Navios Acquisition in strong fourth quarter showing

Angeliki+Frangou_Navios

Navios Maritime Acquisition Corporation (“Navios Acquisition”), an owner and operator of tanker vessels, reported its financial results today for the fourth quarter and the year ended December 31, 2015. 

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “Navios Acquisition reported net income of $89.7 million or $0.57 per share for the full year of 2015. We declared a dividend of $0.05 per share for the quarter, resulting in a dividend yield of about 10.5%. We also repurchased about 2.7 million shares of common stock under our share repurchase program, providing an additional return of about 1.8%.”

Angeliki Frangou continued, “All our vessels are on-the-water and are generating cash flow. We have no material debt maturity before 2021 or any committed growth capex. In addition, while our leverage increased slightly in the fourth quarter of 2015 as a result of taking delivery of two vessels, we expect net debt to decline in 2016 through the cash flow we expect to generate.“

HIGHLIGHTS — RECENT DEVELOPMENTS

Dividend of $0.05 per share of common stock

On February 4, 2016, the Board of Directors of Navios Acquisition declared a quarterly cash dividend for the fourth quarter of 2015 of $0.05 per share of common stock. The dividend is payable on March 23, 2016 to stockholders of record as of March 17, 2016 and provides a current yield of 10.5%.

Profit sharing

During the fourth quarter of 2015, Navios Acquisition benefited from the healthy market and earned $5.9 million under its profit sharing arrangements. Profit sharing recognized for the year ended December 31, 2015 was $32.1 million.

Vessel Sale and Deliveries

On January 27, 2016, Navios Acquisition sold the Nave Lucida, a 2005-built, MR2 product tanker to an unaffiliated third party for a sale price of $18.6 million.

On December 2, 2015, Navios Acquisition took delivery of the Nave Photon, a 2008-built, 297,395 dwt VLCC from an unaffiliated third party for a purchase price of $64.5 million.

On November 6, 2015, Navios Acquisition took delivery of the Nave Spherical, a 2009-built, 297,188 dwt VLCC from an unaffiliated third party for a purchase price of $68.5 million.

Impact on Navios Acquisition’s 8.125% Secured Bond Due 2021

The Nave Photon has been provided as collateral under the 8.125% First Priority Ship Mortgage Notes due 2021, in place of the Nave Rigel (LR1 product tanker) and the Nave Dorado (MR2 product tanker). As a result, approximately $3.0 million of value has been added to the collateral package.

Credit Facility

In December 2015, Navios Acquisition entered into a term loan facility of up to $44.0 million with BNP Paribas for the post-delivery financing of an LR1 product tanker and an MR2 product tanker. The loan matures in the fourth quarter of 2021. The credit facility bears interest at LIBOR plus 230 bps per annum and has an amortization profile of approximately 11 years.

Share repurchase program

In 2015, Navios Acquisition repurchased 2,704,752 shares for approximately $9.9 million, under the $50.0 million share repurchase program, providing an additional return of 1.8% to our shareholders.

Time Charter Coverage

Navios Acquisition currently owns 38 vessels; eight are VLCCs, 26 are product tankers and four are chemical tankers, all of which are currently on-the-water.

As of February 10, 2016, Navios Acquisition had contracted 84.2% and 44.3% of its available days on a charter-out basis for 2016 and 2017, respectively, expecting to generate revenues of approximately to $194.6 million and $97.8 million, respectively. The average contractual daily charter-out rate for the fleet is expected to be $19,238 and $22,475 for 2016 and 2017, respectively.

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Acquisition has compiled consolidated statement of operations for the three months and years ended December 31, 2015 and 2014. The quarterly information for 2015 and 2014 was derived from the unaudited condensed consolidated financial statements for the respective periods.

  Three Month
 Period ended
December 31,
2015
    Three Month
 Period ended
December 31,
2014
    Year ended
December 31,
2015
   

 

Year ended
December 31,
2014
(Expressed in thousands of U.S. dollars)   (unaudited)     (unaudited)     (unaudited)     (unaudited)
Revenue $ 76,685 $ 72,357 $ 313,396 $ 264,877
EBITDA $ 52,634 $ 68,277 $ 220,770 $ 160,634
Adjusted EBITDA $ 53,007(1) $ 45,653(1) $ 217,361(1) $   156,167(1)
Net income $ 20,125 $ 27,010 $ 89,737 $ 13,047
Adjusted net income $ 20,498(1) $ 10,694(1) $ 87,104(1) $ 14,886(1)
Earnings per share (basic) $ 0.13 $ 0.17 $ 0.57 $ 0.08
Adjusted net income per share (basic) $   0.13(1) $   0.07(1) $ 0.55(1) $    0.09(1)
(1 ) Adjusted EBITDA, Adjusted net income and Adjusted net income per share (basic) for the three month period ended December 31, 2015 in this document exclude non-cash stock-based compensation of $0.4 million.

Adjusted EBITDA for the three month period ended December 31, 2014 in this document excludes $23.5 million gain on sale of vessels and $0.9 million of share-based compensation. Net income and net income per share (basic) for the three month period ended December 31, 2014 have been further adjusted to exclude $6.3 million write off of deferred financing fees and debt prepayment expenses.

Adjusted EBITDA for the year ended December 31, 2015 in this document excludes $5.8 million gain on sale of vessels and $2.4 million of share based compensation. Net income and net income per share (basic) have been further adjusted to exclude $0.8 million write off of deferred financing fees and debt prepayment expenses.

Adjusted EBITDA for the year ended December 31, 2014 in this document excludes $22.6 million gain on sale of vessels, $11.7 million impairment loss, $1.2 million fair value loss from receivable settled in the second quarter of 2014 and $5.3 million of share-based compensation. Net income and net income per share (basic) for the year ended December 31, 2014 have been further adjusted to exclude $6.3 million write off of deferred financing fees and debt prepayment expenses.

EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted net income per share (basic) are non-GAAP financial measures and should not be used in isolation or substitution for Navios Acquisition’s results (see Exhibit II for reconciliation of EBITDA and Adjusted EBITDA).

Three month periods ended December 31, 2015 and 2014   

Revenue for the three month period ended December 31, 2015 increased by $4.3 million or 6.0% to $76.7 million, as compared to $72.4 million for the same period in 2014. The increase was mainly attributable to: (i) the increase in revenue following the acquisition of six vessels since October 2014; and (ii) the profit sharing increase by $1.5 million to $5.9 million recognized in the three month period ended December 31, 2015, as compared to $4.4 million for the same period in 2014. The increase was partially mitigated by $15.0 million due to the sale of four VLCCs in November 2014 and two VLCCs in June 2015. Available days of the fleet slightly increased to 3,386 days for the three month period ended December 31, 2015, as compared to 3,384 days for the three month period ended December 31, 2014. The Time Charter Equivalent Rate (“TCE Rate”) increased to $22,291 for the three month period ended December 31, 2015, from $21,124 for the three month period ended December 31, 2014.

Adjusted EBITDA for the three month period ended December 31, 2015 increased by $7.4 million to $53.0 million from $45.7 million in the three month period ended December 31, 2014. The increase in Adjusted EBITDA was due to a: (i) $4.3 million increase in revenue; (ii) $5.1 million increase in equity in net earnings of affiliated companies; (iii) $0.7 million decrease in management fees; and (iv) a $0.2 million decrease in other expense. This increase was partially mitigated by a: (a) $2.5 million increase in general and administrative expenses; (b) $0.3 million increase in time charter expenses; and (c) $0.1 million decrease in other income.

Adjusted net income for the three month period ended December 31, 2015, increased by $9.8 million to $20.5 million compared to a $10.7 million, for the three month period ended December 31, 2014. The increase in Adjusted net income of $9.8 million was due to: (i) an increase of $7.4 million in Adjusted EBITDA; (ii) a $2.0 million decrease in depreciation and amortization due to the sale of the six VLCCs to Navios Maritime Midstream Partners L.P. and; (iii) a $0.5 million decrease in interest expense and finance cost, net. This increase was partially mitigated by a $0.1 million increase in direct vessel expenses.

Year ended December 31, 2015 and 2014

Revenue for the year ended December 31, 2015 increased by $48.5 million or 18.3% to $313.4 million, as compared to $264.9 million for the same period in 2014. The increase was mainly attributable to: (i) the increase in revenue following deliveries of 13 vessels from January 2014 until December 31, 2015; and (ii) the profit sharing increase by $25.4 million to $32.1 million recognized in the year ended December 31, 2015, as compared to $6.7 million for the same period in 2014. The increase was partially mitigated by $73.7 million due to the sale of five VLCCs in 2014 and two VLCCs in June 2015. Available days of the fleet increased to 13,743 days for the year ended December 31, 2015, as compared to 13,227 days for the year ended December 31, 2014. The TCE Rate increased to $22,477 for the year ended December 31, 2015, from $19,633 for the year ended December 31, 2014.

Adjusted EBITDA for the year ended December 31, 2015 increased by $61.2 million to $217.4 million from $156.2 million in the year ended December 31, 2014. The increase in Adjusted EBITDA was due to a: (a) $48.5 million increase in revenue; (b) $16.4 million increase in equity in net earnings of affiliated companies; (c) $0.7 million decrease in time charter expenses; and (d) $0.5 million decrease in management fees; partially mitigated by a: (i) $3.8 million increase in general and administrative expenses; (ii) $0.2 million decrease in other income; and (iii) $0.9 increase in other expense.

Adjusted net income for the year ended December 31, 2015, increase by $72.2 million to $87.1 million, compared to $14.9 million for the year ended December 31, 2014. The increase in Adjusted net income by $72.2 million was due to: (a) an increase of $61.2 million in Adjusted EBITDA; (b) a $10.1 million decrease in depreciation and amortization; (c) a $0.4 million decrease in direct vessel expenses; and (d) a $1.0 million increase in interest income; partially mitigated by a $0.5 million increase in interest expense and finance cost, net.

Fleet Employment Profile

The following table reflects certain key indicators of the performance of Navios Acquisition and its core fleet for the three months and the years ended December 31, 2015 and 2014.

Three month period ended
December 31,
Year ended
December 31,
2015
(unaudited)
2014
(unaudited)
2015
(unaudited)
2014
(unaudited)
FLEET DATA
Available days(1) 3,386 3,384 13,743 13,227
Operating days(2) 3,382 3,373 13,707 13,193
Fleet utilization(3) 99.9 % 99.7 % 99.7 % 99.7 %
Vessels operating at period end   39   37   39 37
AVERAGE DAILY RESULTS
Time Charter Equivalent per day(4) $ 22,291 $ 21,124 $ 22,477 $ 19,633
(1 ) Available days for the fleet represent the total calendar days the vessels were in Navios Acquisition’s possession for the relevant period after subtracting off-hire days associated with scheduled repairs, drydockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
(2 ) Operating days: Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
(3 ) Fleet utilization: Fleet utilization is the percentage of time that Navios Acquisition’s vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off hire for reasons other than scheduled repairs, drydockings or special surveys.
(4 ) TCE Rate: Time Charter Equivalent Rate is defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE Rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels of various types of charter contracts for the number of available days of the fleet.

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