SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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Date of Report (Date of earliest event reported): October 12, 2021 (
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Item 2.02.Results of Operations and Financial Condition.
On October 11, 2021, Matson, Inc. (the “Company”) issued a press release announcing the Company’s preliminary earnings for the quarter ended September 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.
The exhibit listed below is being furnished with this Form 8-K.
Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101).
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.
/s/ Joel M. Wine
Joel M. Wine
Executive Vice President and Chief Financial Officer
Dated: October 12, 2021
Investor Relations inquiries:
News Media inquiries:
FOR IMMEDIATE RELEASE
MATSON announces PRELIMINARY 3q21 results, provides business update and announces 3q21 earnings call date
|●||Expects 3Q21 operating income for Ocean Transportation to be $358.0 to $363.0 million|
|●||Expects 3Q21 operating income for Logistics to be $15.0 to $16.0 million|
|●||Expects 3Q21 net income and diluted EPS to be $277.3 to $285.5 million and $6.39 to $6.58, respectively|
|●||Year-over-year increase in consolidated operating income driven primarily by China service strength|
|●||Domestic tradelane volumes in 3Q21 well above volumes in 3Q20; strong Hawaii volume as tourism and economy rebounds from pandemic lows|
|●||Repurchased approximately 1.5 million shares in 3Q21|
|●||Announces third quarter earnings call date on November 3, 2021|
HONOLULU, Hawaii (October 11, 2021) – Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX) today announces preliminary third quarter financial results, provides a business update and announces that its third quarter earnings call will be held on November 3, 2021.
“The strong economic and business trends we saw in the second quarter continued in the third quarter resulting in solid performance in both Ocean Transportation and Logistics,” said Chairman and Chief Executive Officer Matt Cox. “Within Ocean Transportation, our China service continued to see significant demand for its expedited ocean services, including the new CCX service, as volume for e-commerce, garments and other goods remained elevated heading into the peak season. Continued strong demand for the China service was the primary driver of the increase in consolidated operating income year-over-year. Currently, supply chain congestion continues in the Transpacific tradelane with the combination of inventory restocking, peak season and ongoing elevated consumption trends. We expect these conditions to remain largely in place at least through mid-year 2022.”
Mr. Cox added, “In our domestic ocean tradelanes, we continued to see strong demand with higher year-over-year volumes compared to the largely pandemic-reduced volumes in the third quarter of last year. In Hawaii, we experienced elevated westbound freight demand as the state’s tourism and economy continued to rebound sharply from the pandemic lows, although towards the end of the quarter we experienced a modest negative impact in freight related to the state’s efforts to address the spread of the COVID-19 Delta variant. In Logistics, operating income increased year-over-year compared to the operating income achieved in the year ago period as we continued to see elevated goods consumption, inventory restocking and favorable supply and demand fundamentals in our core markets. As a result, Matson expects third quarter operating income for Ocean Transportation of $358.0 to $363.0 million and Logistics operating income of $15.0 to $16.0 million. We also expect third quarter 2021 net income and diluted EPS to be $277.3 to $285.5 million and $6.39 to $6.58, respectively.”
Third Quarter Tradelane Volume (Forty-foot equivalent units (FEU)) (1)(2):
For the three months ended September 30, 2021 compared to the three months ended September 30, 2020 and on a FEU basis:
|●||Hawaii container volume increased 11.5 percent primarily due to higher retail and hospitality-related demand due to the continued rebound in tourism and the Hawaii economy compared to the volume in the year ago period, which was negatively impacted by the state’s COVID-19 mitigation efforts, including restrictions on tourism;|
|●||Alaska volume increased 10.7 percent due to the addition of volume from the Alaska-Asia Express, higher northbound volume primarily due to an additional sailing and higher retail-related demand, and higher southbound volume;|
|●||China volume was 21.7 percent higher primarily due to CCX volume and volume from an extra loader. The total number of eastbound voyages in the China service increased by 6 year-over-year;|
|●||Guam volume was 14.6 percent higher primarily due to higher retail-related demand compared to the volume in the year ago period; and|
|●||Other containers volume increased 17.4 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.|
During the third quarter of 2021, Matson repurchased approximately 1.5 million shares for a total cost of $115.7 million. As of September 30, 2021, the Company had approximately 1.5 million shares remaining in its share repurchase program.
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 November 3, 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 third quarter results.
Date of Conference Call:
Wednesday, November 3, 2021
4:30 p.m. ET / 1:30 p.m. PT / 10:30 a.m. HT
Participant Toll Free Dial-In #:
International Dial-In #:
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 November 10, 2021 by dialing 1-855-859-2056 or 1-404-537-3406 and using the conference number 4158606. 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.
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 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 North America. 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
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, supply and demand dynamics in the Transpacific tradelane, supply chain congestion, consumption demand conditions, demand for e-commerce, garments and other goods, tourism levels, and economic growth and drivers in Hawaii, Alaska and Guam. 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 required fuels; 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.
1 Preliminary Third Quarter 2021 Earnings Supplement Third Quarter 2021 Preliminary Earnings Supplement October 11, 2021
2 Preliminary Third 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 October 11, 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 Third Quarter 2021 Earnings Supplement Preliminary Third Quarter 2021 Results • Solid performance in Matson’s Ocean Transportation and Logistics businesses – strong economic and business trends in the second quarter continued in the third quarter • China service, including the new China-California Express (CCX), 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 • Transpacific tradelane is currently experiencing supply chain congestion due to a combination of inventory restocking, peak season and ongoing elevated consumption trends – We expect these conditions to remain largely in place at least through mid-year 2022 • Ocean Transportation – China strength – CCX volume and volume from an extra loader – In Hawaii, Alaska and Guam, continued to see strong demand with higher year-over-year volumes compared to the largely pandemic-reduced volumes in 3Q20 • Logistics – Continued to see elevated goods consumption, inventory restocking and favorable supply and demand fundamentals in our core markets • During 3Q21, repurchased 1.5 million shares for a total cost of $116 million
4 Preliminary Third Quarter 2021 Earnings Supplement Preliminary Third Quarter 2021 Results (continued) (1) Total debt is presented before any adjustment for deferred loan fees as required by U.S. GAAP. ($ in millions, except per share data) Preliminary Range ($ in millions) INCOME STATEMENT BALANCE SHEET Operating Income Total debt Ocean Transportation $ 86.5 $ 358.0 - $ 363.0 Private placement term loans $ 302.5 Logistics 11.9 15.0 - 16.0 Title XI debt 344.7 Total operating income 98.4 373.0 - 379.0 Revolving credit facility - Total debt (1) $ 647.2 Other income (expense), net 2.4 1.8 - 1.8 Interest expense (5.7) (5.1) -(5.1) Income before income taxes 95.1 369.7 - 375.7 Income taxes 24.2 92.4 - 90.2 Effective income tax rate 25.4% 25.0% - 24.0% Net income $ 70.9 $ 277.3 - $ 285.5 Diluted EPS $ 1.63 $ 6.39 - $ 6.58 Quarter Ended September 30, 2021 Quarter Ended September 30, 2021 Quarter Ended September 30, 2020
5 Preliminary Third Quarter 2021 Earnings Supplement Hawaii Service Third Quarter 2021 Performance • Container volume increased 11.5% YoY – Higher retail and hospitality-related demand compared to 3Q20, which was negatively impacted by state’s COVID- 19 mitigation efforts – Continued rebound in tourism and Hawaii economy – Towards end of quarter experienced a modest negative impact in freight related to state’s efforts to address COVID-19 Delta variant – After the Governor’s request in late 3Q21 to defer travel plans, visitor traffic to the state softened • 3Q21 volume 10.6% higher than 3Q19 volume • Hawaii economy may experience a brief slowdown in 4Q21 as a result of state’s response to COVID-19 Delta variant 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. 11.5%
6 Preliminary Third Quarter 2021 Earnings Supplement China Service Third 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 53,000 Q1 Q2 Q3 Q4 2020 2021 Note: 2Q 2020 volume figure includes volume related to seven CLX+ voyages. 3Q21 volume figure includes volume related to five CCX voyages. 3Q 2020, 4Q 2020, 1Q 2021, 2Q 2021 and 3Q 2021 volume figures include weekly CLX+ voyages. 21.7% • Container volume increased 21.7% YoY – CCX volume – Volume from an extra loader – Total number of eastbound voyages increased by 6 YoY: 5 from CCX and one extra loader • 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 Third Quarter 2021 Earnings Supplement Guam Service Third 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 14.6% • Container volume increased 14.6% YoY – Higher retail-related demand compared to pandemic-reduced level in year ago period • 3Q21 volume 17.0% higher than 3Q19 volume • Guam economy slowly recovering as tourism remains constrained – Economic recovery trajectory remains uncertain
8 Preliminary Third Quarter 2021 Earnings Supplement Alaska Service Third Quarter 2021 Performance • Container volume increased 10.7% YoY – Addition of Alaska-Asia Express (AAX) seafood volume – Additional northbound sailing – Higher retail-related demand – Higher southbound volume • 3Q21 volume 12.4% higher than 3Q19 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 24,000 Q1 Q2 Q3 Q4 2020 2021 10.7% Note: 1Q 2020 volume figure includes volume related to TOTE’s vessel dry-docking. AAX service started in 4Q20.
9 Preliminary Third Quarter 2021 Earnings Supplement Matson Logistics Third Quarter 2021 Performance Operating Income $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 $ 14.0 $ 16.0 $ 18.0 Q1 Q2 Q3 Q4 $ in millions 2020 2021 $15.0 to $16.0 million • Operating income of $15.0 to $16.0 million; YoY change of approximately $3.1 to $4.1 million • Benefitted from: – Elevated goods consumption and inventory restocking –Favorable supply and demand fundamentals in core markets