October 27, 2006
Red ink at International Shipholding
International Shipholding Corporation (NYSE: ISH) says it is "evaluating strategic options" for its liner shipping segment services including both its U.S. flag and transAtlantic LASH services.
ISC reported a net loss for the three months ended September 30, 2006 of $936,000 as compared to a net loss of $845,000 for the three months ended September 30, 2005.
For the first nine months of 2006, the net loss was $5.314 million, which included a non-cash charge of $8.866 million before taxes and $5.763 million after taxes associated with the impairment of its investment in its rail/ferry service's terminal in New Orleans.
Net income was $7.221 million for the first nine months of 2005.
Net loss to common stockholders for the third quarter was $1.536 million after dividends of $600,000 on preferred stock.
For the nine month period , the net loss to common stockholders was $7.114 million after preferred stock dividends.
ISC says that while operating results for the quarter were comparable to the same period in 2005, they reflect improved results in the time charter and rail/ferry segments and lower results from liner services.
The time charter segment showed improved results primarily from the company's U.S. flag coal carrier operating all of the days under the time charter agreement.
The rail/ferry service which was forced to cease operations for an extended time in the third quarter of 2005, incurring significant losses as a result of Hurricanes Katrina and Rita, operated at break-even levels in the third quarter of 2006.
Liner segment results, consisting of transatlantic and U.S. flag LASH services, were lower from the comparable three month period in 2005.
The transatlantic service continued to be impacted by lower eastbound cargo volumes while the U.S. flag service was affected by time out of service for unscheduled repairs to that service's vessel during the quarter. Repairs are completed and the vessel is now operating satisfactorily.
Depreciation expense was higher in the third quarter of 2006 resulting from capital improvements in the beginning of the year to one of the LASH vessels as well as both of the vessels used in the rail/ferry service.
The results for the nine months ended September 30, 2006 reflect the decision, in the second quarter, to record an impairment charge of $8.866 million on the rail/ferry service's New Orleans terminal in connection with the decision to relocate the U.S. operations of that service to Mobile, Alabama, resulting from effects of Hurricane Katrina.
Additionally, the liner segment for the first nine months of 2006 has operated at a loss due in part to lower than anticipated cargo volumes.