[TEST]
[DOCUMENT-COUNT] 2
[NOTIFY] 72741,717
[SROS] NYSE
[PERIOD] 03/31/95
[DESCRIPTION] FIRST QUARTER 1995 FORM 10-Q
<PAGE 1>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1995
__ 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 2-63322
INTERNATIONAL SHIPHOLDING CORPORATION
(Exact name of registrant as
specified in its charter)
Delaware 36-2989662
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification Number)
650 Poydras Street New Orleans, Louisiana 70130
(Address of principal executive offices) (Zip Code)
(504) 529-5461
(Registrant's telephone number, including area code)
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 filing for the past 90 days.
YES X NO____
Indicate the number of shares outstanding of each
of the issuer's classes of common stock, as of the
latest practicable date.
Common Stock $1 Par Value 5,346,611 shares
(March 31, 1995)
<PAGE 2>
PART I-FINANCIAL INFORMATION
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
March 31, December 31,
1995 1994
ASSETS --------- ------------
Current Assets:
Cash and Cash Equivalents $ 34,660 $ 29,611
Marketable Securities 7,222 7,096
Accounts Receivable, Net 46,917 46,844
Net Investment in Direct Financing 2,168 2,186
Leases
Other Current Assets 2,922 3,847
Material and Supplies Inventory, 9,310 8,954
At Cost -------- -----------
Total Current Assets 103,199 98,538
-------- -----------
Investments In and Advances to
Unconsolidated Entities 33,172 33,160
Net Investment in Direct
Financing Leases 26,055 26,588
Vessels, Property and Other Equipment,
At Cost:
Vessels and Barges 485,427 484,354
Other Marine Equipment 3,826 3,999
Terminal Facilities 18,159 18,116
Land 2,317 2,317
Furniture and Equipment 15,091 14,071
-------- -------
524,820 522,857
Less - Accumulated Depreciation (220,652) (214,395)
-------- -------
304,168 308,462
-------- -------
Other Assets:
Deferred Charges in Process of
Amortization 30,155 30,613
Acquired Contract Costs,
Net of Accumulated
Amortization 23,572 24,185
Due from Related Parties 6,233 6,174
Other 20,308 19,371
-------- --------
80,268 80,343
-------- --------
$546,862 $547,091
======== ========
<FN>
The accompanying notes are an integral part of these statements.
<PAGE 3>
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
March 31, December 31,
1995 1994
--------- ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current Maturities of Long-Term $ 27,993 $ 26,755
Debt
Current Maturities of Capital 1,469 1,329
Lease Obligations
Accounts Payable and Accrued 48,643 53,061
Liabilities
Federal Income Tax Payable 1,797 260
Current Deferred Income Tax 1,378 314
Liability
--------- ---------
Total Current Liabilities 81,280 81,719
Billings in Excess of Income Earned
and Expenses Incurred 7,494 4,471
Long-Term Capital Lease Obligations,
Less Current Maturities 19,873 21,092
Long-Term Debt, Less Current Maturities 229,719 230,852
Reserves and Deferred Credits:
Deferred Income Taxes 37,580 39,414
Claims and Other 22,705 23,227
--------- ---------
60,285 62,641
Stockholders' Investment:
Common Stock 5,405 5,405
Additional Paid-in Capital 54,450 54,450
Retained Earnings 89,575 87,757
Less - Treasury Stock (1,133) (1,133)
Unrealized Holding Loss on
Marketable Securities (86) (163)
---------- ---------
148,211 146,316
$ 546,862 $ 547,091
========== ==========
<FN>
The accompanying notes are an integral part of these statements.
<PAGE 4>
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
1995 1994
--------- -------
Revenues $ 77,908 $ 78,443
Operating Differential Subsidy 5,394 4,918
--------- ------
83,302 83,361
Operating Expenses:
Voyage Expenses 62,265 62,188
Vessel and Barge Depreciation 6,067 6,107
--------- ------
Gross Voyage Profit 14,970 15,066
Administrative and General Expenses 6,462 6,620
Gain on Sale of Assets 1 7
--------- ------
Operating Income 8,509 8,453
--------- ------
Interest:
Interest Expense 6,314 5,339
Investment Income (776) (456)
--------- ------
5,538 4,883
--------- ------
Unconsolidated Entities
(Net of Applicable Taxes):
Equity in Net Income of Unconsolidated
Entities 226 142
--------- ------
Income Before Provision for Income Taxes 3,197 3,712
--------- ------
Provision for Income Taxes:
Current 1,805 1,819
Deferred (779) (572)
State 85 18
--------- ------
1,111 1,265
--------- ------
Net Income $ 2,086 $ 2,447
========= =======
Earnings Per Common Share:
Net Income $ 0.39 $ 0.46
========= =======
Weighted Average Shares of
Common Stock Outstanding 5,346,611 5,346,611
<FN>
The accompanying notes are an integral part of these statements.
<PAGE 5>
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
(Dollars in Thousands)
(Unaudited)
Additional Net
Common Paid-In Retained Treasury Unrealized
Stock Capital Earnings Stock Holding Loss Total
-------------------------------------------------------
Balance at
December 31,
1993 $ 5,405 $54,450 $75,775 $(1,133) $ -- $134,497
Net Income for
the Year Ended
December 31,
1994 -- -- 13,051 -- -- 13,051
Cash Dividends -- -- (1,069) -- -- (1,069)
Unrealized Holding
Loss on
Marketable
Securities,
Net of Deferred
Taxes -- -- -- -- (163) (163)
--------------------------------------------------------
Balance at
December 31,
1994 $ 5,405 $54,450 $87,757 $(1,133) $ (163) $146,316
Net Income for
Three Months
Ended March 31,
1995 -- -- 2,086 -- -- 2,086
Cash Dividends -- -- (268) -- -- (268)
Unrealized Holding
Gain on
Marketable
Securities,
Net of
Deferred Taxes -- -- -- -- 77 77
---------------------------------------------------------
Balance at
March 31,
1995 $ 5,405 $54,450 $89,575 $(1,133) $ (86) $148,211
==========================================================
<FN>
The accompanying notes are an integral part of these statements.
<PAGE 6>
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
March 31,
1995 1994
--------- --------
Cash Flows from Operating Activities:
Net Income 2,086 2,447
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 6,450 6,392
Amortization of Deferred Charges
and Other Assets 4,321 4,114
Provision (Benefit) for Deferred
Income Taxes 1,026 (572)
Gain on Sale of Assets (1) (7)
Net Investment in Direct Financing
Leases 551 570
Unearned Income 3,023 1,150
Equity in Unconsolidated
Subsidiaries (226) (142)
Reserve for Claims and Other
Deferred Credits (1,140) 79
Other Assets 296 2,315
Change in Working Capital:
Accounts Receivable (64) 3,283
Inventories and Other Current
Assets 569 2,841
Federal Income Taxes Payable (341) 0
Accounts Payable and Accrued
Liabilities (3,817) (6,154)
-------- -------
Net Cash Provided by Operating Activities 12,733 16,316
Cash Flows from Investing Activities:
Purchase of Vessels and Other Property (1,533) (29,348)
Additions to Deferred Charges (3,908) (2,663)
Investment in and Advances to
Unconsolidated Subsidiaries 359 615
Proceeds from Sale of Assets 36 9
Other Investing Activities (1,397) 0
-------- -------
Net Cash Used by Investing Activities (6,443) (31,387)
Cash Flows from Financing Activities:
Proceeds from Issuance of Debt and
Capital Lease Obligations 15,000 21,109
Reduction of Debt and Capital Lease
Obligations (15,974) (5,335)
Common Stock Dividends (267) (268)
--------- --------
Net Cash (Used) Provided by Financing (1,241) 15,506
Activities
Net Increase in Cash and Cash Equivalents 5,049 435
Cash and Cash Equivalents at
Beginning of Period 29,611 40,904
--------- --------
Cash and Cash Equivalents at End of Period 34,660 41,339
========= ========
<FN>
The accompanying notes are an integral part of these statements.
<PAGE 7>
INTERNATIONAL SHIPHOLDING CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
MARCH 31, 1995
(Unaudited)
Note 1. Basis of Preparation
The accompanying unaudited interim
financial statements have been prepared
pursuant to the rules and regulations of
the Securities and Exchange Commission.
Certain information and footnote
disclosures required by generally
accepted accounting principles for
complete financial statements have been
omitted. It is suggested that these
interim statements be read in
conjunction with the financial
statements and notes thereto included in
the Form 10-K of International
Shipholding Corporation for the year
ended December 31, 1994. Certain
reclassifications have been made to
prior period financial information in
order to conform to current year
presentations.
Interim statements are subject to
possible adjustments in connection with
the annual audit of the Company's
accounts for the full year 1995; in the
opinion of management, all adjustments
(consisting of only normal recurring
adjustments) necessary for a fair
presentation of the information shown
have been included.
The foregoing 1995 interim results
are not necessarily indicative of the
results of the operations for the full
year 1995.
The Company's policy is to
consolidate all subsidiaries in which it
holds greater than 50% voting interest.
All significant intercompany accounts
and transactions have been eliminated.
The Company uses the cost method to
account for investments in entities in
which it holds less than 20% voting
interest and in which the Company cannot
exercise significant influence over
operating and financial activities. The
Company uses the equity method to
account for investments in entities in
which it holds a 20% to 50% voting
interest.
<PAGE 8>
INTERNATIONAL SHIPHOLDING CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's vessels are operated
under a variety of charters, liner
services, and contracts. The nature of
these arrangements is such that, without
a material variation in gross voyage
profits (total revenues less voyage
expenses and vessel and barge
depreciation), the revenues and expenses
attributable to a vessel deployed under
one type of charter or contract can
differ substantially from those
attributable to the same vessel if
deployed under a different type of
charter or contract. Accordingly,
depending on the mix of charters or
contracts in place during a particular
accounting period, the Company's
revenues and expenses can fluctuate
substantially from one period to another
even though the number of vessels
deployed, the number of voyages
completed, the amount of cargo carried
and the gross voyage profit derived from
the vessels remain relatively constant.
As a result, fluctuations in voyage
revenues and expenses are not
necessarily indicative of trends in
profitability, and management believes
that gross voyage profit is a more
appropriate measure of performance than
revenues. Accordingly, the discussion
below addresses variations in gross
voyage profits rather than variations in
revenues.
Gross Voyage Profit. Gross voyage
profit for the First Quarter of 1995 of
$15.0 million approximated the amount
earned during the First Quarter of 1994
of $15.1 million. Positively impacting
the current period results was the
addition of the SULPHUR ENTERPRISE to
the Company's fleet early in the fourth
quarter of 1994. This increase was
offset by reductions in gross voyage
profit from the Company's LASH vessels
employed in liner service between ports
on the U. S. Gulf/U. S. Atlantic Coast
and South Asia (Trade Routes 18 and 17)
as
<PAGE 9>
a result of decreased freight rates.
Also contributing to the decrease was a
scheduled rate reduction on one of the
Company's vessels chartered to the
Military Sealift Command (the "MSC").
Vessel and barge depreciation for
the First Quarter of 1995 was consistent
with the amount in the same period of
1994.
Other Income and Expense.
Administrative and general expense
decreased by 2.4% to $6.5 million during
the First Quarter of 1995 as compared to
$6.6 million in the comparable period of
1994 stemming from continuing cost
reduction efforts.
Interest expense increased 18.3% to
$6.3 million in the First Quarter of
1995 as compared to $5.3 million in the
same period in 1994 primarily due to
financing received in late 1994 for the
SULPHUR ENTERPRISE of $43.4 million and
financing of $12.0 million received
during early 1995 for general corporate
purposes. This increase was partially
offset by regularly scheduled payments
on other outstanding debt.
Investment income increased from
$456,000 in the First Quarter of 1994 to
$776,000 in the First Quarter of 1995.
This increase reflected higher interest
rates earned on invested funds and a
higher average balance of invested funds
during 1995.
The Company's share of earnings
from unconsolidated entities increased
from $142,000 in the First Quarter of
1994 to $226,000 in the First Quarter of
1995 primarily due to increased charter
rates on two PROBO vessels in which the
Company holds a 50% interest.
Income Taxes. The Company provided
$1.0 million for federal income taxes in
the First Quarter of 1995 at the
statutory rate of 35% as compared to
$1.2 million in the First Quarter of
1994 at the same rate. Income of
unconsolidated entities is shown net of
applicable taxes.
<PAGE 10>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital
increased from $16.8 million at December
31, 1994, to $21.9 million at March 31,
1995, after provision for current
maturities of long-term debt of $28.0
million and capital lease obligations of
$1.5 million. Cash and cash equivalents
increased during the first three months
of 1995 by $5.0 million to a total of
$34.7 million at March 31, 1995.
Positive cash flows were achieved
from operating activities in the first
three months of 1995 in the amount of
$12.7 million. The major source of cash
from operations was net income, adjusted
for non-cash provisions such as
depreciation and amortization.
Net cash used for investing
activities amounted to $6.4 million
during the first three months of 1995.
Capital investments included $1.0
million for computer development and
upgrades and approximately $500,000 in
other miscellaneous items. Other uses
of cash included the addition of $3.9
million of deferred charge items,
primarily for vessel drydocking, and the
purchase of $1.4 million of securities.
The Company received $359,000 from its
investments in unconsolidated entities
and $36,000 from the sales of property.
Net cash used by financing
activities during the first three months
of 1995 was $1.2 million. Uses of cash
included regularly scheduled principal
payments of $16.0 million for debt and
lease obligations and $267,000 used to
meet common stock dividend requirements.
Partially offsetting these uses of cash
were proceeds of $12.0 million drawn on
a medium-term, variable rate loan from a
commercial bank in early First Quarter
1995 for general corporate purposes. In
addition, $3.0 million was drawn under
one of the Company's revolving lines of
credit.
The Company has entered into a long-
term contract with P.T. Freeport
Indonesia Company (an affiliate of
Freeport-McMoRan Copper and Gold, Inc.)
to provide transportation services for
supplies associated with the operation
of a copper and gold mine on the
Indonesian Island of Irian Jaya. The
Company has acquired and is converting
two semi-submersible barge carrying
vessels and is having 26 cargo barges
built to be used with the aforementioned
vessels. As of
<PAGE 11>
March 31, 1995, the Company had paid
approximately $2.4 million of the total
cost of approximately $78.0 million.
The Company will also charter a small
container vessel to fulfill the
requirements of the contract which is
expected to commence in late 1995. The
Company has arranged financing for
approximately 60% of the cost of these
acquisitions through a long-term loan
with a commercial bank. At March 31,
1995, no draws had been made on this
loan.
The Company contracted, in October
1994, to purchase a U. S. Flag Coal
Carrier with delivery anticipated in the
Second Quarter of 1995. The vessel will
be placed under long-term charter to a
major electric utility company to carry
part of its fuel supply. The ship will
also be used from time to time to carry
cargoes for the account of other
charterers. The Company has arranged
financing with a commercial bank for a
major portion of the purchase price of
the vessel, but is also considering
alternative financing.
As of December 31, 1994, the
Company held an approximately 9%
interest in Havtor AS, a publicly listed
company on the Oslo Stock Exchange, and
a 14.2% equity interest in A/S Havtor
Management, a privately held Norwegian
ship management company. In addition,
the company held a 50% interest in a
foreign entity, Bulkowner's 1984, which
was formed to own and operate two
combination dry cargo/petroleum
products, PROBO vessels. The Company
also held a 10% interest in a limited
partnership with certain Norwegian
interests to construct and own a
liquified petroleum gas carrier which
delivered in 1993.
During the First Quarter of 1995,
the Company signed an agreement whereby
A/S Havtor Management and the gas
carrier activities of Kvaerner, an
unrelated Norwegian company, would be
merged into Havtor AS. In addition,
Havtor AS agreed to acquire other
vessels and vessel interests, including
the 50% interest held by the Company in
two PROBO vessels and the 10% interest
held in a liquified petroleum gas
carrier. The merger was approved by
shareholders of Havtor AS in a general
meeting held in April 1995. As a result
of the merger, the Company's interest in
Havtor AS now approximates 6.4%. In
<PAGE 12>
addition, Havtor AS stock is held by the
Company as collateral for a promissory
note which matures in mid-1996. The
Company has been notified by the debtor
that they intend to transfer their
interest in these shares to the Company
during the second quarter of 1995.
After this transfer the Company's
interest in Havtor AS will approximate
7.7%. As of April 28, 1995 the market
value of this 7.7% investment
approximated $47.0 million. The
Company's book basis in this investment
as of the same date approximated $30.0
million.
Due to the liquidity of the shares
held in Havtor AS, effective Second
Quarter of 1995, the investment will be
reflected in the financial statements at
fair market value with unrealized
holding gains and losses excluded from
earnings and reported as a separate
component of shareholders' equity in
accordance with the required accounting
treatment for investments in equity
securities that have readily
determinable fair values.
To meet short-term requirements
when fluctuations occur in working
capital, the Company has available four
lines of credit totaling $35.0 million
of which $3.0 million was drawn at March
31, 1995, and repaid in early Second
Quarter of 1995.
The Company has not been notified
that it is a potentially responsible
party in connection with any
environmental matters.
At a regular meeting held April 19,
1995, the Board of Directors declared a
quarterly dividend of five cents per
share of common stock to be paid on June
16, 1995, to its stockholders of record
as of June 2, 1995.
<PAGE 13>
PART II-OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K
(b) No reports on Form 10-K have
been filed for the three months ended
March 31, 1995.
SIGNATURES
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.
INTERNATIONAL SHIPHOLDING CORPORATION
/S/ Gary L. Ferguson
_______________________________________
Gary L. Ferguson
Vice President and Chief Financial Officer
Date: May 12, 1995