Aegean Marine Petroleum Network Inc. Announces First Quarter 2014 Financial Results

PIRAEUS, Greece, May 21, 2014 /PRNewswire/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW) ("Aegean" or the "Company") today announced financial and operating results for the first quarter ended March 31st, 2014.

First Quarter Highlights

  • Sales volumes of 2,705,823 metric tons.
  • Gross profit of $82.9 million.
  • Operating income of $15.2 million.
  • Net income attributable to Aegean shareholders of $5.1 million or $0.11 basic and diluted earnings per share.
    • Net income attributable to Aegean shareholders adjusted for the sale of non-core assets and vessel impairment charge was $8.7 million or $0.18 basic and diluted earnings per share.
  • EBITDA of $23.5 million.
    • EBITDA adjusted for the sale of non-core assets and vessel impairment charge was $27.0 million.
  • Completed the sale of two older, non-core vessels.

E. Nikolas Tavlarios, President of Aegean Marine Petroleum Network, commented, "During the quarter Aegean continued to build upon the momentum we established across our business as we extended our track record of profitability and growth. The sustainable growth drivers we have put in place enabled our team to continue delivering positive results despite persistent industry headwinds.

Mr. Tavlarios continued, "With Aegean's U.S. East Coast operations successfully integrated, we have strengthened our industry leadership and global market share.  We remain focused on diversifying our geographical presence and increasing asset utilization both through the expected introduction of our new Fujairah storage facility in the second half of 2014 and the potential addition of new service centers.  In addition, with the sale of two older, non-core vessels, Aegean continued to streamline its expense structure and generate sustainable results.  We are excited about our opportunities to build significant shareholder value over the long-term." 

The Company achieved net income attributable to Aegean shareholders for the three months ended March 31, 2014 of $5.1 million, or $0.11 basic diluted earnings per share.  Net income attributable to Aegean shareholders excluding a non-cash loss from the sale of non-core assets and vessel impairment charge was $8.7 million or $0.18 basic and diluted earnings per share.  For the three months ended March 31, 2013, the Company recorded net income attributable to Aegean shareholders of $7.2 million, or $0.15 basic and diluted earnings per share. Net income attributable to Aegean shareholders excluding a non-cash loss from the sale of non core vessels was $6.3 million or $0.13 basic and diluted earnings per share.

Total revenues for the three months ended March 31, 2014, increased by 7.9% to $1,694.4 million compared with $1,570.5 million reported for the same period in 2013. For the three months ended March 31, 2014, sales of marine petroleum products increased by 7.4% to $1,673.7 million compared with $1,558.4 million for the same period in 2013. Gross profit, which equals total revenue less directly attributable cost of revenue increased by 17.3% to $82.9 million in the first quarter of 2014 compared with $70.7 million in the same period in 2013.

For the three months ended March 31, 2014, the volume of marine fuel sold by the Company increased by 14.3% to 2,705,823 metric tons compared with 2,367,077 metric tons in the same period in 2013.

Operating income adjusted for the sale of non-core assets and vessel impairment charge for the first quarter of 2014 amounted to $18.8 million compared to $12.4 million for the same period in 2013. Operating expenses increased by $5.8 million, or 10.0%, to $64.1 million for the three months ended March 31, 2014, compared with $58.3 million for the same period in 2013.

Liquidity and Capital Resources

Net cash used in operating activities was $32.5 million for the three months ended March 31, 2014. Net income, as adjusted for non-cash items (as defined in Note 9) was $19.5 million for the period.  

Net cash used in investing activities was $14.2 million for the three months ended March 31, 2014, mainly due to advances for other fixed assets under construction and the acquisition of a second hand vessel.

Net cash provided by financing activities was $99.1 million for the three months ended March 31, 2014, mainly used to finance our activities in the US business.

As of March 31, 2014, the Company had cash and cash equivalents of $115.0 million and working capital of $239.9 million. Non-cash working capital, or working capital excluding cash and debt, was $595.2 million

As of March 31, 2014, the Company had $648.2 million in available liquidity, which includes unrestricted cash and cash equivalents of $115.0 million and available undrawn amounts under the Company's working capital facilities of $533.2 million, to finance working capital requirements.

The weighted average basic and diluted shares outstanding for the three months ended March 31, 2014 were 46,139,764. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2013 were 45,660,166 respectively.

Spyros Gianniotis, Aegean's Chief Financial Officer, stated, "Our strong financial position and dynamic business model continues to distinguish Aegean from the competitive landscape.  In the first quarter, we continued to streamline expenses and increase our earnings potential by targeting only the most profitable business. We have built a solid foundation for profitable growth and are confident that Aegean will remain on a positive trajectory as the markets emerge from the current shipping cycle. Regardless of an improvement in our operating environment, Aegean's business model has proved to be immune to market fluctuations and is built to successfully deliver financial results."

 

 

Summary Consolidated Financial and Other Data (Unaudited)


For the Three Months Ended March 31,




2013


2014







Income Statement Data:







Revenues - third parties

$

1,563,902

$

1,690,184



Revenues - related companies


6,589


4,180



Total revenues


1,570,491


1,694,364



Cost of revenues - third parties


1,416,481


1,524,724



Cost of revenues - related companies


83,287


86,729



Total cost of revenues


1,499,768


1,611,453



Gross profit


70,723


82,911



Operating expenses:







Selling and distribution


50,956


54,968



General and administrative


6,965


8,125



Amortization of intangible assets


376


1,022



Loss/ (Gain) on sale of vessels, net


3,268


(493)



Vessel impairment charge


-


4,062



Operating income/(expense)


9,158


15,227



Net financing cost


(6,153)


(8,460)



Gain on sale of subsidiary, net


4,174


-



Foreign exchange gains, net


399


249



Other expense


-


-



Income taxes expense


(411)


(1,896)



Net income


7,167


5,120



Less income attributable to non-controlling interest


19


24



Net income attributable to AMPNI shareholders

$

7,186

$

5,096



Basic earnings per share (U.S. dollars)

$

0.15

$

0.11



Diluted earnings per share (U.S. dollars)

$

0.15

$

0.11










EBITDA(1)

$

21,021

$

23,456










Other Financial Data:







Gross spread on marine petroleum products(2)

$

63,184

$

73,268



Gross spread on lubricants(2)


1,059


902



Gross spread on marine fuel(2)


62,125


72,366



Gross spread per metric ton of marine

fuel sold (U.S. dollars) (2)


26.2


26.7



Net cash provided by/(used in) operating activities

$

42,181

$

(32,492)



Net cash used in investing activities


(3,020)


(14,175)



Net cash provided by/(used in) financing activities


(54,131)


99,055










Sales Volume Data (Metric Tons): (3)







Total sales volumes


2,367,077


2,705,823










Other Operating Data:







Number of owned bunkering tankers, end of period(4)


55.0


52.0



Average number of owned bunkering tankers(4)(5)


55.4


52.0



Special Purpose Vessels, end of period(6)


1.0


1.0



Number of operating storage facilities, end of period(7)


6.0


14.0



 

Summary Consolidated Financial and Other Data (Unaudited)



As of

December 31,

2013

As of

March 31,

2014







(in thousands of U.S. dollars,

unless otherwise stated)

Balance Sheet Data:



Cash and cash equivalents


62,575

114,953

Gross trade receivables


472,543

547,199

Allowance for doubtful accounts


(2,622)

(3,010)

Inventories


303,297

272,654

Current assets


896,730

994,824

Total assets


1,616,185

1,718,949

Trade payables


241,743

246,810

Current liabilities (including current portion of long-term debt)


652,277

754,924

Total debt


783,317

883,668

Total liabilities


1,072,439

1,169,675

Total stockholder's equity


543,746

549,274





Working Capital Data:




Working capital(8)


244,453

239,900

Working capital excluding cash and debt(8)


541,919

595,230





 

Notes:

1. EBITDA represents net income before interest, taxes, depreciation and amortization. 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 EBITDA may not be comparable to that recorded by other companies. EBITDA is included herein because it is a basis upon which the Company assesses its operating performance 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 income to EBITDA for the periods presented:


For the Three Months Ended March 31,


2013

2014


(in thousands of U.S. dollars,

unless otherwise stated)

Net income attributable to AMPNI shareholders

7,186

5,096




Add: Net financing cost including amortization of financing costs

6,153

8,460

  Add: Income tax expense

411

1,896

  Add: Depreciation and amortization excluding amortization of financing costs

7,271

8,004




EBITDA

21,021

23,456

 

2. Gross spread on marine petroleum products represents the margin the Company generates on sales of marine fuel and lubricants.  Gross spread on marine fuel represents the margin that the Company generates on sales of various classifications of marine fuel oil ("MFO") or marine gas oil ("MGO"). Gross spread on lubricants represents the margin that the Company generates on sales of lubricants. Gross spread on marine petroleum products, gross spread of MFO and gross spread on lubricants are not items recognized by U.S. GAAP and should not be considered as an alternative to gross profit or any other indicator of a Company's operating performance required by U.S. GAAP. The Company's definition of gross spread may not be the same as that used by other companies in the same or other industries.  The Company calculates the above-mentioned gross spreads by subtracting from the sales of the respective marine petroleum product the cost of the respective marine petroleum product sold and cargo transportation costs. For arrangements in which the Company physically supplies the respective marine petroleum product using its bunkering tankers, costs of the respective marine petroleum products sold represents amounts paid by the Company for the respective marine petroleum product sold in the relevant reporting period. For arrangements in which the respective marine petroleum product is purchased from the Company's related company, Aegean Oil S.A., or Aegean Oil, cost of the respective marine petroleum products sold represents the total amount paid by the Company to the physical supplier for the respective marine petroleum product and its delivery to the custom arrangements in which the Company purchases cargos of marine fuel for its floating storage facilities, transportation costs may be included in the purchase price of marine fuels from the supplier or may be incurred separately from a transportation provider. Gross spread per metric ton of marine fuel sold represents the margin the Company generates per metric ton of marine fuel sold. The Company calculates gross spread per metric ton of marine fuel sold by dividing the gross spread on marine fuel by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants. The following table reflects the calculation of gross spread per metric ton of marine fuel sold for the periods presented:

 


For the Three Months Ended  March 31,



2013


2014




Sales of marine petroleum products

1,558,389


1,673,738


Less: Cost of marine petroleum products sold

(1,495,205)


(1,600,470)


Gross spread on marine petroleum products

63,184


73,268


Less: Gross spread on lubricants

(1,059)


(902)


Gross spread on marine fuel

62,125


72,366







Sales volume of marine fuel (metric tons)

2,367,077


2,705,823







Gross spread per metric ton of marine

fuel sold (U.S. dollars)

26.2


26.7


 

3. Sales volume of marine fuel is the volume of sales of various classifications of MFO and MGO for the relevant period and is denominated in metric tons. The Company does not use the sales volume of lubricants as an indicator.

The Company's markets include its physical supply operations in the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe, Vancouver, Portland (U.K.), Trinidad and Tobago (Southern Caribbean), Tangiers (Morocco), Las Palmas, Tenerife, Panama, Hong Kong, Barcelona, Algeciras, US East Coast  and Greece, where the Company conducts operations through its related company, Aegean Oil. 

4. Bunkering fleet comprises both bunkering vessels and barges. 

5.  Figure represents average bunkering fleet number for the relevant period, as measured by the sum of the number of days each bunkering tanker or barge was used as part of the fleet during the period divided by the cumulative number of calendar days in the period multiplied by the number of bunkering tankers at the end of the period.   This figure does not take into account non-operating days due to either scheduled or unscheduled maintenance.

6. Special Purpose Vessels consists of the Orion, a 550 dwt tanker which is based in our Greek market. 

7. The Company owns one Aframax tanker, the Leader as a floating storage facility in the United Arab Emirates, a barge, the Mediterranean, as a floating storage facility in Greece and a small tanker, the Tapuit, as a floating storage facility in Northern Europe.  The Company also operates on-land storage facilities in Portland, Las Palmas, Tangiers, Panama, U.S.A. and Barcelona.

The ownership of storage facilities allows the Company to mitigate its risk of supply shortages. Generally, storage costs are included in the price of refined marine fuel quoted by local suppliers. The Company expects that the ownership of storage facilities will allow it to convert the variable costs of this storage fee mark-up per metric ton quoted by suppliers into fixed costs of operating its owned storage facilities, thus enabling the Company to spread larger sales volumes over a fixed cost base and to decrease its refined fuel costs.

8. Working capital is defined as current assets minus current liabilities. Working capital excluding cash and debt is defined as current assets minus cash and cash equivalents minus restricted cash minus current liabilities plus short-term borrowings plus current portion of long-term debt.

9. Net income as adjusted for non-cash items, such as depreciation, provision for doubtful accounts, restricted stock, amortization, deferred income taxes, loss on sale of vessels, net, impairment losses, unrealized loss/(gain) on derivatives and unrealized foreign exchange loss/(gain), net, is used to assist in evaluating our  ability to make quarterly cash distributions. Net income as adjusted for non-cash items is not recognized by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Company's performance required by accounting principles generally accepted in the United States.

First Quarter 2014 Dividend Announcement

On May 21, 2014, the Company's Board of Directors declared a first quarter 2014 dividend of $0.01 per share payable on June 18, 2014 to shareholders of record as of June 4, 2014. The dividend amount was determined in accordance with the Company's dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company's Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.

Conference Call and Webcast Information

Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast on Thursday, May 22, 2014 at 8:30 a.m. Eastern Time, to discuss its first quarter results.  Investors may access the webcast and related slide presentation, by visiting the Company's website at www.ampni.com, and clicking on the webcast link.  The conference call also may be accessed via telephone by dialing (888) 428-9473 (for U.S.-based callers) or (719) 457-2727 (for international callers) and enter the passcode: 2998855.  

A replay of the webcast will be available soon after the completion of the call and will be accessible on www.ampni.com.  A telephone replay will be available through June 5, 2014 by dialing (888) 203-1112 or (for U.S.-based callers) or (719) 457-0820 (for international callers) and enter the passcode: 2998855.

About Aegean Marine Petroleum Network Inc.

Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in 26 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore, Morocco, the Antwerp-Rotterdam-Amsterdam (ARA) region, Las Palmas, Tenerife, Panama, Hong Kong, Barcelona, US East Coast and Algeciras. The Company has also entered into a strategic alliance to extend its global reach to China. To learn more about Aegean, visit http://www.ampni.com.

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements.  The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business.  Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "expect" 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 our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements 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.

SOURCE Aegean Marine Petroleum Network Inc.



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