For the six months ended
Second Quarter 2020 Discussion and Update on Business Conditions
Ocean Transportation: The Company's container volume in the
In
In
In
The contribution in the second quarter 2020 from the Company's SSAT joint venture investment was
Logistics: In the second quarter 2020, operating income for the Company's Logistics segment was
For the third quarter of 2020, the Company expects consolidated operating income, net income, diluted earnings per share and EBITDA to exceed the results achieved in the third quarter of 2019.
Results By Segment |
||||||||||||
Ocean Transportation — Three months ended |
||||||||||||
Three Months Ended |
||||||||||||
(Dollars in millions) |
2020 |
2019 |
Change |
|||||||||
Ocean Transportation revenue |
$ |
410.8 |
$ |
415.4 |
$ |
(4.6) |
(1.1) |
% |
||||
Operating costs and expenses |
(368.5) |
(395.7) |
27.2 |
(6.9) |
% |
|||||||
Operating income |
$ |
42.3 |
$ |
19.7 |
$ |
22.6 |
114.7 |
% |
||||
Operating income margin |
10.3 |
% |
4.7 |
% |
||||||||
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) |
||||||||||||
|
36,200 |
37,700 |
(1,500) |
(4.0) |
% |
|||||||
|
8,200 |
16,700 |
(8,500) |
(50.9) |
% |
|||||||
|
17,100 |
18,800 |
(1,700) |
(9.0) |
% |
|||||||
|
27,400 |
16,300 |
11,100 |
68.1 |
% |
|||||||
|
4,200 |
4,800 |
(600) |
(12.5) |
% |
|||||||
Other containers (2) |
3,900 |
4,800 |
(900) |
(18.8) |
% |
(1) |
Approximate volumes included for the period are based on the voyage departure date, but revenue and operating |
(2) |
Includes containers from services in various islands in |
Ocean Transportation revenue decreased
On a year-over-year FEU basis,
Ocean Transportation operating income increased
The Company's SSAT terminal joint venture investment contributed
Ocean Transportation — Six months ended |
||||||||||||
Six Months Ended |
||||||||||||
(Dollars in millions) |
2020 |
2019 |
Change |
|||||||||
Ocean Transportation revenue |
$ |
811.7 |
$ |
813.3 |
$ |
(1.6) |
(0.2) |
% |
||||
Operating costs and expenses |
(761.5) |
(784.2) |
22.7 |
(2.9) |
% |
|||||||
Operating income |
$ |
50.2 |
$ |
29.1 |
$ |
21.1 |
72.5 |
% |
||||
Operating income margin |
6.2 |
% |
3.6 |
% |
||||||||
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) |
||||||||||||
|
71,700 |
72,600 |
(900) |
(1.2) |
% |
|||||||
|
21,500 |
33,700 |
(12,200) |
(36.2) |
% |
|||||||
|
35,300 |
35,200 |
100 |
0.3 |
% |
|||||||
|
40,300 |
30,100 |
10,200 |
33.9 |
% |
|||||||
|
9,100 |
9,900 |
(800) |
(8.1) |
% |
|||||||
Other containers (2) |
8,000 |
8,300 |
(300) |
(3.6) |
% |
(1) |
Approximate volumes included for the period are based on the voyage departure date, but revenue and operating |
(2) |
Includes containers from services in various islands in |
Ocean Transportation revenue decreased
On a year-over-year FEU basis,
Ocean Transportation operating income increased
The Company's SSAT terminal joint venture investment contributed
Logistics — Three months ended |
||||||||||||
Three Months Ended |
||||||||||||
(Dollars in millions) |
2020 |
2019 |
Change |
|||||||||
Logistics revenue |
$ |
113.3 |
$ |
142.5 |
$ |
(29.2) |
(20.5) |
% |
||||
Operating costs and expenses |
(104.4) |
(131.2) |
26.8 |
(20.4) |
% |
|||||||
Operating income |
$ |
8.9 |
$ |
11.3 |
$ |
(2.4) |
(21.2) |
% |
||||
Operating income margin |
7.9 |
% |
7.9 |
% |
Logistics revenue decreased
Logistics operating income decreased
Logistics — Six months ended |
||||||||||||
Six Months Ended |
||||||||||||
(Dollars in millions) |
2020 |
2019 |
Change |
|||||||||
Logistics revenue |
$ |
226.3 |
$ |
277.0 |
$ |
(50.7) |
(18.3) |
% |
||||
Operating costs and expenses |
(212.3) |
(257.6) |
45.3 |
(17.6) |
% |
|||||||
Operating income |
$ |
14.0 |
$ |
19.4 |
$ |
(5.4) |
(27.8) |
% |
||||
Operating income margin |
6.2 |
% |
7.0 |
% |
Logistics revenue decreased
Logistics operating income decreased
Liquidity, Cash Flows and Capital Allocation
Matson's Cash and Cash Equivalents decreased by
Matson's Net Income and EBITDA were
As of
On
On
As previously announced, Matson's Board of Directors declared a cash dividend of
Teleconference and Webcast
A conference call is scheduled for
Date of Conference Call: |
|
Scheduled Time: |
|
Participant Toll Free Dial-In #: |
1-877-312-5524 |
International Dial-In #: |
1-253-237-1144 |
The conference call will be broadcast live along with an additional slide presentation on the Company's website at www.matson.com, under Investors. A replay of the conference call will be available approximately two hours after the call through
About the Company
Founded in 1882,
GAAP to Non-GAAP Reconciliation
This press release, the Form 8-K and the information to be discussed in the conference call include non-GAAP measures. While Matson reports financial results in accordance with
Forward-Looking Statements
Statements in this news release that are not historical facts are "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation those statements regarding earnings, net income, operating income, EBITDA, profitability, the additional CLX vessel charter sailings, operational changes and cost management initiatives, liquidity, tourism, impacts of the COVID-19 pandemic, cash flow expectations and uses of cash and cash flows, operating cost savings, fleet renewal progress, vessel deployments and operating efficiencies, vessel transit times, fuel strategy and scrubber program, organic growth opportunities, economic effects of competitors' services, demand and volume levels in the
MATSON, INC. AND SUBSIDIARIES |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
|
|||||||||||
(In millions, except per share amounts) |
2020 |
2019 |
2020 |
2019 |
||||||||
Operating Revenue: |
||||||||||||
Ocean Transportation |
$ |
410.8 |
$ |
415.4 |
$ |
811.7 |
$ |
813.3 |
||||
Logistics |
113.3 |
142.5 |
226.3 |
277.0 |
||||||||
Total Operating Revenue |
524.1 |
557.9 |
1,038.0 |
1,090.3 |
||||||||
Costs and Expenses: |
||||||||||||
Operating costs |
(426.3) |
(472.8) |
(874.6) |
(939.9) |
||||||||
Income from SSAT |
3.7 |
0.9 |
7.7 |
9.4 |
||||||||
Selling, general and administrative |
(50.3) |
(55.0) |
(106.9) |
(111.3) |
||||||||
Total Costs and Expenses |
(472.9) |
(526.9) |
(973.8) |
(1,041.8) |
||||||||
Operating Income |
51.2 |
31.0 |
64.2 |
48.5 |
||||||||
Interest expense |
(8.2) |
(6.1) |
(16.8) |
(10.7) |
||||||||
Other income (expense), net |
1.5 |
0.8 |
2.1 |
1.4 |
||||||||
Income before Income Taxes |
44.5 |
25.7 |
49.5 |
39.2 |
||||||||
Income taxes |
(11.7) |
(7.3) |
(12.9) |
(8.3) |
||||||||
Net Income |
$ |
32.8 |
$ |
18.4 |
$ |
36.6 |
$ |
30.9 |
||||
Basic Earnings Per Share |
$ |
0.76 |
$ |
0.43 |
$ |
0.85 |
$ |
0.72 |
||||
Diluted Earnings Per Share |
$ |
0.76 |
$ |
0.43 |
$ |
0.85 |
$ |
0.72 |
||||
Weighted Average Number of Shares Outstanding: |
||||||||||||
Basic |
43.1 |
42.8 |
43.0 |
42.8 |
||||||||
Diluted |
43.3 |
43.2 |
43.3 |
43.2 |
MATSON, INC. AND SUBSIDIARIES |
||||||
|
|
|||||
(In millions) |
2020 |
2019 |
||||
ASSETS |
||||||
Current Assets: |
||||||
Cash and cash equivalents |
$ |
19.5 |
$ |
21.2 |
||
Other current assets |
254.1 |
268.4 |
||||
Total current assets |
273.6 |
289.6 |
||||
Long-term Assets: |
||||||
Investment in SSAT |
77.5 |
76.2 |
||||
Property and equipment, net |
1,578.4 |
1,598.1 |
||||
|
327.8 |
327.8 |
||||
Intangible assets, net |
197.5 |
202.9 |
||||
Other long-term assets |
322.8 |
350.8 |
||||
Total long-term assets |
2,504.0 |
2,555.8 |
||||
Total assets |
$ |
2,777.6 |
$ |
2,845.4 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
Current Liabilities: |
||||||
Current portion of debt |
$ |
50.5 |
$ |
48.4 |
||
Other current liabilities |
399.1 |
388.3 |
||||
Total current liabilities |
449.6 |
436.7 |
||||
Long-term Liabilities: |
||||||
Long-term debt, net of deferred loan fees |
823.5 |
910.0 |
||||
Deferred income taxes |
348.8 |
337.6 |
||||
Other long-term liabilities |
340.2 |
355.4 |
||||
Total long-term liabilities |
1,512.5 |
1,603.0 |
||||
Total shareholders' equity |
815.5 |
805.7 |
||||
Total liabilities and shareholders' equity |
$ |
2,777.6 |
$ |
2,845.4 |
MATSON, INC. AND SUBSIDIARIES |
|||||||
Six Months Ended |
|||||||
(In millions) |
2020 |
2019 |
|||||
Cash Flows From Operating Activities: |
|||||||
Net income |
$ |
36.6 |
$ |
30.9 |
|||
Reconciling adjustments: |
|||||||
Depreciation and amortization |
55.6 |
47.5 |
|||||
Amortization of operating lease right of use assets |
35.6 |
33.5 |
|||||
Deferred income taxes |
11.4 |
9.9 |
|||||
Share-based compensation expense |
6.1 |
6.2 |
|||||
Income from SSAT |
(7.7) |
(9.4) |
|||||
Distribution from SSAT |
7.8 |
9.5 |
|||||
Other |
0.5 |
(1.6) |
|||||
Changes in assets and liabilities: |
|||||||
Accounts receivable, net |
(9.3) |
10.8 |
|||||
Deferred dry-docking payments |
(7.6) |
(6.9) |
|||||
Deferred dry-docking amortization |
11.8 |
17.2 |
|||||
Prepaid expenses and other assets |
25.2 |
25.5 |
|||||
Accounts payable, accruals and other liabilities |
14.0 |
(29.6) |
|||||
Operating lease liabilities |
(36.0) |
(33.3) |
|||||
Other long-term liabilities |
(3.4) |
(2.0) |
|||||
Net cash provided by operating activities |
140.6 |
108.2 |
|||||
Cash Flows From Investing Activities: |
|||||||
Capitalized vessel construction expenditures |
(16.5) |
(30.6) |
|||||
Other capital expenditures |
(34.0) |
(38.4) |
|||||
Proceeds from disposal of property and equipment |
15.4 |
2.2 |
|||||
Cash deposits into |
(97.1) |
(26.4) |
|||||
Withdrawals from |
97.1 |
26.4 |
|||||
Net cash used in investing activities |
(35.1) |
(66.8) |
|||||
Cash Flows From Financing Activities: |
|||||||
Proceeds from issuance of debt |
325.5 |
— |
|||||
Repayments of debt |
(192.8) |
(11.8) |
|||||
Proceeds from revolving credit facility |
411.5 |
212.8 |
|||||
Repayments of revolving credit facility |
(612.6) |
(212.8) |
|||||
Payment of financing costs |
(18.5) |
— |
|||||
Proceeds from issuance of capital stock |
0.1 |
— |
|||||
Dividends paid |
(19.1) |
(18.2) |
|||||
Tax withholding related to net share settlements of restricted stock units |
(5.5) |
(3.2) |
|||||
Net cash used in financing activities |
(111.4) |
(33.2) |
|||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash |
(5.9) |
8.2 |
|||||
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period |
28.4 |
24.5 |
|||||
Cash, Cash Equivalents and Restricted Cash, End of the Period |
$ |
22.5 |
$ |
32.7 |
|||
Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: |
|||||||
Cash and Cash Equivalents |
$ |
19.5 |
$ |
24.0 |
|||
Restricted Cash |
3.0 |
8.7 |
|||||
Total Cash, Cash Equivalents and Restricted Cash, End of the Period |
$ |
22.5 |
$ |
32.7 |
|||
Supplemental Cash Flow Information: |
|||||||
Interest paid, net of capitalized interest |
$ |
17.9 |
$ |
7.8 |
|||
Income tax (refunds) and payments, net |
$ |
(21.0) |
$ |
(26.2) |
|||
Non-cash Information: |
|||||||
Capital expenditures included in accounts payable, accruals and other liabilities |
$ |
4.6 |
$ |
3.7 |
|||
Accrued dividends |
$ |
10.0 |
$ |
9.4 |
MATSON, INC. AND SUBSIDIARIES |
|||
NET DEBT RECONCILIATION |
|||
|
|||
(In millions) |
2020 |
||
Total Debt (1): |
$ |
890.0 |
|
Less: Cash and cash equivalents |
(19.5) |
||
Net Debt |
$ |
870.5 |
EBITDA RECONCILIATION |
|||||||||||||
Three Months Ended |
|||||||||||||
|
Last Twelve |
||||||||||||
(In millions) |
2020 |
2019 |
Change |
Months |
|||||||||
Net Income |
$ |
32.8 |
$ |
18.4 |
$ |
14.4 |
$ |
88.4 |
|||||
Add: Income taxes |
11.7 |
7.3 |
4.4 |
29.7 |
|||||||||
Add: Interest expense |
8.2 |
6.1 |
2.1 |
28.6 |
|||||||||
Add: Depreciation and amortization |
27.8 |
24.0 |
3.8 |
107.2 |
|||||||||
Add: Dry-dock amortization |
5.7 |
9.1 |
(3.4) |
28.9 |
|||||||||
EBITDA (2) |
$ |
86.2 |
$ |
64.9 |
$ |
21.3 |
$ |
282.8 |
Six Months Ended |
||||||||||
|
||||||||||
(In millions) |
2020 |
2019 |
Change |
|||||||
Net Income |
$ |
36.6 |
$ |
30.9 |
$ |
5.7 |
||||
Add: Income taxes |
12.9 |
8.3 |
4.6 |
|||||||
Add: Interest expense |
16.8 |
10.7 |
6.1 |
|||||||
Add: Depreciation and amortization |
54.6 |
47.1 |
7.5 |
|||||||
Add: Dry-dock amortization |
11.8 |
17.2 |
(5.4) |
|||||||
EBITDA (2) |
$ |
132.7 |
$ |
114.2 |
$ |
18.5 |
(1) |
Total Debt is presented before any reduction for deferred loan fees as required by GAAP. |
(2) |
EBITDA is defined as the sum of net income plus income taxes, interest expense and depreciation and |
Investor Relations inquiries: |
News Media inquiries: |
|
|
Matson, Inc. |
Matson, Inc. |
510.628.4227 |
510.628.4534 |
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