<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q/A
(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, 2000
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 NUMBER
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.)
C/O COVENANT MANAGERS
L.B. SMITHPLEIN 3
CURACAO, NETHERLANDS ANTILLES
(011) (599-9) 4623700
(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> 2
STATIA TERMINALS INTERNATIONAL N.V.
AND
STATIA TERMINALS CANADA, INCORPORATED
QUARTERLY REPORT ON FORM 10-Q/A
JUNE 30, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 1
Consolidated Condensed Statements of Income (Loss) 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 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities and Use of Proceeds 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
</TABLE>
THIS QUARTERLY REPORT ON FORM 10-Q/A (THIS "REPORT") CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 27A OF THE SECURITIES ACT OF
1933, AS AMENDED. 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 OR CUSTOMERS, THE FINANCIAL CONDITION OF OUR CUSTOMERS,
INTERRUPTION OF OUR OPERATIONS CAUSED BY ADVERSE WEATHER CONDITIONS, THE
CONDITION OF THE U.S. AND CERTAIN FOREIGN ECONOMIES, AND OTHER MATTERS INCLUDED
IN THIS REPORT AND THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A. WE DO 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> 3
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,
1999 2000
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,632 $ 4,525
Accounts receivable-
Trade, net 12,957 9,885
Other 3,704 726
Inventory, net 3,239 4,910
Prepaid expenses 1,723 2,232
--------- ---------
Total current assets 25,255 22,278
PROPERTY AND EQUIPMENT, net 206,031 199,073
OTHER NONCURRENT ASSETS, net 2,985 2,570
--------- ---------
Total assets $ 234,271 $ 223,921
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 14,098 $ 12,135
Dividend payable 3,750 --
Accrued interest payable 1,516 1,516
Other accrued expenses 6,219 7,775
--------- ---------
Total current liabilities 25,583 21,426
LONG TERM DEBT - 11-3/4% FIRST MORTGAGE NOTES 101,000 101,000
--------- ---------
Total liabilities 126,583 122,426
--------- ---------
STOCKHOLDER'S EQUITY:
Common stock 6 6
Additional paid-in capital 126,090 126,090
Accumulated deficit (18,408) (24,601)
--------- ---------
Total stockholder's equity 107,688 101,495
--------- ---------
Total liabilities and stockholder's equity $ 234,271 $ 223,921
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
condensed financial statements.
Page 1
<PAGE> 4
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,
--------------------------- ---------------------------
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Terminaling services $ 17,408 $ 14,311 $ 34,036 $ 26,741
Product sales 24,859 39,916 45,646 69,791
-------- -------- -------- --------
Total revenues 42,267 54,227 79,682 96,532
-------- -------- -------- --------
COSTS OF REVENUES:
Terminaling services 10,699 10,303 20,320 20,418
Product sales 23,100 38,057 42,079 66,174
-------- -------- -------- --------
Total costs of revenues 33,799 48,360 62,399 86,592
-------- -------- -------- --------
Gross profit 8,468 5,867 17,283 9,940
ADMINISTRATIVE EXPENSES 1,660 2,438 3,785 4,599
SPECIAL COMPENSATION EXPENSE 2,152 -- 4,099 --
-------- -------- -------- --------
Operating income 4,656 3,429 9,399 5,341
INTEREST EXPENSE 3,735 3,192 7,937 6,360
INTEREST INCOME 347 33 522 54
-------- -------- -------- --------
Income (loss) before provision for income
taxes and extraordinary charge 1,268 270 1,984 (965)
PROVISION FOR INCOME TAXES 239 257 493 521
-------- -------- -------- --------
Income (loss) before extraordinary charge 1,029 13 1,491 (1,486)
EXTRAORDINARY CHARGE RELATED TO
EARLY EXTINGUISHMENT OF DEBT 4,743 -- 4,743 --
-------- -------- -------- --------
Net income (loss) available to common
stockholder $ (3,714) $ 13 $ (3,252) $ (1,486)
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
condensed financial statements.
Page 2
<PAGE> 5
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,
---------------------------
1999 2000
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss to common stockholder $ (3,252) $ (1,486)
Adjustments to reconcile net loss 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 5,947 6,734
Decrease in accounts receivable-trade 144 3,072
(Increase) decrease in accounts receivable-other (388) 2,978
(Increase) decrease in inventory 2,646 (1,671)
Increase in prepaid expenses (881) (509)
(Increase) decrease in other noncurrent assets (33) 74
Increase (decrease) in accounts payable 1,693 (1,963)
Increase in accrued expenses 70 1,556
-------- --------
Net cash provided by operating activities 12,841 8,785
-------- --------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment (4,057) (4,142)
Proceeds from sale of property and equipment 15 --
-------- --------
Net cash used in investing activities (4,042) (4,142)
-------- --------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Net proceeds from issuance of common stock to Parent 33,746 --
Repurchase of First Mortgage Notes (37,681) --
Dividends paid (1,273) (3,750)
-------- --------
Net cash used in financing activities (5,208) (3,750)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 3,591 893
CASH AND CASH EQUIVALENTS, beginning of period 13,873 3,632
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 17,464 $ 4,525
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 359 $ 199
======== ========
Cash paid for interest $ 8,030 $ 6,019
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
condensed financial statements.
Page 3
<PAGE> 6
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated condensed financial statements of Statia
Terminals International N.V. ("Statia") and 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 Consolidated
Financial Statements included in the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1999 (the "Form 10-K/A"). In the opinion of the
Company's management, the accompanying consolidated condensed financial
statements contain all adjustments and accruals necessary to present fairly the
financial position of the Company at June 30, 2000, and the results of its
operations and cash flows for the six months ended June 30, 1999 and 2000.
Operating results for the six months ended June 30, 2000, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2000.
Certain reclassifications were made to the 1999 financial statements
and notes thereto in order to conform to the 2000 presentation. Additionally,
the transactions discussed in note 3 below impacted the Company's results of
operations and financial condition and affect comparability across periods.
These financial statements should be read in conjunction with the Form 10-K/A.
For all periods presented herein, there were no significant differences
between net income and comprehensive income.
2. SEGMENT INFORMATION
The Company is organized around several different factors, the two most
significant of which are services and products, and geographic location. The
Company's primary services and products are terminaling services (resulting in
revenues from storage, throughput, dock usage, emergency response and other
terminal services) and product sales (such as sales of bunker fuels to ships and
other bulk petroleum product sales).
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, income taxes, and depreciation and
amortization adjusted for non-recurring transactions ("Adjusted EBITDA") and
earnings before interest expense and income taxes adjusted for non-recurring
transactions ("Adjusted EBIT").
Page 4
<PAGE> 7
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
2. SEGMENT INFORMATION- (CONTINUED)
The following information is provided for the Company's terminaling
services and product sales segments:
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1999 2000 1999 2000
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Terminaling services $17,408 $14,311 $34,036 $26,741
Product sales 24,859 39,916 45,646 69,791
------- ------- ------- -------
Total $42,267 $54,227 $79,682 $96,532
======= ======= ======= =======
ADJUSTED EBITDA:
Terminaling services $ 7,951 $ 4,520 $16,102 $ 8,199
Product sales 1,912 1,698 3,355 3,486
------- ------- ------- -------
Total $ 9,863 $ 6,218 $19,457 $11,685
======= ======= ======= =======
DEPRECIATION AND AMORTIZATION
EXPENSE:
Terminaling services $ 2,777 $ 2,833 $ 5,675 $ 6,278
Product sales 129 94 188 353
------- ------- ------- -------
Total $ 2,906 $ 2,927 $ 5,863 $ 6,631
======= ======= ======= =======
ADJUSTED EBIT:
Terminaling services $ 5,174 $ 1,687 $10,427 $ 1,921
Product sales 1,783 1,604 3,167 3,133
------- ------- ------- -------
Total $ 6,957 $ 3,291 $13,594 $ 5,054
======= ======= ======= =======
</TABLE>
A reconciliation of Adjusted 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,
---------------------------- ---------------------------
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Adjusted EBIT $ 6,957 $ 3,291 $ 13,594 $ 5,054
Special compensation expense (2,152) -- (4,099) --
Interest expense excluding debt
amortization expense (3,537) (3,021) (7,511) (6,019)
-------- -------- -------- --------
Income (loss) before provision for income
taxes and extraordinary charge $ 1,268 $ 270 $ 1,984 $ (965)
======== ======== ======== ========
</TABLE>
Page 5
<PAGE> 8
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
3. SALE OF COMMON STOCK TO PARENT AND RELATED TRANSACTIONS
As more fully discussed in the Form 10-K/A, on April 28, 1999, Statia's
parent, Statia Terminals Group N.V. (the "Parent"), completed its initial public
equity offering of 7.6 million class A common shares. The offering price was $20
per share raising gross proceeds of $152,000. A portion of the proceeds was used
by the Parent to purchase additional capital stock of Statia amounting to
$33,746, net of expenses. During May 1999, the Company used the proceeds from
the sale of Statia's capital stock, along with existing cash, to repurchase in
the open market a principal amount of $34,000 of the 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 six months ended June 30, 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 Parent's initial public offering of equity,
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.
The following unaudited pro forma consolidated results of operations
for the three and six month periods ended June 30, 1999, were prepared to
illustrate the estimated effects of the use of the net proceeds from the
Parent's initial public offering of equity and the restructuring as described in
the Parent's Registration Statement on Form S-1 (collectively, the "pro forma
transactions") as if the pro forma transactions had occurred at the beginning of
these respective periods. The unaudited pro forma consolidated condensed results
of operations should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the Company's
financial statements and the notes thereto, the other financial information
included in the Parent's Registration Statement on Form S-1 (File No.
333-72317), and the Company's Form 10-K/A for the year ended December 31, 1999.
This pro forma financial information is provided for informational purposes only
and does not purport to be indicative of the results of operations which would
have been obtained had the pro forma transactions been completed on the dates
indicated or results of operations for any future date or period.
Unaudited Selected Pro Forma
Consolidated Results
---------------------------------
For the Three For the Six
Months Ended Months Ended
June 30, 1999 June 30, 1999
------------- -------------
REVENUES $42,267 $79,682
OPERATING INCOME 6,808 13,498
NET INCOME AVAILABLE
TO COMMON STOCKHOLDER 3,592 7,057
Page 6
<PAGE> 9
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
4. REPLACEMENT OF SINGLE POINT MOORING SYSTEM HOSES
During the six months ended June 30, 2000, the Company replaced certain
large hoses attached to its single point mooring system (the "SPM"). In
connection with this hose change-out, the Company adopted the component
depreciation method for the SPM and its hoses as of January 1, 2000, which
resulted in a change in the estimated useful lives for depreciation purposes for
these hoses. As a result, in addition to recurring depreciation charges, the
Company incurred a non-cash charge to depreciation expense of $832 during the
first quarter of 2000 which is included in Costs of Revenues.
5. DIVIDEND OF M/V STATIA RESPONDER TO PARENT
In March, 2000, the ownership of the M/V STATIA RESPONDER, an emergency
response and maintenance vessel, was transferred to a subsidiary of the Parent
as the result of a dividend in the amount of $4,707 representing the net book
value of the vessel. On April 1, 2000, the Company entered into a three month
bareboat agreement with monthly renewals to charter the vessel from a subsidiary
of the Parent for $150 per month.
6. 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 7
<PAGE> 10
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
6. STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY - (CONTINUED)
STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1999 2000
------------ -----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 209 $ 884
Accounts receivable-
Trade, net 1,496 1,237
Other 1,960 295
Inventory, net 81 70
Prepaid expenses 255 315
Receivable from affiliates 2,986 3,566
------- -------
Total current assets 6,987 6,367
PROPERTY AND EQUIPMENT, net 28,705 28,221
OTHER NONCURRENT ASSETS, net 817 654
------- -------
Total assets $36,509 $35,242
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES $ 3,164 $ 2,538
LONG TERM DEBT- 11-3/4% FIRST MORTGAGE NOTES 28,060 28,060
------- -------
Total liabilities 31,224 30,598
STOCKHOLDER'S EQUITY:
Common stock and additional paid-in capital 2,266 2,266
Retained earnings 3,019 2,378
------- -------
Total stockholder's equity 5,285 4,644
------- -------
Total liabilities and stockholder's equity $36,509 $35,242
======= =======
</TABLE>
Page 8
<PAGE> 11
STATIA TERMINALS INTERNATIONAL N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
6. 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,
-------------------------- -----------------------
1999 2000 1999 2000
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES $ 6,116 $ 4,384 $11,233 $ 7,827
COSTS OF REVENUES 2,980 2,722 5,460 5,069
------- ------- ------- -------
Gross profit 3,136 1,662 5,773 2,758
ADMINISTRATIVE EXPENSES 903 828 1,823 1,568
SPECIAL COMPENSATION EXPENSE 736 -- 1,515 --
------- ------- ------- -------
Operating income 1,497 834 2,435 1,190
INTEREST EXPENSE 897 884 1,772 1,760
INTEREST INCOME 81 9 136 19
------- ------- ------- -------
Income (loss) before provision for
income taxes 681 (41) 799 (551)
PROVISION FOR INCOME TAXES 40 45 81 90
------- ------- ------- -------
Net income (loss) available to common
stockholder $ 641 $ (86) $ 718 $ (641)
======= ======= ======= =======
</TABLE>
STATIA TERMINALS CANADA, INCORPORATED AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
-------------------------
1999 2000
------- -------
<S> <C> <C>
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $(2,350) $ 1,002
------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property and equipment (677) (327)
------- -------
Net cash used in investing activities (677) (327)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,027) 675
CASH AND CASH EQUIVALENTS, beginning of period 4,409 209
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 1,382 $ 884
======= =======
</TABLE>
Page 9
<PAGE> 12
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 (the "Company") as of June
30, 2000, and the three and six month periods ended June 30, 1999, and 2000,
included herein. Reference should also be made to the Company's Annual Report on
Form 10-K/A that includes the Company's Consolidated Financial Statements as of
and for the year ended December 31, 1999.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentage of revenues represented by some items in our consolidated condensed
income statements.
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
------------------------------------------------------------
1999 2000
--------------------------- ------------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Revenues:
Terminaling services $ 17,408 41.2% $ 14,311 26.4%
Product sales 24,859 58.8% 39,916 73.6%
-------- ----- -------- -----
Total revenues 42,267 100.0% 54,227 100.0%
-------- ----- -------- -----
Costs of revenues:
Terminaling services 10,699 25.3% 10,303 19.0%
Product sales 23,100 54.7% 38,057 70.2%
-------- ----- -------- -----
Total costs of revenues 33,799 80.0% 48,360 89.2%
-------- ----- -------- -----
Gross profit 8,468 20.0% 5,867 10.8%
Administrative expenses 1,660 3.9% 2,438 4.5%
Special compensation expense 2,152 5.1% -- --
-------- ----- -------- -----
Operating income 4,656 11.0% 3,429 6.3%
Interest expense 3,735 8.8% 3,192 5.9%
Interest income 347 0.8% 33 0.1%
-------- ----- -------- -----
Income before provision for income taxes 1,268 3.0% 270 0.5%
Provision for income taxes 239 0.6% 257 0.5%
Extraordinary charge related to early extinguishment of debt 4,743 11.2% -- --
-------- ----- -------- -----
Net income (loss) available to common stockholder $ (3,714) (8.8)% $ 13 0.0%
======== ===== ======== =====
</TABLE>
Page 10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
-------------------------------------------------------
1999 2000
------------------------ -------------------------
% of % of
Dollars Revenues Dollars Revenues
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Terminaling services $ 34,036 42.7% $ 26,741 27.7%
Product sales 45,646 57.3% 69,791 72.3%
-------- ----- -------- -----
Total revenues 79,682 100.0% 96,532 100.0%
-------- ----- -------- -----
Costs of revenues:
Terminaling services 20,320 25.5% 20,418 21.2%
Product sales 42,079 52.8% 66,174 68.5%
-------- ----- -------- -----
Total costs of revenues 62,399 78.3% 86,592 89.7%
-------- ----- -------- -----
Gross profit 17,283 21.7% 9,940 10.3%
Administrative expenses 3,785 4.8% 4,599 4.8%
Special compensation expense 4,099 5.1% -- --
-------- ----- -------- -----
Operating income 9,399 11.8% 5,341 5.5%
Interest expense 7,937 10.0% 6,360 6.6%
Interest income 522 0.7% 54 0.1%
-------- ----- -------- -----
Income (loss) before provision for income taxes 1,984 2.5% (965) (1.0)%
Provision for income taxes 493 0.6% 521 0.5%
Extraordinary charge related to early extinguishment of debt 4,743 6.0% -- --
-------- ----- -------- -----
Net loss to common stockholder $ (3,252) (4.1)% $ (1,486) (1.5)%
======== ===== ======== =====
</TABLE>
Gross profit from terminaling services is generally higher than gross
profit from 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 product costs are also impacted by market supply conditions, types of
products sold, and volumes delivered.
We have orally agreed to the terms of a contract with a major
state-owned oil company under which we are currently purchasing a majority of
the fuel oil necessary to support our bunker sales requirements at St.
Eustatius. Although not yet signed by the supplier, the contract expires June
30, 2001, and contains terms and conditions which are comparable to prior
agreements with the supplier. We believe that suitable alternate sources of
supply are available from which we can procure fuel oil should our current
contract be interrupted or not be renewed.
The following tables set forth, for the periods indicated, (a) the
total revenues and total operating income, after allocation of administrative
expenses and elimination of certain intercompany transactions, at each of our
operating locations and (b) the percentage of such revenues and operating income
relative to our total revenues and operating income.
Page 11
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
REVENUES BY LOCATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
---------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $36,186 85.6% $49,856 91.9%
Canada 6,081 14.4% 4,371 8.1%
------- ----- ------- -----
Total $42,267 100.0% $54,227 100.0%
======= ===== ======= =====
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $68,482 85.9% $88,731 91.9%
Canada 11,200 14.1% 7,801 8.1%
------- ----- ------- -----
Total $79,682 100.0% $96,532 100.0%
======= ===== ======= =====
</TABLE>
OPERATING INCOME BY LOCATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
---------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $3,188 68.5% $2,776 81.0%
Canada 1,468 31.5% 653 19.0%
------ ----- ------ -----
Total $4,656 100.0% $3,429 100.0%
====== ===== ====== =====
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $6,993 74.4% $4,468 83.6%
Canada 2,406 25.6% 873 16.4%
------ ----- ------ -----
Total $9,399 100.0% $5,341 100.0%
====== ===== ====== =====
</TABLE>
Page 12
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
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 and equipment.
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,
--------------------------- -------------------------
1999 2000 1999 2000
------ ------ ------ ------
<S> <C> <C> <C> <C>
Netherlands Antilles and
the Caribbean:
Total capacity 11,334 11,334 11,334 11,334
Capacity leased 91% 87% 93% 82%
Throughput 17,468 18,680 33,676 30,960
Vessel calls 258 225 520 441
Canada:
Total capacity 7,404 7,479 7,404 7,479
Capacity leased 94% 65% 95% 62%
Throughput 15,410 15,275 22,334 24,212
Vessel calls 42 36 59 57
All locations:
Total capacity 18,738 18,813 18,738 18,813
Capacity leased 92% 78% 94% 74%
Throughput 32,878 33,955 56,010 55,172
Vessel calls 300 261 579 498
</TABLE>
SELECTED RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2000, VERSUS
THE THREE MONTHS ENDED MARCH 31, 2000
Total revenues for the three months ended June 30, 2000, were $54.2
million, compared to $42.3 million for the three months ended March 31, 2000,
representing an increase of $11.9 million, or 28.2%. This increase is due to
increased revenues from both our terminaling services and product sales
segments. The improvement over the first quarter 2000 in terminaling services
revenues is due primarily to additional short-term storage and throughput
contracts, while the increase in product sales revenues is due primarily to an
increase in the volume of products sold.
Page 13
<PAGE> 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
Operating income for the three months ended June 30, 2000, was $3.4
million compared to first quarter 2000 operating income of $1.9 million. First
quarter 2000 operating income included a non-cash charge of $0.8 million to
depreciation expense resulting from a change in estimated useful lives of
certain large hoses attached to our single point mooring system at St.
Eustatius. For the three months ended June 30, 2000, net income available to
common stockholder was $0.01 million compared to a net loss to common
stockholder of $1.5 million for the three months ended March 31, 2000.
THREE AND SIX MONTHS ENDED JUNE 30, 2000, VERSUS THE SAME PERIODS OF 1999
COMPARABILITY
Our Parent's initial public offering of equity, which closed on April
28, 1999, and the Parent's resultant equity contribution to the Company impacted
our results of operations and financial condition. Therefore, our results of
operations and financial condition may not be comparable across periods
presented herein.
REVENUES
Total revenues for the three and six months ended June 30, 2000, were
$54.2 million and $96.5 million, compared to $42.3 million and $79.7 million for
the same periods of 1999, representing increases of $11.9 million, or 28.3% and
$16.8 million, or 21.1%, respectively.
Revenues from terminaling services (resulting from revenues from
storage, throughput, dock usage, emergency response, and other terminal
services) for the three and six months ended June 30, 2000, were $14.3 million
and $26.7 million, compared to $17.4 million and $34.0 million for the same
periods of 1999, representing decreases of $3.1 million, or 17.8% and $7.3
million, or 21.4%, respectively. We believe the decreases in terminaling
services revenues for the three and six months ended June 30, 2000, compared to
the same periods in 1999, were principally due to the adverse effects of the
accord established between many of the oil exporting nations, some of whom are
our customers, to raise crude oil prices by reducing supply. Members of the
accord reduced their production of crude oil during the period from April 1,
1999, through late March 2000, which has reduced the worldwide quantity of crude
oil and petroleum products in storage. The accord has primarily impacted our
terminaling services revenues beginning with the second half of 1999. Despite
recently announced increases in crude oil production, crude oil and certain
petroleum products markets remain in backwardation.
For the six months ended June 30, 2000, approximately 78.3% of our tank
capacity was leased pursuant to long term contracts at our St. Eustatius and
Point Tupper locations together. Approximately 72.8% of our storage and
throughput revenues, excluding related ancillary services, were derived from
long term contracts during the same period.
Revenues from terminaling services at St. Eustatius decreased
approximately $1.0 million or 8.5% and $3.6 million or 15.5% during the three
and six months ended June 30, 2000, respectively, as compared to the same
periods of 1999, due to fewer vessel calls and a lower percentage capacity
leased. For the three and six months ended June 30, 2000, the overall percentage
of capacity leased at St. Eustatius was 87% and 82% as compared to 91% and 93%
for the same periods of 1999, reflecting a decrease in the percentage of
capacity leased for fuel oil tankage. The percentage of capacity leased for fuel
oil tankage decreased during the three and six months ended June 30, 2000, as
compared to the same periods of 1999, primarily as a result of the effects of
the accord, backwardation in this market, and the relative lower pricing of
products which compete with fuel oil. Twenty-three and 55 fewer cargo vessels
called at the St. Eustatius facility during the three and six months ended June
30, 2000, than during the same periods of 1999, resulting in lower revenues from
port charges, which consist of dock charges, emergency response fees, and other
terminal charges.
Page 14
<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
Revenues from terminaling services at Point Tupper decreased
approximately $1.7 million or 28.0% and $3.3 million or 29.7% during the three
and six months ended June 30, 2000, as compared to the same periods of 1999. The
decreases were due primarily to a lower percentage of tank capacity leased
during the three and six months ended June 30, 2000, resulting in lower storage
revenues. The percentage of tank capacity leased at Point Tupper decreased from
94% and 95% for the three and six months ended June 30, 1999, to 65% and 62% for
the same periods of 2000. These decreases were primarily the result of the
decision by a customer of this facility, who is a participant in the accord, not
to renew its crude oil storage contract at the end of the second quarter of
1999. Partially offsetting reduced storage revenues were revenues from a higher
number of barrels throughput by this facility's primary crude oil customer for
the six months ended June 30, 2000. Six and two fewer cargo vessels called
during the three and six months ended June 30, 2000, as compared to the same
periods of 1999, which led to lower revenues from port charges at this facility.
Revenues from product sales were $39.9 million and $69.8 million for
the three and six months ended June 30, 2000, compared to $24.9 million and
$45.6 million for the same periods of 1999, an increase of $15.1 million or
60.6% and $24.1 million or 52.9%, respectively. These increases were due to
increases in average selling prices partially offset by lower volumes delivered.
Average selling prices increased 66.1% and 88.9% when comparing the three and
six months ended June 30, 2000, with the same periods of 1999. These changes in
average selling prices were primarily the result of changes in the world oil
markets which have been significantly influenced by the accord. Metric tons of
bunkers and bulk product delivered decreased 3.3% and 19.1% during the three and
six months ended June 30, 2000, as compared to the same periods of 1999.
GROSS PROFIT
Gross profit for the three and six months ended June 30, 2000, was $5.9
million and $9.9 million compared to $8.5 million and $17.3 million for the same
periods of 1999, representing decreases of $2.6 million or 30.7% and $7.4
million or 42.5%. The decreases in gross profit were primarily the result of
lower gross profits realized on terminaling services, which were partially
offset by higher dollar gross margins realized on product sales. Gross profit
from terminaling services decreased primarily as a result of certain customers
choosing not to renew their storage and throughput contracts due, in part, to
reduced supply resulting from the accord established among many of the oil
exporting nations. Additionally, during the six months ended June 30, 2000, we
replaced certain hoses attached to our single point mooring system. As a result,
we incurred a non-cash charge of $0.8 million during the first quarter of 2000
to depreciation expense which is included in Costs of Revenues.
ADMINISTRATIVE EXPENSES
Administrative expenses were $2.4 million and $4.6 million for the
three and six months ended June 30, 2000, as compared to $1.7 million and $3.8
million for the same periods of 1999, representing increases of $0.7 million, or
46.9% and $0.8 million or 21.5%. The increases during the three and six months
ended June 30, 2000, as compared to the same periods of 1999, were primarily the
result of higher depreciation and personnel costs.
SPECIAL COMPENSATION EXPENSE
As more fully discussed in note 3 of the notes to 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.
Page 15
<PAGE> 18
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, 2000, we incurred $3.2
million and $6.4 million of interest expense compared to $3.7 million and $7.9
million for the same periods of 1999. Interest expense includes interest accrued
on our mortgage notes due in 2003, amortization expense related to deferred
financing costs, other interest expense, and bank charges. In May 1999, we
repurchased $34.0 million of the mortgage notes which resulted in lower interest
expense on this debt.
PROVISION FOR INCOME TAXES
Provision for income taxes was $0.3 million and $0.2 million for the
three months ended June 30, 2000 and 1999, respectively, and $0.5 million for
the six months ended June 30, 2000 and 1999.
EXTRAORDINARY CHARGE RELATED TO EARLY EXTINGUISHMENT OF DEBT
As more fully discussed in note 3 of the notes to consolidated
condensed financial statements included in Part I, Item 1, of this Report, we
recognized an extraordinary charge of $4.7 million during the six months ended
June 30, 1999, in connection with the repurchase of $34.0 million of our
mortgage notes. There was no income tax effect associated with this
extraordinary charge.
NET INCOME (LOSS)
The Company produced net income available to common stockholder of
$0.01 million and incurred a net loss to common stockholder of $1.5 million for
the three and six months ended June 30, 2000, as compared to a net loss to
common stockholder of $3.7 million and $3.3 million for the same periods of
1999. This improvement was primarily attributable to reduced debt service costs
and the net effect of the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW FROM OPERATING ACTIVITIES
Net cash provided by operating activities was $8.8 million and $12.8
million for the six months ended June 30, 2000, 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.
At June 30, 2000, we had cash and cash equivalents on hand of $4.5
million compared to $3.6 million at December 31, 1999. Accounts receivable and
accounts payable, primarily related to the purchases and sales of petroleum
products, were $10.6 million and $12.1 million, respectively, at June 30, 2000,
as compared to $16.7 million and $14.1 million, respectively, at December 31,
1999. The aggregate net changes of the accounts receivable and accounts payable
balances are included in net cash provided by operating activities.
CASH FLOW FROM INVESTING ACTIVITIES
Net cash used in investing activities, consisting primarily of
purchases of property and equipment, was $4.1 million and $4.0 million for the
six months ended June 30, 2000 and 1999, respectively. See the Summary of
Capital Expenditures by Type table which follows.
Page 16
<PAGE> 19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
CASH FLOW FROM FINANCING ACTIVITIES
During the six months ended June 30, 2000, we paid $3.8 million to the
Parent representing the remaining portion of a dividend declared in December
1999. During the six months ended June 30, 1999, we paid a dividend of $1.3
million to the Parent.
During the six months ended June 30, 2000, the ownership of the M/V
STATIA RESPONDER, an emergency response and maintenance vessel, was transferred
to a subsidiary of the Parent as the result of a dividend to the Parent in the
amount of $4.7 million representing the net book value of the vessel. The
Company has entered into a charter agreement with the subsidiary of the Parent
for use of the vessel.
On April 28, 1999, the Parent completed its initial public equity
offering of 7.6 million shares. The offering price was $20 per share raising
gross proceeds to the Parent of $152.0 million. A portion of the offering
proceeds was used by the Parent to purchase additional capital stock of Statia
Terminals International amounting to $33.7 million, net of expenses. During May
1999, we used the proceeds from the sale of Statia Terminals International's
capital stock, along with existing cash, to repurchase in the open market a
principal amount of $34.0 million of the mortgage notes for $39.5 million,
including acquisition costs and accrued interest of $3.7 million and $1.8
million, respectively.
As of August 14, 2000, no event of default under the indenture to the
mortgage notes existed and was continuing. The fixed charge coverage ratio as
defined in the indenture was at least 2.0 to 1 at June 30, 2000. We are not
restricted by this provision of the indenture from borrowing on the revolving
credit facility discussed below. Additionally, at June 30, 2000, the sum of our
dividends, restricted payments, aggregate consolidated net income (deficit), and
capital stock proceeds was approximately $13.3 million. Such sum must be
positive in order for us to make certain restricted payments, including
dividends to our Parent.
We have a $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 a defined available borrowing base,
which was approximately $9.1 million at June 30, 2000. The revolving credit
facility bears interest at the prime rate plus 0.50% per annum (10.0% at August
14, 2000) and will expire on November 27, 2000. From time to time during the six
months ended June 30, 2000, we borrowed against the revolving credit facility,
and all of such borrowings were repaid by June 30, 2000.
We believe that cash flow generated by operations and amounts available
under the revolving credit facility will be sufficient, until the maturity of
the mortgage notes, to fund working capital needs, capital expenditures and
other operating requirements, including any expenditures required by applicable
environmental laws and regulations, and to service debt. It is unlikely that we
will be able to repay the mortgage notes at maturity through projected operating
cash flow, and it will be necessary to refinance all or a portion of the
mortgage notes, or redeem the mortgage notes from additional equity funds, on or
after November 15, 2000, and before their maturity on November 15, 2003. We
continuously monitor financial market conditions and our financial position to
determine when and whether we will refinance or redeem, all or a portion of the
mortgage notes prior to their maturity. Although we intend to refinance and
believe that we will be able to refinance the mortgage notes during the November
15, 2000, to November 15, 2003, time period, 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 commercial, financial, and other factors, many of which are beyond our
control. There can be no assurances that we will be able to repay at maturity or
refinance this indebtedness in whole or in part, or at all, on terms acceptable
to us. If we are unable to repay or refinance the mortgage notes at or prior to
maturity, we will be forced to adopt alternative strategies that may include
seeking additional equity capital.
Page 17
<PAGE> 20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
CAPITAL EXPENDITURES
Our projected capital spending for 2000 is $7.7 million for operations
sustaining capital expenditures and $0.3 million to produce 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 revenues and those which sustain our operations.
SUMMARY OF CAPITAL EXPENDITURES BY TYPE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
--------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Produce incremental revenues $ 175 8.5% $ 62 4.5%
Operations sustaining capital expenditures 1,874 91.5% 1,321 95.5%
------ ----- ------ -----
Total $2,049 100.0% $1,383 100.0%
====== ===== ====== =====
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
--------------------------------------------------------
1999 2000
------------------------ ------------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Produce incremental revenues $ 296 7.3% $ 146 3.5%
Operations sustaining capital expenditures 3,761 92.7% 3,996 96.5%
------ ----- ------ -----
Total $4,057 100.0% $4,142 100.0%
====== ===== ====== =====
</TABLE>
Page 18
<PAGE> 21
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 90 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 on hand at June 30, 2000, 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
(Dollars in thousands)
<TABLE>
<CAPTION>
As of June 30, 2000
--------------------------------
Carrying Value Fair Value
-------------- ----------
<S> <C> <C>
Petroleum Inventory:
Statia Terminals N.V. $ 4,840 $ 5,210
Statia Terminals Canada, Inc. 70 195
--------- --------
Total $ 4,910 $ 5,405
========= ========
</TABLE>
Except for minor 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 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> 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Reference is made to Item 3. Legal Proceedings included in the
Company's 1999 Annual Report on Form 10-K/A. There have been no material
developments in the Company's legal proceedings since the Form 10-K/A was filed.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
The Company's web site is located at http://www.statiaterm.com
or http://www.statia.cc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
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)
(b) Reports on Form 8-K.
None.
Page 20
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
STATIA TERMINALS INTERNATIONAL N.V.
(Registrant)
Date: November 14, 2000
By: /s/ James G. Cameron
------------------------------------
James G. Cameron
Director
(As Authorized Officer)
By: /s/ James F. Brenner
-----------------------------------
James F. Brenner
Vice President and Treasurer
(As Authorized Officer and
Principal Financial Officer)
STATIA TERMINALS CANADA, INCORPORATED
(Registrant)
Date: November 14, 2000
By: /s/ James F. Brenner
-----------------------------------
James F. Brenner
Vice President-Finance
(As Authorized Officer and
Principal Financial Officer)
Page S-1
