Completed Acquisitions of Six High
Specification, Fuel Efficient Capesize and Ultramax
Vessels
Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the
“Company”), the largest U.S. headquartered drybulk shipowner
focused on the transportation of major and minor bulk commodities
globally, today reported its financial results for the three months
and nine months ended September 30, 2018.
The following financial review discusses the
results for the three and nine months ended September 30, 2018 and
September 30, 2017.
Third Quarter 2018 and
Year-to-Date Highlights
- Completed the acquisition of a
total of six high specification, fuel efficient Capesize and
Ultramax vessels:
- In July 2018, we took delivery of the Genco Weatherly, a
2014-built Ultramax vessel
- In August 2018, we took delivery of two 2015-built Capesize
vessels, the Genco Endeavour and the Genco Resolute
- In September 2018, we took delivery of the Genco Columbia, a
2016-built Ultramax vessel, as well as two 2016-built Capesize
vessels, the Genco Defender and the Genco Liberty
- Entered into a $108 million,
five-year senior secured credit facility with favorable terms
- Announced our comprehensive
fleet-wide plan for IMO 2020 sulfur emission regulation compliance
- Plan to install exhaust gas cleaning systems (“scrubbers”) on
our 17 Capesize vessels with options for installation on an
additional 15 minor bulk vessels to provide flexibility for
developing market conditions
- Balance of the fleet is expected to consume compliant, low
sulfur fuel
- Implementing a portfolio approach aimed at reducing our
environmental footprint, maximizing shareholder returns and
lowering fuel costs
- Anticipate the completion of five
vessel sales as part of our fleet renewal program
- We completed the sales of two vessels, the Genco Surprise and
the Genco Progress, during the third quarter of 2018 for a
cumulative gain of $1.5 million
- During the fourth quarter of 2018, we expect to complete the
sales of the three other vessels, the Genco Cavalier, the Genco
Explorer and the Genco Muse
- Given the acquisition of the six vessels, upon the completion
of these vessel sales, the average age of our fleet will be reduced
by over one year to 9.3 years
- Recorded net income of $5.7 million
for the third quarter of 2018
- Basic and diluted earnings per share of $0.14
- Adjusted net income of $4.2 million
or adjusted basic and diluted earnings per share of $0.10,
excluding a $1.5 million gain on sale of vessels
- Net revenue (voyage revenues minus
voyage expenses and charter hire expenses) totaled $60.1 million
during Q3 2018, over 30% higher than the same period of 2017
- Time charter equivalent (“TCE”)
increased to $10,696 for Q3 2018 marking a year-over-year
improvement of 27%
- Maintained low daily vessel
operating expenses (“DVOE”) of $4,434 per vessel per day during Q3
2018 highlighting our industry leading low-cost structure
- Costs remained under our 2018 budget without sacrificing our
high safety and maintenance standards
- Recorded EBITDA of $29.6 million
during Q3 2018
- Adjusted EBITDA of $28.1 million, after excluding a $1.5
million of gain on sale of vessels1
________________________
1 We believe the non-GAAP measure presented
provides investors with a means of better evaluating and
understanding the Company’s operating performance. Please see
Summary Consolidated Financial and Other Data below for a further
reconciliation.
John C. Wobensmith, Chief Executive Officer,
commented, “During the third quarter, we continued to generate
profitable results, as we drew upon our sizeable and leading
platform to take advantage of the developing recovery in the
drybulk market. We also have taken steps to further strengthen our
earnings power during the quarter, completing the timely
acquisition of six high specification, fuel efficient Capesize and
Ultramax vessels, while continuing to sell older tonnage and
improve the age profile of the fleet. We also implemented a
comprehensive fleet-wide plan for IMO 2020, complementing our fleet
growth and renewal strategy. Based on extensive analysis, we
adopted a portfolio approach aimed at reducing our environmental
footprint, maximizing shareholder returns and lowering fuel costs.
As we progress into 2019, we remain well positioned to capitalize
on the strong demand for drybulk commodities and multi-decade low
vessel supply growth rates.”
Vessel Acquisitions and Fleet Renewal
Program
During the third quarter of 2018, Genco
completed the acquisition of a total of six high specification,
fuel efficient Capesize and Ultramax vessels from two separate
transactions entered into in June and July 2018, respectively.
Beginning in July we took delivery of the Genco Weatherly, a
2014-built 61,556 dwt Ultramax vessel. Subsequently, in August, we
took delivery of two 2015 Chinese built 181,060 dwt Capesize
vessels, the Genco Endeavour and the Genco Resolute. Finally, in
September, we completed these transactions as we took delivery of
two 2016 South Korean built Capesize vessels, the Genco Liberty and
the Genco Defender, 180,032 and 180,021 dwt respectively, as well
as one 2016 Japanese built 60,294 dwt Ultramax vessel, the Genco
Columbia.
In connection with our previously announced
fleet renewal program, we have agreed to sell five vessels to date,
of which we have completed the sale of the following three vessels:
the Genco Surprise, a 1998-built Panamax vessel which delivered to
buyers on August 7, 2018, the Genco Progress, a 1999-built
Handysize vessel which delivered to buyers on September 13, 2018,
and the Genco Cavalier, a 2007-built Supramax vessel, which
delivered to buyers on October 16, 2018. The Genco Explorer,
another 1999-built Handysize vessel and the Genco Muse, a
2001-built Handymax vessel, have also been contracted to be sold
and are anticipated to be delivered to their new owners in Q4 2018.
As a result of the sales, Genco will save anticipated drydocking
and ballast water treatment system installation costs of
approximately $6.1 million previously scheduled for 2018 and
2019.
The Genco Cavalier is one of the vessels
collateralizing the $460 Million Credit Facility. The Company plans
to utilize the vessel replacement option under the $460 Million
Credit Facility and $4.9 million of anticipated net sale proceeds
corresponding to debt associated with this vessel are intended to
be redeployed towards the acquisition of a replacement vessel
instead of repayment of the loan if the applicable terms and
conditions under the facility are met. The other four vessels that
have been agreed to be sold to date are unencumbered, and the
Company intends to redeploy the proceeds from the sale of these
vessels towards modern, fuel efficient vessels, which it is seeking
to identify.
Given the completed acquisition of six vessels
and the agreed upon sale of five vessels to date as described
above, our fleet will consist of 61 vessels with a carrying
capacity of 5,297,000 dwt. On a per sector basis, the fleet will
consist of 17 Capesize, five Panamax, six Ultramax, 20 Supramax,
and 13 Handysize vessels with an average age of 9.3 years,
representing reduction in average age of over one year from 10.6
years for the prior fleet composition of 60 vessels before any of
the vessel sales and purchases described above.
$108 Million Credit Facility
On August 14, 2018, the Company closed a
previously announced five-year senior secured credit facility led
by Crédit Agricole Corporate & Investment Bank for an aggregate
principal amount of $108 million. The proceeds were utilized to
partially finance the purchase price for the six new vessels
described previously. Under the terms of the $108 Million Credit
Facility, borrowings bear interest at LIBOR plus 250 basis points
through September 30, 2019 and LIBOR plus a range of 225 to 275
basis points thereafter, dependent upon Genco’s ratio of total net
indebtedness to the last twelve months EBITDA.
Comprehensive Fleet Plan Ahead of IMO
2020 Regulations
On October 9, 2018, the Company announced plans
to install scrubbers on our 17 Capesize vessels with options for
installation on an additional 15 minor bulk vessels. The balance of
the fleet is expected to consume compliant, low sulfur fuel
beginning January 1, 2020, when new environmental regulations come
into effect, although the Company will continue to evaluate other
options. These regulations cap sulfur emissions at 0.5%, down from
3.5% currently. The Company anticipates scrubber installation on
the 17 Capesize vessels to occur during 2019.
The Company’s portfolio approach is aimed at
reducing our environmental footprint, maximizing shareholder
returns and lowering fuel costs in an evolving marine fuel
environment. The Company is currently in discussions with various
lenders in regard to scrubber financing.
Our Commercial Strategy Continues to
Actively Drive Revenue and Margin Growth
Overall, our fleet deployment strategy remains
weighted towards short-term fixtures which provides optionality in
a potentially rising freight rate environment. We believe that our
active commercial strategy together with our low-cost structure
provides continuing potential for increased margins, while our
barbell approach to fleet composition provides direct exposure to
both major and minor bulk commodities and enables our fleet’s
cargoes to closely mirror those of global commodity trade
flows.
Our third quarter of 2018 TCE results by class
are listed below. During the third quarter, we repositioned select
Capesize and minor bulk vessels based on our market expectations.
We believe that these decisions will enhance Genco’s commercial
platform through a further expansion of our customer base and
geographical presence. Our TCE performance during the third quarter
of 2018 improved by 27% as compared to the same period the year
before.
- Capesize: $15,168
- Panamax: $9,319
- Ultramax, Supramax and Handymax: $9,732
- Handysize: $8,719
- Fleet average: $10,696
We currently have the following net TCE fixed
for the fourth quarter of 2018. We continue to take a portfolio
approach to the deployment of our Capesize fleet as we have fixed
several vessels on West Australian round voyages in the Pacific
while gaining exposure to the Atlantic market and booking fronthaul
voyages. Additionally, in the minor bulk fleet, we are benefiting
from scale in designated key regions where we have established a
critical mass. Further, we continue to execute our cross-trading
initiatives primarily on our Ultramax and Supramax fleet where the
Atlantic positions for certain vessels have benefited from a firm
market during the fourth quarter to date.
- Capesize: $16,736 for 64% of the
available Q4 2018 days
- Panamax: $10,381 for 54% of the
available Q4 2018 days
- Ultramax, Supramax and Handymax:
$12,417 for 67% of the available Q4 2018 days
- Handysize: $11,740 for 51% of the
available Q4 2018 days
- Fleet average: $13,367 for 62% of
the available Q4 2018
days
Financial Review: 2018 Third
Quarter
The Company recorded net income for the third
quarter of 2018 of $5.7 million, or $0.14 basic and diluted net
earnings per share. Comparatively, for the three months ended
September 30, 2017, the Company recorded a net loss of $31.2
million, or $0.90 basic and diluted net loss per share.
The Company’s revenues increased to $92.3
million for the three months ended September 30, 2018, 80% higher
than the $51.2 million recorded for the three months ended
September 30, 2017. The increase in revenues was primarily due to
the employment of vessels on spot market voyage charters as well as
higher spot market rates achieved by the majority of our
vessels.
The average daily time charter equivalent, or
TCE, rates obtained by the Company’s fleet was $10,696 per day for
the three months ended September 30, 2018 as compared to $8,448 for
the three months ended September 30, 2017. The increase in TCE was
primarily due to higher rates achieved by the majority of the
vessels in our fleet during the third quarter of 2018 versus the
third quarter of 2017. During the third quarter of 2018, the
drybulk freight market strengthened relative to the second quarter
with sequential increases in Capesize, Panamax, and Supramax
average earnings as reported by the Baltic Exchange. Demand for raw
materials remains strong as global steel production has increased
by 4.7% in the year-to-date led primarily by growth of 6.1% in both
China and India, according to the World Steel Association. On the
supply side, global net fleet growth has remained low in the
year-to-date primarily driven by a significant reduction in
newbuilding vessel deliveries as compared to the prior year
period.
Total operating expenses were $80.2 million for
the three months ended September 30, 2018 compared to $74.9 million
for the three months ended September 30, 2017. During the three
months ended September 30, 2018, gain on sale of vessels totaled
$1.5 million. During the three months ended September 30, 2017, an
$18.7 million vessel impairment loss was recorded in relation to
Genco’s five 1999-built vessels. Voyage expenses rose to $31.5
million for the three months ended September 30, 2018 versus $5.6
million during the prior year period primarily due to the increased
employment of vessels on spot market voyage charters as part of our
commercial strategy, in which we incur significantly higher voyage
expenses as compared to time charters, spot market-related time
charters and pool arrangements. Vessel operating expenses increased
marginally to $25.2 million for the three months ended September
30, 2018, from $25.1 million for the three months ended September
30, 2017. General and administrative expenses were $5.0 million for
the third quarter of 2018 compared to $5.9 million for the third
quarter of 2017, primarily due to a decrease in nonvested stock
amortization expense to $0.6 million from $1.3 million for the
third quarter of 2018 and 2017, respectively. Depreciation and
amortization expenses decreased to $17.3 million for the three
months ended September 30, 2018 from $17.8 million for the three
months ended September 30, 2017, primarily due to the revaluation
of 15 of our vessels to their respective fair values during the
first quarter of 2018 as well as the second and third quarters of
2017, partially offset by an increase in depreciation for the six
vessels delivered in Q3 2018.
Daily vessel operating expenses, or DVOE,
amounted to $4,434 per vessel per day for the third quarter of
2018, below our budget of $4,440 per vessel per day and compared to
$4,553 per vessel per day for the same quarter of 2017. The
decrease in DVOE was predominantly due to lower expenses related to
maintenance, drydocking, spare parts and stores, partially offset
by higher expenses related to crewing. We believe daily vessel
operating expenses are best measured for comparative purposes over
a 12‑month period in order to take into account all of the expenses
that each vessel in our fleet will incur over a full year of
operation. Based on estimates provided by our technical managers
and management’s views, our DVOE budget for 2018 is $4,440 per
vessel per day on a weighted average basis for the entire year for
our fleet.
Apostolos Zafolias, Chief Financial Officer,
commented, “During the quarter, we continued to preserve a strong
cash balance as we maintained low direct vessel operating expenses
and took advantage of an improving drybulk rate environment. We
also entered into a $108 million credit facility under favorable
terms, which, together with the success we have had year-to-date
accessing capital, has supported our ability to grow our fleet and
earnings power. We appreciate the strong support we have received
from the capital markets and our leading banking group.”
Financial Review: Nine Months
2018
The Company recorded a net loss of $51.2 million
or $1.37 basic and diluted net loss per share for the nine months
ended September 30, 2018. This compares to a net loss of $61.3
million or $1.80 basic and diluted net loss per share for the nine
months ended September 30, 2017. Net loss for the nine months ended
September 30, 2018 and 2017, includes non-cash vessel impairment
charges of $56.6 million and $22.0 million, respectively. Net loss
for the nine months ended September 30, 2018 also includes a loss
on debt extinguishment in the amount of $4.5 million as well as a
gain from sale of vessels totaling $1.5 million. Net loss for the
nine months ended September 30, 2017 includes a gain on sale of
vessels in the amount of $7.7 million. Revenues increased to $255.3
million for the nine months ended September 30, 2018 compared to
$134.8 million for the nine months ended September 30, 2017. The
increase in revenues was primarily due to the employment of vessels
on spot market voyage charters as well as higher spot market rates
achieved by the majority of our vessels. Voyage expenses
increased to $78.6 million for the nine months ended September 30,
2018 from $9.7 million for the same period in 2017. This increase
was primarily due to the employment of vessels on spot market
voyage charters during 2018 as part of our commercial strategy, in
which we incur significantly higher voyage expenses as compared to
time charters, spot market-related time charters and pool
arrangements. TCE rates obtained by the Company increased to
$10,710 per day for the nine months ended September 30, 2018 from
$7,698 per day for the nine months ended September 30, 2017, due to
higher rates achieved by the majority of the vessels in our fleet.
Total operating expenses for the nine months ended September 30,
2018 and 2017 were $280.8 million and $174.4 million, respectively.
Total operating expenses includes non-cash vessel impairment
charges of $56.6 million relating to the revaluation of certain
vessels that comprise our fleet renewal plan to their respective
fair values for the nine months ended September 30, 2018, as well
as a $1.5 million gain from sale of vessels. For the nine months
ended September 30, 2017, total operating expenses include non-cash
vessel impairment charges totaling $22.0 million and a gain on sale
of vessels of $7.7 million. General and administrative expenses for
the nine months ended September 30, 2018 increased to $16.8 million
as compared to the $16.6 million in the same period of 2017. Daily
vessel operating expenses per vessel were $4,394 versus $4,427 in
the comparative periods. The decrease in DVOE was predominantly due
to lower drydocking related expenses, partially offset by higher
expenses related to the purchase of stores. EBITDA for the nine
months ended September 30, 2018 amounted to $20.9 million compared
to $14.5 million during the prior period. During the first nine
months of 2018 and 2017, EBITDA included non-cash impairment
charges, loss on debt extinguishment and gains on sale of vessels
as mentioned above. Excluding these non-cash charges, our adjusted
EBTIDA would have amounted to $80.5 million and $28.7 million, for
the respective periods.
Liquidity and Capital
Resources
Cash Flow
Net cash provided by operating activities for
the nine months ended September 30, 2018 was $43.4 million as
compared to $3.7 million for the nine months ended September 30,
2017. Included in the net loss during the nine months ended
September 30, 2018 were $56.6 million of non-cash impairment
charges, as well as a $4.5 million loss on the extinguishment of
debt, a $5.3 million payment on the $400 Million Credit Facility
and gains totaling $1.5 million arising from the sale of vessels
due to the sale of two vessels. Included in the net loss during the
nine months ended September 30, 2017 were $22.0 million of non-cash
impairment charges, as well as paid in kind interest incurred of
$4.6 million related to the $400 Million Credit Facility and a gain
on sale of vessels in the amount of $7.7 million due to the sale of
five vessels. Depreciation and amortization expense for the nine
months ended September 30, 2018 decreased by $3.6 million primarily
due to the revaluation of nine of our vessels that were written
down to their estimated fair market value during the first quarter
of 2018, as well as the revaluation of six of our vessels that were
written down to their estimated fair market value during the second
and third quarters of 2017. These decreases in depreciation were
partially offset by an increase in depreciation expense for the six
vessels delivered during the third quarter of 2018. Additionally,
the fluctuation in inventories increased by $12.8 million due to
additional fuel inventory for our vessels as the result of the
employment of our vessels on spot market voyage charters. There was
also a $5.8 million increase in the fluctuation in due from
charterers due to the timing of payments received from charterers.
These changes were offset by a $5.5 million decrease in deferred
drydocking costs incurred because there were less vessels that
completed drydocking during the nine months ended September 30,
2018 as compared to the same period during 2017. Lastly, there was
an increase in the fluctuation in accounts payable and accrued
expenses of $7.4 million and an increase in the fluctuation in
deferred revenue of $3.9 million due to the timing of payments.
Net cash used in investing activities was $226.5
million during the nine months ended September 30, 2018 as compared
to net cash provided by investing activities of $15.8 million
during the nine months ended September 30, 2017. Net cash used in
investing activities during the nine months ended September 30,
2018 consisted primarily of $239.7 million purchase of vessels
related to the six vessels that delivered to us during the third
quarter of 2018. This cash outflow during the nine months ended
September 30, 2018 was partially offset by $10.6 million proceeds
from the sale of two vessels during the third quarter of 2018 and
$3.5 million of proceeds received for hull and machinery claims
related primarily to the receipt of the remaining insurance
settlement for the main engine repair claim for the Genco Tiger.
Net cash provided by investing activities during the nine months
ended September 30, 2017 consisted primarily of $15.5 million
proceeds from the sale of five vessels during the nine months ended
September 30, 2017 and $0.7 million of proceeds received for
various hull and machinery claims.
Net cash provided by financing activities during
the nine months ended September 30, 2018 was $144.2 million as
compared to net cash used in financing activities of $3.5 million
during the nine months ended September 30, 2017. Net cash provided
by financing activities of $144.2 million for the nine months ended
September 30, 2018 consisted primarily of the $460.0 million
drawdown under the $460 Million Credit Facility, the $108.0 million
drawdown under the $108 Million Credit Facility and the net
proceeds from the common stock offering on June 19, 2018 of $109.8
million partially offset by the following: $399.6 million repayment
of debt under the $400 Million Credit Facility; $93.9 million
repayment of debt under the $98 Million Credit Facility; $25.5
million repayment of debt under the 2014 Term Loan Facilities;
$11.5 million payment of deferred financing costs; and $3.0 million
payment of debt extinguishment costs. On August 14, 2018, we
entered into the $108 Million Credit Facility to finance a portion
of the purchase price for the six vessels acquired during the three
months ended September 30, 2018. On June 5, 2018, the $460 Million
Credit Facility refinanced the following three existing credit
facilities; the $400 Million Credit Facility, the $98 Million
Credit Facility and the 2014 Term Loan Facilities. Net cash used in
financing activities of $3.5 million for the nine months ended
September 30, 2017 consisted of the following: $2.1 million
repayment of debt under the 2014 Term Loan Facilities; $1.1 million
payment of Series A Preferred Stock issuance costs; and $0.3
million repayment of debt under the $400 Million Credit
Facility.
Capital Expenditures
We make capital expenditures from time to time
in connection with vessel acquisitions. As of September 30, 2018,
we completed installment payment obligations for the acquisition
vessels. We made these payments in the third quarter of 2018 using
a combination of cash on hand and commercial bank financing as
previously described.
In addition to acquisitions that we may
undertake in future periods, we will incur additional capital
expenditures due to special surveys and drydockings for our fleet.
We drydocked one vessel during the third quarter of 2018. We
currently have no vessels scheduled to drydock during the remainder
of 2018.
We also anticipate incurring capital
expenditures with respect to the installation of ballast water
treatment systems, which we intend to fund with cash on hand. In
addition, we expect to incur capital expenditures for the
installation of scrubbers on our 17 Capesize vessels and may incur
capital expenditures related to scrubbers for an additional 15 or
more minor bulk vessels. We expect the cost, including
installation, to be approximately $2 million per vessel, which may
vary according to the specifications of our vessels and technical
aspects of the installation, among other variables. We anticipate
establishing a credit facility to finance a significant portion of
the costs associated with the scrubbers and intend to fund the
remainder of the costs with cash on hand.
We estimate our capital expenditures related to
drydocking, including capitalized costs incurred during drydocking
related to vessel assets and vessel equipment, ballast water
treatment system costs and scheduled off-hire days, but excluding
scrubber costs for our fleet through 2018 and 2019 to be:
| |
|
|
| |
Q4 2018 |
2019 (4) |
| Estimated Costs (1)
(2) |
$0.8
million |
$36.9
million |
| Estimated Offhire Days
(3) |
0 |
732 |
| |
|
|
| |
| (1) Estimates are based on our budgeted cost of
drydocking our vessels in China. Actual costs will vary based on
various factors, including where the drydockings are actually
performed. We expect to fund these costs with cash on hand. These
costs do not include drydock expense items that are reflected in
vessel operating expenses. Included are estimated costs associated
with the installation of ballast water treatment systems. Estimated
costs presented include approximately $8.0 million of costs
associated with 9 vessels that could potentially be sold based on
our fleet renewal program. |
| |
| (2) The $0.8 million of estimated ballast water
treatment systems costs during 2018 represent the deposits for the
ballast water treatment systems for certain vessels expected to be
drydocked during 2019. |
| |
| (3) Actual length will vary based on the condition of
the vessel, yard schedules and other factors. Estimated offhire
presented includes approximately 210 days associated with 9 vessels
that could potentially be sold based on our fleet renewal
program. |
| |
| (4) The estimated costs and off-hire days associated
with the installation of scrubbers are not included above. |
| |
Summary Consolidated Financial
and Other Data
The following table summarizes Genco Shipping
& Trading Limited’s selected consolidated financial and other
data for the periods indicated below.
| |
|
|
|
|
|
|
|
| |
Three Months EndedSeptember 30,
2018 |
|
Three Months EndedSeptember 30,
2017 |
|
Nine Months EndedSeptember 30,
2018 |
|
Nine Months EndedSeptember 30,
2017 |
| |
(Dollars in thousands, except share and per share
data) |
|
(Dollars in thousands, except share and per share
data) |
| |
(unaudited) |
|
(unaudited) |
| INCOME
STATEMENT DATA: |
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
| Voyage revenues |
$ |
92,263 |
|
|
$ |
51,161 |
|
|
$ |
255,336 |
|
|
$ |
134,780 |
|
| Total
revenues |
|
92,263 |
|
|
|
51,161 |
|
|
|
255,336 |
|
|
|
134,780 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
| Voyage
expenses |
|
31,475 |
|
|
|
5,550 |
|
|
|
78,551 |
|
|
|
9,743 |
|
| Vessel
operating expenses |
|
25,155 |
|
|
|
25,131 |
|
|
|
72,642 |
|
|
|
73,867 |
|
| Charter
hire expenses |
|
723 |
|
|
|
- |
|
|
|
1,231 |
|
|
|
- |
|
|
General and administrative expenses (inclusive of nonvested stock
amortization expense of $0.6 million, $1.3 million, $1.8
million and $3.5 million, respectively) |
|
5,033 |
|
|
|
5,889 |
|
|
|
16,761 |
|
|
|
16,550 |
|
| Technical
management fees |
|
2,028 |
|
|
|
1,883 |
|
|
|
5,926 |
|
|
|
5,735 |
|
|
Depreciation and amortization |
|
17,269 |
|
|
|
17,836 |
|
|
|
50,605 |
|
|
|
54,194 |
|
|
Impairment of vessel assets |
|
- |
|
|
|
18,654 |
|
|
|
56,586 |
|
|
|
21,993 |
|
| Gain on
sale of vessels |
|
(1,509 |
) |
|
|
- |
|
|
|
(1,509 |
) |
|
|
(7,712 |
) |
| Total
operating expenses |
|
80,174 |
|
|
|
74,943 |
|
|
|
280,793 |
|
|
|
174,370 |
|
| |
|
|
|
|
|
|
|
| Operating income
(loss) |
|
12,089 |
|
|
|
(23,782 |
) |
|
|
(25,457 |
) |
|
|
(39,590 |
) |
| |
|
|
|
|
|
|
|
| Other (expense)
income: |
|
|
|
|
|
|
|
| Other
income (expense) |
|
213 |
|
|
|
(37 |
) |
|
|
272 |
|
|
|
(152 |
) |
| Interest
income |
|
1,062 |
|
|
|
494 |
|
|
|
2,743 |
|
|
|
1,006 |
|
| Interest
expense |
|
(7,656 |
) |
|
|
(7,857 |
) |
|
|
(24,249 |
) |
|
|
(22,559 |
) |
| Loss on
debt extinguishment |
|
- |
|
|
|
- |
|
|
|
(4,533 |
) |
|
|
- |
|
| Other
expense |
|
(6,381 |
) |
|
|
(7,400 |
) |
|
|
(25,767 |
) |
|
|
(21,705 |
) |
| |
|
|
|
|
|
|
|
| Income (loss) before
income taxes |
|
5,708 |
|
|
|
(31,182 |
) |
|
|
(51,224 |
) |
|
|
(61,295 |
) |
| Income
tax expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
| Net income (loss) |
$ |
5,708 |
|
|
$ |
(31,182 |
) |
|
$ |
(51,224 |
) |
|
$ |
(61,295 |
) |
| |
|
|
|
|
|
|
|
| Net earnings (loss) per
share - basic |
$ |
0.14 |
|
|
$ |
(0.90 |
) |
|
$ |
(1.37 |
) |
|
$ |
(1.80 |
) |
| |
|
|
|
|
|
|
|
| Net earnings (loss) per
share - diluted |
$ |
0.14 |
|
|
$ |
(0.90 |
) |
|
$ |
(1.37 |
) |
|
$ |
(1.80 |
) |
| |
|
|
|
|
|
|
|
| Weighted average common
shares outstanding - basic |
|
41,618,187 |
|
|
|
34,469,998 |
|
|
|
37,263,200 |
|
|
|
34,135,736 |
|
| |
|
|
|
|
|
|
|
| Weighted average common
shares outstanding - diluted |
|
41,821,008 |
|
|
|
34,469,998 |
|
|
|
37,263,200 |
|
|
|
34,135,736 |
|
| |
|
|
|
|
|
|
|
| |
September 30, 2018 |
|
December 31, 2017 |
| BALANCE SHEET
DATA (Dollars in thousands): |
(unaudited) |
|
|
| |
|
|
|
|
Assets |
|
|
|
| Current
assets: |
|
|
|
| Cash and cash
equivalents |
$ |
165,724 |
|
|
$ |
174,479 |
|
|
Restricted cash |
|
- |
|
|
|
7,234 |
|
| Due from
charterers, net |
|
18,536 |
|
|
|
12,855 |
|
| Prepaid
expenses and other current assets |
|
10,072 |
|
|
|
7,338 |
|
|
Inventories |
|
29,980 |
|
|
|
15,333 |
|
| Vessels
held for sale |
|
12,996 |
|
|
|
- |
|
| Total
current assets |
|
237,308 |
|
|
|
217,239 |
|
| |
|
|
|
|
Noncurrent assets: |
|
|
|
| Vessels,
net of accumulated depreciation of $229,559 and $213,431,
respectively |
$ |
1,382,428 |
|
|
$ |
1,265,577 |
|
| Deferred
drydock, net |
|
10,728 |
|
|
|
13,382 |
|
| Fixed
assets, net |
|
1,495 |
|
|
|
1,014 |
|
| Other
noncurrent assets |
|
- |
|
|
|
514 |
|
|
Restricted cash |
|
315 |
|
|
|
23,233 |
|
| Total
noncurrent assets |
|
1,394,966 |
|
|
|
1,303,720 |
|
| |
|
|
|
| Total
assets |
$ |
1,632,274 |
|
|
$ |
1,520,959 |
|
| |
|
|
|
| Liabilities and
Equity |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts
payable and accrued expenses |
$ |
33,084 |
|
|
$ |
23,230 |
|
| Current
portion of long-term debt |
|
66,320 |
|
|
|
24,497 |
|
| Deferred
revenue |
|
10,231 |
|
|
|
4,722 |
|
| Total
current liabilities |
|
109,635 |
|
|
|
52,449 |
|
| |
|
|
|
|
Noncurrent liabilities |
|
|
|
| Long-term
lease obligations |
|
3,576 |
|
|
|
2,588 |
|
| Long-term
debt, net of deferred financing costs of $17,200 and $9,032,
respectively |
|
484,480 |
|
|
|
490,895 |
|
| Total
noncurrent liabilities |
|
488,056 |
|
|
|
493,483 |
|
| |
|
|
|
| Total
liabilities |
|
597,691 |
|
|
|
545,932 |
|
| |
|
|
|
|
Commitments and contingencies |
|
|
|
| |
|
|
|
|
Equity: |
|
|
|
| Common
stock |
|
415 |
|
|
|
345 |
|
|
Additional paid-in capital |
|
1,739,724 |
|
|
|
1,628,355 |
|
| Retained
deficit |
|
(705,556 |
) |
|
|
(653,673 |
) |
| Total
equity |
|
1,034,583 |
|
|
|
975,027 |
|
| Total
liabilities and equity |
$ |
1,632,274 |
|
|
$ |
1,520,959 |
|
| |
|
|
|
| |
Nine Months EndedSeptember 30,
2018 |
|
Nine Months EndedSeptember 30,
2017 |
| STATEMENT OF
CASH FLOWS (Dollars in thousands): |
(unaudited) |
| |
|
|
|
| Cash flows from
operating activities |
|
|
|
| Net loss |
$ |
(51,224 |
) |
|
$ |
(61,295 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
50,605 |
|
|
|
54,194 |
|
|
Amortization of deferred financing costs |
|
2,110 |
|
|
|
1,739 |
|
| PIK
interest, net |
|
- |
|
|
|
4,575 |
|
| Payment
of PIK interest |
|
(5,341 |
) |
|
|
- |
|
|
Amortization of nonvested stock compensation expense |
|
1,776 |
|
|
|
3,536 |
|
|
Impairment of vessel assets |
|
56,586 |
|
|
|
21,993 |
|
| Gain on
sale of vessels |
|
(1,509 |
) |
|
|
(7,712 |
) |
| Loss on
debt extinguishment |
|
4,533 |
|
|
|
- |
|
| Insurance
proceeds for protection and indemnity claims |
|
268 |
|
|
|
478 |
|
| Insurance
proceeds for loss of hire claims |
|
58 |
|
|
|
1,781 |
|
| Change in
assets and liabilities: |
|
|
|
| Increase
in due from charterers |
|
(6,329 |
) |
|
|
(495 |
) |
| Increase
in prepaid expenses and other current assets |
|
(5,966 |
) |
|
|
(8,001 |
) |
| Increase
in inventories |
|
(14,647 |
) |
|
|
(1,837 |
) |
| Decrease
in other noncurrent assets |
|
514 |
|
|
|
- |
|
| Increase
in accounts payable and accrued expenses |
|
8,169 |
|
|
|
766 |
|
| Increase
in deferred revenue |
|
5,017 |
|
|
|
1,144 |
|
| Increase
in lease obligations |
|
988 |
|
|
|
540 |
|
| Deferred
drydock costs incurred |
|
(2,233 |
) |
|
|
(7,685 |
) |
| Net cash
provided by operating activities |
|
43,375 |
|
|
|
3,721 |
|
| |
|
|
|
| Cash flows from
investing activities |
|
|
|
| Purchase
of vessels, including deposits |
|
(239,695 |
) |
|
|
(252 |
) |
| Purchase
of other fixed assets |
|
(888 |
) |
|
|
(198 |
) |
| Net
proceeds from sale of vessels |
|
10,626 |
|
|
|
15,513 |
|
| Insurance
proceeds for hull and machinery claims |
|
3,466 |
|
|
|
718 |
|
| Net cash
(used in) provided by investing activities |
|
(226,491 |
) |
|
|
15,781 |
|
| |
|
|
|
| Cash flows from
financing activities |
|
|
|
| Proceeds
from the $108 Million Credit Facility |
|
108,000 |
|
|
|
- |
|
| Proceeds
from the $460 Million Credit Facility |
|
460,000 |
|
|
|
- |
|
|
Repayments on the $400 Million Credit Facility |
|
(399,600 |
) |
|
|
(300 |
) |
|
Repayments on the $98 Million Credit Facility |
|
(93,939 |
) |
|
|
- |
|
|
Repayments on the 2014 term Loan Facilities |
|
(25,544 |
) |
|
|
(2,062 |
) |
| Payment
of debt extinguishment costs |
|
(2,962 |
) |
|
|
- |
|
| Proceeds
from issuance of common stock |
|
110,249 |
|
|
|
- |
|
| Payment
of common stock issuance costs |
|
(496 |
) |
|
|
- |
|
| Payment
of Series A Preferred Stock issuance costs |
|
- |
|
|
|
(1,103 |
) |
| Payment
of deferred financing costs |
|
(11,499 |
) |
|
|
- |
|
| Net cash
provided by (used in) financing activities |
|
144,209 |
|
|
|
(3,465 |
) |
| |
|
|
|
| Net (decrease) increase
in cash, cash equivalents and restricted cash |
|
(38,907 |
) |
|
|
16,037 |
|
| |
|
|
|
| Cash, cash equivalents
and restricted cash at beginning of period |
|
204,946 |
|
|
|
169,068 |
|
| Cash, cash equivalents
and restricted cash at end of period |
$ |
166,039 |
|
|
$ |
185,105 |
|
| |
|
|
|
| |
|
|
|
Three Months EndedSeptember 30,
2018 |
|
Adjusted Net Income Reconciliation |
(unaudited) |
| Net
Income |
$ |
5,708 |
|
| |
- |
|
Gain on sale of
vessels |
|
(1,509 |
) |
| |
|
|
Adjusted net
income |
$ |
4,199 |
|
| |
|
|
|
|
| |
|
|
Adjusted net earnings
per share - basic |
$ |
0.10 |
|
| |
|
|
Adjusted net earnings
per share - diluted |
$ |
0.10 |
|
| |
|
|
|
|
| |
|
|
Weighted average common
shares outstanding - basic |
|
41,618,187 |
|
| |
|
|
Weighted average common
shares outstanding - diluted |
|
41,821,008 |
|
| |
|
|
|
|
| |
|
|
Weighted average common
shares outstanding - diluted as per financial statements |
|
41,618,187 |
|
| |
|
|
Dilutive effect of
stock options |
|
31,965 |
|
| |
|
|
Dilutive effect of
restricted stock awards |
|
170,856 |
|
| |
|
|
Weighted average common
shares outstanding - diluted as adjusted |
|
41,821,008 |
|
| |
|
| |
|
|
|
Three Months EndedSeptember 30,
2018 |
|
Three Months EndedSeptember 30,
2017 |
|
Nine Months EndedSeptember 30,
2018 |
|
Nine Months EndedSeptember 30,
2017 |
| |
|
|
|
(Dollars in thousands) |
|
(Dollars in thousands) |
|
EBITDA Reconciliation: |
(unaudited) |
|
(unaudited) |
| |
Net
Income (loss) |
$ |
5,708 |
|
|
$ |
(31,182 |
) |
|
$ |
(51,224 |
) |
|
$ |
(61,295 |
) |
| |
+ |
Net interest
expense |
|
6,594 |
|
|
|
7,363 |
|
|
|
21,506 |
|
|
|
21,553 |
|
| |
+ |
Income tax (benefit)
expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
+ |
Depreciation and
amortization |
|
17,269 |
|
|
|
17,836 |
|
|
|
50,605 |
|
|
|
54,194 |
|
| |
|
|
EBITDA(1) |
$ |
29,571 |
|
|
$ |
(5,983 |
) |
|
$ |
20,887 |
|
|
$ |
14,452 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
+ |
Impairment of vessel
assets |
|
- |
|
|
|
18,654 |
|
|
|
56,586 |
|
|
|
21,993 |
|
| |
- |
|
Gain on sale of
vessels |
|
(1,509 |
) |
|
|
- |
|
|
|
(1,509 |
) |
|
|
(7,712 |
) |
| |
+ |
Loss on debt
extinguishment |
|
- |
|
|
|
- |
|
|
|
4,533 |
|
|
|
- |
|
| |
|
|
Adjusted
EBITDA |
$ |
28,062 |
|
|
$ |
12,671 |
|
|
$ |
80,497 |
|
|
$ |
28,733 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three Months Ended |
|
Nine Months Ended |
| |
|
|
|
September 30, 2018 |
|
September 30, 2017 |
|
September 30, 2018 |
|
September 30, 2017 |
|
FLEET DATA: |
(unaudited) |
|
(unaudited) |
| Total
number of vessels at end of period |
|
64 |
|
|
|
60 |
|
|
|
64 |
|
|
|
60 |
|
| Average
number of vessels (2) |
|
61.7 |
|
|
|
60.0 |
|
|
|
60.6 |
|
|
|
61.1 |
|
| Total
ownership days for fleet (3) |
|
5,673 |
|
|
|
5,520 |
|
|
|
16,533 |
|
|
|
16,687 |
|
| Total
chartered-in days (4) |
|
65 |
|
|
|
- |
|
|
|
114 |
|
|
|
- |
|
| Total
available days for fleet (5) |
|
5,680 |
|
|
|
5,399 |
|
|
|
16,505 |
|
|
|
16,242 |
|
| Total
available days for owned fleet (6) |
|
5,615 |
|
|
|
5,399 |
|
|
|
16,391 |
|
|
|
16,242 |
|
| Total
operating days for fleet (7) |
|
5,623 |
|
|
|
5,308 |
|
|
|
16,318 |
|
|
|
16,003 |
|
| Fleet
utilization (8) |
|
98.5 |
% |
|
|
97.9 |
% |
|
|
98.5 |
% |
|
|
97.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
AVERAGE DAILY RESULTS: |
|
|
|
|
|
|
|
| Time
charter equivalent (9) |
$ |
10,696 |
|
|
$ |
8,448 |
|
|
$ |
10,710 |
|
|
$ |
7,698 |
|
| Daily
vessel operating expenses per vessel (10) |
|
4,434 |
|
|
|
4,553 |
|
|
|
4,394 |
|
|
|
4,427 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three Months Ended |
|
Nine Months Ended |
| |
|
|
|
September 30, 2018 |
|
September 30, 2017 |
|
September 30, 2018 |
|
September 30, 2017 |
|
FLEET DATA: |
(unaudited) |
|
(unaudited) |
| Ownership
days |
|
|
|
|
|
|
|
|
Capesize |
|
1,334.5 |
|
|
|
1,196.0 |
|
|
|
3,687.5 |
|
|
|
3,549.0 |
|
|
Panamax |
|
497.1 |
|
|
|
552.0 |
|
|
|
1,583.1 |
|
|
|
1,638.0 |
|
|
Ultramax |
|
455.2 |
|
|
|
368.0 |
|
|
|
1,179.2 |
|
|
|
1,092.0 |
|
|
Supramax |
|
1,932.0 |
|
|
|
1,932.0 |
|
|
|
5,733.0 |
|
|
|
5,733.0 |
|
|
Handymax |
|
92.0 |
|
|
|
92.0 |
|
|
|
273.0 |
|
|
|
540.8 |
|
|
Handysize |
|
1,362.1 |
|
|
|
1,380.0 |
|
|
|
4,077.1 |
|
|
|
4,134.6 |
|
| Total |
|
5,673.0 |
|
|
|
5,520.0 |
|
|
|
16,532.9 |
|
|
|
16,687.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Chartered-in days |
|
|
|
|
|
|
|
|
Capesize |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Panamax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Ultramax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Supramax |
|
- |
|
|
|
- |
|
|
|
49.4 |
|
|
|
- |
|
|
Handymax |
|
37.0 |
|
|
|
- |
|
|
|
37.0 |
|
|
|
- |
|
|
Handysize |
|
27.6 |
|
|
|
- |
|
|
|
27.6 |
|
|
|
- |
|
| Total |
|
64.5 |
|
|
|
- |
|
|
|
114.0 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
| Available
days (owned & chartered-in fleet) |
|
|
|
|
|
|
|
|
Capesize |
|
1,288.0 |
|
|
|
1,195.7 |
|
|
|
3,608.0 |
|
|
|
3,456.3 |
|
|
Panamax |
|
496.1 |
|
|
|
501.9 |
|
|
|
1,582.1 |
|
|
|
1,468.6 |
|
|
Ultramax |
|
448.8 |
|
|
|
365.9 |
|
|
|
1,172.5 |
|
|
|
1,087.7 |
|
|
Supramax |
|
1,928.6 |
|
|
|
1,864.2 |
|
|
|
5,775.4 |
|
|
|
5,623.4 |
|
|
Handymax |
|
129.0 |
|
|
|
91.2 |
|
|
|
299.9 |
|
|
|
518.3 |
|
|
Handysize |
|
1,389.5 |
|
|
|
1,380.0 |
|
|
|
4,067.5 |
|
|
|
4,087.6 |
|
| Total |
|
5,680.0 |
|
|
|
5,399.0 |
|
|
|
16,505.4 |
|
|
|
16,241.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Available
days (owned fleet) |
|
|
|
|
|
|
|
|
Capesize |
|
1,288.0 |
|
|
|
1,195.7 |
|
|
|
3,608.0 |
|
|
|
3,456.3 |
|
|
Panamax |
|
496.1 |
|
|
|
501.9 |
|
|
|
1,582.1 |
|
|
|
1,468.6 |
|
|
Ultramax |
|
448.8 |
|
|
|
365.9 |
|
|
|
1,172.5 |
|
|
|
1,087.7 |
|
|
Supramax |
|
1,928.6 |
|
|
|
1,864.2 |
|
|
|
5,726.0 |
|
|
|
5,623.4 |
|
|
Handymax |
|
92.0 |
|
|
|
91.2 |
|
|
|
262.9 |
|
|
|
518.3 |
|
|
Handysize |
|
1,361.9 |
|
|
|
1,380.0 |
|
|
|
4,039.9 |
|
|
|
4,087.6 |
|
| Total |
|
5,615.4 |
|
|
|
5,399.0 |
|
|
|
16,391.4 |
|
|
|
16,241.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Operating
days |
|
|
|
|
|
|
|
|
Capesize |
|
1,286.1 |
|
|
|
1,162.4 |
|
|
|
3,606.0 |
|
|
|
3,327.3 |
|
|
Panamax |
|
472.0 |
|
|
|
501.5 |
|
|
|
1,547.9 |
|
|
|
1,461.8 |
|
|
Ultramax |
|
445.4 |
|
|
|
365.9 |
|
|
|
1,152.3 |
|
|
|
1,083.7 |
|
|
Supramax |
|
1,911.5 |
|
|
|
1,841.9 |
|
|
|
5,707.3 |
|
|
|
5,584.7 |
|
|
Handymax |
|
124.0 |
|
|
|
87.4 |
|
|
|
292.9 |
|
|
|
494.2 |
|
|
Handysize |
|
1,383.9 |
|
|
|
1,349.1 |
|
|
|
4,011.8 |
|
|
|
4,051.1 |
|
| Total |
|
5,622.8 |
|
|
|
5,308.1 |
|
|
|
16,318.2 |
|
|
|
16,002.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Fleet
utilization |
|
|
|
|
|
|
|
|
Capesize |
|
98.5 |
% |
|
|
97.2 |
% |
|
|
99.2 |
% |
|
|
95.3 |
% |
|
Panamax |
|
94.9 |
% |
|
|
99.8 |
% |
|
|
97.8 |
% |
|
|
98.4 |
% |
|
Ultramax |
|
97.8 |
% |
|
|
99.4 |
% |
|
|
97.7 |
% |
|
|
99.2 |
% |
|
Supramax |
|
98.9 |
% |
|
|
97.8 |
% |
|
|
98.7 |
% |
|
|
98.7 |
% |
|
Handymax |
|
96.2 |
% |
|
|
95.0 |
% |
|
|
94.5 |
% |
|
|
91.4 |
% |
|
Handysize |
|
99.6 |
% |
|
|
97.8 |
% |
|
|
98.3 |
% |
|
|
99.0 |
% |
| Fleet
average |
|
98.5 |
% |
|
|
97.9 |
% |
|
|
98.5 |
% |
|
|
97.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
Average Daily Results: |
|
|
|
|
|
|
|
| Time
Charter Equivalent |
|
|
|
|
|
|
|
|
Capesize |
$ |
15,168 |
|
|
$ |
12,180 |
|
|
$ |
14,716 |
|
|
$ |
10,381 |
|
|
Panamax |
|
9,319 |
|
|
|
9,329 |
|
|
|
9,513 |
|
|
|
7,410 |
|
|
Ultramax |
|
8,063 |
|
|
|
8,509 |
|
|
|
9,930 |
|
|
|
8,172 |
|
|
Supramax |
|
10,014 |
|
|
|
7,461 |
|
|
|
10,115 |
|
|
|
6,936 |
|
|
Handymax |
|
11,948 |
|
|
|
7,665 |
|
|
|
10,965 |
|
|
|
7,309 |
|
|
Handysize |
|
8,719 |
|
|
|
6,262 |
|
|
|
8,655 |
|
|
|
6,505 |
|
| Fleet
average |
|
10,696 |
|
|
|
8,448 |
|
|
|
10,710 |
|
|
|
7,698 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Daily
vessel operating expenses |
|
|
|
|
|
|
|
|
Capesize |
$ |
5,172 |
|
|
$ |
5,019 |
|
|
$ |
4,849 |
|
|
$ |
4,789 |
|
|
Panamax |
|
4,039 |
|
|
|
4,391 |
|
|
|
4,149 |
|
|
|
4,493 |
|
|
Ultramax |
|
4,879 |
|
|
|
4,592 |
|
|
|
4,518 |
|
|
|
4,462 |
|
|
Supramax |
|
4,246 |
|
|
|
4,729 |
|
|
|
4,338 |
|
|
|
4,521 |
|
|
Handymax |
|
3,928 |
|
|
|
4,102 |
|
|
|
5,012 |
|
|
|
4,240 |
|
|
Handysize |
|
4,008 |
|
|
|
3,986 |
|
|
|
4,078 |
|
|
|
3,973 |
|
| Fleet
average |
|
4,434 |
|
|
|
4,553 |
|
|
|
4,394 |
|
|
|
4,427 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| 1) EBITDA represents net income (loss) plus net
interest expense, taxes, and depreciation and amortization. EBITDA
is included because it is used by management and certain investors
as a measure of operating performance. EBITDA is used by analysts
in the shipping industry as a common performance measure to compare
results across peers. Our management uses EBITDA as a performance
measure in consolidating internal financial statements and it is
presented for review at our board meetings. We believe that EBITDA
is useful to investors as the shipping industry is capital
intensive which often results in significant depreciation and cost
of financing. EBITDA presents investors with a measure in addition
to net income to evaluate our performance prior to these costs.
EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP
measure) and should not be considered as an alternative to net
income, operating income or any other indicator of a company's
operating performance required by U.S. GAAP. EBITDA is not a
measure of liquidity or cash flows as shown in our consolidated
statement of cash flows. The definition of EBITDA used here may not
be comparable to that used by other companies. |
| 2) Average number of vessels is the number of
vessels that constituted our fleet for the relevant period, as
measured by the sum of the number of days each vessel was part of
our fleet during the period divided by the number of calendar days
in that period. |
| 3) We define ownership days as the aggregate
number of days in a period during which each vessel in our fleet
has been owned by us. Ownership days are an indicator of the size
of our fleet over a period and affect both the amount of revenues
and the amount of expenses that we record during a period. |
| 4) We define chartered-in days as the aggregate
number of days in a period during which we chartered-in third-party
vessels. |
| 5) We define available days, which Genco has
recently updated and incorporated in the table above to better
demonstrate the manner in which Genco evaluates its business, as
the number of our ownership days and chartered-in days less the
aggregate number of days that our vessels are off-hire due to
familiarization upon acquisition, repairs or repairs under
guarantee, vessel upgrades or special surveys. Amounts for
available days in the table above for the periods ended September
30, 2017 have been adjusted for our updated method of calculating
available days. Companies in the shipping industry generally use
available days to measure the number of days in a period during
which vessels should be capable of generating revenues. |
| 6) We define available days for the owned fleet
as available days less chartered-in days. |
| 7) We define operating days as the number of our
total available days in a period less the aggregate number of days
that the vessels are off-hire due to unforeseen circumstances. The
shipping industry uses operating days to measure the aggregate
number of days in a period during which vessels actually generate
revenues. Amounts for operating days in the table above for the
periods ended September 30, 2017 have been adjusted for our updated
method of calculating available days. |
| 8) We calculate fleet utilization, which Genco
has recently updated and incorporated in the table above to better
demonstrate the manner in which Genco evaluates its business, as
the number of our operating days during a period divided by the
number of ownership days plus chartered-in days less drydocking
days. Amounts for fleet utilization in the table above for the
periods ended September 30, 2017 have been adjusted for our updated
method of calculating fleet utilization. |
| 9) We define TCE rates as our voyage revenues
less voyage expenses and charter hire expenses, divided by the
number of the available days of our owned fleet during the period,
which is consistent with industry standards. TCE rate is a common
shipping industry performance measure used primarily to compare
daily earnings generated by vessels on time charters with daily
earnings generated by vessels on voyage charters, because
charterhire rates for vessels on voyage charters are generally not
expressed in per-day amounts while charterhire rates for vessels on
time charters generally are expressed in such amounts. |
| |
Three Months Ended September 30,
2018 |
|
Three Months EndedSeptember 30,
2017 |
|
Nine Months EndedSeptember 30,
2018 |
|
Nine Months EndedSeptember 30,
2017 |
| Total
Fleet |
(unaudited) |
|
(unaudited) |
| Voyage revenues (in
thousands) |
$ |
92,263 |
|
|
$ |
51,161 |
|
|
$ |
255,336 |
|
|
$ |
134,780 |
|
| Voyage expenses (in
thousands) |
|
31,475 |
|
|
|
5,550 |
|
|
|
78,551 |
|
|
|
9,743 |
|
| Charter hire expenses
(in thousands) |
|
723 |
|
|
|
- |
|
|
|
1,231 |
|
|
|
- |
|
| |
|
60,065 |
|
|
|
45,611 |
|
|
|
175,554 |
|
|
|
125,037 |
|
| |
|
|
|
|
|
|
|
| Total available days
for owned fleet |
|
5,615 |
|
|
|
5,399 |
|
|
|
16,391 |
|
|
|
16,242 |
|
| Total TCE rate |
$ |
10,696 |
|
|
$ |
8,448 |
|
|
$ |
10,710 |
|
|
$ |
7,698 |
|
|
|
|
|
|
|
|
|
|
| |
| 10) We define daily vessel operating expenses to
include crew wages and related costs, the cost of insurance
expenses relating to repairs and maintenance (excluding
drydocking), the costs of spares and consumable stores, tonnage
taxes and other miscellaneous expenses. Daily vessel operating
expenses are calculated by dividing vessel operating expenses by
ownership days for the relevant period. |
| |
Debt Overview
Debt outstanding as of September 30, 2018, gross
of unamortized debt issuance costs and inclusive of the current
portion of long-term debt, amounted to $568 million. On August 14,
2018, we closed the previously announced $108 Million Credit
Facility under which proceeds were used to partially finance the
six acquisition vessels.
| |
|
|
|
|
|
|
|
| |
|
|
September 30, 2018 |
|
December 31, 2017 |
|
|
| Long-term debt,
net consists of the following: |
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Principal amount |
|
|
$ |
568,000 |
|
|
$ |
519,083 |
|
|
|
| PIK interest |
|
|
|
- |
|
|
|
5,341 |
|
|
|
| Less: Unamortized debt
issuance costs |
|
|
|
(17,200 |
) |
|
|
(9,032 |
) |
|
|
| Less: Current
portion |
|
|
|
(66,320 |
) |
|
|
(24,497 |
) |
|
|
| Long-term debt,
net |
|
|
$ |
484,480 |
|
|
$ |
490,895 |
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
September 30, 2018 |
|
December 31, 2017 |
| |
Principal |
|
Unamortized DebtIssuance Cost |
|
Principal |
|
Unamortized DebtIssuance Cost |
| $460 Million Credit
Facility |
$ |
460,000 |
|
|
$ |
15,248 |
|
|
$ |
- |
|
|
$ |
- |
|
| $108 Million Credit
Facility |
|
108,000 |
|
|
|
1,952 |
|
|
|
- |
|
|
|
- |
|
| $400 Million Credit
Facility |
|
- |
|
|
|
- |
|
|
|
399,600 |
|
|
|
6,332 |
|
| $98 Million Credit
Facility |
|
- |
|
|
|
- |
|
|
|
93,939 |
|
|
|
1,370 |
|
| 2014 Term Loan
Facilities |
|
- |
|
|
|
- |
|
|
|
25,544 |
|
|
|
1,330 |
|
| PIK interest |
|
- |
|
|
|
- |
|
|
|
5,341 |
|
|
|
- |
|
| |
$ |
568,000 |
|
|
$ |
17,200 |
|
|
$ |
524,424 |
|
|
$ |
9,032 |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Genco Shipping & Trading Limited’s
Fleet
Genco Shipping & Trading Limited transports
iron ore, coal, grain, steel products and other drybulk cargoes
along worldwide shipping routes. As of November 7, 2018, Genco
Shipping & Trading Limited’s fleet consists of 17 Capesize,
five Panamax, six Ultramax, 20 Supramax, one Handymax and 14
Handysize vessels with an aggregate capacity of approximately
5,376,000 dwt. Following the delivery of the remaining vessels we
have agreed to sell, our fleet will consist of 17 Capesize, five
Panamax, six Ultramax, 20 Supramax, and 13 Handysize vessels with a
carrying capacity of 5,297,000 dwt.
The following table reflects Genco’s fleet list
as of November 7, 2018:
| |
|
|
|
|
|
|
|
Vessel |
DWT |
Year
Built |
| Capesize |
|
|
|
1 |
|
Genco Resolute |
181,060 |
2015 |
|
2 |
|
Genco Endeavour |
181,060 |
2015 |
|
3 |
|
Genco Constantine |
180,183 |
2008 |
|
4 |
|
Genco Augustus |
180,151 |
2007 |
|
5 |
|
Genco Liberty |
180,032 |
2016 |
|
6 |
|
Genco Defender |
180,021 |
2016 |
|
7 |
|
Baltic Lion |
179,185 |
2012 |
|
8 |
|
Genco Tiger |
179,185 |
2011 |
|
9 |
|
Genco London |
177,833 |
2007 |
|
10 |
|
Baltic Wolf |
177,752 |
2010 |
|
11 |
|
Genco Titus |
177,729 |
2007 |
|
12 |
|
Baltic Bear |
177,717 |
2010 |
|
13 |
|
Genco Tiberius |
175,874 |
2007 |
|
14 |
|
Genco Commodus |
169,098 |
2009 |
|
15 |
|
Genco Hadrian |
169,025 |
2008 |
|
16 |
|
Genco Maximus |
169,025 |
2009 |
|
17 |
|
Genco Claudius |
169,001 |
2010 |
| Panamax |
|
|
|
1 |
|
Genco Thunder |
76,588 |
2007 |
|
2 |
|
Genco Raptor |
76,499 |
2007 |
|
3 |
|
Genco Beauty |
73,941 |
1999 |
|
4 |
|
Genco Vigour |
73,941 |
1999 |
|
5 |
|
Genco Knight |
73,941 |
1999 |
| Ultramax |
|
|
|
1 |
|
Baltic Hornet |
63,574 |
2014 |
|
2 |
|
Baltic Mantis |
63,470 |
2015 |
|
3 |
|
Baltic Scorpion |
63,462 |
2015 |
|
4 |
|
Baltic Wasp |
63,389 |
2015 |
|
5 |
|
Genco Weatherly |
61,556 |
2014 |
|
6 |
|
Genco Columbia |
60,294 |
2016 |
| Supramax |
|
|
|
1 |
|
Genco Hunter |
58,729 |
2007 |
|
2 |
|
Genco Auvergne |
58,020 |
2009 |
|
3 |
|
Genco Rhone |
58,018 |
2011 |
|
4 |
|
Genco Ardennes |
58,018 |
2009 |
|
5 |
|
Genco Brittany |
58,018 |
2010 |
|
6 |
|
Genco Languedoc |
58,018 |
2010 |
|
7 |
|
Genco Pyrenees |
58,018 |
2010 |
|
8 |
|
Genco Bourgogne |
58,018 |
2010 |
|
9 |
|
Genco Aquitaine |
57,981 |
2009 |
|
10 |
|
Genco Warrior |
55,435 |
2005 |
|
11 |
|
Genco Predator |
55,407 |
2005 |
|
12 |
|
Genco Provence |
55,317 |
2004 |
|
13 |
|
Genco Picardy |
55,257 |
2005 |
|
14 |
|
Genco Normandy |
53,596 |
2007 |
|
15 |
|
Baltic Jaguar |
53,474 |
2009 |
|
16 |
|
Baltic Leopard |
53,447 |
2009 |
|
17 |
|
Baltic Cougar |
53,432 |
2009 |
|
18 |
|
Genco Loire |
53,430 |
2009 |
|
19 |
|
Genco Lorraine |
53,417 |
2009 |
|
20 |
|
Baltic Panther |
53,351 |
2009 |
| Handymax |
|
|
|
1 |
|
Genco Muse |
48,913 |
2001 |
| Handysize |
|
|
|
1 |
|
Genco Spirit |
34,432 |
2011 |
|
2 |
|
Genco Mare |
34,428 |
2011 |
|
3 |
|
Genco Ocean |
34,409 |
2010 |
|
4 |
|
Baltic Wind |
34,409 |
2009 |
|
5 |
|
Baltic Cove |
34,403 |
2010 |
|
6 |
|
Genco Avra |
34,391 |
2011 |
|
7 |
|
Baltic Breeze |
34,386 |
2010 |
|
8 |
|
Genco Bay |
34,296 |
2010 |
|
9 |
|
Baltic Hare |
31,887 |
2009 |
|
10 |
|
Baltic Fox |
31,883 |
2010 |
|
11 |
|
Genco Explorer |
29,952 |
1999 |
|
12 |
|
Genco Champion |
28,445 |
2006 |
|
13 |
|
Genco Challenger |
28,428 |
2003 |
|
14 |
|
Genco
Charger |
28,398 |
2005 |
|
|
|
|
|
|
About Genco Shipping & Trading
Limited
Genco Shipping & Trading Limited transports
iron ore, coal, grain, steel products and other drybulk cargoes
along worldwide shipping routes. As of November 7, 2018, Genco
Shipping & Trading Limited’s fleet consists of 17 Capesize,
five Panamax, six Ultramax, 20 Supramax, one Handymax and 14
Handysize vessels with an aggregate capacity of approximately
5,376,000 dwt.
Conference Call Announcement
Genco Shipping & Trading Limited will hold a
conference call on Thursday, November 8, 2018 at 8:30 a.m. Eastern
Time to discuss its 2018 third quarter financial results. The
conference call and a presentation will be simultaneously webcast
and will be available on the Company’s website,
www.GencoShipping.com. To access the conference call, dial (785)
424-1802 or (877) 830-2636 and enter passcode 8797872. A replay of
the conference call can also be accessed for two weeks by dialing
(888) 203-1112 or (719) 457-0820 and entering the passcode 8797872.
The Company intends to place additional materials related to the
earnings announcement, including a slide presentation, on its
website prior to the conference call.
Website Information
We intend to use our website,
www.GencoShipping.com, as a means of disclosing material non-public
information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included in our website’s
Investor Relations section. Accordingly, investors should monitor
the Investor Relations portion of our website, in addition to
following our press releases, SEC filings, public conference calls,
and webcasts. To subscribe to our e-mail alert service, please
click the “Receive E-mail Alerts” link in the Investor Relations
section of our website and submit your email address. The
information contained in, or that may be accessed through, our
website is not incorporated by reference into or a part of this
document or any other report or document we file with or furnish to
the SEC, and any references to our website are intended to be
inactive textual references only.
"Safe Harbor" Statement Under the Private
Securities Litigation Reform Act of 1995
This presentation contains forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements use words such as “anticipate,”
“budget,” “estimate,” “expect,” “project,” “intend,” “plan,”
“believe,” and other words and terms of similar meaning in
connection with a discussion of potential future events,
circumstances or future operating or financial performance. These
forward-looking statements are based on management’s current
expectations and observations. Included among the factors that, in
our view, could cause actual results to differ materially from the
forward looking statements contained in this report are the
following: (i) declines or sustained weakness in demand in the
drybulk shipping industry; (ii) continuation of weakness or
declines in drybulk shipping rates; (iii) changes in the supply of
or demand for drybulk products, generally or in particular regions;
(iv) changes in the supply of drybulk carriers including
newbuilding of vessels or lower than anticipated scrapping of older
vessels; (v) changes in rules and regulations applicable to the
cargo industry, including, without limitation, legislation adopted
by international organizations or by individual countries and
actions taken by regulatory authorities; (vi) increases in costs
and expenses including but not limited to: crew wages, insurance,
provisions, lube, oil, bunkers, repairs, maintenance and general,
administrative, and management fee expenses; (vii) whether our
insurance arrangements are adequate; (viii) changes in general
domestic and international political conditions; (ix) acts of war,
terrorism, or piracy; (x) changes in the condition of the Company’s
vessels or applicable maintenance or regulatory standards (which
may affect, among other things, our anticipated drydocking or
maintenance and repair costs) and unanticipated drydock
expenditures; (xi) the Company’s acquisition or disposition of
vessels; (xii) the amount of offhire time needed to complete
repairs on vessels and the timing and amount of any reimbursement
by our insurance carriers for insurance claims, including offhire
days; (xiii) the completion of definitive documentation with
respect to charters; (xiv) charterers’ compliance with the terms of
their charters in the current market environment; (xv) the extent
to which our operating results continue to be affected by weakness
in market conditions and charter rates; (xvi) our ability to
maintain contracts that are critical to our operation, to obtain
and maintain acceptable terms with our vendors, customers and
service providers and to retain key executives, managers and
employees; (xvii) the completion of documentation for vessel
transactions and the performance of the terms thereof by buyers or
sellers of vessels and us; (xviii) the terms of definitive
documentation for the purchase and installation of scrubbers and
our ability to have scrubbers installed within the price range and
time frame anticipated; (xix) our ability to obtain financing for
scrubbers on acceptable terms; (xx) the relative cost and
availability of low sulfur and high sulfur fuel; (xxi) worldwide
compliance with IMO 2020 regulations and other factors listed from
time to time in our public filings with the Securities and Exchange
Commission including, without limitation, the Company’s Annual
Report on Form 10-K for the year ended December 31, 2017 and its
subsequent reports on Form 10-Q and Form 8-K. Our ability to pay
dividends in any period will depend upon various factors, including
the limitations under any credit agreements to which we may be a
party, applicable provisions of Marshall Islands law and the final
determination by the Board of Directors each quarter after its
review of our financial performance. The timing and amount of
dividends, if any, could also be affected by factors affecting cash
flows, results of operations, required capital expenditures, or
reserves. As a result, the amount of dividends actually paid may
vary. We do not undertake any obligation to update or revise any
forward‑looking statements, whether as a result of new information,
future events or otherwise.
CONTACT:Apostolos ZafoliasChief
Financial OfficerGenco Shipping & Trading Limited(646)
443-8550
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