BOX SHIPS INC ATHENS, Greece, Sept. 2, 2014 /PRNewswire/ -- Box Ships Inc. (NYSE: TEU) (the "Company"), a global shipping company specializing in the seaborne transportation of containers, announced today its results for the second quarter and six months ended June 30, 2014.
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
Financial Highlights 2013 2014 2013 2014
(Expressed in thousands of
U.S. Dollars, except per
share data)
--------------------------
Time charter revenues $17,707 $12,878 $35,797 $27,381
Amortization of above/
below market time
charters 1,313 1,501 2,612 2,442
---------------------- ----- ----- ----- -----
Time charter revenues,
adjusted(1) $19,020 $14,379 $38,409 $29,823
---------------------- ------- ------- ------- -------
EBITDA(2) $9,322 $6,228 $19,220 $10,350
Adjusted EBITDA(2) $11,402 $7,887 $23,347 $13,830
Net Income / (Loss) $3,432 $675 $7,449 ($844)
Adjusted Net Income(2) $5,512 $2,334 $11,576 $2,636
Earnings /(Loss) per
common share (EPS), basic $0.12 $0.01 $0.28 ($0.07)
Earnings /(Loss) per
common share (EPS),
diluted $0.11 $0.01 $0.26 ($0.07)
Adjusted Earnings per
common share, basic(2) $0.20 $0.06 $0.46 $0.06
Adjusted Earnings per
common share, diluted(2) $0.18 $0.06 $0.40 $0.06
------------------------- ----- ----- ----- -----
(1) Time charter revenues, adjusted,
is not a recognized measurement
under generally accepted accounting
principles in the United States of
America ("U.S. GAAP" or "GAAP"). We
believe that the presentation of
Time charter revenues, adjusted is
useful to investors because it
presents the charter revenues
recognized in the relevant period
based on the contracted charter
rates, excluding the amortization
of above/below market time
charters attached to vessels
acquired. Please refer to the
definition and reconciliation of
this measurement to the most
directly comparable financial
measure calculated and presented in
accordance with U.S. GAAP at the
back of this release.
(2) EBITDA, Adjusted EBITDA,
Adjusted Net Income and Adjusted
Earnings /(Loss) per common share
("Adjusted EPS") are not recognized
measurements under GAAP. Please
refer to the definitions and
reconciliation of these
measurements to the most directly
comparable financial measures
calculated and presented in
accordance with U.S. GAAP at the
back of this release.
Mr. Michael Bodouroglou, Chairman, President and Chief Executive Officer of Box Ships Inc., commented:
"During the second quarter, there were some slight signs of improvement in the containership market. We managed to extend the charter of the MSC Emma with MSC for a further period of nine months at a daily rate of $9,450, which even though it is significantly below the previous rate of $28,500 per day, it is still a marked improvement compared to our previous extensions for similar vessels at around $7,000 per day earlier in the year. In addition, more recently, we extended the charters of the CMA CGM Marlin and CMA CGM Kingfish for a further period of one year, commencing on September 1, 2014, at a daily rate of $9,500 and the charter of Box Trader until May 2015 or latest August 2015 at a daily rate of $8,500."
"The reduced charters on the Box Queen, CMA CGM Marlin and CMA CGM Kingfish were the contributing factors to the 24% decline in our adjusted time charter revenues year over year, which directly impacted our bottom line. We have two vessels that will come off charter during 2014 and we are monitoring the market for the best suitable opportunities. During these challenging times, we were able to keep our expenses stable and we will work on further strengthening our balance sheet and improving our liquidity. To that extent, in the third quarter of 2014, we reached an agreement with one of our lenders for the full repayment of our loan at a significant gain, the savings of which contribute directly to our net asset value, while giving us a debt-free vessel. The benefits from having a debt-free vessel are numerous and give the Company added fire power to negotiate better terms under its existing loan agreements to preserve its liquidity and improve its free cash flow."
Results of Operations
Three months ended June 30, 2014 compared to three months ended June 30, 2013
During the second quarter of 2014, we operated an average of 9 vessels. Our Net Income and Adjusted Net Income during the second quarter of 2014 was $0.7 million and $2.3 million, respectively, resulting in basic and diluted earnings per share of $0.01 and basic and diluted adjusted earnings per share of $0.06. EBITDA and Adjusted EBITDA for the second quarter of 2014 was $6.2 million and $7.9 million, respectively.
During the second quarter of 2013, we operated an average of 9 vessels. Our Net Income and Adjusted Net Income during the second quarter of 2013 was $3.4 million and $5.5 million, respectively, resulting in basic earnings per share of $0.12 and basic adjusted earnings per share of $0.20. EBITDA and Adjusted EBITDA for the second quarter of 2013 was $9.3 million and $11.4 million, respectively.
Net revenues
Net revenues represent charter hire earned, net of commissions. During the second quarter of 2014 and 2013, our vessels operated a total of 819 and 804 days, respectively, out of a total of 819 calendar days in both periods. Currently, all vessels in our fleet are employed under fixed rate time charters, having an average weighted remaining charter duration of 10 months (weighted by aggregate contracted charter hire). The Company reported net revenues for the second quarter of 2014 of $12.5 million, a decrease of 28% compared to $17.3 million in the second quarter of 2013. This decrease is mainly due to the re-chartering of the Box Queen in January 2014 at a daily rate of $6,100, compared to the previous time charter of $28,000 per day during the second quarter of 2013 and the re-chartering of each of the CMA CGM Kingfish and CMA CGM Marlin in March 2014 at a daily rate of $7,000, compared to $23,000 per day that each of these vessels was earning during the second quarter of 2013. Our net revenues are also net of the amortization of above/below market time charters, which decreased our revenues and net income for the second quarter of 2014 and 2013 by $1.5 million and $1.3 million, respectively, or $0.05 and $0.05 per common share, respectively. Our average time charter equivalent rate, or TCE rate, for the second quarter of 2014 was $15,010 per vessel per day, which was 28% below our average TCE rate of $20,872 per vessel per day during the second quarter of 2013, mainly due to the reasons outlined above. Our adjusted TCE rate was $16,843 per vessel per day in the second quarter of 2014, 25% lower than our adjusted TCE of $22,506 for the second quarter of 2013. TCE rate is not a recognized measurement under GAAP. Please see the table at the back of this release for a reconciliation of TCE rates to time charter revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Voyage expenses
Voyage expenses for the second quarter of 2014 and 2013 amounted to $0.2 million and $0.6 million, respectively, and mainly relate to war risk insurance costs and bunkers consumed by our vessels travelling to and from the drydocks. Voyage expenses for the second quarter of 2014 related mainly to war risk insurance costs, whereas voyage expenses for the second quarter of 2013 included approximately $0.3 million, relating to war risk insurance costs and $0.2 million, relating to other crew costs reimbursable by the charterers.
Vessels operating expenses
Vessels operating expenses including the amortization of other intangible assets for the second quarter of 2014 were flat year over year at $4.5 million, or $4.2 million on an adjusted basis to exclude the amortization of other intangible assets. On average, our vessels' operating expenses for the second quarter of 2014 were relatively unchanged year over year at $5,444 per vessel per day, or $5,123 per vessel per day on an adjusted basis, compared to $5,455 per vessel per day, in the second quarter of 2013, or $5,134 per vessel per day on an adjusted basis. The amortization of other intangible assets for each of the second quarters of 2014 and 2013 amounted to $0.3 million.
Management fees charged by a related party
Management fees charged by Allseas Marine S.A. (our "Manager" or "Allseas") for each of the second quarters of 2014 and 2013 were $0.7 million, or $886 (EUR646.99) per vessel per day, and $830 (EUR643.77) per vessel per day, respectively. Management fees charged by a related party represent fees for management and technical services in accordance with our management agreements and are adjusted annually in accordance with the official Eurozone inflation rate. This fee is charged on a daily basis per vessel and is affected by the number of vessels in our fleet, the number of calendar days during the period, the official Eurozone inflation rate and the U.S. Dollar/Euro exchange rate at the beginning of each month.
Depreciation
Depreciation for our fleet for each of the second quarters of 2014 and 2013 was $3.8 million.
General and administrative expenses
General and administrative ("G&A") expenses for the each of the second quarters of 2014 and 2013 were $1.5 million, or $1,870 and $1,782 per vessel per day, respectively.
Interest and finance costs
Interest and finance costs amounted to $1.8 million and $2.1 million for the second quarter of 2014 and 2013, respectively. This decrease in interest and finance costs is due to the decrease in our average borrowings outstanding period over period.
UNAUDITED CONSOLIDATED CONDENSED CASH FLOW INFORMATION
(Expressed in
thousands of U.S.
Dollars)
Six Months Ended June
30,
---------------------
2013 2014
---- ----
Net cash from
Operating
Activities $20,035 $9,284
Net cash used in
Financing
Activities (2,957) (1,884)
------ ------
Net increase in cash
and cash
equivalents $17,078 $7,400
======= ======
Net cash from Operating Activities
Net cash from Operating Activities for the six months ended June 30, 2014 was $9.3 million. Our vessels generated positive cash flows from revenues, net of commissions, of $29.8 million, while we paid $20.5 million for expenses, of which $3.1 million relates to the payment of interest on our bank loans.
Net cash from Operating Activities for the six months ended June 30, 2013 was $20.0 million. Our vessels generated positive cash flows from revenues, net of commissions, of $37.8 million, while we paid $17.8 million for expenses, of which $3.5 million relates to the payment of interest on our bank loans and on our related party loan with Paragon Shipping Inc. ("Paragon Shipping").
Net cash used in Financing Activities
Net cash used in Financing Activities for the six months ended June 30, 2014, was $1.9 million. On April 15, 2014, we completed the public offering and concurrent private placement of 5,500,000 Units, each consisting of one common share and one warrant to purchase 0.40 common shares (the "Units") at a public offering price of $2.05 per unit, resulting in net proceeds of $10.6 million in the aggregate, net of underwriting discounts, commissions and other offering costs of $0.7 million in the aggregate. During the six months ended June 30, 2014, we repaid $11.4 million of our debt, paid financing costs of $0.1 million and made cash payments to our preferred shareholders of $1.0 million.
Net cash used in Financing Activities for the six months ended June 30, 2013, was $3.0 million. On March 18, 2013, we completed the public offering and issuance of 4,000,000 of our common shares, resulting in net proceeds of $19.9 million, net of underwriting discounts, commissions and other offering costs of $1.1 million in the aggregate. During the six months ended June 30, 2013, we repaid $13.4 million of our debt, paid financing costs of $0.1 million, made cash payments to our preferred shareholders of $0.9 million and paid dividends to common shareholders of $8.5 million.
Recent Developments:
Commerzbank Loan Repayment:
On July 22, 2014, we announced the full repayment of the outstanding amount under our loan agreement with Commerzbank AG ("Commerzbank"), dated July 29, 2011. The outstanding amount of the loan amounted to $21.5 million and we agreed with Commerzbank to the payment of $15.0 million plus accrued interest of $0.1 million, in full and final settlement of the loan. The gain from this transaction of approximately $6.4 million will be reflected in the third quarter of 2014.
Liquidity:
As of June 30, 2014, our cash and restricted cash (current and non-current) amounted to $31.9 million in aggregate, of which $10.0 million is considered restricted for minimum liquidity purposes under our loan agreements. As of June 30, 2014, we had total outstanding indebtedness of $168.2 million, of which $21.5 million was settled in July 2014, as discussed above. $19.5 million is scheduled to be repaid in the forthcoming 12-month period, of which $4.9 million has already been repaid as of the date of this release. Furthermore, as of June 30, 2014, we were in compliance with the covenants contained in our loan agreements, with the exception of the Leverage Ratio and Market Value Adjusted Net Worth covenant contained in two of our loan agreements as a result of the expiration of waivers under certain of our loan agreements on January 1, 2014 and April 1, 2014. In accordance with U.S. GAAP, unless we receive waivers for a period of more than one year after the balance sheet date or the loans are refinanced prior to the issuance of the consolidated financial statements, our total debt will be required to be presented as current. Even though to date the lenders have not declared an event of default under the loan agreements for which we were not in compliance as of June 30, 2014, those breaches constitute an event of default and as a result of the cross default provisions included in our loan agreements, may result in the lenders accelerating or demanding immediate repayment of their loans. Following the Commerzbank loan repayment, discussed above, we are in negotiations with two of our remaining lenders to possibly obtain waivers, amend our loan covenants and/or seek alternative solutions to resolve any future covenant issues and preserve the Company's liquidity. We believe that the lenders will not demand payment of the loans before their scheduled maturity, provided that we remain current with our obligations of paying principal and interest when they become due. In addition, we have no borrowing capacity under our existing loan facilities and no capital commitments. We anticipate that our current financial resources, together with cash generated from operations will be sufficient to fund the operations of our current fleet, including our working capital requirements, for the next 12 months, assuming that the debt will not be accelerated by our lenders.
Preferred Stock Payments:
On July 1, 2014, we made a cash payment of $0.5 million with respect to our Series C Preferred Shares, for the period from April 1, 2014 through June 30, 2014. As of June 30, 2014, 916,333 Series C Preferred Shares were outstanding.
Cash payments on our Series C Preferred Shares accrue cumulatively at a rate of 9.00% per annum per $25.00 stated liquidation preference per Series C Preferred Share and are payable, when, as and if declared by the Board of Directors, on January 1, April 1, July 1 and October 1 of each year. Our ability to make cash payments will be subject, among other things, to the restrictions in our loan agreements, the provisions of Marshall Islands law and other factors to be considered by our Board of Directors.
Chartering Update and Strategy:
In June 2014, the MSC Emma extended its time charter with Mediterranean Shipping Company ("MSC") for a period of nine months, commencing on July 3, 2014, at a daily gross charter rate of $9,450.
In July 2014, the CMA CGM Kingfish and CMA CGM Marlin extended their time charters with CMA CGM for a period of twelve months, commencing on September 1, 2014, at a daily gross charter rate of $9,500.
In September 2014, the Box Trader extended its time charter with Hapag Lloyd for a further period until earliest May 15, 2015 or latest August 1, 2015, commencing on October 1, 2014, at a daily gross charter rate of $8,500.
Pursuant to our chartering strategy, we focus on containerships with carrying capacities ranging from 1,700 TEU to 7,000 TEU employed on short- to medium-term time charters of one to five years with staggered maturities, which provide us with the benefit of stable cash flows from a diversified portfolio of charterers, while preserving the flexibility to capitalize on potentially rising rates when the current time charters expire. We may also, under certain circumstances, opportunistically employ our vessels on shorter-term charters or our vessels may operate on the spot market. Based on the earliest redelivery dates, and following the extension of charters discussed above, the Company has secured under such contracts 83% and 39% of its fleet capacity for the remainder of 2014 and 2015, respectively. For future updates on the employment of our vessels, please visit the employment section of our website at www.box-ships.com/fleet-employment.php. The information contained on the Company's website does not constitute part of this press release.
Fleet List:
The following table provides additional information about our fleet as of September 2, 2014:
Vessel Year TEU Charterer Daily Gross Charter Notes
Built Charter Rate (1) Expiration (2)
--- ----- --------------- -------------
Box Voyager 2010 3,426 CNC $7,350 October 2014 3
Box Trader 2010 3,426 Hapag Lloyd $8,000 October 2014 4
$8,500 May 2015
CMA CGM
Kingfish 2007 5,095 CMA CGM $9,500 August 2015 5, 9
CMA CGM
Marlin 2007 5,095 CMA CGM $9,500 August 2015 5, 9
Box Queen
(ex Maersk
Diadema) 2006 4,546 MSC $6,100 October 2014 6
Maule 2010 6,589 CSAV Valparaiso $38,000 April 2016 7
MSC Emma 2004 5,060 MSC $9,450 March 2015 8, 9
OOCL Hong
Kong 1995 5,344 OOCL $26,800 May 2015 9
OOCL China 1996 5,344 OOCL $26,800 June 2015 9
-----
Total 43,925
======
Notes:
------
1) Daily gross
charter
rates do not
reflect
commissions
payable by
us to third
party
chartering
brokers and
our Manager,
totaling
5.00% for
Box Queen,
4.75% for
Box Voyager,
CMA CGM
Kingfish and
CMA CGM
Marlin,
1.25% for
each of OOCL
Hong Kong
and OOCL
China, and
2.50% for
each of the
other
vessels in
our fleet,
including,
in each
case, 1.25%
to Allseas.
2) Based on the
earliest
redelivery
date.
3) The
employment
is extended
for a period
of six to
eight months
and
commenced in
March 2014.
4) The
employment
is extended
until
earliest May
2015 or
latest
August 2015,
commencing
on October
1, 2014.
5) The
employment
is extended
for a period
of twelve
months and
commenced on
September 1,
2014.
6) The
employment
is for a
period of
eight to 10
months and
commenced in
January
2014.
7) The charterer
has the
option to
increase or
decrease the
term of the
charter by
30 days. The
charterer
also has the
option to
purchase the
vessel upon
expiration
of the
charter,
provided
that the
option is
exercised at
least six
months prior
to the
expiration
of the term
of the
charter, for
a purchase
price of
$57.0
million,
less a 0.5%
purchase
commission
payable to
parties
unaffiliated
to us.
8) The
employment
is for a
period of
nine months
and
commenced in
July 2014.
9) The charterer
has the
option to
increase or
decrease the
term of the
charter by
30 days.
Conference Call and Webcast details:
The Company's management will host a conference call to discuss its second quarter and six months ended June 30, 2014 results on September 3, 2014 at 8:00 am ET.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1-877-300-8521 (USA) or +1-412-317-6026 (international).
A replay of the conference call will be available for seven days and can be accessed by dialing +1-877-870-5176 (domestic) and +1-858-384-5517 (international) and using passcode 10051163.
There will also be a simultaneous live webcast over the Internet, through the Company's website (www.box-ships.com). Participants in the live webcast should register on the website approximately 15 minutes prior to the start of the webcast.
About Box Ships Inc.:
Box Ships Inc. is an Athens, Greece-based international shipping company specializing in the transportation of containers. The Company's current fleet consists of nine containerships with a total carrying capacity of 43,925 TEU and a TEU weighted average age of 9.6 years. The Company's common shares and Series C Preferred Shares trade on the New York Stock Exchange under the symbols "TEU" and "TEUPRC", respectively.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. 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. Forward-looking statements 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 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 this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "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 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 the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for container shipping capacity, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Contacts:
Box Ships Inc.
Robert Perri, CFA
Chief Financial Officer
Tel. +30 (210) 8914600
E-mail: ir@box-ships.com
Investor Relations / Media
Allen & Caron Inc.
Michael Mason (Investors)
Tel. +1 (212) 691-8087
E-mail: michaelm@allencaron.com
Len Hall (Media)
Tel. +1 (949) 474-4300
E-mail: len@allencaron.com
- Tables Follow -
Three Months Ended Six Months Ended June
June 30, 30,
SUMMARY FLEET INFORMATION
------------------------- ---
2013 2014 2013 2014
---- ---- ---- ----
FLEET DATA
----------
Average number of
vessels (1) 9.00 9.00 9.00 9.00
Calendar days for
fleet (2) 819 819 1,629 1,629
Less:
Scheduled off-hire 14 - 19 42
Unscheduled off-hire 1 - 13 15
Operating days for
fleet (3) 804 819 1,597 1,572
Fleet utilization (4) 98.2% 100.0% 98.0% 96.5%
AVERAGE DAILY RESULTS
(Expressed in United States Dollars)
-----------------------------------
Time charter
equivalent (5) $20,872 $15,010 $21,038 $16,530
Vessel operating
expenses (6) $5,455 $5,444 $5,548 $5,754
Management fees
charged by a related
party (7) $830 $886 $835 $884
General and
administrative
expenses (8) $1,782 $1,870 $1,848 $1,932
Total vessel
operating expenses
(9) $8,067 $8,200 $8,231 $8,570
------------------- ------ ------ ------ ------
(1) Average number of vessels is the
number of vessels that
constituted our fleet for the
relevant period, as measured by
the sum of the number of calendar
days each vessel was a part of
our fleet during the period
divided by the number of calendar
days in the period.
(2) Calendar days are the total days
we possessed the vessels in our
fleet for the relevant period.
(3) Operating days for the fleet are
the total calendar days the
vessels were in our possession
for the relevant period after
subtracting off-hire days for
scheduled dry-dockings or
special or intermediate surveys
and unscheduled off-hire days
associated with repairs and other
operational matters. Any idle
days relating to the days a
vessel remains unemployed are
included in unscheduled off-hire
days.
(4) Fleet utilization is the
percentage of time that our
vessels were able to generate
revenues and is determined by
dividing operating days by fleet
calendar days for the relevant
period.
(5) Time charter equivalent ("TCE"),
is a measure of the average daily
revenue performance of a vessel
on a per voyage basis. Our method
of calculating TCE is determined
by dividing time charter
revenues, net of commissions and
voyage expenses by operating days
for the relevant time period.
Voyage expenses primarily consist
of extra war risk insurance,
port, canal, fuel costs and other
crew costs reimbursable by the
charterers that are unique to a
particular voyage and bunkers
consumed during the periods that
vessels are in between
employment. TCE is a non-GAAP
standard shipping industry
performance measure used
primarily to compare daily
earnings generated by vessels
despite changes in the mix of
charter types (i.e., spot voyage
charters, time charters and
bareboat charters) under which
the vessels may be employed
between the periods.
(6) Daily vessel operating expenses,
which includes crew costs,
provisions, deck and engine
stores, lubricating oil,
insurance, other than extra war
risk insurance, maintenance,
repairs and amortization of
intangibles, is calculated by
dividing vessel operating
expenses by fleet calendar days
for the relevant time period.
(7) Daily management fees are
calculated by dividing management
fees charged by a related party
by fleet calendar days for the
relevant time period.
(8) Daily general and administrative
expenses are calculated by
dividing general and
administrative expense by fleet
calendar days for the relevant
time period.
(9) Total vessel operating expenses
("TVOE") are a measurement of our
total expenses, excluding dry-
docking expenses, associated with
operating our vessels. TVOE is
the sum of vessel operating
expenses, management fees and
general and administrative
expenses. Daily TVOE is
calculated by dividing TVOE by
fleet calendar days for the
relevant time period.
Time Charter Equivalent Three Months Ended Six Months Ended June
Reconciliation June 30, 30,
(Expressed in thousands
of U.S. Dollars,
except days and daily
results)
-----------------------
2013 2014 2013 2014
---- ---- ---- ----
Time Charter Revenues $17,707 $12,878 $35,797 $27,381
Commissions (368) (350) (733) (663)
Voyage Expenses (558) (234) (1,467) (732)
Total Revenue, net of
voyage expenses $16,781 $12,294 $33,597 $25,986
--------------------- ------- ------- ------- -------
Plus: Amortization of
above/below market
time charters 1,313 1,501 2,612 2,442
--------------------- ----- ----- ----- -----
Total Revenue, net of
voyage expenses,
adjusted $18,094 $13,795 $36,209 $28,428
--------------------- ------- ------- ------- -------
Total operating days 804 819 1,597 1,572
-------------------- --- --- ----- -----
Time Charter Equivalent $20,872 $15,010 $21,038 $16,530
----------------------- ------- ------- ------- -------
Time Charter
Equivalent, adjusted
(10) $22,506 $16,843 $22,673 $18,084
--------------------- ------- ------- ------- -------
(10) Time charter equivalent, adjusted
("TCE adjusted"), is a non-GAAP
measure and is determined by
dividing time charter revenues,
net of commissions, voyage
expenses and amortization of
above/below market time
charters attached to the vessels
acquired, by operating days for
the relevant time period. Voyage
expenses primarily consist of
extra war risk insurance, port,
canal, fuel costs and other crew
costs reimbursable by the
charterers that are unique to a
particular voyage. We believe
that the presentation of TCE
adjusted is useful to investors
because it presents the TCE
earned in the relevant period
based on the contracted charter
rates, excluding the
amortization of above/below
market time charters attached to
the vessels acquired. The
Company's definition of TCE
adjusted may not be the same as
that used by other companies in
the shipping or other
industries.
Reconciliation of U.S. GAAP Financial Information to Non-GAAP measures
Net Income / Three Months Ended Six Months Ended June
(Loss) / June 30, 30,
Adjusted Net
Income /
(Loss) (1)
(Expressed in
thousands of
U.S.
Dollars)
-------------
2013 2014 2013 2014
---- ---- ---- ----
Net Income /
(Loss) $3,432 $675 $7,449 ($844)
Plus:
Amortization
of
intangibles 1,576 1,764 3,136 2,966
Plus: Share-
based
compensation 504 548 991 1,167
Minus: Fair
value change
of warrants - (653) - (653)
------------- --- ---- --- ----
Adjusted Net
Income $5,512 $2,334 $11,576 $2,636
------------ ------ ------ ------- ------
EBITDA /
Adjusted
EBITDA (1)
-----------
Net Income /
(Loss) $3,432 $675 $7,449 ($844)
Plus: Net
Interest
expense 2,116 1,779 4,265 3,688
Plus:
Depreciation 3,774 3,774 7,506 7,506
------------- ----- ----- ----- -----
EBITDA $9,322 $6,228 $19,220 $10,350
------ ------ ------ ------- -------
Plus:
Amortization
of
intangibles 1,576 1,764 3,136 2,966
Plus: Share-
based
compensation 504 548 991 1,167
Minus: Fair
value change
of warrants - (653) - (653)
------------- --- ---- --- ----
Adjusted
EBITDA $11,402 $7,887 $23,347 $13,830
-------- ------- ------ ------- -------
Earnings / Three Months Ended June
(Loss) per 30,
Common Share Six Months Ended June 30,
(Expressed in
thousands of
U.S. Dollars,
except share
and per share
data)
--------------
2013 2014 2013 2014
---- ---- ---- ----
Net Income /
(Loss) $3,432 $675 $7,449 ($844)
Less: Cash
payments to
Series B-1
Preferred
Shares (469) - (937) -
Less: Cash
payments to
Series C
Preferred
Shares - (515) - (1,031)
Less: Net
Income /Loss
attributable
to non-
vested share
awards (64) (3) (153) 41
Net Income /
(Loss)
available to
common
shareholders $2,899 $157 $6,359 ($1,834)
Weighted
average
number of
common
shares, basic 24,423,260 29,360,273 22,729,343 27,031,845
Earnings /
(Loss) per
common share,
basic $0.12 $0.01 $0.28 ($0.07)
-------------- ----- ----- ----- ------
Net Income /
(Loss) $3,432 $675 $7,449 ($844)
Less: Cash
payments to
Series B-1
Preferred
Shares (469) - (937) -
Less: Cash
payments to
Series C
Preferred
Shares - (515) - (1,031)
Less: Net
Income /Loss
attributable
to non-
vested share
awards (64) (3) (153) 41
Plus: Cash
payments to
Series B-1
Preferred
Shares, if
converted to
common shares 469 - 937 -
Net Income /
(Loss)
available to
common
shareholders $3,368 $157 $7,296 ($1,834)
Weighted
average
number of
common
shares,
diluted 30,169,817 29,360,273 28,475,900 27,031,845
Earnings /
(Loss) per
common share,
diluted $0.11 $0.01 $0.26 ($0.07)
-------------- ----- ----- ----- ------
Adjusted Three Months Ended June
Earnings 30,
per Common
Share (1) Six Months Ended June 30,
(Expressed
in
thousands
of U.S.
Dollars,
except
share and
per share
data)
----------
2013 2014 2013 2014
---- ---- ---- ----
Adjusted Net
Income $5,512 $2,334 $11,576 $2,636
Less: Cash
payments to
Series B-1
Preferred
Shares (469) - (937) -
Less: Cash
payments to
Series C
Preferred
Shares - (515) - (1,031)
Less:
Adjusted
Net Income
attributable
to non-
vested
share
awards (108) (36) (249) (35)
Adjusted Net
Income
available
to common
shareholders $4,935 $1,783 $10,390 $1,570
Weighted
average
number of
common
shares,
basic 24,423,260 29,360,273 22,729,343 27,031,845
Adjusted
Earnings
per common
share,
basic $0.20 $0.06 $0.46 $0.06
----------- ----- ----- ----- -----
Adjusted Net
Income $5,512 $2,334 $11,576 $2,636
Less: Cash
payments to
Series B-1
Preferred
Shares (469) - (937) -
Less: Cash
payments to
Series C
Preferred
Shares - (515) - (1,031)
Less:
Adjusted
Net Income
attributable
to non-
vested
share
awards (108) (36) (249) (35)
Plus: Cash
payments to
Series B-1
Preferred
Shares, if
converted
to common
shares 469 - 937 -
Adjusted Net
Income
available
to common
shareholders $5,404 $1,783 $11,327 $1,570
Weighted
average
number of
common
shares,
diluted 30,169,817 29,360,273 28,475,900 27,031,845
Adjusted
Earnings
per common
share,
diluted $0.18 $0.06 $0.40 $0.06
----------- ----- ----- ----- -----
(1) The Company considers EBITDA to
represent net income plus net
interest expense and depreciation
and amortization. The Company's
management uses EBITDA as a
performance measure. The Company
believes that EBITDA is useful to
investors because the shipping
industry is capital intensive and
may involve significant financing
costs. The Company excluded non-
cash items in relation to the
amortization of intangibles,
share-based compensation and
fair value change of warrants to
derive Adjusted EBITDA because
the Company believes it provides
additional information on the
fleet operational results which
may be useful to investors.
The Company excluded non-cash
items in relation to the
amortization of intangibles,
share-based compensation and
fair value change of warrants
from net income /(loss) to
derive to Adjusted Net Income /
(Loss) and Adjusted EPS /(Loss)
per share. The Company believes
that Adjusted Net Income /(Loss)
and Adjusted EPS /(Loss) per
share provide additional
information on the fleet
operational results which may be
useful to investors.
EBITDA, Adjusted EBITDA, Adjusted
Net Income /(Loss) and Adjusted
EPS /(Loss) per share are items
not recognized by U.S. GAAP and
should not be considered as an
alternative to net income /
(loss), operating income,
earnings /(loss) per share or
any other indicator of a
Company's operating performance
required by U.S. GAAP. The
Company's definition of EBITDA,
Adjusted EBITDA, Adjusted Net
Income /(Loss) and Adjusted EPS
/(Loss) per share may not be the
same as that used by other
companies in the shipping or
other industries.
BOX SHIPS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)
(Expressed in thousands of U.S. Dollars, except per share data)
Three Months Ended Six Months Ended June
June 30, 30,
------------------ ----------------------
2013 2014 2013 2014
---- ---- ---- ----
REVENUES:
---------
Time charter revenues (1) $17,707 $12,878 $35,797 $27,381
Commissions (368) (350) (733) (663)
---- ---- ---- ----
Net Revenues 17,339 12,528 35,064 26,718
------ ------ ------ ------
EXPENSES:
---------
Voyage expenses 558 234 1,467 732
Vessels operating expenses (2) 4,468 4,459 9,037 9,373
Dry-docking expenses 869 - 1,010 2,314
Management fees charged by a related party 680 726 1,360 1,440
Depreciation 3,774 3,774 7,506 7,506
General and administrative expenses (3) 1,459 1,532 3,011 3,148
----- ----- ----- -----
Total Expenses 11,808 10,725 23,391 24,513
------ ------ ------ ------
Operating income 5,531 1,803 11,673 2,205
----- ----- ------ -----
OTHER INCOME / (EXPENSES):
--------------------------
Interest and finance costs (2,117) (1,779) (4,268) (3,688)
Interest income 1 - 3 -
Fair value change of warrants - 653 - 653
Foreign currency gain / (loss), net 17 (2) 41 (14)
--- --- --- ---
Total other expenses, net (2,099) (1,128) (4,224) (3,049)
------ ------ ------ ------
NET INCOME / (LOSS) $3,432 $675 $7,449 $(844)
Other Comprehensive Income / (Loss)
-----------------------------------
Unrealized gain / (loss) on cash flow hedges 662 (103) 775 (48)
--- ---- --- ---
Total Other Comprehensive Income / (Loss) 662 (103) 775 (48)
--- ---- --- ---
COMPREHENSIVE INCOME / (LOSS) $4,094 $572 $8,224 $(892)
Earnings / (loss) per common share, basic $0.12 $0.01 $0.28 $(0.07)
Earnings / (loss) per common share, diluted $0.11 $0.01 $0.26 $(0.07)
Footnotes:
----------
(1) includes amortization of below and
above market acquired time
charters of $1,313 and $1,501 for
the three months ended June 30,
2013 and 2014, respectively, and
$2,612 and $2,442 for the six
months ended June 30, 2013 and
2014, respectively
(2) includes amortization of other
intangible assets of $263 for
each of the three-month periods
ended June 30, 2013 and 2014 and
$524 for each of the six-month
periods ended June 30, 2013 and
2014
(3) includes share-based compensation
of $504 and $548 for the three
months ended June 30, 2013 and
2014, respectively, and $991 and
$1,167 for the six months ended
June 30, 2013 and 2014,
respectively
BOX SHIPS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in
thousands of U.S.
Dollars)
December 31, 2013 June 30, 2014
----------------- -------------
ASSETS
------
Cash and
restricted
cash
(current
and non-
current) $24,512 $31,912
Other current
assets 7,189 10,117
Vessels and other
fixed assets, net
and other non-
current assets 397,905 386,678
Total
Assets $429,606 $428,707
LIABILITIES AND
STOCKHOLDERS'
EQUITY
---------------
Total debt
(1) $179,550 $168,200
Total other
liabilities 5,337 7,538
Total stockholders'
equity 244,719 252,969
Total
Liabilities
and
Stockholders'
Equity $429,606 $428,707
Footnotes:
----------
(1) Refer to Liquidity
section, above
SOURCE Box Ships Inc.
