Exhibit 99.1
International Shipholding Corporation Reports Fourth Quarter Results
NEW ORLEANS--(BUSINESS WIRE)--Jan. 26, 2006--International Shipholding
Corporation (NYSE:ISH) today reported results for the three month and twelve
month periods ended December 31, 2005. The Company reported a loss of $225,000
for the three months ended December 31, 2005 which includes losses from
discontinued operations of $101,000 and after-tax losses related to the impact
from Hurricanes Katrina and Rita of $1.108 million. For the comparable three
months ended December 31, 2004, the Company reported net income of $7.840
million which included $7.725 million of net income from the enactment of the
Jobs Creation Act during the fourth quarter of 2004 and losses from discontinued
operations of $253,000. For the full year 2005, net income was $6.996 million,
including after-tax losses related to Hurricanes Katrina and Rita of $2.100
million and losses from discontinued operations of $1.270 million compared to
net income of $12.785 million for the same period of 2004 which included the
$7.725 million of income from the Jobs Creation Act and losses from discontinued
operations of $409,000. Net results available to common stockholders for the
three and twelve month periods ended December 31, 2005, after dividends on our
preferred stock, were a loss of $825,000 and net income of $4.629 million,
respectively.
The Company's LASH liner service and its Mexican Rail/Ferry service were
adversely affected by Hurricanes Katrina and Rita. The LASH liner service's
operating results for the three and twelve month periods were negatively
impacted by $179,000 and $375,000 respectively. This service had operational
delays and rescheduling implications as a result of the hurricanes. The
Company's Mexican Rail/Ferry service was forced to cease operations in the third
quarter and only resumed limited service on November 10, 2005. This limited
service continued during the quarter while customer support returned to
pre-hurricane levels. As a result, the operating results for the three and
twelve month periods ended December 31, 2005 include losses of $1.400 million
and $2.502 million, respectively, for that service.
Operating results on the Company's time charter segment were higher in the
fourth quarter and full year 2005 as compared to 2004 primarily as a result of
carrying more supplemental cargoes, the addition of a fifth U.S. flag Pure
Car/Truck carrier and the results of the Company's two container vessels which
were acquired in late 2004.
The fourth quarter and full year results of our U.S. flag Coal Carrier were
lower than the comparable 2004 periods as the vessel, due to market conditions,
did not operate as many days beyond its charter obligation which does not
require employment of the vessel for the full year.
While the Company's fifty percent investment in a company owning two
Cape-size bulk carriers continued to have a high percentage of voyage cargo
Contract of Affreightment coverage in 2005, the results were lower for the
fourth quarter and in fiscal year 2005 as compared to the same periods in 2004
reflecting a significant increase in unhedged bunker fuel costs and a change in
market charter rates. In December of 2005, the Company purchased a fifty percent
investment in two 1998 built Panamax-size bulk carriers which will be owned by
the aforementioned bulk carrier company.
The 2005 annual results include a before tax gain of $1.225 million from
our share on the sale of a cement carrier vessel in the first quarter of 2005.
In addition, the results reflect a reduction in the Company's interest expense
for the full year 2005 from the repurchase of some of our 7 3/4% Senior Notes
and regularly scheduled payment of debt.
Depreciation expense was higher in the current quarter and 2005 annual
results reflecting the acquisition of the two container vessels near the end of
the fourth quarter of 2004.
Administrative and general expenses were lower in the fourth quarter of
2005 as compared to the same period in 2004 as a result of the Company's
improved health cost experience. For the full year comparable periods, 2005 was
slightly higher from normal salary increases and higher professional service
fees.
Our income tax provision for the quarter and twelve month period ended
December 31, 2005 was significantly higher than in the same period 2004 due to
the impact in 2004 of the Jobs Creation Act. When we elected, in December 2004,
to have our U.S. flag operations taxed under a new "Tonnage Tax" rate rather
than the usual U.S. corporation income tax rate, it triggered a one time
reduction in our deferred tax provision of $12.058 million. Additionally, under
the Jobs Creation Act ("Act"), shipping income from the Company's controlled
foreign corporations is generally no longer subject to U.S. income tax but will
be deferred until repatriated. This triggered a charge against the Company's net
deferred tax asset of $4.333 million. The net beneficial results of both
adjustments of $7.725 million were reflected in the fourth quarter of 2004.
While results for the comparable periods reflect a lower benefit in 2005, this
is due to the one-time adjustment in 2004. Without that adjustment, the impact
of the Jobs Creation Act is favorable as compared to pre-Act tax rates. Our
income tax benefit from continuing operations before equity in net income of
unconsolidated entities was $2.150 million and $2.457 million, respectively, for
the quarter and twelve month period ended December 31, 2005. Our income tax
provision for the same periods would have been $903,000 and $2.87 million
higher, respectively, if we were to apply pre-Act tax rates.
Certain statements made in this release on our behalf that are not based on
historical facts are intended to be forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based on assumptions about
future events and are therefore subject to risks and uncertainties. We caution
readers that certain important factors have affected and may affect in the
future our actual consolidated results of operations and may cause future
results to differ materially from those expressed in or implied by any
forward-looking statements made in this release on our behalf. A description of
certain of these important factors is contained in our Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2004.
The common stock of International Shipholding Corporation is traded on the
New York Stock Exchange with the symbol ISH. The Company's preferred stock is
traded on the NYSE with the symbol "ISH Pr".
Unaudited results for the periods indicated along with prior year results
are (in thousands except share and per share data):
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues $ 62,041 $ 63,076 $ 262,156 $ 259,164
Operating Expenses:
Voyage Expenses 52,255 53,142 213,997 212,860
Vessel and Barge
Depreciation 5,879 4,692 22,379 18,258
---------- ---------- ---------- ----------
Gross Voyage Profit 3,907 5,242 25,780 28,046
---------- ---------- ---------- ----------
Administrative and
General Expenses 3,870 4,363 16,052 15,536
(Gain) Loss on Sale of
Other Assets - - (584) 7
---------- ---------- ---------- ----------
Operating Income 37 879 10,312 12,503
---------- ---------- ---------- ----------
Interest and Other:
Interest Expense 2,802 2,665 9,626 10,585
Loss (Gain) on
Sale of
Investment 68 - (287) 623
Investment Income (250) (261) (1,111) (691)
Loss on Early
Extinguishment
of Debt 142 315 68 361
---------- ---------- ---------- ----------
2,762 2,719 8,296 10,878
---------- ---------- ---------- ----------
(Loss) Income from
Continuing Operations
Before Benefit for
Income Taxes and
Equity in Net Income
of Unconsolidated
Entities (2,725) (1,840) 2,016 1,625
---------- ---------- ---------- ----------
Benefit for Income
Taxes (2,150) (8,317) (2,457) (6,923)
---------- ---------- ---------- ----------
Equity in Net Income
of Unconsolidated
Entities (Net of
Applicable Taxes) 451 1,616 3,793 4,646
---------- ---------- ---------- ----------
(Loss) Income from
Continuing Operations (124) 8,093 8,266 13,194
---------- ---------- ---------- ----------
Loss from Discontinued
Operations (101) (253) (1,270) (409)
---------- ---------- ---------- ----------
Net (Loss) Income $ (225) $ 7,840 $ 6,996 $ 12,785
---------- ---------- ---------- ----------
Preferred Stock
Dividends 600 - 2,367 -
---------- ---------- ---------- ----------
Net (Loss) Income
Available to Common
Stockholders $ (825) $ 7,840 $ 4,629 $ 12,785
========== ========== ========== ==========
Basic and Diluted
Earnings Per Common
Share:
Net (Loss) Income Available to
Common Stockholders - Basic
Continuing
Operations $ (0.12) $ 1.33 $ 0.97 $ 2.17
Discontinued
Operations (0.02) (0.04) (0.21) (0.07)
---------- ---------- ---------- ----------
$ (0.14) $ 1.29 $ 0.76 $ 2.10
========== ========== ========== ==========
Net (Loss) Income Available to
Common Stockholders - Diluted
Continuing
Operations $ (0.11) $ 1.33 $ 0.96 $ 2.17
Discontinued
Operations (0.02) (0.04) (0.21) (0.07)
---------- ---------- ---------- ----------
$ (0.13) $ 1.29 $ 0.75 $ 2.10
========== ========== ========== ==========
Weighted Average Shares of
Common Stock Outstanding:
Basic 6,083,357 6,082,887 6,083,005 6,082,887
Diluted 6,128,446 6,091,657 6,114,510 6,092,302
CONTACT: International Shipholding Corporation, New Orleans
Erik F. Johnsen, 504-529-5461
or
Niels M. Johnsen, 212-943-4141