Navios Maritime Containers Inc. (“Navios Containers” or the
“Company”) (N-OTC: NMCI), a growth vehicle dedicated to the
container sector of the maritime industry, today reported financial
results for the second quarter and six months ended June 30, 2018.
HIGHLIGHTS -- RECENT DEVELOPMENTS
Vessel Acquisitions
Navios Containers acquired four containerships
since the end of the first quarter of 2018 for $131.2 million in
aggregate, increasing its total fleet size to 26 vessels with a
total fleet capacity of 124,101 TEU, including one containership of
which Navios Containers expects to take delivery in Q3/Q4 2018.
Fleet capacity has grown from 21 to 26 vessels since the end of
2017, representing a fleet capacity growth of 40% during the
period.
On July 30, Navios Containers agreed to acquire
one 2009-built 4,563 TEU containership from an unrelated third
party for a purchase price of $13.9 million. The Company expects to
take delivery of the vessel in Q3/Q4 2018. The acquisition of the
vessel is expected to be financed with $9.0 million of additional
bank debt on terms consistent with existing credit facilities and
the balance with available cash.
On July 2, 2018, Navios Containers took delivery
of the YM Utmost and YM Unity, two 2006-built 8,204 TEU
containerships. The vessels were acquired for an aggregate purchase
price of $67.0 million from Navios Maritime Partners L.P. (“Navios
Partners”). These vessels are time chartered out at a net daily
charter rate of $34,266 per vessel until August 2018 and October
2018, respectively. The acquisition of the YM Utmost and YM Unity
was unanimously approved by a Special Committee of the independent
members of the Board of Directors of Navios Containers. The
acquisition of the vessels from Navios Partners was financed with a
new $36.0 million term loan facility and the balance with available
cash. The term loan facility has an amortization profile of 7
years, matures in June 2022 and bears interest at LIBOR plus 325
bps per annum.
On May 30, 2018, Navios Containers took delivery
of the Navios Unison, a 2010-built, 10,000 TEU containership. The
vessel was acquired from an unrelated third party for a purchase
price of $50.3 million. The vessel is chartered out at a net rate
of $26,663 per day until March 2019. The acquisition of the vessel
was financed with cash on the balance sheet and a new $25.0 million
term loan facility. The facility has an amortization profile of 9
years, matures in May 2023 and bears interest at LIBOR plus 300 bps
per annum.
Acquisition of Five Containerships and Options to
Acquire Four Additional Containerships
As previously announced, Navios Containers
agreed to acquire five containerships for a total purchase price of
$246.0 million, including four 2011-built 10,000 TEU containerships
from an unrelated third party for $210.0 million and one 2006-built
6,800 TEU containership (the Hyundai Hongkong) from Navios Partners
for $36.0 million. Navios Containers also acquired options to
purchase an additional four containerships from Navios Partners for
a purchase price of $36.0 million per vessel. The acquisition
of the Hyundai Hongkong and the options to acquire the additional
four 6,800 TEU vessels were unanimously approved by the Special
Committee of the independent members of the Board of Directors of
Navios Containers.
All of the acquisitions are subject to certain
conditions, and there can be no assurances that these acquisitions
will occur in whole or in part. In addition, the Company may be
unable to secure financing for these acquisitions on terms
satisfactory to us, or at all.
New Sale and Leaseback Agreement -
Refinancing Existing Credit Facilities – Extending Maturities to
2023
As previously announced, on May 25, 2018, Navios
Containers entered into a $119.0 million sale and leaseback
transaction with Minsheng Financial Leasing Co. Ltd. in order to
refinance our outstanding credit facilities on 18 vessels maturing
in the fourth quarter of 2019, with a combined balance of $92.4
million outstanding on March 31, 2018. On June 29, 2018, the
Company completed the sale and leaseback of the first six vessels
for approximately $37.5 million. On July 27, 2018, the Company
completed the sale and leaseback of two additional vessels for
approximately $13.0 million. Navios Containers expects to complete
the sale and leaseback of the remaining 10 vessels during the third
quarter of 2018. Upon completion of the sale and leaseback
transaction, we will be obligated to make 60 monthly payments in
respect of all 18 vessels of approximately $1.4 million each.
Navios Containers also has an obligation to purchase the vessels at
the end of the fifth year for $59.5 million. No assurances can be
provided that the Company will successfully refinance these credit
facilities in full or that the terms will be as described in this
press release.
Fleet Development
Navios Containers owns a fleet of 26 vessels
totaling 124,101 TEU, including one containership of which Navios
Containers expects to take delivery in Q3/Q4 2018. The current
average age of the fleet is 10.3 years (See Exhibit II). As of July
26, 2018, Navios Containers has chartered-out 78.3% and 23.6% of
available days for the remaining six months of 2018 and for 2019,
respectively, which are expected to generate $63.9 million and
$50.6 million in revenue, respectively. The average expected daily
charter-out rate for the fleet is $17,453 and $22,564 for the
remaining six months of 2018 and for 2019, respectively and the
total expected available days for the remaining six months of 2018
and for 2019, are 4,674 days and 9,490 days, respectively.
Earnings Highlights
EBITDA is a non-U.S. GAAP financial measure and
should not be used in isolation or as substitute for Navios
Containers’ results calculated in accordance with U.S. GAAP.
See Exhibit I under the heading, “Disclosure of Non-GAAP Financial
Measures,” for a discussion of EBITDA of Navios Containers and a
reconciliation of this measure to the most comparable measures
calculated under U.S. GAAP.
Second Quarter 2018 and period from
April 28, 2017 (date of inception) to June 30, 2017 Results (in
thousands of U.S. dollars, except per share data and unless
otherwise stated):
The information for the second quarter 2018 and for the period
from April 28, 2017 (date of inception) to June 30, 2017 presented
below was derived from the unaudited condensed consolidated
financial statements for the respective periods.
|
|
|
|
|
Three Month Period Ended June 30,
2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
|
(unaudited) |
|
(unaudited) |
Revenue |
$ |
31,508 |
|
$ |
3,102 |
|
Net
Income |
$ |
4,487 |
|
$ |
881 |
|
Net cash
provided by/(used in) operating activities |
$ |
12,232 |
|
$ |
(1,491 |
) |
EBITDA |
$ |
16,657 |
|
$ |
2,281 |
|
Basic
Earnings per Share |
$ |
0.13 |
|
$ |
0.09 |
|
|
|
|
|
|
|
|
Revenue for the three month period ended June 30, 2018 was $31.5
million, as compared to $3.1 million for the period from April 28,
2017 (date of inception) to June 30, 2017. The increase is
due to the increase in the number of vessels operating during the
three month period ended June 30, 2018 and the resulting increase
in the number of available days from 115 days for the period from
April 28, 2017 (date of inception) to June 30, 2017, to 2,012 days
for the three month period ended June 30, 2018.
Net income for the three months ended June 30,
2018 was $4.5 million compared to $0.9 million for the period from
April 28, 2017 (date of inception) to June 30, 2017. The $3.6
million increase in Net income was mainly attributable to an
increase in revenue of $28.4 million reflecting the growth in the
number of vessels operating in the fleet during the period,
partially mitigated by (i) a $11.7 million increase in management
fees; (ii) a $1.6 million increase in general and administrative
expenses; (iii) a $0.7 million increase in time charter and voyage
expenses; (iv) an increase in depreciation and amortization of $8.6
million; (v) an increase in interest expense and finance cost, net
of $2.0 million related to the financing of new vessels; and (vi)
an increase in amortization of deferred drydock and special survey
costs of $0.2 million, in each case, relating to the increase in
the size of the fleet.
EBITDA for the three months ended June 30, 2018
increased by $14.4 million to $16.7 million as compared to $2.3
million for the period from April 28, 2017 (date of inception) to
June 30, 2017.
First Half of 2018 and period from April
28, 2017 (date of inception) to June 30, 2017 Results (in thousands
of U.S. dollars, except per share data and unless otherwise
stated):
The information for the six month period ended June 30, 2018 and
for the period from April 28, 2017 (date of inception) to June 30,
2017 presented below was derived from the unaudited condensed
consolidated financial statements for the respective periods.
|
|
|
|
|
Six Month Period Ended June
30, 2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
|
(unaudited) |
|
(unaudited) |
Revenue |
$ |
61,425 |
|
$ |
3,102 |
|
Net
Income |
$ |
7,528 |
|
$ |
881 |
|
Net cash
provided by/(used in) operating activities |
$ |
19,613 |
|
$ |
(1,491 |
) |
EBITDA |
$ |
32,363 |
|
$ |
2,281 |
|
Basic
Earnings per Share |
$ |
0.23 |
|
$ |
0.09 |
|
|
|
|
|
|
|
|
Revenue for the six month period ended June 30,
2018 was $61.4 million, as compared to $3.1 million for the period
from April 28, 2017 (date of inception) to June 30, 2017. The
increase is due to the increase in the number of vessels operating
during the three month period ended June 30, 2018 and the resulting
increase in the number of available days from 115 for the period
from April 28, 2017 (date of inception) to June 30, 2017, to 3,919
for the six month period ended June 30, 2018.
Net income for the six months ended June 30,
2018 was $7.5 million compared to $0.9 million for the period from
April 28, 2017 (date of inception) to June 30, 2017. The $6.6
million increase in Net income was mainly attributable to an
increase in revenue of $58.3 million, reflecting the growth in the
number of vessels operating in the fleet during the period,
partially offset by (i) a $23.4 million increase in management
fees; (ii) a $3.2 million increase in general and administrative
expenses; (iii) a $1.5 million increase in time charter and voyage
expenses; (iv) a $0.1 million increase in other expense, net; (v)
an increase in depreciation and amortization of $19.1 million; (vi)
an increase in interest expense and finance cost, net of $3.9
million related to the financing of new vessels; and (vii) an
increase in amortization of deferred drydock and special survey
costs of $0.5 million, in each case, relating to the increase in
the size of the fleet.
EBITDA for the six months ended June 30, 2018
increased by $30.1 million to $32.4 million as compared to $2.3
million for the period from April 28, 2017 (date of inception) to
June 30, 2017.
Fleet Summary Data:
The following table reflects certain key
indicators indicative of the performance of the Navios Containers'
operations and its fleet performance for the three and six month
periods ended June 30, 2018 and for the period from which the
vessels were delivered, June 8, 2017 through June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
Three Month |
|
Period from |
|
Six Month |
|
Period from |
|
|
|
Period Ended |
|
June 8, 2017 |
|
Period Ended |
|
June 8, 2017 |
|
|
|
June 30, |
|
to June 30, |
|
June 30, |
|
to June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Available
Days (1) |
|
|
2,012 |
|
|
|
115 |
|
|
|
3,919 |
|
|
|
115 |
|
|
Operating
Days (2) |
|
|
1,980 |
|
|
|
115 |
|
|
|
3,857 |
|
|
|
115 |
|
|
Fleet
Utilization (3) |
|
|
98.4 |
% |
|
|
100 |
% |
|
|
98.4 |
% |
|
|
100 |
% |
|
Vessels
operating at period end |
|
|
23 |
|
|
|
5 |
|
|
|
23 |
|
|
|
5 |
|
|
TCE
(4) |
|
$ |
15,308 |
|
|
$ |
26,968 |
|
|
$ |
15,284 |
|
|
$ |
26,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Available days for the fleet are total calendar days the
vessels were in Navios Containers' possession for the relevant
period after subtracting off-hire days associated with major
repairs, drydocking or special surveys. The shipping industry uses
available days to measure the number of days in a relevant period
during which vessels should be capable of generating revenues. |
(2) |
|
Operating days are the number of available days in the
relevant period less the aggregate number of days that the vessels
are off-hire due to any reason, including unforeseen circumstances.
The shipping industry uses operating days to measure the aggregate
number of days in a relevant period during which vessels actually
generate revenues. |
(3) |
|
Fleet utilization is the percentage of time that Navios
Containers' vessels were available for generating revenue, and is
determined by dividing the number of operating days during a
relevant period by the number of available days during that period.
The shipping industry uses fleet utilization to measure a company's
efficiency in finding suitable employment for its vessels. |
(4) |
|
TCE is defined as voyage and time charter revenues less
voyage expenses during a relevant period divided by the number of
available days during the period. |
|
|
|
About Navios Maritime Containers Inc.
Navios Maritime Containers Inc. (N-OTC: NMCI) is
a growth vehicle dedicated to the container sector of the maritime
industry. For more information, please visit its website at
www.navios-containers.com.
About Navios Maritime Holdings Inc.
Navios Maritime Holdings Inc. (NYSE: NM) is a
global, vertically integrated seaborne shipping and logistics
company focused on the transport and transshipment of dry bulk
commodities including iron ore, coal and grain. For more
information about Navios Holdings please visit its website:
www.navios.com.
About Navios Maritime Partners L.P.
Navios Maritime Partners L.P. (NYSE: NMM) is a publicly traded
master limited partnership which owns and operates container and
dry bulk vessels. For more information, please visit its website at
www.navios-mlp.com.
Forward Looking Statements - Safe Harbor
This press release contains forward-looking
statements concerning future events, including future contracted
revenues and rates, EBITDA, future available days, future financial
performance of the fleet, timing of vessel deliveries, vessel
acquisitions, financing activities, and Navios Containers' growth
strategy and measures to implement such strategy, including future
vessel acquisitions and the ability to secure or refinance related
financing, the further growth of our containership fleet, and
entering into further time charters. Words such as “may,”
“expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,”
“estimates,” and variations of such words and similar expressions
are intended to identify forward-looking statements. These
forward-looking statements are based on the information available
to, and the expectations and assumptions deemed reasonable by
Navios Containers at the time these statements were made. Although
Navios Containers believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct. These
statements involve known and unknown risks and are based upon a
number of assumptions and estimates which are inherently subject to
significant uncertainties and contingencies, many of which are
beyond the control of Navios Containers. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, risks relating to: the
favorable timing for acquisitions and chartering opportunities in
the container shipping sector and Navios Containers’ ability to
take advantage of such opportunities; the value of container
shipping vessels; Navios Containers’ ability to identify container
shipping vessels for acquisition at attractive prices, if at all,
including the availability of distressed acquisition opportunities
in the container shipping industry; Navios Containers’ ability to
execute on a low-cost operating structure; Navios Containers’
ability to achieve a return on investment for and to pay cash
distributions to our unit holders or make common unit repurchases
from our unit holders; the level of trade growth and recovery of
charter rates and asset values in the container shipping industry;
general market conditions and shipping industry trends, including
charter rates, vessel values and the future supply of, and demand
for, ocean-going containership shipping services; any advantages
resulting from Navios Containers’ strategic focus on
intermediate-size containerships; Navios Containers’ ability to
leverage the scale, experience, reputation and relationships of the
Navios Group, consisting of Navios Maritime Holdings Inc. (“Navios
Holdings”), Navios Maritime Acquisition Corporation, Navios
Partners, Navios Maritime Midstream Partners L.P., and any one or
more of their subsidiaries, including the wholly-owned subsidiary
of Navios Holdings which manages the commercial and technical
operation of Navios Containers’ fleet pursuant to a management
agreement (the “Manager”); Navios Containers’ ability to maintain
or develop new and existing customer relationships with existing
charterers and new customers, including liner companies; Navios
Containers’ ability to successfully grow its business and its
capacity to manage its expanding business; future levels of
dividends, as well as Navios Containers’ dividend policy; Navios
Containers’ current and future competitive strengths and business
strategies and other plans and objectives for future operations;
Navios Containers’ future operating and financial results, its
ability to identify and consummate desirable fleet acquisitions,
business strategy, areas of possible expansion and expected capital
expenditure or operating expenses; container shipping industry
trends, including charter rates and vessel values and factors
affecting vessel supply and demand as well as trends and conditions
in the newbuilding markets and scrapping of vessels; Navios
Containers’ future financial condition or results of operations and
its future revenues and expenses, including its estimated adjusted
cash flow; the loss of any customer or charter or vessel; the aging
of Navios Containers’ vessels and resultant increases in operation
and drydocking costs; the ability of Navios Containers’ vessels to
pass classification, security and customs inspections; significant
changes in vessel performance, including increased equipment
breakdowns; the creditworthiness of Navios Containers’ charterers
and the ability of its contract counterparties to fulfill their
obligations to Navios Containers; Navios Containers’ ability to
maintain long-term relationships with major liner companies; Navios
Containers’ ability to retain key executive officers and the
Manager’s ability to attract and retain skilled employees; Navios
Containers’ ability to access debt, credit and equity markets;
changes in the availability and costs of funding due to conditions
in the bank market, capital markets and other factors; Navios
Containers’ ability to repay outstanding indebtedness, to obtain
additional financing and to obtain replacement charters for its
vessels, in each case, at commercially acceptable rates or at all;
estimated future acquisition, maintenance and replacement
expenditures; potential liability from litigation and our vessel
operations, including discharge of pollutants; Navios Containers’
and the Navios Group’s performance in safety, environmental and
regulatory matters; global economic outlook and growth and changes
in general economic and business conditions; general domestic and
international political conditions, including wars, acts of piracy
and terrorism; changes in production of or demand for container
shipments, either globally or in particular regions; changes in the
standard of service or the ability of the Manager to be approved as
required; increases in costs and expenses, including but not
limited to, crew wages, insurance, technical maintenance costs,
spares, stores and supplies, charter brokerage commissions on gross
voyage revenues and general and administrative expenses; the
adequacy of Navios Containers’ insurance arrangements and its
ability to obtain insurance and required certifications; the
expected cost of, and Navios Containers’ ability to comply with,
governmental regulations and maritime self-regulatory organization
standards, as well as standard regulations imposed by its
charterers applicable to its business; the changes to the
regulatory requirements applicable to the shipping and container
transportation industry, including, without limitation, stricter
requirements adopted by international organizations, such as the
International Maritime Organization and the European Union, or by
individual countries or charterers and actions taken by regulatory
authorities and governing such areas as safety and environmental
compliance; the anticipated taxation of Navios Containers and its
shareholders; potential liability and costs due to environmental,
safety and other incidents involving Navios Containers’ vessels;
and the effects of increasing emphasis on environmental and safety
concerns by customers, governments and others, as well as changes
in maritime regulations and standards. Navios Containers expressly
disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Navios Containers' expectations
with respect thereto or any change in events, conditions or
circumstances on which any statement is based. Navios Containers
makes no prediction or statement about the performance of its
common stock.
Contact:
Navios Maritime Containers
Inc.+1.212.906.8648investors@navios-containers.com
|
|
EXHIBIT I |
|
|
|
NAVIOS MARITIME CONTAINERS
INC. |
|
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME |
|
(Expressed in thousands of U.S.
dollars - except for share and per share data) |
|
|
|
|
Three
Month Period Ended June 30,
2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
|
Six
Month Period Ended June 30,
2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Revenue |
|
$ |
31,508 |
|
|
|
$ |
3,102 |
|
|
|
$ |
61,425 |
|
|
$ |
3,102 |
|
|
Time
charter and voyage expenses |
|
|
(714 |
) |
|
|
|
(1 |
) |
|
|
|
(1,525 |
) |
|
|
(1 |
) |
|
Direct
vessel expenses |
|
|
(232 |
) |
|
|
|
— |
|
|
|
|
(460 |
) |
|
|
— |
|
|
Management
fees (entirely through related parties transactions) |
|
|
(12,449 |
) |
|
|
|
(702 |
) |
|
|
|
(24,088 |
) |
|
|
(702 |
) |
|
General and
administrative expenses |
|
|
(1,670 |
) |
|
|
|
(117 |
) |
|
|
|
(3,360 |
) |
|
|
(117 |
) |
|
Depreciation and amortization |
|
|
(9,871 |
) |
|
|
|
(1,320 |
) |
|
|
|
(20,437 |
) |
|
|
(1,320 |
) |
|
Interest
expense and finance cost, net |
|
|
(2,067 |
) |
|
|
|
(80 |
) |
|
|
|
(3,938 |
) |
|
|
(80 |
) |
|
Other
expense, net |
|
|
(18 |
) |
|
|
|
(1 |
) |
|
|
|
(89 |
) |
|
|
(1 |
) |
|
Net
income |
|
$ |
4,487 |
|
|
|
$ |
881 |
|
|
|
$ |
7,528 |
|
|
$ |
881 |
|
|
Net
earnings per share, basic and diluted |
|
$ |
0.13 |
|
|
|
$ |
0.09 |
|
|
|
$ |
0.23 |
|
|
$ |
0.09 |
|
|
Weighted average number of shares, basic and
diluted |
|
|
34,603,100 |
|
|
|
|
10,057,645 |
|
|
|
|
32,433,336 |
|
|
|
10,057,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAVIOS MARITIME CONTAINERS
INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Expressed in thousands of U.S. dollars –
except for share data) |
|
|
|
|
June 30, |
|
December 31, |
2018 |
2017 |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
40,455 |
$ |
14,221 |
Restricted cash |
|
|
645 |
|
280 |
Accounts receivable, net |
|
|
729 |
|
642 |
Balance due from related companies, current |
|
|
9,824 |
|
5,643 |
Inventories |
|
|
331 |
|
536 |
Prepaid and other current assets |
|
|
2,702 |
|
49 |
Total current assets |
|
|
54,686 |
|
21,371 |
|
|
|
|
|
|
Vessels, net |
|
|
239,129 |
|
177,597 |
Intangible assets |
|
|
39,700 |
|
58,496 |
Deferred dry dock and special survey costs, net |
|
|
4,743 |
|
3,582 |
Balance due from related companies, non-current |
|
|
7,038 |
|
5,765 |
Other long term assets |
|
|
457 |
|
— |
Total non-current assets |
|
|
291,067 |
|
245,440 |
Total assets |
|
$ |
345,753 |
$ |
266,811 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
|
$ |
1,470 |
$ |
582 |
Accrued expenses |
|
|
3,978 |
|
3,934 |
Deferred income and cash received in advance |
|
|
2,339 |
|
2,544 |
Finance lease liability short term, net |
|
|
3,111 |
|
— |
Current portion of long-term debt, net |
|
|
15,192 |
|
42,499 |
Total current liabilities |
|
|
26,090 |
|
49,559 |
Long-term finance lease liability, net of current
portion |
|
|
33,591 |
|
— |
Long-term debt, net of current portion |
|
|
108,771 |
|
76,534 |
Total non-current liabilities |
|
|
142,362 |
|
76,534 |
Total liabilities |
|
$ |
168,452 |
$ |
126,093 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
Common stock — $0.0001 par value, 75,000,000 authorized
registered ordinary shares, 34,603,100 and 29,148,554 issued and
outstanding as of June 30, 2018 and December 31, 2017. |
|
|
3 |
|
3 |
Additional paid-in capital |
|
|
167,132 |
|
138,077 |
Retained earnings |
|
|
10,166 |
|
2,638 |
Total stockholders’ equity |
|
|
177,301 |
|
140,718 |
Total liabilities and stockholders’
equity |
|
$ |
345,753 |
$ |
266,811 |
|
|
|
|
|
|
|
NAVIOS MARITIME CONTAINERS
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Expressed in thousands of U.S.
dollars – except for share data) |
|
|
Six Month Period
Ended June 30, 2018
(unaudited) |
|
Period from April 28,
2017(date of inception) to June 30, 2017
(unaudited) |
OPERATING ACTIVITIES: |
|
|
|
|
|
Net
income |
$ |
7,528 |
|
|
$ |
881 |
|
Adjustments to reconcile net income to net cash provided by
/(used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
20,437 |
|
|
|
1,320 |
|
Amortization of deferred financing costs |
|
526 |
|
|
|
— |
|
Amortization of deferred drydock and special survey costs |
|
460 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Increase in
accounts receivable |
|
(87 |
) |
|
|
— |
|
Increase in
balance due from related companies, current |
|
(4,181 |
) |
|
|
(2,844 |
) |
Decrease in
inventories |
|
205 |
|
|
|
— |
|
Increase/(decrease) in prepaid and other current assets |
|
(2,653 |
) |
|
|
7 |
|
Increase in
balance due from related companies, non-current |
|
(1,274 |
) |
|
|
(1,373 |
) |
Increase in
other long term assets |
|
(457 |
) |
|
|
— |
|
Increase in
accounts payable |
|
890 |
|
|
|
35 |
|
Increase in
accrued expenses |
|
45 |
|
|
|
1,123 |
|
Payments
for drydock and special survey costs |
|
(1,621 |
) |
|
|
— |
|
Increase in
due to related companies |
|
— |
|
|
|
49 |
|
Decrease in
deferred income and cash received in advance |
|
(205 |
) |
|
|
(689 |
) |
Net
cash provided by/(used in) operating activities |
$ |
19,613 |
|
|
$ |
(1,491 |
) |
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
Cash
acquired through asset acquisition |
|
— |
|
|
|
5,433 |
|
Acquisition
of vessels and time charters at favorable terms |
|
(63,174 |
) |
|
|
(50,000 |
) |
Net
cash used in investing activities |
$ |
(63,174 |
) |
|
$ |
(44,567 |
) |
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
Repayment
of long term debt |
|
(25,930 |
) |
|
|
— |
|
Proceeds
from long-term debt |
|
68,500 |
|
|
|
34,320 |
|
Debt
issuance costs |
|
(1,465 |
) |
|
|
(650 |
) |
Proceeds
from issuance of common shares, net of offering costs |
|
29,055 |
|
|
|
47,324 |
|
Net
cash provided by financing activities |
|
70,160 |
|
|
|
80,994 |
|
|
|
|
|
|
|
Increase in cash and cash equivalents and restricted
cash |
|
26,599 |
|
|
|
34,936 |
|
Cash and cash equivalents and restricted cash, beginning of
period |
|
14,501 |
|
|
|
— |
|
Cash and cash equivalents and restricted cash, end of
period |
$ |
41,100 |
|
|
$ |
34,936 |
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Consideration payable net of working capital acquired |
|
— |
|
|
$ |
(11,273 |
) |
Deemed
distribution payable to controlling stockholders |
|
— |
|
|
$ |
(4,423 |
) |
Cash paid
for interest, net |
$ |
3,408 |
|
|
|
— |
|
|
NAVIOS MARITIME CONTAINERS
INC. |
CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN EQUITY |
(Expressed in thousands of U.S. dollars —
except for share data) |
|
|
|
Number of
Common Shares |
|
Common Stock |
|
Additional
Paid-in Capital |
|
Retained Earnings |
|
TotalStockholders’Equity |
Balance April 28, 2017 (date of inception) |
|
- |
|
$ |
- |
|
$ |
- |
|
|
$ |
- |
|
$ |
- |
|
Issuance of
common stock, net of offering costs |
|
10,057,645 |
|
|
1 |
|
|
47,323 |
|
|
|
- |
|
|
47,324 |
|
Deemed
distribution |
|
- |
|
|
- |
|
|
(4,423 |
) |
|
|
- |
|
|
(4,423 |
) |
Net
income |
|
- |
|
|
- |
|
|
- |
|
|
|
881 |
|
|
881 |
|
Balance June 30, 2017 (unaudited) |
|
10,057,645 |
|
$ |
1 |
|
$ |
42,900 |
|
|
$ |
881 |
|
$ |
43,782 |
|
Balance December 31,
2017 |
|
29,148,554 |
|
$ |
3 |
|
$ |
138,077 |
|
|
$ |
2,638 |
|
$ |
140,718 |
|
Issuance of
common stock, net of offering costs |
|
5,454,546 |
|
|
- |
|
|
29,055 |
|
|
|
- |
|
|
29,055 |
|
Net
income |
|
- |
|
|
- |
|
|
- |
|
|
|
7,528 |
|
|
7,528 |
|
Balance June 30, 2018
(unaudited) |
|
34,603,100 |
|
$ |
3 |
|
$ |
167,132 |
|
|
$ |
10,166 |
|
$ |
177,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disclosure of Non-GAAP Financial Measures
EBITDA is a “non-U.S. GAAP financial measure”
and should not be used in isolation or considered a substitute for
net income, cash flow from operating activities and other
operations or cash flow statement data prepared in accordance with
generally accepted accounting principles in the United States.
EBITDA represents net income before interest and
finance costs, before depreciation and amortization. We use EBITDA
as liquidity measure and reconcile EBITDA to net cash provided
by/(used in) operating activities, the most comparable U.S. GAAP
liquidity measure. EBITDA is calculated as follows: net cash
provided by operating activities adding back, when applicable and
as the case may be, the effect of (i) net increase/(decrease) in
operating assets, (ii) net (increase)/decrease in operating
liabilities, (iii) net interest cost, (iv) deferred finance charges
and (v) payments for drydock and special survey costs. Navios
Containers believes that EBITDA is a basis upon which liquidity can
be assessed and represents useful information to investors
regarding Navios Containers’ ability to service and/or incur
indebtedness, pay capital expenditures, meet working capital
requirements and pay dividends. Navios Containers also believes
that EBITDA is used (i) by prospective and current lessors as well
as potential lenders to evaluate potential transactions; (ii) to
evaluate and price potential acquisition candidates; and (iii) by
securities analysts, investors and other interested parties in the
evaluation of companies in our industry.
EBITDA is presented to provide additional
information with respect to the ability of Navios Containers to
satisfy its respective obligations, including debt service, capital
expenditures, working capital requirements and pay dividends. While
EBITDA is frequently used as a measure of operating results and the
ability to meet debt service requirements, the definition of EBITDA
used here may not be comparable to those used by other companies
due to differences in methods of calculation.
EBITDA has limitations as an analytical tool,
and therefore, should not be considered in isolation or as a
substitute for the analysis of Navios Containers’ results as
reported under U.S. GAAP. Some of these limitations are: (i) EBITDA
does not reflect changes in, or cash requirements for, working
capital needs; (ii) EBITDA does not reflect the amounts necessary
to service interest or principal payments on our debt and other
financing arrangements; and (iii) although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future. EBITDA does not
reflect any cash requirements for such capital expenditures.
Because of these limitations, among others, EBITDA should not be
considered as a principal indicator of Navios Containers’
performance. Furthermore, our calculation of EBITDA may not be
comparable to that reported by other companies due to differences
in methods of calculation.
Navios Containers Reconciliation of EBITDA to Cash from
Operations
|
|
|
|
Three Months Ended |
June 30,
2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
(in
thousands of U.S. dollars) |
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
Net cash
provided by/ (used in) operating activities |
$ |
12,232 |
|
|
$ |
(1,491 |
) |
Net
(decrease)/increase in operating assets |
|
(487 |
) |
|
|
4,210 |
|
Net
decrease/(increase) in operating liabilities |
|
1,479 |
|
|
|
(518 |
) |
Net
interest cost |
|
2,067 |
|
|
|
80 |
|
Deferred
finance charges |
|
(255 |
) |
|
|
- |
|
Payments
for drydock and special survey costs |
|
1,621 |
|
|
|
- |
|
EBITDA |
$ |
16,657 |
|
|
$ |
2,281 |
|
|
|
|
|
Three Month Period Ended(in thousands
of U.S. dollars) |
June 30,2018 |
|
Period from April 28,
2017(date of inception) to June 30,
2017 |
|
(unaudited) |
|
(unaudited) |
Net cash
provided by/ (used in) operating activities |
$ |
12,232 |
|
|
$ |
(1,491 |
) |
Net cash
used in investing activities |
$ |
(50,386 |
) |
|
$ |
(44,567 |
) |
Net cash
provided by financing activities |
$ |
45,963 |
|
|
$ |
80,994 |
|
|
|
|
|
Six
Months Ended |
June 30,
2018 |
|
Period from April 28, 2017 (date of
inception) to June 30, 2017 |
(in
thousands of U.S. dollars) |
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
Net cash
provided by/ (used in) operating activities |
$ |
19,613 |
|
|
$ |
(1,491 |
) |
Net
increase in operating assets |
|
8,447 |
|
|
|
4,210 |
|
Net
increase in operating liabilities |
|
(730 |
) |
|
|
(518 |
) |
Net
interest cost |
|
3,938 |
|
|
|
80 |
|
Deferred
finance charges |
|
(526 |
) |
|
|
- |
|
Payments
for drydock and special survey costs |
|
1,621 |
|
|
|
- |
|
EBITDA |
$ |
32,363 |
|
|
$ |
2,281 |
|
|
|
|
|
Six
Month Period Ended(in thousands of U.S.
dollars) |
June 30,2018 |
|
Period from April 28,
2017(date of inception) to June 30,
2017 |
|
(unaudited) |
|
(unaudited) |
Net cash
provided by/ (used in) operating activities |
$ |
19,613 |
|
|
$ |
(1,491 |
) |
Net cash
used in investing activities |
$ |
(63,174 |
) |
|
$ |
(44,567 |
) |
Net cash
provided by financing activities |
$ |
70,160 |
|
|
$ |
80,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT II |
Owned Vessels |
|
|
|
|
|
|
|
|
|
Vessel Name |
|
TEU |
|
Year Built |
Navios
Summer(1) |
|
3,450 |
|
2006 |
Navios
Verano(1) |
|
3,450 |
|
2006 |
Navios
Spring(1) |
|
3,450 |
|
2007 |
Navios
Amaranth |
|
4,250 |
|
2007 |
Navios
Indigo(1) |
|
4,250 |
|
2007 |
Navios
Vermilion(1) |
|
4,250 |
|
2007 |
Navios
Verde(1) |
|
4,250 |
|
2007 |
Navios
Amarillo |
|
4,250 |
|
2007 |
Navios
Azure(1) |
|
4,250 |
|
2007 |
Navios
Domino(1) |
|
4,250 |
|
2008 |
MOL
Delight |
|
4,250 |
|
2008 |
MOL
Dedication |
|
4,250 |
|
2008 |
MOL
Devotion |
|
4,250 |
|
2009 |
MOL
Destiny |
|
4,250 |
|
2009 |
Navios
Lapis |
|
4,250 |
|
2009 |
Navios
Tempo |
|
4,250 |
|
2009 |
Niledutch
Okapi |
|
4,250 |
|
2010 |
Navios
Felicitas |
|
4,360 |
|
2010 |
APL
Oakland |
|
4,730 |
|
2008 |
APL Los
Angeles |
|
4,730 |
|
2008 |
APL
Denver |
|
4,730 |
|
2008 |
APL
Atlanta |
|
4,730 |
|
2008 |
YM
Utmost |
|
8,204 |
|
2006 |
YM
Unity |
|
8,204 |
|
2006 |
Navios
Unison |
|
10,000 |
|
2010 |
|
|
|
|
|
Owned Vessel to be Delivered |
|
|
|
|
|
|
|
|
|
Vessel Name |
|
TEU |
|
Year Built |
TBN 1 |
|
4,563 |
|
2009 |
|
|
|
|
|
Vessels to be Acquired |
|
|
|
|
|
|
|
|
|
Vessel Name |
|
TEU |
|
Year Built |
Hyundai
Hongkong |
|
6,800 |
|
2006 |
TBN 2 |
|
10,000 |
|
2011 |
TBN 3 |
|
10,000 |
|
2011 |
TBN 4 |
|
10,000 |
|
2011 |
TBN 5 |
|
10,000 |
|
2011 |
|
|
|
|
|
Vessels Underlying Purchase Option |
|
|
|
|
|
|
|
|
|
Vessel Name |
|
TEU |
|
Year Built |
Hyundai
Shanghai |
|
6,800 |
|
2006 |
Hyundai
Tokyo |
|
6,800 |
|
2006 |
Hyundai
Busan |
|
6,800 |
|
2006 |
Hyundai
Singapore |
|
6,800 |
|
2006 |
|
|
|
|
|
(1) The vessel is subject to a sale and leaseback transaction
with Minsheng Financial Leasing Co. Ltd. for a period of up to five
years, at which time we have an obligation to purchase the
vessel.
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