Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s
largest independent owners of containerships, today reported
unaudited results for the period ended September 30, 2020.
Highlights for the Third Quarter and Nine Months Ended
September 30, 2020:
- Adjusted net income1 of $47.3 million, or $1.91 per share,
for the three months ended September 30, 2020 compared to $37.9
million, or $2.46 per share, for the three months ended September
30, 2019, an increase of 24.8%. Adjusted net income1 of $123.1
million, or $4.97 per share, for the nine months ended September
30, 2020 compared to $110.7 million, or $7.23 per share, for the
nine months ended September 30, 2019, an increase of
11.2%.
- Operating revenues of $118.9 million for the three months
ended September 30, 2020 compared to $111.8 million for the three
months ended September 30, 2019, an increase of 6.4%. Operating
revenues of $341.9 million for the nine months ended September 30,
2020 compared to $337.0 million for the nine months ended September
30, 2019, an increase of 1.5%.
- Adjusted EBITDA1 of $83.3 million for the three
months ended September 30, 2020 compared to $79.3 million for the
three months ended September 30, 2019, an increase of 5.0%.
Adjusted EBITDA1 of $235.3 million for the nine months ended
September 30, 2020 compared to $232.4 million for the nine months
ended September 30, 2019, an increase of 1.2%.
- Total contracted operating revenues were $1.1 billion as of
September 30, 2020, with charters extending through 2028 and
remaining average contracted charter duration of 3.5 years,
weighted by aggregate contracted charter hire.
- Charter coverage of 87% for the next 12 months based on
current operating revenues and 64% in terms of contracted operating
days.
- On October 12, 2020, we announced the repurchase of
4,339,271 shares of our common stock for an aggregate purchase
price of $31.1 million in privately negotiated transactions,
including 2,517,013 shares from the Royal Bank of Scotland and
1,822,258 shares from Sphinx Investment Corp. These transactions
resulted in the Company's previously announced share repurchase
program being terminated.
Three and Nine Months Ended
September 30, 2020
Financial Summary -
Unaudited
(Expressed in thousands of United
States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
Operating revenues
$
118,932
$
111,830
$
341,952
$
337,040
Net income
$
42,786
$
33,855
$
110,371
$
97,436
Adjusted net income1
$
47,303
$
37,882
$
123,078
$
110,706
Earnings per share, diluted
$
1.73
$
2.20
$
4.45
$
6.36
Adjusted earnings per share, diluted1
$
1.91
$
2.46
$
4.97
$
7.23
Diluted weighted average number of shares
(in thousands)
24,789
15,373
24,789
15,309
Adjusted EBITDA1
$
83,331
$
79,328
$
235,322
$
232,447
Adjusted net income, adjusted
earnings per share and adjusted EBITDA are non-GAAP measures. Refer
to the reconciliation of net income to adjusted net income and net
income to adjusted EBITDA.
Danaos’ CEO Dr. John Coustas
commented:
"We are pleased to report improved performance in the Company’s
profitability during this quarter. Container trade has staged a
remarkable recovery since the end of May, when 11.4% of the vessels
in the global fleet stood idle. Time charter rates have increased
across all vessel sizes, and the time charter market is at or close
to multi-year highs for all vessel sizes. The ability of the liner
companies to consistently manage capacity addressed the swift drop
in volumes at the onset of the pandemic, which alleviated pressure
on our customers' cash flows and stabilized freight rates. All our
customers have reported strong profitability which significantly
mitigates our counterparty risk.
Volumes have consistently improved, particularly in Transpacific
eastbound, intra-Asia and North-South trade lanes, as volumes have
recovered faster than expected. Notably, the increase in rates has
been most pronounced in smaller vessel types. Danaos has the
greatest amount of leverage to this segment of the market as our
larger vessels are contracted on multi-year time charters. From
that perspective, the short-term chartering market has been quite
dynamic.
Although significant market uncertainty remains, particularly as
many countries see increasing spread of COVID-19 cases, global GDP
has rebounded swiftly, and IMF has recently revised its 2020 GDP
estimates upwards. For 2021, the IMF forecasts global GDP growth of
5.2%, which effectively equals growth of 0.6% compared to 2019, or
pre-pandemic levels. The recovery has thus far been primarily
concentrated in goods rather than services, which has benefited
containerized trade.
We continue to execute our strategy and we are well insulated
from near-term volatility due to our high charter coverage of 87%
in terms of operating revenues and 64% in terms of operating days
over the next 12 months. This provides significant visibility into
our cash flows during this period. We also have some leverage to
the presently strong market through our smaller vessels. We are
also cautiously optimistic about the medium-term market outlook.
The orderbook is currently in single digits as a percentage of the
world fleet for the first time in 20 years. Combined with an
anticipated reduction in speeds due to the various environmental
initiatives, the supply side outlook is healthy. Tighter supply
will help to maintain momentum in the container market or help to
bring about a swift recovery if conditions deteriorate.
Consistent with our growth strategy we have agreed to purchase
two 9,000 TEU vessels built in 2009 which are both contracted on
two year charters with a major liner company. These vessels are
expected to be delivered to us between December 2020 and January
2021 and will be funded with a combination of cash and new credit
facilities. With these new deliveries our fleet will for the first
time exceed the 400,000 TEU mark.
In the meantime, we are generating strong cash flows from our
$1.1 billion charter backlog and have a healthy liquidity position.
This enabled us to opportunistically repurchase 4,339,271 shares,
or 17.5% of the Company’s outstanding shares, for an aggregate
price of $31.1 million in privately negotiated transactions
practically tripling our $10 million original buyback program.
Given the holding nature of the prior owners of these shares, these
repurchases increase our per share results and valuation metrics
without impacting trading liquidity.
In light of the continued uncertainty about the duration of the
coronavirus pandemic and the ensuing economic recovery, we remain
focused on maintaining a conservative financial profile and making
thoughtful capital allocation decisions that align with our
strategy and market expectations and deliver value to our
shareholders."
Three months ended September 30, 2020
compared to the three months ended September 30,
2019
During the three months ended September 30, 2020, Danaos had an
average of 58.0 containerships compared to 55.0 containerships
during the three months ended September 30, 2019. Our fleet
utilization was 98.7% in each of the three months ended September
30, 2020 and September 30, 2019.
Our adjusted net income amounted to $47.3 million, or $1.91 per
share, for the three months ended September 30, 2020 compared to
$37.9 million, or $2.46 per share, for the three months ended
September 30, 2019. We have adjusted our net income in the three
months ended September 30, 2020 for amortization of non-cash fees
and accrued finance fees charge of $4.5 million. Please refer to
the Adjusted Net Income reconciliation table, which appears later
in this earnings release.
The increase of $9.4 million in adjusted net income for the
three months ended September 30, 2020 compared to the three months
ended September 30, 2019 is attributable mainly to a $7.1 million
increase in operating revenues, a $6.8 million decrease in net
finance expenses and a $0.9 million increase in the operating
performance of our equity investment in Gemini Shipholdings
Corporation (“Gemini”), which were partially offset by a $5.4
million increase in total operating expenses.
On a non-adjusted basis, our net income amounted to $42.8
million, or $1.73 earnings per diluted share, for the three months
ended September 30, 2020 compared to net income of $33.9 million,
or $2.20 earnings per diluted share, for the three months ended
September 30, 2019.
Operating Revenues
Operating revenues increased by 6.4%, or $7.1 million, to $118.9
million in the three months ended September 30, 2020 from $111.8
million in the three months ended September 30, 2019.
Operating revenues for the three months ended September 30, 2020
reflect:
- a $11.5 million increase in revenues in the three months ended
September 30, 2020 compared to the three months ended September 30,
2019 as a result of contractual increases in charter rates of
vessels under long-term charters;
- a $5.5 million increase in revenues in the three months ended
September 30, 2020 compared to the three months ended September 30,
2019 due to the acquisition of new vessels;
- a $5.6 million decrease in revenues in the three months ended
September 30, 2020 compared to the three months ended September 30,
2019 due to lower non-cash revenue recognition in accordance with
US GAAP;
- a $5.1 million decrease in revenues in the three months ended
September 30, 2020 compared to the three months ended September 30,
2019 as a result of lower re-chartering rates for certain of our
vessels. This decrease is partially due to a $3.9 million decrease
in revenues due to the re-chartering of four vessels in our fleet
that concluded long-term charters over the last twelve months and
were re-deployed at the prevailing lower spot rates at the time
these vessels were re-chartered; and
- a $0.8 million increase in revenues due to higher fleet
utilization of our vessels in the three months ended September 30,
2020 compared to the three months ended September 30, 2019.
Vessel Operating Expenses Vessel operating expenses
increased by $2.8 million to $27.7 million in the three months
ended September 30, 2020 from $24.9 million in the three months
ended September 30, 2019, primarily as a result of the increase in
the average number of vessels in our fleet and an overall increase
in the average daily operating cost to $5,467 per vessel per day
for vessels on time charter for the three months ended September
30, 2020 compared to $5,298 per vessel per day for the three months
ended September 30, 2019. Management believes that our daily
operating cost are among the most competitive in the industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 6.2%, or $1.5
million, to $25.8 million in the three months ended September 30,
2020 from $24.3 million in the three months ended September 30,
2019 mainly due to the installation of scrubbers on nine of our
vessels and the acquisition of the vessels Niledutch Lion, Phoebe
and SM Charleston in the nine months ended September 30, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
increased by $0.9 million to $3.2 million in the three months ended
September 30, 2020 from $2.3 million in the three months ended
September 30, 2019.
General and Administrative Expenses General and
administrative expenses decreased by $0.4 million to $6.0 million
in the three months ended September 30, 2020, from $6.4 million in
the three months ended September 30, 2019. The decrease was mainly
due to decreased non-cash recognition of share-based
compensation.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $0.8 million to
$3.6 million in the three months ended September 30, 2020 from $2.8
million in the three months ended September 30, 2019 primarily as a
result of the increase in the average number of vessels in our
fleet.
Interest Expense and Interest Income Interest expense
decreased by 34.6%, or $6.3 million, to $11.9 million in the three
months ended September 30, 2020 from $18.2 million in the three
months ended September 30, 2019. The decrease in interest expense
is attributable to:
- a $6.8 million decrease in interest expense due to a decrease
in debt service cost of approximately 2.3% and a $84.6 million
decrease in our average debt (including leaseback obligations), to
$1,518.5 million in the three months ended September 30, 2020,
compared to $1,603.1 million in the three months ended September
30, 2019; and
- a $0.5 million increase in the amortization of deferred finance
costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2020, our outstanding bank debt, gross of
deferred finance costs, was $1,376.2 million and our leaseback
obligation was $129.4 million compared to bank debt of $1,450.0
million and our leaseback obligation of $141.4 million as of
September 30, 2019.
Interest income increased to $1.7 million in the three months
ended September 30, 2020 compared to $1.6 million in the three
months ended September 30, 2019.
Other finance costs, net Other finance costs, net
remained stable at $0.3 million in each of the three months ended
September 30, 2020 and September 30, 2019.
Equity income on investments Equity income on investments
increased by $0.9 million to $1.5 million of income on investments
in the three months ended September 30, 2020 compared to $0.6
million in the three months ended September 30, 2019 due to the
improved operating performance of Gemini, in which the Company has
a 49% shareholding interest.
Loss on derivatives Amortization of deferred realized
losses on interest rate swaps remained stable at $0.9 million in
each of the three months ended September 30, 2020 and September 30,
2019.
Other income, net Other income, net was $0.1 million in
the three months ended September 30, 2020 compared to nil in the
three months ended September 30, 2019.
Adjusted EBITDA Adjusted EBITDA increased by 5.0%, or
$4.0 million, to $83.3 million in the three months ended September
30, 2020 from $79.3 million in the three months ended September 30,
2019. As outlined above, the increase is mainly attributable to a
$7.1 million increase in operating revenues and a $0.9 million
increase in the operating performance of our equity investees,
which were partially offset by a $4.0 million increase in operating
expenses. Adjusted EBITDA for the three months ended September 30,
2020 is adjusted for stock based compensation of $0.3 million.
Tables reconciling Adjusted EBITDA to Net Income can be found at
the end of this earnings release.
Nine months ended September 30, 2020
compared to the nine months ended September 30, 2019
During the nine months ended September 30, 2020, Danaos had an
average of 56.9 containerships compared to 55.0 containerships
during the nine months ended September 30, 2019. Our fleet
utilization for the nine months ended September 30, 2020 was 95.8%
compared to 98.8% for the nine months ended September 30, 2019.
Adjusted fleet utilization, excluding the effect of 188 days of
incremental off-hire due to shipyard delays related to the COVID-19
pandemic, was 97.0% in the nine months ended September 30,
2020.
Our adjusted net income amounted to $123.1 million, or $4.97 per
share, for the nine months ended September 30, 2020 compared to
$110.7 million, or $7.23 per share, for the nine months ended
September 30, 2019. We have adjusted our net income in the nine
months ended September 30, 2020 for amortization of non-cash fees
and accrued finance fees charge of $12.7 million. Please refer to
the Adjusted Net Income reconciliation table, which appears later
in this earnings release.
The increase of $12.4 million in adjusted net income for the
nine months ended September 30, 2020 compared to the nine months
ended September 30, 2019 is attributable mainly to a $13.1 million
decrease in net finance expenses, a $4.9 million increase in
operating revenues and a $4.2 million increase in the operating
performance of our equity investment in Gemini, which were
partially offset by a $9.8 million increase in total operating
expenses.
On a non-adjusted basis, our net income amounted to $110.4
million, or $4.45 earnings per diluted share, for the nine months
ended September 30, 2020 compared to net income of $97.4 million,
or $6.36 earnings per diluted share, for the nine months ended
September 30, 2019.
Operating Revenues Operating revenues increased by 1.5%,
or $4.9 million, to $341.9 million in the nine months ended
September 30, 2020 from $337.0 million in the nine months ended
September 30, 2019.
Operating revenues for the nine months ended September 30, 2020
reflect:
- a $26.2 million increase in revenues in the nine months ended
September 30, 2020 compared to the nine months ended September 30,
2019 as a result of contractual increases in charter rates of
vessels under long-term charters;
- a $10.0 million increase in revenues in the nine months ended
September 30, 2020 compared to the nine months ended September 30,
2019 due to the acquisition of new vessels;
- a $6.2 million decrease in revenues due to lower fleet
utilization of our vessels in the nine months ended September 30,
2020 compared to the nine months ended September 30, 2019 mainly
due to the scheduled installation of scrubbers and dry-dockings of
our vessels, of which $3.2 million relates to incremental delays in
the Chinese shipyards where these activities were being performed
due to the COVID-19 pandemic;
- a $9.3 million decrease in revenues in the nine months ended
September 30, 2020 compared to the nine months ended September 30,
2019 as a result of lower re-chartering rates for certain of our
vessels. This decrease is due to a $12.5 million decrease in
revenues due to the re-chartering of six vessels in our fleet that
concluded long-term charters over the last twelve months and were
re-deployed at the prevailing lower spot rates at the time these
vessels were re-chartered, partially offset by a $3.2 million
improvement from the re-chartering of other vessels in the fleet;
and
- a $15.8 million decrease in revenues in the nine months ended
September 30, 2020 compared to the nine months ended September 30,
2019 due to lower non-cash revenue recognition in accordance with
US GAAP.
Vessel Operating Expenses Vessel operating expenses
increased by $4.2 million to $82.2 million in the nine months ended
September 30, 2020 from $78.0 million in the nine months ended
September 30, 2019, primarily as a result of the increase in the
average number of vessels in our fleet, partially offset by an
overall decrease in the average daily operating cost to $5,592 per
vessel per day for vessels on time charter for the nine months
ended September 30, 2020 compared to $5,605 per vessel per day for
the nine months ended September 30, 2019. Management believes that
our daily operating cost are among the most competitive in the
industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 4.9%, or $3.5
million, to $75.6 million in the nine months ended September 30,
2020 from $72.1 million in the nine months ended September 30, 2019
mainly due to the installation of scrubbers on nine of our vessels
and the acquisition of the vessels Niledutch Lion, Phoebe and SM
Charleston in the nine months ended September 30, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
increased by $1.9 million to $8.4 million in the nine months ended
September 30, 2020 from $6.5 million in the nine months ended
September 30, 2019.
General and Administrative Expenses General and
administrative expenses decreased by $1.9 million to $17.9 million
in the nine months ended September 30, 2020, from $19.8 million in
the nine months ended September 30, 2019. The decrease was mainly
due to decreased non-cash recognition of share-based
compensation.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $2.1 million to
$10.9 million in the nine months ended September 30, 2020 from $8.8
million in the nine months ended September 30, 2019 primarily as a
result of the increase in the average number of vessels in our
fleet.
Interest Expense and Interest Income Interest expense
decreased by 23.7%, or $13.0 million, to $41.9 million in the nine
months ended September 30, 2020 from $54.9 million in the nine
months ended September 30, 2019. The decrease in interest expense
is attributable to:
- a $12.5 million decrease in interest expense due to a decrease
in debt service cost by approximately 1.3% and a $97.3 million
decrease in our average debt (including leaseback obligations), to
$1,532.5 million in the nine months ended September 30, 2020,
compared to $1,629.8 million in the nine months ended September 30,
2019; and
- a $0.5 million decrease in the amortization of deferred finance
costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2020, our outstanding bank debt, gross of
deferred finance costs, was $1,376.2 million and our leaseback
obligation was $129.4 million compared to bank debt of $1,450.0
million and our leaseback obligation of $141.4 million as of
September 30, 2019.
Interest income increased by $0.2 million to $5.0 million in the
nine months ended September 30, 2020 compared to $4.8 million in
the nine months ended September 30, 2019.
Other finance costs, net Other finance costs, net
decreased by $0.4 million to $2.0 million in the nine months ended
September 30, 2020 compared to $2.4 million in the nine months
ended September 30, 2019 mainly due to the decrease in finance
costs related to the leaseback obligations, partially offset by
lease termination fees in the nine months ended September 30,
2020.
Equity income on investments Equity income on investments
increased by $4.2 million to $4.7 million of income on investments
in the nine months ended September 30, 2020 compared to $0.5
million in the nine months ended September 30, 2019 due to the
improved operating performance of Gemini, in which the Company has
a 49% shareholding interest.
Loss on derivatives Amortization of deferred realized
losses on interest rate swaps remained stable at $2.7 million in
each of the nine months ended September 30, 2020 and September 30,
2019.
Other income, net Other income, net was $0.3 million in
the nine months ended September 30, 2020 compared to $0.4 million
in income in the nine months ended September 30, 2019.
Adjusted EBITDA Adjusted EBITDA increased by 1.2%, or
$2.9 million, to $235.3 million in the nine months ended September
30, 2020 from $232.4 million in the nine months ended September 30,
2019. As outlined above, the increase is mainly attributable to a
$4.9 million increase in operating revenues, a $4.2 million
increase in the operating performance of our equity investees and a
$0.4 million decrease in other finance expenses, which were
partially offset by a $6.6 million increase in operating expenses.
Adjusted EBITDA for the nine months ended September 30, 2020 is
adjusted for stock based compensation of $0.9 million. Tables
reconciling Adjusted EBITDA to Net Income can be found at the end
of this earnings release.
Recent Developments On
October 12, 2020, we announced the repurchase of 4,339,271 shares
of our common stock for an aggregate purchase price of $31.1
million in privately negotiated transactions, including 2,517,013
shares from the Royal Bank of Scotland and 1,822,258 shares from
Sphinx Investment Corp. These transactions resulted in the
Company's previously announced share repurchase program being
terminated.
On October 16, 2020, we entered into agreements to acquire two
9,000 TEU container vessels built in 2009 for a gross aggregate
purchase price of $62.0 million. These vessels are expected to be
delivered to us by the end of January 2021.
Conference Call and Webcast
On Friday, November 6, 2020 at 9:00 A.M. ET, the Company's
management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until November 13, 2020 by dialing 1 877 344 7529 (US Toll Free
Dial In) or 1-412-317-0088 (Standard International Dial In) and
using 10149664# as the access code.
Audio Webcast There will also be a live and then archived
webcast of the conference call on the Danaos website
(www.danaos.com). Participants of the live webcast should register
on the website approximately 10 minutes prior to the start of the
webcast.
Slide Presentation A slide presentation regarding the
Company and the containership industry will also be available on
the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of
modern, large-size containerships. Our current fleet of 63
containerships aggregating 385,769 TEUs, including five vessels
owned by Gemini Shipholdings Corporation, a joint venture, ranks
Danaos among the largest containership charter owners in the world
based on total TEU capacity. Our fleet is chartered to many of the
world's largest liner companies on fixed-rate charters. Our long
track record of success is predicated on our efficient and rigorous
operational standards and environmental controls. Danaos
Corporation's shares trade on the New York Stock Exchange under the
symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking
statements within the meaning of the safe harbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements reflect
our 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. The forward-looking statements in
this release are based upon various assumptions. Although Danaos
Corporation 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, Danaos
Corporation 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
impact of the COVID-19 pandemic and efforts throughout the world to
contain its spread, including effects on global economic activity,
demand for seaborne transportation of containerized cargo, the
ability and willingness of charterers to perform their obligations
to us, charter rates for containerships, shipyards performing
scrubber installations, drydocking and repairs, changing vessel
crews and availability of financing; the effects of the 2018
refinancing transactions; Danaos’ ability to achieve the expected
benefits of the refinancing and comply with the terms of its new
credit facilities and other agreements entered into in connection
with the 2018 refinancing; the strength of world economies and
currencies, general market conditions, including changes in charter
hire rates and vessel values, charter counterparty performance,
changes in demand that may affect attitudes of time charterers to
scheduled and unscheduled dry-docking, changes in Danaos
Corporation's operating expenses, including bunker prices,
dry-docking and insurance costs, ability to obtain financing and
comply with covenants in our financing arrangements, actions taken
by regulatory authorities, potential liability from pending or
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 Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 60 unscheduled off-hire days in the three months
ended September 30, 2020. The following table summarizes vessel
utilization and the impact of the off-hire days on the Company’s
revenue.
Vessel Utilization (No. of
Days)
First Quarter
Second Quarter
Third Quarter
2020
2020
2020
Total
Ownership Days
5,073
5,193
5,336
15,602
Less Off-hire Days:
Scheduled Off-hire Days
(336
)
(60
)
(10
)
(406
)
Other Off-hire Days
(104
)
(92
)
(60
)
(256
)
Operating Days
4,633
5,041
5,266
14,940
Vessel Utilization
91.3
%
97.1
%
98.7
%
95.8
%
Operating Revenues (in '000s of US
Dollars)
$
106,196
$
116,824
$
118,932
$
341,952
Average Gross Daily Charter
Rate
$
22,922
$
23,175
$
22,585
$
22,888
Vessel Utilization (No. of
Days)
First Quarter
Second Quarter
Third Quarter
2019
2019
2019
Total
Ownership Days
4,950
5,005
5,060
15,015
Less Off-hire Days:
Scheduled Off-hire Days
-
(22
)
(41
)
(63
)
Other Off-hire Days
(90
)
(10
)
(24
)
(124
)
Operating Days
4,860
4,973
4,995
14,828
Vessel Utilization
98.2
%
99.4
%
98.7
%
98.8
%
Operating Revenues (in '000s of US
Dollars)
$
112,891
$
112,319
$
111,830
$
337,040
Average Gross Daily Charter
Rate
$
23,229
$
22,586
$
22,388
$
22,730
Fleet List
The following table describes in detail our fleet deployment
profile as of November 5, 2020:
Vessel Name
Vessel Size
(TEU)
Year Built
Expiration of
Charter(1)
Containerships
Hyundai Ambition (ex MSC Ambition)
13,100
2012
June 2024
Hyundai Speed (ex Maersk Exeter)
13,100
2012
June 2024
Hyundai Smart (ex Maersk Enping)
13,100
2012
May 2024
Hyundai Respect
13,100
2012
March 2024
Hyundai Honour
13,100
2012
February 2024
Express Rome
10,100
2011
February 2022
Express Berlin
10,100
2011
April 2022
Express Athens
10,100
2011
February 2022
Le Havre
9,580
2006
April 2023
Pusan C
9,580
2006
March 2023
Niledutch Lion
8,626
2008
February 2022
SM Charleston
8,533
2005
December 2021
CMA CGM Melisande
8,530
2012
May 2024
CMA CGM Attila
8,530
2011
October 2023
CMA CGM Tancredi
8,530
2011
November 2023
CMA CGM Bianca
8,530
2011
January 2024
CMA CGM Samson
8,530
2011
March 2024
America
8,468
2004
February 2023
Europe
8,468
2004
March 2023
Phoebe
8,463
2005
April 2022
CMA CGM Moliere
6,500
2009
February 2022
CMA CGM Musset
6,500
2010
August 2022
CMA CGM Nerval
6,500
2010
October 2022
CMA CGM Rabelais
6,500
2010
December 2022
CMA CGM Racine
6,500
2010
January 2023
YM Mandate
6,500
2010
January 2028
YM Maturity
6,500
2010
April 2028
Performance
6,402
2002
December 2020
Dimitra C
6,402
2002
January 2023
YM Seattle
4,253
2007
December 2020
YM Vancouver
4,253
2007
November 2020
Derby D
4,253
2004
November 2020
ANL Tongala
4,253
2004
November 2020
Rio Grande (ex ZIM Rio Grande)
4,253
2008
November 2020
ZIM Sao Paolo
4,253
2008
December 2020
ZIM Kingston
4,253
2008
February 2021
ZIM Monaco
4,253
2009
February 2021
ZIM Dalian
4,253
2009
February 2021
ZIM Luanda
4,253
2009
May 2021
Dimitris C
3,430
2001
December 2020
Express Black Sea
3,400
2011
December 2020
Express Spain
3,400
2011
November 2020
Express Argentina
3,400
2010
November 2020
Express Brazil
3,400
2010
September 2021
Express France
3,400
2010
October 2021
Singapore
3,314
2004
October 2021
Colombo
3,314
2004
November 2020
Zebra (ex MSC Zebra)
2,602
2001
November 2020
Amalia C
2,452
1998
May 2021
Danae C
2,524
2001
November 2020
Advance
2,200
1997
November 2020
Future
2,200
1997
November 2020
Sprinter
2,200
1997
November 2020
Stride
2,200
1997
November 2020
Progress C
2,200
1998
November 2020
Bridge
2,200
1998
February 2021
Highway
2,200
1998
March 2021
Vladivostok
2,200
1997
November 2020
Belita ľ2)
8,533
2006
September 2021
Catherine C (2)
6,422
2001
January 2023
Leo C (2)
6,422
2002
August 2022
Suez Canal(2)
5,610
2002
December 2020
Genoaľ2)
5,544
2002
September 2021
(1)
Earliest date charters could expire. Some
charters include options to extend their terms.
(2)
Vessels acquired by Gemini Shipholdings
Corporation, in which Danaos holds a 49% equity interest.
DANAOS CORPORATION
Condensed Consolidated
Statements of Income - Unaudited
(Expressed in thousands of
United States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
OPERATING REVENUES
$
118,932
$
111,830
$
341,952
$
337,040
OPERATING EXPENSES
Vessel operating expenses
(27,662
)
(24,858
)
(82,232
)
(78,035
)
Depreciation & amortization
(28,939
)
(26,607
)
(84,029
)
(78,666
)
General & administrative
(6,048
)
(6,422
)
(17,901
)
(19,783
)
Other operating expenses
(3,552
)
(2,792
)
(10,887
)
(8,794
)
Income From Operations
52,731
51,151
146,903
151,762
OTHER INCOME/(EXPENSES)
Interest income
1,650
1,586
4,952
4,751
Interest expense
(11,907
)
(18,216
)
(41,865
)
(54,903
)
Other finance expenses
(330
)
(308
)
(1,990
)
(2,402
)
Equity income on investments
1,464
560
4,729
508
Other income/(loss), net
91
(5
)
361
429
Realized loss on derivatives
(913
)
(913
)
(2,719
)
(2,709
)
Total Other Expenses, net
(9,945
)
(17,296
)
(36,532
)
(54,326
)
Net Income
$
42,786
$
33,855
$
110,371
$
97,436
EARNINGS PER SHARE
Basic earnings per share
$
1.74
$
2.27
$
4.49
$
6.52
Diluted earnings per share
$
1.73
$
2.20
$
4.45
$
6.36
Basic weighted average number of common
shares (in thousands of shares)
24,573
14,939
24,573
14,939
Diluted weighted average number of common
shares (in thousands of shares)
24,789
15,373
24,789
15,309
Non-GAAP Measures1
Reconciliation of Net Income
to Adjusted Net Income – Unaudited
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
Net income
$
42,786
$
33,855
$
110,371
$
97,436
Amortization of financing fees, debt
discount & finance fees accrued
4,517
4,027
12,707
13,270
Adjusted Net Income
$
47,303
$
37,882
$
123,078
$
110,706
Adjusted Earnings Per Share,
diluted
$
1.91
$
2.46
$
4.97
$
7.23
Diluted weighted average number of shares
(in thousands)
24,789
15,373
24,789
15,309
1 The Company reports its financial
results in accordance with U.S. generally accepted accounting
principles (GAAP). However, management believes that certain
non-GAAP financial measures used in managing the business may
provide users of this financial information additional meaningful
comparisons between current results and results in prior operating
periods. Management believes that these non-GAAP financial measures
can provide additional meaningful reflection of underlying trends
of the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Table above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and nine months ended
September 30, 2020 and 2019. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company’s
reported results prepared in accordance with GAAP.
DANAOS CORPORATION
Condensed Consolidated Balance
Sheets - Unaudited
(Expressed in thousands of
United States dollars)
As of
As of
September 30,
December 31,
2020
2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
106,368
$
139,170
Accounts receivable, net
10,846
7,145
Other current assets
45,406
44,071
162,620
190,386
NON-CURRENT ASSETS
Fixed assets, net
2,441,815
2,389,874
Deferred charges, net
16,427
11,455
Investments in affiliates
13,694
8,965
Other non-current assets
61,465
82,339
2,533,401
2,492,633
TOTAL ASSETS
$
2,696,021
$
2,683,019
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Long-term debt, current portion
$
126,326
$
119,673
Accumulated accrued interest, current
portion
29,679
34,137
Long-term leaseback obligations, current
portion
24,166
16,342
Accounts payable, accrued liabilities
& other current liabilities
37,302
52,928
217,473
223,080
LONG-TERM LIABILITIES
Long-term debt, net
1,222,971
1,270,663
Accumulated accrued interest, net of
current portion
132,319
156,583
Long-term leaseback obligations, net
101,522
121,872
Other long-term liabilities
22,024
29,131
1,478,836
1,578,249
STOCKHOLDERS’ EQUITY
Common stock
248
248
Additional paid-in capital
786,171
785,274
Accumulated other comprehensive loss
(110,180
)
(116,934
)
Retained earnings
323,473
213,102
999,712
881,690
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,696,021
$
2,683,019
DANAOS CORPORATION
Condensed Consolidated
Statements of Cash Flows - Unaudited
(Expressed in thousands of
United States dollars)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
Operating Activities:
Net income
$
42,786
$
33,855
$
110,371
$
97,436
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
25,765
24,336
75,604
72,141
Amortization of deferred drydocking &
special survey costs, finance cost, debt discount and other finance
fees accrued
7,691
6,298
21,662
19,795
PIK interest
686
850
2,236
2,545
Payments for drydocking/special survey
(17
)
(3,524
)
(13,397
)
(5,214
)
Amortization of deferred realized losses
on cash flow interest rate swaps
913
913
2,719
2,709
Equity income on investments
(1,464
)
(560
)
(4,729
)
(508
)
Stock based compensation
301
1,195
897
3,060
Accounts receivable
1,706
(141
)
(3,701
)
1,588
Other assets, current and non-current
3,031
(2,923
)
2,342
(13,996
)
Accounts payable and accrued
liabilities
(8,323
)
(379
)
614
(563
)
Other liabilities, current and
long-term
(3,911
)
(3,731
)
(8,586
)
(11,348
)
Net Cash provided by Operating
Activities
69,164
56,189
186,032
167,645
Investing Activities:
Vessel additions and advances
(7,403
)
(4,124
)
(106,149
)
(14,762
)
Investments
-
-
(75
)
-
Net Cash used in Investing
Activities
(7,403
)
(4,124
)
(106,224
)
(14,762
)
Financing Activities:
Proceeds from sale-leaseback of
vessels
-
-
139,080
146,523
Proceeds from long-term debt
13,300
-
36,700
-
Payments of leaseback obligations
(5,877
)
(3,063
)
(147,942
)
(5,149
)
Debt repayment
(34,573
)
(25,578
)
(99,749
)
(231,389
)
Payments of accumulated accrued
interest
(5,284
)
(8,979
)
(20,786
)
(26,846
)
Finance costs
(7,914
)
(10,425
)
(19,913
)
(30,474
)
Net Cash used in Financing
Activities
(40,348
)
(48,045
)
(112,610
)
(147,335
)
Net Increase/(Decrease) in cash and cash
equivalents
21,413
4,020
(32,802
)
5,548
Cash and cash equivalents, beginning of
period
84,955
78,803
139,170
77,275
Cash and cash equivalents, end of
period
$
106,368
$
82,823
$
106,368
$
82,823
DANAOS CORPORATION
Reconciliation of Net Income
to Adjusted EBITDA - Unaudited
(Expressed in thousands of
United States dollars)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
Net income
$
42,786
$
33,855
$
110,371
$
97,436
Depreciation
25,765
24,336
75,604
72,141
Amortization of deferred drydocking &
special survey costs
3,174
2,271
8,425
6,525
Amortization of deferred finance costs,
debt discount and other finance fees accrued
4,517
4,027
12,707
13,270
Amortization of deferred realized losses
on interest rate swaps
913
913
2,719
2,709
Interest income
(1,650
)
(1,586
)
(4,952
)
(4,751
)
Interest expense
7,525
14,317
29,551
42,057
Stock based compensation
301
1,195
897
3,060
Adjusted EBITDA(1)
$
83,331
$
79,328
$
235,322
$
232,447
1)
Adjusted EBITDA represents net income
before interest income and expense, depreciation, amortization of
deferred drydocking & special survey costs, amortization of
deferred finance costs, debt discount and other finance fees
accrued, amortization of deferred realized losses on interest rate
swaps and stock based compensation. However, Adjusted EBITDA is not
a recognized measurement under U.S. generally accepted accounting
principles, or “GAAP.” We believe that the presentation of Adjusted
EBITDA is useful to investors because it is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in our industry. We also believe that
Adjusted EBITDA is useful in evaluating our operating performance
compared to that of other companies in our industry because the
calculation of Adjusted EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of capital
expenditures and acquisitions, items which may vary for different
companies for reasons unrelated to overall operating performance.
In evaluating Adjusted EBITDA, you should be aware that in the
future we may incur expenses that are the same as or similar to
some of the adjustments in this presentation. Our presentation of
Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items.
Note: Items to consider for comparability
include gains and charges. Gains positively impacting net income
are reflected as deductions to net income. Charges negatively
impacting net income are reflected as increases to net income.
The Company reports its financial results
in accordance with U.S. generally accepted accounting principles
(GAAP). However, management believes that certain non-GAAP
financial measures used in managing the business may provide users
of these financial information additional meaningful comparisons
between current results and results in prior operating periods.
Management believes that these non-GAAP financial measures can
provide additional meaningful reflection of underlying trends of
the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Tables above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and nine months ended
September 30, 2020 and 2019. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company’s
reported results prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005835/en/
Evangelos Chatzis Chief Financial Officer Danaos
Corporation Athens, Greece Tel.: +30 210 419 6480 E-Mail:
cfo@danaos.com Iraklis Prokopakis Senior Vice President and
Chief Operating Officer Danaos Corporation Athens, Greece Tel.: +30
210 419 6400 E-Mail: coo@danaos.com Investor Relations and
Financial Media Rose & Company New YorkTel. 212-359-2228
E-Mail: danaos@rosecoglobal.com
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