8-K

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): August 8, 2018

ADAMS RESOURCES & ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-7908	74-1753147
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company o

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 8, 2018, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results and its dividend declaration for the quarter ended June 30, 2018. 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  Press release of Adams Resources & Energy, Inc. issued August 8, 2018.

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:	August 8, 2018	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer
			(Principal Financial Officer and
			Principal Accounting Officer)

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES RESULTS FOR

SECOND QUARTER 2018 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Wednesday, August 8, 2018) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announced its financial results for the three months ended June 30, 2018.

The Company reported net earnings of $3.6 million, or $0.86 per common share, on revenues of $452.4 million for the second quarter of 2018, compared to a net loss of $0.3 million, or $(0.07) per common share, on revenues of $315.2 millionfor the second quarter of 2017. On an adjusted basis, net earnings were $1.8 million, or $0.42 per common share, for the second quarter of 2018, compared to net earningsof $0.9 million, or $0.21 per common share, for the second quarter of 2017.

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.

Second Quarter 2018 Highlights:

• Gross revenues of approximately $452.4 million for the second quarter of 2018 compared to $315.2 million for the second quarter of 2017

• Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 70,389 per day (“bpd”) of crude oil during the second quarter of 2018, compared to 66,817 bpd of crude oil during the second quarter of 2017

• Cash and cash equivalents increased 16 percent from December 31, 2017 levels of $109.4 millionto $127.0 million at June 30, 2018

• $59.6 million of undrawn capacity under our letter of credit facility at June 30, 2018

• Generated adjusted cash flow of $4.7 millionfor the second quarter of 2018 compared to $4.6 million for the second quarter of 2017

• Approximately 302,591 barrels of crude oil inventory at June 30, 2018 compared to 198,011 barrels at December 31, 2017

• Dividend of $0.22 per share for the second quarter of 2018

• No short or long term debt as of June 30, 2018

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“During the second quarter of 2018, Service Transport continued to generate improved financial and operating results as our revenue per mile increased 8 percent from the first quarter of 2018 and 20 percent from the second quarter of 2017,” said Townes G. Pressler, Executive Chairman. “As customer demand continues to increase in this segment, we have been able to improve trucking rates as we continue to provide dependable superior service to our customers at Service Transport. We are improving the age of our fleet with the purchase of tennew tractors during the second quarter of 2018,with 41 more scheduled for purchase and delivery by the end of 2018.”

“At GulfMark, crude oil marketing volumes for the second quarter of 2018 increased 8 percent from the first quarter of 2018 and 5 percent from the second quarter of 2017, primarily as a result of increased production in our market areas.Our overall marketing margins have expanded as a result of our exit in areas with thin margins.”

“During the remainder of 2018, we plan to remain focused on increasing margins in our crude oil marketing division, disciplined replacement of aging tractors and right sizing our tractor and trailer fleets, improving company-wide driver retention and increasing driver count, and exploring growth opportunities in our core businesses, both organically and in the open market,” continued Pressler.

Capital Investments and Dividends

During the second quarter of 2018, the Company recorded approximately $1.9 millionof capital costs and paid dividends of $0.9 million($0.22 per share). The majority of the capital costs relate to the purchase of tractorsin our Service Transport subsidiary.

The Company’s Board of Directors also declared a quarterly cash dividend for the second quarter of 2018 in the amount of $0.22 per common share, payable on September 21, 2018 to shareholders of record as of September 7, 2018.

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 and ISO tank container storage and transportation through its two subsidiaries, GulfMark Energy, Inc. and Service Transport Company, respectively. 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, 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

tohmart@adamsresources.com

(713) 881-3609

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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				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Revenues:
Marketing	$	438,791	$	301,176	$	812,429	$	589,791
Transportation	13,626		13,616		27,244		27,071
Oil and natural gas	—		410		—		1,427
Total revenues	452,417		315,202		839,673		618,289
Costs and expenses:
Marketing	431,683		297,508		800,866		582,661
Transportation	11,890		11,851		24,191		24,013
Oil and natural gas	—		201		—		951
General and administrative	2,284		1,460		4,567		4,097
Depreciation, depletion and amortization	2,262		3,563		4,674		7,532
Total costs and expenses	448,119		314,583		834,298		619,254
Operating earnings (losses)	4,298		619		5,375		(965)
Other income (expense):
Loss on deconsolidation of subsidiary	—		(1,635)		—		(1,635)
Interest income	498		260		885		419
Interest expense	(15)		(1)		(34)		(2)
Total other income (expense), net	483		(1,376)		851		(1,218)
(Losses) earnings before income taxes	4,781		(757)		6,226		(2,183)
Income tax benefit (provision)	(1,161)		475		(1,468)		1,041
Net (losses) earnings	$	3,620	$	(282)	$	4,758	$	(1,142)
Earnings (losses) per share:
Basic and diluted net (losses) earnings
per common share	$	0.86	$	(0.07)	$	1.13	$	(0.27)
Weighted average number of common
shares outstanding	4,218		4,218		4,218		4,218
Dividends per common share	$	0.22	$	0.22	$	0.44	$	0.44

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30,		December 31,
	2018		2017
ASSETS
Current assets:
Cash and cash equivalents	$	126,999	$	109,393
Accounts receivable, net of allowance for doubtful accounts	118,533		121,353
Inventory	21,513		12,192
Derivative assets	538		166
Income tax receivable	—		1,317
Prepayments and other current assets	1,197		1,264
Total current assets	268,780		245,685
Property and equipment, net	27,304		29,362
Investments in unconsolidated affiliates	425		425
Cash deposits and other	6,618		7,232
Total assets	$	303,127	$	282,704
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	140,296	$	124,706
Accounts payable – related party	5		5
Derivative liabilities	514		145
Current portion of capital lease obligations	345		338
Other current liabilities	6,845		4,404
Total current liabilities	148,005		129,598
Other long-term liabilities:
Asset retirement obligations	1,405		1,273
Capital lease obligations	1,177		1,351
Deferred taxes and other liabilities	2,516		3,363
Total liabilities	153,103		135,585
Commitments and contingencies
Shareholders’ equity	150,024		147,119
Total liabilities and shareholders’ equity	$	303,127	$	282,704

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended
	June 30,
	2018		2017
Operating activities:
Net (losses) earnings	$	4,758	$	(1,142)
Adjustments to reconcile net (losses) earnings to net cash
provided by operating activities:
Depreciation, depletion and amortization	4,674		7,532
Gains on sales of property	(446)		(129)
Impairment of oil and natural gas properties	—		3
Provision for doubtful accounts	(32)		(8)
Stock-based compensation expense	3		—
Deferred income taxes	(832)		(926)
Net change in fair value contracts	(3)		(700)
Loss on deconsolidation of subsidiary	—		1,635
Changes in assets and liabilities:
Accounts receivable	2,852		13,581
Accounts receivable/payable, affiliates	—		(151)
Inventories	(9,321)		(2,887)
Income tax receivable	1,317		(336)
Prepayments and other current assets	67		887
Accounts payable	15,634		3,357
Accrued liabilities	2,441		(483)
Other	125		(461)
Net cash provided by (used in) operating activities	21,237		19,772
Investing activities:
Property and equipment additions	(2,728)		(2,108)
Proceeds from property sales	655		190
Insurance and state collateral refunds	465		347
Net cash used in investing activities	(1,608)		(1,571)
Financing activities:
Principal repayments of capital lease obligations	(167)		—
Dividends paid on common stock	(1,856)		(1,856)
Net cash used in financing activities	(2,023)		(1,856)
Increase in cash and cash equivalents	17,606		16,345
Cash and cash equivalents at beginning of period	109,393		87,342
Cash and cash equivalents at end of period	$	126,999	$	103,687

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Reconciliation of Adjusted Cash Flow to Net
(Losses) Earnings:
Net (losses) earnings	$	3,620	$	(282)	$	4,758	$	(1,142)
Income tax (benefit)provision	1,161		(475)		1,468		(1,041)
Depreciation, depletion and amortization	2,262		3,563		4,674		7,532
Gains on sales of property	(420)		(136)		(446)		(129)
Impairment of oil and natural gas properties	—		—		—		3
Loss on deconsolidation of subsidiary	—		1,635		—		1,635
Stock-based compensation expense	3		—		3		—
Inventory liquidation gains	(1,923)		—		(2,475)		—
Inventory valuation losses	—		1,405		—		2,063
Net change in fair value contracts	(1)		(280)		(3)		(700)
Legal and other accrual reversals	—		(840)		—		(840)
Adjusted cash flow	$	4,702	$	4,590	$	7,979	$	7,381

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Adjusted net (losses) earnings and (losses)
earnings per common share (Non-GAAP):
Net (losses) earnings	$	3,620	$	(282)	$	4,758	$	(1,142)
Add (subtract):
Loss on deconsolidation of subsidiary	—		1,635		—		1,635
Gains on sales of property	(420)		(136)		(446)		(129)
Impairment of oil and natural gas properties	—		—		—		3
Stock-based compensation expense	3		—		3		—
Net change in fair value of contracts	(1)		(280)		(3)		(700)
Inventory liquidation gains	(1,923)		—		(2,475)		—
Inventory valuation losses	—		1,405		—		2,063
Legal and other accrual reversals	—		(840)		—		(840)
Tax effect of adjustments to (losses) earnings	492		(624)		613		(711)
Adjusted net earnings	$	1,771	$	878	$	2,450	$	179
Adjusted earnings per common share	$	0.42	$	0.21	$	0.58	$	0.04

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