Attached files
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| 8-K - FORM 8-K JULY 25, 2012 - INTERNATIONAL SHIPHOLDING CORP | form8k072512.htm |
INTERNATIONAL SHIPHOLDING CORPORATION REPORTS SECOND QUARTER 2012 RESULTS
DECLARES SECOND QUARTER DIVIDEND OF $0.25 PER SHARE
Mobile, Alabama, July 25, 2012 – International Shipholding Corporation (NYSE: ISH) today announced the financial results for the quarter ended June 30, 2012.
Second Quarter 2012 Highlights
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·
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Reported adjusted net income of $1.8 million for the three months ended June 30, 2012, excluding non-cash losses of $1.1 million
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·
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Purchased the Jones Act Molten Sulphur Carrier previously on lease
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·
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Declared a second quarter dividend of $0.25 per share payable on September 4, 2012 to shareholders of record as of August 16, 2012
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Net Income
The Company reported net income of $704,000 for the three months ended June 30, 2012, which included non-cash transaction losses and out of period adjustments totaling $1.1 million. The non-cash transaction losses consisted of deferred gain recognition and currency exchange losses attributed to the yen denominated loan facility. For the comparable three months ended June 30, 2011, the Company reported net income of $2.8 million which included a non-cash currency exchange loss of $1.9 million also attributed to the yen denominated loan facility.
Mr. Niels M. Johnsen, Chairman and Chief Executive Officer, stated, “Our results for the second quarter were negatively affected by the impact of depressed drybulk shipping markets. However, as newbuilding vessels are absorbed into the world fleet, as older vessels are scrapped and as the newbuilding order book is reduced, the drybulk shipping markets should improve. In the meantime, in this challenging environment, our longstanding established contracting strategy of medium and long term charters will continue to provide a predictable solid foundation for our revenue.”
“As we further pursue our strategy of growing our fleet in an accretive manner, we continue to provide shareholders with value through our dividend policy. For the second quarter, the Board declared a dividend payment of $0.25, in line with our 2012 dividend target of $1.00 per share.”
Operating Income
Operating income for the three months ended June 30, 2012, was $3.5 million as compared to $6.7 million for the comparable 2011 period. The Company’s gross voyage profit representing the operating results of its five reporting segments was $13.3 million compared to $18.2 million in the 2011 three month period. The comparable results by reporting segment are shown below:
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International
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Rail Ferry
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U.S. Flag
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Flag
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COA
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Service
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Other
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Totals
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(all amounts in millions)
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Second Quarter 2012
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Gross Voyage Profit
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6.630 | 4.679 | 0.126 | 1.448 | 0.411 | 13.294 | ||||||||||||
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Depreciation
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(2.310 | ) | (2.702 | ) | -- | (0.701 | ) | (0.010 | ) | (5.723 | ) | |||||||
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Gross Profit
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||||||||||||||||||
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(After Depreciation)
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4.320 | 1.977 | 0.126 | 0.747 | 0.401 | 7.571 | ||||||||||||
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Second Quarter 2011
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Gross Voyage Profit
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9.335 | 7.524 | (0.101 | ) | 1.056 | 0.333 | 18.147 | |||||||||||
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Depreciation
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(2.495 | ) | (2.699 | ) | -- | (0.899 | ) | (0.002 | ) | (6.095 | ) | |||||||
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Gross Profit
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||||||||||||||||||
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(After Depreciation)
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6.840 | 4.825 | (0.101 | ) | 0.157 | 0.331 | 12.052 | |||||||||||
Gross voyage profit for the U.S. Flag Time Charter segment was lower due to the expiration of the three operating contracts with the Military Sealift Command (MSC) which occurred near the end of the first quarter of 2012. This was partially offset by higher supplemental cargo volumes and the operation of the ice strengthened vessel on charter to the MSC. The International Flag Time Charter segment reported lower results reflecting the divestiture of two of its Pure Car Truck Carriers in the first quarter of 2012. This segment was also impacted by the dry bulk market which continues to experience depressed rate levels. The Contract of Affreightment and Rail Ferry segments reported slightly higher results reflecting lower operating costs during the quarter. The Company’s Other Segment, consisting mainly of chartering brokerage and agency services, reported comparable quarterly results.
Administrative and general expenses were lower by $735,000 for the quarter ended June 30, 2012, compared to the same period in 2011. Compensation expenses were lower as income bonus levels were not achieved for the quarter.
Gain on Purchase
During the quarter the Company reacquired the Jones Act Molten Sulphur Carrier which was divested in 2007 in a sale leaseback transaction. The unamortized deferred gain from the 2007 sale was recognized in this quarter at reacquisition.
Interest and Other
During the three month period ended June 30, 2012, the Japanese Yen strengthened in relation to the U.S. Dollar from 82.82 to 79.81, producing a non-cash charge to earnings of $1.7 million. Year to date, the yen has depreciated in relation to the U.S. Dollar and earnings have been favorably impacted by $1.9 million.
Unconsolidated Entities
The results from the Company’s investments in 50% or less owned ventures increased in the three months ended June 30, 2012, when compared to the same period in 2011. The results from the 25% investment in the Company owning ten mini-bulkers had non-recurring start up charges that were reported in the 2011 period, while the current year’s results are due to a favorable out of period adjustment related to an effective interest rate swap.
Balance Sheet
The Company’s working capital at June 30, 2012, was approximately $10.5 million, a decrease of $13.9 million from March 31, 2012. Cash and cash equivalents reflected a balance of $21.2 million. The purchase of the Jones Act Sulphur Carrier during the quarter for approximately $23 million was funded using the Company’s available cash.
Dividend Declaration
The Company’s Board of Directors authorized the payment of a $0.25 dividend payable on September 4, 2012, for each share of common stock owned on the record date of August 16, 2012. All future dividend declarations and amounts remain subject to the discretion of International Shipholding Corporation’s Board of Directors.
Conference Call
In connection with this earnings release, management will host an earnings conference call on Thursday, July 26, 2012 at 10:00 AM ET. To participate in the conference call, please dial (888) 208-1427 (domestic) or (913) 312-0677 (international). Participants can reference the International Shipholding Corporation Second Quarter 2012 Earnings Call or passcode 2508041. Please dial in approximately 5 minutes prior to the call.
The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company’s website, www.intship.com. Please allow extra time prior to the call to visit the Company’s website and download any software that may be needed to listen to the webcast.
A replay of the conference call will be available through August 2, 2012, at (877) 870-5176 (domestic) or (858) 384-5517 (international). The passcode for the replay is 2508041.
About International Shipholding
International Shipholding Corporation, through its subsidiaries, operates a diversified fleet of U.S. and international flag vessels that provide worldwide and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term charters and contracts. www.intship.com
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, 2011 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@igbir.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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CONDENSED 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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2012
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2011
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2012
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2011
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Revenues
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$ | 60,320 | $ | 69,961 | $ | 125,524 | $ | 134,295 | ||||||||
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Operating Expenses:
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Voyage Expenses
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47,026 | 51,814 | 97,852 | 100,804 | ||||||||||||
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Vessel Depreciation
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5,723 | 6,095 | 12,080 | 11,469 | ||||||||||||
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Administrative and General Expenses
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4,720 | 5,455 | 10,228 | 11,284 | ||||||||||||
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Gain on Dry Bulk Transaction
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- | (130 | ) | - | (18,844 | ) | ||||||||||
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Loss (Gain) on Sale/Purchase of Other Assets
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(667 | ) | - | (4,466 | ) | - | ||||||||||
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Total Operating Expenses
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56,802 | 63,234 | 115,694 | 104,713 | ||||||||||||
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Operating Income
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3,518 | 6,727 | 9,830 | 29,582 | ||||||||||||
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Interest and Other:
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Interest Expense
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2,281 | 2,330 | 5,008 | 4,620 | ||||||||||||
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Derivative Loss (Income)
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117 | 106 | (32 | ) | (15 | ) | ||||||||||
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Gain on Sale of Investment
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(24 | ) | (114 | ) | (66 | ) | (114 | ) | ||||||||
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Other Income from Vessel Financing
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(605 | ) | (672 | ) | (1,227 | ) | (1,360 | ) | ||||||||
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Investment Income
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(146 | ) | (185 | ) | (274 | ) | (385 | ) | ||||||||
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Foreign Exchange Loss (Gain)
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1,734 | 1,900 | (1,914 | ) | 411 | |||||||||||
| 3,357 | 3,365 | 1,495 | 3,157 | |||||||||||||
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(Loss) Income Before Provision for Income Taxes and
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Equity in Net (Loss) Income of Unconsolidated Entities
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161 | 3,362 | 8,335 | 26,425 | ||||||||||||
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Provision for Income Taxes:
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Current
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108 | 173 | 276 | 381 | ||||||||||||
| 108 | 173 | 276 | 381 | |||||||||||||
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Equity in Net Income (Loss)of Unconsolidated
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Entities (Net of Applicable Taxes)
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651 | (351 | ) | 581 | 874 | |||||||||||
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Net (Loss) Income
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$ | 704 | $ | 2,838 | $ | 8,640 | $ | 26,918 | ||||||||
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Basic and Diluted Earnings Per Common Share:
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Basic Earnings Per Common Share:
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$ | 0.10 | $ | 0.39 | $ | 1.20 | $ | 3.72 | ||||||||
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Diluted Earnings Per Common Share:
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$ | 0.10 | $ | 0.39 | $ | 1.20 | $ | 3.70 | ||||||||
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Weighted Average Shares of Common Stock Outstanding:
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Basic
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7,203,860 | 7,228,252 | 7,187,236 | 7,230,530 | ||||||||||||
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Diluted
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7,234,505 | 7,265,092 | 7,202,559 | 7,260,598 | ||||||||||||
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Dividends Per Share
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$ | 0.250 | $ | 0.375 | $ | 0.500 | $ | 0.750 | ||||||||
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONDENSED 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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2012
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2011
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Cash and Cash Equivalents
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$
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21,203
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$
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21,437
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Restricted Cash
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-
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8,907
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Marketable Securities
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13,111
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12,827
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Accounts Receivable, Net of Allowance for Doubtful Accounts
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of $100 and $100 in 2012 and 2011:
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20,276
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20,553
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Federal Income Taxes Receivable
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-
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242
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Net Investment in Direct Financing Leases
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3,310
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6,278
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Other Current Assets
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3,596
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4,037
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Notes Receivable
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4,430
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4,450
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Material and Supplies Inventory
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4,603
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5,034
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Total Current Assets
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70,529
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83,765
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Investment in Unconsolidated Entities
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13,180
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12,800
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Net Investment in Direct Financing Leases
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15,291
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43,837
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Vessels, Property, and Other Equipment, at Cost:
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Vessels
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561,632
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581,705
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Leasehold Improvements
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26,348
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26,128
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Construction in Progress
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252
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20,729
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Furniture and Equipment
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9,529
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9,372
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597,761
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637,934
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Less - Accumulated Depreciation
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(179,235)
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(171,820)
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418,526
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466,114
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Other Assets:
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Deferred Charges, Net of Accumulated Amortization
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19,066
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16,546
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of $15,821 and $17,429 in 2012 and 2011, Respectively
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Intangible Assets, Net
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1,932
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3,219
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Due from Related Parties
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1,633
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1,571
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Notes Receivable
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35,561
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37,714
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Other
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5,180
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13
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63,372
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59,063
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TOTAL ASSETS
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$
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580,898
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$
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665,579
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONDENSED 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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2012
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2011
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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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$
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27,849
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$
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36,079
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Accounts Payable and Accrued Liabilities
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32,152
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28,343
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Total Current Liabilities
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60,001
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64,422
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Long-Term Debt, Less Current Maturities
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191,945
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286,014
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Other Long-Term Liabilities:
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Lease Incentive Obligation
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6,571
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6,640
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Other
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69,137
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59,148
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TOTAL LIABILITIES
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327,654
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416,224
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Stockholders' Equity:
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Common Stock
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8,600
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8,606
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Additional Paid-In Capital
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85,711
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85,830
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Retained Earnings
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207,944
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204,109
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Treasury Stock
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(25,403)
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(25,403)
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Accumulated Other Comprehensive (Loss)
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(23,608)
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(23,787)
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TOTAL STOCKHOLDERS' EQUITY
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253,244
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249,355
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$
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580,898
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$
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665,579
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INTERNATIONAL SHIPHOLDING CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(All Amounts in Thousands)
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(Unaudited)
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Six Months Ended June 30,
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2012
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2011
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Cash Flows from Operating Activities:
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Net Income
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$ | 8,640 | $ | 26,918 | ||||
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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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12,357 | 11,961 | ||||||
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Amortization of Deferred Charges and Other Assets
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5,214 | 4,029 | ||||||
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Gain on Dry Bulk Transaction
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- | (18,844 | ) | |||||
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Non-Cash Stock Based Compensation
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544 | 1,006 | ||||||
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Equity in Net Income of Unconsolidated Entities
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(581 | ) | (874 | ) | ||||
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Distributions from Unconsolidated Entities
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- | 750 | ||||||
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Gain on Purchase / Sale of Assets
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(4,466 | ) | - | |||||
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Gain on Sale of Investments
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(66 | ) | (114 | ) | ||||
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Gain (Loss) on Foreign Currency Exchange
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(1,914 | ) | 411 | |||||
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Changes in:
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Deferred Drydocking Charges
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(7,623 | ) | (4,359 | ) | ||||
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Accounts Receivable
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277 | (4,817 | ) | |||||
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Inventories and Other Current Assets
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(624 | ) | 1,816 | |||||
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Other Assets
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1,950 | 89 | ||||||
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Accounts Payable and Accrued Liabilities
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(594 | ) | (121 | ) | ||||
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Other Long-Term Liabilities
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(3,204 | ) | 1,249 | |||||
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Net Cash Provided by Operating Activities
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9,910 | 19,100 | ||||||
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Cash Flows from Investing Activities:
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Principal payments received under Direct Financing Leases
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2,279 | 2,711 | ||||||
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Unearned Income from Direct Financing Leases
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- | |||||||
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Capital Improvements to Vessels and Other Assets
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(46,103 | ) | (17,216 | ) | ||||
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Proceeds from Sale of Assets
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130,315 | - | ||||||
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Purchase of Marketable Securities
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(5 | ) | (85 | ) | ||||
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Proceeds from Sale of Marketable Securities
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159 | 2,755 | ||||||
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Investment in Unconsolidated Entities
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(750 | ) | (1,796 | ) | ||||
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Acquisition of Unconsolidated Entity
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- | 7,092 | ||||||
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Net Decrease/(Increase) in Restricted Cash Account
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6,907 | (6,549 | ) | |||||
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Proceeds from Note Receivables
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2,507 | 2,069 | ||||||
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Net Cash Provided by (Used In) Investing Activities
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95,309 | (11,019 | ) | |||||
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Cash Flows from Financing Activities:
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Proceeds from Issuance of Debt
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41,175 | 58,079 | ||||||
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Repayment of Debt
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(141,559 | ) | (49,378 | ) | ||||
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Additions to Deferred Financing Charges
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(264 | ) | (1,479 | ) | ||||
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Common Stock Dividends Paid
|
(4,805 | ) | (5,625 | ) | ||||
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Net Cash (Used In) Provided by Financing Activities
|
(105,453 | ) | 1,597 | |||||
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Net (Decrease) / Increase in Cash and Cash Equivalents
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(234 | ) | 9,678 | |||||
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Cash and Cash Equivalents at Beginning of Period
|
21,437 | 24,158 | ||||||
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Cash and Cash Equivalents at End of Period
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$ | 21,203 | $ | 33,836 | ||||