11/8/2016 4:30:30 PMEagle Bulk Shipping Inc. Reports Third Quarter 2016 Results

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:

  • Net loss of $19.4 million, or $0.52 net loss per share, compared to a net loss of $20.4 million, or a $10.83 net loss per share, for the comparable quarter in 2015. 
  • Net revenues of $35.8 million compared to $29.1 million for the comparable quarter in 2015.
  • Fleet utilization rate of 98.9%.
  • The sale of MV Harrier and MV Kittiwake for net proceeds of $3.2 million and $4.2 million, respectively.
  • The closing of a previously-announced private common stock placement for gross proceeds of $88 million.
  • The appointment of Mr. Frank De Costanzo as Chief Financial Officer on September 30, 2016.
  • On November 7, 2016, Eagle Bulk announced the acquisition of a 2016 built 61,000 deadweight NACKS-61 Ultramax vessel constructed at Nantong COSCO Kawasaki Heavy Industries Engineering Co., Ltd. ("NACKS") for $18.85 million. The vessel is scheduled to be delivered to the Company in November and will be renamed the M/V Stamford Eagle.

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:

 

Quarter Ending


Off-hire Days (1)


Projected Costs (2)

December 31, 2016


-



-


March 31, 2016


-



-


June 30, 2017


None



None


September 30, 2017


66



$1.9 million


(1) Actual duration of dry-docking 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 dry dockings 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.

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited) 




Three Months Ended


Nine Months Ended




September 30,
2016



September 30,
2015



September 30,
2016



September 30,
2015


Revenues, net of commissions

$

35,788,181


$

29,127,482


$

82,656,903


$

78,116,020















Voyage expenses


11,207,959



5,202,219



27,902,155



13,540,698


Vessel expenses


17,707,959



22,492,616



56,783,181



63,124,053


Charter hire expenses


3,822,456



1,248,649



6,979,213



3,697,745


Depreciation and amortization


9,854,228



11,284,454



28,905,058



32,739,674


General and administrative
expenses


5,223,782



5,907,387



15,429,844



18,186,555


Refinancing expenses


(4,625)



-



5,869,025



-


Vessel impairment


-



-



6,167,262



-


(Gain)/Loss on sale of vessels


(299,350)



-



101,860



5,696,675


Total operating expenses


47,512,409



46,135,325



148,137,598



136,985,400


Operating loss


(11,724,228)



(17,007,843)



(65,480,695)



(58,869,380)


Interest expense


7,434,156



3,048,180



15,154,659



9,197,163


Interest income


(88,094)



-



(91,606)



(2,955)


Other expense


288,754



320,597



589,539



488,396


Total other expense, net


7,634,816



3,368,777



15,652,592



9,682,604















Net loss

$

(19,359,044)


$

(20,376,620)


$

(81,133,287)


$

(68,551,984)















Weighted average shares
outstanding *:













Basic


37,031,096



1,881,968



20,588,612



1,880,116


Diluted


37,031,096



1,881,968



20,588,612



1,880,116















Per share amounts*:













Basic net loss

$

(0.52)


$

(10.83)


$

(3.94)


$

(36.46)


Diluted net loss

$

(0.52)


$

(10.83)


$

(3.94)


$

(36.46)


 

*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

 



Three Months Ended


Nine Months Ended



September 30,
2016


September 30,
2015


September 30,
2016


September 30,
2015

Ownership Days



3,760




4,048




11,688




12,138


Chartered in Days



394




92




745




273


Available Days



4,094




4,080




12,292




12,049


Operating Days



4,048




3,996




12,142




11,750


Fleet Utilization



98.9

%



98.0

%



98.8

%



97.5

%

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) 




September 30, 
2016



December 31,
2015

ASSETS:








Current assets:








Cash and cash equivalents


$

98,568,795



$

24,896,161

Accounts receivable



6,453,806




7,076,528

Prepaid expenses



2,637,907




3,232,763

Inventories



6,995,819




5,574,406

Other assets



151,925




245,569

Total current assets



114,808,252




41,025,427

Noncurrent assets:








Vessels and vessel improvements, at cost, net of accumulated depreciation
of $69,972,688 and $49,148,080, respectively



688,421,196




733,960,731

Other fixed assets, net of accumulated depreciation of $264,201 and
$159,827, respectively



572,261




220,509

Restricted cash



74,917




141,161

Deferred drydock costs



12,529,591




11,146,009

Other assets



54,705




109,287

Total noncurrent assets



701,652,670




745,577,697

Total assets


$

816,460,922



$

786,603,124

LIABILITIES & STOCKHOLDERS' EQUITY








Current liabilities:








Accounts payable


$

6,459,022



$

8,216,473

Accrued interest



-




401,232

Other accrued liabilities



10,893,665




10,827,075

Fair value below contract value of time charters acquired



820,313




1,283,926

Unearned charter hire revenue



4,827,883




1,560,402

Fair value of derivative instruments



15,150




-

Current portion of long-term debt



-




15,625,000

Total current liabilities



23,016,033




37,914,108

Noncurrent liabilities:








First Lien Facility, net of debt discount and debt issuance costs



198,914,435




225,577,491

Second Lien Facility, net of debt discount and debt issuance costs



43,280,278




-

Payment-in-kind interest on Second Lien Facility



4,782,863




-

Fair value below contract value of time charters acquired



4,101,560




4,094,122

Other liabilities



767,106




672,941

Total noncurrent liabilities



251,846,242




230,344,554

Total liabilities



274,862,275




268,258,662

Commitments and contingencies








Stockholders' equity:








Common stock, $.01 par value, 700,000,000 shares authorized, 48,106,827
and 1,883,303 shares issued and outstanding, respectively*



481,069




18,833

Additional paid-in capital*



782,096,558




678,171,322

Accumulated deficit



(240,978,980)




(159,845,693

Total stockholders' equity



541,598,647




518,344,462

Total liabilities and stockholders' equity


$

816,460,922



$

786,603,124

 

*Adjusted to give effect for the 1 for 20 reverse stock split that became effective at the open of trading on August 5, 2016.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 





Nine Months Ended





September 30, 2016



September 30, 2015


Cash flows from operating activities:









Net loss


$

(79,170,287)



$

(68,551,984)


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









Depreciation



26,431,461




30,783,330


Amortization of deferred dry-docking costs



2,331,597




1,956,344


Amortization of debt discount and debt issuance costs



1,271,193




1,784,062


Amortization of fair value below contract value of time charter acquired



(456,175)




(1,240,609)


Payment-in-kind interest on Second Lien Facility



4,782,863




-


Loss on sale of vessels



101,860




5,696,675


Impairment of vessels



6,167,262




-


Realized loss from investment



-




112,589


Non-cash compensation expense



933,550




2,998,382


Drydocking expenditures



(3,715,179)




(9,680,582)


Changes in operating assets and liabilities:









Accounts receivable



622,722




3,637,163


Other assets



148,227




4,468,668


Prepaid expenses



594,856




1,657,211


Inventories



(1,421,413)




(798,193)


Unrealized loss on derivatives



15,150




-


Accounts payable



(1,757,451)




(3,298,897)


Accrued interest



(401,232)




(189,502)


Other accrued liabilities



160,755




1,021,773


Unearned revenue



3,267,481




(165,864)


Net cash used in operating activities


$

(40,092,760)



$

(29,809,434)











Cash flows from investing activities:









Vessels and vessel improvements



(199,675)




(1,508,778)


Purchase of other fixed assets



(456,125)




(11,201)


Proceeds from sale of vessels



13,001,000




4,235,542


Restricted cash



66,244




-


Proceeds from sale of investment



-




6,906,190


Net cash provided by investing activities


$

12,411,444



$

9,621,753











Cash flows from financing activities:









Proceeds from Second Lien Facility



60,000,000




-


Proceeds from Revolver Loan Facility under First Lien Facility



10,158,500




23,000,000


Proceeds from common stock placement



85,700,535




-


Repayment of Term Loan



(21,276,000)




(15,718,750)


Repayment of Revolver Loan



(30,158,500)




-


Deferred financing costs



(2,467,647)




-


Financing cost paid to lender



(600,000)




(500,000)


Cash used to settle net share equity awards



(2,938)




(1,285,506)


Net cash provided by financing activities


$

101,353,950



$

5,495,744


Net increase /(decrease) in cash and cash equivalents



73,672,634




(14,691,937)


Cash and cash equivalents at beginning of period



24,896,161




39,975,287


Cash and cash equivalents at end of period


$

98,568,795



$

25,283,350














 

 

Eagle Bulk Shipping Inc.'s Fleet


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 September 30, 2016:   


Vessel


Year

Built



Dwt


Charter
Expiration



Daily Charter
Hire Rate














Avocet


2010



53,462


Dec 2016


$

6,000














Bittern


2009



57,809


Oct 2016


$

9,750














Canary


2009



57,809


Oct 2016


$

8,500














Cardinal


2004



55,362


Oct 2016


$

8,600














Condor


2001



50,296


Nov 2016


$

3,800














Crane


2010



57,809


Oct 2016


$

8,000














Crested Eagle


2009



55,989


Oct 2016



Voyage














Crowned Eagle


2008



55,940


Oct 2016



Voyage














Egret Bulker


2010



57,809


Dec 2016


$

3,000

(1)













Gannet Bulker


2010



57,809


Oct 2016


$

Voyage














Golden Eagle


2010



55,989


Oct 2016


$

7,800














Goldeneye


2002



52,421


Nov 2016



Voyage














Grebe Bulker


2010



57,809


Dec 2016


$

3,000

(2)













Hawk I


2001



50,296


Oct 2016


$

5,000














Ibis Bulker


2010



57,775


Nov 2016



Voyage














Imperial Eagle


2010



55,989


Oct 2016



Voyage














Jaeger


2004



52,248


Nov 2016



Voyage














Jay


2010



57,802


Nov 2016


$

4,000














Kestrel I


2004



50,326


Oct 2016


$

8,500














Kingfisher


2010



57,776


Oct 2016


$

7,750














Martin


2010



57,809


Oct 2016



Voyage














Merlin


2001



50,296


Oct 2016


$

7,000














Nighthawk


2011



57,809


Nov 2016


$

9,990














Oriole


2011



57,809


Oct 2016


$

13,000














Osprey I


2002



50,206


Oct 2016


$

7,350














Owl


2011



57,809


Oct 2016


$

9,000














Petrel Bulker


2011



57,809


Nov 2016


$

2,700














Puffin Bulker


2011



57,809


Dec 2016


$

2,850

(3)













Redwing


2007



53,411


Oct 2016


$

7,200














Roadrunner Bulker


2011



57,809


Oct 2016


$

6,250

(4)













Sandpiper Bulker


2011



57,809


Oct 2016



Dry dock

(5)













Shrike


2003



53,343


Nov 2016



Voyage














Skua


2003



53,350


Dec 2016


$

3,100

(6)













Sparrow


2000



48,225


Dec 2016



Voyage














Stellar Eagle


2009



55,989


Oct 2016


$

6,000














Tern


2003



50,200


Oct 2016


$

7,500














Thrasher


2010



53,360


Nov 2016


$

7,000














Thrush


2011



53,297


Oct 2016


$

6,850














Woodstar


2008



53,390





Dry dock

(7)













Wren


2008



53,349


Oct 2016


$

8,300






(1)

The vessel is contracted to continue the existing time charter at a daily charter rate of $6,900 after November 25, 2016


(2)

The vessel is contracted to continue the existing time charter at a daily charter rate of $7,000 after December 6, 2016


(3)

The Vessel is contracted to continue the existing time charter at a daily charter rate of $6,750 after November 1, 2016.


(4)

The vessel is contracted to continue the existing time charter at a daily charter rate of $8,250 after September 30, 2016.


(5)

The vessel is contracted on a short term time charter upon completion of dry dock.


(6)

The vessel is contracted to continue the existing time charter at a daily charter rate of $6,800 after November 28, 2016.


(7)

The vessel is contracted on a short term voyage charter upon completion of dry dock.

 

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.

Conference Call Information

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.

About Eagle Bulk Shipping Inc.

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.

Website Information

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.

Disclaimer: Forward-Looking Statements

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.

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/eagle-bulk-shipping-inc-reports-third-quarter-2016-results-300359374.html

SOURCE Eagle Bulk Shipping, Inc.

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

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