American Commercial Lines Inc. yesterday announced results for the quarter and nine months ended September 30, 2010. Revenues for the quarter were $207.3 million, a 0.3% decrease compared with $207.9 million for the third quarter of 2009. Transportation revenues increased by $21.6 million or 15.2% on higher grain pricing and improved sales mix, while manufacturing revenue fell $22.7 million or 35.3% primarily due to lower volumes. The Company's current quarter income from continuing operations of $5.1 million, or $0.39 per diluted share, compared to a loss from continuing operations of $8.8 million or $0.69 per share for the third quarter of 2009. The improved year-over-year quarterly income from continuing operations was driven by stronger transportation segment results and lower interest costs on lower outstanding debt balances, partially offset by lower gains from asset management actions and manufacturing segment results. Results for the third quarter of 2009 included after-tax debt retirement expenses of $11.3 million or $0.89 per share and after-tax manufacturing segment customer contract dispute charges of $1.5 million or $0.12 per share.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing operations for the quarter was $31.7 million with an EBITDA margin of 15.3%, compared to $27.5 million for the third quarter of 2009 with an EBITDA margin of 13.2%. The attachment to this press release reconciles net income to EBITDA.
Commenting on third quarter results, Michael P. Ryan, President and Chief Executive Officer, stated, "The third quarter's 23.5% comparative improvement in grain pricing, and a modest return of our volumes in bulk commodities and in liquid shipments, helped drive a $10.8 million improvement in our transportation operating income. This improvement also includes $10.1 million in lower net asset management gains than in the prior year quarter. For the last two and a half years we have executed our strategic initiatives, focused on improving our products and services while reducing costs. We have made significant operating improvements resulting in higher efficiency and better products for our customers. In the first three quarters of 2010 we invested in our business while continuing to reduce our debt levels. We continue to be committed to building and maintaining a transportation and manufacturing program which satisfies our customers' needs. We recently announced a merger agreement with an affiliate of Platinum Equity. While this transaction is pending and into the future, we expect to continue to implement our strategic initiatives and remain in a position to provide our shippers with competitive freight transportation options far into the future."
The increase in transportation segment revenues was driven by affreightment revenue which increased $18.3 million or 18.4%. This increase was attributable to 16.7% higher per ton-mile average fuel neutral pricing as a result of an improved mix of commodities shipped and 23.5% higher grain pricing or $7.2 million in incremental grain affreightment revenue, partially offset by an 1.5% overall decline in overall affreightment ton-mile volume. Total affreightment volume measured in ton-miles declined slightly in the third quarter of 2010 to 7.8 billion compared to 7.9 billion in the same period of the prior year. Non-affreightment revenues increased by $3.3 million, or 7.7%, primarily due to higher demurrage, scrapping and charter/day rate revenue. The improved mix of commodities shipped resulted from volume increases in higher revenue per ton-mile liquid affreightment of 16.1% and dry bulk affreightment of 7.4%. This improved mix was partially offset by volume decreases in lower rate coal, which declined 16.1%.
The transportation segment's operating income of $20.7 million in the third quarter of 2010 was an improvement of $10.8 million from the segment's operating income in the third quarter of 2009. The improved results were driven by the higher revenue level and improvement in the operating ratio, the ratio of all expenses to revenue. The operating ratio improved by 5.7 points to 87.3%. The improved ratio was driven by the higher affreightment revenues, consistent operating costs and lower selling, general and administrative expenses ("SG&A") partially offset by lower asset management gains from the scrapping and sale of surplus assets. Asset management gains were $10.1 million lower primarily due to the significant gain on three boats sold in the prior year third quarter. SG&A expenses decreased $4.2 million due primarily to lower salaries and fringe benefits, reductions in new and developed insurance claims, lower bad debts and lower consulting and professional fees, partially offset by higher incentive compensation and medical claims. Despite an increase of 8.6% in per gallon fuel costs and the lower asset management gains in the 2010 quarter, total non-SG&A operating costs as a percent of sales declined by 1.8 points.
Manufacturing revenues were $41.5 million in the third quarter of 2010 compared to $64.2 million in the third quarter of 2009. Seven fewer liquid tank barges and one fewer ocean-going liquid tank barge were sold in the third quarter of 2010 than in the same period of 2009. The revenue impact of the lower number of liquid barges was partially offset by an increase of seven dry hopper barges and 15 deck barges sold in the current year quarter. In the third quarter of 2010 the manufacturing segment sold 60 dry hopper barges, 15 deck barges and two liquid tank barges. There was no delivery of barges for internal use in the current year quarter. The manufacturing segment had an operating loss of $0.6 million in the third quarter of 2010 due to projected contract losses on a forty deck barge contract, driven primarily by labor hours which exceed bid specifications. A $3.3 million loss representing the sum of projected losses on the remaining deck barges and the incurred losses on deck barges completed in the quarter drove the segment's loss, more than offsetting the margin attributable to remaining sales in the quarter.
Results for the Nine Months ended September 30, 2010
Revenues for the nine months ended September 30, 2010 were $519.9 million, a 16.0% decrease compared with $619.1 million for the first nine months of 2009. Manufacturing revenues declined $105.5 million or 61.9%. Transportation revenue increased by $5.6 million or 1.3%. The income from continuing operations of $0.2 million, or $0.02 per diluted share, represented an improvement of $16.4 million compared to a loss from continuing operations of $16.2 million or $1.27 per diluted share for the nine months ended September 30, 2009. The improved results for the nine months ended September 30, 2010 compared to the same period of the prior year were driven by stronger transportation segment results, reduced interest costs on lower outstanding debt balances and the impact of the prior year non-comparable charges discussed below, largely offset by lower manufacturing segment results and lower gains from asset management actions. Asset management gains were $6.5 million lower primarily due to the relative gain on boats sold and differences in barge scrapping activity in each period.
Results for the nine months ended September 30, 2009, included after-tax debt retirement costs of $11.3 million or $0.89 per share, after-tax severance and Houston sales office closure expenses of $3.1 million or $0.24 per share, an after-tax charge of $1.5 million or $0.12 per share for a manufacturing segment customer dispute and an after tax charge of $0.4 million or $0.04 per share related to a customer's bankruptcy filing. EBITDA from continuing operations for the nine months ended September 30, 2010 was $65.9 million with an EBITDA margin of 12.7%, compared to $62.6 million with an EBITDA margin of 10.1% for the comparable nine month period in 2009.
The $21.6 million increase in transportation segment revenues in the three months ended September 30, 2010, drove transportation segment revenues $5.6 million higher than the nine months ended September 30, 2009. For the nine months ended September 30, 2010, affreightment revenues increased $12.0 million or 3.9% and non-affreightment revenues decreased $6.4 million or 4.7%. The decrease in non-affreightment was primarily due to lower towing and demurrage revenue. The increase in affreightment revenue was due to an 11.7% improvement in fuel neutral rate per ton mile due to improved sales mix and 6.8% higher grain pricing, partially offset by a 10.2% decline in ton-mile volumes. The improved sales mix resulted from volume increases in the higher rate per ton mile liquids and dry bulk markets of 17.2% and 3.1%, respectively, while volumes decreased in our lower rate grain and coal markets by 15.0% and 23.3%, respectively. Total affreightment ton-miles declined to 22.5 billion for the nine months ended September 30, 2010 compared to 25.0 billion in the prior year period, due to the 3.0 billion ton-mile decline in grain and coal.
The transportation segment's operating income of $30.7 million in the nine months ended September 30, 2010, was an improvement of $27.4 million from the segment's operating income in the nine months ended September 30, 2009. The improved results were driven by an improvement in the operating ratio, of 6.0 points to 93.2%, primarily due to higher affreightment revenues, cost controls related to SG&A and other operating costs, as well as the impact of the non-comparable 2009 charges. SG&A expenses decreased primarily due to reasons enumerated in the quarterly discussion above. Despite increases in per gallon fuel costs and the lower asset management gains, total non-SG&A operating costs as a percent of sales declined by 1.7 points.
Manufacturing revenues were $64.8 million in the nine months ended September 30, 2010, compared to $170.3 million in the nine months ended September 30, 2009 due primarily to three fewer dry hoppers and 32 fewer liquid tank barges, one fewer ocean-going tank barge sold in the current year period, partially offset by 15 more deck barges sold in the current year. The manufacturing segment had an operating loss of $0.6 million in the nine months ended September 30, 2010, primarily driven by the projected and incurred losses on a forty deck barge contract discussed in the quarterly discussion above. These costs and the costs related to the month-long labor stoppage in April 2010 more than offset the margin attributable to remaining sales in the nine months ended September 30, 2010. In the nine months ended September 30, 2009, the manufacturing segment's operating margin was 11.1% with $18.8 million of operating income driven by the higher level of external sales in that period.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing operations for the quarter was $31.7 million with an EBITDA margin of 15.3%, compared to $27.5 million for the third quarter of 2009 with an EBITDA margin of 13.2%. The attachment to this press release reconciles net income to EBITDA.
Commenting on third quarter results, Michael P. Ryan, President and Chief Executive Officer, stated, "The third quarter's 23.5% comparative improvement in grain pricing, and a modest return of our volumes in bulk commodities and in liquid shipments, helped drive a $10.8 million improvement in our transportation operating income. This improvement also includes $10.1 million in lower net asset management gains than in the prior year quarter. For the last two and a half years we have executed our strategic initiatives, focused on improving our products and services while reducing costs. We have made significant operating improvements resulting in higher efficiency and better products for our customers. In the first three quarters of 2010 we invested in our business while continuing to reduce our debt levels. We continue to be committed to building and maintaining a transportation and manufacturing program which satisfies our customers' needs. We recently announced a merger agreement with an affiliate of Platinum Equity. While this transaction is pending and into the future, we expect to continue to implement our strategic initiatives and remain in a position to provide our shippers with competitive freight transportation options far into the future."
The increase in transportation segment revenues was driven by affreightment revenue which increased $18.3 million or 18.4%. This increase was attributable to 16.7% higher per ton-mile average fuel neutral pricing as a result of an improved mix of commodities shipped and 23.5% higher grain pricing or $7.2 million in incremental grain affreightment revenue, partially offset by an 1.5% overall decline in overall affreightment ton-mile volume. Total affreightment volume measured in ton-miles declined slightly in the third quarter of 2010 to 7.8 billion compared to 7.9 billion in the same period of the prior year. Non-affreightment revenues increased by $3.3 million, or 7.7%, primarily due to higher demurrage, scrapping and charter/day rate revenue. The improved mix of commodities shipped resulted from volume increases in higher revenue per ton-mile liquid affreightment of 16.1% and dry bulk affreightment of 7.4%. This improved mix was partially offset by volume decreases in lower rate coal, which declined 16.1%.
The transportation segment's operating income of $20.7 million in the third quarter of 2010 was an improvement of $10.8 million from the segment's operating income in the third quarter of 2009. The improved results were driven by the higher revenue level and improvement in the operating ratio, the ratio of all expenses to revenue. The operating ratio improved by 5.7 points to 87.3%. The improved ratio was driven by the higher affreightment revenues, consistent operating costs and lower selling, general and administrative expenses ("SG&A") partially offset by lower asset management gains from the scrapping and sale of surplus assets. Asset management gains were $10.1 million lower primarily due to the significant gain on three boats sold in the prior year third quarter. SG&A expenses decreased $4.2 million due primarily to lower salaries and fringe benefits, reductions in new and developed insurance claims, lower bad debts and lower consulting and professional fees, partially offset by higher incentive compensation and medical claims. Despite an increase of 8.6% in per gallon fuel costs and the lower asset management gains in the 2010 quarter, total non-SG&A operating costs as a percent of sales declined by 1.8 points.
Manufacturing revenues were $41.5 million in the third quarter of 2010 compared to $64.2 million in the third quarter of 2009. Seven fewer liquid tank barges and one fewer ocean-going liquid tank barge were sold in the third quarter of 2010 than in the same period of 2009. The revenue impact of the lower number of liquid barges was partially offset by an increase of seven dry hopper barges and 15 deck barges sold in the current year quarter. In the third quarter of 2010 the manufacturing segment sold 60 dry hopper barges, 15 deck barges and two liquid tank barges. There was no delivery of barges for internal use in the current year quarter. The manufacturing segment had an operating loss of $0.6 million in the third quarter of 2010 due to projected contract losses on a forty deck barge contract, driven primarily by labor hours which exceed bid specifications. A $3.3 million loss representing the sum of projected losses on the remaining deck barges and the incurred losses on deck barges completed in the quarter drove the segment's loss, more than offsetting the margin attributable to remaining sales in the quarter.
Results for the Nine Months ended September 30, 2010
Revenues for the nine months ended September 30, 2010 were $519.9 million, a 16.0% decrease compared with $619.1 million for the first nine months of 2009. Manufacturing revenues declined $105.5 million or 61.9%. Transportation revenue increased by $5.6 million or 1.3%. The income from continuing operations of $0.2 million, or $0.02 per diluted share, represented an improvement of $16.4 million compared to a loss from continuing operations of $16.2 million or $1.27 per diluted share for the nine months ended September 30, 2009. The improved results for the nine months ended September 30, 2010 compared to the same period of the prior year were driven by stronger transportation segment results, reduced interest costs on lower outstanding debt balances and the impact of the prior year non-comparable charges discussed below, largely offset by lower manufacturing segment results and lower gains from asset management actions. Asset management gains were $6.5 million lower primarily due to the relative gain on boats sold and differences in barge scrapping activity in each period.
Results for the nine months ended September 30, 2009, included after-tax debt retirement costs of $11.3 million or $0.89 per share, after-tax severance and Houston sales office closure expenses of $3.1 million or $0.24 per share, an after-tax charge of $1.5 million or $0.12 per share for a manufacturing segment customer dispute and an after tax charge of $0.4 million or $0.04 per share related to a customer's bankruptcy filing. EBITDA from continuing operations for the nine months ended September 30, 2010 was $65.9 million with an EBITDA margin of 12.7%, compared to $62.6 million with an EBITDA margin of 10.1% for the comparable nine month period in 2009.
The $21.6 million increase in transportation segment revenues in the three months ended September 30, 2010, drove transportation segment revenues $5.6 million higher than the nine months ended September 30, 2009. For the nine months ended September 30, 2010, affreightment revenues increased $12.0 million or 3.9% and non-affreightment revenues decreased $6.4 million or 4.7%. The decrease in non-affreightment was primarily due to lower towing and demurrage revenue. The increase in affreightment revenue was due to an 11.7% improvement in fuel neutral rate per ton mile due to improved sales mix and 6.8% higher grain pricing, partially offset by a 10.2% decline in ton-mile volumes. The improved sales mix resulted from volume increases in the higher rate per ton mile liquids and dry bulk markets of 17.2% and 3.1%, respectively, while volumes decreased in our lower rate grain and coal markets by 15.0% and 23.3%, respectively. Total affreightment ton-miles declined to 22.5 billion for the nine months ended September 30, 2010 compared to 25.0 billion in the prior year period, due to the 3.0 billion ton-mile decline in grain and coal.
The transportation segment's operating income of $30.7 million in the nine months ended September 30, 2010, was an improvement of $27.4 million from the segment's operating income in the nine months ended September 30, 2009. The improved results were driven by an improvement in the operating ratio, of 6.0 points to 93.2%, primarily due to higher affreightment revenues, cost controls related to SG&A and other operating costs, as well as the impact of the non-comparable 2009 charges. SG&A expenses decreased primarily due to reasons enumerated in the quarterly discussion above. Despite increases in per gallon fuel costs and the lower asset management gains, total non-SG&A operating costs as a percent of sales declined by 1.7 points.
Manufacturing revenues were $64.8 million in the nine months ended September 30, 2010, compared to $170.3 million in the nine months ended September 30, 2009 due primarily to three fewer dry hoppers and 32 fewer liquid tank barges, one fewer ocean-going tank barge sold in the current year period, partially offset by 15 more deck barges sold in the current year. The manufacturing segment had an operating loss of $0.6 million in the nine months ended September 30, 2010, primarily driven by the projected and incurred losses on a forty deck barge contract discussed in the quarterly discussion above. These costs and the costs related to the month-long labor stoppage in April 2010 more than offset the margin attributable to remaining sales in the nine months ended September 30, 2010. In the nine months ended September 30, 2009, the manufacturing segment's operating margin was 11.1% with $18.8 million of operating income driven by the higher level of external sales in that period.