UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2015
Commission File Number 001-33922
DRYSHIPS INC.
109 Kifissias Avenue and Sina Street
151 24, Marousi
Athens, Greece
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ].
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ].
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 to this Report on Form 6-K is a press release of DryShips Inc. (the “Company”) dated December 7, 2015: DryShips Inc. Reports Financial and Operating Results for the Third Quarter 2015.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| DRYSHIPS INC.
|
| (Registrant)
|
|
|
Dated: December 8, 2015
| By: /s/George Economou
|
|
| George Economou
Chief Executive Officer
|
Exhibit 99.1
![[f120815drys6k001.jpg]](http://www.sec.gov/Archives/edgar/data/1308858/000131786115000082/f120815drys6k001.jpg)
DRYSHIPS INC. REPORTS FINANCIAL AND OPERATING
RESULTS FOR THE THIRD QUARTER 2015
December 7, 2015, Athens, Greece. DryShips Inc. (NASDAQ:DRYS), or DryShips or the Company, an international owner of drybulk carriers and offshore support vessels, today announced its unaudited financial and operating results for the third quarter ended September 30, 2015.
Third Quarter 2015 Financial Highlights
·
For the third quarter of 2015, the Company reported a net loss of $820.0 million, or $1.23 basic and diluted loss per share.
Included in the third quarter 2015 results are impairment charges and loss on sales on the entire drybulk fleet, of $797.5 million, or $1.20 per share.
Excluding these impairment charges and losses, the Company’s net results would have amounted to a net loss of $22.5 million, or $0.03 per share. (1)
·
The Company reported Adjusted EBITDA of $30.1 million for the third quarter of 2015. (1)
Recent Highlights
·
As of December 7, 2015, the Company has delivered all of its tanker vessels and 13 drybulk vessels to their new owners under the previously disclosed sales agreements for 10 tanker vessels and 17 drybulk vessels.
·
As of November 24, 2015, the Company has acquired a 100% equity stake in Nautilus OffShore Services Inc. (“Nautilus”). Nautilus owns six offshore supply vessels on time charter to Petrobras.
·
On November 2, 2015, the Company concluded two Memoranda of Agreement to sell its two Supramax vessels, the Byron and the Galveston, for an aggregate sales price of $12.3 million. The vessels were delivered to their new owners during November 2015.
·
On October 21, 2015, as amended on November 11, 2015, the Company entered into a secured revolving credit facility of up to $60 million with an entity controlled by Mr. George Economou. The loan is secured by the shares that the Company holds in Ocean Rig UDW Inc. (“Ocean Rig”) and in Nautilus, and by a first priority mortgage over one Panamax drybulk carrier. The loan has a tenor of three years and both the lenders and the borrowers have certain conversion rights.
·
On October 13, 2015, the Company received an additional 180-day grace period to regain compliance with the Nasdaq's minimum bid price requirement, which will end on April 11, 2016. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by effecting a reverse stock split, if necessary.
(1)The net result includes approximately 40.44% of Ocean Rig’s results, which are owned by DryShips Inc. common shareholders.
(2)Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.
Fleet List
The table below describes our fleet profile as of December 1, 2015:
| | | | | | |
| Year
| | | Gross rate
| Redelivery
| |
| Built
| DWT
| Type
| Per day
| Earliest
| Latest
|
Drybulk fleet
| | | | | | |
| | | | | | |
Capesize:
| | | | | | |
Rangiroa (1)
| 2013
| 206,026
| Capesize
| $12,500
| Aug-19
| Feb-20
|
Negonego (1)
| 2013
| 206,097
| Capesize
| $12,500
| Aug-19
| Feb-20
|
Fakarava (1)
| 2012
| 206,152
| Capesize
| $12,500
| Aug-19
| Feb-20
|
Alameda (1)
| 2001
| 170,662
| Capesize
| $12,500
| Aug-19
| Feb-20
|
| | | | | | |
Panamax:
| | | | | | |
Raraka
| 2012
| 76,037
| Panamax
| Spot
| N/A
| N/A
|
Amalfi
| 2009
| 75,206
| Panamax
| Spot
| N/A
| N/A
|
Rapallo
| 2009
| 75,123
| Panamax
| T/C Index linked
| Jul-16
| Sep-16
|
Catalina
| 2005
| 74,432
| Panamax
| Spot
| N/A
| N/A
|
Majorca
| 2005
| 74,477
| Panamax
| Spot
| N/A
| N/A
|
Ligari
| 2004
| 75,583
| Panamax
| Spot
| N/A
| N/A
|
Sorrento
| 2004
| 76,633
| Panamax
| Spot
| N/A
| N/A
|
Mendocino
| 2002
| 76,623
| Panamax
| T/C Index linked
| Sep-16
| Nov-16
|
Bargara
| 2002
| 74,832
| Panamax
| T/C Index linked
| Sep-16
| Nov-16
|
Oregon
| 2002
| 74,204
| Panamax
| Spot
| N/A
| N/A
|
Ecola
| 2001
| 73,931
| Panamax
| Spot
| N/A
| N/A
|
Samatan
| 2001
| 74,823
| Panamax
| Spot
| N/A
| N/A
|
Sonoma
| 2001
| 74,786
| Panamax
| Spot
| N/A
| N/A
|
Capitola
| 2001
| 74,816
| Panamax
| Spot
| N/A
| N/A
|
Levanto
| 2001
| 73,925
| Panamax
| T/C Index linked
| Aug-16
| Oct-16
|
Maganari
| 2001
| 75,941
| Panamax
| Spot
| N/A
| N/A
|
Coronado
| 2000
| 75,706
| Panamax
| Spot
| N/A
| N/A
|
Marbella
| 2000
| 72,561
| Panamax
| Spot
| N/A
| N/A
|
Redondo
| 2000
| 74,716
| Panamax
| Spot
| N/A
| N/A
|
Ocean Crystal
| 1999
| 73,688
| Panamax
| Spot
| N/A
| N/A
|
| | | | | | |
Offshore Supply fleet
| | | | | | |
| | | | | | |
Platform Supply Vessels:
| | | | | | |
Vega Crusader
| 2012
| 1,457
| PSV
| T/C
| Jan.-17
| Jan.-21
|
Vega Corona
| 2012
| 1,430
| PSV
| T/C
| Dec.-16
| Dec.-20
|
Oil Spill Recovery Vessels:
| | | | | | |
Vega Inruda
| 2013
| 1,393
| OSRV
| T/C
| Aug.-17
| Aug.-21
|
Vega Jaanca
| 2012
| 1,393
| OSRV
| T/C
| Jul.-17
| Jul.-21
|
Vega Emtoli
| 2012
| 1,363
| OSRV
| T/C
| May.-17
| May.-21
|
Vega Juniz
| 2012
| 1,317
| OSRV
| T/C
| Apr.-17
| Apr.-21
|
(1) Sold, expect to be delivered to new owners during Q4 2015/Q1 2016.
Drybulk Carrier and Tanker Segment Summary Operating Data(unaudited)
(Dollars in thousands, except average daily results)
| | | | | | | |
Drybulk
| Three Months Ended September 30,
| | Nine Months Ended September 30,
|
| 2014
| | 2015
| | 2014
| | 2015
|
Average number of vessels(1)
| 39.0
| | 38.8
| | 38.6
| | 38.9
|
Total voyage days for vessels(2)
| 3,543
| | 3,357
| | 10,334
| | 10,221
|
Total calendar days for vessels(3)
| 3,588
| | 3,567
| | 10,534
| | 10,626
|
Fleet utilization(4)
| 98.7%
| | 94.1%
| | 98.1%
| | 96.2%
|
Time charter equivalent(5)
| $10,875
| | $8,938
| | $12,141
| | $10,104
|
Vessel operating expenses (daily)(6)
| $6,013
| | $7,368
| | $6,311
| | $6,758
|
| | | | | | | |
Tanker
|
Three Months Ended September 30,
| | Nine Months Ended September 30,
|
| 2014
| | 2015
| | 2014
| | 2015
|
Average number of vessels(1)
| 10.0
| | 4.7
| | 10.0
| | 8.2
|
Total voyage days for vessels(2)
| 920
| | 334
| | 2,730
| | 2,140
|
Total calendar days for vessels(3)
| 920
| | 429
| | 2,730
| | 2,239
|
Fleet utilization(4)
| 100.0%
| | 77.9%
| | 100.0%
| | 95.6%
|
Time charter equivalent(5)
| $20,901
| | $25,341
| | $20,430
| | $37,058
|
Vessel operating expenses (daily)(6)
| $6,900
| | $16,660
| | $7,109
| | $8,650
|
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our possession for the relevant period net of dry-docking days.
(3) Calendar days are the total number of days the vessels were in our possession for the relevant period including dry-docking days.
(4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from our vessels, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite 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. Please see below for a reconciliation of TCE rates to voyage revenues.
(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
(7) Does not include accrual for the provision of the purchase options and write off in overdue receivables under certain time charter agreements.
(In thousands of U.S. dollars, except for TCE rate, which is expressed in Dollars, and voyage days)
| | | | | | | | |
Drybulk
| | Three Months Ended September 30,
| | Nine Months Ended September 30,
|
| | 2014
| | 2015
| | 2014
| | 2015
|
Voyage revenues(7)
| $
| 48,570
| $
| 35,329
| $
| 151,593
| $
| 123,168
|
Voyage expenses
| | (10,040)
| | (5,323)
| | (26,131)
| | (19,890)
|
Time charter equivalent revenues
| $
| 38,530
| $
| 30,006
| $
| 125,462
| $
| 103,278
|
Total voyage days for fleet
| | 3,543
| | 3,357
| | 10,334
| | 10,221
|
Time charter equivalent TCE
| $
| 10,875
| $
| 8,938
| $
| 12,141
| $
| 10,104
|
| | | | | | | | |
Tanker
| | Three Months Ended September 30,
| | Nine Months Ended September 30,
|
| | 2014
| | 2015
| | 2014
| | 2015
|
Voyage revenues
| $
| 37,870
| $
| 15,437
| $
| 117,809
| $
| 120,316
|
Voyage expenses
| | (18,641)
| | (6,973)
| | (62,036)
| | (41,011)
|
Time charter equivalent revenues
| $
| 19,229
| $
| 8,464
| $
| 55,773
| $
| 79,305
|
Total voyage days for fleet
| | 920
| | 334
| | 2,730
| | 2,140
|
Time charter equivalent TCE
| $
| 20,901
| $
| 25,341
| $
| 20,430
| $
| 37,058
|
DryShips Inc.
Financial Statements
Unaudited Interim Condensed Consolidated Statements of Operations
| | | | | | | | |
(Expressed in Thousands of U.S. Dollars
except for share and per share data)
| |
Three Months Ended September 30,
| | Nine Months Ended September 30,
|
| | 2014
| | 2015
| | 2014
| | 2015
|
| | | | | | | | |
REVENUES:
| | | | | | | | |
Voyage revenues
| $
| 86,440
| $
| 50,766
| $
| 269,402
| $
| 220,254
|
Revenues from drilling contracts
| | 515,514
| | -
| | 1,317,711
| | 725,805
|
| | 601,954
| | 50,766
| | 1,587,113
| | 946,059
|
| | | | | | | | |
EXPENSES:
| | | | | | | | |
Voyage expenses
| | 28,681
| | 12,296
| | 88,167
| | 60,901
|
Vessel operating expenses
| | 27,921
| | 33,430
| | 85,891
| | 91,180
|
Drilling rigs and drillships operating expenses
| | 198,413
| | -
| | 533,017
| | 259,623
|
Depreciation and amortization
| | 113,603
| | 17,444
| | 333,538
| | 226,980
|
Vessels impairment, loss on sales and other
| | 1,307
| | 797,494
| | 1,307
| | 966,303
|
General and administrative expenses
| | 48,441
| | 15,291
| | 139,076
| | 90,098
|
Legal settlements and other, net
| | 571
| | -
| | 1,441
| | (2,803)
|
| | | | | | | | |
Operating income/(loss)
| | 183,017
| | (825,189)
| | 404,676
| | (746,223)
|
| | | | | | | | |
OTHER INCOME / (EXPENSES):
| | | | | | | | |
Interest and finance costs, net of interest income
| | (110,903)
| | (22,237)
| | (311,196)
| | (168,585)
|
Gain/(Loss) on interest rate swaps
| | 4,558
| | (871)
| | (7,845)
| | (12,319)
|
Other, net
| | 292
| | (223)
| | 2,830
| | (6,658)
|
Income taxes
| | (17,940)
| | -
| | (41,873)
| | (36,931)
|
Total other expenses, net
| | (123,993)
| | (23,331)
| | (358,084)
| | (224,493)
|
| | | | | | | | |
Net income/(loss)
| | 59,024
| | (848,520)
| | 46,592
| | (970,716)
|
| | | | | | | | |
Loss due to deconsolidation of Ocean Rig
| | -
| | -
| | -
| | (1,347,106)
|
Equity in earnings of affiliate
| | -
| | 28,558
| | -
| | 37,409
|
Net (income) attributable to Non controlling interests
| | (42,354)
| | -
| | (70,107)
| | (39,029)
|
| | | | | | | | |
Net income/(loss) attributable to DryShips Inc.
|
$
| 16,670
|
$
| (819,962)
| $
| (23,515)
| $
| (2,319,442)
|
| | | | | | | | |
Net income/(loss) attributable to DryShips Inc. common stockholders
| | 16,252
| | (820,266)
| | (24,048)
| | (2,320,012)
|
Earnings/(loss) per common share, basic and diluted
| $
| 0.04
| $
| (1.23)
| $
| (0.06)
| $
| (3.49)
|
Weighted average number of shares, basic and diluted
| | 413,249,829
| | 664,983,162
| | 411,999,014
| | 664,882,270
|
| | | | | | | | |
DryShips Inc.
Unaudited Condensed Consolidated Balance Sheets
| | | | | |
(Expressed in Thousands of U.S. Dollars)
| | December 31, 2014
|
|
September 30, 2015
|
| | | | |
ASSETS
| | | | |
| | | | | |
| Cash, cash equivalents and restricted cash (current and non-current)
| $
| 658,936
| $
| 111,592
|
| Assets held for sale
| | -
| | 611,544
|
| Other current assets
| | 568,341
| | 42,731
|
| Advances for vessels and drillships under construction and related costs
| | 623,984
| | -
|
| Vessels, net
| | 2,141,617
| | -
|
| Drilling rigs, drillships, machinery and equipment, net
| | 6,259,747
| | -
|
Investment in affiliate
| | -
| | 472,298
|
Other non-current assets
| | 118,978
| | 1,193
|
| Total assets
| | 10,371,603
| | 1,239,358
|
| | | | | |
| | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
| | | | |
| | | | | |
| | | | | |
| Total debt
| | 5,517,613
| | 327,543
|
| Liabilities held for sale
| | -
| | 245,217
|
| Total other liabilities
| | 563,602
| | 35,515
|
| Total stockholders’ equity
| | 4,290,388
| | 631,083
|
| Total liabilities and stockholders’ equity
| $
| 10,371,603
| $
| 1,239,358
|
| | | | | |
|
Adjusted EBITDA Reconciliation
Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel impairments and certain other non-cash items as described below, dry-dockings, class survey costs and gains or losses on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by our lenders as a measure of our compliance with certain covenants contained in our loan agreements and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.
The following table reconciles net income/(loss) to Adjusted EBITDA:
| | | | | | | | |
(Dollars in thousands)
| | Three Months Ended September 30, 2014
| | Three Months Ended September 30, 2015
| | Nine Months Ended September 30, 2014
| | Nine Months Ended September 30, 2015
|
| | | | | | | | |
Net income/(loss) attributable to Dryships Inc
| $
| 16,670
| $
| (819,962)
| $
| (23,515)
| $
| (2,319,442)
|
| | | | | | | | |
Add: Net interest expense
| | 110,903
| | 22,237
| | 311,196
| | 168,585
|
Add: Depreciation and amortization
| | 113,603
| | 17,444
| | 333,538
| | 226,980
|
Add: Dry-dockings and class survey costs
| | 1,984
| | 12,044
| | 7,306
| | 20,293
|
Add: Impairments losses on sales and other
| | 1,307
| | 797,494
| | 1,307
| | 989,533
|
Add: Loss due to deconsolidation of Ocean Rig
| | -
| | -
| | -
| | 1,347,106
|
Add: Income taxes
| | 17,940
| | -
| | 41,873
| | 36,931
|
Add: Gain /(loss) on interest rate swaps
| | (4,558)
| | 871
| | 7,845
| | 12,319
|
Add: Net income attributable to Non controlling interests
| | 42,354
| | -
| | 70,107
| | 39,029
|
Adjusted EBITDA
| $
| 300,203
| $
| 30,128
| $
| 749,657
| $
| 521,334
|
About DryShips Inc.
DryShips Inc. is an owner of drybulk carriers and offshore support vessels that operate worldwide. DryShips also owns approximately 40% of the outstanding shares of Ocean Rig UDW Inc. (NASDAQ:ORIG), an international drilling contractor. DryShips owns a fleet of 24 drybulk carriers, comprising 4 Capesize and 20 Panamax with a combined deadweight tonnage of approximately 2.3 million tons, and 6 offshore supply vessels, comprising 2 platform supply and 4 oil spill recovery vessels.
DryShips’ common stock is listed on the NASDAQ Capital Market where it trades under the symbol “DRYS.”
Visit the Company’s website at www.dryships.com
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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 such safe harbor legislation.
Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, 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 it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and dayrates and vessel and drilling dayrates and drybulk vessel, drilling rig and drillship values, failure of a seller to deliver one or more vessels or drilling units, drillships or drybulk vessels, failure of a buyer to accept delivery of a drilling rig, drillship, or vessel, inability to procure acquisition financing, default by one or more customers, changes in demand for drybulk commodities or oil, changes in demand that may affect attitudes of time charterers and customer drilling programs, scheduled and unscheduled drydockings and upgrades, changes in our operating expenses, including bunker prices, drydocking and insurance costs, complications associated with repairing and replacing equipment in remote locations, limitations on insurance coverage, such as war risk coverage, in certain areas, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by DryShips Inc. with the U.S. Securities and Exchange Commission, including the Company’s most recently filed Annual Report on Form 20-F.
Investor Relations / Media:
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com