DryShips Inc. Reports Financial and Operating Results for the Second Quarter 2016
/EINPresswire.com/ -- ATHENS, GREECE -- (Marketwired) -- 08/08/16 -- DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, an international owner of drybulk carriers and offshore support vessels, today announced its unaudited financial and operating results for the quarter ended June 30, 2016.
Second Quarter 2016 Financial Highlights
- For the second quarter of 2016, the Company reported a net loss of $9.1 million, or $0.34 basic and diluted loss per share.
- The Company reported a negative Adjusted EBITDA of $10.1 million for the second quarter of 2016.(1)
Recent Highlights
- Mr. Anthony Kandylidis, Executive Vice President has assumed the duties of interim Chief Financial Officer as of August 8, 2016.
- As of August 7, 2016, 4,635 of the Company's 5,000 Series C Convertible Preferred stock, were converted to 12,719,431 common shares, including the respective dividends.
- On July 27, 2016, the Company's $103.2 million secured term loan facility dated June 20, 2008, with a total outstanding balance of $18.3 million, became due and payable in full.
- On July 27, 2016, the Company received written notification from The Nasdaq Stock Market ("Nasdaq"), indicating that as the closing bid price of the Company's common stock for the last 30 consecutive business days, was below $1.00 per share, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market, set forth in Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until January 23, 2017. The Company has determined to effect a 1-for-4 reverse stock split, in order to regain compliance with the Nasdaq Capital Market minimum bid price requirement, effective on or about August 15, 2016.
Bank Update / Liquidity
The Company is presently engaged in discussions with its lenders for the restructuring of its debt facilities. Six of these bank facilities have matured and the Company has not made the final balloon installment. For the remaining bank facilities, the Company has elected to suspend principal and interest payments to preserve cash liquidity.
(1) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net loss.
(2) Shares and per share data does not give effect to the 1-for-4 reverse stock split, approved on July 29, 2016, which will become effective on or about August 15, 2016.
Fleet List
The table below describes our fleet profile as of August 8, 2016:
Year Gross rate Redelivery
Built DWT Type Per day Earliest Latest
----- ------ ------- ---------------- ---------- -------
Drybulk fleet
Panamax:
Raraka 2012 76,037 Panamax Spot N/A N/A
Amalfi 2009 75,206 Panamax Spot N/A N/A
Rapallo 2009 75,123 Panamax T/C Index linked Aug-16 Oct-16
Catalina 2005 74,432 Panamax Spot N/A N/A
Majorca 2005 74,477 Panamax Spot N/A N/A
Ligari 2004 75,583 Panamax Spot N/A N/A
Sorrento 2004 76,633 Panamax Spot N/A N/A
Mendocino 2002 76,623 Panamax T/C Index linked Oct-16 Dec-16
Bargara 2002 74,832 Panamax T/C Index linked Sep-16 Nov-16
Oregon 2002 74,204 Panamax Spot N/A N/A
Ecola 2001 73,931 Panamax Spot N/A N/A
Samatan 2001 74,823 Panamax Spot N/A N/A
Sonoma 2001 74,786 Panamax Laid up N/A N/A
Capitola 2001 74,816 Panamax Spot N/A N/A
Levanto 2001 73,925 Panamax T/C Index linked Aug-16 Oct-16
Maganari 2001 75,941 Panamax Laid up N/A N/A
Coronado 2000 75,706 Panamax Spot N/A N/A
Marbella 2000 72,561 Panamax Laid up N/A N/A
Redondo 2000 74,716 Panamax Laid up N/A N/A
Ocean Crystal 1999 73,688 Panamax Laid up N/A N/A
Offshore Supply
fleet
Platform Supply
Vessels:
Crescendo 2012 1,457 PSV Laid up N/A N/A
Vega Corona 2012 1,430 PSV T/C Dec.-16 Dec.-20
Oil Spill Recovery
Vessels:
Indigo 2013 1,393 OSRV Laid up N/A N/A
Vega Jaanca 2012 1,393 OSRV T/C Jul.-17 Jul.-21
Vega Emtoli 2012 1,363 OSRV T/C May.-17 May.-21
Jubilee 2012 1,317 OSRV Laid up N/A N/A
Drybulk Carrier Segment Summary Operating Data (unaudited)
(Dollars in thousands, except average daily results)
Three Months Ended June Six Months Ended June
Drybulk 30, 30,
------------------------ ------------------------
2015 2016 2015 2016
----------- ----------- ----------- -----------
Average number of
vessels(1) 39.0 20.0 39.0 21.5
Total voyage days for
vessels(2) 3,458 1,737 6,864 3,830
Total calendar days for
vessels(3) 3,549 1,820 7,059 3,913
Fleet utilization(4) 97.4% 95.4% 97.2% 97.9%
Time charter
equivalent(5) $ 10,813 $ 3,392 $ 10,675 $ 3,166
Vessel operating
expenses (daily)(6) $ 6,543 $ 4,798 $ 6,450 $ 4,808
(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
days each vessel was a part of our fleet during the period divided by
the number of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of dry-docking and laid-up days.
(3) Calendar days are the total number of days the vessels were in our
possession for the relevant period including dry-docking days and laid-
up days.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or 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 voyage revenues (net of voyage expenses) by voyage days for
the relevant time period. Voyage expenses primarily consist of port,
canal and fuel costs that are unique to a particular voyage and are paid
by the charterer under a time charter contract, as well as commissions.
TCE revenues, a non-U.S. GAAP measure, provides additional meaningful
information in conjunction with revenues from our vessels, the most
directly comparable U.S. GAAP measure, because it assists our management
in making decisions regarding the deployment and use of its vessels and
in evaluating their financial performance. TCE is also a standard
shipping industry performance measure used primarily to compare period-
to-period changes in a shipping company's performance despite changes in
the mix of charter types (i.e., spot charters, time charters and
bareboat charters) under which the vessels may be employed between the
periods. Please see below for a reconciliation of TCE rates to voyage
revenues.
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and
repairs is calculated by dividing vessel operating expenses by fleet
calendar days net of laid-up days for the relevant time period.
(In thousands of U.S. dollars, except for TCE rate, which is expressed in
Dollars, and voyage days)
Three Months Ended June Six Months Ended June
Drybulk 30, 30,
------------------------ ------------------------
2015 2016 2015 2016
----------- ----------- ----------- -----------
Voyage revenues $ 42,239 $ 6,772 $ 87,839 $ 15,223
Voyage expenses (4,847) (880) (14,567) (3,099)
----------- ----------- ----------- -----------
Time charter equivalent
revenues $ 37,392 $ 5,892 $ 73,272 $ 12,124
----------- ----------- ----------- -----------
Total voyage days for
fleet 3,458 1,737 6,864 3,830
Time charter equivalent
TCE $ 10,813 $ 3,392 $ 10,675 $ 3,166
DryShips Inc.
Financial Statements
Unaudited Condensed Consolidated Statements of Operations
(Expressed in Thousands
of U.S. Dollars except
for share and per share Three Months Ended June Six Months Ended June
data) 30, 30,
------------------------ ------------------------
2015 2016 2015 2016
----------- ----------- ----------- -----------
REVENUES:
Voyage revenues $ 79,460 $ 13,177 $ 169,488 $ 25,037
Revenues from drilling
contracts 323,722 - 725,805 -
----------- ----------- ----------- -----------
403,182 13,177 895,293 25,037
EXPENSES:
Voyage expenses 20,503 1,077 48,605 3,998
Vessel operating
expenses 29,550 12,725 57,750 27,513
Drilling units operating
expenses 106,696 - 259,623 -
Depreciation and
amortization 90,840 861 209,536 1,723
Vessels impairment, loss
on sales and other 112,178 - 168,809 40,784
General and
administrative expenses 31,519 8,133 74,807 18,023
Other, net (2,173) 756 (2,803) (761)
----------- ----------- ----------- -----------
Operating income/(loss) 14,069 (10,375) 78,966 (66,243)
OTHER INCOME /
(EXPENSES):
Interest and finance
costs, net of interest
income (69,860) (2,051) (146,348) (5,346)
Loss on interest rate
swaps (1,768) (152) (11,448) (709)
Other, net (4,506) (771) (6,435) (2,152)
Income taxes (17,341) (19) (36,931) (19)
----------- ----------- ----------- -----------
Total other expenses,
net (93,475) (2,993) (201,162) (8,226)
----------- ----------- ----------- -----------
Net loss (79,406) (13,368) (122,196) (74,469)
Loss due to
deconsolidation of
Ocean Rig (1,347,106) - (1,347,106) -
Equity in
earnings/(losses) of
Ocean Rig 8,851 4,260 8,851 (41,454)
Net income attributable
to Non controlling
interests (22,662) - (39,029) -
----------- ----------- ----------- -----------
Net loss attributable to
DryShips Inc. $(1,440,323) $ (9,108) $(1,449,480) $ (115,923)
=========== =========== =========== ===========
Net loss attributable to
DryShips Inc. common
stockholders (1,440,515) (9,164) (1,499,745) (115,979)
=========== =========== =========== ===========
Loss per common share,
basic and diluted
(1)(2) $ (54.17) $ (0.34) $ (56.40) $ (4.33)
Weighted average number
of shares, basic and
diluted (1) (2) 26,593,240 26,827,839 26,593,240 26,758,843
(1) Shares and per share data for Q2 2015 give effect to the 1-for-25
reverse stock split, approved on February 19, 2016.
(2) Shares and per share data does not give effect to the 1-for-4 reverse
stock split, approved on July 29, 2016, which will become effective on
or about August 15, 2016.
DryShips Inc.
Unaudited Condensed Consolidated Balance Sheets
December 31, June 30,
(Expressed in Thousands of U.S. Dollars) 2015 2016
------------- -----------
ASSETS
Cash, cash equivalents, including restricted
cash (current and non-current) $ 15,026 $ 6,173
Assets held for sale 216,026 97,515
Other current assets 38,015 28,950
Vessels, net 96,428 94,705
Investment in affiliate 91,410 -
Other non-current assets 19,147 10,214
------------- -----------
Total assets 476,052 237,557
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total debt 236,942 224,766
Liabilities held for sale 104,366 -
Total other liabilities 13,332 9,384
Total stockholders' equity 121,412 3,407
------------- -----------
Total liabilities and stockholders' equity $ 476,052 $ 237,557
============= ===========
Adjusted EBITDA Reconciliation
Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, goodwill, vessel and investment impairments and certain other non-cash items as described below, dry-dockings, class survey costs and gains or losses on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by our lenders as a measure of our compliance with certain covenants contained in our loan agreements and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.
The following table reconciles net loss to Adjusted EBITDA:
Three Three
Months Months Six Months Six Months
Ended June Ended June Ended June Ended June
(Dollars in thousands) 30, 2015 30, 2016 30, 2015 30, 2016
----------- ----------- ----------- -----------
Net loss attributable to
Dryships Inc $(1,440,323) $ (9,108) $(1,499,480) $ (115,923)
Add: Net interest
expense 69,860 2,051 146,348 5,346
Add: Depreciation and
amortization 90,840 861 209,536 1,723
Add: Dry-dockings and
class survey costs 4,412 150 8,249 167
Add: Impairments losses
on sales and other 129,771 - 192,039 40,784
Add: Loss due to
deconsolidation of
Ocean Rig 1,347,106 - 1,347,106 -
Add: Income taxes 17,341 19 36,931 19
Add: Loss on interest
rate swaps 1,768 152 11,448 709
Add: Equity in
(earnings)/losses of
affiliate (8,851) (4,260) (8,851) 41,454
Add: Net income
attributable to Non
controlling interests 22,662 - 39,029 -
----------- ----------- ----------- -----------
Adjusted EBITDA $ 234,586 $ (10,135) $ 482,355 $ (25,721)
=========== =========== =========== ===========
About DryShips Inc.
DryShips Inc. is an owner of drybulk carriers and offshore support vessels that operate worldwide. DryShips owns a fleet of 20 Panamax drybulk carriers with a combined deadweight tonnage of approximately 1.5 million tons, and 6 offshore supply vessels, comprising 2 platform supply and 4 oil spill recovery vessels.
DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."
Visit the Company's website at www.dryships.com
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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 such safe harbor legislation.
Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies and other statements.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, 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 it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in the Company's 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 changes in charter rates and vessel values, failure of a seller to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, inability to procure acquisition financing, default by one or more charterers of our ships, changes in demand for drybulk commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydocking, changes in our voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in our relationships with the lenders under our debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by DryShips Inc. with the U.S. Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F.
Investor Relations / Media:
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com
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