Maritrans Reports First Quarter Earnings and Declares Quarterly Dividend; Achieves Highest Quarterly Revenue in Maritrans History.TAMPA, Fla. -- Maritrans Inc. (NYSE NYSE See: New York Stock Exchange :TUG), a leading U.S. flag marine petroleum transport company, today announced its first quarter financial results and declared its quarterly dividend. Net income for the quarter ended March 31, 2005 was $3.7 million, or $0.43 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , on revenues of $43.5 million. This compares with net income of $1.8 million, or $0.21 diluted earnings per share, on revenues of $34.7 million for the quarter ended March 31, 2004. Results for the quarter ended March 31, 2005 included a $2.4 million charge related to the early retirement of the Company's former Executive Chairman of the Board, equivalent to approximately $0.18, net of tax, diluted earnings per share. Results for the quarter also included a $0.6 million gain, equivalent to $0.05, net of tax, diluted earnings per share, resulting from the sale of a vessel that was not part of the Company's 15 unit core fleet. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter ended March 31, 2005 was $6.3 million compared to $3.2 million for the quarter ended March 31, 2004. The increase in operating income for the quarter ended March 31, 2005 was due to strength in both of the Company's primary markets. High refinery utilization by the Company's Delaware River Delaware River River in Pennsylvania, Delaware, New Jersey, and New York, U.S. Formed by the junction of its eastern and western branches in southern New York, it flows about 405 mi (650 km) to empty into the Atlantic Ocean at Delaware Bay. Navigable to Trenton, N.J. refinery customers again resulted in strong demand for the Company's crude-oil lightering services. During the quarter, the Company once again lightered incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. barrels for a customer who previously used chartered tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. for their crude delivery requirements The stipulation that requires that an item of materiel must be delivered in the total quantity required by the date required. . Also, the Company continued to earn stronger average daily rates on vessels than it had in the clean product spot market, reflecting the Company's higher proportion of vessels traded in the spot market as compared to prior periods. On a Time Charter Equivalent ("TCE TCE trichloroethylene. TCE Environment A volatile chlorinated hydrocarbon that boils at 88ºC and is highly soluble–1000 ppm in water, with various industrial uses Toxicity Peripheral neuropathy, carcinogenic. ") basis, a commonly used industry measure where direct voyage VOYAGE, marine law. The passage of a ship upon the seas, from one port to another, or to several ports. 2. Every voyage must have a terminus a quo and a terminus ad quem. costs are deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from revenue, TCE revenue was $34.6 million for the quarter ended March 31, 2005 compared to $28.7 million for the quarter ended March 31, 2004. TCE revenue is a non-GAAP financial measure and a reconciliation of TCE revenue to revenue calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). is attached hereto here·to adv. To this document, matter, or proposition. hereto Adverb Formal or law to this place, matter, or document Adv. 1. . During the first quarter, the Company experienced higher overall utilization than in the first quarter of 2004. Utilization for the first quarter of 2005 was 81.8% compared to 80.0% in the first quarter of 2004. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased to $37.9 million in the quarter ended March 31, 2005 from $31.5 million in the quarter ended March 31, 2004, primarily because of increases in operations and general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . Operations costs increased due to significantly higher fuel costs compared to first quarter of 2004 and higher port charges incurred with more West Cost moves. Crew expenses, shoreside support expenses and the cost of insurance also increased operations costs. General and administrative costs increased as a result of expenses related to the retirement of the Company's former Executive Chairman of the Board, increased audit fees primarily related to additional services necessary to comply with Section 404 of the Sarbanes-Oxley Act See SOX. of 2002, additional litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. expenses and higher personnel related expenses. Jonathan Jonathan (jŏn`əthən) [short for Jehonathan, Heb.,=Yahweh has given]. 1 In the Bible, Saul's son and David's friend, both killed at the battle of Mt. Gilboa. David showed kindness to his son Mephibosheth. Whitworth Whit·worth , Kathrynne Ann Known as "Kathy." Born 1939. American golfer who had 88 career wins and was the Ladies Professional Golf Association Player of the Year seven times (1966-1969 and 1971-1973). , Chief Executive Officer of Maritrans, commented, "The first quarter was a significant one for the Company. We achieved the highest quarterly revenue in Maritrans' history, highlighting the strong demand for our vessels and the earnings power of our fleet. Our ability to post record results is directly related to the Company's on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" initiatives to optimize optimize - optimisation its fleet deployment strategy and build an OPA OPA: see Office of Price Administration. compliant fleet that meets stringent operational standards. We remain committed to focusing on these important areas while implementing our previously announced growth strategy for the benefit of our customers, stockholders and employees." FLEET AND MARKET REPORT Maritrans owns and operates a fleet of 15 units consisting of four oil tankers and 11 oceangoing o·cean·go·ing adj. Made or used for ocean voyages. Adj. 1. oceangoing - used on the high seas; "seafaring vessels" seafaring, seagoing marine - relating to or characteristic of or occurring on or in the sea married tug/barge units. While historically the Company has had a majority of its fleet deployed on contract business, in the second half of 2004 the Company made a decision to deploy more of its fleet in the spot market in an effort to take advantage of the higher spot rate environment. The Company intends to maintain a similar spot market exposure in the remainder of 2005 to that of the first quarter of 2005. The stronger spot market in the first quarter of 2005 was driven primarily by the combination of increased demand for the Company's transportation services and reduced supply of Jones Act vessels. During the first quarter, reduced imports, increased activity on the West Coast and growth in the economy all increased demand for the Company's services. In addition, two competitor Jones Act vessels in the 160,000 to 400,000 barrel size range either reached their OPA retirement dates or were scrapped in 2004, which resulted in a decrease in supply during the first quarter of 2005. Also during the first quarter of 2005, the Company sold a vessel, the Port Everglades Port Everglades, in Broward County, Florida, is one of the United States's top container ports with more than 5,400 ships at call in a year, a major petroleum storage and distribution hub, and a United States Navy liberty port. It is the deepest of all Florida ports. , that was no longer considered to be a part of the Company's core operations, which led to a gain of $0.6 million. The Port Everglades was a tugboat tugboat, small, strongly built vessel, used to guide large oceangoing ships into and out of port and to tow barges, dredging and salvage equipment, and disabled vessels. that had been idle and was not being utilized as part of the Company's petroleum transportation or lightering services and was not included in the Company's core fleet of 15 units that it owns and operates. Mr. Whitworth added, "Maritrans' focus on achieving an optimal balance between spot and contract coverage continued to serve the Company well during the first quarter. By maintaining our spot exposure at approximately 35 percent, the Company remained the largest spot owner in the Jones Act trade in its vessel size range, enabling the Company to earn significantly higher day rates for the quarter. We believe our strong position in the U.S. spot market bodes well for the Company to further take advantage of a rate environment that remains robust. As we did with the recently signed Sunoco contract, the Company will seek to complement its spot market leadership and look for opportunities to renew contracts at higher rates. The Company's deployment decisions will continue to be driven by the goal of realizing the full earnings potential of our fleet and meeting our customers' needs." DOUBLE-HULL REBUILDING PROGRAM Since 1998, Maritrans has been actively engaged in a double-hull rebuilding program aimed at ensuring that the Company's Jones Act fleet is compliant with the U.S. Oil Pollution Act of 1990 ("OPA"). The Company's patented process enables the Company to convert its vessels for significantly less cost than building new vessels. To date, the Company has successfully rebuilt five of its original nine single-hull barges to double-hull structures. At the end of 2004, approximately 64% of the Company's fleet capacity was double-hulled, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the Jones Act fleet average of 45%. During the first quarter of 2005, the Company made further progress on its rebuilding program. The Company continued the rebuilding of the M209 (formerly the OCEAN 193), which is expected to cost approximately $27 million, of which $21.1 million had been paid to the shipyard contractor for the project through the first quarter of 2005. The rebuild will include the insertion insertion n. the addition of language at a place within an existing typed or written document, which is always suspect unless initialled by all parties. of a midbody mid·bod·y n. 1. The anatomical middle region of the trunk of the body. 2. One of several granules composed of microtubules that forms between daughter cells during the telophase of mitosis. , which will increase its cargo-carrying capacity by approximately 30,000 barrels. The barge barge, large boat, generally flat-bottomed, used for transporting goods. Most barges on inland waterways are towed, but some river barges are self-propelled. There are also sailing barges. is expected to re-enter re·en·ter also re-en·ter v. re·en·tered, re·en·ter·ing, re·en·ters v.tr. 1. To enter or come in to again. 2. To record again on a list or ledger. v.intr. the fleet in the second quarter of 2005. At that time the Company will have approximately 70% of its fleet's capacity double-hulled. Simultaneously, the Company continued to make progress refurbishing the tugboat ENTERPRISE which currently works with the M209. The refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur is also expected to be completed in the second quarter of 2005, at a cost of approximately $4.5 million, of which $3.0 million was incurred through the first quarter. The Company intends to convert its remaining single-hull barges and continues to evaluate converting its two single-hull tank ships into double-hull vessels. The Company estimates that the total cost of its barge rebuilding program will exceed $200 million, of which $112 million had been spent through March 31, 2005. Mr. Whitworth concluded, "We look forward to the redelivery Re`de`liv´er`y n. 1. Act of delivering back. 2. A second or new delivery or liberation. of our sixth double-hull vessel in the second quarter, which will further increase our double-hull leadership and strengthen our position for taking advantage of strong industry fundamentals. Building on the recent success we have had increasing our spot coverage and re-entering an important geographic market, we will continue to look for opportunities to accelerate our earnings growth in both the near-term near-term adj. Of, for, or involving a short period of time in the near future. and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. . In pursuing this crucial objective, we will maintain focused on seeking profitable opportunities that meet our strict requirements and positions the company to further solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. its leadership in the Jones Act industry." DIVIDEND Maritrans' Board of Directors declared a quarterly dividend of $0.11 per share, payable on June 1, 2005, to shareholders of record on May 18, 2005. The ex-dividend date Ex-dividend date The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment ( i.e. the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend. will be May 16, 2005. CONFERENCE CALL INFORMATION Maritrans' management will host a conference call on April 29, 2005, at 9:00 a.m. eastern time to discuss the Company's first quarter results. To access this call, please dial (800) 776-0816. A replay of the call may be accessed by dialing (888) 203-1112 and providing the reservation number 9404252. The replay will be available from 12:00 p.m. eastern time on April 29, 2005, to 11:59 p.m. eastern time on May 6, 2005. The conference call will also be webcast live on the Company's website, www.maritrans.com and will be available on the website through May 6, 2005. ABOUT MARITRANS Maritrans Inc. is a U.S. based company with a 77-year commitment to building and operating petroleum transport vessels for the U.S. domestic trade. Maritrans owns and operates one of the largest fleets serving the U.S. coastwise coast·wise adv. & adj. Along, by way of, or following a coast: The winds blew coastwise. Coastwise winds contributed to the storm. Adj. 1. trade. The fleet consists of four oil tankers and 11 oceangoing married tug/barge units with an aggregate fleet capacity of approximately 3.6 million barrels, of which 64 percent of the total capacity is double-hulled. The Company is headquartered in Tampa, Florida “Tampa” redirects here. For other uses, see Tampa (disambiguation). Tampa is a United States city in Hillsborough County, on the west coast of Florida. It serves as the county seat for Hillsborough County.GR6. , and maintains an office in the Philadelphia area. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT The information in this news release includes certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, growth, performance, earnings per share or achievements to be materially different from those expressed in or implied by such forward-looking statements. These statements are based on assumptions the Company believes are reasonable, but a variety of factors could cause the Company's actual results, goals, targets or objectives to differ materially from those contemplated, projected, forecast, estimated, anticipated, planned or budgeted. Such factors include, among others, changes in oil companies' decisions as to the type and origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real point of the crude that it processes, changes in the amount of imported petroleum products, competition for marine transportation, domestic oil consumption, the continuation of federal law restricting United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. point-to-point maritime shipping to U.S. vessels (the Jones Act), the timing and success of our double-hull rebuilding program, demand for petroleum products, future spot market rates, demand for our services, levels of foreign imports, changes in interest rates, the effect of war or terrorist activities and the general financial, economic, environmental and regulatory conditions affecting the oil and marine transportation industry in general. The Company is under no duty to update any of these forward-looking statements after the date of this release to conform such statements to actual results.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
($ Thousands)
Three Months Ended
March 31,
2005 2004
---------- ----------
Voyage Revenue $ 43,540 $ 34,661
Voyage Costs 8,929 6,008
---------- ----------
Time Charter Equivalent $ 34,611 $ 28,653
========== ==========
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
($ Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
2005 2004
---------- ----------
Revenue $ 43,540 $ 34,661
Operations expense
Operations 13,114 12,579
Voyage costs 8,929 6,008
Maintenance expense 4,925 5,299
General and administrative expense 5,386 2,417
Depreciation expense 5,496 5,192
Gain on sale of assets 647 --
---------- ----------
Operating Income 6,337 3,166
Other Income 107 98
Interest Expense (688) (405)
---------- ----------
Pre-tax income 5,756 2,859
Income Tax Provision 2,101 1,072
---------- ----------
Net Income $ 3,655 $ 1,787
========== ==========
Diluted Earnings Per Share $ 0.43 $ 0.21
Diluted Shares Outstanding 8,510 8,423
Capital Expenditures $ 7,974 $ 12,641
Utilization of Calendar days 81.8% 80.0%
Barrels carried (in millions) 45.2 42.9
Available days 1,189 1,186
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
($ Thousands)
-----------
March 31, 2005 December 31, 2004
-------------- -----------------
Cash and cash equivalents $ 11,623 $ 6,347
Other current assets 31,813 30,207
Net vessels and equipment 194,401 191,924
Other assets 3,308 3,305
-------------- -----------------
Total assets $ 241,145 $ 231,783
============== =================
Current portion of debt $ 3,809 $ 3,756
Total other current liabilities 22,890 19,002
Long-term debt 58,400 59,373
Deferred shipyard costs and other 24,311 21,244
Deferred income taxes 36,511 36,004
Stockholders' equity 95,224 92,404
-------------- -----------------
Total liabilities and stockholders'
equity $ 241,145 $ 231,783
============== =================
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION
($ Thousands)
-----------
Three Months Ended
March 31,
2005 2004
-------- --------
Cash flows from operating activities:
Net income $ 3,655 $ 1,787
Depreciation and amortization 5,496 5,192
Other 5,308 1,414
-------- --------
Total adjustments to net income 10,804 6,606
-------- --------
Net cash provided by operating activities 14,459 8,393
Net cash used in investing activities (7,327) (8,037)
-------- --------
Net cash (used in) provided by financing activities (1,856) 481
-------- --------
Net increase in cash and cash equivalents 5,276 837
Cash and cash equivalents at beginning of period 6,347 3,614
-------- --------
Cash and cash equivalents at end of period $11,623 $ 4,451
==================
REBUILDING SCHEDULE
Capacity Double-Hull
in Double- Redelivery Married
Barges Barrels Hull Date Tugboat Horsepower
----------------- -------- ------- ----------- ------------ ----------
MARITRANS 400 380,000 YES # CONSTITUTION 11,000
MARITRANS 300 265,000 YES # LIBERTY 7,000
M 254 250,000 YES 2002 INTREPID 6,000
M 252 250,000 YES 2002 NAVIGATOR 6,000
M 244 245,000 YES 2000 SEAFARER 6,000
OCEAN 215 210,000 NO + FREEDOM 6,000
OCEAN 211 207,000 NO + INDEPENDENCE 6,000
OCEAN 210 207,000 NO + COLUMBIA 6,000
M 214@ 214,000 YES 2004 HONOUR 6,000
OCEAN 193@ 178,000 NO 2Q05 ENTERPRISE 6,000
M 192 175,000 YES 1998 VALOUR 6,000
Capacity
in Double-
Oil Tankers Barrels Hull
----------------- -------- -------
ALLEGIANCE 252,000 NO +
PERSEVERANCE 252,000 NO +
INTEGRITY 265,000 YES #
DILIGENCE 265,000 YES #
# These vessels were originally built with double-hulls.
@ Completion of the double-hull rebuild includes a 30,000 barrel
mid-body insertion.
+ A decision to rebuild has not yet been made.
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