January 3, 2023 – Glyfada, Greece – Seanergy Maritime Holdings Corp. (the “Company” or “Seanergy”) (NASDAQ: SHIP) announced today the acquisition of a 2012-built Capesize vessel (the “Vessel”) from a major Japanese company and the simultaneous commencement of its period employment.
In addition, the Company has entered into definitive agreements to sell the 2005-built M/V Goodship and the 2006-built M/V Tradership, the oldest vessels in its fleet, to United Maritime Corporation (“United”), a related party.
The Company expects to record a profit of approximately $8 million in connection with the sale of the two vessels in the first quarter of 2023. In addition, the aforementioned transactions will reduce the average age of Seanergy’s fleet.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“We are pleased to announce the acquisition of another high-quality Japanese Capesize vessel, which will effectively replace the older M/V Goodship and M/V Tradership. The sale of the two oldest vessels in our fleet will result in a substantial profit of more than $8 million for Seanergy, whilst benefiting the average age of our fleet.
“The M/V Paroship will increase the number of the scrubber-fitted vessels in our fleet to nine, enhancing our cash-flow generating capacity based on the significant differential between high and low-sulfur fuel prevailing currently.
“The delivery of the M/V Paroship and the underlying T/C agreement are well-timed, considering the recent improvement in the freight market and what we believe to be strong fundamentals in our sector.
“Seanergy remains committed to the Capesize sector with a solid operational structure and consistent capital allocation, focusing predominantly on shareholder rewards and sustainable growth.”
Acquisition of a modern Japanese Capesize vessel & Period Employment
The Vessel was built in 2012 at a reputable shipyard in Japan, with a cargo-carrying capacity of approximately 181,415 deadweight tons and has been renamed M/V Paroship. The Vessel is fitted with an exhaust gas cleaning system (scrubber).
The M/V Paroship was delivered to the Company on December 27, 2022 and its gross purchase price of US$31 million was funded through a combination of cash on hand and a new senior credit facility.
The Vessel has been fixed on a time charter (“T/C”) with a leading European operator, which is an existing charterer of Seanergy, for a period of minimum ten (10) months to maximum December 31, 2023. The T/C commenced promptly, upon finalization of the customary transition process. The gross daily rate is set at a premium over the Baltic Capesize Index, while the Company has the option to convert the daily hire from index-linked to fixed for a period of minimum three (3) months to maximum nine (9) months based on the prevailing Capesize Freight Futures Agreements curve. In addition, the T/C includes a scrubber profit sharing scheme with the majority of the benefit from the differential between high sulfur and low sulfur fuel being attributed to Seanergy.
Sale of our two oldest Capesize vessels
The aggregate sale price of the two vessels is US$36.25 million and was agreed upon on the basis of the average of three independent broker valuations. The transaction was made pursuant to United’s exercise of a right of first offer granted by the Company on its Capesize vessels pursuant to an agreement entered into between the Company and United on July 5, 2022. The sale of the M/V Tradership and the M/V Goodship was approved by a special independent committee of the Company’s Board of Directors. The deliveries of the two vessels are expected to be concluded by the end of the first quarter of 2023, subject to the satisfaction of certain customary closing conditions.
Seanergy concluded a new senior credit facility with an existing lender of the Company, a major European bank, secured by the M/V Paroship. The US$16.5 million loan bears interest of SOFR + 2.90% per annum and has a four-year tenor. The principal amount will be amortized through 16 consecutive quarterly installments averaging approximately US$0.43 million each, and a US$9.6 million final balloon payment at maturity.
About Seanergy Maritime Holdings Corp.
Seanergy Maritime Holdings Corp. is the only pure-play Capesize ship-owner publicly listed in the US. Seanergy provides marine dry bulk transportation services through a modern fleet of Capesize vessels. Including the newly delivered M/V Paroship and upon completion of the sale of the M/V Goodship and M/V Tradership, the Company’s operating fleet will consist of 16 Capesize vessels with an average age of 11.9 years and an aggregate cargo carrying capacity of approximately 2,846,965 dwt.
The Company is incorporated in the Republic of the Marshall Islands and has executive offices in Glyfada, Greece. The Company’s common shares trade on the Nasdaq Capital Market under the symbol “SHIP”.
This information is distributed by Capital Link, Inc. – Investor Relations 230 Park Avenue, Suite 1540 New York, NY 10169 Tel: (212) 661-7566 Email: pressrelease@capitallink.com
Delivery speeds of goods worldwide have improved, impacting everything from shipping and freight to retail stores – and it should help provide a lower inflationary balance between demand and supply. Demand is waning, and supply speeds are normalizing. Months-long back-ups of ships are now gone, with shipping rates close to pre-pandemic levels, the post-pandemic era now has to adjust again.
Supply Chain Pressure
A government measure compiled by the Bureau of Labor Statistics (BLS) consisting of transportation and manufacturing pressures, called the Global Supply Chain Pressure Index Pressure (GSCPI), shows significant easing during 2022.
Global supply chain pressures are well off the high reached last December, although they have just modestly ticked up. The largest contributor to this slight reversal is the increase in supply chain pressures from Chinese delivery times, though improvements were shown in U.S. delivery times and Taiwanese purchases. The GSCPI’s recent movements suggest that developments in Asia are slowing down the return of the index back to historical levels.
Shipping Impact
Goods are moving through the largest U.S. port complex faster than at any time since cargo was backed up for weeks at the Los Angeles-Long Beach docks during the pandemic. The average dwell time for containers is just 2.8 days, according to the Pacific Merchant Shipping Association. Meanwhile, U.S. container imports reached their lowest level in November since the early months of 2020.
The improvements and reduced demand have impacted ocean shipping rates. The daily spot rate to move a shipping container from Asia to the U.S. West coast is near $1,400, down from about $7,500 in July and roughly $15,000 a year ago, according to the Freightos Baltic Index. This current cost represents a slight discount over pre-pandemic rates.
Freight Impact
Maersk is a large logistics company that is involved in many aspects of shipping and tracking. Vincent Vlerc will take over as CEO on January 1. Mr. Clerc said, “You can’t deploy more capacity than what our customers need.” He explained, “we are going through a significant inventory correction in the U.S. and Europe, and we made significant capacity adjustments to our capacity in and out of Asia.” Maersk has indicated it is transporting 30% fewer containers across the Pacific since last year.
The current chief executive of Maersk, Soren Skou said, “it’s obvious that freight rates peaked and began to normalize, driven by falling demand and an easing supply-chain congestion.” In November, the shipping company lowered its 2023 forecast for container demand. It now expects a decline from 2% to 4%, from a maximum decline of 1% previously.
Rail Transportation
The major railroads, in addition to having averted a strike, have managed to hire more train and engine crew members during the second half of 2022. Recruiting had been challenging earlier. They reopened some hump yards and took out locomotives from storage to help ease some bottlenecks.
These changes helped to improve rail service from a low in the Spring when dwell time and train speeds were historically low. “We have turned the corner on service,” Norfolk Southern CEO Alan Shaw said during the company’s investor day in early December.
The railroads say they intend to draw more cargo currently on trucks back to rail, as rail service improves.
Parcel Delivery
FedEx and other regional carriers are having an easier time delivering packages. On Tuesday, FedEx reported average daily parcel volumes fell 10.2%, declining for the fourth straight quarter. There is a trend where shoppers are venturing back out; this has reduced online shopping.
There is now a surplus of capacity to deliver packages. In 2020 and 2021, their ability to deliver fell short of daily capacity.
Before the holiday season, parcel carriers noted consumers had reduced online orders. People seemingly have other pent-up demands to meet. They have resumed spending on travel, parties, and entertainment. Also, in-person shopping has increased post-pandemic.
Impact on Retail
After more than a year of paying higher and higher prices for shipped goods, Walmart and other retailers can resist price increases. In fact, they may even be successful negotiating discounts. With significant inventory and, in some cases, excess inventory, retailers have more bargaining power with shippers and suppliers. Dollar General Corp., after years of blaming high transportation costs as a drag on the business, said in December that falling transit prices could begin lifting the company in 2023.
Take Away
A new balance is being found in the shipping and delivery of goods. Where there was once more demand than supply, a more normal balance is surfacing. This balance is a relief to both sellers and buyers as products become available. Even more, it is likely to help bring inflation down. Also working to help this balance is higher interest rates that are intended to slow demand while supply-side channels catch up. The balance is much closer than it was when the Fed began tightening, this helps bring the costs of goods down, and as an added gift to those most hurt by inflation, it also has helped ease tight labor markets.
HOUSTON, Dec. 20, 2022 (GLOBE NEWSWIRE) — Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) (NASDAQ: GLDD), the largest provider of dredging services in the United States, announced an update on its fourth quarter 2022 operations.
Revenues and gross profit margins for fourth quarter 2022 are expected to be lower than previously anticipated. These results were impacted by the earlier than expected retirement of the Terrapin Island hopper dredge, significant weather delays on several projects in the northeast and some project production issues. Additionally, unexpected drydocking scope increases resulted in additional costs and delays for the hopper dredges Ellis Island and Padre Island. The Padre Island is now out of drydock and in operation and the Ellis Island is out of drydock and expected to be in operation before year end.
General and administrative expense and net interest expense are expected to remain relatively flat from the prior quarter.
Lasse Petterson, President and Chief Executive Officer at Great Lakes commented, “This has been a challenging year driven by an extremely slow bid market in the first half of 2022, rampant inflation, supply chain delays and more than the usual number of differing site conditions on projects. We are proactively taking steps to minimize the impact of these external factors as we are rationalizing older assets like the previously announced retirement of the Terrapin Island, cold stacking several of our oldest and least productive dredges and aggressively reducing other costs.
Looking forward to 2023, we expect bidding activity to be more in line with previous years as several large capital projects that were expected to bid in 2022 are now expected to bid in the first half of the year and our LNG prospects are moving toward final investment decisions. We are on track with our fleet modernization program and our newbuild hopper dredge, the Galveston Island, is on schedule to be operational in the second quarter of 2023. As we see the bid market start to recover in 2023, we can quickly reactivate the cold stacked vessels to take advantage of the improving market. We believe we are proactively taking the right steps adjusting to the current market conditions and expect to see their positive effects as we go into next year.”
The Company Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 132-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
Cautionary Note Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking” statements, including, but not limited to, the statements regarding revenue and gross margin projections, as defined in Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange Commission (the “SEC”), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Great Lakes and its subsidiaries, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “would,” “could,” “should,” “seeks,” “are optimistic,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Great Lakes cautions investors that any forward-looking statements made by Great Lakes are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Great Lakes include, but are not limited to: the impact of the COVID-19 pandemic and related responsive measures, including productivity impacts and increased expenditures; our ability to obtain and retain federal government dredging and other contracts, which is impacted by the amount of government funding for dredging and other projects and the degree to which government funding is directed to the Corps and certain other customers, which in turn could be impacted by extended federal government shutdowns or declarations of additional national emergencies; our ability to qualify as an eligible bidder under government contract criteria and to compete successfully against other qualified bidders in order to obtain government dredging and other contracts; cost over-runs, operating cost inflation and potential claims for liquidated damages, particularly with respect to our fixed cost contracts; the timing of our performance on contracts and new contracts being awarded to us; significant liabilities that could be imposed were we to fail to comply with government contracting regulations; increasing costs to operate and maintain aging vessels and comply with applicable regulations or standards; increasing costs of fleet improvements to remain competitive; equipment or mechanical failures; impacts to our facilities and suppliers from pandemics, epidemics or outbreaks of infectious disease affecting our markets; market or supply chain disruptions as a result of war or insurrection; impacts to our supply chain for procurement of new vessel build materials: our international dredging operations; instability and declining relationships amongst certain governments in the Middle East and the impact this may have on infrastructure investment, asset value of such operations, and local licensing, permitting and royalty issues; capital and operational costs due to environmental regulations or extreme weather events; market and regulatory responses to climate change; contract penalties for any projects that are completed late; force majeure events, including natural disasters, pandemics and terrorists’ actions; changes in the amount of our estimated backlog; significant negative changes to large, single customer contracts; our ability to obtain potential financing for the construction of new vessels, including our new offshore wind vessel; potential inability to secure contracts to utilize new offshore wind vessel; unforeseen delays and cost overruns related to the construction of new vessels, including potential mechanical and engineering issues and unforeseen changes in environmental regulations; any failure to comply with Section 27 of the Jones Act provisions on coastwise trade, or if those provisions were modified or repealed; fluctuations in fuel prices, particularly given our dependence on petroleum-based products; impacts of nationwide inflation on procurement of new build materials; our ability to obtain bonding or letters of credit and risks associated with draws by the surety on outstanding bonds or calls by the beneficiary on outstanding letters of credit; acquisition integration and consolidation, including transaction expenses, unexpected liabilities and operational challenges and risks; divestitures and discontinued operations, including retained liabilities from businesses that we sell or discontinue; potential penalties and reputational damage as a result of legal and regulatory proceedings, including a pending criminal proceeding in Louisiana; any liabilities imposed on us for the obligations of joint ventures, partners and subcontractors; increased costs of certain material used in our operations due to newly imposed tariffs; unionized labor force work stoppages; any liabilities for job-related claims under federal law, which does not provide for the liability limitations typically present under state law; operational hazards, including any liabilities or losses relating to personal or property damage resulting from our operations; our ability to identify and contract with qualified MBE or DBE contractors to perform as subcontractors; our substantial amount of indebtedness, which makes us more vulnerable to adverse economic and competitive conditions; restrictions on the operation of our business imposed by financing covenants; impacts of adverse capital and credit market conditions on our ability to meet liquidity needs and access capital; our ability to maintain or expand our credit capacity; limitations on our hedging strategy imposed by statutory and regulatory requirements for derivative transactions; foreign exchange risks, in particular, as it relates to the new offshore wind vessel build; losses attributable to our investments in privately financed projects; restrictions on foreign ownership of our common stock; restrictions imposed by Delaware law and our charter on takeover transactions that stockholders may consider to be favorable; restrictions on our ability to declare dividends imposed by our financing agreements and Delaware law; significant fluctuations in the market price of our common stock, which may make it difficult for holders to resell our common stock when they want or at prices that they find attractive; changes in previous recorded net revenue and profit as a result of the significant estimates made in connection with our methods of accounting for recognized revenue; maintaining an adequate level of insurance coverage; our ability to find, attract and retain key personnel and skilled labor; disruptions, failures, data corruptions, cyber-based attacks or security breaches of the information technology systems on which we rely to conduct our business; and impairments of our goodwill or other intangible assets. For additional information on these and other risks and uncertainties, please see Item 1A. “Risk Factors” of Great Lakes’ Annual Report on Form 10-K for the year ended December 31, 2021.1
Although Great Lakes believes that its plans, intentions and expectations reflected in or suggested by such forward looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements. Great Lakes’ future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and Great Lakes does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.
For further information contact: Tina Baginskis Director, Investor Relations 630-574-3024
Oil Tanker Day Rates To Be Supported By The EU’s Ban On Russian Crude
Over the past 12 months, global container shipping rates have steadily declined to their long-term averages as supply chain snarls have receded and backups at ports have disappeared.
Now, another segment of the cargo shipping industry is seeing day rates explode to record highs.
So-called dirty tankers, those that carry crude oil, are charging over $100,000 a day for their services as international sanctions against Russia force ships—including Suezmaxes, Aframaxes and very large crude carriers (VLCCs)—to take longer, more circuitous routes. Carriers that once made deliveries to the North Sea port of Rotterdam via the Baltic Sea are now having to sail to China, India and Turkey, which are twice or three times the distance. All three Asian countries have said they will continue to buy Russian oil.
The Baltic Exchange Dirty Tanker Index, which measures shipping rates on 12 international routes, rose as much as 243% for the 12-month period through the end of November.
So how high could rates go? According to Omar Nokta, a shipping analyst at Jefferies, they could potentially climb to between $150,000 and $200,000 a day.
We’re almost there now. The Aframax day rate to ship oil from the Black Sea to the Mediterranean hit an astronomical $145,000 a day during the week ended November 18, according to Compass Maritime.
Russia Oil Turmoil To Drive Tanker Market Higher
This week, the 27 countries of the European Union (EU) officially banned crude imports from Russia, the world’s number two producer, and on February 5, 2023, all Russian oil products will be banned. This will have the effect of disrupting global trade routes further, driving up rates even more.
As you can see below, Europe’s imports of Russian oil were already down dramatically from the beginning of 2022, when the country invaded Ukraine. Before the ban, the Netherlands was the only remaining European destination for deliveries outside of the Mediterranean and Black Sea basin. To help offset the loss of Russian supply, Norway will ship a record volume of North Sea oil in January, Bloomberg reports.
Oil Tankers Generating Record Revenues, Stocks Hitting New Highs
Due to changes in shipping routes, demand for oil tankers is expected to surge to levels not seen in three decades, according to Clarkson Research. The U.K.-based group is forecasting that the number of ton-miles, defined as one ton of freight shipped one mile, could increase 9.5% next year. That would mark the largest annual increase since 1993.
Volumes are already at pre-pandemic levels, with VLCCs and Aframaxes having exceeded 2019 volumes for the first time since the second quarter of 2020.
Oil Tankers Generating Record Revenues, Stocks Hitting New Highs
Also supporting rates is the fact that oil carriers are replacing vessels at a historically low pace.
In July, Clarksons reported that new shipbuilding orders for container vessels had surpassed those for tankers for the first time ever. Whereas the global order book for containerships stood at 72.5 million deadweight tonnage (dwt)—a measure for how much weight a ship can carrier—the orderbook for crude oil and oil product tankers was 34 million dwt, a new record low.
This has contributed to massive revenues and net income, which should keep carriers in a strong position even as container rates have dried up. Last week, Mitsui O.S.K. Lines president Takeshi Hashimoto told JPMorgan analysts that he believes profits will remain strong due to the company’s liquified natural gas (LNG) business as well as dry bulkers and tankers.
Frontline, the fourth largest oil tanker company, just reported net income of $154.4 million in the third quarter, compared to $108.5 million estimated.
Below you can see how revenues have surged for companies such as International Seaways, Ardmore Shipping and Scorpio Tankers.
With the S&P 500 still down more than 14% for the year, shares of a number of oil tankers have hit new all-time highs in recent days. Among those are Ardmore, International Seaways and Euronav. Teekay Tankers was up 226% year-to-date, while Scorpio was up 323% over the same period.
Will these returns continue? I can’t say, of course, but the structural support doesn’t appear to be going away anytime soon.
The Baltic Dirty Tanker Index is made up from 12 routes taken from the Baltic International Tanker Routes. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Mitsui OSK Lines Ltd.
This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes of U.S. Global Investors (GROW). Find more of Frank’s articles here – Originally published October 21, 2021
US Global Investors Disclaimer
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.
The Baltic Dirty Tanker Index is made up from 12 routes taken from the Baltic International Tanker Routes. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Mitsui OSK Lines Ltd.
HOUSTON, Dec. 05, 2022 (GLOBE NEWSWIRE) — Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) (NASDAQ: GLDD), the largest provider of dredging services in the United States, provided today an update on their fleet renewal program.
The Galveston Island, the first of two newbuild hopper dredges, is in the water and is scheduled to be in operation the first half of 2023 as planned. This new dredge is a 6,500-cubic-yard-capacity Trailing Suction Hopper Dredge which will support the modernization of Great Lakes’ dredging fleet. The dredge will be equipped with a direct high-power pump-ashore installation, dredging system automation, dynamic positioning and tracking, U.S. EPA Tier IV compliant engines, and have capabilities of running on biofuel to minimize the environmental impact. The Tier 4-compliant engines significantly reduce the vessel’s climate footprint, while other incorporated features minimize turbidity and marine species entrainment.
The upcoming delivery of the Galveston Island enables the Company to continue the rationalization of its older assets. During the fourth quarter of 2022, the Company will retire the hopper dredge Terrapin Island, which has a 42-year working history. This vessel was planned for retirement upon the Galveston Island delivery, but based on her age the Company has decided to accelerate her retirement to significantly reduce its operating, labor and maintenance costs and improve productivity for the overall fleet. Work planned for the Terrapin Island will be delayed until another hopper dredge completes its regulatory drydock at the end of December.
The retirement of the Terrapin Island will result in a non-cash write-off of approximately $8 million in the fourth quarter of 2022.
The hopper fleet renewal program will be complete in 2025 with the delivery of the sister ship to the Galveston Island, at which time Great Lakes will have the largest and most modern hopper fleet in the US.
Lasse Petterson, President and Chief Executive Officer of Great Lakes commented, “After implementing our restructuring plan in 2017, we have invested in both productivity upgrades to our best performing vessels and executed on our new build program. This has provided us with additional capacity and improved efficiencies and will allow us to retire some of our older dredges and rationalize some of our older support equipment. These strategic moves will have a positive impact to our emissions footprint and our competitiveness in the coastal protection and maintenance markets as well as address the specific needs in the growing offshore wind market.”
The Company Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 132-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
Cautionary Note Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange Commission (the “SEC”), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Great Lakes and its subsidiaries, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. These cautionary statements are being made pursuant to the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Great Lakes cautions investors that any forward-looking statements made by Great Lakes are not guarantees or indicative of future events.
Although Great Lakes believes that its plans, intentions and expectations reflected in this press release are reasonable, actual events could differ materially. The forward-looking statements contained in this press release are made only as of the date hereof and Great Lakes does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.
For further information contact: Tina Baginskis Director, Investor Relations 630-574-3024
Railroad Unions and Their Employers at an Impasse: Freight-Halting Strikes are Rare, and this Would be the First in 3 Decades
The prospect of a potentially devastating rail workers strike is looming again.
Fears of a strike in September 2022 prompted the Biden administration to pull out all the stops to get a deal between railroads and the largest unions representing their employees.
That deal hinged on ratification by a majority of members at all 12 of those unions. So far, eight have voted in favor, but four have rejected the terms. If even one continues to reject the deal after further negotiations, it could mean a full-scale freight strike will start as soon as midnight on Dec. 5, 2022. Any work stoppage by conductors and engineers would surely interfere with the delivery of gifts and other items Americans will want to receive in time for the holiday season, along with coal, lumber and other key commodities.
Strikes that obstruct transportation rarely occur in the United States, and the last one involving rail workers happened three decades ago. But when these workers do walk off the job, it can thrash the economy, inconveniencing millions of people and creating a large-scale crisis.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Erik Loomis, Professor of History, University of Rhode Island.
I’m a labor historian who has studied the history of American strikes. I believe that with the U.S. teetering toward at least a mild recession and some of the supply chain disruptions that arose at the outset of the COVID-19 pandemic still wreaking havoc, I don’t think the administration would accept a rail strike for long.
19th Century Rail Strikes
Few, if any, workers have more power over the economy than transportation workers. Their ability to shut down the entire economy has often led to heavy retaliation from the government when they have tried to exercise that power.
In 1877, a small strike against a West Virginia railroad that had cut wages spread. It grew into what became known as the Great Railroad Strike, a general rebellion against railroads that brought thousands of unemployed workers into the streets.
Seventeen years later, in 1894, the American Railway Union went on strike in solidarity with the Pullman Sleeping Car company workers who had gone on strike due to their boss lowering wages while maintaining rents on their company housing.
In both cases, the threat of a railroad strike led the federal government to call out the military to crush the labor actions. Dozens of workers died.
Once those dramatic clashes ended, for more than a century rail unions have played a generally quiet role, preferring to focus on the needs of their members and avoiding most broader social and political questions. Fearful of more rail strikes, the government passed the Railway Labor Act of 1926, which gives Congress the power to intervene before a rail strike starts.
Breaking the Air Traffic Controllers Union
With travel by road and air growing in importance in the 20th century, other transportation workers also engaged in actions that could shut down the economy.
The Professional Air Traffic Controllers Association walked off the job in 1981 after a decade of increased militancy over the stress and conditions of their job. The union had engaged in a series of slowdowns through the 1970s, delaying airplanes and frustrating passengers.
When it went on strike in 1981, the union broke the law, as federal workers do not have the right to strike. That’s when President Ronald Reagan became the first modern U.S. leader to retaliate against striking transportation workers. Two days after warning the striking workers that they would lose their jobs unless they returned to work, Reagan fired more than 11,000 of them. He also banned them from ever being rehired.
In the aftermath of Reagan’s actions, the number of strikes by U.S. workers plummeted. Rail unions engaged in brief strikes in both 1991 and 1992, but Congress used the Railway Labor Act to halt them, ordering workers back on the job and imposing a contract upon the workers.
In 1992, Congress passed another measure that forced a system of arbitration upon railroad workers before a strike – that took power away from workers to strike.
New Era of Labor Militancy
Following decades of decline in the late 20th century, U.S. labor organizing has surged in recent years.
Most notably, unionization attempts at Starbucks and Amazon have led to surprising successes against some of the biggest corporations in the country. Teachers’ unions around the nation have also held a series of successful strikes everywhere from Los Angeles to West Virginia.
United Parcel Service workers, who held the nation’s last major transportation strike, in 1997, may head back to the picket lines after their contract expires in June 2023. UPS workers, members of the Teamsters union, are angry over a two-tiered system that pays newer workers lower wages, and they are also demanding greater overtime protections.
But rail workers, angered by their employers’ refusal to offer sick leave and other concerns, may go on strike first.
Rail companies have greatly reduced the number of people they employ on freight trains as part of their efforts to maximize profits and take advantage of technological progress. They generally keep the size of crews limited to only two per train.
Many companies want to pare back their workforce further, saying that it can be safe to have crews consisting of a single crew member on freight trains. The unions reject this arrangement, saying that lacking a second set of eyes would be a recipe for mistakes, accidents and disasters.
The deal the Biden administration brokered in September would raise annual pay by 24% over several years, raising the average pay for rail workers to $110,000 by 2024. But strikes are often about much more than wages. The companies have also long refused to provide paid sick leave or to stop demanding that their workers have inflexible and unpredictable schedules.
The Biden administration had to cajole the rail companies into offering a single personal day, while workers demanded 15 days of sick leave. Companies had offered zero. The agreement did remove penalties from workers who took unpaid sick or family leave, but this would still leave a group of well-paid workers whose daily lives are filled with stress and fear.
What Lies Ahead
Seeing highly paid workers threaten to take action that would surely compound strains on supply chains at a time when inflation is at a four-decade high may not win rail unions much public support.
A coalition representing hundreds of business groups has called for government intervention to make sure freight trains keep moving, and it’s highly likely that Congress will again impose a decision on workers under the Railway Labor Act. The Biden administration, which has shown significant sympathy to unions, has resisted supporting such a step so far.
No one should expect the military to intervene like it did in the 19th century. But labor law remains tilted toward companies, and I believe that if the government were to compel striking rail workers back on the job, the move might find a receptive audience.
HOUSTON, Nov. 17, 2022 (GLOBE NEWSWIRE) — Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, completed a 15 month rebuild of the recently commissioned Dredge Lavaca. Advancements to the dredge’s ladder, accommodations, and operating systems were made to continue to provide exceptional dredging service to its clients and industry partners in both the public and private sectors along the Gulf Coast. The Lavaca is scheduled to begin work mid-November 2022 on a newly awarded contract for the Port of Corpus Christi and will take part in the continued maintenance of waterways, deepening and widening projects for years to come throughout the Gulf Coast. The design of the dredge, including its modular quarters, walkways, access and egress points, ventilation, handrail & fendering systems have all been engineered specifically with an emphasis on safety. Design improvements to the crew accommodations reduced noise and vibrations during dredging operations and provide a reprieve for the crew during their rest periods. The open-concept lever room allows for the leverman to monitor and control all dredging systems from a specially designed control station with touchscreen displays and floor-to-ceiling windows that provide a 180-degree field of view. Tier III diesel-electric engines and electric winches is another step forward for the Company to continue our commitment to protecting the environment by preventing potential spills and reducing NOx emissions within our operating areas. Orion’s commitment to Safety and “Target Zero” is also instilled into our vetted contractors, and is reflected indirectly in this project, as the project surpassed 65,000 manhours without any lost time incidents or recordable injuries.
Orion Group Holdings, Inc., a leading specialty construction company serving the infrastructure, industrial and building sectors, provides services both on and off the water in the continental United States, Alaska, Canada and the Caribbean Basin through its marine segment and its concrete segment. The Company’s marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design, and specialty services. Its concrete segment provides turnkey concrete construction services including pour and finish, dirt work, layout, forming, and rebar across the light commercial, structural and other associated business areas. The Company is headquartered in Houston, Texas with regional offices throughout its operating areas.
Forward-Looking Statements
The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of which the Company is availing itself. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘seeks’, ‘approximately’, ‘intends’, ‘plans’, ‘estimates’, or ‘anticipates’, or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, outlook, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, profit, EBITDA, EBITDA margin, or cash flow, including to service debt, and including any estimates, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward looking statements also include estimated project start date, anticipated revenues, and contract options which may or may not be awarded in the future. Forward looking statements involve risks, including those associated with the Company’s fixed price contracts that impacts profits, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, levels and predictability of government funding or other governmental budgetary constraints and any potential contract options which may or may not be awarded in the future, and are the sole discretion of award by the customer. Past performance is not necessarily an indicator of future results. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company’s plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise.
Please refer to the Company’s Annual Report on Form 10-K, filed on March 7, 2022, which is available on its website at www.oriongroupholdingsinc.com or at the SEC’s website at www.sec.gov, for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.
STAMFORD, Conn., Nov. 03, 2022 (GLOBE NEWSWIRE) — Eagle Bulk Shipping Inc. (NASDAQ: EGLE) (“Eagle Bulk,” “Eagle” or the “Company”), one of the world’s largest owner-operators within the midsize drybulk vessel segment, today reported financial results for the quarter ended September 30, 2022.
Quarter highlights:
Generated Revenues, net of $185.3 million
Achieved TCE(1) of $28,099/day basis and TCE Revenue(1) of $128.9 million
Realized net income of $77.2 million, or $5.94 per basic share
Adjusted net income(1) of $74.3 million, or $5.72 per adjusted basic share(1)
Generated EBITDA(1) of $96.0 million
Adjusted EBITDA(1) of $85.1 million
Repurchased $10.0 million in aggregate principal amount, or 9% of the Convertible Bond Debt
Reduced diluted share count by 296,990 shares
Executed an agreement to purchase a 2015-built scrubber-fitted Japanese Ultramax for $27.5 million
Declared a quarterly dividend of $1.80 per share for the third quarter of 2022
Dividend is payable on November 23, 2022 to shareholders of record at the close of business on November 15, 2022
Recent Developments:
Coverage position for the fourth quarter 2022 is as follows:
70% of available days fixed at an average TCE of $25,040
Eagle’s CEO Gary Vogel commented, “We posted another robust quarterly result, generating net income of $77.2 million as our team successfully navigated a volatile landscape. With our commercial platform and dynamic approach to trading ships, as well as our ability to capture significant value from fuel spreads as a result of our fleet scrubber position, we were able to achieve a TCE of $28,099, representing significant outperformance against the BSI of almost 46%.
Consistent with our stated capital allocation strategy and strong results, we declared our fifth consecutive quarterly dividend since adopting our policy late in 2021, representing 30% of earnings and bringing total shareholder distributions to $10.05 per share. Additionally, we opportunistically repurchased approximately 9% of our convertible bond debt in the open market at advantageous prices, resulting in both a decrease in debt outstanding and a reduction to our diluted share count.
On the strategic front, we capitalized on the illiquidity in the S&P markets in early September and executed our 51st transaction, acquiring a high-specification 2015-built Japanese scrubber-fitted Ultramax for $27.5 million. Based on our constructive view of supply side fundamentals, we are likely to add further tonnage on an opportunistic basis as we head into next year, consistent with our continued focus on strategically expanding the business and adding incremental value for our shareholders.”
1 These are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release. An explanation of these measures and how they are calculated are also included below under the heading “Supplemental Information – Non-GAAP Financial Measures.”
Fleet Operating Data
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Ownership Days
4,831
4,697
14,424
13,407
Chartered in Days
1,000
563
3,102
1,718
Available Days
5,588
4,931
16,701
14,403
Operating Days
5,574
4,908
16,662
14,308
Fleet Utilization (%)
99.7
%
99.5
%
99.8
%
99.3
%
Fleet Development
Vessel sold and delivered in the third quarter of 2022
Cardinal, a Supramax (55K DWT / 2004-built) for total consideration of $15.8 million
Vessel acquired and expected to be delivered in the fourth quarter of 2022
Tokyo Eagle, a Japanese-built, scrubber-fitted Ultramax (61K DWT / 2015-built) for total consideration of $27.5 million
Results of Operations for the three and nine months ended September 30, 2022 and 2021
For the three months ended September 30, 2022, the Company reported net income of $77.2 million, or basic and diluted income of $5.94 per share and $4.77 per share, respectively. In the comparable quarter of 2021, the Company reported net income of $78.3 million, or basic and diluted income of $6.12 per share and $4.92 per share, respectively.
For the three months ended September 30, 2022, the Company reported adjusted net income of $74.3 million, which excludes net unrealized gains on derivative instruments of $7.1 million and a loss on debt extinguishment of $4.2 million, or basic and diluted adjusted net income of $5.72 per share and $4.58 per share, respectively. In the comparable quarter of 2021, the Company reported adjusted net income of $72.1 million, which excludes net unrealized gains on derivative instruments of $6.3 million and a loss on debt extinguishment of $0.1 million, or basic and diluted adjusted net income of $5.63 per share and $4.52 per share, respectively.
For the nine months ended September 30, 2022, the Company reported net income of $224.7 million, or basic and diluted income of $17.31 per share and $13.86 per share, respectively. In the comparable period of 2021, the Company reported net income of $97.4 million, or basic and diluted income of $7.96 per share and $6.34 per share, respectively.
For the nine months ended September 30, 2022, the Company reported adjusted net income of $220.4 million, which excludes net unrealized gains on derivative instruments of $8.5 million and a loss on debt extinguishment of $4.2 million, or basic and diluted adjusted net income of $16.97 per share and $13.59 per share, respectively. In the comparable period of 2021, the Company reported adjusted net income of $121.7 million, which excludes net unrealized losses on derivative instruments of $24.2 million and a loss on debt extinguishment of $0.1 million, or basic and diluted adjusted net income of $9.95 per share and $7.93 per share, respectively.
Revenues, net
Revenues, net for the three months ended September 30, 2022 were $185.3 million compared to $183.4 million in the comparable quarter in 2021. Net time and voyage charter revenues increased $21.8 million due to an increase in available days driven by an increase in owned days and chartered-in days, partially offset by a decrease of $19.9 million due to lower charter rates.
Revenues, net for the nine months ended September 30, 2022 and 2021 were $568.4 million and $409.8 million, respectively. Net time and voyage charter revenues increased $80.4 million due to higher charter rates and increased $78.2 million due to an increase in available days driven by increases in owned days and chartered-in days.
Voyage expenses
Voyage expenses for the three months ended September 30, 2022 were $40.8 million compared to $30.3 million in the comparable quarter in 2021. Voyage expenses increased primarily due to an increase in bunker consumption expense of $10.1 million driven by an increase in bunker fuel prices.
Voyage expenses for the nine months ended September 30, 2022 were $120.7 million and $81.4 million in the comparable period in 2021. Voyage expenses increased primarily due to an increase in bunker consumption expense of $29.1 million driven by an increase in bunker fuel prices, an increase in port expenses of $8.5 million driven by an increase in fuel surcharges and cost inflation and an increase in broker commissions of $1.7 million driven by an increase in related revenues.
Vessel operating expenses
Vessel operating expenses for the three months ended September 30, 2022 were $33.1 million compared to $28.1 million in the comparable quarter in 2021. Vessel operating expenses increased primarily due to an increase in repair costs of $3.1 million driven by discretionary upgrades and certain unscheduled necessary repairs, and an increase in crewing costs of $2.1 million driven by crew changes and expenses related to COVID-19 and the war in Ukraine. The ownership days for the three months ended September 30, 2022 and 2021 were 4,831 and 4,697, respectively.
Average daily vessel operating expenses excluding one-time, non-recurring expenses related to vessel acquisitions, charges relating to a change in the crewing manager on some of our vessels and discretionary hull upgrades for the three months ended September 30, 2022 were $6,566 as compared to $5,401 for the three months ended September 30, 2021.
Vessel operating expenses for the nine months ended September 30, 2022 and 2021 were $88.2 million and $73.3 million, respectively. Vessel operating expenses increased primarily due to an increase in crewing costs of $7.8 million driven by crew changes and expenses related to COVID-19 and the war in Ukraine, an increase in the cost of lubes, stores and spares of $3.1 million driven by cost inflation and an increase in repair costs of $2.4 million driven by discretionary upgrades and certain unscheduled necessary repairs. The ownership days for the nine months ended September 30, 2022 and 2021 were 14,424 and 13,407, respectively.
Average daily vessel operating expenses excluding one-time, non-recurring expenses related to vessel acquisitions, charges relating to a change in the crewing manager on some of our vessels and discretionary hull upgrades for the nine months ended September 30, 2022 and 2021 were $5,991 and $5,114, respectively.
Charter hire expenses
Charter hire expenses for the three months ended September 30, 2022 were $19.8 million compared to $10.7 million in the comparable quarter in 2021. Charter hire expenses increased $8.3 million primarily due to an increase in chartered-in days and increased $0.7 million due to an increase in charter hire rates due to improvement in the charter hire market. The total chartered-in days for the three months ended September 30, 2022 were 1,000 compared to 563 for the comparable quarter in the prior year.
Charter hire expenses for the nine months ended September 30, 2022 were $63.8 million compared to $25.4 million in the comparable period in 2021. Charter hire expenses increased $20.4 million primarily due to an increase in chartered-in days and increased $18.0 million due to an increase in charter hire rates due to improvement in the charter hire market. The total chartered-in days for the nine months ended September 30, 2022 and 2021 were 3,102 and 1,718, respectively.
The Company currently charters in five Ultramax vessels on a long-term basis as of the charter-in commencement date, with an outstanding option to extend the charter period on one of those vessels.
Depreciation and amortization
Depreciation and amortization expense for the three months ended September 30, 2022 and 2021 was $15.4 million and $13.6 million, respectively. Total depreciation and amortization expense for the three months ended September 30, 2022 includes $11.9 million of vessel and other fixed asset depreciation and $3.5 million relating to the amortization of deferred drydocking costs. Comparable amounts for the three months ended September 30, 2021 were $11.4 million of vessel and other fixed asset depreciation and $2.2 million of amortization of deferred drydocking costs. Depreciation and amortization increased $1.3 million due to the impact of thirteen drydocks completed since the third quarter of 2021 and increased $0.5 million due to an increase in the cost base of our owned fleet due to the capitalization of BWTS on our vessels and the acquisition of three vessels in the second half of 2021, offset in part by the sale of one vessel in the third quarter of 2022.
Depreciation and amortization expense for the nine months ended September 30, 2022 and 2021 was $45.2 million and $39.2 million, respectively. Total depreciation and amortization expense for the nine months ended September 30, 2022 includes $35.5 million of vessel and other fixed asset depreciation and $9.7 million relating to the amortization of deferred drydocking costs. Comparable amounts for the nine months ended September 30, 2021 were $33.0 million of vessel and other fixed asset depreciation and $6.2 million of amortization of deferred drydocking costs. Depreciation and amortization increased $3.5 million due to the impact of 13 drydocks completed since the third quarter of 2021 and increased $2.6 million due to an increase in the cost base of our owned fleet due to the acquisition of nine vessels in 2021 and the capitalization of BWTS on our vessels, offset in part by the sale of one vessel in the third quarter of 2021 and the sale of one vessel in the third quarter of 2022.
General and administrative expenses
General and administrative expenses for the three months ended September 30, 2022 and 2021 were $9.7 million and $7.9 million, respectively. General and administrative expenses include stock-based compensation of $1.4 million and $0.8 million for the three months ended September 30, 2022 and 2021, respectively. General and administrative expenses increased $0.7 million due to higher stock-based compensation expense and increased $0.5 million due to an increase in compensation and benefits.
General and administrative expenses for the nine months ended September 30, 2022 and 2021 were $29.6 million and $23.6 million, respectively. General and administrative expenses include stock-based compensation of $4.5 million and $2.2 million for the nine months ended September 30, 2022 and 2021, respectively. General and administrative expenses increased $2.3 million due to higher stock-based compensation expense, increased $1.7 million due to an increase in compensation and benefits, and increased $1.0 million due to higher professional fees.
Other operating expense
Other operating expense for the three months ended September 30, 2022 and 2021 was $2.5 million and $0.8 million, respectively. Other operating expense for the three months ended September 30, 2022 was primarily comprised of costs associated with a corporate transaction that did not materialize. Other operating expense for the three months ended September 30, 2021 was primarily comprised of costs incurred relating to a 2021 U.S. government investigation into an allegation that one of our vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The Company posted a surety bond as security for any fines and penalties. Other operating expense consists of expenses incurred relating to this incident, which include legal fees, surety bond expenses, vessel offhire, crew changes and travel costs.
Other operating expense for the nine months ended September 30, 2022 and 2021 was $2.6 million and $2.3 million, respectively. Other operating expense for the nine months ended September 30, 2022 was primarily comprised of costs associated with a corporate transaction that did not materialize. Other operating expense for the nine months ended September 30, 2021 was primarily comprised of costs incurred relating to a 2021 U.S. government investigation into an allegation that one of our vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The Company posted a surety bond as security for any fines and penalties. Other operating expense consists of expenses incurred relating to this incident, which include legal fees, surety bond expenses, vessel offhire, crew changes and travel costs.
Interest expense
Interest expense for the three months ended September 30, 2022 and 2021 was $4.2 million and $8.5 million, respectively. Interest expense decreased $1.4 million due to lower effective interest rates and decreased $1.4 million due to lower outstanding principal balances, each as a result of the refinancing of the Company’s debt in the fourth quarter of 2021 and decreased $1.4 million due to lower amortization of debt discounts and deferred financing costs primarily as a result of the Company’s adoption of ASU 2020-06.
Interest expense for the nine months ended September 30, 2022 and 2021 was $13.0 million and $25.6 million, respectively. Interest expense decreased $4.6 million due to lower outstanding principal balances and decreased $4.4 million due to lower effective interest rates, each as a result of the refinancing of the Company’s debt in the fourth quarter of 2021 and decreased $3.8 million due to lower amortization of debt discounts and deferred financing costs primarily as a result of the Company’s adoption of ASU 2020-06.
The Company entered into interest rate swaps in October 2021 to fix the interest rate exposure on the Global Ultraco Debt Facility term loan. As a result of these swaps, which average 87 basis points, the Company’s interest rate exposure is fully fixed insulating the Company from the rising interest rate environment.
Realized and unrealized (gain)/loss on derivative instruments, net
Realized and unrealized gain on derivative instruments, net for the three months ended September 30, 2022 was $11.3 million compared to a realized and unrealized loss on derivative instruments, net of $9.0 million for the three months ended September 30, 2021. The $11.3 million gain is primarily related to $14.3 million in gains earned on our freight forward agreements as a result of the decrease in charter hire rates during the third quarter, offset by $3.0 million in bunker swap losses for the three months ended September 30, 2022. For the three months ended September 30, 2021, the Company had $9.4 million in losses on our freight forward agreements due to the sharp increase in charter hire rates during the third quarter of 2021, offset by $0.4 million in bunker swap gains.
Realized and unrealized gain on derivative instruments, net for the nine months ended September 30, 2022 was $13.3 million compared to a realized and unrealized loss on derivative instruments, net of $45.6 million for the nine months ended September 30, 2021. The $13.3 million gain is primarily attributable to $9.4 million in gains earned on our freight forward agreements as a result of the decrease in charter hire rates during 2022 and $3.9 million in bunker swap gains for the nine months ended September 30, 2022. For the comparable period in the prior year, the Company had $47.9 million in losses on our freight forward agreements due to the sharp increase in charter hire rates in 2021, offset by $2.3 million in bunker swap gains.
The non-cash unrealized gains on forward freight agreements (“FFA”) for the remaining three months of 2022 as of September 30, 2022 amounted to $9.4 million based on 675 net days and the non-cash unrealized losses on FFAs for the calendar year 2023 amounted to less than $0.1 million on 135 net days.
The following table shows our open positions on FFAs as of September 30, 2022:
FFA Period
Number of Days
Average FFA Contract Price
Quarter ending December 31, 2022 – Sell Positions
2,010
$
21,981
Quarter ending December 31, 2022 – Buy Positions
(1,335
)
$
16,461
Year ending December 31, 2023 – Sell Positions
720
$
14,525
Year ending December 31, 2023 – Buy Positions
(855
)
$
14,308
Liquidity and Capital Resources
Nine Months Ended
(In thousands)
September 30, 2022
September 30, 2021
Net cash provided by operating activities
$
242,491
$
120,915
Net cash provided by/(used in) investing activities
4,090
(106,767
)
Net cash (used in)/provided by financing activities
(135,198
)
22,648
Net increase in cash, cash equivalents and restricted cash
111,383
36,796
Cash, cash equivalents and restricted cash at beginning of period
86,222
88,849
Cash, cash equivalents and restricted cash at end of period
$
197,605
$
125,645
Net cash provided by operating activities for the nine months ended September 30, 2022 and 2021 was $242.5 million and $120.9 million, respectively. The increase in cash flows provided by operating activities resulted primarily from the increase in revenues due to higher charter hire rates.
Net cash provided by investing activities for the nine months ended September 30, 2022 was $4.1 million, compared to net cash used in investing activities of $106.8 million in the comparable period in 2021. During the nine months ended September 30, 2022, the Company received net proceeds of $14.9 million from the sale of a vessel and paid $5.7 million for the purchase of ballast water treatment systems (“BWTS”) on our fleet, $4.1 million as an advance for the purchase of a vessel to be delivered in the fourth quarter of 2022, $0.8 million for vessel improvements and $0.3 million for other fixed assets.
Net cash used in financing activities for the nine months ended September 30, 2022 was $135.2 million, compared to net cash provided by financing activities of $22.6 million in the comparable period in 2021. During the nine months ended September 30, 2022, the Company paid $81.6 million in dividends, repaid $37.4 million of the term loan under the Global Ultraco Debt Facility, paid $14.2 million to repurchase a portion of our Convertible Bond Debt and $2.4 million to settle net share equity awards.
As of September 30, 2022, our cash and cash equivalents including noncurrent restricted cash was $197.6 million compared to $86.2 million as of December 31, 2021.
In addition, as of September 30, 2022, we had $100.0 million in an undrawn revolver facility available under the Global Ultraco Debt Facility.
As of September 30, 2022, the Company’s outstanding debt of $354.3 million, which excludes debt discount and debt issuance costs, consisted of $250.2 million under the Global Ultraco Debt Facility and $104.1 million of Convertible Bond Debt.
During September 2022, the Company repurchased $10.0 million in aggregate principal amount of Convertible Bond Debt for $14.2 million in cash and cancelled the repurchased debt. The related amount of Convertible Bond Debt was not converted by the holders and no common shares were issued as a result of the repurchase transactions. The related amount of Convertible Bond Debt would have converted into 296,990 common shares (assuming the conversion occurred as of September 30, 2022). From time to time, the Company may, subject to market condition and other factors and to the extent permitted by law, opportunistically repurchase the Convertible Bond Debt in the open market or through privately negotiated transactions.
We continuously evaluate potential transactions that we believe will be accretive to earnings, enhance shareholder value or are in the best interests of the Company, including without limitation, business combinations, the acquisition of vessels or related businesses, repayment or refinancing of existing debt, the issuance of new securities, share and debt repurchases or other transactions.
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 the vessels.
In addition to acquisitions that we may undertake in future periods, the Company’s 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 drydocking, the costs are relatively predictable. Management anticipates that vessels are to be drydocked every two and a half years for vessels older than 15 years and five years for vessels younger than 15 years. 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. During the nine months ended September 30, 2022, eight of our vessels completed drydock and we incurred drydocking expenditures of $18.5 million. During the nine months ended September 30, 2021, six of our vessels completed drydock and we incurred drydocking expenditures of $10.7 million.
The following table represents certain information about the estimated costs for anticipated vessel drydockings, BWTS, and vessel upgrades in the next four quarters, along with the anticipated off-hire days:
Projected Costs (1) (in millions)
Quarter Ending
Off-hire Days(2)
BWTS
Drydocks
Vessel Upgrades(3)
December 31, 2022
177
$
0.3
$
1.5
$
—
March 31, 2023
233
0.1
5.4
0.4
June 30, 2023
186
0.7
3.8
0.4
September 30, 2023
193
0.7
4.0
0.4
(1) Actual costs will vary based on various factors, including where the drydockings are performed.
(2) Actual duration of off-hire days will vary based on the age and condition of the vessel, yard schedules and other factors.
(3) Vessel upgrades represents capex relating to items such as high-spec low friction hull paint which improves fuel efficiency and reduces fuel costs, NeoPanama Canal chock fittings enabling vessels to carry additional cargo through the new Panama Canal locks, as well as other retrofitted fuel-saving devices. Vessel upgrades are discretionary in nature and evaluated on a business case-by-case basis.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
The following table summarizes the Company’s selected condensed consolidated financial and other data for the periods indicated below.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three and Nine Months Ended September 30, 2022 and 2021 (In thousands, except share and per share data)
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Revenues, net
$
185,313
$
183,393
$
568,406
$
409,816
Voyage expenses
40,792
30,273
120,710
81,411
Vessel operating expenses
33,091
28,125
88,213
73,323
Charter hire expenses
19,772
10,724
63,768
25,374
Depreciation and amortization
15,407
13,570
45,241
39,187
General and administrative expenses
9,666
7,948
29,611
23,559
Other operating expense
2,469
792
2,643
2,312
Gain on sale of vessel
(9,336
)
(3,962
)
(9,336
)
(3,962
)
Total operating expenses
111,861
87,470
340,850
241,204
Operating income
73,452
95,923
227,556
168,612
Interest expense
4,236
8,511
13,021
25,561
Interest income
(881
)
(19
)
(1,100
)
(52
)
Realized and unrealized (gain)/loss on derivative instruments, net
(11,293
)
8,991
(13,281
)
45,588
Loss on debt extinguishment
4,173
99
4,173
99
Total other (income)/expense, net
(3,765
)
17,582
2,813
71,196
Net income
$
77,217
$
78,341
$
224,743
$
97,416
Weighted average shares outstanding:
Basic
12,993,450
12,802,401
12,985,329
12,237,288
Diluted
16,201,852
15,936,374
16,219,264
15,354,481
Per share amounts:
Basic net income
$
5.94
$
6.12
$
17.31
$
7.96
Diluted net income
$
4.77
$
4.92
$
13.86
$
6.34
CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2022 and December 31, 2021 (In thousands, except share data and par values)
September 30, 2022
December 31, 2021
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents
$
195,030
$
86,147
Accounts receivable, net of a reserve of $2,192 and $1,818, respectively
33,554
28,456
Prepaid expenses
4,585
3,362
Inventories
26,274
17,651
Collateral on derivatives
1,200
15,081
Fair value of derivative assets – current
18,353
4,669
Other current assets
703
667
Total current assets
279,699
156,033
Noncurrent assets:
Vessels and vessel improvements, at cost, net of accumulated depreciation of $249,384 and $218,670, respectively
876,547
908,076
Advance for vessel purchase
4,125
—
Operating lease right-of-use assets
34,368
17,017
Other fixed assets, net of accumulated depreciation of $1,566 and $1,403, respectively
346
257
Restricted cash – noncurrent
2,575
75
Deferred drydock costs, net
45,881
37,093
Fair value of derivative assets – noncurrent
9,873
3,112
Advances for ballast water systems and other assets
2,577
4,995
Total noncurrent assets
976,292
970,625
Total assets
$
1,255,991
$
1,126,658
LIABILITIES & STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
$
21,058
$
20,781
Accrued interest
1,635
2,957
Other accrued liabilities
17,012
17,994
Fair value of derivative liabilities – current
611
4,253
Current portion of operating lease liabilities
30,742
15,728
Unearned charter hire revenue
14,794
12,088
Current portion of long-term debt
49,800
49,800
Total current liabilities
135,652
123,601
Noncurrent liabilities:
Global Ultraco Debt Facility, net of debt issuance costs
193,202
229,290
Convertible Bond Debt, net of debt discount and debt issuance costs
103,425
100,954
Noncurrent portion of operating lease liabilities
3,626
1,282
Other noncurrent accrued liabilities
883
265
Total noncurrent liabilities
301,136
331,791
Total liabilities
436,788
455,392
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value, 700,000,000 shares authorized, 13,003,516 and 12,917,027 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
130
129
Additional paid-in capital
964,494
982,746
Accumulated deficit
(162,712
)
(313,495
)
Accumulated other comprehensive income
17,291
1,886
Total stockholders’ equity
819,203
671,266
Total liabilities and stockholders’ equity
$
1,255,991
$
1,126,658
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30, 2022 and 2021 (In thousands)
Nine Months Ended
September 30, 2022
September 30, 2021
Cash flows from operating activities:
Net income
$
224,743
$
97,416
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
35,513
32,951
Amortization of operating lease right-of-use assets
21,083
10,536
Amortization of deferred drydocking costs
9,728
6,236
Amortization of debt discount and debt issuance costs
1,627
5,443
Loss on debt extinguishment
4,173
99
Gain on sale of vessel
(9,336
)
(3,962
)
Net unrealized (gain)/loss on fair value of derivatives
(8,517
)
24,193
Stock-based compensation expense
4,542
2,235
Drydocking expenditures
(18,527
)
(10,737
)
Changes in operating assets and liabilities:
Accounts payable
650
4,639
Accounts receivable
(5,098
)
(10,645
)
Accrued interest
(1,241
)
2,385
Inventories
(8,622
)
(5,467
)
Operating lease liabilities current and noncurrent
(21,076
)
(11,304
)
Collateral on derivatives
13,881
(31,370
)
Fair value of derivatives, other current and noncurrent assets
(183
)
(1,150
)
Other accrued liabilities
(2,332
)
1,898
Prepaid expenses
(1,223
)
(1,455
)
Unearned charter hire revenue
2,706
8,974
Net cash provided by operating activities
242,491
120,915
Cash flows from investing activities:
Purchase of vessels and vessel improvements
(781
)
(109,385
)
Advances for vessel purchases
(4,125
)
(2,200
)
Purchase of scrubbers and ballast water systems
(5,695
)
(4,557
)
Proceeds from hull and machinery insurance claims
—
245
Proceeds from sale of vessel
14,944
9,159
Purchase of other fixed assets
(253
)
(29
)
Net cash provided by/(used in) investing activities
4,090
(106,767
)
Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility
—
16,500
Repayment of Norwegian Bond Debt
—
(4,000
)
Repayment of term loan under New Ultraco Debt Facility
—
(24,258
)
Repayment of revolver loan under New Ultraco Debt Facility
—
(55,000
)
Repayment of revolver loan under Super Senior Facility
—
(15,000
)
Proceeds from revolver loan under New Ultraco Debt Facility
—
55,000
Proceeds from Holdco Revolving Credit Facility
—
24,000
Proceeds from issuance of shares under ATM Offering, net of commissions
—
27,242
Repayment of term loan under Global Ultraco Debt Facility
(37,350
)
—
Repurchase of Convertible Bond Debt
(14,188
)
—
Cash received from exercise of stock options
85
56
Cash used to settle net share equity awards
(2,351
)
(986
)
Equity offerings issuance costs
201
(292
)
Financing costs paid to lenders
(18
)
(614
)
Dividends paid
(81,577
)
—
Net cash (used in)/provided by financing activities
(135,198
)
22,648
Net increase in Cash, cash equivalents and restricted cash
111,383
36,796
Cash, cash equivalents and restricted cash at beginning of period
86,222
88,849
Cash, cash equivalents and restricted cash at end of period
$
197,605
$
125,645
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest
$
12,861
$
17,462
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
$
38,956
$
22,499
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities
$
—
$
500
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities
$
3,916
$
3,259
Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities
$
1,551
$
—
Accrual for issuance costs for ATM Offering included in Other accrued liabilities
$
—
$
104
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities
$
—
$
509
Supplemental Information – Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission (“SEC”). We believe these measures provide important supplemental information to investors to use in evaluating ongoing operating results. We use these measures, together with accounting principles generally accepted in the United States (“GAAP” or “U.S. GAAP”) measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations, that when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our press releases, provide a more complete understanding of factors and trends affecting our business. We strongly encourage you to review all of our financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.
Non-GAAP Financial Measures
(1) Adjusted net income and Adjusted Basic and Diluted net income per share
We define Adjusted net income and Adjusted Basic and Diluted net income per share as Net income and Basic and Diluted net income per share, each under U.S. GAAP, respectively, adjusted to exclude non-cash unrealized losses/(gains) on derivatives and loss on debt extinguishment. The Company utilizes derivative instruments such as FFAs to partially hedge against its underlying long physical position in ships (as represented by owned and third-party chartered-in vessels). The Company does not apply hedge accounting, and, as such, the mark-to-market gains/(losses) on forward hedge positions impact current quarter results, causing timing mismatches in the Condensed Consolidated Statements of Operations. Additionally, we believe that loss on debt extinguishment is not representative of our normal business operations. We believe that Adjusted net income and Adjusted Basic and Diluted net income per share are more useful to analysts and investors in comparing the results of operations and operational trends between periods and relative to other peer companies in our industry. Our Adjusted net income should not be considered an alternative to net income, operating income, cash flows provided by operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. The Company’s calculation of Adjusted net income may not be comparable to those reported by other companies.
The following table presents the reconciliation of Net income, as recorded in the Condensed Consolidated Statements of Operations, to Adjusted net income:
Reconciliation of GAAP Net income to Adjusted net income For the Three and Nine Months Ended September 30, 2022 and 2021 (In thousands, except share and per share data)
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Net income
$
77,217
$
78,341
$
224,743
$
97,416
Adjustments to reconcile net income to Adjusted net income:
Unrealized (gain)/loss on derivative instruments
(7,124
)
(6,347
)
(8,517
)
24,193
Loss on debt extinguishment
4,173
99
4,173
99
Adjusted net income
$
74,266
$
72,093
$
220,399
$
121,708
Weighted average shares outstanding:
Basic
12,993,450
12,802,401
12,985,329
12,237,288
Diluted (1)
16,201,852
15,936,374
16,219,264
15,354,481
Per share amounts:
Basic adjusted net income
$
5.72
$
5.63
$
16.97
$
9.95
Diluted adjusted net income(1)
$
4.58
$
4.52
$
13.59
$
7.93
(1) The number of shares used in the calculation of Diluted net income per share and Diluted adjusted net income per share for the three and nine months ended September 30, 2022 and 2021 includes 3,092,230 and 2,906,035, respectively, in dilutive shares related to the Convertible Bond Debt based on the if-converted method in addition to the restricted stock awards, options, and restricted stock units based on the treasury stock method.
(2) EBITDA and Adjusted EBITDA
We define EBITDA as net income under U.S. GAAP adjusted for interest, income taxes, depreciation and amortization.
Adjusted EBITDA is a non-GAAP financial measure that is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors, commercial banks and others, to assess our operating performance as compared to that of other companies in our industry, without regard to financing methods, capital structure or historical costs basis. Adjusted EBITDA should not be considered an alternative to net income, operating income, cash flows provided by operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. The Company’s calculation of Adjusted EBITDA may not be comparable to those reported by other companies. Adjusted EBITDA represents EBITDA adjusted to exclude the items which represent certain non-cash, one-time and other items such as vessel impairment, gain/(loss) on sale of vessels, impairment of operating lease right-of-use assets, unrealized (gain)/loss on derivatives, loss on debt extinguishment and stock-based compensation expenses that the Company believes are not indicative of the ongoing performance of its core operations.
The following table presents a reconciliation of Net income, as recorded in the Condensed Consolidated Statements of Operations, to EBITDA and Adjusted EBITDA:
Reconciliation of GAAP Net income to EBITDA and Adjusted EBITDA For the Three and Nine Months Ended September 30, 2022 and 2021 (In thousands)
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Net income
$
77,217
$
78,341
$
224,743
$
97,416
Adjustments to reconcile net income to EBITDA:
Interest expense
4,236
8,511
13,021
25,561
Interest income
(881
)
(19
)
(1,100
)
(52
)
Income taxes
—
—
—
—
EBIT
80,572
86,833
236,664
122,925
Depreciation and amortization
15,407
13,570
45,241
39,187
EBITDA
95,979
100,403
281,905
162,112
Non-cash, one-time and other adjustments to EBITDA(1)
(10,838
)
(9,433
)
(9,138
)
22,565
Adjusted EBITDA
$
85,141
$
90,970
$
272,767
$
184,677
(1) One-time and other adjustments to EBITDA for the three and nine months ended September 30, 2022 includes stock-based compensation, loss on debt extinguishment, gain on sale of vessel and net unrealized gains on derivative instruments. One-time and other adjustments to EBITDA for the three and nine months ended September 30, 2021 includes stock-based compensation, loss on debt extinguishment, gain on sale of vessel and net unrealized (gains)/losses on derivative instruments.
(3) TCE revenue and TCE
Time charter equivalent (“TCE”) is a non-GAAP financial measure that is commonly used in the shipping industry 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 defines TCE revenue as revenues, net less voyage expenses and charter hire expenses, adjusted for realized gains/(losses) on FFAs and bunker swaps and defines TCE as TCE revenue divided by the number of owned available days. Owned available days is the number of our ownership days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. TCE provides additional meaningful information in conjunction with shipping Revenues, net, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their performance. The Company’s calculation of TCE may not be comparable to that reported by other companies. The Company calculates relative performance by comparing TCE against the Baltic Supramax Index (“BSI”) adjusted for commissions and fleet makeup.
The following table presents the reconciliation of Revenues, net, as recorded in the Condensed Consolidated Statements of Operations, to TCE:
Reconciliation of Revenues, net to TCE For the Three and Nine Months Ended September 30, 2022 and 2021 (In thousands, except owned available days and TCE)
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Revenues, net
$
185,313
$
183,393
$
568,406
$
409,816
Less:
Voyage expenses
(40,792
)
(30,273
)
(120,710
)
(81,411
)
Charter hire expenses
(19,772
)
(10,724
)
(63,768
)
(25,374
)
Reversal of one legacy time charter (1)
—
—
—
(854
)
Realized gain/(loss) on FFAs and bunker swaps
4,169
(15,338
)
4,764
(21,395
)
TCE revenue
$
128,918
$
127,058
$
388,692
$
280,782
Owned available days
4,588
4,368
13,599
12,685
TCE
$
28,099
$
29,088
$
28,582
$
22,135
(1) Represents revenues, net of voyage and charter-hire expenses associated with a 2014 charter-in vessel that is not representative of the Company’s current performance.
Glossary of Terms:
Ownership days: We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we recorded during a period.
Chartered-in under operating lease days: We define chartered-in under operating lease days as the aggregate number of days in a period during which we chartered-in vessels. Periodically, the Company charters in vessels on a single trip basis.
Available days: We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys and other reasons which prevent the vessel from performing under the relevant charter party such as surveys, medical events, stowaway disembarkation, etc. 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: We define operating days as the number of available days in a period less the aggregate number of days that our 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: We calculate 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 high utilization rates.
ATM Offering: In March 2021, the Company entered into an at market issuance sales agreement with B. Riley Securities, Inc., BTIG, LLC and Fearnley Securities, Inc., as sales agents, to sell shares of common stock, par value $0.01 per share, of the Company with aggregate gross sales proceeds of up to $50.0 million, from time to time through an “at-the-market” offering program.
Definitions of capitalized terms related to our Indebtedness
Global Ultraco Debt Facility: Global Ultraco Debt Facility refers to the senior secured credit facility entered into by Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its vessel-owning subsidiaries as guarantors, with the lenders party thereto (the “Lenders”), Credit Agricole Corporate and Investment Bank (“Credit Agricole”), Skandinaviska Enskilda Banken AB (PUBL), Danish Ship Finance A/S, Nordea Bank ABP, Filial I Norge, DNB Markets Inc., Deutsche Bank AG, and ING Bank N.V., London Branch. The Global Ultraco Debt Facility provides for an aggregate principal amount of $400.0 million, which consists of (i) a term loan facility in an aggregate principal amount of $300.0 million and (ii) a revolving credit facility in an aggregate principal amount of $100.0 million. The Global Ultraco Debt Facility is secured by 49 of the Company’s vessels. As of September 30, 2022, $100.0 million of the revolving credit facility remains undrawn.
Convertible Bond Debt: Convertible Bond Debt refers to 5.0% Convertible Senior Notes due 2024 issued by the Company on July 29, 2019 that will mature on August 1, 2024.
New Ultraco Debt Facility: New Ultraco Debt Facility refers to the senior secured credit facility for $208.4 million entered into by Ultraco Shipping LLC, a wholly-owned subsidiary of the Company, as the borrower (the “New Ultraco Debt Facility”), with the Company and certain of its indirectly vessel-owning subsidiaries, as guarantors (the “Guarantors”), the lenders party thereto, the swap banks party thereto, ABN AMRO Capital USA LLC (“ABN AMRO”), Credit Agricole, Skandinaviska Enskilda Banken AB (PUBL) and DNB Markets Inc., as mandated lead arrangers and bookrunners, and Credit Agricole Corporate and Investment Bank, as arranger, security trustee and facility agent. The New Ultraco Debt Facility was refinanced on October 1, 2021.
Norwegian Bond Debt: Norwegian Bond Debt refers to the Senior Secured Bonds issued by Eagle Bulk Shipco LLC, a wholly-owned subsidiary of the Company (“Shipco”), as borrower, certain wholly-owned vessel-owning subsidiaries of Shipco, as guarantors (“Shipco Vessels”), on November 28, 2017 for $200.0 million, pursuant to those certain Bond Terms, dated as of November 22, 2017, by and between Shipco, as issuer, and Nordic Trustee AS, a company existing under the laws of Norway (the “Bond Trustee”). The bonds outstanding under the Norwegian Bond Debt were repaid in full on October 18, 2021 after the expiry of the requisite notice period.
Super Senior Facility: Super Senior Facility refers to the credit facility for $15.0 million, by and among Shipco as borrower, and ABN AMRO, as original lender, mandated lead arranger and agent. During the third quarter of 2021, the Company cancelled the Super Senior Revolving Facility. There were no outstanding amounts under the facility.
Holdco Revolving Credit Facility: Holdco Revolving Credit Facility refers to the senior secured revolving credit facility for $35.0 million, by and among Eagle Bulk Holdco LLC (“Holdco”), a wholly-owned subsidiary of the Company, as borrower, the Company and certain wholly-owned vessel-owning subsidiaries of Holdco, as joint and several guarantors, the banks and financial institutions named therein as lenders and Credit Agricole, as lender, facility agent, security trustee and mandated lead arranger with Nordea Bank ABP, New York Branch. The Holdco Revolving Credit Facility was refinanced on October 1, 2021.
Conference Call Information
As previously announced, members of Eagle Bulk’s senior management team will host a teleconference and webcast at 8:00 a.m. ET on Friday, November 4, 2022, to discuss the third quarter results.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at ir.eagleships.com. To access the call by phone, please register at https://register.vevent.com/register/BIcc27852061574d51b01e45b8dc164b47 and you will be provided with dial-in details. A replay of the webcast will be available on the Investor Relations page of the Company’s website.
About Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. (“Eagle” or the “Company”) is a U.S. based fully integrated, shipowner-operator providing global transportation solutions to a diverse group of customers including miners, producers, traders, and end users. Headquartered in Stamford, Connecticut, with offices in Singapore and Copenhagen, Denmark, Eagle focuses exclusively on the versatile mid-size drybulk vessel segment and owns one of the largest fleets of Supramax/Ultramax vessels in the world. The Company performs all management services in-house (including: strategic, commercial, operational, technical, and administrative) and employs an active management approach to fleet trading with the objective of optimizing revenue performance and maximizing earnings on a risk-managed basis. For further information, please visit our website: www.eagleships.com.
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, filings with the SEC, 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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 as a result of COVID-19, including the availability and effectiveness of vaccines on a widespread basis and the impact of any mutations of the virus, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in vessel operating expenses, including drydocking 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 including the current conflict between Russia and Ukraine, which may impact our ability to retain and source crew, and in turn, could adversely affect our revenue, expenses and profitability, 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 SEC.
CONTACT
Company Contact: Frank De Costanzo Chief Financial Officer Eagle Bulk Shipping Inc. Tel. +1 203-276-8100 Email: investor@eagleships.com
Media: ICR, Inc. Tel. +1 203-682-8350 ——————————————————————————– Source: Eagle Bulk Shipping Inc.
How the U.S. and its Allies Plan to Put the Squeeze on Russian Oil Profits
Volatility in oil prices this week has been extreme, even by the standards already set this decade. The price of WTI rose nearly 5% just today. The month ahead promises to create even more volatility as Saudi Arabia just cut prices to Asia; meanwhile, the US and its allies have agreed to put a cap on Russian oil. Details on many of these influences have not yet been worked out or announced. What is known is that the price cap and other sanctions against Russia begin in one month. The commodity trading days leading to the planned December 5 start date and the weeks that follow ought to create a great deal of speculation and price movement. Here is what we do know the allies have agreed upon.
The Cap Map
Sales of Russian oil to the participating countries will be subject to a price cap. The cap pertains to the initial purchase of a load of seaborne Russian oil. The agreement settled by the US and its allies doesn’t subject any subsequent sale of crude as falling under the same cap. The cost of transporting Russian oil is not included in the calculation of the cap. However, these rules only apply once the load of oil makes land. Out at sea, the rules are different.
Trades of Russian oil that occur once the load is at sea are expected to still fall under the cap. However, if the Russia-originated oil has been refined into products such as diesel or gasoline, then it is not subject to the cap.
Restrictions and Jurisdictions
Under the expected price-cap plan, the Group of Seven and Australia are planning to restrict firms in their countries from providing insurance and other key maritime services for any Russian oil shipment unless the oil is sold below a set price. Because much of the world’s maritime services are based in G-7 countries and the European Union, the Western partners are aiming to effectively dictate the price at which Russia can sell some of its oil on global markets.
The Precise Price
The US and its allies have yet to set the price for the scheme, but they expect to define the level or range well before the December 5 implementation date. The slow pace of finalizing the plan have left some oil-market participants concerned that shipments of Russian oil at sea on December 5 could face the cap restrictions. The US Treasury Department, earlier this week, has clarified how this would be determined. The agreement rules that Russian oil shipped before December 5 would be exempt from the cap if it is unloaded at its destination by January 19.
It’s expected the price cap would not bring a crushing blow to banks, insurers, shippers, and traders that help make Russian oil available on global markets. The goal is to cut into the profits Russia earns from its oil sales, the hope by participants is to keep global markets supplied with Russian oil and keep energy prices steady.
The precise price is unknown, however a price range in the mid-60s has been discussed as the possible cap range, as it represents levels in line with where Russian oil had traded before the big run-up.
What Else?
Officials speaking for Russia have threatened to cut their oil production in retaliation for any price cap. It remains seen whether this game of each party partaking in ugly medicine for the survival of both will play out in unexpected ways.
The plan for the price cap for Russian crude will go into effect on December 5, while two separate price limits for refined Russian petroleum products will kick in on February 5.
Expect volatility in oil prices, leading up to and after the caps go into effect. At the same time, expect the unexpected as it relates to energy.
NEW YORK, Oct. 25, 2022 (GLOBE NEWSWIRE) — Genco Shipping & Trading Limited (NYSE: GNK) announced today that it will hold a conference call to discuss the Company’s results for the third quarter of 2022 on Thursday, November 10, 2022 at 8:30 a.m. Eastern Time. The conference call will also be broadcast live over the Internet and include a slide presentation. The Company will issue financial results for the third quarter ended September 30, 2022 on Wednesday, November 9, 2022 after the close of market trading.
What:
Third Quarter 2022 Conference Call
When:
Thursday, November 10, 2022 at 8:30 a.m. Eastern Time
Where:
There are two ways to access the call:
Dial-in: 786-697-3501 or 866-580-3963; Passcode: 8740274
Please dial in at least 10 minutes prior to 8:30 a.m. Eastern Time to ensure a prompt start to the call.
If you are unable to participate at this time, a replay of the call will be available for two weeks at 866-583-1035. Enter the code 8740274 to access the audio replay. The webcast will also be archived on the Company’s website: http://www.gencoshipping.com.
About Genco Shipping & Trading Limited Genco Shipping & Trading Limited is a U.S. based drybulk ship owning company focused on the seaborne transportation of commodities globally. We provide a full-service logistics solution to our customers utilizing our in-house commercial operating platform, as we transport key cargoes such as iron ore, grain, steel products, bauxite, cement, nickel ore among other commodities along worldwide shipping routes. Our wholly owned high quality, modern fleet of dry cargo vessels consists of the larger Capesize (major bulk) and the medium-sized Ultramax and Supramax vessels (minor bulk) enabling us to carry a wide range of cargoes. We make capital expenditures from time to time in connection with vessel acquisitions. As of October 25, 2022, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, 15 Ultramax and 12 Supramax vessels with an aggregate capacity of approximately 4,636,000 dwt and an average age of 10.6 years.
HOUSTON, Oct. 25, 2022 (GLOBE NEWSWIRE) — Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD) today announced that it will release the financial results for its three and nine months ended September 30, 2022 on Tuesday, November 1, 2022 at 7:00 a.m. C.D.T. A conference call with the Company will be held the same day at 9:00 a.m. C.D.T.
Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will be given a unique PIN to gain immediate access to the call. Pre-registration may be completed at any time up to the call start time.
The live call and replay can also be heard at https://edge.media-server.com/mmc/p/ka3fjd5a, or on the Company’s website, www.gldd.com, under Events on the Investor Relations page. A copy of the press release will be available on the Company’s website.
The Company Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 132-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
For further information contact: Tina Baginskis Director, Investor Relations 630-574-3024
Seanergy Maritime Holdings Corp. is the only pure-play Capesize ship-owner publicly listed in the US. Seanergy provides marine dry bulk transportation services through a modern fleet of Capesize vessels. The Company’s operating fleet consists of 17 Capesize vessels with an average age of approximately 12 years and aggregate cargo carrying capacity of approximately 3,011,083 dwt. The Company is incorporated in the Marshall Islands and has executive offices in Glyfada, Greece. The Company’s common shares trade on the Nasdaq Capital Market under the symbol “SHIP” and its Class B warrants under “SHIPZ”.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
We are making adjustments to our models to reflect lower shipping rates. Dry bulk shipping rates have been weak in the third quarter. As a result, we are lowering the assumed rate for uncommitted ships to $19,500/day from $23,650/day. Management guided analysts to a $23,650/day number when reporting second quarter results but now believes the rate will be below $20,000/day. Every $1,000 reduction in uncommitted daily TCE rates reduces net income by $1.1 million or $0.01 per share.
We are also raising our interest expense estimate to reflect higher interest rates. We are raising our third quarter interest expense estimate to $5.0 million from $3.5 million to reflect higher LIBOR rates. LIBOR rates have increased from 0.1% to more than 4.0% in the last twelve months. We are also formally incorporating the $28 million term loan that was announced last week into our models.
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Pangaea Logistics Solutions Ltd. (NASDAQ: PANL) provides logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The Company addresses the transportation needs of its customers with a comprehensive set of services and activities, including cargo loading, cargo discharge, vessel chartering, and voyage planning. Learn more at www.pangaeals.com.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
We are adjusting our models to reflect lower shipping rates in the third quarter. Although shipping rates remains high relative to historical levels, they have decreased relative to peak levels reached this spring.
We are lowering our revenue, cashflow and earnings estimates in response. We now project third-quarter and 2022 revenues of $158.6 million an $714.1 million, respectively, down from our previous estimates of $182.3 million and $752.2 million. Our new EBITDA estimates are $9.6 million and $112.2 million, down from $33.31 million and $142.4 million. We now estimate earnings per share of $(0.08) and $1.27 as compared to $0.45 and $1.93.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
