Maritrans Reports Second Quarter 2006 Earnings and Declares Quarterly Dividend.TAMPA, Fla. -- Maritrans Inc. (NYSE NYSE See: New York Stock Exchange :TUG), a leading U.S. flag marine petroleum transport company, today announced its second quarter financial results and declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. its quarterly dividend. Net income for the quarter ended June June: see month. 30, 2006 was $3.6 million, or $0.30 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 $43.9 million. This compares with net income of $7.2 million, or $0.84 diluted earnings per share, on revenues of $46.3 million for the quarter ended June 30, 2005, which included $4.0 million received in connection with the settlement of the Company's lawsuit lawsuit: see procedure; tort. with Penn Maritime INTEREST, MARITIME. By maritime interest is understood the profit of money lent on bottomry or respondentia, which is allowed to be greater than simple interest because the capital of the lender is put in jeopardy. , which was equivalent to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.30 diluted earnings per share, net of tax. Diluted earnings per share for the quarter ended June 30, 2006 includes a $0.01 increase as a result of the Company's decision in the second quarter to account for major maintenance through the deferral deferral - Waiting for quiet on the Ethernet. method instead of the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. method which the Company previously used. As of April 1, 2006, the Company changed its method of accounting for planned major maintenance activities from the accrual method to the deferral method. Previously, the Company made provisions for the cost of upcoming major periodic overhauls of vessels Vessels are a post-rock band from Leeds, UK. Vessels were born from the ashes of A Day Left in September 2005. In 2006 they self-released a 5 track eponymous ep, and played many gigs including the unsigned stage at Leeds Festival. and equipment in advance of performing the related maintenance and repairs. The costs expected to be paid in the upcoming year were included in accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. shipyard costs as a current liability with the remainder classified as a 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. liability. Under the deferral method, costs actually incurred are amortized on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis over the period beginning at the completion of the maintenance event and ending at the commencement of the next scheduled regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. drydocking. Management believes the deferral method is a preferable method for accounting for planned major maintenance activities because (i) it better matches the expenses incurred with the revenues generated, (ii) the deferral method improves comparability with the Company's industry since the majority of the Company's competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. use this method and (iii) the deferral method best fits the Company's business circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or because the expenditures for planned major maintenance activities for the Company's vessels are not continuous and the expenditures are not consistent across periods due to the timing of regulatory drydockings. An appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. is included at the end of this release that details the effect of the accounting change on Maritrans' results from January January: see month. 1, 2004 and each period thereafter. Walter Wal·ter , Bruno 1876-1962. German conductor noted for his interpretations of Mozart and Mahler. Noun 1. Walter - German conductor (1876-1962) Bruno Walter Bromfield Bromfield could be
The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. by $18.9 million and increased our assets by $10.6 million. Additionally, for each period that we are reporting we have decreased our maintenance expense and increased our depreciation and amortization, which in turn will increase EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , to reflect the effect of the change in accounting principle. This change flows through to other measures of results of the Company, including 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. , net income and diluted earnings per share, all of which we further detail in the appendix to this release." Operating income for the quarter ended June 30, 2006 was $4.8 million compared to $8.0 million for the quarter ended June 30, 2005. Operating income for both periods include the accounting change mentioned above. During the second quarter, rates in the U.S. Jones Act spot market remained stable compared to the first quarter of 2006, although higher fuel costs reduced the net margins in that trade. The Company's idle time The duration of time a device is in an idle state, which means that it is operational, but not being used. in the spot clean fleet was higher than the comparable 2005 quarter but declined from the first quarter of 2006. This idle time tracked with refinery output available to move, which was lower than the comparable quarter in 2005, but higher than the first quarter of 2006. During the second quarter of 2006, the Company delivered 21 million barrels of crude oil to lightering Lightering is the process of transferring oil cargo between vessels of largely different sizes and is undertaken as many port facilities cannot accept ocean-faring tankers of the size of oil transports. customers compared to 23.9 million barrels delivered during the first quarter of 2006, which was primarily a result of ongoing refinery maintenance at one 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 and changes in the crude oil sourcing patterns of two lightering customers. 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 voyage revenue, TCE revenue was $33.6 million for the quarter ended June 30, 2006 compared to $34.7 million for the quarter ended June 30, 2005, a decrease of $1.1 million, or 3.2%. 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 second quarter of 2006, the Company experienced lower overall utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be than in the second quarter of 2005. Utilization for the second quarter of 2006 was 77.5% compared to 81.8% in the second quarter of 2005. In the quarter ended June 30, 2006, the Company experienced 140 days of out of service time for capital projects, including 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. rebuilding, and vessel VESSEL, mar. law. A ship, brig, sloop or other craft used in navigation. 1 Boul. Paty, tit. 1, p. 100. See sup. 2. By an act of congress, approved July 29, 1850, it is provided that any person, not being an owner, who shall on the high seas, willfully, with. maintenance. This compares to out of service time for maintenance and capital projects, including barge rebuilding, of 154 days in the second quarter of 2005. In the quarter ended June 30, 2006, the Company also experienced 52 days of out of service for idle time in its spot clean product fleet due to refinery outages and refinery maintenance taking place in the quarter. This compares to out of service for idle time in the Company's spot clean product fleet of 7 days in the second quarter of 2005. In addition, the Company experienced 49 days of out of service for the ALLEGIANCE allegiance, in political terms, the tie that binds an individual to another individual or institution. The term usually refers to a person's legal obligation of obedience to a government in return for the protection of that government, although it may have reference while awaiting orders for a grain voyage. The Company had no vessels in grain service in the comparable period in 2005. 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 $39.1 million in the second quarter of 2006 from $38.4 million for the second quarter of 2005 primarily due to charter hire costs related to the charters of the vessels SEABROOK Seabrook may refer to: Australian locations
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, "While we believe that refinery maintenance will decrease in the third quarter and spot rates will remain strong, we expect certain factors to impact our results over the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. . These factors are expected to produce lower earnings for the third quarter compared to the second quarter of 2006, but we currently anticipate that fourth quarter earnings will be higher than those achieved in the second quarter of 2006. Longer-term, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op in Maritrans' prospects for taking advantage of the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. demand and supply fundamentals in the Jones Act industry as result of our leading market share in our two core businesses, significant progress building an OPA OPA: see Office of Price Administration. compliant
Commenting on factors expected to impact results in the short-term, Mr. Whitworth stated, "In terms of vessel days out of service for maintenance and barge rebuilding, the third quarter is expected to be the highest quarter for planned vessel shipyarding in 2006 with at least 184 days expected as we continue the double-hulling and lengthening lengthening (lengkˑ·the·ning), n the use of various massage or muscle energy techniques to relax and stretch muscle and connective tissue. of our barge M 210 and transforming her into the M 242. When the M 242 rejoins our fleet in the fall we will immediately commence the double-hulling and lengthening of our OCEAN 211 and transforming her into the M 243. We expect the number of vessel days out of service days for maintenance and barge rebuilding to be at least 92 days for the fourth quarter. In total, we expect to invest approximately 340 days into these two rebuild projects in 2006. For 2007, as we reach the completion of the double-hulling of the M 243, we expect to invest approximately 180 days in rebuilding. Therefore, looking ahead to 2007, we will have less vessel time out of service for maintenance and rebuilding than we have experienced in 2006. We currently do not expect the M 215, our last single-hulled barge, to be converted to a double-hull until 2008, although we may sign a contract and begin pre-fabrication before that time. "Our second single-hulled tanker, the PERSEVERANCE Perseverance See also Determination. Ainsworth redid dictionary manuscript burnt in fire. [Br. Hist.: Brewer Handbook, 752] Call of the Wild, The dogs trail steadfastly through Alaska’s tundra. [Am. Lit. , is set to enter the grain trade, although she is likely going to be idle for 30 to 45 days while we bid on upcoming grain cargoes. The rates that we expect this vessel will achieve, as well as her sister vessel, the ALLEGIANCE, are significantly lower than the rates they were previously achieving in oil transportation and are currently lower than our expectation when we decided to enter this trade. As a result of rates currently being very close to their cash breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations levels, we continue to evaluate these vessels' viability in our service going forward. "In our lightering fleet, two of our customers have lowered their lightering needs as a result of the smaller size of the vessels that they are bringing to their refineries and the less lightering required to reach the final destination. One of these customers has informed us that they will revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. back to larger vessels by the end of the third quarter. We are working with the second customer to demonstrate the economies of scale that accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. to them by using larger vessels to deliver their crude oil to their refineries. We expect lightering volumes to increase by the fourth quarter of 2006. "For the remainder of 2006, we expect to continue to maintain approximately 35% of our fleet in spot and 65% in contract. Recently renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. contracts will generate higher daily rates on four of our term contracts in the second half of the year, with the biggest impact being recognized beginning in December December: see month. 2006 and continuing into 2007. "In terms of operating expenses, we have begun recruiting mariners, and utilizing them in training positions, so that we will be well positioned to man our three new articulated ar·tic·u·la·ted adj. Characterized by or having articulations; jointed. tug/barge units when we begin taking delivery in 2007. Those new mariners are expected to add to our operating expenses going forward." FLEET AND MARKET REPORT Maritrans operates a fleet of oil tankers and 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. In the second quarter of 2006, the Company operated its fleet at approximately 35% spot and 65% contract and intends to maintain similar spot market exposure in the third quarter of 2006. The overall spot market rates for the second quarter of 2006 increased approximately 6.4% compared to the second quarter of 2005, yet, due to the increase in fuel cost, the average spot TCE rate increased approximately 1%-2%. In June, the ALLEGIANCE entered into a charter to transport grain from Corpus Christi Corpus Christi, in Christianity Corpus Christi [Lat.,=body of Christ], feast of the Western Church, observed on the Thursday after Trinity Sunday (or on the following Sunday). to Port Sudan Port Sudan (s  dăn`), city (1993 pop. 308,195), NE Sudan, on the Red Sea. The country's major seaport, it handles the bulk of Sudan's foreign trade. . The vessel is scheduled to complete
discharging in August and return to the US west coast by early
September September: see month. . The current grain cargo is the vessel's third charter
since being removed from petroleum transportation service in December
2005 in accordance with the Oil Pollution Act of 1990. In July July: see month. 2006, the
Company's tanker PERSEVERANCE reached its mandatory Peremptory; obligatory; required; that which must be subscribed to or obeyed.Mandatory statutes are those that require, as opposed to permit, a particular course of action. oil retirement date and will now also bid for grain cargoes. The Company believes that the vessel will be idle for the next 30 to 45 days while awaiting orders for her initial grain voyage. FLEET CONSTRUCTION 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"). Maritrans' patented barge rebuilding process enables the Company to convert its vessels for significantly less cost than building new vessels. During 2006, the Company has continued to successfully implement its rebuilding program. The rebuild of the Company's seventh barge, the M 210, commenced on January 26, 2006. The vessel's rebuild is expected to have a total cost of approximately $30 million. The rebuild of the Company's eighth barge, the OCEAN 211, is expected to commence following the return to service of the M 210. The OCEAN 211's rebuild is also expected to have a total cost of approximately $30 million. The rebuilds of the M 210 and OCEAN 211 will also include the insertions of mid-bodies that will increase each of their respective capacities by approximately 38,000 barrels, or 17%. The rebuilds of the M 210 and the OCEAN 211 are expected to be completed in the fourth quarter of 2006 and the second quarter of 2007, respectively. Upon completion of their double-hulling, and reflecting their larger carrying capacities carrying capacity the number of animal units that a farm or area will carry on a year round basis, including that needed for conservation of winter feed. Usually stated as dry cows or dry sheep equivalents per hectare. , the M 210 and OCEAN 211 will be renamed the M 242 and M 243, respectively. Following the execution of a letter of intent in April 2006, Maritrans signed a definitive agreement in May 2006 with Bender Shipbuilding & Repair Co., Inc. to build two new 8,000-horsepower tugboats. One 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. is expected to be delivered in the fourth quarter of 2008 with the second delivered in the first quarter of 2009. The cost of each tugboat is expected to be $16 million, for a total cost of $32 million. Once delivered, one of the tugboats will replace the tugboat VALOUR. The Company has entered into a charter to lease a substitute tugboat until the new tugboat is delivered. The Company plans to pair the second newbuild tugboat with the M 215, the final single-hulled barge slated for rebuilding and lengthening. Mr. Whitworth concluded, "Achieving fleet growth remains a core objective for Maritrans and complements our successful barge rebuilding program. We continue to believe that large articulated tug barges will become the replacement vessel of choice. We remain committed to providing the market with the next generation of ATB's, enabling the Company to satisfy customers' domestic petroleum transportation needs at a lower cost than competitors without sacrificing speed, cargo capacity or safety. Consistent with the three ATB's that the Company is currently building, we will continue to seek opportunities that expand our industry leadership in a financially responsible manner in both core and related businesses." DIVIDEND Maritrans' Board of Directors declared a quarterly dividend of $0.11 per share, payable on August 30, 2006 to stockholders of record on August 16, 2006. CONFERENCE CALL INFORMATION Maritrans' management will host a conference call on Wednesday Wednesday: see week. , August 2, 2006, at 9:00 a.m. eastern time to discuss the Company's second quarter results. To access this call, please dial 800-732-8451. A replay of the call may be accessed by dialing 800-633-8284 and providing the reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 21299278. The replay will be available from 11:00 a.m. eastern time on Wednesday, August 2, 2006, to 11:00 a.m. eastern time on Wednesday, August 16, 2006. The conference call will also be webcast live on Maritrans' website, www.maritrans.com and will be available on the website through Wednesday, August 16, 2006. ABOUT MARITRANS Maritrans Inc. is a U.S.-based company with a 78-year commitment to building and operating petroleum transport vessels for the U.S. domestic trade. Maritrans employs a fleet of 11 tug/barge units and 5 tankers. Two of these tankers were redeployed to the transportation of non-petroleum cargo. Approximately 75 percent of our oil carrying fleet capacity is double-hulled. Our current oil carrying fleet capacity aggregates approximately 3.4 million barrels, 79 percent of which is barge capacity. Maritrans 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 Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. 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 Certain statements in this news release are 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. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and Section 21E of the Securities Exchange Act of 1934, as amended, including statements made with respect to present or anticipated utilization, future revenues and customer relationships, capital expenditures, future financings, and other statements regarding matters that are not historical facts, and involve predictions. 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 any future results, levels of activity, growth, performance, earnings per share or achievements expressed in or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. In some cases you can identify forward-looking statements by terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "may," "seem," "should," "believe," "future," "potential," "estimate," "offer," "opportunity," "quality," "growth," "expect," "intend," "plan," "focus," "through," "strategy," "provide," "meet," "allow," "represent," "commitment," "create," "implement," "result," "seek," "increase," "establish," "work," "perform," "make," "continue," "can," "will," "include," or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments that are believed to be reasonable as of the date of this prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. supplement. The forward-looking statements are subject to a number of risks and uncertainties and include the following: demand for, or level of consumption of, oil and petroleum products; future spot market charter rates; ability to attract and retain experienced, qualified and skilled crewmembers; competition that could affect our market share and revenues; risks inherent in marine transportation; the cost and availability of insurance coverage; delays or cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor in the building of new vessels, the double-hulling of our remaining single hulled Hull 1. A city of southwest Quebec, Canada, opposite Ottawa, Ontario. It has a hydroelectric station and pulp, paper, and lumber mills. Population: 66,246. 2. vessels and scheduled shipyard maintenance; decrease in demand for lightering services; environmental and regulatory conditions; reliance on a limited number of customers for revenue; the continuation continuation - continuation passing style of federal law restricting re·strict tr.v. re·strict·ed, re·strict·ing, re·stricts To keep or confine within limits. See Synonyms at limit. [Latin restringere, restrict- : re-, 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 Refers to a communications line that provides a path from one location to another (point A to point B). Contrast with multipoint. maritime shipping to US vessels (the Jones Act); asbestos-related lawsuits; fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. fuel prices; high fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). ; capital expenditures required to operate and maintain a vessel may increase due to government regulations; reliance on unionized labor; federal laws covering our employees that may subject us to job-related claims; and significant fluctuations of our stock price. Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this news release completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements represent our estimates and assumptions only as of the date of this news release. Except for our ongoing obligations to disclose material information under the federal securities laws, we are not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
($ Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue $43,903 $46,330 $91,287 $89,870
Voyage Costs 10,344 11,667 22,008 20,596
--------- --------- --------- ---------
Time Charter Equivalent $33,559 $34,663 $69,279 $69,274
========= ========= ========= =========
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue $43,903 $46,330 $91,287 $89,870
Operations expense
Operations expense 13,880 13,575 28,525 26,689
Charter hire 2,870 -- 5,537 --
Voyage costs 10,344 11,667 22,008 20,596
Maintenance expense 1,649 1,426 3,823 2,819
General and administrative
expense 2,287 2,423 4,592 7,809
Depreciation and amortization
expense 8,056 9,271 17,059 18,216
Gain on sale of assets -- -- (2,868) (647)
--------- --------- --------- ---------
Operating Income 4,817 7,968 12,611 14,388
Other Income 824 4,152 1,578 4,259
Interest Expense (108) (733) (381) (1,421)
--------- --------- --------- ---------
Pre-tax income 5,533 11,387 13,808 17,226
Income Tax Provision 1,928 4,156 4,849 6,287
--------- --------- --------- ---------
Net Income $3,605 $7,231 $8,959 $10,939
========= ========= ========= =========
NOTE: All periods presented are conformed to the new major maintenance
accounting treatment. See also Appendix I.
Diluted Earnings Per Share $0.30 $0.84 $0.74 $1.28
Diluted Shares Outstanding 12,042 8,571 12,039 8,545
Capital Expenditures $15,495 $6,030 $26,564 $14,004
Utilization of Calendar days 77.5% 81.8% 78.5% 81.8%
Barrels carried (in millions) 40.7 44.4 84.3 89.6
Available days 1,308 1,203 2,615 2,392
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
($ Thousands)
-------------
June 30, December
2006 31, 2005
Cash and cash equivalents $58,875 $58,794
Other current assets 27,371 29,522
Net vessels and equipment 248,872 233,641
Other assets 18,458 24,479
--------- ---------
Total assets $353,576 $346,436
========= =========
Current portion of debt $4,086 $3,973
Total other current liabilities 25,060 21,311
Long-term debt 53,329 55,400
Deferred other liabilities 9,930 9,435
Deferred income taxes 41,253 42,321
Stockholders' equity 219,918 213,996
--------- ---------
Total liabilities and stockholders' equity $353,576 $346,436
========= =========
NOTE: All periods presented are conformed to the new major maintenance
accounting treatment. See also Appendix I
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION
($ Thousands)
Six Months Ended June 30,
2006 2005
-------- --------
Cash flows from operating activities:
Net income $8,959 $10,939
Depreciation and amortization 17,059 18,216
Other 1,026 (356)
-------- --------
Total adjustments to net income 18,085 17,860
-------- --------
Net cash provided by operating activities 27,044 28,799
Net cash used in investing activities (22,564) (13,357)
-------- --------
Net cash used in financing activities (4,399) (2,958)
-------- --------
Net increase in cash and cash equivalents 81 12,484
Cash and cash equivalents at beginning of
period 58,794 6,347
-------- --------
Cash and cash equivalents at end of period $58,875 $18,831
======== ========
NOTE: All periods presented are conformed to the new major maintenance
accounting treatment. See also Appendix I.
Barge or
Tanker
Initial
Capacity in Double- Construction/
Barges/Tugs Barrels(1) Hull Rebuild Date
----------------------------------------------------------------------
M 400/Constitution 410,000 Yes 1981 Originally built with
double-hull
M 300/Liberty 263,000 Yes 1979 Originally built with
double-hull
M 254/Intrepid 250,000 Yes 2002 Double-hull rebuild
M 252/Navigator 250,000 Yes 2002 Double-hull rebuild
M 244/Seafarer 240,000 Yes 2000 Double-hull rebuild
M 215/Sea Swift(5) 214,000 No 1975 Decision to rebuild
has not yet been
made(2)
Ocean 211/Freedom 212,000 No 2007 Scheduled double-hull
delivery(3)
M 210/Columbia 213,000 No 2006 Scheduled double-hull
delivery(3)
M 214/Honour 208,000 Yes 2004 Double-hull
rebuild(4)
M 209/Enterprise 206,000 Yes 2005 Double-hull
rebuild(4)
M 192/Independence 172,000 Yes 1998 Double-hull rebuild
-----------
Total oil
carrying
capacity 2,638,000
-----------
Oil Tankers
----------------------------------------------------------------------
Integrity 270,000 Yes 1975 Originally built with
double-hull
Diligence 270,000 Yes 1977 Originally built with
double-hull
Seabrook(6) 224,000 No 1983
-----------
Total oil
carrying
capacity 764,000
-----------
Other
----------------------------------------------------------------------
Allegiance 251,000 No 1980 Redeployed in
transport of grain
Perseverance 251,000 No 1981 Prepared to transport
grain
-----------
502,000
-----------
===========
Total capacity 3,904,000
===========
(1) Represents 98% capacity, which is the effective carrying capacity
of a tank vessel.
(2) If rebuilt, we anticipate that a 30,000 barrel mid-body would be
inserted.
(3) Vessels are being rebuilt with 38,000 barrel mid-body insertions.
(4) Completion of the double-hull rebuild included a 30,000 barrel
mid-body insertion.
(5) Sea Swift chartered in from Crowley Maritime Corporation.
(6) Chartered in from Seabrook Carriers Inc.
APPENDIX I
ACCOUNTING CHANGE FOR PLANNED MAJOR MAINTENANCE ACTIVITIES
As of April 1, 2006, the Company changed its method of accounting for
planned major maintenance activities from the accrual method to the
deferral method. Previously the Company made provisions for the cost
of upcoming major periodic overhauls of vessels and equipment in
advance of performing the related maintenance and repairs. The costs
expected to be paid in the upcoming year were included in accrued
shipyard costs as a current liability with the remainder classified as
a long-term liability. Under the deferral method, costs actually
incurred are amortized on a straight-line basis over the period
beginning at the completion of the maintenance event and ending at the
commencement of the next scheduled regulatory drydocking. Management
believes the deferral method is a preferable method for accounting for
planned major maintenance activities because (i) it better matches the
expenses incurred with the revenues generated, (ii) the deferral
method improves comparability with the Company's industry since the
majority of the Company's competitors use this method and (iii) the
deferral method best fits the Company's business circumstances because
the expenditures for planned major maintenance activities for the
Company's vessels are not continuous and the expenditures are not
consistent across periods due to the timing of regulatory drydockings.
The Company recorded this change in accounting principle in accordance
with SFAS No. 154, Accounting Changes and Error Corrections, which
provides guidance on the accounting for and the reporting of
accounting changes, including changes in accounting principles. SFAS
154 is effective for accounting changes made in fiscal years beginning
after December 15, 2005. This statement requires retrospective
application of accounting changes which is defined as the application
of a different accounting principle to prior accounting periods as if
that principle had always been used.
Pursuant to SFAS No. 154, the Company is required to apply the new
accounting principle to all prior periods that the Company will report
upon in the Annual Report on Form 10-K for the year ended December 31,
2006. Therefore, this accounting principle was retrospectively applied
to the period of January 1, 2004 and to each period thereafter. The
cumulative effect of the retrospective change to this accounting
principle as of January 1, 2004 was a $17.5 million increase in total
assets, a $3.1 million decrease in total liabilities and a $20.6
million increase in retained earnings.
Before the Impact of the Change in Accounting Principle ($000, except
per share amounts)
2Q06 2Q05 YTD 6/06 YTD 6/05 2005 2004
------- ------- -------- -------- -------- --------
Maintenance
Expense $4,931 $5,166 $10,208 $10,091 $20,320 $20,761
Depreciation and
Amortization 4,958 5,719 10,202 11,215 23,201 22,193
Operating Income 4,633 7,780 13,083 14,117 26,638 14,538
Net Income 3,487 7,111 9,261 10,766 19,879 9,832
Diluted Earnings
per Share $0.29 $0.83 $0.77 $1.26 $2.28 $1.16
After the Impact of the Change in Accounting Principle ($000, except
per share amounts)
2Q06 2Q05 YTD 6/06 YTD 6/05 2005 2004
------- ------- -------- -------- -------- --------
Maintenance
Expense $1,649 $1,426 $3,823 $2,819 $6,245 $7,688
Depreciation and
Amortization 8,056 9,271 17,059 18,216 35,912 37,775
Operating Income 4,817 7,968 12,611 14,388 28,002 12,029
Net Income 3,605 7,231 8,959 10,939 20,752 8,226
Diluted Earnings
per Share $0.30 $0.84 $0.74 $1.28 $2.38 $0.97
The following presents the effect of the retrospective application of
this change in accounting principle on the Company's income statement
and balance sheet as of and for the respective periods.
Three Months Effect of Three Months
Ended June Change in Ended June
30, 2006 Accounting 30, 2006
Pre Adoption Principle as Reported
------------ ----------- ------------
Revenues $43,903 $43,903
Costs and expenses:
Operation expense 27,094 27,094
Maintenance expense 4,931 (3,282) 1,649
General and administrative 2,287 2,287
Depreciation and
amortization 4,958 3,098 8,056
------------ ----------- ------------
Total operating expenses 39,270 (184) 39,086
Operating income 4,633 184 4,817
Interest expense (108) (108)
Interest income 761 761
Other income, net 63 63
------------ ----------- ------------
Income before income taxes 5,349 184 5,533
Income tax provision 1,862 66 1,928
------------ ----------- ------------
Net income $3,487 $118 $3,605
============ =========== ============
Basic earnings per share $0.29 $0.01 $0.30
Diluted earnings per share $0.29 $0.01 $0.30
Three Months Effect of Three Months
Ended March Change in Ended March
31, 2006 Accounting 31, 2006
as Reported Principle as Adjusted
------------ ----------- ------------
Revenues $47,384 $47,384
Costs and expenses:
Operation expense 28,976 28,976
Maintenance expense 5,277 (3,103) 2,174
General and administrative 2,305 2,305
Depreciation and
amortization 5,244 3,759 9,003
Gain on involuntary
conversion of assets (2,868) (2,868)
------------ ----------- ------------
Total operating expenses 38,934 656 39,590
Operating income 8,450 (656) 7,794
Interest expense (273) (273)
Interest income 678 678
Other income, net 76 76
------------ ----------- ------------
Income before income taxes 8,931 (656) 8,275
Income tax provision 3,157 (236) 2,921
------------ ----------- ------------
Net income $5,774 $(420) $5,354
============ =========== ============
Basic earnings per share $0.49 $(0.04) $0.45
Diluted earnings per share $0.48 $(0.03) $0.45
Three Months Effect of Three Months
Ended June Change in Ended June
30, 2005 Accounting 30, 2005
as Reported Principle as Adjusted
------------ ----------- ------------
Revenues $46,330 $46,330
Costs and expenses:
Operation expense 25,242 25,242
Maintenance expense 5,166 (3,740) 1,426
General and administrative 2,423 2,423
Depreciation and
amortization 5,719 3,552 9,271
------------ ----------- ------------
Total operating expenses 38,550 (188) 38,362
Operating income 7,780 188 7,968
Interest expense (733) (733)
Interest income 115 115
Other income, net 4,037 4,037
------------ ----------- ------------
Income before income taxes 11,199 188 11,387
Income tax provision 4,088 68 4,156
------------ ----------- ------------
Net income $7,111 $120 $7,231
============ =========== ============
Basic earnings per share $0.85 $0.01 $0.86
Diluted earnings per share $0.83 $0.01 $0.84
Six Months Effect of Six Months
Ended June Change in Ended June
30, 2006 Accounting 30, 2006
Pre Adoption Principle as Reported
------------ ----------- ------------
Revenues $91,287 $91,287
Costs and expenses:
Operation expense 56,070 56,070
Maintenance expense 10,208 (6,385) 3,823
General and administrative 4,592 4,592
Depreciation and
amortization 10,202 6,857 17,059
Gain on involuntary
conversion of assets (2,868) (2,868)
------------ ----------- ------------
Total operating expenses 78,204 472 78,676
Operating income 13,083 (472) 12,611
Interest expense (381) (381)
Interest income 1,439 1,439
Other income, net 139 139
------------ ----------- ------------
Income before income taxes 14,280 (472) 13,808
Income tax provision 5,019 (170) 4,849
------------ ----------- ------------
Net income $9,261 $(302) $8,959
============ =========== ============
Basic earnings per share $0.78 $(0.03) $0.75
Diluted earnings per share $0.77 $(0.03) $0.74
Six Months Effect of Six Months
Ended June Change in Ended June
30, 2005 Accounting 30, 2005
as Reported Principle as Adjusted
------------ ----------- ------------
Revenues $89,870 $89,870
Costs and expenses:
Operation expense 47,285 47,285
Maintenance expense 10,091 (7,272) 2,819
General and administrative 7,809 7,809
Depreciation and
amortization 11,215 7,001 18,216
Gain on sale of assets (647) (647)
------------ ----------- ------------
Total operating expenses 75,753 (271) 75,482
Operating income 14,117 271 14,388
Interest expense (1,421) (1,421)
Interest income 167 167
Other income, net 4,092 4,092
------------ ----------- ------------
Income before income taxes 16,955 271 17,226
Income tax provision 6,189 98 6,287
------------ ----------- ------------
Net income $10,766 $173 $10,939
============ =========== ============
Basic earnings per share $1.29 $0.02 $1.31
Diluted earnings per share $1.26 $0.02 $1.28
Effect of
June 30, Change in June 30,
2006 Accounting 2006
Pre Adoption Principle as Reported
------------ ----------- ------------
ASSETS
Current assets $93,779 $(7,533) $86,246
Vessels and equipment, net 248,872 248,872
Deferred costs, net - 15,389 15,389
Goodwill 2,863 2,863
Other 687 (481) 206
------------ ----------- ------------
Total assets $346,201 $7,375 $353,576
============ =========== ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $35,613 $(6,467) $29,146
Non-current liabilities 109,669 (5,157) 104,512
Stockholders' equity 200,919 18,999 219,918
------------ ----------- ------------
Total liabilities and
stockholders' equity $346,201 $7,375 $353,576
============ =========== ============
Effect of
December 31, Change in December 31
2005 Accounting 2005
as Reported Principle as Adjusted
------------ ----------- ------------
ASSETS
Current assets $94,474 $(6,158) $88,316
Vessels and equipment, net 233,572 69 233,641
Deferred costs, net - 21,405 21,405
Goodwill 2,863 2,863
Other 1,094 (883) 211
------------ ----------- ------------
Total assets $332,003 $14,433 $346,436
============ =========== ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $31,867 $(6,583) $25,284
Non-current liabilities 106,153 1,003 107,156
Stockholders' equity 193,983 20,013 213,996
------------ ----------- ------------
Total liabilities and
stockholders' equity $332,003 $14,433 $346,436
============ =========== ============
Six Months Effect of Six Months
Ended June Change in Ended June
30, 2006 Accounting 30, 2006
Pre Adoption Principle as Reported
------------ ----------- ------------
Cash flows from operating
activities:
Net income $9,261 $(302) $8,959
Total adjustments to net
income 17,852 233 18,085
------------ ----------- ------------
Net cash provided by
operating activities 27,113 (69) 27,044
Cash flows from investing
activities:
Net cash used in investing
activities (22,633) 69 (22,564)
Cash flows from financing
activities:
Net cash used in financing
activities (4,399) -- (4,399)
------------ ----------- ------------
Net increase in cash and cash
equivalents 81 81
Cash and cash equivalents at
beginning of year 58,794 -- 58,794
------------ ----------- ------------
Cash and cash equivalents at end
of year $58,875 $-- $58,875
============ =========== ============
Six Months Effect of Six Months
Ended June Change in Ended June
30, 2005 Accounting 30, 2005
as Reported Principle as Adjusted
------------ ----------- ------------
Cash flows from operating
activities:
Net income $10,766 $173 $10,939
Total adjustments to net
income 18,033 (173) 17,860
------------ ----------- ------------
Net cash provided by
operating activities 28,799 -- 28,799
Cash flows from investing
activities:
Net cash used in investing
activities (13,357) (13,357)
Cash flows from financing
activities:
Net cash used in financing
activities (2,958) -- (2,958)
------------ ----------- ------------
Net increase in cash and cash
equivalents 12,484 12,484
Cash and cash equivalents at
beginning of year 6,347 -- 6,347
------------ ----------- ------------
Cash and cash equivalents at end
of year $18,831 $-- $18,831
============ =========== ============
Twelve Months Twelve Months
Ended Effect of Ended
December 31, Change in December 31,
2005 Accounting 2005
as Reported Principle as Adjusted
------------- ----------- -------------
Revenues $180,710 $180,710
Costs and expenses:
Operation expense 98,701 98,701
Maintenance expense 20,320 (14,075) 6,245
General and administrative 12,478 12,478
Depreciation and
amortization 23,201 12,711 35,912
Gain on sale of assets (628) (628)
------------- ----------- -------------
Total operating expenses 154,072 (1,364) 152,708
Operating income 26,638 1,364 28,002
Interest expense (2,846) (2,846)
Interest income 393 393
Other income, net 4,203 4,203
------------- ----------- -------------
Income before income taxes 28,388 1,364 29,752
Income tax provision 8,509 491 9,000
------------- ----------- -------------
Net income $19,879 $873 $20,752
============= =========== =============
Basic earnings per share $2.33 $0.10 $2.43
Diluted earnings per share $2.28 $0.10 $2.38
Twelve Months Twelve Months
Ended Effect of Ended
December 31, Change in December 31,
2005 Accounting 2005
as Reported Principle as Adjusted
------------- ----------- -------------
Cash flows from operating
activities:
Net income $19,879 $873 $20,752
Total adjustments to net
income 18,895 (804) 18,091
------------- ----------- -------------
Net cash provided by
operating activities 38,774 69 38,843
Cash flows from investing
activities:
Net cash used in
investing activities (64,222) (69) (64,291)
Cash flows from financing
activities:
Net cash provided by
financing activities 77,895 -- 77,895
------------- ----------- -------------
Net increase in cash and cash
equivalents 52,447 52,447
Cash and cash equivalents at
beginning of year 6,347 -- 6,347
------------- ----------- -------------
Cash and cash equivalents at
end of year $58,794 $-- $58,794
============= =========== =============
Twelve Months Twelve Months
Ended Effect of Ended
December 31, Change in December 31,
2004 Accounting 2004
as Reported Principle as Adjusted
------------- ----------- -------------
Revenues $149,718 $149,718
Costs and expenses:
Operation expense 80,517 80,517
Maintenance expense 20,761 (13,073) 7,688
General and administrative 11,709 11,709
Depreciation and
amortization 22,193 15,582 37,775
------------- ----------- -------------
Total operating expenses 135,180 2,509 137,689
Operating income 14,538 (2,509) 12,029
Interest expense (2,318) (2,318)
Interest income 254 254
Other income, net 333 333
------------- ----------- -------------
Income before income taxes 12,807 (2,509) 10,298
Income tax provision 2,975 (903) 2,072
------------- ----------- -------------
Net income $9,832 $(1,606) $8,226
============= =========== =============
Basic earnings per share $1.20 $(0.20) $1.00
Diluted earnings per share $1.16 $(0.19) $0.97
Twelve Months Twelve Months
Ended Effect of Ended
December 31, Change in December 31,
2004 Accounting 2004
as Reported Principle as Adjusted
------------- ----------- -------------
Cash flows from operating
activities
Net income $9,832 $(1,606) $8,226
Total adjustments to net
income 16,684 1,606 18,290
------------- ----------- -------------
Net cash provided by
operating activities 26,516 -- 26,516
Cash flows from investing
activities:
Net cash used in
investing activities (25,111) (25,111)
Cash flows from financing
activities
Net cash provided by
financing activities 1,328 -- 1,328
------------- ----------- -------------
Net increase in cash and cash
equivalents 2,733 2,733
Cash and cash equivalents at
beginning of year 3,614 -- 3,614
------------- ----------- -------------
Cash and cash equivalents at
end of year $6,347 $-- $6,347
============= =========== =============
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