Global Ship Lease, Inc. (NYSE:GSL) (the “Company”), a containership
charter owner, announced today its unaudited results for the three
months and year ended December 31, 2016.
Fourth Quarter and Year Highlights - Reported
operating revenues of $41.4 million for the fourth quarter 2016.
Operating revenues for the year ended December 31, 2016 were $166.5
million
- Reported net loss(1) of $55.1 million for the fourth quarter
2016, after a non-cash impairment charge of $63.1 million.
For the year ended December 31, 2016, net loss was $68.2 million
after a $92.4 million non-cash impairment charge
- Generated $28.6 million of Adjusted EBITDA(2) for the fourth
quarter 2016. Adjusted EBITDA for the year ended December 31,
2016 was $114.7 million
- Normalized net income (1)(2), excluding the non-cash
impairment charge, was $6.1 million for the fourth quarter
2016. Normalized net income was $22.4 million for the year
ended December 31, 2016
- Retired $53.9 million of bonds and $9.5 million of other debt;
reduced net debt to Adjusted EBITDA from 4.0 times at end 2015 to
3.3 times at end 2016
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, “In 2016, we maintained a strong focus on maximizing the
profitability of our long-term, fixed-rate time charters and
ensuring our insulation and resilience in the face of a challenging
market environment. Throughout the year, we made progress in
reducing our vessel operating costs, successfully extending the
contract durations of two of our vessels chartered to CMA CGM, and
meaningfully strengthening our balance
sheet.”
Mr. Webber continued, “While the overall market continues to
experience significant pressure, we remain encouraged by the
longer-term prospects for the mid-sized and smaller vessel classes
that are the focus of Global Ship Lease’s strategy. The
supply/demand dynamics for those vessels continue to move in the
direction of equilibrium, driven by record levels of vessel
scrapping, an orderbook heavily skewed towards very large ships,
and the continued growth of the non-mainlane trades most reliant
upon our vessels. With our strong counterparties and limited
exposure to the spot charter market in 2017, we are well positioned
to continue generating significant cashflow, de-levering our
balance sheet, and pursuing long-term value creation for our
shareholders.”
SELECTED FINANCIAL DATA – UNAUDITED (thousands
of U.S. dollars)
|
Three |
Three |
|
|
|
months ended |
months
ended |
Year ended |
Year ended |
|
December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
|
|
|
|
|
Operating
Revenues |
41,426 |
|
44,029 |
166,523 |
|
164,919 |
|
Operating
(Loss) Income |
(44,902 |
) |
19,413 |
(20,480 |
) |
19,253 |
|
Net (Loss)
Income (1) |
(55,072 |
) |
6,246 |
(68,157 |
) |
(31,937 |
) |
Adjusted
EBITDA (2) |
28,578 |
|
30,348 |
114,747 |
|
108,812 |
|
Normalized
Net Income (1)(2) |
6,140 |
|
6,246 |
22,441 |
|
12,763 |
|
|
|
|
|
|
(1) Net (loss) income and Normalized net income available to
common shareholders
(2) Adjusted EBITDA and Normalized net income are non-US
Generally Accepted Accounting Principles (US GAAP) measures, as
explained further in this press release, and are considered by
Global Ship Lease to be useful measures of its performance.
Reconciliations of such non-GAAP measures to the most directly
comparable US GAAP measure are provided in this Earnings
Release.
Operating Revenues and Utilization The 18 vessel fleet generated
operating revenues from fixed rate, mainly long-term time charters
of $41.4 million in the three months ended December 31, 2016, down
$2.6 million on operating revenues of $44.0 million for the
comparative period in 2015, with the reduction due mainly to fewer
ownership days following the sale of Ville d’Aquarius and Ville
d’Orion in fourth quarter 2015 and the effect of the amendments to
the charters of Marie Delmas and Kumasi, effective August 1, 2016
whereby the previous charter rate of $18,465 per day was reduced to
$13,000 per day against the granting of options in our favor to
extend the charters at $9,800 per day in three periods, potentially
to end 2020. There were 1,656 ownership days in the quarter, down
6.0% from 1,761 in the comparable period in 2015. In the fourth
quarter 2016, there was one day of unplanned offhire and 11 days of
planned offhire from regulatory drydockings, giving an overall
utilization of 99.3%. There were 1,761 ownership days in the
fourth quarter 2015 and a total of 14 days off-hire, of which one
was unplanned and 13 were for idle time, prior to the disposal of
Ville d’Aquarius and Ville d’Orion, giving an overall utilization
of 99.2%.
For the year ended December 31, 2016, operating revenues were
$166.5 million, up $1.6 million or 1.0% on operating revenues of
$164.9 million in the prior year, mainly due to the full year
contribution of OOCL Qingdao, purchased March 11, 2015, and OOCL
Ningbo, purchased September 17, 2015, offset by reduced revenue
after the sale of Ville d’Aquarius and Ville d’Orion, the effect of
the amendments to the charters of Marie Delmas and Kumasi and
increased offhire from six scheduled drydockings in 2016, compared
to only one in 2015.
The table below shows fleet utilization for the three months and
years ended December 31, 2016 and 2015 and for the years ended
December 31, 2014, 2013 and 2012.
|
|
|
|
|
|
|
|
|
Three months ended |
Year ended |
|
|
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Days |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2014 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
Ownership days |
1,656 |
|
1,761 |
|
6,588 |
|
6,893 |
|
6,270 |
|
6,205 |
|
6,222 |
|
Planned offhire -
scheduled drydock |
(11 |
) |
0 |
|
(100 |
) |
(9 |
) |
(48 |
) |
(21 |
) |
(82 |
) |
Unplanned offhire |
(1 |
) |
(1 |
) |
(3 |
) |
(7 |
) |
(12 |
) |
(7 |
) |
(16 |
) |
Idle time |
0 |
|
(13 |
) |
0 |
|
(13 |
) |
(64 |
) |
0 |
|
0 |
|
Operating days |
1,644 |
|
1,747 |
|
6,485 |
|
6,864 |
|
6,146 |
|
6,177 |
|
6,124 |
|
|
|
|
|
|
|
|
|
Utilization |
99.3 |
% |
99.2 |
% |
98.4 |
% |
99.6 |
% |
98.0 |
% |
99.5 |
% |
98.4 |
% |
There were six regulatory drydockings in 2016, with only one
vessel drydocked in the year ended December 31, 2015. A further
five regulatory drydockings are due in 2017.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, spares and insurance, were $11.2 million for the
three months ended December 31, 2016, compared to $12.2 million in
the comparative period. The absolute reduction is due to
fewer ownership days following the disposals of Ville d’Aquarius
and Ville d’Orion. The average cost per ownership day in the
quarter was $6,771, compared to $6,957 for the comparative period,
down $186 per day or 2.7%. The reduction is primarily
attributable to reduced crew costs and insurance costs on renewal,
together with the elimination of the relatively high costs related
to the operation of Ville d’Aquarius and Ville d’Orion, partly
offset by costs incurred in drydockings that are expensed rather
than capitalized.
For the year ended December 31, 2016, vessel operating expenses
were $45.7 million, or an average of $6,936 per day, compared to
$50.1 million in the comparative period or $7,269 per day. The
$333, or 4.6%, reduction in vessel operating expenses per day is
due mainly to reasons noted above.
Depreciation Depreciation for the three months ended December
31, 2016 was $10.4 million, compared to $10.9 million in the fourth
quarter 2015; the reduction is due to the reduced number of vessels
in the fleet.
Depreciation for the year ended December 31, 2016 was $42.8
million, compared to $44.9 million in the prior year; the reduction
again being due to the reduced number of vessels in the fleet.
Impairment
The Company’s accounting policies require that tangible fixed
assets such as vessels are reviewed individually for impairment
when events or changes in circumstances indicate that their
carrying amounts may not be recoverable. We also undertake an
impairment review at the end of the financial year.
The 2016 year-end impairment review gave rise to a non-cash
charge recorded in the fourth quarter of $63.1 million, as the sum
of the expected undiscounted future cash flows from four vessels
over their estimated remaining useful lives is less than the
carrying amounts. The impairment charge is equal to the
amount by which the assets’ carrying amounts exceed their fair
values. Fair value is assessed, on a vessel by vessel basis, as the
net present value of estimated future cash flows, discounted by an
appropriate discount rate.
There was no such impairment charge in fourth quarter 2015.
A non-cash impairment charge of $29.4 million was recognized in
the three months ended September 30, 2016, following our agreement
with CMA CGM to amend and extend the charters of the Marie Delmas
and Kumasi.
Accordingly, the total non-cash impairment charge for the year
ended December 31, 2016 was $92.4 million.
Following receipt of notices of re-delivery for Ville d’Aquarius
and Ville d’Orion in fourth quarter 2015 and the Company’s
assessment of the vessels’ re-chartering prospects, sales of the
vessels were completed on November 5, and December 8, 2015
respectively, for total net proceeds of approximately $9.3 million.
The vessels were written down as at September 30, 2015 by $44.7
million to their estimated net realizable value, including
estimated selling costs.
General and Administrative Costs General and administrative
costs were $1.7 million in the three months ended December 31,
2016, compared to $1.6 million in the fourth quarter of 2015; the
modest increase is due mainly to higher professional fees offset by
a positive exchange effect from the stronger US dollar, as some
general and administrative costs are denominated in sterling and
euro.
For the year ended December 31, 2016, general and administrative
costs were $6.3 million, compared to $6.5 million for 2015.
Other Operating Income
Other operating income in the three months ended December 31,
2016 was $41,000, compared to $164,000 in the fourth quarter
2015.
For the year ended December 31, 2016, other operating income was
$0.2 million, compared to $0.5 million for the prior
year.
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was $28.6 million for
the three months ended December 31, 2016, down from $30.3 million
for the three months ended December 31, 2015.
Adjusted EBITDA for the year ended December 31, 2016 was $114.7
million, compared to $108.8 million for the prior year. The
increase of 5.5% is due mainly to the effect of vessel acquisitions
and the disposal of the Ville d’Aquarius and Ville d’Orion.
Interest Expense Debt at December 31, 2016 comprised amounts
outstanding on our 10% Notes, the revolving credit facility, which
was drawn March 11, 2015, and the secured term loan, which was
drawn September 10, 2015.
Interest expense for the three months ended December 31, 2016,
was $9.5 million, down $3.0 million on the interest expense for the
three months ended December 31, 2015 of $12.4 million. The
reduction is mainly due to a $1.9 million gain on the open market
purchases of $18.0 million principal amount of the Notes in
November 2016 and reduced interest on the Notes following these
repurchases and the repurchase by way of tender of $26.7 million
principal amount of the Notes in March 2016, and the open market
purchases of $4.2 million principal amount of the Notes in May 2016
and $5.0 million principal amount of the Notes in August 2016.
For the year ended December 31, 2016, interest expense was $44.8
million, down $3.4 million on interest expense of $48.2 million for
the year ended December 31, 2015. The decrease is due to lower
interest on the Notes following the tender offer and open market
purchases and the $2.9 million gain realized on these, offset by
the effect of drawing on the secured term loan in September 2015,
$0.5 million premium paid in March 2016 in relation to the tender
offer and accelerated write-off of the portion of deferred
financing charges and the original issue discount attributable to
Notes which were purchased and retired in the year.
Interest income for the three months ended December 31, 2016 was
$59,000, up from $16,000 in the comparative period of 2015 due to
higher cash balances. Interest income for the year ended
December 31, 2016 was $198,000, compared to $62,000 in the
comparative period.
Taxation
Taxation for the three months ended December 31, 2016 was a
charge of $14,000, compared to a credit of $1,000 in the fourth
quarter of 2015.
Taxation for the year ended December 31, 2016 was a charge of
$46,000, compared to $38,000 for the prior year 2015.
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost
of which for the three months ended December 31, 2016 was $0.8
million; the same as in the comparative period.
The cost in the year ended December 31, 2016 was $3.1 million;
the same as in the comparative period.
Net (Loss)/Income Available to Common Shareholders and
Normalized Net Income
Net loss for the three months ended December 31, 2016 was $55.1
million, after the $63.1 million non-cash impairment charge.
For the three months ended December 31, 2015, net income was $6.2
million.
Normalized net income for the three months ended December 31,
2016, adjusting for the non-cash impairment charge, was $6.1
million, compared to $6.2 million in the comparative period.
Net loss was $68.2 million for the year ended December 31, 2016
after the $92.4 million non-cash impairment charge. Net loss
was $31.9 million for the year ended December 31, 2015, after the
$44.7 million non-cash impairment charge.
Normalized net income for the year ended December 31, 2016 was
$22.4 million, before the impairment charge and was $12.8 million
for the prior year, again before the impairment charge.
Fleet
The following table provides information about the on-the-water
fleet of 18 vessels as at December 31, 2016. 15 vessels are
chartered to CMA CGM and three are chartered to OOCL.
|
|
|
|
Remaining |
Earliest |
Daily |
|
|
|
|
Charter |
Charter |
Charter |
Vessel |
Capacity |
Year |
Purchase |
Term (2) |
Expiry |
Rate |
Name |
in TEUs (1) |
Built |
by GSL |
(years) |
Date |
$ |
CMA CGM Matisse |
2,262 |
1999 |
Dec
2007 |
3.00 |
Sept
21, 2019 |
15,300 |
CMA CGM Utrillo |
2,262 |
1999 |
Dec
2007 |
3.00 |
Sept
11, 2019 |
15,300 |
Delmas Keta |
2,207 |
2003 |
Dec
2007 |
1.00 |
Sept
20, 2017 |
18,465 |
Julie Delmas |
2,207 |
2002 |
Dec
2007 |
1.00 |
Sept
11, 2017 |
18,465 |
Kumasi
(3) |
2,207 |
2002 |
Dec
2007 |
1.00-4.00(3) |
August
6, 2017(3) |
13,000(3) |
Marie Delmas
(3) |
2,207 |
2002 |
Dec
2007 |
1.00-4.00(3) |
July
31, 2017(3) |
13,000(3) |
CMA CGM La Tour |
2,272 |
2001 |
Dec
2007 |
3.00 |
Sept
20, 2019 |
15,300 |
CMA CGM Manet |
2,272 |
2001 |
Dec
2007 |
3.00 |
Sept
7, 2019 |
15,300 |
CMA CGM Alcazar |
5,089 |
2007 |
Jan
2008 |
4.00 |
Oct
18, 2020 |
33,750 |
CMA CGM Château
d’If |
5,089 |
2007 |
Jan
2008 |
4.00 |
Oct
11, 2020 |
33,750 |
CMA CGM Thalassa |
11,040 |
2008 |
Dec
2008 |
9.00 |
Oct 1,
2025 |
47,200 |
CMA CGM Jamaica |
4,298 |
2006 |
Dec
2008 |
6.00 |
Sept
17, 2022 |
25,350 |
CMA CGM Sambhar |
4,045 |
2006 |
Dec
2008 |
6.00 |
Sept
16, 2022 |
25,350 |
CMA CGM America |
4,045 |
2006 |
Dec
2008 |
6.00 |
Sept
19, 2022 |
25,350 |
CMA CGM Berlioz |
6,621 |
2001 |
Aug
2009 |
4.75 |
May
28, 2021 |
34,000 |
OOCL Tianjin |
8,063 |
2005 |
Oct
2014 |
1.00 |
Oct
28, 2017 |
34,500 |
OOCL Qingdao |
8,063 |
2004 |
Mar
2015 |
1.25 |
Mar
11, 2018 |
34,500 |
OOCL Ningbo |
8,063 |
2004 |
Sep
2015 |
1.75 |
Sep
17, 2018 |
34,500 |
(1) Twenty-foot Equivalent Units. |
|
|
|
|
|
(2) As at December 31, 2016. Plus or minus 90 days,
other than (i) OOCL Tianjin which is between October 28, 2017 and
January 28, 2018, (ii) OOCL Qingdao which is between March 11, 2018
and June 11, 2018, and (iii) OOCL Ningbo which is between September
17, 2018 and December 17, 2018, all at charterer’s option.(3) The
charters for Kumasi and Marie Delmas were amended in July
2016. The earliest possible re-delivery date is shown in the
table. However, the Company may exercise three consecutive
options to extend the charters, at $9,800 per day, which extend the
earliest re-delivery date to October 2, 2020. |
|
Conference Call and Webcast Global Ship Lease
will hold a conference call to discuss the Company's results for
the three months ended December 31, 2016 today, Tuesday March 7,
2017 at 10:30 a.m. Eastern Time. There are two ways to access the
conference call:
(1) Dial-in: (877) 445-2556 or (908) 982-4670;
Passcode: 71587456Please dial in at least 10 minutes prior to 10:30
a.m. Eastern Time to ensure a prompt start to the call.
(2) Live Internet webcast and slide presentation:
http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the
call will be available through Thursday, March 23, 2017 at (855)
859-2056 or (404) 537-3406. Enter the code 71587456 to access the
audio replay. The webcast will also be archived on the Company’s
website: http://www.globalshiplease.com.
Annual Report on Form 20F
The Company’s Annual Report for 2015 is on file with the
Securities and Exchange Commission. A copy of the report can
be found under the Investor Relations section (Annual Reports) of
the Company’s website at http://www.globalshiplease.com
Shareholders may request a hard copy of the audited financial
statements free of charge by contacting the Company at
info@globalshiplease.com or by writing to Global Ship Lease, Inc,
care of Global Ship Lease Services Limited, Portland House, Stag
Place, London SW1E 5RS or by telephoning +44 (0) 207 869 8806.
About Global Ship Lease
Global Ship Lease is a containership charter owner. Incorporated
in the Marshall Islands, Global Ship Lease commenced operations in
December 2007 with a business of owning and chartering out
containerships under long-term, fixed rate charters to top tier
container liner companies.
At December 31, 2016, Global Ship Lease owned 18 vessels with a
total capacity of 82,312 TEU and an average age, weighted by TEU
capacity of 12.0 years. All vessels are currently fixed on time
charters, 15 with CMA CGM. The average remaining term of the
charters is 3.9 years or 4.0 years on a weighted basis.
Reconciliation of Non-U.S. GAAP Financial
Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and
expense including amortization of deferred finance costs, earnings
allocated to preferred shares, income taxes, depreciation,
amortization and impairment. Adjusted EBITDA is a non-US GAAP
quantitative measure used to assist in the assessment of the
Company's ability to generate cash from its operations. We
believe that the presentation of Adjusted EBITDA is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. Adjusted EBITDA is not defined in
US GAAP and should not be considered to be an alternate to Net
income or any other financial metric required by such accounting
principles. Our use of Adjusted EBITDA may vary from the use
of similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars)
|
|
Three |
Three |
|
|
|
|
months |
months |
Year |
Year |
|
|
ended |
ended |
ended |
ended |
|
|
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
Net (loss)
income available to common shareholders |
(55,072 |
) |
6,246 |
|
(68,157 |
) |
(31,937 |
) |
|
|
|
|
|
|
Adjust: |
Depreciation |
10,415 |
|
10,935 |
|
42,805 |
|
44,859 |
|
|
Impairment |
63,065 |
|
--- |
|
92,422 |
|
44,700 |
|
|
Interest
income |
(59 |
) |
(16 |
) |
(198 |
) |
(62 |
) |
|
Interest
expense |
9,450 |
|
12,419 |
|
44,767 |
|
48,152 |
|
|
Earnings
allocated to preferred shares |
765 |
|
765 |
|
3,062 |
|
3,062 |
|
|
Income
tax |
14 |
|
(1 |
) |
46 |
|
38 |
|
|
|
|
|
|
|
Adjusted
EBITDA |
28,578 |
|
30,348 |
|
114,747 |
|
108,812 |
|
|
B. Normalized net income Normalized net income represents net
income adjusted for the premium paid on the tender offer for the
Notes and the gain made on open market purchases of the Notes,
together with the related accelerated amortization of deferred
financing costs and original issue discount, and for impairment
charges. Normalized net income is a non-GAAP quantitative measure
which we believe will assist investors and analysts who often
adjust reported net income for non-operating items that do not
affect operating performance or operating cash generated.
Normalized net income is not defined in US GAAP and should not be
considered to be an alternate to net income or any other financial
metric required by such accounting principles. Our use of
Normalized net income may vary from the use of similarly titled
measures by others in our industry.
NORMALIZED NET INCOME - UNAUDITED(thousands of
U.S. dollars)
|
|
|
|
|
|
|
|
Three |
Three |
|
|
|
|
months |
months |
Year |
Year |
|
|
ended |
ended |
Ended |
ended |
|
|
Dec 31, |
Dec
31, |
Dec 31, |
Dec 31, |
|
|
2016 |
|
2015 |
2016 |
|
2015 |
|
|
|
|
|
|
|
Net (loss)
available to common shareholders |
(55,072 |
) |
6,246 |
(68,157 |
) |
(31,937 |
) |
|
|
|
|
|
|
Adjust: |
Gain on purchase of
notes |
(1,938 |
) |
--- |
(2,865 |
) |
--- |
|
|
Premium paid on tender
offer for notes |
--- |
|
--- |
533 |
|
--- |
|
|
Accelerated write off
of deferred financing charges related to notes purchase and tender
offer |
34 |
|
--- |
134 |
|
--- |
|
|
Accelerated write off
of original issue discount related to notes purchase and tender
offer |
51 |
|
--- |
374 |
|
--- |
|
|
Impairment charge |
63,065 |
|
--- |
92,422 |
|
44,700 |
|
|
|
|
|
|
|
Normalized
net income |
6,140 |
|
6,246 |
22,441 |
|
12,763 |
|
Safe Harbor Statement This communication
contains forward-looking statements. Forward-looking statements
provide Global Ship Lease's current expectations or forecasts of
future events. Forward-looking statements include statements about
Global Ship Lease's expectations, beliefs, plans, objectives,
intentions, assumptions and other statements that are not
historical facts. Words or phrases such as "anticipate," "believe,"
"continue," "estimate," "expect," "intend," "may," "ongoing,"
"plan," "potential," "predict," "project," "will" or similar words
or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words
does not necessarily mean that a statement is not forward-looking.
These forward-looking statements are based on assumptions that may
be incorrect, and Global Ship Lease cannot assure you that these
projections included in these forward-looking statements will come
to pass. Actual results could differ materially from those
expressed or implied by the forward-looking statements as a result
of various factors. The risks and uncertainties include, but are
not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container
shipping industry, including the rates of annual demand and supply
growth;
- the financial condition of our charterers, particularly CMA
CGM, our principal charterer and main source of operating revenue,
and their ability to pay charterhire in accordance with the
charters;
- Global Ship Lease’s financial condition and liquidity,
including its ability to obtain additional waivers which might be
necessary under the existing credit facility or obtain additional
financing to fund capital expenditures, vessel acquisitions and
other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and
repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments
and forecasts of its ability to make such payments including the
availability of cash and the impact of constraints under its credit
facility;
- future acquisitions, business strategy and expected capital
spending;
- operating expenses, availability of crew, number of off-hire
days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends,
including charter rates and factors affecting supply and
demand;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional
economies;
- risks incidental to vessel operation, including piracy,
discharge of pollutants and vessel accidents and damage including
total or constructive total loss;
- estimated future capital expenditures needed to preserve its
capital base;
- Global Ship Lease’s expectations about the availability of
ships to purchase, the time that it may take to construct new
ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew
long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate
time charters;
- Global Ship Lease’s ability to capitalize on its management’s
and board of directors’ relationships and reputations in the
containership industry to its advantage;
- changes in governmental and classification societies’ rules and
regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on
commercially reasonable terms;
- unanticipated changes in laws and regulations including
taxation;
- potential liability from future litigation.
Forward-looking statements are subject to known and unknown
risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
Global Ship Lease's actual results could differ materially from
those anticipated in forward-looking statements for many reasons
specifically as described in Global Ship Lease's filings with the
SEC. Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this
communication. Global Ship Lease undertakes no obligation to
publicly revise any forward-looking statement to reflect
circumstances or events after the date of this communication or to
reflect the occurrence of unanticipated events. You should,
however, review the factors and risks Global Ship Lease describes
in the reports it will file from time to time with the SEC after
the date of this communication.
|
Global Ship Lease, Inc. |
|
Interim Unaudited Consolidated
Statements of Income |
|
(Expressed in thousands of U.S. dollars except share
data) |
|
|
|
Three months ended December
31, |
Year ended December
31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter
revenue |
|
$ |
9,444 |
|
$ |
10,412 |
|
$ |
37,567 |
|
$ |
31,568 |
|
Time charter revenue –
related party |
|
|
31,982 |
|
|
33,617 |
|
|
128,956 |
|
|
133,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,426 |
|
|
44,029 |
|
|
166,523 |
|
|
164,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
ExpensesVessel operating expenses |
|
|
10,814 |
|
|
11,851 |
|
|
44,096 |
|
|
48,238 |
|
Vessel operating
expenses – related party |
|
|
400 |
|
|
400 |
|
|
1,599 |
|
|
1,866 |
|
Depreciation |
|
|
10,415 |
|
|
10,935 |
|
|
42,805 |
|
|
44,859 |
|
Impairment of
vessels |
|
|
63,065 |
|
|
- |
|
|
92,422 |
|
|
44,700 |
|
General and
administrative |
|
|
1,675 |
|
|
1,594 |
|
|
6,297 |
|
|
6,478 |
|
Other operating
income |
|
|
(41 |
) |
|
(164 |
) |
|
(216 |
) |
|
(475 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
86,328 |
|
|
24,616 |
|
|
187,003 |
|
|
145,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(Loss) Income |
|
|
(44,902 |
) |
|
19,413 |
|
|
(20,480 |
) |
|
19,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non Operating
Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
59 |
|
|
16 |
|
|
198 |
|
|
62 |
|
Interest expense |
|
|
(9,450 |
) |
|
(12,419 |
) |
|
(44,767 |
) |
|
(48,152 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
before Income Taxes |
|
|
(54,293 |
) |
|
7,010 |
|
|
(65,049 |
) |
|
(28,837 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
(14 |
) |
|
1 |
|
|
(46 |
) |
|
(38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income |
|
$ |
(54,307 |
) |
$ |
7,011 |
|
$ |
(65,095 |
) |
$ |
(28,875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings allocated to
Series B Preferred Shares |
|
|
(765 |
) |
|
(765 |
) |
|
(3,062 |
) |
|
(3,062 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income available to Common Shareholders
|
|
$ |
(55,072 |
) |
$ |
6,246 |
|
$ |
(68,157 |
) |
$ |
(31,937 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share |
|
|
|
|
|
Weighted average number
of Class A common shares outstanding |
|
|
|
|
|
Basic
(including RSUs without service conditions)Diluted |
|
|
47,867,26647,867,266 |
|
|
47,841,48447,841,484 |
|
47,854,35147,854,351 |
|
|
47,785,38847,785,388 |
|
|
|
|
|
|
|
Net (loss) income per
Class A common share |
|
|
|
|
|
Basic
(including RSUs without service conditions) |
|
$ |
(1.15 |
) |
$ |
0.13 |
$ |
(1.42 |
) |
$ |
(0.67 |
) |
Diluted |
|
$ |
(1.15 |
) |
$ |
0.13 |
$ |
(1.42 |
) |
$ |
(0.67 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of Class B common shares outstanding
Basic and diluted |
|
|
7,405,956 |
|
|
7,405,956 |
|
7,405,956 |
|
|
7,405,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per Class B
common share Basic and
diluted |
|
$ |
0.00 |
|
$ |
0.00 |
$ |
0.00 |
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Ship Lease, Inc. |
|
Interim Unaudited Consolidated
Balance Sheets |
|
(Expressed in thousands of U.S. dollars) |
|
|
|
December 31,2016 |
|
December 31,2015 |
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
54,243 |
|
|
$ |
53,591 |
Accounts
receivable |
|
|
29 |
|
|
|
87 |
Due from related
party |
|
|
906 |
|
|
|
2,124 |
Prepaid expenses |
|
|
1,146 |
|
|
|
1,101 |
Other receivables |
|
|
52 |
|
|
|
118 |
Inventory |
|
|
553 |
|
|
|
610 |
|
|
|
|
|
|
|
|
Total current
assets |
|
|
56,929 |
|
|
|
57,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels in
operation |
|
|
719,110 |
|
|
|
846,939 |
Other fixed assets |
|
|
7 |
|
|
|
5 |
Intangible assets |
|
|
16 |
|
|
|
39 |
Other long term
assets |
|
|
195 |
|
|
|
306 |
|
|
|
|
|
|
|
|
Total non-current
assets |
|
|
719,328 |
|
|
|
847,289 |
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
776,257 |
|
|
$ |
904,920 |
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current portion of long
term debt |
|
$ |
30,290 |
|
|
$ |
35,160 |
Intangible liability –
charter agreements |
|
|
1,807 |
|
|
|
2,104 |
Deferred revenue |
|
|
1,940 |
|
|
|
796 |
Accounts payable |
|
|
963 |
|
|
|
622 |
Due to related
party |
|
|
1,315 |
|
|
|
1,256 |
Accrued expenses |
|
|
11,664 |
|
|
|
13,694 |
|
|
|
|
|
|
|
|
Total current
liabilities |
|
|
47,979 |
|
|
|
53,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term debt |
|
|
389,583 |
|
|
|
442,913 |
Intangible liability –
charter agreements |
|
|
9,782 |
|
|
|
11,589 |
Deferred tax
liability |
|
|
20 |
|
|
|
20 |
|
|
|
|
|
|
|
|
Total long term
liabilities |
|
|
399,385 |
|
|
|
454,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
$ |
447,364 |
|
|
$ |
508,154 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
Class A Common stock –
authorized214,000,000 shares with a $0.01 par value; 47,575,609
shares issued and outstanding (2015 – 47,541,484) |
|
$ |
476 |
|
|
$ |
475 |
Class B Common stock –
authorized20,000,000 shares with a $0.01 par value;7,405,956 shares
issued and outstanding (2015 – 7,405,956) |
|
|
74 |
|
|
|
74 |
Series B Preferred
shares – authorized16,100 shares with $0.01 par value;14,000 shares
issued and outstanding (2015 – 14,000) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
Additional paid in
capital |
|
|
386,708 |
|
|
|
386,425 |
Accumulated losses
(Retained earnings) |
|
|
(58,365 |
) |
|
|
9,792 |
|
|
|
|
|
Total
Stockholders’ Equity |
|
|
328,893 |
|
|
|
396,766 |
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
776,257 |
|
|
$ |
904,920 |
|
|
|
|
|
|
|
|
Global Ship Lease, Inc. |
|
Interim Unaudited Consolidated Statements of
Cash Flows |
|
(Expressed in thousands of U.S. dollars) |
|
|
|
Three months ended December
31, |
Year endedDecember
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(54,307 |
) |
|
$ |
7,011 |
|
|
$ |
(65,095 |
) |
|
$ |
(28,875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
Reconcile Net income (loss) to Net Cash Provided by Operating
Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
10,415 |
|
|
|
10,935 |
|
|
|
42,805 |
|
|
|
44,859 |
|
Vessel impairment |
|
|
63,065 |
|
|
|
- |
|
|
|
92,422 |
|
|
|
44,700 |
|
Gain on sale of
vessels |
|
|
- |
|
|
|
(93 |
) |
|
|
- |
|
|
|
(93 |
) |
Amortization of
deferred financing costs |
|
|
941 |
|
|
|
943 |
|
|
|
3,622 |
|
|
|
3,374 |
|
Amortization of
original issue discount |
|
|
402 |
|
|
|
346 |
|
|
|
1,651 |
|
|
|
1,178 |
|
Amortization of
intangible liability |
|
|
(515 |
) |
|
|
(530 |
) |
|
|
(2,104 |
) |
|
|
(2,119 |
) |
Share based
compensation |
|
|
83 |
|
|
|
- |
|
|
|
283 |
|
|
|
75 |
|
Gain on repurchase of
secured notes |
|
|
(1,938 |
) |
|
|
- |
|
|
|
(2,865 |
) |
|
|
- |
|
Decrease (increase) in
accounts receivable and other assets |
|
|
681 |
|
|
|
(194 |
) |
|
|
219 |
|
|
|
1,517 |
|
Decrease (increase) in
inventory |
|
|
37 |
|
|
|
36 |
|
|
|
57 |
|
|
|
(160 |
) |
Increase (decrease) in
accounts payable and other liabilities |
|
|
9,330 |
|
|
|
9,798 |
|
|
|
(1,751 |
) |
|
|
(1,571 |
) |
Increase in unearned
revenue |
|
|
233 |
|
|
|
204 |
|
|
|
1,144 |
|
|
|
334 |
|
(Decrease) increase in
related party balances |
|
|
(699 |
) |
|
|
(428 |
) |
|
|
738 |
|
|
|
(868 |
) |
Unrealized foreign
exchange loss (gain) |
|
|
33 |
|
|
|
(6 |
) |
|
|
26 |
|
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash
Provided by Operating Activities |
|
|
27,761 |
|
|
|
28,022 |
|
|
|
71,152 |
|
|
|
62,337 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
vessels |
|
|
- |
|
|
|
(168 |
) |
|
|
- |
|
|
|
(108,187 |
) |
Net proceeds from sale
of vessels |
|
|
- |
|
|
|
9,513 |
|
|
|
(254 |
) |
|
|
9,513 |
|
Cash paid for other
assets |
|
|
- |
|
|
|
- |
|
|
|
(6 |
) |
|
|
(3 |
) |
Cash paid for
drydockings |
|
|
(2,513 |
) |
|
|
- |
|
|
|
(6,681 |
) |
|
|
(2,548 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used
in) Provided by Investing Activities |
|
|
(2,513 |
) |
|
|
9,345 |
|
|
|
(6,941 |
) |
|
|
(101,225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of secured
notes |
|
|
(16,061 |
) |
|
|
- |
|
|
|
(50,997 |
) |
|
|
(350 |
) |
Proceeds from drawdown
of revolving credit facility |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
75,000 |
|
Deferred financing
costs incurred |
|
|
- |
|
|
|
(162 |
) |
|
|
- |
|
|
|
(971 |
) |
Repayment of credit
facilities |
|
|
(2,925 |
) |
|
|
(1,925 |
) |
|
|
(9,500 |
) |
|
|
(1,925 |
) |
Class A common shares –
dividends paid |
|
|
- |
|
|
|
(4,754 |
) |
|
|
- |
|
|
|
(9,508 |
) |
Series B Preferred
Shares – dividends paid |
|
|
(765 |
) |
|
|
(765 |
) |
|
|
(3,062 |
) |
|
|
(3,062 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used
in Financing Activities |
|
|
(19,751 |
) |
|
|
(7,606 |
) |
|
|
(63,559 |
) |
|
|
59,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in
Cash and Cash Equivalents |
|
|
5,497 |
|
|
|
29,761 |
|
|
|
652 |
|
|
|
20,296 |
|
Cash and Cash
Equivalents at Start of Period |
|
|
48,746 |
|
|
|
23,830 |
|
|
|
53,591 |
|
|
|
33,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents at End of Period |
|
$ |
54,243 |
|
|
$ |
53,591 |
|
|
$ |
54,243 |
|
|
$ |
53,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
paid |
|
$ |
881 |
|
|
$ |
634 |
|
|
$ |
43,134 |
|
|
$ |
43,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax paid |
|
$ |
13 |
|
|
$ |
15 |
|
|
$ |
50 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Sep 2023 to Sep 2024