Danaos Corporation Reports Third Quarter and Nine Months Results for the Period Ended September 30, 2019
ATHENS, Greece, Nov. 4, 2019 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the period ended September 30, 2019.
Highlights for the Third Quarter and Nine Months Ended September 30, 2019:
- Adjusted net income1 of $37.9 million, or $2.46 per share2, for the three months ended September 30, 2019 compared to $37.5 million, or $3.17 per share2, for the three months ended September 30, 2018, an increase of 1.1%. Adjusted net income1 of $110.7 million, or $7.23 per share2, for the nine months ended September 30, 2019 compared to $94.6 million, or $10.30 per share2, for the nine months ended September 30, 2018, an increase of 17.0%.
- Operating revenues of $111.8 million for the three months ended September 30, 2019 compared to $117.8 million for the three months ended September 30, 2018, a decrease of 5.1%. Operating revenues of $337.0 million for the nine months ended September 30, 2019 compared to $343.1 million for the nine months ended September 30, 2018, a decrease of 1.8%.
- Adjusted EBITDA1 of $79.3 million for the three months ended September 30, 2019 compared to $82.7 million for the three months ended September 30, 2018, a decrease of 4.1%. Adjusted EBITDA1 of $232.4 million for the nine months ended September 30, 2019 compared to $237.7 million for the nine months ended September 30, 2018, a decrease of 2.2%.
- Total contracted operating revenues were $1.4 billion as of September 30, 2019, with charters extending through 2028 and remaining average contracted charter duration of 4.3 years, weighted by aggregate contracted charter hire.
- Charter coverage of 89% for the next 12 months based on current operating revenues and 75% in terms of contracted operating days.
Three and Nine Months Ended September 30, 2019 | |||||||
Financial Summary - Unaudited | |||||||
(Expressed in thousands of United States dollars, except per share amounts) | |||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2019 | 2018 | 2019 | 2018 | ||||
Operating revenues | $111,830 | $117,781 | $337,040 | $343,101 | |||
Net income | $33,855 | $127,217 | $97,436 | $148,047 | |||
Adjusted net income1 | $37,882 | $37,452 | $110,706 | $94,581 | |||
Earnings per share, diluted2 | $2.20 | $10.76 | $6.36 | $16.12 | |||
Adjusted earnings per share, diluted1,2 | $2.46 | $3.17 | $7.23 | $10.30 | |||
Diluted weighted average number of shares (in thousands)2 | 15,373 | 11,828 | 15,309 | 9,186 | |||
Adjusted EBITDA1 | $79,328 | $82,745 | $232,447 | $237,677 | |||
1 | Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to adjusted EBITDA. |
2 | Earnings per share and weighted average number of shares give retroactive effect to the reverse stock split of 1-for-14 implemented on May 2, 2019, for all periods presented. |
Danaos' CEO Dr. John Coustas commented:
"The Company's adjusted net income of $37.9 million for the third quarter of 2019 increased by $0.4 million, or 1.1%, when compared to the third quarter of 2018. This improvement was primarily the result of a $4.6 million decrease in total operating costs and a $1.9 million decrease in net finance expenses, partially offset by a $6 million decrease in operating revenues mainly due to the re-chartering of certain of our vessels that concluded long-term above market charters over the last 12 months and were re-deployed at market rates during the quarter. Adjusted EBITDA for the third quarter of 2019 was $79.3 million, a decrease of $3.4 million compared to the third quarter of 2018.
The charter market has strengthened considerably during the last six months particularly for vessels larger than 5,500 TEU, although we have also seen an improvement in charter rates for Panamax vessels. This may be partially due to a decrease in fleet capacity as vessels are being temporarily removed from the fleet to be retrofitted with scrubbers in preparation for IMO 2020 sulphur emissions regulations. Larger vessel classes have seen the greatest downtime, and we expect this to continue through 2020 and help contribute to a healthy charter market. This coincides with improving underlying market demand supply fundamentals.
For 2020, we are aligned with the shipping analyst reports and our expectation is that container trade demand growth will outpace supply growth for the first time in almost 10 years. The IMF currently forecasts world GDP growth of 3.5% for 2020, and we expect that the multiplier of containerized trade growth vs GDP growth will slightly exceed 1x and that containerized trade will grow by up to 4% in 2020. On the supply side, capacity growth is not expected to exceed 3% in 2020. Market participants, mainly liner companies, have generally remained reluctant to place newbuilding orders until the U.S. - China trade talks are settled and the IMO regulations come into effect, also taking the opportunity from the favorable demand / supply balance to gain pricing power on freight rates. The combined result of these factors should support the strengthening of the charter market going forward.
Our total contracted revenues as of September 30, 2019 were $1.4 billion, and we maintain our high charter contract coverage of 89% in terms of operating revenues and 75% in terms of operating days over the next 12 months. Our larger vessels remain employed on multi-year charters, and improving market conditions provide upside for the balance of our fleet. We remain committed to operational excellence and technological innovation, which allows us to continually deliver a high quality service to our customers. We are also well-positioned to pursue growth opportunities and deliver value to our shareholders due to our significantly improved financial position."
Three months ended September 30, 2019 compared to the three months ended September 30, 2018
During the three months ended September 30, 2019 and September 30, 2018, Danaos had an average of 55 containerships. Our fleet utilization for the three months ended September 30, 2019 was 98.7% compared to 97.4% for the three months ended September 30, 2018.
Our adjusted net income amounted to $37.9 million, or $2.46 per share, for the three months ended September 30, 2019 compared to $37.5 million, or $3.17 per share, for the three months ended September 30, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14 implemented on May 2, 2019). We have adjusted our net income in the three months ended September 30, 2019 for non-cash fees amortization and accrued financing fees of $4.0 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $0.4 million in adjusted net income for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 is attributable mainly to a $4.6 million decrease in total operating expenses and a $1.9 million decrease in net finance expenses, which were partially offset by a $6.0 million decrease in operating revenues and a $0.1 million decrease in the operating performance of our equity investment in Gemini.
On a non-adjusted basis, our net income amounted to $33.9 million, or $2.20 earnings per diluted share, for the three months ended September 30, 2019 compared to net income of $127.2 million (including gain on debt extinguishment and refinancing-related professional fees described below), or $10.76 earnings per diluted share, for the three months ended September 30, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14).
Operating RevenuesOperating revenues decreased by 5.1%, or $6.0 million, to $111.8 million in the three months ended September 30, 2019 from $117.8 million in the three months ended September 30, 2018.
Operating revenues for the three months ended September 30, 2019 reflects a $6.0 million decrease in revenues due to the re-chartering of certain of our vessels that concluded long-term charters over the last twelve months and were re-deployed at lower spot rates in the three months ended September 30, 2019.
Vessel Operating ExpensesVessel operating expenses decreased by 2.4%, or $0.6 million, to $24.9 million in the three months ended September 30, 2019 from $25.5 million in the three months ended September 30, 2018. The average daily operating cost per vessel for vessels on time charter was $5,298 per day for the three months ended September 30, 2019 compared to $5,427 per day for the three months ended September 30, 2018. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
DepreciationDepreciation expense decreased by 10.0%, or $2.7 million, to $24.3 million in the three months ended September 30, 2019 from $27.0 million in the three months ended September 30, 2018 mainly due to decreased depreciation expense for 10 vessels for which we recorded an impairment charge on December 31, 2018.
Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs decreased by $0.3 million, to $2.3 million in the three months ended September 30, 2019 from $2.6 million in the three months ended September 30, 2018. The decrease was mainly due to a decreased number of vessels dry-docked.
General and Administrative ExpensesGeneral and administrative expenses decreased by $1.0 million, to $6.4 million in the three months ended September 30, 2019, from $7.4 million in the three months ended September 30, 2018. The decrease was mainly due to decreased remuneration expenses.
Other Operating ExpensesOther Operating Expenses include Voyage Expenses.
Voyage ExpensesVoyage expenses decreased by $0.1 million, to $2.8 million in the three months ended September 30, 2019 from $2.9 million in the three months ended September 30, 2018.
Interest Expense and Interest IncomeInterest expense decreased by 11.2%, or $2.3 million, to $18.2 million in the three months ended September 30, 2019 from $20.5 million in the three months ended September 30, 2018. The decrease in interest expense is attributable to:
(i) a $4.9 million decrease in interest expense on two of our credit facilities for which we recognized an interest expense accrual in the third quarter of 2018, which has been classified on our balance sheet under "Accumulated accrued interest" and represents future interest expense for the relevant facilities that has been recognized in advance as a result of the application of Troubled Debt Restructuring ("TDR") accounting in connection with our 2018 debt refinancing;
(ii) a $3.1 million increase in interest expense due to an increase in debt service cost by approximately 1.7%, partially offset by a $347.7 million decrease in our average debt (including leaseback obligations), to $1,603.1 million in the three months ended September 30, 2019, compared to $1,950.8 million in the three months ended September 30, 2018; and
(iii) a $0.5 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2019, our bank debt outstanding, gross of deferred finance costs, was $1,450.0 million and leaseback obligation was $141.4 million compared to bank debt of $1,694.5 million outstanding as of September 30, 2018.
Interest income increased by $0.1 million to $1.6 million in the three months ended September 30, 2019 compared to $1.5 million in the three months ended September 30, 2018.
Other finance costs, netOther finance costs, net decreased by $0.4 million to $0.3 million in the three months ended September 30, 2019 compared to $0.7 million in the three months ended September 30, 2018 mainly due to decreased exit fees expenses.
Equity income on investmentsEquity income on investments decreased by $0.1 million to $0.6 million in the three months ended September 30, 2019 compared to $0.7 million in the three months ended September 30, 2018 and relates to the operating performance of Gemini Shipholdings Corporation ("Gemini"), in which the Company has a 49% shareholding interest.
Gain on debt extinguishmentThe gain on debt extinguishment of $116.4 million in the three months ended September 30, 2018 related to our 2018 debt refinancing and consisted of debt principal reduction net of refinancing related fees.
Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three month periods ended September 30, 2019 and 2018.
Other income/(expenses), netOther income/(expenses), net was nil in the three months ended September 30, 2019 compared to $21.6 million in expenses in the three months ended September 30, 2018 mainly due to $21.8 million of refinancing-related professional fees in the prior period.
Adjusted EBITDAAdjusted EBITDA decreased by 4.1%, or $3.4 million, to $79.3 million in the three months ended September 30, 2019 from $82.7 million in the three months ended September 30, 2018. As described above, the decrease is mainly attributable to a $6.0 million decrease in operating revenues and a $0.1 million decrease in operating performance on our equity investments, which were partially offset by a $2.7 million decrease in total operating expenses. Adjusted EBITDA for the three months ended September 30, 2019 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.
Nine months ended September 30, 2019 compared to the nine months ended September 30, 2018
During the nine months ended September 30, 2019 and September 30, 2018, Danaos had an average of 55 containerships. Our fleet utilization for the nine months ended September 30, 2019 was 98.8% compared to 96.4% for the nine months ended September 30, 2018.
Our adjusted net income amounted to $110.7 million, or $7.23 per share, for the nine months ended September 30, 2019 compared to $94.6 million, or $10.30 per share, for the nine months ended September 30, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14 implemented on May 2, 2019). We have adjusted our net income in the nine months ended September 30, 2019 for non-cash fees amortization and accrued financing fees of $13.3 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $16.1 million in adjusted net income for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018 is attributable to a $14.0 million decrease in net finance expenses and a $8.6 million decrease in total operating expenses, which were partially offset by a $6.1 million decrease in the operating revenue and a $0.4 million decrease in the operating performance of our equity investment in Gemini.
On a non-adjusted basis, our net income amounted to $97.4 million, or $6.36 per diluted share, for the nine months ended September 30, 2019 compared to net income of $148.0 million (including gain on debt extinguishment and refinancing-related professional fees described below), or $16.12 per diluted share, for the nine months ended September 30, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14).
Operating RevenuesOperating revenues decreased by $6.1 million, to $337.0 million in the nine months ended September 30, 2019 from $343.1 million in the nine months ended September 30, 2018.
Operating revenues for the nine months ended September 30, 2019 reflect:
- a $10.0 million decrease in revenues in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018, mainly due to the re-chartering of certain of our vessels that concluded long-term charters over the last twelve months and were re-deployed at lower spot rates in the nine months ended September 30, 2019; and
- a $3.9 million increase in revenues due to higher fleet utilization of our vessels in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.
Vessel Operating ExpensesVessel operating expenses decreased by 1.4%, or $1.1 million, to $78.0 million in the nine months ended September 30, 2019 from $79.1 million in the nine months ended September 30, 2018. The average daily operating cost per vessel for vessels on time charter was $5,605 per day for the nine months ended September 30, 2019 compared to $5,678 per day for the nine months ended September 30, 2018. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
DepreciationDepreciation expense decreased by 10.7%, or $8.6 million, to $72.1 million in the nine months ended September 30, 2019 from $80.7 million in the nine months ended September 30, 2018 mainly due to decreased depreciation expense for 10 vessels for which we recorded an impairment charge on December 31, 2018.
Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs decreased by $0.4 million, to $6.5 million in the nine months ended September 30, 2019 compared to $6.9 million in the nine months ended September 30, 2018. The decrease was mainly due to a decreased number of vessels dry-docked.
General and Administrative ExpensesGeneral and administrative expenses increased by $1.4 million, to $19.8 million in the nine months ended September 30, 2019, from $18.4 million in the nine months ended September 30, 2018. The increase was mainly due to increased share based compensation costs.
Other Operating ExpensesOther Operating Expenses include Voyage Expenses.
Voyage ExpensesVoyage expenses decreased by $0.4 million, to $8.8 million in the nine months ended September 30, 2019 from $9.2 million in the nine months ended September 30, 2018.
Interest Expense and Interest IncomeInterest expense decreased by 17.3%, or $11.5 million, to $54.9 million in the nine months ended September 30, 2019 from $66.4 million in the nine months ended September 30, 2018. The decrease in interest expense is attributable to:
(i) a $27.8 million decrease in interest expense on two of our credit facilities for which we recognized an interest expense accrual in the third quarter of 2018, which has been classified on our balance sheet under "Accumulated accrued interest" and represents future interest expense for the relevant facilities that has been recognized in advance as a result of the application of TDR accounting in connection with our 2018 debt refinancing;
(ii) a $12.9 million increase in interest expense due to an increase in debt service cost of approximately 2.3%, partially offset by a $544.7 million decrease in our average debt (including leaseback obligations), to $1,629.8 million in the nine months ended September 30, 2019, compared to $2,174.5 million in the nine months ended September 30, 2018; and
(iii) a $3.4 million increase in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2019, our bank debt outstanding, gross of deferred finance costs, was $1,450.0 million and leaseback obligation was $141.4 million compared to bank debt of $1,694.5 million outstanding as of September 30, 2018.
Interest income increased by $0.5 million to $4.8 million in the nine months ended September 30, 2019 compared to $4.3 million in the nine months ended September 30, 2018.
Other finance costs, netOther finance costs, net decreased by $0.2 million, to $2.4 million in the nine months ended September 30, 2019 from $2.6 million in the nine months ended September 30, 2018.
Equity income on investmentsEquity income on investments decreased by $0.4 million to $0.5 million in the nine months ended September 30, 2019 compared to $0.9 million in the nine months ended September 30, 2018 and relates to the operating performance of Gemini, in which the Company has a 49% shareholding interest.
Gain on debt extinguishmentThe gain on debt extinguishment of $116.4 million in the nine months ended September 30, 2018 related to our 2018 debt refinancing and consists of debt principal reduction net of refinancing related fees.
Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ended September 30, 2019 and 2018.
Other income/(expenses), netOther income/(expenses), net was $0.4 million in income in the nine months ended September 30, 2019 compared to $50.6 million in expenses in the nine months ended September 30, 2018 mainly due to $51.5 million of refinancing-related professional fees in the prior period.
Adjusted EBITDAAdjusted EBITDA decreased by 2.2%, or $5.3 million, to $232.4 million in the nine months ended September 30, 2019 from $237.7 million in the nine months ended September 30, 2018. As described above, this decrease is mainly attributable to a $6.1 million decrease in operating revenue, a $1.3 million increase in other finance costs and a $0.4 million decrease in operating performance on our equity investments, which were partially offset by a $2.5 million decrease in total operating expenses. Adjusted EBITDA for the nine months ended September 30, 2019 is adjusted for stock based compensation of $3.1 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Recent DevelopmentsOn October 2, 2019, we entered into an agreement to acquire a 8,500 TEU container vessel built in 2005 for a gross purchase price of $25.0 million. This vessel is expected to be delivered to us prior to the end of May 2020.
Conference Call and WebcastOn Tuesday November 5, 2019 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 November 12, 2019 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 101366720# as the access code.
Audio WebcastThere 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 PresentationA slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).
About Danaos CorporationDanaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 60 containerships aggregating 360,147 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 StatementsMatters 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 effects of the 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 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 24 unscheduled off-hire days in the three months ended September 30, 2019. 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 | ||||
2019 | 2019 | 2019 | Total | ||||
Ownership Days | 4,950 | 5,005 | 5,060 | 15,015 | |||
Less Off-hire Days: | |||||||
Scheduled Off-hire Days | - | (22) | (41) | (63) | |||
Other Off-hire Days | (90) | (10) | (24) | (124) | |||
Operating Days | 4,860 | 4,973 | 4,995 | 14,828 | |||
Vessel Utilization | 98.2% | 99.4% | 98.7% | 98.8% | |||
Operating Revenues (in '000s of US Dollars) | $112,891 | $112,319 | $111,830 | $337,040 | |||
Average Gross Daily Charter Rate | $23,229 | $22,586 | $22,388 | $22,730 | |||
Vessel Utilization (No. of Days) | First Quarter | Second Quarter | Third Quarter | ||||
2018 | 2018 | 2018 | Total | ||||
Ownership Days | 4,950 | 5,005 | 5,060 | 15,015 | |||
Less Off-hire Days: | |||||||
Scheduled Off-hire Days | (125) | (111) | (22) | (258) | |||
Other Off-hire Days | (91) | (84) | (111) | (286) | |||
Operating Days | 4,734 | 4,810 | 4,927 | 14,471 | |||
Vessel Utilization | 95.6% | 96.1% | 97.4% | 96.4% | |||
Operating Revenues (in '000s of US Dollars) | $111,854 | $113,466 | $117,781 | $343,101 | |||
Average Gross Daily Charter Rate | $23,628 | $23,590 | $23,905 | $23,710 | |||
Fleet List
The following table describes in detail our fleet deployment profile as of November 4, 2019:
Vessel Name | Vessel Size (TEU) | Year Built | Expiration of Charter(1) | ||
Containerships | |||||
MSC Ambition | 13,100 | 2012 | June 2024 | ||
Maersk Exeter | 13,100 | 2012 | June 2024 | ||
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 | December 2022 | ||
Pusan C | 9,580 | 2006 | December 2022 | ||
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 | January 2023 | ||
Europe | 8,468 | 2004 | March 2023 | ||
CMA CGM Moliere | 6,500 | 2009 | August 2021 | ||
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 | May 2020 | ||
Dimitra C | 6,402 | 2002 | January 2020 | ||
YM Seattle | 4,253 | 2007 | November 2019 | ||
YM Vancouver | 4,253 | 2007 | April 2020 | ||
Derby D | 4,253 | 2004 | May 2020 | ||
ANL Tongala | 4,253 | 2004 | May 2020 | ||
ZIM Rio Grande | 4,253 | 2008 | May 2020 | ||
ZIM Sao Paolo | 4,253 | 2008 | August 2020 | ||
ZIM Kingston | 4,253 | 2008 | September 2020 | ||
ZIM Monaco | 4,253 | 2009 | November 2020 | ||
ZIM Dalian | 4,253 | 2009 | February 2021 | ||
ZIM Luanda | 4,253 | 2009 | May 2021 | ||
Dimitris C | 3,430 | 2001 | June 2020 | ||
Express Black Sea | 3,400 | 2011 | December 2019 | ||
Express Spain | 3,400 | 2011 | March 2020 | ||
Express Argentina | 3,400 | 2010 | May 2020 | ||
Express Brazil | 3,400 | 2010 | September 2020 | ||
Express France | 3,400 | 2010 | October 2020 | ||
Singapore | 3,314 | 2004 | March 2020 | ||
Colombo | 3,314 | 2004 | February 2020 | ||
MSC Zebra | 2,602 | 2001 | September 2020 | ||
Amalia C | 2,452 | 1998 | March 2020 | ||
Danae C | 2,524 | 2001 | January 2020 | ||
Advance | 2,200 | 1997 | April 2020 | ||
Future | 2,200 | 1997 | November 2019 | ||
Sprinter | 2,200 | 1997 | March 2020 | ||
Stride | 2,200 | 1997 | April 2020 | ||
Progress C | 2,200 | 1998 | March 2020 | ||
Bridge | 2,200 | 1998 | September 2020 | ||
Highway | 2,200 | 1998 | February 2020 | ||
Vladivostok | 2,200 | 1997 | November 2019 | ||
Belita ľ2) | 8,533 | 2006 | September 2021 | ||
Catherine C (2) | 6,422 | 2001 | December 2022 | ||
Leo C (2) | 6,422 | 2002 | September 2022 | ||
Suez Canal(2) | 5,610 | 2002 | April 2020 | ||
Genoaľ2) | 5,544 | 2002 | August 2020 | ||
(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 | Nine months ended | Nine months ended | |||||
September 30, | September 30, | September 30, | September 30, | |||||
2019 | 2018 | 2019 | 2018 | |||||
OPERATING REVENUES | $111,830 | $117,781 | $337,040 | $343,101 | ||||
OPERATING EXPENSES | ||||||||
Vessel operating expenses | (24,858) | (25,461) | (78,035) | (79,052) | ||||
Depreciation & amortization | (26,607) | (29,631) | (78,666) | (87,640) | ||||
General & administrative | (6,422) | (7,431) | (19,783) | (18,390) | ||||
Other operating expenses | (2,792) | (2,883) | (8,794) | (9,230) | ||||
Income From Operations | 51,151 | 52,375 | 151,762 | 148,789 | ||||
OTHER INCOME/(EXPENSES) | ||||||||
Interest income | 1,586 | 1,505 | 4,751 | 4,298 | ||||
Interest expense | (18,216) | (20,509) | (54,903) | (66,378) | ||||
Other finance expenses | (308) | (679) | (2,402) | (2,611) | ||||
Equity income on investments | 560 | 728 | 508 | 912 | ||||
Gain on debt extinguishment | - | 116,365 | - | 116,365 | ||||
Other income/(expenses), net | (5) | (21,637) | 429 | (50,565) | ||||
Realized loss on derivatives | (913) | (931) | (2,709) | (2,763) | ||||
Total Other Income/(Expenses), net | (17,296) | 74,842 | (54,326) | (742) | ||||
Net Income | $33,855 | $127,217 | $97,436 | $148,047 | ||||
EARNINGS PER SHARE | ||||||||
Basic earnings per share1 | $2.27 | $10.80 | $6.52 | $16.15 | ||||
Diluted earnings per share1 | $2.20 | $10.76 | $6.36 | $16.12 | ||||
Basic weighted average number of common shares (in thousands of shares)1 | 14,939 | 11,776 | 14,939 | 9,168 | ||||
Diluted weighted average number of common shares (in thousands of shares)1 | 15,373 | 11,828 | 15,309 | 9,186 | ||||
Non-GAAP Measures2 | |||||||
Reconciliation of Net Income to Adjusted Net Income – Unaudited | |||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2019 | 2018 | 2019 | 2018 | ||||
Net income | $33,855 | $127,217 | $97,436 | $148,047 | |||
Gain on debt extinguishment | - | (116,365) | - | (116,365) | |||
Amortization of financing fees, debt discount & finance fees accrued | 4,027 | 4,834 | 13,270 | 11,432 | |||
Refinancing professional fees | - | 21,766 | - | 51,467 | |||
Adjusted Net Income | $37,882 | $37,452 | $110,706 | $94,581 | |||
Adjusted Earnings Per Share, diluted1 | $2.46 | $3.17 | $7.23 | $10.30 | |||
Diluted weighted average number of shares (in thousands)1 | 15,373 | 11,828 | 15,309 | 9,186 | |||
1 | Basic and diluted earnings per share and basic and diluted weighted average number of shares give retroactive effect to the 1-for-14 reverse stock split effected on May 2, 2019, for all periods presented. |
2 | 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 and nine months ended September 30, 2019 and 2018. 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 | ||||
September 30, | December 31, | ||||
2019 | 2018 | ||||
ASSETS | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | $82,823 | $77,275 | |||
Accounts receivable, net | 7,637 | 9,225 | |||
Other current assets | 37,128 | 33,250 | |||
127,588 | 119,750 | ||||
NON-CURRENT ASSETS | |||||
Fixed assets, net | 2,412,274 | 2,480,329 | |||
Deferred charges, net | 11,720 | 13,031 | |||
Investments in affiliates | 7,871 | 7,363 | |||
Other non-current assets | 78,231 | 59,369 | |||
2,510,096 | 2,560,092 | ||||
TOTAL ASSETS | $2,637,684 | $2,679,842 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
CURRENT LIABILITIES | |||||
Long-term debt, current portion | $115,551 | $113,777 | |||
Accumulated accrued interest, current portion | 34,610 | 35,782 | |||
Long-term leaseback obligations, current portion | 15,202 | - | |||
Accounts payable, accrued liabilities & other current liabilities | 56,840 | 73,142 | |||
222,203 | 222,701 | ||||
LONG-TERM LIABILITIES | |||||
Long-term debt, net | 1,298,371 | 1,508,108 | |||
Accumulated accrued interest, net of current portion | 167,237 | 200,574 | |||
Long-term leaseback obligations, net | 126,172 | - | |||
Other long-term liabilities | 31,945 | 57,606 | |||
1,623,725 | 1,766,288 | ||||
STOCKHOLDERS' EQUITY | |||||
Common stock1 | 154 | 152 | |||
Additional paid-in capital1 | 730,620 | 727,562 | |||
Accumulated other comprehensive loss | (118,303) | (118,710) | |||
Retained earnings | 179,285 | 81,849 | |||
791,756 | 690,853 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $2,637,684 | $2,679,842 | |||
1 | Common stock and Additional paid-in capital as of December 31, 2018 give retroactive effect to the 1-for-14 reverse stock split. |
DANAOS CORPORATION | ||||||||
Condensed Consolidated Statements of Cash Flows - Unaudited | ||||||||
(Expressed in thousands of United States dollars) | ||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||
September 30, | September 30, | September 30, | September 30, | |||||
2019 | 2018 | 2019 | 2018 | |||||
Operating Activities: | ||||||||
Net income | $33,855 | $127,217 | $97,436 | $148,047 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 24,336 | 26,995 | 72,141 | 80,752 | ||||
Amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued | 6,298 | 7,470 | 19,795 | 18,320 | ||||
Gain on debt extinguishment | - | (116,365) | - | (116,365) | ||||
PIK interest | 850 | 414 | 2,545 | 414 | ||||
Payments for drydocking/special survey | (3,524) | (1,554) | (5,214) | (11,905) | ||||
Amortization of deferred realized losses on cash flow interest rate swaps | 913 | 931 | 2,709 | 2,763 | ||||
Equity income on investments | (560) | (728) | (508) | (912) | ||||
Stock based compensation | 1,195 | 157 | 3,060 | 157 | ||||
Accounts receivable | (141) | 6,976 | 1,588 | (2,316) | ||||
Other assets, current and non-current | (2,923) | 17,340 | (13,996) | 8,512 | ||||
Accounts payable and accrued liabilities | (379) | (9,701) | (563) | (1,608) | ||||
Other liabilities, current and long-term | (3,731) | (3,844) | (11,348) | (14,959) | ||||
Net Cash provided by Operating Activities | 56,189 | 55,308 | 167,645 | 110,900 | ||||
Investing Activities: | ||||||||
Vessel additions and advances | (4,124) | (400) | (14,762) | (2,083) | ||||
Net Cash used in Investing Activities | (4,124) | (400) | (14,762) | (2,083) | ||||
Financing Activities: | ||||||||
Proceeds from long-term debt | - | 325,852 | - | 325,852 | ||||
Proceeds from sale-leaseback of vessels | - | - | 146,523 | - | ||||
Debt repayment | (25,578) | (358,726) | (231,389) | (407,107) | ||||
Payments of leaseback obligations | (3,063) | - | (5,149) | - | ||||
Payments of accumulated accrued interest | (8,979) | - | (26,846) | - | ||||
Finance costs | (10,425) | (26,967) | (30,474) | (26,967) | ||||
Paid-in capital | - | 10,000 | - | 10,000 | ||||
Share issuance costs | - | (169) | - | (169) | ||||
Net Cash used in Financing Activities | (48,045) | (50,010) | (147,335) | (98,391) | ||||
Net increase in cash, cash equivalents and restricted cash | 4,020 | 4,898 | 5,548 | 10,426 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 78,803 | 75,235 | 77,275 | 69,707 | ||||
Cash, cash equivalents and restricted cash, end of period | $82,823 | $80,133 | $82,823 | $80,133 | ||||
DANAOS CORPORATION | |||||||
Reconciliation of Net Income to Adjusted EBITDA - Unaudited | |||||||
(Expressed in thousands of United States dollars) | |||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2019 | 2018 | 2019 | 2018 | ||||
Net income | $33,855 | $127,217 | $97,436 | $148,047 | |||
Depreciation | 24,336 | 26,995 | 72,141 | 80,752 | |||
Amortization of deferred drydocking & special survey costs | 2,271 | 2,636 | 6,525 | 6,888 | |||
Amortization of deferred finance costs, debt discount and other finance fees accrued | 4,027 | 4,834 | 13,270 | 11,432 | |||
Amortization of deferred realized losses on interest rate swaps | 913 | 931 | 2,709 | 2,763 | |||
Interest income | (1,586) | (1,505) | (4,751) | (4,298) | |||
Interest expense | 14,317 | 16,079 | 42,057 | 56,834 | |||
Gain on debt extinguishment | - | (116,365) | - | (116,365) | |||
Stock based compensation | 1,195 | 157 | 3,060 | 157 | |||
Refinancing professional fees | - | 21,766 | - | 51,467 | |||
Adjusted EBITDA(1) | $79,328 | $82,745 | $232,447 | $237,677 | |||
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, stock based compensation, gain on debt extinguishment and refinancing professional fees. 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 and nine months ended September 30, 2019 and 2018. 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. |
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SOURCE Danaos Corporation