Delaware | 13-2637623 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A Common Stock (par value $0.01 per share) | OSG | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
99.1 |
OVERSEAS SHIPHOLDING GROUP, INC. | ||
(Registrant) | ||
Date: May 8, 2020 | By | /s/ Richard Trueblood |
Name: Richard Trueblood Title: Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 |
• | Net income for the first quarter 2020 was $25.1 million, or $0.28 per diluted share, compared with net income of $3.2 million, or $0.04 per diluted share, for the first quarter 2019. The increase was driven primarily by the gain on termination of a pre-existing arrangement related to the acquisition of ATC recorded during the first quarter of 2020 and an increase in revenues. |
• | Shipping revenues for the first quarter 2020 were $100.9 million, up 15.0% compared with the first quarter 2019. |
• | Time charter equivalent (TCE) revenues(A), a non-GAAP measure, for the first quarter 2020 were $97.1 million, up 17.3% compared with the first quarter 2019. |
• | First quarter 2020 Adjusted EBITDA(B), a non-GAAP measure, was $52.8 million, up 123.7% from $23.6 million in the first quarter 2019. |
• | Total cash(C) was $101.5 million as of March 31, 2020. |
• | On March 12, 2020, subsidiaries of the Company completed the purchase of three U.S.-flagged crude oil carrier vessels, the Alaskan Explorer, Alaskan Legend and Alaskan Navigator, and have entered into a bareboat charter with BP for a fourth vessel, the Alaskan Frontier, currently in layup. In connection with these transactions, OSG also completed the acquisition of Alaska Tanker Company LLC (ATC), making ATC a wholly owned subsidiary of OSG. |
• | On March 26, 2020, one of the Company's subsidiaries, OSG 204 LLC, closed on a $33.2 million 5-year term loan with Wintrust Commercial Finance and other syndicate lenders to finance a new 204,000 barrel U.S. Flag oil and chemical ATB barge, which is scheduled to be delivered in May 2020. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(unaudited) | (unaudited) | ||||||
Shipping Revenues: | |||||||
Time and bareboat charter revenues | $ | 78,150 | $ | 63,120 | |||
Voyage charter revenues | 22,709 | 24,617 | |||||
100,859 | 87,737 | ||||||
Operating Expenses: | |||||||
Voyage expenses | 3,786 | 4,984 | |||||
Vessel expenses | 35,769 | 32,446 | |||||
Charter hire expenses | 22,460 | 22,298 | |||||
Depreciation and amortization | 14,019 | 12,478 | |||||
General and administrative | 6,173 | 5,674 | |||||
Loss on disposal of vessels and other property, including impairments, net | 296 | 117 | |||||
Total operating expenses | 82,503 | 77,997 | |||||
Income from vessel operations | 18,356 | 9,740 | |||||
Gain on termination of pre-existing arrangement | 19,172 | — | |||||
Operating income | 37,528 | 9,740 | |||||
Other income, net | 31 | 355 | |||||
Income before interest expense and income taxes | 37,559 | 10,095 | |||||
Interest expense | (6,074 | ) | (6,506 | ) | |||
Income before income taxes | 31,485 | 3,589 | |||||
Income tax expense | (6,360 | ) | (392 | ) | |||
Net income | $ | 25,125 | $ | 3,197 | |||
Weighted Average Number of Common Shares Outstanding: | |||||||
Basic - Class A | 89,422,311 | 89,004,947 | |||||
Diluted - Class A | 90,388,988 | 89,421,143 | |||||
Per Share Amounts: | |||||||
Basic and diluted net income - Class A | $ | 0.28 | $ | 0.04 |
March 31, 2020 | December 31, 2019 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 81,359 | $ | 41,503 | |||
Restricted cash | 20,060 | 60 | |||||
Voyage receivables, including unbilled of $6,586 and $5,611, net of reserve for doubtful accounts | 7,907 | 9,247 | |||||
Income tax receivable | 5,776 | 1,192 | |||||
Other receivables | 6,108 | 3,037 | |||||
Inventories, prepaid expenses and other current assets | 3,473 | 2,470 | |||||
Total Current Assets | 124,683 | 57,509 | |||||
Vessels and other property, less accumulated depreciation | 823,030 | 737,212 | |||||
Deferred drydock expenditures, net | 23,882 | 23,734 | |||||
Total Vessels, Other Property and Deferred Drydock | 846,912 | 760,946 | |||||
Restricted cash - non current | 88 | 114 | |||||
Investments in and advances to affiliated companies | — | 3,599 | |||||
Intangible assets, less accumulated amortization | 30,667 | 31,817 | |||||
Operating lease right-of-use assets | 270,388 | 286,469 | |||||
Other assets | 18,017 | 35,013 | |||||
Total Assets | $ | 1,290,755 | $ | 1,175,467 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable, accrued expenses and other current liabilities | $ | 45,308 | $ | 35,876 | |||
Current portion of operating lease liabilities | 90,410 | 90,145 | |||||
Current portion of finance lease liabilities | 4,001 | 4,011 | |||||
Current installments of long-term debt | 55,745 | 31,512 | |||||
Total Current Liabilities | 195,464 | 161,544 | |||||
Reserve for uncertain tax positions | 878 | 864 | |||||
Noncurrent operating lease liabilities | 203,000 | 219,501 | |||||
Noncurrent finance lease liabilities | 23,027 | 23,548 | |||||
Long-term debt | 385,856 | 336,535 | |||||
Deferred income taxes, net | 79,066 | 72,833 | |||||
Other liabilities | 36,497 | 19,097 | |||||
Total Liabilities | 923,788 | 833,922 | |||||
Equity: | |||||||
Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 85,845,920 and 85,713,610 shares issued and outstanding) | 858 | 857 | |||||
Paid-in additional capital | 590,674 | 590,436 | |||||
Accumulated deficit | (218,214 | ) | (243,339 | ) | |||
373,318 | 347,954 | ||||||
Accumulated other comprehensive loss | (6,351 | ) | (6,409 | ) | |||
Total Equity | 366,967 | 341,545 | |||||
Total Liabilities and Equity | $ | 1,290,755 | $ | 1,175,467 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(unaudited) | (unaudited) | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 25,125 | $ | 3,197 | |||
Items included in net income not affecting cash flows: | |||||||
Depreciation and amortization | 14,019 | 12,478 | |||||
Gain on termination of pre-existing arrangement | (19,172 | ) | — | ||||
Loss on disposal of vessels and other property, including impairments, net | 296 | 117 | |||||
Amortization of debt discount and other deferred financing costs | 533 | 510 | |||||
Compensation relating to restricted stock awards and stock option grants | 438 | 309 | |||||
Deferred income tax benefit | 2,135 | 111 | |||||
Interest on finance lease liabilities | 506 | — | |||||
Non-cash operating lease expense | 22,811 | 22,176 | |||||
Other - net | — | 231 | |||||
Distributed earnings of affiliated companies | 3,562 | 3,548 | |||||
Payments for drydocking | (3,327 | ) | (1,342 | ) | |||
Operating lease liabilities | (22,969 | ) | (22,407 | ) | |||
Changes in operating assets and liabilities, net | 2,162 | (7,809 | ) | ||||
Net cash provided by operating activities | 26,119 | 11,119 | |||||
Cash Flows from Investing Activities: | |||||||
Acquisition, net of cash acquired | (16,973 | ) | — | ||||
Expenditures for vessels and vessel improvements | (20,871 | ) | (10,910 | ) | |||
Expenditures for other property | (232 | ) | (588 | ) | |||
Net cash used in investing activities | (38,076 | ) | (11,498 | ) | |||
Cash Flows from Financing Activities: | |||||||
Payments on debt | (7,865 | ) | (4,167 | ) | |||
Tax withholding on share-based awards | (197 | ) | (294 | ) | |||
Issuance of debt, net of issuance and deferred financing costs | 80,886 | — | |||||
Payments on principal portion of finance lease liabilities | (1,037 | ) | — | ||||
Net cash provided by/(used in) financing activities | 71,787 | (4,461 | ) | ||||
Net increase/(decrease) in cash, cash equivalents and restricted cash | 59,830 | (4,840 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 41,677 | 80,641 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 101,507 | $ | 75,801 |
2020 | 2019 | ||||||||||||||
Three Months Ended March 31, | Spot Earnings | Fixed Earnings | Spot Earnings | Fixed Earnings | |||||||||||
Jones Act Handysize Product Carriers: | |||||||||||||||
Average rate | $ | 61,951 | $ | 60,260 | $ | 27,940 | $ | 56,863 | |||||||
Revenue days | 92 | 1,052 | 90 | 982 | |||||||||||
Non-Jones Act Handysize Product Carriers: | |||||||||||||||
Average rate | $ | 27,727 | $ | 16,788 | $ | 25,898 | $ | 12,097 | |||||||
Revenue days | 154 | 182 | 113 | 67 | |||||||||||
ATBs: | |||||||||||||||
Average rate | $ | 28,332 | $ | 24,015 | $ | 20,992 | $ | 21,557 | |||||||
Revenue days | 93 | 89 | 86 | 266 | |||||||||||
Lightering: | |||||||||||||||
Average rate | $ | 78,258 | $ | 61,012 | $ | 72,905 | $ | — | |||||||
Revenue days | 91 | 87 | 180 | — | |||||||||||
Alaska (a): | |||||||||||||||
Average rate | $ | — | $ | 59,015 | $ | — | $ | — | |||||||
Revenue days | — | 58 | — | — |
Vessels Owned | Vessels Chartered-In | Total at March 31, 2020 | |||||||||
Vessel Type | Number | Number | Total Vessels | Total dwt (3) | |||||||
Handysize Product Carriers (1) | 6 | 11 | 17 | 810,825 | |||||||
Crude Oil Tankers (2) | 3 | 1 | 4 | 772,194 | |||||||
Refined Product ATBs | 2 | — | 2 | 59,490 | |||||||
Lightering ATBs | 2 | — | 2 | 91,112 | |||||||
Total Operating Fleet | 13 | 12 | 25 | 1,733,621 |
(1) | Includes two owned shuttle tankers, 11 chartered-in tankers, two non-Jones Act MR tankers that participate in the U.S. Maritime Security Program, all of which are U.S. flagged, as well as two owned Marshall Island flagged non-Jones Act MR tankers trading in international markets. |
(2) | Includes three crude oil tankers doing business in Alaska and one crude oil tanker bareboat chartered-in and in layup. |
(3) | Total dwt is defined as aggregate deadweight tons for all vessels of that type. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Time charter equivalent revenues | $ | 97,073 | $ | 82,753 | |||
Add: Voyage expenses | 3,786 | 4,984 | |||||
Shipping revenues | $ | 100,859 | $ | 87,737 |
Three Months Ended March 31, | |||||||
($ in thousands) | 2020 | 2019 | |||||
Niche Market Activities | $ | 21,706 | $ | 22,602 | |||
Jones Act Handysize Tankers | 12,384 | 2,439 | |||||
ATBs | 2,805 | 2,968 | |||||
Alaska Crude Oil Tankers | 1,949 | — | |||||
Vessel Operating Contribution | 38,844 | 28,009 | |||||
Depreciation and amortization | 14,019 | 12,478 | |||||
General and administrative | 6,173 | 5,674 | |||||
Loss on disposal of vessels and other property, including impairments, net | 296 | 117 | |||||
Income from vessel operations | $ | 18,356 | $ | 9,740 |
Three Months Ended March 31, | |||||||
($ in thousands) | 2020 | 2019 | |||||
Net income | $ | 25,125 | $ | 3,197 | |||
Income tax expense | 6,360 | 392 | |||||
Interest expense | 6,074 | 6,506 | |||||
Depreciation and amortization | 14,019 | 12,478 | |||||
EBITDA | 51,578 | 22,573 | |||||
Amortization classified in charter hire expenses | 143 | 231 | |||||
Interest expense classified in charter hire expenses | 379 | 404 | |||||
Loss on disposal of vessels and other property, including impairments, net | 296 | 117 | |||||
Non-cash stock based compensation expense | 438 | 309 | |||||
Adjusted EBITDA | $ | 52,834 | $ | 23,634 |
($ in thousands) | March 31, 2020 | December 31, 2019 | |||||
Cash and cash equivalents | $ | 81,359 | $ | 41,503 | |||
Restricted cash - current | 20,060 | 60 | |||||
Restricted cash – non-current | 88 | 114 | |||||
Total Cash | $ | 101,507 | $ | 41,677 |