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

HOUSTON, Nov. 8, 2023 /PRNewswire/ -- 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. 

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.

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. 

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
[email protected]
(713) 881-3609

Investor Relations Contact

John Beisler or Steven Hooser
Three Part Advisors
(817) 310-8776

SOURCE Adams Resources & Energy, Inc.