EX-99.1 2 a1q2019erexhibit991.htm EX-99.1 EARNINGS RELEASE Document

Exhibit 99.1
FOR IMMEDIATE RELEASE
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ADAMS RESOURCES & ENERGY, INC. ANNOUNCES
RESULTS FOR FIRST QUARTER 2019

Houston, Texas (Wednesday, May 8, 2019) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announced its financial results for the three months ended March 31, 2019.

The Company reported net earnings of $4.9 million, or $1.16 per common share, on revenues of $445.2 million for the first quarter of 2019, compared to net earnings of $1.1 million, or $0.27 per common share, on revenues of $387.3 million for the first quarter of 2018. On an adjusted basis, net earnings were $1.0 million, or $0.23 per common share, for the first quarter of 2019, compared to net earnings of $0.7 million, or $0.16 per common share, for the first quarter of 2018.

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 2019 Highlights:

•Gross revenues were approximately $445.2 million for the first quarter of 2019 compared to $387.3 million for the first quarter of 2018
•Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 113,279 per day (“bpd”) of crude oil during the first quarter of 2019, compared to 65,194 bpd of crude oil during the first quarter of 2018
•Cash and cash equivalents increased by approximately 12 percent from December 31, 2018 of $117.1 million to approximately $130.9 million at March 31, 2019
•$55.4 million of undrawn capacity under our letter of credit facility at March 31, 2019 
•Adjusted cash flow of $4.9 million for the first quarter of 2019 compared to $3.3 million for the first quarter of 2018
•Approximately 452,874 barrels of crude oil inventory at March 31, 2019 compared to 415,523 barrels at December 31, 2018
•No short or long term debt as of March 31, 2019
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“During the first quarter of 2019, our Service Transport business unit continued to generate improved financial and operating results as our revenue per mile increased 13 percent from the first quarter of 2018, but decreased 3 percent from the fourth quarter of 2018,” said Townes G. Pressler, Executive Chairman. “As customer demand continues to be strong in this segment, improved trucking rates allow improved hiring and retention of skilled drivers as we continue to provide dependable superior service to our customers at Service Transport. We are continuing on schedule with improving the age of our fleet, with the purchase of 40 new tractors during the first quarter of 2019 and commitments to purchase an additional 42 tractors and 73 trailers during 2019.”

“At our GulfMark business unit, crude oil marketing volumes for the first quarter of 2019 increased 2 percent from the fourth quarter of 2018 and increased 74 percent from the first quarter of 2018, primarily as a result of the acquisition of a crude oil gathering operation during October 2018, coupled with increased production in our market areas. We have seen some increase in marketing margins as a result of improved marketing conditions.”

“During the remainder of 2019, we will remain focused on safety first and remaining in the top tier for all safety statistics. We will be introducing efficiencies in our crude oil marketing division, integrating our crude oil gathering company acquisition into our business, replacing aging tractors and right sizing our tractor and trailer fleets in both business units, and improving company-wide driver recruitment and retention, and increasing our driver count. We will continue to explore synergic growth opportunities in our core businesses, both organically and in the open market,” continued Pressler.

Capital Investments
 
During the first quarter of 2019, the Company spent approximately $8.4 million of capital and paid dividends of $0.9 million ($0.22 per common share). The majority of the capital costs relate to the purchase of tractors in our Service Transport subsidiary.


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 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
March 31,
20192018
Revenues:
Marketing$429,761 $373,638 
Transportation15,407 13,618 
Total revenues445,168 387,256 
Costs and expenses:
Marketing420,541 369,183 
Transportation13,101 12,301 
General and administrative2,684 2,283 
Depreciation and amortization3,589 2,412 
Total costs and expenses439,915 386,179 
Operating earnings5,253 1,077 
Other income (expense):
Gain on dissolution of investment498 — 
Interest income656 387 
Interest expense(65)(19)
Total other income (expense), net1,089 368 
Earnings before income taxes6,342 1,445 
Income tax provision(1,434)(307)
Net earnings$4,908 $1,138 
Earnings per share:
Basic net earnings per common share$1.16 $0.27 
Diluted net earnings per common share$1.16 $0.27 
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,
20192018
ASSETS
Current assets:
Cash and cash equivalents$130,893 $117,066 
Accounts receivable, net of allowance for doubtful accounts88,095 85,197 
Accounts receivable – related party— 425 
Inventory29,237 22,779 
Derivative assets274 162 
Income tax receivable1,978 2,404 
Prepayments and other current assets1,609 1,557 
Total current assets252,086 229,590 
Property and equipment, net48,917 44,623 
Operating lease right-of-use assets10,681 — 
Cash deposits and other assets2,951 4,657 
Total assets$314,635 $278,870 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$133,325 $116,068 
Accounts payable – related party6 29 
Derivative liabilities270 139 
Current portion of finance lease obligations1,002 883 
Current portion of operating lease liabilities2,160 — 
Other current liabilities8,580 6,148 
Total current liabilities145,343 123,267 
Other long-term liabilities:
Asset retirement obligations1,538 1,525 
Finance lease obligations3,428 3,209 
Operating lease liabilities8,523 — 
Deferred taxes and other liabilities5,104 4,271 
Total liabilities163,936 132,272 
Commitments and contingencies
Shareholders’ equity150,699 146,598 
Total liabilities and shareholders’ equity$314,635 $278,870 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months Ended
March 31,
20192018
Operating activities:
Net earnings$4,908 $1,138 
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization3,589 2,412 
Gains on sales of property(178)(26)
Provision for doubtful accounts(32)— 
Stock-based compensation expense123 — 
Deferred income taxes834 (709)
Net change in fair value contracts19 (2)
Gain on dissolution of AREC(498)— 
Changes in assets and liabilities:
Accounts receivable(2,866)4,200 
Accounts receivable/payable, affiliates(23)— 
Inventories(6,458)(7,075)
Income tax receivable426 880 
Prepayments and other current assets(52)153 
Accounts payable17,914 1,377 
Accrued liabilities2,432 851 
Other878 86 
Net cash provided by operating activities21,016 3,285 
Investing activities:
Property and equipment additions(8,351)(866)
Proceeds from property sales543 132 
Proceeds from dissolution of AREC923 — 
Insurance and state collateral refunds842 603 
Net cash used in investing activities(6,043)(131)
Financing activities:
Principal repayments of finance lease obligations(218)(83)
Dividends paid on common stock(928)(928)
Net cash used in financing activities(1,146)(1,011)
Increase in cash and cash equivalents13,827 2,143 
Cash and cash equivalents at beginning of period117,066 109,393 
Cash and cash equivalents at end of period$130,893 $111,536 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
Three Months Ended
March 31,
20192018
Reconciliation of Adjusted Cash Flow to Net Earnings:
Net earnings$4,908 $1,138 
Add (subtract):
Income tax provision1,434 307 
Depreciation and amortization3,589 2,412 
Gains on sales of property(178)(26)
Gain on dissolution of AREC(498)— 
Stock-based compensation expense123 — 
Inventory liquidation gains(4,462)(552)
Net change in fair value contracts19 (2)
Adjusted cash flow$4,935 $3,277 

Three Months Ended
March 31,
20192018
Adjusted net earnings and earnings per common share (Non-GAAP):
Net earnings$4,908 $1,138 
Add (subtract):
Gain on dissolution of AREC(498)— 
Gains on sales of property(178)(26)
Stock-based compensation expense123 — 
Net change in fair value of contracts19 (2)
Inventory liquidation gains(4,462)(552)
Tax effect of adjustments to earnings1,049 122 
Adjusted net earnings$961 $680 
Adjusted earnings per common share$0.23 $0.16 

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