Baltic Trading Limited Announces Fourth Quarter Financial Results
| PR Newswire Association LLC |
The following financial review discusses the results for the three months and years ended
Fourth Quarter 2013 and Year-to-Date Highlights
- Declared a
$0.03 per share dividend payable on or aboutMarch 17, 2014 to all shareholders of record as ofMarch 10, 2014 based on Q4 2013 results; - Recorded net income of
$0.6 million , or$0.01 basic and diluted earnings per share for the fourth quarter; - Agreed to acquire two Ultramax newbuildings, to be named the Baltic Hornet and the Baltic Wasp, for an aggregate purchase price of
$56.0 million , with the option to acquire two additional such vessels;- Exercised the option to acquire the two additional Ultramax newbuildings, to be named the Baltic Scorpion and the Baltic Mantis, for an aggregate purchase price of
$56.0 million ;
- Exercised the option to acquire the two additional Ultramax newbuildings, to be named the Baltic Scorpion and the Baltic Mantis, for an aggregate purchase price of
- Completed the acquisition of the Baltic Tiger and the Baltic Lion, two modern Capesize vessels;
- Executed a
$44 million credit agreement with DVB to partially fund the acquisition of the Baltic Tiger and the Baltic Lion on favorable terms; and - Raised
$58.2 million of gross proceeds in a follow-on equity offering.
Financial Review: 2013 Fourth Quarter
The Company recorded net income for the fourth quarter of 2013 of
EBITDA was
The Company's revenues increased by 104% to
The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet was
Total operating expenses were
Daily vessel operating expenses, or DVOE, decreased to
Financial Review: Full Year 2013
The Company recorded a net loss of
Liquidity and Capital Resources
Net cash provided by operating activities for the years ended
Net cash used in investing activities for the year ended
Net cash provided by financing activities for the year ended December 31, 2013was
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. Currently, our fleet consists of four Capesize, four Supramax, and five Handysize vessels with an aggregate capacity of approximately 1,095,000 dwt. After the expected delivery of the four Ultramax newbuildings that
In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. None of our vessels were drydocked in the fourth quarter of 2013. We currently expect three of our vessels to be drydocked in the first quarter of 2014. We further anticipate that three of our vessels will be drydocked during the remainder of the year.
In our continuous effort to provide superior service to customers and enhance our long-term commercial prospects, we have initiated a fuel efficiency upgrade program for certain of our vessels. We believe this program will generate considerable fuel savings going forward and increase the future earnings potential for these vessels. The cost of the upgrades, which will be performed under the planned drydocking schedule, is expected to be approximately We estimate our drydocking costs for our fleet through 2014 to be: Q1 2014 Q2-Q4 2014 Estimated Costs (1) Estimated Offhire Days (2) 60 60 (1) Estimates are based on our budgeted cost of drydocking our vessels in (2) Assumes 20 days per drydocking per vessel. Actual length will vary based on the condition of the vessel, yard schedules and other factors. Summary Consolidated Financial and Other Data The following table summarizes Three Months Ended Twelve Months Ended (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (unaudited) INCOME STATEMENT DATA: Revenues $ 14,505 $ 7,116 $ 35,973 $ 27,304 Operating expenses: Voyage expenses 175 456 1,151 1,142 Voyage expenses to parent 188 86 461
346 Vessel operating expenses 5,257 4,257 17,590 16,730 General, administrative and technical management fees 1,826 1,244 5,445 4,768 Management fees to parent 790 622 2,671 2,471 Depreciation 4,393 3,724 15,564 14,814 Total operating expenses 12,629 10,389 42,882 40,271 Operating income (loss) 1,876 (3,273) (6,909) (12,967) Other (expense) income: Other expense (8) (6) (17) (28) Interest income 15 1 23 5 Interest expense (1,284) (1,051) (4,455) (4,252) Other expense, net (1,277) (1,056) (4,449) (4,275) Income (loss) before income taxes 599 (4,329) (11,358) (17,242) Income tax expense (12) (2) (34) (28) Net income (loss) $ 587 $ (4,331) $ (11,392) $ (17,270) Net earnings (loss) per share - basic $ 0.01 $ (0.19) $ (0.36) $ (0.78) Net earnings (loss) per share - diluted $ 0.01 $ (0.19) $ (0.36) $ (0.78) Shares used in per share calculation - basic 49,355,688 22,310,159 31,720,714 22,261,846 Shares used in per share calculation - diluted 49,711,011 22,310,159 31,720,714 22,261,846 BALANCE SHEET DATA: (unaudited) Cash $ 58,193 $ 3,280 Current assets 66,690 7,117 Total assets 557,367 364,370 Current liabilities 8,639 2,458 Total long-term debt (including current portion) 167,875 101,250 Shareholders' equity 385,103 260,662 Twelve Months Ended (unaudited) Net cash provided by operating activities $ 2,603 $ 433 Net cash used in investing activities (147,212) (5) Net cash provided by (used in) financing activities 199,522 (5,448) Three Months Ended Twelve Months Ended (unaudited) (unaudited) Total number of vessels at end of period 13 9 13 9 Average number of vessels(1) 11.4 9.0 9.8 9.0 Total ownership days for fleet(2) 1,053 828 3,560 3,294 Total available days for fleet(3) 1,047 827 3,534 3,283 Total operating days for fleet(4) 1,031 824 3,506 3,260 Fleet utilization(5) 98.5% 99.7% 99.2% 99.3% AVERAGE DAILY RESULTS: Time charter equivalent(6) $ 13,507 $ 7,953 $ 9,723 $ 7,863 Daily vessel operating expenses per vessel (7) 4,995 5,141 4,941 5,079 Three Months Ended Twelve Months Ended (Dollars in thousands) (Dollars in thousands) EBITDA Reconciliation: (unaudited) (unaudited) Net income (loss) $ 587 $ (4,331) $ (11,392) $ (17,270) + Net interest expense 1,269 1,050 4,432 4,247 + Depreciation 4,393 3,724 15,564 14,814 + Income tax expense 12 2 34 28 EBITDA(8) $ 6,261 $ 445 $ 8,638 $ 1,819 (1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period. (2) 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 record during a period. (3) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues. (4) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. (5) 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 number 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. (6) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses (including voyage expenses to Parent)) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. (7) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. (8) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. Our current fleet contains five groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of The following table reflects the current employment of Vessel Year Charterer Charter Employment Expected Capesize Vessels Baltic Bear 2010 101.5% of BCI (3) Baltic Wolf 2010 100% of BCI (4) Baltic Tiger 2011 102.75% of BCI (5) Baltic Lion 2012 102.75% of BCI (6) Ultramax Vessels Baltic Hornet 2014 TBD TBD TBD Q3 2014 Baltic Wasp 2014 TBD TBD TBD Q4 2014 Baltic Scorpion 2015 TBD TBD TBD Q2 2015 Baltic Mantis 2015 TBD TBD TBD Q3 2015 Supramax Vessels Baltic Leopard 2009 (part of the Macquarie group 95% of BSI (7) Baltic Panther 2009 Bulkhandling Handymax A/S Baltic Jaguar 2009 95% of BSI (9) Baltic Cougar 2009 Bulkhandling Handymax A/S Handysize Vessels Baltic Wind 2009 Baltic Cove 2010 Trammo Bulk Carriers 106% of BHSI (11) Baltic Breeze 2010 115% of BHSI (12) Baltic Fox 2010 Baltic Hare 2009 (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charters from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. (2) The dates for the vessels being delivered in the future are estimates based on guidance received from the sellers. (3) We have agreed to an extension with (4) We have reached an agreement with (5) We have reached an agreement with (6) We have reached an agreement with (7) We have reached an agreement with (8) We have reached an agreement to enter these vessels into the (9) We have reached an agreement with (10) We have reached an agreement with (11) We have reached an agreement with Trammo Bulk Carriers on a spot market-related time charter for 10.5 months to a maximum expiration date of (12) The rate for the spot market-related time charter is based on 115% of the average of the daily rates of the BHSI, as reflected in daily reports. Hire is paid every 15 days in advance net of a 6.25% brokerage commission, which includes the 1.25% commission payable to Genco. (13) We have reached an agreement to enter these vessels into the Dividend Announcement and Policy The Company's Board of Directors declared a dividend for the fourth quarter of 2013 of The declaration and payment of any dividend will be subject to the discretion of our board of directors. The timing and amount of dividend payments will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of About Conference Call Announcement Website Information We intend to use our website, www.BalticTrading.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, "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as "anticipate," "budget," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward looking statements are based on management's current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines in demand or rates in the drybulk shipping industry; (ii) prolonged weakness in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xii) the Company's acquisition or disposition of vessels; (xiii) our ability to leverage Genco's relationships in the shipping industry; (xiv) the completion of definitive documentation with respect to charters; (xv) charterers' compliance with the terms of their charters in the current market environment; (xvi) the fulfillment of the closing conditions under, or the execution of additional documentation for, the Company's agreements to acquire vessels; (xvii) obtaining, completion of definitive documentation for, and funding of financing for the vessel acquisitions on acceptable terms; and other factors listed from time to time in our public filings with the SOURCE
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