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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): May 5, 2025 (May 5, 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 May 5, 2025, Matson, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the quarter ended March 31, 2025. 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 |
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99.2 |
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104 |
Cover Page Interactive Data File (formatted in Inline XBRL). |
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: May 5, 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 FIRST QUARTER 2025 RESULTS
| ● | 1Q25 EPS of $2.18 versus $1.04 in 1Q24 |
| ● | 1Q25 Net Income of $72.3 million versus $36.1 million in 1Q24 |
| ● | 1Q25 Consolidated Operating income of $82.1 million versus $36.9 million in 1Q24 |
| ● | 1Q25 EBITDA of $131.7 million versus $82.8 million in 1Q24 |
| ● | Repurchased approximately 0.5 million shares in 1Q25 |
| ● | Updates full year outlook |
HONOLULU, Hawaii (May 5, 2025) – Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX), a leading U.S. carrier in the Pacific, today reported net income of $72.3 million, or $2.18 per diluted share, for the quarter ended March 31, 2025. Net income for the quarter ended March 31, 2024 was $36.1 million, or $1.04 per diluted share. Consolidated revenue for the first quarter 2025 was $782.0 million compared with $722.1 million for the first quarter 2024.
Matt Cox, Matson’s Chairman and Chief Executive Officer, commented, “Our first quarter financial performance was as expected with significantly higher year-over-year consolidated operating income. The year-over-year increase was primarily driven by our China service, which benefitted from the carryover of elevated freight rates from the fourth quarter of 2024 combined with healthy freight demand following a traditional post-Lunar New Year period. For our domestic tradelanes, we saw higher year-over-year volume in Hawaii and Alaska and lower year-over-year volume in Guam. In Logistics, our operating income was lower year-over-year primarily due to a lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management.”
Mr. Cox added, “Currently, there is significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors. Given the pronounced market decline in demand in the Transpacific in April, coupled with limited visibility to our container demand, we expect Ocean Transportation operating income in the second quarter 2025 to be meaningfully lower than the level achieved in the second quarter 2024. For Logistics, in the second quarter 2025, we expect operating income to be lower than the level achieved in the same period last year. For the full year, we expect Ocean Transportation operating income to be lower than the level achieved in the prior year. The amount of the lower earnings will be dependent on the impact and timing of the global trade and macroeconomic uncertainties described above. We also expect Logistics full year operating income to be lower than the level achieved in the prior year due to a challenging environment for all our business lines.”
“Despite the current uncertainties, we remain confident in our long-term prospects due to the diversification of our businesses and cash flows, our focus on serving niche markets where we are an integral part of the supply chain, and the strength of our balance sheet. We remain committed to maintaining the reliability of our vessel operations and providing high-quality service to our customers and the communities that rely on us. Matson’s businesses have historically performed well during periods of supply chain disruption given our competitive advantages and the reliability of our services.”
1
First Quarter 2025 Discussion and Outlook for 2025
Ocean Transportation: The Company’s container volume in the Hawaii service in the first quarter 2025 was 3.2 percent higher year-over-year. The increase was primarily due to the dry-docking of a competitor’s vessel. The Hawaii economy remains stable with low unemployment, strong construction activity, and stable tourism, offset by challenging population growth and 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 first quarter 2025 compared to the year ago period. The year-over-year increase benefitted from the carryover of elevated freight rates from the fourth quarter of 2024. Container volume in the first quarter 2025 decreased 1.4 percent year-over-year. Currently, there is significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors. Since the tariffs were implemented in April, the Company’s container volume has declined approximately 30 percent year-over-year. Given the pronounced market decline in demand in the Transpacific in April, coupled with limited visibility to the Company’s container demand, the Company expects container volume and average freight rates in the second quarter to be lower year-over-year. For full year 2025, the Company also expects container volume and average freight rates to be lower year-over-year.
In Guam, the Company’s container volume in the first quarter 2025 decreased 14.3 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 remain stable with a slow recovery in tourism, a low unemployment rate, and some increase in construction activity. For 2025, the Company expects volume to approach the level achieved last year.
In Alaska, the Company’s container volume for the first quarter 2025 increased 4.8 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 2025, the Company expects volume to be comparable to the level achieved last year.
The contribution in the first quarter 2025 from the Company’s SSAT joint venture investment was $6.6 million, or $6.2 million higher than first quarter 2024. The increase was primarily due to higher lift volume. For 2025, the Company expects the contribution from SSAT to be lower than the $17.4 million achieved last year without taking into account the $18.4 million impairment charge at SSAT during the fourth quarter 2024.
Based on the outlook trends noted above, along with significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors, the Company expects Ocean Transportation operating income for the second quarter 2025 to be meaningfully lower than the level achieved in the same period last year. For full year 2025, the Company expects Ocean Transportation operating income to be lower than the level achieved in the prior year, with the amount dependent on the impact and timing of the global trade and macroeconomic uncertainties described above.
Logistics: In the first quarter 2025, operating income for the Company’s Logistics segment was $8.5 million, or $0.8 million lower compared to the level achieved in the first quarter 2024. The decrease was primarily due to a lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management. For the second quarter 2025, the Company expects Logistics operating income to be lower than the $15.6 million achieved in the second quarter 2024. For full year 2025, the Company expects Logistics operating income to be lower than the level achieved in the prior year due to a challenging environment for all the business lines.
Consolidated Operating Income: For the second quarter 2025, the Company expects consolidated operating income to be meaningfully lower than the $124.6 million achieved in the second quarter 2024. For full year 2025, the Company expects consolidated operating income to be lower than the $551.3 million achieved in 2024 due to the uncertain global trade and macroeconomic environment.
2
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 first quarter 2025, the Company’s effective tax rate was 21.6 percent. For the full year 2025, the Company expects its effective tax rate to be approximately 23.0 percent.
Capital and Vessel Dry-docking Expenditures: For the first quarter 2025, the Company made capital expenditure payments excluding new vessel construction expenditures of $22.5 million, new vessel construction expenditures (including capitalized interest and owner’s items) of $66.7 million, and dry-docking payments of $10.4 million. For the full year 2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $100 to $120 million, new vessel construction expenditures (including capitalized interest and owner’s items) of approximately $305 million, and dry-docking payments of approximately $40 million.
Results By Segment
Ocean Transportation — Three months ended March 31, 2025 compared with 2024
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Three Months Ended March 31, |
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(Dollars in millions) |
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2025 |
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2024 |
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Change |
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Ocean Transportation revenue |
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$ |
637.4 |
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$ |
579.0 |
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$ |
58.4 |
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10.1 |
% |
Operating costs and expenses |
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(563.8) |
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(551.4) |
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(12.4) |
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2.2 |
% |
Operating income |
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$ |
73.6 |
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$ |
27.6 |
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$ |
46.0 |
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166.7 |
% |
Operating income margin |
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11.5 |
% |
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4.8 |
% |
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Volume (Forty-foot equivalent units (FEU)) (1) |
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Hawaii containers |
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35,700 |
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34,600 |
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1,100 |
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3.2 |
% |
Alaska containers |
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19,700 |
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18,800 |
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900 |
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4.8 |
% |
China containers (2) |
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28,500 |
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28,900 |
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(400) |
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(1.4) |
% |
Guam containers |
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4,200 |
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4,900 |
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(700) |
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(14.3) |
% |
Other containers (3) |
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3,400 |
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3,600 |
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(200) |
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(5.6) |
% |
| (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 transshipped in China from other Asian ports. |
| (3) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue increased $58.4 million, or 10.1 percent, during the three months ended March 31, 2025, compared with the three months ended March 31, 2024. The increase was primarily due to significantly higher freight rates in China.
On a year-over-year FEU basis, Hawaii container volume increased 3.2 percent primarily due to the dry-docking of a competitor’s vessel; Alaska volume increased 4.8 percent primarily due to higher northbound volume, partially offset by an additional sailing in the year ago period; China volume was 1.4 percent lower; Guam volume decreased 14.3 percent primarily due to lower demand from retail and food and beverage segments; and Other containers volume decreased 5.6 percent.
3
Ocean Transportation operating income increased $46.0 million, or 166.7 percent, during the three months ended March 31, 2025, compared with the three months ended March 31, 2024. The increase was primarily due to significantly higher freight rates in China and a higher contribution from SSAT, partially offset by higher direct cargo expense and operating overhead costs.
The Company’s SSAT terminal joint venture investment had an income of $6.6 million during the three months ended March 31, 2025, compared to income of $0.4 million during the three months ended March 31, 2024. The increase was primarily driven by higher lift volume.
Logistics — Three months ended March 31, 2025 compared with 2024
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Three Months Ended March 31, |
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(Dollars in millions) |
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2025 |
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2024 |
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Change |
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Logistics revenue |
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$ |
144.6 |
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$ |
143.1 |
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$ |
1.5 |
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1.0 |
% |
Operating costs and expenses |
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(136.1) |
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(133.8) |
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(2.3) |
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1.7 |
% |
Operating income |
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$ |
8.5 |
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$ |
9.3 |
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$ |
(0.8) |
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(8.6) |
% |
Operating income margin |
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5.9 |
% |
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6.5 |
% |
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Logistics revenue increased $1.5 million, or 1.0 percent, during the three months ended March 31, 2025, compared with the three months ended March 31, 2024. The increase was primarily due to higher revenue in freight forwarding and supply chain management, partially offset by lower revenue from transportation brokerage.
Logistics operating income decreased $0.8 million, or 8.6 percent, during the three months ended March 31, 2025, compared with the three months ended March 31, 2024. The decrease was primarily due to a lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management.
Liquidity, Cash Flows and Capital Allocation
Matson’s Cash and Cash Equivalents decreased by $144.8 million from $266.8 million at December 31, 2024 to $122.0 million at March 31, 2025. As of March 31, 2025, there was $685.4 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 $89.0 million during the three months ended March 31, 2025, compared to $36.6 million during the three months ended March 31, 2024. Capital expenditures (including capitalized vessel construction expenditures) totaled $89.2 million for the three months ended March 31, 2025, compared with $55.3 million for the three months ended March 31, 2024. Total debt decreased by $10.1 million during the three months to $390.8 million as of March 31, 2025, of which $351.1 million was classified as long-term debt.1 As of March 31, 2025, Matson had available borrowings under its revolving credit facility of $643.9 million.
During the first quarter 2025, Matson repurchased approximately 0.5 million shares for a total cost of $69.2 million.2 As of the end of the first quarter 2025, there were approximately 3.3 million shares remaining in the Company’s share repurchase program. Matson’s Board of Directors also declared a cash dividend of $0.34 per share payable on June 5, 2025 to all shareholders of record as of the close of business on May 8, 2025.
1 Total debt is presented before any reduction for deferred loan fees as required by GAAP.
2 Includes stock repurchased during the quarter but not settled and taxes on share repurchases that will be paid after the quarter end.
4
Teleconference and Webcast
A conference call is scheduled on May 5, 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 first quarter results.
Date of Conference Call: |
Monday, May 5, 2025 |
Scheduled Time: |
4:30 p.m. ET / 1:30 p.m. PT / 10:30 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.
Participants may register for the conference call at:
https://register-conf.media-server.com/register/BI079c8de6b7cd48a79944599641e473ad
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 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; geopolitical factors; tariffs and global trade; regulatory measures; trajectory of the U.S. economy; conditions in the Transpacific; inventory restocking; consumer demand for e-commerce goods; diversification of our “catchment basin”; business conditions for all of Logistics’ business lines; economic growth and drivers in Hawaii, Alaska and Guam; population growth; interest rates; tourism levels; unemployment rates; construction activity; jobs growth; inflation; oil and gas exploration and production activity; market share; contribution from SSAT; impairment charge at SSAT; vessel transit and connection times; vessel operations; refleeting initiatives; timing and amount of milestone payments and related costs; the timing, manner and volume of repurchases of common stock pursuant to the repurchase program; and dividends.
5
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 unexpected 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, 2024 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.
6
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
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Three Months Ended |
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March 31, |
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(In millions, except per share amounts) |
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2025 |
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2024 |
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Operating Revenue: |
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Ocean Transportation |
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$ |
637.4 |
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$ |
579.0 |
Logistics |
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144.6 |
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|
143.1 |
Total Operating Revenue |
|
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782.0 |
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722.1 |
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Costs and Expenses: |
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Operating costs |
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(631.1) |
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(612.2) |
Income (Loss) from SSAT |
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6.6 |
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0.4 |
Selling, general and administrative |
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(75.4) |
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(73.4) |
Total Costs and Expenses |
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(699.9) |
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(685.2) |
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|
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Operating Income |
|
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82.1 |
|
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36.9 |
Interest income |
|
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9.4 |
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8.8 |
Interest expense |
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(1.7) |
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(2.2) |
Other income (expense), net |
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2.4 |
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1.8 |
Income before Taxes |
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92.2 |
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45.3 |
Income taxes |
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(19.9) |
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(9.2) |
Net Income |
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$ |
72.3 |
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$ |
36.1 |
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Basic Earnings Per Share |
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$ |
2.20 |
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$ |
1.05 |
Diluted Earnings Per Share |
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$ |
2.18 |
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$ |
1.04 |
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|
|
|
|
|
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Weighted Average Number of Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
|
32.8 |
|
|
34.4 |
Diluted |
|
|
33.2 |
|
|
34.6 |
7
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
March 31, |
|
December 31, |
||
(In millions) |
|
2025 |
|
2024 |
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ASSETS |
|
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|
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Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
122.0 |
|
$ |
266.8 |
Other current assets |
|
|
346.0 |
|
|
342.8 |
Total current assets |
|
|
468.0 |
|
|
609.6 |
Long-term Assets: |
|
|
|
|
|
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Investment in SSAT |
|
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91.0 |
|
|
84.1 |
Property and equipment, net |
|
|
2,314.0 |
|
|
2,260.9 |
Goodwill |
|
|
327.8 |
|
|
327.8 |
Intangible assets, net |
|
|
156.3 |
|
|
159.4 |
Capital Construction Fund |
|
|
685.4 |
|
|
642.6 |
Other long-term assets |
|
|
484.5 |
|
|
511.0 |
Total long-term assets |
|
|
4,059.0 |
|
|
3,985.8 |
Total assets |
|
$ |
4,527.0 |
|
$ |
4,595.4 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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|
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Current Liabilities: |
|
|
|
|
|
|
Current portion of debt |
|
$ |
39.7 |
|
$ |
39.7 |
Other current liabilities |
|
|
506.7 |
|
|
520.7 |
Total current liabilities |
|
|
546.4 |
|
|
560.4 |
Long-term Liabilities: |
|
|
|
|
|
|
Long-term debt, net of deferred loan fees |
|
|
340.9 |
|
|
350.8 |
Deferred income taxes |
|
|
693.9 |
|
|
693.4 |
Other long-term liabilities |
|
|
312.6 |
|
|
338.8 |
Total long-term liabilities |
|
|
1,347.4 |
|
|
1,383.0 |
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
2,633.2 |
|
|
2,652.0 |
Total liabilities and shareholders’ equity |
|
$ |
4,527.0 |
|
$ |
4,595.4 |
8
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended March 31, |
|
||||
(In millions) |
|
2025 |
|
2024 |
|
||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
72.3 |
|
$ |
36.1 |
|
Reconciling adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
40.6 |
|
|
37.2 |
|
Amortization of operating lease right of use assets |
|
|
34.5 |
|
|
33.9 |
|
Deferred income taxes |
|
|
0.4 |
|
|
2.3 |
|
Share-based compensation expense |
|
|
5.8 |
|
|
5.7 |
|
Income from SSAT |
|
|
(6.6) |
|
|
(0.4) |
|
Distributions from SSAT |
|
|
— |
|
|
14.0 |
|
Other |
|
|
(1.9) |
|
|
(1.7) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(1.6) |
|
|
(23.7) |
|
Deferred dry-docking payments |
|
|
(10.4) |
|
|
(5.2) |
|
Deferred dry-docking amortization |
|
|
6.6 |
|
|
6.8 |
|
Prepaid expenses and other assets |
|
|
(6.9) |
|
|
2.4 |
|
Accounts payable, accruals and other liabilities |
|
|
(5.3) |
|
|
(34.3) |
|
Operating lease assets and liabilities, net |
|
|
(35.1) |
|
|
(34.6) |
|
Other long-term liabilities |
|
|
(3.4) |
|
|
(1.9) |
|
Net cash provided by operating activities |
|
|
89.0 |
|
|
36.6 |
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
Vessel construction expenditures |
|
|
(66.7) |
|
|
(1.1) |
|
Capital expenditures (excluding vessel construction expenditures) |
|
|
(22.5) |
|
|
(54.2) |
|
Proceeds from disposal of property and equipment, net |
|
|
0.2 |
|
|
2.3 |
|
Cash and interest deposited into the Capital Construction Fund |
|
|
(105.4) |
|
|
(6.0) |
|
Withdrawals from Capital Construction Fund |
|
|
65.0 |
|
|
— |
|
Net cash used in investing activities |
|
|
(129.4) |
|
|
(59.0) |
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
Repayments of debt |
|
|
(10.1) |
|
|
(10.1) |
|
Dividends paid |
|
|
(11.3) |
|
|
(11.1) |
|
Repurchase of Matson common stock |
|
|
(66.9) |
|
|
(47.3) |
|
Tax withholding related to net share settlements of restricted stock units |
|
|
(16.1) |
|
|
(17.2) |
|
Net cash used in financing activities |
|
|
(104.4) |
|
|
(85.7) |
|
|
|
|
|
|
|
|
|
Net Decrease in Cash, Cash Equivalents and Restricted Cash |
|
|
(144.8) |
|
|
(108.1) |
|
Cash and Cash Equivalents, and Restricted Cash, Beginning of the Period |
|
|
266.8 |
|
|
136.3 |
|
Cash and Cash Equivalents, and Restricted Cash, End of the Period |
|
$ |
122.0 |
|
$ |
28.2 |
|
|
|
|
|
|
|
|
|
Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
122.0 |
|
$ |
25.9 |
|
Restricted Cash |
|
|
— |
|
|
2.3 |
|
Total Cash and Cash Equivalents, and Restricted Cash, End of the Period |
|
$ |
122.0 |
|
$ |
28.2 |
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
Interest paid, net of capitalized interest |
|
$ |
1.7 |
|
$ |
0.5 |
|
Income tax payments (refunds), net |
|
$ |
1.6 |
|
$ |
1.1 |
|
|
|
|
|
|
|
|
|
Non-cash Information: |
|
|
|
|
|
|
|
Capital expenditures included in accounts payable, accruals and other liabilities |
|
$ |
7.6 |
|
$ |
16.0 |
|
9
MATSON, INC. AND SUBSIDIARIES
Net Income to EBITDA Reconciliations
(Unaudited)
|
|
|
Three Months Ended |
|
|
|
|||||||
|
|
|
March 31, |
|
Last Twelve |
||||||||
(In millions) |
|
|
2025 |
|
2024 |
|
Change |
|
Months |
||||
Net Income |
|
|
$ |
72.3 |
|
$ |
36.1 |
|
$ |
36.2 |
|
$ |
512.6 |
Subtract: |
Interest income |
|
|
(9.4) |
|
|
(8.8) |
|
|
(0.6) |
|
|
(48.9) |
Add: |
Interest expense |
|
|
1.7 |
|
|
2.2 |
|
|
(0.5) |
|
|
7.0 |
Add: |
Income taxes |
|
|
19.9 |
|
|
9.2 |
|
|
10.7 |
|
|
133.7 |
Add: |
Depreciation and amortization |
|
|
40.6 |
|
|
37.3 |
|
|
3.3 |
|
|
156.4 |
Add: |
Dry-dock amortization |
|
|
6.6 |
|
|
6.8 |
|
|
(0.2) |
|
|
27.0 |
EBITDA (1) |
|
|
$ |
131.7 |
|
$ |
82.8 |
|
$ |
48.9 |
|
$ |
787.8 |
| (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. |
10
|
1Q 2025 Earnings Conference Call May 5, 2025 |
|
2 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 May 5, 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 12-23 of our Form 10-K filed on February 28, 2025 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. 1Q 2025 Earnings Conference Call Forward-Looking Statements |
|
3 • 1Q25 as expected with significantly higher YoY consolidated operating income ─ Our China service was the primary driver and benefitted from the carryover of elevated freight rates from 4Q24 combined with healthy freight demand following a traditional post-Lunar New Year period ─ Higher YoY volume in Hawaii and Alaska and lower YoY volume in Guam ─ Logistics had lower operating income YoY primarily due to a lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management • Lowering 2025 outlook due to uncertainty in the market ─ There is significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors 1Q 2025 Earnings Conference Call Opening Remarks |
|
4 1Q 2025 Earnings Conference Call • Container volume increased 3.2% YoY due to the dry-docking of a competitor’s vessel 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 40,000 Q1 Q2 Q3 Q4 2024 2025 • Expect volume in 2025 to be comparable to the level achieved last year reflecting: ─ Modest economic growth ─ Stable market share Hawaii Service 1Q25 Performance Container Volume (FEU Basis) Full Year 2025 Outlook |
|
0 100 200 300 400 500 600 700 800 900 1,000 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 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 Jan-25 Mar-25 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) 5 Hawaii Service − Current Business Trends 1Q 2025 Earnings Conference Call • According to UHERO, the Hawaii economy remains stable with… ─ Low unemployment rate ─ Strong construction activity ─ Stable tourism • …offset by ─ Challenging population growth ─ High inflation and interest rates 2025P 2026P 2027P Real GDP 1.6% 1.6% 1.1% Construction Jobs Growth 2.5% 0.9% (0.7)% Population Growth 0.0% (0.1)% (0.1)% Unemployment Rate 3.4% 3.6% 3.6% Visitor Arrivals (‘000s) % change 9,939.8 2.6% 9,887.6 (0.5)% 9,857.8 (0.3)% Select Hawaii Economic Indicators UHERO Projections (3) Commentary (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2025-03-state.xls (2) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2025-03-maui.xls (3) Source: https://uhero.hawaii.edu/wp-content/uploads/2025/02/UHEROForecastForTheStateOfHawaii25Q1.pdf |
|
6 China Service 1Q 2025 Earnings Conference Call • Significantly higher freight rates YoY ─ Elevated freight rates from 4Q24 were carried over into 1Q25 • Container volume decreased 1.4% YoY 1Q25 Performance Container Volume (1) (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 Q1 Q2 Q3 Q4 2024 2025 (1) Includes containers transshipped in China from other Asian ports. |
|
7 • Currently, there is significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors • Since the tariffs were implemented in April, our container volume has declined approximately 30% YoY • Given the pronounced market decline in demand in the Transpacific in April, coupled with limited visibility to our container demand, we expect: ─ 2Q25 container volume and average freight rates to be lower YoY ─ Full year 2025 container volume and average freight rates to be lower YoY • Working closely with our Asia trans-shipment partners as our customers look at options to diversify and grow their manufacturing locations ─ We will continue to follow our customers as they reposition and expand their manufacturing footprint in response to changing tariffs as part of our “catchment basin” strategy in Asia ─ In 1Q25, announced a new direct service connecting Ho Chi Minh to our CLX and MAX Shanghai departures ▪ Providing the fastest connecting times out of Vietnam ▪ Expansion based on success and customer feedback received since launching our inaugural direct service connection from Haiphong two years ago ─ In the near-term, expect higher volumes from Vietnam ─ We are well-positioned with our multi-year trans-shipment relationships to scale up as expedited freight volumes grow in the region ▪ Expect the uncertain environment to accelerate the diversification of our “catchment basin” in Asia 1Q 2025 Earnings Conference Call China Service − Current Business Trends |
|
8 • Believe we are in the early innings of the U.S.-China trade negotiations ─ Expect disruptive conditions in the Transpacific with ocean carriers blanking China sailings and implementing service changes due to lower volume in response to the tariffs ─ We have also seen some carriers add ports of call and increase capacity and allocations in strings from other Asia origins ─ At some point, retailers will need to continue to restock their shelves or risk significant inventory issues ─ We also expect consumer demand for e-commerce goods will continue to grow • Matson is a trusted supply chain partner ─ Expect to run our business like we always have with a focus on speed, on-time arrivals, and customer service ─ Solid relationships with partners in the region provide opportunities for further diversification of where our freight is originated ─ We have the resources and assets to move quickly to adapt to a changing environment and find opportunities 1Q 2025 Earnings Conference Call China Service – Current Business Trends (continued) |
|
9 • On April 17, 2025, United States Trade Representative (USTR) finalized its notice of action under Section 301 ─ Follows the President’s Executive Order on April 9, 2025 1Q 2025 Earnings Conference Call USTR 301 – Initial Observations Relevant Actions and Proposed Actions Exemptions • A group of small vessel operators received exemptions from the USTR: ─ Short sea shipping ─ Great Lakes shipping ─ Caribbean shipping ─ Small vessels • Certain service fees on (i) the maritime transport services of Chinese operators and shipowners and (ii) operators using Chinese-built vessels on a non-discriminatory basis ─ Effective on October 14, 2025 ─ Annual increase to service fees ─ Each vessel will be charged a maximum of five times annually • USTR proposing additional duties on ship-to-shore cranes, containers and certain chassis of China Source: https://ustr.gov/sites/default/files/files/Press/Releases/2025/301%20Ships%20-%20Action%20FRN%204-17.pdf Matson is exempt from the USTR’s notice of action due to our size, but is still negatively impacted directly by lower volume and indirectly by merchandise tariffs paid by our customers |
|
10 Guam Service 1Q 2025 Earnings Conference Call • Container volume decreased 14.3% YoY • Primarily due to lower demand from retail and food and beverage segments • Expect Guam’s economy to remain stable with a slow recovery in tourism, a low unemployment rate, and some increase in construction activity • Expect volume to approach the level achieved last year 1Q25 Performance Container Volume (FEU Basis) 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Q1 Q2 Q3 Q4 2024 2025 Full Year 2025 Outlook |
|
11 Alaska Service 1Q 2025 Earnings Conference Call • Container volume increased 4.8% YoY ─ Higher northbound volume, partially offset by an additional sailing in the year ago period 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Q1 Q2 Q3 Q4 2024 2025 • Expect continued economic growth supported by a low unemployment rate, jobs growth and continued oil and gas exploration and production activity • Expect volume to be comparable to the level achieved last year 1Q25 Performance Container Volume (FEU Basis) Full Year 2025 Outlook |
|
12 SSAT Joint Venture 1Q 2025 Earnings Conference Call • Terminal joint venture contribution was $6.6 million; YoY increase of $6.2 million ─ Primarily due to higher lift volume ($12.0) ($10.0) ($8.0) ($6.0) ($4.0) ($2.0) $0.0 $2.0 $4.0 $6.0 $8.0 Q1 Q2 Q3 Q4 2024 2025 1Q25 Performance Equity in Income of JV ($ in millions) • Expect the contribution from SSAT to be lower than the $17.4 million achieved last year without taking into account the $18.4 million impairment charge at SSAT during the fourth quarter 2024 Full Year 2025 Outlook |
|
13 Matson Logistics 1Q 2025 Earnings Conference Call • Operating income of $8.5 million; YoY decrease of approximately $0.8 million ─ Lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 Q1 Q2 Q3 Q4 2024 2025 • Expect operating income to be lower than the level achieved last year due to a challenging environment for all business lines 1Q25 Performance Operating Income ($ in millions) Full Year 2025 Outlook |
|
14 1Q 2025 Earnings Conference Call Financial Results − Summary Income Statement First Quarter Quarter Ended 3/31 Δ ($ in millions, except per share data) 2025 2024 $ % Revenue Ocean Transportation $637.4 $579.0 $58.4 10.1% Logistics 144.6 143.1 1.5 1.0% Total Revenue $782.0 $722.1 $59.9 8.3% Operating Income Ocean Transportation $73.6 $27.6 $46.0 166.7% Logistics 8.5 9.3 (0.8) (8.6)% Total Operating Income $82.1 $36.9 $45.2 122.5% Interest income 9.4 8.8 0.6 6.8% Interest expense (1.7) (2.2) 0.5 (22.7)% Other income (expense), net 2.4 1.8 0.6 33.3% Income taxes (19.9) (9.2) (10.7) 116.3% Net Income $72.3 $36.1 $36.2 100.3% 33.2 34.6 (1.4) (4.0)% GAAP EPS, diluted $2.18 $1.04 $1.14 109.6% $47.2 $44.1 $3.1 7.0% EBITDA $131.7 $82.8 $48.9 59.1% Depreciation and Amortization (incl. dry-dock amortization) Weighted Average Number of Shares Outstanding (diluted) |
|
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 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 $820.2 ($39.7) ($182.8) ($65.5) ($161.2) ($45.0) ($218.7) ($13.5) $93.8 15 Cash Generation and Uses of Cash 1Q 2025 Earnings Conference Call (1) Includes capitalized interest and owner’s items. (2) Includes cash deposits into the Capital Construction Fund (CCF) and interest income on cash deposits and fixed-income securities in the CCF, net of withdrawals for milestone payments. Last Twelve Months Ended March 31, 2025 ($ in millions) Cash Flow from Operations Paydown of Borrowings, net Maint. Capex New Vessel Capex (1) Capital Construction Fund (2) Dividends Shares Repurchase Other Net Change in Cash |
|
16 Financial Results − Summary Balance Sheet 1Q 2025 Earnings Conference Call • 1Q25: approximately 0.5 million shares repurchased for total cost of $69.2 million (1) • Total Debt of $390.8 million (2) ─ Decreased by $10.1 million in 1Q25 ($ in millions) ASSETS Cash and cash equivalents $122.0 $266.8 Other current assets 346.0 342.8 Total current assets 468.0 609.6 Investment in SSAT 91.0 84.1 Property and equipment, net 2,314.0 2,260.9 Intangible assets, net 156.3 159.4 Capital Construction Fund (CCF) 685.4 642.6 Goodwill 327.8 327.8 Other long-term assets 484.5 511.0 Total assets $4,527.0 $4,595.4 LIABILITIES AND SHAREHOLDERS’ EQUITY Current portion of debt $39.7 $39.7 Other current liabilities 506.7 520.7 Total current liabilities 546.4 560.4 Long-term debt, net of deferred loan fees 340.9 350.8 Other long-term liabilities 1,006.5 1,032.2 Total long-term liabilities 1,347.4 1,383.0 Total shareholders’ equity 2,633.2 2,652.0 Total liabilities and shareholders’ equity $4,527.0 $4,595.4 March 31, December 31, 2025 2024 Share Repurchase Debt Levels (1) Includes stock repurchased during the quarter but not settled and taxes on share repurchases that will be paid after the quarter end. (2) Total Debt is presented before any reduction for deferred loan fees as required by GAAP. |
|
17 2025 Outlook 1Q 2025 Earnings Conference Call Ocean Transportation Operating Income To be lower than the $500.9 million achieved in 2024 Logistics Operating Income To be lower than the $50.4 million achieved in 2024 Consolidated Operating Income To be lower than the $551.3 million achieved in 2024 Depreciation and Amortization Approx. $200 million, including approx. $26 million in dry-dock amortization Interest Income Approximately $31 million Interest Expense (1) Approximately $7 million Other Income (Expense) Approximately $9 million GAAP Effective Tax Rate Approximately 23.0% Dry-Docking Payments Approximately $40 million 2Q25 Outlook FY 2025 Outlook Items Ocean Transportation Operating Income To be meaningfully lower than the $109.0 million achieved in 2Q24 Logistics Operating Income To be lower than the $15.6 million achieved in 2Q24 Consolidated Operating Income To be meaningfully lower than the $124.6 million achieved in 2Q24 (1) Interest expense excludes capitalized interest |
|
18 1Q 2025 Earnings Conference Call Capital Expenditures Update ($ in millions) FY 2025 Comments Expected New vessel construction milestone payments and related costs $305 • Includes owner’s items and capitalized interest expense Expected Maintenance and other capital expenditures $100 – $120 • 2025 capex includes approximately $14 million in equipment lease buyouts Total $405 – $425 • We expect to make approximately $225 million in milestone payments during the balance of 2025 from the CCF • We expect our next cash contribution into the CCF to be in 2028 New Vessel Milestone Payments Expected Remaining 2025 New Vessel Construction Milestone Payments by Quarter ($ in millions) 2Q25 Approximately $36 3Q25 Approximately $71 4Q25 Approximately $118 Total Approximately $225 |
|
19 Closing Thoughts 1Q 2025 Earnings Conference Call • We are navigating an unsettled and rapidly changing environment ─ For the last two decades, we have operated our expedited ocean service through significant periods of uncertainty and disruption ─ We have come out of those periods better for it as we demonstrate what we do best for our customers, which is to be a trusted supply chain partner with a consistent, reliable and fast service ─ We believe we are in the early innings of the U.S. – China trade negotiations and expect a deal to be reached although timing is unclear • Despite the current uncertainties, we remain confident in our long-term prospects due to the diversification of our businesses and cash flows, our focus on serving niche markets where we are an integral part of the supply chain, and the strength of our balance sheet ─ Our businesses are durable and capable of withstanding short-term fluctuations while creating long-term shareholder value. • We remain committed to maintaining the reliability of our vessel operations and providing high-quality service to our customers and the communities that rely on us • Matson has over 140 years of operating history and has historically performed well during periods of supply chain disruption given our competitive advantages and the reliability of our services ─ We remain committed to looking for growth, either organically or via acquisition, and are prepared to act quickly if an opportunity presents itself during this period of uncertainty • We expect to continue to return capital to shareholders through dividends and our share repurchase program |
|
Appendix |
|
21 1Q 2025 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”). |
