-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Emawb8XorqpUIPRUviBWr3cmKYyz/JpSwHFYNqaH/aFan+1BWU8RWZCJx05jBgSI 4BoCV5ZupNi31qVyUDyKTQ== 0000278041-96-000011.txt : 19960514 0000278041-96-000011.hdr.sgml : 19960514 ACCESSION NUMBER: 0000278041-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL SHIPHOLDING CORP CENTRAL INDEX KEY: 0000278041 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 362989662 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10852 FILM NUMBER: 96561904 BUSINESS ADDRESS: STREET 1: 650 POYDRAS ST STE 1700 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045295461 10-Q 1 FIRST QUARTER 1996 FORM 10-Q INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 2-63322 INTERNATIONAL SHIPHOLDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-2989662 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 650 Poydras Street New Orleans, Louisiana 70130 (Address of principal executive offices) (Zip Code) (504) 529-5461 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock $1 Par Value 6,682,887 shares (March 29, 1996) PART I -FINANCIAL INFORMATION INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
March 31, December 31, ASSETS 1996 1995 ------------ ------------ Current Assets: Cash and Cash Equivalents $ 65,181 $ 54,281 Marketable Securities 3,837 4,630 Accounts Receivable, Net 50,492 46,834 Net Investment in Direct Financing Leases 2,082 2,104 Other Current Assets 1,169 3,521 Material and Supplies Inventory, At Cost 10,577 10,545 ------------ ----------- Total Current Assets 133,338 121,915 ------------ ----------- Net Investment in Direct Financing Leases 23,970 24,482 ------------ ----------- Vessels, Property and Other Equipment, At Cost: Vessels and Barges 648,266 634,905 Other Marine Equipment 7,570 7,570 Terminal Facilities 18,134 18,126 Land 2,317 2,317 Furniture and Equipment 16,266 15,892 ------------ ----------- 692,553 678,810 Less - Accumulated Depreciation (252,378) (243,929) ------------ ----------- 440,175 434,881 ------------ ----------- Other Assets: Deferred Charges in Process of Amortization 25,311 26,952 Acquired Contract Costs, Net of Accumulated Amortization 21,120 21,733 Due from Related Parties 499 535 Other 7,443 17,082 ------------ ----------- 54,373 66,302 ------------ ----------- $ 651,856 $ 647,580 ============ =========== The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
March 31, December 31, 1996 1995 LIABILITIES AND STOCKHOLDERS' INVESTMENT ------------ ------------ Current Liabilities: Current Maturities of Long-Term Debt $ 41,214 $ 40,785 Current Maturities of Capital Lease Obligations 1,981 1,469 Accounts Payable and Accrued Liabilities 82,653 77,481 Federal Income Tax Payable 616 6,520 Current Deferred Income Tax Liability 482 1,283 Current Liabilities to be Refinanced (12,035) (19,030) ------------ ----------- Total Current Liabilities 114,911 108,508 ------------ ----------- Current Liabilities to be Refinanced 12,035 19,030 ------------ ----------- Billings in Excess of Income Earned and Expenses Incurred 5,688 4,639 ------------ ----------- Long-Term Capital Lease Obligations, Less Current Maturities 17,892 19,623 ------------ ----------- Long-Term Debt, Less Current Maturities 274,423 269,872 ------------ ----------- Reserves and Deferred Credits: Deferred Income Taxes 38,862 38,668 Claims and Other 19,993 20,979 ------------ ----------- 58,855 59,647 ------------ ----------- Stockholders' Investment: Common Stock 6,756 6,756 Additional Paid-in Capital 54,450 54,450 Retained Earnings 107,988 106,158 Less - Treasury Stock (1,133) (1,133) Unrealized Holding Gain on Marketable Securities 3 30 Unrealized Translation Loss (12) - ------------ ----------- 168,052 166,261 ------------ ----------- $ 651,856 $ 647,580 ============ =========== The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Data) (Unaudited)
Three Months Ended March 31, 1996 1995 --------- --------- Revenues $ 89,490 $ 77,908 Operating Differential Subsidy 5,745 5,394 --------- --------- 95,235 83,302 --------- --------- Operating Expenses: Voyage Expenses 70,093 62,265 Vessel and Barge Depreciation 7,995 6,067 --------- --------- Gross Voyage Profit 17,147 14,970 --------- --------- Administrative and General Expenses 6,687 6,462 (Loss) Gain on Sale of Assets (3) 1 --------- --------- Operating Income 10,457 8,509 --------- --------- Interest: Interest Expense 7,295 6,314 Investment Income (426) (776) --------- --------- 6,869 5,538 --------- --------- Unconsolidated Entities (Net of Applicable Taxes): Equity in Net Income of Unconsolidated Entities - 226 --------- --------- Income Before Provision for Income Taxes 3,588 3,197 --------- --------- Provision for Income Taxes: Current 1,882 1,805 Deferred (592) (779) State 50 85 --------- --------- 1,340 1,111 --------- --------- Net Income $ 2,248 $ 2,086 ========= ========= Earnings Per Common Share: Net Income $ 0.34 $ 0.31 ========= ========= Weighted Average Shares of Common Stock Outstanding 6,682,887 6,682,887 The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT (Dollars in Thousands) (Unaudited)
Net Additional Unrealized Unrealized Common Paid-In Retained Treasury Holding Translation Stock Capital Earnings Stock Gain/(Loss) Loss Total ------------------------------------------------------------- Balance at December 31, 1994 $ 5,405 $54,450 $87,757 ($1,133) ($163) $ - $146,316 Net Income for Year Ended December 31, 1995 - - 20,980 - - - 20,980 Cash Dividends - - (1,228) - - - (1,228) 25% Stock Dividend 1,351 - (1,351) - - - - Unrealized Holding Gain on Marketable Securities, Net of Deferred Taxes - - - - 193 - 193 ----------------------------------------------------------- Balance at December 31, 1995 $6,756 $54,450 $106,158 ($1,133) $30 $ - $166,261 Net Income for Three Months Ended March 31, 1996 - - 2,248 - - - 2,248 Cash Dividends - - (418) - - - (418) Unrealized Holding Loss on Marketable Securities, Net of Deferred Taxes - - - - (27) - (27) Unrealized Translation Loss - - - - - (12) (12) ------------------------------------------------------------ Balance at March 31, 1996 $ 6,756 $54,450 $107,988 ($1,133) $ 3 ($12) $168,052 ============================================================ The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Three Months Ended March 31, 1996 1995 --------- --------- Cash Flows from Operating Activities: Net Income $ 2,248 $ 2,086 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 8,519 6,450 Amortization of Deferred Charges and Other Assets 4,495 4,321 Provision for Deferred Income Taxes 1,360 1,026 Equity in Unconsolidated Entities - (226) Loss (Gain) on Sale of Assets 3 (1) Unearned Income 1,049 3,023 Reserve for Claims and Other Deferred Credits (986) (1,140) Changes in: Accounts Receivable (3,658) (64) Net Investment in Direct Financing Leases 534 551 Other Assets (252) 296 Inventories and Other Current Assets 2,320 569 Accounts Payable and Accrued Liabilities 7,201 (3,817) Federal Income Taxes Payable (7,718) (341) --------- --------- Net Cash Provided by Operating Activities 15,115 12,733 --------- --------- Cash Flows from Investing Activities: Purchase of Vessels and Other Property (15,987) (1,533) Additions to Deferred Charges (1,002) (3,793) Proceeds from Sale of Assets - 36 Proceeds from Short-Term Investments 726 - Investment in and Advances to Unconsolidated Entities - 359 Other Investing Activities 9,919 (1,397) --------- --------- Net Cash Used by Investing Activities (6,344) (6,328) --------- --------- Cash Flows from Financing Activities: Proceeds from Issuance of Debt and Capital Lease Obligations 19,814 15,000 Reduction of Debt and Capital Lease Obligations (16,053) (15,974) Additions to Deferred Financing Charges (1,214) (115) Common Stock Dividends Paid (418) (267) --------- --------- Net Cash Provided (Used) by Financing Activities 2,129 (1,356) --------- --------- Net Increase in Cash and Cash Equivalents 10,900 5,049 Cash and Cash Equivalents at Beginning of Period 54,281 29,611 --------- --------- Cash and Cash Equivalents at End of Period $ 65,181 $ 34,660 ========= ========= The accompanying notes are an integral part of these statements.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARCH 31, 1996 (Unaudited) Note 1. Basis of Preparation The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures required by generally accepted accounting principles for complete financial statements have been omitted. It is suggested that these interim statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K of International Shipholding Corporation for the year ended December 31, 1995. Certain reclassifications have been made to prior period financial information in order to conform to current year presentations. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full year 1996. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information shown have been included. The foregoing 1996 interim results are not necessarily indicative of the results of the operations for the full year 1996. The Company's policy is to consolidate all subsidiaries in which it holds greater than 50% voting interest. All significant intercompany accounts and transactions have been eliminated. The Company uses the cost method to account for investments in entities in which it holds less than 20% voting interest and in which the Company cannot exercise significant influence over operating and financial activities. The Company uses the equity method to account for investments in entities in which it holds a 20% to 50% voting interest. INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's vessels are operated under a variety of charters, liner services and contracts. The nature of these arrangements is such that, without a material variation in gross voyage profits (total revenues less voyage expenses and vessel and barge depreciation), the revenues and expenses attributable to a vessel deployed under one type of charter or contract can differ substantially from those attributable to the same vessel if deployed under a different type of charter or contract. Accordingly, depending on the mix of charters or contracts in place during a particular accounting period, the Company's revenues and expenses can fluctuate substantially from one period to another even though the number of vessels deployed, the number of voyages completed, the amount of cargo carried and the gross voyage profit derived from the vessels remain relatively constant. As a result, fluctuations in voyage revenues and expenses are not necessarily indicative of trends in profitability, and management believes that gross voyage profit is a more appropriate measure of performance than revenues. Accordingly, the discussion below addresses variations in gross voyage profits rather than variations in revenues. RESULTS OF OPERATIONS GROSS VOYAGE PROFIT. Gross voyage profit increased 14.5% to $17.1 million in the First Quarter of 1996 as compared to $15.0 million in the same period of 1995. Gross voyage profit was positively impacted by the commencement of operations of the ENERGY ENTERPRISE, a U. S. Flag Coal Carrier under contract to a major U. S. utility company, and two Special Purpose Vessels ("SPV") and related barges under contract to provide transportation services to a major mining company. Improved freight rates for the Company's LASH vessels employed in liner service between ports on the U.S. Gulf/U.S. Atlantic Coast and South Asia (Trade Routes 18 and 17) also favorably impacted gross voyage profit. Partially offsetting these increases were lower charter rates on the Company's cape-size bulk carrier, and the redelivery of one of the Company's vessels at the end of its Military Sealift Command contract in late 1995. This vessel is currently being operated in the Company's Trans-Atlantic liner service. Vessel and barge depreciation for the First Quarter of 1996 increased to $8.0 million as compared to $6.1 million in the same period of 1995 due to the addition of the ENERGY ENTERPRISE and the two SPV's and related barges. OTHER INCOME AND EXPENSES. Administrative and general expenses increased slightly to $6.7 million in the First Quarter of 1996 as compared to $6.5 million in the same period of 1995. This increase was due primarily to the amortization of deferred costs related to information systems implemented in late 1995. Interest expense increased 15.5% to $7.3 million in the First Quarter of 1996 as compared to $6.3 million in the same period of 1995 primarily due to interest incurred on the financing of the ENERGY ENTERPRISE and the two SPV's and related barges. These increases were partially offset by reductions resulting from regularly scheduled payments on other outstanding debt. Investment income decreased from $776,000 in the First Quarter of 1995 to $426,000 in the First Quarter of 1996 reflecting a reduction in the balance of invested funds. The Company's 50% ownership interest in two PROBO vessels which produced the $226,000 of earnings from unconsolidated entities in First Quarter of 1995 was sold in late 1995. INCOME TAXES. The Company provided $1.3 million for federal income taxes in the First Quarter of 1996 at a statutory rate of 35% as compared to $1.1 for the same period of 1995 at the same rate. Income of unconsolidated entities is shown net of applicable taxes. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital increased from $13.4 million at December 31, 1995, to $18.4 million at March 31, 1996, after provision for current maturities of long-term debt of $41.2 million and capital lease obligations of $2.0 million. Cash and cash equivalents increased during the First Quarter of 1996 by $10.9 million to a total of $65.2 million. Positive cash flows were achieved from operating activities in the First Quarter of 1996 in the amount of $15.1 million. The major source of cash from operations was net income, adjusted for non-cash provisions such as depreciation and amortization. Net cash used for investing activities amounted to $6.3 million during the First Quarter of 1996. Major capital investments included $9.0 million for the conversion of two SPV's, $4.8 million for work on the ENERGY ENTERPRISE to meet classification requirements and for preventative maintenance and $1.4 million for the final payment on the SULPHUR ENTERPRISE, a Molten Sulphur Carrier delivered in late 1994. Other uses of cash included the addition of $1.0 million of deferred vessel drydocking charges. Proceeds from investing activities included $8.1 million received from the repayment of a long-term note receivable and the release of $3.7 million previously held in escrow as collateral for a loan. Cash used for other investments included the placement of $2.0 million in escrow for future payments on long-term debt. Net cash provided by financing activities during the First Quarter of 1996 totaled $2.1 million. Proceeds from the issuance of debt obligations of $19.8 million included $15.0 million drawn under the Company's lines of credit and $4.8 million drawn on a long-term loan associated with the acquisition and conversion of the two SPV's. Cash used for financing activities included $9.5 million for prepayment of a long-term debt and $6.6 for regularly scheduled payments on debt and capital lease obligations. Other uses of cash for financing activities included $1.2 million for deferred financing charges and $418,000 to meet common stock dividend requirements. During early Second Quarter of 1996, the Company contracted to purchase a LASH vessel for approximately $8.5 million. Assuming all requirements of the purchase contract are met and the purchase is concluded, certain additional costs will be incurred to bring the vessel up to the Company's normal operating standards. It is anticipated that this vessel will deliver in the Third Quarter of 1996 and will be operated in the Company's Trans-Atlantic service or one of its other services depending upon demand when the ship is ready for delivery. Initial financing will be through internally generated funds. To meet short-term requirements when fluctuations occur in working capital, the Company has available four lines of credit totaling $35.0 million of which $15.0 million was drawn at March 31, 1996, and repaid in early Second Quarter of 1996. In March 1995, the Financial Accounting Standards Board issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of". Adoption of the statement in 1996 did not have a material effect on the Company's financial position or results of operations. The Company has not been notified that it is a potentially responsible party in connection with any environmental matters. At a regular meeting held April 17, 1996, the Board of Directors declared a quarterly dividend of $.0625 per common share payable on June 21, 1996, to shareholders of record on June 7, 1996. PART II-OTHER INFORMATION Item 2. Changes in Securities (a) An amendment of the Certificate of Incorporation to regulate the ownership of the capital stock of the Corporation by persons who are not citizens of the United States was approved by shareholders at the Company's Annual Meeting on April 17, 1996. The Company is in the process of filing this amendment with the State of Delaware. See "Effect of Amendment on Stockholders" on page 14 of the Company's Definitive Proxy Statement dated March 12, 1996, filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, and incorporated herein by reference. This amendment in its entirety was included as Appendix A of the aforementioned Proxy Statement. Item 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Shareholders was held April 17, 1996. The matters voted upon and the results of the voting were as follows: (1) Election of Board of Directors: Shares Withheld Voted For Authority Niels W. Johnsen 6,013,573 31,093 Erik F. Johnsen 6,013,560 31,106 Harold S. Grehan 6,013,854 30,812 Niels M. Johnsen 6,013,564 31,102 Laurance Eustis 6,015,361 29,305 Raymond V. O'Brien 6,017,742 26,924 Edwin Lupberger 6,017,742 26,924 Edward K. Trowbridge 6,017,274 27,392 Erik L. Johnsen 6,012,427 32,239 (1) Ratification of Arthur Andersen, LLP, certified public accountants, as independent auditors for the Corporation for the fiscal year ending December 31, 1996: Shares Voted For 6,040,806 Shares Voted Against 1,876 Abstentions 1,984 (2) Proposed amendment of the Corporation's Certificate of Incorporation to regulate the ownership of the capital stock of the Corporation by persons who are not citizens of the United States as set forth in Appendix A of the aforementioned Proxy Statement: Shares Voted For 5,453,496 Shares Voted Against 8,536 Abstentions 1,921 Broker Non-Votes 580,713 Item 6. Exhibits and Reports on form 8-K (a) EXHIBIT INDEX Exhibit Number Description -------------- ----------- 27 Financial Data Schedule (b) No reports on Form 8-K have been filed for the three months ended March 31, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERNATIONAL SHIPHOLDING CORPORATION /S/ Gary L. Ferguson ____________________________________________ Gary L. Ferguson Vice President and Chief Financial Officer May 13, 1996 Date ___________________________ EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1996 MAR-31-1996 65181 3837 50492 0 10577 133338 692553 252378 651856 114911 292315 0 0 6756 161296 651856 0 95235 0 84775 7295 0 7295 3588 1340 2248 0 0 0 2248 0.34 0 AMOUNTS INAPPLICABLE OR NOR DISCLOSED AS A SEPARATE LINE ON THE BALANCE SHEET OR STATEMENT OF INCOME ARE REPORTED AS 0 HEREIN. NOTES AND ACCOUNTS RECEIVABLE - TRADE ARE REPORTED NET OF ALLOWANCES FOR DOUBTFUL ACCOUNTS IN THE BALANCE SHEET.
-----END PRIVACY-ENHANCED MESSAGE-----