0000002178-18-000006.txt : 20180312 0000002178-18-000006.hdr.sgml : 20180312 20180312161225 ACCESSION NUMBER: 0000002178-18-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180312 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180312 DATE AS OF CHANGE: 20180312 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS RESOURCES & ENERGY, INC. CENTRAL INDEX KEY: 0000002178 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS) [5172] IRS NUMBER: 741753147 STATE OF INCORPORATION: DE FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07908 FILM NUMBER: 18683512 BUSINESS ADDRESS: STREET 1: 17 S. BRIAR HOLLOW LN. CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 713-881-3600 MAIL ADDRESS: STREET 1: P O BOX 844 CITY: HOUSTON STATE: TX ZIP: 77001 FORMER COMPANY: FORMER CONFORMED NAME: ADAMS RESOURCES & ENERGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ADA RESOURCES INC DATE OF NAME CHANGE: 19790620 8-K 1 a4q2017er8-k.htm 8-K-4Q 2017 EARNINGS RELEAE Document


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): March 12, 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 March 12, 2018, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended December 31, 2017. 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 March 12, 2018.


2


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:
March 12, 2018
By:
/s/ Josh C. Anders
 
 
 
Josh C. Anders
 
 
 
Chief Financial Officer
 
 
 
(Principal Financial Officer and
 
 
 
Principal Accounting Officer)


3
 EX-99.1 2 a4q2017erexhibit991.htm EXHIBIT 99.1 - EARNINGS RELEAE Exhibit


Exhibit 99.1
adamslogoa01.jpg
 
FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES
FOURTH QUARTER 2017 RESULTS

Houston, Texas (Monday, March 12, 2018) -- Adams Resources & Energy, Inc. (NYSE MKT: AE) (“Adams” or the “Company”) today announced its financial results for the three months and year ended December 31, 2017.

The Company reported net earnings of $3.7 million, or $0.88 per common share, on revenues of $408.5 million for the fourth quarter of 2017, compared to a net loss of $0.2 million, or ($0.04) per common share, on revenues of $299.0 million for the fourth quarter of 2016. On an adjusted basis, net earnings were $1.3 million, or $0.31 per common share, for the fourth quarter of 2017, compared to a net loss of $1.6 million, or ($0.38) per common share, for the fourth quarter of 2016. For the full year 2017, the Company had a net loss of $0.5 million, or ($0.11) per common share, on revenues of $1.3 billion, compared to net earnings of $2.5 million, or $0.60 per common share, on revenues of $1.1 billion for the full year 2016. On an adjusted basis, net earnings were $1.3 million, or $0.31 per common share for the full year 2017, compared to a net loss of $3.0 million, or ($0.70) per common share for the full year 2016.

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.

Fourth Quarter 2017 Highlights:

•
Gross revenues of approximately $408.5 million for the fourth quarter of 2017 compared to $299.0 million for the fourth quarter of 2016, and gross revenues of approximately $1.3 billion for the full year 2017 compared to $1.1 billion for the full year 2016
•
Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 72,387 barrels per day (“bpd”) of crude oil during the fourth quarter of 2017, compared to 66,469 bpd of crude oil during the fourth quarter of 2016
•
Cash and cash equivalents increased 25 percent from December 31, 2016 levels of $87 million to over $109 million at December 31, 2017
•
$167 million of liquidity ($109.4 million of cash and cash equivalents and $57.8 million of undrawn letter of credit facility) at December 31, 2017
•
Generated positive adjusted cash flow of $3.2 million for the fourth quarter of 2017 compared to positive adjusted cash flow of $2.3 million for the fourth quarter of 2016



•
Approximately 198,011 barrels of crude oil inventory at December 31, 2017
•
Dividend of $0.22 per share for the fourth quarter of 2017
•
No short or long term debt at December 31, 2017

“During the fourth quarter of 2017, we generated positive financial and operating results from our marketing segment as our average daily barrels marketed and transported increased approximately nine percent from levels in the fourth quarter of 2016 to 72,387 barrels per day,” said Townes Pressler, Executive Chairman. “Volumes increased as our customers’ completion crews converted drilled but uncompleted wells to production primarily in the Gulf Coast region. Service Transport began to gain positive momentum as our revenue per mile increased 15 percent from the fourth quarter of 2016 to the fourth quarter of 2017. As demand remains robust, we are making good progress in improving trucking rates with our customers at Service Transport. During 2018, we plan to remain focused on enhancing margins, with disciplined investing and upgrading our fleet of tractors with the latest technologically advanced safety equipment, as well as actively pursuing development opportunities that complement our two primary business segments,” continued Pressler.

Capital Investments and Dividends
 
During the fourth quarter of 2017, the Company recorded approximately $0.2 million of capital spending and paid dividends of $0.9 million ($0.22 per share). For the full year 2017, the Company recorded approximately $4.5 million of capital and paid dividends of $3.7 million ($0.88 per share). Of the $4.5 million of capital recorded during 2017, $1.8 million was associated with capital leases of tractors for our marketing segment and $1.8 million was associated with drilling and completions activity associated with our upstream subsidiary. The Company exited the upstream business through a chapter 11 bankruptcy sale process in which substantially all of the assets were sold during 2017. The upstream subsidiary obtained a confirmed plan from the Delaware bankruptcy court in December 2017.

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 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. 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: Josh C. Anders
EVP, Chief Financial Officer
janders@adamsresources.com
(281) 974-9442

3


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Marketing
$
395,255

 
$
285,148

 
$
1,267,275

 
$
1,043,775

Transportation
13,205

 
12,838

 
53,358

 
52,355

Oil and natural gas
—

 
983

 
1,427

 
3,410

Total revenues
408,460

 
298,969

 
1,322,060

 
1,099,540

 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
Marketing
387,196

 
278,875

 
1,247,763

 
1,016,733

Transportation
11,857

 
11,617

 
48,538

 
45,154

Oil and natural gas
—

 
(337
)
 
948

 
2,084

Oil and natural gas property impairments
—

 
313

 
3

 
313

General and administrative
2,823

 
4,158

 
9,707

 
10,410

Depreciation, depletion and amortization
2,827

 
4,407

 
13,599

 
18,792

Total costs and expenses
404,703

 
299,033

 
1,320,558

 
1,093,486

 
 
 
 
 
 
 
 
Operating earnings (losses)
3,757

 
(64
)
 
1,502

 
6,054

 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
—

 
—

 
(3,505
)
 
—

Impairment of investment in unconsolidated affiliate
—

 
—

 
(2,500
)
 
—

Interest income
314

 
138

 
1,103

 
582

Interest expense
(17
)
 
(2
)
 
(27
)
 
(2
)
Total other income (expense), net
297

 
136

 
(4,929
)
 
580

 
 
 
 
 
 
 
 
(Losses) earnings before income taxes and
 
 
 
 
 
 
 
investment in unconsolidated affiliate
4,054

 
72

 
(3,427
)
 
6,634

 
 
 
 
 
 
 
 
Income tax benefit (provision)
(361
)
 
(240
)
 
2,945

 
(2,691
)
 
 
 
 
 
 
 
 
Earnings (losses) from continuing operations
3,693

 
(168
)
 
(482
)
 
3,943

 
 
 
 
 
 
 
 
Losses from investment in unconsolidated affiliate,
 
 
 
 
 
 
 
net of tax benefit
—

 
—

 
—

 
(1,430
)
 
 
 
 
 
 
 
 
Net (losses) earnings
$
3,693

 
$
(168
)
 
$
(482
)
 
$
2,513

 
 
 
 
 
 
 
 
Earnings (losses) per share:
 
 
 
 
 
 
 
From continuing operations
$
0.88

 
$
(0.04
)
 
$
(0.11
)
 
$
0.94

From investment in unconsolidated affiliate
—

 
—

 
—

 
(0.34
)
Basic and diluted net (losses) earnings
 
 
 
 
 
 
 
per common share
$
0.88

 
$
(0.04
)
 
$
(0.11
)
 
$
0.60

 
 
 
 
 
 
 
 
Weighted average number of common
 
 
 
 
 
 
 
shares outstanding
4,218

 
4,218

 
4,218

 
4,218

 
 
 
 
 
 
 
 
Dividends per common share
$
0.22

 
$
0.22

 
$
0.88

 
$
0.88

 
 
 
 
 
 
 
 


4


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
109,393

 
$
87,342

Accounts receivable, net of allowance for doubtful accounts
121,353

 
87,162

Inventory
12,192

 
13,070

Derivative assets
166

 
112

Income tax receivable
1,317

 
2,735

Prepayments and other current assets
1,264

 
2,097

Total current assets
245,685

 
192,518

 
 
 
 
Property and equipment, net
29,362

 
46,325

Investments in unconsolidated affiliates
425

 
2,500

Cash deposits and other
7,232

 
5,529

Total assets
$
282,704

 
$
246,872

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
124,706

 
$
79,897

Accounts payable – related party
5

 
53

Derivative liabilities
145

 
64

Current portion of capital lease obligations
338

 
—

Other current liabilities
4,404

 
6,060

Total current liabilities
129,598

 
86,074

Other long-term liabilities:
 
 
 
Asset retirement obligations
1,273

 
2,329

Capital lease obligations
1,351

 
—

Deferred taxes and other liabilities
3,363

 
7,157

Total liabilities
135,585

 
95,560

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity
147,119

 
151,312

Total liabilities and shareholders’ equity
$
282,704

 
$
246,872



5


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Year Ended
 
December 31,
 
2017
 
2016
Operating activities:
 
 
 
Net (losses) earnings
$
(482
)
 
$
2,513

Adjustments to reconcile net (losses) earnings to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation, depletion and amortization
13,599

 
18,792

Gains on sale of property
(594
)
 
(1,966
)
Impairment of oil and natural gas properties
3

 
313

Provision for doubtful accounts
78

 
19

Deferred income taxes
(3,840
)
 
(857
)
Net change in fair value contracts
27

 
(243
)
Losses from equity investment
—

 
468

Impairment of investments in unconsolidated affiliates
2,500

 
1,732

Loss on deconsolidation of subsidiary
3,505

 
—

Changes in assets and liabilities:
 
 
 
Accounts receivable
(34,935
)
 
(15,368
)
Accounts receivable/payable, affiliates
271

 
—

Inventories
878

 
(5,399
)
Income tax receivable
1,418

 
(148
)
Prepayments and other current assets
831

 
492

Accounts payable
44,790

 
6,984

Accrued liabilities
(991
)
 
52

Other
(962
)
 
(440
)
Net cash provided by operating activities
26,096

 
6,944

 
 
 
 
Investing activities:
 
 
 
Property and equipment additions
(2,644
)
 
(8,484
)
Proceeds from property sales
720

 
3,706

Proceeds from sales of AREC assets
2,775

 
—

Investments in unconsolidated affiliates
—

 
(4,700
)
Insurance and state collateral (deposits) refunds
(1,067
)
 
1,710

Net cash used in investing activities
(216
)
 
(7,768
)
 
 
 
 
Financing activities:
 
 
 
Principal repayments of capital lease obligations
(118
)
 
—

Dividends paid on common stock
(3,711
)
 
(3,711
)
Net cash used in financing activities
(3,829
)
 
(3,711
)
 
 
 
 
Increase (decrease) in cash and cash equivalents
22,051

 
(4,535
)
Cash and cash equivalents at beginning of period
87,342

 
91,877

Cash and cash equivalents at end of period
$
109,393

 
$
87,342



6


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)

 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings:
 
 
 
 
 
 
Net (losses) earnings
$
3,693

 
$
(168
)
 
$
(482
)
 
$
2,513

Income tax benefit (provision)
361

 
240

 
(2,945
)
 
1,921

Depreciation, depletion and amortization
2,827

 
4,407

 
13,599

 
18,792

Gains on sale of property
(247
)
 
(18
)
 
(594
)
 
(1,966
)
Impairment of oil and natural gas properties
—

 
226

 
3

 
313

Loss on deconsolidation of subsidiary
—

 
—

 
3,505

 
—

Impairment of investments in unconsolidated affiliates
—

 
—

 
2,500

 
1,732

Inventory liquidation gains
(3,481
)
 
(2,464
)
 
(3,372
)
 
(8,243
)
Net change in fair value contracts
(21
)
 
62

 
27

 
(243
)
Voluntary early retirement program costs
—

 
—

 
1,435

 
—

Legal and other accrual reversals
—

 
—

 
(840
)
 
—

Insurance deductible related to hurricane
100

 
—

 
100

 
—

Adjusted cash flow
$
3,232

 
$
2,285

 
$
12,936

 
$
14,819




 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Adjusted net (losses) earnings and (losses) earnings
 
 
 
 
 
 
 
per common share (Non-GAAP):
 
 
 
 
 
 
 
Net (losses) earnings
$
3,693

 
$
(168
)
 
$
(482
)
 
$
2,513

Add (subtract):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
—

 
—

 
3,505

 
—

Impairment of investments in unconsolidated affiliates
—

 
—

 
2,500

 
1,732

Gains on sale of property
(247
)
 
(18
)
 
(594
)
 
(1,966
)
Impairment of oil and natural gas properties
—

 
226

 
3

 
313

Voluntary early retirement program costs
—

 
—

 
1,435

 
—

Net change in fair value contracts
(21
)
 
62

 
27

 
(243
)
Inventory liquidation gains
(3,481
)
 
(2,464
)
 
(3,372
)
 
(8,243
)
Legal and other accrual reversals
—

 
—

 
(840
)
 
—

Insurance deductible related to hurricane
100

 
—

 
100

 
—

Tax effect of adjustments to (losses) earnings
1,277

 
768

 
(967
)
 
2,942

Adjusted net (losses) earnings
$
1,321

 
$
(1,594
)
 
$
1,315

 
$
(2,952
)
 
 
 
 
 
 
 
 
Adjusted (losses) earnings per common share
$
0.31

 
$
(0.38
)
 
$
0.31

 
$
(0.70
)


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