<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 June 30, 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
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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 July 31, 1996: 11,916,943
------------- ----------
<PAGE>
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 4. Submission of Matters to a Vote of Security Holders......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)
<TABLE>
<CAPTION>
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 28,469 $ 31,033
Investments held-to-maturity 10,992 7,544
Trade accounts receivable 12,313 12,722
Other accounts receivable 3,641 5,063
Inventories 4,169 4,586
Deferred income tax benefit 883 1,203
Prepaid expenses 2,705 3,909
-------- --------
Total current assets 63,172 66,060
Vessels, terminals and equipment 285,485 284,161
Less accumulated depreciation 113,641 106,169
-------- --------
Net vessels, terminals and equipment 171,844 177,992
Other 7,611 7,909
-------- --------
Total assets $242,627 $251,961
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Debt due within one year $ 10,192 $ 8,671
Trade accounts payable 1,480 2,614
Accrued interest 2,097 2,249
Accrued shipyard costs 5,619 5,134
Accrued wages and benefits 6,472 5,800
Other accrued liabilities 3,547 5,458
-------- --------
Total current liabilities 29,407 29,926
Long-term debt 94,985 104,337
Deferred shipyard costs 8,429 7,701
Other liabilities 5,739 5,365
Deferred income taxes 24,386 24,757
Stockholders' equity 79,681 79,875
-------- --------
Total liabilities and stockholders'
equity $242,627 $251,961
======== ========
</TABLE>
See accompanying notes.
1
<PAGE>
MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
<TABLE>
<CAPTION>
APRIL 1 TO APRIL 1 TO
JUNE 30, 1996 JUNE 30, 1995
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<S> <C> <C>
Revenues $ 30,959 $ 30,125
Costs and expenses:
Operation expense 17,164 16,490
Maintenance expense 5,134 4,995
General and administrative 2,524 2,067
Depreciation and amortization 4,136 3,840
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Total operating expenses 28,958 27,392
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Operating income 2,001 2,733
Interest expense, net (2,374) (2,363)
Other income, net 713 1,351
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Income before income taxes 340 1,721
Income tax provision 125 660
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Net income $ 215 $ 1,061
======= =======
Earnings per common share $ 0.02 $ 0.08
Average common shares outstanding 11,796,533 12,489,417
========== ==========
</TABLE>
See accompanying notes.
2
<PAGE>
MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
<TABLE>
<CAPTION>
JANUARY 1 TO JANUARY 1 TO
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
Revenues $ 62,545 $ 62,908
Costs and expenses:
Operation expense 34,012 32,554
Maintenance expense 10,253 10,034
General and administrative 4,909 4,169
Depreciation and amortization 8,345 7,990
------- -------
Total operating expenses 57,519 54,747
------- -------
Operating income 5,026 8,161
Interest expense, net (4,910) (4,859)
Other income, net 1,311 2,005
------- -------
Income before income taxes 1,427 5,307
Income tax provision 503 1,944
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Net income $ 924 $ 3,363
======= =======
Earnings per common share $ 0.08 $ 0.27
Average common shares outstanding 11,711,331 12,509,413
========== ==========
</TABLE>
See accompanying notes.
3
<PAGE>
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, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 924 $ 3,363
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 8,345 7,990
Deferred income tax provision (51) 1,922
Changes in receivables, inventories
and prepaid expenses 3,452 989
Changes in current liabilities
other than debt (2,040) (1,344)
Non-current changes, net 1,550 1,150
(Gain)/loss on sale of equipment 52 (37)
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Total adjustments to net income 11,308 10,670
------- -------
Net cash provided by (used in) operating
activities 12,232 14,033
Cash flows from investing activities:
Acquisition of investments held-to-maturity (3,448) (1,198)
Cash proceeds from sale of equipment 101 40
Purchase of vessels, terminals and equipment (2,156) (4,226)
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Net cash provided by (used in)
investing activities (5,503) (5,384)
------- -------
Cash flows from financing activities:
Payment of long-term debt (7,831) (6,832)
Dividends declared and paid (1,462) (501)
Purchase of treasury stock - (1,051)
------- -------
Net cash provided by (used in)
financing activities (9,293) (8,384)
------- -------
Net increase (decrease)
in cash and cash equivalents (2,564) 265
Cash and cash equivalents at beginning of
period 31,033 33,824
------- -------
Cash and cash equivalents at end of period $ 28,469 $ 34,089
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
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 Company's Form
10-K for the period ended December 31, 1995.
5
<PAGE>
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
For the six months ended June 30, 1996, funds provided by
operating activities were sufficient to fully meet debt service
obligations and loan agreement restrictions and fund dividend
payments and capital expenditures.
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 currently
operating vessels and existing marine terminals will be
approximately $4 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
and equipment including modifications to
6
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the MARITRANS 300, the acquisition of the Baltimore terminal
facility, and improvements to the existing fleet. Total capital
expenditures of the Company through June 30, 1996 were $2.2
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 could be shortened by the Organization for Economic
Cooperation and Development (the "OECD") shipyard subsidy
legislation, different versions of which have been passed by the
U.S. House and Senate. One such version would shorten this
extension.
Liquidity and Capital Indicators
As of June 30, 1996:
Ratio of current assets to current liabilities 2.2:1
Working capital (in thousands) $33,765
Ratio of total debt to the sum of total debt
and stockholders' equity .57
Working Capital Position
Working capital decreased by $2.4 million from December 31, 1995
to June 30, 1996. Current assets decreased as a result of
decreases in other receivables and prepaid expenses resulting
from the timing of collections and payments. Current liabilities
decreased $0.5 million due primarily to a decrease in other
liabilities, partially offset by an increase in debt due within
one year. The ratio of current assets to current liabilities
remained flat at 2.2:1 at December 31, 1995 and at June 30,
1996.
Debt Obligations and Borrowing Facility
At June 30, 1996, the Company had $105.2 million in total
outstanding debt, secured by mortgages on substantially all of
the
7
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fixed assets of the subsidiaries of the Company. The current
portion of this debt at June 30, 1996 is $10.2 million. The
Company has a $10 million working capital facility, secured by
its receivables and inventories. There were no borrowings
against this facility for the six months ended June 30, 1996.
RESULTS OF OPERATIONS
Three Month Comparison
Revenues
Revenues of $31.0 million for the three months ended June 30,
1996, increased by $0.9 million, or 3.0%, from revenues of $30.1
million for the three months ended June 30, 1995. Barrels of
cargo transported decreased by 1 million barrels, from 54
million for the three months ended June 30, 1995 to 53 million
for the three months ended June 30, 1996. The increase in
revenue despite the decline in volume is the result of several
factors, including longer average trip lengths during the three
months ended June 30, 1996 versus the three months ended June
30, 1995. Additionally, the Company was able to pass on selected
increased costs, particularly fuel price increases, under
certain of their contractual agreements. Revenue from sources
other than marine transportation decreased from 3.8% of total
revenue, for the three months ended June 30, 1995 to 3.5% for
the three months ended June 30, 1996.
Results
Operating expenses of $29.0 million for the three months ended
June 30, 1996, increased by $1.6 million, or 5.8%, from
operating expenses of $27.4 million for the three months ended
June 30, 1995. This increase is primarily due to an increase in
fuel price per gallon coupled with an increase in fuel
consumption, as a result of the aforementioned longer average
trip length, partially offset by a decrease in the expenses
associated with chartering vessels from others. Increased
professional fees, related to consulting for new business
opportunities, and an escalation in port charges also
contributed to the rise in operating expenses.
8
<PAGE>
Other income in the three months ended June 30, 1996 decreased
$0.6 million from other income for the three months ended June
30, 1995 due to a decrease in interest income.
Net income of $0.2 million for the quarter ended June 30, 1996
decreased by $0.9 million from $1.1 million for the quarter
ended June 30, 1995 as the result of the aforementioned
increases in operating expenses.
Six Month Comparison
Revenues
Revenues of $62.5 million for the six months ended June 30, 1996
decreased $0.4 million, or 0.6% from revenues of $62.9 million
for the six months ended June 30, 1995. Barrels of cargo
transported decreased by 6 million barrels, from 114 million
barrels at June 30, 1995 to 108 million at June 30, 1996.
Revenue decreased for the six months ended June 30, 1996
compared to the six months ended June 30, 1995 as the result of
changes in customer mix. Volume decreased as the result of
longer average trip lengths. The earlier portion of the six
month period was heavily impacted by refinery shut downs in the
Philadelphia area. The Company has taken certain steps,
including repositioning of capacity, to mitigate the impact on a
year-to-date basis. Revenue from sources other than marine
transportation decreased from 3.7% of total revenue, for the six
months ended June 30, 1995, to 3.5% for the six months ended
June 30, 1996.
Results
Operating expenses of $57.5 million for the six months ended
June 30, 1996 increased by $2.8 million, or 5.1% from operating
expenses of $54.7 million for the six months ended June 30,
1995. This increase is primarily due to the aforementioned
increase in fuel, port charges and expenses associated with
consulting fees for new business opportunities.
Other income for the six months ended June 30, 1996 of $1.3
million
9
<PAGE>
decreased $0.7 million from $2.0 million for the six months
ended June 30, 1995 primarily from a decrease in interest
income.
Net income of $0.9 million for the six months ended June 30,
1996, decreased $2.5 million from the $3.4 million for the six
months ended June 30, 1995. The decrease is the result of
decreased revenues and the increase in operating expenses.
While competitive pressures in the market served by Maritrans
will continue to be intense, management believes that earnings
in the second half of the year will at least equal those of the
first half.
10
<PAGE>
Part II: OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders of the
Registrant on May 8, 1996 to vote upon the election of two
directors, Dr. Craig E. Dorman and Mr. Eric H. Schless, to serve
for three year terms. At the time of the meeting, 11,685,199
shares of Common Stock were issued and outstanding and entitled
to vote on the aforementioned matter. At the meeting, 10,597,671
shares voted in favor of the election of Dr. Dorman, and 34,084
shares abstained (including broker non-votes) and 10,592,931
shares voted in favor of the election of Mr. Schless, and 38,824
shares abstained (including broker non-votes). Dr. Boni and
Messrs. Lichtenstein, Sanborn and Van Dyck will continue to
serve their unexpired terms as directors of the Company.
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, 1996.
11
<PAGE>
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: August 12, 1996
--------------------------------------
Thomas C. Deas, Jr.
Vice President, Chief Financial Officer
(Principal Financial Officer)
By: /s/ Walter T. Bromfield Dated: August 12, 1996
--------------------------------------
Walter T. Bromfield
Controller
(Principal Accounting Officer)
12
<PAGE>
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
QUARTER ENDED June 30*
<TABLE>
<CAPTION>
1996 1995
-------- ------
<S> <C> <C>
Primary:
Income:
Net income $ 215,000 $1,061,000
========= =========
Shares:
Weighted average number of
common shares outstanding 11,796,533 12,489,417
========== ==========
Primary earnings per common share $ .0182 $ .0850
========== ==========
Assuming full dilution:
Income:
Net income $ 215,000 $ 1,061,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,796,533 12,489,417
Assuming exercise of options reduced
by the number of shares which
could have been purchased with the proceeds
from the exercise of such options 132,912 122,248
---------- ----------
Weighted average number of common
shares outstanding as adjusted 11,929,445 12,611,665
========== ==========
Fully diluted earnings per common share $ .0180** $ .0841**
========== ==========
</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%.
13
<PAGE>
EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
SIX MONTHS ENDED June 30*
<TABLE>
<CAPTION>
1996 1995
-------- ---------
<S> <C> <C>
Primary:
Income:
Net income $ 924,000 $3,363,000
========= =========
Shares:
Weighted average number of
common shares outstanding 11,711,331 12,509,413
========== ==========
Primary earnings per common share $ .0789 $ .2688
========== ==========
Assuming full dilution:
Income:
Net income $ 924,000 $ 3,363,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,711,331 12,509,413
Assuming exercise of options reduced
by the number of shares which
could have been purchased with the proceeds
from the exercise of such options 132,912 116,195
---------- ----------
Weighted average number of common
shares outstanding as adjusted 11,844,243 12,625,608
========== ==========
Fully diluted earnings per common share $ .0780** $ .2664**
========= =========
</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%.
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000810113
<NAME> MARITRANS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 28,469
<SECURITIES> 10,992
<RECEIVABLES> 12,313
<ALLOWANCES> 517
<INVENTORY> 4,169
<CURRENT-ASSETS> 63,172
<PP&E> 285,485
<DEPRECIATION> 113,641
<TOTAL-ASSETS> 242,627
<CURRENT-LIABILITIES> 29,407
<BONDS> 94,985
0
0
<COMMON> 127
<OTHER-SE> 79,554
<TOTAL-LIABILITY-AND-EQUITY> 242,627
<SALES> 0
<TOTAL-REVENUES> 62,545
<CGS> 0
<TOTAL-COSTS> 57,519
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,910
<INCOME-PRETAX> 1,427
<INCOME-TAX> 503
<INCOME-CONTINUING> 924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 924
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
