- 3Q22 EPS of $6.89
- 3Q22 Net Income and EBITDA of $266.0
million and $377.4 million,
respectively
- Year-over-year decrease in consolidated operating income driven
primarily by lower volume in China
service
- Repurchased approximately 1.1 million shares in 3Q22
- Signed $1 billion in vessel
construction contracts for three new LNG-ready Aloha Class
containerships
HONOLULU, Nov. 2, 2022
/PRNewswire/ -- Matson, Inc. ("Matson" or the "Company")
(NYSE: MATX), a leading U.S. carrier in the Pacific, today reported
net income of $266.0 million, or
$6.89 per diluted share, for the
quarter ended September 30, 2022. Net income for the
quarter ended September 30, 2021 was $283.2 million, or $6.53 per diluted share. Consolidated
revenue for the third quarter 2022 was $1,114.8 million compared with $1,071.6 million for the third quarter
2021.
![Matson Logo. (PRNewsFoto/Matson) Matson Logo. (PRNewsFoto/Matson)](https://mma.prnewswire.com/media/128194/matson_logo.jpg)
"Matson's differentiated ocean services performed well in the
third quarter 2022, but the Company achieved lower year-over-year
consolidated operating income as we saw lower demand for expedited
ocean services in the Transpacific tradelane compared to the high
levels of freight demand during the pandemic in the year ago
period," said Chairman and Chief Executive Officer Matt Cox. "Within Ocean Transportation,
our CLX, CLX+ and CCX services achieved lower year-over-year
volumes which contributed to the decline in our consolidated
operating income. As we mentioned on our second quarter
earnings call, we believed rates had likely peaked in the
Transpacific tradelane for this cycle and would be in a
transitional decline from the pandemic highs. Additionally,
due to less demand for expedited ocean services and easing port
congestion in Southern California,
we decided to end our temporary CCX service in early September,
about six weeks earlier than expected. Currently, we expect
the next two quarters to be challenging in the Transpacific
tradelane as retailers' inventories adjust to current consumer
demand levels and as ocean liners reduce vessel capacity to meet
lower demand levels. To this end, for the remainder of this
year and into the first quarter of 2023, we expect to experience
lower year-over-year freight demand and a lower rate environment
for our CLX and CLX+ services, but we expect to continue to earn a
significant rate premium to the Shanghai Containerized Freight
Index due to its differentiated, reliable and fast ocean
services."
Mr. Cox added, "In our domestic ocean tradelanes, we saw
continued strength in Alaska with
higher year-over-year volume and lower volumes in Hawaii and Guam compared to the year ago period.
The year-over-year decline in Hawaii volume was impacted by the pandemic
spike in demand experienced in the year ago period, and volumes for
the quarter were higher than the pre-pandemic third quarter of
2019. In Logistics, operating income increased year-over-year
with strength across all of the business lines as we continued to
see favorable supply and demand fundamentals in our core
markets."
"Yesterday, we signed $1 billion
in vessel construction contracts for three new LNG-ready Aloha
Class containerships," said Mr. Cox. "We currently anticipate
the delivery of the first vessel to be in the fourth quarter of
2026 with subsequent deliveries in 2027. These Jones Act
vessels will be built specifically for our CLX service with
state-of-the-art green technology features and a fuel-efficient
hull design, and are expected to help Matson achieve its 2030
greenhouse gas emissions goal. These vessels will also bring
additional capacity to the CLX when placed into service, and we
expect the additional capacity to be a meaningful contributor to
net income, consolidated operating income and EBITDA."
Third Quarter 2022 Discussion and Update on Business
Conditions
Ocean Transportation: The Company's container
volume in the Hawaii service in
the third quarter 2022 was 7.1 percent lower
year-over-year. The decrease was primarily due to lower
retail-related demand as compared to the pandemic spike in demand
experienced in the year ago period. During the quarter, the
Company saw continued improvement in the Hawaii economy supported by a low unemployment
rate and strong tourist arrivals, including an improvement in
international tourist trends. In the near-term, Matson
expects continued economic growth in Hawaii supported by a relatively tight labor
market and increasing tourism traffic, but there are also negative
trends from a combination of economic effects that create
uncertainty in the economic growth trajectory. These negative
trends include weakening economic conditions in the U.S. and global
economies and lower household discretionary income as a result of
higher inflation, higher interest rates and the end of the
pandemic-era stimulus helping personal income.
In China, the Company's
container volume in the third quarter 2022 decreased
15.1 percent year-over-year. The decrease was primarily
due to (i) lower demand for the CLX, CLX+ and CCX services and (ii)
one less sailing. Matson continued to realize a significant
rate premium over the Shanghai Containerized Freight Index ("SCFI")
in the third quarter 2022 and achieved average freight rates that
were higher than in the year ago period, but below the pandemic
high freight rates achieved earlier this year. With less
demand for expedited ocean services and easing port congestion in
Southern California, the Company
ended its temporary CCX service in early September, about six weeks
earlier than expected. Currently, the Company expects the
next two quarters to be challenging in the Transpacific tradelane
as retailers' inventories adjust to current consumer demand levels
and as ocean liners reduce vessel capacity to meet lower demand
levels. To this end, for the remainder of this year and into
the first quarter of 2023, the Company expects to experience lower
year-over-year freight demand and a lower rate environment for its
CLX and CLX+ services, but Matson expects to continue to earn a
significant rate premium to the SCFI due to its differentiated,
reliable and fast ocean services.
In Guam, the Company's
container volume in the third quarter 2022 decreased
1.8 percent year-over-year primarily due to lower
retail-related demand. In the near-term, the Company expects
the Guam economy to continue to
benefit from a recovery in tourism, but there are negative trends
as a result of higher inflation, higher interest rates and the end
of the pandemic-era stimulus helping personal income that creates
uncertainty in the economic growth trajectory.
In Alaska, the Company's
container volume for the third quarter 2022 increased
10.6 percent year-over-year primarily due to (i) higher
export seafood volume from Alaska-Asia Express ("AAX"), (ii) higher
northbound volume primarily due to higher retail-related demand and
volume related to a competitor's dry-docking and (iii) higher
southbound volume primarily due to higher domestic seafood
volume. In the near-term, the Company expects the
Alaska economy to benefit from
increased energy-related exploration and production activity as a
result of elevated oil prices, but there are negative trends as a
result of higher inflation, higher interest rates and the end of
the pandemic-era stimulus helping personal income that creates
uncertainty in the economic growth trajectory.
The contribution in the third quarter 2022 from the Company's
SSAT joint venture investment was $23.4 million, or $10.4 million higher than the third quarter
2021. The increase was primarily driven by higher other
terminal revenue.
Logistics: In the third quarter 2022, operating
income for the Company's Logistics segment was $20.1 million, or $4.1 million higher compared to the level
achieved in the third quarter 2021. The increase was due
primarily to higher contributions from all services as the Company
continued to see favorable supply and demand fundamentals in its
core markets.
Results By Segment
Ocean Transportation — Three months ended September 30,
2022 compared with 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
(Dollars in millions)
|
|
2022
|
|
2021
|
|
Change
|
|
Ocean Transportation
revenue
|
|
$
|
918.5
|
|
$
|
863.5
|
|
$
|
55.0
|
|
6.4
|
%
|
Operating costs and
expenses
|
|
|
(603.3)
|
|
|
(501.6)
|
|
|
(101.7)
|
|
20.3
|
%
|
Operating
income
|
|
$
|
315.2
|
|
$
|
361.9
|
|
$
|
(46.7)
|
|
(12.9)
|
%
|
Operating income
margin
|
|
|
34.3
|
%
|
|
41.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (Forty-foot
equivalent units (FEU), except for automobiles) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaii
containers
|
|
|
37,700
|
|
|
40,600
|
|
|
(2,900)
|
|
(7.1)
|
%
|
Hawaii
automobiles
|
|
|
11,300
|
|
|
12,600
|
|
|
(1,300)
|
|
(10.3)
|
%
|
Alaska
containers
|
|
|
24,100
|
|
|
21,800
|
|
|
2,300
|
|
10.6
|
%
|
China
containers
|
|
|
39,500
|
|
|
46,500
|
|
|
(7,000)
|
|
(15.1)
|
%
|
Guam
containers
|
|
|
5,400
|
|
|
5,500
|
|
|
(100)
|
|
(1.8)
|
%
|
Other containers
(2)
|
|
|
6,000
|
|
|
5,400
|
|
|
600
|
|
11.1
|
%
|
|
|
|
|
|
|
(1)
|
Approximate volumes
included for the period are based on the voyage departure date, but
revenue and operating income are adjusted to reflect the percentage
of revenue and operating income earned during the reporting period
for voyages in transit at the end of each reporting
period.
|
(2)
|
Includes containers
from services in various islands in Micronesia and the South
Pacific, and Okinawa, Japan.
|
Ocean Transportation revenue increased $55.0 million, or 6.4 percent, during
the three months ended September 30, 2022, compared with the
three months ended September 30, 2021. The increase was
primarily due to higher fuel-related surcharge revenue, higher
average freight rates in China and
higher volume in Alaska, partially
offset by lower volume in China
and Hawaii.
On a year-over-year FEU basis, Hawaii container volume decreased
7.1 percent primarily due to lower retail-related volume;
Alaska volume increased
10.6 percent primarily due to (i) higher export seafood volume
from AAX, (ii) higher northbound volume primarily due to higher
retail-related demand and volume related to a competitor's
dry-docking and (iii) higher southbound volume primarily due to
higher domestic seafood volume; China volume was 15.1 percent lower
primarily due to lower demand for the CLX, CLX+ and CCX services
and one less sailing; Guam volume
was 1.8 percent lower primarily due to lower retail-related
demand; and Other containers volume increased
11.1 percent.
Ocean Transportation operating income decreased $46.7 million during the three months ended
September 30, 2022, compared with the three months ended
September 30, 2021. The decrease was primarily due to
lower volume in China, higher
operating costs and expenses primarily due to the CLX+ service, and
higher fuel-related expenses, partially offset by higher average
freight rates in China and a
higher contribution from SSAT.
The Company's SSAT terminal joint venture investment contributed
$23.4 million during the three months
ended September 30, 2022, compared to a contribution of
$13.0 million during the three
months ended September 30, 2021. The increase was
primarily driven by higher other terminal revenue.
Ocean Transportation — Nine months ended September 30,
2022 compared with 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(Dollars in millions)
|
|
2022
|
|
2021
|
|
Change
|
|
Ocean Transportation
revenue
|
|
$
|
2,911.6
|
|
$
|
2,106.9
|
|
$
|
804.7
|
|
38.2
|
%
|
Operating costs and
expenses
|
|
|
(1,710.2)
|
|
|
(1,429.9)
|
|
|
(280.3)
|
|
19.6
|
%
|
Operating
income
|
|
$
|
1,201.4
|
|
$
|
677.0
|
|
$
|
524.4
|
|
77.5
|
%
|
Operating income
margin
|
|
|
41.3
|
%
|
|
32.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (Forty-foot
equivalent units (FEU), except for automobiles) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaii
containers
|
|
|
112,400
|
|
|
116,100
|
|
|
(3,700)
|
|
(3.2)
|
%
|
Hawaii
automobiles
|
|
|
30,500
|
|
|
36,000
|
|
|
(5,500)
|
|
(15.3)
|
%
|
Alaska
containers
|
|
|
67,000
|
|
|
58,800
|
|
|
8,200
|
|
13.9
|
%
|
China
containers
|
|
|
134,800
|
|
|
131,200
|
|
|
3,600
|
|
2.7
|
%
|
Guam
containers
|
|
|
16,200
|
|
|
16,200
|
|
|
—
|
|
0.0
|
%
|
Other containers
(2)
|
|
|
17,500
|
|
|
14,600
|
|
|
2,900
|
|
19.9
|
%
|
|
|
|
|
|
|
(1)
|
Approximate volumes
included for the period are based on the voyage departure date, but
revenue and operating income are adjusted to reflect the percentage
of revenue and operating income earned during the reporting period
for voyages in transit at the end of each reporting
period.
|
(2)
|
Includes containers
from services in various islands in Micronesia and the South
Pacific, and Okinawa, Japan.
|
Ocean Transportation revenue increased $804.7 million, or 38.2 percent, during
the nine months ended September 30, 2022, compared with the
nine months ended September 30, 2021. The increase was
primarily due to higher revenue in China, higher fuel-related surcharge revenue,
and higher revenue in Alaska. The higher revenue in
China was primarily due to
considerably higher average freight rates and higher volume.
The higher revenue in Alaska was
primarily the result of higher volume.
On a year-over-year FEU basis, Hawaii container volume decreased
3.2 percent primarily due to lower retail-related demand;
Alaska volume increased
13.9 percent primarily due to (i) higher northbound volume
primarily due to higher retail-related demand and volume related to
a competitor's dry-docking, (ii) higher export seafood volume from
AAX and (iii) higher southbound volume primarily due to higher
domestic seafood volume; China
volume was 2.7 percent higher as a result of seven more
eastbound voyages than the prior year; Guam volume was flat; and Other containers
volume increased 19.9 percent primarily due to the addition of
China-Auckland Express volume in the South Pacific.
Ocean Transportation operating income increased $524.4 million during the nine months ended
September 30, 2022, compared with the nine months ended
September 30, 2021. The increase was primarily due to
considerably higher average freight rates and higher volume in
China and a higher contribution
from SSAT, partially offset by higher operating costs and expenses
primarily due to the CLX+ and CCX services and higher fuel-related
expenses.
The Company's SSAT terminal joint venture investment contributed
$82.1 million during the nine
months ended September 30, 2022, compared to a contribution of
$35.0 million during the nine
months ended September 30, 2021. The increase was
primarily driven by higher other terminal revenue.
Logistics — Three months ended September 30, 2022
compared with 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
(Dollars in millions)
|
|
2022
|
|
2021
|
|
Change
|
|
Logistics
revenue
|
|
$
|
196.3
|
|
$
|
208.1
|
|
$
|
(11.8)
|
|
(5.7)
|
%
|
Operating costs and
expenses
|
|
|
(176.2)
|
|
|
(192.1)
|
|
|
15.9
|
|
(8.3)
|
%
|
Operating
income
|
|
$
|
20.1
|
|
$
|
16.0
|
|
$
|
4.1
|
|
25.6
|
%
|
Operating income
margin
|
|
|
10.2
|
%
|
|
7.7
|
%
|
|
|
|
|
|
Logistics revenue decreased $11.8 million, or 5.7 percent, during
the three months ended September 30, 2022, compared with the
three months ended September 30, 2021. The decrease was
primarily due to lower transportation brokerage revenue, partially
offset by higher revenue in freight forwarding, warehousing and
supply chain management.
Logistics operating income increased $4.1 million, or 25.6 percent, during
the three months ended September 30, 2022, compared with the
three months ended September 30, 2021. The increase was
primarily due to higher contributions from all services.
Logistics — Nine months ended September 30, 2022
compared with 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(Dollars in millions)
|
|
2022
|
|
2021
|
|
Change
|
|
Logistics
revenue
|
|
$
|
629.8
|
|
$
|
551.4
|
|
$
|
78.4
|
|
14.2
|
%
|
Operating costs and
expenses
|
|
|
(570.2)
|
|
|
(516.4)
|
|
|
(53.8)
|
|
10.4
|
%
|
Operating
income
|
|
$
|
59.6
|
|
$
|
35.0
|
|
$
|
24.6
|
|
70.3
|
%
|
Operating income
margin
|
|
|
9.5
|
%
|
|
6.3
|
%
|
|
|
|
|
|
Logistics revenue increased $78.4 million, or 14.2 percent, during
the nine months ended September 30, 2022, compared with the
nine months ended September 30, 2021. The increase was
primarily due to higher transportation brokerage revenue.
Logistics operating income increased $24.6 million, or 70.3 percent, during
the nine months ended September 30, 2022, compared with the
nine months ended September 30, 2021. The increase was
primarily due to higher contributions from all services.
Liquidity, Cash Flows and Capital Allocation
During the third quarter of 2022, Matson deposited $565.0 million in cash to the Capital
Construction Fund ("CCF"). Matson's Cash and Cash Equivalents
decreased by $39.6 million from
$282.4 million at December 31, 2021 to $242.8 million at
September 30, 2022, which excludes the aforementioned cash
deposited into the CCF. Matson generated net cash from
operating activities of $1,102.5 million during the nine months
ended September 30, 2022, compared to $583.3 million during the nine months ended
September 30, 2021. Capital expenditures totaled
$113.4 million for the nine
months ended September 30, 2022, compared with $244.7 million for the nine months ended
September 30, 2021. Total debt decreased by $97.2 million during the nine months to
$531.8 million as of
September 30, 2022, of which $474.5 million was classified as long-term
debt. During the third quarter of 2022, Matson prepaid
$50.4 million of outstanding
principal on the 4.16% Prudential Series C-2 notes due 2027 and the
4.31% Prudential Series C-3 notes due 2032, which represented all
of the remaining principal outstanding for both notes. As of
September 30, 2022 Matson had available borrowings under its
revolving credit facility of $642.2 million.
During the third quarter 2022, Matson repurchased approximately
1.1 million shares for a total cost of $88.4 million. As of September 30, 2022, the Company had approximately
3.0 million shares remaining in its share repurchase program.
On November 1, 2022, Matson
Navigation Company, Inc., a wholly-owned subsidiary of Matson,
signed vessel construction agreements with Philly Shipyard, Inc.
for three new LNG-ready Aloha Class containerships. Each of
the new 3,600 TEU vessels is expected to provide 500 containers of
additional capacity per voyage in the CLX service. The
contract cost of this new Jones Act vessel program is expected to
be approximately $1 billion, and
delivery of the first vessel is currently anticipated to be in the
fourth quarter of 2026 with subsequent deliveries in the second and
fourth quarters of 2027. Upon signing the agreements, the
Company made its first milestone payment of $50 million from the CCF. The Company
expects to finance the remaining construction-related payments with
cash currently on deposit in the CCF, cash and cash equivalents on
the balance sheet and through cash flows from operations,
borrowings available under the Company's unsecured revolving credit
facility and additional debt financings.
As previously announced, Matson's Board of Directors declared a
cash dividend of $0.31 per share
payable on December 1, 2022 to all shareholders of record as
of the close of business on November 10, 2022.
Teleconference and Webcast
A conference call is scheduled on November 2, 2022 at
4:30 p.m. ET when Matt Cox, Chairman and Chief Executive Officer,
and Joel Wine, Executive Vice
President and Chief Financial Officer, will discuss Matson's third
quarter results.
|
|
Date of Conference
Call:
|
Wednesday,
November 2, 2022
|
Scheduled
Time:
|
4:30 p.m. ET / 1:30
p.m. PT / 10:30 a.m. HT
|
The conference call will be broadcast live along with an
additional slide presentation on the Company's website at
www.matson.com, under Investors.
Participants may register for the conference call at:
https://register.vevent.com/register/BId470887075974c638c7f980ef087a60f
Registered participants will receive the conference call dial-in
number and a unique PIN code to access the live event. While
not required, it is recommended you join 10 minutes prior to the
event starting time. A replay of the conference call will be
available approximately two hours after the event by accessing the
webcast link at www.matson.com, under
Investors.
About the Company
Founded in 1882, Matson (NYSE: MATX) is a leading provider of
ocean transportation and logistics services. Matson provides
a vital lifeline to the domestic non-contiguous economies of
Hawaii, Alaska, and Guam, and to other island economies in
Micronesia. Matson also operates premium, expedited services
from China to Long Beach, California, provides service to
Okinawa, Japan and various islands
in the South Pacific, and operates an international export service
from Dutch Harbor to Asia.
The Company's fleet of owned and chartered vessels includes
containerships, combination container and roll-on/roll-off ships
and custom-designed barges. Matson Logistics, established in
1987, extends the geographic reach of Matson's transportation
network throughout North America. Its integrated, asset-light
logistics services include rail intermodal, highway brokerage,
warehousing, freight consolidation, Asia supply chain services, and forwarding to
Alaska. Additional information about the Company is available
at www.matson.com.
GAAP to Non-GAAP Reconciliation
This press release, the Form 8-K and the information to be
discussed in the conference call include non-GAAP measures.
While Matson reports financial results in accordance with U.S.
generally accepted accounting principles ("GAAP"), the Company also
considers other non-GAAP measures to evaluate performance, make
day-to-day operating decisions, help investors understand our
ability to incur and service debt and to make capital expenditures,
and to understand period-over-period operating results separate and
apart from items that may, or could, have a disproportional
positive or negative impact on results in any particular
period. These non-GAAP measures include, but are not limited
to, Earnings Before Interest, Income Taxes, Depreciation and
Amortization ("EBITDA") and Net Debt.
Forward-Looking Statements
Statements in this news release that are not historical facts
are "forward-looking statements," within the meaning of the Private
Securities Litigation Reform Act of 1995, including without
limitation those statements regarding performance and financial
results, cash flow expectations and uses of cash and cash flow,
Transpacific freight rates and Matson's rate premium, volume levels
and demand for Matson's CLX and CLX+ services, tourism levels,
unemployment rates, energy-related exploration and production
activity, economic drivers in Hawaii, Alaska and Guam, economic conditions in the U.S. and
global economies, inflation, interest rates, personal and
discretionary income, rail services, new vessel program and its
contributions to net income, operating income and EBITDA, new
vessel delivery dates, fleet capacity and efficiency, new vessel
speeds, capital expenditures, the costs and timing of liquified
natural gas installations on certain vessels, achievement of
greenhouse gas emissions reductions goals, fleet deployments,
vessel transit times, organic growth opportunities, timing and
amount of contribution to Capital Construction Fund ("CCF"), timing
and amount of federal and state cash tax savings, new vessel
financing, and share repurchase activity. These statements
involve a number of risks and uncertainties that could cause actual
results to differ materially from those contemplated by the
relevant forward-looking statement, including but not limited to
risks and uncertainties relating to repeal, substantial amendment
or waiver of the Jones Act or its application, or our failure to
maintain our status as a United
States citizen under the Jones Act; changes in economic
conditions or governmental policies, including from the COVID-19
pandemic; our ability to offer a differentiated service in
China for which customers are
willing to pay a significant premium; new or increased competition
or improvements in competitors' service levels; our relationship
with customers, agents, vendors and partners and changes in related
agreements; fuel prices, our ability to collect fuel related
surcharges and/or the cost or limited availability of required
fuels; evolving stakeholder expectations related to environmental,
social and governance matters; timely or successful completion of
fleet upgrade initiatives; the occurrence of poor weather, natural
disasters, maritime accidents, spill events and other physical and
operating risks, including those arising from climate change;
transitional and other risks arising from climate change; the
magnitude and timing of the impact of public health crises,
including COVID-19; significant operating agreements and leases
that may not be replaced on favorable terms; any unanticipated
dry-dock or repair expenses; the occurrence of any event, change or
other circumstances that could give rise to the termination of the
new vessel construction agreements; the ability of the shipyard to
construct and deliver the Aloha class vessels; joint venture
relationships; conducting business in a foreign shipping market,
including the imposition of tariffs or a change in international
trade policies; any delays or cost overruns related to the
modernization of terminals; war, terrorist attacks or other acts of
violence; consummating and integrating acquisitions; freight levels
and increasing costs and availability of truck capacity or
alternative means of transporting freight; relations with our
unions; satisfactory negotiation and renewal of expired collective
bargaining agreements without significant disruption to Matson's
operations; loss of key personnel or failure to adequately manage
human capital; the use of our information technology and
communication systems and cybersecurity attacks; changes in our
credit profile and our future financial performance; our ability to
obtain future debt financings; continuation of the Title XI and CCF
programs; costs to comply with and liability related to numerous
safety, environmental, and other laws and regulations; and
disputes, legal and other proceedings and government inquiries or
investigations. These forward-looking statements are not
guarantees of future performance. This release should be read
in conjunction with our Annual Report on Form 10-K for the year
ended December 31, 2021 and our other
filings with the SEC through the date of this release, which
identify important factors that could affect the forward-looking
statements in this release. We do not undertake any
obligation to update our forward-looking statements.
MATSON, INC.
AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
(In millions, except per
share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ocean
Transportation
|
|
$
|
918.5
|
|
$
|
863.5
|
|
$
|
2,911.6
|
|
$
|
2,106.9
|
Logistics
|
|
|
196.3
|
|
|
208.1
|
|
|
629.8
|
|
|
551.4
|
Total Operating
Revenue
|
|
|
1,114.8
|
|
|
1,071.6
|
|
|
3,541.4
|
|
|
2,658.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
|
(738.4)
|
|
|
(649.3)
|
|
|
(2,170.5)
|
|
|
(1,809.6)
|
Income from
SSAT
|
|
|
23.4
|
|
|
13.0
|
|
|
82.1
|
|
|
35.0
|
Selling, general and
administrative
|
|
|
(64.5)
|
|
|
(57.4)
|
|
|
(192.0)
|
|
|
(171.7)
|
Total Costs and
Expenses
|
|
|
(779.5)
|
|
|
(693.7)
|
|
|
(2,280.4)
|
|
|
(1,946.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
335.3
|
|
|
377.9
|
|
|
1,261.0
|
|
|
712.0
|
Interest
income
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
Interest
expense
|
|
|
(5.0)
|
|
|
(5.1)
|
|
|
(14.3)
|
|
|
(17.9)
|
Other income
(expense), net
|
|
|
2.5
|
|
|
1.8
|
|
|
6.3
|
|
|
4.7
|
Income before
Taxes
|
|
|
334.1
|
|
|
374.6
|
|
|
1,254.3
|
|
|
698.8
|
Income
taxes
|
|
|
(68.1)
|
|
|
(91.4)
|
|
|
(268.4)
|
|
|
(165.9)
|
Net Income
|
|
$
|
266.0
|
|
$
|
283.2
|
|
$
|
985.9
|
|
$
|
532.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
$
|
6.95
|
|
$
|
6.60
|
|
$
|
24.83
|
|
$
|
12.31
|
Diluted Earnings Per
Share
|
|
$
|
6.89
|
|
$
|
6.53
|
|
$
|
24.65
|
|
$
|
12.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number
of Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38.3
|
|
|
42.9
|
|
|
39.7
|
|
|
43.3
|
Diluted
|
|
|
38.6
|
|
|
43.4
|
|
|
40.0
|
|
|
43.7
|
MATSON, INC.
AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
September 30,
|
|
December 31,
|
(In millions)
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
242.8
|
|
$
|
282.4
|
Other current
assets
|
|
|
631.7
|
|
|
422.1
|
Total current
assets
|
|
|
874.5
|
|
|
704.5
|
Long-term
Assets:
|
|
|
|
|
|
|
Investment in
SSAT
|
|
|
87.2
|
|
|
58.7
|
Property and
equipment, net
|
|
|
1,907.4
|
|
|
1,878.3
|
Goodwill
|
|
|
327.8
|
|
|
327.8
|
Intangible assets,
net
|
|
|
178.0
|
|
|
181.1
|
Capital Construction
Fund
|
|
|
565.0
|
|
|
—
|
Other long-term
assets
|
|
|
519.1
|
|
|
542.7
|
Total long-term
assets
|
|
|
3,584.5
|
|
|
2,988.6
|
Total
assets
|
|
$
|
4,459.0
|
|
$
|
3,693.1
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Current portion of
debt
|
|
$
|
57.3
|
|
$
|
65.0
|
Other current
liabilities
|
|
|
542.6
|
|
|
547.4
|
Total current
liabilities
|
|
|
599.9
|
|
|
612.4
|
Long-term
Liabilities:
|
|
|
|
|
|
|
Long-term debt, net of
deferred loan fees
|
|
|
461.3
|
|
|
549.7
|
Deferred income
taxes
|
|
|
687.8
|
|
|
425.2
|
Other long-term
liabilities
|
|
|
411.4
|
|
|
438.4
|
Total long-term
liabilities
|
|
|
1,560.5
|
|
|
1,413.3
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
2,298.6
|
|
|
1,667.4
|
Total liabilities and
shareholders' equity
|
|
$
|
4,459.0
|
|
$
|
3,693.1
|
MATSON, INC.
AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
|
(In millions)
|
|
2022
|
|
2021
|
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
985.9
|
|
$
|
532.9
|
|
Reconciling
adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
105.6
|
|
|
100.9
|
|
Amortization of
operating lease right of use assets
|
|
|
113.9
|
|
|
73.9
|
|
Deferred income
taxes
|
|
|
146.3
|
|
|
30.3
|
|
Share-based
compensation expense
|
|
|
15.5
|
|
|
14.2
|
|
Income from
SSAT
|
|
|
(82.1)
|
|
|
(35.0)
|
|
Distributions from
SSAT
|
|
|
40.3
|
|
|
46.9
|
|
Other
|
|
|
(0.2)
|
|
|
(1.1)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
13.9
|
|
|
(75.2)
|
|
Deferred dry-docking
payments
|
|
|
(16.7)
|
|
|
(25.8)
|
|
Deferred dry-docking
amortization
|
|
|
18.6
|
|
|
18.0
|
|
Prepaid expenses and
other assets
|
|
|
(110.2)
|
|
|
(46.7)
|
|
Accounts payable,
accruals and other liabilities
|
|
|
(5.0)
|
|
|
30.2
|
|
Operating lease
liabilities
|
|
|
(113.8)
|
|
|
(72.1)
|
|
Other long-term
liabilities
|
|
|
(9.5)
|
|
|
(8.1)
|
|
Net cash provided by
operating activities
|
|
|
1,102.5
|
|
|
583.3
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
Capitalized vessel
construction expenditures
|
|
|
(11.9)
|
|
|
—
|
|
Other capital
expenditures
|
|
|
(113.4)
|
|
|
(244.7)
|
|
Cash deposits into
Capital Construction Fund
|
|
|
(579.7)
|
|
|
(31.2)
|
|
Withdrawals from
Capital Construction Fund
|
|
|
14.7
|
|
|
31.2
|
|
Other
|
|
|
(2.6)
|
|
|
2.2
|
|
Net cash used in
investing activities
|
|
|
(692.9)
|
|
|
(242.5)
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
Repayments of
debt
|
|
|
(97.2)
|
|
|
(41.1)
|
|
Proceeds from
revolving credit facility
|
|
|
—
|
|
|
304.3
|
|
Repayments of
revolving credit facility
|
|
|
—
|
|
|
(376.1)
|
|
Payment of financing
costs
|
|
|
—
|
|
|
(3.0)
|
|
Dividends
paid
|
|
|
(36.9)
|
|
|
(33.3)
|
|
Repurchase of Matson
common stock
|
|
|
(296.9)
|
|
|
(115.7)
|
|
Tax withholding
related to net share settlements of restricted stock
units
|
|
|
(19.6)
|
|
|
(14.4)
|
|
Net cash used in
financing activities
|
|
|
(450.6)
|
|
|
(279.3)
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase
in Cash, Cash Equivalents and Restricted Cash
|
|
|
(41.0)
|
|
|
61.5
|
|
Cash, Cash Equivalents
and Restricted Cash, Beginning of the Period
|
|
|
287.7
|
|
|
19.7
|
|
Cash, Cash Equivalents
and Restricted Cash, End of the Period
|
|
$
|
246.7
|
|
$
|
81.2
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash,
Cash Equivalents and Restricted Cash, End of the Period:
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
242.8
|
|
$
|
75.9
|
|
Restricted
Cash
|
|
|
3.9
|
|
|
5.3
|
|
Total Cash, Cash
Equivalents and Restricted Cash, End of the Period
|
|
$
|
246.7
|
|
$
|
81.2
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information:
|
|
|
|
|
|
|
|
Interest paid, net of
capitalized interest
|
|
$
|
13.6
|
|
$
|
15.3
|
|
Income tax payments,
net of refunds
|
|
$
|
212.4
|
|
$
|
162.1
|
|
|
|
|
|
|
|
|
|
Non-cash
Information:
|
|
|
|
|
|
|
|
Capital expenditures
included in accounts payable, accruals and other
liabilities
|
|
$
|
3.9
|
|
$
|
5.6
|
|
MATSON, INC.
AND SUBSIDIARIES
|
Net Income to EBITDA
Reconciliations
|
(Unaudited)
|
|
EBITDA
RECONCILIATION
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
Last Twelve
|
|
(In millions)
|
|
|
2022
|
|
2021
|
|
Change
|
|
Months
|
|
Net Income
|
|
|
$
|
266.0
|
|
$
|
283.2
|
|
$
|
(17.2)
|
|
$
|
1,380.4
|
|
Subtract:
|
Interest
income
|
|
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
(1.3)
|
|
Add:
|
Interest
expense
|
|
|
5.0
|
|
|
5.1
|
|
|
(0.1)
|
|
|
19.0
|
|
Add:
|
Income taxes
|
|
|
68.1
|
|
|
91.4
|
|
|
(23.3)
|
|
|
346.4
|
|
Add:
|
Depreciation and
amortization
|
|
|
33.9
|
|
|
32.7
|
|
|
1.2
|
|
|
138.1
|
|
Add:
|
Dry-dock
amortization
|
|
|
5.7
|
|
|
5.4
|
|
|
0.3
|
|
|
24.9
|
|
EBITDA (1)
|
|
|
$
|
377.4
|
|
$
|
417.8
|
|
$
|
(40.4)
|
|
$
|
1,907.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
(In millions)
|
|
|
2022
|
|
2021
|
|
Change
|
|
Net Income
|
|
|
$
|
985.9
|
|
$
|
532.9
|
|
$
|
453.0
|
|
Subtract:
|
Interest
income
|
|
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
Add:
|
Interest
expense
|
|
|
14.3
|
|
|
17.9
|
|
|
(3.6)
|
|
Add:
|
Income taxes
|
|
|
268.4
|
|
|
165.9
|
|
|
102.5
|
|
Add:
|
Depreciation and
amortization
|
|
|
103.9
|
|
|
97.9
|
|
|
6.0
|
|
Add:
|
Dry-dock
amortization
|
|
|
18.6
|
|
|
18.0
|
|
|
0.6
|
|
EBITDA (1)
|
|
|
$
|
1,389.8
|
|
$
|
832.6
|
|
$
|
557.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
EBITDA is defined as
the sum of net income minus interest income plus interest expense,
income taxes and depreciation and amortization (including deferred
dry-docking amortization). EBITDA should not be considered as
an alternative to net income (as determined in accordance with
GAAP), as an indicator of our operating performance, or to cash
flows from operating activities (as determined in accordance with
GAAP) as a measure of liquidity. Our calculation of EBITDA
may not be comparable to EBITDA as calculated by other companies,
nor is this calculation identical to the EBITDA used by our lenders
to determine financial covenant compliance.
|
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SOURCE Matson, Inc.