<PAGE>
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, 1995
------------------
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 (215) 864-1200
area code ----------------------
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 October 31, 1995: 11,667,202
---------------- ----------
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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............. 6
PART II. OTHER INFORMATION
- -------- -----------------
ITEM 1. Legal Proceedings......................................... 11
ITEM 6. Exhibits and Reports on Form 8-K.......................... 11
Signature .......................................................... 12
<PAGE>
PART I: FINANCIAL INFORMATION
MARITRANS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000)
SEPT. 30, 1995 DEC. 31, 1994
-------------- -------------
(unaudited)
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 31,199 $ 33,824
Investments held-to-maturity 6,967 8,000
Trade accounts receivable 8,960 11,974
Other accounts receivable 7,775 6,833
Inventories 3,780 3,669
Deferred income tax benefit 1,181 1,181
Prepaid expenses 9,832 4,970
-------- --------
Total current assets 69,694 70,451
Vessels, terminals and equipment 278,581 270,553
Less accumulated depreciation 103,236 91,761
-------- --------
Net vessels, terminals and equipment 175,345 178,792
Other 7,785 8,366
-------- --------
Total assets $252,824 $257,609
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Debt due within one year $ 8,658 $ 7,654
Trade accounts payable 2,390 1,733
Accrued interest 4,361 2,298
Accrued shipyard costs 5,979 5,550
Accrued wages and benefits 5,355 5,928
Other accrued liabilities 2,855 4,343
-------- --------
Total current liabilities 29,598 27,506
Long-term debt 104,761 113,008
Deferred shipyard costs 8,968 8,325
Other liabilities 5,713 5,161
Deferred income taxes 24,575 22,436
Stockholders' equity 79,209 81,173
-------- --------
Total liabilities and stockholders'
equity $252,824 $257,609
======== ========
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, 1995 SEPT. 30, 1994
-------------- --------------
Revenues $ 29,102 $ 30,106
Costs and expenses:
Operation expense 16,132 15,169
Maintenance expense 4,570 4,762
General and administrative 2,242 1,861
Depreciation and amortization 3,905 3,922
-------- --------
Total operating expenses 26,849 25,714
-------- --------
Operating income 2,253 4,392
Interest expense, net (2,352) (2,463)
Other income, net 682 426
-------- --------
Income before income taxes 583 2,355
Income tax provision 217 873
-------- --------
Net income $ 366 $ 1,482
======== ========
Earnings per common share $ 0.03 $ 0.12
Average common shares outstanding 11,917,550 12,526,692
========== ==========
See accompanying notes.
2
<PAGE>
MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
JANUARY 1, TO JANUARY 1, TO
SEPT 30 1995 SEPT 30 1994
------------ ------------
Revenues $ 92,010 $ 92,726
Costs and expenses:
Operation expense 48,686 47,263
Maintenance expense 14,604 15,180
General and administrative 6,411 5,484
Depreciation and amortization 11,895 11,560
-------- --------
Total operating expenses 81,596 79,487
-------- --------
Operating income 10,414 13,239
Interest expense, net (7,211) (7,459)
Other income, net 2,687 1,435
-------- --------
Income before income taxes 5,890 7,215
Income tax provision 2,161 2,691
-------- --------
Net income $ 3,729 $ 4,524
======== ========
Earnings per common share $ 0.30 $ 0.36
Average common shares outstanding 12,309,957 12,526,692
========== ==========
See accompanying notes.
3
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MARITRANS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(unaudited)
($000)
JANUARY 1 TO JANUARY 1 TO
SEPT. 30, 1995 SEPT. 30, 1994
-------------- --------------
Cash flows from operating activities:
Net income $ 3,729 $ 4,524
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 11,895 11,560
Deferred income tax provision 2,161 2,691
Changes in receivables, inventories
and prepaid expenses (2,901) 4,726
Changes in current liabilities
other than debt 1,088 (2,401)
Non-current changes, net 1,538 (840)
(Gain)/loss on sale of equipment (37) 136
-------- --------
Total adjustments to net income 13,744 15,872
-------- --------
Net cash provided by (used in) operating
activities 17,473 20,396
Cash flows from investing activities:
Net change in investments held-to-maturity 1,033 (7,435)
Cash proceeds from sale of equipment 40 2,816
Purchase of vessels, terminals and equipment (8,159) (2,871)
-------- --------
Net cash provided by (used in)
investing activities (7,086) (7,490)
-------- --------
Cash flows from financing activities:
Payment of long-term debt (7,243) (5,734)
Dividends declared and paid (735) --
Purchase of treasury stock (5,034) --
-------- --------
Net cash provided by (used in)
financing activities (13,012) (5,734)
-------- --------
Net increase (decrease)
in cash and cash equivalents (2,625) 7,172
Cash and cash equivalents at beginning of
period 33,824 22,422
-------- --------
Cash and cash equivalents at end of period $ 31,199 $ 29,594
======== ========
See accompanying notes.
4
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MARITRANS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation/Organization
----------------------------------
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.
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, 1994, 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 Company's Form
10-K for the period ended December 31, 1994.
2. Earnings per Common Share
-------------------------
The potential effect of outstanding stock options on earnings per common
share is not dilutive.
3. Income Taxes
------------
The Company's effective tax rate differs from the federal statutory rate
due primarily to state income taxes.
5
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4. Treasury Stock
--------------
Treasury stock of $5,034,000 representing 872,206 shares is included as
a reduction to stockholders' equity at September 30, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources
---------------------------------
For the nine months ended September 30, 1995, funds provided by
operating activities were, and, for the remainder of the year, are
expected to be sufficient to fully meet debt service obligations and
loan agreement restrictions and fund investing activities.
Additionally, the Company paid a dividend of $0.02 per share in each
of the first three quarters of 1995. At the most recent meeting of the
Board of Directors of Maritrans Inc., a dividend of $0.05 per share
was approved for payment on December 13, 1995, to shareholders of
record on November 27, 1995.
On May 10, 1995, the Company announced a stock buy-back plan to
reacquire up to 1.8 million shares of its common stock over the course
of the next two years, depending on market conditions. This amount
represents approximately 15 percent of the 12.5 million shares then
outstanding. Maritrans intends to hold the majority of the shares as
treasury stock, although some shares may be used for acquisition
currency, employee compensation plans, and/or other corporate
purposes. Maritrans expects to finance the purchase of any reacquired
shares from internally generated funds. As of September 30, 1995 the
Company has purchased 872,206 shares at a cost of approximately $5.0
million.
On September 22, 1995, a subsidiary of Maritrans Holdings Inc.
purchased a 530,000-barrel petroleum product terminal located in
Baltimore, Maryland, increasing petroleum terminal capacity to
6
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1.6 million barrels. The subsidiary will offer this terminal for
product storage, both under product throughput agreements and under
product exchange agreements as part of a distribution arrangement
which includes marine transportation.
Management believes capital expenditures in 1995 for improvements to
its currently operating vessels and existing marine terminals will be
approximately $3 million compared to $4 million in 1994. In 1994,
Maritrans also spent $10 million to purchase the MARITRANS 300, an
oceangoing, double-hulled petroleum tank barge, and will have spent
approximately $8 million on modifications to the vessel before placing
it in service in October. 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, 1995 were
$8.2 million, including the purchase of the aforementioned terminal
facility in Baltimore.
On November 13, 1995, the Company announced plans to lead a venture
that would build up to six new double-hulled petroleum tankers over
the next three to four years for use in United States coastwise trade.
Construction is subject to obtaining a satisfactory shipyard contract
and financing. The Company is seeking, through a newly-formed
subsidiary, government-guaranteed financing under Title XI of the
Merchant Marine Act, where the government guarantees loans for up to
87.5 percent of the vessels' construction cost. The Company, and
potentially another investor, would provide equity to the venture for
approximately 12.5 percent of the cost of the vessels. The approximate
cost of each vessel is $45 million.
Liquidity and Capital Indicators
--------------------------------
As of September 30, 1995:
Ratio of current assets to current liabilities 2.35
Working capital (in thousands) $40,096
Ratio of total debt to the sum of total debt
and stockholders' equity .59
Working Capital Position
------------------------
Working capital decreased by $2.8 million from December 31, 1994 to
September 30, 1995. Current assets decreased as a result of decreases
in investments held-to-maturity and in trade accounts receivable which
were offset by an increase in prepaid expenses, resulting from
installment payments to the shipyard that has been preparing the
MARITRANS 300 for service. These payments will be capitalized in the
fourth quarter when the vessel is placed in service. Current
liabilities increased $2.1 million due primarily to currently maturing
7
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debt and an increase in accrued interest. The ratio of current assets
to current liabilities decreased from 2.56 at December 31, 1994 to
2.35 at September 30, 1995.
Debt Obligations and Borrowing Facility
---------------------------------------
At September 30, 1995, the Company had $113.4 million in total
outstanding debt, secured by mortgages on substantially all of the
fixed assets of the subsidiaries of the Company. The current portion
of this debt at September 30, 1995 is $8.7 million. The Company has a
$10 million working capital facility, secured by its receivables and
inventories, which expires June 30, 1996. There were no borrowings
against this facility for the nine months ended September 30, 1995.
RESULTS OF OPERATIONS
---------------------
Three Month Comparison
----------------------
Revenues
--------
Revenues of $29.1 million for the three months ended September 30,
1995, decreased by $1.0 million, or 3.3%, from revenues of $30.1
million for the three months ended September 30, 1994. Barrels of
cargo transported decreased by 7 million barrels, from 60 million for
the three months ended September 30, 1994 to 53 million for the three
months ended September 30, 1995. The decrease in revenue and volume is
the result of refinery maintenance shut-downs and short term changes
in customer delivery patterns and sourcing decisions. Additionally,
vessel productivity was disrupted in the third quarter by the
unusually severe tropical storm season. Revenue from sources other
than marine transportation decreased from 5.7% of total revenue, for
the three months ended September 30, 1994, to 4.6% for the three
months ended September 30, 1995, due to the sale of the contingency
management business during the fourth quarter of 1994.
Results
-------
Operating expenses of $26.8 million for the three months ended
September 30, 1995, increased by $1.1 million, or 4.4%, from
8
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operating expenses of $25.7 million for the three months ended
September 30, 1994. The increase in expenses is principally the result
of higher costs in anticipation of Maritrans' increasing fleet
capacity which included employee training. Additionally, corporate
communication programs were higher during the quarter than are
expected on an ongoing basis.
Other income in the three months ended September 30, 1995 increased
$0.3 million from other income for the three months ended September
30, 1994 due to an increase in interest income resulting from a rise
in interest rates and an increase in funds available for investment.
Net income of $0.4 million for the quarter ended September 30, 1995
decreased by $1.1 million from $1.5 million for the quarter ended
September 30, 1994 as the result of the aforementioned decrease in
revenue and increases in operating expenses.
Nine Month Comparison
---------------------
Revenues
--------
Revenues of $92.0 million for the nine months ended September 30, 1995
decreased $0.7 million, or 0.8% from revenues of $92.7 million for the
nine months ended September 30, 1994. Barrels of cargo transported
decreased by 11 million barrels, 7 million of which are attributable
to the third quarter, as discussed above, from 179 million barrels at
September 30, 1994 to 168 million at September 30, 1995. Revenue held
steady while volume dropped off, for the nine months ended September
30, 1995 compared to the nine months ended September 30, 1994 as the
result of increasing average trip lengths and changes in customer
sourcing decisions and delivery patterns. Revenue from sources other
than marine transportation decreased from 5.9% of total revenue, for
the nine months ended September 30, 1994, to 4.0% for the nine months
ended September 30, 1995, due to the sale of the contingency
management business during the fourth quarter of 1994.
Results
-------
Operating expenses of $81.6 million for the nine months ended
September 30, 1995 increased by $2.1 million, or 2.7% from operating
expenses of $79.5 million for the nine months ended September 30,
9
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1994. This increase is primarily due to increases in expenses
associated with chartering vessels from others and employee
compensation and the aforementioned training and communication
programs.
Other income for the nine months ended September 30, 1995 of $2.7
million increased $1.3 million from $1.4 million for the nine months
ended September 30, 1994 primarily from higher interest rates and an
increase in the average cash balance available for investment.
Net income of $3.7 million for the nine months ended September 30,
1995, decreased $0.8 million from the $4.5 million for the nine months
ended September 30, 1994. The decrease is the result of decreased
revenues and the increase in operating expenses as described above.
While the combination of events that caused volumes to decline in the
third quarter are unlikely to recur in the fourth quarter, management
believes that competitive pressures in its markets will continue to be
intense.
10
<PAGE>
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, 1995.
11
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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: November 13, 1995
---------------------------------------
Gary L. Schaefer
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: November 13, 1995
---------------------------------------
Walter T. Bromfield
Controller
(Principal Accounting Officer)
12
<PAGE>
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
QUARTER ENDED SEPTEMBER 30*
1995 1994
---------- ----------
Primary:
Income:
Net income $ 366,000 $ 1,482,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,917,550 12,526,692
========== ==========
Primary earnings per common share $ .0307 $ .1183
========== ==========
Assuming full dilution:
Income:
Net income $ 366,000 $ 1,482,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,917,550 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 113,660 63,633
---------- ----------
Weighted average number of common
shares outstanding as adjusted 12,031,210 12,590,325
========== ==========
Fully diluted earnings per common share $ .0304** $ .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%.
13
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EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
NINE MONTHS ENDED SEPTEMBER 30*
1995 1994
----------- -----------
Primary:
Income:
Net income $ 3,729,000 $ 4,524,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 12,309,957 12,524,244
========== ==========
Primary earnings per common share $ .3029 $ .3612
========== ==========
Assuming full dilution:
Income:
Net income $ 3,729,000 $ 4,524,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 12,309,957 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 113,660 63,633
---------- ----------
Weighted average number of common
shares outstanding as adjusted 12,423,617 12,587,877
========== ==========
Fully diluted earnings per common share $ .3002** $ .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%.
14
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<ARTICLE> 5
<NAME> MARITRANS INC.
<CIK> 0000810113
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<S> <C>
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<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
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<SECURITIES> 6,967
<RECEIVABLES> 8,960
<ALLOWANCES> 491
<INVENTORY> 3,780
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<PP&E> 278,581
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<TOTAL-ASSETS> 252,824
<CURRENT-LIABILITIES> 29,598
<BONDS> 104,761
<COMMON> 125
0
0
<OTHER-SE> 79,083
<TOTAL-LIABILITY-AND-EQUITY> 252,824
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