Overseas Shipholding Group, Inc. (NYSE: OSG) (the “Company” or
“OSG”), a leading provider of liquid bulk transportation services
in the energy industry for crude oil and petroleum products in the
U.S. Flag markets, today reported results for the first quarter of
2024.
- 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.”
A, B, C Reconciliations of these non-GAAP
financial measures are included in the financial tables attached to
this press release starting on Page 8.
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:
Basic - Class A
71,901,503
82,006,666
Diluted - Class A
75,159,109
85,340,906
Per Share Amounts:
Basic net income - Class A
$
0.20
$
0.15
Diluted net income - Class A
$
0.19
$
0.14
Consolidated Balance Sheets
($ in thousands)
March 31, 2024
December 31, 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
Total Current Assets
115,972
114,588
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
Total Assets
$
1,096,840
$
1,078,884
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
Total Liabilities
733,966
724,831
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
Total Equity
362,874
354,053
Total Liabilities and Equity
$
1,096,840
$
1,078,884
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:
Depreciation and amortization
17,994
16,048
Amortization of debt discount and other
deferred financing costs
283
282
Compensation relating to restricted stock
awards and stock option grants
918
800
Deferred income tax expense
3,148
3,287
Interest on finance lease liabilities
—
370
Non-cash operating lease expense
16,986
15,892
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
Net cash provided by operating
activities
24,743
35,696
Cash Flows from Investing Activities:
Expenditures for vessels and vessel
improvements
(5,782
)
(454
)
Net cash used in investing activities
(5,782
)
(454
)
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
)
Net cash used in financing activities
(13,015
)
(9,883
)
Net increase in cash and cash
equivalents
5,946
25,359
Cash and cash equivalents at beginning of
year
76,257
78,732
Cash and cash equivalents at end of
year
$
82,203
$
104,091
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 Earnings
Fixed Earnings
Spot Earnings
Fixed Earnings
Jones Act MR Product Carriers:
Average rate
$
—
$
70,975
$
55,522
$
64,417
Revenue days
—
866
40
847
Non-Jones Act MR Product Carriers:
Average rate
$
27,391
$
53,451
$
41,384
$
33,319
Revenue days
182
91
246
14
ATBs:
Average rate
$
—
$
47,992
$
—
$
42,479
Revenue days
—
273
—
265
Lightering:
Average rate
$
126,069
$
—
$
104,512
$
—
Revenue days
91
—
90
—
Alaska (a):
Average rate
$
—
$
64,937
$
—
$
60,115
Revenue days
—
228
—
270
(a)
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 Chartered-In
Total at March 31,
2024
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
Total Operating Fleet
13
8
21
1,537,342
(1)
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.
(2)
Includes two crude oil tankers doing
business in Alaska, one crude oil tanker, Alaskan Frontier,
purchased in November 2023 from BP Oil Shipping Company, USA and
has been in cold layup in Malaysia since 2019, and one crude oil
tanker in service on the U.S. East Coast.
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
Shipping revenues
$
117,497
$
113,791
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
Operating income
$
23,488
$
22,536
(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
Adjusted EBITDA
$
43,874
$
40,903
(C) Total Cash and Investments
($ in thousands)
March 31, 2024
December 31, 2023
Cash and cash equivalents
$
82,203
$
76,233
Restricted cash
—
24
Investment security to be held to
maturity
14,950
14,900
Total cash and investments
$
97,153
$
91,157
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240510445538/en/
Investor Relations & Media Contact: Susan Allan,
Overseas Shipholding Group, Inc. (813) 209-0620 sallan@osg.com
Grafico Azioni Overseas Shipholding (NYSE:OSG)
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Grafico Azioni Overseas Shipholding (NYSE:OSG)
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