Matson, Inc. · NYSE:MATX
Matson — Q3 2018 Earnings Presentation
20 slides from Matson's earnings presentation, Nov 5, 2018
Slide 1: Third Quarter 2018 Earnings Conference Call
1 Third Quarter 2018 Earnings Conference Call Third Quarter 2018 Earnings Conference Call November 5, 2018
Slide 2: Forward-Looking Statements
2 Third Quarter 2018 Earnings Conference Call Forward-Looking Statements Statements made during this call and presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of today, November 5, 2018. We believe
Slide 3: Opening Remarks
3 Third Quarter 2018 Earnings Conference Call Opening Remarks $ 0.79 3Q 2017 3Q 2018 EPS, Fully Diluted $ 0.97 $ 34.1 3Q 2017 3Q 2018 Net Income ($ in millions) $ 41.6 • Matson’s results in 3Q18 were in line with expectations – Favorable contributors include: • Higher rates in China • Higher contrib
Slide 4: The Daniel K. Inouye
4 Third Quarter 2018 Earnings Conference Call The Daniel K. Inouye We welcome the first of four new ships into the fleet with the arrival of the Daniel K. Inouye.
Slide 5: Hawaii Service
5 Third Quarter 2018 Earnings Conference Call Hawaii Service Third Quarter 2018 Performance • Container volume decreased 1.1% YoY – One less sailing – Stable market share • Favorable ongoing economic conditions in Hawaii Container Volume (FEU Basis) Full Year 2018 Outlook • Expect volume to approxim
Slide 6: Hawaii Economic Indicators
6 Third Quarter 2018 Earnings Conference Call Hawaii Economic Indicators Real GDP Growth Construction Jobs Growth Real Building Permits Growth “…[T]he fundamentals underpinning the local economy look favorable. Global tourism continues to power forward, and there remains a healthy pipeline of constr
Slide 7: China Expedited Service (CLX)
7 Third Quarter 2018 Earnings Conference Call China Expedited Service (CLX) Third Quarter 2018 Performance • Every CLX vessel was full • Container volume decreased 3.3% YoY – 1 dry-dock return voyage in 3Q17 • Continued to realize a sizeable rate premium Container Volume (FEU Basis) Full Year 2018 O
Slide 8: China – U.S. Tariffs
8 Third Quarter 2018 Earnings Conference Call China – U.S. Tariffs • In July/August, U.S. implemented 25% tariff on $50 billion worth of products • In September, U.S. implemented initial 10% tariff on additional $200 billion worth of products; tariff moves to 25% on January 1 – Finished garments and
Slide 9: Guam Service
9 Third Quarter 2018 Earnings Conference Call Guam Service Third Quarter 2018 Performance • Container volume was flat YoY and sequentially – Continued competitive pressure from APL • Market was flat YoY Container Volume (FEU Basis) Full Year 2018 Outlook • Expect heightened competitive environment a
Slide 10: Alaska Service
10 Third Quarter 2018 Earnings Conference Call Alaska Service Third Quarter 2018 Performance • Container volume decreased 2.0% YoY – Weaker-than-expected SB seafood season – Increase in NB volume • Signs of Alaska economy beginning to stabilize Container Volume (FEU Basis) 10,000 12,000 14,000 16,00
Slide 11: SSAT Joint Venture
11 Third Quarter 2018 Earnings Conference Call SSAT Joint Venture Third Quarter 2018 Performance • Terminal joint venture contribution was $9.2 million, $1.7 million higher than last year – Increase primarily attributable to increased lift volume Equity in Income of Joint Venture $ 0.0 $ 2.0 $ 4.0 $
Slide 12: Matson Logistics
12 Third Quarter 2018 Earnings Conference Call Matson Logistics Third Quarter 2018 Performance • Operating income increased $2.6 million YoY to $9.9 million – Improved performance across all service lines – Tight truck market plays to Matson Logistics’ strengths in customer service • Span performing
Slide 13: Financial Results – Summary Income Statement
13 Third Quarter 2018 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. (1) Includes a non-cash tax adjustment of $3.1 million resulting from a reduction in the alternative minimum tax receivable under t
Slide 14: Financial Results – Summary Balance Sheet
14 Third Quarter 2018 Earnings Conference Call Financial Results – Summary Balance Sheet • Total debt of $908.1 million • Net debt of $896.0 million • Net debt-to-LTM EBITDA of 3.0x See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. Debt Levels ($ in millions) ASSETS Cash a
Slide 15: Cash Generation and Uses of Cash
15 Third Quarter 2018 Earnings Conference Call Cash Generation and Uses of Cash ($ 50.0) $ 0.0 $ 50.0 $ 100.0 $ 150.0 $ 200.0 $ 250.0 $ 300.0 $ 350.0 $ 400.0 $ 450.0 Cash Flow from Operations Net Borrowings Proceeds from Disposal of PP&E, and other Maint. Capex New Vessel Capex (1) Dividends Net dec
Slide 16: New Vessel Payments and Percent of Completion
16 Third Quarter 2018 Earnings Conference Call New Vessel Payments and Percent of Completion Actual and Estimated Vessel Progress Payments FY 2018 ($ in millions) 1Q 2Q 3Q Cash Capital Expenditures $ 54.0 $ 104.6 $ 50.6 Capitalized Interest 3.7 4.5 5.2 Capitalized Vessel Construction Expenditures $
Slide 17: 2018 Outlook
17 Third Quarter 2018 Earnings Conference Call 2018 Outlook FY 2018 Outlook Items Operating income: Ocean Transportation Modestly higher than $126.4 million(1) achieved in FY 2017 Logistics Approximately $30 million Depreciation and Amortization Approximately $132 million, including $36 million in d
Slide 18: Addendum
18 Third Quarter 2018 Earnings Conference Call Addendum
Slide 19: Addendum – Operating Income Reconciliation
19 Third Quarter 2018 Earnings Conference Call Addendum – Operating Income Reconciliation
Slide 20: Addendum – Non-GAAP Measures
20 Third Quarter 2018 Earnings Conference Call Addendum – 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, hel