Navios Maritime Partners L.P. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2020
Navios Maritime Partners (NMM) reported Q3 2020 revenue of $64.5 million, a slight increase from $63.5 million in Q3 2019, with adjusted EBITDA of $30.9 million.
Net income for the quarter was $6.99 million, impacted by a $1.8 million impairment loss. The company declared a cash distribution of $0.05 per unit. Acquisitions included two vessels for $51 million, while two older vessels were sold for $12.7 million. Looking ahead, the economic outlook for 2021 appears favorable with expected GDP growth of 5.2%.
- Revenue increased to $64.5 million for Q3 2020.
- Adjusted EBITDA was $30.9 million, though down from $41.3 million in Q3 2019.
- Cash distribution of $0.05 per unit declared.
- Acquisition of two younger vessels with an average age of 6 years.
- Net income decreased to $6.99 million, significantly lower than $16.86 million in Q3 2019.
- Impairment loss of $1.8 million negatively affected adjusted net income.
- Adjusted net income for nine months showed a loss of $2.9 million, compared to a profit of $14.7 million in 2019.
- Revenue:
° $64.5 million for Q3 2020
° $157.5 million for the nine months 2020 - Net cash from operating activities:
° $21.0 million for Q3 2020
° $68.7 million for the nine months 2020 - Adjusted EBITDA:
° $30.9 million for Q3 2020
° $64.3 million for the nine months 2020 - Fleet Renewal:
° Acquisition of two vessels with average age of 6 years
° Sale of two vessels with average age of 12 years $0.05 per unit cash distribution for Q3 2020
MONACO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Navios Maritime Partners L.P. (“Navios Partners”) (NYSE: NMM), an international owner and operator of dry cargo vessels, today reported its financial results for the third quarter and nine month period ended September 30, 2020.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with our results for the third quarter of 2020. During the third quarter, Navios Partners reported adjusted EBITDA of
Angeliki Frangou continued, “Drybulk demand in the first half of 2020 suffered from the global shutdown. However, fiscal stimulus and other policy measures helped economies heal in the third quarter. We believe that this healing process continues as we learn to live within the constraints of the pandemic and as new purchasing patterns emerge. Looking forward, the economic outlook for 2021 is favorable as the IMF expects global GDP to grow by
Fleet Developments
$51.0 million acquisition of vessels
In September 2020, Navios Partners acquired the Navios Gem, a 2014-Japanese built Capesize vessel of 181,336 dwt, and the Navios Victory, a 2014-Japanese built Panamax vessel of 77,095 dwt, from Navios Maritime Holdings Inc. (“Navios Holdings”) (NYSE:NM). The vessels were acquired for a purchase price of
$12. 7 million sale of two vessels
In October 2020, Navios Partners agreed to sell the Esperanza N, a 2008-built Containership of 2,007 TEU and the Navios Soleil, a 2009-built Ultra–Handymax vessel of 57,337 dwt for net sale prices of
Financing Arrangements
In September 2020, Navios Partners entered into a new credit facility with a commercial bank for a total amount of
Cash Distribution
The Board of Directors of Navios Partners declared a cash distribution for the third quarter of 2020 of
Long-Term Cash Flow
Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of approximately 1.5 years. Navios Partners has currently contracted out
EARNINGS HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Partners has compiled condensed consolidated statements of operations for the three and nine month periods ended September 30, 2020 and 2019. The quarterly information was derived from the unaudited condensed consolidated financial statements for the respective periods. Adjusted EBITDA, Adjusted Earnings/ (Loss) per Common Unit, Adjusted Net Income/ (Loss) and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners’ results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
| Three Month | Three Month | Nine Month | Nine Month | ||||||||||
| Period Ended | Period Ended | Period Ended | Period Ended | ||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||
| (in $‘000 except per unit data) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Revenue | $ | 64,499 | $ | 63,548 | $ | 157,538 | $ | 158,111 | |||||
| Net Income/ (Loss) | $ | 6,991 | $ | 16,859 | $ | (18,374 | ) | $ | 813 | ||||
| Adjusted Net Income/ (Loss) | $ | 8,771 | (1) | $ | 18,273 | (2) | $ | (2,894 | ) | (3) | $ | 14,694 | (4) |
| Net cash provided by operating activities | $ | 21,025 | $ | 32,669 | $ | 68,700 | $ | 47,095 | |||||
| EBITDA | $ | 29,143 | $ | 41,309 | $ | 48,814 | $ | 75,321 | |||||
| Adjusted EBITDA | $ | 30,923 | (1) | $ | 41,309 | $ | 64,294 | (3) | $ | 86,304 | (5) | ||
| Earnings/ (Loss) per Common Unit (basic and diluted) | $ | 0.63 | $ | 1.54 | $ | (1.65 | ) | $ | 0.07 | ||||
| Adjusted Earnings/ (Loss) per Common Unit (basic and diluted) | $ | 0.78 | (1) | $ | 1.67 | (2) | $ | (0.26 | ) | (3) | $ | 1.33 | (4) |
| Operating Surplus | $ | 16,011 | $ | 25,726 | $ | 19,314 | $ | 37,635 | |||||
| Maintenance and Replacement Capital Expenditure Reserve | $ | 9,491 | $ | 7,153 | $ | 26,670 | $ | 21,887 | |||||
(1) Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Common Unit for the three month period ended September 30, 2020 have been adjusted to exclude a
(2) Adjusted Net Income and Adjusted Earnings per Common Unit for the three month period ended September 30, 2019 have been adjusted to exclude a
(3) Adjusted EBITDA, Adjusted Net Loss and Adjusted Loss per Common Unit for the nine month period ended September 30, 2020 have been adjusted to exclude a
(4) Adjusted Net Income and Adjusted Earnings per Common Unit for the nine month period ended September 30, 2019 have been adjusted to exclude a
(5) Adjusted EBITDA for the nine month period ended September 30, 2019 has been adjusted to exclude a
Three month periods ended September 30, 2020 and 2019
Time charter and voyage revenues for the three month period ended September 30, 2020 increased by
EBITDA for the three month period ended September 30, 2020 was negatively affected by the accounting effect of a
The reserves for estimated maintenance and replacement capital expenditures for the three month periods ended September 30, 2020 and 2019 were
Navios Partners generated an operating surplus for the three month period ended September 30, 2020 of
Net Income for the three month period ended September 30, 2020 was negatively affected by the accounting effect of a
Nine month periods ended September 30, 2020 and 2019
Time charter and voyage revenues for the nine month period ended September 30, 2020 decreased by
EBITDA for the nine month period ended September 30, 2020 was negatively affected by the accounting effect of a: (i)
The reserves for estimated maintenance and replacement capital expenditures for the nine month periods ended September 30, 2020 and 2019 were
Navios Partners generated an operating surplus for the nine month period ended September 30, 2020 of
Net Loss for the nine month period ended September 30, 2020 was negatively affected by the accounting effect of a: (i)
Fleet Employment Profile
The following table reflects certain key indicators of Navios Partners’ core fleet performance for the three and nine month periods ended September 30, 2020 and 2019.
| Three Month Period Ended September 30, 2020 (unaudited) | Three Month Period Ended September 30, 2019 (unaudited) | Nine Month Period Ended September 30, 2020 (unaudited) | Nine Month Period Ended September 30, 2019 (unaudited) | ||||||||||
| Available Days(1) | 4,499 | 3,240 | 12,625 | 9,720 | |||||||||
| Operating Days(2) | 4,472 | 3,189 | 12,465 | 9,586 | |||||||||
| Fleet Utilization(3) | 99.4 | % | 98.4 | % | 98.7 | % | 98.6 | % | |||||
| Time Charter Equivalent Combined (per day) (4) | $ | 13,652 | $ | 18,778 | $ | 11,917 | $ | 15,369 | |||||
| Time Charter Equivalent Drybulk (per day) (4) | $ | 12,955 | $ | 16,817 | $ | 10,316 | $ | 12,880 | |||||
| Time Charter Equivalent Containers (per day) (4) | $ | 16,690 | $ | 30,631 | $ | 17,993 | $ | 30,605 | |||||
| Vessels operating at period end | 53 | 37 | 53 | 37 | |||||||||
(1) Available days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues.
(2) Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire. Operating days include ballast days between voyages. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
(3) Fleet utilization is the percentage of time that Navios Partners’ vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, dry dockings or special surveys.
(4) TCE rate: Time Charter Equivalent rate per day is defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate per day is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.
Conference Call Details:
Navios Partners' management will host a conference call on Thursday, November 5, 2020 to discuss the results for the third quarter and nine month period ended September 30, 2020.
Call Date/Time: Thursday, November 5, 2020 at 8:30 am ET
Call Title: Navios Partners Q3 2020 Financial Results Conference Call
US Dial In: +1.866.394.0817
International Dial In: +1.706.679.9759
Conference ID: 654 8605
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 654 8605
Slides and audio webcast:
There will also be a live webcast of the conference call, through the Navios Partners website (www.navios-mlp.com) under “Investors”. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A supplemental slide presentation will be available on the Navios Partners website at www.navios-mlp.com under the "Investors" section at 8:00 am ET on the day of the call.
About Navios Maritime Partners L.P.
Navios Maritime Partners L.P. (NYSE: NMM) is a publicly traded master limited partnership which owns and operates dry cargo vessels. For more information, please visit our website at www.navios-mlp.com.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events including Navios Partners’ expected cash flow generation, future contracted revenues, future distributions and its ability to have a dividend going forward, opportunities to reinvest cash accretively in a fleet renewal program or otherwise, potential capital gains, its ability to take advantage of dislocation in the market and Navios Partners’ growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Partners at the time these statements were made. Although Navios Partners believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Partners. Actual results may differ materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include, but are not limited to, risks relating to: global and regional economic and political conditions including 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 the products we ship, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it; uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles, our continued ability to enter into long-term time charters, our ability to maximize the use of our vessels, expected demand in the dry cargo shipping sector in general and the demand for our Panamax, Capesize, Ultra-Handymax and Containerships in particular, fluctuations in charter rates for dry cargo carriers and container vessels, the aging of our fleet and resultant increases in operations costs, the loss of any customer or charter or vessel, the financial condition of our customers, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, increases in costs and expenses, including but not limited to: crew, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Partners’ filings with the Securities and Exchange Commission, including its Form 20-Fs and Form 6-Ks. Navios Partners expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Partners’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Partners makes no prediction or statement about the performance of its common units.
Contacts
Navios Maritime Partners L.P.
+1 (212) 906 8645
Investors@navios-mlp.com
Nicolas Bornozis
Capital Link, Inc.
+1 (212) 661 7566
naviospartners@capitallink.com
EXHIBIT 1
NAVIOS MARITIME PARTNERS L.P.
SELECTED BALANCE SHEET DATA
(Expressed in thousands of U.S. Dollars except unit data)
| September 30, 2020 (unaudited) | December 31, 2019 (unaudited) | ||||
| ASSETS | |||||
| Cash and cash equivalents, including restricted cash | $ | 30,615 | $ | 30,402 | |
| Other current assets | 36,522 | 45,588 | |||
| Vessels, net | 1,122,535 | 1,062,258 | |||
| Other non-current assets | 108,043 | 115,269 | |||
| Total assets | $ | 1,297,715 | $ | 1,253,517 | |
| LIABILITIES AND PARTNERS’ CAPITAL | |||||
| Other current liabilities | $ | 72,436 | $ | 20,004 | |
| Total borrowings, net (including current and non-current) | 505,672 | 489,028 | |||
| Other non-current liabilities | 14,757 | 16,466 | |||
| Total partners’ capital | 704,850 | 728,019 | |||
| Total liabilities and partners’ capital | $ | 1,297,715 | $ | 1,253,517 | |
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
| Three Month Period Ended September 30, 2020 (unaudited) | Three Month Period Ended September 30, 2019 (unaudited) | Nine Month Period Ended September 30, 2020 (unaudited) | Nine Month Period Ended September 30, 2019 (unaudited) | ||||||||||||
| Time charter and voyage revenues | $ | 64,499 | $ | 63,548 | $ | 157,538 | $ | 158,111 | |||||||
| Time charter and voyage expenses | (3,609 | ) | (2,708 | ) | (8,647 | ) | (8,721 | ) | |||||||
| Direct vessel expenses | (2,736 | ) | (1,710 | ) | (7,670 | ) | (4,823 | ) | |||||||
| Vessel operating expenses (management fees) | (24,289 | ) | (16,695 | ) | (68,424 | ) | (49,801 | ) | |||||||
| General and administrative expenses | (4,716 | ) | (3,897 | ) | (15,844 | ) | (14,425 | ) | |||||||
| Depreciation and amortization | (14,153 | ) | (13,171 | ) | (41,453 | ) | (39,903 | ) | |||||||
| Vessels impairment loss | (1,780 | ) | — | (8,580 | ) | (7,345 | ) | ||||||||
| Impairment of receivable in affiliated company | — | — | (6,900 | ) | — | ||||||||||
| Interest expense and finance cost, net | (5,417 | ) | (11,432 | ) | (18,636 | ) | (35,192 | ) | |||||||
| Interest income | 143 | 1,858 | 514 | 5,392 | |||||||||||
| Other income | 161 | 105 | 2,344 | 696 | |||||||||||
| Other expense | (730 | ) | (403 | ) | (3,202 | ) | (4,725 | ) | |||||||
| Equity in net (loss)/ earnings of affiliated companies | (382 | ) | 1,364 | 586 | 1,549 | ||||||||||
| Net income/ (loss) | $ | 6,991 | $ | 16,859 | $ | (18,374 | ) | $ | 813 | ||||||
Earnings/ (loss) per unit:
| Three Month Period Ended September 30, 2020 (unaudited) | Three Month Period Ended September 30, 2019 (unaudited) | Nine Month Period Ended September 30, 2020 (unaudited) | Nine Month Period Ended September 30, 2019 (unaudited) | |||||||||
| Earnings/ (loss) per unit: | ||||||||||||
| Common unit (basic and diluted) | $ | 0.63 | $ | 1.54 | $ | (1.65 | ) | $ | 0.07 | |||
NAVIOS MARITIME PARTNERS L.P.
Other Financial Information
(Expressed in thousands of U.S. Dollars except unit data)
| Nine Month Period Ended September 30, 2020 (unaudited) | Nine Month Period Ended September 30, 2019 (unaudited) | ||||||
| Net cash provided by operating activities | $ | 68,700 | $ | 47,095 | |||
| Net cash used in investing activities | (78,346 | ) | (6,884 | ) | |||
| Net cash provided by/ (used in) financing activities | 9,859 | (75,671 | ) | ||||
| Increase/ (decrease) in cash, cash equivalents and restricted cash | $ | 213 | $ | (35,460 | ) | ||
EXHIBIT 2
| Owned Drybulk Vessels | Type | Built | Capacity (DWT) | ||||
| Navios Soleil | Ultra-Handymax | 2009 | 57,337 | ||||
| Navios La Paix | Ultra-Handymax | 2014 | 61,485 | ||||
| Navios Christine B | Ultra-Handymax | 2009 | 58,058 | ||||
| Navios Amaryllis | Ultra-Handymax | 2008 | 58,735 | ||||
| Serenitas N | Ultra-Handymax | 2011 | 56,644 | ||||
| Joie N | Ultra-Handymax | 2011 | 56,557 | ||||
| Navios Hyperion | Panamax | 2004 | 75,707 | ||||
| Navios Alegria | Panamax | 2004 | 76,466 | ||||
| Navios Orbiter | Panamax | 2004 | 76,602 | ||||
| Navios Anthos | Panamax | 2004 | 75,798 | ||||
| Navios Azalea | Panamax | 2005 | 74,759 | ||||
| Navios Camelia | Panamax | 2009 | 75,162 | ||||
| Navios Helios | Panamax | 2005 | 77,075 | ||||
| Navios Hope | Panamax | 2005 | 75,397 | ||||
| Navios Sun | Panamax | 2005 | 76,619 | ||||
| Navios Sagittarius | Panamax | 2006 | 75,756 | ||||
| Navios Harmony | Panamax | 2006 | 82,790 | ||||
| Navios Prosperity I | Panamax | 2007 | 75,527 | ||||
| Navios Libertas | Panamax | 2007 | 75,511 | ||||
| Navios Symmetry | Panamax | 2006 | 74,381 | ||||
| Navios Apollon I | Panamax | 2005 | 87,052 | ||||
| Navios Altair I | Panamax | 2006 | 74,475 | ||||
| Navios Sphera | Panamax | 2016 | 84,872 | ||||
| Copernicus N | Panamax | 2010 | 93,062 | ||||
| Unity N | Panamax | 2011 | 79,642 | ||||
| Odysseus N | Panamax | 2011 | 79,642 | ||||
| Navios Victory | Panamax | 2014 | 77,095 | ||||
| Navios Gem | Capesize | 2014 | 181,336 | ||||
| Navios Fantastiks | Capesize | 2005 | 180,265 | ||||
| Navios Aurora II | Capesize | 2009 | 169,031 | ||||
| Navios Pollux | Capesize | 2009 | 180,727 | ||||
| Navios Fulvia | Capesize | 2010 | 179,263 | ||||
| Navios Melodia | Capesize | 2010 | 179,132 | ||||
| Navios Luz | Capesize | 2010 | 179,144 | ||||
| Navios Buena Ventura | Capesize | 2010 | 179,259 | ||||
| Navios Joy | Capesize | 2013 | 181,389 | ||||
| Navios Beaufiks | Capesize | 2004 | 180,310 | ||||
| Navios Ace | Capesize | 2011 | 179,016 | ||||
| Navios Sol | Capesize | 2009 | 180,274 | ||||
| Navios Symphony | Capesize | 2010 | 178,132 | ||||
| Navios Aster | Capesize | 2010 | 179,314 | ||||
| Navios Mars | Capesize | 2016 | 181,259 | ||||
| Bareboat Chartered-in vessel | Type | Built | Capacity (DWT) | Purchase Option | ||||
| Navios Libra | Panamax | 2019 | 82,011 | Yes | ||||
| Owned Containerships | Type | Built | Capacity (TEU) | ||||
| Hyundai Hongkong | Containership | 2006 | 6,800 | ||||
| Hyundai Singapore | Containership | 2006 | 6,800 | ||||
| Hyundai Tokyo | Containership | 2006 | 6,800 | ||||
| Hyundai Shanghai | Containership | 2006 | 6,800 | ||||
| Hyundai Busan | Containership | 2006 | 6,800 | ||||
| Castor N | Containership | 2007 | 3,091 | ||||
| Esperanza N | Containership | 2008 | 2,007 | ||||
| Harmony N | Containership | 2006 | 2,824 | ||||
| Protostar N | Containership | 2007 | 2,741 | ||||
| Solar N | Containership | 2006 | 3,398 | ||||
| Bareboat Chartered-in vessels to be delivered | Type | Built | Capacity (DWT) | Purchase Option | ||||
| TBN1 | Panamax | 2021 | 81,000 | Yes | ||||
| TBN2 | Panamax | 2021 | 81,000 | Yes | ||||
EXHIBIT 3
Disclosure of Non-GAAP Financial Measures
1. EBITDA and Adjusted EBITDA
EBITDA represents net income/ (loss) attributable to Navios Partners’ unitholders before interest and finance costs, before depreciation and amortization (including intangible accelerated amortization) and income taxes. Adjusted EBITDA represents EBITDA before impairment losses. Navios Partners uses Adjusted EBITDA as a liquidity measure and reconcile EBITDA and Adjusted EBITDA to net cash provided by operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by operating activities adding back, when applicable and as the case may be, the effect of: (i) net decrease/ (increase) in operating assets; (ii) net increase in operating liabilities; (iii) net interest cost; (iv) amortization and write-off of deferred financing cost; (v) equity in net earnings of affiliates, net of dividends received; (vi) impairment charges; (vii) non-cash accrued interest income and amortization of deferred revenue; (viii) equity compensation expense; (ix) non-cash accrued interest income from receivable from affiliates; and (x) amortization of operating lease right-of-use asset. Navios Partners believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Partners’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Partners also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
Adjusted EBITDA represents EBITDA excluding certain items, as described under “Earnings Highlights”.
EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Partners’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Partners’ performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.
2. Operating Surplus
Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense, non-cash interest income, estimated maintenance and replacement capital expenditures and one-off items. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Partners’ capital assets.
Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
3. Available Cash
Available Cash generally means for each fiscal quarter, all cash on hand at the end of the quarter:
- less the amount of cash reserves established by the Board of Directors to:
° provide for the proper conduct of Navios Partners’ business (including reserve for maintenance and replacement capital expenditures);
° comply with applicable law, any of Navios Partners’ debt instruments, or other agreements; or
° provide funds for distributions to the unitholders and to the general partner for any one or more of the next four quarters; - plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under any revolving credit or similar agreement used solely for working capital purposes or to pay distributions to partners.
Available Cash is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Available cash is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
4. Reconciliation of Non-GAAP Financial Measures
| Three Month Period Ended September 30, 2020 ($ ‘000) (unaudited) | Three Month Period Ended September 30, 2019 ($ ‘000) (unaudited) | Nine Month Period Ended September 30, 2020 ($ ‘000) (unaudited) | Nine Month Period Ended September 30, 2019 ($ ‘000) (unaudited) | ||||||||||||
| Net cash provided by operating activities | $ | 21,025 | $ | 32,669 | $ | 68,700 | $ | 47,095 | |||||||
| Net decrease/ (increase) in operating assets | 11,794 | (2,058 | ) | 8,027 | 3,844 | ||||||||||
| Net increase in operating liabilities | (6,152 | ) | (174 | ) | (29,333 | ) | (354 | ) | |||||||
| Net interest cost | 5,274 | 9,574 | 18,122 | 29,800 | |||||||||||
| Amortization and write-off of deferred financing cost | (552 | ) | (2,625 | ) | (1,570 | ) | (7,258 | ) | |||||||
| Amortization of operating lease right-of-use asset | (244 | ) | (158 | ) | (703 | ) | (158 | ) | |||||||
| Non cash accrued interest income and amortization of deferred revenue | 400 | 3,168 | 1,188 | 9,471 | |||||||||||
| Equity compensation expense | (240 | ) | (524 | ) | (723 | ) | (1,537 | ) | |||||||
| Vessels impairment loss | (1,780 | ) | — | (8,580 | ) | (7,345 | ) | ||||||||
| Impairment of receivable in affiliated company | — | — | (6,900 | ) | — | ||||||||||
| Non cash accrued interest income from receivable from affiliates | — | 73 | — | 214 | |||||||||||
| Equity in net earnings of affiliates, net of dividends received | (382 | ) | 1,364 | 586 | 1,549 | ||||||||||
| EBITDA(1) | $ | 29,143 | $ | 41,309 | $ | 48,814 | $ | 75,321 | |||||||
| Revision of estimated guarantee claim receivable | — | — | — | 3,638 | |||||||||||
| Impairment of receivable in affiliated company | — | — | 6,900 | — | |||||||||||
| Vessels impairment loss | 1,780 | — | 8,580 | 7,345 | |||||||||||
| Adjusted EBITDA | $ | 30,923 | $ | 41,309 | $ | 64,294 | $ | 86,304 | |||||||
| Cash interest income | 37 | 127 | 201 | 499 | |||||||||||
| Cash interest paid | (5,458 | ) | (8,557 | ) | (18,511 | ) | (27,281 | ) | |||||||
| Maintenance and replacement capital expenditures | (9,491 | ) | (7,153 | ) | (26,670 | ) | (21,887 | ) | |||||||
| Operating surplus | $ | 16,011 | $ | 25,726 | $ | 19,314 | $ | 37,635 | |||||||
| Cash distribution paid relating to the first half | — | — | (3,926 | ) | (6,728 | ) | |||||||||
| Cash reserves | (15,432 | ) | (22,362 | ) | (14,809 | ) | (27,543 | ) | |||||||
| Available cash for distribution | $ | 579 | $ | 3,364 | $ | 579 | $ | 3,364 | |||||||
| (1) | |||||||||||||||
| Three Month Period Ended September 30, 2020 ($ ‘000) (unaudited) | Three Month Period Ended September 30, 2019 ($ ‘000) (unaudited) | Nine Month Period Ended September 30, 2020 ($ ‘000) (unaudited) | Nine Month Period Ended September 30, 2019 ($ ‘000) (unaudited) | ||||||||||||
| Net cash provided by operating activities | $ | 21,025 | $ | 32,669 | $ | 68,700 | $ | 47,095 | |||||||
| Net cash used in investing activities | $ | (38,682 | ) | $ | (5,248 | ) | $ | (78,346 | ) | $ | (6,884 | ) | |||
| Net cash provided by/ (used in) financing activities | $ | 18,457 | $ | (36,646 | ) | $ | 9,859 | $ | (75,671 | ) | |||||
FAQ
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