Overseas Shipholding Group, Inc. (NYSE: OSG) (the “Company” or “OSG”), a leading provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, today reported results for the third quarter 2022.
- Shipping revenues for the third quarter of 2022 were $123.1 million, an increase of $5.1 million, or 4.3%, from the second quarter of 2022. Compared to the third quarter of 2021, shipping revenues increased 31.0% from $94.0 million.
- Net income for the third quarter of 2022 was $13.2 million, or $0.15 per diluted share, compared with net income of $3.7 million, or $0.04 per diluted share, in the second quarter of 2022. Net loss was $16.0 million, or $(0.18) per diluted share, for the third quarter of 2021.
- Time charter equivalent (TCE) revenues(A), a non-GAAP measure, for the third quarter of 2022 were $115.1 million, an increase of $11.8 million, or 11.4%, from the second quarter of 2022. TCE revenues were up 52.7% compared to the third quarter of 2021.
- Third quarter 2022 Adjusted EBITDA(B), a non-GAAP measure, was $42.3 million, an increase of $10.8 million, or 34.4%, from the second quarter of 2022. Adjusted EBITDA increased 247.6% from $12.2 million in the third quarter of 2021.
- Total cash(C) was $73.7 million as of September 30, 2022.
- During the quarter, the Company used cash on hand to purchase a $15.0 million U.S. Treasury Note for $14.8 million with a maturity date of August 15, 2024. The U.S. Treasury Note is classified as investment in security to be held to maturity on the condensed consolidated balance sheets.
Sam Norton, President and CEO, offered the following comments on the quarterly results announced today: “Financial results achieved during the past quarter provide a welcome affirmation of our long-held belief in the viability of OSG’s business strategy, exceeding our expectations and signaling continued strength through the balance of the year and into 2023. Our niche businesses in particular delivered stellar results for the quarter, adding meaningfully to the continuing rebound seen in the time charter equivalent returns of our conventional tankers and ATBs. Adjusted EBITDA of $42.3 million generated $14 million of free cashflow for the period, clearly the best performance on that measure in many years.”
Mr. Norton added, “As previously announced, redelivery in December of three conventional tankers will reduce the number of vessels leased from American Shipping Company, releasing OSG from annual fixed payment obligations of approximately $27 million during 2023 and beyond. The effective deleveraging achieved through the decision not to extend options on these three vessels should, when taken together with positive free cash flow performance expected in the quarters ahead, provide OSG with enhanced flexibility to address existing and anticipated business opportunities.”
A, B, C Reconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release |
||||
Third Quarter 2022 Results
Shipping revenues were $123.6 million for the third quarter of 2022, an increase of $5.1 million, or 4.3%, from the second quarter of 2022. TCE revenues increased $11.8 million, or 11.4%, from the second quarter of 2022 to $115.1 million in the third quarter of 2022. The increases were primarily a result of (a) an 82-day decrease in layup days, as our two remaining vessels in layup returned to service in May 2022, (b) an increase in average daily rates earned by our fleet and (c) a 10-day decrease in repair days. The increases were partially offset by (a) a 13-day increase in scheduled drydocking, (b) a decrease in Delaware Bay lightering volumes and (c) the timing of Government of Israel voyages.
Third quarter 2022 operating income was $22.4 million compared to the second quarter 2022 operating income of $12.6 million.
Quarterly adjusted EBITDA increased to $42.3 million during the third quarter of 2022, a $10.8 million increase from the second quarter of 2022. The increase was driven by the increased revenues for the quarter.
In comparison to the third quarter of 2021, shipping revenues were up 31.0% and TCE revenues increased $39.7 million or 52.7%. The increases primarily resulted from a 599-day decrease in layup days as we had no vessels in layup. During the third quarter of 2021, we had seven vessels in layup for most of the quarter with two of seven vessels coming out of layup in September 2021. Additionally, the increase in TCE revenues resulted from an increase in average daily rates earned by our fleet and an increase in Delaware Bay lightering volumes. The increase was partially offset by a 54-day increase in scheduled drydocking.
Operating income for the third quarter of 2022 was $22.4 million compared to an operating loss of $5.6 million for the third quarter of 2021. Net income for the third quarter of 2022 was $13.2 million, or $0.15 per diluted share, compared with a net loss of $16.0 million, or $(0.18) per diluted share, for the third quarter of 2021.
Adjusted EBITDA was $42.3 million for the 2022 third quarter, an increase of $30.1 million compared with the third quarter of 2021, driven primarily by the increase in TCE revenues.
Conference Call
The Company will host a conference call to discuss its third quarter 2022 results at 9:30 a.m. Eastern Time (“ET”) on Friday, November 4, 2022.
To access the call, participants should dial (844) 200-6205 for domestic callers and (929) 526-1599 for international callers and enter Access Code 947417. Please dial in ten minutes prior to the start of the call.
A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at www.osg.com.
An audio replay of the conference call will be available for one week starting at 11:30 a.m. ET on Friday, November 4, 2022, by dialing (866) 813-9403 for domestic callers and (929) 458-6194 for international callers and entering Access Code 291009.
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc. (NYSE:OSG) is a publicly traded company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG is a major operator of tankers and ATBs in the Jones Act industry. OSG’s 23 vessel U.S. Flag fleet consists of three Suezmax crude oil tankers doing business in Alaska, two conventional ATBs, two lightering ATBs, three shuttle tankers, ten MR tankers, and two non-Jones Act MR tankers that participate in the U.S. Maritime Security Program, and one tanker in cold layup. In addition, OSG also owns and operates one Marshall Islands flagged MR tanker which trades internationally.
OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, the Company may make or approve certain forward-looking statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical fact should be considered forward-looking statements. These matters or statements may relate to our prospects, supply and demand for vessels in the markets in which we operate and the impact on market rates and vessel earnings, the continued stability of our niche businesses, the impact of our time charter contracts on our future financial performance, and external events including geopolitical conflicts such as the Russian/Ukraine conflict. Forward-looking statements are based on our current plans, estimates and projections, and are subject to change based on a number of factors. COVID-19 has had, and will continue to have, a profound impact on our workforce and many other aspects of our business and industry. Investors should carefully consider the risk factors outlined in more detail in our filings with the SEC. We do not assume any obligation to update or revise any forward-looking statements except as may be required by applicable law. Forward-looking statements and written and oral forward-looking statements attributable to us or our representatives after the date of this press release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by us with the SEC.
Consolidated Statements of Operations
|
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
||||||||
Shipping Revenues: |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Time and bareboat charter revenues |
|
$ |
92,730 |
|
|
$ |
64,535 |
|
|
$ |
232,934 |
|
|
$ |
191,130 |
|
Voyage charter revenues |
|
|
30,329 |
|
|
|
29,432 |
|
|
|
112,108 |
|
|
|
72,469 |
|
|
|
|
123,059 |
|
|
|
93,967 |
|
|
|
345,042 |
|
|
|
263,599 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses: |
|
|
|
|
|
|
|
|
||||||||
Voyage expenses |
|
|
7,997 |
|
|
|
18,602 |
|
|
|
32,813 |
|
|
|
51,030 |
|
Vessel expenses |
|
|
45,430 |
|
|
|
36,006 |
|
|
|
130,380 |
|
|
|
101,815 |
|
Charter hire expenses |
|
|
22,743 |
|
|
|
22,806 |
|
|
|
67,089 |
|
|
|
67,719 |
|
Depreciation and amortization |
|
|
17,902 |
|
|
|
15,526 |
|
|
|
51,058 |
|
|
|
45,913 |
|
General and administrative |
|
|
6,556 |
|
|
|
5,707 |
|
|
|
20,929 |
|
|
|
18,076 |
|
Loss on disposal of vessels and other property, including impairments, net |
|
|
— |
|
|
|
960 |
|
|
|
— |
|
|
|
6,257 |
|
Total operating expenses |
|
|
100,628 |
|
|
|
99,607 |
|
|
|
302,269 |
|
|
|
290,810 |
|
Operating income/(loss) |
|
|
22,431 |
|
|
|
(5,640 |
) |
|
|
42,773 |
|
|
|
(27,211 |
) |
Loss on extinguishment of debt, net |
|
|
— |
|
|
|
(7,961 |
) |
|
|
— |
|
|
|
(7,961 |
) |
Other income, net |
|
|
568 |
|
|
|
129 |
|
|
|
649 |
|
|
|
140 |
|
Income/(loss) before interest expense and income taxes |
|
|
22,999 |
|
|
|
(13,472 |
) |
|
|
43,422 |
|
|
|
(35,032 |
) |
Interest expense |
|
|
(8,229 |
) |
|
|
(7,052 |
) |
|
|
(24,869 |
) |
|
|
(20,739 |
) |
Income/(loss) before income taxes |
|
|
14,770 |
|
|
|
(20,524 |
) |
|
|
18,553 |
|
|
|
(55,771 |
) |
Income tax (expense)/benefit |
|
|
(1,522 |
) |
|
|
4,515 |
|
|
|
(2,074 |
) |
|
|
13,195 |
|
Net income/(loss) |
|
$ |
13,248 |
|
|
$ |
(16,009 |
) |
|
$ |
16,479 |
|
|
$ |
(42,576 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Number of Common Shares Outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic - Class A |
|
|
88,174,640 |
|
|
|
90,808,080 |
|
|
|
87,579,624 |
|
|
|
90,513,150 |
|
Diluted - Class A |
|
|
90,349,567 |
|
|
|
90,808,080 |
|
|
|
89,211,983 |
|
|
|
90,513,150 |
|
Per Share Amounts: |
|
|
|
|
|
|
|
|
||||||||
Basic net income/(loss) - Class A |
|
$ |
0.15 |
|
|
$ |
(0.18 |
) |
|
$ |
0.19 |
|
|
$ |
(0.47 |
) |
Diluted net income/(loss) - Class A |
|
$ |
0.15 |
|
|
$ |
(0.18 |
) |
|
$ |
0.18 |
|
|
$ |
(0.47 |
) |
Consolidated Balance Sheets
|
||||||||
|
|
September 30, 2022 |
|
December 31, 2021 |
||||
|
|
(unaudited) |
|
|
||||
ASSETS |
|
|
|
|
||||
Current Assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
73,682 |
|
|
$ |
83,253 |
|
Voyage receivables, including unbilled of $6,185 and $3,777, net of reserve for doubtful accounts |
|
|
22,338 |
|
|
|
14,586 |
|
Income tax receivable |
|
|
1,886 |
|
|
|
1,882 |
|
Other receivables |
|
|
10,325 |
|
|
|
5,816 |
|
Inventories, prepaid expenses and other current assets |
|
|
4,506 |
|
|
|
3,438 |
|
Total Current Assets |
|
|
112,737 |
|
|
|
108,975 |
|
Vessels and other property, less accumulated depreciation |
|
|
734,204 |
|
|
|
761,777 |
|
Deferred drydock expenditures, net |
|
|
42,135 |
|
|
|
43,342 |
|
Total Vessels, Other Property and Deferred Drydock |
|
|
776,339 |
|
|
|
805,119 |
|
Intangible assets, less accumulated amortization |
|
|
19,167 |
|
|
|
22,617 |
|
Operating lease right-of-use assets, net |
|
|
94,425 |
|
|
|
152,027 |
|
Investment security to be held to maturity |
|
|
14,803 |
|
|
|
— |
|
Other assets |
|
|
25,339 |
|
|
|
26,991 |
|
Total Assets |
|
$ |
1,042,810 |
|
|
$ |
1,115,729 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current Liabilities: |
|
|
|
|
||||
Accounts payable, accrued expenses and other current liabilities |
|
$ |
46,342 |
|
|
$ |
49,901 |
|
Current portion of operating lease liabilities |
|
|
80,809 |
|
|
|
100,010 |
|
Current portion of finance lease liabilities |
|
|
4,001 |
|
|
|
4,000 |
|
Current installments of long-term debt |
|
|
23,346 |
|
|
|
22,225 |
|
Total Current Liabilities |
|
|
154,498 |
|
|
|
176,136 |
|
Reserve for uncertain tax positions |
|
|
184 |
|
|
|
179 |
|
Noncurrent operating lease liabilities |
|
|
32,954 |
|
|
|
73,150 |
|
Noncurrent finance lease liabilities |
|
|
17,102 |
|
|
|
18,998 |
|
Long-term debt |
|
|
405,441 |
|
|
|
422,515 |
|
Deferred income taxes, net |
|
|
65,737 |
|
|
|
63,744 |
|
Other liabilities |
|
|
20,626 |
|
|
|
22,393 |
|
Total Liabilities |
|
|
696,542 |
|
|
|
777,115 |
|
Equity: |
|
|
|
|
||||
Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 88,297,439 and 87,170,463 shares issued; 84,518,552 and 87,170,463 shares outstanding) |
|
|
883 |
|
|
|
872 |
|
Paid-in additional capital |
|
|
597,117 |
|
|
|
594,386 |
|
Accumulated deficit |
|
|
(243,108 |
) |
|
|
(259,587 |
) |
Treasury stock, 3,778,887 shares, at cost |
|
|
(11,026 |
) |
|
|
— |
|
|
|
|
343,866 |
|
|
|
335,671 |
|
Accumulated other comprehensive loss |
|
|
2,402 |
|
|
|
2,943 |
|
Total Equity |
|
|
346,268 |
|
|
|
338,614 |
|
Total Liabilities and Equity |
|
$ |
1,042,810 |
|
|
$ |
1,115,729 |
|
Consolidated Statements of Cash Flows
|
||||||||
|
|
Nine Months Ended September 30, |
||||||
|
|
2022 |
|
2021 |
||||
|
|
(unaudited) |
|
(unaudited) |
||||
Cash Flows from Operating Activities: |
|
|
|
|
||||
Net income/(loss) |
|
$ |
16,479 |
|
|
$ |
(42,576 |
) |
Items included in net income not affecting cash flows: |
|
|
|
|
||||
Depreciation and amortization |
|
|
51,058 |
|
|
|
45,913 |
|
Loss on disposal of vessels and other property, including impairments, net |
|
|
— |
|
|
|
6,257 |
|
Amortization of debt discount and other deferred financing costs |
|
|
840 |
|
|
|
1,822 |
|
Compensation relating to restricted stock awards and stock option grants |
|
|
3,237 |
|
|
|
1,989 |
|
Deferred income tax expense/(benefit) |
|
|
1,998 |
|
|
|
(13,193 |
) |
Interest on finance lease liabilities |
|
|
1,228 |
|
|
|
1,362 |
|
Non-cash operating lease expense |
|
|
67,769 |
|
|
|
68,383 |
|
Loss on extinguishment of debt, net |
|
|
— |
|
|
|
5,225 |
|
Payments for drydocking |
|
|
(13,896 |
) |
|
|
(14,883 |
) |
Operating lease liabilities |
|
|
(69,368 |
) |
|
|
(69,297 |
) |
Changes in operating assets and liabilities, net |
|
|
(18,166 |
) |
|
|
(11,430 |
) |
Net cash provided by/(used in) operating activities |
|
|
41,179 |
|
|
|
(20,428 |
) |
Cash Flows from Investing Activities: |
|
|
|
|
||||
Expenditures for vessels and vessel improvements |
|
|
(4,519 |
) |
|
|
(5,827 |
) |
Purchase of investment security to be held to maturity |
|
|
(14,794 |
) |
|
|
— |
|
Proceeds from disposals of vessels and other property |
|
|
— |
|
|
|
32,128 |
|
Net cash (used in)/provided by investing activities |
|
|
(19,313 |
) |
|
|
26,301 |
|
Cash Flows from Financing Activities: |
|
|
|
|
||||
Payments on debt |
|
|
(16,530 |
) |
|
|
(28,919 |
) |
Tax withholding on share-based awards |
|
|
(496 |
) |
|
|
(402 |
) |
Payments on principal portion of finance lease liabilities |
|
|
(3,124 |
) |
|
|
(3,124 |
) |
Deferred financing costs paid for debt amendments |
|
|
(261 |
) |
|
|
(2,429 |
) |
Purchases of treasury stock under the stock repurchase program |
|
|
(11,026 |
) |
|
|
— |
|
Extinguishment of debt |
|
|
— |
|
|
|
(274,582 |
) |
Extinguishment of debt costs paid |
|
|
— |
|
|
|
(2,736 |
) |
Issuance of debt, net of issuance and deferred financing costs |
|
|
— |
|
|
|
321,552 |
|
Net cash (used in)/provided by financing activities |
|
|
(31,437 |
) |
|
|
9,360 |
|
Net (decrease)/increase in cash, cash equivalents and restricted cash |
|
|
(9,571 |
) |
|
|
15,233 |
|
Cash, cash equivalents and restricted cash at beginning of year |
|
|
83,253 |
|
|
|
69,819 |
|
Cash, cash equivalents and restricted cash at end of year |
|
$ |
73,682 |
|
|
$ |
85,052 |
|
Spot and Fixed TCE Rates Achieved and Revenue Days
The following tables provide a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three and nine months ended September 30, 2022 and the comparable period of 2021. Revenue days in the quarter ended September 30, 2022 totaled 2,035 compared with 1,494 in the prior year quarter.
|
|
2022 |
|
|
2021 |
|
||||||||||
Three Months Ended September 30, |
|
Spot Earnings |
|
|
Fixed Earnings |
|
|
Spot Earnings |
|
|
Fixed Earnings |
|
||||
Jones Act Handysize Product Carriers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
38,296 |
|
|
$ |
60,923 |
|
|
$ |
37,527 |
|
|
$ |
66,704 |
|
Revenue days |
|
|
55 |
|
|
|
1,086 |
|
|
|
219 |
|
|
|
449 |
|
Non-Jones Act Handysize Product Carriers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
47,779 |
|
|
$ |
38,911 |
|
|
$ |
43,265 |
|
|
$ |
9,083 |
|
Revenue days |
|
|
184 |
|
|
|
92 |
|
|
|
184 |
|
|
|
92 |
|
ATBs: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
41,117 |
|
|
$ |
35,590 |
|
|
$ |
— |
|
|
$ |
36,146 |
|
Revenue days |
|
|
85 |
|
|
|
99 |
|
|
|
— |
|
|
|
182 |
|
Lightering: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
71,086 |
|
|
$ |
46,906 |
|
|
$ |
60,063 |
|
|
$ |
— |
|
Revenue days |
|
|
135 |
|
|
|
49 |
|
|
|
92 |
|
|
|
— |
|
Alaska (a): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
— |
|
|
$ |
60,438 |
|
|
$ |
— |
|
|
$ |
57,936 |
|
Revenue days |
|
|
— |
|
|
|
250 |
|
|
|
— |
|
|
|
276 |
|
|
|
2022 |
|
|
2021 |
|
||||||||||
Nine Months Ended September 30, |
|
Spot Earnings |
|
|
Fixed Earnings |
|
|
Spot Earnings |
|
|
Fixed Earnings |
|
||||
Jones Act Handysize Product Carriers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
53,710 |
|
|
$ |
60,067 |
|
|
$ |
32,380 |
|
|
$ |
65,882 |
|
Revenue days |
|
|
585 |
|
|
|
2,574 |
|
|
|
548 |
|
|
|
1,380 |
|
Non-Jones Act Handysize Product Carriers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
44,720 |
|
|
$ |
29,632 |
|
|
$ |
30,684 |
|
|
$ |
9,478 |
|
Revenue days |
|
|
546 |
|
|
|
273 |
|
|
|
551 |
|
|
|
428 |
|
ATBs: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
41,048 |
|
|
$ |
35,059 |
|
|
$ |
— |
|
|
$ |
33,529 |
|
Revenue days |
|
|
85 |
|
|
|
458 |
|
|
|
— |
|
|
|
544 |
|
Lightering: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
65,758 |
|
|
$ |
46,906 |
|
|
$ |
74,169 |
|
|
$ |
— |
|
Revenue days |
|
|
363 |
|
|
|
49 |
|
|
|
273 |
|
|
|
— |
|
Alaska (a): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average rate |
|
$ |
— |
|
|
$ |
59,799 |
|
|
$ |
— |
|
|
$ |
58,446 |
|
Revenue days |
|
|
— |
|
|
|
785 |
|
|
|
— |
|
|
|
742 |
|
(a) |
Excludes one Alaska vessel currently in layup. |
Fleet Information
As of September 30, 2022, OSG’s operating fleet consisted of 24 vessels, 12 of which were owned, with the remaining vessels chartered-in. Vessels chartered-in are on Bareboat Charters.
|
|
Vessels Owned |
|
|
Vessels Chartered-In |
|
|
Total at September 30, 2022 |
|
|||
Vessel Type |
|
Number |
|
|
Number |
|
|
Total Vessels |
|
|
Total dwt (3) |
|
Handysize Product Carriers (1) |
|
5 |
|
|
11 |
|
|
16 |
|
|
760,493 |
|
Crude Oil Tankers (2) |
|
3 |
|
|
1 |
|
|
4 |
|
|
772,194 |
|
Refined Product ATBs |
|
2 |
|
|
— |
|
|
2 |
|
|
54,182 |
|
Lightering ATBs |
|
2 |
|
|
— |
|
|
2 |
|
|
91,112 |
|
Total Operating Fleet |
|
12 |
|
|
12 |
|
|
24 |
|
|
1,677,981 |
|
(1) |
Includes two owned shuttle tankers, 11 chartered-in tankers, and 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 one owned Marshall Island flagged non-Jones Act MR tanker 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. |
Reconciliation to Non-GAAP Financial Information
The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures provide investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
(A) Time Charter Equivalent (TCE) Revenues
Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. TCE revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Time charter equivalent revenues |
|
$ |
115,062 |
|
|
$ |
75,365 |
|
|
$ |
312,229 |
|
|
$ |
212,569 |
|
Add: Voyage expenses |
|
|
7,997 |
|
|
|
18,602 |
|
|
|
32,813 |
|
|
|
51,030 |
|
Shipping revenues |
|
$ |
123,059 |
|
|
$ |
93,967 |
|
|
$ |
345,042 |
|
|
$ |
263,599 |
|
Vessel Operating Contribution
Vessel operating contribution, a non-GAAP measure, is TCE revenues minus vessel expenses and charter hire expenses.
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
||||||
Niche market activities |
|
$ |
28,194 |
|
|
$ |
16,334 |
|
|
$ |
63,720 |
|
|
$ |
47,118 |
|
Jones Act handysize tankers |
|
|
6,994 |
|
|
|
(11,958 |
) |
|
|
16,154 |
|
|
|
(35,698 |
) |
ATBs |
|
|
4,833 |
|
|
|
4,064 |
|
|
|
12,916 |
|
|
|
11,402 |
|
Alaska crude oil tankers |
|
|
6,868 |
|
|
|
8,113 |
|
|
|
21,970 |
|
|
|
20,213 |
|
Vessel operating contribution |
|
|
46,889 |
|
|
|
16,553 |
|
|
|
114,760 |
|
|
|
43,035 |
|
Depreciation and amortization |
|
|
17,902 |
|
|
|
15,526 |
|
|
|
51,058 |
|
|
|
45,913 |
|
General and administrative |
|
|
6,556 |
|
|
|
5,707 |
|
|
|
20,929 |
|
|
|
18,076 |
|
Loss on disposal of vessels and other property, including impairments, net |
|
|
— |
|
|
|
960 |
|
|
|
— |
|
|
|
6,257 |
|
Operating income/(loss) |
|
$ |
22,431 |
|
|
$ |
(5,640 |
) |
|
$ |
42,773 |
|
|
$ |
(27,211 |
) |
(B) EBITDA and Adjusted EBITDA
EBITDA represents net income/(loss) before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted to exclude amortization classified in charter hire expenses, interest expense classified in charter hire expenses, loss/(gain) on disposal of vessels and other property, including impairments, net, non-cash stock based compensation expense and loss on repurchases and extinguishment of debt and the impact of other items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net income/(loss) or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled measures used by other companies due to differences in methods of calculation. The following table reconciles net income/(loss) as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA.
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
||||||
Net income/(loss) |
|
$ |
13,248 |
|
|
$ |
(16,009 |
) |
|
$ |
16,479 |
|
|
$ |
(42,576 |
) |
Income tax expense/(benefit) |
|
|
1,522 |
|
|
|
(4,515 |
) |
|
|
2,074 |
|
|
|
(13,195 |
) |
Interest expense |
|
|
8,229 |
|
|
|
7,052 |
|
|
|
24,869 |
|
|
|
20,739 |
|
Depreciation and amortization |
|
|
17,902 |
|
|
|
15,526 |
|
|
|
51,058 |
|
|
|
45,913 |
|
EBITDA |
|
|
40,901 |
|
|
|
2,054 |
|
|
|
94,480 |
|
|
|
10,881 |
|
Amortization classified in charter hire and vessel expenses |
|
|
260 |
|
|
|
143 |
|
|
|
545 |
|
|
|
428 |
|
Interest expense classified in charter hire expenses |
|
|
308 |
|
|
|
338 |
|
|
|
935 |
|
|
|
1,024 |
|
Non-cash stock based compensation expense |
|
|
846 |
|
|
|
719 |
|
|
|
3,237 |
|
|
|
1,988 |
|
Loss on disposal of vessels and other property, including impairments, net |
|
|
— |
|
|
|
960 |
|
|
|
— |
|
|
|
6,257 |
|
Loss on extinguishment of debt, net |
|
|
— |
|
|
|
7,961 |
|
|
|
— |
|
|
|
7,961 |
|
Adjusted EBITDA |
|
$ |
42,315 |
|
|
$ |
12,175 |
|
|
$ |
99,197 |
|
|
$ |
28,539 |
|
(C) Total Cash
($ in thousands) |
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Cash and cash equivalents |
|
$ |
73,630 |
|
|
$ |
83,172 |
|
Restricted cash |
|
|
52 |
|
|
|
81 |
|
Total cash |
|
$ |
73,682 |
|
|
$ |
83,253 |
|
Category: Earnings
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103006044/en/
Contacts
Investor Relations & Media Contact:
Susan Allan, Overseas Shipholding Group, Inc.
(813) 209-0620
sallan@osg.com
