Attached files
| file | filename |
|---|---|
| 8-K - 8-K-4Q 2017 EARNINGS RELEAE - ADAMS RESOURCES & ENERGY, INC. | a4q2017er8-k.htm |
Exhibit 99.1
 | FOR IMMEDIATE RELEASE | |
ADAMS RESOURCES & ENERGY, INC. ANNOUNCES
FOURTH QUARTER 2017 RESULTS
Houston, Texas (Monday, March 12, 2018) -- Adams Resources & Energy, Inc. (NYSE MKT: AE) (“Adams” or the “Company”) today announced its financial results for the three months and year ended December 31, 2017.
The Company reported net earnings of $3.7 million, or $0.88 per common share, on revenues of $408.5 million for the fourth quarter of 2017, compared to a net loss of $0.2 million, or ($0.04) per common share, on revenues of $299.0 million for the fourth quarter of 2016. On an adjusted basis, net earnings were $1.3 million, or $0.31 per common share, for the fourth quarter of 2017, compared to a net loss of $1.6 million, or ($0.38) per common share, for the fourth quarter of 2016. For the full year 2017, the Company had a net loss of $0.5 million, or ($0.11) per common share, on revenues of $1.3 billion, compared to net earnings of $2.5 million, or $0.60 per common share, on revenues of $1.1 billion for the full year 2016. On an adjusted basis, net earnings were $1.3 million, or $0.31 per common share for the full year 2017, compared to a net loss of $3.0 million, or ($0.70) per common share for the full year 2016.
Adjusted net (losses) earnings, adjusted (losses) earnings per common share and adjusted cash flow are non-generally accepted accounting principle (“non-GAAP”) financial measures that are defined and reconciled in the financial tables below.
Fourth Quarter 2017 Highlights:
• | Gross revenues of approximately $408.5 million for the fourth quarter of 2017 compared to $299.0 million for the fourth quarter of 2016, and gross revenues of approximately $1.3 billion for the full year 2017 compared to $1.1 billion for the full year 2016 |
• | Our crude oil marketing subsidiary, GulfMark Energy, Inc., marketed approximately 72,387 barrels per day (“bpd”) of crude oil during the fourth quarter of 2017, compared to 66,469 bpd of crude oil during the fourth quarter of 2016 |
• | Cash and cash equivalents increased 25 percent from December 31, 2016 levels of $87 million to over $109 million at December 31, 2017 |
• | $167 million of liquidity ($109.4 million of cash and cash equivalents and $57.8 million of undrawn letter of credit facility) at December 31, 2017 |
• | Generated positive adjusted cash flow of $3.2 million for the fourth quarter of 2017 compared to positive adjusted cash flow of $2.3 million for the fourth quarter of 2016 |
• | Approximately 198,011 barrels of crude oil inventory at December 31, 2017 |
• | Dividend of $0.22 per share for the fourth quarter of 2017 |
• | No short or long term debt at December 31, 2017 |
“During the fourth quarter of 2017, we generated positive financial and operating results from our marketing segment as our average daily barrels marketed and transported increased approximately nine percent from levels in the fourth quarter of 2016 to 72,387 barrels per day,” said Townes Pressler, Executive Chairman. “Volumes increased as our customers’ completion crews converted drilled but uncompleted wells to production primarily in the Gulf Coast region. Service Transport began to gain positive momentum as our revenue per mile increased 15 percent from the fourth quarter of 2016 to the fourth quarter of 2017. As demand remains robust, we are making good progress in improving trucking rates with our customers at Service Transport. During 2018, we plan to remain focused on enhancing margins, with disciplined investing and upgrading our fleet of tractors with the latest technologically advanced safety equipment, as well as actively pursuing development opportunities that complement our two primary business segments,” continued Pressler.
Capital Investments and Dividends
During the fourth quarter of 2017, the Company recorded approximately $0.2 million of capital spending and paid dividends of $0.9 million ($0.22 per share). For the full year 2017, the Company recorded approximately $4.5 million of capital and paid dividends of $3.7 million ($0.88 per share). Of the $4.5 million of capital recorded during 2017, $1.8 million was associated with capital leases of tractors for our marketing segment and $1.8 million was associated with drilling and completions activity associated with our upstream subsidiary. The Company exited the upstream business through a chapter 11 bankruptcy sale process in which substantially all of the assets were sold during 2017. The upstream subsidiary obtained a confirmed plan from the Delaware bankruptcy court in December 2017.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules includes the non-GAAP financial measures of adjusted cash flow, adjusted net (losses) earnings and adjusted (losses) earnings 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 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 or any other measure of financial performance calculated and presented in accordance with GAAP. Our 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 we do.
Adams Resources & Energy, Inc. is engaged in the business of crude oil marketing, transportation and storage, tank truck transportation of liquid chemicals and dry bulk and ISO tank container storage and transportation. For more information, visit www.adamsresources.com.
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, 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. 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.
Contact: Josh C. Anders
EVP, Chief Financial Officer
janders@adamsresources.com
(281) 974-9442
3
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Marketing | $ | 395,255 | $ | 285,148 | $ | 1,267,275 | $ | 1,043,775 | |||||||
Transportation | 13,205 | 12,838 | 53,358 | 52,355 | |||||||||||
Oil and natural gas | — | 983 | 1,427 | 3,410 | |||||||||||
Total revenues | 408,460 | 298,969 | 1,322,060 | 1,099,540 | |||||||||||
Costs and expenses: | |||||||||||||||
Marketing | 387,196 | 278,875 | 1,247,763 | 1,016,733 | |||||||||||
Transportation | 11,857 | 11,617 | 48,538 | 45,154 | |||||||||||
Oil and natural gas | — | (337 | ) | 948 | 2,084 | ||||||||||
Oil and natural gas property impairments | — | 313 | 3 | 313 | |||||||||||
General and administrative | 2,823 | 4,158 | 9,707 | 10,410 | |||||||||||
Depreciation, depletion and amortization | 2,827 | 4,407 | 13,599 | 18,792 | |||||||||||
Total costs and expenses | 404,703 | 299,033 | 1,320,558 | 1,093,486 | |||||||||||
Operating earnings (losses) | 3,757 | (64 | ) | 1,502 | 6,054 | ||||||||||
Other income (expense): | |||||||||||||||
Loss on deconsolidation of subsidiary | — | — | (3,505 | ) | — | ||||||||||
Impairment of investment in unconsolidated affiliate | — | — | (2,500 | ) | — | ||||||||||
Interest income | 314 | 138 | 1,103 | 582 | |||||||||||
Interest expense | (17 | ) | (2 | ) | (27 | ) | (2 | ) | |||||||
Total other income (expense), net | 297 | 136 | (4,929 | ) | 580 | ||||||||||
(Losses) earnings before income taxes and | |||||||||||||||
investment in unconsolidated affiliate | 4,054 | 72 | (3,427 | ) | 6,634 | ||||||||||
Income tax benefit (provision) | (361 | ) | (240 | ) | 2,945 | (2,691 | ) | ||||||||
Earnings (losses) from continuing operations | 3,693 | (168 | ) | (482 | ) | 3,943 | |||||||||
Losses from investment in unconsolidated affiliate, | |||||||||||||||
net of tax benefit | — | — | — | (1,430 | ) | ||||||||||
Net (losses) earnings | $ | 3,693 | $ | (168 | ) | $ | (482 | ) | $ | 2,513 | |||||
Earnings (losses) per share: | |||||||||||||||
From continuing operations | $ | 0.88 | $ | (0.04 | ) | $ | (0.11 | ) | $ | 0.94 | |||||
From investment in unconsolidated affiliate | — | — | — | (0.34 | ) | ||||||||||
Basic and diluted net (losses) earnings | |||||||||||||||
per common share | $ | 0.88 | $ | (0.04 | ) | $ | (0.11 | ) | $ | 0.60 | |||||
Weighted average number of common | |||||||||||||||
shares outstanding | 4,218 | 4,218 | 4,218 | 4,218 | |||||||||||
Dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.88 | $ | 0.88 | |||||||
4
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 109,393 | $ | 87,342 | |||
Accounts receivable, net of allowance for doubtful accounts | 121,353 | 87,162 | |||||
Inventory | 12,192 | 13,070 | |||||
Derivative assets | 166 | 112 | |||||
Income tax receivable | 1,317 | 2,735 | |||||
Prepayments and other current assets | 1,264 | 2,097 | |||||
Total current assets | 245,685 | 192,518 | |||||
Property and equipment, net | 29,362 | 46,325 | |||||
Investments in unconsolidated affiliates | 425 | 2,500 | |||||
Cash deposits and other | 7,232 | 5,529 | |||||
Total assets | $ | 282,704 | $ | 246,872 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 124,706 | $ | 79,897 | |||
Accounts payable – related party | 5 | 53 | |||||
Derivative liabilities | 145 | 64 | |||||
Current portion of capital lease obligations | 338 | — | |||||
Other current liabilities | 4,404 | 6,060 | |||||
Total current liabilities | 129,598 | 86,074 | |||||
Other long-term liabilities: | |||||||
Asset retirement obligations | 1,273 | 2,329 | |||||
Capital lease obligations | 1,351 | — | |||||
Deferred taxes and other liabilities | 3,363 | 7,157 | |||||
Total liabilities | 135,585 | 95,560 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity | 147,119 | 151,312 | |||||
Total liabilities and shareholders’ equity | $ | 282,704 | $ | 246,872 | |||
5
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net (losses) earnings | $ | (482 | ) | $ | 2,513 | ||
Adjustments to reconcile net (losses) earnings to net cash | |||||||
provided by operating activities: | |||||||
Depreciation, depletion and amortization | 13,599 | 18,792 | |||||
Gains on sale of property | (594 | ) | (1,966 | ) | |||
Impairment of oil and natural gas properties | 3 | 313 | |||||
Provision for doubtful accounts | 78 | 19 | |||||
Deferred income taxes | (3,840 | ) | (857 | ) | |||
Net change in fair value contracts | 27 | (243 | ) | ||||
Losses from equity investment | — | 468 | |||||
Impairment of investments in unconsolidated affiliates | 2,500 | 1,732 | |||||
Loss on deconsolidation of subsidiary | 3,505 | — | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (34,935 | ) | (15,368 | ) | |||
Accounts receivable/payable, affiliates | 271 | — | |||||
Inventories | 878 | (5,399 | ) | ||||
Income tax receivable | 1,418 | (148 | ) | ||||
Prepayments and other current assets | 831 | 492 | |||||
Accounts payable | 44,790 | 6,984 | |||||
Accrued liabilities | (991 | ) | 52 | ||||
Other | (962 | ) | (440 | ) | |||
Net cash provided by operating activities | 26,096 | 6,944 | |||||
Investing activities: | |||||||
Property and equipment additions | (2,644 | ) | (8,484 | ) | |||
Proceeds from property sales | 720 | 3,706 | |||||
Proceeds from sales of AREC assets | 2,775 | — | |||||
Investments in unconsolidated affiliates | — | (4,700 | ) | ||||
Insurance and state collateral (deposits) refunds | (1,067 | ) | 1,710 | ||||
Net cash used in investing activities | (216 | ) | (7,768 | ) | |||
Financing activities: | |||||||
Principal repayments of capital lease obligations | (118 | ) | — | ||||
Dividends paid on common stock | (3,711 | ) | (3,711 | ) | |||
Net cash used in financing activities | (3,829 | ) | (3,711 | ) | |||
Increase (decrease) in cash and cash equivalents | 22,051 | (4,535 | ) | ||||
Cash and cash equivalents at beginning of period | 87,342 | 91,877 | |||||
Cash and cash equivalents at end of period | $ | 109,393 | $ | 87,342 | |||
6
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Reconciliation of Adjusted Cash Flow to Net (Losses) Earnings: | |||||||||||||||
Net (losses) earnings | $ | 3,693 | $ | (168 | ) | $ | (482 | ) | $ | 2,513 | |||||
Income tax benefit (provision) | 361 | 240 | (2,945 | ) | 1,921 | ||||||||||
Depreciation, depletion and amortization | 2,827 | 4,407 | 13,599 | 18,792 | |||||||||||
Gains on sale of property | (247 | ) | (18 | ) | (594 | ) | (1,966 | ) | |||||||
Impairment of oil and natural gas properties | — | 226 | 3 | 313 | |||||||||||
Loss on deconsolidation of subsidiary | — | — | 3,505 | — | |||||||||||
Impairment of investments in unconsolidated affiliates | — | — | 2,500 | 1,732 | |||||||||||
Inventory liquidation gains | (3,481 | ) | (2,464 | ) | (3,372 | ) | (8,243 | ) | |||||||
Net change in fair value contracts | (21 | ) | 62 | 27 | (243 | ) | |||||||||
Voluntary early retirement program costs | — | — | 1,435 | — | |||||||||||
Legal and other accrual reversals | — | — | (840 | ) | — | ||||||||||
Insurance deductible related to hurricane | 100 | — | 100 | — | |||||||||||
Adjusted cash flow | $ | 3,232 | $ | 2,285 | $ | 12,936 | $ | 14,819 | |||||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Adjusted net (losses) earnings and (losses) earnings | |||||||||||||||
per common share (Non-GAAP): | |||||||||||||||
Net (losses) earnings | $ | 3,693 | $ | (168 | ) | $ | (482 | ) | $ | 2,513 | |||||
Add (subtract): | |||||||||||||||
Loss on deconsolidation of subsidiary | — | — | 3,505 | — | |||||||||||
Impairment of investments in unconsolidated affiliates | — | — | 2,500 | 1,732 | |||||||||||
Gains on sale of property | (247 | ) | (18 | ) | (594 | ) | (1,966 | ) | |||||||
Impairment of oil and natural gas properties | — | 226 | 3 | 313 | |||||||||||
Voluntary early retirement program costs | — | — | 1,435 | — | |||||||||||
Net change in fair value contracts | (21 | ) | 62 | 27 | (243 | ) | |||||||||
Inventory liquidation gains | (3,481 | ) | (2,464 | ) | (3,372 | ) | (8,243 | ) | |||||||
Legal and other accrual reversals | — | — | (840 | ) | — | ||||||||||
Insurance deductible related to hurricane | 100 | — | 100 | — | |||||||||||
Tax effect of adjustments to (losses) earnings | 1,277 | 768 | (967 | ) | 2,942 | ||||||||||
Adjusted net (losses) earnings | $ | 1,321 | $ | (1,594 | ) | $ | 1,315 | $ | (2,952 | ) | |||||
Adjusted (losses) earnings per common share | $ | 0.31 | $ | (0.38 | ) | $ | 0.31 | $ | (0.70 | ) | |||||
7