Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the
“Company”), today reported its results for the three months and
year ended December 31, 2018.
The Company also announced that on January 25,
2019, its Board of Directors declared a quarterly cash dividend of
$0.02 per share on the Company’s common shares.
Results for the Three and Twelve Months
Ended December 31, 2018 and 2017
For the fourth quarter of 2018, the Company’s
GAAP net loss was $7.4 million, or $0.11 loss per diluted share.
These results include a non-cash loss of $7.7 million and cash
dividend income of $0.5 million, or $0.10 loss per diluted share
from the Company’s equity investment in Scorpio Tankers Inc. and a
write-off of deferred financing costs of $1.7 million, or $0.03
loss per diluted share, related to the refinancing of existing debt
(see discussion below, “Debt”). For the same period in 2017, the
Company’s GAAP net loss was $1.1 million, or $0.01 loss per diluted
share. Total vessel revenues for the fourth quarter of 2018 were
$65.2 million, compared to $51.1 million for the same period in
2017. Earnings before interest, taxes, depreciation and
amortization (“EBITDA”) for the fourth quarters of 2018 and 2017
were $23.3 million and $22.9 million, respectively (see Non-GAAP
Financial Measures below).
For the year ended December 31, 2018, the
Company’s GAAP net loss was $12.7 million or $0.18 loss per diluted
share, including a non-cash loss of $7.7 million and cash dividend
income of $0.5 million, or $0.10 loss per diluted share from the
Company’s equity investment in Scorpio Tankers Inc. and a write-off
of deferred financing costs of $3.8 million, or $0.05 loss per
diluted share, related to the refinancing of existing debt. For the
year ended December 31, 2017, the Company’s GAAP net loss was $59.7
million, or $0.83 loss per diluted share. Total vessel
revenues for 2018 were $242.5 million, compared to $162.2 million
for 2017. EBITDA for the years ended December 31, 2018 and 2017
were $100.6 million and $35.3 million, respectively (see Non-GAAP
Financial Measures below).
While the results for the year ended December
31, 2018 did not include any non-GAAP adjustments to net income,
the Company’s 2017 GAAP net loss included a loss/write-off of
vessels and assets held for sale of $17.7 million and the
write-off of deferred financing costs on the credit facility
related to those specific vessels of $0.5 million. Excluding
these items, the Company’s adjusted net loss for 2017
was $41.6 million, or $0.57 adjusted loss per
diluted share. Adjusted EBITDA for 2017 was $53.5 million (see
Non-GAAP Financial Measures below).
TCE Revenue
TCE Revenue Earned during the Fourth Quarter of
2018
- Our Kamsarmax fleet earned $13,148 per day
- Our Ultramax fleet earned $12,213 per day
Voyages Fixed thus far for the First Quarter of 2019
- Kamsarmax fleet: approximately $12,913 per day for 60% of the
days
- Ultramax fleet: approximately $11,072 per day for 56% of the
days
Cash and Cash Equivalents
As of January 25, 2019, the Company had
approximately $74.3 million in cash and cash equivalents.
Recent Significant Events
Share Repurchase Program
During the fourth quarter of 2018, the Company
repurchased a total of approximately 4.5 million shares of the
Company’s common shares under the then existing share repurchase
programs at an aggregate cost of approximately $27.0 million, or an
average cost of $6.05 per share, which was funded from available
cash resources. There have been no share repurchases since December
31, 2018. As of January 25, 2019, $24.8 million remained available
under the then existing share repurchase program.
On January 25, 2019, the Company’s Board of
Directors authorized a new share repurchase program to purchase up
to an aggregate of $50.0 million of the Company’s common
shares. This new share repurchase program replaced the
Company’s previous share repurchase program that was authorized in
October 2018 and that was terminated in conjunction with the
authorization of the new share repurchase program. The specific
timing and amounts of the repurchases will be in the sole
discretion of management and may vary based on market conditions
and other factors. The Company is not obligated under the terms of
the program to repurchase any of its common shares. The
authorization has no expiration date.
Dividend
In the fourth quarter of 2018, the Company’s
Board of Directors declared and the Company paid a quarterly cash
dividend of $0.02 per share totaling approximately $1.5
million.
On January 25, 2019, the Company’s Board of
Directors declared a quarterly cash dividend of $0.02 per share,
payable on or about March 15, 2019, to all shareholders of record
as of February 15, 2019. As of January 25, 2019, 71,217,258 shares
were outstanding.
Investment in Scorpio Tankers
Inc.
On October 12, 2018, the Company invested $100.0
million in a related party, Scorpio Tankers Inc. (NYSE:STNG)
("Scorpio Tankers") for approximately 54.1 million, or (as of
October 12, 2018) 10.9%, of Scorpio Tankers’ issued and outstanding
common shares. The investment was part of a larger $337.0 million
equity raise through a public offering of common shares by Scorpio
Tankers.
The Company measures its investment in Scorpio
Tankers based on the quoted market price of Scorpio Tankers’ common
stock, discounted for a temporary lack of marketability as at
December 31, 2018 pursuant to the terms of the lock-up agreement
entered into by the Company at the time of the investment. The
lock-up agreement expired on January 7, 2019. At December 31, 2018,
the Company recorded a $7.7 million non-cash loss and $0.5 million
cash dividend related income from the investment in Scorpio
Tankers, which were recorded in Investment income (loss) and
Dividend income, respectively, on the Consolidated Statement of
Operations.
On January 18, 2019, Scorpio Tankers effected a
one-for-ten reverse stock split and as such the Company now owns
approximately 5.4 million common shares of Scorpio Tankers.
On January 25, 2019, the fair value of the
Scorpio Tankers’ common stock owned by the Company was
approximately $110.4 million.
IMO 2020
In November 2018, the Company entered into an
agreement with third parties to purchase exhaust gas cleanings
systems (“scrubbers”) for 18 of its vessels in 2019 and for 10 of
its vessels in 2020. The total value of these agreements is
estimated to be $41.9 million. The systems that are
being fitted are of ‘hybrid ready’ design, which allows them to be
upgraded to a ‘closed loop’ configuration at a future date. As
part of the agreement, the Company also has an option to purchase
exhaust gas cleaning systems for up to 18 additional vessels
in 2020.
The Company is in discussions with its existing
lenders, as well as leasing companies, to provide secured financing
for substantially all of the estimated total cost of the scrubber
installation program as well as to provide additional operating
liquidity. These discussions are ongoing, however the Company
expects to be able to make announcements within the first quarter
of 2019.
The Company’s projected scrubber installation
schedule and estimated payments for such installation on all the
vessels in the Company’s fleet is as follows (dollars in
thousands):
|
|
Number of Vessels by Type |
|
Estimated Payments |
|
|
|
Ultramax |
|
Kamsarmax |
|
|
Q1 2019 |
|
— |
|
— |
|
$ |
7,046 |
|
|
Q2 2019 |
|
— |
|
3 |
|
11,271 |
|
|
Q3 2019 |
|
9 |
|
1 |
|
23,147 |
|
|
Q4 2019 |
|
1 |
|
4 |
|
17,399 |
|
|
Q1 2020 |
|
11 |
|
1 |
|
24,322 |
|
|
Q2 2020 |
|
9 |
|
6 |
|
24,529 |
|
|
Q3 2020 |
|
4 |
|
4 |
|
12,223 |
|
|
Q4 2020 |
|
3 |
|
— |
|
4,980 |
|
|
Q1 2021 |
|
— |
|
— |
|
859 |
|
|
Total |
|
37 |
|
19 |
|
$ |
125,776 |
|
|
Charter Employment Fixed
The following table summarizes certain information for the
Company’s vessels that have been fixed via a time charter.
Vessel |
|
Type |
|
Earliest Redelivery Date |
|
Rate Per Day |
SBI
Jaguar |
|
Ultramax |
|
April
2019 |
|
$ |
16,000 |
|
SBI
Ursa |
|
Ultramax |
|
June
2019 |
|
15,000 |
|
SBI
Tango |
|
Ultramax |
|
March
2019 |
|
14,500 |
|
SBI
Cougar |
|
Ultramax |
|
March
2019 |
|
16,500 |
|
SBI
Echo |
|
Ultramax |
|
February 2019 |
|
15,000 |
|
SBI
Thalia |
|
Ultramax |
|
April
2019 |
|
16,500 |
|
SBI
Lyra |
|
Ultramax |
|
April
2019 |
|
16,500 |
|
SBI
Libra |
|
Ultramax |
|
April
2019 |
|
15,250 |
|
SBI
Hera |
|
Ultramax |
|
April
2019 |
|
14,850 |
|
SBI
Bolero |
|
Kamsarmax |
|
May
2019 |
|
14,500 |
|
SBI
Macarena |
|
Kamsarmax |
|
February 2019 |
|
16,000 |
|
SBI
Mazurka |
|
Kamsarmax |
|
May
2019 |
|
16,000 |
|
SBI
Samba |
|
Kamsarmax |
|
April
2019 |
|
15,500 |
|
Debt
$34.0 Million Credit Facility
On October 3, 2018, we entered into a senior secured credit
facility for up to $34.0 million with a leading European financial
institution, or the “$34.0 Million Credit Facility,” to refinance
up to 62.5% of the fair market value of two Kamsarmax bulk vessels
(SBI Jive and SBI Swing). The loan facility, which is
comprised of a term loan up to $17.0 million and a
revolver of up to $17.0 million, has a final maturity date of
seven years from signing date and bears interest at LIBOR plus a
margin of 2.35% per annum. This facility is secured by, among
other things, a first preferred mortgage on the two vessels and is
guaranteed by each of the vessel owning subsidiaries. On October 5,
2018, the Company drew down the entire $34.0 million available on
this facility.
$330.0 Million Credit Facility
During October of 2018, the Company repaid approximately $23.1
million of our $330.0 Million Credit Facility as two of the
Kamsarmax vessels previously financed by this loan are now financed
under the $34.0 Million Credit Facility.
During November of 2018, the Company repaid an additional
approximately $61.7 million under this credit facility upon the
closing of the $90.0 Million Credit Facility discussed below.
$20.5 Million Lease Financing - SBI Hermes
On November 16, 2018, we closed a financing transaction with an
unaffiliated third party for the sale and leaseback of the SBI
Hermes, a 2016 Japanese-built Ultramax vessel, for consideration
of $20.5 million. As part of the transaction, the Company
has agreed with the buyer to bareboat charter the vessel for a
period of five years at $5,850 per day. The transaction also
provides the Company with an option to repurchase the SBI Hermes
beginning on the third anniversary of the sale until the end of the
bareboat charter agreement. If converted to floating interest
rates, based on the expected weighted average life of the
transaction, the equivalent cost of financing at the then
prevailing swap rates would have been LIBOR plus a margin of 1.43%
per annum.
$27.3 Million Credit Facility
During November of 2018, the Company repaid approximately $8.8
million on its $27.3 Million Credit Facility as the SBI Hermes, an
Ultramax vessel that was previously financed under this credit
facility, is now financed under our $20.5 Million Lease Financing -
SBI Hermes.
$90.0 Million Credit Facility
On November 8, 2018, the Company entered into a senior secured
credit facility for up to $90.0 million with Nordea Bank Abp,
acting through its New York branch, and DVB Bank SE. The
loan facility, which has a final maturity date of five years from
the signing date and bears interest at LIBOR plus a margin of 2.35%
per annum, is being used to finance up to 60% of the fair market
value of six Ultramax dry bulk vessels (SBI Orion, SBI Hyperion,
SBI Tethys, SBI Hercules, SBI Samson and SBI Phoenix). This
facility is secured by, among other things, a first preferred
mortgage on the six vessels and is guaranteed by each of the vessel
owning subsidiaries. On November 13, 2018, the Company drew down
the entire $90.0 million available on this facility.
Summary of Recent Drawdowns and Repayments on Credit
Facilities
The drawdowns and repayments on the Company’s credit facilities
during the fourth quarter of 2018 related to the debt refinancing
transactions described above are as follows:
Credit Facility |
|
Drawdown (Repayment) Amount($
thousands) |
|
$34.0 Million Credit
Facility |
|
$ |
34,000 |
|
|
$90.0 Million Credit
Facility |
|
90,000 |
|
|
$330.0 Million Credit
Facility |
|
(84,803 |
) |
|
$20.5 Million Lease
Financing - SBI Hermes |
|
20,500 |
|
|
$27.3 Million Credit
Facility |
|
(8,817 |
) |
|
Debt OverviewThe Company’s outstanding debt
balances, gross of unamortized deferred financing costs as of
December 31, 2018 and January 25, 2019, are as follows
(dollars in thousands):
|
|
As of December 31, 2018 |
|
As of January 25, 2019 |
|
|
|
|
|
|
|
Credit Facility |
|
Amount Outstanding |
|
Senior Notes |
|
$ |
73,625 |
|
|
$ |
73,625 |
|
|
$330 Million Credit
Facility |
|
140,677 |
|
|
140,677 |
|
|
$42 Million Credit
Facility |
|
14,105 |
|
|
14,105 |
|
|
$12.5 Million Credit
Facility |
|
9,400 |
|
|
9,400 |
|
|
$27.3 Million Credit
Facility |
|
9,008 |
|
|
9,008 |
|
|
$85.5 Million Credit
Facility |
|
78,972 |
|
|
78,972 |
|
|
$38.7 Million Credit
Facility |
|
35,100 |
|
|
35,100 |
|
|
$19.6 Million Lease
Financing - SBI Rumba |
|
18,101 |
|
|
18,003 |
|
|
$12.8 Million Credit
Facility |
|
12,325 |
|
|
12,325 |
|
|
$19.0 Million Lease
Financing - SBI Tango |
|
18,450 |
|
|
18,359 |
|
|
$19.0 Million Lease
Financing - SBI Echo |
|
18,481 |
|
|
18,394 |
|
|
$30.0 Million Credit
Facility |
|
29,420 |
|
|
29,420 |
|
|
$60.0 Million Credit
Facility |
|
58,797 |
|
|
58,797 |
|
|
$184.0 Million Credit
Facility |
|
180,229 |
|
|
180,229 |
|
|
$34.0 Million Credit
Facility |
|
34,000 |
|
|
34,000 |
|
|
$90.0 Million Credit
Facility |
|
90,000 |
|
|
90,000 |
|
|
$20.5 Million Lease
Financing - SBI Hermes |
|
20,299 |
|
|
20,199 |
|
|
Total |
|
$ |
840,989 |
|
|
$ |
840,613 |
|
|
The Company’s projected quarterly debt
repayments on its bank loans and senior notes and bareboat charter
payments on its finance leases through 2019 are as follows (dollars
in thousands):
|
|
Principal on Bank Loans and Senior
Notes |
|
Finance Lease |
|
Total |
Q1 2019 (1) |
|
|
14,847 |
|
|
|
1,341 |
|
|
|
16,188 |
|
Q2 2019 |
|
|
15,617 |
|
|
|
2,012 |
|
|
|
17,629 |
|
Q3 2019 (2) |
|
|
88,817 |
|
|
|
2,012 |
|
|
|
90,829 |
|
Q4 2019 |
|
|
15,813 |
|
|
|
2,012 |
|
|
|
17,825 |
|
Total |
|
$ |
135,094 |
|
|
$ |
7,377 |
|
|
$ |
142,471 |
|
(1) Relates to payments expected to be made from January 26,
2019 to March 31, 2019.(2) Includes $73.6 million repayment of
Senior Notes due at maturity.
Financial Results for the Three Months
Ended December 31, 2018 Compared to the Three Months Ended
December 31, 2017
For the fourth quarter of 2018, the Company’s
GAAP net loss was $7.4 million, or $0.11 loss per diluted share
compared to a GAAP net loss of $1.1 million, or $0.01 loss per
diluted share in the same period in 2017. Results for the
fourth quarter of 2018 include a non-cash loss of $7.7 million and
cash dividend income of $0.5 million, or $0.10 loss per diluted
share from the Company’s equity investment in Scorpio Tankers Inc.
and a write-off of deferred financing costs of $1.7 million, or
$0.03 loss per diluted share, related to the refinancing of
existing debt. EBITDA for the fourth quarters of 2018 and 2017 were
$23.3 million and $22.9 million, respectively (see Non-GAAP
Financial Measures).
Total vessel revenues for the fourth quarter of
2018 were $65.2 million compared to $51.1 million in the fourth
quarter of 2017. The Company’s TCE revenue (see Non-GAAP Financial
Measures) for the fourth quarter of 2018 was $65.0 million, an
increase of $14.0 million from the prior year period. During the
fourth quarter of 2018, rates earned by the Company’s Ultramax
Operations were driven by the South American and Black Sea grain
markets as well as demand for petcoke and coal exports from the
United States Gulf. Rates earned by the Company’s Kamsarmax vessels
were lower than anticipated due to the restriction of coal imports
by the Chinese government, mild winter temperatures and the lack of
grain cargoes from the United States to the Far East.
Total operating expenses for the fourth quarter
of 2018 were $51.4 million compared to $43.2 million in the fourth
quarter of 2017. The increase from the prior year period
relates primarily to increases in vessel operating expenses and
depreciation due principally to the growth of the Company’s fleet,
as well as general administrative expenses due to an increase in
consulting and employee compensation.
Ultramax Operations
|
Three Months Ended December 31, |
|
|
|
|
Dollars in
thousands |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
Vessel
revenue |
$ |
42,419 |
|
|
$ |
30,266 |
|
|
$ |
12,153 |
|
|
40 |
|
Voyage
expenses |
65 |
|
|
47 |
|
|
18 |
|
|
38 |
|
TCE
Revenue |
$ |
42,354 |
|
|
$ |
30,219 |
|
|
$ |
12,135 |
|
|
40 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Vessel
operating costs |
17,791 |
|
|
14,082 |
|
|
3,709 |
|
|
26 |
|
Charterhire expense |
981 |
|
|
936 |
|
|
45 |
|
|
5 |
|
Vessel
depreciation |
9,401 |
|
|
7,819 |
|
|
1,582 |
|
|
20 |
|
General
and administrative expense |
1,089 |
|
|
881 |
|
|
208 |
|
|
24 |
|
Total operating expenses |
$ |
29,262 |
|
|
$ |
23,718 |
|
|
$ |
5,544 |
|
|
23 |
|
Operating
income |
$ |
13,092 |
|
|
$ |
6,501 |
|
|
$ |
6,591 |
|
|
101 |
|
Vessel revenue for the Company’s Ultramax
Operations increased to $42.4 million for the fourth quarter of
2018 from $30.3 million in the prior year period. During the fourth
quarter of 2018, both the South American and Black Sea grain
markets supported Ultramax rates in the Atlantic as Chinese buyers
replaced their usual grain imports from the United States Gulf with
imports from those markets. The United States Gulf market was able
to replace some of that lost demand with petcoke and coal, as
prices for those commodities fell. However, high levels of Chinese
coal stockpiles, coupled with government year-end restrictions on
imports from October onwards negatively affected Pacific round
voyage levels.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Ultramax Operations was $42.4 million for the
fourth quarter of 2018 and was associated with a day-weighted
average of 37 vessels owned and one time chartered-in vessel,
compared to $30.2 million for the prior year period, associated
with a day-weighted average of 29 vessels owned. TCE revenue per
day was $12,213 and $10,886 for the fourth quarters of 2018 and
2017, respectively.
Dollars in
thousands |
Three Months Ended December 31, |
|
|
|
|
Ultramax
Operations: |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE Revenue |
$ |
42,354 |
|
|
$ |
30,219 |
|
|
$ |
12,135 |
|
|
40 |
|
TCE Revenue / Day |
$ |
12,213 |
|
|
$ |
10,886 |
|
|
$ |
1,327 |
|
|
12 |
|
Revenue Days |
3,468 |
|
|
2,776 |
|
|
692 |
|
|
25 |
|
The Company’s Ultramax Operations vessel
operating costs were $17.8 million for the fourth quarter of 2018,
relating to the 37 vessels owned on average during the period, and
included approximately $1.1 million of takeover costs and
contingency expenses. Vessel operating costs for the prior year
period were $14.1 million and related to the 29 vessels owned on
average during the period. Daily operating costs excluding takeover
costs and contingency expenses for the fourth quarters of 2018 and
2017 were $4,901 and $4,749, respectively. Daily operating
costs for the fourth quarter of 2018 decreased from $5,037 in the
third quarter of 2018. The fluctuations from period to period are
due primarily to the timing of spare and store purchases, as well
as repairs and maintenance, including certain annual class and
certification costs.
Charterhire expense for the Company’s Ultramax
Operations was approximately $1.0 million for both the third
quarters of 2018 and 2017 and relates to the vessel time
chartered-in at $10,125 per day.
Ultramax Operations depreciation increased to
$9.4 million in the fourth quarter of 2018 from $7.8 million in the
prior year period, reflecting the increase in the Company’s
weighted average vessels owned to 37 from 29.
General and administrative expense for the
Company’s Ultramax Operations was $1.1 million for the fourth
quarter of 2018 and $0.9 million in the prior year period. General
and administrative expenses consist primarily of administrative
service fees, which are incurred on a per vessel per day basis, and
bank charges, which are incurred based on the number of
transactions. The increase versus the prior year period
reflects the growth of the Company’s fleet.
Kamsarmax Operations
|
Three Months Ended December 31, |
|
|
|
|
Dollars in
thousands |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
Vessel
revenue |
$ |
22,752 |
|
|
$ |
20,861 |
|
|
$ |
1,891 |
|
|
9 |
|
Voyage
expenses |
112 |
|
|
50 |
|
|
62 |
|
|
124 |
|
TCE
Revenue |
$ |
22,640 |
|
|
$ |
20,811 |
|
|
$ |
1,829 |
|
|
9 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Vessel
operating costs |
8,796 |
|
|
8,719 |
|
|
77 |
|
|
1 |
|
Charterhire expense |
104 |
|
|
11 |
|
|
93 |
|
|
845 |
|
Vessel
depreciation |
5,013 |
|
|
5,021 |
|
|
(8 |
) |
|
— |
|
General
and administrative expense |
554 |
|
|
324 |
|
|
230 |
|
|
71 |
|
Total operating expenses |
$ |
14,467 |
|
|
$ |
14,075 |
|
|
$ |
392 |
|
|
3 |
|
Operating
income |
$ |
8,173 |
|
|
$ |
6,736 |
|
|
$ |
1,437 |
|
|
21 |
|
Vessel revenue for the Company’s Kamsarmax
Operations increased to $22.8 million in the fourth quarter of 2018
from $20.9 million in the prior year period. Kamsarmax rates were
lower in the fourth quarter of 2018 when compared to the first nine
months of 2018 due to the restriction of coal imports by the
Chinese government, mild winter temperatures and the lack of grain
cargoes from the United States to the Far East.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $22.6 million for the
fourth quarter of 2018 associated with a day-weighted average of 19
vessels owned, compared to $20.8 million for the prior year period
associated with a day-weighted average of 18 vessels owned and one
vessel time chartered-in. TCE revenue per day was $13,148 and
$12,605 for the fourth quarters of 2018 and 2017, respectively.
Dollars in
thousands |
Three Months Ended December 31, |
|
|
|
|
Kamsarmax
Operations: |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE Revenue |
$ |
22,640 |
|
|
$ |
20,811 |
|
|
$ |
1,829 |
|
|
9 |
|
TCE Revenue / Day |
$ |
13,148 |
|
|
$ |
12,605 |
|
|
$ |
543 |
|
|
4 |
|
Revenue Days |
1,722 |
|
|
1,651 |
|
|
71 |
|
|
4 |
|
Kamsarmax Operations vessel operating costs were
$8.8 million for the fourth quarter of 2018 relating to the 19
vessels owned on average during the period and included $0.3
million of takeover costs and contingency expenses. This compares
to the prior year period of $8.7 million relating to 18 vessels
owned on average during the period. Daily operating costs excluding
takeover costs and contingency expenses for the fourth quarters of
2018 and 2017 were $4,857 and $4,943, respectively. Vessel
operating expenses decreased from $4,931 in the third quarter of
2018, due primarily to a decrease in spare and store purchases.
While the Company did not time charter-in any
Kamsarmax vessels in either the fourth quarter of 2018 or 2017, it
has a profit and loss sharing agreement with a third party related
to one Kamsarmax vessel, for which it recorded its share of the
losses.
Kamsarmax Operations depreciation was $5.0
million in both the fourth quarters of 2018 and 2017 as the
Company’s weighted average vessels owned were 19 and 18 in the same
periods.
General and administrative expense for the
Company’s Kamsarmax Operations was $0.6 million and $0.3 million
for the fourth quarters of 2018 and 2017, respectively. The
expense consists primarily of administrative services fees, which
are incurred on a per vessel per day basis, and bank charges, which
are incurred based on the number of transactions.
Corporate
Certain general and administrative expenses the
Company incurs, all of its financial expenses and investment income
or losses are not attributable to a specific segment. Accordingly,
these costs are not allocated to the Company’s segments. These
general and administrative expenses, including compensation, audit,
legal and other professional fees, as well as the costs of being a
public company, such as director fees, were $7.4 million and $5.3
million in the fourth quarters of 2018 and 2017,
respectively. The quarter over quarter increase is due
primarily to increases in compensation and consulting fees.
The Company recorded a non-cash loss of $7.7
million for the fourth quarter of 2018 and a cash dividend of $0.5
million on its equity investment in Scorpio Tankers.
Financial expenses, net increased to $14.4
million in the fourth quarter of 2018 from $9.1 million in the
prior year period due to an increase in the LIBOR rate and higher
levels of debt due to refinancing, as well as the write-off of $1.7
million of deferred financing costs related to such
refinancing.
Financial Results for the Year Ended
December 31, 2018 Compared to the Year Ended December 31,
2017
For the year ended December 31, 2018, the
Company’s GAAP net loss was $12.7 million or $0.18 loss per diluted
share compared to a GAAP net loss of $59.7 million, or $0.83 loss
per diluted share in the same period in 2017. Results for the year
ended December 31, 2018 include a non-cash loss of $7.7 million and
a cash dividend of $0.5 million, or $0.10 loss per diluted share
from the Company’s equity investment in Scorpio Tankers and a
write-off of deferred financing costs of $3.8 million, or $0.05
loss per diluted share, related to the refinancing of existing
debt. EBITDA for the years ended December 31, 2018 and 2017 were
$100.6 million and $35.3 million, respectively (see Non-GAAP
Financial Measures). Excluding the loss/write-off of vessels and
assets held for sale of $17.7 million and the write-off of
deferred financing costs on the credit facility related to those
specific vessels of $0.5 million, the Company’s adjusted
net loss for the year ended December 31, 2017 was $41.6
million, or $0.57 adjusted loss per diluted share and
adjusted EBITDA was $53.5 million (see Non-GAAP Financial Measures
below). There were no such non-GAAP adjustments to the Company’s
net income for the year ended December 31, 2018.
Total vessel revenues for the year ended
December 31, 2018 were $242.5 million, an increase of 50% from
$162.2 million for the same period in 2017. The Company’s TCE
revenue (see Non-GAAP Financial Measures) for the year ended
December 31, 2018 was $242.0 million compared to $161.8 million for
the same period in 2017. The rates earned in 2018 by both the
Company’s Ultramax and Kamsarmax Operations were driven by a
decrease in the supply of tonnage and the United States and China
trade war which resulted in longer voyages as Chinese imports from
the United States were replaced with imports from South
America.
Total operating expenses for the year ended
December 31, 2018 were $199.2 million compared to $187.8 million
for the same period in 2017. The year over year increase relates to
increases in vessel operating costs and depreciation resulting from
the increase in the size of the Company’s fleet, offset in part to
the loss/write-off of vessels and assets held for sale
of $17.7 million recorded in 2017.
Ultramax Operations
|
Year Ended December 31, |
|
|
|
|
Dollars in
thousands |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
Vessel
revenue |
$ |
155,197 |
|
|
$ |
94,380 |
|
|
$ |
60,817 |
|
|
64 |
|
Voyage
expenses |
330 |
|
|
129 |
|
|
201 |
|
|
156 |
|
TCE
Revenue |
$ |
154,867 |
|
|
$ |
94,251 |
|
|
$ |
60,616 |
|
|
64 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Vessel
operating costs |
71,220 |
|
|
51,445 |
|
|
19,775 |
|
|
38 |
|
Charterhire expense |
3,754 |
|
|
975 |
|
|
2,779 |
|
|
285 |
|
Vessel
depreciation |
37,287 |
|
|
29,797 |
|
|
7,490 |
|
|
25 |
|
General
and administrative expense |
4,344 |
|
|
3,389 |
|
|
955 |
|
|
28 |
|
Total operating expenses |
$ |
116,605 |
|
|
$ |
85,606 |
|
|
$ |
30,999 |
|
|
36 |
|
Operating
income |
$ |
38,262 |
|
|
$ |
8,645 |
|
|
$ |
29,617 |
|
|
343 |
|
Vessel revenue for the Company’s Ultramax
Operations increased to $155.2 million for the year ended December
31, 2018 from $94.4 million in the prior year. Despite tariffs and
sanctions disrupting 2018, rates earned by the Company’s Ultramax
Operations increased by 24% compared to 2017 due to lower levels of
tonnage supply, grain exports from the South American and Black Sea
markets and petcoke and coal cargoes out of the United States
Gulf.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Ultramax Operations was $154.9 million for the
year ended December 31, 2018 associated with a day-weighted average
of 37 vessels owned and one time chartered-in vessel, compared to
$94.3 million for the prior year period, associated with a
day-weighted average of 29 vessels owned. TCE revenue per day was
$11,226 and $9,159 for the year ended December 31, 2018 and
2017, respectively.
Dollars in
thousands |
Year Ended December 31, |
|
|
|
|
Ultramax
Operations: |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE Revenue |
$ |
154,867 |
|
|
$ |
94,251 |
|
|
$ |
60,616 |
|
|
64 |
TCE Revenue / Day |
$ |
11,226 |
|
|
$ |
9,159 |
|
|
$ |
2,067 |
|
|
23 |
Revenue Days |
13,795 |
|
|
10,291 |
|
|
3,504 |
|
|
34 |
The Company’s Ultramax Operations vessel
operating costs were $71.2 million for the year ended December 31,
2018, relating to the 37 vessels owned on average during the period
and included approximately $4.2 million of takeover costs and
contingency expenses. Vessel operating costs for the prior
year were $51.4 million and related to the 29 vessels owned on
average during the period. Daily operating costs excluding takeover
costs, contingency expenses and other non-operating expenses for
the years ended December 31, 2018 and 2017 were $4,962 and $4,842,
respectively. The increase is due to an increase of purchases of
spares and stores, as well as freight and forwarding expense.
Charterhire expense for the Company’s Ultramax
Operations was approximately $3.8 million for the year ended
December 31, 2018, and relates to the vessel the Company has time
chartered-in at $10,125 per day since the end of the third quarter
of 2017.
Ultramax Operations depreciation increased to
$37.3 million for the year ended December 31, 2018 from $29.8
million in the prior year reflecting the increase in the Company’s
weighted average vessels owned to 37 from 29.
General and administrative expense for the
Company’s Ultramax Operations was $4.3 million for 2018 and $3.4
million in the prior year period. General and administrative
expenses consist primarily of administrative service fees, which
are incurred on a per vessel per day basis, and bank charges, which
are incurred based on the number of transactions. The
increase versus the prior year reflects the growth of the Company’s
fleet.
Kamsarmax Operations
|
Year Ended December 31, |
|
|
|
|
Dollars in
thousands |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE
Revenue: |
|
|
|
|
|
|
|
Vessel
revenue |
$ |
87,305 |
|
|
$ |
67,825 |
|
|
$ |
19,480 |
|
|
29 |
|
Voyage
expenses |
219 |
|
|
300 |
|
|
(81 |
) |
|
(27 |
) |
TCE
Revenue |
$ |
87,086 |
|
|
$ |
67,525 |
|
|
$ |
19,561 |
|
|
29 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Vessel
operating costs |
34,254 |
|
|
35,336 |
|
|
(1,082 |
) |
|
(3 |
) |
Charterhire expense |
422 |
|
|
4,417 |
|
|
(3,995 |
) |
|
(90 |
) |
Vessel
depreciation |
19,320 |
|
|
18,713 |
|
|
607 |
|
|
3 |
|
General
and administrative expense |
2,069 |
|
|
1,916 |
|
|
153 |
|
|
8 |
|
Loss /
write down on assets held for sale |
— |
|
|
17,701 |
|
|
(17,701 |
) |
|
(100 |
) |
Total operating expenses |
$ |
56,065 |
|
|
$ |
78,083 |
|
|
$ |
(22,018 |
) |
|
(28 |
) |
Operating
income (loss) |
$ |
31,021 |
|
|
$ |
(10,558 |
) |
|
$ |
41,579 |
|
|
394 |
|
Vessel revenue for the Company’s Kamsarmax
Operations increased to $87.3 million for the year ended December
31, 2018 from $67.8 million in the prior year. Rates earned
by the Company’s Kamsarmax Operations during the year ended
December 31, 2018 increased 31% compared to 2017, as supply was
down due to a lack of new deliveries, as well as increased ton per
mile utilization due to an increase in voyages from the east coast
of South America to China resulting from the United States and
China trade wars.
TCE revenue (see Non-GAAP Financial Measures)
for the Company’s Kamsarmax Operations was $87.1 million for the
year ended December 31, 2018 associated with a day-weighted average
of 19 vessels owned, compared to $67.5 million for prior year,
associated with a day-weighted average of 18 vessels owned and one
vessel time chartered-in. TCE revenue per day was $13,127 and
$10,051 for the years ended December 31, 2018 and 2017,
respectively.
Dollars in
thousands |
Year Ended December 31, |
|
|
|
|
Kamsarmax
Operations: |
2018 |
|
2017 |
|
Change |
|
% Change |
TCE Revenue |
$ |
87,086 |
|
|
$ |
67,525 |
|
|
$ |
19,561 |
|
|
29 |
|
TCE Revenue / Day |
$ |
13,127 |
|
|
$ |
10,051 |
|
|
$ |
3,076 |
|
|
31 |
|
Revenue Days |
6,634 |
|
|
6,718 |
|
|
(84 |
) |
|
(1 |
) |
Kamsarmax Operations vessel operating costs were
$34.3 million for the year ended December 31, 2018, which related
to the 19 vessels owned on average during the period and included
approximately $1.1 million of takeover costs and contingency
expenses. Vessel operating costs for the prior year were $35.3
million and related to the 18 vessels owned on average during the
period. Daily operating costs excluding takeover costs, contingency
expenses and other non-operating expenses for the years ended
December 31, 2018 and 2017 were $4,940 and $5,028,
respectively.
While the Company does not time charter-in any
Kamsarmax vessels, it has a profit and loss sharing agreement
relating to one Kamsarmax vessel with a third party and during the
year ended December 31, 2018, the Company’s share of the loss on
that vessel was $0.4 million compared to $0.8 million in the prior
year period. During the prior year period, a Kamsarmax vessel was
time chartered-in through August 2017 at a cost of $3.6
million.
Kamsarmax Operations depreciation increased to
$19.3 million for the year ended December 31, 2018 from $18.7
million in the prior year period. The Company’s weighted
average vessels owned was 19 and 18 for the years ended December
31, 2018 and 2017, respectively.
General and administrative expense for the
Company’s Kamsarmax Operations was $2.1 million and $1.9 million
for the years ended December 31, 2018 and 2017, respectively.
The expense consists primarily of administrative services fees,
which are incurred on a per vessel per day basis, and bank charges,
which are incurred based on the number of transactions.
During the year ended December 31, 2017, the Company recorded a
write-down on assets held for sale of $17.7 million related to the
sale of two Kamsarmax vessels to an unaffiliated third party.
Corporate
Certain general and administrative expenses the
Company incurs as well as all of its financial expenses and
investment income or losses are not attributable to a specific
segment. Accordingly, these costs are not allocated to the
Company’s segments. These general and administrative expenses,
including compensation, audit, legal and other professional fees,
as well as the costs of being a public company, such as director
fees, increased slightly year over year totaling $25.9 million and
$23.8 million for the years ended December 31, 2018 and 2017,
respectively.
The Company recorded a non cash loss of $7.7
million for the fourth quarter of 2018 and a cash dividend of $0.5
million on its equity investment in Scorpio Tankers.
Financial expenses, net increased to $49.9
million in the year ended December 31, 2018 from $33.9 million in
the prior year period due to an increase in the LIBOR rate and
higher levels of debt related to the increase in overall fleet size
and debt refinancing, as well as the write-off of $3.8 million of
deferred financing costs related to such refinancing.
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Statements of
Operations(Amounts in thousands, except per share
data)
|
|
Unaudited |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue: |
|
|
|
|
|
|
|
|
Vessel
revenue |
|
$ |
65,171 |
|
|
$ |
51,127 |
|
|
$ |
242,502 |
|
|
$ |
162,205 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Voyage
expenses |
|
177 |
|
|
97 |
|
|
549 |
|
|
429 |
|
Vessel
operating costs |
|
26,587 |
|
|
22,801 |
|
|
105,475 |
|
|
86,664 |
|
Charterhire expense |
|
1,085 |
|
|
947 |
|
|
4,176 |
|
|
5,392 |
|
Vessel
depreciation |
|
14,414 |
|
|
12,840 |
|
|
56,607 |
|
|
48,510 |
|
General
and administrative expenses |
|
9,102 |
|
|
6,551 |
|
|
32,385 |
|
|
29,081 |
|
Loss /
write down on assets held for sale |
|
— |
|
|
— |
|
|
— |
|
|
17,701 |
|
Total operating
expenses |
|
51,365 |
|
|
43,236 |
|
|
199,192 |
|
|
187,777 |
|
Operating
income (loss) |
|
13,806 |
|
|
7,891 |
|
|
43,310 |
|
|
(25,572 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest
income |
|
351 |
|
|
197 |
|
|
1,107 |
|
|
1,100 |
|
Dividend
income |
|
541 |
|
|
— |
|
|
541 |
|
|
— |
|
Investment income (loss) |
|
(7,719 |
) |
|
— |
|
|
(7,719 |
) |
|
— |
|
Foreign
exchange loss |
|
5 |
|
|
(15 |
) |
|
(68 |
) |
|
(292 |
) |
Financial
expense, net |
|
(14,357 |
) |
|
(9,141 |
) |
|
(49,869 |
) |
|
(34,962 |
) |
Total other
expense |
|
(21,179 |
) |
|
(8,959 |
) |
|
(56,008 |
) |
|
(34,154 |
) |
Net
loss |
|
$ |
(7,373 |
) |
|
$ |
(1,068 |
) |
|
$ |
(12,698 |
) |
|
$ |
(59,726 |
) |
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.11 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.83 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.83 |
) |
|
|
|
|
|
|
|
|
|
Basic weighted average
number of common shares outstanding |
|
69,387 |
|
|
71,702 |
|
|
71,827 |
|
|
71,794 |
|
Diluted weighted
average number of common shares outstanding |
|
69,387 |
|
|
71,702 |
|
|
71,827 |
|
|
71,794 |
|
Scorpio Bulkers Inc. and
SubsidiariesConsolidated Balance
Sheets(Dollars in thousands)
|
|
Unaudited |
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and
cash equivalents |
|
$ |
67,495 |
|
|
$ |
68,535 |
|
Accounts
receivable |
|
10,290 |
|
|
7,933 |
|
Prepaid
expenses and other current assets |
|
6,314 |
|
|
6,087 |
|
Total current
assets |
|
84,099 |
|
|
82,555 |
|
Non-current assets |
|
|
|
|
Vessels,
net |
|
1,507,918 |
|
|
1,534,782 |
|
Vessels
under construction |
|
— |
|
|
6,710 |
|
Equity
method investment |
|
92,281 |
|
|
— |
|
Deferred
financing costs, net |
|
3,706 |
|
|
3,068 |
|
Other
assets |
|
15,822 |
|
|
16,295 |
|
Total
non-current assets |
|
1,619,727 |
|
|
1,560,855 |
|
Total
assets |
|
$ |
1,703,826 |
|
|
$ |
1,643,410 |
|
|
|
|
|
|
Liabilities and
shareholders’ equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Bank
loans, net |
|
$ |
60,310 |
|
|
$ |
46,993 |
|
Capital
lease obligations |
|
4,594 |
|
|
1,144 |
|
Senior
Notes, net |
|
73,253 |
|
|
— |
|
Accounts
payable and accrued expenses |
|
14,457 |
|
|
10,453 |
|
Total current
liabilities |
|
152,614 |
|
|
58,590 |
|
Non-current
liabilities |
|
|
|
|
Bank
loans, net |
|
621,179 |
|
|
576,967 |
|
Capital
lease obligations |
|
69,229 |
|
|
17,747 |
|
Senior
Notes, net |
|
— |
|
|
72,726 |
|
Total non-current
liabilities |
|
690,408 |
|
|
667,440 |
|
Total liabilities |
|
843,022 |
|
|
726,030 |
|
Shareholders’
equity |
|
|
|
|
Preferred shares, $0.01 par value; 50,000,000 shares authorized; no
shares issued or outstanding |
|
— |
|
|
— |
|
Common shares, $0.01 par value per share; authorized 212,500,000
shares; issued and outstanding 71,217,258 and 74,902,364 shares as
of December 31, 2018 and December 31, 2017, respectively |
|
796 |
|
|
762 |
|
Paid-in
capital |
|
1,747,648 |
|
|
1,745,844 |
|
Common
shares held in treasury, at cost; 8,567,846 and 1,465,448 shares at
December 31, 2018 and December 31, 2017, respectively |
|
(56,720 |
) |
|
(11,004 |
) |
Accumulated deficit |
|
(830,920 |
) |
|
(818,222 |
) |
Total shareholders’
equity |
|
860,804 |
|
|
917,380 |
|
Total
liabilities and shareholders’ equity |
|
$ |
1,703,826 |
|
|
$ |
1,643,410 |
|
Scorpio Bulkers Inc. and
SubsidiariesStatements of Cash Flows
(unaudited)(Amounts in thousands)
|
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
Operating
activities |
|
|
|
|
Net loss |
|
$ |
(12,698 |
) |
|
$ |
(59,726 |
) |
Adjustment to
reconcile net loss to net cash used by |
|
|
|
|
operating activities: |
|
|
|
|
Restricted share amortization |
|
7,881 |
|
|
12,645 |
|
Vessel
depreciation |
|
56,607 |
|
|
48,510 |
|
Amortization of deferred financing costs |
|
9,582 |
|
|
6,085 |
|
Write-off
of deferred financing costs |
|
— |
|
|
470 |
|
Loss /
write-down on assets held for sale |
|
— |
|
|
16,471 |
|
Net
unrealized losses on investments |
|
7,719 |
|
|
— |
|
Changes in
operating assets and liabilities: |
|
|
|
|
Decrease
in accounts receivable |
|
(2,356 |
) |
|
(882 |
) |
Increase
(decrease) in prepaid expenses and other assets |
|
250 |
|
|
(4,032 |
) |
Increase
in accounts payable and accrued expenses |
|
4,002 |
|
|
41 |
|
Net cash
provided by operating activities |
|
70,987 |
|
|
19,582 |
|
Investing
activities |
|
|
|
|
Equity
investment |
|
(100,000 |
) |
|
— |
|
Proceeds
from sale of assets held for sale |
|
— |
|
|
44,340 |
|
Scrubber
payments |
|
(1,235 |
) |
|
— |
|
Payments
for vessels and vessels under construction |
|
(21,799 |
) |
|
(217,033 |
) |
Net cash used
in investing activities |
|
(123,034 |
) |
|
(172,693 |
) |
Financing
activities |
|
|
|
|
Proceeds
from issuance of long-term debt |
|
469,225 |
|
|
287,554 |
|
Repayments of long-term debt |
|
(358,858 |
) |
|
(153,003 |
) |
Common
shares repurchased |
|
(45,716 |
) |
|
(11,004 |
) |
Dividend
paid |
|
(6,042 |
) |
|
(1,509 |
) |
Debt
issue costs paid |
|
(7,602 |
) |
|
(2,126 |
) |
Net cash
provided by financing activities |
|
51,007 |
|
|
119,912 |
|
Decrease in cash and
cash equivalents |
|
(1,040 |
) |
|
(33,199 |
) |
Cash at cash
equivalents, beginning of period |
|
68,535 |
|
|
101,734 |
|
Cash and cash
equivalents, end of period |
|
$ |
67,495 |
|
|
$ |
68,535 |
|
Scorpio Bulkers Inc. and
SubsidiariesOther Operating Data
(unaudited)
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Time charter equivalent
revenue ($000’s) (1): |
|
|
|
|
|
|
|
|
Vessel
revenue |
|
$ |
65,171 |
|
|
$ |
51,127 |
|
|
$ |
242,502 |
|
|
$ |
162,205 |
|
Voyage
expenses |
|
(177 |
) |
|
(97 |
) |
|
(549 |
) |
|
(429 |
) |
Time
charter equivalent revenue |
|
$ |
64,994 |
|
|
$ |
51,030 |
|
|
$ |
241,953 |
|
|
$ |
161,776 |
|
Time charter equivalent
revenue attributable to: |
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
22,640 |
|
|
$ |
20,811 |
|
|
$ |
87,086 |
|
|
$ |
67,525 |
|
Ultramax |
|
42,354 |
|
|
30,219 |
|
|
154,867 |
|
|
94,251 |
|
|
|
$ |
64,994 |
|
|
$ |
51,030 |
|
|
$ |
241,953 |
|
|
$ |
161,776 |
|
Revenue days: |
|
|
|
|
|
|
|
|
Kamsarmax |
|
1,722 |
|
|
1,651 |
|
|
6,634 |
|
|
6,718 |
|
Ultramax |
|
3,468 |
|
|
2,776 |
|
|
13,795 |
|
|
10,291 |
|
Combined |
|
5,190 |
|
|
4,427 |
|
|
20,429 |
|
|
17,009 |
|
TCE per revenue day
(1): |
|
|
|
|
|
|
|
|
Kamsarmax |
|
$ |
13,148 |
|
|
$ |
12,605 |
|
|
$ |
13,127 |
|
|
$ |
10,051 |
|
Ultramax |
|
$ |
12,213 |
|
|
$ |
10,886 |
|
|
$ |
11,226 |
|
|
$ |
9,159 |
|
Combined |
|
$ |
12,523 |
|
|
$ |
11,527 |
|
|
$ |
11,844 |
|
|
$ |
9,511 |
|
(1) The Company defines Time Charter Equivalent (TCE) revenue as
vessel revenues less voyage expenses. Such TCE revenue,
divided by the number of the Company’s available days during the
period, or revenue days, is TCE per revenue day, which is
consistent with industry standards. TCE per revenue day is a
common shipping industry performance measure used primarily to
compare daily earnings generated by vessels on time charters with
daily earnings generated by vessels on voyage charters, because
charter hire rates for vessels on voyage charters are generally not
expressed in per-day amounts while charter hire rates for vessels
on time charters generally are expressed in such amounts.
The Company reports TCE revenue, a non-GAAP financial measure,
because (i) the Company believes it provides additional
meaningful information in conjunction with vessel revenues and
voyage expenses, the most directly comparable U.S.-GAAP measure,
(ii) it assists the Company’s management in making decisions
regarding the deployment and use of its vessels and in evaluating
their financial performance, (iii) it is a standard shipping
industry performance measure used primarily to compare
period-to-period changes in a shipping company’s performance
irrespective of 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, and (iv) the
Company believes that it presents useful information to investors.
See Non-GAAP Financial Measures.
Fleet List as of January 25,
2019
Vessel Name |
|
Year Built |
|
DWT |
|
Vessel Type |
SBI Samba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
SBI Rumba |
|
2015 |
|
84,000 |
|
|
Kamsarmax |
SBI Capoeira |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Electra |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Carioca |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Conga |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Flamenco |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Bolero |
|
2015 |
|
82,000 |
|
|
Kamsarmax |
SBI Sousta |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Rock |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Lambada |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Reggae |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Zumba |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Macarena |
|
2016 |
|
82,000 |
|
|
Kamsarmax |
SBI Parapara |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Mazurka |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Swing |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Jive |
|
2017 |
|
82,000 |
|
|
Kamsarmax |
SBI Lynx |
|
2018 |
|
82,000 |
|
|
Kamsarmax |
Total Kamsarmax |
|
|
|
1,562,000 |
|
|
|
|
|
|
|
|
|
|
SBI Antares |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Athena |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Bravo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Leo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Echo |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Lyra |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Tango |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Maia |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Hydra |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Subaru |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Pegasus |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Ursa |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Thalia |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Cronos |
|
2015 |
|
61,000 |
|
|
Ultramax |
SBI Orion |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Achilles |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Hercules |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Perseus |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Hermes |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Zeus |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Hera |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Hyperion |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Tethys |
|
2016 |
|
61,000 |
|
|
Ultramax |
SBI Phoebe |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Poseidon |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Apollo |
|
2016 |
|
60,200 |
|
|
Ultramax |
SBI Samson |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Phoenix |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Gemini |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Libra |
|
2017 |
|
64,000 |
|
|
Ultramax |
SBI Puma |
|
2014 |
|
64,000 |
|
|
Ultramax |
SBI Jaguar |
|
2014 |
|
64,000 |
|
|
Ultramax |
SBI Cougar |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Aries |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Taurus |
|
2015 |
|
64,000 |
|
|
Ultramax |
SBI Pisces |
|
2016 |
|
64,000 |
|
|
Ultramax |
SBI Virgo |
|
2017 |
|
64,000 |
|
|
Ultramax |
Total Ultramax |
|
|
|
2,307,800 |
|
|
|
Total Owned or Finance Leased Vessels DWT |
|
3,869,800 |
|
|
|
Time chartered-in vessels
The Company currently time
charters-in one Ultramax vessel. The terms of the
contract are summarized as follows:
Vessel Type |
|
Year Built |
|
DWT |
|
Country of Build |
|
Daily Base Rate |
|
Earliest Expiry |
Ultramax |
|
2017 |
|
62,100 |
|
|
Japan |
|
$ |
10,125 |
|
|
30-Sep-19 |
|
(1) |
Total TC DWT |
|
|
|
62,100 |
|
|
|
|
|
|
|
|
|
(1) This vessel is time chartered-in for 22 to 24 months at the
Company’s option at $10,125 per day. The Company has the option to
extend this time charter for one year at $10,885 per day. The
vessel was delivered to the Company in September 2017.
Conference Call on Results:
A conference call to discuss the Company’s results will be held
today, January 28, 2019, at 11:00 AM Eastern Standard Time / 5:00
PM Central European Time. Those wishing to listen to the call
should dial 1 (866) 219-5268 (U.S.) or 1 (703) 736-7424
(International) at least 10 minutes prior to the start of the call
to ensure connection. The conference participant passcode is
5951238.
There will also be a simultaneous live webcast over the
internet, through the Scorpio Bulkers Inc. website
www.scorpiobulkers.com. Participants to the live webcast
should register on the website approximately 10 minutes prior to
the start of the webcast.
Webcast URL: https://edge.media-server.com/m6/p/cv278uhs
About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine
transportation of dry bulk commodities. Scorpio Bulkers Inc.
has an operating fleet of 57 vessels consisting of 56 wholly-owned
or finance leased dry bulk vessels (including 19 Kamsarmax vessels
and 37 Ultramax vessels), and one
time chartered-in Ultramax vessel. The Company’s owned
and finance leased fleet has a total carrying capacity of
approximately 3.9 million dwt and all of the Company’s owned
vessels have carrying capacities of greater than 60,000 dwt.
Additional information about the Company is available on the
Company’s website www.scorpiobulkers.com, which is not a part
of this press release.
Non-GAAP Financial Measures
To supplement the Company’s financial
information presented in accordance with accounting principles
generally accepted in the U.S., (“GAAP”), management uses certain
“non-GAAP financial measures” as such term is defined in Regulation
G promulgated by the SEC. Generally, a non-GAAP financial measure
is a numerical measure of a company’s operating performance,
financial position or cash flows that excludes or includes amounts
that are included in, or excluded from, the most directly
comparable measure calculated and presented in accordance with
GAAP. Management believes the presentation of these measures
provides investors with greater transparency and supplemental data
relating to the Company’s financial condition and results of
operations, and therefore a more complete understanding of factors
affecting its business than GAAP measures alone. In addition,
management believes the presentation of these matters is useful to
investors for period-to-period comparison of results as the items
may reflect certain unique and/or non-operating items such as asset
sales, write-offs, contract termination costs or items outside of
management’s control.
Earnings before interest, taxes, depreciation
and amortization (“EBITDA”), adjusted net loss and related per
share amounts, as well as adjusted EBITDA and TCE Revenue are
non-GAAP performance measures that the Company believes provide
investors with a means of evaluating and understanding how the
Company’s management evaluates the Company’s operating
performance. These non-GAAP financial measures should not be
considered in isolation from, as substitutes for, nor superior to
financial measures prepared in accordance with GAAP. Please
see below for reconciliations of EBITDA, adjusted net loss and
related per share amounts, and adjusted EBITDA. Please see
“Other Operating Data” for a reconciliation of TCE revenue.
EBITDA (unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
In thousands |
2018 |
|
2017 |
|
2018 |
|
2017 |
Net loss |
$ |
(7,373 |
) |
|
(1,068 |
) |
|
$ |
(12,698 |
) |
|
$ |
(59,726 |
) |
Add Back: |
|
|
|
|
|
|
|
Net
interest expense |
10,907 |
|
|
7,107 |
|
|
39,180 |
|
|
27,307 |
|
Depreciation and amortization (1) |
19,769 |
|
|
16,903 |
|
|
74,070 |
|
|
67,710 |
|
EBITDA |
$ |
23,303 |
|
|
22,942 |
|
|
$ |
100,552 |
|
|
$ |
35,291 |
|
(1) Includes depreciation, amortization of deferred financing
costs and restricted share amortization.
Adjusted net loss (unaudited)
|
|
Year Ended December 31, |
In thousands, except
per share data |
|
2017 |
|
|
Amount |
|
Per share |
Net loss |
|
$ |
(59,726 |
) |
|
$ |
(0.83 |
) |
Adjustments: |
|
|
|
|
Loss /
write down on assets held for sale |
|
17,701 |
|
|
0.25 |
|
Write
down of deferred financing cost |
|
470 |
|
|
0.01 |
|
Total adjustments |
|
$ |
18,171 |
|
|
$ |
0.26 |
|
Adjusted net
loss |
|
$ |
(41,555 |
) |
|
$ |
(0.57 |
) |
Adjusted EBITDA (unaudited)
|
|
Year Ended December 31, |
In thousands |
|
2017 |
Net loss |
|
$ |
(59,726 |
) |
Impact of
adjustments |
|
18,171 |
|
Adjusted net
loss |
|
(41,555 |
) |
Add Back: |
|
|
Net
interest expense |
|
27,307 |
|
Depreciation and amortization (1) |
|
67,710 |
|
Adjusted
EBITDA |
|
$ |
53,462 |
|
(1) Includes depreciation, amortization of deferred
financing costs and restricted share amortization.
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. 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.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. 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 this safe harbor legislation. The
words “believe,” “anticipate,” “intend,” “estimate,” “forecast,”
“project,” “plan,” “potential,” “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
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 the failure of counterparties to fully perform
their contracts with us, the strength of world economies and
currencies, general market conditions, including fluctuations in
charter rates and vessel values, changes in demand for dry bulk
vessel capacity, changes in our operating expenses, including
bunker prices, drydocking and insurance costs, the market for our
vessels, availability of financing and refinancing, charter
counterparty performance, ability to obtain financing and comply
with covenants in such financing arrangements, changes in
governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation,
general domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires and other
factors. Please see our filings with the Securities and
Exchange Commission for a more complete discussion of these and
other risks and uncertainties.
Contact:
Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)
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