5/10/2016 6:00:34 PMEagle Bulk Shipping Inc. Reports First Quarter 2016 Results

STAMFORD, Conn., May 10, 2016 /PRNewswire/ -- Eagle Bulk Shipping Inc. (Nasdaq: EGLE) today announced its results for the first quarter ended March 31, 2016. 

First Quarter Highlights:

  • Net reported loss of $39.3 million, or $1.04 per share, compared to a net loss of $20.7 million, or $0.55 per share, for the comparable quarter in 2015.
  • Adjusted net loss of $27.5 million, or $0.73 per share, which excludes one-time refinancing expenses of $5.6 million and non-cash vessel impairment of $6.2 million.
  • Net revenues of $21.3 million, compared to $26.3 million for the comparable quarter in 2015.
  • Fleet utilization rate of 98.4%.
  • As previously reported, completion of a comprehensive balance sheet recapitalization that provides Eagle Bulk with approximately $105 million in incremental liquidity and enhanced financial flexibility.

Events Subsequent to the Close of the First Quarter Include:

  • The sale of the vessel Peregrine for $2.7 million net after brokerage commissions.
  • Agreement to sell two additional vessels, MV Harrier and MV Falcon, for $6.5 million net, after brokerage commissions.

Gary Vogel, Eagle Bulk's CEO, commented, "In a quarter which saw dry bulk indices hit all-time lows in February – coupled with the uncertainty and negative business impact of a protracted forbearance with certain of our lenders - Eagle Bulk acted decisively to significantly enhance our liquidity position and improve our long-term financial flexibility through the execution of a comprehensive balance sheet restructuring.  In addition, as part of this transaction, we formed a new corporate structure to facilitate the Company's ability to capitalize on market opportunities going forward.

"In this regard, and in line with our objective to become the premier Supramax owner/operator, we continued to build out the Company's operating platform through the recruitment of top-tier talent in both chartering and operations. We have also focused on technical enhancements, which includes bringing substantially all vessels under in-house management to help actively pursue operational excellence and cost efficiencies over the long-term."

Results of Operations for the three-month period ended March 31, 2016 and 2015

For the first quarter of 2016, the Company reported a net loss of $39,278,670 or $1.04 per share, based on a weighted average of 37,829,257 diluted shares outstanding. In the comparable first quarter of 2015, the Company reported a net loss of $20,667,064 or $0.55 per share, based on a weighted average of 37,527,010 diluted shares outstanding.

Net revenues in the quarter ended March 31, 2016 were $21,278,288 compared with $26,331,166 recorded in the comparable quarter in 2015. The decrease in revenue is attributable to lower time charter hire rates in the first quarter of 2016.

Total operating expenses for the quarter ended March 31, 2016 were $57,742,766 compared with $43,839,019 recorded in the first quarter of 2015. The increase in operating expenses was primarily due to increase in voyage expenses, refinancing expenses and vessel impairment.

Liquidity and Capital Resources

Net cash used in operating activities during the three-month period ended March 31, 2016 was $19,494,868, compared with net cash used in operating activities of $9,636,748 during the corresponding three-month period ended March 31, 2015. The increase is primarily due to lower charter rates and professional fees with regard to the refinancing transaction.  

Net cash used in investing activities during the three-month period ended March 31, 2016, was $508,792, compared with $742,014 during the corresponding three-month period ended March 31, 2015.

Net cash provided by financing activities during the three-month period ended March 31, 2016 was $11,876,073 compared to net cash used in financing activities of $5,191,756 during the corresponding three-month period ended March 31, 2015. The increase in financing activities is due to $60,000,000 received from our Second Lien Loan facility offset by repayment of $15,625,000 of our term loan and $30,158,500 of our revolver loan. The Company also paid $2,340,427 in deferred financing costs.

As of March 31, 2016, our cash balance was $16,768,574, compared to a cash balance of $24,896,161 at December 31, 2015.

As of March 31, 2016 our total availability in the revolving credit facility under the First Lien Facility was $40,158,500.

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.

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 drydocking 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 drydocked 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 drydocking for those vessels. In the three months ended March 31, 2016, three of our vessels were drydocked, and we incurred $1,276,178 in drydocking related costs. In the three months ended March 31, 2015, five of our vessels were drydocked, three other vessels were still in drydock as of March 31, 2015 and we incurred $3,060,384 in drydocking related costs. The following table represents certain information about the estimated costs for anticipated vessel drydockings in the next four quarters, along with the anticipated off-hire days:

 

Quarter Ending


Off-hire Days(1)



Projected Costs(2)


June 30, 2016



22



$0.65 million


September 30, 2016



66



$1.95 million


December 31, 2016



22



$0.65 million


March 31, 2017



none



none
















(1)

Actual duration of drydocking will vary based on the condition of the vessel, yard schedules and other factors.

(2)

Actual costs will vary based on various factors, including where the drydockings are actually performed.

 

Summary Consolidated Financial and Other Data:
The following table summarizes the Company's selected consolidated financial and other data for the periods indicated below.

 

CONSOLIDATED STATEMENT OF OPERATIONS







Three Months Ended

March 31, 2016



Three Months Ended

March 31, 2015











Revenues, net


$

21,278,288



$

26,331,166











Voyage expenses



9,244,047




5,182,175


Vessel expenses



20,480,635




20,448,706


Charter hire expenses



1,488,518




1,215,964


Depreciation and amortization



9,396,701




10,557,171


General and administrative expenses



5,331,343




6,435,003


Refinancing expenses



5,634,260




-


Vessel impairment



6,167,262




-


Total operating expenses



57,742,766




43,839,019


Operating loss



(36,464,478)




(17,507,853)











Interest expense



2,817,646




3,162,166


Interest income



(3,454)




(2,955)


Total other expense, net



2,814,192




3,159,211


Net loss


$

(39,278,670)



$

(20,667,064)











Weighted average shares outstanding:









Basic



37,829,257




37,527,010


Diluted



37,829,257




37,527,010











Per share amounts:









Basic net loss


$

(1.04)



$

(0.55)


Diluted net loss


$

(1.04)



$

(0.55)


 

 

Fleet Operating Data











Three Months Ended



Three Months Ended




March 31, 2016



March 31, 2015


Ownership Days



4,004




4,050


Chartered in Days



151




90


Available Days



4,096




4,021


Operating Days



4.030




3,904


Fleet Utilization (%)



98.4%




97.1%


 

 

CONSOLIDATED BALANCE SHEETS




March 31, 2016



December 31, 2015


ASSETS:









Current assets:









Cash and cash equivalents


$

16,768,574



$

24,896,161


Accounts receivable



7,096,206




7,076,528


Prepaid expenses



2,633,930




3,232,763


Inventories



5,596,345




5,574,406


Other assets



112,486




245,569


Total current assets



32,207,541




41,025,427


Noncurrent assets:









Vessels and vessel improvements, at cost, net of accumulated depreciation of $58,027,166 and $49,148,080, respectively



719,026,871




733,960,731


Other fixed assets, net of accumulated amortization of $183,670 and $159,827, respectively



592,970




220,509


Restricted cash



141,161




141,161


Deferred drydock costs



11,928,415




11,146,009


Other assets



117,113




109,287


Total noncurrent assets



731,806,530




745,577,697


Total assets


$

764,014,071



$

786,603,124


LIABILITIES & STOCKHOLDERS' EQUITY









Current liabilities:









Accounts payable


$

11,411,500



$

8,216,473


Accrued interest



327,283




401,232


Other accrued liabilities



10,798,848




10,827,075


Fair value below contract value of time charters acquired



820,313




1,283,926


Unearned charter hire revenue



2,144,022




1,560,402


Current portion of long-term debt



-




15,625,000


Total current liabilities



25,501,966




37,914,108


Noncurrent liabilities:









First Lien Facility, net of debt issuance costs



193,591,587




225,577,491


Second Lien Facility, net of debt issuance costs



59,795,481




-


Other liabilities



720,915




672,941


Fair value below contract value of time charters acquired



4,511,717




4,094,122


Total noncurrent liabilities



258,619,700




230,344,554


Total liabilities



284,121,666




268,258,662


Commitments and contingencies









Stockholders' equity:









Common stock, $.01 par value, 150,000,000 shares authorized, 45,091,578 and 37,666,059 shares issued and outstanding, respectively



450,916




376,661


Additional paid-in capital



678,565,852




677,813,494


Accumulated deficit



(199,124,363)




(159,845,693)


Total stockholders' equity



479,892,405




518,344,462


Total liabilities and stockholders' equity


$

764,014,071



$

786,603,124


 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS







Three Months Ended

 

 




March 31, 2016



March 31, 2015


Cash flows from operating activities:









Net loss


$

(39,278,670)



$

(20,667,064)


Adjustments to reconcile net loss to net cash used in operating activities:









Depreciation



8,902,929




10,271,775


Amortization of deferred drydocking costs



493,772




285,396


 Amortization of debt issuance costs



308,504




724,425


Amortization of fair value below contract value of time charter acquired



(46,018)




(335,330)


Impairment of Vessels



6,167,262




-


Non-cash compensation expense



826,613




1,884,452


Drydocking expenditures



(1,276,178)




(3,060,384)


Changes in operating assets and liabilities:









Accounts receivable



(19,678)




3,833,086


Other assets



125,257




947,830


Prepaid expenses



598,833




715,445


 

Inventories



(21,939)




(672,954)


Accounts payable



3,195,027




(3,860,279)


Accrued interest



(73,949)




34,882


Accrued expenses



19,747




1,138,665


Unearned revenue



583,620




(876,693)


 

Net cash used in operating activities



(19,494,868)




(9,636,748)


Cash flows from investing activities:









 

Vessel Improvements



(112,488)




(742,014)


Purchase of Other Fixed assets



(396,304)




-


Net cash used in investing activities



(508,792)




(742,014)











Cash flows from financing activities:









Proceeds from Second Lien Facility



60,000,000




-


Repayment of Term Loan



(15,625,000)




(3,906,250)


Repayment of Revolver Loan



(30,158,500)




-


Cash used to settle net share equity awards



-




(1,285,506)


Deferred financing costs



(2,340,427)




-


Net cash provided by / (used in) financing activities



11,876,073




(5,191,756)


Net decrease in cash and cash equivalents



(8,127,587)




(15,570,518)


Cash and cash equivalents at beginning of period



24,896,161




39,975,287


Cash and cash equivalents at end of period


$

16,768,574



$

24,404,769


 

We have employed all of our vessels in our operating fleet on time and voyage charters. The following table represents certain information about our revenue earning charters with respect to our operating fleet as of March 31, 2016: 

Vessel

Year

Built


Dwt



Charter Expiration (1)


Daily Charter Hire Rate














Avocet

2010



53,462



May 2016


$

5,000














Bittern

2009



57,809



Apr 2016


$

Voyage (1)














Canary

2009



57,809



May 2016


$

2,300














Cardinal

2004



55,362



Apr 2016


$

1,700  (1)














Condor

2001



50,296



Apr 2016


$

3,500 (1)














Crane

2010



57,809



Jun 2016


$

1,600 (2)














Crested Eagle

2009



55,989



May 2016


$

Voyage














Crowned Eagle

2008



55,940



Apr 2016


$

Voyage (1)














Egret Bulker

2010



57,809



Unemployed


$

(4)














Falcon

2001



50,296



May 2016


$

8,250














Gannet Bulker

2010



57,809



Apr 2016


$

2,300 (1)














Golden Eagle

2010



55,989



Apr 2016


$

4,000 (1)














Goldeneye

2002



52,421



Apr 2016


$

2,000 (1)














Grebe Bulker

2010



57,809



Apr 2016


$

450 (1)














Harrier

2001



50,296



May 2016


$

7,250














Hawk I

2001



50,296



Jun 2016


$

7,250














Ibis Bulker

2010



57,775



Apr 2016


$

5,500 (1)














Imperial Eagle

2010



55,989



Unemployed



(4)














Jaeger

2004



52,248



Apr 2016


$

3,000 (1)














Jay

2010



57,802



Apr 2016


$

4,000 (1)














Kestrel I

2004



50,326



Jul 2016


$

Voyage














Kingfisher

2010



57,776



May 2016


$

Voyage














Kittiwake

2002



53,146



Apr 2016


$

5,500 (1)














Martin

2010



57,809



May 2016


$

7,250














Merlin

2001



50,296



Apr 2016


$

4,000 (1)














Nighthawk

2011



57,809



Apr 2016


$

2,900 (1)














Oriole

2011



57,809



Apr 2016


$

Voyage (1)














Osprey I

2002



50,206



May 2016


$

4,300














Owl

2011



57,809



Apr 2016


$

4,700 (1)














Peregrine(5)

2001



50,913



Apr 2016


$

Voyage (1)














Petrel Bulker

2011



57,809



Apr 2016


$

6,950 (1)














Puffin Bulker

2011



57,809



May 2016


$

1,500 (3)














Redwing

2007



53,411



May 2016


$

3,500














Roadrunner Bulker

2011



57,809



Apr 2016


$

5,350 (1)














Sandpiper Bulker

2011



57,809



Apr 2016


$

3,800 (1)














Shrike

2003



53,343



Apr 2016


$

5,000 (1)














Skua

2003



53,350



Apr 2016


$

Voyage (1)














Sparrow

2000



48,225



Unemployed



(4)














Stellar Eagle

2009



55,989



Apr 2016


$

3,800 (1)














Tern

2003



50,200



Apr 2016


$

3,350 (1)














Thrasher

2010



53,360



Apr 2016


$

6,500 (1)














Thrush

2011



53,297



Apr 2016


$

3,200 (1)














Woodstar

2008



53,390



Apr 2016


$

4,000 (1)














Wren

2008



53,349



May 2016


$

Voyage


 


(1)

Upon conclusion of the previous charter the vessel will commence a short term charter for up to six months or a spot voyage.


(2)

The vessel is contracted to continue the existing time charter at a daily charter rate of $5,250 after May 24, 2016.


(3)

The vessel is contracted to continue the existing time charter at a daily charter rate of $4,500 after May 5, 2016.


(4)

The vessels are subsequently contracted to perform a short term time charters. MV Egret Bulker is contracted to perform a time charter at a daily charter rate of $5,000; MV Sparrow is contracted to perform a time charter at a daily charter rate of $8,000 and MV Imperial Eagle is contracted to perform a voyage charter.


(5)

On April 26, 2016, the Company sold the vessel Peregrine for $2.7 million after brokerage commissions payable to third party and expects to record a net loss of approximately $150,000 in the second quarter of 2016. The Peregrine was not available for delivery prior to April 26, 2016. 

 

 

Glossary of Terms:

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.

About Eagle Bulk Shipping Inc.

Eagle Bulk Shipping Inc., is a Marshall Islands corporation headquartered in Stamford, Connecticut. We own one of the largest fleets of Supramax dry bulk vessels in the world. Supramax dry bulk are vessels which are constructed with on-board cranes, ranging in size from approximately 50,000 to 65,000 dwt and are considered a sub-category of the Handymax segment, typically defined as 40,000-65,000 dwt. We transport 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.

Forward-Looking Statements

Matters discussed in this release may constitute forward-looking statements. 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, many of which are based, in turn, upon further assumptions, including without limitation, management's 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 drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs, or actions taken by regulatory authorities, 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.

Visit our website at www.eagleships.com

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/eagle-bulk-shipping-inc-reports-first-quarter-2016-results-300266396.html

SOURCE Eagle Bulk Shipping Inc.

Company Contact: Adir Katzav, Chief Financial Officer, Eagle Bulk Shipping Inc., Tel. +1 203-276-8100; or Investor Relations / Media: Jonathan Morgan, Perry Street Communications, New York, Tel. +1 212-741-0014

Back To Press Releases