Maritrans Reports Second Quarter and Six-Months 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 its quarterly dividend. Three-Months and Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Highlights: --Achieves Second Consecutive Quarter of Record Revenue --Posts Highest Six-Month 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 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. as Public Company --Expands Fleet with Addition of Oil Tanker --Awards Contracts to Rebuild Seventh and Eighth Tug-Barges in July --Receives Delivery of Sixth Double-Hull Barge; 69% of Fleet OPA-Compliant --Favorably Settles Double-Hull Patent Lawsuit lawsuit: see procedure; tort. --Re-Enters Northeast Barge Market; Enters into 18-Month Time Charter with Sunoco Inc. (R&M) Net income for the quarter ended June 30, 2005 was $7.1 million, or $0.83 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 $46.3 million. This compares with net income of $3.1 million, or $0.37 diluted earnings per share, on revenues of $36.7 million for the quarter ended June 30, 2004. Results for the quarter ended June 30, 2005 included $4.0 million received in connection with the settlement of our lawsuit 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. , discussed below, which is equivalent to approximately $0.30 diluted earnings per share, net of tax. In the prior year, results for the quarter ended June 30, 2004, included an increase of $0.8 million, or approximately $0.06 diluted earnings per share, net of tax, as a result of the Company's decision to reverse previously recorded insurance reserves that were no longer considered necessary. Operating income for the quarter ended June 30, 2005 was $7.8 million compared to $5.0 million for the quarter ended June 30, 2004. The increase in operating income for the quarter ended June 30, 2005 was due to continued 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 continued to drive strong demand for the Company's crude-oil lightering services. During the quarter, the Company also earned strong average daily rates on vessels that 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. Additionally, the Company obtained significant increases in rates on its renewed contracts, which led to higher contract revenue despite the Company having fewer vessels on charter compared to the second quarter of 2004. 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 $34.7 million for the quarter ended June 30, 2005 compared to $30.3 million for the quarter ended June 30, 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 second quarter of 2005, the Company experienced slightly lower overall utilization than in the second quarter of 2004. Utilization for the second quarter of 2005 was 81.8% compared to 82.5% in the second quarter of 2004 due to increased out of service time related to both the Company's double-hull rebuilding of the M209 as well as the preparation for redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of the M192. 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 $38.6 million in the quarter ended June 30, 2005 from $31.8 million in the quarter ended June 30, 2004, primarily because of significantly higher fuel costs compared to the second quarter of 2004. The Company also experienced higher port charges during the current quarter for more West Coast moves through the Panama Canal Panama Canal, waterway across the Isthmus of Panama, connecting the Atlantic (by way of the Caribbean Sea) and Pacific oceans, built by the United States (1904–14) on territory leased from the republic of Panama. . Crew expenses and shoreside support expenses also increased operations costs. In the current period, insurance expenses returned to normal levels as compared to the 2004 period during which insurance expenses were lower than normal due to the reversal of previously recorded reserves. The higher operating expenses were partially offset by lower 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. for the quarter ended June 30, 2005. During the 2005 quarter, general and administrative expenses decreased primarily due to a decrease in employment related fees, 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 relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. expenses. Jonathan Whitworth, Chief Executive Officer of Maritrans, commented, "We are extremely pleased to have drawn upon the strong demand for our vessels to post our second consecutive quarter of record revenues as well as the highest six-month operating income, net income and EPS since our IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in 1987. These impressive results highlight Maritrans' leadership position within its core markets, the Company's on-going success at optimizing its fleet deployment strategy, as well as its proactive approach of building and operating an OPA OPA: see Office of Price Administration. compliant fleet." 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. In August 2005, the Company announced that it has entered into a three-year time charter for a single-hull oil tanker. Subject to delivery in the US Gulf and meeting required compliances, the vessel will join the Company's fleet on or about October 1, 2005, and be deployed into the clean products trade. The M/V M/V Motor Vehicles M/V Motor Vessel M/V Merchant Vessel Seabrook is owned and operated by Seabrook Carriers Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Fairfield-Maxwell LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . 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 expects spot market exposure to be consistent in the remainder of 2005 compared to its exposure in the first half of 2005. The stronger spot market in the second 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 second quarter, reduced imports, increased activity on the West Coast and general growth in the economy all contributed to 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 half of 2005. During the second quarter, Maritrans also announced the re-deployment of the double-hull barge M192 from its existing clean products route along the Gulf Coast to the Northeast residual oil residual oil n. The low-grade oil products that remain after the distillation of petroleum, used in adhesives, roofing compounds, and asphalt manufacture. Noun 1. market. The M192 entered into an 18-month time charter with Sunoco Inc. (R&M), which will commence later this year Mr. Whitworth added, "During the second quarter, we continued to benefit from our strategy of optimizing our fleet deployment. Our leading position as the largest spot owner in the Jones Act trade combined with our ability to renew contracts at significantly higher rates enabled the Company to take advantage of a robust rate environment. By continuing to strive to achieve an appropriate balance between spot and contract coverage while seeking opportunities to renew contracts at higher rates, we believe we are in an optimal position to benefit from a long-term environment that we expect to be characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by rising rates and shrinking supply." 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 six of its original nine single-hull barges to double-hull structures. As of June 30, 2005, 69% 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 second quarter of 2005, the Company made further progress on its rebuilding program by taking delivery of the M209, which is the sixth double-hull barge that the Company has rebuilt using its patented barge rebuilding process. The rebuild included 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, which increased the vessel's cargo carrying capacity 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. by approximately 30,000 barrels. The rebuilding of the M209 and the tug boat Enterprise cost approximately $27 million and $4.5 million, respectively. The M209 received a CAP1 rating from the American Bureau of Shipping The American Bureau of Shipping (ABS) is a classification society. At the end of 2006, ABS was the third largest class society with a classed fleet of over 10,000 commercial vessels and offshore facilities. which indicates that the barge meets the standards of a newly built vessel. In July 2005, the Company awarded contracts to Tampa Bay Tampa Bay, inlet of the Gulf of Mexico, 25 mi (40 km) long and 7 to 12 mi (11.3–19 km) wide, W Fla., separated from the Gulf by numerous small islands; it receives the Hillsborough River. St. Shipbuilding & Repair Company to rebuild their seventh and eighth single-hull barges, the OCEAN 210 and OCEAN 211 to double-hull configurations. The rebuilds are expected to cost approximately $30 million each, and will also include midbody insertions to increase their capacity by approximately 14%. The rebuilds of the OCEAN 210 and OCEAN 211 are expected to be completed in the third quarter of 2006 and the second quarter of 2007, respectively. The Company intends to convert its remaining single-hull barge and continues to evaluate converting its two single-hull tank ships into double-hull vessels or utilizing them in alternate transportation services. The Company estimates that the total cost of its barge rebuilding program will exceed $200 million, of which $114 million had been spent through June 30, 2005. Mr. Whitworth concluded, "We continue to make significant progress in achieving our goal of operating a 100% OPA compliant fleet and furthering our double-hull leadership over peers. The re-delivery of our sixth double-hull barge and our plan to rebuild two additional single-hull barges underscores both our commitment and our ability to execute our rebuilding program. Complementing our strong financial results was the initial progress that we made executing our strategic initiatives such as our re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the into the Northeast and the recent addition of the M/V Seabrook to our fleet. To best serve our stockholders and complement this successful program, we will maintain our focus on seeking financially prudent growth opportunities as we continue to look for ways to take advantage of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. industry fundamentals and deliver strong results in both the near-term and longer-term." LITIGATION SETTLEMENT In the second quarter the Company agreed to settle its pending lawsuit against Penn Maritime Inc. and Penn Tug & Barge Inc. (together "Penn Maritime") on Maritrans' claims for patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. and misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any of trade secrets. Penn Maritime agreed to pay Maritrans $4 million to settle all of Maritrans' claims. Penn Maritime agreed that the Court will issue a judgment attesting to the validity of Maritrans' patents for the process of converting single-hull barges to double-hull. Maritrans agreed to give Penn Maritime a license of Maritrans' patent covering all barges presently owned by Penn Maritime. MANAGEMENT TEAM ADDITION In June 2005, Maritrans promoted Norman Gauslow to Vice President of Operations for the Operating Company operating company A business that engages in transactions with outsiders. , from his previous position as Director of Maintenance. Mr. Gauslow joined Maritrans in 2003, and has 35 years of maritime experience both aboard vessels and in senior management positions. Mr. Gauslow graduated from the U.S. Merchant Marine Academy with a degree in Marine Engineering. Commenting on the promotion, Mr. Whitworth stated, "Norm brings a strong mix of skills and experience to our senior management team at Maritrans, and we look forward to him contributing to our long term success." DIVIDEND Maritrans' Board of Directors declared a quarterly dividend of $0.11 per share, payable on August 31, 2005, to shareholders of record on August 17, 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 August 15, 2005. NEW YORK STOCK EXCHANGE New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. Maritrans' Board of Directors and Management team will be ringing the closing bell at the New York Stock Exchange on Friday August 5, 2005. CONFERENCE CALL INFORMATION Maritrans' management will host a conference call on August 2, 2005, at 9:00 a.m. eastern time to discuss the Company's second quarter results. To access this call, please dial (800) 633-8615. A replay of the call may be accessed by dialing (800) 633-8284 and providing the reservation number 21253361. The replay will be available from 12:00 p.m. eastern time on August 2, 2005, to 11:59 p.m. eastern time on August 9, 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 August 16, 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. With 15 units, Maritrans has the largest fleet in its size category and one of the largest 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 eleven oceangoing married tug/barge units with an aggregate fleet capacity of approximately 3.6 million barrels, of which 69 percent is double-hulled. Maritrans has two primary areas of focus: transporting refined products in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east to growth areas such as Florida and supplying Philadelphia area refineries with crude oil lightering from large foreign tankers. 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 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 Six Months Ended
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Revenue $46,330 $36,747 $89,870 $71,408
Voyage Costs 11,667 6,401 20,596 12,409
------- ------- ------- -------
Time Charter Equivalent $34,663 $30,346 $69,274 $58,999
======= ======= ======= =======
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
($ Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Revenue $46,330 $36,747 $89,870 $71,408
Operations expense
Operations 13,575 11,766 26,689 24,345
Voyage costs 11,667 6,401 20,596 12,409
Maintenance expense 5,166 5,186 10,091 10,485
General and administrative
expense 2,423 3,120 7,809 5,537
Depreciation and amortization
expense 5,719 5,277 11,215 10,469
Gain on sale of assets -- -- 647 --
------- ------- ------- -------
Operating Income 7,780 4,997 14,117 8,163
Other Income 4,152 330 4,259 428
Interest Expense (733) (348) (1,421) (753)
------- ------- ------- -------
Pre-tax income 11,199 4,979 16,955 7,838
Income Tax (Benefit)
Provision 4,088 1,867 6,189 2,939
------- ------- ------- -------
Net Income $ 7,111 $ 3,112 $10,766 $ 4,899
======= ======= ======= =======
Diluted Earnings Per Share $ 0.83 $ 0.37 $ 1.26 $ 0.58
Diluted Shares Outstanding 8,571 8,402 8,545 8,413
Capital Expenditures $ 6,030 $ 6,958 $14,004 $19,599
Utilization of Calendar days 81.8% 82.5% 81.8% 81.2%
Barrels carried (in millions) 44.4 44.4 89.6 87.3
Available days 1,203 1,232 2,392 2,418
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
($ Thousands)
-------------
June 30, 2005 December 31, 2004
------------- -----------------
Cash and cash equivalents $ 18,831 $ 6,347
Other current assets 31,936 30,207
Net vessels and equipment 194,713 191,924
Other assets 3,178 3,305
-------- --------
Total assets $248,658 $231,783
======== ========
Current portion of debt $ 3,863 $ 3,756
Total other current liabilities 25,796 19,002
Long-term debt 57,414 59,373
Deferred shipyard costs and other 23,882 21,244
Deferred income taxes 35,721 36,004
Stockholders' equity 101,982 92,404
-------- --------
Total liabilities and stockholders'
equity $248,658 $231,783
======== ========
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION
($ Thousands)
-------------
Six Months Ended June 30,
2005 2004
-------- --------
Cash flows from operating activities:
Net income $ 10,766 $ 4,899
Depreciation and amortization 11,215 10,469
Other 7,554 2,343
-------- --------
Total adjustments to net income 18,769 12,812
-------- --------
Net cash provided by operating
activities 29,535 17,711
Net cash used in investing activities (13,357) (12,264)
-------- --------
Net cash (used in) provided by financing
activities (3,694) 3,011
-------- --------
Net increase in cash and cash equivalents 12,484 8,458
Cash and cash equivalents at beginning of
period 6,347 3,614
-------- --------
Cash and cash equivalents at end of
period $ 18,831 $ 12,072
=======================
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 2Q07 INDEPENDENCE 6,000
OCEAN 210 207,000 NO 3Q06 COLUMBIA 6,000
M 214@ 214,000 YES 2004 HONOUR 6,000
M 209@ 209,000 YES 2005 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 #
SEABROOK 230,000 NO C
# 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.
C Chartered in from Seabrook Carriers Inc.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion