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New York, NY – Aug. 9, 2016 Overseas Shipholding Group, Inc. (OSG) (NYSE:OSG), a provider of oceangoing energy transportation services, today reported results for the quarter ended June 30, 2016. Highlights • Time charter equivalent (TCE) revenues(A) for the second quarter of 2016 were $215.7 million, down 8% compared with the same period in 2015. • Net income for the second quarter was $29.9 million, or $0.31 per diluted share, compared with $58.4 million, or $0.60 per diluted share, in the second quarter of 2015. • Adjusted EBITDA(B) was $110.1 million, down 15% from $130.2 million in the same period in 2015. • Total cash(C) was $461.4 million as of June 30, 2016, growing $44.8 million from the prior quarter. • Accelerated the payment of $40.0 million in principal amount of domestic subsidiary term loan, including $20.0 million in July 2016. • Repurchased and retired $19 million of Class A common stock and warrants at an average share equivalent price of $11.59, in the second quarter of 2016. • On June 28, 2016, rejoined the New York Stock Exchange “Big Board”. A, B, CReconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8. “I am pleased to report strong second quarter and first half results,” said Captain Ian T. Blackley, OSG’s president and CEO. “In our international business, spot rates have softened this summer, as global inventories have climbed, but we believe the fundamentals remain positive. In our domestic business, we face the challenges of a decline in U.S crude production, high inventory levels and the delivery of newbuild tonnage, but the sustained lower oil price environment is also driving record U.S. gasoline consumption.” “We continue to make good progress towards separating our international and domestic businesses. By creating two independent public companies, with an increased ability to focus on their own business, we believe each will be better positioned to enhance shareholder value. At the same time, the cash generated by our 79 vessel fleet gives us flexibility to further strengthen our balance sheet and consider additional opportunities to create value for our shareholders” concluded Capt. Blackley. Second Quarter 2016 Results TCE revenues for the second quarter of 2016 were $215.7 million, a decrease of $19.5 million compared with the second quarter of 2015, primarily driven by lower daily rates earned by the International Flag fleet. TCE revenues for the first half of 2016 were $452.6 million, a decrease of $4.2 million compared with the first half of 2015. Operating income for the second quarter of 2016 was $67.1 million, a decrease of $25.2 million compared with the second quarter of 2015, primarily driven by the decline in TCE revenues and an increase in depreciation and amortization expenses. Operating income for the first half of 2016 was $153.3 million, a decrease of $16.6 million compared with the first half of 2015. Net income for the second quarter of 2016 was $29.9 million, or $0.31 per diluted share, compared with $58.4 million, or $0.60 per diluted share, in the second quarter of 2015. The decrease reflects the impact of lower TCE revenues, increases in depreciation and amortization expenses, and a higher non-cash deferred tax provision, partially offset by lower interest expense. Net income for the first half of 2016 was $80.6 million, or $0.84 per diluted share, compared with $101.3 million, or $1.05 per diluted share, in the first half of 2015. Adjusted EBITDA was $110.1 million for the quarter, a decrease of $20.1 million compared with the second quarter of 2015, driven by lower daily rates earned by the International Flag fleet. Adjusted EBITDA was $239.6 million for the first half of 2016, a decrease of $4.3 million compared with the first half of 2015. International Crude Tankers TCE revenues for the International Crude Tankers segment were $66.5 million for the quarter, down 14% compared with the second quarter of 2015. This decrease resulted from a softening in daily spot rates across all vessel classes in the segment, with the VLCC spot rate declining to $47,000 per day in the second quarter, down 7% from the same period in 2015. The Aframax spot rate was $23,500 per day, down a third from the second quarter of 2015; and the Panamax blended rate was $20,500 per day, comparable to same period in 2015. TCE revenues for the International Crude Tankers segment were $153.9 million for the first half of 2016, an increase of $10.1 million compared with the first half of 2015. International Product Carriers TCE revenues for the International Product Carriers segment were $34.4 million for the quarter, down 19% compared with the second quarter of 2015. This decrease was primarily due to lower average daily blended rates earned by the MR fleet. Also contributing was a 109-day decrease in revenue days resulting primarily from the sale of an older vessel in July 2015. These decreases were partially offset by the LR1 blended rate increasing to approximately $21,300 in the second quarter, up 10% from the comparable 2015 period. TCE revenues for the International Product Carriers segment were $71.8 million for the first half of 2016, a decrease of $14.1 million compared with the first half of 2015. U.S. Flag TCE revenues for the U.S. Flag segment were $114.7 million for the quarter, down 1% compared with the second quarter of 2015, primarily due to a decline in Jones Act spot market revenue related to incremental coastwise voyage opportunities that were available to the ATBs principally employed in Delaware Bay lightering in the second quarter 2015, but not in the second quarter 2016. This decrease was largely offset by Delaware Bay lightering volumes more than doubling to 180,000 barrels per day during the quarter from the comparable 2015 period, as the pricing spread between Brent and West Texas Intermediate narrowed making it more attractive for U.S. Northeast refineries to import crude oil, as well as a 76-day increase in revenue days resulting from fewer drydock and repair days. TCE revenues for the U.S. Flag segment were $227.0 million for the first half of 2016, essentially the same as the first half of 2015. Conference Call The Company will host a conference call to discuss its second quarter 2016 results at 9:00 a.m. ET on Tuesday, August 9, 2016. To access the call, participants should dial (866) 490-3149 for domestic callers and (707) 294-1567 for international callers. Please dial in ten minutes prior to the start of the call and enter Conference ID 56297147. A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at http://www.osg.com/ An audio replay of the conference call will be available starting at 12:00 p.m. ET on Tuesday, August 9, 2016 through 11:59 p.m. ET on Tuesday, August 16, 2016 by dialing (855) 859-2056 for domestic callers and (404) 537-3406 for international callers, and entering Conference ID 56297147. Full report About OSG Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker company providing energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets. 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 New York City, NY. More information is available at www.osg.com. OSG - Overseas Shipholding Group, Inc. |
