Slide 1: First Quarter 2013 Earnings Conference Call – May 6, 2013
First Quarter 2013 Earnings Conference Call – May 6, 2013
Slide 2: Forward Looking Statements
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, May 6, 2013. We believe that our expectations and assumptions are reasonab
Slide 3: Opening Remarks
Good YOY results in Ocean Transportation in 1Q13, driven by: Higher China rates and increased Hawaii volume Operating an optimal 9-ship fleet versus 10-ship fleet in 1Q12 Logistics, SSAT at essentially breakeven Reduced total debt by $18.0 million in 1Q13, $71.7 million since Separation With 1Q13 co
Slide 4: EBITDA, EPS – 1Q 2013
EBITDA, EPS – 1Q 2013 1Q13 Net Income of $9.1 million versus 1Q12 Net Income of $3.8 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics
Slide 5: Hawaii Service First Quarter Performance
Hawaii Service First Quarter Performance Volume up 5.5% YOY, driven by: Increase in EB activity Market growth and gains Optimal 9-ship deployment Outlook for 2013 Moderate volume gains in total EB volume gains historically volatile 9-ship fleet deployment for full year
Slide 6: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY, except Unemployment rate) 2010 2011 2012 2013F 2014F 2015F Real Gross Domestic Product 1 1.4 (0.2) 1.6 2.6 2.5 2.3 Visitor Arrivals 1 7.7 4.0 9.6 5.4 2.5 2.0 Unemployment Rate 2 6.9 6.7 6.0 5.1 4.6 4.3 Construction Jobs 2,3 (8.1) (2.0) 2.4 7.0 9.8
Slide 7: SSAT Joint Venture
SSAT Joint Venture Outlook for 2013 Customer loss will negatively impact joint venture Aggressive expense control initiatives Breakeven performance expected First Quarter Performance Customer losses continue to weigh on performance Markets growing modestly
Slide 8: Guam Service
Guam Service Outlook for 2013 Muted economic activity Volume similar to 2012, assuming no new competitor enters market Military cuts and sequestration impact unclear First Quarter Performance Container volume off due to lower shipment levels from the U.S. military Overall market has contracted sligh
Slide 9: China Expedited Service (CLX)
China Expedited Service (CLX) First Quarter Performance YOY spot freight rates up significantly Benefits approximately 50% of volume Container volume up 3.6% in 1Q13 due to delayed sailing that slipped into 2013 Outlook for 2013 Record global capacity added YOY freight rates expected to erode modest
Slide 10: Matson Logistics
Matson Logistics First Quarter Performance Improvement in domestic intermodal and highway volume Lower G&A Declines in warehouse operations Outlook for 2013 Expense control focus Improve margins to 1-2% of revenues 1. American Association of Railroads
Slide 11: Operating Income
Operating Income SSAT contributed $0.2 million in 1Q13 vs. $0.8 million in 1Q12 1Q12 1Q13 Change Revenue $279.5 $299.9 $20.4 Operating Income $5.8 $18.5 $12.7 Oper. Income Margin 2.1% 6.2% 1Q12 1Q13 Change Revenue $86.6 $94.8 $8.2 Operating Income $0.3 $0.2 ($0.1) Oper. Income Margin 0.3% 0.2% Logis
Slide 12: Condensed Income Statement
Condensed Income Statement (dollars in millions) 3/31/13 3/31/12 Operating Revenue Ocean transportation $ 299.9 $ 279.5 Logistics revenue 94.8 86.6 Total operating revenue 394.7 366.1 Costs and Expenses Operating costs 342.8 329.7 Selling, general and administrative 33.4 28.6 Other (0.2) 1.7 Operati
Slide 13: Uses of Cash
Maintained quarterly dividend of $0.15/share 1Q13 maintenance capital expenditures were $6.3 million Reef Shipping Limited asset acquisition was $9.6 million Reduced total debt by $18.0 million in first quarter Uses of Cash $40.4
Slide 14: Condensed Balance Sheet
Condensed Balance Sheet Assets (dollars in millions) 3/31/13 12/31/12 Cash $ 11.0 $ 19.9 Other current assets 204.4 214.2 Total current assets 215.4 234.1 Investment in terminal joint venture 59.7 59.6 Property, net 759.0 762.5 Other assets 115.1 118.1 Total $1,149.2 $1,174.3 Liabilities & Sharehold
Slide 15: Full Year 2013 Outlook
Ocean Transportation operating income for 2013 expected to be moderately higher than 2012: Balance of year modestly higher each quarter on a YOY basis Lose YOY benefit of operating 9-ship fleet in 2Q Moderate increase in Hawaii volume Flat Guam volume Modest erosion in China rates 9-ship fleet deplo
Slide 16: Summary Remarks
Continue to be optimistic about Hawaii growth prospects as construction cycle begins to materialize Logistics and SSAT businesses well positioned for eventual recovery Activity in Guam muted, but performing well as sole provider of ocean carriage services Continue to generate strong earnings and cas
Slide 17: Addendum
Addendum
Slide 18: Use of Non-GAAP Measures
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 incur and ser
Slide 19: GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA) Dollars in Millions First Quarter Last Twelve Months (LTM) 2012 2013 Change As of March 31, 2013 Net Income 3.8 9.1 5.3 51.2 Subtract: Income/Loss from disc. operations 1.8 0.0 (1.8) (7.9) Add: Income tax expense 2.1 5.9 3.8 36.8 Add: Interest ex