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 19, 2022 (
(Exact Name of Registrant as Specified in its Charter)
_____________________
|
| |||
(State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification |
| ||
(Address of principal executive offices) | (zip code) |
Registrant’s telephone number, including area code: (
(Former Name or former address, if changed since last report)
_____________________
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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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 19, 2022, Matson, Inc. (the “Company”) issued a press release announcing the Company’s preliminary earnings for the quarter ended June 30, 2022. 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 19, 2022 |
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 2q22 results, provides business update and announces 2q22 earnings call date
| ● | Expects 2Q22 operating income for Ocean Transportation to be $465.0 to $470.0 million |
| ● | Expects 2Q22 operating income for Logistics to be $22.5 to $23.5 million |
| ● | Expects 2Q22 net income and diluted EPS to be $373.3 to $377.9 million and $9.31 to $9.42, respectively |
| ● | Year-over-year increase in consolidated operating income driven by China service strength |
| ● | Repurchased approximately 1.6 million shares in 2Q22 |
| ● | Announces second quarter earnings call date on August 1, 2022 |
HONOLULU, Hawaii (July 19 2022) – 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 will be held on August 1, 2022.
“Matson performed well in the second quarter 2022 with higher year-over-year operating income 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 as volume for e-commerce, garments and other goods remained elevated. The increase in consolidated operating income year-over-year was driven by continued strength in the China service. Currently in the Transpacific tradelane, we are seeing solid demand for our China service as China’s factory production continues to recover from the COVID-19-related supply chain challenges. However, in recent weeks we have seen a gradual decline in the Transpacific freight rate environment off the highs experienced earlier this year. This indicates that rates have likely peaked for now, and, at this time, we expect an orderly marketplace for the remainder of the year with our vessels continuing to operate at or near capacity and earning a significant rate premium to the market because of our differentiated, fast ocean services. To this end, we continue to expect to operate the CCX service through at least the October peak season this year.”
Mr. Cox added, “In our domestic ocean tradelanes, we saw continued strength in Alaska with higher year-over-year volume and softer volumes in Hawaii and Guam compared to the year ago period. In Logistics, operating income increased year-over-year with strength across all of the business lines as we continued to see favorable supply and demand fundamentals in our core markets. As a result, Matson expects second quarter operating income for Ocean Transportation of $465.0 to $470.0 million and Logistics operating income of $22.5 to $23.5 million. We also expect second quarter 2022 net income and diluted EPS to be $373.3 to $377.9 million and $9.31 to $9.42, respectively.”
1
Second Quarter Tradelane Volume (Forty-foot equivalent units (FEU)) (1)(2):
For the three months ended June 30, 2022 compared to the three months ended June 30, 2021 and on a FEU basis:
| ● | Hawaii container volume decreased 1.5 percent primarily due to lower retail-related demand; |
| ● | Alaska volume increased 12.2 percent primarily due to (i) higher northbound volume primarily due to higher retail-related demand and an additional sailing and (ii) higher volume from Alaska-Asia Express (“AAX”); |
| ● | China volume was 11.7 percent higher as a result of 4 more eastbound voyages than the prior year; |
| ● | Guam volume was 7.0 percent lower primarily due to lower retail-related demand; and |
| ● | Other containers volume increased 19.2 percent primarily due to the addition of China-Auckland Express (“CAX”) volume in the South Pacific. |
| (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. |
Liquidity, Debt and Share Repurchases
Matson’s cash and cash equivalents as of June 30, 2022 was approximately $609.0 million. Total debt (presented before any reduction for deferred loan fees as required by GAAP) as of June 30, 2022 was $596.6 million.
During the second quarter of 2022, Matson repurchased approximately 1.6 million shares for a total cost of $138.1 million. As of June 30, 2022, the Company had approximately 1.2 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 August 1, 2022 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: | Monday, August 1, 2022 |
Scheduled Time: | 4:30 p.m. ET / 1:30 p.m. PT / 10:30 a.m. HT |
The conference call will be broadcast live along with an additional slide presentation on the Company’s website at www.matson.com, under Investors.
Particpants may register for the conference call at:
https://register.vevent.com/register/BI50173006aa0245ddae17cd86ba37457f
Registered partipants will receive the conference call dial-in number and a unique PIN code to access the live event. While not required, it is recommended you join 10 minutes prior to the event starting time. A replay of the conference call will be available approximately two hours after the event by accessing the webcast link at www.matson.com, under Investors.
2
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
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, volume level and demand for Matson’s China service, Transpacific freight rates and Matson’s rate premium, duration of CCX service, tourism levels, unemployment rates, economic recovery and drivers in Hawaii, Alaska and Guam, economic conditions in the U.S. and global economies, inflation, and personal income. 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; changes in economic conditions or governmental policies, including from the COVID-19 pandemic; our ability to offer a differentiated service in China for which customers are willing to pay a significant premium; new or increased competition or improvements in competitors’ service levels; our relationship with customers, agents, vendors and partners and changes in related agreements; fuel prices, our ability to collect fuel-related surcharges and/or the cost or limited availability of required fuels; evolving stakeholder expectations related to environmental, social and governance matters; timely or successful completion of fleet upgrade initiatives; the occurrence of poor weather, natural disasters, maritime accidents, spill events and other physical and operating risks, including those arising from climate change; transitional and other risks arising from climate change; the magnitude and timing of the impact of public health crises, including COVID-19; significant operating agreements and leases that may not be replaced on favorable terms; any unanticipated dry-dock or repair expenses; joint venture relationships; conducting business in a foreign shipping market, including the imposition of tariffs or a change in international trade policies; any delays or cost overruns related to the modernization of terminals; war, terrorist attacks or other acts of violence; consummating and integrating acquisitions; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; relations with our unions; satisfactory negotiation and renewal of expired collective bargaining agreements without significant disruption to Matson’s operations; loss of key personnel or failure to adequately manage human capital; the use of our information technology and communication systems and cybersecurity attacks; 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; costs to comply with and liability related to numerous safety, environmental, and other laws and regulations; and disputes, legal and other proceedings and government inquiries or investigations. 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, 2021 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.
3
| 1 Preliminary Second Quarter 2022 Earnings Supplement Second Quarter 2022 Preliminary Earnings Supplement July 19, 2022 |
| 2 Preliminary Second Quarter 2022 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 19, 2022. 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 13 - 24 of our Form 10 - K filed on February 25, 2022 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 2022 Earnings Supplement Preliminary Second Quarter 2022 Results • Matson performed well in 2Q22 with higher year - over - year operating income in both Ocean Transportation and Logistics • Ocean Transportation: – China service continued to see significant demand • Volume for e - commerce, garments and other goods remained elevated • Was the driver in year - over - year increase in 2Q22 consolidated operating income – Higher year - over - year volume in Alaska service; softer volumes in Hawaii and Guam services compared to year ago period • Logistics: – Strength across all business lines – Continued to see favorable supply and demand fundamentals in our core markets • In 2Q22, repurchased 1.6 million shares for a total cost of $138.1 million |
| 4 Preliminary Second Quarter 2022 Earnings Supplement Preliminary Second Quarter 2022 Results (continued) (1) Total debt is presented before any adjustment for deferred loan fees as required by U.S. GAAP. ($ in millions, except per share data) Preliminary Range ($ in millions) INCOME STATEMENT BALANCE SHEET Operating Income Total debt Ocean Transportation $ 201.0 $ 465.0 - $ 470.0 Private placement term loans $ 265.0 Logistics 12.9 22.5 - 23.5 Title XI debt 331.6 Total operating income 213.9 487.5 - 493.5 Revolving credit facility - Total debt (1) $ 596.6 Other income (expense), net 1.5 1.8 - 1.8 Interest expense (5.5) (4.5) - (4.5) Cash and cash equivalents ~ $ 609.0 Income before taxes 209.9 484.8 - 490.8 Income taxes 47.4 111.5 - 112.9 Effective income tax rate 22.6% 23.0% 23.0% Net income $ 162.5 $ 373.3 - $ 377.9 Diluted EPS $ 3.71 $ 9.31 - $ 9.42 Quarter Ended June 30, 2022 Quarter Ended June 30, 2022 Quarter Ended June 30, 2021 |
| 5 Preliminary Second Quarter 2022 Earnings Supplement Current Views on the Transpacific Tradelane • We are seeing solid demand for our China service as China’s factory production continues to recover from the COVID - 19 - related supply chain challenges • However, in recent weeks we have seen a gradual decline in the Transpacific freight rate environment off the highs from earlier in the year – Indicates that rates have likely peaked for now • At this time, expect an orderly marketplace for the remainder of the year with our vessels continuing to operate at or near capacity and earning a significant rate premium to the market because of our differentiated, fast ocean services • We continue to expect to operate the CCX (China - California Express) service through at least the October peak season this year |
| 6 Preliminary Second Quarter 2022 Earnings Supplement Hawaii Service Second Quarter 2022 Performance • Container volume decreased 1.5% YoY primarily due to lower retail - related demand • Continued economic recovery in Hawaii from pandemic, but facing headwinds from a combination of economic effects – Improving Hawaii unemployment rate – Tourism outlook remains strong and expect increasing international tourism arrivals as COVID - 19 wave in Asia recedes – Weakening economic conditions in the U.S. and global economies – High inflation and impact on household costs – Lower personal income with end of pandemic - era stimulus 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 2021 2022 Note : 4Q21 volume figure includes the benefit of a 53 rd week. (1.5)% |
| 7 Preliminary Second Quarter 2022 Earnings Supplement China Service Second Quarter 2022 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 58,000 Q1 Q2 Q3 Q4 2021 2022 Note : CCX service started in 3Q21. 4Q21 volume figure includes the benefit of a 53 rd week. • Container volume increased 11.7% YoY – Total number of eastbound voyages increased by 4 YoY – Demand driven by e - commerce, garments and other goods 11.7% |
| 8 Preliminary Second Quarter 2022 Earnings Supplement Guam Service Second Quarter 2022 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Q1 Q2 Q3 Q4 2021 2022 • Container volume decreased 7.0% YoY primarily due to lower retail - related demand • Economic recovery trajectory in Guam remains uncertain – Expect continued improvement in tourism traffic as the year progresses – High inflation and impact on household costs – Lower personal income with end of pandemic - era stimulus (7.0)% |
| 9 Preliminary Second Quarter 2022 Earnings Supplement Alaska Service Second Quarter 2022 Performance • Container volume increased 12.2% YoY – Higher northbound volume primarily due to higher retail - related demand and an additional sailing – Higher AAX seafood volume • Improving economic trends in Alaska, but economic recovery trajectory remains uncertain – High energy prices spurring exploration and production activity – Resumption of summer tourism – High inflation and impact on household costs – Lower personal income with end of pandemic - era stimulus Container Volume (FEU Basis) 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Q1 Q2 Q3 Q4 2021 2022 Note : 4Q21 volume figure includes the benefit of a 53 rd week. 12.2% |
| 10 Preliminary Second Quarter 2022 Earnings Supplement Matson Logistics Second Quarter 2022 Performance Operating Income $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 Q1 Q2 Q3 Q4 $ in millions 2021 2022 $22.5 to $23.5 million • Operating income of $22.5 to $23.5 million; YoY change of approximately $9.6 to $10.6 million • Higher YoY operating income contributions from all business lines • Benefitted from favorable supply and demand fundamentals in core markets |
