-----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, LG61n9LYM9C/uxWxBxmSoJtSjYwsn1YkBZlySzQ5dsH2p8fJVOAb/2YzQ+N7cF+5 Go/V3JHnRs5Zw1klTeD70w== 0000278041-97-000009.txt : 19970515 0000278041-97-000009.hdr.sgml : 19970515 ACCESSION NUMBER: 0000278041-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97603199 BUSINESS ADDRESS: STREET 1: 650 POYDRAS ST STE 1700 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045295461 10-Q 1 FIRST QUARTER 1997 FORM 10-Q INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 x For the quarterly period ended March 31,1997 ------------- 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 31, 1997) ---------------- Part I - Financial Information INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (All Amounts in Thousands) (Unaudited)
March 31, December 31, ASSETS 1997 1996 ------------- ------------- Current Assets: Cash and Cash Equivalents $ 38,250 $ 43,020 Marketable Securities 2,209 2,727 Accounts Receivable, Net of Allowance for Doubtful Accounts of $236 and $256 in 1997 and 1996, Respectively: Traffic 33,212 42,404 Agents' 9,378 10,343 Claims and Other 2,102 3,048 Federal Income Taxes Receivable 1,201 1,366 Net Investment in Direct Financing Leases 1,991 2,033 Other Current Assets 7,815 6,216 Material and Supplies Inventory, at Cost 12,868 12,043 ------------- ------------ Total Current Assets 109,026 123,200 ------------- ------------ Net Investment in Direct Financing Leases 21,978 22,797 ------------- ------------ Vessels, Property and Other Equipment, at Cost: Vessels and Barges 676,390 676,267 Other Marine Equipment 7,515 7,500 Terminal Facilities 18,245 18,535 Land 2,317 2,317 Furniture and Equipment 18,464 17,401 ------------- ------------ 722,931 722,020 Less - Accumulated Depreciation (285,765) (276,222) ------------- ------------ 437,166 445,798 ------------- ------------ Other Assets: Deferred Charges in Process of Amortization 40,154 43,318 Acquired Contract Costs, Net of Accumulated Amortization of $19,311 and $18,706 in 1997 and 1996, Respectively 18,918 19,523 Due from Related Parties 425 443 Other 6,656 6,517 ------------- ------------ 66,153 69,801 ------------- ------------ $ 634,323 $ 661,596 ============= ============ The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (All Amounts in Thousands) (Unaudited)
March 31, December 31, LIABILITIES AND STOCKHOLDERS' INVESTMENT 1997 1996 ------------- ------------ Current Liabilities: Current Maturities of Long-Term Debt $ 31,279 $ 33,470 Current Maturities of Capital Lease Obligations 2,579 1,981 Accounts Payable and Accrued Liabilities 53,489 67,690 Current Deferred Income Tax Liability 387 811 Current Liabilities to be Refinanced (1,908) (7,680) ------------- ------------- Total Current Liabilities 85,826 96,272 ------------- ------------- Current Liabilities to be Refinanced 1,908 7,680 ------------- ------------- Billings in Excess of Income Earned and Expenses Incurred 6,324 8,635 ------------- ------------- Long-Term Capital Lease Obligations, Less Current Maturities 15,313 17,642 ------------- ------------- Long-Term Debt, Less Current Maturities 291,790 299,434 ------------- ------------- Reserves and Deferred Credits: Deferred Income Taxes 41,110 40,673 Claims and Other 19,448 18,853 ------------- ------------- 60,558 59,526 ------------- ------------- Commitments and Contingent Liabilities Stockholders' Investment: Common Stock 6,756 6,756 Additional Paid-in Capital 54,450 54,450 Retained Earnings 112,485 112,310 Less - Treasury Stock (1,133) (1,133) Unrealized Holding Gain on Marketable Securities 46 24 ------------- ------------- 172,604 172,407 ------------- ------------- $ 634,323 $ 661,596 ============= ============= The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (All Amounts in Thousands Except Share and Per Share Data) (Unaudited)
Three Months Ended March 31, March 31, 1997 1996 ------------- ------------- Revenues $ 83,519 $ 89,490 Subsidy Revenue 6,475 5,745 ------------- ------------- 89,994 95,235 ------------- ------------- Operating Expenses: Voyage Expenses 66,898 70,093 Vessel and Barge Depreciation 8,522 7,995 ------------- ------------- Gross Voyage Profit 14,574 17,147 ------------- ------------- Administrative and General Expenses 6,878 6,690 ------------- ------------- Operating Income 7,696 10,457 ------------- ------------- Interest: Interest Expense 7,001 7,295 Investment Income (372) (426) ------------- ------------- 6,629 6,869 ------------- ------------- Income Before Provision for Income Taxes 1,067 3,588 ------------- ------------- Provision for Income Taxes: Federal 389 1,290 State 85 50 ------------- ------------- 474 1,340 ------------- ------------- Net Income $ 593 $ 2,248 ============= ============= Earnings Per Common Share: Net Income $ 0.09 $ 0.34 ============= ============= 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 (All Amounts in Thousands) (Unaudited)
Net Additional Unrealized Common Paid-In Retained Treasury Holding Stock Capital Earnings Stock Gain/(Loss) Total ------------------------------------------------------------ Balance at December 31, 1995 $6,756 $54,450 $106,158 ($1,133) $30 $166,261 Net Income for Year Ended December 31, 1996 - - 7,823 - - 7,823 Cash Dividends - - (1,671) - - (1,671) Unrealized Holding Loss on Marketable Securities, Net of Deferred Taxes - - - - (6) (6) ------------------------------------------------------------ Balance at December 31, 1996 $6,756 $54,450 $112,310 ($1,133) $24 $172,407 ============================================================= Net Income for Three Months Ended March 31, 1997 - - 593 - - 593 Cash Dividends - - (418) - - (418) Unrealized Holding Gain on Marketable Securities, Net of Deferred Taxes - - - - 22 22 ----------------------------------------------------------- Balance at March 31, 1997 $6,756 $54,450 $112,485 ($1,133) $46 $172,604 ============================================================ The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (All Amounts in Thousands) (Unaudited)
Three Months Ended March 31, 1997 1996 ---------- ---------- Cash Flows from Operating Activities: Net Income $ 593 $ 2,248 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 9,226 8,519 Amortization of Deferred Charges and Other Assets 5,628 4,495 Provision for Deferred Income Taxes 389 1,360 Loss on Sale of Assets - 3 Changes in: Accounts Receivable 10,504 (3,658) Net Investment in Direct Financing Leases 861 534 Inventories and Other Current Assets (2,369) 2,320 Other Assets 374 (252) Accounts Payable and Accrued Liabilities (10,081) 7,201 Federal Income Taxes Payable (192) (7,718) Unearned Income (2,311) 1,049 Reserve for Claims and Other Deferred Credits 595 (986) ---------- ---------- Net Cash Provided by Operating Activities 13,217 15,115 ---------- ---------- Cash Flows from Investing Activities: Purchase of Vessels and Other Property (4,073) (15,987) Additions to Deferred Charges (2,479) (1,002) Proceeds from Short-Term Investments - 726 Other Investing Activities 573 9,919 ---------- ---------- Net Cash Used by Investing Activities (5,979) (6,344) ---------- ---------- Cash Flows from Financing Activities: Proceeds from Issuance of Debt 38,657 19,814 Reduction of Debt and Capital Lease Obligations (50,224) (16,053) Additions to Deferred Financing Charges (23) (1,214) Common Stock Dividends Paid (418) (418) ---------- ---------- Net Cash (Used) Provided by Financing Activities (12,008) 2,129 ---------- ---------- Net (Decrease) Increase in Cash and Cash Equivalents (4,770) 10,900 Cash and Cash Equivalents at Beginning of Period 43,020 54,281 ---------- ---------- Cash and Cash Equivalents at End of Period $ 38,250 $ 65,181 ========== ========== The accompanying notes are an integral part of these statements.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARCH 31, 1997 (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, 1996. 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 1997. 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 1997 interim results are not necessarily indicative of the results of operations for the full year 1997. 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. Note 2. Current Liabilities to be Refinanced The Company has $1,908,000 remaining to be drawn on a long-term loan with a commercial bank obtained to finance the purchase and refurbishment of a LASH vessel to provide ocean transportation services. The costs remaining for the refurbishment are expected to be paid within one year and are included in "Accounts Payable and Accrued Liabilities" on the Company's March 31, 1997, consolidated balance sheet. To properly reflect the Company's "Current Liabilities" as of March 31, 1997, this amount to be refinanced of $1,908,000 was reclassified as a long-term liability and included in "Current Liabilities to be Refinanced". Note 3. Earnings Per Share In February of 1997, the Financial Accounting Standards Board issued Statement No. 128 (FAS 128), "Earnings Per Share," which simplifies the computation of earnings per share. FAS 128 is effective for financial statements issued for periods ending after December 1, 1997, and requires restatement for all prior period earnings per share data presented. Earnings per share calculated in accordance with FAS 128 would be unchanged for the periods presented. INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements made in this report or elsewhere by, or on behalf of, the Company that are not based on historical facts are intended to be forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about future events and are therefore subject to risks and uncertainties. The Company cautions readers that certain important factors have affected and may affect in the future the Company's actual consolidated results of operations and may cause future results to differ materially from those expressed in or implied by any forward-looking statements made in this report or elsewhere by, or on behalf of, the Company. For a description of certain of these important factors, refer to the Company's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1996. 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 THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1996 Gross Voyage Profit - ------------------- Gross voyage profit decreased 15.0% to $14.6 Million in the first quarter of 1997 as compared to $17.1 Million in the same period of 1996. Gross voyage profit was primarily impacted by lower operating results from the Company's LASH vessels employed in its liner services. The Company's liner service between ports on the U.S. Gulf/U.S. Atlantic Coast and South Asia produced less gross voyage profit primarily due to an increase in the number of days out of service for vessel drydocking during the first quarter of 1997 as compared to the same period last year. Early in the first quarter of 1997, the Company added the newly acquired and refurbished LASH vessel, the Atlantic Forest, to its TransAtlantic liner service. This added capacity coincided with a soft spot in the market complicated by a strengthened dollar that tended to reduce U.S. exports resulted in a lower gross voyage profit from this service during the first quarter of 1997 as compared to the first quarter of 1996. To a lesser degree, the following factors contributed to the decrease in gross voyage profit: scheduled charterhire rate reductions, effective January 1, 1997, for the Company's three Roll-On/Roll-Off vessels employed in the Military Prepositioning Service; lower spot market charterhire rates on the Company's Cape-Size Bulk Carrier; the lay-up for most of the first quarter of 1997 of one of the Company's ice-strengthened multi-purpose vessels which operated in the Company's TransAtlantic liner service during the first quarter of last year (this vessel will commence a Military Sealift Command (MSC) charter in the third quarter of this year); and a reduction in the amount of coal moved by the Company's domestic river operations due to adverse conditions on the Mississippi and Ohio Rivers. These decreases in gross voyage profit were partially offset by the operation of the Company's U.S. Flag Coal Carrier, the Energy Enterprise, on long-term contract to a major U.S. utility for the full first quarter of 1997, as compared to the first quarter of 1996, when the vessel operated for only part of the quarter. Additionally, there was an increase in the amount of cargo moved by the Company's Special Purpose Vessels ("SPV") and barges under long-term contract providing transportation services to a major mining company in Indonesia as compared to the same period in 1996. The Company's Operating Differential Subsidy (ODS) agreement for its four LASH vessels in Waterman's liner service expired for each of the vessels as their respective 1996 year-end cross-over voyages terminated during the first and second quarters of 1997. Upon the expiration of ODS, these vessels began participation in the Maritime Subsidy Program (MSP), which provides for subsidy payments of approximately $2.1 Million per vessel per year, as compared to approximately $5.8 Million per vessel per year under the ODS. In an effort to overcome the decrease in the amount of subsidy payments to be provided under MSP, as compared to ODS, the Company is pursuing various options such as reduction of shipboard and shoreside costs. Two of the Company's Pure Car Carriers completed their first full quarter as participants in the MSP during the first quarer of 1997. Vessel and barge depreciation for the first quarter of 1997 increased 6.6% to $8.5 Million as compared to $8.0 Million in the same period of 1996 primarily because the Energy Enterprise was in service for the full first quarter of this year but did not commence operations until February of 1996. Additionally, depreciation expense increased because the Atlantic Forest and associated LASH barges, which the Company purchased and refurbished late last year, began operations in early 1997. These increases in depreciation expense were partially offset by a decrease resulting from the sale, in mid-1996, of the Company's semi- submersible barge, the Caps Express. Other Income and Expenses - ------------------------- In its continuing effort to decrease overhead expenses, the Company effected a small reduction in force at the end of the first quarter of this year. Severance payments resulting from this reduction were the primary reason for the increase in administrative and general expenses from $6.7 Million in the first quarter of 1996 to $6.9 Million in the same period in 1997. Interest expense decreased 4.0% from $7.3 Million in the first quarter of 1996 to $7.0 Million in the same period of 1997 primarily due to regularly scheduled payments on existing outstanding debt, the early repayment of a $9.5 Million long-term debt at the end of the first quarter of 1996, and the expiration last year of an interest rate swap agreement on which the Company had incurred interest during the first quarter of 1996. These decreases were partially offset by increases resulting from interest incurred on higher outstanding balances drawn on lines of credit, additional draws on the long-term financing of the SPV's, and the financing of the Atlantic Forest and associated barges. Investment income decreased from $426,000 in the first quarter of 1996 to $372,000 in the same period of 1997 reflecting a reduction in the balance of invested funds. Income Taxes - ------------ The Company provided $474,000 for Federal income taxes in the first quarter of 1997 as compared to $1.3 Million in the first quarter of 1996. The statutory rate was 35% for both periods. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital decreased from $26.9 Million at December 31, 1996, to $23.2 Million at March 31, 1997. Cash and cash equivalents decreased during the first quarter of 1997 by $4.8 Million to a total of $38.3 Million. Positive cash flows were achieved from operating activities in the first quarter of 1996 in the amount of $13.2 Million. The major sources of cash from operations were net income, adjusted for non-cash provisions such as depreciation and amortization, and collections on Accounts Receivable. These sources of cash were partially offset by the use of cash to reduce Accrued Liabilities and Accounts Payable. Net cash used for investing activities amounted to $6.0 Million during the first quarter of 1997. Major investments included capital improvements on the Atlantic Forest, Energy Enterprise, and the SPV's which amounted to $1.8 Million, $812,000, and $572,000, respectively. Other uses of cash included the addition of $2.5 Million in deferred vessel drydocking charges. Proceeds from investing activities included $573,000 received upon the maturity of certain marketable securities. Net cash used by financing activities during the first quarter of 1997 totaled $12.0 Million. Proceeds from the issuance of debt obligations of $38.7 Million included $28.0 Million drawn under the Company's lines of credit, of which $18.5 Million was outstanding as of March 31, 1997, $6.5 Million from the refinancing of balloon notes due on certain of the Company's debt early this year, and $4.2 Million associated with the refurbishment of the Atlantic Forest. Cash used for financing activities included $39.5 Million to repay amounts which were drawn under lines of credit in late 1996 and early 1997, $10.7 Million for regularly scheduled payments on other outstanding debt and capital lease obligations, and $418,000 to meet common stock dividend requirements. To meet short-term requirements when fluctuations occur in working capital, the Company has available three lines of credit totaling $35.0 Million. As of March 31, 1997, $18.5 Million was drawn on these lines of credit, of which $7.0 Million was repaid early in the second quarter of 1997. 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 16, 1997, the Board of Directors declared a quarterly dividend of 6.25 cents per Common Share payable on June 20, 1997, to shareholders of record on June 6, 1997. PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders was held April 16, 1997. The matters voted upon and the results of the voting were as follows: (1) Election of Board of Directors: Shares Voted For Withheld Authority ---------------- ------------------ Niels W. Johnsen 5,798,589 50,299 Erik F. Johnsen 5,798,589 50,299 Harold S. Grehan 5,798,589 50,299 Niels M. Johnsen 5,798,589 50,299 Laurance Eustis 5,799,739 49,149 Raymond V. O'Brien 5,800,464 48,424 Edwin Lupberger 5,800,464 48,424 Edward K. Trowbridge 5,799,996 48,892 Erik L. Johnsen 5,797,164 51,724 (2) Ratification of Arthur Andersen, LLP, certified public accountants, as independent auditors for the Corporation for the fiscal year ending December 31, 1997: Shares Voted For 5,815,853 Shares Voted Against 4,802 Abstentions 28,233 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBIT INDEX Exhibit Number Description ----------------- ---------------------------- Part I Exhibits: 27 Financial Data Schedule Part II Exhibits: 3 Restated Certificate of Incorporation, as amended, and By-Laws of the Registrant (filed with the Securities and Exchange Commission as Exhibit 3 to the Registrant's Form 10-Q for the quarterly period ended June 30, 1996, and incorporated herein by reference) (b) No reports on Form 8-K have been filed for the three months ended March 31, 1997. SIGNATURES Pursuant to the requirements of the Securities and 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 Date May 13, 1997 ----------------- EX-27 2 FINANCIAL DATA SCHEDULE
5 1000 3-MOS DEC-31-1997 MAR-31-1997 38250 2209 44692 236 12868 109026 722931 285765 634323 85826 309011 0 0 6756 165848 634323 0 89994 0 82298 7001 0 7001 1067 474 593 0 0 0 593 0.09 0.09
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