Q2 2024 Adams Resources & Energy Inc Earnings Call

August 8, 2024

Operator: Good afternoon, everyone. Welcome to the Adams Resources and Energy second quarter 2024 financial results conference call. All participants will be in listen-only mode.

Operator: Welcome to the Adams Resources and Energy second quarter 2024 financial results conference cup. All participants will be in less lonely mode. So, do you need assistance? Please signal the conference specialist by pressing the star key, followed by zero.

Operator: Good afternoon, everyone.

Operator: Welcome to the Adams Resources and Energy second quarter 2024 financial results conference call.

Operator: All participants will be in listen-only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.

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Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two.

Operator: After today's presentation, there will be an opportunity to ask questions.

Operator: To ask a question, you may press star then 1 on your telephone keypad.

Operator: As a reminder, this conference call is being recorded. Now, I will turn the call over to John Beisler, Investor Relations and Three-Part Advisors. Please go ahead.

Operator: As a reminder, this conference call is being recorded.

Operator: To withdraw your question, please press star then 2.

John Beisler: Now, it will turn the call over to John Beisler, Investor Relations with Three Part Advisors. Please go ahead.

Operator: As a reminder, this conference call is being recorded.

John Beisler: Now I will turn the call over to John Beisler, Investor Relations and Three-Part Advisors. Please go ahead. Thank you, Operator, and good afternoon, everyone. Welcome to the Adams Resources and Energy second quarter 2024 conference call.

John Beisler: Thank you, Operator, and good afternoon, everyone. Welcome to the Adams Resources and Energy second quarter 2024 conference call. Joining me on the call today are Adams Resources and Energy President and CEO Kevin Roycraft and the company's EVP and CFO Tracy Ohmart. This call is also being webcast and can be accessed through the audio link on the Investor Relations page at AdamsResources.com. Today's call, including the Q&A session, will be recorded.

John Beisler: Thank you, operator, and good afternoon, everyone. Welcome to the Adams Resources and Energy second quarter 2024 conference call. Joining me on the call today are Adams Resources and Energy President and CEO, Kevin Roycraft, and the company's EVP and CFO, Tracy Ohmart. This call is also being webcast and can be accessed through the audio link on the Investor Relations page at AdamsResources.com. Today's call, including the Q&A session, will be recorded.

John Beisler: Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events, or future financial performance or forward-looking statements, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, by their nature, are uncertain and outside of the company's control. Therefore, actual results may differ materially from those expressed or implied.

John Beisler: Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events, or future financial performance or forward-looking statements, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are, by their nature, uncertain and outside of the company's control. The actual results may differ materially from those expressed or implied.

Speaker Change: Joining me on the call today are Adams Resources and Energy President and CEO Kevin Roycraft and the company's EVP and CFO Tracy Ohmart.

John Beisler: This call is also being webcast and can be accessed through the audio link on the Investor Relations page at AdamsResources.com. Today's call, including the Q&A session, will be recorded.

John Beisler: Please be advised that any time-sensitive information may no longer be accurate as of the date of any reply or transcript reading. I would also like to remind you that the statements made in today's discussion that are not just historical facts, including statements or expectations or future events, or future financial performance or for-looking statements, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For-looking statements by their nature are uncertain and outside of the company's control; actual results may differ materially from those expressed or implied. Please refer to the earnings press release that was issued yesterday for our disclosures on for-looking statements.

John Beisler: Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading.

John Beisler: Please refer to the earnings press release that was issued yesterday for our disclosures regarding forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Adams Resources and Energy assumes no obligation to publicly revise or update any forward-looking statements. Instead, management will refer to non-GAAP measures including adjusted EBITDA, free cash flow, return on, and adjusted income and earnings per share. Reconciliations to the nearest gap measures can be found at the end of our earnings report.

John Beisler: I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events, or future financial performance or forward-looking statements, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

John Beisler: Forward-looking statements, by their nature, are uncertain and outside of the company's control. Actual results may differ materially from those expressed or implied. Please refer to the earnings press release that was issued yesterday for our disclosures on forward-looking statements.

John Beisler: These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

John Beisler: Adams Resources and Energy assumes no obligation to publicly revise or update any for-looking statements. Management will refer to non-GAAP measures including adjusted EBITDA, free cash flow, return on, and adjusted income and earnings per share. Reconciliation to the nearest gap measures can be found at the end of our earnings release.

John Beisler: Adams Resources and Energy assumes no obligation to publicly revise or update any forward-looking statements.

John Beisler: Management will refer to non- GAAP measures including adjusted EBITDA, free cash flow, return on, and adjusted income and earnings per share. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release.

John Beisler: Finally, the earnings press release we issued yesterday is posted on the Investor Relations section of our website, AdamsResources.com. A copy of the release has also been included in an AK submitted to the SEC.

John Beisler: Finally, the earnings press release we issued yesterday is posted on the investor relations section of our website, AdamsResources.com. A copy of the release has also been included in an 8K submitted to the SBCC. Now, I would like to turn the call over to the company's president and CEO, Kevin Roycraft.

John Beisler: Finally, the earnings press release we issued yesterday is posted on the investor relations section of our website, AdamsResources.com. A copy of the release has also been included in an A case submitted to the SBA. Now, I would like to turn the call over to the company's president and CEO, Kevin Roycraft.

John Beisler: Finally, the earnings press release we issued yesterday is posted on the investor relations section of our website AdamsResources.com. A copy of the release has also been included in an AK submitted to the SEC.

Kevin Roycraft: Now I would like to turn the call over to the company's President and CEO, Kevin Whitecraft. Kevin?

John Beisler: Now, I would like to turn the call over to the company's president and CEO , Kevin Roycraft. Kevin?

Kevin Roycraft: Thank you, John, and good afternoon, everyone. Thank you for your continued interest in Adams. I will begin today's call with some details on the quarter before turning it over to Tracy for a more in-depth dive into the finances. I will then close and make my remarks by discussing the outlook for the third quarter and for the full year 2024. Tracy, Greg Mills, our Gulfmark Asset Holdings Division President, and I will be available for your questions at the conclusion of the prepared remarks.

Kevin Roycraft: Thank you, John, and good afternoon, everyone. Thank you for your continued interest in Adams.

Kevin Roycraft: Thank you, John.

Kevin Roycraft: Good afternoon, everyone. Thank you for your continued interest in Adams. I will begin today's call with some details on the quarter before turning it to Tracy for a more in-depth dive into the financials. I will then close the prepared remarks by discussing the outlook for the third quarter and for the full year 2024. Tracy, Greg Mills, our golf mark asset holdings division president, and I will be available for your questions at the conclusion of the prepared remarks. While I'm encouraged by our sequential quarter-over-quarter improvement, there is still work to do as our results are not meeting the company's current potential.

Tracy: Thank you, John , and good afternoon, everyone. Thank you for your continued interest in Adams.

Kevin Roycraft: I will begin today's call with some details on the quarter before turning it over to Tracy for a more in-depth dive into the finances. I will then close and make prepared remarks by discussing the outlook for the third quarter and for the full year 2024. Tracy, Greg Mills, our Gulfmark Asset Holdings Division President, and I will be available for your questions at the conclusion of the prepared remarks.

Kevin Roycraft: I will begin today's call with some details on the quarter before turning it to Tracy for a more in-depth dive into the financials.

Kevin Roycraft: I will then close the prepared remarks by discussing the outlook for the third quarter and for the full year 2024.

Kevin Roycraft: Tracy, Greg Mills, our Gulfmark Asset Holdings Division President, and I will be available for your questions at the conclusion of the prepared remarks.

Kevin Roycraft: While I am encouraged by our sequential quarter-over-quarter improvement, there is still work to do as our results are not meeting the company's current potential. Our operating results for the first six months of the year reflect a combination of an extended period of weak freight demand driving down rates, lower drilling activity in our primary basin, and ongoing operational cost inflation. When adjusted for non-cash inventory losses, consolidated second quarter results were generally flat when compared to Q1.

Kevin Roycraft: While I'm encouraged by our sequential quarter-over-quarter improvement, there is still work to do as our results are not meeting the company's current potential. Our operating results for the first six months of the year reflect a combination of an extended period of weak freight demand driving down rates, lower drilling activity in our primary basin, and ongoing operational cost inflation. When adjusted for non-cash inventory losses, consolidated second quarter results were generally flat when compared to Q1.

Kevin Roycraft: While I am encouraged by our sequential quarter-over-quarter improvement, there is still work to do as our results are not meeting the company's current potential.

Kevin Roycraft: Our operating results for the first six months of the year reflect a combination of an extended period of weak freight demand driving down rates, lower drilling activity in our primary basin, and an ongoing operational cost inflate. When adjusted for non-cash inventory losses, consolidated second quarter results were generally flat when compared to Q1. However, we're not for an additional 0.8 million of self-insured retention expense, primarily from a trucking incident that occurred in the quarter. The quarter-over-quarter performance in EBITDA would have been much improved. EBITDA for the second quarter, when adjusted for inventory evaluation and additional insurance expense, was $5 million versus adjusted EBITDA of $4.2 million in Q1.

Kevin Roycraft: When adjusted for non-cash inventory losses, consolidated second quarter results were generally flat when compared to Q1.

Kevin Roycraft: However, were it not for an additional $0.8 million of self-insured retention expense, primarily from a trucking incident that occurred in the quarter, the quarter-over-quarter performance in EBITDA would have been much improved. EBITDA for the second quarter, when adjusted for inventory valuation and additional insurance expense, was $5 million versus adjusted EBIT of $4.2 million in Q1. Despite these challenges, we are continuing to improve our overall financial position. For four consecutive quarters, we have increased the company's cash and liquidity position.

Kevin Roycraft: However, were it not for an additional $0.8 million of self-insured retention expense, primarily from a trucking incident that occurred in the quarter, the quarter-over-quarter performance in EBITDA would have been much improved. EBITDA for the second quarter, when adjusted for inventory valuation and additional insurance expense, was $5 million versus just a dividend of $4.2 million in Q1. Despite these challenges, we are continuing to improve our overall financial position. For four consecutive quarters, we have increased the company's cash and liquidity position.

Kevin Roycraft: However, were it not for an additional $0.8 million of self-insured retention expense primarily from a trucking incident that occurred in the quarter, the quarter-over-quarter performance in EBITDA would have been much improved. EBITDA for the second quarter, when adjusted for inventory valuation,

Kevin Roycraft: and Additional Insurance Expense was $5 million versus adjusted EBIT of $4.2 million in Q1.

Kevin Roycraft: Despite these challenges, we are continuing to improve our overall financial position. For four consecutive quarters, we have increased the company's cash and liquidity positions. Adams's available cash grew by 1.9 million versus Q1, ending the second quarter with 38.5 million unrestricted cash. Over that same time period, we also improved our liquidity by 4.9 million, from 83.6 million at March 31, 2024, to 88.5 million. Additionally, in the quarter, we were able to make $3 million of accelerated principal payments towards our $25 million term loan that was used to repurchase the KSA shares. At the end of the quarter, the remaining balance of the loan was 15.6 million.

Kevin Roycraft: Despite these challenges, we are continuing to improve our overall financial position.

Kevin Roycraft: For four consecutive quarters, we have increased the company's cash and liquidity positions.

Kevin Roycraft: Adams' available cash grew by $1.9 million versus Q1, ending the second quarter with $38.5 million in unrestricted cash. Over that same time period, we also improved our liquidity by $4.9 million from $83.6 million at March 31, 2024 to $88.5 million. Additionally, in the quarter, we were able to make $3 million of accelerated principal payments towards our $25 million term loan that was used to repurchase KSA shares. At the end of the quarter, the remaining balance of the loan was $15.6 million.

Kevin Roycraft: Adams' available cash grew by $1.9 million versus Q1, ending the second quarter with $38.5 million in unrestricted cash.

Kevin Roycraft: Over that same time period, we also improved our liquidity by $4.9 million, from $83.6 million at March 31, 2024, to $88.5 million.

Kevin Roycraft: Additionally, in the quarter, we were able to make $3 million of accelerated principal payments towards our $25 million term loan that was used to repurchase the KSA shares. At the end of the quarter, the remaining balance of the loan was $15.6 million.

Kevin Roycraft: Our crude oil marketing segment, Gulfmark Energy, was certainly a bright spot for the company in Q2. Gulfmark saw a significant quarter-over-quarter improvement as they experienced growth in both margins and volumes. Volumes in our legacy trucking area, which includes South Texas, Michigan, and Louisiana, grew from 64,634 barrels per day to 67,099 barrels per day. Approximately 80% of the company's EBDA for the quarter came from Gulfmark's performance. Gulfmark's strong performance helped the Vex pipeline achieve improved results as well. The volume on the line has grown by over 20% in each of the previous two quarters. Throughput reached 13,881 barrels per day in Q2, up from 11,256 barrels per day in the first quarter of this year, and 9,377 barrels per day in Q4 of 2023.

Kevin Roycraft: Our crude oil marketing segment, Gulfmark Energy, was certainly a bright spot for the company in Q2. Gulfmark saw significant quarter-over-quarter improvement as it experienced growth in both margins and volume. Volumes in our legacy trucking area, which includes South Texas, Michigan, and Louisiana, grew from 64,634 barrels per day to 67,099 barrels per day. Approximately 80% of the company's EBITDA for the quarter came from Goldmark's performance. GoFMARC's strong performance helped the VEX pipeline achieve improved results as well.

Kevin Roycraft: Our crude oil marketing segment, Gulfmark Energy, was certainly a bright spot for the company in Q2. Gulfmark saw significant quarter-over-quarter improvement as it experienced growth in both margins and volume. Volumes in our legacy trucking area, which includes South Texas, Michigan, and Louisiana, grew from 64,634 barrels per day to 67,099 barrels per day. Approximately 80% of the company's EBITDA for the quarter came from Goldmark's performance. Goldmark's strong performance helped the VEX pipeline achieve improved results as well.

Kevin Roycraft: Volumes in our legacy trucking area, which includes South Texas, Michigan, and Louisiana, grew from 64,634 barrels per day to 67,099 barrels per day.

Kevin Roycraft: Approximately 80% of the company's EBITDA for the quarter came from Goldmark's performance.

Kofi Mark: Kofi Mark's strong performance helped the VEX pipeline achieve improved results as well.

Kevin Roycraft: The volume on the line has grown by over 20% in each of the previous two quarters; throughput reached 13,881 barrels per day in Q2, up from 11,256 barrels per day in the first quarter of this year and 9,377 barrels per day in Q4 of 2023. This increase is primarily driven by Gulfmark routing volumes through the BEX system and by third-party revenue gained from customers utilizing our terminal link services. As I discussed on our previous call, the weakness in our hydrocarbon repurposing segment, Phoenix Oil, continued in the second quarter.

Kevin Roycraft: Volume on the line has grown by over 20% in each of the previous two quarters. Throughput reached 13,881 barrels per day in Q2, up from 11,256 barrels per day in the first quarter of this year and 9,377 barrels per day in Q4 of 2023. This increase is primarily driven by Gulfmark routing volumes through the VEX system and by third-party revenue gained from customers utilizing our terminal link services. However, as I discussed on our previous call, the weakness in our hydrocarbon repurposing segment, Phoenix Oil, continued in the second quarter.

Kevin Roycraft: The volume on the line has grown by over 20% in each of the previous two quarters.

Kevin Roycraft: Throughput reached 13,881 barrels per day in Q2, up from 11,256 barrels per day in the first quarter of this year, and 9,377 barrels per day in Q4 of 2023.

Kevin Roycraft: This increase is primarily driven by Gulfmark routing volumes through the VEX system and by third-party revenue gain from customers utilizing our terminal-lang services.

Kevin Roycraft: This increase is primarily driven by Gulfmark routing volumes through the VEX system and by third-party revenue gained from customers utilizing our terminal link services.

Kevin Roycraft: As I have discussed on our previous call, the weakness in our hydrocarbon repurposing segment, Phoenix Oil, continued in the second quarter. This slowdown, due to reduced acceptance of truck deliveries for one of the primary products, is expected to be alleviated, leading Q3 as Phoenix will be offering product delivery by barge. Phoenix has leased tankage on the Houston Ship Channel that is currently being filled with products, and we expect barge deliveries to begin in Q3. This ability to deliver by barge is expected to open up new markets for Phoenix's products and improve their margins. Our crude oil transportation hauler, Firebird Bulk Carriers, quarterly results suffered from the additional self-insured retention expense mentioned previously on this call.

Kevin Roycraft: This slowdown, due to reduced acceptance of truck deliveries for one of their primary products, is expected to be alleviated late in Q3, as Phoenix will be offering product delivery by BARC. Phoenix has leased tankage on the Houston Ship Channel that is currently being filled with product, and we expect barge deliveries to begin in Q3.

Speaker Change: For more information visit www.FEMA.gov

Kevin Roycraft: As I have discussed on our previous call, the weakness in our hydrocarbon repurposing segment, Phoenix Oil, continued in the second quarter.

Kevin Roycraft: Phoenix has leased tankage on the Houston Ship Channel that is currently being filled with product, and we expect barge deliveries to begin in Q3. This ability to deliver by barge is expected to open up new markets for Phoenix's products and improve their margins.

Kevin Roycraft: This ability to deliver by barge is expected to open up new markets for Phoenix's products and improve their margins. However, our crude oil transportation hauler, Firebird Bulk Carriers, quarterly results suffered from the additional self-insured retention expense mentioned previously on this call. Quarter over quarter, our volumes remain fairly flat, but the impact of this expense on this tight margin business was too much to overcome to achieve their target. Farber will look to reducing expenses and improving efficiencies to combat the softening rig counts in the Eagle.

Kevin Roycraft: Our crude oil transportation hauler, Firebird Bulk Carriers, quarterly results suffered from the additional self-insured retention expense mentioned previously on this call. Quarter over quarter, our volumes remain fairly flat, but the impact of this expense on this tight margin business was too much to overcome to achieve their target. Barber will look to reducing expenses and improving efficiencies to combat softening rig counts in the Eagle.

Kevin Roycraft: Our crude oil transportation hauler, Firebird Bulk Carriers, quarterly results suffered from the additional self-insured retention expense mentioned previously on this call.

Kevin Roycraft: Quarter over quarter, volumes remain fairly flat, but the impact of this expense on this tight margin business was too much to overcome to achieve their target.

Kevin Roycraft: Quarter over quarter, our volumes remain fairly flat, but the impact of this expense on this tight margin business was too much to overcome to achieve their targets.

Kevin Roycraft: Roberts. Barbara will look to reducing expenses and proving efficiencies to combat softening rig counts in the Eagle Fruit. Our over the road chemical hauling division, Service Transport Company, showed mild sequential quarter improvement as mileage and load count ticked positive. However, revenue was slightly down as we experienced an increase in the number of short haul loads, and rate reductions took effect as customers' RFPs came along. While load was encouraging to seek quarter-over-quarter improvements, demand and rates will need to return to 2022 levels for service transport to meet its profitability goals. We do expect capacity to tighten as struggling carriers exit the market.

Kevin Roycraft: Barbara will look to reducing expenses and improving efficiencies to combat softening rig counts in the Eagleford.

Kevin Roycraft: Our over-the-road chemical hauling division, Service Transport Company, showed mild sequential quarter improvement as mileage and load count ticked positive. However, revenue was slightly down as we experienced an increase in the number of short-haul loads and rate reductions took effect as customers' RFPs came along. While it is encouraging to see quarter-over-quarter improvements, demand and rates will need to return to 2022 levels for service transport to meet its profitability goals. However, we do expect capacity to tighten as struggling carriers exit the market.

Kevin Roycraft: Our over-the-road chemical hauling division, Service Transport Company, showed mild sequential quarter improvement as mileage and load count ticked positive. However, revenue was slightly down as we experienced an increase in the number of short-haul loads and rate reductions took effect as customers' RFPs came along. While it is encouraging to see quarter over quarter improvements, demand and rates will need to return to 2022 levels for service transport to meet its profitability goals. However, we do expect capacity to tighten as struggling carriers exit the market.

Kevin Roycraft: Our over-the-road chemical hauling division, Service Transport Company, showed mild sequential quarter improvement as mileage and load count ticked positive.

Kevin Roycraft: However, revenue was slightly down as we experienced an increase in the number of short-haul loads and rate reductions took effect as customers' RFPs came along.

Kevin Roycraft: While it is encouraging to see quarter-over-quarter improvements, demand and rates will need to return to 2022 levels for service transport to meet its profitability goals.

Kevin Roycraft: We do expect capacity to tighten as struggling carriers exit the market. This should help lay the groundwork for increased rates in the second half of the year.

Kevin Roycraft: This should help lay the groundwork for increased rates in the second half of the year. I will touch on the outlook for Q3 and 2024 later, but we'll now turn the call over to Tracy for a deeper dive into the financials. Okay, Tracy?

Tracy Ohmart: This should help lay the groundwork for increased rates in the second half of the year. I will touch on the outlet for Q3 and 2024 later, but will now turn the call over to Tracy for a deeper revenue. For the second quarter of 2024 was $718.5 million compared to $624.8 million in the prior year quarter.

Kevin Roycraft: I will touch on the outlook for Q3 and 2024 later, but we'll now turn the call over to Tracy for a deeper dive into the financials. Tracy?

Tracy Ohmart: Thank you, Kevin, and good afternoon, everyone. Total revenue for the second quarter of 2024 was $718.5 million compared to $624.8 million in the prior year quarter. The increase was primarily driven by an increase in the market price of crude oil, partially offset by lower crude oil volume. The increase in crude oil prices was primarily due to OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast, as well as events in Ukraine and Israel, which may have resulted in volatility in crude oil prices.

Tracy Ohmart: Thank you, Kevin. Good afternoon, everyone. Total revenue for the second quarter of 2024 was $718.5 million, compared to $624.8 million in the prior year quarter. The increase was primarily driven by an increase in the market price of crude oil, partially offset by lower crude oil volumes. The increase in crude oil prices was primarily due to OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast, as well as events in Ukraine and Israel, which may have resulted in volatility in crude oil prices.

Tracy Ohmart: Thank you, Kevin, and good afternoon, everyone.

Tracy Ohmart: Total revenue for the second quarter of 2024 was $718.5 million compared to $624.8 million in the prior year quarter.

Tracy Ohmart: The increase was primarily driven by an increase in the market price of crude oil, partially offset by lower crude oil volumes. The increase in crude oil price was primarily due to OPEC oil production cuts and US inventory draws from mid-continent and Gulf Coast, as well as events in Ukraine and Israel, which may have resulted in volatility and crude oil prices.

Tracy Ohmart: The increase was primarily driven by an increase in the market price of crude oil, partially offset by lower crude oil volumes.

Tracy Ohmart: The increase in crude oil price was primarily due to OPEC oil production cuts and U.S. inventory draws from mid-continent and Gulf Coast, as well as events in Ukraine and Israel, which may have resulted in volatility in crude oil prices.

Tracy Ohmart: Looking at the quarter by individual segments. Second quarter revenues for a marketing segment were $682.8 million compared to $585.3 million in the prior year quarter. This increase is primarily a result of an increase in the market price of crude oil. Operating income for the quarter for the marketing segment was $5.6 million compared to $3.4 million in the second quarter of 2023. The increase is due to inventory valuation changes and an increase in the average market price of crude oil in lower operating costs related to the expiration of the Red River contract at the end of October 2023, partially offset by lower crude oil volumes from the Red River contract termination.

Tracy Ohmart: Looking at the quarter by individual segment, second quarter revenues for our marketing segment were $682.8 million compared to $585.3 million in the prior year quarter. This increase is primarily a result of an increase in the market price of crude oil. Operating income for the marketing segment for the quarter was $5.6 million compared to $3.4 million in the second quarter of 2023.

Tracy Ohmart: Looking at the quarter by individual segments.

Tracy Ohmart: Second quarter revenues for our marketing segment were $682.8 million compared to $585.3 million in the prior year quarter.

Tracy Ohmart: This increase is primarily a result of an increase in the market price of crude oil. Operating income for the quarter for the marketing segment was $5.6 million compared to $3.4 million in the second quarter of 2023.

Tracy Ohmart: The increase is due to inventory valuation changes, an increase in the average market price of crude oil, and lower operating costs related to the expiration of the Red River contract at the end of October 2023, partially offset by lower crude oil volumes from the Red River contract termination. Our transportation segment reported $22.8 million of revenue in the second quarter compared to $24.5 million in the prior year quarter. Operating income was $637,000 versus $1.1 million for the second quarter of 2023.

Tracy Ohmart: Our transportation segment reported $22.8 million of revenue in the second quarter compared to $24.5 million in the prior year quarter. Operating income was $637,000 versus $1.1 million for the second quarter of 2023. The decrease in revenue is primarily due to a decrease in volumes in transportation rates during 2024 as a result of the softening in the transportation market due to changes in demand, supply chain issues, and inflation. Our pipeline and storage segment reported minimal revenues after offsetting the inner segment revenues from our crude oil marketing segment. Operating losses for the quarter were 1.1 million versus a loss of $779,000 for the second quarter of 2023.

Tracy Ohmart: Our transportation segment reported $22.8 million of revenue in the second quarter compared to $24.5 million in the prior year quarter.

Tracy Ohmart: Operating income was $637,000 versus $1.1 million for the second quarter of 2023.

Tracy Ohmart: The decrease in revenue is primarily due to a decrease in volumes in transportation rates during 2024 as a result of the softening in the transportation market due to changes in demand, supply chain issues, and inflation. Our pipeline and storage segment reported minimal revenues after offsetting the inner segment revenues from our crude oil marketing segment.

Tracy Ohmart: Our pipeline and storage segment reported minimal revenues after offsetting the inner segment revenues from our crude oil marketing segment.

Tracy Ohmart: Operating losses for the quarter were $1.1 million versus a loss of $779,000 for the second quarter of 2023. The wider loss is primarily due to lower revenues from third-party customers, increases in operating salaries and wages, and other related personnel expenses as well as outside service costs. Our logistics and repurposing segment, which consists of Firebird and Phoenix, reported revenues of $12.9 million compared to $14.8 million in the prior year quarter. Firebird's revenues increased primarily due to increased transportation rates in the current period, while Phoenix's revenues decreased due to lower volumes and activity. The segment reported an operating loss of $2.9 million compared to a loss of $133,000 in the prior year quarter.

Tracy Ohmart: Operating losses for the quarter were $1.1 million versus a loss of $779,000 for the second quarter of 2023. The wider loss is primarily due to lower revenues from third-party customers, increases in operating salaries and wages, and other related personnel expenses, as well as outside service costs. Our logistics and repurposing segment, which consists of Firebird and Phoenix, reported revenues of $12.9 million compared to $14.8 million in the prior year quarter. Firebird's revenues increased primarily due to increased transportation rates in the current period, while Phoenix's revenues decreased due to lower volumes and activity. The segment reported an operating loss of $2.9 million compared to a loss of $133,000 in the prior year quarter.

Tracy Ohmart: Operating losses for the quarter were $1.1 million versus a loss of $779,000 for the second quarter of 2023.

Tracy Ohmart: The wider loss is primarily due to lower revenues from third-party customers, increases in operating salaries and wages, and other related personnel expenses, as well as outside service costs.

Tracy Ohmart: Ross. Our logistics and repurposing segment would consist of Firebird Phoenix reported revenues at $12.9 million compared to $14.8 million in the prior year quarter. Firebird's revenues increased primarily due to increased transportation rates in the current period, while Phoenix's revenue decreased due to lower volumes and activity. The segment reported an operating loss of $2.9 million compared to a loss of $133,000 in the prior year quarter. Firebird's results also include additional sufficient retention expense, as Kevin mentioned earlier. General and administrative expenses were $4.5 million compared to $1.7 million for the second quarter of 2023. The prior year quarter included a $2.6 million dollar favorable adjustment related to the reduction of the contingent consideration of Cruel for the Firebird and Phoenix acquisition in 2022.

Tracy Ohmart: Our logistics and repurposing segment, which consists of Firebird and Phoenix, reported revenues of $12.9 million compared to $14.8 million in the prior year quarter.

Tracy Ohmart: Firebird's revenues increased primarily due to increased transportation rates in the current period, while Phoenix's revenue decreased due to lower volumes and activity.

Tracy Ohmart: The segment reported an operating loss of $2.9 million compared to a loss of $133,000 in the prior year quarter.

Tracy Ohmart: Firebird's results also include additional self-insured retention expense, as Kevin mentioned earlier. General and administrative expenses were $4.5 million, compared to $1.7 million for the second quarter of 2023. The prior year quarter included a $2.6 million favorable adjustment related to the reduction of the contingent consideration accrual for the Firebird and Phoenix acquisition in 2022. Excluding the favorable adjustment from last year, our G&EX expenses are only slightly up compared to last year's second quarter.

Tracy Ohmart: Firebird's results also include additional self-insured retention expense, as Kevin mentioned earlier.

Tracy Ohmart: Firebird's results also include additional self-insured retention expenses, as Kevin mentioned earlier. The general and administrative expenses were $4.5 million compared to $1.7 million for the second quarter of 2023. The prior year quarter included a $2.6 million favorable adjustment related to the reduction of the contingent consideration accrual for the Fireburden Phoenix acquisition in 2022. Excluding the favorable adjustment from last year, our G&EX expenses are only slightly up compared to last year's second quarter.

Tracy Ohmart: General and administrative expenses were $4.5 million compared to $1.7 million for the second quarter of 2023.

Tracy Ohmart: The prior year quarter included a $2.6 million favorable adjustment related to the reduction of the contingent consideration accrual for the Fireburden Phoenix acquisition in 2022.

Tracy Ohmart: Excluding the favorable adjustment from last year, our GNIC expenses are only up slightly compared to last year's second quarter. Interest expense decreased to $671,000 for the second quarter of 2024 versus $802,000 in the prior year quarter. Primarily due to lower borrowings in the 2024 period as we continue to repay amounts outstanding under our term load, partially offset by higher amounts outstanding under financially obligations in the 2024 period.

Tracy Ohmart: Excluding the favorable adjustment from last year, our GENIC expenses are only up slightly compared to last year's second quarter.

Tracy Ohmart: Interest expense decreased to $671,000 for the second quarter of 2024 versus $802,000 in the prior year quarter, primarily due to lower borrowings in the 2024 period as we continue to repay amounts outstanding under our term loan, partially offset by higher amounts outstanding under finance lease obligations in the 2024 period. The net loss for the quarter was $2.2 million, or 87 cents per share, compared to net income of $827,000, or 32 cents per diluted share, in the second quarter of 2023.

Tracy Ohmart: Interest expense decreased to $671,000.

Tracy Ohmart: for the second quarter of 2024.

Tracy Ohmart: versus $802,000 in the prior year quarter, primarily due to lower borrowings in the 2020-4 period.

Tracy Ohmart: As we continue to repay amounts outstanding under our term loan, partially offset by higher amounts outstanding under finance lease obligations in the 2024 period.

Tracy Ohmart: Net loss for the quarter was $2.2 million, or $87 per share, compared to net income of $827,000, or $32 per diluted share, in the second quarter of 2023. Cash provided by operating activities was $8.3 million for the second quarter of 2024 compared to $27.3 million of cash used in operating activities in the prior year quarter. This increase in operating cash loads was primarily due to changes in our working capital accounts. Capital expenditures for the quarter total $2.4 million, primarily from the purchase of tractors, trailers, and other various equipment, and spending for the continuing construction of the dating facility.

Tracy Ohmart: Net loss for the quarter was $2.2 million, or $0.87 per share, compared to net income of $827,000, or $0.32 per diluted share, in the second quarter of 2023.

Tracy Ohmart: Cash provided by operating activities was $8.3 million for the second quarter of 2024, compared to $27.3 million of cash used in operating activities in the prior year quarter. This increase in operating cash flows was primarily due to changes in our working capital account. Capital expenditures for the quarter totaled $2.4 million, primarily from the purchase of tractors, trailers, and other various equipment and spending for the continuing construction of the Dayton facility. As Kevin previously mentioned, our unrestricted cash and cash equivalents at June 30, 2024 will total $38.5 million compared to $33.3 million at December 31, 2023. Total liquidity as of June 30 was $88.5 million versus $80.3 million at December 31, 2023. Now, I'll turn the call back over to Kevin for some final comments. Kevin?

Tracy Ohmart: Cash provided by operating activities was $8.3 million for the second quarter of 2024 compared to $27.3 million of cash used in operating activities in the prior year quarter. This increase in operating cash flows was primarily due to changes in our working capital account. Capital expenditures for the quarter totaled $2.4 million, primarily from the purchase of tractors, trailers, and other various equipment and spending for the continuing construction of the Dayton facility. As Kevin previously mentioned, our unrestricted cash and cash equivalents at June 30, 2024 totaled $38.5 million compared to $33.3 million on December 31, 2023. Total liquidity as of June 30 was $88.5 million versus $80.3 million at December 31, 2023. Now, I'll turn the call back over to Kevin for some final comments. Kevin?

Tracy Ohmart: Cash provided by Operating Activities was $8.3 million for the second quarter of 2024 compared to $27.3 million of cash used in Operating Activities in the prior year quarter.

Tracy Ohmart: This increase in operating cash flows was primarily due to changes in our working capital accounts.

Tracy Ohmart: Capital expenditures for the quarter totaled $2.4 million, primarily from the purchase of tractors, trailers, and other various equipment, and spending for the continuing construction of the Dayton facility.

Tracy Ohmart: As Kevin previously mentioned, our unrestricted cash and cash equivalents at June 30, 2024, total $38.5 million compared to $33.3 million on December 31, 2023. Total liquidity as of June 30 was $88.5 million versus $80.3 million at December 31, 2023.

Speaker Change: As Kevin previously mentioned, our unrestricted cash and cash equivalents at June 30th, 2024 totaled $38.5 million compared to $33.3 million on December 31, 2023.

Kevin Roycraft: Total liquidity as of June 30th was $88.5 million versus $80.3 million at December 31, 2023.

Kevin Roycraft: Now I'll turn the call back over to Kevin for some final comments. Kevin?

Tracy Ohmart: Now I'll turn the call back over to Kevin for some final comments. Kevin?

Kevin Roycraft: Thank you, Tracy. Starting to the outlook for the third quarter and for full year 2024. The first week of Q3 got off to a challenging start as Hurricane Bell impacted all of our Houston area operations. Though we were spared any significant damage, many of our locations, as well as our customers and our vendors' locations, are without power for most of the first full week of July. We were able to make up the majority of the barrel's impact on volumes and Miss Goldmark barrels, as well as came back online and service transport experience a spike in load count as chemical plants work through their log jam of orders.

Kevin Roycraft: Thank you, Tracy. Turning to The Outlook for the third quarter and for full year 2024. The first week of Q3 got off to a challenging start as Hurricane Beryl impacted all of our Houston area operations. Though we were spared any significant damage, many of our locations, as well as our customers' and our vendors' locations, were without power for most of the first full week of July.

Tracy Ohmart: Thank you, Tracy.

Kevin Roycraft: Turning to The Outlook for the third quarter and for full year 2024.

Kevin Roycraft: The first week of Q3 got off to a challenging start as Hurricane Beryl impacted all of our Houston area operations.

Kevin Roycraft: Though we were spared any significant damage, many of our locations, as well as our customers' and our vendors' locations, were without power for most of the first full week of July .

Kevin Roycraft: We were able to make up the majority of the barrels' impact on volumes and missed gulp mark barrels as wells came back online and service transport experienced a spike in load count as chemical plants worked through their log jam of orders. So we do not expect a material impact on Q3 results from the effects of Hurricane Vera. We will continue our efforts to control costs and improve operational efficiencies in all of our divisions, as we are seeing signs that the markets we serve are awakening.

Kevin Roycraft: We were able to make up the majority of the barrels' impact on volumes and miss Gulfmark barrels as wells came back online and service transport experienced a spike in load count as chemical plants worked through their log jam of orders. So we do not expect a material impact on Q3 results from the effects of Hurricane Barrel. We will continue our efforts to control costs and improve operational efficiencies in all of our divisions, as we are seeing signs that the markets we serve are awakening.

Kevin Roycraft: We were able to make up the majority of the barrels' impact on volumes and missed gulf mark barrels, as wells came back online and service transport experienced a spike in load count as chemical plants worked through their logjam of orders.

Kevin Roycraft: So we do not expect a material impact on Q3 results from the effects of her came barrel. We will continue our efforts to control costs and improve operational efficiencies in all of our divisions, as we are seeing signs that the markets we serve are awakening. Even with drilling activity slowing in our legacy areas, Goldmark has experienced steady, improving margins throughout the year. We expect strong margins for Goldmark to continue into the third quarter. Vex Pipeline's performance will generally follow Goldmark's volume trends. Finding consistent third-party shippers has been elusive; however, we will continue to work to secure third-party barrels.

Operator: Good afternoon, everyone. Welcome to the Adams Resources and Energy Second Quarter 2024 Financial Results Conference Cup. All participants will be in less lonely mode.

Kevin Roycraft: So we do not expect a material impact on Q3 results from the effects of Hurricane Beryl.

Kevin Roycraft: We will continue our efforts to control costs and improve operational efficiencies in all of our divisions as we are seeing signs that the markets we serve are awakening.

Operator: So, do you need assistance? Please signal the conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two.

Kevin Roycraft: Even with drilling activity slowing in our legacy areas, Gulf Markets has experienced steady, improving margins throughout the year. We expect strong margins for Goldmark to continue into the third quarter. VEX Pipeline's performance will generally follow Gulfmark's volume trend. However, finding consistent third-party shippers has been elusive.

Kevin Roycraft: Even with drilling activity slowing in our legacy areas, golf markets experience steady improving margins throughout the year. We expect strong margins for Gulfmark to continue into the third quarter. VEX Pipeline's performance will generally follow Gulfmark's volume trend, although finding consistent third-party shippers has been elusive. However, we will continue to work to secure third-party barrels. Once drilling activity in the area improves, and our potential partners complete their capital projects, we are optimistic that we will see an increase in VEX's performance.

Kevin Roycraft: Even with drilling activity slowing in our legacy areas, Gulf Markets experienced steady improving margins throughout the year.

Kevin Roycraft: We expect strong margins for Gulfmark to continue into the third quarter.

Operator: As a reminder, this conference call is being recorded.

Kevin Roycraft: VEX Pipeline's performance will generally follow Gulfmark's volume trends.

John Beisler: Now, it will turn the call over to John Beisler, investor relations with three part advisors. Please go ahead. Thank you, operator, and good afternoon, everyone.

Kevin Roycraft: However, we will continue to work to secure third-party barrels. Once drilling activity in the area improves, and our potential partners complete their capital projects, we are optimistic that we will see an increase in VEX's performance. For now, VEX provides tremendous operational efficiency for the company by moving 60 to 70 truckloads of crude each day by pipe instead of traditional semi-transportation. This equates to approximately 1.9 million miles of cost and risk being kept off the roads annually.

Kevin Roycraft: Finding consistent third-party shippers has been elusive. However, we will continue to work to secure third-party barrels.

Kevin Roycraft: Once drilling activity in the area improves and our potential partners complete their capital projects, we are optimistic that we will see an increase in the Invexus performance. For now, Vex provides tremendous operational efficiency for the company by moving 60 to 70 truckloads of crude each day by pipe instead of traditional semi-transportation. This equates to approximately 1.9 million miles of cost and risk being kept off the roads annually. We expect our hydrocarbon repurposing business, Phoenix Oil, will begin to see improved results in the back half of the year. As I mentioned previously, bars for livery should begin mid-third quarter.

John Beisler: Welcome to the Adams Resources and Energy Second Quarter 2024 Conference Call. Joining me on the call today are Adams Resources and Energy President and CEO, Kevin Roycraft, and the company's EVP and CFO, Tracy Ohmart. This call is also being webcast and can be accessed through the audio link on the investor relations page at Adams Resources.com. Today's call, including the Q&A session, will be recorded. Please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript reading.

Kevin Roycraft: Once drilling activity in the area improves and our potential partners complete their capital projects, we are optimistic that we will see an increase in VEX's performance.

Kevin Roycraft: For now, VEX provides tremendous operational efficiency for the company by moving 60 to 70 truckloads of crude each day by pipe instead of traditional semi-transportation. This equates to approximately 1.9 million miles of cost and risk being kept off the roads annually.

Kevin Roycraft: For now, VEX provides tremendous operational efficiency for the company by moving 60 to 70 truckloads of crude each day by pipe instead of traditional semi-transportation.

Kevin Roycraft: This equates to approximately 1.9 million miles of cost and risk being kept off the roads annually.

Kevin Roycraft: We expect our hydrocarbon repurposing business, Phoenix Oil, will begin to see improved results in the back half of the year. As I mentioned previously, BART's delivery should begin in the mid-third quarter. This is expected to open up new product delivery markets. Also, construction at our Dayton, Texas rail transfer yard is well underway. We aim to have the rail spur on this property up and running in the fourth quarter. This new rail spur will enhance the cost-effectiveness and efficiency for Phoenix by cutting the expenses associated with trucking products from our leased rail location to our storage facility, which is 24 miles west in Humboldt, Texas.

John Beisler: I would also like to remind you that the statements made in today's discussion that are not just historical facts, including statements or expectations or future events, or future financial performance or for-looking statements and are made pursuant to the state harbor provisions of the Private Security's litigation reform act of 1995. For-looking statements by their nature are uncertain and outside of the company's control, actual results may differ materially from those expressed or implied.

Kevin Roycraft: This is expected to open up new product delivery markets. Also, construction in our Dayton, Texas, rail transfer yard is well underway. We aim to have the rail spur on this property up and running in the fourth quarter. This new rail spur will enhance the cost effectiveness and efficiency for Phoenix by cutting the expenses associated with trucking products from our least rail location to our storage facility, which is 24 miles west in Umbal, Texas. With the rail spur, products can be directly unloaded from rail cars into our storage tank, eliminating both the trucking cost and the rail lease expense.

Kevin Roycraft: Also, construction at our Dayton, Texas rail transfer yard is well underway. We aim to have the rail spur on this property up and running in the fourth quarter.

Kevin Roycraft: This new rail spur will enhance the cost-effectiveness and efficiency for Phoenix by cutting the expenses associated with trucking products from our leased rail location to our storage facility, which is 24 miles west in Humboldt, Texas.

John Beisler: Please refer to the earnings press release that was issued yesterday for our disclosures on for-looking statements. These factors and other risk and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Adams Resources and Energy assumes no obligation to publicly revise or update any for-looking statements. Management will refer to non-gap measures including adjusted EBITDA, free cash flow, return on, and adjusted an income and earnings per share.

Kevin Roycraft: With the rail spur, products can be directly unloaded from railcars into our storage tank, eliminating both the trucking cost and the rail lease expense. We will relocate all of Firebird's trucking operations upon the full completion of this project and anticipate achieving that by late 2025. As for Firebird, we do not see drilling activity significantly increasing in the Eagleford Basin in the back half of the year.

Kevin Roycraft: With the rail spur, products can be directly unloaded from railcars into our storage tank, eliminating both the trucking cost and the rail lease expense.

Kevin Roycraft: We will relocate all of Firebird's trucking operations upon the full completion of this project and anticipate achieving that by late 2025. As for Firebird, we do not see drilling activity significantly increasing in the Eagleford Basin in the back half of the year. For this reason, we expect Firebird's hauling volumes to be flat or slightly lower in Q3, which is in line with normal production declines. Firebird will continue to work on cost control and operational efficiency in anticipation of a more robust drilling activity in 2025.

Kevin Roycraft: We will relocate all of Firebird's trucking operations upon the full completion of this project and anticipate achieving that by late 2025.

John Beisler: Reconciliation to the nearest gap measures can be found at the end of our earnings release. Finally, the earnings press release we issued yesterday is posted on the Investor Relations section of our website, AdamsResources.com. A copy of the release has also been included in an AK submitted to the SEC.

Kevin Roycraft: For this reason, we expect Firebird's hauling volumes to be flat or slightly lower in Q3, which is in line with normal production decline. Firebird will continue to work on cost control and operational efficiency in anticipation of a more robust drilling activity in 2025. Turning to our Chemical Transport Division, Service Transport. For the first time since the freight recession began in 2022, we're hearing some optimism in the freight market. Many analysts are predicting that the bottom has been reached and that we are moving toward recovery, possibly by this fall but almost certainly by the early stages of 2025.

Kevin Roycraft: For this reason, we expect Firebird's hauling volumes to be flat or slightly lower in Q3, which is in line with normal production decline. Firebird will continue to work on cost control and operational efficiency in anticipation of a more robust drilling activity in 2025. Turning to our Chemical Transport Division, Service Transport. For the first time since the freight recession began in 2022, we're hearing some optimism in the freight market. Many analysts are predicting that the bottom has been reached and that we are moving toward recovery possibly by this fall or almost certainly by the early stages of 2025.

Kevin Roycraft: which is in line with normal production declines.

Kevin Roycraft: Firebird will continue to work on cost control and operational efficiency in anticipation of a more robust drilling activity in 2025.

Kevin Roycraft: Now I would like to turn the call over to the company's president and CEO Kevin Whitecraft. Kevin? Thank you, John. Good afternoon, everyone. Thank you for your continued interest in Adams. I will begin today's call with some details on the quarter before turning it to Tracy for a more in-depth dive into the financials. I will then close the prepared remarks by discussing the outlook for the third quarter and for the full year 2024. Tracy, Greg Mills, our golf mark asset holdings division president and I will be available for your questions at the conclusion of the prepared remarks.

Kevin Roycraft: Turning to our chemical transport division service transport. For the first time since the freight recession began in 2022, we are hearing some optimism in the freight markets. Many analysts are predicting that the bottom has been reached, and that we are moving towards recovery, possibly by this fall, but almost certainly by the early stages of 2025. Enough carriers have exited the trucking industry to shrink available hauling capacity, which has grown the number of carrier load-offer rejections and increased the rates in the spot markets. Early returns in Q3 for service transport support these predicts. Post-Hurricane Barrel chemical shipment volumes have increased, and service transport has had some early success securing targeted rate increases from portions of our customer base.

Kevin Roycraft: Turning to our Chemical Transport Division, Service Transport. For the first time since the freight recession began in 2022, we're hearing some optimism in the freight markets.

Kevin Roycraft: Many analysts are predicting that the bottom has been reached and that we are moving towards toward recovery possibly by this fall but almost certainly by the early stages of 2025.

Kevin Roycraft: Enough carriers have exited the trucking industry to shrink available hauling capacity, which has grown the number of carrier load offer rejections and increased the rates in the spot market. Early returns in Q3 for service transport support these predictions. Post-hurricane barrel chemical shipment volumes have increased, and Service Transport has had some early success securing targeted rate increases from portions of its customer base. It will take some time to reverse the damage that has been done from the declining rate markets over the past two years, but we are seeing a light at the end of the tunnel, and it appears that recovery may be approaching.

Kevin Roycraft: While I'm encouraged by our sequential quarter over quarter improvement, there is still work to do as our results are not meeting the company's current potential. Our operating results for the first six months of the year reflect a combination of an extended period of weak freight demand driving down rates, lower drilling activity in our primary basin and an ongoing operational cost inflate. When adjusted for non-cash inventory losses, consolidated second quarter results were generally flat when compared to Q1.

Kevin Roycraft: Early returns in Q3 for service transport support these predictions.

Kevin Roycraft: Post-hurricane barrel chemical shipment volumes have increased, and Service Transport has had some early success securing targeted rate increases from portions of our customer base.

Kevin Roycraft: It will take some time to reverse the damage that has been done from the declining rate markets over the past two years, but we are seeing a light at the end of the tunnel, and it appears that recovery may be approaching. We believe freight markets will improve as capacity continues to exit the marketplace and increasing demand returns. This should drive more disciplined pricing decisions in the industry as a whole and improve financial results. We also believe that drilling in our primary basins will increase as production and energy demands grow. Both freight demand and increased drilling are critical components towards Adams reaching and surpassing our historical operating results.

Kevin Roycraft: In closing, while I am pleased with the sequential operational improvements as a company, the progress has been too slow, and we have more work to do. We believe freight markets will improve as capacity continues to exit the marketplace and increasing demand returns. This should drive more disciplined pricing decisions in the industry as a whole and improve financial results. We also believe that drilling in our primary basins will increase as production and energy demands grow.

Kevin Roycraft: However, we're not for an additional 0.8 million of self-insured retention expense, primarily from a trucking incident that occurred in the quarter. The quarter over quarter performance in EBITDA would have been much improved. EBITDA for the second quarter, when adjusted for inventory evaluation, and additional insurance expense, was $5 million versus adjusted EBITDA of 4.2 million in Q1. Despite these challenges, we are continuing to improve our overall financial position. For four consecutive quarters, we have increased the company's cash and liquidity positions.

Kevin Roycraft: In closing, while I am pleased with the sequential operational improvements as a company, the progress has been too slow and we have more work to do. We believe freight markets will improve as capacity continues to exit the marketplace and increasing demand returns.

Kevin Roycraft: This should drive more disciplined pricing decisions in the industry as a whole and improve financial results.

Kevin Roycraft: We also believe that drilling in our primary basins will increase as production and energy demands grow.

Kevin Roycraft: Both freight demand and increased drilling are critical components towards Adams reaching and surpassing its historical operating results. Our current expectation on the timing of these improvements extends into 2025. As we prepare for markets to revive, all divisions will continue to work to control costs and improve operational efficiency. We believe in the long-term strength of our organization, and the foundation that we have established allows us to make it through weak markets and thrive when market conditions improve. We are thankful for the team at Adams, especially our professional drivers, and look forward to delivering improved results to drive value for our shareholders. With that, I would like to open the line for questions. Operator?

Kevin Roycraft: Both freight demand and increased drilling are critical components towards Adams reaching and surpassing our historical operating results.

Kevin Roycraft: Our current expectation on the timing of these improvements extends into 2025. As we prepare for markets to revive, all divisions will continue to work to control costs and improve operational efficiencies. We believe in the long-term strength of our organization, and the foundation that we have established allows us to make it through weak markets and thrive when market conditions improve.

Kevin Roycraft: Adams's available cash grew by 1.9 million versus Q1, ending the second quarter with 38.5 million unrestricted cash. Over that same time period, we also improved our liquidity by 4.9 million from 83.6 million at March 31, 2024 to 88.5 million. Additionally in the quarter, we were able to make $3 million of accelerated principal payments towards our $25 million term loan that was used to repurchase the KSA shares. At the end of the quarter, the remaining balance of the loan was 15.6 million.

Kevin Roycraft: Our current expectation on the timing of these improvements extends into 2025.

Kevin Roycraft: As we prepare for markets to revive, all divisions will continue to work to control cost and improve operational efficiencies.

Kevin Roycraft: We believe in the long-term strength of our organization, and the foundation that we have established allows us to make it through weak markets and thrive when market conditions improve.

Kevin Roycraft: We are thankful for the team at Adams, especially our professional drivers, and look forward to delivering improved results to drive value to our shareholders.

Kevin Roycraft: With that, I would like to open the line for questions. Operator?

Kevin Roycraft: Our crude oil marketing segment, Gulfmark Energy, was certainly a bright spot for the company in Q2. Gulfmark saw a significant quarter over quarter improvement as they experienced growth in both margins and volumes. Volumes in our legacy trucking area, which includes South Texas, Michigan, and Louisiana, grew from 64,634 barrels per day to 67,099 barrels per day. Approximately 80% of the company's EBDA for the quarter came from Gulfmark's performance. Gulfmark's strong performance helped the vex pipeline achieve improved results as well.

Operator: Thank you.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the key. If at any point your questions have been addressed and you would like to withdraw your question, please press star then 2. We'll pause for just a moment while we assemble our roster. And our first question today comes from Chris Sakai with Singular Research. Please go ahead.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speaker phone, we ask you please pick up your handset before pressing the keys. If at any point your questions have been addressed and you'd like to withdraw your question, please press star, then two. We'll pause for just a moment while we assemble our roster.

Operator: Thank you. We will now begin the question and answer session.

Operator: To ask a question, you may press star then 1 on your telephone keypad.

Operator: If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.

Operator: If at any point your questions have been addressed and you would like to withdraw your question, please press star then 2.

Operator: We'll pause for just a moment while we assemble our roster.

Chris Sakai: Our first question today comes from Chris Sakai with Singular Research. Please go ahead.

Operator: And our first question today comes from Chris Sakai with Singular Research. Please go ahead.

Chris Sakai: Yes, hi, good afternoon. I just wanted to ask you what sort of catalysts you expect to be optimistic about conditions in the chemical transportation market improving in the latter half of 2024 and early 2025.

Kevin Roycraft: If I get activated, I just wanted to ask, what sort of catalyst do we see to be optimistic about conditions in the chemical transportation market and improving in the latter half of 2024 and early 2025? That's a great question, Chris. I appreciate it. What we've seen is some data showing the number of turn downs by carriers has been increasing. In 2021, for example, overall in the industry, carrier turn downs when a load is offered to them and they give it back was around 25% of all loads. As the freight recession started to hit, that's been dropped between 3% and 5% over the last two years and really has flatlined in Q4.

Kevin Roycraft: The volume on the line has grown by over 20% in each of the previous two quarters. Throughput reached 13,881 barrels per day in Q2, up from 11,256 barrels per day in the first quarter of this year, and 9,377 barrels per day in Q4 of 2023. This increase is primarily driven by Gulfmark routing volumes through the vex system and by third-party revenue gain from customers utilizing our terminal-lang services.

Chris Sakai: Yes, hi, good afternoon. I just.

Chris Sakai: I wanted to ask, what sort of catalysts would you see to be optimistic about conditions in the chemical transportation market improving in the latter half of 2024 and early 2025?

Kevin Roycraft: Yeah, that's a great question, Chris. I appreciate it. What we've seen is some data showing the number of turndowns by carriers has been increasing. So in 2021, for example, overall in the industry, carrier turndowns, when a load is offered to them, and they give it back, were around 25% of all loads. And then as the freight recession started to hit, that's dropped to between three and five percent over the last two years and really has flatlined in Q4.

Kevin Roycraft: Yeah, that's a great question, Chris. I appreciate it. What we've seen is some data showing the number of turndowns by carriers has been increasing. So in 2021, for example, overall in the industry, carrier turndowns, when a load is offered to them, and they give it back, were around 25% of all loads. And then as the Great Recession started to hit, that's dropped to between three and five percent over the last two years and really has flatlined in Q4.

Kevin Roycraft: Yeah, that's a great question, Chris. Appreciate it. What we've seen is some data showing the number of turndowns by carriers has been increasing. So in 2021, for example,

Kevin Roycraft: Overall, in the industry, carrier turndowns, when a load is offered to them and they give it back, was around 25% of all loads. And then as the freight recession started to hit, that's been dropped to between 3% and 5% over the last two years.

Kevin Roycraft: This ability to deliver by barge is expected to open up new markets for Phoenix's products and improve their margins. Our crude oil transportation hauler, Firebird bulk carriers, quarterly results suffered from the additional self-insured retention expense mentioned previously on this call. Quarter over quarter are volumes remain fairly flat, but the impact of this expense on this tight margin business was too much to overcome to achieve their target.

Kevin Roycraft: We're starting to see that tick up. The analyst that we were looking at was saying this is possibly, not definitely, but possibly a sign that capacity is shrinking. Also, the data surrounding the number of trucking companies exiting the market, either through bankruptcies or just closing and getting away from it, is starting to create a capacity shortage. The thing that gives us some hope on that is that service transport is having some success for the first time in two years, being able to take some targeted ratings. Recreases. It will take a lot of time to recover from the rates that have been really hit hard over the last two years.

Kevin Roycraft: And we're starting to see that tick up. And so the analyst that we were looking at was saying this is possibly, not definitely, but possibly, a sign that capacity is shrinking. And also, the data surrounding the number of trucking companies exiting the market, either through bankruptcies or just closing and getting away from it, is starting to create a capacity shortage. And the thing that gives us some hope on that is that service transport is having some success for the first time in two years, being able to take some targeted rate increases.

Kevin Roycraft: and really has flatlined in Q4, and we're starting to see that tick up. And so the analysts that we were looking at were saying this is possibly, not definitely, but possibly a sign that the capacity is shrinking. And also,

Kevin Roycraft: The data surrounding the number of trucking companies exiting the market, either through bankruptcies or just closing and getting away from it, is starting to create a capacity shortage.

Kevin Roycraft: And the thing that gives us some hope on that is that service transport is having some success for the first time in two years, being able to take some targeted rate increases.

Kevin Roycraft: Roberts. Barbara will look to reducing expenses and proving efficiencies to combat softening rig counts in the eagle fruit. Our over the road chemical hauling division, service transport company, showed mild sequential quarter improvement as mileage and load count ticked positive. However, revenue was slightly down as we experienced an increase in the number of short haul loads and rate reductions took effect as customers RFPs came along. While load was encouraging to seek quarter over quarter improvements, demand and rates will need to return to 2022 levels for service transport to meet its profitability goals. We do expect capacity to tighten as struggling carriers exit the market. This should help lay the groundwork for increased rates in the second half of the year.

Kevin Roycraft: It will take a lot of time to recover from the rates that have been really hit hard over the last two years, but we are seeing customers in pockets where capacity is getting tight start to agree to rate increases. So we see that as a positive sign because we really haven't been in a rate increase mode for a couple years.

Kevin Roycraft: It will take a lot of time to recover from the rates that have been really hit hard over the last two years. But we are seeing customers in pockets where capacity is getting tight start to agree to rate increases. So we see that as a positive sign because we really haven't been in a rate increasing mode in a couple years.

Kevin Roycraft: But we are seeing customers in pockets where capacity is getting tight, start to agree to rate increases. So we see that as a positive sign because we really haven't been in a rate-increasing mode in a couple of years. Okay, great.

Chris Sakai: Okay, great. And then Looks like there was some great throughput from the VEX pipeline in the second quarter. How should we be thinking about this throughput for the rest of the year?

Kevin Roycraft: Okay, great. And then Looks like there was some great throughput from the VEX pipeline in the second quarter. How should we be thinking about this throughput for the rest of the year?

Chris Sakai: And then it looks like there was some great throughput from the X pipeline in the second quarter. How should we be thinking about this throughput for the rest of the year?

Chris Sakai: Okay, great. And then

Speaker Change: Looks like there was some great throughput from the VEX pipeline in the second quarter. How should we be thinking about this throughput for the rest of the year?

Greg Mills: Yeah, maybe I'll turn that one over to Greg.

Kevin Roycraft: Yeah, maybe I'll turn that one over to Greg. Greg, do you want to take that one?

Greg Mills: Yeah, maybe I'll turn that one over to Greg. Greg, do you want to take that one?

Greg Mills: Greg, do you want to take that one? Sure, Kevin. Thank you. We see volumes probably consistently moving where they are. And where they have been. But you know, we're not seeing quite as many flowbacks. I would say the volume that we experienced in the second quarter. And even the first quarter this year was helped out by some producer flowbacks. And so I think where we're headed with Vex is at a comfortable level, but not maybe quite as high on the volume that we saw in 2Q. But yet still steady, steady volume. Okay, great.

Kevin Roycraft: Yeah, maybe I'll turn that one over to Greg. Greg, do you want to take that one?

Greg Mills: Sure, Kevin. Thank you. We see volumes probably consistently moving where they are and where they have been. But, you know, we're not seeing quite as many flowbacks. I would say the volume that we experienced in the second quarter and even the first quarter this year was helped out by some producer flowbacks. And so I think where we're headed with VEX is at a comfortable level, but maybe not quite as high on the volume that we saw in 2Q, but yet still steady, steady volume.

Greg Mills: Sure, Kevin. Thank you. We see volumes probably consistently moving where they are and where they have been. But you know, we're not seeing quite as many flowbacks. I would say the volume that we experienced in the second quarter and even the first quarter this year was helped out by some producer flowbacks. And so I think where we're headed with VEX is at a comfortable level, but maybe not quite as high on the volume that we saw in 2Q, but yet still steady, steady volume.

Kevin Roycraft: Sure, Kevin, thank you.

Greg Mills: We see volumes.

Tracy Ohmart: I will touch on the outlet for Q3 and 2024 later, but will now turn the call over to Tracy for a deeper revenue for the second quarter of 2024 was $718.5 million compared to $624.8 million in the prior year quarter. The increase was primarily driven by an increase in the market price of crude oil, partially offset by lower crude oil volumes. The increase in crude oil price was primarily due to OPEC oil production cuts and US inventory draws from mid-continent and Gulf Coast as well as events in Ukraine and Israel, which may have resulted in volatility and crude oil prices.

Greg Mills: probably consistently

Greg Mills: moving where they are and where they have been.

Greg Mills: We're not seeing quite as many flowbacks. I would say the volume that we experienced in the second quarter and even the first quarter this year was helped out by some producer flowbacks.

Greg Mills: And so I think where we're headed with VEX is at a comfortable level, but not maybe quite as high on the volume that we saw in 2Q, but yet still steady, steady volume.

Chris Sakai: Okay, great. And would that be the same for the terminaling volumes as well?

Greg Mills: Okay, great. And would that be the same for the terminaling volumes as well?

Greg Mills: And is that would that be the save for determining volumes as well? Yes, with respect to golf mark and the term line volume into the pipeline that will stay steady.

Speaker Change: Okay great and is that would that be the same for the terminaling volumes as well?

Greg Mills: Yes, with respect to Gulfmark and the terminal volume into the pipeline, that will stay steady. However, we do not have some of the third-party revenue at the Victoria Terminal moving forward into this quarter, so we'll see that drop off a bit.

Greg Mills: Well, yes, with respect to Gulfmark and the terminaling volume into the pipeline, that'll stay steady. However, we do not have some of the third-party revenue at the Victoria terminal moving forward into this quarter, so we'll see that drop off a bit.

Tracy Ohmart: Looking at the quarter by individual segments. Second quarter revenues for a marketing segment were $682.8 million compared to $585.3 million in the prior year quarter. This increase is primarily a result of an increase in the market price of crude oil, operating income for the quarter for the marketing segment was $5.6 million compared to $3.4 million in the second quarter of 2023. The increase is due to inventory valuation changes and increase in the average market price of crude oil in lower operating costs related to the expiration of the Red River contract at the end of October 2023, partially offset by lower crude oil volumes from the Red River contract termination.

Greg Mills: Well, yes, with respect to Gulfmark and the terminaling volume into the pipeline, that'll stay steady.

Greg Mills: We do not have some of the third party revenue at the Victoria Terminal moving forward into this quarter. So we'll see that drop off a bit. Okay, great.

Greg Mills: We do not have some of the third-party revenue at the Victoria Terminal moving forward into this quarter, so we'll see that drop off a bit.

Chris Sakai: Okay, great. Thanks for the answers.

Chris Sakai: Thanks for the answer. Thank you.

Speaker Change: Okay, great. Thanks for the answer.

Operator: Thank you. And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star more than one at this time. We'll pause for just a moment to assemble our roster. And this concludes our question and answer session. I'd like to turn the conference back over to the company for any closing remarks.

Operator: And, as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star, then one at this time. We'll pause for just a moment to assemble our roster.

Operator: Thank you.

Operator: Thank you. And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star then 1 at this time. We'll pause for just a moment to assemble our roster.

Operator: And this concludes our question-and-answer session.

Kevin Roycraft: I'd like to turn the conference back over to the company for the closing remarks.

Operator: And this concludes our question and answer session. I'd like to turn the conference back over to the company for any closing remarks.

Kevin Roycraft: Thank you.

Kevin Roycraft: Thank you, and thank you for your continued interest in Adams. We will be participating in the Three-Part Advisors Idea Conference in Chicago on August 28. Qualified investors that would like to attend or schedule a meeting with Tracy and I should contact Three-Part Advisors. We look forward to providing an update on our progress when we report our third-quarter earnings in November. Thank you for joining us.

Kevin Roycraft: And thank you for your continued interest in atoms. We will be participating in the three-part advisors' idea conference in Chicago on August 28th. Qualified investors that would like to attend our schedule of meeting with Tracy and I should contact Three Part Advisors.

Kevin Roycraft: Thank you and thank you for your continued interest in Adams. We will be participating in the Three-Part Advisors Idea Conference in Chicago on August 28. Qualified investors that would like to attend or schedule a meeting with Tracy and I should contact Three-Part Advisors.

Kevin Roycraft: We look forward to providing an update on our progress when we report our third quarter earnings in November. Thank you for joining us.

Kevin Roycraft: We look forward to providing an update on our progress when we report our third quarter earnings in November . Thank you for joining us

Operator: Thank you.

Operator: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: Thank you. This concludes today's conference call. We thank you all for attending today's presentation.

Operator: You may now disconnect your lines and have a wonderful day.

Tracy Ohmart: Our pipeline and storage segment reported minimal revenues after offsetting the inner segment revenues from our crude oil marketing segment. Operating losses for the quarter were 1.1 million versus a loss of $779,000 for the second quarter of 2023. The wider loss is primarily due to lower revenues from third-party customers, increases in operating salaries and wages and other related personnel expenses as well as outside service costs.

Tracy Ohmart: General and administrative expenses were $4.5 million compared to $1.7 million for the second quarter of 2023. The prior year quarter included a $2.6 million dollar favorable adjustment related to the reduction of the contingent consideration of cruel for the Firebird and Phoenix acquisition in 2022. Excluding the favorable adjustment from last year, our GNIC expenses are only up slightly compared to last year's second quarter. Interest expense decreased to $671,000 for the second quarter of 2024 versus $802,000 in the prior year quarter. Primarily due to lower borrowings in the 2024 period as we continue to repay amounts outstanding under our term load, partially offset by higher amounts outstanding under financially obligations in the 2024 period.

Tracy Ohmart: Net loss for the quarter was $2.2 million or $87 per share compared to net income of $827,000 or $32 per diluted share in the second quarter of 2023. Cash provided by operating activities was $8.3 million for the second quarter of 2024 compared to $27.3 million of cash used in operating activities in the prior year quarter. This increase in operating cash loads was primarily due to changes in our working capital accounts. Capital expenditures for the quarter total $2.4 million, primarily from the purchase of tractors, trailers, and other various equipment and spending for the continuing construction of the dating facility.

Tracy Ohmart: As Kevin previously mentioned, our unrestricted cash and cash equivalents at June 30, 2024 total $38.5 million compared to $33.3 million on December 31, 2023. Total liquidity as of June 30 was $88.5 million versus $80.3 million at December 31, 2023.

Kevin Roycraft: Now I'll turn the call back over to Kevin for some final comments. Kevin? Thank you, Tracy.

Kevin Roycraft: Starting to the outlook for the third quarter and for full year 2024. The first week of Q3 got off to a challenging start as Hurricane Bell impacted all of our Houston area operations. Though we were spared any significant damage, many of our locations, as well as our customers and our vendors locations, or without power for the most of the first full week of July. We were able to make up the majority of the barrel's impact on volumes and Miss Goldmark barrels as well as came back online and service transport experience a spike in load count as chemical plants work through their log jam of orders. So we do not expect a material impact on Q3 results from the effects of her came barrel.

Kevin Roycraft: We will continue our efforts to control costs and improve operational efficiencies in all of our divisions as we are seeing signs that the markets we serve are awakening. Even with drilling activity slowing in our legacy areas, Goldmark has experienced steady improving margins throughout the year. We expect strong margins for Goldmark to continue into the third quarter. Vex Pipeline's performance will generally follow Goldmark's volume trends. Finding consistent third-party shippers has been elusive, however we will continue to work to secure third-party barrels.

Kevin Roycraft: We expect our hydrocarbon repurposing business, Phoenix Oil, will begin to see improve results in the back half of the year. As I mentioned previously, bars for livery should begin mid-third quarter. This is expected to open up new product delivery markets. Also, construction in our Dayton, Texas rail transfer yard is well underway. We aim to have the rail spur on this property up and running in the fourth quarter. This new rail spur will enhance the cost effectiveness and efficiency for Phoenix by cutting the expenses associated with trucking products from our least rail location to our storage facility, which is 24 miles west in Umbal, Texas.

Kevin Roycraft: With the rail spur, products can be directly unloaded from rail cars into our storage tank, eliminating both the trucking cost and the rail lease expense. We will relocate all of Firebird's trucking operations upon the full completion of this project and anticipate achieving that by late 2025.

Kevin Roycraft: As for Firebird, we do not see drilling activity significantly increasing in the Eagleford Basin in the back half of the year. For this reason, we expect Firebird's hauling volumes to be flat or slightly lower in Q3, which is in line with normal production declines. Firebird will continue to work on cost control and operational efficiency in anticipation of a more robust drilling activity in 2025.

Kevin Roycraft: Early returns in Q3 for service transport support these predicts. Post-Hurricane Barrel Chemical Shipment Volumes have increased and service transport has had some early success securing targeted rate increases from portions of our customer base. It will take some time to reverse the damage that has been done from the declining rate markets over the past two years, but we are seeing a light at the end of the tunnel and it appears that recovery may be approaching.

Kevin Roycraft: We believe freight markets will improve as capacity continues to exit the marketplace and increasing demand returns. This should drive more disciplined pricing decisions in the industry as a whole and improve financial results. We also believe that drilling in our primary basins will increase as production and energy demands grow. Both freight demand and increased drilling are critical components towards Adams reaching and surpassing our historical operating results. Our current expectation on the timing of these improvements extends into 2025.

Kevin Roycraft: As we prepare for markets to revive, all divisions will continue to work to control cost and improve operational efficiencies. We believe in the long-term strength of our organization and the foundation that we have established allows us to make it through weak markets and thrive when market conditions improve. We are thankful for the team at Adams, especially our professional drivers, and look forward to delivering improved results to drive value to our shareholders.

Kevin Roycraft: With that, I would like to open the line for questions. Operator? Thank you.

Operator: We will now begin the question and answer session. To ask a question, you may press star than one on your telephone keypad. If you are using a speaker phone, we ask you please pick up your handset before pressing the keys. If at any point your questions have been addressed and you'd like to withdraw your question, please press star than two. We'll pause for just a moment while we assemble our roster.

Chris Sakai: Our first question today comes from Chris Sakai with singular research. Please go ahead.

Kevin Roycraft: As the freight recession started to hit, that's been dropped between 3% and 5% over the last two years and really has flatlined in Q4. We're starting to see that tick up. The analyst that we were looking at was saying this is possibly not definitely but possibly a sign that capacity is shrinking. Also, the data surrounding the number of trucking companies exiting the market, either through bankruptcies or just closing and getting away from it, is starting to create a capacity shortage.

Kevin Roycraft: The thing that gives us some hope on that is that service transport is having some success for the first time in two years, being able to take some targeted ratings. Recreases. It will take a lot of time to recover from the rates that have been really hit hard over the last two years. But we are seeing customers in pockets where capacity is getting tight, start to agree to rate increases. So we see that as a positive sign because we really haven't been in a rate increasing mode in a couple years.

Chris Sakai: Okay, great.

Chris Sakai: And then it looks like there was some great throughput from the X pipeline in the second quarter.

Greg Mills: How should we be thinking about this throughput for the rest of the year?

Greg Mills: Yeah, maybe I'll turn that one over to Greg. Greg, do you want to take that one? Sure, Kevin. Thank you. We see volumes probably consistently moving where they are. And where they have been. But you know, we're not seeing quite as many flowbacks. I would say the volume that we experienced in the second quarter. And even the first quarter this year was helped out by some producer flowbacks. And so I think where we're headed with Vex is at a comfortable level, but not maybe quite as high on the volume that we saw in 2Q. But yet still steady steady volume. Okay, great.

Greg Mills: And is that would that be the save for determining volumes as well? Yes, with respect to golf mark and the term line volume into the pipeline that will stay steady. We do not have some of the third party revenue at the Victoria terminal moving forward into this quarter.

Greg Mills: So we'll see that drop off a bit. Okay, great. Thanks for the answer. Thank you.

Operator: And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star than one at this time. We'll pause for just a moment to assemble our roster.

Operator: And this concludes our question and answer session. I'd like to turn the conference back over to the company for the closing remarks. Thank you.

Kevin Roycraft: And thank you for your continued interest in atoms. We will be participating in the three part advisors idea conference in Chicago on August 28th. Qualified investors that would like to attend our schedule of meeting with Tracy and I should contact three part advisors.

Kevin Roycraft: We look forward to providing an update on our progress when we report our third quarter earnings in no member. Thank you for joining us. Thank you.

Operator: This concludes today's conference call. We thank you all for attending today's presentation.

Operator: You may now disconnect your lines and have a wonderful day.

Q2 2024 Adams Resources & Energy Inc Earnings Call

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