Scorpio Bulkers Inc. Announces Financial Results for the Third Quarter of 2017 and Initiates a Quarterly Dividend

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GlobeNewswire 23-Oct-2017 7:25 AM
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MONACO, Oct. 23, 2017 (GLOBE NEWSWIRE) -- Scorpio Bulkers Inc. (NYSE:SALT) (Scorpio Bulkers, or the Company), today reported its results for the three and nine months ended September30, 2017. The Companys Board of Directors declared a quarterly cash dividend of $0.02 per share.
Emanuele Lauro, the Companys Chairman and CEO, commented, We are pleased with the steady quarter-on-quarter improvements in the rate environment and the resulting positive cash flow generated from operations. We believe that current market rates are sustainable and will continue to improve through 2018. As a result, we are excited to initiate a quarterly dividend, which is a reflection of our confidence in our Companys financial strength and cash flow generation and the markets in which we operate.
Results for the Three and Nine Months Ended September30, 2017 and 2016
For the third quarter of 2017 the Companys GAAP net loss was $10.7 million, or $0.15 loss per diluted share. For the same period in 2016 the Companys GAAP net loss was $21.3 million, or $0.30 loss per diluted share. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarters of 2017 and 2016 were $12.4 million and a loss of $1.3 million, respectively (see Non-GAAP Financial Measures below).
For the nine months ended September30, 2017, the Companys GAAP net loss was $58.7 million, or $0.82 loss per diluted share compared to a GAAP net loss of$104.3 million, or$2.05loss per diluted share for the prior year period. EBITDA for the nine months ended September 30, 2017 and 2016 were $12.3 million and a loss of $46.6 million, respectively (see Non-GAAP Financial Measures below).
For the nine months ended September30, 2017, the Companys adjusted net loss was $40.5 million, or $0.56 adjusted loss per diluted share, which excludes the impact of a write down of assets held for sale of $17.7 million and a write off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million. For thenine months endedSeptember30, 2016, the Companys adjusted net loss was$79.4 million, or$1.56adjusted loss per diluted share, which excludes a loss/write off of vessels and assets held for sale of$12.4 million, the write off of deferred financing costs on credit facilities that will no longer be used of$2.5 millionand a charterhire contract termination fee of $10.0 million. Adjusted EBITDA for the nine months ended September 30, 2017 and 2016 were $30.0 million and a loss of $24.2 million, respectively (see Non-GAAP Financial Measures below).
Initiation of a Quarterly Dividend
Today the Companys Board of Directors declared the Companys first quarterly cash dividend of $0.02 per share, payable on or about December 15, 2017 to all shareholders as of November 15, 2017 (the record date).
As of October 23, 2017, 75,459,344 shares were outstanding.
Cash and Liquidity Overview
As of October20, 2017, the Company had approximately $48.8 million in cash and cash equivalents. In addition, the Company had approximately $79.0 million freely available to draw down under the existing $409 Million Credit Facility.
TCE Revenue
TCE Revenue Earned during the third Quarter of 2017
Our Kamsarmax fleet earned $9,211 per day
Our Ultramax fleet earned $8,949 per day
Voyages Fixed thus far for the fourth Quarter of 2017
Kamsarmax fleet: approximately $11,180 per day for 52% of the days
Ultramax fleet: approximately $10,495 per day for 53% of the days
Recent Significant Events
Vessels Acquisition
During the third quarter of 2017, the Company entered into an agreement with an unaffiliated third party to acquire six Chinese built Ultramax dry bulk vessels for$142.5 millionin the aggregate. Three of the vessels were built in 2015, one was built in 2016, and two were built in 2017.
As of October 20, 2017, the Company paid a 10% deposit, which will be held in escrow until each vessel is delivered. The acquisition, including the delivery of the vessels and payment of the remaining $128.3 million, is expected to occur in December 2017.
$85.5 Million Credit Facility
The Company has received a commitment for a loan facility of up to $85.5 million from Nordea Bank AB, New York Branch, and Skandinaviska Enskilda Banken AB (publ). The loan facility will be used to finance up to 60% of the market value of the six Ultramax vessels that the Company has recently agreed to acquire. The loan facility has a final maturity date of February 15, 2023 and bears interest at LIBOR plus a margin of 2.85% per annum. The terms and conditions are similar to those set forth in the Company's existing credit facilities. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.
$19.6 Million Japanese Lease Financing
In October 2017, the Company entered into a financing transaction in respect of one of the Companys Kamsarmax vessels with unaffiliated third parties in Japan. The cost of the financing is equivalent to an expected fixed interest rate of 4.24% for 10 years. If converted to floating interest rates, based on the expected weighted average life of the transaction and swap rates (as of October 18, 2017), the equivalent margin at current swap rates would be LIBOR plus 2.07%.
The transaction involves the sale and leaseback of the SBI Rumba, a 2015 Japanese built Kamsarmax dry bulk vessel, for consideration of approximately $19.6 million. As part of the transaction, the Company entered into a 9.5 year bareboat charter agreement with the buyers, with the Companys option to extend for a further six months. The agreement also provides the Company with options to repurchase the vessel beginning on the fifth anniversary of the sale and until the end of the agreement. This transaction, which shall be treated as a financial lease for accounting purposes, increases the Companys liquidity by approximately $6.0 million, net of commissions and after repayment of the vessels existing loan.
Share Repurchase Program
The Board of Directors has authorized the repurchase of up to$50.0 millionof the Companys common stock in open market or privately negotiated transactions. The specific timing and amounts of the repurchases will be in the sole discretion of management and may vary based on market conditions and other factors, but the Company is not obligated under the terms of the program to repurchase any of its common stock. The authorization has no expiration date.
As of October 20, 2017, no shares have been repurchased under the authorization.
Agreement to Time Charter-In One Ultramax Vessel
During the third quarter of 2017, Ocean Phoenix Tree, which the Company agreed to time charter-in during the second quarter of 2017, was delivered to it. The vessel was time chartered-in at approximately$10,125per day for two years and can be extended for an additional year at approximately$10,885per day at the Companys option.
Debt Overview
The Companys outstanding debt balance, gross of unamortized deferred financing costs as of September30, 2017 and October20, 2017, as well as the amount available to draw or committed as of October 20, 2017, are as follows (dollars in thousands).
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As ofSeptember 30,2017 As of October 20, 2017
Credit Facility AmountOutstanding AmountOutstanding AmountAvailable/Committed
Senior Notes $ 73,625 $ 73,625 $
$409 Million Credit Facility 96,468 96,468 78,954
$330 Million Credit Facility 254,006 254,006
$42 Million Credit Facility (1) 36,035 36,035
$67.5 Million Credit Facility 40,461 40,461
$12.5 Million Credit Facility 10,379 10,379
$27.3 Million Credit Facility 18,600 18,404
$85.5 Million Credit Facility * 85,500
$19.6 Million Japanese Lease Financing * 19,550
Total $ 529,574 $ 529,378 $ 184,004
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(1) Approximately $13.2 million of the outstanding amount will be repaid upon the completion of the $19.6 Million Japanese Lease Financing.
* Reflects the maximum loan amount available on undrawn vessels.
The Companys projected quarterly debt repayments through 2019, including the impact of the reinstated principal repayments, as well as drawing all available amounts under the $409 Million Credit Facility, the $85.5 Million Credit Facility and the $19.6 Million Japanese Lease Financing, is as follows (dollars in thousands):
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Q4 2017 (1 ) $ 22,979
Q1 2018 11,152
Q2 2018 11,504
Q3 2018 11,075
Q4 2018 10,418
Q1 2019 10,134
Q2 2019 9,948
Q3 2019 (2 ) 84,009
Q4 2019 11,916
Total $ 183,135
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Relates to payments expected to be made from October 21, 2017 to December 31, 2017, including the repayment of approximately $13.2 million of the outstanding debt under the $42.0 Million Credit Facility
Includes $73.6 million repayment of Senior Notes due at maturity
Financial Results for the Three Months Ended September30, 2017 Compared to the Three Months Ended September30, 2016
The Company had a GAAP net loss of $10.7 million, or $0.15 loss per diluted share for the third quarter of 2017 compared with a GAAP net loss of $21.3 million, or $0.30 loss per diluted share for the third quarter of 2016. Earnings before interest, taxes, EBITDA for the third quarters of 2017 and 2016 were $12.4 million and a loss of $1.3 million, respectively (see Non-GAAP Financial Measures below).
Time charter equivalent (TCE) revenue, a Non-GAAP financial measure, is vessel revenues less voyage expenses (including bunkers, port charges, broker fees and other miscellaneous expenses that we are unable to recoup under time charter and pool arrangements). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping companys performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management.
TCE revenue was $38.6 million for the third quarter of 2017 and is associated with a day weighted average of 46 vessels owned and one vessel time chartered-in compared to $24.1 million during the prior year quarter, which was associated with a day weighted average of 38 vessels owned and two vessels time chartered-in. TCE revenue per day was $9,053 and $6,791 for the third quarter of 2017 and 2016, respectively. TCE rates continued the sequential quarter on quarter growth as mineral demand increased in China and long grain hauls out of South America extended further into the third quarter than usual. TCE revenue increased greatly versus the third quarter of 2016 due to the increase in rates combined with the increase in revenue days associated with the growth of our fleet.
Vessel operating costs were $21.0 million associated with 46 vessels owned, on average, during the period. Vessel operating costs for the prior year quarter were $18.9 million and related to 38 vessels owned, on average, during the period. Sequentially, daily operating costs, excluding take over and other non-operating costs, increased to $4,951 in the third quarter of 2017 from $4,858 in the second quarter of 2017, as we experienced an increase in spares and repairs and maintenance primarily due to the timing of purchases which can fluctuate depending on when the vessels are in port.
Charterhire expense decreased to $0.8 million in the third quarter of 2017 from $2.6 million in the prior year period, reflecting the reduction in the number of vessels time chartered-in on a day weighted average. The time chartered-in vessel existing at the start of the third quarter of 2017 was redelivered in August 2017. A vessel that we agreed to time charter-in during the second quarter of 2017 was delivered to us in September 2017.
Depreciation increased to $12.1 million in the third quarter of 2017 from $10.0 million in the prior year period, reflecting the increase in our weighted average vessels owned to 46 from 38.
General and administrative expense decreased to $7.2 million from $8.9 million in the prior year period due primarily to decreases in restricted stock amortization caused by the run off of awards granted at a higher fair value, offset in part by an increase in administrative fees reflecting the growth of our fleet.
Financial Results for the Nine Months Ended September30, 2017 Compared to the Nine Months Ended September30, 2016
The Company had a GAAP net loss of $58.7 million, or $0.82 loss per diluted share for the nine months ended September30, 2017 compared with a GAAP net loss of $104.3 million, or $2.05 loss per diluted share for the nine months ended September30, 2016. EBITDA for the nine months ended September 30, 2017 and 2016 were $12.3 million and a loss of $46.6 million, respectively (see Non-GAAP Financial Measures below).
For the nine months ended September30, 2017, the Companys adjusted net loss was $40.5 million, or $0.56 adjusted loss per diluted share, which excludes the impact of a write down of assets held for sale of $17.7 million and a write off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million. For thenine months endedSeptember30, 2016, the Companys adjusted net loss was$79.4 million, or$1.56adjusted loss per diluted share, which excludes a loss/write off of vessels and assets held for sale of$12.4 million, the write off of deferred financing costs on credit facilities that will no longer be used of$2.5 millionand a charterhire contract termination fee of $10.0 million (see Non-GAAP Financial Measures below). Adjusted EBITDA for the nine months ended September 30, 2017 and 2016 were $30.0 million and a loss of $24.2 million, respectively (see Non-GAAP Financial Measures below).
TCE revenue was $110.7 million in the first nine months of 2017 and is associated with a day weighted average of 47 vessels owned and one vessel time chartered-in compared to $51.6 million during the prior year period, which was associated with a day weighted average of 34 vessels owned and four vessels time chartered-in. TCE revenue per day was $8,801 and $5,262 for the first nine months of 2017 and 2016, respectively. TCE revenue increased significantly versus the prior year due to the increase in rates, increased demand across all bulk sectors, regions and commodities, as well as a reduction in tonnage supply, combined with the increase in revenue days associated with the growth of our fleet.
Vessel operating costs were $63.9 million and included approximately $1.3 million of takeover costs associated with new deliveries, and $1.2 million of non-operating expenses and related to 47 vessels owned, on average, during the first nine months of 2017. Vessel operating costs for the prior year period were $49.8 million and related to 34 vessels owned, on average. Daily operating costs, excluding take over and other non-operating costs, were $4,947 in the first nine months of 2017.
Charterhire expense decreased to $4.4 million for the first nine months of 2017 from $14.8 million in the prior year period, reflecting the reduction in the number of vessels time chartered-in from four vessels to one vessel, on a day weighted average. Included in the prior year figures is a charterhire contract termination fee of $10.0 million incurred to terminate four time charter-in agreements. The time chartered-in vessel existing at the start of the third quarter of 2017 was redelivered in August 2017. An additional time charter-in at $10,125 per day commenced at the end of September 2017.
Depreciation increased to $35.7 million in the first nine months of 2017 from $26.0 million in the prior year period, reflecting the increase in our weighted average vessels owned to 47 from 34.
General and administrative expense decreased to $22.5 million from $25.3 million in the prior year period due primarily to decreases in restricted stock amortization, due to the run off of awards granted at a higher fair value, offset by an increase in administrative fees reflecting the growth of our fleet.
During the first nine months of 2017, we recorded a write down on assets held for sale of $17.1 million related to the sale of two Kamsarmax vessels to an unaffiliated third party and also recorded a $0.6 million adjustment related to vessels sold in the prior year. During the first nine months of 2016, the Company recorded a write down of vessels and assets held for saleof $12.4 millionof which$11.6 millionrelated to the cancellation of a shipbuilding contract for a Kamsarmax bulk carrierand$0.8millionin additional expenses related to vessels held for sale atDecember 31, 2015.
During the first nine months of 2017 and 2016, we wrote off $0.5 million and $2.5 million, respectively, of deferred financing costs accumulated on credit facilities for which the related vessels were sold or the commitments were otherwise reduced.
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Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)

Unaudited
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Revenue:
Vessel revenue $ 38,608 $ 23,938 $ 111,078 $ 51,556
Operating expenses:
Voyage expenses 53 (143 ) 332 (76 )
Vessel operating costs 20,996 18,853 63,863 49,795
Charterhire expense 798 2,612 4,445 14,787
Charterhire contract termination charge 10,000
Vessel depreciation 12,071 9,966 35,670 25,977
General and administrative expenses 7,245 8,894 22,530 25,278
Loss / write down on assets held for sale 17,701 12,433
Total operating expenses 41,163 40,182 144,541 138,194
Operating loss (2,555 ) (16,244 ) (33,463 ) (86,638 )
Other income (expense):
Interest income 289 351 903 632
Foreign exchange loss (91 ) (28 ) (277 ) (166 )
Financial expense, net (8,317 ) (5,352 ) (25,821 ) (18,105 )
Total other expense (8,119 ) (5,029 ) (25,195 ) (17,639 )
Net loss $ (10,674 ) $ (21,273 ) $ (58,658 ) $ (104,277 )

Loss per common share - basic and diluted(1) $ (0.15 ) $ (0.30 ) $ (0.82 ) $ (2.05 )
Weighted-average shares outstanding - basic and diluted(1) 71,936 71,575 71,826 50,971
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Diluted weighted average shares outstanding excludes the impact of restricted shares for the three and nine months ended September 30, 2017 and 2016, as the impact would be anti-dilutive since the Company is in a net loss position.
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Scorpio Bulkers Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)

Unaudited
September 30, 2017 December 31, 2016
Assets
Current assets
Cash and cash equivalents $ 62,395 $ 101,734
Accounts receivable 8,810 7,050
Prepaid expenses and other current assets 6,164 6,696
Total current assets 77,369 115,480
Non-current assets
Vessels, net 1,340,307 1,234,081
Vessels under construction 180,000
Deferred financing costs, net 3,320 3,307
Other assets 13,193 14,289
Total non-current assets 1,356,820 1,431,677
Total assets $ 1,434,189 $ 1,547,157

Liabilities and shareholders equity
Current liabilities
Bank loans, net $ 24,577 $ 13,480
Accounts payable and accrued expenses 10,661 11,070
Total current liabilities 35,238 24,550
Non-current liabilities
Bank loans, net 417,901 493,793
Senior Notes, net 72,593 72,199
Total non-current liabilities 490,494 565,992
Total liabilities 525,732 590,542
Shareholders equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.01 par value per share; authorized 112,500,000 shares; issued and outstanding75,459,344 and 75,298,676 shares as of September 30, 2017 and December 31, 2016, respectively 753 753
Paid-in capital 1,724,858 1,714,358
Accumulated deficit (817,154 ) (758,496 )
Total shareholders equity 908,457 956,615
Total liabilities and shareholders equity $ 1,434,189 $ 1,547,157
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Scorpio Bulkers Inc. and Subsidiaries
Statements of Cash Flows (unaudited)
(Amounts in thousands)

For the Nine Months Ended September 30,
2017 2016
Operating activities
Net loss $ (58,658 ) $ (104,277 )
Adjustment to reconcile net loss to net cash used by
operating activities:
Restricted stock amortization 10,418 14,178
Vessel depreciation 35,670 25,977
Amortization of deferred financing costs 4,249 2,741
Write off of deferred financing costs 470 3,781
Loss / write down on assets held for sale 16,471 10,555
Changes in operating assets and liabilities:
(Decrease) increase in accounts receivable (1,760 ) 166
Decrease (increase) in prepaid expenses and other assets (1,007 ) 3,961
Increase (decrease) in accounts payable and accrued expenses 250 (7,188 )
Net cash provided by (used in) operating activities 6,103 (50,106 )
Investing activities
Proceeds from sale of assets held for sale 44,340 271,376
Payments on assets held for sale (98,445 )
Payments for vessels and vessels under construction (23,285 ) (301,933 )
Net cash provided by (used in) investing activities 21,055 (129,002 )
Financing activities
Proceeds from issuance of common stock 128,112
Proceeds from issuance of long-term debt 51,600 208,843
Repayments of long-term debt (118,097 ) (156,470 )
Debt issue costs paid (788 )
Net cash (used in) provided by financing activities (66,497 ) 179,697
(Decrease) increase in cash and cash equivalents (39,339 ) 589
Cash at cash equivalents, beginning of period 101,734 200,300
Cash and cash equivalents, end of period $ 62,395 $ 200,889
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Scorpio Bulkers Inc. and Subsidiaries
Other Operating Data (unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Time charter equivalent revenue ($000s) (1):
Vessel revenue $ 38,608 $ 23,938 $ 111,078 $ 51,556
Voyage expenses (53 ) 143 (332 ) 76
Time charter equivalent revenue $ 38,555 $ 24,081 $ 110,746 $ 51,632
Time charter equivalent revenue attributable to:
Kamsarmax $ 15,502 $ 8,958 $ 46,715 $ 20,975
Ultramax 23,053 15,123 64,031 30,657
$ 38,555 $ 24,081 $ 110,746 $ 51,632
Revenue days:
Kamsarmax 1,683 1,411 5,068 4,175
Ultramax 2,576 2,135 7,516 5,637
Combined 4,259 3,546 12,584 9,812
TCE per revenue day (1):
Kamsarmax $ 9,211 $ 6,349 $ 9,218 $ 5,024
Ultramax $ 8,949 $ 7,083 $ 8,519 $ 5,439
Combined $ 9,053 $ 6,791 $ 8,801 $ 5,262
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We define Time Charter Equivalent (TCE) revenue as voyage revenues less voyage expenses. Such TCE revenue, divided by the number of our available days during the period, or revenue days, is TCE per revenue day, which is consistent with industry standards. TCE per revenue day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.We report TCE revenue, a non-GAAP financial measure, because (i)we believe it provides additional meaningful information in conjunction with voyage revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii)it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii)it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping companys performance irrespective of 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, and (iv)we believe that it presents useful information to investors.
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Fleet List as of October 20, 2017

Vessel Name Year Built DWT Vessel Type
SBI Samba 2015 84,000 Kamsarmax
SBI Rumba 2015 84,000 Kamsarmax
SBI Capoeira 2015 82,000 Kamsarmax
SBI Electra 2015 82,000 Kamsarmax
SBI Carioca 2015 82,000 Kamsarmax
SBI Conga 2015 82,000 Kamsarmax
SBI Flamenco 2015 82,000 Kamsarmax
SBI Bolero 2015 82,000 Kamsarmax
SBI Sousta 2016 82,000 Kamsarmax
SBI Rock 2016 82,000 Kamsarmax
SBI Lambada 2016 82,000 Kamsarmax
SBI Reggae 2016 82,000 Kamsarmax
SBI Zumba 2016 82,000 Kamsarmax
SBI Macarena 2016 82,000 Kamsarmax
SBI Parapara 2017 82,000 Kamsarmax
SBI Mazurka 2017 82,000 Kamsarmax
SBI Swing 2017 82,000 Kamsarmax
SBI Jive 2017 82,000 Kamsarmax
Total Kamsarmax 1,480,000

SBI Antares 2015 61,000 Ultramax
SBI Athena 2015 64,000 Ultramax
SBI Bravo 2015 61,000 Ultramax
SBI Leo 2015 61,000 Ultramax
SBI Echo 2015 61,000 Ultramax
SBI Lyra 2015 61,000 Ultramax
SBI Tango 2015 61,000 Ultramax
SBI Maia 2015 61,000 Ultramax
SBI Hydra 2015 61,000 Ultramax
SBI Subaru 2015 61,000 Ultramax
SBI Pegasus 2015 64,000 Ultramax
SBI Ursa 2015 61,000 Ultramax
SBI Thalia 2015 64,000 Ultramax
SBI Cronos 2015 61,000 Ultramax
SBI Orion 2015 64,000 Ultramax
SBI Achilles 2016 61,000 Ultramax
SBI Hercules 2016 64,000 Ultramax
SBI Perseus 2016 64,000 Ultramax
SBI Hermes 2016 61,000 Ultramax
SBI Zeus 2016 60,200 Ultramax
SBI Hera 2016 60,200 Ultramax
SBI Hyperion 2016 61,000 Ultramax
SBI Tethys 2016 61,000 Ultramax
SBI Phoebe 2016 64,000 Ultramax
SBI Poseidon 2016 60,200 Ultramax
SBI Apollo 2016 60,200 Ultramax
SBI Samson 2017 64,000 Ultramax
SBI Phoenix 2017 64,000 Ultramax
Total Ultramax 1,731,800
Total Owned Vessels DWT 3,211,800
[End Table]
Time chartered-in vessels
The Company currently time charters-inoneUltramax. The terms of the contract are summarized as follows:
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Vessel Type Year Built DWT Where Built Daily Base Rate Earliest Expiry
Ultramax 2017 62,100 Japan $ 10,125 30-Sep-19 (1 )
Total TC DWT 62,100
[End Table]
This vessel is time chartered-in for 22 to 24 months at the Companys option at $10,125 per day. The Company has the option to extend this time charter for one year at $10,885 per day. The vessel was delivered to us in September 2017.
Conference Call on Results:
A conference call to discuss the Companys results will be held today, Monday, October 23, 2017, at 11:00 AM Easter Standard Time / 5:00 PM Central European Time. Those wishing to listen to the call should dial 1 (866) 219-5268 (U.S.) or 1 (703) 736-7424 (International) at least 10 minutes prior to the start of the call to ensure connection. The conference participant passcode is 99807470.
There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website www.scorpiobulkers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.Webcast URL:https://edge.media-server.com/m6/p/db7uy3ha
About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc., after the completion of the recent acquisition of six Ultramax vessels, will own 52 vessels, consisting of 18 Kamsarmax vessels and 34 Ultramax vessels. The Company also time charters-in one Ultramax vessel. The owned fleet will have a total carrying capacity of approximately 3.6 million deadweight tonnes upon the completion of the acquisition of the six Ultramax vessels. Additional information about the Company is available on the Companys website www.scorpiobulkers.com, which is not a part of this press release.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with accounting principles generally accepted in the U.S., (GAAP), management uses certain non-GAAP financial measures as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a companys operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business than GAAP measures alone.In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of managements control.
Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted net loss and related per share amounts, as well as adjusted EBITDA are non-GAAP performance measures that we believe provide investors with a means of evaluating and understanding how the Companys management evaluates the Companys operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP.
EBITDA (unaudited)
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Three Months Ended September 30, Nine Months Ended September 30,
In thousands 2017 2016 2017 2016
Net loss $ (10,674 ) (21,273 ) $ (58,658 ) $ (104,277 )
Add Back:
Net interest expense 6,546 3,916 20,199 11,207
Depreciation and amortization 16,499 16,062 50,807 46,422
EBITDA $ 12,371 (1,295 ) $ 12,348 $ (46,648 )
[End Table]
Adjusted net loss (unaudited)
[Start Table]
Nine Months EndedSeptember 30,
In thousands, except per share data 2017 2016
Amount Per share Amount Per share
Net loss $ (58,658 ) $ (0.82 ) $ (104,277 ) $ (2.05 )
Adjustments:
Loss / write down on assets held for sale 17,701 0.25 12,433 0.24
Write down of deferred financing cost 470 0.01 2,456 0.05
Charterhire contract termination charge 10,000 0.20
Total adjustments $ 18,171 $ 0.26 $ 24,889 $ 0.49
Adjusted net loss $ (40,487 ) $ (0.56 ) $ (79,388 ) $ (1.56 )
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Adjusted EBITDA (unaudited)
[Start Table]
Nine Months Ended September 30,
In thousands 2017 2016
Net loss $ (58,658 ) $ (104,277 )
Impact of Adjustments 18,171 24,889
Adjusted net loss (40,487 ) (79,388 )
Add Back:
Net interest expense 20,199 11,207
Depreciation and amortization 50,337 43,966
Adjusted EBITDA $ 30,049 $ (24,215 )
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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, intend, 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 managements 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 failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking 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.
Contact: Scorpio Bulkers Inc. +377-9798-5715 (Monaco) +1-646-432-1675 (New York)