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 11, 2022

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 August 11, 2022, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended June 30, 2022. 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 11, 2022.
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:	August 11, 2022	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

SECOND QUARTER 2022 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Thursday, August 11, 2022) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announces operational and financial results for the three months ended June 30, 2022 and declares a quarterly cash dividend of $0.24 per common share.

Q2 2022 Financial Highlights

•Net earnings of $2.5 million, or $0.56 per diluted common share, on revenues of $992.1 million for the second quarter of 2022, compared to net earnings of $4.7 million, or $1.10 per diluted common share, on revenues of $486.7 million for the second quarter of 2021.

•Net cash used in operating activities was $30.1 million, versus net cash generated by operating activities of $29.1 million for the second quarter of 2021. The decrease was primarily driven by an increase in the market price of crude oil and an increase in crude oil inventory and changes in working capital.

•Adjusted net earnings of $3.1 million, or $0.69 per diluted common share, compared to adjusted net earnings of $1.9 million, or $0.44 per diluted common share, for the second quarter of 2021.

•Adjusted cash flow of $9.0 million versus $7.4 million for the second quarter of 2021.

Adjusted net earnings (losses), adjusted earnings (losses) 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 Q2 2022 Highlights

•Cash and cash equivalents position was $67.7 million at June 30, 2022, versus $97.8 million at December 31, 2021, primarily due to an increase in crude oil inventory barrels, due in part to timing of customer deliveries, together with an increase in crude oil prices.

•Enhanced financial liquidity of $102.0 million at June 30, 2022, including cash and cash equivalents and $34.3 million available under the Company’s $40.0 million Credit Agreement.

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•Adam’s crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 94,876 barrels per day (“bpd”) of crude oil, compared to 89,585 bpd during the second quarter of 2021 and 90,385 bpd during the first quarter of 2022. GulfMark held 573,036 barrels of crude oil inventory at June 30, 2022, compared to 259,489 barrels at December 31, 2021.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.86 million miles versus 7.25 million miles during the second quarter of 2021 and 6.80 million miles during the first quarter of 2022.

•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. Pipeline throughput increased to 13,281 bpd from 7,876 bpd for the second quarter of 2021 and 10,486 bpd for the first quarter of 2022, and terminalling volumes grew to 13,704 bpd from 8,106 bpd in the second quarter of 2021 and 10,948 bpd for the first quarter of 2022.

Kevin J. Roycraft, Adams’ Chief Executive Officer, said, “We are delighted to report continued momentum through the second quarter, resulting in a strong first half of 2022 both operationally and financially. All three of our segments made important progress on their strategic initiatives designed to sustain profitability and grow their respective businesses for the long-term benefit of our shareholders. I want to thank all of our team members for their steadfast dedication to providing our customers with a safe, efficient and best-in-class service offering.”

Capital Investments and Dividends

During the second quarter of 2022, the Company spent capital of $1.1 million for tractors, trailers and other field equipment. In addition, Adams paid dividends of $1.1 million, or $0.24 per common share.

As part of Adams’ on-going capital allocation strategy, the Board of Directors has declared a quarterly cash dividend for the second quarter of 2022 of $0.24 per common share, payable on September 23, 2022, to shareholders of record as of September 9, 2022. Adams’ has consistently paid a dividend since 1994.

Outlook

Mr. Roycraft concluded, “We look forward to further executing our strategic plan to drive increased efficiencies across the entire organization. We continue to have a strong financial position, which includes a liquidity position of more than $102 million at the end of this year’s second quarter. As in the past, we will continue to leverage our significant operational expertise and financial flexibility to execute on opportunities designed to prudently grow our business. We remain laser focused on providing significant long-term value for our shareholders, demonstrated by the regular return on capital through our consistent payment of quarterly cash dividends.”

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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 (losses) and adjusted earnings (losses) 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. Adams’ 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 Adams does. 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.

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.

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Company Contact

Tracy E. Ohmart

EVP, Chief Financial Officer

tohmart@adamsresources.com

(713) 881-3609

Investor Relations Contact

Gary Guyton or Steven Hooser

Three Part Advisors

(214) 442-0016

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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,
	2022		2021		2022		2021
Revenues:
Marketing	$	962,516	$	463,092	$	1,710,071	$	767,115
Transportation	29,534		23,497		56,224		44,732
Pipeline and storage	—		155		—		388
Total revenues	992,050		486,744		1,766,295		812,235
Costs and expenses:
Marketing	955,511		453,081		1,691,158		748,288
Transportation	23,674		19,078		44,539		36,538
Pipeline and storage	606		488		1,160		1,032
General and administrative	4,211		2,961		8,229		6,337
Depreciation and amortization	5,088		4,801		10,101		9,854
Total costs and expenses	989,090		480,409		1,755,187		802,049
Operating earnings	2,960		6,335		11,108		10,186
Other income (expense):
Interest and other income	303		62		327		196
Interest expense	(136)		(204)		(250)		(424)
Total other (expense) income, net	167		(142)		77		(228)
Earnings before income taxes	3,127		6,193		11,185		9,958
Income tax provision	(651)		(1,484)		(2,619)		(2,441)
Net earnings	$	2,476	$	4,709	$	8,566	$	7,517
Earnings per share:
Basic net earnings per common share	$	0.57	$	1.11	$	1.96	$	1.77
Diluted net earnings per common share	$	0.56	$	1.10	$	1.95	$	1.76
Dividends per common share	$	0.24	$	0.24	$	0.48	$	0.48

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	67,728	$	97,825
Restricted cash	7,853		9,492
Accounts receivable, net of allowance for doubtful accounts	267,634		137,789
Accounts receivable – related party	2		2
Inventory	61,281		18,942
Derivative assets	1,501		347
Income tax receivable	—		6,424
Prepayments and other current assets	2,007		2,389
Total current assets	408,006		273,210
Property and equipment, net	84,528		88,036
Operating lease right-of-use assets, net	6,437		7,113
Intangible assets, net	2,938		3,317
Other assets	2,714		3,027
Total assets	$	504,623	$	374,703
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	289,381	$	168,224
Derivative liabilities	848		324
Current portion of finance lease obligations	4,308		3,663
Current portion of operating lease liabilities	2,228		2,178
Other current liabilities	14,207		11,622
Total current liabilities	310,972		186,011
Other long-term liabilities:
Asset retirement obligations	2,406		2,376
Finance lease obligations	8,609		9,672
Operating lease liabilities	4,205		4,938
Deferred taxes and other liabilities	10,979		11,320
Total liabilities	337,171		214,317
Commitments and contingencies
Shareholders’ equity	167,452		160,386
Total liabilities and shareholders’ equity	$	504,623	$	374,703

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended
	June 30,
	2022		2021
Operating activities:
Net earnings	$	8,566	$	7,517
Adjustments to reconcile net earnings to net cash
(used in) provided by operating activities:
Depreciation and amortization	10,101		9,854
Gains on sales of property	(938)		(265)
Provision for doubtful accounts	(8)		(2)
Stock-based compensation expense	458		417
Deferred income taxes	(332)		(1,636)
Net change in fair value contracts	(630)		(25)
Changes in assets and liabilities:
Accounts receivable	(129,837)		(26,109)
Accounts receivable/payable, affiliates	—		(4)
Inventories	(42,339)		(10,376)
Income tax receivable	6,424		7,442
Prepayments and other current assets	382		842
Accounts payable	121,144		63,831
Accrued liabilities	2,614		1,235
Other	217		(614)
Net cash (used in) provided by operating activities	(24,178)		52,107
Investing activities:
Property and equipment additions	(4,783)		(3,602)
Proceeds from property sales	1,374		1,316
Net cash used in provided by investing activities	(3,409)		(2,286)
Financing activities:
Borrowings under Credit Agreement	30,000		8,000
Repayments under Credit Agreement	(30,000)		—
Principal repayments of finance lease obligations	(2,306)		(2,123)
Payment for financed portion of VEX acquisition	—		(10,000)
Net proceeds from sale of equity	283		—
Dividends paid on common stock	(2,126)		(2,062)
Net cash used in financing activities	(4,149)		(6,185)
(Decrease) Increase in cash and cash equivalents, including restricted cash	(31,736)		43,636
Cash and cash equivalents, including restricted cash, at beginning of period	107,317		52,065
Cash and cash equivalents, including restricted cash, at end of period	$	75,581	$	95,701

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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,
	2022		2021		2022		2021
Reconciliation of Adjusted Cash Flow to Net Earnings:
Net earnings	$	2,476	$	4,709	$	8,566	$	7,517
Add (subtract):
Income tax provision	651		1,484		2,619		2,441
Depreciation and amortization	5,088		4,801		10,101		9,854
Gains on sales of property	(447)		(182)		(938)		(265)
Stock-based compensation expense	263		232		458		417
Inventory liquidation gains	—		(3,650)		(7,184)		(10,593)
Inventory valuation losses	1,533		—		—		—
Net change in fair value contracts	(610)		(4)		(630)		(25)
Adjusted cash flow	$	8,954	$	7,390	$	12,992	$	9,346

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Adjusted net earnings (losses) and earnings
(losses) per common share (Non-GAAP):
Net earnings	$	2,476	$	4,709	$	8,566	$	7,517
Add (subtract):
Gains on sales of property	(447)		(182)		(938)		(265)
Stock-based compensation expense	263		232		458		417
Net change in fair value contracts	(610)		(4)		(630)		(25)
Inventory liquidation gains	—		(3,650)		(7,184)		(10,593)
Inventory valuation losses	1,533		—		—		—
Tax effect of adjustments to earnings (losses)	(155)		757		1,742		2,197
Adjusted net earnings (losses)	$	3,060	$	1,862	$	2,014	$	(752)
Adjusted earnings (losses) per common share	$	0.69	$	0.44	$	0.46	$	(0.19)

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATIONS

(In thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Reconciliation of Adjusted Cash Flow to Net Cash    (Used in) Provided by Operating Activities:
Net cash (used in) provided by operating activities	$	(30,051)	$	29,106	$	(24,178)	$	52,107
Add (subtract):
Income tax provision	651		1,484		2,619		2,441
Deferred income taxes	893		807		332		1,636
Provision for doubtful accounts	3		1		8		2
Inventory liquidation gains	—		(3,650)		(7,184)		(10,593)
Inventory valuation losses	1,533		—		—		—
Changes in assets and liabilities	35,925		(20,358)		41,395		(36,247)
Adjusted cash flow	$	8,954	$	7,390	$	12,992	$	9,346

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XML

Cover Page	Aug. 11, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 11, 2022
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