American Commercial Lines Inc (ACLI) filed Quarterly Report for the period ended 2009-09-30.
American Commercial Lines LLC is a fully integrated network of marine transportation companies operating in barges and towboats on the inland waterways of North and South America and transporting more than million tons of freight annually. Additionally ACL operates marine construction repair and ancillary service facilities and river terminals. Its mission is to provide quality marine transportation manufacturing and port services. American Commercial Lines Inc has a market cap of $263.1 million; its shares were traded at around $20.69 with a P/E ratio of 11.1 and P/S ratio of 0.2.
Highlight of Business Operations:
For the quarters ended September 30, 2009, and September 30, 2008, the Company had a net loss of $12.2 million compared to net income of $18.3 million. For the nine months ended September 30, 2009, and September 30, 2008, the Company had a net loss $21.4 million compared to net income of $24.3 million.
Results for the quarter ended September 30, 2009, were also impacted by three significant non-comparable charges: (i) debt retirement expenses of $17.7 million related to the Company’s third quarter debt refinancing, (ii) an impairment charge of $4.4 million related to the intangible assets of the Company’s Summit engineering business and (iii) a charge of $2.3 million related to a customer contract dispute in its manufacturing segment. The current quarter also benefitted from higher net gains from asset management actions of approximately $12.0 million. Net gains from asset management actions include the gains on sale or disposal of boats, barges and other assets, impairment of long-lived tangible assets and scrapping margin In the third quarter 2009, though average outstanding debt declined from the prior year’s third quarter, interest expense, driven by the Company’s increased cost of debt, were $3.0 million higher, negatively impacting (loss) income from continuing operations before income taxes.
The transportation segment, as illustrated in more detail in the chart in “Transportation” below, continued to be significantly affected by the reduced volumes in its high margin metals and chemicals lines of business (“negative revenue mix”). With ongoing lower demand in our most profitable lines of business and weak spot pricing on the remaining business, operating expenses and operating ratio for the quarter and nine months were significantly negatively impacted in comparison to the prior year. The significant impact of the negative mix shift, excluding grain, drove operating profit down $34.0 million in the quarter, on a 12.1% decrease in ton miles, and $60.6 million for the nine month period. The $19.0 million decline in grain pricing in the quarter drove an $8.2 million decline in grain profitability in the quarter and $10.6 million for the nine month period, despite $7.8 million of lower fuel prices to move grain and a 25% increase in grain volumes for the quarter due to strong volume gains in July and August compared to the prior year. The harvest delay impacted grain volumes and pricing in September, as grain volumes declined 56% compared to August, instead of increasing as is normal. We estimate the volume-related margin impact of the delay in the grain harvest at approximately $3 million in the quarter due to lower than normal September grain volume. Also, we continue to move significantly more empty barges, primarily as a result of an imbalance of northbound vs. southbound freight due to the economic conditions and the impact on northbound dry bulk volumes, primarily metals. We estimate that the incremental expense impact of moving these additional empties compared to prior year was $6.4 million in the quarter and $16.1 million for the nine month period. Net fuel (other than grain) impacted the quarter by a negative $4.6 million compared to the prior year quarter. For the nine month period we benefitted by $1.2 million compared to last year due to the rapidly rising fuel costs in last year’s first nine months.
We have continued to lower our cost structure with transportation SG&A down $2.3 million quarter-over-quarter and $3.4 million for the nine month periods including non-comparable charges. Wages in our SG&A total were down $1.1 million during the quarter. Manufacturing SG&A increased $2.3 million due to the charge for the customer dispute in the third quarter. For the nine months ended September 30, 2009, consolidated SG&A declined by $1.2 million despite the non-comparable charges included therein as scheduled in the table above.
For the quarter and nine months ended September 30, 2009, EBITDA was $22.4 million and $55.7 million compared to $49.6 million and $100.3 million, respectively, in the same period of the prior year. EBITDA as a percent of revenue was 10.4% in the third quarter compared to 15.8% in the prior year quarter. EBITDA as a percent of revenue was 8.7% in the nine months ended September 30, 2009, compared to 11.1% in the similar period of the prior year. See the table at the end of this Consolidated Financial Overview for a definition of EBITDA and a reconciliation of EBITDA to consolidated net income.
Revenues per average barge operated decreased 38.0% in the third quarter 2009 over their third quarter 2008 level. Approximately 79% of the decrease was due to lower affreightment revenue and the remainder was due to lower non-affreightment revenue. Approximately two-thirds of the lower affreightment revenue per barge resulted from the negative revenue mix with the remainder attributable to fuel price de-escalation in the quarter. On a fuel neutral basis overall ton-mile rates decreased by 25.1% quarter over quarter and 23.7% for the first nine months 2009 compared to the first nine months 2008. Fuel prices related to non-grain affreightment term contracts had a negative $24.4 million impact on quarter over quarter revenue comparison and had a negative $49.6 million impact on the nine months revenue comparison. Grain prices declined by $19.0 and $37.6 million in the quarter and nine months ended September 30, 2009, compared to the same periods of the prior year. The average price per gallon for fuel decreased by 44% to $2.01 per gallon in the quarter and by more than 40% for the nine months ended September 30, 2009, to $1.95 per gallon.
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