-----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, Vx8ph4Ixv0XnHKTX5V3GNpJmS3k4l9aRM9hncuoPsRcS8QC+loiSt7TacnA1gE3S c0eAonJ0r2SDBkPJT1crsg== 0000950129-97-003201.txt : 19970813 0000950129-97-003201.hdr.sgml : 19970813 ACCESSION NUMBER: 0000950129-97-003201 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 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: 97656422 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. - 6/30/97 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 June 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 July 31, 1997 was 4,213,596. 2 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Six Months Ended Three Months Ended June 30, June 30, ------------------------ ------------------------ 1997 1996 1997 1996 --------- --------- --------- --------- REVENUE: Marketing $ 917,467 $ 654,661 $ 432,855 $ 376,458 Transportation 14,271 10,489 7,581 5,274 Oil & Gas 4,422 3,768 1,579 2,285 --------- --------- --------- --------- 936,160 668,918 442,015 384,017 --------- --------- --------- --------- COSTS AND EXPENSES: Operating Marketing 916,434 648,915 432,887 372,435 Transportation 11,446 9,029 6,153 4,521 Oil & Gas 794 777 359 393 Corporate general and administrative 1,077 1,303 541 610 Depreciation, depletion and amortization 2,752 4,389 1,139 3,144 --------- --------- --------- --------- 932,503 664,413 441,079 381,103 --------- --------- --------- --------- Operating earnings 3,657 4,505 936 2,914 OTHER INCOME (EXPENSE): Property sales and other 615 166 261 7 Interest (128) (372) (41) (190) --------- --------- --------- --------- 487 (206) 220 (183) --------- --------- --------- --------- Earnings before income taxes 4,144 4,299 1,156 2,731 Income tax provision Current 171 207 40 124 Deferred 1,375 1,350 400 900 --------- --------- --------- --------- 1,546 1,557 440 1,024 --------- --------- --------- --------- NET EARNINGS $ 2,598 $ 2,742 $ 716 $ 1,707 ========= ========= ========= ========= EARNINGS PER COMMON SHARE $ .62 $ .65 $ .17 $ .40 ========= ========= ========= ========= 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 Six Months Comparison - Marketing Gross revenues for the Company's Marketing operations increased by $262,806,000 or 40%, in the comparative current period as a result of (a) increased average crude oil prices, (b) increased volumes of crude oil purchased at the wellhead, and (c) more active crude oil trading effort. Compared to last year's first half, average crude oil sales prices were increased by approximately 17% in 1997. Average wellhead purchases were 60,000 barrels per day in 1997 versus 55,000 barrels per day in 1996. Marketing division operating margins before depreciation for the first six months of 1997 were reduced to $1,033,000 versus $5,746,000 in the similar 1996 period. This result was because of a reversal of the unusually favorable market demand conditions that existed in 1996. During 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:
First Half First Half Percentage 1997 1996 Increase ----------- ----------- ----------- Revenues $14,271,000 $10,489,000 36% Operating earnings before depreciation $ 2,825,000 $ 1,460,000 93%
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 and operating earnings increased for the comparative six month period primarily as a result of increased natural gas prices and volumes in the first quarter of 1997. Natural gas production volumes increased as a direct result of the Company's drilling efforts during 1996. Such volume increases reduced in the second quarter of 1997, however, due to normal declines. -3- 4 Volumes and prices compare as follows:
Six Months Ended Three Months Ended ---------------- ------------------ 1997 1996 1997 1996 ----- ---- ---- ---- Crude oil Volume 7,500 Bbls. 44,440 Bbls. 17,500 Bbls. 24,500 Bbls. Average price $21.93/ Bbl. $ 18.77/ Bbl. $20.65/ Bbl. $ 19.72/ Bbl. Natural gas Volume 1,750,000 Mcf's 1,520,000 Mcf's 830,000 Mcf's 900,000 Mcf's Average price, includes value of associated gas liquids $ 2.49/ Mcf $ 1.91/ Mcf $ 1.78/ Mcf $ 2.00/ Mcf
- Other income (expense) The provision for depreciation, depletion and amortization is reduced in the current period 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 $401,000 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. - Three Months Comparisons Comparisons for the three month period ended June 30, 1997 are consistent with the discussions for the six month period. Liquidity and Capital Resources During the first six months of 1997, the Company invested $4,156,000 in property equipment additions with $2,499,000 going towards oil and gas drilling efforts and the remainder for various marketing and transportation equipment items. Funding for these investments was derived from the Company generating $5,860,000 of working capital funds. The $1,709,000 of excess cash flow generated was utilized 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, 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)
June 30, December 31, 1997 1996 --------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents .......................... $ 3,797 $ 3,782 Accounts receivable, net ........................... 63,522 80,238 Inventories ........................................ 4,106 4,867 Prepaid and other .................................. 918 1,116 Deferred income taxes .............................. 750 1,475 --------- --------- Total current assets ................. 73,093 91,478 --------- --------- Property and equipment ............................... 47,477 43,607 Less - accumulated depreciation, depletion and amortization .................. (28,044) (25,440) --------- --------- 19,433 18,167 --------- --------- Other assets ......................................... 1,277 1,237 --------- --------- $ 93,803 $ 110,882 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable ................................... $ 61,875 $ 77,449 Accrued and other liabilities ...................... 2,772 3,481 Current maturities of long-term debt ............... 64 64 --------- --------- Total current liabilities ................... 64,711 80,994 Long-term debt, less current maturities .............. 2,840 6,171 Other liabilities .................................... 851 957 --------- --------- 68,402 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, 4,213,596 and 4,203,346 shares outstanding respectively ................ 421 420 Contributed capital ................................ 11,670 11,628 Retained earnings since December 31, 1992 .......... 13,310 10,712 --------- --------- Total shareholders' equity .................. 25,401 22,760 --------- --------- $ 93,803 $ 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)
Six Months Ended June 30, ---------------------- 1997 1996 -------- -------- CASH PROVIDED (USED) BY OPERATIONS: Net earnings ............................................. $ 2,598 $ 2,742 Items of income not requiring (providing) cash - Depreciation, depletion and amortization ............... 2,752 4,389 Deferred income tax provision .......................... 725 1,350 Gain on sale of properties ............................. (215) (166) Other, net ............................................. (218) (478) Decrease (increase) in accounts receivable ............... 16,716 (18,305) Decrease (increase) in inventories ....................... 761 (276) Decrease (increase) in prepaid and other ................. 198 17 Increase (decrease) in accounts payable .................. (15,574) 17,256 Increase (decrease) in accrued liabilities ............... (709) (534) -------- -------- Net cash provided (required) by operating activities ... 7,034 5,995 -------- -------- INVESTING ACTIVITIES: Property and equipment additions ......................... (4,156) (3,370) Proceeds from property sales ............................. 425 589 -------- -------- Net cash provided by (used in) investing activities .... (3,731) (2,781) -------- -------- FINANCING ACTIVITIES: Repayment of debt ........................................ (3,331) (4,745) Sales of stock ........................................... 43 -- -------- -------- Net cash provided by (used in) financing activities .... (3,288) (4,745) -------- -------- Increase (decrease) in cash and cash equivalents ........... 15 (1,531) Cash at beginning of period ................................ 3,782 4,037 -------- -------- Cash at end of period ...................................... $ 3,797 $ 2,506 ======== ======== Supplemental disclosure of cash flow information: Interest paid during the period .......................... $ 87 $ 388 ======== ======== Income taxes paid during the period ...................... $ 867 $ 132 ======== ========
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 June 30, 1997 and December 31, 1996 and results of operations and cash flows for the three months ended June 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 8-K 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: August 12, 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 NUMBER DESCRIPTION - ------- ----------- 27 Financial Data Schedule EX-27 2 FIANANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1997 JUN-30-1997 3,797 0 63,638 (116) 4,106 73,093 47,477 (28,044) 93,803 64,711 2,840 0 0 421 24,980 93,803 936,160 936,160 931,426 931,888 0 0 128 4,144 1,546 2,598 0 0 0 2,598 .62 .62
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