Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the
“Company”), today reported its results for the three months ended
September 30, 2019.
The Company also announced that on October 22,
2019, its Board of Directors declared:
- a quarterly cash dividend of $0.02
per share on the Company’s common shares; and
- a one-time special stock dividend
to the shareholders of the Company of an aggregate of one million
shares of common stock of Scorpio Tankers Inc.
Results for the Three and Nine Months
Ended September 30, 2019 and 2018
For the third quarter of 2019, the Company’s
GAAP net loss was $1.9 million, or $0.03 per diluted share,
including:
- a non-cash gain of approximately
$1.0 million and cash dividend income of $0.5 million, or $0.02
earnings per diluted share, primarily from the Company’s equity
investment in Scorpio Tankers Inc.;
- a partial reversal of the
write-down of assets held for sale of approximately $0.2 million
related to the sale of the SBI Cougar and SBI Puma; and
- the write-off of deferred financing
costs of approximately $0.5 million, or $0.01 per diluted share,
related to the refinancing of existing debt.
For the same period in 2018, the Company’s GAAP
net loss was $0.4 million, or $0.01 per diluted share.
Total vessel revenues for the third quarter of
2019 were $63.2 million, compared to $62.5 million for the same
period in 2018. Earnings before interest, taxes, depreciation and
amortization (“EBITDA”) for the third quarters of 2019 and 2018
were $26.3 million and $28.8 million, respectively (see Non-GAAP
Financial Measures below).
For the third quarter of 2019, the Company’s
adjusted net loss was $2.1 million, or $0.03 adjusted loss per
diluted share, which excludes the impact of the partial reversal of
the write-down of assets held for sale of $0.2 million relating to
the SBI Cougar and SBI Puma. Adjusted EBITDA for the third quarter
of 2019 was $26.1 million. There were no such non-GAAP adjustments
to net loss in the third quarter of 2018 (see Non-GAAP Financial
Measures below).
For the first nine months of 2019, the Company’s
GAAP net income was $29.6 million, or $0.42 per diluted share,
including:
- a non-cash gain of approximately
$68.6 million and cash dividend income of $1.6 million, or $1.01
earnings per diluted share, primarily from the Company’s equity
investment in Scorpio Tankers Inc.;
- a write-down of assets either sold
or held for sale of approximately $12.5 million, or $0.18 per
diluted share, related to the sales of the SBI Electra, SBI
Flamenco, SBI Cougar and SBI Puma and the write-off of deferred
financing costs on the credit facilities related to the SBI Electra
and SBI Flamenco; and
- the write-off of deferred financing
costs of approximately $3.2 million, or $0.05 per diluted share,
related to the refinancing of existing debt.
For the same period in 2018, the Company’s GAAP
net loss was $5.3 million, or $0.07 per diluted share.
Total vessel revenues for the first nine months
of 2019 were $164.3 million, compared to $177.3 million for the
same period in 2018. EBITDA for the first nine months of 2019 and
2018 were $116.8 million and $77.2 million, respectively (see
Non-GAAP Financial Measures below).
For the first nine months of 2019, the Company’s
adjusted net income was $42.1 million, or $0.60 adjusted earnings
per diluted share, which excludes the impact of the write-down of
assets either sold or held for sale of $12.0 million and the
write-off of deferred financing costs on the credit facilities
relating to the SBI Electra and SBI Flamenco of $0.4 million.
Adjusted EBITDA for the first nine months of 2019 was $128.9
million. There were no such non-GAAP adjustments to net loss in the
first nine months of 2018 (see Non-GAAP Financial Measures
below).
TCE Revenue
TCE Revenue Earned during the Third Quarter of
2019 (see Non-GAAP Financial Measures)
- Our Kamsarmax fleet earned an
average of $13,149 per day
- Our Ultramax fleet earned an
average of $11,824 per day
Voyages Fixed thus far for the Fourth Quarter of
2019, as of the date hereof
- Kamsarmax fleet: approximately
$14,083 per day on average for 50% of the days
- Ultramax fleet: approximately
$13,450 per day on average for 39% of the days
Cash and Cash Equivalents
As of October 18, 2019, the Company had
approximately $89.6 million in cash and cash equivalents.
Recent Significant Events
Special Stock Dividend
On October 22, 2019, the Company’s Board of
Directors declared a one-time special stock dividend to the
shareholders of the Company of an aggregate of one million shares
of common stock of Scorpio Tankers Inc. (NYSE:STNG), a related
party. For each common share that a shareholder holds in the
Company that shareholder will receive 0.0138 shares of common stock
of Scorpio Tankers Inc., payable on or about December 13, 2019 to
all shareholders of record as of November 15, 2019 (the “Record
Date”). The Scorpio Tankers Inc. common shares to be distributed in
the special dividend were acquired from Scorpio Tankers Inc. in a
registered underwritten public offering of its common shares in
October 2018. Following the payment of the special dividend, the
Company will continue to own approximately 4.4 million common
shares of Scorpio Tankers Inc.
No fractional shares of Scorpio Tankers Inc.
will be issued in connection with the special dividend, and instead
the Company’s shareholders will receive cash in lieu of any
fractional shares. For a discussion of the material tax
consequences related to this special stock dividend, please see the
Company’s Report on Form 6-K filed with the Securities and Exchange
Commission on the date hereof.
Emanuele A. Lauro, the Company’s Chairman and
CEO, commented, “We will continue to manage Scorpio Bulkers to best
effect as we identify changes in the global marketplace. Of note,
the special dividend of a portion of our shareholding in Scorpio
Tankers is an appropriate step at this time. We believe in sharing
the benefit of recent improvement of product tanker fundamentals
with our shareholders, while we believe that the investment thesis
around IMO 2020 still has much room to run. Separately, our core
business continues to benefit from a number of short- and
medium-term catalysts. Demand for Ultramax and Kamsarmax vessels
has been resilient, particularly in light of expanded ton-miles
from new, or renewed, supply lines from West to East. In addition,
regulators and our core customers alike are defining significant
benefits for modern, fuel-efficient vessels like ours.
Notwithstanding the short-term costs of positioning new vessels or
outfitting them with scrubbers, we are as confident as ever that
our strategy confers sustained benefits as the regulatory and
competitive environment evolves.”
Quarterly Cash Dividend
In the third quarter of 2019, the Company’s
Board of Directors declared and the Company paid a quarterly cash
dividend of $0.02 per share totaling approximately $1.4
million.
On October 22, 2019, the Company’s Board of
Directors declared a quarterly cash dividend of $0.02 per share,
payable on or about December 13, 2019, to all shareholders of
record as of November 15, 2019. As of October 22, 2019, 72,487,958
shares were outstanding.
Vessel Sales
On September 17, 2019, the Company agreed to
sell the SBI Puma and SBI Cougar, 2014 and 2015 built Ultramax
vessels, respectively, for approximately $37.9 million in
aggregate to an unaffiliated third party. The sale was closed on
October 8, 2019 and generated $16.0 million of additional
liquidity after the repayment of $21.9 million of outstanding debt.
As of June 30, 2019, these vessels were classified as held for
sale. The Company recorded a loss of approximately $4.9
million in the second quarter of 2019 and wrote-off deferred
financing costs of $0.2 million in October 2019 upon the
repayment of $21.9 million of outstanding debt.
Debt
Senior Unsecured Notes Due September
2019
On August 2, 2019, the Company redeemed the
entire outstanding balance of its Senior Unsecured Notes Due
September 2019 of $73.6 million. The redemption price of
the Senior Unsecured Notes Due September 2019 was equal to 100% of
the principal amount to be redeemed, plus accrued and unpaid
interest to, but excluding, August 2, 2019.
AVIC Lease Financing
In July 2019, the Company closed the transaction
to sell and leaseback three Ultramax vessels (SBI Hydra, SBI Lyra
and SBI Maia) to AVIC International Leasing Co., Ltd. As part of
this transaction, the Company has agreed to bareboat charter-in the
vessels for a period of eight years and has purchase options
beginning after the end of the second year of each bareboat charter
agreement. The Company also has a purchase obligation for each
vessel upon the expiration of each bareboat charter agreement.
$330.0 Million Credit
Facility
During July 2019, the Company prepaid
approximately $30.9 million of its $330.0
Million Credit Facility and wrote off deferred financing costs
of approximately $0.4 million as part of the refinancing of the
three vessels now financed by the AVIC Lease Financing (SBI
Hydra, SBI Lyra and SBI Maia). As such, the $330.0 Million Credit
Facility was repaid in full and terminated.
$38.7 Million Credit
Facility
During October 2019, the Company prepaid
approximately $21.9 million of its $38.7
Million Credit Facility and wrote off approximately $0.2
million of deferred financing costs as part of the sale of the
SBI Puma and SBI Cougar.
Vessels Time Chartered-In
During August 2019, the Company time chartered
in one Kamsarmax vessel for approximately 24 to 27 months at 118%
of the Baltic Exchanges 74,000 DWT Panamax Index (“BPI”). The
Company simultaneously time chartered these vessels out to the
Scorpio Kamsarmax Pool under matching terms.
In September 2019, the Company exercised its
option to extend the time charter-in agreement of the 2017 built
Ultramax vessel for one year at $10,885 per day.
Debt Overview
The Company’s outstanding debt balances, gross
of unamortized deferred financing costs as of September 30,
2019 and October 18, 2019, are as follows (dollars in
thousands):
|
|
As ofSeptember 30,2019 |
|
As ofOctober 18,2019 |
|
As ofOctober 18,2019 |
|
|
|
|
|
|
|
Credit Facility |
|
Amount Outstanding |
|
AmountCommitted (1) |
Senior Notes |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$330 Million Credit
Facility |
|
— |
|
|
— |
|
|
— |
|
$12.5 Million Credit
Facility |
|
8,813 |
|
|
8,813 |
|
|
— |
|
$27.3 Million Credit
Facility |
|
9,008 |
|
|
8,813 |
|
|
— |
|
$85.5 Million Credit
Facility |
|
47,594 |
|
|
47,594 |
|
|
5,712 |
|
$38.7 Million Credit
Facility |
|
32,400 |
|
|
10,500 |
|
|
— |
|
$12.8 Million Credit
Facility |
|
11,900 |
|
|
11,900 |
|
|
1,398 |
|
$30.0 Million Credit
Facility |
|
27,753 |
|
|
27,753 |
|
|
2,585 |
|
$60.0 Million Credit
Facility |
|
27,138 |
|
|
27,138 |
|
|
2,862 |
|
$184.0 Million Credit
Facility |
|
168,916 |
|
|
168,916 |
|
|
17,448 |
|
$34.0 Million Credit
Facility |
|
32,179 |
|
|
32,179 |
|
|
3,000 |
|
$90.0 Million Credit
Facility |
|
82,100 |
|
|
82,100 |
|
|
8,706 |
|
$19.6 Million Lease Financing
- SBI Rumba |
|
17,191 |
|
|
17,191 |
|
|
— |
|
$19.0 Million Lease Financing
- SBI Tango |
|
17,593 |
|
|
17,498 |
|
|
— |
|
$19.0 Million Lease Financing
- SBI Echo |
|
17,671 |
|
|
17,580 |
|
|
— |
|
$20.5 Million Lease Financing
- SBI Hermes |
|
19,372 |
|
|
19,269 |
|
|
— |
|
$21.4 Million Lease Financing
- SBI Samba |
|
20,726 |
|
|
20,613 |
|
|
— |
|
CMBFL Lease Financing |
|
115,688 |
|
|
115,688 |
|
|
11,842 |
|
$45.0 Million Lease Financing
- SBI Virgo & SBI Libra |
|
40,783 |
|
|
40,529 |
|
|
3,000 |
|
AVIC Lease Financing |
|
112,183 |
|
|
111,038 |
|
|
9,840 |
|
Total |
|
$ |
809,008 |
|
|
$ |
785,112 |
|
|
$ |
66,393 |
|
(1) Includes the maximum loan amount available
for the installation of scrubbers following upsizes of certain
credit facilities.
The Company’s projected quarterly debt
repayments on its bank loans and lease financing arrangements
through 2020 are as follows (dollars in thousands):
|
|
Principal onBank Loans |
|
Principal onLease FinancingArrangements |
|
Total (1) |
Q4 2019 (2) |
|
|
7,515 |
|
|
|
4,955 |
|
|
|
12,470 |
|
Q1 2020 |
|
|
10,082 |
|
|
|
7,562 |
|
|
|
17,644 |
|
Q2 2020 |
|
|
10,815 |
|
|
|
7,853 |
|
|
|
18,668 |
|
Q3 2020 |
|
|
10,489 |
|
|
|
8,320 |
|
|
|
18,809 |
|
Q4 2020 (3) |
|
|
19,095 |
|
|
|
8,339 |
|
|
|
27,434 |
|
Total |
|
|
$57,996 |
|
|
|
$37,029 |
|
|
|
$95,025 |
|
(1) Includes estimated repayments on the
upsizings of certain credit facilities for the installation of
scrubbers, for which the timing of the drawdowns and repayment
schedules set forth are estimates only and may vary as the timing
of the related installations finalize.(2) Relates to payments
expected to be made from October 19, 2019 to December 31, 2019.(3)
Includes $8.0 million repayment of the $12.5 Million Credit
Facility due at maturity.
IMO 2020
The Company’s projected schedule and estimated
payments for the installation of scrubbers on all the owned and
finance leased vessels in the Company’s fleet is as follows
(dollars in thousands). Through October 18, 2019, the Company has
paid $17.3 million towards the purchase of the scrubbers.
|
|
Number of Vessels by Type |
|
EstimatedPayments (1) |
|
|
Ultramax |
|
Kamsarmax |
|
Q4 2019 (2) |
|
7 |
|
|
4 |
|
|
21,853 |
|
Q1 2020 |
|
10 |
|
|
2 |
|
|
27,802 |
|
Q2 2020 |
|
8 |
|
|
4 |
|
|
24,118 |
|
Q3 2020 |
|
3 |
|
|
4 |
|
|
13,927 |
|
Q4 2020 |
|
4 |
|
|
— |
|
|
11,283 |
|
Q1 2021 |
|
— |
|
|
— |
|
|
4,281 |
|
Total |
|
32 |
|
|
14 |
|
|
$ |
103,264 |
|
(1) Includes estimated cash payments for
scrubbers that are due in advance of the scheduled service and may
be scheduled to occur in quarters prior to the actual installation.
In addition to these installment payments, these amounts also
include estimates of the installation costs of such systems. The
timing of the payments set forth are estimates only and may vary as
the timing of the related installations finalize.(2) Relates to
payments expected to be made from October 19, 2019 to December 31,
2019.
Financial Results for the Three Months
Ended September 30, 2019 Compared to the Three Months Ended
September 30, 2018
For the third quarter of 2019, the Company’s
GAAP net loss was $1.9 million, or $0.03 per diluted share,
compared to a net loss of $0.4 million, or $0.01 per diluted share,
for the same period in 2018. Results for the third quarter of 2019
include: a non-cash gain of approximately $1.0 million and cash
dividend income of $0.5 million, or $0.02 per diluted share,
primarily from the Company’s equity investment in Scorpio Tankers
Inc., a reversal of charges of approximately $0.2 million related
to the sale of the SBI Cougar and SBI Puma and the write-off of
deferred financing costs of approximately $0.5 million, or $0.01
per diluted share, related to the refinancing of existing debt.
EBITDA for the third quarters of 2019 and 2018 were $26.3 million
and $28.8 million, respectively (see Non-GAAP Financial Measures
below).
For the third quarter of 2019, the Company’s
adjusted net loss was $2.1 million, or $0.03 per diluted share,
which excludes the impact of the reversal to the write-down of
assets held for sale of $0.2 million. Adjusted EBITDA for the third
quarter of 2019 was $26.1 million. There were no such non-GAAP
adjustments to net loss in the third quarter of 2018 (see Non-GAAP
Financial Measures below).
Total vessel revenues for the third quarter of
2019 were $63.2 million compared to $62.5 million in the third
quarter of 2018. The Company’s TCE revenue (see Non-GAAP Financial
Measures below) for the third quarter of 2019 was $62.7 million, an
increase of $0.3 million from the prior year period due primarily
to higher indices, the impact of which was offset by a decrease in
revenue days related the sale of two Kamsarmax vessels and
scheduled drydocking.
Total operating expenses for the third quarter
of 2019 were $54.5 million, including the reversal of charges
related to the sale of the SBI Cougar and SBI Puma of $0.2 million,
compared to $49.5 million in the third quarter of 2018.
Ultramax Operations
|
|
Three Months Ended September 30, |
|
|
|
|
Dollars in thousands |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
41,257 |
|
|
$ |
39,722 |
|
|
$ |
1,535 |
|
|
4 |
|
Voyage expenses |
|
240 |
|
|
80 |
|
|
160 |
|
|
200 |
|
TCE
Revenue |
|
$ |
41,017 |
|
|
$ |
39,642 |
|
|
$ |
1,375 |
|
|
3 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Vessel operating costs |
|
16,798 |
|
|
18,178 |
|
|
(1,380 |
) |
|
(8 |
) |
Charterhire expense |
|
936 |
|
|
936 |
|
|
— |
|
|
— |
|
Vessel depreciation |
|
9,000 |
|
|
9,399 |
|
|
(399 |
) |
|
(4 |
) |
General and administrative expense |
|
1,070 |
|
|
1,109 |
|
|
(39 |
) |
|
(4 |
) |
Loss / write-down on assets held for sale |
|
(194 |
) |
|
— |
|
|
(194 |
) |
|
NA |
|
Total operating expenses |
|
$ |
27,610 |
|
|
$ |
29,622 |
|
|
$ |
(2,012 |
) |
|
(7 |
) |
Operating
income |
|
$ |
13,407 |
|
|
$ |
10,020 |
|
|
$ |
3,387 |
|
|
34 |
|
Vessel revenue for the Company’s Ultramax
Operations increased to $41.3 million for the third quarter of 2019
from $39.7 million in the prior year period. The weakness in rates
experienced in the first half of the year was reversed in the third
quarter of 2019 due to an extended South American grain season as
Chinese buyers were forced to continue to source agricultural
commodities from Brazil and Argentina rather than the United
States. The strength of Atlantic rates created a large value
imbalance between the two basins, encouraging vessels to ballast.
Global ultramax supply has moved to a more balanced split between
the Atlantic and Pacific basins due to the start of our fleet’s
drydock and scrubber fitting program.
TCE revenue (see Non-GAAP Financial Measures
below) for the Company’s Ultramax Operations was $41.0 million for
the third quarter of 2019 compared to $39.6 million for the prior
year period. During both periods, the Company’s Ultramax fleet
consisted of a day-weighted average of 37 vessels owned or finance
leased and one vessel time chartered-in. TCE revenue per day was
$11,824 and $11,342 for the third quarters of 2019 and 2018,
respectively.
|
|
Three Months Ended September 30, |
|
|
|
|
Ultramax
Operations: |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE Revenue (in thousands) |
|
$ |
41,017 |
|
|
$ |
39,642 |
|
|
$ |
1,375 |
|
|
3 |
|
TCE Revenue / Day |
|
$ |
11,824 |
|
|
$ |
11,342 |
|
|
$ |
482 |
|
|
4 |
|
Revenue Days |
|
3,469 |
|
|
3,495 |
|
|
(26 |
) |
|
(1 |
) |
The Company’s Ultramax Operations vessel
operating costs were $16.8 million for the third quarter of 2019,
including approximately $0.5 million of takeover costs and
contingency expenses, compared with vessel operating costs of $18.2
million in the prior year period, relating to the 37 vessels owned
or finance leased on average during both periods. Daily operating
costs excluding takeover costs and contingency expenses for the
third quarters of 2019 and 2018 were $4,796 and $5,037,
respectively. Daily operating costs for the third quarter of 2019
decreased from the third quarter of 2018 due primarily to the
timing of repairs and the purchase of spares and stores.
Charterhire expense for the Company’s Ultramax
Operations was approximately $0.9 million for both the third
quarters of 2019 and 2018 and relates to the vessel the Company
time chartered-in at $10,125 per day. In September 2019, the
Company exercised its option to extend the time-charter for one
year at $10,885 per day.
Ultramax Operations depreciation decreased
slightly from $9.4 million to $9.0 million as the SBI Cougar and
SBI Puma were classified as held for sale since the second quarter
of 2019 and therefore were not depreciated. The sale of these
vessels was completed in October 2019.
General and administrative expense for the
Company’s Ultramax Operations, which consists primarily of
administrative service fees, which are incurred on a per vessel per
day basis, and bank charges, which are incurred based on the number
of transactions, was $1.1 million for both the third quarters of
2019 and 2018.
Kamsarmax Operations
|
|
Three Months Ended September 30, |
|
|
|
|
Dollars in thousands |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
21,970 |
|
|
$ |
22,743 |
|
|
$ |
(773 |
) |
|
(3 |
) |
Voyage expenses |
|
261 |
|
|
4 |
|
|
257 |
|
|
6,425 |
|
TCE
Revenue |
|
$ |
21,709 |
|
|
$ |
22,739 |
|
|
$ |
(1,030 |
) |
|
(5 |
) |
Operating
expenses: |
|
|
|
|
|
|
|
|
Vessel operating costs |
|
8,398 |
|
|
8,833 |
|
|
(435 |
) |
|
(5 |
) |
Charterhire expense |
|
6,552 |
|
|
108 |
|
|
6,444 |
|
|
5,967 |
|
Vessel depreciation |
|
4,533 |
|
|
4,899 |
|
|
(366 |
) |
|
(7 |
) |
General and administrative expense |
|
482 |
|
|
542 |
|
|
(60 |
) |
|
(11 |
) |
Total operating expenses |
|
$ |
19,965 |
|
|
$ |
14,382 |
|
|
$ |
5,583 |
|
|
39 |
|
Operating
income |
|
$ |
1,744 |
|
|
$ |
8,357 |
|
|
$ |
(6,613 |
) |
|
(79 |
) |
Vessel revenue for the Company’s Kamsarmax
Operations decreased to $22.0 million in the third quarter of 2019
from $22.7 million in the prior year period due primarily to a
decrease in revenue days related to the sale of two Kamsarmax
vessels and scheduled drydocking.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $21.7 million for the
third quarter of 2019 associated with a day-weighted average of 17
vessels owned or finance leased and four vessels time chartered-in,
compared to $22.7 million for the prior year period associated with
a day-weighted average of 19 vessels owned or finance leased. TCE
revenue per day was $13,149 and $13,649 for the third quarters of
2019 and 2018, respectively. Constraints on vessel supply in the
Atlantic Basin were supportive of freight rates throughout the
quarter. Chinese buyers were forced to source agricultural
commodities from Brazil and Argentina rather than the United
States. In addition, Brazilian miner Vale resumed its export
program after a prolonged disruption from dam failures. These
‘fronthaul’ voyages, and a significant number of larger dry cargo
vessels fitting exhaust gas cleaning systems, or ‘scrubbers’, in
drydocks in Asia pushed rates to recent highs.
|
|
Three Months Ended September 30, |
|
|
|
|
Kamsarmax
Operations: |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE Revenue (in thousands) |
|
$ |
21,709 |
|
|
$ |
22,739 |
|
|
$ |
(1,030 |
) |
|
(5 |
) |
TCE Revenue / Day |
|
$ |
13,149 |
|
|
$ |
13,649 |
|
|
$ |
(500 |
) |
|
(4 |
) |
Revenue Days |
|
1,651 |
|
|
1,666 |
|
|
(15 |
) |
|
(1 |
) |
Kamsarmax Operations vessel operating costs were
$8.4 million for the third quarter of 2019, including approximately
$0.6 million of takeover costs and contingency expenses, compared
with vessel operating costs of $8.8 million in the prior year
period, relating to 17 and 19 vessels owned or finance leased on
average, respectively, during the periods. Daily operating costs
excluding takeover costs and contingency expenses for the third
quarters of 2019 and 2018 were relatively flat at $4,968 and
$4,931, respectively.
Kamsarmax Operations charterhire expense was
$6.6 million in the third quarter of 2019, relating to five vessels
the Company time chartered in during the period. While the Company
did not time charter-in any Kamsarmax vessels in the third quarter
2018, it had a profit and loss sharing agreement with a third party
related to one Kamsarmax vessel for which it recorded its residual
share of the loss in the third quarter of 2018.
Kamsarmax Operations depreciation was $4.5
million and $4.9 million in the third quarters of 2019 and 2018,
respectively, as the number of vessels owned or finance leased on
average decreased to 17 in the third quarter of 2019 from 19 in the
third quarter of 2018 due to the sale of the SBI Electra and SBI
Flamenco.
General and administrative expense for the
Company’s Kamsarmax Operations was $0.5 million for both the third
quarters of 2019 and 2018. The expense consists primarily of
administrative services fees, which are incurred on a per vessel
per day basis, and bank charges, which are incurred based on the
number of transactions.
Corporate
Certain general and administrative expenses the
Company incurs, as well as all of its financial expenses and
investment income or losses, are not attributable to a specific
segment. Accordingly, these costs are not allocated to the
Company’s segments. These general and administrative expenses,
including compensation, audit, legal and other professional fees,
as well as the costs of being a public company, such as director
fees, were $6.4 million and $5.4 million in the third quarters of
2019 and 2018, respectively. The quarter over quarter increase is
due primarily to an increase in non-cash restricted stock
amortization.
The Company recorded a non-cash gain of
approximately $1.0 million for the third quarter of 2019 and a cash
dividend of $0.5 million primarily from its equity investment in
Scorpio Tankers Inc.
Financial expenses, net of interest income
decreased to $12.3 million in the third quarter of 2019 from $13.3
million in the prior year period due to a write off of $2.0 million
of deferred finance charges related to then existing debt in the
third quarter of 2018, offset in part by higher levels of debt in
the third quarter of 2019. In the third quarter of 2019,
approximately $0.4 million of deferred financing costs were written
off related to debt refinancings under the Company’s new sale and
leaseback transactions. In October 2019, the Company wrote-off
approximately $0.2 million upon the repayment of the existing debt
on the SBI Cougar and SBI Puma which were sold.
Financial Results for the Nine Months
Ended September 30, 2019 Compared to the Nine Months Ended
September 30, 2018
For the first nine months of 2019, the Company’s
GAAP net income was $29.6 million, or $0.42 per diluted share,
compared to a GAAP net loss of $5.3 million, or $0.07 loss per
diluted share, for the same period in 2018. Results for the first
nine months of 2019 include: a non-cash gain of approximately $68.6
million and cash dividend income of $1.6 million, or $1.01 per
diluted share, primarily from the Company’s equity investment in
Scorpio Tankers Inc., charges of approximately $12.5 million, or
$0.18 per diluted share, related to the sales of the SBI Electra,
SBI Flamenco, SBI Cougar and SBI Puma and the write-off of deferred
financing costs on the credit facilities related to the SBI Electra
and SBI Flamenco, and the write-off of deferred financing costs of
approximately $3.2 million, or $0.05 per diluted share, related to
the refinancing of existing debt. EBITDA for the first nine months
of 2019 and 2018 were $116.8 million and $77.2 million,
respectively (see Non-GAAP Financial Measures below).
For the first nine months of 2019, the Company’s
adjusted net income was $42.1 million, or $0.60 adjusted earnings
per diluted share, which excludes the impact of the write-down of
assets either sold or held for sale and the write-off of related
deferred financing costs totaling $12.5 million. Adjusted EBITDA
for the first nine months of 2019 was $128.9 million. There were no
such non-GAAP adjustments to net loss in the first nine months of
2018 (see Non-GAAP Financial Measures below).
Total vessel revenues for the first nine months
of 2019 were $164.3 million compared to $177.3 million in the prior
year period. The Company’s TCE revenue (see Non-GAAP Financial
Measures below) for the first nine months of 2019 was $163.5
million, a decrease of $13.5 million from the prior year period.
The first half of 2019 proved challenging with a loss of iron
exports mainly due to Vales dam failure and continued disruptions
from the U.S. - China trade war. A strong South American and Black
Sea grain season, increasing coal exports to India and China’s
resumption of coal buying occurred in tandem with a rise in
Atlantic cape rates. A restart of the Brazilian iron ore export
program provided additional support to already rising Ultramax and
Kamsarmax rates during the third quarter of 2019.
Total operating expenses for the first nine
months of 2019 were $165.2 million, including the write-down of
assets either sold or held for sale of $12.0 million, compared to
$147.8 million in the first nine months of 2018.
Ultramax Operations
|
|
Nine Months Ended September 30, |
|
|
|
|
Dollars in thousands |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
103,234 |
|
|
$ |
112,778 |
|
|
$ |
(9,544 |
) |
|
(8 |
) |
Voyage expenses |
|
438 |
|
|
264 |
|
|
174 |
|
|
66 |
|
TCE
Revenue |
|
$ |
102,796 |
|
|
$ |
112,514 |
|
|
$ |
(9,718 |
) |
|
(9 |
) |
Operating
expenses: |
|
|
|
|
|
|
|
|
Vessel operating costs |
|
50,962 |
|
|
53,430 |
|
|
(2,468 |
) |
|
(5 |
) |
Charterhire expense |
|
2,731 |
|
|
2,773 |
|
|
(42 |
) |
|
(2 |
) |
Vessel depreciation |
|
27,108 |
|
|
27,887 |
|
|
(779 |
) |
|
(3 |
) |
General and administrative expense |
|
3,131 |
|
|
3,255 |
|
|
(124 |
) |
|
(4 |
) |
Loss / write-down on assets held for sale |
|
4,688 |
|
|
— |
|
|
4,688 |
|
|
NA |
|
Total operating expenses |
|
$ |
88,620 |
|
|
$ |
87,345 |
|
|
$ |
1,275 |
|
|
1 |
|
Operating
income |
|
$ |
14,176 |
|
|
$ |
25,169 |
|
|
$ |
(10,993 |
) |
|
(44 |
) |
Vessel revenue for the Company’s Ultramax
Operations decreased to $103.2 million for the first nine months of
2019 from $112.8 million in the prior year period. The year
suffered a slow start due to coal import restrictions by China and
the sentiment from a limited U.S. Gulf grain season from 2018.
Since then grain trades with support from Chinese and Indian coal
buying provided the catalyst for the long and slow recovery which
ended in the recent high in the Supramax and Ultramax segments
during the third quarter of 2019.
TCE revenue (see Non-GAAP Financial Measures
below) for the Company’s Ultramax Operations was $102.8 million for
the first nine months of 2019 compared to $112.5 million for the
prior year period. During both periods, the Company’s Ultramax
fleet consisted of a day-weighted average of 37 vessels owned or
finance leased and one vessel time chartered-in. TCE revenue per
day was $10,010 and $10,895 for the first nine months of 2019 and
2018, respectively.
|
|
Nine Months Ended September 30, |
|
|
|
|
Ultramax
Operations: |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE Revenue (in thousands) |
|
$ |
102,796 |
|
|
$ |
112,514 |
|
|
$ |
(9,718 |
) |
|
(9 |
) |
TCE Revenue / Day |
|
$ |
10,010 |
|
|
$ |
10,895 |
|
|
$ |
(885 |
) |
|
(8 |
) |
Revenue Days |
|
10,269 |
|
|
10,327 |
|
|
(58 |
) |
|
(1 |
) |
The Company’s Ultramax Operations vessel
operating costs were $51.0 million for the first nine months of
2019, including approximately $1.7 million of takeover costs and
contingency expenses, compared with vessel operating costs of $53.4
million in the prior year period, relating to the 37 vessels owned
or finance leased on average during both periods. Daily operating
costs excluding takeover costs and contingency expenses for the
first nine months of 2019 of $4,873 was down slightly from the
prior year period of $4,983 due to the timing of repairs and the
purchase of spares and stores.
Charterhire expense for the Company’s Ultramax
Operations was approximately $2.7 million for first nine months of
2019 and $2.8 million for the same period in 2018 and relates to
the vessel the Company time chartered-in at $10,125 per day. In
September 2019, the Company exercised its option to extend the
time-charter for one year at $10,885 per day.
Ultramax Operations depreciation decreased from
$27.9 million in the first nine months of 2018 to $27.1 million in
the first nine months of 2019 as the SBI Cougar and SBI Puma were
classified as held for sale since the second quarter of 2019 and
subsequently sold in October 2019.
General and administrative expense for the
Company’s Ultramax Operations, which consists primarily of
administrative service fees, which are incurred on a per vessel per
day basis, and bank charges, which are incurred based on the number
of transactions, was $3.1 million for the first nine months of 2019
and $3.3 million for the same period in 2018.
During the first nine months of 2019, the
Company recorded a write-down on assets held for sale related to
the classification of the SBI Cougar and SBI Puma as held for sale.
The sale of the vessels was completed in October 2019.
Kamsarmax Operations
|
|
Nine Months Ended September 30, |
|
|
|
|
Dollars in thousands |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
61,081 |
|
|
$ |
64,552 |
|
|
$ |
(3,471 |
) |
|
(5 |
) |
Voyage expenses |
|
408 |
|
|
107 |
|
|
301 |
|
|
281 |
|
TCE
Revenue |
|
$ |
60,673 |
|
|
$ |
64,445 |
|
|
$ |
(3,772 |
) |
|
(6 |
) |
Operating
expenses: |
|
|
|
|
|
|
|
|
Vessel operating costs |
|
25,730 |
|
|
25,458 |
|
|
272 |
|
|
1 |
|
Charterhire expense |
|
8,039 |
|
|
318 |
|
|
7,721 |
|
|
2,428 |
|
Vessel depreciation |
|
13,695 |
|
|
14,306 |
|
|
(611 |
) |
|
(4 |
) |
General and administrative expense |
|
1,594 |
|
|
1,515 |
|
|
79 |
|
|
5 |
|
Loss / write-down on assets held for sale |
|
7,353 |
|
|
— |
|
|
7,353 |
|
|
NA |
|
Total operating expenses |
|
$ |
56,411 |
|
|
$ |
41,597 |
|
|
$ |
14,814 |
|
|
36 |
|
Operating
income |
|
$ |
4,262 |
|
|
$ |
22,848 |
|
|
$ |
(18,586 |
) |
|
(81 |
) |
Vessel revenue for the Company’s Kamsarmax
Operations decreased to $61.1 million in the first nine months of
2019 from $64.6 million in the prior year period. The year had a
slow start due to limited coal imports with restrictions in China
and increased LNG consumptions in Europe, as well as an abrupt drop
in iron ore exports after the Vale’s dam failure. Rates recovered
slowly until the end of the second quarter of 2019, helped by a
sustained South American grain export campaign and steady Indian
coal imports. At the start of the third quarter of 2019, the lack
of ships in the Atlantic and the cape rates created a rally which
lasted until September.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $60.7 million for the
first nine months of 2019 associated with a day-weighted average of
19 vessels owned or finance leased and two vessels time
chartered-in, compared to $64.4 million for the prior year period
associated with a day-weighted average of 18 vessels owned or
finance leased. TCE revenue per day was $11,672 and $13,123 for the
first nine months of 2019 and 2018, respectively.
|
|
Nine Months Ended September 30, |
|
|
|
|
Kamsarmax
Operations: |
|
2019 |
|
2018 |
|
Change |
|
% Change |
TCE Revenue (in thousands) |
|
$ |
60,673 |
|
|
$ |
64,445 |
|
|
$ |
(3,772 |
) |
|
(6 |
) |
TCE Revenue / Day |
|
$ |
11,672 |
|
|
$ |
13,123 |
|
|
$ |
(1,451 |
) |
|
(11 |
) |
Revenue Days |
|
5,198 |
|
|
4,911 |
|
|
287 |
|
|
6 |
|
Kamsarmax Operations vessel operating costs were
$25.7 million for the first nine months of 2019, including
approximately $0.8 million of takeover costs and contingency
expenses, compared with vessel operating costs of $25.5 million in
the prior year period, relating to 19 and 18 vessels owned or
finance leased on average, respectively, during the periods. Daily
operating costs excluding takeover costs and contingency expenses
were relatively flat for the first nine months of 2019 and 2018 at
$4,990 and $4,970, respectively.
Kamsarmax Operations charterhire expense was
$8.0 million in the first nine months of 2019, relating to five
vessels the Company began time chartering in during 2019. Prior to
that, a profit and loss sharing agreement with a third party
related to one Kamsarmax vessel for which it recorded its residual
share of the profit or loss.
Kamsarmax Operations depreciation was $13.7
million and $14.3 million in the first nine months of 2019 and
2018, respectively reflecting the decrease in vessels owned or
finance leased due to the sale of the SBI Electra and SBI
Flamenco.
General and administrative expense for the
Company’s Kamsarmax Operations was $1.6 million and $1.5 million
for the first nine months of 2019 and 2018, respectively. The
expense consists primarily of administrative services fees, which
are incurred on a per vessel per day basis, and bank charges, which
are incurred based on the number of transactions.
During the first nine months of 2019, the Company recorded
write-downs of assets held for sale related to the sale of the SBI
Electra and SBI Flamenco totaling approximately $7.4
million.
Corporate
Certain general and administrative expenses the
Company incurs, as well as all of its financial expenses and
investment income or losses, are not attributable to a specific
segment. Accordingly, these costs are not allocated to the
Company’s segments. These general and administrative expenses,
including compensation, audit, legal and other professional fees,
as well as the costs of being a public company, such as director
fees, were $19.3 million and $18.5 million in the first nine months
of 2019 and 2018, respectively. The quarter over quarter increase
is due primarily to an increase in non-cash restricted stock
amortization.
The Company recorded a non-cash gain of
approximately $68.6 million and a cash dividend of $1.6 million for
the first nine months of 2019 primarily from its equity investment
in Scorpio Tankers Inc.
Financial expenses, net of interest income
increased to $39.8 million in the first nine months of 2019 from
$34.8 million in the prior year period due to higher levels of
debt. In the first nine months of 2019, approximately $3.6 million
of deferred financing costs were written off related to vessel
sales and debt refinancings under the Company’s new sale and
leaseback transactions. In October 2019, we wrote-off approximately
$0.2 million upon the repayment of the existing debt on the SBI
Cougar and SBI Puma which were sold.
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Statements of
Operations(Amounts in thousands, except per share
data)
|
|
Unaudited |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
63,227 |
|
|
$ |
62,465 |
|
|
$ |
164,315 |
|
|
$ |
177,331 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
501 |
|
|
84 |
|
|
846 |
|
|
372 |
|
Vessel operating costs |
|
25,196 |
|
|
27,011 |
|
|
76,692 |
|
|
78,888 |
|
Charterhire expense |
|
7,488 |
|
|
1,044 |
|
|
10,770 |
|
|
3,091 |
|
Vessel depreciation |
|
13,533 |
|
|
14,298 |
|
|
40,803 |
|
|
42,193 |
|
General and administrative expenses |
|
7,941 |
|
|
7,043 |
|
|
24,001 |
|
|
23,283 |
|
(Reversal of) loss / write-down on assets sold or held for
sale |
|
(194 |
) |
|
— |
|
|
12,041 |
|
|
— |
|
Total operating
expenses |
|
54,465 |
|
|
49,480 |
|
|
165,153 |
|
|
147,827 |
|
Operating income
(loss) |
|
8,762 |
|
|
12,985 |
|
|
(838 |
) |
|
29,504 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest income |
|
553 |
|
|
327 |
|
|
1,227 |
|
|
756 |
|
Income from equity investments |
|
1,582 |
|
|
— |
|
|
70,227 |
|
|
— |
|
Foreign exchange gain (loss) |
|
18 |
|
|
(31 |
) |
|
(33 |
) |
|
(73 |
) |
Financial expense, net |
|
(12,843 |
) |
|
(13,635 |
) |
|
(41,013 |
) |
|
(35,512 |
) |
Total other (expense)
income |
|
(10,690 |
) |
|
(13,339 |
) |
|
30,408 |
|
|
(34,829 |
) |
Net (loss)
income |
|
$ |
(1,928 |
) |
|
$ |
(354 |
) |
|
$ |
29,570 |
|
|
$ |
(5,325 |
) |
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.44 |
|
|
$ |
(0.07 |
) |
Diluted |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.42 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
Basic weighted average number
of common shares outstanding |
|
68,462 |
|
|
72,749 |
|
|
67,889 |
|
|
72,649 |
|
Diluted weighted average
number of common shares outstanding |
|
68,462 |
|
|
72,749 |
|
|
69,610 |
|
|
72,649 |
|
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Balance
Sheets(Dollars in thousands)
|
|
Unaudited |
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
80,134 |
|
|
$ |
67,495 |
|
Accounts receivable |
|
11,489 |
|
|
10,290 |
|
Prepaid expenses and other current assets |
|
11,184 |
|
|
6,314 |
|
Total current assets |
|
102,807 |
|
|
84,099 |
|
Non-current assets |
|
|
|
|
Vessels, net |
|
1,379,057 |
|
|
1,507,918 |
|
Assets held for sale |
|
36,939 |
|
|
— |
|
Equity investments |
|
162,387 |
|
|
92,281 |
|
Deferred financing costs, net |
|
3,151 |
|
|
3,706 |
|
Other assets |
|
73,771 |
|
|
15,822 |
|
Total non-current assets |
|
1,655,305 |
|
|
1,619,727 |
|
Total
assets |
|
$ |
1,758,112 |
|
|
$ |
1,703,826 |
|
|
|
|
|
|
Liabilities and shareholders’
equity |
|
|
|
|
Current liabilities |
|
|
|
|
Bank loans, net |
|
$ |
37,573 |
|
|
$ |
60,310 |
|
Capital lease obligations |
|
28,745 |
|
|
4,594 |
|
Senior Notes, net |
|
— |
|
|
73,253 |
|
Accounts payable and accrued expenses |
|
48,076 |
|
|
14,457 |
|
Total current liabilities |
|
114,394 |
|
|
152,614 |
|
Non-current liabilities |
|
|
|
|
Bank loans, net |
|
403,997 |
|
|
621,179 |
|
Capital lease obligations |
|
327,482 |
|
|
69,229 |
|
Other liabilities |
|
19,489 |
|
|
— |
|
Total non-current
liabilities |
|
750,968 |
|
|
690,408 |
|
Total liabilities |
|
865,362 |
|
|
843,022 |
|
Shareholders’ equity |
|
|
|
|
Preferred shares, $0.01 par value per share; 50,000,000 shares
authorized; no shares issued or outstanding |
|
— |
|
|
— |
|
Common shares, $0.01 par value per share; authorized 212,500,000
shares as of September 30, 2019 and December 31, 2018; outstanding
72,487,958 shares and 71,217,258 shares as of September 30, 2019
and December 31, 2018, respectively |
|
809 |
|
|
796 |
|
Paid-in capital |
|
1,750,011 |
|
|
1,747,648 |
|
Common shares held in treasury, at cost; 8,567,846 shares at
September 30, 2019 and December 31, 2018 |
|
(56,720 |
) |
|
(56,720 |
) |
Accumulated deficit |
|
(801,350 |
) |
|
(830,920 |
) |
Total shareholders’
equity |
|
892,750 |
|
|
860,804 |
|
Total liabilities and
shareholders’ equity |
|
$ |
1,758,112 |
|
|
$ |
1,703,826 |
|
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Statements of Cash Flows
(unaudited)(Amounts in thousands)
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
Operating activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
29,570 |
|
|
$ |
(5,325 |
) |
Adjustment to
reconcile net income (loss) to net cash provided by |
|
|
|
|
operating activities: |
|
|
|
|
Restricted share amortization |
|
6,674 |
|
|
5,625 |
|
Vessel depreciation |
|
40,803 |
|
|
42,193 |
|
Amortization of deferred financing costs |
|
5,941 |
|
|
6,483 |
|
Write-off of deferred financing costs |
|
446 |
|
|
— |
|
Loss / write-down on assets held for sale |
|
10,385 |
|
|
— |
|
Net unrealized gains on investments |
|
(68,606 |
) |
|
— |
|
Dividend income on equity investment |
|
(1,623 |
) |
|
— |
|
Drydocking expenditure |
|
(2,265 |
) |
|
— |
|
Changes in operating
assets and liabilities: |
|
|
|
|
(Increase) decrease in accounts receivable |
|
(1,199 |
) |
|
(745 |
) |
Decrease (increase) in prepaid expenses and other assets |
|
(4,241 |
) |
|
(1,519 |
) |
(Decrease) increase in accounts payable and accrued expenses |
|
6,795 |
|
|
4,093 |
|
Net cash provided by
operating activities |
|
22,680 |
|
|
50,805 |
|
Investing
activities |
|
|
|
|
Equity investment |
|
(1,500 |
) |
|
— |
|
Dividend income on equity investment |
|
1,623 |
|
|
— |
|
Proceeds from sale of assets held for sale |
|
47,302 |
|
|
— |
|
Scrubber payments |
|
(16,678 |
) |
|
— |
|
Payments for vessels and vessels under construction |
|
— |
|
|
(21,423 |
) |
Net cash provided by
(used in) investing activities |
|
30,747 |
|
|
(21,423 |
) |
Financing
activities |
|
|
|
|
Proceeds from issuance of long-term debt |
|
300,070 |
|
|
324,725 |
|
Repayments of long-term debt |
|
(332,052 |
) |
|
(251,515 |
) |
Common shares repurchased |
|
— |
|
|
(18,710 |
) |
Dividends paid |
|
(4,298 |
) |
|
(4,579 |
) |
Debt issue costs paid |
|
(4,508 |
) |
|
(5,029 |
) |
Net cash (used in)
provided by financing activities |
|
(40,788 |
) |
|
44,892 |
|
Increase in cash and cash
equivalents |
|
12,639 |
|
|
74,274 |
|
Cash and cash equivalents,
beginning of period |
|
67,495 |
|
|
68,535 |
|
Cash and cash
equivalents, end of period |
|
$ |
80,134 |
|
|
$ |
142,809 |
|
Scorpio Bulkers Inc. and
SubsidiariesOther Operating Data
(unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Time charter equivalent revenue ($000’s) (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
63,227 |
|
|
$ |
62,465 |
|
|
$ |
164,315 |
|
|
$ |
177,331 |
|
Voyage expenses |
|
(501 |
) |
|
(84 |
) |
|
(846 |
) |
|
(372 |
) |
Time charter equivalent revenue |
|
$ |
62,726 |
|
|
$ |
62,381 |
|
|
$ |
163,469 |
|
|
$ |
176,959 |
|
Time charter equivalent
revenue attributable to: |
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
21,709 |
|
|
$ |
22,739 |
|
|
$ |
60,673 |
|
|
$ |
64,445 |
|
Ultramax |
|
41,017 |
|
|
39,642 |
|
|
102,796 |
|
|
112,514 |
|
|
|
$ |
62,726 |
|
|
$ |
62,381 |
|
|
$ |
163,469 |
|
|
$ |
176,959 |
|
Revenue days: |
|
|
|
|
|
|
|
|
Kamsarmax |
|
1,651 |
|
|
1,666 |
|
|
5,198 |
|
|
4,911 |
|
Ultramax |
|
3,469 |
|
|
3,495 |
|
|
10,269 |
|
|
10,327 |
|
Combined |
|
5,120 |
|
|
5,161 |
|
|
15,467 |
|
|
15,238 |
|
TCE per revenue day (1): |
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
13,149 |
|
|
$ |
13,649 |
|
|
$ |
11,672 |
|
|
$ |
13,123 |
|
Ultramax |
|
$ |
11,824 |
|
|
$ |
11,342 |
|
|
$ |
10,010 |
|
|
$ |
10,895 |
|
Combined |
|
$ |
12,251 |
|
|
$ |
12,087 |
|
|
$ |
10,569 |
|
|
$ |
11,613 |
|
(1) The Company defines Time Charter Equivalent
(TCE) revenue as vessel revenues less voyage expenses. Such TCE
revenue, divided by the number of the Company’s available days
during the period, or revenue days, is TCE per revenue day, which
is consistent with industry standards. TCE per revenue day 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
charter hire rates for vessels on voyage charters are generally not
expressed in per-day amounts while charter hire rates for vessels
on time charters generally are expressed in such amounts.
The Company reports TCE revenue, a non-GAAP
financial measure, because (i) the Company believes it
provides additional meaningful information in conjunction with
vessel revenues and voyage expenses, the most directly comparable
U.S.-GAAP measures, (ii) it assists the Company’s management
in making decisions regarding the deployment and use of its vessels
and in evaluating their financial performance, (iii) it is a
standard shipping industry performance measure used primarily to
compare period-to-period changes in a shipping company’s
performance irrespective of changes in the mix of charter types
(i.e., spot charters, time charters and bareboat charters) under
which the vessels may be employed between the periods, and
(iv) the Company believes that it presents useful information
to investors. See Non-GAAP Financial Measures below.
Fleet List as of October 18,
2019
Vessel Name |
|
Year Built |
|
DWT |
|
Vessel Type |
SBI Samba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
SBI Rumba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
SBI Capoeira |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Carioca |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Conga |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Bolero |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Sousta |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Rock |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Lambada |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Reggae |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Zumba |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Macarena |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Parapara |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Mazurka |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Swing |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Jive |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Lynx |
|
2018 |
|
82,000 |
|
|
Kamsarmax |
Total Kamsarmax |
|
|
|
1,398,000 |
|
|
|
|
|
|
|
|
|
|
SBI Antares |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Athena |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Bravo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Leo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Echo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Lyra |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Tango |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Maia |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Hydra |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Subaru |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Pegasus |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Ursa |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Thalia |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Cronos |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Orion |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Achilles |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Hercules |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Perseus |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Hermes |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Zeus |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Hera |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Hyperion |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Tethys |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Phoebe |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Poseidon |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Apollo |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Samson |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Phoenix |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Gemini |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Libra |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Jaguar |
|
2014 |
|
64,000 |
|
|
Ultramax |
SBI Aries |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Taurus |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Pisces |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Virgo |
|
2017 |
|
64,000 |
|
|
Ultramax |
Total Ultramax |
|
|
|
2,179,800 |
|
|
|
Total Owned or Finance Leased Vessels DWT |
|
3,577,800 |
|
|
|
Time chartered-in vessels
The Company currently time
charters-in one Ultramax vessel and five Kamsarmax
vessels. The terms of the contracts are summarized as follows:
Vessel Type |
|
Year Built |
|
DWT |
|
Country of Build |
|
Daily Base Rate |
|
Earliest Expiry |
Ultramax |
|
2017 |
|
62,100 |
|
|
Japan |
|
$ |
10,885 |
|
|
30-Sep-20 |
|
(1) |
Kamsarmax |
|
2019 |
|
81,100 |
|
|
China |
|
Variable |
|
|
10-Mar-21 |
|
(2) |
Kamsarmax |
|
2019 |
|
81,100 |
|
|
China |
|
Variable |
|
|
7-Apr-21 |
|
(3) |
Kamsarmax |
|
2018 |
|
82,000 |
|
|
China |
|
$ |
12,000 |
|
|
25-June-21 |
|
(4) |
Kamsarmax |
|
2018 |
|
81,100 |
|
|
China |
|
Variable |
|
|
13-Jul-21 |
|
(5) |
Kamsarmax |
|
2015 |
|
81,100 |
|
|
China |
|
Variable |
|
|
22-Jul-21 |
|
(6) |
Total TC DWT |
|
|
|
468,500 |
|
|
|
|
|
|
|
|
|
(1) This vessel was originally time chartered-in
for 22 to 24 months at the Company’s option at $10,125 per day. In
September 2019, the Company exercised its option to extend the time
charter for one year at $10,885 per day. The vessel was delivered
to the Company in September 2017.(2) This vessel has been time
chartered-in for 24 to 27 months at the Company’s option at 118% of
the BPI. The vessel was delivered to the Company in March 2019.(3)
This vessel has been time chartered-in for 24 to 27 months at the
Company’s option at 118% of the BPI. The vessel was delivered to
the Company in May 2019.(4) This vessel is time chartered-in for 24
months at $12,000 per day for the first twelve months and at
$12,500 per day for the second twelve months. The Company has the
option to extend this time charter for 12 months at $13,000 per day
and an additional 12 months at $14,500 per day. The vessel was
delivered to the Company in July 2019.(5) This vessel has been time
chartered-in for 24 to 27 months at the Company’s option at 120% of
the BPI. The vessel was delivered to the Company in July 2019.(6)
This vessel has been time chartered-in for 24 to 27 months at the
Company’s option at 118% of the BPI. The vessel was delivered to
the Company in August 2019.
Conference Call on Results:
A conference call to discuss the Company’s
results will be held today, October 23, 2019, at 9:00 AM Eastern
Daylight Time / 3:00 PM Central European Summer Time. Those wishing
to listen to the call should dial 1 (866) 219-5268 (U.S.) or 1
(703) 736-7424 (International) at least 10 minutes prior to the
start of the call to ensure connection. The conference participant
passcode is 2443857.
There will also be a simultaneous live webcast
over the internet, through the Scorpio Bulkers Inc. website
www.scorpiobulkers.com. Participants to the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
Webcast URL:
https://edge.media-server.com/mmc/p/z9ur3yde
About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine
transportation of dry bulk commodities. Scorpio Bulkers Inc. has an
operating fleet of 58 vessels consisting of 52 wholly-owned or
finance leased drybulk vessels (including 17 Kamsarmax vessels and
35 Ultramax vessels), and six time chartered-in vessels
(including five Kamsarmax vessels and one Ultramax vessel). The
Company’s owned and finance leased fleet has a total carrying
capacity of approximately 3.6 million dwt and all of the
Company’s owned vessels have carrying capacities of greater than
60,000 dwt. Additional information about the Company is available
on the Company’s website www.scorpiobulkers.com, which is not
a part of this press release.
Non-GAAP Financial Measures
To supplement the Company’s financial
information presented in accordance with accounting principles
generally accepted in the U.S. (“GAAP”) management uses certain
“non-GAAP financial measures” as such term is defined in Regulation
G promulgated by the U.S. Securities and Exchange Commission (the
“SEC”). Generally, a non-GAAP financial measure is a numerical
measure of a company’s operating performance, financial position or
cash flows that excludes or includes amounts that are included in,
or excluded from, the most directly comparable measure calculated
and presented in accordance with GAAP. Management believes the
presentation of these measures provides investors with greater
transparency and supplemental data relating to the Company’s
financial condition and results of operations, and therefore a more
complete understanding of factors affecting its business than GAAP
measures alone. In addition, management believes the
presentation of these matters is useful to investors for
period-to-period comparison of results as the items may reflect
certain unique and/or non-operating items such as asset sales,
write-offs, contract termination costs or items outside of
management’s control.
Earnings before interest, taxes, depreciation
and amortization (“EBITDA”), adjusted net income (loss) and related
per share amounts, as well as adjusted EBITDA and TCE Revenue are
non-GAAP financial measures that the Company believes provide
investors with a means of evaluating and understanding how the
Company’s management evaluates the Company’s operating performance.
These non-GAAP financial measures should not be considered in
isolation from, as substitutes for, nor superior to financial
measures prepared in accordance with GAAP. Please see below for
reconciliations of EBITDA, adjusted net income (loss) and related
per share amounts, and adjusted EBITDA. Please see “Other Operating
Data” for a reconciliation of TCE revenue.
EBITDA (unaudited)
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
In thousands |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net (loss) income |
|
$ |
(1,928 |
) |
|
(354 |
) |
|
$ |
29,570 |
|
|
$ |
(5,325 |
) |
Add Back: |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
10,779 |
|
|
9,791 |
|
|
33,399 |
|
|
28,273 |
|
Depreciation and amortization (1) |
|
17,421 |
|
|
19,378 |
|
|
53,864 |
|
|
54,301 |
|
EBITDA |
|
$ |
26,272 |
|
|
28,815 |
|
|
$ |
116,833 |
|
|
$ |
77,249 |
|
(1) Includes depreciation, amortization of
deferred financing costs and restricted share amortization.
Adjusted net (loss) income
(unaudited)
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
|
|
|
In thousands, except per share
data |
|
2019 |
|
2019 |
|
|
Amount |
|
Per share |
|
Amount |
|
Per share |
Net (loss) income |
|
$ |
(1,928 |
) |
|
$ |
(0.03 |
) |
|
$ |
29,570 |
|
|
$ |
0.42 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
(Reversal of) loss / write-down on assets sold or held for
sale |
|
(194 |
) |
|
— |
|
|
12,041 |
|
|
0.17 |
|
Write-down of deferred financing cost |
|
— |
|
|
— |
|
|
446 |
|
|
0.01 |
|
Total adjustments |
|
$ |
(194 |
) |
|
$ |
— |
|
|
$ |
12,487 |
|
|
$ |
0.18 |
|
Adjusted net (loss)
income |
|
$ |
(2,122 |
) |
|
$ |
(0.03 |
) |
|
$ |
42,057 |
|
|
$ |
0.60 |
|
Adjusted EBITDA (unaudited)
|
|
Three MonthsEndedSeptember 30, |
|
Nine MonthsEndedSeptember 30, |
In thousands |
|
2019 |
|
2019 |
Net (loss) income |
|
$ |
(1,928 |
) |
|
$ |
29,570 |
|
Impact of adjustments |
|
(194 |
) |
|
12,487 |
|
Adjusted net (loss)
income |
|
(2,122 |
) |
|
42,057 |
|
Add Back: |
|
|
|
|
Net interest expense |
|
10,779 |
|
|
33,399 |
|
Depreciation and amortization (1) |
|
17,421 |
|
|
53,417 |
|
Adjusted
EBITDA |
|
$ |
26,078 |
|
|
$ |
128,873 |
|
(1) Includes depreciation, amortization of
deferred financing costs and restricted share amortization.
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. The Company desires to take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The
words “believe,” “anticipate,” “intend,” “estimate,” “forecast,”
“project,” “plan,” “potential,” “may,” “should,” “expect,”
“pending” and similar expressions identify forward-looking
statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, our management’s examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we
cannot assure you that we will achieve or accomplish these
expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in our view, could cause actual results to
differ materially from those discussed in the forward-looking
statements include the failure of counterparties to fully perform
their contracts with us, the strength of world economies and
currencies, general market conditions, including fluctuations in
charter rates and vessel values, changes in demand for dry bulk
vessel capacity, changes in our operating expenses, including
bunker prices, drydocking and insurance costs, the market for our
vessels, availability of financing and refinancing, counterparty
performance, ability to obtain financing (including for capital
expenditures) and comply with covenants in such financing
arrangements, fluctuations in the value of our investments, changes
in governmental rules and regulations or actions taken by
regulatory authorities, potential liability from pending or future
litigation, general domestic and international political
conditions, potential disruption of shipping routes due to
accidents or political events, vessels breakdowns and instances of
off-hires and other factors. Please see our filings with the SEC
for a more complete discussion of these and other risks and
uncertainties.
Contact:
Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)
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