DryShips Inc. Reports Financial and Operating Results for the Third Quarter 2015
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ATHENS, GREECE -- (Marketwired) -- 12/07/15 -- DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, an international owner of drybulk carriers and offshore support vessels, today announced its unaudited financial and operating results for the third quarter ended September 30, 2015.
Third Quarter 2015 Financial Highlights
- For the third quarter of 2015, the Company reported a net loss of $820.0 million, or $1.23 basic and diluted loss per share. Included in the third quarter 2015 results are impairment charges and loss on sales on the entire drybulk fleet, of $797.5 million, or $1.20 per share. Excluding these impairment charges and losses, the Company's net results would have amounted to a net loss of $22.5 million, or $0.03 per share.(1)
- The Company reported Adjusted EBITDA of $30.1 million for the third quarter of 2015.(2)
Recent Highlights
- As of December 7, 2015, the Company has delivered all of its tanker vessels and 13 drybulk vessels to their new owners under the previously disclosed sales agreements for 10 tanker vessels and 17 drybulk vessels.
- As of November 24, 2015, the Company has acquired a 100% equity stake in Nautilus OffShore Services Inc. ("Nautilus"). Nautilus owns six offshore supply vessels on time charter to Petrobras.
- On November 2, 2015, the Company concluded two Memoranda of Agreement to sell its two Supramax vessels, the Byron and the Galveston, for an aggregate sales price of $12.3 million. The vessels were delivered to their new owners during November 2015.
- On October 21, 2015, as amended on November 11, 2015, the Company entered into a secured revolving credit facility of up to $60 million with an entity controlled by Mr. George Economou. The loan is secured by the shares that the Company holds in Ocean Rig UDW Inc. ("Ocean Rig") and in Nautilus, and by a first priority mortgage over one Panamax drybulk carrier. The loan has a tenor of three years and both the lenders and the borrowers have certain conversion rights.
- On October 13, 2015, the Company received an additional 180-day grace period to regain compliance with the Nasdaq's minimum bid price requirement, which will end on April 11, 2016. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by effecting a reverse stock split, if necessary.
(1) The net result includes approximately 40.44% of Ocean Rig's results, which are owned by DryShips Inc. common shareholders. (2) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.
Fleet List
The table below describes our fleet profile as of December 1, 2015:
Year Gross rate Redelivery
Built DWT Type Per day Earliest Latest
------ -------- --------- ---------- ---------- -------
Drybulk fleet
Capesize:
Rangiroa (1) 2013 206,026 Capesize $12,500 Aug-19 Feb-20
Negonego (1) 2013 206,097 Capesize $12,500 Aug-19 Feb-20
Fakarava (1) 2012 206,152 Capesize $12,500 Aug-19 Feb-20
Alameda (1) 2001 170,662 Capesize $12,500 Aug-19 Feb-20
Panamax:
Raraka 2012 76,037 Panamax Spot N/A N/A
Amalfi 2009 75,206 Panamax Spot N/A N/A
Rapallo 75,123 Panamax T/C Index Jul-16 Sep-16
2009 linked
Catalina 2005 74,432 Panamax Spot N/A N/A
Majorca 2005 74,477 Panamax Spot N/A N/A
Ligari 2004 75,583 Panamax Spot N/A N/A
Sorrento 2004 76,633 Panamax Spot N/A N/A
Mendocino 76,623 Panamax T/C Index Sep-16 Nov-16
2002 linked
Bargara 74,832 Panamax T/C Index Sep-16 Nov-16
2002 linked
Oregon 2002 74,204 Panamax Spot N/A N/A
Ecola 2001 73,931 Panamax Spot N/A N/A
Samatan 2001 74,823 Panamax Spot N/A N/A
Sonoma 2001 74,786 Panamax Spot N/A N/A
Capitola 2001 74,816 Panamax Spot N/A N/A
Levanto 73,925 Panamax T/C Index Aug-16 Oct-16
2001 linked
Maganari 2001 75,941 Panamax Spot N/A N/A
Coronado 2000 75,706 Panamax Spot N/A N/A
Marbella 2000 72,561 Panamax Spot N/A N/A
Redondo 2000 74,716 Panamax Spot N/A N/A
Ocean Crystal 1999 73,688 Panamax Spot N/A N/A
Offshore Supply
fleet
Platform Supply
Vessels:
Vega Crusader 2012 1,457 PSV T/C Jan.-17 Jan.-21
Vega Corona 2012 1,430 PSV T/C Dec.-16 Dec.-20
Oil Spill Recovery
Vessels:
Vega Inruda 2013 1,393 OSRV T/C Aug.-17 Aug.-21
Vega Jaanca 2012 1,393 OSRV T/C Jul.-17 Jul.-21
Vega Emtoli 2012 1,363 OSRV T/C May.-17 May.-21
Vega Juniz 2012 1,317 OSRV T/C Apr.-17 Apr.-21
(1) Sold, expect to be delivered to new owners during Q4 2015/Q1 2016.
Drybulk Carrier and Tanker Segment Summary Operating Data (unaudited)
(Dollars in thousands, except average daily results)
Three Months Ended Nine Months Ended
Drybulk September 30, September 30,
-------------------- --------------------
2014 2015 2014 2015
--------- --------- --------- ---------
Average number of vessels(1) 39.0 38.8 38.6 38.9
Total voyage days for vessels(2) 3,543 3,357 10,334 10,221
Total calendar days for
vessels(3) 3,588 3,567 10,534 10,626
Fleet utilization(4) 98.7% 94.1% 98.1% 96.2%
Time charter equivalent(5) $ 10,875 $ 8,938 $ 12,141 $ 10,104
Vessel operating expenses
(daily)(6) $ 6,013 $ 7,368 $ 6,311 $ 6,758
Three Months Ended Nine Months Ended
Tanker September 30, September 30,
-------------------- --------------------
2014 2015 2014 2015
--------- --------- --------- ---------
Average number of vessels(1) 10.0 4.7 10.0 8.2
Total voyage days for vessels(2) 920 334 2,730 2,140
Total calendar days for
vessels(3) 920 429 2,730 2,239
Fleet utilization(4) 100.0% 77.9% 100.0% 95.6%
Time charter equivalent(5) $ 20,901 $ 25,341 $ 20,430 $ 37,058
Vessel operating expenses
(daily)(6) $ 6,900 $ 16,660 $ 7,109 $ 8,650
(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 a part of our fleet during the period divided by
the number of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of dry-docking days.
(3) Calendar days are the total number of days the vessels were in our
possession for the relevant period including dry-docking days.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined
by dividing voyage revenues (net of voyage expenses) by voyage days for
the relevant time period. Voyage expenses primarily consist of port,
canal and fuel costs that are unique to a particular voyage and are paid
by the charterer under a time charter contract, as well as commissions.
TCE revenues, a non-U.S. GAAP measure, provides additional meaningful
information in conjunction with revenues from our vessels, the most
directly comparable U.S. GAAP measure, because it assists our management
in making decisions regarding the deployment and use of its vessels and
in evaluating their financial performance. TCE is also a standard
shipping industry performance measure used primarily to compare period-
to-period changes in a shipping company's performance despite changes in
the mix of charter types (i.e., spot charters, time charters and
bareboat charters) under which the vessels may be employed between the
periods. Please see below for a reconciliation of TCE rates to voyage
revenues.
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and
repairs is calculated by dividing vessel operating expenses by fleet
calendar days for the relevant time period.
(7) Does not include accrual for the provision of the purchase options and
write off in overdue receivables under certain time charter agreements.
(In thousands of U.S. dollars, except for TCE rate, which is expressed in
Dollars, and voyage days)
Three Months Ended Nine Months Ended
Drybulk September 30, September 30,
-------------------- --------------------
2014 2015 2014 2015
--------- --------- --------- ---------
Voyage revenues(7) $ 48,570 $ 35,329 $ 151,593 $ 123,168
Voyage expenses (10,040) (5,323) (26,131) (19,890)
--------- --------- --------- ---------
Time charter equivalent revenues $ 38,530 $ 30,006 $ 125,462 $ 103,278
--------- --------- --------- ---------
Total voyage days for fleet 3,543 3,357 10,334 10,221
Time charter equivalent TCE $ 10,875 $ 8,938 $ 12,141 $ 10,104
Three Months Ended Nine Months Ended
Tanker September 30, September 30,
-------------------- --------------------
2014 2015 2014 2015
--------- --------- --------- ---------
Voyage revenues $ 37,870 $ 15,437 $ 117,809 $ 120,316
Voyage expenses (18,641) (6,973) (62,036) (41,011)
--------- --------- --------- ---------
Time charter equivalent revenues $ 19,229 $ 8,464 $ 55,773 $ 79,305
--------- --------- --------- ---------
Total voyage days for fleet 920 334 2,730 2,140
Time charter equivalent TCE $ 20,901 $ 25,341 $ 20,430 $ 37,058
DryShips Inc.
Financial Statements
Unaudited Interim Condensed Consolidated Statements of Operations
(Expressed in
Thousands of U.S.
Dollars except for
share and per share Three Months Ended Nine Months Ended
data) September 30, September 30,
2014 2015 2014 2015
------------ ------------ ------------ ------------
REVENUES:
Voyage revenues $ 86,440 $ 50,766 $ 269,402 $ 220,254
Revenues from
drilling contracts 515,514 - 1,317,711 725,805
------------ ------------ ------------ ------------
601,954 50,766 1,587,113 946,059
EXPENSES:
Voyage expenses 28,681 12,296 88,167 60,901
Vessel operating
expenses 27,921 33,430 85,891 91,180
Drilling rigs and
drillships
operating expenses 198,413 - 533,017 259,623
Depreciation and
amortization 113,603 17,444 333,538 226,980
Vessels impairment,
loss on sales and
other 1,307 797,494 1,307 966,303
General and
administrative
expenses 48,441 15,291 139,076 90,098
Legal settlements
and other, net 571 - 1,441 (2,803)
------------ ------------ ------------ ------------
Operating
income/(loss) 183,017 (825,189) 404,676 (746,223)
OTHER INCOME /
(EXPENSES):
Interest and finance
costs, net of
interest income (110,903) (22,237) (311,196) (168,585)
Gain/(Loss) on
interest rate swaps 4,558 (871) (7,845) (12,319)
Other, net 292 (223) 2,830 (6,658)
Income taxes (17,940) - (41,873) (36,931)
------------ ------------ ------------ ------------
Total other
expenses, net (123,993) (23,331) (358,084) (224,493)
------------ ------------ ------------ ------------
Net income/(loss) 59,024 (848,520) 46,592 (970,716)
Loss due to
deconsolidation of
Ocean Rig - - - (1,347,106)
Equity in earnings
of affiliate - 28,558 - 37,409
Net (income)
attributable to Non
controlling
interests (42,354) - (70,107) (39,029)
------------ ------------ ------------ ------------
Net income/(loss)
attributable to
DryShips Inc. $ 16,670 $ (819,962) $ (23,515) $ (2,319,442)
============ ============ ============ ============
Net income/(loss)
attributable to
DryShips Inc.
common stockholders 16,252 (820,266) (24,048) (2,320,012)
============ ============ ============ ============
Earnings/(loss) per
common share, basic
and diluted $ 0.04 $ (1.23) $ (0.06) $ (3.49)
Weighted average
number of shares,
basic and diluted 413,249,829 664,983,162 411,999,014 664,882,270
DryShips Inc.
Unaudited Condensed Consolidated Balance Sheets
December September
(Expressed in Thousands of U.S. Dollars) 31, 2014 30, 2015
----------- -----------
ASSETS
Cash, cash equivalents and restricted cash
(current and non-current) $ 658,936 $ 111,592
Assets held for sale - 611,544
Other current assets 568,341 42,731
Advances for vessels and drillships under
construction and related costs 623,984 -
Vessels, net 2,141,617 -
Drilling rigs, drillships, machinery and
equipment, net 6,259,747 -
Investment in affiliate - 472,298
Other non-current assets 118,978 1,193
----------- -----------
Total assets 10,371,603 1,239,358
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total debt 5,517,613 327,543
Liabilities held for sale - 245,217
Total other liabilities 563,602 35,515
Total stockholders' equity 4,290,388 631,083
----------- -----------
Total liabilities and stockholders' equity $10,371,603 $ 1,239,358
=========== ===========
Adjusted EBITDA Reconciliation
Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel impairments and certain other non-cash items as described below, dry-dockings, class survey costs and gains or losses on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by our lenders as a measure of our compliance with certain covenants contained in our loan agreements and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.
The following table reconciles net income/(loss) to Adjusted EBITDA:
Three Three
Months Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
(Dollars in thousands) 30, 2014 30, 2015 30, 2014 30, 2015
----------- ----------- ----------- -----------
Net income/(loss)
attributable to
Dryships Inc $ 16,670 $ (819,962) $ (23,515) $(2,319,442)
Add: Net interest
expense 110,903 22,237 311,196 168,585
Add: Depreciation and
amortization 113,603 17,444 333,538 226,980
Add: Dry-dockings and
class survey costs 1,984 12,044 7,306 20,293
Add: Impairments losses
on sales and other 1,307 797,494 1,307 989,533
Add: Loss due to
deconsolidation of
Ocean Rig - - - 1,347,106
Add: Income taxes 17,940 - 41,873 36,931
Add: Gain /(loss) on
interest rate swaps (4,558) 871 7,845 12,319
Add: Net income
attributable to Non
controlling interests 42,354 - 70,107 39,029
----------- ----------- ----------- -----------
Adjusted EBITDA $ 300,203 $ 30,128 $ 749,657 $ 521,334
=========== =========== =========== ===========
About DryShips Inc.
DryShips Inc. is an owner of drybulk carriers and offshore support vessels that operate worldwide. DryShips also owns approximately 40% of the outstanding shares of Ocean Rig UDW Inc. (NASDAQ: ORIG), an international drilling contractor. DryShips owns a fleet of 24 drybulk carriers, comprising 4 Capesize and 20 Panamax with a combined deadweight tonnage of approximately 2.3 million tons, and 6 offshore supply vessels, comprising 2 platform supply and 4 oil spill recovery vessels.
DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."
Visit the Company's website at www.dryships.com
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.
Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we 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 rates and dayrates and vessel and drilling dayrates and drybulk vessel, drilling rig and drillship values, failure of a seller to deliver one or more vessels or drilling units, drillships or drybulk vessels, failure of a buyer to accept delivery of a drilling rig, drillship, or vessel, inability to procure acquisition financing, default by one or more customers, changes in demand for drybulk commodities or oil, changes in demand that may affect attitudes of time charterers and customer drilling programs, scheduled and unscheduled drydockings and upgrades, changes in our operating expenses, including bunker prices, drydocking and insurance costs, complications associated with repairing and replacing equipment in remote locations, limitations on insurance coverage, such as war risk coverage, in certain areas, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by DryShips Inc. with the U.S. Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F.
Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel. 212-661-7566 E-mail: [email protected]
Source: DryShips Inc.
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