property |
(178) |
(26) |
|||
Stock-based compensation expense |
123 |
— |
|||
Net change in fair value of contracts |
19 |
(2) |
|||
Inventory liquidation gains |
(4,462) |
(552) |
|||
Tax effect of adjustments to earnings |
1,049 |
122 |
|||
Adjusted net earnings |
$ |
961 |
$ |
680 |
|
Adjusted earnings per common share |
$ |
0.23 |
$ |
0.16 |
SOURCE Adams Resources & Energy, Inc.
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