ATHENS, Greece, Aug. 5, 2019 /PRNewswire/ -- Danaos
Corporation ("Danaos") (NYSE: DAC), one of the world's largest
independent owners of containerships, today reported unaudited
results for the period ended June 30,
2019.
Highlights for the Second Quarter and Half Year Ended
June 30, 2019:
- Adjusted net income1 of $34.3 million, or $2.24 per share2, for the three months
ended June 30, 2019 compared to
$29.2 million, or $3.72 per share2, for the three months
ended June 30, 2018, an increase of
17.5%. Adjusted net income1 of $72.8 million, or $4.77 per share2, for the six months
ended June 30, 2019 compared to
$57.1 million, or $7.28 per share2, for the six months
ended June 30, 2018, an increase of
27.5%.
- Operating revenues of $112.3
million for the three months ended June 30, 2019 compared to $113.4 million for the three months ended
June 30, 2018, a decrease of 1.0%.
Operating revenues of $225.2 million
for the six months ended June 30,
2019 compared to $225.3
million for the six months ended June
30, 2018.
- Adjusted EBITDA1 of $75.6 million for the three months ended
June 30, 2019 compared to
$78.3 million for the three months
ended June 30, 2018, a decrease of
3.4%. Adjusted EBITDA1 of $153.1
million for the six months ended June
30, 2019 compared to $154.9
million for the six months ended June
30, 2018, a decrease of 1.2%.
- Total contracted operating revenues were $1.5 billion as of June
30, 2019, with charters extending through 2028 and remaining
average contracted charter duration of 4.5 years, weighted by
aggregate contracted charter hire.
- Charter coverage of 87% for the next 12 months based on
current operating revenues and 71% in terms of contracted operating
days.
- Effected 1:14 reverse stock split on May 2, 2019, which cured the previously announced
NYSE deficiency caused by our stock trading below $1.
- Concluded sale and leaseback transactions for two 13,100 TEU
containerships on April 12, 2019,
resulting in net proceeds of $144.8
million, which were used to repay credit facilities secured
by mortgages on the vessels.
Three and Six
Months Ended June 30, 2019
|
Financial Summary
- Unaudited
|
(Expressed
in thousands of United States dollars, except per share
amounts)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$112,319
|
|
$113,466
|
|
$225,210
|
|
$225,320
|
Net income
|
$30,138
|
|
$5,838
|
|
$63,581
|
|
$20,830
|
Adjusted net
income1
|
$34,255
|
|
$29,178
|
|
$72,824
|
|
$57,129
|
Earnings per share,
diluted2
|
$1.97
|
|
$0.74
|
|
$4.16
|
|
$2.66
|
Adjusted earnings per
share, diluted1,2
|
$2.24
|
|
$3.72
|
|
$4.77
|
|
$7.28
|
Diluted weighted
average number of shares (in thousands)2
|
15,314
|
|
7,843
|
|
15,276
|
|
7,843
|
Adjusted
EBITDA1
|
$75,581
|
|
$78,294
|
|
$153,119
|
|
$154,932
|
|
|
|
|
|
|
|
|
|
1 Adjusted net income,
adjusted earnings per share and adjusted EBITDA are non-GAAP
measures. Refer to the
reconciliation of net income to adjusted net income
and net income to adjusted EBITDA.
|
2 Earnings per share and
weighted average number of shares give retroactive effect to the
reverse stock split of
1-for-14 implemented on May 2, 2019, for all periods
presented.
|
Danaos' CEO Dr. John Coustas
commented:
"The Company's adjusted net income of $34.3 million, or $2.24 per share, for the second quarter of 2019
increased by $5.1 million, or 17.5%,
when compared to the second quarter of 2018. This improvement was
primarily the result of a $4.4
million decrease in net finance expenses and a $2 million decrease in total operating costs,
partially offset by a $1.1 million
decrease in operating revenues mainly due to the re-chartering of
certain of our vessels that concluded long-term charters over the
last 12 months and were re-deployed at lower rates during the
quarter. Adjusted EBITDA for the second quarter of 2019 was
$75.6 million, $2.7 million lower than the second quarter of
2018.
The charter market for 5,500+ vessels TEU remained strong over
the last three months, and the market for Panamax vessels is
improving due to the lack of availability of larger vessels. Rates
on smaller vessels remain stable albeit at relatively low levels.
We anticipate that the implementation of IMO 2020 sulphur emissions
regulations will result in a healthy charter market for the larger
vessels through 2020 due to downtime related to scrubber retrofits
and reduced sailing speeds that a high fuel price environment are
expected to bring about. Escalations in trade tensions between the
U.S. and China persist, and
uncertainty on the outcome and the impact on trade flows has
discouraged market participants from placing newbuilding orders.
Collectively, these factors are expected to result in positive
vessel supply side effects, which should support the strengthening
of the charter market going forward.
Our total contracted revenues as of June
30, 2019 were $1.5 billion,
and we maintain our high charter contract coverage of 87% in terms
of operating revenues and 71% in terms of operating days over the
next 12 months. This insulates us from near-term market
weakness.
Danaos continues to be a leader in the container shipping
industry on the back of a solid track record of operational
excellence and technological innovation that allows us to
continually deliver high quality service to our customers. At the
same time, the recently concluded refinancing transaction further
enhances our ability to pursue growth opportunities and our goal of
delivering value to our shareholders."
Three months ended June 30,
2019 compared to the three months ended June 30, 2018
During the three months ended June 30,
2019 and June 30, 2018, Danaos
had an average of 55 containerships. Our fleet utilization for the
three months ended June 30, 2019 was
99.4% compared to 96.1% for the three months ended June 30, 2018.
Our adjusted net income amounted to $34.3
million, or $2.24 per share,
for the three months ended June 30,
2019 compared to $29.2
million, or $3.72 per share,
for the three months ended June 30,
2018 (after giving retroactive effect to the reverse stock
split of 1-for-14 implemented on May 2,
2019). We have adjusted our net income in the three months
ended June 30, 2019 for non-cash fees
amortization and accrued financing fees of $4.1 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $5.1 million in
adjusted net income for the three months ended June 30, 2019 compared to the three months ended
June 30, 2018 is attributable mainly
to a $4.4 million decrease in net
finance expenses and a $2.0 million
decrease in total operating expenses, which were partially offset
by a $1.1 million decrease in
operating revenues and a $0.2 million
decrease in the operating performance of our equity investment in
Gemini.
On a non-adjusted basis, our net income amounted to $30.1 million, or $1.97 earnings per diluted share, for the three
months ended June 30, 2019 compared
to net income of $5.8 million, or
$0.74 earnings per diluted share, for
the three months ended June 30, 2018
(after giving retroactive effect to the reverse stock split of
1-for-14).
Operating Revenues
Operating revenues decreased
by 1.0%, or $1.1 million, to
$112.3 million in the three months
ended June 30, 2019 from $113.4 million in the three months ended
June 30, 2018.
Operating revenues for the three months ended June 30, 2019 reflect:
- a $4.1 million decrease in
revenues in the three months ended June 30,
2019 compared to the three months ended June 30, 2018, mainly due to the re-chartering of
certain of our vessels that concluded long-term charters over the
last twelve months and were re-deployed at lower spot rates in the
three months ended June 30, 2019;
and
- a $3.0 million increase in
revenues due to higher fleet utilization of our vessels in the
three months ended June 30, 2019
compared to the three months ended June 30,
2018.
Vessel Operating Expenses
Vessel operating
expenses increased by 2.2%, or $0.6
million, to $27.3 million
in the three months ended June 30,
2019 from $26.7 million
in the three months ended June 30,
2018. The average daily operating cost per vessel for
vessels on time charter was $5,884
per day for the three months ended June 30,
2019 compared to $5,762 per
day for the three months ended June 30,
2018. Management believes that our daily operating cost
ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation
& Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by
10.1%, or $2.7 million, to
$24.0 million in the three months
ended June 30, 2019 from $26.7 million in the three months ended
June 30, 2018 mainly due to decreased
depreciation expense for ten vessels for which we recorded an
impairment charge on December 31,
2018.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and
special survey costs decreased by $0.3
million, to $2.1 million in
the three months ended June 30, 2019
from $2.4 million in the three months
ended June 30, 2018. The decrease was
mainly due to a decreased number of vessels dry-docked.
General and Administrative Expenses
General and
administrative expenses increased by $0.7
million, to $6.5 million in
the three months ended June 30, 2019,
from $5.8 million in the three months
ended June 30, 2018. The increase was
mainly due to increased share based compensation.
Other Operating Expenses
Other Operating
Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by
$0.5 million, to $2.7 million in the three months ended
June 30, 2019 from $3.2 million in the three months ended
June 30, 2018.
Interest Expense and Interest Income
Interest
expense decreased by 18.3%, or $4.2
million, to $18.8 million
in the three months ended June 30,
2019 from $23.0 million in the
three months ended June 30, 2018. The
decrease in interest expense is attributable to:
(i) a $11.5 million decrease in
interest expense on two of our credit facilities for which we
recognized an interest expense accrual in Q3 2018, which has
been classified on our balance sheet under "Accumulated accrued
interest" and represents future interest expense for the relevant
facilities that has been recognized in advance as a result of the
application of Troubled Debt Restructuring ("TDR") accounting in
connection with our 2018 debt refinancing;
(ii) a $5.8 million increase in
interest expense due to an increase in debt service cost by
approximately 2.8%, partially offset by a $644.4 million decrease in our average debt
(including leaseback obligations), to $1,630.7 million in the three months ended
June 30, 2019, compared to
$2,275.1 million in the three months
ended June 30, 2018; and
(iii) a $1.5 million increase in
the amortization of deferred finance costs and debt discount
related to our 2018 debt refinancing.
As of June 30, 2019, our bank debt
outstanding, gross of deferred finance costs, was $1,470.6 million and leaseback obligation was
$144.4 million compared to bank debt
of $2,293.9 million outstanding as of
June 30, 2018.
Interest income increased by $0.2
million to $1.6 million in the
three months ended June 30, 2019
compared to $1.4 million in the three
months ended June 30, 2018.
Other finance costs, net
Other finance costs,
net increased by $0.8 million to
$1.8 million in the three months
ended June 30, 2019 compared to
$1.0 million in the three months
ended June 30, 2018 mainly due to
increased finance costs, which were partially offset by decreased
exit fees expenses.
Equity income/(loss) on investments
Equity
income/(loss) on investments decreased by $0.2 million to nil in the three months ended
June 30, 2019 compared to equity
income on investments amounting to $0.2
million in the three months ended June 30, 2018 and relates to the operating
performance of Gemini Shipholdings Corporation ("Gemini"), in which
the Company has a 49% shareholding interest.
Loss on derivatives
Amortization of deferred
realized losses on interest rate swaps remained stable at
$0.9 million in each of the three
month periods ended June 30, 2019 and
2018.
Other income/(expenses), net
Other
income/(expenses), net was $0.4
million in income in the three months ended June 30, 2019 compared to $19.5 million in expenses in the three months
ended June 30, 2018 mainly due to
$20.1 million of refinancing-related
professional fees in the prior period.
Adjusted EBITDA
Adjusted EBITDA decreased by
3.4%, or $2.7 million, to
$75.6 million in the three
months ended June 30, 2019 from
$78.3 million in the three months
ended June 30, 2018. As described
above, the decrease is mainly attributable to a $1.4 million increase in net finance expenses, a
$1.1 million decrease in operating
revenues and a $0.2 million decrease
in operating performance on our equity investments. Adjusted EBITDA
for the three months ended June 30,
2019 is adjusted for stock based compensation of
$1.0 million. Tables reconciling
Adjusted EBITDA to Net Income can be found at the end of this
earnings release.
Six months ended June 30, 2019
compared to the six months ended June 30,
2018
During the six months ended June 30,
2019 and June 30, 2018, Danaos
had an average of 55 containerships. Our fleet utilization for the
six months ended June 30, 2019 was
98.8% compared to 95.9% for the six months ended June 30, 2018.
Our adjusted net income amounted to $72.8
million, or $4.77 per share,
for the six months ended June 30,
2019 compared to $57.1
million, or $7.28 per share,
for the six months ended June 30,
2018 (after giving retroactive effect to the reverse stock
split of 1-for-14 implemented on May 2,
2019). We have adjusted our net income in the six months
ended June 30, 2019 for non-cash fees
amortization and accrued financing fees of $9.2 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $15.7 million in
adjusted net income for the six months ended June 30, 2019 compared to the six months ended
June 30, 2018 is attributable to a
$12.0 million decrease in net finance
expenses and a $4.0 million decrease
in total operating expenses, which were partially offset by a
$0.2 million decrease in the
operating performance of our equity investment in Gemini and a
$0.1 million decrease in the
operating revenue.
On a non-adjusted basis, our net income amounted to $63.6 million, or $4.16 per diluted share, for the six months ended
June 30, 2019 compared to net income
of $20.8 million, or $2.66 per diluted share, for the six months ended
June 30, 2018 (after giving
retroactive effect to the reverse stock split of 1-for-14).
Operating Revenues
Operating revenues decreased
by $0.1 million, to $225.2 million in the six months ended
June 30, 2019 from $225.3 million in the six months ended
June 30, 2018.
Operating revenues for the six months ended June 30, 2019 reflect:
- a $4.0 million decrease in
revenues in the six months ended June 30,
2019 compared to the six months ended June 30, 2018, mainly due to the re-chartering of
certain of our vessels that concluded long-term charters over the
last twelve months and were re-deployed at lower spot rates in the
six months ended June 30, 2019;
and
- a $3.9 million increase in
revenues due to higher fleet utilization of our vessels in the six
months ended June 30, 2019 compared
to the six months ended June 30,
2018.
Vessel Operating Expenses
Vessel operating
expenses decreased by 0.7%, or $0.4
million, to $53.2 million
in the six months ended June 30, 2019
from $53.6 million in the six
months ended June 30, 2018. The
average daily operating cost per vessel for vessels on time charter
was $5,761 per day for the six months
ended June 30, 2019 compared to
$5,806 per day for the six months
ended June 30, 2018. Management
believes that our daily operating cost ranks as one of the most
competitive in the industry.
Depreciation & Amortization
Depreciation
& Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by
11.1%, or $6.0 million, to
$47.8 million in the six months ended
June 30, 2019 from $53.8 million in the six months ended
June 30, 2018 mainly due to decreased
depreciation expense for ten vessels for which we recorded an
impairment charge on December 31,
2018.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and
special survey costs remained stable at $4.3
million in each of the six month periods ended June 30, 2019 and 2018.
General and Administrative Expenses
General and
administrative expenses increased by $2.4
million, to $13.4 million in
the six months ended June 30, 2019,
from $11.0 million in the six months
ended June 30, 2018. The increase was
mainly due to increased share based compensation and professional
fees.
Other Operating Expenses
Other Operating
Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by
$0.3 million, to $6.0 million in the six months ended June 30, 2019 from $6.3
million in the six months ended June
30, 2018.
Interest Expense and Interest Income
Interest
expense decreased by 20.0%, or $9.2
million, to $36.7 million
in the six months ended June 30, 2019
from $45.9 million in the six months
ended June 30, 2018. The decrease in
interest expense is attributable to:
(i) a $22.9 million decrease in interest expense on two
of our credit facilities for which we recognized an interest
expense accrual in Q3 2018, which has been classified on our
balance sheet under "Accumulated accrued interest" and represents
future interest expense for the relevant facilities that has been
recognized in advance as a result of the application of TDR
accounting in connection with our 2018 debt refinancing;
(ii) a $9.8 million increase in interest expense due to
an increase in debt service cost of approximately 2.6%, partially
offset by a $644.8 million decrease
in our average debt (including leaseback obligations), to
$1,643.4 million in the six months
ended June 30, 2019, compared to
$2,288.2 million in the six months
ended June 30, 2018; and
(iii) a $3.9 million increase in the amortization of
deferred finance costs and debt discount related to our 2018 debt
refinancing.
As of June 30, 2019, our bank debt
outstanding, gross of deferred finance costs, was $1,470.6 million and leaseback obligation was
$144.4 million compared to bank debt
of $2,293.9 million outstanding as of
June 30, 2018.
Interest income increased by $0.4
million to $3.2 million in the
six months ended June 30, 2019
compared to $2.8 million in the six
months ended June 30, 2018.
Other finance costs, net
Other finance costs,
net increased by $0.2 million, to
$2.1 million in the six months ended
June 30, 2019 from $1.9 million in the six months ended June 30, 2018.
Equity income/(loss) on investments
Equity
income/(loss) on investments decreased by $0.2 million to nil in the six months ended
June 30, 2019 compared to
$0.2 million income in the six months
ended June 30, 2018 and relates to
the operating performance of Gemini, in which the Company has a 49%
shareholding interest.
Loss on derivatives
Amortization of deferred
realized losses on interest rate swaps remained stable at
$1.8 million in each of the six month
periods ended June 30, 2019 and
2018.
Other income/(expenses), net
Other
income/(expenses), net was $0.4
million in income in the six months ended June 30, 2019 compared to $28.9 million in expenses in the six months ended
June 30, 2018 mainly due to
$29.7 million of refinancing-related
professional fees in the prior period.
Adjusted EBITDA
Adjusted EBITDA decreased by
1.2%, or $1.8 million, to
$153.1 million in the six months
ended June 30, 2019 from $154.9 million in the six months ended
June 30, 2018. As described above,
this decrease is mainly attributable to a $1.4 million increase in other finance costs, to
a $0.2 million decrease in operating
performance on our equity investments and a $0.1 million decrease in operating revenue.
Adjusted EBITDA for the six months ended June 30, 2019 is adjusted for stock based
compensation of $1.9 million. Tables
reconciling Adjusted EBITDA to Net Income can be found at the end
of this earnings release.
Recent Developments
On April 16, 2019, our Board of Directors determined
to effect a reverse stock split of our issued and outstanding
shares of common stock by a ratio of 1-for-14. The reverse stock
split occurred, and our common stock began trading on a split
adjusted basis as of the opening of trading on the NYSE on
May 2, 2019 under the existing
trading symbol "DAC". The reverse stock split reduced the number of
our outstanding shares of common stock from 213,324,455 to
15,237,456 and affected all issued and outstanding shares of common
stock. No fractional shares were issued in connection to the
reverse stock split. Stockholders who would otherwise hold a
fractional share of our common stock received a cash payment in
lieu of such fractional share. The par value and other terms of our
common stock were not affected by the reverse stock split. All
share and per share data in this Earnings Release give retroactive
effect to this reverse stock split, for all periods presented.
Conference Call and Webcast
On Tuesday, August 6, 2019 at 9:00 A.M. ET, the Company's management will host
a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until August 14, 2019 by dialing 1
877 344 7529 (US Toll Free Dial In) or +44 (0) 2036 088 021
(Standard International Dial In) and using 10134150# as the access
code.
Audio Webcast
There will also be a live and
then archived webcast of the conference call on the Danaos website
(www.danaos.com). Participants of the live webcast should register
on the website approximately 10 minutes prior to the start of the
webcast.
About Danaos Corporation
Danaos Corporation is
one of the largest independent owners of modern, large-size
containerships. Our current fleet of 59 containerships aggregating
351,614 TEUs, including four vessels owned by Gemini Shipholdings
Corporation, a joint venture, ranks Danaos among the largest
containership charter owners in the world based on total TEU
capacity. Our fleet is chartered to many of the world's largest
liner companies on fixed-rate charters. Our long track record of
success is predicated on our efficient and rigorous operational
standards and environmental controls. Danaos Corporation's shares
trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in
this release may constitute forward-looking statements within the
meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements reflect our current views
with respect to future events and financial performance and may
include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon
various assumptions. Although Danaos Corporation believes that
these assumptions were reasonable when made, because these
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond our control, Danaos Corporation cannot assure you that it
will achieve or accomplish these expectations, beliefs or
projections. Important factors that, in our view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the effects of the refinancing
transactions; Danaos' ability to achieve the expected benefits of
the refinancing and comply with the terms of its new credit
facilities and other agreements entered into in connection with the
refinancing; the strength of world economies and currencies,
general market conditions, including changes in charter hire rates
and vessel values, charter counterparty performance, changes in
demand that may affect attitudes of time charterers to scheduled
and unscheduled dry-docking, changes in Danaos Corporation's
operating expenses, including bunker prices, dry-docking and
insurance costs, ability to obtain financing and comply with
covenants in our financing arrangements, actions taken by
regulatory authorities, potential liability from pending or future
litigation, domestic and international political conditions,
potential disruption of shipping routes due to accidents and
political events or acts by terrorists.
Risks and uncertainties are further described in reports filed
by Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 10 unscheduled off-hire days in the three months
ended June 30, 2019. The following
table summarizes vessel utilization and the impact of the off-hire
days on the Company's revenue.
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
Second
Quarter
|
|
|
2019
|
2019
|
|
Total
|
Ownership
Days
|
4,950
|
|
5,005
|
|
9,955
|
Less Off-hire
Days:
|
|
|
|
|
|
Scheduled Off-hire
Days
|
-
|
|
(22)
|
|
(22)
|
Other Off-hire
Days
|
(90)
|
|
(10)
|
|
(100)
|
Operating
Days
|
4,860
|
|
4,973
|
|
9,833
|
Vessel
Utilization
|
98.2%
|
|
99.4%
|
|
98.8%
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$112,891
|
|
$112,319
|
|
$225,210
|
Average Gross
Daily Charter Rate
|
$23,229
|
|
$22,586
|
|
$22,903
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
Second
Quarter
|
|
|
2018
|
2018
|
|
Total
|
Ownership
Days
|
4,950
|
|
5,005
|
|
9,955
|
Less Off-hire
Days:
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(125)
|
|
(111)
|
|
(236)
|
Other Off-hire
Days
|
(91)
|
|
(84)
|
|
(175)
|
Operating
Days
|
4,734
|
|
4,810
|
|
9,544
|
Vessel
Utilization
|
95.6%
|
|
96.1%
|
|
95.9%
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$111,854
|
|
$113,466
|
|
$225,320
|
Average Gross
Daily Charter Rate
|
$23,628
|
|
$23,590
|
|
$23,609
|
Fleet List
The following table describes in
detail our fleet deployment profile as of August 5, 2019:
Vessel
Name
|
Vessel
Size
(TEU)
|
|
Year
Built
|
|
Expiration of
Charter(1)
|
Containerships
|
|
|
|
|
|
|
|
|
|
|
|
MSC
Ambition
|
13,100
|
|
2012
|
|
June 2024
|
Maersk
Exeter
|
13,100
|
|
2012
|
|
June 2024
|
Maersk
Enping
|
13,100
|
|
2012
|
|
May 2024
|
Hyundai
Respect
|
13,100
|
|
2012
|
|
March 2024
|
Hyundai
Honour
|
13,100
|
|
2012
|
|
February
2024
|
Express
Rome
|
10,100
|
|
2011
|
|
February
2022
|
Express
Berlin
|
10,100
|
|
2011
|
|
April 2022
|
Express
Athens
|
10,100
|
|
2011
|
|
February
2022
|
Le
Havre
|
9,580
|
|
2006
|
|
December
2022
|
Pusan
C
|
9,580
|
|
2006
|
|
November
2022
|
CMA CGM
Melisande
|
8,530
|
|
2012
|
|
May 2024
|
CMA CGM
Attila
|
8,530
|
|
2011
|
|
October 2023
|
CMA CGM
Tancredi
|
8,530
|
|
2011
|
|
November
2023
|
CMA CGM
Bianca
|
8,530
|
|
2011
|
|
January
2024
|
CMA CGM
Samson
|
8,530
|
|
2011
|
|
March 2024
|
America
|
8,468
|
|
2004
|
|
January
2023
|
Europe
|
8,468
|
|
2004
|
|
December
2022
|
CMA
CGM Moliere
|
6,500
|
|
2009
|
|
August
2021
|
CMA CGM
Musset
|
6,500
|
|
2010
|
|
August
2022
|
CMA CGM
Nerval
|
6,500
|
|
2010
|
|
October
2022
|
CMA CGM
Rabelais
|
6,500
|
|
2010
|
|
December
2022
|
CMA CGM
Racine
|
6,500
|
|
2010
|
|
January
2023
|
YM
Mandate
|
6,500
|
|
2010
|
|
January
2028
|
YM
Maturity
|
6,500
|
|
2010
|
|
April 2028
|
Performance
|
6,402
|
|
2002
|
|
May 2020
|
Dimitra
C
|
6,402
|
|
2002
|
|
January
2020
|
YM
Seattle
|
4,253
|
|
2007
|
|
October
2019
|
YM
Vancouver
|
4,253
|
|
2007
|
|
September
2019
|
Derby
D
|
4,253
|
|
2004
|
|
May 2020
|
ANL
Tongala
|
4,253
|
|
2004
|
|
May 2020
|
ZIM Rio
Grande
|
4,253
|
|
2008
|
|
May 2020
|
ZIM Sao
Paolo
|
4,253
|
|
2008
|
|
August
2020
|
ZIM
Kingston
|
4,253
|
|
2008
|
|
September
2020
|
ZIM
Monaco
|
4,253
|
|
2009
|
|
November
2020
|
ZIM
Dalian
|
4,253
|
|
2009
|
|
February 2021
|
ZIM
Luanda
|
4,253
|
|
2009
|
|
May 2021
|
Dimitris
C
|
3,430
|
|
2001
|
|
June 2020
|
Express Black
Sea
|
3,400
|
|
2011
|
|
November
2019
|
Express
Spain
|
3,400
|
|
2011
|
|
August
2019
|
Express
Argentina
|
3,400
|
|
2010
|
|
May 2020
|
Express
Brazil
|
3,400
|
|
2010
|
|
September
2019
|
Express
France
|
3,400
|
|
2010
|
|
September
2019
|
Singapore
|
3,314
|
|
2004
|
|
October
2019
|
Colombo
|
3,314
|
|
2004
|
|
February
2020
|
MSC
Zebra
|
2,602
|
|
2001
|
|
September
2020
|
Amalia
C
|
2,452
|
|
1998
|
|
August
2019
|
Danae
C
|
2,524
|
|
2001
|
|
January
2020
|
Advance
|
2,200
|
|
1997
|
|
August
2019
|
Future
|
2,200
|
|
1997
|
|
August
2019
|
Sprinter
|
2,200
|
|
1997
|
|
August
2019
|
Stride
|
2,200
|
|
1997
|
|
August
2019
|
Progress
C
|
2,200
|
|
1998
|
|
August
2019
|
Bridge
|
2,200
|
|
1998
|
|
August
2019
|
Highway
|
2,200
|
|
1998
|
|
October
2019
|
Vladivostok
|
2,200
|
|
1997
|
|
October
2019
|
|
|
|
|
|
|
Catherine C
(2)
|
6,422
|
|
2001
|
|
November
2022
|
Leo C
(2)
|
6,422
|
|
2002
|
|
November
2022
|
Suez
Canal(2)
|
5,610
|
|
2002
|
|
April 2020
|
Genoaľ2)
|
5,544
|
|
2002
|
|
September
2019
|
|
|
|
|
|
|
|
(1) Earliest
date charters could expire. Some charters include options to extend
their terms.
|
(2) Vessels
acquired by Gemini Shipholdings Corporation, in which Danaos holds
a 49% equity interest.
|
DANAOS
CORPORATION
|
Condensed
Consolidated Statements of Income - Unaudited
|
(Expressed in
thousands of United States dollars, except per share
amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
OPERATING
REVENUES
|
$112,319
|
|
$113,466
|
|
$225,210
|
|
$225,320
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
(27,306)
|
|
(26,742)
|
|
(53,177)
|
|
(53,591)
|
|
Depreciation &
amortization
|
(26,102)
|
|
(29,106)
|
|
(52,059)
|
|
(58,009)
|
|
General &
administrative
|
(6,492)
|
|
(5,777)
|
|
(13,361)
|
|
(10,959)
|
|
Other operating
expenses
|
(2,732)
|
|
(3,186)
|
|
(6,002)
|
|
(6,347)
|
Income From
Operations
|
49,687
|
|
48,655
|
|
100,611
|
|
96,414
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
|
|
|
|
Interest
income
|
1,569
|
|
1,418
|
|
3,165
|
|
2,793
|
|
Interest
expense
|
(18,844)
|
|
(23,020)
|
|
(36,687)
|
|
(45,869)
|
|
Other finance
expenses
|
(1,770)
|
|
(961)
|
|
(2,094)
|
|
(1,932)
|
|
Equity income/(loss)
on investments
|
32
|
|
210
|
|
(52)
|
|
184
|
|
Other
income/(expenses), net
|
367
|
|
(19,543)
|
|
434
|
|
(28,928)
|
|
Realized loss on
derivatives
|
(903)
|
|
(921)
|
|
(1,796)
|
|
(1,832)
|
Total Other
Expenses, net
|
(19,549)
|
|
(42,817)
|
|
(37,030)
|
|
(75,584)
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$30,138
|
|
$5,838
|
|
$63,581
|
|
$20,830
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
Basic earnings per
share1
|
$2.02
|
|
$0.74
|
|
$4.26
|
|
$2.66
|
Diluted earnings per
share1
|
$1.97
|
|
$0.74
|
|
$4.16
|
|
$2.66
|
Basic weighted
average number of common shares (in thousands of
shares)1
|
14,939
|
|
7,843
|
|
14,939
|
|
7,843
|
Diluted weighted
average number of common shares (in thousands of
shares)1
|
15,314
|
|
7,843
|
|
15,276
|
|
7,843
|
Non-GAAP
Measures2
|
Reconciliation of
Net Income to Adjusted Net Income – Unaudited
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
June
30,
|
June
30,
|
|
June
30,
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
$30,138
|
|
$5,838
|
|
$63,581
|
|
$20,830
|
Amortization of
financing fees, debt discount & finance fees accrued
|
4,117
|
|
3,247
|
|
9,243
|
|
6,598
|
Refinancing
professional fees
|
-
|
|
20,093
|
|
-
|
|
29,701
|
Adjusted Net
Income
|
$34,255
|
|
$29,178
|
|
$72,824
|
|
$57,129
|
Adjusted Earnings
Per Share, diluted1
|
$2.24
|
|
$3.72
|
|
$4.77
|
|
$7.28
|
Diluted weighted
average number of shares (in thousands)1
|
15,314
|
|
7,843
|
|
15,276
|
|
7,843
|
|
1 Basic and diluted earnings
per share and basic and diluted weighted average number of shares
give retroactive
effect to the 1-for-14 reverse stock split
effected on May 2, 2019, for all periods
presented.
|
2 The
Company reports its financial results in accordance with U.S.
generally accepted accounting principles
(GAAP). However, management believes that certain
non-GAAP financial measures used in managing the
business may provide users of this financial
information additional meaningful comparisons between current
results and results in prior operating periods.
Management believes that these non-GAAP financial measures can
provide additional meaningful reflection of underlying
trends of the business because they provide a comparison
of historical information that excludes certain items
that impact the overall comparability. Management also uses
these non-GAAP financial measures in making financial,
operating and planning decisions and in evaluating the
Company's performance. See the Table above for
supplemental financial data and corresponding reconciliations
to GAAP financial measures for the three and six
months ended June 30, 2019 and 2018. Non-GAAP financial
measures should be viewed in addition to, and not as
an alternative for, the Company's reported results prepared
in accordance with GAAP.
|
DANAOS
CORPORATION
|
Condensed
Consolidated Balance Sheets - Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
|
|
As
of
|
|
As
of
|
June
30,
|
December
31,
|
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$78,803
|
|
$77,275
|
|
Accounts receivable,
net
|
|
7,496
|
|
9,225
|
|
Other current
assets
|
|
36,566
|
|
33,250
|
|
|
|
122,865
|
|
119,750
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
2,433,731
|
|
2,480,329
|
|
Deferred charges,
net
|
|
10,467
|
|
13,031
|
|
Investments in
affiliates
|
|
7,311
|
|
7,363
|
|
Other non-current
assets
|
|
73,931
|
|
59,369
|
|
|
|
2,525,440
|
|
2,560,092
|
TOTAL
ASSETS
|
|
$2,648,305
|
|
$2,679,842
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
$113,826
|
|
$113,777
|
|
Accumulated accrued
interest, current portion
|
|
35,351
|
|
35,782
|
|
Long-term leaseback
obligations, current portion
|
|
14,097
|
|
-
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
60,034
|
|
73,142
|
|
|
|
223,308
|
|
222,701
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
1,318,207
|
|
1,508,108
|
|
Accumulated accrued
interest, net of current portion
|
|
178,065
|
|
200,574
|
|
Long-term leaseback
obligations, net
|
|
130,340
|
|
-
|
|
Other long-term
liabilities
|
|
42,916
|
|
57,606
|
|
|
|
1,669,528
|
|
1,766,288
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock1
|
|
154
|
|
152
|
|
Additional paid-in
capital1
|
|
729,425
|
|
727,562
|
|
Accumulated other
comprehensive loss
|
|
(119,540)
|
|
(118,710)
|
|
Retained
earnings
|
|
145,430
|
|
81,849
|
|
|
|
755,469
|
|
690,853
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$2,648,305
|
|
$2,679,842
|
|
1 Common stock and Additional
paid-in capital as of December 31, 2018 give retroactive effect to
the 1-for-14
reverse stock split.
|
DANAOS
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
- Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
$30,138
|
|
$5,838
|
|
$63,581
|
|
$20,830
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
24,039
|
|
26,697
|
|
47,805
|
|
53,757
|
|
Amortization of
deferred drydocking & special survey costs, finance cost, debt
discount and other finance fees accrued
|
6,180
|
|
5,656
|
|
13,497
|
|
10,850
|
|
PIK
interest
|
855
|
|
-
|
|
1,695
|
|
-
|
|
Payments for
drydocking/special survey
|
(1,569)
|
|
(3,958)
|
|
(1,690)
|
|
(10,351)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
903
|
|
921
|
|
1,796
|
|
1,832
|
|
Equity loss on
investments
|
(32)
|
|
(210)
|
|
52
|
|
(184)
|
|
Stock based
compensation
|
1,035
|
|
-
|
|
1,865
|
|
-
|
|
Accounts
receivable
|
(53)
|
|
(9,053)
|
|
1,729
|
|
(9,292)
|
|
Other assets, current
and non-current
|
(3,907)
|
|
(2,116)
|
|
(11,073)
|
|
(8,828)
|
|
Accounts payable and
accrued liabilities
|
(1,102)
|
|
1,457
|
|
(184)
|
|
8,093
|
|
Other liabilities,
current and long-term
|
(4,033)
|
|
(5,229)
|
|
(7,617)
|
|
(11,115)
|
Net Cash provided
by Operating Activities
|
52,454
|
|
20,003
|
|
111,456
|
|
55,592
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Vessel
additions and advances
|
(8,971)
|
|
(967)
|
|
(10,638)
|
|
(1,683)
|
Net Cash used in
Investing Activities
|
(8,971)
|
|
(967)
|
|
(10,638)
|
|
(1,683)
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Proceeds from
sale-leaseback of vessels
|
146,523
|
|
-
|
|
146,523
|
|
-
|
|
Debt
repayment
|
(176,097)
|
|
(6,780)
|
|
(205,811)
|
|
(48,381)
|
|
Payments of
leaseback obligations
|
(2,086)
|
|
-
|
|
(2,086)
|
|
-
|
|
Payments of
accumulated accrued interest
|
(8,767)
|
|
-
|
|
(17,867)
|
|
-
|
|
Finance
costs
|
(5,562)
|
|
-
|
|
(20,049)
|
|
-
|
Net Cash used in
Financing Activities
|
(45,989)
|
|
(6,780)
|
|
(99,290)
|
|
(48,381)
|
Net
Increase/(Decrease) in cash, cash equivalents and restricted
cash
|
(2,506)
|
|
12,256
|
|
1,528
|
|
5,528
|
Cash, cash
equivalents and restricted cash, beginning of period
|
81,309
|
|
62,979
|
|
77,275
|
|
69,707
|
Cash, cash
equivalents and restricted cash, end of period
|
$78,803
|
|
$75,235
|
|
$78,803
|
|
$75,235
|
DANAOS
CORPORATION
|
Reconciliation of
Net Income to Adjusted EBITDA - Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
$30,138
|
|
$5,838
|
|
$63,581
|
|
$20,830
|
Depreciation
|
24,039
|
|
26,697
|
|
47,805
|
|
53,757
|
Amortization of
deferred drydocking & special survey costs
|
2,063
|
|
2,409
|
|
4,254
|
|
4,252
|
Amortization of
deferred finance costs, debt discount and other finance fees
accrued
|
4,117
|
|
3,247
|
|
9,243
|
|
6,598
|
Amortization of
deferred realized losses on interest rate swaps
|
903
|
|
921
|
|
1,796
|
|
1,832
|
Interest
income
|
(1,569)
|
|
(1,418)
|
|
(3,165)
|
|
(2,793)
|
Interest
expense
|
14,855
|
|
20,507
|
|
27,740
|
|
40,755
|
Stock based
compensation
|
1,035
|
|
-
|
|
1,865
|
|
-
|
Refinancing
professional fees
|
-
|
|
20,093
|
|
-
|
|
29,701
|
Adjusted
EBITDA(1)
|
$75,581
|
|
$78,294
|
|
$153,119
|
|
$154,932
|
|
1) Adjusted
EBITDA represents net income before interest income and expense,
depreciation, amortization of
deferred drydocking & special survey
costs, amortization of deferred finance costs, debt discount and
other
finance fees accrued, amortization of
deferred realized losses on interest rate swaps, stock
based compensation
and refinancing professional fees.
However, Adjusted EBITDA is not a recognized measurement under
U.S.
generally accepted accounting principles,
or "GAAP." We believe that the presentation of Adjusted EBITDA
is
useful to investors because it is
frequently used by securities analysts, investors and
other interested parties in
the evaluation of companies in our
industry. We also believe that Adjusted EBITDA is useful in
evaluating our
operating performance compared to that of
other companies in our industry because the calculation of
Adjusted
EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of
capital
expenditures and acquisitions, items
which may vary for different companies for reasons unrelated to
overall
operating performance. In evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur
expenses that are the same as or similar
to some of the adjustments in this presentation. Our presentation
of
Adjusted EBITDA should not be construed as
an inference that our future results will be unaffected by
unusual
or non-recurring items.
|
|
Note: Items to consider for
comparability include gains and charges. Gains positively impacting
net income are
reflected as deductions to net income.
Charges negatively impacting net income are reflected as increases
to net
income.
|
|
The Company reports
its financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of these financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and six
months ended June 30, 2019 and 2018. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with
GAAP.
|
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SOURCE Danaos Corporation