<PAGE> 1
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 September 30, 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
- - - --------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (215) 864-1200
--------------
Not Applicable
----------------------------------------------------
(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
---- -----
Common Stock outstanding as of September 30, 1994: 12,526,692
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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
- - - ------- -----------------
ITEM 1. Legal Proceedings...........................................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)
SEPT. 30, DEC. 31,
1994 1993
------- -------
(unaudited)
ASSETS
- - - ------
Current assets:
Cash and cash equivalents ........................ $ 29,594 $ 22,422
Investments held-to-maturity ..................... 7,435 --
Trade accounts receivable ........................ 11,519 14,094
Inventories ...................................... 3,548 4,968
Prepaid expenses ................................. 6,292 6,061
Other current assets ............................. 12,182 13,144
-------- --------
Total current assets ........................ 70,570 60,689
Vessels, terminals and equipment ..................... 259,889 262,176
Less accumulated depreciation .................... 88,022 78,966
-------- --------
Net vessels, terminals and equipment ........ 171,867 183,210
Other ................................................ 8,293 9,139
-------- --------
Total assets ................................ $250,730 $253,038
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - - ------------------------------------
Current liabilities:
Debt due within one year ......................... $ 6,033 $ 6,311
Trade accounts payable ........................... 1,775 3,492
Accrued interest ................................. 4,596 2,382
Accrued shipyard costs ........................... 5,535 6,562
Accrued wages and benefits ....................... 5,428 5,649
Other accrued liabilities ........................ 5,304 6,954
-------- --------
Total current liabilities ................... 28,671 31,350
Long-term debt ....................................... 105,100 110,556
Deferred shipyard costs and other .................... 13,810 15,196
Deferred income taxes ................................ 23,733 21,062
Stockholders' equity ................................. 79,416 74,874
-------- --------
Total liabilities and stockholders'
equity ...................................... $250,730 $253,038
======== ========
See accompanying notes.
1
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
JULY 1 TO JULY 1 TO
SEPT. 30, 1994 SEPT. 30, 1993
-------------- --------------
Revenues ....................................... $ 30,106 $ 31,044
Costs and expenses:
Operation expense .......................... 15,169 17,643
Maintenance expense ........................ 4,762 5,201
General and administrative ................. 1,861 2,754
Depreciation and amortization .............. 3,922 4,224
-------- --------
Total operating expenses ................... 25,714 29,822
-------- --------
Operating income ............................... 4,392 1,222
Interest expense, net .......................... (2,463) (2,563)
Other income, net .............................. 426 1,379
-------- --------
Income before income taxes ..................... 2,355 38
Income tax provision ........................... 873 14
-------- --------
Net income ..................................... $ 1,482 $ 24
======== ========
Earnings per common share ...................... $ 0.12 $ 0.00
See accompanying notes.
2
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
JANUARY 1 TO JANUARY 1 TO
SEPT. 30, 1994 SEPT. 30, 1993
-------------- --------------
Revenues ...................................... $ 92,726 $ 96,864
Costs and expenses:
Operation expense ......................... 47,263 54,876
Maintenance expense ....................... 15,180 15,377
General and administrative ................ 5,484 8,092
Depreciation and amortization ............. 11,560 12,003
------ ------
Total operating expenses .................. 79,487 90,348
------ ------
Operating income .............................. 13,239 6,516
Interest expense, net ......................... (7,459) (7,818)
Other income, net ............................. 1,435 6,857
------ ------
Income before income taxes .................... 7,215 5,555
Provision for income taxes:
Provision for taxes ....................... 2,691 547
Deferred taxes - resulting from Conversion -- 16,568
------ ------
Net income (loss) ............................. $ 4,524 $(11,560)
====== ======
Pro forma loss per share ...................... $ n/a $(0.92)
Earnings per common share ..................... $ 0.36 $ n/a
See accompanying notes.
3
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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
SEPT. 30, 1994 SEPT. 30, 1993
-------------- --------------
Cash flows from operating activities:
Net income (loss) .............................. $ 4,524 $(11,560)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization ............. 11,560 12,003
Deferred income tax provision ............. 2,691 17,512
Changes in current assets other
than cash ................................ 4,726 (7,927)
Changes in current liabilities
other than debt .......................... (2,401) (1,490)
Non-current changes, net .................. (840) (898)
(Gain)/loss on sale of equipment .......... 136 (6,115)
--------- ---------
Total adjustments to net income ................ 15,872 13,085
--------- ---------
Net cash provided by (used in) operating
activities .................................... 20,396 1,525
Cash flows from investing activities:
Aquisition of investments held-to-maturity ..... (7,435) --
Cash proceeds from sale of equipment ........... 2,816 17,627
Purchase of vessels, terminals and equipment ... (2,871) (14,371)
--------- ---------
Net cash provided by (used in)
investing activities ..................... (7,490) 3,256
--------- ---------
Cash flows from financing activities:
Payment of long-term debt ...................... (5,734) (5,455)
--------- ---------
Net cash provided by (used in)
financing activities ..................... (5,734) (5,455)
--------- ---------
Net increase (decrease)
in cash and cash equivalents ...................... 7,172 (674)
Cash and cash equivalents at beginning of
period ............................................ 22,422 23,174
--------- ---------
Cash and cash equivalents at end of period ......... $ 29,594 $ 22,500
========= =========
See accompanying notes.
4
<PAGE> 7
MARITRANS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation/Organization
At September 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
5
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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
Earnings per common share for the quarter ended September 30, 1994 is based on
the average number of common shares outstanding of 12,526,692. For the nine
months ended September 30, 1994, the average number of common shares outstanding
is 12,524,244. For the quarter ended September 30, 1993 earnings per common
share 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 nine months ended September 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.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FNANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
For the nine months ended September 30, 1994, funds provided by
operating activities 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. On November
8, 1994 the Company declared a dividend of $.02 per share that will be
payable on December 12, 1994, to shareholders of record on November 28,
1994. Management expects the dividend to continue quarterly.
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 September 30, 1994 were $2.9
million.
7
<PAGE> 10
Liquidity and Capital Indicators
As of September 30, 1994:
Ratio of current assets to current liabilities 2.46
Working capital (in thousands) $41,899
Ratio of total debt to the sum of total debt
and stockholders' equity .58
Working Capital Position
Working capital increased by $12.6 million from December 31, 1993 to
September 30, 1994. Current assets increased as a result of a significant
increase in cash and marketable securities balances resulting from
operating activities and the aforementioned decline in capital
expenditures. Decreases in trade accounts receivables and inventories
have also contributed to the Company's cash position. Current liabilities
decreased due to declines in trade accounts payable, accrued shipyard
costs and other accrued liabilities partially offset by the increase in
accrued interest, which is the result of the timing of payments. The
ratio of current assets to current liabilities increased from 1.94 at
December 31, 1993 to 2.46 at September 30, 1994.
Debt Obligations and Borrowing Facility
At September 30, 1994, the Company had $111.1 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 September 30, 1994 is $6.0 million.
The Company has a $10 million working capital facility, secured by
its receivables and inventories, which expires June 30, 1995. At
September 30, 1994 there were no borrowings against this facility.
RESULTS OF OPERATIONS
Three Month Comparison
Revenues
Revenues of $30.1 million for the three months ended September 30, 1994,
decreased by $0.9 million, or 3.0%, from revenues of $31.0 million for
the three months ended September 30, 1993. Barrels of
8
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cargo transported increased by 4 million barrels, from 56 million to 60
million, respectively. The decline in revenue despite the increase in
volume is the result of the generally softer market conditions relative
to the marine transportation of refined petroleum products. Revenue from
sources other than marine transportation, which includes terminalling
operations, contingency management activities and other services supplied
to third-party vessel owners, remained constant at 5.7% of total revenue
for the three months ended September 30, 1994 and 1993.
Results
Operating expenses of $25.7 million for the three months ended September
30, 1994 decreased by $4.1 million, or 13.7%, from operating expenses of
$29.8 million for the three months ended September 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 September 30, 1993 includes a $1.2
million gain on the sale/liquidation of equipment.
Net income for the quarter ended September 30, 1994 increased by $1.5
million from $24 thousand for the quarter ended September 30, 1993 to
$1.5 million as the result of significantly lower operating costs.
Nine Month Comparison
Revenues
Revenues of $92.7 million for the nine months ended September 30, 1994
decreased $4.2 million, or 4.3% from revenues of $96.9 million for the
nine months ended September 30, 1993. Barrels of cargo transported
decreased by 4 million barrels, from 183 million barrels at September 30,
1993 to 179 million at September 30, 1994.
9
<PAGE> 12
Continued price competition and relatively softer market conditions have
been the most significant factors in the decline in revenue for the nine
months ended September 30, 1994. Revenue from sources other than marine
transportation increased from 4.9% of total revenue for the nine months
ended September 30, 1993 to 5.9% for the nine months ended September 30,
1994, due to additional terminalling operations, contingency management
activities and other services supplied to third-party vessel owners.
Results
Operating expenses of $79.5 million for the nine months ended September
30, 1994 decreased by $10.8 million, or 12.0% from operating expense of
$90.3 million for the nine months ended September 30, 1993. This decrease
is primarily due 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. The aforementioned streamlining measures are
also a significant factor in the decrease in operating expenses.
Other income for the nine months ended September 30, 1993 includes a $6.1
million gain on the sale/liquidation of equipment, including five of the
Company's smaller barges and three smaller tugs that were excess to its
expected future business needs. Additionally, the Company received
insurance proceeds for the constructive total loss of its barge involved
in a collision off the coast of Florida.
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 $4.5 million for the nine months ended September 30, 1994,
is $16.1 million higher than the net loss of $11.6 million for the nine
months ended September 30, 1993. The loss in 1993 was the result of the
previously noted provision for deferred income taxes.
10
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Income before income taxes for the periods increased to $7.2 million from
$5.6 million in the comparable period last year. The increase is due to
the reduction in operating costs, as noted above.
Management expects earnings in the fourth quarter to continue at levels
near third quarter results. Improved earnings may be realized, however,
as new distribution patterns made necessary by reformulated gasoline
requirements may increase demand, in the near term, for marine
transportation of petroleum products.
11
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Part II: OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
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
September 30, 1994.
12
<PAGE> 15
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: November 14, 1994
-------------------------------------
Gary L. Schaefer
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: November 14, 1994
-------------------------------------
Walter T. Bromfield
Controller
(Principal Accounting Officer)
13
<PAGE> 1
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Quarter Ended September 30, 1994*
Primary:
Income:
Net income ....................................... $1,482,000
==========
Shares:
Weighted average number of
common shares outstanding ....................... 12,526,692
==========
Primary earnings per common share ......................... $ .1183
==========
Assuming full dilution:
Income:
Net income ....................................... $ 1,482,000
==========
Shares:
Weighted average number of
common shares outstanding ...................... 12,526,692
Assuming exercise of options reduced by the
number of shares which could have been purchased
with the proceeds from the exercise of
such options .................................... 63,633
----------
Weighted average number of common
shares outstanding as adjusted ................. 12,590,325
==========
Fully diluted earnings per common share .................. $ .1177**
=========
- - - ----------
* 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%.
14
<PAGE> 2
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Nine Months Ended September 30, 1994*
Primary:
Income:
Net income ..................................... $4,524,000
==========
Shares:
Weighted average number of
common shares outstanding .................... 12,524,244
==========
Primary earnings per common share ....................... $ .3612
==========
Assuming full dilution:
Income:
Net income .................................... $ 4,524,000
==========
Shares:
Weighted average number of
common shares outstanding ................... 12,524,244
Assuming exercise of options reduced by the
number of shares which could have been
purchased with the proceeds from the exercise
of such options .............................. 63,633
----------
Weighted average number of common
shares outstanding as adjusted .............. 12,587,877
==========
Fully diluted earnings per common share ................ $ .3594**
==========
- - - ---------
* 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%.
15
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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