Danaos Corporation Reports Results for the Fourth Quarter and Year Ended December 31, 2019
ATHENS, Greece, Feb. 10, 2020 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the fourth quarter and the year ended December 31, 2019.
Highlights for the Fourth Quarter and Year Ended December 31, 2019:
- Adjusted net income1 of $38.0 million, or $2.01 per share2, for the three months ended December 31, 2019 compared to $36.6 million, or $2.45 per share2, for the three months ended December 31, 2018, an increase of 3.8%. Adjusted net income1 of $148.7 million, or $9.17 per share2, for the year ended December 31, 2019 compared to $131.2 million, or $12.35 per share2, for the year ended December 31, 2018, an increase of 13.3%.
- Operating revenues of $110.2 million for the three months ended December 31, 2019 compared to $115.6 million for the three months ended December 31, 2018, a decrease of 4.7%. Operating revenues of $447.2 million for the year ended December 31, 2019 compared to $458.7 million for the year ended December 31, 2018, a decrease of 2.5%.
- Adjusted EBITDA1 of $78.1 million for the three months ended December 31, 2019 compared to $80.2 million for the three months ended December 31, 2018, a decrease of 2.6%. Adjusted EBITDA1 of $310.6 million for the year ended December 31, 2019 compared to $317.8 million for the year ended December 31, 2018, a decrease of 2.3%.
- Total contracted operating revenues were $1.34 billion as of December 31, 2019, with charters extending through 2028 and remaining average contracted charter duration of 4.1 years, weighted by aggregate contracted charter hire.
- Charter coverage of 86% for the next 12 months based on current operating revenues and 68% in terms of contracted operating days.
- Agreed to acquire one 8,463 TEU container vessel in October 2019 due to be delivered to us between March and May 2020 and acquired one 8,626 TEU container vessel in January 2020. Both vessels have been fixed on 2 year charters and are expected to contribute $12 million to EBITDA on an annualized basis.
Three Months and Year Ended December 31, 2019 | |||||||||||||||
Financial Summary - Unaudited | |||||||||||||||
(Expressed in thousands of United States dollars, except per share amounts) | |||||||||||||||
Three months | Three months | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues | $110,204 | $115,631 | $447,244 | $458,732 | |||||||||||
Net income/(loss) | $33,817 | $(180,983) | $131,253 | $(32,936) | |||||||||||
Adjusted net income1 | $37,969 | $36,605 | $148,675 | $131,186 | |||||||||||
Earnings/(loss) per share, diluted2 | $1.79 | $(12.12) | $8.09 | $(3.10) | |||||||||||
Adjusted earnings per share, diluted1,2 | $2.01 | $2.45 | $9.17 | $12.35 | |||||||||||
Diluted weighted average number of shares (in thousands)2 | 18,927 | 14,939 | 16,221 | 10,623 | |||||||||||
Adjusted EBITDA1 | $78,118 | $80,171 | $310,565 | $317,848 | |||||||||||
1 Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net | |||||||||||||||
2 Earnings per share and weighted average number of shares give retroactive effect to the reverse stock split of 1-for-14 implemented | |||||||||||||||
Danaos' CEO Dr. John Coustas commented:
"We are pleased to report improved earnings for the year ended December 31, 2019. The Company's adjusted net income of $148.7 million for 2019 increased by $17.5 million, or 13.3%, compared to adjusted net income of $131.2 million for 2018. This improvement was primarily the result of a $13.7 million decrease in total operating costs and a $15.1 million decrease in net finance expenses, partially offset by an $11.5 million decrease in operating revenues. Adjusted EBITDA for 2019 was $310.6 million, a slight decrease from $317.8 million for 2018.
"The container market, particularly for vessels larger than 5,500 TEU, strengthened throughout the course of 2019 as container volumes across all main trade lanes increased. Notwithstanding any near term headwinds related to the rapidly evolving situation in China, long term fundamentals remain intact, and the market will continue to rebalance itself through a combination of moderate trade growth, slowing fleet growth and a reduction in vessel speeds due to new and ongoing environmental initiatives. Estimates for world GDP and trade growth are in flux due to the uncertainty around the impacts of the spread of the coronavirus in China. The current drop in demand is being addressed by canceled sailings by liner companies. However, we expect this dynamic to be short term in nature and result in a demand surge when supply chains resume. In the meantime, work stoppages and slowdowns at shipyards in China will lead to delays in newbuilding deliveries, scrubber installations and dry-docking schedules.
"With respect to the new IMO 2020 sulphur limits that went into effect on January 1, 2020, the current price differential between high and low sulphur fuel oil continues to support the investment rationale for scrubbers. We have already completed the installation of scrubbers on four out of 11 vessels, and we will benefit from these scrubber installations through fixed premiums on charter rates for 3-4 year fixtures that enhance cash flows and contract coverage. We are well insulated from temporary market disruptions with high charter coverage of 86% in terms of operating revenues and 68% in terms of operating days over the next 12 months, which protects our strong cash flows.
"Danaos also is well-positioned to benefit from a rising market in the medium term. While our larger vessels remain on multi-year charters, with some charters extending through 2025, a large number of our small to mid-sized vessels will be coming off existing charters over the next two years, creating potential for incremental cash generation. Additionally, our successful equity offering in November of 2019 puts us in a strong position to opportunistically pursue growth initiatives and we have already acquired two 8,500 TEU container vessels since completing the offering. These vessels have both been fixed on two year charters and are expected to contribute an incremental $12 million of EBITDA on an annualized basis, ensuring an accretive return on our investment. Bank financing for these acquisitions has also been arranged.
"Danaos has consistently remained committed to investing in operational excellence and technological innovation, which allows us to be forerunners in preparing for environmental requirements that will shape our industry in the coming decade. Our commitment has enabled us to maintain our leadership position in the container shipping industry throughout multiple market cycles. These are the attributes that will enhance shareholder value far and above the steel value of our fleet."
Three months ended December 31, 2019 compared to the three months ended December 31, 2018
During the three months ended December 31, 2019 and December 31, 2018, Danaos had an average of 55 containerships. Our fleet utilization for the three months ended December 31, 2019 was 97.0% compared to 97.9% for the three months ended December 31, 2018.
Our adjusted net income amounted to $38.0 million, or $2.01 per share, for the three months ended December 31, 2019 compared to $36.6 million, or $2.45 per share, for the three months ended December 31, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14 implemented on May 2, 2019). We have adjusted our net income in the three months ended December 31, 2019 for non-cash fees amortization and accrued financing fees of $4.2 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $1.4 million in adjusted net income for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 is attributable mainly to a $5.2 million decrease in total operating expenses, a $1.0 million decrease in net finance expenses and a $0.6 million increase in the operating performance of our equity investment in Gemini, which were partially offset by a $5.4 million decrease in operating revenues.
On a non-adjusted basis, our net income amounted to $33.8 million, or $1.79 earnings per diluted share, for the three months ended December 31, 2019 compared to net loss of $181.0 million (including impairment loss described below), or $12.12 loss per diluted share, for the three months ended December 31, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14).
Operating Revenues
Operating revenues decreased by 4.7%, or $5.4 million, to $110.2 million in the three months ended December 31, 2019 from $115.6 million in the three months ended December 31, 2018.
Operating revenues for the year ended December 31, 2019 reflect:
- a $3.6 million decrease in revenues in the three months ended December 31, 2019 compared to the three months ended December 31, 2018, mainly due to the re-chartering of certain of our vessels that concluded long-term charters over the last twelve months and were re-deployed at lower spot rates in the three months ended December 31, 2019; and
- a $1.8 million decrease in revenues due to lower fleet utilization of our vessels in the three months ended December 31, 2019 compared to the three months ended December 31, 2018, mainly due to scrubber installation related off hire days.
Vessel Operating Expenses
Vessel operating expenses decreased by 4.3%, or $1.1 million, to $24.5 million in the three months ended December 31, 2019 from $25.6 million in the three months ended December 31, 2018. The average daily operating cost per vessel for vessels on time charter was $5,215 per day for the three months ended December 31, 2019 compared to $5,446 per day for the three months ended December 31, 2018. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 9.6%, or $2.6 million, to $24.4 million in the three months ended December 31, 2019 from $27.0 million in the three months ended December 31, 2018 mainly due to decreased depreciation expense for 10 vessels for which we recorded an impairment charge on December 31, 2018.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs decreased by $0.1 million, to $2.2 million in the three months ended December 31, 2019 from $2.3 million in the three months ended December 31, 2018. The decrease was mainly due to a decreased number of vessels dry-docked.
General and Administrative Expenses
General and administrative expenses decreased by $0.9 million, to $7.0 million in the three months ended December 31, 2019, from $7.9 million in the three months ended December 31, 2018. The decrease was mainly due to decreased remuneration expenses.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by $0.2 million, to $2.8 million in the three months ended December 31, 2019 from $3.0 million in the three months ended December 31, 2018.
Impairment Loss
We recognized an impairment loss of $210.7 million in relation to 10 of our vessels in the three months ended December 31, 2018 while we did not record any impairment loss in the three months ended December 31, 2019.
Interest Expense and Interest Income
Interest expense decreased by 11.4%, or $2.2 million, to $17.1 million in the three months ended December 31, 2019 from $19.3 million in the three months ended December 31, 2018. The decrease in interest expense is attributable to:
(i) a $0.8 million decrease in interest expense due to a $109.6 million decrease in our average debt (including leaseback obligations), to $1,575.1 million in the three months ended December 31, 2019, compared to $1,684.7 million in the three months ended December 31, 2018, partially offset by an increase in debt service cost by approximately 0.33%; and
(ii) a $1.4 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of December 31, 2019, our bank debt outstanding, gross of deferred finance costs, was $1,423.8 million and leaseback obligation was $138.2 million compared to bank debt of $1,666.2 million outstanding as of December 31, 2018.
Interest income increased by $0.2 million to $1.7 million in the three months ended December 31, 2019 compared to $1.5 million in the three months ended December 31, 2018.
Other finance costs, net
Other finance costs, net decreased by $0.1 million to $0.3 million in the three months ended December 31, 2019 compared to $0.4 million in the three months ended December 31, 2018.
Equity income on investments
Equity income on investments increased by $0.6 million to $1.1 million in the three months ended December 31, 2019 compared to $0.5 million in the three months ended December 31, 2018 due to the improved operating performance of Gemini Shipholdings Corporation ("Gemini"), in which the Company has a 49% shareholding interest.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps decreased by $1.4 million to $0.9 million in the three months ended December 31, 2019 compared to $2.3 million in the three months ended December 31, 2018 due to the accelerated amortization of accumulated other comprehensive loss recognized in the three month period ended December 31, 2018.
Other income/(expenses), net
Other income/(expenses), net was $0.1 million in income in both the three months ended December 31, 2019 and 2018.
Adjusted EBITDA
Adjusted EBITDA decreased by 2.6%, or $2.1 million, to $78.1 million in the three months ended December 31, 2019 from $80.2 million in the three months ended December 31, 2018. As described above, the decrease is mainly attributable to a $5.4 million decrease in operating revenues, which was partially offset by a $2.7 million decrease in operating expenses and a $0.6 million increase in operating performance on our equity investments. Adjusted EBITDA for the three months ended December 31, 2019 is adjusted for stock based compensation of $1.2 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Year ended December 31, 2019 compared to the year ended December 31, 2018
During the year ended December 31, 2019 and December 31, 2018, Danaos had an average of 55 containerships. Our fleet utilization for the year ended December 31, 2019 was 98.3% compared to 96.8% for the year ended December 31, 2018.
Our adjusted net income amounted to $148.7 million, or $9.17 per share, for the year ended December 31, 2019 compared to $131.2 million, or $12.35 per share, for the year ended December 31, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14 implemented on May 2, 2019). We have adjusted our net income in the year ended December 31, 2019 for non-cash fees amortization and accrued financing fees of $17.4 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $17.5 million in adjusted net income for the year ended December 31, 2019 compared to the year ended December 31, 2018 is attributable to a $15.1 million decrease in net finance expenses, a $13.7 million decrease in total operating expenses and a $0.2 million increase in the operating performance of our equity investment in Gemini, which were partially offset by a $11.5 million decrease in operating revenue.
On a non-adjusted basis, our net income amounted to $131.2 million, or $8.09 per diluted share, for the year ended December 31, 2019 compared to a net loss of $32.9 million (including gain on debt extinguishment, impairment loss and refinancing-related professional fees described below), or $3.10 loss per diluted share, for the year ended December 31, 2018 (after giving retroactive effect to the reverse stock split of 1-for-14).
Operating Revenues
Operating revenues decreased by 2.5%, or $11.5 million, to $447.2 million in the year ended December 31, 2019 from $458.7 million in the year ended December 31, 2018.
Operating revenues for the year ended December 31, 2019 reflect:
- a $13.6 million decrease in revenues in the year ended December 31, 2019 compared to the year ended December 31, 2018, mainly due to the re-chartering of certain of our vessels that concluded long-term charters over the last twelve months and were re-deployed at lower spot rates in the year ended December 31, 2019; and
- a $2.1 million increase in revenues due to higher fleet utilization of our vessels in the year ended December 31, 2019 compared to the year ended December 31, 2018.
Vessel Operating Expenses
Vessel operating expenses decreased by 2.0%, or $2.1 million, to $102.5 million in the year ended December 31, 2019 from $104.6 million in the year ended December 31, 2018. The average daily operating cost per vessel for vessels on time charter was $5,506 per day for the year ended December 31, 2019 compared to $5,619 per day for the year ended December 31, 2018. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 10.5%, or $11.3 million, to $96.5 million in the year ended December 31, 2019 from $107.8 million in the year ended December 31, 2018 mainly due to decreased depreciation expense for 10 vessels for which we recorded an impairment charge on December 31, 2018.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs decreased by $0.5 million, to $8.7 million in the year ended December 31, 2019 compared to $9.2 million in the year ended December 31, 2018. The decrease was mainly due to a decreased number of vessels dry-docked.
General and Administrative Expenses
General and administrative expenses increased by $0.5 million, to $26.8 million in the year ended December 31, 2019, from $26.3 million in the year ended December 31, 2018. The increase was mainly due to increased share based compensation costs.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by $0.6 million, to $11.6 million in the year ended December 31, 2019 from $12.2 million in the year ended December 31, 2018. The decrease was mainly due to decreased bunkering expenses.
Impairment Loss
We recognized an impairment loss of $210.7 million in relation to 10 of our vessels in the year ended December 31, 2018 while we did not record any impairment in the year ended December 31, 2019.
Interest Expense and Interest Income
Interest expense decreased by 15.9%, or $13.6 million, to $72.1 million in the year ended December 31, 2019 from $85.7 million in the year ended December 31, 2018. The decrease in interest expense is attributable to:
(i) a $28.2 million decrease in interest expense on two of our credit facilities for which we recognized an interest expense accrual in the third quarter of 2018, which has been classified on our balance sheet under "Accumulated accrued interest" and represents future interest expense for the relevant facilities that has been recognized in advance as a result of the application of TDR accounting in connection with our 2018 debt refinancing;
(ii) a $12.7 million increase in interest expense due to an increase in debt service cost of approximately 1.89%, partially offset by a $435.0 million decrease in our average debt (including leaseback obligations), to $1,616.0 million in the year ended December 31, 2019, compared to $2,051.0 million in the year ended December 31, 2018; and
(iii) a $1.9 million increase in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of December 31, 2019, our bank debt outstanding, gross of deferred finance costs, was $1,423.8 million and leaseback obligation was $138.2 million compared to bank debt of $1,666.2 million outstanding as of December 31, 2018.
Interest income increased by $0.6 million to $6.4 million in the year ended December 31, 2019 compared to $5.8 million in the year ended December 31, 2018.
Other finance costs, net
Other finance costs, net decreased by $0.3 million, to $2.7 million in the year ended December 31, 2019 from $3.0 million in the year ended December 31, 2018.
Equity income on investments
Equity income on investments increased by $0.2 million to $1.6 million in the year ended December 31, 2019 compared to $1.4 million in the year ended December 31, 2018 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.
Gain on debt extinguishment
The gain on debt extinguishment of $116.4 million in the year ended December 31, 2018 related to our 2018 debt refinancing and consists of debt principal reduction net of refinancing related fees.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps decreased by $1.5 million to $3.6 million in the year ended December 31, 2019 compared to $5.1 million in the year ended December 31, 2018 mainly due to the accelerated amortization of accumulated other comprehensive loss recognized in the year ended December 31, 2018.
Other income/(expenses), net
Other income/(expenses), net was $0.6 million in income in the year ended December 31, 2019 compared to $50.5 million in expenses in the year ended December 31, 2018 mainly due to $51.3 million of refinancing-related professional fees in the prior year.
Adjusted EBITDA
Adjusted EBITDA decreased by 2.3%, or $7.2 million, to $310.6 million in the year ended December 31, 2019 from $317.8 million in the year ended December 31, 2018. As described above, this decrease is mainly attributable to a $11.5 million decrease in operating revenue and a $1.2 million increase in other finance costs, which were partially offset by a $5.3 million decrease in operating expenses and a $0.2 million increase in operating performance on our equity investments. Adjusted EBITDA for the year ended December 31, 2019 is adjusted for stock based compensation of $4.2 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Recent Developments
On December 2, 2019, we completed the sale of 9,418,080 shares in the public offering for aggregate gross proceeds of $56.5 million. We will use the net proceeds of the offering for capital expenditures, including vessel acquisitions, and for other general corporate purposes.
On October 2, 2019, we entered into an agreement to acquire an 8,463 TEU container vessel built in 2005 for a gross purchase price of $25.0 million. This vessel is expected to be delivered to us between March and May 2020 and has already been fixed for a period of 2 years to one of the world's leading liner companies.
On January 13, 2020, we entered into an agreement to acquire an 8,626 TEU container vessel built in 2008 for a gross purchase price of $28.0 million. This vessel was delivered to us on January 23, 2020 and has been fixed on a 2 year charter due to commence at the beginning of March 2020. The vessel was renamed to Niledutch Lion.
Conference Call and Webcast
On Tuesday, February 11, 2020 at 9:00 A.M. ET, the Company's management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.
A telephonic replay of the conference call will be available until February 18, 2020 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 10139277# as the access code.
Audio Webcast
There will also be a live and then archived webcast of the conference call on the Danaos website (www.danaos.com). Participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Slide Presentation
A slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 61 containerships aggregating 368,773 TEUs, including five vessels owned by Gemini Shipholdings Corporation, a joint venture, ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions. Although Danaos Corporation believes 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, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the effects of the refinancing transactions; Danaos' ability to achieve the expected benefits of the refinancing and comply with the terms of its new credit facilities and other agreements entered into in connection with the refinancing; the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 29 unscheduled off-hire days in the three months ended December 31, 2019. The following table summarizes vessel utilization and the impact of the off-hire days on the Company's revenue.
Vessel Utilization (No. of Days) | First | Second | Third | Fourth | |||||
2019 | 2019 | 2019 | 2019 | Total | |||||
Ownership Days | 4,950 | 5,005 | 5,060 | 5,060 | 20,075 | ||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | - | (22) | (41) | (123) | (186) | ||||
Other Off-hire Days | (90) | (10) | (24) | (29) | (153) | ||||
Operating Days | 4,860 | 4,973 | 4,995 | 4,908 | 19,736 | ||||
Vessel Utilization | 98.2% | 99.4% | 98.7% | 97.0% | 98.3% | ||||
Operating Revenues (in '000s of US Dollars) | $112,891 | $112,319 | $111,830 | $110,204 | $447,244 | ||||
Average Gross Daily Charter Rate | $23,229 | $22,586 | $22,388 | $22,454 | $22,661 | ||||
Vessel Utilization (No. of Days) | First | Second | Third | Fourth | |||||
2018 | 2018 | 2018 | 2018 | Total | |||||
Ownership Days | 4,950 | 5,005 | 5,060 | 5,060 | 20,075 | ||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | (125) | (111) | (22) | (33) | (291) | ||||
Other Off-hire Days | (91) | (84) | (111) | (74) | (360) | ||||
Operating Days | 4,734 | 4,810 | 4,927 | 4,953 | 19,424 | ||||
Vessel Utilization | 95.6% | 96.1% | 97.4% | 97.9% | 96.8% | ||||
Operating Revenues (in '000s of US Dollars) | $111,854 | $113,466 | $117,781 | $115,631 | $458,732 | ||||
Average Gross Daily Charter Rate | $23,628 | $23,590 | $23,905 | $23,346 | $23,617 |
Fleet List
The following table describes in detail our fleet deployment profile as of February 7, 2020:
Vessel Name | Vessel Size (TEU) | Year | Expiration of Charter(1) | ||
Containerships | |||||
MSC Ambition | 13,100 | 2012 | June 2024 | ||
Maersk Exeter | 13,100 | 2012 | June 2024 | ||
Maersk Enping | 13,100 | 2012 | May 2024 | ||
Hyundai Respect | 13,100 | 2012 | March 2024 | ||
Hyundai Honour | 13,100 | 2012 | February 2024 | ||
Express Rome | 10,100 | 2011 | February 2022 | ||
Express Berlin | 10,100 | 2011 | April 2022 | ||
Express Athens | 10,100 | 2011 | February 2022 | ||
Le Havre | 9,580 | 2006 | March 2023 | ||
Pusan C | 9,580 | 2006 | February 2023 | ||
Niledutch Lion | 8,626 | 2008 | February 2022 | ||
CMA CGM Melisande | 8,530 | 2012 | May 2024 | ||
CMA CGM Attila | 8,530 | 2011 | October 2023 | ||
CMA CGM Tancredi | 8,530 | 2011 | November 2023 | ||
CMA CGM Bianca | 8,530 | 2011 | January 2024 | ||
CMA CGM Samson | 8,530 | 2011 | March 2024 | ||
America | 8,468 | 2004 | January 2023 | ||
Europe | 8,468 | 2004 | March 2023 | ||
CMA CGM Moliere | 6,500 | 2009 | February 2022 | ||
CMA CGM Musset | 6,500 | 2010 | August 2022 | ||
CMA CGM Nerval | 6,500 | 2010 | October 2022 | ||
CMA CGM Rabelais | 6,500 | 2010 | December 2022 | ||
CMA CGM Racine | 6,500 | 2010 | January 2023 | ||
YM Mandate | 6,500 | 2010 | January 2028 | ||
YM Maturity | 6,500 | 2010 | April 2028 | ||
Performance | 6,402 | 2002 | May 2020 | ||
Dimitra C | 6,402 | 2002 | January 2023 | ||
Seattle C (ex YM Seattle) | 4,253 | 2007 | March 2020 | ||
YM Vancouver | 4,253 | 2007 | April 2020 | ||
Derby D | 4,253 | 2004 | May 2020 | ||
ANL Tongala | 4,253 | 2004 | May 2020 | ||
ZIM Rio Grande | 4,253 | 2008 | May 2020 | ||
ZIM Sao Paolo | 4,253 | 2008 | August 2020 | ||
ZIM Kingston | 4,253 | 2008 | September 2020 | ||
ZIM Monaco | 4,253 | 2009 | November 2020 | ||
ZIM Dalian | 4,253 | 2009 | February 2021 | ||
ZIM Luanda | 4,253 | 2009 | May 2021 | ||
Dimitris C | 3,430 | 2001 | June 2020 | ||
Express Black Sea | 3,400 | 2011 | November 2020 | ||
Express Spain | 3,400 | 2011 | March 2020 | ||
Express Argentina | 3,400 | 2010 | May 2020 | ||
Express Brazil | 3,400 | 2010 | September 2020 | ||
Express France | 3,400 | 2010 | October 2020 | ||
Singapore | 3,314 | 2004 | March 2020 | ||
Colombo | 3,314 | 2004 | March 2020 | ||
MSC Zebra | 2,602 | 2001 | September 2020 | ||
Amalia C | 2,452 | 1998 | March 2020 | ||
Danae C | 2,524 | 2001 | February 2020 | ||
Advance | 2,200 | 1997 | April 2020 | ||
Future | 2,200 | 1997 | June 2020 | ||
Sprinter | 2,200 | 1997 | March 2020 | ||
Stride | 2,200 | 1997 | April 2020 | ||
Progress C | 2,200 | 1998 | March 2020 | ||
Bridge | 2,200 | 1998 | September 2020 | ||
Highway | 2,200 | 1998 | February 2020 | ||
Vladivostok | 2,200 | 1997 | March 2020 | ||
Belita ľ2) | 8,533 | 2006 | September 2021 | ||
Catherine C (2) | 6,422 | 2001 | January 2023 | ||
Leo C (2) | 6,422 | 2002 | September 2022 | ||
Suez Canal(2) | 5,610 | 2002 | April 2020 | ||
Genoaľ2) | 5,544 | 2002 | August 2020 | ||
(1) Earliest date charters could expire. Some charters include options to extend their terms. | |||||
(2) Vessels acquired by Gemini Shipholdings Corporation, in which Danaos holds a 49% equity interest. | |||||
DANAOS CORPORATION | |||||||||
Condensed Consolidated Statements of Operations - Unaudited | |||||||||
(Expressed in thousands of United States dollars, except per share amounts) | |||||||||
Three months | Three months | Year ended | Year ended | ||||||
December 31, | December 31, | December 31, | December 31, | ||||||
2019 | 2018 | 2019 | 2018 | ||||||
OPERATING REVENUES | $110,204 | $115,631 | $447,244 | $458,732 | |||||
OPERATING EXPENSES | |||||||||
Vessel operating expenses | (24,467) | (25,552) | (102,502) | (104,604) | |||||
Depreciation & amortization | (26,572) | (29,354) | (105,238) | (116,994) | |||||
Impairment loss | - | (210,715) | - | (210,715) | |||||
General & administrative | (7,054) | (7,944) | (26,837) | (26,334) | |||||
Other operating expenses | (2,799) | (2,977) | (11,593) | (12,207) | |||||
Income/(Loss) From Operations | 49,312 | (160,911) | 201,074 | (12,122) | |||||
OTHER INCOME/(EXPENSES) | |||||||||
Interest income | 1,663 | 1,483 | 6,414 | 5,781 | |||||
Interest expense | (17,166) | (19,328) | (72,069) | (85,706) | |||||
Other finance expenses | (300) | (415) | (2,702) | (3,026) | |||||
Equity income on investments | 1,094 | 453 | 1,602 | 1,365 | |||||
Gain on debt extinguishment | - | - | - | 116,365 | |||||
Other income/(expenses), net | 127 | 109 | 556 | (50,456) | |||||
Realized loss on derivatives | (913) | (2,374) | (3,622) | (5,137) | |||||
Total Other Income/(Expenses), net | (15,495) | (20,072) | (69,821) | (20,814) | |||||
Net Income/(Loss) | $33,817 | $(180,983) | $131,253 | $(32,936) | |||||
EARNINGS PER SHARE | |||||||||
Basic earnings/(loss) per share1 | $1.83 | $(12.12) | $8.29 | $(3.10) | |||||
Diluted earnings/(loss) per share1 | $1.79 | $(12.12) | $8.09 | $(3.10) | |||||
Basic weighted average number of common shares (in thousands of shares)1 | 18,494 | 14,939 | 15,835 | 10,623 | |||||
Diluted weighted average number of common shares (in thousands of shares)1 | 18,927 | 14,939 | 16,221 | 10,623 | |||||
Non-GAAP Measures2 | |||||||||
Reconciliation of Net Income/(Loss) to Adjusted Net Income – Unaudited | |||||||||
Three months December 31, | Three months December 31, | Year ended December 31, | Year ended December 31, | ||||||
2019 | 2018 | 2019 | 2018 | ||||||
Net income/(loss) | $33,817 | $(180,983) | $131,253 | $(32,936) | |||||
Gain on debt extinguishment | - | - | - | (116,365) | |||||
Amortization of financing fees, debt discount & finance fees accrued | 4,152 | 5,584 | 17,422 | 17,016 | |||||
Impairment loss | - | 210,715 | - | 210,715 | |||||
Accelerated amortization of accumulated other comprehensive loss | - | 1,443 | - | 1,443 | |||||
Refinancing professional fees | - | (154) | - | 51,313 | |||||
Adjusted Net Income | $37,969 | $36,605 | $148,675 | $131,186 | |||||
Adjusted Earnings Per Share, diluted1 | $2.01 | $2.45 | $9.17 | $12.35 | |||||
Diluted weighted average number of shares (in thousands)1 | 18,927 | 14,939 | 16,221 | 10,623 | |||||
1 | Basic and diluted earnings per share and basic and diluted weighted average number of shares give retroactive effect to the 1-for-14 reverse stock split effected on May 2, 2019, for all periods presented. | ||||||||
2 | The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months and year ended December 31, 2019 and 2018. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. | ||||||||
DANAOS CORPORATION | |||||
Condensed Consolidated Balance Sheets - Unaudited | |||||
(Expressed in thousands of United States dollars) | |||||
As of | As of | ||||
December 31, | December 31, | ||||
2019 | 2018 | ||||
ASSETS | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | $139,170 | $77,275 | |||
Accounts receivable, net | 7,145 | 9,225 | |||
Other current assets | 44,071 | 33,250 | |||
190,386 | 119,750 | ||||
NON-CURRENT ASSETS | |||||
Fixed assets, net | 2,389,874 | 2,480,329 | |||
Deferred charges, net | 11,455 | 13,031 | |||
Investments in affiliates | 8,965 | 7,363 | |||
Other non-current assets | 82,339 | 59,369 | |||
2,492,633 | 2,560,092 | ||||
TOTAL ASSETS | $2,683,019 | $2,679,842 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
CURRENT LIABILITIES | |||||
Long-term debt, current portion | $119,673 | $113,777 | |||
Accumulated accrued interest, current portion | 34,137 | 35,782 | |||
Long-term leaseback obligations, current portion | 16,342 | - | |||
Accounts payable, accrued liabilities & other current liabilities | 52,928 | 73,142 | |||
223,080 | 222,701 | ||||
LONG-TERM LIABILITIES | |||||
Long-term debt, net | 1,270,663 | 1,508,108 | |||
Accumulated accrued interest, net of current portion | 156,583 | 200,574 | |||
Long-term leaseback obligations, net | 121,872 | - | |||
Other long-term liabilities | 29,131 | 57,606 | |||
1,578,249 | 1,766,288 | ||||
STOCKHOLDERS' EQUITY | |||||
Common stock1 | 248 | 152 | |||
Additional paid-in capital1 | 785,274 | 727,562 | |||
Accumulated other comprehensive loss | (116,934) | (118,710) | |||
Retained earnings | 213,102 | 81,849 | |||
881,690 | 690,853 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $2,683,019 | $2,679,842 | |||
1 Common stock and Additional paid-in capital as of December 31, 2018 give retroactive effect to the 1-for-14 reverse stock split. | |||||
DANAOS CORPORATION | ||||||||
Condensed Consolidated Statements of Cash Flows - Unaudited | ||||||||
(Expressed in thousands of United States dollars) | ||||||||
Three months | Three months | Year ended | Year ended | |||||
December 31, | December 31, | December 31, | December 31, | |||||
2019 | 2018 | 2019 | 2018 | |||||
Operating Activities: | ||||||||
Net income/(loss) | $33,817 | $(180,983) | $131,253 | $(32,936) | ||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||
Depreciation | 24,364 | 27,005 | 96,505 | 107,757 | ||||
Impairment loss | - | 210,715 | - | 210,715 | ||||
Amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued | 6,360 | 7,933 | 26,155 | 26,253 | ||||
Gain on debt extinguishment | - | - | - | (116,365) | ||||
PIK interest | 830 | 1,019 | 3,375 | 1,433 | ||||
Payments for drydocking/special survey | (1,943) | (1,401) | (7,157) | (13,306) | ||||
Amortization of deferred realized losses on cash flow interest rate swaps | 913 | 2,374 | 3,622 | 5,137 | ||||
Equity income on investments | (1,094) | (453) | (1,602) | (1,365) | ||||
Stock based compensation | 1,181 | 849 | 4,241 | 1,006 | ||||
Accounts receivable | 492 | (407) | 2,080 | (2,723) | ||||
Other assets, current and non-current | (5,754) | (6,226) | (19,750) | 2,286 | ||||
Accounts payable and accrued liabilities | (2,618) | (3,338) | (3,181) | (4,350) | ||||
Other liabilities, current and long-term | (4,315) | (3,897) | (15,663) | (18,856) | ||||
Net Cash provided by Operating Activities | 52,233 | 53,190 | 219,878 | 164,686 | ||||
Investing Activities: | ||||||||
Vessel additions and advances | (6,598) | (6,167) | (21,360) | (8,250) | ||||
Net Cash used in Investing Activities | (6,598) | (6,167) | (21,360) | (8,250) | ||||
Financing Activities: | ||||||||
Proceeds from long-term debt | - | - | - | 325,852 | ||||
Proceeds from sale-leaseback of vessels | - | - | 146,523 | - | ||||
Debt repayment | (31,183) | (33,883) | (262,572) | (440,990) | ||||
Payments of leaseback obligations | (3,160) | - | (8,309) | - | ||||
Payments of accumulated accrued interest | (8,512) | (7,960) | (35,358) | (8,556) | ||||
Finance costs | - | (8,038) | (30,474) | (35,005) | ||||
Paid-in capital | 54,440 | - | 54,440 | 10,000 | ||||
Share issuance costs | (873) | - | (873) | (169) | ||||
Net Cash used in Financing Activities | 10,712 | (49,881) | (136,623) | (148,868) | ||||
Net Increase/(Decrease) in cash, cash equivalents and restricted cash | 56,347 | (2,858) | 61,895 | 7,568 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 82,823 | 80,133 | 77,275 | 69,707 | ||||
Cash, cash equivalents and restricted cash, end of period | $139,170 | $77,275 | $139,170 | $77,275 | ||||
DANAOS CORPORATION | ||||||||
Reconciliation of Net Income/(Loss) to Adjusted EBITDA - Unaudited | ||||||||
(Expressed in thousands of United States dollars) | ||||||||
Three months | Three months | Year ended | Year ended | |||||
December 31, | December 31, | December 31, | December 31, | |||||
2019 | 2018 | 2019 | 2018 | |||||
Net income/(loss) | $33,817 | $(180,983) | $131,253 | $(32,936) | ||||
Depreciation | 24,364 | 27,005 | 96,505 | 107,757 | ||||
Amortization of deferred drydocking & special survey costs | 2,208 | 2,349 | 8,733 | 9,237 | ||||
Amortization of deferred finance costs, debt discount and other finance fees accrued | 4,152 | 5,584 | 17,422 | 17,016 | ||||
Amortization of deferred realized losses on interest rate swaps | 913 | 931 | 3,622 | 3,694 | ||||
Interest income | (1,663) | (1,483) | (6,414) | (5,781) | ||||
Interest expense | 13,146 | 13,915 | 55,203 | 70,749 | ||||
Impairment loss | - | 210,715 | - | 210,715 | ||||
Gain on debt extinguishment | - | - | - | (116,365) | ||||
Accelerated amortization of accumulated other comprehensive loss | - | 1,443 | - | 1,443 | ||||
Stock based compensation | 1,181 | 849 | 4,241 | 1,006 | ||||
Refinancing professional fees | - | (154) | - | 51,313 | ||||
Adjusted EBITDA(1) | $78,118 | $80,171 | $310,565 | $317,848 | ||||
1) | Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs, amortization of deferred finance costs, debt discount and other finance fees accrued, amortization of deferred realized losses on interest rate swaps, stock based compensation, impairment loss, accelerated amortization of accumulated other comprehensive loss, gain on debt extinguishment and refinancing professional fees. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or "GAAP." 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. We also believe that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. | |||||||
Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income. | ||||||||
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months and year ended December 31, 2019 and 2018. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. | ||||||||
SOURCE Danaos Corporation
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