ATHENS, Greece, Aug. 3, 2020 /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, 2020.
Highlights for the Second Quarter and Half Year Ended
June 30, 2020:
- Adjusted net income1 of $42.5 million, or $1.71 per share, for the three months ended
June 30, 2020 compared to
$34.3 million, or $2.24 per share, for the three months ended
June 30, 2019, an increase of 23.9%.
Adjusted net income1 of $75.8
million, or $3.06 per share,
for the six months ended June 30,
2020 compared to $72.8
million, or $4.77 per share,
for the six months ended June 30,
2019, an increase of 4.1%.
- Operating revenues of $116.8
million for the three months ended June 30, 2020 compared to $112.3 million for the three months ended
June 30, 2019, an increase of 4.0%.
Operating revenues of $223.0 million
for the six months ended June 30,
2020 compared to $225.2
million for the six months ended June
30, 2019, a decrease of 1.0%.
- Adjusted EBITDA1 of $80.1 million for the three months ended
June 30, 2020 compared to
$75.6 million for the three months
ended June 30, 2019, an increase of
6.0%. Adjusted EBITDA1 of $152.0 million for the six months ended
June 30, 2020 compared to
$153.1 million for the six months
ended June 30, 2019, a decrease of
0.7%.
- Total contracted operating revenues were $1.2 billion as of June
30, 2020, with charters extending through 2028 and remaining
average contracted charter duration of 3.7 years, weighted by
aggregate contracted charter hire.
- Charter coverage of 85% for the next 12 months based on
current operating revenues and 62% in terms of contracted operating
days.
- Common stock repurchase program of up to $10 million approved.
Three and Six
Months Ended June 30, 2020 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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$116,824
|
|
$112,319
|
|
$223,020
|
|
$225,210
|
Net income
|
$38,496
|
|
$30,138
|
|
$67,585
|
|
$63,581
|
Adjusted net
income1
|
$42,494
|
|
$34,255
|
|
$75,775
|
|
$72,824
|
Earnings per share,
diluted
|
$1.55
|
|
$1.97
|
|
$2.73
|
|
$4.16
|
Adjusted earnings per
share, diluted1
|
$1.71
|
|
$2.24
|
|
$3.06
|
|
$4.77
|
Diluted weighted
average number of shares (in thousands)
|
24,789
|
|
15,314
|
|
24,789
|
|
15,276
|
Adjusted
EBITDA1
|
$80,073
|
|
$75,581
|
|
$151,991
|
|
$153,119
|
|
|
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.
|
Danaos' CEO Dr. John Coustas
commented:
"We are pleased to report improved adjusted earnings for both
the second quarter of 2020 and the first six months of the year.
The Company's adjusted net income of $42.5
million for the second quarter of 2020 increased by
$8.2 million, or 23.9% when compared
to adjusted net income of $34.3
million for the second quarter of 2019. Adjusted EBITDA also
improved by $4.5 million, or 6%, to
$80.1 million for the second quarter
of 2020 compared to $75.6 million for
the second quarter of 2019.
Although economic activity has been subdued since the start of
the coronavirus pandemic, we have seen increasing signs of
confidence with liner companies in recent weeks as a number of
previously blanked sailings have been reinstated, implying that
demand is gradually improving. This has also translated into
improving charter rates for vessels greater than 4,000 TEU in size.
Recently reported financial results of the liner companies have
also been encouraging since, as we had anticipated, prudent
capacity management, reduced bunker prices and falling interest
rates have more than compensated for the drop in volumes caused by
the pandemic.
We are also cautiously optimistic about the medium-term market
outlook. The orderbook is currently in single digits as a
percentage of the world fleet for the first time in 20
years. Combined with an anticipated reduction in speeds due to
the various environmental initiatives, the supply side outlook is
healthy. Tighter supply will help to accelerate the recovery in the
container market.
We continue to execute our strategy and we are well insulated from
near-term volatility due to our high charter coverage of 85% in
terms of operating revenues and 62% in terms of operating days over
the next 12 months. This provides significant visibility into our
cash flows during this period. We have now concluded all the
scrubber installation investments and took delivery of two 8,500
TEU vessels during the second quarter. Finally, we have ample
liquidity and a $1.2 billion charter
backlog, which provides us with flexibility to both manage our
business and react to growth opportunities that may present
themselves. Given continued uncertainty about the duration of
the coronavirus pandemic and the ensuing economic recovery, we are
focused on maintaining a conservative financial profile and making
thoughtful capital allocation decisions that align with our
strategy and market expectations.
We also remain committed to operational excellence and
technological innovation, which allows us to continually deliver a
high quality service to our customers. Our commitment has enabled
us to maintain our leadership position in the container shipping
industry throughout multiple market cycles and during the current
challenging environment. We believe that our focus and strategy
will ultimately enhance shareholder value far and above the steel
value of our fleet."
Three months ended June 30,
2020 compared to the three months ended June 30, 2019
During the three months ended June 30,
2020, Danaos had an average of 57.1 containerships compared
to 55.0 containerships during the three months ended June 30, 2019. Our fleet utilization for the
three months ended June 30, 2020 was
97.1% compared to 99.4% for the three months ended June 30, 2019.
Our adjusted net income amounted to $42.5
million, or $1.71 per share,
for the three months ended June 30,
2020 compared to $34.3
million, or $2.24 per share,
for the three months ended June 30,
2019. We have adjusted our net income in the three months
ended June 30, 2020 for amortization
of non-cash fees and accrued finance fees charge of $4.0 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $8.2 million in
adjusted net income for the three months ended June 30, 2020 compared to the three months ended
June 30, 2019 is attributable mainly
to a $5.8 million decrease in net
finance expenses, a $4.5 million
increase in operating revenues and a $1.7
million increase in the operating performance of our equity
investment in Gemini Shipholdings Corporation ("Gemini"), which
were partially offset by a $3.8
million increase in total operating expenses.
On a non-adjusted basis, our net income amounted to $38.5 million, or $1.55 earnings per diluted share, for the three
months ended June 30, 2020 compared
to net income of $30.1 million, or
$1.97 earnings per diluted share, for
the three months ended June 30,
2019.
Operating Revenues
Operating revenues increased by
4.0%, or $4.5 million, to
$116.8 million in the three months
ended June 30, 2020 from $112.3 million in the three months ended
June 30, 2019.
Operating revenues for the three months ended June 30, 2020 reflect:
- a $9.6 million increase in
revenues in the three months ended June 30,
2020 compared to the three months ended June 30, 2019 as a result of contractual
increases in charter rates of vessels under long-term
charters;
- a $3.6 million increase in
revenues in the three months ended June 30,
2020 compared to the three months ended June 30, 2019 due to the acquisition of new
vessels;
- a $5.3 million decrease in
revenues in the three months ended June 30,
2020 compared to the three months ended June 30, 2019 due to lower non-cash revenue
recognition in accordance with US GAAP;
- a $2.5 million decrease in
revenues in the three months ended June 30,
2020 compared to the three months ended June 30, 2019 as a result of lower re-chartering
rates for certain of our vessels. This decrease is due to a
$4.1 million decrease in revenues due
to the re-chartering of four vessels in our fleet that concluded
long-term charters over the last twelve months and were re-deployed
at the prevailing lower spot rates in the three months ended
June 30, 2020, partially offset by a
$1.7 million improvement from the
re-chartering of other vessels in the fleet; and
- a $0.9 million decrease in
revenues due to lower fleet utilization of our vessels in the three
months ended June 30, 2020 compared
to the three months ended June 30,
2019.
Vessel Operating Expenses
Vessel operating expenses
increased by $1.3 million to
$28.6 million in the three
months ended June 30, 2020 from
$27.3 million in the three
months ended June 30, 2019, primarily
as a result of the increase in the average number of vessels in our
fleet, partially offset by an overall decrease in the average daily
operating cost to $5,787 per vessel
per day for vessels on time charter for the three months ended
June 30, 2020 compared to
$5,884 per vessel per day for the
three months ended June 30, 2019.
Management believes that our daily operating cost are among 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 increased by 5.4%,
or $1.3 million, to $25.3 million in the three months ended
June 30, 2020 from $24.0 million in the three months ended
June 30, 2019 mainly due to the
installation of scrubbers on nine of our vessels and the
acquisition of the vessels Niledutch Lion, Phoebe and SM
Charleston in the six months ended June
30, 2020.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs increased by $0.8
million to $2.9 million in the
three months ended June 30, 2020 from
$2.1 million in the three months
ended June 30, 2019.
General and Administrative Expenses
General and
administrative expenses decreased by $0.5
million to $6.0 million in the
three months ended June 30, 2020,
from $6.5 million in the three months
ended June 30, 2019. The decrease was
mainly due to decreased non-cash recognition of share based
compensation.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
$0.6 million to $3.3 million in the three months ended
June 30, 2020 from $2.7 million in the three months ended
June 30, 2019 primarily as a result
of the increase in the average number of vessels in our fleet.
Interest Expense and Interest Income
Interest expense
decreased by 27.7%, or $5.2 million,
to $13.6 million in the three
months ended June 30, 2020 from
$18.8 million in the three months
ended June 30, 2019. The decrease in
interest expense is attributable to:
- a $5.1 million decrease in
interest expense due to a decrease in debt service cost of
approximately 1.56% and a $95.8
million decrease in our average debt (including leaseback
obligations), to $1,534.9 million in
the three months ended June 30, 2020,
compared to $1,630.7 million in the
three months ended June 30, 2019;
and
- a $0.1 million decrease in the
amortization of deferred finance costs and debt discount related to
our 2018 debt refinancing.
As of June 30, 2020, our
outstanding bank debt, gross of deferred finance costs, was
$1,392.6 million and our leaseback
obligation was $135.2 million
compared to bank debt of $1,470.6
million and our leaseback obligation of $144.4 million as of June
30, 2019.
Interest income remained stable at $1.6
million in each of the three months ended June 30, 2020 and June 30,
2019.
Other finance costs, net
Other finance costs, net
decreased by $0.8 million to
$1.0 million in the three months
ended June 30, 2020 compared to
$1.8 million in the three months
ended June 30, 2019 mainly due to the
decrease in finance costs related to the leaseback obligations,
partially offset by lease termination fees in the three months
ended June 30, 2020.
Equity income/(loss) on investments
Equity
income/(loss) on investments increased by $1.7 million to $1.7
million of income on investments in the three months ended
June 30, 2020 compared to nil in the
three months ended June 30, 2019 due
to the improved 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 $0.9 million in each of the three months ended
June 30, 2020 and June 30, 2019.
Other income, net
Other income, net was nil in the
three months ended June 30, 2020
compared to $0.4 million in income in
the three months ended June 30,
2019.
Adjusted EBITDA
Adjusted EBITDA increased by 6.0%, or
$4.5 million, to $80.1 million in the three months ended
June 30, 2020 from $75.6 million in the three months ended
June 30, 2019. As outlined above, the
increase is mainly attributable to a $4.5
million increase in operating revenues, a $1.7 million increase in the operating
performance of our equity investees and a $0.7 million decrease in other finance expenses,
which were partially offset by a $2.4
million increase in operating expenses. Adjusted EBITDA for
the three months ended June 30, 2020
is adjusted for stock based compensation of $0.3 million. Tables reconciling Adjusted EBITDA
to Net Income can be found at the end of this earnings release.
Six months ended June 30, 2020
compared to the six months ended June 30,
2019
During the six months ended June 30,
2020, Danaos had an average of 56.4 containerships compared
to 55.0 containerships during the six months ended June 30, 2019. Our fleet utilization for the six
months ended June 30, 2020 was 94.2%
compared to 98.8% for the six months ended June 30, 2019. Adjusted fleet utilization,
excluding the effect of 188 days of incremental off-hire due to
shipyard delays related to the COVID-19 pandemic, was 96.1% in the
six months ended June 30, 2020.
Our adjusted net income amounted to $75.8
million, or $3.06 per share,
for the six months ended June 30,
2020 compared to $72.8
million, or $4.77 per share,
for the six months ended June 30,
2019. We have adjusted our net income in the six months
ended June 30, 2020 for amortization
of non-cash fees and accrued finance fees charge of $8.2 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $3.0 million in
adjusted net income for the six months ended June 30, 2020 compared to the six months ended
June 30, 2019 is attributable mainly
to a $6.3 million decrease in net
finance expenses and a $3.3 million
increase in the operating performance of our equity investment in
Gemini, which were partially offset by a $4.4 million increase in total operating expenses
and a $2.2 million decrease in
operating revenues, of which $3.2
million relates to incremental off-hire due to shipyard
delays related to the COVID-19 pandemic in the first quarter of
2020.
On a non-adjusted basis, our net income amounted to $67.6 million, or $2.73 earnings per diluted share, for the six
months ended June 30, 2020 compared
to net income of $63.6 million, or
$4.16 earnings per diluted share, for
the six months ended June 30,
2019.
Operating Revenues
Operating revenues decreased by
1.0%, or $2.2 million, to
$223.0 million in the six months
ended June 30, 2020 from $225.2 million in the six months ended
June 30, 2019.
Operating revenues for the six months ended June 30, 2020 reflect:
- a $14.7 million increase in
revenues in the six months ended June 30,
2020 compared to the six months ended June 30, 2019 as a result of contractual
increases in charter rates of vessels under long-term
charters;
- a $4.5 million increase in
revenues in the six months ended June 30,
2020 compared to the six months ended June 30, 2019 due to the acquisition of new
vessels;
- a $7.0 million decrease in
revenues due to lower fleet utilization of our vessels in the six
months ended June 30, 2020 compared
to the six months ended June 30, 2019
mainly due to the scheduled installation of scrubbers and
dry-dockings of our vessels, of which $3.2
million relates to incremental delays in the Chinese
shipyards where these activities were being performed due to the
COVID-19 pandemic;
- a $4.2 million decrease in
revenues in the six months ended June 30,
2020 compared to the six months ended June 30, 2019 as a result of lower re-chartering
rates for certain of our vessels. This decrease is due to a
$8.6 million decrease in revenues due
to the re-chartering of four vessels in our fleet that concluded
long-term charters over the last twelve months and were re-deployed
at the prevailing lower spot rates in the six months ended
June 30, 2020, partially offset by a
$4.5 million improvement from the
re-chartering of other vessels in the fleet; and
- a $10.2 million decrease in
revenues in the six months ended June 30,
2020 compared to the six months ended June 30, 2019 due to lower non-cash revenue
recognition in accordance with US GAAP.
Vessel Operating Expenses
Vessel operating expenses
increased by $1.4 million to
$54.6 million in the six months
ended June 30, 2020 from $53.2 million in the six months ended
June 30, 2019, primarily as a result
of the increase in the average number of vessels in our fleet,
partially offset by an overall decrease in the average daily
operating cost to $5,657 per vessel
per day for vessels on time charter for the six months ended
June 30, 2020 compared to
$5,761 per vessel per day for the six
months ended June 30, 2019.
Management believes that our daily operating cost are among 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 increased by 4.2%,
or $2.0 million, to $49.8 million in the six months ended
June 30, 2020 from $47.8 million in the six months ended
June 30, 2019 mainly due to the
installation of scrubbers on nine of our vessels and the
acquisition of the vessels Niledutch Lion, Phoebe and SM
Charleston in the six months ended June
30, 2020.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs increased by $1.0
million to $5.3 million in the
six months ended June 30, 2020 from
$4.3 million in the six months ended
June 30, 2019.
General and Administrative Expenses
General and
administrative expenses decreased by $1.5
million to $11.9 million in
the six months ended June 30, 2020,
from $13.4 million in the six months
ended June 30, 2019. The decrease was
mainly due to decreased non-cash recognition of share based
compensation.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
$1.3 million to $7.3 million in the six months ended June 30, 2020 from $6.0
million in the six months ended June
30, 2019 primarily as a result of the increase in the
average number of vessels in our fleet.
Interest Expense and Interest Income
Interest expense
decreased by 18.5%, or $6.8 million,
to $29.9 million in the six
months ended June 30, 2020 from
$36.7 million in the six months ended
June 30, 2019. The decrease in
interest expense is attributable to:
- a $5.8 million decrease in
interest expense due to a decrease in debt service cost by
approximately 0.8% and a $103.9
million decrease in our average debt (including leaseback
obligations), to $1,539.5 million in
the six months ended June 30, 2020,
compared to $1,643.4 million in the
six months ended June 30, 2019;
and
- a $1.0 million decrease in the
amortization of deferred finance costs and debt discount related to
our 2018 debt refinancing.
As of June 30, 2020, our
outstanding bank debt, gross of deferred finance costs, was
$1,392.6 million and our leaseback
obligation was $135.2 million
compared to bank debt of $1,470.6
million and our leaseback obligation of $144.4 million as of June
30, 2019.
Interest income increased by $0.1
million to $3.3 million in the
six months ended June 30, 2020
compared to $3.2 million in the six
months ended June 30, 2019.
Other finance costs, net
Other finance costs, net
decreased by $0.4 million to
$1.7 million in the six months ended
June 30, 2020 compared to
$2.1 million in the six months ended
June 30, 2019 mainly due to the
decrease in finance costs related to the leaseback obligations,
partially offset by lease termination fees in the six months ended
June 30, 2020.
Equity income/(loss) on investments
Equity
income/(loss) on investments increased by $3.3 million to $3.3
million of income on investments in the six months ended
June 30, 2020 compared to nil in the
six months ended June 30, 2019 due to
the improved 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 months ended
June 30, 2020 and June 30, 2019.
Other income, net
Other income, net was $0.3 million in income in the six months ended
June 30, 2020 compared to
$0.4 million in income in the six
months ended June 30, 2019.
Adjusted EBITDA
Adjusted EBITDA decreased by 0.7%, or
$1.1 million, to $152.0 million in the six months ended
June 30, 2020 from $153.1 million in the six months ended
June 30, 2019. As outlined above, the
decrease is mainly attributable to a $2.2
million decrease in operating revenues, of which
$3.2 million relates to the impact of
the COVID-19 pandemic described above and a $2.6 million increase in operating expenses,
which were partially offset by a $3.3
million increase in the operating performance of our equity
investees and a $0.4 million decrease
in other finance expenses. Adjusted EBITDA for the six months ended
June 30, 2020 is adjusted for stock
based compensation of $0.6 million.
Tables reconciling Adjusted EBITDA to Net Income can be found at
the end of this earnings release.
Common Stock Repurchase Program
The Company's Board
of Directors has approved a share repurchase program and authorized
the officers of the Company to repurchase, from time to time, up to
$10 million of the Company's common
stock. Shares may be purchased in open market or privately
negotiated transactions, at times and prices that are considered to
be appropriate by the Company, and the program may be suspended or
discontinued at any time.
Recent Developments
On July 2,
2020, we drew down a loan of $13.3
million with SinoPac, which was used to partially finance
the acquisition costs of the newly acquired vessel SM
Charleston.
Conference Call and Webcast
On Tuesday, August 4, 2020 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 11, 2020 by dialing 1
877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard
International Dial In) and using 10146830# 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.
Slide Presentation
A slide presentation regarding the
Company and the containership industry will also be available on
the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of
the largest independent owners of modern, large-size
containerships. Our current fleet of 63 containerships aggregating
385,769 TEUs, including five 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 impact of the COVID-19
pandemic and efforts throughout the world to contain its spread,
including effects on global economic activity, demand for seaborne
transportation of containerized cargo, the ability and willingness
of charterers to perform their obligations to us, charter
rates for containerships, shipyards performing scrubber
installations, drydocking and repairs, changing vessel crews and
availability of financing; the effects of the 2018 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
2018 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
For further information please contact:
Company Contact:
Evangelos
Chatzis Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com
|
Iraklis
Prokopakis
Senior Vice President and Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6400
E-Mail: coo@danaos.com
|
|
|
Investor Relations
and Financial Media
Rose & Company
New York
Tel. 212-359-2228
E-Mail:
danaos@rosecoglobal.com
|
Appendix
Fleet Utilization
Danaos had 92 unscheduled off-hire days in the three months
ended June 30, 2020. 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
|
|
|
2020
|
2020
|
|
Total
|
Ownership
Days
|
5,073
|
|
5,193
|
|
10,266
|
Less Off-hire
Days:
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(336)
|
|
(60)
|
|
(396)
|
Other Off-hire
Days
|
(104)
|
|
(92)
|
|
(196)
|
Operating
Days
|
4,633
|
|
5,041
|
|
9,674
|
Vessel
Utilization
|
91.3%
|
|
97.1%
|
|
94.2%
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$106,196
|
|
$116,824
|
|
$223,020
|
Average Gross
Daily Charter Rate
|
$22,922
|
|
$23,175
|
|
$23,054
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
Fleet List
The following table describes in detail our
fleet deployment profile as of August 3,
2020:
Vessel
Name
|
Vessel
Size
(TEU)
|
|
Year
Built
|
|
Expiration of
Charter(1)
|
Containerships
|
|
|
|
|
|
|
|
|
|
|
|
Hyundai Ambition
(ex MSC Ambition)
|
13,100
|
|
2012
|
|
June 2024
|
Hyundai Speed (ex
Maersk Exeter)
|
13,100
|
|
2012
|
|
June 2024
|
Hyundai Smart (ex
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
|
|
April 2023
|
Pusan
C
|
9,580
|
|
2006
|
|
March 2023
|
Niledutch
Lion
|
8,626
|
|
2008
|
|
February
2022
|
SM
Charleston
|
8,533
|
|
2005
|
|
September
2020
|
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
|
|
February
2023
|
Europe
|
8,468
|
|
2004
|
|
March 2023
|
Phoebe
|
8,463
|
|
2005
|
|
April 2022
|
CMA
CGM Moliere
|
6,500
|
|
2009
|
|
February
2022
|
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
|
|
September
2020
|
Dimitra
C
|
6,402
|
|
2002
|
|
January
2023
|
YM
Seattle
|
4,253
|
|
2007
|
|
September
2020
|
YM
Vancouver
|
4,253
|
|
2007
|
|
August
2020
|
Derby
D
|
4,253
|
|
2004
|
|
August
2020
|
ANL
Tongala
|
4,253
|
|
2004
|
|
October
2020
|
Rio Grande (ex ZIM
Rio Grande)
|
4,253
|
|
2008
|
|
October
2020
|
ZIM Sao
Paolo
|
4,253
|
|
2008
|
|
November
2020
|
ZIM
Kingston
|
4,253
|
|
2008
|
|
February
2021
|
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
|
|
September
2020
|
Express Black
Sea
|
3,400
|
|
2011
|
|
November
2020
|
Express
Spain
|
3,400
|
|
2011
|
|
October
2020
|
Express
Argentina
|
3,400
|
|
2010
|
|
September
2020
|
Express
Brazil
|
3,400
|
|
2010
|
|
September
2020
|
Express
France
|
3,400
|
|
2010
|
|
October
2020
|
Singapore
|
3,314
|
|
2004
|
|
August
2020
|
Colombo
|
3,314
|
|
2004
|
|
August
2020
|
MSC
Zebra
|
2,602
|
|
2001
|
|
September
2020
|
Amalia
C
|
2,452
|
|
1998
|
|
October
2020
|
Danae
C
|
2,524
|
|
2001
|
|
August
2020
|
Advance
|
2,200
|
|
1997
|
|
November
2020
|
Future
|
2,200
|
|
1997
|
|
September
2020
|
Sprinter
|
2,200
|
|
1997
|
|
September
2020
|
Stride
|
2,200
|
|
1997
|
|
November
2020
|
Progress
C
|
2,200
|
|
1998
|
|
September
2020
|
Bridge
|
2,200
|
|
1998
|
|
September
2020
|
Highway
|
2,200
|
|
1998
|
|
August
2020
|
Vladivostok
|
2,200
|
|
1997
|
|
September
2020
|
|
|
|
|
|
|
Belita
ľ2)
|
8,533
|
|
2006
|
|
September
2021
|
Catherine C
(2)
|
6,422
|
|
2001
|
|
January
2023
|
Leo C
(2)
|
6,422
|
|
2002
|
|
August
2022
|
Suez
Canal(2)
|
5,610
|
|
2002
|
|
October
2020
|
Genoaľ2)
|
5,544
|
|
2002
|
|
September
2020
|
|
|
|
|
|
|
|
|
(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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
OPERATING
REVENUES
|
$116,824
|
|
$112,319
|
|
$223,020
|
|
$225,210
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
(28,568)
|
|
(27,306)
|
|
(54,570)
|
|
(53,177)
|
|
Depreciation &
amortization
|
(28,199)
|
|
(26,102)
|
|
(55,090)
|
|
(52,059)
|
|
General &
administrative
|
(6,013)
|
|
(6,492)
|
|
(11,853)
|
|
(13,361)
|
|
Other operating
expenses
|
(3,289)
|
|
(2,732)
|
|
(7,335)
|
|
(6,002)
|
Income From
Operations
|
50,755
|
|
49,687
|
|
94,172
|
|
100,611
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
|
|
|
|
Interest
income
|
1,588
|
|
1,569
|
|
3,302
|
|
3,165
|
|
Interest
expense
|
(13,645)
|
|
(18,844)
|
|
(29,958)
|
|
(36,687)
|
|
Other finance
expenses
|
(1,038)
|
|
(1,770)
|
|
(1,660)
|
|
(2,094)
|
|
Equity income/(loss)
on investments
|
1,720
|
|
32
|
|
3,265
|
|
(52)
|
|
Other income,
net
|
19
|
|
367
|
|
270
|
|
434
|
|
Realized loss on
derivatives
|
(903)
|
|
(903)
|
|
(1,806)
|
|
(1,796)
|
Total Other
Expenses, net
|
(12,259)
|
|
(19,549)
|
|
(26,587)
|
|
(37,030)
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$38,496
|
|
$30,138
|
|
$67,585
|
|
$63,581
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$1.57
|
|
$2.02
|
|
$2.75
|
|
$4.26
|
Diluted earnings per
share
|
$1.55
|
|
$1.97
|
|
$2.73
|
|
$4.16
|
Basic weighted
average number of common shares (in thousands of shares)
|
24,573
|
|
14,939
|
|
24,573
|
|
14,939
|
Diluted weighted
average number of common shares (in thousands of shares)
|
24,789
|
|
15,314
|
|
24,789
|
|
15,276
|
Non-GAAP
Measures1 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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$38,496
|
|
$30,138
|
|
$67,585
|
|
$63,581
|
Amortization of
financing fees, debt discount & finance fees accrued
|
3,998
|
|
4,117
|
|
8,190
|
|
9,243
|
Adjusted Net
Income
|
$42,494
|
|
$34,255
|
|
$75,775
|
|
$72,824
|
Adjusted Earnings
Per Share, diluted
|
$1.71
|
|
$2.24
|
|
$3.06
|
|
$4.77
|
Diluted weighted
average number of shares (in thousands)
|
24,789
|
|
15,314
|
|
24,789
|
|
15,276
|
|
|
1
|
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, 2020 and 2019. 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,
|
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$84,955
|
|
$139,170
|
|
Accounts receivable,
net
|
|
12,552
|
|
7,145
|
|
Other current
assets
|
|
47,231
|
|
44,071
|
|
|
|
144,738
|
|
190,386
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
2,466,556
|
|
2,389,874
|
|
Deferred charges,
net
|
|
19,584
|
|
11,455
|
|
Investments in
affiliates
|
|
12,230
|
|
8,965
|
|
Other non-current
assets
|
|
56,971
|
|
82,339
|
|
|
|
2,555,341
|
|
2,492,633
|
TOTAL
ASSETS
|
|
$2,700,079
|
|
$2,683,019
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
$123,084
|
|
$119,673
|
|
Accumulated accrued
interest, current portion
|
|
30,415
|
|
34,137
|
|
Long-term leaseback
obligations, current portion
|
|
23,822
|
|
16,342
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
61,611
|
|
52,928
|
|
|
|
238,932
|
|
223,080
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
1,240,253
|
|
1,270,663
|
|
Accumulated accrued
interest, net of current portion
|
|
139,553
|
|
156,583
|
|
Long-term leaseback
obligations, net
|
|
107,353
|
|
121,872
|
|
Other long-term
liabilities
|
|
24,176
|
|
29,131
|
|
|
|
1,511,335
|
|
1,578,249
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock
|
|
248
|
|
248
|
|
Additional paid-in
capital
|
|
785,870
|
|
785,274
|
|
Accumulated other
comprehensive loss
|
|
(116,993)
|
|
(116,934)
|
|
Retained
earnings
|
|
280,687
|
|
213,102
|
|
|
|
949,812
|
|
881,690
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$2,700,079
|
|
$2,683,019
|
|
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
$38,496
|
|
$30,138
|
|
$67,585
|
|
$63,581
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
25,258
|
|
24,039
|
|
49,839
|
|
47,805
|
|
Amortization of
deferred drydocking & special survey costs, finance cost, debt
discount and other finance fees accrued
|
7,469
|
|
6,180
|
|
13,971
|
|
13,497
|
|
PIK
interest
|
743
|
|
855
|
|
1,550
|
|
1,695
|
|
Payments for
drydocking/special survey
|
(8,530)
|
|
(1,569)
|
|
(13,380)
|
|
(1,690)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
903
|
|
903
|
|
1,806
|
|
1,796
|
|
Equity (income)/loss
on investments
|
(1,720)
|
|
(32)
|
|
(3,265)
|
|
52
|
|
Stock based
compensation
|
298
|
|
1,035
|
|
596
|
|
1,865
|
|
Accounts
receivable
|
(4,631)
|
|
(53)
|
|
(5,407)
|
|
1,729
|
|
Other assets, current
and non-current
|
1,200
|
|
(3,907)
|
|
(689)
|
|
(11,073)
|
|
Accounts payable and
accrued liabilities
|
3,594
|
|
(1,102)
|
|
8,937
|
|
(184)
|
|
Other liabilities,
current and long-term
|
(1,639)
|
|
(4,033)
|
|
(4,675)
|
|
(7,617)
|
Net Cash provided
by Operating Activities
|
61,441
|
|
52,454
|
|
116,868
|
|
111,456
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Vessel additions and
advances
|
(56,500)
|
|
(8,971)
|
|
(98,746)
|
|
(10,638)
|
|
Investments
|
-
|
|
-
|
|
(75)
|
|
-
|
Net Cash used in
Investing Activities
|
(56,500)
|
|
(8,971)
|
|
(98,821)
|
|
(10,638)
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Proceeds from
sale-leaseback of vessels
|
139,080
|
|
146,523
|
|
139,080
|
|
146,523
|
|
Proceeds from
long-term debt
|
23,400
|
|
-
|
|
23,400
|
|
-
|
|
Payments of leaseback
obligations
|
(138,189)
|
|
(2,086)
|
|
(142,065)
|
|
(2,086)
|
|
Debt
repayment
|
(32,539)
|
|
(176,097)
|
|
(65,176)
|
|
(205,811)
|
|
Payments of
accumulated accrued interest
|
(7,173)
|
|
(8,767)
|
|
(15,502)
|
|
(17,867)
|
|
Finance
costs
|
(1,584)
|
|
(5,562)
|
|
(11,999)
|
|
(20,049)
|
Net Cash used in
Financing Activities
|
(17,005)
|
|
(45,989)
|
|
(72,262)
|
|
(99,290)
|
Net
Increase/(Decrease) in cash and cash equivalents
|
(12,064)
|
|
(2,506)
|
|
(54,215)
|
|
1,528
|
Cash and cash
equivalents, beginning of period
|
97,019
|
|
81,309
|
|
139,170
|
|
77,275
|
Cash and cash
equivalents, end of period
|
$84,955
|
|
$78,803
|
|
$84,955
|
|
$78,803
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$38,496
|
|
$30,138
|
|
$67,585
|
|
$63,581
|
Depreciation
|
25,258
|
|
24,039
|
|
49,839
|
|
47,805
|
Amortization of
deferred drydocking & special survey costs
|
2,941
|
|
2,063
|
|
5,251
|
|
4,254
|
Amortization of
deferred finance costs, debt discount and other finance fees
accrued
|
3,998
|
|
4,117
|
|
8,190
|
|
9,243
|
Amortization of
deferred realized losses on interest rate swaps
|
903
|
|
903
|
|
1,806
|
|
1,796
|
Interest
income
|
(1,588)
|
|
(1,569)
|
|
(3,302)
|
|
(3,165)
|
Interest
expense
|
9,767
|
|
14,855
|
|
22,026
|
|
27,740
|
Stock based
compensation
|
298
|
|
1,035
|
|
596
|
|
1,865
|
Adjusted
EBITDA(1)
|
$80,073
|
|
$75,581
|
|
$151,991
|
|
$153,119
|
|
|
|
|
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 and stock based compensation.
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, 2020 and 2019. 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