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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-Q
(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

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: 1-07908

ADAMS RESOURCES & ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
74-1753147
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
17 South Briar Hollow Lane, Suite 100
Houston, Texas 77027
(Address of Principal Executive Offices, including Zip Code)
(713) 881-3600
(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.10 Par ValueAENYSE American LLC

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 þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☑
Non-accelerated filer
☐
Smaller reporting company
☑
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
A total of 2,577,872 shares of Common Stock were outstanding at November 1, 2024.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

Page Number



1
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30,December 31,
20242023
ASSETS
Current assets:
Cash and cash equivalents$25,089 $33,256 
Restricted cash10,448 11,990 
Accounts receivable, net of allowance for credit
losses of $42 and $117, respectively
144,334 164,295 
Inventory30,028 19,827 
Income tax receivable823 — 
Prepayments and other current assets2,322 3,103 
Total current assets213,044 232,471 
Property and equipment, net99,607 105,065 
Operating lease right-of-use assets, net3,971 5,832 
Intangible assets, net6,743 7,985 
Goodwill6,673 6,673 
Other assets2,956 3,308 
Total assets$332,994 $361,334 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$178,617 $183,102 
Current portion of finance lease obligations5,843 6,206 
Current portion of operating lease liabilities1,688 2,829 
Current portion of long-term debt2,500 2,500 
Other current liabilities16,720 16,150 
Total current liabilities205,368 210,787 
Other long-term liabilities:
Long-term debt12,500 19,375 
Asset retirement obligations2,551 2,514 
Finance lease obligations15,248 19,685 
Operating lease liabilities2,293 3,006 
Deferred taxes and other liabilities10,254 13,251 
Total liabilities248,214 268,618 
Commitments and contingencies (Note 14)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding
— — 
Common stock – $0.10 par value, 7,500,000 shares
authorized, 2,577,872 and 2,547,154 shares outstanding, respectively
256 253 
Contributed capital23,066 21,802 
Retained earnings61,458 70,661 
Total shareholders’ equity84,780 92,716 
Total liabilities and shareholders’ equity$332,994 $361,334 

See Notes to Unaudited Condensed Consolidated Financial Statements.
2
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenues:
Marketing$660,842 $719,925 $1,967,491 $1,913,673 
Transportation21,758 24,206 67,745 75,103 
Pipeline and storage43 59 67 308 
Logistics and repurposing12,520 16,424 39,403 46,458 
Total revenues695,163 760,614 2,074,706 2,035,542 
Costs and expenses:
Marketing657,191 710,169 1,948,591 1,894,416 
Transportation19,778 19,642 59,284 62,315 
Pipeline and storage929 659 2,568 2,350 
Logistics and repurposing12,555 15,121 40,579 41,448 
General and administrative4,520 4,162 13,755 10,649 
Depreciation and amortization5,752 6,936 18,287 21,289 
Total costs and expenses700,725 756,689 2,083,064 2,032,467 
Operating (losses) earnings(5,562)3,925 (8,358)3,075 
Other income (expense):
Interest and other income528 119 1,662 893 
Interest expense(572)(1,027)(2,036)(2,525)
Total other expense, net(44)(908)(374)(1,632)
(Losses) Earnings before income taxes(5,606)3,017 (8,732)1,443 
Income tax benefit (provision)1,066 (759)1,465 (357)
Net (losses) earnings$(4,540)$2,258 $(7,267)$1,086 
(Losses) Earnings per share:
Basic net (losses) earnings per common share$(1.76)$0.89 $(2.83)$0.43 
Diluted net (losses) earnings per common share$(1.76)$0.88 $(2.83)$0.42 
Dividends per common share$0.24 $0.24 $0.72 $0.72 


See Notes to Unaudited Condensed Consolidated Financial Statements.
3
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
20242023
Operating activities:
Net (losses) earnings$(7,267)$1,086 
Adjustments to reconcile net (losses) earnings to net cash provided by
operating activities:
Depreciation and amortization18,287 21,289 
Gains on sales of property(912)(1,429)
Provision for credit losses(75)29 
Stock-based compensation expense1,181 1,044 
Change in contingent consideration liability— (2,566)
Deferred income taxes(2,709)3 
Net change in fair value contracts— (335)
Changes in assets and liabilities:
Accounts receivable20,172 (30,253)
Accounts receivable/payable, affiliates— (31)
Inventories(10,201)(731)
Income tax receivable/payable(823)(510)
Prepayments and other current assets781 648 
Accounts payable(4,574)22,239 
Accrued liabilities649 (2,709)
Other194 64 
Net cash provided by operating activities14,703 7,838 
Investing activities:
Property and equipment additions(13,316)(8,917)
Proceeds from property sales2,506 3,078 
Net cash used in investing activities(10,810)(5,839)
Financing activities:
Borrowings under Credit Agreement— 76,000 
Repayments under Credit Agreement(6,875)(77,875)
Principal repayments of finance lease obligations(4,800)(4,944)
Net proceeds from sale of equity— 549 
Dividends paid on common stock(1,927)(1,908)
Net cash used in financing activities(13,602)(8,178)
Decrease in cash and cash equivalents, including restricted cash(9,709)(6,179)
Cash and cash equivalents, including restricted cash, at beginning of period45,246 31,067 
Cash and cash equivalents, including restricted cash, at end of period$35,537 $24,888 


See Notes to Unaudited Condensed Consolidated Financial Statements.

4
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)

Total
CommonContributedRetainedShareholders’
StockCapitalEarningsEquity
Balance, January 1, 2024
$253 $21,802 $70,661 $92,716 
Net losses— — (498)(498)
Stock-based compensation expense— 307 — 307 
Vesting of restricted awards3 (3)— — 
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards(1)(227)— (228)
Dividends declared:
Common stock, $0.24/share
— — (615)(615)
Awards under LTIP, $0.24/share
— — (28)(28)
Balance, March 31, 2024
255 21,879 69,520 91,654 
Net losses— — (2,229)(2,229)
Stock-based compensation expense— 451 — 451 
Dividends declared:
Common stock, $0.24/share
— — (615)(615)
Awards under LTIP, $0.24/share
— — (31)(31)
Balance, June 30, 2024
255 22,330 66,645 89,230 
Net losses— — (4,540)(4,540)
Stock-based compensation expense— 423 — 423 
Vesting of restricted awards1 313 — 314 
Dividends declared:
Common stock, $0.24/share
— — (618)(618)
Awards under LTIP, $0.24/share
— — (29)(29)
Balance, September 30, 2024
$256 $23,066 $61,458 $84,780 



















5
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)

Total
CommonContributedRetainedShareholders’
StockCapitalEarningsEquity
Balance, January 1, 2023
$248 $19,965 $72,964 $93,177 
Net losses— — (1,999)(1,999)
Stock-based compensation expense— 283 — 283 
Vesting of restricted awards3 (3)— — 
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards— (222)— (222)
Shares sold under at-the-market offering
program1 548 — 549 
Dividends declared:
Common stock, $0.24/share
— — (608)(608)
Awards under LTIP, $0.24/share
— — (25)(25)
Balance, March 31, 2023
252 20,571 70,332 91,155 
Net earnings— — 827 827 
Stock-based compensation expense— 372 — 372 
Dividends declared:
Common stock, $0.24/share
— — (608)(608)
Awards under LTIP, $0.24/share
— — (25)(25)
Balance, June 30, 2023
252 20,943 70,526 91,721 
Net earnings— — 2,258 2,258 
Stock-based compensation expense— 389 — 389 
Vesting of restricted awards1 321 — 322 
Dividends declared:
Common stock, $0.24/share
— — (609)(609)
Awards under LTIP, $0.24/share
— — (20)(20)
Balance, September 30, 2023
$253 $21,653 $72,155 $94,061 

See Notes to Unaudited Condensed Consolidated Financial Statements.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, and terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with sixteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results expected for the full year of 2024. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) filed with the SEC on March 13, 2024. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

September 30,December 31,
20242023
Cash and cash equivalents$25,089 $33,256 
Restricted cash:
Collateral for outstanding letters of credit (1)
112 111 
Captive insurance subsidiary (2)
10,336 11,879 
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows$35,537 $45,246 
_____________
(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.
(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder primarily represents cash amounts held by our captive insurance company for insurance premiums.

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

Common
shares
Balance, January 1, 2024
2,547,154 
Vesting of restricted stock unit awards (see Note 11)
19,334 
Vesting of performance share unit awards (see Note 11)
6,318 
Shares withheld to cover taxes upon vesting of equity awards(6,157)
Balance, March 31, 2024
2,566,649 
Vesting of restricted stock unit awards (see Note 11)
924 
Vesting of performance share unit awards (see Note 11)
127 
Balance, June 30, 2024
2,567,700 
Vesting of shares issued10,172 
Balance, September 30, 2024
2,577,872 

Earnings Per Share

Basic earnings per share is computed by dividing our net earnings (losses) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 11 for further discussion).
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(Losses) Earnings per share — numerator:
Net (losses) earnings$(4,540)$2,258 $(7,267)$1,086 
Denominator:
Basic weighted average number of shares outstanding2,573 2,541 2,565 2,531 
Basic net (losses) earnings per share$(1.76)$0.89 $(2.83)$0.43 
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares2,573 2,541 2,565 2,531 
Restricted stock unit awards (1)
— 15 — 15 
Performance share unit awards (1) (2)
— 14 — 18 
Total diluted shares2,573 2,570 2,565 2,564 
Diluted net (losses) earnings per share$(1.76)$0.88 $(2.83)$0.42 
_______________
(1)For the three and nine months ended September 30, 2024, the effect of the restricted stock unit awards and the performance share unit awards on losses per share was anti-dilutive.
(2)The dilutive effect of performance share awards is included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 10 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting outstanding during any current reporting periods.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our unaudited condensed consolidated statements of operations.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the condensed consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 11 for additional information regarding our 2018 LTIP.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Revenue Recognition

Revenue Disaggregation
The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil marketing:
Revenue from contracts with customers:
Goods transferred at a point in time$659,422 $710,010 $1,937,229 $1,878,735 
Services transferred over time— 427 31 763 
Total revenues from contracts with customers659,422 710,437 1,937,260 1,879,498 
Other (1)
1,420 9,488 30,231 34,175 
Total crude oil marketing revenue$660,842 $719,925 $1,967,491 $1,913,673 
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time21,758 24,206 67,745 75,103 
Total revenues from contracts with customers21,758 24,206 67,745 75,103 
Other— — — — 
Total transportation revenue$21,758 $24,206 $67,745 $75,103 
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time43 59 67 308 
Total revenues from contracts with customers43 59 67 308 
Other— — — — 
Total pipeline and storage revenue$43 $59 $67 $308 
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time$6,556 $8,545 $19,739 $25,708 
Services transferred over time5,964 7,879 19,664 20,750 
Total revenues from contracts with customers12,520 16,424 39,403 46,458 
Other— — — — 
Total logistics and repurposing revenue$12,520 $16,424 $39,403 $46,458 
Subtotal:
Total revenues from contracts with customers$693,743 $751,126 $2,044,475 $2,001,367 
Total other (1)
1,420 9,488 30,231 34,175 
Total consolidated revenues$695,163 $760,614 $2,074,706 $2,035,542 
________________________
(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.
(2)The substantial majority of pipeline and storage revenue earned during the three and nine months ended September 30, 2024 and 2023, was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and eliminated in consolidation. See Note 7.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenue gross-up$96,236 $257,965 $218,394 $785,636 


Note 4. Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance premiums$258 $798 
Rents, licenses and other2,064 2,305 
Total prepayments and other current assets$2,322 $3,103 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

Estimated
Useful LifeSeptember 30,December 31,
in Years20242023
Tractors and trailers
5 – 6
$117,113 $119,265 
Field equipment
2 – 5
25,085 25,024 
Finance lease ROU assets (1)
3 – 6
35,039 35,724 
Pipeline and related facilities
20 – 25
20,619 20,397 
Linefill and base gas (2)
N/A4,135 3,922 
Buildings
5 – 39
17,078 17,089 
Office equipment
2 – 5
3,025 3,000 
LandN/A4,163 4,163 
Construction in progressN/A8,495 3,385 
Total234,752 231,969 
Less accumulated depreciation and amortization(135,145)(126,904)
Property and equipment, net$99,607 $105,065 
_______________
(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers and a tank storage and throughput arrangement (see Note 13 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $15.7 million and $11.0 million at September 30, 2024 and December 31, 2023, respectively.
(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Depreciation and amortization, excluding amounts under finance leases$3,563 $4,523 $11,589 $14,260 
Amortization of property and equipment under finance leases1,788 1,983 5,456 5,691 
Amortization of intangible assets401 430 1,242 1,338 
Total depreciation and amortization$5,752 $6,936 $18,287 $21,289 



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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Other Assets

Components of other assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance collateral deposits$605 $605 
State collateral deposits23 23 
Materials and supplies948 1,050 
Debt issuance costs1,007 1,259 
Other373 371 
Total other assets$2,956 $3,308 

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the expected losses under the insurance programs. Insurance collateral deposits are invested at the discretion of our insurance carrier.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Segment Reporting

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

Reporting Segments
Crude oil marketingTrans-portationPipeline and storageLogistics and repurposingOtherTotal
Three Months Ended September 30, 2024
Segment revenues (1)
$660,856 $21,810 $1,052 $13,570 $— $697,288 
Less: Intersegment revenues (1)
(14)(52)(1,009)(1,050)— (2,125)
Revenues$660,842 $21,758 $43 $12,520 $— $695,163 
Segment operating earnings (losses) (2)
2,284 (542)(1,147)(1,637)— (1,042)
Depreciation and amortization1,367 2,522 261 1,602 — 5,752 
Property and equipment additions (3) (4)
65 1,463 243 2,856 179 4,806 
Three Months Ended September 30, 2023
Segment revenues (1)
$719,925 $24,333 $770 $16,457 $— $761,485 
Less: Intersegment revenues (1)
— (127)(711)(33)— (871)
Revenues$719,925 $24,206 $59 $16,424 $— $760,614 
Segment operating earnings (losses) (2)
7,664 1,558 (866)(269)— 8,087 
Depreciation and amortization2,092 3,006 266 1,572 — 6,936 
Property and equipment additions (3)
140 1,416 182 1,271 — 3,009 
Nine Months Ended September 30, 2024
Segment revenues (1)
$1,967,515 $67,906 $3,234 $42,752 $— $2,081,407 
Less: Intersegment revenues (1)
(24)(161)(3,167)(3,349)— (6,701)
Revenues$1,967,491 $67,745 $67 $39,403 $— $2,074,706 
Segment operating earnings (losses) (2)
14,499 308 (3,298)(6,112)— 5,397 
Depreciation and amortization4,401 8,153 797 4,936 — 18,287 
Property and equipment additions (3) (4)
3,685 4,374 439 4,639 179 13,316 
Nine Months Ended September 30, 2023
Segment revenues (1)
$1,913,673 $75,439 $2,473 $48,984 $— $2,040,569 
Less: Intersegment revenues (1)
— (336)(2,165)(2,526)— (5,027)
Revenues$1,913,673 $75,103 $308 $46,458 $— $2,035,542 
Segment operating earnings (losses) (2)
12,922 3,515 (2,846)133 — 13,724 
Depreciation and amortization6,335 9,273 804 4,877 — 21,289 
Property and equipment additions (3) (4)
809 2,754 1,423 3,819 112 8,917 
_______________
(1)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(2)Our crude oil marketing segment’s operating earnings included inventory valuation losses of $2.1 million and liquidation gains of $4.9 million for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, our crude oil marketing segment’s operating earnings included inventory valuation losses of $0.8 million and inventory liquidation gains of $2.9 million, respectively.
(3)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2024 and 2023. See Note 13 for further information.
(4)Amounts included in property and equipment additions for Other are additions for computer and other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.

Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Segment operating (losses) earnings$(1,042)$8,087 $5,397 $13,724 
General and administrative(4,520)(4,162)(13,755)(10,649)
Operating (losses) earnings(5,562)3,925 (8,358)3,075 
Interest and other income528 119 1,662 893 
Interest expense(572)(1,027)(2,036)(2,525)
(Losses) earnings before income taxes$(5,606)$3,017 $(8,732)$1,443 

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Reporting segment:
Crude oil marketing$172,033 $185,285 
Transportation52,831 57,653 
Pipeline and storage25,043 25,027 
Logistics and repurposing42,712 43,258 
Cash and other (1)
40,375 50,111 
Total assets$332,994 $361,334 
_______________
(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities. Activities with affiliates were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil purchases from affiliate (1)
$3,921 $9,362 $13,065 $13,940 
Rentals paid to affiliates of Scott Bosard (2)
146 125 434 405 
Billings to KSA and affiliates— — — 9 
Rentals paid to an affiliate of KSA— — — 232 
Payments to an affiliate of KSA for purchase of
  vehicles (3)
— — — 157 
_______________
(1)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which a member of our Board of Directors is the Managing Partner.
(2)In connection with the acquisition of Firebird and Phoenix on August 12, 2022, we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the sellers, for periods ranging from two to five years.
(3)Amount paid to West Point Buick GMC was for the purchase of three pickup trucks during the nine months ended September 30, 2023, and are net of trade-in values.

Affiliate transactions included direct cost reimbursement for shared phone and administrative services from KSA Industries, Inc. (“KSA”), a formerly affiliated entity. We lease our corporate office space in a building that was operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA, prior to its December 2023 sale to an unaffiliated entity. In addition, we purchase pickup trucks from West Point Buick GMC, an affiliate of KSA. KSA was our largest shareholder until October 31, 2022, when we repurchased the common stock owned by it. An affiliate of KSA served on our Board of Directors through the date of our 2023 annual meeting, when he retired. As of May 31, 2023, KSA and its affiliates are no longer related parties. The table above consequently does not reflect any payments to or from KSA and its affiliates after that date.


Note 9. Other Current Liabilities

The components of other current liabilities were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrual for payroll, benefits and bonuses$6,860 $5,684 
Accrued automobile and workers’ compensation claims7,285 5,804 
Accrued medical claims678 997 
Accrued taxes675 2,453 
Other1,222 1,212 
Total other current liabilities $16,720 $16,150 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Long-Term Debt

On October 27, 2022, we entered into a credit agreement (the “Credit Agreement”) with Cadence Bank, as administrative agent, swingline lender and issuing lender, and the other lenders party thereto (collectively, the “Lenders”). The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time (the “Revolving Credit Facility”) and (b) a Term Loan in aggregate principal amount of $25.0 million (the “Term Loan”). The Revolving Credit Facility matures on October 27, 2027 unless earlier terminated.

Pursuant to the terms of the Credit Agreement, we are required to maintain compliance with certain financial covenants as of the end of each fiscal quarter and on a pro forma basis, after giving effect to any borrowings. Each of such ratios is calculated as outlined in the Credit Agreement and subject to certain exclusions and qualifications described therein. See Note 15 for more information relating to these financial covenants.

On August 2, 2023, we entered into Amendment No. 1 (the “First Amendment”) to the Credit Agreement. The First Amendment (i) clarified our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of Consolidated EBITDA for purposes of the related financial covenants, (ii) provided for the exclusion of unusual and non-recurring losses and expenses from the calculation of Consolidated EBITDA, not to exceed 10.0 percent of Consolidated EBITDA for the period, and (iii) amended the definition of Consolidated Funded Indebtedness to include letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of the Consolidated Total Leverage Ratio calculation in the Credit Agreement. The First Amendment applied to our fiscal period ending June 30, 2023 and thereafter.

On July 16, 2024, we entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement. The Second Amendment amended and restated the definitions of the Consolidated Fixed Charge Coverage Ratio and Consolidated Fixed Charges in order (i) to remove the inclusion of Operating Lease Expenses paid in cash from both the numerator and denominator in the calculation of the Consolidated Fixed Charge Coverage Ratio, and (ii) to clarify that only Consolidated Interest Expense paid in cash is included in the denominator of the Consolidated Fixed Charge Coverage Ratio. These amendments applied to the financial covenant calculations for the period ending June 30, 2024 and thereafter.

At September 30, 2024, we had $15.0 million outstanding under the Term Loan at a weighted average interest rate of 7.60 percent, and $11.5 million of letters of credit outstanding at a fee of 2.25 percent. No amounts were outstanding under the Revolving Credit Facility.

The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2024 for the next five years, and in total thereafter (in thousands):


Remainder of 2024$625 
20252,500 
20262,500 
20279,375 
Total debt maturities$15,000 

At September 30, 2024, we were in compliance with all covenants under the Credit Agreement. See Note 15 for information relating to the Third Amendment to the Credit Agreement.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11. Stock-Based Compensation Plan

We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. In May 2022, our shareholders approved an amendment and restatement of the 2018 LTIP, in which the maximum number of shares authorized for issuance under the 2018 LTIP was increased by 150,000 shares to a total of 300,000 shares, and the term of the 2018 LTIP was extended through February 23, 2032. After giving effect to awards granted and forfeitures made under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through September 30, 2024, a total of 42,244 shares remained available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Compensation expense$423 $389 $1,181 $1,044 

At September 30, 2024 and December 31, 2023, we had $0.1 million and $0.1 million, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP or as inducement awards.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Restricted stock unit awards at January 1, 2024
58,587 $41.16 
Granted (2)
53,266 $29.96 
Vested(30,430)$39.03 
Forfeited(3,491)$36.67 
Restricted stock unit awards at September 30, 2024
77,932 $34.54 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2024 was $1.6 million based on grant date market prices of our common shares ranging from $24.51 to $30.03 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $1.2 million at September 30, 2024. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.4 years.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Performance share unit awards at January 1, 2024
17,424 $31.03 
Granted (2)
29,546 $30.01 
Vested(6,445)$29.72 
Forfeited(524)$30.26 
Performance share unit awards at September 30, 2024
40,001 $30.50 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2024 was $0.9 million based on grant date market prices of our common shares ranging from $24.58 to $30.03 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.8 million at September 30, 2024. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.3 years.


Note 12. Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for interest$1,937 $2,671 
Cash paid for federal and state income taxes3,942 2,472 
Non-cash transactions:
Change in accounts payable related to property and equipment additions— 52 
Property and equipment acquired under finance leases— 17,632 

See Note 13 for information related to other non-cash transactions related to leases.


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13. Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Finance lease cost:
Amortization of ROU assets$1,788 $1,983 $5,456 $5,691 
Interest on lease liabilities299 408 956 955 
Operating lease cost827 927 2,554 2,720 
Short-term lease cost3,202 3,529 10,166 10,668 
Variable lease cost5 6 62 18 
Total lease expense$6,121 $6,853 $19,194 $20,052 

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)
$2,217 $2,739 
Operating cash flows from finance leases (1)
979 851 
Financing cash flows from finance leases4,800 4,944 
ROU assets obtained in exchange for new lease liabilities:
Finance leases— 17,632 
Operating leases364 667 
______________
(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

Nine Months Ended
September 30,
20242023
Weighted-average remaining lease term (years):
Finance leases2.953.65
Operating leases2.713.05
Weighted-average discount rate:
Finance leases5.7%5.4%
Operating leases4.4%4.2%


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

September 30,December 31,
20242023
Assets
Finance lease ROU assets (1)
$19,363 $24,681 
Operating lease ROU assets3,971 5,832 
Liabilities
Current
Finance lease liabilities5,843 6,206 
Operating lease liabilities1,688 2,829 
Noncurrent
Finance lease liabilities15,248 19,685 
Operating lease liabilities2,293 3,006 
______________
(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2024 (in thousands):

Finance Operating
LeaseLease
Remainder of 2024$1,842 $744 
20257,213 1,414 
20265,588 1,156 
20276,001 642 
20282,790 219 
Thereafter— 18 
Total lease payments23,434 4,193 
Less: Interest(2,343)(212)
Present value of lease liabilities21,091 3,981 
Less: Current portion of lease obligation(5,843)(1,688)
Total long-term lease obligation$15,248 $2,293 


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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table provides maturities of undiscounted lease liabilities at December 31, 2023 (in thousands):
Finance Operating
LeaseLease
2024$7,463 $3,009 
20257,284 1,273 
20265,615 1,047 
20276,047 602 
20282,789 219 
Thereafter— 18 
Total lease payments29,198 6,168 
Less: Interest(3,307)(333)
Present value of lease liabilities25,891 5,835 
Less: Current portion of lease obligation(6,206)(2,829)
Total long-term lease obligation$19,685 $3,006 


Note 14. Commitments and Contingencies

Insurance

We have accrued liabilities for estimated workers’ compensation and other casualty claims incurred based upon claim reserves plus an estimate for loss development and incurred but not reported claims. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability, with a self-insurance retention of $1.0 million. On October 1, 2023, the self-insurance retention was increased to $1.5 million for the auto policy. Insurance is purchased over our retention to reduce our exposure to catastrophic events. Estimates are recorded for potential and incurred outstanding liabilities for workers’ compensation, auto and general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historical experience and statistical methods commonly used within the insurance industry that we believe are reliable. We have also engaged a third-party actuary to perform a review of our accrued liability for these claims as well as potential funded losses in our captive insurance company. Insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices and the selection of estimated loss among estimates derived using different methods. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

Since October 2020, we have elected to utilize a wholly owned insurance captive to insure the self-insured retention for our workers’ compensation, general liability and automobile liability insurance programs. All accrued liabilities associated with periods from October 2017 through current were transferred to the captive.

We maintain excess property and casualty programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs. Our operating subsidiaries pay premiums to both the excess and reinsurance carriers and our captive for the estimated losses based on an external actuarial analysis. These premiums held by our wholly owned captive are currently held in a restricted account, resulting in a transfer of risk from our operating subsidiaries to the captive.

We also maintain a self-insurance program for managing employee medical claims in excess of employee deductibles. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.3 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $11.3 million.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrued automobile and workers’ compensation claims$7,285 $5,804 
Accrued medical claims678 997 

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position, results of operations or cash flows.


Note 15. Subsequent Events

Amendment to Credit Facility

On November 8, 2024, we entered into Amendment No. 3 (the “Third Amendment”) to the Credit Agreement. The Third Amendment amends and restates the financial covenants contained in the Credit Agreement in order to (i) lower the maximum Consolidated Total Leverage Ratio to 2.00 to 1.00 (from 2.50 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; (ii) increase the minimum Asset Coverage Ratio to 2.50 to 1.00 (from 2.00 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; and (iii) decrease the minimum Consolidated Fixed Charge Coverage Ratio to 1.05 to 1.00 (from 1.25 to 1.00) for the fiscal quarter ending September 30, 2024, and to 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, returning to 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and each fiscal quarter thereafter.

Merger Transaction

On November 11, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Tres Energy LLC, a Texas limited liability company (“Parent”), and ARE Acquisition Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”).

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of our common stock issued and outstanding prior to the Effective Time (other than shares of our common stock (i) we hold as treasury stock or owned by Parent immediately prior to the Effective Time, (ii) held by any subsidiary of either us or Parent immediately prior to the Effective Time or (iii) owned by stockholders who have properly exercised appraisal rights under Delaware law) will be automatically cancelled and converted into the right to receive $38.00 in cash, without interest (the “Merger Consideration”).

If the Merger is consummated, our securities will be delisted from the NYSE American and deregistered under the Securities Exchange Act of 1934 as promptly as practicable after the Effective Time.

The consummation of the Merger (the “Closing”) is subject to certain customary conditions, including the approval of our stockholders holding at least a majority of our outstanding shares of Common Stock entitled to vote on the adoption of the Merger Agreement.
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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Merger Agreement contains certain customary termination rights for us and Parent. If the Merger Agreement is terminated under certain specified circumstances, including due to our accepting a superior proposal, we will be required to pay Parent a termination fee of $4.0 million.
25
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and accompanying Notes included in this quarterly report on Form 10-Q and the Audited Consolidated Financial Statements and related Notes, together with our discussion and analysis of financial position and results of operations, included in our annual report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), as filed on March 13, 2024 with the U.S. Securities and Exchange Commission (“SEC”).  Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).


Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and information that are based on our beliefs, as well as assumptions made by us and information currently available to us. When used in this document, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “would,” “will,” “believe,” “may,” “potential” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements. Forward-looking statements include statements about the expected timing, closing, and impact of the proposed merger transaction with Tres Energy LLC described elsewhere in this Quarterly Report on Form 10-Q. Although we believe that our expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that such expectations will prove to be correct.  Forward-looking statements are subject to a variety of risks, uncertainties and assumptions as described in more detail under Part I, Item 1A of our 2023 Form 10-K and under Part II, Item 1A of this Quarterly Report on Form 10-Q.  If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected.  You should not put undue reliance on any forward-looking statements.  The forward-looking statements in this quarterly report speak only as of the date hereof.  Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.


Overview of Business

Adams Resources & Energy, Inc., a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, and terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with sixteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 7 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our business segments.


26
Recent Developments

Amendment to Credit Agreement

On November 8, 2024, we entered into Amendment No. 3 (the “Third Amendment”) to our credit agreement with Cadence Bank (the “Credit Agreement”). The Third Amendment amends and restates the financial covenants contained in the Credit Agreement in order to (i) lower the maximum Consolidated Total Leverage Ratio to 2.00 to 1.00 (from 2.50 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; (ii) increase the minimum Asset Coverage Ratio to 2.50 to 1.00 (from 2.00 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; and (iii) decrease the minimum Consolidated Fixed Charge Coverage Ratio to 1.05 to 1.00 (from 1.25 to 1.00) for the fiscal quarter ending September 30, 2024, and to 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, returning to 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and each fiscal quarter thereafter. See Note 10 and Note 15 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Credit Facility.

Merger Transaction

On November 11, 2024, we entered into an agreement to be acquired by Tres Energy LLC, a Texas limited liability company in a merger transaction. On the terms and subject to the conditions of the merger agreement, our stockholders will receive $38.00 per share in cash in exchange for each share of outstanding common stock. The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions, including approval by our stockholders. Upon the closing of the transaction, we will operate as a privately-held company. See Note 15 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the proposed transaction.


Results of Operations

Crude Oil Marketing

Our crude oil marketing segment revenues, operating earnings and selected costs were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
20242023
Change (1)
20242023
Change (1)
Revenues$660,842 $719,925 (8 %)$1,967,491 $1,913,673 3 %
Operating earnings (2)
2,284 7,664 (70 %)14,499 12,922 12 %
Depreciation and amortization1,367 2,092 (35 %)4,401 6,335 (31 %)
Driver compensation3,661 5,068 (28 %)10,651 15,168 (30 %)
Insurance1,378 1,830 (25 %)3,747 5,432 (31 %)
Fuel1,724 2,641 (35 %)5,424 8,072 (33 %)
_______________
(1)Represents the percentage increase (decrease) from the prior year period.
(2)Operating earnings included inventory valuation losses of $2.1 million and liquidation gains of $4.9 million for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, operating earnings included inventory valuation losses of $0.8 million and inventory liquidation gains of $2.9 million, respectively, as discussed further below.


27
Volume and price information were as follows for the periods indicated:

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Field level purchase volumes – per day (1) (2)
Crude oil – barrels72,208 92,556 67,996 92,907 
Average purchase price
Crude oil – per barrel$73.99 $79.26 $76.24 $74.29 
_______________
(1)Reflects the volume purchased from third parties at the field level of operations.
(2)In October 2023, our five year purchase contract in North Texas and South Central Oklahoma (the “Red River area”) expired and was not renewed, which resulted in a decrease in field level purchase volumes.

Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023. Crude oil marketing revenues decreased by $59.1 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily as a result of lower overall crude oil volumes, which decreased revenues by approximately $51.6 million, and a decrease in the market price of crude oil, which decreased revenues by approximately $7.5 million. The average crude oil price received was $79.26 per barrel during the three months ended September 30, 2023, which decreased to $73.99 per barrel during the three months ended September 30, 2024. Revenues from our volumes are mostly based upon the market price in our market areas, primarily in the Gulf Coast. The fluctuations in the market price of crude oil during the 2024 period as compared to the 2023 period was primarily due to OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast as well as the events in Ukraine and Israel, which have resulted in the volatility in crude oil prices.

Crude oil field level volumes decreased due to the expiration on October 31, 2023 and non-renewal of our five year purchase contract in the Red River area. In October 2018, we acquired a trucking company operating in the Red River area, and subsequently entered into a new revenue agreement at that time. During the five year period, volumes handled in the Red River area ranged from an average of 25,000 to 28,000 barrels per day. The purchase price for Red River area volumes was based on a contractual price for volumes in North Texas and Oklahoma, which had been slightly lower than the purchase price for legacy volumes. The expiration of this contract has resulted in a decrease in the average crude oil volumes for the crude oil marketing segment beginning in November 2023, which has also resulted in lower revenues.

Driver compensation decreased by $1.4 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower volumes transported in the 2024 period and a decrease in the overall driver count, both of which were due to the expiration of the Red River area contract.

Insurance costs decreased by $0.5 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower insurance claims and a decrease in the overall driver count in the 2024 period. Fuel costs also decreased by $0.9 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to a lower overall driver count and lower crude oil volumes in the 2024 period.

Depreciation and amortization decreased by $0.7 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2023 and 2024. In connection with the expiration of the Red River area contract, we sold 36 tractors and 65 trailers during the fourth quarter of 2023, and also transferred tractors and trailers to other areas of our business.


28
Our crude oil marketing operating earnings decreased by $5.4 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of inventory valuation changes (as shown in the table below) and lower driver compensation, insurance costs and fuel costs resulting from the expiration of the Red River area contract, partially offset by lower crude oil volumes and a decrease in the average market price of crude oil in the 2024 period.

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023. Crude oil marketing revenues increased by $53.8 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily as a result of an increase in the market price of crude oil, which increased revenues by approximately $764.8 million, partially offset by lower overall crude oil volumes, which decreased revenues by approximately $711.0 million. The average crude oil price received was $74.29 per barrel during the nine months ended September 30, 2023, which increased to $76.24 per barrel during the nine months ended September 30, 2024. The fluctuations in the market price of crude oil and the decrease in crude oil volumes during the 2024 period as compared to the 2023 period are discussed further above.

Driver compensation decreased by $4.5 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower volumes transported in the 2024 period and a decrease in the overall driver count, both of which were due to the expiration of the Red River area contract.

Insurance costs decreased by $1.7 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower insurance claims and a decrease in the overall driver count in the 2024 period. Fuel costs decreased by $2.6 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to a lower overall driver count and lower crude oil volumes in the 2024 period.

Depreciation and amortization expense decreased by $1.9 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2023 and 2024, and the sale or transfer of tractors and trailers as a result of the expiration of the Red River area contract in 2023.

Our crude oil marketing operating earnings increased by $1.6 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of inventory valuation changes (as shown in the table below), an increase in the average market price of crude oil in the 2024 period and lower driver compensation, insurance costs and fuel costs resulting from the expiration of the Red River area contract, partially offset by lower crude oil volumes in the 2024 period.

Field Level Operating Earnings (Non-GAAP Financial Measure). Inventory valuations and forward month derivative instrument valuations (mark-to-market) are two significant factors affecting comparative crude oil marketing segment operating earnings or losses. As a purchaser and shipper of crude oil, we hold inventory in storage tanks and third-party pipelines. Generally, during periods of increasing crude oil prices, we recognize inventory liquidation gains while during periods of falling prices, we recognize inventory liquidation and valuation losses.

Crude oil marketing operating earnings can be affected by the valuations of our forward month derivative instruments. These non-cash valuations are calculated and recorded at each period end based on the underlying data existing as of such date. We generally enter into these derivative contracts as part of a strategy to protect the crude oil inventory value from market price fluctuations. The valuation of derivative instruments at period end requires the recognition of non-cash “mark-to-market” gains and losses. We had no forward month derivative instruments outstanding during the nine months ended September 30, 2024.


29
The impact of inventory liquidations and valuations and derivative valuations on our crude oil marketing segment operating earnings is summarized in the following reconciliation of our non-GAAP financial measure and provides management a measure of the business unit’s performance by removing the impact of inventory valuation and liquidation adjustments for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
As reported segment operating earnings$2,284 $7,664 $14,499 $12,922 
Add (subtract):
Inventory liquidation gains— (4,890)— (2,922)
Inventory valuation losses2,118 — 821 — 
Derivative valuation losses (gains)— (36)— (335)
Field level operating earnings (1)
$4,402 $2,738 $15,320 $9,665 
_______________
(1)The use of field level operating earnings is unique to us, not a substitute for a GAAP measure and may not be comparable to any similar measures developed by industry participants. We utilize this data to evaluate the profitability of our operations.

Field level operating earnings and field level purchase volumes depict our day-to-day operation of acquiring crude oil at the wellhead, transporting the product and delivering the product to market sales point. Field level operating earnings increased during the three months ended September 30, 2024 as compared to the same period in 2023 primarily due to lower operating costs related to the expiration of the Red River area contract and lower other operating costs in the 2024 period, partially offset by lower revenues resulting from lower crude oil volumes and prices in the 2024 period. During the nine months ended September 30, 2024, field level operating earnings increased as compared to the same period in 2023 primarily due to higher revenues resulting from higher crude oil prices in the 2024 period and lower operating costs related to the expiration of the Red River area contract in the 2023 period, partially offset by lower crude oil volumes in the 2024 period.

We held crude oil inventory at a weighted average composite price as follows at the dates indicated (in barrels):

September 30, 2024December 31, 2023
AverageAverage
BarrelsPriceBarrelsPrice
Crude oil inventory411,426 $71.35 267,731 $72.35 

Prices received for crude oil have been volatile and unpredictable with price volatility expected to continue. See “Part I, Item 1A. Risk Factors” in our 2023 Form 10-K.


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Transportation

Our transportation segment revenues, operating (losses) earnings, selected costs and operating data were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
20242023
Change (1)
20242023
Change (1)
Revenues$21,758 $24,206 (10 %)$67,745 $75,103 (10 %)
Operating (losses) earnings$(542)$1,558 (135 %)$308 $3,515 (91 %)
Depreciation and amortization$2,522 $3,006 (16 %)$8,153 $9,273 (12 %)
Driver commissions and wages$3,558 $3,460 3 %$10,664 $10,756 (1 %)
Insurance$2,198 $1,994 10 %$5,968 $6,420 (7 %)
Fuel$2,281 $2,609 (13 %)$7,685 $7,461 3 %
Maintenance expense$1,312 $1,104 19 %$3,986 $3,749 6 %
Mileage (000s)5,888 6,514 (10 %)18,491 19,362 (4 %)
_______________
(1)Represents the percentage increase (decrease) from the prior year period.

Our revenue rate structure includes a component for fuel costs in which fuel cost fluctuations are largely passed through to the customer. Revenues, net of fuel costs, were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Total transportation revenue$21,758 $24,206 $67,745 $75,103 
Diesel fuel cost(2,281)(2,609)(7,685)(7,461)
Revenues, net of fuel costs (1)
$19,477 $21,597 $60,060 $67,642 
_______________
(1) Revenues, net of fuel costs, is a non-GAAP financial measure and is utilized for internal analysis of the results of our transportation segment.

Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023. Transportation revenues decreased by $2.4 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Transportation revenues, net of fuel costs, decreased by $2.1 million during the three months ended September 30, 2024, as compared to the prior year period. These decreases in transportation revenues were primarily due to a decrease in volumes and transportation rates during the 2024 period as a result of a softening in the transportation market due to changes in demand, supply chain issues and inflation. Softening of customer demand led us to close two terminals in late 2023, in Pittsburgh, Pennsylvania and in Atlanta, Georgia, and a third terminal in St. Rose, Louisiana, during the first quarter of 2024, with drivers being reassigned to nearby terminals, bringing our total to sixteen terminals in ten states at the end of September 2024. Revenues also decreased due to the impacts of hurricanes, including Beryl, Debby, Francine and Helene, which affected our operations and those of certain of our customers in the southern states during the third quarter of 2024.

Driver commissions during the three months ended September 30, 2024 were relatively consistent with the three months ended September 30, 2023, with a slight decrease in the overall driver count and lower mileage during the current period.
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Fuel costs decreased by $0.3 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of a decrease in the price of fuel and a lower overall driver count during the 2024 period. Insurance costs increased by $0.2 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to higher insurance claims during the 2024 period, partially offset by a lower overall driver count and lower miles traveled. Maintenance expense increased by $0.2 million during the three months ended September 30, 2024, as compared to the same period in 2023, primarily due to higher repairs and maintenance on tractors and trailers in our fleet, with escalating prices in parts, repairs and maintenance between periods.

Depreciation and amortization expense decreased by $0.5 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of the timing of purchases of new tractors and trailers in 2023 and 2024.

Our transportation operating earnings decreased by $2.1 million for the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower revenues as a result of lower volumes, decreased transportation rates and higher insurance costs and maintenance expenses, partially offset by certain lower operating costs and lower depreciation and amortization expense.

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023. Transportation revenues decreased by $7.4 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Transportation revenues, net of fuel costs, decreased by $7.6 million during the nine months ended September 30, 2024, as compared to the prior year period. These decreases in transportation revenues were primarily due to a decrease in volumes and transportation rates during the 2024 period as a result of a softening in the transportation market due to changes in demand, supply chain issues and inflation. Revenues also decreased due to the impacts of hurricanes, including Beryl, Debby, Francine and Helene, which affected our operations and those of certain of our customers in the southern states during the third quarter of 2024.

Driver commissions decreased by $0.1 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to a decrease in the overall driver count and lower mileage during the 2024 period.

Fuel costs increased by $0.2 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of an increase in the price of fuel, partially offset by a lower overall driver count and lower miles traveled during the 2024 period. Insurance costs decreased by $0.5 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower insurance claims during the 2024 period and a decrease in the overall driver count. Maintenance expense increased by $0.2 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to higher repairs and maintenance on tractors and trailers in our fleet, with escalating prices in parts, repairs and maintenance.
Depreciation and amortization expense decreased by $1.1 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily as a result of the timing of purchases of new tractors and trailers in 2023 and 2024.

Our transportation operating earnings decreased by $3.2 million for the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower revenues as a result of lower volumes and transportation rates, partially offset by certain lower operating costs and lower depreciation and amortization expense.


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Pipeline and Storage

Our pipeline and storage segment revenues, operating losses and selected costs were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
20242023
Change (1)
20242023
Change (1)
Segment revenues (2)
$1,052 $770 37 %$3,234 $2,473 31% 
Less: Intersegment revenues (2)
(1,009)(711)42 %(3,167)(2,165)46% 
Revenues$43 $59 (27 %)$67 $308 (78%)
Operating losses(1,147)(866)32 %(3,298)(2,846)16% 
Depreciation and amortization261 266 (2 %)797 804 (1%)
Insurance236 168 40 %687 602 14% 
_______________
(1)Represents the percentage increase (decrease) from the prior year period.
(2)Segment revenues include intersegment revenues from our crude oil marketing segment, which are eliminated due to consolidation in our unaudited condensed consolidated statements of operations.

Volume information was as follows for the periods indicated (in barrels per day):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Pipeline throughput10,326 8,548 11,816 9,060 
Terminalling11,319 9,350 13,168 10,173 

Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023. Pipeline and storage revenues during the three months ended September 30, 2024 were consistent with the three months ended September 30, 2023, after eliminating intersegment revenue. During each of the three months ended September 30, 2024 and 2023, the majority of pipeline and storage segment revenues were earned from GulfMark, an affiliated shipper. Pipeline and storage revenues earned from GulfMark are eliminated in consolidation, with the offset to marketing costs and expenses in our unaudited condensed consolidated statements of operations. Prior to elimination, pipeline and storage revenues from GulfMark increased by $0.3 million for the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to higher volumes transported by GulfMark during the current period.

Our pipeline and storage operating losses during the three months ended September 30, 2024 increased $0.3 million as compared to the 2023 period, primarily due to lower revenues from third party customers, and increases in operating salaries and wages and related personnel costs as well as outside service costs in the 2024 period.

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023. Pipeline and storage revenues decreased by $0.2 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, after eliminating intersegment revenue. During each of the nine month periods ended September 30, 2024 and 2023, the majority of pipeline and storage segment revenues were earned from GulfMark, an affiliated shipper. Pipeline and storage revenues from GulfMark increased by $1.0 million for the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to higher volumes transported by GulfMark during the current period.


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Our pipeline and storage operating losses during the nine months ended September 30, 2024 increased by $0.5 million as compared to the 2023 period, primarily due to lower revenues from third party customers, and increases in operating salaries and wages and related personnel costs, materials and supplies and outside service costs in the 2024 period.

Logistics and Repurposing

Our logistics and repurposing segment revenues, operating (losses) earnings and selected costs were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
20242023
Change (1)
20242023
Change (1)
Revenues - Firebird$5,964 $7,879 (24%)$19,664 $20,750 (5%)
Revenues - Phoenix6,556 8,545 (23%)19,739 25,708 (23%)
Revenues$12,520 $16,424 (24%)$39,403 $46,458 (15%)
Operating (losses) earnings(1,637)(269)509% (6,112)133 (4,695%)
Depreciation and amortization1,602 1,572 2% 4,936 4,877 1% 
Driver commissions and wages2,365 2,245 5% 7,373 6,388 15% 
Insurance728 538 35% 3,797 1,742 118% 
Fuel778 900 (14%)2,724 2,730 —% 
Maintenance expense407 640 (36%)1,371 1,693 (19%)
_______________
(1)Represents the percentage increase (decrease) from the prior year period.

Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023. Our logistics and repurposing segment consists of Firebird Bulk Carriers, Inc. (“Firebird”), which transports crude oil, condensate, fuels, oils and other petroleum products, largely in the Eagle Ford basin, and Phoenix Oil, Inc. (“Phoenix”), which repurposes and finds beneficial uses for off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Revenues earned from Firebird operations during the three months ended September 30, 2024 decreased by approximately $1.9 million as compared to the three months ended September 30, 2023, primarily due to a decrease in transportation volumes in the current period. Revenues earned from Phoenix operations during the three months ended September 30, 2024 decreased by approximately $2.0 million as compared to the three months ended September 30, 2023, primarily due to lower volumes and activity. Revenues also decreased due to the impact of hurricane Beryl, which affected our operations and those of certain of our customers in July 2024.

Driver commissions increased by $0.1 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to an increase in the overall driver count in the current period. Insurance costs increased by $0.2 million during the three months ended September 30, 2024, primarily as a result of insurance claims in the current period. Fuel costs decreased by $0.1 million during the three months ended September 30, 2024, as compared to the same period in 2023, primarily due to lower fuel costs, partially offset by a higher overall driver count. Maintenance expense decreased by $0.2 million during the three months ended September 30, 2024, as compared to the same period in 2023 primarily due to newer tractors in the fleet, partially offset by escalating prices in parts, repairs and maintenance between periods.

Depreciation and amortization expense during the three months ended September 30, 2024 was consistent with the three months ended September 30, 2023, primarily as a result of the timing of purchases of new tractors and trailers in 2023 and 2024.


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Our logistics and repurposing segment operating losses increased by $1.4 million for the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower revenues from Firebird and Phoenix operations and an increase in insurance expense and certain other operating costs during the current period.

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023. Revenues earned from Firebird operations during the nine months ended September 30, 2024 decreased by approximately $1.1 million as compared to the nine months ended September 30, 2023, primarily due to a decrease in transportation volumes in the current period. Revenues earned from Phoenix operations during the nine months ended September 30, 2024 decreased by approximately $6.0 million as compared to the nine months ended September 30, 2023, primarily due to lower volumes and activity. Revenues also decreased due to the impact of hurricane Beryl, which affected our operations and those of certain of our customers in July 2024.

Driver commissions increased by $1.0 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to an increase in the overall driver count in the current period. Insurance costs increased by $2.1 million during the nine months ended September 30, 2024, primarily as a result of insurance claims in the current period. Fuel costs during the nine months ended September 30, 2024, were consistent with the same period in 2023, primarily due to lower fuel costs offset by a higher overall driver count. Maintenance expense decreased by $0.3 million during the nine months ended September 30, 2024, as compared to the same period in 2023 primarily due to newer tractors in the fleet, partially offset by escalating prices in parts, repairs and maintenance between periods.

Depreciation and amortization expense during the nine months ended September 30, 2024 was consistent with the nine months ended September 30, 2023, primarily as a result of the timing of purchases of new tractors and trailers in 2023 and 2024.

Our logistics and repurposing segment operating earnings decreased by $6.2 million for the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower revenues from Firebird and Phoenix operations and an increase in insurance expense and certain other operating costs during the current period.

General and Administrative Expense

General and administrative expense increased by $0.4 million during the three months ended September 30, 2024 as compared to the same period in 2023. The 2024 period includes higher salaries and wages and related personnel costs, audit fees, legal fees and tax preparation fees, partially offset by lower outside service costs, insurance costs and banking fees primarily related to outstanding letters of credit.

General and administrative expense increased by $3.1 million during the nine months ended September 30, 2024 as compared to the same period in 2023. The 2024 period includes higher salaries and wages and related personnel costs, audit fees and legal fees, partially offset by lower outside service costs, insurance costs, tax preparation fees, director fees due to the retirement of a director in May 2023 and banking fees primarily related to outstanding letters of credit. The 2023 period included an adjustment of $2.6 million related to the reduction of the contingent consideration accrual for the Firebird and Phoenix acquisition in 2022, which resulted in the lower general and administrative expenses in the 2023 period.


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Interest Expense

Interest expense decreased by $0.5 million during the three months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower interest expense as a result of lower borrowings in the 2024 period under the revolving portion of the Credit Agreement, a lower balance on the outstanding Term Loan of $15.0 million under our Credit Agreement (see Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information), and lower amounts outstanding under finance lease obligations in the 2024 period (see Note 13 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information).

Interest expense decreased by $0.5 million during the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to lower interest expense as a result of lower borrowings in the 2024 period under the revolving portion of the Credit Agreement, a lower balance on the outstanding Term Loan under our Credit Agreement and lower amounts outstanding under finance lease obligations in the 2024 period.

Income Taxes

Provision for (benefit from) income taxes is based upon federal and state tax rates, and variations in amounts are consistent with taxable income (loss) in the respective accounting periods.


Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity are (i) our cash balance, (ii) cash flow from operating activities, (iii) borrowings under our Credit Agreement and (iv) funds received from the sale of equity securities. Our primary cash requirements include, but are not limited to, (a) ordinary course of business uses, such as the payment of amounts related to the purchase of crude oil, and other expenses, (b) discretionary capital spending for investments in our business and (c) dividends to our shareholders. We believe we will have sufficient liquidity through our current cash balances, availability under our Credit Agreement, expected cash generated from future operations, and the ease of financing tractor and trailer additions through leasing arrangements (should the need arise) to meet our short-term and long-term liquidity needs for the reasonably foreseeable future. Our cash balance and cash flow from operating activities is dependent on the success of future operations. If our cash inflow subsides or turns negative, we will evaluate our investment plan accordingly and remain flexible.

We maintain cash balances in order to meet the timing of day-to-day cash needs. Cash and cash equivalents (excluding restricted cash) and working capital, the excess of current assets over current liabilities, were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Cash and cash equivalents$25,089 $33,256 
Working capital7,676 21,684 

Our cash balance at September 30, 2024 decreased by 25 percent from December 31, 2023, as discussed further below.


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We have in place a Credit Agreement with Cadence Bank. The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time, and (b) a term loan in the initial aggregate principal amount of $25.0 million (the “Term Loan”). We may also obtain letters of credit under the revolving credit facility up to a maximum amount of $30.0 million, which reduces availability under the revolving credit facility by a like amount. Borrowings under the revolving credit facility may be, at our option, base rate loans (defined by reference to the higher of the prime rate, the federal funds rate or an adjusted term secured overnight financing rate (“SOFR”) for a one month tenor plus one percent) or SOFR loans, in each case plus an applicable margin, the amount of which is determined by reference to our consolidated total leverage ratio, and is between 1 percent and 2 percent for base rate loans and between 2 percent and 3 percent for SOFR loans.

The Term Loan amortizes on a 10-year schedule with quarterly payments beginning December 31, 2022, and matures October 27, 2027. Proceeds of the Term Loan were used, together with additional cash on hand, to fund the repurchase of shares from KSA Industries, Inc. (“KSA”) and certain of its affiliates on October 31, 2022. The Term Loan bears interest at the SOFR loan rate plus the applicable margin for SOFR loans.

We are required to maintain compliance with certain financial covenants under the Credit Agreement, including a consolidated leverage ratio, an asset coverage ratio and a consolidated fixed charge coverage ratio. On August 2, 2023, we entered into Amendment No. 1 (the “First Amendment”) to the Credit Agreement. The First Amendment (i) clarifies our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of Consolidated EBITDA for purposes of the related financial covenants, (ii) provides for the exclusion of unusual and non-recurring losses and expenses from the calculation of Consolidated EBITDA, not to exceed 10.0 percent of Consolidated EBITDA for the period, and (iii) amends the definition of Consolidated Funded Indebtedness to include letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of the Consolidated Total Leverage Ratio calculation in the Credit Agreement. The First Amendment applies to our fiscal period ending June 30, 2023 and thereafter.

On July 16, 2024, we entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement. The Second Amendment amended and restated the definitions of the Consolidated Fixed Charge Coverage Ratio and Consolidated Fixed Charges in order (i) to remove the inclusion of Operating Lease Expenses paid in cash from both the numerator and denominator in the calculation of the Consolidated Fixed Charge Coverage Ratio, and (ii) to clarify that only Consolidated Interest Expense paid in cash is included in the denominator of the Consolidated Fixed Charge Coverage Ratio. These amendments applied to the financial covenant calculations for the period ending June 30, 2024 and thereafter.

On November 8, 2024, we entered into the Third Amendment to the Credit Agreement. The Third Amendment amends and restates the financial covenants contained in the Credit Agreement in order to (i) lower the maximum Consolidated Total Leverage Ratio to 2.00 to 1.00 (from 2.50 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; (ii) increase the minimum Asset Coverage Ratio to 2.50 to 1.00 (from 2.00 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; and (iii) decrease the minimum Consolidated Fixed Charge Coverage Ratio to 1.05 to 1.00 (from 1.25 to 1.00) for the fiscal quarter ending September 30, 2024, and to 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, returning to 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and each fiscal quarter thereafter. At September 30, 2024, we were in compliance with all covenants under the Credit Agreement.

At September 30, 2024, we had $15.0 million of borrowings outstanding under the Credit Agreement, representing the remaining principal balance of the Term Loan, at a weighted average interest rate of 7.60 percent. We also had $11.5 million of letters of credit issued under the Credit Agreement at a fee of 2.25 percent per annum. No amounts were outstanding under the revolving credit facility. See Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information about our Credit Agreement.
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We have in place an At Market Issuance Sales Agreement (“ATM Agreement”) with B. Riley Securities, Inc., as agent (the “Agent”), under which we may offer to sell shares of our common stock through or to the Agent for cash from time to time. We filed a registration statement initially registering an aggregate of $20.0 million of shares of common stock for sale under the ATM Agreement which was declared effective in January 2021. In December 2023, we filed a new registration statement which replaced our prior shelf registration statement and restored the aggregate of $20.0 million of shares of common stock for sale under the ATM Agreement. The registration statement was declared effective on January 5, 2024. The total number of shares of common stock to be sold, if any, and the price at which the shares will be sold will be determined by us periodically in connection with any such sales, though the total amount sold may not exceed the limitations stated in the registration statement. During the nine months ended September 30, 2024, no shares were sold under the ATM Agreement, and the full capacity of the ATM Agreement remains unsold.

We utilize cash from operations to make discretionary investments in our four business segments. With the exception of operating and finance lease commitments primarily associated with storage tank terminal arrangements, leased office space, tractors, trailers and other equipment, and borrowings outstanding under our bank credit facility, our future commitments and planned investments can be readily curtailed if operating cash flows decrease. See below for information regarding our operating and finance lease obligations. We have no off-balance sheet arrangements that have or are reasonably expected to have a material current or future effect on our financial position, results of operations or cash flows.

The most significant item affecting future increases or decreases in liquidity is earnings from operations, and these earnings are dependent on the success of future operations. See “Part I, Item 1A. Risk Factors” in our 2023 Form 10-K.

Cash Flows from Operating, Investing and Financing Activities

Our consolidated cash flows from operating, investing and financing activities were as follows for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash provided by (used in):
Operating activities$14,703 $7,838 
Investing activities(10,810)(5,839)
Financing activities(13,602)(8,178)

Operating activities. Net cash flows provided by operating activities for the nine months ended September 30, 2024 increased by $6.9 million as compared to the same period in 2023. The increase in net cash flows provided by operating activities was primarily due to changes in our working capital accounts, including a decrease in receivables from customers and an increase in payables to vendors. These items, which resulted in increases in cash provided by operating activities, were partially offset by a decrease of approximately $1.2 million in early payments received from customers in the 2024 period and an increase of approximately $0.8 million in early payments made to suppliers in the 2024 period. Crude oil inventory increased by $10.2 million at September 30, 2024, primarily due to an increase of 53.7 percent in the number of barrels held in inventory, partially offset by a decrease in the price of our crude oil inventory, which decreased from $72.35 per barrel at December 31, 2023 to $71.35 per barrel at September 30, 2024.

At various times each month, we may make cash prepayments and/or early payments in advance of the normal due date to certain suppliers of crude oil within our crude oil marketing operations. Crude oil supply prepayments are recouped and advanced from month to month as the suppliers deliver product to us. In addition, in order to secure crude oil supply, we may also “early pay” our suppliers in advance of the normal payment due date
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of the twentieth of the month following the month of production. These “early payments” reduce cash and accounts payable as of the balance sheet date.

We also require certain customers to make similar early payments or to post cash collateral with us in order to support their purchases from us. Early payments and cash collateral received from customers increase cash and reduce accounts receivable as of the balance sheet date.

Early payments received from customers and early payments to suppliers were as follows at the dates indicated (in thousands):
September 30,December 31,
20242023
Early payments received$31,683 $32,850 
Early payments to suppliers5,361 4,546 

We rely heavily on our ability to obtain open-line trade credit from our suppliers especially with respect to our crude oil marketing operations. The timing of payments and receipts of these early pays received and paid can have a significant impact on our cash balance.

Investing activities. Net cash flows used in investing activities for the nine months ended September 30, 2024 increased by $5.0 million as compared to the same period in 2023. This increase was due to an increase of $4.4 million in capital spending for property and equipment (see following table) and a decrease of $0.6 million in cash proceeds from the sales of assets in the current period.

Capital spending by reporting segment was as follows for the periods indicated (in thousands):

Nine Months Ended
September 30,
20242023
Crude oil marketing (1)
$3,685 $809 
Transportation (2)
4,374 2,754 
Pipeline and storage (3)
439 1,423 
Logistics and repurposing (4)
4,639 3,819 
Other (5)
179 112 
Capital spending$13,316 $8,917 
_______________
(1)2024 amount relates to the purchase of 19 tractors and various field equipment, and the 2023 amount relates to the purchase of various field equipment.
(2)2024 amount relates to the purchase of 11 tractors, 26 trailers and various field equipment, and the 2023 amount relates to the purchase of three tractors, two trailers and various field equipment.
(3)2024 amount relates to the purchase of various field equipment, and the 2023 amount relates to spending for the continued construction of a pipeline connection.
(4)2024 amount primarily relates to the spending for the construction on the Dayton project and the purchase of two trailers and various field equipment, and the 2023 amount relates to the purchase of approximately 10.6 acres of land in the Gulf Inland Industrial Park, located in Dayton, Texas, for approximately $1.8 million to build a new processing facility for Phoenix, 13 tractors, three trailers and various field equipment.
(5)2024 amount relates to the purchase of office and computer equipment, and the 2023 amount relates to the purchase of a company vehicle and office and computer equipment.


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Financing activities. Net cash used in financing activities was $13.6 million for the nine months ended September 30, 2024 as compared to $8.2 million for the nine months ended September 30, 2023. The change in net cash flows from financing activities of $5.4 million was primarily due to the following cash outflows and inflows:

•an increase in the 2024 period in net repayments under our Credit Agreement. During the nine months ended September 30, 2024, we made principal payments of $6.9 million on the Term Loan, while during the nine months ended September 30, 2023, we made principal payments of $1.9 million on the Term Loan. During the nine months ended September 30, 2023, we borrowed and repaid $76.0 million under the revolving credit facility. Borrowings were primarily used for working capital purposes. We had no borrowings or repayments under the revolving credit facility in 2024;
•a decrease of $0.1 million in principal repayments for finance lease obligations (see “Material Cash Requirements” below for information regarding our finance lease obligations);
•a decrease of $0.5 million in the 2024 period in net proceeds from the sale of common shares under the ATM Agreement. During the nine months ended September 30, 2024, no shares were sold under the ATM Agreement, while during the nine months ended September 30, 2023, we received net proceeds of approximately $0.5 million from the sale of 14,680 of our common shares; and
•consistent payments in the 2024 and 2023 periods for cash dividends paid on our common shares. During each of the nine months ended September 30, 2024 and 2023, we paid cash dividends of $0.72 per common share, or totals of $1.9 million in each period.
Material Cash Requirements

The following table summarizes our contractual obligations with material cash requirements at September 30, 2024 (in thousands):

Payments due by period
Contractual ObligationsTotalLess than 1 year1-3 years3-5 yearsMore than 5 years
Credit Agreement (1)
$17,637 $3,553 $6,536 $7,548 $— 
Finance lease obligations (2)
23,434 6,849 11,353 5,232 — 
Operating lease obligations (3)
4,193 1,812 2,060 321 — 
Purchase obligations (4)
4,514 4,514 — — — 
Total contractual obligations$49,778 $16,728 $19,949 $13,101 $— 
_______________
(1)Represents scheduled future maturities for amounts due under the Term Loan under our Credit Agreement plus estimated cash payments for interest. Interest payments are based upon the principal amount of the amount outstanding and the applicable interest rate at September 30, 2024. See Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information about our Credit Agreement.
(2)Amounts represent our principal contractual commitments, including interest, outstanding under finance leases for certain tractors, trailers, tank storage and throughput arrangements and other equipment.
(3)Amounts represent rental obligations under non-cancelable operating leases and terminal arrangements with terms in excess of one year.
(4)Amount represents commitments to purchase 23 new tractors and 9 new trailers in our transportation business.

We maintain certain lease arrangements with independent truck owner-operators for use of their equipment and driver services on a month-to-month basis. In addition, we enter into office space and certain lease and terminal access contracts in order to provide tank storage and dock access for our crude oil marketing business. These storage and access contracts require certain minimum monthly payments for the term of the contracts.

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See Note 13 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our finance and operating leases.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably expected to have a material current or future effect on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements    

For information regarding recent accounting pronouncements, see Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements.

Transactions with Affiliates

For more information regarding transactions with our affiliates during the nine months ended September 30, 2024 and 2023, see Note 8 in the Notes to Unaudited Condensed Consolidated Financial Statements.


Critical Accounting Policies and Use of Estimates

A discussion of our critical accounting policies and estimates is included in our 2023 Form 10-K. Certain of these accounting policies require the use of estimates. There have been no material changes to our accounting policies since the disclosures provided in our 2023 Form 10-K.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no other material changes to our “Quantitative and Qualitative Disclosures about Market Risk” that have occurred since the disclosures provided in our 2023 Form 10-K.


Item 4. Controls and Procedures

As of the end of the period covered by this quarterly report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15(e) of the Exchange Act. Based on this evaluation, as of the end of the period covered by this quarterly report, our Chief Executive Officer and our Chief Financial Officer concluded:

(i)that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow for timely decisions regarding required disclosures; and

(ii)that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e) under the Exchange Act) during the fiscal quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.


Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2023 Form 10-K and the risk factors and other cautionary statements contained in our other SEC filings. Any of these risks could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.

Except as set forth below, there have been no material changes in our Risk Factors from those disclosed in Item 1A of our 2023 Form 10-K or our other SEC filings.

Risks Related to the Proposed Merger

The announcement and pendency of the proposed acquisition of the Company could adversely impact our business, financial condition and results of operations.

On November 11, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Tres Energy LLC, a Texas limited liability company (“Parent”), and ARE Acquisition Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). If the Merger is consummated, our securities will be delisted from the NYSE American and deregistered under the Securities Exchange Act of 1934 as promptly as practicable after the effective time of the Merger. Uncertainty about the effect of the Merger on our employees, customers, and other parties may have an adverse effect on our business, financial condition and results of operation regardless of whether the Merger is completed. These risks to our business include the following, all of which could be exacerbated by a delay in the completion of the Merger:

•the impairment of our ability to attract, retain, and motivate our employees, including key personnel;
•the diversion of significant management time and resources toward completion of the Merger;
•difficulties maintaining relationships with customers, suppliers, and other business partners;
•delays or deferments of certain business decisions by our customers, suppliers and other business partners;
•the inability to pursue alternative business opportunities or make appropriate changes to our business because the Merger Agreement requires us to use reasonable best efforts to conduct our business in the ordinary course and to preserve our business organization intact and maintain existing relations with key business partners and governmental entities, and refrain from taking certain actions without Parent’s consent prior to the completion of the Merger;
•litigation related to the Merger and the costs related thereto; and
•the incurrence of significant costs, expenses, and fees for professional services and other transaction costs in connection with the Merger.

42
Litigation relating to the Merger may be filed against us and our Board of Directors, which could prevent or delay the completion of the Merger or result in the payment of damages.

Litigation relating to the Merger may be filed against us and our Board of Directors. Among other remedies, these claimants could seek damages and/or seek to enjoin the Merger and the other transactions contemplated by the Merger Agreement. The outcome of any litigation is uncertain and any such lawsuits could prevent or delay the completion of the Merger and result in significant costs. Any such actions may create uncertainty relating to the Merger and may be costly and distracting to management.

Failure to consummate the Merger within the expected timeframe or at all could adversely impact our business, financial condition and results of operations.

The completion of the Merger is subject to the satisfaction or waiver of certain customary mutual closing conditions, including (a) the approval of our stockholders holding at least a majority of the outstanding shares of our common stock entitled to vote on the adoption of the Merger Agreement, and (b) the absence of any order, injunction, decree or law issued or enforced by any governmental authority of competent jurisdiction that prohibits, renders illegal or enjoins the consummation of the Merger. The obligation of each party to consummate the Merger is also conditioned upon certain unilateral closing conditions, including the other party’s representations and warranties being accurate (subject to certain customary materiality exceptions), the other party having in all material respects performed and complied with its covenants in the Merger Agreement and, in Parent’s case, the absence of a material adverse effect with respect to us. There can be no assurance that these conditions will be satisfied in a timely manner or at all or that the Merger will be completed.

If the Merger is not completed, including as a result of our stockholders failing to adopt the Merger Agreement, our stockholders will not receive any payment for their shares in connection with the Merger. Instead, we will remain an independent public company, and our shares will continue to be traded on the NYSE American stock exchange. Our ongoing business may be materially adversely affected and we would be subject to a number of risks, including the following:

•we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting customers, suppliers, and other business partners;
•we would incur significant costs in future periods relating to the Merger, such as legal, accounting, financial advisor and other professional services fees, which may relate to activities that we would not have undertaken other than to complete the Merger;
•we may be required to pay a cash termination fee as required under the Merger Agreement, which may require us to use available cash that would have otherwise been available for general corporate purposes or other uses and could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with us or deter such third party from making a competing acquisition proposal; and
•the Merger Agreement places certain restrictions on the conduct of our business, which may have delayed or prevented us from undertaking business opportunities that, absent the Merger Agreement, we may have pursued.

If the Merger is not consummated, the risks described above may materialize and they may have a material adverse effect on our business operations, financial condition, results of operations, and stock price, especially to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.


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Item 3. Defaults Upon Senior Securities

None.


Item 4. Mine Safety Disclosures

Not applicable.


Item 5. Other Information

On November 8, 2024, we entered into Amendment No. 3 (the “Third Amendment”) to the Credit Agreement dated October 27, 2022 (the “Credit Agreement”), by and among the Company, GulfMark Asset Holdings, LLC and Service Transport Company, each a wholly-owned subsidiary of the Company, as borrowers, Cadence Bank, N.A., as administrative agent, swingline lender and issuing lender, and the other lenders party thereto, as amended by Amendment No. 1 to Credit Agreement dated as of August 2, 2023 (the “First Amendment”) and Amendment No. 2 to Credit Agreement dated as of July 16, 2024 (the “Second Amendment”). All capitalized words used in the below description of the Third Amendment, but not defined below, have the meanings assigned to them in the Credit Agreement, which was included as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2022, in the First Amendment, which was included as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2023, or in the Second Amendment, which was included as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 16, 2024, as applicable.

The Third Amendment amends and restates the financial covenants contained in the Credit Agreement in order to (i) lower the maximum Consolidated Total Leverage Ratio to 2.00 to 1.00 (from 2.50 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; (ii) increase the minimum Asset Coverage Ratio to 2.50 to 1.00 (from 2.00 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; and (iii) decrease the minimum Consolidated Fixed Charge Coverage Ratio to 1.05 to 1.00 (from 1.25 to 1.00) for the fiscal quarter ending September 30, 2024, and to 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, returning to 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and each fiscal quarter thereafter.

The foregoing summary description of certain terms of the Third Amendment does not purport to be complete, and is qualified in its entirety by reference to the full text of the Third Amendment, a copy of which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q and incorporated by reference herein.


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Item 6. Exhibits

Exhibit
Number
Exhibit
3.1
3.2
10.1
10.2*
31.1*
31.2*
32.1*
32.2*
101.CAL*
Inline XBRL Calculation Linkbase Document
101.DEF*
Inline XBRL Definition Linkbase Document
101.INS*
Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.LAB*
Inline XBRL Labels Linkbase Document
101.PRE*
Inline XBRL Presentation Linkbase Document
101.SCH*
Inline XBRL Schema Document
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
____________
* Filed or furnished (in the case of Exhibits 32.1 and 32.2) with this report.
45
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:November 12, 2024By:/s/ Kevin J. Roycraft
Kevin J. Roycraft
Chief Executive Officer
(Principal Executive Officer)
By:/s/ Tracy E. Ohmart
Tracy E. Ohmart
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)

46
Exhibit 10.2
AMENDMENT NO. 3 TO CREDIT AGREEMENT

This AMENDMENT NO. 3 TO CREDIT AGREEMENT (this “Amendment”) entered into and dated as of November 8, 2024 (the “Amendment Effective Date”) is among Adams Resources & Energy, Inc., a Delaware corporation (the “Parent”), GulfMark Asset Holdings, LLC, a Texas limited liability company (“GulfMark Holdings”), Service Transport Company, a Texas corporation (“Service,” and together with Parent and GulfMark Holdings, the “Borrowers” and each individually, an “Borrower”), the subsidiaries of the Borrowers party hereto (each a “Guarantor” and collectively, the “Guarantors”), the Lenders (as defined below) party hereto, and Cadence Bank, as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders and as Swingline Lender (as defined in the Credit Agreement) and Issuing Lender (as defined in the Credit Agreement).

RECITALS

A.The Borrowers, the Administrative Agent, the Issuing Lender, and the financial institutions party thereto from time to time as lenders (collectively, the “Lenders”), are parties to that certain Credit Agreement dated as of October 27, 2022 (as amended by Amendment No. 1 to Credit Agreement dated as of August 2, 2023, as further amended by Amendment No. 2 to Credit Agreement dated as of July 16, 2024, the “Existing Credit Agreement,” and the Existing Credit Agreement as amended by this Amendment and as otherwise amended, restated, amended and restated or otherwise modified from time to time, the “Credit Agreement”).

B.Subject to the terms and conditions set forth herein, effective as of the Amendment Effective Date, the parties hereto wish to make certain amendments to the Existing Credit Agreement, all as provided herein.

NOW THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.Defined Terms. As used in this Amendment, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein. Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary.

Section 2.Other Definitional Provisions. Unless otherwise specified herein: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (d) the word “will” shall be construed to have the same meaning and effect as the word “shall,” (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (f) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Amendment in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Amendment, (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form and (j) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”



Section 3.Amendments to Credit Agreement. Effective as of the Amendment Effective Date, the Existing Credit Agreement is amended as follows:

(a)Section 9.15 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows and shall apply to the financial covenant calculations included in the Compliance Certificate for the period ending September 30, 2024 and thereafter:

“SECTION 9.15 Financial Covenants.

(a)Consolidated Total Leverage Ratio. As of the last day of any fiscal quarter, permit the Consolidated Total Leverage Ratio to be greater than (i) 2.50 to 1.00 commencing with the fiscal quarter ending December 31, 2022 through the fiscal quarter ending June 30, 2024, and (ii) 2.00 to 1.00 commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter ended thereafter.

(b)Asset Coverage Ratio. As of the last day of any fiscal quarter, permit the Asset Coverage Ratio to be less than (i) 2.00 to 1.00 commencing with the fiscal quarter ending December 31, 2022 through the fiscal quarter ending June 30, 2024, and (ii) 2.50 to 1.00 commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter ended thereafter.

(c)Consolidated Fixed Charge Coverage Ratio. As of the last day of any fiscal quarter, permit the Consolidated Fixed Charge Ratio to be less than (i) 1.25 to 1.00 commencing with the fiscal quarter ending December 31, 2022 through the fiscal quarter ending June 30, 2024, (ii) 1.05 to 1.00 for the fiscal quarter ending September 30, 2024, (iii) 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, and (iv) 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and for each fiscal quarter ended thereafter.”

Section 4.Representations and Warranties. Each Credit Party hereby represents and warrants, as of the date hereof, that:

(a)before and immediately after giving effect to this Amendment, the representations and warranties contained in the Existing Credit Agreement and the representations and warranties contained in each of the other Loan Documents are true and correct in all material respects (except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects) on and as of the date hereof, as though made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date);

(b)before and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing;

(c)the execution, delivery and performance of this Amendment by such Credit Party, as applicable, are within its corporate, partnership, or limited liability company power and authority, as applicable, and have been duly authorized by all necessary corporate, partnership, or limited liability company action, as applicable;

(d)this Amendment constitutes the legal, valid and binding obligation of such Credit Party, as applicable, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws which affect the enforcement of creditors’ rights in general and the availability of equitable remedies;
2

(e)there are no governmental or other third party consents, licenses and approvals required in connection with the execution, delivery, performance, validity and enforceability of this Amendment;

(f)the Collateral is unimpaired by this Amendment and the Credit Parties have granted to the Administrative Agent a valid and perfected first priority security interest in the Collateral covered by the Security Documents, and such Liens are not subject to avoidance, subordination, recharacterization, recovery, attack, offset, counterclaim, or defense of any kind; and

(g)no action, suit, investigation or other proceeding by or before any arbitrator or any Governmental Authority is threatened or pending and no preliminary or permanent injunction or order by a state or federal court has been entered in connection with this Amendment or any other Loan Document.

Section 5.Conditions to Amendment Effective Date. This Amendment shall become effective on the Amendment Effective Date and enforceable against the parties hereto upon the occurrence of the following conditions which may occur prior to or concurrently with the closing of this Amendment:

(a)Amendment. The Administrative Agent shall have received (i) this Amendment executed by duly authorized officers of each Borrower, each Guarantor, the Administrative Agent, the Issuing Lender and the Required Lenders, and (ii) that certain Amendment No. 3 Fee Letter dated of even date herewith among the Borrowers and the Administrative Agent (the “Amendment Fee Letter”).

(b)Fees and Expenses. The Borrowers shall have paid all fees and expenses due and payable under the Loan Documents, including (i) the fees and expenses of the Administrative Agent’s outside legal counsel payable in accordance with Section 13.3(a) of the Existing Credit Agreement pursuant to all invoices presented for payment on or prior to the Amendment Effective Date, and (ii) the amendment fee required to be paid by Borrower under the Amendment Fee Letter for the ratable benefit of the Lenders party to this Amendment.

Section 6.Acknowledgments and Agreements.

(a)Each Credit Party acknowledges that, on the date hereof, all outstanding Obligations are payable in accordance with their terms and each Credit Party waives any defense, offset, counterclaim or recoupment (other than a defense of payment or performance) with respect thereto.

(b)Each Credit Party does hereby adopt, ratify, and confirm the Existing Credit Agreement, as amended by this Amendment, and acknowledges and agrees that the Existing Credit Agreement, as so amended, is and remains in full force and effect, and acknowledges and agrees that their respective liabilities and obligations under the Existing Credit Agreement, as so amended, the Guaranty Agreement, the Security Documents and the other Loan Documents are not impaired in any respect by this Amendment.

(c)Nothing herein shall constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Loan Documents, (ii) any of the agreements, terms or conditions contained in any of the Loan Documents, (iii) any rights or remedies of the Administrative Agent or any Lender with respect to the Loan Documents, or (iv) the rights of the Administrative Agent, the Issuing Lender, or any Lender to collect the full amounts owing to them under the Loan Documents.

(d)From and after the Amendment Effective Date, all references to the Existing Credit Agreement shall mean the Existing Credit Agreement, as amended by this Amendment. This Amendment is a Loan Document for the purposes of the provisions of the other Loan Documents.
3

Section 7.Reaffirmation of Security Documents. Each Credit Party (a) reaffirms the terms of and its obligations (and the security interests granted by it) under each Security Document to which it is a party, and agrees that each such Security Document will continue in full force and effect to secure the Secured Obligations as the same may be amended, extended, supplemented, or otherwise modified from time to time, and (b) acknowledges, represents, warrants and agrees that the Liens and security interests granted by it pursuant to the Security Documents are valid, enforceable and subsisting and create a security interest to secure the Secured Obligations.

Section 8.Reaffirmation of the Guaranty Agreement. Each Credit Party hereby ratifies, confirms, acknowledges and agrees that its obligations under the Guaranty Agreement are in full force and effect and that such Credit Party, as applicable, continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guaranteed Obligations (as defined in the Guaranty Agreement), as such Guaranteed Obligations may have been amended, extended or modified by this Amendment, and its execution and delivery of this Amendment does not indicate or establish an approval or consent requirement by such Credit Party under the Guaranty Agreement, in connection with the execution and delivery of amendments, consents or waivers to the Credit Agreement or any of the other Loan Documents.

Section 9.Counterparts. This Amendment may be signed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which, taken together, constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or by e-mail “PDF” copy shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 10.Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

Section 11.Invalidity. In the event that any one or more of the provisions contained in this Amendment shall be held invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality, and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 12.Governing Law. This Amendment and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

Section 13.Entire Agreement. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[SIGNATURES BEGIN ON NEXT PAGE]



4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.


BORROWERS:
ADAMS RESOURCES & ENERGY, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Executive Vice President, Chief Financial Officer, and Treasurer
GULFMARK ASSET HOLDINGS, LLC
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer and Treasurer
SERVICE TRANSPORT COMPANY
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer
Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)

GUARANTORS:
ARE CAPTIVE, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Vice President and Treasurer
ADAMS RESOURCES MEDICAL MANAGEMENT, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:President
VICTORIA EXPRESS PIPELINE, L.L.C.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer
GULFMARK TERMINALS, LLC
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer
GULFMARK ENERGY, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer
RED RIVER VEHICLE HOLDINGS LLC
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Chief Financial Officer
Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)

FIREBIRD BULK CARRIERS, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Secretary and Treasurer
PHOENIX OIL, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:Secretary and Treasurer
ADA CRUDE OIL COMPANY
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:President
ADA MINING CORPORATION
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:President and Treasurer
ADA RESOURCES, INC.
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:President and Chief Financial Officer
CLASSIC COAL CORPORATION
By:/s/ Tracy E. Ohmart
Name:Tracy E. Ohmart
Title:President and Treasurer



Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)



ADMINISTRATIVE AGENT AND LENDER:
CADENCE BANK,
as Administrative Agent, Issuing Lender, and Lender
By:/s/ Emily Loomis
Name:Emily Loomis
Title:Senior Vice President


Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)


LENDERS:
VERITEX COMMUNITY BANK
By:
Name:
Title:





Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)


ORIGIN BANK
By:/s/ Robert S. Martin
Name:Robert S. Martin
Title:Regional EVP





Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)


CENTURY BANK
By:
Name:
Title:

Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)

AMERANT BANK
By:
Name:
Title:




Signature Page to Amendment No. 3 to Credit Agreement (Adams Resources & Energy, Inc.)

Exhibit 31.1

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Kevin J. Roycraft, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:November 12, 2024By:/s/ Kevin J. Roycraft
Kevin J. Roycraft
Chief Executive Officer



Exhibit 31.2

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Tracy E. Ohmart, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:November 12, 2024By:/s/ Tracy E. Ohmart
Tracy E. Ohmart
Chief Financial Officer



Exhibit 32.1

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF KEVIN J. ROYCRAFT,
CHIEF EXECUTIVE OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Roycraft, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Date:November 12, 2024By:/s/ Kevin J. Roycraft
Kevin J. Roycraft
Chief Executive Officer





Exhibit 32.2

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF TRACY E. OHMART,
CHIEF FINANCIAL OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy E. Ohmart, Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:November 12, 2024By:/s/ Tracy E. Ohmart
Tracy E. Ohmart
Chief Financial Officer


v3.24.3
Cover Page - shares
 9 Months Ended
Sep. 30, 2024
Nov. 01, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 1-07908  
Entity Registrant Name ADAMS RESOURCES & ENERGY, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 74-1753147  
Entity Address, Address Line One 17 South Briar Hollow Lane  
Entity Address, Address Line Two Suite 100  
Entity Address, City or Town Houston  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 77027  
City Area Code 713  
Local Phone Number 881-3600  
Title of 12(b) Security Common Stock, $0.10 Par Value  
Trading Symbol AE  
Security Exchange Name NYSEAMER  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   2,577,872
Entity Central Index Key 0000002178  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 25,089 $ 33,256
Restricted cash 10,448 11,990
Accounts receivable, net of allowance for credit losses of $42 and $117, respectively 144,334 164,295
Inventory 30,028 19,827
Income tax receivable 823 0
Prepayments and other current assets 2,322 3,103
Total current assets 213,044 232,471
Property and equipment, net 99,607 105,065
Operating lease right-of-use assets, net 3,971 5,832
Intangible assets, net 6,743 7,985
Goodwill 6,673 6,673
Other assets 2,956 3,308
Total assets 332,994 361,334
Current liabilities:    
Current portion of finance lease obligations 5,843 6,206
Current portion of operating lease liabilities 1,688 2,829
Current portion of long-term debt 2,500 2,500
Other current liabilities 16,720 16,150
Total current liabilities 205,368 210,787
Other long-term liabilities:    
Long-term debt 12,500 19,375
Asset retirement obligations 2,551 2,514
Finance lease obligations 15,248 19,685
Operating lease liabilities 2,293 3,006
Deferred taxes and other liabilities 10,254 13,251
Total liabilities 248,214 268,618
Commitments and contingencies (Note 14)
Shareholders’ equity:    
Preferred stock – $1.00 par value, 960,000 shares authorized, none outstanding 0 0
Common stock – $0.10 par value, 7,500,000 shares authorized, 2,577,872 and 2,547,154 shares outstanding, respectively 256 253
Contributed capital 23,066 21,802
Retained earnings 61,458 70,661
Total shareholders’ equity 84,780 92,716
Total liabilities and shareholders’ equity 332,994 361,334
Nonrelated Party    
Current liabilities:    
Accounts payable $ 178,617 $ 183,102
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Allowance for doubtful accounts $ 42 $ 117
Shareholders’ equity:    
Preferred stock - par value (in dollars per share) $ 1.00 $ 1.00
Preferred stock - shares authorized (in shares) 960,000 960,000
Preferred stock - shares outstanding (in shares) 0 0
Common stock - par value (in dollars per share) $ 0.10 $ 0.10
Common stock - shares authorized (in shares) 7,500,000 7,500,000
Common stock - shares outstanding (in shares) 2,577,872 2,547,154
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues:        
Total revenues $ 695,163 $ 760,614 $ 2,074,706 $ 2,035,542
Costs and expenses:        
General and administrative 4,520 4,162 13,755 10,649
Depreciation and amortization 5,752 6,936 18,287 21,289
Total costs and expenses 700,725 756,689 2,083,064 2,032,467
Operating (losses) earnings (5,562) 3,925 (8,358) 3,075
Other income (expense):        
Interest and other income 528 119 1,662 893
Interest expense (572) (1,027) (2,036) (2,525)
Total other expense, net (44) (908) (374) (1,632)
(Losses) Earnings before income taxes (5,606) 3,017 (8,732) 1,443
Income tax benefit (provision) 1,066 (759) 1,465 (357)
Net (losses) earnings $ (4,540) $ 2,258 $ (7,267) $ 1,086
(Losses) Earnings per share:        
Basic net (losses) earnings per common share (in dollars per share) $ (1.76) $ 0.89 $ (2.83) $ 0.43
Diluted net (losses) earnings per common share (in dollars per share) (1.76) 0.88 (2.83) 0.42
Dividends per common share (in dollars per share) $ 0.24 $ 0.24 $ 0.72 $ 0.72
Marketing        
Revenues:        
Total revenues $ 660,842 $ 719,925 $ 1,967,491 $ 1,913,673
Costs and expenses:        
Cost of goods and services sold 657,191 710,169 1,948,591 1,894,416
Transportation        
Revenues:        
Total revenues 21,758 24,206 67,745 75,103
Costs and expenses:        
Cost of goods and services sold 19,778 19,642 59,284 62,315
Pipeline and storage        
Revenues:        
Total revenues 43 59 67 308
Costs and expenses:        
Cost of goods and services sold 929 659 2,568 2,350
Logistics and repurposing        
Revenues:        
Total revenues 12,520 16,424 39,403 46,458
Costs and expenses:        
Cost of goods and services sold $ 12,555 $ 15,121 $ 40,579 $ 41,448
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Operating activities:    
Net (losses) earnings $ (7,267) $ 1,086
Adjustments to reconcile net (losses) earnings to net cash provided by operating activities:    
Depreciation and amortization 18,287 21,289
Gains on sales of property (912) (1,429)
Provision for credit losses (75) 29
Stock-based compensation expense 1,181 1,044
Change in contingent consideration liability 0 (2,566)
Deferred income taxes (2,709) 3
Net change in fair value contracts 0 (335)
Changes in assets and liabilities:    
Accounts receivable 20,172 (30,253)
Accounts receivable/payable, affiliates 0 (31)
Inventories (10,201) (731)
Income tax receivable/payable (823) (510)
Prepayments and other current assets 781 648
Accounts payable (4,574) 22,239
Accrued liabilities 649 (2,709)
Other 194 64
Net cash provided by operating activities 14,703 7,838
Investing activities:    
Property and equipment additions (13,316) (8,917)
Proceeds from property sales 2,506 3,078
Net cash used in investing activities (10,810) (5,839)
Financing activities:    
Borrowings under Credit Agreement 0 76,000
Repayments under Credit Agreement (6,875) (77,875)
Principal repayments of finance lease obligations (4,800) (4,944)
Net proceeds from sale of equity 0 549
Dividends paid on common stock (1,927) (1,908)
Net cash used in financing activities (13,602) (8,178)
Decrease in cash and cash equivalents, including restricted cash (9,709) (6,179)
Cash and cash equivalents, including restricted cash, at beginning of period 45,246 31,067
Cash and cash equivalents, including restricted cash, at end of period $ 35,537 $ 24,888
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Common Stock
Contributed Capital
Retained Earnings
Beginning balance at Dec. 31, 2022 $ 93,177 $ 248 $ 19,965 $ 72,964
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings (1,999)     (1,999)
Stock-based compensation expense 283   283  
Vesting of restricted awards 0 3 (3)  
Cancellation of shares withheld to cover taxes upon vesting of restricted awards (222)   (222)  
Shares sold under at-the-market offering program 549 1 548  
Dividends declared:        
Common stock, $0.24/share (608)     (608)
Awards under LTIP, $0.24/share (25)     (25)
Ending balance at Mar. 31, 2023 91,155 252 20,571 70,332
Beginning balance at Dec. 31, 2022 93,177 248 19,965 72,964
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings 1,086      
Ending balance at Sep. 30, 2023 94,061 253 21,653 72,155
Beginning balance at Mar. 31, 2023 91,155 252 20,571 70,332
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings 827     827
Stock-based compensation expense 372   372  
Dividends declared:        
Common stock, $0.24/share (608)     (608)
Awards under LTIP, $0.24/share (25)     (25)
Ending balance at Jun. 30, 2023 91,721 252 20,943 70,526
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings 2,258     2,258
Stock-based compensation expense 389   389  
Vesting of restricted awards 322 1 321  
Dividends declared:        
Common stock, $0.24/share (609)     (609)
Awards under LTIP, $0.24/share (20)     (20)
Ending balance at Sep. 30, 2023 94,061 253 21,653 72,155
Beginning balance at Dec. 31, 2023 92,716 253 21,802 70,661
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings (498)     (498)
Stock-based compensation expense 307   307  
Vesting of restricted awards 0 3 (3)  
Cancellation of shares withheld to cover taxes upon vesting of restricted awards (228) (1) (227)  
Dividends declared:        
Common stock, $0.24/share (615)     (615)
Awards under LTIP, $0.24/share (28)     (28)
Ending balance at Mar. 31, 2024 91,654 255 21,879 69,520
Beginning balance at Dec. 31, 2023 92,716 253 21,802 70,661
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings (7,267)      
Ending balance at Sep. 30, 2024 84,780 256 23,066 61,458
Beginning balance at Mar. 31, 2024 91,654 255 21,879 69,520
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings (2,229)     (2,229)
Stock-based compensation expense 451   451  
Dividends declared:        
Common stock, $0.24/share (615)     (615)
Awards under LTIP, $0.24/share (31)     (31)
Ending balance at Jun. 30, 2024 89,230 255 22,330 66,645
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (losses) earnings (4,540)     (4,540)
Stock-based compensation expense 423   423  
Vesting of restricted awards 314 1 313  
Dividends declared:        
Common stock, $0.24/share (618)     (618)
Awards under LTIP, $0.24/share (29)     (29)
Ending balance at Sep. 30, 2024 $ 84,780 $ 256 $ 23,066 $ 61,458
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]            
Dividends per common share (in dollars per share) $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24
Awards under LTIP (in dollars per share) $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24
v3.24.3
Organization and Basis of Presentation
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation Organization and Basis of Presentation
Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, and terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with sixteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results expected for the full year of 2024. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) filed with the SEC on March 13, 2024. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates
The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.
v3.24.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

September 30,December 31,
20242023
Cash and cash equivalents$25,089 $33,256 
Restricted cash:
Collateral for outstanding letters of credit (1)
112 111 
Captive insurance subsidiary (2)
10,336 11,879 
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows$35,537 $45,246 
_____________
(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.
(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder primarily represents cash amounts held by our captive insurance company for insurance premiums.

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

Common
shares
Balance, January 1, 2024
2,547,154 
Vesting of restricted stock unit awards (see Note 11)
19,334 
Vesting of performance share unit awards (see Note 11)
6,318 
Shares withheld to cover taxes upon vesting of equity awards(6,157)
Balance, March 31, 2024
2,566,649 
Vesting of restricted stock unit awards (see Note 11)
924 
Vesting of performance share unit awards (see Note 11)
127 
Balance, June 30, 2024
2,567,700 
Vesting of shares issued10,172 
Balance, September 30, 2024
2,577,872 

Earnings Per Share

Basic earnings per share is computed by dividing our net earnings (losses) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 11 for further discussion).
A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(Losses) Earnings per share — numerator:
Net (losses) earnings$(4,540)$2,258 $(7,267)$1,086 
Denominator:
Basic weighted average number of shares outstanding2,573 2,541 2,565 2,531 
Basic net (losses) earnings per share$(1.76)$0.89 $(2.83)$0.43 
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares2,573 2,541 2,565 2,531 
Restricted stock unit awards (1)
— 15 — 15 
Performance share unit awards (1) (2)
— 14 — 18 
Total diluted shares2,573 2,570 2,565 2,564 
Diluted net (losses) earnings per share$(1.76)$0.88 $(2.83)$0.42 
_______________
(1)For the three and nine months ended September 30, 2024, the effect of the restricted stock unit awards and the performance share unit awards on losses per share was anti-dilutive.
(2)The dilutive effect of performance share awards is included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 10 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting outstanding during any current reporting periods.
Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our unaudited condensed consolidated statements of operations.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the condensed consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 11 for additional information regarding our 2018 LTIP.
v3.24.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Revenue Disaggregation
The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil marketing:
Revenue from contracts with customers:
Goods transferred at a point in time$659,422 $710,010 $1,937,229 $1,878,735 
Services transferred over time— 427 31 763 
Total revenues from contracts with customers659,422 710,437 1,937,260 1,879,498 
Other (1)
1,420 9,488 30,231 34,175 
Total crude oil marketing revenue$660,842 $719,925 $1,967,491 $1,913,673 
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time21,758 24,206 67,745 75,103 
Total revenues from contracts with customers21,758 24,206 67,745 75,103 
Other— — — — 
Total transportation revenue$21,758 $24,206 $67,745 $75,103 
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time43 59 67 308 
Total revenues from contracts with customers43 59 67 308 
Other— — — — 
Total pipeline and storage revenue$43 $59 $67 $308 
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time$6,556 $8,545 $19,739 $25,708 
Services transferred over time5,964 7,879 19,664 20,750 
Total revenues from contracts with customers12,520 16,424 39,403 46,458 
Other— — — — 
Total logistics and repurposing revenue$12,520 $16,424 $39,403 $46,458 
Subtotal:
Total revenues from contracts with customers$693,743 $751,126 $2,044,475 $2,001,367 
Total other (1)
1,420 9,488 30,231 34,175 
Total consolidated revenues$695,163 $760,614 $2,074,706 $2,035,542 
________________________
(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.
(2)The substantial majority of pipeline and storage revenue earned during the three and nine months ended September 30, 2024 and 2023, was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and eliminated in consolidation. See Note 7.
Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenue gross-up$96,236 $257,965 $218,394 $785,636 
v3.24.3
Prepayments and Other Current Assets
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepayments and Other Current Assets Prepayments and Other Current Assets
The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance premiums$258 $798 
Rents, licenses and other2,064 2,305 
Total prepayments and other current assets$2,322 $3,103 
v3.24.3
Property and Equipment
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

Estimated
Useful LifeSeptember 30,December 31,
in Years20242023
Tractors and trailers
5 – 6
$117,113 $119,265 
Field equipment
2 – 5
25,085 25,024 
Finance lease ROU assets (1)
3 – 6
35,039 35,724 
Pipeline and related facilities
20 – 25
20,619 20,397 
Linefill and base gas (2)
N/A4,135 3,922 
Buildings
5 – 39
17,078 17,089 
Office equipment
2 – 5
3,025 3,000 
LandN/A4,163 4,163 
Construction in progressN/A8,495 3,385 
Total234,752 231,969 
Less accumulated depreciation and amortization(135,145)(126,904)
Property and equipment, net$99,607 $105,065 
_______________
(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers and a tank storage and throughput arrangement (see Note 13 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $15.7 million and $11.0 million at September 30, 2024 and December 31, 2023, respectively.
(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Depreciation and amortization, excluding amounts under finance leases$3,563 $4,523 $11,589 $14,260 
Amortization of property and equipment under finance leases1,788 1,983 5,456 5,691 
Amortization of intangible assets401 430 1,242 1,338 
Total depreciation and amortization$5,752 $6,936 $18,287 $21,289 
v3.24.3
Other Assets
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Assets Other Assets
Components of other assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance collateral deposits$605 $605 
State collateral deposits23 23 
Materials and supplies948 1,050 
Debt issuance costs1,007 1,259 
Other373 371 
Total other assets$2,956 $3,308 
We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the expected losses under the insurance programs. Insurance collateral deposits are invested at the discretion of our insurance carrier.
v3.24.3
Segment Reporting
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Segment Reporting Segment ReportingWe operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals.
Financial information by reporting segment was as follows for the periods indicated (in thousands):

Reporting Segments
Crude oil marketingTrans-portationPipeline and storageLogistics and repurposingOtherTotal
Three Months Ended September 30, 2024
Segment revenues (1)
$660,856 $21,810 $1,052 $13,570 $— $697,288 
Less: Intersegment revenues (1)
(14)(52)(1,009)(1,050)— (2,125)
Revenues$660,842 $21,758 $43 $12,520 $— $695,163 
Segment operating earnings (losses) (2)
2,284 (542)(1,147)(1,637)— (1,042)
Depreciation and amortization1,367 2,522 261 1,602 — 5,752 
Property and equipment additions (3) (4)
65 1,463 243 2,856 179 4,806 
Three Months Ended September 30, 2023
Segment revenues (1)
$719,925 $24,333 $770 $16,457 $— $761,485 
Less: Intersegment revenues (1)
— (127)(711)(33)— (871)
Revenues$719,925 $24,206 $59 $16,424 $— $760,614 
Segment operating earnings (losses) (2)
7,664 1,558 (866)(269)— 8,087 
Depreciation and amortization2,092 3,006 266 1,572 — 6,936 
Property and equipment additions (3)
140 1,416 182 1,271 — 3,009 
Nine Months Ended September 30, 2024
Segment revenues (1)
$1,967,515 $67,906 $3,234 $42,752 $— $2,081,407 
Less: Intersegment revenues (1)
(24)(161)(3,167)(3,349)— (6,701)
Revenues$1,967,491 $67,745 $67 $39,403 $— $2,074,706 
Segment operating earnings (losses) (2)
14,499 308 (3,298)(6,112)— 5,397 
Depreciation and amortization4,401 8,153 797 4,936 — 18,287 
Property and equipment additions (3) (4)
3,685 4,374 439 4,639 179 13,316 
Nine Months Ended September 30, 2023
Segment revenues (1)
$1,913,673 $75,439 $2,473 $48,984 $— $2,040,569 
Less: Intersegment revenues (1)
— (336)(2,165)(2,526)— (5,027)
Revenues$1,913,673 $75,103 $308 $46,458 $— $2,035,542 
Segment operating earnings (losses) (2)
12,922 3,515 (2,846)133 — 13,724 
Depreciation and amortization6,335 9,273 804 4,877 — 21,289 
Property and equipment additions (3) (4)
809 2,754 1,423 3,819 112 8,917 
_______________
(1)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.
(2)Our crude oil marketing segment’s operating earnings included inventory valuation losses of $2.1 million and liquidation gains of $4.9 million for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, our crude oil marketing segment’s operating earnings included inventory valuation losses of $0.8 million and inventory liquidation gains of $2.9 million, respectively.
(3)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2024 and 2023. See Note 13 for further information.
(4)Amounts included in property and equipment additions for Other are additions for computer and other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.
Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Segment operating (losses) earnings$(1,042)$8,087 $5,397 $13,724 
General and administrative(4,520)(4,162)(13,755)(10,649)
Operating (losses) earnings(5,562)3,925 (8,358)3,075 
Interest and other income528 119 1,662 893 
Interest expense(572)(1,027)(2,036)(2,525)
(Losses) earnings before income taxes$(5,606)$3,017 $(8,732)$1,443 

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Reporting segment:
Crude oil marketing$172,033 $185,285 
Transportation52,831 57,653 
Pipeline and storage25,043 25,027 
Logistics and repurposing42,712 43,258 
Cash and other (1)
40,375 50,111 
Total assets$332,994 $361,334 
_______________
(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.
Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.
v3.24.3
Transactions with Affiliates
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Transactions with Affiliates Transactions with Affiliates
We enter into certain transactions in the normal course of business with affiliated entities. Activities with affiliates were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil purchases from affiliate (1)
$3,921 $9,362 $13,065 $13,940 
Rentals paid to affiliates of Scott Bosard (2)
146 125 434 405 
Billings to KSA and affiliates— — — 9 
Rentals paid to an affiliate of KSA— — — 232 
Payments to an affiliate of KSA for purchase of
  vehicles (3)
— — — 157 
_______________
(1)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which a member of our Board of Directors is the Managing Partner.
(2)In connection with the acquisition of Firebird and Phoenix on August 12, 2022, we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the sellers, for periods ranging from two to five years.
(3)Amount paid to West Point Buick GMC was for the purchase of three pickup trucks during the nine months ended September 30, 2023, and are net of trade-in values.
Affiliate transactions included direct cost reimbursement for shared phone and administrative services from KSA Industries, Inc. (“KSA”), a formerly affiliated entity. We lease our corporate office space in a building that was operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA, prior to its December 2023 sale to an unaffiliated entity. In addition, we purchase pickup trucks from West Point Buick GMC, an affiliate of KSA. KSA was our largest shareholder until October 31, 2022, when we repurchased the common stock owned by it. An affiliate of KSA served on our Board of Directors through the date of our 2023 annual meeting, when he retired. As of May 31, 2023, KSA and its affiliates are no longer related parties. The table above consequently does not reflect any payments to or from KSA and its affiliates after that date.
v3.24.3
Other Current Liabilities
 9 Months Ended
Sep. 30, 2024
Other Liabilities Disclosure [Abstract]  
Other Current Liabilities Other Current Liabilities
The components of other current liabilities were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrual for payroll, benefits and bonuses$6,860 $5,684 
Accrued automobile and workers’ compensation claims7,285 5,804 
Accrued medical claims678 997 
Accrued taxes675 2,453 
Other1,222 1,212 
Total other current liabilities $16,720 $16,150 
v3.24.3
Long-Term Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
On October 27, 2022, we entered into a credit agreement (the “Credit Agreement”) with Cadence Bank, as administrative agent, swingline lender and issuing lender, and the other lenders party thereto (collectively, the “Lenders”). The Credit Agreement provides for (a) a revolving credit facility that allows for borrowings up to $60.0 million in aggregate principal amount from time to time (the “Revolving Credit Facility”) and (b) a Term Loan in aggregate principal amount of $25.0 million (the “Term Loan”). The Revolving Credit Facility matures on October 27, 2027 unless earlier terminated.

Pursuant to the terms of the Credit Agreement, we are required to maintain compliance with certain financial covenants as of the end of each fiscal quarter and on a pro forma basis, after giving effect to any borrowings. Each of such ratios is calculated as outlined in the Credit Agreement and subject to certain exclusions and qualifications described therein. See Note 15 for more information relating to these financial covenants.

On August 2, 2023, we entered into Amendment No. 1 (the “First Amendment”) to the Credit Agreement. The First Amendment (i) clarified our ability to exclude crude oil inventory valuation losses (and, to the extent included in our consolidated net income, inventory liquidation gains) from the calculation of Consolidated EBITDA for purposes of the related financial covenants, (ii) provided for the exclusion of unusual and non-recurring losses and expenses from the calculation of Consolidated EBITDA, not to exceed 10.0 percent of Consolidated EBITDA for the period, and (iii) amended the definition of Consolidated Funded Indebtedness to include letters of credit and banker’s acceptances only to the extent such letters of credit or banker’s acceptances have been drawn, for purposes of the Consolidated Total Leverage Ratio calculation in the Credit Agreement. The First Amendment applied to our fiscal period ending June 30, 2023 and thereafter.

On July 16, 2024, we entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement. The Second Amendment amended and restated the definitions of the Consolidated Fixed Charge Coverage Ratio and Consolidated Fixed Charges in order (i) to remove the inclusion of Operating Lease Expenses paid in cash from both the numerator and denominator in the calculation of the Consolidated Fixed Charge Coverage Ratio, and (ii) to clarify that only Consolidated Interest Expense paid in cash is included in the denominator of the Consolidated Fixed Charge Coverage Ratio. These amendments applied to the financial covenant calculations for the period ending June 30, 2024 and thereafter.

At September 30, 2024, we had $15.0 million outstanding under the Term Loan at a weighted average interest rate of 7.60 percent, and $11.5 million of letters of credit outstanding at a fee of 2.25 percent. No amounts were outstanding under the Revolving Credit Facility.

The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2024 for the next five years, and in total thereafter (in thousands):


Remainder of 2024$625 
20252,500 
20262,500 
20279,375 
Total debt maturities$15,000 
At September 30, 2024, we were in compliance with all covenants under the Credit Agreement. See Note 15 for information relating to the Third Amendment to the Credit Agreement.
v3.24.3
Stock-Based Compensation Plan
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plan Stock-Based Compensation Plan
We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. In May 2022, our shareholders approved an amendment and restatement of the 2018 LTIP, in which the maximum number of shares authorized for issuance under the 2018 LTIP was increased by 150,000 shares to a total of 300,000 shares, and the term of the 2018 LTIP was extended through February 23, 2032. After giving effect to awards granted and forfeitures made under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through September 30, 2024, a total of 42,244 shares remained available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Compensation expense$423 $389 $1,181 $1,044 

At September 30, 2024 and December 31, 2023, we had $0.1 million and $0.1 million, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP or as inducement awards.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Restricted stock unit awards at January 1, 2024
58,587 $41.16 
Granted (2)
53,266 $29.96 
Vested(30,430)$39.03 
Forfeited(3,491)$36.67 
Restricted stock unit awards at September 30, 2024
77,932 $34.54 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2024 was $1.6 million based on grant date market prices of our common shares ranging from $24.51 to $30.03 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $1.2 million at September 30, 2024. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.4 years.
Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Performance share unit awards at January 1, 2024
17,424 $31.03 
Granted (2)
29,546 $30.01 
Vested(6,445)$29.72 
Forfeited(524)$30.26 
Performance share unit awards at September 30, 2024
40,001 $30.50 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2024 was $0.9 million based on grant date market prices of our common shares ranging from $24.58 to $30.03 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.8 million at September 30, 2024. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.3 years.
v3.24.3
Supplemental Cash Flow Information
 9 Months Ended
Sep. 30, 2024
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information Supplemental Cash Flow Information
Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for interest$1,937 $2,671 
Cash paid for federal and state income taxes3,942 2,472 
Non-cash transactions:
Change in accounts payable related to property and equipment additions— 52 
Property and equipment acquired under finance leases— 17,632 
See Note 13 for information related to other non-cash transactions related to leases.
v3.24.3
Leases
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Leases Leases
The following table provides the components of lease expense for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Finance lease cost:
Amortization of ROU assets$1,788 $1,983 $5,456 $5,691 
Interest on lease liabilities299 408 956 955 
Operating lease cost827 927 2,554 2,720 
Short-term lease cost3,202 3,529 10,166 10,668 
Variable lease cost5 6 62 18 
Total lease expense$6,121 $6,853 $19,194 $20,052 

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)
$2,217 $2,739 
Operating cash flows from finance leases (1)
979 851 
Financing cash flows from finance leases4,800 4,944 
ROU assets obtained in exchange for new lease liabilities:
Finance leases— 17,632 
Operating leases364 667 
______________
(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

Nine Months Ended
September 30,
20242023
Weighted-average remaining lease term (years):
Finance leases2.953.65
Operating leases2.713.05
Weighted-average discount rate:
Finance leases5.7%5.4%
Operating leases4.4%4.2%
The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

September 30,December 31,
20242023
Assets
Finance lease ROU assets (1)
$19,363 $24,681 
Operating lease ROU assets3,971 5,832 
Liabilities
Current
Finance lease liabilities5,843 6,206 
Operating lease liabilities1,688 2,829 
Noncurrent
Finance lease liabilities15,248 19,685 
Operating lease liabilities2,293 3,006 
______________
(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2024 (in thousands):

Finance Operating
LeaseLease
Remainder of 2024$1,842 $744 
20257,213 1,414 
20265,588 1,156 
20276,001 642 
20282,790 219 
Thereafter— 18 
Total lease payments23,434 4,193 
Less: Interest(2,343)(212)
Present value of lease liabilities21,091 3,981 
Less: Current portion of lease obligation(5,843)(1,688)
Total long-term lease obligation$15,248 $2,293 
The following table provides maturities of undiscounted lease liabilities at December 31, 2023 (in thousands):
Finance Operating
LeaseLease
2024$7,463 $3,009 
20257,284 1,273 
20265,615 1,047 
20276,047 602 
20282,789 219 
Thereafter— 18 
Total lease payments29,198 6,168 
Less: Interest(3,307)(333)
Present value of lease liabilities25,891 5,835 
Less: Current portion of lease obligation(6,206)(2,829)
Total long-term lease obligation$19,685 $3,006 
Leases Leases
The following table provides the components of lease expense for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Finance lease cost:
Amortization of ROU assets$1,788 $1,983 $5,456 $5,691 
Interest on lease liabilities299 408 956 955 
Operating lease cost827 927 2,554 2,720 
Short-term lease cost3,202 3,529 10,166 10,668 
Variable lease cost5 6 62 18 
Total lease expense$6,121 $6,853 $19,194 $20,052 

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)
$2,217 $2,739 
Operating cash flows from finance leases (1)
979 851 
Financing cash flows from finance leases4,800 4,944 
ROU assets obtained in exchange for new lease liabilities:
Finance leases— 17,632 
Operating leases364 667 
______________
(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

Nine Months Ended
September 30,
20242023
Weighted-average remaining lease term (years):
Finance leases2.953.65
Operating leases2.713.05
Weighted-average discount rate:
Finance leases5.7%5.4%
Operating leases4.4%4.2%
The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

September 30,December 31,
20242023
Assets
Finance lease ROU assets (1)
$19,363 $24,681 
Operating lease ROU assets3,971 5,832 
Liabilities
Current
Finance lease liabilities5,843 6,206 
Operating lease liabilities1,688 2,829 
Noncurrent
Finance lease liabilities15,248 19,685 
Operating lease liabilities2,293 3,006 
______________
(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at September 30, 2024 (in thousands):

Finance Operating
LeaseLease
Remainder of 2024$1,842 $744 
20257,213 1,414 
20265,588 1,156 
20276,001 642 
20282,790 219 
Thereafter— 18 
Total lease payments23,434 4,193 
Less: Interest(2,343)(212)
Present value of lease liabilities21,091 3,981 
Less: Current portion of lease obligation(5,843)(1,688)
Total long-term lease obligation$15,248 $2,293 
The following table provides maturities of undiscounted lease liabilities at December 31, 2023 (in thousands):
Finance Operating
LeaseLease
2024$7,463 $3,009 
20257,284 1,273 
20265,615 1,047 
20276,047 602 
20282,789 219 
Thereafter— 18 
Total lease payments29,198 6,168 
Less: Interest(3,307)(333)
Present value of lease liabilities25,891 5,835 
Less: Current portion of lease obligation(6,206)(2,829)
Total long-term lease obligation$19,685 $3,006 
v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Insurance

We have accrued liabilities for estimated workers’ compensation and other casualty claims incurred based upon claim reserves plus an estimate for loss development and incurred but not reported claims. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability, with a self-insurance retention of $1.0 million. On October 1, 2023, the self-insurance retention was increased to $1.5 million for the auto policy. Insurance is purchased over our retention to reduce our exposure to catastrophic events. Estimates are recorded for potential and incurred outstanding liabilities for workers’ compensation, auto and general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historical experience and statistical methods commonly used within the insurance industry that we believe are reliable. We have also engaged a third-party actuary to perform a review of our accrued liability for these claims as well as potential funded losses in our captive insurance company. Insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices and the selection of estimated loss among estimates derived using different methods. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

Since October 2020, we have elected to utilize a wholly owned insurance captive to insure the self-insured retention for our workers’ compensation, general liability and automobile liability insurance programs. All accrued liabilities associated with periods from October 2017 through current were transferred to the captive.

We maintain excess property and casualty programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs. Our operating subsidiaries pay premiums to both the excess and reinsurance carriers and our captive for the estimated losses based on an external actuarial analysis. These premiums held by our wholly owned captive are currently held in a restricted account, resulting in a transfer of risk from our operating subsidiaries to the captive.

We also maintain a self-insurance program for managing employee medical claims in excess of employee deductibles. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.3 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $11.3 million.
Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrued automobile and workers’ compensation claims$7,285 $5,804 
Accrued medical claims678 997 

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position, results of operations or cash flows.
v3.24.3
Subsequent Events
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Amendment to Credit Facility

On November 8, 2024, we entered into Amendment No. 3 (the “Third Amendment”) to the Credit Agreement. The Third Amendment amends and restates the financial covenants contained in the Credit Agreement in order to (i) lower the maximum Consolidated Total Leverage Ratio to 2.00 to 1.00 (from 2.50 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; (ii) increase the minimum Asset Coverage Ratio to 2.50 to 1.00 (from 2.00 to 1.00), commencing with the fiscal quarter ending September 30, 2024 and for each fiscal quarter thereafter; and (iii) decrease the minimum Consolidated Fixed Charge Coverage Ratio to 1.05 to 1.00 (from 1.25 to 1.00) for the fiscal quarter ending September 30, 2024, and to 1.10 to 1.00 for the fiscal quarter ending December 31, 2024, returning to 1.25 to 1.00 for the fiscal quarter ending March 31, 2025 and each fiscal quarter thereafter.
Merger Transaction

On November 11, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Tres Energy LLC, a Texas limited liability company (“Parent”), and ARE Acquisition Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”).

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of our common stock issued and outstanding prior to the Effective Time (other than shares of our common stock (i) we hold as treasury stock or owned by Parent immediately prior to the Effective Time, (ii) held by any subsidiary of either us or Parent immediately prior to the Effective Time or (iii) owned by stockholders who have properly exercised appraisal rights under Delaware law) will be automatically cancelled and converted into the right to receive $38.00 in cash, without interest (the “Merger Consideration”).

If the Merger is consummated, our securities will be delisted from the NYSE American and deregistered under the Securities Exchange Act of 1934 as promptly as practicable after the Effective Time.

The consummation of the Merger (the “Closing”) is subject to certain customary conditions, including the approval of our stockholders holding at least a majority of our outstanding shares of Common Stock entitled to vote on the adoption of the Merger Agreement.
The Merger Agreement contains certain customary termination rights for us and Parent. If the Merger Agreement is terminated under certain specified circumstances, including due to our accepting a superior proposal, we will be required to pay Parent a termination fee of $4.0 million.
v3.24.3
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Organization
Organization

Adams Resources & Energy, Inc. is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. Through our subsidiaries, we are primarily engaged in crude oil marketing, truck and pipeline transportation of crude oil, and terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). In addition, we conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with sixteen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” “Adams” or the “Company” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  
We operate and report in four business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and other petroleum products and recycling and repurposing of off-specification fuels, lubricants, crude oil and other chemicals.
Basis of Presentation
Basis of Presentation

Our results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results expected for the full year of 2024. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) filed with the SEC on March 13, 2024. All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
Use of Estimates
The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.
Earnings Per Share
Earnings Per Share
Basic earnings per share is computed by dividing our net earnings (losses) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 2018 LTIP, are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 11 for further discussion).
Fair Value Measurements
Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. The fair value of the term loan under our credit agreement (see Note 10 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.
Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting outstanding during any current reporting periods.
Income Taxes
Income Taxes
Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.
Inventory
Inventory
Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage costs and expenses on our unaudited condensed consolidated statements of operations.
Property and Equipment
Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For property and equipment requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.
Stock-Based Compensation
Stock-Based Compensation
We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the condensed consolidated statements of operations based on the estimated fair value of those awards on the grant date and is amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur.
Other Crude Oil Marketing Revenue
Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.
Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements.
v3.24.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Schedule of Cash and Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

September 30,December 31,
20242023
Cash and cash equivalents$25,089 $33,256 
Restricted cash:
Collateral for outstanding letters of credit (1)
112 111 
Captive insurance subsidiary (2)
10,336 11,879 
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows$35,537 $45,246 
_____________
(1)Represents amounts that are held in a segregated bank account by Wells Fargo Bank as collateral for an outstanding letter of credit.
(2)$1.5 million of the restricted cash balance relates to the initial capitalization of our captive insurance company formed in late 2020, and the remainder primarily represents cash amounts held by our captive insurance company for insurance premiums.
Schedule of Common Stock Outstanding
The following table reconciles our outstanding common stock for the periods indicated:

Common
shares
Balance, January 1, 2024
2,547,154 
Vesting of restricted stock unit awards (see Note 11)
19,334 
Vesting of performance share unit awards (see Note 11)
6,318 
Shares withheld to cover taxes upon vesting of equity awards(6,157)
Balance, March 31, 2024
2,566,649 
Vesting of restricted stock unit awards (see Note 11)
924 
Vesting of performance share unit awards (see Note 11)
127 
Balance, June 30, 2024
2,567,700 
Vesting of shares issued10,172 
Balance, September 30, 2024
2,577,872 
Schedule of Earnings Per Share, Basic and Diluted
A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(Losses) Earnings per share — numerator:
Net (losses) earnings$(4,540)$2,258 $(7,267)$1,086 
Denominator:
Basic weighted average number of shares outstanding2,573 2,541 2,565 2,531 
Basic net (losses) earnings per share$(1.76)$0.89 $(2.83)$0.43 
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares2,573 2,541 2,565 2,531 
Restricted stock unit awards (1)
— 15 — 15 
Performance share unit awards (1) (2)
— 14 — 18 
Total diluted shares2,573 2,570 2,565 2,564 
Diluted net (losses) earnings per share$(1.76)$0.88 $(2.83)$0.42 
_______________
(1)For the three and nine months ended September 30, 2024, the effect of the restricted stock unit awards and the performance share unit awards on losses per share was anti-dilutive.
(2)The dilutive effect of performance share awards is included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.
v3.24.3
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil marketing:
Revenue from contracts with customers:
Goods transferred at a point in time$659,422 $710,010 $1,937,229 $1,878,735 
Services transferred over time— 427 31 763 
Total revenues from contracts with customers659,422 710,437 1,937,260 1,879,498 
Other (1)
1,420 9,488 30,231 34,175 
Total crude oil marketing revenue$660,842 $719,925 $1,967,491 $1,913,673 
Transportation:
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time21,758 24,206 67,745 75,103 
Total revenues from contracts with customers21,758 24,206 67,745 75,103 
Other— — — — 
Total transportation revenue$21,758 $24,206 $67,745 $75,103 
Pipeline and storage: (2)
Revenue from contracts with customers:
Goods transferred at a point in time$— $— $— $— 
Services transferred over time43 59 67 308 
Total revenues from contracts with customers43 59 67 308 
Other— — — — 
Total pipeline and storage revenue$43 $59 $67 $308 
Logistics and repurposing:
Revenue from contracts with customers:
Goods transferred at a point in time$6,556 $8,545 $19,739 $25,708 
Services transferred over time5,964 7,879 19,664 20,750 
Total revenues from contracts with customers12,520 16,424 39,403 46,458 
Other— — — — 
Total logistics and repurposing revenue$12,520 $16,424 $39,403 $46,458 
Subtotal:
Total revenues from contracts with customers$693,743 $751,126 $2,044,475 $2,001,367 
Total other (1)
1,420 9,488 30,231 34,175 
Total consolidated revenues$695,163 $760,614 $2,074,706 $2,035,542 
________________________
(1)Other crude oil marketing revenues are recognized under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.
(2)The substantial majority of pipeline and storage revenue earned during the three and nine months ended September 30, 2024 and 2023, was from an affiliated shipper, GulfMark Energy, Inc. (“GulfMark”), our subsidiary, and eliminated in consolidation. See Note 7.
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenue gross-up$96,236 $257,965 $218,394 $785,636 
v3.24.3
Prepayments and Other Current Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Prepayments and Other Current Assets
The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance premiums$258 $798 
Rents, licenses and other2,064 2,305 
Total prepayments and other current assets$2,322 $3,103 
v3.24.3
Property and Equipment (Tables)
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):

Estimated
Useful LifeSeptember 30,December 31,
in Years20242023
Tractors and trailers
5 – 6
$117,113 $119,265 
Field equipment
2 – 5
25,085 25,024 
Finance lease ROU assets (1)
3 – 6
35,039 35,724 
Pipeline and related facilities
20 – 25
20,619 20,397 
Linefill and base gas (2)
N/A4,135 3,922 
Buildings
5 – 39
17,078 17,089 
Office equipment
2 – 5
3,025 3,000 
LandN/A4,163 4,163 
Construction in progressN/A8,495 3,385 
Total234,752 231,969 
Less accumulated depreciation and amortization(135,145)(126,904)
Property and equipment, net$99,607 $105,065 
_______________
(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers and a tank storage and throughput arrangement (see Note 13 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $15.7 million and $11.0 million at September 30, 2024 and December 31, 2023, respectively.
(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Depreciation and amortization, excluding amounts under finance leases$3,563 $4,523 $11,589 $14,260 
Amortization of property and equipment under finance leases1,788 1,983 5,456 5,691 
Amortization of intangible assets401 430 1,242 1,338 
Total depreciation and amortization$5,752 $6,936 $18,287 $21,289 
v3.24.3
Other Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Other Assets
Components of other assets were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Insurance collateral deposits$605 $605 
State collateral deposits23 23 
Materials and supplies948 1,050 
Debt issuance costs1,007 1,259 
Other373 371 
Total other assets$2,956 $3,308 
v3.24.3
Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Schedule of Information Concerning Business Activities
Financial information by reporting segment was as follows for the periods indicated (in thousands):

Reporting Segments
Crude oil marketingTrans-portationPipeline and storageLogistics and repurposingOtherTotal
Three Months Ended September 30, 2024
Segment revenues (1)
$660,856 $21,810 $1,052 $13,570 $— $697,288 
Less: Intersegment revenues (1)
(14)(52)(1,009)(1,050)— (2,125)
Revenues$660,842 $21,758 $43 $12,520 $— $695,163 
Segment operating earnings (losses) (2)
2,284 (542)(1,147)(1,637)— (1,042)
Depreciation and amortization1,367 2,522 261 1,602 — 5,752 
Property and equipment additions (3) (4)
65 1,463 243 2,856 179 4,806 
Three Months Ended September 30, 2023
Segment revenues (1)
$719,925 $24,333 $770 $16,457 $— $761,485 
Less: Intersegment revenues (1)
— (127)(711)(33)— (871)
Revenues$719,925 $24,206 $59 $16,424 $— $760,614 
Segment operating earnings (losses) (2)
7,664 1,558 (866)(269)— 8,087 
Depreciation and amortization2,092 3,006 266 1,572 — 6,936 
Property and equipment additions (3)
140 1,416 182 1,271 — 3,009 
Nine Months Ended September 30, 2024
Segment revenues (1)
$1,967,515 $67,906 $3,234 $42,752 $— $2,081,407 
Less: Intersegment revenues (1)
(24)(161)(3,167)(3,349)— (6,701)
Revenues$1,967,491 $67,745 $67 $39,403 $— $2,074,706 
Segment operating earnings (losses) (2)
14,499 308 (3,298)(6,112)— 5,397 
Depreciation and amortization4,401 8,153 797 4,936 — 18,287 
Property and equipment additions (3) (4)
3,685 4,374 439 4,639 179 13,316 
Nine Months Ended September 30, 2023
Segment revenues (1)
$1,913,673 $75,439 $2,473 $48,984 $— $2,040,569 
Less: Intersegment revenues (1)
— (336)(2,165)(2,526)— (5,027)
Revenues$1,913,673 $75,103 $308 $46,458 $— $2,035,542 
Segment operating earnings (losses) (2)
12,922 3,515 (2,846)133 — 13,724 
Depreciation and amortization6,335 9,273 804 4,877 — 21,289 
Property and equipment additions (3) (4)
809 2,754 1,423 3,819 112 8,917 
_______________
(1)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our unaudited condensed consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.
(2)Our crude oil marketing segment’s operating earnings included inventory valuation losses of $2.1 million and liquidation gains of $4.9 million for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, our crude oil marketing segment’s operating earnings included inventory valuation losses of $0.8 million and inventory liquidation gains of $2.9 million, respectively.
(3)Our segment property and equipment additions do not include assets acquired under finance leases during the three and nine months ended September 30, 2024 and 2023. See Note 13 for further information.
(4)Amounts included in property and equipment additions for Other are additions for computer and other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.
Schedule of Reconciliation of Segment Earnings to Earnings (Losses) Before Income Taxes
Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Segment operating (losses) earnings$(1,042)$8,087 $5,397 $13,724 
General and administrative(4,520)(4,162)(13,755)(10,649)
Operating (losses) earnings(5,562)3,925 (8,358)3,075 
Interest and other income528 119 1,662 893 
Interest expense(572)(1,027)(2,036)(2,525)
(Losses) earnings before income taxes$(5,606)$3,017 $(8,732)$1,443 
Schedule of Identifiable Assets by Industry Segment
Identifiable assets by business segment were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Reporting segment:
Crude oil marketing$172,033 $185,285 
Transportation52,831 57,653 
Pipeline and storage25,043 25,027 
Logistics and repurposing42,712 43,258 
Cash and other (1)
40,375 50,111 
Total assets$332,994 $361,334 
_______________
(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.
v3.24.3
Transactions with Affiliates (Tables)
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Schedule of Activities with Affiliates Activities with affiliates were as follows for the periods indicated (in thousands):
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Crude oil purchases from affiliate (1)
$3,921 $9,362 $13,065 $13,940 
Rentals paid to affiliates of Scott Bosard (2)
146 125 434 405 
Billings to KSA and affiliates— — — 9 
Rentals paid to an affiliate of KSA— — — 232 
Payments to an affiliate of KSA for purchase of
  vehicles (3)
— — — 157 
_______________
(1)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which a member of our Board of Directors is the Managing Partner.
(2)In connection with the acquisition of Firebird and Phoenix on August 12, 2022, we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the sellers, for periods ranging from two to five years.
(3)Amount paid to West Point Buick GMC was for the purchase of three pickup trucks during the nine months ended September 30, 2023, and are net of trade-in values.
v3.24.3
Other Current Liabilities (Tables)
 9 Months Ended
Sep. 30, 2024
Other Liabilities Disclosure [Abstract]  
Schedule of Other Current Liabilities
The components of other current liabilities were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrual for payroll, benefits and bonuses$6,860 $5,684 
Accrued automobile and workers’ compensation claims7,285 5,804 
Accrued medical claims678 997 
Accrued taxes675 2,453 
Other1,222 1,212 
Total other current liabilities $16,720 $16,150 
v3.24.3
Long-Term Debt (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Maturities of Long-Term Debt
The following table presents the scheduled maturities of principal amounts of our debt obligations at September 30, 2024 for the next five years, and in total thereafter (in thousands):


Remainder of 2024$625 
20252,500 
20262,500 
20279,375 
Total debt maturities$15,000 
v3.24.3
Stock-Based Compensation Plan (Tables)
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Share-Based Payment Arrangement
Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Compensation expense$423 $389 $1,181 $1,044 
Schedule of Share-Based Compensation, Activity
The following table presents restricted stock unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Restricted stock unit awards at January 1, 2024
58,587 $41.16 
Granted (2)
53,266 $29.96 
Vested(30,430)$39.03 
Forfeited(3,491)$36.67 
Restricted stock unit awards at September 30, 2024
77,932 $34.54 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of restricted stock unit awards issued during the first nine months of 2024 was $1.6 million based on grant date market prices of our common shares ranging from $24.51 to $30.03 per share.
The following table presents performance share unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Performance share unit awards at January 1, 2024
17,424 $31.03 
Granted (2)
29,546 $30.01 
Vested(6,445)$29.72 
Forfeited(524)$30.26 
Performance share unit awards at September 30, 2024
40,001 $30.50 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of performance share unit awards issued during the first nine months of 2024 was $0.9 million based on grant date market prices of our common shares ranging from $24.58 to $30.03 per share and assuming a performance factor of 100 percent.
v3.24.3
Supplemental Cash Flow Information (Tables)
 9 Months Ended
Sep. 30, 2024
Supplemental Cash Flow Elements [Abstract]  
Schedule of Supplemental Cash Flow Information
Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for interest$1,937 $2,671 
Cash paid for federal and state income taxes3,942 2,472 
Non-cash transactions:
Change in accounts payable related to property and equipment additions— 52 
Property and equipment acquired under finance leases— 17,632 
v3.24.3
Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Lease, Cost
The following table provides the components of lease expense for the periods indicated (in thousands):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Finance lease cost:
Amortization of ROU assets$1,788 $1,983 $5,456 $5,691 
Interest on lease liabilities299 408 956 955 
Operating lease cost827 927 2,554 2,720 
Short-term lease cost3,202 3,529 10,166 10,668 
Variable lease cost5 6 62 18 
Total lease expense$6,121 $6,853 $19,194 $20,052 

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):
Nine Months Ended
September 30,
20242023
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)
$2,217 $2,739 
Operating cash flows from finance leases (1)
979 851 
Financing cash flows from finance leases4,800 4,944 
ROU assets obtained in exchange for new lease liabilities:
Finance leases— 17,632 
Operating leases364 667 
______________
(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

Nine Months Ended
September 30,
20242023
Weighted-average remaining lease term (years):
Finance leases2.953.65
Operating leases2.713.05
Weighted-average discount rate:
Finance leases5.7%5.4%
Operating leases4.4%4.2%
Assets and Liabilities, Lessee
The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

September 30,December 31,
20242023
Assets
Finance lease ROU assets (1)
$19,363 $24,681 
Operating lease ROU assets3,971 5,832 
Liabilities
Current
Finance lease liabilities5,843 6,206 
Operating lease liabilities1,688 2,829 
Noncurrent
Finance lease liabilities15,248 19,685 
Operating lease liabilities2,293 3,006 
______________
(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.
Schedule of Lessee, Operating Lease, Liability, Maturity
The following table provides maturities of undiscounted lease liabilities at September 30, 2024 (in thousands):

Finance Operating
LeaseLease
Remainder of 2024$1,842 $744 
20257,213 1,414 
20265,588 1,156 
20276,001 642 
20282,790 219 
Thereafter— 18 
Total lease payments23,434 4,193 
Less: Interest(2,343)(212)
Present value of lease liabilities21,091 3,981 
Less: Current portion of lease obligation(5,843)(1,688)
Total long-term lease obligation$15,248 $2,293 
The following table provides maturities of undiscounted lease liabilities at December 31, 2023 (in thousands):
Finance Operating
LeaseLease
2024$7,463 $3,009 
20257,284 1,273 
20265,615 1,047 
20276,047 602 
20282,789 219 
Thereafter— 18 
Total lease payments29,198 6,168 
Less: Interest(3,307)(333)
Present value of lease liabilities25,891 5,835 
Less: Current portion of lease obligation(6,206)(2,829)
Total long-term lease obligation$19,685 $3,006 
Schedule of Finance Lease, Liability, Maturity
The following table provides maturities of undiscounted lease liabilities at September 30, 2024 (in thousands):

Finance Operating
LeaseLease
Remainder of 2024$1,842 $744 
20257,213 1,414 
20265,588 1,156 
20276,001 642 
20282,790 219 
Thereafter— 18 
Total lease payments23,434 4,193 
Less: Interest(2,343)(212)
Present value of lease liabilities21,091 3,981 
Less: Current portion of lease obligation(5,843)(1,688)
Total long-term lease obligation$15,248 $2,293 
The following table provides maturities of undiscounted lease liabilities at December 31, 2023 (in thousands):
Finance Operating
LeaseLease
2024$7,463 $3,009 
20257,284 1,273 
20265,615 1,047 
20276,047 602 
20282,789 219 
Thereafter— 18 
Total lease payments29,198 6,168 
Less: Interest(3,307)(333)
Present value of lease liabilities25,891 5,835 
Less: Current portion of lease obligation(6,206)(2,829)
Total long-term lease obligation$19,685 $3,006 
v3.24.3
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Expenses and Losses Incurred but Not Reported
Our accruals for automobile, workers’ compensation and medical claims were as follows at the dates indicated (in thousands):

September 30,December 31,
20242023
Accrued automobile and workers’ compensation claims$7,285 $5,804 
Accrued medical claims678 997 
v3.24.3
Organization and Basis of Presentation (Details)
 9 Months Ended
Sep. 30, 2024
segment
terminal
state
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of states in which entity operates | state 48
Number of terminals in which entity operates | terminal 16
Number of operating segments 4
Number of reportable segments 4
v3.24.3
Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Restricted Cash and Cash Equivalents Items [Line Items]        
Cash and cash equivalents $ 25,089 $ 33,256    
Restricted cash 10,448 11,990    
Total cash, cash equivalents and restricted cash shown in the unaudited condensed consolidated statements of cash flows 35,537 45,246 $ 24,888 $ 31,067
Letter of Credit        
Restricted Cash and Cash Equivalents Items [Line Items]        
Restricted cash 112 111    
Captive Insurance Subsidiary        
Restricted Cash and Cash Equivalents Items [Line Items]        
Restricted cash 10,336 $ 11,879    
Initial Capitalization        
Restricted Cash and Cash Equivalents Items [Line Items]        
Restricted cash $ 1,500      
v3.24.3
Summary of Significant Accounting Policies - Schedule of Common Stock Outstanding (Details) - shares
 3 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Beginning balance (in shares) 2,567,700 2,566,649 2,547,154
Vesting of restricted stock unit awards (in shares)   924 19,334
Shares withheld to cover taxes upon vesting of equity awards (in shares)     (6,157)
Vesting of shares issued (in shares) 10,172    
Ending balance (in shares) 2,577,872 2,567,700 2,566,649
Performance Unit Awards      
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Vesting of performance share unit awards (in shares)   127 6,318
v3.24.3
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings per share                
Net (losses) earnings $ (4,540) $ (2,229) $ (498) $ 2,258 $ 827 $ (1,999) $ (7,267) $ 1,086
Basic weighted average number of shares outstanding (in shares) 2,573     2,541     2,565 2,531
Basic net (losses) earnings per share (in dollars per share) $ (1.76)     $ 0.89     $ (2.83) $ 0.43
Diluted (losses) earnings per share:                
Common shares (in shares) 2,573     2,541     2,565 2,531
Total diluted shares (in shares) 2,573     2,570     2,565 2,564
Diluted net (losses) earnings per share (in dollars per share) $ (1.76)     $ 0.88     $ (2.83) $ 0.42
Restricted stock units awards                
Diluted (losses) earnings per share:                
Share-based payment arrangements awards (in shares) 0     15     0 15
Performance share unit awards                
Diluted (losses) earnings per share:                
Share-based payment arrangements awards (in shares) 0     14     0 18
v3.24.3
Summary of Significant Accounting Policies - Fair Value Measurements (Details)
Sep. 30, 2024
contract
Hedging accounting  
Derivative Instruments and Hedging Activities Disclosures [Line Items]  
Number of contracts held 0
v3.24.3
Summary of Significant Accounting Policies - Income Taxes and Property and Equipment (Details)
Sep. 30, 2024
Minimum  
Property, Plant and Equipment [Abstract]  
Property and equipment, useful life 2 years
Maximum  
Property, Plant and Equipment [Abstract]  
Property and equipment, useful life 39 years
v3.24.3
Revenue Recognition - Schedule of Revenue Disaggregation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Revenues $ 695,163 $ 760,614 $ 2,074,706 $ 2,035,542
Revenues from contracts with customers        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 693,743 751,126 2,044,475 2,001,367
Other        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 1,420 9,488 30,231 34,175
Crude oil marketing        
Disaggregation of Revenue [Line Items]        
Revenues 660,842 719,925 1,967,491 1,913,673
Crude oil marketing | Revenues from contracts with customers        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 659,422 710,437 1,937,260 1,879,498
Crude oil marketing | Revenues from contracts with customers | Goods transferred at a point in time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 659,422 710,010 1,937,229 1,878,735
Crude oil marketing | Revenues from contracts with customers | Services transferred over time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 0 427 31 763
Crude oil marketing | Other        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 1,420 9,488 30,231 34,175
Trans-portation        
Disaggregation of Revenue [Line Items]        
Revenues 21,758 24,206 67,745 75,103
Trans-portation | Revenues from contracts with customers        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 21,758 24,206 67,745 75,103
Trans-portation | Revenues from contracts with customers | Goods transferred at a point in time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 0 0 0 0
Trans-portation | Revenues from contracts with customers | Services transferred over time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 21,758 24,206 67,745 75,103
Trans-portation | Other        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 0 0 0 0
Pipeline and storage        
Disaggregation of Revenue [Line Items]        
Revenues 43 59 67 308
Pipeline and storage | Revenues from contracts with customers        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 43 59 67 308
Pipeline and storage | Revenues from contracts with customers | Goods transferred at a point in time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 0 0 0 0
Pipeline and storage | Revenues from contracts with customers | Services transferred over time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 43 59 67 308
Pipeline and storage | Other        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 0 0 0 0
Logistics and repurposing        
Disaggregation of Revenue [Line Items]        
Revenues 12,520 16,424 39,403 46,458
Logistics and repurposing | Revenues from contracts with customers        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 12,520 16,424 39,403 46,458
Logistics and repurposing | Revenues from contracts with customers | Goods transferred at a point in time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 6,556 8,545 19,739 25,708
Logistics and repurposing | Revenues from contracts with customers | Services transferred over time        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers 5,964 7,879 19,664 20,750
Logistics and repurposing | Other        
Disaggregation of Revenue [Line Items]        
Total revenues from contracts with customers $ 0 $ 0 $ 0 $ 0
v3.24.3
Revenue Recognition - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]        
Revenue gross-up $ 96,236 $ 257,965 $ 218,394 $ 785,636
v3.24.3
Prepayments and Other Current Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Insurance premiums $ 258 $ 798
Rents, licenses and other 2,064 2,305
Total prepayments and other current assets $ 2,322 $ 3,103
v3.24.3
Property and Equipment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 234,752   $ 234,752   $ 231,969
Less accumulated depreciation and amortization (135,145)   (135,145)   (126,904)
Property and equipment, net 99,607   99,607   105,065
Finance lease ROU, accumulated amortization 15,700   15,700   11,000
Total depreciation and amortization 5,752 $ 6,936 18,287 $ 21,289  
Amortization of intangible assets 401 430 1,242 1,338  
Depreciation and amortization, excluding amounts under finance leases          
Property, Plant and Equipment [Line Items]          
Total depreciation and amortization 3,563 4,523 11,589 14,260  
Amortization of property and equipment under finance leases          
Property, Plant and Equipment [Line Items]          
Total depreciation and amortization $ 1,788 $ 1,983 $ 5,456 $ 5,691  
Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 2 years   2 years    
Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 39 years   39 years    
Tractors and trailers          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 117,113   $ 117,113   119,265
Tractors and trailers | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 5 years   5 years    
Tractors and trailers | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 6 years   6 years    
Field equipment          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 25,085   $ 25,085   25,024
Field equipment | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 2 years   2 years    
Field equipment | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 5 years   5 years    
Finance lease ROU assets          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 35,039   $ 35,039   35,724
Finance lease ROU assets | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 3 years   3 years    
Finance lease ROU assets | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 6 years   6 years    
Pipeline and related facilities          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 20,619   $ 20,619   20,397
Pipeline and related facilities | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 20 years   20 years    
Pipeline and related facilities | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 25 years   25 years    
Linefill and base gas          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 4,135   $ 4,135   3,922
Buildings          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 17,078   $ 17,078   17,089
Buildings | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 5 years   5 years    
Buildings | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 39 years   39 years    
Office equipment          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 3,025   $ 3,025   3,000
Office equipment | Minimum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 2 years   2 years    
Office equipment | Maximum          
Property, Plant and Equipment [Line Items]          
Property and equipment, useful life 5 years   5 years    
Land          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 4,163   $ 4,163   4,163
Construction in progress          
Property, Plant and Equipment [Line Items]          
Property and equipment, gross $ 8,495   $ 8,495   $ 3,385
v3.24.3
Other Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Insurance collateral deposits $ 605 $ 605
State collateral deposits 23 23
Materials and supplies 948 1,050
Debt issuance costs 1,007 1,259
Other 373 371
Total other assets $ 2,956 $ 3,308
v3.24.3
Segment Reporting - Schedule of Information Concerning Business Activities (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Segment Reporting [Abstract]        
Number of reportable segments | segment     4  
Number of operating segments | segment     4  
Segment Reporting Information [Line Items]        
Revenues $ 695,163 $ 760,614 $ 2,074,706 $ 2,035,542
Segment operating earnings (losses) (5,562) 3,925 (8,358) 3,075
Depreciation and amortization 5,752 6,936 18,287 21,289
Property and equipment additions 4,806 3,009 13,316 8,917
Crude oil marketing        
Segment Reporting Information [Line Items]        
Revenues 660,842 719,925 1,967,491 1,913,673
Inventory liquidation gains (losses) (2,100) 4,900 (800) 2,900
Trans-portation        
Segment Reporting Information [Line Items]        
Revenues 21,758 24,206 67,745 75,103
Pipeline and storage        
Segment Reporting Information [Line Items]        
Revenues 43 59 67 308
Logistics and repurposing        
Segment Reporting Information [Line Items]        
Revenues 12,520 16,424 39,403 46,458
Operating segments        
Segment Reporting Information [Line Items]        
Revenues 697,288 761,485 2,081,407 2,040,569
Segment operating earnings (losses) (1,042) 8,087 5,397 13,724
Operating segments | Crude oil marketing        
Segment Reporting Information [Line Items]        
Revenues 660,856 719,925 1,967,515 1,913,673
Segment operating earnings (losses) 2,284 7,664 14,499 12,922
Depreciation and amortization 1,367 2,092 4,401 6,335
Property and equipment additions 65 140 3,685 809
Operating segments | Trans-portation        
Segment Reporting Information [Line Items]        
Revenues 21,810 24,333 67,906 75,439
Segment operating earnings (losses) (542) 1,558 308 3,515
Depreciation and amortization 2,522 3,006 8,153 9,273
Property and equipment additions 1,463 1,416 4,374 2,754
Operating segments | Pipeline and storage        
Segment Reporting Information [Line Items]        
Revenues 1,052 770 3,234 2,473
Segment operating earnings (losses) (1,147) (866) (3,298) (2,846)
Depreciation and amortization 261 266 797 804
Property and equipment additions 243 182 439 1,423
Operating segments | Logistics and repurposing        
Segment Reporting Information [Line Items]        
Revenues 13,570 16,457 42,752 48,984
Segment operating earnings (losses) (1,637) (269) (6,112) 133
Depreciation and amortization 1,602 1,572 4,936 4,877
Property and equipment additions 2,856 1,271 4,639 3,819
Intersegment        
Segment Reporting Information [Line Items]        
Revenues (2,125) (871) (6,701) (5,027)
Intersegment | Crude oil marketing        
Segment Reporting Information [Line Items]        
Revenues (14) 0 (24) 0
Intersegment | Trans-portation        
Segment Reporting Information [Line Items]        
Revenues (52) (127) (161) (336)
Intersegment | Pipeline and storage        
Segment Reporting Information [Line Items]        
Revenues (1,009) (711) (3,167) (2,165)
Intersegment | Logistics and repurposing        
Segment Reporting Information [Line Items]        
Revenues (1,050) (33) (3,349) (2,526)
Other        
Segment Reporting Information [Line Items]        
Revenues 0 0 0 0
Segment operating earnings (losses) 0 0 0 0
Depreciation and amortization 0 0 0 0
Property and equipment additions $ 179 $ 0 $ 179 $ 112
v3.24.3
Segment Reporting - Schedule of Reconciliation of Segment Earnings to Earnings (Losses) Before Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Operating (losses) earnings $ (5,562) $ 3,925 $ (8,358) $ 3,075
General and administrative (4,520) (4,162) (13,755) (10,649)
Interest and other income 528 119 1,662 893
Interest expense (572) (1,027) (2,036) (2,525)
(Losses) Earnings before income taxes (5,606) 3,017 (8,732) 1,443
Operating segments        
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Operating (losses) earnings (1,042) 8,087 5,397 13,724
General and administrative        
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Operating (losses) earnings 0 0 0 0
General and administrative (4,520) (4,162) (13,755) (10,649)
Segment reconciling items        
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Interest and other income 528 119 1,662 893
Interest expense $ (572) $ (1,027) $ (2,036) $ (2,525)
v3.24.3
Segment Reporting - Schedule of Identifiable Assets by Industry Segment (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Segment Reconciliation [Abstract]    
Total assets $ 332,994 $ 361,334
Operating segments | Crude oil marketing    
Segment Reconciliation [Abstract]    
Total assets 172,033 185,285
Operating segments | Trans-portation    
Segment Reconciliation [Abstract]    
Total assets 52,831 57,653
Operating segments | Pipeline and storage    
Segment Reconciliation [Abstract]    
Total assets 25,043 25,027
Operating segments | Logistics and repurposing    
Segment Reconciliation [Abstract]    
Total assets 42,712 43,258
Cash and other    
Segment Reconciliation [Abstract]    
Total assets $ 40,375 $ 50,111
v3.24.3
Transactions with Affiliates - Schedule of Activities with Affiliates (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Aug. 12, 2022
operating_lease
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
truck
Related Party Transaction [Line Items]          
Billings to KSA and affiliates   $ 695,163 $ 760,614 $ 2,074,706 $ 2,035,542
Firebird and Phoenix          
Related Party Transaction [Line Items]          
Number of operating lease aggrement | operating_lease 4        
Firebird and Phoenix | Minimum          
Related Party Transaction [Line Items]          
Term of contract 2 years        
Firebird and Phoenix | Maximum          
Related Party Transaction [Line Items]          
Term of contract 5 years        
Affiliated Entities          
Related Party Transaction [Line Items]          
Billings to KSA and affiliates   0 0 0 9
Affiliated Entities | Crude oil purchases from affiliate          
Related Party Transaction [Line Items]          
Purchases from affiliated entity   3,921 9,362 13,065 13,940
Affiliated Entities | Rentals paid to affiliates of Scott Bosard          
Related Party Transaction [Line Items]          
Amounts of transaction   146 125 434 405
Affiliated Entities | Rentals paid to an affiliate of KSA          
Related Party Transaction [Line Items]          
Amounts of transaction   0 0 0 232
Affiliated Entities | Payments to an affiliate of KSA for purchase of vehicles          
Related Party Transaction [Line Items]          
Purchases from affiliated entity   $ 0 $ 0 $ 0 $ 157
G M C          
Related Party Transaction [Line Items]          
Number of pickup tracks purchased | truck         3
v3.24.3
Transactions with Affiliates - Narrative (Details) - Firebird and Phoenix
Aug. 12, 2022
operating_lease
Related Party Transaction [Line Items]  
Number of operating lease aggrement 4
Minimum  
Related Party Transaction [Line Items]  
Term of contract 2 years
Maximum  
Related Party Transaction [Line Items]  
Term of contract 5 years
v3.24.3
Other Current Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Other Liabilities Disclosure [Abstract]    
Accrual for payroll, benefits and bonuses $ 6,860 $ 5,684
Accrued automobile and workers’ compensation claims 7,285 5,804
Accrued medical claims 678 997
Accrued taxes 675 2,453
Other 1,222 1,212
Total other current liabilities $ 16,720 $ 16,150
v3.24.3
Long-Term Debt - Narrative (Details)
 9 Months Ended
Sep. 30, 2024
USD ($)
Aug. 02, 2023
Oct. 27, 2022
USD ($)
Line of Credit Facility [Line Items]      
Percentage of unusual and non recurring losses and expenses on Consolidated EBITDA   0.10  
Long-term debt $ 15,000,000    
Revolving Credit Facility      
Line of Credit Facility [Line Items]      
Maximum borrowing amount     $ 60,000,000.0
Weighted average interest rate 7.60%    
Letters of credit outstanding $ 11,500,000    
Borrowings outstanding $ 0    
Letter of Credit      
Line of Credit Facility [Line Items]      
Commitment fee percentage 2.25%    
Secured Debt | Term Loan      
Line of Credit Facility [Line Items]      
Debt instrument, face amount     $ 25,000,000.0
Long-term debt $ 15,000,000.0    
v3.24.3
Long-Term Debt - Schedule of Maturities of Long-Term Debt (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Debt Disclosure [Abstract]  
Remainder of 2024 $ 625
2025 2,500
2026 2,500
2027 9,375
Long-term debt $ 15,000
v3.24.3
Stock-Based Compensation Plan - Narrative (Details) - USD ($)
$ in Millions
 1 Months Ended 9 Months Ended
May 31, 2022
Sep. 30, 2024
Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Additional shares authorized (in shares) 150,000    
Number of shares authorized (in shares) 300,000 42,244  
Accrued dividends   $ 0.1 $ 0.1
Restricted stock units awards      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Unrecognized compensation cost   $ 1.2  
Period for recognition for remaining compensation cost   1 year 4 months 24 days  
Performance Unit Awards      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Unrecognized compensation cost   $ 0.8  
Period for recognition for remaining compensation cost   2 years 3 months 18 days  
v3.24.3
Stock-Based Compensation Plan - Share-Based Payment Arrangement (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]        
Compensation expense $ 423 $ 389 $ 1,181 $ 1,044
v3.24.3
Stock-Based Compensation Plan - Schedule of Share-Based Compensation Activity, Payment Arrangement (Details)
$ / shares in Units, $ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
$ / shares
shares
Restricted stock units awards  
Number of Shares  
Unit awards, beginning balance (in shares) | shares 58,587
Granted (in shares) | shares 53,266
Vested (in shares) | shares (30,430)
Forfeited (in shares) | shares (3,491)
Unit awards, ending balance (in shares) | shares 77,932
Weighted Average Grant Date Fair Value per Share  
Unit awards, beginning balance (in dollars per share) $ 41.16
Granted (in dollars per share) 29.96
Vested (in dollars per share) 39.03
Forfeited (in dollars per share) 36.67
Unit awards, ending balance (in dollars per share) $ 34.54
Aggregate grant date fair value awards issues | $ $ 1.6
Restricted stock units awards | Minimum  
Weighted Average Grant Date Fair Value per Share  
Granted (in dollars per share) $ 24.51
Restricted stock units awards | Maximum  
Weighted Average Grant Date Fair Value per Share  
Granted (in dollars per share) $ 30.03
Performance share unit awards  
Number of Shares  
Unit awards, beginning balance (in shares) | shares 17,424
Granted (in shares) | shares 29,546
Vested (in shares) | shares (6,445)
Forfeited (in shares) | shares (524)
Unit awards, ending balance (in shares) | shares 40,001
Weighted Average Grant Date Fair Value per Share  
Unit awards, beginning balance (in dollars per share) $ 31.03
Granted (in dollars per share) 30.01
Vested (in dollars per share) 29.72
Forfeited (in dollars per share) 30.26
Unit awards, ending balance (in dollars per share) $ 30.50
Aggregate grant date fair value awards issues | $ $ 0.9
Performance factor 100.00%
Performance share unit awards | Minimum  
Weighted Average Grant Date Fair Value per Share  
Granted (in dollars per share) $ 24.58
Performance share unit awards | Maximum  
Weighted Average Grant Date Fair Value per Share  
Granted (in dollars per share) $ 30.03
v3.24.3
Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Supplemental Cash Flow Elements [Abstract]    
Cash paid for interest $ 1,937 $ 2,671
Cash paid for federal and state income taxes 3,942 2,472
Non-cash transactions:    
Change in accounts payable related to property and equipment additions 0 52
Property and equipment acquired under finance leases $ 0 $ 17,632
v3.24.3
Leases - Schedule of Components of Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases [Abstract]        
Amortization of ROU assets $ 1,788 $ 1,983 $ 5,456 $ 5,691
Interest on lease liabilities 299 408 956 955
Operating lease cost 827 927 2,554 2,720
Short-term lease cost 3,202 3,529 10,166 10,668
Variable lease cost 5 6 62 18
Total lease expense $ 6,121 $ 6,853 $ 19,194 $ 20,052
v3.24.3
Leases - Schedule of Supplemental Cash Flow and Other Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash paid for amounts included in measurement of lease liabilities:    
Operating cash flows from operating leases $ 2,217 $ 2,739
Operating cash flows from finance leases 979 851
Financing cash flows from finance leases 4,800 4,944
ROU assets obtained in exchange for new lease liabilities:    
ROU assets obtained in exchange for new lease liabilities, Finance leases 0 17,632
ROU assets obtained in exchange for new lease liabilities, Operating leases $ 364 $ 667
v3.24.3
Leases - Schedule of Lease Terms and Discount Rates (Details)
Sep. 30, 2024
Sep. 30, 2023
Weighted-average remaining lease term (years):    
Finance leases 2 years 11 months 12 days 3 years 7 months 24 days
Operating leases 2 years 8 months 15 days 3 years 18 days
Weighted-average discount rate:    
Finance leases 5.70% 5.40%
Operating leases 4.40% 4.20%
v3.24.3
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Leases [Abstract]    
Finance lease ROU assets $ 19,363 $ 24,681
Operating lease ROU assets 3,971 5,832
Finance lease liabilities 5,843 6,206
Operating lease liabilities 1,688 2,829
Finance lease liabilities 15,248 19,685
Operating lease liabilities $ 2,293 $ 3,006
v3.24.3
Leases - Schedule of Maturities of Undiscounted Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Finance Lease Liabilities, Payments    
Remainder of 2024 $ 1,842  
Year one 7,213 $ 7,463
Year two 5,588 7,284
Year three 6,001 5,615
Year four 2,790 6,047
Year five   2,789
Thereafter 0  
Thereafter   0
Total lease payments 23,434 29,198
Less: Interest (2,343) (3,307)
Present value of lease liabilities 21,091 25,891
Less: Current portion of lease obligation (5,843) (6,206)
Total long-term lease obligation 15,248 19,685
Operating Lease Liabilities, Payments Due    
Remainder of 2024 744  
Year one 1,414 3,009
Year two 1,156 1,273
Year three 642 1,047
Year four 219 602
Year five   219
Thereafter 18  
Thereafter   18
Total lease payments 4,193 6,168
Less: Interest (212) (333)
Present value of lease liabilities 3,981 5,835
Less: Current portion of lease obligation (1,688) (2,829)
Total long-term lease obligation $ 2,293 $ 3,006
v3.24.3
Commitments and Contingencies - Narrative (Details) - USD ($)
 9 Months Ended
Sep. 30, 2024
Oct. 01, 2023
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]      
Self-insured retention   $ 1,500,000 $ 1,000,000.0
Umbrellas insurance coverage $ 1,300,000    
Aggregate medical claims for umbrella insurance coverage per calendar year $ 11,300,000    
v3.24.3
Commitments and Contingencies - Schedule of Expenses and Losses Incurred but Not Reported (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
Accrued automobile and workers’ compensation claims $ 7,285 $ 5,804
Accrued medical claims $ 678 $ 997
v3.24.3
Subsequent Events (Details)
$ / shares in Units, $ in Millions
Nov. 11, 2024
USD ($)
$ / shares
Mar. 31, 2025
Dec. 31, 2024
Nov. 08, 2024
Sep. 30, 2024
Revolving Credit Facility          
Subsequent Event [Line Items]          
Leverage ratio         2.50
Current ratio         2.00
Coverage ratio         1.25
Revolving Credit Facility | Forecast          
Subsequent Event [Line Items]          
Coverage ratio   1.25 1.10    
Subsequent Event | ARE Acquisition Corporation          
Subsequent Event [Line Items]          
Cash right per common stock issued and outstanding (in dollars per share) | $ / shares $ 38.00        
Termination fee | $ $ 4.0        
Subsequent Event | Revolving Credit Facility          
Subsequent Event [Line Items]          
Leverage ratio       2.00  
Current ratio       2.50  
Coverage ratio       1.05  
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