OVERSEAS SHIPHOLDING GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

Tampa, FL, March 13, 2020 (GLOBE NEWSWIRE) — Overseas Shipholding Group, Inc. (NYSE: OSG) (the “Company” or “OSG”), a provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, today reported results for the fourth quarter and full year 2019.
HighlightsMr. Sam Norton, President and CEO, stated, “We are extremely pleased with the results for the fourth quarter of last year. Revenue, EBITDA and earnings all came in at levels that portend continued progress in fulfilling the promise of our business strategy. For some time, we have been expressing confidence that the mix of our revenue streams has positioned OSG to generate stable revenues from our niche businesses while capturing the upside of the ongoing market recovery. The emerging strength of our conventional tanker earnings contribution is now evident. Combined with the expectation of continued stability from our other revenue streams, we have reason to believe that the long-anticipated return to sustained profitability is now at hand.”Mr. Norton added, “Looking forward, the acquisition of Alaska Tanker Company and the three large crude oil tankers operated by that company will have a profoundly positive impact on our 2020 results. With the transaction having been completed yesterday, we now expect an incremental EBITDA contribution of $15mm over the balance of this year, and more than $20mm for the first full year of operations in 2021. These transactions allow us to build on our strong Jones Act franchise and present an exciting opportunity for OSG – one that we are looking forward to delivering on.”^{A, B, C}Reconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8.Fourth Quarter 2019 ResultsShipping revenues were $98.4 million for the quarter, up 10.3% compared with the fourth quarter of 2018. TCE revenues for the fourth quarter of 2019 were $93.8 million, an increase of $13.9 million, or 17.3%, compared with the fourth quarter of 2018, primarily due to an increase in average daily rates earned and decreased spot market exposure.Operating income for the fourth quarter of 2019 was $18.7 million compared to operating income of $7.4 million in the fourth quarter of 2018.Net income for the fourth quarter was $11.0 million, or $0.12 per diluted share, compared with net loss of $5.2 million, or $(0.05) per diluted share, for the fourth quarter 2018.Adjusted EBITDA was $33.7 million for the quarter, an increase of $10.6 million compared with the fourth quarter of 2018, driven primarily by the increase in TCE revenues.Full Year 2019 ResultsShipping revenues were $355.5 million for the full year 2019, down 2.9% compared with the full year 2018. TCE revenues for the full year 2019 were $335.1 million, an increase of $8.4 million, or 2.6%, compared with the full year 2017. The decrease in shipping revenues primarily resulted from three fewer vessels in operation during most of 2019 compared to 2018. The increase in TCE revenues primarily resulted from an increase in average daily rates earned and decreased spot market exposure.Operating income for the full year 2019 was $33.4 million compared to operating income of $27.4 million for the full year 2018.Net income for the full year 2019 was $8.7 million, or $0.10 per diluted share, compared with net income of $13.5 million, or $0.15 per diluted share, for the full year 2018. The decrease was due to the recognition of $21.7 million of previously deferred tax benefits upon completion of an Internal Revenue Service examination in the third quarter of 2018.Adjusted EBITDA was $91.6 million for the full year 2019, an increase of $4.7 million compared with the full year 2018, driven primarily by the increase in TCE revenues.Conference CallThe Company will host a conference call to discuss its fourth quarter and full year 2019 results at 9:00 a.m. Eastern Time (“ET”) on Friday, March 13, 2020.To access the call, participants should dial (844) 850-0546 for domestic callers and (412) 317-5203 for international callers. Please dial in ten minutes prior to the start of the call.A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at http://www.osg.com/An audio replay of the conference call will be available starting at 11:00 a.m. ET on Friday, March 13, 2020 through 10:59 p.m. ET on Friday, March 20, 2020 by dialing (877) 344-7529 for domestic callers and (412) 317-0088 for international callers, and entering Access Code 10139416.About Overseas Shipholding Group, Inc.Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG is a major operator of tankers and ATBs in the Jones Act industry. OSG’s 22 vessel U.S. Flag fleet consists of the three crude oil tankers just acquired doing business in Alaska, two conventional ATBs, two lightering ATBs, three shuttle tankers, ten MR tankers, and two non-Jones Act MR tankers that participate in the U.S. Maritime Security Program. OSG also currently owns and operates two Marshall Islands flagged MR tankers which trade internationally. In addition to the currently operating fleet, OSG has on order two Jones Act compliant barges which are scheduled for delivery in 2020.OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, the Company may make or approve certain forward-looking statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to our prospects, supply and demand for vessels in the markets in which we operate and the impact on market rates and vessel earnings, the expected delivery schedule of our two new barges under construction and their expected participation in the Jones Act trade, the continued stability of our niche businesses, and the impact of our time charter contracts on our future financial performance. Forward-looking statements are based on our current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in our Annual Report on Form 10-K and in similar sections of other filings we make with the SEC from time to time. We do not assume any obligation to update or revise any forward-looking statements except as may be required by applicable law. Forward-looking statements and written and oral forward-looking statements attributable to us or our representatives after the date of this press release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by us with the SEC.Investor Relations & Media Contact:
Susan Allan, Overseas Shipholding Group, Inc.
(813) 209-0620
sallan@osg.comConsolidated Statements of Operations
($ in thousands, except per share amounts)Consolidated Balance Sheets
($ in thousands)Consolidated Statements of Cash Flows
($ in thousands)Spot and Fixed TCE Rates Achieved and Revenue DaysThe following tables provide a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months and fiscal year ended December 31, 2019 and the comparable periods of 2018. Revenue days in the quarter ended December 31, 2019 totaled 1,887 compared with 1,927 in the prior year quarter. Revenue days in the fiscal year ended December 31, 2019 totaled 7,215 compared with 7,678 in the prior year. A summary fleet list by vessel class can be found later in this press release.
Fleet InformationAs of December 31, 2019, OSG’s operating fleet consisted of 21 vessels, 10 of which were owned, with the remaining vessels chartered-in. Vessels chartered-in are on Bareboat Charters.
Reconciliation to Non-GAAP Financial InformationThe Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures provide certain investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.(A) Time Charter Equivalent (TCE) RevenuesConsistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. TCE revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follows:Vessel Operating ContributionVessel operating contribution, a non-GAAP measure, is TCE revenues minus vessel expenses and charter hire expenses.Our “niche market activities”, which include Delaware Bay lightering, MSP vessels and shuttle tankers, continue to provide a stable operating platform underlying our total US Flag operations. These vessels’ operations are insulated from the forces affecting the broader Jones Act market.The following table sets forth the contribution of our vessels:(B) EBITDA and Adjusted EBITDAEBITDA represents net income/(loss) before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted to exclude amortization classified in charter hire expenses, interest expense classified in charter hire expenses, loss/(gain) on disposal of vessels and other property, including impairments, net, non-cash stock based compensation expense and loss on repurchases and extinguishment of debt and the impact of other items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net income/(loss) or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income/(loss) as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA.(C) Total Cash