EX-99.1 2 a3q2017erexhibit991.htm EXHIBIT 99.1-3Q 17 ER Exhibit


Exhibit 99.1
adamslogoa01.jpg
 
FOR IMMEDIATE RELEASE

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

Houston, Texas (Thursday, November 9, 2017) -- Adams Resources & Energy, Inc. (NYSE MKT: AE) (“Adams” or the “Company”) today announced its financial results for the three months ended September 30, 2017.

The Company reported a net loss of $3.0 million, or ($0.72) per common share, on revenues of $295.3 million for the third quarter of 2017, compared to a net loss of $2.2 million, or ($0.51) per common share, on revenues of $256.9 million for the third quarter of 2016. On an adjusted basis, net losses were $0.2 million, or ($0.04) per common share, for the third quarter of 2017, compared to a net loss of $1.3 million, or ($0.31) per common share, for the third quarter of 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.

Third Quarter 2017 Highlights:

•
Gross revenues of approximately $295.3 million for the third quarter of 2017 compared to $256.9 million for the third quarter of 2016
•
Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 64,104 barrels per day (“bpd”) of crude oil during the third quarter of 2017, compared to 61,200 bpd of crude oil during the third quarter of 2016
•
Approximately 435,000 barrels of crude oil inventory as of September 30, 2017
•
$159.4 million of liquidity ($99.4 million of cash and cash equivalents and $60 million of undrawn letter of credit facility) as of September 30, 2017
•
Generated adjusted cash flow of $2.3 million for the third quarter of 2017 compared to $2.4 million for the third quarter of 2016
•
Dividend of $0.22 per share for the third quarter of 2017
•
No short or long term debt as of September 30, 2017

“We achieved a lot during the third quarter of 2017, but our financial results were negatively impacted by disruptions caused by Hurricane Harvey and also by various one-time charges. GulfMark has seen a recovery of volumes after Harvey-related downtime and from several newly completed wells coming online recently in the Gulf Coast region. We are encouraged by the demand at Service Transport Company, and we are looking forward to onboarding this month with our new

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President of Service Transport Company to capitalize on the opportunity seen in that sector over the coming months,” said Townes Pressler, Executive Chairman.

Capital Investments and Dividends
 
During the third quarter of 2017, the Company recorded approximately $2.1 million of capital and paid dividends of $0.9 million ($0.22 per share). The majority of the recorded capital relates to a 5-year capital lease of $1.8 million for new tractors at our GulfMark Energy subsidiary.

The Company’s Board of Directors also declared a quarterly cash dividend for the third quarter of 2017 in the amount of $0.22 per common share, payable on December 19, 2017 to shareholders of record as of December 5, 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.


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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. 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

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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
 
Nine Months Ended
 
September 30,
 
September 30,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Marketing
$
282,229

 
$
243,704

 
$
872,020

 
$
758,627

Transportation
13,082

 
12,310

 
40,153

 
39,517

Oil and natural gas
—

 
863

 
1,427

 
2,427

Total revenues
295,311

 
256,877

 
913,600

 
800,571

 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
Marketing
277,906

 
240,021

 
860,567

 
737,858

Transportation
12,668

 
11,039

 
36,681

 
33,537

Oil and natural gas
—

 
1,011

 
951

 
2,421

General and administrative
2,787

 
2,114

 
6,884

 
6,252

Depreciation, depletion and amortization
3,240

 
4,514

 
10,772

 
14,385

Total costs and expenses
296,601

 
258,699

 
915,855

 
794,453

 
 
 
 
 
 
 
 
Operating earnings (losses)
(1,290
)
 
(1,822
)
 
(2,255
)
 
6,118

 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
(1,870
)
 
—

 
(3,505
)
 
—

Impairment of investments in unconsolidated affiliates
(2,500
)
 
(1,732
)
 
(2,500
)
 
(1,732
)
Losses from equity investments
—

 
(68
)
 
—

 
(468
)
Interest income
370

 
245

 
789

 
444

Interest expense
(8
)
 
—

 
(10
)
 
—

Total other income (expense), net
(4,008
)
 
(1,555
)
 
(5,226
)
 
(1,756
)
 
 
 
 
 
 
 
 
(Losses) earnings before income taxes
(5,298
)
 
(3,377
)
 
(7,481
)
 
4,362

Income tax benefit (provision)
2,265

 
1,224

 
3,306

 
(1,681
)
 
 
 
 
 
 
 
 
Net (losses) earnings
$
(3,033
)
 
$
(2,153
)
 
$
(4,175
)
 
$
2,681

 
 
 
 
 
 
 
 
Earnings (losses) per share:
 
 
 
 
 
 
 
Basic and diluted net (losses) earnings
 
 
 
 
 
 
 
per common share
$
(0.72
)
 
$
(0.51
)
 
$
(0.99
)
 
$
0.64

 
 
 
 
 
 
 
 
Weighted average number of common
 
 
 
 
 
 
 
shares outstanding
4,218

 
4,218

 
4,218

 
4,218

 
 
 
 
 
 
 
 
Dividends per common share
$
0.22

 
$
0.22

 
$
0.66

 
$
0.66

 
 
 
 
 
 
 
 


4


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
September 30,
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
99,449

 
$
87,342

Accounts receivable, net of allowance for doubtful accounts
81,277

 
87,162

Inventory
22,398

 
13,070

Derivative assets
—

 
112

Income tax receivable
4,147

 
2,735

Prepayments and other current assets
1,168

 
2,097

Total current assets
208,439

 
192,518

 
 
 
 
Property and equipment, net
31,958

 
46,325

Investments in unconsolidated affiliates
3,200

 
2,500

Cash deposits and other
4,932

 
5,529

Total assets
$
248,529

 
$
246,872

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
89,339

 
$
79,897

Accounts payable – related party
—

 
53

Derivative liabilities
—

 
64

Current portion of capital lease obligation
306

 
—

Other current liabilities
5,860

 
6,060

Total current liabilities
95,505

 
86,074

Other long-term liabilities:
 
 
 
Asset retirement obligations
1,263

 
2,329

Capital lease obligations
1,465

 
—

Deferred taxes and other liabilities
5,943

 
7,157

Total liabilities
104,176

 
95,560

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity
144,353

 
151,312

Total liabilities and shareholders’ equity
$
248,529

 
$
246,872



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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Nine Months Ended
 
September 30,
 
2017
 
2016
Operating activities:
 
 
 
Net (losses) earnings
$
(4,175
)
 
$
2,681

Adjustments to reconcile net (losses) earnings to net cash
 
 
 
provided by (used in) operating activities:
 
 
 
Depreciation, depletion and amortization
10,772

 
14,385

Gains on sale of property
(347
)
 
(1,948
)
Impairment of oil and natural gas properties
3

 
87

Provision for doubtful accounts
(9
)
 
19

Deferred income taxes
(1,198
)
 
(1,170
)
Net change in fair value contracts
48

 
(305
)
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
5,228

 
(1,767
)
Accounts receivable/payable, affiliates
266

 
—

Inventories
(9,328
)
 
(8,395
)
Income tax receivable
(1,412
)
 
113

Prepayments and other current assets
927

 
(1,570
)
Accounts payable
9,482

 
(8,795
)
Accrued liabilities
465

 
1,378

Other
(240
)
 
(252
)
Net cash provided by (used in) operating activities
16,487

 
(3,339
)
 
 
 
 
Investing activities:
 
 
 
Property and equipment additions
(2,465
)
 
(7,186
)
Proceeds from property sales
430

 
3,536

Investments in unconsolidated affiliates
—

 
(4,700
)
Insurance and state collateral (deposits) refunds
439

 
1,081

Net cash used in investing activities
(1,596
)
 
(7,269
)
 
 
 
 
Financing activities:
 
 
 
Dividends paid on common stock
(2,784
)
 
(2,784
)
Net cash used in financing activities
(2,784
)
 
(2,784
)
 
 
 
 
Increase (decrease) in cash and cash equivalents
12,107

 
(13,392
)
Cash and cash equivalents at beginning of period
87,342

 
91,877

Cash and cash equivalents at end of period
$
99,449

 
$
78,485



6


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

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2017
 
2016
 
2017
 
2016
Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings:
 
 
 
 
 
 
Net (losses) earnings
$
(3,033
)
 
$
(2,153
)
 
$
(4,175
)
 
$
2,681

Income tax benefit (provision)
(2,265
)
 
(1,224
)
 
(3,306
)
 
1,681

Depreciation, depletion and amortization
3,240

 
4,514

 
10,772

 
14,385

Gains on sale of property
(218
)
 
(673
)
 
(347
)
 
(1,948
)
Impairment of oil and natural gas properties
—

 
—

 
3

 
87

Loss on deconsolidation of subsidiary
1,870

 
—

 
3,505

 
—

Impairment of investments in unconsolidated affiliates
2,500

 
1,732

 
2,500

 
1,732

Inventory liquidation gains
(1,954
)
 
—

 
—

 
(5,779
)
Inventory valuation losses
—

 
432

 
109

 
—

Net change in fair value contracts
748

 
(181
)
 
48

 
(305
)
Voluntary early retirement program costs
1,435

 
—

 
1,435

 
—

Legal and other accrual reversals
—

 
—

 
(840
)
 
—

Adjusted cash flow
$
2,323

 
$
2,447

 
$
9,704

 
$
12,534




 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2017
 
2016
 
2017
 
2016
Adjusted net (losses) earnings and (losses) earnings per common share (Non-GAAP):
 
 
 
 
 
 
 
Net (losses) earnings
$
(3,033
)
 
$
(2,153
)
 
$
(4,175
)
 
$
2,681

Add (subtract):
 
 
 
 
 
 
 
Loss on deconsolidation of subsidiary
1,870

 
—

 
3,505

 
—

Impairment of investments in unconsolidated affiliates
2,500

 
1,732

 
2,500

 
1,732

Gains on sale of property
(218
)
 
(673
)
 
(347
)
 
(1,948
)
Impairment of oil and natural gas properties
—

 
—

 
3

 
87

Costs of voluntary early retirement program
1,435

 
—

 
1,435

 
—

Derivative valuation gains
748

 
(181
)
 
48

 
(305
)
Inventory liquidation gains
(1,954
)
 
—

 
—

 
(5,779
)
Inventory valuation losses
—

 
432

 
109

 
—

Tax effect of adjustments to (losses) earnings
(1,533
)
 
(459
)
 
(2,539
)
 
2,175

Adjusted net (losses) earnings
$
(185
)
 
$
(1,302
)
 
$
539

 
$
(1,357
)
 
 
 
 
 
 
 
 
Adjusted (losses) earnings per common share
$
(0.04
)
 
$
(0.31
)
 
$
0.13

 
$
(0.32
)


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