ae-20240331

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ 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: 1-07908

ADAMS RESOURCES & ENERGY, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						74-1753147
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


17 South Briar Hollow Lane, Suite 100 Houston, Texas 77027
(Address of Principal Executive Offices, including Zip Code)

(713) 881-3600

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.10 Par Value

NYSE American LLC

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 þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☑

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

A total of 2,567,104 shares of Common Stock were outstanding at May 1, 2024.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


		Page Number
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Unaudited Condensed Consolidated Balance Sheets	2
	Unaudited Condensed Consolidated Statements of Operations	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	36
Item 4.	Controls and Procedures.	36

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings.	36
Item 1A.	Risk Factors.	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	37
Item 3.	Defaults Upon Senior Securities.	37
Item 4.	Mine Safety Disclosures.	37
Item 5.	Other Information.	37
Item 6.	Exhibits.	38

Signatures		39

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	36,603	$	33,256
Restricted cash	11,664		11,990
Accounts receivable, net of allowance for credit
losses of $94 and $117, respectively	185,296		164,295

Inventory	27,326		19,827


Prepayments and other current assets	2,538		3,103
Total current assets	263,427		232,471
Property and equipment, net	104,659		105,065
Operating lease right-of-use assets, net	5,385		5,832
Intangible assets, net	7,563		7,985
Goodwill	6,673		6,673
Other assets	3,124		3,308
Total assets	$	390,831	$	361,334

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	219,421	$	183,102


Current portion of finance lease obligations	6,251		6,206
Current portion of operating lease liabilities	2,508		2,829
Current portion of long-term debt	2,500		2,500
Other current liabilities	15,492		16,150
Total current liabilities	246,172		210,787
Other long-term liabilities:
Long-term debt	16,750		19,375
Asset retirement obligations	2,529		2,514
Finance lease obligations	18,087		19,685
Operating lease liabilities	2,883		3,006
Deferred taxes and other liabilities	12,756		13,251
Total liabilities	299,177		268,618

Commitments and contingencies (Note 14)

Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding	—		—
Common stock – $0.10 par value, 7,500,000 shares
authorized, 2,566,649 and 2,547,154 shares outstanding, respectively	255		253
Contributed capital	21,879		21,802
Retained earnings	69,520		70,661
Total shareholders’ equity	91,654		92,716
Total liabilities and shareholders’ equity	$	390,831	$	361,334

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)


	Three Months Ended
	March 31,
	2024		2023
Revenues:
Marketing	$	623,824	$	608,476
Transportation	23,231		26,445
Pipeline and storage	4		—
Logistics and repurposing	13,991		15,241
Total revenues	661,050		650,162

Costs and expenses:
Marketing	615,591		604,494
Transportation	20,150		22,413
Pipeline and storage	697		938
Logistics and repurposing	13,837		13,125
General and administrative	4,781		4,772
Depreciation and amortization	6,355		7,050
Total costs and expenses	661,411		652,792

Operating losses	(361)		(2,630)

Other income (expense):
Interest and other income	561		204
Interest expense	(793)		(696)
Total other income (expense), net	(232)		(492)

Losses before income taxes	(593)		(3,122)
Income tax benefit	95		1,123

Net losses	$	(498)	$	(1,999)

Losses per share:
Basic net losses per common share	$	(0.19)	$	(0.79)
Diluted net losses per common share	$	(0.19)	$	(0.79)


Dividends per common share	$	0.24	$	0.24

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended
	March 31,
	2024		2023
Operating activities:
Net losses	$	(498)	$	(1,999)
Adjustments to reconcile net losses to net cash
provided by operating activities:
Depreciation and amortization	6,355		7,050
Gains on sales of property	(337)		(31)
Provision for credit losses	(23)		(3)
Stock-based compensation expense	307		283

Deferred income taxes	(504)		(1,424)
Net change in fair value contracts	—		(487)
Changes in assets and liabilities:
Accounts receivable	(20,978)		30,916
Accounts receivable/payable, affiliates	—		(31)
Inventories	(7,499)		4,644

Prepayments and other current assets	565		90
Accounts payable	36,291		(12,653)
Accrued liabilities	(599)		(2,514)
Other	(17)		(134)
Net cash provided by operating activities	13,063		23,707

Investing activities:
Property and equipment additions	(6,152)		(1,900)

Proceeds from property sales	962		441

Net cash used in investing activities	(5,190)		(1,459)

Financing activities:
Borrowings under Credit Agreement	—		18,000
Repayments under Credit Agreement	(2,625)		(18,625)
Principal repayments of finance lease obligations	(1,553)		(1,576)

Net proceeds from sale of equity	—		549
Dividends paid on common stock	(674)		(681)
Net cash used in financing activities	(4,852)		(2,333)

Increase in cash and cash equivalents, including restricted cash	3,021		19,915
Cash and cash equivalents, including restricted cash, at beginning of period	45,246		31,067
Cash and cash equivalents, including restricted cash, at end of period	$	48,267	$	50,982

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except per share data)


							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity

Balance, January 1, 2024	$	253	$	21,802	$	70,661	$	92,716
Net losses	—		—		(498)		(498)
Stock-based compensation expense	—		307		—		307
Vesting of restricted awards	3		(3)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	(1)		(227)		—		(228)


Dividends declared:
Common stock, $0.24/share	—		—		(615)		(615)
Awards under LTIP, $0.24/share	—		—		(28)		(28)
Balance, March 31, 2024	$	255	$	21,879	$	69,520	$	91,654


							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity

Balance, January 1, 2023	$	248	$	19,965	$	72,964	$	93,177
Net losses	—		—		(1,999)		(1,999)
Stock-based compensation expense	—		283		—		283
Vesting of restricted awards	3		(3)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(222)		—		(222)
Shares sold under at-the-market offering
program	1		548		—		549
Dividends declared:
Common stock, $0.24/share	—		—		(608)		(608)
Awards under LTIP, $0.24/share	—		—		(25)		(25)
Balance, March 31, 2023	$	252

SEC Form 10-Q filed by Adams Resources & Energy Inc.