Exhibit 99.1
International Shipholding Corporation Reports Fourth Quarter Results
NEW ORLEANS--(BUSINESS WIRE)--January 25, 2007--International Shipholding
Corporation (NYSE: ISH) today reported results for the three-month and
twelve-month periods ended December 31, 2006. The Company reported net income of
$22.362 million for the three months ended December 31, 2006, which included
pre-tax gains of $22.598 million on the sale of our minority investment in
another company and $4.914 million on the sale of a LASH vessel and related LASH
barges. For the comparable three months ended December 31, 2005, the Company
reported a net loss of $225,000, which included after-tax losses related to the
impact of Hurricanes Katrina and Rita of $1.108 million. For the full year 2006,
net income was $17.048 million, including the aforementioned gains, compared to
net income of $6.996 million for the full year 2005, which included after-taxes
losses associated with the hurricanes of $2.1 million and losses from
discontinued operations of $1.270 million. Net income (loss) available to common
stockholders, after dividends on our preferred stock, was $21.762 million for
the three months ended December 31, 2006 and a loss of $825,000 for the three
months ended December 31, 2005.
In November of 2006, we sold our 26.1% investment in Belden Shipholding Pte
Ltd ("Belden"), a company that owns and operates cement carrier vessels, for
$27.490 million. The sale was pursuant to an unsolicited offer and resulted in
the aforementioned pre-tax gain of $22.598 million.
Operating income for the three months ended December 31, 2006 was $4.398
million higher than in the same period of 2005. The improvement in operating
income included the aforementioned gain of $4.914 million on the sale of a LASH
vessel and related LASH barges. During the third quarter of 2006, the Company
re-evaluated its TransAtlantic LASH Liner Service and decided to reduce the
capacity of that service from two LASH vessels to one during the fourth quarter.
Cargo volume was lower in the first half of 2006 than in the previous year, and
in the third quarter of 2006, the European Union placed an embargo on certain
rice shipments from the United States, which comprised a significant portion of
our TransAtlantic LASH Liner Service's volume. At the end of the third quarter,
we purchased a LASH vessel that we had been leasing for use in this service, and
subsequently sold that vessel and related LASH barges during the fourth quarter
to a third party for $12.2 million.
Despite the decrease in volume for the TransAtlantic LASH Liner Service,
results from the Liner Services segment for the fourth quarter of 2006, which
also includes a U.S. Flag LASH service, improved slightly over the same period
of 2005. This was primarily because there was a more profitable cargo mix
shipped by the U.S. Flag service in the fourth quarter of 2006 as compared to
the same period of 2005. Additionally, the decreases in revenue associated with
lower volume on the TransAtlantic service were partially offset by cost savings
resulting from reducing the capacity of the service.
The Company's Time Charter segment made the largest contribution to the
improvement in operating income during the fourth quarter of 2006 as compared to
the same period in 2005. The Company's U.S. Flag Coal Carrier earned revenue at
its higher primary contractual rate for the full quarter in 2006, while it
earned a lower secondary rate under the same contract during the fourth quarter
of 2005. The higher primary rate is available for a specified number of days
during each contract year, and those days were fulfilled earlier in 2005 than in
2006.
The Company's Contract of Affreightment ("COA") and Rail-Ferry Service
segments produced slightly lower results for the fourth quarter of 2006 as
compared to the same period of 2005. The COA segment, which consists of a
contract associated with the Company's Molten Sulphur Carrier, was impacted by
less available tonnage from that customer resulting in fewer cargo shipments.
For the Rail-Ferry Service segment, increased cargo volume produced higher
revenue during the fourth quarter of 2006 as compared to the fourth quarter of
2005, which was impacted by the hurricanes. However, increases in operating
costs offset that increase in revenue and resulted in a slight overall decrease
in results from this segment for the fourth quarter of 2006 as compared to the
same period of 2005.
Operating income for the Company's Other segment for the fourth quarter of
2006 included a non-recurring charge of approximately $1.9 million associated
with terminating the lease of an intermodal transfer facility that was no longer
being utilized in the Company's operations. The facility was previously used in
the Company's Liner Services segment. The Company has been monitoring the cargo
being processed through that facility and evaluating other uses for the
facility, and we determined late in 2006 that the best alternative was to
terminate the lease of the facility.
Operating income was also affected by an increase in administrative and
general expenses, which were $6.033 million for the fourth quarter of 2006,
compared to $3.870 million for the same period of 2005. The increase was
primarily associated with one-time costs related to the relocation of the
Company's corporate offices, higher fees for professional services, and employee
bonus expenses.
The Company's results from its 50% investment in a company that owns and
operates bulk carriers produced higher results for the fourth quarter of 2006 as
compared to the same period of 2005, primarily due to higher charter rates
earned by two of the ships owned by that company.
Our income tax provision for the fourth quarter of 2006 was $3.107 million
as compared to a tax benefit of $2.150 million for the fourth quarter of 2005.
The increase in operating income described above, along with the gain on the
sale of the Belden investment, resulted in the tax provision for the fourth
quarter of 2006.
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, 2005.
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 period indicated along with prior year results
are (in thousands except share and per share data):
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
----------- ----------- ---------- -----------
Revenues $58,838 $62,041 $274,881 $262,156
Operating Expenses:
Voyage Expenses 47,387 52,255 230,510 213,997
Vessel and Barge
Depreciation 5,966 5,879 23,735 22,379
Impairment Loss - - 8,866 -
----------- ----------- ---------- -----------
Gross Voyage Profit 5,485 3,907 11,770 25,780
----------- ----------- ---------- -----------
Administrative and
General Expenses 6,033 3,870 18,765 16,052
Gain on Sale of Other
Assets (4,983) - (5,125) (584)
----------- ----------- ---------- -----------
Operating Income (Loss) 4,435 37 (1,870) 10,312
----------- ----------- ---------- -----------
Interest and Other:
Interest Expense 2,774 2,802 11,147 9,626
(Gain) Loss on Sale
of Investment (22,598) 68 (23,058) (287)
Investment Income (350) (250) (1,397) (1,111)
Loss on Early
Extinguishment of
Debt 35 142 248 68
----------- ----------- ---------- -----------
(20,139) 2,762 (13,060) 8,296
----------- ----------- ---------- -----------
Income (Loss) from
Continuing Operations
Before Provision
(Benefit) for Income
Taxes and Equity in Net
Income of
Unconsolidated Entities 24,574 (2,725) 11,190 2,016
----------- ----------- ---------- -----------
Provision (Benefit) for
Income Taxes 3,107 (2,150) (1,133) (2,457)
----------- ----------- ---------- -----------
Equity in Net Income of
Unconsolidated Entities
(Net of Applicable
Taxes) 895 451 4,725 3,793
----------- ----------- ---------- -----------
Income (Loss) from
Continuing Operations 22,362 (124) 17,048 8,266
----------- ----------- ---------- -----------
Loss from Discontinued
Over-the-Road
Transportation
Operations (Net of
Applicable Taxes) - (101) - (1,270)
----------- ----------- ---------- -----------
Net Income (Loss) $22,362 $(225) $17,048 $6,996
----------- ----------- ---------- -----------
Preferred Stock
Dividends 600 600 2,400 2,367
----------- ----------- ---------- -----------
Net Income (Loss)
Available to Common
Stockholders $21,762 $(825) $14,648 $4,629
=========== =========== ========== ===========
Basic and Diluted
Earnings Per Common
Share:
Net Income (Loss)
Available to Common
Stockholders - Basic
Continuing
Operations $3.56 $(0.12) $2.40 $0.97
Discontinued
Operations - (0.02) - (0.21)
----------- ----------- ---------- -----------
$3.56 $(0.14) $ 2.40 $0.76
=========== =========== ========== ===========
Net Income (Loss)
Available to Common
Stockholders - Diluted
Continuing
Operations $3.56 $(0.11) $2.39 $0.96
Discontinued
Operations - (0.02) - (0.21)
----------- ----------- ---------- -----------
$3.56 $(0.13) $2.39 $0.75
=========== =========== ========== ===========
Weighted Average Shares
of Common Stock
Outstanding:
Basic 6,119,187 6,083,357 6,116,036 6,083,005
Diluted 6,119,187 6,128,446 6,122,578 6,114,510
CONTACT: International Shipholding Corporation
Erik F. Johnsen, Chairman, 504-529-5461
or
Niels M. Johnsen, President, 212-943-4141