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<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 June 30, 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 July 31, 1996 was 4,198,098.
- 1 -
<PAGE> 2
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------------- ----------------------------------
1996 1995 1996 1995
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUE:
Marketing $ 654,661 $ 339,242 $ 376,458 $ 184,463
Transportation 10,489 11,003 5,274 5,493
Oil and gas 3,768 3,676 2,285 2,064
-------------- -------------- ------------- -------------
668,918 353,921 384,017 192,020
-------------- -------------- ------------- -------------
COSTS AND EXPENSES:
Operating
Marketing 648,915 337,798 372,435 183,715
Transportation 9,029 9,578 4,521 4,739
Oil and gas 777 764 393 384
Corporate general and administrative 1,303 1,054 610 483
Depreciation, depletion and amortization 4,389 2,720 3,144 1,828
-------------- -------------- ------------- -------------
664,413 351,914 381,103 191,149
-------------- -------------- ------------- -------------
Operating earnings 4,505 2,007 2,914 871
OTHER INCOME (EXPENSE):
Property sales and other 166 - 7 -
Interest (372) (216) (190) (128)
-------------- -------------- ------------- -------------
(206) (216) (183) (128)
-------------- -------------- ------------- -------------
Earnings before income taxes 4,299 1,791 2,731 743
Income tax provision
Current 207 79 124 40
Deferred 1,350 600 900 250
-------------- -------------- ------------- -------------
1,557 679 1,024 290
-------------- -------------- ------------- -------------
NET EARNINGS $ 2,742 $ 1,112 $ 1,707 $ 453
============== ============== ============= =============
EARNINGS PER COMMON SHARE $ .65 $ .27 $ .40 $ .11
============== ============== ============= =============
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
Six Months Comparison
- Marketing
Gross revenues for the Company's Marketing operations increased by
$315,419,000, or 93%, in the comparative current period as a result of (i)
increased overall world crude oil prices, (ii) increased volumes of crude
purchased at the wellhead, and (iii) a more active crude oil trading effort.
Average crude oil prices increased approximately $2.65 per barrel for the
comparative period while average wellhead purchases increased to 55,000 barrels
per day in 1996 versus 45,000 barrels per day in 1995. Marketing division
operating margins before depreciation for the first six months of 1996 were
$5,746,000 versus $1,444,000 in the similar 1995 period, partially as a result
of the combination of events discussed above. The most significant factor
affecting 1996 operating margins, however, was a severe crude oil shortage
situation that existed in the mid-continent region of the United States. As a
supplier of crude oil to the region, this demand condition served to
temporarily improve the Company's margins. As the crude oil market place
returns to a more normal balance between supply and demand, the Company's level
of Marketing earnings are expected to return to its historic pattern.
- Transportation
Transportation revenues and earnings experienced little variation between
the comparative periods as market place conditions remained consistent.
- Oil and Gas
Oil and gas revenues and operating earnings before depreciation experienced
little variation between the comparative periods. Volumes and prices compare
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
------------------------------------ ------------------------------------
1996 1995 1996 1995
----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Crude Oil
Volume 44,400 Bbls. 58,500 Bbls. 24,500 Bbls. 31,000 Bbls.
Average price $18.77/Bbl. $16.15/Bbl. $19.72/Bbl. $16.99/Bbl.
Natural gas
Volume 1,520,000 Mcf's 1,700,000 Mcf's 900,000 Mcf's 1,100,000 Mcf's
Average price, includes
value of associated gas
liquids $1.91/Mcf $1.54/Mcf $2.00/Mcf $1.40/Mcf
</TABLE>
- 3 -
<PAGE> 4
- Other
The provision for depreciation, depletion and amortization is increased in
the current period with increased capitalized costs associated with the
Company's recent oil and gas drilling activity. In addition, during the
second quarter of 1996, the Company recognized a $1,167,000 asset impairment on
certain refined product marketing facilities and equipment. The impairment was
recorded because of continued operating and cash flow losses associated with
these assets.
Property sales and other earnings of $166,000 resulted from a gain realized
on the sale of seven tank trailers.
Three Month Comparison
Variations for the comparative three month period ended June 30, 1996, are
consistent with the discussion above.
Liquidity and Capital Resources
During the first six months of 1996, the Company invested $3,370,000 in
property equipment additions with $1,674,000 of such investments going towards
oil and gas drilling efforts. Funding for these investments was derived from
the Company generating $8,315,000 of working capital, defined as the sum of net
cash 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 $4,945,000 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>
June 30, December 31,
1996 1995
------------------ ------------------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 2,506 $ 4,037
Accounts receivable, net 68,789 50,484
Inventories 3,453 3,177
Prepaid and other 1,003 1,020
---------------- ----------------
Total Current Assets 75,751 58,718
---------------- ----------------
Property and equipment 41,158 40,011
Less - accumulated depreciation, depletion and amortization (23,788) (21,067)
---------------- ----------------
17,370 18,944
---------------- ----------------
Deferred income taxes 715 2,065
Other assets 1,292 705
---------------- ----------------
$ 95,128 $ 80,432
---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 66,793 $ 49,537
Accrued and other liabilities 1,882 2,416
Current maturities of long-term debt 2,421 1,650
---------------- ----------------
Total current liabilities 71,096 53,603
Long-term debt, less current maturities 5,073 10,589
Other liabilities 538 562
---------------- ----------------
76,707 64,754
---------------- ----------------
SHAREHOLDERS' EQUITY
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, after eliminating $13,931,000 of
accumulated deficit on December 31, 1992 8,106 5,363
---------------- ----------------
Total shareholders' equity
18,421 15,678
---------------- ----------------
$ 95,128 $ 80,432
================ ================
</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>
SIX MONTHS ENDED
JUNE 30,
----------------------------------
1996 1995
-------------- -------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS
Net earnings $ 2,742 $ 1,112
Items of income not requiring (providing) cash -
Depreciation, depletion and amortization 4,389 2,720
Deferred income tax provision 1,350 600
Gain on sale of properties (166) -
Other, net (478) (91)
Decrease (increase) in accounts receivable (18,305) (6,907)
Decrease (increase) in inventories (276) (914)
Decrease (increase) in prepaid and other 17 (281)
Increase (decrease) in accounts payable 17,256 7,585
Increase (decrease) in accrued liabilities (534) (1,213)
------------ -------------
Net cash provided by operating activities 5,995 2,611
------------ -------------
INVESTING ACTIVITIES
Property and equipment additions (3,370) (4,935)
Proceeds from property sales 589 -
------------ -------------
Net cash (required) by investing activities (2,781) (4,935)
------------ -------------
FINANCING ACTIVITIES
Borrowings from bank - 2,065
Repayment of debt (4,745) (358)
Sales of stock - 10
------------ -------------
Net cash provided by (used in) financing activities (4,745) 1,717
------------ -------------
Increase (decrease) in cash (1,531) (607)
Cash at beginning of period 4,037 2,695
------------ -------------
Cash at end of period $ 2,506 $ 2,088
============ =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid during the period $ 388 $ 486
============ =============
Income taxes paid during the period $ 132 $ 136
============ =============
</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 June 30, 1996 and December 31, 1995 and results of operations and
cash flows for the six months ended June 30, 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
that 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. - None
Item 5. - None
Item 6. - Exhibits and Reports on Form 8K
a. Exhibits - Article 5.
b. Reports on Form 8-K - None.
- 8 -
<PAGE> 9
SIGNATURES
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: August 5, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,506
<SECURITIES> 0
<RECEIVABLES> 68,979
<ALLOWANCES> (190)
<INVENTORY> 3,453
<CURRENT-ASSETS> 75,751
<PP&E> 41,158
<DEPRECIATION> (23,788)
<TOTAL-ASSETS> 95,128
<CURRENT-LIABILITIES> 71,096
<BONDS> 5,073
<COMMON> 420
0
0
<OTHER-SE> 18,001
<TOTAL-LIABILITY-AND-EQUITY> 95,128
<SALES> 668,918
<TOTAL-REVENUES> 669,084
<CGS> 658,721
<TOTAL-COSTS> 664,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 372
<INCOME-PRETAX> 4,299
<INCOME-TAX> 1,557
<INCOME-CONTINUING> 2,742
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,742
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
</TABLE>
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