ATHENS, Greece, May 18, 2020 /PRNewswire/ -- Danaos
Corporation ("Danaos") (NYSE: DAC), one of the world's largest
independent owners of containerships, today reported unaudited
results for the quarter ended March 31,
2020.
Highlights for the First Quarter Ended March 31, 2020:
- Adjusted net income1 of $33.3 million, or $1.34 per share, for the three months ended
March 31, 2020 compared to
$38.6 million, or $2.53 per share, for the three months ended
March 31, 2019, a decrease of
13.7%.
- Operating revenues of $106.2
million for the three months ended March 31, 2020 compared to $112.9 million for the three months ended
March 31, 2019, a decrease of
5.9%.
- Adjusted EBITDA1 of $71.9 million for the three months ended
March 31, 2020 compared to
$77.5 million for the three months
ended March 31, 2019, a decrease of
7.2%.
- Total contracted operating revenues were $1.3 billion as of March
31, 2020, with charters extending through 2028 and remaining
average contracted charter duration of 3.8 years, weighted by
aggregate contracted charter hire.
- Charter coverage of 85% for the next 12 months based on
current operating revenues and 66% in terms of contracted operating
days.
Three Months Ended
March 31, 2020
|
Financial Summary
- Unaudited
|
(Expressed
in thousands of United States dollars, except per share
amounts)
|
|
|
Three months
ended
|
|
Three months
ended
|
March
31,
|
March
31,
|
|
2020
|
|
2019
|
|
|
|
|
Operating
revenues
|
$106,196
|
|
$112,891
|
Net income
|
$29,089
|
|
$33,443
|
Adjusted net
income1
|
$33,281
|
|
$38,569
|
Earnings per share,
diluted
|
$1.17
|
|
$2.19
|
Adjusted earnings per
share, diluted1
|
$1.34
|
|
$2.53
|
Diluted weighted
average number of shares (in thousands)
|
24,789
|
|
15,237
|
Adjusted
EBITDA1
|
$71,918
|
|
$77,538
|
|
1 Adjusted net income,
adjusted earnings per share and adjusted EBITDA are non-GAAP
measures. Refer to the
reconciliation of net income to adjusted net income
and net income to adjusted EBITDA.
|
Danaos' CEO Dr. John Coustas
commented:
"Our results for the first quarter of 2020 were not impacted by
the Covid-19 pandemic, except for the increase in off-hire days
related to delays in scrubber installations in Chinese
shipyards. The Company's adjusted net income of $33.3 million for the first quarter of 2020
decreased by $5.3 million when
compared to the first quarter of 2019. Adjusted EBITDA for the
first quarter of 2020 was $71.9
million, $5.6 million lower
when compared to the first quarter of 2019.
"The Covid-19 pandemic has swiftly and dramatically disrupted
the container market and caused a significant drop in container
volumes. There is no doubt that the pandemic will have a very
negative effect on GDP, unemployment and countless other
macroeconomic indicators in the near term. Although countries are
gradually starting to lift restrictions and allow economic activity
to resume, the speed of any potential recovery and the long-term
impact of the pandemic on consumer demand and global manufacturing
supply chains is unclear. There is certainly optimism about the
positive impacts of sweeping fiscal and monetary initiatives being
undertaken globally, but it is too early to assess any such
impacts.
"Liner companies have addressed the drop in volumes brought on
by the pandemic by cancelling sailings and idling capacity. As a
result, short-term charter rates have dropped by between 25% and
40%, depending on vessel size. Despite lower transportation demand,
prudent capacity management, reduced bunker prices and falling
interest rates have significantly alleviated pressure on the cash
flows of our liner company customers. Additionally, we have
recently seen several initiatives by governments in Europe and Asia to support the liner industry during this
difficult period, which is a very encouraging sign.
"What is most important is that we look forward and continue to
execute our strategy and maintain a solid base to withstand the
current market turbulence. To that end, we are successfully
managing charter renewals, albeit at lower charter rates but still
at rates well above operational breakeven levels. Notwithstanding
the pressure in the charter market, we are well insulated from
near-term volatility due to our high charter coverage of 86% in
terms of operating revenues and 66% in terms of operating days over
the next 12 months. This provides significant visibility into our
cash flows during this period. Also, we will not have any
additional financial impact on our operating revenues related to
scrubber installations. Finally, we have ample liquidity and a
$1.3 billion charter backlog, which
provides us with flexibility to both manage our business and react
to growth opportunities that may present themselves. During the
first quarter, we took delivery of Niledutch Lion, an 8,626
TEU containership built in 2008, and in early April, we took
delivery of Phoebe, an 8,463 TEU containership built in
2005. Consistent with our long-standing strategy, both vessels have
been contracted on two-year time charters that will contribute an
incremental $12 million of EBITDA on
an annualized basis.
"The strength of our company and our strong relationships in the
finance community is demonstrated by the financing arrangements
executed in the midst of the pandemic. On May 12, 2020 we concluded a $139.1 million re-financing of the existing sale
& leaseback transaction for two of our 13,100 TEU vessels at a
significantly lower cost compared to the previous financing
arrangement. This will result in approximately $7.5 million of interest cost savings on an
annualized basis. Additionally, lower US$ Libor interest rates,
which are currently lower by 2% when compared to 2019, will further
contribute to reducing cash finance costs. For illustrative
purposes, we will save approximately $28
million on an annualized basis based on $1.4 billion of bank debt outstanding at the end
of the first quarter and current Libor rates. We have further
arranged debt financing for the new vessels through a $24 million credit facility that we entered into
at the beginning of April 2020.
"We remain committed to operational excellence and technological
innovation, which allows us to continually deliver a high quality
service to our customers. Our commitment has enabled us to maintain
our leadership position in the container shipping industry
throughout multiple market cycles. These are the attributes that
will enhance shareholder value far and above the steel value of our
fleet."
Three months ended March 31,
2020 compared to the three months ended March 31, 2019
During the three months ended March 31,
2020, Danaos had an average of 55.7
containerships compared to 55 containerships during the three
months ended March 31, 2019. Our
fleet utilization for the three months ended March 31, 2020 was 91.3% compared to 98.2% for
the three months ended March 31,
2019. Adjusted fleet utilization, excluding the effect of
188 days of incremental off-hire due to shipyard delays related to
the COVID-19 pandemic, was 95% in the three months ended
March 31, 2020.
Our adjusted net income amounted to $33.3
million, or $1.34 per share,
for the three months ended March 31,
2020 compared to $38.6
million, or $2.53 per share,
for the three months ended March 31,
2019. We have adjusted our net income in the three months
ended March 31, 2020 for a non-cash
fees amortization and accrued finance fees charge of $4.2 million. Please refer to the Adjusted Net
Income reconciliation table, which appears later in this earnings
release.
The decrease of $5.3 million in
adjusted net income for the three months ended March 31, 2020 compared to the three months ended
March 31, 2019 is attributable mainly
to a $6.7 million decrease in
operating revenues, of which $3.2
million relates to incremental off-hire due to shipyard
delays related to the COVID-19 pandemic, and a $0.6 million increase in operating
expenses, which were partially offset by a $1.6 million increase in the operating
performance of our equity investment in Gemini Shipholdings
Corporation ("Gemini") and a $0.4
million decrease in net finance expenses.
On a non-adjusted basis, our net income amounted to $29.1 million, or $1.17 earnings per diluted share, for the three
months ended March 31, 2020 compared
to net income of $33.4 million, or
$2.19 earnings per diluted share, for
the three months ended March 31,
2019.
Operating Revenues
Operating revenues decreased by
5.9%, or $6.7 million, to
$106.2 million in the three months
ended March 31, 2020 from
$112.9 million in the three months
ended March 31, 2019.
Operating revenues for the three months ended March 31, 2020 reflect:
- a $6.1 million decrease in
revenues due to lower fleet utilization of our vessels in the three
months ended March 31, 2020 compared
to the three months ended March 31,
2019 mainly due to the scheduled installation of scrubbers
and dry-dockings of our vessels, of which $3.2 million relates to incremental delays in the
Chinese shipyards where these activities were being performed due
to the COVID-19 pandemic.
- a $1.7 million decrease in
revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 as a result of lower re-chartering
rates for certain of our vessels. This decrease is due to a
$4.5 million decrease in revenues due
to the re-chartering of four vessels in our fleet that concluded
long-term charters over the last twelve months and were re-deployed
at the prevailing lower spot rates in the three months ended
March 31, 2020, partially offset by a
$2.8 million improvement from the
re-chartering of other vessels in the fleet.
- a $5.1 million increase in
revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 as a result of contractual
increases in charter rates of vessels under long-term
charters.
- a $4.9 million decrease in
revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 due to lower non-cash revenue
recognition in accordance with US GAAP.
- a $0.9 million increase in
revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 due to the acquisition of a new
vessel.
Vessel Operating Expenses
Vessel operating expenses
increased by $0.1 million to
$26.0 million in the three
months ended March 31, 2020 from
$25.9 million in the three
months ended March 31, 2019,
primarily as a result of the increase in the average number of
vessels in our fleet, partially offset by an overall decrease in
the average daily operating cost of $5,522 per vessel per day for vessels on time
charter for the three months ended March 31,
2020 compared to $5,636 per
day for the three months ended March 31,
2019. Management believes that our daily operating cost are
among the most competitive in the industry.
Depreciation & Amortization
Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased by 3.4%,
or $0.8 million, to $24.6 million in the three months ended
March 31, 2020 from $23.8 million in the three months ended
March 31, 2019 mainly due to the
installation of scrubbers on four of our vessels and the
acquisition of the vessel Niledutch Lion in the three months
ended March 31, 2020.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs increased by $0.1
million to $2.3 million in the
three months ended March 31, 2020
from $2.2 million in the three months
ended March 31, 2019.
General and Administrative Expenses
General and
administrative expenses decreased by $1.1
million to $5.8 million in the
three months ended March 31, 2020,
from $6.9 million in the three months
ended March 31, 2019. The decrease
was mainly due to decreased share based compensation and
professional fees.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
$0.7 million to $4.0 million in the three months ended
March 31, 2020 from $3.3 million in the three months ended
March 31, 2019 mainly due to
increased bunkering expenses.
Interest Expense and Interest Income
Interest expense
decreased by 8.4%, or $1.5 million,
to $16.3 million in the three
months ended March 31, 2020 from
$17.8 million in the three months
ended March 31, 2019. The decrease in
interest expense is attributable to:
(i) a $0.6 million decrease in
interest expense due to a $112.1
million decrease in our average debt (including leaseback
obligations), to $1,544.2 million in
the three months ended March 31,
2020, compared to $1,656.3
million in the three months ended March 31, 2019; and
(ii) a $0.9 million decrease in
the amortization of deferred finance costs and debt discount
related to our 2018 debt refinancing.
As of March 31, 2020, our bank
debt outstanding, gross of deferred finance costs, was $1,396.3 million and our leaseback obligation was
$134.3 million compared to bank debt
of $1,641.7 million as of
March 31, 2019.
Interest income increased by $0.1
million to $1.7 million in the
three months ended March 31, 2020
compared to $1.6 million in the three
months ended March 31, 2019.
Other finance costs, net
Other finance costs, net
increased by $0.3 million to
$0.6 million in the three months
ended March 31, 2020 compared to
$0.3 million in the three months
ended March 31, 2019.
Equity income/(loss) on investments
Equity
income/(loss) on investments increased by $1.6 million to $1.5
million of income on investments in the three months ended
March 31, 2020 compared to a
$0.1 million loss on investments in
the three months ended March 31, 2019
due to the improved operating performance of Gemini, in which the
Company has a 49% shareholding interest.
Loss on derivatives
Amortization of deferred realized
losses on interest rate swaps remained stable at $0.9 million in each of the three months ended
March 31, 2020 and March 31, 2019.
Other income, net
Other income, net was $0.2 million in income in the three months ended
March 31, 2020 compared to nil in the
three months ended March 31,
2019.
Adjusted EBITDA
Adjusted EBITDA decreased by 7.2%, or
$5.6 million, to $71.9 million in the three months ended
March 31, 2020 from $77.5 million in the three months ended
March 31, 2019. As outlined above,
the decrease is mainly attributable to a $6.7 million decrease in operating revenues, of
which $3.2 million relates to the
impact of the COVID-19 pandemic described above, a $0.3 million increase in other finance expenses
and a $0.2 million increase in
operating expenses, which were partially offset by a $1.6 million increase in the operating
performance of our equity investees. Adjusted EBITDA for the three
months ended March 31, 2020 is
adjusted for stock based compensation of $0.3 million. Tables reconciling Adjusted EBITDA
to Net Income can be found at the end of this earnings release.
Recent Developments
In 2020, we acquired one 8,463 TEU
container vessel and one 8,626 TEU container vessel, both of
which have been fixed on two-year charters and in the aggregate are
expected to contribute approximately $12
million to EBITDA on an annualized basis. Additionally, we
entered into an agreement to acquire an 8,533 TEU vessel, which is
expected to be delivered to us in the second quarter of 2020.
On April 8, 2020, we entered into
a loan agreement with Macquarie Bank for an amount of up to
$24 million drawn down in full on
April 9, 2020. The loan was used to
partially finance the acquisition costs of the vessels Niledutch
Lion and Phoebe.
On May 12, 2020, we refinanced the
existing leaseback obligation related to the vessels Hyundai
Honour and Hyundai Respect with a new sale and leaseback
arrangement amounting to $139.1
million with a four-year term, at the end of which we will
reacquire these vessels for an aggregate amount of $36.0 million or earlier, at our option, for a
purchase price set forth in the agreement. This arrangement was
recorded as a financing transaction and recognized as a financial
liability.
Conference Call and Webcast
On Tuesday, May 19, 2020 at 9:00 A.M. ET, the Company's management will host
a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until May 26, 2020 by dialing 1 877
344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard
International Dial In) and using 10143967# as the access code.
Audio Webcast
There will also be a live and then
archived webcast of the conference call on the Danaos
website (www.danaos.com). Participants of the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
Slide Presentation
A slide presentation regarding the
Company and the containership industry will also be available on
the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of
the largest independent owners of modern, large-size
containerships. Our current fleet of 62 containerships aggregating
377,236 TEUs, including five vessels owned by Gemini Shipholdings
Corporation, a joint venture, ranks Danaos among the largest
containership charter owners in the world based on total TEU
capacity. Our fleet is chartered to many of the world's largest
liner companies on fixed-rate charters. Our long track record of
success is predicated on our efficient and rigorous operational
standards and environmental controls. Danaos Corporation's shares
trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this
release may constitute forward-looking statements within the
meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements reflect our current views
with respect to future events and financial performance and may
include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon
various assumptions. Although Danaos Corporation believes that
these assumptions were reasonable when made, because these
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond our control, Danaos Corporation cannot assure you that it
will achieve or accomplish these expectations, beliefs or
projections. Important factors that, in our view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the impact of the COVID-19
pandemic and efforts throughout the world to contain its spread,
including effects on global economic activity, demand for seaborne
transportation of containerized cargo, the ability and willingness
of charterers to perform their obligations to us, charter
rates for containerships, shipyards performing scrubber
installations, drydocking and repairs, changing vessel crews and
availability of financing; the effects of the 2018 refinancing
transactions; Danaos' ability to achieve the expected benefits of
the refinancing and comply with the terms of its new credit
facilities and other agreements entered into in connection with the
2018 refinancing; the strength of world economies and currencies,
general market conditions, including changes in charter hire rates
and vessel values, charter counterparty performance, changes in
demand that may affect attitudes of time charterers to scheduled
and unscheduled dry-docking, changes in Danaos Corporation's
operating expenses, including bunker prices, dry-docking and
insurance costs, ability to obtain financing and comply with
covenants in our financing arrangements, actions taken by
regulatory authorities, potential liability from pending or future
litigation, domestic and international political conditions,
potential disruption of shipping routes due to accidents and
political events or acts by terrorists.
Risks and uncertainties are further described in reports filed
by Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 104 unscheduled off-hire days in the three months
ended March 31, 2020. The following
table summarizes vessel utilization and the impact of the off-hire
days on the Company's revenue.
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
First
Quarter
|
2020
|
2019
|
Ownership
Days
|
5,073
|
|
4,950
|
Less Off-hire
Days:
|
|
|
|
Scheduled Off-hire
Days
|
(336)
|
|
-
|
Other Off-hire
Days
|
(104)
|
|
(90)
|
Operating
Days
|
4,633
|
|
4,860
|
Vessel
Utilization
|
91.3%
|
|
98.2%
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$106,196
|
|
$112,891
|
Average Gross
Daily Charter Rate
|
$22,922
|
|
$23,229
|
Fleet List
The following table describes in detail our
fleet deployment profile as of May 18,
2020:
Vessel
Name
|
Vessel
Size
(TEU)
|
|
Year
Built
|
|
Expiration of
Charter(1)
|
Containerships
|
|
|
|
|
|
|
|
|
|
|
|
Hyundai Ambition
(ex MSC Ambition)
|
13,100
|
|
2012
|
|
June 2024
|
Hyundai Speed (ex
Maersk Exeter)
|
13,100
|
|
2012
|
|
June 2024
|
Hyundai Smart (ex
Maersk Enping)
|
13,100
|
|
2012
|
|
May 2024
|
Hyundai
Respect
|
13,100
|
|
2012
|
|
March 2024
|
Hyundai
Honour
|
13,100
|
|
2012
|
|
February
2024
|
Express
Rome
|
10,100
|
|
2011
|
|
February
2022
|
Express
Berlin
|
10,100
|
|
2011
|
|
April 2022
|
Express
Athens
|
10,100
|
|
2011
|
|
February
2022
|
Le
Havre
|
9,580
|
|
2006
|
|
April 2023
|
Pusan
C
|
9,580
|
|
2006
|
|
March 2023
|
Niledutch
Lion
|
8,626
|
|
2008
|
|
February
2022
|
CMA CGM
Melisande
|
8,530
|
|
2012
|
|
May 2024
|
CMA CGM
Attila
|
8,530
|
|
2011
|
|
October 2023
|
CMA CGM
Tancredi
|
8,530
|
|
2011
|
|
November
2023
|
CMA CGM
Bianca
|
8,530
|
|
2011
|
|
January
2024
|
CMA CGM
Samson
|
8,530
|
|
2011
|
|
March 2024
|
America
|
8,468
|
|
2004
|
|
February
2023
|
Europe
|
8,468
|
|
2004
|
|
March 2023
|
Phoebe
|
8,463
|
|
2005
|
|
April 2022
|
CMA
CGM Moliere
|
6,500
|
|
2009
|
|
February
2022
|
CMA CGM
Musset
|
6,500
|
|
2010
|
|
August
2022
|
CMA CGM
Nerval
|
6,500
|
|
2010
|
|
October
2022
|
CMA CGM
Rabelais
|
6,500
|
|
2010
|
|
December
2022
|
CMA CGM
Racine
|
6,500
|
|
2010
|
|
January
2023
|
YM
Mandate
|
6,500
|
|
2010
|
|
January
2028
|
YM
Maturity
|
6,500
|
|
2010
|
|
April 2028
|
Performance
|
6,402
|
|
2002
|
|
May 2020
|
Dimitra
C
|
6,402
|
|
2002
|
|
January
2023
|
YM
Seattle
|
4,253
|
|
2007
|
|
September
2020
|
YM
Vancouver
|
4,253
|
|
2007
|
|
June 2020
|
Derby
D
|
4,253
|
|
2004
|
|
July 2020
|
ANL
Tongala
|
4,253
|
|
2004
|
|
October
2020
|
ZIM Rio
Grande
|
4,253
|
|
2008
|
|
June 2020
|
ZIM Sao
Paolo
|
4,253
|
|
2008
|
|
August
2020
|
ZIM
Kingston
|
4,253
|
|
2008
|
|
September
2020
|
ZIM
Monaco
|
4,253
|
|
2009
|
|
November
2020
|
ZIM
Dalian
|
4,253
|
|
2009
|
|
February 2021
|
ZIM
Luanda
|
4,253
|
|
2009
|
|
May 2021
|
Dimitris
C
|
3,430
|
|
2001
|
|
June 2020
|
Express Black
Sea
|
3,400
|
|
2011
|
|
November
2020
|
Express
Spain
|
3,400
|
|
2011
|
|
July 2020
|
Express
Argentina
|
3,400
|
|
2010
|
|
June 2020
|
Express
Brazil
|
3,400
|
|
2010
|
|
September
2020
|
Express
France
|
3,400
|
|
2010
|
|
October
2020
|
Singapore
|
3,314
|
|
2004
|
|
July 2020
|
Colombo
|
3,314
|
|
2004
|
|
August
2020
|
MSC
Zebra
|
2,602
|
|
2001
|
|
September
2020
|
Amalia
C
|
2,452
|
|
1998
|
|
August
2020
|
Danae
C
|
2,524
|
|
2001
|
|
June 2020
|
Advance
|
2,200
|
|
1997
|
|
August
2020
|
Future
|
2,200
|
|
1997
|
|
June 2020
|
Sprinter
|
2,200
|
|
1997
|
|
July 2020
|
Stride
|
2,200
|
|
1997
|
|
August
2020
|
Progress
C
|
2,200
|
|
1998
|
|
July 2020
|
Bridge
|
2,200
|
|
1998
|
|
September
2020
|
Highway
|
2,200
|
|
1998
|
|
May 2020
|
Vladivostok
|
2,200
|
|
1997
|
|
June 2020
|
|
|
|
|
|
|
Belita
ľ2)
|
8,533
|
|
2006
|
|
September
2021
|
Catherine C
(2)
|
6,422
|
|
2001
|
|
January
2023
|
Leo C
(2)
|
6,422
|
|
2002
|
|
August
2022
|
Suez
Canal(2)
|
5,610
|
|
2002
|
|
July 2020
|
Genoaľ2)
|
5,544
|
|
2002
|
|
August
2020
|
|
|
|
|
|
|
|
(1) Earliest
date charters could expire. Some charters include options to extend
their terms.
|
(2) Vessels
acquired by Gemini Shipholdings Corporation, in which Danaos holds
a 49% equity interest.
|
DANAOS
CORPORATION
|
Condensed
Consolidated Statements of Income - Unaudited
|
(Expressed in
thousands of United States dollars, except per share
amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
March
31,
|
March
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
OPERATING
REVENUES
|
$106,196
|
|
$112,891
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
Vessel operating
expenses
|
(26,002)
|
|
(25,871)
|
|
Depreciation &
amortization
|
(26,891)
|
|
(25,957)
|
|
General &
administrative
|
(5,840)
|
|
(6,869)
|
|
Other operating
expenses
|
(4,046)
|
|
(3,270)
|
Income From
Operations
|
43,417
|
|
50,924
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
Interest
income
|
1,714
|
|
1,596
|
|
Interest
expense
|
(16,313)
|
|
(17,843)
|
|
Other finance
expenses
|
(622)
|
|
(324)
|
|
Equity income/(loss)
on investments
|
1,545
|
|
(84)
|
|
Other income,
net
|
251
|
|
67
|
|
Realized loss on
derivatives
|
(903)
|
|
(893)
|
Total Other
Expenses, net
|
(14,328)
|
|
(17,481)
|
|
|
|
|
|
Net
Income
|
$29,089
|
|
$33,443
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
Basic earnings per
share
|
$1.18
|
|
$2.24
|
Diluted earnings per
share
|
$1.17
|
|
$2.19
|
Basic weighted
average number of common shares (in thousands of shares)
|
24,573
|
|
14,939
|
Diluted weighted
average number of common shares (in thousands of shares)
|
24,789
|
|
15,237
|
Non-GAAP
Measures1
|
Reconciliation of
Net Income to Adjusted Net Income – Unaudited
|
|
|
Three months
ended
|
|
Three months
ended
|
March
31,
|
March
31,
|
|
2020
|
|
2019
|
Net income
|
$29,089
|
|
$33,443
|
Amortization of
financing fees, debt discount & finance fees accrued
|
4,192
|
|
5,126
|
Adjusted Net
Income
|
$33,281
|
|
$38,569
|
Adjusted Earnings
Per Share, diluted
|
$1.34
|
|
$2.53
|
Diluted weighted
average number of shares (in thousands)
|
24,789
|
|
15,237
|
|
|
1
|
The Company reports
its financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of this financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Table above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three months
ended March 31, 2020 and 2019. Non-GAAP financial measures should
be viewed in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with
GAAP.
|
DANAOS
CORPORATION
|
Condensed
Consolidated Balance Sheets - Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
|
|
As
of
|
|
As
of
|
March
31,
|
December
31,
|
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$97,019
|
|
$139,170
|
|
Accounts receivable,
net
|
|
7,921
|
|
7,145
|
|
Other current
assets
|
|
47,133
|
|
44,071
|
|
|
|
152,073
|
|
190,386
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
2,413,730
|
|
2,389,874
|
|
Deferred charges,
net
|
|
13,995
|
|
11,455
|
|
Investments in
affiliates
|
|
10,510
|
|
8,965
|
|
Other non-current
assets
|
|
71,199
|
|
82,339
|
|
|
|
2,509,434
|
|
2,492,633
|
TOTAL
ASSETS
|
|
$2,661,507
|
|
$2,683,019
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
$119,525
|
|
$119,673
|
|
Accumulated accrued
interest, current portion
|
|
32,870
|
|
34,137
|
|
Long-term leaseback
obligations, current portion
|
|
16,804
|
|
16,342
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
51,668
|
|
52,928
|
|
|
|
220,867
|
|
223,080
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
1,245,785
|
|
1,270,663
|
|
Accumulated accrued
interest, net of current portion
|
|
146,909
|
|
156,583
|
|
Long-term leaseback
obligations, net
|
|
117,534
|
|
121,872
|
|
Other long-term
liabilities
|
|
26,764
|
|
29,131
|
|
|
|
1,536,992
|
|
1,578,249
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock
|
|
248
|
|
248
|
|
Additional paid-in
capital
|
|
785,572
|
|
785,274
|
|
Accumulated other
comprehensive loss
|
|
(124,363)
|
|
(116,934)
|
|
Retained
earnings
|
|
242,191
|
|
213,102
|
|
|
|
903,648
|
|
881,690
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$2,661,507
|
|
$2,683,019
|
DANAOS
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
- Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
March
31,
|
March
31,
|
|
|
2020
|
|
2019
|
Operating
Activities:
|
|
|
|
|
Net income
|
$29,089
|
|
$33,443
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation
|
24,581
|
|
23,766
|
|
Amortization of
deferred drydocking & special survey costs, finance
cost, debt discount and other finance fees accrued
|
6,502
|
|
7,317
|
|
PIK
interest
|
807
|
|
840
|
|
Payments for
drydocking/special survey
|
(4,850)
|
|
(121)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
903
|
|
893
|
|
Equity (income)/loss
on investments
|
(1,545)
|
|
84
|
|
Stock based
compensation
|
298
|
|
830
|
|
Accounts
receivable
|
(776)
|
|
1,782
|
|
Other assets, current
and non-current
|
(1,889)
|
|
(7,166)
|
|
Accounts payable and
accrued liabilities
|
5,343
|
|
918
|
|
Other liabilities,
current and long-term
|
(3,036)
|
|
(3,584)
|
Net Cash provided
by Operating Activities
|
55,427
|
|
59,002
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
Vessel additions and
advances
|
(42,246)
|
|
(1,667)
|
|
Investments
|
(75)
|
|
-
|
Net Cash used in
Investing Activities
|
(42,321)
|
|
(1,667)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
Debt
repayment
|
(32,637)
|
|
(29,714)
|
|
Payments of leaseback
obligations
|
(3,876)
|
|
-
|
|
Payments of
accumulated accrued interest
|
(8,329)
|
|
(9,100)
|
|
Finance
costs
|
(10,415)
|
|
(14,487)
|
Net Cash used in
Financing Activities
|
(55,257)
|
|
(53,301)
|
Net Increase/(Decrease)
in cash and cash equivalents
|
(42,151)
|
|
4,034
|
Cash and cash
equivalents, beginning of period
|
139,170
|
|
77,275
|
Cash and cash
equivalents, end of period
|
$97,019
|
|
$81,309
|
DANAOS
CORPORATION
|
Reconciliation of
Net Income to Adjusted EBITDA - Unaudited
|
(Expressed in
thousands of United States dollars)
|
|
|
Three months
ended
|
|
Three months
ended
|
March
31,
|
March
31,
|
|
2020
|
|
2019
|
Net income
|
$29,089
|
|
$33,443
|
Depreciation
|
24,581
|
|
23,766
|
Amortization of
deferred drydocking & special survey costs
|
2,310
|
|
2,191
|
Amortization of
deferred finance costs, debt discount and other
finance fees accrued
|
4,192
|
|
5,126
|
Amortization of
deferred realized losses on interest rate swaps
|
903
|
|
893
|
Interest
income
|
(1,714)
|
|
(1,596)
|
Interest
expense
|
12,259
|
|
12,885
|
Stock based
compensation
|
298
|
|
830
|
Adjusted
EBITDA(1)
|
$71,918
|
|
$77,538
|
|
|
1)
|
Adjusted EBITDA
represents net income before interest income and expense,
depreciation, amortization of deferred drydocking & special
survey costs, amortization of deferred finance costs, debt discount
and other finance fees accrued, amortization of deferred realized
losses on interest rate swaps and stock based compensation.
However, Adjusted EBITDA is not a recognized measurement under U.S.
generally accepted accounting principles, or "GAAP." We believe
that the presentation of Adjusted EBITDA is useful to investors
because it is frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in our
industry. We also believe that Adjusted EBITDA is useful in
evaluating our operating performance compared to that of other
companies in our industry because the calculation of Adjusted
EBITDA generally eliminates the effects of financings, income taxes
and the accounting effects of capital expenditures and
acquisitions, items which may vary for different companies for
reasons unrelated to overall operating performance. In evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring
items.
|
|
|
|
Note: Items to
consider for comparability include gains and charges. Gains
positively impacting net income are reflected as deductions to net
income. Charges negatively impacting net income are reflected as
increases to net income.
|
|
|
|
The Company reports
its financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of these financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three months
ended March 31, 2020 and 2019. Non-GAAP financial measures should
be viewed in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with
GAAP.
|
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SOURCE Danaos Corporation