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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 31, 2000
MARINE TRANSPORT CORPORATION
----------------------------
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER
000-11573
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DELAWARE 13-2625280
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(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
1200 HARBOR BOULEVARD, C-901,
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WEEHAWKEN, NJ 07082-0901
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(Address of principal executive offices)
Registrant's telephone number, including area code 201-330-0200
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ITEM 5. OTHER EVENTS
To demonstrate its compliance with the net tangible assets minimum balance
requirement of $4 million prescribed by the Nasdaq marketplace rules, the
Registrant attaches hereto its consolidated financial statements as of and for
the seven months ended July 31, 2000. As of July 31, 2000 the Registrant's net
tangible assets balance, as computed under guidance provided by Nasdaq, was
$5,071,000.
Date: August 30, 2000 /s/ Richard T. du Moulin
------------------------------
Richard T. du Moulin
President and Chief Executive Officer
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
FINANCIAL INFORMATION PAGE
----
FINANCIAL STATEMENTS
<S> <C>
Condensed Consolidated Statements of Operations for the
one month and seven months ended July 31, 2000 (unaudited) 3
Condensed Consolidated Balance Sheets - July 31, 2000 and
December 31, 1999 (unaudited) 4
Condensed Consolidated Statements of Changes in Shareholders'
Equity for the seven months ended July 31, 2000 and for the
year ended December 31, 1999 (unaudited) 5
Condensed Consolidated Statements of Cash Flows for the seven
months ended July 31, 2000 and 1999 (unaudited) 6
Notes to Condensed Consolidated Financial Statements 7-11
</TABLE>
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Month Seven Months
Ended Ended
July 31, July 31,
2000 2000
-------------------- -----------------
<S> <C> <C>
Revenues:
Voyage revenues.......... $ 20,419 $ 109,356
Other operating revenues. 1,835 15,736
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22,254 125,092
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Operating expenses:
Vessel and voyage........ 17,736 109,982
Depreciation and amortiza-
tion...................... 1,331 8,885
General and administrative.. 1,510 9,507
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20,577 128,374
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Operating income (loss)....... 1,677 (3,282)
Other income (expenses):
Interest expense............ (213) (1,727)
Interest income........... 177 914
Minority Interest........... 73 467
------------------ -----------------
Net other expenses............ 37 (346)
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Income (loss) before income
taxes and extraordinary item 1,714 (3,628)
(Provision) benefit for income
taxes....................... (600) 1,049
------------------ -----------------
Income (loss) before
extraordinary item.......... 1,114 (2,579)
Extraordinary income from
extinguishment of debt, net
of income taxes of $352..... -- 654
------------------ -----------------
Net income (loss)............. $ 1,114 $ (1,925)
================== =================
Basic earnings per common share:
Income (loss) before
extraordinary item.......... .18 (.42)
Extraordinary income, net of
income taxes................ -- .10
------------------ -----------------
Net income (loss)............. $ .18 $ (.32)
================== =================
Diluted earnings per common share:
Income (loss) before
extraordinary item.......... .18 (.42)
Extraordinary income, net of
income taxes................ -- .10
------------------ -----------------
Net income (loss)............. $ .18 $ (.32)
================== =================
</TABLE>
See notes to Condensed Consolidated Financial Statements.
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
July 31,
2000 December 31,
(Unaudited) 1999 (1)
--------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 7,394 $ 4,658
Receivables, less allowances of $357 in 2000 and $193 in
1999...................................................... 21,899 19,886
Income tax receivable................................... 581 --
Prepaid expenses and other current assets............... 3,369 4,482
--------------- ----------------
Total current assets...................................... 35,521 29,026
Restricted cash...... .................................... 4,000 --
Marketable securities and cash held in capital construction
fund...................................................... 4,448 4,125
Vessels and other property, .............................. 129,687 128,784
Less: accumulated depreciation and amortization........... (80,720) (75,498)
--------------- ----------------
Vessels and other property-net.......................... 48,967 53,286
Vessel drydocking costs................................... 7,769 8,643
Note receivable........................................... 9,000 9,000
Other assets and deferred charges......................... 5,650 6,769
Goodwill, net............................................. 10,685 11,016
--------------- -----------------
TOTAL ASSETS.............................................. $ 126,040 $ 121,865
=============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................ $ 18,317 $ 16,824
Accrued income taxes.................................... -- 94
Accrued liabilities..................................... 2,501 1,971
Current portion of debt................................. 5,810 5,999
--------------- ----------------
Total current liabilities................................. 26,628 24,888
Advance time charter revenues and other liabilities....... 1,491 675
Deferred gain on sale of vessels.......................... 34,572 17,790
Deferred income taxes..................................... 19,894 20,854
Long-term debt............................................ 27,699 40,214
Shareholders' equity...................................... 15,756 17,444
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................ $ 126,040 $ 121,865
=============== ================
</TABLE>
(1) The balance sheet as of December 31, 1999 has been derived from the audited
financial statements as of that date, but does not include all the information
and footnotes required by generally accepted accounting principles for complete
financial statements. See notes to Condensed Consolidated Financial Statements.
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock
------------------------- Accumulated
Retained Other Other
Capital Earnings Comprehensive Comprehensive
Shares Amount Surplus (Deficit) Income Income
--------- ---------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of December 31,1998 6,555 $3,277 $25,461 $(11,996) $(51)
Comprehensive income:
Net income (loss) 1,624 $1,624
Net unrealized gain (loss) on
securities, net of tax
benefit of $39 (149) (149)
------------
Comprehensive income $1,475
============
-------------------------------------------------------------------------
Balance as of December 31,1999 6,555 3,277 25,461 (10,372) (200)
Comprehensive income:
Net income (loss) (1,925) (1,925)
Net unrealized gain (loss) on
securities, net of tax benefit 104 104
------------
Comprehensive income $(1,821)
============
Issuance of restricted stock
awards 53 265
Amortization of deferred
compensation
========== ========== =========== ============ =============
Balance at July 31, 2000 6,555 $ 3,330 $ 25,726 $ (12,297) $(96)
========== ========== =========== ============ =============
<CAPTION>
Deferred Treasury
Compensation Stock Total
------------ ---------- -----------
<S> <C> <C> <C>
Balance as of December 31,1998 $ ----- $(722) $ 15,969
Comprehensive income:
Net income (loss) 1,624
Net unrealized gain (loss) on
securities, net of tax
benefit of $39 (149)
Comprehensive income
------------------------------------------
Balance as of December 31,1999 ----- (722) 17,444
Comprehensive income:
Net income (loss) (1,925)
Net unrealized gain (loss) on
securities, net of tax benefit 104
Comprehensive income
Issuance of restricted stock
awards (318)
Amortization of deferred
compensation 133 133
========== ======== ===========
Balance at July 31, 2000 $ (185) $(722) $ 15,756
========== ======== ===========
</TABLE>
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SEVEN MONTHS ENDED JULY 31, 2000
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
CASH FLOW PROVIDED (USED) BY OPERATING ACTIVITIES:
Net cash provided by operating activities $ 25,162
CASH FLOW PROVIDED (USED) BY INVESTING ACTIVITIES:
Additions to vessels and other property (1,752)
Increase in restricted cash (4,000)
Proceeds and interest received and reinvested in Capital Construction Fund (220)
Additions to vessel drydocking costs (3,750)
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Net cash provided (used ) by investing activities (9,722)
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CASH FLOW PROVIDED (USED) BY FINANCING ACTIVITIES:
Payment of long-term debt (12,704)
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Net cash provided (used ) by financing activities (12,704)
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Increase (decrease) in cash and cash equivalents 2,736
Cash and cash equivalents at beginning of period 4,658
---------------
Cash and cash equivalents at end of period $ 7,394
===============
</TABLE>
See notes to Condensed Consolidated Financial Statements.
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MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Marine Transport Corporation ("MTC" or the "Company"), formerly OMI Corp., is a
U.S.-based company that owns and charters a fleet of ocean-going vessels which
it operates in domestic and international markets. The Company also manages
vessels for other shipowners.
On June 17, 1998 OMI Corp. distributed to its shareholders, in a tax-free
distribution (the "Distribution"), all of the shares of its wholly owned
subsidiary Universal Bulk Carriers, Inc. ("UBC"). UBC operated the Company's
former foreign-flagged shipping businesses, and continues to operate those
businesses as OMI Corporation ("New OMI") under the Company's previous
management.
Prior to the Distribution, OMI Corp. acquired all of the outstanding common
stock of Marine Transport Lines, Inc.("MTL"), a U.S.-based company that owns,
operates and manages U.S. and foreign-flagged vessels, in exchange for the
consideration described in Note 2 (the "Acquisition"). The Company is currently
managed by certain former officers and directors of MTL and additional new
directors. The Company trades under the symbol "MTLX" and is listed on the
NASDAQ National Market.
The accompanying unaudited Condensed Consolidated Financial Statements have
been prepared in accordance with the instructions to Form 10-Q and, therefore,
do not include all information and footnotes necessary for a fair presentation
of financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of the
management of the Company, all adjustments (comprising only normal recurring
accruals) necessary for a fair presentation of operating results have been
included in the statements. Reference is made to MTC's Form 10-K for the year
ended December 31, 1999 and the Form S-1 filed on May 15, 1998 for additional
information.
NOTE 2 - ACQUISITION AND DISTRIBUTION
As consideration for the Acquisition: (a) OMI Corp. issued common stock of OMI
Corp. with a market value of $5,000,000 to the shareholders of MTL; (b) the
Company issued a certain number of shares of newly-issued common stock to the
shareholders of MTL; and (c) shareholders of MTL became entitled to additional
shares of the Company's newly-issued common stock, determined by the outcome of
certain post-transaction calculations. The Acquisition was valued at
approximately $11,886,000 representing the estimated fair value of MTL at the
date the transaction was completed plus the fair value of additional shares
issued as a purchase price adjustment
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for working capital amounts in excess of pre-established levels per the
Acquisition Agreement. The Acquisition has been accounted for as a purchase.
As part of the Distribution, MTC is party to certain agreements with New OMI,
including the following:
Distribution Agreement-The Distribution Agreement provides for, with certain
exceptions, assumptions of liabilities and cross-indemnities designed
principally to place financial responsibility for the domestic-related
liabilities with MTC and the foreign-related assets and liabilities with New
OMI. New OMI, however, assumed the obligations of the Company with respect to
the Company's 10.25 percent Senior Notes due November 1, 2003 in exchange for a
note in the amount of $6,400,000 (repaid in February 2000 at discount), which
was equivalent in value to the principal amount of the Senior Notes then
outstanding. The Distribution Agreement also provides that each of MTC and New
OMI will indemnify the other in the event of certain liabilities arising under
the Federal securities laws. Each of MTC and New OMI have sole responsibility
for claims arising out of respective activities after the Distribution.
The Distribution Agreement also provides that, except as otherwise set forth
therein or in any other agreement, all costs or expenses incurred on or prior to
the date of the Distribution in connection with the Distribution will be charged
to and paid by the party incurring such costs or expenses. Except as set forth
in the Distribution Agreement or any related agreement, each party shall bear
its own costs and expenses incurred after the date of the Distribution.
As part of the Distribution Agreement, New OMI has, subject to certain
exceptions, provided indemnity to MTC for all taxes attributable to the
Distribution and to certain corporate restructuring transactions preceding the
Distribution.
Tax Cooperation Agreement-Prior to the Distribution, MTC and New OMI entered
into a Tax Cooperation Agreement which sets forth each party's rights and
obligations with respect to Federal, state, local and foreign taxes for periods
prior to and after the Distribution and related matters such as filing of tax
returns and conducting audits and other proceedings. In general, the Tax
Cooperation Agreement provides that New OMI will be liable for taxes and be
entitled to refunds for each period covered by any such return which are
attributable to New OMI and its subsidiaries. Though valid as between the
parties thereto, the Tax Cooperation Agreement is not binding on the IRS and
does not alter either party's tax liability to the IRS.
Acquisition Agreement-The Acquisition Agreement provided for an adjustment in
the purchase price of MTL based on working capital
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amounts as of the date of the Acquisition compared to certain pre-established
levels. The purchase price adjustment was made by increasing the number of
shares of the Company which were exchanged for MTL's shares. In December 1998,
MTC issued approximately 312,000 shares of its common stock to former MTL
shareholders pursuant to this provision.
NOTE 3 - EARNINGS PER COMMON SHARE
The computation of basic earnings per share is based on weighted average number
of common shares outstanding of 6,205,000 for the month ended July 31, 2000; and
6,205,000 for the seven months ended July 31, 2000. The computation of diluted
earnings per share, which assumes the exercise of all dilutive stock options
using the treasury method, is based on the weighted average number of common
shares outstanding of 6,205,000 for the month ended July 31, 2000; and 6,205,000
for the seven months ended July 31, 2000.
NOTE 4 - LONG-TERM DEBT AND CREDIT ARRANGEMENTS
At July 31, 2000 Long-Term Debt consisted of the following (in thousands):
<TABLE>
<S> <C>
Term loan $ 13,069
Promissory note due to New OMI 225
Title XI debt 20,215
------
Total debt 33,509
Less current portion 5,810
------
Long-term portion $ 27,699
------
</TABLE>
All debt at July 31, 2000, with the exception of the Title XI debt, was created
or amended and restated concurrently with the Acquisition. The term loan and
revolving credit facilities of the Company accrue interest at a floating rate
based on LIBOR (the London Interbank Offering Rate) plus a margin (which can
range from 1.25% to 2.25%) that is determined by certain financial ratios (the
spread at July 31, 2000 was 1.75%). The Company pays a commitment fee each
quarter on the portion of the revolving credit agreement facilities that is
unused and available during the quarter. At July 31, 2000 the unused and
available revolving credit facilities totaled $3,000,000.
The promissory note bears interest at 8% and is payable in semi-annual
installments of principal and interest through May 1, 2003, with principal
payments equaling approximately $37,000.
The Company uses interest rate swaps to manage interest costs and those risks
associated with changing interest rates. At July 31, 2000 the Company had
outstanding an interest rate swap with a notional amount of $15,010,995 which
effectively fixed the base
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interest rate on the Company's term loans at 4.75% until December 17, 2001.
The term loan is payable in thirteen quarterly installments through June 18,
2003; the first twelve installments total $797,372 each; and the final
installment totals $5,297,362. The revolving credit facilities reduce to
$2,000,000 on June 18, 2001 and expire on June 18, 2003.
On September 28, 1999 the vessels SMT Chemical Trader and SMT Chemical Explorer
(formerly the Frances Hammer and Julius Hammer, respectively) were acquired by
two wholly-owned subsidiaries of the Company. The acquisition price was
$21,884,000 consisting of a cash payment of approximately $514,000 and the
remaining principal on two loans guaranteed by the United States Department of
Transportation Maritime Administration (the "Title XI debt"), which loans were
assumed by the Company's subsidiaries. The Title XI debt, which has an interest
rate of 8.125%, is payable in thirteen semi-annual installments whose principal
portions total $1,231,00 in 2000; $2,719,000 in 2001; $2,962,000 in 2002;
$2,938,000 in 2003; $3,348,000 in 2004; $3,823,000 in 2005; and $3,195,000 in
2006. The Title XI debt impose semi-annual declining penalties on any prepayment
until September 2005. Occidental Petroleum Corporation, the former guarantor of
the Title XI debt, continues to provide a reducing guaranty in favor of the
United States of America of up to $6,000,000. The Company and Stolt-Nielsen S.A.
("Stolt") also severally guarantee all the Title XI debt with the Company
providing a 75% guaranty and Stolt providing a 25% guaranty. The Company's
Marketable Securities and Cash held in the Capital Construction Fund, which
currently totals $4,340,000 has also been pledged as security for the Title XI
debt and may, under certain circumstances, be employed to reduce the outstanding
principal amount.
The Company's debt obligations restrict its ability to pay or declare dividends
and require the Company to maintain certain financial ratios, minimum cash
balances, minimum asset values, and to reduce debt with the proceeds derived
from the sale of any vessels. In addition, all Company assets (except for SMT
Chemical Explorer and SMT Chemical Trader, which are encumbered by their own
mortgages, and certain workboats owned by the Company's wholly-owned subsidiary,
MTL Petrolink) are pledged as collateral to secure the debt outstanding under
the term loan and revolving credit facility agreements. At July 31, 2000 the
Company was in compliance with all covenants imposed by its debt agreements, as
amended.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company is a party to a number of litigation and arbitration proceedings
arising from its operations. Such actions are covered by insurance or, in the
opinion of management are of such a nature that the ultimate liability, if any,
would not have a material adverse effect on the operations or financial position
of the Company.
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NOTE 6 - FINANCIAL INFORMATION RELATING TO SEGMENTS
During the period ended July 31, 2000 the Company operated in following two
distinct operating segments:
Ship Management ("Management") Technical management of vessels owned by others,
including vessels of the U.S. Maritime Administration ("MARAD").
Transportation Services for Energy and Chemicals ("Energy and Chemicals") Owned
and chartered-in U.S.-based vessels operating under time and voyage charters
with customers, which are primarily chemical and oil-production companies.
<TABLE>
<CAPTION>
Energy and
SEVEN MONTHS ENDED JULY 31, Management Chemicals Total
2000 ----------------------------------------------
<S> <C> <C> <C>
Total revenues $ 12,162 $112,930 $125,092
Vessel and voyage expenses 6,497 103,476 109,973
Depreciation
and amortization expense 1,516 7,369 8,885
----------------------------------------------
Segment income(loss) $ 4,144 $ 2,085 6,234
=================================
General & administrative expenses (9,516)
Minority interest 467
Interest expense, net (813)
--------------
Consolidated loss before income taxes
and extraordinary item $ (3,628)
==============
Total operating assets $ 12,321 $ 91,413 $103,734
Corporate assets -- -- $ 22,306
----------------------------------------------
Total assets $ 12,321 $ 91,413 $126,040
==============================================
</TABLE>
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