DryShips Inc. Reports Financial and Operating Results for the First Quarter of 2019

Date : 05/15/2019 @ 9:05PM
Source : GlobeNewswire Inc.
Stock : Dryships Inc. (DRYS)
Quote : 3.71  -0.03 (-0.80%) @ 7:26PM

DryShips Inc. Reports Financial and Operating Results for the First Quarter of 2019

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DryShips Inc. (NASDAQ:DRYS) (“DryShips” or the “Company”), a diversified owner and operator of ocean going cargo vessels, today announced its unaudited financial and operating results for the quarter ended March 31, 2019.

First Quarter 2019 Financial Highlights

  • For the first quarter of 2019, the Company reported net income of $1.5 million, or 1.67 cents basic and diluted earnings per share.Included in the first quarter of 2019 results are:-- Vessel dry-docking costs of $0.7 million, or 0.78 cents per shareExcluding the above, the Company’s net results would have amounted to a net income of $2.2 million, or 2.45 cents per share.
  • The Company reported Adjusted EBITDA of $13.1 million for the first quarter of 2019.(1)

Other Developments

  • Common Stock Repurchase Program

As of May 15, 2019, the Company has not repurchased any additional shares of its common stock since its last update. Under the previously announced new stock repurchase program, the Company may repurchase up to $12.8 million of its outstanding common shares by October 29, 2019.

  • Future Proofing of the Company’s Fleet

During 2019, the Company has scheduled and started implementing an overall “future proofing plan” for its fleet by performing dry-dockings, installation of scrubbers and installation of ballast water systems. As a result, the Company expects during the period from 2019 to 2020 to incur approximately between 1,100-1,300 off-hire days for a total estimated cost of approximately $80.0 million-$100.0 million.    

  • 2019 Annual General Meeting of Shareholders

On May 15, 2019, the Company’s Board of Directors resolved that the Company’s 2019 Annual General Meeting of Shareholders (the “Annual Meeting”) be held at the offices of DryShips Management Services Inc. located at 109 Kifisias Avenue & Sina Street, GR 151 24, Marousi, Athens, Greece on Monday, July 22, 2019 at 4:00 p.m., local time. The Company’s Board of Directors fixed the close of business on Monday, June 10, 2019, as the record date for the determination of the shareholders entitled to receive notice and to vote at the Annual Meeting or any adjournments or postponements thereof. Formal notice of the Annual Meeting and the Company’s proxy statement are expected to be sent to shareholders on or before Monday, July 1, 2019.

_____________(1) Adjusted EBITDA is a non-U.S. GAAP measure; please see later in this press release for reconciliation to net income.

Fleet List

The table below describes the Company’s fleet as of May 15, 2019:

 Year Gross rateRedelivery
 BuiltDWTPer dayEarliestLatest
Drybulk fleet     
      
Newcastlemax:     
Bacon2013205,170T/C Index LinkedSep-19Oct-19
Conquistador*2016209,090T/C Index LinkedN/AN/A
Huahine2013206,037T/C Index LinkedSep-19Oct-19
Judd2015205,796T/C Index LinkedSep-19Oct-19
Marini*2014205,854T/C Index LinkedOct-19Dec-19
Morandi2013205,854T/C Index LinkedAug-19Sep-19
Pink Sands*2016208,931T/C Index LinkedN/AN/A
Xanadu*2017208,827T/C Index LinkedN/AN/A
      
Kamsarmax:      
Castellani201482,129SpotN/AN/A
Kelly201781,300SpotN/AN/A
Matisse201481,128SpotN/AN/A
Nasaka201481,918SpotN/AN/A
Valadon201481,198SpotN/AN/A
      
Panamax:     
Catalina200574,432SpotN/AN/A
Levanto200173,925SpotN/AN/A
Ligari200475,583SpotN/AN/A
Majorca200574,477SpotN/AN/A
Rapallo200975,123SpotN/AN/A
Raraka201276,037SpotN/AN/A
    
Tanker fleet     
      
Very Large Crude Carrier:     
Shiraga2011320,105SpotN/AN/A
      
Suezmax:     
Marfa2017159,513SpotN/AN/A
Samsara**2017159,855$18,000 Base rate plus profit shareMar.-22May-25
      
Aframax:      
Balla2017113,293SpotN/AN/A
Botafogo2010106,892SpotN/AN/A
Stamos2012115,666SpotN/AN/A
      
      
Offshore Supply fleet     
      
Platform Supply Vessels:     
Crescendo20121,457Laid upN/AN/A
Colorado20121,430Laid upN/AN/A
Oil Spill Recovery Vessels:     
Indigo20131,401Laid upN/AN/A
Jacaranda20121,360Laid upN/AN/A
Emblem20121,363Laid upN/AN/A
Jubilee20121,317Laid upN/AN/A
      

* The vessel is time chartered by TMS Dry Ltd., an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

** The vessel is time chartered by Cecilia Shipholdings Limited, an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) (U.S. Dollars in thousands, except average daily results)

DrybulkThree Months Ended March 31,
 2018 2019
Average number of vessels(1)21.0 19.0
Total voyage days for vessels(2)1,890 1,709
Total calendar days for vessels(3)1,890 1,710
Fleet utilization(4)100.0% 99.9%
Time charter equivalent(5)$11,315 $9,994
Vessel operating expenses (daily)(6)$6,134 $5,595

               

TankerThree Months Ended  March 31,
 2018 2019
Average number of vessels(1)4.0 6.0
Total voyage days for vessels(2)360 540
Total calendar days for vessels(3)360 540
Fleet utilization(4)100.0% 100.0%
Time charter equivalent(5)$19,717 $28,694
Vessel operating expenses (daily)(6)$7,861 $6,874

Gas CarrierThree Months Ended  March 31,
 2018 2019
Average number of vessels(1)3.9 -
Total voyage days for vessels(2)350 -
Total calendar days for vessels(3)350 -
Fleet utilization(4)100.0% -
Time charter equivalent(5)$28,243 -
Vessel operating expenses (daily)(6)$9,737 -

(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company’s fleet during the period divided by the number of calendar days in that period.

(2) Total voyage days for vessels are the total days the vessels were in the Company’s possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(3) Total calendar days are the total number of days the vessels were in the Company’s possession for the relevant period including off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(4) Fleet utilization is the percentage of time that the Company’s vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. The Company’s method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from the Company’s vessels, the most directly comparable U.S. GAAP measure, because it assists the Company’s management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.

(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs including dry-docking costs, is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) - continued (In thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. Dollars, and voyage days)

Drybulk Three Months Ended March 31,
  2018  2019
Voyage revenues$23,276 $19,211
Voyage expenses (1,891)  (2,131)
Time charter equivalent revenues$21,385 $17,080
Total voyage days for fleet 1,890  1,709
Time charter equivalent (TCE)$11,315 $9,994

Tanker Three Months Ended March 31,
  2018  2019
Voyage revenues$11,157 $23,869
Voyage expenses (4,059)  (8,374)
Time charter equivalent revenues$7,098 $15,495
Total voyage days for fleet 360  540
Time charter equivalent (TCE)$19,717 $28,694

Gas Carrier Three Months Ended March 31,
  2018  2019
Voyage revenues$10,293 $-
Voyage expenses (408)  -
Time charter equivalent revenues$9,885 $-
Total voyage days for fleet 350  -
Time charter equivalent (TCE)$28,243 $-
      
      

DryShips Inc.
 
Financial Statements
Unaudited Condensed Consolidated Statements of Operations
 
(Expressed in Thousands of U.S. Dollars except for share and per share data) Three Months Ended March 31,
  2018  2019 
     
REVENUES:    
Voyage revenues$44,726 $43,080 
  44,726  43,080 
     
EXPENSES:    
Voyage expenses 6,358  10,505 
Vessel operating expenses 18,100  13,403 
Depreciation 6,818  7,337 
General and administrative expenses 7,169  6,820 
Other, net (18) 125 
     
Operating income 6,299  4,890 
     
OTHER EXPENSES:    
Interest and finance costs, net of interest income (4,890) (3,668)
Other, net (183) 229 
Total other expenses, net (5,073) (3,439)
     
Net income 1,226  1,451 
     
Net income attributable to DryShips Inc. common stockholders 1,226  1,451 
Earnings per common share, basic and diluted$0.01 $0.02 
Weighted average number of shares, basic and diluted 103,682,222  86,899,873 
       
       

DryShips Inc.
 
Unaudited Condensed Consolidated Balance Sheets
  
 (Expressed in Thousands of U.S. Dollars except for share data) December 31, 2018  March 31, 2019
       
ASSETS     
       
  Cash, cash equivalents, including restricted cash (current and non-current)$156,881 $151,139
  Other current and non-current assets  99,092  102,205
  Vessels, net 755,332  747,995
  Total assets 1,011,305  1,001,339
       
       
LIABILITIES AND STOCKHOLDERS’ EQUITY     
       
  Total debt and finance lease liabilities 362,047  354,789
  Total other liabilities 11,529  9,558
  Total stockholders’ equity 637,729  636,992
  Total liabilities and stockholders’ equity$1,011,305 $1,001,339
       
       
SHARE COUNT DATA     
  Common stock issued 104,274,708   104,274,708
  Less: Treasury stock (17,042,680)   (17,388,081)
  Common stock issued and outstanding 87,232,028   86,886,627
        
        

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel sales and impairments and certain other non-cash items as described below. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, and the Company’s calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by the Company’s lenders as a credit metric and the Company believes that it presents useful information to investors regarding a company’s ability to service and/or incur indebtedness.

The following table reconciles net income to Adjusted EBITDA:

(Expressed in Thousands of U.S. Dollars)  Three Months Ended March 31,
   2018  2019
       
Net income $1,226 $1,451
       
Add: Net interest expense  4,890  3,668
Add: Depreciation  6,818  7,337
Add: Dry-dockings  389  675
Add: Income taxes  -  1
Adjusted EBITDA $13,323 $13,132
       

About DryShips Inc.

The Company is a diversified owner and operator of ocean going cargo vessels that operate worldwide. As of May 15, 2019, and not giving effect to any pending vessel transactions, the Company operates a fleet of 31 vessels comprised of (i) 6 Panamax drybulk vessels; (ii) 8 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 3 Aframax tankers; (vi) 2 Suezmax tankers; and (vii) 6 Offshore Support Vessels, including 2 Platform Supply and 4 Oil Spill Recovery Vessels.

DryShips’ common stock is listed on the NASDAQ Capital Market where it trades under the symbol “DRYS.”

Visit the Company’s website at www.dryships.com 

Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.

Forward-looking statements reflect the Company’s 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, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company 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 the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in the Company’s 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 rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company’s inability to procure acquisition financing, default by one or more charterers of the Company’s ships, changes in demand for drybulk, oil or natural gas commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company’s voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company’s relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips with the U.S. Securities and Exchange Commission, including the Company’s most recently filed Annual Report on Form 20-F.

Investor Relations / Media:

Nicolas BornozisCapital Link, Inc. (New York)Tel. 212-661-7566E-mail: dryships@capitallink.com

 

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