Global Ship Lease, Inc. (NYSE:GSL) (the “Company”), a containership
charter owner, announced today its unaudited results for the three
months and nine months ended September 30, 2017.
Third Quarter and Year To Date Highlights -
Reported operating revenue of $41.2 million for the third quarter
2017. Revenue for the nine months ended September 30, 2017 was
$121.1 million
- Reported net income available to common shareholders of $8.9
million for the third quarter 2017. For the nine months ended
September 30, 2017, net income was $22.5 million
- Normalized net income (1) was $8.9 million for the third
quarter 2017, the same as reported net income. Normalized net
income was $23.0 million for the nine months ended September 30,
2017
- Generated $29.3 million of Adjusted EBITDA(1) for the third
quarter 2017. Adjusted EBITDA for the nine months ended September
30, 2017 was $85.4 million
- Agreed on September 11, 2017 with CMA CGM to extend the
charters on two of our 2,207 TEU containerships, the 2002-built
Julie Delmas and the 2003-built Delmas Keta, by 12 months (plus or
minus 45 days at the charterer’s option) at a fixed rate of $7,800
per vessel per day, commencing September 11, 2017 and September 20,
2017, respectively
- Agreed on October 19, 2017 a new time charter with CMA CGM for
the 2005-built OOCL Tianjin, which will be renamed GSL Tianjin, an
8,063 TEU containership. The charter is for a period of three to
eight months (at the charterer's option) at a fixed rate of $13,000
per day, which commenced on October 25, 2017, immediately upon
re-delivery from its previous charter
- On October 31, 2017, closed the previously
announced offering of $360 million aggregate principal amount of
9.875% first priority secured notes due 2022. The net proceeds,
together with borrowings under a new $54.8 million super senior
secured term loan facility and cash on hand, are to be used to
refinance our existing 10.000% notes due 2019. In addition, all
outstanding borrowings under both the existing revolving credit
facility and the existing secured term loan have been repaid and
terminated
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, “Throughout the third quarter of 2017, we continued to
operate our fleet of 18 mid-sized and smaller containerships on
stable, fixed rate time-charter contracts with top-tier liner
companies, delivering highly consistent cash flows, as we have
throughout our history. With an excellent record of operational
performance and against a background of improving fundamentals for
mid-sized and smaller containerships, we are pleased to have
successfully extended or renewed charters on three vessels with no
down-time, thereby securing continued employment for our entire
fleet on profitable terms throughout the quieter winter
period.”
Mr. Webber continued, “We remain optimistic that a recovery in
fundamentals, albeit subject to some seasonality, will continue to
support a firming of the charter market for mid-sized and smaller
vessels. Vessel ordering in these size segments remains very
limited, scrapping activity is positive, and demand growth in the
trade lanes dependent on this tonnage is robust. With strong
indications of a cyclical recovery, we successfully refinanced all
of our existing debt on a long-term basis and on improved terms.
Our enhanced balance sheet, a high-quality fleet, multiple years of
contracted revenue, and an increasingly attractive market
environment provide us with an opportunity to create substantial
shareholder value by pursuing attractive acquisitions of vessels,
always with a charter, whilst continuing to de-lever.”
SELECTED FINANCIAL DATA – UNAUDITED (thousands
of U.S. dollars)
| |
Threemonths ended |
Threemonths ended |
|
Ninemonths ended |
Ninemonths ended |
|
| |
September 30, 2017 |
September 30, 2016 |
|
September 30, 2017 |
September 30, 2016 |
|
| |
|
|
|
|
| Operating
Revenue |
41,216 |
41,154 |
|
121,117 |
125,097 |
|
| Operating
Income (Loss) |
19,894 |
(11,884 |
) |
56,859 |
24,422 |
|
| Net Income
(Loss) for Common Shareholders |
8,878 |
(23,685 |
) |
22,496 |
(13,085 |
) |
| Adjusted
EBITDA (1) |
29,340 |
28,051 |
|
85,446 |
86,169 |
|
| Normalised
Net Income (1) |
8,878 |
5,240 |
|
23,016 |
16,301 |
|
| |
|
|
|
|
(1) Adjusted EBITDA and Normalized net income (loss) 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 interim unaudited
financial information are provided in this Earnings Release.
Revenue and Utilization The fleet generated revenue from fixed
rate, mainly long-term time charters of $41.2 million in the three
months ended September 30, 2017, the same as in the comparative
period in 2016, with a small reduction in revenue as a consequence
of the amendments to the charters of Marie Delmas and Kumasi
whereby the day rate stepped down on August 1, 2016 and again in
mid-September 2017, offset by reduced levels of offhire. There were
1,656 ownership days in the quarter, the same as in the comparable
period in 2016. In the third quarter 2017, there was no offhire,
giving an overall utilization of 100.0%. In the comparable 2016
period, there was no unplanned offhire and 38 days of planned
offhire from regulatory drydockings, giving an overall utilization
of 97.7%.
For the nine months ended September 30, 2017, revenue was $121.1
million, down $4.0 million from revenue of $125.1 million in the
comparative period of 2016, mainly due to the amendments to the
charters of Marie Delmas and Kumasi.
The table below shows fleet utilization for the three and nine
months ended September 30, 2017 and 2016, and for the years ended
December 31, 2016, 2015, 2014 and 2013.
| |
|
|
|
|
|
|
|
|
|
| |
Three months ended |
Nine months ended |
|
|
|
| |
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
| Days |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
2016 |
|
2015 |
|
2014 |
|
2013 |
|
| |
|
|
|
|
|
|
|
|
|
| Ownership days |
1,656 |
|
1,656 |
|
4,914 |
|
4,932 |
|
|
6,588 |
|
6,893 |
|
6,270 |
|
6,205 |
|
| Planned offhire -
scheduled drydock |
0 |
|
(38 |
) |
(62 |
) |
(89 |
) |
|
(100 |
) |
(9 |
) |
(48 |
) |
(21 |
) |
| Unplanned offhire |
0 |
|
0 |
|
(30 |
) |
(2 |
) |
|
(3 |
) |
(7 |
) |
(12 |
) |
(7 |
) |
| Idle time |
0 |
|
0 |
|
0 |
|
0 |
|
|
0 |
|
(13 |
) |
(64 |
) |
0 |
|
| Operating days |
1,656 |
|
1,618 |
|
4,822 |
|
4,841 |
|
|
6,485 |
|
6,864 |
|
6,146 |
|
6,177 |
|
| |
|
|
|
|
|
|
|
|
|
| Utilization |
100.0 |
% |
97.7 |
% |
98.1 |
% |
98.2 |
% |
|
98.4 |
% |
99.6 |
% |
98.0 |
% |
99.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the three months ended September 30, 2017, there were no
regulatory dry-dockings. There have been a total of four such
dry-dockings year to date. One further regulatory dry-docking,
previously scheduled for late 2017, has been deferred to early
2018. Three dry-dockings were completed in the three months ended
September 30, 2016. There were a total of six dry-dockings in
2016.
Vessel Operating Expenses Vessel operating expenses, which
include costs of crew, lubricating oil, spares and insurance, were
$10.6 million for the three months ended September 30, 2017,
compared to $11.8 million in the comparative period. The average
cost per ownership day in the quarter was $6,401, compared to
$7,103 for the comparative period, down $702 per day or 9.9%. The
reduction is primarily attributable to reduced cost of lubricating
oil, the timing of spend on repairs and maintenance, lower
insurance costs on renewal and lower costs incurred in dry-dockings
that are expensed rather than capitalized.
For the nine months ended September 30, 2017, vessel operating
expenses were $31.9 million or an average of $6,487 per day,
compared to $34.5 million in the comparative period or $6,991 per
day. The $504, or 7.2%, reduction in vessel operating expenses per
day is due mainly to reasons noted above.
Depreciation Depreciation for the three months ended September
30, 2017 was $9.4 million, compared to $10.6 million in the third
quarter 2016, with the reduction being due to the effect of lower
book values for a number of vessels following impairment write
downs taken in the third and fourth quarters 2016.
Depreciation for the nine months ended September 30, 2017 was
$28.6 million, compared to $32.4 million in the comparative period
of 2016, with the reduction being due to the reason noted
above.
Impairment
The Company’s accounting policies require that tangible fixed
assets such as vessels are reviewed individually for impairment in
case of trigger events or changes in circumstances to assess
whether their carrying amounts are recoverable.
In September 2017, the Company agreed with CMA CGM to extend the
charters on Julie Delmas and Delmas Keta, by 12 months (plus or
minus 45 days at the charterer’s option) at a fixed rate of $7,800
per vessel per day, commencing September 11, 2017 and September 20,
2017 respectively. These extensions triggered the performance of an
impairment test on the two vessels. No impairment was
identified.
In third quarter 2016, the Company agreed with CMA CGM to amend
and extend the charters of the Marie Delmas and Kumasi. These
amendments triggered the performance of an impairment test on the
two vessels as at August 1, 2016 resulting in a non-cash impairment
charge of $29.4 million being recognized in the quarter ended
September 30, 2016 as the sum of the expected undiscounted future
cash flows from these assets over their estimated remaining useful
lives was 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 the net present value of estimated
future cash flows discounted by an appropriate discount rate.
General and Administrative Costs General and administrative
costs were $1.3 million in the three months ended September 30,
2017, compared to $1.4 million in the third quarter of 2016.
For the nine months ended September 30, 2017, general and
administrative costs were $3.8 million, compared to $4.6 million
for the comparative period in 2016. The reduction is due to lower
staff costs and professional fees.
Other Operating Income
Other operating income in the three months ended September 30,
2017 was $2,000, compared to $32,000 in the third quarter of
2016.
For the nine months ended September 30, 2017, other operating
income was $50,000, compared to $175,000 in the comparative
period.
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was $29.3 million for
the three months ended September 30, 2017, up from $28.1 million
for the three months ended September 30, 2016 as lower vessel
operating costs and general and administrative costs offset lower
revenue, mainly from the amendments to the charters of Marie Delmas
and Kumasi.
Adjusted EBITDA for the nine months ended September 30, 2017 was
$85.4 million, compared to $86.2 million for the comparative
period.
Interest Expense Debt at September 30, 2017 comprised amounts
outstanding on our 2019 notes, our revolving credit facility and
our secured term loan.
Interest expense for the three months ended September 30, 2017,
was $10.4 million, down $0.7 million on the interest expense for
the three months ended September 30, 2016 of $11.1 million. The
reduction is mainly due to reduced interest on our notes on lower
amounts outstanding.
For the nine months ended September 30, 2017, interest expense
was $32.4 million. For the nine months ended September 30, 2016,
interest expense was $35.3 million. The decrease is mainly due to
lower amounts outstanding on our notes.
Interest income for the three months ended September 30, 2017
was $152,000, up from $57,000 in the comparative period of 2016 due
to higher cash balances. Interest income for the nine months ended
September 30, 2017 was $335,000 compared to $139,000 in the
comparative period.
Re-financing
On October 31, 2017, we closed the previously
announced offering of $360.0 million aggregate principal amount of
9.875% first priority secured notes due 2022. The net proceeds,
together with cash on hand, are to be used to refinance the
existing 10.000% notes due 2019. In addition, we have agreed a new
super senior secured term loan facility of $54.8 million with a
maximum term of three years and bearing interest at LIBOR plus
3.25%, which was drawn on October 31, 2017, the net proceeds of
which, together with cash on hand, have been used to repay
outstanding borrowings under both the existing revolving credit
facility and the existing secured term loan, which have now been
terminated.
Taxation
Taxation for the three months ended September 30, 2017 was
$15,000, compared to $17,000 in the third quarter of 2016.
Taxation for the nine months ended September 30, 2017 was
$31,000, compared to $32,000 for the comparative period in
2016.
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 September 30, 2017 was $0.8
million, the same as in the comparative period.
The cost in the nine months ended September 30, 2017 was $2.3
million, the same as in the comparative period.
Net Income (Loss) Available to Common Shareholders Net income
available to common shareholders for the three months ended
September 30, 2017 was $8.9 million. Net loss for the three months
ended September 30, 2016 was $23.7 million, after the non-cash
impairment charge of $29.4 million related to the Marie Delmas and
Kumasi.
Normalized net income, which excludes, where relevant, the
effect of any non-cash impairment charges, gains and losses on the
purchase of notes and accelerated amortization of deferred
financing charges and original issue discount consequent upon the
retirement of Notes, was $8.9 million for the three months ended
September 30, 2017 (the same as reported), compared to $5.2 million
for the three months ended September 30, 2016.
Net income was $22.5 million for the nine months ended September
30, 2017. Net loss was $13.1 million for the nine months ended
September 30, 2016 after the $29.4 million non-cash impairment
charge associated with Marie Delmas and Kumasi.
Normalized net income was $23.0 million for the nine months
ended September 30, 2017 and was $16.3 million for the nine months
ended September 30, 2016.
Fleet
The following table provides information about the on-the-water
fleet of 18 vessels. 16 vessels are chartered to CMA CGM, and two
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 |
2.2 |
Sept
21, 2019 |
15,300 |
| CMA CGM Utrillo |
2,262 |
1999 |
Dec
2007 |
2.2 |
Sept
11, 2019 |
15,300 |
| Delmas Keta |
2,207 |
2003 |
Dec
2007 |
1.0(3) |
Aug 6,
2018 |
7,800 |
| Julie Delmas |
2,207 |
2002 |
Dec
2007 |
0.9(3) |
Jul
28, 2018 |
7,800 |
| Kumasi |
2,207 |
2002 |
Dec
2007 |
1.3 -
3.3(4) |
Nov
16, 2018 |
9,800 |
| Marie Delmas |
2,207 |
2002 |
Dec
2007 |
1.3 -
3.3(4) |
Nov
16, 2018 |
9,800 |
| CMA CGM La Tour |
2,272 |
2001 |
Dec
2007 |
2.2 |
Sept
20, 2019 |
15,300 |
| CMA CGM Manet |
2,272 |
2001 |
Dec
2007 |
2.2 |
Sept
7, 2019 |
15,300 |
| CMA CGM Alcazar |
5,089 |
2007 |
Jan
2008 |
3.3 |
Oct
18, 2020 |
33,750 |
| CMA CGM Château
d’If |
5,089 |
2007 |
Jan
2008 |
3.3 |
Oct
11, 2020 |
33,750 |
| CMA CGM Thalassa |
11,040 |
2008 |
Dec
2008 |
8.3 |
Oct 1,
2025 |
47,200 |
| CMA CGM Jamaica |
4,298 |
2006 |
Dec
2008 |
5.2 |
Sept
17, 2022 |
25,350 |
| CMA CGM Sambhar |
4,045 |
2006 |
Dec
2008 |
5.2 |
Sept
16, 2022 |
25,350 |
| CMA CGM America |
4,045 |
2006 |
Dec
2008 |
5.2 |
Sept
19, 2022 |
25,350 |
| CMA CGM Berlioz |
6,621 |
2001 |
Aug
2009 |
3.9 |
May
28, 2021 |
34,000 |
| OOCL Tianjin |
8,063 |
2005 |
Oct
2014 |
0.5(5) |
Jan
25, 2018(5) |
13,000(5) |
| OOCL Qingdao |
8,063 |
2004 |
Mar
2015 |
0.6 |
Mar
11, 2018 |
34,500 |
| OOCL Ningbo |
8,063 |
2004 |
Sep
2015 |
1.1 |
Sep
17, 2018 |
34,500 |
| |
|
|
|
|
|
| (1) Twenty-foot Equivalent Units. |
|
|
|
|
|
| |
| (2)
As at September 30, 2017 to mid-point of re-delivery period and
adjusted for OOCL Tianjin as per footnote (5) below. Plus or minus
90 days, other than (i) OOCL Tianjin (to be renamed GSL Tianjin)
which is between January 25, 2018 and June 25, 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 and (iv) Julie Delmas and
Delmas Keta (see note 3 below). (3) The charters for Julie
Delmas and Delmas Keta were extended in September 2017 by 12 months
(plus or minus 45 days at the charterer’s option) at a fixed rate
of $7,800 per vessel per day, commencing on September 11, 2017 and
September 20, 2017, respectively. (4) The charters for Kumasi
and Marie Delmas were amended in July 2016 to, inter alia, provide
us with three consecutive options to extend the charters at $9,800
per day. The first of these options was exercised in July 2017,
extending the charters to end 2018. The two remaining options allow
us to extend the charters to December 31, 2020 plus or minus 90
days at charterer’s option. The earliest possible re-delivery date,
not taking into account our remaining options, is shown in the
table. (5) A new time charter for OOCL Tianjin, to be renamed
GSL Tianjin, with CMA CGM commenced October 25, 2017, immediately
upon re-delivery from its previous charter to OOCL, at a fixed rate
of $13,000 per day. The vessel is chartered for a period of three
to eight months at the charterer’s option. |
| |
Conference Call and Webcast Global Ship Lease
will hold a conference call to discuss the Company's results for
the three months ended September 30, 2017 today, Thursday November
2, 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: 6299768Please 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 Saturday, November 18, 2017 at (855) 859-2056 or
(404) 537-3406. Enter the code 6299768 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 2016 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.Global Ship Lease owns 18 vessels with a
total capacity of 82,312 TEU and an average age, weighted by TEU
capacity, at September 30, 2017 of 12.8 years. All 18 vessels are
currently fixed on time charters, 16 of which are with CMA CGM. The
average remaining term of the charters at September 30, 2017 is 3.0
years or 3.3 years on a weighted basis, taking into account the new
charter agreed for OOCL Tianjin.
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.
ADJUSTED EBITDA - UNAUDITED
| (thousands of U.S.
dollars) |
|
| |
|
Three |
Three |
Nine |
Nine |
| |
|
months |
months |
months |
months |
| |
|
ended |
ended |
ended |
ended |
| |
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
| |
|
2017 |
2016 |
2017 |
2016 |
| |
|
|
|
|
|
| Net income
(loss) available to common shareholders |
8,878 |
|
(23,685 |
) |
22,496 |
|
(13,085 |
) |
| |
|
|
|
|
|
| Adjust: |
Depreciation |
9,446 |
|
10,578 |
|
28,587 |
|
32,390 |
|
| |
Impairment |
--- |
|
29,357 |
|
--- |
|
29,357 |
|
| |
Interest
income |
(152 |
) |
(57 |
) |
(335 |
) |
(139 |
) |
| |
Interest
expense |
10,387 |
|
11,075 |
|
32,370 |
|
35,317 |
|
| |
Income
tax |
15 |
|
17 |
|
31 |
|
32 |
|
| |
Earnings
allocated to preferred shares |
766 |
|
766 |
|
2,297 |
|
2,297 |
|
| |
|
|
|
|
|
| Adjusted
EBITDA |
29,340 |
|
28,051 |
|
85,446 |
|
86,169 |
|
| |
|
|
|
|
|
|
|
|
B. Normalized net income
Normalized net income represents net income adjusted for the
premium paid on the tender offer together with the related
accelerated amortization of deferred financing costs and original
issue discount. 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.
Normalized net income represents Net income (loss) adjusted for
the unrealized gain (loss) on derivatives, the accelerated write
off of a portion of deferred financing costs, impairment charges
and gain of redemption of preferred shares. 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 such as change in fair value of derivatives to
eliminate the effect of non-cash non-operating items that do not
affect operating performance or cash generated. Normalized net
income is not defined in US GAAP and should not be considered to be
an alternate to Net income (loss) or any other financial metric
required by such accounting principles.
| NORMALIZED NET
INCOME - UNAUDITED |
|
|
|
| (thousands
of U.S. dollars) |
|
| |
|
Three |
Three |
Nine |
Nine |
| |
|
months |
months |
months |
months |
| |
|
ended |
ended |
ended |
ended |
| |
|
Sept
30, |
Sept 30, |
Sept
30, |
Sept 30, |
| |
|
2017 |
2016 |
2017 |
2016 |
| |
|
|
|
|
|
| Net income
(loss) available to common shareholders |
8,878 |
(23,685 |
) |
22,496 |
(13,085 |
) |
| |
|
|
|
|
|
| Adjust: |
Gain on purchase of
notes |
--- |
(475 |
) |
--- |
(927 |
) |
| |
Premium paid on tender
offer for notes |
--- |
--- |
|
390 |
533 |
|
| |
Accelerated write off
of deferred financing charges related to notes purchase and tender
offer |
--- |
10 |
|
61 |
100 |
|
| |
Accelerated write off
of original issue discount related to notes purchase and tender
offer |
--- |
33 |
|
69 |
323 |
|
| |
Impairment charge |
--- |
29,357 |
|
--- |
29,357 |
|
| |
|
|
|
|
|
| Normalized
net income |
8,878 |
5,240 |
|
23,016 |
16,301 |
|
| |
|
|
|
|
|
|
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 September 30, |
Nine months ended September 30, |
| |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Operating
Revenues |
|
|
|
|
|
| Time charter
revenue |
|
$ |
9,444 |
|
$ |
9,444 |
|
$ |
28,022 |
|
$ |
28,123 |
|
| Time charter revenue –
related party |
|
|
31,772 |
|
|
31,710 |
|
|
93,095 |
|
|
96,974 |
|
| |
|
|
|
|
|
| |
|
|
41,216 |
|
|
41,154 |
|
|
121,117 |
|
|
125,097 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Operating
ExpensesVessel operating expenses |
|
|
10,200 |
|
|
11,362 |
|
|
30,678 |
|
|
33,282 |
|
| Vessel operating
expenses – related party |
|
|
400 |
|
|
400 |
|
|
1,200 |
|
|
1,199 |
|
| Depreciation |
|
|
9,446 |
|
|
10,578 |
|
|
28,587 |
|
|
32,390 |
|
| Impairment of
vessels |
|
|
- |
|
|
29,357 |
|
|
- |
|
|
29,357 |
|
| General and
administrative |
|
|
1,278 |
|
|
1,373 |
|
|
3,843 |
|
|
4,622 |
|
| Other operating
income |
|
|
(2 |
) |
|
(32 |
) |
|
(50 |
) |
|
(175 |
) |
| |
|
|
|
|
|
| Total operating
expenses |
|
|
21,322 |
|
|
53,038 |
|
|
64,258 |
|
|
100,675 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Operating
Income |
|
|
19,894 |
|
|
(11,884 |
) |
|
56,859 |
|
|
24,422 |
|
| |
|
|
|
|
|
| Non Operating
Income (Expense) |
|
|
|
|
|
| Interest income |
|
|
152 |
|
|
57 |
|
|
335 |
|
|
139 |
|
| Interest expense |
|
|
(10,387 |
) |
|
(11,075 |
) |
|
(32,370 |
) |
|
(35,317 |
) |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Income / (Loss)
before Income Taxes |
|
|
9,659 |
|
|
(22,902 |
) |
|
24,824 |
|
|
(10,756 |
) |
| |
|
|
|
|
|
| Income taxes |
|
|
(15 |
) |
|
(17 |
) |
|
(31 |
) |
|
(32 |
) |
| |
|
|
|
|
|
| Net
Income |
|
$ |
9,644 |
|
$ |
(22,919 |
) |
$ |
24,793 |
|
$ |
(10,788 |
) |
| |
|
|
|
|
|
| Earnings allocated to
Series B Preferred Shares |
|
|
(766 |
) |
|
(766 |
) |
|
(2,297 |
) |
|
(2,297 |
) |
| |
|
|
|
|
|
| Net Income
available to Common Shareholders |
|
$ |
8,878 |
|
$ |
(23,685 |
) |
$ |
22,496 |
|
$ |
(13,085 |
) |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Earnings per
Share |
|
|
|
|
|
| |
|
|
|
|
|
| Weighted average number
of Class A common shares outstanding |
|
|
|
|
|
| Basic
(including RSUs without service conditions) |
|
47,975,609 |
|
47,858,640 |
|
47,975,609 |
|
47,850,139 |
|
|
Diluted |
|
47,975,609 |
|
47,858,640 |
|
47,975,609 |
|
47,850,139 |
|
| |
|
|
|
|
|
| Net income per Class A
common share |
|
|
|
|
|
| Basic
(including RSUs without service conditions) |
|
$ |
0.19 |
|
$ |
(0.49 |
) |
$ |
0.47 |
|
$ |
(0.27 |
) |
|
Diluted |
|
$ |
0.19 |
|
$ |
(0.49 |
) |
$ |
0.47 |
|
$ |
(0.27 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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) |
| |
|
|
|
|
| |
|
September
30,2017 |
|
December 31,2016 |
| |
|
|
|
|
| Assets
|
|
|
|
|
| Cash and cash
equivalents |
|
$ |
65,562 |
|
|
$ |
54,243 |
|
| Accounts
receivable |
|
|
166 |
|
|
|
29 |
|
| Due from related
party |
|
|
1,065 |
|
|
|
906 |
|
| Prepaid expenses |
|
|
2,614 |
|
|
|
1,146 |
|
| Other receivables |
|
|
191 |
|
|
|
52 |
|
| Inventory |
|
|
629 |
|
|
|
553 |
|
| |
|
|
|
|
| Total current
assets |
|
|
70,227 |
|
|
|
56,929 |
|
| |
|
|
|
|
| |
|
|
|
|
| Vessels in
operation |
|
|
694,638 |
|
|
|
719,110 |
|
| Other fixed assets |
|
|
12 |
|
|
|
7 |
|
| Intangible assets |
|
|
9 |
|
|
|
16 |
|
| Other long term
assets |
|
|
112 |
|
|
|
195 |
|
| |
|
|
|
|
| Total non-current
assets |
|
|
694,771 |
|
|
|
719,328 |
|
| |
|
|
|
|
| Total
Assets |
|
$ |
764,998 |
|
|
$ |
776,257 |
|
| |
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
| |
|
|
|
|
|
Liabilities |
|
|
|
|
| Current portion of long
term debt |
|
|
25,755 |
|
|
|
31,026 |
|
| Intangible liability –
charter agreements |
|
|
1,779 |
|
|
|
1,807 |
|
| Deferred revenue |
|
|
2,848 |
|
|
|
1,940 |
|
| Accounts payable |
|
|
452 |
|
|
|
963 |
|
| Due to related
party |
|
|
1,555 |
|
|
|
1,315 |
|
| Accrued expenses |
|
|
3,491 |
|
|
|
11,664 |
|
| |
|
|
|
|
| Total current
liabilities |
|
|
35,880 |
|
|
|
48,715 |
|
| |
|
|
|
|
| |
|
|
|
|
| Long term debt |
|
|
369,255 |
|
|
|
388,847 |
|
| Intangible liability –
charter agreements |
|
|
8,454 |
|
|
|
9,782 |
|
| Deferred tax
liability |
|
|
20 |
|
|
|
20 |
|
| |
|
|
|
|
| Total long term
liabilities |
|
|
377,729 |
|
|
|
398,649 |
|
| |
|
|
|
|
| |
|
|
|
|
| Total
Liabilities |
|
$ |
413,609 |
|
|
$ |
447,364 |
|
| |
|
|
|
|
| Commitments and
contingencies |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
| Stockholders’
Equity |
|
|
|
|
| Class A Common stock –
authorized 214,000,000 shares with a $0.01 par
value; 47,575,609 shares issued and outstanding
(2016 – 47,575,609) |
|
$ |
476 |
|
|
$ |
476 |
|
| Class B Common stock –
authorized 20,000,000 shares with a $0.01 par
value; 7,405,956 shares issued and outstanding
(2016 – 7,405,956) |
|
|
74 |
|
|
|
74 |
|
| Series B Preferred
shares – authorized 16,100 shares with $0.01 par
value; 14,000 shares issued and outstanding
(2016 – 14,000) |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
| Additional paid in
capital |
|
|
386,708 |
|
|
|
386,708 |
|
| (Accumulated
deficit) |
|
|
(35,869 |
) |
|
|
(58,365 |
) |
| |
|
|
|
|
| Total
Stockholders’ Equity |
|
|
351,389 |
|
|
|
328,893 |
|
| |
|
|
|
|
| Total
Liabilities and Stockholders’ Equity |
|
$ |
764,998 |
|
|
$ |
776,257 |
|
| |
|
|
|
|
| Global Ship Lease,
Inc.Interim Unaudited Consolidated Statements of
Cash Flows(Expressed in thousands of U.S. dollars) |
| |
|
|
|
| |
|
Three months ended September 30, |
Nine months ended September 30, |
| |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Cash Flows from
Operating Activities |
|
|
|
|
|
| Net income /
(Loss) |
|
$ |
9,644 |
|
$ |
(22,919 |
) |
$ |
24,793 |
|
$ |
(10,788 |
) |
| |
|
|
|
|
|
| Adjustments to
Reconcile Net income to Net Cash Provided by Operating
Activities |
|
|
|
|
|
| Depreciation |
|
|
9,446 |
|
|
10,578 |
|
|
28,587 |
|
|
32,390 |
|
| Vessel impairment |
|
|
- |
|
|
29,357 |
|
|
- |
|
|
29,357 |
|
| Amortization of
deferred financing costs |
|
|
838 |
|
|
909 |
|
|
2,613 |
|
|
2,681 |
|
| Amortization of
original issue discount |
|
|
258 |
|
|
333 |
|
|
883 |
|
|
1,249 |
|
| Amortization of
intangible liability |
|
|
(452 |
) |
|
(530 |
) |
|
(1,356 |
) |
|
(1,589 |
) |
| Share based
compensation |
|
|
- |
|
|
85 |
|
|
- |
|
|
200 |
|
| Gain on repurchase of
secured notes |
|
|
- |
|
|
(475 |
) |
|
- |
|
|
(927 |
) |
| Decrease (increase) in
accounts receivable and other assets |
|
|
(1,706 |
) |
|
(64 |
) |
|
(1,905 |
) |
|
(462 |
) |
| Decrease (increase) in
inventory |
|
|
46 |
|
|
(54 |
) |
|
(75 |
) |
|
20 |
|
| Increase (decrease) in
accounts payable and other liabilities |
|
|
(7,747 |
) |
|
(9,796 |
) |
|
(8,495 |
) |
|
(11,081 |
) |
| (Decrease) increase in
unearned revenue |
|
|
150 |
|
|
1,119 |
|
|
908 |
|
|
911 |
|
| Increase in related
party balances |
|
|
45 |
|
|
374 |
|
|
673 |
|
|
1,437 |
|
| Unrealized foreign
exchange (gain) loss |
|
|
- |
|
|
21 |
|
|
6 |
|
|
(7 |
) |
| |
|
|
|
|
|
| Net Cash
Provided by Operating Activities |
|
|
10,522 |
|
|
8,938 |
|
|
46,632 |
|
|
43,391 |
|
| |
|
|
|
|
|
| Cash Flows from
Investing Activities |
|
|
|
|
|
| Cash paid for vessel
improvements |
|
|
- |
|
|
- |
|
|
(100 |
) |
|
- |
|
| Cash paid in respect of
sale of vessels |
|
|
- |
|
|
- |
|
|
- |
|
|
(254 |
) |
| Cash paid for other
assets |
|
|
- |
|
|
(5 |
) |
|
(8 |
) |
|
(6 |
) |
| Cash paid for
drydockings |
|
|
(701 |
) |
|
(3,220 |
) |
|
(4,632 |
) |
|
(4,168 |
) |
| |
|
|
|
|
|
| Net Cash Used
in Investing Activities |
|
|
(701 |
) |
|
(3,225 |
) |
|
(4,740 |
) |
|
(4,428 |
) |
| |
|
|
|
|
|
| Cash Flows from
Financing Activities |
|
|
|
|
|
| Repurchase of secured
notes |
|
|
- |
|
|
(4,526 |
) |
|
(19,501 |
) |
|
(34,936 |
) |
| Proceeds from drawdown
of revolving credit facility |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
| Deferred financing
costs incurred |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
| Repayment of credit
facilities |
|
|
(2,925 |
) |
|
(1,925 |
) |
|
(8,775 |
) |
|
(6,575 |
) |
| Series B Preferred
Shares – dividends paid |
|
|
(766 |
) |
|
(766 |
) |
|
(2,297 |
) |
|
(2,297 |
) |
| |
|
|
|
|
|
| Net Cash Used
in Financing Activities |
|
|
(3,691 |
) |
|
(7,217 |
) |
|
(30,573 |
) |
|
(43,808 |
) |
| |
|
|
|
|
|
| Net Increase
(decrease) in Cash and Cash Equivalents |
|
|
6,130 |
|
|
(1,504 |
) |
|
11,319 |
|
|
(4,845 |
) |
| Cash and Cash
Equivalents at Start of Period |
|
|
59,432 |
|
|
50,250 |
|
|
54,243 |
|
|
53,591 |
|
| |
|
|
|
|
|
| Cash and Cash
Equivalents at End of Period |
|
$ |
65,562 |
|
$ |
48,746 |
|
$ |
65,562 |
|
$ |
48,746 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Supplemental
information |
|
|
|
|
|
| |
|
|
|
|
|
| Total interest
paid |
|
$ |
18,313 |
|
$ |
20,021 |
|
$ |
37,991 |
|
$ |
42,253 |
|
| |
|
|
|
|
|
| Income tax paid |
|
$ |
12 |
|
$ |
11 |
|
$ |
36 |
|
$ |
37 |
|
| |
|
|
|
|
|
Investor and Media Contacts:The IGB GroupBryan
Degnan646-673-9701orLeon Berman212-477-8438
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Apr 2023 to Apr 2024
