Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2020
ATHENS, Greece, May 18, 2020 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the quarter ended March 31, 2020.
Highlights for the First Quarter Ended March 31, 2020:
-- Adjusted net income(1) of $33.3 million, or $1.34 per share, for the
three months ended March 31, 2020 compared to $38.6 million, or $2.53
per share, for the three months ended March 31, 2019, a decrease of
13.7%.
-- Operating revenues of $106.2 million for the three months ended March
31, 2020 compared to $112.9 million for the three months ended March 31,
2019, a decrease of 5.9%.
-- Adjusted EBITDA(1) of $71.9 million for the three months ended March 31,
2020 compared to $77.5 million for the three months ended March 31,
2019, a decrease of 7.2%.
-- Total contracted operating revenues were $1.3 billion as of March 31,
2020, with charters extending through 2028 and remaining average
contracted charter duration of 3.8 years, weighted by aggregate
contracted charter hire.
-- Charter coverage of 85% for the next 12 months based on current
operating revenues and 66% in terms of contracted operating days.
Three Months Ended March 31, 2020
Financial Summary - Unaudited
(
Expressed in thousands of United States dollars, except per share amounts
)
Three months
Three months
ended ended
March 31,
March 31,
--- ---
2020 2019
Operating revenues $106,196 $112,891
Net income $29,089 $33,443
Adjusted net income(1) $33,281 $38,569
Earnings per share, diluted $1.17 $2.19
Adjusted earnings per share, diluted(1) $1.34 $2.53
Diluted weighted average number of shares (in thousands) 24,789 15,237
Adjusted EBITDA(1) $71,918 $77,538
---
1
Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the
reconciliation of net income to adjusted net income and net income to adjusted EBITDA.
Danaos' CEO Dr. John Coustas commented:
"Our results for the first quarter of 2020 were not impacted by the Covid-19 pandemic, except for the increase in off-hire days related to delays in scrubber installations in Chinese shipyards. The Company's adjusted net income of $33.3 million for the first quarter of 2020 decreased by $5.3 million when compared to the first quarter of 2019. Adjusted EBITDA for the first quarter of 2020 was $71.9 million, $5.6 million lower when compared to the first quarter of 2019.
"The Covid-19 pandemic has swiftly and dramatically disrupted the container market and caused a significant drop in container volumes. There is no doubt that the pandemic will have a very negative effect on GDP, unemployment and countless other macroeconomic indicators in the near term. Although countries are gradually starting to lift restrictions and allow economic activity to resume, the speed of any potential recovery and the long-term impact of the pandemic on consumer demand and global manufacturing supply chains is unclear. There is certainly optimism about the positive impacts of sweeping fiscal and monetary initiatives being undertaken globally, but it is too early to assess any such impacts.
"Liner companies have addressed the drop in volumes brought on by the pandemic by cancelling sailings and idling capacity. As a result, short-term charter rates have dropped by between 25% and 40%, depending on vessel size. Despite lower transportation demand, prudent capacity management, reduced bunker prices and falling interest rates have significantly alleviated pressure on the cash flows of our liner company customers. Additionally, we have recently seen several initiatives by governments in Europe and Asia to support the liner industry during this difficult period, which is a very encouraging sign.
"What is most important is that we look forward and continue to execute our strategy and maintain a solid base to withstand the current market turbulence. To that end, we are successfully managing charter renewals, albeit at lower charter rates but still at rates well above operational breakeven levels. Notwithstanding the pressure in the charter market, we are well insulated from near-term volatility due to our high charter coverage of 86% in terms of operating revenues and 66% in terms of operating days over the next 12 months. This provides significant visibility into our cash flows during this period. Also, we will not have any additional financial impact on our operating revenues related to scrubber installations. Finally, we have ample liquidity and a $1.3 billion charter backlog, which provides us with flexibility to both manage our business and react to growth opportunities that may present themselves. During the first quarter, we took delivery of Niledutch Lion, an 8,626 TEU containership built in 2008, and in early April, we took delivery of Phoebe, an 8,463 TEU containership built in 2005. Consistent with our long-standing strategy, both vessels have been contracted on two-year time charters that will contribute an incremental $12 million of EBITDA on an annualized basis.
"The strength of our company and our strong relationships in the finance community is demonstrated by the financing arrangements executed in the midst of the pandemic. On May 12, 2020 we concluded a $139.1 million re-financing of the existing sale & leaseback transaction for two of our 13,100 TEU vessels at a significantly lower cost compared to the previous financing arrangement. This will result in approximately $7.5 million of interest cost savings on an annualized basis. Additionally, lower US$ Libor interest rates, which are currently lower by 2% when compared to 2019, will further contribute to reducing cash finance costs. For illustrative purposes, we will save approximately $28 million on an annualized basis based on $1.4 billion of bank debt outstanding at the end of the first quarter and current Libor rates. We have further arranged debt financing for the new vessels through a $24 million credit facility that we entered into at the beginning of April 2020.
"We remain committed to operational excellence and technological innovation, which allows us to continually deliver a high quality service to our customers. 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 March 31, 2020 compared to the three months ended March 31, 2019
During the three months ended March 31, 2020, Danaos had an average of 55.7 containerships compared to 55 containerships during the three months ended March 31, 2019. Our fleet utilization for the three months ended March 31, 2020 was 91.3% compared to 98.2% for the three months ended March 31, 2019. Adjusted fleet utilization, excluding the effect of 188 days of incremental off-hire due to shipyard delays related to the COVID-19 pandemic, was 95% in the three months ended March 31, 2020.
Our adjusted net income amounted to $33.3 million, or $1.34 per share, for the three months ended March 31, 2020 compared to $38.6 million, or $2.53 per share, for the three months ended March 31, 2019. We have adjusted our net income in the three months ended March 31, 2020 for a non-cash fees amortization and accrued finance fees charge of $4.2 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The decrease of $5.3 million in adjusted net income for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 is attributable mainly to a $6.7 million decrease in operating revenues, of which $3.2 million relates to incremental off-hire due to shipyard delays related to the COVID-19 pandemic, and a $0.6 million increase in operating expenses, which were partially offset by a $1.6 million increase in the operating performance of our equity investment in Gemini Shipholdings Corporation ("Gemini") and a $0.4 million decrease in net finance expenses.
On a non-adjusted basis, our net income amounted to $29.1 million, or $1.17 earnings per diluted share, for the three months ended March 31, 2020 compared to net income of $33.4 million, or $2.19 earnings per diluted share, for the three months ended March 31, 2019.
Operating Revenues
Operating revenues decreased by 5.9%, or $6.7 million, to $106.2 million in the three months ended March 31, 2020 from $112.9 million in the three months ended March 31, 2019.
Operating revenues for the three months ended March 31, 2020 reflect:
-- a $6.1 million decrease in revenues due to lower fleet utilization of
our vessels in the three months ended March 31, 2020 compared to the
three months ended March 31, 2019 mainly due to the scheduled
installation of scrubbers and dry-dockings of our vessels, of which $3.2
million relates to incremental delays in the Chinese shipyards where
these activities were being performed due to the COVID-19 pandemic.
-- a $1.7 million decrease in revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 as a result of
lower re-chartering rates for certain of our vessels. This decrease is
due to a $4.5 million decrease in revenues due to the re-chartering of
four vessels in our fleet that concluded long-term charters over the
last twelve months and were re-deployed at the prevailing lower spot
rates in the three months ended March 31, 2020, partially offset by a
$2.8 million improvement from the re-chartering of other vessels in the
fleet.
-- a $5.1 million increase in revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 as a result of
contractual increases in charter rates of vessels under long-term
charters.
-- a $4.9 million decrease in revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 due to lower
non-cash revenue recognition in accordance with US GAAP.
-- a $0.9 million increase in revenues in the three months ended March 31,
2020 compared to the three months ended March 31, 2019 due to the
acquisition of a new vessel.
Vessel Operating Expenses
Vessel operating expenses increased by $0.1 million to $26.0 million in the three months ended March 31, 2020 from $25.9 million in the three months ended March 31, 2019, primarily as a result of the increase in the average number of vessels in our fleet, partially offset by an overall decrease in the average daily operating cost of $5,522 per vessel per day for vessels on time charter for the three months ended March 31, 2020 compared to $5,636 per day for the three months ended March 31, 2019. Management believes that our daily operating cost are among 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 increased by 3.4%, or $0.8 million, to $24.6 million in the three months ended March 31, 2020 from $23.8 million in the three months ended March 31, 2019 mainly due to the installation of scrubbers on four of our vessels and the acquisition of the vessel Niledutch Lion in the three months ended March 31, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $0.1 million to $2.3 million in the three months ended March 31, 2020 from $2.2 million in the three months ended March 31, 2019.
General and Administrative Expenses
General and administrative expenses decreased by $1.1 million to $5.8 million in the three months ended March 31, 2020, from $6.9 million in the three months ended March 31, 2019. The decrease was mainly due to decreased share based compensation and professional fees.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by $0.7 million to $4.0 million in the three months ended March 31, 2020 from $3.3 million in the three months ended March 31, 2019 mainly due to increased bunkering expenses.
Interest Expense and Interest Income
Interest expense decreased by 8.4%, or $1.5 million, to $16.3 million in the three months ended March 31, 2020 from $17.8 million in the three months ended March 31, 2019. The decrease in interest expense is attributable to:
(i) a $0.6 million decrease in interest expense due to a $112.1 million decrease in our average debt (including leaseback obligations), to $1,544.2 million in the three months ended March 31, 2020, compared to $1,656.3 million in the three months ended March 31, 2019; and
(ii) a $0.9 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of March 31, 2020, our bank debt outstanding, gross of deferred finance costs, was $1,396.3 million and our leaseback obligation was $134.3 million compared to bank debt of $1,641.7 million as of March 31, 2019.
Interest income increased by $0.1 million to $1.7 million in the three months ended March 31, 2020 compared to $1.6 million in the three months ended March 31, 2019.
Other finance costs, net
Other finance costs, net increased by $0.3 million to $0.6 million in the three months ended March 31, 2020 compared to $0.3 million in the three months ended March 31, 2019.
Equity income/(loss) on investments
Equity income/(loss) on investments increased by $1.6 million to $1.5 million of income on investments in the three months ended March 31, 2020 compared to a $0.1 million loss on investments in the three months ended March 31, 2019 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended March 31, 2020 and March 31, 2019.
Other income, net
Other income, net was $0.2 million in income in the three months ended March 31, 2020 compared to nil in the three months ended March 31, 2019.
Adjusted EBITDA
Adjusted EBITDA decreased by 7.2%, or $5.6 million, to $71.9 million in the three months ended March 31, 2020 from $77.5 million in the three months ended March 31, 2019. As outlined above, the decrease is mainly attributable to a $6.7 million decrease in operating revenues, of which $3.2 million relates to the impact of the COVID-19 pandemic described above, a $0.3 million increase in other finance expenses and a $0.2 million increase in operating expenses, which were partially offset by a $1.6 million increase in the operating performance of our equity investees. Adjusted EBITDA for the three months ended March 31, 2020 is adjusted for stock based compensation of $0.3 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Recent Developments
In 2020, we acquired one 8,463 TEU container vessel and one 8,626 TEU container vessel, both of which have been fixed on two-year charters and in the aggregate are expected to contribute approximately $12 million to EBITDA on an annualized basis. Additionally, we entered into an agreement to acquire an 8,533 TEU vessel, which is expected to be delivered to us in the second quarter of 2020.
On April 8, 2020, we entered into a loan agreement with Macquarie Bank for an amount of up to $24 million drawn down in full on April 9, 2020. The loan was used to partially finance the acquisition costs of the vessels Niledutch Lion and Phoebe.
On May 12, 2020, we refinanced the existing leaseback obligation related to the vessels Hyundai Honour and Hyundai Respect with a new sale and leaseback arrangement amounting to $139.1 million with a four-year term, at the end of which we will reacquire these vessels for an aggregate amount of $36.0 million or earlier, at our option, for a purchase price set forth in the agreement. This arrangement was recorded as a financing transaction and recognized as a financial liability.
Conference Call and Webcast
On Tuesday, May 19, 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 May 26, 2020 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 10143967# 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 62 containerships aggregating 377,236 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 impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized cargo, the ability and willingness of charterers to perform their obligations to us, charter rates for containerships, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; the effects of the 2018 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 2018 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 104 unscheduled off-hire days in the three months ended March 31, 2020. 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 First
Quarter Quarter
---
2020 2019
--- ---
Ownership Days 5,073 4,950
Less Off-hire Days:
Scheduled Off-hire Days (336)
Other Off-hire Days (104) (90)
Operating Days 4,633 4,860
Vessel Utilization 91.3% 98.2%
Operating Revenues (in '000s of US Dollars) $106,196 $112,891
Average Gross Daily Charter Rate $22,922 $23,229
Fleet List
The following table describes in detail our fleet deployment profile as of May 18, 2020:
Vessel Name Vessel Size Year Built
Expiration of Charter(1)
(TEU)
--- ---
Containerships
---
Hyundai Ambition (ex MSC Ambition) 13,100 2012
June 2024
Hyundai Speed (ex Maersk Exeter) 13,100 2012
June 2024
Hyundai Smart (ex 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
April 2023
Pusan C 9,580 2006
March 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
February 2023
Europe 8,468 2004
March 2023
Phoebe 8,463 2005
April 2022
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
YM Seattle 4,253 2007
September 2020
YM Vancouver 4,253 2007
June 2020
Derby D 4,253 2004
July 2020
ANL Tongala 4,253 2004
October 2020
ZIM Rio Grande 4,253 2008
June 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
July 2020
Express Argentina 3,400 2010
June 2020
Express Brazil 3,400 2010
September 2020
Express France 3,400 2010
October 2020
Singapore 3,314 2004
July 2020
Colombo 3,314 2004
August 2020
MSC Zebra 2,602 2001
September 2020
Amalia C 2,452 1998
August 2020
Danae C 2,524 2001
June 2020
Advance 2,200 1997
August 2020
Future 2,200 1997
June 2020
Sprinter 2,200 1997
July 2020
Stride 2,200 1997
August 2020
Progress C 2,200 1998
July 2020
Bridge 2,200 1998
September 2020
Highway 2,200 1998
May 2020
Vladivostok 2,200 1997
June 2020
Belita ?2) 8,533 2006
September 2021
Catherine C (2) 6,422 2001
January 2023
Leo C (2) 6,422 2002
August 2022
Suez Canal(2) 5,610 2002
July 2020
Genoa?2) 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 Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three months
Three months
ended ended
March 31,
March 31,
--- ---
2020 2019
OPERATING REVENUES $106,196 $112,891
OPERATING EXPENSES
Vessel operating expenses (26,002) (25,871)
Depreciation & amortization (26,891) (25,957)
General & administrative (5,840) (6,869)
Other operating expenses (4,046) (3,270)
Income From Operations 43,417 50,924
---
OTHER INCOME/(EXPENSES)
Interest income 1,714 1,596
Interest expense (16,313) (17,843)
Other finance expenses (622) (324)
Equity income/(loss) on investments 1,545 (84)
Other income, net 251 67
Realized loss on derivatives (903) (893)
Total Other Expenses, net (14,328) (17,481)
---
Net Income $29,089 $33,443
===
EARNINGS PER SHARE
Basic earnings per share $1.18 $2.24
===
Diluted earnings per share $1.17 $2.19
===
Basic weighted average number of common shares (in thousands of shares) 24,573 14,939
Diluted weighted average number of common shares (in thousands of shares) 24,789 15,237
Non-GAAP Measures(1)
Reconciliation of Net Income to Adjusted Net Income - Unaudited
Three months
Three months
ended ended
March 31,
March 31,
--- ---
2020 2019
Net income $29,089 $33,443
Amortization of financing fees, debt discount & finance fees accrued 4,192 5,126
Adjusted Net Income $33,281 $38,569
Adjusted Earnings Per Share, diluted $1.34 $2.53
Diluted weighted average number of shares (in thousands) 24,789 15,237
(1) 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 ended March 31, 2020
and 2019. 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
March 31, December 31,
--- ---
2020 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents $97,019 $139,170
Accounts receivable, net 7,921 7,145
Other current assets 47,133 44,071
152,073 190,386
NON-CURRENT ASSETS
Fixed assets, net 2,413,730 2,389,874
Deferred charges, net 13,995 11,455
Investments in affiliates 10,510 8,965
Other non-current assets 71,199 82,339
2,509,434 2,492,633
TOTAL ASSETS $2,661,507 $2,683,019
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion $119,525 $119,673
Accumulated accrued interest, current portion 32,870 34,137
Long-term leaseback obligations, current portion 16,804 16,342
Accounts payable, accrued liabilities & other current liabilities 51,668 52,928
220,867 223,080
LONG-TERM LIABILITIES
Long-term debt, net 1,245,785 1,270,663
Accumulated accrued interest, net of current portion 146,909 156,583
Long-term leaseback obligations, net 117,534 121,872
Other long-term liabilities 26,764 29,131
1,536,992 1,578,249
STOCKHOLDERS' EQUITY
Common stock 248 248
Additional paid-in capital 785,572 785,274
Accumulated other comprehensive loss (124,363) (116,934)
Retained earnings 242,191 213,102
903,648 881,690
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,661,507 $2,683,019
DANAOS CORPORATION
Condensed Consolidated Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
Three months
Three months
ended ended
March 31,
March 31,
--- ---
2020 2019
Operating Activities:
Net income $29,089 $33,443
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 24,581 23,766
Amortization of deferred drydocking & special survey costs, finance 6,502 7,317
cost, debt discount and other finance fees accrued
PIK interest 807 840
Payments for drydocking/special survey (4,850) (121)
Amortization of deferred realized losses on cash flow interest rate 903 893
swaps
Equity (income)/loss on investments (1,545) 84
Stock based compensation 298 830
Accounts receivable (776) 1,782
Other assets, current and non-current (1,889) (7,166)
Accounts payable and accrued liabilities 5,343 918
Other liabilities, current and long-term (3,036) (3,584)
Net Cash provided by Operating Activities 55,427 59,002
---
Investing Activities:
Vessel additions and advances (42,246) (1,667)
Investments (75)
Net Cash used in Investing Activities (42,321) (1,667)
---
Financing Activities:
Debt repayment (32,637) (29,714)
Payments of leaseback obligations (3,876)
Payments of accumulated accrued interest (8,329) (9,100)
Finance costs (10,415) (14,487)
Net Cash used in Financing Activities (55,257) (53,301)
---
Net Increase/(Decrease) in cash and cash equivalents (42,151) 4,034
Cash and cash equivalents, beginning of period 139,170 77,275
---
Cash and cash equivalents, end of period $97,019 $81,309
===
DANAOS CORPORATION
Reconciliation of Net Income to Adjusted EBITDA - Unaudited
(Expressed in thousands of United States dollars)
Three months
Three months
ended ended
March 31,
March 31,
--- ---
2020 2019
Net income $29,089 $33,443
Depreciation 24,581 23,766
Amortization of deferred drydocking & special survey costs 2,310 2,191
Amortization of deferred finance costs, debt discount and other 4,192 5,126
finance fees accrued
Amortization of deferred realized losses on interest rate swaps 903 893
Interest income (1,714) (1,596)
Interest expense 12,259 12,885
Stock based compensation 298 830
Adjusted EBITDA(1) $71,918 $77,538
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 and stock based compensation.
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 ended March 31, 2020
and 2019. 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.
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SOURCE Danaos Corporation
