EX-99.1 2 a1q2018erexhibit991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
adamslogoa02.jpg
 
FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES RESULTS FOR
FIRST QUARTER 2018 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Wednesday, May 9, 2018) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announced its financial results for the three months ended March 31, 2018.

The Company reported net earnings of $1.1 million, or $0.27 per common share, on revenues of $387.3 million for the first quarter of 2018, compared to a net loss of $0.9 million, or ($0.20) per common share, on revenues of $303.1 million for the first quarter of 2017. On an adjusted basis, net earnings were $0.7 million, or $0.16 per common share, for the first quarter of 2018, compared to a net loss of $0.7 million, or ($0.17) per common share, for the first 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.

First Quarter 2018 Highlights:

•
Gross revenues of approximately $387.3 million for the first quarter of 2018 compared to $303.1 million for the first quarter of 2017
•
Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 65,194 per day (“bpd”) of crude oil during the first quarter of 2018, compared to 66,374 bpd of crude oil during the first quarter of 2017
•
Cash and cash equivalents increased 2 percent from December 31, 2017 levels of $109.4 million to over $111.5 million at March 31, 2018
•
$59.6 million of undrawn capacity under our letter of credit facility at March 31, 2018
•
Generated adjusted cash flow of $3.3 million for the first quarter of 2018 compared to $2.8 million for the first quarter of 2017
•
Approximately 296,808 barrels of crude oil inventory at March 31, 2018 compared to 198,011 barrels at December 31, 2017
•
Dividend of $0.22 per share for the first quarter of 2018
•
No short or long term debt as of March 31, 2018

“During the first quarter of 2018, Service Transport generated improved financial and operating results as our revenue per mile increased 6 percent from the fourth quarter of 2017 and 12 percent

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from the first quarter of 2017,” said Townes G. Pressler, Executive Chairman. “As demand continues to increase in this segment, we are making strides in improving trucking rates as we continue to provide superior service to our customers at Service Transport.”

“At GulfMark, volumes have decreased slightly in the first quarter of 2018, compared to the first quarter of 2017, but the decline was mainly in areas that we elected to exit due to very thin margins, and consequently, our overall marketing margins have increased as a result.”

“During 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 first quarter of 2018, the Company recorded approximately $0.9 million of capital costs and paid dividends of $0.9 million ($0.22 per share). The majority of the capital costs relate to construction of a pipeline connection at our GulfMark Energy subsidiary.

The Company’s Board of Directors also declared a quarterly cash dividend for the first quarter of 2018 in the amount of $0.22 per common share, payable on June 15, 2018 to shareholders of record as of June 1, 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 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.


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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: Sharon C. Davis
EVP, Interim Chief Financial Officer
sharond@adamsresources.com
(713) 881-3674

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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
 
March 31,
 
2018
 
2017
Revenues:
 
 
 
Marketing
$
373,638

 
$
288,615

Transportation
13,618

 
13,455

Oil and natural gas
—

 
1,017

Total revenues
387,256

 
303,087

 
 
 
 
Costs and expenses:
 
 
 
Marketing
369,183

 
285,153

Transportation
12,301

 
12,162

Oil and natural gas
—

 
750

General and administrative
2,283

 
2,637

Depreciation, depletion and amortization
2,412

 
3,969

Total costs and expenses
386,179

 
304,671

 
 
 
 
Operating earnings (losses)
1,077

 
(1,584
)
 
 
 
 
Other income (expense):
 
 
 
Interest income
387

 
159

Interest expense
(19
)
 
(1
)
Total other income (expense), net
368

 
158

 
 
 
 
(Losses) earnings before income taxes
1,445

 
(1,426
)
Income tax benefit (provision)
(307
)
 
566

 
 
 
 
Net (losses) earnings
$
1,138

 
$
(860
)
 
 
 
 
Earnings (losses) per share:
 
 
 
Basic and diluted net (losses) earnings
 
 
 
per common share
$
0.27

 
$
(0.20
)
 
 
 
 
Weighted average number of common
 
 
 
shares outstanding
4,218

 
4,218

 
 
 
 
Dividends per common share
$
0.22

 
$
0.22

 
 
 
 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
March 31,
 
December 31,
 
2018
 
2017
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
111,536

 
$
109,393

Accounts receivable, net of allowance for doubtful accounts
117,153

 
121,353

Inventory
19,267

 
12,192

Derivative assets
312

 
166

Income tax receivable
437

 
1,317

Prepayments and other current assets
1,111

 
1,264

Total current assets
249,816

 
245,685

 
 
 
 
Property and equipment, net
27,744

 
29,362

Investments in unconsolidated affiliates
425

 
425

Cash deposits and other
6,523

 
7,232

Total assets
$
284,508

 
$
282,704

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
126,044

 
$
124,706

Accounts payable – related party
5

 
5

Derivative liabilities
289

 
145

Current portion of capital lease obligations
341

 
338

Other current liabilities
5,255

 
4,404

Total current liabilities
131,934

 
129,598

Other long-term liabilities:
 
 
 
Asset retirement obligations
1,334

 
1,273

Capital lease obligations
1,265

 
1,351

Deferred taxes and other liabilities
2,646

 
3,363

Total liabilities
137,179

 
135,585

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity
147,329

 
147,119

Total liabilities and shareholders’ equity
$
284,508

 
$
282,704



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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Three Months Ended
 
March 31,
 
2018
 
2017
Operating activities:
 
 
 
Net (losses) earnings
$
1,138

 
$
(860
)
Adjustments to reconcile net (losses) earnings to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation, depletion and amortization
2,412

 
3,969

Gains (losses) on sales of property
(26
)
 
7

Impairment of oil and natural gas properties
—

 
3

Deferred income taxes
(709
)
 
60

Net change in fair value contracts
(2
)
 
(420
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
4,200

 
(1,968
)
Inventories
(7,075
)
 
(7,557
)
Income tax receivable
880

 
(736
)
Prepayments and other current assets
153

 
744

Accounts payable
1,377

 
17,746

Accrued liabilities
851

 
1,084

Other
86

 
78

Net cash provided by (used in) operating activities
3,285

 
12,150

 
 
 
 
Investing activities:
 
 
 
Property and equipment additions
(866
)
 
(1,006
)
Proceeds from property sales
132

 
39

Insurance and state collateral refunds
603

 
476

Net cash used in investing activities
(131
)
 
(491
)
 
 
 
 
Financing activities:
 
 
 
Principal repayments of capital lease obligations
(83
)
 
—

Dividends paid on common stock
(928
)
 
(928
)
Net cash used in financing activities
(1,011
)
 
(928
)
 
 
 
 
Increase in cash and cash equivalents
2,143

 
10,731

Cash and cash equivalents at beginning of period
109,393

 
87,342

Cash and cash equivalents at end of period
$
111,536

 
$
98,073



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

 
Three Months Ended
 
March 31,
 
2018
 
2017
Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings:
 
 
Net (losses) earnings
$
1,138

 
$
(860
)
Income tax benefit (provision)
307

 
(566
)
Depreciation, depletion and amortization
2,412

 
3,969

Gains (losses) on sales of property
(26
)
 
7

Impairment of oil and natural gas properties
—

 
3

Inventory liquidation gains
(552
)
 
—

Inventory valuation losses
—

 
658

Net change in fair value contracts
(2
)
 
(420
)
Adjusted cash flow
$
3,277

 
$
2,791




 
Three Months Ended
 
March 31,
 
2018
 
2017
Adjusted net (losses) earnings and (losses) earnings
   per common share (Non-GAAP):
 
 
 
Net (losses) earnings
$
1,138

 
$
(860
)
Add (subtract):
 
 
 
Gains (losses) on sales of property
(26
)
 
7

Impairment of oil and natural gas properties
—

 
3

Net change in fair value of contracts
(2
)
 
(420
)
Inventory liquidation gains
(552
)
 
—

Inventory valuation losses
—

 
658

Tax effect of adjustments to (losses) earnings
122

 
(87
)
Adjusted net (losses) earnings
$
680

 
$
(699
)
 
 
 
 
Adjusted (losses) earnings per common share
$
0.16

 
$
(0.17
)


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