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 12, 2021

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 12, 2021, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended June 30, 2021. 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 12, 2021.
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 12, 2021	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 2021 AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Thursday, August 12, 2021) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) today announced operational and financial results for the three months ended June 30, 2021 and declared a quarterly cash dividend of $0.24 per common share.

•Reported 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, compared to $3.5 million, or $0.82 per diluted common share, on revenues of $152.3 million for the second quarter of 2020.

•Generated net cash provided by operating activities of $29.1 million for the second quarter of 2021, compared to net cash used in operating activities of $6.6 million for the second quarter of 2020. The increase was primarily driven by changes in working capital due to an increase in the market price of crude oil.

•Reported adjusted net earnings of $1.9 million, or $0.44 per diluted common share, for the second quarter of 2021, compared to an adjusted net loss of $0.8 million, or a loss of $0.18 per diluted common share, for the second quarter of 2020.

•Adjusted cash flow for the second quarter of 2021 was $7.4 million versus $1.9 million for the second quarter of 2020.

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 Highlights for Q2 2021

•Maintained strong financial flexibility at June 30, 2021, including $88.7 million in cash and cash equivalents. This represented a 126% increase from $39.3 million at December 31, 2020.

•Liquidity of $111.4 million at June 30, 2021, including cash and cash equivalents and $22.8 million available under the Company’s $40.0 million Credit Agreement entered into in May 2021.

•Adam’s crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed approximately 89,585 barrels per day (“bpd”) of crude oil during the second quarter of 2021, compared to 81,152 bpd during the second quarter of 2020 and 82,889 bpd during

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the first quarter of 2021. GulfMark held 413,973 barrels of crude oil inventory at June 30, 2021, compared to 421,759 barrels at December 31, 2020.

•The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled approximately 7.25 million miles during the second quarter of 2021, compared to 3.89 million miles during the second quarter of 2020 and 6.93 million miles during the first quarter of 2021. Significantly contributing to the year-over-year increase in miles traveled for the second quarter was the June 2020 purchase of assets from CTL Transportation, which added new services and product lines for the Company’s new and existing customers in new markets in Florida, Georgia, Illinois, Missouri and Ohio.

Kevin J. Roycraft, Adams’ Chief Executive Officer, commented, “We were pleased with our results for the second quarter of 2021, including generating adjusted cash flow that was almost four times higher than both the first quarter of this year and the second quarter of 2020.Contributing to our financial performance for this year’s second quarter was a continued improvement in the economic backdrop, including increased demand for crude oil and a resulting higher price environment. Our recent acquisitions in our transportation and pipeline and storage segments also benefited our results for the period. We were especially pleased with the second quarter performance of the VEX Pipeline System, which we acquired in October of last year, producing positive cash flow in its second full quarter of operation.”

Capital Investments and Dividends

During the second quarter of 2021, the Company spent capital of $3.4 million for trailers and other field equipment. In addition, Adams paid dividends of $1.0 million, or $0.24 per common share.

Adams’ Board of Directors has declared a quarterly cash dividend for the second quarter of 2021 of $0.24 per common share, payable on September 17, 2021, to shareholders of record as of September 3, 2021. Adams’ has consistently paid a dividend since 1994.

Outlook

Mr. Roycraft concluded, “Looking to the second half of 2021, we remain focused on increasing efficiencies in each of our business segments. This includes further integrating our newly acquired terminals and leveraging back haul opportunities with continued efforts to diversify our offerings. We also plan to grow in new and existing areas with our crude oil marketing segment. Finally, as we have successfully done in the past, we will continue to evaluate business development opportunities that complement our core businesses and support our mission of providing unparalleled service quality and reliability for our customers.”

“Underpinning our strategic initiatives to enhance and expand our business is ensuring we maintain a solid financial position. Our strong balance sheet and significant liquidity served us well in the economic depths associated with the pandemic, and we believe our financial flexibility will continue to differentiate Adams in the marketplace moving forward. Also key to our past and future success is the dedicated efforts of our full employee team.I look forward to working closely with them as we identify and execute on additional targeted opportunities to prudently grow the business for the long-term benefit of our shareholders.”

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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. 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. 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.

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				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenues:
Marketing	$	463,092	$	140,141	$	767,115	$	477,362
Transportation	23,497		12,145		44,732		28,401
Pipeline and storage	155		—		388		—
Total revenues	486,744		152,286		812,235		505,763
Costs and expenses:
Marketing	453,081		131,454		748,288		484,319
Transportation	19,078		10,888		36,538		24,073
Pipeline and storage	488		—		1,032		—
General and administrative	2,961		2,731		6,337		5,625
Depreciation and amortization	4,801		4,278		9,854		8,751
Total costs and expenses	480,409		149,351		802,049		522,768
Operating earnings (losses)	6,335		2,935		10,186		(17,005)
Other income (expense):
Interest and other income	62		144		196		509
Interest expense	(204)		(68)		(424)		(218)
Total other (expense) income, net	(142)		76		(228)		291
Earnings (losses) before income taxes	6,193		3,011		9,958		(16,714)
Income tax (provision) benefit	(1,484)		492		(2,441)		8,790
Net earnings (losses)	$	4,709	$	3,503	$	7,517	$	(7,924)
Earnings (losses) per share:
Basic net earnings (losses) per common share	$	1.11	$	0.83	$	1.77	$	(1.87)
Diluted net earnings (losses) per common share	$	1.10	$	0.82	$	1.76	$	(1.87)
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,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	88,668	$	39,293
Restricted cash	7,033		12,772
Accounts receivable, net of allowance for doubtful accounts	125,910		99,799
Accounts receivable – related party	4		—
Inventory	29,712		19,336
Derivative assets	1,255		61
Income tax receivable	5,846		13,288
Prepayments and other current assets	2,122		2,964
Total current assets	260,550		187,513
Property and equipment, net	90,577		94,134
Operating lease right-of-use assets, net	7,249		8,051
Intangible assets, net	3,700		4,106
Other assets	2,930		2,383
Total assets	$	365,006	$	296,187
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	151,113	$	85,991
Derivative liabilities	1,221		52
Current portion of finance lease obligations	4,333		4,112
Current portion of operating lease liabilities	2,184		2,050
Other current liabilities	13,556		22,343
Total current liabilities	172,407		114,548
Other long-term liabilities:
Long-term debt	8,000		—
Asset retirement obligations	2,342		2,308
Finance lease obligations	11,246		11,507
Operating lease liabilities	5,067		6,000
Deferred taxes and other liabilities	11,093		12,732
Total liabilities	210,155		147,095
Commitments and contingencies
Shareholders’ equity	154,851		149,092
Total liabilities and shareholders’ equity	$	365,006	$	296,187

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended
	June 30,
	2021		2020
Operating activities:
Net earnings (losses)	$	7,517	$	(7,924)
Adjustments to reconcile net earnings (losses) to net cash
provided by (used in) operating activities:
Depreciation and amortization	9,854		8,751
Gains on sales of property	(265)		(140)
Provision for doubtful accounts	(2)		(24)
Stock-based compensation expense	417		304
Deferred income taxes	(1,636)		(1,534)
Net change in fair value contracts	(25)		(12)
Changes in assets and liabilities:
Accounts receivable	(26,109)		27,103
Accounts receivable/payable, affiliates	(4)		1
Inventories	(10,376)		6,570
Income tax receivable	7,442		(4,733)
Prepayments and other current assets	842		262
Accounts payable	63,831		(63,013)
Accrued liabilities	1,235		3,875
Other	(614)		55
Net cash provided by (used in) operating activities	52,107		(30,459)
Investing activities:
Property and equipment additions	(3,602)		(2,880)
Asset acquisition	—		(9,137)
Proceeds from property sales	1,316		514
Insurance and state collateral refunds	—		1,129
Net cash used in investing activities	(2,286)		(10,374)
Financing activities:
Borrowings under Credit Agreement	8,000		—
Principal repayments of finance lease obligations	(2,123)		(1,070)
Payment for financed portion of VEX acquisition	(10,000)		—
Payment of contingent consideration liability	—		(111)
Dividends paid on common stock	(2,062)		(2,044)
Net cash used in financing activities	(6,185)		(3,225)
Increase (Decrease) in cash and cash equivalents, including restricted cash	43,636		(44,058)
Cash and cash equivalents, including restricted cash, at beginning of period	52,065		122,255
Cash and cash equivalents, including restricted cash, at end of period	$	95,701	$	78,197

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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,
	2021		2020		2021		2020
Reconciliation of Adjusted Cash Flow to
Net Earnings (Losses):
Net earnings (losses)	$	4,709	$	3,503	$	7,517	$	(7,924)
Add (subtract):
Income tax (benefit) provision	1,484		(492)		2,441		(8,790)
Depreciation and amortization	4,801		4,278		9,854		8,751
Gains on sales of property	(182)		—		(265)		(140)
Stock-based compensation expense	232		170		417		304
Early retirement and terminations costs	—		431		—		431
Inventory liquidation gains	(3,650)		(6,031)		(10,593)		—
Inventory valuation losses	—		—		—		18,184
Net change in fair value contracts	(4)		7		(25)		(12)
Adjusted cash flow	$	7,390	$	1,866	$	9,346	$	10,804

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Adjusted net (losses) earnings and (losses)
earnings per common share (Non-GAAP):
Net earnings (losses)	$	4,709	$	3,503	$	7,517	$	(7,924)
Add (subtract):
Gains on sales of property	(182)		—		(265)		(140)
Stock-based compensation expense	232		170		417		304
Early retirement and terminations costs	—		431		—		431
Net change in fair value contracts	(4)		7		(25)		(12)
Inventory liquidation gains	(3,650)		(6,031)		(10,593)		—
Inventory valuation losses	—		—		—		18,184
Tax effect of adjustments to earnings (losses)	757		1,139		2,197		(3,941)
Adjusted net earnings (losses)	$	1,862	$	(781)	$	(752)	$	6,902
Adjusted earnings (losses) per common share	$	0.44	$	(0.18)	$	(0.19)	$	1.63

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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,
	2021		2020		2021		2020
Reconciliation of Adjusted Cash Flow to Net Cash    Provided by (Used in) Operating Activities:
Net cash provided by (used in) operating activities	$	29,106	$	(6,613)	$	52,107	$	(30,459)
Add (subtract):
Income tax provision (benefit)	1,484		(492)		2,441		(8,790)
Deferred income taxes	807		(1,155)		1,636		1,534
Provision for doubtful accounts	1		—		2		24
Early retirement and terminations costs	—		431		—		431
Inventory liquidation gains	(3,650)		(6,031)		(10,593)		—
Inventory valuation losses	—		—		—		18,184
Changes in assets and liabilities	(20,358)		15,726		(36,247)		29,880
Adjusted cash flow	$	7,390	$	1,866	$	9,346	$	10,804

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XML

Cover Page	Aug. 12, 2021
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 12, 2021
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