Attached files
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| 8-K - FORM 8-K - JULY 27, 2011 - INTERNATIONAL SHIPHOLDING CORP | form8kjuly272011.htm |
INTERNATIONAL SHIPHOLDING CORPORATION REPORTS SECOND
QUARTER 2011 RESULTS
DECLARES SECOND QUARTER DIVIDEND OF $0.375 PER SHARE
Mobile, Alabama, July 28, 2011 - International Shipholding Corporation (NYSE: ISH) today announced the financial results for the quarter ended June 30, 2011.
Second Quarter 2011 Highlights
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Generated net income of $2.8 million for the three months ended June 30, 2011
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Secured permanent financing for the early buy-out option of two car carriers
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Took delivery of two mini bulkers as part of our Oslo Bulk Joint Venture
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Net Income
The Company reported net income of $2.8 million for the three months ended June 30, 2011. For the comparable three months ended June 30, 2010, the Company reported net income of $9.6 million.
Mr. Niels M. Johnsen, chairman and chief executive officer, stated: “During a time when our fleet of diversified vessels performed as expected, our newly acquired vessels commenced their commercial operations. We secured permanent financing to acquire the two car carriers we agreed to purchase in the first quarter by exercising our early buy-out options with the lessors. Additionally, we took delivery of two mini bulkers as part of our Oslo Bulk Joint Venture. The tenth and final vessel of this joint venture was delivered on July 20th, 2011. ”
“Entering the second half of 2011, we continue to maintain a diversified portfolio of medium to long-term contracts which enables the Company to achieve predictable cash flows during a time when market conditions are volatile. Volatile markets produce opportunities, and we continue to seek opportunities to both grow the Company and to create additional shareholder value.”
“In continuing our dividend policy, our Company’s Board declared a second quarter dividend payment of $0.375 per share.”
Operating Income
The Company’s Gross Voyage Profit, representing the operating results of its five segments, decreased from $18.6 million to $12 million. The lower results are directly attributable to reduced supplemental cargo volumes. While supplemental cargoes in the second quarter of 2010 were above historical levels, they have returned to normal levels in 2011, as expected. Excluding the impact of the supplemental cargoes, results of the Company’s U.S. Flag Time Charter segment for the second quarter of 2011 were comparable to the 2010 second quarter. The International Flag Time Charter segment results were slightly lower compared to the prior year period. The three Handysize vessels, which operated in the second quarter of 2011, generated satisfactory results; however, these results were offset by the loss of the Company’s International Flag container vessel, which was scrapped in the third quarter of 2010. The results in the second quarter of 2011 of the Contract of Affreightment segment were slightly lower than the 2010 second quarter due to a drop in tonnage moved. The Company’s Rail Ferry segment reported higher results for the quarter as compared to the second quarter of 2010, as northbound cargo volumes in 2011 continue to outpace the 2010 period. The Company’s Other segment, reflecting an increase in chartering brokerage income, had improved results in the 2011 second quarter as compared to the 2010 second quarter. Administrative and general expenses during the second quarter of 2011 were comparable to the 2010 second quarter expenditure levels.
Interest and Other Expense
Interest expense for the three months ended June 30, 2011, decreased from the comparable period in 2010. While the Company incurred additional debt on the purchase of the three Handysize Bulk Carriers, the lower swapped interest rate on other loans offset higher interest expense. The foreign exchange non cash loss of $1.9 million is the result of a weaker U. S. dollar versus the Japanese Yen and its impact on the Company’s Yen-denominated facility over the three month period ended June 30, 2011. The Yen was pegged at 80.57 as of the end of the second quarter.
Federal Income Tax Benefit
The Company’s second quarter income tax provision was $204,000 as compared to a benefit of $30,000 for the 2010 second quarter. As the Company has no deferred tax liability balance, any losses from its on-going operations require valuation allowances which effectively eliminate the tax benefits generated in the quarter.
Balance Sheet
The Company’s working capital at June 30, 2011, was approximately $32 million, a reduction of approximately $5 million from March 31, 2011. Cash, Cash equivalents and marketable securities were approximately $49 million at June 30, 2011. The primary reason for the drop in the Company’s liquidity was obtaining permanent financing on the Company’s Handymax vessel scheduled for delivery in the first quarter of 2012. This facility required additional equity during the vessel’s construction period. We have also arranged permanent financing for the acquisition of the two car carriers which the Company had previously exercised early buy-out options from the lessors. Both of the vessels will be acquired in July 2011 and we expect to fund equity positions of approximately $19 million.
Dividend Declaration
The Company’s Board of Directors authorized the payment of a $0.375 dividend for each share of common stock owned on the record date of August 16, 2011, payable on September 1, 2011. The Company intends to continue to declare quarterly dividends. All future dividend declarations and amounts remain subject to the discretion of International Shipholding Corporation’s Board of Directors.
About International Shipholding
International Shipholding Corporation, through its subsidiaries, operates a diversified fleet of U.S. and foreign flag vessels that provide international and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term charters and contracts.
Caution concerning forward-looking statements
This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements are based on assumptions and opinions concerning a variety of known and unknown risks. Please refer to ISH’s Annual Report on form 10-K for the year ended December 31, 2010 as well as its future filings and reports filed with or furnished to the Securities and Exchange Commission for a description of the business environment in which ISH operates and the important factors, risks and uncertainties that may affect its business and financial results. If any assumptions or opinions prove materially incorrect, any forward-looking statements made on that basis may also prove to be materially incorrect. ISH is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
Contact:
The IGB Group
David Burke
(646) 673-9701
dburke@igbir.com
Leon Berman
(212) 477-8438
lberman@ignir.com
International Shipholding Corporation
Niels M. Johnsen, Chairman (212) 943-4141
Erik L. Johnsen, President (251) 243-9221
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(All Amounts in Thousands Except Share Data)
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(Unaudited)
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Three Months Ended June 30,
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Six Months ended June 30,
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2011
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2010
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2011
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2010
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Revenues
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$ | 69,961 | $ | 85,084 | $ | 134,295 | $ | 157,998 | ||||||||
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Operating Expenses:
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Voyage Expenses
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51,814 | 61,513 | 100,804 | 116,456 | ||||||||||||
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Vessel Depreciation
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6,095 | 4,984 | 11,469 | 8,748 | ||||||||||||
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Administrative and General Expenses
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5,455 | 5,415 | 11,284 | 11,434 | ||||||||||||
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Gain on Dry Bulk Transaction
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(130 | ) | - | (18,844 | ) | - | ||||||||||
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Loss (Gain) on Sale of Other Assets
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- | 46 | - | (75 | ) | |||||||||||
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Total Operating Expenses
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63,234 | 71,958 | 104,713 | 136,563 | ||||||||||||
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Operating Income
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6,727 | 13,126 | 29,582 | 21,435 | ||||||||||||
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Interest and Other:
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Interest Expense
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2,330 | 2,433 | 4,620 | 4,032 | ||||||||||||
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Derivative Loss (Income)
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106 | - | (15 | ) | - | |||||||||||
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Gain on Sale of Investments
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(114 | ) | (16 | ) | (114 | ) | (16 | ) | ||||||||
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Other Income from Vessel Financing
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(672 | ) | (590 | ) | (1,360 | ) | (1,194 | ) | ||||||||
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Investment Income
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(185 | ) | (987 | ) | (385 | ) | (1,166 | ) | ||||||||
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Foreign Exchange Loss
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1,900 | 3,148 | 411 | 3,148 | ||||||||||||
| 3,365 | 3,988 | 3,157 | 4,804 | |||||||||||||
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Income Before Provision (Benefit) for Income Taxes and
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Equity in Net (Loss) Income of Unconsolidated Entities
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3,362 | 9,138 | 26,425 | 16,631 | ||||||||||||
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Provision (Benefit) for Income Taxes:
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Current
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173 | 170 | 381 | 340 | ||||||||||||
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Deferred
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- | (200 | ) | - | (965 | ) | ||||||||||
| 173 | (30 | ) | 381 | (642 | ) | |||||||||||
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Equity in Net (Loss) Income of Unconsolidated
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Entities (Net of Applicable Taxes)
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(351 | ) | 448 | 874 | 2,911 | |||||||||||
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Net Income
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$ | 2,838 | $ | 9,616 | $ | 26,918 | $ | 20,184 | ||||||||
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Basic and Diluted Earnings Per Common Share:
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Basic Earnings Per Common Share:
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$ | 0.39 | $ | 1.33 | $ | 3.72 | $ | 2.79 | ||||||||
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Diluted Earnings Per Common Share:
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$ | 0.39 | $ | 1.32 | $ | 3.70 | $ | 2.76 | ||||||||
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Weighted Average Shares of Common Stock Outstanding:
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Basic
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7,228,252 | 7,242,126 | 7,230,530 | 7,245,642 | ||||||||||||
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Diluted
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7,265,092 | 7,295,638 | 7,260,598 | 7,308,398 | ||||||||||||
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Dividends Per Share
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$ | 0.375 | $ | 0.0375 | $ | 0.750 | $ | 0.875 | ||||||||
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONSOLIDATED BALANCE SHEETS
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(All Amounts in Thousands)
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(Unaudited)
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June 30,
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December 31,
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ASSETS
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2011
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2010
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Current Assets:
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Cash and Cash Equivalents
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$ | 33,836 | $ | 24,158 | ||||
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Restricted Cash
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6,549 | - | ||||||
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Marketable Securities
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8,494 | 11,527 | ||||||
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Accounts Receivable, Net of Allowance for Doubtful Accounts
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of $329 and $311 in 2011 and 2010:
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21,715 | 16,474 | ||||||
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Federal Income Taxes Receivable
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168 | 242 | ||||||
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Net Investment in Direct Financing Leases
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5,935 | 5,596 | ||||||
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Other Current Assets
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583 | 2,513 | ||||||
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Notes Receivable
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4,248 | 4,248 | ||||||
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Material and Supplies Inventory
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4,338 | 3,774 | ||||||
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Total Current Assets
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85,866 | 68,532 | ||||||
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Investment in Unconsolidated Entities
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14,722 | 27,261 | ||||||
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Net Investment in Direct Financing Leases
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47,052 | 50,102 | ||||||
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Vessels, Property, and Other Equipment, at Cost:
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Vessels
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498,059 | 365,797 | ||||||
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Leasehold Improvements
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26,128 | 26,128 | ||||||
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Construction in Progress
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11,901 | 78,355 | ||||||
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Furniture and Equipment
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9,370 | 7,863 | ||||||
| 545,458 | 478,143 | |||||||
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Less - Accumulated Depreciation
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(156,509 | ) | (143,667 | ) | ||||
| 388,949 | 334,476 | |||||||
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Other Assets:
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Deferred Charges, Net of Accumulated Amortization
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16,456 | 14,482 | ||||||
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of $17,478 and $14,525 in 2011 and 2010, Respectively
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Intangible Assets
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4,507 | - | ||||||
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Due from Related Parties
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4,272 | 4,124 | ||||||
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Notes Receivable
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38,018 | 40,142 | ||||||
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Other
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4,914 | 5,004 | ||||||
| 68,167 | 63,752 | |||||||
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TOTAL ASSETS
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$ | 604,756 | $ | 544,123 | ||||
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONSOLIDATED BALANCE SHEETS
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(All Amounts in Thousands)
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(Unaudited)
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June 30,
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December 31,
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2011
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2010
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
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Current Maturities of Long-Term Debt
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$ | 28,045 | $ | 21,324 | ||||
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Accounts Payable and Accrued Liabilities
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26,139 | 32,114 | ||||||
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Total Current Liabilities
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54,184 | 53,438 | ||||||
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Long-Term Debt, Less Current Maturities
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231,186 | 200,241 | ||||||
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Other Long-Term Liabilities:
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Lease Incentive Obligation
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6,921 | 7,022 | ||||||
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Other
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56,631 | 49,672 | ||||||
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TOTAL LIABILITIES
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348,922 | 310,373 | ||||||
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Stockholders' Equity:
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Common Stock
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8,573 | 8,564 | ||||||
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Additional Paid-In Capital
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85,068 | 84,846 | ||||||
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Retained Earnings
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204,834 | 183,541 | ||||||
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Treasury Stock
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(25,403 | ) | (25,403 | ) | ||||
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Accumulated Other Comprehensive (Loss)
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(17,238 | ) | (17,798 | ) | ||||
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TOTAL STOCKHOLDERS’ EQUITY
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255,834 | 233,750 | ||||||
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TOTAL LIABILITIES AND STOCKHODERS’ EQUITY
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$ | 604,756 | $ | 544,123 | ||||
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(All Amounts in Thousands)
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Six Months Ended June 30,
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2011
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2010
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Cash Flows from Operating Activities:
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Net Income
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$ | 26,918 | $ | 20,184 | ||||
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Adjustments to Reconcile Net Income to Net Cash Provided by
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Operating Activities:
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Depreciation
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11,961 | 9,040 | ||||||
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Amortization of Deferred Charges and Other Assets
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4,029 | 5,087 | ||||||
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Deferred Benefit for Income Taxes
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- | (965 | ) | |||||
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Gain on Acquisition
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(18,844 | ) | - | |||||
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Non-Cash Stock Based Compensation
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1,006 | 1,399 | ||||||
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Equity in Net Income of Unconsolidated Entities
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(874 | ) | (2,911 | ) | ||||
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Distributions from Unconsolidated Entities
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750 | 1,500 | ||||||
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Gain on Sale of Assets
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- | (75 | ) | |||||
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Gain on Sale of Investments
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(114 | ) | (16 | ) | ||||
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Loss on Foreign Currency Exchange
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411 | 3,148 | ||||||
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Changes in:
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Deferred Drydocking Charges
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(4,359 | ) | (244 | ) | ||||
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Accounts Receivable
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(4,817 | ) | (11,790 | ) | ||||
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Inventories and Other Current Assets
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1,816 | 505 | ||||||
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Other Assets
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89 | (2 | ) | |||||
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Accounts Payable and Accrued Liabilities
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(121 | ) | (1,002 | ) | ||||
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Other Long-Term Liabilities
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1,249 | 452 | ||||||
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Net Cash Provided by Operating Activities
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19,100 | 24,310 | ||||||
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Cash Flows from Investing Activities:
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Principal payments received under Direct Financing Leases
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2,711 | 2,935 | ||||||
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Capital Improvements to Vessels, Leasehold Improvements, and Other Assets
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(17,216 | ) | (72,642 | ) | ||||
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Proceeds from Sale of Assets
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- | 3,853 | ||||||
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Purchase of Marketable Securities
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(85 | ) | (8,708 | ) | ||||
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Proceeds from Sale of Marketable Securities
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2,755 | 598 | ||||||
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Investment in Unconsolidated Entities
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(1,796 | ) | (2,584 | ) | ||||
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Acquisition of Unconsolidated Entity
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7,092 | - | ||||||
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Net Increase in Restricted Cash Account
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(6,549 | ) | - | |||||
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Proceeds from Note Receivables
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2,069 | 2,012 | ||||||
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Net Cash Used In Investing Activities
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(11,019 | ) | (74,536 | ) | ||||
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Cash Flows from Financing Activities:
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Common Stock Repurchase
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- | (5,231 | ) | |||||
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Proceeds from Issuance of Debt
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58,079 | 122,306 | ||||||
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Repayment of Debt
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(49,378 | ) | (93,409 | ) | ||||
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Additions to Deferred Financing Charges
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(1,479 | ) | (518 | ) | ||||
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Common Stock Dividends Paid
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(5,625 | ) | (6,575 | ) | ||||
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Net Cash Provided by Financing Activities
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1,597 | 16,573 | ||||||
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Net Increase in Cash and Cash Equivalents
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9,678 | (33,653 | ) | |||||
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Cash and Cash Equivalents at Beginning of Period
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24,158 | 47,468 | ||||||
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Cash and Cash Equivalents at End of Period
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$ | 33,836 | $ | 13,815 | ||||