matson inc (MATX) Key Developments
Matson, Inc. Appoints Keoni Wagner as Director, Corporate Communications to Replace Jeff Hull
Aug 19 15
Matson, Inc. announced that Keoni Wagner has joined the company as director, corporate communications. He succeeds Jeff Hull, who is retiring from Matson after a 33-year career with the company. Wagner reports to Matt Cox, president and chief executive officer, and is based at Matson's corporate office in Oakland, California. Wagner most recently served as public information officer and spokesman for Oakland International Airport.
Matson, Inc. Announces Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2015; Provides Earnings Guidance for the Second Half, Third Quarter, Fourth Quarter and Full Year of 2015
Aug 4 15
Matson, Inc. announced unaudited consolidated earnings results for the second quarter and six months ended June 30, 2015. For the quarter, the company reported total operating revenue of $447.6 million compared to $436.4 million a year ago. Operating income was $33.7 million compared to $35.7 million a year ago. Income before income taxes was $29.1 million compared to $31.2 million a year ago. Net income was $9.9 million or $0.23 per basic and diluted share compared to $18.1 million or $0.42 per basic and diluted share a year ago. EBITDA was $57.9 million compared to $58.5 million a year ago.
For the six months, the company reported total operating revenue of $845.8 million compared to $828.9 million a year ago. Operating income was $78.6 million compared to $45.6 million a year ago. Income before income taxes was $69.7 million compared to $37.0 million a year ago. Net income was $34.9 million or $0.79 per diluted share compared to $21.5 million or $0.50 per diluted share a year ago. As at June 30, 2015, the company’s net debt was $473.3 million.
The company provided earnings guidance for the second half, third quarter, fourth quarter and full year of 2015. The company expects its interest expense in the second half 2015 to increase to approximately $10 million, primarily due to the incremental borrowings required to fund the Acquisition. The company expects its effective tax rate for the second half 2015 to be approximately 40%. In the second half 2015, the company expects maintenance capital expenditures to be approximately $35 million and scheduled contract payments relating to its two vessels under construction to be $33 million.
The company expects for the third quarter of 2015, operating income is expected to be approximately 50% higher.
The company expects for the fourth quarter of 2015, operating income is expected to be considerably lower than the comparable periods in 2014.
The company expects full year 2015 operating income to approximate the 2014 level of $8.9 million.
Matson, Inc. to Issue $75 Million of 30-Year Senior Unsecured Notes and Amends its Existing Unsecured Revolving Credit Facility
Jul 30 15
Matson, Inc. announced that it has entered into a private placement agreement pursuant to which Matson expects to issue $75 million of 30-year senior unsecured notes. The notes will have a weighted average life of approximately 13 years and will bear interest at a rate of 3.92%, payable semi-annually. The notes are expected to be issued in September 2015, subject to satisfying customary closing conditions, and the proceeds are expected to be used for general corporate purposes, which may include paying down the company's revolving credit facility. The notes have financial and other covenants that are substantially the same as the covenants in the company's existing outstanding senior unsecured notes. The notes will begin to amortize in 2017, with annual principal payments of approximately $1.8 million through 2019. During the years 2020 to 2026, the annual principal payments will range between approximately $1.3 million and approximately $8.0 million. Starting in 2027, and in each year thereafter, annual principal payments will be approximately $1.5 million. Matson announced that it has entered into amendments to its existing unsecured revolving credit facility and long-term private debt note agreements. The company's existing $375 million unsecured revolving credit facility with a syndicate of banks was increased to $400 million and extended for a new five-year term, maturing July 2020. In addition, the new facility includes a number of amended terms, including modifications to certain definitions and covenants and an improvement in the consolidated leverage ratio used for pricing purposes to incorporate a net debt (rather than total debt) standard. Bank of America, N. A remains as Administrative Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and First Hawaiian Bank continue to serve as joint lead arrangers for the amended and extended revolving credit facility. Matson entered into a number of amendments to its existing note purchase agreements, including modifications to certain definitions and covenants. Outstanding borrowings under these agreements are currently $200.4 million and $100 million, respectively. Interest rates and other substantive terms remain unchanged.
Matson to End Hawaii Molasses Operation
Jul 30 15
The shipping company serving Hawaii will end its molasses operation in the state and pay millions of dollars as compensation for spilling 1,400 tons of the sugary substance in Honolulu Harbor. State Attorney General Doug Chin on Wednesday called the $15.4 million settlement with Matson Navigation Co. for an environmental violation. Matson is also agreeing to cease its molasses operation in Hawaii and pay for removal of its molasses tanks and any remaining molasses. The company will pay $5.9 million to the state, and the costs related to ending the molasses operation are estimated between $5.5 million and $9.5 million, which would put the total settlement amount between $11.4 million and $15.4 million. The 2013 spill killed more than 26,000 fish and other marine life. The molasses oozed from a section of pipe that Matson thought had been sealed. The sticky molasses suffocated marine life and discolored the water as it sank to the bottom of the harbor. The spill, in an industrial area about 5 miles west of Waikiki's hotels and beaches, shut down much of Honolulu Harbor for nearly two weeks. Reaching a settlement allowed the state to avoid a lawsuit that would have taken years to resolve in court.
Matson, Inc. Plans to Invest $30 Million in Alaska Operations
Jul 28 15
Matson, Inc. is moving quickly to fund improvements in its new Alaska operations following its May 29 acquisition of Horizon Lines' Alaska services. The company expects to invest more than $30 million in new equipment planned by Horizon prior to its acquisition. In addition, the company has scheduled work to install new exhaust scrubber systems on the three former Horizon D7 Class vessels it now operates in Alaska, with each vessel going into dry dock for three months, one after another, starting in September. The new equipment will help the vessels comply with the latest federal emissions regulations and will eliminate virtually all sulfur dioxide and particulate emissions. Matson will deploy a reserve container ship during the installation period to prevent any disruption to its twice weekly service from Tacoma to Anchorage and Kodiak and weekly service to Dutch Harbor. The modifications to all three ships are expected to be complete by December 2016.