DryShips posts increased earnings

DryShips

DryShips, a diversified owner and operator of ocean going cargo vessels, announced its unaudited financial and operating results for the quarter ended December 31, 2018.

Fourth Quarter 2018 Financial Highlights

  • For the fourth quarter of 2018, the Company reported net income of $5.8 million, or $0.06 basic and diluted earnings per share.

    Included in the fourth quarter of 2018 results are:

    — Losses from the sale of vessels to unaffiliated buyers and vessel impairments totaling $0.6 million, or $0.01 per share.

    — Vessel dry-docking costs of $1.4 million, or $0.02 per share

    Excluding the above, the Company’s net results would have amounted to net income of $7.8 million, or $0.09 earnings per share.

  • The Company reported Adjusted EBITDA of $19.4 million for the fourth quarter of 2018.([1])

Recent Developments

  • Common Stock Repurchase Program

    As of February 28, 2019, the Company has repurchased a total of 6,523,854 shares of its common stock for an aggregate amount of $37.3 million, including commissions, pursuant to its previously announced new stock repurchase program under which the Company may repurchase up to $50.0 million of its outstanding common shares until October 29, 2019. Under its old $50.0 million stock repurchase program, which was completed in full on October 5, 2018, the Company had also repurchased a total of 10,864,227 shares of its common stock for an aggregate amount of $50.2 million, including commissions. The Company currently has outstanding 86,886,627 shares of common stock.

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(1) Adjusted EBITDA is a non-U.S. GAAP measure; please see later in this press release for reconciliation to net income / (loss).

Fleet List

The table below describes the Company’s fleet as of February 28, 2019:

Year Gross rate Redelivery
Built DWT Per day Earliest Latest
Drybulk fleet
Newcastlemax:
Bacon 2013 205,170 T/C Index Linked Sep-19 Oct-19
Conquistador* 2016 209,090 T/C Index Linked N/A N/A
Huahine 2013 206,037 T/C Index Linked Sep-19 Oct-19
Judd 2015 205,796 T/C Index Linked Sep-19 Oct-19
Marini* 2014 205,854 T/C Index Linked Oct-19 Dec-19
Morandi 2013 205,854 T/C Index Linked Aug-19 Sep-19
Pink Sands* 2016 208,931 T/C Index Linked N/A N/A
Xanadu* 2017 208,827 T/C Index Linked N/A N/A
Kamsarmax:
Castellani 2014 82,129 Spot N/A N/A
Kelly 2017 81,300 Spot N/A N/A
Matisse 2014 81,128 Spot N/A N/A
Nasaka 2014 81,918 Spot N/A N/A
Valadon 2014 81,198 Spot N/A N/A
 
Panamax:
Catalina 2005 74,432 Spot N/A N/A
Levanto 2001 73,925 Spot N/A N/A
Ligari 2004 75,583 Spot N/A N/A
Majorca 2005 74,477 Spot N/A N/A
Rapallo 2009 75,123 Spot N/A N/A
Raraka 2012 76,037 Spot N/A N/A
Tanker fleet
Very Large Crude Carrier:
Shiraga 2011 320,105 Spot N/A N/A
 
Suezmax:
Marfa 2017 159,513 Spot N/A N/A
Samsara** 2017 159,855 $18,000 Base rate plus profit share Mar.-22 May-25
Aframax:
Balla 2017 113,293 Spot N/A N/A
Botafogo 2010 106,892 Spot N/A N/A
Stamos 2012 115,666 Spot N/A N/A
Offshore Supply fleet
 
Platform Supply Vessels:
Crescendo 2012 1,457 Laid up N/A N/A
Colorado 2012 1,430 Laid up N/A N/A
Oil Spill Recovery Vessels:
Indigo 2013 1,401 Laid up N/A N/A
Jacaranda 2012 1,360 Laid up N/A N/A
Emblem 2012 1,363 Laid up N/A N/A
Jubilee 2012 1,317 Laid up N/A N/A

* The vessel is time chartered by TMS Dry Ltd., an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

** The vessel is time chartered by Cecilia Shipholdings Limited, an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited)
(U.S. Dollars in thousands, except average daily results)

Drybulk Three Months Ended
December 31,
Year Ended
December 31,
2017 2018 2017 2018
Average number of vessels(1) 22.0 17.1 18.1 19.2
Total voyage days for vessels(2) 1,952 1,553 6,534 6,947
Total calendar days for vessels(3) 2,022 1,576 6,604 7,024
Fleet utilization(4) 96.5% 98.5% 98.9% 98.9%
Time charter equivalent(5) $11,410 $14,023 $8,544 $12,405
Vessel operating expenses (daily)(6) $6,385 $5,907 $6,061 $6,343

 

Tanker Three Months Ended
December 31,
Year Ended
December 31,
2017 2018 2017 2018
Average number of vessels(1) 4.0 5.2 2.5 4.6
Total voyage days for vessels(2) 368 478 911 1,685
Total calendar days for vessels(3) 368 478 911 1,685
Fleet utilization(4) 100% 100% 100% 100%
Time charter equivalent(5) $17,003 $27,981 $13,216 $20,715
Vessel operating expenses (daily)(6) $7,745 $7,479 $9,693 $7,536
Gas Carrier Three Months Ended
December 31,
Year Ended
December 31,
2017 2018 2017 2018
Average number of vessels(1) 2.6 1.3 1.0 3.3
Total voyage days for vessels(2) 241 115 355 1,197
Total calendar days for vessels(3) 241 115 355 1,197
Fleet utilization(4) 100% 100% 100% 100%
Time charter equivalent(5) $28,058 $27,339 $27,994 $27,883
Vessel operating expenses (daily)(6) $13,220 $10,087 $16,183 $8,611

(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company’s 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 the Company’s possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(3) Calendar days are the total number of days the vessels were in the Company’s possession for the relevant period including off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(4) Fleet utilization is the percentage of time that the Company’s 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. The Company’s 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 the Company’s vessels, the most directly comparable U.S. GAAP measure, because it assists the Company’s 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 including dry-docking costs, is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) – continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. Dollars, and voyage days)

Drybulk Three Months Ended December 31, Year Ended December 31,
2017 2018 2017 2018
Voyage revenues $ 25,808 $ 24,475 $ 65,724 $ 94,369
Voyage expenses (3,536) (2,698) (9,900) (8,190)
Time charter equivalent revenues $ 22,272 $ 21,777 $ 55,824 $ 86,179
Total voyage days for fleet 1,952 1,553 6,534 6,947
Time charter equivalent (TCE) $ 11,410 $ 14,023 $ 8,544 $ 12,405
Tanker Three Months Ended December 31, Year Ended December 31,
2017 2018 2017 2018
Voyage revenues $ 9,786 $ 21,497 $ 20,858 $ 57,004
Voyage expenses (3,529) (8,122) (8,818) (22,100)
Time charter equivalent revenues $ 6,257 $ 13,375 $ 12,040 $ 34,904
Total voyage days for fleet 368 478 911 1,685
Time charter equivalent (TCE) $ 17,003 $ 27,981 $ 13,216 $ 20,715
Gas Carrier Three Months Ended December 31, Year Ended December 31,
2017 2018 2017 2018
Voyage revenues $ 7,000 $ 3,290 $ 10,316 $ 34,762
Voyage expenses (238) (146) (378) (1,386)
Time charter equivalent revenues $ 6,762 $ 3,144 $ 9,938 $ 33,376
Total voyage days for fleet 241 115 355 1,197
Time charter equivalent (TCE) $ 28,058 $ 27,339 $ 27,994 $ 27,883

DryShips Inc.

Financial Statements
Unaudited Condensed Consolidated Statements of Operations

(Expressed in Thousands of U.S. Dollars
except for share and per share data)
 

Three Months Ended December 31,

Year Ended December 31,
  2017 2018 2017 2018
REVENUES:
Voyage revenues $ 42,593 $ 49,262 $ 100,716 $ 186,135
42,593 49,262 100,716 186,135
 
EXPENSES:
Voyage expenses 7,308 10,966 19,704 31,676
Vessel operating expenses 19,192 14,235 60,260 68,391
Depreciation 6,334 6,202 14,966 25,881
Impairment loss,(gain)/loss from sale of vessels and other (4,425 ) 585 (4,125 ) (9,623 )
General and administrative expenses 7,334 6,314 30,972 28,314
Other, net (86 ) (12 ) 853
Operating income/(loss) 6,850 11,046 (21,049 ) 40,643
OTHER EXPENSES:
Interest and finance costs, net of interest income (5,029 ) (5,346 ) (13,342 ) (18,946 )
Loss on private placement (7,600 )
Other, net (32 ) 128 (553 ) 83
Total other expenses, net (5,061 ) (5,218 ) (21,495 ) (18,863 )
Net income/(loss) 1,789 5,828 (42,544 ) 21,780
 
Net income/(loss) attributable to DryShips Inc. common stockholders 1,789 5,828 (39,739 ) 21,780
Earnings/(Losses) per common share, basic and diluted $ 0.02 $ 0.06 $ (1.13 ) $ 0.22
Weighted average number of shares, basic and diluted 103,088,937 91,050,308 35,225,784 98,113,545

DryShips Inc.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in Thousands of U.S. Dollars
except for share data)
December 31, 2017 December 31, 2018
 
ASSETS  
Cash, cash equivalents, including restricted cash (current and non-current) $ 30,226 $ 156,881
Other current and non-current assets 123,713 99,092
Advances for vessels under construction 31,898
Vessels, net 749,088 755,332
Total assets 934,925 1,011,305
LIABILITIES AND STOCKHOLDERS’ EQUITY  
   
Total debt and finance lease liabilities 216,969 362,047
Total other liabilities 10,920 11,529
Total stockholders’ equity 707,036 637,729
Total liabilities and stockholders’ equity $ 934,925 $ 1,011,305
SHARE COUNT DATA
Common stock issued 104,274,708 104,274,708
Less: Treasury stock (17,042,680 )
Common stock issued and outstanding 104,274,708 87,232,028

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel sales and impairments and certain other non-cash items as described below. 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, and the Company’s 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 the Company’s lenders as a credit metric and 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:

(Expressed in Thousands of U.S. Dollars) Three Months Ended
December 31,
Year Ended
December 31,
  2017 2018 2017 2018
 
Net income/(loss) $ 1,789 $ 5,828 $ (42,544 ) $ 21,780
Add: Net interest expense 5,029 5,346 13,342 18,946
Add: Depreciation 6,334 6,202 14,966 25,881
Add: Dry-dockings 1,113 1,392 1,113 5,301
Add: Impairment loss, (gain)/loss from sale of vessel and other (4,425 ) 585 (4,125 ) (9,623 )
Add: Loss on private placement 7,600
Add: Write-off of capitalized expenses 470
Add: Income taxes 71 2 152 6
Adjusted EBITDA $ 9,911 $ 19,355 $ (9,496 ) $ 62,761

 

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