Global Ship Lease Reports Results for the Fourth Quarter of 2020
Global Ship Lease (GSL) reported its Q4 and full-year 2020 results, showcasing operating revenue of $70.0 million for Q4 and $282.8 million for the year. Net income for Q4 was $10.8 million, with normalized net income at $11.3 million. GSL generated $38.8 million in adjusted EBITDA for the quarter and $161.7 million for the year. The company initiated a $0.12 quarterly dividend and raised significant funds through its ATM program. GSL successfully refinanced its 2022 Notes, enhancing its financial flexibility.
- Fourth quarter operating revenue increased to $70.0 million, a 3.6% rise year-over-year.
- Net income for Q4 reached $10.8 million, reflecting consistent profitability.
- Adjusted EBITDA rose to $38.8 million for Q4, bolstered by fleet expansion.
- Initiated a quarterly dividend of $0.12 per Class A common share.
- Successful refinancing of 2022 Notes, extending maturity to 2026 and reducing annual cash debt service by up to $15 million.
- Non-cash impairment charge of $8.5 million for the year, highlighting asset valuation concerns.
- Vessel operating expenses surged 13.1% to $27.7 million in Q4, indicating rising operational costs.
LONDON, March 04, 2021 (GLOBE NEWSWIRE) -- Global Ship Lease, Inc. (NYSE:GSL) (the “Company,” “Global Ship Lease” or “GSL”), a containership charter owner, announced today its unaudited results for the three months and year ended December 31, 2020.
Full Year 2020 and Year To Date 2021 Highlights
- Reported operating revenue of
- Reported net income available to common shareholders of
- Generated
- During the fourth quarter of 2020, raised a further
- During the fourth quarter of 2020, raised a further
- On January 7, 2021, entered into a new
- On January 12, 2021, announced that our Board of Directors approved the initiation of a quarterly cash dividend of
- On January 12, 2021, Moody’s upgraded our Corporate Family Rating and the issue rating of our 2022 Notes to B2 / Positive from B3 / Positive. On December 9, 2020, S&P upgraded the issue rating of our 2022 Notes to BB- from B+.
- On January 20, 2021, upon the redemption in full of our 2022 Notes, the 250,000 Series C Perpetual Convertible Preferred Shares held by KEP VI (Newco Marine) Ltd. and KIA VIII (Newco Marine) Ltd., both affiliates of Kelso & Company, a U.S. private equity firm, were converted into 12,955,188 of our Class A common shares.
- On January 26, 2021, closed our fully underwritten public offering of 5,400,000 Class A common shares, at a public offering price of
- On February 9, 2021, announced that we had agreed to purchase from and charter back to Maersk Line, seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of
- Since October 1, 2020, agreed twelve charter extensions and new charters for our existing fleet, adding approximately
George Youroukos, Executive Chairman of Global Ship Lease, stated, “Through the second half of 2020 and into early 2021, Global Ship Lease has taken decisive action in a uniquely strong market in ways that will benefit the Company for years to come. As our liner operator customers have increasingly found themselves short of containership capacity in the rapid rebound of demand, severe port congestion particularly on the US West Coast and in China, and the already tight vessel supply that preceded the onset of COVID-19, we have been able to secure and extend charters across our fleet of low slot cost, high reefer capacity, fuel efficient containerships at rates and durations well beyond what has been available in recent years.”
“On the back of these dramatic chartering successes, and supplemented by our deleveraging efforts, and game-changing capacity discipline by the liner companies, we were able to achieve the major goal of refinancing our 2022 Notes on dramatically improved terms. Eliminating the restrictive covenants that had previously limited our ability to pursue the full range of attractive market opportunities or to share the proceeds of those efforts with our shareholders, we moved quickly to initiate a sustainable quarterly dividend of
“As we now move through a period of the year that typically sees the most pronounced seasonal weakness in our industry, we continue to see a highly supportive environment. This is driven by both a sustained high level of containership demand and a restricted near term supply of ships, reinforced for the mid term by a negligible orderbook for mid-sized and smaller vessels, constrained in part by uncertainty over future fuel and propulsion technologies. These factors point to highly supportive supply side fundamentals through the medium term. With an improved financial foundation, a highly in-demand fleet, and substantial momentum in unlocking value for our shareholders, we believe that GSL is well placed to continue executing our accretive growth strategy and taking full opportunity of the attractive opportunities ahead of us.”
Ian Webber, Chief Executive Officer of Global Ship Lease, commented, “The successful refinancing of our 2022 Notes earlier in 2021 is yet another step to further strengthen our balance sheet and is also a highly significant unlocking event in and of itself. By extending maturity from 2022 to 2026, eliminating incurrence covenants, and reducing annual cash debt service by up to
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
Three | Three | |||
months ended | months ended | Year ended | Year ended | |
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |
Operating Revenue (1) | 69,970 | 67,554 | 282,813 | 261,102 |
Operating Income | 25,846 | 27,345 | 104,758 | 111,567 |
Net Income (2) | 10,752 | 7,961 | 37,568 | 36,757 |
Adjusted EBITDA (3) | 38,769 | 37,734 | 161,729 | 156,956 |
Normalized Net Income (3) | 11,312 | 8,307 | 49,140 | 37,103 |
(1) Operating Revenue is net of address commissions which represents a discount provided directly to a charterer based on a fixed percentage of the agreed upon charter rate. Brokerage commissions are included in “Time charter and voyage expenses”.
(2) Net Income available to common shareholders.
(3) Adjusted EBITDA and Normalized Net Income are non-U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) financial measures, as explained further in this press release, and are considered by Global Ship Lease to be a useful measure of its performance. For reconciliations of these non-U.S. GAAP financial measure to net income, the most directly comparable U.S. GAAP financial measure, please see “Reconciliation of Non-U.S. GAAP Financial Measures” below.
Revenue and Utilization
Revenue from fixed-rate, mainly long-term, time-charters was
For the year ended December 31, 2020, revenue was
The table below shows fleet utilization for the three months ended December 31, 2020 and 2019, and for the years ended December 31, 2020, 2019, 2018 and 2017.
Three months ended | Year ended | ||||||
December 31, | December 31, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | ||
Days | 2020 | 2019 | 2020 | 2019 | 2018 | 2017 | |
Ownership days | 3,956 | 3,804 | 16,044 | 14,326 | 7,675 | 6,570 | |
Planned offhire - dry-dockings | (128) | (195) | (687) | (537) | (34) | (62) | |
Unplanned offhire | (16) | (75) | (95) | (105) | (17) | (40) | |
Idle time | (26) | (114) | (338) | (164) | (47) | 0 | |
Operating days | 3,786 | 3,420 | 14,924 | 13,520 | 7,577 | 6,468 | |
Utilization |
As of December 31, 2020, one dry-docking for regulatory requirements was in progress. In 2021, we anticipate 10 further dry-dockings, for regulatory requirements.
Vessel Operating Expenses
Vessel operating expenses, which primarily include costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were up
For the year ended December 31, 2020, vessel operating expenses were
Time Charter and Voyage Expenses
Time charter and voyage expenses comprise mainly commission paid to ship brokers, the cost of bunker fuel for owner’s account when a ship is off-hire or idle and miscellaneous owner’s costs associated with a ship’s voyage. Time charter and voyage expenses were
For the year ended December 31, 2020, time charter and voyage expenses were
Depreciation and Amortization
Depreciation and amortization for the three-month period ended December 31, 2020 was
Depreciation for the year ended December 31, 2020 was
Loss on sale of vessels - vessel impairment losses
Two 1999-built, 2,200 TEU feeder ships, GSL Matisse and Utrillo, were sold in July 2020 resulting in a loss of
General and Administrative Expenses
General and administrative expenses were
For the year ended December 31, 2020, general and administrative expenses were
Adjusted EBITDA
Adjusted EBITDA was
Adjusted EBITDA for the year ended December 31, 2020 was
Interest Expense and Interest Income
Debt as at December 31, 2020 totaled
Debt as at December 31, 2019 totaled
Interest and other finance expenses for the three months ended December 31, 2020 were
For the year ended December 31, 2020, interest expense was
Interest income for the three months ended December 31, 2020 was
Interest income for the year ended December 31, 2020 was
Other Income/(Expenses), Net
Other income, net was
Other income, net was
Taxation
Taxation for the three months ended December 31, 2020 was a credit of
Taxation for the year ended December 31, 2020 was a charge of
Earnings Allocated to Preferred Shares
Our Series B Preferred Shares carry a coupon of
Net Income Available to Common Shareholders
Net income available to common shareholders for the three months ended December 31, 2020 was
Net income available to common shareholders was
Normalized net income for the three months ended December 31, 2020, was
Fleet
The following table provides information about our on-the-water fleet of 43 ships. The table includes charters agreed up to March 3, 2021.
Capacity in TEUs | Lightweight (tons) | Year Built | Charterer | Earliest Charter Expiry Date | Latest Charter Expiry Date | Daily Charter Rate $ | |
Vessel Name | |||||||
CMA CGM Thalassa | 11,040 | 38,577 | 2008 | CMA CGM | 4Q25 | 1Q26 | 47,200 |
UASC Al Khor(1) | 9,115 | 31,764 | 2015 | Hapag-Lloyd | 1Q22 | 2Q22 | 34,000 |
Anthea Y(1) | 9,115 | 31,890 | 2015 | COSCO | 3Q23 (2) | 4Q23 (2) | Note (2) |
Maira XL(1) | 9,115 | 31,820 | 2015 | ONE (3) | 2Q22 | 3Q22 | Note (3) |
MSC Tianjin | 8,603 | 34,325 | 2005 | MSC | 2Q24 | 3Q24 | Note (4) |
MSC Qingdao | 8,603 | 34,609 | 2004 | MSC | 2Q24 | 3Q24 | 23,000 (4) |
GSL Ningbo | 8,603 | 34,340 | 2004 | MSC (5) | 1Q23 (5) | 3Q23 (5) | Note (5) |
GSL Eleni | 7,847 | 29,261 | 2004 | Maersk | 3Q24 | 4Q24 (6) | 16,500 (6) |
GSL Kalliopi | 7,847 | 29,190 | 2004 | Maersk | 4Q22 | 4Q24 (6) | 14,500 (6) |
GSL Grania | 7,847 | 29,105 | 2004 | Maersk | 4Q22 | 4Q24 (6) | 14,500 (6) |
Mary(1) | 6,927 | 23,424 | 2013 | CMA CGM | 3Q23 | 4Q23 | 25,910 |
Kristina(1) | 6,927 | 23,421 | 2013 | CMA CGM | 2Q24 | 3Q24 | 25,910 |
Katherine (1) | 6,927 | 23,403 | 2013 | CMA CGM | 1Q24 | 2Q24 | 25,910 |
Alexandra (1) | 6,927 | 23,348 | 2013 | CMA CGM | 1Q24 | 2Q24 | 25,910 |
Alexis (1) | 6,882 | 23,919 | 2015 | CMA CGM | 1Q24 | 2Q24 | 25,910 |
Olivia I (1) | 6,882 | 23,864 | 2015 | CMA CGM | 1Q24 | 2Q24 | 25,910 |
GSL Christen | 6,840 | 27,954 | 2002 | Maersk (7) | 3Q23(7) | 4Q23(7) | Note (7) |
GSL Nicoletta | 6,840 | 28,070 | 2002 | MSC | 2Q21 | 3Q21 | 13,500 |
CMA CGM Berlioz | 6,621 | 26,776 | 2001 | CMA CGM | 2Q21 | 4Q21 | 34,000 |
Agios Dimitrios | 6,572 | 24,931 | 2011 | MSC | 4Q23 | 1Q24 | 20,000 |
GSL Vinia | 6,080 | 23,737 | 2004 | Maersk (8) | 3Q24 | 1Q25 | 13,250 (8) |
GSL Christel Elisabeth | 6,080 | 23,745 | 2004 | Maersk (8) | 2Q24 | 1Q25 | 13,250 (8) |
Tasman | 5,936 | 25,010 | 2000 | Maersk | 1Q22 | 3Q23 (9) | 12,500 (9) |
Dimitris Y | 5,936 | 25,010 | 2000 | ZIM | 1Q24(10) | 2Q24(10) | Note(10) |
Ian H | 5,936 | 25,128 | 2000 | ZIM | 2Q24(10) | 3Q24(10) | Note(10) |
Dolphin II | 5,095 | 20,596 | 2007 | Sea-Lead(11) | 1Q22(11) | 2Q22 (11) | 7,000 (11) |
Orca I | 5,095 | 20,633 | 2006 | Maersk(12) | 2Q24 (12) | 3Q25 (12) | Note (12) |
CMA CGM Alcazar | 5,089 | 20,087 | 2007 | CMA CGM | 3Q21 (13) | 4Q21 (13) | 16,000 (13) |
GSL Château d’If | 5,089 | 19,994 | 2007 | Hapag-Lloyd (13) | 4Q21 (13) | 4Q21 (13) | 14,500 (13) |
CMA CGM Jamaica | 4,298 | 17,272 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 |
CMA CGM Sambhar | 4,045 | 17,429 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 |
CMA CGM America | 4,045 | 17,428 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 |
GSL Valerie | 2,824 | 11,971 | 2005 | ZIM | 3Q21 | 1Q22 | 12,825 (14) |
Athena | 2,762 | 13,538 | 2003 | MSC | 1Q21 | 2Q21 | 9,000 |
Maira | 2,506 | 11,453 | 2000 | Hapag-Lloyd (15) | 1Q23 | 2Q23 (15) | 14,260 (15) |
Nikolas | 2,506 | 11,370 | 2000 | CMA CGM (16) | 1Q23 | 2Q23 | 16,000 (16) |
Newyorker | 2,506 | 11,463 | 2001 | MSC | 1Q21 | 1Q21 | 8,000 |
La Tour | 2,272 | 11,742 | 2001 | MSC | 2Q21 | 2Q21 | 7,250 |
Manet | 2,272 | 11,727 | 2001 | Sea-Lead | 4Q21 (17) | 4Q21 (17) | 7,750 (17) |
Keta | 2,207 | 11,731 | 2003 | OOCL | 3Q21 (18) | 3Q21 (18) | 9,400 (18) |
Julie | 2,207 | 11,731 | 2002 | Sea Consortium | 2Q21 | 2Q21 | 9,250 |
Kumasi | 2,207 | 11,791 | 2002 | CMA CGM | 3Q21 (19) | 4Q21 (19) | 9,300 (19) |
Marie Delmas | 2,207 | 11,731 | 2002 | CMA CGM | 3Q21 (19) | 4Q21 (19) | 9,300 (19) |
(1) Modern design, high reefer capacity, fuel-efficient vessel.
(2) Charter at
(3) Charter to 1Q21 at
(4) Charter to MSC Tianjin at
(5) Charter with Maersk at a rate of
(6) GSL Eleni delivered 2Q2019 and is chartered for five years; GSL Kalliopi (delivered 4Q19) and GSL Grania (delivered 3Q19) are chartered for three years plus two successive periods of one year at the option of the charterer. During the option periods the charter rates for GSL Kalliopi and GSL Grania are
(7) GSL Christen commenced a new charter with Maersk in 3Q20, with escalating charter rates: the rate for the first four months is
(8) GSL Vinia and GSL Christel Elisabeth delivered in 4Q19, and are contracted on 52 – 60 months charters.
(9) 12-month extension at charterer’s option callable in 2Q22, at an increased rate of
(10) A package agreement with ZIM, for direct charter extensions on two 5,900 TEU ships: Ian H, at a rate of
(11) Charter with Sea-Lead at a rate of
(12) Charter with Maersk at a rate of
(13) CMA CGM Alcazar chartered to CMA CGM at
(14) New charter agreed with ZIM, on scheduled completion of GSL Valerie's drydocking at end-October 2020, at an average rate of
(15) Charter with MSC to November 2020, at which time the vessel was dry-docked. Thereafter, in January 2021, Maira was chartered to Hapag-Lloyd at an average rate of
(16) Charter with MSC to December 2020, at which time the vessel was dry-docked. Thereafter, in January 2021, Nikolas was chartered to CMA CGM at a rate of
(17) Charter with Sea-Lead at a rate of
(18) Charter to October 2020 at a rate of
(19) Charter to October 2020 at a rate of
The following table provides information about the seven ships that we have contracted to purchase as announced on February 9, 2021 and which are scheduled to deliver during the second and third quarters of 2021. Contract cover for each vessel is for a firm period of at least three years from the date each vessel is delivered, with charterers holding two one year extension options thereafter. During the firm periods of cover the charters are expected to generate aggregate annualized Adjusted EBITDA of approximately
Vessel Name | Capacity in TEUs | Lightweight (tons) | Year Built | ||
GSL Arcadia | 6,008 | 24,858 | 2000 | ||
GSL MYNY | 6,008 | 24,873 | 2000 | ||
GSL Melita | 6,008 | 24,848 | 2001 | ||
GSL Maria | 6,008 | 24,414 | 2001 | ||
GSL Violetta | 6,008 | 24,873 | 2000 | ||
GSL Tegea | 6,008 | 24,308 | 2001 | ||
GSL Dorothea | 6,008 | 24,243 | 2001 | ||
Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the Company's results for the three months ended December 31, 2021 today, Thursday March 4, 2021 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 4539656
Please dial in at least 10 minutes prior to 10:30 a.m. Eastern Time to ensure a prompt start to the call.
(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the call will be available through Saturday, March 20, 2021 at (855) 859-2056 or (404) 537-3406. Enter the code 4539656 to access the audio replay. The webcast will also be archived on the Company’s website: http://www.globalshiplease.com.
Annual Report on Form 20-F
The Company’s Annual Report for 2019 was filed with the Securities and Exchange Commission (the “Commission”) on April 2, 2020. A copy of the report can be found under the Investor Relations section (Annual Reports) of the Company’s website at http://www.globalshiplease.com or on the Commission’s website at www.sec.gov. Shareholders may request a hard copy of the audited financial statements free of charge by contacting the Company at info@globalshiplease.com or by writing to Global Ship Lease, Inc, care of Global Ship Lease Services Limited, 25 Wilton Road, London SW1V ILW.
About Global Ship Lease
Global Ship Lease is a leading independent owner of containerships with a diversified fleet of mid-sized and smaller containerships. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under fixed-rate charters to top tier container liner companies. On November 15, 2018, it completed a strategic combination with Poseidon Containers.
Global Ship Lease owns 43 containerships, and has contracted to purchase a further seven ships, ranging from 2,207 to 11,040 TEU, with a total capacity (when fully delivered) of 287,336 TEU. 32 ships are Post-Panamax, of which nine are fuel-efficient new-design wide-beam.
Adjusted to include all charters agreed, and ships acquired or divested, up to March 3, 2021, the average remaining term of the Company’s charters at December 31, 2020, to the mid-point of redelivery, including options under the Company’s control, was 2.5 years on a TEU-weighted basis. Contracted revenue on the same basis was
Reconciliation of Non-U.S. GAAP Financial Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking costs, gains or losses on the sale of vessels and impairment losses. Adjusted EBITDA is a non-U.S. GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations. 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. Adjusted EBITDA is not defined in U.S. GAAP and should not be considered to be an alternative to net income or any other financial metric required by such accounting principles. Our use of Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars) | ||||||
Three | Three | |||||
months | months | Year | Year | |||
ended | ended | ended | ended | |||
December 31, | December 31, | December 31, | December 31, | |||
2020 | 2019 | 2020 | 2019 | |||
Net income available to Common Shareholders | 10,752 | 7,961 | 37,568 | 36,757 | ||
Adjust: | Depreciation and amortization | 12,008 | 11,028 | 46,978 | 43,912 | |
Impairment charges | - | - | 8,497 | - | ||
Loss on sale of vessels | - | - | 244 | - | ||
Interest income | (59) | (593) | (956) | (1,791) | ||
Interest expense | 14,821 | 18,510 | 65,354 | 74,994 | ||
Income tax | (1) | 43 | 49 | 3 | ||
Earnings allocated to preferred shares | 1,248 | 785 | 3,995 | 3,081 | ||
Adjusted EBITDA | 38,769 | 37,734 | 161,729 | 156,956 |
B. Normalized net income
Normalized net income represents net income available to common shareholders adjusted for impairment charges, the premium paid on redemption of our 2022 Notes and gains/losses on sale of vessels. Normalized net income is a non-U.S. GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net loss for items that do not affect operating performance or operating cash generated. Normalized net income is not defined in U.S. GAAP and should not be considered to be an alternate to net income or any other financial metric required by such accounting principles. Our use of Normalized net income may vary from the use of similarly titled measures by others in our industry.
NORMALIZED NET INCOME
(thousands of U.S. dollars) | ||||||
Three | Three | |||||
months | months | Year | Year | |||
ended | ended | ended | ended | |||
December 31, | December 31, | December 31, | December 31, | |||
2020 | 2019 | 2020 | 2019 | |||
Net income available to Common Shareholders | 10,752 | 7,961 | 37,568 | 36,757 | ||
Adjust: | Impairment charges | - | - | 8,497 | - | |
Loss on sale of vessels | - | - | 244 | - | ||
Premium paid on redemption of 2022 Notes | 560 | 346 | 2,831 | 346 | ||
Normalized net income | 11,312 | 8,307 | 49,140 | 37,103 |
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide Global Ship Lease's current expectations or forecasts of future events. Forward-looking statements include statements about Global Ship Lease's expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," “should,” "project," "will" or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements are based on assumptions that may be incorrect, and Global Ship Lease cannot assure you that these projections included in these forward-looking statements will come to pass. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.
The risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
- the length and severity of the ongoing outbreak of the novel coronavirus (COVID-19) around the world and governmental responses thereto;
- the financial condition of our charterers, particularly CMA CGM, our principal charterer and main source of operating revenue, and their ability to pay charterhire in accordance with the charters;
- Global Ship Lease’s financial condition and liquidity, including its level of indebtedness or ability to obtain additional financing to fund capital expenditures, ship acquisitions and other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its credit facility;
- risks relating to the acquisition of Poseidon Containers and Global Ship Lease’s ability to realize the anticipated benefits of the acquisition;
- future acquisitions, business strategy and expected capital spending;
- operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional economies;
- risks incidental to ship operation, including piracy, discharge of pollutants and ship accidents and damage including total or constructive total loss;
- estimated future capital expenditures needed to preserve its capital base;
- Global Ship Lease’s expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew long-term, fixed-rate charters or other ship employment arrangements;
- the continued performance of existing long-term, fixed-rate time charters;
- Global Ship Lease’s ability to capitalize on its management’s and board of directors’ relationships and reputations in the containership industry to its advantage;
- changes in governmental and classification societies’ rules and regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on commercially reasonable terms;
- unanticipated changes in laws and regulations including taxation;
- potential liability from future litigation.
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Global Ship Lease's actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in Global Ship Lease's filings with the U.S Securities and Exchange Commission (the “SEC”). Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Global Ship Lease undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Global Ship Lease describes in the reports it will file from time to time with the SEC after the date of this communication.
Global Ship Lease, Inc.
Interim Unaudited Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
December 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 80,757 | $ | 138,024 | |||
Restricted cash | 825 | 3,909 | |||||
Accounts receivable, net | 2,532 | 2,350 | |||||
Inventories | 6,316 | 5,595 | |||||
Prepaid expenses and other current assets | 6,711 | 8,132 | |||||
Due from related parties | 1,472 | 3,860 | |||||
Total current assets | $ | 98,613 | $ | 161,870 | |||
NON - CURRENT ASSETS | |||||||
Vessels in operation | $ | 1,140,583 | $ | 1,155,586 | |||
Advances for vessels acquisitions and other additions | 1,364 | 10,791 | |||||
Intangible assets - charter agreements | - | 1,467 | |||||
Deferred charges, net | 22,951 | 16,408 | |||||
Restricted cash, net of current portion | 10,680 | 5,703 | |||||
Total non - current assets | 1,175,578 | 1,189,955 | |||||
TOTAL ASSETS | $ | 1,274,191 | $ | 1,351,825 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 10,557 | $ | 9,052 | |||
Accrued liabilities | 19,127 | 22,916 | |||||
Current portion of long-term debt and deferred financing costs | 76,681 | 87,532 | |||||
Deferred revenue | 5,623 | 9,987 | |||||
Due to related parties | 225 | 109 | |||||
Total current liabilities | $ | 112,213 | $ | 129,596 | |||
LONG-TERM LIABILITIES | |||||||
Long - term debt, net of current portion and deferred financing costs | $ | 692,775 | $ | 809,357 | |||
Intangible liability-charter agreements | 4,462 | 6,470 | |||||
Total non - current liabilities | 697,237 | 815,827 | |||||
Total liabilities | $ | 809,450 | $ | 945,423 | |||
Commitments and Contingencies | |||||||
SHAREHOLDERS' EQUITY | |||||||
Class A common shares - authorized 214,000,000 shares with a 17,741,008 shares issued and outstanding (2019 – 17,556,738 shares) | 177 | 175 | |||||
Series B Preferred Shares - authorized 44,000 shares with a 22,822 shares issued and outstanding (2019 – 14,428 shares) | - | - | |||||
Series C Preferred Shares - authorized 250,000 shares with a 250,000 shares issued and outstanding (2019 - 250,000 shares) | 3 | 3 | |||||
Additional paid in capital | 586,355 | 565,586 | |||||
Accumulated deficit | (121,794) | (159,362) | |||||
Total shareholders' equity | 464,741 | 406,402 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,274,191 | $ | 1,351,825 |
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements of Operations
(Expressed in thousands of U.S. dollars except share data)
Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
OPERATING REVENUES | |||||||||||||||
Time charter revenue (includes related party revenues of | $ | 69,970 | $ | 67,554 | $ | 282,813 | $ | 261,102 | |||||||
OPERATING EXPENSES: | |||||||||||||||
Vessel operating expenses (includes related party vessel operating expenses of | 27,713 | 24,483 | 102,837 | 87,786 | |||||||||||
Time charter and voyage expenses (includes related party brokerage commissions of | 2,431 | 2,966 | 11,149 | 9,022 | |||||||||||
Depreciation and amortization | 12,008 | 11,028 | 46,978 | 43,912 | |||||||||||
Impairment of vessels | - | - | 8,497 | - | |||||||||||
General and administrative expenses | 1,972 | 1,732 | 8,350 | 8,815 | |||||||||||
Loss on sale of vessels | - | - | 244 | - | |||||||||||
Operating Income | 25,846 | 27,345 | 104,758 | 111,567 | |||||||||||
NON-OPERATING INCOME/(EXPENSES) | |||||||||||||||
Interest income | 59 | 593 | 956 | 1,791 | |||||||||||
Interest and other finance expenses | (14,821) | (18,510) | (65,354) | (74,994) | |||||||||||
Other income (expense), net | 915 | (639) | 1,252 | 1,477 | |||||||||||
Total non-operating expenses | (13,847) | (18,556) | (63,146) | (71,726) | |||||||||||
Income before income taxes | 11,999 | 8,789 | 41,612 | 39,841 | |||||||||||
Income taxes | 1 | (43) | (49) | (3) | |||||||||||
Net Income | 12,000 | 8,746 | 41,563 | 39,838 | |||||||||||
Earnings allocated to Series B Preferred Shares | (1,248) | (785) | (3,995) | (3,081) | |||||||||||
Net Income available to Common Shareholders | $ | 10,752 | $ | 7,961 | $ | 37,568 | $ | 36,757 | |||||||
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 12,000 | $ | 8,746 | $ | 41,563 | $ | 39,838 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | $ | 12,008 | $ | 11,028 | $ | 46,978 | $ | 43,912 | |||||||
Impairment of vessels | - | - | 8,497 | - | |||||||||||
Loss from vessel sale | - | - | 244 | - | |||||||||||
Amortization of deferred financing costs | 1,055 | 864 | 4,085 | 3,108 | |||||||||||
Amortization of original issue discount/premium on repurchase of notes | 814 | 533 | 3,269 | 1,140 | |||||||||||
Amortization of intangible liability/asset-charter agreements | (453) | 497 | (541) | 1,933 | |||||||||||
Share based compensation | 358 | 429 | 1,998 | 1,717 | |||||||||||
Changes in operating assets and liabilities: | - | ||||||||||||||
Decrease/(increase) in accounts receivable and other assets | $ | 1,062 | $ | (1,151) | $ | 3,132 | $ | (1,393) | |||||||
(Increase)/decrease in inventories | (901) | (282) | (721) | 174 | |||||||||||
(Decrease)/increase in accounts payable and other liabilities | (4,155) | (4,528) | (2,215) | 2,284 | |||||||||||
Increase/(decrease) in related parties' balances, net | 971 | 626 | 2,504 | (6,251) | |||||||||||
(Decrease)/increase in deferred revenue | (492) | 3,152 | (4,364) | 6,869 | |||||||||||
Unrealized foreign exchange gain | - | 61 | 2 | 50 | |||||||||||
Net cash provided by operating activities | $ | 22,267 | $ | 19,975 | $ | 104,431 | $ | 93,381 | |||||||
Cash flows from investing activities: | |||||||||||||||
Acquisition of vessels | $ | - | $ | (39,500) | $ | (23,060) | $ | (72,997) | |||||||
Cash paid for vessel expenditure | (520) | (24) | (4,089) | (9,528) | |||||||||||
Advances for vessel acquisitions and other additions | (64) | (3,281) | (4,541) | (9,184) | |||||||||||
Cash paid for drydockings | (4,657) | (4,208) | (14,756) | (7,390) | |||||||||||
Proceeds from sale of vessels | - | - | 6,852 | - | |||||||||||
Cash acquired in Poseidon Transaction, net of capitalized expenses | - | (826) | - | (826) | |||||||||||
Net cash used in investing activities | $ | (5,241) | $ | (47,839) | $ | (39,594) | $ | (99,925) | |||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of 2024 Notes | $ | 861 | $ | 39,765 | $ | 20,054 | $ | 39,765 | |||||||
Repurchase of 2022 Notes, including premium | (32,356) | (17,623) | (91,971) | (17,623) | |||||||||||
Proceeds from drawdown of credit facilities | - | 34,000 | 47,000 | 327,500 | |||||||||||
Repayment of credit facilities | (17,509) | (25,686) | (64,311) | (63,505) | |||||||||||
Repayment of refinanced debt | - | (44,366) | (262,810) | ||||||||||||
Deferred financing costs paid | (231) | (3,692) | (1,193) | (7,904) | |||||||||||
Proceeds from offering of Class A common shares, net of offering costs | - | 50,710 | (76) | 50,710 | |||||||||||
Proceeds from offering of Series B preferred shares, net of offering costs | 11,811 | 1,056 | 18,647 | 1,056 | |||||||||||
Series B Preferred Shares-dividends paid | (1,248) | (784) | (3,995) | (3,081) | |||||||||||
Net cash (used in)/provided by financing activities | $ | (38,672) | $ | 77,746 | $ | (120,211) | $ | 64,108 | |||||||
(Decrease)/increase in cash and cash equivalents and restricted cash | (21,646) | 49,882 | (55,374) | 57,564 | |||||||||||
Cash and cash equivalents and restricted cash at beginning of the period | 113,908 | 97,754 | 147,636 | 90,072 | |||||||||||
Cash and cash equivalents and restricted cash at end of the period | $ | 92,262 | $ | 147,636 | $ | 92,262 | $ | 147,636 | |||||||
Supplementary Cash Flow Information: | |||||||||||||||
Cash paid for interest | 19,655 | 25,536 | 60,026 | 70,630 | |||||||||||
Non-cash Investing activities: | |||||||||||||||
Unpaid drydocking expenses | 1,061 | 1,217 | 1,321 | 3,676 | |||||||||||
Unpaid vessel additions | 1,459 | 3,567 | 4,127 | 1,641 | |||||||||||
Non-cash financing activities: | |||||||||||||||
Unpaid offering costs | - | 200 | - | 200 |
Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438
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