Danaos Corporation Reports Third Quarter and Nine Months Results for the Period Ended September 30, 2020
Danaos Corporation (NYSE: DAC) reported strong financial results for Q3 and the first nine months of 2020. Adjusted net income rose by 24.8% to $47.3 million, or $1.91 per share, for the third quarter, and increased 11.2% to $123.1 million, or $4.97 per share, for nine months. Operating revenues reached $118.9 million in Q3, up 6.4%, and $341.9 million year-to-date, a 1.5% increase. Total contracted operating revenues stand at $1.1 billion with charter coverage of 87% for the next year. Share repurchase of 4.3 million shares at $31.1 million was also executed, enhancing shareholder value.
- Adjusted net income increased by 24.8% to $47.3 million for Q3.
- Operating revenues rose by 6.4% to $118.9 million in Q3.
- Total contracted operating revenues of $1.1 billion with 87% charter coverage for the next 12 months.
- Share repurchase of 4.3 million shares for $31.1 million enhances per share metrics.
- Adjusted earnings per share decreased to $1.91 from $2.46 year-over-year.
- Fleet utilization dropped to 95.8% for nine months compared to 98.8% for the same period last year.
- Total operating expenses increased by $9.8 million for the nine months.
ATHENS, Greece--(BUSINESS WIRE)--Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s largest independent owners of containerships, today reported unaudited results for the period ended September 30, 2020.
Highlights for the Third Quarter and Nine Months Ended September 30, 2020:
-
Adjusted net income1 of
$47.3 million , or$1.91 per share, for the three months ended September 30, 2020 compared to$37.9 million , or$2.46 per share, for the three months ended September 30, 2019, an increase of24.8% . Adjusted net income1 of$123.1 million , or$4.97 per share, for the nine months ended September 30, 2020 compared to$110.7 million , or$7.23 per share, for the nine months ended September 30, 2019, an increase of11.2% . -
Operating revenues of
$118.9 million for the three months ended September 30, 2020 compared to$111.8 million for the three months ended September 30, 2019, an increase of6.4% . Operating revenues of$341.9 million for the nine months ended September 30, 2020 compared to$337.0 million for the nine months ended September 30, 2019, an increase of1.5% . -
Adjusted EBITDA1 of
$83.3 million for the three months ended September 30, 2020 compared to$79.3 million for the three months ended September 30, 2019, an increase of5.0% . Adjusted EBITDA1 of$235.3 million for the nine months ended September 30, 2020 compared to$232.4 million for the nine months ended September 30, 2019, an increase of1.2% . -
Total contracted operating revenues were
$1.1 billion as of September 30, 2020, with charters extending through 2028 and remaining average contracted charter duration of 3.5 years, weighted by aggregate contracted charter hire. -
Charter coverage of
87% for the next 12 months based on current operating revenues and64% in terms of contracted operating days. -
On October 12, 2020, we announced the repurchase of 4,339,271 shares of our common stock for an aggregate purchase price of
$31.1 million in privately negotiated transactions, including 2,517,013 shares from the Royal Bank of Scotland and 1,822,258 shares from Sphinx Investment Corp. These transactions resulted in the Company's previously announced share repurchase program being terminated.
Three and Nine Months Ended September 30, 2020 Financial Summary - Unaudited (Expressed in thousands of United States dollars, except per share amounts) |
|||||||||||
|
Three months ended |
|
Three months ended |
|
Nine months ended |
|
Nine months ended |
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September 30, |
September 30, |
September 30, |
September 30, |
||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||
|
|
|
|
|
|
|
|||||
Operating revenues |
$ |
118,932 |
|
$ |
111,830 |
|
$ |
341,952 |
|
$ |
337,040 |
Net income |
$ |
42,786 |
|
$ |
33,855 |
|
$ |
110,371 |
|
$ |
97,436 |
Adjusted net income1 |
$ |
47,303 |
|
$ |
37,882 |
|
$ |
123,078 |
|
$ |
110,706 |
Earnings per share, diluted |
$ |
1.73 |
|
$ |
2.20 |
|
$ |
4.45 |
|
$ |
6.36 |
Adjusted earnings per share, diluted1 |
$ |
1.91 |
|
$ |
2.46 |
|
$ |
4.97 |
|
$ |
7.23 |
Diluted weighted average number of shares (in thousands) |
|
24,789 |
|
|
15,373 |
|
|
24,789 |
|
|
15,309 |
Adjusted EBITDA1 |
$ |
83,331 |
|
$ |
79,328 |
|
$ |
235,322 |
|
$ |
232,447 |
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:
"We are pleased to report improved performance in the Company’s profitability during this quarter. Container trade has staged a remarkable recovery since the end of May, when
Volumes have consistently improved, particularly in Transpacific eastbound, intra-Asia and North-South trade lanes, as volumes have recovered faster than expected. Notably, the increase in rates has been most pronounced in smaller vessel types. Danaos has the greatest amount of leverage to this segment of the market as our larger vessels are contracted on multi-year time charters. From that perspective, the short-term chartering market has been quite dynamic.
Although significant market uncertainty remains, particularly as many countries see increasing spread of COVID-19 cases, global GDP has rebounded swiftly, and IMF has recently revised its 2020 GDP estimates upwards. For 2021, the IMF forecasts global GDP growth of
We continue to execute our strategy and we are well insulated from near-term volatility due to our high charter coverage of
Consistent with our growth strategy we have agreed to purchase two 9,000 TEU vessels built in 2009 which are both contracted on two year charters with a major liner company. These vessels are expected to be delivered to us between December 2020 and January 2021 and will be funded with a combination of cash and new credit facilities. With these new deliveries our fleet will for the first time exceed the 400,000 TEU mark.
In the meantime, we are generating strong cash flows from our
In light of the continued uncertainty about the duration of the coronavirus pandemic and the ensuing economic recovery, we remain focused on maintaining a conservative financial profile and making thoughtful capital allocation decisions that align with our strategy and market expectations and deliver value to our shareholders."
Three months ended September 30, 2020 compared to the three months ended September 30, 2019
During the three months ended September 30, 2020, Danaos had an average of 58.0 containerships compared to 55.0 containerships during the three months ended September 30, 2019. Our fleet utilization was
Our adjusted net income amounted to
The increase of
On a non-adjusted basis, our net income amounted to
Operating Revenues
Operating revenues increased by
Operating revenues for the three months ended September 30, 2020 reflect:
-
a
$11.5 million increase in revenues in the three months ended September 30, 2020 compared to the three months ended September 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; -
a
$5.5 million increase in revenues in the three months ended September 30, 2020 compared to the three months ended September 30, 2019 due to the acquisition of new vessels; -
a
$5.6 million decrease in revenues in the three months ended September 30, 2020 compared to the three months ended September 30, 2019 due to lower non-cash revenue recognition in accordance with US GAAP; -
a
$5.1 million decrease in revenues in the three months ended September 30, 2020 compared to the three months ended September 30, 2019 as a result of lower re-chartering rates for certain of our vessels. This decrease is partially due to a$3.9 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 at the time these vessels were re-chartered; and -
a
$0.8 million increase in revenues due to higher fleet utilization of our vessels in the three months ended September 30, 2020 compared to the three months ended September 30, 2019.
Vessel Operating Expenses
Vessel operating expenses increased by
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased by
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by
General and Administrative Expenses
General and administrative expenses decreased by
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
Interest Expense and Interest Income
Interest expense decreased by
-
a
$6.8 million decrease in interest expense due to a decrease in debt service cost of approximately2.3% and a$84.6 million decrease in our average debt (including leaseback obligations), to$1,518.5 million in the three months ended September 30, 2020, compared to$1,603.1 million in the three months ended September 30, 2019; and -
a
$0.5 million increase in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2020, our outstanding bank debt, gross of deferred finance costs, was
Interest income increased to
Other finance costs, net
Other finance costs, net remained stable at
Equity income on investments
Equity income on investments increased by
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at
Other income, net
Other income, net was
Adjusted EBITDA
Adjusted EBITDA increased by
Nine months ended September 30, 2020 compared to the nine months ended September 30, 2019
During the nine months ended September 30, 2020, Danaos had an average of 56.9 containerships compared to 55.0 containerships during the nine months ended September 30, 2019. Our fleet utilization for the nine months ended September 30, 2020 was
Our adjusted net income amounted to
The increase of
On a non-adjusted basis, our net income amounted to
Operating Revenues
Operating revenues increased by
Operating revenues for the nine months ended September 30, 2020 reflect:
-
a
$26.2 million increase in revenues in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; -
a
$10.0 million increase in revenues in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 due to the acquisition of new vessels; -
a
$6.2 million decrease in revenues due to lower fleet utilization of our vessels in the nine months ended September 30, 2020 compared to the nine months ended September 30, 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
$9.3 million decrease in revenues in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 as a result of lower re-chartering rates for certain of our vessels. This decrease is due to a$12.5 million decrease in revenues due to the re-chartering of six vessels in our fleet that concluded long-term charters over the last twelve months and were re-deployed at the prevailing lower spot rates at the time these vessels were re-chartered, partially offset by a$3.2 million improvement from the re-chartering of other vessels in the fleet; and -
a
$15.8 million decrease in revenues in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 due to lower non-cash revenue recognition in accordance with US GAAP.
Vessel Operating Expenses
Vessel operating expenses increased by
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased by
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by
General and Administrative Expenses
General and administrative expenses decreased by
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
Interest Expense and Interest Income
Interest expense decreased by
-
a
$12.5 million decrease in interest expense due to a decrease in debt service cost by approximately1.3% and a$97.3 million decrease in our average debt (including leaseback obligations), to$1,532.5 million in the nine months ended September 30, 2020, compared to$1,629.8 million in the nine months ended September 30, 2019; and -
a
$0.5 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.
As of September 30, 2020, our outstanding bank debt, gross of deferred finance costs, was
Interest income increased by
Other finance costs, net
Other finance costs, net decreased by
Equity income on investments
Equity income on investments increased by
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at
Other income, net
Other income, net was
Adjusted EBITDA
Adjusted EBITDA increased by
Recent Developments
On October 12, 2020, we announced the repurchase of 4,339,271 shares of our common stock for an aggregate purchase price of
On October 16, 2020, we entered into agreements to acquire two 9,000 TEU container vessels built in 2009 for a gross aggregate purchase price of
Conference Call and Webcast
On Friday, November 6, 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 November 13, 2020 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 10149664# 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 63 containerships aggregating 385,769 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 60 unscheduled off-hire days in the three months ended September 30, 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 Quarter |
Second Quarter |
Third Quarter |
||||||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
Total |
||||||
Ownership Days |
|
5,073 |
|
|
5,193 |
|
|
|
5,336 |
|
|
15,602 |
|
||
Less Off-hire Days: |
|||||||||||||||
Scheduled Off-hire Days |
|
(336 |
) |
|
(60 |
) |
|
(10 |
) |
|
(406 |
) |
|||
Other Off-hire Days |
|
(104 |
) |
|
(92 |
) |
|
(60 |
) |
|
(256 |
) |
|||
Operating Days |
|
4,633 |
|
|
5,041 |
|
|
5,266 |
|
|
14,940 |
|
|||
Vessel Utilization |
|
91.3 |
% |
|
97.1 |
% |
|
98.7 |
% |
|
95.8 |
% |
|||
|
|||||||||||||||
Operating Revenues (in '000s of US Dollars) |
$ |
106,196 |
|
$ |
116,824 |
|
$ |
118,932 |
|
$ |
341,952 |
|
|||
Average Gross Daily Charter Rate |
$ |
22,922 |
|
$ |
23,175 |
|
|
$ |
22,585 |
|
$ |
22,888 |
|
||
Vessel Utilization (No. of Days) |
First Quarter |
Second Quarter |
Third Quarter |
||||||||||||
|
2019 |
|
|
2019 |
|
|
2019 |
|
Total |
||||||
Ownership Days |
|
4,950 |
|
|
5,005 |
|
|
|
5,060 |
|
|
15,015 |
|
||
Less Off-hire Days: |
|||||||||||||||
Scheduled Off-hire Days |
|
- |
|
|
(22 |
) |
|
(41 |
) |
|
(63 |
) |
|||
Other Off-hire Days |
|
(90 |
) |
|
(10 |
) |
|
(24 |
) |
|
(124 |
) |
|||
Operating Days |
|
4,860 |
|
|
4,973 |
|
|
4,995 |
|
|
14,828 |
|
|||
Vessel Utilization |
|
98.2 |
% |
|
99.4 |
% |
|
98.7 |
% |
|
98.8 |
% |
|||
|
|||||||||||||||
Operating Revenues (in '000s of US Dollars) |
$ |
112,891 |
|
$ |
112,319 |
|
$ |
111,830 |
|
$ |
337,040 |
|
|||
Average Gross Daily Charter Rate |
$ |
23,229 |
|
$ |
22,586 |
|
|
$ |
22,388 |
|
$ |
22,730 |
|
||
Fleet List
The following table describes in detail our fleet deployment profile as of November 5, 2020:
Vessel Name |
Vessel Size (TEU) |
|
Year Built |
|
Expiration of Charter(1) |
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 |
SM Charleston |
8,533 |
|
2005 |
|
December 2021 |
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 |
|
December 2020 |
Dimitra C |
6,402 |
|
2002 |
|
January 2023 |
YM Seattle |
4,253 |
|
2007 |
|
December 2020 |
YM Vancouver |
4,253 |
|
2007 |
|
November 2020 |
Derby D |
4,253 |
|
2004 |
|
November 2020 |
ANL Tongala |
4,253 |
|
2004 |
|
November 2020 |
Rio Grande (ex ZIM Rio Grande) |
4,253 |
|
2008 |
|
November 2020 |
ZIM Sao Paolo |
4,253 |
|
2008 |
|
December 2020 |
ZIM Kingston |
4,253 |
|
2008 |
|
February 2021 |
ZIM Monaco |
4,253 |
|
2009 |
|
February 2021 |
ZIM Dalian |
4,253 |
|
2009 |
|
February 2021 |
ZIM Luanda |
4,253 |
|
2009 |
|
May 2021 |
Dimitris C |
3,430 |
|
2001 |
|
December 2020 |
Express Black Sea |
3,400 |
|
2011 |
|
December 2020 |
Express Spain |
3,400 |
|
2011 |
|
November 2020 |
Express Argentina |
3,400 |
|
2010 |
|
November 2020 |
Express Brazil |
3,400 |
|
2010 |
|
September 2021 |
Express France |
3,400 |
|
2010 |
|
October 2021 |
Singapore |
3,314 |
|
2004 |
|
October 2021 |
Colombo |
3,314 |
|
2004 |
|
November 2020 |
Zebra (ex MSC Zebra) |
2,602 |
|
2001 |
|
November 2020 |
Amalia C |
2,452 |
|
1998 |
|
May 2021 |
Danae C |
2,524 |
|
2001 |
|
November 2020 |
Advance |
2,200 |
|
1997 |
|
November 2020 |
Future |
2,200 |
|
1997 |
|
November 2020 |
Sprinter |
2,200 |
|
1997 |
|
November 2020 |
Stride |
2,200 |
|
1997 |
|
November 2020 |
Progress C |
2,200 |
|
1998 |
|
November 2020 |
Bridge |
2,200 |
|
1998 |
|
February 2021 |
Highway |
2,200 |
|
1998 |
|
March 2021 |
Vladivostok |
2,200 |
|
1997 |
|
November 2020 |
|
|
|
|
|
|
Belita ľ2) |
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 |
|
December 2020 |
Genoaľ2) |
5,544 |
|
2002 |
|
September 2021 |
|
|
|
|
|
|
(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 |
DANAOS CORPORATION Condensed Consolidated Statements of Income - Unaudited (Expressed in thousands of United States dollars, except per share amounts) |
|||||||||||||||
|
Three months ended |
|
Three months ended |
|
Nine months ended |
|
Nine months ended |
||||||||
September 30, |
September 30, |
September 30, |
September 30, |
||||||||||||
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING REVENUES |
$ |
118,932 |
|
|
$ |
111,830 |
|
|
$ |
341,952 |
|
|
$ |
337,040 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
||||||||
Vessel operating expenses |
|
(27,662 |
) |
|
|
(24,858 |
) |
|
|
(82,232 |
) |
|
|
(78,035 |
) |
Depreciation & amortization |
|
(28,939 |
) |
|
|
(26,607 |
) |
|
|
(84,029 |
) |
|
|
(78,666 |
) |
General & administrative |
|
(6,048 |
) |
|
|
(6,422 |
) |
|
|
(17,901 |
) |
|
|
(19,783 |
) |
Other operating expenses |
|
(3,552 |
) |
|
|
(2,792 |
) |
|
|
(10,887 |
) |
|
|
(8,794 |
) |
Income From Operations |
|
52,731 |
|
|
|
51,151 |
|
|
|
146,903 |
|
|
|
151,762 |
|
|
|
|
|
|
|
|
|
||||||||
OTHER INCOME/(EXPENSES) |
|
|
|
|
|
|
|
||||||||
Interest income |
|
1,650 |
|
|
|
1,586 |
|
|
|
4,952 |
|
|
|
4,751 |
|
Interest expense |
|
(11,907 |
) |
|
(18,216 |
) |
|
(41,865 |
) |
|
(54,903 |
) |
|||
Other finance expenses |
|
(330 |
) |
|
(308 |
) |
|
(1,990 |
) |
|
(2,402 |
) |
|||
Equity income on investments |
|
1,464 |
|
|
|
560 |
|
|
|
4,729 |
|
|
|
508 |
|
Other income/(loss), net |
|
91 |
|
|
|
(5 |
) |
|
|
361 |
|
|
|
429 |
|
Realized loss on derivatives |
|
(913 |
) |
|
|
(913 |
) |
|
|
(2,719 |
) |
|
|
(2,709 |
) |
Total Other Expenses, net |
|
(9,945 |
) |
|
|
(17,296 |
) |
|
|
(36,532 |
) |
|
|
(54,326 |
) |
|
|
|
|
|
|
|
|
||||||||
Net Income |
$ |
42,786 |
|
|
$ |
33,855 |
|
|
$ |
110,371 |
|
|
$ |
97,436 |
|
|
|
|
|
|
|
|
|
||||||||
EARNINGS PER SHARE |
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
$ |
1.74 |
|
|
$ |
2.27 |
|
|
$ |
4.49 |
|
|
$ |
6.52 |
|
Diluted earnings per share |
$ |
1.73 |
|
|
$ |
2.20 |
|
|
$ |
4.45 |
|
|
$ |
6.36 |
|
Basic weighted average number of common shares (in thousands of shares) |
|
24,573 |
|
|
|
14,939 |
|
|
24,573 |
|
|
|
14,939 |
|
|
Diluted weighted average number of common shares (in thousands of shares) |
|
24,789 |
|
|
|
15,373 |
|
|
24,789 |
|
|
|
15,309 |
|
|
Non-GAAP Measures1 Reconciliation of Net Income to Adjusted Net Income – Unaudited |
|||||||||||
|
Three months ended |
|
Three months ended |
Nine months ended |
Nine months ended |
||||||
September 30, |
September 30, |
September 30, |
September 30, |
||||||||
|
2020 |
|
2019 |
2020 |
2019 |
||||||
Net income |
$ |
42,786 |
|
$ |
33,855 |
$ |
110,371 |
$ |
97,436 |
||
Amortization of financing fees, debt discount & finance fees accrued |
|
4,517 |
|
|
4,027 |
|
12,707 |
|
13,270 |
||
Adjusted Net Income |
$ |
47,303 |
|
$ |
37,882 |
$ |
123,078 |
$ |
110,706 |
||
Adjusted Earnings Per Share, diluted |
$ |
1.91 |
|
$ |
2.46 |
$ |
4.97 |
$ |
7.23 |
||
Diluted weighted average number of shares (in thousands) |
|
24,789 |
|
|
15,373 |
|
24,789 |
|
15,309 |
||
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 and nine months ended September 30, 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 |
||||
September 30, |
December 31, |
||||||||
|
|
|
|
2020 |
|
|
|
2019 |
|
ASSETS |
|
|
|
|
|||||
CURRENT ASSETS |
|
|
|
|
|||||
|
Cash and cash equivalents |
|
$ |
106,368 |
|
|
$ |
139,170 |
|
|
Accounts receivable, net |
|
|
10,846 |
|
|
|
7,145 |
|
|
Other current assets |
|
|
45,406 |
|
|
|
44,071 |
|
|
|
|
|
162,620 |
|
|
|
190,386 |
|
NON-CURRENT ASSETS |
|
|
|
|
|||||
|
Fixed assets, net |
|
|
2,441,815 |
|
|
|
2,389,874 |
|
|
Deferred charges, net |
|
|
16,427 |
|
|
|
11,455 |
|
|
Investments in affiliates |
|
|
13,694 |
|
|
|
8,965 |
|
|
Other non-current assets |
|
|
61,465 |
|
|
|
82,339 |
|
|
|
|
|
2,533,401 |
|
|
|
2,492,633 |
|
TOTAL ASSETS |
|
$ |
2,696,021 |
|
|
$ |
2,683,019 |
|
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|||||
CURRENT LIABILITIES |
|
|
|
|
|||||
|
Long-term debt, current portion |
|
$ |
126,326 |
|
|
$ |
119,673 |
|
|
Accumulated accrued interest, current portion |
|
|
29,679 |
|
|
|
34,137 |
|
|
Long-term leaseback obligations, current portion |
|
|
24,166 |
|
|
|
16,342 |
|
|
Accounts payable, accrued liabilities & other current liabilities |
|
|
37,302 |
|
|
|
52,928 |
|
|
|
|
|
217,473 |
|
|
|
223,080 |
|
LONG-TERM LIABILITIES |
|
|
|
|
|||||
|
Long-term debt, net |
|
|
1,222,971 |
|
|
|
1,270,663 |
|
|
Accumulated accrued interest, net of current portion |
|
|
132,319 |
|
|
|
156,583 |
|
|
Long-term leaseback obligations, net |
|
|
101,522 |
|
|
|
121,872 |
|
|
Other long-term liabilities |
|
|
22,024 |
|
|
|
29,131 |
|
|
|
|
|
1,478,836 |
|
|
|
1,578,249 |
|
|
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|||||
|
Common stock |
|
|
248 |
|
|
|
248 |
|
|
Additional paid-in capital |
|
|
786,171 |
|
|
|
785,274 |
|
|
Accumulated other comprehensive loss |
|
|
(110,180 |
) |
|
|
(116,934 |
) |
|
Retained earnings |
|
|
323,473 |
|
|
|
213,102 |
|
|
|
|
|
999,712 |
|
|
|
881,690 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
2,696,021 |
|
|
$ |
2,683,019 |
|
|
DANAOS CORPORATION Condensed Consolidated Statements of Cash Flows - Unaudited (Expressed in thousands of United States dollars) |
||||||||||||||||
|
|
Three months ended |
|
Three months ended |
|
Nine months ended |
|
Nine months ended |
||||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Operating Activities: |
|
|
|
|
|
|
|
|||||||||
|
Net income |
$ |
42,786 |
|
|
$ |
33,855 |
|
|
$ |
110,371 |
|
|
$ |
97,436 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
|
Depreciation |
|
25,765 |
|
|
|
24,336 |
|
|
|
75,604 |
|
|
|
72,141 |
|
|
Amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued |
|
7,691 |
|
|
|
6,298 |
|
|
|
21,662 |
|
|
|
19,795 |
|
|
PIK interest |
|
686 |
|
|
|
850 |
|
|
|
2,236 |
|
|
|
2,545 |
|
|
Payments for drydocking/special survey |
|
(17 |
) |
|
|
(3,524 |
) |
|
|
(13,397 |
) |
|
|
(5,214 |
) |
|
Amortization of deferred realized losses on cash flow interest rate swaps |
|
913 |
|
|
|
913 |
|
|
|
2,719 |
|
|
|
2,709 |
|
|
Equity income on investments |
|
(1,464 |
) |
|
|
(560 |
) |
|
|
(4,729 |
) |
|
|
(508 |
) |
|
Stock based compensation |
|
301 |
|
|
|
1,195 |
|
|
|
897 |
|
|
|
3,060 |
|
|
Accounts receivable |
|
1,706 |
|
|
|
(141 |
) |
|
|
(3,701 |
) |
|
|
1,588 |
|
|
Other assets, current and non-current |
|
3,031 |
|
|
|
(2,923 |
) |
|
|
2,342 |
|
|
|
(13,996 |
) |
|
Accounts payable and accrued liabilities |
|
(8,323 |
) |
|
|
(379 |
) |
|
|
614 |
|
|
|
(563 |
) |
|
Other liabilities, current and long-term |
|
(3,911 |
) |
|
|
(3,731 |
) |
|
|
(8,586 |
) |
|
|
(11,348 |
) |
Net Cash provided by Operating Activities |
|
69,164 |
|
|
|
56,189 |
|
|
|
186,032 |
|
|
|
167,645 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investing Activities: |
|
|
|
|
|
|
|
|||||||||
|
Vessel additions and advances |
|
(7,403 |
) |
|
|
(4,124 |
) |
|
|
(106,149 |
) |
|
|
(14,762 |
) |
|
Investments |
|
- |
|
|
|
- |
|
|
|
(75 |
) |
|
|
- |
|
Net Cash used in Investing Activities |
|
(7,403 |
) |
|
|
(4,124 |
) |
|
|
(106,224 |
) |
|
|
(14,762 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
Financing Activities: |
|
|
|
|
|
|
|
|||||||||
|
Proceeds from sale-leaseback of vessels |
|
- |
|
|
|
- |
|
|
|
139,080 |
|
|
|
146,523 |
|
|
Proceeds from long-term debt |
|
13,300 |
|
|
|
- |
|
|
|
36,700 |
|
|
|
- |
|
|
Payments of leaseback obligations |
|
(5,877 |
) |
|
|
(3,063 |
) |
|
|
(147,942 |
) |
|
|
(5,149 |
) |
|
Debt repayment |
|
(34,573 |
) |
|
|
(25,578 |
) |
|
|
(99,749 |
) |
|
|
(231,389 |
) |
|
Payments of accumulated accrued interest |
|
(5,284 |
) |
|
|
(8,979 |
) |
|
|
(20,786 |
) |
|
|
(26,846 |
) |
|
Finance costs |
|
(7,914 |
) |
|
|
(10,425 |
) |
|
|
(19,913 |
) |
|
|
(30,474 |
) |
Net Cash used in Financing Activities |
|
(40,348 |
) |
|
|
(48,045 |
) |
|
|
(112,610 |
) |
|
|
(147,335 |
) |
|
Net Increase/(Decrease) in cash and cash equivalents |
|
21,413 |
|
|
|
4,020 |
|
|
|
(32,802 |
) |
|
|
5,548 |
|
|
Cash and cash equivalents, beginning of period |
|
84,955 |
|
|
|
78,803 |
|
|
|
139,170 |
|
|
|
77,275 |
|
|
Cash and cash equivalents, end of period |
$ |
106,368 |
|
|
$ |
82,823 |
|
|
$ |
106,368 |
|
|
$ |
82,823 |
|
|
DANAOS CORPORATION Reconciliation of Net Income to Adjusted EBITDA - Unaudited (Expressed in thousands of United States dollars) |
|||||||||||||||
|
Three months ended |
|
Three months ended |
|
Nine months ended |
|
Nine months ended |
||||||||
September 30, |
September 30, |
September 30, |
September 30, |
||||||||||||
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net income |
$ |
42,786 |
|
|
$ |
33,855 |
|
|
$ |
110,371 |
|
|
$ |
97,436 |
|
Depreciation |
|
25,765 |
|
|
|
24,336 |
|
|
|
75,604 |
|
|
|
72,141 |
|
Amortization of deferred drydocking & special survey costs |
|
3,174 |
|
|
|
2,271 |
|
|
|
8,425 |
|
|
|
6,525 |
|
Amortization of deferred finance costs, debt discount and other finance fees accrued |
|
4,517 |
|
|
|
4,027 |
|
|
|
12,707 |
|
|
|
13,270 |
|
Amortization of deferred realized losses on interest rate swaps |
|
913 |
|
|
|
913 |
|
|
|
2,719 |
|
|
|
2,709 |
|
Interest income |
|
(1,650 |
) |
|
|
(1,586 |
) |
|
|
(4,952 |
) |
|
|
(4,751 |
) |
Interest expense |
|
7,525 |
|
|
|
14,317 |
|
|
|
29,551 |
|
|
|
42,057 |
|
Stock based compensation |
|
301 |
|
|
|
1,195 |
|
|
|
897 |
|
|
|
3,060 |
|
Adjusted EBITDA(1) |
$ |
83,331 |
|
|
$ |
79,328 |
|
|
$ |
235,322 |
|
|
$ |
232,447 |
|
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 and nine months ended September 30, 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. |
