<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 March 31, 1996
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 March 31, 1996: 11,685,199
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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
Condensed 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............5
PART II. OTHER INFORMATION
- -------- -----------------
ITEM 1. Legal Proceedings........................................9
ITEM 4. Submission of Matters to a Vote of Security Holders......9
ITEM 6. Exhibits and Reports on Form 8-K.........................9
Signature ........................................................10
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PART I: FINANCIAL INFORMATION
MARITRANS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000)
<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
(unaudited)
ASSETS
- ------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 38,772 $ 31,033
Investments held-to-maturity 8,797 7,544
Trade accounts receivable 10,551 12,722
Other accounts receivable 2,743 5,063
Inventories 3,941 4,586
Deferred income tax benefit 1,203 1,203
Prepaid expenses 2,773 3,909
------- -------
Total current assets 68,780 66,060
Vessels, terminals and equipment 285,676 284,161
Less accumulated depreciation 110,189 106,169
------- -------
Net vessels, terminals and equipment 175,487 177,992
Other 7,729 7,909
------- -------
Total assets $251,996 $251,961
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Debt due within one year $ 8,637 $ 8,671
Trade accounts payable 1,278 2,614
Accrued interest 4,429 2,249
Accrued shipyard costs 5,882 5,134
Accrued wages and benefits 4,619 5,800
Other accrued liabilities 4,201 5,458
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Total current liabilities 29,046 29,926
Long-term debt 103,957 104,337
Deferred shipyard costs 8,824 7,701
Other liabilities 5,557 5,365
Deferred income taxes 24,594 24,757
Stockholders' equity 80,018 79,875
------- -------
Total liabilities and stockholders'
equity $251,996 $251,961
======= =======
</TABLE>
See accompanying notes.
1
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except share amounts)
<TABLE>
<CAPTION>
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Revenues $ 31,586 $ 32,783
Costs and expenses:
Operation expense 16,848 16,065
Maintenance expense 5,119 5,039
General and administrative 2,385 2,101
Depreciation and amortization 4,209 4,150
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Total operating expenses 28,561 27,355
------- -------
Operating income 3,025 5,428
Interest expense, net (2,536) (2,495)
Other income, net 598 653
------- -------
Income before income taxes 1,087 3,586
Provision for income taxes 378 1,284
------- -------
Net income $ 709 $ 2,302
======= =======
Earnings per common share $ 0.06 $ 0.18
Average common shares outstanding 11,682,888 12,529,628
========== ==========
</TABLE>
See accompanying notes.
2
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MARITRANS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(unaudited)
($000)
<TABLE>
<CAPTION>
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 709 $ 2,302
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,209 4,150
Deferred income tax provision (163) 1,284
Changes in receivables, inventories
and prepaid expenses 6,272 2,359
Changes in current liabilities
other than debt (846) (507)
Non-current changes, net 1,417 1,246
(Gain)/loss on sale of equipment - 2
------- -------
Total adjustments to net income 10,889 8,534
------- -------
Net cash provided by (used in) operating
activities 11,598 10,836
Cash flows from investing activities:
Net change in investments held-to-maturity (1,253) -
Purchase of vessels, terminals and equipment (1,608) (2,079)
------- -------
Net cash provided by (used in)
investing activities (2,861) (2,079)
------- --------
Cash flows from financing activities:
Dividends declared and paid (584) (250)
Payment of long-term debt (414) (926)
------- -------
Net cash provided by (used in)
financing activities (998) (1,176)
------- -------
Net increase in cash and cash equivalents 7,739 7,581
Cash and cash equivalents at beginning of
period 31,033 33,824
------- -------
Cash and cash equivalents at end of period $ 38,772 $ 41,405
======= =======
</TABLE>
See accompanying notes.
3
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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"), Maritrans Barge Co. 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, along the Gulf and Atlantic
Coasts, and own and operate petroleum storage facilities on the Atlantic
Coast.
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, 1995, 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those
estimates.
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, 1995.
4
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2. Earnings per 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources
-------------------------------
For the quarter ended March 31, 1996, funds provided by
operating activities were sufficient to fully meet debt service
obligations and loan agreement restrictions, and fund investment
activities. In addition, the Company paid a dividend of $.05 per
share during the quarter.
Management believes that in 1996 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,
required debt repayments, and anticipated common stock
repurchases. Dividends are expected to be made quarterly during
1996.
Barring changes in its current plans, management believes
capital expenditures in 1996 for improvements to its current
fleet of vessels and existing marine terminals will be
approximately $3 million compared to $15 million in 1995.
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. In
1995 cash was used for the purchase of marine vessels, terminals
5
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and equipment including modifications to the MARITRANS 300, the
acquisition of the Baltimore terminal facility, and improvements
to the existing fleet. Total capital expenditures of the Company
through March 31, 1996 were $1.6 million.
During the fourth quarter of 1995, the Company announced plans
to construct up to six new double-hulled petroleum tankers.
During the first quarter of 1996, the delivery dates for such
tankers, the construction of which is subject to receipt of U.S.
Maritime Administration financing guarantees, were extended from
1998 to 2000 to allow the Company to be more flexible in
responding to developing market conditions in the future. This
extension would be shortened by passage of the Organization for
Economic Cooperation and Development (the "OECD") shipyard
subsidy legislation currently being considered by the U.S.
Congress.
Liquidity and Capital Indicators
--------------------------------
As of March 31, 1996:
Ratio of current assets to current liabilities 2.4:1
Working capital (in thousands) $39,734
Ratio of total debt to the sum of total debt
and stockholders' equity .58
Working Capital Position
------------------------
Working capital increased approximately $3.6 million from
December 31, 1995 to March 31, 1996. Current assets increased
due to cash generated by operating activities offset by
reductions in other current assets. Current liabilities
decreased due to a decline in other accrued liabilities and
accrued wages and benefits, although these decreases were
substantially offset by an increase in accrued interest due to
the timing of the required payment. The ratio of current assets
to current liabilities increased from 2.2:1 at December 31, 1995
to 2.4:1 at March 31, 1996.
Debt Obligations and Borrowing Facility
---------------------------------------
At March 31, 1996, the Company had $112.6 million in total
6
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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 March 31, 1996 is $8.6 million. The
Company has a $10 million working capital facility, secured by
its receivables and inventories, which expires June 30, 1996 and
which is expected to be renewed. There were no borrowings
against this facility during the three months ended March 31,
1996.
RESULTS OF OPERATIONS
---------------------
Three Month Comparison
----------------------
Revenues
--------
Revenues of $31.6 million for the three months ended March 31,
1996, decreased by $1.2 million, or 3.7%, from revenues of $32.8
million for the three months ended March 31, 1995. Barrels of
cargo transported of 55.0 million for the three months ended
March 31, 1996, decreased 5.1 million from 60.1 million for the
three months ended March 31, 1995. The decline in revenue and
barrels resulted primarily from refinery shut downs in the
Philadelphia area. Revenue from sources other than marine
transportation were constant at 3.6% of total revenue, for the
three months ended March 31, 1996 and 1995.
Results
-------
Operating expenses of $28.6 million for the three months ended
March 31, 1996, increased by $1.2 million, or 4.4%, from
operating expenses of $27.4 million for the three months ended
March 31, 1995. The increase in operating expenses resulted
primarily from the MARITRANS 300 unit being in service for the
three months ended March 31, 1996 (the MARITRANS 300 was in the
shipyard for modifications during most of 1995). Increased
professional fees, related to consulting for new business
opportunities, also contributed to the rise in operating
expenses.
Other income in the three months ended March 31, 1996 and 1995
is primarily interest income.
7
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Net income of $0.7 million for the three months ended March 31,
1996, is $1.6 million less than the net income of $2.3 million
for the three months ended March 31, 1995. This is due primarily
to the decline in revenues and the increase in operating
expenses.
In early 1996, BP Oil Company completed the sale of its
northeastern U.S. retail outlets, terminal facilities and its
Marcus Hook, Pennsylvania, refinery to Tosco Corporation
("Tosco"). The refinery was turned over to Tosco in a
non-operating state, and plans to reopen the refinery by Tosco
are still uncertain. This development negatively impacts
financial results as it lowers both crude lightering volumes
into, and refined product movements out of, refineries along the
Delaware River. Maritrans continues to take actions to replace
the revenues that had been associated with the refinery's
output, including relocating certain vessels, and continues to
evaluate other steps to mitigate the financial impact. The
refinery's output does not represent the only source of
Maritrans' revenue from BP Oil Shipping Company.
8
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Part II: OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
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, 1996.
ITEM 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
No. 11 - Computation of Earnings Per Common Share.
No. 27 - Financial Data Schedule
(b) Reports on Form 8-K
(1) No reports on Form 8-K were filed during the quarter ended
March 31, 1996.
9
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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/ Thomas C. Deas, Jr. Dated: May 14, 1996
----------------------------------------
Thomas C. Deas Jr.
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: May 14, 1996
---------------------------------------
Walter T. Bromfield
Controller
(Principal Accounting Officer)
10
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EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Quarter Ended*:
<TABLE>
<CAPTION>
Primary: March 31, 1996 March 31,1995
- -------- -------------- -------------
<S> <C> <C>
Income:
Net income $ 709,000 $ 2,302,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,682,888 12,529,628
========== ==========
Primary earnings per common share $ .0607 $ .1837
========== ==========
Assuming full dilution:
Income:
Net income $ 709,000 $ 2,302,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,682,888 12,529,628
Assuming exercise of options reduced by the number of shares
which could have been purchased with the proceeds
from the exercise of such options 105,065 90,534
---------- ----------
Weighted average number of common
shares outstanding as adjusted 11,787,953 12,620,162
========== ==========
Fully diluted earnings per common share $ .0601** $ .1824**
========== ==========
</TABLE>
- ----------
* 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%.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CIK> 0000810113
<NAME> MARITRANS INC.
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 38,772
<SECURITIES> 8,797
<RECEIVABLES> 10,551
<ALLOWANCES> 487
<INVENTORY> 3,941
<CURRENT-ASSETS> 68,780
<PP&E> 285,676
<DEPRECIATION> 110,189
<TOTAL-ASSETS> 251,996
<CURRENT-LIABILITIES> 29,046
<BONDS> 103,957
0
0
<COMMON> 126
<OTHER-SE> 79,892
<TOTAL-LIABILITY-AND-EQUITY> 251,996
<SALES> 0
<TOTAL-REVENUES> 31,586
<CGS> 0
<TOTAL-COSTS> 28,561
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,536
<INCOME-PRETAX> 1,087
<INCOME-TAX> 378
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 709
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
