UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 2018 (February 13, 2018)
Eagle Bulk Shipping Inc. |
(Exact name of registrant as specified in its charter) |
Republic of the Marshall Islands | 001-33831 | 98-0453513 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS employer identification no.) |
300 First Stamford Place, 5th Floor Stamford, CT 06902 | ||
(Address of principal executive offices, including zip code) | ||
(Registrant's telephone number, including area code): (203) 276-8100
(Former Name or Former Address, if Changed Since Last Report): None
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[_] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[_] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[_] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[_] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01. Regulation FD Disclosure.
On February 13, 2018, Eagle Bulk Shipping, Inc. will present at the Stifel 2018 Transportation & Logistics Conference. A copy of the materials to be presented at the conference is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |
99.1 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EAGLE BULK SHIPPING INC. | ||
(registrant) | ||
Dated: February 13, 2018 | By: | /s/ Frank De Costanzo |
Name: | Frank De Costanzo | |
Title: | Chief Financial Officer | |
Investor Presentation
Stifel 2018 Transportation & Logistics Conference
February 13, 2018
2
Disclaimer
This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation
Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words
such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the
timing or nature of future operating or financial performance or other events. Forward-looking statements reflect management’s current
expectations and observations with respect to future events and financial performance. Where we express an expectation or belief as to future
events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking
statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed,
projected, or implied by those forward-looking statements.
The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, examination of historical operating trends, data contained in our records and other data available from
third parties. Although Eagle Bulk Shipping Inc. 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, Eagle Bulk
Shipping Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
The principal factors that affect our financial position, results of operations and cash flows include, charter market rates, which have declined
significantly from historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars,
depreciation expenses, which are a function of the cost of our vessels, significant vessel improvement costs and our vessels’ estimated useful
lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward- looking
statements as a result of certain factors which could include the following: (i) changes in demand in the dry bulk market, including, without
limitation, changes in production of, or demand for, commodities and bulk cargoes, generally or in particular regions; (ii) greater than anticipated
levels of dry bulk vessel new building orders or lower than anticipated rates of dry bulk vessel scrapping; (iii) changes in rules and regulations
applicable to the dry bulk industry, including, without limitation, legislation adopted by international bodies or organizations such as the
International Maritime Organization and the European Union or by individual countries; (iv) actions taken by regulatory authorities; (v) changes in
trading patterns significantly impacting overall dry bulk tonnage requirements; (vi) changes in the typical seasonal variations in dry bulk charter
rates; (vii) changes in the cost of other modes of bulk commodity transportation; (viii) changes in general domestic and international political
conditions; (ix) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among
other things, our anticipated drydocking costs); (x) the outcome of legal proceedings in which we are involved; and (xi) and other factors listed from
time to time in our filings with the SEC.
We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or
otherwise, except as may be required under applicable security laws.
3
Agenda
1 Introduction
2 Company
3 Financial
4 Summary
5 Appendix
Introduction
5
Eagle Bulk Company Snapshot
Stamford
Ticker
EGLE
(NASDAQ)
Business
Model
Shipowner-
Operator
Sector Drybulk
Segment
Supramax /
Ultramax
Vessels* 47
DWT 2.7 million
Headquarters Stamford
Commercial
Management
In-house
Technical
Management
In-house
Corporate
Governance
Ind. Board /
No related party
Hamburg
Singapore
Global Market Coverage
The leading listed Supramax/Ultramax owner-operator
Vessel count excludes the AVOCET which has been sold but not yet delivered to her new owners
6
Experienced and Seasoned Leadership Team
Gary Vogel | Chief Executive Officer
30+ years experience in drybulk | former CEO of Clipper Group |
Managing Director of Van Ommeren Bulk Shipping
Frank De Costanzo | Chief Financial Officer
31+ years experience in finance/banking | former CFO at Catalyst Paper |
Global Treasurer at Kinross Gold
Bo Westergaard Jensen | Chief Commercial Officer
26+ years experience in drybulk | former Co-head of Chartering at Clipper
Group | Chartering and Operations at J. Lauritzen
Archie Morgan | VP, Head of Technical Management
30+ years experience in ship management / former Global Technical
Manager at Tidewater / Operations at Alliance Marine Services / Fleet
Manager at American Ship Mgmt. / Chief Engineer at Denholm Ship
Mgmt.
Michael Mitchell | General Counsel
28+ years experience in shipping/law | former General Counsel at The
American Club | Partner at Holland & Knight | Head of Operations at
Principal Maritime
Costa Tsoutsoplides, CFA | Director of Strategy + BD
16+ years experience in shipping/finance/banking | former Analyst at
Aegean | VP at Citigroup (Foreign Exchange and High Yield)
Paul M. Leand, Jr. | Chairman
Chief Executive Officer of AMA Capital Partners | Director of Seadrill |
Director of Frontline 2012 | Director of Golar LNG
Randee Day | Director
30+ years experience in shipping | President and CEO of Day & Partners
| Director of International Seaways | former CEO of DHT Maritime | former
Division Head of JP Morgan’s Shipping Group
Justin A. Knowles | Director
Founder of Dean Marine Advisers Ltd. | former finance at Bank of
Scotland
Bart Veldhuizen | Director
25+ years experience in shipping/banking | Member of the Board of
Managing Directors at DVB | former MD & Head of Shipping at Lloyds
Banking Group
Gary Weston | Director
Former Chairman and CEO of C Transport Maritime S.A.M (CTM) |
former CEO of Clarksons PLC | former CEO of Carras
Gary Vogel | Chief Executive Officer | Director
Senior Management Board of Directors
VESSEL
Asset Class
Handysize /
Handymax
Supramax /
Ultramax
Panamax /
Kamsarmax
Capesize
Size (DWT) 10-50k 50-65k 65-100k >100k
MAJOR
BULK
Iron Ore
Coal
Grain
MINOR
BULK
Bauxite
Steel
Scrap
Cement
Salt
Forest Products
Potash / Fertilizer
Coke
Nickel Ore
Sugar
Other
7
Drybulk Vessel Segment Classification
Eagle’s Focus
Eagle operates in the most versatile asset class
Supramax/Ultramax
vessels are able to carry
all drybulk commodities
due to their optimal
size and ability to
load/discharge cargo
using onboard gear
DWT= deadweight tons
8
Dominant Player in Supramax/Ultramax Segment
Source(s): VesselsValue
Peer Group Fleet Profiles
47
37
26
20
12
3 2
Eagle Bulk Scorpio Genco Star Bulk Navios MH Navios MP Golden Ocean Diana Safe Bulkers
Supramax / Ultramax Handysize Panamax Capesize
Eagle is uniquely focused on
the most versatile asset class
9
Source(s): Clarksons
BSI is based on the derived Average of the 6 T/C Routes for the Baltic Supramax Index
Baltic Supramax Index (BSI)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18
Global (BSI) Period Average
Rates Have Increased Fourfold Since 2016
Although the BSI has posted a
strong recovery since 2016, we
believe there is further upside to
rates as supply/demand
fundamentals continue to improve
-40
-20
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f
Deliveries Scrapping Net Supply (DWT)
10
Source(s): Clarksons
2019f Scrapping as per Clarksons 2018 forecast
Supply Fundamentals Best in Years
New Vessel Deliveries + Old Vessel Scrapping (DWT)
Drybulk Orderbook (as a % of
the on-the-water fleet) stands
at just 10%, a 15yr low
Supramax/Ultramax
Orderbook stands at just 6%
2018 forecasted
net fleet growth
of 1.5%
-
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2003 2005 2007 2009 2011 2013 2015 2017
Drybulk Trade / Global GDP Ratio (RHS) Global GDP Y/Y % (LHS)
Drybulk Trade Y/Y % (LHS) DT/GDP Ratio Historical Average (RHS)
11
Source(s): Clarksons, IMF
Drybulk Trade / Global GDP Ratio for 2009 extracted from Historical Average calculation
Demand Fundamentals are Strong
Drybulk trade grew by 4% in 2017,
surpassing Global GDP and is
reverting to historical correlation
Drybulk Trade Growth vs. Global GDP Growth
Company
13
“New” Eagle Milestones
Appointed Gary Vogel as CEO
Executed comprehensive balance
sheet recapitalization providing
USD 105m of incremental liquidity
Recruited Frank De Costanzo as new CFO
Acquired 9 CROWN-63 Ultramax vessels
(built 2012-2015) from Greenship Bulk for
USD 153m enbloc , or USD 17m per vessel
Closed on new USD 61.2m 5-yr credit facility
financing 40% of the purchase price on
Greenship Bulk 9-Ultramax fleet acquisition
Refinanced USD 270m in debt extending all
debt maturities to 2022: issued 5-yr USD 200m
Bond, executed a new 5-yr USD 65m Credit
Facility, and arranged for a new USD 15m RCF
Raised USD 88m in new growth equity
Raised USD 100m in
additional growth equity
Recruited new Chief Commercial Officer
and new Head of Technical Management
Purchased 2016
NACKS-61 Ultramax
for USD 18.9m
Purchased 2017 SDARI-64 (resale)
Ultramax for USD 17.9m
Recruited new
General Counsel
Sold 4 vessels during 2016 (averaging 15-yrs in age
and 50k DWT) improving the overall fleet makeup
Sold 5 vessels during 2017 (averaging 11-yrs in age
and 52k DWT) improving the overall fleet makeup
Relocated headquarters
to Stamford, Connecticut
Recruited new
Head of Operations
Opened new European
Commercial office based
in Hamburg, Germany
Purchased 2015 CROWN-63
Ultramax for USD 21.3m
Arranged for 40% financing on the
2015 CROWN-63 Ultramax acquired
2017 2016 2H15
-
11
13
-
6
5
11
1
-
-
-
-
-
4
1
4
-
5
10
15
20
<5 5-7.5 7.5-10 10-12.5 12.5-15 >15
Existing Fleet Vessels Bought Vessels Sold
14
Actively Renewing/Growing the Fleet
Source(s): VesselsValue
Fleet renewal/growth strategy has:
Increased average ship size
Decreased fleet age
Improved fleet efficiency
Vessels by Age Grouping
Hedging (FFAs)
Asymmetric
Optionality
Vessel + Cargo
Arbitrage
Timecharter-in
Voyage Chartering
Timecharter-out
--
--
--
ou
tpe
rf
o
rm
a
nc
e
--
->
>
>
------Owner-Operator Spectrum--->>>
15
Creating Value Through Active Management
Eagle’s sophisticated in-house
commercial platform has a
proven track record
16
92
109
151
200
394
749
514
744
1046
0
100
200
300
400
500
600
700
800
900
1000
1100
3q15 4q15 1q16 2q16 3q16 4q16 1q17 2q17 3q17
Chartered-in Fleet - Days
Third-party Timecharter-in Business
Eagle charters-in third party vessels in
order to cover cargo commitments, profit
from vessel-positioning arbitrage
opportunities, and increase overall
market coverage
Optimizing Platform Through Scale and Arbitrage
Financial
18
Eagle TCE vs. Adj. Net BSI
$(14.5)
$(6.7)
$(3.4)
$(2.0)
$4.6
$9.3
$8.4
$(17.5)
$(15.0)
$(12.5)
$(10.0)
$(7.5)
$(5.0)
$(2.5)
$-
$2.5
$5.0
$7.5
$10.0
1q16 2q16 3q16 4q16 1q17 2q17 3q17
Adj. EBITDA* (in millions)
Adj. EBITDA
increasing by over
$90 million on an
annualized basis-
1q16 vs. 3q17
TCE performance is compared against Adj. net BSI which equals net BSI adjusted for the profile of owned fleet in terms of design. 4q17 TCE is as of November 3, 2017 and 1q18 TCE is as
of February 9, 2018. 1q18 BSI is basis January actual and February-March FFA. TCE is a non-GAAP financial measure. Please refer to Appendix for the reconciliation of revenues to TCE
Adj. EBITDA= EBITDA adjusted to exclude certain non-cash, one-time, and other items (such as vessel impairment, gain / loss on sale of vessels, refinancing expenses, non-cash comp,
and amortization of TC acquired) that Eagle believes are not indicative core operations.
$2,938
$4,422
$5,669
$6,050
$7,881
$9,146
$8,660
$10,176
$11,020
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
1q16 2q16 3q16 4q16 1q17 2q17 3q17 4q17 1q18
Adj. BSI TCE
1q18 TCE of $11.0k with ~73% days fixed
4q17 TCE of $10.2k with ~64% days fixed
9m17 TCE of $8.2k, equating to an outperformance
of +10%, or ~$825 per vessel per day> +$14 million
in annual incremental cash flow
Active Management Leads to TCE Outperformance
-$19.5 -$13.2 -$7.5 -$5.3
-$2.0
-$3.8
$7.3
-$23.9
-$10.1
-$7.5
-$4.5
$2.1
$4.9
$2.7
1q16 2q16 3q16 4q16 1q17 2q17 3q17
Cash flow from operations
ex Changes in operating assets and liabilities
19
Cash Flow Development
Cash Flow from Operations ($ millions)
20
Refinancing Extended Tenor and Decreased Cost
Issuance of New Securities/Debt
7.57% (0.68)%
6.89%
Issued USD 200m Bond
Interest rate 8.25%
Maturity Nov 2022
Collateral 28 vessels
Amortization USD 8m/yr starting 11/2018
Executed USD 65m Credit Facility
Interest rate LIBOR + 350bps
Maturity Dec 2022
Collateral 9 vessels
Amortization USD 8.6m/yr starting 1/2019
Executed USD 15m Revolving Credit Facility
Interest rate LIBOR + 200bps
Maturity Nov 2022
Collateral 28 vessels
Amortization N/A
Repaid USD 75m 2nd Lien Facility
Interest rate LIBOR + 14% (PIK)
Maturity 1/2020
Collateral 37 vessels
Amortization Balloon
Repaid USD 195m 1st Lien Facility
Interest rate LIBOR + 400bps
Maturity 10/2019
Collateral 37 vessels
Amortization USD 15.6m/yr starting 1/2019
Transaction benefits included:
Removal of PIK note bearing a cost of ~15%
Reducing annual interest expense by ~USD 3.0 million
Extending tenor on all Company debt by 3 years to 2022
Eliminating exposure to rising interest rates on ~60% of Company’s debt
Maintaining ring-fenced structure with no recourse to the Parent
Supporting the ability to the pay dividends
Repayments of Old Securities/Debt
USD 65m Secured Credit Facility includes USD 5m RCF which is drawn as of December 8th
USD 15m RCF is undrawn as of December 8th
21
Debt Maturities Extended to 2022
7.57%
$0
$50
$100
$150
$200
$250
2018 2019 2020 2021 2022
Pre-refinancing Profile Post-refinancing Profile
Repayment Schedule Profile
22
Low All-in Cash Breakeven
NOTES:
Vessel OPEX and G&A are basis 9m17 actual
Drydocking, Interest and Principal are basis 2018-estimated on 47 owned-vessels
Eleven vessels are scheduled to be drydocked during 2018
Principal repayments increase in 2019
Cash Breakeven per Vessel per Day
$98,597
$144,968
$173,932
$186,423
$212,071
$227,701
$355,068
-$42,245
$4,126
$33,090
$45,581
$71,229
$86,859
$214,226
$5.8
$8.6
$10.3
$11.0
$12.6
$13.5
$21.0
-$50,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2016 2017 2018f 10yr average Avg. Since BSI
inception
2011 2010
Revenue (RHS) NCF (RHS) BSI (LHS)
23
Significant Operational Leverage
For Illustrative Purposes Only
Revenue + Net Cash Flow (NCF) Generation in Different Rate Environments
2016a/2017a//2011a/2010a are basis actual BSI for the period, net of commission and adjusted for the current Eagle fleet prof ile in terms of design
10yr and 13yr averages are basis actual BSI for the respective periods excluding 2008-2009, net of commission and adjusted for the current Eagle fleet profile in terms of design
2018e is basis January actual and FFA for the remainder of the year, net of commission and adjusted for the current Eagle fleet profile in terms of design
Net Cash Flow is calculated basis Eagle’s 2018f cash breakeven rate
With 47-owned vessels trading primarily spot, Eagle has
significant operational leverage
Every $1,000 increase in rates, equates to ~$17 million
in incremental cash flow, or $0.24 per share
Summary
25
Eagle: Uniquely Positioned to Capitalize on Market
Vessel Segment: SUPRAMAX / ULTRAMAX
Superior performance and results
Business Model: OWNER-OPERATOR + INHOUSE MGMT.
Operating Scale: 47 SHIPS OWNED + TC-in FLEET
Balance Sheet: WELL-CAPITALIZED
Corporate Governance: INDEPENDENT BOARD*
Management Team: PROVEN TRACK RECORD
*Except for CEO
www.eagleships.com
Appendix- Company
Eagle Bulk Mgmt. LLC
(EBM)
28
Flexible Corporate Structure
Eagle Bulk Shipping Inc.
(Parent | NASDAQ: EGLE)
Eagle Bulk Shipco LLC
(EBSC)
28 vessels
Eagle Shipping LLC
(ES)
Eagle Bulk Ultraco LLC
(EBUC)
Eagle Bulk Holdco LLC
(EBHC)
9 vessels 10 vessels
USD 200m Bond
USD 15m RCF
USD 65m Credit Facility USD 69.8m Term Loan
All management services (strategic / commercial / operational / technical / administrative)
are performed inhouse by EBM, a wholly-owned subsidiary of the Parent
100% 100% 100% 100%
100%
Debt is non-recourse to the parent and ringfenced in subsidiaries
EBHC holds the AVOCET which has been sold and is expected to be delivered to her new owners during Q1 2018
29
Eagle Bulk Fleet
VESSEL COUNT 47 DWT 2.7 million AGE 8.2 years
The leading listed Supramax/Ultramax owner-operator
Fleet list excludes the AVOCET which has been sold but not yet delivered to her new owners
30
2017 Cargo Mix
Cement, 8%
Coal , 21%
Fertilizer, 5%
Forest Product,
2%
Grain, 22%
Metals &
Minerals, 21%
Other, 4%
Petcoke, 7%
Steel Products,
10%
Appendix- Financial
32
Main Terms Summary on Company Debt
CLOSED November 2017 December 2017 June 2017
PARENT Eagle Bulk Shipping Inc.
ISSUER Eagle Bulk Shipco LLC Eagle Shipping LLC Eagle Bulk Ultraco LLC
LOAN TYPE Bond RCF Credit Facility Term Loan
AMOUNT USD 200m USD 15m USD 65m USD 69.8m
OUTSTANDING USD 200m - USD 65m USD 69.8m
SECURITY Senior Secured Super Senior Secured Secured Secured
COLLATERAL 28 vessels 9 vessels 10 vessels
FLEET AVG. AGE 9.8yrs 7.5yrs 4.4yrs
LTV (GROSS) 59% 53% 37%
INTEREST RATE 8.25% (coupon) L+200bps L+350bps L+295bps
MATURITY November 2022 November 2022 December 2022 September 2022
AMORTIZATION
USD 8m/year
starting 11/2018
N/A
USD 8.6m/year
starting 1/2019
USD 7.2m/year
starting 1/2019
NOTES:
Outstanding amounts are as of January 2018
LTV= [total drawn debt] / [fleet value basis VesselsValue as of 12/2017]
USD 65 million Secured Credit Facility includes USD 5 million RCF
33
Refinancing Transaction Overview
USD 65m Secured Credit Facility includes USD 5m RCF which is drawn as of December 8th /USD 15m RCF is undrawn as of December 8th
Annualized Interest Cost basis calculated/estimated amount and is illustrative…this does not include amortization of deferred financing costs
Fleet does not reflect the purchase, or related debt, of New London Eagle
Pre/Post-Deal Capital Structure
7.57%
34
Earnings
$ Thousands except EPS 3q17 2q17 3q16 3q17 YTD 3q16 YTD
REVENUES, net of commissions 62,711 53,631 35,788 162,197 82,657
EXPENSES
Voyage expenses 17,463 13,380 11,208 44,196 27,902
Vessel expenses 20,110 19,309 17,708 57,374 56,783
Charter hire expenses 9,652 6,445 3,822 19,971 6,979
Depreciation and amortization 8,981 8,021 9,854 24,494 28,905
General and administrative expenses 8,621 8,590 5,224 24,990 15,430
Refinancing charges - - (5) - 5,869
Vessel Impairment - - - - 6,167
(Gain) / Loss on sale of vessels (202) (1,806) (299) (2,100) 102
Total operating expenses 64,625 53,939 47,512 168,925 148,137
OPERATING LOSS (1,914) (308) (11,724) (6,728) (65,480)
OTHER EXPENSES
Interest expense (cash), net 3,265 2,574 6,855 8,314 12,140
Non Cash Interest Expense 4,429 4,099 491 12,308 2,923
Other (Income)/Expense 647 (1,093) 289 (139) 590
Total other expense, net 8,341 5,580 7,635 20,483 15,653
Net Loss (10,255) (5,888) (19,359) (27,211) (81,133)
Weighted average shares outstanding 70,329,252 70,329,050 29,607,639 68,782,517 11,318,249
EPS (Basic and Diluted) (0.15) (0.08) (0.65) (0.40) (7.17)
Adjusted EBITDA 8,397 9,307 (3,398) 22,257 (24,550)
Adjusted EBITDA represents EBITDA adjusted to exclude the items which represent certain non-cash, one-time and other items such as
vessel impairment, gain / loss on sale of vessels, refinancing expenses, non-cash compensation expenses and amortization of fair value
below contract value of time charter acquired that the Company believes are not indicative of the ongoing performance of its core operations.
35
EBITDA
$ Thousands 3q17 2q17 3q16 3q17 YTD 3q16 YTD
Net loss (10,255)$ (5,888)$ (19,359)$ (27,212)$ (81,133)$
Less adjustments to reconcile:
Interest expense 7,837 6,859 7,434 21,141 15,155
Interest income (143) (186) (88) (518) (92)
EBIT (2,561) 785 (12,013) (6,589) (66,071)
Depreciation and amortization 8,981 8,021 9,854 24,494 28,905
EBITDA 6,420 8,806 (2,159) 17,905 (37,166)
Less adjustments to reconcile:
One-time and non-cash adjustments* 1,977 501 (1,239) 4,352 12,616
Adjusted EBITDA 8,397$ 9,307$ (3,398)$ 22,257$ (24,550)$
Adjusted EBITDA represents EBITDA adjusted to exclude the items which represent certain non-cash, one-time and other items such as
vessel impairment, gain / loss on sale of vessels, refinancing expenses, non-cash compensation expenses and amortization of fair value
below contract value of time charter acquired that the Company believes are not indicative of the ongoing performance of its core operations.
36
TCE Reconciliation Calculation
Owned available days is the number of our ownership days less the aggregate number of days that our vessels are off-hire due to
vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys.
$ Thousands except TCE and days 1q16 2q16 3q16 4q16 1q17 2q17 3q17
Revenues, net 21,278 25,590 35,788 41,836 45,855 53,631 62,711
Less:
Voyage expenses (9,244) (7,450) (11,208) (14,192) (13,353) (13,380) (17,463)
Charter hire expenses (1,489) (1,668) (3,822) (5,866) (3,873) (6,446) (9,652)
Reversal of one legacy time charter 1,045 783 670 432 (97) 594 329
Realized gain/loss on FFAs and bunker swaps - - (451) (111) - 91 248
TCE revenue 11,590 17,255 20,977 22,099 28,531 34,491 36,173
Owned available days * 3,945 3,902 3,700 3,653 3,620 3,771 4,177
TCE 2,938 4,422 5,669 6,050 7,881 9,146 8,660
37
OPEX per Vessel per Day
Full Year (“FY”) and Nine-month (“(9M”) figures exclude Extraordinary items
2017 data excludes the three DIAMOND-53 vessels sold- Avocet, Woodstar, and Wren
Focused on Cost and Improved Fleet Condition
$5,239
$4,804
$4,726 $4,696
$4,458
$63
$67 $153
$103
$4,000
$4,100
$4,200
$4,300
$4,400
$4,500
$4,600
$4,700
$4,800
$4,900
$5,000
$5,100
$5,200
$5,300
2015 2016 1q17 2q17 3q17
Recurring Extraordinary
9m17* Recurring
OPEX at $4,608
38
Definitions
Adjusted EBITDA
Adjusted EBITDA is a non GAAP financial measure that is used as a supplemental financial measure by our management and
by external users of our financial statements, such as investors, commercial banks and others, to assess our operating
performance as compared to that of other companies in our industry, without regard to financing methods, capital structure or
historical costs basis. Our Adjusted EBITDA should not be considered an alternative to net income (loss), operating income
(loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented
in accordance with U.S. GAAP. Our Adjusted EBITDA may not be comparable to similarly titled measures of another company
because all companies may not calculate Adjusted EBITDA in the same manner. Adjusted EBITDA represents EBITDA
adjusted to exclude the items which represent certain non-cash, one-time and other items such as vessel impairment, gain /
loss on sale of vessels, refinancing expenses and non-cash compensation expenses that the Company believes are not
indicative of the ongoing performance of its core operations.
TCE
Time charter equivalent ( the "TCE") is a non-GAAP financial measure that is commonly used in shipping industry primarily to
compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters,
because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire
rates for vessels on time charters generally are expressed in such amounts. The Company defines TCE as shipping revenues
less voyage expenses and charter hire expenses, adjusted for the impact of one legacy time charter and gains on FFAs and
bunker swaps, divided by the number of owned available days. TCE provides additional meaningful information in conjunction
with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making
decisions regarding the deployment and use of its vessels and in evaluating their financial performance. The Company's
calculation of TCE may not be comparable to that reported by other companies.
Owned available days is the number of our ownership days less the aggregate number of days that our vessels are off-hire
due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys. The shipping industry uses
available days to measure the number of days in a period during which vessels should be capable of generating revenues.
Appendix- Industry
10
15
20
25
30
35
40
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
60
65
70
75
80
85
90
95
100
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
40
45
50
55
60
65
70
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
40
Trade figures in million MTs / 2018 data is forecasted
Source(s): Bloomberg, Clarksons
Soybean Trade Expected to Grow by 5.2% in 2018
Argentina Course Grain Exports
Chinese Soybean Imports Russian Grain Exports
Processed soybeans are typically
used for animal feed and in
food production
Brazilian Soybean Exports
Brazilian exports represents
~40% of global exports
Record crop boosting wheat
exports, increasing Russia’s
global market share
15
20
25
30
35
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
Argentinian exports expected
to grow by 18% Y/Y
60
65
70
75
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
70
75
80
85
90
95
100
105
110
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
41
Trade figures in million MTs /2018 data is forecasted
Source(s): Bloomberg, Clarksons
Minor Bulks Represent ~38% of Drybulk Trade
Salt Trade Cement Trade
Petcoke can be used as a substitute
for coal in power generation
Bauxite Trade Petcoke Trade
100
105
110
115
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
42
44
46
48
50
52
54
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Actual Period Average
Trade expected to grow by 4% Y/Y
Chile is a major exporter of salt
Bauxite trade expected to
increase by 10% Y/Y
Cement trade is directly correlated
with infrastructure and
construction developments
5
10
15
20
25
30
35
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
Actual Period Average
50
60
70
80
90
100
110
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Actual Period Average
China has continued to import higher
quality iron ore per environmental
regulations
500
700
900
1,100
1,300
1,500
Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18
Actual Period Average
270
280
290
300
310
320
330
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
Actual Period Average
42
Iron Ore Imports
Coastal Bulk Freight Index
Trade figures in million MTs
Source(s): Bloomberg, Clarksons
China Expected to Grow by 6.6% in 2018
Coal Imports
Imports driven by increased
construction and infrastructure
Monthly imports hovering around
their 5-yr average
Rates trading above 5yr average
Minor Bulk Imports
Increase in imports driven by higher
demand of bauxite, manganese ore,
and forest products
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