JEFFERSONVILLE, Ind., May 6 /PRNewswire-FirstCall/ -- American Commercial Lines Inc. ("ACL" or the "Company") today announced results for the first quarter ended March 31, 2008. Revenues for the quarter were $270.5 million, an 18.5% increase compared with $228.2 million for the first quarter of 2007. Net income for the quarter was $2.3 million or $0.05 per diluted share, compared to a net loss of $1.1 million or $0.02 per diluted share for the first quarter of 2007. Results for the first quarter of 2008 included an after tax benefit of $1.3 million or $0.03 per diluted share related to the decision not to withdraw from a multi-employer pension plan for certain represented employees of the Company's terminal operations. Results for the first quarter of 2007 included after tax debt retirement expenses of $13.6 million on the retirement of the Company's 9.5% senior notes which reduced earnings per share by $0.22.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the first quarter of 2008 were $23.0 million with an EBITDA margin of 8.5% compared to $35.3 million for the first quarter of 2007 with an EBITDA margin of 15.5%. The attachment to this press release reconciles net income to EBITDA.
Michael P. Ryan, President and Chief Executive Officer, stated, "We faced many challenges during the quarter. Unfavorable operating conditions due to inclement weather drove a 70% increase in idle barge days compared to the prior year and resulted in twice as many lost production days in our shipyard. This resulted in significant inefficiencies in our transportation business and lower than expected manufacturing output. In addition, our operating costs continued to escalate, largely driven by an almost 60% increase in fuel cost per gallon over the first quarter of 2007. Despite these factors and weaker import demand as a result of the falling U.S. dollar, we continued to see positive barge freight pricing. We achieved productivity-related improvements in our manufacturing margins during the quarter. We will continue to execute our strategy and manage the business through these challenges, while implementing strict discipline around cost control, including a reduction of SG&A expenses that will result in $3 million of annual savings."
Transportation Results
The transportation segment's revenues increased 16.3% over the prior year to $204.8 million in the first quarter. The revenue increase was driven by increases in outside towing and charter/day rate revenues combined with an overall 16.1% increase in affreightment rates, largely driven by fuel escalation, on 4.5% lower affreightment ton-miles. On average, compared to the first quarter of 2007, the fuel neutral rate on the dry freight business increased 5.1% and the liquid freight business increased 6.7%. Total volume measured in ton-miles declined in the first quarter to 10.0 billion from 10.2 billion in the same period of the prior year, a decrease of 1.9%. On average, 5.3% fewer barges operated in the first quarter of this year compared to the first quarter of last year.
Operating income in the transportation segment decreased 68.1% or $13.6 million to $6.4 million in the quarter ended March 31, 2008 compared to the prior year. This decline was due primarily to significant increases in fuel prices and unfavorable weather-related operating conditions. The Company estimates it had approximately $9.4 million in direct and indirect unrecovered fuel price increases. High water conditions caused by abnormally high precipitation levels over the past six months along the inland waterway increased idle barge days and drove additional cost inefficiencies of approximately $4.7 million during the quarter compared to the prior year.
Manufacturing Results
ACL's manufacturing business, Jeffboat, completed 89 barges during each of the first quarters of 2008 and 2007. In 2008, Jeffboat sold 79 dry hopper barges, 9 liquid tank barges and one special vessel. This was three fewer dry cargo barges, two additional liquid tank barges and one blue water vessel compared to first quarter 2007. No barges were built during the quarter for internal use by ACL in 2008 or 2007.
Manufacturing revenues were $64.1 million in the first quarter compared to $52.1 million during the same period last year. This increase was driven by higher steel price pass-throughs and the additional liquid barge sales, despite the loss of over twice as many production days due to weather compared to last year. Manufacturing operating margin increased quarter-over-quarter from 3.8% to 5.2%, or an increase of $1.3 million to $3.3 million, primarily driven by improved labor utilization in the shipyard and the reduction in build hours per barge.
Cash Flow and Debt
During the first quarter, ACL spent $12.1 million on capital expenditures to support its infrastructure. The Company made a deposit of $8.5 million to purchase the remaining 70% interest in Summit Contracting on the last day of the quarter. This transaction closed on April 1, 2008. Debt increased $33.1 million during the quarter to $472.9 million.
First Quarter 2008 Earnings Conference Call
The company will conduct a conference call to review and discuss its first quarter financial results on May 7, 2008, at 10:00 a.m. eastern daylight time. The telephone numbers to access the ACL Conference Call are: Domestic (800) 591-6945 and International (617) 614-4911. The Participant Passcode is 14211655. 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 July 6, 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 $1.0 billion in annual revenues and approximately 3,300 employees as of December 31, 2007. For more information about American Commercial Lines Inc. generally, 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 and its subsidiaries' filings with the SEC, including the Form 10-K for the year ended December 31, 2007 and the Company's Form 10-Q for the most recent quarter. 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 March 31, 2008 2007 Revenues Transportation and Services $206,454 $176,129 Manufacturing 64,062 52,115 Revenues 270,516 228,244 Cost of Sales Transportation Services 181,038 140,604 Manufacturing 59,845 49,213 Cost of Sales 240,883 189,817 Gross Profit 29,633 38,427 Selling, General and Administrative Expenses 20,073 16,431 Operating Income 9,560 21,996 Other Expense (Income) Interest Expense 6,732 3,181 Debt Retirement Expenses - 21,749 Other, Net (850) (1,230) Other Expenses 5,882 23,700 Income (Loss) from Continuing Operations before Income Taxes 3,678 (1,704) Income Taxes (Benefit) 1,375 (638) Income (Loss) from Continuing Operations 2,303 (1,066) Discontinued Operations, Net of Tax 12 (46) Net Income (Loss) $2,315 $(1,112) Basic Income (loss) per common share: Income (loss) from continuing operations $0.05 $(0.02) Income (loss) from discontinued operations, net of tax - - Basic Income (loss) per common share $0.05 $(0.02) Income (loss) per common share - assuming dilution: Income (loss) from continuing operations $0.05 $(0.02) Income (loss) from discontinued operations, net of tax - - Income (loss) per common share - assuming dilution $0.05 $(0.02) Weighted Average Shares Outstanding (1): Basic 50,078,434 61,348,811 Diluted 50,924,915 61,348,811 (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) March 31, December 31, 2008 2007 (1) (Unaudited) ASSETS Current Assets Cash and Cash Equivalents $6,859 $5,021 Accounts Receivable, Net 125,371 114,921 Inventory 96,888 70,890 Deferred Tax Asset 3,010 2,582 Prepaid and Other Current Assets 42,460 26,661 Total Current Assets 274,588 220,075 Properties, Net 510,774 511,832 Investment in Equity Investees 3,436 3,456 Other Assets 25,775 25,448 Total Assets $814,573 $760,811 LIABILITIES Current Liabilities Accounts Payable $57,984 $61,130 Accrued Payroll and Fringe Benefits 15,615 15,720 Deferred Revenue 24,254 17,824 Accrued Claims and Insurance Premiums 16,957 15,647 Accrued Interest 1,859 1,688 Current Portion of Long Term Debt 750 - Customer Deposits 11,636 5,596 Other Liabilities 31,823 32,036 Total Current Liabilities 160,878 149,641 Long Term Debt 472,850 439,760 Pension Liability 6,704 5,252 Deferred Tax Liability 30,815 26,569 Other Long Term Liabilities 14,399 14,198 Total Liabilities 685,646 635,420 STOCKHOLDERS' EQUITY Common stock; authorized 250,000,000 shares at $.01 par value; 63,013,825 and 62,549,666 shares issued and outstanding as of March 31, 2008 and December 31, 2007, respectively 630 626 Treasury Stock; 12,574,412 and 12,407,006 shares at March 31, 2008 and December 31, 2007, respectively (312,457) (309,517) Other Capital 283,565 279,266 Retained Earnings 149,913 148,426 Accumulated Other Comprehensive Income 7,276 6,590 Total Stockholders' Equity 128,927 125,391 Total Liabilities and Stockholders' Equity $814,573 $760,811 (1) The Condensed Consolidated Balance Sheet at December 31, 2007 has 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 March 31, 2008 2007 Net Income (Loss) from Continuing Operations $2,303 $(1,066) Discontinued Operations, Net of Income Taxes 12 (46) Consolidated Net Income (Loss) $2,315 $(1,112) Adjustments from Continuing Operations: Interest Income (50) (24) Interest Expense 6,732 3,181 Debt Retirement Expenses - 21,749 Depreciation and Amortization 12,646 12,211 Taxes 1,375 (638) Adjustments from Discontinued Operations: Interest Income (19) (54) Depreciation and Amortization - - Taxes 7 (28) EBITDA from Continuing Operations 23,006 35,413 EBITDA from Discontinued Operations - (128) Consolidated EBITDA $23,006 $35,285 EBITDA from Continuing Operations by Segment: Transportation Net Loss $(1,010) $(3,360) Interest Income (48) (24) Interest Expense 6,732 3,181 Debt Retirement Expenses - 21,749 Depreciation and Amortization 11,907 11,631 Taxes 1,375 (638) Transportation EBITDA $18,956 $32,539 Manufacturing Net Income $3,507 $2,446 Interest Income - - Interest Expense - - Depreciation and Amortization 654 580 Taxes - - Total Manufacturing EBITDA 4,161 3,026 Intersegment Profit (147) (152) External Manufacturing EBITDA $4,014 $2,874 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) Inter- Reportable Segments All segment Transpor- Manu- Other Elimin- tation facturing Segments ation Total Quarter ended March 31, 2008 Total revenue $204,937 $64,553 $1,930 $(904) $270,516 Intersegment revenues 116 491 297 (904) - Revenue from external customers 204,821 64,062 1,633 - 270,516 Operating expense Materials, supplies and other 77,427 - - - 77,427 Rent 6,205 - - - 6,205 Labor and fringe benefits 27,049 - - - 27,049 Fuel 54,240 - - - 54,240 Depreciation and amortization 11,907 - - - 11,907 Taxes, other than income taxes 4,144 - - - 4,144 Gain on disposition of equipment (359) - - - (359) Cost of goods sold - 59,845 425 - 60,270 Total cost of sales 180,613 59,845 425 - 240,883 Selling, general & administrative 17,820 888 1,365 - 20,073 Total operating expenses 198,433 60,733 1,790 - 260,956 Operating income (loss) $6,388 $3,329 $(157) $- $9,560 Inter- Reportable Segments All segment Transpor- Manu- Other Elimin- tation facturing Segments ation Total Quarter ended March 31, 2007 Total revenue $176,250 $52,680 $- $(686) $228,244 Intersegment revenues 121 565 - (686) - Revenue from external customers 176,129 52,115 - - 228,244 Operating expense Materials, supplies and other 61,783 - - - 61,783 Rent 5,973 - - - 5,973 Labor and fringe benefits 25,097 - - - 25,097 Fuel 34,019 - - - 34,019 Depreciation and amortization 11,631 - - - 11,631 Taxes, other than income taxes 3,726 - - - 3,726 Gain on disposition of equipment (1,625) - - - (1,625) Cost of goods sold - 49,213 - - 49,213 Total cost of sales 140,604 49,213 - - 189,817 Selling, general & administrative 15,534 897 - - 16,431 Total operating expenses 156,138 50,110 - - 206,248 Operating income (loss) $19,991 $2,005 $- $- $21,996 AMERICAN COMMERCIAL LINES INC. SELECTED FINANCIAL AND NONFINANCIAL DATA (Dollars in thousands except where noted) (Unaudited) Quarter Ended March 31, 2008 2007 Consolidated EBITDA $23,006 $35,285 Transportation Revenue and EBITDA Revenue $204,821 $176,129 EBITDA 18,956 32,539 Manufacturing Revenue and EBITDA (External and Internal) Revenue $64,553 $52,680 EBITDA 4,161 3,026 Manufacturing External Revenue and EBITDA Revenue $64,062 $52,115 EBITDA 4,014 2,874 Average Domestic Barges Operated Dry 2,410 2,581 Liquid 386 372 Total 2,796 2,953 Fuel Price (Average Dollars per gallon) $2.81 $1.77 Capital Expenditures (including software) $12,594 $20,088 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.
