0000002178FALSE00000021782023-11-082023-11-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2023

ADAMS RESOURCES & ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-7908
74-1753147
(State or other jurisdiction(Commission
(IRS Employer
of incorporation)File Number)
Identification No.)
17 South Briar Hollow Lane, Suite 100, Houston, Texas
77027
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (713) 881-3600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.10 par valueAENYSE American LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐

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Item 2.02 Results of Operations and Financial Condition.

On November 8, 2023, Adams Resources & Energy, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 2023. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is hereby incorporated herein by reference.

The information provided in this Item 2.02 (including the press release attached as Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, except to the extent that such filing incorporates by reference any or all of such information by express reference thereto.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
99.1
104Cover Page Interactive Data File — the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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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 hereunto duly authorized.

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

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Exhibit 99.1
FOR IMMEDIATE RELEASE
adamslogoa03a.jpg

ADAMS RESOURCES & ENERGY, INC. ANNOUNCES
THIRD QUARTER 2023 RESULTS AND DECLARES QUARTERLY DIVIDEND

Houston, Texas (Wednesday, November 8, 2023) -- Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”), a company engaged in marketing, transportation, logistics and repurposing of crude oil, refined products and dry bulk materials, today announced operational and financial results for the quarter ended September 30, 2023. The Company also declared a quarterly cash dividend of $0.24 per common share.

Q3 2023 Financial Summary

Total revenue of $760.6 million, versus $852.9 million for the third quarter of 2022.

Net earnings of $2.3 million, or $0.88 per diluted common share, compared to earnings of $0.8 million, or $0.32 per common share for the second quarter of 2023 and net earnings of $2.2 million, or $0.50 per diluted common share for the third quarter of 2022.

Net cash provided by operating activities of $11.4 million for the third quarter of 2023, a decrease of $28.6 million from the prior-year quarter. This decrease was primarily driven by the timing of payments and receipts from crude oil customers and changes in inventory due to fluctuations in crude oil pricing and barrels held.

Adjusted cash flow of $4.8 million for the third quarter of 2023, compared to $7.1 million for the second quarter of 2023 and $12.6 million in the prior-year.

Cash and cash equivalents were $16.3 million as of September 30, 2023, versus $9.0 million at June 30, 2023, primarily due to the timing of receipts and early payments from crude oil customers.

Liquidity of $55.9 million at September 30, 2023, versus $48.6 million at June 30, 2023.

Paid dividends totaling $0.24 per share during the third quarter of 2023. The Company has consistently paid a dividend since 1994.

Adjusted cash flow is a non-generally accepted accounting principle (“non-GAAP”) financial measure that is defined and reconciled, along with the non-GAAP financial measures adjusted net (losses) earnings and adjusted net (losses) earnings per diluted common share, in the financial tables later in this release.

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Additional Operational Highlights

Adams’ crude oil marketing subsidiary, GulfMark Energy, Inc. (“GulfMark”), marketed 92,556 barrels per day (“bpd”) of crude oil during the third quarter of 2023, compared to 91,878 bpd during the third quarter of 2022 and 92,152 bpd during the second quarter of 2023.

The collective fleet of Service Transport Company (“Service Transport”), Adams’ liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.51 million miles during the third quarter of 2023, versus 6.78 million miles during the third quarter of 2022 and 6.30 million miles during the second quarter of 2023.

Adams’ crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System (“VEX Pipeline System”), throughput was 8,548 bpd for the third quarter of 2023, compared to 9,963 bpd for the third quarter of 2022 and 8,560 bpd for the second quarter of 2023, and terminalling volumes were 9,350 bpd for the third quarter of 2023, compared to 9,716 bpd in the third quarter of 2022, and 10,785 bpd for the second quarter of 2023.

The logistics and repurposing segment, which includes the Firebird Bulk Carriers, Inc. (“Firebird”) and Phoenix Oil, Inc. (“Phoenix”) businesses acquired in August 2022, had a positive impact on quarterly cash flow.

Remained solidly positioned with 307,175 barrels of crude oil inventory at September 30, 2023, compared to 328,562 barrels at December 31, 2022.

“Our performance in the third quarter showcased several encouraging highlights in a very challenging environment. Our crude oil marketing segment demonstrated a sequential increase in operating income despite a number of headwinds,” said Kevin J. Roycraft, Chief Executive Officer of Adams. “Moreover, we increased our cash balance and liquidity and nearly tripled our net income on a sequential basis.”

Capital Investments and Dividends

During the third quarter of 2023, the Company had capital expenditures of $3.0 million primarily for the previously announced purchase of ten tractors, eight trailers and other field equipment. In addition, Adams paid dividends of $0.6 million, or $0.24 per common share.

As part of Adams’ on-going capital allocation strategy, the Board of Directors declared a quarterly cash dividend for the third quarter of 2023 of $0.24 per common share, payable on December 15, 2023, to shareholders of record as of December 1, 2023.

Outlook

“We believe the challenges facing our GulfMark and Service Transport segments are expected to remain in place for the next few months, with a gradual recovery to begin late in the first half of 2024,” Mr. Roycraft continued. “Our Company remains in a very strong financial position to navigate the continued macroeconomic challenges affecting our industries. We are well-prepared to deliver meaningful performance when our key markets begin to improve. In
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addition, our continued commitment to our dividend should deliver long-term value to our shareholders,” Mr. Roycraft concluded.

Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-GAAP financial measures of adjusted cash flow, adjusted net earnings (losses) and adjusted earnings (losses) per common share. The accompanying schedules provide definitions of these non-GAAP financial measures and reconciliations to their most directly comparable financial measures calculated and presented in accordance with GAAP. Company management believes these measures are useful indicators of the financial performance of our business and uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against peer companies. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, net cash flow provided by operating activities, earnings per share or any other measure of financial performance calculated and presented in accordance with GAAP. Adams’ non-GAAP financial measures may not be comparable to similarly titled measures of other companies because they may not calculate such measures in the same manner as Adams does.

Conference Call

The Company will host a conference call to discuss its third quarter results on Thursday, November 9, 2023 at 9:00 a.m. ET (8:00 a.m. CT). To participate in the live conference call, dial 1-844-413-3976 (Toll-Free) within the U.S., or 1-412-317-1802 (Toll-Required) outside the U.S., or log into the webcast, available on Adams’ investor relations website at adamsresources.com/investor-relations. A replay will also be available on the Company’s website or by dialing 1-877-344-7529 (Toll-Free) within the U.S., or 1-412-317-0088 (Toll-Required) outside the U.S. and entering code 6806573.

About Adams Resources & Energy, Inc.

Adams Resources & Energy, Inc. is engaged in crude oil marketing, transportation, terminalling and storage, tank truck transportation of liquid chemicals and dry bulk, 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 through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC, GulfMark Terminals, LLC, Firebird Bulk Carriers, Inc. and Phoenix Oil, Inc. For more information, visit www.adamsresources.com.


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Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements. Forward-looking statements relate to future events and anticipated results of operations, business strategies, capital deployment plans and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “target” or similar words. Statements may be forward looking even in the absence of these particular words. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, and any other risk factors included in Adams’ reports filed with the Securities and Exchange Commission. However, there can be no assurance that such expectation or belief will result or be achieved. Unless legally required, Adams undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Company Contact

Tracy E. Ohmart
EVP, Chief Financial Officer
tohmart@adamsresources.com
(713) 881-3609

Investor Relations Contact

John Beisler or Steven Hooser
Three Part Advisors
(817) 310-8776
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Revenues:
Marketing$719,925 $814,394 $1,913,673 $2,524,465 
Transportation24,206 29,830 75,103 86,054 
Pipeline and storage59 — 308 — 
Logistics and repurposing16,424 8,677 46,458 8,677 
Total revenues760,614 852,901 2,035,542 2,619,196 
Costs and expenses:
Marketing710,169 807,316 1,894,416 2,498,474 
Transportation19,642 23,732 62,315 68,271 
Pipeline and storage659 640 2,350 1,799 
Logistics and repurposing15,121 7,582 41,448 7,582 
General and administrative4,162 4,630 10,649 12,860 
Depreciation and amortization6,936 6,008 21,289 16,109 
Total costs and expenses756,689 849,908 2,032,467 2,605,095 
Operating earnings3,925 2,993 3,075 14,101 
Other income (expense):
Interest and other income119 338 893 665 
Interest expense(1,027)(119)(2,525)(369)
Total other (expense) income, net(908)219 (1,632)296 
Earnings before income taxes3,017 3,212 1,443 14,397 
Income tax provision(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 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30,December 31,
20232022
ASSETS
Current assets:
Cash and cash equivalents$16,313 $20,532 
Restricted cash8,575 10,535 
Accounts receivable, net of allowance for doubtful accounts219,263 189,039 
Inventory27,650 26,919 
Derivative assets— 
Income tax receivable510 — 
Prepayments and other current assets2,470 3,118 
Total current assets274,786 250,143 
Property and equipment, net111,042 106,425 
Operating lease right-of-use assets, net6,212 7,720 
Intangible assets, net8,407 9,745 
Goodwill6,673 6,428 
Other assets3,475 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 obligations6,863 4,382 
Current portion of operating lease liabilities2,769 2,712 
Current portion of long-term debt2,500 — 
Other current liabilities13,856 19,214 
Total current liabilities252,601 231,060 
Other long-term liabilities:
Long-term debt20,000 24,375 
Asset retirement obligations2,499 2,459 
Finance lease obligations22,292 12,085 
Operating lease liabilities3,446 5,007 
Deferred taxes and other liabilities15,696 15,996 
Total liabilities316,534 290,982 
Commitments and contingencies
Shareholders’ equity94,061 93,177 
Total liabilities and shareholders’ equity$410,595 $384,159 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Operating activities:
Net earnings $2,258 $2,190 $1,086 $10,756 
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization6,936 6,008 21,289 16,109 
Gains on sales of property(663)(771)(1,429)(1,709)
Provision for doubtful accounts39 (12)29 (20)
Stock-based compensation expense389 254 1,044 712 
Change in contingent consideration liability— — (2,566)— 
Deferred income taxes773 (1,429)(1,761)
Net change in fair value contracts(35)(1,254)(335)(1,884)
Changes in assets and liabilities:
Accounts receivable(60,869)73,777 (30,253)(56,060)
Accounts receivable/payable, affiliates— 17 (31)17 
Inventories(1,127)32,080 (731)(10,259)
Income tax receivable(41)— (510)6,424 
Prepayments and other current assets138 86 648 468 
Accounts payable63,845 (74,219)22,239 46,925 
Accrued liabilities(145)3,875 (2,709)6,489 
Other(52)(592)64 (375)
Net cash provided by operating activities11,446 40,010 7,838 15,832 
Investing activities:
Property and equipment additions(3,009)(2,014)(8,917)(6,797)
Acquisition of Firebird and Phoenix, net of cash acquired— (33,590)— (33,590)
Proceeds from property sales1,634 835 3,078 2,209 
Insurance and state collateral refunds— 331 — 331 
Net cash used in investing activities(1,375)(34,438)(5,839)(37,847)
Financing activities:
Borrowings under Credit Agreement38,000 15,000 76,000 45,000 
Repayments under Credit Agreement(38,625)— (77,875)(30,000)
Principal repayments of finance lease obligations(1,697)(1,185)(4,944)(3,491)
Net proceeds from sale of equity— — 549 283 
Dividends paid on common stock(619)(1,054)(1,908)(3,180)
Net cash (used in) provided by financing activities(2,941)12,761 (8,178)8,612 
Increase (Decrease) in cash and cash equivalents, including
   restricted cash
7,130 18,333 (6,179)(13,403)
Cash and cash equivalents, including restricted cash,
   at beginning of period
17,758 75,581 31,067 107,317 
Cash and cash equivalents, including restricted cash,
   at end of period
$24,888 $93,914 $24,888 $93,914 

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Reconciliation of Adjusted Cash Flow to Net Earnings:
Net earnings $2,258 $2,190 $1,086 $10,756 
Add (subtract):
Income tax provision 759 1,022 357 3,641 
Depreciation and amortization6,936 6,008 21,289 16,109 
Gains on sales of property(663)(771)(1,429)(1,709)
Stock-based compensation expense389 254 1,044 712 
Change in contingent consideration liability— — (2,566)— 
Inventory liquidation gains(4,890)— (2,922)(2,062)
Inventory valuation losses— 5,122 — — 
Net change in fair value contracts(35)(1,254)(335)(1,884)
Adjusted cash flow$4,754 $12,571 $16,524 $25,563 

Reconciliation of Adjusted net earnings (losses) and earnings
(losses) per common share (Non-GAAP) to Net Earnings:
Net earnings$2,258 $2,190 $1,086 $10,756 
Add (subtract):
Gains on sales of property(663)(771)(1,429)(1,709)
Stock-based compensation expense389 254 1,044 712 
Change in contingent consideration liability— — (2,566)— 
Net change in fair value contracts(35)(1,254)(335)(1,884)
Inventory liquidation gains(4,890)— (2,922)(2,062)
Inventory valuation losses— 5,122 — — 
Tax effect of adjustments to earnings (losses)1,092 (704)1,304 1,038 
Adjusted net (losses) earnings$(1,849)$4,837 $(3,818)$6,851 
Adjusted (losses) earnings per common share$(0.72)$1.09 $(1.49)$1.55 

Reconciliation of Adjusted Cash Flow to Net Cash
   Provided By Operating Activities:
Net cash provided by operating activities$11,446 $40,010 $7,838 $15,832 
Add (subtract):
Income tax provision (benefit)759 1,022 357 3,641 
Deferred income taxes(773)1,429 (3)1,761 
Provision for doubtful accounts(39)12 (29)20 
Inventory liquidation gains(4,890)— (2,922)(2,062)
Inventory valuation losses— 5,122 — — 
Changes in assets and liabilities(1,749)(35,024)11,283 6,371 
Adjusted cash flow$4,754 $12,571 $16,524 $25,563 

###
8
v3.23.3
Cover Page
Nov. 08, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 08, 2023
Entity Registrant Name ADAMS RESOURCES & ENERGY, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 1-7908
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
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.10 par value
Trading Symbol AE
Security Exchange Name NYSEAMER
Entity Emerging Growth Company false
Entity Central Index Key 0000002178
Amendment Flag false

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