-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uv0xIhYlG9UG+RW2l1sPnj02iFpAteG8alPWbPVVBKc/1uateX3NULQSPhg7yya+ uwyzSMmR7mQ68Re6pP4ENA== 0000950129-97-004631.txt : 19971114 0000950129-97-004631.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950129-97-004631 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS RESOURCES & ENERGY INC CENTRAL INDEX KEY: 0000002178 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS) [5172] IRS NUMBER: 741753147 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07908 FILM NUMBER: 97714020 BUSINESS ADDRESS: STREET 1: 6603 KIRBYVILLE STREET 2: P O BOX 844 CITY: HOUSTON STATE: TX ZIP: 77033 BUSINESS PHONE: 7136400100 MAIL ADDRESS: STREET 1: P O BOX 844 CITY: HOUSTON STATE: TX ZIP: 77001 FORMER COMPANY: FORMER CONFORMED NAME: ADA RESOURCES INC DATE OF NAME CHANGE: 19790620 10-Q 1 ADAMS RESOURCES & ENERGY, INC. - 9/30/97 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1997 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 1-7908 ADAMS RESOURCES & ENERGY, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 74-1753147 ----------------------------- --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5 Post Oak Park, Houston, Texas 77027 ------------------------------------------------ (Address of principal executive office & Zip Code) Registrant's telephone number, including area code (713) 881-3600 ---------------- 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 X No ----- ------ The number of shares of Common Stock of the Registrant, par value $.10 per share, outstanding at October 31, 1997 was 4,215,596. 2 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine Months Ended Three Months Ended September 30, September 30, -------------------------- ------------------------- 1997 1996 1997 1996 ------------ ----------- ----------- ----------- REVENUE: Marketing $ 1,358,071 $ 1,018,959 $ 440,604 $ 364,298 Transportation 22,915 15,446 8,644 4,957 Oil & Gas 7,044 6,294 2,622 2,526 ----------- ----------- ----------- ----------- 1,388,030 1,040,699 451,870 371,781 ----------- ----------- ----------- ----------- COSTS AND EXPENSES: Operating Marketing 1,355,837 1,012,128 439,403 363,213 Transportation 18,443 13,426 6,997 4,397 Oil & Gas 1,225 1,356 431 579 Corporate general and administrative 1,618 1,863 541 560 Depreciation, depletion and amortization 4,814 5,967 2,062 1,578 ----------- ----------- ----------- ----------- 1,381,937 1,034,740 449,434 370,327 ----------- ----------- ----------- ----------- Operating earnings 6,093 5,959 2,436 1,454 OTHER INCOME (EXPENSE): Property sales and other 615 166 -- -- Interest (197) (465) (69) (93) ----------- ----------- ----------- ----------- 418 (299) (69) (93) ----------- ----------- ----------- ----------- Earnings before income taxes 6,511 5,660 2,367 1 ,361 Income tax provision Current 295 259 124 52 Deferred 2,050 1,800 675 450 ----------- ----------- ----------- ----------- 2,345 2,059 799 502 ----------- ----------- ----------- ----------- NET EARNINGS $ 4,166 $ 3,601 $ 1,568 $ 859 =========== =========== =========== =========== EARNINGS PER COMMON SHARE $ .99 $ .85 $ .37 $ .20 =========== =========== =========== =========== DIVIDENDS PER COMMON SHARE $ -- $ -- $ -- $ -- =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements. -2- 3 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Nine Months Comparison - Marketing Gross revenues for the Company's Marketing operations increased by $339,112,000 or 33%, in the comparative current period as a result of increased volumes of crude oil purchased at the wellhead and a more active crude oil trading effort. Average wellhead purchases were 78,000 barrels per day in 1997 versus 55,000 barrels per day in 1996. Marketing division operating margins before depreciation for the first nine months of 1997 were reduced to $2,234,000 versus $6,831,000 in the similar 1996 period. This result was because of a reversal of the unusually favorable market demand conditions that existed in 1996. During the first half of 1996, and especially in the second quarter of 1996, there were a number of spot market shortages of crude oil that served to temporarily increase the Company's margins. - Transportation Transportation revenues and operating earnings before depreciation increased as follows:
Percentage 1997 1996 Increase ----------- ----------- -------- Revenues $ 22,915,000 $ 15,446,000 48% Operating earnings before depreciation $ 4,472,000 $ 2,020,000 121%
The revenue increase resulted from generally strong customer demand during the current quarter. Improved customer demand is consistent with the generally strong United States economy. Operating earnings improved as a direct result of the increased demand. Because of the fixed cost component of the company's transportation operation, on a percentage basis, operating earnings will improve at a faster rate than revenues. - Oil and Gas Oil and gas revenues increased by 11% and operating earnings before depreciation increased by 17% to $5,819,000 for the comparative current nine month period as a result of increased natural gas prices in the first quarter of 1997. -3- 4 Volumes and prices compare as follows:
Nine Months Ended Three Months Ended ----------------- ------------------ 1997 1996 1997 1996 ----- ---- ---- ---- Crude oil Volume 49,300 Bbls. 64,200 Bbls. 17,800 Bbls. 19,800 Bbls. Average price $20.09/ Bbl. $ 19.17/ Bbl. $ 17.86/ Bbl. $ 19.67/ Bbl. Natural gas Volume 2,575,000 Mcf's 2,470,000 Mcf's 1,075,000 Mcf's 950,000 Mcf's Average price, includes value of associated gas liquids $ 2.33/ Mcf $ 2.03/ Mcf $ 2.09/ Mcf $ 2.15/ Mcf
- Other income (expense) The provision for depreciation, depletion and amortization is reduced for the first nine months of 1997 because of a reduced capitalized cost base. The large provision for depreciation, depletion and amortization in 1996 served to reduce the level of capitalized costs to be amortized in 1997 and future years. Property sales and other income in 1997 include a $400,000 recovery from an insurance carrier for prior year overcharges and a $215,000 gain realized on the sale of twenty-one truck tractors. Seven tank trailers were sold in 1996 for a $166,000 gain. Interest expense is reduced in 1997 because the Company used its excess cash flow to reduce long term debt during the first eight months of 1997. - Three Months Comparisons Comparisons for the three month period ended September 30, 1997 are consistent with the discussions for the nine month period except oil and gas property additions during 1997 served to boost the third quarter 1997 provision for depreciation. Liquidity and Capital Resources During the first nine months of 1997, the Company invested $8,495,000 in property equipment additions with $3,769,000 going toward oil and gas drilling efforts, $1,411,000 invested toward the construction of an offshore Gulf of Mexico crude oil pipeline, and the remainder for trucks and other marketing and transportation equipment items. Funding for these investments was derived from the Company generating $10,215,000 of working capital funds. The $1,720,000 of excess cash flow generated was as additions to working capital. Refer to the "Liquidity and Capital Resources" section of the Company's Annual Report on Form 10-K for the year ended December 31, 1996 for additional discussion of the Company's bank relationships, tax carryforwards and other matters. -4- 5 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS)
September 30, December 31, 1997 1996 ------------ ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents................................... $ 5,333 $ 3,782 Accounts receivable, net.................................... 80,842 80,238 Inventories................................................. 4,096 4,867 Prepaid and other........................................... 894 1,116 Deferred income taxes....................................... 25 1,475 ------------ ----------- Total current assets.......................... 91,190 91,478 ------------ ----------- Property and equipment........................................ 51,158 43,607 Less - accumulated depreciation, depletion and amortization........................... (29,448) (25,440) ------------ ----------- 21,710 18,167 ------------ ----------- Other assets.................................................. 1,284 1,237 ------------ ----------- $ 114,184 $ 110,882 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable............................................ $ 75,871 $ 77,449 Accrued and other liabilities............................... 2,634 3,481 Current maturities of long-term debt........................ 71 64 ------------ ----------- Total current liabilities............................ 78,576 80,994 Long-term debt, less current maturities....................... 7,775 6,171 Other liabilities............................................. 845 957 ------------ ----------- 87,196 88,122 Shareholders' equity: Preferred stock - $1.00 par value, 960,000 shares authorized, none outstanding............................ - - Common stock - $.10 par value, 7,500,000 shares authorized, 4,215,596 and 4,203,346 shares outstanding respectively......................... 422 420 Contributed capital......................................... 11,688 11,628 Retained earnings since December 31, 1992................... 14,878 10,712 ------------ ----------- Total shareholders' equity .......................... 26,988 22,760 ------------ ----------- $ 114,184 $ 110,882 ============ ===========
The accompanying notes are an integral part of these financial statements. -5- 6 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS)
Nine Months Ended September 30, --------------------------- 1997 1996 ----------- ---------- CASH PROVIDED (USED) BY OPERATIONS: Net earnings .................................................................. $ 4,166 $ 3,601 Items of income not requiring (providing) cash - Depreciation, depletion and amortization .................................... 4,814 5,967 Deferred income tax provision ............................................... 1,450 1,800 Gain on sale of properties................................................... (215) (166) Other, net .................................................................. (231) (481) Decrease (increase) in accounts receivable .................................... (604) (29,577) Decrease (increase) in inventories ............................................ 771 (631) Decrease (increase) in prepaid and other ...................................... 222 514 Increase (decrease) in accounts payable ....................................... (1,578) 28,565 Increase (decrease) in accrued liabilities .................................... (847) 378 ----------- ---------- Net cash provided (required) by operating activities ........................ 7,948 9,970 ---------- ---------- INVESTING ACTIVITIES: Property and equipment additions .............................................. (8,495) (4,086) Proceeds from property sales .................................................. 425 589 ---------- ---------- Net cash provided by (used in) investing activities ......................... (8,070) (3,497) ---------- ----------- FINANCING ACTIVITIES: Borrowing from bank.............................................................. 1,675 - Repayment of debt................................................................ (64) (6,304) Sales of stock ................................................................ 62 16 ---------- ---------- Net cash provided by (used in) financing activities ......................... 1,673 (6,288) ---------- ----------- Increase (decrease) in cash and cash equivalents................................. 1,551 185 Cash at beginning of period...................................................... 3,782 4,037 ---------- ---------- Cash at end of period............................................................ $ 5,333 $ 4,222 ========== ========== Supplemental disclosure of cash flow information: Interest paid during the period ............................................... $ 197 $ 508 ========== ========== Income taxes paid during the period............................................ $ 867 $ 233 ========== ==========
The accompanying notes are an integral part of these financial statements. -6- 7 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Basis of Presentation The accompanying condensed financial statements are unaudited but, in the opinion of the Company's management, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of financial position at September 30, 1997 and December 31, 1996 and results of operations and cash flows for the nine months ended September 30, 1997 and 1996. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations, although the Company believes the disclosures made are adequate to make the information presented not misleading. It is suggested these condensed financial statements be read in conjunction with the financial statements, and the notes thereto, included in the Company's latest annual report on Form 10-K. The interim statement of operations is not necessarily indicative of results to be expected for a full year. -7- 8 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. - None Item 2. - None Item 3. - None Item 4. - None Item 6. Exhibits and Reports on Form 8K - ---------------------------------------- a. Exhibits - None. b. Reports on Form 8-K - None. -8- 9 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 6, 1997 By /s/ K.S. Adams,Jr. --------------------- ------------------------ K. S. Adams, Jr. Chief Executive Officer By /s/ Richard B. Abshire ------------------------ Richard B. Abshire Chief Financial Officer -9- 10 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS SEP-30-1997 SEP-30-1997 5,333 0 80,950 (108) 4,096 91,190 51,158 (29,448) 114,184 78,576 7,775 0 0 422 26,566 114,184 1,388,030 1,388,645 1,375,505 1,381,937 0 0 197 6,511 2,345 4,166 0 0 0 4,166 .99 .99
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