LONDON, Nov. 10, 2010 (GLOBE NEWSWIRE) -- Global Ship Lease, Inc. (NYSE:GSL), a containership charter owner, announced today its unaudited results for the three months ended September 30, 2010.
Third Quarter and Year To Date Highlights
- Reported revenue of $40.0 million for the third quarter of 2010, up 6% on $37.6 million for the third quarter 2009 due mainly to the addition of one further vessel in August 2009. Revenue for the nine months ended September 30, 2010 was $118.8 million, up 9% on $108.8 million for the nine months ended September 30, 2009
- Generated $26.8 million EBITDA for the third quarter 2010, compared to $25.6 million for the third quarter 2009. EBITDA for the nine months ended September 30, 2010 was $82.5 million compared to $71.1 million for the nine months ended September 30, 2009
- Generated $15.5 million of adjusted cash from operations in the third quarter of 2010, essentially flat on $15.4 million on cash generated in third quarter 2009. Cash generated in the nine months ended September 30, 2010 was $48.9 million, up 8% on $45.5 million for the nine months ended September 30, 2009 mainly from the additional vessel
- Reported normalized net earnings of $6.2 million, or $0.11 per A and B Common Share, for the third quarter of 2010, excluding a $9.7 million non-cash interest rate derivative mark-to-market loss. Normalized net earnings for third quarter 2009 were $6.2 million, or $0.12 per A and B Common Share, excluding $8.1 million non-cash mark-to-market loss and $2.0 million accelerated write off of deferred financing fees. Normalized net earnings for the nine months ended September 30, 2010 was $21.8 million, or $0.40 per A and B Common Share, compared to $19.4 million for the nine months ended September 30, 2009, or $0.36 per A and B Common Share
- Including the non-cash mark-to-market items, reported net loss was $3.5 million, or $0.06 loss per share, for the third quarter of 2010 compared to net loss of $3.9 million, or $0.07 loss per share, for the third quarter 2009. Reported net loss for the nine months ended September 30, 2010 was $5.2 million, or $0.10 loss per share, compared to net income of $30.0 million for the nine months ended September 30, 2009, or $0.56 income per share
- Reached agreement with the sellers of two 4,250 TEU container vessels to convert the purchases, which were due in December 2010 at a total price of $77.4 million each, into options to purchase the vessels in one year for a final payment of $61.25 million each; Global Ship Lease has agreed to release the deposits already paid and pay an additional $6.6 million per vessel for the option
Ian Webber, Chief Executive Officer of Global Ship Lease, stated, "During the third quarter, our fleet once again operated at 100% utilization, enabling Global Ship Lease to achieve record revenue. Our 17 vessel fleet continues to perform as expected and remains secured on long-term fixed rate contracts with an average duration of 8.3 years. The Company's $1.4 billion of contracted revenue combined with the strengthening industry fundamentals positions Global Ship Lease well for the future."
Mr. Webber continued, "We are pleased to have reached agreement with the sellers of the two 4,250 TEU vessels which we were due to purchase in December 2010 and for which we did not have financing. Our proactive decision to convert the purchase of these two vessels into options eliminates any risk of not being able to perform on our purchase commitments and, crucially, provides the Company the right but not obligation to purchase the vessels in one year."
SELECTED FINANCIAL DATA – UNAUDITED | ||||
(thousands of U.S. dollars except per share data) | ||||
Three months ended Sept 30, 2010 |
Three months ended Sept 30, 2009 | Nine months ended Sept 30, 2010 |
Nine months ended Sept 30, 2009 | |
Revenue | 40,040 | 37,623 | 118,802 | 108,824 |
Operating Income | 16,703 | 16,132 | 52,546 | 43,855 |
Net (Loss) Income | (3,526) | (3,893) | (5,198) | 30,026 |
(Loss) Earnings per A and B share | (0.06) | (0.07) | (0.10) | 0.56 |
Normalised net earnings (1) | 6,173 | 6,249 | 21,834 | 19,383 |
Normalised earnings per A and B share (1) | 0.11 | 0.12 | 0.40 | 0.36 |
EBITDA (1) | 26,803 | 25,601 | 82,501 | 71,096 |
Adjusted Cash From Operations (1) | 15,450 | 15,361 | 48,873 | 45,507 |
(1) Normalized net earnings, normalized earnings per share, EBITDA and adjusted cash from operations are non-US Generally Accepted Accounting Principles (US GAAP) measures, as explained further in this press release, and reconciliations are provided to the interim unaudited financial information.
Revenue and Utilization
The 17-vessel fleet generated revenue from fixed rate long-term time charters of $40.0 million in the three months ended September 30, 2010, up 6% on revenue of $37.6 million for the comparative period in 2009. The increase in revenue is due to the purchase of our seventeenth ship in August 2009 and from lower off-hire. During the three months ended September 30, 2010, there were 1,564 ownership days, up 56 or 4% on 1,508 ownership days in the comparable period in 2009. There were no dry-dockings in the three months ended September 30, 2010 and no off-hire days, giving a utilization of 100%. In the comparable period of 2009, there were 16 planned off-hire days for drydocking and four unplanned off-hire days, representing utilization of 98.7%.
For the nine months ended September 30, 2010 revenue was $118.8 million, an increase of 9% on $108.8 million in the comparative period. With one additional vessel, ownership days at 4,641 were up 237 or 5% on 4,404 in the comparative period. Further, off-hire days in the nine months ended September 30, 2010 were two, compared to 58 in the comparative period in 2009 including 16 planned days off-hire for drydocking.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, were $10.9 million for the three months ended September 30, 2010. The average cost per ownership day was $6,992 in the third quarter 2010 compared to $6,565 for the second quarter, up $427 or 7% due mainly to catch up spend on maintenance and higher crew costs. The third quarter 2010 average daily cost was up 3% from the average daily cost of $6,820 for the comparative period in 2009 due to higher spend on maintenance and crew offset by lower lubricating oil consumption from slow steaming and following installation of alpha lubricating equipment on a number of vessels.
For the nine months ended September 30, 2010 vessel operating expenses were $30.7 million or an average cost per vessel per day of $6,612 compared to a total of $31.5 million or an average of $7,156.
Vessel operating expenses are at less than the capped amounts included in Global Ship Lease's ship management agreements.
Depreciation
Depreciation was $10.1 million for the three months ended September 30, 2010, including the effect of the purchase of one additional vessel in August 2009, compared to $9.5 million for the comparative period in 2009.
Depreciation was $30.0 million for the nine months ended September 30, 2010 compared to $27.2 million for the comparative period in 2009.
General and Administrative Costs
General and administrative costs incurred were $1.9 million in the three months ended September 30, 2010, including $0.2 million non-cash charge for stock based incentives, compared to $2.0 million for the comparable period in 2009, including $0.6 million non-cash charge for stock based incentives.
In the nine months ended September 30, 2010 general and administrative costs were $5.8 million, including $0.8 million non-cash charge for stock based incentives, compared to $6.6 million for the comparable period in 2009, including $2.2 million non-cash charge for stock based incentives.
Other operating expense (income)
Other operating expense in the three months ended September 30, 2010 was $0.4 million. Other operating income was $0.2 million for the three months ended September 30, 2009.
For the nine months ended September 30, 2010 other operating income was $0.2 million compared to income of $0.4 million in the comparative period in 2009.
Interest Expense
Interest expense, excluding the effect of interest rate derivatives which do not qualify for hedge accounting, for the three months ended September 30, 2010 was $6.0 million. The Company's borrowings under its credit facility averaged $553.1 million during third quarter and were $553.1 million at September 30, 2010. There were $48.0 million preferred shares throughout the period giving total borrowings of $601.1 million. Interest expense in the comparative period in 2009 was $7.9 million including $2.0 million for a non recurring accelerated write off associated with renegotiation of the credit facility of deferred financing fees. Average borrowings in the three months ended September 30, 2009, including the preferred shares, were $612.4 million.
For the nine months ended September 30, 2010, interest expense, excluding the effect of interest rate derivatives which do not qualify for hedge accounting, was $17.9 million. The Company's borrowings under its credit facility together with the preferred shares averaged $622.4 million during this period. Interest expense in the comparable period in 2009 was $18.1 million, including $2.2 million accelerated write off of deferred financing fees, based on average borrowings, including the preferred shares, of $597.6 million in the period.
Interest income for the three months ended September 30, 2010 was $66,000 and was $178,000 in the comparative 2009 period. For the nine months ended September 30, 2010, interest income was $161,000 and was $483,000 in the comparative 2009 period.
Taxation
Taxation for the three months ended September 30, 2010 was $0.6 million including $0.4 million tax relating to Marathon Acquisition Corp for the period up to August 14, 2008. Taxation was $0.3 million for the three months ended September 30, 2009.
For the nine months ended September 30, 2010 taxation was $0.6 million compared to $0.3 million in the comparative period.
Change in Fair Value of Financial Instruments
The Company hedges its interest rate exposure by entering into derivatives that swap floating rate debt for fixed rate debt to provide long-term stability and predictability to cash flows. As these hedges do not qualify for hedge accounting under US GAAP, the outstanding hedges are marked to market at each period end with any change in the fair value being booked to the income and expenditure account. The Company's derivative hedging instruments gave a $13.8 million loss in the three months ended September 30, 2010, reflecting primarily movements in the forward curve for interest rates. Of this amount, $4.1 million was a realized loss for settlements of swaps in the period and $9.7 million was an unrealized loss for revaluation of the balance sheet position. This compares to a $12.0 million loss in the three months ended September 30, 2009 of which $3.9 million was realized and $8.1
million was unrealized.
For the nine months ended September 30, 2010 the total loss from derivative hedging instruments was $39.4 million of which $12.4 million was realized and $27.0 million unrealized compared to a total gain in the nine months ended September 30, 2009 of $4.1 million of which $8.7 million was a realized loss and $12.8 million was an unrealized gain.
At September 30, 2010, the total mark-to-market unrealized loss recognized as a liability was $56.1 million.
Unrealized mark-to-market adjustments have no impact on operating performance or cash generation in the period reported.
Net Earnings
Normalized net earnings were $6.2 million, or $0.11 per Class A and B common share, for the three months ended September 30, 2010 excluding the $9.7 million non-cash interest rate derivative mark-to-market loss. Including the mark-to-market loss, the reported net loss was $3.5 million or $0.06 loss per Class A and B common share. For the three months ended September 30, 2009 normalized net earnings were $6.2 million, or $0.12 per Class A and B common share, excluding the $8.1 million non-cash interest rate derivative mark-to-market loss and excluding the $2.0 million accelerated write off of deferred financing fees. Including the mark-to-market loss and the deferred fee write off, the reported net loss was $3.9 million or $0.07 loss per Class A and B common share.
Normalized net earnings were $21.8 million, or $0.40 per Class A and B common share, for the nine months ended September 30, 2010 excluding the $27.0 million non-cash interest rate derivative mark-to-market loss. Including the mark-to-market loss, the reported net loss was $5.2 million or $0.10 loss per Class A and B common share. For the nine months ended September 30, 2009 normalized net earnings were $19.4 million, or $0.36 per Class A and B common share, excluding the $12.80 million non-cash interest rate derivative mark-to-market gain and excluding the $2.2 million accelerated write off of deferred financing fees. Including the mark-to-market gain and the deferred fee write off, reported net earnings were $30.0 million or $0.56 income per Class A and B common share.
Normalized net earnings and normalized earnings per share are non-US GAAP measures and are reconciled to the financial information included in this press release. We believe that they are useful measures with which to assess the Company's financial performance as they adjust for non-cash items that do not affect the Company's ability to generate cash.
Credit Facility
On August 20, 2009, the Company entered into an amendment to its credit facility, whereby the loan-to-value covenant has been waived up to and including November 30, 2010 with the next loan-to-value test scheduled for April 30, 2011. Amounts borrowed under the amended credit facility bear interest at LIBOR plus a fixed interest margin of 3.50% up to November 30, 2010. Thereafter, the margin will be between 2.50% and 3.50% depending on the loan-to-value ratio.
In connection with the amended credit facility Global Ship Lease may not pay dividends to common shareholders, instead using its cash flow to prepay borrowings under the credit facility. Global Ship Lease can resume dividends after November 30, 2010 and once the loan-to-value is at or below 75%, when the prepayment of borrowings becomes fixed at $10 million per quarter.
On September 28, 2010 the Company agreed with its bank group to defer to December 30, 2010 the debt prepayment of approximately $16 million otherwise due on September 30, 2010. The deferment was to enhance the Company's flexibility as it explored solutions concerning the purchase of two 4,250 vessels due in December 2010 for which there was no committed finance.
In the nine months ended September 30, 2010 a total of $35.1 million has been prepaid leaving a balance outstanding of $553.1 million. The Company estimates that a further $53.8 million will be prepaid in the year ending September 30, 2011.
Termination of Purchase Agreements
On November 8, 2010, the Company signed agreements with the sellers of two 4,250 TEU container vessels which, once certain conditions have been satisfied, terminate the Company's purchase obligations which totaled $154.8 million. The Company has agreed to (i) release deposits, including accrued interest and totaling approximately $8.1 million per vessel, to the sellers, (ii) make a further cash payment of approximately $6.1 million per vessel and (iii) transfer to the sellers certain supplies purchased for the vessels which are valued at approximately $0.5 million per vessel. The total value of these items is $14.7 million per vessel. In exchange, the Company acquires purchase options giving it the right, but not the obligation, to purchase each vessel on the first anniversary of its delivery by the builder to the seller, for a final payment of $61.25 million per vessel. Each purchase option is to be exercised no later than 270 days after the delivery of the vessel by the builder to the seller, which is expected to be in December 2010 for both vessels. If the Company does not exercise the purchase options, the sellers retain all monies paid to them and the Company has no further liability. In certain circumstances, such as seller default, the Company is refunded the $14.7 million.
Dividend
Global Ship Lease has agreed with its lenders that it will not declare or pay any dividend to common shareholders until the later of November 30, 2010 and when loan-to-value is at or below 75%. The board of directors will review the dividend policy when appropriate.
EBITDA
EBITDA was $26.8 million the third quarter 2010 compared to $25.6 million for the third quarter 2009 and was $82.5 million for the nine months ended September 30, 2010 compared to $71.1 million for the nine months ended September 30, 2009.
EBITDA is a non-US GAAP measure and is reconciled to the financial information further in this press release. The Company believes that it is a useful measure with which to assess the Company's operating performance as it reflects its ability to generate cash.
Adjusted Cash From Operations
Adjusted cash from operations was $15.5 million for the three months ended September 30, 2010 compared to $15.4 million for the three months ended September 30, 2009.
Adjusted cash from operations was $48.9 million for the nine months ended September 30, 2010 compared to $45.5 million for the nine months ended September 30, 2009.
Adjusted cash from operations is a non-US GAAP measure and is reconciled to the financial information further in this press release. The Company believes that it is a useful measure with which to assess the Company's operating performance as it adjusts for the effects of non-cash items.
Fleet Utilization
The table below shows fleet utilization for the three and nine months ended September 30, 2010 and 2009 and for year ended December 31, 2009. Unplanned offhire in the nine months ended September 30, 2009 includes 18 days for drydock and associated repairs following a grounding and a seven day deviation to land a sick crew member.
Three months ended | Nine months ended | ||||||
Year ended | |||||||
Days |
Sept 30, 2010 |
Sept 30, 2009 | Increase |
Sept 30, 2010 |
Sept 30, 2009 | Increase |
Dec 31, 2009 |
Ownership days | 1,564 | 1,508 | 4% | 4,641 | 4,404 | 5% | 5,968 |
Planned offhire - scheduled drydock | -- | (16) | -- | (16) | (32) | ||
Unplanned offhire | -- | (4) | (2) | (42) | (42) | ||
Operating days | 1,564 | 1,488 | 7% | 4,639 | 4,346 | 7% | 5,894 |
Utilization | 100.0% | 98.7% | 100.0% | 98.7% | 98.8% |
Fleet
The following table provides information about the on-the-water fleet of 17 vessels chartered to CMA CGM.
Vessel Name | Capacity in TEUs (1) | Year Built | Purchase Date by GSL | Charter Remaining Duration (years) | Daily Charter Rate ($) |
Ville d'Orion | 4,113 | 1997 | December 2007 | 2.25 | $28,500 |
Ville d'Aquarius | 4,113 | 1996 | December 2007 | 2.25 | $28,500 |
CMA CGM Matisse | 2,262 | 1999 | December 2007 | 6.25 | $18,465 |
CMA CGM Utrillo | 2,262 | 1999 | December 2007 | 6.25 | $18,465 |
Delmas Keta | 2,207 | 2003 | December 2007 | 7.25 | $18,465 |
Julie Delmas | 2,207 | 2002 | December 2007 | 7.25 | $18,465 |
Kumasi | 2,207 | 2002 | December 2007 | 7.25 | $18,465 |
Marie Delmas | 2,207 | 2002 | December 2007 | 7.25 | $18,465 |
CMA CGM La Tour | 2,272 | 2001 | December 2007 | 6.25 | $18,465 |
CMA CGM Manet | 2,272 | 2001 | December 2007 | 6.25 | $18,465 |
CMA CGM Alcazar | 5,100 | 2007 | January 2008 | 10.25 | $33,750 |
CMA CGM Château d'If | 5,100 | 2007 | January 2008 | 10.25 | $33,750 |
CMA CGM Thalassa | 10,960 | 2008 | December 2008 | 15.25 | $47,200 |
CMA CGM Jamaica | 4,298 | 2006 | December 2008 | 12.25 | $25,350 |
CMA CGM Sambhar | 4,045 | 2006 | December 2008 | 12.25 | $25,350 |
CMA CGM America | 4,045 | 2006 | December 2008 | 12.25 | $25,350 |
CMA CGM Berlioz | 6,627 | 2001 | August 2009 | 11.00 | $34,000 |
(1) Twenty-foot Equivalent Units. |
The following table provides information about the contracted fleet.
Vessel Name | Capacity in TEUs (1) | Year Built | Potential Delivery Date | Charterer | Charter Duration (years) | Daily Charter Rate ($) | ||||
Hull 789 (2) | 4,250 | 2010 | December 2011 | ZIM | 7-8 (3) | $28,000 | ||||
Hull 790 (2) | 4,250 | 2010 | December 2011 | ZIM | 7-8 (3) | $28,000 | ||||
(1) Twenty-foot Equivalent Units. | ||||||||||
(2) Option to purchase from German interests. | ||||||||||
(3) Seven-year charter from December 2010 that could be extended to eight years at charterer's option. |
Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the Company's results for the three months ended September 30, 2010 today, Wednesday, November 10, 2010 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:
(1) Dial-in: (888) 935-4577 or (718) 354-1389; Passcode: 4714492
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, November 24, 2010 at (866) 932-5017 or (347) 366-9565. Enter the code 4714492 to access the audio replay. The webcast will also be archived on the Company's website: http://www.globalshiplease.com.
About Global Ship Lease
Global Ship Lease is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies.
Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at September 30, 2010 of 6.6 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.3 years.
Reconciliation of Non-U.S. GAAP Financial Measures
A. EBITDA
EBITDA represents net income (loss) before interest income and expense including amortization of deferred finance costs, realized and unrealized gain (loss) on derivatives, income taxes, depreciation and amortization. EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash. We believe that the presentation of 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.
EBITDA - UNAUDITED | |||||
(thousands of U.S. dollars) | |||||
Three months ended Sept 30, 2010 |
Three months ended Sept 30, 2009 |
Nine months ended Sept 30, 2010 |
Nine months ended Sept 30, 2009 | ||
Net (loss) income | (3,526) | (3,893) | (5,198) | 30,026 | |
Adjust: | Depreciation | 10,100 | 9,469 | 29,955 | 27,241 |
Interest income | (66) | (178) | (161) | (483) | |
Interest expense | 5,963 | 7,909 | 17,867 | 18,117 | |
Realized and unrealized loss (gain) on interest rate derivatives | 13,753 | 12,043 | 39,416 | (4,104) | |
Income tax | 579 | 251 | 622 | 299 | |
EBITDA | 26,803 | 25,601 | 82,501 | 71,096 |
B. Adjusted Cash From Operations
Adjusted cash from operations is a non-US GAAP measure and is reconciled to the financial information below. It represents net cash provided by operating activities adjusted for certain non-cash items such as deferred taxation. Movements in working capital – changes in receivables and payables – are also adjusted as these are essentially timing differences. We deduct cash paid to settle derivatives. We also add back actual dry-dock expenditure and deduct an allowance for the estimated cost of future drydockings. This is to eliminate distortions which otherwise result from drydocking costs which are substantial and periodic. For example, there are no planned drydockings in 2010 but seven falling due in 2011. Adjusted cash from operations is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash. Adjusted cash from operations is not
defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. We believe that adjusted cash from operations is a useful measure with which to assess the Company's operating performance as it adjusts for the effects of non-cash items and includes the effect of certain cash items.
ADJUSTED CASH FROM OPERATIONS - UNAUDITED | |||||
(thousands of U.S. dollars) | |||||
Three months ended Sept 30, 2010 |
Three months ended Sept 30, 2009 |
Nine months ended Sept 30, 2010 |
Nine months ended Sept 30, 2009 | ||
Cash provided by operating activities | 18,464 | 19,876 | 63,492 | 55,458 | |
Adjust: | Deferred taxation | 235 | 171 | 76 | (239) |
Movement in receivables | 422 | (478) | (38) | (363) | |
Movement in payables | 1,358 | (271) | 488 | 1,203 | |
Settlement of derivatives | (4,054) | (3,916) | (12,384) | (8,731) | |
Costs related to dry-docks | 0 | 909 | 164 | 909 | |
Allowance for future dry-docks | (975) | (930) | (2,925) | (2,730) | |
Adjusted cash from operations | 15,450 | 15,361 | 48,873 | 45,507 |
C. Normalized net earnings
Normalized net earnings is a non-US GAAP measure and is reconciled to the financial information below. It represents net earnings adjusted for the change in fair value of derivatives and the accelerated write off of a portion of deferred financing costs. Normalized net earnings is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net earnings for non-operating items such as change in fair value of derivatives to eliminate the effect of non cash non-operating items that do not affect operating performance or cash generated. Normalized net earnings is not defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. Normalized net earnings per share is calculated based on normalized net
earnings and the weighted average number of shares in the relevant period.
NORMALIZED NET EARNINGS -- UNAUDITED | |||||
(thousands of U.S. dollars except share and per share data) | |||||
Three months ended Sept 30, 2010 |
Three months ended Sept 30, 2009 |
Nine months ended Sept 30, 2010 |
Nine months ended Sept 30, 2009 | ||
Net (loss) income | (3,526) | (3,893) | (5,198) | 30,026 | |
Adjust: | Change in value of derivatives | 9,699 | 8,127 | 27,032 | (12,834) |
Deferred financing costs written off (1) | -- | 2,015 | -- | 2,191 | |
Normalized net earnings | 6,173 | 6,249 | 21,834 | 19,383 | |
Weighted average number of Class A and B common shares outstanding (2) | |||||
Basic | 54,258,434 | 53,805,878 | 54,243,841 | 53,792,798 | |
Diluted | 54,258,434 | 53,805,878 | 54,243,841 | 54,024,166 | |
Net (loss) income per share on reported earnings | |||||
Basic | (0.06) | (0.07) | (0.10) | 0.56 | |
Diluted | (0.06) | (0.07) | (0.10) | 0.56 | |
Normalized net income per share | |||||
Basic | 0.11 | 0.12 | 0.40 | 0.36 | |
Diluted | 0.11 | 0.12 | 0.40 | 0.36 |
(1) Following reductions in the Company's borrowing capacity under its credit faculty, a proportion of the unamortized deferred financing costs were written off.
(2) The weighted average number of shares for the three and nine months ended September 30, 2010 and the three months ended September 30, 2009 are the same for basic and diluted and excludes the effect of outstanding warrants and stock based incentives as these were antidilutive. For the nine months ended September 30, 2009 the diluted weighted average number of shares includes the incremental effect of outstanding stock based incentive awards but excludes the effect of outstanding warrants as these were antidilutive.
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide Global Ship Lease's current expectations or forecasts of future events. Forward-looking statements include statements about Global Ship Lease's expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "will" or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements are based on assumptions that may be incorrect, and Global Ship Lease cannot assure you that these projections included in these
forward-looking statements will come to pass. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.
The risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
- the financial condition of CMA CGM, our charterer and sole source of operating revenue, and its ability to pay charterhire in accordance with the charters;
- Global Ship Lease's financial condition and liquidity, including its ability to obtain additional waivers which might be necessary under the existing credit facility or obtain additional financing to fund capital expenditures, contracted and yet to be contracted vessel acquisitions and other general corporate purposes;
- Global Ship Lease's ability to meet its financial covenants and repay its credit facility;
- 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 credit facility;
- future acquisitions, business strategy and expected capital spending;
- operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
- assumptions regarding interest rates and inflation;
- changes 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 its capital base;
- Global Ship Lease's expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
- Global Ship Lease's continued ability to enter into or renew long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate time charters;
- Global Ship Lease's ability to capitalize on its management team's and board of 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 including taxation;
- 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's actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in Global Ship Lease's filings with the SEC. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Global Ship Lease undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Global Ship Lease describes in the reports it will file from time to time with the SEC after the date of this communication.
Global Ship Lease, Inc. | ||||
Interim Unaudited ConsolidatedStatements of Income | ||||
(Expressed in thousands of U.S. dollars except share data) | ||||
Three months ended September 30, | Nine months ended September 30, | |||
2010 | 2009 | 2010 | 2009 | |
Operating Revenues | ||||
Time charter revenue | $40,040 | $37,623 | $118,802 | $108,824 |
Operating Expenses | ||||
Vessel operating expenses | 10,936 | 10,285 | 30,684 | 31,517 |
Depreciation | 10,100 | 9,469 | 29,955 | 27,241 |
General and administrative | 1,924 | 1,981 | 5,843 | 6,561 |
Other operating expense (income) | 377 | (244) | (226) | (350) |
Total operating expenses | 23,337 | 21,491 | 66,256 | 64,969 |
Operating Income | 16,703 | 16,132 | 52,546 | 43,855 |
Non Operating Income (Expense) | ||||
Interest income | 66 | 178 | 161 | 483 |
Interest expense | (5,963) | (7,909) | (17,867) | (18,117) |
Realized and unrealized (loss) gain on interest rate derivatives | (13,753) | (12,043) | (39,416) | 4,104 |
(Loss) Income before Income Taxes | (2,947) | (3,642) | (4,476) | 30,325 |
Income taxes | (579) | (251) | (622) | (299) |
Net (Loss) Income | ($3,526) | ($3,893) | ($5,198) | $30,026 |
Earnings per Share | ||||
Weighted average number of Class A common shares outstanding | ||||
Basic | 46,852,478 | 46,399,922 | 46,837,885 | 46,386,842 |
Diluted | 46,852,478 | 46,399,922 | 46,837,885 | 46,618,210 |
Net (loss) income in $ per Class A common share | ||||
Basic | $(0.08) | $(0.08) | $(0.11) | $0.65 |
Diluted | $(0.08) | $(0.08) | $(0.11) | $0.64 |
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 in $ 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) | ||
September 30, 2010 | December 31, 2009 | |
Assets | ||
Cash and cash equivalents | $29,335 | $30,810 |
Restricted cash | 19,261 | 3,026 |
Accounts receivable | 6,576 | 7,838 |
Prepaid expenses | 1,631 | 685 |
Other receivables | 969 | 613 |
Deferred tax | 284 | 285 |
Deferred financing costs | 903 | 903 |
Total current assets | 58,959 | 44,160 |
Vessels in operation | 932,593 | 961,708 |
Vessel deposits | 16,699 | 16,243 |
Other fixed assets | 11 | 9 |
Deferred tax | 86 | 161 |
Deferred financing costs | 4,400 | 5,077 |
Total non-current assets | 953,789 | 983,198 |
Total Assets | $1,012,748 | $1,027,358 |
Liabilities and Stockholders' Equity | ||
Liabilities | ||
Current portion of long term debt | $53,800 | $68,300 |
Intangible liability – charter agreements | 2,119 | 2,119 |
Accounts payable | 388 | 3,502 |
Accrued expenses | 7,048 | 4,589 |
Derivative instruments | 16,430 | 15,971 |
Total current liabilities | 79,785 | 94,481 |
Long term debt | 499,341 | 519,892 |
Preferred shares | 48,000 | 48,000 |
Intangible liability – charter agreements | 22,700 | 24,288 |
Derivative instruments | 39,716 | 13,142 |
Total long-term liabilities | 609,757 | 605,322 |
Total Liabilities | $689,542 | $699,803 |
Stockholders' Equity | ||
Class A Common stock – authorized | ||
214,000,000 shares with a $0.01 par value; | ||
47,040,467 shares issued and outstanding | $470 | $467 |
Class B Common stock – authorized | ||
20,000,000 shares with a $0.01 par value; | ||
7,405,956 shares issued and outstanding | 74 | 74 |
Additional paid in capital | 351,165 | 350,319 |
Accumulated deficit | (28,503) | (23,305) |
Total Stockholders' Equity | 323,206 | 327,555 |
Total Liabilities and Stockholders' Equity | $1,012,748 | $1,027,358 |
Global Ship Lease, Inc. | ||||
Interim Unaudited Consolidated Statements of Cash Flows | ||||
(Expressed in thousands of U.S. dollars) | ||||
Three months ended September 30, | Nine months ended September 30, | |||
2010 | 2009 | 2010 | 2009 | |
Cash Flows from Operating Activities | ||||
Net (loss) income | $(3,526) | $(3,893) | $(5,198) | $30,026 |
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities | ||||
Depreciation | 10,100 | 9,469 | 29,955 | 27,241 |
Amortization of deferred financing costs | 226 | 2,261 | 677 | 2,886 |
Change in fair value of certain derivative instruments | 9,699 | 8,127 | 27,032 | (12,834) |
Amortization of intangible liability | (529) | (397) | (1,588) | (1,019) |
Settlements of hedges which do not qualify for hedge accounting | 4,054 | 3,916 | 12,384 | 8,731 |
Share based compensation | 223 | 575 | 849 | 2,154 |
(Increase) decrease in other receivables and other assets | (422) | 478 | 38 | 363 |
(Decrease) increase in accounts payable and other liabilities | (1,358) | 271 | (488) | (1,203) |
Costs relating to drydocks | -- | (909) | (164) | (909) |
Unrealized foreign exchange (gain) loss | (3) | (22) | (5) | 22 |
Net Cash Provided by Operating Activities | 18,464 | 19,876 | 63,492 | 55,458 |
Cash Flows from Investing Activities | ||||
Settlements of hedges which do not qualify for hedge accounting | (4,054) | (3,916) | (12,384) | (8,731) |
Cash paid for purchases of vessels, vessel prepayments and vessel deposits | (157) | (82,328) | (1,285) | (83,062) |
Cash paid for other fixed assets | (12) | -- | (12) | -- |
Variation in restricted cash | (16,235) | -- | (16,235) | -- |
Net Cash used in Investing Activities | (20,458) | (86,244) | (29,916) | (91,793) |
Cash Flows from Financing Activities | ||||
Proceeds (repayments) of debt | -- | 57,000 | (35,051) | 57,000 |
Issuance costs of debt | -- | (1,822) | -- | (5,115) |
Dividend payments | -- | -- | -- | (12,371) |
Net Cash (used in) from Financing Activities | -- | 55,178 | (35,051) | 39,514 |
Net (Decrease) Increase in Cash and Cash Equivalents | (1,994) | (11,190) | (1,475) | 3,179 |
Cash and Cash Equivalents at start of Period | 31,329 | 40,732 | 30,810 | 26,363 |
Cash and Cash Equivalents at end of Period | $29,335 | $29,542 | $29,335 | $29,542 |
Supplemental information | ||||
Non cash investing and financing activities | ||||
Dividend declared | $ -- | $ -- | $ -- | $12,371 |
Total interest paid | $6,237 | $5,384 | $16,806 | $14,117 |
Income tax paid | $21 | $62 | $7 | $139 |
CONTACT: The IGB Group Investor and Media Contacts: Michael Cimini 212-477-8261