Matson, Inc. · NYSE:MATX
Matson — Q3 2020 Earnings Presentation
20 slides from Matson's earnings presentation, Nov 2, 2020
Slide 1: Third Quarter 2020 Earnings Conference Call
1 Third Quarter 2020 Earnings Conference Call Third Quarter 2020 Earnings Conference Call November 2, 2020
Slide 2: Forward-Looking Statements
2 Third Quarter 2020 Earnings Conference Call Forward-Looking Statements Statements made during this 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 November 2, 2020. We believe that our expect
Slide 3: Recap of Third Quarter 2020 Results
3 Third Quarter 2020 Earnings Conference Call Recap of Third Quarter 2020 Results • Recap of Matson’s 3Q20 results: – Matson’s lines of business continued to perform well in 3Q20 despite the ongoing challenges from the COVID-19 pandemic and related economic effects – Ocean Transportation: • China st
Slide 4: Confident CLX+ Can Be a Permanent Service
4 Third Quarter 2020 Earnings Conference Call Confident CLX+ Can Be a Permanent Service • Why are we confident that we can make the CLX+ service permanent? – 15-year track record of operating the industry leading expedited CLX service – Introduction of AAX helps lower the long-term breakeven economi
Slide 5: Confident CLX+ Can Be a Permanent Service (continued)
5 Third Quarter 2020 Earnings Conference Call Confident CLX+ Can Be a Permanent Service (continued) • Supply fundamentals – constraints in transpacific air and ocean markets expected to remain for some time – Continued dislocation in transpacific air freight markets • Although some transpacific pass
Slide 6: Current Priorities
6 Third Quarter 2020 Earnings Conference Call Current Priorities • Safeguard employee health and safety • Ensure consistency of Ocean Transportation services and continue to deliver for our Matson Logistics customers • Drive organic opportunities – Making CLX+ permanent – Introduced AAX service in A
Slide 7: Hawaii Service Third Quarter 2020 Performance
7 Third Quarter 2020 Earnings Conference Call Hawaii Service Third Quarter 2020 Performance • Container volume decreased 0.8% YoY – WB market declined modestly YoY • Benefitted from reopening of local economy following temporary retail store closures in 2Q • Benefitted from stimulus spending – Conti
Slide 8: Hawaii Service – Current Business Trends
8 Third Quarter 2020 Earnings Conference Call Hawaii Service – Current Business Trends • Hawaii economy remains in significant downturn • Travel restrictions to Hawaii eased; Pre-travel testing started on October 15th • Economic recovery trajectory remains highly uncertain as tourism-related busines
Slide 9: China Service Third Quarter 2020 Performance
9 Third Quarter 2020 Earnings Conference Call China Service Third Quarter 2020 Performance • Container volume increased 124.7% YoY – Approximately 85% of YoY volume increase driven by CLX+ – Increased capacity in CLX service in 3Q with addition of Daniel K. Inouye • Continued dislocation in air frei
Slide 10: CLX+ and the Alaska-Asia Express
10 Third Quarter 2020 Earnings Conference Call CLX+ and the Alaska-Asia Express On August 26th, Matson announced the introduction of the Alaska-Asia Express (AAX) as a backhaul service on the CLX+ • Important route for Alaska seafood exports to Asia • Connecting service from Anchorage and Kodiak via
Slide 11: Guam Service Third Quarter 2020 Performance
11 Third Quarter 2020 Earnings Conference Call Guam Service Third Quarter 2020 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 Q1 Q2 Q3 Q4 2019 2020 2.1% Current Business Trends • Guam economy in downturn as tourism levels remain depressed – Second shelter-in-place order
Slide 12: Alaska Service Third Quarter 2020 Performance
12 Third Quarter 2020 Earnings Conference Call Alaska Service Third Quarter 2020 Performance • Container volume increased 1.5% YoY – Higher southbound volume as a result of stronger seafood volume – Modestly lower northbound volume – Benefitted from continued reopening of local economy from temporar
Slide 13: SSAT Joint Venture Third Quarter 2020 Performance
13 Third Quarter 2020 Earnings Conference Call SSAT Joint Venture Third Quarter 2020 Performance Equity in Income of Joint Venture Note: 2Q 2019 equity in income negatively impacted by the timing of lease accounting. $ 0.0 $ 1.0 $ 2.0 $ 3.0 $ 4.0 $ 5.0 $ 6.0 $ 7.0 $ 8.0 $ 9.0 Q1 Q2 Q3 Q4 $ in millio
Slide 14: Matson Logistics Third Quarter 2020 Performance
14 Third Quarter 2020 Earnings Conference Call Matson Logistics Third Quarter 2020 Performance Operating Income $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 $ 14.0 Q1 Q2 Q3 Q4 $ in millions 2019 2020 • Operating income increased $0.6 million, YoY to $11.9 million – Higher contributions from all of th
Slide 15: Financial Results – Summary Income Statement
15 Third Quarter 2020 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 expense reversal of $2.9 million resulting from discrete adjustments in applying the provisions of the
Slide 16: Cash Generation and Uses of Cash
16 Third Quarter 2020 Earnings Conference Call Cash Generation and Uses of Cash ($ 50.0) $ 0.0 $ 50.0 $ 100.0 $ 150.0 $ 200.0 $ 250.0 $ 300.0 $ 350.0 $ 400.0 Cash Flow from Operations Proceeds from Sale-Leasebacks Paydown of Borrowings, net Maint. Capex New Vessel Capex (1) Dividends Other Cash Flow
Slide 17: Financial Results – Summary Balance Sheet
17 Third Quarter 2020 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $823.6 million(1) – $66.4 million of debt reduction in 3Q20 – Revolver balance of $123 million(2) • Net Debt of $810.9 million(3) • Leverage ratio per amended debt agreements of 2.4x(4) See the A
Slide 18: New Vessel Payments and Percent of Completion
18 Third Quarter 2020 Earnings Conference Call New Vessel Payments and Percent of Completion Actual and Estimated Vessel Progress Payments(1) FY 2020 ($ in millions) 1Q 2Q 3Q Cash Capital Expenditures $ 7.2 $ 5.7 $ 39.3 Capitalized Interest 1.9 1.7 2.0 Capitalized Vessel Construction Expenditures $
Slide 19: Appendix
19 Third Quarter 2020 Earnings Conference Call Appendix
Slide 20: Appendix – Non-GAAP Measures
20 Third Quarter 2020 Earnings Conference Call Appendix – 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