Eagle Bulk Shipping Inc. (NASDAQ:EGLE) (the “Company” or “Eagle
Bulk”), one of the world’s largest owner-operators in the Supramax
/ Ultramax segment, today reported financial results for the three
and twelve months ended December 31, 2017.
Highlights for the Quarter:
- Generated net revenues of $74.6 million, representing an
increase of 78% compared to the same period in 2016.
- TCE Revenues (1) for the quarter equated to $45.1
million, an increase of 107% year-on-year.
- Achieved a TCE (2)of $10,452 for the quarter, or an increase of
73% year-on-year.
- Realized a net loss of $16.6 million or $0.24 per share,
compared to a net loss of $142.4 million or $2.96 per share for the
comparable quarter in 2016.
- Net loss, excluding loss on debt extinguishment, of $1.6
million, or $0.02 per share.
- Adjusted EBITDA(3) of $17.2 million, representing an increase
of 105% compared to prior quarter.
- Completed $265 million debt refinancing, extending maturities
to 2022 and lowering overall interest cost.
- Through issuance of fixed coupon bond, eliminated exposure to
rising interest rates on 60% of the Company's debt.
- Acquired another CROWN-63, 64,000 dwt, 2015 built Ultramax
vessel for $21.3 million.
- Looking ahead into the first quarter of 2018, attained a TCE of
$11,015 with approximately 90% of the days fixed for the period
thus far.
Gary Vogel, Eagle Bulk's CEO, commented, "During
the fourth quarter, Eagle Bulk’s active management operating model
drove outperformance of the benchmark Baltic Supramax Index for the
fourth consecutive quarter, resulting in positive operating income
for the first time in seven years. We believe our results are
indicative of a competitive advantage that will benefit us as
market conditions continue to improve.
We are also pleased to have completed a comprehensive
refinancing in December that significantly strengthened our balance
sheet, lowered borrowing costs and extended maturities. In
the process, we also gained financial flexibility to ensure that we
can act opportunistically and deliver value to our
shareholders."
1 TCE revenue is a non-GAAP financial measure. See the
reconciliation and table of revenues to TCE revenue later in this
release for more information on non-GAAP measures.2 TCE is a
non-GAAP financial measure. See the reconciliation and the table of
revenues to TCE later in this release for more information on
non-GAAP measures. 3
Adjusted EBITDA is a non-GAAP financial measure. See the
reconciliation and table of net loss to EBITDA and Adjusted EBITDA
later in this release for more information on non-GAAP financial
measures.
Fleet Operating Data
|
|
Three Months Ended |
|
For the Years Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Ownership Days |
|
4,383 |
|
|
3,720 |
|
|
16,293 |
|
|
15,408 |
|
Chartered in Days |
|
1,050 |
|
|
749 |
|
|
3,353 |
|
|
1,494 |
|
Available Days |
|
5,374 |
|
|
4,403 |
|
|
19,245 |
|
|
16,695 |
|
Operating Days |
|
5,334 |
|
|
4,343 |
|
|
19,140 |
|
|
16,485 |
|
Fleet Utilization
(%) |
|
99.3 |
% |
|
98.6 |
% |
|
99.5 |
% |
|
98.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of Operations for the three
months and years ended December 31, 2017 and 2016
For the three months ended December 31,
2017, the Company reported a net loss of $16.6 million, or $0.24
per share, based on a weighted average of 70,368,623 diluted shares
outstanding. In the comparable quarter of 2016, the Company
reported a net loss of $142.4 million, or $2.96 per share, based on
a weighted average of 48,106,827 diluted shares outstanding.
For the year ended December 31, 2017, the
Company reported a net loss of $43.8 million, or $0.63 per share,
based on a weighted average of 69,182,302 diluted shares
outstanding. For the year ended December 31, 2016, the Company
reported a net loss of $223.5 million, or $10.87 per share, based
on a weighted average of 20,565,652 diluted shares
outstanding.
The net loss, excluding loss on debt
extinguishment, for the fourth quarter of 2017 was $1.6 million
compared to $19.5 million in fourth quarter of 2016 excluding
vessel impairment. The improvement of $17.9 million is mainly due
to improvement in charter rates achieved by the Company in the
fourth quarter of 2017.
The net loss excluding loss on debt
extinguishment for the year ended December 31, 2017 was $28.8
million or $0.42 per share based on weighted average of 69,182,302
diluted shares outstanding. In the comparable period of 2016, the
Company reported a net loss, excluding vessel impairment and
restructuring charges, of $88.6 million or $4.31 per share based on
weighted average of 20,565,652 diluted shares outstanding.
Net time and voyage charter revenues
Net time and voyage charter revenues for the
three months ended December 31, 2017 were $74.6 million
compared with $41.8 million recorded in the comparable quarter in
2016. The increase in revenue was primarily due to an increase in
charter hire rates as well as an increase in the size of the
Company's owned fleet resulting from the purchase of 10 Ultramax
vessels offset by the sale of four vessels as well as an increase
in the chartered in vessels in 2017.
Net revenues for the year ended December 31,
2017 were $236.8 million compared to $124.5 million for the year
ended December 31, 2016. Net revenues increased by 90% compared to
the prior year ended December 31, 2016 primarily due to an increase
in charter hire rates attributable to an improvement in the dry
bulk market and increase in available days. The increase in
available days was due to the acquisition of 10 Ultramax vessels
and an increase in chartered-in days offset by the sale of four
vessels during 2017. The chartered-in days for the year ended
December 31, 2017 were 3,353 compared to 1,494 in the prior
year.
Voyage expenses
Voyage expenses for the three months ended
December 31, 2017 were $18.2 million compared to $14.2 million
in the comparable quarter in 2016. The increase was mainly
attributable to an increase in the number of freight voyages in the
current quarter compared to the comparable quarter in the prior
year as well as increased bunker prices year over year.
Voyage expenses for the years ended
December 31, 2017 and 2016 were $62.4 million and $42.1
million, respectively. Voyage expenses have primarily increased due
to an increase in bunker prices as well as an increased
number of freight voyages performed in the current year compared to
the prior year.
Vessel expenses
Vessel expenses for the three months ended
December 31, 2017 were $21.2 million compared to $17.2 million
in the comparable quarter in 2016. The increase in vessel expenses
is attributable to the increase in the size of the Company's owned
fleet after the acquisition of 11 Ultramax vessels in the fourth
quarter of 2016 and during 2017 which was partially offset by
vessel sales in the years 2016 and 2017. The ownership days for the
three months ended December 31, 2017 and December 31, 2016 were
4,383 and 3,720, respectively.
Average daily vessel operating expenses for our
fleet for the three months ended December 31, 2017 and
December 31, 2016 were $4,844 and $4,633, respectively.
Vessel expenses for the years ended
December 31, 2017 and 2016 were $78.6 million and $74.0
million, respectively. The increase in vessel expenses is
attributable to the increase in the size of the Company's owned
fleet due to the purchase of 10 Ultramax vessels offset by the sale
of four vessels during 2017 and four vessels during 2016. The
ownership days for the year ended December 31, 2017 were 16,293
compared to 15,408 for the prior year ended December 31, 2016.
Average daily vessel operating expenses for our
fleet for the year ended December 31, 2017 were $4,825 compared to
$4,803 for the year ended December 31, 2016.
Charter hire expenses
Charter hire expenses for the three months ended
December 31, 2017 were $11.3 million compared to $5.9 million
in the comparable quarter in 2016. The increase in charter hire
expense was principally due to an increase in the number of
chartered in vessels as we expand on our commercial platform. The
total chartered in days for the three months ended
December 31, 2017 were 1,050 compared to 749 for the
comparable quarter in the prior year.
Charter hire expenses for the years ended
December 31, 2017 and 2016 were $31.3 million and $12.8
million, respectively. The increase in charter hire expenses in
2017 compared with 2016 was mainly due to an increase in short term
chartered-in vessels resulting from successful implementation of
our business strategy. The chartered-in operating days for 2017
were 3,353 compared to 1,494 in 2016. The Company currently
charters in one vessel on a long term basis.
Depreciation and amortization
Depreciation and amortization expense for the
three months ended December 31, 2017 and 2016 was $9.2 million
and $10.0 million, respectively. Total depreciation and
amortization expense for the three months ended December 31,
2017 includes $7.9 million of vessel and other fixed asset
depreciation and $1.3 million relating to the amortization of
deferred drydocking costs. Comparable amounts for the three months
ended December 31, 2016 were $9.0 million of vessel and other
fixed asset depreciation and $1.0 million of amortization of
deferred drydocking costs. The decrease in depreciation expense is
attributable to the sale of vessels during 2016 and 2017 and lower
book value of vessels subsequent to impairment charges aggregating
$129.0 million recorded in the first and fourth quarters of 2016
offset by the purchase of 11 Ultramax vessels in the fourth quarter
of 2016 and during 2017. The amortization of drydock expense
increased by $0.3 million due to additional amortization of three
vessels which were drydocked in the third quarter of 2017.
Depreciation and amortization expense for the
years ended December 31, 2017 and 2016 was $33.7 million and
$38.9 million, respectively. Total depreciation and amortization
expense for the year ended December 31, 2017 includes $29.4
million of vessel and other fixed assets depreciation and $4.3
million relating to the amortization of deferred drydocking costs.
Comparable amounts for the year ended December 31, 2016 were
$35.6 million of vessel and other fixed asset depreciation and $3.3
million of amortization of deferred drydocking costs. The decrease
was primarily due to a lower depreciation base after the impairment
write down of $122.0 million in the fourth quarter of 2016 and $6.1
million in the first quarter of 2016 and the sale of four vessels
during 2017 and five vessels during 2016 offset by the purchase
of 10 Ultramax vessels during 2017 and one Ultramax vessel
during the fourth quarter of 2016.
General and administrative expenses
General and administrative expenses for the
three months ended December 31, 2017 and 2016 were $8.1
million and $7.5 million, respectively. These general and
administrative expenses include stock-based compensation of $1.7
million and $1.3 million for 2017 and 2016, respectively. The
increase in general and administrative expenses was mainly
attributable to increases in stock-based compensation expense.
General and administrative expenses for the
years ended December 31, 2017 and 2016 were $33.1 million and
$22.9 million, respectively. These general and administrative
expenses include stock-based compensation of $8.7 million and $2.2
million for 2017 and 2016, respectively. The increase in general
and administrative expenses in 2017 was primarily due to an
increase in stock-based compensation expenses due to additional
stock grants in the fourth quarter of 2016 and first quarter of
2017 and compensation expense due to increased head count. The
higher General and administrative expenses are reflective of the
expansion of our operating platform. Additionally, the general and
administrative expenses for the year ended December 31, 2016
included the reversal of approximately $1.4 million of stock-based
compensation expense relating to the forfeited stock awards granted
to the former Chief Financial Officer.
Interest expense
Interest expense for the three months ended
December 31, 2017 and 2016 was $8.2 million and $6.6 million,
respectively. The increase in interest expense is primarily due to
interest expense on the Ultraco Debt Facility and the Norwegian
Bond Debt offset by savings on interest expense on the Second Lien
Facility.
Interest expense for the years ended
December 31, 2017 and 2016 was $29.4 million and $21.8
million, respectively. The increase in interest expense is
primarily due to the payment-in-kind interest on our Second Lien
Facility and change in our debt structure which includes additional
debt under the Ultraco Debt Facility, the Norwegian Bond Debt and
the First Lien Facility. The interest expense for the year
ended December 31, 2016 included only nine months of
payment-in-kind interest expense and amortization of deferred
financing costs because the Second Lien Facility was closed on
March 30, 2016.
Restructuring charges
Restructuring charges for the year ended
December 31, 2016 were $5.9 million. These costs primarily relate
to the professional fees incurred in connection with the
restructuring transaction, which was closed on March 30, 2016.
Liquidity and Capital
Resources
Net cash provided by operating activities for
the year ended 2017 was $7.4 million, compared with net cash used
in operating activities of $45.4 million in 2016. The increase in
cash flow provided by operations resulted from an increase in the
charter hire rates achieved by the Company coupled with an
improving dry bulk market offset by negative working capital
changes as an increasing percentage of our revenue is earned on
voyage charters as opposed to time charters.
Net cash used in investing activities for the
year ended 2017 was $155.2 million, compared to $9.3 million in the
prior year. During 2017, the Company purchased 10 Ultramax vessels
for $174.4 million and made an advance on the purchase of one
Ultramax vessel for $2.2 million. This was partially offset by the
proceeds from sale of four vessels for $26.0 million. During
2017, the Company purchased a certificate of deposit maturing in
one year of $4.5 million. During 2016, the Company purchased a 2016
built Ultramax for $18.9 million. In addition, the Company paid
$1.9 million as an advance payment for the acquisition of a 2017
built Ultramax. The Company sold four vessels during 2016 for net
proceeds of $13.0 million during the year.
Net cash provided by financing activities for
the year ended December 31, 2017 was $127.6 million compared
with $106.3 million for the year ended December 31, 2016. The
Company received net proceeds of $96.0 million in the December
Private Placement, which closed on January 20, 2017 and repaid
$13.0 million of its term loan under the First Lien Facility from
the proceeds of the sale of the vessels Redwing, Sparrow, Woodstar
and Wren. Additionally, the Company completed a refinancing of
approximately $191.0 million under the First Lien Facility and
$77.4 million under the Second Lien Facility through the New First
Lien Facility of $65.0 million and issuance of $200.0 million
Senior Secured Bonds issued at a discount of $1.9 million. The
Company received $61.2 million from the Ultraco Debt Facility in
the second quarter of 2017 and paid $0.9 million to the lender. The
Company paid $0.9 million to the lenders of the New First Lien
Facility as part of the debt refinancing transaction. The Company
also paid $5.2 million in other financing costs in connection with
the refinancing transaction.
In 2016, the Company received net proceeds of
$85.7 million from a private common stock placement, which closed
on August 10, 2016, $60.0 million received from our Second Lien
Loan Facility and $15.2 million from the revolver under the First
Lien Facility offset by repayment of $21.3 million of our term loan
and $30.2 million of our revolver each under the First Lien
Facility. The Company also paid $3.1 million in deferred financing
costs.
As of December 31, 2017, our cash and cash
equivalents balance was $56.3 million compared to a cash and cash
equivalents balance of $76.5 million at December 31, 2016.
As of December 31, 2017, the total
availability in the revolving credit facility under the Super
Senior Facility was $15.0 million.
As of December 31, 2017, the Company’s debt
consisted of $200.0 millions in outstanding bonds, net of $6.0
million debt discount and debt issuance costs under the Norwegian
Bond Debt, $65.0 million in term loan and revolver, net of $1.2
million debt discount and debt issuance costs under the New First
Lien Facility and $61.2 million, net of $1.2 million debt discount
and debt issuance costs under the Ultraco Debt Facility.
Capital Expenditures and
Drydocking
Our capital expenditures relate to the purchase
of vessels and capital improvements to our vessels which are
expected to enhance the revenue earning capabilities and safety of
these vessels.
In addition to acquisitions that we may
undertake in future periods, the Company's other major capital
expenditures include funding the Company's program of regularly
scheduled drydocking necessary to comply with international
shipping standards and environmental laws and regulations. Although
the Company has some flexibility regarding the timing of its
drydocking, the costs are relatively predictable. Management
anticipates that vessels are to be drydocked every two and a half
years for vessels older than 15 years and five years for vessels
younger than 15 years. Funding of these requirements is anticipated
to be met with cash from operations. We anticipate that this
process of recertification will require us to reposition these
vessels from a discharge port to shipyard facilities, which will
reduce our available days and operating days during that
period.
Drydocking costs incurred are deferred and
amortized to expense on a straight-line basis over the period
through the date of the next scheduled drydocking for those
vessels. In 2017, three of our vessels were drydocked and we
incurred $2.6 million in drydocking related costs. In 2016, nine of
our vessels were drydocked and we incurred $3.7 million in
drydocking related costs.
The following table represents certain
information about the estimated costs for anticipated vessel
drydockings in the next four quarters, along with the anticipated
off-hire days:
Quarter Ending |
|
Off-hire Days (1) |
|
Projected Costs (2) |
March 31, 2018 |
|
66 |
|
$1.95
million |
June 30, 2018 |
|
66 |
|
$1.95
million |
September 30, 2018 |
|
88 |
|
$2.60
million |
December
31, 2018 |
|
44 |
|
$1.30 million |
(1) Actual duration of drydocking will vary based
on the condition of the vessel, yard schedules and other
factors.(2) Actual costs will vary based on various factors,
including where the drydockings are actually performed. |
SUMMARY CONSOLIDATED FINANCIAL AND OTHER
DATA
The following table summarizes the Company’s selected
consolidated financial and other data for the periods indicated
below.
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
For the Three Months Ended |
|
For the Years Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Revenues, net |
|
$ |
74,587,441 |
|
|
$ |
41,835,941 |
|
|
$ |
236,784,625 |
|
|
$ |
124,492,844 |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
18,155,542 |
|
|
14,191,559 |
|
|
62,351,252 |
|
|
42,093,714 |
|
Vessel expenses |
|
21,232,800 |
|
|
17,233,582 |
|
|
78,607,244 |
|
|
74,016,763 |
|
Charter hire
expenses |
|
11,312,576 |
|
|
5,866,255 |
|
|
31,283,956 |
|
|
12,845,468 |
|
Depreciation and
amortization |
|
9,196,289 |
|
|
9,979,264 |
|
|
33,690,686 |
|
|
38,884,322 |
|
General and
administrative expenses |
|
8,136,572 |
|
|
7,475,958 |
|
|
33,126,310 |
|
|
22,905,802 |
|
Restructuring
expenses |
|
— |
|
|
— |
|
|
— |
|
|
5,869,025 |
|
Loss / (gain) on sale
of vessels |
|
(34,381 |
) |
|
— |
|
|
(2,134,767 |
) |
|
101,860 |
|
Vessel impairment |
|
— |
|
|
122,860,600 |
|
|
— |
|
|
129,027,862 |
|
Total operating
expenses |
|
67,999,398 |
|
|
177,607,218 |
|
|
236,924,681 |
|
|
325,744,816 |
|
|
|
|
|
|
|
|
|
|
Operating
income/(loss) |
|
6,588,043 |
|
|
(135,771,277 |
) |
|
(140,056 |
) |
|
(201,251,972 |
) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
8,236,248 |
|
|
6,644,487 |
|
|
29,376,994 |
|
|
21,799,146 |
|
Interest income |
|
(132,690 |
) |
|
(123,827 |
) |
|
(651,069 |
) |
|
(215,433 |
) |
Other (income) /
expense |
|
100,301 |
|
|
97,211 |
|
|
(37,905 |
) |
|
686,750 |
|
Loss on debt
extinguishment |
|
14,968,609 |
|
|
— |
|
|
14,968,609 |
|
|
— |
|
Total other expense,
net |
|
23,172,468 |
|
|
6,617,871 |
|
|
43,656,629 |
|
|
22,270,463 |
|
Net loss |
|
$ |
(16,584,425 |
) |
|
$ |
(142,389,148 |
) |
|
$ |
(43,796,685 |
) |
|
$ |
(223,522,435 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
70,368,623 |
|
|
48,106,827 |
|
|
69,182,302 |
|
|
20,565,652 |
|
Diluted |
|
70,368,623 |
|
|
48,106,827 |
|
|
69,182,302 |
|
|
20,565,652 |
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic net loss |
|
$ |
(0.24 |
) |
|
$ |
(2.96 |
) |
|
$ |
(0.63 |
) |
|
$ |
(10.87 |
) |
Diluted net loss |
|
$ |
(0.24 |
) |
|
$ |
(2.96 |
) |
|
$ |
(0.63 |
) |
|
$ |
(10.87 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
|
|
December 31, 2017 |
|
December 31, 2016 |
ASSETS: |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
56,251,044 |
|
|
$ |
76,516,110 |
|
Accounts
receivable |
|
17,246,540 |
|
|
5,089,708 |
|
Prepaid expenses |
|
3,010,766 |
|
|
3,093,962 |
|
Short-term
investment |
|
4,500,000 |
|
|
— |
|
Inventories |
|
14,113,079 |
|
|
10,876,713 |
|
Vessel held for
sale |
|
9,316,095 |
|
|
8,688,601 |
|
Other current
assets |
|
785,027 |
|
|
22 |
|
Total current
assets |
|
105,222,551 |
|
|
104,265,116 |
|
Noncurrent
assets: |
|
|
|
|
Vessels and vessel
improvements, at cost, net of accumulated depreciation of
$99,910,416 and $76,463,743, respectively |
|
690,236,419 |
|
|
567,592,950 |
|
Advance for vessel
purchase |
|
2,201,773 |
|
|
1,926,886 |
|
Other fixed assets, net
of accumulated amortization of $343,799 and $307,880,
respectively |
|
617,343 |
|
|
632,805 |
|
Restricted cash |
|
74,917 |
|
|
74,917 |
|
Deferred financing
costs - Super Senior Revolver Facility |
|
190,000 |
|
|
— |
|
Deferred drydock costs,
net |
|
9,749,751 |
|
|
11,507,309 |
|
Other assets |
|
57,181 |
|
|
381,634 |
|
Total noncurrent
assets |
|
703,127,384 |
|
|
582,116,501 |
|
Total
assets |
|
$ |
808,349,935 |
|
|
$ |
686,381,617 |
|
LIABILITIES
& STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
7,470,844 |
|
|
$ |
7,135,156 |
|
Accrued interest |
|
1,790,315 |
|
|
28,872 |
|
Other accrued
liabilities |
|
11,810,366 |
|
|
11,545,447 |
|
Fair value of
derivatives |
|
73,170 |
|
|
— |
|
Fair value below
contract value of time charters acquired |
|
— |
|
|
820,313 |
|
Unearned charter hire
revenue |
|
5,678,673 |
|
|
6,046,032 |
|
Current portion of
long-term debt - Norwegian Bond Debt |
|
4,000,000 |
|
|
— |
|
Total current
liabilities |
|
30,823,368 |
|
|
25,575,820 |
|
Noncurrent
liabilities: |
|
|
|
|
First Lien Facility,
net of debt discount and debt issuance costs |
|
— |
|
|
204,352,318 |
|
Second Lien Facility,
inclusive of payment-in-kind interest, net of debt discount and
debt issuance costs |
|
— |
|
|
51,591,226 |
|
Norwegian Bond Debt,
net of debt discount and debt issuance costs |
|
189,950,329 |
|
|
— |
|
New First Lien
Facility, net of debt discount and debt issuance costs |
|
63,758,185 |
|
|
— |
|
Ultraco Debt Facility,
net of debt discount and debt issuance costs |
|
59,975,162 |
|
|
— |
|
Other liabilities |
|
177,846 |
|
|
483,132 |
|
Fair value below
contract value of time charters acquired |
|
2,500,012 |
|
|
3,896,482 |
|
Total noncurrent
liabilities |
|
316,361,534 |
|
|
260,323,158 |
|
Total
liabilities |
|
347,184,902 |
|
|
285,898,978 |
|
Commitment and
contingencies |
|
|
|
|
Stockholders'
equity: |
|
|
|
|
Preferred stock, $.01
par value, 25,000,000 shares authorized, none issued as of December
31, 2017 and 2016 |
|
— |
|
|
— |
|
Common stock, $.01 par
value, 700,000,000 shares authorized, 70,394,307 and 48,106,827
shares issued and outstanding as of December 31, 2017 and 2016,
respectively |
|
703,944 |
|
|
481,069 |
|
Additional paid-in
capital |
|
887,625,902 |
|
|
783,369,698 |
|
Accumulated
deficit |
|
(427,164,813 |
) |
|
(383,368,128 |
) |
Total stockholders'
equity |
|
461,165,033 |
|
|
400,482,639 |
|
Total liabilities and
stockholders' equity |
|
$ |
808,349,935 |
|
|
$ |
686,381,617 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED CASH FLOWS
|
|
For the Years Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
Cash flows from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(43,796,685 |
) |
|
$ |
(223,522,435 |
) |
Adjustments to
reconcile net loss to net cash provided by/(used in) operating
activities: |
|
|
|
|
Depreciation |
|
29,354,017 |
|
|
35,556,911 |
|
Amortization of
deferred drydocking costs |
|
4,336,669 |
|
|
3,327,411 |
|
Amortization of debt
discount and debt issuance costs |
|
5,927,984 |
|
|
4,532,481 |
|
Loss on debt
extinguishment |
|
14,968,609 |
|
|
— |
|
Amortization of fair
value below contract value of time charter acquired |
|
(716,783 |
) |
|
(661,253 |
) |
Payment-in-kind
interest on debt |
|
10,098,401 |
|
|
7,327,843 |
|
(Gain)/loss on sale of
vessels, net |
|
(2,134,767 |
) |
|
101,860 |
|
Vessel impairment |
|
— |
|
|
129,027,862 |
|
Realized loss from sale
of investment |
|
— |
|
|
— |
|
Net unrealized loss on
fair value of derivatives |
|
(55,675 |
) |
|
— |
|
Fess paid on
termination of time charter contract |
|
(1,500,000 |
) |
|
— |
|
Stock-based
compensation expense |
|
8,738,615 |
|
|
2,206,690 |
|
Drydocking
expenditures |
|
(2,579,111 |
) |
|
(3,688,711 |
) |
Changes in operating
assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
(12,156,832 |
) |
|
1,986,820 |
|
Other current and
non-current assets |
|
(331,707 |
) |
|
(26,799 |
) |
Prepaid expenses |
|
83,196 |
|
|
138,801 |
|
Inventories |
|
(3,236,366 |
) |
|
(5,302,307 |
) |
Accounts payable |
|
335,688 |
|
|
(1,081,317 |
) |
Accrued interest |
|
1,761,443 |
|
|
(372,360 |
) |
Other accrued and
non-current liabilities |
|
(1,340,366 |
) |
|
528,563 |
|
Unearned revenue |
|
(367,359 |
) |
|
4,485,630 |
|
Net cash
provided by/(used in) operating activities |
|
7,388,971 |
|
|
(45,434,310 |
) |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Vessel purchases and
improvements |
|
(174,400,746 |
) |
|
(19,860,401 |
) |
Advance for vessel
purchase |
|
(2,201,773 |
) |
|
(1,926,886 |
) |
Proceeds from sale of
investment |
|
— |
|
|
— |
|
Purchase of short-term
investment |
|
(4,500,000 |
) |
|
— |
|
Proceeds from sale of
vessels |
|
26,042,000 |
|
|
13,001,000 |
|
Purchase of other fixed
assets |
|
(189,120 |
) |
|
(560,348 |
) |
Changes in restricted
cash |
|
— |
|
|
66,244 |
|
Net cash used
in investing activities |
|
(155,249,639 |
) |
|
(9,280,391 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Repayment of First Lien
Facility |
|
(184,099,000 |
) |
|
(21,276,000 |
) |
Repayment of revolver
under the First Lien Facility |
|
(25,000,000 |
) |
|
(30,158,500 |
) |
Repayment of Second
Lien Facility |
|
(77,426,244 |
) |
|
— |
|
Proceeds from Revolver
Loan facility |
|
— |
|
|
15,158,500 |
|
Proceeds from Second
Lien Facility |
|
— |
|
|
60,000,000 |
|
Proceeds from common
stock placement, net of issuance costs |
|
96,030,003 |
|
|
85,700,535 |
|
Proceeds from the
Norwegian Bond Debt, net of discount |
|
198,092,000 |
|
|
— |
|
Proceeds from the New
First Lien Facility |
|
65,000,000 |
|
|
— |
|
Proceeds from the
Ultraco Debt Facility |
|
61,200,000 |
|
|
— |
|
Financing costs paid to
lenders |
|
(2,025,514 |
) |
|
— |
|
Other financing
costs |
|
(3,886,104 |
) |
|
(3,086,947 |
) |
Cash used to settle net
share equity awards |
|
(289,539 |
) |
|
(2,938 |
) |
Net cash
provided by financing activities |
|
127,595,602 |
|
|
106,334,650 |
|
Net increase/(decrease)
in cash and cash equivalents |
|
(20,265,066 |
) |
|
51,619,949 |
|
Cash and cash
equivalents at beginning of period |
|
76,516,110 |
|
|
24,896,161 |
|
Cash and cash
equivalents at end of period |
|
$ |
56,251,044 |
|
|
$ |
76,516,110 |
|
|
|
|
|
|
Reconciliation
of Net Loss to EBITDA and
Adjusted EBITDA
In addition to the Company’s financial results
reported in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) included in this
press release, the Company has provided certain financial measures
that are not calculated according to GAAP, including EBITDA and
Adjusted EBITDA. We define EBITDA as net income /(loss) under GAAP
attributable to the Company adjusted for interest, income taxes,
depreciation and amortization.
Adjusted EBITDA is a non-GAAP financial measure
that is used as a supplemental financial measure by our management
and by external users of our financial statements, such as
investors, commercial banks and others, to assess our operating
performance as compared to that of other companies in our industry,
without regard to financing methods, capital structure or
historical costs basis. Our Adjusted EBITDA should not be
considered an alternative to net income (loss), operating income
(loss), cash flows provided by (used in) operating activities or
any other measure of financial performance or liquidity presented
in accordance with U.S. GAAP. Our Adjusted EBITDA may not be
comparable to similarly titled measures of another company because
all companies may not calculate Adjusted EBITDA in the same
manner. Adjusted EBITDA represents EBITDA adjusted to exclude
the items which represent certain non-cash, one-time and other
items such as vessel impairment, gain / loss on sale of vessels,
restructuring expenses and stock-based compensation expenses that
the Company believes are not indicative of the ongoing performance
of its core operations. The following table presents a
reconciliation of our net loss to EBITDA and Adjusted EBITDA.
|
|
Three Months Ended |
|
For the Years Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Net loss |
|
$ |
(16,584,425 |
) |
|
$ |
(142,389,148 |
) |
|
$ |
(43,796,685 |
) |
|
$ |
(223,522,435 |
) |
Adjustments to
reconcile net loss to EBITDA: |
|
|
|
|
|
|
|
|
Interest expense |
|
8,236,248 |
|
|
6,644,487 |
|
|
29,376,994 |
|
|
21,799,146 |
|
Interest Income |
|
(132,690 |
) |
|
(123,827 |
) |
|
(651,069 |
) |
|
(215,433 |
) |
Income taxes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
EBIT |
|
(8,480,867 |
) |
|
(135,868,488 |
) |
|
(15,070,760 |
) |
|
(201,938,722 |
) |
Depreciation and
amortization |
|
9,196,289 |
|
|
9,979,264 |
|
|
33,690,686 |
|
|
38,884,322 |
|
EBITDA |
|
715,422 |
|
|
(125,889,224 |
) |
|
18,619,926 |
|
|
(163,054,400 |
) |
Non-cash, one-time and
other adjustments to EBITDA(1): |
|
16,503,408 |
|
|
123,928,662 |
|
|
20,855,674 |
|
|
136,544,184 |
|
Adjusted EBITDA |
|
$ |
17,218,830 |
|
|
$ |
(1,960,562 |
) |
|
$ |
39,475,600 |
|
|
$ |
(26,510,216 |
) |
(1) One-time and other adjustments to EBITDA includes;
loss on debt extinguishment, vessel impairment, restructuring
charges, stock-based compensation, (gain)/loss on sale of vessels
and amortization of fair value below contract value of time charter
acquired.
Reconciliation of net revenues to
TCE
Time charter equivalent ("TCE") is a non-GAAP
financial measure that is commonly used in shipping industry
primarily to compare daily earnings generated by vessels on time
charters with daily earnings generated by vessels on voyage
charters, because charter hire rates for vessels on voyage charters
are generally not expressed in per-day amounts while charter hire
rates for vessels on time charters generally are expressed in such
amounts. The Company defines TCE as shipping revenues less voyage
expenses and charter hire expenses, adjusted for the impact of one
legacy time charter and gains on FFAs and bunker swaps, divided by
the number of owned available days. TCE provides additional
meaningful information in conjunction with shipping revenues, the
most directly comparable GAAP measure, because it assists Company
management in making decisions regarding the deployment and use of
its vessels and in evaluating their financial performance. The
Company's calculation of TCE may not be comparable to that reported
by other companies. Owned available days is the number of our
ownership days less the aggregate number of days that our vessels
are off-hire due to vessel familiarization upon acquisition,
repairs, vessel upgrades or special surveys. The shipping industry
uses available days to measure the number of days in a period
during which vessels should be capable of generating revenues.
|
|
Three Months Ended |
|
For the Years Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Revenues, net |
|
$ |
74,587,441 |
|
|
$ |
41,835,941 |
|
|
$ |
236,784,625 |
|
|
$ |
124,492,844 |
|
Less: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
(18,155,542 |
) |
|
(14,191,559 |
) |
|
(62,351,252 |
) |
|
(42,093,714 |
) |
Charter hire
expenses |
|
(11,312,576 |
) |
|
(5,866,255 |
) |
|
(31,283,956 |
) |
|
(12,845,468 |
) |
Reversal of one legacy
time charter |
|
426,037 |
|
|
431,516 |
|
|
1,036,738 |
|
|
2,938,611 |
|
Realized gain/loss on
FFAs and bunker swaps |
|
(348,908 |
) |
|
(112,523 |
) |
|
(17,770 |
) |
|
(561,495 |
) |
TCE revenue |
|
$ |
45,196,452 |
|
|
$ |
22,097,120 |
|
|
$ |
144,168,385 |
|
|
$ |
71,930,778 |
|
|
|
|
|
|
|
|
|
|
Owned available
days |
|
4,324 |
|
|
3,653 |
|
|
15,891 |
|
|
15,201 |
|
TCE |
|
$ |
10,452 |
|
|
$ |
6,049 |
|
|
$ |
9,072 |
|
|
$ |
4,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glossary of Terms:
Ownership days: We define ownership days as the
aggregate number of days in a period during which each vessel in
our fleet has been owned by us. Ownership days are an indicator of
the size of our fleet over a period and affect both the amount of
revenues and the amount of expenses that we recorded during a
period.
Chartered-in under operating lease days: We
define chartered-in under operating lease days as the aggregate
number of days in a period during which we chartered-in vessels.
Periodically, the Company charters in vessels on a single trip
basis.
Available days: We define available days, which
the Company has recently updated and reflected in the table above
in this press release to better reflect the way management views
the business, as the number of our ownership days and chartered-in
days less the aggregate number of days that our vessels are
off-hire due to vessel familiarization upon acquisition, repairs,
vessel upgrades or special surveys. The shipping industry uses
available days to measure the number of days in a period during
which vessels should be capable of generating revenues.
Operating days: We define operating days as the
number of available days in a period less the aggregate number of
days that our vessels are off-hire due to any reason, including
unforeseen circumstances. The shipping industry uses operating days
to measure the aggregate number of days in a period during which
vessels actually generate revenues.
Fleet utilization: We calculate fleet
utilization by dividing the number of our operating days during a
period by the number of our available days during the period. The
shipping industry uses fleet utilization to measure a company’s
efficiency in finding suitable employment for its vessels and
minimizing the amount of days that its vessels are off-hire for
reasons other than scheduled repairs or repairs under guarantee,
vessel upgrades, special surveys or vessel positioning. Our fleet
continues to perform at high utilization rates.
Definitions of capitalized
terms
Ultraco Debt Facility: Ultraco Debt Facility
refers to the credit facility for $61.2 million entered into by and
among Ultraco, a wholly-owned subsidiary of the Company, as
borrower,certain wholly-owned vessel-owning subsidiaries of
Ultraco, as guarantors (the “Ultraco Guarantors”), the lenders
thereunder (the “Ultraco Lenders”), the swap banks party thereto,
ABN AMRO Capital USA LLC, as facility agent and security trustee
for the Ultraco Lenders, ABN AMRO Capital USA LLC, DVB Bank SE and
Skandinaviska Enskilda Banken AB (publ), as mandated lead
arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner
on June 28, 2017. The proceeds were used to finance the acquisition
of nine Ultramax vessels from Greenship Bulk Manager Pte. Ltd
during the second and third quarters of 2017.
Norwegian Bond Debt: Norwegian Bond Debt refers
to the Senior Secured Bonds issued by Shipco, a wholly-owned
subsidiary of the Company on November 28, 2017 for $200.0 million,
pursuant to those certain Bond Terms, dated as of November 22,
2017, by and between Shipco, as issuer, and Nordic Trustee AS, a
company existing under the laws of Norway (the “Bond Trustee”). The
proceeds were used to repay the outstanding debt under the First
Lien Facility and the Second Lien Facility.
New First Lien Facility: New First Lien Facility
refers to the credit facility for $65.0 million (term loan and
revolver) entered into by and among Eagle Shipping LLC, a
wholly-owned subsidiary of the Company, as borrower,certain
wholly-owned vessel-owning subsidiaries of Eagle Shipping, as
guarantors (the “Guarantors”), the lenders thereunder (the
“Lenders”), the swap banks party thereto, ABN AMRO Capital USA LLC,
as facility agent and security trustee for the Lenders, ABN AMRO
Capital USA LLC, Credit Agricole Corporate and Investment Bank and
Skandinaviska Enskilda Banken AB (publ), as mandated lead
arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner
on December 8, 2017. The proceeds were used to repay the
outstanding debt under the First Lien Facility and the Second Lien
Facility.
First Lien Facility: First Lien Facility refers
to an Amended and Restated First Lien Loan Agreement, dated as of
March 30, 2016, made by, among others, Eagle Shipping LLC (“Eagle
Shipping”), a wholly-owned subsidiary of the Company, as borrower,
the banks and financial institutions party thereto and ABN AMRO
Capital USA LLC, as security trustee and facility agent. The debt
was fully discharged on December 8, 2017.
Second Lien Facility: Second Lien Facility
refers to Second Lien Credit Agreement, dated as of March 30, 2016,
made by, among others, Eagle Shipping LLC, as borrower, the
individuals and financial institutions party thereto and Wilmington
Savings Fund Society, FSB as second lien agent for $60.0 million.
The debt was fully discharged on December 8, 2017.
December Private Placement: December Private
Placement refers to the stock purchase agreement in December 2016
with certain investors (the “Investors”), pursuant to which the
Company agreed to issue to the Investors in a private placement
approximately 22.2 million shares of the Company’s common stock,
par value $0.01 per share, at an initial purchase price of $4.50
per share, for aggregate gross proceeds of $100.0 million. The
proceeds were primarily used to finance and acquire eleven Ultramax
vessels in the fourth quarter of 2016 and during 2017.
Super Senior Facility: Super Senior Revolver
Facility refers to the $15.0 million revolver facility entered into
by and among, Shipco, a wholly-owned subsidiary of the Company, as
borrower, and ABN AMRO Capital USA LLC, as original lender,
mandated lead arranger and agent. The facility is currently undrawn
and the $15.0 is fully available for acquisition of vessels or
working capital purposes.
Conference Call Information
As previously announced, members of Eagle Bulk's senior
management team will host a teleconference and webcast at 8:00 a.m.
ET on Tuesday, March 6, 2018, to discuss the fourth quarter
results.
To participate in the teleconference, investors and analysts are
invited to call 1 844-282-4411 in the U.S., or 1 512-900-2336
outside of the U.S., and reference participant code 8293919. A
simultaneous webcast of the call, including a slide presentation
for interested investors and others, may be accessed by visiting
http://www.eagleships.com.
A replay will be available following the call from 11:30 AM ET
on March 6, 2018 until 10:30 AM ET on March 15, 2018. To access the
replay, call 1 855-859-2056 in the U.S., or 1 404-537-3406 outside
of the U.S., and reference passcode 8396588.
About Eagle Bulk Shipping
Inc.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation
headquartered in Stamford, Connecticut. The Company owns one of the
largest fleets of Supramax / Ultramax dry bulk vessels in the
world. Supramax / Ultramax vessels are constructed with on-board
cranes and range in size from approximately 50,000 to 65,000 dwt.
The Company transports a broad range of major and minor bulk
cargoes, including but not limited to coal, grain, ore, pet coke,
cement and fertilizer, along worldwide shipping routes.
Website Information
We intend to use our website,
www.eagleships.com, as a means of disclosing material non-public
information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included in our website’s
Investor Relations section. Accordingly, investors should monitor
the Investor Relations portion of our website, in addition to
following our press releases, filings with the SEC, public
conference calls, and webcasts. To subscribe to our e-mail alert
service, please click the “Investor Alerts” link in the Investor
Relations section of our website and submit your email
address. The information contained in, or that may be accessed
through, our website is not incorporated by reference into or a
part of this document or any other report or document we file with
or furnish to the SEC, and any references to our website are
intended to be inactive textual references only.
Disclaimer:
Forward-Looking Statements
Matters discussed in this release may constitute
forward-looking statements that may be deemed to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements reflect 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. These statements may include words
such as “believe,” “estimate,” “project,” “intend,” “expect,”
“plan,” “anticipate,” and similar expressions in connection with
any discussion of the timing or nature of future operating or
financial performance or other events.
The forward-looking statements in this release
are based upon various assumptions, many of which are based, in
turn, upon further assumptions, including without limitation,
examination of historical operating trends, data contained in our
records and other data available from third parties. Although Eagle
Bulk Shipping Inc. 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, Eagle Bulk
Shipping Inc. 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 strength of world economies
and currencies, general market conditions, including changes in
charter hire rates and vessel values, changes in demand that may
affect attitudes of time charterers to scheduled and unscheduled
drydocking, changes in vessel operating expenses, including
drydocking and insurance costs, or actions taken by regulatory
authorities, ability of our counterparties to perform their
obligations under sales agreements, charter contracts, and other
agreements on a timely basis, potential liability from 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 Eagle Bulk Shipping Inc. with the SEC.
Contact:
Company Contact:Frank De CostanzoChief Financial
OfficerEagle Bulk Shipping Inc.Tel. +1 203-276-8100
Media:Jonathan MorganAlex HinsonPerry Street
Communications, New YorkTel. +1 212-741-0014
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