BOX SHIPS INC ATHENS, Greece, Nov. 5, 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 third quarter and nine months ended September 30, 2014.
Three Months Nine Months Ended
Ended September September 30,
30,
---------------- ------------------
Financial Highlights 2013 2014 2013 2014
(Expressed in thousands
of U.S. Dollars, except
per share data)
------------------------
Time charter revenues $18,258 $11,767 $54,056 $39,149
Amortization of above/
below market time
charters 1,424 1,155 4,035 3,597
---------------------- ----- ----- ----- -----
Time charter revenues,
adjusted(1) $19,682 $12,922 $58,091 $42,746
---------------------- ------- ------- ------- -------
EBITDA(2) $10,711 $11,239 $29,931 $21,589
Adjusted EBITDA(2) $12,910 $6,306 $36,257 $20,136
Net Income $4,843 $5,649 $12,291 $4,805
Adjusted Net Income(2) $7,042 $716 $18,617 $3,352
Earnings per common
share (EPS), basic $0.10 $0.17 $0.37 $0.11
Earnings per common
share (EPS), diluted $0.10 $0.17 $0.36 $0.11
Adjusted Earnings per
common share, basic(2) $0.27 $0.01 $0.73 $0.06
Adjusted Earnings per
common share,
diluted(2) $0.26 $0.01 $0.65 $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 third quarter, we reported adjusted revenues of $12.9 million, down 34% from $19.7 million in the third quarter of 2013 due to the lower time charter rates our vessels earned year over year, and reported a net income of $5.6 million, or $0.17 per share. Our adjusted net income decreased to $716 thousand in the third quarter of 2014 from $7.0 million in the prior year period.
"Since early last year, we have been working with our lenders to ensure the liquidity and the flexibility of the Company during this continued downturn. In that respect, we have recently agreed with two of our lenders to waive certain key covenants and/or significantly reduce our quarterly debt amortization profile until the second quarter of 2016, thereby reducing our cash flow breakeven and easing covenant compliance going forward. This leaves only one remaining lender we have yet to reach an agreement with. We are in continued discussions with this lender to modify our debt amortization profile and waive certain covenants, which have lasted longer than expected. Although we still believe we will reach an agreement, we cannot be certain it will occur. In any case, we believe Box Ships is well positioned to weather a low charter rate environment until charter rates improve as expected into 2015."
Results of Operations
Three months ended September 30, 2014 compared to three months ended September 30, 2013
During the third quarter of 2014, we operated an average of 9 vessels. Our Net Income and Adjusted Net Income during the third quarter of 2014 was $5.6 million and $0.7 million, respectively, resulting in basic and diluted earnings per share of $0.17 and basic and diluted adjusted earnings per share of $0.01. EBITDA and Adjusted EBITDA for the third quarter of 2014 was $11.2 million and $6.3 million, respectively.
During the third quarter of 2013, we operated an average of 9 vessels. Our Net Income and Adjusted Net Income during the third quarter of 2013 was $4.8 million and $7.0 million, respectively, resulting in basic earnings per share of $0.10 and basic adjusted earnings per share of $0.27. EBITDA and Adjusted EBITDA for the third quarter of 2013 was $10.7 million and $12.9 million, respectively.
Net revenues
Net revenues represent charter hire earned, net of commissions. During the third quarter of 2014 and 2013, our vessels operated a total of 827 and 828 days, respectively, out of a total of 828 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 9 months (weighted by aggregate contracted charter hire). The Company reported net revenues for the third quarter of 2014 of $11.5 million, a decrease of 36% compared to $17.9 million in the third 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 $28,000 per day that the vessel was earning during the third quarter of 2013, the re-chartering of each of the CMA CGM Kingfish and CMA CGM Marlin in March 2014 at a daily rate of $7,000 and the extension of their charters in September 2014 at a daily rate of $9,500, compared to $23,000 per day that each of these vessels was earning during the third quarter of 2013 and the re-chartering of the MSC Emma in July 2014 at a daily rate of $9,450, compared to $28,500 per day that the vessel was earning during the third 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 third quarter of 2014 and 2013 by $1.2 million and $1.4 million, respectively, or $0.04 and $0.06 per common share, respectively. Our average time charter equivalent rate, or TCE rate, for the third quarter of 2014 was $13,352 per vessel per day, which was 36% below our average TCE rate of $20,894 per vessel per day during the third quarter of 2013, mainly due to the reasons outlined above. Our adjusted TCE rate was $14,748 per vessel per day in the third quarter of 2014, 35% lower than our adjusted TCE of $22,613 for the third 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 third quarter of 2014 and 2013 amounted to $0.4 million and $0.6 million, respectively. Voyage expenses for the third quarter of 2014 related mainly to war risk insurance costs, whereas voyage expenses for the third quarter of 2013 included approximately $0.3 million, relating to war risk insurance costs and $0.3 million, relating to other crew costs reimbursable by the charterers.
Vessels operating expenses
Vessels operating expenses including the amortization of other intangible assets for each of the third quarters of 2014 and 2013 amounted to $4.3 million, or $4.0 million, on an adjusted basis to exclude the amortization of other intangible assets. On average, our vessels' operating expenses for the third quarter of 2014 were relatively unchanged year over year at $5,224 per vessel per day, or $4,903 per vessel per day on an adjusted basis, compared to $5,197 per vessel per day, in the third quarter of 2013, or $4,876 per vessel per day on an adjusted basis. The amortization of other intangible assets for each of the third 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 third quarters of 2014 and 2013 were $0.7 million, or $867 (EUR646.99) per vessel per day, and $847 (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 third quarters of 2014 and 2013 was $3.8 million.
General and administrative expenses
General and administrative ("G&A") expenses for each of the third quarters of 2014 and 2013 were $1.5 million, or $1,810 and $1,849 per vessel per day, respectively.
Interest and finance costs
Interest and finance costs amounted to $1.8 million and $2.1 million for the third 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.
Gain from debt extinguishment
Following the early repayment of our loan with Commerzbank AG in July 2014, we recognized a gain of $6.4 million from debt extinguishment.
Fair value change of warrants
During the third quarter of 2014, we recognized a gain of $0.5 million, resulting from the valuation of the warrants issued in April 2014 and classified as a liability.
UNAUDITED CONSOLIDATED CONDENSED CASH FLOW INFORMATION
(Expressed in
thousands of U.S.
Dollars)
Nine Months Ended
September 30,
------------------
2013 2014
---- ----
Net cash from
Operating
Activities $30,352 $15,915
Net cash used in
Financing
Activities (25,156) (22,269)
------- -------
Net increase /
(decrease) in cash
and cash
equivalents $5,196 $(6,354)
====== =======
Net cash from Operating Activities
Net cash from Operating Activities for the nine months ended September 30, 2014 was $15.9 million. Our vessels generated positive cash flows from revenues, net of commissions, of $42.6 million, while we paid $26.7 million for expenses, of which $4.5 million relates to the payment of interest on our bank loans.
Net cash from Operating Activities for the nine months ended September 30, 2013 was $30.4 million. Our vessels generated positive cash flows from revenues, net of commissions, of $57.0 million, while we paid $26.6 million for expenses, of which $5.3 million related 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 nine months ended September 30, 2014, was $22.3 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 nine months ended September 30, 2014, we repaid $31.3 million of our debt, paid financing costs of $0.1 million and made cash payments to our preferred shareholders of $1.5 million.
Net cash used in Financing Activities for the nine months ended September 30, 2013, was $25.2 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. On July 29, 2013, we completed the public offering and issuance of 558,333 shares of our 9.00% Series C Cumulative Redeemable Perpetual Preferred Shares (the "Series C Preferred Shares"), resulting in net proceeds of $12.8 million, net of underwriting discounts, commissions and other offering costs of $0.6 million in the aggregate. $19.7 million out of the net proceeds from the Series C Preferred Shares offering and our cash reserves were used to redeem and retire all of our outstanding Series B-1 Preferred Shares. During the nine months ended September 30, 2013, we repaid $25.0 million of our debt, paid financing costs of $0.2 million, made cash payments to our preferred shareholders of $1.5 million and paid dividends to common shareholders of $11.5 million.
Recent Developments:
On October 17, 2014 we signed a firm commitment with Credit Suisse for a $31.65 million senior secured term loan, to refinance the CMA CGM Marlin, the CMA CGM Kingfish, and finance the MSC Emma. As per the terms of the new senior secured term loan facility, the loan will be repaid in five quarterly installments starting in May 2016 through its maturity in May 2017 and bears interest at LIBOR plus a margin of 3%. In addition, the loan will contain customary financial and other covenants. We expect to finalize the documentation for this agreement in mid-November 2014, subject to customary closing conditions.
Liquidity:
In August 2014, we entered into supplemental agreements with ABN AMRO Bank and agreed to certain amendments in the asset cover ratio and certain financial covenants for the period from April 1, 2014 to June 29, 2015.
As of September 30, 2014, our cash and restricted cash (current and non-current) amounted to $18.2 million in aggregate, of which $10.0 million is considered restricted for minimum liquidity purposes under our loan agreements. As of September 30, 2014, we had total outstanding indebtedness of $141.9 million, of which $25.7 million is scheduled to be repaid in the forthcoming 12-month period, taking into consideration the new loan discussed above. $1.3 million has been repaid as of the date of this release. Furthermore, as of September 30, 2014, we were in compliance with the covenants contained in our loan agreements, with the exception of the Market Value Adjusted Net Worth covenant contained in one of our loan agreements as a result of the expiration of waiver on April 1, 2014, which will be cured upon signing of the new loan mentioned above. In addition, we are still in discussions with one remaining lender to modify our debt amortization profile and waive certain covenants, which have taken longer than expected. In anticipation of the final outcome, we have delayed the partial funding of the retention account we maintain with the lender, which is considered a breach of the loan agreement and the failure to remedy the breach constitutes an event of default under their interpretation of the loan agreement. We have been notified by the lender in question of such breach, but no action has been taken by the lender to date. 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 no action has been taken by the lender, 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. We believe that the lender will not demand payment of the loan before its scheduled maturity, provided that we continue to work towards an amicable solution. 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 October 1, 2014, we made a cash payment of $0.5 million with respect to our Series C Preferred Shares, for the period from July 1, 2014 through September 30, 2014. As of September 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:
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, the Company has secured under such contracts 39% of its fleet capacity for 2015. 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 November 5, 2014:
Vessel Year Built TEU Charterer Daily Gross Charter
Rate (1) Charter Expiration (2) Notes
------ ---------- --- --------- ------------------- --------------------- -----
Box Voyager 2010 3,426 CNC $7,350 November 2014 3
Box Trader 2010 3,426 Hapag Lloyd $8,500 May 2015 4
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 November 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, with
the
exception of
Box Voyager
and Box
Queen, for
which the
charter
expiration
refers to
the latest
redelivery
date.
3) The
employment
was extended
for a period
of six to
eight months
and
commenced in
March 2014.
4) The
employment
was extended
until
earliest May
2015 or
latest
August 2015
and
commenced on
October 1,
2014.
5) The
employment
was extended
for a period
of twelve
months and
commenced on
September 1,
2014.
6) The vessel
will be
redelivered
from its
charterer on
or about
November 15,
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 third quarter and nine months ended September 30, 2014 results on November 6, 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 10055398.
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 9.8 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 -
SUMMARY FLEET Three Months Ended Nine Months Ended
INFORMATION September 30, September 30,
------------- ------------------ -----------------
2013 2014 2013 2014
---- ---- ---- ----
FLEET DATA
----------
Average number of
vessels (1) 9.00 9.00 9.00 9.00
Calendar days for
fleet (2) 828 828 2,457 2,457
Less:
Scheduled off-hire - - 19 42
Unscheduled off-hire - 1 13 16
Operating days for
fleet (3) 828 827 2,425 2,399
Fleet utilization (4) 100% 99.9% 98.7% 97.6%
AVERAGE DAILY RESULTS
(Expressed in United States Dollars)
-----------------------------------
Time charter
equivalent (5) $20,894 $13,352 $20,989 $15,435
Vessel operating
expenses (6) $5,197 $5,224 $5,430 $5,576
Management fees
charged by a related
party (7) $847 $867 $839 $878
General and
administrative
expenses (8) $1,849 $1,810 $1,848 $1,891
Total vessel operating
expenses (9) $7,893 $7,901 $8,117 $8,345
---------------------- ------ ------ ------ ------
(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.
Daily management fees are
calculated by dividing
management fees charged by a
related party by fleet calendar
days for the relevant time
(7) 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 Three Months Ended Nine Months Ended
Equivalent September 30, September 30,
Reconciliation
(Expressed in
thousands of U.S.
Dollars, except
days and daily
results)
------------------
2013 2014 2013 2014
---- ---- ---- ----
Time Charter
Revenues $18,258 $11,767 $54,056 $39,149
Commissions (377) (316) (1,110) (980)
Voyage Expenses (581) (409) (2,048) (1,142)
Total Revenue, net
of voyage expenses $17,300 $11,042 $50,898 $37,027
------------------- ------- ------- ------- -------
Plus: Amortization
of above/below
market time
charters 1,424 1,155 4,035 3,597
------------------ ----- ----- ----- -----
Total Revenue, net
of voyage expenses,
adjusted $18,724 $12,197 $54,933 $40,624
-------------------- ------- ------- ------- -------
Total operating days 828 827 2,425 2,399
-------------------- --- --- ----- -----
Time Charter
Equivalent $20,894 $13,352 $20,989 $15,435
------------ ------- ------- ------- -------
Time Charter
Equivalent,
adjusted (10) $22,613 $14,748 $22,653 $16,934
-------------- ------- ------- ------- -------
(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 /Adjusted Three Months Ended Nine Months Ended
Net Income (1) September 30, September 30,
(Expressed in thousands
of U.S. Dollars)
-----------------------
2013 2014 2013 2014
---- ---- ---- ----
Net Income $4,843 $5,649 $12,291 $4,805
Plus: Amortization of
intangibles 1,690 1,421 4,825 4,387
Plus: Share-based
compensation 509 533 1,501 1,700
Minus: Gain from debt
extinguishment - (6,435) - (6,435)
Minus: Fair value
change of warrants - (452) - (1,105)
------------------- --- ---- --- ------
Adjusted Net Income $7,042 $716 $18,617 $3,352
------------------- ------ ---- ------- ------
EBITDA /Adjusted
EBITDA (1)
----------------
Net Income $4,843 $5,649 $12,291 $4,805
Plus: Net Interest
expense 2,053 1,775 6,319 5,463
Plus: Depreciation 3,815 3,815 11,321 11,321
------------------ ----- ----- ------ ------
EBITDA $10,711 $11,239 $29,931 $21,589
------ ------- ------- ------- -------
Plus: Amortization of
intangibles 1,690 1,421 4,825 4,387
Plus: Share-based
compensation 509 533 1,501 1,700
Minus: Gain from debt
extinguishment - (6,435) - (6,435)
Minus: Fair value
change of warrants - (452) - (1,105)
------------------- --- ---- --- ------
Adjusted EBITDA $12,910 $6,306 $36,257 $20,136
--------------- ------- ------ ------- -------
Earnings per Three Months Ended Nine Months Ended
Common Share September 30, September 30,
(Expressed in
thousands of
U.S. Dollars,
except share
and per share
data)
--------------
2013 2014 2013 2014
---- ---- ---- ----
Net Income $4,843 $5,649 $12,291 $4,805
Less: Cash
payments to
Series B-1
Preferred
Shares (140) - (1,077) -
Less: Cash
payments to
Series C
Preferred
Shares (220) (515) (220) (1,546)
Less: Redemption
of Series B-1
Preferred
Shares (2,063) - (2,063) -
Less: Net Income
attributable to
non-vested
share awards (51) (96) (202) (67)
Net Income
available to
common
shareholders $2,369 $5,038 $8,729 $3,192
Weighted average
number of
common shares,
basic 24,430,380 30,213,548 23,302,586 28,104,067
Earnings per
common share,
basic $0.10 $0.17 $0.37 $0.11
-------------- ----- ----- ----- -----
Net Income $4,843 $5,649 $12,291 $4,805
Less: Cash
payments to
Series B-1
Preferred
Shares (140) - (1,077) -
Less: Cash
payments to
Series C
Preferred
Shares (220) (515) (220) (1,546)
Less: Redemption
of Series B-1
Preferred
Shares (2,063) - (2,063) -
Less: Net Income
attributable to
non-vested
share awards (51) (96) (202) (67)
Plus: Cash
payments to
Series B-1
Preferred
Shares, if
converted to
common shares 140 - 1,077 -
Net Income
available to
common
shareholders $2,509 $5,038 $9,806 $3,192
Weighted average
number of
common shares,
diluted 26,039,211 30,213,548 27,491,597 28,104,067
Earnings per
common share,
diluted $0.10 $0.17 $0.36 $0.11
-------------- ----- ----- ----- -----
Adjusted Three Months Ended Nine Months Ended
Earnings per September 30, September 30,
Common Share
(1)
(Expressed in
thousands of
U.S. Dollars,
except share
and per share
data)
--------------
2013 2014 2013 2014
---- ---- ---- ----
Adjusted Net
Income $7,042 $716 $18,617 $3,352
Less: Cash
payments to
Series B-1
Preferred
Shares (140) - (1,077) -
Less: Cash
payments to
Series C
Preferred
Shares (220) (515) (220) (1,546)
Less: Adjusted
Net Income
attributable
to non-vested
share awards (142) (4) (392) (37)
Adjusted Net
Income
available to
common
shareholders $6,540 $197 $16,928 $1,769
Weighted
average number
of common
shares, basic 24,430,380 30,213,548 23,302,586 28,104,067
Adjusted
Earnings per
common share,
basic $0.27 $0.01 $0.73 $0.06
-------------- ----- ----- ----- -----
Adjusted Net
Income $7,042 $716 $18,617 $3,352
Less: Cash
payments to
Series B-1
Preferred
Shares (140) - (1,077) -
Less: Cash
payments to
Series C
Preferred
Shares (220) (515) (220) (1,546)
Less: Adjusted
Net Income
attributable
to non-vested
share awards (142) (4) (392) (37)
Plus: Cash
payments to
Series B-1
Preferred
Shares, if
converted to
common shares 140 - 1,077 -
Adjusted Net
Income
available to
common
shareholders $6,680 $197 $18,005 $1,769
Weighted
average number
of common
shares,
diluted 26,039,211 30,213,548 27,491,597 28,104,067
Adjusted
Earnings per
common share,
diluted $0.26 $0.01 $0.65 $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, gain
from debt extinguishment 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, gain
from debt extinguishment 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
(Expressed in thousands of U.S. Dollars, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2013 2014 2013 2014
---- ---- ---- ----
REVENUES:
---------
Time charter revenues (1) $18,258 $11,767 $54,056 $39,149
Commissions (377) (316) (1,110) (980)
---- ---- ------ ----
Net Revenues 17,881 11,451 52,946 38,169
------ ------ ------ ------
EXPENSES:
---------
Voyage expenses 581 409 2,048 1,142
Vessels operating expenses (2) 4,303 4,326 13,341 13,699
Dry-docking expenses - - 1,010 2,314
Management fees charged by a related party 701 718 2,062 2,158
Depreciation 3,815 3,815 11,321 11,321
General and administrative expenses (3) 1,531 1,499 4,541 4,647
Other expenses - 195 - 195
--- --- --- ---
Total Expenses 10,931 10,962 34,323 35,476
------ ------ ------ ------
Operating income 6,950 489 18,623 2,693
----- --- ------ -----
OTHER INCOME / (EXPENSES):
--------------------------
Interest and finance costs (2,054) (1,775) (6,322) (5,463)
Interest income 1 - 3 -
Gain from debt extinguishment - 6,435 - 6,435
Fair value change of warrants - 452 - 1,105
Foreign currency (loss) / gain, net (54) 48 (13) 35
--- --- --- ---
Total other (expenses) / income, net (2,107) 5,160 (6,332) 2,112
------ ----- ------ -----
NET INCOME $4,843 $5,649 $12,291 $4,805
Other Comprehensive Income / (Loss)
-----------------------------------
Unrealized (loss) / gain on cash flow hedges (213) 199 562 150
---- --- --- ---
Total Other Comprehensive Income / (Loss) (213) 199 562 150
---- --- --- ---
COMPREHENSIVE INCOME $4,630 $5,848 $12,853 $4,955
Earnings per common share, basic $0.10 $0.17 $0.37 $0.11
Earnings per common share, diluted $0.10 $0.17 $0.36 $0.11
Footnotes:
----------
(1) includes amortization of below and
above market acquired time
charters of $1,424 and $1,155 for
the three months ended September
30, 2013 and 2014, respectively,
and $4,035 and $3,597 for the
nine months ended September 30,
2013 and 2014, respectively
(2) includes amortization of other
intangible assets of $266 for
each of the three-month periods
ended September 30, 2013 and 2014
and $790 for each of the nine-
month periods ended September 30,
2013 and 2014
(3) includes share-based compensation
of $509 and $533 for the three
months ended September 30, 2013
and 2014, respectively, and
$1,501 and $1,700 for the nine
months ended September 30, 2013
and 2014, respectively
BOX SHIPS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S.
Dollars)
December 31, 2013 September 30, 2014
----------------- ------------------
ASSETS
------
Cash and restricted cash
(current and non-current) $24,512 $18,158
Other current assets 7,189 7,888
Vessels and other fixed assets, net
and other non-current assets 397,905 381,099
Total Assets $429,606 $407,145
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Total debt (1) $179,550 $141,875
Total other liabilities 5,337 6,435
Total stockholders' equity 244,719 258,835
Total Liabilities and
Stockholders' Equity $429,606 $407,145
Footnotes:
----------
(1) Refer to Liquidity
section, above
SOURCE Box Ships Inc.
