Global Ship Lease, Inc. (NYSE:GSL) (the “Company”), a containership
charter owner, announced today its unaudited results for the three
months and year ended December 31, 2017.
Fourth Quarter and Year Highlights
- Reported operating revenues of $37.9 million for the fourth
quarter 2017. Operating revenues for the year ended December
31, 2017 were $159.0 million
- Reported net loss(1) of $99.8 million for the fourth quarter
2017, after costs and charges totaling $14.4 million associated
with the refinancing completed in October 2017 and a non-cash
impairment charge of $87.6 million. For the year ended
December 31, 2017, net loss was $77.3 million
- Generated $24.8 million of Adjusted EBITDA(2) for the fourth
quarter 2017. Adjusted EBITDA for the year ended December 31,
2017 was $110.3 million
- Normalized net income (1)(2), excluding the costs and charges
associated with the refinancing, was $2.1 million for the fourth
quarter 2017. Normalized net income was $25.1 million for the
year ended December 31, 2017
- On October 19, 2017, agreed a new time charter with CMA CGM
for the 2005-built OOCL Tianjin, which has been renamed GSL
Tianjin, an 8,063 TEU containership. The charter was 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. This
new charter was extended with effect from January 26, 2018 for a
period of eight to 12 months (at the charterer’s option) at a fixed
rate of $11,900 per day
- 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, were used to refinance all outstanding
debt comprising 10.000% notes due 2019, the revolving credit
facility and the secured term loan
- Reduced net debt to $341.5 million at December 31, 2017 from
$375.1 million at end 2016; net debt to Adjusted EBITDA reduced to
3.1 times for 2017 from 3.3 times for 2016
- On February 20, 2018, announced agreement to an extension of
our charter with OOCL for the OOCL Qingdao, a 2004-built, 8,063 TEU
containership. The extension commences in direct continuation
of the current charter with effect from March 11, 2018, at a fixed
rate of $14,000 per day. Earliest redelivery is now January
1, 2019, with latest redelivery March 15, 2019 (at charterer's
option)
- On March 1, 2018 announced agreement to acquire a 2005-built,
2,800 TEU containership for $11.3 million. Following
delivery, which is expected to be during the second quarter of
2018, once the existing charter terminates, the vessel will
commence charter employment with CMA CGM for a period of 12 months
at a fixed rate of $9,000 per day.
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, “In 2017, we continued to benefit from our attractive
long-term charters and strong relationships with top-tier liner
companies. By maintaining full time charter employment for
our fleet and extremely high utilization levels in line with our
historical averages, we ensured that we would continue to generate
consistent cashflows to support our deleveraging and growth
efforts. Alongside improving market fundamentals, this
consistent track record of performance enabled us to refinance all
of our outstanding debt on improved terms, not only generating
ongoing savings, but also securing Global Ship Lease’s long-term
financial strength and flexibility.”
Mr. Webber continued, “Over the course of 2017 and into early
2018, the overall container shipping industry has experienced a
significant recovery, as continued strength in underlying freight
demand has driven increasing supply/demand tension and upward
pressure on both spot charter rates and asset values. Amid
this promising market environment, we have been able to achieve
satisfactory renewals at EBITDA positive levels with no down time
for vessels that have come open. With our consistent
long-term cashflows, balance sheet strength, and high-quality
fleet, Global Ship Lease is in an excellent position to pursue a
range of value creation opportunities, as we have demonstrated with
the vessel purchase recently announced, for the benefit of our
shareholders.”
SELECTED FINANCIAL DATA – UNAUDITED (thousands
of U.S. dollars)
|
Three |
Three |
|
|
|
months ended |
months
ended |
Year ended |
Year ended |
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 |
|
|
|
|
|
Operating
Revenues |
37,871 |
41,426 |
158,988 |
166,523 |
Operating
(Loss) |
(72,183) |
(44,902) |
(15,324) |
(20,480) |
Net (Loss)
(1) |
(99,824) |
(55,072) |
(77,328) |
(68,157) |
Adjusted
EBITDA (2) |
24,835 |
28,578 |
110,281 |
114,747 |
Normalized
Net Income (1)(2) |
2,190 |
6,140 |
25,206 |
22,441 |
(1) Net income (loss) and Normalized net income available to
common shareholders
(2) Adjusted EBITDA and Normalized net income are non-US
Generally Accepted Accounting Principles (US GAAP) measures, as
explained further in this press release, and are considered by
Global Ship Lease to be useful measures of its performance.
Reconciliations of such non-GAAP measures to the most directly
comparable US GAAP measure are provided in this Earnings
Release.
Operating Revenues and Utilization
The 18 vessel fleet generated operating revenues from
fixed-rate, mainly long-term time charters of $37.9 million in the
three months ended December 31, 2017, down $3.5 million on
operating revenues of $41.4 million for the comparative period in
2016, with the reduction due mainly to the effect of (i) the
12-month extensions of the charters of Julie Delmas and Delmas Keta
effective mid-September 2017 at $7,800 per day compared to $18,465
per day previously and (ii) the new charter of GSL Tianjin to CMA
CGM effective late October 2017 at $13,000 per day compared to
$34,500 per day for the expiring charter to OOCL. There were
1,656 ownership days in the quarter, the same as in the comparable
period in 2016. In the fourth quarter 2017, there was no
planned offhire from regulatory drydocking and 10 days of unplanned
offhire, giving an overall utilization of 99.4%. There were a
total of 12 days offhire in the fourth quarter 2016, of which one
was unplanned and 11 were from regulatory drydockings, giving an
overall utilization of 99.3%.
For the year ended December 31, 2017, operating revenues were
$159.0 million, down $7.5 million or 4.5% on operating revenues of
$166.5 million in the prior year, mainly due to the effect of the
amendments to the charters noted above and, in addition, a stepdown
from the previous charter rate of $18,465 per day for Marie Delmas
and Kumasi, effective August 1, 2016, following amendments to these
charters, whereby the charter rate reduced to $13,000 per day and
further reduced to $9,800 per day from mid-September 2017 as we
exercised the first of three options in our favor to extend the
charters to end 2018.
The table below shows fleet utilization for the three months and
years ended December 31, 2017 and 2016 and for the years ended
December 31, 2015, 2014 and 2013.
|
|
|
|
|
|
|
|
|
Three months ended |
Year ended |
|
|
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
Days |
2017 |
2016 |
2017 |
2016 |
2015 |
2014 |
2013 |
|
|
|
|
|
|
|
|
Ownership days |
1,656 |
1,656 |
6,570 |
6,588 |
6,893 |
6,270 |
6,205 |
Planned offhire -
scheduled drydock |
0 |
(11) |
(62) |
(100) |
(9) |
(48) |
(21) |
Unplanned offhire |
(10) |
(1) |
(40) |
(3) |
(7) |
(12) |
(7) |
Idle time |
0 |
0 |
0 |
0 |
(13) |
(64) |
0 |
Operating days |
1,646 |
1,644 |
6,468 |
6,485 |
6,864 |
6,146 |
6,177 |
|
|
|
|
|
|
|
|
Utilization |
99.4% |
99.3% |
98.4% |
98.4% |
99.6% |
98.0% |
99.5% |
There were four regulatory drydockings in 2017 and six in
2016. Two regulatory drydockings are due in 2018.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, repairs, maintenance and insurance, were $11.6
million for the three months ended December 31, 2017, compared to
$11.2 million in the prior year period. The average cost per
ownership day in the quarter was $6,992, compared to $6,772 for the
prior year period, up $220 per day or 3.2%. The increase is
mainly attributable to insurance deductibles incurred in the three
months ended December 31, 2017.
For the year ended December 31, 2017, vessel operating expenses
were $43.5 million, or an average of $6,614 per day, compared to
$45.7 million in the prior year period or $6,936 per day. The
$322, or 4.6%, reduction in vessel operating expenses per day is
due mainly to lower repair and maintenance costs, partly offset by
increased costs for insurance deductibles.
Depreciation
Depreciation for the three months ended December 31, 2017 was
$9.4 million, compared to $10.4 million in the fourth quarter 2016;
the reduction is due to the effect of lower book values for a
number of vessels following impairment write downs taken in the
third and fourth quarters of 2016.
Depreciation for the year ended December 31, 2017 was $38.0
million, compared to $42.8 million in the prior year.
Impairment
The Company’s accounting policies require that tangible fixed
assets such as vessels are reviewed for impairment when events or
changes in circumstances indicate that their carrying amounts may
not be recoverable.
In October 2017, the Company agreed a new charter for GSL
Tianjin with CMA CGM. 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. This new charter was
subsequently extended with effect from January 26, 2018 for a
period of eight to 12 months (at the charterer’s option) at a fixed
rate of $11,900 per day. The new charter to CMA CGM triggered
the performance of an impairment test on the vessel. No impairment
was identified.
Charter rates in the spot market and asset values saw
improvements through 2017. Whilst market developments are
encouraging, taking into account the seasonal as well as cyclical
nature of the container shipping industry, we determined that it
would nonetheless be appropriate under US GAAP to undertake a
fleet-wide review for impairment as at December 31, 2017.
This review gave rise to a non-cash charge in the fourth quarter of
$87.6 million, as the sum of the expected undiscounted future cash
flows from five vessels over their estimated remaining useful lives
was less than the carrying amounts. The impairment charge was
equal to the amount by which the assets’ carrying amounts exceed
their fair values. Fair value was assessed, on a vessel by
vessel basis, as the net present value of estimated future cash
flows, discounted by an appropriate discount rate.
An impairment review was performed for the three months ended
December 31, 2016 on all vessels, due to continued poor industry
conditions. This gave rise to a non-cash charge in the fourth
quarter of $63.1 million on four vessels.
Including a non-cash impairment charge of $29.4 million that was
recognized in the three months ended September 30, 2016, following
our agreement with CMA CGM to amend and extend the charters of the
Marie Delmas and Kumasi, the total non-cash impairment charge for
the year ended December 31, 2016 was $92.4 million.
General and Administrative Costs
General and administrative costs were $1.5 million in the three
months ended December 31, 2017, compared to $1.7 million in the
fourth quarter of 2016; the reduction is due mainly to lower staff
costs and legal and professional fees.
For the year ended December 31, 2017, general and administrative
costs were $5.3 million, compared to $6.3 million for 2016; the
reduction is again mainly due to lower staff costs and legal and
professional fees.
Other Operating Income
Other operating income in the three months ended December 31,
2017 was $1,000, compared to $41,000 in the fourth quarter
2016.
For the year ended December 31, 2017, other operating income was
$51,000, compared to $0.2 million for 2016.
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was $24.8 million for
the three months ended December 31, 2017, down from $28.6 million
for the three months ended December 31, 2016, mainly as a result of
lower revenue, offset by lower vessel operating expenses.
Adjusted EBITDA for the year ended December 31, 2017 was $110.3
million, compared to $114.7 million for 2016 with the reduction
mainly as a result of lower revenue.
Interest Expense
Debt at December 31, 2017 comprised $360.0 million outstanding
on our new 9.875% notes due 2022 and $54.8 million under the new
secured term loan, both of which were closed in October 2017 as
part of a re-financing. The net proceeds, together with cash
on hand, were used to refinance our previous 10.000% notes due
2019. In addition, all outstanding borrowings under both the
previous revolving credit facility and the previous secured term
loan were repaid and terminated.
Debt at December 31, 2016 comprised amounts outstanding on our
10.000% notes, the revolving credit facility and the secured term
loan.
Interest expense for the three months ended December 31, 2017,
was $27.0 million, up $17.6 million on the interest expense for the
three months ended December 31, 2016 of $9.5 million. The
increase is mainly due to the consequences of the refinancing
completed in October 2017, which resulted in a premium on the
redemption of the 2019 Notes of $8.7 million, the write off of the
remaining balance of original issue discount associated with the
2019 notes of $1.4 million and the write off of the remaining
balance of deferred financing charges of $4.3 million associated
with debt repaid. In contrast, interest expense for the three
months ended December 31, 2016 benefitted from a $1.9 million gain
on the open market purchases of $18.0 million principal amount of
the 2019 notes in November 2016.
For the year ended December 31, 2017, interest expense was $59.4
million, up $14.6 million on interest expense of $44.8 million for
the year ended December 31, 2016. The increase is mainly for
the reasons noted above.
Interest income for the three months ended December 31, 2017 was
$154,000, up from $59,000 in the comparative period in 2016 due to
higher average cash balances and increased interest rates.
Interest income for the year ended December 31, 2017 was $489,000,
compared to $198,000 in 2016.
Taxation
Taxation for the three months ended December 31, 2017 was a
charge of $9,000, compared to $14,000 in the fourth quarter of
2016.
Taxation for the year ended December 31, 2017 was a charge of
$40,000, compared to $46,000 for 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 December 31, 2017 was $0.8
million; the same as in the comparative period.
The cost in the year ended December 31, 2017 was $3.1 million;
the same as in the comparative period.
Net (Loss) Available to Common Shareholders and Normalized Net
Income
Net loss for the three months ended December 31, 2017 was $99.8
million, after the costs and charges totaling $14.4 million
associated with the refinancing completed in October 2017 and the
non-cash impairment charge of $87.6 million. For the three
months ended December 31, 2016, net loss was $55.1 million, after
the $63.1 million non-cash impairment charge.
Normalized net income for the three months ended December 31,
2017 was $2.2 million, adjusting for the costs associated with the
refinancing, compared to $6.1 million in the comparative period in
2016, adjusting mainly for the non-cash impairment charge.
Net loss was $77.3 million for the year ended December 31, 2017
after the $87.6 million non-cash impairment charge. Net loss
was $68.2 million for the year ended December 31, 2016 after the
$92.4 million non-cash impairment charge.
Normalized net income for the year ended December 31, 2017 was
$25.2 million and was $22.4 million for the prior year.
Fleet
The following table provides information about the on-the-water
fleet of 18 vessels as at December 31, 2017, updated for subsequent
charter extensions. 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 |
2.0 |
Sept
21, 2019 |
15,300 |
CMA CGM Utrillo |
2,262 |
1999 |
Dec
2007 |
1.9 |
Sept
11, 2019 |
15,300 |
Delmas Keta |
2,207 |
2003 |
Dec
2007 |
0.7 |
Aug 6,
2018 |
7,800 |
Julie Delmas |
2,207 |
2002 |
Dec
2007 |
0.7 |
Jul
28, 2018 |
7,800 |
Kumasi |
2,207 |
2002 |
Dec
2007 |
1.0 -
3.0(3) |
Nov
16, 2018 |
9,800 |
Marie Delmas |
2,207 |
2002 |
Dec
2007 |
1.0 -
3.0(3) |
Nov
16, 2018 |
9,800 |
CMA CGM La Tour |
2,272 |
2001 |
Dec
2007 |
2.0 |
Sept
20, 2019 |
15,300 |
CMA CGM Manet |
2,272 |
2001 |
Dec
2007 |
1.9 |
Sept
7, 2019 |
15,300 |
CMA CGM Alcazar |
5,089 |
2007 |
Jan
2008 |
3.0 |
Oct
18, 2020 |
33,750 |
CMA CGM Château
d’If |
5,089 |
2007 |
Jan
2008 |
3.0 |
Oct
11, 2020 |
33,750 |
CMA CGM Thalassa |
11,040 |
2008 |
Dec
2008 |
8.0 |
Oct 1,
2025 |
47,200 |
CMA CGM Jamaica |
4,298 |
2006 |
Dec
2008 |
5.0 |
Sept
17, 2022 |
25,350 |
CMA CGM Sambhar |
4,045 |
2006 |
Dec
2008 |
5.0 |
Sept
16, 2022 |
25,350 |
CMA CGM America |
4,045 |
2006 |
Dec
2008 |
5.0 |
Sept
19, 2022 |
25,350 |
CMA CGM Berlioz |
6,621 |
2001 |
Aug
2009 |
3.7 |
May
28, 2021 |
34,000 |
GSL
Tianjin(4) |
8,063 |
2005 |
Oct
2014 |
0.9 |
Sept
26, 2018 |
11,900 |
OOCL
Qingdao(5) |
8,063 |
2004 |
Mar
2015 |
1.1 |
Jan 1,
2019 |
14,000 |
OOCL Ningbo |
8,063 |
2004 |
Sep
2015 |
0.8 |
Sep
17, 2018 |
34,500 |
|
|
|
|
|
|
(1) Twenty-foot Equivalent Units. |
|
|
|
|
|
|
|
|
|
|
|
(2) As at December 31, 2017 to mid-point of re-delivery
period, updated for subsequent charter extensions. Plus or minus 90
days, other than (i) Julie Delmas and Delmas Keta which are plus or
minus 45 days, (ii) Kumasi and Marie Delmas see footnote 3 below,
(iii) GSL Tianjin which is now between September 26, 2018 and
January 26, 2019 see footnote 4 below, (iv) OOCL Qingdao which is
now between January 1, 2019 and March 15, 2019 see footnote 5 below
and (v) OOCL Ningbo which is between September 17, 2018 and
December 17, 2018, all at charterer’s option. |
|
(3) The charters for Kumasi and Marie Delmas were amended in
July 2016 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. |
|
(4) A new
time charter for GSL Tianjin, formerly named OOCL 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
for a period of three to eight months at the charterer’s option.
The charter was extended with effect from January 26, 2018 at a
fixed rate of $11,900 per day for a period of eight to 12 months,
at charterer’s option. The new period is reflected in the
table. |
|
(5) In
February 2018 we agreed to an extension of our charter with OOCL
for the OOCL Qingdao. The extension commences in direct
continuation of the current charter with effect from March 11,
2018, at a fixed rate of $14,000 per day. Earliest redelivery
is now January 1, 2019, with latest redelivery March 15, 2019, at
charterer's option. The new period is reflected in the table. |
Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the
Company's results for the three months ended December 31, 2017
today, Monday March 5, 2018 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: 4072849Please 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 Wednesday, March 21, 2018 at (855)
859-2056 or (404) 537-3406. Enter the code 4072849 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 2017 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 mainly 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 December 31, 2017 of 13.0 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 December 31, 2017 is 2.8
years or 3.2 years on a weighted basis, taking into account the
charter extensions recently agreed for GSL Tianjin and OOCL
Qingdao.
Reconciliation of Non-U.S. GAAP Financial
Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and
expense including amortization of deferred finance costs, earnings
allocated to preferred shares, income taxes, depreciation,
amortization and impairment. Adjusted EBITDA is a non-US GAAP
quantitative measure used to assist in the assessment of the
Company's ability to generate cash from its operations. We
believe that the presentation of Adjusted EBITDA is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. Adjusted EBITDA is not defined in
US GAAP and should not be considered to be an alternate to Net
income or any other financial metric required by such accounting
principles. Our use of Adjusted EBITDA may vary from the use
of similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands
of U.S. dollars) |
|
|
Three |
Three |
|
|
|
|
months |
months |
Year |
Year |
|
|
ended |
ended |
ended |
ended |
|
|
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
|
|
2017 |
2016 |
2017 |
2016 |
|
|
|
|
|
|
Net (loss)
available to common shareholders |
(99,824) |
(55,072) |
(77,328) |
(68,157) |
|
|
|
|
|
|
Adjust: |
Depreciation |
9,394 |
10,415 |
37,981 |
42,805 |
|
Impairment |
87,624 |
63,065 |
87,624 |
92,422 |
|
Interest
income |
(154) |
(59) |
(489) |
(198) |
|
Interest
expense |
27,021 |
9,450 |
59,391 |
44,767 |
|
Earnings
allocated to preferred shares |
765 |
765 |
3,062 |
3,062 |
|
Income
tax |
9 |
14 |
40 |
46 |
|
|
|
|
|
|
Adjusted
EBITDA |
24,835 |
28,578 |
110,281 |
114,747 |
|
|
|
|
|
B. Normalized net income
Normalized net income represents net income adjusted for the
premium paid on the tender offer for the Notes and the gain made on
open market purchases of the Notes, together with the related
accelerated amortization of deferred financing costs and original
issue discount, and for impairment charges. Normalized net income
is a non-GAAP quantitative measure which we believe will assist
investors and analysts who often adjust reported net income for
non-operating items that do not affect operating performance or
operating cash generated. Normalized net income is not defined in
US GAAP and should not be considered to be an alternate to net
income or any other financial metric required by such accounting
principles. Our use of Normalized net income may vary from
the use of similarly titled measures by others in our industry.
NORMALIZED NET INCOME - UNAUDITED
(thousands
of U.S. dollars) |
|
|
Three |
Three |
|
|
|
|
months |
months |
Year |
Year |
|
|
ended |
ended |
Ended |
ended |
|
|
Dec
31, |
Dec
31, |
Dec
31, |
Dec
31, |
|
|
2017 |
2016 |
2017 |
2016 |
|
|
|
|
|
|
Net (loss)
available to common shareholders |
(99,824) |
(55,072) |
(77,328) |
(68,157) |
|
|
|
|
|
|
Adjust: |
Impairment charge |
87,624 |
63,065 |
87,624 |
92,422 |
|
Premium paid on
redemption of 2019 Notes |
8,657 |
--- |
9,047 |
533 |
|
Accelerated write off
of deferred financing charges related to 2019 Notes |
4,310 |
34 |
4,371 |
134 |
|
Accelerated write off
of original issue discount related to 2019 notes |
1,423 |
51 |
1,492 |
374 |
|
Gain on purchase of
2019 Notes |
--- |
(1,938) |
--- |
(2,865) |
Normalized
net income |
2,190 |
6,140 |
25,206 |
22,441 |
|
|
|
|
|
Safe Harbor Statement
This communication contains forward-looking statements.
Forward-looking statements provide Global Ship Lease's current
expectations or forecasts of future events. Forward-looking
statements include statements about Global Ship Lease's
expectations, beliefs, plans, objectives, intentions, assumptions
and other statements that are not historical facts. Words or
phrases such as "anticipate," "believe," "continue," "estimate,"
"expect," "intend," "may," "ongoing," "plan," "potential,"
"predict," "project," "will" or similar words or phrases, or the
negatives of those words or phrases, may identify forward-looking
statements, but the absence of these words does not necessarily
mean that a statement is not forward-looking. These forward-looking
statements are based on assumptions that may be incorrect, and
Global Ship Lease cannot assure you that these projections included
in these forward-looking statements will come to pass. Actual
results could differ materially from those expressed or implied by
the forward-looking statements as a result of various factors. The
risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container
shipping industry, including the rates of annual demand and supply
growth;
- the financial condition of our charterers, particularly CMA
CGM, our principal charterer and main source of operating revenue,
and their ability to pay charterhire in accordance with the
charters;
- Global Ship Lease’s financial condition and liquidity,
including its ability to obtain additional waivers which might be
necessary under the existing credit facility or obtain additional
financing to fund capital expenditures, vessel acquisitions and
other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and
repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments
and forecasts of its ability to make such payments including the
availability of cash and the impact of constraints under its credit
facility;
- future acquisitions, business strategy and expected capital
spending;
- operating expenses, availability of crew, number of off-hire
days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends,
including charter rates and factors affecting supply and
demand;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional
economies;
- risks incidental to vessel operation, including piracy,
discharge of pollutants and vessel accidents and damage including
total or constructive total loss;
- estimated future capital expenditures needed to preserve its
capital base;
- Global Ship Lease’s expectations about the availability of
ships to purchase, the time that it may take to construct new
ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew
long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate
time charters;
- Global Ship Lease’s ability to capitalize on its management’s
and board of directors’ relationships and reputations in the
containership industry to its advantage;
- changes in governmental and classification societies’ rules and
regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on
commercially reasonable terms;
- unanticipated changes in laws and regulations including
taxation;
- potential liability from future litigation.
Forward-looking statements are subject to known and unknown
risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
Global Ship Lease's actual results could differ materially from
those anticipated in forward-looking statements for many reasons
specifically as described in Global Ship Lease's filings with the
SEC. Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this
communication. Global Ship Lease undertakes no obligation to
publicly revise any forward-looking statement to reflect
circumstances or events after the date of this communication or to
reflect the occurrence of unanticipated events. You should,
however, review the factors and risks Global Ship Lease describes
in the reports it will file from time to time with the SEC after
the date of this communication.
|
Global Ship Lease, Inc. |
|
|
|
|
|
|
Interim Unaudited Consolidated
Statements of Income |
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars except share
data) |
|
|
|
|
|
|
|
|
Three months ended December |
|
Year ended |
|
|
|
31, |
|
December 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter
revenue |
|
$ |
7,022 |
|
$ |
9,444 |
|
$ |
35,044 |
|
$ |
37,567 |
|
Time charter revenue –
related party |
|
|
30,849 |
|
|
31,982 |
|
|
123,944 |
|
|
128,956 |
|
|
|
|
37,871 |
|
|
41,426 |
|
|
158,988 |
|
|
166,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating
expenses |
|
|
11,179 |
|
|
10,814 |
|
|
41,858 |
|
|
44,096 |
|
Vessel operating
expenses – related party |
|
|
400 |
|
|
400 |
|
|
1,599 |
|
|
1,599 |
|
Depreciation |
|
|
9,394 |
|
|
10,415 |
|
|
37,981 |
|
|
42,805 |
|
Impairment of
vessels |
|
|
87,624 |
|
|
63,065 |
|
|
87,624 |
|
|
92,422 |
|
General and
administrative |
|
|
1,458 |
|
|
1,675 |
|
|
5,301 |
|
|
6,297 |
|
Other operating
income |
|
|
(1) |
|
|
(41) |
|
|
(51) |
|
|
(216) |
|
Total operating
expenses |
|
|
110,054 |
|
|
86,328 |
|
|
174,312 |
|
|
187,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
|
(72,183) |
|
|
(44,902) |
|
|
(15,324) |
|
|
(20,480) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non Operating Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
154 |
|
|
59 |
|
|
489 |
|
|
198 |
|
Interest expense |
|
|
(27,021) |
|
|
(9,450) |
|
|
(59,391) |
|
|
(44,767) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
Income Taxes |
|
|
(99,050) |
|
|
(54,293) |
|
|
(74,226) |
|
|
(65,049) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
(9) |
|
|
(14) |
|
|
(40) |
|
|
(46) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(99,059) |
|
$ |
(54,307) |
|
$ |
(74,266) |
|
$ |
(65,095) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings allocated to
Series B Preferred Shares |
|
|
(765) |
|
|
(765) |
|
|
(3,062) |
|
|
(3,062) |
|
Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
available to
Common Shareholders |
|
$ |
(99,824) |
|
$ |
(55,072) |
|
$ |
(77,328) |
|
$ |
(68,157) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of Class A common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(including RSUs without service conditions) |
|
|
47,976,722 |
|
|
47,867,266 |
|
|
47,975,889 |
|
|
47,854,351 |
|
Diluted |
|
|
47,976,722 |
|
|
47,867,266 |
|
|
47,975,889 |
|
|
47,854,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per Class A common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(including RSUs without service conditions) |
|
$ |
(2.08) |
|
$ |
(1.15) |
|
$ |
(1.61) |
|
$ |
(1.42) |
|
Diluted |
|
$ |
(2.08) |
|
$ |
(1.15) |
|
$ |
(1.61) |
|
$ |
(1.42) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of Class B common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
7,405,956 |
|
|
7,405,956 |
|
|
7,405,956 |
|
|
7,405,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per Class B common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
Global Ship Lease, Inc. |
|
|
|
Interim Unaudited Consolidated Balance
Sheets |
|
|
|
(Expressed in thousands of U.S. dollars) |
|
|
|
December 31,2017 |
|
|
December 31,2016 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
73,266 |
|
|
$ |
54,243 |
|
Accounts
receivable |
|
|
72 |
|
|
|
29 |
|
Due from related
party |
|
|
1,932 |
|
|
|
906 |
|
Prepaid expenses |
|
|
918 |
|
|
|
1,146 |
|
Other receivables |
|
|
458 |
|
|
|
52 |
|
Inventory |
|
|
742 |
|
|
|
553 |
|
Total current
assets |
|
|
77,388 |
|
|
|
56,929 |
|
|
|
|
|
|
|
|
|
|
Vessels in
operation |
|
|
597,779 |
|
|
|
719,110 |
|
Other fixed assets |
|
|
10 |
|
|
|
7 |
|
Intangible assets |
|
|
7 |
|
|
|
16 |
|
Other long term
assets |
|
|
- |
|
|
|
195 |
|
Total non-current
assets |
|
|
597,796 |
|
|
|
719,328 |
|
Total
Assets |
|
$ |
675,184 |
|
|
$ |
776,257 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long
term debt |
|
$ |
40,000 |
|
|
$ |
31,026 |
|
Intangible liability –
charter agreements |
|
|
1,771 |
|
|
|
1,807 |
|
Deferred revenue |
|
|
2,178 |
|
|
|
1,940 |
|
Accounts payable |
|
|
1,486 |
|
|
|
963 |
|
Due to related
party |
|
|
2,813 |
|
|
|
1,315 |
|
Accrued expenses |
|
|
8,788 |
|
|
|
11,664 |
|
Total current
liabilities |
|
|
57,036 |
|
|
|
48,715 |
|
|
|
|
|
|
|
|
|
|
Long term debt |
|
|
358,515 |
|
|
|
388,847 |
|
Intangible liability –
charter agreements |
|
|
8,011 |
|
|
|
9,782 |
|
Deferred tax
liability |
|
|
17 |
|
|
|
20 |
|
Total long term
liabilities |
|
|
366,543 |
|
|
|
398,649 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
$ |
423,579 |
|
|
$ |
447,364 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common stock –
authorized214,000,000 shares with a $0.01 par value; 47,609,734
shares issued and outstanding (2016 – 47,541,484) |
|
$ |
476 |
|
|
$ |
476 |
|
Class B Common stock –
authorized20,000,000 shares with a $0.01 par value;7,405,956 shares
issued and outstanding (2016 – 7,405,956) |
|
|
74 |
|
|
|
74 |
|
Series B Preferred
shares – authorized16,100 shares with $0.01 par value;14,000 shares
issued and outstanding (2016 – 14,000) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Additional paid in
capital |
|
|
386,748 |
|
|
|
386,708 |
|
Accumulated
deficit |
|
|
(135,693 |
) |
|
|
(58,365 |
) |
Total
Stockholders’ Equity |
|
|
251,605 |
|
|
|
328,893 |
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
675,184 |
|
|
$ |
776,257 |
|
|
|
|
|
|
|
|
|
|
Global Ship Lease, Inc. |
|
Interim Unaudited Consolidated Statements of
Cash Flows |
|
(Expressed in thousands of U.S. dollars) |
|
|
|
Three months ended December
31, |
|
Year endedDecember
31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities |
|
|
|
|
|
Net loss |
|
$ |
(99,059) |
|
$ |
(54,307) |
|
$ |
(74,266) |
|
$ |
(65,095) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
Reconcile Net loss to Net Cash Provided by Operating
Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
9,394 |
|
|
10,415 |
|
|
37,981 |
|
|
42,805 |
|
Vessel impairment |
|
|
87,624 |
|
|
63,065 |
|
|
87,624 |
|
|
92,422 |
|
Amortization of
deferred financing costs |
|
|
5,159 |
|
|
941 |
|
|
7,772 |
|
|
3,622 |
|
Amortization of
original issue discount |
|
|
1,640 |
|
|
402 |
|
|
2,523 |
|
|
1,651 |
|
Amortization of
intangible liability |
|
|
(451) |
|
|
(515) |
|
|
(1,807) |
|
|
(2,104) |
|
Share based
compensation |
|
|
272 |
|
|
83 |
|
|
272 |
|
|
283 |
|
Gain on repurchase of
secured notes |
|
|
- |
|
|
(1,938) |
|
|
- |
|
|
(2,865) |
|
Decrease (increase) in
accounts receivable and other assets |
|
|
1,464 |
|
|
681 |
|
|
(441) |
|
|
219 |
|
(Increase) decrease in
inventory |
|
|
(113) |
|
|
37 |
|
|
(188) |
|
|
57 |
|
Increase (decrease) in
accounts payable and other liabilities |
|
|
5,465 |
|
|
9,330 |
|
|
(3,030) |
|
|
(1,751) |
|
(Decrease) increase in
unearned revenue |
|
|
(670) |
|
|
233 |
|
|
238 |
|
|
1,144 |
|
Increase (decrease) in
related party balances |
|
|
465 |
|
|
(699) |
|
|
1,138 |
|
|
738 |
|
Unrealized foreign
exchange (gain) loss |
|
|
(4) |
|
|
33 |
|
|
2 |
|
|
26 |
|
Net Cash
Provided by Operating Activities |
|
|
11,186 |
|
|
27,761 |
|
|
57,818 |
|
|
71,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale
of vessels |
|
|
- |
|
|
- |
|
|
- |
|
|
(254) |
|
Cash paid for vessel
improvements |
|
|
(155) |
|
|
- |
|
|
(255) |
|
|
- |
|
Cash paid for other
assets |
|
|
- |
|
|
- |
|
|
(8) |
|
|
(6) |
|
Cash paid for
drydockings |
|
|
- |
|
|
(2,513) |
|
|
(4,632) |
|
|
(6,681) |
|
Net Cash Used
in Investing Activities |
|
|
(155) |
|
|
(2,513) |
|
|
(4,895) |
|
|
(6,941) |
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of secured
notes |
|
|
(346,287) |
|
|
(16,061) |
|
|
(365,788) |
|
|
(50,997) |
|
Proceeds from issue of
secured notes |
|
|
356,400 |
|
|
- |
|
|
356,400 |
|
|
- |
|
Proceeds from drawdown
of term loan |
|
|
54,800 |
|
|
- |
|
|
54,800 |
|
|
- |
|
Deferred financing
costs incurred |
|
|
(12,675) |
|
|
- |
|
|
(12,675) |
|
|
- |
|
Repayment of credit
facilities |
|
|
(54,800) |
|
|
(2,925) |
|
|
(63,575) |
|
|
(9,500) |
|
Series B Preferred
Shares – dividends paid |
|
|
(765) |
|
|
(765) |
|
|
(3,062) |
|
|
(3,062) |
|
Net Cash Used
in Financing Activities |
|
|
(3,327) |
|
|
(19,751) |
|
|
(33,900) |
|
|
(63,559) |
|
Net increase in
Cash and Cash Equivalents |
|
|
7,704 |
|
|
5,497 |
|
|
19,023 |
|
|
652 |
|
Cash and Cash
Equivalents at Start of Period |
|
|
65,562 |
|
|
48,746 |
|
|
54,243 |
|
|
53,591 |
|
Cash and Cash
Equivalents at End of Period |
|
$ |
73,266 |
|
$ |
54,243 |
|
$ |
73,266 |
|
$ |
54,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
paid |
|
$ |
5,161 |
|
$ |
881 |
|
$ |
43,152 |
|
$ |
43,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax paid |
|
$ |
10 |
|
$ |
13 |
|
$ |
46 |
|
$ |
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Global Ship Lease (NYSE:GSL)
Historical Stock Chart
From Apr 2023 to Apr 2024