ATHENS, Greece, Nov. 14, 2018 /PRNewswire/ -- Danaos
Corporation ("Danaos") (NYSE: DAC), one of the world's largest
independent owners of containerships, today reported unaudited
results for the period ended September 30,
2018.
Highlights for the Third Quarter and Nine Months Ended
September 30, 2018:
- On August 10, 2018, we
consummated the agreement with certain of our lenders to refinance
approximately $2.2 billion of our
debt maturing on December 31, 2018,
reducing our debt by approximately $551
million, resetting financial and other covenants, modifying
interest rates and amortization profiles and extending debt
maturities by approximately five years to December 31, 2023. In connection with this
refinancing, we issued approximately 99.3 million shares of common
stock to certain of our lenders. See "Debt Refinancing".
- Adjusted net income1 of $37.5 million, or $0.23 per share, for the three months ended
September 30, 2018 compared to
$30.1 million, or $0.27 per share, for the three months ended
September 30, 2017, an increase of
24.6%. Adjusted net income1 of $94.6 million, or $0.74 per share, for the nine months ended
September 30, 2018 compared to
$83.7 million, or $0.76 per share, for the nine months ended
September 30, 2017, an increase of
13.0%.
- Operating revenues of $117.8
million for the three months ended September 30, 2018 compared to $113.6 million for the three months ended
September 30, 2017, an increase of
3.7%. Operating revenues of $343.1
million for the nine months ended September 30, 2018 compared to $337.6 million for the nine months ended
September 30, 2017, an increase of
1.6%.
- Adjusted EBITDA1 of $82.7 million for the three months ended
September 30, 2018 compared to
$79.8 million for the three months
ended September 30, 2017, an increase
of 3.6%. Adjusted EBITDA1 of $237.7 million for the nine months ended
September 30, 2018 compared to
$230.4 million for the nine months
ended September 30, 2017, an increase
of 3.2%.
- Total contracted operating revenues were $1.7 billion as of September 30, 2018, with charters extending
through 2028 and remaining average contracted charter duration of
5.1 years, weighted by aggregate contracted charter hire.
- Charter coverage of 90% for the next 12 months based on
current operating revenues and 78% in terms of contracted operating
days.
|
Three and Nine
Months Ended September 30, 2018
|
|
Financial Summary
- Unaudited
|
|
(Expressed
in thousands of United States dollars, except per share
amounts)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$117,781
|
|
$113,588
|
|
$343,101
|
|
$337,563
|
|
Net income
|
$127,217
|
|
$22,427
|
|
$148,047
|
|
$61,099
|
|
Adjusted net
income1
|
$37,452
|
|
$30,091
|
|
$94,581
|
|
$83,650
|
|
Earnings per share,
diluted
|
$0.77
|
|
$0.20
|
|
$1.15
|
|
$0.56
|
|
Adjusted earnings per
share, diluted1
|
$0.23
|
|
$0.27
|
|
$0.74
|
|
$0.76
|
|
Diluted weighted
average number of shares (in thousands)
|
165,597
|
|
109,825
|
|
128,603
|
|
109,825
|
|
Adjusted
EBITDA1
|
$82,745
|
|
$79,753
|
|
$237,677
|
|
$230,362
|
|
____________________________
|
|
1 Adjusted
net income, adjusted earnings per share and adjusted EBITDA are
non-GAAP measures. Refer to the reconciliation of net income to
adjusted net income and net income to adjusted EBITDA.
|
Danaos' CEO Dr. John Coustas
commented:
"Danaos completed a very significant refinancing transaction in
the 3rd quarter of 2018 that reduced our debt by
$551 million, reset financial
covenants and extended debt maturities to the end of 2023 on the
back of a sustainable new amortization profile. This transaction
has strengthened the Company's growth prospects over the next five
years by removing all balloon payments and maturities of existing
debt during that period.
Adjusted net income for the 3rd quarter of 2018 was
$37.5 million or 23 cents per share, $7.4
million or 24.6% higher when compared to the 3rd
quarter of 2017. This improvement was primarily the result of a
$4.2 million increase in operating
revenues due to improved re-chartering rates. Adjusted EBITDA for
the 3rd quarter of 2018 was $82.7
million, $2.9 million or 3.6%
higher when compared to the 3rd quarter of 2017.
Since our last earnings report, the charter market has remained
consistently soft. Uncertainty about the potential impact of
ongoing trade tensions, combined with higher newbuilding prices due
to increasing steel prices and wages in China have discouraged new ordering except
some feeder projects by some Asian liners. This is positive
for the medium term market outlook. Instead, market participants
have been focusing on the 2020 regulations and in particular
investments on scrubbers for vessels from 6,500 TEU upwards.
Danaos has been actively focused on positioning our fleet ahead
of the implementation of the new regulations. Thus far, we have
committed to install exhaust cleaning systems, or scrubbers, on six
vessels, two of which are owned by our joint venture Gemini
Shipholdings Corporation. These vessels have been chartered out for
periods of at least three years in duration and since these are all
vessels that are currently on short term charters, these
transactions significantly improve income visibility. Additionally,
the charter rate fixtures provide a full payback of the investment
over three years, and we also benefit from the enhancement in the
value of the upgraded underlying assets. We are also currently in
discussions to install scrubbers on a further five vessels.
We maintain our high charter contract coverage of 90% in terms
of operating revenues and 78% in terms of operating days over the
next 12 months. This insulates us from the near-term soft charter
market. Through the six charters described above on vessels
with scrubbers and an additional two fixtures that have been
secured for durations of three years, our charter coverage has
improved, and our contracted revenue has increased by more than
$160 million.
Danaos continues to be a leader in the container shipping
industry on the back of a solid track record of operational
excellence and technological innovation that allows us to
continually deliver high quality service to our customers. At the
same time, the recently concluded re-financing transaction further
enhances our ability to pursue growth opportunities and deliver
value to our shareholders."
Three months ended September 30,
2018 compared to the three months ended September 30, 2017
During the three months ended September
30, 2018 and September 30,
2017, Danaos had an average of 55 containerships. Our fleet
utilization for the three months ended September 30, 2018 was 97.4% compared to 97.0%
for the three months ended September 30,
2017.
Our adjusted net income amounted to $37.5
million, or $0.23 per share,
for the three months ended September 30,
2018 compared to $30.1
million, or $0.27 per share,
for the three months ended September 30,
2017. We have adjusted our net income in the three months
ended September 30, 2018 for the gain
on debt extinguishment of $116.4
million, refinancing related professional fees of
$21.8 million and a non-cash fees
amortization charge and accrued finance fees of $4.8 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $7.4 million in
adjusted net income for the three months ended September 30, 2018 compared to the three months
ended September 30, 2017 is
attributable mainly to a $4.2 million
increase in operating revenues, a $3.4
million decrease in net finance expenses and a $0.4 million operating performance improvement on
equity investments, which were partially offset by $0.6 million increase in total operating
expenses.
On a non-adjusted basis, our net income amounted to $127.2 million, or $0.77 per share, for the three months ended
September 30, 2018 compared to net
income of $22.4 million, or
$0.20 per share, for the three months
ended September 30, 2017.
Operating Revenues
Operating revenues increased by
3.7%, or $4.2 million, to
$117.8 million in the three months
ended September 30, 2018 from
$113.6 million in the three months
ended September 30, 2017.
Operating revenues for the three months ended September 30, 2018 reflect:
- $6.3 million increase in revenues
in the three months ended September 30,
2018 compared to the three months ended September 30, 2017 due to the re-chartering of
certain of our vessels at higher rates.
- $2.1 million decrease in revenues
due to lower fleet utilization of our vessels in the three months
ended September 30, 2018 compared to
the three months ended September 30,
2017.
Vessel Operating Expenses
Vessel operating expenses
decreased by 2.3%, or $0.6 million,
to $25.5 million in the three
months ended September 30, 2018 from
$26.1 million in the three
months ended September 30, 2017. The
average daily operating cost per vessel for vessels on time charter
was $5,427 per day for the three
months ended September 30, 2018
compared to $5,569 per day for the
three months ended September 30,
2017. Management believes that our daily operating cost
ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 7.5%,
or $2.2 million, to $27.0 million in the three months ended
September 30, 2018 from $29.2 million in the three months ended
September 30, 2017.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs increased by $1.0
million, to $2.6 million in
the three months ended September 30,
2018 from $1.6 million in the
three months ended September 30,
2017. The increase was mainly due to the increased number of
vessels dry-docked over the last nine months.
General and Administrative Expenses
General and
administrative expenses increased by $2.0
million to $7.4 million in the
three months ended September 30,
2018, from $5.4 million in the
three months ended September 30,
2017. The increase was mainly due to increased remuneration
costs and professional fees.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
$0.3 million to $2.9 million in the three months ended
September 30, 2018, from $2.6 million in the three months ended
September 30, 2017.
Interest Expense and Interest Income
Interest expense
decreased by 6.8%, or $1.5 million,
to $20.5 million in the three months
ended September 30, 2018 from
$22.0 million in the three months
ended September 30, 2017. The
decrease in interest expense is attributed to:
(i) a $6.4 million decrease in
interest expense on two of our facilities for which we have
recognized an interest expense accrual of approximately
$250 million during the quarter ended
September 30, 2018. This interest
expense accrual has been classified in our income statement under
"Gain on debt extinguishment" and on our balance sheet under
"Accumulated accrued interest" and represents future interest
expense for the relevant facilities that has been accrued in
advance as a result of the application of Troubled Debt
Restructuring ("TDR") accounting in connection with our debt
refinancing.
(ii) a $3.2 million increase in
interest expense due to an increase in debt service cost of
approximately 1.35%, partially offset by a $435 million decrease in our average debt, to
$1,950.1 million in the three months
ended September 30, 2018, compared to
$2,385.8 million in the three months
ended September 30, 2017.
(iii) a $1.7 million increase in
the amortization of deferred finance costs related to our debt
refinancing.
As of September 30, 2018, the debt
outstanding, gross of deferred finance costs, was $1,694.5 million compared to $2,381.7 million as of September 30, 2017.
Interest income increased by $0.1
million to $1.5 million in the
three months ended September 30, 2018
compared to $1.4 million in the three
months ended September 30, 2017.
Other finance costs, net
Other finance costs, net
decreased by $0.3 million to
$0.7 million in the three months
ended September 30, 2018 compared to
$1.0 million in the three months
ended September 30, 2017 mainly due
to decreased exit fees expenses.
Equity income on investments
Equity income on
investments amounted to $0.7 million
in the three months ended September 30,
2018 compared to $0.3 million
in the three months ended September 30,
2017 and relates to the improved operating performance of
Gemini Shipholdings Corporation ("Gemini"), in which the Company
has a 49% shareholding interest.
Gain on debt extinguishment
The gain on debt
extinguishment of $116.4 million in
the three months ended September 30,
2018 relates to our debt refinancing described below and
consists of debt principal reduction net of refinancing related
fees.
Loss on derivatives
Amortization of deferred realized
losses on interest rate swaps remained stable at $0.9 million in each of the three months ended
September 30, 2018 and 2017.
Other income/(expenses), net
Other income/(expenses),
net was $21.6 million in expenses in
the three months ended September 30,
2018 compared to $3.9 million
in expenses in the three months ended September 30, 2017 mainly due to the increase in
refinancing-related professional fees.
Adjusted EBITDA
Adjusted EBITDA increased by 3.6%, or
$2.9 million, to $82.7 million in the three months ended
September 30, 2018 from $79.8 million in the three months ended
September 30, 2017. As outlined
above, this increase is mainly attributable to a $4.2 million increase in operating revenues and a
$0.4 million operating performance
improvement on our equity investments, which were partially offset
by a $1.7 million increase in total
operating expenses. Adjusted EBITDA for the three months ended
September 30, 2018 is adjusted for a
gain on debt extinguishment of $116.4
million, refinancing-related professional fees of
$21.8 million and stock based
compensation of $0.2 million. Tables
reconciling Adjusted EBITDA to Net Income can be found at the end
of this earnings release.
Nine months ended September 30,
2018 compared to the nine months ended September 30, 2017
During the nine months ended September
30, 2018 and September 30,
2017, Danaos had an average of 55 containerships. Our fleet
utilization for the nine months ended September 30, 2018 was 96.4% compared to 95.9%
for the nine months ended September 30,
2017. The fleet utilization excluding the off charter days
of the vessels that were previously chartered to Hanjin was 98.0%
in the nine months ended September 30,
2017.
Our adjusted net income amounted to $94.6
million, or $0.74 per share,
for the nine months ended September 30,
2018 compared to $83.7
million, or $0.76 per share,
for the nine months ended September 30,
2017. We have adjusted our net income in the nine months
ended September 30, 2018 for the gain
on debt extinguishment of $116.4
million, refinancing related professional fees of
$51.5 million and a non-cash fees
amortization charge and accrued finance fees of $11.4 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The increase of $10.9 million in
adjusted net income for the nine months ended September 30, 2018 compared to the nine months
ended September 30, 2017 is
attributable to a $5.5 million
increase in operating revenues, a $5.3
million decrease in total operating expenses, a $0.7 million increase in other income and a
$0.3 million increase in the
operating performance of our equity investment in Gemini, which
were partially offset by $0.9 million
increase in net finance expenses.
On a non-adjusted basis, our net income amounted to $148.0 million, or $1.15 per share, for the nine months ended
September 30, 2018 compared to net
income of $61.1 million, or
$0.56 per share, for the nine months
ended September 30, 2017.
Operating Revenues
Operating revenues increased by
1.6%, or $5.5 million, to
$343.1 million in the nine months
ended September 30, 2018 from
$337.6 million in the nine months
ended September 30, 2017.
Operating revenues for the nine months ended September 30, 2018 reflect:
- $12.5 million increase in
revenues in the nine months ended September
30, 2018 compared to the nine months ended September 30, 2017 due to the re-chartering of
certain of our vessels at higher rates.
- $7.0 million decrease in revenues
due to lower fleet utilization of our vessels in the nine months
ended September 30, 2018 compared to
the nine months ended September 30,
2017 (other than three vessels previously chartered to
Hanjin which were less utilized in the nine months ended
September 30, 2017).
Vessel Operating Expenses
Vessel operating expenses
decreased by 2.1%, or $1.7 million,
to $79.1 million in the nine
months ended September 30, 2018 from
$80.8 million in the nine months
ended September 30, 2017. The average
daily operating cost per vessel for vessels on time charter was
$5,678 per day for the nine months
ended September 30, 2018 compared to
$5,687 per day for the nine months
ended September 30, 2017. Management
believes that our daily operating cost ranks as one of the most
competitive in the industry.
Depreciation & Amortization
Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 7.4%,
or $6.5 million, to $80.8 million in the nine months ended
September 30, 2018 from $87.3 million in the nine months ended
September 30, 2017.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs increased by $1.9
million, to $6.9 million in
the nine months ended September 30,
2018 from $5.0 million in the
nine months ended September 30, 2017.
The increase was mainly due to the increased number of vessels
dry-docked over the last nine months.
General and Administrative Expenses
General and
administrative expenses increased by $1.5
million, to $18.4 million in
the nine months ended September 30,
2018, from $16.9 million in
the nine months ended September 30,
2017. The increase was mainly due to increased remuneration
costs and professional fees.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by
$0.4 million, to $9.2 million in the nine months ended
September 30, 2018 from $9.6 million in the nine months ended
September 30, 2017.
Interest Expense and Interest Income
Interest expense
increased by 3.3%, or $2.1 million,
to $66.4 million in the nine months
ended September 30, 2018 from
$64.3 million in the nine months
ended September 30, 2017. The
decrease in interest expense is attributed to:
(i) a $6.4 million decrease in
interest expense on two of our facilities for which we have
recognized an interest expense accrual of approximately
$250 million during the quarter ended
September 30, 2018. This interest
expense accrual has been classified in our income statement under
"Gain on debt extinguishment" and on our balance sheet under
"Accumulated accrued interest" and represents future interest
expense for the relevant facilities that has been accrued in
advance as a result of the application of TDR accounting in
connection with our debt refinancing.
(ii) a $7.4 million increase in
interest expense due to an increase in debt service cost of
approximately 0.94%, partially offset by a $257.6 million decrease in our average debt, to
$2,174.5 million in the three months
ended September 30, 2018, compared to
$2,432.1 million in the three months
ended September 30, 2017.
(iii) a $1.1 million increase in
the amortization of deferred finance costs related to our debt
refinancing.
As of September 30, 2018, the debt
outstanding, gross of deferred finance costs, was $1,694.5 million compared to $2,381.7 million as of September 30, 2017.
Interest income increased by $0.1
million to $4.3 million in the
nine months ended September 30, 2018
compared to $4.2 million in the nine
months ended September 30, 2017.
Other finance costs, net
Other finance costs, net
decreased by $0.5 million, to
$2.6 million in the nine months ended
September 30, 2018 from $3.1 million in the nine months ended
September 30, 2017 mainly due to
decreased exit fees expenses.
Equity income on investments
Equity income on
investments amounted to $0.9 million
in the nine months ended September 30,
2018 compared to $0.6 million
in the nine months ended September 30,
2017 and relates to the improved operating performance of
Gemini, in which the Company has a 49% shareholding interest.
Gain on debt extinguishment
The gain on debt
extinguishment of $116.4 million in
the nine months ended September 30,
2018 relates to our debt refinancing described below and
consists of debt principal reduction net of refinancing related
fees.
Loss on derivatives
Amortization of deferred realized
losses on interest rate swaps remained stable at $2.8 million in each of the nine months ended
September 30, 2018 and 2017.
Other income/(expenses), net
Other income/(expenses),
net was $50.6 million in expenses in
the nine months ended September 30,
2018 compared to $11.5 million
in expenses in the nine months ended September 30, 2017 mainly due to a $42.2 million increase in refinancing-related
professional fees, which were partially offset by a $0.7 million increase in other income and a
$2.4 million realized loss on sale of
HMM securities in the nine months ended September 30, 2017 that did not recur in the 2018
period.
Adjusted EBITDA
Adjusted EBITDA increased by 3.2%, or
$7.3 million, to $237.7 million in the nine months ended
September 30, 2018 from $230.4 million in the nine months ended
September 30, 2017. As outlined
above, this increase is attributable to a $5.5 million increase in operating revenues, a
$0.8 million decrease in total
operating expenses, a $0.7 million
increase in other income and a $0.3
million increase in operating performance on our equity
investments in the nine months ended September 30, 2018 compared to the nine months
ended September 30, 2017. Adjusted
EBITDA for the nine months ended September
30, 2018 is adjusted for a gain on debt extinguishment of
$116.4 million, refinancing-related
professional fees of $51.5 million
and stock based compensation of $0.2
million. Tables reconciling Adjusted EBITDA to Net Income
can be found at the end of this earnings release.
Debt Refinancing
On August 10,
2018, we consummated the agreement reached with certain of
our lenders on June 19, 2018 for the
refinancing of approximately $2.2
billion of our debt maturing on December 31, 2018, reducing our debt by
approximately $551 million. This
agreement significantly strengthened our capital structure and
financial position through this significant debt reduction,
resetting financial and certain other covenants in our credit
facilities, modifying interest rates and amortization profiles and
extending debt maturities by approximately five years to
December 31, 2023. In connection with
this debt refinancing, we issued 99,342,271 new shares of Danaos
common stock to certain of our lenders, which represented 47.5% of
our outstanding common stock after giving effect to this issuance
and diluting existing shareholders ratably. For additional
information regarding the debt refinancing, see the Company's
Reports on Form 6-K filed with the SEC on June 25, 2018 and August
14, 2018.
Conference Call and Webcast
On Thursday, November 15, 2018 at 9:00 A.M. ET, the Company's management will host
a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until November 22, 2018 by dialing 1
877 344 7529 (US Toll Free Dial In) or +44 (0) 2036 088 021
(Standard International Dial In) and using 10126336# as the access
code.
Audio Webcast
There will also be a live and then
archived webcast of the conference call, including a slide
presentation providing additional company information, through the
Danaos website (www.danaos.com). Participants of the live webcast
should register on the website approximately 10 minutes prior to
the start of the webcast.
About Danaos Corporation
Danaos Corporation is one of
the largest independent owners of modern, large-size
containerships. Our current fleet of 59 containerships aggregating
351,614 TEUs, including four vessels owned by Gemini Shipholdings
Corporation, a joint venture, ranks Danaos among the largest
containership charter owners in the world based on total TEU
capacity. Our fleet is chartered to many of the world's largest
liner companies on fixed-rate charters. Our long track record of
success is predicated on our efficient and rigorous operational
standards and environmental controls. Danaos Corporation's shares
trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this
release may constitute forward-looking statements within the
meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including statements about the expected benefits of
the refinancing and other statements that are forward looking.
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. Although Danaos Corporation believes 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, Danaos Corporation 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 effects of the refinancing
transactions; Danaos' ability to achieve the expected benefits of
the refinancing and comply with the terms of its new credit
facilities and other agreements entered into in connection with the
refinancing; the strength of world economies and currencies,
general market conditions, including changes in charter hire rates
and vessel values, charter counterparty performance, changes in
demand that may affect attitudes of time charterers to scheduled
and unscheduled dry-docking, changes in Danaos Corporation's
operating expenses, including bunker prices, dry-docking and
insurance costs, ability to obtain financing and comply with
covenants in our financing arrangements, actions taken by
regulatory authorities, potential liability from pending or future
litigation, 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 Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 111 unscheduled off-hire days in the three months
ended September 30, 2018. The
following table summarizes vessel utilization and the impact of the
off-hire days on the Company's revenue.
|
|
|
|
|
|
|
|
|
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
|
|
2018
|
2018
|
|
2018
|
|
Total
|
|
Ownership
Days
|
4,950
|
|
5,005
|
|
5,060
|
|
15,015
|
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(125)
|
|
(111)
|
|
(22)
|
|
(258)
|
|
Other Off-hire
Days
|
(91)
|
|
(84)
|
|
(111)
|
|
(286)
|
|
Operating
Days
|
4,734
|
|
4,810
|
|
4,927
|
|
14,471
|
|
Vessel
Utilization
|
95.6%
|
|
96.1%
|
|
97.4%
|
|
96.4%
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$111,854
|
|
$113,466
|
|
$117,781
|
|
$343,101
|
|
Average Gross
Daily Charter Rate
|
$23,628
|
|
$23,590
|
|
$23,905
|
|
$23,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
|
|
2017
|
2017
|
|
2017
|
|
Total
|
|
Ownership
Days
|
4,950
|
|
5,005
|
|
5,060
|
|
15,015
|
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(15)
|
|
(6)
|
|
(15)
|
|
(36)
|
|
Other Off-hire
Days
|
(347)
|
|
(99)
|
|
(139)
|
|
(585)
|
|
Operating
Days
|
4,588
|
|
4,900
|
|
4,906
|
|
14,394
|
|
Vessel
Utilization
|
92.7%
|
|
97.9%
|
|
97.0%
|
|
95.9%
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$110,087
|
|
$113,888
|
|
$113,588
|
|
$337,563
|
|
Average Gross
Daily Charter Rate
|
$23,995
|
|
$23,242
|
|
$23,153
|
|
$23,452
|
Fleet List
The following table describes in detail our
fleet deployment profile as of November 13,
2018:
|
Vessel
Name
|
Vessel
Size
(TEU)
|
|
Year
Built
|
|
Expiration of
Charter(1)
|
|
Containerships
|
|
|
|
|
|
|
|
|
|
|
|
|
MSC
Ambition
|
13,100
|
|
2012
|
|
June 2024
|
|
Maersk
Exeter
|
13,100
|
|
2012
|
|
June 2024
|
|
Maersk
Enping
|
13,100
|
|
2012
|
|
May 2024
|
|
Hyundai
Respect
|
13,100
|
|
2012
|
|
March 2024
|
|
Hyundai
Honour
|
13,100
|
|
2012
|
|
February
2024
|
|
Express
Rome
|
10,100
|
|
2011
|
|
February
2022
|
|
Express
Berlin
|
10,100
|
|
2011
|
|
September
2019
|
|
Express
Athens
|
10,100
|
|
2011
|
|
February
2022
|
|
Le Havre (ex CSCL
Le Havre)
|
9,580
|
|
2006
|
|
November
2022
|
|
Pusan C (ex CSCL
Pusan)
|
9,580
|
|
2006
|
|
November
2022
|
|
CMA CGM
Melisande
|
8,530
|
|
2012
|
|
November 2023
|
|
CMA CGM
Attila
|
8,530
|
|
2011
|
|
April 2023
|
|
CMA CGM
Tancredi
|
8,530
|
|
2011
|
|
May 2023
|
|
CMA CGM
Bianca
|
8,530
|
|
2011
|
|
July 2023
|
|
CMA CGM
Samson
|
8,530
|
|
2011
|
|
September
2023
|
|
America (ex CSCL
America)
|
8,468
|
|
2004
|
|
November
2022
|
|
Europe
|
8,468
|
|
2004
|
|
November
2022
|
|
CMA CGM
Moliere
|
6,500
|
|
2009
|
|
August
2021
|
|
CMA CGM
Musset
|
6,500
|
|
2010
|
|
August
2022
|
|
CMA CGM
Nerval
|
6,500
|
|
2010
|
|
October
2022
|
|
CMA CGM
Rabelais
|
6,500
|
|
2010
|
|
December
2022
|
|
CMA CGM
Racine
|
6,500
|
|
2010
|
|
January
2023
|
|
YM
Mandate
|
6,500
|
|
2010
|
|
January
2028
|
|
YM
Maturity
|
6,500
|
|
2010
|
|
April 2028
|
|
Performance
|
6,402
|
|
2002
|
|
May 2019
|
|
Dimitra C (ex
Priority)
|
6,402
|
|
2002
|
|
December
2018
|
|
YM
Seattle
|
4,253
|
|
2007
|
|
July 2019
|
|
YM
Vancouver
|
4,253
|
|
2007
|
|
September
2019
|
|
Derby
D
|
4,253
|
|
2004
|
|
March 2019
|
|
ANL Tongala (ex
Deva)
|
4,253
|
|
2004
|
|
March 2019
|
|
ZIM Rio
Grande
|
4,253
|
|
2008
|
|
May 2020
|
|
ZIM Sao
Paolo
|
4,253
|
|
2008
|
|
August
2020
|
|
ZIM
Kingston
|
4,253
|
|
2008
|
|
September
2020
|
|
ZIM
Monaco
|
4,253
|
|
2009
|
|
November
2020
|
|
ZIM
Dalian
|
4,253
|
|
2009
|
|
February 2021
|
|
ZIM
Luanda
|
4,253
|
|
2009
|
|
May 2021
|
|
Dimitris
C
|
3,430
|
|
2001
|
|
June 2019
|
|
Express Black
Sea
|
3,400
|
|
2011
|
|
November
2018
|
|
Express
Spain
|
3,400
|
|
2011
|
|
January
2019
|
|
Express
Argentina
|
3,400
|
|
2010
|
|
May 2019
|
|
Express
Brazil
|
3,400
|
|
2010
|
|
July 2019
|
|
Express
France
|
3,400
|
|
2010
|
|
September
2019
|
|
Singapore
|
3,314
|
|
2004
|
|
October
2019
|
|
Colombo
|
3,314
|
|
2004
|
|
March 2019
|
|
MSC
Zebra
|
2,602
|
|
2001
|
|
September
2020
|
|
Amalia
C
|
2,452
|
|
1998
|
|
August
2019
|
|
Danae
C
|
2,524
|
|
2001
|
|
January
2020
|
|
Advance
|
2,200
|
|
1997
|
|
December
2018
|
|
Future
|
2,200
|
|
1997
|
|
December
2018
|
|
Sprinter
|
2,200
|
|
1997
|
|
February
2019
|
|
Stride
|
2,200
|
|
1997
|
|
February
2019
|
|
Progress C (ex
Hyundai Progress)
|
2,200
|
|
1998
|
|
February
2019
|
|
Bridge
|
2,200
|
|
1998
|
|
February
2019
|
|
Highway
|
2,200
|
|
1998
|
|
January
2019
|
|
Vladivostok
|
2,200
|
|
1997
|
|
March 2019
|
|
|
|
|
|
|
|
Catherine C (ex
NYK Lodestar)(2)
|
6,422
|
|
2001
|
|
November
2022
|
|
NYK
Leo(2)
|
6,422
|
|
2002
|
|
November
2022
|
|
Suez
Canal(2)
|
5,610
|
|
2002
|
|
February
2019
|
|
Genoaľ2)
|
5,544
|
|
2002
|
|
July 2019
|
|
|
|
|
|
|
|
|
|
(1)
|
Earliest date
charters could expire. Some charters include options to extend
their terms.
|
|
(2)
|
Vessels acquired by
Gemini Shipholdings Corporation, in which Danaos holds a 49% equity
interest.
|
|
DANAOS
CORPORATION
|
|
Condensed
Consolidated Statements of Income-Unaudited
|
|
(Expressed in
thousands of United States dollars, except per share
amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
OPERATING
REVENUES
|
$117,781
|
|
$113,588
|
|
$343,101
|
|
$337,563
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
(25,461)
|
|
(26,132)
|
|
(79,052)
|
|
(80,803)
|
|
Depreciation &
amortization
|
(29,631)
|
|
(30,855)
|
|
(87,640)
|
|
(92,304)
|
|
General &
administrative
|
(7,431)
|
|
(5,388)
|
|
(18,390)
|
|
(16,857)
|
|
Other operating
expenses
|
(2,883)
|
|
(2,570)
|
|
(9,230)
|
|
(9,625)
|
|
Income From
Operations
|
52,375
|
|
48,643
|
|
148,789
|
|
137,974
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
|
|
|
|
Interest
income
|
1,505
|
|
1,386
|
|
4,298
|
|
4,201
|
|
Interest
expense
|
(20,509)
|
|
(22,016)
|
|
(66,378)
|
|
(64,329)
|
|
Other finance
expenses
|
(679)
|
|
(1,042)
|
|
(2,611)
|
|
(3,129)
|
|
Equity income on
investments
|
728
|
|
278
|
|
912
|
|
633
|
|
Gain on debt
extinguishment
|
116,365
|
|
-
|
|
116,365
|
|
-
|
|
Other
income/(expenses), net
|
(21,637)
|
|
(3,891)
|
|
(50,565)
|
|
(11,488)
|
|
Realized loss on
derivatives
|
(931)
|
|
(931)
|
|
(2,763)
|
|
(2,763)
|
|
Total Other
Income/(Expenses), net
|
74,842
|
|
(26,216)
|
|
(742)
|
|
(76,875)
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$127,217
|
|
$22,427
|
|
$148,047
|
|
$61,099
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$0.77
|
|
$0.20
|
|
$1.15
|
|
$0.56
|
|
Diluted earnings per
share
|
$0.77
|
|
$0.20
|
|
$1.15
|
|
$0.56
|
|
Basic weighted
average number of common shares (in thousands of shares)
|
164,870
|
|
109,825
|
|
128,358
|
|
109,825
|
|
Diluted weighted
average number of common shares (in thousands of shares)
|
165,597
|
|
109,825
|
|
128,603
|
|
109,825
|
|
Non-GAAP
Measures*
|
|
Reconciliation of
Net Income to Adjusted Net Income – Unaudited
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net income
|
$127,217
|
|
$22,427
|
|
$148,047
|
|
$61,099
|
|
Gain on debt
extinguishment
|
$(116,365)
|
|
-
|
|
$(116,365)
|
|
-
|
|
Amortization of
financing fees & finance fees accrued
|
4,834
|
|
3,538
|
|
11,432
|
|
10,882
|
|
Refinancing
professional fees
|
21,766
|
|
4,126
|
|
51,467
|
|
9,312
|
|
Loss on sale of
securities
|
-
|
|
-
|
|
-
|
|
2,357
|
|
Adjusted Net
Income
|
$37,452
|
|
$30,091
|
|
$94,581
|
|
$83,650
|
|
Adjusted Earnings
Per Share, diluted
|
$0.23
|
|
$0.27
|
|
$0.74
|
|
$0.76
|
|
Diluted weighted
average number of shares (in thousands)
|
165,597
|
|
109,825
|
|
128,603
|
|
109,825
|
|
|
|
*
|
The Company
reports its financial results in accordance with U.S. generally
accepted accounting principles (GAAP). However, management believes
that certain non-GAAP financial measures used in managing the
business may provide users of this financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Table above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and nine
months ended September 30, 2018 and 2017. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported results prepared in accordance with
GAAP.
|
|
DANAOS
CORPORATION
|
|
Condensed
Consolidated Balance Sheets - Unaudited
|
|
(Expressed in
thousands of United States dollars)
|
|
|
|
|
As
of
|
|
As
of
|
|
September
30,
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$80,133
|
|
$66,895
|
|
Restricted
cash
|
|
-
|
|
2,812
|
|
Accounts receivable,
net
|
|
8,818
|
|
6,502
|
|
Other current
assets
|
|
30,729
|
|
49,790
|
|
|
|
119,680
|
|
125,999
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
2,717,302
|
|
2,795,971
|
|
Deferred charges,
net
|
|
13,979
|
|
8,962
|
|
Investments in
affiliates
|
|
6,910
|
|
5,998
|
|
Other non-current
assets
|
|
63,476
|
|
49,466
|
|
|
|
2,801,667
|
|
2,860,397
|
|
TOTAL
ASSETS
|
|
$2,921,347
|
|
$2,986,396
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
118,517
|
|
$2,329,601
|
|
Accumulated accrued
interest, current portion
|
|
35,815
|
|
-
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
85,092
|
|
50,238
|
|
|
|
239,424
|
|
2,379,839
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
1,527,390
|
|
-
|
|
Accumulated accrued
interest, net of current portion
|
|
210,827
|
|
-
|
|
Other long-term
liabilities
|
|
61,861
|
|
57,852
|
|
|
|
1,800,078
|
|
57,852
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock
|
|
2,133
|
|
1,098
|
|
Additional paid-in
capital
|
|
724,732
|
|
546,898
|
|
Accumulated other
comprehensive loss
|
|
(107,852)
|
|
(114,076)
|
|
Retained
earnings
|
|
262,832
|
|
114,785
|
|
|
|
881,845
|
|
548,705
|
|
Total liabilities
and stockholders' equity
|
|
$2,921,347
|
|
$2,986,396
|
|
DANAOS
CORPORATION
|
|
Condensed
Consolidated Statements of Cash Flows
- Unaudited
|
|
(Expressed in
thousands of United States dollars)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
$127,217
|
|
$22,427
|
|
$148,047
|
|
$61,099
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
26,995
|
|
29,221
|
|
80,752
|
|
87,267
|
|
Amortization of
deferred drydocking & special survey costs, finance cost and
other finance fees accrued
|
7,470
|
|
5,172
|
|
18,320
|
|
15,919
|
|
Gain on debt
extinguishment
|
(116,365)
|
|
-
|
|
(116,365)
|
|
-
|
|
PIK
interest
|
414
|
|
-
|
|
414
|
|
-
|
|
Payments for
drydocking/special survey
|
(1,554)
|
|
(1,892)
|
|
(11,905)
|
|
(6,408)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
931
|
|
931
|
|
2,763
|
|
2,763
|
|
Equity income on
investments
|
(728)
|
|
(278)
|
|
(912)
|
|
(633)
|
|
Stock based
compensation
|
157
|
|
-
|
|
157
|
|
-
|
|
Loss on sale of
securities
|
-
|
|
-
|
|
-
|
|
2,357
|
|
Accounts
receivable
|
6,976
|
|
731
|
|
(2,316)
|
|
(3,085)
|
|
Other assets, current
and non-current
|
17,340
|
|
(4,869)
|
|
8,512
|
|
(3,233)
|
|
Accounts payable and
accrued liabilities
|
(9,701)
|
|
(974)
|
|
(1,608)
|
|
1,644
|
|
Other liabilities,
current and long-term
|
(3,844)
|
|
(4,694)
|
|
(14,959)
|
|
(21,864)
|
|
Net Cash provided
by Operating Activities
|
55,308
|
|
45,775
|
|
110,900
|
|
135,826
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Vessel
additions
|
(400)
|
|
(1,084)
|
|
(2,083)
|
|
(3,696)
|
|
Net proceeds from
sale of securities
|
-
|
|
-
|
|
-
|
|
6,236
|
|
Net Cash provided
by/(used in) Investing Activities
|
(400)
|
|
(1,084)
|
|
(2,083)
|
|
2,540
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
325,852
|
|
-
|
|
325,852
|
|
-
|
|
Debt
repayment
|
(358,726)
|
|
(44,358)
|
|
(407,107)
|
|
(147,930)
|
|
Finance
costs
|
(26,967)
|
|
-
|
|
(26,967)
|
|
-
|
|
Paid-in
capital
|
10,000
|
|
-
|
|
10,000
|
|
-
|
|
Share issuance
costs
|
(169)
|
|
-
|
|
(169)
|
|
-
|
|
Net Cash used in
Financing Activities
|
(50,010)
|
|
(44,358)
|
|
(98,391)
|
|
(147,930)
|
|
Net
Increase/(Decrease) in cash, cash equivalents and restricted
cash
|
4,898
|
|
333
|
|
10,426
|
|
(9,564)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
75,235
|
|
66,632
|
|
69,707
|
|
76,529
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$80,133
|
|
$66,965
|
|
$80,133
|
|
$66,965
|
|
DANAOS
CORPORATION
|
|
Reconciliation of
Net Income to Adjusted EBITDA - Unaudited
|
|
(Expressed in
thousands of United States dollars)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net income
|
$127,217
|
|
$22,427
|
|
$148,047
|
|
$61,099
|
|
Depreciation
|
26,995
|
|
29,221
|
|
80,752
|
|
87,267
|
|
Amortization of
deferred drydocking & special survey costs
|
2,636
|
|
1,634
|
|
6,888
|
|
5,037
|
|
Amortization of
deferred finance costs and other finance fees accrued
|
4,834
|
|
3,538
|
|
11,432
|
|
10,882
|
|
Amortization of
deferred realized losses on interest rate swaps
|
931
|
|
931
|
|
2,763
|
|
2,763
|
|
Interest
income
|
(1,505)
|
|
(1,386)
|
|
(4,298)
|
|
(4,201)
|
|
Interest
expense
|
16,079
|
|
19,262
|
|
56,834
|
|
55,846
|
|
Gain on debt
extinguishment
|
(116,365)
|
|
-
|
|
(116,365)
|
|
-
|
|
Stock based
compensation
|
157
|
|
|
|
157
|
|
-
|
|
Refinancing
professional fees
|
21,766
|
|
4,126
|
|
51,467
|
|
9,312
|
|
Loss on sale of
securities
|
-
|
|
-
|
|
-
|
|
2,357
|
|
Adjusted
EBITDA(1)
|
$82,745
|
|
$79,753
|
|
$237,677
|
|
$230,362
|
|
|
|
1)
|
Adjusted EBITDA
represents net income before interest income and expense,
depreciation, amortization of deferred drydocking & special
survey costs and deferred finance costs, amortization of deferred
realized losses on interest rate swaps, loss on sale of securities,
gain on debt extinguishment, stock based compensation and
refinancing professional fees. However, Adjusted EBITDA is not a
recognized measurement under U.S. generally accepted accounting
principles, or "GAAP." 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. We also believe that
Adjusted EBITDA is useful in evaluating our operating performance
compared to that of other companies in our industry because the
calculation of Adjusted EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of capital
expenditures and acquisitions, items which may vary for different
companies for reasons unrelated to overall operating performance.
In evaluating Adjusted EBITDA, you should be aware that in the
future we may incur expenses that are the same as or similar to
some of the adjustments in this presentation. Our presentation of
Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items.
|
|
|
|
Note: Items to
consider for comparability include gains and charges. Gains
positively impacting net income are reflected as deductions to net
income. Charges negatively impacting net income are reflected as
increases to net income.
|
|
|
|
The Company reports
its financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of these financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and nine
months ended September 30, 2018 and 2017. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported results prepared in accordance with
GAAP.
|
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SOURCE Danaos Corporation