Castor Maritime Inc. (NASDAQ: CTRM) (“Castor” or the “Company”), a
diversified global shipping company, today announced its results
for the three months and nine months ended September 30, 2023.
Earnings Highlights of the Third Quarter
Ended September 30, 2023:
- Total Vessel Revenues from
continuing operations: $21.4 million for the three months ended
September 30, 2023, as compared to $39.4 million for the three
months ended September 30, 2022, or a 45.7% decrease;
- Net loss from continuing
operations of $5.4 million for the three months ended September 30,
2023, as compared to net income of $18.3 million for the three
months ended September 30, 2022, or a 129.5%
decrease;
- Net loss of $5.4 million
for the three months ended September 30, 2023, as compared to net
income of $37.1 million for the three months ended September 30,
2022, or a 114.6% decrease;
- Earnings / (Loss) (basic
and diluted) per common share from continuing operations: $(0.06)
per share for the three months ended September 30, 2023, as
compared to $0.19 per share for the three months ended September
30, 2022;
- EBITDA from continuing
operations(1): $2.5 million for
the three months ended September 30, 2023, as compared to $24.6
million for the three months ended September 30,
2022;
- Adjusted EBITDA from
continuing operations(1): $10.9
million for the three months ended September 30, 2023, as compared
to $24.6 million for the three months ended September 30,
2022;
- Cash and restricted cash of
$95.0 million as of September 30, 2023, as compared to $109.9
million as of December 31, 2022.
(1) EBITDA and Adjusted EBITDA are not
recognized measures under United States generally accepted
accounting principles (“U.S. GAAP”). Please refer to Appendix B for
the definition and reconciliation of these measures to Net income /
(Loss), the most directly comparable financial measure calculated
and presented in accordance with U.S. GAAP.
Highlights of the Nine Months Ended
September 30, 2023:
- Total Vessel Revenues from
continuing operations: $71.2 million for the nine months ended
September 30, 2023, as compared to $118.9 million for the nine
months ended September 30, 2022, or a 40.1% decrease;
- Net loss from continuing
operations of $3.7 million for the nine months ended September 30,
2023, as compared to net income $58.7 million for the nine months
ended September 30, 2022, or a 106.3% decrease;
- Net income of $13.6 million
for the nine months ended September 30, 2023, as compared to $84.9
million for the nine months ended September 30, 2022, or a 84.0%
decrease;
- Earnings / (loss) (basic
and diluted) per common share from continuing operations: $(0.04)
per share for the nine months ended September 30, 2023, as compared
to $0.62 per share for the nine months ended September 30,
2022;
- EBITDA from continuing
operations(1): $20.2 million for
the nine months ended September 30, 2023, as compared to $76.8
million for the nine months ended September 30, 2022;
- Adjusted EBITDA from
continuing operations(1): $33.7
million for the nine months ended September 30, 2023, as compared
to $76.8 million for the nine months ended September 30,
2022;
- The spin-off (the
“Spin-Off”) of our Aframax/LR2 and Handysize tanker segments to a
new Nasdaq listed company, Toro Corp. (“Toro”), was completed on
March 7, 2023; and
- Following the Spin-Off, the
results of the tanker business are reported as discontinued
operations for all periods presented.
(1) EBITDA and Adjusted EBITDA are not
recognized measures under United States generally accepted
accounting principles (“U.S. GAAP”). Please refer to Appendix B for
the definition and reconciliation of these measures to Net income /
(Loss), the most directly comparable financial measure calculated
and presented in accordance with U.S. GAAP.
Management Commentary Third Quarter
2023:
Mr. Petros Panagiotidis, Chairman, Chief
Executive Officer and Chief Financial Officer of Castor
commented:
“In the third quarter of 2023 we continued to
observe softness in the dry cargo market compared to the third
quarter a year ago, which affected our revenues and cash flows. We
have disposed a number of our dry cargo vessels in order to improve
the profile of our fleet.
We enjoy a strong balance sheet and we remain
committed to our growth trajectory by seeking further opportunities
in the shipping space, including opportunities to modernize our
fleet.”
Earnings Commentary:
Third Quarter ended September 30, 2023,
and 2022 Results
Total vessel revenues from continuing operations
for the three months ended September 30, 2023, decreased to $21.4
million from $39.4 million in the same period of 2022. This
variation was mainly driven by the decrease in the prevailing
charter rates of dry bulk vessels. The decrease was partly offset
by the increase in our Available Days (defined below) from 1,769
days in the three months ended September 30, 2022, to 1,859 days in
the three months ended September 30, 2023, following the
acquisition of two containerships that were delivered to the
Company in November 2022, both of which are employed under fixed
rate time charter contracts.
The increase in voyage expenses from continuing
operations to $1.3 million in the three months ended September 30,
2023, from $0.8 million in the same period of 2022, is mainly
associated with the decrease of gain on bunkers by $0.7 million
partly offset by decreased brokerage commission expenses
corresponding to the decrease in vessel revenues discussed
above.
The increase in vessel operating expenses from
continuing operations by $0.1 million, to $10.1 million in the
three months ended September 30, 2023, from $10.0 million in the
same period of 2022, mainly reflects the increase in the Ownership
Days of our Fleet to 1,859 days in the three-months ended September
30, 2023, from 1,840 days in the same period in 2022.
Management fees from continuing operations in
the three months ended September 30, 2023, amounted to $1.8
million, whereas in the same period of 2022, management fees
totaled $1.7 million. This increase in management fees is mainly
due to the increase in our Ownership Days for which our managers
charge us a daily management fee, stemming from the expansion of
our fleet and, in part, due to a management fee adjustment for
inflation under our Amended and Restated Master Management
Agreement, with effect from July 1, 2023.
The increase in vessels’ depreciation and
amortization costs by $1.1 million, to $5.9 million in the three
months ended September 30, 2023, from $4.8 million in the same
period of 2022, mainly reflect the increase in our Ownership Days
following the acquisition of the two containerships.
General and administrative expenses from
continuing operations in the three months ended September 30, 2023,
amounted to $1.6 million, whereas, in the same period of 2022
general and administrative expenses totaled $2.3 million. This
decrease mainly stemmed from higher corporate fees primarily
related to the Spin-Off that occurred during the three months
period ended September 30, 2022.
Gain on sale of vessel from continuing
operations in the three months ended September 30, 2023, amounted
to $3.2 million following the sale of M/V Magic Twilight on July
20, 2023.
During the three months ended September 30,
2023, we incurred net interest costs and finance costs from
continuing operations amounting to $1.9 million compared to $1.5
million during the same period in 2022. The increase is due to our
higher weighted average interest rate as a result of the increase
in the variable benchmark rates during the three months ended
September 30, 2023, as compared with the same period of 2022,
partly offset by an increase in interest we earned from time
deposits due to increased interest rates.
Other income / (expenses), net from continuing
operations in the three months ended September 30, 2023, amounted
to $(7.2) million, which mainly includes the unrealized loss of
$8.4 million from revaluing our investments in listed equity
securities at period end market rates. We did not hold any
investment in equity securities during the three months period
ended September 30, 2022. Other expenses in the three months ended
September 30, 2023 were partially offset by dividend income on
equity securities of $0.8 million and dividend income of $0.4
million from our investment in 1.00% Series A Fixed Rate Cumulative
Perpetual Convertible Preferred Shares of Toro (“Series A Preferred
Shares”).
Recent
Financial Developments
Commentary:
At-the-market (“ATM”) Common Shares
offering program
On May 23, 2023, we entered into an equity
distribution agreement, for an at-the-market offering of our common
shares, par value $0.001 per share (the “Common Shares”), with
Maxim Group LLC acting as a sales agent, under which we may sell an
aggregate offering price of up to $30.0 million (the “ATM
Program”). No warrants, derivatives, or other share classes were
associated with this transaction. As of September 30, 2023, we had
received gross proceeds of $0.9 million under the ATM Program by
issuing 2,013,788 Common Shares. There were no sales under the ATM
Program during the third quarter 2023. The net proceeds under the
ATM Program, after deducting sales commissions and other
transaction fees and expenses (advisory and legal fees), amounted
to $0.6 million on a year to date basis. As of November 7, 2023, we
had 96,623,876 Common Shares issued and outstanding.
New Series D Preferred
Shares
On August 7, 2023, we agreed to issue 50,000
Series D Preferred Shares, having a stated value of $1,000 and par
value of $0.001 per share, to Toro for aggregate consideration of
$50.0 million in cash. Dividends are payable quarterly and the
dividend rate of the Series D Preferred Shares is 5.00% per annum,
which rate will be multiplied by a factor of 1.3 on the seventh
anniversary of the issue date of the Series D Preferred Shares and
annually thereafter, subject to a maximum dividend rate of 20% per
annum in respect of any quarterly dividend period. On October 16,
2023, we paid Toro a dividend on the Series D Preferred Shares,
amounting to $0.5 million.
The Series D Preferred Shares are convertible,
in whole or in part, at Toro’s option to Common Shares from the
first anniversary of the issue date of the Series D Preferred
Shares at the lower of (i) $0.70 per Common Shares and (ii) the 5
day value weighted average price immediately preceding the
conversion. The conversion price of the Series D Preferred Shares
is subject to adjustment upon the occurrence of certain events,
including the occurrence of splits and combinations (including a
reverse stock split) of the Common Shares. The minimum conversion
price is $0.30 per Common Share.
This transaction and its terms were approved by
the independent members of the board of directors of each of Castor
and Toro at the recommendation of their respective special
committees comprised of independent and disinterested directors,
which negotiated the transaction and its terms.
Warrant Repurchases
On October 6, 2023, we repurchased, in privately
negotiated transactions with unaffiliated third-party
warrantholders, 8,900,000 warrants issued on April 7, 2021 (the
“April 7 Warrants”) and 67,864 warrants issued on July 15, 2020
(the “Private Placement Warrants”) for $0.105 per repurchased
warrant, or an aggregate purchase price of $0.9 million. We agreed
that if at any time prior to January 31, 2024, we repurchase
additional April 7 Warrants at a higher price, we will pay the
selling warrantholders the difference between the higher repurchase
price and $0.105 with respect to the applicable repurchased
warrants. Following the repurchase, (i) 10,330,770 April 7 Warrants
with an exercise price of $5.53, (ii) no Private Placement Warrants
and (iii) 62,344 Class A warrants issued on June 26, 2020 with an
exercise price of $2.53, remain outstanding, each exercisable for
one Common Share.
Liquidity/ Financing/Cash flow
update
Our consolidated cash position (including our
restricted cash) from continuing operations as of September 30,
2023, decreased by $14.9 million to $95.0 million, as compared to
our cash position on December 31, 2022, which amounted to $109.9
million. The decrease was mainly the result of: (i) $11.2 million
of net operating cash flows received during the nine months ended
September 30, 2023, (ii) $72 million of net cash outflow from the
net purchase of equity securities (iii) $28.0 million inflow of net
proceeds from the sales of M/V Magic Rainbow and M/V Magic Twilight
to unaffiliated third-party buyers and from an advance deposit of
$3.2 million received relating to the sale of M/V Magic Argo,
offset by $0.2 million used for other capital expenditures relating
to our fleet, (iv) $49.9 million of net proceeds following the
issuance of Series D Preferred Shares, (v) $38.2 million for
scheduled principal repayments and early prepayments due to sale of
vessels, on our debt, (vi) a $2.7 million cash reimbursement from
Toro related to the Spin-Off expenses incurred by us on Toro’s
behalf during 2022 and up to the completion of the Spin-Off and
(vii) $0.6 million of net proceeds under the ATM Program.
As of September 30, 2023, our total debt from
continuing operations, gross of unamortized deferred loan fees, was
$102.3 million, of which $19.5 million is repayable within one
year, as compared to $140.5 million of gross total debt as of
December 31, 2022.
Recent
Business Developments
Commentary:
Sale of vessels
On July 20, 2023, the M/V Magic Twilight that we
agreed to sell on June 2, 2023 was delivered to its new third party
owners. The Company recognized during the third quarter of 2023 a
net gain on the sale of the M/V Magic Twilight of approximately
$3.2 million.
On September 22, 2023, we entered into an
agreement with an unaffiliated third party for the sale of the M/V
Magic Argo, a 2009-built Kamsarmax, at a price of $15.75 million.
The vessel is expected to be delivered to its new owners during the
fourth quarter of 2023. The Company expects to recognize during the
fourth quarter of 2023 a net gain on the sale of the M/V Magic Argo
of approximately $3.0 million, excluding any transaction related
costs.
On September 26, 2023, we announced that the
previously announced sale of the M/V Magic Moon was terminated
following the buyer’s failure to take delivery of the vessel.
Accordingly, the vessel remains in our fleet and we will not
receive its purchase price of $13.95 million, that would have
included a net gain before transaction costs of $5.3 million. We
are seeking appropriate compensation pursuant to the terms of the
Memorandum of Agreement for this sale.
On October 6, 2023, we entered into an agreement
with an unaffiliated third party for the sale of the M/V Magic Sun
for a gross sale price of $6.55 million. The vessel is expected to
be delivered to her new owners during the fourth quarter of 2023.
We expect to recognize during the fourth quarter of 2023 a net gain
of approximately $1.0 million, excluding any transaction-related
costs.
On October 16, 2023, we entered into an
agreement with an unaffiliated third party for the sale of the M/V
Magic Phoenix for a gross sale price of $14.0 million. The vessel
is expected to be delivered to her new owners during the fourth
quarter of 2023. We expect to recognize during the fourth quarter
of 2023 a net loss of approximately $2.6 million, excluding any
transaction-related costs.
Recent Other
Developments Commentary:
Nasdaq Capital Market Minimum Bid Price
Notice
On April 20, 2023, the Company received a
notification from the Nasdaq that it was not in compliance with the
minimum $1.00 per share bid price requirement for continued listing
on the Nasdaq Capital Market and was provided with 180 calendar
days to regain compliance with the Nasdaq Capital Market minimum
bid price requirement. On October 19, 2023, we announced that we
received a notification letter on October 18, 2023 from Nasdaq
granting us an additional 180-day extension to April 15, 2024 (the
“Second Compliance Period”) to regain compliance with Nasdaq’s
$1.00 per share minimum bid price requirement (the “Minimum Bid
Price Requirement”) for continued listing of our Common Shares on
the Nasdaq Capital Market. We can cure this deficiency if the
closing bid price of our Common Shares is $1.00 per share or higher
for at least ten consecutive business days during the Second
Compliance Period. We intend to regain compliance with the Minimum
Bid Price Requirement within the Second Compliance Period and are
considering all available options, including a reverse stock split,
for which we have received shareholder approval. During the Second
Compliance Period, our Common Shares will continue to be listed and
trade on the Nasdaq Capital Market and our business operations are
not affected by receipt of the notification. If we do not regain
compliance within the Second Compliance Period, our Common Shares
will be subject to delisting by Nasdaq.
Fleet Employment Status (as of November
7, 2023) During the three months ended September 30, 2023,
we operated on average 20.2 vessels earning a Daily TCE
Rate(2) of $10,830 as compared to an average of
20.0 vessels earning a Daily TCE Rate(2) of
$21,836 during the same period in 2022.
Our current employment profile is presented immediately
below.
(2) Daily TCE Rate is not a recognized measure under U.S. GAAP.
Please refer to Appendix B for the definition and reconciliation of
this measure to Total vessel revenues, the most directly comparable
financial measure calculated and presented in accordance with U.S.
GAAP.
|
Dry Bulk Carriers |
|
Vessel Name |
Type |
Capacity (dwt) |
Year Built |
Country of Construction |
Type of Employment |
Daily Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Magic Orion |
Capesize |
180,200 |
2006 |
Japan |
TC(1) period |
101% of BCI5TC (2) |
Jan-24 |
Apr-24 |
|
Magic Venus |
Kamsarmax |
83,416 |
2010 |
Japan |
TC period |
100% of BPI5TC(3) |
Apr-24 |
Jul-24 |
|
Magic Thunder |
Kamsarmax |
83,375 |
2011 |
Japan |
TC period |
$14,350 per day(4) |
Dec-23 |
Mar-24 |
|
Magic Argo |
Kamsarmax |
82,338 |
2009 |
Japan |
TC period |
103% of BPI5TC |
Apr-24(11) |
Jul-24 |
|
Magic Perseus |
Kamsarmax |
82,158 |
2013 |
Japan |
TC period |
100% of BPI5TC |
Dec-23 |
Mar-24 |
|
Magic Starlight |
Kamsarmax |
81,048 |
2015 |
China |
TC period |
$14,000 per day(5) |
Jun-24 |
-(9) |
|
Magic Nebula |
Kamsarmax |
80,281 |
2010 |
Korea |
TC trip |
$11,500 per day |
Dec-23 |
Jan-24 |
|
Magic Nova |
Panamax |
78,833 |
2010 |
Japan |
TC period |
101% of BPI4TC(6) |
Apr-24 |
-(9) |
|
Magic Mars |
Panamax |
76,822 |
2014 |
Korea |
TC period |
$13,900 per day(7) |
May-24 |
-(9) |
|
Magic Phoenix |
Panamax |
76,636 |
2008 |
Japan |
TC trip |
$11,500 per day |
Nov-23(11) |
Nov-23 |
|
Magic Horizon |
Panamax |
76,619 |
2010 |
Japan |
TC period |
103% of BPI4TC |
Mar-24 |
-(8) |
|
Magic Moon |
Panamax |
76,602 |
2005 |
Japan |
TC trip |
$11,000 per day |
Dec-23 |
Jan-24 |
|
Magic P |
Panamax |
76,453 |
2004 |
Japan |
TC period |
96% of BPI4TC |
May-24 |
-(9) |
|
Magic Sun |
Panamax |
75,311 |
2001 |
Korea |
TC trip |
$13,000 per day |
Nov-23(11) |
Nov-23 |
|
Magic Vela |
Panamax |
75,003 |
2011 |
China |
TC period |
95% of BPI4TC |
May-24 |
Aug-24 |
|
Magic Eclipse |
Panamax |
74,940 |
2011 |
Japan |
TC period |
100% of BPI4TC |
Mar-24 |
Jun-24 |
|
Magic Pluto |
Panamax |
74,940 |
2013 |
Japan |
TC period |
$14,100 per day (10) |
Dec-23 |
Mar-24 |
|
Magic Callisto |
Panamax |
74,930 |
2012 |
Japan |
TC period |
101% of BPI4TC |
Apr-24 |
Jul-24 |
|
|
|
Containerships |
|
Vessel Name |
Type |
Capacity (dwt) |
Year Built |
Country of Construction |
Type of Employment |
Daily Gross Charter Rate ($/day) |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Ariana A |
Containership |
38,117 |
2005 |
Germany |
TC period |
$20,200 |
Jan-24 |
Mar-24 |
|
Gabriela A |
Containership |
38,121 |
2005 |
Germany |
TC period |
$26,350 |
Feb-24 |
May-24 |
|
(1) |
TC stands for time charter. |
|
(2) |
The benchmark vessel used in the calculation of the average of the
Baltic Capesize Index 5TC routes (“BCI5TC”) is a non-scrubber
fitted 180,000mt dwt vessel (Capesize) with specific age, speed –
consumption, and design characteristics. |
|
(3) |
The benchmark vessel used in the calculation of the average of the
Baltic Panamax Index 5TC routes (“BPI5TC”) is a non-scrubber fitted
82,000mt dwt vessel (Kamsarmax) with specific age,
speed–consumption, and design characteristics. |
|
(4) |
The vessel’s daily gross charter rate is equal to 97% of BPI5TC. In
accordance with the prevailing charter party, on September 29,
2023, the owners converted the index-linked rate to fixed from
October 1, 2023, until November 30, 2023, at a rate of $14,350 per
day. Upon completion of this period, the rate will be converted
back to index‑linked. |
|
(5) |
The vessel’s daily gross charter rate is equal to 98% of BPI5TC. In
accordance with the prevailing charter party, on September 29,
2023, the owners converted the index-linked rate to fixed from
October 1, 2023, until December 31, 2023, at a rate of $14,000 per
day. Upon completion of this period, the rate will be converted
back to index‑linked. |
|
(6) |
The benchmark vessel used in the calculation of the average of the
Baltic Panamax Index 4TC routes (“BPI4TC”) is a non-scrubber fitted
74,000mt dwt vessel (Panamax) with specific age, speed –
consumption, and design characteristics. |
|
(7) |
The vessel’s daily gross charter rate is equal to 102% of BPI4TC.
In accordance with the prevailing charter party, on September 8,
2023, the owners converted the index-linked rate to fixed from
October 1, 2023, until December 31, 2023, at a rate of $13,900 per
day. Upon completion of this period, the rate will be converted
back to index‑linked. |
|
(8) |
The earliest redelivery under the prevailing charter party is 8
months after delivery. Thereafter both Owners and Charterers have
the option to terminate the charter by providing 3 months written
notice to the other party. |
|
(9) |
The earliest redelivery under the prevailing charter party is 7
months after delivery. Thereafter both Owners and Charterers have
the option to terminate the charter by providing 3 months written
notice to the other party. |
|
(10) |
The vessel’s daily gross charter rate is equal to 100% of BPI4TC.
In accordance with the prevailing charter party, on September 12,
2023, the owners converted the index-linked rate to fixed from
October 1, 2023, until December 31, 2023, at a rate of $14,100 per
day. Upon completion of this period, the rate will be converted
back to index‑linked rate. |
|
(11) |
We agreed to sell the M/V Magic Argo, M/V Magic Sun and M/V Magic
Phoenix on September 22, 2023, October 6, 2023 and October 16,
2023, respectively. The vessels are still employed under their
existing charter parties and are each expected to be delivered to
their new owners during the fourth quarter of 2023. |
Financial Results Overview of Continuing
Operations:
Set forth below are selected financial data of
our dry bulk and containerships fleets (continuing operations) for
each of the three and nine months ended September 30, 2023, and
2022, respectively:
| |
Three Months Ended |
|
Nine Months Ended |
| (Expressed in U.S.
dollars) |
|
September 30, 2023(unaudited) |
|
September 30, 2022(unaudited) |
|
September 30, 2023(unaudited) |
September 30, 2022 (unaudited) |
|
Total vessel revenues |
$ |
21,404,903 |
|
$ |
39,390,681 |
$ |
71,151,984 |
|
118,920,093 |
| Operating income |
$ |
3,787,522 |
|
$ |
19,757,504 |
$ |
14,565,656 |
|
63,246,834 |
| Net (loss) / income, net of
taxes |
$ |
(5,387,321 |
) |
$ |
18,264,541 |
$ |
(3,710,568 |
) |
58,697,035 |
| EBITDA (1) |
$ |
2,511,214 |
|
$ |
24,647,802 |
$ |
20,232,425 |
|
76,818,822 |
| Adjusted EBITDA(1) |
$ |
10,874,129 |
|
$ |
24,608,046 |
$ |
33,702,767 |
|
76,779,066 |
| Earnings / (loss) (basic and
diluted) per common share |
$ |
(0.06 |
) |
$ |
0.19 |
$ |
(0.04 |
) |
0.62 |
(1) EBITDA and Adjusted EBITDA are
not recognized measures under U.S. GAAP. Please refer to Appendix B
of this release for the definition and reconciliation of these
measures to Net income / (loss), the most directly comparable
financial measure calculated and presented in accordance with U.S.
GAAP.
Consolidated Fleet Selected Financial
and Operational Data:
Set forth below are selected financial and
operational data of our dry bulk and containership fleets
(continuing operations) for each of the three and nine months ended
September 30, 2023, and 2022, respectively, that we believe are
useful in analyzing trends in our results of operations.
| |
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
(Expressed in U.S. dollars except for operational
data) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Ownership Days (1)(7) |
|
1,859 |
|
|
1,840 |
|
|
|
5,767 |
|
|
5,456 |
|
| Available Days (2)(7) |
|
1,859 |
|
|
1,769 |
|
|
|
5,743 |
|
|
5,351 |
|
| Operating Days (3)(7) |
|
1,848 |
|
|
1,766 |
|
|
|
5,717 |
|
|
5,304 |
|
| Daily TCE Rate (4) |
$ |
10,830 |
|
$ |
21,836 |
|
|
$ |
11,698 |
|
$ |
21,823 |
|
| Fleet Utilization (5) |
|
99% |
|
|
100% |
|
|
|
100% |
|
|
99% |
|
| Daily vessel operating
expenses (6) |
$ |
5,455 |
|
$ |
5,455 |
|
|
$ |
5,517 |
|
$ |
5,673 |
|
|
(1) |
Ownership Days are the total number of calendar days in a period
during which we owned a vessel. |
|
(2) |
Available Days are the Ownership Days in a period less the
aggregate number of days our vessels are off-hire due to scheduled
repairs, dry-dockings or special or intermediate surveys. |
|
(3) |
Operating Days are the Available Days in a period after subtracting
unscheduled off-hire and idle days. |
|
(4) |
Daily TCE Rate is not a recognized measure under U.S. GAAP. Please
refer to Appendix B for the definition and reconciliation of this
measure to Total vessel revenues, the most directly comparable
financial measure calculated and presented in accordance with U.S.
GAAP. |
|
(5) |
Fleet Utilization is calculated by dividing the Operating Days
during a period by the number of Available Days during that
period. |
|
(6) |
Daily vessel operating expenses are calculated by dividing vessel
operating expenses for the relevant period by the Ownership Days
for such period. |
|
(7) |
Our definitions of Ownership Days, Available Days, Operating Days,
Fleet Utilization may not be comparable to those reported by other
companies. |
APPENDIX A
CASTOR MARITIME INC.
Unaudited Interim Condensed Consolidated
Statements of Comprehensive Income
(Expressed in U.S. Dollars—except for number of share
data)
| (In U.S. dollars except for
number of share data) |
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| REVENUES |
|
|
|
|
|
|
|
|
|
| Total vessel revenues |
$ |
21,404,903 |
|
$ |
39,390,681 |
|
|
$ |
71,151,984 |
|
$ |
118,920,093 |
|
| EXPENSES |
|
|
|
|
|
|
|
|
|
| Voyage expenses (including
commissions to related party) |
|
(1,271,893 |
) |
|
(763,155 |
) |
|
|
(3,970,433 |
) |
|
(2,147,721 |
) |
| Vessel operating expenses |
|
(10,141,478 |
) |
|
(10,036,507 |
) |
|
|
(31,818,005 |
) |
|
(30,950,947 |
) |
|
Management fees - related parties |
|
(1,832,974 |
) |
|
(1,702,000 |
) |
|
|
(5,448,799 |
) |
|
(4,779,000 |
) |
|
Depreciation and amortization |
|
(5,923,845 |
) |
|
(4,789,093 |
) |
|
|
(17,225,392 |
) |
|
(13,391,867 |
) |
| General and administrative
expenses (including related party fees) |
|
(1,597,077 |
) |
|
(2,342,422 |
) |
|
|
(4,402,153 |
) |
|
(4,403,724 |
) |
| Gain on sale of vessel |
|
3,149,886 |
|
|
— |
|
|
|
6,278,454 |
|
|
— |
|
|
Operating income |
$ |
3,787,522 |
|
$ |
19,757,504 |
|
|
$ |
14,565,656 |
|
$ |
63,246,834 |
|
| Interest and finance costs,
net (including related party interest costs) (1) |
|
(1,940,963 |
) |
|
(1,518,256 |
) |
|
|
(6,618,695 |
) |
|
(4,477,446 |
) |
| Other income / (expenses),
net |
|
(7,200,153 |
) |
|
101,205 |
|
|
|
(11,558,623 |
) |
|
180,121 |
|
| Income taxes |
|
(33,727 |
) |
|
(75,912 |
) |
|
|
(98,906 |
) |
|
(252,474 |
) |
|
Net (loss) / income and comprehensive income / (loss) from
continuing operations, net of taxes |
$ |
(5,387,321 |
) |
$ |
18,264,541 |
|
|
$ |
(3,710,568 |
) |
$ |
58,697,035 |
|
| Net income and
comprehensive income from discontinued
operations, net of taxes |
$ |
— |
|
|
18,884,817 |
|
|
$ |
17,339,332 |
|
$ |
26,182,107 |
|
|
Net (loss) / income and comprehensive income /
(loss) |
$ |
(5,387,321 |
) |
|
37,149,358 |
|
|
$ |
13,628,764 |
|
$ |
84,879,142 |
|
| Dividend on Series D Preferred
Shares |
|
(381,944 |
) |
|
— |
|
|
|
(381,944 |
) |
|
— |
|
| Deemed dividend on Series D
Preferred Shares |
|
(73,023 |
) |
|
— |
|
|
|
(73,023 |
) |
|
— |
|
| Net (loss) / income
attributable to common shareholders |
$ |
(5,842,288 |
) |
|
37,149,358 |
|
|
$ |
13,173,797 |
|
|
84,879,142 |
|
| (Loss) / earnings per
common share, basic and diluted, continuing
operations |
$ |
(0.06 |
) |
$ |
0.19 |
|
|
$ |
(0.04 |
) |
$ |
0.62 |
|
| Earnings per common
share, basic and diluted, discontinued
operations |
$ |
— |
|
$ |
0.20 |
|
|
$ |
0.18 |
|
$ |
0.28 |
|
| (Loss) / earnings per
common share, basic and
diluted, Total |
$ |
(0.06 |
) |
$ |
0.39 |
|
|
$ |
0.14 |
|
$ |
0.90 |
|
| Weighted average number of
common shares outstanding, basic and diluted |
|
96,619,641 |
|
|
94,610,088 |
|
|
|
95,403,071 |
|
|
94,610,088 |
|
(1) Includes interest and finance costs and interest
income, if any.
CASTOR MARITIME INC.Unaudited Condensed
Consolidated Balance
Sheets(Expressed in U.S. Dollars—except for number
of share data)
|
|
|
September 30,2023 |
|
December 31,2022 |
| ASSETS |
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
| Cash and cash equivalents |
$ |
85,810,135 |
$ |
100,593,557 |
| Restricted cash |
|
1,384,566 |
|
1,684,269 |
| Due from related parties |
|
5,348,216 |
|
2,437,354 |
| Assets held for sale |
|
12,785,218 |
|
— |
| Other current assets |
|
65,917,828 |
|
6,762,778 |
| Current assets of discontinued
operations |
|
— |
|
54,763,308 |
|
Total current assets |
|
171,245,963 |
|
166,241,266 |
| |
|
|
|
|
| NON-CURRENT
ASSETS: |
|
|
|
|
| Vessels, net |
|
293,380,517 |
|
343,408,466 |
| Restricted cash |
|
7,805,000 |
|
7,550,000 |
| Due from related parties |
|
5,934,351 |
|
3,514,098 |
| Investment in related
party |
|
117,529,357 |
|
— |
| Other non-currents assets |
|
6,072,363 |
|
9,491,322 |
| Non-Current assets of
discontinued operations |
|
— |
|
102,715,796 |
| Total non-current
assets |
|
430,721,588 |
|
466,679,682 |
|
Total assets |
|
601,967,551 |
|
632,920,948 |
| |
|
|
|
|
| LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
| Current portion of long-term
debt, net |
|
18,982,140 |
|
29,170,815 |
| Due to related parties,
current |
|
381,944 |
|
— |
| Other current liabilities |
|
13,011,129 |
|
15,671,903 |
| Current liabilities of
discontinued operations |
|
— |
|
6,519,051 |
|
Total current liabilities |
|
32,375,213 |
|
51,361,769 |
| NON-CURRENT
LIABILITIES: |
|
|
|
|
| Long-term debt, net |
|
82,276,763 |
|
109,600,947 |
| Non-Current liabilities of
discontinued operations |
|
— |
|
10,463,172 |
| Total non-current
liabilities |
|
82,276,763 |
|
120,064,119 |
|
Total liabilities |
|
114,651,976 |
|
171,425,888 |
| |
|
|
|
|
| MEZZANINE
EQUITY |
|
|
|
|
| 5.00%
Series D fixed rate cumulative perpetual convertible preferred
shares: 0 and 50,000 shares issued and outstanding as of December
31, 2022, and September 30, 2023, respectively, aggregate
liquidation preference of $0 and $50,000,000 as of December 31,
2022 and September 30, 2023, respectively |
|
49,426,216 |
|
— |
|
Total mezzanine equity |
|
49,426,216 |
|
— |
| |
|
|
|
|
| SHAREHOLDERS’
EQUITY |
|
|
|
|
| Common shares, $0.001 par
value; 1,950,000,000 shares authorized; 94,610,088 and 96,623,876
issued and outstanding as of December 31, 2022, and September 30,
2023, respectively |
|
96,624 |
|
94,610 |
| Series B Preferred Shares-
12,000 shares issued and outstanding as of September 30, 2023, and
December 31, 2022 |
|
12 |
|
12 |
| Additional paid-in
capital |
|
266,876,641 |
|
303,658,153 |
| Retained Earnings |
|
170,916,082 |
|
157,742,285 |
|
Total shareholders’ equity |
|
437,889,359 |
|
461,495,060 |
|
Total liabilities, mezzanine equity and shareholders’
equity |
$ |
601,967,551 |
$ |
632,920,948 |
CASTOR MARITIME
INC.Unaudited Interim Condensed Consolidated
Statements of Cash Flows
| (Expressed in U.S.
Dollars) |
Nine months EndedSeptember 30, |
|
|
|
2023 |
|
|
2022 |
|
| Cash Flows provided by
Operating Activities of continuing
operations: |
|
|
|
|
| Net income |
$ |
13,628,764 |
|
$ |
84,879,142 |
|
| Less:
Net income from discontinued operations, net of taxes |
|
17,339,332 |
|
|
26,182,107 |
|
| Net
(loss) / income from continuing operations, net of taxes |
|
(3,710,568 |
) |
|
58,697,035 |
|
| Adjustments to
reconcile net (loss) / income from continuing operations to net
cash provided by Operating Activities: |
|
|
|
|
| Depreciation and
amortization |
|
17,225,392 |
|
|
13,391,867 |
|
| Amortization of deferred
finance charges |
|
672,441 |
|
|
551,652 |
|
| Amortization of fair value of
acquired time charters |
|
1,835,735 |
|
|
— |
|
| Gain on sale of vessel |
|
(6,278,454 |
) |
|
— |
|
| Realized gain on sale of
equity securities |
|
(2,636 |
) |
|
— |
|
| Unrealized losses / (gains) on
equity securities |
|
13,470,342 |
|
|
(39,756 |
) |
| Changes in operating
assets and liabilities: |
|
|
|
|
| Accounts receivable trade,
net |
|
234,631 |
|
|
2,889,646 |
|
| Inventories |
|
447,541 |
|
|
(2,315,432 |
) |
| Due from/to related
parties |
|
(5,638,336 |
) |
|
(9,699,137 |
) |
| Prepaid expenses and other
assets |
|
(958,289 |
) |
|
407,082 |
|
| Other deferred charges |
|
(42,490 |
) |
|
148,572 |
|
| Accounts payable |
|
(1,987,440 |
) |
|
1,200,507 |
|
| Accrued liabilities |
|
(1,603,572 |
) |
|
974,565 |
|
| Deferred revenue |
|
(712,255 |
) |
|
(1,325,603 |
) |
| Dry-dock costs paid |
|
(1,781,351 |
) |
|
(1,528,701 |
) |
| Net Cash provided by
Operating Activities from continuing operations |
|
11,170,691 |
|
|
63,352,297 |
|
| |
|
|
|
|
| Cash flow used in
Investing Activities of continuing operations: |
|
|
|
|
| Vessel acquisitions and other
vessel improvements |
|
(204,763 |
) |
|
(22,895,661 |
) |
| Purchase of equity
securities |
|
(72,211,450 |
) |
|
(60,750 |
) |
| Proceeds from sale of equity
securities |
|
258,999 |
|
|
— |
|
| Advance received for sale of
vessel |
|
3,150,000 |
|
|
— |
|
| Net proceeds from sale of
vessel |
|
28,031,102 |
|
|
— |
|
| Net cash used in
Investing Activities from continuing operations |
|
(40,976,112 |
) |
|
(22,956,411 |
) |
| |
|
|
|
|
| Cash flows provided by
Financing Activities of continuing operations: |
|
|
|
|
| Gross proceeds from Issuance
of common shares |
|
881,827 |
|
|
— |
|
| Common shares issuance
expenses |
|
(241,893 |
) |
|
(65,797 |
) |
| Proceeds from Series D
Preferred Shares, net of costs |
|
49,853,193 |
|
|
— |
|
| Proceeds from long-term
debt |
|
— |
|
|
55,000,000 |
|
| Repayment of long-term
debt |
|
(38,185,300 |
) |
|
(17,298,499 |
) |
| Payment of deferred financing
costs |
|
(25,178 |
) |
|
(704,559 |
) |
| Proceeds received from Toro
related to Spin-Off |
|
2,694,647 |
|
|
— |
|
| Net cash provided by
Financing Activities from continuing operations |
|
14,977,296 |
|
|
36,931,145 |
|
| |
|
|
|
|
|
Cash flows of discontinued operations: |
|
|
|
|
| Net cash
provided by Operating Activities from discontinued operations |
|
20,409,041 |
|
|
13,917,491 |
|
| Net cash
(used in) / provided by Investing Activities from discontinued
operations |
|
(153,861 |
) |
|
11,857,255 |
|
| Net cash
used in Financing Activities from discontinued operations |
|
(62,734,774 |
) |
|
(2,375,000 |
) |
|
Net cash (used in) / provided by discontinued
operations |
|
(42,479,594 |
) |
|
23,399,746 |
|
| |
|
|
|
|
| Net
(decrease)/increase in cash, cash equivalents, and restricted
cash |
|
(57,307,719 |
) |
|
100,726,777 |
|
| Cash, cash equivalents
and restricted cash at the beginning of the period |
|
152,307,420 |
|
|
43,386,468 |
|
| Cash, cash equivalents
and restricted cash at the end of the period |
$ |
94,999,701 |
|
$ |
144,113,245 |
|
APPENDIX B
Non-GAAP Financial
Information
Daily Time Charter (“TCE”)
Rate. The Daily Time Charter Equivalent Rate (“Daily TCE
Rate”) is a measure of the average daily revenue performance of a
vessel. The Daily TCE Rate is not a measure of financial
performance under U.S. GAAP (non-GAAP measure) and should not be
considered as an alternative to any measure of financial
performance presented in accordance with U.S. GAAP. We calculate
Daily TCE Rate by dividing total revenues (time charter and/or
voyage charter revenues, and/or pool revenues, net of charterers’
commissions), less voyage expenses, by the number of Available Days
during that period. Under a time charter, the charterer pays
substantially all the vessel voyage related expenses. However, we
may incur voyage related expenses when positioning or repositioning
vessels before or after the period of a time or other charter,
during periods of commercial waiting time or while off-hire during
dry-docking or due to other unforeseen circumstances. Under voyage
charters, the majority of voyage expenses are generally borne by us
whereas for vessels in a pool, such expenses are borne by the pool
operator. The Daily TCE Rate is a standard shipping industry
performance measure used primarily to compare period-to-period
changes in a company’s performance and, management believes that
the Daily TCE Rate provides meaningful information to our investors
since it compares daily net earnings generated by our vessels
irrespective of the mix of charter types (i.e., time charter,
voyage charter, or other) under which our vessels are employed
between the periods while it further assists our management in
making decisions regarding the deployment and use of our vessels
and in evaluating our financial performance. Our calculation of the
Daily TCE Rates may be different from and may not be comparable to
that reported by other companies.
The following table reconciles the calculation
of the Daily TCE Rate for our dry bulk and containership fleet
(continuing operations) to Total vessel revenues (from continuing
operations) for the periods presented (amounts in U.S. dollars,
except for Available Days):
| |
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
(In U.S. dollars, except for Available Days) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Total vessel revenues |
$ |
21,404,903 |
|
$ |
39,390,681 |
|
|
$ |
71,151,984 |
|
$ |
118,920,093 |
|
| Voyage expenses - including
commissions to related party |
|
(1,271,893 |
) |
|
(763,155 |
) |
|
|
(3,970,433 |
) |
|
(2,147,721 |
) |
|
TCE revenues |
$ |
20,133,010 |
|
$ |
38,627,526 |
|
|
$ |
67,181,551 |
|
$ |
116,772,372 |
|
|
Available Days |
|
1,859 |
|
|
1,769 |
|
|
|
5,743 |
|
|
5,351 |
|
|
Daily TCE Rate |
$ |
10,830 |
|
$ |
21,836 |
|
|
$ |
11,698 |
|
$ |
21,823 |
|
EBITDA. EBITDA and Adjusted
EBITDA are not measures of financial performance under U.S. GAAP,
do not represent and should not be considered as an alternative to
net income, operating income, cash flow from operating activities
or any other measure of financial performance presented in
accordance with U.S. GAAP. We define EBITDA as earnings before
interest and finance costs (if any), net of interest income, taxes
(when incurred), depreciation and amortization of deferred
dry-docking costs. Adjusted EBITDA represents EBITDA adjusted to
exclude unrealized gain/loss on equity securities, which the
Company believes are not indicative of the ongoing performance of
its core operations. EBITDA and Adjusted EBITDA are used as
supplemental financial measure by management and external users of
financial statements to assess our operating performance. We
believe that EBITDA and Adjusted EBITDA assists our management by
providing useful information that increases the comparability of
our operating performance from period to period and against the
operating performance of other companies in our industry that
provide EBITDA information. This increased comparability is
achieved by excluding the potentially disparate effects between
periods or companies of interest, other financial items,
depreciation and amortization and taxes for EBITDA, and further
excluding unrealized gains/ loss on securities for Adjusted EBITDA,
which items are affected by various and possibly changing financing
methods, capital structure and historical cost basis and which
items may significantly affect net income between periods. We
believe that including EBITDA and Adjusted EBITDA as measures of
operating performance benefits investors in (a) selecting between
investing in us and other investment alternatives and (b)
monitoring our ongoing financial and operational strength. Our
basis of computing EBITDA and Adjusted EBITDA as presented below
may be different from and may not be comparable to similarly titled
measures of other companies.
The following table reconciles EBITDA and
Adjusted EBITDA to Net income / (loss) from continuing operations,
the most directly comparable U.S. GAAP financial measure, for the
periods presented:
| |
|
Three Months EndedSeptember 30, |
|
|
Nine Months EndedSeptember 30, |
|
(In U.S. dollars) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Net Income / (loss)
from continuing operations, net of taxes |
$ |
(5,387,321 |
) |
$ |
18,264,541 |
|
|
$ |
(3,710,568 |
) |
$ |
58,697,035 |
|
| Depreciation and
amortization |
|
5,923,845 |
|
|
4,789,093 |
|
|
|
17,225,392 |
|
|
13,391,867 |
|
| Interest and finance costs,
net (including related party interest costs) (1) |
|
1,940,963 |
|
|
1,518,256 |
|
|
|
6,618,695 |
|
|
4,477,446 |
|
| US source income taxes |
|
33,727 |
|
|
75,912 |
|
|
|
98,906 |
|
|
252,474 |
|
|
EBITDA |
$ |
2,511,214 |
|
$ |
24,647,802 |
|
|
$ |
20,232,425 |
|
$ |
76,818,822 |
|
|
Unrealized loss/ (gain) on equity securities |
|
8,362,915 |
|
|
(39,756 |
) |
|
|
13,470,342 |
|
|
(39,756 |
) |
|
Adjusted EBITDA |
$ |
10,874,129 |
|
$ |
24,608,046 |
|
|
$ |
33,702,767 |
|
$ |
76,779,066 |
|
(1) Includes interest and finance costs and
interest income, if any.
Cautionary Statement Regarding Forward-Looking
Statements
Matters discussed in this press release may
constitute forward-looking statements. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”)
and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements 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. We are including
this cautionary statement in connection with this safe harbor
legislation. The words “believe”, “anticipate”, “intend”,
“estimate”, “forecast”, “project”, “plan”, “potential”, “will”,
“may”, “should”, “expect”, “pending” and similar expressions
identify forward-looking statements. The forward-looking statements
in this press release are based upon various assumptions, many of
which are based, in turn, upon further assumptions, including
without limitation, our management’s examination of current or
historical operating trends, data contained in our records and
other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or
accomplish these forward-looking statements, including these
expectations, beliefs or projections. We undertake no obligation to
update any forward-looking statement, whether as a result of new
information, future events or otherwise. In addition to these
important factors, other important factors that, in our view, could
cause actual results to differ materially from those discussed in
the forward‐looking statements include the effects of the spin-off
of our tanker business, our business strategy, shipping markets
conditions and trends, the rapid growth of our fleet, increased
transactions costs and other adverse effects (such as lost profit)
due to any failure to consummate any sale of our vessels, our
relationships with our current and future service providers and
customers, our ability to borrow under existing or future debt
agreements or to refinance our debt on favorable terms and our
ability to comply with the covenants contained therein, our
continued ability to enter into time or voyage charters with
existing and new customers and to re-charter our vessels upon the
expiry of the existing charters, changes in our operating and
capitalized expenses, our ability to fund future capital
expenditures and investments in the acquisition and refurbishment
of our vessels, instances of off-hire, future sales of our
securities in the public market and our ability to maintain
compliance with applicable listing standards, volatility in our
share price, potential conflicts of interest involving members of
our board of directors, senior management and certain of our
service providers that are related parties, general domestic and
international political conditions or events (including armed
conflicts such as the war in Ukraine and the Israel-Hamas conflict,
“trade wars”, global public health threats and major outbreaks of
disease), changes in seaborne and other transportation, changes in
governmental rules and regulations or actions taken by regulatory
authorities, and the impact of adverse weather and natural
disasters. The information set forth herein speaks only as of the
date hereof, and we disclaim any intention or obligation to update
any forward looking statements as a result of developments
occurring after the date of this communication, except to the
extent required by applicable law. New factors emerge from time to
time, and it is not possible for us to predict all or any of these
factors. Further, we cannot assess the impact of each such factor
on our business or the extent to which any factor, or combination
of factors, may cause actual results to be materially different
from those contained in any forward-looking statement. Please see
our filings with the Securities and Exchange Commission for a more
complete discussion of these foregoing and other risks and
uncertainties. These factors and the other risk factors described
in this press release are not necessarily all of the important
factors that could cause actual results or developments to differ
materially from those expressed in any of our forward-looking
statements. Given these uncertainties, prospective investors are
cautioned not to place undue reliance on such forward-looking
statements.
CONTACT DETAILS For further
information please contact:
Petros PanagiotidisChief Executive Officer &
Chief Financial Officer Castor Maritime Inc. Email:
ir@castormaritime.com
Media Contact: Kevin Karlis Capital LinkEmail:
castormaritime@capitallink.com
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