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8-K - FORM 8-K - COMMERCIAL BARGE LINE CO | c65869e8vk.htm |
EXHIBIT 99.1
Commercial Barge Line Company Announces Results for Quarter and Six Months Ended June 30, 2011
JEFFERSONVILLE, IN, August 15, 2011 Commercial Barge Line Company (CBL or the Company)
today announced results for the quarter and six months ended June 30, 2011 and filed those results
on Form 10-Q with the Securities and Exchange Commission. Copies of our filing on Form 10-Q are
available on the Companys website at www.aclines.com.
Revenues
Revenues for the quarter and six months ended June 30, 2011 increased 22.7% and 21.6% to $201.6
million and $380.2 million, respectively. Transportation revenues increased by 8.6% and 13.7% in
the quarter and six months ended June 30, 2011 to $163.3 million and $324.4 million respectively.
Driven by tow-size and other operating restrictions and idle barge days as a result of the record
flooding along the inland waterways during more than two-thirds of the second quarter,
affreightment volume compared to the same periods of 2010 declined 7.1% in the quarter to 8.0
billion ton-miles, but remained 0.9% positive for the six months ended June 30, 2011 at 16.2
billion ton-miles. For the six month period, the increase in our transportation revenues was
driven by volume increases in coal and energy, chemicals, petroleum, steel and pig iron and all
other bulk, as well as increases in non-affreightment charter/day rate revenue, towing revenue and
demurrage. These increases were partially offset by lower salt and grain volumes and lower
scrapping revenue. Manufacturing segment revenue increased $24.7 million or 207.7% in the second
quarter and $29.2 million or 125.4% for the six months ended June 30, 2011 due to higher production
levels in the current year. The manufacturing segment revenue backlog at the end of June 2011 was
$105.8 million, up 75% year-over-year versus $60.5 million at the end of June 2010. Early in the
third quarter of 2011, the Company signed an additional $15.0 million in new construction contracts
for production that extends into 2012.
Adjusted EBITDA
Adjusted EBITDA (adjusted for non-cash items related to purchase accounting, transaction related
expenses and other non-recurring items) for the quarter was $19.9 million, a 15.1% decrease over
the second quarter of 2010 which was $23.5 million. However, Adjusted EBITDA for the six months
ended June 30, 2011 was $41.6 million, a 5.9% increase over the same period of 2010 which was $39.3
million. The increase for the six month period was driven by strong revenue performance as a result
of pricing and favorable volume mix shift and was bolstered by the positive impact of a number of
cost reduction initiatives implemented during the period, offset by an estimated $10.4 million
negative margin impact of the flooding experienced in the second quarter in comparison to the prior
year performance. Estimates of this negative margin impact based on the Companys run rate prior
to the flooding are more than one and a half times the estimated impact based on the comparable
period of the prior year. On a trailing twelve months basis, adjusted EBITDA was $133.2 million at
June 30, 2011.
Commenting
on the results, Paul Bridwell, Interim President and Chief Executive Officer, stated, The
market recovery in our transportation segment continued for the first six months of 2011, led by
our steel industry accounts and a growing demand for domestic and export coal. We also continued
to experience rising demand and rates in liquid towing and affreightment as chemical manufacturing
continued to rebound from recession lows. However, the strength of demand across our business was
more than offset in the second quarter of 2011 by record floods which impacted our ability to move
this high-rated volume from mid-April through the end of June. Now that the high water has passed and
we once again are operating under normal conditions, we are confident that the demand for our
services will remain solid in 2011 due to strong volumes and limited excess barging capacity in the
industry. Furthermore, the launch of our scheduled service operating plan in July will drive
greater boat efficiency, maximize our tow size, and deliver more reliable service for our
customers. At Jeffboat, increasing demand paired with a strong focus on operational improvements
will yield very good profit momentum.
Fuel
For the second quarter and six months ended June 30, 2011 compared to the same periods of the prior
year, our average price per gallon increased 36.9% and 32.0% to $3.04 and $2.83 per gallon, and our
fuel consumption increased approximately 7.4% for the quarter and 4.7% for the six months ended
June 30, 2011. Fuel consumption increases were driven by inefficiencies related to the flood
conditions that prevailed throughout much of the second quarter. The Company has entered into
forward contracts during the quarter to limit exposure to rising fuel prices.
Net Income
For the quarter and six months ended June 30, 2011, the Company had net losses of $15.6 million and
$29.5 million, compared to net losses of $1.4 million and $4.8 million in the quarter and six
months ended June 30, 2010. Approximately, $9.9 million of the quarter-over-quarter decline and
$19.1 million of the six months-over-six months decline in net income was attributable to non-cash
impacts of purchase accounting. Approximately $6.7 million of both the quarterly and six month
declines was attributable to the estimated after-tax impact of margin losses related to the second
quarter flooding. After-tax impacts of restructuring costs, including restructuring severance and
share-based compensation accelerations, of $4.1 million in the quarter and $8.4 million for the six
month period are included in the comparative results, as well as lower gains from asset management
activities of approximately $1.0 million in both the quarter and six month periods ended June 30,
2011.
Liquidity and Debt Position
As of
June 30, 2011, we were in compliance with all debt
covenants and had $289.0 million in total availability under our
credit facility of which $204.0 million was available for use. The Credit Facility has no maintenance financial
covenants unless availability for use is generally less than $59.4 million.
Recent Management Changes
On August 1, 2011, ACL announced the appointments of Mark Knoy as the Companys President and Chief
Executive Officer and David Huls as Senior Vice President and Chief Financial Officer. Paul
Bridwell is serving as Interim Chief Executive Officer until Mr. Knoys August 18 start date, and
Brian McDonald is serving as Interim Chief Financial Officer until Mr. Huls arrival on August 29.
For more information, see ACLs press release and the Companys Form 8-K dated August 1, 2011.
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 Companys website at www.aclines.com.
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
managements 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 Companys filings with the SEC, including our report on Form 10-K for the
year ended December 31, 2010 and our most recent Form 10-Q. 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.
NET LOSS TO ADJUSTED EBITDA RECONCILIATION
(Dollars in thousands unaudited)
(Dollars in thousands unaudited)
Trailing Twelve | ||||||||||||||||||||
Quarter Ended | Six Months Ended | Months Ended | ||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | ||||||||||||||||
Net loss from continuing operations |
$ | (15,623 | ) | $ | (1,363 | ) | $ | (29,491 | ) | $ | (4,843 | ) | $ | (27,833 | ) | |||||
Discontinued operations, net of income
taxes |
18 | (2 | ) | 10 | (2 | ) | 312 | |||||||||||||
Consolidated net loss |
$ | (15,605 | ) | $ | (1,365 | ) | $ | (29,481 | ) | $ | (4,845 | ) | $ | (27,521 | ) | |||||
Adjustments from continuing operations: |
||||||||||||||||||||
Interest income |
(103 | ) | | (158 | ) | (1 | ) | (160 | ) | |||||||||||
Interest expense |
7,624 | 9,766 | 15,092 | 19,619 | 34,201 | |||||||||||||||
Debt retirement expense |
| | 8,701 | |||||||||||||||||
Depreciation and amortization |
27,907 | 11,912 | 55,432 | 23,911 | 79,634 | |||||||||||||||
Taxes |
(7,495 | ) | (1,267 | ) | (16,298 | ) | (4,494 | ) | (5,636 | ) | ||||||||||
Adjustments from discontinued operations: |
||||||||||||||||||||
Interest income |
(18 | ) | | (18 | ) | | (18 | ) | ||||||||||||
EBITDA from continuing operations |
12,310 | 19,048 | 24,577 | 34,192 | 88,907 | |||||||||||||||
EBITDA from discontinued operations |
| (2 | ) | (8 | ) | (2 | ) | 294 | ||||||||||||
Consolidated EBITDA |
$ | 12,310 | $ | 19,046 | $ | 24,569 | $ | 34,190 | $ | 89,201 | ||||||||||
Other Non-cash or non-comparable charges included in net income: |
||||||||||||||||||||
Share Based Compensation (1) |
$ | 323 | $ | 1,516 | $ | 1,816 | $ | 1,623 | $ | 7,657 | ||||||||||
Merger Related and Consulting Expenses
(2) |
6,867 | | 13,424 | | 27,753 | |||||||||||||||
Compensation Cost Savings (3) |
| 2,100 | | 2,100 | 4,200 | |||||||||||||||
Public Company Costs (4) |
| 625 | 1,250 | 1,250 | ||||||||||||||||
Restructuring Costs (5) |
411 | 167 | 1,828 | 167 | 3,161 | |||||||||||||||
Total non-comparable/non-cash charges |
$ | 7,601 | $ | 4,408 | $ | 17,068 | $ | 5,140 | $ | 44,021 | ||||||||||
Adjusted EBITDA |
$ | 19,911 | $ | 23,454 | $ | 41,637 | $ | 39,330 | $ | 133,222 | ||||||||||
1 | Non-cash share-based compensation expense | |
2 | Includes direct merger expenses, strategic and management consulting fees and net impact of purchase accounting | |
3 | Reflects higher annual incentive accruals in 2010 than plan in place for 2011 | |
4 | Reflects certain costs of being a company with publicly traded equity internalized in 2011, including investor relations expenses, internal audit expenses, board of director expenses and incremental audit fees. | |
5 | Includes severance to separating executives |