Third Quarter and Year To Date Highlights
- Reported operating revenue of
- Reported net income available to common shareholders of
- Generated
- On
- On
- On
-On
SELECTED FINANCIAL DATA – UNAUDITED (thousands of U.S. dollars)
Three | Three | Nine | Nine | |||||
months ended |
months ended |
months ended |
months ended |
|||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||
Operating Revenue | 35,859 | 41,216 | 106,969 | 121,117 | ||||
Operating Income (Loss) | 15,256 | 19,894 | 45,941 | 56,859 | ||||
Net Income (Loss) for Common Shareholders | 3,864 | 8,878 | 12,075 | 22,496 | ||||
Adjusted EBITDA (1) | 23,631 | 29,340 | 70,644 | 85,446 | ||||
Normalised Net Income (1) | 3,864 | 8,878 | 12,075 | 23,016 | ||||
(1) Adjusted EBITDA and Normalized net income (loss) are non-US Generally Accepted Accounting Principles (US GAAP) measures, as explained further in this press release, and are considered by
Revenue and Utilization
The fleet generated revenue from fixed rate, mainly long-term time charters of
For the nine months ended
The table below shows fleet utilization for the three and nine months ended
Three months ended | Nine months ended | ||||||||
Sept 30, | Sept 30, | Sept 30, | Sept 30, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | ||
Days | 2018 | 2017 | 2018 | 2017 | 2017 | 2016 | 2015 | 2014 | |
Ownership days | 1,748 | 1,656 | 5,019 | 4,914 | 6,570 | 6,588 | 6,893 | 6,270 | |
Planned offhire - scheduled drydock | (3) | 0 | (34) | (62) | (62) | (100) | (9) | (48) | |
Unplanned offhire | (3) | 0 | (10) | (30) | (40) | (3) | (7) | (12) | |
Idle time | (4) | 0 | (17) | 0 | 0 | 0 | (13) | (64) | |
Operating days | 1,738 | 1,656 | 4,958 | 4,822 | 6,468 | 6,485 | 6,864 | 6,146 | |
Utilization | 99.4% | 100.0% | 98.8% | 98.1% | 98.4% | 98.4% | 99.6% | 98.0% |
In the three months ended
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, were
For the nine months ended
Depreciation
Depreciation for the three months ended
Depreciation for the nine months ended
Impairment
The Company’s accounting policies require that tangible fixed assets such as vessels are reviewed individually for impairment in case of trigger events or changes in circumstances to assess whether their carrying amounts are recoverable.
In
In
General and Administrative Costs
General and administrative costs were
For the nine months ended
Other Operating Income
Other operating income in the three months ended
For the nine months ended
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was
Adjusted EBITDA for the nine months ended
Interest Expense
Debt at
Debt at
Interest expense for the three months ended
For the nine months ended
Interest income for the three months ended
Interest income for the nine months ended
Taxation
Taxation for the three months ended
Taxation for the nine months ended
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the three months ended
The cost in the nine months ended
Net Income (Loss) Available to Common Shareholders
Net income available to common shareholders for the three months ended
Normalized net income was the same as reported net income for both the three months ended
Net income was
Normalized net income, which excludes, where relevant, the effect of any non-cash impairment charges, gains and losses on the purchase of notes and accelerated amortization of deferred financing charges and original issue discount consequent upon the retirement of notes, was the same as reported net income for the nine months ended
Fleet
The following table provides information about the on-the-water fleet of 19 vessels as of
Remaining | Earliest | Latest | Daily | ||||||||
Charter | Charter | Charter | Charter | ||||||||
Vessel | Capacity | Year | Term (2) | Expiry | Expiry | Rate | |||||
Name | TEUs (1) | Built | (years) | Date | Date | $ | |||||
CMA CGM Matisse | 2,262 | 1999 | 1.2 | Sept 21, 2019 | Mar 19, 2020 | 15,300 | |||||
CMA CGM Utrillo | 2,262 | 1999 | 1.2 | Sept 11, 2019 | Mar 10 2020 | 15,300 | |||||
Delmas Keta | 2,207 | 2003 | 0.1 | Aug 6, 2018 | Nov 4, 2018 | 7,800 | |||||
GSL Julie | 2,207 | 2002 | 0.4 | Jan 20, 2019(5) | Mar 20, 2019 | 7,800 | |||||
Kumasi | 2,207 | 2002 | 0.1 - 2.3(3) | Nov 16, 2018 | Mar 31, 2021 | 9,800 | |||||
Marie Delmas | 2,207 | 2002 | 0.1 - 2.3(3) | Nov 16, 2018 | Mar 31, 2021 | 9,800 | |||||
CMA CGM La Tour | 2,272 | 2001 | 1.2 | Sept 20, 2019 | Mar 18, 2020 | 15,300 | |||||
CMA CGM Manet | 2,272 | 2001 | 1.2 | Sept 7, 2019 | Mar 05, 2020 | 15,300 | |||||
CMA CGM Alcazar | 5,089 | 2007 | 2.3 | Oct 18, 2020 | Apr 16, 2021 | 33,750 | |||||
CMA CGM Château d’If | 5,089 | 2007 | 2.3 | Oct 11, 2020 | Apr 09, 2021 | 33,750 | |||||
CMA CGM Thalassa | 11,040 | 2008 | 7.3 | Oct 1, 2025 | Mar 30, 2026 | 47,200 | |||||
CMA CGM Jamaica | 4,298 | 2006 | 4.2 | Sept 17, 2022 | Mar 16, 2023 | 25,350 | |||||
CMA CGM Sambhar | 4,045 | 2006 | 4.2 | Sept 16, 2022 | Mar 15, 2023 | 25,350 | |||||
CMA CGM America | 4,045 | 2006 | 4.2 | Sept 19, 2022 | Mar 18, 2023 | 25,350 | |||||
CMA CGM Berlioz | 6,621 | 2001 | 2.9 | May 28, 2021 | Nov 24, 2021 | 34,000 | |||||
GSL Tianjin | 8,063 | 2005 | 0.2 | Sept 26, 2018 | Jan 26, 2019 | 11,900 | |||||
OOCL Qingdao | 8,063 | 2004 | 0.4 | Jan 1, 2019 | Mar 15, 2019 | 14,000 | |||||
GSL Ningbo | 8,063 | 2004 | 0.6 | Nov 21, 2018(4) | Sep 21, 2019 | 11,500 | |||||
GSL Valerie | 2,824 | 2005 | 0.7 | Jun 1, 2019 | Jul 31, 2019 | 9,000 | |||||
(1) Twenty-foot Equivalent Units. | |||||||||||
(2) As at September 30, 2018, generally to mid-point of re-delivery period. | |||||||||||
(3) The charters for Kumasi and Marie Delmas were amended in July 2016 to, inter alia, provide us with three consecutive options to extend the charters at $9,800 per day. The first of these options was exercised in July 2017, extending the charters to end 2018. The two remaining options allow us to extend the charters to December 31, 2020 plus or minus 90 days at charterer’s option. The earliest possible re-delivery date, not taking into account our remaining options, is shown in the table. | |||||||||||
(4) GSL Ningbo is chartered, from September 21, 2018, for a period of between two and 12 months, with a subsequent option for a 12-month extension (at charterer’s option). During the first three months, the charter is at a rate of $11,500 per day; during months four to six, at $12,100 per day; during months seven to 12, at $12,400 per day; and during the 12-month option period, at $18,000 per day. | |||||||||||
(5) On September 20, 2018 the charter of the GSL Julie was extended at the same daily charter rate to a minimum January 20, 2019 and maximum March 20, 2019 (at the charterer’s option). | |||||||||||
(6) Julie Delmas was renamed GSL Julie on September 2, 2018. OOCL Ningbo was renamed GSL Ningbo on September 18,2018. | |||||||||||
Conference Call and Webcast
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 2855409
Please dial in at least 10 minutes prior to
(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the call will be available through
Annual Report on Form 20F
The Company’s Annual Report for 2017 is on file with the
About
Reconciliation of Non-U.S. GAAP Financial Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense including amortization of deferred finance costs, earnings allocated to preferred shares, income taxes, depreciation, amortization and impairment. Adjusted EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is not defined in US GAAP and should not be considered to be an alternate to Net income or any other financial metric required by such accounting principles.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars) | ||||||||||
Three | Three | Nine | Nine | |||||||
months | months | months | months | |||||||
ended | ended | ended | ended | |||||||
Sept 30, | Sept 30, | Sept 30, | Sept 30, | |||||||
2018 | 2017 | 2018 | 2017 | |||||||
Net income (loss) available to common shareholders | 3,864 | 8,878 | 12,075 | 22,496 | ||||||
Adjust: | Depreciation | 8,375 | 9,446 | 24,703 | 28,587 | |||||
Impairment | --- | --- | --- | --- | ||||||
Interest income | (364 | ) | (152 | ) | (984 | ) | (335 | ) | ||
Interest expense | 10,977 | 10,387 | 32,494 | 32,370 | ||||||
Income tax | 13 | 15 | 59 | 31 | ||||||
Earnings allocated to preferred shares | 766 | 766 | 2,297 | 2,297 | ||||||
Adjusted EBITDA | 23,631 | 29,340 | 70,644 | 85,446 | ||||||
B. Normalized net income
Normalized net income represents net income adjusted for the premium paid on the tender offer together with the related accelerated amortization of deferred financing costs and original issue discount. Normalized net income is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income for non-operating items that do not affect operating performance or operating cash generated. Normalized net income is not defined in US GAAP and should not be considered to be an alternate to net income or any other financial metric required by such accounting principles.
Normalized net income represents Net income (loss) adjusted for the unrealized gain (loss) on derivatives, the accelerated write off of a portion of deferred financing costs, impairment charges and gain of redemption of preferred shares. Normalized net income is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income for non-operating items such as change in fair value of derivatives to eliminate the effect of non-cash non-operating items that do not affect operating performance or cash generated. Normalized net income is not defined in US GAAP and should not be considered to be an alternate to Net income (loss) or any other financial metric required by such accounting principles.
NORMALIZED NET INCOME - UNAUDITED | |||||
(thousands of U.S. dollars) | |||||
Three | Three | Nine | Nine | ||
months | months | months | months | ||
ended | ended | ended | ended | ||
Sept 30, | Sept 30, | Sept 30, | Sept 30, | ||
2018 | 2017 | 2018 | 2017 | ||
Net income available to common shareholders | 3,864 | 8,878 | 12,075 | 22,496 | |
Adjust: | Premium paid on tender offer for notes | --- | --- | --- | 390 |
Accelerated write off of deferred financing charges related to notes purchase and tender offer | --- | --- | --- | 61 | |
Accelerated write off of original issue discount related to notes purchase and tender offer | --- | --- | --- | 69 | |
Normalized net income | 3,864 | 8,878 | 12,075 | 23,016 | |
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide
The risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
- the financial condition of our charterers, particularly
CMA CGM , our principal charterer and main source of operating revenue, and their ability to pay charterhire in accordance with the charters; - Global Ship Lease’s financial condition and liquidity, including its ability to obtain additional waivers which might be necessary under the existing credit facility or obtain additional financing to fund capital expenditures, vessel acquisitions and other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its credit facility;
- future acquisitions, business strategy and expected capital spending;
- operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional economies;
- risks incidental to vessel operation, including piracy, discharge of pollutants and vessel accidents and damage including total or constructive total loss;
- estimated future capital expenditures needed to preserve its capital base;
- Global Ship Lease’s expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate time charters;
- Global Ship Lease’s ability to capitalize on its management’s and board of directors’ relationships and reputations in the containership industry to its advantage;
- changes in governmental and classification societies’ rules and regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on commercially reasonable terms;
- unanticipated changes in laws and regulations including taxation;
- potential liability from future litigation.
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.
Interim Unaudited ConsolidatedStatements of Income
(Expressed in thousands of U.S. dollars except share data)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Operating Revenues | ||||||||||||
Time charter revenue | $ | 4,009 | $ | 9,444 | $ | 14,116 | $ | 28,022 | ||||
Time charter revenue – related party | 31,850 | 31,772 | 92,853 | 93,095 | ||||||||
35,859 | 41,216 | 106,969 | 121,117 | |||||||||
Operating Expenses Vessel operating expenses |
10,679 | 10,200 | 30,862 | 30,678 | ||||||||
Vessel operating expenses – related party | 215 | 400 | 751 | 1,200 | ||||||||
Depreciation | 8,375 | 9,446 | 24,703 | 28,587 | ||||||||
General and administrative | 1,335 | 1,278 | 4,728 | 3,843 | ||||||||
Other operating income | (1 | ) | (2 | ) | (16 | ) | (50 | ) | ||||
Total operating expenses | 20,603 | 21,322 | 61,028 | 64,258 | ||||||||
Operating Income | 15,256 | 19,894 | 45,941 | 56,859 | ||||||||
Non Operating Income (Expense) | ||||||||||||
Interest income | 364 | 152 | 984 | 335 | ||||||||
Interest expense | (10,977 | ) | (10,387 | ) | (32,494 | ) | (32,370 | ) | ||||
Income before Income Taxes | 4,643 | 9,659 | 14,431 | 24,824 | ||||||||
Income taxes | (13 | ) | (15 | ) | (59 | ) | (31 | ) | ||||
Net Income | $ | 4,630 | $ | 9,644 | $ | 14,372 | $ | 24,793 | ||||
Earnings allocated to Series B Preferred Shares | (766 | ) | (766 | ) | (2,297 | ) | (2,297 | ) | ||||
Net Income available to Common Shareholders | $ | 3,864 | $ | 8,878 | $ | 12,075 | $ | 22,496 | ||||
Earnings per Share | ||||||||||||
Weighted average number of Class A common shares outstanding | ||||||||||||
Basic (including RSUs without service conditions) Diluted |
48,109,734 48,387,397 |
47,975,609 47,975,609 |
48,088,122 48,358,562 |
47,975,609 47,975,609 |
||||||||
Net income per Class A common share | ||||||||||||
Basic (including RSUs without service conditions) | $ | 0.08 | $ | 0.19 | $ | 0.25 | $ | 0.47 | ||||
Diluted | $ | 0.08 | $ | 0.19 | $ | 0.25 | $ | 0.47 | ||||
Weighted average number of Class B common shares outstanding Basic and diluted |
7,405,956 | 7,405,956 | 7,405,956 | 7,405,956 | ||||||||
Net income per Class B common share Basic and diluted |
$ | nil | $ | nil | $ | nil | $ | nil | ||||
Interim Unaudited ConsolidatedBalance Sheets
(Expressed in thousands of U.S. dollars)
September 30, 2018 |
December 31, 2017 |
||||||
Assets | |||||||
Cash and cash equivalents | $ | 94,539 | $ | 73,266 | |||
Accounts receivable | 106 | 72 | |||||
Due from related party | 2,266 | 1,932 | |||||
Prepaid expenses | 3,569 | 918 | |||||
Other receivables | 170 | 458 | |||||
Inventory | 3,323 | 742 | |||||
Other current assets | 1,605 | - | |||||
Total current assets | 105,578 | 77,388 | |||||
Vessels in operation | 587,151 | 597,779 | |||||
Restricted cash | 525 | - | |||||
Other fixed assets | 6 | 10 | |||||
Intangible assets | 1 | 7 | |||||
Total non-current assets | 587,683 | 597,796 | |||||
Total Assets | $ | 693,261 | $ | 675,184 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities | |||||||
Current portion of long term debt | 40,000 | 40,000 | |||||
Intangible liability – charter agreements | 1,771 | 1,771 | |||||
Deferred revenue | 1,420 | 2,178 | |||||
Accounts payable | 276 | 1,486 | |||||
Due to related party | 2,545 | 2,813 | |||||
Accrued expenses | 16,575 | 8,788 | |||||
Total current liabilities | 62,587 | 57,036 | |||||
Long term debt | 359,920 | 358,515 | |||||
Intangible liability – charter agreements | 6,682 | 8,011 | |||||
Deferred tax liability | 25 | 17 | |||||
Total long term liabilities | 366,627 | 366,543 | |||||
Total Liabilities | $ | 429,214 | $ | 423,579 | |||
Commitments and contingencies | - | - | |||||
Stockholders’ Equity | |||||||
Class A Common stock – authorized 214,000,000 shares with a $0.01 par value; 47,609,734 shares issued and outstanding (2017 – 47,609,734) |
$ | 476 | $ | 476 | |||
Class B Common stock – authorized 20,000,000 shares with a $0.01 par value; 7,405,956 shares issued and outstanding (2017 – 7,405,956) |
74 | 74 | |||||
Series B Preferred shares – authorized 16,100 shares with $0.01 par value; 14,000 shares issued and outstanding (2017 – 14,000) |
- | - | |||||
Additional paid in capital | 387,115 | 386,748 | |||||
Accumulated deficit | (123,618 | ) | (135,693 | ) | |||
Total Stockholders’ Equity | 264,047 | 251,605 | |||||
Total Liabilities and Stockholders’ Equity | $ | 693,261 | $ | 675,184 | |||
Interim Unaudited Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Cash Flows from Operating Activities | ||||||||||||
Net income | $ | 4,630 | $ | 9,644 | $ | 14,372 | $ | 24,793 | ||||
Adjustments to Reconcile Net income to Net Cash Provided by Operating Activities | ||||||||||||
Depreciation | 8,375 | 9,446 | 24,704 | 28,587 | ||||||||
Amortization of deferred financing costs | 1,115 | 838 | 3,131 | 2,613 | ||||||||
Amortization of original issue discount | 201 | 258 | 602 | 883 | ||||||||
Amortization of intangible liability | (443 | ) | (452 | ) | (1,329 | ) | (1,356 | ) | ||||
Share based compensation | 45 | - | 136 | - | ||||||||
Increase in accounts receivable and other assets | (1,005 | ) | (1,706 | ) | (2,342 | ) | (1,905 | ) | ||||
(Increase) decrease in inventory | (715 | ) | 46 | (2,581 | ) | (75 | ) | |||||
Increase (decrease) in accounts payable and other liabilities | 8,361 | (7,747 | ) | 6,135 | (8,495 | ) | ||||||
(Decrease) increase in unearned revenue | (248 | ) | 150 | (758 | ) | 908 | ||||||
Increase (decrease) in related party balances | 496 | 45 | (603 | ) | 673 | |||||||
Unrealized foreign exchange loss | 7 | - | 5 | 6 | ||||||||
Net Cash Provided by Operating Activities | 20,819 | 10,522 | 41,472 | 46,632 | ||||||||
Cash Flows from Investing Activities | ||||||||||||
Cash paid for vessel improvements | - | - | (150 | ) | (100 | ) | ||||||
Cash paid for vessels | (24 | ) | - | (11,436 | ) | - | ||||||
Cash paid for other assets | - | - | - | (8 | ) | |||||||
Cash paid for drydockings | (877 | ) | (701 | ) | (2,104 | ) | (4,632 | ) | ||||
Net Cash Used in Investing Activities | (901 | ) | (701 | ) | (13,690 | ) | (4,740 | ) | ||||
Cash Flows from Financing Activities | ||||||||||||
Loan finance drawn down | 8,125 | - | 8,125 | - | ||||||||
Deferred financing costs incurred | (1,812 | ) | - | (1,812 | ) | - | ||||||
Repurchase of secured notes | - | - | - | (19,501 | ) | |||||||
Repayment of credit facilities | - | (2,925 | ) | (10,000 | ) | (8,775 | ) | |||||
Series B Preferred Shares – dividends paid | (766 | ) | (766 | ) | (2,297 | ) | (2,297 | ) | ||||
Net Cash Received from / (Used in) Financing Activities | 5,547 | (3,691 | ) | (5,984 | ) | (30,573 | ) | |||||
Net Increase in Cash, Cash Equivalents and Restricted Cash | 25,465 | 6,130 | 21,798 | 11,319 | ||||||||
Cash and Cash Equivalents at Start of Period | 69,599 | 59,432 | 73,266 | 54,243 | ||||||||
Cash, Cash Equivalents and Restricted Cash at End of Period |
$ | 95,064 | $ | 65,562 | $ | 95,064 | $ | 65,562 | ||||
Supplemental information | ||||||||||||
Total interest paid | $ | 740 | $ | 18,313 | $ | 20,677 | $ | 37,991 | ||||
Income tax paid | $ | 30 | $ | 12 | $ | 58 | $ | 36 | ||||
Investor and Media Contacts:
646-673-9701
or
212-477-8438
Source: Global Ship Lease, Inc.