Eagle Bulk Shipping Inc. (NASDAQ: EGLE) (“Eagle Bulk” or the
“Company”), one of the world’s largest owner-operators within the
Supramax / Ultramax segment, today reported financial results for
the three months ended March 31, 2019.
Highlights for the Quarter:
- Generated net revenues of $77.4 million, representing a
decrease of $2.0 million or 2% compared to the same period in
2018.- TCE Revenue (1) for the quarter equated to $40.0 million, a
decrease of 14% year-on-year.- Achieved a TCE (2) of $9,607 for the
quarter, a decrease of 13% year-on-year.
- Realized a net income of $29 thousand or $0.00 per basic and
diluted share, compared to a net income of $53 thousand or
$0.00 per basic and diluted share in the first quarter 2018.- Net
income excluding loss on debt extinguishment of $2.3 million or
$0.03 per basic and diluted share.
- Adjusted EBITDA(3) of $15.4 million, representing a decrease of
$3.5 million or 18% compared to the same period in 2018.
- Looking ahead into the second quarter of 2019, the Company
has attained a TCE of $9,509 with approximately 65% of the
available days fixed for the period thus far.
Gary Vogel, Eagle Bulk's CEO, commented,
"Notwithstanding weakness in freight markets during the first
quarter, we were able to achieve our highest TCE outperformance to
date. I am pleased to report that our first quarter TCE
outperformance, relative to the adjusted benchmark Baltic Supramax
Index equated to almost $2,400 per vessel per day, representing a
beat of over 30%. With nine consecutive quarters of outperformance,
we continue to demonstrate our ability to create value through the
execution of our differentiated business model.
"With respect to our fleet, preparations for IMO
2020 are well underway. To date we have fitted five vessels with
scrubbers, with the majority of the installation time occurring at
sea while ships continue to trade. We expect to have thirty-four
scrubbers installed within 2019, and three additional units in
2020."
1 TCE revenue is a non-GAAP financial measure.
See the reconciliation and table of net revenues to TCE 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 net 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
income/(loss) to EBITDA and Adjusted EBITDA later in this release
for more information on non-GAAP financial measures.
Fleet Operating Data
|
Three Months Ended |
|
March 31, 2019 |
|
March 31, 2018 |
Ownership Days |
4,160 |
|
|
4,312 |
|
Chartered in Days |
1,036 |
|
|
944 |
|
Available Days |
5,106 |
|
|
5,162 |
|
Operating Days |
5,070 |
|
|
5,113 |
|
Fleet Utilization (%) |
99.3 |
% |
|
99.1 |
% |
Fleet Development
Vessels acquired and delivered into the fleet
- Cape Town Eagle, an Ultramax (64k DWT / 2015-built) for $20.4
million.
Vessels sold
- Condor (50k DWT / 2001-built) and Merlin (50k DWT /2001-built)
for $12.8 million, net of selling expenses and commissions.
Vessels sold after quarter-end
- Signed a memorandum of agreement to sell the vessel Thrasher
(53k DWT / 2010-built) for gross proceeds of $10.0 million.
Results of Operations for the three
months ended March 31, 2019 and 2018
For the three months ended March 31, 2019, the
Company reported net income of $29 thousand, or basic and diluted
income of $0.00 per share. In the comparable quarter of 2018, the
Company reported net income of $53 thousand, or basic and diluted
income of $0.00 per share.
Net time and voyage charter revenues
Net time and voyage charter revenues for the
three months ended March 31, 2019 were $77.4 million compared
with $79.4 million recorded in the comparable quarter in 2018. The
decrease in revenue was primarily attributable to the decline in
the dry bulk market resulting in lower charter rates and a decrease
in available days due to lower ownership days in the current
quarter resulting from the sale of two vessels, Condor and Merlin.
Additionally, the Company purchased one vessel in the current
quarter as well as in the comparable quarter in 2018.
Voyage expenses
Voyage expenses for the three months ended
March 31, 2019 were $25.9 million compared to $22.5 million in
the comparable quarter in 2018. The increase was mainly
attributable to an increase in bunker prices year over year.
Vessel expenses
Vessel expenses for the three months ended
March 31, 2019 were $20.1 million compared to $21.1 million in
the comparable quarter in 2018. The decrease in vessel expenses was
attributable to a decrease in owned days after the sale of the
vessels, Condor and Merlin in the current quarter compared to the
comparable period in the prior year. The ownership days for the
three months ended March 31, 2019 and 2018 were 4,160 and
4,312, respectively.
Average daily vessel operating expenses for our
fleet for the three months ended March 31, 2019 and 2018 were
$4,830 and $4,888, respectively.
Charter hire expenses
Charter hire expenses for the three months ended
March 31, 2019 were $11.5 million compared to $10.3 million in
the comparable quarter in 2018. The increase in charter hire
expenses was principally due to an increase in the number of
chartered in vessels on a short-term basis as well as the increase
in the average charter hire expense per day. The total chartered in
days for the three months ended March 31, 2019 were 1,036
compared to 944 for the comparable quarter in the prior year. The
Company currently charters-in three Ultramax vessels on long term
basis with lease terms ranging from one to three years.
Depreciation and amortization
Depreciation and amortization expense for the
three months ended March 31, 2019 and 2018 was $9.4 million
and $9.3 million, respectively. Total depreciation and amortization
expense for the three months ended March 31, 2019 includes
$8.2 million of vessel and other fixed asset depreciation and $1.2
million relating to the amortization of deferred drydocking costs.
Comparable amounts for the three months ended March 31, 2018
were $8.1 million of vessel and other fixed asset depreciation and
$1.2 million of amortization of deferred drydocking costs.
General and administrative expenses
General and administrative expenses for the
three months ended March 31, 2019 and 2018 were $8.4 million
and $9.9 million, respectively. General and administrative expenses
included stock-based compensation of $1.4 million and $3.5 million
for the three months ended March 31, 2019 and 2018, respectively.
The decrease in the general and administrative expenses was mainly
due to a decrease in stock-based compensation expense.
Interest expense
Interest expense for the three months ended
March 31, 2019 and 2018 was $6.8 million and $6.3 million,
respectively. The increase in interest expense is primarily due to
an increase in our outstanding debt as a result of the purchase of
two new Ultramax vessels since the first quarter of 2018.
Loss on debt extinguishment
On January 25, 2019, the Company repaid the
outstanding debt together with accrued interest as on that date
under the New First Lien Facility and Original Ultraco Debt
Facility and discharged the debt in full from the proceeds of the
New Ultraco Debt Facility. The Company accounted for the above
transaction as a debt extinguishment. As a result, the Company
recognized $2.3 million representing the outstanding balance of
debt issuance costs as a loss on debt extinguishment in the
Condensed Consolidated Statement of Operations for the three months
ended March 31, 2019.
Liquidity and Capital
Resources
Net cash provided by operating activities for
the three months ended March 31, 2019 was $11.9 million,
compared with $14.9 million in the comparable period in 2018. The
cash flows from operating activities decreased over the prior year
primarily due to a decrease in the charter hire rates achieved by
the Company in the current year as well as an increase in
drydocking costs.
Net cash used in investing activities for the
three months ended March 31, 2019 was $16.9 million, compared
to $15.3 million in the comparable period in the prior year. The
Company purchased one Ultramax vessel for $20.4 million, out of
which $2.0 million was paid as an advance as of December 31, 2018
offset by the proceeds from the sale of two vessels for $12.8
million. Additionally, the Company paid $11.2 million for the
purchase and installation of scrubbers and ballast water treatment
systems on our fleet. During the first quarter of 2018, the Company
purchased one Ultramax vessel for $19.8 million and redeemed a
short-term certificate of deposit amounting to $4.5 million.
Net cash provided by financing activities for
the three months ended March 31, 2019 was $6.8 million
compared with $2.1 million in the comparable three month period in
2018. On January 25, 2019, the Company completed a debt refinancing
transaction by entering into new term and revolver loan facilities
under the New Ultraco Debt Facility of up to $208.4 million and
repaid all outstanding debt under the Original Ultraco Debt
Facility and New First Lien Facility of $82.6 million and $65.0
million respectively. The Company paid $3.2 million as debt
issuance costs to the lenders. Additionally, the Company paid $0.9
million towards shares withheld for taxes due to the vesting of
restricted shares. For the three months ended March 31, 2018, the
Company drew down $8.6 million under the Original Ultraco Debt
Facility in connection with the purchase of one Ultramax vessel,
offset by repayment of $5.0 million of the revolver loan under the
New First Lien Facility. The Company paid $1.2 million of debt
issuance costs on the debt facilities and $0.3 million towards
shares withheld for taxes due to vesting of restricted shares.
As of March 31, 2019, our cash and cash
equivalents balance including restricted cash was $80.0 million
compared to a cash, cash equivalents, and restricted cash balance
of $78.2 million as of December 31, 2018.
As of March 31, 2019, the total
availability under the New Ultraco Debt Facility revolving credit
facility is $55.0 million and $15.0 million under the Super Senior
Facility.
As of March 31, 2019, the Company’s
outstanding debt consisted of the $196.0 million Norwegian Bond and
the $153.4 million New 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
the 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 the three months ended March 31, 2019, three of
our vessels completed drydock and one vessel is in drydock as of
March 31, 2019 and we incurred $2.5 million in drydocking related
costs. In the three months ended March 31, 2018, two vessels
were drydocked and we incurred $1.1 million in drydocking related
costs
The following table represents certain
information about the estimated costs for anticipated vessel
drydockings, Ballast water treatment systems ("BWTS"), and Scrubber
installations in the next four quarters, along with the anticipated
off-hire days:
|
|
|
Projected Costs(2) (in millions) |
Quarter Ending |
Off-hire Days(1) |
|
BWTS |
Scrubbers |
Drydocks |
June 30, 2019 |
177 |
|
|
$ |
2.5 |
|
$ |
24.1 |
|
$ |
1.8 |
|
September 30, 2019 |
162 |
|
|
$ |
3.4 |
|
$ |
16.6 |
|
$ |
2.3 |
|
December 31, 2019 |
246 |
|
|
$ |
2.6 |
|
$ |
12.9 |
|
$ |
5.1 |
|
March 31, 2020 |
31 |
|
|
$ |
1.5 |
|
$ |
3.8 |
|
$ |
0.8 |
|
(1) Actual duration of
off-hire days 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 condensed
consolidated financial and other data for the periods indicated
below.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
Three Months Ended |
|
March 31, 2019 |
|
March 31, 2018 |
Revenues, net |
$ |
77,389,597 |
|
|
$ |
79,370,609 |
|
Operating expenses: |
|
|
|
Voyage expenses |
25,906,140 |
|
|
22,514,592 |
|
Vessel expenses |
20,093,706 |
|
|
21,078,657 |
|
Charter hire expenses |
11,491,906 |
|
|
10,268,064 |
|
Depreciation and amortization |
9,407,108 |
|
|
9,276,415 |
|
General and administrative expenses |
8,409,919 |
|
|
9,913,964 |
|
Gain on sale of vessels |
(4,106,547 |
) |
|
— |
|
Total operating expenses |
71,202,232 |
|
|
73,051,692 |
|
Operating income |
6,187,365 |
|
|
6,318,917 |
|
Interest expense |
6,762,003 |
|
|
6,261,069 |
|
Interest income |
(434,318 |
) |
|
(95,276 |
) |
Loss on debt
extinguishment |
2,268,452 |
|
|
— |
|
Other (income)/expense |
(2,438,255 |
) |
|
100,379 |
|
Total other expense, net |
6,157,882 |
|
|
6,266,172 |
|
Net income |
$ |
29,483 |
|
|
$ |
52,745 |
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
Basic |
71,283,301 |
|
|
70,452,814 |
|
Diluted |
72,070,868 |
|
|
71,531,864 |
|
|
|
|
|
Per share amounts: |
|
|
|
Basic income |
$ |
— |
|
|
$ |
— |
|
Diluted income |
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
March 31, 2019 |
|
December 31, 2018 |
ASSETS: |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
60,715,204 |
|
|
$ |
67,209,753 |
|
Accounts receivable, net of a reserve of $1,758,463 and $2,073,616,
respectively |
18,975,479 |
|
|
19,785,582 |
|
Prepaid expenses |
3,941,090 |
|
|
4,635,879 |
|
Inventories |
13,137,786 |
|
|
16,137,785 |
|
Vessels held for sale |
— |
|
|
8,458,444 |
|
Other current assets |
3,242,311 |
|
|
2,246,740 |
|
Total current assets |
100,011,870 |
|
|
118,474,183 |
|
Noncurrent assets: |
|
|
|
Vessels and vessel improvements, at cost, net of
accumulated depreciation of $133,015,330 and $124,907,998,
respectively |
695,343,213 |
|
|
682,944,936 |
|
Advance for vessel purchase |
— |
|
|
2,040,000 |
|
Operating lease right-of-use assets (1) |
25,433,893 |
|
|
— |
|
Other fixed assets, net of accumulated depreciation of
$610,970 and $547,452, respectively |
655,648 |
|
|
692,803 |
|
Restricted cash |
19,283,145 |
|
|
10,953,885 |
|
Deferred drydock costs, net |
13,219,645 |
|
|
12,186,356 |
|
Deferred financing costs - Super Senior Facility |
285,342 |
|
|
285,342 |
|
Other assets |
28,772,636 |
|
|
18,631,655 |
|
Total noncurrent assets |
782,993,522 |
|
|
727,734,977 |
|
Total assets |
$ |
883,005,392 |
|
|
$ |
846,209,160 |
|
LIABILITIES & STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
13,694,404 |
|
|
$ |
14,161,169 |
|
Accrued interest |
6,990,987 |
|
|
1,735,631 |
|
Other accrued liabilities |
9,109,295 |
|
|
10,064,017 |
|
Fair value of derivatives |
— |
|
|
929,313 |
|
Current portion of operating lease liabilities (1) |
13,775,046 |
|
|
— |
|
Unearned charter hire revenue |
5,173,582 |
|
|
6,926,839 |
|
Current portion of long-term debt |
28,194,684 |
|
|
29,176,230 |
|
Total current liabilities |
76,937,998 |
|
|
62,993,199 |
|
Noncurrent liabilities: |
|
|
|
Norwegian Bond Debt, net of debt discount and debt issuance
costs |
182,817,726 |
|
|
182,469,155 |
|
New First Lien Facility, net of debt discount and debt issuance
costs |
— |
|
|
48,189,307 |
|
Original Ultraco Debt Facility, net of debt discount and debt
issuance costs |
— |
|
|
70,924,885 |
|
New Ultraco Debt Facility, net of debt discount and debt issuance
costs |
129,903,085 |
|
|
— |
|
Operating lease liabilities (1) |
13,142,943 |
|
|
— |
|
Other liabilities |
— |
|
|
208,651 |
|
Fair value below contract value of time charters acquired |
— |
|
|
1,818,114 |
|
Total noncurrent liabilities |
325,863,754 |
|
|
303,610,112 |
|
Total liabilities |
402,801,752 |
|
|
366,603,311 |
|
Commitments and contingencies |
|
|
|
Stockholders' equity: |
|
|
|
Preferred stock, $.01 par value, 25,000,000 shares
authorized, none issued as of March 31, 2019 and December 31,
2018 |
— |
|
|
— |
|
Common stock, $.01 par value, 700,000,000 shares
authorized, 71,348,411 and 71,055,400 shares issued and outstanding
as of March 31, 2019 and December 31, 2018, respectively |
713,484 |
|
|
710,555 |
|
Additional paid-in capital |
894,837,912 |
|
|
894,272,533 |
|
Accumulated deficit |
(415,347,756 |
) |
|
(415,377,239 |
) |
Total stockholders' equity |
480,203,640 |
|
|
479,605,849 |
|
Total liabilities and stockholders'
equity |
$ |
883,005,392 |
|
|
$ |
846,209,160 |
|
|
|
|
|
|
|
|
|
(1) We adopted the Financial Accounting
Standards Board's ("FASB") Accounting Standards Update ("ASU")
2016-02, Leases (Topic 842) as of January 1, 2019 and recognized
operating right-of-use assets related to time charter in contracts
over 12 months and the office leases the Company is currently
leasing in Stamford, Connecticut and Singapore. The Company
recognized operating right-of-use assets of $28.7 million and
operating liabilities of $30.5 million as of January 1, 2019, and
operating right of use assets of $25.4 million and operating
liabilities of $26.9 million as of March 31, 2019.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
Three Months Ended |
|
March 31, 2019 |
|
March 31, 2018 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net income |
$ |
29,483 |
|
|
$ |
52,745 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
8,168,411 |
|
|
8,073,353 |
|
Amortization of operating lease
right-of-use asset |
3,271,111 |
|
|
— |
|
Amortization of deferred
drydocking costs |
1,238,698 |
|
|
1,203,062 |
|
Amortization of debt discount
and debt issuance costs |
503,716 |
|
|
490,095 |
|
Amortization of fair value
below contract value of time charter acquired |
— |
|
|
(170,475 |
) |
Loss on debt extinguishment |
2,268,452 |
|
|
— |
|
Gain on sale of vessels, net |
(4,106,547 |
) |
|
— |
|
Net unrealized (gain)/loss on
fair value of derivatives |
(2,958,154 |
) |
|
208,235 |
|
Stock-based compensation
expense |
1,445,469 |
|
|
3,510,911 |
|
Drydocking expenditures |
(2,527,553 |
) |
|
(1,107,414 |
) |
Changes in operating assets and
liabilities: |
|
|
|
Accounts payable |
1,467,508 |
|
|
1,544,461 |
|
Accounts receivable |
810,103 |
|
|
3,270,432 |
|
Accrued interest |
5,255,356 |
|
|
4,122,188 |
|
Inventories |
2,999,999 |
|
|
490,738 |
|
Operating lease liabilities short
and long-term |
(3,643,179 |
) |
|
— |
|
Other current and non-current
assets |
1,084,257 |
|
|
(121,954 |
) |
Other current and non-current
liabilities |
(2,306,786 |
) |
|
(5,009,784 |
) |
Prepaid expenses |
694,789 |
|
|
(652,271 |
) |
Unearned revenue |
(1,753,257 |
) |
|
(1,031,082 |
) |
Net cash provided by operating
activities |
11,941,876 |
|
|
14,873,240 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Advance paid for purchase of scrubbers and ballast
water systems |
(11,244,778 |
) |
|
— |
|
Proceeds from redemption of
short-term investment |
— |
|
|
4,500,000 |
|
Proceeds from sale of
vessels |
12,820,557 |
|
|
— |
|
Purchase of other fixed
assets |
(23,924 |
) |
|
966 |
|
Purchase of vessels and vessel
improvements |
(18,465,609 |
) |
|
(19,841,535 |
) |
Net cash used
in investing activities |
(16,913,754 |
) |
|
(15,340,569 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayment of revolver loan under New First Lien
Facility |
(5,000,000 |
) |
|
(5,000,000 |
) |
Proceeds from the revolver under New First Lien
Facility |
5,000,000 |
|
|
— |
|
Proceeds from Original Ultraco Debt Facility |
— |
|
|
8,600,000 |
|
Repayment of Original Ultraco Debt Facility |
(82,600,000 |
) |
|
— |
|
Proceeds from New Ultraco Debt Facility |
153,440,000 |
|
|
— |
|
Repayment of New First Lien Facility - term loan |
(60,000,000 |
) |
|
— |
|
Debt issuance costs paid to lenders on New Ultraco
Debt Facility |
(3,156,250 |
) |
|
— |
|
Cash used to settle net share
equity awards |
(877,161 |
) |
|
(254,146 |
) |
Other financing costs |
— |
|
|
(1,231,935 |
) |
Net cash provided by
financing activities |
6,806,589 |
|
|
2,113,919 |
|
Net increase in cash, cash
equivalents and restricted cash |
1,834,711 |
|
|
1,646,590 |
|
Cash, cash equivalents
and restricted cash at beginning of period |
78,163,638 |
|
|
56,325,961 |
|
Cash, cash equivalents
and restricted cash at end of period |
$ |
79,998,349 |
|
|
$ |
57,972,551 |
|
SUPPLEMENTAL CASH FLOW
INFORMATION |
|
|
|
Cash paid during the period for
interest |
$ |
901,516 |
|
|
$ |
1,648,787 |
|
Accrual for other financing
costs included in Other accrued liabilities |
$ |
300,000 |
|
|
$ |
— |
|
Accruals for Scrubbers and
ballast water treatment systems included in Accounts payable and
Other accrued liabilities |
$ |
4,749,057 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Reconciliation
of Net income/(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 under GAAP 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, loss on debt
extinguishment 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 income to EBITDA and Adjusted EBITDA.
|
Three Months Ended |
|
March 31, 2019 |
|
March 31, 2018 |
Net income |
$ |
29,483 |
|
|
$ |
52,745 |
|
Adjustments to reconcile net
income to EBITDA: |
|
|
|
Interest expense |
6,762,003 |
|
|
6,261,069 |
|
Interest income |
(434,318 |
) |
|
(95,276 |
) |
Income taxes |
— |
|
|
— |
|
EBIT |
6,357,168 |
|
|
6,218,538 |
|
Depreciation and
amortization |
9,407,108 |
|
|
9,276,415 |
|
EBITDA |
15,764,276 |
|
|
15,494,953 |
|
Non-cash, one-time and other
adjustments to EBITDA(1): |
(392,626 |
) |
|
3,340,436 |
|
Adjusted EBITDA |
$ |
15,371,650 |
|
|
$ |
18,835,389 |
|
(1) One-time and other adjustments to EBITDA for the three
months ended March 31, 2019 includes stock-based compensation,
(gain)/loss on sale of vessels and loss on debt extinguishment.
One-time and other adjustments to EBITDA for the three months ended
March 31, 2018 includes stock-based compensation, (gain)/loss on
sale of vessels, loss on debt extinguishment 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 the 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 realized 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. The Company calculates
relative performance by comparing TCE against the Baltic Supramax
Index ("BSI") adjusted for commissions and fleet makeup. 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.
The following table presents the reconciliation of revenues, net
to TCE:
|
|
Three Months Ended |
|
|
March 31, 2019 |
|
March 31, 2018 |
Revenues, net |
|
$ |
77,389,597 |
|
|
$ |
79,370,609 |
|
Less: |
|
|
|
|
Voyage expenses |
|
(25,906,140 |
) |
|
(22,514,592 |
) |
Charter hire expenses |
|
(11,491,906 |
) |
|
(10,268,064 |
) |
Reversal of one legacy time
charter |
|
(414,140 |
) |
|
(86,487 |
) |
Realized gain on FFAs and
bunker swaps |
|
(475,523 |
) |
|
116,982 |
|
TCE revenue |
|
$ |
39,101,888 |
|
|
$ |
46,618,448 |
|
|
|
|
|
|
Owned available days |
|
4,070 |
|
|
4,218 |
|
TCE |
|
$ |
9,607 |
|
|
$ |
11,052 |
|
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 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 related
to our Indebtedness
Norwegian Bond Debt: Norwegian Bond Debt refers
to the Senior Secured Bonds issued by Eagle Bulk Shipco LLC, a
wholly-owned subsidiary of the Company ("Shipco"), as borrower,
certain wholly-owned vessel-owning subsidiaries of Shipco, as
guarantors ("Shipco Vessels"), 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 bonds are secured by 25 vessels.
New Ultraco Debt Facility: New Ultraco Debt
Facility refers to senior secured credit facility for $208.4
million entered into by Ultraco Shipping LLC ("Ultraco"), a
wholly-owned subsidiary of the Company, as the borrower (the "New
Ultraco Debt Facility"), with the Company and certain of its
indirectly vessel-owning subsidiaries, as guarantors (the
“Guarantors”), the lenders party thereto, the swap banks party
thereto, ABN AMRO Capital USA LLC ("ABN AMRO"), Credit Agricole
Corporate and Investment Bank, Skandinaviska Enskilda Banken AB (
PUBL) and DNB Markets Inc., as mandated lead arrangers and
bookrunners, and ABNAMRO, as arranger, security trustee and
facility agent. The New Ultraco Debt Facility provides for an
aggregate principal amount of $208.4 million, which consists of (i)
a term loan facility of $153.4 million and (ii) a revolving credit
facility of $55.0 million. As of March 31, 2019, the $55.0 million
revolving credit facility remains undrawn. The New Ultraco Debt
Facility is secured by 21 vessels.
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 ("Eagle Shipping"), as
borrower, certain wholly-owned vessel-owning subsidiaries of Eagle
Shipping, as guarantors, the lenders thereunder, 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
outstanding debt under the New First Lien Facility was repaid in
full in the first quarter of 2019 with proceeds from the New
Ultraco Debt Facility.
Original Ultraco Debt Facility: Original Ultraco
Debt Facility refers to the credit facility for $82.6 million
entered into by and among Eagle Bulk Ultraco LLC, a wholly-owned
subsidiary of the Company ("Ultraco"), as borrower, certain
wholly-owned vessel-owning subsidiaries of Ultraco, as guarantors,
the lenders thereunder, the swap banks party thereto, ABN AMRO
Capital USA LLC (“ ABN AMRO”), as facility agent and security
trustee for the Ultraco Lenders, ABN AMRO, DVB Bank SE and
Skandinaviska Enskilda Banken AB (publ), as mandated lead
arrangers, and ABN AMRO, as arranger and bookrunner on June 28,
2017. The proceeds were used to finance the acquisition of nine
Ultramax vessels during 2017 and two Ultramax vessels during 2018.
The Original Ultraco Debt Facility was repaid in full in the first
quarter of 2019 with proceeds from the New Ultraco Debt
Facility.
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 Wednesday, May 8, 2019, to discuss the first
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
7779919. 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 11:00 AM ET on May 8, 2019 until 11:00 AM ET on May 17, 2019.
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
7779919.
About Eagle Bulk Shipping
Inc.
Eagle Bulk Shipping Inc. (“Eagle” or the
“Company”) is a US-based fully integrated shipowner-operator
providing global transportation solutions to a diverse group of
customers including miners, producers, traders, and end users.
Headquartered in Stamford, Connecticut, with offices in Singapore
and Hamburg, Eagle focuses exclusively on the versatile mid-size
drybulk vessel segment and owns one of the largest fleets of
Supramax/Ultramax vessels in the world. The Company performs all
management services in-house (including: strategic, commercial,
operational, technical, and administrative) and employs an active
management approach to fleet trading with the objective of
optimizing revenue performance and maximizing earnings on a
risk-managed basis. For further information, please visit our
website: www.eagleships.com.
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. +1 203-276-8100Email:
investor@eagleships.com
Media:Rose and CompanyTel. +1
212-359-2228--------------------------------------------------------------------------------Source:
Eagle Bulk Shipping Inc.
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