Posted on August 17, 2015
Eagle Bulk Shipping Inc. (Nasdaq: EGLE) today announced its results for the second quarter ended June 30, 2015.
For the Second Quarter:
- Net loss of $27.5 million or $0.73 per share for the Company, compared with net loss of $44.7 million, or $2.61 per share for the comparable quarter of 2014.
- Net revenues of $22.7 million, compared to $42.4 million for the comparable quarter in 2014.
- Fleet utilization rate of 97.5%.
- Sold the M/V Kite, a 1997-built Handymax for net proceeds of $4.2 million and recorded loss on sale of $5.7 million.
- On May 20, 2015, Eagle Bulk delivered a 90 day termination notice to terminate its Pool arrangement with Navig8.
Subsequent Events:
- On July 7, 2015, the Company announced that it appointed Gary Vogel as Chief Executive Officer of the Company, effective as of September 1, 2015.Mr. Vogel will be joining as a member of the Company Board and Mr. Ryanwill be stepping down from his role as CEO and will remain a Board member.
- On August 14, 2015, the Company entered into an Amendatory Agreement with its lenders. Pursuant to the Amendatory Agreement, the lenders have agreed to, among other things, defer the compliance with the minimum interest coverage ratio covenant from December 31, 2015 to December 31, 2016.
Stanley H. Ryan, CEO, commented, “Despite ongoing weakness in the dry bulk market, Eagle Bulk continued to make progress during the second quarter upgrading our fundamentals and transitioning to an operating platform that delivers sustainable value through diverse market cycles. The credit amendment we announced today which provides financial flexibility and the benefit of time will help ensure that this momentum continues. Looking ahead, the Company’s focus will be on continued business improvements, fleet renewal and growth, and accelerated efforts to ensure that Eagle Bulk is optimally-positioned to capture current and future market opportunities.”
Results of Operations for the three-month period ended June 30, 2015 and 2014
For the second quarter of 2015, the Company reported a net loss of $27,508,300 or $0.73 per share, based on a weighted average of 37,639,352 basic and diluted shares outstanding. In the comparable second quarter of 2014, the Company reported a net loss of $44,660,059 or $2.61 per share, based on a weighted average of 17,079,991 basic and diluted shares outstanding.
Gross time and voyage charter revenues in the quarter ended June 30, 2015 were $23,853,039, compared with $44,194,434 recorded in the comparable quarter in 2014. The decrease in revenue is attributable to lower charter rates earned by the fleet, reduced available days due to drydocking of an increased number of vessels and the sale of one vessel, the M/V Kite, in the quarter ended June 30, 2015. Brokerage commissions incurred on revenues earned in the quarters ended June 30, 2015 and 2014 were $1,195,667 and $1,814,375, respectively. Net revenues during the quarters ended June 30, 2015 and 2014, were $22,657,372 and $42,380,059, respectively.
Total operating expenses for the Company in the quarter ended June 30, 2015 were $47,011,056 compared with $50,489,321 recorded for the Company in the comparable quarter of 2014. The decrease in operating expenses resulted primarily from a reduction in the Depreciation expense of $8,455,446 due to lower vessel valuation upon adoption of Fresh-Start Accounting , offset by additional charter hire expense of $1,233,132 and loss on sale of M/V Kite $5,696,675 in the second quarter of 2015.
Results of Operations for the six-month period ended June 30, 2015 and 2014
For the six months ended June 30, 2015, the Company reported a net loss of $48,175,364 or $1.28 per share, based on a weighted average of 37,583,491 basic and diluted shares outstanding. In the comparable period of 2014, the Company reported a net loss of $67,249,945 or $3.94 per share, based on a weighted average of 17,080,079 basic and diluted shares outstanding.
Gross time and voyage charter revenues in the six-month period ended June 30, 2015 were $51,564,828, compared with $92,054,896 recorded in the comparable period in 2014. The decrease in revenue is attributable to lower charter rates earned by the fleet, reduced available days due to drydocking of an increased number of vessels and the sale of one vessel, the M/V Kite in the quarter ended June 30, 2015. Brokerage commissions incurred on revenues earned in the six-month periods ended June 30, 2015 and 2014 were $2,576,290 and $3,879,446, respectively. Net revenues during the six-month periods ended June 30, 2015 and 2014, were $48,988,538 and $88,175,450, respectively.
Total operating expenses for the Company for the six months ended June 30, 2015 were $90,850,075 compared with $99,104,863 recorded for the Company in the comparable period of 2014. The decrease in operating expenses resulted primarily from a reduction in the Depreciation expense of approximately $16,976,088 due to lower vessel value upon adoption of Fresh-Start Accounting on October 15, 2014, offset by higher charter hire expense of $2,449,096, loss on sale of the M/V Kite of $5,696,675 and higher general and administrative expenses primarily due to increase in non cash compensation expense and adviser’s fees for the six months ended June 30, 2015 compared to the six months ended June 30, 2014.
Liquidity and Capital Resources
Net cash used in operating activities during the six-month period ended June 30, 2015 was $23,328,501, compared with net cash provided by operating activities of $593,725 during the corresponding six-month period ended June 30, 2014. The decrease is primarily due to lower charter rates on time charter renewals and higher drydock expenditures.
Net cash provided by investing activities during the six-month period ended June 30, 2015, was $8,635,658, compared with net cash used in investing activities of $186,201 during the corresponding six-month period ended June 30, 2014. The increase is primarily due to proceeds of $4,235,542 from the sale of the M/V Kite and proceeds of $5,807,917 from the sale of KLC shares.
Net cash provided by financing activities during the six-month period ended June 30, 2015 was $1,901,994, compared with none during the corresponding six-month period ended June 30, 2014. We borrowed $15,000,000 from our revolver credit facility and we repaid $11,812,500 toward our term loan.
As of June 30, 2015, our cash balance was $27,184,438, compared to a cash balance of $39,975,287 at December 31, 2014.
As of June 30, 2015, the Company’s debt consisted of $228,187,500 in term loans and debt discount of $4,068,755. The Company availability under the revolving credit facility as of June 30, 2015 is $35 million.
Capital Expenditures and Drydocking
Our capital expenditures relate to the purchase of vessels and capital improvements to our vessels which are expected to enhance the revenue earning capabilities and safety of these vessels.
In addition to acquisitions that we may undertake in future periods, the other major capital expenditures include funding the Company’s program of regularly scheduled drydocking necessary to comply with international shipping standards and environmental laws and regulations. Although the Company has some flexibility regarding the timing of its drydocking, the costs are relatively predictable. Management anticipates that vessels are to be drydocked every two and a half years. We anticipate that this process of recertification will require us to reposition these vessels from a discharge port to shipyard facilities, which will reduce our available days and operating days during that period.
About Eagle Bulk Shipping Inc. (EGLE)
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered inNew York. The Company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.
