Navios Maritime Containers L.P. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2019

Revenue

• $65.5 million for H1 2019
• $33.7 million for Q2 2019

Cash from operating activities

• $9.3 million for H1 2019
• $9.4 million for Q2 2019

EBITDA

• $24.8 million for H1 2019
• $12.7 million for Q2 2019

Net income

• $0.5 million for H1 2019
• $0.4 million for Q2 2019

MONACO, July 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 its financial results for the second quarter and six months ended June 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "I am pleased with the results for the second quarter of 2019, in which Navios Containers reported $33.7 million in Revenue, $12.7 million of EBITDA and around $450,000 of Net income."

Angeliki Frangou continued, "With the acquisition of the Navios Constellation, a 2011-built 10,000 TEU containership, NMCI owns a fleet of 29 containerships, of which 25 are baby panamax and four are new panamax (above 8,000 TEU). Given our low breakeven and the 62.0% increase in charter rates for the baby panamax (from the first quarter low of $8,100 per day) we are positioned well for the remainder of 2019.​"

HIGHLIGHTS -- RECENT DEVELOPMENTS   

Vessel Acquisitions

On April 23, 2019, Navios Containers took delivery of the Navios Constellation, a 2011-built 10,000 TEU containership. The vessel was acquired 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.

In July 2019, Navios Containers converted the obligation to purchase a 2011-built 10,000 TEU containership, into an option, expiring on March 31, 2020 for $3.0 million future payment. The agreement grants Navios Containers the option and the right of first refusal to acquire the vessel at terms mutually agreed with the seller. The containership is chartered out at a net rate of $26,325 per day until July 2021 and $27,300 per day until June 2022.

Financing Developments

Refinancing of existing facilities of seven containerships

On June 26, 2019, Navios Containers entered into a new credit facility in order to refinance the outstanding credit facilities of seven containerships with an outstanding balance of $36.7 million. On June 27, 2019 the Company drew $48.8 million under this facility. The facility is repayable in 20 consecutive quarterly installments, the first four in the amount of $2.0 million each and the remaining 16 in the amount of $1.7 million each, together with a $13.5 million balloon payment on the last repayment date. The facility matures in June 2024 and bears interest at LIBOR plus 300 bps. The Company has no bank debt maturities until 2022. 

Fleet Employment

Navios Containers owns a fleet of 29 vessels, totaling 142,821 TEU. The current average age of the fleet is 11.0 years (See Exhibit II). As of July 30, 2019, Navios Containers has chartered-out 75.0% and 22.8% of available days for the remaining six months of 2019 and for 2020, respectively (excluding index-linked charters), which are expected to generate $61.4 million and $50.8 million in revenue, respectively. The average expected daily contracted charter-out rate for the fleet is $15,345 and $20,934 for the remaining six months of 2019 and for 2020, respectively, and the total expected available days for the remaining six months of 2019 and for 2020, are 5,336 days and 10,614 days, respectively. 

Earnings Highlights

EBITDA is a non-U.S. GAAP financial measure 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 of Navios Containers and a reconciliation of such measure 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.

Second Quarter 2019 and 2018 Results

The second quarter 2019 and 2018 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

		Three Month Period Ended June 30, 2019		Three Month Period Ended June 30, 2018
(in thousands of U.S. dollars, except per unit data)		(unaudited)		(unaudited)
Revenue		$	33,678		$	31,508
Net Income		$	448		$	4,487
Net cash provided by operating activities		$	9,358		$	12,232
EBITDA		$	12,730		$	16,657
Net Earnings per common unit (basic and diluted)		$	0.01		$	0.13

Revenue for the three month period ended June 30, 2019 was $33.7 million, as compared to $31.5 million for the same period during 2018.  The increase of $2.2 million was due to the increase in the number of vessels operating during the three month period ended June 30, 2019 and the resulting increase in the number of available days from 2,012 for the three month period ended June 30, 2018, to 2,568 for the three month period ended June 30, 2019, offset by the decrease in time charter rates reflecting primarily the expiration of certain legacy time charter contracts. TCE per day declined from $15,308 for the three month period ended June 30, 2018 to $12,594 for the same period during 2019, primarily as a result of the expiration of contracts between the two periods.

Net income for the three months ended June 30, 2019 was $0.4 million compared to $4.5 million for the same period in 2018.  The $4.1 million decrease in net income was mainly due to a: (i) $4.0 million decrease in EBITDA; (ii) $2.3 million increase in interest expense and finance cost, net related to the financing of new vessels; and (iii) $0.6 million increase in amortization of deferred drydock and special survey costs, in each case, relating to the increase in the size of the fleet. This overall decrease of $6.9 million was partially offset by a $2.8 million decrease in depreciation and amortization expenses, relating mainly to the lower amortization of intangible assets.

EBITDA for the three months ended June 30, 2019 decreased by $4.0 million to $12.7 million as compared to $16.7 million for the same period in 2018. The decrease in EBITDA was primarily due to a: (i) $4.0 million increase in management fees mainly due to the increase of the available days from 2,012 days for the three month period ended June 30, 2018, to 2,568 days for the three month period ended June 30, 2019; (ii) $0.9 million increase in general and administrative expenses also mainly related to the growth in our fleet; (iii) $0.6 million increase in time charter and  voyage expenses;  (iv) $0.5 million increase in other expense, net; and (v) $0.2 million increase in direct vessel expenses. This overall resulting decrease of $6.2 million was partially offset by a $2.2 million increase in revenue described above reflecting the growth in the number of vessels operating in the fleet during the period.

First Half of 2019 and 2018 Results

The information for the six month periods ended June 30, 2019 and 2018 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

		Six Month Period Ended June 30, 2019		Six Month Period Ended June 30, 2018
(in thousands of U.S. dollars, except per unit data)		(unaudited)		(unaudited)
Revenue		$	65,510		$	61,425
Net Income		$	501		$	7,528
Net cash provided by operating activities		$	9,321		$	19,613
EBITDA		$	24,778		$	32,363
Net Earnings per common unit (basic and diluted)		$	0.01		$	0.23

Revenue for the six month periods ended June 30, 2019 was $65.5 million, as compared to $61.4 million for the same period during 2018.  The increase of $4.1 million was due to the increase in the number of vessels operating during the six month period ended June 30, 2019 and the resulting increase in the number of available days from 3,919 for the six month period ended June 30, 2018, to 5,039 for the six month period ended June 30, 2019, offset by the decrease in time charter rates reflecting primarily the expiration of certain legacy time charter contracts. TCE per day declined from $15,284 for the six month period ended June 30, 2018 to $12,409 for the same period during 2019, primarily as a result of the expiration of these contracts between the two periods.

Net income for the six months ended June 30, 2019 was $0.5 million compared to $7.5 million for the same period in 2018.  The $7.0 million decrease in net income was mainly due to a: (i) $7.6 million decrease in EBITDA; (ii) $4.6 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. This overall resulting decrease of $13.3 million was partially offset by a $6.3 million decrease in depreciation and amortization expenses, relating mainly to the lower amortization of intangible assets.

EBITDA for the six months ended June 30, 2019 decreased by $7.6 million to $24.8 million as compared to $32.4 million for the same period in 2018. The decrease in EBITDA was primarily due to: (i) an $8.0 million increase in management fees mainly due to the increase of the available days from 3,919 days for the six month period ended June 30, 2018, to 5,039 days for the six month period ended June 30, 2019; (ii) a $1.8 million increase in general and administrative expenses also mainly related to the growth in our fleet; (iii) a $1.5 million increase in time charter and voyage expenses; (iv) a $0.2 million increase in other expense net; and (v) a $0.2 million increase in direct vessel expenses. This overall resulting decrease of $11.7 million was partially offset by $4.1 million increase in revenue described above reflecting the growth in the number of vessels operating in the fleet during the period.     

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 and six month periods ended June 30, 2019 and 2018.

		Three Month		Three Month		Six Month		Six Month
		Period Ended		Period Ended		Period Ended		Period Ended
		June 30,		June 30,		June 30,		June 30,
		2019		2018		2019		2018
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Available Days (1)			2,568				2,012				5,039				3,919
Operating Days (2)			2,563				1,980				5,026				3,857
Fleet Utilization (3)			99.8	%			98.4	%			99.7	%			98.4	%
Vessels operating at period end			29				23				29				23
TCE (4)		$	12,594			$	15,308			$	12,409			$	15,284

(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 on Tuesday, July 30, 2019,  at 8:30 am ET, during which time Navios Containers' senior management will provide highlights and commentary on earnings results for the second quarter and six months ended June 30, 2019.

A supplemental slide presentation will be available on the Navios Containers website at www.navios-containers.com under the "Investors" section by 8:00 am ET on the day of the call.

Conference Call details:
Call Date/Time: Tuesday, July 30, 2019 at 8:30 am ET
Call Title: Navios Containers Q2 2019 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 367 5389

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: 367 5389

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 risks and are based upon a number of assumptions and estimates that 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
investors@navios-containers.com   

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  June 30, 2019		Three Month  Period  Ended  June 30, 2018		Six Month  Period  Ended  June 30, 2019		Six Month  Period  Ended  June 30, 2018
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue		$	33,678				$	31,508				$	65,510			$	61,425
Time charter and voyage expenses			(1,335	)				(714	)				(2,982	)			(1,525	)
Direct vessel expenses			(1,034	)				(232	)				(1,822	)			(460	)
Management fees (entirely through related parties transactions)			(16,408	)				(12,449	)				(32,131	)			(24,088	)
General and administrative expenses			(2,570	)				(1,670	)				(5,064	)			(3,360	)
Depreciation and amortization			(7,064	)				(9,871	)				(14,173	)			(20,437	)
Interest expense and finance cost, net			(4,386	)				(2,067	)				(8,484	)			(3,938	)
Other expense, net			(433	)				(18	)				(353	)			(89	)
Net income		$	448				$	4,487				$	501			$	7,528
Net earnings per unit, basic and diluted		$	0.01				$	0.13				$	0.01			$	0.23
Weighted average number of units, basic and diluted			34,603,100					34,603,100					34,603,100				32,433,336

 
NAVIOS MARITIME CONTAINERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars – except for unit data)

		June 30, 2019		December 31, 2018
		(unaudited)		(unaudited)
ASSETS
Cash and cash equivalents, including restricted cash	$	16,855	$	18,892
Vessels and deferred dry dock and special survey costs, net		407,784		354,079
Other assets (including current and non-current)		21,434		15,206
Intangible assets		15,674		25,350
Total assets	$	461,747	$	413,527
LIABILITIES AND PARTNERS' CAPITAL
Other current liabilities	$	13,377	$	12,093
Current portion of long term borrowings, net		52,019		35,291
Long-term borrowings, net of current portion		213,377		183,670
Total Partners' capital		182,974		182,473
Total liabilities and partners' capital	$	461,747	$	413,527

Disclosure of Non-GAAP Financial Measures   

EBITDA is  a "non-U.S. GAAP financial measure" and should not be used in isolation or considered a substitute 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 attributable to Navios Containers' common unitholders before interest and finance costs, before depreciation and amortization. Navios Containers uses EBITDA as a liquidity measure and reconciles 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 is 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 is 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 is 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 is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.

EBITDA has limitations as an analytical tool, 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 does not reflect changes in, or cash requirements for, working capital needs; (ii) EBITDA does 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 does not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, EBITDA should not be considered as a principal indicator of Navios Containers' performance. Furthermore, our calculation of EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

Reconciliation of EBITDA to Cash from Operations

		Three Month  Period  Ended  June 30, 2019 (unaudited)			Three Month  Period  Ended  June 30, 2018 (unaudited)			Six Month  Period  Ended  June 30, 2019 (unaudited)			Six Month  Period  Ended  June 30, 2018 (unaudited)
Expressed in thousands of U.S. dollars
Net cash  provided by operating activities		$	9,358			$	12,232			$	9,321				19,613
Net increase/ (decrease) in operating assets			5,621				(487	)			6,228				8,447
Net (increase)/ decrease  in operating liabilities			(6,561	)			1,479				(1,284	)			(730	)
Net interest and finance cost			4,386				2,067				8,484				3,938
Amortization and write-off of deferred financing costs charges			(541	)			(255	)			(1,145	)			(526	)
Payments for dry dock and special survey costs			467				1,621				3,174				1,621
EBITDA		$	12,730			$	16,657			$	24,778				32,363

		Three Month  Period  Ended  June 30, 2019 (unaudited)				Three Month  Period  Ended  June 30, 2018 (unaudited)			Six Month  Period  Ended  June 30, 2019 (unaudited)			Six Month  Period  Ended  June 30, 2018 (unaudited)
Net cash  provided by operating activities		$	9,358			$	12,232			$	9,321			$	19,613
Net cash used in investing activities		$	(54,892	)		$	(50,386	)		$	(56,647	)		$	(63,174	)
Net cash provided by financing activities		$	47,788			$	45,963			$	45,289			$	70,160

						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)		4,250		2008
Navios Delight(1)		4,250		2008
Navios Dedication(1)		4,250		2008
Navios Devotion(1)		4,250		2009
Navios Destiny(1)		4,250		2009
Navios Lapis		4,250		2009
Navios Tempo		4,250		2009
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		8,204		2006
Navios Unison		10,000		2010
Navios Constellation		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.