<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, 1997 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, 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 12, 1997 was 4,213,596.
<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,
------------------------
1997 1996
---------- ---------
<S> <C> <C>
Revenues:
Marketing ...................................... $ 484,612 $ 278,203
Transportation ................................. 6,690 5,215
Oil and Gas .................................... 2,843 1,483
--------- ---------
494,145 284,901
--------- ---------
Costs and expenses:
Operating
Marketing ..................................... 483,547 276,480
Transportation ................................ 5,293 4,508
Oil and gas ................................... 435 384
Corporate general and administrative ........... 536 693
Depreciation, depletion and amortization ....... 1,613 1,245
--------- ---------
491,424 283,310
--------- ---------
Operating earnings ............................... 2,721 1,591
Other income (expense)
Property sales and other ....................... 354 159
Interest ....................................... (87) (182)
--------- ---------
Earnings before income taxes ..................... 2,988 1,568
Income tax provision
Current ........................................ 131 83
Deferred ....................................... 975 450
--------- ---------
1,106 533
--------- ---------
Net earnings ..................................... $ 1,882 $ 1,035
========= =========
Net earnings per common share .................... $ .45 $ .25
========= =========
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 $206,409,000 or 74%, in the comparative current period as a result of
(a) increased average crude oil prices, (b) increased volumes of crude oil
purchased at the wellhead, and (c) more active crude oil trading effort.
Compared to last year's first quarter, average crude oil sales prices were
increased by approximately 25% in 1997. Average wellhead purchases were
60,000 barrels per day in 1997 versus 55,000 barrels per day in 1996.
Marketing division operating margins before depreciation for the first
three months of 1997 were reduced to $1,065,000 versus $1,723,000 in the
similar 1996 period. This result was because of a reversal of the
unusually favorable market demand conditions that existed in 1996. During
the first quarter of last year, there were a number of spot market
shortages of crude oil that served to temporarily increase the Company's
margins.
- Transportation
Transportation revenues and operating earnings before depreciation
increased as follows:
<TABLE>
<CAPTION>
First Quarter First Quarter Percentage
1997 1996 Increase
------------- ------------- -----------
<S> <C> <C> <C>
Revenues $6,690,000 $5,215,000 28%
Operating earnings
before depreciation $1,397,000 $ 707,000 98%
</TABLE>
The revenue increase resulted from generally strong customer
demand during the current quarter. Operating earnings improved as a
direct result of the increased demand. Because of the fixed cost
component of the company's transportation operation, on a percentage
basis, operating earnings will improve at a faster rate than revenues.
- Oil and Gas
Oil and gas revenues and operating earnings increased for the
comparative current first quarter primarily as a result of increased
natural gas prices and volumes. Production volumes increased as a direct
result of the Company's drilling efforts during 1996. Volumes and prices
compare as follows:
-3-
<PAGE> 4
<TABLE>
<CAPTION>
First Quarter First Quarter
1997 1996
------------- -------------
<S> <C> <C>
Crude oil
Volume 20,000 Bbls. 19,900 Bbls.
Average price $ 23.03/Bbl. $ 17.61/Bbl.
Natural gas
Volume 920,000 Mcf 620,000 Mcf
Average price, includes value
of associated gas liquids $ 3.13 Mcf $ 1.79 Mcf
</TABLE>
- 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. Gains on property
sales of $354,000 and $159,000 respectively, were realized on the sale of
twenty-one truck tractors in 1997 and seven tank trailers in 1996.
Interest expense is reduced in 1997 because the Company has used its
excess cash flow to reduce its level of long term debt.
Liquidity and Capital Resources
During the first three months of 1997, the Company invested
$1,001,000 in property equipment additions with $411,000 going towards oil
and gas drilling efforts and the remainder for various marketing and
transportation equipment items. Funding for these investments was derived
from the Company generating $4,068,000 of working capital funds. The
$3,165,000 of excess cash flow generated was utilized 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, 1996
for additional discussion of the Company's bank relationships, tax
carryforwards and other matters.
-4-
<PAGE> 5
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ....................... $ 4,292 $ 3,782
Accounts receivable, net ........................ 69,630 80,238
Inventories ..................................... 4,583 4,867
Prepaid and other ............................... 905 1,116
Deferred income taxes ........................... 500 1,475
--------- ---------
Total current assets .............. 79,910 91,478
--------- ---------
Property and equipment ............................ 44,449 43,607
Less - accumulated depreciation,
depletion and amortization ............... (26,965) (25,440)
--------- ---------
17,484 18,167
--------- ---------
Other assets ...................................... 1,222 1,237
--------- ---------
$ 98,616 $ 110,882
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................ $ 67,592 $ 77,449
Accrued and other liabilities ................... 2,391 3,481
Current maturities of long-term debt ............ 64 64
--------- ---------
Total current liabilities ................ 70,047 80,994
Long-term debt, less current maturities ........... 2,990 6,171
Other liabilities ................................. 894 957
--------- ---------
73,931 88,122
Shareholders' equity:
Preferred stock - $1.00 par value, 960,000 shares
authorized, none outstanding ................ -- --
Common stock - $.10 par value, 7,500,000
shares authorized, 4,213,596 and 4,203,346
shares outstanding respectively ............. 421 420
Contributed capital ............................. 11,670 11,628
Retained earnings since December 31, 1992 ....... 12,594 10,712
--------- ---------
Total shareholders' equity ............... 24,685 22,760
--------- ---------
$ 98,616 $ 110,882
========= =========
</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,
--------------------
1997 1996
-------- --------
<S> <C> <C>
CASH PROVIDED (USED) BY OPERATIONS:
Net earnings ............................................. $ 1,882 $ 1,035
Items of income not requiring (providing) cash -
Depreciation, depletion and amortization ............... 1,613 1,245
Deferred income tax provision .......................... 975 450
Gain on sale of properties ............................. (354) (159)
Other, net ............................................. (48) (323)
Decrease (increase) in accounts receivable ............... 10,608 (12,345)
Decrease (increase) in inventories ....................... 284 (718)
Decrease (increase) in prepaid and other ................. 211 (239)
Increase (decrease) in accounts payable .................. (9,857) 12,823
Increase (decrease) in accrued liabilities ............... (1,090) (22)
-------- --------
Net cash provided (required) by operating activities ... 4,224 1,747
-------- --------
INVESTING ACTIVITIES:
Property and equipment additions ......................... (1,001) (1,988)
Proceeds from property sales ............................. 425 239
-------- --------
Net cash provided by (used in) investing activities .... (576) (1,749)
-------- --------
FINANCING ACTIVITIES:
Repayment of debt ........................................ (3,181) (427)
Sales of stock ........................................... 43 --
-------- --------
Net cash provided by (used in) financing activities .... (3,138) (427)
-------- --------
Increase (decrease) in cash and cash equivalents ........... 510 (429)
Cash at beginning of period ................................ 3,782 4,037
-------- --------
Cash at end of period ...................................... $ 4,292 $ 3,608
======== ========
Supplemental disclosure of cash flow information:
Interest paid during the period .......................... $ 87 $ 182
======== ========
Income taxes paid during the period ...................... $ 10 $ --
======== ========
</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, 1997 and December 31, 1996 and results of operations and
cash flows for the three months ended March 31, 1997 and 1996. 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 1997 Annual Meeting of Stockholders (the "Meeting") of the Company
was held on April 23, 1997. 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 4,213,596 shares of Common Stock entitled to vote at the
Meeting, there were 3,875,682 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 12, 1997 By: /s/ K. S. Adams, Jr.
-------------------------------
K. S. Adams, Jr.
Chief Executive Officer
/s/ Richard B. Abshire
-------------------------------
Richard B. Abshire
Chief Financial Officer
-9-
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Adams Resources & Energy, Inc.
Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,292
<SECURITIES> 0
<RECEIVABLES> 69,737
<ALLOWANCES> (107)
<INVENTORY> 4,583
<CURRENT-ASSETS> 79,910
<PP&E> 44,449
<DEPRECIATION> (26,965)
<TOTAL-ASSETS> 98,616
<CURRENT-LIABILITIES> 70,047
<BONDS> 2,990
0
0
<COMMON> 421
<OTHER-SE> 24,264
<TOTAL-LIABILITY-AND-EQUITY> 98,616
<SALES> 494,145
<TOTAL-REVENUES> 494,145
<CGS> 489,275
<TOTAL-COSTS> 491,424
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> 2,988
<INCOME-TAX> 1,106
<INCOME-CONTINUING> 1,882
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,882
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
