Slide 1: First Quarter 2015 Earnings Conference Call
First Quarter 2015 Earnings Conference Call First Quarter 2015 Earnings Conference Call | May 4, 2015 – Slide 1
Slide 2: Opening Remarks: Strong first quarter performance
Strong first quarter performance Continued levels of exceptional demand for our expedited China service Yield improvements in Hawaii and Guam Improvements in Logistics operations and SSAT Lower bunker fuel prices and favorable timing of fuel surcharge collections Full year 2015 operating results exp
Slide 3: EBITDA, EPS – 1Q 2015
EBITDA, EPS – 1Q 2015 1Q15 Net Income of $25.0 million versus 1Q14 Net Income of $3.4 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics First Quarter 2015 Earnings Conference Call | May 4, 2015 – Slide 4
Slide 4: Hawaii Service
Hawaii Service First Quarter Performance Modest westbound market growth was largely offset by lower eastbound backhaul freight Higher freight yields Automobile volume down 31.5 percent due to certain customer losses Full Year 2015 Outlook Anticipating modest overall market growth in Hawaii trade Com
Slide 5: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY) 2013 2014 2015F 2016F 2017F Real Gross Domestic Product 1.9 2.9 3.8 2.6 2.0 Visitor Arrivals 1.7 2.0 1.0 1.1 0.9 Construction Jobs 5.6 1.7 5.1 6.6 5.5 Residential Building Permits 16.5 (9.8) 21.0 26.9 11.9 Non-Residential Building Permits (10.7) 28
Slide 6: Guam Service
Guam Service Full Year 2015 Outlook Continued general market growth Flat to modest container volume growth expected, assuming no new competitor enters market First Quarter Performance Volume decreased 5.0 percent due to the timing of select shipments First Quarter 2015 Earnings Conference Call | May
Slide 7: China Expedited Service (CLX)
China Expedited Service (CLX) Source: Shanghai Shipping Exchange First Quarter Performance Continued strong demand for premium expedited service, amplified by port congestion on U.S. West Coast Significantly higher freight rates Full Year 2015 Outlook Market overcapacity expected to continue Expect
Slide 8: SSAT Joint Venture
SSAT Joint Venture First Quarter Performance Improved lift volume PMA and ILWU announced tentative agreement on new five-year contract covering 29 West Coast ports Full Year 2015 Outlook Incremental volume related to clearing of international carrier cargo backlog in 1H-15 Modest profit expected for
Slide 9: Matson Logistics
Matson Logistics First Quarter Performance Lower international intermodal volume related to port congestion on the U.S. West Coast Warehouse operating improvements Yield improvements in highway and intermodal services Source: Association of American Railroads Full Year 2015 Outlook Improvement in vo
Slide 10: Update on Pending Alaska Acquisition
On April 21, the U.S. Federal Trade Commission cleared Pasha’s acquisition of Horizon’s Hawaii service Pasha’s acquisition of Horizon’s Hawaii service expected to close by the end of the second quarter Matson’s acquisition of Horizon’s Alaska operations expected to close immediately after Pasha tran
Slide 11: Acquisition funding and expected financial effects
Expect to fund the acquisition from cash on hand and available borrowings under revolving credit facility May fund a portion of the transaction with long-term financing proceeds at Closing or shortly thereafter As stated at November 11, 2014 announcement, Matson continues to expect: One-time transac
Slide 12: 1Q2015 Operating Income
1Q2015 Operating Income SSAT had a $3.4 million contribution in 1Q15 compared to a $0.2 million contribution in 1Q14 1Q14 1Q15 Change Revenue $294.6 $305.5 $10.9 Operating Income $9.4 $43.9 $34.5 Oper. Income Margin 3.2% 14.4% 1Q14 1Q15 Change Revenue $97.9 $92.7 ($5.2) Operating Income $0.5 $1.0 $0
Slide 13: Condensed Statement of Income
Condensed Statement of Income Key Items Total revenue increased 1.5% Operating costs decreased 8.5% Operating margin increased to 14.4% from 3.2% Effective tax rate of 38.4% 1Q EBITDA improved 125% YOY See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics (in $ millions) 1Q
Slide 14: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 3/31/15 12/31/14 Cash and cash equivalents $ 325.8 $ 293.4 Other current assets 229.2 226.1 Total current assets 555.0 519.5 Investment in terminal joint venture 67.8 64.4 Property and equipment, net 678.7 691.2 Capital Construction Fund deposits 27.5 2
Slide 15: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash (1) Does not include $2.7 million in Other uses of Cash First Quarter 2015 Earnings Conference Call | May 4, 2015 – Slide 16
Slide 16: Full Year 2015 Outlook
Outlook excludes any future impact of the molasses incident, the pending transaction with Horizon, and is being provided relative to 2014 operating income Ocean Transportation operating income for 2015 expected to be moderately higher than 2014 levels Hawaii volume to approximate 2014 level Flat to
Slide 17: Summary Remarks
Summary Remarks Positive outlook for the remainder of 2015 driven by: Closing the pending acquisition of Horizon’s Alaska Hawaii construction activity and market growth Sustained premium rates in our China expedited service Continued improvement in Logistics Businesses continue to generate substanti
Slide 18: Addendum
Addendum First Quarter 2015 Earnings Conference Call | May 4, 2015 – Slide 19
Slide 19: Addendum – Use of Non-GAAP Measures
Addendum – Use of Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to in
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Net Debt Reconciliation EBITDA Reconciliation (1) EBITDA is defined as the sum of net income, less income or loss from discontinued operations, plus income tax expense, intere st expense and depreciation and amortization. EBITDA should not be considered as an alternat