Second Quarter and Year To Date Highlights
- Reported operating revenues of
- Reported net income available to common shareholders of
- Generated
- Took delivery on
Mr. Webber added, “Despite concerns around global trade tensions, the charter rates and asset values for the mid-sized and smaller containership segments - which remain the focus of GSL’s fleet - have continued to strengthen significantly in 2018 on the back of positive supply/demand fundamentals. We maintain our long-expressed thesis that these fleet segments hold the best upside prospects and continue to explore opportunities to grow our fleet on an accretive, highly disciplined basis for the benefit of our shareholders.”
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
Three | Three | Six | Six | |||||
months ended |
months ended |
months ended |
months ended |
|||||
June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
|||||
Revenue | 35,009 | 40,259 | 71,111 | 79,901 | ||||
Operating Income | 15,194 | 18,531 | 30,685 | 36,965 | ||||
Net Income for Common Shareholders | 4,020 | 6,824 | 8,212 | 13,618 | ||||
Adjusted EBITDA (1) | 23,367 | 28,072 | 47,014 | 56,106 | ||||
Normalized Net Income (1) | 4,020 | 7,344 | 8,212 | 14,138 |
(1) Adjusted EBITDA and Normalized net income are non-US Generally Accepted Accounting Principles (US GAAP) measures, as explained further in this press release, and are considered by
Revenue and Utilization
The GSL Valerie was delivered on
For the six months ended
The table below shows fleet utilization for the three and six months ended
Three months ended | Six months ended | ||||||||
June 30, | June 30, | June 30, | June 30, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | ||
Days | 2018 | 2017 | 2018 | 2017 | 2017 | 2016 | 2015 | 2014 | |
Ownership days | 1,651 | 1,638 | 3,271 | 3,258 | 6,570 | 6,588 | 6,893 | 6,270 | |
Planned offhire - scheduled dry-dock |
(18) | (15) | (31) | (62) | (62) | (100) | (9) | (48) | |
Unplanned offhire | (3) | (27) | (7) | (30) | (40) | (3) | (7) | (12) | |
Idle time | (13) | 0 | (13) | 0 | 0 | 0 | (13) | (64) | |
Operating days | 1,617 | 1,596 | 3,220 | 3,166 | 6,468 | 6,485 | 6,864 | 6,146 | |
Utilization | 97.9% | 97.4% | 98.4% | 97.2% | 98.4% | 98.4% | 99.6% | 98.0% |
In the three months ended
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, as well as bunker fuel when a vessel is offhire or without a charter, were
For the six months ended
Depreciation
Depreciation for the three months ended
Depreciation for the six months ended
General and Administrative Costs
General and administrative costs were
For the six months ended
Other Operating Income
Other operating income in the three months ended
For the six months ended
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was
Adjusted EBITDA for the six months ended
Interest Expense
Debt at
Debt at
Interest expense for the three months ended
For the six months ended
Interest income for the three months ended
Interest income for the six months ended
Taxation
Taxation for the three months ended
Taxation for the six months ended
Earnings Allocated to Preferred Shares
The Series B preferred shares, issued on
Net Income Available to Common Shareholders
Net income available to common shareholders for the three months ended
Normalized net income was the same as that reported at
Net income available to common shareholders was
Fleet
The following table provides information about the on-the-water fleet of 19 vessels as at
Remaining | Earliest | Daily | ||||
Charter | Charter | Charter | ||||
Vessel | Capacity | Year | Purchase | Term (2) | Expiry | Rate |
Name | in TEUs (1) | Built | by GSL | (years) | Date | $ |
CMA CGM Matisse | 2,262 | 1999 | Dec 2007 | 1.5 | Sept 21, 2019 | 15,300 |
CMA CGM Utrillo | 2,262 | 1999 | Dec 2007 | 1.4 | Sept 11, 2019 | 15,300 |
Delmas Keta | 2,207 | 2003 | Dec 2007 | 0.2 | Aug 6, 2018 | 7,800 |
Julie Delmas | 2,207 | 2002 | Dec 2007 | 0.2 | Jul 28, 2018 | 7,800 |
Kumasi | 2,207 | 2002 | Dec 2007 | 0.5 – 2.5(3) | Nov 16, 2018 | 9,800 |
Marie Delmas | 2,207 | 2002 | Dec 2007 | 0.5 - 2.5(3) | Nov 16, 2018 | 9,800 |
CMA CGM La Tour | 2,272 | 2001 | Dec 2007 | 1.5 | Sept 20, 2019 | 15,300 |
CMA CGM Manet | 2,272 | 2001 | Dec 2007 | 1.4 | Sept 7, 2019 | 15,300 |
CMA CGM Alcazar | 5,089 | 2007 | Jan 2008 | 2.6 | Oct 18, 2020 | 33,750 |
CMA CGM Château d’If | 5,089 | 2007 | Jan 2008 | 2.5 | Oct 11, 2020 | 33,750 |
CMA CGM Thalassa | 11,040 | 2008 | Dec 2008 | 7.5 | Oct 1, 2025 | 47,200 |
CMA CGM Jamaica | 4,298 | 2006 | Dec 2008 | 4.5 | Sept 17, 2022 | 25,350 |
CMA CGM Sambhar | 4,045 | 2006 | Dec 2008 | 4.5 | Sept 16, 2022 | 25,350 |
CMA CGM America | 4,045 | 2006 | Dec 2008 | 4.5 | Sept 19, 2022 | 25,350 |
CMA CGM Berlioz | 6,621 | 2001 | Aug 2009 | 3.2 | May 28, 2021 | 34,000 |
GSL Tianjin | 8,063 | 2005 | Oct 2014 | 0.4 | Sept 26, 2018 | 11,900 |
OOCL Qingdao | 8,063 | 2004 | Mar 2015 | 0.6 | Jan 1, 2019 | 14,000 |
OOCL Ningbo | 8,063 | 2004 | Sep 2015 | 0.3 | Sep 17, 2018 | 34,500 |
GSL Valerie | 2,824 | 2005 | Jun 2018 | 1.00 | Jun 1, 2019 | 9,000 |
(1) Twenty-foot Equivalent Units.
(2) Plus or minus 90 days, other than (i)
(3) The charters for Kumasi and
Conference Call and Webcast
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 6279789
Please dial in at least 10 minutes prior to
10:30 a.m. Eastern Time to ensure a prompt start to the call.
(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the call will be available through
Wednesday, August 15, 2018 at (855) 859-2056 or (404) 537-3406. Enter the code 6279789 to access the audio replay. The webcast will also be archived on the Company’s website: http://www.globalshiplease.com.
Annual Report on Form 20F
About
As of
Reconciliation of Non-U.S. GAAP Financial Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense including amortization of deferred finance costs, realized and unrealized gain (loss) on derivatives, income taxes, depreciation and amortization. Adjusted EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is not defined in US GAAP and should not be considered to be an alternate to Net income or any other financial metric required by such accounting principles.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars)
Three | Three | Six | Six | ||
months | months | months | months | ||
ended | ended | ended | ended | ||
June 30, | June 30, | June 30, | June 30, | ||
2018 | 2017 | 2018 | 2017 | ||
Net income available to Common Shareholders | 4,020 | 6,824 | 8,212 | 13,618 | |
Adjust: | Depreciation | 8,173 | 9,541 | 16,329 | 19,141 |
Interest income | (351) | (90) | (620) | (183) | |
Interest expense | 10,729 | 11,026 | 21,516 | 21,983 | |
Income tax | 31 | 6 | 46 | 16 | |
Earnings allocated to preferred shares | 765 | 765 | 1,531 | 1,531 | |
Adjusted EBITDA | 23,367 | 28,072 | 47,014 | 56,106 |
B. Normalized net income
Normalized net income represents net income adjusted for the premium paid on the tender offer together with the related accelerated amortization of deferred financing costs and original issue discount. Normalized net income is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income for non-operating items that do not affect operating performance or operating cash generated. Normalized net income is not defined in US GAAP and should not be considered to be an alternate to net income or any other financial metric required by such accounting principles.
NORMALIZED NET INCOME - UNAUDITED
(thousands of U.S. dollars)
Three | Three | Six | Six | ||
months | months | months | months | ||
ended | ended | ended | ended | ||
June 30, | June 30, | June 30, | June 30, | ||
2018 | 2017 | 2018 | 2017 | ||
Net income available to Common Shareholders | 4,020 | 6,824 | 8,212 | 13,618 | |
Adjust: | Gain on purchase of Notes | --- | --- | --- | --- |
Premium paid on tender offer for Notes | --- | 390 | --- | 390 | |
Accelerated write off of deferred financing charges related to purchase and tender offer | --- | 61 | --- | 61 | |
Accelerated write off of original issue discount related to purchase and tender offer | --- | 69 | --- | 69 | |
Normalized net income | 4,020 | 7,344 | 8,212 | 14,138 | |
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide
The risks and uncertainties include, but are not limited to:
• future operating or financial results;
• expectations regarding the strength of future growth of the container shipping industry, including the rates of annual demand and supply growth;
• the financial condition ofCMA CGM (the company’s principal charterer and main source of operating revenue) and other charterers and their ability to pay charterhire in accordance with the charters;
• the overall health and condition of the U.S. and global financial markets;
• Global Ship Lease’s financial condition and liquidity, including its ability to obtain additional financing to fund capital expenditures, vessel acquisitions and for other general corporate purposes and its ability to meet its financial covenants and repay its borrowings;
• Global Ship Lease’s expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its first priority secured notes;
• future acquisitions, business strategy and expected capital spending;
• operating expenses, availability of key employees, crew, number of off-hire days, dry-docking and survey requirements, costs of regulatory compliance, insurance costs and general and administrative costs;
• general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
• assumptions regarding interest rates and inflation;
• change in the rate of growth of global and various regional economies;
• risks incidental to vessel operation, including piracy, discharge of pollutants and vessel accidents and damage including total or constructive total loss;
• estimated future capital expenditures needed to preserve Global Ship Lease’s capital base;
• Global Ship Lease’s expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of its vessels;
• Global Ship Lease’s continued ability to enter into or renew charters including the re-chartering of vessels on the expiry of existing charters, or to secure profitable employment for its vessels in the spot market;
• the continued performance of existing charters;
• Global Ship Lease’s ability to capitalize on management’s and directors’ relationships and reputations in the containership industry to its advantage;
• changes in governmental and classification societies’ rules and regulations or actions taken by regulatory authorities;
• expectations about the availability of insurance on commercially reasonable terms;
• unanticipated changes in laws and regulations; and
• potential liability from future litigation.
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.
Global Ship Lease, Inc. | ||||||||||||
Interim Unaudited ConsolidatedStatements of Income | ||||||||||||
(Expressed in thousands of U.S. dollars except share data) | ||||||||||||
Three months ended June 30, |
Six months ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Operating Revenues | ||||||||||||
Time charter revenue | $ | 4,382 | $ | 9,341 | $ | 10,108 | $ | 18,578 | ||||
Time charter revenue – related party | 30,627 | 30,918 | 61,003 | 61,323 | ||||||||
35,009 | 40,259 | 71,111 | 79,901 | |||||||||
Operating Expenses | ||||||||||||
Vessel operating expenses | 9,979 | 10,468 | 20,183 | 20,478 | ||||||||
Vessel operating expenses – related party | 214 | 400 | 536 | 800 | ||||||||
Depreciation | 8,173 | 9,541 | 16,329 | 19,141 | ||||||||
General and administrative | 1,458 | 1,325 | 3,393 | 2,565 | ||||||||
Other operating income | (9) | (6) | (15) | (48) | ||||||||
Total operating expenses | 19,815 | 21,728 | 40,426 | 42,936 | ||||||||
Operating Income | 15,194 | 18,531 | 30,685 | 36,965 | ||||||||
Non Operating Income (Expense) | ||||||||||||
Interest income | 351 | 90 | 620 | 183 | ||||||||
Interest expense | (10,729) | (11,026) | (21,516) | (21,983) | ||||||||
Income before Income Taxes | 4,816 | 7,595 | 9,789 | 15,165 | ||||||||
Income taxes | (31) | (6) | (46) | (16) | ||||||||
Net Income | $ | 4,785 | $ | 7,589 | $ | 9,743 | $ | 15,149 | ||||
Earnings allocated to Series B Preferred Shares | (765) | (765) | (1,531) | (1,531) | ||||||||
Net Income available to Common Shareholders | $ | 4,020 | $ | 6,824 | $ | 8,212 | $ | 13,618 | ||||
Earnings per Share | ||||||||||||
Weighted average number of Class A common shares outstanding | ||||||||||||
Basic (including RSUs without service conditions) | 48,109,734 | 47,975,609 | 48,060,010 | 47,975,609 | ||||||||
Diluted | 48,405,263 | 47,975,609 | 48,326,339 | 47,975,609 | ||||||||
Net income per Class A common share | ||||||||||||
Basic (including RSUs without service conditions) | $ | 0.08 | $ | 0.14 | $ | 0.17 | $ | 0.28 | ||||
Diluted | $ | 0.08 | $ | 0.14 | $ | 0.17 | $ | 0.28 | ||||
Weighted average number of Class B common shares outstanding | ||||||||||||
Basic and diluted | 7,405,956 | 7,405,956 | 7,405,956 | 7,405,956 | ||||||||
Net income per Class B common share | ||||||||||||
Basic and diluted | $ | nil | $ | nil | $ | nil | $ | nil |
Global Ship Lease, Inc. | ||||||
Interim Unaudited ConsolidatedBalance Sheets | ||||||
(Expressed in thousands of U.S. dollars) | ||||||
June 30, 2018 |
December 31, 2017 |
|||||
Assets | ||||||
Cash and cash equivalents | $ | 69,599 | $ | 73,266 | ||
Accounts receivable | - | 72 | ||||
Due from related party | 1,518 | 1,932 | ||||
Prepaid expenses | 2,671 | 918 | ||||
Other receivables | 119 | 458 | ||||
Inventory | 2,608 | 742 | ||||
Total current assets | 76,515 | 77,388 | ||||
Vessels in operation | 595,318 | 597,779 | ||||
Other fixed assets | 7 | 10 | ||||
Intangible assets | 3 | 7 | ||||
Total non-current assets | 595,328 | 597,796 | ||||
Total Assets | $ | 671,843 | $ | 675,184 | ||
Liabilities and Stockholders’ Equity | ||||||
Liabilities | ||||||
Current portion of long term debt | 40,000 | 40,000 | ||||
Intangible liability – charter agreements | 1,771 | 1,771 | ||||
Deferred revenue | 1,668 | 2,178 | ||||
Accounts payable | 478 | 1,486 | ||||
Due to related party | 1,909 | 2,813 | ||||
Accrued expenses | 7,794 | 8,788 | ||||
Total current liabilities | 53,620 | 57,036 | ||||
Long term debt | 350,932 | 358,515 | ||||
Intangible liability – charter agreements | 7,125 | 8,011 | ||||
Deferred tax liability | 27 | 17 | ||||
Total long term liabilities | 358,084 | 366,543 | ||||
Total Liabilities | $ | 411,704 | $ | 423,579 | ||
Commitments and contingencies | - | - | ||||
Stockholders’ Equity | ||||||
Class A Common stock – authorized 214,000,000 shares with a $0.01 par value; 47,609,734 shares issued and outstanding (2017 – 47,609,734) |
$ | 476 | $ | 476 | ||
Class B Common stock – authorized 20,000,000 shares with a $0.01 par value; 7,405,956 shares issued and outstanding (2017 – 7,405,956) |
74 | 74 | ||||
Series B Preferred shares – authorized 16,100 shares with $0.01 par value; 14,000 shares issued and outstanding (2017 – 14,000) |
- | - | ||||
Additional paid in capital | 387,070 | 386,748 | ||||
Accumulated deficit | (127,481) | (135,693) | ||||
Total Stockholders’ Equity | 260,139 | 251,605 | ||||
Total Liabilities and Stockholders’ Equity | $ | 671,843 | $ | 675,184 |
Global Ship Lease, Inc. | ||||||||||||
Interim Unaudited Consolidated Statements of Cash Flows | ||||||||||||
(Expressed in thousands of U.S. dollars) | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Cash Flows from Operating Activities | ||||||||||||
Net income | $ | 4,785 | $ | 7,589 | $ | 9,743 | $ | 15,149 | ||||
Adjustments to Reconcile Net income to Net Cash Provided by Operating Activities |
||||||||||||
Depreciation | 8,174 | 9,541 | 16,330 | 19,141 | ||||||||
Amortization of deferred financing costs | 986 | 885 | 2,015 | 1,775 | ||||||||
Amortization of original issue discount | 200 | 343 | 401 | 625 | ||||||||
Amortization of intangible liability | (443) | (452) | (886) | (904) | ||||||||
Share based compensation | 45 | - | 90 | - | ||||||||
(Increase) decrease in accounts receivable and other assets | (232) | 382 | (1,336) | (199) | ||||||||
(Increase) in inventory | (83) | (73) | (1,866) | (121) | ||||||||
(Decrease) increase in accounts payable and other liabilities | (10,078) | 8,800 | (2,228) | (748) | ||||||||
(Decrease) increase in unearned revenue | (198) | 330 | (510) | 758 | ||||||||
(Decrease) increase in related party balances | (2,937) | 580 | (1,099) | 628 | ||||||||
Unrealized foreign exchange (gain) loss | (6) | - | (2) | 6 | ||||||||
Net Cash Provided by Operating Activities | 213 | 27,925 | 20,652 | 36,110 | ||||||||
Cash Flows from Investing Activities | ||||||||||||
Cash paid for vessel improvements | - | (100) | (150) | (100) | ||||||||
Cash paid for vessels | (10,283) | - | (11,411) | - | ||||||||
Cash paid for other assets | - | (8) | - | (8) | ||||||||
Cash paid for drydockings | (854) | (2,211) | (1,227) | (3,931) | ||||||||
Net Cash Used in Investing Activities | (11,137) | (2,319) | (12,788) | (4,039) | ||||||||
Cash Flows from Financing Activities | ||||||||||||
Repurchase of secured notes | - | (19,501) | - | (19,501) | ||||||||
Repayment of credit facilities | (10,000) | (2,925) | (10,000) | (5,850) | ||||||||
Series B Preferred Shares – dividends paid | (765) | (765) | (1,531) | (1,531) | ||||||||
Net Cash Used in Financing Activities | (10,765) | (23,191) | (11,531) | (26,882) | ||||||||
Net (Decrease) increase in Cash and Cash Equivalents | (21,689) | 2,415 | (3,667) | 5,189 | ||||||||
Cash and Cash Equivalents at Start of Period | 91,288 | 57,017 | 73,266 | 54,243 | ||||||||
Cash and Cash Equivalents at End of Period | $ | 69,599 | $ | 59,432 | $ | 69,599 | $ | 59,432 | ||||
Supplemental information | ||||||||||||
Total interest paid | $ | 19,289 | $ | 746 | $ | 19,937 | $ | 19,678 | ||||
Income tax paid | $ | 16 | $ | 10 | $ | 28 | $ | 24 |
Investor and Media Contacts:
646-673-9701
or
212-477-8438
Source: Global Ship Lease, Inc.