EDISON, NJ--(Marketwire - August 11, 2008) - U.S. Shipping Partners L.P. (
NYSE:
USS) (the
"Partnership") today reported its results for the second quarter ended June
30, 2008.
The Partnership had voyage revenue of $49.8 million, operating income of
$1.6 million and a net loss of $2.7 million for the three months ended June
30, 2008, compared to voyage revenue of $45.6 million, operating income of
$6.2 million and net income of $2.4 million for the same period in 2007.
The Partnership had voyage revenue of $101.3 million, operating income of
$2.1 million and a net loss of $10.0 million for the six months ended June
30, 2008, compared to voyage revenue of $87.7 million, operating income of
$16.6 million and net income of $8.2 million for the same period in 2007.
Earnings before interest, taxes and depreciation and amortization and other
non-cash expenses ("Adjusted EBITDA"), a non-GAAP measure, were $12.5
million for the three months ended June 30, 2008, compared to $15.7 million
for the comparable period in 2007. Adjusted EBITDA, a non-GAAP measure,
was $30.1 million for the six months ended June 30, 2008, compared to $35.2
million for the comparable period in 2007.
As previously announced, the Partnership's review of strategic alternatives
and its negotiations with its lenders to amend certain financial covenants
under its senior credit facility are continuing. In light of these
continuing efforts, the Partnership has determined that it will not pay a
distribution on its units for the quarter ended June 30, 2008.
The tug for the Partnership's second articulated tug barge ("ATB") is
currently traveling up the east coast to pick up the barge portion in
Sturgeon Bay, Wisconsin. The Partnership expects that the completed ATB
will be placed in service during the second half of August, 2008, at a
total cost (excluding capitalized interest) of approximately $66.6 million.
The cost increase over the originally estimated amount of $65 million was
principally due to contractually provided cost increases for steel and
owner furnished equipment.
"Market conditions for Jones Act petroleum product tankers remained very
challenging in the second quarter of 2008. Although our chemical business
recovered somewhat in May and June following a weak April, the effects of
record high oil prices on both refining activity and consumption of refined
products caused a sharp drop in spot market demand for tanker
transportation in our core market. Persistent record prices for fuel
consumed to power our vessels also contributed to pressure on operating
margins for those units primarily trading in the spot market. In response
to the drop in spot market demand, the Partnership has redeployed three of
its six ITBs into carrying grain for humanitarian organizations under a
U.S. government financed program where demand has been reasonably strong.
However, given continued microeconomic stresses on the US economy and
unprecedented crude oil prices, our outlook for 2008 remains very guarded,"
said Mr. Gridley.
In order to address reduced demand for our ITBs in the spot market for
transportation of petroleum products, we are currently employing three of
our ITBs in the foreign transportation of grain for humanitarian
organizations. Unlike our petroleum voyages, where we generally recognize
revenue and expenses based upon the relative transit time in each period to
the total estimated transit time for each voyage, for our grain voyages we
only recognize revenue and expenses when the grain reaches its final
destination (although our expenses are deferred and accrued as a liability
on our balance sheet), which often falls in the next reporting period.
Accordingly, a comparison of our results for the three months ended June
30, 2008 with prior quarters and comparable periods in the prior year may
be less meaningful.
Three Months Ended June 30, 2008
The Partnership had a net loss for the three months ending June 30, 2008 of
$2.7 million compared to net income of $2.4 million for the same period in
2007. Operating income was $1.6 million for the three months ending June
30, 2008 compared to $6.2 million in the same period in 2007. Net loss per
basic and diluted limited partnership unit for the second quarter 2008 was
$0.14 compared to net income per basic and diluted limited partnership unit
for the second quarter 2007 of $0.13.
Voyage revenue was $49.8 million for the three months ended June 30, 2008,
an increase of $4.2 million from $45.6 million for the three months ended
June 30, 2007. The increase in voyage revenue was primarily the result of
the addition of the ATB Freeport placed in service in July 2007, as well as
higher spot market rates compared to time charter rates given that spot
market rates include an amount to cover voyage expenses whereas time
charter rates do not include this amount because the customer is
responsible for payment of these expenses. These revenues were partially
offset by more offhire days due to reduced demand for our ITBs as well as
the impact related to the difference in revenue recognition policies for
grain voyages compared to our other voyages. Revenues are affected by
several factors, such as the mix of charter types; the charter rates
attainable in the market; fleet utilization and other items such as fuel
surcharges. Certain charters, including contracts of affreightment and
consecutive voyage charters, generally provide for fuel escalation charges,
but do not fully protect the Partnership when the price of fuel increases.
These charges generally increase revenue, but only serve to partially
offset the increase in fuel expenses. Revenue for the three months ended
June 30, 2008 included $4.4 million of fuel surcharges, compared to $2.6
million for the three months ended June 30, 2007.
For the three months ended June 30, 2008, revenues from our chemical fleet
were $20.1 million, an increase of $5.4 million over the three months ended
June 30, 2007. The ATB Freeport contributed $4.5 million of this increase;
the remainder of the increase was due to increased charter rates and fuel
surcharges. Revenue from the remainder of the Partnership's vessels, which
consist of the six ITBs and the product tanker Houston, were $29.8 million
for the three months ended June 30, 2008, a decrease of $1.1 million from
the comparable period in 2007. The decrease in revenue is largely due to
the deferral of recognition of revenue of $5.5 million attributable to two
grain voyages that commenced in the second quarter of 2008 that will be
recognized in the third quarter of 2008 upon delivery of the grain to its
final destination, as well as increased offhire days due to reduced demand
in the spot market for transportation of petroleum products and required
repairs to the ITB New York. The decrease in revenues from the
Partnership's ITB fleet was partially offset by the fact that the
Partnership obtained higher rates than it would have received if the
vessels had been operating on time charters, as the Partnership was
responsible for the payment of voyage expenses.
During the three months ended June 30, 2008, voyage expenses increased by
$8.6 million over the prior year due to the addition of the ATB Freeport,
which contributed $1.4 million in voyage expenses, coupled with increases
in fuel, port, commission and other costs on the remaining fleet of
approximately $7.2 million. Approximately $3.8 million of the $7.2 million
increase related to increased fuel costs, which were only partially offset
by the $0.8 million of increased fuel surcharge revenue, and approximately
$2.8 million related to the cost of readying our ITBs to transport grain. A
significant increase in voyage expenses is due to the loss of two time
charters for our ITBs in 2008 resulting in the Partnership incurring voyage
expenses that it previously did not incur under time charters. The impact
of these additional voyage expenses increased revenues as rates are
generally higher to compensate for these voyage expenses that were
previously incurred by the customer under a time charter. Because we do
not recognize voyage expenses related to our grain voyages until the voyage
is completed, voyage expenses for the three months ended June 30, 2008 do
not include approximately $2.3 million of expenses related to grain voyages
commenced in the second quarter of 2008 yet completed in July 2008.
During the three months ended June 30, 2008 vessel operating expenses
decreased $1.0 million from the second quarter of 2007, primarily due to a
$2.2 million net reduction in expenditures on supplies, repairs and
maintenance, safety and training. This decrease was partially offset by
the addition of the ATB Freeport, which increased vessel operating expenses
by $1.1 million. There was a net $0.1 million increase in all other vessel
operating expenses.
General and administrative expenses decreased $0.2 million in the three
months ended June 30, 2008 compared to the same period in 2007. A decrease
in personnel expense of $0.6 million was partially offset by an increase in
professional fees consisting of legal, accounting and consulting fees
primarily related to our review of strategic alternatives, of $0.4 million.
During the three months ended June 30, 2008, depreciation and amortization
expense increased by $1.4 million from the same period in 2007. The
increase is primarily due to additional amortization of drydock
expenditures of $1.0 million, principally resulting from drydocks completed
in 2007, and $0.8 million attributable to the addition of the ATB Freeport.
These increases to depreciation and amortization expense were partially
offset by a decrease of $0.4 million resulting from an adjustment of to the
values assigned to the vessels in the original purchase of the ITBs due to
net payments made to us under the Hess Support Agreement, which under GAAP
were considered an adjustment to the original purchase price.
Other expense in the three month ended June 30, 2008 of $45 reflects a loss
related to the sale of surplus equipment. There was not other expense or
income in the three months ended June 30, 2007.
Interest expense increased by $0.2 million for the three months ended June
30, 2008 compared to the same period in 2007 due primarily to increased
borrowings. Interest income earned by the Partnership decreased by $2.0
million, due primarily to reduced balances in the Partnership's restricted
cash accounts. Funds were released in connection with the construction of
the ATBs and the tankers being constructed by the joint venture entered
into by the Partnership in 2006 (the "Joint Venture"). The restricted cash
accounts consist of two escrow accounts which were established as part of
the Partnership's 2006 debt and equity financings to fund the construction
of three new ATBs and the Partnership's remaining committed equity
contributions to the Joint Venture. Interest income will continue to
decrease as funds in these escrow accounts are used to fund the
construction of the three new ATBs and the Partnership's equity
contributions to the Joint Venture. As previously announced, the
Partnership is in discussions to amend certain financial covenant ratios in
its senior credit agreement; any amendment to these financial covenants
will require the payment of fees and a higher rate of interest, which will
negatively impact the Partnership's results of operations.
For the second quarter of 2008, the Joint Venture recorded gains of $0.6
million on derivative financial instruments while the Partnership recorded
no gains or losses on derivative financial instruments.
The net loss per basic and diluted limited partnership unit for the three
months ended June 30, 2008 was $0.14 compared to net income per basic and
diluted limited partnership unit of $0.13 for the three months ended June
30, 2007.
Adjusted EBITDA decreased by $3.2 million to $12.5 million for the three
months ended June 30, 2008 from $15.7 million for the comparable period in
2007. The decrease was primarily due to an increase in voyage expenses of
$8.6 million. Additionally, there was a $0.3 million decrease in gains on
derivative financial instruments. These decreases were offset by an
increase in voyage revenues of $4.2 million coupled with a decrease in
vessel operating expenses of $1.0 million, a decrease of $0.2 million in
general and administrative expense and a favorable variance of $0.3 million
in the noncontrolling interest in the Joint Venture. Adjusted EBITDA is a
non-GAAP measure explained in greater detail below under "Use of Non-GAAP
Financial Information."
Six Months Ended June 30, 2008
The Partnership's net loss for the six months ending June 30, 2008 was $8.5
million compared to net income of $8.2 million for the same period in 2007.
Operating income was $2.1 million for the six months ending June 30, 2008
compared to $16.6 million in the same period in 2007. Net loss per basic
and diluted limited partnership unit in 2008 was $0.45 compared to a net
income per basic and diluted limited partnership unit in 2007 of $0.44.
Voyage revenue was $101.3 million for the six months ended June 30, 2008,
an increase of $13.6 million from $87.7 million for the six months ended
June 30, 2007. Revenues are affected by several factors, such as the mix
of charter types; the charter rates attainable in the market; fleet
utilization and other items such as fuel surcharges. Certain charters,
including contracts of affreightment and consecutive voyage charters
generally provide for fuel escalation charges, but do not protect the
Partnership fully when the price of fuel increases. These charges
generally increase revenue, but only serve to partially offset the increase
in fuel expenses. Revenue for the six months ended June 30, 2008 included
$9.5 million of fuel surcharges, compared to $4.3 million for the six
months ended June 30, 2007.
For the six months ended June 30, 2008, revenues from our chemical fleet
were $39.5 million, an increase of $10.6 million over the six months ended
June 30, 2007. The ATB Freeport contributed $8.7 million of this increase;
the remainder of the increase was due to increased charter rates and fuel
surcharges. Revenue related to the Partnership's ITB fleet and the product
tanker Houston were $61.8 million for the six months ended June 30, 2008,
an increase of approximately $3.0 million from the comparable period in
2007. The increase in revenue for the ITB fleet revenue for the first half
of 2008 was due primarily to approximately $3.0 million of revenue from a
grain voyage the recognition of which was deferred from December 2007 until
the grain reached its final destination in February 2008. Furthermore, the
Partnership experienced increased revenues from obtaining higher rates than
it would have received if the vessels had been operating on time charters,
as the Partnership was responsible for the payment of voyage expenses, as
well as increased days worked (due to 2008 being a leap year). The
increase in revenue was partially offset by the ITBs being offhire more
days in the first half of 2008 compared to the first half of 2007 and the
deferral of recognition of $5.5 million of revenue attributable to two
grain voyages that commenced in the second quarter of 2008 that will be
recognized in the third quarter of 2008, when the grain reached its final
destination. At June 30, 2008, total deferred costs for these grain
voyages were approximately $2.3 million. Revenue related to the
Partnership's chemical fleet (other than the ATB Freeport) increased by
$1.9 million from the comparable period in 2007 due to increased charter
rates.
During the six months ended June 30, 2008, voyage expenses increased by
$14.9 million over the prior year due to the addition of the ATB Freeport,
which contributed $3.0 million in additional voyage expenses, along with
increases in fuel, port, and commission costs on the remaining fleet of
approximately $7.3 million. Approximately $6.2 million of this $7.3
million increase related to increased fuel costs, which were partially
offset by the $3.2 million of increased fuel surcharge revenue. In
addition, grain voyage related voyage expenses including tank cleaning
increased by $4.6 million for the ITB Philadelphia, ITB Jacksonville, and
ITB Baltimore in the first half of 2008. The significant increase in voyage
expenses is due to the loss of two time charters in our ITBs in 2008
resulting in the Partnership incurring voyage costs that it previously did
not under time charters. The impact of these additional voyage costs
increased revenues as rates are higher to compensate for these voyage
expenses that were previously incurred by the customer under a time
charter.
During the six months ended June 30, 2008 vessel operating expenses
increased $1.1 million from the second quarter of 2007, primarily due to
the addition of the ATB Freeport, which contributed $2.4 million in vessel
operating expenses. Additionally, crew wages and benefits increased by $.9
million and all other vessel operating expenses increased by $0.2 million.
The increase in crew wages and benefits resulted from new collective
bargaining agreements with the unions that cover the crew members and
officers of our vessels effective in the second and third quarters of 2007,
respectively. These increases were offset by a $2.4 million net decrease
in expenditures for supplies and repairs and maintenance.
There was no change in general and administrative expenses in the six
months ended June 30, 2008 compared to the same period in 2007. An
increase in professional fees, consisting of legal, accounting and
consulting fees, and directors fees of $1.0 million were offset by a net
decrease in personnel expenses of $1.0 million.
During the six months ended June 30, 2008, depreciation and amortization
expense increased by $2.8 million from the same period in 2007. The
increase is primarily due to additional amortization of drydock
expenditures of $2.0 million, principally resulting from drydocks completed
in 2007, and $1.6 million attributable to the addition of the ATB Freeport.
These increases to depreciation and amortization expense were partially
offset by a decrease of $0.7 million resulting from an adjustment of to the
values assigned to the vessels in the original purchase of the ITBs due to
net payments made to us under the Hess Support Agreement, which under GAAP
were considered an adjustment to the original purchase price.
Interest expense increased by $1.2 million for the six months ended June
30, 2008 compared to the same period in 2007 due primarily to increased
borrowings. Interest income earned by the Partnership decreased by $3.6
million, due primarily to reduced balances in the Partnership's restricted
cash accounts as funds were released in connection with the construction of
the ATBs and the tankers being constructed by the Joint Venture.
The Partnership recorded gains on derivative financial instruments of $0.7
million and the Joint Venture recorded gains of $0.3 million on derivative
financial instruments during the six months ended June 30, 2008.
Adjusted EBITDA decreased by $5.0 million to $30.2 million for the six
months ended June 30, 2008 from $35.2 million for the comparable period in
2007. The decrease was primarily due to an increase in voyage expenses of
$14.9 million, the recognition of a $3.5 million contract settlement in
the first half of 2007 and increased vessel operating expenses of $1.1
million These decreases were partially offset by an increase in voyage
revenues of $13.6 million. Additionally, adjusted EBITDA for the 2008
period reflects a $0.7 million favorable variance related to the
noncontrolling interest in the of the Joint Venture and a $.1 million
increase on derivative financial instruments recorded by the Partnership
and the Joint Venture. Adjusted EBITDA is a non-GAAP measure explained in
greater detail below under "Use of Non-GAAP Financial Information."
Liquidity
During the first half of 2008, all but one of the Partnership's ITBs began
to operate in the spot market for the transportation of petroleum products,
which has increased the volatility of the Partnership's revenues and
working capital requirements, and decreased the predictability of its cash
flows. Beginning in late March 2008, market conditions in the spot market
deteriorated substantially due to the overall softening of U.S. economic
activity and decreased demand for the domestic coastwise transportation of
petroleum products. Additionally, refinery utilization has declined
considerably, fuel prices for operating the Partnership's vessels are at
record levels and newbuilds have increased capacity serving the Jones Act
market at a faster rate than demand and the expected decrease in capacity
due to the required phase-outs under the Oil Pollution Act of 1990. Due to
these market shifts, the ITBs have recently incurred idle periods greater
than, and charter rates below, the Partnership's expectations at the
beginning of 2008. During the first half of 2008, the Partnership also
experienced modest decreased demand for the domestic coastwise
transportation of chemical products served by its chemical transporting
vessels, which the Partnership believes was primarily due to its customers
working off inventory levels due to the decline in economic activity.
As a result, the Partnership's cash flows and liquidity have come under
increasing pressure due to the current difficult market conditions, which
has substantially increased the likelihood that the Partnership will not be
able to remain in compliance with certain financial covenants relating to
leverage (debt to EBITDA) and fixed charge and interest coverage under its
senior credit facility as early as the end of the third quarter of 2008.
The Partnership is currently in compliance with all its financial covenants
as of the end of the second quarter of 2008. We expect to generate
sufficient cash, together with borrowings under its revolving credit
facility, to make interest payments and scheduled principal payments on its
debt.
Additionally, participation in the spot market requires the Partnership to
carry higher amounts of working capital, as under spot charters fuel costs
are the Partnership's responsibility and are paid at the time fuel is
delivered, and not realized economically until payment is made to USS by
the customer. Additionally, payment generally occurs at the completion of
a voyage, compared to time charters, where payment is generally made by the
customer at the beginning of a fixed period of time, such as a month. In
addition, grain voyages, where the Partnership is paid at the end of the
voyage when the grain reaches its final destination, tend to be
substantially longer in duration than refined petroleum product voyages.
As the Partnership adds two additional vessels in 2008 and its ITBs
participate more in the spot market, USS expects its working capital
requirements to increase. The Partnership has limited availability under
its credit facility to finance this increase in working capital
requirements.
In response to these issues, the Partnership has retained Greenhill & Co.,
LLC and Jefferies & Company, Inc. to assist it in exploring strategic
alternatives, including either the possible sale of the business or the
sale of new equity, and other ways to increase liquidity and strengthen the
financial resources of the Partnership. In order to give the Partnership
adequate time to pursue strategic alternatives, the Partnership has entered
into negotiations with its lenders to amend certain financial ratio
covenants under its senior credit facility. Based on discussions to date
with its lenders regarding an amendment to the senior credit facility, the
Partnership believes any amendment will require the payment of additional
fees and a higher interest rate and will prohibit the payment of
distributions on any units until the current senior credit facility is
repaid. There can be no assurance that we will be successful in obtaining
an amendment to our senior credit facility on acceptable economic terms.
If we are not in compliance with our financial covenants, our lenders have
a number of remedies, including declaring all outstanding borrowings to be
immediately due and payable and refusing to make funds available under the
revolving credit facility. In addition, we would be prohibited from making
distributions on our common units until we are again in compliance,
although any unpaid distributions will continue to accrue on the common
units. Furthermore, the lenders under the senior credit facility could
prohibit us from paying interest on the senior notes.
About U.S. Shipping Partners L.P.
U.S. Shipping Partners L.P. is a leading provider of long-haul marine
transportation services, principally for refined petroleum products,
petrochemical and commodity chemical products, in the U.S. domestic
"coastwise" trade. The Partnership's existing fleet consists of eleven
tank vessels: six integrated tug barge units; one product tanker; three
chemical parcel tankers and one ATB that was delivered in June 2007 and
entered service in July 2007. The Partnership has embarked on a capital
construction program to build additional ATBs and, through a joint venture,
additional tank vessels that upon completion will result in the Partnership
having one of the most modern fleets in service. For additional
information about U.S. Shipping Partners L.P., please visit
www.usslp.com.
Use of Non-GAAP Financial Information
U.S. Shipping Partners L.P. reports its financial results in accordance
with generally accepted accounting principles. However, we also present
Adjusted EBITDA, a non-GAAP financial measure that is used as a
supplemental financial measure by management and by external users
(including our lenders) of our financial statements to assess (a) the
financial performance of our assets, and our ability to generate cash
sufficient to pay interest on our indebtedness and make distributions to
partners, (b) our operating performance and return on invested capital as
compared to other companies in our industry, and (c) our compliance with
certain financial covenants in our debt agreements. The calculation of
Adjusted EBITDA is detailed in the table below, together with a
reconciliation of Adjusted EBITDA to the most directly comparable GAAP
measurement. Adjusted EBITDA should not be considered an alternative to
net income, operating income, cash flow from operating activities, or any
other measure of financial performance or liquidity under GAAP. Adjusted
EBITDA as presented herein may not be comparable to similarly titled
measures of other companies.
This press release may include "forward-looking statements" as defined by
the Securities and Exchange Commission. All statements, other than
statements of historical facts, included in this press release that address
activities, events or developments that the Partnership expects, believes
or anticipates will or may occur in the future are forward-looking
statements. These statements are based on certain assumptions made by the
Partnership based on its experience and perception of historical trends,
current conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Such statements are subject
to a number of assumptions, risks and uncertainties, many of which are
beyond the control of the Partnership, which may cause our actual results
to differ materially from those implied or expressed by the forward-looking
statements. Such assumptions, risks and uncertainties are discussed in
detail in the Partnership's filings with the SEC and include, among other
things, the willingness of our lenders to amend our credit agreement on
commercially acceptable terms and to continue to make advances to us under
our revolving credit facility to meet our working capital requirements,
increased financing costs, no occurrence of an event of default under our
credit agreement that would allow our lenders to demand immediate repayment
of all outstanding borrowings under the credit facility, future charter
rates, demand in the spot market for vessels and timely and on-budget
delivery in the second half of 2008 of two ATBs currently under
construction.
U.S. Shipping Partners L.P.
Consolidated Statements of Operations
(in thousands, except for per unit data) (unaudited)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Voyage revenue $ 49,819 $ 45,621 $ 101,323 $ 87,703
--------- --------- --------- ---------
Vessel operating expenses 16,384 17,407 33,405 32,325
% of voyage revenue 32.9% 38.2% 33.0% 36.9%
Voyage expenses 17,331 8,712 31,010 16,149
% of voyage revenue 34.8% 19.1% 30.6% 18.4%
General and administrative
expenses 4,011 4,241 8,005 8,006
% of voyage revenue 8.1% 9.3% 7.9% 9.1%
Depreciation and amortization 10,445 9,054 20,949 18,102
Other expense (income) 45 - 5,832 (3,486)
--------- --------- --------- ---------
Total operating expenses,
net 48,216 39,414 99,201 71,096
--------- --------- --------- ---------
Operating income 1,603 6,207 2,122 16,607
% of voyage revenue 3.2% 13.6% 2.1% 18.9%
Interest expense 6,879 6,655 14,770 13,572
Interest income (655) (2,572) (1,695) (5,247)
Net gains on derivative
financial instruments (586) (904) (1,028) (904)
--------- --------- --------- ---------
(Loss) income before income
taxes and noncontrolling
interest (4,035) 3,028 (9,925) 9,186
(Benefit) provision for income
taxes (1,514) 202 (1,222) 622
--------- --------- --------- ---------
(Loss) income before
noncontrolling interest (2,521) 2,826 (8,703) 8,564
Noncontrolling interest in
Joint Venture (income) loss (162) (418) 242 (407)
--------- --------- --------- ---------
Net (loss) income $ (2,683) $ 2,408 $ (8,461) $ 8,157
========= ========= ========= =========
General partner's interest in
net (loss) income $ (54) $ 48 $ (169) $ 163
Limited partners' interest in:
Net (loss) income $ (2,629) $ 2,360 $ (8,292) $ 7,944
Net (loss) income per unit -
basic and diluted $ (0.14) $ 0.13 $ (0.45) $ 0.44
Weighted average units
outstanding - basic 18,254 18,234 18,244 18,234
Weighted average units
outstanding - diluted 18,254 18,235 18,244 18,234
U.S. Shipping Partners L.P.
Supplemental Operating Statistics
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Total fleet
Vessel days 1,001 910 2,002 1,810
Days worked (1) 937 896 1,922 1,789
Drydocking days - 6 - 6
Net utilization (1) (2) 94% 98% 96% 99%
Average time charter equivalent
rate (3) (4) $ 36,310 $ 41,193 $ 37,424 $ 39,997
(1) There were 19 days of unscheduled off-hire in the first quarter of 2008
that were required to complete repairs to one of the engines on the ITB
Philadelphia damaged enroute back to New York during the grain voyage
in February 2008. There were also 25 days of unscheduled off-hire on
the ITB New York in the second quarter of 2008 for port stern tube
repairs. As a result, days worked for the six months ended June 30,
2008 is reduced by these days and net utilization is negatively
affected.
(2) Net utilization is equal to the total number of days worked by our
vessels during a defined period, divided by total vessel days (number
of vessels x calendar days) for that period.
(3) Average time charter equivalent rate is equal to net voyage revenue
earned by our vessels during a defined period, divided by the total
number of actual days worked by those vessels during that period
adjusted for any deferred revenue days. Net voyage revenue is
calculated by subtracting voyage expenses from voyage revenue.
(4) The calculations of average time charter equivalent rate for the six
months ended June 30, 2008 include both the revenue and eighteen days
worked by the ITB Philadelphia for which no net voyage revenue was
recorded in 2007. Furthermore, the 2008 calculation for the six months
ended June 30, 2008 of average time charter equivalent rate does not
include approximately forty three days worked by the ITB Baltimore for
which no net voyage revenue was recorded in 2008.
U.S. Shipping Partners L.P.
Reconciliation of Non-GAAP Financial Measures to GAAP Measures
(in thousands) (unaudited)
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and Earnings before Interest, Taxes, Depreciation and Amortization and
Other Non-Cash Expense (Adjusted EBITDA)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
--------------------- ---------------------
2008 2007 2008 2007
--------- ---------- --------- ----------
Net (loss) income $ (2,683) $ 2,408 $ (8,461) $ 8,157
Adjustments to reconcile net
(loss) income to EBITDA and
Adjusted EBITDA:
Depreciation and amortization 10,445 9,054 20,949 18,102
Interest expense, net 6,224 4,083 13,075 8,325
(Benefit) provision for income
taxes (1,514) 202 (1,222) 622
--------- ---------- --------- ----------
EBITDA 12,472 15,747 24,341 35,206
Other non-cash expense 45 - 5,832 -
--------- ---------- --------- ----------
Adjusted EBITDA $ 12,517 $ 15,747 $ 30,173 $ 35,206
========= ========== ========= ==========
Contact Information: Contact Information:
Albert Bergeron
Chief Financial Officer
U.S. Shipping Partners L.P.
1-866-467-2400