Navigator Holdings Ltd. Preliminary Fourth Quarter and Financial Year 2018 Results
LONDON, April 1, 2019 /PRNewswire/ --
Highlights
-- Navigator Holdings Ltd. (the "Company") (NYSE: NVGS) reported operating
revenue of $78.2 million for the three months ended December 31, 2018,
an increase from $76.7 million for the three months ended December 31,
2017. Operating revenue for the year ended December 31, 2018, amounted
to $310.0 million.
-- A net loss of $3.9 million (or a loss per share of $0.07) for the three
months ended December 31, 2018. This includes non-cash movements of our
cross-currency interest rate swap and foreign exchange translation, both
relating to our NOK denominated bond, without which the loss for the
three months ended December 31, 2018 would have been $1.1 million (or a
loss per share of $0.02). A net loss of $5.7 million (or a loss per
share of $0.10) for the year ended December 31, 2018, which includes a
loss of $2.8 million for non-cash movements of our cross-currency
interest rate swap and foreign exchange translation.
-- Adjusted EBITDA((1)) was $117.6 million for the year ended December 31,
2018, compared to $120.8 million for the year ended December 31, 2017.
-- Maintained a fleet utilization of 86.3% for the three months ended
December 31, 2018, resulting in a strong utilization of 89.0% for the
year ended December 31, 2018.
-- In November 2018, the Company successfully issued senior secured bonds
in an aggregate principal amount of NOK 600 million (approximately $71.7
million) with Nordic Trustee AS. as the bond trustee. The net proceeds
will be used to partially finance the Company's portion of the capital
cost of construction of the ethylene export marine terminal at Morgan's
Point, Texas (the "Marine Export Terminal") related to the Company's
50/50 joint venture (the "Marine Terminal Joint Venture").
-- Since the end of the year, in March 2019, the Company successfully
re-financed four of its ethylene capable vessels from the 2015 Secured
Term Loan Facility for an aggregate amount of $107.0 million. The
repayment of the loan on the four vessels was $75.6 million, leaving net
proceeds of $31.4 million for fees and for general corporate purposes.
-- In March 2019, the Company also successfully executed a credit agreement
(the "Terminal Facility") for a maximum principle amount of $75.0
million to be solely used for the payment of construction costs relating
to the Marine Export Terminal.
-- Upon completion of the above financings, the company has fully financed
its portion of the capital cost of construction of the Marine Export
Terminal.
Fourth Quarter 2018 Financial Results Overview
Operating revenue for the three months ended December 31, 2018, was $78.2 million, an increase of $1.5 million, or 2.0%, compared to the $76.7 million of operating revenue for the three months ended December 31, 2017.
For the fourth quarter of 2018, the average time charter equivalent rate ("TCE")((2) )across the fleet was $636,333 per calendar month ($20,920 per day), compared to $626,161 per calendar month ($20,586 per day) for the comparable period in 2017.
Fleet utilization across the 38 vessels was 86.3% for the fourth quarter of 2018, a reduction from 87.2% in the fourth quarter of 2017.
Operating revenue less voyage expenses amounted to $62.8 million for the three months ended December 31, 2018, compared to $61.9 million in the same three month period of 2017. This increase during the three months ended December 31, 2018, compared to the three months ended December 31, 2017, was as a result of a combination of increases in TCE rates giving rise to additional revenue of $1.0 million, a further $0.5 million increase due to the additional vessels in our fleet, partially off-set by a reduction in utilization rates of $0.6 million.
Net loss was $3.9 million for the three months ended December 31, 2018, or a loss per share of $0.07 per share. This includes non-cash movements of our cross-currency interest rate swap and foreign exchange translation, both relating to our NOK denominated bond, without which the loss for the three months ended December 31, 2018 would have been $1.1 million.
Reconciliation of Non-GAAP Financial Measure
The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three and twelve months ended December 31, 2017 and 2018:
(in thousands)
(in thousands)
Three months ended
Year ended
December 31,
December 31,
December 31,
December 31,
2017 2018 2017 2018
Net income / (loss) $1,411 $(3,899) $5,310 $(5,739)
Net interest expense 9,324 11,724 41,475 44,054
Income taxes 6 (33) 397 333
Depreciation and amortization 18,863 18,884 73,588 76,140
EBITDA(1) $29,604 $26,676 $120,770 $114,788
Foreign currency exchange gain on senior (2,360) (2,360)
secured bonds
Unrealized loss on non-designated derivative 5,154 5,154
instruments
Adjusted EBITDA(1) $29,604 $29,470 $120,770 $117,582
1. EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA
represents net income before net interest expense, income taxes and
depreciation and amortization. Adjusted EBITDA represents net income
before net interest expense, income taxes, depreciation and amortization
and non-cash movements of our cross-currency interest rate swap and
foreign exchange translation . Management believes that EBITDA and
Adjusted EBITDA are useful to investors in evaluating the operating
performance of the Company. EBITDA and Adjusted EBITDA do not represent
and should not be considered as an alternative to any financial measure
prepared in accordance with U.S. GAAP, and our calculation of EBITDA and
Adjusted EBITDA may not be comparable to that reported by other
companies. See the table above for a reconciliation of EBITDA and
Adjusted EBITDA to net income/(loss), our most directly comparable
financial measure calculated accordance with U.S. GAAP.
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
Three Months
Ended Ended
December 31, 2017 December 31, 2018
Fleet Data:
Operating revenue................................................................................. 76,684 78,233
Voyage expenses................................................................................. 14,781 15,476
Operating revenue less Voyage expenses.......................................... 61,903 62,757
Operating days...................................................................................... 3,007 3,000
Average daily time charter equivalent rate (2)....................................... $20,586 $20,920
The Terminal Facility
On March 29, 2019, Navigator Ethylene Terminals LLC, a wholly-owned subsidiary of the Company (the "Marine Terminal Borrower"), entered into a Credit Agreement with ING Capital LLC and SG Americas Securities, LLC for a maximum principal amount of $75.0 million, to be used solely for the payment of project costs relating to our Marine Export Terminal.
The Terminal Facility is comprised of an initial construction loan, followed by a term loan with a final maturity occurring on the earlier of (i) five years from completion of the Marine Export Terminal and (ii) December 31, 2025. Initial borrowing under the Terminal Facility may only occur after the Marine Terminal Borrower has made equity contributions required under the terminal facility to the Export Terminal Joint Venture, which together with available borrowings under the Terminal Facility, will fund its entire portion of the capital cost for the construction of the Marine Export Terminal. In addition, the ability of the Marine Terminal Borrower to borrow under the Terminal Facility is subject to the satisfaction of certain conditions, including the delivery to the lenders thereunder of legal opinions with respect to certain regulatory and environmental matters relating to the Marine Export Terminal. There can be no assurance that all conditions to borrowing will be satisfied.
Conference Call Details:
On Monday, April 1, 2019, at 8:00 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 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928 592 (Standard International Dial In). Please quote "Navigator" to the operator. 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.
A telephonic replay of the conference call will be available until April 8, 2019, by dialing 1(866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009 785 (Standard International Dial In). Access Code: 11870348#
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. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, 14 of which are ethylene and ethane capable. The Company plays 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 Holdings Ltd.
Unaudited Condensed Consolidated Balance Sheets
(Unaudited)
December 31, 2017
December 31, 2018
---
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents.................................................................................................................. $62,109 $71,515
Accounts receivable, net..................................................................................................................... 14,889 17,033
Accrued income................................................................................................................................... 15,791 4,731
Prepaid expenses and other current assets........................................................................................ 11,340 16,057
Bunkers and lubricant oils..................................................................................................................... 8,008 8,789
Total current assets.............................................................................................................................. 112,137 118,125
Non-current assets
Vessels in operation, net...................................................................................................................... 1,740,139 1,670,865
Property, plant and equipment, net....................................................................................................... 1,611 1,299
Investment in equity accounted joint venture....................................................................................... - 42,462
---
Total non-current assets...................................................................................................................... 1,741,750 1,714,626
Total assets....................................................................................................................................... $1,853,887 $1,832,751
===
Liabilities and stockholders' equity
Current liabilities
Current portion of secured term loan facilities, net of deferred financing costs.................................. $81,559 $68,857
Accounts payable................................................................................................................................. 8,071 10,784
Accrued expenses and other liabilities................................................................................................. 12,478 12,798
Accrued interest.................................................................................................................................... 3,500 4,613
Deferred income.................................................................................................................................... 4,824 8,342
Total current liabilities........................................................................................................................... 110,432 105,394
Non-current Liabilities
Secured term loan facilities and revolving credit facilities, net of current portion and deferred 681,658 599,676
financing costs................................................................................................................................
Senior secured bond, net of deferred financing costs........................................................................ - 68,378
Senior unsecured bond, net of deferred financing costs.................................................................... 98,584 99,039
Derivative liabilities................................................................................................................................ - 5,154
---
Total non-current liabilities.................................................................................................................... 780,242 772,247
Total Liabilities................................................................................................................................... 890,674 877,641
Commitments and contingencies (see note 15)
Stockholders' equity
Common stock-$.01 par value per share; 400,000,000 shares authorized; 55,657,631 shares 555 557
issued and outstanding, (2017: 55,529,762)...................................................................................
Additional paid-in capital....................................................................................................................... 589,436 590,508
Accumulated other comprehensive loss.............................................................................................. (277 ) (363 )
Retained earnings................................................................................................................................. 373,499 364,408
Total stockholders' equity..................................................................................................................... 963,213 955,110
Total liabilities and stockholders' equity..................................................................................... $1,853,887 $1,832,751
===
Navigator Holdings Ltd.
Unaudited Condensed Consolidated Statements of Income
(Unaudited)
Three months ended
Year ended
December 31,
December 31,
(in thousands except share data) (in thousands except share
data)
2017 2018 2017 2018
---
Revenues
Operating revenue......................................................................................... $76,684 $78,233 $298,595 $310,046
Expenses
Brokerage commissions.................................................................................. 1,263 1,349 5,368 5,142
Voyage expenses........................................................................................... 14,781 15,476 55,542 61,634
Vessel operating expenses............................................................................ 26,956 27,095 100,968 106,719
Depreciation and amortization......................................................................... 18,863 18,884 73,588 76,140
General and administrative costs................................................................... 3,554 4,121 13,816 16,346
Other corporate expenses............................................................................. 526 684 2,131 2,585
---
Total operating expenses......................................................................... 65,943 67,609 251,413 268,566
---
Operating income....................................................................................... 10,741 10,624 47,182 41,480
Other income/(expense)
Share of result of equity accounted joint venture........................................... (38) (38)
Foreign currency exchange gain on senior secured bonds........................... 2,360 2,360
Unrealized loss on non-designated derivative instruments............................ (5,154) (5,154)
Interest expense............................................................................................. (9,967) (12,017) (37,691 ) (44,908 )
Write off of deferred financing costs............................................................. 495 (786 ) -
Write off of call premium and redemption charges on 9% (3,517 ) -
unsecured bond.........................................................................................
Interest income................................................................................................ 148 293 519 854
---
Income/(loss) before income taxes........................................................ 1,417 (3,932) 5,707 (5,406)
Income taxes................................................................................................... (6 ) 33 (397 ) (333 )
---
Net income/(loss)........................................................................................ $1,411 $(3,899) 5,310 (5,739)
Earnings/loss per share:
Basic:.............................................................................................................. $0.03 $(0.07) $0.10 $(0.10)
Diluted:............................................................................................................ $0.03 $(0.07) $0.10 $(0.10)
Weighted average number of shares outstanding:
Basic:.............................................................................................................. 55,529,762 55,655,357 55,508,974 55,629,023
Diluted:............................................................................................................. 55,898,502 55,999,293 55,881,454 55,629,023
===
Navigator Holdings Ltd.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three months ended
Year ended
December 31,
December 31,
(in thousands)
(in thousands)
2017 2018 2017 2018
Net income / (loss) $
1,411 $
(3,899) $
5,310 $
(5,739)
Other comprehensive income/(loss):
Foreign currency translation (242) (77) 10 (86)
gain/(loss)
Total comprehensive income/(loss) 7,760 (3,976) 44,816 (5,825)
Navigator Holdings Ltd.
Unaudited Condensed 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, 2016.................................... 55,363,467 $554 $586,451 $(465 ) $323,551 $910,091
Restricted shares issued March 29, 72,620 -
2016..................................................
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, 93,675 1 1
2017..................................................
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
Adjustment to equity for the adoption of - (3,352) (3,352)
the new revenue standard ...............
Forfeited shares - 2013 long-term equity (3,673) -
incentive plan ........................................
Restricted shares issued March 20, 2018 131,542 2 2
Net income.............................................. - (5,739) (5,739)
Foreign currency translation................... - (86) (86)
Share-based compensation plan............ - 1,072 1,072
---
December 31, 2018.............................. 55,657,631 $557 $590,508 $(363 ) $364,408 $955,110
Navigator Holdings Ltd.
Unaudited Condensed Consolidated Statements of Cash Flows
(Unaudited)
Year ended
Year ended
Year ended
December 31, December 31, December 31,
2016 2017 2018
(in thousands) (in thousands) (in thousands)
---
Cash flows from operating activities
Net income/(loss)........................................................................................................................ $44,638 $5,310 $(5,739)
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on non-designated derivative instruments........................................................ - 5,154
Depreciation and amortization..................................................................................................... 62,280 73,588 76,140
Payment of drydocking costs...................................................................................................... (9,902 ) (268 ) (5,796)
Amortization of share-based compensation............................................................................... 1,573 1,412 1,074
Amortization of deferred financing costs................................................................................... 3,091 3,217 2,292
Share of result of equity accounted affiliates............................................................................ - 38
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 ) (642 )
Unrealized foreign exchange gain on senior secured bonds.................................................... - (2,360 )
Other unrealized foreign exchange gain/(loss)......................................................................... 208 3 (12)
Changes in operating assets and liabilities
Accounts receivable.................................................................................................................. 1,991 (7,831 ) (2,144 )
Bunkers and lubricant oils.......................................................................................................... (3,457 ) (1,074 ) (781 )
Prepaid expenses and other current assets............................................................................. (7,694 ) (5,079 ) 2,629
Accounts payable, accrued interest and accrued expenses and other liabilities..................... (6,040 ) 4,654 7,664
Net cash provided by operating activities......................................................................... 86,748 75,921 77,517
Cash flows from investing activities
Payment to acquire vessels....................................................................................................... (1,733 ) (1,940 ) (648)
Investment in equity accounted joint venture............................................................................. - (42,500)
Payment for vessels under construction................................................................................... (239,179 ) (180,629 ) -
Purchase of other property, plant and equipment...................................................................... (75 ) (1,726 ) (182 )
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 1,003
Capitalized costs for the repair of Navigator Aries................................................................... (8,441 ) -
Net cash used in investing activities.................................................................................. (238,153 ) (183,025 ) (42,327)
Cash flows from financing activities
Proceeds from secured term loan facilities and revolving credit facilities................................. 327,670 395,170 21,900
Issuance of senior secured bonds............................................................................................ - 71,697
Issuance of 7.75% senior unsecured bonds............................................................................. - 100,000
Repayment of 9.00% senior unsecured bonds.......................................................................... - (127,500 )
Issuance cost of senior secured bonds..................................................................................... - (991 )
Issuance cost of 7.75% senior unsecured bonds...................................................................... - (1,819 )
Direct financing cost of secured term loan and revolving credit facilities................................... (2,680 ) (2,058 ) (38 )
Repayment of secured term loan and revolving credit facilities.................................................. (204,092 ) (251,852 ) (118,352 )
Net cash provided by/(used in) financing activities.......................................................... 120,898 111,941 (25,784)
Net (decrease)/increase in cash, cash equivalents and restricted cash..................... (30,507 ) 4,837 9,406
Cash, cash equivalents and restricted cash at beginning of year................................ 87,779 57,272 62,109
Cash, cash equivalents and restricted cash at end of year........................................... $57,272 $62,109 $71,515
===
Supplemental Information
Total interest paid during the year, net of amounts capitalized................................................... $29,815 $35,890 $41,465
===
Total tax paid during the year...................................................................................................... $601 $515 $176
===
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Report on Form 6-K for the quarter ended December 31, 2018 contains certain forward-looking statements 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 report. 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. Forward-looking statements appear in a number of places in this report. 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 expectations regarding the construction and financing of the Marine
Export Terminal, the financing of our investment in the Marine Export
Terminal and the financial success of the Marine Export Terminal and our
related 50/50 joint venture (the "Export Terminal Joint Venture"); and
-- other factors detailed from time to time in other periodic reports we
file with the Securities and Exchange Commission.
All forward-looking statements included in this Report on Form 6-K are made only as of the date of this Report on Form 6-K. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. 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 Gas
Attention: Investor Relations Department
New York: 650 Madison Ave, New York, NY 10022. Tel: +1-212-355-5893
London: 10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20-7340-4850
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SOURCE Navigator Gas
