ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

2022 ANNUAL REPORT

ADAMS RESOURCES & ENERGY, INC. IS ENGAGED IN CRUDE OIL MARKETING, TRANSPORTATION, TERMINALLING AND STORAGE, TANK TRUCK TRANSPORTATION OF LIQUID CHEMICALS AND DRY BULK, 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 THROUGH ITS SUBSIDIARIES, GULFMARK ENERGY, INC., SERVICE TRANSPORT COMPANY, VICTORIA EXPRESS PIPELINE, LLC, GULFMARK TERMINALS, LLC, FIREBIRD BULK CARRIERS, INC. AND PHOENIX OIL, INC.

CONTENTS

Financial Highlights

2

Letter to Shareholders

3

Operations Summary

7

Managements' Discussion & Analysis of Financial

Condition & Results of Operations

17

Consolidated Financial Statements

35

Notes to Consolidated Financial Statements

40

Report of Independent Registered Public

Accounting Firm

79

Corporate Information

83

Executive Officers & Directors

83

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

1

FINANCIAL HIGHLIGHTS

Year Ended December 31

2022

2021

2020

(In thousands, except per share data)

Revenues

$3,366,917

$2,025,204

$1,022,422

Net Earnings

3,487

11,888

995

Cash & Cash Equivalents

20,532

97,825

39,293

Working Capital

19,083

87,199

72,965

Total Assets

384,159

374,703

296,187

Long Term Debt

24,375

-

-

Financial Lease Obligations

16,467

13,335

15,619

Earnings Per Common Share

$ 0.85

$2.75

$0.23

Dividends Per Common Share

$ 0.96

$0.96

$0.96

2 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

TO OUR SHAREHOLDERS

Dear Shareholders:

Adams had an extraordinary year during 2022 as we continued to execute on our long term vision of growth for the Company. Year-over-year adjusted cash flows grew by +15 percent, adjusted earnings by +10 percent and adjusted earnings per share by +16 percent. These results were achieved despite the inflationary headwinds and the market uncertainties that were prevalent in 2022. In addition, the Company continued its history of returning value to shareholders by paying a dividend for the 29th consecutiveyear.WearethankfultotheentireAdams'teamthatisalwaysfocusedonbeingsafe,efficient,andshareholderfocused.

The Company generated net earnings of $3.5 million, or $0.85 per diluted common share, on revenues of $3.37 billion for 2022, compared to net earnings of $11.9 million, or $2.75 per diluted common share, on revenues of $2.03 billion for 2021. On an adjusted basis, net earnings were $4.2 million, or $1.02 per diluted common share, for 2022, compared to $3.8 million, or $0.88 per diluted common share, for 2021. Adjusted net earnings, adjusted earnings per common share and adjusted cash flow are non-generally accepted accounting principle ("non-GAAP") financial measures that are defined and reconciled in the financial tables below.

The Company had an exciting year in 2022 in which we added another important acquisition, developed a vastly improved banking relationship, modernized our IT infrastructure, and capitalized on our strong cash position to take advantage of an unforeseen opportunity to acquire 44 percent our outstanding shares. These events placed Adams in a strong position for 2023 and beyond.

Summary of Financial Results (in thousands)

Year Ended December 31

2022

Operating Earnings (losses):

2021

2020

Marketing

$15,874

$25,243

$2,974

Transportation

10,891

7,104

1,873

Pipeline & Storage

(3,579)

(2,487)

(310)

Logistics & Repurposing

303

-

-

General & Administrative

(17,718)

(13,701)

(10,284)

Operating Earnings (losses)

5,771

16,159

(5,747)

Other Income (expense):

Interest Income

921

243

656

Interest Expense

(1,287)

(746)

(444)

Earnings (losses) Before Income Taxes

5,405

15,656

(5,535)

Income Tax (provision) Benefit

(1,918)

(3,768)

6,530

Net Earnings

$ 3,487

$11,888

$995

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

3

TO OUR SHAREHOLDERS

Year Ended December 31

2022

2021

2020

Reconciliation of Adjusted Cash Flow to Net Earnings:

Net Earnings

$3,487

$11,888

$995

Add (subtract):

Income Tax Provision (benefit)

1,918

3,768

(6,530)

Depreciation & Amortization

22,707

19,797

18,573

Gains on Sales of Property

(2,512)

(733)

(1,859)

Stock-Based Compensation Expense

1,022

854

643

Inventory Liquidation Gains

-

(10,344)

-

Inventory Valuation Losses

2,008

-

14,967

Net Change in Fair Value Contracts

353

(14)

(9)

Costs of Voluntary Early Retirement Program

-

-

431

Adjusted Cash Flow

$ 28,983

$25,216

$27,211

Year Ended December 31

2022

2021

2020

Reconciliation of Adjusted Cash Flow to Net Cash Provided by (Used in) Operating Activities:

Net Cash Provided by (used in) Operating Activities

$13,777

$81,026

$(43,999)

Add (subtract)

Income Tax Provision (benefit)

1,918

3,768

(6,530)

Deferred Income Taxes

2,136

1,401

(6,389)

Provision for Doubtful Accounts

20

6

27

Inventory Liquidation Gains

-

(10,344)

-

Inventory Valuation Losses

2,008

-

14,967

Costs of Voluntary Early Retirement Program

-

-

431

Changes in Assets & Liabilities

9,124

(50,641)

68,704

Adjusted Cash Flow

$ 28,983

$25,216

$27,211

4 ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

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Adams Resources & Energy Inc. published this content on 20 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 March 2023 21:00:08 UTC.