Earnings Performance - Adams Resources & Energy (AE) reported a quarterly loss of $0.87 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.21 and a year-ago loss of $0.23 per share [1] - The company delivered an earnings surprise of -314.29% this quarter, compared to a positive surprise of 13.64% in the previous quarter [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [1] Revenue Performance - Adams Resources posted revenues of $718.49 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 11.53% and exceeding year-ago revenues of $624.77 million [1] - The company has topped consensus revenue estimates four times over the last four quarters [1] Stock Performance - Adams Resources shares have lost about 6.4% since the beginning of the year, underperforming the S&P 500's gain of 9.9% [2] Earnings Outlook - The current consensus EPS estimate is -$0.17 on $650.89 million in revenues for the coming quarter and -$0.53 on $2.66 billion in revenues for the current fiscal year [4] - The estimate revisions trend for Adams Resources is mixed, resulting in a Zacks Rank 3 (Hold) for the stock [4] Industry Outlook - The Zacks Industry Rank places Oil and Gas - Refining and Marketing in the bottom 11% of the 250 plus Zacks industries [5] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [5] Peer Comparison - Tellurian Inc (TELL), another company in the same industry, is expected to post a quarterly loss of $0.04 per share, representing a year-over-year improvement of +63.6% [5] - Tellurian Inc's revenues are expected to be $22.43 million, down 29.9% from the year-ago quarter [5]

Crude Oil Marketing Performance - Crude oil marketing revenues increased by $97.6 million (17%) in Q2 2024 compared to Q2 2023, driven by higher crude oil prices, which added $352.5 million, partially offset by lower volumes, which reduced revenues by $254.9 million[113][115] - Average crude oil purchase price rose to $79.56 per barrel in Q2 2024 from $70.27 per barrel in Q2 2023, primarily due to OPEC production cuts and geopolitical events[114][115] - Crude oil field level purchase volumes decreased to 67,099 barrels per day in Q2 2024 from 92,152 barrels per day in Q2 2023, largely due to the expiration of a five-year contract in the Red River area[114][116] - Operating earnings for crude oil marketing increased by $2.2 million (66%) in Q2 2024 compared to Q2 2023, driven by higher crude oil prices and lower costs, partially offset by reduced volumes[113][118] - Crude oil marketing revenues increased by $112.9 million (9%) in H1 2024 compared to H1 2023, driven by higher crude oil prices, which added $642.8 million, partially offset by lower volumes, which reduced revenues by $529.9 million[113][119] - Operating earnings for crude oil marketing increased by $7.0 million (132%) in H1 2024 compared to H1 2023, driven by inventory valuation changes, higher crude oil prices, and lower costs, partially offset by reduced volumes[113][123] - Field level operating earnings increased to $6,017 million for the three months ended June 30, 2024, compared to $4,489 million in the same period in 2023, driven by higher crude oil prices and lower operating costs[127][128] - Crude oil inventory decreased to 244,871 barrels at an average price of $79.80 per barrel as of June 30, 2024, compared to 267,731 barrels at $72.35 per barrel as of December 31, 2023[128] - Crude oil inventory increased by $0.1 million at June 30, 2024, with the price per barrel rising from $72.35 at December 31, 2023, to $79.80 at June 30, 2024, despite a decrease of 8.5% in the number of barrels held[172] Transportation and Logistics - Transportation revenues decreased by 7% to $22,756 million for the three months ended June 30, 2024, compared to $24,452 million in the same period in 2023, due to lower volumes and transportation rates[130][133] - Transportation operating earnings decreased by 40% to $637 million for the three months ended June 30, 2024, compared to $1,056 million in the same period in 2023, primarily due to lower revenues and higher fuel costs[130][136] - Pipeline and storage revenues increased by 40% to $1,256 million for the three months ended June 30, 2024, compared to $894 million in the same period in 2023, driven by higher volumes transported by GulfMark[141][143] - Pipeline and storage operating losses increased by 53% to $1,188 million for the three months ended June 30, 2024, compared to $779 million in the same period in 2023, due to lower revenues from third-party customers and higher operating costs[141][144] - Pipeline throughput increased to 13,881 barrels per day for the three months ended June 30, 2024, compared to 8,560 barrels per day in the same period in 2023[142] - Terminalling volumes increased to 16,660 barrels per day for the three months ended June 30, 2024, compared to 10,785 barrels per day in the same period in 2023[142] - Firebird revenues increased by 8% to $6.266 million in Q2 2024 compared to $5.784 million in Q2 2023, driven by higher transportation rates and volumes[147][148] - Phoenix revenues decreased by 26% to $6.626 million in Q2 2024 compared to $9.009 million in Q2 2023, primarily due to lower volumes and activity[147][148] - Total revenues decreased by 13% to $12.892 million in Q2 2024 compared to $14.793 million in Q2 2023[147] - Operating losses increased by 2,149% to $(2.991) million in Q2 2024 compared to $(133) thousand in Q2 2023, driven by lower Phoenix revenues and higher insurance costs[147][150] Cost Management and Expenses - Driver compensation decreased by $1.6 million (31%) in Q2 2024 compared to Q2 2023, primarily due to lower volumes and a reduced driver count following the Red River area contract expiration[113][117] - Insurance costs decreased by $0.7 million (41%) in Q2 2024 compared to Q2 2023, driven by fewer insurance claims and a lower driver count[113][117] - Fuel costs decreased by $0.8 million (32%) in Q2 2024 compared to Q2 2023, primarily due to reduced driver count and lower crude oil volumes[113][117] - Depreciation and amortization decreased by $0.7 million (33%) in Q2 2024 compared to Q2 2023, due to the timing of equipment purchases and retirements[113][118] - Fuel costs increased by 18% to $2,564 million for the three months ended June 30, 2024, compared to $2,174 million in the same period in 2023, due to higher fuel prices[130][135] - Insurance costs decreased by 28% to $1,613 million for the three months ended June 30, 2024, compared to $2,246 million in the same period in 2023, due to lower insurance claims and a reduced driver count[130][135] - Insurance costs increased by 270% to $2.369 million in Q2 2024 compared to $640 thousand in Q2 2023, primarily due to insurance claims[147][149] - Driver commissions increased by 20% to $2.519 million in Q2 2024 compared to $2.098 million in Q2 2023, driven by a higher driver count[147][149] - General and administrative expenses increased by $2.7 million in Q2 2024 compared to Q2 2023, primarily due to higher salaries, wages, and related personnel costs[155] Financial Position and Cash Flows - Cash and cash equivalents increased by 16% to $38.512 million as of June 30, 2024, compared to $33.256 million as of December 31, 2023[162] - The company had $15.6 million of borrowings outstanding under the Credit Agreement at a weighted average interest rate of 7.67% as of June 30, 2024[167] - No shares were sold under the ATM Agreement during the six months ended June 30, 2024, and the full $20.0 million capacity remains unsold[168] - Net cash flows from operating activities increased by $25.0 million in the six months ended June 30, 2024, compared to the same period in 2023, primarily due to changes in working capital accounts[172] - Early payments received from customers increased by approximately $12.6 million in the 2024 period, while early payments made to suppliers increased by approximately $2.2 million[172] - Net cash flows used in investing activities increased by $1.7 million in the six months ended June 30, 2024, driven by a $2.6 million increase in capital spending for property and equipment[175] - Capital spending by reporting segment totaled $8.5 million in the six months ended June 30, 2024, compared to $5.9 million in the same period in 2023[177] - Net cash used in financing activities was $10.8 million for the six months ended June 30, 2024, compared to $5.2 million in the same period in 2023, primarily due to increased repayments under the Credit Agreement[178] - Total contractual obligations at June 30, 2024, amounted to $53.3 million, including $18.6 million under the Credit Agreement, $25.3 million in finance lease obligations, and $4.5 million in purchase obligations[181] - The company made principal payments of $6.3 million on the Term Loan during the six months ended June 30, 2024, compared to $1.3 million in the same period in 2023[178] - Cash dividends paid on common shares totaled $1.3 million in both the six months ended June 30, 2024, and 2023, at a rate of $0.48 per common share[178] - The company has no off-balance sheet arrangements that are expected to have a material effect on its financial position, results of operations, or cash flows[183]

Financial Performance - Total revenue for Q2 2024 was $718.5 million, an increase from $624.8 million in Q2 2023, representing a growth of approximately 15.1%[2] - The company reported a net loss of $2.2 million, or $0.87 per common share, compared to a net income of $0.8 million, or $0.33 per common share in Q2 2023[2][16] - EBITDA for the quarter was $3.7 million, while adjusted EBITDA, excluding inventory valuation losses, was $4.2 million[2] - EBITDA for the three months ended June 30, 2024, was $3,745 thousand, down from $9,083 thousand in the same period of 2023, reflecting a decrease of approximately 58.8%[24] - Adjusted EBITDA for the six months ended June 30, 2024, was $8,442 thousand, down from $15,471 thousand in the same period of 2023, a decline of approximately 45.5%[24] Operational Metrics - Crude oil marketing subsidiary GulfMark Energy marketed 67,099 barrels per day in Q2 2024, down from 92,152 bpd in Q2 2023, reflecting a decrease of approximately 27.2%[4] - Throughput in the crude oil pipeline and storage segment was 13,881 bpd, up from 8,560 bpd in Q2 2023, indicating a growth of approximately 62.5%[5] - The collective fleet of Service Transport traveled 6.32 million miles in Q2 2024, slightly up from 6.30 million miles in Q2 2023[4] Cash and Liquidity - The company maintained a cash and cash equivalents balance of $38.5 million, an increase from $33.3 million at the end of 2023[2] - Cash and cash equivalents, including restricted cash, at the end of the period were $49,636 thousand, significantly up from $17,758 thousand at the end of June 30, 2023[22] - The company reported a net cash provided by operating activities of $8,315 thousand for the three months ended June 30, 2024, compared to a net cash used of $(27,315) thousand in the same period of 2023[22] Assets and Liabilities - Total current assets increased to $244,703 thousand as of June 30, 2024, up from $232,471 thousand at December 31, 2023, representing a growth of approximately 5.3%[19] - Total liabilities increased to $277,479 thousand as of June 30, 2024, compared to $268,618 thousand at December 31, 2023, indicating a rise of about 3.2%[19] - Accounts payable increased to $203,833 thousand as of June 30, 2024, compared to $183,102 thousand at December 31, 2023, marking an increase of about 11.4%[19] - Total assets rose to $366,709 thousand as of June 30, 2024, from $361,334 thousand at December 31, 2023, reflecting an increase of approximately 1.0%[19] Capital Expenditures and Dividends - Capital expenditures for Q2 2024 totaled $2.4 million, primarily for equipment purchases and ongoing construction of the Dayton facility[6] - The company declared a quarterly cash dividend of $0.24 per common share, consistent with the previous quarter[6] Inventory and Depreciation - The company holds 244,871 barrels of crude oil inventory as of June 30, 2024, down from 267,731 barrels at the end of 2023[5] - The company incurred depreciation and amortization expenses of $6,180 thousand for the three months ended June 30, 2024, compared to $7,303 thousand for the same period in 2023[22]

Core Viewpoint - Adams Resources & Energy, Inc. reported a net loss of $2.2 million for Q2 2024, despite total revenues of $718.5 million, and declared a quarterly cash dividend of $0.24 per common share [1][2][3]. Financial Summary - Total revenue for Q2 2024 was $718.5 million, compared to $624.8 million in Q2 2023, reflecting an increase [2]. - The company experienced a net loss of $2.2 million, or $0.87 per common share, compared to a profit of $0.83 million in the same quarter last year [2][21]. - EBITDA for the quarter was $3.7 million, while adjusted EBITDA was $4.2 million, excluding inventory valuation losses [2][21]. - Cash and cash equivalents increased to $38.5 million from $33.3 million at the end of 2023, with total liquidity rising to $88.5 million [2][3]. Operational Highlights - GulfMark Energy, the crude oil marketing subsidiary, marketed 67,099 barrels per day in Q2 2024, down from 92,152 bpd in Q2 2023 [4]. - The throughput in the crude oil pipeline and storage segment was 13,881 bpd, up from 8,560 bpd in Q2 2023 [5]. - The collective fleet of Service Transport traveled 6.32 million miles, slightly up from 6.30 million miles in Q2 2023 [4]. Capital Investments and Dividends - Capital expenditures for Q2 2024 totaled $2.4 million, primarily for equipment purchases and ongoing construction of the Dayton facility [6][7]. - The company declared a quarterly cash dividend of $0.24 per common share, payable on September 27, 2024 [7]. Management Commentary - The CEO noted that the results reflect ongoing weakness in the specialty chemicals market due to lower demand and inflationary pressures, but expressed optimism for improvement in the latter half of 2024 and early 2025 [3]. - The increase in earnings from crude oil marketing operations was highlighted, as higher oil prices offset lower volumes from exiting the Red River operations [3].

Core Viewpoint - Adams Resources & Energy, Inc. is set to report its second quarter 2024 financial and operational results on August 7, 2024, after market close, followed by an earnings call on August 8, 2024 [1] Company Overview - Adams Resources & Energy, Inc. is involved in the marketing, transportation, logistics, and repurposing of crude oil, refined products, and dry bulk materials through its subsidiaries [3] - The company's subsidiaries include GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, LLC, GulfMark Terminals, LLC, Firebird Bulk Carriers, Inc., and Phoenix Oil, Inc. [3]

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Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, with a focus on value investing as a preferred strategy in various market conditions [1] - Value investors utilize fundamental analysis to identify undervalued companies based on established metrics [1] Company Overview: Adams Resources & Energy (AE) - Adams Resources & Energy currently holds a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong investment potential [2] - The company's price-to-book (P/B) ratio is 0.75, significantly lower than the industry average of 2.04, suggesting it may be undervalued [2] - Over the past year, AE's P/B ratio has fluctuated between a high of 1.03 and a low of 0.64, with a median of 0.81 [2] - AE's price-to-cash flow (P/CF) ratio stands at 2.44, also lower than the industry average of 5.95, reinforcing its undervaluation [2] - The P/CF ratio for AE has ranged from a high of 4.64 to a low of 2.13 over the past year, with a median of 3.16 [2] Investment Potential - The combination of AE's strong value metrics and positive earnings outlook positions it as an attractive value stock in the current market [3]

Core Points - Adams Resources & Energy, Inc. will present at the East Coast IDEAS Investor Conference on June 13, 2024, at 2 PM ET [1] - The presentation will be accessible via webcast on the conference host's website and the company's investor relations section [1] Company Overview - Adams Resources & Energy, Inc. is involved in crude oil marketing, transportation, terminalling and storage, tank truck transportation of liquid chemicals and dry bulk, and recycling and repurposing of off-spec fuels, lubricants, crude oil, and other chemicals through its subsidiaries [4]

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Revenue and Earnings - Crude oil marketing segment revenues increased by $15.3 million to $623.8 million for the three months ended March 31, 2024, compared to $608.5 million in the same period of 2023, primarily due to a rise in crude oil prices [113]. - Operating earnings for the crude oil marketing segment rose by 249% to $6.7 million in Q1 2024, up from $1.9 million in Q1 2023, driven by higher average market prices and lower operating costs [113]. - Transportation segment revenues decreased by $3.2 million to $23.2 million in Q1 2024, down from $26.4 million in Q1 2023, attributed to reduced volumes and transportation rates [126]. - Revenues net of fuel costs for the transportation segment fell by $3.4 million to $20.4 million in Q1 2024, compared to $23.8 million in Q1 2023 [127]. - Logistics and repurposing segment revenues decreased by 8% to $13.991 million in Q1 2024 from $15.241 million in Q1 2023 [137]. - Operating losses in the logistics and repurposing segment increased by 377% to $(1.484) million in Q1 2024 compared to a profit of $0.535 million in Q1 2023 [139]. Costs and Expenses - Average crude oil purchase price increased from $73.27 per barrel in Q1 2023 to $75.35 per barrel in Q1 2024, while field-level purchase volumes decreased from 94,030 barrels per day to 64,634 barrels per day [114]. - Driver compensation in the crude oil marketing segment decreased by $1.5 million to $3.5 million in Q1 2024, primarily due to lower volumes transported [116]. - Fuel costs increased by $0.2 million during the three months ended March 31, 2024, compared to the same period in 2023, primarily due to higher fuel prices [130]. - Transportation operating earnings decreased by $0.7 million for the three months ended March 31, 2024, attributed to lower revenues from decreased volumes and transportation rates [131]. - Depreciation and amortization expenses in the transportation segment decreased by 8% to $2.9 million in Q1 2024, down from $3.1 million in Q1 2023 [126]. Inventory and Capital Expenditures - The company held crude oil inventory at a weighted average price of $81.96 per barrel as of March 31, 2024, compared to $72.35 per barrel as of December 31, 2023 [123]. - Crude oil inventory increased by $7.5 million, with the price per barrel rising from $72.35 at December 31, 2023, to $81.96 at March 31, 2024, and a 23.0% increase in the number of barrels held [152]. - Total capital spending for the three months ended March 31, 2024, was $6.2 million, up from $1.9 million in the same period in 2023 [156]. - Net cash flows used in investing activities increased by $3.7 million to $5.2 million for the three months ended March 31, 2024, primarily due to a $4.3 million increase in capital spending [155]. Cash Flow and Financing - Cash and cash equivalents increased by 10% to $36.603 million as of March 31, 2024, compared to $33.256 million at December 31, 2023 [144]. - Net cash flows from operating activities decreased by $10.6 million to $13.1 million for the three months ended March 31, 2024, compared to $23.7 million in the same period in 2023 [152]. - Net cash used in financing activities was $4.9 million for the three months ended March 31, 2024, compared to $2.3 million in the same period in 2023, reflecting increased principal payments on the Term Loan [157]. - Principal payments on the Term Loan increased from $0.6 million in Q1 2023 to $2.6 million in Q1 2024 [157]. - Cash dividends paid remained consistent at $0.24 per common share, totaling $0.7 million for both Q1 2024 and Q1 2023 [157]. Operational Changes - The company closed two terminals in late 2023 and a third terminal in Q1 2024 due to softening customer demand, reducing the total number of terminals to sixteen [128]. - The expiration of a five-year purchase contract in the Red River area led to a decrease in average crude oil volumes and revenues starting November 2023 [115]. - Pipeline throughput increased to 11,256 barrels per day in Q1 2024, up from 10,088 barrels per day in Q1 2023, representing a growth of approximately 11.6% [134]. - Pipeline and storage segment revenues remained consistent year-over-year after eliminating intersegment revenue, with a 14% increase in revenues before elimination [133]. - The company is constructing a new pipeline connection expected to be operational in the second half of 2024, enhancing crude oil supply capabilities [135]. Debt and Obligations - At March 31, 2024, the company had $19.3 million of borrowings outstanding under the Credit Agreement at a weighted average interest rate of 7.67% [148]. - Total contractual obligations as of March 31, 2024, amounted to $61.8 million, with $18.8 million due within one year [159]. - The company has no off-balance sheet arrangements that are expected to materially affect its financial position or cash flows [161]. Accounting Policies - There have been no material changes to critical accounting policies since the disclosures in the 2023 Form 10-K [163].