• Revenue
- $133.9 million for 2018; $34.4 million for Q4 2018
• Cash from operating activities
- $47.5 million for 2018; $9.6 million for Q4 2018
• Adjusted EBITDA
- $69.3 million for 2018; $15.3 million for Q4 2018
• $76.1 million investment in containerships since Q3 2018
- $52.5 million acquisition of one 10,000 TEU vessel
- $23.6 million acquisition of two 4,360 TEU vessels
• Fleet growth since 2017
- 72% increase in fleet capacity
- 43% in number of vessels (21 to 30)
• No debt maturities until 2022
MONACO, Jan. 30, 2019 (GLOBE NEWSWIRE) — Navios Maritime Containers L.P. (“Navios Containers” or the “Company”) (NASDAQ: NMCI), a growth vehicle dedicated to the container sector of the maritime industry, today reported financial results for the fourth quarter and year ended December 31, 2018.
Angeliki Frangou, Chairman and Chief Executive Officer, stated, “I am pleased with the results for the full year and fourth quarter of 2018. For the full year, Navios Containers reported $69.3 million of adjusted EBITDA and $17.7 million of adjusted net income. For the fourth quarter, we reported $15.3 million of adjusted EBITDA and $2.4 million of adjusted net income.”
Angeliki Frangou continued, “NMCI has grown its fleet to 30 containerships. Our investment in our fleet is split roughly equally into Baby Panamax and Neo Panamax vessels, offering an attractive mix of potential in cash yield and capital appreciation, as the Neo Panamaxes provide cash flow while our initial investment thesis in the Baby Panamax comes to fruition. “
HIGHLIGHTS — RECENT DEVELOPMENTS
Direct Listing on the Nasdaq Global Select Market
Navios Containers commenced trading on the Nasdaq Global Select Market on December 10, 2018 under the ticker symbol “NMCI”. The Nasdaq listing represents another important milestone that reflects the Company’s commitment to all its stakeholders.
Vessel Acquisitions
$52.5 million acquisition of one 10,000 TEU, 2011-built containership
In January 2019, Navios Containers exercised an option to acquire a 2011-built 10,000 TEU containership from an unrelated third party for a purchase price of $52.5 million. The containership is chartered out at a net rate of $26,325 per day until November 2020 and $27,300 per day until October 2021, and is expected to be delivered in the first quarter of 2019.
The acquisition is expected to be financed with a: (i) loan of up to $31.8 million from a commercial bank maturing in July 2023 and bearing interest at LIBOR plus 325 bps per annum; (ii) $15.0 million credit by the seller for a period until December 31, 2019 at a rate of 5.0% per annum; and (iii) cash on balance sheet.
Option to acquire one 10,000 TEU, 2011-built containership
Navios Containers entered into an agreement where it has the option to acquire one 2011-built 10,000 TEU containership from an unrelated third party for a purchase price of $52.5 million. The Company has until March 2019 to exercise the option and would expect to take delivery of the containership in the second quarter of 2019.
The acquisition is expected to be financed with a: (i) a loan of up to $31.8 million from a commercial bank maturing in July 2023 and bearing interest at LIBOR plus 325 bps per annum, (ii) $5.0 million credit by the seller and (iii) cash from balance sheet. The acquisition is subject to certain conditions, and there can be no assurances that this acquisition or the related financings will occur in whole or in part.
The two 10,000 TEU containerships are expected to contribute Vessel EBITDA of $13.1 million in the twelve month period following their respective deliveries, and an aggregate cumulative Vessel EBITDA of $38.5 million through their charter expirations.
Vessel EBITDA is calculated as follows: (i) revenue based on 360 days at the fixed net charter rate per day less (ii) operating expenses based on 365 days at $7,400 per day and (iii) general and administrative expenses based on 365 days at $685 per day.
Delivery of two 4,360 TEU containerships
In December 2018, Navios Containers took delivery of two 2010-built 4,360 TEU containerships, the Bahamas and the Bermuda. The containerships were acquired for a total purchase price of $23.6 million. The vessels were financed with the proceeds of a commercial bank loan described below and cash on balance sheet.
Following the above transactions Navios Containers has grown from 21 to 30 vessels since the end of 2017, including one containership to be delivered in Q1 of 2019 and the exercise of the option to acquire one additional 10,000 TEU containership. This represents a fleet capacity growth, on a TEU basis, of 72% during the period.
Financing Developments
Sale and leaseback transaction
On November 9, 2018 Navios Containers completed the sale and leaseback of four additional vessels with Minsheng Financial Leasing Co. Ltd. for approximately $26.7 million, as part of its previously announced sale and leaseback transaction.
In aggregate the Company has completed a $90.2 million sale and leaseback of 14 vessels. The sale and leaseback has an implied interest rate of 6.0%, a term of five years and an age adjusted amortization profile of 21 years. Navios Containers has the obligation to purchase the vessels at the end of the fifth year for a total amount of $45.1 million.
Refinancing and add-on of existing facility
In December 2018, Navios Containers entered into an agreement with a commercial bank for a $50.0 million loan to (i) refinance its existing 2019 maturities and (ii) to partially finance the acquisition of the two 4,360 TEU containerships delivered in December 2018. The new facility matures in 2022 and bears interest at Libor + 350 bps.
Following the completion of the sale and leaseback transactions and the new $50.0 million loan described above, the Company has no debt maturities until 2022.
Fleet Employment
Navios Containers owns a fleet of 30 vessels, including one containership of which we expect to take delivery in the first quarter of 2019 and assuming the exercise of the Company’s option to acquire one 10,000 TEU containership, totaling 152,821 TEU. The current average age of the fleet is 10.5 years (See Exhibit II). As of January 29, 2019, Navios Containers has chartered-out 45.4% and 14.5% of available days for 2019 and for 2020, respectively, which are expected to generate $91.4 million and $42.4 million in revenue, respectively. The average expected daily charter-out rate for the fleet is $18,654 and $26,609 for 2019 and for 2020, respectively, and the total expected available days for 2019 and for 2020, are 10,794 days and 10,980 days, respectively.
Earnings Highlights
For the following results and the selected financial data presented herein, Navios Containers has compiled consolidated statements of operations for the three month periods ended December 31, 2018 and 2017. The quarterly information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Earnings per common unit (basic and diluted) are non-U.S. GAAP financial measures and should not be used in isolation or as a substitute for Navios Containers’ results calculated in accordance with U.S. generally accepted accounting principles (“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 Net Earnings Per Common Unit (basic and diluted) of Navios Containers and a reconciliation of such measures to the most comparable measures calculated under U.S. GAAP.
On November 30, 2018, in connection with our listing on the Nasdaq Global Select Market, we converted into a limited partnership at a ratio of one common share of Navios Maritime Containers Inc. for each common unit of Navios Containers.
Fourth Quarter 2018 and 2017 Results:
The information for the fourth quarter 2018 and 2017 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
| Three Month Period Ended December 31, 2018 |
Three Month Period Ended December 31, 2017 |
|||||
| (in thousands of U.S. dollars, except per unit data) | (unaudited) | (unaudited) | ||||
| Revenue | $ | 34,416 | $ | 21,329 | ||
| Net (Loss)/Income | $ | (242 | ) | $ | 1,673 | |
| Adjusted Net Income | $ | 2,352 | (1) | $ | 1,673 | |
| Net cash provided by operating activities | $ | 9,635 | $ | 3,670 | ||
| EBITDA | $ | 12,663 | $ | 9,917 | ||
| Adjusted EBITDA | $ | 15,257 | (1) | $ | 9,917 | |
| Net (Loss)/Earnings per common unit (basic and diluted) | $ | (0.01 | ) | $ | 0.07 | |
| Adjusted Net Earnings per common unit (basic and diluted) | $ | 0.07 | (1) | $ | 0.07 | |
(1) Adjusted EBITDA, Adjusted Net Income and Adjusted Net Earnings per common unit (basic and diluted) for the three months ended December 31, 2018 exclude $2.6 million of expenses relating to the Company’s listing on a U.S. exchange.
Revenue for the three month period ended December 31, 2018 was $34.4 million, as compared to $21.3 million for the same period during 2017. The increase of $13.1 million was due to the increase in the number of vessels operating during the three month period ended December 31, 2018 and the resulting increase in the number of available days from 1,434 days for the three month period ended December 31, 2017, to 2,281 days for the three month period ended December 31, 2018.
Net Loss for the three months ended December 31, 2018 was $0.2 million compared to $1.7 million net income for the same period in 2017. Net Loss in the three months ended December 31, 2018 was impacted by expenses relating to the Company’s listing on a U.S. exchange. Excluding these expenses, Adjusted Net Income of Navios Containers for the three months ended December 31, 2018 was $2.4 million, as compared to $1.7 million for the same period in 2017. The $0.7 million increase in Adjusted Net income was mainly due to a $5.4 million increase in Adjusted EBITDA and was partially mitigated by a: (i) $3.0 million increase in interest expense and finance cost, net related to the financing of new vessels; (ii) $1.4 million increase in depreciation and amortization; and (iii) $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 December 31, 2018 increased by $5.4 million to $15.3 million as compared to $9.9 million for the same period in 2017. The increase in Adjusted EBITDA was primarily due to a $13.1 million increase in revenue described above reflecting the growth in the number of vessels operating in the fleet during the period and was partially offset by a: (i) $6.0 million increase in management fees mainly due to the increase of the available days from 1,434 days for the three month period ended December 31, 2017, to 2,281 days for the three month period ended December 31, 2018; (ii) $0.9 million increase in general and administrative expenses also mainly related to the growth in our fleet; (iii) $0.7 million increase in time charter and voyage expenses; and (iv) $0.1 million increase in other expenses.
Year Ended December 31, 2018 and period from April 28, 2017 (date of inception) to December 31, 2017 Results:
The information for the year ended December 31, 2018 and for the period from April 28, 2017 (date of inception) to December 31, 2017 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
| Year Ended December 31, 2018 |
Period from April 28, 2017 (date of inception) to December 31, 2017 |
||||||
| (in thousands of U.S. dollars, except per unit data) | (unaudited) | (unaudited) | |||||
| Revenue | $ | 133,921 | $ | 39,188 | |||
| Net Income | $ | 12,700 | $ | 2,638 | |||
| Adjusted Net Income | $ | 17,690 | (1) | $ | 3,085 | (2) | |
| Net cash provided by operating activities | $ | 47,509 | $ | 2,623 | |||
| EBITDA | $ | 64,262 | $ | 18,709 | |||
| Adjusted EBITDA | $ | 69,252 | (1) | $ | 19,156 | (2) | |
| Net Earnings per common unit (basic and diluted) | $ | 0.38 | $ | 0.14 | |||
| Adjusted Net Earnings per common unit (basic and diluted) | $ | 0.53 | (1) | $ | 0.17 | (2) | |
(1) Adjusted EBITDA, Adjusted Net Income and Adjusted Net Earnings per common unit (basic and diluted) for the year ended December 31, 2018 exclude $5.0 million of expenses relating to the Company’s listing on a U.S. exchange.
(2) Adjusted EBITDA, Adjusted Net Income and Adjusted Net Earnings per common unit (basic and diluted) for the period from April 28, 2017 (date of inception) to December 31, 2017 exclude $0.4 million relating to the reactivation costs of four laid-up vessels.
Revenue for the year ended December 31, 2018 was $133.9 million, as compared to $39.2 million for the period from April 28, 2017 (date of inception) to December 31, 2017. The increase of $94.7 million was mainly due to the increase in the number of vessels operating during the year ended December 31, 2018 and the resulting increase in the number of available days from 2,411 for the period from April 28, 2017 (date of inception) to December 31, 2017, to 8,442 for the year ended December 31, 2018.
Net income for the year ended December 31, 2018 was $12.7 million compared to $2.6 million for the period from April 28, 2017 (date of inception) to December 31, 2017. Net Income was affected by items described in the table above. Excluding these items, Adjusted Net Income of Navios Containers for the year ended December 31, 2018 was $17.7 million, as compared to $3.1 million for the period from April 28, 2017 (date of inception) to December 31, 2017. The $14.6 million increase in Adjusted Net income was mainly due to a $50.1 million increase in Adjusted EBITDA that was partially offset by a: (i) $25.0 million increase in depreciation and amortization; (ii) $9.4 million increase in interest expense and finance cost, net related to the financing of new vessels; and (iii) $1.1 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 year ended December 31, 2018 increased by $50.1 million to $69.3 million as compared to $19.2 million for the period from April 28, 2017 (date of inception) to December 31, 2017. The increase in Adjusted EBITDA was primarily due to (i) a $94.7 million increase in revenue reflecting the growth in the number of vessels operating in the fleet during the period; and (ii) a $0.7 million increase in other income mainly attributable to the settlement of outstanding claims. This overall increase of $95.4 million was partially offset by a: (i) $37.3 million increase in management fees mainly due to the increase of the available days from 2,411 for the period from April 28, 2017 (date of inception) to December 31, 2017, to 8,442 for the year ended December 31, 2018; (ii) $5.1 million increase in general and administrative expenses also mainly due to the growth in our fleet; and (iii) $2.9 million increase in time charter and voyage expenses.
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 December 31, 2018 and 2017, for the year ended December 31, 2018 and for the period from which the vessels were delivered, June 8, 2017 through December 31, 2017.
| Three Month | Three Month | Period from | ||||||||||||||
| Period Ended | Period Ended | Year Ended | June 8, 2017 | |||||||||||||
| December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
to December 31, 2017 |
|||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Available Days (1) | 2,281 | 1,434 | 8,442 | 2,411 | ||||||||||||
| Operating Days (2) | 2,267 | 1,352 | 8,342 | 2,268 | ||||||||||||
| Fleet Utilization (3) | 99.4 | % | 94.3 | % | 98.8 | % | 94.1 | % | ||||||||
| Vessels operating at period end | 28 | 21 | 28 | 21 | ||||||||||||
| TCE (4) | $ | 14,387 | $ | 14,232 | $ | 15,369 | $ | 15,730 | ||||||||
| (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 scheduled repairs or repairs under guarantee, vessel upgrades, 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. |
Conference Call:
As previously announced, Navios Containers will host a conference call today, January 30, 2019, at 8:30 am ET, at which time Navios Containers’ senior management will provide highlights and commentary on earnings results for the fourth quarter and year ended December 31, 2018.
A supplemental slide presentation will be available on the Navios Containers website at www.navios-containers.com under the “Investors” section at 8:00 am ET on the day of the call.
Conference Call details:
Call Date/Time: Wednesday, January 30, 2019 at 8:30 am ET
Call Title: Navios Containers Q4 2018 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 447 8726
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 447 8726
This call will be simultaneously Webcast. The Webcast will be available on the Navios Containers’ website, www.navios-containers.com under the “Investors” section. The Webcast will be archived and available at the same Web address for two weeks following the call.
About Navios Maritime Containers L.P.
Navios Maritime Containers L.P. is a growth-oriented international owner and operator of containerships. For more information, please visit our website at www.navios-containers.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 unitholders or make common unit repurchases from our unitholders; 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 Maritime Acquisition Corporation, Navios Maritime Partners L.P., and any one or more of their subsidiaries, including the wholly-owned subsidiary of Navios Maritime Holdings Inc. 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 unitholders; 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 units.
Contact:
Navios Maritime Containers L.P.
+1.212.906.8648
[email protected]
| EXHIBIT I | |||||||||||||||
| NAVIOS MARITIME CONTAINERS L.P. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (Expressed in thousands of U.S. dollars – except for unit and per unit data) | |||||||||||||||
| Three Month Period Ended December 31, 2018 |
Three Month Period Ended December 31, 2017 |
Year Ended December 31, 2018 |
Period from April 28, 2017 (date of inception) to December 31, 2017 |
||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Revenue | $ | 34,416 | $ | 21,329 | $ | 133,921 | 39,188 | ||||||||
| Time charter and voyage expenses | (1,605 | ) | (913 | ) | (4,178 | ) | (1,257 | ) | |||||||
| Direct vessel expenses | (499 | ) | (157 | ) | (1,314 | ) | (672 | ) | |||||||
| Management fees (entirely through related parties transactions) | (15,194 | ) | (9,211 | ) | (53,772 | ) | (16,488 | ) | |||||||
| General and administrative expenses | (2,206 | ) | (1,274 | ) | (7,413 | ) | (2,262 | ) | |||||||
| Listing transaction-related expenses | (2,594 | ) | – | (4,990 | ) | – | |||||||||
| Depreciation and amortization | (8,265 | ) | (6,908 | ) | (38,552 | ) | (13,578 | ) | |||||||
| Interest expense and finance cost, net | (4,140 | ) | (1,180 | ) | (11,695 | ) | (2,268 | ) | |||||||
| Other income/(expense), net | (155 | ) | (13 | ) | 693 | (25 | ) | ||||||||
| Net (loss)/income | $ | (242 | ) | $ | 1,673 | $ | 12,700 | $ | 2,638 | ||||||
| Net (loss)/earnings per unit, basic and diluted | $ | ( 0.01 | ) | $ | 0.07 | $ | 0.38 | $ | 0.14 | ||||||
| Weighted average number of units, basic and diluted | 34,603,100 | 25,195,985 | 33,527,135 | 18,371,855 | |||||||||||
| NAVIOS MARITIME CONTAINERS L.P. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Expressed in thousands of U.S. dollars – except for unit data) | |||||
| December 31, 2018 |
December 31, 2017 |
||||
| (unaudited) | (unaudited) | ||||
| ASSETS | |||||
| Cash and cash equivalents, including restricted cash | $ | 18,892 | $ | 14,501 | |
| Vessels and deferred dry dock and special survey costs, net | 354,079 | 181,179 | |||
| Other assets (including current and non-current) | 15,206 | 12,635 | |||
| Intangible assets | 25,350 | 58,496 | |||
| Total assets | $ | 413,527 | $ | 266,811 | |
| LIABILITIES AND PARTNERS’ CAPITAL | |||||
| Other current liabilities | $ | 12,093 | $ | 7,060 | |
| Current portion of long term borrowings, net | 35,291 | 42,499 | |||
| Long-term borrowings, net of current portion | 183,670 | 76,534 | |||
| Total Partners’ capital | 182,473 | 140,718 | |||
| Total liabilities and partners’ capital | $ | 413,527 | $ | 266,811 | |
Disclosure of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Earnings per Unit are “non-U.S. GAAP financial measures” and should not be used in isolation or considered substitutes for net income/(loss), 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/(loss) attributable to Navios Containers’ common unitholders 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 Unit represent Net Income/(loss) and Basic Earnings/(loss) per Unit, 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.
Reconciliation of EBITDA and Adjusted EBITDA to Cash from Operations
| Three Month Period Ended | December 31, 2018 |
December 31, 2017 |
|||||
| (in thousands of U.S. dollars) | (unaudited) | (unaudited) | |||||
| Net cash provided by operating activities | $ | 9,635 | $ | 3,670 | |||
| Net (decrease)/increase in operating assets | (1,194 | ) | 1,185 | ||||
| Net (increase)/decrease in operating liabilities | (4,521 | ) | 2,642 | ||||
| Net interest cost | 4,140 | 1,180 | |||||
| Deferred finance charges | (454 | ) | (231 | ) | |||
| Payments for drydock and special survey costs | 5,057 | 1,471 | |||||
| EBITDA | $ | 12,663 | $ | 9,917 | |||
| Listing transaction-related expenses | 2,594 | – | |||||
| Adjusted EBITDA | $ | 15,257 | $ | 9,917 | |||
| Three Month Period Ended (in thousands of U.S. dollars) |
December 31, 2018 |
December 31, 2017 |
|||||
| (unaudited) | (unaudited) | ||||||
| Net cash provided by operating activities | $ | 9,635 | $ | 3,670 | |||
| Net cash used in investing activities | $ | (25,895 | ) | $ | (129,157 | ) | |
| Net cash provided by financing activities | $ | 21,023 | $ | 109,587 | |||
| Year Ended | Period from April 28, 2017 |
||||||
| December 31, 2018 |
(date of inception) to December 31, 2017 |
||||||
| (in thousands of U.S. dollars) | (unaudited) | (unaudited) | |||||
| Net cash provided by operating activities | $ | 47,509 | $ | 2,623 | |||
| Net increase in operating assets | 2,572 | 12,142 | |||||
| Net increase in operating liabilities | (5,034 | ) | (1,701 | ) | |||
| Net interest cost | 11,695 | 2,268 | |||||
| Deferred finance charges | (1,598 | ) | (430 | ) | |||
| Payments for drydock and special survey costs | 9,118 | 3,807 | |||||
| EBITDA | $ | 64,262 | $ | 18,709 | |||
| Listing transaction-related expenses | 4,990 | – | |||||
| Re-activation cost | – | 447 | |||||
| Adjusted EBITDA | $ | 69,252 | $ | 19,156 | |||
| (in thousands of U.S. dollars) | Year Ended December 31, 2018 |
Period from April 28, 2017 (date of inception) to December 31, 2017 |
|||||
| (unaudited) | (unaudited) | ||||||
| Net cash provided by operating activities | $ | 47,509 | $ | 2,623 | |||
| Net cash used in investing activities | $ | (170,503 | ) | $ | (249,227 | ) | |
| Net cash provided by financing activities | $ | 127,385 | $ | 261,105 | |||
| 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(1) | 4,250 | 2007 | ||||
| Navios Indigo(1) | 4,250 | 2007 | ||||
| Navios Vermilion(1) | 4,250 | 2007 | ||||
| Navios Verde(1) | 4,250 | 2007 | ||||
| Navios Amarillo(1) | 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(1) | 4,250 | 2009 | ||||
| Navios Destiny(1) (ex 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 | ||||
| Bahamas | 4,360 | 2010 | ||||
| Bermuda | 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 | ||||
| Vessel to be delivered | ||||||
| TBN 1 | 10,000 | 2011 | ||||
|
Vessel Underlying Purchase Option
|
||||||
| Vessel Name | TEU | Year Built |
||||
| TBN 2 | 10,000 | 2011 |
(1) The vessel is subject to a sale and leaseback transaction for a period of up to five years, at which time Navios Containers has an obligation to purchase the vessel.
