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United
States
Securities
and Exchange Commission
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
August 9, 2023
Date of Report (Date
of earliest event reported)
International Seaways, Inc.
(Exact Name of Registrant
as Specified in Charter)
1-37836-1
Commission File Number
Marshall Islands |
|
98-0467117 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
600 Third Avenue,
39th Floor
New York, New York
10016
(Address of Principal
Executive Offices) (Zip Code)
Registrant's telephone
number, including area code (212) 578-1600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
Symbol |
Name of each exchange on which registered |
Common Stock (no par value) |
INSW |
New York Stock Exchange |
Rights to Purchase Common Stock |
N/A true |
New York Stock Exchange |
Section
2 – Financial Information
| Item 2.02 | Results
of Operations and Financial Condition. |
The following information, including the Exhibit to this
Form 8-K, is being furnished pursuant to Item 2.02 — Results of Operations and Financial Condition of Form 8-K. This information
is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated
by reference into any Securities Act of 1933 registration statements.
On August 9, 2023, International Seaways, Inc. issued
a press release, a copy of which is attached hereto as Exhibit 99.1, announcing second quarter 2023 earnings.
Section
7 – Regulation FD
| Item 7.01 | Regulation FD Disclosure. |
The following information, including the Exhibit to this
Form 8-K, is being furnished pursuant to Item 7.01 — Regulation FD Disclosure
of Form 8-K. This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act
of 1934 and is not incorporated by reference into any Securities Act of 1933 registration statements.
On August 8, 2023, INSW’s Board of Directors declared
a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.30 per share of common stock for the
third quarter of 2023. Both such dividends are payable on September 27, 2023 to shareholders of record at the close of business on September
13, 2023.
Section 9 – Financial Statements
and Exhibits
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Pursuant to General Instruction B.2 of Form 8-K, the
following exhibit is furnished with this Form 8-K.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
INTERNATIONAL SEAWAYS, INC. |
|
(Registrant) |
|
|
|
|
Date: August 9, 2023 |
By |
|
/s/ James D. Small III |
|
|
Name: |
James D. Small III
|
|
|
Title: |
Chief Administrative Officer, Senior Vice President, Secretary and General Counsel |
EXHIBIT
INDEX
Exhibit 99.1
INTERNATIONAL SEAWAYS REPORTS
SECOND QUARTER 2023 RESULTS
New
York, NY – August 9, 2023– International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”),
one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products, today reported
results for the second quarter 2023.
HIGHLIGHTS & RECENT DEVELOPMENTS
| · | Net
income for the second quarter was approximately $154 million, or $3.11 per diluted share,
compared to net income of approximately $69 million, or $1.38 per diluted share, in the second
quarter of 2022. Cumulative net income over the last twelve months is approximately $658
million. |
| · | Adjusted
EBITDA(A) for the second quarter was approximately $205 million. |
| · | Total
liquidity was approximately $493 million as of June 30, 2023, including cash and short-term
investments(B) of $236 million and $257 million of undrawn revolver capacity. |
| · | Returns
to Shareholders: |
| · | Paid
a cumulative $1.62 per share in regular and supplemental dividends in June 2023. |
| · | Repurchased
and retired 366,483 shares for approximately $14 million, representing an average price of
$38.03 per share. |
| · | Declared
a combined dividend of $1.42 per share composed of a supplemental dividend of $1.30 per share
in addition to regular quarterly cash dividend of $0.12 per share to be paid in September
2023. |
| · | Cumulative
cash returns of $316 million paid over the last twelve months following the combined dividend
in September 2023 represents 48% of net income. |
| · | Increased
authorization on the current share buyback program from $26 million to $50 million. |
| · | Balance
Sheet Enhancements: |
| · | Prepaid
approximately $75 million of outstanding debt during the second quarter of 2023, which includes: |
| · | Approximately
$46 million for two vessels under sale-leaseback financing arrangements, which were incurring
an interest margin of 390 bps. |
| · | Approximately
$29 million of the principal outstanding of the $750 Million Credit Facility, which unencumbered
a modern Suezmax vessel. |
| · | As
of July 3, 2023, the Company has 30 unencumbered vessels. |
| · | In
connection with cash flows generated during the second quarter, the Company intends to evaluate
further prepayments within its debt portfolio of approximately $50 million. |
| · | Fleet
Optimization Program: |
| · | Contracted
for two, scrubber-fitted, dual-fuel (LNG) ready, LR1 newbuildings for approximately $115
million in aggregate for delivery in late 2025. Upon delivery, the vessels are expected to
enter into our jointly-owned, Panamax International Pool, that has historically outperformed
the LR1 market. |
| · | Increased
contracted revenues to $352 million by entering into a new time charter agreement on an Aframax
for three years. |
| · | Took
delivery of the third and final dual-fuel (LNG) VLCC. These vessels are employed on long-term
time charters with an oil major and financed under sale and leaseback arrangements with a
fixed interest rate of approximately 425 bps. |
“We generated strong earnings for the fifth
consecutive quarter, built on our track record of returning substantial capital to shareholders, and took steps to further enhance our
balance sheet during the second quarter,” said Lois K. Zabrocky, International Seaways’ President and CEO. “With the
combined dividend of $1.62 per share and $14 million in share repurchases in the second quarter, cumulative returns to shareholders represent
over $190 million in the first half of the year. We are pleased to announce another combined dividend of $1.42 per share and increase
to our share buyback authorization. We plan to continue executing our balanced capital allocation strategy to maximize long-term shareholder
value.”
Ms. Zabrocky added, “With our diverse fleet
of crude and product tankers, expanded scale, and substantial operating leverage, we continue to take advantage of the strong market,
as evidenced by healthy third quarter bookings to-date. Our optimism is fueled by attractive supply and demand fundamentals, underpinned
by trends in the global energy trade, as Russian oil displacement has resulted in increases in ton-mile demand and tanker utilization.
Economic activity has remained strong, and oil demand forecasts signal a pickup in the second half of the year. These factors, combined
with an historically low orderbook and an ageing global fleet, drive our expectation for strong tanker earnings for the foreseeable future.”
Jeff Pribor, the Company’s CFO stated,
“During the second quarter, we drew on all aspects of our balanced approach to capital allocation, which consisted of returns to
shareholders, investment in the fleet, and debt repayment. We have now prepaid $172 million of debt this year, further lowering our breakeven
levels to among the lowest in the industry. Looking toward the remainder of the year, we maintain considerable financial strength, evidenced
by nearly $500 million in total liquidity and a net-loan-to-value ratio of 22% at quarter’s end. With a cash break even below $16,000
per day, Seaways is well-positioned to generate incremental free cash flow and continue returning significant capital to shareholders.”
SECOND QUARTER 2023 RESULTS
Net income for the second quarter of 2023 was
$153.8 million, or $3.11 per diluted share, compared to net income of $69.0 million, or $1.38 per diluted share, for the second quarter
of 2022. Net income for the quarter reflects the write-off of deferred finance costs aggregating $0.6 million. Net income excluding these
items was $154.4 million, or $3.12 per diluted share. The increase in net income for the second quarter of 2023 was primarily driven
by a $102.8 million increase in TCE revenues(C) as a result of the effects of sanctions on Russian oil that disrupted trading
patterns leading to longer voyages and higher tanker utilization coupled with higher oil demand of approximately three million barrels
per day.
Shipping revenues for the second quarter were
$292.2 million, compared to $188.2 million for the second quarter of 2022. Consolidated TCE revenues for the second quarter were $288.3
million, compared to $185.5 million for the second quarter of 2022.
Adjusted EBITDA for the second quarter was $205.1
million, compared to $111.7 million for the second quarter of 2022.
Crude Tankers
Shipping revenues for the Crude Tankers segment
were $152.2 million for the second quarter of 2023, compared to $62.1 million for the second quarter of 2022. TCE revenues were $148.9
million for the second quarter, compared to $59.5 million for the second quarter of 2022. This increase was primarily attributable to
substantially higher spot rates as the average spot earnings of the VLCC, Suezmax and Aframax sectors were approximately $52,300, $61,300
and $53,500 per day, respectively, compared with approximately $16,400, $23,700 and $34,100 per day, respectively, during the second
quarter of 2022.
Product Carriers
Shipping revenues for the Product Carriers segment
were $140.0 million for the second quarter, compared to $126.1 million for the second quarter of 2022. TCE revenues were $139.4 million
for the second quarter, compared to $126.1 million for the second quarter of 2022. This increase is attributable to an increase in LR1
spot rates with average earnings of approximately $63,600 per day, in the second quarter of 2023 compared with approximately $25,900
per day, in the second quarter of 2022. This rate increase is offset by lower revenue days in the MR sector of approximately 142 days
primarily reflecting the sale of three older MRs and slightly lower average spot earnings of approximately $28,300 per day in the second
quarter of 2023, compared to $30,500 per day during the second quarter of 2022.
FIRST HALF 2023 RESULTS
Net income for the first half of 2023 was $326.4
million, or $6.59 per diluted share, compared to net income of $56.0 million, or $1.12 per diluted share, for the first half of 2022.
Shipping revenues for the first half of 2023
were $579.3 million, compared to $289.7 million for the first half of 2022. Consolidated TCE revenues for the first half of 2023 were
$571.7 million, compared to $283.5 million for the first half of 2022.
Adjusted EBITDA for the first half of 2023 was
$414.0 million, compared to $137.7 million for the first half of 2022.
Crude Tankers
TCE revenues for the Crude Tankers segment were
$278.2 million for the first half of 2023, compared to $95.9 million for the first half of 2022. Shipping revenues for the Crude Tankers
segment were $284.6 million for the first half of 2023, compared to $101.7 million for the first half of 2022.
Product Carriers
TCE revenues for the Product Carriers segment
were $293.5 million for the first half of 2023 compared to $187.6 million for the first half of 2022. Shipping revenues for the Product
Carriers segment were $294.8 million for the first half of 2023, compared to $188.0 million for the first half of 2022.
DELEVERAGING INITIATIVES
During the second quarter of 2023, the Company
prepaid approximately $75 million of debt. The Company prepaid approximately $46 million in connection with exercising purchase options
on two vessels under sale-leaseback agreements with an interest margin of 390 basis points. The vessels were delivered on July 3, 2023,
which created a prepaid asset of $46 million with a corresponding current liability as of the balance sheet date. The Company also prepaid
approximately $29 million on the $750 Million Credit Facility and obtained the release of one 2017-built Suezmax vessel from the collateral
package.
For the seven months of 2023, the Company has
extinguished approximately $172 million of debt. In addition to the aforementioned prepayments, the Company amended the $750 Million
Facility, which included a prepayment of $97 million on the term loan, an increase in the capacity of the revolving credit facility by
$40 million and a release of 22 vessels from the collateral package. As of July 3, 2023, the Company has 30 unencumbered vessels.
FLEET OPTIMIZATION PROGRAM
The Company entered into contracts to build two,
scrubber-fitted, dual-fuel (LNG) ready, LR1 vessels in Korea with K Shipbuilding Co, Ltd. The vessels are expected to be delivered in
the second half of 2025 at a contracted price of approximately $115 million in aggregate. Upon delivery, these vessels are expected to
deliver into our niche, Panamax International Pool, which has consistently outperformed the market.
The last of three dual-fuel VLCCs in the Company’s
newbuilding program was delivered in May 2023. The first and second dual-fuel VLCC’s delivered in March and April, respectively.
The vessels were ordered for an aggregate contract price of $288 million, which are financed under sale leaseback arrangements. The vessels
have commenced long-term time charters with an oil major for the next seven years at a base rate of $31,000 per day plus a profit share
component. For the second quarter of 2023, the time charter equivalent rate earned for these three VLCCs, including the profit share
component, was approximately $43,000 per day.
In the second quarter, the Company entered into
a time charter agreement for three years on a 2017-built Aframax that commenced in late July 2023. During 2023, the Company has entered
into five time charter agreements: the aforementioned Aframax, two 2008-built MRs, one 2011-built MR and one 2012-built Suezmax. The
charters have durations of two to three years and have increased contracted future revenues to approximately $352 million remaining in
time charter agreements from July 1, 2023 through charter expiry, excluding any applicable profit share.
In December 2022, the Company exercised its purchase
options on two 2009-built Aframax vessels under sale leaseback arrangement, which were accounted for as operating leases prior to declaration
of the options. The aggregate purchase price, net of prepaid charter hire of both vessels was approximately $41 million, representing
a discount of approximately 45% to the market value of these vessels. One vessel was delivered in March 2023 while the other was delivered
in April 2023.
In the first quarter of 2023, the Company sold
a 2008-built MR, which generated approximately $10 million in net proceeds after debt repayment.
RETURNING CASH TO SHAREHOLDERS
In June 2023, the Company paid a combined dividend
of $1.62 per share of common stock, composed of a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend
of $1.50 per share. For the six months ended June 30, 2023, the Company has paid combined dividends of approximately $3.62 per share.
The Company’s Board of Directors declared
a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.30 per share of common stock on August
8, 2023. Both dividends will be paid on September 27, 2023, to shareholders with a record date at the close of business on September
13, 2023.
During the second quarter of 2023, the Company
repurchased and retired 366,483 shares of its common stock in open market purchases, at an average price of $38.03 at an aggregate cost
of approximately $14 million.
The Company’s Board of Directors authorized
an increase of the share repurchase program to $50 million from the remaining $26 million. The Company’s current share repurchase
program expires at the end of 2023.
CONFERENCE CALL
The Company will host a conference call to discuss
its second quarter 2023 results at 9:00 a.m. Eastern Time (“ET”) on Wednesday, August 9, 2023. To access the call, participants
should dial (833) 470-1428 for domestic callers and (929) 526-1599 for international callers and entering 221822. 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 https://www.intlseas.com.
An audio replay of the conference call will be
available until August 16, 2023, by dialing (866) 813-9403 for domestic callers and +44 204 525 0658 for international callers, and entering
Access Code 318908.
ABOUT INTERNATIONAL SEAWAYS, INC.
International Seaways, Inc. (NYSE: INSW) is one
of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International
Flag markets. International Seaways owns and operates a fleet of 75 vessels, including 13 VLCCs, 13 Suezmaxes, five Aframaxes/LR2s, seven
LR1s and 37 MR tankers. International Seaways has an experienced team committed to the very best operating practices and the highest
levels of customer service and operational efficiency. International Seaways is headquartered in New York City, NY. Additional information
is available at https://www.intlseas.com.
Forward-Looking Statements
This release contains forward-looking statements.
In addition, the Company may make or approve certain statements in future filings with the U.S. 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
facts should be considered forward-looking statements. These matters or statements may relate plans to issue dividends, the Company’s
prospects, including statements regarding vessel acquisitions, expected synergies, trends in the tanker markets, and possibilities of
strategic alliances and investments. Forward-looking statements are based on the Company’s 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 the Annual Report on Form 10-K for 2022 for the Company, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and
in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update
or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to
the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained
in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.
Investor Relations & Media Contact:
Tom Trovato, International Seaways, Inc.
(212) 578-1602
ttrovato@intlseas.com
Category: Earnings
Consolidated
Statements of Operations
($
in thousands, except per share amounts)
| |
Three Months Ended | | |
Six Months Ended | |
| |
June 30, | | |
June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
Shipping Revenues: | |
| | | |
| | | |
| | | |
| | |
Pool revenues | |
$ | 247,591 | | |
$ | 164,727 | | |
$ | 507,169 | | |
$ | 248,489 | |
Time and bareboat charter revenues | |
| 26,112 | | |
| 8,133 | | |
| 39,262 | | |
| 14,308 | |
Voyage charter revenues | |
| 18,500 | | |
| 15,337 | | |
| 32,902 | | |
| 26,882 | |
Total Shipping
Revenues | |
| 292,203 | | |
| 188,197 | | |
| 579,333 | | |
| 289,679 | |
| |
| | | |
| | | |
| | | |
| | |
Operating Expenses: | |
| | | |
| | | |
| | | |
| | |
Voyage expenses | |
| 3,868 | | |
| 2,658 | | |
| 7,678 | | |
| 6,165 | |
Vessel expenses | |
| 65,151 | | |
| 59,563 | | |
| 123,920 | | |
| 119,880 | |
Charter hire expenses | |
| 10,502 | | |
| 7,693 | | |
| 19,302 | | |
| 15,002 | |
Depreciation and amortization | |
| 32,445 | | |
| 27,256 | | |
| 61,993 | | |
| 54,256 | |
General and administrative | |
| 11,522 | | |
| 10,847 | | |
| 22,768 | | |
| 21,013 | |
Third-party debt modification fees | |
| 13 | | |
| 900 | | |
| 420 | | |
| 1,087 | |
Loss/(gain) on disposal of vessels and
other assets, net of impairments | |
| 26 | | |
| (8,102 | ) | |
| (10,722 | ) | |
| (9,478 | ) |
Total operating expenses | |
| 123,527 | | |
| 100,815 | | |
| 225,359 | | |
| 207,925 | |
Income from vessel operations | |
| 168,676 | | |
| 87,382 | | |
| 353,974 | | |
| 81,754 | |
Equity in results of affiliated companies | |
| - | | |
| (5,162 | ) | |
| - | | |
| 435 | |
Operating income | |
| 168,676 | | |
| 82,220 | | |
| 353,974 | | |
| 82,189 | |
Other income/(expense) | |
| 3,381 | | |
| (574 | ) | |
| 7,662 | | |
| (800 | ) |
Income before interest expense and income taxes | |
| 172,057 | | |
| 81,646 | | |
| 361,636 | | |
| 81,389 | |
Interest expense | |
| (17,914 | ) | |
| (12,558 | ) | |
| (34,861 | ) | |
| (25,298 | ) |
Income before income taxes | |
| 154,143 | | |
| 69,088 | | |
| 326,775 | | |
| 56,091 | |
Income tax provision | |
| (381 | ) | |
| (52 | ) | |
| (380 | ) | |
| (56 | ) |
Net income | |
$ | 153,762 | | |
$ | 69,036 | | |
$ | 326,395 | | |
$ | 56,035 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted Average Number of Common Shares Outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 49,029,784 | | |
| 49,602,181 | | |
| 49,083,897 | | |
| 49,586,847 | |
Diluted | |
| 49,404,837 | | |
| 49,878,645 | | |
| 49,525,282 | | |
| 49,754,876 | |
| |
| | | |
| | | |
| | | |
| | |
Per Share Amounts: | |
| | | |
| | | |
| | | |
| | |
Basic net income per share | |
$ | 3.13 | | |
$ | 1.39 | | |
$ | 6.64 | | |
$ | 1.13 | |
Diluted net income per share | |
$ | 3.11 | | |
$ | 1.38 | | |
$ | 6.59 | | |
$ | 1.12 | |
Consolidated
Balance Sheets
($
in thousands)
| |
June 30, | | |
December 31, | |
| |
2023 | | |
2022 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 116,023 | | |
$ | 243,744 | |
Short-term investments | |
| 120,000 | | |
| 80,000 | |
Voyage receivables | |
| 241,088 | | |
| 289,775 | |
Other receivables | |
| 12,840 | | |
| 12,583 | |
Inventories | |
| 629 | | |
| 531 | |
Prepaid expenses and other current assets | |
| 15,079 | | |
| 8,995 | |
Advance payment on debt | |
| 46,427 | | |
| - | |
Current portion of derivative asset | |
| 7,595 | | |
| 6,987 | |
Total Current Assets | |
| 559,681 | | |
| 642,615 | |
| |
| | | |
| | |
Vessels and other property, less accumulated depreciation | |
| 1,977,639 | | |
| 1,680,010 | |
Vessels construction in progress | |
| - | | |
| 123,940 | |
Deferred drydock expenditures, net | |
| 69,887 | | |
| 65,611 | |
Operating lease right-of-use assets | |
| 6,308 | | |
| 8,471 | |
Finance lease right-of-use assets | |
| - | | |
| 44,391 | |
Pool working capital deposits | |
| 32,521 | | |
| 35,593 | |
Long-term derivative asset | |
| 4,462 | | |
| 4,662 | |
Other assets | |
| 5,158 | | |
| 10,041 | |
Total Assets | |
$ | 2,655,656 | | |
$ | 2,615,334 | |
| |
| | | |
| | |
LIABILITIES AND EQUITY | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable, accrued expenses and other current liabilities | |
$ | 47,044 | | |
$ | 51,069 | |
Current portion of operating lease liabilities | |
| 452 | | |
| 1,596 | |
Current portion of finance lease liabilities | |
| - | | |
| 41,870 | |
Current installments of long-term debt | |
| 199,785 | | |
| 162,854 | |
Total Current Liabilities | |
| 247,281 | | |
| 257,389 | |
Long-term operating lease liabilities | |
| 7,539 | | |
| 7,740 | |
Long-term debt | |
| 778,266 | | |
| 860,578 | |
Other liabilities | |
| 2,296 | | |
| 1,875 | |
Total Liabilities | |
| 1,035,382 | | |
| 1,127,582 | |
| |
| | | |
| | |
Equity: | |
| | | |
| | |
Total Equity | |
| 1,620,274 | | |
| 1,487,752 | |
Total Liabilities
and Equity | |
$ | 2,655,656 | | |
$ | 2,615,334 | |
Consolidated
Statements of Cash Flows
($
in thousands)
| |
Six Months
Ended June 30, | |
| |
2023 | | |
2022 | |
| |
(Unaudited) | | |
(Unaudited) | |
Cash Flows from Operating Activities: | |
| | | |
| | |
Net income | |
$ | 326,395 | | |
$ | 56,035 | |
Items included in net income not affecting cash flows: | |
| | | |
| | |
Depreciation and amortization | |
| 61,993 | | |
| 54,256 | |
Loss on write-down of vessels and other
assets | |
| — | | |
| 1,697 | |
Amortization of debt discount and other
deferred financing costs | |
| 3,128 | | |
| 1,955 | |
Amortization of time charter hire contracts
acquired | |
| — | | |
| 684 | |
Deferred financing costs write-off | |
| 721 | | |
| 261 | |
Stock compensation | |
| 3,873 | | |
| 2,728 | |
Equity in results of affiliated companies | |
| 20 | | |
| (10,017 | ) |
Other – net | |
| (1,560 | ) | |
| (327 | ) |
Items included in net income related to investing and financing
activities: | |
| | | |
| | |
Gain on disposal of vessels and other
assets, net | |
| (10,722 | ) | |
| (11,175 | ) |
Loss on sale of investments in affiliated
companies | |
| — | | |
| 9,512 | |
Cash distributions from affiliated companies | |
| — | | |
| 2,250 | |
Payments for drydocking | |
| (18,992 | ) | |
| (25,789 | ) |
Insurance claims proceeds related to vessel operations | |
| 2,698 | | |
| 2,035 | |
Changes in operating assets and liabilities | |
| 46,902 | | |
| (69,260 | ) |
Net cash provided
by operating activities | |
| 414,456 | | |
| 14,845 | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Expenditures for vessels, vessel improvements and vessels
under construction | |
| (188,068 | ) | |
| (53,801 | ) |
Proceeds from disposal of vessels and other property, net | |
| 20,070 | | |
| 79,614 | |
Expenditures for other property | |
| (586 | ) | |
| (509 | ) |
Investments in short-term time deposits | |
| (175,000 | ) | |
| — | |
Proceeds from maturities of short-term time deposits | |
| 135,000 | | |
| — | |
Pool working capital deposits | |
| — | | |
| (838 | ) |
Proceeds from sale of investments in
affiliated companies | |
| — | | |
| 140,069 | |
Net cash (used
in)/provided by investing activities | |
| (208,584 | ) | |
| 164,535 | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Issuance of debt, net of issuance and deferred financing costs | |
| — | | |
| 641,050 | |
Repayments of debt | |
| (192,856 | ) | |
| (717,913 | ) |
Proceeds from sale and leaseback financing, net of issuance
and deferred financing costs | |
| 169,717 | | |
| 60,076 | |
Payments and advance payment on sale and leaseback financing
and finance lease | |
| (112,786 | ) | |
| (18,816 | ) |
Payments of deferred financing costs | |
| (1,146 | ) | |
| (556 | ) |
Repurchase of common stock | |
| (13,948 | ) | |
| — | |
Cash dividends paid | |
| (177,565 | ) | |
| (8,941 | ) |
Cash paid to tax authority upon vesting
or exercise of stock-based compensation | |
| (5,009 | ) | |
| (1,493 | ) |
Net cash used
in financing activities | |
| (333,593 | ) | |
| (46,593 | ) |
Net (decrease)/increase in cash, cash equivalents and restricted
cash | |
| (127,721 | ) | |
| 132,787 | |
Cash, cash equivalents and restricted
cash at beginning of year | |
| 243,744 | | |
| 98,933 | |
Cash, cash equivalents and restricted
cash at end of period | |
$ | 116,023 | | |
$ | 231,720 | |
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 months ended June 30, 2023 and the comparable period of 2022. Revenue
days in the quarter ended June 30, 2023 totaled 6,742 compared with 6,688 in the prior year quarter. A summary fleet list by vessel class
can be found later in this press release. The information in these tables excludes commercial pool fees/commissions averaging approximately
$859 and $643 per day for the three months ended June 30, 2023 and 2022, respectively.
| |
Three
Months Ended June 30, 2023 | | |
Three
Months Ended June 30, 2022 | |
| |
Spot | | |
Fixed | | |
Total | | |
Spot | | |
Fixed | | |
Total | |
Crude Tankers | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
VLCC | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 52,307 | | |
$ | 43,056 | | |
| | | |
$ | 16,441 | | |
$ | 43,903 | | |
| | |
Number of Revenue Days | |
| 781 | | |
| 294 | | |
| 1,075 | | |
| 808 | | |
| 91 | | |
| 899 | |
Suezmax | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 61,267 | | |
$ | 30,990 | | |
| | | |
$ | 23,684 | | |
$ | 26,698 | | |
| | |
Number of Revenue Days | |
| 988 | | |
| 181 | | |
| 1,169 | | |
| 963 | | |
| 91 | | |
| 1,054 | |
Aframax | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 53,482 | | |
$ | - | | |
| | | |
$ | 34,116 | | |
$ | - | | |
| | |
Number of Revenue
Days | |
| 364 | | |
| - | | |
| 364 | | |
| 326 | | |
| - | | |
| 326 | |
Total Crude Tankers Revenue
Days | |
| 2,133 | | |
| 475 | | |
| 2,608 | | |
| 2,097 | | |
| 182 | | |
| 2,279 | |
Product Carriers | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aframax (LR2) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 25,594 | | |
$ | 17,829 | | |
| | | |
$ | - | | |
$ | 17,143 | | |
| | |
Number of Revenue Days | |
| 41 | | |
| 50 | | |
| 91 | | |
| - | | |
| 91 | | |
| 91 | |
Panamax (LR1) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 63,608 | | |
$ | - | | |
| | | |
$ | 25,910 | | |
$ | - | | |
| | |
Number of Revenue Days | |
| 780 | | |
| - | | |
| 780 | | |
| 787 | | |
| - | | |
| 787 | |
MR | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | 28,331 | | |
$ | 20,819 | | |
| | | |
$ | 30,463 | | |
$ | 19,175 | | |
| | |
Number of Revenue Days | |
| 2,954 | | |
| 309 | | |
| 3,263 | | |
| 3,386 | | |
| 19 | | |
| 3,405 | |
Handy | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Average TCE Rate | |
$ | - | | |
$ | - | | |
| | | |
$ | 19,521 | | |
$ | - | | |
| | |
Number of Revenue
Days | |
| - | | |
| - | | |
| - | | |
| 126 | | |
| - | | |
| 126 | |
Total Product Carriers Revenue
Days | |
| 3,775 | | |
| 359 | | |
| 4,134 | | |
| 4,299 | | |
| 110 | | |
| 4,409 | |
Total Revenue Days | |
| 5,908 | | |
| 834 | | |
| 6,742 | | |
| 6,396 | | |
| 292 | | |
| 6,688 | |
During the
2023 and 2022 periods, each of the Company’s LR1s participated in the Panamax International Pool and transported crude oil
cargoes exclusively.
Fleet Information
As of June 30, 2023, INSW’s fleet totaled 74 vessels, of which
59 were owned and 15 were chartered in.
| |
| | |
| | |
Total at June 30, 2023 | |
Vessel Fleet and Type | |
Vessels Owned | | |
Vessels Chartered-in1 | | |
Total
Vessels | | |
Total Dwt | |
Operating Fleet | |
| | | |
| | | |
| | | |
| | |
VLCC | |
| 4 | | |
| 9 | | |
| 13 | | |
| 3,910,572 | |
Suezmax | |
| 13 | | |
| - | | |
| 13 | | |
| 2,061,754 | |
Aframax | |
| 3 | | |
| 1 | | |
| 4 | | |
| 452,375 | |
Crude Tankers | |
| 20 | | |
| 10 | | |
| 30 | | |
| 6,424,701 | |
| |
| | | |
| | | |
| | | |
| | |
LR2 | |
| - | | |
| 1 | | |
| 1 | | |
| 112,691 | |
LR1 | |
| 6 | | |
| - | | |
| 6 | | |
| 447,702 | |
MR | |
| 33 | | |
| 4 | | |
| 37 | | |
| 1,853,675 | |
Product Carriers | |
| 39 | | |
| 5 | | |
| 44 | | |
| 2,414,068 | |
| |
| | | |
| | | |
| | | |
| | |
Total Operating Fleet | |
| 59 | | |
| 15 | | |
| 74 | | |
| 8,838,769 | |
(1) Includes bareboat charters, but excludes vessels chartered in
where the duration of the charter was one year or less at inception.
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 may provide certain 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) EBITDA and Adjusted EBITDA
EBITDA represents net income before interest expense, income taxes,
and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain 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 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 significant 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 captions of other companies due to differences in methods of calculation. The following table reconciles
net income as reflected in the condensed consolidated statements of operations, to EBITDA and Adjusted EBITDA:
| |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
($ in thousands) | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Net income | |
$ | 153,762 | | |
$ | 69,036 | | |
$ | 326,395 | | |
$ | 56,035 | |
Income tax provision | |
| 381 | | |
| 52 | | |
| 380 | | |
| 56 | |
Interest expense | |
| 17,914 | | |
| 12,558 | | |
| 34,861 | | |
| 25,298 | |
Depreciation and amortization | |
| 32,445 | | |
| 27,256 | | |
| 61,993 | | |
| 54,256 | |
EBITDA | |
| 204,502 | | |
| 108,902 | | |
| 423,629 | | |
| 135,645 | |
Amortization of time charter contracts acquired | |
| - | | |
| 344 | | |
| - | | |
| 684 | |
Third-party debt modification fees | |
| 13 | | |
| 900 | | |
| 420 | | |
| 1,087 | |
Loss/(gain) on disposal of vessels and other assets, net of impairments | |
| 26 | | |
| (8,102 | ) | |
| (10,722 | ) | |
| (9,478 | ) |
Loss on sale of investments in affiliated companies | |
| - | | |
| 9,512 | | |
| - | | |
| 9,512 | |
Write-off of deferred financing costs | |
| 555 | | |
| 128 | | |
| 721 | | |
| 261 | |
Adjusted EBITDA | |
$ | 205,096 | | |
$ | 111,684 | | |
$ | 414,048 | | |
$ | 137,711 | |
(B) Cash
| |
June 30, | | |
December 31, | |
($ in thousands) | |
2023 | | |
2022 | |
Cash and cash equivalents | |
$ | 116,023 | | |
$ | 243,744 | |
Short-term investments | |
| 120,000 | | |
| 80,000 | |
Total Cash | |
$ | 236,023 | | |
$ | 323,744 | |
(C) 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. Time charter equivalent 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 follow:
| |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
($ in thousands) | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Time charter equivalent revenues | |
$ | 288,335 | | |
$ | 185,539 | | |
$ | 571,655 | | |
$ | 283,514 | |
Add: Voyage expenses | |
| 3,868 | | |
| 2,658 | | |
| 7,678 | | |
| 6,165 | |
Shipping revenues | |
$ | 292,203 | | |
$ | 188,197 | | |
$ | 579,333 | | |
$ | 289,679 | |
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