International Shipholding Corporation Reports Second Quarter 2013 Results Declares second quarter dividend of $0.25 per share on its Common Stock Business Wire MOBILE, Ala. -- July 31, 2013 International Shipholding Corporation (NYSE: ISH) today announced financial results for the quarter ended June 30, 2013. Second Quarter 2013 Highlights *Reported net income of $1.9 million for the three months ended June 30, 2013 *Priced $27.5 million of 9% Series B Cumulative Redeemable Perpetual Preferred Stock on July 25, 2013 *Declared a second quarter dividend of $0.25 per share of common stock payable on September 4, 2013 to shareholders of record as of August 16, 2013 *Paid a $2.375 per share dividend on its Series A Preferred Stock on July 30, 2013 Net Income The Company reported net income of $1.9 million for the three months ended June 30, 2013, which included a non-operating gain of $1.8 million from its Yen denominated loan. For the comparable three months ended June 30, 2012, the Company reported net income of $704,000 which included a non-operating loss of $1.7 million on its Yen denominated loan. Mr. Niels M. Johnsen, Chairman and Chief Executive Officer, stated: “We continue our strategy of operating a diversified fleet, primarily on medium to long term contracts, and remain focused on taking advantage of attractive growth opportunities and strengthening our balance sheet. In July, we successfully priced a $27.5 million Series B Cumulative Redeemable Perpetual Preferred Stock offering which follows our previous Series A Preferred Stock offering earlier this year.” “We will continue to focus on identifying maritime transportation needs in niche markets and capitalize on accretive acquisition opportunities to enhance shareholder value. Given our strong contract coverage and stable cash flows, we continue to provide our shareholders with value through a quarterly dividend payment. For the second quarter, our Board of Directors declared a common stock dividend payment of $0.25 per share which represents the 20^th consecutive dividend payment since reinstituting our dividend policy in the fourth quarter of 2008.” Gross Voyage Profit The Company’s second quarter 2013 gross voyage profit representing the results of its six reporting segments was $13.3 million, compared to $13.9 million in the comparable 2012 three month period. The comparable results by operating segment are shown below. (All Amounts Jones Pure Car Dry Bulk Specialty in Millions) Act Truck Carriers Rail-Ferry Contracts Other Total Carriers Second Quarter 2013 Gross Voyage $5.5 $4.6 $0.4 $1.7 $1.0 $0.1 $13.3 Profit Depreciation ($1.2) ($2.1) ($1.6) ($0.4) ($0.5) $0.0 ($5.8) Gross Profit $4.3 $2.5 ($1.2) $1.3 $0.5 $0.1 $7.5 (After Depreciation) Second Quarter 2012 Gross Voyage $1.1 $6.8 $2.9 $1.5 $1.3 $0.3 $13.9 Profit Depreciation ($0.3) ($2.6) ($1.6) ($0.7) ($0.5) ($0.0) ($5.7) Gross Profit $0.8 $4.2 $1.3 $0.8 $0.8 $0.3 $8.2 (After Depreciation) Variance Gross Voyage $4.4 ($2.2) ($2.5) $0.2 ($0.3) ($0.2) ($0.6) Profit Depreciation ($0.9) $0.5 $0.0 $0.3 $0.0 $0.0 ($0.1) Gross Profit $3.5 ($1.7) ($2.5) $0.5 ($0.3) ($0.2) ($0.7) For a reconciliation of the numbers presented above to GAAP figures, please see the attached Non-GAAP Reconciliation Statement. The improved gross voyage profit for the Jones Act segment reflects the inclusion of United Ocean Services (“UOS”), which we acquired on November 30, 2012. While year over year the Jones Act segment benefited from UOS, the results of UOS in the quarter were impacted by 79 non-operating days while two of the units underwent scheduled drydockings. Gross voyage profit on the Pure Car Truck Carrier (“PCTC”) segment decreased due primarily to lower charter hire rates on one U.S. Flag PCTC (effective July, 2012) and our International Flag PCTC (effective April, 2013). Supplemental cargo results, a component of the PCTC results, were approximately $600,000 lower in the quarter when compared to the comparable 2012 second quarter. For the six months ended June 30, 2013, supplemental cargo results were comparable to the six month period ended June 30, 2012. The dry bulk market, while slightly improved from the beginning of the year, continues to be at depressed levels, producing lower results than the comparable 2012 second quarter. The Rail Ferry segment reports higher northbound volumes which produced slightly better results year over year. The Specialty Contracts segment reported a decrease in gross voyage profit due primarily to our ice-strengthened vessel, which performed below expectations. The Company’s Other segment, consisting mainly of chartering brokerage and agency services, reported lower brokerage revenues. Administrative and General Administrative and general expenses in the second quarter of 2013 were $6.2 million as compared to $4.7 million in the same period of 2012. Higher expenses associated with the integration of UOS, as well as accrued bonus payments, were the primary reasons. Interest and Other Interest expense for the three months ended June 30, 2013 was approximately $204,000 lower than the comparable three months in 2012. Our service obligations were reduced from the proceeds on the sale of two International Flag PCTCs and two U.S. Flag PCTCs in a sale-leaseback transaction, as well as regularly scheduled debt payments. During the three months ended June 30, 2013, the Japanese Yen weakened in relation to the U.S. Dollar from 94.22 to 99.15, producing an exchange gain of $1.8 million. Balance Sheet The Company’s working capital at June 30, 2013 was $15.5 million, an increase of $500,000 from March 31, 2013. Cash and cash equivalents balance was approximately $22.4 million while capital expenditures during the six month period were $14.1 million. The Company’s total debt obligations, at June 30, 2013, were approximately $213 million. Dividend Declarations The Company’s Board of Directors approved a per share dividend payment on July 30, 2013 of $2.375 on its Series A Preferred Stock representing a regular quarterly payment. Additionally, the Board of Directors declared a $0.25 dividend payable on September 4, 2013, for each share of common stock owned on the record date of August 16, 2013. All future dividend declarations remain subject to the discretion of International Shipholding Corporation’s Board of Directors. Outlook The Company reaffirms that its projected 2013 net income, before preferred stock dividends, is expected to be between $10 and $12 million, while lowering its anticipated EBITDA ^ to within a $60 to $63 million range as a result of the depressed dry bulk market and extended dry dock days on the UOS units. All 2013 outlook figures included in this release exclude the effects of special items, future changes in regulation, the impact of unforeseen litigation or unforeseen events or circumstances that reduce vessel deployment or rates, any changes in operating or capital plans, and any future acquisitions, divestitures, buybacks or other similar business transactions. For purposes of this outlook section, EBITDA means earnings before interest, taxes, depreciation and amortization. See “Caution concerning forward-looking statements” below. Conference Call In connection with this earnings release, management will host an earnings conference call on Thursday, August 1, 2013, at 10:00 AM ET. To participate in the conference call, please dial (888) 455-2296 (domestic) or (719) 325-2435 (international). Participants can reference the International Shipholding Corporation Second Quarter 2013 Earnings Call or passcode 3208673. Please dial in approximately 5 minutes prior to the call. The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company’s website, www.intship.com. Please allow extra time prior to the call to visit the Company’s website and download any software that may be needed to listen to the webcast. A replay of the conference call will be available through August 9, 2013, at (877) 870-5176 (domestic) or (858) 384-5517 (international). The passcode for the replay is 3208673. About International Shipholding International Shipholding Corporation, through its subsidiaries, operates a diversified fleet of U.S. and International flag vessels that provide worldwide and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term charters and contracts. www.intship.com Caution concerning forward-looking statements Except for the historical and factual information contained herein, the matters set forth in this release, including statements regarding our 2013 guidance, the expected benefits of the UOS acquisition and other statements identified by words such as “estimates,” “expects,” “anticipates,” “plans,” and similar expressions, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations only, and are subject to a number of risks and uncertainties, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected, expressed or implied if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include, but are not limited to: our ability to maximize the usage of our newly-purchased and incumbent vessels and other assets on favorable economic terms, including our ability to renew our time charters and contracts when they expire and to maximize our carriage of supplemental cargoes; our ability to effectively handle our leverage by servicing and complying with each of our debt instruments; changes in domestic or international transportation markets that reduce the demand for shipping generally or for our vessels in particular; industry-wide changes in cargo freight rates, charter rates, vessel design, vessel utilization or vessel valuations, or in charter hire, fuel or other operating expenses; the possibility that the anticipated benefits from the UOS acquisition cannot be fully realized or may take longer to realize than expected; political events in the United States and abroad; the appropriation of funds by the U.S. Congress, including the impact of any future cuts to federal spending similar to the U.S. Congress’ recent “sequestration” cuts; terrorism, piracy and trade restrictions; changes in foreign currency rates or interest rates; the effects of more general factors, such as changes in tax laws or rates, or in general market, labor or economic conditions; and each of the other economic, competitive, governmental, and technological factors detailed in our reports filed with the Securities and Exchange Commission. You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factors on our business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements. Accordingly, you are cautioned not to place undue reliance upon any of our forward-looking statements, which speak only as of the date made. We undertake no obligation to update or revise, for any reason, any forward-looking statements made by us or on our behalf, whether as a result of new information, future events or developments, changed circumstances or otherwise. Non-GAAP Reconciliation Statement (By Segment) (All Amounts Pure Car in Millions) Jones Truck Dry Rail- Specialty Other Total Act Carriers Bulk Ferry Contracts Second Quarter, 2013 Gross Profit $4.3 $2.5 ($1.2) $1.3 $0.5 $0.1 $7.5 Allocated ($2.6) ($2.1) ($0.2) ($0.8) ($0.5) ($0.0) ($6.2) Overhead *Add Back: Unconsolidated $0.0 $0.0 $0.0 $0.1 $0.0 $0.0 $0.1 Entities Operating $1.7 $0.4 ($1.4) $0.6 $0.0 $0.1 $1.4 Income Second Quarter, 2012 Gross profit $0.8 $4.2 $1.3 $0.8 $0.8 $0.3 $8.2 Allocated ($0.4) ($2.3) ($1.0) ($0.5) ($0.4) ($0.1) ($4.7) Overhead Gain on Sale $0.0 $0.7 $0.0 $0.0 $0.0 $0.0 $0.7 of Assets *Add Back: Unconsolidated $0.0 $0.0 $0.0 ($0.7) $0.0 $0.0 ($0.7) Entities Operating $0.4 $2.6 $0.3 ($0.4) $0.4 $0.2 $3.5 Income * To remove the effect of including the results of the unconsolidated entities in Gross Voyage Profit INTERNATIONAL SHIPHOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All Amounts in Thousands Except Share Data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2013 2012 2013 2012 Revenues $ 74,897 $ 60,320 $ 156,021 $ 125,524 Operating Expenses: Voyage 61,508 47,026 131,099 97,852 Expenses Vessel 5,804 5,723 11,575 12,080 Depreciation Other 11 - 34 - Depreciation Administrative and General 6,170 4,720 11,603 10,228 Expenses Gain on Sale of Other - (667 ) - (4,466 ) Assets Total Operating 73,493 56,802 154,311 115,694 Expenses Operating 1,404 3,518 1,710 9,830 Income Interest and Other: Interest 2,077 2,281 4,278 5,008 Expense Derivative (205 ) 117 (282 ) (32 ) (Gain)/Loss Gain on Sale - (24 ) - (66 ) of Investment Other Income from Vessel (539 ) (605 ) (1,094 ) (1,227 ) Financing Investment (42 ) (146 ) (82 ) (274 ) Income Foreign Exchange (1,836 ) 1,734 (5,017 ) (1,914 ) (Gain) /Loss (545 ) 3,357 (2,197 ) 1,495 Income Before Provision for Income Taxes and Equity in (Loss) Income of 1,949 161 3,907 8,335 Unconsolidated Entities Provision for Income Taxes: Current 15 108 50 276 15 108 50 276 Equity in Net (Loss) Income of Unconsolidated Entities (Net of Applicable (75 ) 651 (345 ) 581 Taxes) Net Income $ 1,859 $ 704 $ 3,512 $ 8,640 Preferred Stock 594 - 845 - Dividends Net Income Available to $ 1,265 $ 704 $ 2,667 $ 8,640 Common Stockholders Basic and Diluted Earnings Per Common Share: Basic Earnings Per Common $ 0.17 $ 0.10 $ 0.37 $ 1.20 Share: Diluted Earnings Per $ 0.17 $ 0.10 $ 0.37 $ 1.20 Common Share: Weighted Average Shares of Common Stock Outstanding: Basic 7,239,780 7,203,860 7,226,415 7,187,236 Diluted 7,263,206 7,234,505 7,248,377 7,202,559 Common Stock Dividends Per $ 0.250 $ 0.250 $ 0.500 $ 0.500 Share INTERNATIONAL SHIPHOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (All Amounts in Thousands Except Shares) (Unaudited) June 30, December 31, ASSETS 2013 2012 Cash and Cash Equivalents $ 22,386 $ 19,868 Restricted Cash 17,825 8,000 Accounts Receivable, Net of Allowance 32,289 32,891 for Doubtful Accounts of $88 and $100 in 2013 and 2012, Respectively Net Investment in Direct Financing - 3,540 Leases Other Current Assets 7,055 8,392 Notes Receivable 4,248 4,383 Material and Supplies Inventory 9,986 11,847 Total Current Assets 93,789 88,921 Investment in Unconsolidated Entities 13,358 12,676 Net Investment in Direct Financing - 13,461 Leases Vessels, Property, and Other Equipment, at Cost: Vessels 546,691 525,172 Building 1,211 1,211 Land 623 623 Leasehold Improvements 26,348 26,348 Construction in Progress 2,842 10 Furniture and Equipment 11,564 11,614 589,279 564,978 Less - Accumulated Depreciation (163,976 ) (151,318 ) 425,303 413,660 Other Assets: Deferred Charges, Net of Accumulated 25,907 19,892 Amortization of $15,060 and $15,821 in 2013 and 2012, Respectively Intangible Assets, Net of Accumulated 42,636 45,784 Amortization Due from Related Parties 1,717 1,709 Notes Receivable 29,522 33,381 Goodwill 2,771 2,700 Other 6,334 5,509 108,887 108,975 TOTAL ASSETS $ 641,337 $ 637,693 INTERNATIONAL SHIPHOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (All Amounts in Thousands Except Shares) (Unaudited) June 30, December 31, 2013 2012 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current Maturities of Long-Term Debt $ 25,549 $ 26,040 Accounts Payable and Accrued Liabilities 52,743 50,896 Total Current Liabilities 78,292 76,936 Long-Term Debt, Less Current Maturities 187,225 211,590 Other Long-Term Liabilities: Lease Incentive Obligation 5,774 6,150 Other 82,152 80,718 TOTAL LIABILITIES 353,443 375,394 Stockholders' Equity: Preferred Stock, $1.00 Par Value, 9.50% Series A Cumulative Perpetual Preferred 250 - Stock, 650,000 shares Authorized, 250,000 shares Issued and Outstanding at June 30, 2013 Common Stock, $1.00 Par Value, 20,000,000 shares Authorized, 8,652 8,632 7,248,350 and 7,203,935 shares Outstanding at June 30, 2013 and December 31, 2012, Respectively Additional Paid-In Capital 109,919 86,362 Retained Earnings 217,046 217,654 Treasury Stock, 1,388,066 Shares at both June 30, 2013 and (25,403 ) (25,403 ) December 31, 2012, Respectively Accumulated Other Comprehensive Loss (22,570 ) (24,946 ) TOTAL STOCKHOLDERS' EQUITY 287,894 262,299 TOTAL LIABILITIES AND STOCKHOLDERS' $ 641,337 $ 637,693 EQUITY INTERNATIONAL SHIPHOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (All Amounts in Thousands) (Unaudited) Six Months Ended June 30, 2013 2012 Cash Flows from Operating Activities: Net Income $ 3,512 $ 8,640 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 11,899 12,357 Amortization of Deferred Charges 4,239 3,926 Amortization of Intangible Assets 3,148 1,288 Non-Cash Share Based Compensation 721 544 Equity in Net Loss (Income) of 345 (581 ) Unconsolidated Entities Gain on Sale of Assets - (4,466 ) Gain on Sale of Investments - (66 ) Gain on Foreign Currency Exchange (5,017 ) (1,914 ) Changes in: Deferred Drydocking Charges (6,584 ) (7,623 ) Accounts Receivable (1,774 ) 277 Inventories and Other Current Assets 3,852 (624 ) Other Assets 301 1,950 Accounts Payable and Accrued 641 (594 ) Liabilities Other Long-Term Liabilities 4,511 (3,204 ) Net Cash Provided by Operating 19,794 9,910 Activities Cash Flows from Investing Activities: Principal payments received under 558 2,279 Direct Financing Leases Capital Improvements to Vessels and (7,518 ) (46,103 ) Other Assets Proceeds from Sale of Assets - 130,315 Purchase from Sale of Marketable - (5 ) Securities Proceeds of Marketable Securities - 159 Investment in Unconsolidated Entities (500 ) (750 ) Net (Increase) Decrease in Restricted (9,825 ) 6,907 Cash Account Acquisition of United Ocean Services, (2,475 ) - LLC Proceeds from Note Receivables 3,657 2,507 Net Cash (Used In) Provided by (16,103 ) 95,309 Investing Activities Cash Flows from Financing Activities: Issuance of Preferred Stock 23,480 - Proceeds from Issuance of Debt 22,000 41,175 Repayment of Debt (41,840 ) (141,559 ) Additions to Deferred Financing Charges (693 ) (264 ) Dividends Paid (4,120 ) (4,805 ) Reimbursements for Leasehold - - Improvements Net Cash Used In Financing Activities (1,173 ) (105,453 ) Net Increase (Decrease) in Cash and 2,518 (234 ) Cash Equivalents Cash and Cash Equivalents at Beginning 19,868 21,437 of Period Cash and Cash Equivalents at End of $ 22,386 $ 21,203 Period Contact: The IGB Group Leon Berman, 212-477-8438 firstname.lastname@example.org or International Shipholding Corporation Niels M. Johnsen, 212-943-4141 Chairman or Erik L. Johnsen, 251-243-9221 President
International Shipholding Corporation Reports Second Quarter 2013 Results
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