STAMFORD, Conn., Nov. 8, 2016 /PRNewswire/ — Eagle Bulk Shipping Inc. (NASDAQ: EGLE) today announced its results for the third quarter ended September 30, 2016.
Third Quarter Highlights:
Gary Vogel, Eagle Bulk’s CEO, commented, “Amid tentative signs of a recovery in charter rates, Eagle Bulk’s third quarter results reflect continued progress in building out our Owner-Operator model. This is evident across several key metrics, including a notable increase in voyage business and chartered-in days – both of which contributed to a net revenue increase despite operating four fewer vessels compared to the same period a year ago. At the same time, we achieved tangible cost savings through the continued development of our in-house technical management. We also continued to develop our organization by adding top-tier management in key positions, highlighted by the addition of Frank De Costanzo as Chief Financial Officer.
“Looking ahead, we believe that our strengthened balance sheet, now inclusive of the $88 million in growth capital raised during the quarter, will enable us to take advantage of market opportunities, such as the recently-announced acquisition of a 2016 built NACKS-61 Ultramax vessel.”
Results of Operations for the three-month period ended September 30, 2016 and 2015
For the third quarter of 2016, the Company reported a net loss of $19,359,044 or $0.52 loss per share, based on a weighted average of 37,031,096 diluted shares outstanding. In the comparable third quarter of 2015, the Company reported a net loss of $20,376,620 or $10.83 Net loss per share, based on a weighted average of 1,881,968 diluted shares outstanding.
Net revenues in the quarter ended September 30, 2016 were $35,788,181 compared with $29,127,482 recorded in the comparable quarter in 2015. The increase in revenue is attributable to increased number of freight voyages as well as increased available days due to chartered in vessels.
Total operating expenses for the quarter ended September 30, 2016 were $47,512,409 compared with $46,135,325 recorded in the third quarter of 2015. The increase is primarily due to increase in voyage expenses and charter hire expenses offset by savings in vessel operating expenses.
Liquidity and Capital Resources
Net cash used by operating activities during the nine-month period ended September 30, 2016 was $40,092,760, compared with net cash used by operating activities of $29,809,434 during the corresponding nine-month period ended September 30, 2015. The increase in cash used by operating activities is primarily due to lower charter rates.
Net cash provided by investing activities during the nine-month period ended September 30, 2016 was $12,411,444, compared with net cash provided by investing activities of $9,621,753, during the corresponding nine-month period ended September 30, 2015. The increase in cash provided by investing activities is mainly attributable to the sale of four vessels in 2016 compared to one vessel in the comparable period in 2015 offset by the sale of KLC investments in 2015.
Net cash provided by financing activities during the nine-month period ended September 30, 2016 was $ 101,353,950, compared with $5,495,744 during the corresponding nine-month period ended September 30, 2015. The increase in cash from financing activities is due to net proceeds from the private common stock placements closed on August 10, 2016 of $85,700,535, $60,000,000 received from our Second Lien Loan facility and $10,158,500 from the revolver under the First Lien Facility offset by repayment of $21,276,000 of our term loan and $30,158,500 of our revolver each under the First Lien Facility. The Company also paid $3,067,647 in deferred financing costs.
As of September 30, 2016, our cash balance was $98,568,795, compared to a cash balance of $24,896,161 at December 31, 2015. Also recorded in Restricted cash is an amount of $74,917, which collateralizes letters of credit relating to our office lease.
At September 30, 2016, the Company’s debt consisted of $204,099,000 in term loans, net of $5,184,565 debt discount and debt issuance costs under the First Lien Facility and $60,000,000 under the Second Lien Facility net of $16,719,722 debt discount and debt issuance costs.
As of September 30, 2016, our total availability in the revolving credit facility under the First Lien Facility was $30,000,000.
Capital Expenditures and Drydocking
Our capital expenditures relate to the purchase of vessels and capital improvements to our vessels which are expected to enhance the revenue earning capabilities and safety of these vessels.
On September 30, 2016, the Company, through a newly formed subsidiary, Eagle Bulk Shipco LLC (‘Eagle Shipco”), signed a memorandum of agreement to acquire a 2016 NACKS-built Ultramax 61,000 dwt for $18.85 million. The Company is expected to take delivery of the vessel in the fourth quarter of 2016. Eagle Bulk Shipco, is not one of the guarantors under the First Lien Facility or the Second Lien Facility.
In addition to acquisitions that we may undertake in future periods, the other major capital expenditures include funding the Company’s program of regularly scheduled dry-docking necessary to comply with international shipping standards and environmental laws and regulations. Although the Company has some flexibility regarding the timing of its dry-docking, the costs are relatively predictable. The Company anticipates that vessels are to be dry docked every five years for vessels younger than 15 years and every two and a half years for vessels older than 15 years, accordingly, these expenses are deferred and amortized over that period. Funding of these requirements is anticipated to be met with cash from operations. We anticipate that this process of recertification will require us to reposition these vessels from a discharge port to shipyard facilities, which will reduce our available days and operating days during that period.
Drydocking costs incurred are deferred and amortized to expense on a straight-line basis over the period through the date of the next scheduled dry-docking for those vessels. Eight vessels completed dry-docking in the nine months ended September 30, 2016, with one vessel still in dry-docking as of September 30, 2016 and we incurred $3,715,179 in dry-docking related costs. Seventeen vessels completed dry-docking in the nine months ended September 30, 2015 and we incurred $9,680,582 in dry-docking related costs.
The following table represents certain information about the estimated costs for anticipated vessel dry dockings in the next four quarters, along with the anticipated off-hire days:
The following table summarizes the Company’s selected consolidated financial and other data for the periods indicated below.
*Adjusted to give effect for the 1 for 20 reverse stock split that became effective at the open of trading on August 5, 2016.
Fleet Operating Data
*Adjusted to give effect for the 1 for 20 reverse stock split that became effective at the open of trading on August 5, 2016.
Ownership days: The Company defines ownership days as the aggregate number of days in a period during which each vessel in its fleet has been owned. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that is recorded during a period.
Chartered-in under operating lease days: The Company defines chartered-in under operating lease days as the aggregate number of days in a period during which the Company chartered-in vessels.
Available days: The Company defines available days as the number of ownership days less the aggregate number of days that its vessels are off-hire due to vessel familiarization upon acquisition, scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
Operating days: The Company defines operating days as the number of its available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
Fleet utilization: The Company calculates fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. Our fleet continues to perform at very high utilization rates.
As previously announced, members of Eagle Bulk’s senior management team will host a teleconference and webcast at 8:30 a.m. ET on Wednesday, November 9, 2016, to discuss the results.
To participate in the teleconference, investors and analysts are invited to call 844-282-4411 in the U.S., or 512-900-2336 outside of the U.S., and reference participant code 10677245. A simultaneous webcast of the call, including a slide presentation for interested investors and others, may be accessed by visiting http://www.eagleships.com.
A replay will be available following the call from 11:30 PM ET on November 9, 2016 until 11:30 PM ET on November 16, 2016. To access the replay, call 855-859-2056 in the U.S., or 404-537-3406 outside of the U.S., and reference passcode 10677245.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in Stamford, Connecticut. The Company owns one of the largest fleets of Supramax dry bulk vessels in the world, which are constructed with on-board cranes and range in size from approximately 50,000 to 65,000 dwt. The Company transports a broad range of major and minor bulk cargoes, including but not limited to coal, grain, ore, pet coke, cement and fertilizer, along worldwide shipping routes.
We intend to use our website, www.eagleships.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Investor Alerts” link in the Investor Relations section of our website and submit your email address. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.
Matters discussed in this release may constitute forward-looking statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Acts. Forward-looking statements reflect 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. These statements may include words such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, examination of historical operating trends, data contained in our records and other data available from third parties. Although Eagle Bulk Shipping Inc. 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, Eagle Bulk Shipping Inc. 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 strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in vessel operating expenses, including dry- docking and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to perform their obligations under sales agreements, charter contracts, and other agreements on a timely basis, potential liability from 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 Eagle Bulk Shipping Inc. with the US Securities and Exchange Commission.
SOURCE Eagle Bulk Shipping, Inc.