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Overseas Shipholding Group Reports Fourth Quarter and Full Year 2023 Results

Overseas Shipholding Group, Inc. (NYSE: OSG) (the “Company” or “OSG”), a leading provider of liquid bulk transportation services in the energy industry for crude oil and petroleum products in the U.S. Flag markets, today reported results for the fourth quarter and full year 2023.

  • 2023 net income was $62.5 million, or $0.77 per diluted share, compared to net income of $26.6 million, or $0.29 per diluted share, in 2022. Net income for the fourth quarter of 2023 was $20.4 million, or $0.26 per diluted share, compared to net income of $10.1 million, or $0.11 per diluted share, for the fourth quarter of 2022.
  • Full year Adjusted EBITDA(A), a non-GAAP measure, for 2023 was $175.7 million, an increase of $32.9 million, or 23.1%, from 2022. Fourth quarter 2023 Adjusted EBITDA was $47.3 million, an increase of $3.6 million, or 8.4%, from the fourth quarter of 2022.
  • Shipping revenues for 2023 were $451.9 million, a decrease of $14.9 million, or 3.2%, compared to 2022. Shipping revenues for the fourth quarter of 2023 were $116.0 million, a decrease of $5.7 million, or 4.7%, compared to the fourth quarter of 2022. The decreases in shipping revenues primarily resulted from fewer vessels in our fleet, as we redelivered three conventional tankers leased from American Shipping Company in December 2022.
  • Time charter equivalent (TCE) revenues(B), a non-GAAP measure, for 2023 were $423.5 million, a decrease of $2.8 million, or 0.7%, from $426.3 million in 2022. TCE revenues for the fourth quarter of 2023 were $110.1 million, a decrease of $4.0 million, or 3.5%, compared to the fourth quarter of 2022.
  • Total cash and investments(c) were $91.2 million as of December 31, 2023.
  • In October 2023, the Company prepaid, at a discount, $5.6 million to subsidiaries of American Shipping Corporation representing all of its remaining outstanding deferred payment obligations, recognizing a gain of $912 thousand.
  • In November 2023, the Company purchased the Alaskan Frontier for $20.0 million. The Company plans to make significant investments in the vessel for it to begin commercial trade by the fourth quarter of 2024.
  • On December 6, 2023, the Company's Board of Directors declared a cash dividend of $0.06 per share on the Company's Class A common stock, which was paid on January 4, 2024.
  • During the fourth quarter of 2023, the Company repurchased 1,425,000 shares for total consideration of $6.8 million. As of December 31, 2023, the Company had 70,946,476 common shares outstanding compared to 78,297,439 at the end of 2022, a 9.4% reduction, as a result of 2023 repurchases of the Company's common stock.

Sam Norton, OSG's President and CEO, said, “Following the positive results reported, it would be appropriate to state that we have ‘stuck the landing’ with our 4th quarter performance. The quarter’s contribution led to meeting our adjusted EBITDA target of $175mm for the full year, a 23.1% gain over 2022, despite having three fewer vessels in operation in 2023. The benefits of charterparties fixed at escalating rates over the past several quarters are now being realized, producing strong cashflow and providing the means to make continued progress in meeting our key capital allocation goals. Previously announced capital investments in our Alaska class vessels, the purchase of 1.425 million shares during the 4th quarter, and the approval of the first dividend payment in many years underscore this point.”

Mr. Norton continued, “Strong fundamentals have continued to support charterer interest in our vessels. Significantly, at year end, we agreed to employ the Alaskan Explorer to transport US Gulf Coast crude oil to one of our Delaware Bay refining customers, demonstrating the existence of employment options for this class of vessel outside of its traditional Alaskan market. Taken together with three other vessel fixtures concluded in early 2024, OSG has added 116 months of forward charter cover since our last earnings report, increasing the value of our forward charter book to over $860 million in time charter equivalent earnings as of the beginning of March 2024.”

Mr. Norton concluded by stating, “We couldn’t be more pleased with our 2023 results and believe we are well-positioned now, and over the long term, to generate strong cash flows in what we expect to be a durably balanced market characterized by stable demand and constrained supply.”

The Company also recently exercised its first option to extend the bareboat charter of the Overseas Tampa with its vessel owner for a 5-year option period, commencing June 2025 until June 2030. Additional options to extend remain.

 

A, B, C Reconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8.

Full Year 2023 Results

Shipping revenues were $451.9 million for 2023, down 3.2% compared with 2022. TCE revenues for 2023 were $423.5 million, a decrease of $2.8 million, or 0.7%, compared with 2022. The decreases primarily resulted from (a) fewer vessels in our fleet, as we redelivered three conventional tankers leased from American Shipping Company in December 2022, (b) a 24-day increase in drydock days, and (c) fewer U.S. Military Sealift Command voyages, which were longer international voyages, during 2023 compared to 2022. The decreases were partially offset by a 297-day decrease in layup days. We had no vessels in layup during 2023. During the first quarter of 2022, we had two vessels in layup for the full quarter and two additional vessels that came out of layup in January 2022 and late February 2022. Our remaining two vessels in layup returned to service in May 2022. Additionally, the decreases were partially offset by (a) an increase in average daily rates earned by our fleet, (b) an increase in Delaware Bay lightering volumes, and (c) an 11-day decrease in repair days.

Operating income for 2023 was $96.9 million, compared to operating income of $63.2 million for 2022. Net income for 2023 was $62.5 million, or $0.77 per diluted share, compared with net income of $26.6 million, or $0.29 per diluted share, for 2022. The increases in operating and net income primarily reflected decreases in voyage, vessel, and charter hire expenses of $46.4 million when compared to 2022. The decrease in voyage expenses was primarily due to decreases in fuel and port expenses, as our vessels performed fewer voyage charters during 2023 compared to 2022. The decreases in vessel and charter hire expenses were primarily due to the redelivery of three conventional tankers referred to above.

Adjusted EBITDA was $175.7 million for 2023, an increase of $32.9 million compared with 2022.

Fourth Quarter 2023 Results

Shipping revenues were $116.0 million for the fourth quarter of 2023, a decrease of $5.7 million, or 4.7%, compared to the fourth quarter of 2022. TCE revenues were $110.1 million for the fourth quarter of 2023, a decrease of $4.0 million, or 3.5%, from the fourth quarter of 2022. The decreases primarily resulted from fewer vessels in our fleet, due to the redelivery of three conventional tankers discussed above and a 29-day increase in drydock days. The decrease was partially offset by an increase in average daily rates earned by our fleet and an increase in Delaware Bay lightering volumes.

Operating income for the fourth quarter of 2023 was $25.9 million compared to operating income of $20.4 million for the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $20.4 million, or $0.26 per diluted share, compared with net income of $10.1 million, or $0.11 per diluted share, for the fourth quarter of 2022. The increases in operating and net income primarily reflected decreases in voyage, vessel, and charter hire expenses of $9.9 million when compared to the fourth quarter of 2022. The decrease in voyage expenses was primarily due to decreases in fuel and port expenses, as our vessels performed fewer voyage charters during the fourth quarter of 2023 compared to the fourth quarter of 2022. The decreases in vessel and charter hire expenses were primarily due to the redelivery of three conventional tankers referred to above.

Adjusted EBITDA was $47.3 million for the 2023 fourth quarter, an increase of $3.6 million compared with the fourth quarter of 2022, driven primarily by the increases in operating and net income.

Conference Call

The Company will host a conference call to discuss its fourth quarter and full year 2023 results at 9:30 a.m. Eastern Time on Monday, March 11, 2024.

To access the call, participants should dial (844) 850-0546 for U.S. callers and (412) 317-5203 for international callers.

Participants have an option of calling in to listen or watching a live audio webcast and slide presentation available at the Investors section of the Company’s website located at www.osg.com/investors. A replay of the webcast will also be available on the website after the completion of the call.

About Overseas Shipholding Group, Inc.

Overseas Shipholding Group, Inc. (NYSE:OSG) is a publicly traded company providing liquid bulk transportation services in the U.S. Flag markets. OSG’s U.S. Flag fleet consists of Suezmax crude oil tankers, conventional and lightering ATBs, shuttle and conventional MR tankers, and non-Jones Act MR tankers that participate in the U.S. Tanker Security Program.

OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, the Company may make or approve certain forward-looking statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical fact should be considered forward-looking statements. These matters or statements may relate to our prospects, supply and demand for vessels in the markets in which we operate and the impact on market rates and vessel earnings, the continued stability of our niche businesses, the impact of our time charter contracts on our future financial performance, and external events including geopolitical conflicts such as the Russia/Ukraine conflict and recent developments in the Middle East. Forward-looking statements are based on our current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in our filings with the SEC. We do not assume any obligation to update or revise any forward-looking statements except as may be required by applicable law. Forward-looking statements and written and oral forward-looking statements attributable to us or our representatives after the date of this press release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by us with the SEC.

Consolidated Statements of Operations

($ in thousands, except per share amounts)

 

 

 

Three Months Ended

December 31,

 

 

Years Ended

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

Shipping Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time and bareboat charter revenues

 

$

94,922

 

 

$

94,394

 

 

$

359,543

 

 

$

327,329

 

Voyage charter revenues

 

 

21,098

 

 

 

27,363

 

 

 

92,328

 

 

 

139,471

 

 

 

 

116,020

 

 

 

121,757

 

 

 

451,871

 

 

 

466,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Voyage expenses

 

 

5,932

 

 

 

7,659

 

 

 

28,344

 

 

 

40,472

 

Vessel expenses

 

 

42,908

 

 

 

46,285

 

 

 

166,246

 

 

 

176,666

 

Charter hire expenses

 

 

16,983

 

 

 

21,760

 

 

 

64,971

 

 

 

88,849

 

Depreciation and amortization

 

 

17,664

 

 

 

19,579

 

 

 

67,164

 

 

 

70,637

 

General and administrative

 

 

6,612

 

 

 

6,056

 

 

 

28,223

 

 

 

26,985

 

Total operating expenses

 

 

90,099

 

 

 

101,339

 

 

 

354,948

 

 

 

403,609

 

Operating income from vessel operations

 

 

25,921

 

 

 

20,418

 

 

 

96,923

 

 

 

63,191

 

Other income, net

 

 

2,483

 

 

 

2,678

 

 

 

6,666

 

 

 

3,327

 

Income before interest expense and income taxes

 

 

28,404

 

 

 

23,096

 

 

 

103,589

 

 

 

66,518

 

Interest expense, net

 

 

(7,196

)

 

 

(8,191

)

 

 

(31,216

)

 

 

(33,060

)

Income before income taxes

 

 

21,208

 

 

 

14,905

 

 

 

72,373

 

 

 

33,458

 

Income tax expense

 

 

(788

)

 

 

(4,820

)

 

 

(9,919

)

 

 

(6,894

)

Net income

 

$

20,420

 

 

$

10,085

 

 

$

62,454

 

 

$

26,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic - Class A

 

 

72,377,107

 

 

 

84,902,097

 

 

 

78,485,954

 

 

 

89,556,195

 

Diluted - Class A

 

 

75,294,158

 

 

 

87,380,404

 

 

 

81,231,761

 

 

 

91,400,041

 

Per Share Amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income - Class A

 

$

0.28

 

 

$

0.12

 

 

$

0.80

 

 

$

0.30

 

Diluted net income - Class A

 

$

0.26

 

 

$

0.11

 

 

$

0.77

 

 

$

0.29

 

Consolidated Balance Sheets

($ in thousands)

 

 

 

December 31,

2023

 

 

December 31,

2022

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,257

 

 

$

78,732

 

Investment security to be held to maturity

 

 

14,900

 

 

 

Voyage receivables, including unbilled of $4,976 and $11,364, net of reserve for credit losses

 

 

17,362

 

 

 

19,698

 

Income tax recoverable

 

 

407

 

 

 

1,914

 

Other receivables

 

 

3,140

 

 

 

5,334

 

Prepaid expenses

 

 

662

 

 

 

385

 

Inventories and other current assets

 

 

1,860

 

 

 

2,283

 

Total Current Assets

 

 

114,588

 

 

 

108,346

 

Vessels and other property, less accumulated depreciation and amortization

 

 

699,032

 

 

 

726,179

 

Deferred drydock expenditures, net

 

 

44,827

 

 

 

38,976

 

Total Vessels, Deferred Drydock and Other Property

 

 

743,859

 

 

 

765,155

 

Intangible assets, less accumulated amortization

 

 

13,417

 

 

 

18,017

 

Operating lease right-of-use assets

 

 

172,703

 

 

 

206,797

 

Investment security to be held to maturity

 

 

 

 

14,803

 

Other assets

 

 

34,317

 

 

 

25,945

 

Total Assets

 

$

1,078,884

 

 

$

1,139,063

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

60,911

 

 

$

54,906

 

Current installments of long-term debt

 

 

43,305

 

 

 

23,733

 

Current portion of operating lease liabilities

 

 

65,272

 

 

 

63,288

 

Current portion of finance lease liabilities

 

 

 

 

4,000

 

Total Current Liabilities

 

 

169,488

 

 

 

145,927

 

Reserve for uncertain tax positions

 

 

285

 

 

 

175

 

Long-term debt, net

 

 

357,406

 

 

 

399,630

 

Deferred income taxes, net

 

 

79,373

 

 

 

70,233

 

Noncurrent operating lease liabilities

 

 

107,911

 

 

 

149,960

 

Noncurrent finance lease liabilities

 

 

 

 

16,456

 

Other liabilities

 

 

10,368

 

 

 

16,997

 

Total Liabilities

 

 

724,831

 

 

 

799,378

 

Equity:

 

 

 

 

 

 

Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 89,545,535 and 88,297,439 shares issued; 70,946,476 and 78,297,439 shares outstanding)

 

 

895

 

 

 

883

 

Paid-in additional capital

 

 

588,361

 

 

 

597,455

 

Accumulated deficit

 

 

(174,825

)

 

 

(233,023

)

Treasury stock, 18,599,059 and 10,000,000 shares, at cost

 

 

(64,380

)

 

 

(29,040

)

 

 

 

350,051

 

 

 

336,275

 

Accumulated other comprehensive income

 

 

4,002

 

 

 

3,410

 

Total Equity

 

 

354,053

 

 

 

339,685

 

Total Liabilities and Equity

 

$

1,078,884

 

 

$

1,139,063

 

Consolidated Statements of Cash Flows

($ in thousands)

 

 

Years Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

62,454

 

 

$

26,564

 

 

$

(46,252

)

Items included in net income not affecting cash flows:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

67,164

 

 

 

70,637

 

 

 

61,823

 

Bad debt recovery

 

 

 

 

 

 

 

 

(1,080

)

Amortization of debt discount and other deferred financing costs

 

 

1,142

 

 

 

1,129

 

 

 

2,099

 

Compensation relating to restricted stock, stock unit and stock option grants

 

 

3,471

 

 

 

3,574

 

 

 

2,232

 

Deferred income tax expense/(benefit)

 

 

8,974

 

 

 

6,347

 

 

 

(18,236

)

Interest on finance lease liabilities

 

 

917

 

 

 

1,618

 

 

 

1,799

 

Non-cash operating lease expense

 

 

65,751

 

 

 

89,127

 

 

 

90,863

 

Items included in net income related to investing and financing activities:

 

 

 

 

 

 

 

 

 

Gain on prepayment of deferred payment obligations

 

 

(912

)

 

 

 

 

 

 

Loss on extinguishment and prepayments of debt, net

 

 

 

 

 

 

 

 

5,295

 

Loss on disposal of vessels and other property, including impairments, net

 

 

 

 

 

 

 

 

6,276

 

Payments for drydocking

 

 

(23,138

)

 

 

(17,231

)

 

 

(19,037

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Operating lease liabilities

 

 

(73,074

)

 

 

(99,808

)

 

 

(92,634

)

Decrease/(increase) in receivables

 

 

2,336

 

 

 

(5,112

)

 

 

(384

)

Increase/(decrease) in income tax receivable

 

 

1,507

 

 

 

(32

)

 

 

(1,495

)

(Decrease)/increase in deferred revenue

 

 

(6,026

)

 

 

3,435

 

 

 

9,666

 

Net change in other operating assets and liabilities

 

 

(7,608

)

 

 

(7,425

)

 

 

(12,767

)

Net cash provided by/(used in) operating activities

 

 

102,958

 

 

 

72,823

 

 

 

(11,832

)

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Expenditures for vessels and vessel improvements

 

 

(30,789

)

 

 

(6,354

)

 

 

(7,793

)

Purchase of investment security to be held to maturity

 

 

 

 

 

(14,794

)

 

 

 

Proceeds from disposal of vessels and other property

 

 

 

 

 

 

 

 

32,128

 

Net cash (used in)/provided by investing activities

 

 

(30,789

)

 

 

(21,148

)

 

 

24,335

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Payments on debt

 

 

(23,730

)

 

 

(22,222

)

 

 

(33,316

)

Tax withholding on share-based awards

 

 

(1,168

)

 

 

(496

)

 

 

(402

)

Payments on principal portion of finance lease liabilities

 

 

(2,964

)

 

 

(4,161

)

 

 

(4,161

)

Deferred financing costs paid for debt amendments

 

 

(58

)

 

 

(277

)

 

 

(2,465

)

Purchases of treasury stock

 

 

(35,340

)

 

 

(29,040

)

 

 

 

Purchases of treasury stock and Class A warrants

 

 

(11,384

)

 

 

 

 

 

 

Extinguishment of debt and prepayments

 

 

 

 

 

 

 

 

(277,520

)

Issuance of debt, net of issuance and deferred financing costs

 

 

 

 

 

 

 

 

321,531

 

Extinguishment of debt costs paid

 

 

 

 

 

 

 

 

(2,736

)

Net cash (used in)/provided by financing activities

 

 

(74,644

)

 

 

(56,196

)

 

 

931

 

Net (decrease)/increase in cash and cash equivalents

 

 

(2,475

)

 

 

(4,521

)

 

 

13,434

 

Cash and cash equivalents at beginning of year

 

 

78,732

 

 

 

83,253

 

 

 

69,819

 

Cash and cash equivalents at end of year

 

$

76,257

 

 

$

78,732

 

 

$

83,253

 

Spot and Fixed TCE Rates Achieved and Revenue Days

The following tables provide a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months and fiscal year ended December 31, 2023 and the comparable periods of 2022. Revenue days in the quarter ended December 31, 2023 totaled 1,768 compared with 2,023 in the prior year quarter. Revenue days in the fiscal year ended December 31, 2023 totaled 7,026 compared with 7,739 in the prior year. A summary fleet list by vessel class can be found later in this press release.

 

 

2023

 

 

2022

 

For the three months ended December 31,

 

Spot

Earnings

 

 

Fixed

Earnings

 

 

Spot

Earnings

 

 

Fixed

Earnings

 

Jones Act MR Product Carriers:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

 

 

$

69,898

 

 

$

15,851

 

 

$

62,916

 

Revenue days

 

 

 

 

 

887

 

 

 

52

 

 

 

1,055

 

Non-Jones Act MR Product Carriers:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

37,581

 

 

$

53,374

 

 

$

48,062

 

 

$

36,401

 

Revenue days

 

 

184

 

 

 

92

 

 

 

184

 

 

 

89

 

ATBs:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

59,125

 

 

$

45,600

 

 

$

32,744

 

 

$

41,054

 

Revenue days

 

 

11

 

 

 

253

 

 

 

92

 

 

 

183

 

Lightering:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

96,986

 

 

$

 

 

$

80,352

 

 

$

 

Revenue days

 

 

88

 

 

 

 

 

 

92

 

 

 

 

Alaska (a):

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

 

 

$

60,746

 

 

$

 

 

$

60,113

 

Revenue days

 

 

 

 

 

253

 

 

 

 

 

 

276

 

 

 

2023

 

 

2022

 

For the years ended December 31,

 

Spot

Earnings

 

 

Fixed

Earnings

 

 

Spot

Earnings

 

 

Fixed

Earnings

 

Jones Act MR Product Carriers:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

64,906

 

 

$

66,780

 

 

$

50,676

 

 

$

60,908

 

Revenue days

 

 

40

 

 

 

3,545

 

 

 

644

 

 

 

3,621

 

Non-Jones Act MR Product Carriers:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

36,827

 

 

$

57,768

 

 

$

45,562

 

 

$

31,290

 

Revenue days

 

 

861

 

 

 

166

 

 

 

730

 

 

 

361

 

ATBs:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

59,125

 

 

$

44,083

 

 

$

37,579

 

 

$

37,490

 

Revenue days

 

 

11

 

 

 

990

 

 

 

267

 

 

 

690

 

Lightering:

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

93,031

 

 

$

 

 

$

75,965

 

 

$

 

Revenue days

 

 

363

 

 

 

 

 

 

365

 

 

 

 

Alaska (a):

 

 

 

 

 

 

 

 

 

 

 

 

Average rate

 

$

 

 

$

60,449

 

 

$

 

 

$

59,880

 

Revenue days

 

 

 

 

 

1,050

 

 

 

 

 

 

1,061

 

 

(a) Excludes one Alaska class vessel currently in layup.

OSG has realigned some of its vessels in the analytical tables to reflect their current employment. The tables affected in the press release are the TCE Spot and Fixed Rate table and the Vessel Operating Contribution table. Prior year information has been revised to conform with the current presentation.

Fleet Information

As of December 31, 2023, OSG’s operating fleet consisted of 21 vessels, 13 of which were owned, with the remaining vessels chartered-in. Vessels chartered-in are on Bareboat Charters.

 

 

Vessels Owned

 

 

Vessels

Chartered-In

 

 

Total at December 31, 2023

 

Vessel Type

 

Number

 

 

Number

 

 

Total Vessels

 

 

Total dwt (3)

 

MR Product Carriers (1)

 

 

5

 

 

 

8

 

 

 

13

 

 

 

619,854

 

Crude Oil Tankers (2)

 

 

4

 

 

 

 

 

 

4

 

 

 

772,194

 

Refined Product ATBs

 

 

2

 

 

 

 

 

 

2

 

 

 

54,182

 

Lightering ATBs

 

 

2

 

 

 

 

 

 

2

 

 

 

91,112

 

Total Operating Fleet

 

 

13

 

 

 

8

 

 

 

21

 

 

 

1,537,342

 

(1)

Includes two owned shuttle tankers, eight chartered-in tankers, and three non-Jones Act MR tankers that participate in the Tanker

Security Program or are on time charter to the U.S. Military Sealift Command.

 

 

(2)

Includes two crude oil tankers doing business in Alaska, one crude oil tanker, Alaskan Frontier, purchased in November 2023 from

BP Oil Shipping Company, USA and has been in cold layup in Malaysia since 2019, and one crude oil tanker in service on the East Coast

 

 

 

 

Reconciliation to Non-GAAP Financial Information

The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures provide investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.

(A) Time Charter Equivalent (TCE) Revenues

Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. TCE revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follows:

 

 

Three Months Ended

December 31,

 

 

Years Ended

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Time charter equivalent revenues

 

$

110,088

 

 

$

114,098

 

 

$

423,527

 

 

$

426,328

 

Add: Voyage expenses

 

 

5,932

 

 

 

7,659

 

 

 

28,344

 

 

 

40,472

 

Shipping revenues

 

$

116,020

 

 

$

121,757

 

 

$

451,871

 

 

$

466,800

 

Vessel Operating Contribution

Vessel operating contribution, a non-GAAP measure, is TCE revenues minus vessel expenses and charter hire expenses. The Company changed the presentation of the table below in 2023 to reflect the current business operations of the Company's vessels. Accordingly, prior period amounts have been updated to conform to current period presentation.

 

 

Three Months Ended

December 31,

 

 

Years Ended

December 31,

 

($ in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Specialized businesses

 

$

28,151

 

 

$

31,725

 

 

$

116,463

 

 

$

121,112

 

Jones Act MR tankers

 

 

13,668

 

 

 

7,793

 

 

 

46,536

 

 

 

17,957

 

Jones Act ATBs

 

 

8,378

 

 

 

6,535

 

 

 

29,311

 

 

 

21,744

 

Vessel operating contribution

 

 

50,197

 

 

 

46,053

 

 

 

192,310

 

 

 

160,813

 

Depreciation and amortization

 

 

17,664

 

 

 

19,579

 

 

 

67,164

 

 

 

70,637

 

General and administrative

 

 

6,612

 

 

 

6,056

 

 

 

28,223

 

 

 

26,985

 

Operating income from vessel operations

 

$

25,921

 

 

$

20,418

 

 

$

96,923

 

 

$

63,191

 

(B) EBITDA and Adjusted EBITDA

EBITDA represents net income before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted to exclude amortization classified in charter hire expenses, interest expense classified in charter hire expenses, loss/(gain) on disposal of vessels and other property, including impairments, net, non-cash stock based compensation expense and the impact of other items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled measures used by other companies due to differences in methods of calculation. The following table reconciles net income as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA.

 

 

Three Months Ended

December 31,

 

 

Years Ended

December 31,

 

($ in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income

 

$

20,420

 

 

$

10,085

 

 

$

62,454

 

 

$

26,564

 

Income tax expense

 

 

788

 

 

 

4,820

 

 

 

9,919

 

 

 

6,894

 

Interest expense, net

 

 

7,196

 

 

 

8,191

 

 

 

31,216

 

 

 

33,060

 

Depreciation and amortization

 

 

17,664

 

 

 

19,579

 

 

 

67,164

 

 

 

70,637

 

EBITDA

 

 

46,068

 

 

 

42,675

 

 

 

170,753

 

 

 

137,155

 

Amortization classified in charter hire and vessel expenses

 

 

274

 

 

 

318

 

 

 

1,094

 

 

 

862

 

Interest expense classified in charter hire expenses

 

 

 

 

 

284

 

 

 

426

 

 

 

1,219

 

Non-cash stock based compensation expense

 

 

915

 

 

 

337

 

 

 

3,471

 

 

 

3,574

 

Adjusted EBITDA

 

$

47,257

 

 

$

43,614

 

 

$

175,744

 

 

$

142,810

 

(C) Total Cash and Investments

($ in thousands)

 

December 31,

2023

 

 

December 31,

2022

 

Cash and cash equivalents

 

$

76,233

 

 

$

78,680

 

Restricted cash

 

 

24

 

 

 

52

 

Investment security to be held to maturity

 

 

14,900

 

 

 

14,803

 

Total cash and investments

 

$

91,157

 

 

$

93,535

 

 

Contacts

Investor Relations & Media Contact:

Susan Allan, Overseas Shipholding Group, Inc.

(813) 209-0620

sallan@osg.com

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