MOBILE, Alabama--(BUSINESS WIRE)--International Shipholding Corporation (NYSE: ISH) today announced the financial results for the fourth quarter and year ended December 31, 2010.
Fourth Quarter 2010 Highlights
- Generated net income of $8.941 million for the three months ended December 31, 2010
- Declares quarterly dividend of $0.375 per share payable on March 1, 2011 to shareholders of record as of February 16, 2011
Net Income
International Shipholding Corporation today reported results for the three months and year ended December 31, 2010. The Company reported net income of $8.941 million for the three months ended December 31, 2010, compared to $10.777 million for the three months ended December 31, 2009. For the full year 2010, net income was $15.302 million, compared to $42.221 million for 2009. Results for 2009 included an impairment charge on an International flag container vessel of $2.899 million while the 2010 results include the impairment charge of $25.430 million on the Company’s Rail Ferry service.
Mr. Niels M. Johnsen, Chairman and Chief Executive Officer, stated: “In 2010 we continued to increase our contracted revenue stream and expand our fleet of diversified vessels operating on medium to long-term contracts. During the year, we refinanced a US flag pure car truck carrier and placed it on a newly negotiated long-term charter. Additionally, we commenced operations of an international flag pure car truck carrier on a medium-term charter. Our Oslo Bulk Joint Venture continued to progress as planned, and we took delivery of the first five of the 10 new mini bulkers that we invested in last year. This month we took delivery of three new Handysize bulk carriers.
“While maintaining our dividend of $0.375 per share, we also improved our financial flexibility during the year. In October of 2010, we filed a shelf registration that allows us to access up to $200 million in capital, which positions us well as we continue to pursue accretive growth opportunities.”
Operating Income
Operating Income for the three months ended December 31, 2010 was $5.5 million, as compared to income of $7.7 million for the comparable period in 2009, which included a loss of $2.1 million on the sale of an obsolete International flag container vessel.
The Company’s U. S. Flag Time Charter segment results were lower compared to the prior year period due to lower pure car/truck carrier supplemental cargo volumes. The Company’s Contract of Affreightment segment also reported lower results in the fourth quarter of 2010 as compared to the same period in 2009, primarily as a result of lower cargo volumes. The minimum cargo volumes required under the Contract of Affreightment was reached in 2010 but tonnage moved in 2009 exceeded this minimum requirement. Partially offsetting these lower results were improved operating results in the Company’s Foreign Flag Time Charter segment and its Rail Ferry segment. The Foreign Flag Time Charter benefitted from the operation of its pure car/truck carrier that delivered in 2010 while the improved Rail Ferry’s results reflected lower depreciation.
Administrative and General Expense
Administrative and general expenses decreased from the fourth quarter of 2009 by approximately $1.3 million. The 2009 amount included a $750,000 accrued contingent liability associated with incentives received in 2007 from various Alabama agencies to relocate the Company’s corporate headquarters to Mobile, Alabama.
Interest and Other Expense
Interest Expense for the three months ended December 31, 2010 decreased from the comparable period in 2009. Scheduled principal reductions and a lower swap interest rate on one of the loans were partially offset by the additional debt on the Company’s new international flag pure car/truck carrier. The foreign exchange loss of $1.652 million reflects a strengthening of the Yen versus the U.S. dollar and its impact on our Yen-denominated facility. The Yen was revalued using an 81.22 to $1 USD exchange rate.
Federal Income Tax Benefit
The Company’s income tax benefit for the fourth quarter of 2010 was $597,000 as compared to a benefit of $1.1 million for the 2009 comparable quarter. The increase in the effective tax rate reflects the establishment of a valuation allowance against part of the deferred tax assets generated during the quarter. The Company’s deferred tax liability balance is at levels that will require a valuation reserve on all future deferred tax assets.
Unconsolidated Entities
The fourth quarter results from the Company’s unconsolidated entities improved from the fourth quarter of 2009. Included in the results of the 2010 fourth quarter was a reversal of a year-to-date income tax provision of $3.9 million on the undistributed earnings of the international unconsolidated entities. During the fourth quarter, Congress extended the rule, effective retroactively to January 01, 2010, that allows for the deferral of income tax on earnings from the international unconsolidated entities. Partially offsetting this reversal were positioning costs on our investment in a joint venture operating mini bulkers.
Balance Sheet
The Company’s working capital at December 31, 2010 was approximately $15 million, a reduction of approximately $26 million from the September 30, 2010 ending position. This is a temporary drop resulting primarily from a construction installment payment to the yard for the three Handysize vessels delivered in January 2011. Permanent financing replenished the installment payment in early January. Cash, cash equivalents and marketable securities were at approximately $36 million at December 31, 2010.
During the fourth quarter, the Company had net capital outlays of approximately $32 million, which included the aforementioned construction installment payments, equity infusion in the 25% owned joint venture operating the mini bulkers and the acquisition of a small tanker vessel employed to support the Company’s Indonesian service.
Dividend Declaration
The Company’s Board of Directors authorized the payment of a $0.375 dividend, payable on March 1, 2011, for each share of common stock owned on the record date of February 16, 2011. All future dividend declarations and amounts remain subject to the discretion of International Shipholding Corporation’s Board of Directors.
About International Shipholding Corporation
International Shipholding Corporation, through its subsidiaries, operates a diversified fleet of U. S. and foreign flag vessels that provide international and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term charters and contracts.
For more information about the company, please visit www.intship.com.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements are based on assumptions and opinions concerning a variety of known and unknown risks. Please refer to ISH’s Annual Report on form 10-K for the year ended December 31, 2009 as well as its future filings and reports filed with or furnished to the Securities and Exchange Commission for a description of the business environment in which ISH operates and the important factors, risks and uncertainties that may affect its business and financial results. If any assumptions or opinions prove materially incorrect, any forward-looking statements made on that basis may also prove to be materially incorrect. ISH is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
| INTERNATIONAL SHIPHOLDING CORPORATION | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (All Amounts in Thousands Except Share Data) | ||||||||||||||||||
| Three Months Ended December 31, | Twelve Months ended December 31, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| Revenues | $ | 57,651 | $ | 89,795 | $ | 290,049 | $ | 379,951 | ||||||||||
| Operating Expenses: | ||||||||||||||||||
| Voyage Expenses | 42,966 | 69,053 | 209,347 | 295,678 | ||||||||||||||
| Vessel Depreciation | 4,258 | 4,773 | 17,929 | 20,254 | ||||||||||||||
| Impairment Loss | - | - | 25,430 | 2,899 | ||||||||||||||
| Gross Voyage (Loss) Profit | 10,427 | 15,969 | 37,343 | 61,120 | ||||||||||||||
| Administrative and General Expenses | 4,924 | 6,219 | 21,202 | 22,641 | ||||||||||||||
| Loss/(Gain) on Sale of Other Assets | 4 | 2,080 | (42 | ) | 2,209 | |||||||||||||
| Operating (Loss) Income | 5,499 | 7,670 | 16,183 | 36,270 | ||||||||||||||
| Interest and Other: | ||||||||||||||||||
| Interest Expense | 1,608 | 1,745 | 7,157 | 6,110 | ||||||||||||||
| Derivative Loss | 26 | - | 426 | - | ||||||||||||||
| Gain on Sale of Investment | (197 | ) | (980 | ) | (213 | ) | (980 | ) | ||||||||||
| Other Income from Vessel Financing | (564 | ) | (655 | ) | (2,335 | ) | (655 | ) | ||||||||||
| Investment (Income) Loss | (309 | ) | (115 | ) | (1,778 | ) | 72 | |||||||||||
| Foreign Exchange Loss | 1,652 | - | 8,196 | - | ||||||||||||||
| 2,216 | (5 | ) | 11,453 | 4,547 | ||||||||||||||
| Income (Loss) Before (Benefit) Provision for Income Taxes and | ||||||||||||||||||
| Equity in Net Income (Loss) of Unconsolidated Entities | 3,283 | 7,675 | 4,730 | 31,723 | ||||||||||||||
| (Benefit) Provision for Income Taxes: | ||||||||||||||||||
| Current | 196 | 56 | 692 | 306 | ||||||||||||||
| Deferred | (793 | ) | (1,174 | ) | (1,982 | ) | (3,845 | ) | ||||||||||
| (597 | ) | (1,118 | ) | (1,290 | ) | (3,539 | ) | |||||||||||
| Equity in Net Income of Unconsolidated | ||||||||||||||||||
| Entities (Net of Applicable Taxes) | 5,061 | 1,984 | 9,282 | 6,959 | ||||||||||||||
| Income from Continuing Operations | 8,941 | 10,777 | 15,302 | 42,221 | ||||||||||||||
| Net Income | $ | 8,941 | $ | 10,777 | $ | 15,302 | $ | 42,221 | ||||||||||
| Net Income Available to Common Stockholders | $ | 8,941 | $ | 10,777 | $ | 15,302 | $ | 42,221 | ||||||||||
| Basic and Diluted Earnings Per Common Share: | ||||||||||||||||||
| Continuing Operations | $ | 1.26 | $ | 1.49 | $ | 2.14 | $ | 5.84 | ||||||||||
| Basic Earnings Per Common Share: | $ | 1.26 | $ | 1.49 | $ | 2.14 | $ | 5.84 | ||||||||||
| Continuing Operations | $ | 1.25 | $ | 1.47 | $ | 2.12 | $ | 5.80 | ||||||||||
| Diluted Earnings Per Common Share: | $ | 1.25 | $ | 1.47 | $ | 2.12 | $ | 5.80 | ||||||||||
| Weighted Average Shares of Common Stock Outstanding: | ||||||||||||||||||
| Basic | 7,075,659 | 7,228,570 | 7,158,439 | 7,224,748 | ||||||||||||||
| Diluted | 7,166,958 | 7,323,461 | 7,231,178 | 7,282,119 | ||||||||||||||
| Dividends Per Share | $ | 0.375 | $ | 0.500 | $ | 1.625 | $ | 1.500 | ||||||||||
| INTERNATIONAL SHIPHOLDING CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (All Amounts in Thousands) | ||||||||
| December 31, | December 31, | |||||||
| ASSETS | 2010 | 2009 | ||||||
| Current Assets: | ||||||||
| Cash and Cash Equivalents | $ | 24,158 | $ | 47,468 | ||||
| Marketable Securities | 11,527 | 10,333 | ||||||
| Accounts Receivable, Net of Allowance for Doubtful Accounts | ||||||||
| of $311 and $299 in 2010 and 2009: | ||||||||
| Traffic | 6,364 | 5,221 | ||||||
| Agents' | 1,555 | 3,353 | ||||||
| Other | 8,555 | 12,637 | ||||||
| Federal Income Taxes Receivable | 242 | - | ||||||
| Net Investment in Direct Financing Leases | 5,596 | 52,649 | ||||||
| Other Current Assets | 2,513 | 1,640 | ||||||
| Notes Receivable | 4,248 | 5,348 | ||||||
| Material and Supplies Inventory, at Lower of Cost or Market | 3,774 | 3,100 | ||||||
| Total Current Assets | 68,532 | 141,749 | ||||||
| Investment in Unconsolidated Entities | 27,261 | 15,971 | ||||||
| Net Investment in Direct Financing Leases | 50,102 | 55,046 | ||||||
| Vessels, Property, and Other Equipment, at Cost: | ||||||||
| Vessels | 366,543 | 314,534 | ||||||
| Leasehold Improvements | 26,128 | 26,128 | ||||||
| Construction in Progress | 77,609 | 49,496 | ||||||
| Furniture and Equipment | 7,863 | 6,966 | ||||||
| 478,143 | 397,124 | |||||||
| Less - Accumulated Depreciation | (143,667 | ) | (185,292 | ) | ||||
| 334,476 | 211,832 | |||||||
| Other Assets: | ||||||||
| Deferred Charges, Net of Accumulated Amortization | 14,482 | 15,914 | ||||||
| of $14,525 and $20,826 in 2010 and 2009, Respectively | ||||||||
| Acquired Contract Costs, Net of Accumulated Amortization | - | 364 | ||||||
| of $30,525 and $30,162 in 2010 and 2009, Respectively | ||||||||
| Due from Related Parties | 4,124 | 5,043 | ||||||
| Notes Receivable | 40,142 | 44,390 | ||||||
| Other | 5,004 | 6,341 | ||||||
| 63,752 | 72,052 | |||||||
| $ | 544,123 | $ | 496,650 | |||||
| INTERNATIONAL SHIPHOLDING CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (All Amounts in Thousands) | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| LIABILITIES AND STOCKHOLDERS' INVESTMENT | ||||||||
| Current Liabilities: | ||||||||
| Current Maturities of Long-Term Debt | $ | 21,324 | $ | 68,789 | ||||
| Accounts Payable and Accrued Liabilities | 32,114 | 32,422 | ||||||
| Total Current Liabilities | 53,438 | 101,211 | ||||||
| Long-Term Debt, Less Current Maturities | 200,241 | 97,635 | ||||||
| Other Long-Term Liabilities: | ||||||||
| Deferred Income Taxes | 2 | 2,070 | ||||||
| Lease Incentive Obligation | 7,022 | 6,262 | ||||||
| Other | 49,670 | 50,541 | ||||||
| 56,694 | 58,873 | |||||||
| Stockholders' Investment: | ||||||||
| Common Stock, $1.00 Par Value, 10,000,000 Shares Authorized, | 8,564 | 8,484 | ||||||
| 7,075,659 And 7,228,570 Shares Issued at December 31, 2010 and | ||||||||
| December 31, 2009, Respectively | ||||||||
| Additional Paid-In Capital | 84,846 | 83,189 | ||||||
| Retained Earnings | 183,541 | 180,121 | ||||||
| Treasury Stock, 1,1388,066 and 1,165,015 at cost | (25,403 | ) | (20,172 | ) | ||||
| at December 31, 2010 and 2009, Respectively | ||||||||
| Accumulated Other Comprehensive (Loss) | (17,798 | ) | (12,691 | ) | ||||
| 233,750 | 238,931 | |||||||
| $ | 544,123 | $ | 496,650 | |||||
| INTERNATIONAL SHIPHOLDING CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (All Amounts in Thousands) | Year Ended December 31, | |||||||
| 2010 | 2009 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | 15,303 | $ | 42,221 | ||||
| Adjustments to Reconcile Net Income to Net Cash Provided by | ||||||||
| Operating Activities: | ||||||||
| Depreciation | 18,898 | 21,020 | ||||||
| Amortization of Deferred Charges and Other Assets | 6,569 | 9,878 | ||||||
| Deferred Benefit for Income Taxes | (1,982 | ) | (3,845 | ) | ||||
| Impairment Loss |
25,430 |
2,899 | ||||||
| Non-Cash Stock Based Compensation | 2,341 | 1,834 | ||||||
| Equity in Net Income of Unconsolidated Entities | (9,282 | ) | (6,959 | ) | ||||
| Distributions from Unconsolidated Entities | 3,000 | 3,000 | ||||||
| (Gain) Loss on Sale of Assets | (42 | ) | 2,209 | |||||
| Gain on Sale of Investments | (213 | ) | (980 | ) | ||||
| Loss on Foreign Currency Exchange | 8,196 | - | ||||||
| Deferred Drydocking Charges | (2,516 | ) | (15,960 | ) | ||||
| Changes in: | ||||||||
| Accounts Receivable | 4,737 | 1,649 | ||||||
| Inventories and Other Current Assets | (1,287 | ) | 704 | |||||
| Other Assets | 1,337 | (913 | ) | |||||
| Accounts Payable and Accrued Liabilities | (3,907 | ) | 6,059 | |||||
| Other Long-Term Liabilities | (2,195 | ) | (135 | ) | ||||
| Net Cash Provided by Operating Activities | 64,387 | 62,681 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Principal payments received under Direct Financing Leases | 5,522 | 7,763 | ||||||
| Capital Improvements to Vessels, Leasehold Improvements, and Other Assets | (123,146 | ) | (80,303 | ) | ||||
| Proceeds from Sale of Assets | 3,853 | 5,020 | ||||||
| Purchase of Marketable Securities | (10,938 | ) | (10,617 | ) | ||||
| Proceeds from Sale of Marketable Securities | 9,615 | 3,529 | ||||||
| Investment in Unconsolidated Entities | (4,949 | ) | (6,250 | ) | ||||
| Payments on Related Party Note Receivables | 5,167 | 1,082 | ||||||
| Net Cash (Used in) Provided by Investing Activities | (114,875 | ) | (79,776 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Common Stock Repurchase | (5,231 | ) | - | |||||
| Proceeds from Issuance of Debt | 153,476 | 41,617 | ||||||
| Repayment of Debt | (108,029 | ) | (14,175 | ) | ||||
| Additions to Deferred Financing Charges | (1,155 | ) | (235 | ) | ||||
| Common Stock Dividends Paid | (11,882 | ) | (14,479 | ) | ||||
| Net Cash Provided by/ (Used in) Financing Activities | 27,179 | 12,728 | ||||||
| Net (Decrease)/Increase in Cash and Cash Equivalents | (23,310 | ) | (4,367 | ) | ||||
| Cash and Cash Equivalents at Beginning of Period | 47,468 | 51,835 | ||||||
| Cash and Cash Equivalents at End of Period | $ | 24,158 | $ | 47,468 | ||||
| Noncash investing and financing activities: | ||||||||
| Note received as consideration in sale of vessels | - | 50,800 | ||||||