Scorpio Bulkers Inc. Announces Financial Results for the Third Quarter of 2020 and Declares a Quarterly Cash Dividend
Scorpio Bulkers (NYSE: SALT) reported a substantial net loss of $36.6 million ($3.12 per diluted share) for Q3 2020, a significant drop from a net loss of $1.9 million in Q3 2019. Total vessel revenues fell to $46.7 million, down from $63.2 million a year prior. Adjusted net loss was $17.0 million ($1.45 per diluted share). The Company declared a dividend of $0.05 per share, payable in December 2020. Additionally, it is transitioning towards offshore wind and has initiated vessel sales, with asset write-downs expected to reach approximately $45.2 million in Q4 2020.
- Quarterly cash dividend of $0.05 per share declared.
- Transition towards offshore wind energy shows strategic direction.
- Q3 2020 net loss of $36.6 million compared to $1.9 million in Q3 2019.
- Total vessel revenues decreased by $16.5 million year-over-year.
- Expected asset write-downs of $45.2 million in Q4 2020 due to vessel sales.
MONACO, Oct. 27, 2020 (GLOBE NEWSWIRE) -- Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers” or the “Company”) today reported its results for the three months ended September 30, 2020.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of
Share and per share results included herein have been retroactively adjusted to reflect the one-for-ten reverse stock split of the Company’s common shares, which took effect on April 7, 2020.
Results for the Three and Nine Months Ended September 30, 2020 and 2019
For the third quarter of 2020, the Company’s GAAP net loss was
- a non-cash loss of approximately
$3.7 million and cash dividend income of$0.2 million , or$0.30 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc.; and - a write-down of assets of approximately
$19.6 million , or$1.67 per diluted share, related to the classification of the SBI Rock as held for sale and the agreement to sell the SBI Sousta, both of which are Kamsarmax vessels.
For the same period in 2019, the Company’s GAAP net loss was
Total vessel revenues for the third quarter of 2020 were
For the third quarter of 2020, the Company’s adjusted net loss was
For the third quarter of 2019, the Company’s adjusted net loss was
For the first nine months of 2020, the Company’s GAAP net loss was
- a loss of approximately
$106.7 million and cash dividend income of$0.9 million , or$12.31 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc.; - a write-down of assets of approximately
$36.6 million , or$4.14 per diluted share, related to the classification of the four vessels as held for sale (SBI Taurus, SBI Bolero, SBI Jaguar and SBI Rock) and the agreement to sell the SBI Sousta; and - a write-off of approximately
$0.4 million , or$0.04 per diluted share, of deferred financing costs on the credit facilities related to the SBI Taurus, SBI Bolero and SBI Jaguar.
For the first nine months of 2019, the Company’s GAAP net income was
Total vessel revenues for the first nine months of 2020 were
For the first nine months of 2020, the Company’s adjusted net loss was
For the first nine months of 2019, the Company’s adjusted net income was
TCE Revenue
TCE Revenue Earned during the Third Quarter of 2020 (see Non-GAAP Financial Measures)
- Our Kamsarmax fleet (which includes both scrubber fitted and non-scrubber fitted vessels) earned an average of
$10,142 revenue per day. - Our Ultramax fleet (which includes both scrubber fitted and non-scrubber fitted vessels) earned an average of
$8,930 revenue per day.
Voyages Fixed thus far for the Fourth Quarter of 2020, as of the date hereof
- Kamsarmax fleet (which includes both scrubber fitted and non-scrubber fitted vessels): approximately
$12,740 revenue per day on average for42% of the days - Ultramax fleet (which includes both scrubber fitted and non-scrubber fitted vessels): approximately
$11,226 revenue per day on average for45% of the days
Cash and Cash Equivalents
As of October 26, 2020, the Company had approximately
Recent Significant Events
COVID-19
Since the beginning of the calendar year 2020, the ongoing outbreak of the novel coronavirus (COVID-19) that originated in China in December 2019 and that has spread to most developed nations of the world has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial and commodities markets. A significant reduction in manufacturing and other economic activities has and is expected to continue to have a materially adverse impact on the global demand for raw materials, coal and other bulk cargoes that our customers transport on our vessels. This significant decline in the demand for dry bulk tonnage may materially and adversely impact our ability to profitably charter our vessels. When these measures and the resulting economic impact will end and what the long-term impact of such measures on the global economy will be are not known at this time. As a result, the extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.
Quarterly Cash Dividend
In the third quarter of 2020, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of
On October 27, 2020, the Company’s Board of Directors declared a quarterly cash dividend of
Offshore Wind
Our transition continues, and our conviction towards offshore wind is validated constantly. We are witnessing an unprecedented alignment of scientific, political, and commercial forces, leading to accelerated plans around the world to develop wind energy. Shortly we expect to sign the contract for the construction of our first installation vessel, but other steps will follow. We are re-tooling our organization and our mission to deliver the service that our customers will require.
Vessel Sales
The Company entered into agreements to sell the following vessels to unaffiliated third parties (dollars in thousands).
Vessels for which the sales occurred during the third quarter.
| Vessel | Vessel Type | Year Built | Sales Price | Credit Facility | Related Debt | Expected Delivery | ||||
| SBI Rock (1)(2) | Kamsarmax | 2016 | $ | 18,030 | $ | 6,015 | Delivered October 2020 | |||
| SBI Sousta | Kamsarmax | 2016 | $ | 18,435 | $ | 12,684 | Q4 2020 | |||
| Total Sales Price | $ | 36,465 | ||||||||
As a result of the classification of the SBI Rock as held for sale and the agreement to sell the SBI Sousta, the Company wrote-down assets by approximately
Vessels for which the sales occurred from October 1, 2020 through October 26, 2020.
| Vessel | Vessel Type | Year Built | Sales Price | Credit Facility | Related Debt | Expected Delivery | ||||
| SBI Conga (2) | Kamsarmax | 2015 | $ | 18,400 | $ | 12,009 | Q4 2020 | |||
| SBI Phoenix (2) | Ultramax | 2017 | $ | 17,000 | $ | 12,313 | Q4 2020 | |||
| SBI Samson (1)(2) | Ultramax | 2017 | $ | 17,000 | $ | 12,313 | Delivered October 2020 | |||
| SBI Hera | Ultramax | 2016 | $ | 18,460 | $ | 12,759 | Q4 2020 | |||
| SBI Zeus | Ultramax | 2016 | $ | 18,500 | $ | 12,759 | Q4 2020 | |||
| SBI Hyperion | Ultramax | 2016 | $ | 17,500 | $ | 12,313 | Q4 2020 | |||
| Total Sales Price | $ | 106,860 | ||||||||
- The sale of the SBI Rock and SBI Samson have been completed as of October 26, 2020.
- Related debt has been repaid between October 1, 2020 and October 26, 2020.
As a result of the sales of the SBI Conga, SBI Phoenix, SBI Samson, SBI Hera, SBI Zeus and SBI Hyperion announced in October 2020, the Company expects to recognized asset write-downs of approximately
The Company also expects to write-off approximately
In addition, the available credit under the Company’s revolving line of credit has been permanently reduced by approximately
Debt and Liquidity
Amendment of Minimum Liquidity Covenant
The Company has agreed with its lenders and a finance lessor to permanently reduce the level of the minimum liquidity covenant under the relevant debt financings from the greater of: (i)
In consideration for the above amendment, the Company has made advance principal repayments of approximately
Payment Holiday on Certain Future Principal Repayments
The Company has agreed with its lenders to reduce future principal repayments of approximately
The advance principal payments made during the third quarter of 2020 related to the amendment of the minimum liquidity covenant and payment holidays by credit facility are as follows (dollars in thousands):
| Amendment of Minimum Liquidity Covenant | Payment Holiday on Certain Future Principal Repayments | ||||
| $ | 820 | $ | 1,093 | ||
| 555 | 1,111 | ||||
| 565 | 565 | ||||
| 3,479 | 6,958 | ||||
| 607 | 1,214 | ||||
| 1,650 | 3,950 | ||||
| Total | $ | 7,676 | $ | 14,891 | |
In addition, the Company agreed with a specific finance lessor to defer two quarterly installment payments (i.e. Q1 2021 and Q2 2021) to the subsequent eight quarters (in equal payments). As a result, the Company will not have to make certain quarterly installment payments on this lease financing totaling approximately
Debt Overview
The Company’s outstanding debt balances, gross of unamortized deferred financing costs as of September 30, 2020 and October 26, 2020, are as follows (dollars in thousands):
| As of September 30, 2020 | As of October 26, 2020 | |||||||
| Credit Facility | Amount Outstanding | |||||||
| $ | 33,531 | $ | 33,531 | |||||
| 26,166 | 26,166 | |||||||
| 24,029 | 24,029 | |||||||
| 66,552 | 115,661 | |||||||
| 30,786 | 30,786 | |||||||
| 72,550 | 47,924 | |||||||
| 15,935 | 15,829 | |||||||
| 16,412 | 16,309 | |||||||
| 16,548 | 16,453 | |||||||
| 18,091 | 17,983 | |||||||
| 19,322 | 19,203 | |||||||
| CMBFL Lease Financing | 104,963 | 104,963 | ||||||
| 40,383 | 40,035 | |||||||
| AVIC Lease Financing | 104,330 | 103,184 | ||||||
| 61,197 | 60,719 | |||||||
| Total | $ | 650,795 | $ | 672,775 | ||||
(1) Debt outstanding as of October 26, 2020 to be repaid as per the summary of vessel sales table above. As of October 26, 2020, the debt related to the SBI Rock, SBI Samson, SBI Phoenix and SBI Conga has been repaid.
(2) Drew down
The Company’s projected quarterly debt repayments on its bank loans and lease financing arrangements through 2021 are as follows (dollars in thousands):
| Principal on Bank Loans | Principal on Lease Financing Arrangements | Total | ||||||||||
| Q4 2020 (1)(2) | $ | 51,880 | $ | 6,593 | $ | 58,473 | ||||||
| Q1 2021 | 1,305 | 6,782 | 8,087 | |||||||||
| Q2 2021 | 1,305 | 6,817 | 8,122 | |||||||||
| Q3 2021 | 749 | 9,716 | 10,465 | |||||||||
| Q4 2021 | 6,027 | 9,736 | 15,763 | |||||||||
| Total | $ | 61,266 | $ | 39,644 | $ | 100,910 | ||||||
(1) Relates to payments expected to be made from October 27, 2020 to December 31, 2020.
(2) Includes the repayment of approximately
IMO 2020
As of October 26, 2020, the Company has completed the installation of scrubbers on 17 Ultramax vessels and 10 Kamsarmax vessels and expects installation to be completed on another Ultramax vessel in November 2020. In April 2020, the Company reached an agreement with its counterparties to postpone the installment of scrubbers on thirteen vessels until at least 2021 at no additional cost to the Company.
Financial Results for the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
For the third quarter of 2020, the Company’s GAAP net loss was
EBITDA for the third quarters of 2020 and 2019 were a loss of
For the third quarter of 2020, the Company’s adjusted net loss was
For the third quarter of 2019, the Company’s adjusted net loss was
The Company’s vessel revenues for the third quarter of 2020 were
Total operating expenses for the third quarter of 2020 were
Ultramax Operations
| Three Months Ended September 30, | ||||||||||||||
| Dollars in thousands | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue: | ||||||||||||||
| Vessel revenue | $ | 27,701 | $ | 41,257 | $ | (13,556 | ) | (33 | ) | |||||
| Voyage expenses | 1,420 | 240 | 1,180 | 492 | ||||||||||
| TCE Revenue | $ | 26,281 | $ | 41,017 | $ | (14,736 | ) | (36 | ) | |||||
| Operating expenses: | ||||||||||||||
| Vessel operating costs | 16,508 | 16,798 | (290 | ) | (2 | ) | ||||||||
| Charterhire expense | 520 | 936 | (416 | ) | (44 | ) | ||||||||
| Vessel depreciation | 9,369 | 9,000 | 369 | 4 | ||||||||||
| General and administrative expense | 937 | 1,070 | (133 | ) | (12 | ) | ||||||||
| Loss / write-down on assets held for sale | — | (194 | ) | 194 | NA | |||||||||
| Total operating expenses | $ | 27,334 | $ | 27,610 | $ | (276 | ) | (1 | ) | |||||
| Operating (loss) income | $ | (1,053 | ) | $ | 13,407 | $ | (14,460 | ) | (108 | ) | ||||
Vessel revenue for the Company’s Ultramax Operations decreased to
TCE revenue (see Non-GAAP Financial Measures below) for the Company’s Ultramax Operations was
| Three Months Ended September 30, | ||||||||||||||
| Ultramax Operations: | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue (in thousands) | $ | 26,281 | $ | 41,017 | $ | (14,736 | ) | (36 | ) | |||||
| TCE Revenue / Day | $ | 8,930 | $ | 11,824 | $ | (2,894 | ) | (24 | ) | |||||
| Revenue Days | 2,943 | 3,469 | (526 | ) | (15 | ) | ||||||||
The Company’s Ultramax Operations vessel operating costs were
Charterhire expense for the Company’s Ultramax Operations was approximately
Ultramax Operations depreciation increased from
General and administrative expense for the Company’s Ultramax Operations, which consists primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions, was approximately
During the third quarter of 2019, a partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately
Kamsarmax Operations
| Three Months Ended September 30, | ||||||||||||||
| Dollars in thousands | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue: | ||||||||||||||
| Vessel revenue | $ | 18,989 | $ | 21,970 | $ | (2,981 | ) | (14 | ) | |||||
| Voyage expenses | 277 | 261 | 16 | 6 | ||||||||||
| TCE Revenue | $ | 18,712 | $ | 21,709 | $ | (2,997 | ) | (14 | ) | |||||
| Operating expenses: | ||||||||||||||
| Vessel operating costs | 7,979 | 8,398 | (419 | ) | (5 | ) | ||||||||
| Charterhire expense | 5,854 | 6,552 | (698 | ) | (11 | ) | ||||||||
| Vessel depreciation | 4,721 | 4,533 | 188 | 4 | ||||||||||
| General and administrative expense | 457 | 482 | (25 | ) | (5 | ) | ||||||||
| Loss / write-down on assets held for sale | 19,598 | — | 19,598 | NA | ||||||||||
| Total operating expenses | $ | 38,609 | $ | 19,965 | $ | 18,644 | 93 | |||||||
| Operating loss | $ | (19,897 | ) | $ | 1,744 | $ | (21,641 | ) | 1,241 | |||||
Vessel revenue for the Company’s Kamsarmax Operations decreased to
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Kamsarmax Operations was
| Three Months Ended September 30, | ||||||||||||||
| Kamsarmax Operations: | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue (in thousands) | $ | 18,712 | $ | 21,709 | $ | (2,997 | ) | (14 | ) | |||||
| TCE Revenue / Day | $ | 10,142 | $ | 13,149 | $ | (3,007 | ) | (23 | ) | |||||
| Revenue Days | 1,845 | 1,651 | 194 | 12 | ||||||||||
Kamsarmax Operations vessel operating costs were
Kamsarmax Operations charterhire expense was
Kamsarmax Operations depreciation was
General and administrative expense for the Company’s Kamsarmax Operations was
During the third quarter of 2020, the Company recorded a write down on assets held for sale of
Corporate
Certain general and administrative expenses that the Company incurs, as well as all of its financial expenses and investment income or losses, are not attributable to a specific segment. Accordingly, these costs are not allocated to the Company’s segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, were
The Company recorded a loss of approximately
Financial expenses, net of interest income decreased to
Financial Results for the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
For the first nine months of 2020, the Company’s GAAP net loss was
EBITDA for the first nine months of 2020 and 2019 were a loss of
For the first nine months of 2020, the Company’s adjusted net loss was
For the first nine months of 2019, the Company’s adjusted net income was
The Company’s vessel revenues for the first nine months of 2020 were
Total operating expenses for the first nine months of 2020 were
Ultramax Operations
| Nine Months Ended September 30, | ||||||||||||||
| Dollars in thousands | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue: | ||||||||||||||
| Vessel revenue | $ | 66,744 | $ | 103,234 | $ | (36,490 | ) | (35 | ) | |||||
| Voyage expenses | 2,787 | 438 | 2,349 | 536 | ||||||||||
| TCE Revenue | $ | 63,957 | $ | 102,796 | $ | (38,839 | ) | (38 | ) | |||||
| Operating expenses: | ||||||||||||||
| Vessel operating costs | 47,813 | 50,962 | (3,149 | ) | (6 | ) | ||||||||
| Charterhire expense | 2,487 | 2,731 | (244 | ) | (9 | ) | ||||||||
| Vessel depreciation | 25,499 | 27,108 | (1,609 | ) | (6 | ) | ||||||||
| General and administrative expense | 2,993 | 3,131 | (138 | ) | (4 | ) | ||||||||
| Loss / write-down on assets held for sale | 7,615 | 4,688 | 2,927 | 62 | ||||||||||
| Total operating expenses | $ | 86,407 | $ | 88,620 | $ | (2,213 | ) | (2 | ) | |||||
| Operating (loss) income | $ | (22,450 | ) | $ | 14,176 | $ | (36,626 | ) | (258 | ) | ||||
Vessel revenue for the Company’s Ultramax Operations decreased to
TCE revenue (see Non-GAAP Financial Measures below) for the Company’s Ultramax Operations was
| Nine Months Ended September 30, | ||||||||||||||
| Ultramax Operations: | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue (in thousands) | $ | 63,957 | $ | 102,796 | $ | (38,839 | ) | (38 | ) | |||||
| TCE Revenue / Day | $ | 7,604 | $ | 10,010 | $ | (2,406 | ) | (24 | ) | |||||
| Revenue Days | 8,411 | 10,269 | (1,858 | ) | (18 | ) | ||||||||
The Company’s Ultramax Operations vessel operating costs were
Charterhire expense for the Company’s Ultramax Operations was approximately
Ultramax Operations depreciation decreased from
General and administrative expense for the Company’s Ultramax Operations, which consists primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions, was approximately
During the first nine months of 2020, the Company recorded a write-down on assets held for sale of
Kamsarmax Operations
| Nine Months Ended September 30, | ||||||||||||||
| Dollars in thousands | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue: | ||||||||||||||
| Vessel revenue | $ | 46,935 | $ | 61,081 | $ | (14,146 | ) | (23 | ) | |||||
| Voyage expenses | 1,730 | 408 | 1,322 | 324 | ||||||||||
| TCE Revenue | $ | 45,205 | $ | 60,673 | $ | (15,468 | ) | (25 | ) | |||||
| Operating expenses: | ||||||||||||||
| Vessel operating costs | 23,609 | 25,730 | (2,121 | ) | (8 | ) | ||||||||
| Charterhire expense | 13,061 | 8,039 | 5,022 | 62 | ||||||||||
| Vessel depreciation | 13,614 | 13,695 | (81 | ) | (1 | ) | ||||||||
| General and administrative expense | 1,468 | 1,594 | (126 | ) | (8 | ) | ||||||||
| Loss / write-down on assets held for sale | 28,992 | 7,353 | 21,639 | 294 | ||||||||||
| Total operating expenses | $ | 80,744 | $ | 56,411 | $ | 24,333 | 43 | |||||||
| Operating loss | $ | (35,539 | ) | $ | 4,262 | $ | (39,801 | ) | 934 | |||||
Vessel revenue for the Company’s Kamsarmax Operations decreased to
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Kamsarmax Operations was
| Nine Months Ended September 30, | ||||||||||||||
| Kamsarmax Operations: | 2020 | 2019 | Change | % Change | ||||||||||
| TCE Revenue (in thousands) | $ | 45,205 | $ | 60,673 | $ | (15,468 | ) | (25 | ) | |||||
| TCE Revenue / Day | $ | 8,640 | $ | 11,672 | $ | (3,032 | ) | (26 | ) | |||||
| Revenue Days | 5,232 | 5,198 | 34 | 1 | ||||||||||
Kamsarmax Operations vessel operating costs were
Kamsarmax Operations charterhire expense was
Kamsarmax Operations depreciation was
General and administrative expense for the Company’s Kamsarmax Operations was
During the first nine months of 2020, the Company recorded a write down on assets held for sale of
Corporate
Certain general and administrative expenses the Company incurs, as well as all of its financial expenses and investment income or losses, are not attributable to a specific segment. Accordingly, these costs are not allocated to the Company’s segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, were
The Company recorded a non-cash loss of approximately
Financial expenses, net of interest income decreased to
Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
| Unaudited | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Vessel revenue | $ | 46,690 | $ | 63,227 | $ | 113,679 | $ | 164,315 | ||||||||
| Operating expenses: | ||||||||||||||||
| Voyage expenses | 1,697 | 501 | 4,517 | 846 | ||||||||||||
| Vessel operating costs | 24,487 | 25,196 | 71,422 | 76,692 | ||||||||||||
| Charterhire expense | 6,374 | 7,488 | 15,548 | 10,770 | ||||||||||||
| Vessel depreciation | 14,090 | 13,533 | 39,113 | 40,803 | ||||||||||||
| General and administrative expenses | 6,285 | 7,941 | 19,589 | 24,001 | ||||||||||||
| Loss / write-down on assets sold or held for sale | 19,598 | (194 | ) | 36,607 | 12,041 | |||||||||||
| Total operating expenses | 72,531 | 54,465 | 186,796 | 165,153 | ||||||||||||
| Operating loss (income) | (25,841 | ) | 8,762 | (73,117 | ) | (838 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 18 | 553 | 190 | 1,227 | ||||||||||||
| (Loss) income from equity investments | (3,534 | ) | 1,582 | (105,858 | ) | 70,227 | ||||||||||
| Foreign exchange (loss) income | (113 | ) | 18 | (243 | ) | (33 | ) | |||||||||
| Financial expense, net | (7,155 | ) | (12,843 | ) | (27,352 | ) | (41,013 | ) | ||||||||
| Total other (expense) income | (10,784 | ) | (10,690 | ) | (133,263 | ) | 30,408 | |||||||||
| Net loss | $ | (36,625 | ) | $ | (1,928 | ) | $ | (206,380 | ) | $ | 29,570 | |||||
| (Loss) earnings per share: | ||||||||||||||||
| Basic | $ | (3.12 | ) | $ | (0.28 | ) | $ | (23.34 | ) | $ | 4.36 | |||||
| Diluted | $ | (3.12 | ) | $ | (0.28 | ) | $ | (23.34 | ) | $ | 4.25 | |||||
| Basic weighted average number of common shares outstanding | 11,724 | 6,846 | 8,843 | 6,789 | ||||||||||||
| Diluted weighted average number of common shares outstanding | 11,724 | 6,846 | 8,843 | 6,961 | ||||||||||||
Scorpio Bulkers Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
| Unaudited | ||||||||
| September 30, 2020 | December 31, 2019 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 40,220 | $ | 42,530 | ||||
| Accounts receivable | 21,142 | 13,209 | ||||||
| Prepaid expenses and other current assets | 7,147 | 9,547 | ||||||
| Total current assets | 68,509 | 65,286 | ||||||
| Non-current assets | ||||||||
| Vessels, net | 1,277,383 | 1,271,993 | ||||||
| Assets held for sale | 17,500 | 77,536 | ||||||
| Equity investments | 23,857 | 173,298 | ||||||
| Deferred financing costs, net | 2,410 | 2,982 | ||||||
| Other assets | 39,056 | 74,464 | ||||||
| Total non-current assets | 1,360,206 | 1,600,273 | ||||||
| Total assets | $ | 1,428,715 | $ | 1,665,559 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities | ||||||||
| Bank loans, net | $ | 4,809 | $ | 44,956 | ||||
| Capital lease obligations | 35,940 | 29,159 | ||||||
| Accounts payable and accrued expenses | 32,805 | 49,718 | ||||||
| Total current liabilities | 73,554 | 123,833 | ||||||
| Non-current liabilities | ||||||||
| Bank loans, net | 244,545 | 332,613 | ||||||
| Capital lease obligations | 356,693 | 321,646 | ||||||
| Other liabilities | 135 | 12,500 | ||||||
| Total non-current liabilities | 601,373 | 666,759 | ||||||
| Total liabilities | 674,927 | 790,592 | ||||||
| Shareholders’ equity | ||||||||
| Preferred shares, | — | — | ||||||
| Common shares, | 858 | 809 | ||||||
| Paid-in capital | 1,802,296 | 1,717,144 | ||||||
| Common shares held in treasury, at cost; 856,785 shares at September 30, 2020 and December 31, 2019 | (56,720 | ) | (56,720 | ) | ||||
| Accumulated deficit | (992,646 | ) | (786,266 | ) | ||||
| Total shareholders’ equity | 753,788 | 874,967 | ||||||
| Total liabilities and shareholders’ equity | $ | 1,428,715 | $ | 1,665,559 | ||||
Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
| Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net (loss) income | $ | (206,380 | ) | $ | 29,570 | |||
| Adjustment to reconcile net (loss) income to net cash provided by | ||||||||
| operating activities: | ||||||||
| Restricted share amortization | 5,552 | 6,674 | ||||||
| Vessel depreciation | 39,113 | 40,803 | ||||||
| Amortization of deferred financing costs | 2,880 | 5,941 | ||||||
| Write-off of deferred financing costs | 366 | 446 | ||||||
| Loss / write-down on assets held for sale | 33,894 | 10,385 | ||||||
| Net unrealized losses (gains) on investments | 106,730 | (68,606 | ) | |||||
| Dividend income on equity investment | (872 | ) | (1,623 | ) | ||||
| Drydocking expenditure | (16,606 | ) | (2,265 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in accounts receivable | (7,933 | ) | (1,199 | ) | ||||
| Decrease (increase) in prepaid expenses and other assets | 23,421 | (4,241 | ) | |||||
| (Decrease) increase in accounts payable and accrued expenses | (27,817 | ) | 6,795 | |||||
| Net cash (used in) provided by operating activities | (47,652 | ) | 22,680 | |||||
| Investing activities | ||||||||
| Equity investment | — | (1,500 | ) | |||||
| Sale of equity investment | 42,711 | — | ||||||
| Dividend income on equity investment | 872 | 1,623 | ||||||
| Proceeds from sale of assets held for sale | 52,518 | 47,302 | ||||||
| Scrubber payments | (42,495 | ) | (16,678 | ) | ||||
| Net cash used in investing activities | 53,606 | 30,747 | ||||||
| Financing activities | ||||||||
| Proceeds from issuance of common stock | 82,254 | — | ||||||
| Proceeds from issuance of long-term debt | 132,708 | 300,070 | ||||||
| Repayments of long-term debt | (220,620 | ) | (332,052 | ) | ||||
| Dividends paid | (2,606 | ) | (4,298 | ) | ||||
| Debt issue costs paid | — | (4,508 | ) | |||||
| Net cash provided by (used in) financing activities | (8,264 | ) | (40,788 | ) | ||||
| (Decrease) increase in cash and cash equivalents | (2,310 | ) | 12,639 | |||||
| Cash and cash equivalents, beginning of period | 42,530 | 67,495 | ||||||
| Cash and cash equivalents, end of period | $ | 40,220 | $ | 80,134 | ||||
Scorpio Bulkers Inc. and Subsidiaries
Other Operating Data (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Time charter equivalent revenue ( | ||||||||||||||||
| Vessel revenue | $ | 46,690 | $ | 63,227 | $ | 113,679 | $ | 164,315 | ||||||||
| Voyage expenses | (1,697 | ) | (501 | ) | (4,517 | ) | (846 | ) | ||||||||
| Time charter equivalent revenue | $ | 44,993 | $ | 62,726 | $ | 109,162 | $ | 163,469 | ||||||||
| Time charter equivalent revenue attributable to: | ||||||||||||||||
| Kamsarmax | $ | 18,712 | $ | 21,709 | $ | 45,205 | $ | 60,673 | ||||||||
| Ultramax | 26,281 | 41,017 | 63,957 | 102,796 | ||||||||||||
| $ | 44,993 | $ | 62,726 | $ | 109,162 | $ | 163,469 | |||||||||
| Revenue days: | ||||||||||||||||
| Kamsarmax | 1,845 | 1,651 | 5,232 | 5,198 | ||||||||||||
| Ultramax | 2,943 | 3,469 | 8,411 | 10,269 | ||||||||||||
| Combined | 4,788 | 5,120 | 13,643 | 15,467 | ||||||||||||
| TCE per revenue day (1): | ||||||||||||||||
| Kamsarmax | $ | 10,142 | $ | 13,149 | $ | 8,640 | $ | 11,672 | ||||||||
| Ultramax | $ | 8,930 | $ | 11,824 | $ | 7,604 | $ | 10,010 | ||||||||
| Combined | $ | 9,397 | $ | 12,251 | $ | 8,001 | $ | 10,569 | ||||||||
(1) The Company defines Time Charter Equivalent (TCE) revenue as vessel revenues less voyage expenses. Such TCE revenue, divided by the number of the Company’s available days during the period, or revenue days, is TCE per revenue day, which is consistent with industry standards. TCE per revenue day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.
The Company reports TCE revenue, a non-GAAP financial measure, because (i) the Company believes it provides additional meaningful information in conjunction with vessel revenues and voyage expenses, the most directly comparable U.S. GAAP measures, (ii) it assists the Company’s management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance, (iii) it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods, and (iv) the Company believes that it presents useful information to investors. See Non-GAAP Financial Measures below.
Fleet List as of October 26, 2020
| Vessel Name | Year Built | DWT | Vessel Type | Scrubber Installed ? | |||||
| SBI Samba | 2015 | 84,000 | Kamsarmax | Yes | |||||
| SBI Rumba | 2015 | 84,000 | Kamsarmax | Yes | |||||
| SBI Capoeira | 2015 | 82,000 | Kamsarmax | No | |||||
| SBI Carioca | 2015 | 82,000 | Kamsarmax | Yes | |||||
| SBI Conga | 2015 | 82,000 | Kamsarmax | No | |||||
| SBI Sousta | 2016 | 82,000 | Kamsarmax | No | |||||
| SBI Lambada | 2016 | 82,000 | Kamsarmax | No | |||||
| SBI Reggae | 2016 | 82,000 | Kamsarmax | No | |||||
| SBI Zumba | 2016 | 82,000 | Kamsarmax | Yes | |||||
| SBI Macarena | 2016 | 82,000 | Kamsarmax | Yes | |||||
| SBI Parapara | 2017 | 82,000 | Kamsarmax | Yes | |||||
| SBI Mazurka | 2017 | 82,000 | Kamsarmax | Yes | |||||
| SBI Swing | 2017 | 82,000 | Kamsarmax | Yes | |||||
| SBI Jive | 2017 | 82,000 | Kamsarmax | Yes | |||||
| SBI Lynx | 2018 | 82,000 | Kamsarmax | Yes | |||||
| Total Kamsarmax | 1,234,000 | ||||||||
| SBI Antares | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Athena | 2015 | 64,000 | Ultramax | Yes | |||||
| SBI Bravo | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Leo | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Echo | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Lyra | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Tango | 2015 | 61,000 | Ultramax | No | |||||
| SBI Maia | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Hydra | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Subaru | 2015 | 61,000 | Ultramax | Yes | |||||
| SBI Pegasus | 2015 | 64,000 | Ultramax | No | |||||
| SBI Ursa | 2015 | 61,000 | Ultramax | No | |||||
| SBI Thalia | 2015 | 64,000 | Ultramax | No | |||||
| SBI Cronos | 2015 | 61,000 | Ultramax | No | |||||
| SBI Orion | 2015 | 64,000 | Ultramax | No | |||||
| SBI Achilles | 2016 | 61,000 | Ultramax | No | |||||
| SBI Hercules | 2016 | 64,000 | Ultramax | No | |||||
| SBI Perseus | 2016 | 64,000 | Ultramax | No | |||||
| SBI Hermes | 2016 | 61,000 | Ultramax | No | |||||
| SBI Zeus | 2016 | 60,200 | Ultramax | No | |||||
| SBI Hera | 2016 | 60,200 | Ultramax | No | |||||
| SBI Hyperion | 2016 | 61,000 | Ultramax | No | |||||
| SBI Tethys | 2016 | 61,000 | Ultramax | Yes | |||||
| SBI Phoebe | 2016 | 64,000 | Ultramax | Yes | |||||
| SBI Poseidon | 2016 | 60,200 | Ultramax | Yes | |||||
| SBI Apollo | 2016 | 60,200 | Ultramax | Yes | |||||
| SBI Phoenix | 2017 | 64,000 | Ultramax | No | |||||
| SBI Gemini | 2015 | 64,000 | Ultramax | Yes | |||||
| SBI Libra | 2017 | 64,000 | Ultramax | Yes | |||||
| SBI Aries | 2015 | 64,000 | Ultramax | Yes | |||||
| SBI Pisces | 2016 | 64,000 | Ultramax | No | |||||
| SBI Virgo | 2017 | 64,000 | Ultramax | Yes | |||||
| Total Ultramax | 1,987,800 | ||||||||
| Total Owned or Finance Leased Vessels DWT | 3,221,800 | ||||||||
Time chartered-in vessels
The Company currently time charters-in five Kamsarmax vessels. The terms of the contracts are summarized as follows:
| Vessel Type | Year Built | DWT | Country of Build | Daily Base Rate | Earliest Expiry | |||||||||||
| Kamsarmax | 2019 | 81,100 | China | Variable | 10-Mar-21 | (1 | ) | |||||||||
| Kamsarmax | 2019 | 81,100 | China | Variable | 7-Apr-21 | (2 | ) | |||||||||
| Kamsarmax | 2018 | 82,000 | China | $ | 12,500 | 25-June-21 | (3 | ) | ||||||||
| Kamsarmax | 2018 | 81,100 | China | Variable | 13-Jul-21 | (4 | ) | |||||||||
| Kamsarmax | 2015 | 81,100 | China | Variable | 22-Jul-21 | (5 | ) | |||||||||
| Total TC DWT | 406,400 | |||||||||||||||
(1) This vessel has been time chartered-in for 24 to 27 months at the Company’s option at
(2) This vessel has been time chartered-in for 24 to 27 months at the Company’s option at
(3) This vessel has been time chartered-in for 24 months at
(4) This vessel has been time chartered-in for 24 to 27 months at the Company’s option at
(5) This vessel has been time chartered-in for 24 to 27 months at the Company’s option at
Conference Call on Results:
A conference call to discuss the Company’s results will be held at 9:00 AM Eastern Daylight Time / 2:00 PM Central European Time on October 27, 2020. Those wishing to listen to the call should dial 1 (866) 219-5268 (U.S.) or 1 (703) 736-7424 (International) at least 10 minutes prior to the start of the call to ensure connection. The conference participant passcode is 7883425. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website www.scorpiobulkers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL: https://edge.media-server.com/mmc/p/6prhigw4
About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities, and is investing in the next generation of wind turbine installation vessels. The Company has recently sold two vessels and has contracted to sell six additional vessels, which are expected to close in the fourth quarter of 2020. Upon the completion of the announced vessel sales, Scorpio Bulkers Inc. will have an operating fleet of 46 vessels consisting of 41 wholly-owned or finance leased drybulk vessels (including 13 Kamsarmax vessels and 28 Ultramax vessels), and five time chartered-in Kamsarmax vessels. In addition to its dry bulk fleet, the Company has signed a letter of intent to enter into a shipbuilding contract with Daewoo Shipbuilding and Marine Engineering Inc. to build a wind turbine installation vessel to be delivered in 2023, with options to build three further similar vessels. The Company’s owned and finance leased fleet will have a total carrying capacity of approximately 2.8 million dwt and all of the Company’s owned and finance leased vessels will have carrying capacities of greater than 60,000 dwt. Additional information about the Company is available on the Company’s website www.scorpiobulkers.com, which is not a part of this press release.
Non-GAAP Financial Measures
To supplement the Company’s financial information presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) management uses certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to the Company’s financial condition and results of operations, and therefore a more complete understanding of factors affecting its business than GAAP measures alone. In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of management’s control.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted net income (loss) and related per share amounts, as well as adjusted EBITDA and TCE Revenue are non-GAAP financial measures that the Company believes provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP. Please see below for reconciliations of EBITDA, adjusted net income (loss) and related per share amounts, and adjusted EBITDA. Please see “Other Operating Data” for a reconciliation of TCE revenue.
EBITDA (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| In thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net (loss) income | $ | (36,625 | ) | (1,928 | ) | $ | (206,380 | ) | $ | 29,570 | ||||
| Add Back: | ||||||||||||||
| Net interest expense | 6,279 | 10,779 | 23,915 | 33,399 | ||||||||||
| Depreciation and amortization (1) | 16,482 | 17,421 | 47,912 | 53,864 | ||||||||||
| EBITDA | $ | (13,864 | ) | 26,272 | $ | (134,553 | ) | $ | 116,833 | |||||
(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.
Adjusted net (loss) income (unaudited)
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||
| In thousands, except per share data | 2020 | 2019 | |||||||||||||
| Amount | Per share | Amount | Per share | ||||||||||||
| Net loss | $ | (36,625 | ) | $ | (3.12 | ) | $ | (1,928 | ) | $ | (0.28 | ) | |||
| Adjustments: | |||||||||||||||
| Loss / write-down on assets | 19,598 | 1.67 | (194 | ) | (0.03 | ) | |||||||||
| Total adjustments | $ | 19,598 | $ | 1.67 | $ | (194 | ) | $ | (0.03 | ) | |||||
| Adjusted net loss | $ | (17,027 | ) | $ | (1.45 | ) | $ | (2,122 | ) | $ | (0.31 | ) | |||
| Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| In thousands, except per share data | 2020 | 2019 | ||||||||||||
| Amount | Per share | Amount | Per share | |||||||||||
| Net (loss) income | $ | (206,380 | ) | $ | (23.34 | ) | $ | 29,570 | $ | 4.25 | ||||
| Adjustments: | ||||||||||||||
| Loss / write-down on assets | 36,607 | 4.14 | 12,041 | 1.73 | ||||||||||
| Write-off of deferred financing cost | 366 | 0.04 | 446 | 0.06 | ||||||||||
| Total adjustments | $ | 36,973 | $ | 4.18 | $ | 12,487 | $ | 1.79 | ||||||
| Adjusted net (loss) income | $ | (169,407 | ) | $ | (19.16 | ) | $ | 42,057 | $ | 6.04 | ||||
Adjusted EBITDA (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| In thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net (loss) income | $ | (36,625 | ) | $ | (1,928 | ) | $ | (206,380 | ) | $ | 29,570 | |||
| Impact of adjustments | 19,598 | (194 | ) | 36,973 | 12,487 | |||||||||
| Adjusted net (loss) income | (17,027 | ) | (2,122 | ) | (169,407 | ) | 42,057 | |||||||
| Add Back: | ||||||||||||||
| Net interest expense | 6,279 | 10,779 | 23,915 | 33,399 | ||||||||||
| Depreciation and amortization (1) | 16,482 | 17,421 | 47,546 | 53,417 | ||||||||||
| Adjusted EBITDA | $ | 5,734 | $ | 26,078 | $ | (97,946 | ) | $ | 128,873 | |||||
(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements 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 Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, the length and severity of the ongoing novel coronavirus (COVID-19) outbreak, including its effects on demand for dry bulk products and the transportation thereof, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, counterparty performance, ability to obtain financing and the availability of capital resources (including for capital expenditures) and comply with covenants in such financing arrangements, planned capital expenditures, our ability to successfully identify, consummate, integrate and realize the expected benefits from acquisitions and changes to our business strategy, fluctuations in the value of our investments, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the SEC for a more complete discussion of these and other risks and uncertainties.
FAQ
What were the earnings results for Scorpio Bulkers (SALT) in Q3 2020?
How does the Q3 2020 performance of Scorpio Bulkers compare to Q3 2019?
What is the future outlook for Scorpio Bulkers after the Q3 2020 results?
What dividend has Scorpio Bulkers declared recently?
