Administrative and general expenses were approximately $875,000 higher for the quarter ended September 30, 2012, compared to the same period in 2011. Non-recurring expenses associated with the United Ocean Services’ acquisition negotiations, as well as employee bonus accruals, not accrued during the 2011 comparable period, were the primary drivers. For the year to date period the Company’s 2012 administrative and general expenses are at 2011 levels.
Interest and Other
During the three month period ended September 30, 2012, the Japanese Yen strengthened in relation to the U.S. Dollar from 79.81 to 77.93, producing a non-cash charge to earnings of $1.1 million. Lower interest expense reflect debt retirement using proceeds from the sale of assets.
The results from the Company’s investments in 50% or less owned ventures improved in the three months ended September 30, 2012, when compared to the same period in 2011. The results from the Company’s 25% investment in the company owning ten mini-bulkers had non-recurring mark to market adjustments on an ineffective interest rate swap contract reported in the 2011 period, while the current year’s results reflect operating income slightly above breakeven levels.
The Company’s working capital at September 30, 2012, was approximately $2.3 million. The lower working capital is attributable to the purchase of the rail repair yard during the quarter. Cash and cash equivalent balances were approximately $12.7 million at September 30, 2012.
The Company’s Board of Directors declared a $0.25 dividend payable on December 3, 2012, for each share of common stock owned on the record date of November 16, 2012. All future dividend declarations and amounts remain subject to the discretion of the Company’s Board of Directors.
Commenting on the outlook for 2013, Manny Estrada, Chief Financial Officer, said, “Following the completion of our pending acquisition of U.S. United Ocean Services, LLC (“UOS”), we expect our full year 2013 pro forma net income will be $18 to $20 million and our EBITDA will be $65 to $75 million. Both measures represent a significant improvement over our expected full year 2012 results. When setting our 2013 guidance, management took into account the additional contracted revenue from the operations of UOS, as well as our expectations for conditions in the dry bulk market.”