Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers” or the
“Company”) today reported its results for the three months ended
September 30, 2020.
The Company also announced that its Board of Directors has
declared a quarterly cash dividend of $0.05 per share on the
Company’s common shares.
Share and per share results included herein have
been retroactively adjusted to reflect the one-for-ten reverse
stock split of the Company’s common shares, which took effect on
April 7, 2020.
Results for the Three and Nine Months
Ended September 30, 2020 and 2019
For the third quarter of 2020, the Company’s
GAAP net loss was $36.6 million, or $3.12 per diluted share,
including:
- a non-cash loss of approximately $3.7 million and cash dividend
income of $0.2 million, or $0.30 per diluted share, from the
Company’s equity investment in Scorpio Tankers Inc.; and
- a write-down of assets of approximately $19.6 million, or $1.67
per diluted share, related to the classification of the SBI Rock as
held for sale and the agreement to sell the SBI Sousta, both of
which are Kamsarmax vessels.
For the same period in 2019, the Company’s GAAP net loss was
$1.9 million, or $0.28 per diluted share. These results include a
non-cash gain of approximately $1.0 million and cash dividend
income of $0.5 million, or $0.23 per diluted share, from the
Company’s equity investment in Scorpio Tankers Inc., a partial
reversal of the write-downs of the SBI Puma and SBI Cougar of
approximately $0.2 million, or $0.03 per diluted share, and the
write-off of deferred financing costs of approximately $0.5
million, or $0.10 per diluted share.
Total vessel revenues for the third quarter of
2020 were $46.7 million, compared to $63.2 million for the same
period in 2019. Earnings before interest, taxes, depreciation and
amortization (“EBITDA”) for the third quarter of 2020 was a loss of
$13.9 million and EBITDA for the third quarter of 2019 was $26.3
million, respectively (see Non-GAAP Financial Measures below).
For the third quarter of 2020, the Company’s
adjusted net loss was $17.0 million, or $1.45 adjusted per diluted
share, which excludes the impact of the write-down of assets of
approximately $19.6 million relating to the classification of one
Kamsarmax vessel as held for sale and the agreement to sell
another. Adjusted EBITDA for the third quarter of 2020 was $5.7
million (see Non-GAAP Financial Measures below).
For the third quarter of 2019, the Company’s
adjusted net loss was $2.1 million, or $0.31 adjusted per diluted
share, which excludes the partial reversal of the write-downs of
the SBI Puma and SBI Cougar of approximately $0.2 million. Adjusted
EBITDA for the third quarter of 2019 was $26.1 million (see
Non-GAAP Financial Measures below).
For the first nine months of 2020, the Company’s
GAAP net loss was $206.4 million, or $23.34 per diluted share,
including:
- a loss of approximately $106.7 million and cash dividend income
of $0.9 million, or $12.31 per diluted share, from the Company’s
equity investment in Scorpio Tankers Inc.;
- a write-down of assets of approximately $36.6 million, or $4.14
per diluted share, related to the classification of the four
vessels as held for sale (SBI Taurus, SBI Bolero, SBI Jaguar and
SBI Rock) and the agreement to sell the SBI Sousta; and
- a write-off of approximately $0.4 million, or $0.04 per diluted
share, of deferred financing costs on the credit facilities related
to the SBI Taurus, SBI Bolero and SBI Jaguar.
For the first nine months of 2019, the Company’s
GAAP net income was $29.6 million, or $4.25 per diluted share.
These results include a non-cash gain of approximately $68.6
million and cash dividend income of $1.6 million, or $10.09 per
diluted share, from the Company’s equity investment in Scorpio
Tankers Inc., a write-down of assets either sold or held for sale
and write-off of related deferred financing costs totaling
approximately $12.5 million, or $1.79 per diluted share, and the
write-off of deferred financing costs of approximately $3.2
million, or $0.45 per diluted share.
Total vessel revenues for the first nine months
of 2020 were $113.7 million, compared to $164.3 million for the
same period in 2019. EBITDA for the first nine months of 2020
was a loss of $134.6 million and EBITDA for the first nine months
of 2019 was $116.8 million (see Non-GAAP Financial Measures
below).
For the first nine months of 2020, the Company’s
adjusted net loss was $169.4 million, or $19.16 adjusted per
diluted share, which excludes the impact of the write-down of
assets of approximately $36.6 million and the write-off of deferred
financing costs on credit facilities related to the three sold
vessels of approximately $0.4 million. Adjusted EBITDA for the
first nine months of 2020 was a loss of $97.9 million (see Non-GAAP
Financial Measures below).
For the first nine months of 2019, the Company’s
adjusted net income was $42.1 million, or $6.04 adjusted per
diluted share, which excludes the impact of the write-down of
assets either sold or held for sale of approximately $12.0 million
and the write-off of related deferred financing costs of
approximately $0.4 million. Adjusted EBITDA for the first nine
months of 2019 was $128.9 million (see Non-GAAP Financial Measures
below).
TCE Revenue
TCE Revenue Earned during the Third Quarter of
2020 (see Non-GAAP Financial Measures)
- Our Kamsarmax fleet (which includes both scrubber fitted and
non-scrubber fitted vessels) earned an average of $10,142 revenue
per day.
- Our Ultramax fleet (which includes both scrubber fitted and
non-scrubber fitted vessels) earned an average of $8,930 revenue
per day.
Voyages Fixed thus far for the Fourth Quarter of 2020, as of the
date hereof
- Kamsarmax fleet (which includes both scrubber fitted and
non-scrubber fitted vessels): approximately $12,740 revenue per day
on average for 42% of the days
- Ultramax fleet (which includes both scrubber fitted and
non-scrubber fitted vessels): approximately $11,226 revenue per day
on average for 45% of the days
Cash and Cash Equivalents
As of October 26, 2020, the Company had
approximately $105.5 million in cash and cash equivalents.
Recent Significant Events
COVID-19
Since the beginning of the calendar year 2020,
the ongoing outbreak of the novel coronavirus (COVID-19) that
originated in China in December 2019 and that has spread to most
developed nations of the world has resulted in numerous actions
taken by governments and governmental agencies in an attempt to
mitigate the spread of the virus. These measures have resulted in a
significant reduction in global economic activity and extreme
volatility in the global financial and commodities markets. A
significant reduction in manufacturing and other economic
activities has and is expected to continue to have a materially
adverse impact on the global demand for raw materials, coal and
other bulk cargoes that our customers transport on our vessels.
This significant decline in the demand for dry bulk tonnage may
materially and adversely impact our ability to profitably charter
our vessels. When these measures and the resulting economic impact
will end and what the long-term impact of such measures on the
global economy will be are not known at this time. As a result, the
extent to which COVID-19 will impact the Company’s results of
operations and financial condition will depend on future
developments, which are highly uncertain and cannot be
predicted.
Quarterly Cash Dividend
In the third quarter of 2020, the Company’s
Board of Directors declared and the Company paid a quarterly cash
dividend of $0.05 per share totaling approximately $0.6
million.
On October 27, 2020, the Company’s Board of
Directors declared a quarterly cash dividend of $0.05 per share,
payable on or about December 15, 2020, to all shareholders of
record as of November 13, 2020. As of October 27, 2020, 12,386,880
shares were outstanding.
Offshore Wind
Our transition continues, and our conviction
towards offshore wind is validated constantly. We are witnessing an
unprecedented alignment of scientific, political, and commercial
forces, leading to accelerated plans around the world to develop
wind energy. Shortly we expect to sign the contract for
the construction of our first installation vessel, but other steps
will follow. We are re-tooling our organization and our mission to
deliver the service that our customers will require.
Vessel Sales
The Company entered into agreements to sell the
following vessels to unaffiliated third parties (dollars in
thousands).
Vessels for which the sales occurred during the
third quarter.
|
Vessel |
Vessel Type |
Year Built |
Sales
Price |
Credit Facility |
Related
Debt |
Expected Delivery |
|
SBI Rock (1)(2) |
Kamsarmax |
2016 |
$ |
18,030 |
|
$184.0 Million |
$ |
6,015 |
|
Delivered October 2020 |
| SBI
Sousta |
Kamsarmax |
2016 |
$ |
18,435 |
|
$184.0
Million |
$ |
12,684 |
|
Q4
2020 |
| Total Sales
Price |
|
|
$ |
36,465 |
|
|
|
|
|
|
As a result of the classification of the SBI Rock
as held for sale and the agreement to sell the SBI Sousta, the
Company wrote-down assets by approximately $19.6 million as of
September 30, 2020.
Vessels for which the sales occurred from October
1, 2020 through October 26, 2020.
|
Vessel |
Vessel Type |
Year Built |
Sales
Price |
Credit Facility |
Related
Debt |
Expected Delivery |
|
SBI Conga (2) |
Kamsarmax |
2015 |
$ |
18,400 |
|
$184.0 Million |
$ |
12,009 |
|
Q4 2020 |
| SBI Phoenix
(2) |
Ultramax |
2017 |
$ |
17,000 |
|
$90.0
Million |
$ |
12,313 |
|
Q4
2020 |
| SBI Samson
(1)(2) |
Ultramax |
2017 |
$ |
17,000 |
|
$90.0
Million |
$ |
12,313 |
|
Delivered
October 2020 |
| SBI
Hera |
Ultramax |
2016 |
$ |
18,460 |
|
$184.0
Million |
$ |
12,759 |
|
Q4
2020 |
| SBI
Zeus |
Ultramax |
2016 |
$ |
18,500 |
|
$184.0
Million |
$ |
12,759 |
|
Q4
2020 |
| SBI
Hyperion |
Ultramax |
2016 |
$ |
17,500 |
|
$90.0
Million |
$ |
12,313 |
|
Q4
2020 |
| Total Sales
Price |
|
|
$ |
106,860 |
|
|
|
|
|
- The sale of the SBI Rock and SBI Samson have been completed as
of October 26, 2020.
- Related debt has been repaid between October 1, 2020 and
October 26, 2020.
As a result of the sales of the SBI Conga, SBI
Phoenix, SBI Samson, SBI Hera, SBI Zeus and SBI Hyperion announced
in October 2020, the Company expects to recognized asset
write-downs of approximately $45.2 million in the fourth quarter of
2020.
The Company also expects to write-off
approximately $2.0 million of deferred financing costs when the
related debt is repaid in the fourth quarter of 2020.
In addition, the available credit under the
Company’s revolving line of credit has been permanently reduced by
approximately $6.7 million in aggregate related to the sale of the
SBI Rock.
Debt and Liquidity
Amendment of Minimum Liquidity
Covenant
The Company has agreed with its lenders and a finance lessor to
permanently reduce the level of the minimum liquidity covenant
under the relevant debt financings from the greater of: (i) $25.0
million or (ii) $700,000 per owned vessel, to the greater of: (i)
$25.0 million or (ii) $500,000 per owned vessel. As a result, on
the basis of the current owned or finance leased fleet size of 47
vessels, the minimum liquidity requirement is $25.0 million (a
reduction from $32.9 million).
In consideration for the above amendment, the Company has made
advance principal repayments of approximately $7.7 million in
aggregate in the third quarter of 2020 that would have fallen due
in the third quarter of 2021.
Payment Holiday on Certain Future
Principal Repayments
The Company has agreed with its lenders to reduce future
principal repayments of approximately $29.8 million in aggregate
due under six credit facilities in exchange for advance principal
repayments of 50% of these future principal repayments
(approximately $14.9 million in aggregate) that were made in the
third quarter of 2020. The remaining future principal repayments of
$14.9 million will be added to the balloon amount due at maturity
for the respective credit facilities. As a result of these
agreements, the Company will not have to make certain installment
payments on these facilities through the end of the second quarter
of 2021 totaling $29.8 million. Given the above-mentioned
announced vessel sales, the amount of such future benefits is lower
as a portion of the debt was prepaid in full related to the vessel
sales.
The advance principal payments made during the third quarter of
2020 related to the amendment of the minimum liquidity covenant and
payment holidays by credit facility are as follows (dollars in
thousands):
| |
Amendment of MinimumLiquidity Covenant |
|
Payment Holiday onCertain Future
PrincipalRepayments |
|
|
|
|
|
|
|
| $85.5 Million Credit
Facility |
$ |
820 |
|
$ |
1,093 |
| $30.0 Million Credit
Facility |
|
555 |
|
|
1,111 |
| $60.0 Million Credit
Facility |
|
565 |
|
|
565 |
| $184.0 Million Credit
Facility |
|
3,479 |
|
|
6,958 |
| $34.0 Million Credit
Facility |
|
607 |
|
|
1,214 |
| $90.0 Million Credit
Facility |
|
1,650 |
|
|
3,950 |
| Total |
$ |
7,676 |
|
$ |
14,891 |
In addition, the Company agreed with a specific
finance lessor to defer two quarterly installment payments (i.e. Q1
2021 and Q2 2021) to the subsequent eight quarters (in equal
payments). As a result, the Company will not have to make certain
quarterly installment payments on this lease financing totaling
approximately $4.6 million that would have fallen due during the
first half of 2021.
Debt Overview
The Company’s outstanding debt balances, gross of unamortized
deferred financing costs as of September 30, 2020 and
October 26, 2020, are as follows (dollars in thousands):
| |
|
As of September 30,2020 |
|
As of October 26,2020 |
| |
|
|
| Credit
Facility |
|
Amount Outstanding |
|
$85.5 Million Credit Facility |
|
$ |
33,531 |
|
|
$ |
33,531 |
|
| $30.0 Million Credit
Facility |
|
26,166 |
|
|
26,166 |
|
| $60.0 Million Credit
Facility |
|
24,029 |
|
|
24,029 |
|
| $184.0 Million Credit Facility
(1) (2) |
|
66,552 |
|
|
115,661 |
|
| $34.0 Million Credit
Facility |
|
30,786 |
|
|
30,786 |
|
| $90.0 Million Credit Facility
(1) |
|
72,550 |
|
|
47,924 |
|
| $19.6 Million Lease Financing
- SBI Rumba |
|
15,935 |
|
|
15,829 |
|
| $19.0 Million Lease Financing
- SBI Tango |
|
16,412 |
|
|
16,309 |
|
| $19.0 Million Lease Financing
- SBI Echo |
|
16,548 |
|
|
16,453 |
|
| $20.5 Million Lease Financing
- SBI Hermes |
|
18,091 |
|
|
17,983 |
|
| $21.4 Million Lease Financing
- SBI Samba |
|
19,322 |
|
|
19,203 |
|
| CMBFL Lease Financing |
|
104,963 |
|
|
104,963 |
|
| $45.0 Million Lease Financing
- SBI Virgo & SBI Libra |
|
40,383 |
|
|
40,035 |
|
| AVIC Lease Financing |
|
104,330 |
|
|
103,184 |
|
| $67.3 Million Lease
Financing |
|
61,197 |
|
|
60,719 |
|
| Total |
|
$ |
650,795 |
|
|
$ |
672,775 |
|
(1) Debt outstanding as of October
26, 2020 to be repaid as per the summary of vessel sales table
above. As of October 26, 2020, the debt related to the SBI
Rock, SBI Samson, SBI Phoenix and SBI Conga has been repaid.(2)
Drew down $67.1 million of credit available under the revolving
line of credit during October 2020.
The Company’s projected quarterly debt
repayments on its bank loans and lease financing arrangements
through 2021 are as follows (dollars in thousands):
| |
|
Principal onBank Loans |
|
Principal onLease FinancingArrangements |
|
Total |
|
Q4 2020 (1)(2) |
|
$ |
51,880 |
|
|
$ |
6,593 |
|
|
$ |
58,473 |
|
| Q1 2021 |
|
1,305 |
|
|
6,782 |
|
|
8,087 |
|
| Q2 2021 |
|
1,305 |
|
|
6,817 |
|
|
8,122 |
|
| Q3 2021 |
|
749 |
|
|
9,716 |
|
|
10,465 |
|
| Q4 2021 |
|
6,027 |
|
|
9,736 |
|
|
15,763 |
|
| Total |
|
$ |
61,266 |
|
|
$ |
39,644 |
|
|
$ |
100,910 |
|
(1) Relates to payments expected to
be made from October 27, 2020 to December 31, 2020.(2) Includes the
repayment of approximately $50.5 million of the $184.0 Million
Credit Facility and $90.0 Million Credit Facility as per the above
summary of vessel sales table above (i.e. whose related debt has
not been repaid as of October 26,2020).
IMO 2020
As of October 26, 2020, the Company has
completed the installation of scrubbers on 17 Ultramax vessels and
10 Kamsarmax vessels and expects installation to be completed on
another Ultramax vessel in November 2020. In April 2020, the
Company reached an agreement with its counterparties to postpone
the installment of scrubbers on thirteen vessels until at least
2021 at no additional cost to the Company.
Financial Results for the Three Months
Ended September 30, 2020 Compared to the Three Months Ended
September 30, 2019
For the third quarter of 2020, the Company’s
GAAP net loss was $36.6 million, or $3.12 per diluted share,
compared to a GAAP net loss of $1.9 million, or $0.28 per diluted
share, for the same period in 2019. Results for the third quarter
of 2020 include: a non-cash loss of approximately $3.7 million and
cash dividend income of $0.2 million, or $0.30 per diluted share,
from the Company’s equity investment in Scorpio Tankers Inc., and
charges of approximately $19.6 million, or $1.67 per diluted share,
related to write-downs of the SBI Rock upon its classification as
held for sale and the SBI Sousta, which the Company agreed to sell.
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 $0.23 per diluted share, from the Company’s equity
investment in Scorpio Tankers Inc., a partial reversal of the
write-downs of the SBI Puma and SBI Cougar of approximately $0.2
million, or $0.03 per diluted share, and the write-off of deferred
financing costs of approximately $0.5 million, or $0.10 per diluted
share.
EBITDA for the third quarters of 2020 and 2019
were a loss of $13.9 million and a gain of $26.3 million,
respectively (see Non-GAAP Financial Measures below).
For the third quarter of 2020, the Company’s
adjusted net loss was $17.0 million, or $1.45 adjusted per diluted
share, which excludes the impact of the write-down of assets of
approximately $19.6 million. Adjusted EBITDA for the third quarter
of 2020 was $5.7 million (see Non-GAAP Financial Measures
below).
For the third quarter of 2019, the Company’s
adjusted net loss was $2.1 million, or $0.31 adjusted per diluted
share, which excludes the partial reversal of the write-downs of
the SBI Puma and SBI Cougar of approximately $0.2 million. Adjusted
EBITDA for the third quarter of 2019 was $26.1 million (see
Non-GAAP Financial Measures below).
The Company’s vessel revenues for the third
quarter of 2020 were $46.7 million, compared to $63.2 million in
the third quarter of 2019. The Company’s TCE revenue (see Non-GAAP
Financial Measures below) for the third quarter of 2020 was $45.0
million, a decrease of $17.7 million from the prior year
period.
Total operating expenses for the third quarter
of 2020 were $72.5 million, including the charge related to the
classification of the SBI Rock as held for sale and the agreement
to sell the SBI Sousta of approximately $19.6 million, compared to
total operating expenses of $54.5 million in the third quarter of
2019, which also included a partial reversal of the write-downs of
the SBI Puma and SBI Cougar of approximately $0.2 million.
Ultramax Operations
| |
Three Months Ended September 30, |
|
|
|
|
| Dollars in thousands |
2020 |
|
2019 |
|
Change |
|
% Change |
| TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
$ |
27,701 |
|
|
$ |
41,257 |
|
|
$ |
(13,556 |
) |
|
(33 |
) |
| Voyage expenses |
1,420 |
|
|
240 |
|
|
1,180 |
|
|
492 |
|
| TCE
Revenue |
$ |
26,281 |
|
|
$ |
41,017 |
|
|
$ |
(14,736 |
) |
|
(36 |
) |
| Operating
expenses: |
|
|
|
|
|
|
|
| Vessel operating costs |
16,508 |
|
|
16,798 |
|
|
(290 |
) |
|
(2 |
) |
| Charterhire expense |
520 |
|
|
936 |
|
|
(416 |
) |
|
(44 |
) |
| Vessel depreciation |
9,369 |
|
|
9,000 |
|
|
369 |
|
|
4 |
|
| General and administrative
expense |
937 |
|
|
1,070 |
|
|
(133 |
) |
|
(12 |
) |
| Loss / write-down on assets
held for sale |
— |
|
|
(194 |
) |
|
194 |
|
|
NA |
|
| Total operating
expenses |
$ |
27,334 |
|
|
$ |
27,610 |
|
|
$ |
(276 |
) |
|
(1 |
) |
| Operating (loss)
income |
$ |
(1,053 |
) |
|
$ |
13,407 |
|
|
$ |
(14,460 |
) |
|
(108 |
) |
Vessel revenue for the Company’s Ultramax
Operations decreased to $27.7 million for the third quarter of 2020
from $41.3 million in the prior year period.
TCE revenue (see Non-GAAP Financial Measures
below) for the Company’s Ultramax Operations was $26.3 million for
the third quarter of 2020 compared to $41.0 million for the prior
year period. The Company’s Ultramax fleet consisted of a
day-weighted average of 33 vessels owned or finance leased and one
vessel time chartered-in during the third quarter of 2020 and 37
vessels owned or finance leased and one vessel time chartered-in
during the third quarter of 2019. TCE revenue per day was $8,930
and $11,824 for the third quarters of 2020 and 2019,
respectively.
| |
Three Months Ended September 30, |
|
|
|
|
| Ultramax
Operations: |
2020 |
|
2019 |
|
Change |
|
% Change |
|
TCE Revenue (in thousands) |
$ |
26,281 |
|
|
$ |
41,017 |
|
|
$ |
(14,736 |
) |
|
(36 |
) |
| TCE Revenue / Day |
$ |
8,930 |
|
|
$ |
11,824 |
|
|
$ |
(2,894 |
) |
|
(24 |
) |
| Revenue Days |
2,943 |
|
|
3,469 |
|
|
(526 |
) |
|
(15 |
) |
The Company’s Ultramax Operations vessel
operating costs were $16.5 million for the third quarter of 2020,
including approximately $0.9 million of takeover costs and
contingency expenses, compared with vessel operating costs of $16.8
million in the prior year period, relating to the 33 and 37 vessels
owned or finance leased on average, respectively, during the
periods. The year over year decrease is due to the reduction in
fleet size. Daily operating costs excluding takeover costs and
contingency expenses for the third quarter of 2020 increased to
$5,150 from $4,796 in the prior year period due primarily to an
increase in crew related costs resulting from the outbreak of
COVID-19. COVID-19 related restrictions were relaxed in some
countries and the Company was able to move crews, albeit at a
higher cost. In addition, crews were and still are often required
to self-isolate in hotels prior to joining or upon completion of
their shift, requiring additional accommodation and medical test
expenses.
Charterhire expense for the Company’s Ultramax
Operations was approximately $0.5 million and $0.9 million for the
third quarters of 2020 and 2019, respectively, and relates to the
vessel that the Company time chartered-in until August 2020 when
the vessel was redelivered to its owner.
Ultramax Operations depreciation increased from
$9.0 million to $9.4 million in the third quarters of 2019 and 2020
respectively, despite the decrease in owned vessels as vessels were
drydocked and/or had scrubbers installed.
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 approximately $0.9 million for the third
quarter of 2020 and $1.1 million in the prior year period.
During the third quarter of 2019, a partial reversal of the
write-downs of the SBI Puma and SBI Cougar of approximately $0.2
million was recorded.
Kamsarmax Operations
| |
Three Months Ended September 30, |
|
|
|
|
| Dollars in thousands |
2020 |
|
2019 |
|
Change |
|
% Change |
| TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
$ |
18,989 |
|
|
$ |
21,970 |
|
|
$ |
(2,981 |
) |
|
(14 |
) |
| Voyage expenses |
277 |
|
|
261 |
|
|
16 |
|
|
6 |
|
| TCE
Revenue |
$ |
18,712 |
|
|
$ |
21,709 |
|
|
$ |
(2,997 |
) |
|
(14 |
) |
| Operating
expenses: |
|
|
|
|
|
|
|
| Vessel operating costs |
7,979 |
|
|
8,398 |
|
|
(419 |
) |
|
(5 |
) |
| Charterhire expense |
5,854 |
|
|
6,552 |
|
|
(698 |
) |
|
(11 |
) |
| Vessel depreciation |
4,721 |
|
|
4,533 |
|
|
188 |
|
|
4 |
|
| General and administrative
expense |
457 |
|
|
482 |
|
|
(25 |
) |
|
(5 |
) |
| Loss / write-down on assets
held for sale |
19,598 |
|
|
— |
|
|
19,598 |
|
|
NA |
|
| Total operating
expenses |
$ |
38,609 |
|
|
$ |
19,965 |
|
|
$ |
18,644 |
|
|
93 |
|
| Operating
loss |
$ |
(19,897 |
) |
|
$ |
1,744 |
|
|
$ |
(21,641 |
) |
|
1,241 |
|
Vessel revenue for the Company’s Kamsarmax
Operations decreased to $19.0 million in the third quarter of 2020
from $22.0 million in the prior year period.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $18.7 million for the
third quarter of 2020 associated with a day-weighted average of 16
vessels owned or finance leased and five vessels time chartered-in,
compared to $21.7 million for the prior year period associated with
a day-weighted average of 17 vessels owned or finance leased and
four vessels time chartered-in. TCE revenue per day was $10,142 and
$13,149 for the third quarters of 2020 and 2019, respectively.
| |
Three Months Ended September 30, |
|
|
|
|
| Kamsarmax
Operations: |
2020 |
|
2019 |
|
Change |
|
% Change |
|
TCE Revenue (in thousands) |
$ |
18,712 |
|
|
$ |
21,709 |
|
|
$ |
(2,997 |
) |
|
(14 |
) |
| TCE Revenue / Day |
$ |
10,142 |
|
|
$ |
13,149 |
|
|
$ |
(3,007 |
) |
|
(23 |
) |
| Revenue Days |
1,845 |
|
|
1,651 |
|
|
194 |
|
|
12 |
|
Kamsarmax Operations vessel operating costs were
$8.0 million for the third quarter of 2020, including approximately
$0.6 million of takeover costs and contingency expenses, compared
with vessel operating costs of $8.4 million in the prior year
period, relating to 16 and 17 vessels owned or finance leased on
average, respectively, during the periods. The year over year
decrease is due to the reduction in fleet size. Daily operating
costs excluding takeover costs and contingency expenses for the
third quarter of 2020 increased to $5,043 from $4,968 in the prior
year period due primarily to an increase in crew related costs
resulting from the outbreak of COVID-19. COVID-19 related
restrictions were relaxed in some countries and the Company was
able to move crews, albeit at a higher cost. In addition, crews
were and still are often required to self-isolate in hotels prior
to joining or upon completion of their shift, requiring additional
accommodation and medical test expenses.
Kamsarmax Operations charterhire expense was
$5.9 million in the third quarter of 2020, compared to $6.6 million
in the prior year period. Five vessels were time chartered-in
during both periods, however four of them are chartered-in at index
linked rates, which were lower in the third quarter of 2020 than in
the third quarter of 2019.
Kamsarmax Operations depreciation was $4.7
million and $4.5 million in the third quarters of 2020 and 2019,
respectively, despite the decrease in the number of vessels owned
or finance leased on average to 16 in the third quarter of 2020
from 17 in the third quarter of 2019 as vessels were drydocked
and/or had scrubbers installed during 2020.
General and administrative expense for the
Company’s Kamsarmax Operations was $0.5 million for both the third
quarters of 2020 and 2019. 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 third quarter of 2020, the Company
recorded a write down on assets held for sale of $19.6 million
related to the classification of the SBI Rock as held for sale and
the agreement to sell the SBI Sousta.
Corporate
Certain general and administrative expenses that
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 $4.9 million and $6.4 million in the third quarters of
2020 and 2019, respectively. The decrease from the prior year is
due primarily to a reduction in compensation costs.
The Company recorded a loss of approximately
$3.7 million for the third quarter of 2020 and received cash
dividend income of $0.2 million from its equity investment in
Scorpio Tankers Inc. During the third quarter of 2019, the Company
recorded a non-cash gain of approximately $1.0 million as well as
cash dividend income of $0.5 million also related to its equity
investment in Scorpio Tankers Inc.
Financial expenses, net of interest income
decreased to $7.2 million in the third quarter of 2020 from $12.3
million in the prior year period due to lower LIBOR rates.
Financial Results for the Nine Months
Ended September 30, 2020 Compared to the Nine Months Ended
September 30, 2019
For the first nine months of 2020, the Company’s
GAAP net loss was $206.4 million, or $23.34 per diluted share,
including a loss of approximately $106.7 million and cash dividend
income of $0.9 million, or $12.31 per diluted share, from the
Company’s equity investment in Scorpio Tankers Inc., a write-down
of assets of approximately $36.6 million, or $4.14 per diluted
share, related to the classification of four vessels (SBI Taurus,
SBI Bolero, SBI Jaguar and SBI Rock) as held for sale and the
agreement to sell the SBI Sousta and a write-off of approximately
$0.4 million, or $0.04 per diluted share, of deferred financing
costs on the credit facilities related to three vessels that were
sold in the first nine months of 2020 (SBI Taurus, SBI Bolero and
SBI Jaguar). For the first nine months of 2019, the Company’s GAAP
net income was $29.6 million, or $4.25 per diluted share. These
results include a non-cash gain of approximately $68.6 million and
cash dividend income of $1.6 million, or $10.09 per diluted share,
from the Company’s equity investment in Scorpio Tankers Inc., a
write-down of assets either sold or held for sale and write-off of
related deferred financing costs totaling approximately $12.5
million, or $1.79 per diluted share, and the write-off of deferred
financing costs of approximately $3.2 million, or $0.45 per diluted
share.
EBITDA for the first nine months of 2020 and
2019 were a loss of $134.6 million and a gain of $116.8 million,
respectively (see Non-GAAP Financial Measures below).
For the first nine months of 2020, the Company’s
adjusted net loss was $169.4 million, or $19.16 adjusted per
diluted share, which excludes the impact of the write-down of
assets of approximately $36.6 million and the write-off of deferred
financing costs on credit facilities related to the three vessels
sold of approximately $0.4 million. Adjusted EBITDA for the first
nine months of 2020 was a loss of $97.9 million (see Non-GAAP
Financial Measures below).
For the first nine months of 2019, the Company’s
adjusted net income was $42.1 million, or $6.04 adjusted per
diluted share, which excludes the impact of the write-down of
assets either sold or held for sale of approximately $12.0 million
and the write-off of related deferred financing costs of
approximately $0.4 million. Adjusted EBITDA for the first nine
months of 2019 was $128.9 million (see Non-GAAP Financial Measures
below).
The Company’s vessel revenues for the first nine
months of 2020 were $113.7 million compared to $164.3 million in
the first nine months of 2019. The Company’s TCE revenue (see
Non-GAAP Financial Measures below) for the first nine months of
2020 was $109.2 million, a decrease of $54.3 million from the prior
year period.
Total operating expenses for the first nine months of 2020 were
$186.8 million, including the write-down of vessels of
approximately $36.6 million, compared to $165.2 million in the
first nine months of 2019, which included a charge related to the
classification of vessels as sold or held for sale of approximately
$12.0 million.
Ultramax Operations
| |
Nine Months Ended September 30, |
|
|
|
|
| Dollars in thousands |
2020 |
|
2019 |
|
Change |
|
% Change |
| TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
$ |
66,744 |
|
|
$ |
103,234 |
|
|
$ |
(36,490 |
) |
|
(35 |
) |
| Voyage expenses |
2,787 |
|
|
438 |
|
|
2,349 |
|
|
536 |
|
| TCE
Revenue |
$ |
63,957 |
|
|
$ |
102,796 |
|
|
$ |
(38,839 |
) |
|
(38 |
) |
| Operating
expenses: |
|
|
|
|
|
|
|
| Vessel operating costs |
47,813 |
|
|
50,962 |
|
|
(3,149 |
) |
|
(6 |
) |
| Charterhire expense |
2,487 |
|
|
2,731 |
|
|
(244 |
) |
|
(9 |
) |
| Vessel depreciation |
25,499 |
|
|
27,108 |
|
|
(1,609 |
) |
|
(6 |
) |
| General and administrative
expense |
2,993 |
|
|
3,131 |
|
|
(138 |
) |
|
(4 |
) |
| Loss / write-down on assets
held for sale |
7,615 |
|
|
4,688 |
|
|
2,927 |
|
|
62 |
|
| Total operating
expenses |
$ |
86,407 |
|
|
$ |
88,620 |
|
|
$ |
(2,213 |
) |
|
(2 |
) |
| Operating (loss)
income |
$ |
(22,450 |
) |
|
$ |
14,176 |
|
|
$ |
(36,626 |
) |
|
(258 |
) |
Vessel revenue for the Company’s Ultramax
Operations decreased to $66.7 million for the first nine months of
2020 from $103.2 million in the prior year period.
TCE revenue (see Non-GAAP Financial Measures
below) for the Company’s Ultramax Operations was $64.0 million for
the first nine months of 2020 compared to $102.8 million for the
prior year period. The Company’s Ultramax fleet consisted of
a day-weighted average of 34 vessels owned or finance leased and
one vessel time chartered-in during the first nine months of 2020
and 37 vessels owned or finance leased and one vessel time
chartered-in during the first nine months of 2019. TCE revenue per
day was $7,604 and $10,010 for the first nine months of 2020 and
2019, respectively.
| |
Nine Months Ended September 30, |
|
|
|
|
| Ultramax
Operations: |
2020 |
|
2019 |
|
Change |
|
% Change |
|
TCE Revenue (in thousands) |
$ |
63,957 |
|
|
$ |
102,796 |
|
|
$ |
(38,839 |
) |
|
(38 |
) |
| TCE Revenue / Day |
$ |
7,604 |
|
|
$ |
10,010 |
|
|
$ |
(2,406 |
) |
|
(24 |
) |
| Revenue Days |
8,411 |
|
|
10,269 |
|
|
(1,858 |
) |
|
(18 |
) |
The Company’s Ultramax Operations vessel
operating costs were $47.8 million for the first nine months of
2020, including approximately $2.6 million of takeover costs and
contingency expenses, compared with vessel operating costs of $51.0
million in the prior year period, relating to the 34 and 37 vessels
owned or finance leased on average, respectively, during the
periods. The year over year decrease is due to primarily to the
reduction in fleet size and the outbreak of the COVID-19, which for
most of the year reduced crew travel and the purchase of stores and
spares and the performance of repairs. Daily operating costs
excluding takeover costs and contingency expenses for the first
nine months of 2020 remained flat at $4,888 compared to $4,873 in
the prior year period.
Charterhire expense for the Company’s Ultramax
Operations was approximately $2.4 million and $2.7 million for the
first nine months of 2020 and 2019, respectively, and relates to
the vessel that the Company time chartered-in until August 2020
when the vessel was redelivered to its owner.
Ultramax Operations depreciation decreased from
$27.1 million to $25.5 million due to the decrease in fleet size
and the classification of vessels as held for sale (upon which
depreciation ceases).
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 approximately $3.0 million for the first nine
months of 2020 and $3.1 million in the prior year period.
During the first nine months of 2020, the
Company recorded a write-down on assets held for sale of $7.6
million related to the classification of two Ultramax vessels, the
SBI Jaguar and SBI Taurus, as held for sale. The sales were
completed in April 2020. 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 |
2020 |
|
2019 |
|
Change |
|
% Change |
| TCE
Revenue: |
|
|
|
|
|
|
|
|
Vessel revenue |
$ |
46,935 |
|
|
$ |
61,081 |
|
|
$ |
(14,146 |
) |
|
(23 |
) |
| Voyage expenses |
1,730 |
|
|
408 |
|
|
1,322 |
|
|
324 |
|
| TCE
Revenue |
$ |
45,205 |
|
|
$ |
60,673 |
|
|
$ |
(15,468 |
) |
|
(25 |
) |
| Operating
expenses: |
|
|
|
|
|
|
|
| Vessel operating costs |
23,609 |
|
|
25,730 |
|
|
(2,121 |
) |
|
(8 |
) |
| Charterhire expense |
13,061 |
|
|
8,039 |
|
|
5,022 |
|
|
62 |
|
| Vessel depreciation |
13,614 |
|
|
13,695 |
|
|
(81 |
) |
|
(1 |
) |
| General and administrative
expense |
1,468 |
|
|
1,594 |
|
|
(126 |
) |
|
(8 |
) |
| Loss / write-down on assets
held for sale |
28,992 |
|
|
7,353 |
|
|
21,639 |
|
|
294 |
|
| Total operating
expenses |
$ |
80,744 |
|
|
$ |
56,411 |
|
|
$ |
24,333 |
|
|
43 |
|
| Operating
loss |
$ |
(35,539 |
) |
|
$ |
4,262 |
|
|
$ |
(39,801 |
) |
|
934 |
|
Vessel revenue for the Company’s Kamsarmax
Operations decreased to $46.9 million in the first nine months of
2020 from $61.1 million in the prior year period.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $45.2 million for the
first nine months of 2020 associated with a day-weighted average of
17 vessels owned or finance leased and five vessels time
chartered-in, compared to $60.7 million for the prior year period
associated with a day-weighted average of 19 vessels owned or
finance leased. TCE revenue per day was $8,640 and $11,672 for the
first nine months of 2020 and 2019, respectively.
| |
Nine Months Ended September 30, |
|
|
|
|
| Kamsarmax
Operations: |
2020 |
|
2019 |
|
Change |
|
% Change |
|
TCE Revenue (in thousands) |
$ |
45,205 |
|
|
$ |
60,673 |
|
|
$ |
(15,468 |
) |
|
(25 |
) |
| TCE Revenue / Day |
$ |
8,640 |
|
|
$ |
11,672 |
|
|
$ |
(3,032 |
) |
|
(26 |
) |
| Revenue Days |
5,232 |
|
|
5,198 |
|
|
34 |
|
|
1 |
|
Kamsarmax Operations vessel operating costs were
$23.6 million for the first nine months of 2020, including
approximately $1.3 million of takeover costs and contingency
expenses, compared with vessel operating costs of $25.7 million in
the prior year period, relating to 17 and 19 vessels owned or
finance leased on average, respectively, during the periods. The
year over year decrease is due primarily to the reduction in fleet
size and the outbreak of COVID-19, which for most of the year
reduced crew travel and the purchase of stores and spares and the
performance of repairs. Daily operating costs excluding takeover
costs and contingency expenses for the first nine months of 2020
decreased to $4,929 from $4,990 in the prior year period.
Kamsarmax Operations charterhire expense was
$13.0 million in the first nine months of 2020, relating to five
vessels the Company began time chartering-in during 2019. The
year over year increase reflects the full year impact of the cost
in 2020.
Kamsarmax Operations depreciation was $13.6
million and $13.7 million in the first nine months of 2020 and
2019, respectively. While the fleet size decreased, vessels were
drydocked or had scrubbers installed both of which added to the
costs being depreciated.
General and administrative expense for the
Company’s Kamsarmax Operations was $1.5 million for the first nine
months of 2020 and $1.6 million in the first nine months of
2019. 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 2020, the
Company recorded a write down on assets held for sale of $29.0
million related to the classification of two vessels (SBI Bolero
and SBI Rock) as held for sale and the agreement to sell the SBI
Sousta at September 30, 2020. In the first nine months of
2019, $7.4 million was written down related to assets either
sold or held for sale.
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 $15.1 million and $19.3 million in the first nine months
of 2020 and 2019, respectively. The decrease from the prior year is
due primarily to a reduction in compensation costs.
The Company recorded a non-cash loss of
approximately $106.7 million for the first nine months of 2020 and
received cash dividend income of $0.9 million from its equity
investment in Scorpio Tankers Inc. During the first nine months of
2019, the Company recorded a non-cash gain of approximately $68.6
million as well as cash dividend income of $1.6 million also
related to its equity investment in Scorpio Tankers Inc.
Financial expenses, net of interest income
decreased to $27.2 million in the first nine months of 2020 from
$39.8 million in the prior year period due to lower LIBOR rates and
the redemption of the Company’s 7.50% Senior Unsecured Notes in
August of 2019.
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Statements of
Operations (Amounts in thousands, except per share
data)
| |
|
Unaudited |
| |
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| Revenue: |
|
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
46,690 |
|
|
$ |
63,227 |
|
|
$ |
113,679 |
|
|
$ |
164,315 |
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
1,697 |
|
|
501 |
|
|
4,517 |
|
|
846 |
|
|
Vessel operating costs |
|
24,487 |
|
|
25,196 |
|
|
71,422 |
|
|
76,692 |
|
|
Charterhire expense |
|
6,374 |
|
|
7,488 |
|
|
15,548 |
|
|
10,770 |
|
|
Vessel depreciation |
|
14,090 |
|
|
13,533 |
|
|
39,113 |
|
|
40,803 |
|
|
General and administrative expenses |
|
6,285 |
|
|
7,941 |
|
|
19,589 |
|
|
24,001 |
|
|
Loss / write-down on assets sold or held for sale |
|
19,598 |
|
|
(194 |
) |
|
36,607 |
|
|
12,041 |
|
| Total operating
expenses |
|
72,531 |
|
|
54,465 |
|
|
186,796 |
|
|
165,153 |
|
| Operating loss
(income) |
|
(25,841 |
) |
|
8,762 |
|
|
(73,117 |
) |
|
(838 |
) |
| Other income
(expense): |
|
|
|
|
|
|
|
|
|
Interest income |
|
18 |
|
|
553 |
|
|
190 |
|
|
1,227 |
|
|
(Loss) income from equity investments |
|
(3,534 |
) |
|
1,582 |
|
|
(105,858 |
) |
|
70,227 |
|
|
Foreign exchange (loss) income |
|
(113 |
) |
|
18 |
|
|
(243 |
) |
|
(33 |
) |
|
Financial expense, net |
|
(7,155 |
) |
|
(12,843 |
) |
|
(27,352 |
) |
|
(41,013 |
) |
| Total other (expense)
income |
|
(10,784 |
) |
|
(10,690 |
) |
|
(133,263 |
) |
|
30,408 |
|
| Net loss |
|
$ |
(36,625 |
) |
|
$ |
(1,928 |
) |
|
$ |
(206,380 |
) |
|
$ |
29,570 |
|
| |
|
|
|
|
|
|
|
|
| (Loss) earnings per
share: |
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(3.12 |
) |
|
$ |
(0.28 |
) |
|
$ |
(23.34 |
) |
|
$ |
4.36 |
|
| Diluted |
|
$ |
(3.12 |
) |
|
$ |
(0.28 |
) |
|
$ |
(23.34 |
) |
|
$ |
4.25 |
|
| |
|
|
|
|
|
|
|
|
| Basic weighted average number
of common shares outstanding |
|
11,724 |
|
|
6,846 |
|
|
8,843 |
|
|
6,789 |
|
| Diluted weighted average
number of common shares outstanding |
|
11,724 |
|
|
6,846 |
|
|
8,843 |
|
|
6,961 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Balance Sheets
(Dollars in thousands)
| |
|
Unaudited |
|
|
| |
|
September 30, 2020 |
|
December 31, 2019 |
| Assets |
|
|
|
|
| Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
40,220 |
|
|
$ |
42,530 |
|
|
Accounts receivable |
|
21,142 |
|
|
13,209 |
|
|
Prepaid expenses and other current assets |
|
7,147 |
|
|
9,547 |
|
| Total current assets |
|
68,509 |
|
|
65,286 |
|
| Non-current assets |
|
|
|
|
|
Vessels, net |
|
1,277,383 |
|
|
1,271,993 |
|
|
Assets held for sale |
|
17,500 |
|
|
77,536 |
|
|
Equity investments |
|
23,857 |
|
|
173,298 |
|
|
Deferred financing costs, net |
|
2,410 |
|
|
2,982 |
|
|
Other assets |
|
39,056 |
|
|
74,464 |
|
|
Total non-current assets |
|
1,360,206 |
|
|
1,600,273 |
|
| Total
assets |
|
$ |
1,428,715 |
|
|
$ |
1,665,559 |
|
| |
|
|
|
|
| Liabilities and shareholders’
equity |
|
|
|
|
| Current liabilities |
|
|
|
|
|
Bank loans, net |
|
$ |
4,809 |
|
|
$ |
44,956 |
|
|
Capital lease obligations |
|
35,940 |
|
|
29,159 |
|
|
Accounts payable and accrued expenses |
|
32,805 |
|
|
49,718 |
|
| Total current liabilities |
|
73,554 |
|
|
123,833 |
|
| Non-current liabilities |
|
|
|
|
|
Bank loans, net |
|
244,545 |
|
|
332,613 |
|
|
Capital lease obligations |
|
356,693 |
|
|
321,646 |
|
|
Other liabilities |
|
135 |
|
|
12,500 |
|
| Total non-current
liabilities |
|
601,373 |
|
|
666,759 |
|
| Total liabilities |
|
674,927 |
|
|
790,592 |
|
| 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 31,875,000 and
21,250,000 shares as of September 30, 2020 and December 31, 2019;
outstanding 12,386,880 shares as of September 30, 2020 and
7,248,180 as of December 31, 2019 |
|
858 |
|
|
809 |
|
|
Paid-in capital |
|
1,802,296 |
|
|
1,717,144 |
|
|
Common shares held in treasury, at cost; 856,785 shares at
September 30, 2020 and December 31, 2019 |
|
(56,720 |
) |
|
(56,720 |
) |
|
Accumulated deficit |
|
(992,646 |
) |
|
(786,266 |
) |
| Total shareholders’
equity |
|
753,788 |
|
|
874,967 |
|
| Total liabilities and
shareholders’ equity |
|
$ |
1,428,715 |
|
|
$ |
1,665,559 |
|
| |
|
|
|
|
|
|
|
|
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Statements of Cash Flows
(unaudited)(Amounts in thousands)
| |
|
Nine Months Ended September 30, |
| |
|
2020 |
|
2019 |
| Operating
activities |
|
|
|
|
|
Net (loss) income |
|
$ |
(206,380 |
) |
|
$ |
29,570 |
|
| Adjustment to
reconcile net (loss) income to net cash provided by |
|
|
|
|
|
operating activities: |
|
|
|
|
|
Restricted share amortization |
|
5,552 |
|
|
6,674 |
|
|
Vessel depreciation |
|
39,113 |
|
|
40,803 |
|
|
Amortization of deferred financing costs |
|
2,880 |
|
|
5,941 |
|
|
Write-off of deferred financing costs |
|
366 |
|
|
446 |
|
|
Loss / write-down on assets held for sale |
|
33,894 |
|
|
10,385 |
|
|
Net unrealized losses (gains) on investments |
|
106,730 |
|
|
(68,606 |
) |
|
Dividend income on equity investment |
|
(872 |
) |
|
(1,623 |
) |
|
Drydocking expenditure |
|
(16,606 |
) |
|
(2,265 |
) |
| Changes in operating
assets and liabilities: |
|
|
|
|
|
Increase in accounts receivable |
|
(7,933 |
) |
|
(1,199 |
) |
|
Decrease (increase) in prepaid expenses and other assets |
|
23,421 |
|
|
(4,241 |
) |
|
(Decrease) increase in accounts payable and accrued expenses |
|
(27,817 |
) |
|
6,795 |
|
| Net cash (used in)
provided by operating activities |
|
(47,652 |
) |
|
22,680 |
|
| Investing
activities |
|
|
|
|
|
Equity investment |
|
— |
|
|
(1,500 |
) |
|
Sale of equity investment |
|
42,711 |
|
|
— |
|
|
Dividend income on equity investment |
|
872 |
|
|
1,623 |
|
|
Proceeds from sale of assets held for sale |
|
52,518 |
|
|
47,302 |
|
|
Scrubber payments |
|
(42,495 |
) |
|
(16,678 |
) |
| Net cash used in
investing activities |
|
53,606 |
|
|
30,747 |
|
| Financing
activities |
|
|
|
|
|
Proceeds from issuance of common stock |
|
82,254 |
|
|
— |
|
|
Proceeds from issuance of long-term debt |
|
132,708 |
|
|
300,070 |
|
|
Repayments of long-term debt |
|
(220,620 |
) |
|
(332,052 |
) |
|
Dividends paid |
|
(2,606 |
) |
|
(4,298 |
) |
|
Debt issue costs paid |
|
— |
|
|
(4,508 |
) |
| Net cash provided by
(used in) financing activities |
|
(8,264 |
) |
|
(40,788 |
) |
| (Decrease) increase in cash
and cash equivalents |
|
(2,310 |
) |
|
12,639 |
|
| Cash and cash equivalents,
beginning of period |
|
42,530 |
|
|
67,495 |
|
| Cash and cash
equivalents, end of period |
|
$ |
40,220 |
|
|
$ |
80,134 |
|
| |
|
|
|
|
|
|
|
|
Scorpio Bulkers Inc. and
SubsidiariesOther Operating Data
(unaudited)
| |
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| Time charter equivalent
revenue ($000’s) (1): |
|
|
|
|
|
|
|
|
|
Vessel revenue |
|
$ |
46,690 |
|
|
$ |
63,227 |
|
|
$ |
113,679 |
|
|
$ |
164,315 |
|
|
Voyage expenses |
|
(1,697 |
) |
|
(501 |
) |
|
(4,517 |
) |
|
(846 |
) |
|
Time charter equivalent revenue |
|
$ |
44,993 |
|
|
$ |
62,726 |
|
|
$ |
109,162 |
|
|
$ |
163,469 |
|
| Time charter equivalent
revenue attributable to: |
|
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
18,712 |
|
|
$ |
21,709 |
|
|
$ |
45,205 |
|
|
$ |
60,673 |
|
|
Ultramax |
|
26,281 |
|
|
41,017 |
|
|
63,957 |
|
|
102,796 |
|
| |
|
$ |
44,993 |
|
|
$ |
62,726 |
|
|
$ |
109,162 |
|
|
$ |
163,469 |
|
| Revenue days: |
|
|
|
|
|
|
|
|
|
Kamsarmax |
|
1,845 |
|
|
1,651 |
|
|
5,232 |
|
|
5,198 |
|
|
Ultramax |
|
2,943 |
|
|
3,469 |
|
|
8,411 |
|
|
10,269 |
|
| Combined |
|
4,788 |
|
|
5,120 |
|
|
13,643 |
|
|
15,467 |
|
| TCE per revenue day (1): |
|
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
10,142 |
|
|
$ |
13,149 |
|
|
$ |
8,640 |
|
|
$ |
11,672 |
|
|
Ultramax |
|
$ |
8,930 |
|
|
$ |
11,824 |
|
|
$ |
7,604 |
|
|
$ |
10,010 |
|
|
Combined |
|
$ |
9,397 |
|
|
$ |
12,251 |
|
|
$ |
8,001 |
|
|
$ |
10,569 |
|
(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 26,
2020
|
Vessel Name |
|
Year Built |
|
DWT |
|
Vessel Type |
|
Scrubber Installed ? |
|
SBI Samba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Rumba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Capoeira |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
|
No |
| SBI Carioca |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Conga |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
|
No |
| SBI Sousta |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
|
No |
| SBI Lambada |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
|
No |
| SBI Reggae |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
|
No |
| SBI Zumba |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Macarena |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Parapara |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Mazurka |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Swing |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Jive |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
| SBI Lynx |
|
2018 |
|
82,000 |
|
|
Kamsarmax |
|
Yes |
|
Total Kamsarmax |
|
|
|
1,234,000 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| SBI Antares |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Athena |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
Yes |
| SBI Bravo |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Leo |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Echo |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Lyra |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Tango |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Maia |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Hydra |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Subaru |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Pegasus |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Ursa |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Thalia |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Cronos |
|
2015 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Orion |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Achilles |
|
2016 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Hercules |
|
2016 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Perseus |
|
2016 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Hermes |
|
2016 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Zeus |
|
2016 |
|
60,200 |
|
|
Ultramax |
|
No |
| SBI Hera |
|
2016 |
|
60,200 |
|
|
Ultramax |
|
No |
| SBI Hyperion |
|
2016 |
|
61,000 |
|
|
Ultramax |
|
No |
| SBI Tethys |
|
2016 |
|
61,000 |
|
|
Ultramax |
|
Yes |
| SBI Phoebe |
|
2016 |
|
64,000 |
|
|
Ultramax |
|
Yes |
| SBI Poseidon |
|
2016 |
|
60,200 |
|
|
Ultramax |
|
Yes |
| SBI Apollo |
|
2016 |
|
60,200 |
|
|
Ultramax |
|
Yes |
| SBI Phoenix |
|
2017 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Gemini |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
Yes |
| SBI Libra |
|
2017 |
|
64,000 |
|
|
Ultramax |
|
Yes |
| SBI Aries |
|
2015 |
|
64,000 |
|
|
Ultramax |
|
Yes |
| SBI Pisces |
|
2016 |
|
64,000 |
|
|
Ultramax |
|
No |
| SBI Virgo |
|
2017 |
|
64,000 |
|
|
Ultramax |
|
Yes |
|
Total Ultramax |
|
|
|
1,987,800 |
|
|
|
|
|
|
Total Owned or Finance Leased Vessels DWT |
|
3,221,800 |
|
|
|
|
|
Time chartered-in vessels
The Company currently time charters-in five
Kamsarmax vessels. The terms of the contracts are summarized as
follows:
|
Vessel Type |
|
Year Built |
|
DWT |
|
Country of Build |
|
Daily BaseRate |
|
Earliest Expiry |
| Kamsarmax |
|
2019 |
|
81,100 |
|
|
China |
|
Variable |
|
10-Mar-21 |
|
(1 |
) |
| Kamsarmax |
|
2019 |
|
81,100 |
|
|
China |
|
Variable |
|
7-Apr-21 |
|
(2 |
) |
|
Kamsarmax |
|
2018 |
|
82,000 |
|
|
China |
|
$ |
12,500 |
|
|
25-June-21 |
|
(3 |
) |
| Kamsarmax |
|
2018 |
|
81,100 |
|
|
China |
|
Variable |
|
13-Jul-21 |
|
(4 |
) |
| Kamsarmax |
|
2015 |
|
81,100 |
|
|
China |
|
Variable |
|
22-Jul-21 |
|
(5 |
) |
|
Total TC DWT |
|
|
|
406,400 |
|
|
|
|
|
|
|
|
|
(1) This vessel has
been time chartered-in for 24 to 27 months at the Company’s option
at 118% of the Baltic Exchange’s 74,000 DWT Panamax Index, or the
BPI. The vessel was delivered to the Company in March 2019.(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 May 2019.(3) This vessel has been time chartered-in
for 24 months at $12,000 per day for the first 12 months and at
$12,500 per day for the second 12 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.(4) 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 July
2019.(5) 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 at 9:00 AM Eastern Daylight Time / 2:00 PM
Central European Time on October 27, 2020. 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 7883425. The information provided on the teleconference is
only accurate at the time of the conference call, and the Company
will take no responsibility for providing updated information.
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/6prhigw4
About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine
transportation of dry bulk commodities, and is investing in the
next generation of wind turbine installation vessels. The Company
has recently sold two vessels and has contracted to sell six
additional vessels, which are expected to close in the fourth
quarter of 2020. Upon the completion of the announced vessel sales,
Scorpio Bulkers Inc. will have an operating fleet of 46 vessels
consisting of 41 wholly-owned or finance leased drybulk vessels
(including 13 Kamsarmax vessels and 28 Ultramax vessels), and five
time chartered-in Kamsarmax vessels. In addition to its dry bulk
fleet, the Company has signed a letter of intent to enter into a
shipbuilding contract with Daewoo Shipbuilding and Marine
Engineering Inc. to build a wind turbine installation vessel to be
delivered in 2023, with options to build three further similar
vessels. The Company’s owned and finance leased fleet will have a
total carrying capacity of approximately 2.8 million dwt and all of
the Company’s owned and finance leased vessels will 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 |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Net (loss) income |
$ |
(36,625 |
) |
|
(1,928 |
) |
|
$ |
(206,380 |
) |
|
$ |
29,570 |
|
| Add Back: |
|
|
|
|
|
|
|
|
Net interest expense |
6,279 |
|
|
10,779 |
|
|
23,915 |
|
|
33,399 |
|
|
Depreciation and amortization (1) |
16,482 |
|
|
17,421 |
|
|
47,912 |
|
|
53,864 |
|
| EBITDA |
$ |
(13,864 |
) |
|
26,272 |
|
|
$ |
(134,553 |
) |
|
$ |
116,833 |
|
(1) Includes depreciation,
amortization of deferred financing costs and restricted share
amortization.
Adjusted net (loss) income (unaudited)
| |
Three Months EndedSeptember 30, |
|
Three Months EndedSeptember 30, |
| In thousands, except per share
data |
2020 |
|
2019 |
| |
Amount |
|
Per share |
|
Amount |
|
Per share |
|
Net loss |
$ |
(36,625 |
) |
|
$ |
(3.12 |
) |
|
$ |
(1,928 |
) |
|
$ |
(0.28 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
Loss / write-down on assets |
19,598 |
|
|
1.67 |
|
|
(194 |
) |
|
(0.03 |
) |
| Total adjustments |
$ |
19,598 |
|
|
$ |
1.67 |
|
|
$ |
(194 |
) |
|
$ |
(0.03 |
) |
| Adjusted net
loss |
$ |
(17,027 |
) |
|
$ |
(1.45 |
) |
|
$ |
(2,122 |
) |
|
$ |
(0.31 |
) |
| |
Nine Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
| In thousands, except per share
data |
2020 |
|
2019 |
| |
Amount |
|
Per share |
|
Amount |
|
Per share |
|
Net (loss) income |
$ |
(206,380 |
) |
|
$ |
(23.34 |
) |
|
$ |
29,570 |
|
|
$ |
4.25 |
| Adjustments: |
|
|
|
|
|
|
|
|
Loss / write-down on assets |
36,607 |
|
|
4.14 |
|
|
12,041 |
|
|
1.73 |
|
Write-off of deferred financing cost |
366 |
|
|
0.04 |
|
|
446 |
|
|
0.06 |
| Total
adjustments |
$ |
36,973 |
|
|
$ |
4.18 |
|
|
$ |
12,487 |
|
|
$ |
1.79 |
| Adjusted net (loss)
income |
$ |
(169,407 |
) |
|
$ |
(19.16 |
) |
|
$ |
42,057 |
|
|
$ |
6.04 |
Adjusted EBITDA (unaudited)
| |
Three Months Ended September
30, |
|
Nine Months EndedSeptember 30, |
| In thousands |
2020 |
|
2019 |
|
2020 |
|
2019 |
| Net (loss) income |
$ |
(36,625 |
) |
|
$ |
(1,928 |
) |
|
$ |
(206,380 |
) |
|
$ |
29,570 |
| Impact of adjustments |
19,598 |
|
|
(194 |
) |
|
36,973 |
|
|
12,487 |
| Adjusted net (loss)
income |
(17,027 |
) |
|
(2,122 |
) |
|
(169,407 |
) |
|
42,057 |
| Add Back: |
|
|
|
|
|
|
|
|
Net interest expense |
6,279 |
|
|
10,779 |
|
|
23,915 |
|
|
33,399 |
|
Depreciation and amortization (1) |
16,482 |
|
|
17,421 |
|
|
47,546 |
|
|
53,417 |
|
Adjusted EBITDA |
$ |
5,734 |
|
|
$ |
26,078 |
|
|
$ |
(97,946 |
) |
|
$ |
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. We undertake no obligation,
and specifically decline any obligation, except as required by law,
to publicly update or revise any forward‐looking statements,
whether as a result of new information, future events or
otherwise.
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, the length and severity of the ongoing novel
coronavirus (COVID-19) outbreak, including its effects on demand
for dry bulk products and the transportation thereof, 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 and the availability of capital resources
(including for capital expenditures) and comply with covenants in
such financing arrangements, planned capital expenditures, our
ability to successfully identify, consummate, integrate and realize
the expected benefits from acquisitions and changes to our business
strategy, 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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