BOX SHIPS INC 
By ATHENS, Greece, Nov. 7, 2013 /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, 2013.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
Financial
Highlights 2012 2013 2012 2013
(Expressed in
United States
Dollars)
--------------
Time charter
revenues $17,738,239 $18,258,298 $49,262,388 $54,055,720
Amortization of
above/below
market time
charters 1,304,665 1,423,481 2,321,611 4,035,194
--------------- --------- --------- --------- ---------
Time charter
revenues,
adjusted(1) $19,042,904 $19,681,779 $51,583,999 $58,090,914
------------ ----------- ----------- ----------- -----------
EBITDA(2) $10,076,468 $10,710,774 $27,427,074 $29,930,936
Adjusted EBITDA(2) $11,933,063 $12,909,770 $30,858,954 $36,256,926
Net Income $3,654,227 $4,842,645 $10,302,601 $12,291,503
Adjusted Net
Income(2) $5,510,822 $7,041,641 $13,734,481 $18,617,493
Earnings per common
share (EPS), basic $0.07 $0.10 $0.44 $0.37
Earnings per common
share (EPS),
diluted $0.07 $0.10 $0.44 $0.36
Adjusted Earnings
per common share,
basic(2) $0.25 $0.27 $0.74 $0.73
Adjusted Earnings
per common share,
diluted(2) $0.23 $0.26 $0.72 $0.65
------------------ ----- ----- ----- -----
(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 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:
"The third quarter was our tenth consecutive profitable quarter as a public company, and our revenues, EBITDA and net income were all higher than a year ago. In addition, the Company has taken steps to reduce its debt burden and increase its financial flexibility by retiring all of its unsecured debt before its maturity in early next year. However, the Board of Directors had to make a prudent but difficult decision to reduce the dividend to $0.06 per share this quarter to preserve our liquidity, as the containership market has not shown any signs of a rebound and asset values remain at historically low levels. We believe this reduction is necessary as we have secured for 2014 under our existing charter contracts only 48% of our fleet capacity, and the continued weakness in the containership market has resulted in time charter rates remaining well below the rates our vessels currently earn. The Board of Directors will evaluate market conditions at regular intervals to consider a potential increase of the dividend to prior levels, and we remain committed to our policy of paying out our excess free cash flow in the form of dividends despite the very challenging market conditions we are facing."
Results of Operations
Three months ended September 30, 2013 compared to three months ended September 30, 2012
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 were $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 were $10.7 million and $12.9 million, respectively.
During the third quarter of 2012, we operated an average of 8.96 vessels. Our Net Income and Adjusted Net Income during the third quarter of 2012 were $3.7 million and $5.5 million, respectively, resulting in basic earnings per share of $0.07 and basic adjusted earnings per share of $0.25. EBITDA and Adjusted EBITDA for the third quarter of 2012 were $10.1 million and $11.9 million, respectively.
Net revenues
Net revenues represent charter hire earned, net of commissions. During the third quarter of 2013 and 2012, our vessels operated a total of 828 and 703 days, respectively, from a total of 828 and 824 calendar days, respectively. Currently, all vessels in our fleet are employed under fixed rate time charters, having an average weighted remaining charter duration of 13 months (weighted by aggregate contracted charter hire). The Company reported net revenues for the third quarter of 2013 of $17.9 million, which increased by 3% compared to $17.4 million in the third quarter of 2012, mainly due to the idle days of Box Trader and Box Voyager in the third quarter of 2012. 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 2013 and 2012 by $1.4 million and $1.3 million, respectively, or $0.06 and $0.07 per common share, respectively. Our average time charter equivalent rate, or TCE rate, for the third quarter of 2013 was $20,894 per vessel per day, which was 11% below our TCE rate of $23,364 per vessel per day during the third quarter of 2012, due to the lower rates achieved on re-chartering the Box Voyager, which was partially offset by the higher voyage expenses incurred during the third quarter of 2012. Our adjusted TCE rate was $22,613 per vessel per day in the third quarter of 2013, 10% lower than our adjusted TCE of $25,220 for the third quarter of 2012, for the same reasons outlined above. 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 2013 and 2012 amounted to $0.6 million and $1.0 million, respectively, and mainly relate to war risk insurance costs and other crew costs reimbursable by the charterers. Voyage expenses for the third quarter of 2012 include approximately $0.3 million relating to bunkers consumed by Box Trader and Box Voyager during the periods the vessels were unemployed.
Vessels operating expenses
Vessels operating expenses comprise crew wages and related costs, insurance and vessel registry costs, repairs and maintenance expenses (excluding dry-docking expenses), the cost of spares and consumable stores, regulatory fees, non-cash amortization of other intangible assets and other miscellaneous expenses. The amortization of other intangible assets for each of the third quarters of 2013 and 2012 amounted to $0.3 million. During the third quarter of 2013, vessels operating expenses including the amortization of other intangible assets amounted to $4.3 million, or $4.0 million on an adjusted basis to exclude the amortization of other intangible assets, compared to $4.5 million, or $4.2 million on an adjusted basis, during the third quarter of 2012. On average, our vessels operating expenses for the third quarter of 2013 were $5,197 per vessel per day, or $4,876 per vessel per day on an adjusted basis, compared to $5,486 per vessel per day, or $5,159 per vessel per day on an adjusted basis, in the third quarter of 2012, an improvement of approximately 5% period over period on a cash basis after adjusting for non-cash items.
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 2013 and 2012 were $0.7 million, or $847 (EUR643.77) per vessel per day and $790 (EUR634.88) per vessel per day, for the third quarter of 2013 and 2012, 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 the third quarter of 2013 and 2012 was $3.8 million and $4.1 million, respectively. Effective January 1, 2013, the Company revised its scrap rate estimate prospectively from $150 to $300 per lightweight ton. The change in accounting estimate does not have a retrospective effect in the financial statements previously reported. The effect of this change was to decrease depreciation expense and to increase net income by approximately $0.3 million, or $0.01 per basic common share for the three months ended September 30, 2013.
General and administrative expenses
General and administrative ("G&A") expenses for the third quarter of 2013 and 2012 were $1.5 million and $1.2 million, or $1,849 and $1,409 per vessel per day, respectively. The increase in G&A expenses period over period was due primarily to increased financial reporting fees and executive services fees paid to our Manager and increased share-based compensation expense. During the third quarter of 2013 and 2012, expenses related to the provision of our executive services by our Manager amounted to $0.55 million and $0.45 million, respectively, and share-based compensation amounted to $0.5 million and $0.3 million, respectively.
Interest and finance costs
Interest and finance costs amounted to $2.1 million and $2.3 million for the third quarters of 2013 and 2012, 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 United
States Dollars)
Nine Months Ended
September 30,
------------------
2012 2013
---- ----
Net cash from Operating
Activities $22,025,461 $30,351,827
Net cash used in
Investing Activities (62,419,281) -
Net cash from /(used
in) Financing
Activities 41,783,684 (25,155,839)
---------- -----------
Net increase in cash
and cash equivalents $1,389,864 $5,195,988
========== ==========
Net cash from Operating Activities
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 relates to the payment of interest on our bank loans and our related party loan with Paragon Shipping Inc. ("Paragon Shipping").
Net cash from Operating Activities for the nine months ended September 30, 2012 was $22.0 million. Our vessels generated positive cash flows from revenues, net of commissions, of $49.9 million, while we paid $27.9 million for expenses, of which $5.2 million relates to the payment of interest on our bank loans and our related party loan with Paragon Shipping.
Net cash used in Investing Activities
For the nine months ended September 30, 2013, there was no cash used in investing activities. Net cash used in Investing Activities for the nine months ended September 30, 2012, was $62.4 million, relating to the acquisition of OOCL Hong Kong and OOCL China, including attached intangibles.
Net cash from / (used in) Financing Activities
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 and paid dividends to our preferred and common shareholders of $1.5 million and $11.5 million, in the aggregate, respectively.
Net cash from Financing Activities for the nine months ended September 30, 2012, was $41.8 million. Included in the $41.8 million is the proceeds from the issuance of 1,333,333 units, each unit consisting of one 9.75% Series B Cumulative Redeemable Perpetual Preferred Share (the "Series B Preferred Shares") and one warrant to purchase one of our common shares, which amounted to $38.4 million in the aggregate, net of related costs of $0.1 million, together with the drawdown of $24.7 million under a secured loan agreement, net of financing fees of $0.3 million, which were used to finance the acquisition of OOCL Hong Kong and OOCL China. On July 18, 2012, we completed the public offering and issuance of 4,285,715 of our common shares, resulting in net proceeds of $28.2 million, net of underwriting discounts, commissions and other offering costs of $1.8 million in the aggregate. We used a portion of the net proceeds of the public offering to redeem 692,641 of the Series B Preferred Shares at a price equal to the liquidation preference of $30.00 per share, or $20.8 million in the aggregate. During the nine months ended September 30, 2012, we repaid $13.3 million of our debt and paid dividends to our preferred and common shareholders of $0.3 million and $15.1 million, respectively.
Liquidity:
As of September 30, 2013, our cash and restricted cash (current and non-current) amounted to $22.3 million in the aggregate, of which $10.0 million is considered restricted for minimum liquidity purposes under our loan agreements. As of September 30, 2013, we had total outstanding indebtedness of $191.2 million, of which $28.7 million is scheduled to be repaid in the forthcoming 12-month period, of which $10.0 million has already been repaid as of November 7, 2013, which includes the $6.0 million prepayment to Paragon Shipping, as discussed below. Furthermore, as of September 30, 2013, we were in compliance with all of the covenants contained in our loan agreements, as amended. 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.
Recent Developments:
Follow-On Preferred Stock Offering:
On October 9, 2013, we completed a follow-on public offering of 340,000 of our Series C Preferred Shares at a public offering price of $24.00 per share, which resulted in net proceeds of $7.5 million, net of underwriting discounts and commissions of $0.5 million and estimated offering expenses of $0.2 million.
Dividends on the 340,000 newly issued Series C Preferred Shares accrue and are cumulative from the dividend payment date of the previously issued Series C Preferred Shares immediately preceding their date of issuance and will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing January 1, 2014, when, as and if declared by our board of directors. Dividends are payable at a rate equal to 9.00% per annum of the liquidation preference of $25.00 per share.
Loan with Paragon Shipping:
On October 18, 2013, we repaid in full, out of the net proceeds of the follow-on preferred stock offering, the outstanding balance plus accrued interest of $6.1 million to Paragon Shipping under our unsecured loan agreement.
Dividends:
On November 7, 2013, our Board of Directors declared a dividend of $0.06 per common share, with respect to the third quarter of 2013, payable on or about November 28, 2013, to common shareholders of record as of the close of business on November 21, 2013. This is our tenth consecutive quarterly dividend to common shareholders since we became a public company in April 2011.
On October 1, 2013, we paid our first dividend of $0.2 million with respect to our Series C Preferred Shares, for the period from the original issuance of the Series C Preferred Shares on July 29, 2013 through September 30, 2013. As of September 30, 2013, 558,333 Series C Preferred Shares were outstanding.
The declaration and payment of any dividend on our common shares will be determined at the sole discretion of our Board of Directors. We cannot assure you that we will pay dividends in the amounts stated above or at all, and our ability to pay dividends will be subject to the rights of holders of our Series C Preferred Shares, which accrue dividends cumulatively at a rate of 9.00% per annum per $25.00 stated liquidation preference per Series C Preferred Share and are payable on January 1, April 1, July 1 and October 1 of each year, 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 September 2013, Box Trader extended its time charter with Hapag Lloyd for an additional period of 5 to 7 months, commencing on October 22, 2013, at a gross daily charter rate of $8,000. The charterer has the option to extend the term of the charter by an additional period of 6 months, plus or minus 30 days, at a gross daily charter rate of $15,500.
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. Based on the earliest redelivery dates, the Company has secured under such contracts 94% and 48% of its fleet capacity for the remainder of 2013 and 2014, 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 November 7, 2013.
Vessel Year Built TEU Charterer Daily Gross
Charter Rate (7) Charter Expiration Notes
------ ---------- --- --------- ---------------- ------------------ -----
Box Voyager 2010 3,426 CNC $6,850 March 2014 1
Box Trader 2010 3,426 Hapag Lloyd $8,000 April 2014 2
CMA CGM Kingfish 2007 5,095 CMA CGM $23,000 April 2014 3
CMA CGM Marlin 2007 5,095 CMA CGM $23,000 May 2014 3
Maersk Diadema 2006 4,546 Maersk $28,000 December 2013 4
Maule 2010 6,589 CSAV Valparaiso $38,000 May 2016 5
MSC Emma 2004 5,060 MSC $28,500 August 2014 6
OOCL Hong Kong 1995 5,344 OOCL $26,800 June 2015 8
OOCL China 1996 5,344 OOCL $26,800 July 2015 8
---------- -----
Total 43,925
------
Notes:
------
1) The
employment
is for a
period of
six to 14
months
and
commenced
in
January
2013.
2) The
employment
is for a
period of
five to
seven
months
and
commenced
in
October
2013. The
charterer
has the
option to
extend
the term
of the
charter
by an
additional
period of
six
months,
plus or
minus 30
days,
commencing
in April
2014, at
a gross
daily
charter
rate of
$15,500.
3) The
charterer
has the
option to
increase
or
decrease
the term
of the
charter
by 45
days.
4) Indicates
date the
vessel is
expected
to be
redelivered.
5) 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.
6) The
charterer
has the
option to
increase
or
decrease
the term
of the
charter
by 30
days. The
charterer
also has
the
option to
extend
the term
of the
charter
by an
additional
one-year
term at
the same
gross
daily
charter
rate.
7) Daily
gross
charter
rates do
not
reflect
commissions
payable
by us to
third
party
chartering
brokers
and our
Manager,
totaling
4.75% for
Box
Voyager,
1.25% for
each of
CMA CGM
Kingfish,
CMA CGM
Marlin,
OOCL Hong
Kong and
OOCL
China,
and 2.5%
for each
of the
other
vessels
in our
fleet,
including,
in each
case,
1.25% to
Allseas.
8) 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, 2013 results on November 8, 2013 at 9:00 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 10036516.
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 8.8 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 Statement
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 INFORMATION Three Months Nine Months
Ended Ended
September 30, September 30,
------------------------- ------------- -------------
2012 2013 2012 2013
------------------------- ---- ---- ----
FLEET DATA
----------
Average number of vessels (1) 8.96 9.00 7.68 9.00
Calendar days for fleet (2) 824 828 2,104 2,457
Less:
Scheduled off-hire - - 44 19
Unscheduled off-hire 121 - 127 13
Operating days for fleet (3) 703 828 1,933 2,425
Fleet utilization (4) 85.3% 100.0% 91.9% 98.7%
AVERAGE DAILY RESULTS
(Expressed in United States Dollars)
-----------------------------------
Time charter equivalent (5) $23,364 $20,894 $23,964 $20,989
Vessel operating expenses (6) $5,486 $5,197 $5,429 $5,430
Management fees charged by a
related party (7) $790 $847 $803 $839
General and administrative
expenses (8) $1,409 $1,849 $1,787 $1,848
Total vessel operating expenses
(9) $7,685 $7,893 $8,019 $8,117
------------------------------- ------ ------ ------ ------
(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
consistent with industry
standards and 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. 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 Nine Months Ended
Reconciliation September 30, September 30,
(Expressed in United States
Dollars)
---------------------------
2012 2013 2012 2013
---- ---- ---- ----
Time Charter Revenues $17,738,239 $18,258,298 $49,262,388 $54,055,720
Commissions (359,460) (376,520) (1,061,756) (1,110,117)
Voyage Expenses (953,739) (581,318) (1,877,293) (2,047,897)
Total Revenue, net of voyage
expenses $16,425,040 $17,300,460 $46,323,339 $50,897,706
---------------------------- ----------- ----------- ----------- -----------
Plus: Amortization of above/
below market time charters 1,304,665 1,423,481 2,321,611 4,035,194
---------------------------- --------- --------- --------- ---------
Total Revenue, net of voyage
expenses, adjusted $17,729,705 $18,723,941 $48,644,950 $54,932,900
---------------------------- ----------- ----------- ----------- -----------
Total operating days 703 828 1,933 2,425
-------------------- --- --- ----- -----
Time Charter Equivalent $23,364 $20,894 $23,964 $20,989
----------------------- ------- ------- ------- -------
Time Charter Equivalent,
adjusted(10) $25,220 $22,613 $25,166 $22,653
------------------------ ------- ------- ------- -------
(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
(Expressed in United States Dollars, except for share data)
Net Income / Three Months Ended Nine Months Ended
Adjusted Net September 30, September 30,
Income(1)
------------ ------------------- ------------------
2012 2013 2012 2013
---- ---- ---- ----
Net Income $3,654,227 $4,842,645 $10,302,601 $12,291,503
Plus:
Amortization
of
intangibles 1,574,160 1,689,736 2,591,106 4,825,277
Plus: Share-
based
compensation 282,435 509,260 840,774 1,500,713
------------- ------- ------- ------- ---------
Adjusted Net
Income $5,510,822 $7,041,641 $13,734,481 $18,617,493
------------ ---------- ---------- ----------- -----------
EBITDA / Adjusted EBITDA(1)
---------------------------
Net income $3,654,227 $4,842,645 $10,302,601 $12,291,503
Plus: Net
Interest
expense 2,275,390 2,053,054 6,261,852 6,318,611
Plus:
Depreciation 4,146,851 3,815,075 10,862,621 11,320,822
------------- --------- --------- ---------- ----------
EBITDA $10,076,468 $10,710,774 $27,427,074 $29,930,936
------ ----------- ----------- ----------- -----------
Plus:
Amortization
of
intangibles 1,574,160 1,689,736 2,591,106 4,825,277
Plus: Share-
based
compensation 282,435 509,260 840,774 1,500,713
------------- ------- ------- ------- ---------
Adjusted
EBITDA $11,933,063 $12,909,770 $30,858,954 $36,256,926
-------- ----------- ----------- ----------- -----------
Earnings per Common Share Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------ -----------------
2012 2013 2012 2013
---- ---- ---- ----
Net income $3,654,227 $4,842,645 $10,302,601 $12,291,503
Less: Dividends to Series B-1
Preferred Shares (564,177) (140,078) (770,010) (1,077,090)
Less: Dividends to Series C
Preferred Shares - (219,844) - (219,844)
Less: Redemption of Series B-
1 Preferred Shares (1,762,511) (2,062,788) (1,762,511) (2,062,788)
Less: Net income attributable
to non-vested share awards (19,424) (51,416) (135,062) (202,417)
Net income available to common
shareholders $1,308,115 $2,368,519 $7,635,018 $8,729,364
Weighted average number of
common shares, basic 19,529,788 24,430,380 17,194,775 23,302,586
Earnings per common share,
basic $0.07 $0.10 $0.44 $0.37
-------------------------- ----- ----- ----- -----
Net income $3,654,227 $4,842,645 $10,302,601 $12,291,503
Less: Dividends to Series B-1
Preferred Shares (564,177) (140,078) (770,010) (1,077,090)
Less: Dividends to Series C
Preferred Shares - (219,844) - (219,844)
Less: Redemption of Series B-
1 Preferred Shares (1,762,511) (2,062,788) (1,762,511) (2,062,788)
Less: Net income attributable
to non-vested share awards (19,424) (51,416) (135,062) (202,417)
Plus: Dividends to Series B-1
Preferred Shares, if
converted to common shares - 140,078 385,216 1,077,090
Net income available to common
shareholders $1,308,115 $2,508,597 $8,020,234 $9,806,454
Weighted average number of
common shares, diluted 19,529,788 26,039,211 18,185,962 27,491,597
Earnings per common share,
diluted $0.07 $0.10 $0.44 $0.36
-------------------------- ----- ----- ----- -----
Adjusted Earnings per Common Three Months Ended Nine Months Ended
Share(1) September 30, September 30,
---------------------------- ------------------ -----------------
2012 2013 2012 2013
---- ---- ---- ----
Adjusted Net income $5,510,822 $7,041,641 $13,734,481 $18,617,493
Less: Dividends to Series B-1
Preferred Shares (564,177) (140,078) (770,010) (1,077,090)
Less: Dividends to Series C
Preferred Shares - (219,844) - (219,844)
Less: Adjusted Net income
attributable to non-vested
share awards (72,379) (141,965) (225,352) (392,528)
Adjusted Net income available
to common shareholders $4,874,266 $6,539,754 $12,739,119 $16,928,031
Weighted average number of
common shares, basic 19,529,788 24,430,380 17,194,775 23,302,586
Adjusted Earnings per common
share, basic $0.25 $0.27 $0.74 $0.73
---------------------------- ----- ----- ----- -----
Adjusted Net income $5,510,822 $7,041,641 $13,734,481 $18,617,493
Less: Dividends to Series B-1
Preferred Shares (564,177) (140,078) (770,010) (1,077,090)
Less: Dividends to Series C
Preferred Shares - (219,844) - (219,844)
Less: Adjusted Net income
attributable to non-vested
share awards (72,379) (141,965) (225,352) (392,528)
Plus: Dividends to Series B-1
Preferred Shares, if
converted to common shares 385,216 140,078 385,216 1,077,090
Adjusted Net income available
to common shareholders $5,259,482 $6,679,832 $13,124,335 $18,005,121
Weighted average number of
common shares, diluted 22,481,802 26,039,211 18,185,962 27,491,597
Adjusted Earnings per common
share, diluted $0.23 $0.26 $0.72 $0.65
---------------------------- ----- ----- ----- -----
(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 and share-based
compensation to derive
Adjusted EBITDA because the
Company believes that these
adjustments provide
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
and share-based compensation
from net income to derive to
Adjusted Net Income and
Adjusted EPS. The impact of
the redemption of preferred
shares has been excluded from
Adjusted Net Income available
to common shareholders for
the calculation of Adjusted
EPS due to the one-time
nature of this redemption.
The Company believes that
Adjusted Net Income and
Adjusted EPS provide
additional information on the
fleet operational results
which may be useful to
investors.
EBITDA, Adjusted EBITDA,
Adjusted Net Income and
Adjusted EPS are items not
recognized by U.S. GAAP and
should not be considered as
an alternative to net income,
operating income 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 and
Adjusted EPS 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 United States Dollars)
Three Months Ended Nine Months Ended
September 30,
September 30,
-------------
2012 2013 2012 2013
---- ---- ---- ----
REVENUES:
---------
Time charter revenues (1) 17,738,239 18,258,298 49,262,388 54,055,720
Commissions (359,460) (376,520) (1,061,756) (1,110,117)
-------- -------- ---------- ----------
Net Revenues 17,378,779 17,881,778 48,200,632 52,945,603
---------- ---------- ---------- ----------
EXPENSES:
---------
Voyage expenses 953,739 581,318 1,877,293 2,047,897
Vessels operating expenses (2) 4,520,710 4,303,387 11,423,326 13,340,457
Dry-docking expenses - - 2,006,176 1,010,230
Management fees charged by a related party 650,987 701,331 1,689,573 2,061,843
Depreciation 4,146,851 3,815,075 10,862,621 11,320,822
General and administrative expenses (3) 1,161,012 1,530,820 3,759,719 4,541,414
--------- --------- --------- ---------
Operating income 5,945,480 6,949,847 16,581,924 18,622,940
--------- --------- ---------- ----------
OTHER INCOME (EXPENSES):
------------------------
Interest and finance costs (2,278,609) (2,053,795) (6,276,559) (6,322,313)
Interest income 3,219 741 14,707 3,702
Foreign currency loss, net (15,863) (54,148) (17,471) (12,826)
------- ------- ------- -------
Total other expenses, net (2,291,253) (2,107,202) (6,279,323) (6,331,437)
---------- ---------- ---------- ----------
NET INCOME 3,654,227 4,842,645 10,302,601 12,291,503
========= ========= ========== ==========
Other Comprehensive (Loss) / Income
-----------------------------------
Unrealized (loss) / gain on cash flow hedges (541,359) (212,945) (758,166) 561,901
-------- -------- -------- -------
Total Other Comprehensive (Loss) / Income (541,359) (212,945) (758,166) 561,901
-------- -------- -------- -------
COMPREHENSIVE INCOME 3,112,868 4,629,700 9,544,435 12,853,404
========= ========= ========= ==========
Earnings per common share, basic $0.07 $0.10 $0.44 $0.37
Earnings per common share, diluted $0.07 $0.10 $0.44 $0.36
Footnotes:
----------
(1) includes amortization of below
and above market acquired
time charters of $1,304,665
and $1,423,481 for the three
months ended September 30,
2012 and 2013, respectively,
and $2,321,611 and $4,035,194
for the nine months ended
September 30, 2012 and 2013,
respectively
(2) includes amortization of other
intangible assets of $269,495
and $266,255 for the three
months ended September 30,
2012 and 2013, respectively,
and $269,495 and $790,083 for
the nine months ended
September 30, 2012 and 2013,
respectively
(3) includes share-based
compensation of $282,435 and
$509,260 for the three months
ended September 30, 2012 and
2013, respectively, and
$840,774 and $1,500,713 for
the nine months ended
September 30, 2012 and 2013,
respectively
BOX SHIPS
INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
(Expressed
in United
States
Dollars)
December 31, 2012 September 30, 2013
----------------- ------------------
ASSETS
------
Cash and
restricted
cash
(current
and non-
current) 17,141,452 22,337,440
Other
current
assets 6,696,714 8,049,521
Vessels and
other fixed
assets, net
and other
non-
current
assets 421,225,703 404,107,236
Total Assets 445,063,869 434,494,197
=========== ===========
LIABILITIES
AND
STOCKHOLDERS'
EQUITY
--------------
Current
portion of
long-term
debt 36,700,000 28,700,000
Other
current
liabilities 5,959,883 7,242,303
Long-term
debt, net
of current
portion 179,550,000 162,525,000
Other non-
current
liabilities 2,074,703 797,938
Total
stockholders'
equity 220,779,283 235,228,956
Total
Liabilities
and
Stockholders'
Equity 445,063,869 434,494,197
=========== ===========
SOURCE Box Ships Inc.
