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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2025 (February 25, 2025)
Matson, Inc.
(Exact Name of Registrant as Specified in its Charter)
_____________________
Hawaii |
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001-34187 |
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99-0032630 |
(State or Other Jurisdiction of |
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(Commission File Number) |
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(I.R.S. Employer Identification |
1411 Sand Island Parkway |
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Honolulu, Hawaii |
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96819 |
(Address of principal executive offices) |
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(zip code) |
Registrant’s telephone number, including area code: (808) 848-1211
(Former Name or former address, if changed since last report)
_____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, without par value |
MATX |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02.Results of Operations and Financial Condition.
On February 25, 2025, Matson, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the quarter ended December 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1. In addition, the Company posted an investor presentation to its website. A copy of the investor presentation is attached hereto as Exhibit 99.2.
The information in this report (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 9.01.Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits.
The exhibits listed below are being furnished with this Form 8-K.
99.1 |
Press Release issued by Matson, Inc., dated February 25, 2025 |
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99.2 |
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104 |
Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MATSON, INC. |
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/s/ Joel M. Wine |
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Joel M. Wine |
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Executive Vice President and Chief Financial Officer |
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Dated: February 25, 2025 |
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Exhibit 99.1
Investor Relations inquiries: |
News Media inquiries: |
Justin Schoenberg |
Keoni Wagner |
Matson, Inc. |
Matson, Inc. |
510.628.4234 |
510.628.4534 |
jschoenberg@matson.com |
kwagner@matson.com |
FOR IMMEDIATE RELEASE
MATSON, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 RESULTS; PROVIDES 2025 OUTLOOK
| ● | 4Q24 EPS of $3.80 |
| ● | Full Year 2024 EPS of $13.93 |
| ● | Full Year 2024 Net Income and EBITDA of $476.4 million and $738.9 million, respectively |
| ● | 1Q25 Consolidated Operating income expected to be meaningfully higher year-over-year |
| ● | 2025 Consolidated Operating Income dependent on timing of Red Sea normalization and other factors |
HONOLULU, Hawaii (February 25, 2025) – Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX), a leading U.S. carrier in the Pacific, today reported net income of $128.0 million, or $3.80 per diluted share, for the quarter ended December 31, 2024. Net income for the quarter ended December 31, 2023 was $62.4 million, or $1.78 per diluted share. Consolidated revenue for the fourth quarter 2024 was $890.3 million compared with $788.9 million for the fourth quarter 2023.
“Matson had a very strong fourth quarter that exceeded our expectations, capping off a strong year. For the quarter, our China service was the primary driver of the year-over-year increase in Ocean Transportation and consolidated operating income. We saw seasonally stronger freight demand with significantly higher year-over-year freight rates for our industry-leading CLX and MAX services. In Logistics, operating income increased year-over-year primarily due to a higher contribution from supply chain management. For the full year 2024, our consolidated operating income increased year-over-year primarily driven by significantly higher freight rates in our China service. The higher freight rates, which started in the middle of the second quarter and remained through year end, were supported by a resilient U.S. economy and a stable consumer demand environment coupled with tighter supply chain conditions.”
Mr. Cox added, “Looking ahead, we expect elevated freight rates in our China service to continue into the first quarter 2025. Beyond the first quarter, our China service rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. With respect to the Red Sea, assuming trade conditions normalize by the middle of the year, we expect freight rates in our China service to moderate in the second half of the year. However, if the Red Sea remains disrupted through year end, we expect our freight rates in China to remain elevated throughout the year. For our domestic tradelanes in 2025, we expect volume in Guam to be modestly higher than the levels achieved in 2024 and volume in Hawaii and Alaska to approximate the levels achieved in 2024. For Logistics in 2025, we expect modestly lower operating income due to challenging business conditions for transportation brokerage and a lower contribution from supply chain management.”
“As a result, for the first quarter 2025, we expect Matson’s consolidated operating income to be meaningfully higher than the level achieved in the same period last year. We expect full year 2025 consolidated operating income to be largely driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. Assuming trade conditions in the Red Sea normalize by the middle of the year and there are no significant changes from today in the other factors referenced above, we expect full year 2025 consolidated operating income to be moderately lower than the level achieved last year.
1
However, if trade conditions in the Red Sea remain disrupted through year end and there are no significant changes from today in the other factors noted above, we expect our full year 2025 consolidated operating income to approach the level achieved in 2024.”
Fourth Quarter 2024 Discussion and Outlook for 2025
Ocean Transportation: The Company’s container volume in the Hawaii service in the fourth quarter 2024 was 1.7 percent lower year-over-year. The decrease was primarily due to lower general demand. Hawaii’s economy is expected to continue to grow slowly supported by modest gains in tourism, a low unemployment rate, and increased construction activity, but partially restrained by continued challenges in population growth and lower discretionary income as a result of high inflation and interest rates. The Company expects volume in 2025 to be comparable to the level achieved in 2024, reflecting modest economic growth in Hawaii and stable market share.
In China, the Company achieved significantly higher freight rates in the fourth quarter 2024 compared to the year ago period. The Company’s container volume in the fourth quarter 2024 also increased 7.2 percent year-over-year due to seasonally stronger freight demand. The elevated freight rates in the fourth quarter 2024 were supported by a resilient U.S. economy and a stable consumer demand environment coupled with tighter supply chain conditions. The Company expects elevated freight rates to continue into the first quarter 2025. Beyond the first quarter, the Company expects freight rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. With respect to the Red Sea, assuming trade conditions normalize by the middle of the year, the Company expects freight rates to moderate in the second half of the year. However, if the Red Sea remains disrupted through year end, the Company expects freight rates to remain elevated throughout the year.
In Guam, the Company’s container volume in the fourth quarter 2024 decreased 10.0 percent year-over-year. The decrease was primarily due to lower demand from retail and food and beverage segments. In the near term, the Company expects Guam’s economy to grow modestly supported by a low unemployment rate and an increase in construction activity. For the full year 2025, the Company expects volume to be modestly higher than the level achieved last year.
In Alaska, the Company’s container volume for the fourth quarter 2024 increased 1.1 percent year-over-year. The increase was primarily due to higher northbound volume, partially offset by an additional sailing in the year ago period. In the near term, the Company expects continued economic growth in Alaska supported by a low unemployment rate, jobs growth and continued oil and gas exploration and production activity. For the full year 2025, the Company expects volume to approximate the level achieved last year.
The loss in the fourth quarter 2024 from the Company’s SSAT joint venture investment was $9.5 million, or $13.6 million lower than the income of $4.1 million in fourth quarter 2023. The decrease was due to a $18.4 million impairment charge related to the write-down of a terminal operating lease asset, partially offset by higher year-over-year lift volume. On an after-tax basis, the impairment charge impacted fourth quarter 2024 net income and diluted EPS by $14.0 million and $0.42 per share, respectively. For 2025, the Company expects the contribution from SSAT to approximate the level achieved in 2024, without taking into account the $18.4 million impairment charge in the fourth quarter 2024.
Based on the outlook trends noted above, the Company expects Ocean Transportation operating income for the first quarter 2025 to be meaningfully higher than the $27.6 million achieved in the first quarter 2024. For full year 2025, the Company expects Ocean Transportation operating income to be largely driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. Assuming trade conditions in the Red Sea normalize by the middle of the year and there are no significant changes from today in the other factors referenced above, the Company expects full year 2025 Ocean Transportation operating income to be moderately lower than the $500.9 million achieved in 2024. However, if trade conditions in the Red Sea remain disrupted through year end and there are no significant changes from today in the other factors noted above, the Company expects full year 2025 Ocean Transportation operating income to approach the level achieved in 2024.
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Logistics: In the fourth quarter 2024, operating income for the Company’s Logistics segment was $10.1 million, or $1.2 million higher compared to the level achieved in the fourth quarter 2023. The increase was primarily due to a higher contribution from supply chain management. For 2025, the Company expects challenging business conditions for transportation brokerage for most of the year and a lower contribution from supply chain management, which the Company expects to lead to modestly lower operating income compared to the level achieved in 2024. For the first quarter 2025, the Company expects Logistics operating income to be modestly lower than the $9.3 million achieved in the first quarter 2024.
Consolidated Operating Income: For the first quarter 2025, the Company expects consolidated operating income to be meaningfully higher than the $36.9 million achieved in the first quarter 2024. For full year 2025, the Company expects consolidated operating income to be largely driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. Assuming trade conditions in the Red Sea normalize by the end of the first half of the year and there are no significant changes from today in the other factors referenced above, the Company expects full year 2025 consolidated operating income to be moderately lower than the $551.3 million achieved in 2024. However, if trade conditions in the Red Sea remain disrupted through year end and there are no significant changes from today in the other factors noted above, the Company expects full year 2025 consolidated operating income to approach the level achieved in 2024.
Depreciation and Amortization: For full year 2025, the Company expects depreciation and amortization expense to be approximately $200 million, inclusive of dry-docking amortization of approximately $26 million.
Interest Income: The Company expects interest income for the full year 2025 to be approximately $31 million.
Interest Expense: The Company expects interest expense for the full year 2025 to be approximately $7 million.
Other Income (Expense): The Company expects full year 2025 other income (expense) to be approximately $9 million in income, which is attributable to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.
Income Taxes: In the fourth quarter 2024, the Company’s effective tax rate was 19.1 percent. For the full year 2025, the Company expects its effective tax rate to be approximately 22.0 percent.
Capital and Vessel Dry-docking Expenditures: For the full year 2024, the Company made capital expenditure payments excluding new vessel construction expenditures of $214.5 million, new vessel construction expenditures (including capitalized interest and owner’s items) of $95.6 million, and dry-docking payments of $30.2 million. For the full year 2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $120 to $140 million, new vessel construction expenditures (including capitalized interest and owner’s items) of approximately $305 million, and dry-docking payments of approximately $40 million.
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Results By Segment
Ocean Transportation — Three months ended December 31, 2024 compared with 2023
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Three Months Ended December 31, |
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(Dollars in millions) |
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2024 |
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2023 |
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Change |
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Ocean Transportation revenue |
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$ |
742.1 |
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$ |
639.7 |
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$ |
102.4 |
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16.0 |
% |
Operating costs and expenses |
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(604.7) |
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(573.3) |
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(31.4) |
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5.5 |
% |
Operating income |
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$ |
137.4 |
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$ |
66.4 |
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$ |
71.0 |
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106.9 |
% |
Operating income margin |
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18.5 |
% |
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10.4 |
% |
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Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) |
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Hawaii containers |
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34,800 |
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35,400 |
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(600) |
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(1.7) |
% |
Hawaii automobiles |
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7,000 |
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10,100 |
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(3,100) |
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(30.7) |
% |
Alaska containers |
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18,000 |
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17,800 |
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200 |
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1.1 |
% |
China containers |
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37,400 |
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34,900 |
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2,500 |
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7.2 |
% |
Guam containers |
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4,500 |
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5,000 |
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(500) |
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(10.0) |
% |
Other containers (2) |
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4,300 |
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4,700 |
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(400) |
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(8.5) |
% |
| (1) | Approximate volume included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period. |
| (2) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue increased $102.4 million, or 16.0 percent, during the three months ended December 31, 2024, compared with the three months ended December 31, 2023. The increase was primarily due to significantly higher freight rates in China and higher volume in China.
On a year-over-year FEU basis, Hawaii container volume decreased 1.7 percent primarily due to lower general demand; Alaska volume increased 1.1 percent primarily due to higher northbound volume, partially offset by an additional sailing in the year ago period; China volume was 7.2 percent higher due to seasonally stronger freight demand; Guam volume decreased 10.0 percent primarily due to lower demand from retail and food and beverage segments; and Other containers volume decreased 8.5 percent.
Ocean Transportation operating income increased $71.0 million, or 106.9 percent, during the three months ended December 31, 2024, compared with the three months ended December 31, 2023. The increase was primarily due to significantly higher freight rates in China, the timing of fuel-related surcharge collections, and higher volume in China, partially offset by a lower contribution from SSAT and higher direct cargo expense (primarily in the China service) and general and administrative expenses.
The Company’s SSAT terminal joint venture investment incurred a loss of $9.5 million during the three months ended December 31, 2024, compared to income of $4.1 million during the three months ended December 31, 2023. The decrease was due to a $18.4 million impairment charge related to the write-down of a terminal operating lease asset, partially offset by higher year-over-year lift volume.
4
Ocean Transportation — Year ended December 31, 2024 compared with 2023
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Years Ended December 31, |
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(Dollars in millions) |
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2024 |
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2023 |
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Change |
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Ocean Transportation revenue |
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$ |
2,809.7 |
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$ |
2,477.0 |
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$ |
332.7 |
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13.4 |
% |
Operating costs and expenses |
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(2,308.8) |
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(2,182.2) |
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(126.6) |
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5.8 |
% |
Operating income |
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$ |
500.9 |
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$ |
294.8 |
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$ |
206.1 |
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69.9 |
% |
Operating income margin |
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17.8 |
% |
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11.9 |
% |
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Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) |
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Hawaii containers |
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140,700 |
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144,000 |
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(3,300) |
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(2.3) |
% |
Hawaii automobiles |
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30,400 |
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39,400 |
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(9,000) |
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(22.8) |
% |
Alaska containers |
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80,500 |
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80,000 |
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500 |
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0.6 |
% |
China containers |
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144,100 |
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140,700 |
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3,400 |
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2.4 |
% |
Guam containers |
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18,800 |
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20,100 |
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(1,300) |
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(6.5) |
% |
Other containers (2) |
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17,000 |
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17,500 |
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(500) |
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(2.9) |
% |
| (1) | Approximate volume included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period. |
| (2) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue increased $332.7 million, or 13.4 percent, during the year ended December 31, 2024, compared with the year ended December 31, 2023. The increase was primarily due to significantly higher freight rates in China, higher freight rates in the domestic tradelanes, and higher volume in China, partially offset by lower domestic tradelane volume.
On a year-over-year FEU basis, Hawaii container volume decreased 2.3 percent primarily due to lower general demand; Alaska volume increased 0.6 percent due to higher general demand, partially offset by one less northbound sailing; China volume increased 2.4 percent due to stronger seasonal volume in the fourth quarter 2024 and one additional sailing; Guam volume decreased 6.5 percent primarily due to lower general demand; and Other containers volume decreased 2.9 percent.
Ocean Transportation operating income increased $206.1 million, or 69.9 percent, during the year ended December 31, 2024, compared with the year ended December 31, 2023. The increase was primarily due to significantly higher freight rates in China, higher freight rates in the domestic tradelanes, and higher volume in China, partially offset by higher operating costs and general and administrative expenses.
The Company’s SSAT terminal joint venture investment incurred a loss of $1.0 million during the year ended December 31, 2024, compared to income of $2.2 million during the year ended December 31, 2023. The decrease was due to an impairment charge related to the write-down of a terminal operating lease asset in the fourth quarter 2024 of $18.4 million, partially offset by higher lift volume.
Logistics — Three months ended December 31, 2024 compared with 2023
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Three Months Ended December 31, |
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(Dollars in millions) |
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2024 |
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2023 |
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Change |
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Logistics revenue |
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$ |
148.2 |
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$ |
149.2 |
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$ |
(1.0) |
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(0.7) |
% |
Operating costs and expenses |
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(138.1) |
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(140.3) |
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2.2 |
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(1.6) |
% |
Operating income |
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$ |
10.1 |
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$ |
8.9 |
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$ |
1.2 |
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13.5 |
% |
Operating income margin |
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6.8 |
% |
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6.0 |
% |
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5
Logistics revenue decreased $1.0 million, or 0.7 percent, during the three months ended December 31, 2024, compared with the three months ended December 31, 2023. The decrease was primarily due to lower revenue in transportation brokerage, partially offset by higher revenue in supply chain management.
Logistics operating income increased $1.2 million, or 13.5 percent, during the three months ended December 31, 2024, compared with the three months ended December 31, 2023. The increase was primarily due to a higher contribution from supply chain management.
Logistics — Year ended December 31, 2024 compared with 2023
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Years Ended December 31, |
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(Dollars in millions) |
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2024 |
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2023 |
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Change |
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Logistics revenue |
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$ |
612.1 |
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$ |
617.6 |
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$ |
(5.5) |
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(0.9) |
% |
Operating costs and expenses |
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(561.7) |
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(569.6) |
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7.9 |
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(1.4) |
% |
Operating income |
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$ |
50.4 |
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$ |
48.0 |
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$ |
2.4 |
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5.0 |
% |
Operating income margin |
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8.2 |
% |
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7.8 |
% |
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Logistics revenue decreased $5.5 million, or 0.9 percent, during the year ended December 31, 2024, compared with the year ended December 31, 2023. The decrease was primarily due to lower revenue in transportation brokerage, partially offset by higher revenue in supply chain management.
Logistics operating income increased $2.4 million, or 5.0 percent, during the year ended December 31, 2024, compared with the year ended December 31, 2023. The increase was primarily due to a higher contribution from supply chain management.
Liquidity, Cash Flows and Capital Allocation
Matson’s Cash and Cash Equivalents increased by $132.8 million from $134.0 million at December 31, 2023 to $266.8 million at December 31, 2024. As of December 31, 2024, there was $642.6 million of cash and cash equivalents and investments in fixed-rate U.S. Treasuries in the Capital Construction Fund. Matson generated net cash from operating activities of $767.8 million during the year ended December 31, 2024, compared to $510.5 million during the year ended December 31, 2023. Capital expenditures (including capitalized vessel construction expenditures) totaled $310.1 million for the year ended December 31, 2024, compared with $248.4 million for the year ended December 31, 2023. Total debt decreased by $39.7 million during the year to $400.9 million as of December 31, 2024, of which $361.2 million was classified as long-term debt.1 As of December 31, 2024, Matson had available borrowings under its revolving credit facility of $643.9 million.
During the fourth quarter 2024, Matson repurchased approximately 0.2 million shares for a total cost of $31.8 million. As of December 31, 2024, there were approximately 0.8 million shares remaining in the Company’s share repurchase program. For the full year 2024, Matson repurchased approximately 1.6 million shares for a total cost of $201.0 million. Matson’s Board of Directors also declared a cash dividend of $0.34 per share payable on March 6, 2025 to all shareholders of record as of the close of business on February 6, 2025.
Teleconference and Webcast
A conference call is scheduled on February 25, 2025 at 4:30 p.m. ET when Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Executive Vice President and Chief Financial Officer, will discuss Matson’s fourth quarter and full year results.
Date of Conference Call: |
Tuesday, February 25, 2025 |
Scheduled Time: |
4:30 p.m. ET / 1:30 p.m. PT / 11:30 a.m. HT |
The conference call will be broadcast live along with an additional slide presentation on the Company’s website at www.matson.com, under Investors.
1 Total debt is presented before any reduction for deferred loan fees as required by GAAP.
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Participants may register for the conference call at:
https://register.vevent.com/register/BI0b3e3bfd4fb54811a8a455a99c38160a
Registered participants will receive the conference call dial-in number and a unique PIN code to access the live event. While not required, it is recommended you join 10 minutes prior to the event starting time. A replay of the conference call will be available approximately two hours after the event by accessing the webcast link at www.matson.com, under Investors.
About the Company
Founded in 1882, Matson (NYSE: MATX) is a leading provider of ocean transportation and logistics services. Matson provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, and to other island economies in Micronesia. Matson also operates premium, expedited services from China to Long Beach, California, provides service to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Alaska to Asia. The Company's fleet of owned and chartered vessels includes containerships, combination container and roll-on/roll-off ships and custom-designed barges. Matson Logistics, established in 1987, extends the geographic reach of Matson’s transportation network throughout North America and Asia. Its integrated, asset-light logistics services include rail intermodal, highway brokerage, warehousing, freight consolidation, supply chain management, and freight forwarding to Alaska. Additional information about the Company is available at www.matson.com.
GAAP to Non-GAAP Reconciliation
This press release, the Form 8-K and the information to be discussed in the conference call include non-GAAP measures. While 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 service debt and to make capital expenditures, and to understand period-over-period operating results separate and apart from items that may, or could, have a disproportional positive or negative impact on results in any particular period. These non-GAAP measures include, but are not limited to, Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”).
Forward-Looking Statements
Statements in this news release that are not historical facts are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation those statements regarding outlook; operating income; depreciation and amortization, including dry-docking amortization; interest income; interest expense; other income (expense); tax rate; capital and vessel dry-docking expenditures; volume, freight rates and demand; trade flow normalization in the Red Sea; geopolitical factors; tariffs and trade; trajectory of the U.S. economy; business conditions for transportation brokerage; contributions from supply chain management; economic growth and drivers in Hawaii, Alaska and Guam; population growth; discretionary income; interest rates; tourism levels; unemployment rates; construction activity; jobs growth; inflation; oil and gas exploration and production activity; contribution from SSAT; impairment charge at SSAT; vessel transit times; refleeting initiatives; timing and amount of milestone payments and related costs; delivery dates for new vessels; and the timing, manner and volume of repurchases of common stock pursuant to the repurchase program.
7
These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement, including but not limited to risks and uncertainties relating to repeal, substantial amendment or waiver of the Jones Act or changes in its application, or the Company were determined not to be a United States citizen under the Jones Act; changes in macroeconomic conditions, geopolitical developments, or governmental policies; our ability to offer a differentiated service in China for which customers are willing to pay a significant premium; new or increased competition; our relationship with customers and vendors and changes in related agreements; fuel prices, our ability to collect fuel-related surcharges and/or the cost or limited availability of required fuels; evolving regulations and stakeholder expectations related to sustainability matters; timely or successful completion of fleet upgrade initiatives; the Company’s vessel construction agreements with Philly Shipyard; the occurrence of weather, natural disasters, maritime accidents, spill events and other physical and operating risks; transitional and other risks arising from climate change; actual or threatened health epidemics, outbreaks of disease, pandemics or other major health crises; significant operating agreements and leases that may not be renewed/replaced on favorable or acceptable terms; any unanticipated dry-docking or repair costs; joint venture relationships; conducting business in foreign shipping markets, including the imposition of tariffs or a change in international trade policies; any delays or cost overruns related to the modernization of terminals; war, actual or threatened terrorist attacks, efforts to combat terrorism and other acts of violence; consummating and integrating acquisitions; work stoppages or other labor disruptions caused by our unionized workers and other workers or their unions in related industries; loss of key personnel or failure to adequately manage human capital; the use of our information technology and communication systems and cybersecurity attacks; changes in our credit profile, disruptions of the credit markets, changes in interest rates and our future financial performance; our ability to access the debt capital markets; continuation of the Title XI and CCF programs; costs to comply with and liability related to numerous safety, environmental, and other laws and regulations; and disputes, legal and other proceedings and government inquiries or investigations. These forward-looking statements are not guarantees of future performance. This release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023 and our other filings with the SEC through the date of this release, which identify important factors that could affect the forward-looking statements in this release. We do not undertake any obligation to update our forward-looking statements.
8
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
|
|
Three Months Ended |
|
Years Ended |
||||||||
|
|
December 31, |
|
December 31, |
||||||||
(In millions, except per share amounts) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Operating Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Ocean Transportation |
|
$ |
742.1 |
|
$ |
639.7 |
|
$ |
2,809.7 |
|
$ |
2,477.0 |
Logistics |
|
|
148.2 |
|
|
149.2 |
|
|
612.1 |
|
|
617.6 |
Total Operating Revenue |
|
|
890.3 |
|
|
788.9 |
|
|
3,421.8 |
|
|
3,094.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
|
(652.5) |
|
|
(644.4) |
|
|
(2,565.9) |
|
|
(2,470.7) |
(Loss) Income from SSAT |
|
|
(9.5) |
|
|
4.1 |
|
|
(1.0) |
|
|
2.2 |
Selling, general and administrative |
|
|
(80.8) |
|
|
(73.3) |
|
|
(303.6) |
|
|
(283.3) |
Total Costs and Expenses |
|
|
(742.8) |
|
|
(713.6) |
|
|
(2,870.5) |
|
|
(2,751.8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
147.5 |
|
|
75.3 |
|
|
551.3 |
|
|
342.8 |
Interest income |
|
|
10.3 |
|
|
9.8 |
|
|
48.3 |
|
|
36.0 |
Interest expense |
|
|
(1.4) |
|
|
(2.4) |
|
|
(7.5) |
|
|
(12.2) |
Other income (expense), net |
|
|
1.8 |
|
|
1.6 |
|
|
7.3 |
|
|
6.4 |
Income before Taxes |
|
|
158.2 |
|
|
84.3 |
|
|
599.4 |
|
|
373.0 |
Income taxes |
|
|
(30.2) |
|
|
(21.9) |
|
|
(123.0) |
|
|
(75.9) |
Net Income |
|
$ |
128.0 |
|
$ |
62.4 |
|
$ |
476.4 |
|
$ |
297.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share |
|
$ |
3.87 |
|
$ |
1.80 |
|
$ |
14.14 |
|
$ |
8.42 |
Diluted Earnings Per Share |
|
$ |
3.80 |
|
$ |
1.78 |
|
$ |
13.93 |
|
$ |
8.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
33.1 |
|
|
34.7 |
|
|
33.7 |
|
|
35.3 |
Diluted |
|
|
33.7 |
|
|
35.1 |
|
|
34.2 |
|
|
35.7 |
9
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
December 31, |
|
December 31, |
||
(In millions) |
|
2024 |
|
2023 |
||
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
266.8 |
|
$ |
134.0 |
Other current assets |
|
|
342.8 |
|
|
468.3 |
Total current assets |
|
|
609.6 |
|
|
602.3 |
Long-term Assets: |
|
|
|
|
|
|
Investment in SSAT |
|
|
84.1 |
|
|
85.5 |
Property and equipment, net |
|
|
2,260.9 |
|
|
2,089.9 |
Goodwill |
|
|
327.8 |
|
|
327.8 |
Intangible assets, net |
|
|
159.4 |
|
|
176.4 |
Capital Construction Fund |
|
|
642.6 |
|
|
599.4 |
Other long-term assets |
|
|
511.0 |
|
|
413.3 |
Total long-term assets |
|
|
3,985.8 |
|
|
3,692.3 |
Total assets |
|
$ |
4,595.4 |
|
$ |
4,294.6 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Current portion of debt |
|
$ |
39.7 |
|
$ |
39.7 |
Other current liabilities |
|
|
520.7 |
|
|
522.6 |
Total current liabilities |
|
|
560.4 |
|
|
562.3 |
Long-term Liabilities: |
|
|
|
|
|
|
Long-term debt, net of deferred loan fees |
|
|
350.8 |
|
|
389.3 |
Deferred income taxes |
|
|
693.4 |
|
|
669.3 |
Other long-term liabilities |
|
|
338.8 |
|
|
273.0 |
Total long-term liabilities |
|
|
1,383.0 |
|
|
1,331.6 |
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
2,652.0 |
|
|
2,400.7 |
Total liabilities and shareholders’ equity |
|
$ |
4,595.4 |
|
$ |
4,294.6 |
10
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Years Ended December 31, |
|
|||||||
(In millions) |
|
2024 |
|
2023 |
|
2022 |
|
|||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
476.4 |
|
$ |
297.1 |
|
$ |
1,063.9 |
|
Reconciling adjustments: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
153.1 |
|
|
142.2 |
|
|
139.2 |
|
Amortization of operating lease right of use assets |
|
|
133.7 |
|
|
142.0 |
|
|
153.0 |
|
Deferred income taxes |
|
|
20.9 |
|
|
19.6 |
|
|
90.2 |
|
(Gain) Loss on disposal of property and equipment |
|
|
(2.3) |
|
|
0.6 |
|
|
(1.5) |
|
Share-based compensation expense |
|
|
26.5 |
|
|
23.8 |
|
|
18.3 |
|
Loss (Income) from SSAT |
|
|
1.0 |
|
|
(2.2) |
|
|
(83.1) |
|
Distributions from SSAT |
|
|
14.0 |
|
|
— |
|
|
47.3 |
|
Other |
|
|
(10.3) |
|
|
(0.5) |
|
|
2.1 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
9.8 |
|
|
(10.9) |
|
|
74.6 |
|
Deferred dry-docking payments |
|
|
(30.2) |
|
|
(24.1) |
|
|
(25.7) |
|
Deferred dry-docking amortization |
|
|
27.2 |
|
|
25.3 |
|
|
24.9 |
|
Prepaid expenses and other assets |
|
|
94.8 |
|
|
33.5 |
|
|
(45.2) |
|
Accounts payable, accruals and other liabilities |
|
|
(5.6) |
|
|
10.9 |
|
|
(31.7) |
|
Operating lease assets and liabilities, net |
|
|
(139.5) |
|
|
(144.8) |
|
|
(154.1) |
|
Other long-term liabilities |
|
|
(1.7) |
|
|
(2.0) |
|
|
(0.3) |
|
Net cash provided by operating activities |
|
|
767.8 |
|
|
510.5 |
|
|
1,271.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
|
|
|
Capitalized vessel construction expenditures |
|
|
(95.6) |
|
|
(52.9) |
|
|
(62.4) |
|
Capital expenditures (excluding vessel construction expenditures) |
|
|
(214.5) |
|
|
(195.5) |
|
|
(146.9) |
|
Proceeds from disposal of property and equipment, net |
|
|
5.9 |
|
|
1.2 |
|
|
1.2 |
|
Payments for asset acquisitions |
|
|
(0.8) |
|
|
(12.4) |
|
|
(3.0) |
|
Cash and interest deposits into Capital Construction Fund |
|
|
(120.7) |
|
|
(128.5) |
|
|
(582.8) |
|
Withdrawals from Capital Construction Fund |
|
|
89.6 |
|
|
49.9 |
|
|
64.6 |
|
Net cash used in investing activities |
|
|
(336.1) |
|
|
(338.2) |
|
|
(729.3) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
|
|
Repayments of debt |
|
|
(39.7) |
|
|
(76.9) |
|
|
(111.5) |
|
Dividends paid |
|
|
(44.8) |
|
|
(45.0) |
|
|
(48.0) |
|
Repurchase of Matson common stock |
|
|
(199.1) |
|
|
(155.2) |
|
|
(397.0) |
|
Tax withholding related to net share settlements of restricted stock units |
|
|
(17.6) |
|
|
(12.6) |
|
|
(20.1) |
|
Net cash used in financing activities |
|
|
(301.2) |
|
|
(289.7) |
|
|
(576.6) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash |
|
|
130.5 |
|
|
(117.4) |
|
|
(34.0) |
|
Cash, Cash Equivalents and Restricted Cash, Beginning of the Year |
|
|
136.3 |
|
|
253.7 |
|
|
287.7 |
|
Cash, Cash Equivalents and Restricted Cash, End of the Year |
|
$ |
266.8 |
|
$ |
136.3 |
|
$ |
253.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash, Cash Equivalents, and Restricted Cash, at End of the Year: |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
266.8 |
|
$ |
134.0 |
|
$ |
249.8 |
|
Restricted Cash |
|
|
— |
|
|
2.3 |
|
|
3.9 |
|
Total Cash, Cash Equivalents and Restricted Cash, End of the Year |
|
$ |
266.8 |
|
$ |
136.3 |
|
$ |
253.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
|
|
|
Interest paid, net of capitalized interest |
|
$ |
5.9 |
|
$ |
11.1 |
|
$ |
16.2 |
|
Income tax paid, net of income tax refunds |
|
$ |
(26.5) |
|
$ |
7.5 |
|
$ |
215.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash Information: |
|
|
|
|
|
|
|
|
|
|
Capital expenditures included in accounts payable, accruals and other liabilities |
|
$ |
7.9 |
|
$ |
10.8 |
|
$ |
5.5 |
|
Non-cash payments for intangible asset acquisitions |
|
$ |
— |
|
$ |
2.7 |
|
$ |
2.2 |
|
11
MATSON, INC. AND SUBSIDIARIES
Net Income to EBITDA Reconciliations
(Unaudited)
|
|
|
Three Months Ended |
|||||||
|
|
|
December 31, |
|||||||
(In millions) |
|
|
2024 |
|
2023 |
|
Change |
|||
Net Income |
|
|
$ |
128.0 |
|
$ |
62.4 |
|
$ |
65.6 |
Subtract: |
Interest income |
|
|
(10.3) |
|
|
(9.8) |
|
|
(0.5) |
Add: |
Interest expense |
|
|
1.4 |
|
|
2.4 |
|
|
(1.0) |
Add: |
Income taxes |
|
|
30.2 |
|
|
21.9 |
|
|
8.3 |
Add: |
Depreciation and amortization |
|
|
39.7 |
|
|
35.8 |
|
|
3.9 |
Add: |
Dry-dock amortization |
|
|
6.2 |
|
|
6.7 |
|
|
(0.5) |
EBITDA (1) |
|
|
$ |
195.2 |
|
$ |
119.4 |
|
$ |
75.8 |
|
|
|
Years Ended |
|||||||
|
|
|
December 31, |
|||||||
(In millions) |
|
|
2024 |
|
2023 |
|
Change |
|||
Net Income |
|
|
$ |
476.4 |
|
$ |
297.1 |
|
$ |
179.3 |
Subtract: |
Interest income |
|
|
(48.3) |
|
|
(36.0) |
|
|
(12.3) |
Add: |
Interest expense |
|
|
7.5 |
|
|
12.2 |
|
|
(4.7) |
Add: |
Income taxes |
|
|
123.0 |
|
|
75.9 |
|
|
47.1 |
Add: |
Depreciation and amortization |
|
|
153.1 |
|
|
142.2 |
|
|
10.9 |
Add: |
Dry-dock amortization |
|
|
27.2 |
|
|
25.3 |
|
|
1.9 |
EBITDA (1) |
|
|
$ |
738.9 |
|
$ |
516.7 |
|
$ |
222.2 |
| (1) | EBITDA is defined as earnings before interest, income taxes, depreciation and amortization (including deferred dry-docking amortization). EBITDA should not be considered as an alternative to net income (as determined in accordance with GAAP), as an indicator of our operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. Our calculation of EBITDA may not be comparable to EBITDA as calculated by other companies, nor is this calculation identical to the EBITDA used by our lenders to determine financial covenant compliance. |
12
|
1 Fourth Quarter 2024 Earnings Conference Call Fourth Quarter 2024 Earnings Conference Call February 25, 2025 |
|
2 Fourth Quarter 2024 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 February 25, 2025. We believe that our expectations and assumptions are reasonable. Actual results may differ materially, due to risks and uncertainties, such as those described on pages 13-25 of our Form 10-K filed on February 23, 2024 and other subsequent filings by Matson with the SEC. Statements made during this presentation are not guarantees of future performance. We do not undertake any obligation to update our forward-looking statements. |
|
3 Fourth Quarter 2024 Earnings Conference Call Opening Remarks – Recap of 2024 • Very strong 4Q24 that exceeded our expectations, capping off a strong year • 4Q24 Results – Our China service was the primary driver of the YoY increase in Ocean Transportation operating income and consolidated operating income • Seasonally stronger freight demand with significantly higher YoY freight rates for CLX and MAX services – In Logistics, operating income increased YoY primarily due to a higher contribution from supply chain management – Impairment charge at SSAT joint venture related to the write-down of a terminal operating lease asset – $0.42 impact to diluted EPS in 4Q24 • FY2024 Results – Consolidated operating income increased YoY primarily driven by higher freight rates in our China service, which started in the middle of 2Q24 and remained through year end |
|
4 Fourth Quarter 2024 Earnings Conference Call Hawaii Service Fourth Quarter 2024 Performance • Container volume decreased 1.7% YoY due to lower general demand Container Volume (FEU Basis) 25,000 27,000 29,000 31,000 33,000 35,000 37,000 39,000 41,000 Q1 Q2 Q3 Q4 2023 2024 (1.7)% Full Year 2025 Outlook • Expect volume in 2025 to be comparable to the level in 2024, reflecting modest economic growth and stable market share Full Year 2024 Performance • Container volume decreased 2.3% YoY primarily due to lower general demand |
|
5 Fourth Quarter 2024 Earnings Conference Call Hawaii Service – Current Business Trends UHERO Projections (3) (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2024-12-state.xls (2) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2024-12-maui.xls (3) Source: https://uhero.hawaii.edu/wp-content/uploads/2024/12/UHEROForecastForTheStateOfHawaii24Q4.pdf 2024P 2025P 2026P Real GDP 0.3% 2.9% 2.5% Construction Jobs Growth 5.6% 3.1% 0.3% Population Growth (0.2)% 0.0% 0.1% Unemployment Rate 3.0% 2.8% 2.8% Visitor Arrivals (‘000s) % change 9,597.7 (0.6)% 9,862.5 2.8% 10,099.5 2.4% Select Hawaii Economic Indicators • According to UHERO, the Hawaii economy is projected to grow slowly in 2025 – Supported by modest gains in tourism, a low unemployment rate, and increased construction activity – Partially restrained by continued challenges in population growth and lower discretionary income from high inflation and interest rates Commentary 0 100 200 300 400 500 600 700 800 900 1,000 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Unemployment Rate Visitor Arrivals (‘000s) Unemployment Rate and Visitor Arrivals by Air Hawaii Unemployment Rate (not seasonally adjusted) (1) Hawaii Visitor Arrivals by Air (1) Maui Visitor Arrivals by Air (2) |
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6 Fourth Quarter 2024 Earnings Conference Call China Service Fourth Quarter 2024 Performance Container Volume (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 Q1 Q2 Q3 Q4 2023 2024 • Container volume increased 7.2% YoY due to seasonally stronger freight demand • Significantly higher YoY freight rates for both the CLX and MAX • Elevated freight rates were supported by a resilient U.S. economy and a stable consumer demand environment coupled with tighter supply chain conditions 7.2% • Container volume increased 2.4% YoY – Seasonally stronger freight demand in 4Q – One additional sailing compared to 2023 Full Year 2024 Performance |
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7 Fourth Quarter 2024 Earnings Conference Call China Service – Current Business Trends • Stronger seasonal demand in 4Q24 – Some customers advancing freight ahead of a potential ILA disruption and proposed tariff increases – Also saw some customers in late December moving freight ahead of the earlier Lunar New Year this year • Experienced a traditional low demand environment during the post-Lunar New Year period in 1Q25 – Didn’t sail the MAX for three weeks and carried all freight on CLX – This is the same schedule we had for 2024 • Expect the post-Lunar New Year period to show a traditional ramp up of demand for the remainder of the first quarter, but volumes may be a bit softer than normal for the first few weeks due to the advancing of some cargo late in the fourth quarter |
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8 Fourth Quarter 2024 Earnings Conference Call China Service – Outlook • Where our China freight rates ultimately settle out in 2025 will depend on a number of macro factors including geopolitical conditions, supply chain activity, and the trajectory of the U.S. economy – Too early to tell how Red Sea, tariffs/trade, U.S. economy and other factors may play out • 1Q25 and FY 2025 Outlook: – We expect elevated freight rates in our China service to continue into 1Q25 – Beyond 1Q25, we expect freight rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy • Assuming trade conditions in the Red Sea normalize by middle of year, we expect freight rates to moderate in 2H25 • However, if the Red Sea remains disrupted through year end, we expect freight rates to remain elevated throughout 2025 |
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9 Fourth Quarter 2024 Earnings Conference Call Guam Service Fourth Quarter 2024 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 Q1 Q2 Q3 Q4 2023 2024 • Container volume decreased 10.0% YoY – Primarily due to lower demand from retail and food and beverage segments (10.0)% Full Year 2025 Outlook • Expect Guam’s economy to grow modestly supported by low unemployment and an increase in construction activity • Expect volume to be modestly higher than the level achieved last year Note: an additional sailing in 2Q23. Full Year 2024 Performance • Container volume decreased 6.5% YoY – Primarily due to lower general demand |
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10 Fourth Quarter 2024 Earnings Conference Call Alaska Service Fourth Quarter 2024 Performance • Container volume increased 1.1% YoY primarily due to higher northbound volume, partially offset by an additional sailing in the year ago period Container Volume (FEU Basis) 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Q1 Q2 Q3 Q4 2023 2024 Full Year 2025 Outlook • Expect volume to be approximate the level achieved last year Note: an additional northbound sailing in 1Q23. 1.1% Full Year 2024 Performance • Container volume increased 0.6% YoY due to higher general demand, partially offset by one less northbound sailing |
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11 Fourth Quarter 2024 Earnings Conference Call Alaska Service – Current Business Trends • Alaska economy continues to show good growth across key indicators despite flattish growth in population – Low unemployment rate – Job count returned to pre-pandemic levels • In the near-term, we expect the Alaska economy to grow – Low unemployment rate – Jobs growth – Continued oil and gas exploration and production activity -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025P YoY Growth in Employment Alaska Employment Growth(1)(2) (1) Source: https://live.laborstats.alaska.gov/sites/default/files/trends-mag-file/jan25.pdf (2) Source: https://live.laborstats.alaska.gov/labforce/000000/01/ces.html (3) Source: https://live.laborstats.alaska.gov/pop/estimates/data/ComponentsOfChangeAK.xlsx Alaska Population Growth and Net Migration(3) (10,000) (5,000) 0 5,000 10,000 15,000 20,000 25,000 -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net Migration YoY Growth in Population Population Growth Net Migration |
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12 Fourth Quarter 2024 Earnings Conference Call SSAT Joint Venture Fourth Quarter 2024 Performance Equity in Income of Joint Venture ($ 12.0) ($ 10.0) ($ 8.0) ($ 6.0) ($ 4.0) ($ 2.0) $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 Q1 Q2 Q3 Q4 $ in millions 2023 2024 • Terminal joint venture investment incurred a loss of $9.5 million; YoY decrease of $13.6 million – $18.4 million impairment charge, partially offset by higher YoY lift volume – The impairment charge impacted net income and diluted EPS by $14.0 million and $0.42 per share, respectively Full Year 2025 Outlook • Expect contribution to approximate the level achieved in 2024, without taking into account the 4Q24 impairment charge Full Year 2024 Performance • Terminal joint venture investment incurred a loss of $1.0 million, inclusive of the impairment charge; YoY decrease of $3.2 million |
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13 Fourth Quarter 2024 Earnings Conference Call Matson Logistics Fourth Quarter 2024 Performance Operating Income $ 0.0 $ 2.0 $ 4.0 $ 6.0 $ 8.0 $ 10.0 $ 12.0 $ 14.0 $ 16.0 $ 18.0 Q1 Q2 Q3 Q4 $ in millions 2023 2024 • Operating income of $10.1 million; YoY increase of $1.2 million – Higher contribution from supply chain management Full Year 2024 Performance • Operating income of $50.4 million; YOY increase of $2.4 million – Higher contribution from supply chain management Full Year 2025 Outlook • Expect challenging conditions for transportation brokerage for most of the year and a lower contribution from supply chain management • Expect operating income to be modestly lower than the level achieved last year |
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14 Fourth Quarter 2024 Earnings Conference Call Financial Results – Summary Income Statement See the Appendix for a reconciliation of GAAP to non-GAAP Financial Metrics. (1) 4Q24 total operating income, net income and diluted EPS includes an impairment charge related to the write-down of a terminal asset at SSAT, which impacted 4Q24 total operating income, net income and diluted EPS by $18.4 million, $14.0 million and $0.42 per share, respectively. For the full year, the impairment charge impacted total operating income, net income and diluted EPS by $18.4 million, $14.0 million and $0.41 per share, respectively. Year-to-Date Fourth Quarter YTD Ended 12/31 Δ Quarter Ended 12/31 Δ ($ in millions, except per share data) 2024 2023 $ % 2024 2023 $ % Revenue Ocean Transportation $ 2,809.7 $ 2,477.0 $ 332.7 13.4% $ 742.1 $ 639.7 $ 102.4 16.0% Logistics 612.1 617.6 (5.5) (0.9)% 148.2 149.2 (1.0) (0.7)% Total Revenue $ 3,421.8 $ 3,094.6 $ 327.2 10.6% $ 890.3 $ 788.9 $ 101.4 12.9% Operating Income Ocean Transportation (1) $ 500.9 $ 294.8 $ 206.1 69.9% $ 137.4 $ 66.4 $ 71.0 106.9% Logistics 50.4 48.0 2.4 5.0% 10.1 8.9 1.2 13.5% Total Operating Income (1) $ 551.3 $ 342.8 $ 208.5 60.8% $ 147.5 $ 75.3 $ 72.2 95.9% Interest income 48.3 36.0 12.3 34.2% 10.3 9.8 0.5 5.1% Interest expense (7.5) (12.2) 4.7 (38.5)% (1.4) (2.4) 1.0 (41.7)% Other income (expense), net 7.3 6.4 0.9 14.1% 1.8 1.6 0.2 12.5% Income taxes (123.0) (75.9) (47.1) 62.1% (30.2) (21.9) (8.3) 37.9% Net Income (1) $ 476.4 $ 297.1 $ 179.3 60.4% $ 128.0 $ 62.4 $ 65.6 105.1% 34.2 35.7 (1.5) (4.2)% 33.7 35.1 (1.4) (4.0)% GAAP EPS, diluted (1) $ 13.93 $ 8.32 $ 5.61 67.4% $ 3.80 $ 1.78 $ 2.02 113.5% $ 180.3 $ 167.5 $ 12.8 7.6% $ 45.9 $ 42.5 $ 3.4 8.0% EBITDA $ 738.9 $ 516.7 $ 222.2 43.0% $ 195.2 $ 119.4 $ 75.8 63.5% Depreciation and Amortization (incl. dry-dock amortization) Weighted Average Number of Shares Outstanding (diluted) |
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15 Fourth Quarter 2024 Earnings Conference Call Cash Generation and Uses of Cash (1) Includes capitalized interest and owner’s items. (2) Includes cash deposits into the Capital Construction Fund (CCF) and interest income on cash deposits and fixed-income securities in the CCF, net of withdrawals for milestone payments. $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 Cash Flow from Operations Paydown of Borrowings, net Maint. Capex New Vessel Capex (1) Capital Construction Fund (2) Dividends Share Repurchase Other Net change in cash $ in millions Last Twelve Months Ended December 31, 2024 $767.8 ($39.7) ($214.5) ($31.1) ($95.6) ($44.8) ($199.1) ($12.5) $130.5 |
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16 Fourth Quarter 2024 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $400.9 million(1) – Reduced by $39.7 million in 2024 (1) Total Debt is presented before any reduction for deferred loan fees as required by GAAP. Debt Levels Share Repurchase • 4Q24: ~0.2 million shares repurchased for total cost of $31.8 million • FY2024: ~1.6 million shares repurchased for a total cost of $199.1 million ($ in millions) ASSETS Cash and cash equivalents $ 266.8 $ 134.0 Other current assets 342.8 468.3 Total current assets 609.6 602.3 Investment in SSAT 84.1 85.5 Property and equipment, net 2,260.9 2,089.9 Intangible assets, net 159.4 176.4 Capital Construction Fund (CCF) 642.6 599.4 Goodwill 327.8 327.8 Other long-term assets 511.0 413.3 Total assets $ 4,595.4 $ 4,294.6 LIABILITIES AND SHAREHOLDERS’ EQUITY Current portion of debt $ 39.7 $ 39.7 Other current liabilities 520.7 522.6 Total current liabilities 560.4 562.3 Long-term debt, net of deferred loan fees 350.8 389.3 Other long-term liabilities 1,032.2 942.3 Total long-term liabilities 1,383.0 1,331.6 Total shareholders’ equity 2,652.0 2,400.7 Total liabilities and shareholders’ equity $ 4,595.4 $ 4,294.6 December 31, December 31, 2024 2023 |
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17 Fourth Quarter 2024 Earnings Conference Call Review of 2024 Capital Expenditures FY 2024 Comments Capitalized vessel construction expenditures $95.6 million • Includes $6.0 million of capitalized interest and other costs Maintenance and other capital expenditures $214.5 million • $90.5 million in capex for LNG installations on Daniel K. Inouye, Kaimana Hila and reengining of Manukai • $28.0 million in new equipment capex to support network requirements and growth • $14.7 million in early lease buyouts of equipment • $81.3 million in maintenance and other capex Total capital expenditures $310.1 million |
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18 Fourth Quarter 2024 Earnings Conference Call Capital Expenditures Update ($ in millions) FY 2025 FY 2026 FY 2027 Comments Expected New vessel construction milestone payments and related costs $305 $350 $220 • Includes owner’s items and capitalized interest expense Expected Maintenance and other capital expenditures $120 – $140 ~$100 ~$100 • 2025 capex includes ~$20 million in equipment lease buyouts Total $425 – $445 ~$450 ~$320 • Recently notified by Hanwha Philly Shipyard that our new build program is facing a delay of approximately 4 months – Vessel deliveries expected in 1Q27, 3Q27 and 2Q28 • In 1Q25, we expect to pay approximately $65 million in milestone payments with corporate cash • Uncertain effects of U.S. tariffs on steel imports – Have completed all steel purchases for vessel #1 and approximately 30% for vessel #2 – Steel purchases are a relatively small percentage of the overall $1 billion project cost Expected 2025 New Vessel Construction Milestone Payments by Quarter ($ in millions) 1Q25 ~$65 2Q25 ~$36 3Q25 ~$71 4Q25 ~$118 Total 2025 ~$290 |
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19 Fourth Quarter 2024 Earnings Conference Call 2025 Outlook FY 2025 Outlook Items First Quarter Full Year (Normalization of Trade Flow in Red Sea by Middle of 2025)(1) Full Year (No Normalization of Trade Flow in Red Sea in 2025)(1) Operating Income: Ocean Transportation To be meaningfully higher than the $27.6 million achieved in the 1Q24 To be moderately lower than the $500.9 million achieved in 2024 To approach the $500.9 million achieved in 2024 Logistics To be modestly lower than the $9.3 million achieved in 1Q24 To be modestly lower than the $50.4 million achieved in 2024 To be modestly lower than the $50.4 million achieved in 2024 Consolidated To be meaningfully higher than the $36.9 million achieved in 1Q24 To be moderately lower than the $551.3 million achieved in 2024 To approach the $551.3 million achieved in 2024 Depreciation and Amortization Approximately $200 million, including approximately $26 million in dry-dock amortization Interest Income Approximately $31 million Interest Expense (excluding capitalized interest) Approximately $7 million Other Income/(Expense) Approximately $9 million GAAP Effective Tax Rate Approximately 22% Dry-docking Payments Approximately $40 million Note: 2024 will be the last year we report the volume of automobiles shipped to Hawaii as this metric is not a material driver of the financial performance of our Ocean Transportation segment. (1) Assumes there are no significant changes from today with respect to other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. |
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20 Fourth Quarter 2024 Earnings Conference Call Closing Thoughts • Our China service shines during periods of uncertainty – Speed, reliability, and service – our core differentiators • Today, our China service appeals to an even broader set of customers than when we first started moving freight in the Transpacific tradelane nearly 20 years ago – As supply chains have become more complex, shippers have placed a greater emphasis on speed-to-market and schedule integrity • Our CLX and MAX are the two fastest services in the Transpacific tradelane, which are complemented with unique destination services for a seamless customer experience • We remain focused on what we can control – vessel schedule integrity, reliability of our operations, and delivering a high-quality service for our customers • We remain committed to look for ways to grow, either organically or periodically through acquisition • We expect to continue to return capital to shareholders through dividends and our share repurchase program – Our share repurchase program remains a core tenant of our capital allocation strategy, and we continue to expect to be steady buyers of our shares |
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21 Fourth Quarter 2024 Earnings Conference Call Appendix |
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22 Fourth Quarter 2024 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, help investors understand our ability to incur and service debt and to make capital expenditures, and to understand period-over-period operating results separate and apart from items that may, or could, have a disproportional positive or negative impact on results in any particular period. These non-GAAP measures include, but are not limited to, Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”). |
