Matson Inc.
11/05/2025 | Press release | Distributed by Public on 11/05/2025 05:11
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and related notes, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.
FORWARD-LOOKING STATEMENTS
The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in writing, such as, among others, forecasts or projections of the Company's future performance or statements of management's plans and objectives. These statements are considered "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be contained in, among other things, Securities and Exchange Commission ("SEC") filings such as Forms 10-K, 10-Q and 8-K, the Company's Annual Report to Shareholders, the Company's Sustainability Report, press releases made by the Company, the Company's Internet websites (including websites of its subsidiaries), and oral statements made by officers of the Company. Except for historical information contained in these written or oral communications, all other statements are forward-looking statements. These include, for example, all references to 2025 or future years, including such references included under "Third Quarter 2025 Discussion and Outlook for 2025," as well as statements generally identified through the inclusion of words such as "anticipate," "believe," "can," "commit," "estimate," "expect," "goal," "intend," "may," "plan," "seek," "should," "target," and "will," or similar statements or variations of such terms and other similar expressions. New risks or uncertainties may emerge from time to time, risks that the Company currently does not consider to be material could become material, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such risks on the Company's business or the extent to which any factor, or combination of factors, may cause actual results or outcomes, or the timing of results or outcomes, to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results or outcomes and involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those projected in the statements, including but not limited to the factors that are described in Part II, Item 1A under the caption "Risk Factors" below. Except as required by law, the Company undertakes no obligation to revise or update publicly forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, circumstances occurring after the date of this report, or otherwise.
OVERVIEW
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a discussion of the Company's financial condition, results of operations, liquidity and certain other factors that may affect its future results from the perspective of management. The discussion that follows is intended to provide information that will assist in understanding the changes in the Company's Condensed Consolidated Financial Statements from period to period, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates affected the Company's Condensed Consolidated Financial Statements. The MD&A is provided as a supplement to the Condensed Consolidated Financial Statements and notes herein, and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024, the Company's reports on Forms 10-Q and 8-K, and other publicly available information.
THIRD QUARTER 2025 DISCUSSION AND OUTLOOK FOR 2025
Ocean Transportation:The Company's container volume in the Hawaii service in the third quarter 2025 was 0.3 percent higher year-over-year. The Hawaii economy is softening as slowing tourism and high inflation and interest rates weigh against stronger construction activity. The Company expects volume in full year 2025 to be comparable to the level achieved in 2024, reflecting modest economic growth in Hawaii and stable market share.
In China, the Company's container volume in the third quarter 2025 decreased 12.8 percent year-over-year primarily due to the difficult environment marked by continued uncertainty and volatility arising from tariffs and global trade. Freight rates in the third quarter 2025 were lower than the levels achieved in the same period last year. The Transpacific tradelane experienced a muted peak season compared to the elevated demand levels last year due to businesses advancing cargo in the late second quarter and early third quarter ahead of U.S. tariff deadlines, which led to lower third
quarter demand for the Company's expedited services. For the fourth quarter 2025, the Company expects lower year-over-year freight rates and volume in its China service as the Company expects many of its China service customers to be cautious on inventory levels and work through previously purchased inventory; however, the Company expects a more stable trading environment for customers in the fourth quarter 2025 as a result of a reduction in uncertainty regarding tariffs, port entry fees, global trade, and other geopolitical factors due to the trade and economic deal between the U.S. and China announced on October 30th. The Company expects volume in full year 2025 to be lower than the level achieved last year.
In Guam, the Company's container volume in the third quarter 2025 decreased 4.2 percent year-over-year due to lower general demand. In the near term, the Company expects Guam's economy to moderate reflecting a challenging tourism environment. For full year 2025, the Company expects volume to be modestly lower than the level achieved last year.
In Alaska, the Company's container volume for the third quarter 2025 increased 4.1 percent year-over-year. The increase was primarily due to one additional northbound sailing compared to the year ago period and higher AAX volume. In the near term, the Company expects continued economic growth in Alaska supported by a low unemployment rate, jobs growth and continued oil and gas exploration and production activity. For full year 2025, the Company expects volume to be modestly higher than the level achieved last year.
The contribution in the third quarter 2025 from the Company's SSAT joint venture investment was $9.3 million, or $2.4 million higher than third quarter 2024. The increase was primarily due to higher lift revenue. For full year 2025, the Company expects the contribution from SSAT to be higher than the $17.4 million achieved last year without taking into accountthe $18.4 million impairment charge recorded by SSAT during the fourth quarter 2024.
The Company expects Ocean Transportation operating income for the fourth quarter 2025 to be lower than the level achieved in the prior year. The outlook for Ocean Transportation operating income in the fourth quarter 2025 includes approximately $6.4 million in port entry fees paid quarter-to-date.
Logistics:In the third quarter 2025, operating income for the Company's Logistics segment was$13.6 million, or $1.8 million lower compared to the level achieved in the third quarter 2024. The decrease was primarily due to lower contributions from freight forwarding, transportation brokerage, and supply chain management. For the fourth quarter 2025, the Company expects Logistics operating income to be modestly lower than the $10.1 million achieved in the fourth quarter 2024.
Consolidated Operating Income:For the fourth quarter 2025, the Company expects consolidated operating income to be approximately 30 percent lower than the $147.5 million achieved in the fourth quarter 2024.
Depreciation and Amortization:For full year 2025, the Company expects depreciation and amortization expense to be approximately $196 million, inclusive of dry-docking amortization of approximately $28 million.
Interest Income: The Company expects interest income for the full year 2025 to be approximately $32 million.
Interest Expense:The Company expects interest expense for the full year 2025 to be approximately $7 million.
Other Income (Expense): The Company expects full year 2025 other income (expense) to be approximately $9 million in income, which is attributable to the amortization of certain components of net periodic benefit costs or gains related to the Company's pension and post-retirement plans.
Income Taxes:In the third quarter 2025, the Company's effective tax rate was 20.2 percent. For the full year 2025, the Company expects its effective tax rate to be approximately 22.0 percent.
Capital and Vessel Dry-docking Expenditures: For the third quarter 2025, the Company made capital expenditure payments excluding new vessel construction expenditures of $45.6 million, new vessel construction expenditures (including capitalized interest and owner's items) of $37.6 million, and dry-docking payments of $14.2 million. For the full year 2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $130 million, new vessel construction expenditures (including capitalized interest and owner's items) of approximately $248 million, and dry-docking payments of approximately $45 million.
CONSOLIDATED RESULTS OF OPERATIONS
Consolidated Results - Three months ended September 30, 2025 compared with 2024:
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Three Months Ended September 30, |
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(Dollars in millions, except per share amounts) |
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2025 |
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2024 |
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Change |
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Operating revenue |
$ |
880.1 |
$ |
962.0 |
$ |
(81.9) |
(8.5) |
% |
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Operating costs and expenses |
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(719.1) |
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(719.7) |
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0.6 |
(0.1) |
% |
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Operating income |
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161.0 |
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242.3 |
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(81.3) |
(33.6) |
% |
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Interest income |
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7.6 |
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10.4 |
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(2.8) |
(26.9) |
% |
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Interest expense |
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(1.8) |
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(1.8) |
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- |
0.0 |
% |
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Other income (expense), net |
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2.1 |
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1.9 |
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0.2 |
10.5 |
% |
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Income before taxes |
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168.9 |
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252.8 |
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(83.9) |
(33.2) |
% |
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Income taxes |
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(34.2) |
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(53.7) |
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19.5 |
(36.3) |
% |
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Net income |
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$ |
134.7 |
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$ |
199.1 |
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$ |
(64.4) |
(32.3) |
% |
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Basic earnings per share |
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$ |
4.28 |
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$ |
5.98 |
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$ |
(1.70) |
(28.4) |
% |
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Diluted earnings per share |
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$ |
4.24 |
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$ |
5.89 |
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$ |
(1.65) |
(28.0) |
% |
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Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.
The decrease in interest income for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due to lower amounts of cash and cash equivalent, and CCF funds that were invested in interest bearing accounts during the three months ended September 30, 2025.
Interest expense, net of capitalized interest was $1.8 million for the three months ended September 30, 2025, compared to $1.8 million for the three months ended September 30, 2024. Interest expense incurred during the quarter ended September 30, 2025 was lower due to a reduction in outstanding debt during the period, which was offset by a reduction in capitalized interest related to the construction of new vessels for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Other income (expense) relates to the amortization of certain components of net periodic benefit costs or gains related to the Company's pension and post-retirement plans.
Income tax expense was $34.2 million, or 20.2 percent of income before taxes, for the three months ended September 30, 2025, compared to $53.7 million, or 21.2 percent of income before taxes, for the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 benefited from higher discrete tax adjustments that lowered the effective tax rate for that period, compared to the same prior year period.
Consolidated Results - Nine months ended September 30, 2025 compared with 2024:
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Nine Months Ended September 30, |
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(Dollars in millions, except per share amounts) |
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2025 |
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2024 |
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Change |
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Operating revenue |
$ |
2,492.6 |
$ |
2,531.5 |
$ |
(38.9) |
(1.5) |
% |
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Operating costs and expenses |
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(2,136.5) |
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(2,127.7) |
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(8.8) |
0.4 |
% |
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Operating income |
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356.1 |
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403.8 |
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(47.7) |
(11.8) |
% |
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Interest income |
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25.0 |
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38.0 |
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(13.0) |
(34.2) |
% |
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Interest expense |
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(5.2) |
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(6.1) |
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0.9 |
(14.8) |
% |
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Other income (expense), net |
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6.9 |
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5.5 |
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1.4 |
25.5 |
% |
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Income before taxes |
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382.8 |
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441.2 |
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(58.4) |
(13.2) |
% |
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Income taxes |
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(81.1) |
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(92.8) |
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11.7 |
(12.6) |
% |
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Net income |
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$ |
301.7 |
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$ |
348.4 |
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$ |
(46.7) |
(13.4) |
% |
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Basic earnings per share |
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$ |
9.40 |
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$ |
10.28 |
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$ |
(0.88) |
(8.6) |
% |
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Diluted earnings per share |
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$ |
9.28 |
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$ |
10.13 |
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$ |
(0.85) |
(8.4) |
% |
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Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.
The decrease in interest income for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due to interest of $10.2 million related to a federal income tax refund received during the nine months ended September 30, 2024.
The decrease in interest expense for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due to lower outstanding debt during the period, and a higher offset of capitalized interest related to the construction of new vessels.
Other income (expense) relates to the amortization of certain components of net periodic benefit costs or gains related to the Company's pension and post-retirement plans.
Income tax expense was $81.1 million, or 21.2 percent of income before taxes, for the nine months ended September 30, 2025, compared to $92.8 million, or 21.0 percent of income before taxes, for the nine months ended September 30, 2024.
ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT
Ocean Transportation Operating Results - Three months ended September 30, 2025 compared with 2024:
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Three Months Ended September 30, |
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(Dollars in millions) |
2025 |
2024 |
Change |
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Ocean Transportation revenue |
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$ |
718.3 |
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$ |
798.7 |
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$ |
(80.4) |
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(10.1) |
% |
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Operating costs and expenses |
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(570.9) |
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(571.8) |
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0.9 |
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(0.2) |
% |
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Operating income |
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$ |
147.4 |
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$ |
226.9 |
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$ |
(79.5) |
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(35.0) |
% |
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Operating income margin |
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20.5 |
% |
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28.4 |
% |
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Volume (Forty-foot equivalent units (FEU)) (1) |
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Hawaii containers |
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36,300 |
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36,200 |
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100 |
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0.3 |
% |
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Alaska containers |
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23,100 |
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22,200 |
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900 |
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4.1 |
% |
|||
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China containers (2) |
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34,900 |
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40,000 |
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(5,100) |
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(12.8) |
% |
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Guam containers |
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4,600 |
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4,800 |
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(200) |
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(4.2) |
% |
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Other containers (3) |
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4,600 |
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4,700 |
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(100) |
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(2.1) |
% |
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| (1) | Approximate volume included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period. |
| (2) | Includes containers transshipped from other Asia origins. |
| (3) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue decreased $80.4 million, or 10.1 percent, during the three months ended September 30, 2025, compared with the three months ended September 30, 2024. The decrease was primarily due to lower freight rates and volume in China.
On a year-over-year FEU basis, Hawaii container volume increased 0.3 percent; Alaska volume increased 4.1 percent primarily due to one additional northbound sailing compared to the year ago period and higher AAX volume; China volume was 12.8 percent lower primarily due to the difficult environment marked by continued uncertainty and volatility arising from tariffs and global trade; Guam volume decreased 4.2 percent due to lower general demand; and Other containers volume decreased 2.1 percent.
Ocean Transportation operating income decreased $79.5 million, or 35.0 percent, during the three months ended September 30, 2025, compared with the three months ended September 30, 2024. The decrease was primarily due to lower freight rates and volume in China.
The Company's SSAT terminal joint venture investment contributed $9.3 million during the three months ended September 30, 2025, compared to a contribution of $6.9 million during the three months ended September 30, 2024. The increase was primarily driven by higher lift revenue.
Ocean Transportation Operating Results - Nine months ended September 30, 2025 compared with 2024:
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Nine Months Ended September 30, |
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(Dollars in millions) |
2025 |
2024 |
Change |
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Ocean Transportation revenue |
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$ |
2,031.3 |
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$ |
2,067.6 |
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$ |
(36.3) |
(1.8) |
% |
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Operating costs and expenses |
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(1,711.7) |
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(1,704.1) |
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(7.6) |
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0.4 |
% |
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Operating income |
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$ |
319.6 |
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$ |
363.5 |
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$ |
(43.9) |
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(12.1) |
% |
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Operating income margin |
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15.7 |
% |
17.6 |
% |
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Volume (Forty-foot equivalent units (FEU)) (1) |
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Hawaii containers |
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108,000 |
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105,900 |
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2,100 |
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2.0 |
% |
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Alaska containers |
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64,500 |
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62,500 |
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2,000 |
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3.2 |
% |
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China containers (2) |
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95,700 |
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106,700 |
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(11,000) |
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(10.3) |
% |
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Guam containers |
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13,300 |
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14,300 |
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(1,000) |
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(7.0) |
% |
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Other containers (3) |
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12,400 |
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12,700 |
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(300) |
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(2.4) |
% |
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| (1) | Approximate volume included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period. |
| (2) | Includes containers transshipped from other Asia origins. |
| (3) | Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. |
Ocean Transportation revenue decreased $36.3 million, or 1.8 percent, during the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The decrease was primarily due to lower volume in China, partially offset by higher freight rates in China.
On a year-over-year FEU basis, Hawaii container volume increased 2.0 percent primarily due to the dry-docking of a competitor's vessel in the first half of 2025; Alaska volume increased 3.2 percent due to higher AAX volume and retail-related demand, partially offset by two fewer northbound sailings compared to the year ago period; China volume decreased 10.3 percent due to the difficult environment marked by continued uncertainty and volatility arising from tariffs and global trade; Guam volume decreased 7.0 percent primarily due to lower general demand; and Other containers volume decreased 2.4 percent.
Ocean Transportation operating income decreased $43.9 million, or 12.1 percent, during the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The decrease was primarily due to lower volume in China and higher direct cargo expense, partially offset by higher freight rates in China.
The Company's SSAT terminal joint venture investment contributed $23.2 million during the nine months ended September 30, 2025, compared to a contribution of $8.5 million during the nine months ended September 30, 2024. The increase was primarily driven by higher lift volume.
Logistics Operating Results - Three months ended September 30, 2025 compared with 2024:
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Three Months Ended September 30, |
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(Dollars in millions) |
2025 |
2024 |
Change |
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Logistics revenue |
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$ |
161.8 |
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$ |
163.3 |
$ |
(1.5) |
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(0.9) |
% |
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Operating costs and expenses |
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(148.2) |
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(147.9) |
(0.3) |
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0.2 |
% |
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Operating income |
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$ |
13.6 |
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$ |
15.4 |
$ |
(1.8) |
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(11.7) |
% |
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Operating income margin |
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8.4 |
% |
|
9.4 |
% |
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Logistics revenue decreased $1.5 million, or 0.9 percent, during the three months ended September 30, 2025, compared with the three months ended September 30, 2024. The decrease was primarily due to lower revenue in supply chain management and transportation brokerage.
Logistics operating income decreased $1.8 million, or 11.7 percent, during the three months ended September 30, 2025, compared with the three months ended September 30, 2024. The decrease was primarily due to lower contributions from freight forwarding, transportation brokerage, and supply chain management.
Logistics Operating Results - Nine months ended September 30, 2025 compared with 2024:
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Nine Months Ended September 30, |
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(Dollars in millions) |
2025 |
2024 |
Change |
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Logistics revenue |
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$ |
461.3 |
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$ |
463.9 |
$ |
(2.6) |
(0.6) |
% |
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Operating costs and expenses |
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(424.8) |
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(423.6) |
(1.2) |
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0.3 |
% |
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Operating income |
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$ |
36.5 |
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$ |
40.3 |
$ |
(3.8) |
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(9.4) |
% |
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Operating income margin |
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7.9 |
% |
8.7 |
% |
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Logistics revenue decreased $2.6 million, or 0.6 percent, during the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The decrease was primarily due to lower revenue in transportation brokerage.
Logistics operating income decreased $3.8 million, or 9.4 percent, during the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The decrease was primarily due to lower contributions from freight forwarding and transportation brokerage.
LIQUIDITY AND CAPITAL RESOURCES
Sources of liquidity available to the Company as of September 30, 2025 compared to December 31, 2024 were as follows:
Cash and Cash Equivalents, Accounts Receivable and CCF:Cash and cash equivalents, accounts receivable and CCF as of September 30, 2025 compared to December 31, 2024 were as follows:
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September 30, |
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December 31, |
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(In millions) |
2025 |
2024 |
Change |
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Cash and cash equivalents |
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$ |
92.7 |
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$ |
266.8 |
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$ |
(174.1) |
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Accounts receivable, net (1) |
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$ |
278.1 |
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$ |
268.9 |
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$ |
9.2 |
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CCF - cash and cash equivalents, and investments account |
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$ |
627.9 |
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$ |
642.6 |
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$ |
(14.7) |
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| (1) | As of September 30, 2025 and December 31, 2024, $81.2 million and $178.1 million of eligible accounts receivable were assigned to the CCF, respectively. |
Changes in the Company's cash and cash equivalents for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, are as follows:
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Nine Months Ended September 30, |
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(In millions) |
2025 |
2024 |
Change |
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Net cash provided by operating activities (1) |
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$ |
370.2 |
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$ |
593.1 |
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$ |
(222.9) |
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Net cash used in investing activities (2) |
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(236.4) |
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(208.8) |
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(27.6) |
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Net cash used in financing activities (3) |
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(307.9) |
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(247.9) |
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(60.0) |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
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(174.1) |
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136.4 |
|
(310.5) |
|||
|
Cash and cash equivalents, and restricted cash, beginning of the period |
|
266.8 |
|
136.3 |
|
130.5 |
|||
|
Cash and cash equivalents, and restricted cash, end of the period |
|
$ |
92.7 |
|
$ |
272.7 |
|
$ |
(180.0) |
(1) Changes in net cash provided by operating activities:
Changes in net cash provided by operating activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, were due to the following:
|
|
|
|
|
|
(In millions) |
Change |
||
|
Net income |
|
$ |
(46.7) |
|
Non-cash depreciation and amortization |
|
10.5 |
|
|
Deferred income taxes |
|
|
(6.2) |
|
Other non-cash related changes, net |
|
|
0.3 |
|
Income and distribution from SSAT, net |
|
|
(28.7) |
|
Accounts receivable, net |
|
22.7 |
|
|
Prepaid expenses and other assets |
|
(132.2) |
|
|
Accounts payable, accruals and other liabilities |
|
(35.7) |
|
|
Operating lease assets and liabilities, net |
|
6.3 |
|
|
Non-cash amortization of operating lease right of use assets |
|
|
(3.2) |
|
Deferred dry-docking payments |
|
(17.8) |
|
|
Other long-term liabilities |
|
7.8 |
|
|
Total |
|
$ |
(222.9) |
Net income was $301.7 million for the nine months ended September 30, 2025, compared to $348.4 million for the nine months ended September 30, 2024. Income from SSAT was $23.2 million for the nine months ended September 30, 2025, compared to $8.5 million for the nine months ended September 30, 2024. The increase in income from SSAT was primarily due to higher lift volume during the nine months ended September 30, 2025, compared to the same prior year period. No cash distributions were received from SSAT during the nine months ended September 30, 2025. The Company received $14.0 million of cash distributions from SSAT during the nine months ended September 30, 2024. Cash distributions from SSAT are dependent on the level of cash available for distribution after SSAT's operational and capital needs. Changes in accounts receivable were primarily due to the timing of collections associated with those receivables. Changes in prepaid expenses and other assets were primarily due to a 2021 federal income tax refund of $118.6 million that was received by the Company during the nine months ended September 30, 2024. Changes in accounts payable, accruals and other liabilities were due to the timing of payments associated with those liabilities. Changes in operating lease assets and liabilities were primarily due to new operating lease additions and renewals, offset by operating lease payments and terminations. Deferred dry-docking payments for the nine months ended September 30, 2025 were $38.0 million, compared to $20.2 million for the nine months ended September 30, 2024. Changes in deferred dry-docking are primarily due to the timing of vessel dry-dock related activities and the payments associated with those activities.
(2) Changes in net cash used in investing activities:
Changes in net cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, were due to the following:
|
|
|
|
|
|
|
|
|
|
|
(In millions) |
Change |
||
|
Cash deposits and interest into the CCF |
|
$ |
(51.0) |
|
Withdrawals from CCF |
|
|
100.7 |
|
Vessel construction expenditures |
|
|
(101.9) |
|
Capital expenditures (excluding vessel construction expenditures) |
|
|
27.9 |
|
Proceeds from disposal of property and equipment, net, and other |
|
(3.3) |
|
|
Total |
|
$ |
(27.6) |
The Company deposited $114.6 million of cash and interest into the CCF and made $136.5 million of qualifying withdrawal payments out of the CCF during the nine months ended September 30, 2025. The Company deposited $63.6 million into the CCF and made $35.8 million of qualifying withdrawal payments out of the CCF during the nine months ended September 30, 2024. Qualifying withdrawal payments relate to milestone payments for the construction of three new Aloha Class vessels. Capital expenditures (excluding vessel construction expenditures) were $117.0 million for the nine months ended September 30, 2025, compared to $144.9 million for the nine months ended
September 30, 2024. Capital expenditures (excluding vessel construction expenditures) primarily relate to vessel related expenditures, the acquisition of containers, chassis and other equipment, and expenditures on other capital related projects. The decrease in capital expenditures for the nine months ended September 30, 2025, compared to the same prior year period primarily related to the timing of when vessel maintenance activities are performed and when other capital related projects are incurred.
(3) Changes in net cash used in financing activities:
Changes in net cash used in financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, were due to the following:
|
|
|
|
|
|
(In millions) |
Change |
||
|
Repurchase of Matson common stock |
|
$ |
(58.4) |
|
Shares withheld for taxes related to settlement of restricted stock units |
|
0.7 |
|
|
Dividends paid |
|
|
(0.2) |
|
Payments of deferred loan fees |
|
(2.1) |
|
|
Total |
|
$ |
(60.0) |
During the nine months ended September 30, 2025, the Company paid $225.8 million to repurchase Matson common stock, compared to $167.4 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company paid $30.0 million in scheduled fixed interest debt payments, compared to $30.0 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company paid $16.3 million in withholding taxes related to vested restricted stock units, compared to $17.0 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company paid $33.7 million in dividends, compared to $33.5 million during the nine months ended September 30, 2024. The increase in dividend payments was due to an increase in dividends declared per share of common stock by the Company, offset by a reduction in common stock outstanding. During the three and nine months ended September 30, 2025, the Company paid $2.1 million of deferred loan fees associated with the amendment of its revolving credit facility and private placement term loans. No deferred loan fees were paid during the three and nine months ended September 30, 2024.
Working Capital:The Company had a working capital deficit of $93.5 million at September 30, 2025, compared to a working capital surplus of $49.2 million at December 31, 2024. Working capital is primarily impacted by the amount of net cash provided by operating activities, the amount of capital expenditures, the timing of collections associated with accounts receivable, prepaid expenses and other assets, and by the amount and timing of payments associated with accounts payable, accruals, income taxes and other liabilities. The decrease in the Company's working capital at September 30, 2025, compared to December 31, 2024 is primarily due to $136.5 million of cash withdrawn from cash and cash equivalent and deposited into the CCF during the nine months ended September 30, 2025, compared to $35.8 million for the nine months ended September 30, 2024.
Capital Construction Fund: The Company's CCF is described in Note 7 of Part I, Item 1 above.CCF cash and cash equivalents, and CCF investments as of September 30, 2025 and December 31, 2024 are as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
||
|
(In millions) |
2025 |
2024 |
||||
|
CCF Cash and cash equivalents |
|
$ |
376.7 |
|
$ |
230.7 |
|
CCF Investments |
|
|
251.2 |
|
|
411.9 |
|
Total |
|
$ |
627.9 |
|
$ |
642.6 |
CCF cash and cash equivalents, and CCF investments are intended to fund milestone payments for the construction of three new Aloha Class vessels.
Debt: The Company's debt is described in Note 8 of Part I, Item 1 above. The Company utilizes a mix of fixed and variable debt for liquidity and to fund the Company's operations. Total Debt as of September 30, 2025 and December 31, 2024 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
||
|
(In millions) |
|
2025 |
|
2024 |
|
Change |
|
|||
|
Variable interest debt - Revolving credit facility |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
Fixed interest debt - Title XI debt and private placement term loans |
|
|
370.9 |
|
|
400.9 |
|
|
(30.0) |
|
|
Total Debt (excluding deferred loan fees) |
|
$ |
370.9 |
|
$ |
400.9 |
|
$ |
(30.0) |
|
Total Debt decreased by $30.0 million during the nine months ended September 30, 2025, compared to December 31, 2024, due to scheduled fixed interest debt repayments.
As described in Note 8 of Part 1, Item 1 above, on July 23, 2025, the Company entered into a Third Amended and Restated Credit Agreement which provides for a five-year revolving credit facility and $550 million in loan commitments, with an uncommitted $300 million increase option. The Company reduced the size of its credit facility from $650 million to $550 million due to: (i) the nearly fully-funded status of the new Aloha Class vessel build program; and (ii) the Company's expected lower level of capital needs for the remainder of the decade due in part to its next Jones Act build cycle which is not anticipated until the mid-2030s.
As of September 30, 2025, the Company had $544.0 million of remaining borrowing availability under the revolving credit facility.
Capital Expenditures:Except as described below, during the nine months ended September 30, 2025, there were no material changes to the Company's expected capital expenditures for the years ending December 31, 2025 and 2026 that are described in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
During the nine months ended September 30, 2025, the Company paid $136.5 million in milestone payments under the vessel construction agreements, compared to $35.8 million for the nine months ended September 30, 2024. The following represents the estimated timing of future milestone payments under the vessel construction agreements as of September 30, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid |
|
Future Milestone Payments |
|
|
|
||||||||||||||
|
Vessel Construction Obligations |
As of |
Remainder of |
2026 |
2027 |
2028 |
Thereafter |
Total |
||||||||||||||
|
Three Aloha Class Containerships |
|
$ |
325.9 |
|
$ |
100.8 |
|
$ |
367.9 |
|
$ |
186.2 |
|
$ |
22.3 |
|
$ |
2.9 |
|
$ |
1,006.0 |
The Company intends to use the CCF cash and cash equivalents, and CCF investments to fund future milestone progress payments for the construction of three new Aloha Class vessels.
Repurchase of Shares:During the three and nine months ended September 30, 2025, the Company repurchased approximately 0.6 million and 2.0 million shares for a total cost of $66.4 million and $229.3 million, respectively. During the three and nine months ended September 30, 2024, the Company repurchased approximately 0.4 million and 1.4 million shares for a total cost of $48.1 million and $169.2 million, respectively. The amount of shares repurchased by the Company during any period is dependent on the amount of available cash and cash equivalents, the Company's stock price and other factors. The maximum number of remaining shares that may be repurchased under the Company's share repurchase program was approximately 1.9 million shares at September 30, 2025.
Other Material Cash Requirements:There were no other material changes during the quarter ended September 30, 2025 to the Company's other cash requirements that are described in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no changes during this quarter to the Company's critical accounting policies and estimates as discussed in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
OTHER MATTERS
Dividends:The Company's third quarter 2025 cash dividend of $0.36 per share was paid on September 4, 2025. On October 23, 2025, the Company's Board of Directors declared a cash dividend of $0.36 per share payable on December 4, 2025 to shareholders of record on November 6, 2025.
New Accounting Pronouncements: See Note 2 of Part I, Item 1 above for information on new accounting pronouncements.
Matson Inc. published this content on November 05, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 05, 2025 at 11:11 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]