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Overseas Shipholding Group Reports First Quarter 2024 Results
Net income for the first quarter of 2024 was $14.6 million, or $0.19 per diluted share, compared to net income of $12.1 million, or $0.14 per diluted share, for the first quarter of 2023. Adjusted EBITDA(A), a non-GAAP measure, for the first quarter of 2024 was $43.9 million, an increase of $3.0 million, or 7.3%, from the first quarter of 2023. Shipping revenues for the first quarter of 2024 were $117.5 million, an increase of $3.7 million, or 3.3%, compared to the first quarter of 2023. Time charter equivalent (TCE) revenues(B), a non-GAAP measure, for the first quarter of 2024 were $110.1 million, an increase of $6.0 million, or 5.7%, compared to the first quarter of 2023. Total cash and investments(c), a non-GAAP measure, were $97.2 million as of March 31, 2024. On March 14, 2024, the Company's Board of Directors declared a cash dividend of $0.06 per share on the Company's Class A common stock, which was paid on April 10, 2024. In March 2024, the Company exercised its first option to extend the bareboat charter of the Overseas Tampa with its vessel owner for a five-year option period, commencing June 2025 until June 2030.
Sam Norton, OSG's President and CEO, said, "OSG's first quarter results continued the recent trend of steadily improving cashflow and profitability. The 35.7% growth in earnings per share when compared with the first quarter of 2023 is particularly noteworthy, reflecting in one data point the combined effect of numerous initiatives undertaken over the past 12 months to deliver shareholder value. In this light, it is also gratifying that the Board expressed its confidence by declaring a second quarterly dividend at the end of March."
Mr. Norton continued, "Disruptions to historical trading patterns caused by hostilities in the Red Sea, growing geopolitical tensions in the Persian Gulf, and the continuing war in Ukraine have kept international freight markets at or near historical highs. Most analysts consider this market strength to be durable, with positive implications for our Jones Act vessels. High international freight rates indirectly stimulate domestically sourced fuel consumption - and by extension Jones Act transportation demand - since import substitution is constrained by comparatively high freight costs for product shipped over longer distances on foreign flag vessels. So long as international freight rates remain high, "Buy America", when it comes to fuels, will have economic as well as rhetorical implications."
Mr. Norton concluded by stating, "We are pleased with the start we have made to meeting our 2024 financial targets and remain confident that the future offers opportunities to sustain and extend our presence in the business sectors served by OSG's vessels and personnel."
-------------------- -------------------- -------------------- -------------------- --------------------
First Quarter 2024 Results
Shipping revenues were $117.5 million for the first quarter of 2024, an increase of $3.7 million, or 3.3%, compared to the first quarter of 2023. TCE revenues were $110.7 million for the first quarter of 2024, an increase of $6.0 million, or 5.7%, from the first quarter of 2023. The increases primarily resulted from (a) an increase in average daily rates earned by our fleet, (b) an increase in Delaware Bay lightering volumes and (c) a 5-day decrease in repair days. The increase was moderated by a 22-day increase in drydock days.
Operating income for the first quarter of 2024 was $23.5 million compared to operating income of $22.5 million for the first quarter of 2023. Net income for the first quarter of 2024 was $14.6 million, or $0.19 per diluted share, compared with net income of $12.1 million, or $0.14 per diluted share, for the first quarter of 2023.
Adjusted EBITDA was $43.9 million for the first quarter of 2024, an increase of $3.0 million compared with the first quarter of 2023, driven primarily by the increase in TCE revenues.
Conference Call
The Company will host a conference call to discuss its first quarter 2024 results at 9:30 a.m. Eastern Time on Friday, May 10, 2024.
To access the call, participants should dial (844) 850-0546 for U.S. callers and (412) 317-5203 for international callers.
Participants have an option of calling in to listen or watching a live audio webcast and slide presentation available at the Investors section of the Company's website located at www.osg.com/investors. A replay of the webcast will also be available on the website after the completion of the call.
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc. (NYSE:OSG) is a publicly traded company providing liquid bulk transportation services in the U.S. Flag markets. OSG's U.S. Flag fleet consists of Suezmax crude oil tankers, conventional and lightering ATBs, shuttle and conventional MR tankers, and non-Jones Act MR tankers that participate in the U.S. Tanker Security Program.
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 specialized businesses, the impact of our time charter contracts on our future financial performance, and external events including geopolitical conflicts such as the Russia/Ukraine conflict and recent developments in the Middle East. Forward-looking statements are based on our current plans, estimates and projections, and are subject to change based on a number of factors. 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
($ in thousands, except per share amounts)
Three Months Ended
March 31,
----------------------------------------------------------------------------------------------------
2024 2023
------------------------------ ------------------------------
(unaudited) (unaudited)
Shipping Revenues:
Time and bareboat charter revenues $ 95,931 $ 84,140
Voyage charter revenues 21,566 29,651
-------------------- ---------- -------------------- ----------
117,497 113,791
-------------------- ---------- -------------------- ----------
Operating Expenses:
Voyage expenses 6,805 9,056
Vessel expenses 42,038 42,571
Charter hire expenses 16,818 15,737
Depreciation and amortization 17,994 16,048
General and administrative 10,354 7,843
-------------------- ---------- -------------------- ----------
Total operating expenses 94,009 91,255
-------------------- ---------- -------------------- ----------
Operating income 23,488 22,536
Other income, net 1,235 1,080
-------------------- ---------- -------------------- ----------
Income before interest expense and income taxes 24,723 23,616
Interest expense, net (6,782 ) (8,156 )
-------------------- ---------- -------------------- ----------
Income before income taxes 17,941 15,460
Income tax expense (3,300 ) (3,321 )
-------------------- ---------- -------------------- ----------
Net income $ 14,641 $ 12,139
==================== ========== ==================== ==========
Weighted Average Number of Common Shares Outstanding:
71,901,503 82,006,666
Basic - Class A
75,159,109 85,340,906
Diluted - Class A
Per Share Amounts:
$ 0.20 $ 0.15
Basic net income - Class A
Consolidated Balance Sheets
($ in thousands)
March 31, December 31,
2024 2023
------------------------------ ------------------------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 82,203 $ 76,257
Investment security to be held to maturity 14,950 14,900
Voyage receivables, including unbilled of $4,081 and $4,976, net of reserve for credit losses 9,415 17,362
Income tax recoverable 447 407
Other receivables 2,275 3,140
Inventories, prepaid expenses and other current assets 6,682 2,522
-------------------- ---------- -------------------- ----------
115,972 114,588
Total Current Assets
Vessels and other property, less accumulated depreciation and amortization 695,633 699,032
Deferred drydock expenditures, net 45,680 44,827
-------------------- ---------- -------------------- ----------
Total Vessels, Deferred Drydock and Other Property 741,313 743,859
-------------------- ---------- -------------------- ----------
Intangible assets, less accumulated amortization 12,267 13,417
Operating lease right-of-use assets 192,636 172,703
Other assets 34,652 34,317
-------------------- ---------- -------------------- ----------
$ 1,096,840 $ 1,078,884
Total Assets
==================== ========== ==================== ==========
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities $ 53,165 $ 60,911
Current installments of long-term debt 56,205 43,305
Current portion of operating lease liabilities 64,779 65,272
-------------------- ---------- -------------------- ----------
Total Current Liabilities 174,149 169,488
Reserve for uncertain tax positions 295 285
Long-term debt, net 338,215 357,406
Deferred income taxes, net 82,511 79,373
Noncurrent operating lease liabilities 128,191 107,911
Other liabilities 10,605 10,368
-------------------- ---------- -------------------- ----------
733,966 724,831
Total Liabilities
Equity:
Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 90,323,906 and 89,545,535 shares issued; 71,724,847 and 70,946,476 shares outstanding) 903 895
Paid-in additional capital 587,087 588,361
Accumulated deficit (164,534 ) (174,825 )
Treasury stock, 18,599,059 shares at cost (64,380 ) (64,380 )
-------------------- ---------- -------------------- ----------
359,076 350,051
Accumulated other comprehensive income 3,798 4,002
-------------------- ---------- -------------------- ----------
362,874 354,053
Total Equity
-------------------- ---------- -------------------- ----------
Consolidated Statements of Cash Flows
($ in thousands)
Three Months Ended
March 31,
------------------------------------------------------------------------------------------------------------
2024 2023
---------------------------------- ----------------------------------
(unaudited) (unaudited)
Cash Flows from Operating Activities:
Net income $ 14,641 $ 12,139
-------------------- -------------- -------------------- --------------
Items included in net income not affecting cash flows:
17,994 16,048
Depreciation and amortization
283 282
Amortization of debt discount and other deferred financing costs
918 800
Compensation relating to restricted stock awards and stock option grants
3,148 3,287
Deferred income tax expense
-- 370
Interest on finance lease liabilities
16,986 15,892
Non-cash operating lease expense
Payments for drydocking (5,456 ) (1,918 )
Operating lease liabilities (17,133 ) (16,292 )
Changes in operating assets and liabilities, net (6,638 ) 5,088
-------------------- -------------- -------------------- --------------
24,743 35,696
Net cash provided by operating activities
-------------------- -------------- -------------------- --------------
Cash Flows from Investing Activities:
Expenditures for vessels and vessel improvements (5,782 ) (454 )
-------------------- -------------- -------------------- --------------
(5,782 ) (454 )
Net cash used in investing activities
-------------------- -------------- -------------------- --------------
Cash Flows from Financing Activities:
Payments on debt (6,571 ) (5,787 )
Tax withholding on share-based awards (2,184 ) (1,168 )
Dividends paid (4,256 ) --
Deferred financing costs paid for debt amendments (4 ) (40 )
Payments on principal portion of finance lease liabilities -- (1,026 )
Purchases of treasury stock and Class A warrants -- (1,862 )
-------------------- -------------- -------------------- --------------
(13,015 ) (9,883 )
Net cash used in financing activities
-------------------- -------------- -------------------- --------------
Net increase in cash and cash equivalents 5,946 25,359
Cash and cash equivalents at beginning of year 76,257 78,732
-------------------- -------------- -------------------- --------------
Spot and Fixed TCE Rates Achieved and Revenue Days
The following table provides a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months ended March 31, 2024 and the comparable period of 2023. Revenue days in the quarter ended March 31, 2024 totaled 1,731 compared with 1,772 in the prior year quarter.
2024 2023
------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------
For the three months ended March 31, Spot Fixed Spot Fixed
Earnings Earnings Earnings Earnings
------------------------------------ ---------------------------------- ---------------------------------- ---------------------------------- ----------------------------------
Jones Act MR Product Carriers:
$ -- $ 70,975 $ 55,522 $ 64,417
Average rate
-- 866 40 847
Revenue days
Non-Jones Act MR Product Carriers:
$ 27,391 $ 53,451 $ 41,384 $ 33,319
Average rate
182 91 246 14
Revenue days
ATBs:
$ -- $ 47,992 $ -- $ 42,479
Average rate
-- 273 -- 265
Revenue days
Lightering:
$ 126,069 $ -- $ 104,512 $ --
Average rate
91 -- 90 --
Revenue days
Alaska (a):
$ -- $ 64,937 $ -- $ 60,115
Average rate
(a) Excludes one Alaska class vessel currently in layup. Excludes one Alaska class vessel currently in layup.
Fleet Information
As of March 31, 2024, OSG's operating fleet consisted of 21 vessels, 13 of which were owned, with the remaining vessels chartered-in. Vessels chartered-in are on Bareboat Charters.
Vessels Owned Vessels Total at March 31, 2024
Chartered-In
--------------------- ---------------------------------- ---------------------------------------------------------------------------------------------
Vessel Type Number Number Total Vessels Total dwt (3)
----------------------- --------------------- ---------------------------------- -------------------------- ---------------------------
MR Product Carriers (1) 5 8 13 619,854
Crude Oil Tankers (2) 4 -- 4 772,194
Refined Product ATBs 2 -- 2 54,182
Lightering ATBs 2 -- 2 91,112
-------------------- - -------------------- -------------- -------------------- ------ -------------------- -------
(1) Includes two owned shuttle tankers, eight chartered-in tankers, and three non-Jones Act MR tankers that participate in the Tanker Includes two owned shuttle tankers, eight chartered-in tankers, and three non-Jones Act MR tankers that participate in the Tanker Security Program or are on time charter to the U.S. Military Sealift Command. Security Program or are on time charter to the U.S. Military Sealift Command.
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
March 31,
----------------------------------------------------------------------------------------------
2024 2023
--------------------------- ---------------------------
Time charter equivalent revenues $ 110,692 $ 104,735
Add: Voyage expenses 6,805 9,056
-------------------- ------- -------------------- -------
Vessel Operating Contribution
Vessel operating contribution, a non-GAAP measure, is TCE revenues minus vessel expenses and charter hire expenses.
Three Months Ended
March 31,
--------------------------------------------------------------------------------------------
($ in thousands) 2024 2023
----------------------------- -------------------------- --------------------------
Specialized businesses $ 31,269 $ 29,561
Jones Act MR tankers 11,324 9,433
Jones Act ATBs 9,243 7,433
-------------------- ------ -------------------- ------
Vessel operating contribution 51,836 46,427
-------------------- ------ -------------------- ------
Depreciation and amortization 17,994 16,048
General and administrative 10,354 7,843
-------------------- ------ -------------------- ------
(B) EBITDA and Adjusted EBITDA
EBITDA represents net income 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 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 or cash flows from operations as determined in accordance with GAAP. Some of the limitations of EBITDA and Adjusted EBITDA 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 as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA.
Three Months Ended
March 31,
----------------------------------------------------------------------------------------------------
($ in thousands) 2024 2023
----------------------------------------------------------- ---------------------------------- --------------------------
Net income $ 14,641 $ 12,139
Income tax expense 3,300 3,321
Interest expense, net 6,782 8,156
Depreciation and amortization 17,994 16,048
-------------------- -------------- -------------------- ------
EBITDA 42,717 39,664
Amortization classified in charter hire and vessel expenses 239 273
Interest expense classified in charter hire expenses -- 166
Non-cash stock based compensation expense 918 800
-------------------- -------------- -------------------- ------
(C) Total Cash and Investments
($ in thousands) March 31, December 31,
2024 2023
------------------------------------------ ---------------------------------- --------------------------
Cash and cash equivalents $ 82,203 $ 76,233
Restricted cash -- 24
Investment security to be held to maturity 14,950 14,900
-------------------- -------------- -------------------- ------
View source version on businesswire.com: https://www.businesswire.com/news/home/20240510445538/en/
SOURCE: Overseas Shipholding Group, Inc.
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Investor Relations & Media Contact: Susan Allan, Overseas Shipholding Group, Inc. (813) 209-0620 sallan@osg.com
COMTEX_452169498/1006/2024-05-10T07:35:01