-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, PvxpdUJxElW8NALXZkU0PpPjtY0/ia9sBhT2J8gayG1qzYnewOSxgraNpG62H9Rd EsfK8c4AZWrdlsSKZHhNjQ== 0000732780-94-000018.txt : 19941111 0000732780-94-000018.hdr.sgml : 19941111 ACCESSION NUMBER: 0000732780-94-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMI CORP CENTRAL INDEX KEY: 0000732780 STANDARD INDUSTRIAL CLASSIFICATION: 4412 IRS NUMBER: 132625280 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11573 FILM NUMBER: 94558633 BUSINESS ADDRESS: STREET 1: 90 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2129861960 MAIL ADDRESS: STREET 1: 90 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: OGDEN MARINE INC DATE OF NAME CHANGE: 19831212 10-Q 1 FORM 10-Q FOR THE THIRD QUARTER ENDED 9/30/94 Being Filed Pursuant to Rule 901(d) of Regulation S-T FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934. For the period from to Commission File Number 2-87930 OMI CORP. (Exact name of registrant as specified in its charter) Delaware 13-2625280 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 90 Park Avenue, New York, N.Y.10016 (Address of principal(Zip Code) executive offices) Registrant's telephone number, including area code (212) 986-1960 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 and 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 requirements 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 November 9, 1994: Common Stock, par value 0.50 per share 30,682,268 shares OMI CORP. AND SUBSIDIARIES INDEX Page PART I: FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 1994 and 1993 3 Condensed Consolidated Balance Sheets- September 30, 1994 and December 31, 1993 4 Consolidated Statements of Changes in Stockholders' Equity for the nine months ended September 30, 1994 5 Condensed Statements of Consolidated Cash Flows for the nine months ended September 30, 1994 and 1993 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II: OTHER INFORMATION 16 SIGNATURES 17 OMI CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
For the Three Months For the Nine Months Ended September 30 Ended September 30 1994 1993 1994 1993 Revenues: Voyage revenues $ 63,297 $ 67,427 $194,436 $201,670 Other income 1,338 1,672 4,080 3,313 Total revenues 64,635 69,099 198,516 204,983 Operating Expenses: Vessel and voyage 53,295 53,821 156,904 157,777 Depreciation and amor- tization 9,191 9,030 28,794 26,541 Operating lease 1,051 1,159 4,888 4,984 General and administrative 4,180 4,014 12,814 11,565 Total operating expenses 67,717 68,024 203,400 200,867 Operating (loss) income (3,082) 1,075 (4,884) 4,116 Other Income (Expense): Gain on disposal of assets-net 7,214 2,310 10,173 5,347 Interest expense-net (6,665) (4,410) (20,005) (13,682) Minority interest in income of subsidiary (160) (105) (261) (492) Other-net (553) (553) Net other expense ( 164) (2,205) (10,646) (8,827) Loss before income taxes and equity in operations of joint ventures (3,246) (1,130) (15,530) (4,711) (Benefit)/provision for income taxes ( 751) 2,862 (5,138) 2,329 Loss before equity in operations of joint ventures (2,495) (3,992) (10,392) (7,040) Equity in operations of joint ventures 1,997 2,095 2,756 6,228 Net loss $ ( 498) $ (1,897) $ (7,636) $ (812) Net loss per common share $ (0.02) $ (0.06) $ (0.25) $ (0.03) Weighted average number of shares of common stock outstanding 30,406 30,601 30,378 30,583 See notes to condensed consolidated financial statements. /TABLE OMI CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
SEPT. 30, DEC. 31, 1994 1993 (UNAUDITED) ASSETS Current assets: Cash (including cash equivalents: September 1994-$22,226 and December 1993-$34,848) $ 39,573 $ 45,321 Marketable securities 2,568 6,021 Traffic and other receivables 23,786 22,842 Other current assets 7,843 6,826 Total current assets 73,770 81,010 Capital construction and other restricted funds 13,258 13,786 Vessels and other property, at cost 709,279 761,741 Less accumulated depreciation (285,997) (308,058) Vessels and other property-net 423,282 453,683 Investments in, and advances to, joint ventures 85,962 77,802 Long-term investments 19,507 16,912 Other assets and deferred charges 27,129 28,323 Total $ 642,908 $ 671,516 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 39,378 $ 32,751 Current portion of long-term debt 18,106 15,302 Total current liabilities 57,484 48,053 Long-term debt 261,107 282,325 Deferred income taxes payable 98,717 104,003 Advance time charter revenues and other liabilities 9,917 14,372 Minority interest in subsidiary 2,998 2,737 Stockholders' equity 212,685 220,026 Total $ 642,908 $ 671,516 See notes to condensed consolidated financial statements. /TABLE OMI CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (UNAUDITED) (IN THOUSANDS)
Cumulative Common Stock Capital Retained Translation Shares Amount Surplus Earnings Adjustment Balance at January 1, 1994 30,615 $15,307 $128,900 $ 64,496 $ 4,912 Net loss (7,636) Exercise of stock options 52 26 237 Issuance of restricted stock awards 15 7 87 Amortization of unearned compensation Net change in valuation account Purchase of treasury stock Sale of treasury stock 732 Balance at September 30, 1994 30,682 $15,340 $129,956 $ 56,860 $ 4,912 Unearned Unearned Unrealized Compensation Compensation Gain on Total From Restricted Investment Treasury Stockholders' ESOP Stock -net Stock Equity Balance at January 1, 1994 $ (2,159) $(1,057) $ 9,709 $ (82) $220,026 Net loss (7,636) Exercise of stock options 263 Issuance of restricted stock awards (94) Amortization of unearned compensation 1,164 142 1,306 Net change in valuation account (754) (754) Purchase of treasury stock (2,431) (2,431) Sale of treasury stock 1,179 1,911 Balance at September 30, 1994 $ ( 995) $(1,009) $ 8,955 $(1,334) $212,685 See notes to condensed consolidated financial statements. /TABLE OMI CORP. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (IN THOUSANDS) (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (7,636) $ (812) Adjustments to reconcile net loss to net cash (used) provided by operating activities: (Decrease) increase in deferred taxes (4,880) 3,014 Depreciation and amortization 28,794 26,541 Amortization of unearned compensation 1,306 68 Gain on disposal of assets - net (10,173) (5,347) Equity in operations of joint ventures (2,756) (6,228) Other-net (192) Changes in assets and liabilities: (Increase) decrease in receivables and other current assets (1,961) 7,679 Increase (decrease) in accounts payable and accrued expenses 6,955 (1,375) Advances to joint ventures - net (6,683) (13,459) Decrease in other assets and deferred charges 275 4,797 (Decrease) increase in advance time charter revenues and other liabilities (4,343) 1,648 Other assets and liabilities - net (158) 493 Net cash (used) provided by operating activities (1,452) 17,019 CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES: Proceeds from disposition of assets 23,690 4,000 Proceeds from sale of marketable securities 3,749 12 Proceeds from sale of investments 6,915 Additions to vessels and other property (14,360) (14,477) Withdrawals from Capital construction and other restricted funds 631 Proceeds and interest received on Capital construction and other restricted funds (678) (531) Dividends received from joint ventures 2,450 11,565 Investments in joint ventures (1,597) (450) Net cash provided by investing activities 13,254 7,665 CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: Cash proceeds from notes payable to bank - net 12,000 Cash proceeds from issuance of long-term debt 12,050 7,000 Net proceeds from issuance of common stock 263 157 Purchase of treasury stock (1) Payments on long-term debt (29,863) (41,646) Dividends paid (2,140) Net cash used by financing activities (17,550) (24,630) Net (decrease) increase in cash and cash equivalents ( 5,748) 54 Cash and cash equivalents at beginning of period 45,321 16,850 Cash and cash equivalents at end of period $ 39,573 $ 16,904 See notes to condensed consolidated financial statements.
OMI CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of fin- ancial position, results of operations and changes in cash flows in conformity with generally accepted accounting principles. However, in the opinion of the management of OMI Corp. and subsidiaries ("OMI" or "the Company"), all adjustments (comprising only normal recurring accruals) necessary for a fair presentation of operating results have been included in the statements. Certain reclassifications have been made to the 1993 financial statements to conform to the 1994 presentations. Note 2 - Income Taxes The benefit for income taxes for the nine months ended September 30, 1994 varied from statutory rates as follows: (in thousands) Tax benefit calculated at statutory rates $(4,471) Equity in operations of joint ventures of $2,260,000 not tax effected as management considers it to be permanently invested (791) Other 124 Total $(5,138) The Company has not provided deferred income taxes on its equity in the undistributed earnings of foreign corporate joint ventures accounted for under the equity method other than Amazon Transport, Inc. ("Amazon"). These earnings are considered by management to be permanently invested in the business. Note 3 - Supplemental Cash Flow Information Cash payments include interest of approximately $19,105,000 and $16,093,000 for the nine months ended September 30, 1994 and 1993, respectively, and income taxes of $6,358,000 for the nine months ended September 30, 1993. There were no income taxes paid during the nine months ended September 30, 1994. Non-cash transactions which have been excluded from the consolidated statement of cash flows for the nine months ended September 30, 1994 and 1993 include accrued capital expenditures of $(328,000) and $2,228,000, respectively. Note 4 - Joint Venture Information Amazon and Wilomi, Inc. ("Wilomi") are both 49 percent owned by OMI and are accounted for using the equity method. Summarized income statement information, in accordance with Regulation S-X Rule 10-01(b)(1), for the three months and nine months ended September 30, 1994 and 1993 for Amazon and Wilomi are as follows:
For the Three Months Ended September 30, Amazon Wilomi 1994 1993 1994 1993 (in thousands) Revenues $ 2,102 $ 3,358 $ 5,464 $ 5,850 Expenses 655 1,540 3,010 3,559 Operating income 1,447 1,818 2,454 2,291 Net income $ 1,467 $ 1,859 $ 1,357 $ 1,424 For the Nine Months Ended September 30, Amazon Wilomi 1994 1993 1994 1993 (in thousands) Revenues $ 5,210 $ 9,222 $ 15,400 $ 17,876 Expenses 4,251 3,779 10,129 10,861 Operating income 959 5,443 5,271 7,015 Net income $ 1,041 $ 5,618 $ 2,167 $ 4,394
Note 5 - Net Loss per Common Share Net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the period. Shares issuable upon the exercise of stock options have not been included in the computation because they do not have a material effect on net loss per common share. Note 6 - Credit Lines At September 30, 1994, OMI had available and unused a total of $65,000,000 in four short-term lines of credit with banks at variable rates based on LIBOR. Subsequent to October 1, 1994, the Company drew down $3,000,000 of a line of credit. Note 7 - Commitments OMI has committed with a joint venture partner to construct a vessel to be built in the Peoples Republic of China for a total cost of approximately $54,400,000. The vessel is scheduled to be delivered in the second quarter of 1996. OMI guarantees 49 percent, through a joint venture subsidiary, of the shipbuilding contract as a backup guarantee to the joint venture partner. Astilleros Espanoles, S.A. of Madrid, Spain has notified the Company that it will not proceed with the construction of the two chemical/product tankers (and two option vessels) which were the subject of a previously announced letter of intent. Note 8 - Guaranteed Debt OMI acts as a co-guarantor for a portion of the debt incurred by joint ventures with affiliates of two of its joint venture partners. The guaranteed portion of such debt was approximately $110,697,000 at September 30, 1994, with OMI's share of such guarantees being approximately $54,547,000. OMI also is a guarantor for one of its joint venture's revolving line of credit of up to $4,000,000 at September 30, 1994, with a guarantee to OMI from its joint venture partner of 50 percent of the amount guaranteed by OMI. The Company and its joint venture partners have committed to fund any working capital deficiencies which may be incurred by their joint venture investments. At September 30, 1994, no such deficiencies have been funded. Note 9 - Drydock Accrual Adjustment In September 1994, OMI adjusted the accrual for drydock expense for its vessels by $3,336,000 ($2,168,000 after tax, or, $.07 per share). The adjustment reflects a reduction of estimated costs associated with OMI's ongoing evaluation of its drydock program. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations for the Nine Months Ended September 30, 1994 Versus September 30, 1993 OMI Corp. ("OMI" or the "Company"), is a diversified shipping company active in both the U.S. flag and international markets. OMI operates in markets for crude oil, refined petroleum, chemicals, dry bulk and LPG. Results of operations of OMI include operating activities of the Company's domestic and foreign flag wholly-owned, leased and chartered-in vessels for the nine and three months ended September 30, 1994 and 1993. Net Voyage Revenues The Company's vessels are operating under a variety of charters. The nature of these arrangements is such that, without a material variation in net voyage revenues (voyage revenues less vessel and voyage expenses), the revenues and expenses attributable to a vessel employed under one type of charter or contract can differ substantially from those attributable to the same vessel if employed 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 voyage revenues and vessel and voyage expenses can fluctuate sub- stantially from one period to another, even if the number of vessels deployed, the number of voyages completed, the amount of cargo carried and the net voyage revenues derived from the vessels were to remain constant. As a result, fluctuations in voyage revenues and vessel and voyage expenses are not necessarily indicative of trends in profitability. The discussion that follows will address variations in net voyage revenues. Net voyage revenues decreased $6,361,000 or 14 percent during the nine months ended September 30, 1994 in comparison to the corresponding 1993 period. The net decrease resulted primarily from a decline in freight rates for federal cargo assistance programs for three domestic vessels which were operating under these programs in both years, reduced revenues for three vessels that were offhire due to drydockings an aggregate of 89 days, a vessel sold in July 1994, and two vessels disposed of in October 1993. The decrease in voyage revenues was off-set, in part, by revenues generated by two vessels acquired in the fourth quarter of 1993, and increased revenue for a vessel operating on a time charter as well as 28 additional operating days in 1994. The Company's largest U.S. flag vessel, the OMI Columbia, continued to have intermittent employment for most of 1994. However, in October, the vessel began a voyage carrying grain to Bangladesh. Voyage revenues decreased $7,234,000 or four percent during the nine months ended September 30, 1994 in comparison to the 1993 period. The net decrease resulted primarily from a reduction in revenues for three domestic vessels sold July 21, 1994, (aggregating 213 less operating days in 1994), lower rates in 1994 for six domestic vessels, three of which were operating under federal cargo assistance programs with the remaining operating in the edible oil trade, four vessels which were drydocked in 1994 for an aggregate of 105 days, two vessels which were disposed of in the fourth quarter of 1993, and a decrease in voyage revenue for three vessels, which were operating in the spot market in 1993, currently on time charters. The decreases in voyage revenue were offset, in part, by increases resulting from revenues generated by the addition of four vessels, two purchased and two chartered in during the fourth quarter of 1993, revenues from a vessel purchased in mid-1993 which operated primarily under a federal cargo assistance program, and increased revenues for a vessel, which was on a time charter in 1993, currently operating in the spot market. Net vessel and voyage expenses decreased $873,000 or one percent. The net de- crease was primarily attributable to lower operating expenses for the three vessels sold in July 1994, two vessels disposed of in 1993, lower voyage expenses for three vessels, which operated in the spot market in 1993, currently operating on time charters, adjustments aggregating $3,336,000 over the fleet to drydock accruals, and decreased voyage expenses, specifically cargo discharging costs, for two vessels which were carrying grain cargos in 1993 compared to 1994 voyages in different trades. Decreases in vessel and voyage expenses were partially offset by expenses for a vessel purchased in the second quarter of 1993, the four vessels added during the fourth quarter of 1993, and a vessel acquired in April 1994. Results of Operations for the Three Months Ended September 30, 1994 Versus September 30, 1993 Net voyage revenues decreased $3,604,000 or 26 percent, for the three months ended September 30, 1994 compared to the same period in 1993. Voyage revenues decreased a net of $4,130,000, and vessel and voyage expenses decreased a net of $526,000. The decreases in operating results were due primarily to lower rates earned by three vessels operating under federal programs, the three vessels sold in July 1994, and decreased revenue from a vessel laid up for 45 days during the 1994 third quarter. A portion of the decrease in results was offset by a vessel purchased in December 1993 that is operating in the spot market. In addition, in the third quarter, OMI adjusted the accrual for drydock expense for its vessels by $3,336,000. The adjustment reflects a reduction in estimated costs associated with the Company's ongoing evaluation of its drydock program. Other Income Other income consists primarily of management fees received from affiliates and/or other parties and dividends. For the nine months ended September 30, 1994, other income increased $767,000 or 23 percent in comparison to the same period in 1993. The increase in 1994 resulted primarily from increased fees to manage the Ready Reserve Fleet under a new contract which began July 1, 1993, and dividend received from a foreign investment in which the Company holds a minority position. Other income decreased $334,000 or 20 percent in the third quarter of 1994 compared to the third quarter of 1993. Other Operating Expenses The Company's operating expenses, other than vessel and voyage expenses, consist of depreciation and amortization, operating lease expense and general and administrative expenses. These expenses increased $3,406,000 in the nine months ended September 30, 1994. Depreciation expense increased eight percent due to the shortening of the useful lives of six domestic vessels and the purchase of four vessels, offset by the termination of depreciation for the three vessels sold in July 1994. General and administrative expenses increased 11 percent primarily from increased professional fees, salaries, travel, marketing and occupancy costs. Other operating expenses increased $219,000 or two percent for the three months ended September 30, 1994 compared to the three months ended September 30, 1993, primarily due to an increase in depreciation expense and general and administrative expenses. Other Income (Expense) Other income (expense) consists of gain on disposal of assets-net, interest expense-net, minority interest and other-net. The increase in net other expense of $1,819,000 or 21 percent for the nine months ended September 30, 1994 over the same period in 1993 is primarily due to the increase in interest expense pertaining to the issuance of $170,000,000, 10.25 percent Senior Notes ("Notes") in November 1993. The Company repurchased $5,800,000 of these Notes in the third quarter of 1994 which will result in a decrease in interest expense in the future. In addition, the Company pre-paid $9,496,000 in debt on the OMI Columbia which will further reduce interest expense. Net other expense decreased $2,041,000 or 93 percent primarily due to the gain on sale of three vessels in the third quarter of 1994 offset by increased interest expense on the Notes in comparison to the 1993 quarter. Benefit for Income Taxes The benefit for income taxes of $5,138,000 and $751,000 for the nine and three months, respectively, ended September 30, 1994 varied from statutory rates by excluding the tax effect on the equity in operations of joint ventures, other than Amazon Transport, Inc., as management considers such earnings to be permanently invested. Equity in Operations of Joint Ventures Equity in operations of joint ventures for nine months ended September 30, 1994, was $2,756,000 or $3,472,000 less than the $6,228,000 equity recorded for the nine months ended September 30, 1993. The decline in 1994 is primarily due to a vessel in a 49 percent owned joint venture which operated under a time charter until July 1993 at which time it began operating in the spot market at lower rates. Additionally, two other 49 percent owned joint ventures experienced declines in earnings pertaining to three vessels which operated in the spot market in both years and for start-up costs of a product tanker revenue pool formed in December 1993. These declines were offset, in part, by the gain on the sale of a vessel owned by a 49.9 percent joint venture. Equity in operations of joint ventures was $1,997,000 in the third quarter of 1994 compared to $2,095,000 in the third quarter of 1993. The decline in equity for the quarter is primarily due to the decline in revenue from two vessels owned by two 49 percent joint ventures, and OMI's portion of the pool losses in 1994. Losses have been offset by a reduction in drydock expense recorded by various joint ventures and a reduction in depreciation due to the extension of the useful lives of five vessels in two joint ventures. Balance Sheet The decrease in Marketable securities of $3,453,000 or 57 percent, from December 31, 1993 to September 30, 1994 was due to the sale of 747,225 shares of Chiles Offshore Corporation (now Noble Drilling Corporation) stock during February 1994. The increase of $2,595,000 or 15 percent in long-term investment is primarily due to the recording of the unrealized gain on securities available for sale as of September 30, 1994. Liquidity and Capital Resources The Company's working capital of $16,286,000 at September 30, 1994 was $16,671,000 or 51 percent less than working capital of $32,957,000 at December 31, 1993. Cash and cash equivalents of $39,573,000 decreased $5,748,000 or 13 percent from the balance of $45,321,000 at December 31, 1993. During the nine months ended September 30, 1994, the source of the Company's liquidity was issuance of debt and sale of vessels. The Company used such proceeds for the prepayment of certain debt. For the nine months ended September 30, 1994, net cash used by operating activities was $1,452,000 which was a decrease of $18,471,000 or 109 percent from net cash provided by operations of $17,019,000 for the comparable period in 1993. Net cash provided by investing activities was $13,254,000 in the first nine months of 1994 versus net cash provided by investing activities of $7,665,000 in the first nine months of 1993. On July 21, 1994, OMI received proceeds of $23,682,000 from the sale of three domestic vessels for a gain of approximately $7,177,000. The Company also received $2,450,000 in dividends from Amazon Transport, Inc. ("Amazon") in 1994 and $11,565,000 in 1993. All joint venture earnings are considered to be permanently invested, with the exception of Amazon, and are not available for distribution. There is no certainty that Amazon will have sufficient earnings to pay dividends in the future. Therefore, the Company cannot rely on dividends or loans from Amazon to improve liquidity. With the issuance of the $170,000,000 Notes on November 3, 1993, the Company improved its liquidity and financial position and, together with its four unused short-term lines of credit aggregating $62,000,000, is in the position to meet all current and future obligations, and to acquire replacement and additional vessels as the opportunity and need arises. OMI has purchased $5,800,000 of its Senior Notes at a discount, which allowed it to reduce its future interest charges. During the nine months ended September 30, 1994, OMI received cash from other significant activities: * proceeds of $12,050,000 from the issuance of long-term debt, and * proceeds of $3,749,000 received from the sale of Chiles stock. Other significant disbursements during the nine months ended September 30, 1994 were: * $29,863,000 payments on long-term debt, including approximately $15,000,000 of prepayments; * additions to vessels and other property of $14,360,000, and * investment in joint ventures of $1,597,000, primarily for contribu- tions towards a new vessel acquired by a joint venture in January 1994. Commitments OMI has committed, with a joint venture partner, to construct a vessel to be built in the Peoples Republic of China for a cost of approximately $54,400,000. The vessel is scheduled to be delivered in the second quarter of 1996. OMI guarantees 49 percent, through a joint venture subsidiary, of the shipbuilding contract as a backup guarantee to the joint venture partner. Astilleros Espanoles, S.A. of Madrid, Spain has notified the Company that it will not proceed with the construction of the two chemical/product tankers (and two option vessels) which were the subject of a previously announced letter of intent. OMI acts as a co-guarantor for a portion of the debt incurred by joint ventures with affiliates of two of its joint venture partners. Such debt was approximately $110,697,000 at September 30, 1994, with OMI's share of such guarantees being approximately $54,547,000. OMI also is a guarantor for one of its joint venture's revolving line of credit of up to $4,000,000 at September 30, 1994, with a guarantee to OMI from its joint venture partner of 50 percent of the amount guaranteed by OMI. The Company and its joint venture partners have committed to fund any working capital deficiencies which may be incurred by their joint venture investments. At September 30, 1994, no such deficiencies have occurred which have required funding. PART II: OTHER INFORMATION Item 1 - Legal Proceedings None. Item 2 - Changes in Securities None. Item 3 - Defaults upon Senior Securities None. Item 4 - Submission of Matters to a Vote of Security Holders None. Item 5 - Other Information None. Item 6 - Exhibits and Reports on Form 8-K a. Exhibits 10.46 Parallel Maritime Inc., a 49 percent owned joint venture of OMI, ratifies and confirms the making of the Backup Guarantee in favor of Anders Wilhelmsen & Co. relating to a Shipbuilding Contract dated 3-11-94 between Parallel to Dalian New Shipyard/China Shipbuilding, Trading Co., Ltd. 10.47 Release of First Preferred Ship Mortgages on the OMI Charger and OMI Champion in exchange for guarantees made by OMI Courier Transport, Inc. and OMI Patriot Transport, Inc. to Den norske under the Credit Agreement dated 2-19-93. Guarantees to be secured by First Preferred Ship Mortgages on the COURIER and PATRIOT. 27.01 Financial data schedule for September 30, 1994. 99.01 Press Release on August 10, 1994 announcing that OMI entered into a letter of intent with Astilleros Espanoles, S.A. of Madrid, Spain, for the construction of two chemical product tankers. 99.02 Press Release on October 24, 1994 announcing that OMI obtained Certificates of Financial Responsibility (COFRS) from the U.S. Coast Guard. 99.03 Press Release on October 28, 1994 announcing third quarter earnings. 99.04 Press Release on November 7, 1994 announcing that OMI will not proceed with the construction of the two vessels announced in Exhibit 99.01. b. Reports on Form 8-K None. 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. OMI CORP. (REGISTRANT) Date: November 9, 1994 By:/s/Jack Goldstein Jack Goldstein President and Chief Executive Officer Date: November 9, 1994 By:/s/Vincent de Sostoa Vincent de Sostoa Senior Vice President/Finance and Chief Financial Officer EX-10.46 2 BACKUP GUARANTEE BACK UP GUARANTEE FOR VALUE RECEIVED, OMI CORP. a Delaware corporation having an office at 90 Park Avenue, New York, New York 10016 ("OMI"), hereby irrevocably guarantees to reimburse ANDERS WILHELMSEN & CO. AS, Norwegian joint stock company having its office at Beddingen 8, Aker Brygge, 0250 Oslo, ("AWAS"), forty-nine percent (49%) of all amounts paid by AWAS to Dalian New Shipyard/China Shipbuilding Trading Company Limited, People's Republic of China (the "SELLER") pursuant to a performance Guarantee issued by AWAS to the SELLER guaranteeing the due and punctual payment and performance of all liabilities and obligations of the BUYER under that certain Shipbuilding contract dated 11th March, 1994 between the SELLER and Parallel Maritime Inc., 80 Broad Street, Liberia (the "BUYER"), relative to the construction, sale and purchase of a 150,000 DWT crude oil carrier having the Shipyard's Hull No. T 1500-1; provided, however, that OMI shall have no obligation hereunder unless and until AWAS shall have made payment to the Shipyard pursuant to said Performance Guarantee and has furnished OMI evidence to the reasonable satisfaction of OMI of the payment so made. Payment to AWAS shall be made by OMI within five business days after receipt by OMI of the evidence that such payment has been so made; provided, however, that OMI shall not be required to make the payment hereunder until such time as the payment would be permissible under the Indenture dated as of November 1, 1993 between OMI and Chemical Bank, but any payment not made within the five days referred to above shall accrue interest at 10% per annum until payment is made. This Guarantee shall be construed in accordance with and governed by the laws of the Kingdom of Norway. OMI hereby submits to the jurisdiction of the Norwegian courts for all matters connected to this Guarantee. IN WITNESS WHEREOF, OMI has caused this Guarantee to be executed and delivered by its duly authorized representative this 11th day of March, 1994. OMI CORP. By: Frederic S. London EX-10.47 3 RELEASE OF FIRST PREFERRED SHIP MORTGAGES AMENDMENT NO. 1 TO CREDIT AGREEMENT OMI CORP. Borrower and DEN NORSKE BANK AS Lender October 7, 1993 INDEX CLAUSE NUMBER SUBJECT MATTERPAGE NUMBER 1 DEFINITIONS 2 REPRESENTATIONS AND WARRANTIES 3 CONDITIONS 4 AMENDMENTS 5 FEES AND EXPENSES 6 MISCELLANEOUS SCHEDULE SCHEDULES 1 OMI CHAMPION GUARANTY 2 OMI CHAMPION MORTGAGE 3 WESTHAMPTON INDENTURE SUPPLEMENT 4 OPINION OF COUNSEL AMENDMENT NO. 1 TO CREDIT AGREEMENT THIS AMENDMENT NO. 1 is made the 7th day of October, 1993, by and between OMI CORP., a corporation incorporated under the laws of the State of Delaware with offices at 90 Park Avenue, New York, New York (the "Borrower"), and DEN NORSKE BANK AS, a bank incorporated under the laws of the Kingdom of Norway, acting through its New York branch, with offices at 600 Fifth Avenue, New York, New York (the "Lender"), to the Credit Agreement, dated February 19, 1993 by and between the Borrower and the Lender, as heretofore supplemented by a letter agreement, dated March 2, 1993 (said agreement, as so supplemented, being hereinafter called the "Credit Agreement"). W I T N E S S E T H WHEREAS, (i) pursuant to the terms of the Credit Agreement, the Lender has agreed that, if requested by the Borrower, it will release is interest in the OMI WABASH Mortgage, the OMI WABASH Earnings Assignment and the OMI WABASH Insurances Assignment (as such three terms are defined in the Credit Agreement) on the condition that, simultaneously with such release, OMI Champion Transport, Inc., a corporation incorporated under the laws of the State of Delaware and the owner of the United States flag vessel OMI CHAMPION, Official No. 523341, executes and delivers to the Lender a guaranty of the obligations of the Borrower to the Lender under the Credit Agreement and under the Notes (as such term is defined in the Credit Agreement) and, as security therefor, simultaneously with such release, also executes and delivers to the Lender a first preferred mortgage covering the OMI CHAMPION, as well as an assignment of such vessel's earnings and insurances, and (ii) the Borrower has so requested. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1 DEFINITIONS 1.1 The following words and expressions, as used herein and in the Credit Agreement, as amended hereby, shall have the meanings attributed to them below; except as otherwise provided herein, all other words and expressions, as used herein and in the Credit Agreement, as amended hereby, shall have the meanings attributed to them in Clause 1.1 of the Credit Agreement. "Additional Guaranty" guaranty in respect of the obligations of the Borrower under the Credit Agreement, as amended by this Amendment No. 1, and under the Notes to be executed by the Additional Guarantor in favor of the Lender pursuant to Clause 3.1(c)(i) substantially in the form set out in Schedule 1 or in such other form as the Lender may agree; "Additional Guarantor" OMI Champion Transport, Inc., a corporation incorporated under the laws of the State of Delaware; "Earnings Assignments" the OMI CHARGER Earnings Assignment and the OMI CHAMPION Earnings Assignment; "Insurances Assignments" the OMI CHARGER Insurances Assignment and the OMI CHAMPION Insurances Assignment; "Mortgages" the OMI CHARGER Mortgage and the OMI CHAMPION Mortgage; "OMI CHAMPION" the 1969 built United States flag vessel OMI CHAMPION, Official No. 523341, of 16,422 net registered tons; "OMI CHAMPION Earnings the assignment in respect of Assignment" the earnings of the OMI CHAMPION to be executed by the Additional Guarantor in favor of the Lender pursuant to Clause 3.1(c)(iv) substan-tially in the form set out in Schedule 8 to the Credit Agreement or in such other form as the Lender may agree; "OMI CHAMPION Insurances the assignment in respect of Assignment" the insurances on the OMI CHAMPION to be executed by the Additional Guarantor in favor of the Westhampton Trustee pursuant to Clause 3.1(c)(iii) substantially in the form set out in Schedule 7 to the Credit Agreement or in such other form as the Lender may agree; "OMI CHAMPION Mortgage" the first preferred United States mortgage on the OMI CHAMPION to be executed by the Additional Guarantor in favor of the Westhampton Trustee pursuant to Clause 3.1(c)(ii) substantially in the form set out in Schedule 2 or in such other form as the Lender may agree; "Vessels" the OMI CHARGER and the OMI CHAMPION; and "Westhampton Indenture Supplement No. 1, dated Supplement" the date hereof, between the Lender and the Westhampton Trustee, to the Westhampton Indenture substantially in the form set out in Schedule 3 or in such other form as the Lender may agree. 2 REPRESENTATIONS AND WARRANTIES 2.1 The Borrower hereby represents and warrants to the Lender (which representations and warranties shall survive the execution and delivery of this Amendment No. 1) that: (a) except as otherwise disclosed to the Lender in writing on or prior to the date hereof and after giving effect to the amendments herein, the representations and warranties stated in Clause 2 of the Credit Agreement (updated mutatis mutandis to the date hereof) are true and correct as if made on the date hereof; (b) all necessary corporate action has been taken to authorize, and all necessary consents and authorities have been obtained and remain in full force and effect to permit, the Borrower to enter into and perform its obligations under this Amendment No. 1; (c) this Amendment No. 1 constitutes the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except to the extent that such enforcement may be limited by equitable principles, principles of public policy or applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors' rights; and (d) the execution and delivery of, and the performance of the provisions of, this Amendment No. 1 by the Borrower do not, and will not during the Credit Facility Period, contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on the Borrower or the certificate of incorporation or by-laws thereof. 3 CONDITIONS 3.1 The obligation of the Lender to release its interest in the OMI WABASH Mortgage, the OMI WABASH Earnings Assignment and the OMI WABASH Insurances Assignment shall be subject to the following conditions precedent: (a) The Lender shall have received the following documents in form and substance satisfactory to the Lender and its legal advisers: (i) copies, certified as true and complete by an officer of the Borrower, of the resolutions of the board of directors of the Borrower evidencing approval of this Amendment No. 1 and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf; (ii) copies, certified as true and complete by an officer of the Additional Guarantor, of the resolutions of the board of directors and shareholder thereof evidencing approval of the Additional Guaranty and those of the Security Documents to which it is to be a party and authorizing an appropriate officer or officers or attorney-in- fact or attorneys-in-fact to execute the same on its behalf; (iii) copies, certified as true and complete by an officer of the Guarantor, of the resolutions of the board of directors of the Guarantor evidencing its consent to the actions to be taken pursuant to the terms of this Amendment No. 1 and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf; (iv) copies, certified as true and complete by an officer of the Borrower or other party acceptable to the Lender and its legal advisers, of all documents evidencing any other necessary action (including actions by such parties thereto other than the Borrower as may be required by the Lender), approvals or consents with respect to this Amendment No. 1, the Additional Guaranty and those of the Security Documents to be executed and delivered by the Additional Guarantor; (v) certificates of the Secretary of the Borrower and of the Guarantor, respectively, certifying as to no amendments to its certificate of incorporation and by-laws since February 24, 1993; (vi) copies, certified as true and complete by an officer of the Additional Guarantor, of the certificate of incorporation and by-laws thereof; (vii) certificate of the Secretary of the Borrower certifying that it legally and beneficially owns, directly or indirectly, all of the issued and outstanding capital stock of the Additional Guarantor and that such capital stock is owned free and clear of any liens, claims, pledges or other encumbrances whatsoever; (viii) certificate of the Secretary of the Additional Guarantor certifying as to the record ownership of all of its issued and outstanding capital stock; and (ix) certificate of the Secretary of State of the State of Delaware as to the good standing of the Additional Guarantor. (b) The Lender shall have received evidence satisfactory to it and its legal advisers that: (i) the OMI CHAMPION is registered in the name of the Additional Guarantor free of all liens and encumbrances except for the OMI CHAMPION Mortgage on her in favor of the Westhampton Trustee; (ii) the OMI CHAMPION is classed in the highest classification and rating for vessels of the same age and type with the American Bureau of Shipping without any outstanding recommendations; (iii) the OMI CHAMPION is operationally seaworthy and in every way fit for its intended service; and (iv) the OMI CHAMPION is insured in accordance with the provisions of the OMI CHAMPION Mortgage on her in favor of the Westhampton Trustee and the requirements thereof in respect of such insurances have been complied with. (c) The Additional Guarantor shall have duly executed and delivered: (i) the Additional Guaranty, (ii) the OMI CHAMPION Mortgage, (iii) the OMI CHAMPION Insurances Assignment, (iv) the OMI CHAMPION Earnings Assignment, (v) its Assignment Notices, and (vi) Uniform Commercial Code Financing Statements for filing in New York; (d) The Guarantor shall have duly executed and delivered its consent to the actions to be taken pursuant to the terms of this Amendment No. 1; (e) The Westhampton Trustee shall have duly authorized, executed and delivered the Westhampton Indenture Supplement; (f) The Lender shall have received a certificate of the chief financial officer of the Additional Guarantor confirming the representations and warranties with respect to solvency set forth in the Additional Guaranty and containing conclusions as to the solvency of the Additional Guarantor; (g) The Lender shall have received evidence satisfactory to it and to its legal advisers that, save for the liens created by the security documents to which the Additional Guarantor is a party, there are no liens, changes or encumbrances of any kind whatsoever on the OMI CHAMPION except as permitted hereby and by any of the Security Documents to which the Additional Guarantor is a party; and (h) The Lender shall have received an opinion from Fredric S. London, Esq., counsel for the Borrower, the Guarantor and the Additional Guarantor, substantially in the form set out in Schedule 4 or in such other form as the Lender may agree. 4 AMENDMENTS 4.1 Subject, in each instance, to compliance with all of the conditions precedent set forth in Clause 3.1, the Credit Agreement is hereby amended as follows: (a) All references in Clauses 8-10, inclusive, 13, 14 and 17 of the Credit Agreement, as amended by this Amendment No. 1, to the term "Guaranty" shall be deemed to be references to the Guaranty and the Additional Guaranty in the alternative. (b) All references in Clauses 8 and 9 of the Credit Agreement, as amended by this Amendment No. 1, to the term "Guarantor" shall be deemed to be references to the Guarantor and the Additional Guarantor in the alternative. 5 FEES AND EXPENSES 5.1 The Borrower agrees to pay the Lender upon demand (whether or not all of the conditions precedent set forth in Clause 3 are complied with) all reasonable costs, charges and expenses (including legal fees and expenses) incurred by the Lender in connection with the negotiation, preparation and execution of this Amendment No. 1, as well as in connection with any supplements, amendments, waivers or consents relating thereto. 6 MISCELLANEOUS 6.1 Except to the extent amended by this Amendment No. 1, all terms and provisions of the Credit Agreement shall remain unchanged. I N W I T N E S S whereof the parties hereto have caused this Amendment No. 1 to be duly executed by their duly authorized representative on the day and year first above written. OMI CORP. By:/s/ Vincent J. de Sostoa Name: Vincent J. de Sostoa Title: Senior Vice President and Treasurer By Special Authority For DEN NORSKE BANK AS, New York Branch By:/s/ Theodore S. Jadick, Jr. Name: Theodore S. Jadick, Jr. Title: Senior Vice President By:/s/ Barbara Gronquist Name: Barbara Gronquist Title: Vice President Consented and Agreed: OMI CHAMPION TRANSPORT, INC. By:/s/ Vincent J. de Sostoa Name: Vincent J. de Sostoa Title: Senior Vice President and Treasurer RIO GRANDE TRANSPORT, INC. By:/s/ Vincent J. de Sostoa Name: Vincent J. de Sostoa Title: Senior Vice President and Treasurer EX-27 4 EXHIBIT 27
5 This schedule contains summary financial information extracted from OMI Corp. and subsidiaries Form 10-Q dated September 30, 1994, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Consolidated Statement of Changes in Stockholders' Equity, and is qualified in its entirety by reference to such financial statements. 1,000 U.S. DOLLARS QTR-3 DEC-31-1994 SEP-30-1994 1 39,573 2,568 9,495 0 0 73,770 709,279 285,997 642,908 57,484 261,107 15,340 0 0 197,345 642,908 0 198,516 0 161,792 41,608 0 22,017 (12,774) (5,138) 0 0 0 0 (7,636) (0.25) (0.25)
EX-99.01 5 PRESS RELEASE Contact: Fredric S. London (212) 297-2160 New York, August 10 -- OMI Corp. (OMM:NYSE) today announced that it has entered into a letter of intent with Astilleros Espanoles, S.A. of Madrid, Spain for the construction for OMI of two chemical/product tankers of approximately 45,000 deadweight ton (dwt) to be delivered in mid 1996. OMI has options to acquire up to an additional two sister vessels. OMI, a major bulk shipping company, operates in both the domestic and international shipping markets. Its fleet currently totals 46 vessels, including six chartered-in tankers and a vessel on order, and aggregates in excess of 3.9 million dwt. The Company also has significant investments in other maritime related activities, including lightering of large crude carriers in the Gulf of Mexico and workboat services. # # # 8/10/94 EX-99.02 6 PRESS RELEASE CONTACT: Paul G. Henning (212) 297-2125 OMI RECEIVES COFRS New York, October 24 -- OMI (OMM:NYSE) announced today that it has obtained Certificates of Financial Responsibility (COFRS) from the U.S. Coast Guard for all of its wholly-owned and operated tankers and all but one of the joint venture tankers it operates. Pursuant to the Oil Pollution Act of 1990 ("OPA"), COFRS must be obtained for all tankers in U.S. waters by December 28, 1994. OMI is confident that it will obtain COFRS for the remaining tankers prior to the requirement that they be on board. OMI, a major bulk shipping company, operates in both the domestic and international shipping markets. Its fleet currently totals 46 vessels, including six chartered-in tankers and a vessel on order, and aggregates in excess of 3.9 million deadweight ton. The Company also has significant investments in other maritime related activities, including lightering of large crude carriers in the Gulf of Mexico and workboat services. # # # 10/24/94 EX-99.03 7 PRESS RELEASE Contact: Paul G. Henning (212) 297-2125 OMI REPORTS THIRD QUARTER RESULTS New York, October 28 -- OMI Corp. (OMM:NYSE) today announced that for the three months ended September 30, 1994, the Company had a net loss of $498,000, or $.02 per share, compared to a loss of $1,897,000, or $.06 per share, in the corresponding 1993 period. The 1994 third quarter results include the gain of $7,177,000, on the sale of three 1969 built U.S. flag product carriers, and an adjustment of $4,317,000, as a result of its ongoing evaluation of the drydock program and reduction of associated costs. Revenue for the quarter was $64,635,000, compared to $69,099,000 reported a year ago. For the nine month period, the Company's net loss was $7,636,000, or $.25 per share, compared to a loss of $812,000, or $.03 per share for the corresponding 1993 period. Revenue was $198,516,000, compared to $204,983,000 in 1993. Results for the quarter and the year reflect a sluggish international tanker market and a most difficult environment for U.S. flag tankers and dry bulk carriers. However, foreign tanker rates have stabilized in recent weeks and the international dry bulk shipping markets have improved substantially. Subsequent to the end of the quarter, OMI has obtained Certificates of Financial Responsibility (COFRS) from the U.S. Coast Guard for all of its wholly-owned and operated tankers and all but one of the joint venture tankers it operates. OMI is confident that COFRS will be obtained for the remaining vessels. OMI, a major bulk shipping company, operates in both the domestic and inter- national shipping markets. Its operating fleet currently totals 45 vessels (in- cluding six chartered-in tankers), aggregating approximately 3.8 million dwt. One Suezmax tanker, aggregating 149,000 dwt is on order with delivery scheduled in 1996. The Company also has significant investments in other marine related activities, including lightering of large crude carriers in the Gulf of Mexico and workboat services. OMI CORP. (OMM:NYSE) (In thousands, except per share data)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 1994 1993 1994 1993 Revenues $64,635 $69,099 $198,516 $204,983 Income (loss) before income taxes (1,249) 965 (12,774) 1,517 Provision (benefit) for income taxes (751) 2,862 (5,138) 2,329 Net (loss) (498) (1,897) (7,636) (812) Net (loss) per share $ (.02) $ (.06) $ (.25) $ (.03) Average shares outstanding 30,406 30,601 30,378 30,583
# # # 10/28/94 EX-99.04 8 PRESS RELEASE Contact:Paul G. Henning (212) 297-2125 New York, November 7 -- OMI Corp. (NYSE:OMM) announced today that Astilleros Espanoles, S.A. of Madrid, Spain has notified the Company that it will not proceed with the construction of the two chemical/product tankers (and two option vessels) which were the subject of a previously announced letter of intent. OMI is investigating its legal rights as well as other construction opportunities. OMI, a major bulk shipping company, operates in both the domestic and international shipping markets. Its operating fleet currently totals 45 vessels (including six chartered-in tankers), aggregating approximately 3.8 million deadweight ton (dwt). One Suezmax tanker, aggregating 149,000 dwt is on order with delivery scheduled in 1996. The Company also has significant investments in other marine related activities, including lightering of large crude carriers in the Gulf of Mexico and workboat services. # # # 11/7/94 -----END PRIVACY-ENHANCED MESSAGE-----