JEFFERSONVILLE, Ind., Feb. 18 /PRNewswire-FirstCall/ -- The Board of Directors of American Commercial Lines Inc. ("ACL" or the "Company") today announced the appointment of Michael P. Ryan, the Company's Senior Vice President of Sales and Marketing, to President and Chief Executive Officer. ACL also announced its fourth quarter and year-end financial results for 2007.
Effective March 1, 2008, Ryan will succeed Mark Holden in the role of President and Chief Executive Officer. Mr. Ryan will also fill Mr. Holden's seat on the Company's Board of Directors. Holden, who has led the Company since January, 2005, informed the Board of his desire to pursue other opportunities. Chairman of the Board, Clayton Yeutter, commented on the transition by saying, "Mike has been an instrumental member of ACL's senior management team, and has taken an active role in developing and executing the Company's strategy. We are confident that under his leadership the Company will continue to grow and improve. Yeutter added, "On behalf of the Board and ACL we thank Mark for his dedication and service, and for putting a strong management team in place. We wish him well in his future endeavors."
Ryan has 27 years of experience in the transportation industry, with assignments in the truck, Class 1 rail and barge sectors. He has held senior leadership positions in all of these units, including top positions directing several commercial business units with CSX Transportation. Since joining ACL in 2005, he has designed the Company's shift toward a stronger, more reliable portfolio base. Ryan built a new Sales and Customer Service Program over the past two years, which is focusing on business retention and organic growth, expanding ACL's market share in more ratable lines of business. Ryan successfully built and led similar programs in the LTL truck and Class 1 rail venues.
Mr. Ryan stated, "We will maintain our current strategy of taking every opportunity, both in transportation and in manufacturing, to stabilize our revenue stream with more predictable, ratable and profitable business. We launched this effort in 2006 with new contract agreements in our transportation segment, and we will continue this initiative in transportation as well as manufacturing. Our industry is subject to external forces, and we will continue to take aggressive steps to neutralize those effects on our revenue base and profitability."
Financial Results Fourth Quarter 2007 Results
Revenues for the quarter were $302.5 million, a 13.8% increase compared with $265.9 million for the fourth quarter of 2006. Net income for the quarter was $23.7 million or $0.46 per diluted share, a 32.3% decrease compared to $35.0 million or $0.56 per diluted share for the fourth quarter of 2006. Results for the fourth quarter 2007 included an after-tax charge of $1.4 million or $0.03 per diluted share for the withdrawal from a multi-employer pension plan for represented employees of the Company's terminal operations and a $1.8 million or $0.04 per diluted share favorable tax adjustment related to realization of certain deferred tax assets. Results for the fourth quarter 2006 included a gain of $4.8 million (net of tax) or $0.08 per diluted share on the sale of the Company's Venezuelan operations and a charge for the early retirement of debt of $0.9 million (net of tax) or $0.01 per diluted share. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the fourth quarter 2007 were $54.4 million, an EBITDA margin of 18.0% compared to $70.0 million for the fourth quarter 2006, an EBITDA margin of 25.9%. The attachment to this press release reconciles net income to EBITDA.
Full-Year 2007 Results
Revenues for the full year 2007 were $1.05 billion, an 11.4% increase compared with the $942.6 million for the full year 2006. Net income for the full year was $44.4 million or $0.77 per diluted share, a 51.9% decrease compared to net income for the full year 2006 of $92.3 million, or $1.47 per diluted share. Results for 2007 included after-tax charges of $16.0 million or $0.28 per diluted share for debt retirement expenses related to the retirement of the Company's Senior Notes and the replacement of its credit facility. Results for 2006 included a gain of $4.8 million (net of tax) or $0.08 per diluted share on the sale of the Company's Venezuelan operations and a charge for the early retirement of debt of $0.9 million (net of tax) or $0.01 per diluted share. For the full year 2007, EBITDA was $159.8 million, an EBITDA margin of 15.2% compared to $211.8 million for the full year 2006, an EBITDA margin of 22.0%.
Transportation Results
In the fourth quarter 2007, revenues in transportation, which comprise almost 80% of ACL's business, were $228.8 million, an increase of 4.7% from the fourth quarter 2006. The increase was driven by an average fuel-neutral rate increase of 16.4% on the liquid freight business, which more than offset an average fuel-neutral rate decrease of 0.3% on the dry freight business, compared to fourth quarter 2006. Excluding grain, the average fuel-neutral rate for the dry business increased 8.0% in the fourth quarter 2007 compared to the fourth quarter 2006.
For the full year, 2007 transportation revenues increased 2.7% over the prior year to $808.6 million. Average fuel-neutral freight rates for the full year were up 13.4% on the liquid business and were down 1.2% on the dry freight business. Excluding grain, the average fuel-neutral rate for the dry business increased 4.9% over 2006.
In the fourth quarter 2007, ACL generated approximately 11.0 billion ton- miles compared to 11.4 billion ton-miles in the same period of the prior year, a decrease of 3.6% with 8.0% fewer barges. For the full year 2007, ACL moved approximately 43.6 billion ton-miles of cargo compared to 45.1 billion ton- miles transported in 2006, a decrease of 3.4% with 5.6% fewer barges. Revenues per barge increased 13.8% in the fourth quarter 2007 and 8.8% for the full year 2007 compared to 2006.
Ryan commented, "Our value proposition continues to position us with price strength from our services. In 2007, we repriced 33% of our contract business, renewing agreements with an average 15% increase over prior year levels. We also improved our contract protection against fuel, labor and inflation increases to coverage in 85% of our contracts."
Manufacturing Results
ACL's manufacturing business, Jeffboat, completed 404 barges during 2007, a 28% increase in production volume. Jeffboat sold 361 dry hopper barges, 41 liquid tank barges and two ocean-going vessels.
Manufacturing revenues, inclusive of barges manufactured for internal use by ACL, were $76.9 million in the fourth quarter 2007 compared to $58.0 million during the same period in 2006. External revenues in the fourth quarter 2007 increased 51.8% to $71.9 million from $47.4 million in the same period of the prior year due to the higher level of internal builds in the fourth quarter of 2006.
For the full year 2007, manufacturing revenues, inclusive of barges manufactured for internal use, were $290.1 million, a 37.2% increase over the prior year. Jeffboat had $50.1 million in internal sales to ACL's transportation segment. Net of the internal builds, external revenues increased 54.6% to $239.9 million for the full year 2007, compared to $155.2 million in 2006. Manufacturing operating margins declined over the prior year due primarily to higher labor costs, reduced productivity associated with a larger and less experienced work force, and the continuing impact of ongoing production of barges that were bid at lower margins in 2005 and prior.
Cash Flow and Debt
In 2007, ACL generated cash from operations of $115.8 million. The Company spent $109.3 million on capital expenditures to support its infrastructure and growth, and invested: $15.6 million for the acquisition of towboats and certain assets from the McKinney companies; $6.2 million for Summit Contracting; and $4.3 million for the acquisition of Elliott Bay Design Group. Debt increased by $320.3 million during the year to $439.8 million at the end of 2007. The increased borrowing in 2007 was primarily the result of $300 million used to fund the repurchase of 12 million shares of ACL common stock. ACL had approximately 50 million shares outstanding at December 31, 2007.
Other
Separately, Christopher Black, the Company's Senior Vice President and Chief Financial Officer, who previously announced that he would leave the Company following the expiration of his employment agreement on February 22, 2008, has agreed to remain with the Company in his current capacity through March 1, 2008. Thereafter, Black will serve in a consulting capacity with the Company for a two month period to assist with the transition to a new Chief Financial Officer.
Guidance Due to a number of factors, ACL is suspending earnings guidance for 2008.
"The volatility in the transportation industry as a whole and grain shipping in particular, along with a weak economy, escalating fuel costs and unpredictable weather patterns, obscure our visibility to accurately predict financial results at this time," said Ryan. "We will revisit this decision later in the year, but cannot commit to reinstating guidance."
"Looking forward, we will be providing quarterly updates on reliable metrics, which will enable investors and analysts to track our progress toward increasing our transportation business based on a stronger customer and contract base, and toward improving efficient production at Jeffboat."
Fourth Quarter 2007 Earnings Conference Call
American Commercial Lines management will conduct a conference call to discuss the Company's fourth quarter and year-end financial results on Tuesday, February 19, 2008, at 10:00 a.m. eastern time. The telephone numbers to access the ACL Conference Call are: Domestic (866) 362-5158; International (617) 597-5397; and the Participant Passcode is 68092740.
The call may also be accessed live on the Company's internet web site at http://www.aclines.com/. For those unable to participate in the live call or webcast, the ACL Conference Call will be archived at http://www.aclines.com/ within three hours of the conclusion of the live call and will remain available through April 19, 2008.
American Commercial Lines Inc., headquartered in Jeffersonville, Indiana, is an integrated marine transportation and service company operating in the United States Jones Act trades, with approximately $1 billion in revenues and approximately 3,300 employees as of December 31, 2007. For more information about American Commercial Lines Inc. visit http://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 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 American Commercial Lines Inc. Risks and uncertainties are detailed from time to time in American Commercial Lines Inc.'s filings with the SEC, including our most recent 10-K. American Commercial Lines Inc. 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.
AMERICAN COMMERCIAL LINES INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (Dollars in thousands, except shares and per share amounts) (Unaudited) Quarter Ended Dec. 31, Year Ended Dec. 31, 2007 2006 2007 2006 Revenues Transportation and Services $230,647 $218,528 $810,443 $787,348 Manufacturing 71,888 47,370 239,917 155,204 Revenues 302,535 265,898 1,050,360 942,552 Cost of Sales Transportation and Services 175,937 151,578 645,237 582,271 Manufacturing 66,952 42,463 228,190 141,589 Cost of Sales 242,889 194,041 873,427 723,860 Gross Profit 59,646 71,857 176,933 218,692 Selling, General and Administrative Expenses 18,268 19,424 68,727 66,280 Operating Income 41,378 52,433 108,206 152,412 Other Expense (Income) Interest Expense 8,093 3,834 20,578 18,354 Debt Retirement Expenses - 1,387 23,938 1,437 Other, Net (486) (1,586) (2,532) (3,799) Other Expenses 7,607 3,635 41,984 15,992 Income from Continuing Operations before Income Taxes 33,771 48,798 66,222 136,420 Income Taxes 10,126 16,804 21,855 49,822 Income from Continuing Operations 23,645 31,994 44,367 86,598 Discontinued Operations, Net of Tax 40 3,000 (6) 5,654 Net Income $23,685 $34,994 $44,361 $92,252 Basic earnings per common share: Income from continuing operations $0.48 $0.52 $0.79 $1.43 Income from discontinued operations, net of tax - 0.05 - 0.09 Basic earnings per common share $0.48 $0.57 $0.79 $1.52 Earnings per common share - assuming dilution: Income from continuing operations $0.46 $0.51 $0.77 $1.38 Income from discontinued operations, net of tax - 0.05 - 0.09 Earnings per common share - assuming dilution $0.46 $0.56 $0.77 $1.47 Weighted Average Shares Outstanding (1): Basic 49,780,080 60,952,370 56,245,368 60,742,980 Diluted 51,212,682 63,007,962 57,679,406 62,800,804 (1) Gives effect to the two-for-one stock split to shareholders of record on February 6, 2007. AMERICAN COMMERCIAL LINES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except shares and per share amounts) (Unaudited) December 31, December 31, 2007 2006 (1) ASSETS Current Assets Cash and Cash Equivalents $5,021 $5,113 Accounts Receivable, Net 114,921 102,228 Inventory 70,890 61,504 Deferred Tax Asset 2,582 2,173 Other Current Assets 26,661 26,167 Total Current Assets 220,075 197,185 Properties-Net 511,832 455,710 Investment in Equity Investees 3,456 3,527 Other Assets 25,448 14,581 Total Assets $760,811 $671,003 LIABILITIES Current Liabilities Accounts Payable $61,130 $53,607 Accrued Payroll and Fringe Benefits 15,720 28,267 Deferred Revenue 17,824 16,803 Accrued Claims and Insurance Premiums 15,647 15,754 Accrued Interest 1,688 4,466 Customer Deposits 5,596 9,145 Other Liabilities 32,036 24,892 Total Current Liabilities 149,641 152,934 Long Term Debt 439,760 119,500 Pension Liability 5,252 16,026 Deferred Tax Liability 26,569 14,014 Other Long Term Liabilities 14,198 9,876 Total Liabilities 635,420 312,350 STOCKHOLDERS' EQUITY Common stock; authorized 250,000,000 shares at $.01 par value; 62,549,666 and 61,883,556 shares issued and outstanding as of December 31, 2007 and December 31, 2006, respectively 626 619 Treasury Stock; 12,407,006 and 172,320 shares at December 31, 2007 and December 31, 2006, respectively (309,517) (3,207) Other Capital 279,266 259,409 Retained Earnings 148,426 104,065 Accumulated Other Comprehensive Income (Loss) 6,590 (2,233) Total Stockholders' Equity 125,391 358,653 Total Liabilities and Stockholders' Equity $760,811 $671,003 (1) The Condensed Consolidated Balance Sheets at December 31, 2007 and December 31, 2006 have been derived from the audited consolidated financial statements at that date, but does not included all the information and footnotes required by generally accepted accounting principles. AMERICAN COMMERCIAL LINES INC. NET INCOME TO EBITDA RECONCILIATION (Dollars in thousands) (Unaudited) Quarter Ended Dec. 31, Year Ended Dec. 31, 2007 2006 2007 2006 Net Income from Continuing Operations $23,645 $31,994 $44,367 $86,598 Discontinued Operations, Net of Income Taxes 40 3,000 (6) 5,654 Consolidated Net Income $23,685 $34,994 $44,361 $92,252 Adjustments from Continuing Operations: Interest Income (19) (20) (161) (46) Interest Expense 8,093 3,834 20,578 18,354 Debt Retirement Expenses - 1,387 23,938 1,437 Depreciation and Amortization 12,606 12,075 49,371 47,378 Taxes 10,126 16,804 21,855 49,822 Adjustments from Discontinued Operations: Interest Income (23) (68) (134) (651) Depreciation and Amortization - - - 1,428 Taxes (22) 956 (50) 1,837 EBITDA from Continuing Operations 54,451 66,074 159,948 203,543 EBITDA from Discontinued Operations (5) 3,888 (190) 8,268 Consolidated EBITDA $54,446 $69,962 $159,758 $211,811 EBITDA from Continuing Operations by Segment: Transportation Services Net Income $19,913 $28,335 $36,389 $78,364 Interest Income (18) (20) (160) (46) Interest Expense 8,093 3,834 20,578 18,354 Debt Retirement Expenses - 1,387 23,938 1,437 Depreciation and Amortization 11,800 11,553 46,694 45,489 Taxes 10,126 16,804 21,855 49,822 Transportation Services EBITDA $49,914 $61,893 $149,294 $193,420 Manufacturing Net Income $4,630 $5,696 $18,850 $19,116 Interest Income - - - - Interest Expense - - - - Depreciation and Amortization 724 522 2,595 1,889 Taxes - - - - Total Manufacturing EBITDA 5,354 6,218 21,445 21,005 Intersegment Profit (1,083) (2,037) (11,057) (10,882) External Manufacturing EBITDA $4,271 $4,181 $10,388 $10,123 Management considers EBITDA to be a meaningful indicator of operating performance and uses it as a measure to assess the operating performance of the Company's business segments. EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing transactions and income taxes. EBITDA should not be construed as a substitute for net income or as a better measure of liquidity than cash flow from operating activities, which is determined in accordance with generally accepted accounting principles ("GAAP"). EBITDA excludes components that are significant in understanding and assessing our results of operations and cash flows. In addition, EBITDA is not a term defined by GAAP and as a result our measure of EBITDA might not be comparable to similarly titled measures used by other companies. However, the Company believes that EBITDA is relevant and useful information, which is often reported and widely used by analysts, investors and other interested parties in our industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance. AMERICAN COMMERCIAL LINES INC. Statement of Operating Income by Reportable Segment (Dollars in thousands) (Unaudited) All Reportable Segments Other Inter- Transporta- Manufactur- Segments segment tion ing (1) Elimination Total Quarter ended December 31, 2007 Total revenue $229,027 $76,860 $1,929 $(5,281) $302,535 Intersegment revenues 206 4,972 103 (5,281) - Revenue from external customers 228,821 71,888 1,826 - 302,535 Operating expense Materials, supplies and other 73,707 - - - 73,707 Rent 6,045 - - - 6,045 Labor and fringe benefits 30,724 - - - 30,724 Fuel 50,446 - - - 50,446 Depreciation and amortization 11,800 - - - 11,800 Taxes, other than income taxes 4,534 - - - 4,534 Gain on disposition of equipment (1,909) - - - (1,909) Cost of goods sold - 66,952 590 - 67,542 Total cost of sales 175,347 66,952 590 - 242,889 Selling, general & administrative 16,002 1,224 1,042 - 18,268 Total operating expenses 191,349 68,176 1,632 - 261,157 Operating income $37,472 $3,712 $194 $- $41,378 Quarter ended December 31, 2006 Total revenue $219,068 $58,045 $- $(11,215) $265,898 Intersegment revenues 540 10,675 - (11,215) - Revenue from external customers 218,528 47,370 - - 265,898 Operating expense Materials, supplies and other 67,097 - - - 67,097 Rent 5,893 - - - 5,893 Labor and fringe benefits 24,297 - - - 24,297 Fuel 38,405 - - - 38,405 Depreciation and amortization 11,553 - - - 11,553 Taxes, other than income taxes 4,483 - - - 4,483 Gain on disposition of equipment (150) - - - (150) Cost of goods sold - 42,463 - - 42,463 Total cost of sales 151,578 42,463 - - 194,041 Selling, general & administrative 17,830 1,594 - - 19,424 Total operating expenses 169,408 44,057 - - 213,465 Operating income $49,120 $3,313 $- $- $52,433 (1) Financial data below the reporting thresholds is attributable to a segment that provides professional services. AMERICAN COMMERCIAL LINES INC. Statement of Operating Income by Reportable Segment (Dollars in thousands) (Unaudited) All Reportable Segments Other Inter- Transporta- Manufactur- Segments segment tion ing (1) Elimination Total Year ended December 31, 2007 Total revenue $809,499 $290,053 $1,929 $(51,121)$1,050,360 Intersegment revenues 882 50,136 103 (51,121) - Revenue from external customers 808,617 239,917 1,826 - 1,050,360 Operating expense Materials, supplies and other 279,359 - - - 279,359 Rent 24,595 - - - 24,595 Labor and fringe benefits 111,617 - - - 111,617 Fuel 169,178 - - - 169,178 Depreciation and amortization 46,694 - - - 46,694 Taxes, other than income taxes 16,594 - - - 16,594 Gain on disposition of equipment (3,390) - - - (3,390) Cost of goods sold - 228,190 590 - 228,780 Total cost of sales 644,647 228,190 590 - 873,427 Selling, general & administrative 63,627 4,058 1,042 - 68,727 Total operating expenses 708,274 232,248 1,632 - 942,154 Operating income $100,343 $7,669 $194 $- $108,206 Year ended December 31, 2006 Total revenue $788,376 $211,367 $- $(57,191) $942,552 Intersegment revenues 1,028 56,163 - (57,191) - Revenue from external customers 787,348 155,204 - - 942,552 Operating expense Materials, supplies and other 249,500 - - - 249,500 Rent 22,445 - - - 22,445 Labor and fringe benefits 90,294 - - - 90,294 Fuel 157,070 - - - 157,070 Depreciation and amortization 45,489 - - - 45,489 Taxes, other than income taxes 17,667 - - - 17,667 Gain on disposition of equipment (194) - - - (194) Cost of goods sold - 141,589 - - 141,589 Total cost of sales 582,271 141,589 - - 723,860 Selling, general & administrative 60,633 5,647 - - 66,280 Total operating expenses 642,904 147,236 - - 790,140 Operating income $144,444 $7,968 $- $- $152,412 (1) Financial data below the reporting thresholds is attributable to a segment that provides professional services. AMERICAN COMMERCIAL LINES INC. SELECTED FINANCIAL AND NONFINANCIAL DATA (Dollars in thousands except where noted) (Unaudited) Quarter Ended Dec. 31, Year Ended Dec. 31, 2007 2006 2007 2006 Consolidated EBITDA $54,446 $69,962 $159,758 $211,811 Transportation Revenue and EBITDA Revenue $228,821 $218,528 $808,617 $787,348 EBITDA 49,914 61,893 149,294 193,420 Manufacturing Revenue and EBITDA (External and Internal) Revenue $76,860 $58,045 $290,053 $211,367 EBITDA 5,354 6,218 21,445 21,005 Manufacturing External Revenue and EBITDA Revenue $71,888 $47,370 $239,917 $155,204 EBITDA 4,271 4,181 10,388 10,123 Average Domestic Barges Operated Dry 2,457 2,719 2,539 2,721 Liquid 387 373 380 371 Total 2,844 3,092 2,919 3,092 Fuel Price (Average Dollars per gallon) $2.52 $1.88 $2.13 $1.96 Capital Expenditures (including software) $28,116 $31,721 $112,704 $92,222 Management considers EBITDA to be a meaningful indicator of operating performance and uses it as a measure to assess the operating performance of the Company's business segments. EBITDA provides us with an understanding of the Company's revenues before the impact of investing and financing transactions and income taxes. EBITDA should not be construed as a substitute for net income or as a better measure of liquidity than cash flow from operating activities, which is determined in accordance with generally accepted accounting principles ("GAAP"). EBITDA excludes components that are significant in understanding and assessing our results of operations and cash flows. In addition, EBITDA is not a term defined by GAAP and as a result our measure of EBITDA might not be comparable to similarly titled measures used by other companies. However, the Company believes that EBITDA is relevant and useful information, which is often reported and widely used by analysts, investors and other interested parties in our industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance.
