Adams Resources & Energy, Inc. Announces Second Quarter 2024 Results and Declares Quarterly Dividend
Second Quarter 2024 Financial Summary
- Total revenue of
$718.5 million - Net loss of
($2.2) million , or ($0.87 ) per common share - EBITDA of
$3.7 million - Adjusted EBITDA of
$4.2 million , which excludes inventory valuation losses - Cash and cash equivalents of
$38.5 million , versus$33.3 million atDecember 31, 2023 - Liquidity of
$88.5 million , versus$80.3 million atDecember 31, 2023 - Repaid an additional
$3.0 million of principal under our Credit Facility - Paid dividends of
$0.24 per share
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA are non-generally accepted accounting principle ("non-GAAP") financial measures that are defined and reconciled to net (losses) earnings in the financial tables later in this release.
"Our second quarter results reflect the prolonged weakness across the specialty chemicals market through a combination of lower demand, excess capacity, and continued inflationary pressures across our business as well as an additional
"We remain optimistic that conditions in the chemical transportation market will begin to improve in the latter half of 2024, but more so in early 2025 through improved macroeconomic conditions and with capacity continuing to exit the industry. Overall, we remain in a strong financial position to fund our operations and pay our quarterly dividend, which is a key component of our delivering long-term returns to our shareholders."
Additional Operational Highlights
- Adams' crude oil marketing subsidiary, GulfMark Energy, Inc. ("GulfMark"), marketed 67,099 barrels per day ("bpd") of crude oil during the second quarter of 2024, compared to 92,152 bpd during the second quarter of 2023 and 64,634 bpd during the first quarter of 2024. The decrease in volumes compared to the prior year period was largely driven by GulfMark's exit from the
Red River trucking operations in the fourth quarter of 2023.
- The collective fleet of
Service Transport Company ("Service Transport "), Adams' liquid chemicals, pressurized gases, asphalt and dry bulk transportation subsidiary, traveled 6.32 million miles during the second quarter of 2024, versus 6.30 million miles during the second quarter of 2023 and 6.29 million miles during the first quarter of 2024.
- Throughput in Adams' crude oil pipeline and storage segment, which includes the Victoria Express Pipeline System, was 13,881 bpd for the second quarter of 2024, compared to 8,560 bpd for the second quarter of 2023 and 11,256 bpd for the first quarter of 2024, and terminalling volumes were 16,660 bpd for the second quarter of 2024, compared to 10,785 bpd in the second quarter of 2023, and 11,544 bpd for the first quarter of 2024.
- Adams' remained solidly positioned with 244,871 barrels of crude oil inventory at
June 30, 2024 , compared to 267,731 barrels atDecember 31, 2023 .
Capital Investments and Dividends
During the second quarter of 2024, the Company had capital expenditures of
As part of Adams' on-going capital allocation strategy, the Board of Directors declared a quarterly cash dividend for the second quarter of 2024 of
Use of Non-GAAP Financial Measures
To supplement the Company's financial statements presented in accordance with generally accepted accounting principles in
Conference Call
The Company will host a conference call to discuss its second quarter results on
About
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 as well as future industry developments and economic conditions. 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 or conditions, 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
Company Contact
EVP, Chief Financial Officer
tohmart@adamsresources.com
(713) 881-3609
Investor Relations Contact
Three
(817) 310-8776
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Three Months Ended |
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Six Months Ended |
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|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenues: |
|
|
|
|
|
|
|
|
Marketing |
|
$ 682,825 |
|
$ 585,272 |
|
$ 1,306,649 |
|
$ 1,193,748 |
Transportation |
|
22,756 |
|
24,452 |
|
45,987 |
|
50,897 |
Pipeline and storage |
|
20 |
|
249 |
|
24 |
|
249 |
Logistics and repurposing |
|
12,892 |
|
14,793 |
|
26,883 |
|
30,034 |
Total revenues |
|
718,493 |
|
624,766 |
|
1,379,543 |
|
1,274,928 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Marketing |
|
675,809 |
|
579,753 |
|
1,291,400 |
|
1,184,247 |
Transportation |
|
19,356 |
|
20,260 |
|
39,506 |
|
42,673 |
Pipeline and storage |
|
942 |
|
753 |
|
1,639 |
|
1,691 |
Logistics and repurposing |
|
14,187 |
|
13,202 |
|
28,024 |
|
26,327 |
General and administrative |
|
4,454 |
|
1,715 |
|
9,235 |
|
6,487 |
Depreciation and amortization |
|
6,180 |
|
7,303 |
|
12,535 |
|
14,353 |
Total costs and expenses |
|
720,928 |
|
622,986 |
|
1,382,339 |
|
1,275,778 |
|
|
|
|
|
|
|
|
|
Operating (losses) earnings |
|
(2,435) |
|
1,780 |
|
(2,796) |
|
(850) |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest and other income |
|
573 |
|
570 |
|
1,134 |
|
774 |
Interest expense |
|
(671) |
|
(802) |
|
(1,464) |
|
(1,498) |
Total other income (expense), net |
|
(98) |
|
(232) |
|
(330) |
|
(724) |
|
|
|
|
|
|
|
|
|
(Losses) Earnings before income taxes |
|
(2,533) |
|
1,548 |
|
(3,126) |
|
(1,574) |
Income tax benefit (provision) |
|
304 |
|
(721) |
|
399 |
|
402 |
Net (losses) earnings |
|
$ (2,229) |
|
$ 827 |
|
$ (2,727) |
|
$ (1,172) |
|
|
|
|
|
|
|
|
|
(Losses) Earnings per share: |
|
|
|
|
|
|
|
|
Basic net losses (earnings) per common share |
|
$ (0.87) |
|
$ 0.33 |
|
$ (1.06) |
|
$ (0.46) |
Diluted net losses (earnings) per common share |
|
$ (0.87) |
|
$ 0.32 |
|
$ (1.06) |
|
$ (0.46) |
Dividends per common share |
|
$ 0.24 |
|
$ 0.24 |
|
$ 0.48 |
|
$ 0.48 |
|
|
|
|
|
|
|
|
|
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|
|
|
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|
2024 |
|
2023 |
ASSETS |
|
|
|
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Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 38,512 |
|
$ 33,256 |
Restricted cash |
|
11,124 |
|
11,990 |
Accounts receivable, net of allowance for credit losses |
|
171,735 |
|
164,295 |
Inventory |
|
19,895 |
|
19,827 |
Income tax receivable |
|
109 |
|
— |
Prepayments and other current assets |
|
3,328 |
|
3,103 |
Total current assets |
|
244,703 |
|
232,471 |
|
|
|
|
|
Property and equipment, net |
|
100,426 |
|
105,065 |
Operating lease right-of-use assets, net |
|
4,702 |
|
5,832 |
Intangible assets, net |
|
7,144 |
|
7,985 |
|
|
6,673 |
|
6,673 |
Other assets |
|
3,061 |
|
3,308 |
Total assets |
|
$ 366,709 |
|
$ 361,334 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ 203,833 |
|
$ 183,102 |
Current portion of finance lease obligations |
|
6,075 |
|
6,206 |
Current portion of operating lease liabilities |
|
2,096 |
|
2,829 |
Current portion of long-term debt |
|
2,500 |
|
2,500 |
Other current liabilities |
|
16,484 |
|
16,150 |
Total current liabilities |
|
230,988 |
|
210,787 |
Other long-term liabilities: |
|
|
|
|
Long-term debt |
|
13,125 |
|
19,375 |
Asset retirement obligations |
|
2,545 |
|
2,514 |
Finance lease obligations |
|
16,567 |
|
19,685 |
Operating lease liabilities |
|
2,617 |
|
3,006 |
Deferred taxes and other liabilities |
|
11,637 |
|
13,251 |
Total liabilities |
|
277,479 |
|
268,618 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
89,230 |
|
92,716 |
Total liabilities and shareholders' equity |
|
$ 366,709 |
|
$ 361,334 |
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Three Months Ended |
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Six Months Ended |
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|
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|
2024 |
|
2023 |
|
2024 |
|
2023 |
Operating activities: |
|
|
|
|
|
|
|
Net losses |
$ (2,229) |
|
$ 827 |
|
$ (2,727) |
|
$ (1,172) |
Adjustments to reconcile net losses to net cash |
|
|
|
|
|
|
|
provided by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
6,180 |
|
7,303 |
|
12,535 |
|
14,353 |
Gains on sales of property |
(518) |
|
(735) |
|
(855) |
|
(766) |
Provision for credit losses |
(52) |
|
(7) |
|
(75) |
|
(10) |
Stock-based compensation expense |
451 |
|
372 |
|
758 |
|
655 |
Change in contingent consideration liability |
— |
|
(2,566) |
|
— |
|
(2,566) |
Deferred income taxes |
(1,119) |
|
654 |
|
(1,623) |
|
(770) |
Net change in fair value contracts |
— |
|
187 |
|
— |
|
(300) |
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
13,613 |
|
(300) |
|
(7,365) |
|
30,616 |
Accounts receivable/payable, affiliates |
— |
|
— |
|
— |
|
(31) |
Inventories |
7,431 |
|
(4,248) |
|
(68) |
|
396 |
Income tax receivable |
(109) |
|
(469) |
|
(109) |
|
(469) |
Prepayments and other current assets |
(790) |
|
420 |
|
(225) |
|
510 |
Accounts payable |
(15,619) |
|
(28,953) |
|
20,672 |
|
(41,606) |
Accrued liabilities |
992 |
|
(50) |
|
393 |
|
(2,564) |
Other |
84 |
|
250 |
|
67 |
|
116 |
Net cash provided by (used in) operating activities |
8,315 |
|
(27,315) |
|
21,378 |
|
(3,608) |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Property and equipment additions |
(2,358) |
|
(4,008) |
|
(8,510) |
|
(5,908) |
Proceeds from property sales |
1,348 |
|
1,003 |
|
2,310 |
|
1,444 |
Net cash used in investing activities |
(1,010) |
|
(3,005) |
|
(6,200) |
|
(4,464) |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
Borrowings under Credit Agreement |
— |
|
20,000 |
|
— |
|
38,000 |
Repayments under Credit Agreement |
(3,625) |
|
(20,625) |
|
(6,250) |
|
(39,250) |
Principal repayments of finance lease obligations |
(1,696) |
|
(1,671) |
|
(3,249) |
|
(3,247) |
Net proceeds from sale of equity |
— |
|
— |
|
— |
|
549 |
Dividends paid on common stock |
(615) |
|
(608) |
|
(1,289) |
|
(1,289) |
Net cash used in financing activities |
(5,936) |
|
(2,904) |
|
(10,788) |
|
(5,237) |
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and cash equivalents, including restricted cash |
1,369 |
|
(33,224) |
|
4,390 |
|
(13,309) |
Cash and cash equivalents, including restricted cash, at beginning of period |
48,267 |
|
50,982 |
|
45,246 |
|
31,067 |
Cash and cash equivalents, including restricted cash, at end of period |
$ 49,636 |
|
$ 17,758 |
|
$ 49,636 |
|
$ 17,758 |
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|
Three Months Ended |
|
Six Months Ended |
||||
|
|
|
|
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Reconciliation of EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
to Net (Losses) Earnings: |
|
|
|
|
|
|
|
|
Net (losses) earnings |
|
$ (2,229) |
|
$ 827 |
|
$ (2,727) |
|
$ (1,172) |
Add (subtract): |
|
|
|
|
|
|
|
|
Interest income |
|
(573) |
|
(570) |
|
(1,134) |
|
(774) |
Interest expense |
|
671 |
|
802 |
|
1,464 |
|
1,498 |
Income tax (benefit) expense |
|
(304) |
|
721 |
|
(399) |
|
(402) |
Depreciation and amortization |
|
6,180 |
|
7,303 |
|
12,535 |
|
14,353 |
EBITDA |
|
$ 3,745 |
|
$ 9,083 |
|
$ 9,739 |
|
$ 13,503 |
Inventory liquidation gains |
|
— |
|
— |
|
(1,297) |
|
— |
Inventory valuation losses |
|
456 |
|
951 |
|
— |
|
1,968 |
Adjusted EBITDA |
|
$ 4,201 |
|
$ 10,034 |
|
$ 8,442 |
|
$ 15,471 |
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