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): November 2, 2022 (
(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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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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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 November 2, 2022, Matson, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the quarter ended September 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 | Press Release issued by Matson, Inc., dated November 2, 2022 |
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: November 2, 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, INC. ANNOUNCES THIRD QUARTER 2022 RESULTS
| ● | 3Q22 EPS of $6.89 |
| ● | 3Q22 Net Income and EBITDA of $266.0 million and $377.4 million, respectively |
| ● | Year-over-year decrease in consolidated operating income driven primarily by lower volume in China service |
| ● | Repurchased approximately 1.1 million shares in 3Q22 |
| ● | Signed $1 billion in vessel construction contracts for three new LNG-ready Aloha Class containerships |
HONOLULU, Hawaii (November 2, 2022) – Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX), a leading U.S. carrier in the Pacific, today reported net income of $266.0 million, or $6.89 per diluted share, for the quarter ended September 30, 2022. Net income for the quarter ended September 30, 2021 was $283.2 million, or $6.53 per diluted share. Consolidated revenue for the third quarter 2022 was $1,114.8 million compared with $1,071.6 million for the third quarter 2021.
“Matson’s differentiated ocean services performed well in the third quarter 2022, but the Company achieved lower year-over-year consolidated operating income as we saw lower demand for expedited ocean services in the Transpacific tradelane compared to the high levels of freight demand during the pandemic in the year ago period,” said Chairman and Chief Executive Officer Matt Cox. “Within Ocean Transportation, our CLX, CLX+ and CCX services achieved lower year-over-year volumes which contributed to the decline in our consolidated operating income. As we mentioned on our second quarter earnings call, we believed rates had likely peaked in the Transpacific tradelane for this cycle and would be in a transitional decline from the pandemic highs. Additionally, due to less demand for expedited ocean services and easing port congestion in Southern California, we decided to end our temporary CCX service in early September, about six weeks earlier than expected. Currently, we expect the next two quarters to be challenging in the Transpacific tradelane as retailers’ inventories adjust to current consumer demand levels and as ocean liners reduce vessel capacity to meet lower demand levels. To this end, for the remainder of this year and into the first quarter of 2023, we expect to experience lower year-over-year freight demand and a lower rate environment for our CLX and CLX+ services, but we expect to continue to earn a significant rate premium to the Shanghai Containerized Freight Index due to its differentiated, reliable and fast ocean services.”
Mr. Cox added, “In our domestic ocean tradelanes, we saw continued strength in Alaska with higher year-over-year volume and lower volumes in Hawaii and Guam compared to the year ago period. The year-over-year decline in Hawaii volume was impacted by the pandemic spike in demand experienced in the year ago period, and volumes for the quarter were higher than the pre-pandemic third quarter of 2019. 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.”
“Yesterday, we signed $1 billion in vessel construction contracts for three new LNG-ready Aloha Class containerships,” said Mr. Cox. “We currently anticipate the delivery of the first vessel to be in the fourth quarter of 2026 with subsequent deliveries in 2027. These Jones Act vessels will be built specifically for our CLX service with state-of-the-art green technology features and a fuel-efficient hull design, and are expected to help Matson achieve its 2030 greenhouse gas
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emissions goal. These vessels will also bring additional capacity to the CLX when placed into service, and we expect the additional capacity to be a meaningful contributor to net income, consolidated operating income and EBITDA.”
Third Quarter 2022 Discussion and Update on Business Conditions
Ocean Transportation: The Company’s container volume in the Hawaii service in the third quarter 2022 was 7.1 percent lower year-over-year. The decrease was primarily due to lower retail-related demand as compared to the pandemic spike in demand experienced in the year ago period. During the quarter, the Company saw continued improvement in the Hawaii economy supported by a low unemployment rate and strong tourist arrivals, including an improvement in international tourist trends. In the near-term, Matson expects continued economic growth in Hawaii supported by a relatively tight labor market and increasing tourism traffic, but there are also negative trends from a combination of economic effects that create uncertainty in the economic growth trajectory. These negative trends include weakening economic conditions in the U.S. and global economies and lower household discretionary income as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income.
In China, the Company’s container volume in the third quarter 2022 decreased 15.1 percent year-over-year. The decrease was primarily due to (i) lower demand for the CLX, CLX+ and CCX services and (ii) one less sailing. Matson continued to realize a significant rate premium over the Shanghai Containerized Freight Index (“SCFI”) in the third quarter 2022 and achieved average freight rates that were higher than in the year ago period, but below the pandemic high freight rates achieved earlier this year. With less demand for expedited ocean services and easing port congestion in Southern California, the Company ended its temporary CCX service in early September, about six weeks earlier than expected. Currently, the Company expects the next two quarters to be challenging in the Transpacific tradelane as retailers’ inventories adjust to current consumer demand levels and as ocean liners reduce vessel capacity to meet lower demand levels. To this end, for the remainder of this year and into the first quarter of 2023, the Company expects to experience lower year-over-year freight demand and a lower rate environment for its CLX and CLX+ services, but Matson expects to continue to earn a significant rate premium to the SCFI due to its differentiated, reliable and fast ocean services.
In Guam, the Company’s container volume in the third quarter 2022 decreased 1.8 percent year-over-year primarily due to lower retail-related demand. In the near-term, the Company expects the Guam economy to continue to benefit from a recovery in tourism, but there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that creates uncertainty in the economic growth trajectory.
In Alaska, the Company’s container volume for the third quarter 2022 increased 10.6 percent year-over-year primarily due to (i) higher export seafood volume from Alaska-Asia Express (“AAX”), (ii) higher northbound volume primarily due to higher retail-related demand and volume related to a competitor’s dry-docking and (iii) higher southbound volume primarily due to higher domestic seafood volume. In the near-term, the Company expects the Alaska economy to benefit from increased energy-related exploration and production activity as a result of elevated oil prices, but there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that creates uncertainty in the economic growth trajectory.
The contribution in the third quarter 2022 from the Company’s SSAT joint venture investment was $23.4 million, or $10.4 million higher than the third quarter 2021. The increase was primarily driven by higher other terminal revenue.
Logistics: In the third quarter 2022, operating income for the Company’s Logistics segment was $20.1 million, or $4.1 million higher compared to the level achieved in the third quarter 2021. The increase was due primarily to higher contributions from all services as the Company continued to see favorable supply and demand fundamentals in its core markets.
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Results By Segment
Ocean Transportation — Three months ended September 30, 2022 compared with 2021
| | Three Months Ended September 30, |
| |||||||||
(Dollars in millions) |
| 2022 |
| 2021 |
| Change |
| |||||
Ocean Transportation revenue | | $ | 918.5 | | $ | 863.5 | | $ | 55.0 | | 6.4 | % |
Operating costs and expenses | |
| (603.3) | |
| (501.6) | |
| (101.7) | | 20.3 | % |
Operating income | | $ | 315.2 | | $ | 361.9 | | $ | (46.7) | | (12.9) | % |
Operating income margin | |
| 34.3 | % |
| 41.9 | % |
| | | | |
| | | | | | | | | | | | |
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) | | | | | | | | | | | | |
Hawaii containers | |
| 37,700 | |
| 40,600 | |
| (2,900) | | (7.1) | % |
Hawaii automobiles | |
| 11,300 | |
| 12,600 | |
| (1,300) | | (10.3) | % |
Alaska containers | |
| 24,100 | |
| 21,800 | |
| 2,300 | | 10.6 | % |
China containers | |
| 39,500 | |
| 46,500 | |
| (7,000) | | (15.1) | % |
Guam containers | |
| 5,400 | |
| 5,500 | |
| (100) | | (1.8) | % |
Other containers (2) | |
| 6,000 | |
| 5,400 | |
| 600 | | 11.1 | % |
| (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) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue increased $55.0 million, or 6.4 percent, during the three months ended September 30, 2022, compared with the three months ended September 30, 2021. The increase was primarily due to higher fuel-related surcharge revenue, higher average freight rates in China and higher volume in Alaska, partially offset by lower volume in China and Hawaii.
On a year-over-year FEU basis, Hawaii container volume decreased 7.1 percent primarily due to lower retail-related volume; Alaska volume increased 10.6 percent primarily due to (i) higher export seafood volume from AAX, (ii) higher northbound volume primarily due to higher retail-related demand and volume related to a competitor’s dry-docking and (iii) higher southbound volume primarily due to higher domestic seafood volume; China volume was 15.1 percent lower primarily due to lower demand for the CLX, CLX+ and CCX services and one less sailing; Guam volume was 1.8 percent lower primarily due to lower retail-related demand; and Other containers volume increased 11.1 percent.
Ocean Transportation operating income decreased $46.7 million during the three months ended September 30, 2022, compared with the three months ended September 30, 2021. The decrease was primarily due to lower volume in China, higher operating costs and expenses primarily due to the CLX+ service, and higher fuel-related expenses, partially offset by higher average freight rates in China and a higher contribution from SSAT.
The Company’s SSAT terminal joint venture investment contributed $23.4 million during the three months ended September 30, 2022, compared to a contribution of $13.0 million during the three months ended September 30, 2021. The increase was primarily driven by higher other terminal revenue.
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Ocean Transportation — Nine months ended September 30, 2022 compared with 2021
| | Nine Months Ended September 30, |
| |||||||||
(Dollars in millions) |
| 2022 |
| 2021 |
| Change |
| |||||
Ocean Transportation revenue | | $ | 2,911.6 | | $ | 2,106.9 | | $ | 804.7 | | 38.2 | % |
Operating costs and expenses | |
| (1,710.2) | |
| (1,429.9) | |
| (280.3) | | 19.6 | % |
Operating income | | $ | 1,201.4 | | $ | 677.0 | | $ | 524.4 | | 77.5 | % |
Operating income margin | |
| 41.3 | % |
| 32.1 | % | | | | | |
| | | | | | | | | | | | |
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) | | | | | | | | | | | | |
Hawaii containers | |
| 112,400 | |
| 116,100 | | | (3,700) | | (3.2) | % |
Hawaii automobiles | |
| 30,500 | |
| 36,000 | | | (5,500) | | (15.3) | % |
Alaska containers | |
| 67,000 | |
| 58,800 | | | 8,200 | | 13.9 | % |
China containers | |
| 134,800 | |
| 131,200 | | | 3,600 | | 2.7 | % |
Guam containers | |
| 16,200 | |
| 16,200 | | | — | | 0.0 | % |
Other containers (2) | |
| 17,500 | |
| 14,600 | | | 2,900 | | 19.9 | % |
| (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) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue increased $804.7 million, or 38.2 percent, during the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021. The increase was primarily due to higher revenue in China, higher fuel-related surcharge revenue, and higher revenue in Alaska. The higher revenue in China was primarily due to considerably higher average freight rates and higher volume. The higher revenue in Alaska was primarily the result of higher volume.
On a year-over-year FEU basis, Hawaii container volume decreased 3.2 percent primarily due to lower retail-related demand; Alaska volume increased 13.9 percent primarily due to (i) higher northbound volume primarily due to higher retail-related demand and volume related to a competitor’s dry-docking, (ii) higher export seafood volume from AAX and (iii) higher southbound volume primarily due to higher domestic seafood volume; China volume was 2.7 percent higher as a result of seven more eastbound voyages than the prior year; Guam volume was flat; and Other containers volume increased 19.9 percent primarily due to the addition of China-Auckland Express volume in the South Pacific.
Ocean Transportation operating income increased $524.4 million during the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021. The increase was primarily due to considerably higher average freight rates and higher volume in China and a higher contribution from SSAT, partially offset by higher operating costs and expenses primarily due to the CLX+ and CCX services and higher fuel-related expenses.
The Company’s SSAT terminal joint venture investment contributed $82.1 million during the nine months ended September 30, 2022, compared to a contribution of $35.0 million during the nine months ended September 30, 2021. The increase was primarily driven by higher other terminal revenue.
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Logistics — Three months ended September 30, 2022 compared with 2021
| | Three Months Ended September 30, |
| |||||||||
(Dollars in millions) |
| 2022 |
| 2021 |
| Change |
| |||||
Logistics revenue | | $ | 196.3 | | $ | 208.1 | | $ | (11.8) | | (5.7) | % |
Operating costs and expenses | |
| (176.2) | |
| (192.1) | |
| 15.9 | | (8.3) | % |
Operating income | | $ | 20.1 | | $ | 16.0 | | $ | 4.1 | | 25.6 | % |
Operating income margin | |
| 10.2 | % |
| 7.7 | % | | | | | |
Logistics revenue decreased $11.8 million, or 5.7 percent, during the three months ended September 30, 2022, compared with the three months ended September 30, 2021. The decrease was primarily due to lower transportation brokerage revenue, partially offset by higher revenue in freight forwarding, warehousing and supply chain management.
Logistics operating income increased $4.1 million, or 25.6 percent, during the three months ended September 30, 2022, compared with the three months ended September 30, 2021. The increase was primarily due to higher contributions from all services.
Logistics — Nine months ended September 30, 2022 compared with 2021
| | Nine Months Ended September 30, |
| |||||||||
(Dollars in millions) |
| 2022 |
| 2021 |
| Change |
| |||||
Logistics revenue | | $ | 629.8 | | $ | 551.4 | | $ | 78.4 | | 14.2 | % |
Operating costs and expenses | |
| (570.2) | |
| (516.4) | |
| (53.8) | | 10.4 | % |
Operating income | | $ | 59.6 | | $ | 35.0 | | $ | 24.6 | | 70.3 | % |
Operating income margin | |
| 9.5 | % |
| 6.3 | % | | | | | |
Logistics revenue increased $78.4 million, or 14.2 percent, during the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021. The increase was primarily due to higher transportation brokerage revenue.
Logistics operating income increased $24.6 million, or 70.3 percent, during the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021. The increase was primarily due to higher contributions from all services.
Liquidity, Cash Flows and Capital Allocation
During the third quarter of 2022, Matson deposited $565.0 million in cash to the Capital Construction Fund (“CCF”). Matson’s Cash and Cash Equivalents decreased by $39.6 million from $282.4 million at December 31, 2021 to $242.8 million at September 30, 2022, which excludes the aforementioned cash deposited into the CCF. Matson generated net cash from operating activities of $1,102.5 million during the nine months ended September 30, 2022, compared to $583.3 million during the nine months ended September 30, 2021. Capital expenditures totaled $113.4 million for the nine months ended September 30, 2022, compared with $244.7 million for the nine months ended September 30, 2021. Total debt decreased by $97.2 million during the nine months to $531.8 million as of September 30, 2022, of which $474.5 million was classified as long-term debt. During the third quarter of 2022, Matson prepaid $50.4 million of outstanding principal on the 4.16% Prudential Series C-2 notes due 2027 and the 4.31% Prudential Series C-3 notes due 2032, which represented all of the remaining principal outstanding for both notes. As of September 30, 2022 Matson had available borrowings under its revolving credit facility of $642.2 million.
During the third quarter 2022, Matson repurchased approximately 1.1 million shares for a total cost of $88.4 million. As of September 30, 2022, the Company had approximately 3.0 million shares remaining in its share repurchase program.
On November 1, 2022, Matson Navigation Company, Inc., a wholly-owned subsidiary of Matson, signed vessel construction agreements with Philly Shipyard, Inc. for three new LNG-ready Aloha Class containerships. Each of the new 3,600 TEU vessels is expected to provide 500 containers of additional capacity per voyage in the CLX service. The
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contract cost of this new Jones Act vessel program is expected to be approximately $1 billion, and delivery of the first vessel is currently anticipated to be in the fourth quarter of 2026 with subsequent deliveries in the second and fourth quarters of 2027. Upon signing the agreements, the Company made its first milestone payment of $50 million from the CCF. The Company expects to finance the remaining construction-related payments with cash currently on deposit in the CCF, cash and cash equivalents on the balance sheet and through cash flows from operations, borrowings available under the Company’s unsecured revolving credit facility and additional debt financings.
As previously announced, Matson’s Board of Directors declared a cash dividend of $0.31 per share payable on December 1, 2022 to all shareholders of record as of the close of business on November 10, 2022.
Teleconference and Webcast
A conference call is scheduled on November 2, 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 third quarter results.
Date of Conference Call: | Wednesday, November 2, 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.
Participants may register for the conference call at:
https://register.vevent.com/register/BId470887075974c638c7f980ef087a60f
Registered participants 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.
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.
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 U.S. generally accepted accounting principles (“GAAP”), the Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur and service debt and to make capital expenditures, and to understand period-over-period operating results separate and apart from items that may, or could, have a disproportional positive or negative impact on results in any particular period. These non-GAAP measures include, but are not limited to, Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) and Net Debt.
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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, cash flow expectations and uses of cash and cash flow, Transpacific freight rates and Matson’s rate premium, volume levels and demand for Matson’s CLX and CLX+ services, tourism levels, unemployment rates, energy-related exploration and production activity, economic drivers in Hawaii, Alaska and Guam, economic conditions in the U.S. and global economies, inflation, interest rates, personal and discretionary income, rail services, new vessel program and its contributions to net income, operating income and EBITDA, new vessel delivery dates, fleet capacity and efficiency, new vessel speeds, capital expenditures, the costs and timing of liquified natural gas installations on certain vessels, achievement of greenhouse gas emissions reductions goals, fleet deployments, vessel transit times, organic growth opportunities, timing and amount of contribution to Capital Construction Fund (“CCF”), timing and amount of federal and state cash tax savings, new vessel financing, and share repurchase activity. 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; the occurrence of any event, change or other circumstances that could give rise to the termination of the new vessel construction agreements; the ability of the shipyard to construct and deliver the Aloha class vessels; 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.
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MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
| | Three Months Ended |
| Nine Months Ended | ||||||||
| | September 30, |
| September 30, | ||||||||
(In millions, except per share amounts) |
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||
Operating Revenue: | | | | | | | | | | | | |
Ocean Transportation | | $ | 918.5 | | $ | 863.5 | | $ | 2,911.6 | | $ | 2,106.9 |
Logistics | |
| 196.3 | |
| 208.1 | |
| 629.8 | |
| 551.4 |
Total Operating Revenue | |
| 1,114.8 | |
| 1,071.6 | |
| 3,541.4 | |
| 2,658.3 |
| | | | | | | | | | | | |
Costs and Expenses: | | | | | | | | | | | | |
Operating costs | |
| (738.4) | |
| (649.3) | |
| (2,170.5) | |
| (1,809.6) |
Income from SSAT | |
| 23.4 | |
| 13.0 | |
| 82.1 | |
| 35.0 |
Selling, general and administrative | |
| (64.5) | |
| (57.4) | |
| (192.0) | |
| (171.7) |
Total Costs and Expenses | |
| (779.5) | |
| (693.7) | |
| (2,280.4) | |
| (1,946.3) |
| | | | | | | | | | | | |
Operating Income | |
| 335.3 | |
| 377.9 | |
| 1,261.0 | |
| 712.0 |
Interest income | | | 1.3 | | | — | | | 1.3 | | | — |
Interest expense | |
| (5.0) | |
| (5.1) | |
| (14.3) | |
| (17.9) |
Other income (expense), net | |
| 2.5 | |
| 1.8 | |
| 6.3 | |
| 4.7 |
Income before Taxes | |
| 334.1 | |
| 374.6 | |
| 1,254.3 | |
| 698.8 |
Income taxes | |
| (68.1) | |
| (91.4) | |
| (268.4) | |
| (165.9) |
Net Income | | $ | 266.0 | | $ | 283.2 | | $ | 985.9 | | $ | 532.9 |
| | | | | | | | | | | | |
Basic Earnings Per Share | | $ | 6.95 | | $ | 6.60 | | $ | 24.83 | | $ | 12.31 |
Diluted Earnings Per Share | | $ | 6.89 | | $ | 6.53 | | $ | 24.65 | | $ | 12.19 |
| | | | | | | | | | | | |
Weighted Average Number of Shares Outstanding: | | | | | | | | | | | | |
Basic | |
| 38.3 | |
| 42.9 | |
| 39.7 | |
| 43.3 |
Diluted | |
| 38.6 | |
| 43.4 | |
| 40.0 | |
| 43.7 |
8
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
|
| September 30, |
| December 31, | ||
(In millions) | | 2022 | | 2021 | ||
ASSETS | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 242.8 | | $ | 282.4 |
Other current assets | |
| 631.7 | |
| 422.1 |
Total current assets | |
| 874.5 | |
| 704.5 |
Long-term Assets: | | | | | | |
Investment in SSAT | |
| 87.2 | |
| 58.7 |
Property and equipment, net | |
| 1,907.4 | |
| 1,878.3 |
Goodwill | |
| 327.8 | |
| 327.8 |
Intangible assets, net | |
| 178.0 | |
| 181.1 |
Capital Construction Fund | |
| 565.0 | |
| — |
Other long-term assets | |
| 519.1 | |
| 542.7 |
Total long-term assets | | | 3,584.5 | | | 2,988.6 |
Total assets | | $ | 4,459.0 | | $ | 3,693.1 |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
Current Liabilities: | | | | | | |
Current portion of debt | | $ | 57.3 | | $ | 65.0 |
Other current liabilities | |
| 542.6 | |
| 547.4 |
Total current liabilities | |
| 599.9 | |
| 612.4 |
Long-term Liabilities: | | | | | | |
Long-term debt, net of deferred loan fees | |
| 461.3 | |
| 549.7 |
Deferred income taxes | |
| 687.8 | |
| 425.2 |
Other long-term liabilities | |
| 411.4 | |
| 438.4 |
Total long-term liabilities | |
| 1,560.5 | |
| 1,413.3 |
| | | | | | |
Total shareholders’ equity | |
| 2,298.6 | |
| 1,667.4 |
Total liabilities and shareholders’ equity | | $ | 4,459.0 | | $ | 3,693.1 |
9
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | Nine Months Ended September 30, | | ||||
(In millions) |
| 2022 |
| 2021 |
| ||
Cash Flows From Operating Activities: | | | | | | | |
Net income | | $ | 985.9 | | $ | 532.9 | |
Reconciling adjustments: | | | | | | | |
Depreciation and amortization | |
| 105.6 | |
| 100.9 | |
Amortization of operating lease right of use assets | | | 113.9 | | | 73.9 | |
Deferred income taxes | |
| 146.3 | |
| 30.3 | |
Share-based compensation expense | |
| 15.5 | |
| 14.2 | |
Income from SSAT | |
| (82.1) | |
| (35.0) | |
Distributions from SSAT | | | 40.3 | | | 46.9 | |
Other | | | (0.2) | | | (1.1) | |
Changes in assets and liabilities: | | | | | | | |
Accounts receivable, net | |
| 13.9 | |
| (75.2) | |
Deferred dry-docking payments | |
| (16.7) | |
| (25.8) | |
Deferred dry-docking amortization | |
| 18.6 | |
| 18.0 | |
Prepaid expenses and other assets | |
| (110.2) | |
| (46.7) | |
Accounts payable, accruals and other liabilities | |
| (5.0) | |
| 30.2 | |
Operating lease liabilities | | | (113.8) | | | (72.1) | |
Other long-term liabilities | |
| (9.5) | |
| (8.1) | |
Net cash provided by operating activities | |
| 1,102.5 | |
| 583.3 | |
| | | | | | | |
Cash Flows From Investing Activities: | | | | | | | |
Capitalized vessel construction expenditures | | | (11.9) | | | — | |
Other capital expenditures | |
| (113.4) | |
| (244.7) | |
Cash deposits into Capital Construction Fund | |
| (579.7) | |
| (31.2) | |
Withdrawals from Capital Construction Fund | | | 14.7 | | | 31.2 | |
Other | | | (2.6) | | | 2.2 | |
Net cash used in investing activities | |
| (692.9) | |
| (242.5) | |
| | | | | | | |
Cash Flows From Financing Activities: | | | | | | | |
Repayments of debt | |
| (97.2) | |
| (41.1) | |
Proceeds from revolving credit facility | | | — | | | 304.3 | |
Repayments of revolving credit facility | |
| — | |
| (376.1) | |
Payment of financing costs | | | — | | | (3.0) | |
Dividends paid | | | (36.9) | |
| (33.3) | |
Repurchase of Matson common stock | | | (296.9) | |
| (115.7) | |
Tax withholding related to net share settlements of restricted stock units | | | (19.6) | | | (14.4) | |
Net cash used in financing activities | |
| (450.6) | |
| (279.3) | |
| | | | | | | |
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | |
| (41.0) | |
| 61.5 | |
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period | |
| 287.7 | |
| 19.7 | |
Cash, Cash Equivalents and Restricted Cash, End of the Period | | $ | 246.7 | | $ | 81.2 | |
| | | | | | | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: | | | | | | | |
Cash and Cash Equivalents | | $ | 242.8 | | $ | 75.9 | |
Restricted Cash | | | 3.9 | | | 5.3 | |
Total Cash, Cash Equivalents and Restricted Cash, End of the Period | | $ | 246.7 | | $ | 81.2 | |
| | | | | | | |
Supplemental Cash Flow Information: | | | | | | | |
Interest paid, net of capitalized interest | | $ | 13.6 | | $ | 15.3 | |
Income tax payments, net of refunds | | $ | 212.4 | | $ | 162.1 | |
| | | | | | | |
Non-cash Information: | | | | | | | |
Capital expenditures included in accounts payable, accruals and other liabilities | | $ | 3.9 | | $ | 5.6 | |
10
MATSON, INC. AND SUBSIDIARIES
Net Income to EBITDA Reconciliations
(Unaudited)
EBITDA RECONCILIATION
| | | Three Months Ended |
| | | | |||||||
| | | September 30, |
| Last Twelve | | ||||||||
(In millions) | |
| 2022 |
| 2021 |
| Change |
| Months |
| ||||
Net Income | | | $ | 266.0 | | $ | 283.2 | | $ | (17.2) | | $ | 1,380.4 | |
Subtract: | Interest income | | | (1.3) | | | — | | | (1.3) | | | (1.3) | |
Add: | Interest expense | |
| 5.0 | |
| 5.1 | |
| (0.1) | | | 19.0 | |
Add: | Income taxes | |
| 68.1 | |
| 91.4 | |
| (23.3) | | | 346.4 | |
Add: | Depreciation and amortization | |
| 33.9 | |
| 32.7 | |
| 1.2 | | | 138.1 | |
Add: | Dry-dock amortization | |
| 5.7 | |
| 5.4 | |
| 0.3 | | | 24.9 | |
EBITDA (1) | | | $ | 377.4 | | $ | 417.8 | | $ | (40.4) | | $ | 1,907.5 | |
| | | Nine Months Ended |
| |||||||
| | | September 30, |
| |||||||
(In millions) | |
| 2022 |
| 2021 |
| Change |
| |||
Net Income | | | $ | 985.9 | | $ | 532.9 | | $ | 453.0 | |
Subtract: | Interest income | | | (1.3) | | | — | | | (1.3) | |
Add: | Interest expense | |
| 14.3 | |
| 17.9 | |
| (3.6) | |
Add: | Income taxes | |
| 268.4 | |
| 165.9 | |
| 102.5 | |
Add: | Depreciation and amortization | |
| 103.9 | |
| 97.9 | |
| 6.0 | |
Add: | Dry-dock amortization | |
| 18.6 | |
| 18.0 | |
| 0.6 | |
EBITDA (1) | | | $ | 1,389.8 | | $ | 832.6 | | $ | 557.2 | |
| (1) | EBITDA is defined as the sum of net income minus interest income plus interest expense, income taxes and depreciation and amortization (including deferred dry-docking amortization). EBITDA should not be considered as an alternative to net income (as determined in accordance with GAAP), as an indicator of our operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. Our calculation of EBITDA may not be comparable to EBITDA as calculated by other companies, nor is this calculation identical to the EBITDA used by our lenders to determine financial covenant compliance. |
11
| 1 Third Quarter 2022 Earnings Conference Call Third Quarter 2022 Earnings Conference Call November 2, 2022 |
| 2 Third Quarter 2022 Earnings Conference Call 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 November 2, 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 Third Quarter 2022 Earnings Conference Call Opening Remarks • Matson’s differentiated ocean services performed well in 3Q22, but the Company achieved lower year - over - year consolidated operating income – Lower demand for expedited ocean services in the Transpacific tradelane compared to the high levels of freight demand during the pandemic in the year ago period • Ocean Transportation: – Our CLX, CLX+ and CCX services achieved lower year - over - year volumes which contributed to the decline in our consolidated operating income – Higher year - over - year volume in Alaska service; lower 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 • Signed ~$1 billion in vessel construction agreements for three new LNG - ready Aloha Class vessels |
| 4 Third Quarter 2022 Earnings Conference Call Views on Current Market Environment Transpacific tradelane • In 3Q22, saw lower demand for expedited ocean services in the Transpacific tradelane – With less demand and easing port congestion in Southern California, the Company ended its temporary CCX service in early September, about six weeks earlier than expected • Freight rates in a transitional decline from the pandemic highs experienced earlier this year • Currently, expect the next 2 quarters to be challenging in the Transpacific tradelane – Retailers’ inventories adjusting to current consumer demand levels – Ocean liners reducing vessel capacity to meet lower demand levels • For remainder of this year and into 1Q23, expect to experience lower YoY freight demand and a lower rate environment for our CLX and CLX+ services • Expect to continue to earn a significant rate premium to the SCFI due to our differentiated, reliable and fast ocean services – Brand enhanced during pandemic – Well - positioned for any market cycle with CLX as the fastest service and CLX+ as second fastest service in the tradelane |
| 5 Third Quarter 2022 Earnings Conference Call Views on Current Market Environment (continued) Domestic tradelanes • Local economies continue to show economic growth – Hawaii: tourism outlook remains strong with international visitor traffic picking up; tight labor market with low unemployment rate – Alaska: increased energy - related exploration and production activity as a result of elevated oil prices; record permanent fund dividend in 4Q22 – Guam: expect continued improvement in tourism • But there are negative trends that create uncertainty in the economic recovery trajectory in each of the core markets – Weakening economic conditions in the U.S. and global economies could negatively affect consumer spending and tourism – Household discretionary income likely negatively affected by higher inflation, higher interest rates and lower personal income with end of pandemic - era stimulus Logistics • Continue to see a solid level of activity at Span Alaska • Transportation Brokerage – softer freight volumes due to higher customer inventory levels; softness in TL spot rate market • Trend in our Supply Chain business is consistent with the demand for our China service |
| 6 Third Quarter 2022 Earnings Conference Call Hawaii Service Third Quarter 2022 Performance • Container volume decreased 7.1% YoY primarily due to lower retail - related demand – YoY decline impacted by pandemic spike in demand in 3Q21 – 3Q22 volume higher than volume achieved in 3Q19 • During 3Q22, domestic tourist arrivals was strong and unemployment rate remained near pandemic lows 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. (7.1)% |
| 7 Third Quarter 2022 Earnings Conference Call China Service Third 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 and ended in 3Q22. 4Q21 volume figure includes the benefit of a 53 rd week. • Container volume decreased 15.1% YoY – Lower demand for our CLX, CLX+ and CCX services – One less sailing • Expect lower YoY volume in 4Q22 – No CCX service in 4Q22 (15.1)% |
| 8 Third Quarter 2022 Earnings Conference Call Guam Service Third 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 1.8% YoY primarily due to lower retail - related demand – 3Q22 volume higher than volume achieved in 3Q19 (1.8)% |
| 9 Third Quarter 2022 Earnings Conference Call Alaska Service Third Quarter 2022 Performance • Container volume increased 10.6% YoY – Higher AAX export seafood volume – Higher northbound volume primarily due to higher retail - related demand and volume related to a competitor’s dry - docking – Higher southbound volume primarily due to higher domestic seafood volume Container Volume (FEU Basis) 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Q1 Q2 Q3 Q4 2021 2022 Note : 4Q21 volume figure includes the benefit of a 53 rd week. 10.6% |
| 10 Third Quarter 2022 Earnings Conference Call SSAT Joint Venture Third Quarter 2022 Performance Equity in Income of Joint Venture $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 $ 30.0 $ 35.0 $ 40.0 Q1 Q2 Q3 Q4 $ in millions 2021 2022 • Terminal joint venture contribution was $23.4 million; YoY change of $10.4 million – Primarily due to higher other terminal revenue |
| 11 Third Quarter 2022 Earnings Conference Call Matson Logistics Third 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 • Operating income of $20.1 million; YoY change of approximately $4.1 million • Higher YoY operating income contributions from all business lines • Benefitted from favorable supply and demand fundamentals in core markets |
| 12 Third Quarter 2022 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non - GAAP Financial Metrics. INCOME STATEMENT SUMMARY DATA FEED Year-to-Date Third Quarter YTD Ended 9/30 D D ($ in millions, except per share data) 2022 2021 $ 2022 2021 $ Revenue Ocean Transportation $ 2,911.6 $ 2,106.9 $ 804.7 $ 918.5 $ 863.5 $ 55.0 Logistics 629.8 551.4 78.4 196.3 208.1 ( 11.8) Total Revenue $ 3,541.4 $ 2,658.3 $ 883.1 $ 1,114.8 $ 1,071.6 $ 43.2 Operating Income Ocean Transportation $ 1,201.4 $ 677.0 $ 524.4 $ 315.2 $ 361.9 ($ 46.7) Logistics 59.6 35.0 24.6 20.1 16.0 4.1 Total Operating Income $ 1,261.0 $ 712.0 $ 549.0 $ 335.3 $ 377.9 ($ 42.6) Interest income 1.3 — 1.3 — Interest expense ( 14.3) ( 17.9) ( 5.0) ( 5.1) Other income (expense), net 6.3 4.7 2.5 1.8 Income taxes ( 268.4) ( 165.9) ( 68.1) ( 91.4) Net Income $ 985.9 $ 532.9 $ 453.0 $ 266.0 $ 283.2 ($ 17.2) GAAP EPS, diluted $ 24.65 $ 12.19 $ 12.46 $ 6.89 $ 6.53 $ 0.36 $ 122.5 $ 115.9 $ 6.6 $ 39.6 $ 38.1 $ 1.5 EBITDA $ 1,389.8 $ 832.6 $ 557.2 $ 377.4 $ 417.8 ($ 40.4) Depreciation and Amortization (incl. dry-dock amortization) |
| 13 Third Quarter 2022 Earnings Conference Call Cash Generation and Uses of Cash $ 0.0 $ 200.0 $ 400.0 $ 600.0 $ 800.0 $ 1,000.0 $ 1,200.0 $ 1,400.0 $ 1,600.0 Cash Flow from Operations Paydown of Borrowings, net Maintenance & Other Capex New Vessel Capex (1) Capital Construction Fund Dividends Share Repurchase Other Cash Flows Net Increase in Cash $ in millions Last Twelve Months Ended September 30, 2022 $ 1,503.3 ($ 115.4) ($ 179.1) ($ 565.0) ($ 22.5) ($ 379.5) ($ 26.8) $ 165.5 (1) Includes capitalized interest and owner’s items. ($ 49.5) |
| 14 Third Quarter 2022 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $538.1 million (1) • Prepaid $50.4 million for all outstanding principal on Prudential Series C - 2 and C - 3 notes See the Addendum for a reconciliation of GAAP to non - GAAP Financial Metrics. (1) Total Debt is presented before any reduction for deferred loan fees as required by GAAP. Debt Levels Share Repurchase • On August 23 rd , announced additional 3 million shares to existing program • 3Q22: ~1.1 million shares repurchased for total cost of $88.4 million • As of September 30 th , ~3.0 million shares remaining in share repurchase program ($ in millions) ASSETS Cash and cash equivalents $ 242.8 $ 282.4 Other current assets 631.7 422.1 Total current assets 874.5 704.5 Investment in SSAT 87.2 58.7 Property and equipment, net 1,907.4 1,878.3 Intangible assets, net 178.0 181.1 Capital Construction Fund (CCF) 565.0 - Goodwill 327.8 327.8 Other long-term assets 519.1 542.7 Total assets $ 4,459.0 $ 3,693.1 LIABILITIES AND SHAREHOLDERS’ EQUITY Current portion of debt $ 57.3 $ 65.0 Other current liabilities 542.6 547.4 Total current liabilities 599.9 612.4 Long-term debt, net of deferred loan fees 461.3 549.7 Other long-term liabilities 1,099.2 863.6 Total long-term liabilities 1,560.5 1,413.3 Total shareholders’ equity 2,298.6 1,667.4 Total liabilities and shareholders’ equity $ 4,459.0 $ 3,693.1 September 30, December 31, 2022 2021 |
| 15 Third Quarter 2022 Earnings Conference Call Update on New Vessel and LNG Projects • On November 1 st , signed agreements with Philly Shipyard, Inc. for construction of three new LNG - ready Aloha Class vessels – New vessels for CLX service; will move three existing CLX vessels into Alaska service after new vessels placed into service • Overview of new Aloha Class vessels – LNG - ready; dual - fuel engines – State - of - the - art green technology features and a fuel - efficient hull design – 500 containers of additional capacity per voyage versus existing CLX vessels • Expect the additional capacity to be a meaningful net income, operating income and EBITDA contributor – Vessel deliveries expected in 4Q26, 2Q27 and 4Q27 • Contract cost of ~$1 billion – Made first milestone payment of ~$50 million from the CCF Year Payment 2022 ~$ 50 2023 50 2024 71 2025 351 2026 307 2027 157 2028 10 2029 3 TOTAL ~$ 999 Current Expected Milestone Payments ($ in millions) |
| 16 Third Quarter 2022 Earnings Conference Call Update on New Vessel and LNG Projects (continued) • Three new Aloha Class vessels and LNG projects are important steps towards achieving Matson’s 2030 greenhouse emissions goal – Reduce Scope 1 greenhouse gas emissions from owned fleet by 40% by 2030 using a 2016 baseline • LNG installation projects on Daniel K. Inouye (DKI) and Manukai remain on track – Daniel K. Inouye : current estimated total cost ~$35 million – Manukai : current estimated total cost ~$60 million • Moving forward with LNG installation project on Kaimana Hila (KMH) – Current estimated total cost on KMH is ~$35 million – Currently scheduled to enter dry - dock in 2Q24 and for install work to last ~5 months • Continue to evaluate LNG installation projects on Lurline and Matsonia – If move forward, installations would be in 2024 and 2025 – Current estimated total cost on both Kanaloa Class vessels is ~$85 million |
| 17 Third Quarter 2022 Earnings Conference Call Closing Thoughts • Matson is well - positioned to capitalize on future opportunities in Ocean Transportation and Logistics – Leverage brand and portfolio of essential, high - quality businesses – CLX and CLX+ are the two fastest services in the Transpacific – expect these services to continue to create value over the long - term • While there will always be some degree of uncertainty in the macro environment, we will maintain discipline and stick to our capital allocation strategy – Invest for the long - term to create value for shareholders – Find opportunities to extend the Matson brand and drive organic growth – Look for unique acquisition opportunities that meet our investment criteria – Return capital to shareholders |
| 18 Third Quarter 2022 Earnings Conference Call Appendix |
| 19 Third Quarter 2022 Earnings Conference Call Hawaii Service – Current Business Trends UHERO Projections (2) (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2022 - 09 - state.xls (2) Source: https://uhero.hawaii.edu/wp - content/uploads/2022/09/22Q3_Forecast.pdf 2020 2021 2022P 2023P Real GDP (11.1)% 4.6% 4.4% 1.9% Construction Jobs Growth (2.3)% 0.5% (2.9)% 1.3% Population Growth (0.3)% (0.7)% (0.3)% 0.0% Unemployment Rate 12.0% 5.8% 4.2% 4.3% Visitor Arrivals (‘000s) % change 2,708.3 (73.9)% 6,777.0 150.0% 9,201.2 35.9% 9,709.8 5.5% 0 100 200 300 400 500 600 700 800 900 1,000 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Visitor Arrivals (‘000s) Unemployment Rate Unemployment Rate and Visitor Arrivals by Air Unemployment Rate (not seasonally adjusted) (1) Visitor Arrivals by Air (1) Select Hawaii Economic Indicators |
| 20 Third Quarter 2022 Earnings Conference Call Appendix – Non - GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles ( “ GAAP ” ). The Company also considers other non - GAAP measures to evaluate performance, make day - to - day operating decisions, help investors understand our ability to incur a nd service debt and to make capital expenditures, and to understand period - over - period operating results separate and apart from items that may, or could, have a disproportional positive or negative impact on results in any particular period. These non - GAAP measures include, but are not limited to, Earnings Before Interest, Income Taxes, Depreciation and Amortization ( “ EBITDA ” ). |
