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): November 4, 2021

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 4, 2021, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 2021. 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 November 4, 2021.
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 4, 2021	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

Exhibit 99.1

FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES RESULTS FOR

THIRD QUARTER 2021 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Thursday, November 4, 2021) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announced operational and financial results for the three months ended September 30, 2021 and declared a quarterly cash dividend of $0.24 per common share.

•Reported net earnings of $1.5 million, or $0.36 per diluted common share, on revenues of $568.2 million for the third quarter of 2021, compared to $3.1 million, or $0.72 per diluted common share, on revenues of $266.9 million for the third quarter of 2020.

•Generated net cash provided by operating activities of $12.1 million for the third quarter of 2021, versus net cash used in operating activities of $19.6 million for the third quarter of 2020. The increase was primarily driven by changes in working capital due to an increase in the market price of crude oil.

•Reported adjusted net earnings of $1.8 million, or $0.41 per diluted common share, for the third quarter of 2021, compared to $2.5 million, or $0.60 per diluted common share, for the third quarter of 2020.

•Produced adjusted cash flow for the third quarter of 2021 of $7.3 million versus $10.3 million for the third quarter of 2020.

Adjusted net earnings, adjusted 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.

Additional Highlights for Q3 2021

•Grew its cash and cash equivalents position to $95.6 million at September 30, 2021, which represented a 143% increase from $39.3 million at December 31, 2020.

•Increased its financial flexibility with liquidity of $122.1 million at September 30, 2021, including cash and cash equivalents and $26.5 million available under the Company’s $40.0 million Credit Agreement.

•Adam’s crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 91,941 barrels per day (“bpd”) of crude oil during the third quarter of 2021, compared to 90,896 bpd during the third quarter of 2020 and 89,585 bpd during the second quarter of

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2021. GulfMark held 340,276 barrels of crude oil inventory at September 30, 2021, compared to 421,759 barrels at December 31, 2020.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.93 million miles during the third quarter of 2021, versus 7.63 million miles during the third quarter of 2020 and 7.25 million miles during the second quarter of 2021. Contributing to the third quarter year-over-year decrease in miles traveled was the temporary reduction of activity levels in Louisiana due to the impacts of Hurricane Ida. This was partially offset by increased activity related to the June 2020 purchase of assets from CTL Transportation, which added new services and product lines for the Company’s new and existing customers in new markets in Florida, Georgia, Illinois, Missouri and Ohio.

•Adams’ crude oil pipeline and storage segment, which was established following the purchase of the Victoria Express Pipeline System (“VEX Pipeline System”) in October 2020, further expanded its scope of operations during the third quarter of 2021. Pipeline throughput increased to 9,759 bpd from 7,876 bpd for the second quarter of 2021, and terminalling volumes grew to 9,159 bpd for the third quarter of 2021 from 8,106 bpd for the second quarter of 2021.

Kevin J. Roycraft, Adams’ Chief Executive Officer, commented, “We are pleased with the operational and financial performance of both GulfMark and Service Transport during the third quarter of 2021. GulfMark continued to be a steady performer during the period while Service Transport’s improved efficiencies overcame some of the operational disruptions from Hurricane Ida. Looking at our pipeline and storage segment, we remain pleased with the performance of the VEX Pipeline System that was acquired in October of last year as we produced another quarter of positive cash flow.”

Capital Investments and Dividends

During the third quarter of 2021, the Company spent capital of $6.3 million for tractors and other field equipment. In addition, Adams paid dividends of $1.0 million, or $0.24 per common share.

Adams’ Board of Directors has declared a quarterly cash dividend for the third quarter of 2021 of $0.24 per common share, payable on December 17, 2021, to shareholders of record as of December 3, 2021. Adams’ has consistently paid a dividend since 1994.

Outlook

Mr. Roycraft continued, “As we look to the remainder of this year and into 2022, we believe we are well positioned to execute on additional targeted initiatives to drive increased efficiencies designed for further leverage on our recently acquired assets and diversify our service offerings for the benefit of our customers. We also look forward to leveraging additional opportunities to prudently expand our business through prudent acquisitions as we have done so successfully in the past.”

“We believe our strong financial position remains a key differentiator for Adams as we operate in a continued positive operating backdrop moving into 2022,” Mr. Roycraft concluded. “As

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important is our best-in-class team of employees that remain squarely focused on ensuring our customers receive unparalleled service quality and reliability. I look forward to continuing to work closely with our dedicated team as we strive to take the Company to new heights and drive incremental long-term value to our shareholders.”

Use of Non-GAAP Financial Measures

This press release and accompanying schedules includes the non-GAAP financial measures of adjusted cash flow, adjusted net earnings and adjusted 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. 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. The non-GAAP financial measures are defined and reconciled in the financial tables below.

About Adams Resources & Energy, Inc.

Adams Resources & Energy, Inc. is engaged in crude oil marketing, transportation, terminalling and storage and tank truck transportation of liquid chemicals and dry bulk through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC and GulfMark Terminals, LLC. 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. 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.

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				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues:
Marketing	$	543,228	$	245,184	$	1,310,343	$	722,546
Transportation	24,826		21,720		69,558		50,121
Pipeline and storage	127		—		515		—
Total revenues	568,181		266,904		1,380,416		772,667
Costs and expenses:
Marketing	537,362		237,479		1,285,650		721,798
Transportation	19,605		17,105		56,143		41,178
Pipeline and storage	562		—		1,594		—
General and administrative	3,502		1,405		9,839		7,030
Depreciation and amortization	4,849		4,859		14,703		13,610
Total costs and expenses	565,880		260,848		1,367,929		783,616
Operating earnings (losses)	2,301		6,056		12,487		(10,949)
Other income (expense):
Interest and other income	37		105		233		614
Interest expense	(178)		(70)		(602)		(288)
Total other (expense) income, net	(141)		35		(369)		326
Earnings (losses) before income taxes	2,160		6,091		12,118		(10,623)
Income tax (provision) benefit	(614)		(3,018)		(3,055)		5,772
Net earnings (losses)	$	1,546	$	3,073	$	9,063	$	(4,851)
Earnings (losses) per share:
Basic net earnings (losses) per common share	$	0.36	$	0.72	$	2.13	$	(1.14)
Diluted net earnings (losses) per common share	$	0.36	$	0.72	$	2.12	$	(1.14)
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,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	95,634	$	39,293
Restricted cash	6,788		12,772
Accounts receivable, net of allowance for doubtful accounts	130,169		99,799
Accounts receivable – related party	5		—
Inventory	24,362		19,336
Derivative assets	1,005		61
Income tax receivable	6,189		13,288
Prepayments and other current assets	1,509		2,964
Total current assets	265,661		187,513
Property and equipment, net	90,739		94,134
Operating lease right-of-use assets, net	7,551		8,051
Intangible assets, net	3,509		4,106
Other assets	2,965		2,383
Total assets	$	370,425	$	296,187
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	154,860	$	85,991
Derivative liabilities	964		52
Current portion of finance lease obligations	4,028		4,112
Current portion of operating lease liabilities	2,201		2,050
Other current liabilities	13,084		22,343
Total current liabilities	175,137		114,548
Other long-term liabilities:
Long-term debt	8,000		—
Asset retirement obligations	2,359		2,308
Finance lease obligations	10,434		11,507
Operating lease liabilities	5,353		6,000
Deferred taxes and other liabilities	11,060		12,732
Total liabilities	212,343		147,095
Commitments and contingencies
Shareholders’ equity	158,082		149,092
Total liabilities and shareholders’ equity	$	370,425	$	296,187

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine Months Ended
	September 30,
	2021		2020
Operating activities:
Net earnings (losses)	$	9,063	$	(4,851)
Adjustments to reconcile net earnings (losses) to net cash
provided by (used in) operating activities:
Depreciation and amortization	14,703		13,610
Gains on sales of property	(532)		(985)
Provision for doubtful accounts	(3)		(27)
Stock-based compensation expense	641		453
Deferred income taxes	(1,664)		(1,503)
Net change in fair value contracts	(32)		(3)
Changes in assets and liabilities:
Accounts receivable	(30,367)		(93)
Accounts receivable/payable, affiliates	(5)		153
Inventories	(5,026)		10,465
Income tax receivable	7,099		(1,782)
Prepayments and other current assets	1,455		142
Accounts payable	68,766		(70,082)
Accrued liabilities	770		4,396
Other	(636)		17
Net cash provided by (used in) operating activities	64,232		(50,090)
Investing activities:
Property and equipment additions	(9,929)		(3,589)
Asset acquisition	—		(9,163)
Proceeds from property sales	1,886		2,282
Insurance and state collateral refunds	—		1,127
Net cash used in investing activities	(8,043)		(9,343)
Financing activities:
Borrowings under Credit Agreement	8,000		—
Principal repayments of finance lease obligations	(3,240)		(1,677)
Payment for financed portion of VEX acquisition	(10,000)		—
Net proceeds from sale of equity	2,504		—
Payment of contingent consideration liability	—		(111)
Dividends paid on common stock	(3,096)		(3,063)
Net cash used in financing activities	(5,832)		(4,851)
Increase (Decrease) in cash and cash equivalents, including restricted cash	50,357		(64,284)
Cash and cash equivalents, including restricted cash, at beginning of period	52,065		122,255
Cash and cash equivalents, including restricted cash, at end of period	$	102,422	$	57,971

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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,
	2021		2020		2021		2020
Reconciliation of Adjusted Cash Flow to
Net Earnings (Losses):
Net earnings (losses)	$	1,546	$	3,073	$	9,063	$	(4,851)
Add (subtract):
Income tax (benefit) provision	614		3,018		3,055		(5,772)
Depreciation and amortization	4,849		4,859		14,703		13,610
Gains on sales of property	(267)		(845)		(532)		(985)
Stock-based compensation expense	224		149		641		453
Early retirement and terminations costs	—		—		—		431
Inventory liquidation gains	—		—		(10,282)		—
Inventory valuation losses	311		12		—		18,196
Net change in fair value contracts	(7)		9		(32)		(3)
Adjusted cash flow	$	7,270	$	10,275	$	16,616	$	21,079

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Adjusted net (losses) earnings and (losses)
earnings per common share (Non-GAAP):
Net earnings (losses)	$	1,546	$	3,073	$	9,063	$	(4,851)
Add (subtract):
Gains on sales of property	(267)		(845)		(532)		(985)
Stock-based compensation expense	224		149		641		453
Early retirement and terminations costs	—		—		—		431
Net change in fair value contracts	(7)		9		(32)		(3)
Inventory liquidation gains	—		—		(10,282)		—
Inventory valuation losses	311		12		—		18,196
Tax effect of adjustments to earnings (losses)	(55)		142		2,142		(3,799)
Adjusted net earnings	$	1,752	$	2,540	$	1,000	$	9,442
Adjusted earnings per common share	$	0.41	$	0.60	$	0.23	$	2.23

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Reconciliation of Adjusted Cash Flow to Net Cash    Provided by (Used in) Operating Activities:
Net cash provided by (used in) operating activities	$	12,125	$	(19,631)	$	64,232	$	(50,090)
Add (subtract):
Income tax provision (benefit)	614		3,018		3,055		(5,772)
Deferred income taxes	28		(31)		1,664		1,503
Provision for doubtful accounts	1		3		3		27
Early retirement and terminations costs	—		—		—		431
Inventory liquidation gains	—		—		(10,282)		—
Inventory valuation losses	311		12		—		18,196
Changes in assets and liabilities	(5,809)		26,904		(42,056)		56,784
Adjusted cash flow	$	7,270	$	10,275	$	16,616	$	21,079

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XML

Cover Page	Nov. 04, 2021
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 04, 2021
Entity Registrant Name	ADAMS RESOURCES & ENERGY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-7908
Entity Tax Identification Number	74-1753147
Entity Address, Address Line One	17 South Briar Hollow Lane
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	713
Local Phone Number	881-3600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.10 par value
Trading Symbol	AE
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false
Entity Central Index Key	0000002178
Amendment Flag	false