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, 2019.
The following financial review discusses the
results for the three and nine months ended September 30, 2019 and
September 30, 2018.
Third Quarter 2019 and
Year-to-Date Highlights
- Initiated a regular quarterly
dividend policy with a dividend of $0.175 per share for the third
quarter of 2019• Payable on or about December 5, 2019 to all
shareholders of record as of November 21, 2019
- Declared a special dividend of
$0.325 per share, utilizing net cash proceeds from recently agreed
upon vessel sales after paying down associated debt• Payable
on or about December 5, 2019, to all shareholders of record as of
November 21, 2019
- Following the payment of this
aggregate dividend of $0.50 per share, Genco intends to maintain an
industry leading balance sheet with one of the lowest net leverage
positions in the peer group
- Amended our credit facilities to
provide more flexibility on capital allocation
- Continued to execute our
comprehensive IMO 2020 strategy• Have installed exhaust gas
cleaning systems (“scrubbers”) on 12 of our 17 Capesize vessels to
date
- In October 2019, we completed the
sale of two of our oldest Handysize vessels• Genco Challenger,
2003-built, delivered to buyers on October 10, 2019• Genco
Champion, 2006-built, delivered to buyers on October 21, 2019
- We also agreed to sell our
remaining two Panamax vessels• Genco Raptor and Genco Thunder,
both 2007-built, are to be sold for an aggregate price of $20.6
million• Both vessels are expected to deliver to their new
buyers during the fourth quarter of 2019
- Recorded a net loss of $14.6
million for the third quarter of 2019• Basic and diluted loss
per share of $0.35• Adjusted net loss of $2.4 million or basic
and diluted loss per share of $0.06, excluding $12.2 million in
non-cash vessel impairment charges
- Net revenue (voyage revenues minus
voyage expenses and charter hire expenses) totaled $55.3 million
during the third quarter of 2019
- Our average daily fleet-wide time
charter equivalent, or TCE1, for Q3 2019 was $11,687 marking an
improvement of 58% compared to Q2 2019
- Based on current fixtures to date,
we estimate our fourth quarter 2019 TCE to date to be $14,041 for
64% of our fleet-wide available days, an improvement of 20%
compared to Q3 2019
- Recorded adjusted EBITDA of $22.7
million during Q3 20191
John C. Wobensmith, Chief Executive Officer,
commented, “We are pleased to return cash to shareholders,
highlighting favorable drybulk market fundamentals, Genco’s
compelling prospects, and the strength of our balance sheet and
liquidity position. With the declaration of both a sizeable
special dividend and the initiation of a regular quarterly dividend
policy, we are well positioned to create significant shareholder
value, while maintaining our balance sheet strength. Today’s
important development, which follows our acquisitions of fuel
efficient, modern vessels last year, advances our capital
allocation strategy and is a testament to the hard work our team
has put into optimizing our leading platform over the past several
years.”
Mr. Wobensmith continued, “During the third
quarter, we have taken additional steps to strengthen Genco’s
prospects. With the completion of our most significant drydocking
quarter in Genco’s history behind us, we have fitted over two
thirds of our Capesize fleet with exhaust gas cleaning systems to
date, solidifying our ability to take advantage of a strengthening
drybulk market in the fourth quarter and into 2020. As we continue
to implement our comprehensive IMO strategy and near our target of
100% planned scrubber installation on our Capesize vessels ahead of
January 1, 2020, we will have no scheduled drydockings for this
portion of our fleet in 2020. Based on this proactive
approach to investing in our fleet, we are poised to capture the
upside of positive supply and demand fundamentals going forward,
maximizing fleet-wide utilization in a drybulk market that has
improved sequentially in each of the last three years.”
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.
Initiation of Regular Quarterly
Cash Dividend Policy and Declaration of Special
Dividend
Credit Facility Amendments
Providing Further Flexibility on Capital
Allocation
Utilizing its industry leading balance sheet,
Genco initiated a regular quarterly cash dividend policy of $0.175
per share, returning cash to shareholders. The Company has declared
its first such dividend of $0.175 per share for the third quarter
of 2019. This dividend is payable on or about December 5, 2019, to
all shareholders of record as of November 21, 2019.
Also, utilizing net cash proceeds from the
recently announced agreed upon sales of four vessels after the
repayment of associated debt, Genco has declared a $0.325 per share
special dividend. This dividend is payable on or about December 5,
2019, to all shareholders of record as of November 21,
2019.
Management and the Board of Directors took into
account several considerations with regard to the special dividend
and the initiation of a quarterly dividend. These include Genco’s
solid balance sheet and strong liquidity position as well as
strengthening drybulk market fundamentals. Following the payment of
this cumulative $0.50 per share dividend, Genco expects to continue
to have one of the lowest net leverage positions among its peer
group.
In relation to the initiation of dividends, we
have amended previous restrictions on dividends and share
repurchases in our credit facilities, providing Genco with the
flexibility to use its strong liquidity position to improve
shareholder returns in the form of dividends or share repurchases.
We have amended the dividend and share repurchase covenants
in our credit facilities such that Genco may pay dividends as
follows: 1) to the extent our total unrestricted cash and cash
equivalents is greater than $100 million and 18.75% of total
indebtedness, whichever is higher; 2) if the collateral maintenance
test ratio is more than 200%, or 3) in an amount limited to 50% of
the previous quarter’s net income. Dividends going forward remain
subject to approval of our Board of Directors each quarter after
its review of our financial performance and will depend upon
various factors, including limitations under our credit agreements
and applicable provisions of Marshall Islands law.
For U.S. federal income tax purposes, we
currently estimate that the recently declared special dividend and
quarterly dividend will first be treated as a nontaxable return of
capital to stockholders to the extent of their basis in our common
stock and then as capital gain, although the tax treatment of the
dividends will be based in part on our earnings and profits for the
year ending December 31, 2019, which will not be determined until
after the end of this year. For further details, please refer
to our current report on Form 8-K filed today to which this release
is an exhibit.
IMO 2020
Update
To date, we have installed scrubbers on 12 of
our 17 Capesize vessels, representing a 71% completion rate. We
currently have three other vessels in the shipyard being fitted
with scrubbers and expect to have the remaining two Capesize
vessels enter the shipyard to commence installation in the coming
weeks. Therefore, we expect to complete our scrubber
installation program ahead of the January 1, 2020 International
Maritime Organization’s (“IMO”) compliance date limiting sulfur
content in fuel consumed by vessels from 3.5% to 0.5% on a global
basis. We expect that, in addition to meeting the compliance
date, this will provide us with experience operating these systems
prior to the regulations entering into force. We anticipate
that our remaining fleet of minor bulk vessels will consume
ultra-low sulfur compliant fuel following implementation of the IMO
regulations.
The third quarter of 2019 marked our busiest
quarter of drydocking of the year and a record for the Company. We
had 22 vessels enter the shipyard for scrubber installations,
ballast water treatment system installations, scheduled special
surveys and other repairs, resulting in associated offhire time of
601 days for the quarter.
With our entire Capesize fleet of 17 vessels to
enter the shipyard this year for scrubber fitting in addition to
any scheduled special surveys and ballast water treatment system
installations, 2019 has represented a year of substantial capital
expenditure in this core portion of our fleet. This also limited
our commercial trading capabilities in the short-term. This
resulted in our Capesize fleet remaining in the Pacific basin, a
region that saw rates trade at a discount to the Atlantic basin,
notwithstanding our long-term commercial strategy that entails a
more dynamic vessel positioning to better capture market
fundamentals. We view this as an investment in our Capesize fleet
this year as we look to maximize Capesize utilization in 2020,
since we will have no scheduled drydockings for these vessels,
positioning Genco to capture market upside potential going
forward.
Based on current fixtures to date, we estimate
the following to be our TCE to date for the fourth quarter of 2019.
These initial fixtures for this period are reflective of more
normalized trading patterns, particularly on our Capesize vessels,
as we are over 70% complete with our scrubber fitting program.
- Capesize: $19,779 for 62% of the available Q4 2019 days
- Panamax: $12,322 for 51% of the available Q4 2019 days
- Ultramax and Supramax: $12,113 for 67% of the available Q4 2019
days
- Handysize: $11,838 for 62% of the available Q4 2019 days
- Fleet average: $14,041 for 64% of the available Q4 2019
days
Fleet
Update
We continue to divest our older, less efficient
tonnage as part of our efforts to renew our fleet while reducing
our carbon footprint. In October 2019, the Company completed the
sales of two Handysize vessels. Specifically, we sold the Genco
Challenger, a 2003-built Handysize vessel, on October 10, 2019, and
the Genco Champion, a 2006-built Handysize vessel, on October 21,
2019. These ships were sold for gross prices of $5.3 million and
$6.6 million, respectively.
We have also agreed to sell our two remaining
Panamaxes which are expected to deliver to their new owners in Q4
2019. Specifically, we reached agreements to sell the Genco Thunder
and the Genco Raptor, both 2007-built Panamaxes, for a gross price
of $20.6 million in aggregate. Following the completion of these
two sales, Genco will have fully exited the Panamax sector as we
continue to execute our barbell approach to fleet composition and
create a more focused fleet.
Financial Review: 2019 Third
Quarter
The Company recorded a net loss for the third
quarter of 2019 of $14.6 million, or $0.35 basic and diluted net
loss per share. Comparatively, for the three months ended September
30, 2018, the Company recorded net income of $5.7 million, or $0.14
basic and diluted net earnings per share.
The Company’s revenues increased to $103.8
million for the three months ended September 30, 2019, as compared
to the $92.3 million recorded for the three months ended September
30, 2018. The increase in revenues was primarily due to increased
employment of vessels on spot market voyage charters partially
offset by the effect of trading our Capesize vessels primarily in
the Pacific basin and offhire related to scrubber installations,
ballast water treatment system installations and special surveys as
noted above. The average daily time charter equivalent, or
TCE, rates obtained by the Company’s fleet was $11,687 per day for
the three months ended September 30, 2019 as compared to $10,696
per day for the three months ended September 30, 2018. In the third
quarter of 2019, the drybulk market improved significantly reaching
multi-year highs in the process. Specifically, the Baltic Capesize
Index was supported by record steel production in China and
increased Brazilian iron ore shipments under a backdrop of
constrained vessel capacity due to the global fleet’s preparation
ahead of IMO 2020.
Total operating expenses were $111.5 million for
the three months ended September 30, 2019 compared to $80.2 million
for the three months ended September 30, 2018. During the three
months ended September 30, 2019, $12.2 million in non-cash
impairment charges were recorded in relation to the anticipated
sale of the Genco Thunder, the Genco Champion and the Genco Raptor.
During the three months ended September 30, 2018, a $1.5 million
gain on sale of vessels was recorded. Voyage expenses rose to $43.0
million for the three months ended September 30, 2019 versus $31.5
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 decreased
to $24.7 million for the three months ended September 30, 2019,
from $25.2 million for the three months ended September 30, 2018
primarily due to fewer owned vessels, partially offset by higher
drydocking related expenses. General and administrative expenses
increased to $6.1 million for the third quarter of 2019 compared to
$5.0 million for the third quarter of 2018, primarily due to an
increase in compensation related expenses as well as an increase in
professional fees. Depreciation and amortization expenses increased
to $18.2 million for the three months ended September 30, 2019 from
$17.3 million for the three months ended September 30, 2018,
primarily due to depreciation expense for the six vessels delivered
during the third quarter of 2018, partially offset by a decrease in
depreciation expense for the eight vessels that were sold during
the second half of 2018 and the first quarter of 2019, as well as a
decrease for the five vessels that were impaired during the second
and third quarters of 2019.
Daily vessel operating expenses, or DVOE,
amounted to $4,631 per vessel per day for the third quarter of 2019
compared to $4,434 per vessel per day for the third quarter of
2018. The increase in DVOE was predominantly due to higher
drydocking related expenses. 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.
Apostolos Zafolias, Chief Financial Officer,
commented, “By successfully amending our credit facilities, we have
provided Genco with the ability to capitalize on its strong
liquidity position to return cash to shareholders. Specifically, we
have eased previous restrictions on dividends and share
repurchases, which has enabled us to declare a special dividend and
initiate a regular quarterly dividend. We appreciate the ongoing
support of our banking group and their confidence in our leading
platform, balance sheet strength and industry
fundamentals.”
Financial Review: Nine Months
2019
The Company recorded a net loss of $56.9 million
or $1.36 basic and diluted net loss per share for the nine months
ended September 30, 2019. This compares to 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. Net loss for the nine months ended
September 30, 2019 includes $26.1 million in non-cash vessel
impairment charges, a $0.2 million non-cash impairment of the
operating lease right-of-use asset, as well as a gain on sale of
vessels totaling $0.6 million. Net loss for the nine months ended
September 30, 2018, includes non-cash vessel impairment charges of
$56.6 million, a $1.5 million gain on sale of vessels as well as a
loss on debt extinguishment in the amount of $4.5 million. Revenues
increased to $280.8 million for the nine months ended September 30,
2019 compared to $255.3 million for the nine months ended September
30, 2018 primarily due to increased employment of vessels on spot
market voyage charters, partially offset by the effect of trading
our Capesize vessels primarily in the Pacific basin and offhire
related to scrubber installations, ballast water treatment system
installations and special surveys as noted above during the third
quarter of 2019. Voyage expenses increased to $127.8 million for
the nine months ended September 30, 2019 from $78.6 million for the
same period in 2018. This was primarily due to the increase
of employment of vessels on spot market voyage charters during 2019
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 decreased to $9,405 per day for the nine
months ended September 30, 2019 from $10,710 per day for the nine
months ended September 30, 2018, due to lower rates achieved by the
majority of the vessels in our fleet. Total operating expenses for
the nine months ended September 30, 2019 and 2018 were $316.8
million and $280.8 million, respectively. Total operating expenses
include $26.1 million in non-cash vessel impairment charges, as
well as a gain on sale of vessels of $0.6 million for the nine
months ending September 30, 2019. For the nine months ended
September 30, 2018, total operating expenses include 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 as well as a gain on the sale of
vessels of $1.5 million. General and administrative expenses for
the nine months ended September 30, 2019 increased to $18.3 million
as compared to the $16.8 million in the same period of 2018. DVOE
was $4,556 versus $4,394 in the comparative periods. The increase
in DVOE was predominantly due to higher drydocking related
expenses, as well as crew related expenses. EBITDA for the nine
months ended September 30, 2019 amounted to $18.9 million compared
to $20.9 million during the prior period. During the nine months of
2019 and 2018, EBITDA included non-cash impairment charges, an
operating lease right-of-use asset non-cash impairment, gains on
sale of vessels, and loss on debt extinguishment as mentioned
above. Excluding these items, our adjusted EBITDA would have
amounted to $44.6 million and $80.5 million, for the respective
periods.
Liquidity and Capital
Resources
Cash Flow
Net cash provided by operating activities for
the nine months ended September 30, 2019 was $28.8 million as
compared to $43.4 million for the nine months ended September 30,
2018. Included in the net loss during the nine months ended
September 30, 2019 were $26.1 million of non-cash impairment
charges, a gain of $0.6 million arising from the sale of the Genco
Vigour, $0.9 million of non-cash lease expense and a loss of $0.2
million related to the non-cash impairment of our right-of-use
operating lease asset. 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 gain of $1.5 million arising from the
sale of two vessels and a $5.3 million payment on the $400 Million
Credit Facility. Depreciation and amortization expense for the nine
months ended September 30, 2019 increased by $3.9 million primarily
due to depreciation expense for the six vessels delivered during
the third quarter of 2018, partially offset by a decrease in
depreciation expense for the eight vessels that were sold during
the second half of 2018 and the first quarter of 2019.
Additionally, there was an $8.2 million increase in the fluctuation
in due from charterers due to the timing of payments received from
charterers and a $5.3 million increase in the fluctuation in
prepaid expenses and other current assets due to the timing of
payments. Lastly, there was a $21.2 million increase in the
fluctuation in inventories associated with vessels on spot market
voyage charters. These increases were partially offset by a
$9.7 million increase in deferred drydocking costs as there were
more vessels that completed drydocking during the nine months ended
September 30, 2019 as compared to the same period during
2018. There was also a $5.1 million and $3.1 million decrease
in the fluctuation of deferred revenue and accounts payable and
accrued expenses, respectively, due to the timing of payments
made.
Net cash used in investing activities was $31.8
million during the nine months ended September 30, 2019 as compared
to $226.5 million during the nine months ended September 30,
2018. Net cash used in investing activities during the nine
months ended September 30, 2019 consisted primarily of $24.7
million for the purchase of scrubbers for our vessels, $10.4
million for the purchase of vessels related primarily to ballast
water treatment systems and $3.6 million for the purchase of other
fixed assets due to the purchase of vessel equipment. These
cash outflows during the nine months ended September 30, 2019 were
partially offset by $6.3 million of proceeds from the sale of one
vessel during the first half of 2019. 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 used in financing activities during the
nine months ended September 30, 2019 was $33.5 million as compared
to net cash provided by financing activities of $144.2 million
during the nine months ended September 30, 2018. Net cash
used in financing activities of $33.5 million for the nine months
ended September 30, 2019 consisted primarily of the
following: $49.6 million repayment of debt under the $495
Million Credit Facility; $4.7 million repayment of debt under the
$108 Million Credit Facility; $0.6 million payment of deferred
financing costs; and $0.1 million payment of common stock issuance
costs. These cash outflows were partially offset by total
drawdowns of $21.5 million under the $495 Million Credit Facility
during the nine months ended September 30, 2019. 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 on the $460 Million Credit Facility, the $108.0
million drawdown on the $108 Million Credit Facility and the net
proceeds from the issuance of common stock 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 third quarter of 2018. On June 5, 2018, the $495 Million
Credit Facility refinanced the following three existing credit
facilities with its original $460 million tranche; the $400 Million
Credit Facility, the $98 Million Credit Facility and the 2014 Term
Loan Facilities. Additionally, on February 28, 2019, the $495
Million Credit Facility was amended to add a tranche of $35 million
for the purchase of scrubbers in addition to the original $460
million tranche used for the refinancing on June 5, 2018.
Capital Expenditures
We make capital expenditures from time to time
in connection with vessel acquisitions. As of November 6, 2019, our
fleet consists of 17 Capesize, two Panamax, six Ultramax, 20
Supramax, and 11 Handysize vessels with an aggregate capacity of
approximately 5,018,000 dwt and an average age of 9.6 years.
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
as well as capital expenditures for the installation of scrubbers
on our 17 Capesize vessels. Through September 30, 2019, we have
paid $24.7 million in cash installments towards our scrubber
program and have drawn down $21.5 million under the scrubber
tranche under our $495 Million Credit Facility. We anticipate
paying approximately $13.5 million of additional cash installments
towards our scrubber program, for which we can draw down
approximately $11.5 million under our credit facility.
During the first nine months of 2019, 17 vessels
completed their respective drydockings. An additional seven of our
vessels began their drydockings during the third quarter and did
not complete until the fourth quarter of 2019. In addition to these
seven vessels, we estimate that nine more of our vessels will be
drydocked during the remainder of 2019.
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, scrubber costs and scheduled off-hire days
for our fleet for the remainder of 2019 and 2020 to be:
|
Q4 2019 |
2020 |
Estimated Drydock Costs (1) |
$6.0 million |
$10.5 million |
Estimated BWTS Costs (2) |
$1.6 million |
$4.7 million |
Estimated Scrubber Costs (3) |
$13.5 million |
- |
Estimated Offhire Days (4) |
423 |
290 |
|
|
|
(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. (2) Estimated costs associated with the
installation of ballast water treatment systems is expected to be
funded with cash on hand. (3) We anticipate funding the acquisition
and installation of scrubbers to be fitted on the remainder of our
Capesize fleet through a combination of commercial bank debt and
cash on hand. (4) Actual length will vary based on the condition of
the vessel, yard schedules and other factors.
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 Ended September 30, 2019 |
|
Three Months Ended September 30, 2018 |
|
Nine Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2018 |
|
(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 |
$ |
103,776 |
|
|
$ |
92,263 |
|
|
$ |
280,790 |
|
|
$ |
255,336 |
|
Total revenues |
|
103,776 |
|
|
|
92,263 |
|
|
|
280,790 |
|
|
|
255,336 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Voyage expenses |
|
42,967 |
|
|
|
31,475 |
|
|
|
127,789 |
|
|
|
78,551 |
|
Vessel operating expenses |
|
24,711 |
|
|
|
25,155 |
|
|
|
72,260 |
|
|
|
72,642 |
|
Charter hire expenses |
|
5,475 |
|
|
|
723 |
|
|
|
12,743 |
|
|
|
1,231 |
|
General and administrative expenses (inclusive of nonvested stock
amortization expense of $0.6 million, $0.6 million, $1.6
million and $1.8 million, respectively) |
|
6,144 |
|
|
|
5,033 |
|
|
|
18,253 |
|
|
|
16,761 |
|
Technical management fees |
|
1,885 |
|
|
|
2,028 |
|
|
|
5,710 |
|
|
|
5,926 |
|
Depreciation and amortization |
|
18,184 |
|
|
|
17,269 |
|
|
|
54,532 |
|
|
|
50,605 |
|
Impairment of vessel assets |
|
12,182 |
|
|
|
- |
|
|
|
26,078 |
|
|
|
56,586 |
|
Gain on sale of vessels |
|
- |
|
|
|
(1,509 |
) |
|
|
(611 |
) |
|
|
(1,509 |
) |
Total operating expenses |
|
111,548 |
|
|
|
80,174 |
|
|
|
316,754 |
|
|
|
280,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
(7,772 |
) |
|
|
12,089 |
|
|
|
(35,964 |
) |
|
|
(25,457 |
) |
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
Other income |
|
86 |
|
|
|
213 |
|
|
|
523 |
|
|
|
272 |
|
Interest income |
|
892 |
|
|
|
1,062 |
|
|
|
3,292 |
|
|
|
2,743 |
|
Interest expense |
|
(7,797 |
) |
|
|
(7,656 |
) |
|
|
(24,496 |
) |
|
|
(24,249 |
) |
Impairment of right-of-use asset |
|
- |
|
|
|
- |
|
|
|
(223 |
) |
|
|
- |
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,533 |
) |
Other expense |
|
(6,819 |
) |
|
|
(6,381 |
) |
|
|
(20,904 |
) |
|
|
(25,767 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(14,591 |
) |
|
$ |
5,708 |
|
|
$ |
(56,868 |
) |
|
$ |
(51,224 |
) |
|
|
|
|
|
|
|
|
Net (loss) earnings per share
- basic |
$ |
(0.35 |
) |
|
$ |
0.14 |
|
|
$ |
(1.36 |
) |
|
$ |
(1.37 |
) |
|
|
|
|
|
|
|
|
Net (loss) earnings per share
- diluted |
$ |
(0.35 |
) |
|
$ |
0.14 |
|
|
$ |
(1.36 |
) |
|
$ |
(1.37 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding - basic |
|
41,749,200 |
|
|
|
41,618,187 |
|
|
|
41,739,287 |
|
|
|
37,263,200 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding - diluted |
|
41,749,200 |
|
|
|
41,821,008 |
|
|
|
41,739,287 |
|
|
|
37,263,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
BALANCE SHEET DATA
(Dollars in thousands): |
(unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
165,876 |
|
|
$ |
197,499 |
|
Restricted cash |
|
- |
|
|
|
4,947 |
|
Due from charterers, net |
|
20,391 |
|
|
|
22,306 |
|
Prepaid expenses and other current assets |
|
9,996 |
|
|
|
10,449 |
|
Inventories |
|
22,982 |
|
|
|
29,548 |
|
Vessels held for sale |
|
21,819 |
|
|
|
5,702 |
|
Total current assets |
|
241,064 |
|
|
|
270,451 |
|
|
|
|
|
Noncurrent assets: |
|
|
|
Vessels, net of accumulated depreciation of $272,074 and $244,529,
respectively |
|
1,290,741 |
|
|
|
1,344,870 |
|
Deferred drydock, net |
|
16,039 |
|
|
|
9,544 |
|
Fixed assets, net |
|
5,229 |
|
|
|
2,290 |
|
Operating lease right-of-use assets |
|
8,576 |
|
|
|
- |
|
Restricted cash |
|
315 |
|
|
|
315 |
|
Total noncurrent assets |
|
1,320,900 |
|
|
|
1,357,019 |
|
|
|
|
|
Total assets |
$ |
1,561,964 |
|
|
$ |
1,627,470 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
41,145 |
|
|
$ |
29,143 |
|
Current portion of long-term debt |
|
70,111 |
|
|
|
66,320 |
|
Deferred revenue |
|
6,325 |
|
|
|
6,404 |
|
Current operating lease liabilities |
|
1,655 |
|
|
|
- |
|
Total current liabilities |
|
119,236 |
|
|
|
101,867 |
|
|
|
|
|
Noncurrent liabilities |
|
|
|
Long-term operating lease liabilities |
|
10,253 |
|
|
|
- |
|
Deferred rent |
|
- |
|
|
|
3,468 |
|
Long-term debt, net of deferred financing costs of $14,054 and
$16,272, respectively |
|
434,440 |
|
|
|
468,828 |
|
Total noncurrent liabilities |
|
444,693 |
|
|
|
472,296 |
|
|
|
|
|
Total liabilities |
|
563,929 |
|
|
|
574,163 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity: |
|
|
|
Common stock |
|
416 |
|
|
|
416 |
|
Additional paid-in capital |
|
1,741,759 |
|
|
|
1,740,163 |
|
Retained deficit |
|
(744,140 |
) |
|
|
(687,272 |
) |
Total equity |
|
998,035 |
|
|
|
1,053,307 |
|
Total liabilities and equity |
$ |
1,561,964 |
|
|
$ |
1,627,470 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2018 |
STATEMENT OF CASH
FLOWS (Dollars in thousands): |
(unaudited) |
|
|
|
|
Cash flows from
operating activities |
|
|
|
Net loss |
$ |
(56,868 |
) |
|
$ |
(51,224 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
54,532 |
|
|
|
50,605 |
|
Amortization of deferred financing costs |
|
2,828 |
|
|
|
2,110 |
|
PIK interest, net |
|
- |
|
|
|
(5,341 |
) |
Noncash operating lease expense |
|
911 |
|
|
|
- |
|
Amortization of nonvested stock compensation expense |
|
1,596 |
|
|
|
1,776 |
|
Impairment of right-of-use asset |
|
223 |
|
|
|
- |
|
Impairment of vessel assets |
|
26,078 |
|
|
|
56,586 |
|
Gain on sale of vessels |
|
(611 |
) |
|
|
(1,509 |
) |
Loss on debt extinguishment |
|
- |
|
|
|
4,533 |
|
Insurance proceeds for protection and indemnity claims |
|
413 |
|
|
|
268 |
|
Insurance proceeds for loss of hire claims |
|
- |
|
|
|
58 |
|
Change in assets and liabilities: |
|
|
|
Decrease (increase) in due from charterers |
|
1,915 |
|
|
|
(6,329 |
) |
Increase in prepaid expenses and other current assets |
|
(655 |
) |
|
|
(5,966 |
) |
Decrease (increase) in inventories |
|
6,566 |
|
|
|
(14,647 |
) |
Decrease in other noncurrent assets |
|
- |
|
|
|
514 |
|
Increase in accounts payable and accrued expenses |
|
5,061 |
|
|
|
8,169 |
|
(Decrease) increase in deferred revenue |
|
(79 |
) |
|
|
5,017 |
|
Decrease in operating lease liabilities |
|
(1,187 |
) |
|
|
- |
|
Increase in deferred rent |
|
- |
|
|
|
988 |
|
Deferred drydock costs incurred |
|
(11,965 |
) |
|
|
(2,233 |
) |
Net cash provided by operating activities |
|
28,758 |
|
|
|
43,375 |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
Purchase of vessels, including deposits |
|
(10,392 |
) |
|
|
(239,695 |
) |
Purchase of scrubbers (capitalized in Vessels) |
|
(24,736 |
) |
|
|
- |
|
Purchase of other fixed assets |
|
(3,590 |
) |
|
|
(888 |
) |
Net proceeds from sale of vessels |
|
6,309 |
|
|
|
10,626 |
|
Insurance proceeds for hull and machinery claims |
|
612 |
|
|
|
3,466 |
|
Net cash used in investing activities |
|
(31,797 |
) |
|
|
(226,491 |
) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Proceeds from the $108 Million Credit Facility |
|
- |
|
|
|
108,000 |
|
Repayments on the $108 Million Credit Facility |
|
(4,740 |
) |
|
|
- |
|
Proceeds from the $495 Million Credit Facility |
|
21,500 |
|
|
|
460,000 |
|
Repayments on the $495 Million Credit Facility |
|
(49,575 |
) |
|
|
- |
|
Repayments on the $400 Million Credit Facility |
|
- |
|
|
|
(399,600 |
) |
Repayments on the $98 Million Credit Facility |
|
- |
|
|
|
(93,939 |
) |
Repayments on the 2014 Term Loan Facilities |
|
- |
|
|
|
(25,544 |
) |
Payment of debt extinguishment costs |
|
- |
|
|
|
(2,962 |
) |
Proceeds from issuance of common stock |
|
- |
|
|
|
110,249 |
|
Payment of common stock issuance costs |
|
(105 |
) |
|
|
(496 |
) |
Payment of deferred financing costs |
|
(611 |
) |
|
|
(11,499 |
) |
Net cash (used in) provided by financing activities |
|
(33,531 |
) |
|
|
144,209 |
|
|
|
|
|
Net decrease in cash, cash
equivalents and restricted cash |
|
(36,570 |
) |
|
|
(38,907 |
) |
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
202,761 |
|
|
|
204,946 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
166,191 |
|
|
$ |
166,039 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
Adjusted
Net Loss Reconciliation |
(unaudited) |
Net loss |
$ |
(14,591 |
) |
+ |
Impairment of vessel assets |
|
12,182 |
|
|
Adjusted net
loss |
$ |
(2,409 |
) |
|
|
|
|
Adjusted net loss per share -
basic |
$ |
(0.06 |
) |
|
Adjusted net loss per share -
diluted |
$ |
(0.06 |
) |
|
|
|
|
Weighted average common shares
outstanding - basic |
|
41,749,200 |
|
|
Weighted average common shares
outstanding - diluted |
|
41,749,200 |
|
|
|
|
|
Weighted average common shares
outstanding - basic as per financial statements |
|
41,749,200 |
|
|
Dilutive effect of stock
options |
|
- |
|
|
Dilutive effect of restricted
stock awards |
|
- |
|
|
Weighted average common shares
outstanding - diluted as adjusted |
|
41,749,200 |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
Three Months Ended September 30, 2018 |
|
Nine Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2018 |
|
|
(Dollars in thousands) |
|
(Dollars in thousands) |
EBITDA
Reconciliation: |
(unaudited) |
|
(unaudited) |
Net (loss)
income |
$ |
(14,591 |
) |
|
$ |
5,708 |
|
|
$ |
(56,868 |
) |
|
$ |
(51,224 |
) |
+ |
Net interest expense |
|
6,905 |
|
|
|
6,594 |
|
|
|
21,204 |
|
|
|
21,506 |
|
+ |
Depreciation and
amortization |
|
18,184 |
|
|
|
17,269 |
|
|
|
54,532 |
|
|
|
50,605 |
|
|
EBITDA(1) |
$ |
10,498 |
|
|
$ |
29,571 |
|
|
$ |
18,868 |
|
|
$ |
20,887 |
|
|
|
|
|
|
|
|
|
|
+ |
Impairment of vessel
assets |
|
12,182 |
|
|
|
- |
|
|
|
26,078 |
|
|
|
56,586 |
|
+ |
Impairment of right-of-use
asset |
|
- |
|
|
|
- |
|
|
|
223 |
|
|
|
- |
|
- |
Gain on sale of vessels |
|
- |
|
|
|
(1,509 |
) |
|
|
(611 |
) |
|
|
(1,509 |
) |
+ |
Loss on debt
extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,533 |
|
|
Adjusted
EBITDA |
$ |
22,680 |
|
|
$ |
28,062 |
|
|
$ |
44,558 |
|
|
$ |
80,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
FLEET
DATA: |
(unaudited) |
|
(unaudited) |
Total number of
vessels at end of period |
|
58 |
|
|
|
64 |
|
|
|
58 |
|
|
|
64 |
|
Average number of
vessels (2) |
|
58.0 |
|
|
|
61.7 |
|
|
|
58.1 |
|
|
|
60.6 |
|
Total ownership
days for fleet (3) |
|
5,336 |
|
|
|
5,673 |
|
|
|
15,861 |
|
|
|
16,533 |
|
Total chartered-in
days (4) |
|
430 |
|
|
|
65 |
|
|
|
1,071 |
|
|
|
114 |
|
Total available
days for fleet (5) |
|
5,165 |
|
|
|
5,680 |
|
|
|
15,984 |
|
|
|
16,505 |
|
Total available
days for owned fleet (6) |
|
4,735 |
|
|
|
5,615 |
|
|
|
14,914 |
|
|
|
16,391 |
|
Total operating
days for fleet (7) |
|
5,130 |
|
|
|
5,623 |
|
|
|
15,737 |
|
|
|
16,318 |
|
Fleet utilization
(8) |
|
98.9 |
% |
|
|
98.5 |
% |
|
|
97.9 |
% |
|
|
98.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
DAILY RESULTS: |
|
|
|
|
|
|
|
Time charter
equivalent (9) |
$ |
11,687 |
|
|
$ |
10,696 |
|
|
$ |
9,405 |
|
|
$ |
10,710 |
|
Daily vessel
operating expenses per vessel (10) |
|
4,631 |
|
|
|
4,434 |
|
|
|
4,556 |
|
|
|
4,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
FLEET
DATA: |
(unaudited) |
|
(unaudited) |
Ownership days |
|
|
|
|
|
|
|
Capesize |
|
1,564.0 |
|
|
|
1,334.5 |
|
|
|
4,641.0 |
|
|
|
3,687.5 |
|
Panamax |
|
184.0 |
|
|
|
497.1 |
|
|
|
573.2 |
|
|
|
1,583.1 |
|
Ultramax |
|
552.0 |
|
|
|
455.2 |
|
|
|
1,638.0 |
|
|
|
1,179.2 |
|
Supramax |
|
1,840.0 |
|
|
|
1,932.0 |
|
|
|
5,460.0 |
|
|
|
5,733.0 |
|
Handymax |
|
- |
|
|
|
92.0 |
|
|
|
- |
|
|
|
273.0 |
|
Handysize |
|
1,196.0 |
|
|
|
1,362.1 |
|
|
|
3,549.0 |
|
|
|
4,077.1 |
|
Total |
|
5,336.0 |
|
|
|
5,673.0 |
|
|
|
15,861.2 |
|
|
|
16,532.9 |
|
|
|
|
|
|
|
|
|
Chartered-in days |
|
|
|
|
|
|
|
Capesize |
|
103.5 |
|
|
|
- |
|
|
|
182.9 |
|
|
|
- |
|
Panamax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Ultramax |
|
- |
|
|
|
- |
|
|
|
96.3 |
|
|
|
- |
|
Supramax |
|
247.5 |
|
|
|
- |
|
|
|
529.3 |
|
|
|
49.4 |
|
Handymax |
|
- |
|
|
|
37.0 |
|
|
|
17.4 |
|
|
|
37.0 |
|
Handysize |
|
79.2 |
|
|
|
27.6 |
|
|
|
244.8 |
|
|
|
27.6 |
|
Total |
|
430.2 |
|
|
|
64.5 |
|
|
|
1,070.7 |
|
|
|
114.0 |
|
|
|
|
|
|
|
|
|
Available days (owned &
chartered-in fleet) |
|
|
|
|
|
|
|
Capesize |
|
1,220.2 |
|
|
|
1,288.0 |
|
|
|
4,258.9 |
|
|
|
3,608.0 |
|
Panamax |
|
183.7 |
|
|
|
496.1 |
|
|
|
572.9 |
|
|
|
1,582.1 |
|
Ultramax |
|
532.9 |
|
|
|
448.8 |
|
|
|
1,715.1 |
|
|
|
1,172.5 |
|
Supramax |
|
1,955.1 |
|
|
|
1,928.6 |
|
|
|
5,686.2 |
|
|
|
5,775.4 |
|
Handymax |
|
- |
|
|
|
129.0 |
|
|
|
17.4 |
|
|
|
299.9 |
|
Handysize |
|
1,273.1 |
|
|
|
1,389.5 |
|
|
|
3,733.9 |
|
|
|
4,067.5 |
|
Total |
|
5,165.0 |
|
|
|
5,680.0 |
|
|
|
15,984.4 |
|
|
|
16,505.4 |
|
|
|
|
|
|
|
|
|
Available days (owned
fleet) |
|
|
|
|
|
|
|
Capesize |
|
1,116.7 |
|
|
|
1,288.0 |
|
|
|
4,076.0 |
|
|
|
3,608.0 |
|
Panamax |
|
183.7 |
|
|
|
496.1 |
|
|
|
572.9 |
|
|
|
1,582.1 |
|
Ultramax |
|
532.9 |
|
|
|
448.8 |
|
|
|
1,618.8 |
|
|
|
1,172.5 |
|
Supramax |
|
1,707.6 |
|
|
|
1,928.6 |
|
|
|
5,156.9 |
|
|
|
5,726.0 |
|
Handymax |
|
- |
|
|
|
92.0 |
|
|
|
- |
|
|
|
262.9 |
|
Handysize |
|
1,193.9 |
|
|
|
1,361.9 |
|
|
|
3,489.1 |
|
|
|
4,039.9 |
|
Total |
|
4,734.8 |
|
|
|
5,615.4 |
|
|
|
14,913.7 |
|
|
|
16,391.4 |
|
|
|
|
|
|
|
|
|
Operating days |
|
|
|
|
|
|
|
Capesize |
|
1,213.5 |
|
|
|
1,286.1 |
|
|
|
4,219.0 |
|
|
|
3,606.0 |
|
Panamax |
|
183.7 |
|
|
|
472.0 |
|
|
|
565.4 |
|
|
|
1,547.9 |
|
Ultramax |
|
530.9 |
|
|
|
445.4 |
|
|
|
1,672.7 |
|
|
|
1,152.3 |
|
Supramax |
|
1,940.5 |
|
|
|
1,911.5 |
|
|
|
5,609.5 |
|
|
|
5,707.3 |
|
Handymax |
|
- |
|
|
|
124.0 |
|
|
|
17.4 |
|
|
|
292.9 |
|
Handysize |
|
1,261.2 |
|
|
|
1,383.9 |
|
|
|
3,652.9 |
|
|
|
4,011.8 |
|
Total |
|
5,129.8 |
|
|
|
5,622.8 |
|
|
|
15,736.9 |
|
|
|
16,318.2 |
|
|
|
|
|
|
|
|
|
Fleet utilization |
|
|
|
|
|
|
|
Capesize |
|
98.3 |
% |
|
|
98.5 |
% |
|
|
98.3 |
% |
|
|
99.2 |
% |
Panamax |
|
99.9 |
% |
|
|
94.9 |
% |
|
|
98.6 |
% |
|
|
97.8 |
% |
Ultramax |
|
99.6 |
% |
|
|
97.8 |
% |
|
|
97.5 |
% |
|
|
97.7 |
% |
Supramax |
|
99.0 |
% |
|
|
98.9 |
% |
|
|
97.8 |
% |
|
|
98.7 |
% |
Handymax |
|
- |
|
|
|
96.2 |
% |
|
|
- |
|
|
|
94.5 |
% |
Handysize |
|
99.1 |
% |
|
|
99.6 |
% |
|
|
97.8 |
% |
|
|
98.3 |
% |
Fleet average |
|
98.9 |
% |
|
|
98.5 |
% |
|
|
97.9 |
% |
|
|
98.5 |
% |
|
|
|
|
|
|
|
|
Average Daily
Results: |
|
|
|
|
|
|
|
Time Charter Equivalent |
|
|
|
|
|
|
|
Capesize |
$ |
16,311 |
|
|
$ |
15,168 |
|
|
$ |
11,549 |
|
|
$ |
14,716 |
|
Panamax |
|
14,747 |
|
|
|
9,319 |
|
|
|
10,935 |
|
|
|
9,513 |
|
Ultramax |
|
12,634 |
|
|
|
8,063 |
|
|
|
10,298 |
|
|
|
9,930 |
|
Supramax |
|
9,989 |
|
|
|
10,014 |
|
|
|
8,588 |
|
|
|
10,115 |
|
Handymax |
|
- |
|
|
|
11,948 |
|
|
|
- |
|
|
|
10,965 |
|
Handysize |
|
8,945 |
|
|
|
8,719 |
|
|
|
7,488 |
|
|
|
8,655 |
|
Fleet average |
|
11,687 |
|
|
|
10,696 |
|
|
|
9,405 |
|
|
|
10,710 |
|
|
|
|
|
|
|
|
|
Daily vessel operating
expenses |
|
|
|
|
|
|
|
Capesize |
$ |
5,174 |
|
|
$ |
5,172 |
|
|
$ |
5,065 |
|
|
$ |
4,849 |
|
Panamax |
|
4,809 |
|
|
|
4,039 |
|
|
|
4,538 |
|
|
|
4,149 |
|
Ultramax |
|
4,841 |
|
|
|
4,879 |
|
|
|
4,628 |
|
|
|
4,518 |
|
Supramax |
|
4,550 |
|
|
|
4,246 |
|
|
|
4,426 |
|
|
|
4,338 |
|
Handymax |
|
- |
|
|
|
3,928 |
|
|
|
- |
|
|
|
5,012 |
|
Handysize |
|
3,920 |
|
|
|
4,008 |
|
|
|
4,060 |
|
|
|
4,078 |
|
Fleet average |
|
4,631 |
|
|
|
4,434 |
|
|
|
4,556 |
|
|
|
4,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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. 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.8) We calculate fleet utilization as the number of our
operating days during a period divided by the number of ownership
days plus chartered-in days less drydocking days.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. Our estimated TCE for the fourth quarter
of 2019 is based on fixtures booked to date. Actual results may
vary based on the actual duration of voyages and other factors.
Accordingly, we are unable to provide, without unreasonable
efforts, a reconciliation of estimated TCE for the fourth quarter
to the most comparable financial measures presented in accordance
with GAAP.
|
Three Months Ended September 30, 2019 |
|
Three Months Ended September 30, 2018 |
|
Nine Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2018 |
Total
Fleet |
(unaudited) |
|
(unaudited) |
Voyage revenues (in thousands) |
$ |
103,776 |
|
$ |
92,263 |
|
$ |
280,790 |
|
$ |
255,336 |
Voyage expenses (in
thousands) |
|
42,967 |
|
|
31,475 |
|
|
127,789 |
|
|
78,551 |
Charter hire expenses (in
thousands) |
|
5,475 |
|
|
723 |
|
|
12,743 |
|
|
1,231 |
|
|
55,334 |
|
|
60,065 |
|
|
140,258 |
|
|
175,554 |
|
|
|
|
|
|
|
|
Total available days for owned
fleet |
|
4,735 |
|
|
5,615 |
|
|
14,914 |
|
|
16,391 |
Total TCE rate |
$ |
11,687 |
|
$ |
10,696 |
|
$ |
9,405 |
|
$ |
10,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
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 6, 2019, Genco
Shipping & Trading Limited’s fleet consists of 17 Capesize, two
Panamax, six Ultramax, 20 Supramax and 11 Handysize vessels with an
aggregate capacity of approximately 5,018,000 dwt and an average
age of 9.6 years.
The following table reflects Genco’s fleet list
as of November 6, 2019:
|
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 |
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 |
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
Charger |
28,398 |
2005 |
|
|
|
|
Conference Call Announcement
Genco Shipping & Trading Limited will hold a
conference call on Thursday, November 7, 2019 at 8:30 a.m. Eastern
Time to discuss its 2019 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 (323)
794-2598 or (800) 479-1004 and enter passcode 3702137. 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 3702137.
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
maintenance, repairs, and installation of equipment to comply with
applicable regulations 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
any additional financing we may seek for scrubbers on acceptable
terms; (xx) the relative cost and availability of low sulfur and
high sulfur fuel or any additional scrubbers we may seek to
install; (xxi) our ability to realize the economic benefits or
recover the cost of the scrubbers we plan to install; (xxii)
worldwide compliance with IMO 2020 regulations; (xxiii) our
financial results the year ending December 31, 2019 and other
factors relating to determination of the tax treatment of the
recently declared special dividend and quarterly dividend 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, 2018 and our 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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