SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.
COMMISSION FILE NUMBERS 333-18455 AND 333-18455-01
--------------------
STATIA TERMINALS INTERNATIONAL N.V.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
NETHERLANDS ANTILLES 52-2003102
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
TUMBLEDOWN DICK BAY
ST. EUSTATIUS, NETHERLANDS ANTILLES
(011) 5993-82300
----------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
STATIA TERMINALS CANADA, INCORPORATED
----------------------------------------------------
(Exact name of registrant as specified in its charter)
NOVA SCOTIA, CANADA 98-0164788
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3817 PORT MALCOLM ROAD
PORT HAWKESBURY, NOVA SCOTIA B0E 2V0
(902) 625-1711
---------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------
Indicate by check mark whether each of the registrants: (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 requirements for the past 90 days. Yes [X] No [ ]
The equity securities of the registrants have not been, and are not
required to be, registered under either the Securities Act of 1933 or the
Securities Exchange Act of 1934.
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V.
AND
STATIA TERMINALS CANADA, INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
JUNE 30, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 1
Consolidated Condensed Statements of Income (Loss)
and Accumulated Deficit 2
Consolidated Condensed Statements of Cash Flows 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
THIS QUARTERLY REPORT ON FORM 10-Q (THIS "REPORT") CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 27A OF THE SECURITIES ACT OF
1933. DISCUSSIONS CONTAINING SUCH FORWARD-LOOKING STATEMENTS MAY BE FOUND IN
ITEMS 1, 2 AND 3 OF PART I HEREOF, AS WELL AS WITHIN THIS REPORT GENERALLY. IN
ADDITION, WHEN USED IN THIS REPORT, THE WORDS "MAY", "WILL", "BELIEVE,"
"ANTICIPATE," "EXPECT", "ESTIMATE" AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO A NUMBER OF
RISKS AND UNCERTAINTIES. ACTUAL RESULTS IN THE FUTURE COULD DIFFER MATERIALLY
FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF
FLUCTUATIONS IN THE SUPPLY OF AND DEMAND FOR CRUDE OIL AND OTHER PETROLEUM
PRODUCTS, CHANGES IN THE PETROLEUM TERMINALING INDUSTRY, ADDED COSTS DUE TO
CHANGES IN GOVERNMENT REGULATIONS AFFECTING THE PETROLEUM INDUSTRY, THE LOSS OF
A MAJOR CUSTOMER, THE FINANCIAL CONDITION OF THE COMPANY'S CUSTOMERS,
INTERRUPTION OF OUR OPERATIONS CAUSED BY ADVERSE WEATHER CONDITIONS, THE
CONDITION OF THE UNITED STATES ECONOMY, RISKS ASSOCIATED WITH OUR EFFORTS TO
COMPLY WITH THE Y2K REQUIREMENT, AND OTHER FACTORS INCLUDED IN THIS REPORT AND
THE COMPANY'S ANNUAL REPORT ON FORM 10-K. THE COMPANY DOES NOT UNDERTAKE ANY
OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE
FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT ANY FUTURE EVENTS OR
CIRCUMSTANCES.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,873 $ 17,464
Accounts receivable-
Trade, net 7,562 7,418
Other 2,328 2,716
Inventory, net 4,528 1,882
Prepaid expenses 172 1,053
--------- ---------
Total current assets 28,463 30,533
PROPERTY AND EQUIPMENT, net 209,970 208,482
OTHER NONCURRENT ASSETS, net 4,745 3,299
--------- ---------
Total assets $ 243,178 $ 242,314
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,012 $ 12,857
Accrued interest payable 2,027 1,508
Other accrued expenses 8,439 9,028
--------- ---------
Total current liabilities 19,478 23,393
LONG-TERM DEBT 135,000 101,000
--------- ---------
Total liabilities 154,478 124,393
STOCKHOLDER'S EQUITY:
Common stock 6 6
Additional paid-in capital 92,344 126,090
Accumulated deficit (3,650) (8,175)
--------- ---------
Total stockholder's equity 88,700 117,921
--------- ---------
Total liabilities and stockholder's equity $ 243,178 $ 242,314
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 1
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
---------------------- ----------------------
1998 1999 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES $ 36,472 $ 42,267 $ 66,836 $ 79,682
COSTS OF SERVICES AND PRODUCTS SOLD 28,812 33,799 53,932 62,399
-------- -------- -------- --------
Gross profit 7,660 8,468 12,904 17,283
ADMINISTRATIVE EXPENSES 1,993 1,660 3,809 3,785
SPECIAL COMPENSATION EXPENSE -- 2,152 -- 4,099
-------- -------- -------- --------
Operating income 5,667 4,656 9,095 9,399
LOSS ON DISPOSITION OF PROPERTY AND EQUIPMENT 4,000 -- 4,000 --
INTEREST EXPENSE 4,218 3,735 8,445 7,937
INTEREST INCOME 104 347 214 522
-------- -------- -------- --------
Income (loss) before provision for income
taxes and extraordinary charge (2,447) 1,268 (3,136) 1,984
PROVISION FOR INCOME TAXES 14 239 219 493
-------- -------- -------- --------
Income (loss) before extraordinary charge (2,461) 1,029 (3,355) 1,491
EXTRAORDINARY CHARGE RELATED TO EARLY EXTINGUISHMENT OF DEBT -- 4,743 -- 4,743
-------- -------- -------- --------
Net loss available to common stockholder $ (2,461) $ (3,714) $ (3,355) $ (3,252)
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 2
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
----------------------
1998 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss available to common stockholder $ (3,355) $ (3,252)
Adjustments to reconcile net loss available to common stockholder
to net cash provided by operating activities:
Extraordinary charge related to early extinguishment of debt -- 4,743
Non-cash special compensation expense -- 2,152
Depreciation, amortization and non-cash charges 6,202 5,947
Valuation adjustment on asset held for sale 4,000 --
Decrease in accounts receivable-trade 2,295 144
(Increase) decrease in other receivables 249 (388)
Decrease in inventory 84 2,646
Increase in prepaid expenses (1,867) (881)
Increase in other non-current assets (96) (33)
Increase (decrease) in accounts payable (633) 1,693
Increase in accrued expenses 796 70
-------- --------
Net cash provided by operating activities 7,675 12,841
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,169) (4,057)
Proceeds from sale of property and equipment -- 15
-------- --------
Net cash used in investing activities (5,169) (4,042)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock to Parent -- 33,746
Repurchase of First Mortgage Notes -- (37,681)
Dividend paid to Parent -- (1,273)
-------- --------
Net cash used in financing activities -- (5,208)
INCREASE IN CASH AND CASH EQUIVALENTS 2,506 3,591
CASH AND CASH EQUIVALENTS, beginning of period 6,083 13,873
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 8,589 $ 17,464
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 224 $ 359
======== ========
Cash paid for interest $ 7,989 $ 8,030
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 3
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated condensed financial statements of Statia
Terminals International N.V. ("Statia") and its subsidiaries (together with
Statia, the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. Significant accounting
policies followed by the Company were disclosed in the Notes to the Consolidated
Financial Statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998. In the opinion of the Company's management,
the accompanying consolidated condensed financial statements contain
adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position of the Company at June 30, 1999 and the results of
operations and cash flows for the six months ended June 30, 1998 and 1999.
Statia is a wholly-owned subsidiary of Statia Terminals Group N.V. (the
"Parent"). Operating results for the six months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999. Additionally, the transactions discussed in note 4 below will
impact the Company's results of operations and financial condition.
2. RECLASSIFICATIONS AND COMPREHENSIVE INCOME
Certain amounts in the prior year consolidated condensed financial
statements have been reclassified to conform to the current year presentation.
For all periods presented herein, there were no differences between net
income and comprehensive income.
3. SEGMENT INFORMATION
The Company is organized around several different factors, the two most
significant of which are products and services, and geographic location. The
Company's primary products and services are bunker and bulk product sales, and
terminaling services (consisting of storage, throughput, dock charges, emergency
response fees and other terminal charges).
The primary measures of profit and loss utilized by the Company's
management to make decisions about resources to be allocated to each segment are
earnings before interest expense, interest income, income taxes, depreciation,
amortization and certain unallocated income and expenses ("Internal EBITDA") and
earnings before interest expense, interest income, income taxes and certain
unallocated income and expenses ("Internal EBIT").
Page 4
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
3. SEGMENT INFORMATION - (CONTINUED)
The following information is provided for the Company's terminaling
services and bunker and bulk products sales segments:
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------- -------------------
1998 1999 1998 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Terminaling services $16,974 $17,408 $31,156 $34,036
Bunker and bulk product sales 19,498 24,859 35,680 45,646
------- ------- ------- -------
Total $36,472 $42,267 $66,836 $79,682
======= ======= ======= =======
INTERNAL EBITDA:
Terminaling services $ 7,705 $ 8,002 $13,079 $16,180
Bunker and bulk product sales 753 1,258 1,666 2,532
------- ------- ------- -------
Total $ 8,458 $ 9,260 $14,745 $18,712
======= ======= ======= =======
DEPRECIATION AND AMORTIZATION EXPENSE:
Terminaling services $ 2,816 $ 2,751 $ 5,597 $ 5,574
Bunker and bulk product sales 127 156 252 289
------- ------- ------- -------
Total $ 2,943 $ 2,907 $ 5,849 $ 5,863
======= ======= ======= =======
INTERNAL EBIT:
Terminaling services $ 4,889 $ 5,251 $ 7,482 $10,606
Bunker and bulk product sales 626 1,102 1,414 2,243
------- ------- ------- -------
Total $ 5,515 $ 6,353 $ 8,896 $12,849
======= ======= ======= =======
</TABLE>
A reconciliation of Internal EBIT to the Company's income (loss) before
provision for income taxes and extraordinary charge is as follows:
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
---------------------- ----------------------
1998 1999 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Internal EBIT $ 5,515 $ 6,353 $ 8,896 $ 12,849
Unallocated operating and administrative income (expenses) (76) 256 (257) 223
Special compensation expense -- (2,152) -- (4,099)
Interest expense excluding debt amortization expense (3,990) (3,536) (7,989) (7,511)
Interest income 104 347 214 522
Loss on sale of Statia Terminals Southwest, Inc. (4,000) -- (4,000) --
-------- -------- -------- --------
Income (loss) before provision for income taxes and extraordinary charge $ (2,447) $ 1,268 $ (3,136) $ 1,984
======== ======== ======== ========
</TABLE>
Page 5
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
4. PARENT'S INITIAL PUBLIC OFFERING OF EQUITY
On April 28, 1999, the Parent completed its initial public equity
offering of 7.6 million common shares (the "Offering"). The Offering price was
$20 per share raising gross proceeds to the Parent of $152,000. A portion of the
Offering proceeds was used by the Parent to purchase additional capital stock of
Statia totaling $33,746. During May 1999, the Company used the proceeds from the
sale of Statia's capital stock and existing cash to repurchase in the open
market a principal amount of $34,000 of the Company's 11 3/4% First Mortgage
Notes (the "Notes") for $39,522, including acquisition costs and accrued
interest of $3,681 and $1,841, respectively. During the second quarter of 1999,
the acquisition costs and the unamortized deferred financing costs related to
the repurchased Notes ($1,062) were recorded as an extraordinary charge. There
was no income tax effect associated with this extraordinary charge.
During the three months ended March 31, 1999, the Company recorded as
special compensation expense a bonus in the amount of $1,947 for particular
members of the Company's management. The purpose of this special management
bonus was to partially reimburse these individuals with respect to adverse tax
consequences that resulted from the Offering and other past compensation
arrangements.
In connection with the Offering, certain options previously granted to
some of the Company's employees to purchase the Parent's common stock became
fully vested, were exercised and became subordinated shares of the Parent. The
Parent was amortizing the difference between the estimated fair value of the
options at the date of grant and the exercise price over the vesting period of
five years and charging such amounts to the Company as compensation expense. On
April 28, 1999, the remaining unamortized compensation expense associated with
these options of $2,152 was recorded as a non-cash special compensation expense.
5. STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
The Notes are guaranteed on a full, unconditional, joint and
several basis by each of the indirect and direct active subsidiaries of Statia,
other than Statia Terminals Canada, Incorporated which is a co-obligor on the
Notes. The enforceability of the guarantees may be affected differently under
the laws of the applicable jurisdictions. Each of the subsidiary guarantors is,
directly or indirectly, wholly-owned by Statia. The following consolidated
condensed financial data are presented for Statia Terminals Canada, Incorporated
and Subsidiary.
Page 6
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
5. STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY - (CONTINUED)
STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, June 30,
1998 1999
------- -------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,409 $ 1,382
Accounts receivable, net 2,243 2,235
Inventory, net 323 269
Prepaid expenses 54 110
Receivables from affiliates 2,305 5,171
------- -------
Total current assets 9,334 9,167
PROPERTY AND EQUIPMENT, net 28,192 28,155
OTHER NONCURRENT ASSETS, net 979 911
------- -------
Total assets $38,505 $38,233
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES $ 4,984 $ 3,994
LONG-TERM DEBT 28,060 28,060
------- -------
Total liabilities 33,044 32,054
STOCKHOLDER'S EQUITY:
Common stock and additional paid-in capital 2,266 2,266
Retained earnings 3,195 3,913
------- -------
Total stockholder's equity 5,461 6,179
------- -------
Total liabilities and stockholder's equity $38,505 $38,233
======= =======
Page 7
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
5. STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY - (CONTINUED)
STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------- -------------------
1998 1999 1998 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES $ 5,149 $ 6,116 $ 9,628 $11,233
COSTS OF SERVICES AND PRODUCTS SOLD 2,706 2,980 5,697 5,460
------- ------- ------- -------
Gross profit 2,443 3,136 3,931 5,773
ADMINISTRATIVE EXPENSES 607 1,682 1,158 1,823
SPECIAL COMPENSATION EXPENSE -- 736 -- 1,515
------- ------- ------- -------
Operating income 1,836 718 2,773 2,435
INTEREST EXPENSE 876 897 1,756 1,772
INTEREST INCOME 10 81 23 136
------- ------- ------- -------
Income (loss) before provision for income taxes 970 (98) 1,040 799
PROVISION FOR INCOME TAXES 14 40 32 81
------- ------- ------- -------
Net income (loss) available to common stockholder $ 956 $ (138) $ 1,008 $ 718
======= ======= ======= =======
</TABLE>
STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
June 30,
1998 1999
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in)
operating activities $ 72 $(2,350)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (186) (677)
------- -------
Net cash used in investing activities (186) (677)
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS (114) (3,027)
CASH AND CASH EQUIVALENTS, beginning of period 1,241 4,409
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 1,127 $ 1,382
======= =======
Page 8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For purposes of the discussion below, reference is made to the
unaudited Consolidated Condensed Financial Statements and Notes thereto of
Statia Terminals International N.V. and Subsidiaries as of June 30, 1999 and the
three and six month periods ended June 30, 1999 and 1998 included herein.
Reference should also be made to the Company's Annual Report on Form 10-K that
includes the Company's Consolidated Financial Statements as of and for the year
ended December 31, 1998. You should note that we sold our Brownsville, Texas,
facility on July 29, 1998, and the figures below and our consolidated condensed
financial statements for the three and six months ended June 30, 1998 include
the Brownsville facility.
RESULTS OF OPERATIONS
The following tables set forth, for the periods indicated, the
percentage of revenues represented by certain items in our consolidated
condensed income statements.
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Terminaling services $ 16,974 46.5% $ 17,408 41.2%
Bunker and bulk product sales 19,498 53.5% 24,859 58.8%
-------- ----- -------- -----
Total revenues 36,472 100.0% 42,267 100.0%
Cost of services and products sold 28,812 79.0% 33,799 80.0%
-------- ----- -------- -----
Gross profit 7,660 21.0% 8,468 20.0%
Administrative expenses 1,993 5.5% 1,660 3.9%
Special compensation expense -- -- 2,152 5.1%
-------- ----- -------- -----
Operating income 5,667 15.5% 4,656 11.0%
Loss on disposition of property and equipment 4,000 11.0% -- --
Interest expense 4,218 11.5% 3,735 8.8%
Interest income 104 0.3% 347 0.8%
-------- ----- -------- -----
Income (loss) before income taxes and extraordinary charge (2,447) (6.7)% 1,268 3.0%
Provision for income taxes 14 0.1% 239 0.6%
Extraordinary charge related to early extinguishment of debt -- -- 4,743 11.2%
-------- ----- -------- -----
Net loss available to common stockholder $ (2,461) (6.8)% $ (3,714) (8.8)%
======== ===== ======== =====
</TABLE>
Page 9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
Revenues:
<S> <C> <C> <C> <C>
Terminaling services $ 31,156 46.6% $ 34,036 42.7%
Bunker and bulk product sales 35,680 53.4% 45,646 57.3%
-------- ----- -------- -----
Total revenues 66,836 100.0% 79,682 100.0%
Cost of services and products sold 53,932 80.7% 62,399 78.3%
-------- ----- -------- -----
Gross profit 12,904 19.3% 17,283 21.7%
Administrative expenses 3,809 5.7% 3,785 4.8%
Special compensation expense -- -- 4,099 5.1%
-------- ----- -------- -----
Operating income 9,095 13.6% 9,399 11.8%
Loss on disposition of property and equipment 4,000 6.0% -- --
Interest expense 8,445 12.6% 7,937 10.0%
Interest income 214 0.3% 522 0.7%
-------- ----- -------- -----
Income (loss) before income taxes and extraordinary charge (3,136) (4.7)% 1,984 2.5%
Provision for income taxes 219 0.3% 493 0.6%
Extraordinary charge related to early extinguishment of debt -- -- 4,743 6.0%
-------- ----- -------- -----
Net loss available to common stockholder $ (3,355) (5.0)% $ (3,252) (4.1)%
======== ===== ======== =====
</TABLE>
The following tables set forth, for the periods indicated (a) the total
revenues and total operating income (loss), after allocation of administrative
expenses, at each of our operating locations and (b) the percentage such revenue
and operating income (loss) relate to our total revenue and operating income.
REVENUES BY LOCATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $ 30,552 83.8% $ 36,186 85.6%
Canada 5,044 13.8% 6,081 14.4%
Brownsville, Texas facility 876 2.4% -- --
-------- ----- -------- -----
Total $ 36,472 100.0% $ 42,267 100.0%
======== ===== ======== =====
For the Six Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
Netherlands Antilles and the Caribbean $ 55,821 83.5% $ 68,482 85.9%
Canada 9,402 14.1% 11,200 14.1%
Brownsville, Texas facility 1,613 2.4% -- --
-------- -------- -------- --------
Total $ 66,836 100.0% $ 79,682 100.0%
======== ===== ======== =====
</TABLE>
Page 10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
OPERATING INCOME (LOSS) BY LOCATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $ 4,016 70.9% $ 3,188 68.5%
Canada 1,770 31.2% 1,468 31.5%
Brownsville, Texas facility (119) (2.1)% -- --
-------- ----- -------- -----
Total $ 5,667 100.0% $ 4,656 100.0%
======== ===== ======== =====
For the Six Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
Netherlands Antilles and the Caribbean $ 6,841 75.2% $ 6,993 74.4%
Canada 2,658 29.2% 2,406 25.6%
Brownsville, Texas facility (404) (4.4)% -- --
-------- ----- -------- -----
Total $ 9,095 100.0% $ 9,399 100.0%
======== ===== ======== =====
</TABLE>
The following table sets forth for the periods indicated total
capacity, capacity leased, throughput and vessel calls for each of our operating
locations. "Total capacity" represents the average storage capacity available
for lease for a period. "Capacity leased" represents the storage capacity leased
to third parties weighted for the number of days leased in the month divided by
the capacity available for lease. "Throughput" volume is the total number of
inbound barrels discharged from a vessel, tank, rail car or tanker truck, not
including across-the-dock or tank-to-tank transfers. A "vessel call" occurs when
a vessel docks or anchors at one of our terminal locations in order to load
and/or discharge cargo and/or to take on bunker fuel. Such dockage or anchorage
is counted as one vessel call regardless of the number of activities carried on
by the vessel. A vessel call also occurs when we sell and deliver bunker fuel to
a vessel not calling at our terminals for the above purposes. Each of these
statistics is a measure of the utilization of our facilities.
Page 11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
CAPACITY, CAPACITY LEASED, THROUGHPUT AND VESSEL CALLS BY LOCATION
(CAPACITY AND THROUGHPUT IN THOUSANDS OF BARRELS)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------ ------------------
1998 1999 1998 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Netherlands Antilles
and the Caribbean
Total capacity 11,334 11,334 11,334 11,334
Capacity leased 93% 91% 89% 93%
Throughput 16,231 17,468 31,527 33,676
Vessel calls 225 258 420 520
Canada
Total capacity 7,404 7,404 7,404 7,404
Capacity leased 89% 94% 88% 95%
Throughput 11,613 15,410 27,198 22,334
Vessel calls 32 42 63 59
Texas (1)
Total capacity 1,649 N/A 1,649 N/A
Capacity leased 58% N/A 50% N/A
Throughput 1,013 N/A 1,876 N/A
Vessel calls 32 N/A 59 N/A
All locations (1)
Total capacity 20,387 18,738 20,387 18,738
Capacity leased 89% 92% 85% 94%
Throughput 28,857 32,878 60,601 56,010
Vessel calls 289 300 542 579
</TABLE>
(1) The Brownsville, Texas facility was sold on July 29, 1998. The
statistics above for the three and six months ended June 30, 1998
include the operations of the Brownsville facility.
N/A Not applicable due to the sale of the Brownsville facility.
COMPARABILITY
On July 29, 1998, we sold Statia Terminals Southwest to an unrelated
third-party. Our consolidated condensed financial statements for the three and
six months ended June 30, 1998 include the operations of Statia Terminals
Southwest. The operating results of Statia Terminals Southwest for the three and
six months ended June 30, 1998 were not significant.
Page 12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
REVENUES
Total revenues for the three and six months ended June 30, 1999 were
$42.3 million and $79.7 million, compared to $36.5 million and $66.8 million for
the same periods of 1998, representing increases of $5.8 million, or 15.9% and
$12.9 million, or 19.2%, respectively.
Revenues from terminaling services, which consist of storage,
throughput, dock charges, emergency response fees and other terminal charges,
for the three and six months ended June 30, 1999 were $17.4 million and $34.0
million, compared to $17.0 million and $31.2 million for the same periods of
1998, representing increases of $0.4 million, or 2.6% and $2.9 million, or 9.2%,
respectively. The improvement in terminaling services revenue for the three and
six months ended June 30, 1999 compared to the same periods in 1998 was
principally due to:
o our ability to attract additional customers who use our facilities as
part of their strategic distribution networks;
o additional vessel calls at St. Eustatius resulting in higher dock
charges and emergency response fees; and
o higher lease rates per barrel of capacity leased due to contractual
price escalations and favorable petroleum market storage conditions.
For the six months ended June 30, 1999, approximately 48.3% of our
tank capacity and approximately 61.3% of our storage and throughput revenues,
excluding related ancillary services, were from long term contracts.
Revenues from terminaling services at St. Eustatius increased
approximately $0.1 million, or 0.7%, and $2.6 million, or 11.4%, during the
three and six months ended June 30, 1999, as compared to the same periods of
1998, due to additional throughput and more vessel calls during the three and
six months ended June 30, 1999 and due to higher capacity leased during the six
months ended June 30, 1999. Total throughput increased from 16.2 million and
31.5 million barrels during the three and six months ended June 30, 1998 to 17.5
million and 33.7 million barrels during the same periods of 1999 due primarily
to higher throughput of crude oil and petroleum products which was partially
offset by reduced throughput of fuel oil.
For the six months ended June 30, 1999, the overall percentage of
capacity leased at this facility was 93% compared to 89% for the same period of
1998, reflecting increases in the percentage of capacity leased for fuel oil
tankage and petroleum products. The percentage of capacity leased for fuel oil
tankage and petroleum products decreased during the three months ended June 30,
1999 as compared to the same period of 1998 primarily as a result of certain
tanks being removed from service due to routine maintenance. Thirty-three and
one hundred more vessels called at the St. Eustatius facility during the three
and six months ended June 30, 1999 than during the same periods of 1998,
resulting in higher revenues from dock charges and stand-by emergency response
fees.
Page 13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
Revenues from terminaling services at Point Tupper increased $1.0
million, or 20.0% and $1.7 million, or 18.5% during the three and six months
ended June 30, 1999 as compared to the same periods of 1998 due to higher
capacity leased partially offset by reduced throughput and vessel calls. The
percentage of tank capacity leased at Point Tupper increased from 89% and 88%
for the three and six months ended June 30, 1998 to 94% and 95% for the same
periods of 1999. These increases were primarily the result of additional crude
oil and clean petroleum products tankage leased during the three and six months
ended June 30, 1999 as compared to the same periods of 1998. Fewer vessel calls
during the six months ended June 30, 1999 as compared to the same period of 1998
led to lower revenue from port charges which consist of dock charges, emergency
response fees and other terminal charges, at this facility during the six months
ended June 30, 1999. Revenues from port charges increased during the three
months ended June 30, 1999 as compared to the same period of 1998 as a result of
more vessel calls during the second quarter of 1999.
Revenues from bunker and bulk product sales were $24.9 million and
$45.6 million for the three and six months ended June 30, 1999 compared to $19.5
million and $35.7 million for the same periods of 1998, an increase of $5.4
million, or 27.5% and $10.0 million, or 27.9%. These increases were primarily
due to an increase in the volume of bunkers and bulk product sold. Metric tons
of bunkers and bulk product sold increased 12.8% and 32.4% during the three and
six months ended June 30, 1999 as compared to the same periods of 1998. Average
selling prices increased 13.0% and decreased 3.4% when comparing the three and
six months ended June 30, 1999 with the same periods of 1998. These changes in
average selling prices were primarily the result of changes in the world oil
market.
GROSS PROFIT
Gross profit for the three and six months ended June 30, 1999 was $8.5
million and $17.3 million compared to $7.7 million and $12.9 million for the
same periods of 1998, representing increases of $0.8 million, or 10.5% and $4.4
million, or 33.9%. These increases in gross profit are primarily the result of
the increased terminaling services revenue produced at a small incremental cost.
Additionally, we realized higher gross margins on bunker sales during the three
and six months ended June 30, 1999 as compared to the same periods of 1998 due
to higher volumes of bunker fuels delivered.
Gross profits from terminaling services are generally higher than gross
profits from bunker and bulk product sales. Our operating costs for terminaling
services are relatively fixed and generally do not change significantly with
changes in capacity leased. Additions or reductions in storage, throughput and
ancillary revenues directly impact our gross profit. Costs for the procurement
of bunker fuels and bulk petroleum products are variable and linked to global
oil prices. Our bunker and bulk product costs are also impacted by market supply
conditions, types of products sold and volumes delivered.
ADMINISTRATIVE EXPENSES
Administrative expenses were $2.0 million and $1.7 million for the
three months ended June 30, 1998 and 1999, representing a decrease of $0.3
million, or 16.7%. The decrease during the three months ended June 30, 1999, as
compared to the same period of 1998, is primarily the result of lower
professional fees. Administrative expenses were $3.8 million for the six months
ended June 30, 1999, virtually unchanged from the six months ended June 30,
1998.
SPECIAL COMPENSATION EXPENSE
As more fully discussed in note 4 of notes to the consolidated
condensed financial statements included in Part I, Item 1 of this Report, we
recorded special compensation expense during the three and six months ended June
30, 1999 of $2.2 million and $4.1 million, respectively.
Page 14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
INTEREST EXPENSE
During the three and six months ended June 30, 1999, we incurred $3.7
million and $7.9 million of interest expense compared to $4.2 million and $8.4
million for the same periods of 1998. Interest expense includes interest accrued
on our mortgage notes due in 2003, amortization expense related to deferred
financing costs, other interest expenses and certain bank charges. In May 1999,
we repurchased $34 million of the mortgage notes which resulted in lower
interest expense on this debt.
PROVISION FOR INCOME TAXES
Provision for income taxes was $0.2 million and $0.5 million for the
three and six months ended June 30, 1999 as compared to $0.01 million and $0.2
million for the same periods of 1998. The provision for income taxes has been
increased in 1999 in contemplation of a new tax agreement with the governments
of the Netherlands Antilles and island of St. Eustatius (see further discussions
regarding the tax agreement and taxation matters in our Form 10-K).
EXTRAORDINARY CHARGE RELATED TO EARLY EXTINGUISHMENT OF DEBT
As more fully discussed in note 4 of notes to the consolidated
condensed financial statements included in Part I, Item 1 of this Report, we
recognized an extraordinary charge of $4.7 million during the three months ended
June 30, 1999 in connection with the repurchase of $34 million of our 11 3/4%
mortgage notes. There was no income tax effect associated with this
extraordinary charge.
NET LOSS
Net loss available to common stockholder was $3.7 million and $3.3
million for the three and six months ended June 30, 1999, as compared to net
losses of $2.5 million and $3.4 million for the same periods of 1998. The
changes in net loss are attributable to the net effect of the factors discussed
above.
LIQUIDITY AND CAPITAL RESOURCES
As more fully discussed in note 4 of notes to the consolidated
condensed financial statements included in Part I, Item 1 of this Report, in May
1999 we repurchased in the open market a principal amount of $34 million of our
mortgage notes, leaving $101 million of mortgage notes outstanding. It is
anticipated that the repurchase of the mortgage notes will result in annual
reductions in interest payments of $5.0 million.
No draws have occurred on the $17.5 million revolving credit facility
secured by our accounts receivable and oil inventory. The revolving credit
facility is available for working capital needs and letter of credit financing,
and it permits us to borrow in accordance with our available borrowing base,
which was estimated at $6.1 million at June 30, 1999. The revolving credit
facility bears interest at the prime rate plus 0.50% per annum (8.5% at August
13, 1999) and will expire on November 27, 1999.
At June 30, 1999, we had cash and cash equivalents on hand of $17.5
million compared to $13.9 million at December 31, 1998. We currently believe
that cash on hand, cash flow generated by operations, and amounts available
under the revolving credit facility will be sufficient to fund working capital
needs, to service debt, to make capital expenditures and to meet other operating
requirements, including any expenditures required by applicable environmental
laws and regulations. Our operating performance and ability to service or
refinance the mortgage notes and to extend or refinance the revolving credit
facility will be subject to future economic conditions and to financial,
business and other factors, many of which are beyond our control. We can give no
assurances that our future operating performance will be sufficient to service
our indebtedness or that we will be able to repay at maturity or refinance our
indebtedness in whole or in part.
Page 15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
On July 29, 1999, the Parent's Board of Directors declared a
distribution of $0.3165 per share to the Parent's common and subordinated
shareholders. The distribution is payable to shareholders of record as of the
close of business on August 4, 1999 and was paid on August 13, 1999 only to
common shareholders. We paid a dividend to the Parent of $2.4 million on August
12, 1999 to enable the Parent to pay this distribution to its common
shareholders.
CASH FLOW FROM OPERATING ACTIVITIES
Net cash provided by operating activities was $7.7 million and $12.8
million for the six months ended June 30, 1998 and 1999, respectively. Cash flow
from operations has been our primary source of liquidity during these periods.
Differences between net losses and positive operating cash flow have resulted
primarily from depreciation and amortization burdens, non-cash charges and
changes in various asset and liability accounts.
CASH FLOW FROM INVESTING ACTIVITIES
Net cash used in investing activities was $4.0 million and $5.2 million
for the six months ended June 30, 1999 and 1998, respectively. Investing
activities during the six months ended June 30, 1998 and 1999 included purchases
of property and equipment of $5.2 million and $4.1 million, respectively.
CASH FLOW FROM FINANCING ACTIVITIES
Our cash flows from financing activities for the six months ended June
30, 1999 are more fully discussed in note 4 of notes to the consolidated
condensed financial statements included in Part I, Item I of this Report.
CAPITAL EXPENDITURES
Our capital expenditure budget for 1999 is $7.3 million for maintenance
capital expenditures and $1.8 million for producing incremental revenues.
Additional spending is contingent upon the addition of incremental terminaling
business.
The following table sets forth capital expenditures and separates such
expenditures into those which produce, or have the potential to produce,
incremental revenue, and those which represent maintenance capital expenditures.
Page 16
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
SUMMARY OF CAPITAL EXPENDITURES BY TYPE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Produce incremental revenues $ 68 3.0% $ 175 8.6%
Maintenance capital expenditures 2,507 97.0% 1,859 91.4%
-------- ----- -------- -----
Total $ 2,575 100.0% $ 2,034 100.0%
======== ===== ======== =====
For the Six Months Ended June 30,
----------------------------------------------
1998 1999
-------------------- --------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
Produce incremental revenues $ 219 4.0% $ 296 7.3%
Maintenance capital expenditures 4,950 96.0% 3,761 92.7%
-------- ----- -------- -----
Total $ 5,169 100.0% $ 4,057 100.0%
======== ===== ======== =====
</TABLE>
INFORMATION TECHNOLOGY AND THE YEAR 2000
Some computer software and hardware applications and embedded
microprocessor, microcontroller or other processing technology applications and
systems use only two digits to refer to a year rather than four digits. As a
result, these applications could fail or create erroneous results in dealing
with certain dates and especially if the applications recognize "00" as the year
1900 rather than the year 2000. During 1997, we developed a Year 2000 plan to
upgrade our key information systems and simultaneously address the potential
disruption to both operating and accounting systems that might be caused by the
Year 2000 problem. The Year 2000 plan also provides for evaluations of the
systems of customers, vendors, and other third-party service providers and
evaluations of our non-information technology systems, which include embedded
technologies such as microcontrollers and is also referred to as non-traditional
information technology.
We have substantially completed the assessment phase of the Year 2000
plan as it relates to both traditional and non-traditional technology
applications and systems. We are currently in the process of testing new Year
2000 compliant terminal operations software at our facilities. We anticipate
that the Year 2000 compliant terminal operations systems will be fully
implemented in the third quarter of 1999. We are implementing a fully integrated
Year 2000 compliant finance, accounting, and human resources system and expect
to have the key components of the new system operational by the third quarter of
1999. In addition to being Year 2000 compliant, it is anticipated that this
system and the terminal operations software will significantly enhance systems
functionality.
Page 17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
We have identified some components of our control systems at our two
terminals as not being Year 2000 compliant. These systems measure, regulate,
control, and maintain crude oil and petroleum product flow and fire protection
equipment at the terminals. We are currently evaluating the best means to
mitigate the possible adverse effects resulting from the potential failure of
these systems including repair or replacement and, in most cases, have already
installed and successfully tested replacements of non-compliant components.
However, we believe that in a worst case scenario, existing manual overrides
would prevent the failure of these systems from having a material adverse effect
on our operations.
In accordance with our Year 2000 plan, we have initiated a formal
communications process with other companies with which our systems interface or
rely on to determine the extent to which those companies are addressing their
Year 2000 compliance. In connection with this process, we have sent numerous
letters and questionnaires to third parties and are evaluating those responses
as they are received. Based upon information we have received and our review of
existing relationships with third parties, we do not currently anticipate that
any third-party non-compliance would have a material adverse effect on our
business, results of operations, or financial condition.
Through June 30, 1999, we have spent $1.6 million in connection with
our Year 2000 remediation efforts and related enhancements of systems
functionality. Of this total, we have capitalized $1.5 million and expensed $0.1
million. During the remainder of 1999, we anticipate spending an additional $0.4
million to complete these efforts of which we anticipate capitalizing $0.3
million and expensing $0.1 million. However, we cannot guarantee that these
estimates will be met and actual expenditures could differ materially from these
estimates.
Based upon information currently available to us, we believe our
efforts will succeed in preventing the Year 2000 issue from having a material
adverse effect on us. However, the pervasive nature of the Year 2000 issue may
prevent us from fully assessing and rectifying all systems that could have an
effect on our business, results of operations, or financial condition.
Page 18
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We periodically purchase refined petroleum products from our customers
and others for resale as bunker fuel, for small volume sales to commercial
interests and to maintain an inventory of blend stocks for our customers.
Petroleum product inventories are held for short periods, generally not
exceeding ninety days. We do not presently have any derivative positions to
hedge our inventory of petroleum products. The following table indicates the
aggregate carrying value of our petroleum products, which are sensitive to
changes in commodity prices, on hand at June 30, 1999 computed at average costs,
net of any lower of cost or market valuation provisions, and the estimated fair
value of such products.
ON BALANCE SHEET COMMODITY POSITION
As of June 30, 1999
-------------------------------------
Carrying Amount Fair Value
--------------- ----------
Petroleum Inventory:
Statia Terminals N.V $1,613 $1,662
Statia Terminals Canada, Inc. 269 269
------ ------
Total $1,882 $1,931
====== ======
Except for certain local operating expenses in Canadian dollars and
Netherlands Antilles guilders, all of our transactions are in U.S. dollars.
Therefore, we believe we are not significantly exposed to exchange rate
fluctuations. As all of our present debt obligations carry a fixed rate of
interest, except for the undrawn revolving credit facility which varies with
changes in the lender's prime lending rate, we believe our exposure to interest
rate fluctuations is minimal.
Page 19
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Reference is made to Part I, Item 3. Legal Proceedings, in the
Company's 1998 Annual Report on Form 10-K. There have been no material
developments in the Company's legal proceedings since the Form 10-K was filed.
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.
4.1 Share Pledge Agreement, dated as of June 28, 1999, by and among Statia
Terminals Antilles N.V., Statia Terminals Delaware, Inc. and HSBC Bank
USA (formerly known as Marine Midland Bank).*
4.2 Amendment to Share Pledge Agreement, dated as of June 28, 1999, by and
between Statia Terminals International N.V. and HSBC Bank USA (formerly
known as Marine Midland Bank).*
4.3 Guarantee issued pursuant to the Indenture, dated as of June 28, 1999,
made by Statia Terminals Antilles N.V.*
27.1 Financial Data Schedule for Statia Terminals International N.V. (for
electronic filing only) Financial Data Schedule for Statia Terminals
Canada, Incorporated. (for electronic filing only)
* Incorporated by reference to the June 30, 1999 Form 10-Q of Statia
Terminals Group N.V., dated August 12, 1999.
(b) Reports on Form 8-K.
None.
Page 20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrants have duly caused this Report to be signed on their behalf by the
undersigned thereunto duly authorized.
STATIA TERMINALS INTERNATIONAL N.V.
(Registrant)
Date: August 13, 1999
By: /s/ JAMES G. CAMERON
---------------------------
James G. Cameron
Managing Director
(As Authorized Officer)
By: /s/ JAMES F. BRENNER
---------------------------
James F. Brenner
Vice President and Treasurer
(As Authorized Officer and Principal
Finance and Accounting Officer)
STATIA TERMINALS CANADA, INCORPORATED
(Registrant)
Date: August 13, 1999
By: /s/ JAMES F. BRENNER
--------------------------
James F. Brenner
Vice President-Finance
(As Authorized Officer and Principal
Finance and Accounting Officer)
Page S-1
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule for Statia Terminals International N.V.
(For electronic filing only)
27.2 Financial Data Schedule for Statia Terminals Canada, Incorporated
(For electronic filing only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATIA
TERMINALS INTERNATIONAL N.V.'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 1029101
<NAME> STATIA TERMINALS INTERNATIONAL N.V.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 17,464
<SECURITIES> 0
<RECEIVABLES> 10,938
<ALLOWANCES> (804)
<INVENTORY> 1,882
<CURRENT-ASSETS> 30,533
<PP&E> 233,736
<DEPRECIATION> (25,254)
<TOTAL-ASSETS> 242,314
<CURRENT-LIABILITIES> 23,393
<BONDS> 101,000
0
0
<COMMON> 6
<OTHER-SE> 117,915
<TOTAL-LIABILITY-AND-EQUITY> 242,314
<SALES> 45,599
<TOTAL-REVENUES> 79,682
<CGS> 39,927
<TOTAL-COSTS> 62,399
<OTHER-EXPENSES> 7,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,937
<INCOME-PRETAX> 1,984
<INCOME-TAX> 493
<INCOME-CONTINUING> 1,491
<DISCONTINUED> 0
<EXTRAORDINARY> (4,743)
<CHANGES> 0
<NET-INCOME> (3,252)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATIA
TERMINALS CANADA, INCORPORATED'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30,
1999,AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 1029102
<NAME> STATIA TERMINALS CANADA, INCORPORATED
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,382
<SECURITIES> 0
<RECEIVABLES> 2,312
<ALLOWANCES> (77)
<INVENTORY> 269
<CURRENT-ASSETS> 9,167
<PP&E> 31,797
<DEPRECIATION> (3,642)
<TOTAL-ASSETS> 38,233
<CURRENT-LIABILITIES> 3,994
<BONDS> 28,060
0
0
<COMMON> 0
<OTHER-SE> 6,179
<TOTAL-LIABILITY-AND-EQUITY> 38,233
<SALES> 60
<TOTAL-REVENUES> 11,233
<CGS> 51
<TOTAL-COSTS> 5,460
<OTHER-EXPENSES> 3,338
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,772
<INCOME-PRETAX> 799
<INCOME-TAX> 81
<INCOME-CONTINUING> 718
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 718
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
