UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 8, 2021 (
(Exact Name of Registrant as Specified in its Charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02.Results of Operations and Financial Condition.
On July 8, 2021, Matson, Inc. (the “Company”) issued a press release announcing the Company’s preliminary earnings for the quarter ended June 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1. In addition, the Company posted an investor presentation to its website. A copy of the investor presentation is attached hereto as Exhibit 99.2.
The information in this report (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 9.01.Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits.
The exhibit listed below is being furnished with this Form 8-K.
99.1 | |
99.2 | |
104 | Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MATSON, INC. | |
/s/ Joel M. Wine | |
Joel M. Wine | |
Executive Vice President and Chief Financial Officer | |
Dated: July 8, 2021 |
Exhibit 99.1
Investor Relations inquiries: | News Media inquiries: |
Lee Fishman | Keoni Wagner |
Matson, Inc. | Matson, Inc. |
510.628.4227 | 510.628.4534 |
lfishman@matson.com | kwagner@matson.com |
FOR IMMEDIATE RELEASE
MATSON announces PRELIMINARY 2q21 results, provides business update and announces 2q21 earnings call date
| ● | Expects 2Q21 operating income for Ocean Transportation to be $197.0 to $202.0 million vs. $42.3 million in 2Q20 |
| ● | Expects 2Q21 operating income for Logistics to be $12.0 to $13.0 million vs. $8.9 million in 2Q20 |
| ● | Expects 2Q21 net income and diluted EPS to be $156.9 to $163.6 million and $3.58 to $3.73, respectively |
| ● | Year-over-year increase in consolidated operating income driven primarily by China service strength |
| ● | Domestic tradelane volumes in 2Q21 well above pandemic low volumes in 2Q20; strong Hawaii volume as tourism and economy rebounds from pandemic lows |
| ● | Announces second quarter earnings call date on July 29, 2021 |
HONOLULU, Hawaii (July 8, 2021) – Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX) today announces preliminary second quarter financial results, provides a business update and announces that its second quarter earnings call date will be held on July 29, 2021.
“Matson’s Ocean Transportation and Logistics businesses continued to perform well in the second quarter as the U.S. economy further recovers from the pandemic,” said Chairman and Chief Executive Officer Matt Cox. “Within Ocean Transportation, our China service continued to see significant demand for its expedited CLX and CLX+ ocean services as volume for e-commerce, garments and other goods remained elevated, and was the primary driver of the increase in consolidated operating income year-over-year. Currently in the Transpacific tradelane, supply chain congestion continues, and consumption trends remain elevated. We expect these conditions to remain in place and lead to a high level of demand at least until Lunar New Year in the first quarter of 2022. As a result of the exceptional level of demand for our expedited Transpacific services, we recently announced the initiation of our CCX service as a seasonal string with Matson-owned vessels from China to the U.S. West Coast with Oakland as the first call. Consequently, we expect our vessels in the CLX, CLX+ and CCX to be operating at capacity at least until Lunar New Year next year.”
Mr. Cox added, “In our domestic ocean tradelanes, we continued to see strong demand as the local economies further reopen with meaningfully higher year-over-year volumes compared to the pandemic volume lows in the second quarter of last year. In Hawaii, we experienced elevated westbound freight demand as the state’s tourism and economy rebounded sharply from the pandemic lows. In Logistics, operating income increased year-over-year compared to the pandemic low operating income achieved in the year ago period as we continued to see elevated goods consumption and inventory restocking in addition to favorable supply and demand fundamentals in our core markets. As a result, Matson expects second quarter operating income for Ocean Transportation of $197.0 to $202.0 million and Logistics operating income of $12.0 to $13.0 million. We also expect second quarter 2021 net income and diluted EPS to be $156.9 to $163.6 million and $3.58 to $3.73, respectively.”
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Second Quarter Tradelane Volume (Forty-foot equivalent units (FEU)) (1)(2):
For the three months ended June 30, 2021 compared to the three months ended June 30, 2020 and on a FEU basis:
| ● | Hawaii container volume increased 9.9 percent primarily due to higher retail and hospitality-related demand due to the reopening of the Hawaii economy compared to the pandemic low in the year ago period as a result of the state’s COVID-19 mitigation efforts, including restrictions on tourism; |
| ● | Alaska volume increased 15.2 percent due to higher northbound volume primarily due to higher retail-related demand compared to the pandemic low in the year ago period as a result of the state’s COVID-19 mitigation efforts, higher southbound volume and the addition of volume from the Alaska-to-Asia Express service; |
| ● | China volume was 59.1 percent higher primarily due to incremental volume from the CLX+ service in addition to higher volume in the CLX service as a result of our increased capacity in the tradelane. The total number of eastbound voyages in the China service increased by nine year-over-year; |
| ● | Guam volume was 35.7 percent higher primarily due to higher retail-related demand compared to the pandemic low in the year ago period as a result of the island’s COVID-19 mitigation measures as well as volume attritutable to a competitor’s schedule issues; and |
| ● | Other containers volume increased 33.3 percent primarily due to higher volume in Okinawa. |
| (1) | Approximate volumes included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period. |
| (2) | Other containers includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Subsequent Event
On July 7, 2021, a subsidiary of Matson entered into an agreement to terminate the outstanding operating lease on the Maunalei for approximately $95.8 million including accrued lease interest, thereby acquiring the vessel. The Company paid for the termination with a combination of cash on hand and borrowings on the revolving credit facility. As a result of the transaction, the Company expects approximately $6.0 million in lower cash operating costs in the second half of 2021 as a result of the elimination in lease expense.
A slide presentation that accompanies this press release is available on the Company's website at www.matson.com, under Investors.
Teleconference and Webcast
A conference call is scheduled on July 29, 2021 at 4:30 p.m. ET when Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Executive Vice President and Chief Financial Officer, will discuss Matson’s second quarter results.
Date of Conference Call: | Thursday, July 29, 2021 |
Scheduled Time: | 4:30 p.m. ET / 1:30 p.m. PT / 10:30 a.m. HT |
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 August 5, 2021 by dialing 1-855-859-2056 or 1-404-537-3406 and using the conference number 6564633. The slides and audio webcast of the conference call will be archived for one full quarter on the Company's website at www.matson.com, under Investors.
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About the Company
Founded in 1882, Matson (NYSE: MATX) is a leading provider of ocean transportation and logistics services. Matson provides a vital lifeline to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, and to other island economies in Micronesia. Matson also operates two premium, expedited services from China to Long Beach, California, provides service to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Dutch Harbor to Asia. The Company's fleet of owned and chartered vessels includes containerships, combination container and roll-on/roll-off ships and custom-designed barges. Matson Logistics, established in 1987, extends the geographic reach of Matson’s transportation network throughout the continental U.S. Its integrated, asset-light logistics services include rail intermodal, highway brokerage, warehousing, freight consolidation, Asia supply chain services, and forwarding to Alaska. Additional information about the Company is available at www.matson.com.
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 performance and financial results, operating income, net income, earnings per share, demand for our expedited Transpacific services, seasonality of the CCX service, supply and demand dynamics in the Transpacific tradelane, supply chain congestion, consumption trends, demand for e-commerce, garments and other goods, tourism levels, economic growth and drivers in Hawaii, Alaska and Guam, and the financial effects of the Maunalei transaction. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement, including but not limited to risks and uncertainties relating to repeal, substantial amendment or waiver of the Jones Act or its application, or our failure to maintain our status as a United States citizen under the Jones Act; regional, national and international economic conditions; new or increased competition or improvements in competitors’ service levels; fuel prices, our ability to collect fuel-related surcharges and/or the cost or limited availability of low-sulfur fuel; delays or cost overruns related to the installation of scrubbers; our relationship with vendors, customers and partners and changes in related agreements; the actions of our competitors; our ability to offer a differentiated service in China for which customers are willing to pay a significant premium; the imposition of tariffs or a change in international trade policies; the magnitude and timing of the impact of public health crises, including COVID-19; any unanticipated dry-dock or repair expenses; any delays or cost overruns related to the modernization of terminals; consummating and integrating acquisitions; changes in general economic and/or industry-specific conditions; competition and growth rates within the logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; changes in relationships with existing truck, rail, ocean and air carriers; changes in customer base due to possible consolidation among customers; conditions in the financial markets; changes in our credit profile and our future financial performance; our ability to obtain future debt financings; continuation of the Title XI and CCF programs; the impact of future and pending legislation and regulations, including regulations related to greenhouse gas emissions and other environmental laws and regulations; government regulations and investigations; relations with our unions; satisfactory negotiation and renewal of expired collective bargaining agreements without significant disruption to Matson’s operations; war, terrorist attacks or other acts of violence; the use of our information technology and communication systems and cybersecurity attacks; and the occurrence of marine accidents, poor weather or natural disasters. These forward-looking statements are not guarantees of future performance. This release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 and our other filings with the SEC through the date of this release, which identify important factors that could affect the forward-looking statements in this release. We do not undertake any obligation to update our forward-looking statements.
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Exhibit 99.2
| 1 Preliminary Second Quarter 2021 Earnings Supplement Second Quarter 2021 Preliminary Earnings Supplement July 8, 2021 |
| 2 Preliminary Second Quarter 2021 Earnings Supplement Forward-Looking Statements Statements made during this presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of July 8, 2021. We believe that our expectations and assumptions are reasonable. Actual results may differ materially, due to risks and uncertainties, such as those described on pages 12-21 of our Form 10-K filed on February 26, 2021 and other subsequent filings by Matson with the SEC. Statements made during this presentation are not guarantees of future performance. We do not undertake any obligation to update our forward-looking statements. |
| 3 Preliminary Second Quarter 2021 Earnings Supplement Preliminary Second Quarter 2021 Results • Matson’s Ocean Transportation and Logistics businesses continued to perform well as the U.S. economy further recovers from the pandemic • China service, consisting of CLX and CLX+, continued to see significant demand – Volume for e-commerce, garments and other goods remained elevated – Was the primary driver of the increase in consolidated operating income year-over-year • We expect supply chain congestion and elevated consumption trends in the Transpacific tradelane to remain in place and lead to a high level of demand at least until Lunar New Year in the first quarter of 2022 – We announced on June 7, 2021 the initiation of our CCX service as a seasonal string with Matson-owned vessels from China to the U.S. West Coast with Oakland as the first call • Will offer departures from Ningbo and Shanghai three times out of every five weeks – We expect our vessels in the CLX, CLX+ and CCX to be operating at capacity at least until Lunar New Year next year • Ocean Transportation – China strength – CLX+ voyages and increased capacity in the CLX service – In Hawaii, Alaska and Guam, continued to see strong demand as the local economies further reopen with meaningfully higher year-over-year volumes compared to the pandemic volume lows in 2Q20 • Logistics – Continued to see elevated goods consumption and inventory restocking in addition to favorable supply and demand fundamentals in our core markets |
| 4 Preliminary Second Quarter 2021 Earnings Supplement Preliminary Second Quarter 2021 Results (continued) (1) Total debt is presented before any adjustment for deferred loan fees as required by U.S. GAAP. |
| 5 Preliminary Second Quarter 2021 Earnings Supplement Hawaii Service Second Quarter 2021 Performance • Container volume increased 9.9% YoY – Higher retail and hospitality-related demand due to the reopening of the Hawaii economy versus the pandemic lows in the year ago period • 2Q21 volume 5.6% higher than 2Q19 volume • Sharp recovery in Hawaii tourism leading to rebound in state’s economy – Unemployment remains elevated, but improving with increased tourism and local businesses reopening – Economic recovery on a cautiously optimistic trajectory due to improving tourism trends Container Volume (FEU Basis) 25,000 27,000 29,000 31,000 33,000 35,000 37,000 39,000 41,000 Q1 Q2 Q3 Q4 2020 2021 Note: 2Q 2020 volume figure includes volume related to Pasha’s vessel dry-docking. 9.9% |
| 6 Preliminary Second Quarter 2021 Earnings Supplement China Service Second Quarter 2021 Performance Container Volume (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 48,000 Q1 Q2 Q3 Q4 2020 2021 Note: 2Q 2020 volume figure includes volume related to seven CLX+ voyages. 3Q 2020, 4Q 2020, 1Q 2021 and 2Q 2021 volume figures include weekly CLX+ voyages. 59.1% • Container volume increased 59.1% YoY – Incremental volume on the CLX+ – Higher volume on the CLX due to increased capacity – Total number of eastbound voyages increased by 9 YoY of which 6 from CLX+ and 3 from extra loaders • Demand driven by e-commerce, garments and other goods – Sustained and elevated consumption trends and low inventory levels driving increased demand for expedited ocean services |
| 7 Preliminary Second Quarter 2021 Earnings Supplement Guam Service Second Quarter 2021 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Q1 Q2 Q3 Q4 2020 2021 35.7% • Container volume increased 35.7% YoY – Higher retail-related demand compared to pandemic low in year ago period – Benefitted partly from competitor’s schedule issues • 2Q21 volume 18.8% higher than 2Q19 volume • Guam economy slowly recovering as tourism remains constrained – Economic recovery trajectory remains uncertain |
| 8 Preliminary Second Quarter 2021 Earnings Supplement Alaska Service Second Quarter 2021 Performance • Container volume increased 15.2% YoY – Higher northbound volume compared to pandemic low in year ago period • Elevated demand for retail-related goods – Higher southbound volume – Addition of AAX volume • 2Q21 volume 4.8% higher than 2Q19 volume • Improving economic trends in Alaska, but economic recovery trajectory remains uncertain Container Volume (FEU Basis) 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Q1 Q2 Q3 Q4 2020 2021 15.2% Note: 1Q 2020 volume figure includes volume related to TOTE’s vessel dry-docking. |
| 9 Preliminary Second Quarter 2021 Earnings Supplement Matson Logistics Second Quarter 2021 Performance Operating Income $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 $ 14.0 Q1 Q2 Q3 Q4 $ in millions 2020 2021 $12.0 to $13.0 million • Operating income of $12.0 to $13.0 million; YoY change of approximately $3.1 to $4.1 million • Benefitted from: – Elevated goods consumption and inventory restocking – Tight supply and demand fundamentals in core markets |
