DryShips Inc. (NASDAQ:DRYS) (“DryShips” or the “Company”), a
diversified owner and operator of ocean going cargo vessels, today
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 shareExcluding 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 ProgramAs
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.
____________(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 EndedDecember 31, |
|
Year EndedDecember 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 EndedDecember 31, |
|
Year EndedDecember 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 EndedDecember 31, |
|
Year EndedDecember 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
StatementsUnaudited 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About DryShips Inc.
The Company is a diversified owner and operator
of ocean going cargo vessels that operate worldwide. As of February
28, 2019, the Company operates a fleet of 31 vessels comprising of
(i) 6 Panamax drybulk vessels; (ii) 8 Newcastlemax drybulk vessels;
(iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier;
(v) 3 Aframax tankers; (vi) 2 Suezmax tankers; and (vii) 6 Offshore
Support Vessels, including 2 Platform Supply and 4 Oil Spill
Recovery Vessels.
DryShips’ common stock is listed on the NASDAQ Capital Market
where it trades under the symbol “DRYS.”
Visit the Company’s website at www.dryships.com
Forward-Looking Statement
Matters discussed in this press release may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The Private
Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements in order to encourage
companies to provide prospective information about their business.
The Company desires to take advantage of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 and is
including this cautionary statement in connection with such safe
harbor legislation.
Forward-looking statements reflect the Company’s
current views with respect to future events and financial
performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The forward-looking statements in this release
are based upon various assumptions, many of which are based, in
turn, upon further assumptions, including without limitation,
management’s examination of historical operating trends, data
contained in the Company’s records and other data available from
third parties. Although the Company 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 the Company’s
control, the Company cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
Important factors that, in the Company’s view,
could cause actual results to differ materially from those
discussed in the forward-looking statements include the strength of
world economies and currencies, general market conditions,
including changes in charter rates, utilization of vessels and
vessel values, failure of a seller or shipyard to deliver one or
more vessels, failure of a buyer to accept delivery of a vessel,
the Company’s inability to procure acquisition financing, default
by one or more charterers of the Company’s ships, changes in demand
for drybulk, oil or natural gas commodities, changes in demand that
may affect attitudes of time charterers, scheduled and unscheduled
drydockings, changes in the Company’s voyage and operating
expenses, including bunker prices, dry-docking and insurance costs,
changes in governmental rules and regulations, changes in the
Company’s relationships with the lenders under its debt agreements,
potential liability from pending or future litigation, domestic and
international political conditions, potential disruption of
shipping routes due to accidents, international hostilities and
political events or acts by terrorists.
Risks and uncertainties are further described in
reports filed by DryShips with the U.S. Securities and Exchange
Commission, including the Company’s most recently filed Annual
Report on Form 20-F.
Investor Relations / Media:
Nicolas BornozisCapital Link, Inc. (New
York)Tel. 212-661-7566E-mail: dryships@capitallink.com
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