Adams Resources & Energy, Inc. Quarterly Report for the Period Ended March 31, 2024

Press release · 05/09 17:19
Adams Resources & Energy, Inc. Quarterly Report for the Period Ended March 31, 2024

Adams Resources & Energy, Inc. Quarterly Report for the Period Ended March 31, 2024

In the first quarter of 2024, Adams Resources & Energy, Inc. and its subsidiaries experienced a decline in revenue and an increase in net loss. The company’s unaudited condensed consolidated balance sheet and statements of operations and cash flows indicate a decrease in cash and cash equivalents, along with a decline in total assets. The company’s financial condition and results of operations are discussed in detail in the management’s discussion and analysis section.

Overview of Company Performance

  • Total revenues were $51.6 million in Q1 2024, a decrease from $59.9 million in Q1 2023. This was mainly driven by lower crude oil volumes in the marketing segment.
  • Net earnings were $1.2 million in Q1 2024 compared to $3.6 million in Q1 2023. Lower crude oil volumes and some increases in operating costs led to the decline.

Segment Analysis

Crude Oil Marketing

  • Revenues were $63.8 million in Q1 2024 versus $68.1 million in Q1 2023. Lower crude oil volumes following a contract expiration more than offset an increase in crude oil prices.
  • Field level operating earnings, which exclude inventory valuation changes, were $4.9 million in Q1 2024 compared to $2.4 million in Q1 2023. Higher crude prices and lower operating costs offset lower volumes.
Q1 2024 Q1 2023 Change
Revenues ($, millions) 63.8 68.1
Field Level Operating Earnings ($, millions) 4.9 2.4

Transportation

  • Revenues were $23.2 million in Q1 2024, down 12% from $26.4 million in Q1 2023, driven by lower volumes and rates.
  • Operating earnings declined 76% to $0.2 million in Q1 2024 from $0.9 million in Q1 2023 due to the revenue declines and higher fuel costs.

Pipeline and Storage

  • Operating losses narrowed 20% from $1.2 million in Q1 2023 to $1.0 million in Q1 2024 due to lower operating costs.

Logistics and Repurposing

  • Revenues declined 8% from $15.2 million in Q1 2023 to $14.0 million in Q1 2024, with a revenue increase at Firebird offset by a decrease at Phoenix.
  • The segment swung from operating earnings of $0.5 million in Q1 2023 to an operating loss of $1.5 million in Q1 2024, driven by the Phoenix revenue decline and higher costs.

Liquidity and Capital Resources

  • Cash and liquidity remain strong, with cash increasing 10% since year-end 2023 to $36.6 million at March 31, 2024.
  • Total debt outstanding is $19.3 million, representing the remaining principal balance on a term loan. No amounts were drawn on the $60 million revolving credit facility.

Outlook

  • Crude oil price volatility is expected to continue, creating uncertainty and inventory valuation changes.
  • Transportation markets remain soft but cost control efforts are underway. Storage and logistics investments position us for long-term growth.
  • Strong cash flows and balance sheet flexibility provide stability and allow us to withstand industry volatility.

Strengths and Weaknesses

Strengths

  • Strong balance sheet and liquidity position
  • Flexible capital expenditure strategy to respond to market conditions
  • Integrated business model provides some stability across cycles
  • Experienced management team with expertise across segments

Weaknesses

  • Exposure to crude oil price volatility
  • Transportation business facing market softness
  • Logistics segment still developing scale and synergies

Tables and Data

Crude Oil Inventory (barrels)

March 31, 2024 December 31, 2023
329,287 267,731

Average Crude Oil Price (per barrel)

Q1 2024 Q1 2023
$75.35 $73.27

Cash and Cash Equivalents ($, millions)

March 31, 2024 December 31, 2023
36.6 33.3

Capital Expenditures ($, millions)

Q1 2024 Q1 2023
Crude Oil Marketing 2.9
Transportation 2.9
Pipeline and Storage 0.1
Logistics and Repurposing 0.2
Total 6.2