Navios Maritime Partners L.P. (“Navios Partners”) (NYSE: NMM), an
international owner and operator of dry cargo vessels, today
reported its financial results for the first quarter ended March
31, 2020.
Angeliki Frangou, Chairman and Chief Executive
Officer of Navios Partners stated, “While the humanitarian crises
caused by the Pandemic has been heartbreaking, we have also been
strengthened by the courage and compassion of the first responders,
particularly the many dedicated health care workers. At any given
time, our vessels carry over 1,000 people. Keeping these people
safe and these vessels moving in and out of quarantined countries,
with ever-changing rules and challenges, requires the immediate
input of many disciplines. I am proud of the members of the Navios
family as they have shown admirable resilience during this
unprecedented time of uncertainty, and we have taken the necessary
measures to ensure safety of our people while keeping our fleet
functioning.”
Angeliki Frangou continued, “I am pleased with
the results for the first quarter of 2020. For the first quarter,
Navios Partners reported $46.5 million in revenue and $19.1 million
in Adjusted EBITDA. We also declared a quarterly distribution of
$0.30 cents per unit. The pandemic’s effect on global economic
activity is evident in charter rates. So far this year, the
capesize 5TC rate is averaging around $5,300 per day, which is 70%
less than the 2019 average of $18,000. We are, however, expecting a
recovery in the second half of 2020 as countries emerge from
quarantine.”
Liquidation of Navios Europe II
Inc.
On April 21, 2020, Navios Europe II agreed
with the lender to fully release the liabilities under the junior
participating loan facility for $5.0 million. Navios Europe II
owns seven container vessels and seven dry bulk vessels. The
structure is expected to be liquidated during the second quarter of
2020 and Navios Partners expects to receive cash and steel value.
The Company’s Conflict Committee will consider and approve the
liquidation.
Cash Distribution
The Board of Directors of Navios Partners
declared a cash distribution for the first quarter of 2020 of $0.30
per unit. The cash distribution is payable on May 14, 2020 to all
unitholders of record as of May 11, 2020. The declaration and
payment of any further dividends remain subject to the discretion
of the Board of Directors and will depend on, among other things,
Navios Partners’ cash requirements as measured by market
opportunities and restrictions under its credit agreements and
other debt obligations and such other factors as the Board of
Directors may deem advisable.
Long-Term Cash Flow
Navios Partners has entered into medium to
long-term time charter-out agreements for its vessels with a
remaining average term of approximately 2.0 years. Navios Partners
has currently contracted out 84.6% of its available days for 2020,
36.9% for 2021 and 16.3% for 2022, including index-linked charters,
expecting to generate revenues (excluding index-linked charters) of
approximately $143.6 million, $83.3 million and $71.9 million,
respectively. The average contracted daily charter-out rate for the
fleet is $13,878, $27,001 and $28,632 for 2020, 2021 and 2022,
respectively.
EARNINGS HIGHLIGHTS
For the following results and the selected
financial data presented herein, Navios Partners has compiled
consolidated statements of operations for the three month periods
ended March 31, 2020 and 2019. The quarterly information was
derived from the unaudited condensed consolidated financial
statements for the respective periods. Adjusted EBITDA, Adjusted
Earnings/ (Loss) per Common Unit, Adjusted Net Income/ (Loss) and
Operating Surplus are non-GAAP financial measures and should not be
used in isolation or substitution for Navios Partners’ results
calculated in accordance with U.S. generally accepted accounting
principles (“U.S. GAAP”).
| |
Three Month |
Three Month |
| |
Period Ended |
Period Ended |
| |
March 31,2020 |
March 31, 2019 |
| (in $‘000 except per
unit data) |
(unaudited) |
(unaudited) |
|
Revenue |
$ |
46,490 |
|
|
$ |
46,818 |
|
|
| Net Loss |
$ |
(10,724 |
) |
|
$ |
(9,523 |
) |
|
| Adjusted Net Loss |
$ |
(3,824 |
) |
(1) |
$ |
(2,178 |
) |
(2) |
| Net cash provided by operating
activities |
$ |
20,937 |
|
|
$ |
10,483 |
|
|
| EBITDA |
$ |
12,181 |
|
|
$ |
15,313 |
|
|
| Adjusted EBITDA |
$ |
19,081 |
|
(1) |
$ |
22,658 |
|
(2) |
| Loss per Common Unit (basic
and diluted) |
$ |
(0.97 |
) |
|
$ |
(0.85 |
) |
|
| Adjusted Loss per Common Unit
(basic and diluted) |
$ |
(0.35 |
) |
(1) |
$ |
(0.19 |
) |
(2) |
| Operating Surplus |
$ |
4,431 |
|
|
$ |
5,702 |
|
|
| Maintenance and Replacement
Capital Expenditure Reserve |
$ |
8,590 |
|
|
$ |
7,474 |
|
|
- Adjusted EBITDA, Adjusted Net Loss and Adjusted Loss per Common
Unit for the three month period ended March 31, 2020 have been
adjusted to exclude a $6.9 million loss related to the
other-than-temporary impairment recognized in the Navios Partners’
receivable from Navios Europe II.
- Adjusted EBITDA, Adjusted Net Loss and Adjusted Loss per Common
Unit for the three month period ended March 31, 2019 have been
adjusted to exclude a $7.3 million impairment loss related to the
sale of one of our vessels.
Three month periods ended March 31, 2020
and 2019
Time charter and voyage revenues for the three
month period ended March 31, 2020 decreased by $0.3 million,
or 0.7%, to $46.5 million, as compared to $46.8 million
for the same period in 2019. The decrease in time charter and
voyage revenues was mainly attributable to the decrease in the time
charter equivalent rate, or TCE rate, to $10,717 per day for the
three month period ended March 31, 2020, from $13,209 per day for
the three month period ended March 31, 2019. The available days of
the fleet increased to 4,097 days for the three month period ended
March 31, 2020, as compared to 3,277 days for the three month
period ended March 31, 2019.
EBITDA for the three month period ended March
31, 2020 was negatively affected by the accounting effect of a $6.9
million loss related to the other-than-temporary impairment
recognized in the Navios Partners’ receivable from Navios Europe
II. EBITDA for the three month period ended March 31, 2019 was
negatively affected by the accounting effect of a $7.3 million
impairment loss on the sale of the Navios Galaxy I. Excluding these
items, Adjusted EBITDA decreased by $3.6 million to $19.1 million
for the three month period ended March 31, 2020, as compared to
$22.7 million for the same period in 2019. The decrease in Adjusted
EBITDA was primarily due to a: (i) $0.3 million decrease in
revenue; (ii) $5.6 million increase in management fees; (iii) $0.1
million increase in general and administrative fees; and (iv) $0.3
million increase in other expense. The above decrease was partially
mitigated by a: (i) $0.4 million decrease in time charter and
voyage expenses; (ii) $0.7 million increase in other income; and
(iii) $1.7 million increase in equity in net earnings of affiliated
companies.
The reserves for estimated maintenance and
replacement capital expenditures for the three month periods ended
March 31, 2020 and 2019 were $8.6 million and $7.5 million,
respectively (please see “Reconciliation of Non-GAAP Financial
Measures” in Exhibit 3).
Navios Partners generated an operating surplus
for the three month period ended March 31, 2020 of $4.4 million, as
compared to $5.7 million for the three month period ended
March 31, 2019. Operating Surplus is a non-GAAP financial measure
used by certain investors to assist in evaluating a partnership’s
ability to make quarterly cash distributions (please see
“Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).
Net Loss for the three month period ended March
31, 2020 was negatively affected by the accounting effect of a $6.9
million loss related to the other-than-temporary impairment
recognized in the Navios Partners’ receivable from Navios Europe
II. Net Loss for the three month period ended March 31, 2019 was
negatively affected by the accounting effect of a $7.3 million
impairment loss on the sale of the Navios Galaxy I. Excluding these
items, Adjusted Net Loss for the three month period ended March 31,
2020 amounted to $3.8 million compared to $2.2 million loss for the
three month period ended March 31, 2019. The increase in Adjusted
Net Loss of $1.6 million was due to a: (i) $3.6 million decrease in
Adjusted EBITDA; (ii) $1.0 million increase in direct vessel
expenses; (iii) $0.1 million increase in depreciation and
amortization expenses; and (iv) $1.5 million decrease in interest
income. The above increase was partially mitigated by a $4.6
million decrease in interest expense and finance cost, net.
Fleet Employment Profile
The following table reflects certain key
indicators of Navios Partners’ core fleet performance for the three
month periods ended March 31, 2020 and 2019.
| |
Three Month Period
Ended March 31,
2020 (unaudited) |
|
Three Month Period
Ended March 31,
2019 (unaudited) |
|
Available Days(1) |
|
4,097 |
|
|
|
3,277 |
|
| Operating Days(2) |
|
3,995 |
|
|
|
3,213 |
|
| Fleet Utilization(3) |
|
97.5 |
% |
|
|
98.0 |
% |
| Time Charter Equivalent Combined
(per day) (4) |
$ |
10,717 |
|
|
$ |
13,209 |
|
|
Time Charter Equivalent Drybulk (per day) (4) |
$ |
8,244 |
|
|
$ |
10,457 |
|
| Time Charter Equivalent
Containerships (per day) (4) |
$ |
19,377 |
|
|
$ |
30,501 |
|
| Vessels operating at period
end |
|
46 |
|
|
|
37 |
|
|
(1 |
) |
Available days for the fleet represent total calendar days the
vessels were in Navios Partners’ possession for the relevant period
after subtracting off-hire days associated with scheduled repairs,
dry dockings or special surveys and ballast days relating to
voyages. The shipping industry uses available days to measure the
number of days in a relevant period during which a vessel is
capable of generating revenues. |
|
(2 |
) |
Operating days are the number of available days in the relevant
period less the aggregate number of days that the vessels are
off-hire due to any reason, including unforeseen circumstances. The
shipping industry uses operating days to measure the aggregate
number of days in a relevant period during which vessels actually
generate revenues. |
|
(3 |
) |
Fleet utilization is the percentage of time that Navios Partners’
vessels were available for revenue generating available days, and
is determined by dividing the number of operating days during a
relevant period by the number of available days during that period.
The shipping industry uses fleet utilization to measure efficiency
in finding employment for vessels and minimizing the amount of days
that its vessels are off-hire for reasons other than scheduled
repairs, dry dockings or special surveys. |
|
(4 |
) |
TCE rate: Time Charter Equivalent rate per day is defined as voyage
and time charter revenues less voyage expenses during a period
divided by the number of available days during the period. The TCE
rate per day is a standard shipping industry performance measure
used primarily to present the actual daily earnings generated by
vessels on various types of charter contracts for the number of
available days of the fleet. |
Conference Call Details:
Navios Partners' management will host a
conference call on Wednesday, May 13, 2020 to discuss the results
for the first quarter ended March 31, 2020.
Call Date/Time: Wednesday, May 13, 2020 at 8:30 am ET Call
Title: Navios Partners Q1 2020 Financial Results Conference Call US
Dial In: +1.866.394.0817 International Dial In:
+1.706.679.9759Conference ID: 225 7666
The conference call replay will be available two
hours after the live call and remain available for one week at the
following numbers:
US Replay Dial In: +1.800.585.8367International Replay Dial In:
+1.404.537.3406 Conference ID: 225 7666
Slides and audio webcast:
There will also be a live webcast of the
conference call, through the Navios Partners website
(www.navios-mlp.com) under “Investors”. Participants to the live
webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
A supplemental slide presentation will be
available on the Navios Partners’ website under the "Investors"
section by 8:00 am ET on the day of the call.
About Navios Maritime Partners
L.P.
Navios Maritime Partners L.P. (NYSE: NMM) is a
publicly traded master limited partnership which owns and operates
dry cargo vessels. For more information, please visit our website
at www.navios-mlp.com.
Forward-Looking Statements
This press release contains forward-looking
statements (as defined in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended) concerning future events including Navios
Partners’ expected cash flow generation, future contracted
revenues, future distributions and its ability to have a dividend
going forward, opportunities to reinvest cash accretively in a
fleet renewal program or otherwise, potential capital gains, its
ability to take advantage of dislocation in the market and Navios
Partners’ growth strategy and measures to implement such strategy;
including expected vessel acquisitions and entering into further
time charters. Words such as “may,” “expects,” “intends,” “plans,”
“believes,” “anticipates,” “hopes,” “estimates,” and variations of
such words and similar expressions are intended to identify
forward-looking statements.
These forward-looking statements are based on
the information available to, and the expectations and assumptions
deemed reasonable by Navios Partners at the time these statements
were made. Although Navios Partners believes that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct. These statements involve risks and are based upon a
number of assumptions and estimates that are inherently subject to
significant uncertainties and contingencies, many of which are
beyond the control of Navios Partners. Actual results may differ
materially from those expressed or implied by such forward-looking
statements.
Factors that could cause actual results to
differ materially include, but are not limited to, risks relating
to: global and regional economic and political conditions including
the impact of the COVID-19 pandemic and efforts
throughout the world to contain its spread, including effects on
global economic activity, demand for seaborne transportation of the
products we ship, the ability and willingness of charterers to
fulfill their obligations to us and prevailing charter rates,
shipyards performing scrubber installations, drydocking and
repairs, changing vessel crews and availability of financing;
potential disruption of shipping routes due to accidents, diseases,
pandemics, political events, piracy or acts by terrorists,
including the impact of the COVID-19 pandemic and the
ongoing efforts throughout the world to contain it; uncertainty
relating to global trade, including prices of seaborne commodities
and continuing issues related to seaborne volume and ton miles, our
continued ability to enter into long-term time charters, our
ability to maximize the use of our vessels, expected demand in the
dry cargo shipping sector in general and the demand for our
Panamax, Capesize, Ultra-Handymax and Containerships in particular,
fluctuations in charter rates for dry cargo carriers and container
vessels, the aging of our fleet and resultant increases in
operations costs, the loss of any customer or charter or vessel,
the financial condition of our customers, changes in the
availability and costs of funding due to conditions in the bank
market, capital markets and other factors, increases in costs and
expenses, including but not limited to: crew, insurance,
provisions, port expenses, lube oil, bunkers, repairs, maintenance
and general and administrative expenses, the expected cost of, and
our ability to comply with, governmental regulations and maritime
self-regulatory organization standards, as well as standard
regulations imposed by our charterers applicable to our business,
general domestic and international political conditions,
competitive factors in the market in which Navios Partners
operates; risks associated with operations outside the United
States; and other factors listed from time to time in Navios
Partners’ filings with the Securities and Exchange Commission,
including its Form 20-Fs and Form 6-Ks. Navios Partners expressly
disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Navios Partners’ expectations with
respect thereto or any change in events, conditions or
circumstances on which any statement is based. Navios Partners
makes no prediction or statement about the performance of its
common units.
Contacts
Navios Maritime Partners L.P.+1 (212) 906
8645Investors@navios-mlp.com
Nicolas BornozisCapital Link, Inc.+1 (212) 661
7566naviospartners@capitallink.com
EXHIBIT 1
NAVIOS MARITIME PARTNERS L.P. SELECTED
BALANCE SHEET DATA(Expressed in thousands of U.S. Dollars
except unit data)
| |
|
|
|
|
March 31, 2020
(unaudited) |
December 31, 2019
(unaudited) |
| ASSETS |
|
|
|
Cash and cash equivalents, including restricted cash |
$ |
31,147 |
$ |
30,402 |
| Vessels, net |
|
1,049,136 |
|
1,062,258 |
| Other assets (including current
and non-current) |
|
144,457 |
|
157,691 |
| Intangible assets |
|
2,875 |
|
3,166 |
|
|
|
|
| Total
assets |
$ |
1,227,615 |
$ |
1,253,517 |
|
|
|
|
| LIABILITIES AND PARTNERS’
CAPITAL |
|
|
| Other current liabilities |
$ |
21,473 |
$ |
20,004 |
| Total borrowings, net (including
current and non-current) |
|
476,057 |
|
489,028 |
| Other non-current
liabilities |
|
15,910 |
|
16,466 |
| Total partners’ capital |
|
714,175 |
|
728,019 |
|
|
|
|
| Total liabilities and
partners’ capital |
$ |
1,227,615 |
$ |
1,253,517 |
|
|
|
|
NAVIOS MARITIME PARTNERS
L.P.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Expressed in thousands of U.S. Dollars except
unit and per unit data)
|
|
Three Month Period Ended March 31, 2020
(unaudited) |
Three Month Period Ended March 31, 2019
(unaudited) |
|
Time charter and voyage revenues |
$ |
46,490 |
|
$ |
46,818 |
|
| Time charter and voyage
expenses |
|
(3,098 |
) |
|
(3,529 |
) |
| Direct vessel expenses |
|
(2,549 |
) |
|
(1,583 |
) |
| Management fees |
|
(22,205 |
) |
|
(16,610 |
) |
| General and administrative
expenses |
|
(4,145 |
) |
|
(4,013 |
) |
| Depreciation and
amortization |
|
(13,637 |
) |
|
(13,492 |
) |
| Vessel impairment losses |
|
- |
|
|
(7,345 |
) |
| Impairment of receivable in
affiliated company |
|
(6,900 |
) |
|
- |
|
| Interest expense and finance
cost, net |
|
(6,944 |
) |
|
(11,514 |
) |
| Interest income |
|
195 |
|
|
1,743 |
|
| Other income |
|
904 |
|
|
217 |
|
| Other expense |
|
(513 |
) |
|
(232 |
) |
| Equity in net earnings of
affiliated companies |
|
1,678 |
|
|
17 |
|
|
|
|
|
| Net
loss |
$ |
(10,724 |
) |
$ |
(9,523 |
) |
|
|
|
|
Loss per unit:
|
|
Three Month Period Ended March 31, 2020
(unaudited) |
Three Month Period Ended March 31, 2019
(unaudited) |
| Loss per unit: |
|
|
|
Common unit (basic and diluted) |
$ |
(0.97 |
) |
$ |
(0.85 |
) |
NAVIOS MARITIME PARTNERS L.P.
Other Financial
Information(Expressed in thousands of U.S. Dollars except
unit data)
| |
|
|
|
|
Three Month Period Ended March 31, 2020
(unaudited) |
Three Month Period Ended March 31, 2019
(unaudited) |
|
Net cash provided by operating activities |
$ |
20,937 |
|
$ |
10,483 |
|
| Net cash used in investing
activities |
|
(3,337 |
) |
|
(5,375 |
) |
| Net cash used in financing
activities |
|
(16,855 |
) |
|
(16,211 |
) |
|
|
|
|
| Increase/ (decrease) in
cash, cash equivalents and restricted cash |
$ |
745 |
|
$ |
(11,103 |
) |
|
|
|
|
EXHIBIT 2
|
Owned Drybulk Vessels |
|
Type |
|
Built |
|
Capacity (DWT) |
| Navios Soleil |
|
Ultra-Handymax |
|
2009 |
|
57,337 |
| Navios La Paix |
|
Ultra-Handymax |
|
2014 |
|
61,485 |
| Navios Christine B |
|
Ultra-Handymax |
|
2009 |
|
58,058 |
| TBN Navios Amaryllis |
|
Ultra-Handymax |
|
2008 |
|
58,735 |
| Navios Hyperion |
|
Panamax |
|
2004 |
|
75,707 |
| Navios Alegria |
|
Panamax |
|
2004 |
|
76,466 |
| Navios Orbiter |
|
Panamax |
|
2004 |
|
76,602 |
| Navios Anthos |
|
Panamax |
|
2004 |
|
75,798 |
| Navios Azalea |
|
Panamax |
|
2005 |
|
74,759 |
| Navios Camelia |
|
Panamax |
|
2009 |
|
75,162 |
| Navios Helios |
|
Panamax |
|
2005 |
|
77,075 |
| Navios Hope |
|
Panamax |
|
2005 |
|
75,397 |
| Navios Sun |
|
Panamax |
|
2005 |
|
76,619 |
| Navios Sagittarius |
|
Panamax |
|
2006 |
|
75,756 |
| Navios Harmony |
|
Panamax |
|
2006 |
|
82,790 |
| Navios Prosperity I |
|
Panamax |
|
2007 |
|
75,527 |
| Navios Libertas |
|
Panamax |
|
2007 |
|
75,511 |
| Navios Symmetry |
|
Panamax |
|
2006 |
|
74,381 |
| Navios Apollon I |
|
Panamax |
|
2005 |
|
87,052 |
| Navios Altair I |
|
Panamax |
|
2006 |
|
74,475 |
| Navios Sphera |
|
Panamax |
|
2016 |
|
84,872 |
| Navios Fantastiks |
|
Capesize |
|
2005 |
|
180,265 |
| Navios Aurora II |
|
Capesize |
|
2009 |
|
169,031 |
| Navios Pollux |
|
Capesize |
|
2009 |
|
180,727 |
| Navios Fulvia |
|
Capesize |
|
2010 |
|
179,263 |
| Navios Melodia |
|
Capesize |
|
2010 |
|
179,132 |
| Navios Luz |
|
Capesize |
|
2010 |
|
179,144 |
| Navios Buena Ventura |
|
Capesize |
|
2010 |
|
179,259 |
| Navios Joy |
|
Capesize |
|
2013 |
|
181,389 |
| Navios Beaufiks |
|
Capesize |
|
2004 |
|
180,310 |
| Navios Ace |
|
Capesize |
|
2011 |
|
179,016 |
| Navios Sol |
|
Capesize |
|
2009 |
|
180,274 |
| Navios Symphony |
|
Capesize |
|
2010 |
|
178,132 |
| Navios Aster |
|
Capesize |
|
2010 |
|
179,314 |
| Navios Mars |
|
Capesize |
|
2016 |
|
181,259 |
|
Bareboat Chartered-in vessel |
|
Type |
|
Built |
|
Capacity(DWT) |
|
Purchase Option |
| Navios Libra |
|
Panamax |
|
2019 |
|
82,011 |
|
Yes |
|
Owned Containerships |
|
Type |
|
Built |
|
Capacity(TEU) |
| Hyundai Hongkong |
|
Containership |
|
2006 |
|
6,800 |
| Hyundai Singapore |
|
Containership |
|
2006 |
|
6,800 |
| Hyundai Tokyo |
|
Containership |
|
2006 |
|
6,800 |
| Hyundai Shanghai |
|
Containership |
|
2006 |
|
6,800 |
| Hyundai Busan |
|
Containership |
|
2006 |
|
6,800 |
| Castor N |
|
Containership |
|
2007 |
|
3,091 |
| Esperanza N |
|
Containership |
|
2008 |
|
2,007 |
| Harmony N |
|
Containership |
|
2006 |
|
2,824 |
| Protostar N |
|
Containership |
|
2007 |
|
2,741 |
| Solar N |
|
Containership |
|
2006 |
|
3,398 |
|
Bareboat Chartered-in vessels to be delivered |
|
Type |
|
Built |
|
Capacity(DWT) |
|
Purchase Option |
| TBN1 |
|
Panamax |
|
2021 |
|
81,000 |
|
Yes |
| TBN2 |
|
Panamax |
|
2021 |
|
81,000 |
|
Yes |
EXHIBIT 3
Disclosure of Non-GAAP Financial
Measures
1. EBITDA and Adjusted
EBITDA
EBITDA represents net loss attributable to
Navios Partners’ unitholders before interest and finance costs,
before depreciation and amortization (including intangible
accelerated amortization) and income taxes. Adjusted EBITDA
represents EBITDA before impairment losses. Navios Partners uses
Adjusted EBITDA as a liquidity measure and reconcile EBITDA and
Adjusted EBITDA to net cash provided by operating activities, the
most comparable U.S. GAAP liquidity measure. EBITDA in this
document is calculated as follows: net cash provided by operating
activities adding back, when applicable and as the case may be, the
effect of: (i) net decrease/ (increase) in operating assets;
(ii) net (decrease)/ increase in operating liabilities;
(iii) net interest cost; (iv) amortization and write-off
of deferred financing cost; (v) equity in net earnings of
affiliated companies; (vi) impairment charges;
(vii) non-cash accrued interest income and amortization of
deferred revenue; (viii) equity compensation expense; (ix)
non-cash accrued interest income from receivable from affiliates;
and (x) amortization of operating lease right-of-use asset. Navios
Partners believes that EBITDA and Adjusted EBITDA are each the
basis upon which liquidity can be assessed and presents useful
information to investors regarding Navios Partners’ ability to
service and/or incur indebtedness, pay capital expenditures, meet
working capital requirements and make cash distributions. Navios
Partners also believes that EBITDA and Adjusted EBITDA are used:
(i) by potential lenders to evaluate potential transactions;
(ii) to evaluate and price potential acquisition candidates;
and (iii) by securities analysts, investors and other
interested parties in the evaluation of companies in our
industry.
Adjusted EBITDA represents EBITDA excluding
certain items, as described under “Earnings Highlights.”
EBITDA and Adjusted EBITDA have limitations as
an analytical tool, and should not be considered in isolation or as
a substitute for the analysis of Navios Partners’ results as
reported under U.S. GAAP. Some of these limitations are:
(i) EBITDA and Adjusted EBITDA do not reflect changes in, or
cash requirements for, working capital needs; and
(ii) although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future. EBITDA and Adjusted EBITDA do not reflect
any cash requirements for such capital expenditures. Because of
these limitations, EBITDA and Adjusted EBITDA should not be
considered as a principal indicator of Navios Partners’
performance. Furthermore, our calculation of EBITDA and Adjusted
EBITDA may not be comparable to that reported by other companies
due to differences in methods of calculation.
2. Operating Surplus
Operating Surplus represents net income adjusted
for depreciation and amortization expense, non-cash interest
expense, non-cash interest income, estimated maintenance and
replacement capital expenditures and one-off items. Maintenance and
replacement capital expenditures are those capital expenditures
required to maintain over the long term the operating capacity of,
or the revenue generated by, Navios Partners’ capital assets.
Operating Surplus is a quantitative measure used
in the publicly-traded partnership investment community to assist
in evaluating a partnership’s ability to make quarterly cash
distributions. Operating Surplus is not required by accounting
principles generally accepted in the United States and should not
be considered a substitute for net income, cash flow from operating
activities and other operations or cash flow statement data
prepared in accordance with accounting principles generally
accepted in the United States or as a measure of profitability or
liquidity.
3. Available Cash
Available Cash generally means for each fiscal
quarter, all cash on hand at the end of the quarter:
- less the amount of cash reserves established by the Board of
Directors to:
- provide for the proper conduct of Navios Partners’ business
(including reserve for maintenance and replacement capital
expenditures);
- comply with applicable law, any of Navios Partners’ debt
instruments, or other agreements; or
- provide funds for distributions to the unitholders and to the
general partner for any one or more of the next four quarters;
- plus all cash on hand on the date of determination of available
cash for the quarter resulting from working capital borrowings made
after the end of the quarter. Working capital borrowings are
generally borrowings that are made under any revolving credit or
similar agreement used solely for working capital purposes or to
pay distributions to partners.
Available Cash is a quantitative measure used in the
publicly-traded partnership investment community to assist in
evaluating a partnership’s ability to make quarterly cash
distributions. Available cash is not required by accounting
principles generally accepted in the United States and should not
be considered a substitute for net income, cash flow from operating
activities and other operations or cash flow statement data
prepared in accordance with accounting principles generally
accepted in the United States or as a measure of profitability or
liquidity.
4. Reconciliation of
Non-GAAP Financial Measures
| |
|
Three MonthPeriod EndedMarch
31, 2020($
‘000)(unaudited) |
|
Three MonthPeriod EndedMarch
31, 2019($
‘000)(unaudited) |
| Net cash
provided by operating activities |
|
$ |
20,937 |
|
|
$ |
10,483 |
|
| Net increase in operating
assets |
|
|
(8,246 |
) |
|
|
(1,636 |
) |
| Net (increase)/ decrease in
operating liabilities |
|
|
(1,442 |
) |
|
|
2,939 |
|
| Net interest cost |
|
|
6,749 |
|
|
|
9,771 |
|
| Amortization and write-off of deferred financing cost |
|
|
(519 |
) |
|
|
(1,663 |
) |
| Amortization of operating lease right-of-use asset |
|
|
(225 |
) |
|
|
— |
|
| Non cash accrued interest income
and amortization of deferred revenue |
|
|
394 |
|
|
|
3,171 |
|
| Equity compensation expense |
|
|
(245 |
) |
|
|
(494 |
) |
| Vessels impairment loss |
|
|
— |
|
|
|
(7,345 |
) |
| Impairment of receivable in
affiliated company |
|
|
(6,900 |
) |
|
|
— |
|
| Non cash accrued interest income
from receivable from affiliates |
|
|
— |
|
|
|
70 |
|
| Equity in earnings of affiliates,
net of dividends received |
|
|
1,678 |
|
|
|
17 |
|
|
EBITDA(1) |
|
$ |
12,181 |
|
|
$ |
15,313 |
|
| Vessels impairment loss |
|
|
— |
|
|
|
7,345 |
|
| Impairment of receivable in
affiliated company |
|
|
6,900 |
|
|
|
— |
|
| Adjusted
EBITDA |
|
$ |
19,081 |
|
|
$ |
22,658 |
|
| Cash interest income |
|
|
93 |
|
|
|
216 |
|
| Cash interest paid |
|
|
(6,153 |
) |
|
|
(9,698 |
) |
| Maintenance and replacement
capital expenditures |
|
|
(8,590 |
) |
|
|
(7,474 |
) |
| Operating
Surplus |
|
$ |
4,431 |
|
|
$ |
5,702 |
|
| Cash reserves |
|
|
(1,066 |
) |
|
|
(2,338 |
) |
| Available cash for
distribution |
|
$ |
3,365 |
|
|
$ |
3,364 |
|
(1)
| |
|
|
|
|
Three Month Period Ended March 31, 2020
(unaudited) |
Three Month Period Ended March 31, 2019
(unaudited) |
|
Net cash provided by operating activities |
$ |
20,937 |
|
$ |
10,483 |
|
| Net cash used in investing
activities |
$ |
(3,337 |
) |
$ |
(5,375 |
) |
| Net cash used in financing
activities |
$ |
(16,855 |
) |
$ |
(16,211 |
) |
|
|
|
|
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