Matson, Inc. · NYSE:MATX
Matson — Investor Presentation (February 2016)
26 slides from Matson's investor presentation, Feb 9, 2016
Slide 1: Matson Today: Connecting the Pacific
Matson Today: Connecting the Pacific
Slide 2: Investment Highlights
Investment Highlights Leveraging the Matson brand and network into growth opportunities Well maintained fleet with leading on-time vessel arrivals Fastest transit and cargo availability creates 5 to 10 day advantage and premium rates for China service Dedicated terminals with best in class truck tur
Slide 3: Multiple Growth & Value Catalysts
Multiple Growth & Value Catalysts Hawaii Volume Growth Unmatched Premium Service from China Alaska Acquisition & Integration Logistics and SSAT improvements Delivery of new Aloha class vessels in 2H-2018
Slide 4: Matson is the leading carrier into Oahu and Neighbor Islands
Matson is the leading carrier into Oahu and Neighbor Islands, providing “just-in-time” supply lifeline 5 weekly USWC departures 3 or 4 weekly Honolulu arrivals 10-ship fleet deployment offering most frequent and reliable service Matson deploys ~70% of weekly containership capacity to Honolulu Only c
Slide 5: Unique Expedited China Service (CLX)
Utilization of Jones Act ships in round trip dual head-haul revenue model Weekly 5 ship string connecting 3 ports in China to LA / Long Beach Matson’s expedited service results in 5 to 10 day competitive advantage and premium rates During USWC labor disruption service advantage was as much as 3 week
Slide 6: Matson's China Service Differential
Matson’s China Service Differential from Shanghai International Service Matson CLX Service Matson Advantage Receiving: Customs Declaration and Terminal Cut-off Times 2 to 4 days 1 to 2 days 1 to 2 days Transit: Vessel Speed and Last Call vs Other Port Calls 13 to 15 days 10 days 3 to 5 days Discharg
Slide 7: Guam a Critical Link in CLX Network
Guam a Critical Link in CLX Network Configuration Connections from Oakland and Pacific Northwest to Guam via Honolulu Volume in Guam remains stable; approximately 75% of Guam cargo is sourced from the U.S. On 8/29/15, the Department of the Navy signed the Record of Decision for relocating U.S. Marin
Slide 8: Alaska Service Similarities with Hawaii Market
Alaska Service Similarities with Hawaii Market Remote, non-contiguous economy dependent on reliable container service as part of vital supply lifeline A market that values premium service Loyal customer base; ~80% overlap with Matson’s Hawaii customers Long-term Stable Revenue Profile Northbound vol
Slide 9: Matson's 35% interest in SSAT terminal operator
Matson’s 35% interest in leading U.S. West Coast terminal operator Contributed assets and terminal leases to JV in 1999 Terminals remain dedicated to Matson Services Vessel stevedoring, terminal services, container equipment maintenance, chassis pools, on-dock Rail Reduced Matson’s capital investmen
Slide 10: Matson Logistics: A National Network of Integrated Services
Matson Logistics A National Network of Integrated Services Leverages Matson brand Scalable model with high ROIC Improving results Warehouse operating improvements Returned operating margins to 2 - 4% target range Focus Organic growth as a national provider of integrated logistics solutions Pursue gr
Slide 11: Matson's Performance since Separation
Matson’s Performance since Separation See the Appendix for a reconciliation of GAAP to non-GAAP for Financial Metrics Free cash flow per share = Net cash flow from operations less capital expenditures divided by diluted shares outstanding As of 9/30/15 As of 9/30/15
Slide 12: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash LTM = Last twelve months ended September 30, 2015 Does not include $6.6 million in other uses of cash Based on total cash consideration (including common shares, warrants, repaid debt, accrued interest and breakage fees)
Slide 13: Summary Remarks
Summary Remarks Hawaii Expect to benefit from continued market growth and a stronger market position Alaska Integration progressing well Low energy prices create near-term economic headwinds China International market continues to be chronically oversupplied with freight rates near historic lows Exp
Slide 14: Summary Remarks
Summary Remarks a NYSE Hawaii - Expect to benefit from continued market growth and a stronger market position Alaska - Integration progressing well - Low energy prices create near-term economic headwinds China - International market continues to be chronically oversupplied with freight rates near hi
Slide 15: Condensed Statement of Income
Condensed Statement of Income Key Items Total revenue increased 23.2% Operating margin increased to 13.2% from 10.2% (in $ millions) 3Q15 3Q14 Operating Revenue Ocean Transportation $444.8 $329.5 Logistics 99.5 112.3 Total operating revenue 544.3 441.8 Costs and Expenses Operating costs 424.8 363.8
Slide 16: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 9/30/15 12/31/14 Cash and cash equivalents $ 25.5 $ 293.4 Other current assets 322.8 226.1 Total current assets 348.3 519.5 Investment in terminal joint venture 68.2 64.4 Property and equipment, net 839.9 691.2 Capital Construction Fund deposits 11.7 27
Slide 17: Matson's Operating Income and EBITDA
Matson’s Operating Income and EBITDA LTM = Last Twelve Months ended September 30, 2015 More detailed information is available in previously filed Form 10-Ks and 10-Qs $ millions
Slide 18: Ocean Transportation Operating Income
Ocean Transportation Operating Income Operating Income Operating Margin 10-year Average Annual Operating Income: $103.8 million $ millions Adjusted Operating Income Operating Margin LTM = Last Twelve Months ended September 30, 2015 More detailed information is available in previously filed Form 10-K
Slide 19: Logistics Operating Income
Logistics Operating Income Operating Income Operating Margin 10-year Average Annual Operating Income: $10.9 million $ millions Operating Income Operating Margin LTM = Last Twelve Months ended September 30, 2015 More detailed information is available in previously filed Form 10-Ks and 10-Qs $14.4 $20
Slide 20: Pre-Tax Income (Loss) SSAT Investment
Pre-Tax Income (Loss) SSAT Investment 10-year Average Annual Pre-tax Income: $8.2 million $ millions LTM = Last Twelve Months ended September 30, 2015 More detailed information is available in previously filed Form 10-Ks and 10-Qs $17.1 $13.3 $10.7 $5.2 $6.2 $12.8 $8.6 $3.2 - $2.0 $6.6 $14.3 -$5 $0
Slide 21: Matson's Jones Act Fleet Deployment
Matson’s Jones Act Fleet Deployment Vessel Name Type Built Capacity (TEU) Capacity (Autos) Schedule MAUI Container (SS) 1978 1,644 SEA/OAK/HON MANOA Container 1982 2,824 SEA/OAK/HON MOKIHANA Container/Ro-Ro 1983 1,994 1,323 LA/HON MATSONIA Container/Ro-Ro (SS) 1973 1,727 450 OAK/HON MAHIMAHI Contain
Slide 22: Fleet Renewal: Two 3600 TEU dual fuel containerships
Two 3600 TEU dual fuel, LNG capable containerships from Aker Philadelphia Contract price $418 million Optimized speed to ensure cargo reliability Additional 45-foot capacity and reefer outlets Cell guide spacing (constr. materials) Neighbor Island accessible Significantly lowers cost per TEU in Hawa
Slide 23: 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 24: GAAP to Non-GAAP Reconciliation (As of September 30, 2015)
GAAP to Non-GAAP Reconciliation (As of September 30, 2015) NET DEBT RECONCILIATION $ 481.5 Less: Cash and cash equivalents (25.5) Cash on deposit in Capital Construction Fund (11.7) $ 444.3 EBITDA RECONCILIATION Change $ 41.5 $ 21.5 $ 20.0 $ 104.2 Add: Income tax expense 25.6 19.1 6.5 77.7 Add: Inte
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (in $ millions) 2014 2013 2012 2011 Net Income 70.8 53.7 45.9 34.2 Subtract: Income (loss) from discontinued operations - (6.1) (11.6) Add: Income tax expense 51.9 32.2 33.0 25.1 Add: Interest expense 17.3 14.4 11.7 7.7 Add: Depreciation & amortization 69.0 69.0 72.1
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Net Income ‘Subtract: Income (loss) from discontinued operations - 1) (11.6) ‘Add: Income tax expense 519 322 33.0 25.4 ‘Add: Interest expense 173 144 W7 7 ‘Add: Depreciation & amortization 69.0 690 724 16 ‘Add: Deferred dry-docking amortization Serine Bentttined Ops