Maritrans Inc. reported its net income for the third quarter 2001 and announced an early pay-down of its long-term debt.
Maritrans also commented on estimated 2001 and 2002 earnings, reported on the status of its stock buy-back program and announced an investor teleconference whereby management would be available to further comment
on the issues.
reported net income for the quarter ended September 30, 2001, of $1.4 million, or $.14 diluted earnings per share, on
revenues of $28.3 million,compared to net income of $2.7 million, or $.24 diluted earnings per share, on revenues of $32.7 million for the quarter ended September 30, 2000.
Net income for the nine months ended September 30, 2001 is $7.0 million, or $.66 diluted earnings per share, on revenues of $91.7 million, compared to net income of $2.7 million, or $.24 diluted earnings per share, on revenue of $91.5 million for the nine months ended September 30, 2000.
Maritrans anticipates its year-end earnings to be approximately $.95 per share before an extraordinary charge related to its early
payoff of $33 million of 9.25 percent long-term debt. The Company will take a one-time extraordinary charge of approximately $2.6 million, net of taxes, or approximately $.24 per share, in prepayment penalties in the fourth quarter as a result of the payoff.
Maritrans currently anticipates that fourth quarter earnings prior to the extraordinary charge will be approximately $.30 per share.
They indicated that while third-quarter earnings of $.14 were below recent quarterly results, the long-term fundamentals remain in place for year-over-year growth in operating income going forward.
Maritrans indicated that lower spot market rates in the Gulf of Mexico driven
by refinery maintenance projects and softening demand for refined products contributed to the decreased third quarter results. Maritrans took advantage of the weak market and accelerated the routine shipyard maintenance of its tanker,
Allegian,which was previously scheduled for later in the year. In addition, Maritrans undertook a project to convert its oil tanker
, Perserverance, to handle multiple grades of refined petroleum products
. The Allegiance is now on a one-year charter for a new customer, and the Perserverance is competing with other clean vessels in the spot market.
Stephen A. Van Dyck
, Chairman and Chief Executive Officer, commented on Maritrans' future earnings potential. "During the second and third
quarters we put additional vessels on long-term charters of at least one year in duration. Most of these charters included rate increases of at least 30 percent above previous contracts. Currently all but two of our available large clean vessels are on term charter at attractive rates. Another vessel, the 252,000-barrel barge Ocean Cities, is dry docked for double-hull rebuilding. Thus, we have locked in a high percentage of revenue for the forthcoming twelve months and are less exposed to the ups and downs of the fluctuating spot market.
Earnings could be at the high end of our estimates if spot market rates follow the pattern we have seen in the past twelve months. We remain
confident on the long-term outlook for rates in our niche markets as the retirement of older vessels mandated by the Oil Pollution Act of 1990 continues to reduce the number of available vessels."
The early pay-down of long-term debt enhances Maritrans' earnings potential for future years. The Company indicated that these steps are consistent with its ongoing efforts to improve the efficiency of its balance sheet.
Further, the Company announced that it will continue its previously announced stock buy-back program in light of the Maritrans Board of
Directors'belief that the company's stock continues to be undervalued. As of September 28, 2001, the company had repurchased 2,368,700 shares of its stock during the preceding three-year period.