Toro Corp. (NASDAQ: TORO), (“Toro”, or the “Company”), an
international energy transportation services company, today
announced its results for the three months and the six months ended
June 30, 2023.
Highlights of the Second Quarter Ended
June 30, 2023:
- Total vessel revenues:
$24.9 million, as compared to $25.8 million for the three months
ended June 30, 2022, or a 3.5% decrease;
- Net income: $55.4 million,
as compared to $5.4 million for the three months ended June 30,
2022, or a 925.9% increase;
- Earnings (basic) per common
share: $3.34 per share, as compared to $0.57 per share for the
three months ended June 30, 2022;
-
EBITDA(1): $56.8 million,
as compared to $7.7 million for the three months ended June 30,
2022;
- Cash and restricted cash of
$128.2 million as of June 30, 2023, as compared to $42.5 million as
of December 31, 2022;
- Delivery of the
M/T Wonder Bellatrix to its new owners on
June 22, 2023, after entering into an agreement to sell the vessel
on May 12, 2023 for $37.0 million, resulting in a net capital gain
of $19.3 million;
- Delivery of the
M/T Wonder Polaris to its new owners on
June 26, 2023, after entering into an agreement to sell the vessel
on May 18, 2023 for $34.5 million, resulting in a net capital gain
of $21.3 million;
- Acquisition of the
LPG Dream Terrax on May 26, 2023, after
entering into an agreement to purchase the vessel on April 26, 2023
for $19.9 million;
- Acquisition of the
LPG Dream Arrax on June 14, 2023, after
entering into an agreement to purchase the vessel on April 26, 2023
for $17.0 million; and
- On April 17, 2023, the
Company entered into a subscription agreement (the “Subscription
Agreement”) with Pani Corp., pursuant to which Toro issued and
sold, and Pani Corp. purchased, 8,500,000 common shares for gross
proceeds of $19,465,000. As of June 30, 2023, the Company had
17,961,009 common shares issued and outstanding.
Highlights of the Six Months Ended June
30, 2023:
- Total vessel revenues:
$56.0 million, as compared to $42.6 million for the six months
ended June 30, 2022, or a 31.5% increase;
- Net income: $77.3 million,
as compared to $6.7 million for the six months ended June 30, 2022,
or a 1,053.7% increase;
- Earnings (basic) per common
share: $5.13 per share, as compared to $0.70 per share for the six
months ended June 30, 2022;
-
EBITDA(1): $80.9 million,
as compared to $11.1 million for the six months ended June 30,
2022; and
- Our spin-off (the
“Spin-Off”) by Castor Maritime Inc. (“Castor”) was completed on
March 7, 2023 and our shares commenced trading on the Nasdaq
Capital Market on the same date.
(1) EBITDA is not a recognized measures under
United States generally accepted accounting principles (“U.S.
GAAP”). Please refer to Appendix B for the definition and
reconciliation of this measure to Net income, the most directly
comparable financial measure calculated and presented in accordance
with U.S. GAAP.
Management Commentary:
Mr. Petros Panagiotidis, Chief Executive Officer
of the Company commented:
“We enjoyed a robust charter market in tankers
during the second quarter, as the supply/demand fundamentals of the
crude and oil product markets remain solid.
Importantly, we entered the gas market by taking
delivery of all four modern LPG carriers we agreed to purchase
during the second quarter, positioning Toro in a segment we believe
offers promising prospects. We continue to renew our fleet by
selling older tonnage, taking advantage of the demand for second
hand tanker vessels.
We will continue to seek opportunities to
profitably grow our business.”
Earnings Commentary:
Second Quarter ended June 30, 2023, and
2022 Results
Total vessel revenues, net of charterer’s
commissions, decreased to $24.9 million in the three months ended
June 30, 2023, from $25.8 million in the same period in 2022. This
decrease is mainly associated with the reduction in the Ownership
Days of our fleet, to 769 days in the three months ended June 30,
2023 from 819 days in the same period in 2022 and increased
employment of vessels in our fleet in pools.
Voyage expenses for our fleet decreased by $10.7
million to $0.7 million in the three months ended June 30, 2023,
from $11.4 million in the same period of 2022. This decrease in
voyage expenses is mainly associated with the decrease in (i) the
Ownership Days of our fleet and (ii) expenses associated with our
vessels’ commercial employment arrangements as during the three
months ended June 30, 2023, the majority of our tanker vessels
operated under pool agreements resulting in a substantial decrease
in bunker consumption cost and port expenses, which were borne by
our pool operators, as compared to the three months ended June 30,
2022, where our Aframax/LR2 segment operated predominantly under
voyage charters.
The increase in Vessel operating expenses by
$0.5 million to $6.1 million in the three months ended June 30,
2023, from $5.6 million in the same period in 2022, mainly reflects
the increase in the daily vessel operating expenses of the vessels
in our fleet to $7,898 in the three months ended June 30, 2023,
from $6,802 in the same period in 2022, partly offset by the
decrease in the Ownership Days of our fleet.
Depreciation expenses for our fleet decreased to
$1.3 million in the three months ended June 30, 2023, from $1.7
million in the same period in 2022 as a result of the decrease in
the Ownership Days of our fleet. Dry-dock and special survey
amortization charges amounted to $0.4 million for the three months
ended June 30, 2023, compared to a charge of $0.1 million in the
three months ended June 30, 2022. This variation in dry-dock
amortization charges primarily resulted from the increase in
dry-dock amortization days from 105 days in the three months ended
June 30, 2022, to 286 dry-dock amortization days in the three
months ended June 30, 2023.
General and administrative expenses in the three
months ended June 30, 2023, amounted to $0.9 million, whereas, in
the same period of 2022 general and administrative expenses totaled
$0.4 million. This increase is mainly associated with (i) incurred
legal and other corporate fees primarily related to the growth of
our company and becoming a public company on March 7, 2023 and (ii)
the flat management fee for the three months ended June 2023,
amounting to $0.8 million. For the three months ended June 30,
2022, and for the period from January 1 through March 7, 2023
(completion of Spin-Off), General and administrative expenses
reflect the expense allocations made to the Company by Castor based
on the proportion of the number of Ownership Days of our fleet
vessels to the total Ownership Days of Castor’s full fleet.
The increase in management fees by $0.3 million,
to $1.0 million in the three months ended June 30, 2023, from $0.7
million in the same period of 2022, mainly reflects the (i)
increased management fees following our entry into the Amended and
Restated Master Management Agreement with effect from July 1, 2022
and (ii) the management agreements for our four LPG carriers, which
are effective from the date of the purchase agreements, on April
26, 2023.
Interest and finance costs, net amounted to
$(0.4) million in the three months ended June 30, 2023, whereas, in
the same period of 2022, interest and finance costs, net amounted
to $0.2 million. This variation is mainly due to a substantial
increase in interest income for the three months ended June 30,
2023 on our available cash, which more than offset an increase in
the weighted average interest rate charged on our long-term debt
from 4.2% in the three months ended June 30, 2022 to 8.1% in the
same period of 2023.
Recent
Financial Developments
Commentary:
Equity update
On April 17, 2023, we entered into a
subscription agreement with Pani Corp., a company controlled by our
Chairman and Chief Executive Officer, pursuant to which on April
19, 2023 we issued and sold, and Pani Corp. purchased, 8,500,000
common shares, par value $0.001 per share, at a purchase price of
$2.29 per share, for gross proceeds of $19.5 million.
On July 14, 2023, we paid Castor a dividend on
the Series A Fixed Rate Cumulative Perpetual Convertible Preferred
Shares (the “Preferred Series A shares”) for the period from April
15, 2023 to July 14, 2023, amounting to $0.4 million.
As of August 9, 2023, we had 17,961,009 common
shares issued and outstanding.
Liquidity/ Financing/ Cash flow
update
Our consolidated cash position (including our
restricted cash) as of June 30, 2023 increased by $85.8 million to
$128.2 million, as compared with our cash position on December 31,
2022. During the six-month period ended June 30, 2023, our cash
position increased mainly as a result of (i) $48.3 million of net
operating cash flows provided, (ii) $27.9 million of net investing
cash flows provided, including $69.1 million of net proceeds from
the sale of M/T Wonder Bellatrix and M/T Wonder Polaris, partly
offset by payments of $37.8 million mainly related of the
acquisition of LPG Dream Terrax and LPG Dream Arrax and $3.4
million of advances for vessel acquisition of LPG Dream Syrax and
LPG Dream Vermax, and (iii) $9.5 million of net financing cash
flows provided, including $19.4 million cash inflow from the
subscription agreement with Pani Corp. for the issuance of
8,500,000 common shares, by cash payments of $2.7 million to
reimburse Spin-Off expenses incurred by Castor on our behalf, $7.3
million for scheduled principal repayments and early prepayment due
to sale of M/T Wonder Polaris on our debt, $0.1 million for the
payment of dividend on Preferred Series A shares for the period
from March 7, 2023 to April 14, 2023, and a net inflow for increase
in former parent company investment amounting to $0.2 million.
As of June 30, 2023, our total debt, gross of
unamortized deferred loan fees, was $5.9 million of which $1.3
million is repayable within one year, as compared to $13.3 million
of gross total debt as of December 31, 2022.
Recent
Business Developments
Commentary:
Toro’s investment in Castor through
purchase of 50,000 Series D Preferred shares
On August 7, 2023, the Company agreed to
purchase 50,000 Series D Preferred shares (“Pref D shares”) of
Castor of $1,000 each for a total consideration of $50 million in
cash. The distribution rate of the Pref D shares is 5%, paid
quarterly, and they are convertible to common shares of Castor from
the first anniversary of the issue date at the lower of (i) $0.70
and (ii) the 5 day value weighted average price immediately
preceding the conversion, subject to a minimum conversion price.
The distribution rate is set to increase by a factor of 1.3 times
per annum from year 7 with a maximum rate of 20%. This transaction
and its terms were approved by the independent members of the board
of directors of each of Castor and Toro at the recommendation of
their respective independent committees who negotiated the
transaction.
Vessels’ acquisitions
On April 26, 2023, the Company entered into an
agreement to purchase a 2020 Japanese-built 5,000 cbm LPG carrier,
the Dream Terrax, from an unaffiliated third party for a purchase
price of $19.9 million. The LPG Dream Terrax was delivered to the
Company on May 26, 2023.
On April 26, 2023, the Company entered into an
agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier,
the Dream Arrax, from an unaffiliated third party for a purchase
price of $17.0 million. The LPG Dream Arrax was delivered to the
Company on June 14, 2023.
On April 26, 2023, the Company entered into an
agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier,
the Dream Syrax, from an unaffiliated third party for a purchase
price of $17.0 million. The LPG Dream Syrax was delivered to the
Company on July 18, 2023.
On April 26, 2023, the Company entered into an
agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier,
the Dream Vermax, from an unaffiliated third party for a purchase
price of $17.0 million. The LPG Dream Vermax was delivered to the
Company on August 4, 2023.
Sale of vessels
On April 28, 2023, we entered into an agreement
with an unaffiliated third party for the sale of the M/T Wonder
Avior, at a price of $30.1 million. The vessel was delivered to its
new owner on July 17, 2023. We expect to record during the third
quarter of 2023 a net gain on the sale of the M/T Wonder Avior of
approximately $18.6 million, excluding any transaction related
costs.
On May 12, 2023, the Company entered into an
agreement with an unaffiliated third party for the sale of the M/T
Wonder Bellatrix for a gross sale price of $37.0 million. The
vessel was delivered to its new owners on June 22, 2023. In
connection with this sale, the Company recognized during the second
quarter of 2023 a net gain of $19.3 million.
On May 18, 2023, the Company entered into an
agreement with an unaffiliated third party for the sale of the M/T
Wonder Polaris for a gross sale price of $34.5 million. The vessel
was delivered to its new owners on June 26, 2023. In connection
with this sale, the Company recognized during the second quarter of
2023 a net gain of $21.3 million.
On June 15, 2023, we entered into an agreement
with an unaffiliated third party for the sale of the M/T Wonder
Musica, at a price of $28.0 million. The vessel was delivered to
its new owner on July 6, 2023. We expect to record during the third
quarter of 2023 a net gain on the sale of the M/T Wonder Musica of
approximately $17.1 million, excluding any transaction related
costs.
Fleet Employment Status (as of August 8,
2023) During the three months ended June 30, 2023, we
operated on average 8.5 vessels earning a Daily TCE Rate(1) of
$31,841 as compared to an average of 9.0 vessels earning a Daily
TCE Rate(1) of $18,422 during the same period in 2022. Our
employment profile as of August 8, 2023 is presented immediately
below.
(1) Daily TCE Rate is not a recognized measure
under U.S. GAAP. Please refer to Appendix B for the definition and
reconciliation of this measure to Total vessel revenues, the most
directly comparable financial measure calculated and presented in
accordance with U.S. GAAP.
|
Aframax / LR2 Tankers |
|
Vessel Name |
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Wonder Sirius |
Aframax / LR2 |
115,341 |
2005 |
Korea |
TC(1) period |
$40,000 per day |
Nov-23 |
Jun-24 |
|
Wonder Vega |
Aframax |
106,062 |
2005 |
Korea |
Tanker Pool(2) |
N/A |
N/A |
N/A |
|
|
|
Handysize Tankers |
|
Vessel Name |
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
Earliest |
Latest |
|
Wonder Mimosa |
Handysize |
36,718 |
2006 |
Korea |
Tanker Pool(3) |
N/A |
N/A |
N/A |
|
Wonder Formosa |
Handysize |
36,660 |
2006 |
Korea |
Tanker Pool(3) |
N/A |
N/A |
N/A |
|
|
|
|
|
|
|
|
|
|
|
LPG Carriers |
|
Vessel Name |
Type |
DWT |
Year Built |
Country of Construction |
Type of Employment |
Gross Charter Rate |
Estimated Redelivery Date |
|
|
|
|
|
|
|
|
|
Earliest |
Latest |
|
Dream Terrax |
LPG carrier 5,000 cbm |
4,743 |
2020 |
Japan |
TC(1),(4) period |
$310,000 per month |
Aug-24 |
Aug-25 |
|
Dream Arrax |
LPG carrier 5,000 cbm |
4,753 |
2015 |
Japan |
Voyage |
$235,000 lump sum |
11-Aug-23(5) |
N/A |
|
Dream Syrax |
LPG carrier 5,000 cbm |
5,158 |
2015 |
Japan |
TC(1) period |
$308,500 per month |
Feb-24 |
Feb-24 |
|
Dream Vermax |
LPG carrier 5,000 cbm |
5,155 |
2015 |
Japan |
TC(1) period |
$314,950 per month |
Mar-24 |
Mar-25 |
|
(1) |
|
TC stands for time charter. |
| (2) |
|
The vessel is currently participating in the V8 Plus Pool, a pool
operating Aframax tankers aged 15 years or more that is managed by
V8 Plus Management Pte. Ltd., a company in which our Chairman and
Chief Executive Officer, Petros Panagiotidis has a minority equity
interest. |
| (3) |
|
The vessel is currently participating in an unaffiliated tanker
pool specializing in the employment of Handysize tanker
vessels. |
| (4) |
|
The vessel has been fixed under a TC period contract of twelve
months at $310,000 per month plus twelve months at $320,000 per
month in Charterer’s option, with estimated delivery on about
August 13, 2023. |
| (5) |
|
Estimated completion date of voyage. |
| |
|
|
Financial Results Overview:
Set forth below are selected financial and
operational data of our fleet for each of the three and six months
ended June 30, 2023 and 2022, respectively:
| |
Three Months Ended |
|
|
Six Months Ended |
|
(Expressed in U.S. dollars) |
|
June 30, 2023(unaudited) |
|
June 30, 2022 (unaudited) |
|
|
June 30, 2023 (unaudited) |
|
June 30, 2022 (unaudited) |
| Total vessel revenues |
$ |
24,858,529 |
$ |
25,779,119 |
|
$ |
56,012,683 |
$ |
42,609,567 |
| Operating income |
$ |
55,066,352 |
$ |
5,967,234 |
|
$ |
77,111,010 |
$ |
7,535,711 |
| Net income and comprehensive
income |
$ |
55,381,774 |
$ |
5,424,002 |
|
$ |
77,340,987 |
$ |
6,657,133 |
| EBITDA (1) |
$ |
56,785,038 |
$ |
7,718,530 |
|
$ |
80,875,342 |
$ |
11,096,026 |
| Earnings (basic) per common
share |
$ |
3.34 |
$ |
0.57 |
|
$ |
5.13 |
$ |
0.70 |
| Earnings (diluted) per common
share |
$ |
0.92 |
$ |
0.10 |
|
$ |
1.28 |
$ |
0.12 |
| |
|
|
|
|
|
|
|
|
|
(1) EBITDA is not recognized measure under
U.S. GAAP. Please refer to Appendix B of this release for the
definition and reconciliation of this measure to Net income, the
most directly comparable financial measure calculated and presented
in accordance with U.S. GAAP.
Consolidated Fleet Selected Financial
and Operational Data:
Set forth below are selected financial and
operational data of our fleet for each of the three and six months
ended June 30, 2023 and 2022, respectively, that we believe are
useful in analyzing trends in our results of operations.
| |
|
Three Months EndedJune 30, |
|
|
Six Months EndedJune 30, |
|
(Expressed in U.S. dollars except for operational
data) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Ownership Days (1)(7) |
|
769 |
|
|
819 |
|
|
|
1,489 |
|
|
1,629 |
|
| Available Days (2)(7) |
|
758 |
|
|
779 |
|
|
|
1,435 |
|
|
1,589 |
|
| Operating Days (3)(7) |
|
746 |
|
|
779 |
|
|
|
1,419 |
|
|
1,582 |
|
| Daily TCE Rate (4) |
$ |
31,841 |
|
$ |
18,422 |
|
|
|
38,168 |
|
$ |
15,066 |
|
| Fleet Utilization (5) |
|
98 |
% |
|
100 |
% |
|
|
99 |
% |
|
100 |
% |
| Daily vessel operating
expenses (6) |
$ |
7,898 |
|
$ |
6,802 |
|
|
|
7,515 |
|
$ |
6,635 |
|
|
(1) |
|
Ownership Days are the total number of calendar days in a period
during which we owned a vessel. |
| (2) |
|
Available Days are the Ownership Days in a period less the
aggregate number of days our vessels are off-hire due to scheduled
repairs, dry-dockings or special or intermediate surveys. |
| (3) |
|
Operating Days are the Available Days in a period after subtracting
unscheduled off-hire and idle days. |
| (4) |
|
Daily TCE Rate is not a recognized measure under U.S. GAAP. Please
refer to Appendix B for the definition and reconciliation of this
measure to Total vessel revenues, the most directly comparable
financial measure calculated and presented in accordance with U.S.
GAAP. |
| (5) |
|
Fleet Utilization is calculated by dividing the Operating Days
during a period by the number of Available Days during that
period. |
| (6) |
|
Daily vessel operating expenses are calculated by dividing vessel
operating expenses for the relevant period by the Ownership Days
for such period. |
| (7) |
|
Our definitions of Ownership Days, Available Days, Operating Days,
Fleet Utilization may not be comparable to those reported by other
companies. |
| |
|
|
APPENDIX A
TORO CORP.
Unaudited Interim Condensed Consolidated
Statements of Comprehensive Income
(Expressed in U.S. Dollars—except for number of share
data)
| (In U.S. dollars except for
number of share data) |
|
Three Months EndedJune 30, |
|
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| REVENUES |
|
|
|
|
|
|
|
|
|
| Time charter revenues |
|
3,613,038 |
|
|
1,849,970 |
|
|
|
5,519,288 |
|
|
4,836,315 |
|
| Voyage charter revenues |
|
381,189 |
|
|
18,857,411 |
|
|
|
389,119 |
|
|
29,592,279 |
|
| Pool revenues |
|
20,864,302 |
|
|
5,071,738 |
|
|
|
50,104,276 |
|
|
8,180,973 |
|
| Total vessel
revenues |
$ |
24,858,529 |
|
$ |
25,779,119 |
|
|
$ |
56,012,683 |
|
$ |
42,609,567 |
|
| |
|
|
|
|
|
|
|
|
|
| EXPENSES |
|
|
|
|
|
|
|
|
|
| Voyage expenses (including
commissions to related party) |
|
(723,319 |
) |
|
(11,428,525 |
) |
|
|
(1,242,116 |
) |
|
(18,669,842 |
) |
| Vessel operating expenses |
|
(6,073,774 |
) |
|
(5,571,051 |
) |
|
|
(11,190,295 |
) |
|
(10,807,764 |
) |
| General and administrative
expenses (including related party fees) |
|
(858,322 |
) |
|
(353,712 |
) |
|
|
(1,841,586 |
) |
|
(640,156 |
) |
| Management fees - related
parties |
|
(955,500 |
) |
|
(696,150 |
) |
|
|
(1,657,500 |
) |
|
(1,384,650 |
) |
| Depreciation and
amortization |
|
(1,730,038 |
) |
|
(1,762,447 |
) |
|
|
(3,785,684 |
) |
|
(3,571,444 |
) |
| Recovery of provision for
doubtful accounts |
|
— |
|
|
— |
|
|
|
266,732 |
|
|
— |
|
| Gain on
sale of vessels |
|
40,548,776 |
|
|
— |
|
|
|
40,548,776 |
|
|
— |
|
|
Operating income |
$ |
55,066,352 |
|
$ |
5,967,234 |
|
|
$ |
77,111,010 |
|
$ |
7,535,711 |
|
| Interest and finance costs,
net (including related party interest costs) (1) |
|
424,198 |
|
|
(203,366 |
) |
|
|
541,954 |
|
|
(386,973 |
) |
| Other expenses, net |
|
(11,352 |
) |
|
(11,151 |
) |
|
|
(21,352 |
) |
|
(11,129 |
) |
| Income taxes |
|
(97,424 |
) |
|
(328,715 |
) |
|
|
(290,625 |
) |
|
(480,476 |
) |
|
Net income and comprehensive income, net of
taxes |
$ |
55,381,774 |
|
$ |
5,424,002 |
|
|
$ |
77,340,987 |
|
$ |
6,657,133 |
|
| Dividend on Series A Preferred
Shares |
|
(353,889 |
) |
|
— |
|
|
|
(451,111 |
) |
|
— |
|
| Deemed dividend on Series A
Preferred Shares |
|
(730,779 |
) |
|
— |
|
|
|
(931,034 |
) |
|
— |
|
|
Net income attributable to common
shareholders |
$ |
54,297,106 |
|
|
5,424,002 |
|
|
$ |
75,958,842 |
|
|
6,657,133 |
|
| Earnings per common
share, basic |
$ |
3.34 |
|
$ |
0.57 |
|
|
$ |
5.13 |
|
$ |
0.70 |
|
| Earnings per common
share, diluted |
|
0.92 |
|
|
0.10 |
|
|
|
1.28 |
|
|
0.12 |
|
| Weighted average number of
common shares outstanding, basic: |
|
16,279,690 |
|
|
9,461,009 |
|
|
|
14,810,147 |
|
|
9,461,009 |
|
| Weighted average number of
common shares outstanding, diluted: |
|
59,025,087 |
|
|
52,206,406 |
|
|
|
59,492,793 |
|
|
54,143,655 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
TORO CORP. Unaudited Condensed
Consolidated Balance
Sheets(Expressed in U.S. Dollars—except for number
of share data)
| |
|
June 30,2023 |
|
December 31,2022 |
| ASSETS |
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
127,889,058 |
$ |
41,779,594 |
|
| Due from related parties |
|
4,848,344 |
|
558,327 |
|
| Other current assets |
|
29,837,796 |
|
12,425,386 |
|
|
Total current assets |
|
162,575,198 |
|
54,763,307 |
|
| |
|
|
|
|
| NON-CURRENT
ASSETS: |
|
|
|
|
| Vessels, net |
|
77,783,068 |
|
92,486,178 |
|
| Advances for vessel
acquisition |
|
3,390,000 |
|
— |
|
| Restricted cash |
|
350,000 |
|
700,000 |
|
| Due from related parties |
|
1,126,542 |
|
1,708,474 |
|
| Other non-currents assets |
|
2,873,525 |
|
7,821,144 |
|
|
Total non-current assets |
|
85,523,135 |
|
102,715,796 |
|
|
Total assets |
|
248,098,333 |
|
157,479,103 |
|
| |
|
|
|
|
| LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
| Current portion of long-term
debt, net |
|
1,304,917 |
|
2,606,302 |
|
| Other current liabilities |
|
8,697,415 |
|
3,912,749 |
|
|
Total current liabilities |
|
10,002,332 |
|
6,519,051 |
|
| NON-CURRENT
LIABILITIES: |
|
|
|
|
| Long-term debt, net |
|
4,559,632 |
|
10,463,172 |
|
| Total non-current
liabilities |
|
4,559,632 |
|
10,463,172 |
|
|
Total liabilities |
|
14,561,964 |
|
16,982,223 |
|
| |
|
|
|
|
| MEZZANINE
EQUITY: |
|
|
|
|
| 1.00% Series A fixed rate cumulative perpetual convertible
preferred shares: 0 and 140,000 shares issued and outstanding as of
December 31, 2022, and June 30, 2023, respectively, aggregate
liquidation preference of $0 and $140,000,000 as of December 31,
2022 and June 30, 2023, respectively. |
|
118,103,169 |
|
— |
|
|
Total mezzanine equity |
|
118,103,169 |
|
— |
|
| |
|
|
|
|
| SHAREHOLDERS’
EQUITY: |
|
|
|
|
| Former Net Parent Company
investment |
|
— |
|
140,496,912 |
|
| Common shares, $0.001 par
value; 1,000 and 3,900,000,000 shares authorized; 1,000 and
17,961,009 shares issued; 1,000 and 17,961,009 shares outstanding
as of December 31, 2022, and June 30, 2023 respectively. |
|
17,961 |
|
— |
|
| Preferred shares, $0.001 par
value: 0 and 100,000,000 shares authorized; Series B preferred
shares: 0 and 40,000 shares issued and outstanding as of December
31,2022 and June 30, 2023 respectively. |
|
40 |
|
— |
|
| Additional paid-in
capital |
|
56,795,721 |
|
— |
|
| (Accumulated deficit)/
Retained Earnings |
|
58,619,478 |
|
(32 |
) |
|
Total shareholders’ equity |
|
115,433,200 |
|
140,496,880 |
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
$ |
248,098,333 |
$ |
157,479,103 |
|
TORO CORP.Unaudited
Interim Condensed Consolidated Statements of Cash
Flows
| (Expressed in U.S.
Dollars) |
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
| Cash Flows (used
in)/provided by Operating Activities : |
|
|
|
|
| Net income |
$ |
77,340,987 |
|
$ |
6,657,133 |
|
| Adjustments to
reconcile net income to net cash (used in)/provided by Operating
activities : |
|
|
|
|
| Depreciation and
amortization |
|
3,785,684 |
|
|
3,571,444 |
|
| Amortization of deferred
finance charges |
|
115,074 |
|
|
62,909 |
|
| Gain on sale of vessels |
|
(40,548,776 |
) |
|
— |
|
| Changes in operating
assets and liabilities: |
|
|
|
|
| Accounts receivable trade,
net |
|
5,817,705 |
|
|
(5,416,468 |
) |
| Inventories |
|
(66,884 |
) |
|
(2,924,444 |
) |
| Due from/to related
parties |
|
(4,035,130 |
) |
|
2,111,830 |
|
| Prepaid expenses and other
assets |
|
3,144,511 |
|
|
(1,264,091 |
) |
| Other deferred charges |
|
— |
|
|
(38,889 |
) |
| Accounts payable |
|
3,039,191 |
|
|
1,727,697 |
|
| Accrued liabilities |
|
751,189 |
|
|
550,692 |
|
| Deferred revenue |
|
440,425 |
|
|
(542,347 |
) |
| Dry-dock costs paid |
|
(1,447,121 |
) |
|
(503,755 |
) |
| Net Cash provided by
Operating Activities |
|
48,336,855 |
|
|
3,991,711 |
|
| |
|
|
|
|
| Cash flow (used
in)/provided by Investing Activities: |
|
|
|
|
| Vessel acquisitions and other
vessel improvements |
|
(37,778,507 |
) |
|
(479,188 |
) |
| Advances for vessel
acquisition |
|
(3,390,000 |
) |
|
— |
|
| Net Proceeds from sale of
vessel |
|
69,102,804 |
|
|
— |
|
| Net cash provided by/
(used in) Investing Activities |
|
27,934,297 |
|
|
(479,188 |
) |
| |
|
|
|
|
| Cash flows (used
in)/provided by Financing Activities: |
|
|
|
|
| Net increase/ (decrease) in
Former Parent Company Investment |
|
211,982 |
|
|
(1,994,004 |
) |
| Issuance of Series B preferred
shares |
|
40 |
|
|
— |
|
| Issuance of common shares
pursuant to private placement |
|
19,415,001 |
|
|
|
| Payment of Dividend Preferred
Shares A |
|
(151,667 |
) |
|
|
| Repayment of long-term
debt |
|
(7,320,000 |
) |
|
(1,700,000 |
) |
| Payments related to
Spin-Off |
|
(2,667,044 |
) |
|
— |
|
| Net cash
provided by/ (used in) Financing Activities |
|
9,488,312 |
|
|
(3,694,004 |
) |
| |
|
|
|
|
| Net
increase/(decrease) in cash, cash equivalents, and restricted
cash |
|
85,759,464 |
|
|
(181,481 |
) |
| Cash, cash equivalents
and restricted cash at the beginning of the period |
|
42,479,594 |
|
|
5,663,411 |
|
| Cash, cash equivalents
and restricted cash at the end of the period |
$ |
128,239,058 |
|
$ |
5,481,930 |
|
| |
|
|
|
|
|
|
(1) Includes interest and finance costs and
interest income, if any.
APPENDIX B
Non-GAAP Financial
Information
Daily Time Charter (“TCE”)
Rate. The Daily Time Charter Equivalent Rate (“Daily TCE
Rate”), is a measure of the average daily revenue performance of a
vessel. The Daily TCE Rate is not a measure of financial
performance under U.S. GAAP (i.e., it is a non-GAAP measure) and
should not be considered as an alternative to any measure of
financial performance presented in accordance with U.S. GAAP. We
calculate Daily TCE Rate by dividing total revenues (time charter
and/or voyage charter revenues, and/or pool revenues, net of
charterers’ commissions), less voyage expenses, by the number of
Available Days during that period. Under a time charter, the
charterer pays substantially all the vessel voyage related
expenses. However, we may incur voyage related expenses when
positioning or repositioning vessels before or after the period of
a time or other charter, during periods of commercial waiting time
or while off-hire during dry-docking or due to other unforeseen
circumstances. Under voyage charters, the majority of voyage
expenses are generally borne by us whereas for vessels in a pool,
such expenses are borne by the pool operator. The Daily TCE Rate is
a standard shipping industry performance measure used primarily to
compare period-to-period changes in a company’s performance and,
management believes that the Daily TCE Rate provides meaningful
information to our investors since it compares daily net earnings
generated by our vessels irrespective of the mix of charter types
(i.e., time charter, voyage charter or other) under which our
vessels are employed between the periods while it further assists
our management in making decisions regarding the deployment and use
of our vessels and in evaluating our financial performance. Our
calculation of the Daily TCE Rates may not be comparable to that
reported by other companies.
The following table reconciles the calculation
of the Daily TCE Rate for our fleet to Total vessel revenues, the
most directly comparable U.S. GAAP financial measure, for the
periods presented (amounts in U.S. dollars, except for Available
Days):
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(In U.S. dollars, except for Available Days) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Total vessel revenues |
$ |
24,858,529 |
|
$ |
25,779,119 |
|
|
$ |
56,012,683 |
|
$ |
42,609,567 |
|
| Voyage expenses -including
commissions from related party |
|
(723,319 |
) |
|
(11,428,525 |
) |
|
|
(1,242,116 |
) |
|
(18,669,842 |
) |
|
TCE revenues |
$ |
24,135,210 |
|
$ |
14,350,594 |
|
|
$ |
54,770,567 |
|
$ |
23,939,725 |
|
| Available Days |
|
758 |
|
|
779 |
|
|
|
1,435 |
|
|
1,589 |
|
|
Daily TCE Rate |
$ |
31,841 |
|
$ |
18,422 |
|
|
$ |
38,168 |
|
$ |
15,066 |
|
EBITDA. EBITDA is not a measure
of financial performance under U.S. GAAP, does not represent and
should not be considered as an alternative to net income, operating
income, cash flow from operating activities or any other measure of
financial performance presented in accordance with U.S. GAAP. We
define EBITDA as earnings before interest and finance costs (if
any), net of interest income, taxes (when incurred), depreciation
and amortization of deferred dry-docking costs. EBITDA is used as a
supplemental financial measure by management and external users of
financial statements to assess our operating performance. We
believe that EBITDA assists our management by providing useful
information that increases the comparability of our operating
performance from period to period and against the operating
performance of other companies in our industry that provide EBITDA
information. This increased comparability is achieved by excluding
the potentially disparate effects between periods or companies of
interest, other financial items, depreciation and amortization and
taxes, which items are affected by various and possibly changing
financing methods, capital structure and historical cost basis and
which items may significantly affect net income between periods. We
believe that including EBITDA as a measure of operating performance
benefits investors in (a) selecting between investing in us and
other investment alternatives and (b) monitoring our ongoing
financial and operational strength. EBITDA as presented below may
not be comparable to similarly titled measures of other companies.
The following table reconciles EBITDA to Net Income, the most
directly comparable U.S. GAAP financial measure, for the periods
presented:
Reconciliation of EBITDA to Net
Income
| |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(In U.S. dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Net
Income |
$ |
55,381,774 |
|
$ |
5,424,002 |
|
$ |
77,340,987 |
|
$ |
6,657,133 |
| Depreciation and
amortization |
|
1,730,038 |
|
|
1,762,447 |
|
|
3,785,684 |
|
|
3,571,444 |
| Interest and finance costs,
net (1) |
|
(424,198 |
) |
|
203,366 |
|
|
(541,954 |
) |
|
386,973 |
| US source income taxes |
|
97,424 |
|
|
328,715 |
|
|
290,625 |
|
|
480,476 |
|
EBITDA |
$ |
56,785,038 |
|
$ |
7,718,530 |
|
$ |
80,875,342 |
|
$ |
11,096,026 |
|
|
(1) Includes interest and finance costs and
interest income, if any.
Cautionary Statement Regarding Forward-Looking
Statements
Matters discussed in this press release may
constitute forward-looking statements. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”)
and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or
performance (including the expected deliveries of vessels to or
from us), and underlying assumptions and other statements, which
are other than statements of historical facts. We are including
this cautionary statement in connection with this safe harbor
legislation. The words “believe”, “anticipate”, “intend”,
“estimate”, “forecast”, “project”, “plan”, “potential”, “will”,
“may”, “should”, “expect”, “pending” and similar expressions
identify forward-looking statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, our management’s examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe 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, we
cannot assure you that we will achieve or accomplish these
forward-looking statements, including these expectations, beliefs
or projections. In addition to these important factors, other
important factors that, in our view, could cause actual results to
differ materially from those discussed in the forward‐looking
statements include our ability to realize the expected benefits of
vessel acquisitions and the effect of any change in our fleet’s
size, the effects of the Spin-Off, our business strategy, shipping
markets conditions and trends, our relationships with our current
and future service providers and customers, our ability to borrow
under existing or future debt agreements or to refinance our debt
on favorable terms and our ability to comply with the covenants
contained therein, our continued ability to enter into time
charters, voyage charters or pool arrangements with existing and
new customers and pool operators and to re-charter our vessels upon
the expiry of the existing charters, changes in our operating and
capitalized expenses, our ability to fund future capital
expenditures and investments in the acquisition and refurbishment
of our vessels, instances of off-hire, future sales of our
securities in the public market and our ability to maintain
compliance with applicable listing standards, volatility in our
share price, potential conflicts of interest involving members of
our board of directors, senior management and certain of our
service providers that are related parties, general domestic and
international political conditions or events (including “trade
wars”, global public health threats and major outbreaks of
disease), changes in seaborne and other transportation, changes in
governmental rules and regulations or actions taken by regulatory
authorities, the impact of adverse weather and natural disasters,
accidents or the occurrence of other events related to the
operational risks associated with transporting crude oil and/or
refined petroleum products and any other factors described in our
filings with the SEC.
The information set forth herein speaks only as
of the date hereof, and we disclaim any intention or obligation to
update any forward‐looking statements as a result of developments
occurring after the date of this communication, except to the
extent required by applicable law. New factors emerge from time to
time, and it is not possible for us to predict all or any of these
factors. Further, we cannot assess the impact of each such factor
on our business or the extent to which any factor, or combination
of factors, may cause actual results to be materially different
from those contained in any forward-looking statement. Please see
our filings with the SEC for a more complete discussion of these
foregoing and other risks and uncertainties. These factors and the
other risk factors described in this press release are not
necessarily all of the important factors that could cause actual
results or developments to differ materially from those expressed
in any of our forward-looking statements. Given these
uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements.
CONTACT DETAILS For further
information please contact:
Petros PanagiotidisToro Corp.Email:
info@torocorp.com
Toro (NASDAQ:TORO)
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