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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
- - ---- Exchange Act of 1934
For the Quarterly Period ended March 31, 1994
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 1-9063
MARITRANS INC.
- - ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-0343903
- - ---------- ----------
(State or other jurisdiction of (Identification No.
incorporation or organization) I.R.S. Employer)
ONE LOGAN SQUARE, 26TH FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (215) 864-1200
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Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 requirements for the past 90 days.
Yes X No
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Common Stock outstanding as of March 31, 1994: 12,523,000
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MARITRANS INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets.................1
Consolidated Statements of Income.....................2
Consolidated Statements of Cash Flows.................3
Notes to Condensed Consolidated Financial Statements..4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.........6
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings....................................10
ITEM 4. Submission of Matters to a Vote of Security Holders..10
ITEM 6. Exhibits and Reports on Form 8-K.....................10
Signature .....................................................11
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PART I: FINANCIAL INFORMATION
MARITRANS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000)
MARCH 31, 1994 DECEMBER 31, 1993
-------------- -----------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 35,305 $ 22,422
Trade accounts receivable 15,947 14,094
Other accounts receivable 5,935 9,748
Prepaid expenses 3,590 6,061
Other current assets 7,414 8,364
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Total current assets 68,191 60,689
Vessels, terminals and equipment 260,152 262,176
Less accumulated depreciation 81,207 78,966
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Net vessels, terminals and equipment 178,945 183,210
Other 8,753 9,139
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Total assets $255,889 $253,038
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 1,945 $ 3,492
Accrued interest 4,767 2,382
Other current liabilities 24,536 25,476
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Total current liabilities 31,248 31,350
Long-term debt 109,978 110,556
Deferred shipyard costs and other 15,522 15,196
Deferred income taxes 22,241 21,062
Stockholders' equity 76,900 74,874
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Total liabilities and stockholders'
equity $255,889 $253,038
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See accompanying notes.
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share/unit amounts)
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1994 MARCH 31, 1993
-------------- --------------
Revenues $ 33,098 $ 32,217
Costs and expenses:
Operation expense 16,594 17,968
Maintenance expense 5,179 4,964
General and administrative 1,897 2,609
Depreciation and amortization 3,845 3,954
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Total operating expenses 27,515 29,495
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Operating income 5,583 2,722
Interest expense, net (2,542) (2,672)
Other income, net 179 4,295
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Income before income taxes $ 3,220 $ 4,345
Provision for income taxes:
Provision for taxes 1,194 -
Deferred taxes - resulting from Conversion - 16,568
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Net income (loss) $ 2,026 $(12,223)
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Net income (loss) allocated to
Limited Partners per Limited Partner unit $ n/a $ (0.98)
Earnings per common share $ 0.16 $ n/a
See accompanying notes.
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(unaudited)
($000)
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1994 MARCH 31, 1993
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Cash flows from operating activities:
Net income (loss) $ 2,026 $(12,223)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 3,845 3,954
Deferred income tax provision 1,194 21,516
Changes in current assets other
than cash 5,381 (4,894)
Changes in current liabilities
other than debt (102) 1,744
Non-current changes, net 576 737
(Gain)/loss on sale of equipment 23 (3,816)
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Total adjustments to net income 10,917 19,241
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Net cash provided by (used in) operating
activities 12,943 7,018
Cash flows from investing activities:
Cash proceeds from sale of equipment 2,563 6,619
Purchase of vessels, terminals and equipment (2,045) (5,468)
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Net cash provided by (used in)
investing activities 518 1,151
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Cash flows from financing activities:
Payment of long-term debt (578) (300)
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Net cash provided by (used in)
financing activities (578) (300)
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Net increase in cash and cash equivalents 12,883 7,869
Cash and cash equivalents at beginning of
period 22,422 23,174
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Cash and cash equivalents at end of period $ 35,305 $ 31,043
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See accompanying notes.
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MARITRANS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation/Organization
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At March 31, 1994, Maritrans Inc. owns Maritrans Operating Partners
L.P. ("the Operating Partnership") and Maritrans Holdings Inc.
(collectively, the "Company"). These subsidiaries, directly and
indirectly, own and operate tugs and barges principally used in the
transportation of oil and related products, and own and operate
petroleum storage facilities.
On March 31, 1993, the limited partners of Maritrans Partners L.P.
(the "Partnership") voted on a proposal to convert the Partnership to
corporate form (the "Conversion"). The proposal was approved, and on
April 1, 1993, Maritrans Inc., then a newly-formed Delaware
corporation ("the Corporation"), succeeded to all assets and
liabilities of the Partnership. The holders of general and limited
partner interests in the Partnership and the Operating Partnership
were issued shares of common stock, par value $.01 per share("Common
Stock"), of the Corporation, representing substantially the same
percentage equity interest in the Corporation as they had in the
Partnership, directly or indirectly, in exchange for their partnership
interest. Each previously held unit of limited partnership interest
in the Partnership was exchanged for one share of Common Stock of the
Corporation. For financial accounting purposes, the conversion to
corporate form has been treated as a reorganization of affiliated
entities, with the assets and liabilities recorded at their historical
costs. In addition, the Partnership recognized a net deferred income
tax liability for temporary differences in accordance with Statement
of Financial Accounting Standards ("FAS") No. 109, Accounting for
Income Taxes, which resulted in a one-time charge to earnings of $16.6
million in the first quarter of 1993.
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In the opinion of management, the accompanying condensed
consolidated financial statements of Maritrans Inc., which are
unaudited (except for the Condensed Consolidated Balance Sheet as of
December 31, 1993, which is derived from audited financial
statements), include all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial statements of the
consolidated entities.
Pursuant to the rules and regulations of the Securities and Exchange
Commission, the unaudited condensed consolidated financial statements
do not include all of the information and notes normally included with
annual financial statements prepared in accordance with generally
accepted accounting principles. It is suggested that these financial
statements be read in conjunction with the consolidated historical
financial statements and notes thereto included in the Corporation's
Form 10-K for the period ended December 31, 1993.
2. Common Shares and Limited Partner Units
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Earnings per common share is based on 12,523,000 shares outstanding.
The potential effect of outstanding stock options is not dilutive.
Net income (loss) allocated to Limited Partners per Limited Partner
unit is based on 12,250,000 outstanding units.
3. Income Taxes
------------
The Company's effective tax rate differs from the federal statutory
rate due primarily to state income taxes.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources
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With respect to the quarter ended March 31, 1994, funds provided
by operating activities and investing transactions were
sufficient to fully meet debt service obligations and loan
agreement restrictions. With conversion to corporate form,
Maritrans is subject to corporate income taxes which may reduce
cash flow from operations. As previously described, for
financial accounting purposes, the conversion to corporate form
was treated as a reorganization of affiliated entities, with the
assets and liabilities recorded at their historical costs. In
addition, the Partnership recognized, in the first quarter of
1993, a net deferred income tax liability for temporary
differences in accordance with FAS No. 109, Accounting for Income
Taxes.
Management believes that in 1994 funds provided by operating
activities, augmented by financing and investing transactions,
will be sufficient to provide the funds necessary for operations,
anticipated capital expenditures, lease payments and required
debt repayments. At this time no dividends are expected to
be made in 1994.
Barring changes in its current plans, management believes capital
expenditures in 1994 for improvements to its currently operating
vessels and existing marine terminals will be less than $5
million compared to $17 million in 1993, when substantial
expenditures were made for vessel productivity improvements and
marine terminal facility purchases. However, the Company will
continue to evaluate the potential purchase of marine storage
terminal and other investments consistent with its long-term
strategic interests, and the potential sources of funds for those
potential investments. Total capital expenditures of the Company
through March 31, 1994 were $2.0 million.
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Liquidity and Capital Indicators
--------------------------------
As of March 31, 1994:
Ratio of current assets to current liabilities 2.18
Working capital (in thousands) $36,943
Ratio of total debt to the sum of total debt
and stockholders' equity .60
Working Capital Position
------------------------
Working capital increased from December 31, 1993 to March 31,
1994. Current assets increased as a result of a significant
increase in cash and cash equivalent balances due to operating
activities. Current liabilities decreased due to a decline in
trade accounts payable and accrued shipyard costs, which were
substantially offset by an increase in accrued interest. The
ratio of current assets to current liabilities increased from
1.94 at December 31, 1993 to 2.18 at March 31, 1994.
Debt Obligations and Borrowing Facility
---------------------------------------
At March 31, 1994, the Company had $116.3 million in total
outstanding debt, secured by mortgages on substantially all of
the fixed assets of the subsidiaries of the Corporation. The
current portion of this debt at March 31, 1994 is $6.3 million.
The Company has a $10 million working capital facility, secured
by its receivables and inventories, which expires June 30, 1994
and which is expected to be renewed. At March 31, 1994 there
were no borrowings against this facility.
RESULTS OF OPERATIONS
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Three Month Comparison
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Revenues
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Revenues of $33.1 million for the three months ended March 31,
1994, increased by $0.9 million, or 2.8%, from revenues of $32.2
million for the three months ended March 31, 1993. Barrels of
cargo transported decreased by 0.7 million barrels, from 60.8
million to 60.1 million, respectively. Despite the decline in
volume,increased average daily charter revenues resulted from
vessel demand caused by improved economic activity and harsh
weather (both of which normally translate into high levels of oil
consumption) in the Company's primary markets for marine
transportation. Revenue from sources other than marine
transportation increased from 3.9% of total revenue, for the
three months ended March 31, 1993, to 5.8% for the three months
ended March 31, 1994, due to additional terminalling operations,
contingency management activities, and other services supplied to
third-party vessel owners.
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Results
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Operating expenses of $27.5 million for the three months ended
March 31, 1994, decreased by $2.0 million, or 6.8%, from
operating expenses of $29.5 million for the three months ended
March 31, 1993. This decrease is primarily due to the
streamlining measures initiated during the last quarter of 1993
and, to a lesser extent, to a reduction in the expense associated
with chartering vessels from others.
Other income in the three months ended March 31, 1993 includes a
$3.8 million gain on the sale of fixed assets, primarily four
small barges that were excess to expected future business needs.
The adoption of FAS No. 109, Accounting for Income Taxes, caused
the Partnership to recognize a net deferred income tax provision
of $16.6 million for the three months ending March 31, 1993. The
adoption of this accounting rule was prescribed by the conversion
of the Partnership to corporate status, which occurred April 1,
1993.
Net income of $2.0 million for the three months ended March 31,
1994, is $14.2 million higher than the net loss of $12.2 million
for the three months ended March 31, 1993. The loss in 1993 was
the result of the previously noted provision for deferred income
taxes. Income before income taxes for the periods decreased to
$3.2 million from $4.3 million in the comparable period last
year. The decrease is due in part to the inclusion of gains on
sales of fixed assets in 1993, as noted above.
Management expects that earnings in the second quarter will not
match its first quarter results due to refinery maintenance and
anticipated industry inventory management practices.
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Part II: OTHER INFORMATION
ITEM 1. Legal Proceedings
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None.
ITEM 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of the Company's security
holders, through the solicitation of proxies or otherwise, during
the quarter ended March 31, 1994.
ITEM 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
No. 11 - Computation of Earnings Per Common Share.
(b) Reports on Form 8-K
(1) No reports on Form 8-K were filed during the quarter ended
March 31, 1994.
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SIGNATURE
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.
MARITRANS INC.
(Registrant)
By: /s/ Gary L. Schaefer Dated: May 13, 1994
----------------------------------------
Gary L. Schaefer
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: May 13, 1994
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Walter T. Bromfield
Controller
(Principal Accounting Officer)
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EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Quarter Ended March 31, 1994*
Primary:
Income:
Net income $ 2,026,000
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Shares:
Weighted average number of
common shares outstanding 12,523,000
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Primary earnings per common share $ .1618
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Assuming full dilution:
Income:
Net income $ 2,026,000
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Shares:
Weighted average number of
common shares outstanding 12,523,000
Assuming exercise of options reduced
by the number of shares which could
have been purchased with the proceeds
from the exercise of such options 24,141
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Weighted average number of common
shares outstanding as adjusted 12,547,141
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Fully diluted earnings per common share $ .1615**
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* See notes 1 and 2 of the notes to the condensed consolidated financial
statements.
** This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
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