<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995 or
/ / 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 1-7908
ADAMS RESOURCES & ENERGY, INC.
(Exact name of Registrant as specified in its charter)
Delaware 74-1753147
- - - - - - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6910 Fannin, Houston, Texas 77030
Address of principal executive office & Zip Code)
Registrant's telephone number, including area code (713) 797-9966
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 X No ______
The number of shares of Common Stock of the Registrant, par value $.10 per
share, outstanding at May 1, 1995 was 4,182,096.
<PAGE> 2
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1995 1994
--------- ----------
<S> <C> <C>
Revenues:
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $154,779 $130,108
Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,510 4,867
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,612 684
--------- ----------
161,901 135,659
--------- ----------
Costs and expenses:
Operating
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,083 129,490
Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,839 4,080
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 174
Corporate general and administrative . . . . . . . . . . . . . . . . . 571 546
Depreciation, depletion and amortization . . . . . . . . . . . . . . . 892 415
--------- ----------
160,765 134,705
--------- ----------
Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,136 954
Other income (expense):
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88) (20)
--------- ----------
(88) (20)
--------- ----------
Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . 1,048 934
Income tax provision
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 36
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 300
--------- ----------
389 336
--------- ----------
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 659 $ 598
========= ==========
Earnings per common share . . . . . . . . . . . . . . . . . . . . . . . $ .16 $ .14
========= ==========
Dividends per common share . . . . . . . . . . . . . . . . . . . . . . . $ - $ -
========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Comparison
- Marketing
Gross revenues for the Company's Marketing operations increased by
$24,671,000, or 19%, in the comparative current period as a result of generally
higher overall world crude oil prices. In contrast to higher crude oil prices,
the Company's purchases of crude oil at the wellhead remained consistent at
approximately 45,000 barrels per day. The Company's strategy for crude oil
marketing is to link purchase and sales contracts to established quotations
(postings) that move with general market trends. In this manner, profitability
is based on the spread between the going price paid to suppliers at the
wellhead and the price received from customers at various delivery points less
transportation. Thus, the Company is substantially insulated from the impact
of general movements in world crude oil prices. Because of the Company's crude
oil marketing strategy, higher world crude oil prices had little or no impact
on current operating margins. Marketing division operating margins for the
first three months of 1995 were $696,000 versus $618,000 in the similar 1994
period.
- Transportation
Although strong demand caused transportation revenues to increase by
13% to $5,510,000 for the first three months of 1995, operating margins
decreased by 15 % to $671,000. Reduced earnings were primarily caused by a
one-time $125,000 charge to write-off the Company's State of Texas operating
authority following deregulation of intrastate trucking rates which went into
effect on January 1, 1995. The Company had purchased the authority in the
1960's in order to obtain access to the Texas marketplace. With decontrol of
rates, maintaining of such authority is no longer necessary. Excluding the
effects of decontrol on the fair value of the Company's operating authority,
the Company has not experienced any adverse effects from decontrol.
- Oil and Gas
Oil and gas revenues and operating earnings were each increased by
approximately 140% to $1,612,000 and $1,232,000 respectively as a direct result
of increased oil and gas production
- 3 -
<PAGE> 4
volumes stemming from the Company's recent drilling efforts. Volumes and
prices compare as follows:
<TABLE>
<CAPTION>
First Quarter First Quarter
1995 1994
------------- -------------
<S> <C> <C>
Crude Oil
Volume 27,500 Bbls. 17,500 Bbls.
Average price $ 15.20/Bbl. $ 12.85/Bbl.
Natural Gas
Volume 700,000 Mcf 220,000 Mcf
Average price, includes value
of associated gas liquids $ 1.70/Mcf $ 2.00/Mcf
</TABLE>
- Other
The provision for depreciation depletion and amortization is increased
in the current quarter with increased capital costs associated with the
Company's recent oil and gas drilling activity. Interest expense is also
increased because the company increased its level of debt to finance such
drilling activity.
Liquidity and Capital Resources
During the first three months of 1995, the Company invested $3,358,000
in property and equipment additions, with the majority of the investment ($2.4
million) going towards oil and gas drilling efforts. Funding for these
investments was derived, in part, from the Company generating $1,901,000 of
working capital funds, defined as the sum of net earnings plus the non-cash
provisions for depreciation and deferred income taxes not owing as a result of
the Company's tax loss carryforward position. The additional $1,457,000 of
investment was financed through increased bank debt.
Refer to the "Liquidity and Capital Resources" section of the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 for
additional discussion of the Company's bank relationships, tax loss
carryforwards and other matters.
- 4 -
<PAGE> 5
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 1,813 $ 2,695
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . 41,078 35,952
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,722 2,218
Prepaid and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791 552
---------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 47,404 41,417
---------- -----------
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,514 35,230
Less - accumulated depreciation, depletion and amortization . . . . . (16,382) (15,564)
---------- -----------
22,132 19,666
---------- -----------
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 725
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 493
---------- -----------
$ 70,233 $ 62,301
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 41,271 $ 35,420
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . 792 2,387
Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . 1,695 653
---------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . 43,758 38,460
Long-term debt, less current maturities . . . . . . . . . . . . . . . . . . 11,383 9,263
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,194 1,345
---------- -----------
56,335 49,068
---------- -----------
Shareholders' equity:
Preferred stock - $1.00 par value, 1,000,000 shares
authorized, none outstanding . . . . . . . . . . . . . . . . . . . . . . - -
Common stock - $0.10 par value, 7,500,000 shares
authorized, 4,182,096 and 4,180,596 shares out-
standing, respectively . . . . . . . . . . . . . . . . . . . . . . . . . 418 418
Contributed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,476 8,470
Retained earnings, after eliminating $13,931,000 of
accumulated deficit on December 31, 1992 . . . . . . . . . . . . . . . . 5,004 4,345
---------- -----------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . 13,898 13,233
---------- -----------
$ 70,233 $ 62,301
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE> 6
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1994 1995
---------- ---------
<S> <C> <C>
CASH PROVIDED (USED) BY OPERATIONS:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 659 $ 598
Items of income not requiring (providing) cash -
Depreciation, depletion and amortization . . . . . . . . . . . . . . . . 892 415
Deferred income tax provision . . . . . . . . . . . . . . . . . . . . . 350 300
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 (43)
Decrease (increase) in accounts receivable . . . . . . . . . . . . . . . . (5,126) (710)
Decrease (increase) in inventories . . . . . . . . . . . . . . . . . . . . (1,504) (161)
Decrease (increase) in prepaid and other . . . . . . . . . . . . . . . . . (239) (65)
Increase (decrease) in accounts payable . . . . . . . . . . . . . . . . . 5,851 1,397
Increase (decrease) in accrued liabilities . . . . . . . . . . . . . . . . (1,595) (673)
---------- ---------
Net cash provided by (used in) operating activities . . . . . . . . . . (692) 1,058
---------- ---------
INVESTING ACTIVITIES:
Property and equipment additions . . . . . . . . . . . . . . . . . . . . . (3,358) (659)
Proceeds from property sales . . . . . . . . . . . . . . . . . . . . . . . - 296
---------- ---------
Net cash provided by (used in) investing activities . . . . . . . . . . (3,358) (363)
---------- ---------
FINANCING ACTIVITIES:
Borrowings from bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,188 -
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26) (444)
Sales of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 -
---------- ---------
Net cash provided by (used in) financing activities . . . . . . . . . . 3,168 (444)
---------- ---------
Increase (decrease) in cash . . . . . . . . . . . . . . . . . . . . . . . . . (882) 251
Cash and Cash Equivalents at beginning of period . . . . . . . . . . . . . . 2,695 3,323
---------- ---------
Cash and Cash Equivalents at end of period . . . . . . . . . . . . . . . . . $ 1,813 $ 3,574
========== =========
Supplemental disclosure of cash flow information:
Interest paid during the period . . . . . . . . . . . . . . . . . . . . . $ 202 $ 35
========== =========
Income taxes paid during the period . . . . . . . . . . . . . . . . . . . . $ - $ -
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 6 -
<PAGE> 7
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying condensed financial statements are unaudited but, in
the opinion of the Company's management, include all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of financial
position at March 31, 1995 and December 31, 1994 and results of operations and
cash flows for the three months ended March 31, 1995 and 1994. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to Securities and Exchange Commission
rules and regulations, although the Company believes the disclosures made are
adequate to make the information presented not misleading. It is suggested
these condensed financial statements be read in conjunction with the financial
statements, and the notes thereto, included in the Company's latest annual
report on Form 10-K. The interim statement of operations is not necessarily
indicative of results to be expected for a full year.
- 7 -
<PAGE> 8
Item 6. Exhibits and Reports on Form 8K
a. Exhibits - Article 5.
b. Reports on Form 8-K - None.
- 8 -
<PAGE> 9
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 thereunto duly authorized.
ADAMS RESOURCES & ENERGY, INC.
(Registrant)
Date: May 9, 1995 By: K. S. ADAMS, JR.
------------------------- ---------------------------
K. S. Adams, Jr.
Chief Executive Officer
RICHARD B. ABSHIRE
---------------------------
Richard B. Abshire
Chief Financial Officer
- 9 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,813
<SECURITIES> 0
<RECEIVABLES> 41,293
<ALLOWANCES> (215)
<INVENTORY> 3,722
<CURRENT-ASSETS> 47,404
<PP&E> 38,514
<DEPRECIATION> (16,382)
<TOTAL-ASSETS> 70,233
<CURRENT-LIABILITIES> 43,758
<BONDS> 11,383
<COMMON> 418
0
0
<OTHER-SE> 13,480
<TOTAL-LIABILITY-AND-EQUITY> 70,233
<SALES> 161,901
<TOTAL-REVENUES> 161,901
<CGS> 159,302
<TOTAL-COSTS> 160,765
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88
<INCOME-PRETAX> 1,048
<INCOME-TAX> 389
<INCOME-CONTINUING> 659
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 659
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
