Danaos Corporation Reports Results for the Fourth Quarter and Year Ended December 31, 2020

February 16, 2021 7:30 AM EST

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ATHENS, Greece--(BUSINESS WIRE)-- Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s largest independent owners of containerships, today reported unaudited results for the fourth quarter and the year ended December 31, 2020.

Highlights for the Fourth Quarter and Year Ended December 31, 2020:

  • Adjusted net income1 of $47.8 million, or $2.29 per share, for the three months ended December 31, 2020 compared to $38.0 million, or $2.01 per share, for the three months ended December 31, 2019, an increase of 25.8%. Adjusted net income1 of $170.9 million, or $7.18 per share, for the year ended December 31, 2020 compared to $148.7 million, or $9.17 per share, for the year ended December 31, 2019, an increase of 14.9%.
  • Operating revenues of $119.6 million for the three months ended December 31, 2020 compared to $110.2 million for the three months ended December 31, 2019, an increase of 8.5%. Operating revenues of $461.6 million for the year ended December 31, 2020 compared to $447.2 million for the year ended December 31, 2019, an increase of 3.2%.
  • Adjusted EBITDA1 of $83.0 million for the three months ended December 31, 2020 compared to $78.1 million for the three months ended December 31, 2019, an increase of 6.3%. Adjusted EBITDA1 of $318.3 million for the year ended December 31, 2020 compared to $310.6 million for the year ended December 31, 2019, an increase of 2.5%.
  • Total contracted operating revenues were $1.2 billion2 as of December 31, 2020, with charters extending through 2028 and remaining average contracted charter duration of 3.1 years, weighted by aggregate contracted charter hire.
  • Charter coverage of 94% for the next 12 months based on current operating revenues and 91% in terms of contracted operating days.
 

Three Months and Year Ended December 31, 2020

Financial Summary - Unaudited

(Expressed in thousands of United States dollars, except per share amounts)

 

 

Three months
ended

 

Three months
ended

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

Operating revenues

$119,642

 

$110,204

 

$461,594

 

$447,244

Net income

$43,179

 

$33,817

 

$153,550

 

$131,253

Adjusted net income1

$47,810

 

$37,969

 

$170,888

 

$148,675

Earnings per share, diluted

$2.07

 

$1.79

 

$6.45

 

$8.09

Adjusted earnings per share, diluted1

$2.29

 

$2.01

 

$7.18

 

$9.17

Diluted weighted average number of shares (in thousands)

20,874

 

18,927

 

23,805

 

16,221

Adjusted EBITDA1

$83,009

 

$78,118

 

$318,331

 

$310,565

1. Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Please refer to the reconciliation of net income to adjusted net income and net income to adjusted EBITDA.

2. Contracted revenue as of December 31, 2020 on the basis of concluded charter contracts through February 15, 2021.

Danaos’ CEO Dr. John Coustas commented:

"In the fourth quarter of 2020, we witnessed the most outstanding turnaround in the container industry for as long as I can remember. Market participants were caught by surprise as the chronic underinvestment in capacity coupled with a sudden resurgence of demand created a spike that drove container box rates to all-time highs. This led to a massive increase in our customers’ profitability and significantly diminished the counterparty risk that was so prevalent at the end of the first quarter of 2020. The charter market, in turn, rapidly strengthened, resulting in decade-high charter rates across almost all vessel types.

Now everyone is focused on whether the current market strength is sustainable and for how long. Fortunately, incremental vessel supply will remain low for the time being. Although there have been new orders placed, the current orderbook is at historically low levels. Since there is a two-year lead time for new orders to hit the water, supply growth should be moderate for the next couple of years. What will happen next depends a lot on the environmental initiatives, regulations and of course demand.

As far as Danaos is concerned we experienced a strong quarter, completed delivery of all contracted vessels, realized significant gains, displayed exceptional rechartering performance and entered into agreements for a very important refinancing.

This quarter we saw an improvement in Adjusted EBITDA and Adjusted Net Income compared to the same quarter in the prior year. This improvement should be even more pronounced in the coming quarters as new contracted charters at significantly higher rates start to contribute to our top line.

We have concluded 27 recharterings over the past three months for periods of 12-24 months at rates between two and three times the rates of the expiring charters. In doing so, we have practically covered 91% of our 2021 operating days and a significant portion of our 2022 operating days. We currently expect revenue in 2021 to exceed 2020 revenue by at least $100 million.

The recent performance of both ZIM and HMM has resulted in a $23.8 million increase in the recorded value of our bond holdings in these two companies, which increased in value to approximately $63 million as of the end of 2020. The ZIM IPO has also provided a marked-to-market value for our 10.2mn shares in ZIM, which have a value exceeding $200 million based on Zim’s closing share price of $20.12 per share on February 12, 2021. These shares were valued at $75,000 as of the end of 2020.

We have also recently concluded a $300 million bond offering, which was over three times oversubscribed, an extraordinary accomplishment for a first-time issuer. These funds, together with another $950 million of bank and lease financing, will be used to refinance most of our existing credit facilities and form the basis of our new strategy as we will not have any maturities until 2025.

We are happy that the market has acknowledged our accomplishments, leading to a dramatic outperformance of our share price as compared to our peers. We are well-positioned and committed to continue to take actions to create value for our shareholders."

Three months ended December 31, 2020 compared to the three months ended December 31, 2019

During the three months ended December 31, 2020, Danaos had an average of 58.5 containerships compared to 55.0 containerships during the three months ended December 31, 2019. Our fleet utilization for the three months ended December 31, 2020 was 97.9% compared to 97.0% for the three months ended December 31, 2019.

Our adjusted net income amounted to $47.8 million, or $2.29 per share, for the three months ended December 31, 2020 compared to $38.0 million, or $2.01 per share, for the three months ended December 31, 2019. We have adjusted our net income in the three months ended December 31, 2020 for amortization of non-cash fees and accrued finance fees charges of $4.6 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The increase of $9.8 million in adjusted net income for the three months ended December 31, 2020 compared to the three months ended December 31, 2019 is attributable mainly to a $9.4 million increase in operating revenues, a $6.0 million decrease in net finance expenses and a $0.5 million increase in the operating performance of our equity investment in Gemini Shipholdings Corporation (“Gemini”), which were partially offset by a $6.1 million increase in total operating expenses.

On a non-adjusted basis, our net income amounted to $43.2 million, or $2.07 earnings per diluted share, for the three months ended December 31, 2020 compared to net income of $33.8 million, or $1.79 earnings per diluted share, for the three months ended December 31, 2019.

Operating Revenues

Operating revenues increased by 8.5%, or $9.4 million, to $119.6 million in the three months ended December 31, 2020 from $110.2 million in the three months ended December 31, 2019.

Operating revenues for the three months ended December 31, 2020 reflect:

  • a $7.6 million increase in revenues in the three months ended December 31, 2020 compared to the three months ended December 31, 2019 mainly as a result of contractual increases in charter rates of vessels under long-term charters, partially offset by lower re-chartering rates between the two quarters for certain of our vessels;
  • a $6.1 million increase in revenues in the three months ended December 31, 2020 compared to the three months ended December 31, 2019 due to the acquisition of new vessels;
  • a $2.1 million increase in revenues due to higher fleet utilization of our vessels in the three months ended December 31, 2020 compared to the three months ended December 31, 2019.
  • a $6.4 million decrease in revenues in the three months ended December 31, 2020 compared to the three months ended December 31, 2019 due to lower non-cash revenue recognition in accordance with US GAAP; and

Vessel Operating Expenses

Vessel operating expenses increased by $4.2 million to $28.7 million in the three months ended December 31, 2020 from $24.5 million in the three months ended December 31, 2019, primarily as a result of the increase in the average number of vessels in our fleet and an overall increase in the average daily operating cost to $5,571 per vessel per day for vessels on time charter for the three months ended December 31, 2020 compared to $5,215 per vessel per day for the three months ended December 31, 2019. Management believes that our daily operating costs are among the most competitive in the industry.

Depreciation & Amortization

Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

Depreciation

Depreciation expense increased by 6.1%, or $1.5 million, to $25.9 million in the three months ended December 31, 2020 from $24.4 million in the three months ended December 31, 2019 mainly due to the acquisition of the vessels Niledutch Lion, Phoebe, Charleston, Bremen and C Hamburg and the installation of scrubbers on nine of our vessels in the year ended December 31, 2020.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $0.4 million to $2.6 million in the three months ended December 31, 2020 from $2.2 million in the three months ended December 31, 2019.

General and Administrative Expenses

General and administrative expenses decreased by $0.6 million to $6.4 million in the three months ended December 31, 2020, from $7.0 million in the three months ended December 31, 2019. The decrease was mainly due to decreased non-cash recognition of share-based compensation.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses increased by $0.6 million to $3.4 million in the three months ended December 31, 2020 from $2.8 million in the three months ended December 31, 2019 primarily as a result of the increase in the average number of vessels in our fleet.

Interest Expense and Interest Income

Interest expense decreased by 32.2%, or $5.5 million, to $11.6 million in the three months ended December 31, 2020 from $17.1 million in the three months ended December 31, 2019. The decrease in interest expense is attributable to:

  • a $6.0 million decrease in interest expense due to a decrease in debt service cost of approximately 2% and a $92.6 million decrease in our average debt (including leaseback obligations), to $1,482.5 million in the three months ended December 31, 2020, compared to $1,575.1 million in the three months ended December 31, 2019; and
  • a $0.5 million increase in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.

As of December 31, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,368.1 million and our leaseback obligation was $123.4 million compared to bank debt of $1,423.8 million and our leaseback obligation of $138.2 million as of December 31, 2019.

Interest income remained stable at $1.7 million in each of the three months ended December 31, 2020 and December 31, 2019.

Other finance costs, net

Other finance costs, net remained stable at $0.3 million in each of the three months ended December 31, 2020 and December 31, 2019.

Equity income on investments

Equity income on investments increased by $0.5 million to $1.6 million of income on investments in the three months ended December 31, 2020 compared to $1.1 million in the three months ended December 31, 2019 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended December 31, 2020 and December 31, 2019.

Other income, net

Other income, net was $0.2 million in the three months ended December 31, 2020 compared to $0.1 million in the three months ended December 31, 2019.

Adjusted EBITDA

Adjusted EBITDA increased by 6.3%, or $4.9 million, to $83.0 million in the three months ended December 31, 2020 from $78.1 million in the three months ended December 31, 2019. As outlined above, the increase is mainly attributable to a $9.4 million increase in operating revenues and a $0.5 million increase in the operating performance of our equity investees, which were partially offset by a $5.0 million increase in total operating expenses. Adjusted EBITDA for the three months ended December 31, 2020 is adjusted for stock-based compensation of $0.3 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Year ended December 31, 2020 compared to the year ended December 31, 2019

During the year ended December 31, 2020, Danaos had an average of 57.3 containerships compared to 55.0 containerships during the year ended December 31, 2019. Our fleet utilization for the year ended December 31, 2020 was 96.3% compared to 98.3% for the year ended December 31, 2019. Adjusted fleet utilization, excluding the effect of 188 days of incremental off-hire due to shipyard delays related to the COVID-19 pandemic, was 97.2% in the year ended December 31, 2020.

Our adjusted net income amounted to $170.9 million, or $7.18 per share, for the year ended December 31, 2020 compared to $148.7 million, or $9.17 per share, for the year ended December 31, 2019. We have adjusted our net income in the year ended December 31, 2020 for amortization of non-cash fees and accrued finance fees charge of $17.3 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The increase of $22.2 million in adjusted net income for the year ended December 31, 2020 compared to the year ended December 31, 2019 is attributable mainly to a $19.1 million decrease in net finance expenses, a $14.4 million increase in operating revenues and a $4.7 million increase in the operating performance of our equity investment in Gemini, which were partially offset by a $16.0 million increase in total operating expenses.

On a non-adjusted basis, our net income amounted to $153.6 million, or $6.45 earnings per diluted share, for the year ended December 31, 2020 compared to net income of $131.3 million, or $8.09 earnings per diluted share, for the year ended December 31, 2019.

Operating Revenues

Operating revenues increased by 3.2%, or $14.4 million, to $461.6 million in the year ended December 31, 2020 from $447.2 million in the year ended December 31, 2019.

Operating revenues for the year ended December 31, 2020 reflect:

  • a $24.5 million increase in revenues in the year ended December 31, 2020 compared to the year ended December 31, 2019 mainly as a result of contractual increases in charter rates of vessels under long-term charters, partially offset by lower re-chartering rates between the two quarters for certain of our vessels;
  • a $16.1 million increase in revenues in the year ended December 31, 2020 compared to the year ended December 31, 2019 due to the acquisition of new vessels;
  • a $22.2 million decrease in revenues in the year ended December 31, 2020 compared to the year ended December 31, 2019 due to lower non-cash revenue recognition in accordance with US GAAP; and
  • a $4.0 million decrease in revenues due to lower fleet utilization of our vessels in the year ended December 31, 2020 compared to the year ended December 31, 2019 mainly due to the scheduled installation of scrubbers and dry-dockings of our vessels, of which $3.2 million relates to incremental delays in the Chinese shipyards where these activities were being performed due to the COVID-19 pandemic.

Vessel Operating Expenses

Vessel operating expenses increased by $8.4 million to $110.9 million in the year ended December 31, 2020 from $102.5 million in the year ended December 31, 2019, primarily as a result of the increase in the average number of vessels in our fleet and an overall increase in the average daily operating cost to $5,586 per vessel per day for vessels on time charter for the year ended December 31, 2020 compared to $5,506 per vessel per day for the year ended December 31, 2019. Management believes that our daily operating costs are among the most competitive in the industry.

Depreciation & Amortization

Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

Depreciation

Depreciation expense increased by 5.2%, or $5.0 million, to $101.5 million in the year ended December 31, 2020 from $96.5 million in the year ended December 31, 2019 mainly due to the acquisition of the vessels Niledutch Lion, Phoebe, Charleston, Bremen and C Hamburg and the installation of scrubbers on nine of our vessels in the year ended December 31, 2020.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $2.3 million to $11.0 million in the year ended December 31, 2020 from $8.7 million in the year ended December 31, 2019.

General and Administrative Expenses

General and administrative expenses decreased by $2.5 million to $24.3 million in the year ended December 31, 2020, from $26.8 million in the year ended December 31, 2019. The decrease was mainly due to decreased non-cash recognition of share-based compensation.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses increased by $2.7 million to $14.3 million in the year ended December 31, 2020 from $11.6 million in the year ended December 31, 2019 primarily as a result of the increase in the average number of vessels in our fleet.

Interest Expense and Interest Income

Interest expense decreased by 25.8%, or $18.6 million, to $53.5 million in the year ended December 31, 2020 from $72.1 million in the year ended December 31, 2019. The decrease in interest expense is due to a decrease in debt service cost by approximately 1.5% and a $96.1 million decrease in our average debt (including leaseback obligations), to $1,519.9 million in the year ended December 31, 2020, compared to $1,616.0 million in the year ended December 31, 2019.

As of December 31, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,368.1 million and our leaseback obligation was $123.4 million compared to bank debt of $1,423.8 million and our leaseback obligation of $138.2 million as of December 31, 2019.

Interest income increased by $0.2 million to $6.6 million in the year ended December 31, 2020 compared to $6.4 million in the year ended December 31, 2019.

Other finance costs, net

Other finance costs, net decreased by $0.4 million to $2.3 million in the year ended December 31, 2020 compared to $2.7 million in the year ended December 31, 2019 mainly due to the decrease in finance costs related to the leaseback obligations, partially offset by lease termination fees in the year ended December 31, 2020.

Equity income on investments

Equity income on investments increased by $4.7 million to $6.3 million of income on investments in the year ended December 31, 2020 compared to $1.6 million in the year ended December 31, 2019 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $3.6 million in each of the years ended December 31, 2020 and December 31, 2019.

Other income, net

Other income, net was remained stable at $0.6 million in each of the years ended December 31, 2020 and December 31, 2019.

Adjusted EBITDA

Adjusted EBITDA increased by 2.5%, or $7.7 million, to $318.3 million in the year ended December 31, 2020 from $310.6 million in the year ended December 31, 2019. As outlined above, the increase is mainly attributable to a $14.4 million increase in operating revenues and a $4.7 million increase in the operating performance of our equity investees, which were partially offset by a $11.4 million increase in operating expenses. Adjusted EBITDA for the year ended December 31, 2020 is adjusted for stock-based compensation of $1.2 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Recent Developments

On February 4, 2021 we announced the pricing of our offering of $300 million of 8.500% senior unsecured notes due 2028. We intend to use the net proceeds from the offering, together with a new $815 million senior secured credit facility and a new $135 million sale leaseback arrangement, to implement a $1.25 billion refinancing of a substantial majority of our outstanding senior secured indebtedness. The offering closed on February 11, 2021.

On January 27, 2021, ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares. We currently own 10,186,950 ordinary shares of ZIM, which shareholding interest was valued at $205.0 million as of February 12, 2021 (based on the last reported trading price of ZIM’s ordinary shares on the NYSE) and recorded at a book value of $75 thousand as of December 31, 2020.

On January 20, 2021 we received $3.9 million from Hanjin Shipping as a partial payment of common benefit claim applied to the unpaid charter hires plus other outstandings and interest for the period from the date of Hanjin Shipping’s filing for bankruptcy until the termination notices for each respective charterparty.

On February 12, 2021, the Board and the Compensation Committee awarded 150,000 shares of common stock to officers and directors of the Company and employees of our Manager, Danaos Shipping Co. Ltd., under the auspices of the Company’s Equity Compensation Plan.

In December 2020 we took delivery of the two 9,012 TEU container vessels built in 2009 Bremen and C Hamburg.

Conference Call and Webcast

On Tuesday, February 16, 2021 at 9:00 A.M. ET, the Company's management will host a conference call to discuss the results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.

A telephonic replay of the conference call will be available until February 23, 2021 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 10152390# as the access code.

Audio Webcast

There will also be a live and then archived webcast of the conference call on the Danaos website (www.danaos.com). Participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Slide Presentation

A slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).

About Danaos Corporation

Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 65 containerships aggregating 403,793 TEUs, including five vessels owned by Gemini Shipholdings Corporation, a joint venture, ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".

Forward-Looking Statements

Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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. Although Danaos Corporation 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, Danaos Corporation 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 impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized cargo, the ability and willingness of charterers to perform their obligations to us, charter rates for containerships, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; the effects of the 2018 refinancing transactions; Danaos’ ability to achieve the expected benefits of the refinancing and comply with the terms of its new credit facilities and other agreements entered into in connection with the 2018 refinancing; our ability to consummate our contemplated debt refinancing in 2021 and achieve the expected benefits of such debt refinancing; the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission.

Visit our website at www.danaos.com

Appendix

Fleet Utilization

Danaos had 30 unscheduled off-hire days in the three months ended December 31, 2020. The following table summarizes vessel utilization and the impact of the off-hire days on the Company’s revenue.

Vessel Utilization (No.
of Days)

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

 

2020

2020

 

2020

 

2020

 

Total

Ownership Days

5,073

5,193

 

5,336

5,380

20,982

Less Off-hire Days:

Scheduled Off-hire Days

(336)

(60)

(10)

(81)

(487)

Other Off-hire Days

(104)

(92)

(60)

(30)

(286)

Operating Days

4,633

5,041

5,266

5,269

20,209

Vessel Utilization

91.3%

97.1%

98.7%

97.9%

96.3%

 

Operating Revenues (in '000s of US Dollars)

$106,196

$116,824

$118,932

$119,642

$461,594

Average Gross Daily Charter Rate

$22,922

$23,175

 

$22,585

$22,707

$22,841

 
 

Vessel Utilization (No.
of Days)

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

 

2019

2019

 

2019

 

2019

 

Total

Ownership Days

4,950

5,005

 

5,060

5,060

20,075

Less Off-hire Days:

Scheduled Off-hire Days

-

(22)

(41)

(123)

(186)

Other Off-hire Days

(90)

(10)

(24)

(29)

(153)

Operating Days

4,860

4,973

4,995

4,908

19,736

Vessel Utilization

98.2%

99.4%

98.7%

97.0%

98.3%

 

Operating Revenues (in '000s of US Dollars)

$112,891

$112,319

$111,830

$110,204

$447,244

Average Gross Daily Charter Rate

$23,229

$22,586

 

$22,388

$22,454

$22,661

Fleet List

The following table describes in detail our fleet deployment profile as of February 15, 2021:

Vessel Name

Vessel
Size
(TEU)

 

Year Built

 

Expiration of Charter(1)

Hyundai Ambition (ex MSC Ambition)

13,100

 

2012

 

June 2024

Hyundai Speed (ex Maersk Exeter)

13,100

 

2012

 

June 2024

Hyundai Smart (ex Maersk Enping)

13,100

 

2012

 

May 2024

Hyundai Respect

13,100

 

2012

 

March 2024

Hyundai Honour

13,100

 

2012

 

February 2024

Express Rome

10,100

 

2011

 

February 2022

Express Berlin

10,100

 

2011

 

April 2022

Express Athens

10,100

 

2011

 

February 2022

Le Havre

9,580

 

2006

 

April 2023

Pusan C

9,580

 

2006

 

March 2023

Bremen (ex CPO Bremen)

9,012

 

2009

 

December 2022

C Hamburg (ex CPO Hamburg)

9,012

 

2009

 

January 2023

Niledutch Lion

8,626

 

2008

 

February 2022

Charleston (ex SM Charleston)

8,533

 

2005

 

December 2021

CMA CGM Melisande

8,530

 

2012

 

May 2024

CMA CGM Attila

8,530

 

2011

 

October 2023

CMA CGM Tancredi

8,530

 

2011

 

November 2023

CMA CGM Bianca

8,530

 

2011

 

January 2024

CMA CGM Samson

8,530

 

2011

 

March 2024

America

8,468

 

2004

 

February 2023

Europe

8,468

 

2004

 

March 2023

Phoebe

8,463

 

2005

 

April 2022

CMA CGM Moliere

6,500

 

2009

 

February 2022

CMA CGM Musset

6,500

 

2010

 

August 2022

CMA CGM Nerval

6,500

 

2010

 

October 2022

CMA CGM Rabelais

6,500

 

2010

 

December 2022

CMA CGM Racine

6,500

 

2010

 

January 2023

YM Mandate

6,500

 

2010

 

January 2028

YM Maturity

6,500

 

2010

 

April 2028

Performance

6,402

 

2002

 

June 2021

Dimitra C

6,402

 

2002

 

January 2023

Seattle C

4,253

 

2007

 

September 2021

YM Vancouver

4,253

 

2007

 

December 2021

Derby D

4,253

 

2004

 

January 2022

ANL Tongala

4,253

 

2004

 

March 2021

Rio Grande (ex ZIM Rio Grande)

4,253

 

2008

 

December 2021

ZIM Sao Paolo

4,253

 

2008

 

February 2023

ZIM Kingston

4,253

 

2008

 

April 2023

ZIM Monaco

4,253

 

2009

 

July 2022

ZIM Dalian

4,253

 

2009

 

November 2022

ZIM Luanda

4,253

 

2009

 

May 2021

Dimitris C

3,430

 

2001

 

January 2022

Express Black Sea

3,400

 

2011

 

January 2022

Express Spain

3,400

 

2011

 

January 2022

Express Argentina

3,400

 

2010

 

March 2021

Express Brazil

3,400

 

2010

 

September 2021

Express France

3,400

 

2010

 

October 2021

Singapore

3,314

 

2004

 

October 2021

Colombo

3,314

 

2004

 

December 2021

Zebra (ex MSC Zebra)

2,602

 

2001

 

August 2021

Amalia C

2,452

 

1998

 

May 2021

Danae C

2,524

 

2001

 

February 2022

Advance

2,200

 

1997

 

January 2022

Future

2,200

 

1997

 

November 2021

Sprinter

2,200

 

1997

 

December 2021

Stride

2,200

 

1997

 

February 2022

Progress C

2,200

 

1998

 

December 2021

Bridge

2,200

 

1998

 

April 2022

Highway

2,200

 

1998

 

March 2021

Vladivostok

2,200

 

1997

 

October 2021

 

 

 

 

 

 

Belita ľ2)

8,533

 

2006

 

September 2021

Catherine C (2)

6,422

 

2001

 

January 2023

Leo C (2)

6,422

 

2002

 

August 2022

Suez Canal(2)

5,610

 

2002

 

March 2023

Genoaľ2)

5,544

 

2002

 

September 2021

 

 

 

 

 

 

(1)

Earliest date charters could expire. Some charters include options to extend their terms.

(2)

Vessels acquired by Gemini Shipholdings Corporation, in which Danaos holds a 49% equity interest.

DANAOS CORPORATION

Condensed Consolidated Statements of Income - Unaudited

(Expressed in thousands of United States dollars, except per share amounts)

 

 

Three months
ended

 

Three months
ended

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

OPERATING REVENUES

$119,642

 

$110,204

 

$461,594

 

$447,244

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

Vessel operating expenses

(28,714)

 

(24,467)

 

(110,946)

 

(102,502)

Depreciation & amortization

(28,534)

 

(26,572)

 

(112,563)

 

(105,238)

General & administrative

(6,440)

 

(7,054)

 

(24,341)

 

(26,837)

Other operating expenses

(3,377)

 

(2,799)

 

(14,264)

 

(11,593)

Income From Operations

52,577

 

49,312

 

199,480

 

201,074

 

 

 

 

 

 

 

 

OTHER INCOME/(EXPENSES)

 

 

 

 

 

 

 

Interest income

1,686

 

1,663

 

6,638

 

6,414

Interest expense

(11,637)

(17,166)

(53,502)

(72,069)

Other finance expenses

(345)

(300)

(2,335)

(2,702)

Equity income on investments

1,579

 

1,094

 

6,308

 

1,602

Other income/(loss), net

232

 

127

 

593

 

556

Realized loss on derivatives

(913)

 

(913)

 

(3,632)

 

(3,622)

Total Other Expenses, net

(9,398)

 

(15,495)

 

(45,930)

 

(69,821)

 

 

 

 

 

 

 

 

Net Income

$43,179

 

$33,817

 

$153,550

 

$131,253

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

Basic earnings per share

$2.09

 

$1.83

 

$6.51

 

$8.29

Diluted earnings per share

$2.07

 

$1.79

 

$6.45

 

$8.09

Basic weighted average number of common shares (in thousands of shares)

20,658

 

18,494

23,589

 

15,835

Diluted weighted average number of common shares (in thousands of shares)

20,874

 

18,927

23,805

 

16,221

 

Non-GAAP Measures1

Reconciliation of Net Income to Adjusted Net Income – Unaudited

 

 

Three months
ended

 

Three months
ended

 

Year ended

 

Year ended

December 31,

December 31,

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Net income

$43,179

 

$33,817

$153,550

$131,253

Amortization of financing fees, debt discount & finance fees accrued

4,631

 

4,152

17,338

17,422

Adjusted Net Income

$47,810

 

$37,969

$170,888

$148,675

Adjusted Earnings Per Share, diluted

$2.29

 

$2.01

$7.18

$9.17

Diluted weighted average number of shares (in thousands)

20,874

 

18,927

23,805

16,221

1 The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months and year ended December 31, 2020 and 2019. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.

DANAOS CORPORATION

Condensed Consolidated Balance Sheets - Unaudited

(Expressed in thousands of United States dollars)

 

 

 

As of

 

As of

December 31,

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

CURRENT ASSETS

 

 

 

 

Cash and cash equivalents

 

$65,663

 

$139,170

Accounts receivable, net

 

7,556

 

7,145

Other current assets

 

45,229

 

44,071

 

 

118,448

 

190,386

NON-CURRENT ASSETS

 

 

 

 

Fixed assets, net

 

2,479,937

 

2,389,874

Deferred charges, net

 

17,339

 

11,455

Investments in affiliates

 

15,273

 

8,965

Other non-current assets

 

83,383

 

82,339

 

 

2,595,932

 

2,492,633

TOTAL ASSETS

 

$2,714,380

 

$2,683,019

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Long-term debt, current portion

 

$155,662

 

$119,673

Accumulated accrued interest, current portion

 

18,036

 

34,137

Long-term leaseback obligations, current portion

 

24,515

 

16,342

Accounts payable, accrued liabilities & other current liabilities

 

41,472

 

52,928

 

 

239,685

 

223,080

LONG-TERM LIABILITIES

 

 

 

 

Long-term debt, net

 

1,187,345

 

1,270,663

Accumulated accrued interest, net of current portion

 

136,433

 

156,583

Long-term leaseback obligations, net

 

95,585

 

121,872

Other long-term liabilities

 

19,755

 

29,131

 

 

1,439,118

 

1,578,249

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

Common stock

 

204

 

248

Additional paid-in capital

 

755,390

 

785,274

Accumulated other comprehensive loss

 

(86,669)

 

(116,934)

Retained earnings

 

366,652

 

213,102

 

 

1,035,577

 

881,690

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$2,714,380

 

$2,683,019

 

DANAOS CORPORATION

Condensed Consolidated Statements of Cash Flows - Unaudited

(Expressed in thousands of United States dollars)

 

 

Three months
ended

 

Three months
ended

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2020

 

2019

 

2020

 

2019

Operating Activities:

 

 

 

 

 

 

 

Net income

$43,179

 

$33,817

 

$153,550

 

$131,253

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

25,927

 

24,364

 

101,531

 

96,505

Amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued

7,238

 

6,360

 

28,900

 

26,155

PIK interest

675

 

830

 

2,911

 

3,375

Payments for drydocking/special survey

(3,519)

 

(1,943)

 

(16,916)

 

(7,157)

Amortization of deferred realized losses on cash flow interest rate swaps

913

 

913

 

3,632

 

3,622

Equity income on investments

(1,579)

 

(1,094)

 

(6,308)

 

(1,602)

Stock based compensation

302

 

1,181

 

1,199

 

4,241

Accounts receivable

3,290

 

492

 

(411)

 

2,080

Other assets, current and non-current

857

 

(5,754)

 

3,199

 

(19,750)

Accounts payable and accrued liabilities

1,638

 

(2,618)

 

2,252

 

(3,181)

Other liabilities, current and long-term

726

 

(4,315)

 

(7,860)

 

(15,663)

Net Cash provided by Operating Activities

79,647

 

52,233

 

265,679

 

219,878

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

Vessel additions and advances

(64,512)

 

(6,598)

 

(170,661)

 

(21,360)

Investments

-

 

-

 

(75)

 

-

Net Cash used in Investing Activities

(64,512)

 

(6,598)

 

(170,736)

 

(21,360)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

Proceeds from sale-leaseback of vessels

-

 

-

 

139,080

 

146,523

Proceeds from long-term debt

33,150

 

-

 

69,850

 

-

Payments of leaseback obligations

(5,962)

 

(3,160)

 

(153,904)

 

(8,309)

Debt repayment

(46,998)

 

(31,183)

 

(146,747)

 

(262,572)

Payments of accumulated accrued interest

(4,853)

 

(8,512)

 

(25,639)

 

(35,358)

Repurchase of common stock

(31,127)

 

-

 

(31,127)

 

-

Paid-in capital

-

 

54,440

 

-

 

54,440

Share issuance costs

-

 

(873)

 

-

 

(873)

Finance costs

(50)

 

-

 

(19,963)

 

(30,474)

Net Cash provided by/(used in) Financing Activities

(55,840)

 

10,712

 

(168,450)

 

(136,623)

Net Increase/(Decrease) in cash and cash equivalents

(40,705)

 

56,347

 

(73,507)

 

61,895

Cash and cash equivalents, beginning of period

106,368

 

82,823

 

139,170

 

77,275

Cash and cash equivalents, end of period

$65,663

 

$139,170

 

$65,663

 

$139,170

 

DANAOS CORPORATION

Reconciliation of Net Income to Adjusted EBITDA - Unaudited

(Expressed in thousands of United States dollars)

 

 

Three months
ended

 

Three months
ended

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2020

 

2019

 

2020

 

2019

Net income

$43,179

 

$33,817

 

$153,550

 

$131,253

Depreciation

25,927

 

24,364

 

101,531

 

96,505

Amortization of deferred drydocking & special survey costs

2,607

 

2,208

 

11,032

 

8,733

Amortization of deferred finance costs, debt discount and other finance fees accrued

4,631

 

4,152

 

17,338

 

17,422

Amortization of deferred realized losses on interest rate swaps

913

 

913

 

3,632

 

3,622

Interest income

(1,686)

 

(1,663)

 

(6,638)

 

(6,414)

Interest expense

7,136

 

13,146

 

36,687

 

55,203

Stock based compensation

302

 

1,181

 

1,199

 

4,241

Adjusted EBITDA(1)

$83,009

 

$78,118

 

$318,331

 

$310,565

1) Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs, amortization of deferred finance costs, debt discount and other finance fees accrued, amortization of deferred realized losses on interest rate swaps and stock based compensation. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or “GAAP.” We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
 

Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.

 

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months and year ended December 31, 2020 and 2019. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.

 

Evangelos Chatzis
Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com

Iraklis Prokopakis
Senior Vice President and Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6400
E-Mail: coo@danaos.com

Investor Relations and Financial Media

Rose & Company
New York
Tel. 212-359-2228
E-Mail: danaos@rosecoglobal.com

Source: Danaos Corporation



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