Navigator Holdings Ltd.: Preliminary Results for the Three and Nine Months Ended September 30, 2019
LONDON, Nov. 13, 2019 /PRNewswire/ --
Highlights
-- Navigator Holdings Ltd. (the "Company", "we", "us" and "our") (NYSE:
NVGS) reported operating revenue of $75.6 million for the three months
ended September 30, 2019, compared to $80.8 million for the three months
ended September 30, 2018.
-- Net loss was $2.9 million (loss per share of $0.05) for the three months
ended September 30, 2019 (which includes a $1.0 million non-cash loss on
exchange rate movements), compared to net income of $0.6 million for the
three months ended September 30, 2018.
-- Adjusted EBITDA(1) was $29.5 million for the three months ended
September 30, 2019 compared to $30.4 million for the three months
September 30, 2018.
-- We have contracted with seven new customers during the third quarter, as
well as a twelve-month charter with a major petrochemical producer for
one of our ethane-capable midsize vessels at a rate in excess of $30,000
per day.
-- A fourth long term throughput agreement has been signed for the Marine
Export Terminal with a major petrochemical producer, increasing total
offtake commitments to approximately 75% of nameplate capacity. The
committed contracts cover a period of five to seven years.
-- Our 50/50 joint venture relating to our ethylene export marine terminal
at Morgan's Point, Texas (the "Marine Export Terminal") is forecast to
be operational on time and on budget with our first loading scheduled
for December 2019.
-- Following the technical management takeover of Navigator Prominence we
have now taken 16 vessels into in-house management.
-- On October 29, 2019, the Company closed a sale and leaseback transaction
to refinance Navigator Aurora. The sale price agreed was $77.5 million,
with the buyer paying 90% of the vessel's value, or $69.75 million and a
seller's credit representing the remaining 10%. From the proceeds, $44.5
million was used to repay the vessel's secured tranche of the December
2015 secured term loan facility. Simultaneous with this sale, the
Company entered into a bareboat charter for the vessel for a period of
up to 13 years, with break clauses at years 5, 7 and 10.
Our medium size gas carriers successfully performed two 'firsts' during the third quarter of 2019. Competitive U.S. butane pricing enabled our customers to transport tons to India, adding significant ton mile to the medium size segment, which we believe was the first trade of its kind, as Middle East exports have typically catered for India's import needs. Also made possible due to competitive U.S. priced natural gas liquids ("NGLS"), one of our medium sized gas carriers transported ethane from the U.S. Gulf to China, which we believe was the first medium sized ethane cargo moving trans-pacific, also indicating longer ton mile in the segment. Our four medium sized vessels were fully utilized during the quarter, and we expect this to continue for the remainder of the year. Medium sized gas carrier 12 month time charter rates increased from approximately $540,000 per calendar month ("pcm") at the beginning of the quarter to current rates of approximately $740,000 pcm.
The handysize segment remained flat during the third quarter with 12 month time charter rates hovering around $545,000 pcm to current rates of $575,000 pcm, experiencing a time-lag for the positive effects from stronger freight markets for the larger segments above. Geopolitical tension in the Middle East resulted in the introduction of substantial war risk premiums on shipping through the Straits of Hormuz, which made spot movements of LPG and petrochemical cargoes less economical. It appears that only the Very Large Gas Carrier ("VLGC") market has been able to absorb these increased premiums on their trades.
The handysize segment is continuously expanding its footprint creating new trades that increase incremental demand. We have contracted with seven new clients during the third quarter, putting the handysize's versatility to practice in new markets in China and in Africa. One example is a new Indian coastal propylene cabotage trade, which balances the domestic market. This is the first time we have engaged one of our handysize vessels for this trade.
The belief in a stronger freight market is underpinned by newbuilding order activity in the market. Six medium-sized gas carriers and two handysize ethylene carriers were confirmed ordered during the third quarter, all with anticipated delivery time within two years.
The Marine Export Terminal is on schedule to commence operations at the end of the year, which will add incremental product supply to the market. Additional U.S. and Canadian export terminals are scheduled to be commissioned in 2020 requiring semi-refrigerated handysize vessels. A continuing healthy freight market for the medium and large gas carriers is believed to be having a positive effect on the handysize segment.
Reconciliation of Non-GAAP Financial Measures
The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended September 30, 2018 and 2019:
(in thousands)
September 30,
September 30,
2018 2019
Net income/(loss) $623 $(2,913)
Interest expense 11,014 12,406
Interest income (202 ) (197)
Income taxes 137 131
Depreciation and
amortization 18,846 19,009
EBITDA
(1) $30,418 $28,436
Foreign currency
exchange gain on
senior secured
bonds (4,171)
Unrealized loss on
non-designated
derivative
instruments 5,197
Adjusted EBITDA
(1) $30,418 $29,462
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before any foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. 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 alternatives 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.
Conference Call Details:
On Thursday, November 14, 2019, 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 (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 Thursday, November 21, 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#
Navigator Gas
Attention: Investor Relations Department
London: 10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20 7340 4850
New York: 650 Madison Ave, 25th Floor, New York, NY 10022. Tel: +1 212 355 5893
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.
FORWARD LOOKING STATEMENTS
This press release 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. 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," "scheduled," or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this press release. 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 ability to continue to comply with all our debt covenants;
-- 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;
-- the availability of low sulfur fuel oil compliant with IMO 2020
regulatory requirements;
-- changes in governmental rules and regulations or actions taken by
regulatory authorities;
-- our vessels engaging in ship to ship transfers of LPG or petrochemical
cargoes which may ultimately be discharged in sanctioned areas or to
sanctioned individuals without our knowledge. Three of our vessels were
named in a recent U.S. Department of Treasury's Office of Foreign Assets
Control ("OFAC") Advisory to the Maritime Petroleum Shipping Community
as ships that had engaged in such ship to ship transfers of cargoes that
may have ultimately been destined for Syria;
-- 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 with Enterprise Products Partners L.P.; 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 press release are made only as of the date of this press release. 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 Holdings Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
December 31, 2018
September 30, 2019
---
(in thousands, except share data)
Assets
Current assets
Cash, cash equivalents and restricted cash............................................................................................ $71,515 $56,951
Accounts receivable, net.......................................................................................................................... 17,033 23,632
Accrued income........................................................................................................................................ 4,731 2,680
Prepaid expenses and other current assets............................................................................................. 16,057 21,087
Bunkers and lubricant oils......................................................................................................................... 8,789 8,446
Total current assets.................................................................................................................................... 118,125 112,796
Non-current assets
Vessels, net................................................................................................................................................ 1,670,865 1,625,913
Property, plant and equipment, net............................................................................................................. 1,299 1,098
Investment in equity accounted joint venture............................................................................................. 42,462 117,656
Right-of-use asset for operating leases................................................................................................. - 7,041
---
Total non-current assets.......................................................................................................................... 1,714,626 1,751,708
Total assets................................................................................................................................................ $1,832,751 $1,864,504
===
Liabilities and stockholders' equity
Current liabilities
Current portion of secured term loan facilities, net of deferred financing costs....................................... $68,857 $67,779
Current portion of operating lease liabilities............................................................................................... - 1,104
Accounts payable..................................................................................................................................... 10,784 8,351
Accrued expenses and other liabilities...................................................................................................... 12,798 15,701
Accrued interest......................................................................................................................................... 4,613 2,544
Deferred income........................................................................................................................................ 8,342 13,309
Total current liabilities................................................................................................................................ 105,394 108,788
Non-current Liabilities
Secured term loan facilities and revolving credit facilities, net of current portion and deferred 599,676 635,375
financing costs..........................................................................................................................................
Senior secured bond, net of deferred financing costs............................................................................ 68,378 65,197
Senior unsecured bond, net of deferred financing costs........................................................................ 99,039 98,055
Derivative liabilities................................................................................................................................... 5,154 8,706
Operating lease liabilities, net of current portion..................................................................................... - 6,193
---
Total non-current liabilities........................................................................................................................ 772,247 813,526
Total Liabilities....................................................................................................................................... 877,641 922,314
Commitments and contingencies (see note 13)
Stockholders' equity
Common stock-$.01 par value per share; 400,000,000 shares authorized; 55,826,644 shares 557 558
issued and outstanding, (2018: 55,657,631)......................................................................
Additional paid-in capital........................................................................................................................ 590,508 591,623
Accumulated other comprehensive loss............................................................................................... (363 ) (360 )
Retained earnings..................................................................................................................................... 364,408 350,369
Total stockholders' equity....................................................................................................................... 955,110 942,190
Total liabilities and stockholders' equity.......................................................................................... $1,832,751 $1,864,504
===
Navigator Holdings Ltd.
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
(in thousands except share and per (in thousands except share and per
share share
data)
data)
2018 2019 2018 2019
---
Revenues
Operating revenue........................................................................... $80,843 $75,624 $231,813 $225,313
Expenses
Brokerage commissions................................................................. 1,434 1,217 3,793 3,759
Voyage expenses............................................................................ 17,251 13,387 46,158 43,181
Vessel operating expenses............................................................. 26,873 26,820 79,624 83,742
Depreciation and amortization.................................................... 18,846 19,009 57,256 56,870
General and administrative costs................................................. 4,867 4,631 14,126 14,628
---
Total operating expenses............................................................. 69,271 65,064 200,957 202,180
---
Operating income.......................................................................... 11,572 10,560 30,856 23,133
Other income/(expense)
Foreign currency exchange gain on senior secured bonds....... 4,171 3,219
Unrealized loss on non-designated derivative instruments..... (5,197 ) (3,552 )
Interest expense.............................................................................. (11,014 ) (12,406 ) (32,891 ) (36,768 )
Interest income................................................................................ 202 197 561 617
---
Income/(loss) before income taxes and share of result 760 (2,675 ) (1,474 ) (13,351 )
of equity accounted joint venture.........................................
Income taxes................................................................................... (137 ) (131 ) (366 ) (305 )
Share of result of equity accounted joint venture.................... (107 ) (247 )
Net income/(loss)............................................................................ $623 $(2,913 ) $(1,840 ) $(13,903 )
Earnings/(loss) per share:
Basic:................................................................................................ $0.01 $(0.05 ) $(0.03 ) $(0.25 )
Diluted:............................................................................................. $0.01 $(0.05 ) $(0.03 ) $(0.25 )
Weighted average number of shares outstanding:
Basic:................................................................................................ 55,656,304 55,829,239 55,620,149 55,781,276
Diluted:............................................................................................. 56,000,240 55,829,239 55,620,149 55,781,276
===
Navigator Holdings Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months ended
Nine Months ended
September 30, September 30,
2018 2019
---
(in thousands)
(in thousands)
Cash flows from operating activities
Net loss.................................................................................................................................................. $(1,840 ) $(13,903 )
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on non-designated derivative instruments................................................................... - 3,552
Depreciation and amortization................................................................................................................ 57,256 56,870
Payment of drydocking costs................................................................................................................. (4,875 ) (9,060 )
Prior year expenses recovered in insurance claim............................................................................... (776 ) -
Amortization of share-based compensation.......................................................................................... 765 1,116
Amortization of deferred financing costs............................................................................................... 1,692 2,936
Share of result of equity accounted joint venture.................................................................................. - 247
Unrealized foreign exchange gain on senior secured bonds................................................................. - (3,219 )
Other unrealized foreign exchange gain................................................................................................ 39 (198 )
Changes in operating assets and liabilities
Accounts receivable................................................................................................................................ 1,089 (6,599 )
Bunkers and lubricant oils...................................................................................................................... (2,542 ) 343
Accrued income and prepaid expenses and other current assets....................................................... 425 (1,546 )
Accounts payable, accrued interest, accrued expenses and other liabilities...................................... 4,541 3,851
Net cash provided by operating activities..................................................................................... 55,774 34,390
Cash flows from investing activities
Refunds/(additions) to vessels and equipment....................................................................................... 69 (2,565 )
Investment in equity accounted joint venture......................................................................................... (25,994 ) (75,440 )
Purchase of other property, plant and equipment.................................................................................. (120 ) (255 )
Insurance recoveries............................................................................................................................. 1,010 1,130
Net cash used in investing activities............................................................................................. (25,035 ) (77,130 )
Cash flows from financing activities
Proceeds from secured term loan facilities and revolving credit facilities............................................. 21,900 162,000
Issuance costs of secured bond........................................................................................................... - (136 )
Issuance costs of unsecured bond amendment.................................................................................... - (1,325 )
Issuance costs of secured term loan facilities....................................................................................... - (1,448 )
Issuance costs of terminal credit facility................................................................................................ - (2,765 )
Repayment of secured term loan facilities and revolving credit facilities............................................... (64,290 ) (128,150 )
Net cash (used in)/provided by financing activities....................................................................... (42,390 ) 28,176
Net decrease in cash, cash equivalents and restricted cash..................................................... (11,651 ) (14,564 )
Cash, cash equivalents and restricted cash at beginning of period......................................... 62,109 71,515
Cash, cash equivalents and restricted cash at end of period..................................................... $50,458 $56,951
===
Supplemental Information
Total interest paid during the period, net of amounts capitalized............................................................ $33,438 $35,478
===
Total tax paid during the period.............................................................................................................. $107 $225
===
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SOURCE Navigator Gas
