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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 March 31, 1997
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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 __________________
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
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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 _____
Common Stock outstanding as of March 31, 1997: 11,947,448
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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.................................................10
ITEM 6. Exhibits and Reports on Form 8-K..................................10
Signature ..................................................................11
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PART I: FINANCIAL INFORMATION
MARITRANS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000)
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
(unaudited)
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 48,251 $ 33,174
Trade accounts receivable 13,615 16,730
Other accounts receivable 4,885 4,523
Inventories 4,280 5,823
Deferred income tax benefit 3,734 2,234
Prepaid expenses 1,715 3,014
-------- --------
Total current assets 76,480 65,498
Vessels, terminals and equipment 279,181 280,231
Less accumulated depreciation 121,483 117,741
-------- --------
Net vessels, terminals and
equipment 157,698 162,490
Other 6,957 7,233
-------- --------
Total assets $241,135 $235,221
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Debt due within one year $ 15,324 $ 10,213
Trade accounts payable 2,240 3,016
Accrued interest 3,562 1,748
Accrued shipyard costs 6,650 5,774
Accrued wages and benefits 3,449 3,656
Other accrued liabilities 9,964 9,128
-------- --------
Total current liabilities 41,189 33,535
Long-term debt 73,588 79,123
Deferred shipyard costs 9,974 8,661
Other liabilities 5,545 5,364
Deferred income taxes 27,104 25,944
Stockholders' equity 83,735 82,594
-------- --------
Total liabilities and stockholders'
equity $241,135 $235,221
======== ========
See accompanying notes.
1
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MARITRANS INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
($000, except per share amounts)
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
Revenues $31,812 $31,586
Costs and expenses:
Operation expense 16,152 16,848
Maintenance expense 4,365 5,119
General and administrative 2,150 2,385
Depreciation and amortization 3,973 4,209
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Total operating expenses 26,640 28,561
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Operating income 5,172 3,025
Interest expense, net (2,133) (2,536)
Other income, net 11 598
------- -------
Income before income taxes 3,050 1,087
Income tax provision 1,159 378
------- -------
Net income $ 1,891 $ 709
======= =======
Earnings per common share $ 0.16 $ 0.06
Average common shares outstanding 11,921,475 11,682,888
========== ==========
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)
JANUARY 1 TO JANUARY 1 TO
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
Cash flows from operating activities:
Net income $ 1,891 $ 709
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 3,973 4,209
Deferred income tax provision (340) (163)
Stock compensation 103 --
Changes in receivables, inventories
and prepaid expenses 5,595 6,272
Changes in current liabilities
other than debt 2,543 (846)
Non-current changes, net 1,673 1,417
(Gain)/loss on sale of equipment 514 --
-------- --------
Total adjustments to net income 14,061 10,889
-------- --------
Net cash provided by (used in) operating
activities 15,952 11,598
Cash flows from investing activities:
Net change in investments held-to-maturity -- (1,253)
Purchase of vessels, terminals and equipment (1,230) (1,608)
Cash proceeds from sale of equipment 1,632 --
-------- --------
Net cash provided by (used in)
investing activities 402 (2,861)
-------- --------
Cash flows from financing activities:
Proceeds from stock option exercises 45 --
Dividends declared and paid (898) (584)
Payment of long-term debt (424) (414)
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Net cash provided by (used in)
financing activities (1,277) (998)
-------- --------
Net increase in cash and cash equivalents 15,077 7,739
Cash and cash equivalents at beginning of
period 33,174 31,033
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Cash and cash equivalents at end of period $ 48,251 $ 38,772
======== ========
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, 1996, 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, 1996.
4
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2. Earnings per Share
------------------
The potential effect of outstanding stock options on earnings per common
share is not dilutive.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings Per Share", which is required to be adopted
on December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating
primary earnings per share, the dilutive effect of stock options will be
excluded. The impact of Statement 128 is not expected to be material.
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
---------------------------------------------
This report contains, in addition to historical information, statements
by the Company with regard to its expectations as to financial results
and other aspects of its business that involve risks and uncertainties
and may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
include statements regarding the Company's liquidity and capital
resources, expected dividends, and expected capital expenditures. Such
statements are based on management's current expectations and are
subject to a number of uncertainties and risks that could cause actual
results to differ materially from those described in the statements.
Factors that may cause such a difference include, but are not limited
to, the continuation of federal law restricting United States
point-to-point maritime shipping to U.S. vessels (the Jones Act),
domestic oil
5
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consumption - particularly in Florida and the northeastern U.S.,
environmental laws and regulations, oil companies' operating and
sourcing decisions, competition, labor and training costs, liability
insurance costs, and those described under "Item 1. BUSINESS" in the
Company's Annual Report on Form 10-K for the year ended December 31,
1996.
Liquidity and Capital Resources
-------------------------------
For the quarter ended March 31, 1997, 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 $.075 per share during the
quarter.
Management believes that in 1997 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 paid
quarterly during 1997.
On May 7, 1997 the Company authorized a one year extension to its stock
buy-back program which was originally announced in May 1995. Under the
program the Company is authorized to purchase up to a total of 1.8
million shares depending on market conditions, and has acquired
approximately 880,000 shares to date. The Company has financed and
expects that additional share purchases, if made, would be financed
with internally generated funds.
Barring changes in its current plans, management believes capital
expenditures in 1997 for improvements to its current fleet of vessels
and existing marine terminals will be approximately $3 million to $4
million compared to $3 million in 1996. However, the Company will
continue to evaluate potential investments consistent
6
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with its long-term strategic interests, and the potential sources of
funds for those potential investments.
Liquidity and Capital Indicators
--------------------------------
As of March 31, 1997:
Ratio of current assets to current liabilities 1.86:1
Working capital (in thousands) $35,291
Ratio of total debt to the sum of total debt
and stockholders' equity .52
Working Capital Position
------------------------
Working capital increased approximately $3.3 million from December 31,
1996 to March 31, 1997. This increase was due to cash generated by
operating activities, equipment sales, and an increase in the current
portion of deferred income tax benefit, offset by the purchase of
marine vessels and equipment, dividend payments and the repayment of
long-term debt. Current liabilities primarily increased due to an
increase in debt due within one year and accrued interest. The current
ratio of current assets to current liabilities decreased from 1.95:1 at
December 31, 1996 to 1.86:1 at March 31, 1997.
Debt Obligations and Borrowing Facility
---------------------------------------
At March 31, 1997, the Company had $88.9 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
March 31, 1997 is $15.3 million. On April 1, 1997, the Company made a
scheduled repayment of principal of $8.5 million. The Company has a $10
million working capital facility, secured by its receivables and
inventories. There were no borrowings against this facility during the
three months ended March 31, 1997.
7
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RESULTS OF OPERATIONS
---------------------
Three Month Comparison
----------------------
Revenues
--------
Revenues of $31.8 million for the three months ended March 31, 1997,
increased by $0.2 million, or 0.6%, from revenues of $31.6 million for
the three months ended March 31, 1996. Barrels of cargo transported of
56.1 million for the three months ended March 31, 1997, increased 1.1
million from 55.0 million for the three months ended March 31, 1996.
Although owned vessel capacity declined between the comparable periods,
the small increases in barrels transported and in revenue resulted
primarily from fleet redeployments made in response to shifting market
conditions, particularly the closing of a portion of Delaware Valley
refining capacity in the first quarter of 1996. Revenue from sources
other than marine transportation decreased from 3.6% of total revenue,
for the three months ended March 31, 1996 to 2.8% for the three months
ended March 31, 1997.
Results
-------
Operating expenses of $26.6 million for the three months ended March
31, 1997, decreased by $2.0 million, or 7.0%, from operating expenses
of $28.6 million for the three months ended March 31, 1996. The
decrease in operating expenses resulted primarily from reductions in
owned capacity which Maritrans considered excess to its long-term
business needs due to its sizes and operating characteristics, thereby
reducing all major categories of operating expenses.
For the three months ended March 31, 1997, other income, which is
primarily interest income, was almost entirely offset by a loss on the
sale of the Company's Baltimore terminal. March 31, 1996, other income
of $0.6 million is primarily interest income.
Net income of $1.9 million for the three months ended March 31, 1997,
is $1.2 million greater than the net income of $0.7 million
8
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for the three months ended March 31, 1996. This is due primarily to the
decline in operating expenses.
9
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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
March 31, 1997.
10
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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/ Walter T. Bromfield
------------------------------------- Dated: May 14, 1997
Walter T. Bromfield
Controller
(Principal Financial and Accounting Officer)
11
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EXHIBIT 11
MARITRANS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Quarter Ended*:
<TABLE>
<CAPTION>
Primary: March 31, 1997 March 31,1996
- -------- -------------- -------------
<S> <C> <C>
Income:
Net income $ 1,891,311 $ 709,000
========== ==========
Shares:
Weighted average number of
common shares outstanding 11,921,475 11,682,888
========== ==========
Primary earnings per common share $ .1586 $ .0607
========== ==========
Assuming full dilution:
Income:
Net income $ 1,891,311 $ 709,000
========== ==========
Shares:
Weighted average number of
` common shares outstanding 11,921,475 11,682,888
Assuming exercise of options reduced
by the number of shares which
could have been purchased with the proceeds
from the exercise of such options 126,616 105,065
---------- ----------
Weighted average number of common
shares outstanding as adjusted 12,048,091 11,787,953
========== ==========
Fully diluted earnings per common share $ .1570** $ .0601**
========== ==========
</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%.
12
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<ARTICLE> 5
<CIK> 0000810113
<NAME> MARITRANS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 48,251
<SECURITIES> 0
<RECEIVABLES> 13,615
<ALLOWANCES> 904
<INVENTORY> 4,280
<CURRENT-ASSETS> 76,480
<PP&E> 279,181
<DEPRECIATION> 121,483
<TOTAL-ASSETS> 241,135
<CURRENT-LIABILITIES> 41,189
<BONDS> 73,588
0
0
<COMMON> 129
<OTHER-SE> 83,606
<TOTAL-LIABILITY-AND-EQUITY> 241,135
<SALES> 0
<TOTAL-REVENUES> 31,812
<CGS> 0
<TOTAL-COSTS> 26,640
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,133
<INCOME-PRETAX> 3,050
<INCOME-TAX> 1,159
<INCOME-CONTINUING> 1,891
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,891
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
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