<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, 1996 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.)
5 Post Oak Park, Suite 2700, Houston, Texas 77027
---------------------------------------------------
(Address of principal executive office & Zip Code)
Registrant's telephone number, including area code (713) 881-3600
-----------------
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 13, 1996 was 4,198,098.
<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,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Marketing ..................................... $ 278,203 $ 154,779
Transportation ................................ 5,215 5,510
Oil and gas ................................... 1,483 1,612
---------- ----------
284,901 161,901
---------- ----------
Costs and expenses:
Operating
Marketing ................................... 276,480 154,083
Transportation .............................. 4,508 4,839
Oil and gas ................................. 384 380
Corporate general and administrative .......... 693 571
Depreciation, depletion and amortization ...... 1,245 892
---------- ----------
283,310 160,765
---------- ----------
Operating earnings .............................. 1,591 1,136
Other income (expense):
Property sales and other ..................... 159 --
Interest ..................................... (182) (88)
---------- ----------
(23) (88)
---------- ----------
Earnings before income taxes .................... 1,568 1,048
Income tax provision
Current ....................................... 83 39
Deferred ...................................... 450 350
---------- ----------
533 389
---------- ----------
Net earnings .................................... $ 1,035 $ 659
========== ==========
Net earnings per common share ................... $ .25 $ .16
========== ==========
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
$123,424,000, or 80%, in the comparative current period as a result of (a)
increased overall world crude oil prices and (b) increased volumes of crude oil
purchased at the wellhead, and (c) a more active crude oil trading effort.
Average crude oil prices increased approximately $2 per barrel for the
comparative period while average wellhead purchases increased to 55,000 barrels
per day in 1996 versus 45,000 per day in 1995. Marketing division operating
margins before depreciation for the first three months of 1996 were $1,723,000
versus $696,000 in the similar 1995 period as a result of the combination of
factors discussed above.
- Transportation
Transportation revenues and earnings showed little variation between
the comparative periods as market place conditions remained consistent.
- Oil and Gas
Oil and gas revenues and operating earnings decreased for the
comparative current first quarter by approximately 10% to $1,483,000 and
$1,099,000 respectively, as a result of reduced oil and gas production volumes.
Volumes and prices compare as follows:
<TABLE>
<CAPTION>
First Quarter First Quarter
1996 1995
------------- -------------
<S> <C> <C>
Crude oil
Volume 19,900 Bbls. 27,500 Bbls.
Average price $ 17.61/Bbl. $ 15.20/Bbl.
Natural gas
Volume 620,000 Mcf 700,000 Mcf
Average price, includes value
of associated gas liquids $ 1.79 Mcf $ 1.70 Mcf
</TABLE>
3
<PAGE> 4
- Other income (expense)
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. Property sales and other
earnings of $159,000 result from a gain realized on the sale of seven tank
trailers. Interest expense increased because the company increased its level
of debt to finance drilling activity.
Liquidity and Capital Resources
During the first three months of 1996, the Company invested $1,988,000
in property equipment additions with $700,000 of such investment being for the
purchase of a refined products warehouse and $681,000 going towards oil and gas
drilling efforts. Funding for these investments was derived from the Company
generating $2,730,000 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 $742,000 of excess cash flow generated was utilized primarily to reduce
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, 1995 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,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 3,608 $ 4,037
Accounts receivable, net .................................... 62,829 50,484
Inventories ................................................. 3,895 3,177
Prepaid and other ........................................... 1,259 1,020
------------ ------------
Total current assets ........................... 71,591 58,718
------------ ------------
Property and equipment ........................................ 41,643 40,011
Less - accumulated depreciation,
depletion and amortization ........................ (22,036) (21,067)
------------
19,607 18,944
------------ ------------
Deferred income taxes ......................................... 1,615 2,065
Other assets .................................................. 1,020 705
------------ ------------
$ 93,833 $ 80,432
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................ $ 62,360 $ 49,537
Accrued and other liabilities ............................... 2,394 2,416
Current maturities of long-term debt ........................ 1,735 1,650
------------ ------------
Total current liabilities ...................... 66,489 53,603
Long-term debt, less current maturities ....................... 10,077 10,589
Other liabilities ............................................. 554 562
------------ ------------
77,120 64,754
------------ ------------
Shareholders' equity:
Preferred stock - $1.00 par value, 1,000,000 shares
authorized, none outstanding .......................... -- --
Common stock - $.10 par value, 7,500,000
shares authorized, 4,198,098 and 4,197,598 shares
outstanding respectively .............................. 420 420
Contributed capital ......................................... 9,895 9,895
Retained earnings since December 31, 1992 ................... 6,398 5,363
------------ ------------
Total shareholders' equity .................... 16,713 15,678
------------ ------------
$ 93,833 $ 80,432
============ ============
</TABLE>
5
<PAGE> 6
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH PROVIDED (USED) BY OPERATIONS:
Net earnings ......................................... $ 1,035 $ 659
Items of income not requiring (providing) cash -
Depreciation, depletion and amortization ........... 1,245 892
Deferred income tax provision ...................... 450 350
Gain on sale of properties ......................... (159) --
Other, net ......................................... (323) 20
Decrease (increase) in accounts receivable ........... (12,345) (5,126)
Decrease (increase) in inventories ................... (718) (1,504)
Decrease (increase) in prepaid and other ............. (239) (239)
Increase (decrease) in accounts payable .............. 12,823 5,851
Increase (decrease) in accrued liabilities ........... (22) (1,595)
---------- ----------
Net cash provided (required) by operating
activities ..................................... 1,747 (692)
---------- ----------
INVESTING ACTIVITIES:
Property and equipment additions ..................... (1,988) (3,358)
Proceeds from property sales ......................... 239 --
---------- ----------
Net cash provided used in investing activities .... (1,749) (3,358)
---------- ----------
FINANCING ACTIVITIES:
Borrowings from bank ................................. -- 3,188
Repayment of debt .................................... (427) (26)
Sales of stock ....................................... -- 6
---------- ----------
Net cash provided by (used in) financing
activities ....................................... (427) 3,168
---------- ----------
Increase (decrease) in cash and cash equivalents ....... (429) (882)
Cash at beginning of period ............................ 4,037 2,695
---------- ----------
Cash at end of period .................................. $ 3,608 $ 1,813
========== ==========
Supplemental disclosure of cash flow information:
Interest paid during the period .................... $ 182 $ 202
========== ==========
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, 1996 and December 31, 1995 and results of operations and
cash flows for the three months ended March 31, 1996 and 1995. 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
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. - None
Item 2. - None
Item 3. - None
Item 4. - Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of Stockholders (the "Meeting") of the Company
was held on April 24, 1996. At the Meeting, holders of common stock, $ .10 par
value, of the Company ("Common Stock"), elected nine members of the Company's
Board of Directors.
Out of the 4,198,098 shares of Common Stock entitled to vote at the
Meeting, there were 3,638,081 shares of Common Stock voted for the election of
the nominees for Directors listed in the proxy statement.
Item 6. Exhibits and Reports on Form 8K
a. Exhibits - None.
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 13, 1996 By: K. S. ADAMS, JR.
------------------------------ ---------------------
K. S. Adams, Jr.
Chief Executive Officer
RICHARD B. ABSHIRE
------------------------
Richard B. Abshire
Chief Financial Officer
9
<PAGE> 10
INDEX TO EXHIBITS
27 -- Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,608
<SECURITIES> 0
<RECEIVABLES> 63,014
<ALLOWANCES> (185)
<INVENTORY> 3,895
<CURRENT-ASSETS> 71,591
<PP&E> 41,643
<DEPRECIATION> (22,036)
<TOTAL-ASSETS> 98,833
<CURRENT-LIABILITIES> 66,489
<BONDS> 10,077
<COMMON> 420
0
0
<OTHER-SE> 16,293
<TOTAL-LIABILITY-AND-EQUITY> 93,833
<SALES> 284,901
<TOTAL-REVENUES> 284,901
<CGS> 281,372
<TOTAL-COSTS> 283,310
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> 1,568
<INCOME-TAX> 533
<INCOME-CONTINUING> 1,035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,035
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
