May 3, 2005
U.S. Shipping Partners reports increased income
"We are pleased with the results of our first full quarter of operations as a public company," said U.S. Shipping Partners L.P. (NYSE: USS) Chairman and CEO Paul B. Gridley today, reporting results of operations for the quarter ended March 31, 2005. The partnership also announced that the Board of Directors of its general partner declared a distribution of $0.45 per unit in respect of the first quarter, or $1.80 per unit annualized.
"Our partnership enjoyed strong demand in both our clean petroleum products and chemical shipping businesses," said Gridley. "We expect increasingly stringent quality standards for U.S. flag vessels combined with continued deletion of older vessels under OPA 90 regulations will continue to support full utilization of our fleet and favorable trends in freight rates. We continue to seek opportunities to grow our business through selective acquisitions and the construction of additional vessels, including articulated tug barges (ATB's), the first of which is currently scheduled for delivery in April 2006."
U.S. Shipping Partners is a Jones Act operation with a current fleet of eight tank vessels: six integrated tug barge units, or ITBs, and two specialty refined petroleum and chemical product, or parcel, tankers. The partnership began operations in September 2002 when it acquired its six ITBs from a division of Amerada Hess that was managed by several executive officers of its general partner. Its two parcel tankers, the Chemical Pioneer and the Charleston, were acquired in May 2003 and April 2004, respectively.
For the three months ended March 31, 2005, the partnership reported net income of $6.6 million, an increase of $3.9 million, or 141 percent, compared to $2.8 million for the three months ended March 31, 2004. This increase is due to increased operating income of $2.3 million, due to the addition of one chemical parcel tanker and increased freight rates, coupled with a reduction of $1.1 million in interest expense resulting from the repayment of $93.8 million in debt concurrent with the initial public offering in November 2004. Net income per basic limited partnership unit increased to $0.47 for the three months ended March 31, 2005, as compared to $0.35 per unit for the three months ended March 31, 2004. The weighted average number of basic limited partnership units outstanding increased to 13.8 million in the first quarter 2005 from 7.8 million in the first quarter 2004 as a result of the Partnership's November 2004 initial public offering.
Operating income was $7.5 million, or 23 percent of voyage revenue, for the three months ended March 31, 2005 compared to $5.2 million, or 20 percent of voyage revenue, for the comparable period in 2004. Revenues rose to $33.1 million, an increase of $7.4 million, or 29 percent, over 2004 first quarter revenues of $25.7 million.
The partnership's addition of the Charleston, which it did not own during the three months ended March 2004, as well as increased time charter equivalent rates of approximately $2,200 per day, or 7 percent, caused by a strong spot market, contributed to the increase in revenues.