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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 June 30, 1994
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or
Transition Report Pursuant to Section 13 or 15(d) of the
- --- Securities Exchange Act of 1934
For the Transition Period from to
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Commission File Number 1-9063
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MARITRANS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 51-0343903
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(State or other jurisdiction of (Identification No.
incorporation or organization) I.R.S. Employer)
ONE LOGAN SQUARE, 26TH FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
- ------------------------------ -----------
(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 June 30, 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. . . . . . . . .4
Notes to Condensed Consolidated Financial Statements .5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . .7
PART II. OTHER INFORMATION
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ITEM 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 12
ITEM 4. Submission of Matters to a Vote of Security Holders. 12
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 12
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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PART I: FINANCIAL INFORMATION
MARITRANS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000)
<TABLE>
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993
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(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 29,357 $ 22,422
Marketable securities 4,775 -
Trade accounts receivable 13,234 14,094
Inventories 3,531 4,968
Prepaid expenses 4,136 6,061
Other current assets 11,724 13,144
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Total current assets 66,757 60,689
Vessels, terminals and equipment 260,265 262,176
Less accumulated depreciation 84,715 78,966
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Net vessels, terminals and equipment 175,550 183,210
Other 8,360 9,139
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Total assets $250,667 $253,038
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Debt due within one year 6,311 6,311
Trade accounts payable 2,622 3,492
Accrued interest 2,297 2,382
Accrued shipyard costs 6,741 6,562
Accrued wages and benefits 5,050 5,649
Other accrued liabilities 5,671 6,954
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Total current liabilities 28,692 31,350
Long-term debt 105,400 110,556
Deferred shipyard costs and other 15,802 15,196
Deferred income taxes 22,857 21,062
Stockholders' equity 77,916 74,874
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Total liabilities and stockholders'
equity $250,667 $253,038
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</TABLE>
See accompanying notes.
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
APRIL 1 TO APRIL 1 TO
JUNE 30, 1994 JUNE 30, 1993
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Revenues $29,522 $33,603
Costs and expenses:
Operation expense 15,500 19,264
Maintenance expense 5,239 5,213
General and administrative 1,726 2,729
Depreciation and amortization 3,793 3,825
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Total operating expenses 26,258 31,031
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Operating income 3,264 2,572
Interest expense, net (2,454) (2,583)
Other income, net 830 1,183
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Income before income taxes 1,640 1,172
Income tax provision 624 533
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Net income $ 1,016 $ 639
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Earnings per common share $ 0.08 $ 0.05
See accompanying notes.
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
JANUARY 1 TO JANUARY 1 TO
JUNE 30, 1994 JUNE 30, 1993
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Revenues $62,620 $ 65,820
Costs and expenses:
Operation expense 32,094 37,233
Maintenance expense 10,418 10,176
General and administrative 3,623 5,338
Depreciation and amortization 7,638 7,779
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Total operating expenses 53,773 60,526
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Operating income 8,847 5,294
Interest expense, net (4,996) (5,255)
Other income, net 1,009 5,478
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Income before income taxes 4,860 5,517
Provision for income taxes:
Provision for taxes 1,818 533
Deferred taxes - resulting from Conversion - 16,568
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Net income (loss) $ 3,042 $(11,584)
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Pro forma loss per share $ n/a $ (0.93)
Earnings per common share $ 0.24 $ 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)
<TABLE>
<CAPTION>
JANUARY 1 TO JANUARY 1 TO
JUNE 30, 1994 JUNE 30, 1993
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 3,042 $(11,584)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 7,638 7,779
Deferred income tax provision 1,818 16,009
Changes in current assets other
than cash 867 (4,643)
Changes in current liabilities
other than debt (2,658) (653)
Non-current changes, net 1,162 1,975
(Gain)/loss on sale of equipment 35 (4,865)
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Total adjustments to net income 8,862 15,602
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Net cash provided by (used in) operating
activities 11,904 4,018
Cash flows from investing activities:
Cash proceeds from sale of equipment 2,739 8,638
Purchase of vessels, terminals and equipment (2,552) (8,623)
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Net cash provided by (used in)
investing activities 187 15
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Cash flows from financing activities:
Payment of long-term debt (5,156) (4,878)
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Net cash provided by (used in)
financing activities (5,156) (4,878)
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Net increase (decrease)
in cash and cash equivalents 6,935 (845)
Cash and cash equivalents at beginning of
period 22,422 23,174
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Cash and cash equivalents at end of period $29,357 $ 22,329
======= ========
</TABLE>
See accompanying notes.
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MARITRANS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation/Organization
----------------------------------
At June 30, 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.
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.
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2. Common Shares and Limited Partner Units
---------------------------------------
Earnings per common share for the quarters ended June 30, 1994 and 1993
and for the six months ended June 30, 1994, is based on 12,523,000 shares
outstanding. The potential effect of outstanding stock options is not
dilutive.
Pro forma loss per share for the six months ended June 30, 1993 is based
on 12,250,000 outstanding Limited Partner units prior to Conversion and
12,523,000 outstanding shares of Common Stock subsequent to Conversion.
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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For the six months ended June 30, 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 scheduled to be made in
1994.
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 terminals 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 June 30, 1994 were $2.6 million.
Liquidity and Capital Indicators
--------------------------------
As of June 30, 1994:
Ratio of current assets to current liabilities 2.33
Working capital (in thousands) $38,065
Ratio of total debt to the sum of total debt
and stockholders' equity .59
Working Capital Position
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Working capital increased by $8.7 million from December 31, 1993 to
June 30, 1994. Current assets increased as a result of a significant
increase in cash and cash equivalent balances generated from
operating activities. Current liabilities decreased due to a
decline in trade accounts payable and other accrued liabilities.
Current assets increased due to the purchase of marketable
securities offset by declines in inventory and prepaid expenses.
The ratio of current assets to current liabilities increased from
1.94 at December 31, 1993 to 2.33 at June 30, 1994.
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Debt Obligations and Borrowing Facility
---------------------------------------
At June 30, 1994, the Company had $111.7 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 June 30, 1994 is $6.3 million. The Company
has a $10 million working capital facility, secured by its
receivables and inventories, which expires June 30, 1995. At June
30, 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 $29.5 million for the three months ended June 30, 1994,
decreased by $4.1 million, or 12.2%, from revenues of $33.6 million
for the three months ended June 30, 1993. Barrels of cargo
transported decreased by 7 million barrels, from 66 million to 59
million, respectively. The decline in revenue and volume is the
result of the elimination of a vessel which was chartered during
most of 1993 and generally softer market conditions relative to the
marine transportation of refined petroleum products. Revenue from
sources other than marine transportation increased from 6.2% of
total revenue, for the three months ended June 30, 1993, to 7.8% for
the three months ended June 30, 1994, due to additional terminalling
operations, contingency management activities, and other services
supplied to third-party vessel owners.
Results
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Operating expenses of $26.3 million for the three months ended June
30, 1994, decreased by $4.7 million, or 15.2%, from operating
expenses of $31.0 million for the three months ended June 30, 1993.
This decrease is primarily due to a reduction in the expense
associated with chartering vessels from others and, to a lesser
extent, to the streamlining measures initiated during the last
quarter of 1993. Savings from the substantial reduction of expense
associated with chartering vessels is expected to continue for the
balance of 1994.
Other income in the three months ended June 30, 1993 includes a $1.0
million gain on the sale of fixed assets, primarily a small barge
that was excess to expected future business needs.
Net income for the quarter ended June 30, 1994 increased by $0.4
million from $0.6 million for the quarter ended June 30, 1993 to
$1.0 million as the result of significantly lower operating costs.
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Six Month Comparison
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Revenues
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Revenues of $62.6 million for the six months ended June 30, 1994
decreased $3.2 million, or 4.9% from revenues of $65.8 million for
the six months ended June 30, 1993. Barrels of cargo transported
decreased by 8 million barrels, from 127 million barrels at June 30,
1993 to 119 million at June 30, 1994. Although the decline in
volume has been the most significant factor for the decrease in
revenues for the quarter ended June 30, 1994, continued price
competition and relatively softer market conditions have also
contributed to decline in revenue for the first six months of 1994.
Revenue from sources other than marine transportation increased from
5.4% of total revenue, for the six months ended June 30, 1993, to
7.4% for the six months ended June 30, 1994, due to additional
terminalling operations, contingency management activities, and
other services supplied to third-party vessel owners.
Results
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Operating expenses of $53.8 million for the six months ended June
30, 1994 decreased by $6.7 million, or 11.1% from operating expense
of $60.5 million for the six months ended June 30, 1993. This
decrease is primarily due to the aforementioned streamlining
measures and to the substantial reduction in the expense associated
with chartering vessels from others incurred in the 1993 period when
shipyard scheduling took owned vessels out of service for
maintenance and productivity improvements.
Other Income for the six months ended June 30, 1993 includes a $4.8
million gain on the sale of fixed assets, primarily five small
barges that were excess to the Company's 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 $3.0 million for the six months ended June 30, 1994,
is $14.6 million higher than the net loss of $11.6 million for the
six months ended June 30, 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 $4.9 million from
$5.5 million in the comparable period last year. The decrease is
due in part to the inclusion of gains of $4.8 million on sales of
fixed assets in 1993, as noted above.
Management expects earnings in the third quarter to continue at
levels near second quarter results. However, improved earnings may
be realized during the remainder of the year, and particularly in
the fourth quarter, as new distribution patterns made necessary by
reformulated gasoline requirements may increase demand, in the near
term, for marine transportation of petroleum products. These market
conditions may be further aided by expected modest scrappings of
Maritrans' competitors' oldest vessels caused by the Oil Pollution
Act of 1990.
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Part II: OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
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The Company held its Annual Meeting of Stockholders of the
Registrant on May 12, 1994 to vote upon 1) the election of two
directors, Stephen A. Van Dyck and Robert E. Boni, to serve for
three year terms and 2) a proposal to approve Amendments to the
Maritrans Inc. Equity Compensation Plan and grants of stock options
thereunder (the "Proposal"), as described in the Registrant's Proxy
Statement dated March 30, 1994. At the time of the meeting,
12,523,000 shares of Common Stock were issued and outstanding and
entitled to vote on the aforementioned matters. At the meeting,
8,209,920 shares voted in favor of the election of Mr. Van Dyck, and
203,765 shares abstained (including broker non-votes) and 8,209,890
shares voted in favor of the election of Dr. Boni, and 203,795
shares abstained (including broker non-votes). Dr. Dorman and
Messrs. Johnson, Lindsay and Sanborn will continue to serve their
unexpired terms as directors of the Company. At the meeting,
7,360,725 shares voted in favor of the Proposal, 984,196 shares
voted against the Proposal, and 68,764 shares abstained (including
broker non-votes).
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(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 June
30, 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: August 12, 1994
-------------------------------
Gary L. Schaefer
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: August 12, 1994
-------------------------------
Walter T. Bromfield
Controller
(Principal Accounting Officer)
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<PAGE> 1 EXHIBIT 11
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Quarter Ended June 30, 1994*
Primary:
Income:
Net income $ 1,016,000
===========
Shares:
Weighted average number of
common shares outstanding 12,523,000
===========
Primary earnings per common share $ .0811
===========
Assuming full dilution:
Income:
Net income $ 1,016,000
===========
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 41,846
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Weighted average number of common
shares outstanding as adjusted 12,564,846
===========
Fully diluted earnings per common share $ .0809**
===========
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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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<PAGE> 2 EXHIBIT 11
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Six Months Ended June 30, 1994*
Primary:
Income:
Net income $ 3,042,000
===========
Shares:
Weighted average number of
common shares outstanding 12,523,000
==========
Primary earnings per common share $ .2429
===========
Assuming full dilution:
Income:
Net income $ 3,042,000
===========
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 41,846
-----------
Weighted average number of common
shares outstanding as adjusted 12,564,846
===========
Fully diluted earnings per common share $ .2421**
===========
- ------------
* 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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