0000002178-17-000048.txt : 20170808 0000002178-17-000048.hdr.sgml : 20170808 20170808161705 ACCESSION NUMBER: 0000002178-17-000048 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20170808 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170808 DATE AS OF CHANGE: 20170808 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: 171014967 BUSINESS ADDRESS: STREET 1: 17 S. BRIAR HOLLOW LN. CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7138813600 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 a2q2017er8-k.htm 2Q 2017 ER 8-K 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): August 8, 2017

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))


 






Item 2.02 Results of Operations and Financial Condition.

On August 8, 2017, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results and its dividend declaration for the quarter ended June 30, 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 August 8, 2017.


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:
August 8, 2017
By:
/s/ Josh C. Anders
 
 
 
Josh C. Anders
 
 
 
Chief Financial Officer
 
 
 
(Principal Financial Officer and
 
 
 
Principal Accounting Officer)


3


Exhibit Index
99.1
Press release of Adams Resources & Energy, Inc. issued August 8, 2017.


4
 EX-99.1 2 a2q2017erexhibit991.htm EXHIBIT 99.1_2Q 2017 ER Exhibit


Exhibit 99.1
adamslogo.jpg
 
FOR IMMEDIATE RELEASE

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES RESULTS FOR
SECOND QUARTER 2017 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Tuesday, August 8, 2017) -- Adams Resources & Energy, Inc. (NYSE: AE) (“Adams” or the “Company”) today announced its financial results for the three months ended June 30, 2017.

The Company reported a net loss of $0.3 million, or ($0.07) per common share, on revenues of $315.2 million for the second quarter of 2017, compared to net income of $3.4 million, or $0.81 per common share, on revenues of $293.2 million for the second quarter of 2016. On an adjusted basis, net earnings were $1.4 million, or $0.34 per common share, for the second quarter of 2017, compared to a net loss of $0.1 million, or ($0.02) per common share, for the second quarter of 2016. The second quarter of 2017 includes a loss of $1.6 million related to the deconsolidation of our oil and gas exploration segment, which voluntarily filed for Chapter 11 bankruptcy in April 2017.

Adjusted net (losses) earnings, adjusted (losses) earnings per common share and cash flow from operations before changes in working capital are non-generally accepted accounting principle (“non-GAAP”) financial measures that are defined and reconciled in the financial tables below.

Second Quarter 2017 Highlights:

•
Gross revenues of approximately $315 million for the second quarter of 2017 compared to $293 million for the second quarter of 2016
•
Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 66,817 barrels per day (“bpd”) of crude oil during the second quarter of 2017 and 66,374 bpd of crude oil during the first quarter of 2017, compared to 75,986 bpd of crude oil during the second quarter of 2016
•
$164 million of liquidity ($104 million of cash and cash equivalents and $60 million of undrawn letter of credit facility) as of June 30, 2017
•
Generated cash flow from operations before changes in working capital of $3.5 million for the second quarter of 2017 compared to $6.5 million for the second quarter of 2016
•
Dividend of $0.22 per share for the second quarter of 2017
•
No short or long term debt as of June 30, 2017


1


“Adams made significant progress toward its strategic exit of the upstream exploration and production segment, and we anticipate the sale of substantially all of the upstream assets to close during the third quarter of 2017. Our diversification of Service Transport’s offerings continued with the launch of ISO tank container storage and transportation in July 2017. GulfMark Energy continues to find ways to create value for upstream producers as evidenced by the slight increase in volumes over the first quarter of 2017. We are continuing to focus on leveraging our strong balance sheet through exploring business development opportunities and strengthening our core businesses during the second half of 2017,” said Thomas S. Smith, President and Chief Executive Officer.

Capital Investments and Dividends
 
During the second quarter of 2017, the Company invested approximately $1.1 million of capital and paid dividends of $0.9 million ($0.22 per share). The majority of the capital during the second quarter of 2017 was invested in the upstream oil and gas exploration and production subsidiary as the Company participated in several wells in the Permian Basin.

As we disclosed in our press release on April 20, 2017, our oil and gas exploration and production division filed a voluntary petition of reorganization under Chapter 11 of the Bankruptcy Code in Delaware. The Company retained Oil & Gas Asset Clearinghouse, LLC to conduct an auction, which concluded on August 1, 2017 with the anticipated sale of these assets for aggregate gross proceeds of approximately $5.0 million. The sale is expected to close during the third quarter of 2017.

The Company’s Board of Directors also declared a quarterly cash dividend for the second quarter of 2017 in the amount of $0.22 per common share, payable on September 20, 2017 to shareholders of record as of September 6, 2017.

Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes the non-GAAP financial measures of operating cash flow before changes in working capital, 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, tank truck transportation of liquid chemicals and dry bulk, and oil and gas exploration and production. For more information, visit www.adamsresources.com.


2


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. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, changes in commodity prices; changes in expected levels of natural gas and oil reserves or production; operating hazards, drilling risks, unsuccessful exploratory activities; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; international monetary conditions; unexpected cost increases; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; and general domestic and international economic and political conditions; as well as changes in tax, environmental and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Marketing
$
301,176

 
$
278,529

 
$
589,791

 
$
514,923

Transportation
13,616

 
13,860

 
27,071

 
27,207

Oil and natural gas
410

 
774

 
1,427

 
1,564

Total revenues
315,202

 
293,163

 
618,289

 
543,694

 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
Marketing
297,508

 
268,780

 
582,661

 
497,837

Transportation
11,851

 
11,309

 
24,013

 
22,498

Oil and natural gas
201

 
779

 
951

 
1,410

General and administrative
1,460

 
1,938

 
4,097

 
4,138

Depreciation, depletion and amortization
3,563

 
4,756

 
7,532

 
9,871

Total costs and expenses
314,583

 
287,562

 
619,254

 
535,754

 
 
 
 
 
 
 
 
Operating earnings (losses)
619

 
5,601

 
(965
)
 
7,940

 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
(1,635
)
 
—

 
(1,635
)
 
—

Losses from equity investments
—

 
(209
)
 
—

 
(400
)
Interest income
260

 
96

 
419

 
199

Interest expense
(1
)
 
—

 
(2
)
 
—

Total other income (expense), net
(1,376
)
 
(113
)
 
(1,218
)
 
(201
)
 
 
 
 
 
 
 
 
(Losses) earnings before income taxes
(757
)
 
5,488

 
(2,183
)
 
7,739

Income tax benefit (provision)
475

 
(2,084
)
 
1,041

 
(2,905
)
 
 
 
 
 
 
 
 
Net (losses) earnings
$
(282
)
 
$
3,404

 
$
(1,142
)
 
$
4,834

 
 
 
 
 
 
 
 
Earnings (losses) per share:
 
 
 
 
 
 
 
Basic and diluted net (losses) earnings
 
 
 
 
 
 
 
per common share
$
(0.07
)
 
$
0.81

 
$
(0.27
)
 
$
1.15

 
 
 
 
 
 
 
 
Weighted average number of common
 
 
 
 
 
 
 
shares outstanding
4,218

 
4,218

 
4,218

 
4,218

 
 
 
 
 
 
 
 
Dividends per common share
$
0.22

 
$
0.22

 
$
0.44

 
$
0.44

 
 
 
 
 
 
 
 


4


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
June 30,
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
103,687

 
$
87,342

Accounts receivable, net of allowance for doubtful accounts
72,923

 
87,162

Accounts receivable – related party
417

 
—

Inventory
15,957

 
13,070

Derivative assets
782

 
112

Income tax receivable
3,071

 
2,735

Prepayments and other current assets
1,208

 
2,097

Total current assets
198,045

 
192,518

 
 
 
 
Property and equipment, net
33,105

 
46,325

Investments in unconsolidated affiliates
7,570

 
2,500

Cash deposits and other
5,230

 
5,529

Total assets
$
243,950

 
$
246,872

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
83,228

 
$
79,897

Accounts payable – related party
—

 
53

Derivative liabilities
34

 
64

Other current liabilities
4,912

 
6,060

Total current liabilities
88,174

 
86,074

Other long-term liabilities:
 
 
 
Asset retirement obligations
1,236

 
2,329

Deferred taxes and other liabilities
6,226

 
7,157

Total liabilities
95,636

 
95,560

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity
148,314

 
151,312

Total liabilities and shareholders’ equity
$
243,950

 
$
246,872



5


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Six Months Ended
 
June 30,
 
2017
 
2016
Operating activities:
 
 
 
Net (losses) earnings
$
(1,142
)
 
$
4,834

Adjustments to reconcile net (losses) earnings to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation, depletion and amortization
7,532

 
9,871

Gains on sale of property
(129
)
 
(1,275
)
Impairment of oil and natural gas properties
3

 
87

Provision for doubtful accounts
(8
)
 
93

Deferred income taxes
(926
)
 
(1,965
)
Net change in fair value contracts
(700
)
 
(124
)
Losses from equity investment
—

 
400

Loss on deconsolidation of subsidiary
1,635

 
—

Changes in assets and liabilities:
 
 
 
Accounts receivable
13,581

 
(10,073
)
Accounts receivable/payable, affiliates
(151
)
 
—

Inventories
(2,887
)
 
(5,191
)
Income tax receivable
(336
)
 
2,587

Prepayments and other current assets
887

 
(1,683
)
Accounts payable
3,357

 
7,043

Accrued liabilities
(483
)
 
1,570

Other
(461
)
 
(22
)
Net cash provided by operating activities
19,772

 
6,152

 
 
 
 
Investing activities:
 
 
 
Property and equipment additions
(2,108
)
 
(4,812
)
Proceeds from property sales
190

 
2,860

Investments in unconsolidated affiliates
—

 
(4,700
)
Insurance and state collateral (deposits) refunds
347

 
1,250

Net cash used in investing activities
(1,571
)
 
(5,402
)
 
 
 
 
Financing activities:
 
 
 
Dividends paid on common stock
(1,856
)
 
(1,856
)
Net cash used in financing activities
(1,856
)
 
(1,856
)
 
 
 
 
Increase (decrease) in cash and cash equivalents
16,345

 
(1,106
)
Cash and cash equivalents at beginning of period
87,342

 
91,877

Cash and cash equivalents at end of period
$
103,687

 
$
90,771



6


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,
 
2017
 
2016
 
2017
 
2016
Operating cash flow before changes in working capital reconciliation (Non-GAAP):
 
 
 
 
 
 
 
Net (losses) earnings
$
(282
)
 
$
3,404

 
$
(1,142
)
 
$
4,834

Adjustments to reconcile net (losses) earnings to net cash
 
 
 
 
 
 
 
provided by operating activities:
 
 
 
 
 
 
 
Depreciation, depletion and amortization
3,563

 
4,756

 
7,532

 
9,871

Gains on sale of property
(136
)
 
(1,155
)
 
(129
)
 
(1,275
)
Impairment of oil and natural gas properties
—

 
58

 
3

 
87

Provision for doubtful accounts
(8
)
 
93

 
(8
)
 
93

Deferred income taxes
(986
)
 
(613
)
 
(926
)
 
(1,965
)
Net change in fair value contracts
(280
)
 
(282
)
 
(700
)
 
(124
)
Losses from equity investment
—

 
209

 
—

 
400

Loss on deconsolidation of subsidiary
1,635

 
—

 
1,635

 
—

Operating cash flow before changes in working capital
$
3,506

 
$
6,470

 
$
6,265

 
$
11,921




 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Adjusted net (losses) earnings and (losses) earnings per common share (Non-GAAP):
 
 
 
 
 
 
 
Net (losses) earnings
$
(282
)
 
$
3,404

 
$
(1,142
)
 
$
4,834

Add (subtract):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
1,635

 
—

 
1,635

 
—

Gains on sale of property
(136
)
 
(1,155
)
 
(129
)
 
(1,275
)
Impairment of oil and natural gas properties
—

 
58

 
3

 
87

Derivative valuation gains
(280
)
 
(282
)
 
(700
)
 
(124
)
Inventory liquidation gains
—

 
(4,008
)
 
—

 
(6,211
)
Inventory valuation losses
1,405

 
—

 
2,063

 
—

Tax effect of adjustments to (losses) earnings
(918
)
 
1,885

 
(1,005
)
 
2,633

Adjusted net (losses) earnings
$
1,424

 
$
(98
)
 
$
725

 
$
(56
)
 
 
 
 
 
 
 
 
Adjusted (losses) earnings per common share
$
0.34

 
$
(0.02
)
 
$
0.17

 
$
(0.01
)


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