10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___  to  ___.

Commission file number: 1-07908

ADAMS RESOURCES & ENERGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	74-1753147
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

17 South Briar Hollow Lane, Suite 100

Houston, Texas 77027

(Address of Principal Executive Offices, including Zip Code)

(713) 881-3600

(Registrant’s Telephone Number, including Area Code)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☑
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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

A total of 2,546,441 shares of Common Stock were outstanding at November 1, 2023.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page Number
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets	2
	Unaudited Condensed Consolidated Statements of Operations	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity	5
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	September 30,		December 31,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	16,313	$	20,532
Restricted cash	8,575		10,535
Accounts receivable, net of allowance for doubtful
accounts of $117 and $88, respectively	219,263		189,039
Inventory	27,650		26,919
Derivative assets	5		—
Income tax receivable	510		—
Prepayments and other current assets	2,470		3,118
Total current assets	274,786		250,143
Property and equipment, net	111,042		106,425
Operating lease right-of-use assets, net	6,212		7,720
Intangible assets, net	8,407		9,745
Goodwill	6,673		6,428
Other assets	3,475		3,698
Total assets	$	410,595	$	384,159
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	226,613	$	204,391
Accounts payable – related party	—		31
Derivative liabilities	—		330
Current portion of finance lease obligations	6,863		4,382
Current portion of operating lease liabilities	2,769		2,712
Current portion of long-term debt	2,500		—
Other current liabilities	13,856		19,214
Total current liabilities	252,601		231,060
Other long-term liabilities:
Long-term debt	20,000		24,375
Asset retirement obligations	2,499		2,459
Finance lease obligations	22,292		12,085
Operating lease liabilities	3,446		5,007
Deferred taxes and other liabilities	15,696		15,996
Total liabilities	316,534		290,982
Commitments and contingencies (Note 16)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding	—		—
Common stock – $0.10 par value, 7,500,000 shares
authorized, 2,546,441 and 2,495,484 shares outstanding, respectively	253		248
Contributed capital	21,653		19,965
Retained earnings	72,155		72,964
Total shareholders’ equity	94,061		93,177
Total liabilities and shareholders’ equity	$	410,595	$	384,159

See Notes to Unaudited Condensed Consolidated Financial Statements.

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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,
	2023		2022		2023		2022
Revenues:
Marketing	$	719,925	$	814,394	$	1,913,673	$	2,524,465
Transportation	24,206		29,830		75,103		86,054
Pipeline and storage	59		—		308		—
Logistics and repurposing	16,424		8,677		46,458		8,677
Total revenues	760,614		852,901		2,035,542		2,619,196
Costs and expenses:
Marketing	710,169		807,316		1,894,416		2,498,474
Transportation	19,642		23,732		62,315		68,271
Pipeline and storage	659		640		2,350		1,799
Logistics and repurposing	15,121		7,582		41,448		7,582
General and administrative	4,162		4,630		10,649		12,860
Depreciation and amortization	6,936		6,008		21,289		16,109
Total costs and expenses	756,689		849,908		2,032,467		2,605,095
Operating earnings	3,925		2,993		3,075		14,101
Other income (expense):
Interest and other income	119		338		893		665
Interest expense	(1,027)		(119)		(2,525)		(369)
Total other (expense) income, net	(908)		219		(1,632)		296
Earnings before income taxes	3,017		3,212		1,443		14,397
Income tax (provision) benefit	(759)		(1,022)		(357)		(3,641)
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Earnings per share:
Basic net earnings per common share	$	0.89	$	0.50	$	0.43	$	2.46
Diluted net earnings per common share	$	0.88	$	0.50	$	0.42	$	2.44
Dividends per common share	$	0.24	$	0.24	$	0.72	$	0.72

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine Months Ended
	September 30,
	2023		2022
Operating activities:
Net earnings	$	1,086	$	10,756
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization	21,289		16,109
Gains on sales of property	(1,429)		(1,709)
Provision for doubtful accounts	29		(20)
Stock-based compensation expense	1,044		712
Change in contingent consideration liability	(2,566)		—
Deferred income taxes	3		(1,761)
Net change in fair value contracts	(335)		(1,884)
Changes in assets and liabilities:
Accounts receivable	(30,253)		(56,060)
Accounts receivable/payable, affiliates	(31)		17
Inventories	(731)		(10,259)
Income tax receivable	(510)		6,424
Prepayments and other current assets	648		468
Accounts payable	22,239		46,925
Accrued liabilities	(2,709)		6,489
Other	64		(375)
Net cash provided by operating activities	7,838		15,832
Investing activities:
Property and equipment additions	(8,917)		(6,797)
Acquisition of Firebird and Phoenix, net of cash acquired	—		(33,590)
Proceeds from property sales	3,078		2,209
Insurance and state collateral refunds	—		331
Net cash used in investing activities	(5,839)		(37,847)
Financing activities:
Borrowings under Credit Agreement	76,000		45,000
Repayments under Credit Agreement	(77,875)		(30,000)
Principal repayments of finance lease obligations	(4,944)		(3,491)
Net proceeds from sale of equity	549		283
Dividends paid on common stock	(1,908)		(3,180)
Net cash (used in) provided by financing activities	(8,178)		8,612
Increase (Decrease) in cash and cash equivalents, including restricted cash	(6,179)		(13,403)
Cash and cash equivalents, including restricted cash, at beginning of period	31,067		107,317
Cash and cash equivalents, including restricted cash, at end of period	$	24,888	$	93,914

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except per share data)

							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity
Balance, January 1, 2023	$	248	$	19,965	$	72,964	$	93,177
Net loss	—		—		(1,999)		(1,999)
Stock-based compensation expense	—		283		—		283
Vesting of restricted awards	3		(3)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(222)		—		(222)
Shares sold under at-the-market
offering program	1		548		—		549
Dividends declared:
Common stock, $0.24/share	—		—		(608)		(608)
Awards under LTIP, $0.24/share	—		—		(25)		(25)
Balance, March 31, 2023	252		20,571		70,332		91,155
Net earnings	—		—		827		827
Stock-based compensation expense	—		372		—		372
Dividends declared:
Common stock, $0.24/share	—		—		(608)		(608)
Awards under LTIP, $0.24/share	—		—		(25)		(25)
Balance, June 30, 2023	252		20,943		70,526		91,721
Net earnings	—		—		2,258		2,258
Stock-based compensation expense	—		389		—		389
Vesting of restricted awards	1		321		—		322
Dividends declared:
Common stock, $0.24/share	—		—		(609)		(609)
Awards under LTIP, $0.24/share	—		—		(20)		(20)
Balance, September 30, 2023	$	253	$	21,653	$	72,155	$	94,061

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except per share data)

							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity
Balance, January 1, 2022	$	433	$	16,913	$	143,040	$	160,386
Net earnings	—		—		6,090		6,090
Stock-based compensation expense	—		195		—		195
Vesting of restricted awards	2		(2)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(86)		—		(86)
Dividends declared:
Common stock, $0.24/share	—		—		(1,048)		(1,048)
Awards under LTIP, $0.24/share	—		—		(16)		(16)
Balance, March 31, 2022	435		17,020		148,066		165,521
Net earnings	—		—		2,476		2,476
Stock-based compensation expense	—		263		—		263
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(24)		—		(24)
Shares sold under at-the-market
offering program	1		282		—		283
Dividends declared:
Common stock, $0.24/share	—		—		(1,049)		(1,049)
Awards under LTIP, $0.24/share	—		—		(18)		(18)
Balance, June 30, 2022	436		17,541		149,475		167,452
Net earnings	—		—		2,190		2,190
Stock-based compensation expense	—		254		—		254
Issuance of common shares for acquisition	2		423		—		425
Dividends declared:
Common stock, $0.24/share	—		—		(1,054)		(1,054)
Awards under LTIP, $0.24/share	—		—		(16)		(16)
Balance, September 30, 2022	$	438	$	18,218	$	150,595	$	169,251

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with eighteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 8 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results expected for the full year of 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the SEC on March 16, 2023. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Cash and cash equivalents	$	16,313	$	20,532
Restricted cash:
Collateral for outstanding letters of credit (1)	357		892
Captive insurance subsidiary (2)	8,218		9,643
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	24,888	$	31,067

_____________

(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.

(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder represents amounts paid to our captive insurance company for insurance premiums.

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2023	2,495,484
Vesting of restricted stock unit awards (see Note 13)	20,291
Vesting of performance share unit awards (see Note 13)	12,319
Shares withheld to cover taxes upon vesting of equity awards	(8,089)
Shares sold under at-the-market offering program	14,680
Balance, March 31, 2023	2,534,685
No activity	—
Balance, June 30, 2023	2,534,685
Vesting of shares issued in acquisition	10,172
Vesting of restricted stock unit awards (see Note 13)	1,584
Balance, September 30, 2023	2,546,441

Earnings Per Share

Basic earnings per share is computed by dividing our net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 13 for further discussion).

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The calculation of basic and diluted earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Earnings per share — numerator:
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Denominator:
Basic weighted average number of shares outstanding	2,541		4,387		2,531		4,373
Basic net earnings per share	$	0.89	$	0.50	$	0.43	$	2.46
Diluted earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	2,541		4,387		2,531		4,373
Restricted stock unit awards	15		20		15		21
Performance share unit awards (1)	14		13		18		12
Total diluted shares	2,570		4,420		2,564		4,406
Diluted net earnings per share	$	0.88	$	0.50	$	0.42	$	2.44

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Equity At-The-Market Offerings

During the nine months ended September 30, 2023, we received net proceeds of approximately $0.6 million (net of offering costs to B. Riley Securities, Inc. of $27 thousand) from the sale of 14,680 of our common shares at an average price per share of approximately $40.74 in at-the-market offerings under our At Market Issuance Sales Agreement with B. Riley Securities, Inc. dated December 23, 2020.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 11 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 12 for further information).

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

In accordance with U.S. GAAP for interim reporting, we have historically estimated our full-year effective tax rate and applied this rate to ordinary income or loss for the reporting period. We have determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, this historical method would not provide reliable results for the three months ended September 30, 2023. Therefore, a discrete year-to-date method of reporting was used for the three months ended September 30, 2023. We will continue to evaluate income tax estimates under the historical method in subsequent quarters and employ a discrete effective tax rate method if warranted.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our consolidated statements of operations.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 13 for additional information regarding our 2018 LTIP.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Crude Oil Marketing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	710,010	$	802,707	$	1,878,735	$	2,491,066
Services transferred over time	427		—		763		—
Total revenues from contracts with customers	710,437		802,707		1,879,498		2,491,066
Other (1)	9,488		11,687		34,175		33,399
Total crude oil marketing revenue	$	719,925	$	814,394	$	1,913,673	$	2,524,465
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	24,206		29,830		75,103		86,054
Total revenues from contracts with customers	24,206		29,830		75,103		86,054
Other	—		—		—		—
Total transportation revenue	$	24,206	$	29,830	$	75,103	$	86,054
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	59		—		308		—
Total revenues from contracts with customers	59		—		308		—
Other	—		—		—		—
Total pipeline and storage revenue	$	59	$	—	$	308	$	—
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	8,545	$	4,178	$	25,708	$	4,178
Services transferred over time	7,879		4,499		20,750		4,499
Total revenues from contracts with customers	16,424		8,677		46,458		8,677
Other	—		—		—		—
Total logistics and repurposing revenue	$	16,424	$	8,677	$	46,458	$	8,677
Subtotal:
Total revenues from contracts with customers	$	751,126	$	841,214	$	2,001,367	$	2,585,797
Total other (1)	9,488		11,687		34,175		33,399
Total consolidated revenues	$	760,614	$	852,901	$	2,035,542	$	2,619,196

_______________

(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

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(2)All pipeline and storage revenue during the three and nine months ended September 30, 2022 and for the period from January 1, 2023 to May 31, 2023 was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and was eliminated in consolidation. During June 2023, we began earning revenue from an unaffiliated shipper.

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue gross-up	$	257,965	$	430,244	$	785,636	$	1,156,711

Note 4. Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance premiums	$	302	$	1,220
Rents, licenses and other	2,168		1,898
Total prepayments and other current assets	$	2,470	$	3,118

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Note 5. Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	September 30,		December 31,
	in Years	2023		2022
Tractors and trailers	5 – 6	$	123,694	$	128,223
Field equipment	2 – 5	24,820		24,676
Finance lease ROU assets (1)	3 – 6	40,023		25,106
Pipeline and related facilities	20 – 25	20,397		20,362
Linefill and base gas (2)	N/A	3,922		3,922
Buildings	5 – 39	16,189		16,163
Office equipment	2 – 5	2,964		2,937
Land	N/A	4,163		2,309
Construction in progress	N/A	4,985		3,629
Total		241,157		227,327
Less accumulated depreciation and amortization		(130,115)		(120,902)
Property and equipment, net		$	111,042	$	106,425

_______________

(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers, a tank storage and throughput arrangement and office equipment (see Note 15 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $12.5 million and $9.9 million at September 30, 2023 and December 31, 2022, respectively.

(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Depreciation and amortization, excluding amounts under finance leases	$	4,523	$	4,392	$	14,260	$	11,644
Amortization of property and equipment under finance leases	1,983		1,323		5,691		3,792
Amortization of intangible assets	430		293		1,338		673
Total depreciation and amortization	$	6,936	$	6,008	$	21,289	$	16,109

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Note 6. Acquisition

On August 12, 2022, we entered into a purchase agreement with each of Scott Bosard, Trey Bosard and Tyler Bosard (collectively, the “Sellers”) to acquire all of the equity interests of Firebird Bulk Carriers, Inc. (“Firebird”) and Phoenix Oil, Inc. (“Phoenix”) for approximately $39.3 million, consisting of a cash payment of $35.4 million, 45,777 of our common shares valued at $1.4 million, of which 15,259 shares were issued immediately and 30,518 shares will be issued over a three year period, and contingent consideration valued at approximately $2.6 million. We funded the cash consideration using cash on hand at the time of acquisition. Pursuant to the purchase agreement, the purchase price was subject to customary post-closing adjustment provisions, including an earn-out payable to the Sellers to the extent the earnings before interest, taxes, depreciation and amortization (EBITDA) of Phoenix exceeded a specified threshold during the twelve full calendar months after the closing date of the acquisition.

Firebird is an interstate bulk motor carrier of crude oil, condensate, fuels, oils and other petroleum products. Firebird is headquartered in Humble, Texas, with six terminal locations throughout Texas, and operates 130 tractors and 209 trailers largely in the Eagle Ford basin. Phoenix is also headquartered in Humble, Texas, and recycles and repurposes off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Firebird and Phoenix have formed our new logistics and repurposing segment. We expect that this acquisition will offer us the opportunity to expand our value chain and market impact, with numerous synergies benefiting the combined companies.

We accounted for the acquisition of Firebird and Phoenix under the acquisition method in accordance with ASC 805, Business Combinations. The allocation of purchase consideration was based upon the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition.

The purchase price allocation was subject to revision as acquisition-date fair value analyses were completed and if additional information about facts and circumstances that existed at the acquisition date became available. During the second quarter of 2023, we revised the fair value of certain tractors and trailers, resulting in a decrease in the amount allocated to property and equipment of $0.2 million and with a corresponding increase in goodwill. No other changes to the purchase price allocation occurred during the first half of 2023. The purchase price consideration, as well as the estimated fair values of the assets acquired and liabilities assumed, was finalized during the second quarter of 2023.

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The following table presents the final purchase price allocation of the indentifiable assets acquired and liabilities assumed at the acquisition date of August 12, 2022 (in thousands):

Assets acquired:
Cash and cash equivalents	$	2,203
Accounts receivable	4,653
Inventory	643
Other current assets	137
Property and equipment	24,809
Intangible assets	7,607
Goodwill	6,673
Other assets	458
Total assets acquired	$	47,183
Liabilities assumed:
Accounts payable and other accrued liabilities	$	(1,696)
Deferred tax liabilities	(6,207)
Total liabilities assumed	$	(7,903)
Net assets acquired	$	39,280

During the second quarter of 2023, based upon a review of the contingent consideration calculation terms, we determined that no payment would be made to the Sellers, and as such, we adjusted our accrual of $2.6 million that had been recorded as part of the purchase price allocation. The reversal of the accrual for the contingent consideration is included in general and administrative expense on our unaudited condensed consolidated statements of operations.

Unaudited Pro Forma Financial Information

The unaudited pro forma condensed consolidated results of operations in the table below are provided for illustrative purposes only and summarize the combined results of our operations and those of Firebird and Phoenix. For purposes of this pro forma presentation, the acquisition of Firebird and Phoenix is assumed to have occurred on January 1, 2022. The pro forma financial information for all periods presented also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets and certain other integration related impacts. This unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on January 1, 2022, nor of the results of operations that may be obtained in the future (in thousands, except per share amounts).

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022		2022
Revenues	$	860,771	$	2,663,447
Net earnings	2,295		12,867
Basic net earnings per common share	$	0.52	$	2.93
Diluted net earnings per common share	$	0.52	$	2.91

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Note 7. Other Assets

Components of other assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance collateral deposits	$	503	$	463
State collateral deposits	23		23
Materials and supplies	1,281		1,257
Debt issuance costs	1,343		1,595
Other	325		360
Total other assets	$	3,475	$	3,698

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the expected losses under the insurance programs. Insurance collateral deposits are invested at the discretion of our insurance carrier.

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Note 8. Segment Reporting

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Crude oil marketing		Trans-portation		Pipeline and storage		Logistics and repurposing (1)		Other		Total
Three Months Ended September 30, 2023
Segment revenues (2)	$	719,925	$	24,333	$	770	$	16,457	$	—	$	761,485
Less: Intersegment revenues (2)	—		(127)		(711)		(33)		—		(871)
Revenues	$	719,925	$	24,206	$	59	$	16,424	$	—	$	760,614
Segment operating earnings (losses) (3)	7,664		1,558		(866)		(269)		—		8,087
Depreciation and amortization	2,092		3,006		266		1,572		—		6,936
Property and equipment additions (4)	140		1,416		182		1,271		—		3,009
Three Months Ended September 30, 2022
Segment revenues (2)	$	814,394	$	29,896	$	852	$	8,677	$	—	$	853,819
Less: Intersegment revenues (2)	—		(66)		(852)		—		—		(918)
Revenues	$	814,394	$	29,830	$	—	$	8,677	$	—	$	852,901
Segment operating earnings (losses) (3)	5,070		3,307		(909)		155		—		7,623
Depreciation and amortization	2,008		2,791		269		940		—		6,008
Property and equipment additions (4)	343		722		817		132		—		2,014
Nine Months Ended September 30, 2023
Segment revenues (2)	$	1,913,673	$	75,439	$	2,473	$	48,984	$	—	$	2,040,569
Less: Intersegment revenues (2)	—		(336)		(2,165)		(2,526)		—		(5,027)
Revenues	$	1,913,673	$	75,103	$	308	$	46,458	$	—	$	2,035,542
Segment operating earnings (losses) (3)	12,922		3,515		(2,846)		133		—		13,724
Depreciation and amortization	6,335		9,273		804		4,877		—		21,289
Property and equipment additions (4) (5)	809		2,754		1,423		3,819		112		8,917
Nine Months Ended September 30, 2022
Segment revenues (2)	$	2,524,465	$	86,207	$	2,912	$	8,677	$	—	$	2,622,261
Less: Intersegment revenues (2)	—		(153)		(2,912)		—		—		(3,065)
Revenues	$	2,524,465	$	86,054	$	—	$	8,677	$	—	$	2,619,196
Segment operating earnings (losses) (3)	20,301		9,112		(2,607)		155		—		26,961
Depreciation and amortization	5,690		8,671		808		940		—		16,109
Property and equipment additions (4)	4,351		1,416		890		132		8		6,797

_______________

(1)On August 12, 2022, we acquired a transportation logistics and recycling and repurposing business, resulting in a new operating segment.

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(2)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.

(3)Our crude oil marketing segment’s operating earnings (losses) included inventory liquidation gains of $4.9 million and inventory valuation losses $5.1 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, our crude oil marketing segment’s operating (losses) earnings included inventory liquidation gains of $2.9 million and $2.1 million, respectively.

(4)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2023 and 2022. See Note 15 for further information.

(5)Amounts included in property and equipment additions for Other are additions for computer or other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.

Segment operating earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Segment operating earnings	$	8,087	$	7,623	$	13,724	$	26,961
General and administrative	(4,162)		(4,630)		(10,649)		(12,860)
Operating earnings	3,925		2,993		3,075		14,101
Interest and other income	119		338		893		665
Interest expense	(1,027)		(119)		(2,525)		(369)
Earnings before income taxes	$	3,017	$	3,212	$	1,443	$	14,397

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Reporting segment:
Crude oil marketing	$	251,449	$	215,813
Transportation	59,808		60,405
Pipeline and storage	25,123		25,815
Logistics and repurposing	44,264		45,307
Cash and other (1)	29,951		36,819
Total assets	$	410,595	$	384,159

_______________

(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.

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Note 9. Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities. Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
KSA and affiliate billings to us	$	—	$	1	$	—	$	7
Billings to KSA and affiliates	—		5		9		15
Rentals paid to an affiliate of KSA	—		136		232		388
Payments to an affiliate of KSA for purchase of   vehicles (1)	—		—		157		78
Rentals paid to affiliates of Scott Bosard	125		—		405		—
Crude oil purchases from affiliate (2)	9,362		1,403		13,940		1,403

_______________

(1)Amounts paid to West Point Buick GMC were for the purchase of three and two pickup trucks during the nine months ended September 30, 2023 and 2022, respectively.

(2)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which one of our Board members is the Managing Partner.

Affiliate transactions included direct cost reimbursement for shared phone and administrative services from KSA Industries, Inc. (“KSA”), an affiliated entity. We lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA. In addition, we purchase pickup trucks from West Point Buick GMC, an affiliate of KSA. KSA was our largest shareholder until October 31, 2022 when we repurchased the common stock owned by it. An affiliate of KSA served on our Board of Directors through the date of our 2023 annual meeting, when he retired. As of May 31, 2023, KSA and its affiliates are no longer related parties. The table above consequently does not reflect any payments to or from KSA after that date.

In connection with the acquisition of Firebird and Phoenix on August 12, 2022, we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the sellers, for periods ranging from two to five years.

Note 10. Other Current Liabilities

The components of other current liabilities were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrual for payroll, benefits and bonuses	$	5,489	$	6,435
Accrued automobile and workers’ compensation claims	5,989		5,579
Contingent consideration for acquisition (see Note 6)	—		2,566
Accrued medical claims	505		1,007
Accrued taxes	620		2,208
Other	1,253		1,419
Total other current liabilities	$	13,856	$	19,214

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Note 11. Long-Term Debt

On October 27, 2022, we entered into a credit agreement (the “Credit Agreement”) with Cadence Bank, as administrative agent, swingline lender and issuing lender, and the other lenders party thereto (collectively, the “Lenders”). The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time (the “Revolving Credit Facility”) and (b) a Term Loan in aggregate principal amount of $25.0 million (the “Term Loan”). The Revolving Credit Facility matures on October 27, 2027 unless earlier terminated.

Pursuant to the terms of the Credit Agreement, we are required to maintain compliance with the following financial covenants on a pro forma basis, after giving effect to any borrowings (in each case commencing with the fiscal quarter ending December 31, 2022): (i) the Consolidated Total Leverage Ratio shall not be greater than 2.50 to 1.00; (ii) the Asset Coverage Ratio shall not be less than 2.00 to 1.00; and (iii) the Consolidated Fixed Charge Coverage Ratio shall not be less than 1.25 to 1.00. Each of such ratios is calculated as outlined in the Credit Agreement and subject to certain exclusions and qualifications described therein.

On August 2, 2023, we entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement. The Amendment (i) clarifies our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of Consolidated EBITDA for purposes of the related financial covenants, (ii) provides for the exclusion of unusual and non-recurring losses and expenses from the calculation of Consolidated EBITDA, not to exceed 10.0 percent of Consolidated EBITDA for the period, and (iii) amends the definition of Consolidated Funded Indebtedness to include letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of the Consolidated Total Leverage Ratio calculation in the Credit Agreement. The Amendment applies to our fiscal period ending June 30, 2023 and thereafter.

At September 30, 2023, we had $22.5 million outstanding under the Term Loan at a weighted average interest rate of 7.66 percent, and $20.4 million letters of credit outstanding at a fee of 2.25 percent. No amounts were outstanding under the Revolving Credit Facility. The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2023 for the next five years, and in total thereafter (in thousands):

Remainder of 2023	$	625
2024	2,500
2025	2,500
2026	2,500
2027	14,375
Total debt maturities	$	22,500

At September 30, 2023, we were in compliance with all covenants under the Credit Agreement.

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Note 12. Derivative Instruments and Fair Value Measurements

Derivative Instruments

In the normal course of our operations, our crude oil marketing segment purchases and sells crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, these transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for these contracts at fair value, unless the normal purchase and sale exception is applicable. These types of underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments.

At September 30, 2023, we had in place one derivative instrument, entered into in 2022, for the purchase of 126,000 gallons of diesel fuel per month during January 2023 through December 2023.

At December 31, 2022, we had in place three derivative instruments, entered into in 2022 for a total of 300,000 barrels of crude oil to be purchased and sold in January 2023, and one derivative instrument, also entered into in 2022, for the purchase of 126,000 gallons of diesel fuel per month during January 2023 through December 2023.

The estimated fair value of forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated balance sheets were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
September 30, 2023
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	5	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	5	$	—	$	—	$	—
December 31, 2022
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		330		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	330	$	—

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We only enter into derivative instruments with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At September 30, 2023 and December 31, 2022, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

Forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues – marketing	$	—	$	(14)	$	—	$	(9)
Cost and expenses – marketing	(36)		1,878		(335)		1,253

Fair Value Measurements

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
September 30, 2023
Derivatives:
Current assets	$	—	$	5	$	—	$	—	$	5
Current liabilities	—		—		—		—		—
Net value	$	—	$	5	$	—	$	—	$	5
December 31, 2022
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		(330)		—		—		(330)
Net value	$	—	$	(330)	$	—	$	—	$	(330)

These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of these inputs requires judgments.

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When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores, to evaluate the likelihood of default by us or our counterparties. At September 30, 2023 and December 31, 2022, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.

Note 13. Stock-Based Compensation Plan

We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. In May 2022, our shareholders approved an amendment and restatement of the 2018 LTIP, in which the maximum number of shares authorized for issuance under the 2018 LTIP was increased by 150,000 shares to a total of 300,000 shares, and the term of the 2018 LTIP was extended through February 23, 2032. After giving effect to awards granted and forfeitures made under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through September 30, 2023, a total of 125,192 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Compensation expense	$	389	$	254	$	1,044	$	712

At September 30, 2023 and December 31, 2022, we had $128,300 and $140,300, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP or as inducement awards.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2023	70,244	$	31.89
Granted (2)	23,409	$	57.18
Vested	(31,659)	$	31.78
Forfeited	(1,831)	$	43.80
Restricted stock unit awards at September 30, 2023	60,163	$	41.43

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2023 was $1.3 million based on grant date market prices of our common shares ranging from $37.56 to $58.05 per share.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.9 million at September 30, 2023. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.5 years.

Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2023	30,687	$	28.59
Granted (2)	12,061	$	56.84
Vested	(12,707)	$	25.70
Forfeited	(680)	$	37.50
Performance share unit awards at September 30, 2023	29,361	$	41.24

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2023 was $0.7 million based on grant date market prices of our common shares ranging from $38.42 to $58.05 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.7 million at September 30, 2023. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.1 years.

Note 14. Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for interest	$	2,671	$	369
Cash paid for federal and state income taxes	2,472		1,827
Cash refund for net operating loss (NOL) carryback under CARES Act	—		6,907
Non-cash transactions:
Change in accounts payable related to property and equipment additions	52		—
Property and equipment acquired under finance leases	17,632		4,353
Issuance of shares for acquisition (see Note 6)	—		1,364

See Note 15 for information related to other non-cash transactions related to leases.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 15. Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Finance lease cost:
Amortization of ROU assets	$	1,983	$	1,306	$	5,691	$	3,775
Interest on lease liabilities	408		84		955		242
Operating lease cost	927		781		2,720		2,130
Short-term lease cost	3,529		3,752		10,668		11,335
Variable lease cost	6		6		18		16
Total lease expense	$	6,853	$	5,929	$	20,052	$	17,498

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	2,739	$	2,112
Operating cash flows from finance leases (1)	851		238
Financing cash flows from finance leases	4,944		3,491
ROU assets obtained in exchange for new lease liabilities:
Finance leases	17,632		4,353
Operating leases	667		2,715

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Nine Months Ended
	September 30,
	2023	2022
Weighted-average remaining lease term (years):
Finance leases	3.65	3.33
Operating leases	3.05	3.57
Weighted-average discount rate:
Finance leases	5.4%	2.9%
Operating leases	4.2%	3.9%

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Assets
Finance lease ROU assets (1)	$	27,482	$	15,264
Operating lease ROU assets	6,212		7,720
Liabilities
Current
Finance lease liabilities	6,863		4,382
Operating lease liabilities	2,769		2,712
Noncurrent
Finance lease liabilities	22,292		12,085
Operating lease liabilities	3,446		5,007

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2023 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2023	$	2,151	$	765
2024	8,071		2,874
2025	8,376		1,146
2026	5,549		952
2027	5,981		602
Thereafter	2,685		236
Total lease payments	32,813		6,575
Less: Interest	(3,658)		(360)
Present value of lease liabilities	29,155		6,215
Less: Current portion of lease obligation	(6,863)		(2,769)
Total long-term lease obligation	$	22,292	$	3,446

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides maturities of undiscounted lease liabilities at December 31, 2022 (in thousands):

	Finance		Operating
	Lease		Lease
2023	$	4,870	$	2,958
2024	3,629		2,617
2025	4,652		962
2026	2,482		879
2027	2,179		570
Thereafter	—		237
Total lease payments	17,812		8,223
Less: Interest	(1,345)		(504)
Present value of lease liabilities	16,467		7,719
Less: Current portion of lease obligation	(4,382)		(2,712)
Total long-term lease obligation	$	12,085	$	5,007

Note 16. Commitments and Contingencies

Insurance

We have accrued liabilities for estimated workers’ compensation and other casualty claims incurred based upon claim reserves plus an estimate for loss development and incurred but not reported claims. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability, with a self-insured retention of $1.0 million. Insurance is purchased over our retention to reduce our exposure to catastrophic events. Estimates are recorded for potential and incurred outstanding liabilities for workers’ compensation, auto and general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historical experience and statistical methods commonly used within the insurance industry that we believe are reliable. We have also engaged a third-party actuary to perform a review of our accrued liability for these claims as well as potential funded losses in our captive insurance company. Insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices and the selection of estimated loss among estimates derived using different methods. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

On October 1, 2020, we elected to utilize a wholly owned insurance captive to insure the self-insured retention for our workers’ compensation, general liability and automobile liability insurance programs. All accrued liabilities associated with periods from October 1, 2017 through current were transferred to the captive.

We maintain excess property and casualty programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs. Our operating subsidiaries pay premiums to both the excess and reinsurance carriers and our captive for the estimated losses based on an external actuarial analysis. These premiums held by our wholly owned captive are currently held in a restricted account, resulting in a transfer of risk from our operating subsidiaries to the captive.

We also maintain a self-insurance program for managing employee medical claims in excess of employee deductibles. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.3 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $11.3 million.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrued automobile and workers’ compensation claims	$	5,989	$	5,579
Accrued medical claims	505		1,007

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position, results of operations or cash flows.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and accompanying Notes included in this quarterly report on Form 10-Q and the Audited Consolidated Financial Statements and related Notes, together with our discussion and analysis of financial position and results of operations, included in our annual report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”), as filed on March 16, 2023 with the U.S. Securities and Exchange Commission (“SEC”).  Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and information that are based on our beliefs, as well as assumptions made by us and information currently available to us. When used in this document, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “would,” “will,” “believe,” “may,” “potential” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements. Although we believe that our expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that such expectations will prove to be correct.  Forward-looking statements are subject to a variety of risks, uncertainties and assumptions as described in more detail under Part I, Item 1A of our 2022 Form 10-K.  If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected.  You should not put undue reliance on any forward-looking statements.  The forward-looking statements in this quarterly report speak only as of the date hereof.  Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.

Overview of Business

Adams Resources & Energy, Inc., a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with eighteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-spec fuels, lubricants, crude oil and other chemicals. See Note 8 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our business segments.

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Results of Operations

Crude Oil Marketing

Our crude oil marketing segment revenues, operating earnings and selected costs were as follows for the periods indicated (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023		2022		Change (1)		2023		2022		Change (1)
Revenues	$	719,925	$	814,394	(12	%)	$	1,913,673	$	2,524,465	(24	%)
Operating earnings (2)	7,664		5,070		51	%	12,922		20,301		(36	%)
Depreciation and amortization	2,092		2,008		4	%	6,335		5,690		11	%
Driver compensation	5,068		4,962		2	%	15,168		14,204		7	%
Insurance	1,830		1,679		9	%	5,432		5,087		7	%
Fuel	2,641		3,425		(23	%)	8,072		9,429		(14	%)

_______________

(1)Represents the percentage increase (decrease) from the prior year period.

(2)Operating earnings included inventory liquidation gains of $4.9 million and inventory valuation losses of $5.1 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, operating earnings included inventory liquidation gains of $2.9 million and $2.1 million, respectively, as discussed further below.

Volume and price information were as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Field level purchase volumes – per day (1)
Crude oil – barrels	92,556		91,878		92,907		93,334
Average purchase price
Crude oil – per barrel	$	79.26	$	89.55	$	74.29	$	96.84

_______________

(1)Reflects the volume purchased from third parties at the field level of operations.

Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022. Crude oil marketing revenues decreased by $94.5 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022, primarily as a result of a decrease in the market price of crude oil, which decreased revenues by approximately $99.8 million, partially offset by higher overall crude oil volumes, which increased revenues by approximately $5.3 million. The average crude oil price received was $89.55 per barrel during the three months ended September 30, 2022, which decreased to $79.26 per barrel during the three months ended September 30, 2023. Revenues from our volumes are mostly based upon the market price in our market areas, primarily in the Gulf Coast. The market price of crude oil was elevated in the 2022 period primarily as a result of a return of global crude oil demand following the pandemic. In addition, the invasion of Ukraine by Russia contributed to an increase in the market price of crude oil in the first half of 2022. In the second half of 2022 and continuing into 2023, weakness in the Chinese economy and concern over economic recession caused crude oil prices to fall. During the third quarter of 2023, OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast resulted in an increase in crude oil prices.

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Driver compensation increased by $0.1 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to an increase in driver pay in the 2023 period as compared to the same period in 2022 and slightly higher volumes transported in the 2023 period, partially offset by a decrease in the overall driver count.

Insurance costs increased by $0.2 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to an increase in insurance premiums, partially offset by a decrease in the overall driver count in the 2023 period and by our safety performance during the current period. Fuel costs decreased by $0.8 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower fuel prices and a lower overall driver count.

Depreciation and amortization increased by $0.1 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2022 and 2023.

Our crude oil marketing operating earnings increased by $2.6 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of inventory valuation changes (as shown in the table below) and lower fuel costs, partially offset by a decrease in the average market price of crude oil and certain higher operating expenses in the 2023 period.

Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022. Crude oil marketing revenues decreased by $610.8 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, primarily as a result of a decrease in the market price of crude oil, which decreased revenues by approximately $602.0 million and lower overall crude oil volumes, which decreased revenues by approximately $8.8 million. The average crude oil price received was $96.84 per barrel during the nine months ended September 30, 2022, which decreased to $74.29 per barrel during the nine months ended September 30, 2023. The decrease in the market price of crude oil was primarily due to weakness in the Chinese economy and concern over economic recession caused crude oil prices to fall. During the third quarter of 2023, OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast resulted in an increase in crude oil prices.

Driver compensation increased by $1.0 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to an increase in driver pay in the 2023 period as compared to the same period in 2022, partially offset by a decrease in the overall driver count.

Insurance costs increased by $0.3 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to an increase in insurance premiums, partially offset by a decrease in the overall driver count in the 2023 period and by our safety performance during the current period. Fuel costs decreased by $1.4 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower fuel prices and a lower overall driver count in the current period.

Depreciation and amortization expense increased by $0.6 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2022 and 2023.

Our crude oil marketing operating earnings decreased by $7.4 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of inventory valuation changes (as shown in the table below), lower revenues due to lower crude oil prices and certain higher operating expenses in the 2023 period, partially offset by lower fuel costs.

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Field Level Operating Earnings (Non-GAAP Financial Measure). Inventory valuations and forward month derivative instrument valuations (mark-to-market) are two significant factors affecting comparative crude oil marketing segment operating earnings or losses. As a purchaser and shipper of crude oil, we hold inventory in storage tanks and third-party pipelines. Generally, during periods of increasing crude oil prices, we recognize inventory liquidation gains while during periods of falling prices, we recognize inventory liquidation and valuation losses.

Crude oil marketing operating earnings can be affected by the valuations of our forward month derivative instruments. These non-cash valuations are calculated and recorded at each period end based on the underlying data existing as of such date. We generally enter into these derivative contracts to as part of a strategy to protect crude oil inventory value from market price fluctuations. The valuation of derivative instruments at period end requires the recognition of non-cash “mark-to-market” gains and losses.

The impact of inventory liquidations and valuations and derivative valuations on our crude oil marketing segment operating earnings is summarized in the following reconciliation of our non-GAAP financial measure and provides management a measure of the business unit’s performance by removing the impact of inventory valuation and liquidation adjustments for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
As reported segment operating earnings	$	7,664	$	5,070	$	12,922	$	20,301
Add (subtract):
Inventory liquidation gains	(4,890)		—		(2,922)		(2,062)
Inventory valuation losses	—		5,122		—		—
Derivative valuation gains	(36)		(627)		(335)		(1,257)
Field level operating earnings (1)	$	2,738	$	9,565	$	9,665	$	16,982

_______________

(1)The use of field level operating earnings is unique to us, not a substitute for a GAAP measure and may not be comparable to any similar measures developed by industry participants. We utilize this data to evaluate the profitability of our operations.

Field level operating earnings and field level purchase volumes depict our day-to-day operation of acquiring crude oil at the wellhead, transporting the product and delivering the product to market sales point. Field level operating earnings decreased during the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to lower revenues resulting from lower crude oil prices in the 2023 period, and certain higher operating expenses in the 2023 period. During the nine months ended September 30, 2023, field level operating earnings decreased as compared to the same period in 2022 primarily due to lower revenues resulting from lower crude oil volumes and prices in the 2023 period, and certain higher operating expenses in the 2023 period.

We held crude oil inventory at a weighted average composite price as follows at the dates indicated (in barrels):

	September 30, 2023			December 31, 2022
		Average			Average
	Barrels	Price		Barrels	Price
Crude oil inventory	307,175	$	88.65	328,562	$	78.39

Prices received for crude oil have been volatile and unpredictable with price volatility expected to continue. See “Part I, Item 1A. Risk Factors” in our 2022 Form 10-K.

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Transportation

Our transportation segment revenues, operating earnings, selected costs and operating data were as follows for the periods indicated (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023		2022		Change (1)		2023		2022		Change (1)
Revenues	$	24,206	$	29,830	(19	%)	$	75,103	$	86,054	(13	%)
Operating earnings	$	1,558	$	3,307	(53	%)	$	3,515	$	9,112	(61	%)
Depreciation and amortization	$	3,006	$	2,791	8	%	$	9,273	$	8,671	7	%
Driver commissions and wages	$	3,460	$	4,020	(14	%)	$	10,756	$	11,509	(7	%)
Insurance	$	1,994	$	2,186	(9	%)	$	6,420	$	6,499	(1	%)
Fuel	$	2,609	$	3,136	(17	%)	$	7,461	$	9,647	(23	%)
Maintenance expense	$	1,104	$	1,539	(28	%)	$	3,749	$	4,057	(8	%)
Mileage (000s)	6,514		6,775		(4	%)	19,362		20,437		(5	%)

_______________

(1)Represents the percentage increase (decrease) from the prior year period.

Our revenue rate structure includes a component for fuel costs in which fuel cost fluctuations are largely passed through to the customer. Revenues, net of fuel costs, were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Total transportation revenue	$	24,206	$	29,830	$	75,103	$	86,054
Diesel fuel cost	(2,609)		(3,136)		(7,461)		(9,647)
Revenues, net of fuel costs (1)	$	21,597	$	26,694	$	67,642	$	76,407

_______________

(1) Revenues, net of fuel costs, is a non-GAAP financial measure and is utilized for internal analysis of the results of our transportation segment.

Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022. Transportation revenues decreased by $5.6 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. Transportation revenues, net of fuel costs, decreased by $5.1 million during the three months ended September 30, 2023, as compared to the prior year period. These decreases in transportation revenues were primarily due to a decrease in volumes and decreased transportation rates during the 2023 period as a result of a softening in the transportation market due to changes in demand, supply chain issues and inflation.

Driver commissions decreased by $0.6 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022, primarily due to a decrease in the overall driver count and lower mileage during the 2023 period, partially offset by an increase in driver pay in July 2022.

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Fuel costs decreased by $0.5 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of a decrease in the price of fuel and lower miles traveled during the 2023 period. Insurance costs decreased by $0.2 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower insurance premiums during the 2023 period and a decrease in the overall driver count. Maintenance expense decreased by $0.4 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower repairs and maintenance on tractors and trailers in our fleet, partially offset by escalating prices in parts, repairs and maintenance between periods.

Depreciation and amortization expense increased by $0.2 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of the timing of purchases of new tractors and trailers in 2022 and 2023.

Our transportation operating earnings decreased by $1.7 million for the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower revenues as a result of lower volumes, decreased transportation rates and higher depreciation and amortization expense, partially offset by lower operating costs.

Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022. Transportation revenues decreased by $11.0 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. Transportation revenues, net of fuel costs, decreased by $8.8 million during the nine months ended September 30, 2023, as compared to the prior year period. These decreases in transportation revenues were primarily due to a decrease in volumes and decreased transportation rates during the 2023 period as a result of a softening in the transportation market due to changes in demand, supply chain issues and inflation.

Driver commissions decreased by $0.8 million for the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to a decrease in the overall driver count and lower mileage during the 2023 period, partially offset by an increase in driver pay in July 2022.

Fuel costs decreased by $2.2 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of a decrease in the price of fuel and lower miles traveled during the 2023 period. Insurance costs decreased by $0.1 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to slightly lower insurance premiums during the 2023 period and a decrease in the overall driver count. Maintenance expense decreased by $0.3 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower repairs and maintenance on tractors and trailers in our fleet, partially offset by escalating prices in parts, repairs and maintenance.

Depreciation and amortization expense increased by $0.6 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily as a result of the timing of purchases of new tractors and trailers in 2022 and 2023.

Our transportation operating earnings decreased by $5.6 million for the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower revenues as a result of lower volumes and decreased transportation rates, partially offset by lower operating costs.

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Pipeline and Storage

Our pipeline and storage segment revenues, operating losses and selected costs were as follows for the periods indicated (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023		2022		Change (1)		2023		2022		Change (1)
Segment revenues (2)	$	770	$	852	(10	%)	$	2,473	$	2,912	(15%)
Less: Intersegment revenues (2)	(711)		(852)		(17	%)	(2,165)		(2,912)		(26%)
Revenues	$	59	$	—	—	%	$	308	$	—	—%
Operating losses	(866)		(909)		(5	%)	(2,846)		(2,607)		9%
Depreciation and amortization	266		269		(1	%)	804		808		—%
Insurance	168		200		(16	%)	602		600		—%

_______________

(1)Represents the percentage increase (decrease) from the prior year period.

(2)Segment revenues include intersegment revenues from our crude oil marketing segment, which are eliminated due to consolidation in our unaudited condensed consolidated statements of operations.

Volume information was as follows for the periods indicated (in barrels per day):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Pipeline throughput	8,548	9,963	9,060	11,242
Terminalling	9,350	9,716	10,173	11,451

Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022. Pipeline and storage revenues increased by $0.1 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. During the three months ended September 30, 2022, all pipeline and storage segment revenues were earned from GulfMark, an affiliated shipper, while during the three months ended September 30, 2023, approximately $0.1 million of revenues were earned from third party customers. All pipeline and storage revenues earned from GulfMark are eliminated in consolidation, with the offset to marketing costs and expenses in our unaudited condensed consolidated statements of operations. Pipeline and storage revenues from GulfMark decreased by $0.1 million for the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower volumes transported by GulfMark during the period.

We are currently constructing a new pipeline connection between the VEX Pipeline System and the Max Midstream pipeline system, and we expect to place the assets into commercial service during the fourth quarter of 2023 or the first quarter of 2024. In addition, we are exploring new connections with other pipeline systems, for new crude oil supply opportunities both upstream and downstream of the pipeline, to enhance the crude oil supply and take-away capability of the system.

Our pipeline and storage operating losses during the three months ended September 30, 2023 were consistent with the three months ended September 30, 2022, primarily due to an increase in third party revenues in the 2023 period, offset by increases in operating salaries and wages and related personnel costs, materials and supplies and outside service costs in the 2023 period.

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Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022. Pipeline and storage revenues increased by $0.3 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. During the nine months ended September 30, 2022, all pipeline and storage segment revenues were earned from GulfMark, an affiliated shipper, while during the nine months ended September 30, 2023, approximately $0.3 million of revenues were earned from third party customers. Pipeline and storage revenues from GulfMark decreased by $0.7 million for the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to lower volumes transported by GulfMark during the current period.

Our pipeline and storage operating losses increased by $0.2 million during the nine months ended September 30, 2023 as compared to the 2022 period, primarily due to increases in operating salaries and wages and related personnel costs, materials and supplies and outside service costs in the 2023 period, partially offset by an increase in third party revenues.

Logistics and Repurposing

Our logistics and repurposing segment revenues, operating (losses) earnings and selected costs were as follows for the period indicated (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2023		2022(1)		Change (2)	2023		2022(1)		Change (2)
Revenues	$	16,424	$	8,677	89%	$	46,458	$	8,677	435%
Operating (losses) earnings	(269)		155		(274%)	133		155		(14%)
Depreciation and amortization	1,572		940		67%	4,877		940		419%
Driver commissions	2,245		1,554		44%	6,388		1,554		311%
Insurance	538		128		320%	1,742		128		1261%
Fuel	900		676		33%	2,730		676		304%
Maintenance expense	640		260		146%	1,693		260		551%

_______________

(1)Represents the period from acquisition, August 12, 2022 through September 30, 2022.

(2)Represents the percentage increase (decrease) from the prior year period.

On August 12, 2022, we acquired all of the equity interests of Firebird and Phoenix. Firebird is an interstate bulk motor carrier of crude oil, condensate, fuels, oils and ͏other petroleum products. Firebird currently has eight terminal locations throughout Texas and owns 123 tractors and 216 trailers largely in the Eagle Ford basin. Phoenix ͏recycles and repurposes off-specification fuels, lubricants, crude oil and other chemicals from ͏producers in the U.S. See Note 6 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the acquisition.

On May 4, 2023, we acquired approximately 10.6 acres of land in the Gulf Inland Industrial Park, located in Dayton, Texas, for approximately $1.8 million to build a new processing facility for Phoenix with rail spur and siding, product storage, and truck rack. Phoenix will build new infrastructure to service its existing customers and to create opportunities for growing the business. Phoenix will also relocate its headquarters from Humble, Texas to this new location.

Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022. Revenues earned from Firebird operations were approximately $7.9 million during the three months ended September 30, 2023, while revenues earned from Phoenix operations were approximately $8.5 million during the same period.

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Operating expenses during the three months ended September 30, 2023 include driver commissions of $2.2 million, fuel costs of $0.9 million, maintenance expenses of $0.6 million and insurance costs of $0.5 million. Depreciation expense was $1.3 million and amortization expense related to intangible assets was $0.3 million during the current period. Operating losses during the three months ended September 30, 2023 were $0.3 million.

Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022. Revenues earned from Firebird operations were approximately $20.8 million during the nine months ended September 30, 2023, while revenues earned from Phoenix operations were approximately $25.7 million during the same period.

Operating expenses during the nine months ended September 30, 2023 include driver commissions of $6.4 million, fuel costs of $2.7 million, maintenance expenses of $1.7 million and insurance costs of $1.7 million. Depreciation expense was $4.1 million and amortization expense related to intangible assets was $0.8 million during the current period. Operating earnings during the nine months ended September 30, 2023 were $0.1 million.

General and Administrative Expense

General and administrative expense decreased by $0.5 million during the three months ended September 30, 2023 as compared to the same period in 2022. The 2022 period includes approximately $0.3 million of acquisition related costs for the purchase of Firebird and Phoenix on August 12, 2022 and approximately $0.2 million of costs related to the repurchase of our common shares from an affiliate, which occurred on October 31, 2022. The 2023 period includes higher outside service costs, audit fees and banking fees primarily related to outstanding letters of credit, partially offset by lower salaries and wages and related personnel costs and legal fees.

General and administrative expense decreased by $2.2 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to an adjustment in the 2023 period of the $2.6 million contingent consideration accrual related to the Firebird and Phoenix acquisition in 2022 (see Note 6 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information) and lower salaries and wages and related personnel costs and legal fees, partially offset by higher insurance costs, outside service costs, audit fees and banking fees primarily related to outstanding letters of credit. In addition, the 2022 period includes approximately $0.3 million of acquisition related costs for the purchase of Firebird and Phoenix on August 12, 2022 and approximately $0.2 million of costs related to the repurchase of our common shares from an affiliate, which occurred on October 31, 2022.

Interest Expense

Interest expense increased by $0.9 million during the three months ended September 30, 2023 as compared to the same period in 2022, primarily due to higher interest expense as a result of higher borrowings under the revolving portion of the credit agreement with Cadence Bank (“Credit Agreement”), and the outstanding Term Loan of $22.5 million under our Credit Agreement (see Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information).

Interest expense increased by $2.2 million during the nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to higher interest expense as a result of higher borrowings under the revolving portion of the Credit Agreement, and the outstanding Term Loan of $22.5 million under our Credit Agreement (see Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information).

Income Taxes

Provision for (benefit from) income taxes is based upon federal and state tax rates, and variations in amounts are consistent with taxable income (loss) in the respective accounting periods.

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In accordance with U.S. GAAP for interim reporting, we have historically estimated our full-year effective tax rate and applied this rate to ordinary income or loss for the reporting period. We have determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, this historical method would not provide reliable results for the three months ended September 30, 2023. Therefore, a discrete year-to-date method of reporting was used for the three months ended September 30, 2023. We will continue to evaluate income tax estimates under the historical method in subsequent quarters and employ a discrete effective tax rate method if warranted.

Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity are (i) our cash balance, (ii) cash flow from operating activities, (iii) borrowings under our Credit Agreement and (iv) funds received from the sale of equity securities. Our primary cash requirements include, but are not limited to, (a) ordinary course of business uses, such as the payment of amounts related to the purchase of crude oil, and other expenses, (b) discretionary capital spending for investments in our business and (c) dividends to our shareholders. We believe we will have sufficient liquidity through our current cash balances, availability under our Credit Agreement, expected cash generated from future operations, and the ease of financing tractor and trailer additions through leasing arrangements (should the need arise) to meet our short-term and long-term liquidity needs for the reasonably foreseeable future. Our cash balance and cash flow from operating activities is dependent on the success of future operations. If our cash inflow subsides or turns negative, we will evaluate our investment plan accordingly and remain flexible.

We maintain cash balances in order to meet the timing of day-to-day cash needs. Cash and cash equivalents (excluding restricted cash) and working capital, the excess of current assets over current liabilities, were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Cash and cash equivalents	$	16,313	$	20,532
Working capital	22,185		19,083

Our cash balance at September 30, 2023 decreased by 21 percent from December 31, 2022, as discussed further below.

We have in place a Credit Agreement with Cadence Bank. The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time, and (b) a term loan in aggregate principal amount of $25.0 million (the “Term Loan”). We may also obtain letters of credit under the revolving credit facility up to a maximum amount of $30.0 million, which reduces availability under the revolving credit facility by a like amount. Borrowings under the revolving credit facility may be, at our option, base rate loans (defined by reference to the higher of the prime rate, the federal funds rate or an adjusted term secured overnight financing rate (“SOFR”) for a one month tenor plus one percent) or SOFR loans, in each case plus an applicable margin, the amount of which is determined by reference to our consolidated total leverage ratio, and is between 1 percent and 2 percent for base rate loans and between 2 percent and 3 percent for SOFR loans.

The Term Loan amortizes on a 10-year schedule with quarterly payments beginning December 31, 2022, and matures October 27, 2027. Proceeds of the Term Loan were used, together with additional cash on hand, to fund the repurchase of shares from KSA Industries, Inc. (“KSA”) and certain of its affiliates. The Term Loan bears interest at the SOFR loan rate plus the applicable margin for SOFR loans.

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We are required to maintain compliance with certain financial covenants under the Credit Agreement, including a consolidated leverage ratio, an asset coverage ratio and a consolidated fixed charge coverage ratio. We were in compliance with these covenants as of September 30, 2023.

On August 2, 2023, we entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement. The Amendment (i) clarifies our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of consolidated EBITDA for purposes of the consolidated leverage ratio and the consolidated fixed charge coverage ratio, (ii) provides for the exclusion of unusual and non-recurring losses and expenses from the calculation of consolidated EBITDA, not to exceed ten percent of consolidated EBITDA for the period, and (iii) includes letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of calculating our consolidated funded indebtedness under the consolidated leverage ratio calculation. The Amendment applies to our fiscal period ending June 30, 2023 and thereafter.

At September 30, 2023, we had $22.5 million of borrowings outstanding under the Credit Agreement, representing the remaining principal balance of the Term Loan, at a weighted average interest rate of 7.66 percent. We also had $20.4 million of letters of credit issued under the Credit Agreement at a fee of 2.25 percent per annum. No amounts were outstanding under the revolving credit facility. See Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information about our Credit Agreement.

We have in place an At Market Issuance Sales Agreement (“ATM Agreement”) with B. Riley Securities, Inc., as agent (the “Agent”), in which we may offer to sell shares of our common stock through or to the Agent for cash from time to time. We filed a registration statement initially registering an aggregate of $20.0 million of shares of common stock for sale under the ATM Agreement. The total number of shares of common stock to be sold, if any, and the price at which the shares will be sold will be determined by us periodically in connection with any such sales, though the total amount sold may not exceed the limitations stated in the registration statement. During the nine months ended September 30, 2023, we received net proceeds of approximately $0.6 million (net of offering costs to the Agent of $27 thousand) from the sale of 14,680 of our common shares at an average price per share of approximately $40.74 under the ATM Agreement.

We utilize cash from operations to make discretionary investments in our crude oil marketing, transportation, pipeline and storage and logistics and repurposing businesses. With the exception of operating and finance lease commitments primarily associated with storage tank terminal arrangements, leased office space, tractors, trailers and other equipment, and borrowings outstanding under our bank credit facility, our future commitments and planned investments can be readily curtailed if operating cash flows decrease. See “Material Cash Requirements” below for information regarding our operating and finance lease obligations.

The most significant item affecting future increases or decreases in liquidity is earnings from operations, and these earnings are dependent on the success of future operations. See “Part I, Item 1A. Risk Factors” in our 2022 Form 10-K.

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Cash Flows from Operating, Investing and Financing Activities

Our consolidated cash flows from operating, investing and financing activities were as follows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash provided by (used in):
Operating activities	$	7,838	$	15,832
Investing activities	(5,839)		(37,847)
Financing activities	(8,178)		8,612

Operating activities. Net cash flows provided by operating activities for the nine months ended September 30, 2023 decreased by $8.0 million as compared to the same period in 2022. The decrease in net cash flows provided by operating activities was primarily due to changes in our working capital accounts. Early payments made to suppliers decreased by approximately $7.7 million in the 2023 period, while early payments received from customers decreased by approximately $29.6 million in the 2023 period. Crude oil inventory increased by $0.7 million at September 30, 2023, primarily due to a increase in the price of our crude oil inventory, which increased from $78.39 per barrel at December 31, 2022 to $88.65 per barrel at September 30, 2023, partially offset by a decrease of 6.5 percent in the number of barrels held in inventory.

At various times each month, we may make cash prepayments and/or early payments in advance of the normal due date to certain suppliers of crude oil within our crude oil marketing operations. Crude oil supply prepayments are recouped and advanced from month to month as the suppliers deliver product to us. In addition, in order to secure crude oil supply, we may also “early pay” our suppliers in advance of the normal payment due date of the twentieth of the month following the month of production. These “early payments” reduce cash and accounts payable as of the balance sheet date.

We also require certain customers to make similar early payments or to post cash collateral with us in order to support their purchases from us. Early payments and cash collateral received from customers increase cash and reduce accounts receivable as of the balance sheet date.

Early payments received from customers and prepayments to suppliers were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Early payments received	$	15,654	$	45,265
Prepayments to suppliers	6,340		14,055

We rely heavily on our ability to obtain open-line trade credit from our suppliers especially with respect to our crude oil marketing operations. The timing of payments and receipts of these early pays received and paid can have a significant impact on our cash balance.

Investing activities. Net cash flows used in investing activities for the nine months ended September 30, 2023 decreased by $32.0 million as compared to the same period in 2022. This decrease was primarily due to the payment of $33.6 million for the acquisition of Firebird and Phoenix in August 2022 (see Note 6 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information). This decrease was also due to an increase of $0.9 million in cash proceeds from the sales of assets in the current period, partially offset by an increase of $2.1 million in capital spending for property and equipment (see following table).

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Capital spending by reporting segment was as follows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Crude oil marketing (1)	$	809	$	4,351
Transportation (2)	2,754		1,416
Pipeline and storage (3)	1,423		890
Logistics and repurposing (4)	3,819		132
Other (5)	112		8
Capital spending	$	8,917	$	6,797

_______________

(1)2023 amount relates to the purchase of various field equipment, and the 2022 amount relates to the purchase of 20 tractors, ten trailers and other field equipment.

(2)2023 amount relates to the purchase of five tractors, eight trailers and various field equipment, and the 2022 amount relates to the purchase of three tractors, two trailers and other field equipment.

(3)2023 amount relates to spending for the continued construction of a planned pipeline connection, which is expected to be placed in commercial service during the fourth quarter of 2023 or first quarter of 2024, and the 2022 amount relates to the purchase of land and easements in connection with the planned pipeline connection.

(4)2023 amount relates to the purchase of approximately 10.6 acres of land in the Gulf Inland Industrial Park, located in Dayton, Texas, for approximately $1.8 million to build a new processing facility for Phoenix, 13 tractors, three trailers and various field equipment, and the 2022 amount relates to the purchase of field equipment.

(5)2023 amount relates to the purchase of a company vehicle and office and computer equipment.

Financing activities. Net cash used in financing activities was $8.2 million for the nine months ended September 30, 2023 as compared to net cash provided by financing activities of $8.6 million for the nine months ended September 30, 2022. The change in net cash flows from financing activities of $16.8 million was primarily due to the following cash outflows and inflows:

•an increase in the 2023 period in net repayments under our Credit Agreement. During the nine months ended September 30, 2023, we made principal payments of $1.9 million on the Term Loan. During the nine months ended September 30, 2023, we also borrowed and repaid $76.0 million under the revolving credit facility under our Credit Agreement, while during the nine months ended September 30, 2022, we borrowed $45.0 million and repaid $30.0 million under the revolving credit facility. Borrowings were primarily used for working capital purposes;

•an increase of $1.5 million in the 2023 period for principal repayments made for finance lease obligations (see “Material Cash Requirements” below for information regarding our finance lease obligations);

•an increase of $0.3 million in the 2023 period in net proceeds from the sale of common shares under the ATM program. During the nine months ended September 30, 2023, we received net proceeds of approximately $0.6 million from the sale of 14,680 of our common shares, while during the nine months ended September 30, 2022, we received net proceeds of approximately $0.3 million from the sale of 8,202 of our common shares; and

•a decrease of $1.3 million in the 2023 period in cash dividends paid on our common shares. During each of the nine months ended September 30, 2023 and 2022, we paid cash dividends of $0.72 per common share, or totals of $1.9 million and $3.2 million, respectively. On October 31, 2022, the number of common shares outstanding decreased by 1.9 million as a result of the repurchase of shares from KSA and certain of its affiliates.

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Material Cash Requirements

The following table summarizes our contractual obligations with material cash requirements at September 30, 2023 (in thousands):

			Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Credit Agreement (1)	$	27,978	$	4,137	$	7,699	$	16,142	$	—
Finance lease obligations (2)	32,813		8,216		14,844		9,753		—
Operating lease obligations (3)	6,575		2,960		2,573		969		73
Purchase obligations (4)	10,017		10,017		—		—		—
Total contractual obligations	$	77,383	$	25,330	$	25,116	$	26,864	$	73

_______________

(1)Represents scheduled future maturities for amounts due under the Term Loan under our Credit Agreement plus estimated cash payments for interest. Interest payments are based upon the principal amount of the amount outstanding and the applicable interest rate at September 30, 2023. See Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information about our Credit Agreement.

(2)Amounts represent our principal contractual commitments, including interest, outstanding under finance leases for certain tractors, trailers, tank storage and throughput arrangements and other equipment.

(3)Amounts represent rental obligations under non-cancelable operating leases and terminal arrangements with terms in excess of one year.

(4)Amount represents commitments to purchase 25 new tractors and 22 new trailers in our transportation business, 16 new tractors in our crude oil marketing business and 3 new tractors and two new trailers in our logistics and repurposing segment.

We maintain certain lease arrangements with independent truck owner-operators for use of their equipment and driver services on a month-to-month basis. In addition, we enter into office space and certain lease and terminal access contracts in order to provide tank storage and dock access for our crude oil marketing business. These storage and access contracts require certain minimum monthly payments for the term of the contracts.

See Note 15 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our finance and operating leases.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably expected to have a material current or future effect on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements    

For information regarding recent accounting pronouncements, see Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements.

Transactions with Affiliates

For more information regarding transactions with our affiliates during the nine months ended September 30, 2023 and 2022, see Note 9 in the Notes to Unaudited Condensed Consolidated Financial Statements.

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Critical Accounting Policies and Use of Estimates

A discussion of our critical accounting policies and estimates is included in our 2022 Form 10-K. Certain of these accounting policies require the use of estimates. There have been no material changes to our accounting policies since the disclosures provided in our 2022 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no other material changes to our “Quantitative and Qualitative Disclosures about Market Risk” that have occurred since the disclosures provided in our 2022 Form 10-K.

Item 4. Controls and Procedures

As of the end of the period covered by this quarterly report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15(e) of the Exchange Act. Based on this evaluation, as of the end of the period covered by this quarterly report, our Chief Executive Officer and our Chief Financial Officer concluded:

(i)that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow for timely decisions regarding required disclosures; and

(ii)that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e) under the Exchange Act) during the fiscal quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.

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Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2022 Form 10-K and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our Risk Factors from those disclosed in Item 1A of our 2022 Form 10-K or our other SEC filings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit
Number	Exhibit
3.1	Certificate of Incorporation of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit 3.1 to Form 10-K for the fiscal year ended December 31, 2019).
3.2	Bylaws of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed on November 1, 2022).
10.1	Amendment No. 1 dated August 2, 2023 to Credit Agreement dated October 27, 2022 by and among Adams Resources & Energy, Inc., GulfMark Asset Holdings, LLC, Service Transport Company, and Cadence Bank, as administrative agent, swingline lender and issuing lender, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 2, 2023).
31.1*	Sarbanes-Oxley Section 302 certification of Executive Chairman pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Sarbanes-Oxley Section 302 certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Sarbanes-Oxley Section 906 certification of Executive Chairman pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Sarbanes-Oxley Section 906 certification of Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.CAL*	Inline XBRL Calculation Linkbase Document
101.DEF*	Inline XBRL Definition Linkbase Document
101.INS*	Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.LAB*	Inline XBRL Labels Linkbase Document
101.PRE*	Inline XBRL Presentation Linkbase Document
101.SCH*	Inline XBRL Schema Document
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

____________

* Filed or furnished (in the case of Exhibits 32.1 and 32.2) with this report.

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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 thereunto duly authorized.

			ADAMS RESOURCES & ENERGY, INC.
			(Registrant)
Date:	November 8, 2023	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer
			(Principal Executive Officer)
		By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer
			(Principal Financial Officer and Principal
			Accounting Officer)

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EX-31.1

Exhibit 31.1

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Kevin J. Roycraft, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 8, 2023	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer

EX-31.2

Exhibit 31.2

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Tracy E. Ohmart, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 8, 2023	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer

EX-32.1

Exhibit 32.1

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF KEVIN J. ROYCRAFT,

CHIEF EXECUTIVE OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Roycraft, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	November 8, 2023	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer

EX-32.2

Exhibit 32.2

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF TRACY E. OHMART,

CHIEF FINANCIAL OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy E. Ohmart, Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	November 8, 2023	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Nov. 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	1-07908
Entity Registrant Name	ADAMS RESOURCES & ENERGY, INC.
Entity Incorporation, State or Country Code	DE
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
Title of 12(b) Security	Common Stock, $0.10 Par Value
Trading Symbol	AE
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,546,441
Entity Central Index Key	0000002178
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 16,313	$ 20,532
Restricted cash	8,575	10,535
Accounts receivable, net of allowance for doubtful accounts of $117 and $88, respectively	219,263	189,039
Inventory	27,650	26,919
Derivative assets	5	0
Income tax receivable	510	0
Prepayments and other current assets	2,470	3,118
Total current assets	274,786	250,143
Property and equipment, net	111,042	106,425
Operating lease right-of-use assets, net	6,212	7,720
Intangible assets, net	8,407	9,745
Goodwill	6,673	6,428
Other assets	3,475	3,698
Total assets	410,595	384,159
Current liabilities:
Derivative liabilities	0	330
Current portion of finance lease obligations	6,863	4,382
Current portion of operating lease liabilities	2,769	2,712
Current portion of long-term debt	2,500	0
Other current liabilities	13,856	19,214
Total current liabilities	252,601	231,060
Other long-term liabilities:
Long-term debt	20,000	24,375
Asset retirement obligations	2,499	2,459
Finance lease obligations	22,292	12,085
Operating lease liabilities	3,446	5,007
Deferred taxes and other liabilities	15,696	15,996
Total liabilities	316,534	290,982
Commitments and contingencies (Note 16)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares authorized, none outstanding	0	0
Common stock – $0.10 par value, 7,500,000 shares authorized, 2,546,441 and 2,495,484 shares outstanding, respectively	253	248
Contributed capital	21,653	19,965
Retained earnings	72,155	72,964
Total shareholders’ equity	94,061	93,177
Total liabilities and shareholders’ equity	410,595	384,159
Nonrelated Party
Current liabilities:
Accounts payable	226,613	204,391
Accounts payable – related party	226,613	204,391
Related Party
Current liabilities:
Accounts payable	0	31
Accounts payable – related party	$ 0	$ 31

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Allowance for doubtful accounts	$ 117	$ 88
Shareholders’ equity:
Preferred stock - par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock - shares authorized (in shares)	960,000	960,000
Preferred stock - shares outstanding (in shares)	0	0
Common stock - par value (in dollars per share)	$ 0.10	$ 0.10
Common stock - shares authorized (in shares)	7,500,000	7,500,000
Common stock - shares outstanding (in shares)	2,546,441	2,495,484

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Billings to KSA and affiliates	$ 760,614	$ 852,901	$ 2,035,542	$ 2,619,196
Costs and expenses:
General and administrative	4,162	4,630	10,649	12,860
Depreciation and amortization	6,936	6,008	21,289	16,109
Total costs and expenses	756,689	849,908	2,032,467	2,605,095
Operating earnings	3,925	2,993	3,075	14,101
Other income (expense):
Interest and other income	119	338	893	665
Interest expense	(1,027)	(119)	(2,525)	(369)
Total other (expense) income, net	(908)	219	(1,632)	296
Earnings before income taxes	3,017	3,212	1,443	14,397
Income tax (provision) benefit	(759)	(1,022)	(357)	(3,641)
Net earnings	$ 2,258	$ 2,190	$ 1,086	$ 10,756
Earnings per share:
Basic net earnings per common share (in dollars per share)	$ 0.89	$ 0.50	$ 0.43	$ 2.46
Diluted net earnings per common share (in dollars per share)	0.88	0.50	0.42	2.44
Dividends per common share (in dollars per share)	$ 0.24	$ 0.24	$ 0.72	$ 0.72
Marketing
Revenues:
Billings to KSA and affiliates	$ 719,925	$ 814,394	$ 1,913,673	$ 2,524,465
Costs and expenses:
Cost of goods and services sold	710,169	807,316	1,894,416	2,498,474
Transportation
Revenues:
Billings to KSA and affiliates	24,206	29,830	75,103	86,054
Costs and expenses:
Cost of goods and services sold	19,642	23,732	62,315	68,271
Pipeline and storage
Revenues:
Billings to KSA and affiliates	59	0	308	0
Costs and expenses:
Cost of goods and services sold	659	640	2,350	1,799
Logistics and repurposing
Revenues:
Billings to KSA and affiliates	16,424	8,677	46,458	8,677
Costs and expenses:
Cost of goods and services sold	$ 15,121	$ 7,582	$ 41,448	$ 7,582

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net earnings	$ 1,086	$ 10,756
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	21,289	16,109
Gains on sales of property	(1,429)	(1,709)
Provision for doubtful accounts	29	(20)
Stock-based compensation expense	1,044	712
Change in contingent consideration liability	(2,566)	0
Deferred income taxes	3	(1,761)
Net change in fair value contracts	(335)	(1,884)
Changes in assets and liabilities:
Accounts receivable	(30,253)	(56,060)
Accounts receivable/payable, affiliates	(31)	17
Inventories	(731)	(10,259)
Income tax receivable	(510)	6,424
Prepayments and other current assets	648	468
Accounts payable	22,239	46,925
Accrued liabilities	(2,709)	6,489
Other	64	(375)
Net cash provided by operating activities	7,838	15,832
Investing activities:
Property and equipment additions	(8,917)	(6,797)
Acquisition of Firebird and Phoenix, net of cash acquired	0	(33,590)
Proceeds from property sales	3,078	2,209
Insurance and state collateral refunds	0	331
Net cash used in investing activities	(5,839)	(37,847)
Financing activities:
Borrowings under Credit Agreement	76,000	45,000
Repayments under Credit Agreement	(77,875)	(30,000)
Principal repayments of finance lease obligations	(4,944)	(3,491)
Net proceeds from sale of equity	549	283
Dividends paid on common stock	(1,908)	(3,180)
Net cash (used in) provided by financing activities	(8,178)	8,612
Increase (Decrease) in cash and cash equivalents, including restricted cash	(6,179)	(13,403)
Cash and cash equivalents, including restricted cash, at beginning of period	31,067	107,317
Cash and cash equivalents, including restricted cash, at end of period	$ 24,888	$ 93,914

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Contributed Capital	Retained Earnings
Beginning balance at Dec. 31, 2021	$ 160,386	$ 433	$ 16,913	$ 143,040
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	6,090			6,090
Stock-based compensation expense	195		195
Vesting of restricted awards	0	2	(2)
Cancellation of shares withheld to cover taxes upon vesting of restricted awards	(86)		(86)
Dividends declared:
Common stock, $0.24/share	(1,048)			(1,048)
Awards under LTIP, $0.24/share	(16)			(16)
Ending balance at Mar. 31, 2022	165,521	435	17,020	148,066
Beginning balance at Dec. 31, 2021	160,386	433	16,913	143,040
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	10,756
Issuance of common shares for acquisition	1,364
Ending balance at Sep. 30, 2022	169,251	438	18,218	150,595
Beginning balance at Mar. 31, 2022	165,521	435	17,020	148,066
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	2,476			2,476
Stock-based compensation expense	263		263
Cancellation of shares withheld to cover taxes upon vesting of restricted awards	(24)		(24)
Shares sold under at-the-market offering program	283	1	282
Dividends declared:
Common stock, $0.24/share	(1,049)			(1,049)
Awards under LTIP, $0.24/share	(18)			(18)
Ending balance at Jun. 30, 2022	167,452	436	17,541	149,475
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	2,190			2,190
Stock-based compensation expense	254		254
Issuance of common shares for acquisition	425	2	423
Dividends declared:
Common stock, $0.24/share	(1,054)			(1,054)
Awards under LTIP, $0.24/share	(16)			(16)
Ending balance at Sep. 30, 2022	169,251	438	18,218	150,595
Beginning balance at Dec. 31, 2022	93,177	248	19,965	72,964
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(1,999)			(1,999)
Stock-based compensation expense	283		283
Vesting of restricted awards	0	3	(3)
Cancellation of shares withheld to cover taxes upon vesting of restricted awards	(222)		(222)
Shares sold under at-the-market offering program	549	1	548
Dividends declared:
Common stock, $0.24/share	(608)			(608)
Awards under LTIP, $0.24/share	(25)			(25)
Ending balance at Mar. 31, 2023	91,155	252	20,571	70,332
Beginning balance at Dec. 31, 2022	93,177	248	19,965	72,964
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	1,086
Issuance of common shares for acquisition	0
Ending balance at Sep. 30, 2023	94,061	253	21,653	72,155
Beginning balance at Mar. 31, 2023	91,155	252	20,571	70,332
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	827			827
Stock-based compensation expense	372		372
Dividends declared:
Common stock, $0.24/share	(608)			(608)
Awards under LTIP, $0.24/share	(25)			(25)
Ending balance at Jun. 30, 2023	91,721	252	20,943	70,526
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	2,258			2,258
Stock-based compensation expense	389		389
Vesting of restricted awards	322	1	321
Dividends declared:
Common stock, $0.24/share	(609)			(609)
Awards under LTIP, $0.24/share	(20)			(20)
Ending balance at Sep. 30, 2023	$ 94,061	$ 253	$ 21,653	$ 72,155

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Dividends per common share (in dollars per share)	$ 0.24	$ 0.24	$ 0.24	$ 0.24	$ 0.24	$ 0.24
Awards under LTIP (in dollars per share)	$ 0.24	$ 0.24	$ 0.24	$ 0.24	$ 0.24	$ 0.24

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with eighteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 8 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results expected for the full year of 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the SEC on March 16, 2023. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Cash and cash equivalents	$	16,313	$	20,532
Restricted cash:
Collateral for outstanding letters of credit (1)	357		892
Captive insurance subsidiary (2)	8,218		9,643
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	24,888	$	31,067

_____________

(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.

(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder represents amounts paid to our captive insurance company for insurance premiums.

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2023	2,495,484
Vesting of restricted stock unit awards (see Note 13)	20,291
Vesting of performance share unit awards (see Note 13)	12,319
Shares withheld to cover taxes upon vesting of equity awards	(8,089)
Shares sold under at-the-market offering program	14,680
Balance, March 31, 2023	2,534,685
No activity	—
Balance, June 30, 2023	2,534,685
Vesting of shares issued in acquisition	10,172
Vesting of restricted stock unit awards (see Note 13)	1,584
Balance, September 30, 2023	2,546,441

Earnings Per Share

Basic earnings per share is computed by dividing our net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 13 for further discussion).

The calculation of basic and diluted earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Earnings per share — numerator:
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Denominator:
Basic weighted average number of shares outstanding	2,541		4,387		2,531		4,373
Basic net earnings per share	$	0.89	$	0.50	$	0.43	$	2.46
Diluted earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	2,541		4,387		2,531		4,373
Restricted stock unit awards	15		20		15		21
Performance share unit awards (1)	14		13		18		12
Total diluted shares	2,570		4,420		2,564		4,406
Diluted net earnings per share	$	0.88	$	0.50	$	0.42	$	2.44

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Equity At-The-Market Offerings

During the nine months ended September 30, 2023, we received net proceeds of approximately $0.6 million (net of offering costs to B. Riley Securities, Inc. of $27 thousand) from the sale of 14,680 of our common shares at an average price per share of approximately $40.74 in at-the-market offerings under our At Market Issuance Sales Agreement with B. Riley Securities, Inc. dated December 23, 2020.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 11 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 12 for further information).

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

In accordance with U.S. GAAP for interim reporting, we have historically estimated our full-year effective tax rate and applied this rate to ordinary income or loss for the reporting period. We have determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, this historical method would not provide reliable results for the three months ended September 30, 2023. Therefore, a discrete year-to-date method of reporting was used for the three months ended September 30, 2023. We will continue to evaluate income tax estimates under the historical method in subsequent quarters and employ a discrete effective tax rate method if warranted.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our consolidated statements of operations.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 13 for additional information regarding our 2018 LTIP.

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Revenue Recognition

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Crude Oil Marketing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	710,010	$	802,707	$	1,878,735	$	2,491,066
Services transferred over time	427		—		763		—
Total revenues from contracts with customers	710,437		802,707		1,879,498		2,491,066
Other (1)	9,488		11,687		34,175		33,399
Total crude oil marketing revenue	$	719,925	$	814,394	$	1,913,673	$	2,524,465
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	24,206		29,830		75,103		86,054
Total revenues from contracts with customers	24,206		29,830		75,103		86,054
Other	—		—		—		—
Total transportation revenue	$	24,206	$	29,830	$	75,103	$	86,054
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	59		—		308		—
Total revenues from contracts with customers	59		—		308		—
Other	—		—		—		—
Total pipeline and storage revenue	$	59	$	—	$	308	$	—
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	8,545	$	4,178	$	25,708	$	4,178
Services transferred over time	7,879		4,499		20,750		4,499
Total revenues from contracts with customers	16,424		8,677		46,458		8,677
Other	—		—		—		—
Total logistics and repurposing revenue	$	16,424	$	8,677	$	46,458	$	8,677
Subtotal:
Total revenues from contracts with customers	$	751,126	$	841,214	$	2,001,367	$	2,585,797
Total other (1)	9,488		11,687		34,175		33,399
Total consolidated revenues	$	760,614	$	852,901	$	2,035,542	$	2,619,196

_______________

(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

(2)All pipeline and storage revenue during the three and nine months ended September 30, 2022 and for the period from January 1, 2023 to May 31, 2023 was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and was eliminated in consolidation. During June 2023, we began earning revenue from an unaffiliated shipper.

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue gross-up	$	257,965	$	430,244	$	785,636	$	1,156,711

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Prepayments and Other Current Assets

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepayments and Other Current Assets

Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance premiums	$	302	$	1,220
Rents, licenses and other	2,168		1,898
Total prepayments and other current assets	$	2,470	$	3,118

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Property and Equipment

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	September 30,		December 31,
	in Years	2023		2022
Tractors and trailers	5 – 6	$	123,694	$	128,223
Field equipment	2 – 5	24,820		24,676
Finance lease ROU assets (1)	3 – 6	40,023		25,106
Pipeline and related facilities	20 – 25	20,397		20,362
Linefill and base gas (2)	N/A	3,922		3,922
Buildings	5 – 39	16,189		16,163
Office equipment	2 – 5	2,964		2,937
Land	N/A	4,163		2,309
Construction in progress	N/A	4,985		3,629
Total		241,157		227,327
Less accumulated depreciation and amortization		(130,115)		(120,902)
Property and equipment, net		$	111,042	$	106,425

_______________

(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers, a tank storage and throughput arrangement and office equipment (see Note 15 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $12.5 million and $9.9 million at September 30, 2023 and December 31, 2022, respectively.

(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Depreciation and amortization, excluding amounts under finance leases	$	4,523	$	4,392	$	14,260	$	11,644
Amortization of property and equipment under finance leases	1,983		1,323		5,691		3,792
Amortization of intangible assets	430		293		1,338		673
Total depreciation and amortization	$	6,936	$	6,008	$	21,289	$	16,109

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Acquisition

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition

Acquisition

On August 12, 2022, we entered into a purchase agreement with each of Scott Bosard, Trey Bosard and Tyler Bosard (collectively, the “Sellers”) to acquire all of the equity interests of Firebird Bulk Carriers, Inc. (“Firebird”) and Phoenix Oil, Inc. (“Phoenix”) for approximately $39.3 million, consisting of a cash payment of $35.4 million, 45,777 of our common shares valued at $1.4 million, of which 15,259 shares were issued immediately and 30,518 shares will be issued over a three year period, and contingent consideration valued at approximately $2.6 million. We funded the cash consideration using cash on hand at the time of acquisition. Pursuant to the purchase agreement, the purchase price was subject to customary post-closing adjustment provisions, including an earn-out payable to the Sellers to the extent the earnings before interest, taxes, depreciation and amortization (EBITDA) of Phoenix exceeded a specified threshold during the twelve full calendar months after the closing date of the acquisition.

Firebird is an interstate bulk motor carrier of crude oil, condensate, fuels, oils and other petroleum products. Firebird is headquartered in Humble, Texas, with six terminal locations throughout Texas, and operates 130 tractors and 209 trailers largely in the Eagle Ford basin. Phoenix is also headquartered in Humble, Texas, and recycles and repurposes off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Firebird and Phoenix have formed our new logistics and repurposing segment. We expect that this acquisition will offer us the opportunity to expand our value chain and market impact, with numerous synergies benefiting the combined companies.

We accounted for the acquisition of Firebird and Phoenix under the acquisition method in accordance with ASC 805, Business Combinations. The allocation of purchase consideration was based upon the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition.

The purchase price allocation was subject to revision as acquisition-date fair value analyses were completed and if additional information about facts and circumstances that existed at the acquisition date became available. During the second quarter of 2023, we revised the fair value of certain tractors and trailers, resulting in a decrease in the amount allocated to property and equipment of $0.2 million and with a corresponding increase in goodwill. No other changes to the purchase price allocation occurred during the first half of 2023. The purchase price consideration, as well as the estimated fair values of the assets acquired and liabilities assumed, was finalized during the second quarter of 2023.

The following table presents the final purchase price allocation of the indentifiable assets acquired and liabilities assumed at the acquisition date of August 12, 2022 (in thousands):

Assets acquired:
Cash and cash equivalents	$	2,203
Accounts receivable	4,653
Inventory	643
Other current assets	137
Property and equipment	24,809
Intangible assets	7,607
Goodwill	6,673
Other assets	458
Total assets acquired	$	47,183
Liabilities assumed:
Accounts payable and other accrued liabilities	$	(1,696)
Deferred tax liabilities	(6,207)
Total liabilities assumed	$	(7,903)
Net assets acquired	$	39,280

During the second quarter of 2023, based upon a review of the contingent consideration calculation terms, we determined that no payment would be made to the Sellers, and as such, we adjusted our accrual of $2.6 million that had been recorded as part of the purchase price allocation. The reversal of the accrual for the contingent consideration is included in general and administrative expense on our unaudited condensed consolidated statements of operations.

Unaudited Pro Forma Financial Information

The unaudited pro forma condensed consolidated results of operations in the table below are provided for illustrative purposes only and summarize the combined results of our operations and those of Firebird and Phoenix. For purposes of this pro forma presentation, the acquisition of Firebird and Phoenix is assumed to have occurred on January 1, 2022. The pro forma financial information for all periods presented also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets and certain other integration related impacts. This unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on January 1, 2022, nor of the results of operations that may be obtained in the future (in thousands, except per share amounts).

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022		2022
Revenues	$	860,771	$	2,663,447
Net earnings	2,295		12,867
Basic net earnings per common share	$	0.52	$	2.93
Diluted net earnings per common share	$	0.52	$	2.91

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Other Assets

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Components of other assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance collateral deposits	$	503	$	463
State collateral deposits	23		23
Materials and supplies	1,281		1,257
Debt issuance costs	1,343		1,595
Other	325		360
Total other assets	$	3,475	$	3,698

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the expected losses under the insurance programs. Insurance collateral deposits are invested at the discretion of our insurance carrier.

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Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment ReportingWe operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Crude oil marketing		Trans-portation		Pipeline and storage		Logistics and repurposing (1)		Other		Total
Three Months Ended September 30, 2023
Segment revenues (2)	$	719,925	$	24,333	$	770	$	16,457	$	—	$	761,485
Less: Intersegment revenues (2)	—		(127)		(711)		(33)		—		(871)
Revenues	$	719,925	$	24,206	$	59	$	16,424	$	—	$	760,614
Segment operating earnings (losses) (3)	7,664		1,558		(866)		(269)		—		8,087
Depreciation and amortization	2,092		3,006		266		1,572		—		6,936
Property and equipment additions (4)	140		1,416		182		1,271		—		3,009
Three Months Ended September 30, 2022
Segment revenues (2)	$	814,394	$	29,896	$	852	$	8,677	$	—	$	853,819
Less: Intersegment revenues (2)	—		(66)		(852)		—		—		(918)
Revenues	$	814,394	$	29,830	$	—	$	8,677	$	—	$	852,901
Segment operating earnings (losses) (3)	5,070		3,307		(909)		155		—		7,623
Depreciation and amortization	2,008		2,791		269		940		—		6,008
Property and equipment additions (4)	343		722		817		132		—		2,014
Nine Months Ended September 30, 2023
Segment revenues (2)	$	1,913,673	$	75,439	$	2,473	$	48,984	$	—	$	2,040,569
Less: Intersegment revenues (2)	—		(336)		(2,165)		(2,526)		—		(5,027)
Revenues	$	1,913,673	$	75,103	$	308	$	46,458	$	—	$	2,035,542
Segment operating earnings (losses) (3)	12,922		3,515		(2,846)		133		—		13,724
Depreciation and amortization	6,335		9,273		804		4,877		—		21,289
Property and equipment additions (4) (5)	809		2,754		1,423		3,819		112		8,917
Nine Months Ended September 30, 2022
Segment revenues (2)	$	2,524,465	$	86,207	$	2,912	$	8,677	$	—	$	2,622,261
Less: Intersegment revenues (2)	—		(153)		(2,912)		—		—		(3,065)
Revenues	$	2,524,465	$	86,054	$	—	$	8,677	$	—	$	2,619,196
Segment operating earnings (losses) (3)	20,301		9,112		(2,607)		155		—		26,961
Depreciation and amortization	5,690		8,671		808		940		—		16,109
Property and equipment additions (4)	4,351		1,416		890		132		8		6,797

_______________

(1)On August 12, 2022, we acquired a transportation logistics and recycling and repurposing business, resulting in a new operating segment.

(2)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.

(3)Our crude oil marketing segment’s operating earnings (losses) included inventory liquidation gains of $4.9 million and inventory valuation losses $5.1 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, our crude oil marketing segment’s operating (losses) earnings included inventory liquidation gains of $2.9 million and $2.1 million, respectively.

(4)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2023 and 2022. See Note 15 for further information.

(5)Amounts included in property and equipment additions for Other are additions for computer or other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.

Segment operating earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Segment operating earnings	$	8,087	$	7,623	$	13,724	$	26,961
General and administrative	(4,162)		(4,630)		(10,649)		(12,860)
Operating earnings	3,925		2,993		3,075		14,101
Interest and other income	119		338		893		665
Interest expense	(1,027)		(119)		(2,525)		(369)
Earnings before income taxes	$	3,017	$	3,212	$	1,443	$	14,397

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Reporting segment:
Crude oil marketing	$	251,449	$	215,813
Transportation	59,808		60,405
Pipeline and storage	25,123		25,815
Logistics and repurposing	44,264		45,307
Cash and other (1)	29,951		36,819
Total assets	$	410,595	$	384,159

_______________

(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.

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Transactions with Affiliates

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Transactions with Affiliates

Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities. Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
KSA and affiliate billings to us	$	—	$	1	$	—	$	7
Billings to KSA and affiliates	—		5		9		15
Rentals paid to an affiliate of KSA	—		136		232		388
Payments to an affiliate of KSA for purchase of   vehicles (1)	—		—		157		78
Rentals paid to affiliates of Scott Bosard	125		—		405		—
Crude oil purchases from affiliate (2)	9,362		1,403		13,940		1,403

_______________

(1)Amounts paid to West Point Buick GMC were for the purchase of three and two pickup trucks during the nine months ended September 30, 2023 and 2022, respectively.

(2)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which one of our Board members is the Managing Partner.

Affiliate transactions included direct cost reimbursement for shared phone and administrative services from KSA Industries, Inc. (“KSA”), an affiliated entity. We lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA. In addition, we purchase pickup trucks from West Point Buick GMC, an affiliate of KSA. KSA was our largest shareholder until October 31, 2022 when we repurchased the common stock owned by it. An affiliate of KSA served on our Board of Directors through the date of our 2023 annual meeting, when he retired. As of May 31, 2023, KSA and its affiliates are no longer related parties. The table above consequently does not reflect any payments to or from KSA after that date.

In connection with the acquisition of Firebird and Phoenix on August 12, 2022, we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the sellers, for periods ranging from two to five years.

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Other Current Liabilities

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Other Current Liabilities

The components of other current liabilities were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrual for payroll, benefits and bonuses	$	5,489	$	6,435
Accrued automobile and workers’ compensation claims	5,989		5,579
Contingent consideration for acquisition (see Note 6)	—		2,566
Accrued medical claims	505		1,007
Accrued taxes	620		2,208
Other	1,253		1,419
Total other current liabilities	$	13,856	$	19,214

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Long-Term Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

On October 27, 2022, we entered into a credit agreement (the “Credit Agreement”) with Cadence Bank, as administrative agent, swingline lender and issuing lender, and the other lenders party thereto (collectively, the “Lenders”). The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time (the “Revolving Credit Facility”) and (b) a Term Loan in aggregate principal amount of $25.0 million (the “Term Loan”). The Revolving Credit Facility matures on October 27, 2027 unless earlier terminated.

Pursuant to the terms of the Credit Agreement, we are required to maintain compliance with the following financial covenants on a pro forma basis, after giving effect to any borrowings (in each case commencing with the fiscal quarter ending December 31, 2022): (i) the Consolidated Total Leverage Ratio shall not be greater than 2.50 to 1.00; (ii) the Asset Coverage Ratio shall not be less than 2.00 to 1.00; and (iii) the Consolidated Fixed Charge Coverage Ratio shall not be less than 1.25 to 1.00. Each of such ratios is calculated as outlined in the Credit Agreement and subject to certain exclusions and qualifications described therein.

On August 2, 2023, we entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement. The Amendment (i) clarifies our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of Consolidated EBITDA for purposes of the related financial covenants, (ii) provides for the exclusion of unusual and non-recurring losses and expenses from the calculation of Consolidated EBITDA, not to exceed 10.0 percent of Consolidated EBITDA for the period, and (iii) amends the definition of Consolidated Funded Indebtedness to include letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of the Consolidated Total Leverage Ratio calculation in the Credit Agreement. The Amendment applies to our fiscal period ending June 30, 2023 and thereafter.

At September 30, 2023, we had $22.5 million outstanding under the Term Loan at a weighted average interest rate of 7.66 percent, and $20.4 million letters of credit outstanding at a fee of 2.25 percent. No amounts were outstanding under the Revolving Credit Facility. The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2023 for the next five years, and in total thereafter (in thousands):

Remainder of 2023	$	625
2024	2,500
2025	2,500
2026	2,500
2027	14,375
Total debt maturities	$	22,500

At September 30, 2023, we were in compliance with all covenants under the Credit Agreement.

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Derivative Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Fair Value Measurements

Derivative Instruments and Fair Value Measurements

Derivative Instruments

In the normal course of our operations, our crude oil marketing segment purchases and sells crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, these transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for these contracts at fair value, unless the normal purchase and sale exception is applicable. These types of underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments.

At September 30, 2023, we had in place one derivative instrument, entered into in 2022, for the purchase of 126,000 gallons of diesel fuel per month during January 2023 through December 2023.

At December 31, 2022, we had in place three derivative instruments, entered into in 2022 for a total of 300,000 barrels of crude oil to be purchased and sold in January 2023, and one derivative instrument, also entered into in 2022, for the purchase of 126,000 gallons of diesel fuel per month during January 2023 through December 2023.

The estimated fair value of forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated balance sheets were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
September 30, 2023
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	5	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	5	$	—	$	—	$	—
December 31, 2022
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		330		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	330	$	—

We only enter into derivative instruments with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At September 30, 2023 and December 31, 2022, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

Forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues – marketing	$	—	$	(14)	$	—	$	(9)
Cost and expenses – marketing	(36)		1,878		(335)		1,253

Fair Value Measurements

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
September 30, 2023
Derivatives:
Current assets	$	—	$	5	$	—	$	—	$	5
Current liabilities	—		—		—		—		—
Net value	$	—	$	5	$	—	$	—	$	5
December 31, 2022
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		(330)		—		—		(330)
Net value	$	—	$	(330)	$	—	$	—	$	(330)

These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of these inputs requires judgments.

When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores, to evaluate the likelihood of default by us or our counterparties. At September 30, 2023 and December 31, 2022, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.

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Stock-Based Compensation Plan

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plan

Stock-Based Compensation Plan

We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. In May 2022, our shareholders approved an amendment and restatement of the 2018 LTIP, in which the maximum number of shares authorized for issuance under the 2018 LTIP was increased by 150,000 shares to a total of 300,000 shares, and the term of the 2018 LTIP was extended through February 23, 2032. After giving effect to awards granted and forfeitures made under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through September 30, 2023, a total of 125,192 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Compensation expense	$	389	$	254	$	1,044	$	712

At September 30, 2023 and December 31, 2022, we had $128,300 and $140,300, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP or as inducement awards.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2023	70,244	$	31.89
Granted (2)	23,409	$	57.18
Vested	(31,659)	$	31.78
Forfeited	(1,831)	$	43.80
Restricted stock unit awards at September 30, 2023	60,163	$	41.43

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2023 was $1.3 million based on grant date market prices of our common shares ranging from $37.56 to $58.05 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.9 million at September 30, 2023. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.5 years.

Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2023	30,687	$	28.59
Granted (2)	12,061	$	56.84
Vested	(12,707)	$	25.70
Forfeited	(680)	$	37.50
Performance share unit awards at September 30, 2023	29,361	$	41.24

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2023 was $0.7 million based on grant date market prices of our common shares ranging from $38.42 to $58.05 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.7 million at September 30, 2023. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.1 years.

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Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for interest	$	2,671	$	369
Cash paid for federal and state income taxes	2,472		1,827
Cash refund for net operating loss (NOL) carryback under CARES Act	—		6,907
Non-cash transactions:
Change in accounts payable related to property and equipment additions	52		—
Property and equipment acquired under finance leases	17,632		4,353
Issuance of shares for acquisition (see Note 6)	—		1,364

See Note 15 for information related to other non-cash transactions related to leases.

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Finance lease cost:
Amortization of ROU assets	$	1,983	$	1,306	$	5,691	$	3,775
Interest on lease liabilities	408		84		955		242
Operating lease cost	927		781		2,720		2,130
Short-term lease cost	3,529		3,752		10,668		11,335
Variable lease cost	6		6		18		16
Total lease expense	$	6,853	$	5,929	$	20,052	$	17,498

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	2,739	$	2,112
Operating cash flows from finance leases (1)	851		238
Financing cash flows from finance leases	4,944		3,491
ROU assets obtained in exchange for new lease liabilities:
Finance leases	17,632		4,353
Operating leases	667		2,715

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Nine Months Ended
	September 30,
	2023	2022
Weighted-average remaining lease term (years):
Finance leases	3.65	3.33
Operating leases	3.05	3.57
Weighted-average discount rate:
Finance leases	5.4%	2.9%
Operating leases	4.2%	3.9%

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Assets
Finance lease ROU assets (1)	$	27,482	$	15,264
Operating lease ROU assets	6,212		7,720
Liabilities
Current
Finance lease liabilities	6,863		4,382
Operating lease liabilities	2,769		2,712
Noncurrent
Finance lease liabilities	22,292		12,085
Operating lease liabilities	3,446		5,007

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2023 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2023	$	2,151	$	765
2024	8,071		2,874
2025	8,376		1,146
2026	5,549		952
2027	5,981		602
Thereafter	2,685		236
Total lease payments	32,813		6,575
Less: Interest	(3,658)		(360)
Present value of lease liabilities	29,155		6,215
Less: Current portion of lease obligation	(6,863)		(2,769)
Total long-term lease obligation	$	22,292	$	3,446

The following table provides maturities of undiscounted lease liabilities at December 31, 2022 (in thousands):

	Finance		Operating
	Lease		Lease
2023	$	4,870	$	2,958
2024	3,629		2,617
2025	4,652		962
2026	2,482		879
2027	2,179		570
Thereafter	—		237
Total lease payments	17,812		8,223
Less: Interest	(1,345)		(504)
Present value of lease liabilities	16,467		7,719
Less: Current portion of lease obligation	(4,382)		(2,712)
Total long-term lease obligation	$	12,085	$	5,007

Leases

Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Finance lease cost:
Amortization of ROU assets	$	1,983	$	1,306	$	5,691	$	3,775
Interest on lease liabilities	408		84		955		242
Operating lease cost	927		781		2,720		2,130
Short-term lease cost	3,529		3,752		10,668		11,335
Variable lease cost	6		6		18		16
Total lease expense	$	6,853	$	5,929	$	20,052	$	17,498

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	2,739	$	2,112
Operating cash flows from finance leases (1)	851		238
Financing cash flows from finance leases	4,944		3,491
ROU assets obtained in exchange for new lease liabilities:
Finance leases	17,632		4,353
Operating leases	667		2,715

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Nine Months Ended
	September 30,
	2023	2022
Weighted-average remaining lease term (years):
Finance leases	3.65	3.33
Operating leases	3.05	3.57
Weighted-average discount rate:
Finance leases	5.4%	2.9%
Operating leases	4.2%	3.9%

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Assets
Finance lease ROU assets (1)	$	27,482	$	15,264
Operating lease ROU assets	6,212		7,720
Liabilities
Current
Finance lease liabilities	6,863		4,382
Operating lease liabilities	2,769		2,712
Noncurrent
Finance lease liabilities	22,292		12,085
Operating lease liabilities	3,446		5,007

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2023 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2023	$	2,151	$	765
2024	8,071		2,874
2025	8,376		1,146
2026	5,549		952
2027	5,981		602
Thereafter	2,685		236
Total lease payments	32,813		6,575
Less: Interest	(3,658)		(360)
Present value of lease liabilities	29,155		6,215
Less: Current portion of lease obligation	(6,863)		(2,769)
Total long-term lease obligation	$	22,292	$	3,446

The following table provides maturities of undiscounted lease liabilities at December 31, 2022 (in thousands):

	Finance		Operating
	Lease		Lease
2023	$	4,870	$	2,958
2024	3,629		2,617
2025	4,652		962
2026	2,482		879
2027	2,179		570
Thereafter	—		237
Total lease payments	17,812		8,223
Less: Interest	(1,345)		(504)
Present value of lease liabilities	16,467		7,719
Less: Current portion of lease obligation	(4,382)		(2,712)
Total long-term lease obligation	$	12,085	$	5,007

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Insurance

We have accrued liabilities for estimated workers’ compensation and other casualty claims incurred based upon claim reserves plus an estimate for loss development and incurred but not reported claims. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability, with a self-insured retention of $1.0 million. Insurance is purchased over our retention to reduce our exposure to catastrophic events. Estimates are recorded for potential and incurred outstanding liabilities for workers’ compensation, auto and general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historical experience and statistical methods commonly used within the insurance industry that we believe are reliable. We have also engaged a third-party actuary to perform a review of our accrued liability for these claims as well as potential funded losses in our captive insurance company. Insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices and the selection of estimated loss among estimates derived using different methods. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

On October 1, 2020, we elected to utilize a wholly owned insurance captive to insure the self-insured retention for our workers’ compensation, general liability and automobile liability insurance programs. All accrued liabilities associated with periods from October 1, 2017 through current were transferred to the captive.

We maintain excess property and casualty programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs. Our operating subsidiaries pay premiums to both the excess and reinsurance carriers and our captive for the estimated losses based on an external actuarial analysis. These premiums held by our wholly owned captive are currently held in a restricted account, resulting in a transfer of risk from our operating subsidiaries to the captive.

We also maintain a self-insurance program for managing employee medical claims in excess of employee deductibles. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.3 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $11.3 million.

Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrued automobile and workers’ compensation claims	$	5,989	$	5,579
Accrued medical claims	505		1,007

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position, results of operations or cash flows.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Organization

Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with eighteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 8 for further information regarding our business segments.

Basis of Presentation

Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results expected for the full year of 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the SEC on March 16, 2023. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of EstimatesThe preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

Earnings Per Share

Earnings Per ShareBasic earnings per share is computed by dividing our net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 13 for further discussion).

Fair Value Measurements

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 11 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 12 for further information).

Income Taxes

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

In accordance with U.S. GAAP for interim reporting, we have historically estimated our full-year effective tax rate and applied this rate to ordinary income or loss for the reporting period. We have determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, this historical method would not provide reliable results for the three months ended September 30, 2023. Therefore, a discrete year-to-date method of reporting was used for the three months ended September 30, 2023. We will continue to evaluate income tax estimates under the historical method in subsequent quarters and employ a discrete effective tax rate method if warranted.

Inventory

InventoryInventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our consolidated statements of operations.

Property and Equipment

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

Stock-Based Compensation

Stock-Based CompensationWe measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur.

Other Crude Oil Marketing Revenue

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Cash and cash equivalents	$	16,313	$	20,532
Restricted cash:
Collateral for outstanding letters of credit (1)	357		892
Captive insurance subsidiary (2)	8,218		9,643
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	24,888	$	31,067

_____________

(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.

(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder represents amounts paid to our captive insurance company for insurance premiums.

Schedule of Common Stock Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2023	2,495,484
Vesting of restricted stock unit awards (see Note 13)	20,291
Vesting of performance share unit awards (see Note 13)	12,319
Shares withheld to cover taxes upon vesting of equity awards	(8,089)
Shares sold under at-the-market offering program	14,680
Balance, March 31, 2023	2,534,685
No activity	—
Balance, June 30, 2023	2,534,685
Vesting of shares issued in acquisition	10,172
Vesting of restricted stock unit awards (see Note 13)	1,584
Balance, September 30, 2023	2,546,441

Schedule of Earnings Per Share, Basic and Diluted

The calculation of basic and diluted earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Earnings per share — numerator:
Net earnings	$	2,258	$	2,190	$	1,086	$	10,756
Denominator:
Basic weighted average number of shares outstanding	2,541		4,387		2,531		4,373
Basic net earnings per share	$	0.89	$	0.50	$	0.43	$	2.46
Diluted earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	2,541		4,387		2,531		4,373
Restricted stock unit awards	15		20		15		21
Performance share unit awards (1)	14		13		18		12
Total diluted shares	2,570		4,420		2,564		4,406
Diluted net earnings per share	$	0.88	$	0.50	$	0.42	$	2.44

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Crude Oil Marketing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	710,010	$	802,707	$	1,878,735	$	2,491,066
Services transferred over time	427		—		763		—
Total revenues from contracts with customers	710,437		802,707		1,879,498		2,491,066
Other (1)	9,488		11,687		34,175		33,399
Total crude oil marketing revenue	$	719,925	$	814,394	$	1,913,673	$	2,524,465
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	24,206		29,830		75,103		86,054
Total revenues from contracts with customers	24,206		29,830		75,103		86,054
Other	—		—		—		—
Total transportation revenue	$	24,206	$	29,830	$	75,103	$	86,054
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time	59		—		308		—
Total revenues from contracts with customers	59		—		308		—
Other	—		—		—		—
Total pipeline and storage revenue	$	59	$	—	$	308	$	—
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time	$	8,545	$	4,178	$	25,708	$	4,178
Services transferred over time	7,879		4,499		20,750		4,499
Total revenues from contracts with customers	16,424		8,677		46,458		8,677
Other	—		—		—		—
Total logistics and repurposing revenue	$	16,424	$	8,677	$	46,458	$	8,677
Subtotal:
Total revenues from contracts with customers	$	751,126	$	841,214	$	2,001,367	$	2,585,797
Total other (1)	9,488		11,687		34,175		33,399
Total consolidated revenues	$	760,614	$	852,901	$	2,035,542	$	2,619,196

_______________

(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

(2)All pipeline and storage revenue during the three and nine months ended September 30, 2022 and for the period from January 1, 2023 to May 31, 2023 was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and was eliminated in consolidation. During June 2023, we began earning revenue from an unaffiliated shipper.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue gross-up	$	257,965	$	430,244	$	785,636	$	1,156,711

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Prepayments and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance premiums	$	302	$	1,220
Rents, licenses and other	2,168		1,898
Total prepayments and other current assets	$	2,470	$	3,118

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	September 30,		December 31,
	in Years	2023		2022
Tractors and trailers	5 – 6	$	123,694	$	128,223
Field equipment	2 – 5	24,820		24,676
Finance lease ROU assets (1)	3 – 6	40,023		25,106
Pipeline and related facilities	20 – 25	20,397		20,362
Linefill and base gas (2)	N/A	3,922		3,922
Buildings	5 – 39	16,189		16,163
Office equipment	2 – 5	2,964		2,937
Land	N/A	4,163		2,309
Construction in progress	N/A	4,985		3,629
Total		241,157		227,327
Less accumulated depreciation and amortization		(130,115)		(120,902)
Property and equipment, net		$	111,042	$	106,425

_______________

(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers, a tank storage and throughput arrangement and office equipment (see Note 15 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $12.5 million and $9.9 million at September 30, 2023 and December 31, 2022, respectively.

(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Depreciation and amortization, excluding amounts under finance leases	$	4,523	$	4,392	$	14,260	$	11,644
Amortization of property and equipment under finance leases	1,983		1,323		5,691		3,792
Amortization of intangible assets	430		293		1,338		673
Total depreciation and amortization	$	6,936	$	6,008	$	21,289	$	16,109

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents the final purchase price allocation of the indentifiable assets acquired and liabilities assumed at the acquisition date of August 12, 2022 (in thousands):

Assets acquired:
Cash and cash equivalents	$	2,203
Accounts receivable	4,653
Inventory	643
Other current assets	137
Property and equipment	24,809
Intangible assets	7,607
Goodwill	6,673
Other assets	458
Total assets acquired	$	47,183
Liabilities assumed:
Accounts payable and other accrued liabilities	$	(1,696)
Deferred tax liabilities	(6,207)
Total liabilities assumed	$	(7,903)
Net assets acquired	$	39,280

Schedule of Acquisition, Pro Forma Information

This unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on January 1, 2022, nor of the results of operations that may be obtained in the future (in thousands, except per share amounts).

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022		2022
Revenues	$	860,771	$	2,663,447
Net earnings	2,295		12,867
Basic net earnings per common share	$	0.52	$	2.93
Diluted net earnings per common share	$	0.52	$	2.91

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Components of other assets were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Insurance collateral deposits	$	503	$	463
State collateral deposits	23		23
Materials and supplies	1,281		1,257
Debt issuance costs	1,343		1,595
Other	325		360
Total other assets	$	3,475	$	3,698

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Information Concerning Business Activities

Financial information by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Crude oil marketing		Trans-portation		Pipeline and storage		Logistics and repurposing (1)		Other		Total
Three Months Ended September 30, 2023
Segment revenues (2)	$	719,925	$	24,333	$	770	$	16,457	$	—	$	761,485
Less: Intersegment revenues (2)	—		(127)		(711)		(33)		—		(871)
Revenues	$	719,925	$	24,206	$	59	$	16,424	$	—	$	760,614
Segment operating earnings (losses) (3)	7,664		1,558		(866)		(269)		—		8,087
Depreciation and amortization	2,092		3,006		266		1,572		—		6,936
Property and equipment additions (4)	140		1,416		182		1,271		—		3,009
Three Months Ended September 30, 2022
Segment revenues (2)	$	814,394	$	29,896	$	852	$	8,677	$	—	$	853,819
Less: Intersegment revenues (2)	—		(66)		(852)		—		—		(918)
Revenues	$	814,394	$	29,830	$	—	$	8,677	$	—	$	852,901
Segment operating earnings (losses) (3)	5,070		3,307		(909)		155		—		7,623
Depreciation and amortization	2,008		2,791		269		940		—		6,008
Property and equipment additions (4)	343		722		817		132		—		2,014
Nine Months Ended September 30, 2023
Segment revenues (2)	$	1,913,673	$	75,439	$	2,473	$	48,984	$	—	$	2,040,569
Less: Intersegment revenues (2)	—		(336)		(2,165)		(2,526)		—		(5,027)
Revenues	$	1,913,673	$	75,103	$	308	$	46,458	$	—	$	2,035,542
Segment operating earnings (losses) (3)	12,922		3,515		(2,846)		133		—		13,724
Depreciation and amortization	6,335		9,273		804		4,877		—		21,289
Property and equipment additions (4) (5)	809		2,754		1,423		3,819		112		8,917
Nine Months Ended September 30, 2022
Segment revenues (2)	$	2,524,465	$	86,207	$	2,912	$	8,677	$	—	$	2,622,261
Less: Intersegment revenues (2)	—		(153)		(2,912)		—		—		(3,065)
Revenues	$	2,524,465	$	86,054	$	—	$	8,677	$	—	$	2,619,196
Segment operating earnings (losses) (3)	20,301		9,112		(2,607)		155		—		26,961
Depreciation and amortization	5,690		8,671		808		940		—		16,109
Property and equipment additions (4)	4,351		1,416		890		132		8		6,797

_______________

(1)On August 12, 2022, we acquired a transportation logistics and recycling and repurposing business, resulting in a new operating segment.

(2)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.

(3)Our crude oil marketing segment’s operating earnings (losses) included inventory liquidation gains of $4.9 million and inventory valuation losses $5.1 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, our crude oil marketing segment’s operating (losses) earnings included inventory liquidation gains of $2.9 million and $2.1 million, respectively.

(4)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2023 and 2022. See Note 15 for further information.

(5)Amounts included in property and equipment additions for Other are additions for computer or other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.

Schedule of Reconciliation of Segment Earnings to Earnings Before Income Taxes

Segment operating earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Segment operating earnings	$	8,087	$	7,623	$	13,724	$	26,961
General and administrative	(4,162)		(4,630)		(10,649)		(12,860)
Operating earnings	3,925		2,993		3,075		14,101
Interest and other income	119		338		893		665
Interest expense	(1,027)		(119)		(2,525)		(369)
Earnings before income taxes	$	3,017	$	3,212	$	1,443	$	14,397

Schedule of Identifiable Assets by Industry Segment

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Reporting segment:
Crude oil marketing	$	251,449	$	215,813
Transportation	59,808		60,405
Pipeline and storage	25,123		25,815
Logistics and repurposing	44,264		45,307
Cash and other (1)	29,951		36,819
Total assets	$	410,595	$	384,159

_______________

(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

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Transactions with Affiliates (Tables)

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Schedule of Activities with Affiliates

Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
KSA and affiliate billings to us	$	—	$	1	$	—	$	7
Billings to KSA and affiliates	—		5		9		15
Rentals paid to an affiliate of KSA	—		136		232		388
Payments to an affiliate of KSA for purchase of   vehicles (1)	—		—		157		78
Rentals paid to affiliates of Scott Bosard	125		—		405		—
Crude oil purchases from affiliate (2)	9,362		1,403		13,940		1,403

_______________

(1)Amounts paid to West Point Buick GMC were for the purchase of three and two pickup trucks during the nine months ended September 30, 2023 and 2022, respectively.

(2)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which one of our Board members is the Managing Partner.

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Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Schedule of Other Current Liabilities

The components of other current liabilities were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrual for payroll, benefits and bonuses	$	5,489	$	6,435
Accrued automobile and workers’ compensation claims	5,989		5,579
Contingent consideration for acquisition (see Note 6)	—		2,566
Accrued medical claims	505		1,007
Accrued taxes	620		2,208
Other	1,253		1,419
Total other current liabilities	$	13,856	$	19,214

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Maturities of Long-Term Debt

The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2023 for the next five years, and in total thereafter (in thousands):

Remainder of 2023	$	625
2024	2,500
2025	2,500
2026	2,500
2027	14,375
Total debt maturities	$	22,500

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Derivative Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Reflected in the Consolidated Balance Sheet

The estimated fair value of forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated balance sheets were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
September 30, 2023
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	5	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	5	$	—	$	—	$	—
December 31, 2022
Asset derivatives:
Fair value forward derivative instruments
at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward derivative instruments
at gross valuation	—		—		330		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	330	$	—

Schedule of Derivatives Reflected in the Consolidated Statement of Operations

Forward month derivatives instruments reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues – marketing	$	—	$	(14)	$	—	$	(9)
Cost and expenses – marketing	(36)		1,878		(335)		1,253

Schedule of Fair value Assets and Liabilities

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
September 30, 2023
Derivatives:
Current assets	$	—	$	5	$	—	$	—	$	5
Current liabilities	—		—		—		—		—
Net value	$	—	$	5	$	—	$	—	$	5
December 31, 2022
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		(330)		—		—		(330)
Net value	$	—	$	(330)	$	—	$	—	$	(330)

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Stock-Based Compensation Plan (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-Based Payment Arrangement

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Compensation expense	$	389	$	254	$	1,044	$	712

Schedule of Share-Based Compensation, Activity

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2023	70,244	$	31.89
Granted (2)	23,409	$	57.18
Vested	(31,659)	$	31.78
Forfeited	(1,831)	$	43.80
Restricted stock unit awards at September 30, 2023	60,163	$	41.43

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2023 was $1.3 million based on grant date market prices of our common shares ranging from $37.56 to $58.05 per share.

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2023	30,687	$	28.59
Granted (2)	12,061	$	56.84
Vested	(12,707)	$	25.70
Forfeited	(680)	$	37.50
Performance share unit awards at September 30, 2023	29,361	$	41.24

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2023 was $0.7 million based on grant date market prices of our common shares ranging from $38.42 to $58.05 per share and assuming a performance factor of 100 percent.

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for interest	$	2,671	$	369
Cash paid for federal and state income taxes	2,472		1,827
Cash refund for net operating loss (NOL) carryback under CARES Act	—		6,907
Non-cash transactions:
Change in accounts payable related to property and equipment additions	52		—
Property and equipment acquired under finance leases	17,632		4,353
Issuance of shares for acquisition (see Note 6)	—		1,364

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Lease, Cost

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Finance lease cost:
Amortization of ROU assets	$	1,983	$	1,306	$	5,691	$	3,775
Interest on lease liabilities	408		84		955		242
Operating lease cost	927		781		2,720		2,130
Short-term lease cost	3,529		3,752		10,668		11,335
Variable lease cost	6		6		18		16
Total lease expense	$	6,853	$	5,929	$	20,052	$	17,498

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	2,739	$	2,112
Operating cash flows from finance leases (1)	851		238
Financing cash flows from finance leases	4,944		3,491
ROU assets obtained in exchange for new lease liabilities:
Finance leases	17,632		4,353
Operating leases	667		2,715

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Nine Months Ended
	September 30,
	2023	2022
Weighted-average remaining lease term (years):
Finance leases	3.65	3.33
Operating leases	3.05	3.57
Weighted-average discount rate:
Finance leases	5.4%	2.9%
Operating leases	4.2%	3.9%

Assets and Liabilities, Lessee

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Assets
Finance lease ROU assets (1)	$	27,482	$	15,264
Operating lease ROU assets	6,212		7,720
Liabilities
Current
Finance lease liabilities	6,863		4,382
Operating lease liabilities	2,769		2,712
Noncurrent
Finance lease liabilities	22,292		12,085
Operating lease liabilities	3,446		5,007

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

Lessee, Operating Lease, Liability, Maturity

The following table provides maturities of undiscounted lease liabilities at September 30, 2023 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2023	$	2,151	$	765
2024	8,071		2,874
2025	8,376		1,146
2026	5,549		952
2027	5,981		602
Thereafter	2,685		236
Total lease payments	32,813		6,575
Less: Interest	(3,658)		(360)
Present value of lease liabilities	29,155		6,215
Less: Current portion of lease obligation	(6,863)		(2,769)
Total long-term lease obligation	$	22,292	$	3,446

The following table provides maturities of undiscounted lease liabilities at December 31, 2022 (in thousands):

	Finance		Operating
	Lease		Lease
2023	$	4,870	$	2,958
2024	3,629		2,617
2025	4,652		962
2026	2,482		879
2027	2,179		570
Thereafter	—		237
Total lease payments	17,812		8,223
Less: Interest	(1,345)		(504)
Present value of lease liabilities	16,467		7,719
Less: Current portion of lease obligation	(4,382)		(2,712)
Total long-term lease obligation	$	12,085	$	5,007

Finance Lease, Liability, Maturity

The following table provides maturities of undiscounted lease liabilities at September 30, 2023 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2023	$	2,151	$	765
2024	8,071		2,874
2025	8,376		1,146
2026	5,549		952
2027	5,981		602
Thereafter	2,685		236
Total lease payments	32,813		6,575
Less: Interest	(3,658)		(360)
Present value of lease liabilities	29,155		6,215
Less: Current portion of lease obligation	(6,863)		(2,769)
Total long-term lease obligation	$	22,292	$	3,446

The following table provides maturities of undiscounted lease liabilities at December 31, 2022 (in thousands):

	Finance		Operating
	Lease		Lease
2023	$	4,870	$	2,958
2024	3,629		2,617
2025	4,652		962
2026	2,482		879
2027	2,179		570
Thereafter	—		237
Total lease payments	17,812		8,223
Less: Interest	(1,345)		(504)
Present value of lease liabilities	16,467		7,719
Less: Current portion of lease obligation	(4,382)		(2,712)
Total long-term lease obligation	$	12,085	$	5,007

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Expenses and Losses Incurred but Not Reported

Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

	September 30,		December 31,
	2023		2022
Accrued automobile and workers’ compensation claims	$	5,989	$	5,579
Accrued medical claims	505		1,007

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Organization and Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2023 state segment terminal
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of states in which entity operates | state	48
Number of terminals in which entity operates | terminal	18
Number of operating segments	4
Number of reportable segments	4

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Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 16,313	$ 20,532
Restricted cash	8,575	10,535
Total cash, cash equivalents and restricted cash shown in the unaudited condensed consolidated statements of cash flows	24,888	31,067	$ 93,914	$ 107,317
Letter of Credit
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	357	892
Captive Insurance Subsidiary
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	8,218	$ 9,643
Initial Capitalization
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 1,500

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Summary of Significant Accounting Policies - Schedule of Common Stock Outstanding (Details) - shares	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)	2,534,685	2,534,685	2,495,484	2,495,484
Vesting of restricted stock unit awards (in shares)	1,584	0	20,291
Shares withheld to cover taxes upon vesting of equity awards (in shares)		0	(8,089)
Issuance of shares in acquisition (in shares)	10,172
Ending balance (in shares)	2,546,441	2,534,685	2,534,685	2,546,441
Common Stock | At the Market Offerings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares sold under at-the-market offering program (in shares)		0	14,680	14,680
Performance Unit Awards
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of performance share unit awards (in shares)		0	12,319

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Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings per share
Net earnings	$ 2,258	$ 827	$ (1,999)	$ 2,190	$ 2,476	$ 6,090	$ 1,086	$ 10,756
Basic weighted average number of shares outstanding (in shares)	2,541			4,387			2,531	4,373
Basic net earnings per share (in dollars per share)	$ 0.89			$ 0.50			$ 0.43	$ 2.46
Diluted earnings per share:
Common shares (in shares)	2,541			4,387			2,531	4,373
Total diluted shares (in shares)	2,570			4,420			2,564	4,406
Diluted net earnings per share (in dollars per share)	$ 0.88			$ 0.50			$ 0.42	$ 2.44
Restricted stock units awards
Diluted earnings per share:
Unit awards (in shares)	15			20			15	21
Performance share unit awards
Diluted earnings per share:
Unit awards (in shares)	14			13			18	12

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Summary of Significant Accounting Policies - Equity at the Market Offering (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Sep. 30, 2023
Class of Stock [Line Items]
Shares sold under at-the-market offering program		$ 549	$ 283
Common Stock
Class of Stock [Line Items]
Shares sold under at-the-market offering program		$ 1	$ 1
Common Stock | At the Market Offerings
Class of Stock [Line Items]
Shares sold under at-the-market offering program				$ 600
Offering cost				$ 27
Shares sold at the market (in shares)	0	14,680		14,680
Shares sold at the market (in dollars per share)				$ 40.74

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Summary of Significant Accounting Policies - Fair Value Measurements (Details)	Sep. 30, 2023 contract
Hedging accounting
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of contracts held	0

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Summary of Significant Accounting Policies - Income Taxes and Property and Equipment (Details)	Sep. 30, 2023
Minimum
Property, Plant and Equipment [Abstract]
Property and equipment, useful life	2 years
Maximum
Property, Plant and Equipment [Abstract]
Property and equipment, useful life	39 years

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Revenue Recognition - Schedule of Revenue Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 760,614	$ 852,901	$ 2,035,542	$ 2,619,196
Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	751,126	841,214	2,001,367	2,585,797
Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	9,488	11,687	34,175	33,399
Crude oil marketing
Disaggregation of Revenue [Line Items]
Revenues	719,925	814,394	1,913,673	2,524,465
Crude oil marketing | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	710,437	802,707	1,879,498	2,491,066
Crude oil marketing | Revenues from contracts with customers | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	710,010	802,707	1,878,735	2,491,066
Crude oil marketing | Revenues from contracts with customers | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	427	0	763	0
Crude oil marketing | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	9,488	11,687	34,175	33,399
Trans-portation
Disaggregation of Revenue [Line Items]
Revenues	24,206	29,830	75,103	86,054
Trans-portation | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	24,206	29,830	75,103	86,054
Trans-portation | Revenues from contracts with customers | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Trans-portation | Revenues from contracts with customers | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	24,206	29,830	75,103	86,054
Trans-portation | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Pipeline and storage
Disaggregation of Revenue [Line Items]
Revenues	59	0	308	0
Pipeline and storage | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	59	0	308	0
Pipeline and storage | Revenues from contracts with customers | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Pipeline and storage | Revenues from contracts with customers | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	59	0	308	0
Pipeline and storage | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Logistics and repurposing
Disaggregation of Revenue [Line Items]
Revenues	16,424	8,677	46,458	8,677
Logistics and repurposing | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	16,424	8,677	46,458	8,677
Logistics and repurposing | Revenues from contracts with customers | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	8,545	4,178	25,708	4,178
Logistics and repurposing | Revenues from contracts with customers | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	7,879	4,499	20,750	4,499
Logistics and repurposing | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 0	$ 0	$ 0	$ 0

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Revenue Recognition - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue gross-up	$ 257,965	$ 430,244	$ 785,636	$ 1,156,711

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Prepayments and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Insurance premiums	$ 302	$ 1,220
Rents, licenses and other	2,168	1,898
Total prepayments and other current assets	$ 2,470	$ 3,118

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Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 241,157		$ 241,157		$ 227,327
Less accumulated depreciation and amortization	(130,115)		(130,115)		(120,902)
Property and equipment, net	111,042		111,042		106,425
Total depreciation and amortization	6,936	$ 6,008	21,289	$ 16,109
Amortization of intangible assets	430	293	1,338	673
Depreciation and amortization, excluding amounts under finance leases
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	4,523	4,392	14,260	11,644
Amortization of property and equipment under finance leases
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 1,983	$ 1,323	$ 5,691	$ 3,792
Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years		2 years
Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	39 years		39 years
Tractors and trailers
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 123,694		$ 123,694		128,223
Tractors and trailers | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years		5 years
Tractors and trailers | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	6 years		6 years
Field equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 24,820		$ 24,820		24,676
Field equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years		2 years
Field equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years		5 years
Finance lease ROU assets
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 40,023		$ 40,023		25,106
Property and equipment, net	$ 12,500		$ 12,500		9,900
Finance lease ROU assets | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years		3 years
Finance lease ROU assets | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	6 years		6 years
Pipeline and related facilities
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 20,397		$ 20,397		20,362
Pipeline and related facilities | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	20 years		20 years
Pipeline and related facilities | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	25 years		25 years
Linefill and base gas
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,922		$ 3,922		3,922
Buildings
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 16,189		$ 16,189		16,163
Buildings | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years		5 years
Buildings | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	39 years		39 years
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,964		$ 2,964		2,937
Office equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years		2 years
Office equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years		5 years
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,163		$ 4,163		2,309
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,985		$ 4,985		$ 3,629

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Acquisitions -Narrative (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 12, 2022 USD ($) segment shares	Sep. 30, 2023 shares	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Business Acquisition [Line Items]
Issuance of shares in acquisition (in shares) | shares		10,172
Property and equipment			$ 200
Change in contingent consideration liability			$ 2,600	$ 2,566	$ 0
Firebird
Business Acquisition [Line Items]
Connection to number of terminals | segment	6
Number of tractors | segment	130
Number of trailers | segment	209
Firebird and Phoenix
Business Acquisition [Line Items]
Fair value of total consideration transferred	$ 39,300
Cash payment for acquisition	$ 35,400
Number of shares (in shares) | shares	45,777
Equity interest issued or issuable, value assigned	$ 1,400
Issuance of shares in acquisition (in shares) | shares	15,259
Contingent consideration	$ 2,600
Firebird and Phoenix | To be Issued
Business Acquisition [Line Items]
Number of shares (in shares) | shares	30,518
Issuance period	3 years

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Acquisition - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Aug. 12, 2022
Assets acquired:
Cash and cash equivalents			$ 2,203
Accounts receivable			4,653
Inventory			643
Other current assets			137
Property and equipment			24,809
Intangible assets			7,607
Goodwill	$ 6,673	$ 6,428	6,673
Other assets			458
Total assets acquired			47,183
Liabilities assumed:
Accounts payable and other accrued liabilities			(1,696)
Deferred tax liabilities			(6,207)
Total liabilities assumed			(7,903)
Net assets acquired			$ 39,280

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Acquisitions - Schedule of Acquisition, Pro Forma Information (Details) - Firebird and Phoenix - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Business Acquisition [Line Items]
Revenues	$ 860,771	$ 2,663,447
Net earnings	$ 2,295	$ 12,867
Basic net earnings per common share (in dollars per share)	$ 0.52	$ 2.93
Diluted net earnings per common share (in dollars per share)	$ 0.52	$ 2.91

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Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Insurance collateral deposits	$ 503	$ 463
State collateral deposits	23	23
Materials and supplies	1,281	1,257
Debt issuance costs	1,343	1,595
Other	325	360
Total other assets	$ 3,475	$ 3,698

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Segment Reporting - Schedule of Information Concerning Business Activities (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) segment	Sep. 30, 2022 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment			4
Number of operating segments | segment			4
Segment Reporting Information [Line Items]
Revenues	$ 760,614	$ 852,901	$ 2,035,542	$ 2,619,196
Segment operating earnings (losses)	3,925	2,993	3,075	14,101
Depreciation and amortization	6,936	6,008	21,289	16,109
Property and equipment additions	3,009	2,014	8,917	6,797
Crude oil marketing
Segment Reporting Information [Line Items]
Revenues	719,925	814,394	1,913,673	2,524,465
Inventory liquidation gains (losses)	4,900	(5,100)	2,900	2,100
Trans-portation
Segment Reporting Information [Line Items]
Revenues	24,206	29,830	75,103	86,054
Pipeline and storage
Segment Reporting Information [Line Items]
Revenues	59	0	308	0
Logistics and repurposing
Segment Reporting Information [Line Items]
Revenues	16,424	8,677	46,458	8,677
Operating segments
Segment Reporting Information [Line Items]
Revenues	761,485	853,819	2,040,569	2,622,261
Segment operating earnings (losses)	8,087	7,623	13,724	26,961
Operating segments | Crude oil marketing
Segment Reporting Information [Line Items]
Revenues	719,925	814,394	1,913,673	2,524,465
Segment operating earnings (losses)	7,664	5,070	12,922	20,301
Depreciation and amortization	2,092	2,008	6,335	5,690
Property and equipment additions	140	343	809	4,351
Operating segments | Trans-portation
Segment Reporting Information [Line Items]
Revenues	24,333	29,896	75,439	86,207
Segment operating earnings (losses)	1,558	3,307	3,515	9,112
Depreciation and amortization	3,006	2,791	9,273	8,671
Property and equipment additions	1,416	722	2,754	1,416
Operating segments | Pipeline and storage
Segment Reporting Information [Line Items]
Revenues	770	852	2,473	2,912
Segment operating earnings (losses)	(866)	(909)	(2,846)	(2,607)
Depreciation and amortization	266	269	804	808
Property and equipment additions	182	817	1,423	890
Operating segments | Logistics and repurposing
Segment Reporting Information [Line Items]
Revenues	16,457	8,677	48,984	8,677
Segment operating earnings (losses)	(269)	155	133	155
Depreciation and amortization	1,572	940	4,877	940
Property and equipment additions	1,271	132	3,819	132
Intersegment
Segment Reporting Information [Line Items]
Revenues	(871)	(918)	(5,027)	(3,065)
Intersegment | Crude oil marketing
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Intersegment | Trans-portation
Segment Reporting Information [Line Items]
Revenues	(127)	(66)	(336)	(153)
Intersegment | Pipeline and storage
Segment Reporting Information [Line Items]
Revenues	(711)	(852)	(2,165)	(2,912)
Intersegment | Logistics and repurposing
Segment Reporting Information [Line Items]
Revenues	(33)	0	(2,526)	0
Other
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Segment operating earnings (losses)	0	0	0	0
Depreciation and amortization	0	0	0	0
Property and equipment additions	$ 0	$ 0	$ 112	$ 8

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Segment Reporting - Schedule of Reconciliation of Segment Earnings to Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating earnings	$ 3,925	$ 2,993	$ 3,075	$ 14,101
General and administrative	(4,162)	(4,630)	(10,649)	(12,860)
Interest and other income	119	338	893	665
Interest expense	(1,027)	(119)	(2,525)	(369)
Earnings before income taxes	3,017	3,212	1,443	14,397
Operating segments
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating earnings	8,087	7,623	13,724	26,961
General and administrative
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating earnings	0	0	0	0
General and administrative	(4,162)	(4,630)	(10,649)	(12,860)
Segment reconciling items
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Interest and other income	119	338	893	665
Interest expense	$ (1,027)	$ (119)	$ (2,525)	$ (369)

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Segment Reporting - Schedule of Identifiable Assets by Industry Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Segment Reconciliation [Abstract]
Total assets	$ 410,595	$ 384,159
Operating segments | Crude oil marketing
Segment Reconciliation [Abstract]
Total assets	251,449	215,813
Operating segments | Trans-portation
Segment Reconciliation [Abstract]
Total assets	59,808	60,405
Operating segments | Pipeline and storage
Segment Reconciliation [Abstract]
Total assets	25,123	25,815
Operating segments | Logistics and repurposing
Segment Reconciliation [Abstract]
Total assets	44,264	45,307
Cash and other
Segment Reconciliation [Abstract]
Total assets	$ 29,951	$ 36,819

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Transactions with Affiliates - Schedule of Activities with Affiliates (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) pickupTruck	Sep. 30, 2022 USD ($) truck
Related Party Transaction [Line Items]
Billings to KSA and affiliates	$ 760,614	$ 852,901	$ 2,035,542	$ 2,619,196
Affiliated Entities
Related Party Transaction [Line Items]
KSA and affiliate billings to us	0	1	0	7
Billings to KSA and affiliates	0	5	9	15
Affiliated Entities | Rentals paid to an affiliate of KSA
Related Party Transaction [Line Items]
Amounts of transaction	0	136	232	388
Affiliated Entities | Payments to an affiliate of KSA for purchase of vehicles
Related Party Transaction [Line Items]
Purchases from affiliated entity	0	0	157	78
Affiliated Entities | Rentals paid to affiliates of Scott Bosard
Related Party Transaction [Line Items]
Amounts of transaction	125	0	405	0
Affiliated Entities | Crude oil purchases from affiliate
Related Party Transaction [Line Items]
Purchases from affiliated entity	$ 9,362	$ 1,403	$ 13,940	$ 1,403
G M C
Related Party Transaction [Line Items]
Number of pickup tracks purchased			3	2

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Transactions with Affiliates - Narrative (Details) - Firebird and Phoenix	Aug. 12, 2022 segment
Related Party Transaction [Line Items]
Number of operating lease aggrement	4
Minimum
Related Party Transaction [Line Items]
Term of contract	2 years
Maximum
Related Party Transaction [Line Items]
Term of contract	5 years

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Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Accrual for payroll, benefits and bonuses	$ 5,489	$ 6,435
Accrued automobile and workers’ compensation claims	5,989	5,579
Contingent consideration for acquisition (see Note 6)	0	2,566
Accrued medical claims	505	1,007
Accrued taxes	620	2,208
Other	1,253	1,419
Total other current liabilities	$ 13,856	$ 19,214

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Long-Term Debt - Narrative (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)	Aug. 02, 2023	Dec. 31, 2022	Oct. 27, 2022 USD ($)
Line of Credit Facility [Line Items]
Percentage of unusual and non recurring losses and expenses on Consolidated EBITDA		0.10
Long-term debt	$ 22,500,000
Term Loan
Line of Credit Facility [Line Items]
Debt instrument, face amount				$ 25,000,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Leverage ratio			2.50
Asset coverage ratio			2.00
Coverage ratio			1.25
Letters of credit outstanding	20,400,000
Borrowings outstanding	$ 0
Letter of Credit
Line of Credit Facility [Line Items]
Commitment fee percentage	2.25%
Line of Credit | Secured Debt
Line of Credit Facility [Line Items]
Long-term debt	$ 22,500,000
Weighted average interest rate	7.66%
Line of Credit | Letter of Credit
Line of Credit Facility [Line Items]
Maximum borrowing amount				$ 60,000,000

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Long-Term Debt - Schedule of Maturities of Long-Term Debt (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Debt Disclosure [Abstract]
Remainder of 2023	$ 625
2024	2,500
2025	2,500
2026	2,500
2027	14,375
Long-term debt	$ 22,500

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Derivative Instruments and Fair Value Measurements - Narrative (Details) - Commodity Contract gallonsOfDieselPerDay in Thousands, barrel_of_oil_per_day in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 gallonsOfDieselPerDay contract	Dec. 31, 2022 barrel_of_oil_per_day gallonsOfDieselPerDay contract
Derivative Instruments, Gain (Loss) [Line Items]
Number of contracts held	1	1
Production | gallonsOfDieselPerDay	126	126
Purchased and Sold in January 2023
Derivative Instruments, Gain (Loss) [Line Items]
Number of contracts held		3
Production | barrel_of_oil_per_day		300

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Derivative Instruments and Fair Value Measurements - Schedule of Derivatives Reflected in the Consolidated Balance Sheet (Details) - Commodity Contract - Not Designated as Hedging Instrument - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current Assets
Derivatives, Fair Value [Line Items]
Asset derivatives	$ 5	$ 0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	5	0
Other Assets
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	0	0
Current Liabilities
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	0	330
Less counterparty offsets	0	0
As reported fair value contracts	0	330
Other Liabilities
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	$ 0	$ 0

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Derivative Instruments and Fair Value Measurements - Schedule of Derivatives Reflected in the Consolidated Statement of Operations (Details) - Not Designated as Hedging Instrument - Commodity Contract - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues – marketing
Derivative [Line Items]
Gain (loss) on derivative	$ 0	$ (14)	$ 0	$ (9)
Cost and expenses – marketing
Derivative [Line Items]
Gain (loss) on derivative	$ (36)	$ 1,878	$ (335)	$ 1,253

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Derivative Instruments and Fair Value Measurements - Schedule of Fair value Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Derivatives:
Current assets	$ 5	$ 0
Current assets, counterparty offsets	0	0
Current liabilities	0	(330)
Current liabilities, counterparty offsets	0	0
Net value	5	(330)
Net value, counterparty offsets	0	0
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
Derivatives:
Current assets	0	0
Current liabilities	0	0
Net value	0	0
Significant Other Observable Inputs (Level 2)
Derivatives:
Current assets	5	0
Current liabilities	0	(330)
Net value	5	(330)
Significant Unobservable Inputs (Level 3)
Derivatives:
Current assets	0	0
Current liabilities	0	0
Net value	$ 0	$ 0

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Stock-Based Compensation Plan - Narrative (Details) - The 2018 LTIP - USD ($)	1 Months Ended	9 Months Ended
	May 31, 2022	Sep. 30, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized (in shares)	150,000
Number of shares authorized (in shares)	300,000	125,192
Accrued dividends		$ 128,300	$ 140,300
Restricted stock units awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost		$ 900,000
Period for recognition for remaining compensation cost		1 year 6 months
Performance Unit Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost		$ 700,000
Period for recognition for remaining compensation cost		2 years 1 month 6 days

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Stock-Based Compensation Plan - Share-Based Payment Arrangement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Text Block [Abstract]
Compensation expense	$ 389	$ 254	$ 1,044	$ 712

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Stock-Based Compensation Plan - Schedule of Share-Based Compensation Activity, Payment Arrangement (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Restricted stock units awards
Number of Shares
Unit awards, beginning balance (in shares) | shares	70,244
Vested (in shares) | shares	(31,659)
Forfeited (in shares) | shares	(1,831)
Unit awards, ending balance (in shares) | shares	60,163
Weighted Average Grant Date Fair Value per Share
Unit awards, beginning balance (in dollars per share)	$ 31.89
Vested (in dollars per share)	31.78
Forfeited (in dollars per share)	43.80
Unit awards, ending balance (in dollars per share)	$ 41.43
The 2018 LTIP | Restricted stock units awards
Number of Shares
Granted (in shares) | shares	23,409
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 57.18
Aggregate grant date fair value awards issues | $	$ 1.3
The 2018 LTIP | Restricted stock units awards | Minimum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 37.56
The 2018 LTIP | Restricted stock units awards | Maximum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 58.05
The 2018 LTIP | Performance share unit awards
Number of Shares
Unit awards, beginning balance (in shares) | shares	30,687
Granted (in shares) | shares	12,061
Vested (in shares) | shares	(12,707)
Forfeited (in shares) | shares	(680)
Unit awards, ending balance (in shares) | shares	29,361
Weighted Average Grant Date Fair Value per Share
Unit awards, beginning balance (in dollars per share)	$ 28.59
Granted (in dollars per share)	56.84
Vested (in dollars per share)	25.70
Forfeited (in dollars per share)	37.50
Unit awards, ending balance (in dollars per share)	$ 41.24
Aggregate grant date fair value awards issues | $	$ 0.7
Performance factor	100000.00%
The 2018 LTIP | Performance share unit awards | Minimum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 38.42
The 2018 LTIP | Performance share unit awards | Maximum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 58.05

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest		$ 2,671	$ 369
Cash paid for federal and state income taxes		2,472	1,827
Cash refund for net operating loss (NOL) carryback under CARES Act		0	6,907
Non-cash transactions:
Change in accounts payable related to property and equipment additions		52	0
Property and equipment acquired under finance leases		17,632	4,353
Issuance of shares for acquisition (see Note 6)	$ 425	$ 0	$ 1,364

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Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Amortization of ROU assets	$ 1,983	$ 1,306	$ 5,691	$ 3,775
Interest on lease liabilities	408	84	955	242
Operating lease cost	927	781	2,720	2,130
Short-term lease cost	3,529	3,752	10,668	11,335
Variable lease cost	6	6	18	16
Total lease expense	$ 6,853	$ 5,929	$ 20,052	$ 17,498

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Leases - Schedule of Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$ 2,739	$ 2,112
Operating cash flows from finance leases	851	238
Financing cash flows from finance leases	4,944	3,491
ROU assets obtained in exchange for new lease liabilities:
ROU assets obtained in exchange for new lease liabilities, Finance leases	17,632	4,353
ROU assets obtained in exchange for new lease liabilities, Operating leases	$ 667	$ 2,715

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Leases - Schedule of Lease Terms and Discount Rates (Details)	Sep. 30, 2023	Sep. 30, 2022
Weighted-average remaining lease term (years):
Finance leases	3 years 7 months 24 days	3 years 3 months 29 days
Operating leases	3 years 18 days	3 years 6 months 25 days
Weighted-average discount rate:
Finance leases	5.40%	2.90%
Operating leases	4.20%	3.90%

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Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Finance lease ROU assets	$ 27,482	$ 15,264
Operating lease ROU assets	6,212	7,720
Finance lease liabilities	6,863	4,382
Operating lease liabilities	2,769	2,712
Finance lease liabilities	22,292	12,085
Operating lease liabilities	$ 3,446	$ 5,007

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Leases - Schedule of Maturities of Undiscounted Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finance Lease Liabilities, Payments
Remainder of 2023	$ 2,151
Finance lease, year one	8,071	$ 4,870
Finance lease, year two	8,376	3,629
Finance lease, year three	5,549	4,652
Finance lease, year four	5,981	2,482
Finance lease, year five		2,179
Thereafter	2,685
Thereafter		0
Total lease payments	32,813	17,812
Less: Interest	(3,658)	(1,345)
Present value of lease liabilities	29,155	16,467
Less: Current portion of lease obligation	(6,863)	(4,382)
Total long-term lease obligation	22,292	12,085
Operating Lease Liabilities, Payments Due
Remainder of 2023	765
Operating lease, year one	2,874	2,958
Operating lease, year two	1,146	2,617
Operating lease, year three	952	962
Operating lease, year four	602	879
Operating lease, year five		570
Thereafter	236
Thereafter		237
Total lease payments	6,575	8,223
Less: Interest	(360)	(504)
Present value of lease liabilities	6,215	7,719
Less: Current portion of lease obligation	(2,769)	(2,712)
Total long-term lease obligation	$ 3,446	$ 5,007

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Commitments and Contingencies - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Self-insured retention	$ 1.0
Umbrellas insurance coverage	1.3
Aggregate medical claims for umbrella insurance coverage per calendar year	$ 11.3

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Commitments and Contingencies - Schedule of Expenses and Losses Incurred but Not Reported (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Accrued automobile and workers’ compensation claims	$ 5,989	$ 5,579
Accrued medical claims	$ 505	$ 1,007