Eagle Bulk Shipping Inc. (NYSE: EGLE) (“Eagle” or the “Company”),
one of the world’s largest owner-operators within the midsize
drybulk vessel segment, today reported financial results for the
quarter ended June 30, 2023.
Quarter Highlights:
- Generated Revenues, net of $101.4
million
- Achieved TCE(1) of $14,434/day
based on TCE Revenue(1) of $65.0 million
- Realized net income of $18.0
million, or $1.42 per basic share
- Adjusted net income(1) of $16.7
million, or $1.31 per basic share(1)
- Generated Adjusted EBITDA(1) of
$24.8 million
- Closed on the purchase and took
delivery of two high-specification 2020-built scrubber-fitted
Ultramax bulkcarriers
- Vessels were renamed the Halifax
Eagle and Vancouver Eagle
- Completed the sale of two non-core,
non-scrubber-fitted Supramax bulkcarriers (Montauk Eagle and
Newport Eagle)
- Executed upsize and extension of
credit facility
- Increased borrowing capacity by
$175 million, reduced margin and extended maturity to September
2028
- Repurchased 3.8 million shares of
common stock, representing 28% of outstanding shares (prior to
purchase)
- Declared a quarterly dividend of
$0.58 per share for the second quarter of 2023
- Dividend is payable on
August 24, 2023 to shareholders of record at the close of
business on August 16, 2023
1 These are non-GAAP financial measures. A reconciliation of
GAAP to non-GAAP financial measures has been provided in the
financial tables included in this press release. An explanation of
these measures and how they are calculated are also included below
under the heading “Supplemental Information - Non-GAAP Financial
Measures.”
Recent Developments:
- Completed the sale of the Sankaty
Eagle, a non-core, non-scrubber-fitted Supramax bulkcarrier (July
2023)
- Coverage position for the third
quarter of 2023 is as follows:
- 67% of owned available days fixed
at an average TCE of $10,900
Eagle's CEO Gary Vogel commented, “We
meaningfully outperformed the benchmark BSI (Baltic Supramax Index)
as we achieved a net TCE of $14,434 in the second quarter, in what
proved to be a challenging market for the industry due to
lackluster demand from China and ongoing easing of congestion.
While earnings for the quarter were muted, in
line with the market, dividends per share were impacted positively
by over 40% as a result of our significant share repurchase
effected during the quarter. We also finalized the acquisition of
two 2020-built scrubber fitted Ultramax vessels as well as the sale
of three non-scrubber fitted Supramaxes.
Looking ahead, the forward curve for the balance
of the year remains in contango reflecting the market’s continued
expectation for a recovery in rates as supply/demand dynamics
continue to strengthen. With congestion now back to pre-COVID
levels, and essentially fully unwound, we see rates pushing back-up
above the forward curve. We remain positive about the medium-term
prospects for the drybulk industry, particularly given the
historically strong supply side fundamentals.
With a fully modern fleet of 52, predominately
scrubber-fitted vessels, and $195 million of liquidity, Eagle is in
a unique leadership position to continue to take advantage of
opportunities for the benefit of our shareholders.”
Fleet Operating Data
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Ownership Days |
|
4,805 |
|
4,823 |
|
9,616 |
|
9,593 |
Owned Available Days |
|
4,502 |
|
4,574 |
|
9,083 |
|
9,011 |
Fleet Development
- Halifax Eagle, a 2020-built,
scrubber-fitted Ultramax (64k DWT)
- Acquired in first quarter of 2023
for $30.1 million and delivered to the Company in second quarter of
2023
- Vancouver Eagle, a 2020-built,
scrubber-fitted Ultramax (64k DWT)
- Acquired in first quarter of 2023
for $30.1 million and delivered to the Company in second quarter of
2023
- Montauk Eagle, a 2011-built
Supramax (58k DWT)
- Sold in second quarter of 2023 for
$16.7 million and delivered to new owners in second quarter of
2023
- Newport Eagle, a 2011-built
Supramax (58k DWT)
- Sold in second quarter of 2023 for
$16.7 million and delivered to new owners in second quarter of
2023
- Sankaty Eagle, a 2011-built
Supramax (58k DWT)
- Sold in second quarter of 2023 for
$16.4 million and delivered to new owners in third quarter of
2023
- Pro forma owned fleet totals 52
vessels with an average age of 10.0 years
Results of Operations for the
three and six months ended
June 30, 2023 and
2022
For the three months ended June 30, 2023,
the Company reported net income of $18.0 million, or basic and
diluted net income per share of $1.42 and $1.21, respectively. In
the comparable quarter of 2022, the Company reported net income of
$94.5 million, or basic and diluted net income per share of $7.27
and $5.77, respectively.
For the three months ended June 30, 2023,
the Company reported adjusted net income of $16.7 million, which
excludes net unrealized gains on FFAs and bunker swaps of $2.0
million and impairment of operating lease right-of-use assets of
$0.7 million, or basic and diluted adjusted net income per share of
$1.31 and $1.13, respectively. In the comparable quarter of 2022,
the Company reported adjusted net income of $81.6 million, which
excludes net unrealized gains on FFAs and bunker swaps of $12.8
million, or basic and diluted adjusted net income per share of
$6.28 and $4.98, respectively.
For the six months ended June 30, 2023, the
Company reported net income of $21.2 million, or basic and diluted
net income per share of $1.65 and $1.48, respectively. For the six
months ended June 30, 2022, the Company reported net income of
$147.5 million, or basic and diluted net income per share of $11.36
and $9.01, respectively.
For the six months ended June 30, 2023, the
Company reported adjusted net income of $20.2 million, which
excludes net unrealized gains on FFAs and bunker swaps of $1.8
million and impairment of operating lease right-of-use assets of
$0.7 million, or basic and diluted adjusted net income per share of
$1.56 and $1.42, respectively. For the six months ended
June 30, 2022, the Company reported adjusted net income of
$146.1 million, which excludes net unrealized gains on FFAs and
bunker swaps of $1.4 million, or basic and diluted adjusted net
income per share of $11.26 and $8.93, respectively.
Revenues, net
Revenues, net for the three months ended
June 30, 2023 were $101.4 million compared to $198.7 million
for the comparable quarter of 2022. Revenues, net decreased $97.3
million primarily due to lower rates on both time and voyage
charters, driven by a decline in the drybulk market.
Revenues, net for the six months ended
June 30, 2023 were $206.6 million compared to $383.1 million
for the six months ended June 30, 2022. Revenues, net
decreased $176.5 million primarily due to lower rates on both time
and voyage charters, driven by a decline in the drybulk market.
Voyage expenses
Voyage expenses for the three months ended
June 30, 2023 were $25.5 million compared to $36.3 million for
the comparable quarter of 2022. Voyage expenses decreased $10.8
million primarily due to a $7.4 million reduction in bunker
consumption expenses due to a decrease in bunker prices, a $2.3
million reduction in port expenses due to a decrease in voyage
charters and a $1.1 million decrease in broker commissions due to
lower revenues.
Voyage expenses for the six months ended
June 30, 2023 were $58.9 million compared to $79.9 million for
the six months ended June 30, 2022. Voyage expenses decreased
$21.0 million primarily due to a $10.5 million reduction in bunker
consumption expenses due to a decrease in bunker prices, a $8.3
million reduction in port expenses due to a decrease in voyage
charters and a $2.2 million decrease in broker commissions due to
lower revenues.
Vessel operating expenses
Vessel operating expenses for the three months
ended June 30, 2023 were $31.0 million compared to $27.2
million for the comparable quarter of 2022. Vessel operating
expenses increased $3.8 million due to a $3.8 million increase in
costs primarily driven by certain repairs and discretionary
spending on upgrades to six vessels, including newly acquired ships
and a $0.9 million increase in crewing costs driven by higher
compensation and increased crew changes as a result of crewing
manager transitions, partially offset by a $0.5 million decrease in
lube costs driven by lower purchase volume.
Vessel operating expenses for the six months
ended June 30, 2023 were $62.3 million compared to $55.1
million for the six months ended June 30, 2022. Vessel
operating expenses increased $7.1 million as a result of higher
ownership days and due to a $4.5 million increase in costs driven
by certain repairs and discretionary spending on upgrades to six
vessels, including newly acquired ships and a $3.3 million increase
in crewing costs driven by higher compensation and increased crew
changes as a result of crewing manager transitions, partially
offset by a $0.5 million decrease in lube costs driven by lower
purchase volume.
Adjusted vessel operating expenses(2), which
excludes one-time, non-recurring expenses related to vessel
acquisitions, charges relating to a change in the crewing manager
on some of the Company’s vessels and discretionary hull and hold
upgrades for the three months ended June 30, 2023 were $28.3
million compared to $26.9 million for the comparable quarter in
2022. Adjusted vessel operating expenses increased $1.3 million
primarily due to a $2.7 million increase in costs driven by certain
repairs on six vessels, partially offset by a $0.7 million decrease
in stores and spares due to the timing of purchases and a $0.7
million decrease in lube costs driven by lower purchase volume.
Average daily adjusted vessel operating expenses(2) (“Adjusted
DVOE”) for the three months ended June 30, 2023 were $5,882
compared to $5,584 for the comparable quarter in 2022.
Adjusted vessel operating expenses(2), which
excludes one-time, non-recurring expenses related to vessel
acquisitions, charges relating to a change in the crewing manager
on some of the Company’s vessels and discretionary hull and hold
upgrades for the six months ended June 30, 2023 were $59.1
million compared to $54.7 million for the six months ended
June 30, 2022. Adjusted vessel operating expenses increased
$4.4 million primarily due to a $3.4 million increase in costs
driven by certain repairs to six vessels and a $2.6 million
increase in crewing costs driven by higher compensation, partially
offset by a $0.8 million decrease in lube costs driven by lower
purchase volume. Adjusted DVOE for the six months ended
June 30, 2023 were $6,141 compared to $5,702 for the six
months ended June 30, 2022.
2 This is a non-GAAP financial measure. A
reconciliation of GAAP to non-GAAP financial measures has been
provided in the financial tables included in this press release. An
explanation of this measure and how it is calculated is also
included below under the heading “Supplemental Information -
Non-GAAP Financial Measures.”
Charter hire expenses
Charter hire expenses for the three months ended
June 30, 2023 were $11.7 million compared to $21.3 million for
the comparable quarter of 2022. Charter hire expenses decreased
$9.6 million primarily due to decreases in both charter hire rates
and chartered-in days related to a decline in the drybulk
market.
Charter hire expenses for the six months ended
June 30, 2023 were $24.1 million compared to $44.0 million for
the six months ended June 30, 2022. Charter hire expenses
decreased $19.9 million primarily due to decreases in both charter
hire rates and chartered-in days related to a decline in the
drybulk market.
Chartered-in days, which is the aggregate number
of days in a period during which the Company chartered-in vessels,
for the three months ended June 30, 2023 and 2022 were 782 and
1,142 days, respectively. Chartered-in days for the six months
ended June 30, 2023 and 2022 were 1,726 and 2,102,
respectively.
Depreciation and amortization
Depreciation and amortization for the three
months ended June 30, 2023 was $14.8 million compared to
$15.3 million for the comparable quarter of 2022. Depreciation and
amortization decreased $0.4 million primarily due to a $1.0 million
decrease in depreciation due to a change in our estimated vessel
scrap value from $300 per lwt to $400 per lwt, effective January 1,
2023, partially offset by a $0.4 million increase in depreciation
from the net impact of vessels acquired and sold during the
respective periods.
Depreciation and amortization for the six months
ended June 30, 2023 was $29.6 million compared to $29.8
million for the six months ended June 30, 2022. Depreciation
and amortization decreased $0.3 million primarily due to a $2.0
million decrease in depreciation due to a change in our estimated
vessel scrap value from $300 per lwt to $400 per lwt, effective
January 1, 2023, partially offset by a $0.7 million increase in
depreciation from the net impact of vessels acquired and sold
during the respective periods and a $0.7 million increase in
deferred drydocking cost amortization due to higher drydocking
expenditures and a $0.2 million increase in depreciation driven by
an increase in installed vessel improvements.
General and administrative expenses
General and administrative expenses for the
three months ended June 30, 2023 were $11.3 million compared
to $9.9 million for the comparable quarter of 2022. Excluding
stock-based compensation expense of $2.2 million and $1.6 million
for the three months ended June 30, 2023 and 2022,
respectively, general and administrative expenses for the three
months ended June 30, 2023 were $9.1 million compared to $8.3
million for the comparable quarter of 2022. General and
administrative expenses increased $1.4 million primarily due to a
$0.9 million increase in employee-related costs and a $0.6 million
increase in stock-based compensation expense.
General and administrative expenses for the six
months ended June 30, 2023 were $22.2 million compared to
$19.9 million for the six months ended June 30, 2022.
Excluding stock-based compensation expense of $4.0 million and $3.1
million for the six months ended June 30, 2023 and 2022,
respectively, general and administrative expenses for the six
months ended June 30, 2023 were $18.2 million compared to
$16.9 million for the six months ended June 30, 2022. General
and administrative expenses increased $2.3 million primarily due to
a $0.9 million increase in stock-based compensation expense, a $0.9
million increase in employee-related costs and other small
increases across professional fees, corporate travel and office
expenses.
Other operating expense
Other operating expense for the three months
ended June 30, 2023 and 2022 was $0.1 million and less than
$0.1 million, respectively.
Other operating expense for each of the six
months ended June 30, 2023 and 2022 was $0.2 million.
Gain on sale of vessels
For the three months ended June 30, 2023,
the Company recorded a gain on the sale of the vessels Montauk
Eagle and Newport Eagle of $11.6 million.
For the six months ended June 30, 2023, the
Company recorded a gain on the sale of the vessels Jaeger, Montauk
Eagle and Newport Eagle of $14.9 million.
Interest expense
Interest expense for the three months ended
June 30, 2023 and 2022 was $4.4 million and
$4.3 million, respectively. Interest expense increased $0.1
million due to higher interest rates on amounts outstanding under
the Global Ultraco Debt Facility, partially offset by the impact of
interest rate hedging instruments.
Interest expense for the six months ended
June 30, 2023 and 2022 was $8.3 million and
$8.8 million, respectively. Interest expense decreased $0.5
million due to lower average outstanding principal balances driven
by principal repayments and the impact of interest rate hedging
instruments, partially offset by the impact of higher interest
rates on amounts outstanding under the Global Ultraco Debt
Facility.
Interest income
Interest income for the three months ended June 30, 2023
and 2022 was $1.8 million and $0.2 million, respectively.
Interest income increased primarily due to higher interest rates on
the Company’s cash balances.
Interest income for the six months ended
June 30, 2023 and 2022 was $3.7 million and $0.2 million,
respectively. Interest income increased primarily due to higher
interest rates on the Company’s cash balances.
Realized and unrealized gain on derivative
instruments, net
Realized and unrealized gain on derivative
instruments, net for the three months ended June 30, 2023 was
$2.8 million compared to $9.9 million for the comparable quarter of
2022. The realized and unrealized gain on derivative instruments,
net decreased $7.1 million due to market movements as well as lower
FFA and bunker swap activity.
Realized and unrealized gain on derivative
instruments, net for the six months ended June 30, 2023 was
$2.4 million compared to $2.0 million for the six months ended
June 30, 2022. The realized and unrealized gain on derivative
instruments, net increased $0.4 million due to market movements as
well as lower FFA and bunker swap activity.
A summary of outstanding FFAs as of
June 30, 2023 is as follows:
FFA Period |
|
Average FFA Contract Price |
|
Number of Days Hedged |
Quarter ending September 30, 2023 - Buy Positions |
|
$ |
14,289 |
|
(720 |
) |
Quarter ending September 30,
2023 - Sell Positions |
|
$ |
14,976 |
|
765 |
|
Quarter ending December 31,
2023 - Buy Positions |
|
$ |
13,896 |
|
(705 |
) |
Quarter ending December 31,
2023 - Sell Positions |
|
$ |
14,855 |
|
795 |
|
Liquidity and Capital
Resources
|
|
Six Months Ended |
($ in thousands) |
|
June 30, 2023 |
|
June 30, 2022 |
Net cash provided by operating activities |
|
$ |
32,158 |
|
|
$ |
140,214 |
|
Net cash used in investing
activities |
|
|
(42,290 |
) |
|
|
(5,543 |
) |
Net cash used in financing
activities |
|
|
(61,344 |
) |
|
|
(79,363 |
) |
Net (decrease)/increase in cash,
cash equivalents and restricted cash |
|
|
(71,476 |
) |
|
|
55,308 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
189,754 |
|
|
|
86,222 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
118,278 |
|
|
$ |
141,530 |
|
Net cash provided by operating activities for
the six months ended June 30, 2023 was $32.2 million, compared
to $140.2 million for the six months ended June 30, 2022. The
decrease is primarily due to a decrease in net income driven by
lower freight rates, partially offset by changes in operating
assets and liabilities primarily driven by decreases in accounts
receivable and inventories for the six months ended June 30, 2023
compared to increases for the comparable period in 2022.
Net cash used in investing activities for the
six months ended June 30, 2023 was $42.3 million,
compared to $5.5 million for the six months ended June 30,
2022. During the six months ended June 30, 2023, the Company
(i) paid $81.7 million to purchase three vessels and other vessel
improvements and (ii) paid $1.4 million to purchase BWTS. These
uses of cash were partially offset by $40.7 million in net proceeds
from the sale of three vessels. During the six months ended
June 30, 2022, the Company (i) paid $4.8 million to purchase
BWTS, (ii) paid $0.5 million to purchase vessel improvements and
(iii) paid $0.2 million to purchase other fixed assets.
Net cash used in financing activities for the
six months ended June 30, 2023 was $61.3 million, compared to
$79.4 million for the six months ended June 30, 2022. During
the six months ended June 30, 2023, the Company (i) paid
$221.2 million to repurchase Common Stock, inclusive of fees, (ii)
repaid $24.9 million of term loan under the Global Ultraco Debt
Facility, (iii) paid $10.0 million in dividends and (iv) paid $1.7
million for taxes related to net share settlement of equity awards.
These uses of cash were partially offset by (i) $123.4 million of
proceeds, net of debt issuance costs, from the Revolving Facility
under the Global Ultraco Debt Facility and (ii) $73.1 million of
proceeds, net of debt issuance costs, from the Term Facility under
the Global Ultraco Debt Facility. During the six months ended
June 30, 2022, the Company (i) paid $52.8 million in
dividends, (ii) repaid $24.9 million of term loan under the Global
Ultraco Debt Facility and (iii) paid $1.9 million for taxes related
to net share settlement of equity awards. As it relates to amounts
paid for taxes related to net share settlement of equity awards,
the Company withholds a number of shares earned by employees with a
value equal to amounts paid.
As of June 30, 2023, cash and cash
equivalents including noncurrent restricted cash was $118.3 million
compared to $189.8 million as of December 31, 2022.
A summary of the Company’s debt as of
June 30, 2023 and December 31, 2022 is as follows:
|
|
June 30, 2023 |
|
December 31, 2022 |
($ in thousands) |
|
Principal Amount Outstanding |
|
Debt Discounts and Debt Issuance Costs |
|
Carrying Value |
|
Principal Amount Outstanding |
|
Debt Discounts andDebt Issuance Costs |
|
Carrying Value |
Convertible Bond Debt |
|
$ |
104,119 |
|
|
$ |
(426 |
) |
|
$ |
103,693 |
|
|
$ |
104,119 |
|
|
$ |
(620 |
) |
|
$ |
103,499 |
|
Global Ultraco Debt Facility -
Term Facility |
|
|
287,850 |
|
|
|
(6,273 |
) |
|
|
281,577 |
|
|
|
237,750 |
|
|
|
(6,767 |
) |
|
|
230,983 |
|
Global Ultraco Debt Facility -
Revolving Facility |
|
|
125,000 |
|
|
|
(3,159 |
) |
|
|
121,841 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total debt |
|
|
516,969 |
|
|
|
(9,858 |
) |
|
|
507,111 |
|
|
|
341,869 |
|
|
|
(7,387 |
) |
|
|
334,482 |
|
Less: Current portion - Global
Ultraco Debt Facility |
|
|
(49,800 |
) |
|
|
— |
|
|
|
(49,800 |
) |
|
|
(49,800 |
) |
|
|
— |
|
|
|
(49,800 |
) |
Total long-term debt |
|
$ |
467,169 |
|
|
$ |
(9,858 |
) |
|
$ |
457,311 |
|
|
$ |
292,069 |
|
|
$ |
(7,387 |
) |
|
$ |
284,682 |
|
(1) |
|
As
of June 30, 2023 and December 31, 2022, the undrawn
revolving facility under the Global Ultraco Debt Facility was $60
million and $100 million, respectively. |
The Company continuously evaluates potential
transactions that it expects to be accretive to earnings, enhance
shareholder value or are in the best interests of the Company,
including without limitation, business combinations, the
acquisition of vessels or related businesses, repayment or
refinancing of existing debt, the issuance of new securities, share
and debt repurchases or other transactions.
Capital Expenditures and
Drydocking
Our capital expenditures primarily relate to the
purchase of vessels as well as regularly scheduled drydocking and
other vessel improvements, which are expected to enhance their
revenue earning capabilities, efficiency and/or safety and to
comply with international shipping standards and environmental laws
and regulations. Certain vessel improvement costs and costs
incurred in connection with drydocking are necessary to comply with
international shipping standards and environmental laws and
regulations, while others are discretionary in nature and evaluated
on a business case-by-case basis.
During the fourth quarter of 2022, the Company
entered into a memorandum of agreement to acquire a
high-specification 2015-built Ultramax bulkcarrier for total
consideration of $24.3 million. The vessel was delivered to the
Company during the first quarter of 2023.
On January 30, 2023, the Company entered into a memorandum of
agreement to acquire a high-specification 2020-built
scrubber-fitted Ultramax bulkcarrier for total consideration of
$30.1 million. The vessel was delivered to the Company during the
second quarter of 2023.
On February 28, 2023, the Company entered into a
memorandum of agreement to acquire a high-specification 2020-built
scrubber-fitted Ultramax bulkcarrier for total consideration of
$30.1 million. The vessel was delivered to the Company during the
second quarter of 2023.
Although the Company has some flexibility
regarding the timing of vessel drydockings, the timing of costs are
relatively predictable. In accordance with statutory requirements,
we expect vessels less than 15 years old to be drydocked every 60
months and vessels older than 15 years to be drydocked every 30
months. We intend to fund drydocking costs with cash from
operations, cash on hand or with amounts available under the Global
Ultraco Debt Facility. In addition, drydocking typically requires
us to reposition vessels from a discharge port to shipyard
facilities, which will reduce our owned available days and revenues
during that period.
Drydocking costs incurred are deferred and
amortized through depreciation and amortization on the condensed
consolidated statements of operations on a straight-line basis over
the period through the date the next drydocking is required to
become due. During the six months ended June 30, 2023, five of
our vessels completed drydock and we incurred $8.3 million for
drydocking costs. During the six months ended June 30, 2022,
seven of our vessels completed drydock and we incurred $16.1
million for drydocking costs.
Vessel improvements generally include systems
and equipment intended to enhance a vessel’s efficiency and revenue
earning capability. We intend to fund these costs through cash from
operations, cash on hand or amounts available under the Global
Ultraco Debt Facility.
The following table provides certain information about the
estimated costs for anticipated vessel drydockings and improvements
in the next four quarters, along with the anticipated off-hire
days:
|
|
Projected Costs (1) ($ in
millions) |
Quarters Ending |
|
Off-hire Days(2) |
|
Drydocks |
|
Vessel Improvements(3) |
September 30, 2023 |
|
201 |
|
$ |
3.2 |
|
$ |
1.2 |
December 31, 2023 |
|
241 |
|
$ |
3.9 |
|
$ |
0.8 |
March 31, 2024 |
|
218 |
|
$ |
6.9 |
|
$ |
— |
June 30, 2024 |
|
143 |
|
$ |
0.1 |
|
$ |
— |
(1) |
|
We intend to fund these costs with cash from operations, cash on
hand or with amounts available under the Global Ultraco Debt
Facility. |
(2) |
|
Actual duration of off-hire
days will vary based on the age and condition of the vessel, yard
schedules and other factors. Projected off-hire days includes an
allowance for unforeseen events. |
(3) |
|
Projected costs for vessel
improvements are primarily comprised of costs for ballast water
treatment systems ("BWTS"). |
SUMMARY CONSOLIDATED FINANCIAL AND OTHER
DATA
The following table summarizes the Company’s selected condensed
consolidated financial statements and other data for the periods
indicated below.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(in thousands, except share and per
share data) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Revenues, net |
|
$ |
101,406 |
|
|
$ |
198,695 |
|
|
$ |
206,604 |
|
|
$ |
383,093 |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
|
25,471 |
|
|
|
36,290 |
|
|
|
58,946 |
|
|
|
79,917 |
|
Vessel operating expenses |
|
|
30,998 |
|
|
|
27,207 |
|
|
|
62,255 |
|
|
|
55,122 |
|
Charter hire expenses |
|
|
11,726 |
|
|
|
21,285 |
|
|
|
24,146 |
|
|
|
43,996 |
|
Depreciation and
amortization |
|
|
14,831 |
|
|
|
15,254 |
|
|
|
29,563 |
|
|
|
29,834 |
|
General and administrative
expenses |
|
|
11,269 |
|
|
|
9,891 |
|
|
|
22,219 |
|
|
|
19,945 |
|
Impairment of operating lease
right-of-use assets |
|
|
722 |
|
|
|
— |
|
|
|
722 |
|
|
|
— |
|
Other operating expense |
|
|
93 |
|
|
|
41 |
|
|
|
183 |
|
|
|
174 |
|
Gain on sale of vessels |
|
|
(11,558 |
) |
|
|
— |
|
|
|
(14,876 |
) |
|
|
— |
|
Total operating expenses, net |
|
|
83,552 |
|
|
|
109,968 |
|
|
|
183,158 |
|
|
|
228,988 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
17,854 |
|
|
|
88,727 |
|
|
|
23,446 |
|
|
|
154,105 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
4,434 |
|
|
|
4,338 |
|
|
|
8,291 |
|
|
|
8,785 |
|
Interest income |
|
|
(1,815 |
) |
|
|
(174 |
) |
|
|
(3,651 |
) |
|
|
(219 |
) |
Realized and unrealized gain
on derivative instruments, net |
|
|
(2,791 |
) |
|
|
(9,890 |
) |
|
|
(2,422 |
) |
|
|
(1,988 |
) |
Total other (income)/expense, net |
|
|
(172 |
) |
|
|
(5,726 |
) |
|
|
2,218 |
|
|
|
6,578 |
|
Net income |
|
$ |
18,026 |
|
|
$ |
94,453 |
|
|
$ |
21,228 |
|
|
$ |
147,527 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
12,734,230 |
|
|
|
12,988,200 |
|
|
|
12,892,793 |
|
|
|
12,981,202 |
|
Diluted |
|
|
16,058,606 |
|
|
|
16,376,517 |
|
|
|
16,223,841 |
|
|
|
16,373,458 |
|
|
|
|
|
|
|
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic net income |
|
$ |
1.42 |
|
|
$ |
7.27 |
|
|
$ |
1.65 |
|
|
$ |
11.36 |
|
Diluted net income |
|
$ |
1.21 |
|
|
$ |
5.77 |
|
|
$ |
1.48 |
|
|
$ |
9.01 |
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)(in thousands, except share data and
par values) |
|
|
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS: |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
115,703 |
|
|
$ |
187,155 |
|
Accounts receivable, net of a
reserve of $2,965 and $3,169, respectively |
|
|
28,396 |
|
|
|
32,311 |
|
Prepaid expenses |
|
|
6,533 |
|
|
|
4,531 |
|
Inventories |
|
|
21,695 |
|
|
|
28,081 |
|
Collateral on derivatives |
|
|
676 |
|
|
|
909 |
|
Fair value of derivative
assets – current |
|
|
9,814 |
|
|
|
8,479 |
|
Vessel held for sale |
|
|
11,052 |
|
|
|
— |
|
Other current assets |
|
|
440 |
|
|
|
558 |
|
Total current assets |
|
|
194,309 |
|
|
|
262,024 |
|
Noncurrent
assets: |
|
|
|
|
Vessels and vessel
improvements, at cost, net of accumulated depreciation of $277,924
and $261,725, respectively |
|
|
925,632 |
|
|
|
891,877 |
|
Advances for vessel
purchases |
|
|
— |
|
|
|
3,638 |
|
Advances for BWTS and other
assets |
|
|
1,622 |
|
|
|
2,722 |
|
Deferred drydock costs,
net |
|
|
40,469 |
|
|
|
42,849 |
|
Other fixed assets, net of
accumulated depreciation of $1,706 and $1,623, respectively |
|
|
291 |
|
|
|
310 |
|
Operating lease right-of-use
assets |
|
|
15,472 |
|
|
|
23,006 |
|
Restricted cash –
noncurrent |
|
|
2,575 |
|
|
|
2,599 |
|
Fair value of derivative
assets – noncurrent |
|
|
6,331 |
|
|
|
8,184 |
|
Total noncurrent assets |
|
|
992,392 |
|
|
|
975,185 |
|
Total
assets |
|
$ |
1,186,701 |
|
|
$ |
1,237,209 |
|
LIABILITIES &
STOCKHOLDERS' EQUITY: |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
22,520 |
|
|
$ |
20,129 |
|
Accrued interest |
|
|
3,567 |
|
|
|
3,061 |
|
Other accrued liabilities |
|
|
20,920 |
|
|
|
24,097 |
|
Fair value of derivative
liabilities – current |
|
|
8 |
|
|
|
163 |
|
Current portion of operating
lease liabilities |
|
|
14,274 |
|
|
|
22,045 |
|
Unearned charter hire
revenue |
|
|
6,002 |
|
|
|
9,670 |
|
Current portion of long-term
debt |
|
|
49,800 |
|
|
|
49,800 |
|
Total current liabilities |
|
|
117,091 |
|
|
|
128,965 |
|
Noncurrent
liabilities: |
|
|
|
|
Long-term debt – Global
Ultraco Debt Facility, net of debt discount and debt issuance
costs |
|
|
353,618 |
|
|
|
181,183 |
|
Convertible Bond Debt, net of
debt discount and debt issuance costs |
|
|
103,693 |
|
|
|
103,499 |
|
Noncurrent portion of
operating lease liabilities |
|
|
2,847 |
|
|
|
3,173 |
|
Other noncurrent accrued
liabilities |
|
|
695 |
|
|
|
1,208 |
|
Total noncurrent liabilities |
|
|
460,853 |
|
|
|
289,063 |
|
Total
liabilities |
|
|
577,944 |
|
|
|
418,028 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
Preferred stock, $0.01 par
value, 25,000,000 shares authorized, none issued as of
June 30, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value,
700,000,000 shares authorized, 9,310,443 and 13,003,702 shares
issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively |
|
|
93 |
|
|
|
130 |
|
Additional paid-in
capital |
|
|
745,636 |
|
|
|
966,058 |
|
Accumulated deficit |
|
|
(151,697 |
) |
|
|
(163,556 |
) |
Accumulated other
comprehensive income |
|
|
14,725 |
|
|
|
16,549 |
|
Total stockholders'
equity |
|
|
608,757 |
|
|
|
819,181 |
|
Total liabilities and
stockholders' equity |
|
$ |
1,186,701 |
|
|
$ |
1,237,209 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(in thousands) |
|
|
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
Cash flows from
operating activities: |
|
|
|
|
Net income |
|
$ |
21,228 |
|
|
$ |
147,527 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation |
|
|
22,633 |
|
|
|
23,573 |
|
Noncash operating lease
expense |
|
|
13,322 |
|
|
|
12,664 |
|
Amortization of deferred
drydocking costs |
|
|
6,930 |
|
|
|
6,261 |
|
Amortization of debt discount
and debt issuance costs |
|
|
1,146 |
|
|
|
1,092 |
|
Impairment of operating lease
right-of-use assets |
|
|
722 |
|
|
|
— |
|
Gain on sale of vessels |
|
|
(14,876 |
) |
|
|
— |
|
Unrealized gain on derivative
instruments, net |
|
|
(1,785 |
) |
|
|
(1,393 |
) |
Stock-based compensation
expense |
|
|
4,010 |
|
|
|
3,092 |
|
Drydocking expenditures |
|
|
(8,259 |
) |
|
|
(16,098 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Accounts payable |
|
|
2,172 |
|
|
|
1,793 |
|
Accounts receivable |
|
|
3,741 |
|
|
|
(15,492 |
) |
Accrued interest |
|
|
506 |
|
|
|
51 |
|
Inventories |
|
|
6,385 |
|
|
|
(7,542 |
) |
Operating lease liabilities
current and noncurrent |
|
|
(14,607 |
) |
|
|
(12,664 |
) |
Collateral on derivatives |
|
|
233 |
|
|
|
(1,689 |
) |
Fair value of derivatives,
other current and noncurrent assets |
|
|
434 |
|
|
|
(453 |
) |
Other accrued liabilities |
|
|
(6,105 |
) |
|
|
(868 |
) |
Prepaid expenses |
|
|
(2,002 |
) |
|
|
(1,162 |
) |
Unearned charter hire
revenue |
|
|
(3,670 |
) |
|
|
1,522 |
|
Net cash provided by operating activities |
|
|
32,158 |
|
|
|
140,214 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Purchase of vessels and vessel
improvements |
|
|
(81,708 |
) |
|
|
(495 |
) |
Purchase of BWTS |
|
|
(1,391 |
) |
|
|
(4,807 |
) |
Proceeds from hull and
machinery insurance claims |
|
|
174 |
|
|
|
— |
|
Net proceeds from sale of
vessels |
|
|
40,698 |
|
|
|
— |
|
Purchase of other fixed
assets |
|
|
(63 |
) |
|
|
(241 |
) |
Net cash used in investing activities |
|
|
(42,290 |
) |
|
|
(5,543 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Proceeds from Revolving
Facility, net of debt issuance costs – Global Ultraco Debt
Facility |
|
|
123,361 |
|
|
|
— |
|
Proceeds from Term Facility,
net of debt issuance costs – Global Ultraco Debt Facility |
|
|
73,125 |
|
|
|
— |
|
Repayment of Term Facility –
Global Ultraco Debt Facility |
|
|
(24,900 |
) |
|
|
(24,900 |
) |
Repurchase of Common Stock and
associated fees – related party |
|
|
(221,196 |
) |
|
|
— |
|
Dividends paid |
|
|
(9,979 |
) |
|
|
(52,816 |
) |
Debt issuance costs paid to
lenders – Original Global Ultraco Debt Facility |
|
|
— |
|
|
|
(18 |
) |
Cash paid for taxes related to
net share settlement of equity awards |
|
|
(1,652 |
) |
|
|
(1,915 |
) |
Other financing costs
paid |
|
|
(103 |
) |
|
|
— |
|
Cash received from exercise of
stock options |
|
|
— |
|
|
|
85 |
|
Proceeds from equity
offerings, net of issuance costs |
|
|
— |
|
|
|
201 |
|
Net cash used in financing activities |
|
|
(61,344 |
) |
|
|
(79,363 |
) |
Net (decrease)/increase in
cash, cash equivalents and restricted cash |
|
|
(71,476 |
) |
|
|
55,308 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
189,754 |
|
|
|
86,222 |
|
Cash, cash equivalents and restricted cash at end of
period |
|
$ |
118,278 |
|
|
$ |
141,530 |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
11,184 |
|
|
$ |
7,123 |
|
|
|
|
|
|
|
|
|
|
Supplemental Information - Non-GAAP
Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the Securities and Exchange Commission (“SEC”). We believe these
measures provide important supplemental information to investors to
use in evaluating ongoing operating results. We use these measures,
together with accounting principles generally accepted in the
United States (“GAAP” or “U.S. GAAP”) measures, for internal
managerial purposes and as a means to evaluate period-to-period
comparisons. However, we do not, and you should not, rely on
non-GAAP financial measures alone as measures of our performance.
We believe that non-GAAP financial measures reflect an additional
way of viewing aspects of our operations, that when taken together
with GAAP results and the reconciliations to corresponding GAAP
financial measures that we also provide and provide a more complete
understanding of factors and trends affecting our business. We
strongly encourage you to review all of our financial statements
and publicly-filed reports in their entirety and to not solely rely
on any single non-GAAP financial measure.
Because non-GAAP financial measures are not standardized, it may
not be possible to compare these financial measures with other
companies’ non-GAAP financial measures, even if they have similar
names.
Non-GAAP Financial Measures
Adjusted net income and Basic and Diluted
adjusted net income per share
Adjusted net income and Basic and Diluted
adjusted net income per share represent Net income and Basic and
Diluted net income per share, respectively, as adjusted to exclude
unrealized gains and losses on FFAs and bunker swaps, gains and
losses on debt extinguishment, and impairment of operating lease
right-of-use assets. The Company utilizes derivative instruments
such as FFAs and bunker swaps to partially hedge against its
underlying long physical position in ships (as represented by owned
and third-party chartered-in vessels). As the Company does not
apply hedge accounting to these derivative instruments, unrealized
mark-to-market gains and losses on forward hedge positions impact
current quarter results, causing timing mismatches in the Condensed
Consolidated Statements of Operations. Additionally, we believe
that gains and losses on debt extinguishment and impairment of
operating lease right-of-use assets are not representative of our
normal business operations. We believe that Adjusted net income and
Adjusted net income per share are more useful to analysts and
investors in comparing the results of operations and operational
trends between periods and relative to other peer companies in our
industry. Our Adjusted net income should not be considered an
alternative to net income/(loss), operating income/(loss), cash
flows provided by/(used in) operating activities or any other
measure of financial performance or liquidity presented in
accordance with U.S. GAAP. As noted above, our Adjusted net income
and Adjusted net income per share may not be comparable to
similarly titled measures of another company because all companies
may not calculate Adjusted net income or Adjusted net income per
share in the same manner.
The following table presents the reconciliation
of our Net income to Adjusted net income:
|
Reconciliation of GAAP Net income to Adjusted net
income(in thousands, except share and per share
data) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Net income |
|
$ |
18,026 |
|
|
$ |
94,453 |
|
|
$ |
21,228 |
|
|
$ |
147,527 |
|
Adjustments to reconcile net
income to adjusted net income: |
|
|
|
|
|
|
|
|
Unrealized gain on FFAs and bunker swaps, net |
|
|
(2,021 |
) |
|
|
(12,842 |
) |
|
|
(1,785 |
) |
|
|
(1,393 |
) |
Impairment of operating lease right-of-use assets |
|
|
722 |
|
|
|
— |
|
|
|
722 |
|
|
|
— |
|
Adjusted net income |
|
$ |
16,727 |
|
|
$ |
81,611 |
|
|
$ |
20,165 |
|
|
$ |
146,134 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
12,734,230 |
|
|
|
12,988,200 |
|
|
|
12,892,793 |
|
|
|
12,981,202 |
|
Diluted (1) |
|
|
16,058,606 |
|
|
|
16,376,517 |
|
|
|
16,223,841 |
|
|
|
16,373,458 |
|
|
|
|
|
|
|
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic adjusted net income |
|
$ |
1.31 |
|
|
$ |
6.28 |
|
|
$ |
1.56 |
|
|
$ |
11.26 |
|
Diluted adjusted net income |
|
$ |
1.13 |
|
|
$ |
4.98 |
|
|
$ |
1.42 |
|
|
$ |
8.93 |
|
(1) |
|
Diluted weighted average shares outstanding for the three and six
months ended June 30, 2023 and 2022 includes dilutive
potential common shares related to the Convertible Bond Debt based
on the if-converted method and potential common shares related to
stock awards and options based on the treasury stock method, unless
to do so would have been anti-dilutive to Diluted adjusted net
income per share. |
|
|
|
EBITDA and Adjusted EBITDA
We define EBITDA as Net income under GAAP
adjusted for interest, income taxes and depreciation and
amortization.
Adjusted EBITDA is a non-GAAP financial measure
that is used as a supplemental financial measure by our management
and by external users of our financial statements, such as
investors, commercial banks and others, to assess our operating
performance as compared to that of other peer companies in our
industry, without regard to financing methods, capital structure or
historical costs basis. Our Adjusted EBITDA should not be
considered an alternative to net income/(loss), operating
income/(loss), cash flows provided by/(used in) operating
activities or any other measure of financial performance or
liquidity presented in accordance with U.S. GAAP. Our Adjusted
EBITDA may not be comparable to similarly titled measures of
another company because all companies may not calculate Adjusted
EBITDA in the same manner. Adjusted EBITDA represents EBITDA
adjusted to exclude certain non-cash, one-time and other items that
the Company believes are not indicative of the ongoing performance
of its core operations such as vessel impairment, gains and losses
on sale of vessels, impairment of operating lease right-of-use
assets, unrealized gains and losses on FFAs and bunker swaps, gains
and losses on debt extinguishment and stock-based compensation
expense.
The following table presents a reconciliation of
our Net income to EBITDA and Adjusted EBITDA:
|
Reconciliation of GAAP Net income
to EBITDA and Adjusted EBITDA(in
thousands) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Net income |
|
$ |
18,026 |
|
|
$ |
94,453 |
|
|
$ |
21,228 |
|
|
$ |
147,527 |
|
Adjustments to reconcile net
income to EBITDA: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
4,434 |
|
|
|
4,338 |
|
|
|
8,291 |
|
|
|
8,785 |
|
Interest income |
|
|
(1,815 |
) |
|
|
(174 |
) |
|
|
(3,651 |
) |
|
|
(219 |
) |
Income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
EBIT |
|
|
20,645 |
|
|
|
98,617 |
|
|
|
25,868 |
|
|
|
156,093 |
|
Depreciation and
amortization |
|
|
14,831 |
|
|
|
15,254 |
|
|
|
29,563 |
|
|
|
29,834 |
|
EBITDA |
|
|
35,476 |
|
|
|
113,871 |
|
|
|
55,431 |
|
|
|
185,927 |
|
Non-cash, one-time and other
adjustments to EBITDA(1) |
|
|
(10,702 |
) |
|
|
(11,237 |
) |
|
|
(11,929 |
) |
|
|
1,699 |
|
Adjusted EBITDA |
|
$ |
24,774 |
|
|
$ |
102,634 |
|
|
$ |
43,502 |
|
|
$ |
187,626 |
|
(1) |
|
One-time and other adjustments to EBITDA for the three and six
months ended June 30, 2023 and 2022 includes a gain on sale of
vessels, net unrealized gains on FFAs and bunker swaps, impairment
of operating lease right-of-use assets and stock-based compensation
expense. |
|
|
|
TCE revenue and TCE
Time charter equivalent revenue (“TCE revenue”)
and time charter equivalent (“TCE”) are non-GAAP financial measures
that are commonly used in the shipping industry 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 defines TCE revenue as revenues, net less voyage expenses
and charter hire expenses, adjusted for realized gains and losses
on FFAs and bunker swaps and defines TCE as TCE revenue divided by
the number of owned available days. Owned available days is the
number of our ownership days less the aggregate number of days that
our vessels are off-hire due to vessel familiarization upon
acquisition, repairs, vessel upgrades or special surveys. The
shipping industry uses available days to measure the number of days
in a period during which vessels should be capable of generating
revenues. TCE provides additional meaningful information in
conjunction with Revenues, net, the most directly comparable GAAP
measure, because it assists Company management in making decisions
regarding the deployment and use of its vessels and in evaluating
their performance. Our TCE revenue and TCE should not be considered
alternatives to net income/(loss), operating income/(loss), cash
flows provided by/(used in) operating activities or any other
measure of financial performance or liquidity presented in
accordance with U.S. GAAP. Our TCE revenue and TCE may not be
comparable to similarly titled measures of another company because
all companies may not calculate TCE revenue and TCE in the same
manner.
The following table presents the reconciliation
of our Revenues, net to TCE:
|
Reconciliation of Revenues, net to TCE(in
thousands, except for Owned available days and TCE
data) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Revenues, net |
|
$ |
101,406 |
|
|
$ |
198,695 |
|
|
$ |
206,604 |
|
|
$ |
383,093 |
|
Less: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
|
(25,471 |
) |
|
|
(36,290 |
) |
|
|
(58,946 |
) |
|
|
(79,917 |
) |
Charter hire expenses |
|
|
(11,726 |
) |
|
|
(21,285 |
) |
|
|
(24,146 |
) |
|
|
(43,996 |
) |
Realized gain/(loss) on FFAs and bunker swaps, net |
|
|
770 |
|
|
|
(2,952 |
) |
|
|
637 |
|
|
|
596 |
|
TCE revenue |
|
$ |
64,979 |
|
|
$ |
138,168 |
|
|
$ |
124,149 |
|
|
$ |
259,776 |
|
|
|
|
|
|
|
|
|
|
Owned available days |
|
|
4,502 |
|
|
|
4,574 |
|
|
|
9,083 |
|
|
|
9,011 |
|
TCE |
|
$ |
14,434 |
|
|
$ |
30,207 |
|
|
$ |
13,669 |
|
|
$ |
28,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted vessel operating expenses and Adjusted
DVOE
Adjusted vessel operating expenses and Adjusted
DVOE are non-GAAP financial measures that are used as supplemental
financial measures by our management and by external users of our
financial statements to assess our operating performance as
compared to that of other peer companies in our industry. The
Company defines Adjusted vessel operating expenses as vessel
operating expenses presented in accordance with U.S. GAAP, adjusted
to exclude one-time, non-recurring expenses related to vessel
acquisitions, charges relating to a change in the crewing manager
on some of our vessels and discretionary spending associated with
hull and hold upgrades and defines Adjusted DVOE as Adjusted vessel
operating expenses divided by the number of ownership days.
Ownership days is the aggregate number of days in a period during
which each vessel in our fleet has been owned by us. Adjusted
vessel operating expenses and Adjusted DVOE provide additional
meaningful information in conjunction with Vessel operating
expenses, the most directly comparable GAAP measure. Our Adjusted
vessel operating expenses and Adjusted DVOE should not be
considered alternatives to net income/(loss), operating
income/(loss), cash flows provided by/(used in) operating
activities or any other measure of financial performance or
liquidity presented in accordance with U.S. GAAP. Our Adjusted
vessel operating expenses and Adjusted DVOE may not be comparable
to similarly titled measures of another company because all
companies may not calculate Adjusted vessel operating expenses and
Adjusted DVOE in the same manner.
The following table presents the reconciliation
of our Vessel operating expenses to Adjusted vessel operating
expenses and Adjusted DVOE:
|
Reconciliation of GAAP Vessel operating expenses to
Adjusted vessel operating expenses and Adjusted
DVOE(in thousands, except for Ownership days and
Adjusted DVOE data) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Vessel operating expenses |
|
$ |
30,998 |
|
|
$ |
27,207 |
|
|
$ |
62,255 |
|
|
$ |
55,122 |
|
Less: |
|
|
|
|
|
|
|
|
Adjustments to vessel operating expenses(1): |
|
|
(2,734 |
) |
|
|
(277 |
) |
|
|
(3,201 |
) |
|
|
(425 |
) |
Adjusted vessel operating
expenses |
|
$ |
28,264 |
|
|
$ |
26,930 |
|
|
$ |
59,054 |
|
|
$ |
54,697 |
|
|
|
|
|
|
|
|
|
|
Ownership days |
|
|
4,805 |
|
|
|
4,823 |
|
|
|
9,616 |
|
|
|
9,593 |
|
Adjusted DVOE |
|
$ |
5,882 |
|
|
$ |
5,584 |
|
|
$ |
6,141 |
|
|
$ |
5,702 |
|
(1) |
|
Adjustments to vessel operating expenses includes one-time,
non-recurring expenses related to vessel acquisitions, charges
relating to a change in the crewing manager on some of our vessels
and discretionary spending associated with hull and hold
upgrades. |
|
|
|
Glossary of Terms
Chartered-in days: We define chartered-in days
as the aggregate number of days in a period during which we
charter-in vessels under operating leases. The Company charters-in
vessels on a long-term and short-term basis.
Owned available days: We define owned available
days as the number of ownership days less the aggregate number of
days that our owned vessels are off-hire due to vessel
familiarization upon acquisition, repairs, vessel upgrades or
special surveys and other reasons which prevent the vessel from
performing under a charter party in a period. The shipping industry
uses owned available days to measure the number of days in a period
during which owned vessels should be capable of generating
revenues.
Ownership days: We define ownership days as the
aggregate number of days in a period during which each vessel in
our fleet has been owned by us. Ownership days are an indicator of
the size of our fleet over a period and affect both the amount of
revenues and the amount of expenses that we record during a
period.
Definitions of Capitalized
Terms
Convertible Bond Debt: Convertible Bond Debt
refers to 5.0% Convertible Senior Notes due 2024 issued by the
Company on July 29, 2019 that will mature on August 1, 2024.
Global Ultraco Debt Facility: Global Ultraco
Debt Facility refers to the senior secured credit facility entered
into by Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned
subsidiary of the Company, along with certain of its vessel-owning
subsidiaries as guarantors, with the lenders party thereto (the
“Lenders”), Credit Agricole Corporate and Investment Bank (“Credit
Agricole”) as security trustee, structurer, sustainability
coordinator and facility agent. The Global Ultraco Debt Facility
provides for an aggregate principal amount of $485.3 million, which
consists of (i) a term loan facility in an aggregate principal
amount of $300.3 million (the “Term Facility”) and (ii) a revolving
credit facility in an aggregate principal amount of $185.0 million
(the “Revolving Facility”). The Global Ultraco Debt Facility is
secured by 52 of the Company's vessels. As of June 30, 2023,
$60.0 million of the revolving credit facility remains undrawn.
Conference Call
Information
As previously announced, members of Eagle’s
senior management team will host a teleconference and webcast at
8:00 a.m. ET on Friday, August 4, 2023, to discuss the second
quarter results.
A live webcast of the call will be available on
the Investor Relations page of the Company's website at
ir.eagleships.com. To access the call by phone, please register at
https://register.vevent.com/register/BIbc2c6bc5ee744332af06f25ac2417e22
and you will be provided with dial-in details. A replay of the
webcast will be available on the Investor Relations page of the
Company's website.
About Eagle Bulk Shipping
Inc.
The Company is a U.S.-based, fully integrated
shipowner-operator, providing global transportation solutions to a
diverse group of customers including miners, producers, traders and
end users. Headquartered in Stamford, Connecticut, with offices in
Singapore and Copenhagen, Eagle focuses exclusively on the
versatile midsize drybulk vessel segment and owns one of the
largest fleets of Supramax/Ultramax vessels in the world. The
Company performs all management services in-house (strategic,
commercial, operational, technical, and administrative) and employs
an active management approach to fleet trading with the objective
of optimizing revenue performance and maximizing earnings on a
risk-managed basis. For further information, please visit our
website: www.eagleships.com.
Website Information
We intend to use our website,
www.eagleships.com, as a means of disclosing material non-public
information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included in our website’s
Investor Relations section. Accordingly, investors should monitor
the Investor Relations portion of our website, in addition to
following our press releases, filings with the SEC, public
conference calls, and webcasts. To subscribe to our e-mail alert
service, please click the “Investor Alerts” link in the Investor
Relations section of our website and submit your email address. The
information contained in, or that may be accessed through, our
website is not incorporated by reference into or a part of this
document or any other report or document we file with or furnish to
the SEC, and any references to our website are intended to be
inactive textual references only.
Disclaimer: Forward-Looking
Statements
Matters discussed in this release may constitute
forward-looking statements that may be deemed to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995, and are intended to be
covered by the safe harbor provided for under these sections. These
statements may include words such as “believe,” “estimate,”
“project,” “intend,” “expect,” “plan,” “anticipate,” and similar
expressions in connection with any discussion of the timing or
nature of future operating or financial performance or other
events. Forward-looking statements in this release reflect
management’s current expectations and observations with respect to
future events and financial performance. Where we express an
expectation or belief as to future events or results, including
future plans with respect to financial performance, the payment of
dividends and/or repurchase of shares, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
However, our forward-looking statements are subject to risks,
uncertainties, and other factors, which could cause actual results
to differ materially from future results expressed, projected, or
implied by those forward-looking statements.
Where we express an expectation or belief as to
future events or results, such expectation or belief is expressed
in good faith and believed to have a reasonable basis. However, our
forward-looking statements are subject to risks, uncertainties, and
other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by
those forward-looking statements. The principal factors that affect
our financial position, results of operations and cash flows
include market freight rates, which fluctuate based on various
economic and market conditions, periods of charter hire, vessel
operating expenses and voyage costs, which are incurred primarily
in U.S. dollars, depreciation expenses, which are a function of the
purchase price of our vessels and our vessels’ estimated useful
lives and scrap value, general and administrative expenses, and
financing costs related to our indebtedness. The accuracy of the
Company’s assumptions, expectations, beliefs and projections
depends on events or conditions that change over time and are thus
susceptible to change based on actual experience, new developments
and known and unknown risks. The Company gives no assurance that
the forward-looking statements will prove to be correct, does not
undertake any duty to update them and disclaims any intent or
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws. Our
actual results may differ materially from those anticipated in
these forward-looking statements as a result of certain factors
which could include the following: (i) volatility of freight rates
driven by changes in demand for seaborne transportation of drybulk
commodities and in supply of drybulk shipping capacity; (ii)
changes in drybulk carrier capacity driven by levels of newbuilding
orders, scrapping rates or fleet utilization; (iii) changes in
rules and regulations applicable to the drybulk industry,
including, without limitation, regulations of the International
Maritime Organization and the European Union (the “EU”),
requirements of the Environmental Protection Agency and other
governmental and quasi-governmental agencies; (iv) changes in U.S.,
United Kingdom, United Nations and EU economic sanctions and trade
embargo laws and regulations as well as equivalent economic
sanctions laws of other relevant jurisdictions; (v) actions taken
by regulatory authorities including, without limitation, the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”);
(vi) changes in the typical seasonal variations in drybulk freight
rates; (vii) changes in national and international economic and
political conditions including, without limitation, the current
conflict between Russia and Ukraine, the current economic and
political environment in China and the environment in historically
high-risk geographic areas such as the South China Sea, the Indian
Ocean, the Gulf of Guinea and the Gulf of Aden; (viii) changes in
the condition of the Company’s vessels or applicable maintenance or
regulatory standards (which may affect, among other things, our
anticipated drydocking costs); (ix) the duration and impact of the
novel coronavirus (“COVID-19”) pandemic and measures implemented by
governments of various countries in response to the COVID-19
pandemic; (x) volatility of the cost of fuel; (xi) volatility of
costs of labor and materials needed to operate our business due to
inflation; (xii) any legal proceedings which we may be involved
from time to time; and (xiii) other factors listed from time to
time in our filings with the Securities and Exchange Commission
(the “SEC”).
We have based these statements on assumptions
and analyses formed by applying our experience and perception of
historical trends, current conditions, expected future developments
and other factors we believe are appropriate in the circumstances.
The Company’s future results may be impacted by adverse economic
conditions, such as inflation, deflation, or lack of liquidity in
the capital markets, that may negatively affect it or parties with
whom it does business. Should one or more of the foregoing risks or
uncertainties materialize in a way that negatively impacts the
Company, or should the Company’s underlying assumptions prove
incorrect, the Company’s actual results may vary materially from
those anticipated in its forward-looking statements, and its
business, financial condition and results of operations could be
materially and adversely affected. Risks and uncertainties are
further described in our Annual Report on Form 10-K for the year
ended December 31, 2022, as filed with the SEC on
March 10, 2023.
CONTACT
Company Contact:Constantine TsoutsoplidesChief
Financial OfficerEagle Bulk Shipping Inc.Tel. +1 203-276-8100Email:
investor@eagleships.com
Source: Eagle Bulk Shipping Inc.
Grafico Azioni Eagle Bulk Shipping (NYSE:EGLE)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Eagle Bulk Shipping (NYSE:EGLE)
Storico
Da Set 2023 a Set 2024