Box Ships Inc. Reports Second Quarter And Six Months Ended June 30, 2013 Results And Declares Quarterly Dividend Of $0.12 Per Common Share -- Revenues up 15% year over year in the second quarter of 2013

-- Net Income up 73% year over year in the second quarter of 2013

-- EBITDA up 27% year over year in the second quarter of 2013

ATHENS, Greece, Aug. 6, 2013 /PRNewswire/ -- Box Ships Inc. (NYSE: TEU) (the "Company"), a global shipping company specializing in the seaborne transportation of containers, announced today its results for the second quarter and six months ended June 30, 2013.


Three Months Ended June 30,

Six Months Ended June 30,

Financial Highlights

(Expressed in United States Dollars)

2012

2013

2012

2013

Time charter revenues

$15,441,436

$17,706,759

$31,524,149

$35,797,422

Amortization of above/below market time charters

524,942

1,313,071

1,016,946

2,611,713

Time charter revenues, adjusted1

$15,966,378

$19,019,830

$32,541,095

$38,409,135






EBITDA2

$7,344,047

$9,321,877

$17,350,606

$19,220,162

Adjusted EBITDA2

$8,148,354

$11,402,034

$18,925,891

$23,347,156






Net Income

$1,987,660

$3,431,573

$6,648,374

$7,448,858

Adjusted Net Income2

$2,791,967

$5,511,730

$8,223,659

$11,575,852






Earnings per common share (EPS), basic

$0.11

$0.12

$0.39

$0.28

Earnings per common share (EPS), diluted

$0.11

$0.11

$0.39

$0.26

Adjusted Earnings per common share, basic2

$0.16

$0.20

$0.49

$0.46

Adjusted Earnings per common share, diluted2

$0.16

$0.18

$0.49

$0.40

1 Time charter revenues, adjusted, is not a recognized measurement under generally accepted accounting principles in the United States of America ("U.S. GAAP" or "GAAP"). We believe that the presentation of Time charter revenues, adjusted is useful to investors because it presents the charter revenues recognized in the relevant period based on the contracted charter rates, excluding the amortization of above/below market time charters attached to vessels acquired. Please refer to the definition and reconciliation of this measurement to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP at the back of this release.


2 EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share ("Adjusted EPS") are not recognized measurements under GAAP. Please refer to the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP at the back of this release.

Mr. Michael Bodouroglou, Chairman, President and Chief Executive Officer of Box Ships Inc., commented:

"We are pleased to announce our ninth consecutive profitable quarter as a public company. We reported Adjusted EBITDA of $11.4 million for the second quarter of 2013, an increase of $3.3 million, or 40%, compared to the second quarter of 2012, and increased our Adjusted Net Income by 97% year over year to $5.5 million in the second quarter of 2013 from $2.8 million in the second quarter of 2012, despite the continued weakness in the mid-size segment of the containership market."

Mr. Bodouroglou concluded, "Since the end of the quarter, we have streamlined and strengthened our balance sheet, by completing a preferred share offering, retiring all the remaining Series B-1 Preferred Shares, and repaying $5.0 million of our loan to Paragon Shipping, which improves our free cash flow per common share. Despite the challenging containership market, we continue to execute on our business strategy."

Results of Operations

Three months ended June 30, 2013 compared to three months ended June 30, 2012

During the second quarter of 2013, we operated an average of 9 vessels. Our Net Income and Adjusted Net Income during the second quarter of 2013 were $3.4 million and $5.5 million, respectively, resulting in basic earnings per share of $0.12 and basic adjusted earnings per share of $0.20. EBITDA and Adjusted EBITDA for the second quarter of 2013 were $9.3 million and $11.4 million, respectively.

During the second quarter of 2012, we operated an average of 7.07 vessels. Our Net Income and Adjusted Net Income during the second quarter of 2012 were $2.0 million and $2.8 million, respectively, resulting in earnings per share of $0.11 and adjusted earnings per share of $0.16, on both a basic and diluted basis. EBITDA and Adjusted EBITDA for the second quarter of 2012 were $7.3 million and $8.1 million, respectively.

Net revenues

Net revenues represent charter hire earned, net of commissions. During the second quarter of 2013 and 2012, our vessels operated a total of 804 and 594 days, respectively, from a total of 819 and 643 calendar days, respectively. During the second quarter of 2013, we had 14 off-hire days related to the scheduled dry-docking of OOCL Hong Kong, which was completed in April 2013. Currently, all vessels in our fleet are employed under fixed rate time charters, having an average weighted remaining charter duration of 16 months (weighted by aggregate contracted charter hire). The Company reported net revenues for the second quarter of 2013 of $17.3 million, which increased by 14.8% compared to $15.1 million in the second quarter of 2012, due to the increased fleet size and vessel operating days period over period, which was partially offset by the lower re-chartering rates year over year for Box Trader and Box Voyager. Our net revenues are also net of the amortization of above/below market time charters, which decreased our revenues and net income for the second quarter of 2013 and 2012 by $1.3 million and $0.5 million, respectively, or $0.05 and $0.03 per common share, respectively. Our average time charter equivalent rate, or TCE rate, for the second quarter of 2013 was $20,872 per vessel per day, which was 14.4% below our TCE rate of $24,371 per vessel per day during the second quarter of 2012, due to the lower rates achieved on re-chartering our vessels. Our adjusted TCE rate was $22,506 per vessel per day in the second quarter of 2013, 10.9% lower than our adjusted TCE of $25,254 for the second quarter of 2012, due to the lower re-chartering rates. TCE rate is not a recognized measurement under GAAP. Please see the table at the back of this release for a reconciliation of TCE rates to time charter revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Voyage expenses

Voyage expenses for the second quarter of 2013 were flat year over year at $0.6 million, and mainly relate to war risk insurance costs, bunkers consumed by our vessels travelling to and from the drydocks and other crew costs reimbursable by the charterers.

Vessels operating expenses

Vessels operating expenses comprise crew wages and related costs, insurance and vessel registry costs, repairs and maintenance expenses (excluding dry-docking expenses), the cost of spares and consumable stores, regulatory fees, non-cash amortization of other intangible assets and other miscellaneous expenses. The amortization of other intangible assets for the second quarter of 2013 and 2012 amounted to $0.3 million and $0, respectively. During the second quarter of 2013, vessels operating expenses including the amortization of other intangible assets amounted to $4.5 million, or $4.2 million on an adjusted basis to exclude the amortization of other intangible assets, compared to $3.4 million during the second quarter of 2012, due to the increased number of vessels in our fleet year over year. On average, our vessels operating expenses for the second quarter of 2013 were $5,455 per vessel per day, or $5,134 per vessel per day on an adjusted basis, compared to $5,291 per vessel per day, in the second quarter of 2012, an improvement of approximately 3% period over period on a cash basis after adjusting for non-cash items.

Dry-docking expenses

During the second quarter of 2013, one of our vessels, the OOCL Hong Kong, completed its scheduled dry-docking, which resulted in 14 off-hire days and expenses amounting to $0.9 million. During the second quarter of 2012, two of our vessels, the CMA CGM Kingfish and CMA CGM Marlin, underwent their scheduled dry-docking, which resulted in 44 off-hire days and expenses amounting to $2.0 million.

Management fees charged by a related party

Management fees charged by Allseas Marine S.A (our "Manager" or "Allseas") for the second quarter of 2013 and 2012 were $0.7 million and $0.5 million, respectively, or $830 per vessel per day and $810 per vessel per day, respectively. The increase in management fees was due primarily to the increased average number of vessels period over period. Management fees charged by a related party represent fees for management and technical services in accordance with our management agreements. This fee is charged on a daily basis per vessel and is affected by the number of vessels in our fleet, the number of calendar days during the period, and the U.S. Dollar/Euro exchange rate at the beginning of each month.

Depreciation

Depreciation for our fleet for the second quarter of 2013 and 2012 was $3.8 million and $3.4 million, respectively, mainly due to the increased number of vessels period over period. Effective January 1, 2013, the Company revised its scrap rate estimate prospectively from $150 to $300 per lightweight ton. The change in accounting estimate does not have a retrospective effect in the financial statements previously reported. The effect of this change was to decrease depreciation expense and to increase net income by approximately $0.4 million, or $0.01 per basic common share for the three months ended June 30, 2013.

General and administrative expenses

General and administrative ("G&A") expenses for the second quarter of 2013 and 2012 were $1.5 million and $1.2 million, or $1,782 and $1,907 per vessel per day, respectively. The increase in G&A expenses period over period was due primarily to increased financial reporting fees, increased executive services fees and increased share-based compensation expense. During the second quarter of 2013 and 2012, expenses related to the provision of our executive services by our Manager amounted to $0.55 million and $0.45 million, respectively, and share-based compensation amounted to $0.5 million and $0.3 million, respectively.

Interest and finance costs

Interest and finance costs amounted to $2.1 million and $2.0 million for the second quarters of 2013 and 2012, respectively. This increase in interest and finance costs is due to an increase in our average borrowings outstanding period over period.

UNAUDITED CONSOLIDATED CONDENSED CASH FLOW INFORMATION

(Expressed in United States Dollars)







Six Months Ended June 30,



2012


2013

Net cash from Operating Activities

$

15,740,012

$

20,035,512

Net cash used in Investing Activities


(34,304,579)


-

Net cash from / (used in) Financing Activities


19,744,170


(2,957,463)

Net increase in cash and cash equivalents

$

1,179,603

$

17,078,049

Net cash from Operating Activities

Net cash from Operating Activities for the six months ended June 30, 2013 was $20.0 million. Our vessels generated positive cash flows from revenues, net of commissions, of $37.8 million, while we paid $17.8 million for expenses, of which $3.5 million relates to the payment of interest on our bank loans and our related party loan with Paragon Shipping Inc. ("Paragon Shipping").

Net cash from Operating Activities for the six months ended June 30, 2012 was $15.7 million. Our vessels generated positive cash flows from revenues, net of commissions, of $31.9 million, while we paid $16.2 million for expenses, of which $3.5 million relates to the payment of interest on our bank loans and our related party loan with Paragon Shipping.

Net cash used in Investing Activities

For the six months ended June 30, 2013, there was no cash used in investing activities. Net cash used in Investing Activities for the six months ended June 30, 2012, was $34.3 million, comprised of $31.2 million relating to the acquisition of OOCL Hong Kong, including attached intangibles, and $3.1 million relating to the advance payment for the acquisition of OOCL China, which was delivered to the Company on July 5, 2012.

Net cash from / (used in) Financing Activities

Net cash used in Financing Activities for the six months ended June 30, 2013, was $3.0 million. On March 18, 2013, we completed the public offering and issuance of 4,000,000 of our common shares, resulting in net proceeds of $19.9 million, net of underwriting discounts, commissions and other offering costs of $1.1 million in the aggregate. During the six months ended June 30, 2013, we repaid $13.4 million of our debt, paid financing costs of $0.1 million and paid dividends to our preferred and common shareholders of $0.9 million and $8.5 million, in the aggregate, respectively.

Net cash from Financing Activities for the six months ended June 30, 2012, was $19.7 million, consisting of the proceeds from the issuance of 1,333,333 units, each unit consisting of one 9.75% Series B Cumulative Redeemable Perpetual Preferred Share (the "Series B Preferred Shares") and one warrant to purchase one of our common shares, which amounted to $38.5 million in the aggregate, after deducting the payment of related costs of $0.1 million, along with the $8.9 million of our debt repayments and dividend payments to our common shareholders of $9.8 million.

Recent Developments:

Preferred Stock Offering:

On July 29, 2013, we completed the public offering of 558,333 shares of our 9.00% Series C Cumulative Redeemable Perpetual Preferred Shares (the "Series C Preferred Shares") at a public offering price of $24.00 per share, which resulted in net proceeds of $12.6 million, net of underwriting discounts and commissions of $0.5 million and estimated offering expenses of $0.3 million. Neige International Inc., a company controlled by Mr. Michael Bodouroglou, our Chairman, President and Chief Executive Officer, purchased $5.0 million of the Series C Preferred Shares, or 208,333 shares, sold in the offering at the public offering price showing his continued support to the Company. We used the net proceeds from the offering of $12.6 million and approximately $7.2 million of our cash reserves to redeem and retire all of our outstanding Series B-1 Preferred Shares.

Dividends on the Series C Preferred Shares accrue and are cumulative from the date of original issue and will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing October 1, 2013, when, as and if declared by our board of directors. Dividends will be payable at a rate equal to 9.00% per annum of the liquidation preference of $25.00 per share. The Series C Preferred Shares commenced trading on the New York Stock Exchange under the symbol "TEUPRC" on July 30, 2013.

Loan with Paragon Shipping:

On August 5, 2013, we prepaid $5.0 million to Paragon Shipping under our unsecured loan agreement with Paragon Shipping and reduced the outstanding loan amount to $6.0 million. The loan matures on April 19, 2014.

Liquidity:

As of June 30, 2013, our cash and restricted cash (current and non-current) amounted to $34.2 million in the aggregate, of which $10.0 million is considered restricted for minimum liquidity purposes under our loan agreements. As of June 30, 2013, we had total outstanding indebtedness of $202.9 million, of which $34.7 million is scheduled to be repaid in the forthcoming 12-month period, of which $10.0 million has already been repaid as of August 6, 2013, which includes the $5.0 million prepayment to Paragon Shipping, as discussed above. Furthermore, as of June 30, 2013, we were in compliance with all of the covenants contained in our loan agreements, as amended. In addition, we have no borrowing capacity under our existing loan facilities and no capital commitments. We anticipate that our current financial resources, together with cash generated from operations will be sufficient to fund the operations of our current fleet, including our working capital requirements, for the next 12 months.   

Dividends:

On August 6, 2013, our Board of Directors declared a dividend of $0.12 per common share, with respect to the second quarter of 2013, payable on or about September 17, 2013, to common shareholders of record as of the close of business on September 10, 2013. This is our ninth consecutive quarterly dividend to common shareholders since we became a public company in April 2011.

On July 1, 2013, we paid a dividend of $0.5 million with respect to our Series B-1 Preferred Shares, for the period from April 1, 2013 to June 30, 2013, to Neige International, the only holder of our Series B-1 Preferred Shares. As of June 30, 2013, 640,692 Series B-1 Preferred Shares were outstanding. In addition, in July 2013, we paid dividends of $0.1 million to Neige International, in connection to the redemption of Series B-1 Preferred Shares, discussed above.

The declaration and payment of any dividend on our common shares will be determined at the sole discretion of our Board of Directors. We cannot assure you that we will pay dividends in the amounts stated above or at all, and our ability to pay dividends will be subject to the rights of holders of our Series C Preferred Shares, which accrue dividends cumulatively at a rate of 9.00% per annum per $25.00 stated liquidation preference per Series C Preferred Share and are payable on January 1, April 1, July 1 and October 1 of each year, the restrictions in our loan agreements, the provisions of Marshall Islands law and other factors to be considered by our Board of Directors.

Chartering Update and Strategy:

Pursuant to our chartering strategy, we focus on containerships with carrying capacities ranging from 1,700 TEU to 7,000 TEU employed on short- to medium-term time charters of one to five years with staggered maturities, which provide us with the benefit of stable cash flows from a diversified portfolio of charterers, while preserving the flexibility to capitalize on potentially rising rates when the current time charters expire. Based on the earliest redelivery dates, the Company has secured under such contracts 81% and 44% of its fleet capacity for the remainder of 2013 and 2014, respectively. For future updates on the employment of our vessels, please visit the employment section of our website at www.box-ships.com/fleet-employment.php. The information contained on the Company's website does not constitute part of this press release.   

Fleet List:

The following table provides additional information about our fleet as of August 6, 2013.

Vessel

Year Built

TEU

Charterer

Daily Gross Charter Rate (6)

Charter Expiration

Notes

Box Voyager

2010

3,426

CNC

$6,850

September 2013

1

Box Trader

2010

3,426

Hapag Lloyd

$6,750

September 2013

2

CMA CGM Kingfish

2007

5,095

CMA CGM

$23,000

April 2014

3

CMA CGM Marlin

2007

5,095

CMA CGM

$23,000

May 2014

3

Maersk Diadema

2006

4,546

Maersk

$28,000

January 2014

3

Maule

2010

6,589

CSAV Valparaiso

$38,000

May 2016

4

MSC Emma

2004

5,060

MSC

$28,500

August 2014

5

OOCL Hong Kong

1995

5,344

OOCL

$26,800

June 2015

7

OOCL China

1996

5,344

OOCL

$26,800

July 2015

7

Total


43,925





Notes:


1)

The charterer has the option to extend the term of the charter up until March 2014 at the same gross daily charter rate.

2)

 The charterer has the option to extend the term of the charter by up to an additional two months at the same gross daily charter rate. The charterer also has the option to extend the term of the charter by an additional one-year term, plus or minus 30 days, at a gross daily charter rate of $15,000.

3)

The charterer has the option to increase or decrease the term of the charter by 45 days.

4)

The charterer has the option to increase or decrease the term of the charter by 30 days. The charterer also has the option to purchase the vessel upon expiration of the charter, provided that the option is exercised at least six months prior to the expiration of the term of the charter, for a purchase price of $57.0 million, less a 0.5% purchase commission payable to parties unaffiliated to us.

5)

The charterer has the option to increase or decrease the term of the charter by 30 days. The charterer also has the option to extend the term of the charter by an additional one-year term at the same gross daily charter rate.

6)

Daily gross charter rates do not reflect commissions payable by us to third party chartering brokers and our Manager, totaling 4.75% for Box Voyager, 1.25% for each of CMA CGM Kingfish, CMA CGM Marlin, OOCL Hong Kong and OOCL China, and 2.5% for each of the other vessels in our fleet, including, in each case, 1.25% to Allseas.

7)

The charterer has the option to increase or decrease the term of the charter by 30 days.

Conference Call and Webcast details:

The Company's management will host a conference call to discuss its second quarter and six months ended June 30, 2013 results on August 7, 2013 at 8:00 am ET.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1-877-300-8521 (USA) or +1-412-317-6026 (international).

A replay of the conference call will be available for seven days and can be accessed by dialing +1-877-870-5176 (domestic) and +1-858-384-5517 (international) and using passcode 105683.

There will also be a simultaneous live webcast over the Internet, through the Company's website (www.box-ships.com). Participants in the live webcast should register on the website approximately 15 minutes prior to the start of the webcast.

About Box Ships Inc.:

Box Ships Inc. is an Athens, Greece-based international shipping company specializing in the transportation of containers. The Company's current fleet consists of nine containerships with a total carrying capacity of 43,925 TEU and a TEU weighted average age of 8.5 years. The Company's shares trade on the New York Stock Exchange under the symbol "TEU."

Cautionary Statement Regarding Forward-Looking Statement

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

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for container shipping capacity, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

Contacts:

 

Box Ships Inc.

Robert Perri, CFA

Chief Financial Officer

Tel. +30 (210) 8914600

E-mail: ir@box-ships.com

 

 

Investor Relations / Media

Allen & Caron Inc.

Michael Mason (Investors)

Tel. +1 (212) 691-8087

E-mail: michaelm@allencaron.com

 

Len Hall (Media)

Tel. +1 (949) 474-4300

E-mail: len@allencaron.com

 

- Tables Follow –

 



SUMMARY FLEET INFORMATION

Three Months Ended June 30,

Six Months Ended June 30,

2012

2013

2012

2013

FLEET DATA

Average number of vessels (1)

7.07

9.00

7.03

9.00

Calendar days for fleet (2)

643

819

1,280

1,629

Less:





Scheduled off-hire

44

14

44

19

Unscheduled off-hire

5

1

6

13

Operating days for fleet (3)

594

804

1,230

1,597

Fleet utilization (4)

92.4%

98.2%

96.1%

98.0%

AVERAGE DAILY RESULTS

(Expressed in United States Dollars)

Time charter equivalent (5)

$24,371

$20,872

$24,308

$21,038

Vessel operating expenses (6)

$5,291

$5,455

$5,393

$5,548

Management fees charged by a related party (7)

$810

$830

$811

$835

General and administrative expenses (8)

$1,907

$1,782

$2,030

$1,848

Total vessel operating expenses (9)

$8,008

$8,067

$8,234

$8,231

(1)

Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of our fleet during the period divided by the number of calendar days in the period.

(2)

Calendar days are the total days we possessed the vessels in our fleet for the relevant period.

(3)

Operating days for the fleet are the total calendar days the vessels were in our possession for the relevant period after subtracting off-hire days for scheduled dry-dockings or special or intermediate surveys and unscheduled off-hire days associated with repairs and other operational matters. Any idle days relating to the days a vessel remains unemployed are included in unscheduled off-hire days.

(4)

Fleet utilization is the percentage of time that our vessels were able to generate revenues and is determined by dividing operating days by fleet calendar days for the relevant period.

(5)

Time charter equivalent ("TCE"), is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing time charter revenues, net of commissions and voyage expenses by operating days for the relevant time period. Voyage expenses primarily consist of extra war risk insurance, port, canal, fuel costs and other crew costs reimbursable by the charterers that are unique to a particular voyage. TCE is a non-GAAP standard shipping industry performance measure used primarily to compare daily earnings generated by vessels despite changes in the mix of charter types (i.e., spot voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods.            

(6)

Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, other than extra war risk insurance, maintenance, repairs and amortization of intangibles, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(7)

Daily management fees are calculated by dividing management fees charged by a related party by fleet calendar days for the relevant time period.

(8)

Daily general and administrative expenses are calculated by dividing general and administrative expense by fleet calendar days for the relevant time period.

(9)

Total vessel operating expenses ("TVOE") are a measurement of our total expenses, excluding dry-docking expenses, associated with operating our vessels. TVOE is the sum of vessel operating expenses, management fees and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

 

Time Charter Equivalent Reconciliation

(Expressed in United States Dollars)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2013

2012

2013

Time Charter Revenues

$15,441,436

$17,706,759

$31,524,149

$35,797,422

Commissions

(343,172)

(367,497)

(702,296)

(733,597)

Voyage Expenses

(622,113)

(557,887)

(923,554)

(1,466,579)

Total Revenue, net of voyage expenses

$14,476,151

$16,781,375

$29,898,299

$33,597,246

Plus: Amortization of above/below market time charters

524,942

1,313,071

1,016,946

2,611,713

Total Revenue, net of voyage expenses, adjusted

$15,001,093

$18,094,446

$30,915,245

$36,208,959

Total operating days

594

804

1,230

1,597

Time Charter Equivalent

$24,371

$20,872

$24,308

$21,038

Time Charter Equivalent, adjusted(10)

$25,254

$22,506

$25,134

$22,673

 

(10)

Time charter equivalent, adjusted ("TCE adjusted"), is a non-GAAP measure and is determined by dividing time charter revenues, net of commissions, voyage expenses and amortization of above/below market time charters attached to the vessels acquired, by operating days for the relevant time period. Voyage expenses primarily consist of extra war risk insurance, port, canal, fuel costs and other crew costs reimbursable by the charterers that are unique to a particular voyage. We believe that the presentation of TCE adjusted is useful to investors because it presents the TCE earned in the relevant period based on the contracted charter rates, excluding the amortization of above/below market time charters attached to the vessels acquired. The Company's definition of TCE adjusted may not be the same as that used by other companies in the shipping or other industries.

 

Reconciliation of U.S. GAAP Financial Information to Non-GAAP measures
(Expressed in United States Dollars, except for share data)




Net Income / Adjusted Net Income(1)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2013

2012

2013

Net Income

$1,987,660

$3,431,573

$6,648,374

$7,448,858

Plus: Amortization of intangibles

524,942

1,576,432

1,016,946

3,135,541

Plus: Share-based compensation

279,365

503,725

558,339

991,453

Adjusted Net Income

$2,791,967

$5,511,730

$8,223,659

$11,575,852






EBITDA / Adjusted EBITDA(1)





Net income

$1,987,660

$3,431,573

$6,648,374

$7,448,858

Plus: Net Interest expense

1,985,341

2,116,697

3,986,462

4,265,557

Plus: Depreciation

3,371,046

3,773,607

6,715,770

7,505,747

EBITDA

$7,344,047

$9,321,877

$17,350,606

$19,220,162

Plus: Amortization of intangibles

524,942

1,576,432

1,016,946

3,135,541

Plus: Share-based compensation

279,365

503,725

558,339

991,453

Adjusted EBITDA

$8,148,354

$11,402,034

$18,925,891

$23,347,156

 

Earnings per Common Share

Three Months Ended June 30,

Six Months Ended June 30,

2012

2013

2012

2013

Net income

$1,987,660

$3,431,573

$6,648,374

$7,448,858

Less: Dividends to Series B-1 Preferred Shares

(205,833)

(468,506)

(205,833)

(937,012)

Less: Net income attributable to non-vested share awards

(32,428)

(63,801)

(122,860)

(152,600)

Net income available to common shareholders

$1,749,399

$2,899,266

$6,319,681

$6,359,246






Weighted average number of common shares, basic

16,028,878

24,423,260

16,014,439

22,729,343






Earnings per common share, basic

$0.11

$0.12

$0.39

$0.28






Net income

$1,987,660

$3,431,573

$6,648,374

$7,448,858

Less: Dividends to Series B-1 Preferred Shares

(205,833)

(468,506)

(205,833)

(937,012)

Less: Net income attributable to non-vested share awards

(32,428)

(63,801)

(122,860)

(152,600)

Plus: Dividends to Series B-1 Preferred Shares, if converted to common shares

-

468,506

-

937,012

Net income available to common shareholders

$1,749,399

$3,367,772

$6,319,681

$7,296,258






Weighted average number of common shares, diluted

16,028,878

30,169,817

16,014,439

28,475,900






Earnings per common share, diluted

$0.11

$0.11

$0.39

$0.26

 


Adjusted Earnings per Common Share(1)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2013

2012

2013

Adjusted Net income

$2,791,967

$5,511,730

$8,223,659

$11,575,852

Less: Dividends to Series B-1 Preferred Shares

(205,833)

(468,506)

(205,833)

(937,012)

Less: Adjusted Net income attributable to non-vested share awards

(47,066)

(108,591)

(152,901)

(249,314)

Adjusted Net income available to common shareholders

$2,539,068

$4,934,633

$7,864,925

$10,389,526






Weighted average number of common shares, basic

16,028,878

24,423,260

16,014,439

22,729,343






Adjusted Earnings per common share, basic

$0.16

$0.20

$0.49

$0.46






Adjusted Net income

$2,791,967

$5,511,730

$8,223,659

$11,575,852

Less: Dividends to Series B-1 Preferred Shares

(205,833)

(468,506)

(205,833)

(937,012)

Less: Adjusted Net income attributable to non-vested share awards

(47,066)

(108,591)

(152,901)

(249,314)

Plus: Dividends to Series B-1 Preferred Shares, if converted to common shares

-

468,506

-

937,012

Adjusted Net income available to common shareholders

$2,539,068

$5,403,139

$7,864,925

$11,326,538






Weighted average number of common shares, diluted

16,028,878

30,169,817

16,014,439

28,475,900






Adjusted Earnings per common share, diluted

$0.16

$0.18

$0.49

$0.40



(1)

The Company considers EBITDA to represent net income plus net interest expense and depreciation and amortization. The Company's management uses EBITDA as a performance measure. The Company believes that EBITDA is useful to investors because the shipping industry is capital intensive and may involve significant financing costs. The Company excluded non-cash items in relation to the amortization of intangibles and share-based compensation to derive Adjusted EBITDA because the Company believes that these adjustments provide additional information on the fleet operational results which may be useful to investors.



The Company excluded non-cash items in relation to the amortization of intangibles and share-based compensation from net income to derive to Adjusted Net Income and Adjusted EPS. The Company believes that Adjusted Net Income and Adjusted EPS provide additional information on the fleet operational results which may be useful to investors.



EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are items not recognized by U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a Company's operating performance required by U.S. GAAP. The Company's definition of EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS may not be the same as that used by other companies in the shipping or other industries.




BOX SHIPS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in United States Dollars, except for share data)


















Three Months Ended June 30,


Six Months Ended June 30,


2012


2013


2012


2013









REVENUES:








Time charter revenues (1)

15,441,436


17,706,759


31,524,149


35,797,422

Commissions

(343,172)


(367,497)


(702,296)


(733,597)

Net Revenues

15,098,264


17,339,262


30,821,853


35,063,825









EXPENSES:








Voyage expenses

622,113


557,887


923,554


1,466,579

Vessels operating expenses (2)

3,402,401


4,467,848


6,902,616


9,037,070

Dry-docking expenses

2,006,176


869,334


2,006,176


1,010,230

Management fees charged by a related party

521,111


679,841


1,038,586


1,360,512

Depreciation

3,371,046


3,773,607


6,715,770


7,505,747

General and administrative expenses (3)

1,226,175


1,459,754


2,598,707


3,010,594

Operating income

3,949,242


5,530,991


10,636,444


11,673,093









OTHER INCOME (EXPENSES):








Interest and finance costs

(1,989,418)


(2,118,066)


(3,997,950)


(4,268,518)

Interest income

4,077


1,369


11,488


2,961

Foreign currency gain / (loss), net

23,759


17,279


(1,608)


41,322

Total other expenses, net

(1,961,582)


(2,099,418)


(3,988,070)


(4,224,235)









NET INCOME

1,987,660


3,431,573


6,648,374


7,448,858









Other Comprehensive Income / (Loss)








Unrealized (loss) / gain on cash flow hedges

(146,934)


662,737


(216,807)


774,846

Total Other Comprehensive Income / (Loss)

(146,934)


662,737


(216,807)


774,846









COMPREHENSIVE INCOME

1,840,726


4,094,310


6,431,567


8,223,704









Earnings per common share, basic

$0.11


$0.12


$0.39


$0.28

Earnings per common share, diluted

$0.11


$0.11


$0.39


$0.26

 

Footnotes:


(1)

includes amortization of below and above market acquired time charters of $524,942 and $1,313,071 for the three months ended June 30, 2012 and 2013, respectively, and $1,016,946 and $2,611,713 for the six months ended June 30, 2012 and 2013, respectively



(2)

includes amortization of other intangible assets of $0 and $263,361 for the three months ended June 30, 2012 and 2013, respectively, and $0 and $523,828 for the six months ended June 30, 2012 and 2013, respectively



(3)

includes share-based compensation of $279,365 and $503,725 for the three months ended June 30, 2012 and 2013, respectively, and $558,339 and $991,453 for the six months ended June 30, 2012 and 2013, respectively




BOX SHIPS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in United States Dollars)













December 31, 2012


June 30, 2013

ASSETS





Cash and restricted cash (current and non-current)


17,141,452


34,219,501

Other current assets


6,696,714


7,899,323

Vessels and other fixed assets, net and other non-current assets


421,225,703


410,181,471






Total Assets


445,063,869


452,300,295






LIABILITIES AND STOCKHOLDERS' EQUITY





Current portion of long-term debt


36,700,000


34,700,000

Other current liabilities


5,959,883


7,744,719

Long-term debt, net of current portion


179,550,000


168,200,000

Other non-current liabilities


2,074,703


1,142,629

Total stockholders' equity


220,779,283


240,512,947






Total Liabilities and Stockholders' Equity


445,063,869


452,300,295






 

SOURCE Box Ships Inc.



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http://www.box-ships.com

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