-----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, WMSeDbT+aAdFHgthDTTmnHjpbI8ozKK1WQMDGx4zBTRi9aiN/9eG1MRhJBdbuVFy pFUcvnFpBx/Ot0kSbidElg== 0000950129-96-002893.txt : 19961113 0000950129-96-002893.hdr.sgml : 19961113 ACCESSION NUMBER: 0000950129-96-002893 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 96660014 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. - 09/30/96 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, 1996 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, Suite 2700, 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, 1996 was 4,203,098. -1- 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, ---------------------------------- --------------------------------- 1996 1995 1996 1995 -------------- -------------- -------------- ------------- REVENUE: Marketing $ 1,018,959 $ 541,163 $ 364,298 $ 201,921 Transportation 15,446 16,059 4,957 5,056 Oil and gas 6,294 5,267 2,526 1,591 -------------- -------------- -------------- -------------- 1,040,699 562,489 371,781 208,568 -------------- -------------- -------------- -------------- COSTS AND EXPENSES: Operating Marketing 1,012,128 539,016 363,213 201,218 Transportation 13,426 13,947 4,397 4,369 Oil and gas 1,356 1,279 579 515 Corporate general and administrative 1,863 1,580 560 526 Depreciation, depletion and amortization 5,967 5,791 1,578 3,071 -------------- -------------- -------------- -------------- 1,034,740 561,613 370,327 209,699 -------------- -------------- -------------- -------------- Operating earnings (loss) 5,959 876 1,454 (1,131) OTHER INCOME (EXPENSE): Property sales and other 166 917 - 917 Interest (465) (339) (93) (123) -------------- -------------- -------------- -------------- (299) 578 (93) 794 -------------- -------------- -------------- -------------- Earnings (loss) before income taxes 5,660 1,454 1,361 (337) Income tax provision (benefit) Current 259 68 52 (11) Deferred 1,800 250 450 (350) -------------- -------------- -------------- -------------- 2,059 318 502 (361) -------------- -------------- -------------- -------------- NET EARNINGS $ 3,601 $ 1,136 $ 859 $ 24 ============== ============== ============== ============== EARNINGS PER COMMON SHARE $ .85 $ .27 $ .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 $477,796,000, or 88%, in the comparative current period as a result of (i) increased overall world crude oil prices, (ii) increased volumes of crude purchased at the wellhead, and (iii) a more active crude oil trading effort. Average crude oil prices increased approximately $3.00 per barrel for the comparative period while average wellhead purchases increased to 55,000 barrels per day in 1996 versus 45,000 barrels per day in 1995. Marketing division operating margins before depreciation for the first nine months of 1996 were $6,831,000 versus $2,147,000 in the similar 1995 period, partially as a result of the combination of events discussed above. The most significant factor affecting 1996 operating margins, however, was a severe crude oil shortage situation that existed in the mid-continent region of the United States. As a supplier of crude oil to the region, this demand condition served to temporarily improve the Company's margins. As crude oil markets returned to a more normal balance between supply and demand during the third quarter of 1996, the Company's level of Marketing earnings returned to its historic pattern. - Transportation Transportation revenues and earnings experienced little variation between the comparative periods as market conditions remained consistent. - Oil and Gas Oil and gas revenues and operating earnings before depreciation increased in the comparative current period as a result of increased natural gas volumes and prices. Volumes and prices compare as follows:
NINE MONTHS ENDED THREE MONTHS ENDED ----------------- ------------------ 1996 1995 1996 1995 ----------------- ----------------- ----------------- ----------------- Crude Oil Volume 64,200 Bbls. 83,400 Bbls. 19,800 Bbls. 24,600 Bbls. Average price $19.17/ Bbls. $16.09/ Bbl. $19.67/Bbls. $15.98/Bbl. Natural gas Volume 2,470,000 Mcf's 2,430,000 Mcf's 950,000 Mcf's 810,000 Mcf's Average price, includes value of associated gas liquids $2.03/Mcf $1.51/Mcf $2.15/Mcf $1.45/Mcf
- 3 - 4 - Other The current provision for depreciation, depletion and amortization includes a $1,167,000 asset impairment recognized by the Company during the second quarter of 1996 on certain refined product marketing facilities and equipment. The impairment was recorded because of continued operating and cash flow losses associated with these assets. Property sales and other earnings of $166,000 resulted from a gain realized on the sale of seven tank trailers during the second quarter of 1996. Three Month Comparison Variations in operating results for the comparative three month period ended September 30, 1996, are consistent with the discussion above, except in the third quarter of 1995, the Company recorded a $900,000 write down of its oil and gas leasehold position as additional depreciation, depletion and amortization. This item did not recur in 1996. -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 trailers were sold upon the expiration of their lease term. -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 which the company expects to realize. Liquidity and Capital Resources During the first nine months of 1996, the Company invested $4,086,000 in property equipment additions with $1,975,000 of such investments going towards oil and gas drilling efforts. Funding for these investments was derived from the Company generating $11,202,000 of working capital, defined generally as the sum of net cash 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. The $7,116,000 of excess cash flow generated was utilized primarily to reduce bank debt. Refer to the "Liquidity and Capital Resources" section of the Company's Annual Report on Form 10-K for the year ended December 31, 1995 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, 1996 1995 ------------------ ---------------- ASSETS (unaudited) CURRENT ASSETS Cash and cash equivalents $ 4,222 $ 4,037 Accounts receivable, net 80,061 50,484 Inventories 3,808 3,177 Prepaid and other 506 1,020 ------------------ ------------------ Total Current Assets 88,597 58,718 ------------------ ------------------ Property and equipment 41,875 40,011 Less - accumulated depreciation, depletion and amortization (25,398) (21,067) ------------------ ------------------ 16,477 18,944 ------------------ ------------------ Deferred income taxes 265 2,065 Other assets 1,395 705 ------------------ ------------------ $ 106,734 $ 80,432 ================== ================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 78,102 $ 49,537 Accrued and other liabilities 2,794 2,416 Current maturities of long-term debt 58 1,650 ------------------ ------------------ Total current liabilities 80,954 53,603 Long-term debt, less current maturities 5,877 10,589 Other liabilities 608 562 ------------------ ------------------ $ 87,439 $ 64,754 ------------------ ------------------ SHAREHOLDERS' EQUITY Common stock - $.10 par value, 7,500,000 shares authorized; 4,203,098 and 4,197,598 shares outstanding, respectively 420 420 Contributed capital 9,911 9,895 Retained earnings, after eliminating $13,931,000 of accumulated deficit on December 31, 1992 8,964 5,363 ------------------ ------------------ Total shareholders' equity 19,295 15,678 ------------------ ------------------ $ 106,734 $ 80,432 ================== ==================
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, ----------------------------------- 1996 1995 --------------- -------------- CASH PROVIDED BY OPERATIONS Net earnings $ 3,601 $ 1,136 Items of income not requiring (providing) cash - Depreciation, depletion and amortization 5,967 5,791 Deferred income tax provision 1,800 250 Gain on sale of properties (166) (545) Other, net (481) (1,124) Decrease (increase) in accounts receivable (29,577) (18,299) Decrease (increase) in inventories (631) (738) Decrease (increase) in prepaid and other 514 (395) Increase (decrease) in accounts payable 28,565 17,711 Increase (decrease) in accrued liabilities 378 (214) -------------- -------------- Net cash provided by operating activities 9,970 3,573 -------------- -------------- INVESTING ACTIVITIES Property and equipment additions (4,086) (6,068) Proceeds from property sales 589 545 -------------- -------------- Net cash (required) by investing activities (3,497) (5,523) -------------- -------------- FINANCING ACTIVITIES Borrowings from bank - 2,065 Repayment of debt (6,304) (462) Sales of stock 16 64 -------------- -------------- Net cash provided by (used in) financing activities (6,288) 1,667 -------------- -------------- Increase (decrease) in cash 185 (283) Cash at beginning of period 4,037 2,695 -------------- -------------- Cash at end of period $ 4,222 $ 2,412 ============== ============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid during the period $ 508 $ 665 ============== ============== Income taxes paid during the period $ 233 $ 226 ============== ==============
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, 1996 and December 31, 1995 and results of operations and cash flows for the nine months ended September 30, 1996 and 1995. 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 that 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 5. - None Item 6. - None - 8 - 9 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 4, 1996 By: K. S. ADAMS, JR. --------------------------- --------------------------- K. S. Adams, Jr. Chief Executive Officer RICHARD B. ABSHIRE --------------------------- Richard B. Abshire Chief Financial Officer - 9 - 10 EXHIBIT INDEX 27 -- Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS SEP-30-1996 SEP-30-1996 4,222 0 80,191 (130) 3,808 88,597 41,875 (25,398) 106,734 80,954 5,877 420 0 0 18,875 106,734 1,040,699 1,040,865 1,026,910 1,034,740 0 0 465 5,660 2,059 3,601 0 0 0 3,601 .85 .85
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