-----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, LAIKwJqHNAZ8xwSGngieQsiOhyORR5mkD6RHDpleQAt5qvZ8YLMzaptlG9LbqkHX WG+b9g9U/U2iqwy9iJOBDQ== 0000950129-95-001425.txt : 19951119 0000950129-95-001425.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950129-95-001425 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 1934 Act SEC FILE NUMBER: 001-07908 FILM NUMBER: 95590438 BUSINESS ADDRESS: STREET 1: 6910 FANNIN STREET 2: P O BOX 844 CITY: HOUSTON STATE: TX ZIP: 77001 BUSINESS PHONE: 7137979966 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. DATED 09/30/95 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, 1995 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.) 6910 Fannin, Houston, Texas 77030 (Address of principal executive office & Zip Code) Registrant's telephone number, including area code (713) 797-9966 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 November 4, 1995 was 4,197,597. 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, ---------------------- ----------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Revenues: Marketing . . . . . . . . . . . . . . . . . . $541,163 $474,473 $201,921 $190,729 Transportation . . . . . . . . . . . . . . . . 16,059 15,423 5,056 5,432 Oil and gas . . . . . . . . . . . . . . . . . . 5,267 2,165 1,591 877 -------- -------- -------- -------- 562,489 492,061 208,568 197,038 -------- -------- -------- -------- Costs and expenses: Operating Marketing . . . . . . . . . . . . . . . . . . 539,016 472,351 201,218 189,975 Transportation . . . . . . . . . . . . . . . 13,947 12,820 4,369 4,561 Oil and gas . . . . . . . . . . . . . . . . . 1,279 650 515 260 Corporate general and administrative . . . . . . . . . . . . . . . 1,580 1,557 526 551 Depreciation, depletion and amortization . . . . . . . . . . . . . . . . 5,791 1,296 3,071 464 -------- -------- -------- -------- 561,613 488,674 209,699 195,811 -------- -------- -------- -------- Operating earnings (loss) . . . . . . . . . . . . 876 3,387 (1,131) 1,227 Other income (expense): Discontinued coal operations . . . . . . . . . 372 660 372 - Gain on sale of equipment . . . . . . . . . . 545 - 545 - Interest . . . . . . . . . . . . . . . . . . . (339) (191) (123) (99) -------- -------- -------- -------- 578 469 794 (99) -------- -------- -------- -------- Earnings (loss) before income taxes . . . . . . . 1,454 3,856 (337) 1,128 Income tax provision (benefit) Current . . . . . . . . . . . . . . . . . . . . 68 132 (11) 48 Deferred . . . . . . . . . . . . . . . . . . . 250 1,325 (350) 375 -------- -------- -------- -------- 318 1,457 (361) 423 -------- -------- -------- -------- Net earnings . . . . . . . . . . . . . . . . . . $ 1,136 $ 2,399 $ 24 $ 705 ======== ======== ======== ======== Earnings per common share . . . . . . . . . . . . $ .27 $ .57 $ - $ .17 ======== ======== ======== ======== 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 $66,690,000, or 14%, in the comparative current period as a result of generally higher overall world crude oil prices. In contrast to higher crude oil prices, the Company's purchases of crude oil at the wellhead remained consistent at approximately 45,000 barrels per day. The Company's strategy for crude oil marketing is to link purchase and sales contracts to established quotations (postings) that move with general market trends. In this manner, profitability is based on the spread between the going price paid to suppliers at the wellhead and the price received from customers at various delivery points less transportation. Thus, the Company is substantially insulated from the impact of general movements in world crude oil prices. Because of the Company's crude oil marketing strategy, higher world crude oil prices had little or no impact on current operating margins. Marketing division operating margins before depreciation for the first nine months of 1995 were $2,147,000 versus $2,122,000 in the similar 1994 period. - Transportation Transportation revenues have remained fairly consistent between the comparitive nine month periods. However, operating margins before depreciation decreased by 19% to $2,112,000 because the Company's cost structure has increased while trucking rates have remained constant. Increased costs are attributable to competitive pressures to increase driver wages and improve the level of service. In addition, the Company is in the process of increasing its sales volumes to better match its expanded terminal facility and fleet capacity. As an improved balance between sales volumes and service capacity is obtained, profitability should improve dramatically. - Oil and Gas Oil and gas revenues and operating earnings before depreciation and depletion doubled in the current period to $5,267,000 and $3,988,000 respectively as a direct result of increased oil and gas production volumes stemming from the Company's recent drilling efforts. Volumes and prices compare as follows:
Nine Months Ended Three Months Ended September 30, September 30, ----------------------------- ------------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------- Crude oil Volume 83,400 Bbls. 46,450 Bbls. 24,600 Bbls. 18,300 Bbls. Average price $ 16.09/Bbl. $ 14.55/Bbl. $ 15.98/Bbl. $ 16.23/Bbl. Natural gas Volume 2,430,000 Mcf 660,000 Mcf 810,000 Mcf 245,000 Mcf Average price, includes value of associated gas liquids $ 1.51 Mcf $ 2.07 Mcf $ 1.45 Mcf $ 2.21 Mcf
3 4 - Depreciation, depletion and amortization The provision for depreciation, depletion and amortization is increased in the current period with increased capital costs associated with the Company's recent oil and gas drilling activity. In addition, during the third quarter 1995, depressed natural gas prices coupled with marginal results from recent drilling efforts caused the Company to record a $900,000 write down of its oil and gas leasehold position. - Other income (expense) During the third quarter of 1995, the Company substantially completed its coal land reclamation obligations and obtained general approval from the State of Kentucky. As a result, the Company reduced its estimated liability for future coal related costs by $372,000. The Company also recognized a $545,000 gain during the third quarter of 1995, when nine tractors and 22 trailer were sold upon the expiration of their lease term. Interest expense has increased because of the Company's increase in its level of debt during 1994 to finance its drilling activity. - Income tax provision During the third quarter of 1995, the Company adjusted its estimated effective tax rate to reflect the recognition of approximately $200,000 of depletion tax benefits which the Company expects to realize. Three Month Comparison Variations for the comparative three month period ended September 30, 1995 are consistent with the discussion above. Liquidity and Capital Resources During the first nine months of 1995, the Company invested $6,068,000 in property equipment additions with the majority of the investment ($4.3 million) going towards oil and gas drilling efforts. Funding for these investments was from the Company generating $7,177,000 of working capital funds, defined as the sum of net earnings plus the non-cash provisions for depreciation and deferred income taxes not owing as a result of the Company's tax loss carryforward position. Due to depressed natural gas prices combined with marginal results from the Company's most recent drilling efforts, the Company has slowed its rate of investment in new oil and gas drilling. In this manner, the Company's historic balance between working capital generated from operations and capital spending is maintained. Refer to the "Liquidity and Capital Resources" section of the Company's Annual Report on Form 10-K for the year ended December 31, 1994 for additional discussion of the Company's bank relationships, tax loss carryforwards and other matters. 4 5 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands)
September 30, December 31, 1995 1994 ------------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 2,412 $ 2,695 Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . 54,251 35,952 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,956 2,218 Prepaid and other . . . . . . . . . . . . . . . . . . . . . . . . . 947 552 ----------- ----------- Total current assets . . . . . . . . . . . . . . . . . 60,566 41,417 ----------- ----------- Property and equipment . . . . . . . . . . . . . . . . . . . . . . . 40,295 35,230 Less - accumulated depreciation, depletion and amortization . . . . . . . . . . . . . . . (20,352) (15,564) ----------- ----------- 19,943 19,666 ----------- ----------- Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . 1,840 725 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846 493 ----------- ----------- $ 83,195 $ 62,301 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,131 $ 35,420 Accrued and other liabilities . . . . . . . . . . . . . . . . . . . 2,173 2,387 Current maturities of long-term debt . . . . . . . . . . . . . . . 1,116 653 ----------- ----------- Total current liabilities . . . . . . . . . . . . . . 56,420 38,460 Long-term debt, less current maturities . . . . . . . . . . . . . . . 10,403 9,263 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 574 1,345 ----------- ----------- 67,397 49,068 ----------- ----------- Shareholders' equity: Common stock - $.10 par value, 7,500,000 shares authorized, 4,197,597 shares outstanding . . . . . . . 420 418 Contributed capital . . . . . . . . . . . . . . . . . . . . . . . . 9,897 8,470 Retained earnings, after eliminating $13,931,000 of accumulated deficit on December 31, 1992 . . . . . . . . . . 5,481 4,345 ----------- ----------- Total shareholders' equity . . . . . . . . . . . . . 15,798 13,233 ----------- ----------- $ 83,195 $ 62,301 =========== ===========
5 6 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (In thousands)
Total Common Contributed Retained Shareholders' Stock Captial Earnings Equity ------- ------------ -------- ------------- BALANCE, December 31, 1993 $417 $8,427 $1,452 $10,296 Stock options exercised . . . . . . . . . . 1 43 - 44 Net earnings . . . . . . . . . . . . . . . - - 2,399 2,399 ---- ------ ------ ------- BALANCE, September 30, 1994 . . . . . . . . . . . $418 $8,470 $3,851 $12,739 ==== ====== ====== ======= BALANCE, December 31, 1994 $418 $8,470 $4,345 $13,233 Stock options exercised . . . . . . . . . . 2 62 - 64 Reduction in deferred tax valuation allowance . . . . . . . . . . . - 1,365 - 1,365 Net earnings . . . . . . . . . . . . . . . - - 1,136 1,136 ---- ------ ------ ------- BALANCE, September 30, 1995 . . . . . . . . . . . $420 $9,897 $5,481 $15,798 ==== ====== ====== =======
The accompanying notes are an integral part of these financial statements. 6 7 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands)
Nine Months Ended September 30, --------------------------- 1995 1994 --------- --------- CASH PROVIDED (USED) BY OPERATIONS: Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,136 $ 2,399 Items of income not requiring (providing) cash - Depreciation, depletion and amortization . . . . . . . . . . . . . 5,791 1,296 Deferred income tax provision . . . . . . . . . . . . . . . . . . . 250 1,325 Gain on sale of equipment . . . . . . . . . . . . . . . . . . . . . (545) - Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,124) 887 Decrease (increase) in accounts receivable . . . . . . . . . . . . . (18,299) (1,751) Decrease (increase) in inventories . . . . . . . . . . . . . . . . . (738) (617) Decrease (increase) in prepaid and other . . . . . . . . . . . . . . (395) (40) Increase (decrease) in accounts payable . . . . . . . . . . . . . . . 17,711 2,236 Increase (decrease) in accrued liabilities . . . . . . . . . . . . . (214) (1,172) --------- -------- Net cash provided (required) by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . 3,573 4,563 --------- -------- INVESTING ACTIVITIES: Property and equipment additions . . . . . . . . . . . . . . . . . . (6,068) (8,704) Proceeds from property sales . . . . . . . . . . . . . . . . . . . . 545 504 --------- -------- Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (5,523) (8,200) --------- -------- FINANCING ACTIVITIES: Borrowings from bank . . . . . . . . . . . . . . . . . . . . . . . . 2,065 5,567 Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . (462) (375) Sales of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 44 --------- -------- Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,667 5,236 --------- -------- Increase (decrease) in cash . . . . . . . . . . . . . . . . . . . . . . (283) 1,599 Cash at beginning of period . . . . . . . . . . . . . . . . . . . . . . 2,695 3,323 --------- -------- Cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,412 $ 4,922 ========= ======== Supplemental disclosure of cash flow information: Interest paid during the period . . . . . . . . . . . . . . . . . . $ 665 $ 252 ========= ======== Income taxes paid during the period . . . . . . . . . . . . . . . . $ 226 $ 87 ========= ========
The accompanying notes are an integral part of these financial statements. 7 8 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, 1995 and results of operations and cash flows for the nine months ended September 30, 1995 and 1994. 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. 8 9 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. - None Item 2. - None Item 3. - None Item 4. - None Item 6. - None 9 10 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 4, 1995 By: K. S. ADAMS, JR. ---------------------- ------------------------------------ K. S. Adams, Jr. Chief Executive Officer RICHARD B. ABSHIRE ------------------------------------ Richard B. Abshire Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 ADAMS RESOURCES & ENERGY INC. FINNCIAL DATA TABLE PURSUANT TO ARTICLE 5 OF REGULATION SX 9-MOS SEP-30-1995 SEP-30-1995 2,412 0 54,464 (213) 2,956 60,566 40,295 (20,352) 83,195 56,420 10,403 421 0 0 15,377 83,195 562,489 563,406 554,242 561,613 0 0 339 1,454 318 1,136 0 0 0 1,136 .27 .27
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