Adams Resources & Energy Inc has a market cap of $72.5 million; its shares were traded at around $17.2 with a P/E ratio of 17.5. The dividend yield of Adams Resources & Energy Inc stocks is 2.9%.AE is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Crude oil revenues were increased during the 2010 period because of higher average crude oil prices as shown in the table above. The direction of change in price was also increasing as the average acquisition cost of crude oil moved from the $74 per barrel level at the beginning of the year to the $81 per barrel level for March 2010. This event produced an inventory liquidation gain of $1,267,000 for the first three months of 2010. Comparatively, while overall crude oil prices were reduced in 2009, the direction of change in price was increasing from the $41 per barrel range in January to the $48 per barrel range in March 2009. This event produced a $1,325,000 inventory liquidation gain in the first quarter of 2009. As of March 31, 2010 the Company held 184,911 barrels of crude oil inventory at an average price of $81.18 per barrel. Absent inventory gains, per unit margins were slightly reduced in 2010, which in turn caused an overall reduction in operating earnings for the 2010 period.
The Company s liquidity primarily derives from net cash provided by operating activities and such amount was $10,372,000 and $8,984,000 for each of the three-month periods ended March 31, 2010 and 2009, respectively. As of March 31, 2010 and December 31, 2009, the Company had no bank debt or other forms of debenture obligations. Cash and cash equivalents totaled $23,380,000 as of March 31, 2010, and such balances are maintained in order to meet the timing of day-to-day cash needs. Working capital, the excess of current assets over current liabilities, totaled $38,742,000 as of March 31, 2010.
Capital expenditures during the first three months of 2010 included $1,519,000 for marketing and transportation equipment additions and $2,288,000 in property additions associated with oil and gas exploration and production activities. For 2010, the Company anticipates expending an additional approximate $13 million on oil and gas exploration projects to be funded from operating cash flow and available working capital. In addition, approximately $5.5 million will be expended for the transportation segment during the third quarter of 2010 toward the purchase of 50 trucks-tractors with funding for such purchase from available cash flow. The units will serve to replace a like number of older model units.
From time to time, the Company may make cash prepayments to certain suppliers of crude oil and natural gas for the Company s marketing operations. Such prepayments totaled $3,322,000 as of March 31, 2010 and such amounts will be recouped and advanced from month to month as the suppliers deliver product to the Company. The Company also requires certain counterparties to post cash collateral with the Company in order to support their purchases from the Company. Such cash collateral held by the Company totaled $2,710,000 as of March 31, 2010. Management believes current cash balances, together with expected cash generated from future operations, will be sufficient to meet short-term and long-term liquidity needs.
Historically, the Company pays an annual dividend in the fourth quarter of each year. In December 2009, the Company paid a $.50 per common share or $2,109,000 dividend to its shareholders. The most significant item affecting future increases or decreases in liquidity is earnings from operations and such earnings are dependent on the success of future operations (see Item 1A Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2009).
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