- $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, Nov. 08, 2018 (GLOBE NEWSWIRE) — Navios Maritime Containers Inc. (“Navios Containers” or the “Company”) (N-OTC: NMCI), a growth vehicle dedicated to the container sector of the maritime industry, today 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 |
||||||
| (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. | |
About Navios Maritime Containers Inc.
Navios Maritime Containers Inc. (N-OTC: NMCI) is a growth vehicle dedicated to the container sector of the maritime industry. For more information, please visit its website at www.navios-containers.com.
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 its website at www.navios-mlp.com.
Forward Looking Statements – Safe Harbor
This press release contains forward-looking statements concerning future events, including future contracted revenues and rates, EBITDA, future available days, future financial performance of the fleet, timing of vessel deliveries, vessel acquisitions, financing activities, and Navios Containers’ growth strategy and measures to implement such strategy, including future vessel acquisitions and the ability to secure or refinance related financing, the further growth of our containership fleet, 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 Containers at the time these statements were made. Although Navios Containers 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 known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Containers. 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: the favorable timing for acquisitions and chartering opportunities in the container shipping sector and Navios Containers’ ability to take advantage of such opportunities; the value of container shipping vessels; Navios Containers’ ability to identify container shipping vessels for acquisition at attractive prices, if at all, including the availability of distressed acquisition opportunities in the container shipping industry; Navios Containers’ ability to execute on a low-cost operating structure; Navios Containers’ ability to achieve a return on investment for and to pay cash distributions to our shareholders or make common share repurchases from our shareholders; the level of trade growth and recovery of charter rates and asset values in the container shipping industry; general market conditions and shipping industry trends, including charter rates, vessel values and the future supply of, and demand for, ocean-going containership shipping services; any advantages resulting from Navios Containers’ strategic focus on intermediate-size containerships; Navios Containers’ ability to leverage the scale, experience, reputation and relationships of the Navios Group, consisting of Navios Maritime Holdings Inc. (“Navios Holdings”), Navios Maritime Acquisition Corporation, Navios Partners, Navios Maritime Midstream Partners L.P., and any one or more of their subsidiaries, including the wholly-owned subsidiary of Navios Holdings which manages the commercial and technical operation of Navios Containers’ fleet pursuant to a management agreement (the “Manager”); Navios Containers’ ability to maintain or develop new and existing customer relationships with existing charterers and new customers, including liner companies; Navios Containers’ ability to successfully grow its business and its capacity to manage its expanding business; future levels of dividends, as well as Navios Containers’ dividend policy; Navios Containers’ current and future competitive strengths and business strategies and other plans and objectives for future operations; Navios Containers’ future operating and financial results, its ability to identify and consummate desirable fleet acquisitions, business strategy, areas of possible expansion and expected capital expenditure or operating expenses; container shipping industry trends, including charter rates and vessel values and factors affecting vessel supply and demand as well as trends and conditions in the newbuilding markets and scrapping of vessels; Navios Containers’ future financial condition or results of operations and its future revenues and expenses, including its estimated adjusted cash flow; the loss of any customer or charter or vessel; the aging of Navios Containers’ vessels and resultant increases in operation and drydocking costs; the ability of Navios Containers’ vessels to pass classification, security and customs inspections; significant changes in vessel performance, including increased equipment breakdowns; the creditworthiness of Navios Containers’ charterers and the ability of its contract counterparties to fulfill their obligations to Navios Containers; Navios Containers’ ability to maintain long-term relationships with major liner companies; Navios Containers’ ability to retain key executive officers and the Manager’s ability to attract and retain skilled employees; Navios Containers’ ability to access debt, credit and equity markets; changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors; Navios Containers’ ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for its vessels, in each case, at commercially acceptable rates or at all; estimated future acquisition, maintenance and replacement expenditures; potential liability from litigation and our vessel operations, including discharge of pollutants; Navios Containers’ and the Navios Group’s performance in safety, environmental and regulatory matters; global economic outlook and growth and changes in general economic and business conditions; general domestic and international political conditions, including wars, acts of piracy and terrorism; changes in production of or demand for container shipments, either globally or in particular regions; changes in the standard of service or the ability of the Manager to be approved as required; increases in costs and expenses, including but not limited to, crew wages, insurance, technical maintenance costs, spares, stores and supplies, charter brokerage commissions on gross voyage revenues and general and administrative expenses; the adequacy of Navios Containers’ insurance arrangements and its ability to obtain insurance and required certifications; the expected cost of, and Navios Containers’ ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by its charterers applicable to its business; the changes to the regulatory requirements applicable to the shipping and container transportation industry, including, without limitation, stricter requirements adopted by international organizations, such as the International Maritime Organization and the European Union, or by individual countries or charterers and actions taken by regulatory authorities and governing such areas as safety and environmental compliance; the anticipated taxation of Navios Containers and its shareholders; potential liability and costs due to environmental, safety and other incidents involving Navios Containers’ vessels; and the effects of increasing emphasis on environmental and safety concerns by customers, governments and others, as well as changes in maritime regulations and standards. Navios Containers 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 Containers’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Containers makes no prediction or statement about the performance of its common stock.
Contact:
Navios Maritime Containers Inc.
+1.212.906.8648
[email protected]
| EXHIBIT I | |||||||||||||||||
| NAVIOS MARITIME CONTAINERS INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| (Expressed in thousands of U.S. dollars – except for share and per share data) | |||||||||||||||||
| Three Month Period Ended September 30, 2018 |
Three Month Period Ended September 30, 2017 |
Nine Month Period Ended September 30, 2018 |
Period from April 28, 2017(date of inception) to September 30, 2017 |
||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Revenue | $ | 38,080 | $ | 14,757 | $ | 99,505 | $ | 17,859 | |||||||||
| Time charter and voyage expenses | (1,048 | ) | (343 | ) | (2,573 | ) | (343 | ) | |||||||||
| Direct vessel expenses | (355 | )) | (515 | ) | (815 | ) | (515 | ) | |||||||||
| Management fees (entirely through related parties transactions) | (14,490 | ) | (6,576 | ) | (38,578 | ) | (7,277 | ) | |||||||||
| General and administrative expenses | (1,847 | ) | (870 | ) | (5,207 | ) | (987 | ) | |||||||||
| Listing transaction-related expenses | (2,396 | ) | – | (2,396 | ) | – | |||||||||||
| Depreciation and amortization | (9,850 | ) | (5,351 | ) | (30,287 | ) | (6,671 | ) | |||||||||
| Interest expense and finance cost, net | (3,617 | ) | (1,007 | ) | (7,555 | ) | (1,088 | ) | |||||||||
| Other income/(expense), net | 937 | (11 | ) | 848 | (13 | ) | |||||||||||
| Net income | $ | 5,414 | $ | 84 | $ | 12,942 | $ | 965 | |||||||||
| Net earnings per share, basic and diluted | $ | 0.16 | $ | 0.01 | $ | 0.39 | 0.08 | ||||||||||
| Weighted average number of share, basic and diluted | 34,603,100 | 13,535,906 | 33,164,538 | 12,864,663 | |||||||||||||
| NAVIOS MARITIME CONTAINERS INC. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Expressed in thousands of U.S. dollars – except for share data) | |||||
| September 30, 2018 |
December 31, 2017 |
||||
| (unaudited) | |||||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | $ | 13,787 | $ | 14,221 | |
| Restricted Cash | 342 | 280 | |||
| Accounts receivable, net | 2,517 | 642 | |||
| Balance due from related parties, current | 5,132 | 5,643 | |||
| Inventories | 305 | 536 | |||
| Prepaid and other current assets | 360 | 49 | |||
| Total current assets | 22,443 | 21,371 | |||
| Non-current assets | |||||
| Vessels, net | 318,746 | 177,597 | |||
| Intangible Assets | 31,668 | 58,496 | |||
| Deferred dry dock and special survey costs, net | 6,828 | 3,582 | |||
| Balance due from related parties, non-current | 7,313 | 5,765 | |||
| Other long term assets | 774 | – | |||
| Total non-current assets | 365,329 | 245,440 | |||
| Total assets | $ | 387,772 | $ | 266,811 | |
| LIABILITIES AND PARTNERS’ CAPITAL | |||||
| Current liabilities | |||||
| Accounts payable | $ | 1,682 | $ | 582 | |
| Accrued expenses | 2,973 | 3,934 | |||
| Deferred income and cash received in advance | 2,918 | 2,544 | |||
| Financial liability short term, net | 5,332 | – | |||
| Current portion of long-term debt, net | 41,677 | 42,499 | |||
| Total current liabilities | 54,582 | 49,559 | |||
| Non-current liabilities | |||||
| Long-term financial liability, net of current portion | 55,776 | – | |||
| Long-term debt, net of current portion | 94,699 | 76,534 | |||
| Total non-current liabilities | 150,475 | 76,534 | |||
| Total liabilities | $ | 205,057 | $ | 126,093 | |
| Commitments and contingencies | |||||
| Stockholders’ equity | |||||
| Common stock — $0.0001 par value, 75,000,000 authorized registered ordinary shares, 34,603,100 and 29,148,554 issued and outstanding as of September 30, 2018 and December 31, 2017 | 3 | 3 | |||
| Additional paid-in capital | 167,132 | 138,077 | |||
| Retained earnings | 15,580 | 2,638 | |||
| Total stockholders’ equity | 182,715 | 140,718 | |||
| Total liabilities and stockholders’ equity | $ | 387,772 | $ | 266,811 | |
| NAVIOS MARITIME CONTAINERS INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Expressed in thousands of U.S. dollars – except for share data) | ||||||||||
| Nine Month Period Ended September 30, 2018 (unaudited) |
Period from April 28, 2017 (date of inception) to September 30, 2017 (unaudited) |
|||||||||
| OPERATING ACTIVITIES: | ||||||||||
| Net income | $ | 12,942 | $ | 965 | ||||||
| Adjustments to reconcile net income to net cash provided by /(used in) operating activities: | ||||||||||
| Depreciation and amortization | 30,287 | 6,671 | ||||||||
| Amortization of deferred financing costs | 1,144 | 199 | ||||||||
| Amortization of deferred drydock and special survey costs | 815 | 68 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Increase in accounts receivable | (1,875 | ) | (1,286 | ) | ||||||
| Decrease/(increase) in balance due from related companies, current | 511 | (3,169 | ) | |||||||
| Decrease/(increase) in inventories | 231 | (330 | ) | |||||||
| Increase in prepaid and other current assets | (311 | ) | (9 | ) | ||||||
| Increase in balance due from related companies, non-current | (1,548 | ) | (6,163 | ) | ||||||
| Increase in other long term assets | (774 | ) | – | |||||||
| Increase in accounts payable | 1,100 | 1,822 | ||||||||
| Increase/(decrease) in accrued expenses | (961 | ) | 3,398 | |||||||
| Payments for drydock and special survey costs | (4,061 | ) | (2,336 | ) | ||||||
| Increase/(decrease) in due to related companies | – | (420 | ) | |||||||
| Increase/(decrease) in deferred income and cash received in advance | 374 | (457 | ) | |||||||
| Net cash provided by/(used in) operating activities | $ | 37,874 | $ | (1,047 | ) | |||||
| INVESTING ACTIVITIES: | ||||||||||
| Cash acquired through asset acquisition | – | 5,433 | ||||||||
| Acquisition of vessels and time charters at favorable terms | (144,608 | ) | (125,503 | ) | ||||||
| Net cash used in investing activities | $ | (144,608 | ) | $ | (120,070 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||||
| Repayment of long term debt and financial liability | (59,656 | ) | (3,750 | ) | ||||||
| Proceeds from long-term debt and financial liability | 139,500 | 60,685 | ||||||||
| Debt issuance costs | (2,537 | ) | (720 | ) | ||||||
| Proceeds from issuance of common shares, net of offering costs | 29,055 | 95,303 | ||||||||
| Net cash provided by financing activities | 106,362 | 151,518 | ||||||||
| (Decrease)/Increase in cash and cash equivalents and restricted cash | (372 | ) | 30,401 | |||||||
| Cash and cash equivalents and restricted cash, beginning of period | 14,501 | – | ||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 14,129 | $ | 30,401 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
| Cash paid for interest, net | $ | 6,437 | $ | 502 |
| NAVIOS MARITIME CONTAINERS INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||
| (Expressed in thousands of U.S. dollars — except for share data) | |||||||||||||||||
| Number of Common Shares |
Common Stock |
Additional Paid-in |
Retained Earnings |
Total Stockholders’ Equity |
|||||||||||||
| Balance April 28, 2017 (date of inception) | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Proceeds from private placements, net of offering costs | 20,057,645 | 2 | 95,301 | – | 95,303 | ||||||||||||
| Deemed distribution | – | – | (4,423 | ) | – | (4,423 | ) | ||||||||||
| Net income | – | – | – | 965 | 965 | ||||||||||||
| Balance September 30, 2017 (unaudited) | 20,057,645 | $ | 2 | $ | 90,878 | $ | 965 | $ | 91,845 | ||||||||
| Balance December 31, 2017 | 29,148,554 | $ | 3 | $ | 138,077 | $ | 2,638 | $ | 140,718 | ||||||||
| Proceeds from private placements, net of offering costs | 5,454,546 | – | 29,055 | – | 29,055 | ||||||||||||
| Net income | – | – | – | 12,942 | 12,942 | ||||||||||||
| Balance September 30, 2018 (unaudited) | 34,603,100 | $ | 3 | $ | 167,132 | $ | 15,580 | $ | 182,715 | ||||||||
Disclosure of Non-GAAP Financial Measures
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 considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with generally accepted accounting principles in the United States.
EBITDA represents net income before interest and finance costs, before depreciation and amortization. Adjusted EBITDA represents EBITDA, excluding certain items as described under “Earnings Highlights”. Adjusted Net Income and Adjusted Basic Earnings per Share represent Net Income and Basic Earnings per Share, excluding certain items as described under “Earnings Highlights”. Navios Containers use EBITDA and Adjusted EBITDA as liquidity measures and reconcile EBITDA and Adjusted EBITDA to net cash provided by/(used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA 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 increase/(decrease) in operating assets, (ii) net (increase)/decrease in operating liabilities, (iii) net interest cost, (iv) deferred finance charges and (v) payments for drydock and special survey costs. Navios Containers believes that EBITDA and Adjusted EBITDA are a basis upon which liquidity can be assessed and represents useful information to investors regarding Navios Containers’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Containers also believes that EBITDA and Adjusted EBITDA are used (i) by prospective and current lessors as well as 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.
EBITDA and Adjusted EBITDA are presented to provide additional information with respect to the ability of Navios Containers to satisfy its respective obligations, including debt service, capital expenditures, working capital requirements and pay dividends. While EBITDA and Adjusted EBITDA are frequently used as measures of operating results and the ability to meet debt service requirements, the definitions of EBITDA and Adjusted EBITDA used here may not be comparable to those used by other companies due to differences in methods of calculation.
EBITDA and Adjusted EBITDA have limitations as analytical tools, and therefore, should not be considered in isolation or as a substitute for the analysis of Navios Containers’ 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; (ii) EBITDA and Adjusted EBITDA do not reflect the amounts necessary to service interest or principal payments on our debt and other financing arrangements; and (iii) 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, among others, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Containers’ 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.
Navios Containers Reconciliation of EBITDA and Adjusted EBITDA to Cash from Operations
| Three Months Ended | September 30, 2018 |
September 30, 2017 |
|||||||
| (in thousands of U.S. dollars) | (unaudited) | (unaudited) | |||||||
| Net cash provided by operating activities | $ | 18,261 | $ | 444 | |||||
| Net (decrease)/increase in operating assets | (4,681 | ) | 6,747 | ||||||
| Net decrease/(increase) in operating liabilities | 217 | (3,824 | ) | ||||||
| Net interest cost | 3,617 | 1,007 | |||||||
| Deferred finance charges | (618 | ) | (199 | ) | |||||
| Payments for drydock and special survey costs | 2,440 | 2,336 | |||||||
| EBITDA | $ | 19,236 | $ | 6,511 | |||||
| Write-off of transaction expenses | 2,396 | – | |||||||
| Re-activation cost | – | 447 | |||||||
| Adjusted EBITDA | $ | 21,632 | $ | 6,958 | |||||
| Three Month Period Ended (in thousands of U.S. dollars) |
September 30, 2018 |
September 30, 2017 |
|||||
| (unaudited) | (unaudited) | ||||||
| Net cash provided by operating activities | $ | 18,261 | $ | 444 | |||
| Net cash used in investing activities | $ | (81,434 | ) | $ | (75,503 | ) | |
| Net cash provided by financing activities | $ | 36,202 | $ | 70,524 | |||
| Period from April 28, 2017 |
|||||||||
| Nine Months Ended | September 30, 2018 |
(date of inception) to September 30, 2017 |
|||||||
| (in thousands of U.S. dollars) | (unaudited) | (unaudited) | |||||||
| Net cash provided by/ (used in) operating activities | $ | 37,874 | $ | (1,047 | ) | ||||
| Net increase in operating assets | 3,766 | 10,957 | |||||||
| Net increase in operating liabilities | (513 | ) | (4,343 | ) | |||||
| Net interest cost | 7,555 | 1,088 | |||||||
| Deferred finance charges | (1,144 | ) | (199 | ) | |||||
| Payments for drydock and special survey costs | 4,061 | 2,336 | |||||||
| EBITDA | $ | 51,599 | $ | 8,792 | |||||
| Write-off of transaction expenses | 2,396 | – | |||||||
| Re-activation cost | – | 447 | |||||||
| Adjusted EBITDA | $ | 53,995 | $ | 9,239 | |||||
| Nine Month Period Ended (in thousands of U.S. dollars) |
September 30, 2018 |
Period from April 28, 2017 (date of inception) to September 30, 2017 |
|||||
| (unaudited) | (unaudited) | ||||||
| Net cash provided by/ (used in) operating activities | $ | 37,874 | $ | (1,047 | ) | ||
| Net cash used in investing activities | $ | (144,608 | ) | $ | (120,070 | ) | |
| Net cash provided by financing activities | $ | 106,362 | $ | 151,518 | |||
| EXHIBIT II | ||||||
| Owned Vessels | ||||||
| Vessel Name | TEU | Year Built |
||||
| Navios Summer(1) | 3,450 | 2006 | ||||
| Navios Verano(1) | 3,450 | 2006 | ||||
| Navios Spring(1) | 3,450 | 2007 | ||||
| Navios Amaranth | 4,250 | 2007 | ||||
| Navios Indigo(1) | 4,250 | 2007 | ||||
| Navios Vermilion(1) | 4,250 | 2007 | ||||
| Navios Verde(1) | 4,250 | 2007 | ||||
| Navios Amarillo | 4,250 | 2007 | ||||
| Navios Azure(1) | 4,250 | 2007 | ||||
| Navios Domino(1) (ex MOL Dominance) | 4,250 | 2008 | ||||
| Navios Delight(1) (ex MOL Delight) | 4,250 | 2008 | ||||
| Navios Dedication(1) (ex MOL Dedication) | 4,250 | 2008 | ||||
| MOL Devotion | 4,250 | 2009 | ||||
| MOL Destiny | 4,250 | 2009 | ||||
| Navios Lapis | 4,250 | 2009 | ||||
| Navios Tempo | 4,250 | 2009 | ||||
| Niledutch Okapi (ex Navios Dorado) | 4,250 | 2010 | ||||
| Navios Felicitas | 4,360 | 2010 | ||||
| Navios Miami | 4,563 | 2009 | ||||
| APL Oakland | 4,730 | 2008 | ||||
| APL Los Angeles | 4,730 | 2008 | ||||
| APL Denver | 4,730 | 2008 | ||||
| APL Atlanta | 4,730 | 2008 | ||||
| YM Utmost | 8,204 | 2006 | ||||
| Navios Unite (ex YM Unity) | 8,204 | 2006 | ||||
| Navios Unison | 10,000 | 2010 | ||||
(1) The vessel is subject to a sale and leaseback transaction with Minsheng Financial Leasing Co. Ltd. for a period of up to five years, at which time Navios Containers has an obligation to purchase the vessel.
