SOURCE: American Commercial Lines Inc.

August 07, 2012 16:19 ET

Commercial Barge Line Company Announces Results for Second Quarter 2012

JEFFERSONVILLE, IN--(Marketwire - Aug 7, 2012) -

Highlights

  • Adjusted EBITDAR for the trailing twelve month period ended June 30, 2012 was $220.1 million -- a 26% increase over Adjusted EBITDAR for the year ended December 31, 2011.
  • Adjusted EBITDAR of $53.4 million for the current quarter increased 33% from prior quarter.
  • Operating income of $17.8 million in the current quarter improved by $33.7 million over prior quarter.
  • Net barrel capacity of our liquid fleet increased by over 6% as a result of the addition of 16 tank barges to our liquid fleet during the current six month period which included eight Jeffboat-built tank barges and the acquisition of eight tank barges.
  • Strong liquidity with $240.4 million in available borrowing capacity.
  • Ratio of Net Funded Debt to trailing twelve month Adjusted EBITDAR reduced to 1.8 times at quarter-end.

Commercial Barge Line Company (the "Company") today announced results for the quarter and six months ended June 30, 2012. Revenues for the current quarter increased 9% over the prior year's second quarter to $218.7 million. Revenues for the current six month period increased 16% over the prior six month period to $436.8 million. For the current quarter, Adjusted EBITDAR was $53.4 million, a 33% increase over $40.2 million for the prior quarter. On a trailing-twelve month basis, Adjusted EBITDAR was $220.1 million, an increase of 26% over Adjusted EBITDAR of $174.3 million for the year ended December 31, 2011.

Commenting on the results, Mark Knoy, President and Chief Executive Officer, stated, "We continue to see solid year-over-year improvements in our financial performance as a result of our focus on safe and efficient operating practices and cost control. We have also enjoyed a robust demand for our liquid transportation services and reasonably good operating conditions to date. As a result, our trailing twelve-months Adjusted EBITDAR has increased 26% over full year 2011 results to $220.1 million. This progress was made despite a challenging dry cargo market, where the market has endured rate pressure resulting from weak domestic coal demand, uncertainties in the grain markets linked to the developing drought and the overall sluggishness of the US economic recovery. Our employees have responded well to these challenges to date and have been successful in offsetting much of these pressures with solid execution, creativity, good customer service and hard work."

Segment Revenues

Transportation segment revenues increased almost 7% to $174.2 million while total affreightment ton-mile volume increased 3.4% to 7.4 billion ton-miles in the current quarter. Improvements in asset utilization and favorable operating conditions early in the quarter enabled the Company to achieve these increased volumes while operating an average barge fleet that was 18% smaller and with 11% fewer boats. These gains in asset utilization were driven by reductions in non-revenue barge days as well as increased tons per barge of almost 2% in our dry cargo business.

Fuel-neutral transportation revenues increased over 4% for the current quarter, driven by strong demand for liquid transportation services. The Company realized a 29% increase in its liquids business revenues driven by higher demand for dedicated liquid transportation services resulting from the continued growth of domestic crude production in the Eagle Ford and western Canadian crude shale regions and strong chemical production levels. The Company's liquid barge utilization was approximately 93% for the current quarter. Revenues associated with dedicated liquid transport agreements increased 39% over the prior year quarter and represented almost half of all liquid revenues in the current quarter. Liquid affreightment revenues, which are more heavily weighted toward chemicals also showed strength as they increased by 12% over prior year's levels.

Dry cargo revenues declined almost 9%, on a fuel-neutral basis, compared to the prior year's second quarter as a result of continued rate weakness, which was mitigated by a 14% increase in export coal ton-mile volumes and a 4% increase in grain ton-mile volumes. Grain rates declined approximately 25% and export coal rates declined by approximately 22% in the quarter compared to prior year. These market rate pressures were generally attributable to excess barge capacity resulting from declines in domestic utility coal demand and reduced grain exports during the quarter due to higher domestic consumption levels in advance of this year's harvest. Demurrage revenues in the Company's dry cargo business for the current quarter decreased over prior quarter levels by 12%.

Manufacturing segment revenues increased 22% to $44.5 million, with 79 total barges sold compared to 70 in the prior quarter.  The manufacturing segment's external revenue backlog at the period end was $41.6 million, or approximately $60 million lower than the backlog at both June 30 and December 31, 2011. This decline is attributable to a significant portion of the manufacturing segments capacity being allocated to produce barges for the transportation segment as we continue to revitalize our fleet. We currently have no additional 2012 capacity for external barges.

Transportation segment revenues increased 10% to $324.4 million for the six month period. Total affreightment ton-mile volume increased over 7% to 15.6 billion ton-miles, produced with an average barge fleet that was 12% smaller and with 8% fewer boats.

Fuel-neutral transportation revenues increased 6% for the current six month period. Our liquids business revenues improved by 22% while dry cargo revenues declined 2%, on a fuel-neutral basis. For the six month period, the Company experienced 26% higher coal ton-mile volumes and 10% higher grain ton-mile volumes. This growth was more than offset by declines in grain rates of 16% and export coal rates of 18%. Demurrage revenues in the Company's dry cargo business decreased from prior year levels by 24%.

Manufacturing segment revenues for the current six month period increased 53% to $80.3 million, with 144 barges sold to third parties compared to 99 barges in the prior six month period.

Operating Results

As a result of our higher revenues and the changes in our costs described in the following discussion of Adjusted EBITDAR, operating income and net income rose $33.7 million and $22.1 million, respectively, over the prior quarter and $64.4 million and $40.9 million, respectively, over the prior year six month period.

For the current quarter, Adjusted EBITDAR was $53.4 million, a 33% increase over $40.2 million for the prior quarter. In the current quarter, the transportation segment improved its Adjusted EBITDAR by $12.5 million. Adjusted EBITDAR for the prior year's second quarter includes an adjustment for the estimated impact of the extreme flooding in that quarter of $16.6 million. The improvement in Adjusted EBITDAR is attributable to the following:

  • Lower boat and barge repair expense, attributable to the scrapping of a significant number of older barges and to the boat repower and upgrade program, which drove over half of the improvement in transportation Adjusted EBITDAR. 
  • Improved operating productivity resulted in lower relative boat costs for the quarter, improving Adjusted EBITDAR by $1.7 million.
  • More stable fuel costs and quarter-over-quarter fuel efficiency improvements contributed $2.8 million to the improvement. 
  • Decreases in port and cargo costs attributable to lower fleeting days and better lane management contributed $2.8 million to the improvement. 
  • Gains on the sale of equipment were also $1.2 million higher in the current quarter.

These positive factors were partially offset by the margin impact of changes in revenue of approximately $0.8 million with the positive impact of our strong liquids business and higher loadings per barge more than offset by dry cargo pricing pressure and lower dry demurrage revenues. Additionally, selling, general and administrative expenses and were approximately $2.9 million higher in the quarter, driven primarily by the timing in recognition of certain incentive compensation accruals.

Manufacturing segment Adjusted EBITDAR increased $0.7 million to $4.7 million in the current quarter on higher external sales volume and improved labor and materials efficiency in the shipyard.

For the current six month period, Adjusted EBITDAR was $111.7 million, a 70% increase over $65.9 million for the prior six month period. On a trailing-twelve month basis, Adjusted EBITDAR was $220.1 million, an increase of 26% over Adjusted EBITDAR of $174.3 million for the year ended December 31, 2011.

In the current six month period, the transportation segment improved its Adjusted EBITDAR by $41.0 million. Higher gains on disposal of equipment contributed $17.6 million to the improved Adjusted EBITDAR while improved boat productivity resulting from higher ton-mile production achieved with a smaller fleet of boats and barges contributed $9.1 million. Lower boat and barge repair expense, partially attributable to the scrapping of a significant number of older barges and to the boat repower and upgrade program drove approximately $6.0 million of the improvement in transportation Adjusted EBITDAR. Additional factors in the change in Adjusted EBITDAR include $3.2 million lower claims expenses, improved realization on fuel pricing surcharges and fuel efficiency improvements of $1.0 million and decreased port and cargo costs of $1.4 million. These positive factors were partially offset by the margin impact of changes in revenue, which had a negative impact of approximately $0.7 with the positive impact of higher unit tow volume and higher loadings per barge more than offset by lower pricing and lower dry demurrage volume. For the current six month period selling, general and administrative expenses and were essentially flat, despite higher incentive compensation accruals.

Manufacturing segment Adjusted EBITDAR increased $4.8 million in the current six month period to $10.3 million on higher external sales volume and improved labor and materials efficiency in the shipyard.

Outlook

Commenting on the outlook for the remainder of 2012, Mr. Knoy said, "As we look forward through the balance of 2012, we expect to continue to have significant opportunities and to face potential challenges. Domestic crude oil production increases are expected to continue to outpace existing distribution infrastructure capacity, opening further opportunities for us to leverage our liquids transportation capacity. As a result, we are adjusting our capital deployment strategies on a real-time basis to allow us to have the right equipment to take advantage of these market opportunities. We currently have the ability to put up to an additional 1.8 million barrels of tank barge capacity into service over the coming 12 to 18 months.

"Drought conditions are presenting us with several challenges as river conditions have worsened in recent weeks. These low water conditions are causing operating inefficiencies in the form of fewer tons per loading, fewer barges per tow and fewer miles per day along the lower Mississippi River. We cannot predict how long we will face these conditions and are taking steps to tightly control expenses and maintain the safety of our employees, our equipment, the environment and our customers' cargoes until conditions improve. Effectively responding to these challenges will require focus and teamwork, and I am confident that our teammates are up to the task.

"At this time, the potential impact of the drought on the grain harvest and our business is unclear. Factors such as domestic demand for grain for ethanol and livestock consumption, as well as global grain price dynamics will also have an impact on US grain export levels. Significant changes in these factors, such as a drop in demand for corn to be used in domestic ethanol production, could meaningfully swing export levels. Given these uncertainties, we have booked a meaningful portion of our grain capacity through the harvest season as conditions have warranted. We believe this provides us with some acceptable downside protection in current market conditions."

Liquidity and Debt Position

At June 30, 2012, we had total indebtedness of $374.7 million, including the $26.4 million premium recorded at the Acquisition date to recognize the fair value of the 2017 Notes, net of amortization through June 30, 2012. At this level of debt, we had $240.4 million in remaining availability under our Credit Facility. The Credit Facility has no maintenance financial covenants unless borrowing availability is generally less than $48.8 million. At June 30, 2012, debt levels were $191.6 million above this threshold.

As of June 30, 2012, the present value of the lease payments associated with revenue generating equipment was approximately $46.9 million. Including the present value of these lease payments, the Company's total indebtedness was $421.6 million as of June 30, 2012. The ratio of funded net debt to Adjusted EBITDAR for the trailing twelve months ended June 30, 2012 reflected an improvement to 1.8 times.

About the Company

Commercial Barge Line Company, headquartered in Jeffersonville, Indiana, is an integrated marine transportation and service company operating in the United States Jones Act trades. For more information about the Company, visit the Company's website at http://www.aclines.com/.

Non-GAAP Measures

Adjusted EBITDAR is a non-GAAP financial measure that the Company believes provides investors with a useful tool for analyzing its operating results as it eliminates the impact of certain non-comparable items and discontinued operations. The Company has included a reconciliation of its financial results to Adjusted EBITDAR elsewhere in this release.

Forward-Looking Statements

This release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to risks, uncertainty and changes in circumstance. Important factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements and should be considered in evaluating the outlook of Commercial Barge Line Company. Risks and uncertainties are detailed from time to time in Commercial Barge Line Company's filings with the SEC, including our report on Form 10-K for the year ended December 31, 2011. Commercial Barge Line Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of changes, new information, subsequent events or otherwise.

                         
                         
COMMERCIAL BARGE LINE COMPANY  
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  
(Unaudited - In thousands)  
               
                         
    Three Months Ended
June 30,
    Three Months Ended June 30,     Six Months Ended June 30,     Six Months Ended June 30,  
    2012     2011     2012     2011  
Revenues                        
  Transportation and Services   $ 174,196     $ 163,317     $ 356,469     $ 324,443  
  Manufacturing     44,475       36,547       80,339       52,554  
    Revenues     218,671       199,864       436,808       376,997  
Cost of Sales                                
  Transportation and Services     147,715       167,673       309,157       325,930  
  Manufacturing     40,629       35,001       71,640       51,445  
    Cost of Sales     188,344       202,674       380,797       377,375  
Gross Profit (Loss)     30,327       (2,810 )     56,011       (378 )
Selling, General and Administrative Expenses     12,496       13,014       22,700       30,690  
Operating Income (Loss)     17,831       (15,824 )     33,311       (31,068 )
Other Expense (Income)                                
  Interest Expense     7,626       7,624       15,311       15,092  
  Other, Net     (265 )     (214 )     (303 )     (344 )
    Other Expense     7,361       7,410       15,008       14,748  
Income (Loss) from Continuing Operations                                
  Before Income Taxes     10,470       (23,234 )     18,303       (45,816 )
Income Taxes (Benefit)     3,962       (7,495 )     6,932       (16,298 )
Income (Loss) from Continuing Operations     6,508       (15,739 )     11,371       (29,518 )
Discontinued Operations, Net of Tax     -       134       26       37  
  Net Income (Loss)   $ 6,508     $ (15,605 )   $ 11,397     $ (29,481 )
                                 
                                 
                                 
             
             
COMMERCIAL BARGE LINE COMPANY  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands)  
    June 30,     December 31,  
    2012     2011  
    (Unaudited)        
ASSETS  
Current Assets                
  Cash and Cash Equivalents   $ 1,531     $ 938  
  Accounts Receivable, Net     78,810       87,368  
  Inventory     57,295       62,483  
  Deferred Tax Asset     1,633       6,390  
  Assets Held for Sale     1,612       1,612  
  Prepaid and Other Current Assets     21,055       19,308  
    Total Current Assets     161,936       178,099  
Properties, Net     933,435       935,576  
Investment in Equity Investees     6,631       6,470  
Accounts Receivable, Related Parties, Net     11,969       12,021  
Goodwill     17,692       17,692  
Other Assets     40,311       45,521  
    Total Assets   $ 1,171,974     $ 1,195,379  
                 
LIABILITIES  
Current Liabilities                
  Accounts Payable   $ 41,694     $ 48,653  
  Accrued Payroll and Fringe Benefits     12,870       20,035  
  Deferred Revenue     14,967       15,251  
  Accrued Claims and Insurance Premiums     11,604       13,823  
  Accrued Interest     12,380       11,708  
  Customer Deposits     590       1,165  
  Other Liabilities     29,536       29,104  
    Total Current Liabilities     123,641       139,739  
Long Term Debt     374,703       384,225  
Pension and Post Retirement Liabilities     65,839       67,531  
Deferred Tax Liability     180,046       178,602  
Other Long Term Liabilities     39,276       46,335  
    Total Liabilities     783,505       816,432  
                 
SHAREHOLDER'S EQUITY  
Other Capital     424,455       424,932  
Retained Deficit     (9,430 )     (20,826 )
Accumulated Other Comprehensive Loss     (26,556 )     (25,159 )
    Total Shareholder's Equity     388,469       378,947  
    Total Liabilities and Shareholder's Equity   $ 1,171,974     $ 1,195,379  
                     
                     
                     
NET INCOME (LOSS) TO ADJUSTED EBITDA AND EBITDAR RECONCILIATION  
(Unaudited - Dollars in thousands)  
                       
    For the Three Months Ended     For the Six Months Ended  
    June 30,     June 30,  
    2012   2011     2012     2011  
                       
Net Income (Loss) from Continuing Operations   6,508   (15,739 )   11,371     (29,518 )
Discontinued Operations, Net of Income Taxes   -   134     26     37  
Consolidated Net Income (Loss)   6,508   (15,605 )   11,397     (29,481 )
                       
Adjustments from Continuing Operations:                      
  Interest Income   -   (103 )   (5 )   (158 )
  Interest Expense   7,626   7,624     15,311     15,092  
  Depreciation and Amortization   27,195   27,888     54,205     55,394  
  Taxes   3,962   (7,495 )   6,932     (16,298 )
Adjustments from Discontinued Operations:                      
  Interest Income   -   (18 )   -     (18 )
  Depreciation and Amortization   -   19     -     38  
                       
EBITDA from Continuing Operations   45,291   12,175     87,814     24,512  
EBITDA from Discontinued Operations   -   135     26     57  
Consolidated EBITDA   45,291   12,310     87,840     24,569  
                       
  Long-term Boat and Barge Rents   3,878   3,849     7,770     7,677  
                       
EBITDAR from Continuing Operations   49,169   16,024     95,584     32,189  
EBITDAR from Discontinued Operations   -   135     26     57  
Consolidated EBITDAR   49,169   16,159     95,610     32,246  
                       
Other Non-cash or Non-comparable charges included in net income:              
Continuing Operations                      
  Share Based Compensation   35   322     84     1,815  
  Merger Related and Consulting Expenses   4,201   6,874     27,173     13,446  
  (Gain) Loss on Excess Boat Sales   -   -     (11,278 )   -  
  Restructuring Costs   30   411     129     1,828  
Total Continuing Operations   4,266   7,607     16,108     17,089  
Discontinued Operations                      
  Merger Related and Consulting Expenses   -   20     -     20  
Total Discontinued Operations   -   20     -     20  
                       
Flood Costs   -   16,618     -     16,618  
                       
Adjusted EBITDA from Continuing Operations   49,557   36,400     103,922     58,219  
Adjusted EBITDA from Discontinued Operations   -   155     26     77  
Adjusted Consolidated EBITDA   49,557   36,555     103,948     58,296  
Adjusted EBITDAR from Continuing Operations   53,435   40,249     111,692     65,896  
Adjusted EBITDAR from Discontinued Operations   -   155     26     77  
Adjusted Consolidated EBITDAR   53,435   40,404     111,718     65,973  
                       
                       
                       
COMMERCIAL BARGE LINE COMPANY  
Statement of Operating Income by Reportable Segment  
(Dollars in thousands)  
(Unaudited)  
                           
    Reportable Segments                
    Transportation     Manufacturing   All Other Segments   Intersegment Elimination     Total  
                                     
Three Months Ended June 30, 2012                                    
Total revenue   $ 174,387     $ 54,627   $ -   $ (10,343 )   $ 218,671  
Intersegment revenues     191       10,152     -     (10,343 )     -  
Revenue from external customers     174,196       44,475     -     -       218,671  
Operating expense                                    
  Materials, supplies and other     46,800       -     -     -       46,800  
  Rent     6,699       -     -     -       6,699  
  Labor and fringe benefits     28,123       -     -     -       28,123  
  Fuel     39,518       -     -     -       39,518  
  Depreciation and amortization     25,235       -     -     -       25,235  
  Taxes, other than income taxes     2,843       -     -     -       2,843  
  Gain on disposition of equipment     (1,503 )     -     -     -       (1,503 )
  Cost of goods sold     -       40,629     -     -       40,629  
    Total cost of sales     147,715       40,629     -     -       188,344  
  Selling, general & administrative     11,347       1,149     -     -       12,496  
    Total operating expenses     159,062       41,778     -     -       200,840  
Operating income   $ 15,134     $ 2,697   $ -   $ -     $ 17,831  
                             
                             
    Reportable Segments                  
    Transportation     Manufacturing   All Other Segments     Intersegment Elimination     Total  
                                       
Three Months Ended June 30, 2011                                      
Total revenue   $ 163,652     $ 36,600   $ -     $ (388 )   $ 199,864  
Intersegment revenues     335       53     -       (388 )     -  
Revenue from external customers     163,317       36,547     -       -       199,864  
Operating expense                                      
  Materials, supplies and other     61,413       -     -       -       61,413  
  Rent     6,977       -     -       -       6,977  
  Labor and fringe benefits     25,683       -     -       -       25,683  
  Fuel     45,749       -     -       -       45,749  
  Depreciation and amortization     25,908       -     -       -       25,908  
  Taxes, other than income taxes     3,246       -     -       -       3,246  
  Gain on disposition of equipment     (1,303 )     -     -       -       (1,303 )
  Cost of goods sold     -       35,001     -       -       35,001  
    Total cost of sales     167,673       35,001     -       -       202,674  
Selling, general & administrative     12,613       400     1       -       13,014  
    Total operating expenses     180,286       35,401     1       -       215,688  
Operating (loss) income   $ (16,969 )   $ 1,146   $ (1 )   $ -     $ (15,824 )
                                       
                                       
                                       
COMMERCIAL BARGE LINE COMPANY  
Statement of Operating Income by Reportable Segment  
(Dollars in thousands)  
(Unaudited)  
                           
    Reportable Segments                
    Transportation     Manufacturing   All Other Segments   Intersegment Elimination     Total  
                                     
Six Months Ended June 30, 2012                                    
Total revenue   $ 356,762     $ 106,051   $ -   $ (26,005 )   $ 436,808  
Intersegment revenues     293       25,712     -     (26,005 )     -  
Revenue from external customers     356,469       80,339     -     -       436,808  
Operating expense                                    
  Materials, supplies and other     107,835       -     -     -       107,835  
  Rent     13,427       -     -     -       13,427  
  Labor and fringe benefits     56,822       -     -     -       56,822  
  Fuel     82,799       -     -     -       82,799  
  Depreciation and amortization     50,300       -     -     -       50,300  
  Taxes, other than income taxes     5,861       -     -     -       5,861  
  Gain on disposition of equipment     (7,887 )     -     -     -       (7,887 )
  Cost of goods sold     -       71,640     -     -       71,640  
    Total cost of sales     309,157       71,640     -     -       380,797  
Selling, general & administrative     20,532       2,168     -     -       22,700  
    Total operating expenses     329,689       73,808     -     -       403,497  
Operating income   $ 26,780     $ 6,531   $ -   $ -     $ 33,311  
                                     
                                     
                                     
    Reportable Segments                  
    Transportation     Manufacturing   All Other Segments     Intersegment Elimination     Total  
                                       
Six Months Ended June 30, 2011                                      
Total revenue   $ 324,980     $ 64,581   $ -     $ (12,564 )   $ 376,997  
Intersegment revenues     537       12,027     -       (12,564 )     -  
Revenue from external customers     324,443       52,554     -       -       376,997  
Operating expense                                      
  Materials, supplies and other     118,256       -     -       -       118,256  
  Rent     13,964       -     -       -       13,964  
  Labor and fringe benefits     55,926       -     -       -       55,926  
  Fuel     81,572       -     -       -       81,572  
  Depreciation and amortization     51,427       -     -       -       51,427  
  Taxes, other than income taxes     6,113       -     -       -       6,113  
  Gain on disposition of equipment     (1,328 )     -     -       -       (1,328 )
  Cost of goods sold     -       51,445     -       -       51,445  
    Total cost of sales     325,930       51,445     -       -       377,375  
Selling, general & administrative     29,680       1,008     2       -       30,690  
    Total operating expenses     355,610       52,453     2       -       408,065  
Operating (loss) income   $ (31,167 )   $ 101   $ (2 )   $ -     $ (31,068 )
                                       

Contact Information

  • Contact:
    Kim Durbin
    Manager Corporate Communications
    812.288.1915
    Email Contact