Navigator Holdings Ltd. Fourth Quarter and Financial Year 2017 Results
Navigator Holdings Ltd. Fourth Quarter and Financial Year 2017 Results
LONDON, March 5, 2018 /PRNewswire/ --
Highlights
-- Navigator Holdings Ltd. (NYSE: NVGS) (the "Company") reports operating
revenue of $76.7 million for the three months ended December 31, 2017
and $298.6 million for the full year ended December 31, 2017.
-- Maintained strong utilization of 87.2% for the three months ended
December 31, 2017 and 87.6% for the year ended December 31, 2017 despite
the market downturn.
-- Net income was $1.4 million (or $0.03 per share) for the three months
ended December 31, 2017 and $5.3 million (or $0.10 per share) for the
year ended December 31, 2017, which includes a one-off cost totaling
$3.5 million (or $0.06 per share) associated with the redemption of the
Company's senior unsecured bonds.
-- EBITDA((1) )was $29.6 million for the three months ended December 31,
2017 and $120.8 million for the year ended December 31, 2017.
-- The Company has continued to benefit from the increasing demand for the
transportation of long-haul petrochemical gases, with petrochemicals
accounting for 84% of all spot days during 2017.
-- Took delivery of the remaining five newbuilding vessels during 2017,
increasing our fleet to 38 vessels. The Company's newbuild program is
complete.
-- During 2017 we took an additional four vessels into in-house technical
management with an additional vessel in January 2018 taking the total
number of in-house technical managed vessels to nine.
-- Commenced three year charters with Braskem for two of our
ethane/ethylene capable vessels taking ethane from Morgan's Point,
Houston to Braskem's ethylene complex in Brazil.
-- Since the year end, we successfully renewed a contract of affreightment
with Mitsubishi International Corporation to utilize three vessels for
the majority of 2018 taking ethylene from the Targa terminal, in Houston
to Far East Asia.
-- Since the year end, we entered into a 50/50 joint venture agreement with
Enterprise Product Partners to build a new ethylene marine export
terminal along the U.S. Gulf Coast that will have the capacity to export
approximately one million tons of ethylene per year. The export terminal
is expected to be in service by the first quarter of 2020. The project
is supported by long-term contracts with customers that include U.S.
ethylene producer Flint Hills Resources and a major international
trading company.
Fourth Quarter 2017 Financial Results Overview
Operating revenue for the three months ended December 31, 2017 was $76.7 million, an increase of $1.2 million, or 1.6%, compared to the $75.5 million of operating revenue for the three months ended December 31, 2016.
For the fourth quarter of 2017, the average time charter equivalent rate ("TCE")( (2)) across the entire fleet, including our fully-refrigerated vessels, was $626,161 per calendar month ($20,586 per day), compared to $692,213 per calendar month ($22,758 per day) for the comparable period in 2016.
Fleet utilization across the 38 vessels operating at the year end was 87.2% for the fourth quarter of 2017, down from 89.5% in the fourth quarter of 2016.
Operating revenue less voyage expenses amounted to $61.9 million for the three months ended December 31, 2017 compared to $61.5 million in the same three month period of 2016. This decrease was as a result of a reduction in TCE rates of $6.7 million, a reduction in utilization rates of $1.7 million, offset by an $8.8 million increase due to additional vessels in our fleet during the three months ended December 31, 2017 compared to the three months ended December 31, 2016.
Net income was $1.4 million for the three months ended December 31, 2017, or $0.03 per share compared to $7.6 million or $0.14 per share for the same period in 2016.
EBITDA((1)) for the fourth quarter of 2017 was $29.6 million and $120.8 million for the full year ended December 31, 2017.
(1) EBITDA is not a measure calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. EBITDA is a basis upon which we assess our financial performance. We believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness, and it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA does not represent and should not be considered as an alternative to consolidated net income or cash generated from operations, as determined by U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. See the table below for a reconciliation to the most directly comparable GAAP financial measure.
The following table sets forth a reconciliation of EBITDA to net income, the most directly comparable measure calculated in accordance with GAAP, for the periods presented:
Three months ended Year ended
December 31, December 31,
(in thousands) (in thousands)
------------- -------------
2016 2017 2016 2017
---- ---- ---- ----
Net
income $7,646 $1,411 $44,638 $5,310
Net
interest
expense 8,940 9,324 32,142 41,475
Income
taxes 575 6 1,177 397
Depreciation
and
amortization 16,625 18,863 62,280 73,588
------ ------ ------ ------
EBITDA $33,786 $29,604 $140,237 $120,770
======= ======= ======== ========
(2) TCE rate is a non-GAAP financial measure. TCE rate is a measure of the average daily revenue performance of a vessel. TCE rate is a shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., time charters, voyage charters and contracts of affreightment, or "COAs") under which the vessels may be employed between the periods. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters we pay all voyage expenses. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with operating revenues less voyage expenses, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our method of calculating TCE rate is to divide operating revenue (net of voyage expenses) by operating days for the relevant time period. See the table below for a reconciliation to the most directly comparable GAAP financial measure.
The following table represents a reconciliation of TCE rate to operating revenue, the most directly comparable financial measure calculated in accordance with GAAP, for the periods presented:
Three months ended Three months ended
December 31, 2016 December 31, 2017
----------------- -----------------
Fleet Data:
Operating
revenue $75,455 $76,684
Voyage expenses 13,914 14,781
------ ------
Operating
revenue less
Voyage expenses 61,541 61,903
Operating days 2,704 3,007
Average daily
time charter
equivalent rate $22,758 $20,586
Conference Call Details:
Tomorrow, Tuesday, March 6, 2018, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111 (US Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Navigator" to the operator.
A telephonic replay of the conference call will be available until Tuesday, March 13, 2018 by dialing 1(866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 11870348#
Audio Webcast:
There will also be a live, and then archived, webcast of the conference call, available through the Company's website (www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. Navigator Gas
Attention: Investor Relations Department
New York: 650 Madison Ave, 25th Floor,
New York, NY 10022. Tel: +1
212 355 5893
London: 10 Bressenden Place, London,
SW1E 5DH. Tel: +44 (0)20
7340 4850
About Us
Navigator Holdings Ltd. is the owner and operator of the world's largest fleet of handysize liquefied gas carriers and a global leader in the seaborne transportation of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas ("LPG") and ammonia. We play a vital role in the liquefied gas supply chain for energy companies, industrial consumers and commodity traders, with our sophisticated vessels providing an efficient and reliable 'floating pipeline' between the parties. We continue to build strong, long-term partnerships based on mutual trust, our depth of technical expertise and a modern versatile fleet. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, 14 of which are ethylene and ethane capable.
FORWARD LOOKING STATEMENTS
Statements included in this press release concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast, contain forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue," or the negative of these terms or other comparable terminology. These risks and uncertainties include, but are not limited to:
-- future operating or financial results;
-- pending acquisitions, business strategy and expected capital spending;
-- operating expenses, availability of crew, number of off-hire days,
drydocking requirements and insurance costs;
-- fluctuations in currencies and interest rates;
-- general market conditions and shipping market trends, including charter
rates and factors affecting supply and demand;
-- our financial condition and liquidity, including our ability to
refinance our indebtedness as it matures or obtain additional financing
in the future to fund capital expenditures, acquisitions and other
corporate activities;
-- estimated future capital expenditures needed to preserve our capital
base;
-- our expectations about the availability of vessels to purchase, the time
that it may take to construct new vessels, or the useful lives of our
vessels;
-- our continued ability to enter into long-term, fixed-rate time charters
with our customers;
-- changes in governmental rules and regulations or actions taken by
regulatory authorities;
-- potential liability from future litigation;
-- our expectations relating to the payment of dividends;
-- our expectation regarding providing in-house technical management for
certain vessels in our fleet and our success in providing such in-house
technical management;
-- our ability to meet our expectations regarding the construction and
financing of our proposed investment in an ethylene marine terminal in
the U.S. Gulf and our expectations regarding the financial success of
such terminal; and
-- other factors discussed in other periodic filings with the U.S.
Securities and Exchange Commission.
We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.
Navigator Holdings Ltd.
Consolidated Balance Sheets
(Unaudited)
December 31, 2016 December 31, 2017
----------------- -----------------
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents $57,272 $62,109
Accounts receivable, net 7,059 14,889
Accrued income 13,134 15,791
Prepaid expenses and other current assets 8,541 10,964
Bunkers and lubricant oils 6,937 8,008
Insurance recoverable 855 376
--- ---
Total current assets 93,798 112,137
Non-current assets
Vessels in operation, net 1,480,359 1,740,139
Vessels under construction 150,492 -
Property, plant and equipment, net 194 1,611
--- -----
Total non-current assets 1,631,045 1,741,750
--------- ---------
Total assets $1,724,843 $1,853,887
========== ==========
Liabilities and stockholders' equity
Current liabilities
Current portion of secured term loan facilities, $78,464 $81,559
net of deferred financing costs
Senior unsecured bond 25,000 -
Accounts payable 6,388 8,071
Accrued expenses and other liabilities 11,377 12,478
Accrued interest 2,932 3,500
Deferred income 3,522 4,824
----- -----
Total current liabilities 127,683 110,432
------- -------
Non-current Liabilities
Secured term loan facilities, net of current portion 540,680 681,658
and deferred financing costs
Senior unsecured bond, net of deferred financing costs 100,000 98,584
------- ------
Total non-current liabilities 640,680 780,242
------- -------
Total Liabilities 768,363 890,674
Commitments and contingencies (see note 12)
Stockholders' equity
Common stock-$.01 par value per share; 554 555
400,000,000 shares authorized; 55,529,762
shares issued and outstanding, (2016: 55,436,087)
Additional paid-in capital 588,024 589,436
Accumulated other comprehensive loss (287 ) (277)
Retained earnings 368,189 373,499
------- -------
Total stockholders' equity 956,480 963,213
------- -------
Total liabilities and stockholders' equity $1,724,843 $1,853,887
========== ==========
Navigator Holdings Ltd.
Consolidated Statements of Income
(Unaudited)
Three months ended Year ended
December 31, December 31,
(in thousands except (in thousands except
share and per share share and per share
data) data)
2016 2017 2016 2017
---- ---- ---- ----
Revenues
Operating revenue $75,455 $76,684 $294,112 $298,595
------- ------- -------- --------
Expenses
Brokerage commissions 1,430 1,263 5,812 5,368
Voyage expenses 13,914 14,781 42,201 55,542
Vessel operating expenses 22,611 26,956 90,854 100,968
Depreciation and
amortization 16,625 18,863 62,280 73,588
General and administrative
costs 3,348 3,554 12,528 13,816
Other corporate expenses 366 526 1,976 2,131
Insurance recoverable from
vessel repairs - - 504 -
--- --- --- ---
Total operating expenses 58,294 65,943 216,155 251,413
------ ------ ------- -------
Operating income 17,161 10,741 77,957 47,182
Other income/(expense)
Interest expense (8,879) (9,967) (32,321) (37,691)
Write off of deferred
finance costs (102) 495 (102) (786)
Write off of call premium
and redemption charges of
9.00% unsecured bond - - - (3,517)
Interest income 41 148 281 519
--- --- --- ---
Income before income taxes 8,221 1,417 45,815 5,707
Income taxes (575) (6) (1,177) (397)
---- --- ------ ----
Net income $7,646 $1,411 $44,638 $5,310
====== ====== ======= ======
Earnings per share:
Basic: $0.14 $0.03 $0.81 $0.10
Diluted: $0.14 $0.03 $0.80 $0.10
===== ===== ===== =====
Weighted average number of shares outstanding:
Basic: 55,436,087 55,529,762 55,418,626 55,508,974
Diluted: 55,810,365 55,898,502 55,794,481 55,881,454
========== ========== ========== ==========
Navigator Holdings Ltd.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three months ended Year ended
December 31, December 31,
(in thousands) (in thousands)
2016 2017 2016 2017
---- ---- ---- ----
Net income $7,646 $1,411 $44,638 $5,310
Other Comprehensive Income:
Foreign currency translation
gain/(loss) 114 (242) 178 10
--- ---- --- ---
Total Comprehensive Income 7,760 1,169 44,816 5,320
===== ===== ====== =====
Consolidated Statements of Stockholders' Equity
(Unaudited)
(in thousands, except share data)
Common stock
Number of Amount 0.01 Additional Accumulated Retained Total
shares par value Paid-in Capital Other Earnings
Comprehensive
Income (Loss)
--- ---
January 1, 2015 55,346,613 553 584,808 (254 ) 225,457 $810,564
Restricted shares
issued March 17,
2015 16,854 1 - - - 1
Net income - - - - 98,094 98,094
Foreign currency
translation - - - (211 ) - (211 )
Share-based
compensation plan - - 1,643 - - 1,643
--- --- ----- --- --- -----
December 31, 2015 55,363,467 $554 $586,451 $(465 ) $323,551 $910,091
Restricted shares
issued March 29,
2016 72,620 - - - - -
Net income - - - - 44,638 44,638
Foreign currency
translation - - - 178 - 178
Share-based
compensation plan - - 1,573 - - 1,573
--- --- ----- --- --- -----
December 31, 2016 55,436,087 $554 $588,024 $(287 ) $368,189 $956,480
Restricted shares
issued March 23,
2017 93,675 1 - - - 1
Net income - - - - 5,310 5,310
Foreign currency
translation - - - 10 - 10
Share-based
compensation plan - - 1,412 - - 1,412
--- --- ----- --- --- -----
December 31, 2017 55,529,762 $555 $589,436 $(277) $373,499 $963,213
========== ==== ======== ===== ======== ========
Navigator Holdings Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
Year ended Year ended
December 31, December 31,
2016 2017
(in thousands) (in thousands)
------------- -------------
Cash flows from operating activities
Net income $44,638 $5,310
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 62,280 73,588
Payment of drydocking costs (9,902) (268)
Amortization of share-based compensation 1,573 1,412
Amortization of deferred financing costs 3,091 3,217
Call option premium on redemption of 9.00% unsecured bond - 2,500
Prior year expenses recovered from insurance claim - (504)
Insurance claim debtor 60 (7)
Unrealized foreign exchange 208 3
Changes in operating assets and liabilities
Accounts receivable 1,991 (7,831)
Bunkers and lubricant oils (3,457) (1,074)
Prepaid expenses and other current assets (7,694) (5,079)
Accounts payable, accrued interest and other liabilities (6,040) 4,654
------ -----
Net cash provided by operating activities 86,748 75,921
------ ------
Cash flows from investing activities
Payment to acquire vessels (1,733) (1,940)
Payment for vessels under construction (239,179 ) (180,629 )
Purchase of other property, plant and equipment (75 ) (1,726)
Receipt of shipyard penalty payments 1,901 280
Placement of short term investment - (25,000)
Release of short term investment - 25,000
Insurance recoveries 9,374 990
Capitalized costs for the repair of Navigator Aries (8,441 ) -
------- ---
Net cash used in investing activities (238,153) (183,025)
-------- --------
Cash flows from financing activities
Proceeds from secured term loan facilities 327,670 395,170
Issuance of 7.75% senior unsecured bonds - 100,000
Repayment of 9.00% senior unsecured bonds - (127,500 )
Issuance cost of 7.75% senior unsecured bonds - (1,819 )
Direct financing cost of secured term loan facilities (2,680 ) (2,058)
Repayment of secured term loan facilities (204,092 ) (251,852)
--------- --------
Net cash provided by financing activities 120,898 111,941
------- -------
Net (decrease) / increase in cash and cash equivalents (30,507) 4,837
Cash and cash equivalents at beginning of year 87,779 57,272
------ ------
Cash and cash equivalents at end of year $57,272 $62,109
======= =======
Supplemental Information
Total interest paid during the year, net of amounts capitalized $29,815 $35,890
======= =======
Total tax paid during the year $601 $515
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SOURCE Navigator Gas
