Toro Corp. (NASDAQ: TORO), (“Toro”, or the “Company”), an
international energy transportation services company, today
announced its results for the three months and the nine months
ended September 30, 2023.
Highlights of the Third Quarter Ended
September 30, 2023:
- Total vessel revenues:
$10.5 million, as compared to $31.3 million for the three months
ended September 30, 2022, or a 66.5% decrease;
- Net income: $35.1 million,
as compared to $18.2 million for the three months ended September
30, 2022, or a 92.9% increase;
- Earnings (basic) per common
share: $1.89 per share, as compared to $1.92 per share for the
three months ended September 30, 2022;
-
EBITDA(1): $35.4 million,
as compared to $20.6 million for the three months ended September
30, 2022;
- Cash and restricted cash of
$103.5 million as of September 30, 2023, as compared to $42.5
million as of December 31, 2022;
- Delivery of the
M/T Wonder Musica to its new owners on
July 6, 2023, after entering into an agreement to sell the vessel
on June 15, 2023 for $28.0 million, resulting in a net capital gain
of $16.1 million;
- Delivery of the
M/T Wonder Avior to its new owners on July
17, 2023, after entering into an agreement to sell the vessel on
April 28, 2023 for $30.1 million, resulting in a net capital gain
of $17.6 million;
- Acquisition of the
LPG Dream Syrax on July 18, 2023, after
entering into an agreement to purchase the vessel on April 26, 2023
for $17.0 million;
- Acquisition of the
LPG Dream Vermax on August 4, 2023, after
entering into an agreement to purchase the vessel on April 26, 2023
for $17.0 million; and
- On August 7, 2023, the
Company purchased 50,000 5.00% Series D Cumulative Perpetual
Convertible Preferred Shares (“Series D Preferred Shares”) of
Castor Maritime Inc. (“Castor”) with a stated amount of $1,000 each
for total consideration of $50.0 million in cash.
(1) EBITDA is not a recognized measures under
United States generally accepted accounting principles (“U.S.
GAAP”). Please refer to Appendix B for the definition and
reconciliation of this measure to Net income, 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:
$66.5 million, as compared to $73.9 million for the nine months
ended September 30, 2022, or a 10.0% decrease;
- Net income: $112.4 million,
as compared to $24.8 million for the nine months ended September
30, 2022, or a 353.2% increase;
- Earnings (basic) per common
share: $6.78 per share, as compared to $2.63 per share for the nine
months ended September 30, 2022;
-
EBITDA(1): $116.3
million, as compared to $31.7 million for the nine months ended
September 30, 2022;
- On April 17, 2023, the
Company entered into a subscription agreement (the “Subscription
Agreement”) with Pani Corp., a company controlled
by our Chairman and Chief Executive Officer, pursuant to which Toro
issued and sold, and Pani Corp. purchased, 8,500,000 common shares
for gross proceeds of $19,465,000; and
- Our spin-off (the
“Spin-Off”) by Castor Maritime Inc. (“Castor”) was completed on
March 7, 2023 and our shares commenced trading on the Nasdaq
Capital Market on the same date.
(1) EBITDA is not a recognized measure under
United States generally accepted accounting principles (“U.S.
GAAP”). Please refer to Appendix B for the definition and
reconciliation of this measure to Net income, the most directly
comparable financial measure calculated and presented in accordance
with U.S. GAAP.
Management Commentary:
Mr. Petros Panagiotidis, Chief Executive Officer
of the Company commented:
“The tanker market remained robust during the
third quarter, as the supply/demand fundamentals of the crude and
oil product markets remain solid. We continue to renew our fleet by
selling older tonnage, taking advantage of the demand for
secondhand tanker vessels.
In light of the robust balance sheet of Toro and
with the aim of returning value to shareholders, the board of
directors has authorized the repurchase of up to $5.0 million of
our outstanding common shares up to March 31, 2024.
We will continue to seek opportunities to
profitably grow our business.”
Earnings Commentary:
Third Quarter ended September 30, 2023,
and 2022 Results
Total vessel revenues, net of charterer’s
commissions, decreased to $10.5 million in the three months ended
September 30, 2023, from $31.3 million in the same period in 2022.
This decrease is mainly associated with the (i) reduction in the
Available Days of Aframax/LR2 vessels in our fleet to 162 days in
the three months ended September 30, 2023 from 566 days in the same
period in 2022, due to the sale of four of our six Aframax/LR2
vessels and (ii) decrease of the Daily TCE Rate to $13,111 in the
three months ended September 30, 2023 from $31,852 in the same
period in 2022, mainly due to the change of the mix of our fleet
following the addition of the LPG vessels which earn a lower Daily
TCE Rate than Aframax/LR2 vessels due to their size. 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.
Voyage expenses for our fleet decreased by $5.5
million to $1.9 million in the three months ended September 30,
2023, from $7.4 million in the same period of 2022. This decrease
in voyage expenses is mainly associated with the decrease in (i)
the Ownership Days of the Aframax/LR2 vessels in our fleet due to
the decrease of the average number of operating vessels to 7.7
vessels in the three months ended September 30, 2023, from 8.2
vessels in the same period of 2022 and (ii) expenses associated
with our vessels’ commercial employment arrangements as during the
three months ended September 30, 2023, the majority of our tanker
vessels operated under pool agreements pursuant to which our pool
operators bear bunker consumption costs and port expenses,
resulting in a substantial decrease in such expenses as compared to
the three months ended September 30, 2022, where our Aframax/LR2
segment operated predominantly under voyage charters under which we
bore bunker consumption costs and port expenses.
The increase in Vessel operating expenses by
$0.3 million to $5.4 million in the three months ended September
30, 2023, from $5.1 million in the same period in 2022, mainly
reflects the increase in the daily vessel operating expenses of the
vessels in our fleet to $7,589 in the three months ended September
30, 2023, from $6,797 in the same period in 2022, due to the
additional expenses related to the engagement of new third party
managers subcontracted to technically manage a number of our
vessels, partly offset by the decrease in the Ownership Days of our
fleet to 706 days in the three months ended September 30, 2023 from
750 days in the same period in 2022.
Depreciation expenses for our fleet decreased to
$1.4 million in the three months ended September 30, 2023, from
$1.6 million in the same period in 2022 as a result of the decrease
in the Ownership Days of our fleet Dry-dock and special survey
amortization charges amounted to $0.2 million for the three months
ended September 30, 2023, compared to a charge of $0.3 million in
the three months ended September 30, 2022. This variation in
dry-dock amortization charges primarily resulted from (i) the sale
of M/T Wonder Musica, which completed its scheduled dry-dock in the
middle of 2022, on July 7, 2023 and (ii) the classification as held
for sale of M/T Wonder Formosa and M/T Wonder Vega on September 1,
2023 and September 5, 2023, respectively, which completed their
scheduled dry-docks during 2023, partly offset by the increase in
dry-dock amortization days from 184 days in the three months ended
September 30, 2022, to 193 dry-dock amortization days in the three
months ended September 30, 2023.
General and administrative expenses in the three
months ended September 30, 2023, amounted to $1.2 million, whereas,
in the same period of 2022 general and administrative expenses
totaled $0.7 million. This increase is mainly associated with (i)
incurred legal and other corporate fees primarily related to the
growth of our company and (ii) the flat management fee for the
three months ended September 2023 amounting to $0.8 million. For
the three months ended September 30, 2022, and for the period from
January 1 through March 7, 2023 (completion of Spin-Off), General
and administrative expenses reflect the expense allocations made to
the Company by Castor based on the proportion of the number of
Ownership Days of our fleet vessels to the total Ownership Days of
Castor’s full fleet.
The increase in management fees by $0.1 million,
to $0.8 million in the three months ended September 30, 2023, from
$0.7 million in the same period of 2022, mainly reflects the (i)
increased management fees following our entry into the Amended and
Restated Master Management Agreement with effect from July 1, 2022,
as adjusted for inflation with effect from July 1, 2023, and (ii)
entry into new management agreements with Castor Ships S.A. for our
four LPG carriers, which are effective from the date of the
purchase agreements, on April 26, 2023.
Interest and finance costs, net amounted to
$(1.4) million in the three months ended September 30, 2023,
whereas, in the same period of 2022, interest and finance costs,
net amounted to $0.2 million. This variation is mainly due to
higher cash balances compared to the same period of 2022 and the
increase in interest income for the three months ended September
30, 2023 on our available cash, which more than offset an increase
in the weighted average interest rate charged on our long-term debt
from 5.4% in the three months ended September 30, 2022 to 8.4% in
the same period of 2023.
Recent
Financial Developments
Commentary:
Equity update
On October 16, 2023, we paid Castor a dividend
on the Series A Fixed Rate Cumulative Perpetual Convertible
Preferred Shares (the “Series A Preferred Shares”) for the period
from July 15, 2023 to October 14, 2023, amounting to $0.4
million.
On November 6, 2023, the Board of Directors of
the Company approved a share repurchase program, authorizing the
repurchase of up to $5.0 million of the Company’s common
shares commencing November 10, 2023 through March 31, 2024.
Shares may be repurchased in open market and/or privately
negotiated transactions. The timing, manner and total amount
of any share repurchases will be determined by management at its
discretion and will depend upon business, economic and market
conditions, corporate and regulatory requirements, prevailing share
prices, and other considerations. The authorization does not
obligate the Company to acquire any specific amount of common
shares.
As of November 9, 2023, we had 19,201,009 common
shares issued and outstanding.
Liquidity/ Financing/ Cash flow
update
Our consolidated cash position (including our
restricted cash) increased by $61.0 million, from $42.5 million as
of December 31, 2022, to $103.5 million as of September 30, 2023.
During the nine-month period ended September 30, 2023, our cash
position increased mainly as a result of (i) $49.8 million of net
operating cash flows provided, (ii) $3.2 million of net investing
cash flows provided, including $125.4 million of net proceeds from
the sale of M/T Wonder Bellatrix, M/T Wonder Polaris, M/T Wonder
Musica and M/T Wonder Avior, partly offset by $50.0 million paid to
purchase 50,000 Series D Preferred Shares of Castor and payments of
$72.2 million mainly related to the acquisition of LPG Dream
Terrax, LPG Dream Arrax, LPG Dream Syrax and LPG Dream Vermax, and
(iii) $8.0 million of net financing cash flows provided, including
$18.7 million cash inflow from the subscription agreement with Pani
Corp., for the issuance of 8,500,000 common shares, offset by cash
payments of $2.7 million to reimburse Spin-Off expenses incurred by
Castor on our behalf, $7.7 million for scheduled principal
repayments and early prepayment on our debt due to sale of M/T
Wonder Polaris, $0.5 million for the payment of dividends to Toro
on our Series A Preferred Shares for the period from March 7, 2023
to July 14, 2023, and a net inflow for increase in former parent
company investment amounting to $0.2 million.
As of September 30, 2023, our total debt, gross
of unamortized deferred loan fees, was $5.6 million of which $1.3
million is repayable within one year, as compared to $13.3 million
of gross total debt as of December 31, 2022.
Recent
Business Developments
Commentary:
Toro’s investment in Castor through
purchase of 50,000 Series D Preferred Shares
On August 7, 2023, the Company agreed to
purchase 50,000 Series D Preferred Shares of Castor for aggregate
consideration of $50.0 million in cash. Each share has a stated
amount of $1,000. Dividends are payable quarterly, subject to
Castor’s board of directors’ approval, 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
received a dividend from Castor on the Series D Preferred Shares
amounting to $0.5 million.
The Series D Preferred Shares are convertible,
in whole or in part, at our option, to common shares of Castor 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 of Castor. The minimum
conversion price is $0.30 per common share of Castor.
Vessel acquisitions
On April 26, 2023, the Company entered into an
agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier,
the Dream Syrax, from an unaffiliated third party for a purchase
price of $17.0 million. The LPG Dream Syrax was delivered to the
Company on July 18, 2023.
On April 26, 2023, the Company entered into an
agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier,
the Dream Vermax, from an unaffiliated third party for a purchase
price of $17.0 million. The LPG Dream Vermax was delivered to the
Company on August 4, 2023.
Sale of vessels
On April 28, 2023, we entered into an agreement
with an unaffiliated third party for the sale of the M/T Wonder
Avior at a price of $30.1 million. The vessel was delivered to its
new owner on July 17, 2023. In connection with this sale, the
Company recognized during the third quarter of 2023 a net gain of
$17.6 million.
On June 15, 2023, we entered into an agreement
with an unaffiliated third party for the sale of the M/T Wonder
Musica at a price of $28.0 million. The vessel was delivered to its
new owner on July 6, 2023. In connection with this sale, the
Company recognized during the third quarter of 2023 a net gain of
$16.1 million.
On September 1, 2023, we entered into an
agreement with an unaffiliated third party for the sale of the M/T
Wonder Formosa at a price of $18.0 million. The vessel is expected
to be delivered to its new owner in the fourth quarter of 2023. We
expect to record during the fourth quarter of 2023 a net gain on
the sale of the M/T Wonder Formosa of approximately $9.0 million,
excluding any transaction related costs.
On September 5, 2023, we entered into an
agreement with an unaffiliated third party for the sale of the M/T
Wonder Vega at a price of $31.5 million. The vessel is expected to
be delivered to its new owner in the fourth quarter of 2023. We
expect to record during the fourth quarter of 2023 a net gain on
the sale of the M/T Wonder Vega of approximately $17.7 million,
excluding any transaction related costs.
Fleet Employment Status (as of November
8, 2023) During the three months ended September 30, 2023,
we operated on average 7.7 vessels earning a Daily TCE Rate(1) of
$13,111 as compared to an average of 8.2 vessels earning a Daily
TCE Rate(1) of $31,852 during the same period in 2022. Our
employment profile as of November 8, 2023 is presented immediately
below.
(1) 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.
|
Aframax / LR2 Tankers |
|
Vessel Name |
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Wonder Sirius |
Aframax / LR2 |
115,341 |
2005 |
Korea |
TC(1), (2) period |
$40,000 per day |
Nov-23 |
Jun-24 |
|
Wonder Vega(3) |
Aframax |
106,062 |
2005 |
Korea |
Tanker Pool(4) |
N/A |
N/A |
N/A |
|
|
|
Handysize Tankers |
|
Vessel Name |
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Wonder Mimosa |
Handysize |
36,718 |
2006 |
Korea |
Tanker Pool(5) |
N/A |
N/A |
N/A |
|
Wonder Formosa(3) |
Handysize |
36,660 |
2006 |
Korea |
Tanker Pool(5) |
N/A |
N/A |
N/A |
|
LPG Carriers |
|
|
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Dream Terrax |
LPG carrier 5,000 cbm |
4,743 |
2020 |
Japan |
TC(1) period |
$310,000 per month |
Aug-24 |
Aug-25 |
|
Dream Arrax |
LPG carrier 5,000 cbm |
4,753 |
2015 |
Japan |
Unfixed |
N/A |
N/A |
N/A |
|
Dream Syrax |
LPG carrier 5,000 cbm |
5,158 |
2015 |
Japan |
TC(1) period |
$308,500 per month |
Feb-24 |
Feb-24 |
|
Dream Vermax |
LPG carrier 5,000 cbm |
5,155 |
2015 |
Japan |
TC(1) period |
$314,950 per month |
Mar-24 |
Mar-25 |
|
(1) |
|
TC stands for time charter. |
|
(2) |
|
The vessel is currently on its way to upcoming dry-docking survey
and will be delivered back to the charterers upon the completion of
dry-docking survey. |
|
(3) |
|
The vessels are expected to be delivered to their new owners during
the fourth quarter of 2023 and classified as held for sale. |
|
(4) |
|
The vessel is currently participating in the V8 Plus Pool, a pool
operating Aframax tankers aged 15 years or more that is managed by
V8 Plus Management Pte. Ltd., a company in which our Chairman and
Chief Executive Officer, Petros Panagiotidis has a minority equity
interest. |
|
(5) |
|
The vessel is currently participating in an unaffiliated tanker
pool specializing in the employment of Handysize tanker
vessels. |
|
|
|
|
Financial Results Overview:
Set forth below are selected financial and
operational data of our fleet 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) |
|
September30, 2023(unaudited) |
|
|
September30, 2022(unaudited) |
|
|
September30, 2023(unaudited) |
|
|
September30, 2022(unaudited) |
|
Total vessel revenues |
$ |
10,532,107 |
|
|
$ |
31,250,913 |
|
|
$ |
66,544,790 |
|
|
$ |
73,860,480 |
|
| Operating income |
$ |
33,349,820 |
|
|
$ |
18,716,192 |
|
|
$ |
110,460,830 |
|
|
$ |
26,251,903 |
|
| Net income and comprehensive
income |
$ |
35,069,358 |
|
|
$ |
18,187,838 |
|
|
$ |
112,410,345 |
|
|
$ |
24,844,971 |
|
| EBITDA(1) |
$ |
35,402,953 |
|
|
$ |
20,589,976 |
|
|
$ |
116,278,295 |
|
|
$ |
31,686,002 |
|
| Earnings (basic) per common
share |
$ |
1.89 |
|
|
$ |
1.92 |
|
|
$ |
6.78 |
|
|
$ |
2.63 |
|
| Earnings (diluted) per common
share |
$ |
0.79 |
|
|
$ |
0.51 |
|
|
$ |
2.23 |
|
|
$ |
0.57 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBITDA is not recognized measure under U.S.
GAAP. Please refer to Appendix B of this release for the definition
and reconciliation of this measure to Net income, 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 fleet 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 EndedSeptember
30, |
|
|
Nine months EndedSeptember
30, |
|
(Expressed in U.S. dollars except for operational
data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Ownership Days(1)(7) |
|
706 |
|
|
750 |
|
|
2,195 |
|
|
2,379 |
| Available Days(2)(7) |
|
662 |
|
|
750 |
|
|
2,097 |
|
|
2,339 |
| Operating Days(3)(7) |
|
605 |
|
|
748 |
|
|
2,024 |
|
|
2,330 |
| Daily TCE Rate(4) |
$ |
13,111 |
|
$ |
31,852 |
|
$ |
30,258 |
|
$ |
20,448 |
| Fleet Utilization(5) |
|
91% |
|
|
100% |
|
|
97% |
|
|
100% |
| Daily vessel operating
expenses(6) |
$ |
7,589 |
|
$ |
6,797 |
|
$ |
7,539 |
|
$ |
6,686 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
(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
TORO CORP.
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 EndedSeptember
30, |
|
|
Nine months EndedSeptember
30, |
| |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Time charter revenues |
|
2,828,793 |
|
|
|
7,145,589 |
|
|
|
8,348,081 |
|
|
|
11,981,904 |
|
| Voyage charter revenues |
|
2,705,246 |
|
|
|
16,335,273 |
|
|
|
3,094,365 |
|
|
|
45,927,552 |
|
| Pool revenues |
|
4,998,068 |
|
|
|
7,770,051 |
|
|
|
55,102,344 |
|
|
|
15,951,024 |
|
| Total vessel
revenues |
$ |
10,532,107 |
|
|
$ |
31,250,913 |
|
|
$ |
66,544,790 |
|
|
$ |
73,860,480 |
|
| EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
| Voyage expenses (including
commissions to related party) |
|
(1,852,658 |
) |
|
|
(7,362,132 |
) |
|
|
(3,094,774 |
) |
|
|
(26,031,974 |
) |
| Vessel operating expenses |
|
(5,357,818 |
) |
|
|
(5,097,684 |
) |
|
|
(16,548,113 |
) |
|
|
(15,905,448 |
) |
| General and administrative
expenses (including related party fees) |
|
(1,230,759 |
) |
|
|
(696,980 |
) |
|
|
(3,072,345 |
) |
|
|
(1,337,136 |
) |
| Management fees - related
parties |
|
(788,601 |
) |
|
|
(731,250 |
) |
|
|
(2,446,101 |
) |
|
|
(2,115,900 |
) |
| Depreciation and
amortization |
|
(1,673,722 |
) |
|
|
(1,869,306 |
) |
|
|
(5,459,406 |
) |
|
|
(5,440,750 |
) |
| Recovery of provision for
doubtful accounts |
|
— |
|
|
|
— |
|
|
|
266,732 |
|
|
|
— |
|
| Gain on
sale of vessels |
|
33,721,271 |
|
|
|
3,222,631 |
|
|
|
74,270,047 |
|
|
|
3,222,631 |
|
|
Operating income |
$ |
33,349,820 |
|
|
$ |
18,716,192 |
|
|
$ |
110,460,830 |
|
|
$ |
26,251,903 |
|
| Interest and finance costs,
net (including related party interest costs)(1) |
|
1,373,791 |
|
|
|
(215,501 |
) |
|
|
1,915,745 |
|
|
|
(602,474 |
) |
| Other expenses, net |
|
(2,533 |
) |
|
|
4,478 |
|
|
|
(23,885 |
) |
|
|
(6,651 |
) |
| Dividend income from related
party |
|
381,944 |
|
|
|
— |
|
|
|
381,944 |
|
|
|
— |
|
| Income taxes |
|
(33,664 |
) |
|
|
(317,331 |
) |
|
|
(324,289 |
) |
|
|
(797,807 |
) |
|
Net income and comprehensive income, net of
taxes |
$ |
35,069,358 |
|
|
$ |
18,187,838 |
|
|
$ |
112,410,345 |
|
|
$ |
24,844,971 |
|
| Dividend on Series A Preferred
Shares |
|
(357,778 |
) |
|
|
— |
|
|
|
(808,889 |
) |
|
|
— |
|
| Deemed dividend on Series A
Preferred Shares |
|
(745,637 |
) |
|
|
— |
|
|
|
(1,676,671 |
) |
|
|
— |
|
|
Net income attributable to common
shareholders |
$ |
33,965,943 |
|
|
$ |
18,187,838 |
|
|
$ |
109,924,785 |
|
|
$ |
24,844,971 |
|
| Earnings per common
share, basic |
$ |
1.89 |
|
|
$ |
1.92 |
|
|
$ |
6.78 |
|
|
$ |
2.63 |
|
| Earnings per common
share, diluted |
$ |
0.79 |
|
|
$ |
0.51 |
|
|
$ |
2.23 |
|
|
$ |
0.57 |
|
| Weighted average number of
common shares outstanding, basic: |
|
17,961,009 |
|
|
|
9,461,009 |
|
|
|
16,203,797 |
|
|
|
9,461,009 |
|
| Weighted average number of
common shares outstanding, diluted: |
|
44,302,224 |
|
|
|
44,301,161 |
|
|
|
50,452,246 |
|
|
|
43,709,458 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes interest and finance costs and interest
income, if any.
TORO CORP. 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 |
$ |
103,129,350 |
|
|
$ |
41,779,594 |
|
| Due from related parties |
|
4,771,754 |
|
|
|
558,327 |
|
| Assets held for sale |
|
22,976,704 |
|
|
|
— |
|
| Other current assets |
|
7,017,419 |
|
|
|
12,425,386 |
|
|
Total current assets |
|
137,895,227 |
|
|
|
54,763,307 |
|
| |
|
|
|
|
|
|
| NON-CURRENT
ASSETS: |
|
|
|
|
|
|
| Vessels, net |
|
89,890,996 |
|
|
|
92,486,178 |
|
| Restricted cash |
|
350,000 |
|
|
|
700,000 |
|
| Due from related parties |
|
2,044,317 |
|
|
|
1,708,474 |
|
| Investment in related
party |
|
50,381,944 |
|
|
|
— |
|
| Other non-currents assets |
|
623,455 |
|
|
|
7,821,144 |
|
|
Total non-current assets |
|
143,290,712 |
|
|
|
102,715,796 |
|
|
Total assets |
|
281,185,939 |
|
|
|
157,479,103 |
|
| |
|
|
|
|
|
|
| LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
|
|
| Current portion of long-term
debt, net |
|
1,308,103 |
|
|
|
2,606,302 |
|
| Due to related parties |
|
307,222 |
|
|
|
— |
|
| Other current liabilities |
|
7,051,012 |
|
|
|
3,912,749 |
|
|
Total current liabilities |
|
8,666,337 |
|
|
|
6,519,051 |
|
| NON-CURRENT
LIABILITIES: |
|
|
|
|
|
|
| Long-term debt, net |
|
4,231,463 |
|
|
|
10,463,172 |
|
| Total non-current
liabilities |
|
4,231,463 |
|
|
|
10,463,172 |
|
|
Total liabilities |
|
12,897,800 |
|
|
|
16,982,223 |
|
| |
|
|
|
|
|
|
| MEZZANINE
EQUITY: |
|
|
|
|
|
|
| 1.00% Series A fixed rate
cumulative perpetual convertible preferred shares: 0 and 140,000
shares issued and outstanding as of December 31, 2022, and
September 30, 2023, respectively, aggregate liquidation preference
of $0 and $140,000,000 as of December 31, 2022 and September 30,
2023, respectively. |
|
118,848,806 |
|
|
|
— |
|
|
Total mezzanine equity |
|
118,848,806 |
|
|
|
— |
|
| |
|
|
|
|
|
|
| SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
| Former Net Parent Company
investment |
|
— |
|
|
|
140,496,912 |
|
| Common shares, $0.001 par
value; 1,000 and 3,900,000,000 shares authorized; 1,000 and
19,201,009 shares issued; 1,000 and 19,201,009 shares outstanding
as of December 31, 2022, and September 30, 2023 respectively. |
|
19,201 |
|
|
|
1 |
|
| Preferred shares, $0.001 par
value: 0 and 100,000,000 shares authorized; Series B preferred
shares: 0 and 40,000 shares issued and outstanding as of December
31,2022 and September 30, 2023 respectively. |
|
40 |
|
|
|
— |
|
| Additional paid-in
capital |
|
56,834,671 |
|
|
|
— |
|
| Due from stockholder |
|
— |
|
|
|
(1 |
) |
| Retained Earnings/
(Accumulated deficit) |
|
92,585,421 |
|
|
|
(32 |
) |
|
Total shareholders’ equity |
|
149,439,333 |
|
|
|
140,496,880 |
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
$ |
281,185,939 |
|
|
$ |
157,479,103 |
|
| |
|
|
|
|
|
|
|
TORO CORP.Unaudited
Interim Condensed Consolidated Statements of Cash
Flows
| (Expressed in U.S.
Dollars) |
Nine months Ended September 30, |
| |
|
2023 |
|
|
2022 |
| Cash Flows (used
in)/provided by Operating Activities : |
|
|
|
|
|
|
Net income |
$ |
112,410,345 |
|
|
$ |
24,844,971 |
|
| Adjustments to
reconcile net income to net cash (used in)/provided by Operating
activities: |
|
|
|
|
|
| Depreciation and
amortization |
|
5,459,406 |
|
|
|
5,440,750 |
|
| Amortization of deferred
finance charges |
|
126,491 |
|
|
|
92,117 |
|
| Gain on sale of vessels |
|
(74,270,047 |
) |
|
|
(3,222,631 |
) |
| Stock based compensation
cost |
|
40,190 |
|
|
|
— |
|
| Changes in operating
assets and liabilities: |
|
|
|
|
|
| Accounts receivable trade,
net |
|
5,664,047 |
|
|
|
(5,877,838 |
) |
| Inventories |
|
34,562 |
|
|
|
(1,327,892 |
) |
| Due from/to related
parties |
|
(4,931,213 |
) |
|
|
(7,331,215 |
) |
| Prepaid expenses and other
assets |
|
4,392,290 |
|
|
|
(1,247,888 |
) |
| Other deferred charges |
|
(4,657 |
) |
|
|
(171,914 |
) |
| Accounts payable |
|
2,190,358 |
|
|
|
2,915,885 |
|
| Accrued liabilities |
|
808,695 |
|
|
|
1,629,030 |
|
| Deferred revenue |
|
310,000 |
|
|
|
(540,623 |
) |
| Dry-dock costs paid |
|
(2,477,536 |
) |
|
|
(1,068,375 |
) |
| Net Cash provided by
Operating Activities |
|
49,752,931 |
|
|
|
14,134,377 |
|
| |
|
|
|
|
|
| Cash flow (used
in)/provided by Investing Activities: |
|
|
|
|
|
| Vessel acquisitions and other
vessel improvements |
|
(72,149,308 |
) |
|
|
(784,028 |
) |
| Investment in related
party |
|
(50,000,000 |
) |
|
|
— |
|
| Net Proceeds from sale of
vessel |
|
125,389,588 |
|
|
|
12,641,284 |
|
| Net cash provided by
Investing Activities |
|
3,240,280 |
|
|
|
11,857,256 |
|
| |
|
|
|
|
|
| Cash flows (used
in)/provided by Financing Activities: |
|
|
|
|
|
| Net increase/ (decrease) in
Former Parent Company Investment |
|
211,982 |
|
|
|
(216,887 |
) |
| Issuance of Series B preferred
shares |
|
40 |
|
|
|
— |
|
| Issuance of common shares
pursuant to private placement |
|
18,647,236 |
|
|
|
— |
|
| Payment of Dividend on Series
A Preferred Shares |
|
(501,667 |
) |
|
|
— |
|
| Repayment of long-term
debt |
|
(7,656,400 |
) |
|
|
(2,375,000 |
) |
| Payments related to
Spin-Off |
|
(2,694,646 |
) |
|
|
— |
|
| Net cash provided by /
(used in) Financing Activities |
|
8,006,545 |
|
|
|
(2,591,887 |
) |
| |
|
|
|
|
|
| Net increase in cash,
cash equivalents, and restricted cash |
|
60,999,756 |
|
|
|
23,399,746 |
|
| Cash, cash equivalents
and restricted cash at the beginning of the period |
|
42,479,594 |
|
|
|
5,663,411 |
|
| Cash, cash equivalents
and restricted cash at the end of the period |
$ |
103,479,350 |
|
|
$ |
29,063,157 |
|
| |
|
|
|
|
|
|
|
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 (i.e., it is a 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
(e.g., time charter, voyage charter, pools 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 fleet to Total vessel revenues, the
most directly comparable U.S. GAAP financial measure, for the
periods presented (amounts in U.S. dollars, except for Available
Days):
| |
Three Months Ended September 30, |
|
Nine months Ended September 30, |
| (In U.S. dollars, except for
Available Days) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Total vessel revenues |
$ |
10,532,107 |
|
|
$ |
31,250,913 |
|
|
$ |
66,544,790 |
|
|
$ |
73,860,480 |
|
| Voyage expenses -including
commissions from related party |
|
(1,852,658 |
) |
|
|
(7,362,132 |
) |
|
|
(3,094,774 |
) |
|
|
(26,031,974 |
) |
|
TCE revenues |
$ |
8,679,449 |
|
|
$ |
23,888,781 |
|
|
$ |
63,450,016 |
|
|
$ |
47,828,506 |
|
| Available Days |
|
662 |
|
|
|
750 |
|
|
|
2,097 |
|
|
|
2,339 |
|
|
Daily TCE Rate |
$ |
13,111 |
|
|
$ |
31,852 |
|
|
$ |
30,258 |
|
|
$ |
20,448 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA. EBITDA is not a measure
of financial performance under U.S. GAAP, does 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. EBITDA is used as a
supplemental financial measure by management and external users of
financial statements to assess our operating performance. We
believe that 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, 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 as a measure 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. 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
to Net Income, the most directly comparable U.S. GAAP financial
measure, for the periods presented:
Reconciliation of EBITDA to Net
Income
| |
|
Three Months Ended September 30, |
|
|
Nine months Ended September 30, |
| (In U.S. dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net Income |
$ |
35,069,358 |
|
|
$ |
18,187,838 |
|
|
$ |
112,410,345 |
|
|
$ |
24,844,971 |
|
| Depreciation and
amortization |
|
1,673,722 |
|
|
|
1,869,306 |
|
|
|
5,459,406 |
|
|
|
5,440,750 |
|
| Interest and finance costs,
net(1) |
|
(1,373,791 |
) |
|
|
215,501 |
|
|
|
(1,915,745 |
) |
|
|
602,474 |
|
| US source income taxes |
|
33,664 |
|
|
|
317,331 |
|
|
|
324,289 |
|
|
|
797,807 |
|
|
EBITDA |
$ |
35,402,953 |
|
|
$ |
20,589,976 |
|
|
$ |
116,278,295 |
|
|
$ |
31,686,002 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (including the expected deliveries of vessels to or
from us), 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 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. 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 our ability to realize the expected benefits of
vessel acquisitions and the effect of any change in our fleet’s
size, the effects of the Spin-Off, our business strategy, shipping
markets conditions and trends, 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
charters, voyage charters or pool arrangements with existing and
new customers and pool operators 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, the impact of adverse weather and natural disasters,
accidents or the occurrence of other events related to the
operational risks associated with transporting crude oil and/or
refined petroleum products and any other factors described in our
filings with the SEC.
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 SEC 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 PanagiotidisToro Corp.Email:
info@torocorp.com
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