- $37.9 million net cash from operating activities for 9M 2018; $18.3 million for Q3 2018
- $54.0 million Adjusted EBITDA for 9M 2018; $21.6 million Adjusted EBITDA for Q3 2018
- $9.0 million new term loan facility
- 40% increase in fleet capacity YTD 2018
- Filed F-1 for direct listing on the NASDAQ Global Select Market
MONACO -- Navios Maritime Containers Inc. (“Navios Containers” or the “Company”) (N-OTC: NMCI), a growth vehicle dedicated to the container sector of the maritime industry, reported financial results for the third quarter and nine months ended September 30, 2018.
HIGHLIGHTS -- RECENT DEVELOPMENTS
Pursuing direct listing on the Nasdaq Global Select Market
In connection with the proposed listing of Navios Containers on the NASDAQ Global Select Market as set forth in the registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission, Navios Maritime Partners L.P. (“Navios Partners”) plans to distribute approximately 2.5% of the outstanding equity of Navios Containers to unitholders of Navios Partners. It is anticipated that approximately 855,050 shares of common equity of Navios Containers will be distributed by Navios Partners to its unitholders, with the actual number of shares of common equity distributed depending on the number of units of Navios Partners that are issued and outstanding on the record date. Following the distribution, Navios Partners will own approximately 33.5% of the equity in Navios Containers. The common shares of common equity may not be distributed before Navios Containers’ registration statement on Form F-1 has been declared effective by the Securities and Exchange Commission.
There can be no assurance that Navios Partners’ distribution will occur on the terms contained in this release nor that Navios Containers’ listing will be achieved. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Vessel Acquisitions
On September 12, 2018, Navios Containers took delivery of Navios Miami, a 2009-built, 4,563 TEU containership. The vessel was acquired for a purchase price of $13.9 million. The acquisition of the vessel was financed with cash on the balance sheet and a new $9.0 million term loan facility. The facility has an amortization profile of 7 years, matures in September 2023 and bears interest at LIBOR plus 300 bps per annum.
Fleet capacity has grown from 21 to 26 vessels since the end of 2017, representing a fleet capacity growth of 40% during the period.
Sale and Leaseback Transaction - Refinancing Existing Credit Facilities – Extending Maturities to 2023
As previously announced, on May 25, 2018, Navios Containers entered into a $119.0 million sale and leaseback transaction with Minsheng Financial Leasing Co. Ltd. in order to refinance the outstanding credit facilities of 18 vessels maturing in the fourth quarter of 2019, with a combined balance of $92.4 million outstanding on March 31, 2018. On June 29, 2018, the Company completed the sale and leaseback of the first six vessels for approximately $37.5 million. On July 27, 2018 and on August 29, 2018, the Company completed the sale and leaseback of four additional vessels for approximately $26.0 million. Navios Containers expects to complete the sale and leaseback of the remaining eight vessels during the fourth quarter of 2018. Upon completion of the sale and leaseback transaction, Navios Containers will be obligated to make 60 monthly payments in respect of all 18 vessels of approximately $1.4 million each. Navios Containers also has an obligation to purchase the vessels at the end of the fifth year for $59.5 million. No assurances can be provided that the Company will successfully refinance these credit facilities in full or that the terms will be as described in this press release.
Fleet Development
Navios Containers owns a fleet of 26 vessels totaling 124,101 TEU. The current average age of the fleet is 10.5 years (See Exhibit II). As of October 31, 2018, Navios Containers has chartered-out 88.9% and 34.2% of available days for the remaining three months of 2018 and for 2019, respectively, which are expected to generate $33.2 million and $66.6 million in revenue, respectively. The average expected daily charter-out rate for the fleet is $15,900 and $20,481 for the remaining three months of 2018 and for 2019, respectively and the total expected available days for the remaining three months of 2018 and for 2019, are 2,351 days and 9,490 days, respectively.
Earnings Highlights
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share are non-U.S. GAAP financial measures and should not be used in isolation or as substitute for Navios Containers’ results calculated in accordance with U.S. GAAP. See Exhibit I under the heading, “Disclosure of Non-GAAP Financial Measures,” for a discussion of EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share of Navios Containers and a reconciliation of such measures to the most comparable measures calculated under U.S. GAAP.
Third Quarter 2018 and 2017 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):
The information for the third quarter 2018 and 2017 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
| Three Month Period Ended September 30, 2018 |
Three Month Period Ended September 30, 2017 |
|||||
| (unaudited) | (unaudited) | |||||
| Revenue | $ | 38,080 | $ | 14,757 | ||
| Net Income | $ | 5,414 | $ | 84 | ||
| Adjusted Net Income | $ | 7,810(1) | $ | 531(2) | ||
| Net cash provided by operating activities | $ | 18,261 | $ | 444 | ||
| EBITDA | $ | 19,236 | $ | 6,511 | ||
| Adjusted EBITDA | $ | 21,632(1) | $ | 6,958(2) | ||
| Basic Earnings per Share | $ | 0.16 | $ | 0.01 | ||
| Adjusted Basic Earnings per Share | $ | 0.23(1) | $ | 0.04(2) | ||
(1) Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share for the three months ended September 30, 2018 exclude $2.4 million of expenses relating to the Company’s efforts to list on a U.S. exchange.
(2) Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share for the three months ended September 30, 2017 exclude $0.4 million relating to the reactivation costs of four laid-up vessels.
Revenue for the three month period ended September 30, 2018 was $38.1 million, as compared to $14.8 million for the same period during 2017. The increase of $23.3 million is due to the increase in the number of vessels operating during the three month period ended September 30, 2018 and the resulting increase in the number of available days from 862 days for the three month period ended September 30, 2017, to 2,242 days for the three month period ended September 30, 2018.
Net income for the three months ended September 30, 2018 was $5.4 million compared to $0.1 million for the same period in 2017. Net Income was affected by items described in the table above. Excluding these items, Adjusted Net Income of Navios Containers for the three months ended September 30, 2018 was $7.8 million, as compared to $0.5 million for the same period in 2017.The $7.3 million increase in Adjusted Net income was mainly attributable to an increase in revenue of $23.3 million reflecting the growth in the number of vessels operating in the fleet during the period and a $0.9 million increase in other income mainly attributable to settlement of outstanding claims, partially offset by (i) a $7.9 million increase in management fees; (ii) a $0.9 million increase in general and administrative expenses; (iii) a $0.7 million increase in time charter and voyage expenses; (iv) a $4.5 million increase in depreciation and amortization; (v) a $2.6 million increase in interest expense and finance cost, net related to the financing of new vessels; and (vi) a $0.3 million increase in amortization of deferred drydock and special survey costs, in each case, relating to the increase in the size of the fleet.
Adjusted EBITDA for the three months ended September 30, 2018 increased by $14.6 million to $21.6 million as compared to $7.0 million for the same period in 2017.
Nine Months Ended September 30, 2018 and period from April 28, 2017 (date of inception) to September 30, 2017 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):
The information for the nine month period ended September 30, 2018 and for the period from April 28, 2017 (date of inception) to September 30, 2017 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
| Nine Month Period Ended September 30, 2018 |
Period from April 28, 2017 (date of inception) to September 30, 2017 |
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| (unaudited) | (unaudited) | ||||||
| Revenue | $ | 99,505 | $ | 17,859 | |||
| Net Income | $ | 12,942 | $ | 965 | |||
| Adjusted Net Income | $ | 15,338(1) | $ | 1,412(2) | |||
| Net cash provided by/(used in) operating activities | $ | 37,874 | $ | (1,047 | ) | ||
| EBITDA | $ | 51,599 | $ | 8,792 | |||
| Adjusted EBITDA | $ | 53,995(1) | $ | 9,239(2) | |||
| Basic Earnings per Share | $ | 0.39 | $ | 0.08 | |||
| Adjusted Basic Earnings per Share | $ | 0.46(1) | $ | 0.11(2) | |||
(1) Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share for the nine months ended September 30, 2018 exclude $2.4 million of expenses relating to the Company’s efforts to list on a U.S. exchange.
(2) Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Share for the period from April 28, 2017 (date of inception) to September 30, 2017 exclude $0.4 million relating to the reactivation costs of four laid-up vessels.
Revenue for the nine month period ended September 30, 2018 was $99.5 million, as compared to $17.9 million for the period from April 28, 2017 (date of inception) to September 30, 2017. The increase of $81.6 million is mainly due to the increase in the number of vessels operating during the nine month period ended September 30, 2018 and the resulting increase in the number of available days from 977 for the period from April 28, 2017 (date of inception) to September 30, 2017, to 6,161 for the nine month period ended September 30, 2018.
Net income for the nine months ended September 30, 2018 was $12.9 million compared to $1.0 million for the period from April 28, 2017 (date of inception) to September 30, 2017. Net Income was affected by items described in the table above. Excluding these items, Adjusted Net Income of Navios Containers for the nine months ended September 30, 2018 was $15.3 million, as compared to $1.4 million for the period from April 28, 2017 (date of inception) to September 30, 2017. The $13.9 million increase in Adjusted Net income was mainly attributable to an increase in revenue of $81.6 million, reflecting the growth in the number of vessels operating in the fleet during the period and a $0.9 million increase in other income mainly attributable to settlement of outstanding claims, partially offset by (i) a $31.3 million increase in management fees; (ii) a $4.2 million increase in general and administrative expenses mainly due to the increase of the available days from 977 as at September 30, 2017 to 6,161 as at September 30, 2018; (iii) a $2.3 million increase in time charter and voyage expenses; (iv) a $23.6 million increase in depreciation and amortization; (v) a $6.5 million increase in interest expense and finance cost, net related to the financing of new vessels; and (vi) a $0.7 million increase in amortization of deferred drydock and special survey costs, in each case, relating to the increase in the size of the fleet.
Adjusted EBITDA for the nine months ended September 30, 2018 increased by $44.8 million to $54.0 million as compared to $9.2 million for the period from April 28, 2017 (date of inception) to September 30, 2017.
Fleet Summary Data:
The following table reflects certain key indicators indicative of the performance of the Navios Containers' operations and its fleet performance for the three month periods ended September 30, 2018 and 2017, the nine month period ended September 30, 2018 and for the period from which the vessels were delivered, June 8, 2017 through September 30, 2017.
| Three Month | Three Month | Nine Month | Period from | ||||||||||||||
| Period Ended | Period Ended | Period Ended | June 8, 2017 | ||||||||||||||
| September 30, 2018 | September 30, 2017 | September 30, 2018 | to September 30, 2017 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Available Days (1) | 2,242 | 862 | 6,161 | 977 | |||||||||||||
| Operating Days (2) | 2,218 | 801 | 6,075 | 916 | |||||||||||||
| Fleet Utilization (3) | 98.9 | % | 92.9 | % | 98.6 | % | 93.8 | % | |||||||||
| Vessels operating at period end | 26 | 14 | 26 | 14 | |||||||||||||
| TCE (4) | $ | 16,518 | $ | 16,724 | $ | 15,733 | $ | 17,930 | |||||||||
| (1) | Available days for the fleet are total calendar days the vessels were in Navios Containers' possession for the relevant period after subtracting off-hire days associated with major repairs, drydocking or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be 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 due to any reason, including unforeseen circumstances. 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 Containers' vessels were available for generating revenue, 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 a company's efficiency in finding suitable employment for its vessels. | |
| (4) | TCE is defined as voyage and time charter revenues less voyage expenses during a relevant period divided by the number of available days during the period. | |
