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Dryships Inc. Reports Financial and Operating Results for the Second Quarter of 2018

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ATHENS, Greece, July 31, 2018 (GLOBE NEWSWIRE) -- DryShips Inc. (NASDAQ:DRYS) ("DryShips" or the "Company"), a diversified owner and operator of ocean going cargo vessels, today announced its unaudited financial and operating results for the quarter ended June 30, 2018.

Second Quarter 2018 Financial Highlights

  • For the second quarter of 2018, the Company reported net income of $3.6 million, or $0.04 basic and diluted earnings per share.

  • Included in the second quarter of 2018 results are the following:


    • Vessel dry-docking costs of $3.3 million, or $0.03 per share.

    • Gain of $5.1 million, or $0.05 per share, on the sale of the Company's 2001 built Panamax vessel, the Maganari, to an unaffiliated buyer.

Excluding the above, the Company's net results would have amounted to a net income of $1.8 million, or $0.02 per share.

  • The Company reported Adjusted EBITDA of $13.3 million for the second quarter of 2018. (1)

(1) Adjusted EBITDA is a non-U.S. GAAP measure; please see later in this press release for reconciliation to net income/ (loss).

Updated Key Information as of July 30, 2018

  • Cash and cash equivalents: approximately $155.4 million (or $1.57 per share)
     
  • Book value of vessels: approximately $893.2 million (or $9.05 per share)
     
  • Debt outstanding balance: approximately $434.1 million (or $4.40 per share)
     
  • Number of Shares Outstanding:  98,708,716

Recent Developments

  • $50.0 million Common Stock Repurchase Program

As of July 31, 2018, the Company has repurchased a total of 5,565,992 shares of its common stock for an aggregate amount of $23.1 million, including commissions, pursuant to its previously announced stock repurchase program under which the Company may repurchase up to $50.0 million of its outstanding common stock until February 28, 2019. The current number of the Company's outstanding common stock is 98,708,716.

  • Suspension of Cash Dividend

While announcing the results of its common stock repurchase program under which the Company has repurchased a total of 5,565,992 shares, the Company's Board of Directors has decided to suspend the Company's previously announced cash dividend policy until further notice. As previously noted, both the dividend policy and common stock repurchase program are subject to the discretion of the Company's Board of Directors and may be suspended or amended at any time without notice.

  • Vessel Deliveries

On July 18 and July 24, 2018, the Company's Panamax vessels Redondo and Marbella, respectively, were delivered to their new owners according to the terms of the previously announced Memoranda of Agreement with unaffiliated buyers.

Fleet List

The table below describes the Company's fleet as of July 30, 2018:

  Year   Gross rate Redelivery  
  Built DWT Per day Earliest Latest
Drybulk fleet          
           
Panamax:          
Bargara(1) 2002 74,832 Spot N/A N/A
Capitola  2001 74,816 Spot N/A N/A
Catalina 2005 74,432 Spot N/A N/A
Levanto 2001 73,925 Spot N/A N/A
Ligari 2004 75,583 Spot N/A N/A
Majorca 2005 74,477 Spot N/A N/A
Mendocino(1) 2002 76,623 Spot N/A N/A
Rapallo 2009 75,123 Spot N/A N/A
Raraka 2012 76,037 Spot N/A N/A
           
Newcastlemax:          
Bacon 2013 205,170 T/C Index Linked Aug-18 Jan-19
Huahine 2013 206,037 $ 24,500 Feb-19 Apr-19
Judd 2015 205,796 $ 20,700 Jan-19 Apr-19
Marini 2014 205,854 T/C Index Linked Dec-18 Feb-19
Morandi 2013 205,854 T/C Index Linked Feb-19 May-19
           
Kamsarmax:          
Castellani 2014 82,129 Spot N/A N/A
Kelly 2017 81,300 Spot N/A N/A
Matisse 2014 81,128 Spot N/A N/A
Nasaka 2014 81,918 Spot N/A N/A
Valadon 2014 81,198 Spot N/A N/A
       
Tanker fleet          
           
Very Large Crude Carrier:          
Shiraga 2011 320,105 Spot N/A N/A
           
Suezmax:          
Marfa 2017 159,513 Spot N/A N/A
Samsara 2017 159,855 $18,000 Base rate plus profit share Mar.-22 May-25
           
Aframax:          
Balla 2017 113,293 Spot N/A N/A
Stamos 2012 115,666 Spot N/A N/A
           
Gas Carrier fleet          
           
Very Large Gas Carriers:          
Anderida(2) 2017 51,850 $ 29,997 Jun.-22 Jun.-25
Aisling(2)  2017 51,850 $ 29,997 Sep.-22 Sep.-25
Mont Fort(2) 2017 51,850 $ 28,833 Nov.-27 Nov.-27
Mont Gelé(2) 2018 51,850 $ 28,833 Jan.-28 Jan.-28
           
Offshore Supply fleet          
           
Platform Supply Vessels:          
Crescendo 2012 1,457 Laid up N/A N/A
Colorado 2012 1,430 Laid up N/A N/A
Oil Spill Recovery Vessels:          
Indigo 2013 1,401 Laid up N/A N/A
Jacaranda 2012 1,360 Laid up N/A N/A
Emblem 2012 1,363 Laid up N/A N/A
Jubilee 2012 1,317 Laid up N/A N/A
           

(1) Sold and expected to be delivered to new owners in 2018.

(2) Sold and expected to be delivered to new owners in 2018, subject to charterers' approval.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited)
(U.S. Dollars in thousands, except average daily results)

Drybulk  

Three Months Ended June 30,
   

Six Months Ended June 30,
    2017       2018       2017       2018  
Average number of vessels(1)   15.5       20.9       14.3       21.0  
Total voyage days for vessels(2)   1,410       1,850       2,580       3,740  
Total calendar days for vessels(3)   1,410       1,903       2,580       3,793  
Fleet utilization(4)   100.0 %     97.2 %     100.0 %     98.6 %
Time charter equivalent(5) $ 6,985     $ 11,431     $ 6,365     $ 11,225  
Vessel operating expenses (daily)(6) $ 6,320     $ 7,543     $ 5,787     $ 6,841  



Tanker
 

Three Months Ended June 30,
   

Six Months Ended June 30,
    2017       2018       2017       2018  
Average number of vessels(1)   1.9       4.3       1.0       4.1  
Total voyage days for vessels(2)   175       387       175       747  
Total calendar days for vessels(3)   175       387       175       747  
Fleet utilization(4)   100.0 %     100.0 %     100.0 %     100.0 %
Time charter equivalent(5) $ 10,057     $ 15,080     $ 10,057     $ 17,444  
Vessel operating expenses (daily)(6) $ 17,720     $ 7,674     $ 17,848     $ 7,764  




Gas Carrier
 

Three Months Ended June 30,
   

Six Months Ended June 30,
    2017       2018       2017       2018  
Average number of vessels(1)   0.0       4.0       0.0       3.9  
Total voyage days for vessels(2)   3       364       3       714  
Total calendar days for vessels(3)   3       364       3       714  
Fleet utilization(4)   100.0 %     100.0 %     100.0 %     100.0 %
Time charter equivalent(5) $ 14,667     $ 27,929     $ 14,667     $ 28,083  
Vessel operating expenses (daily)(6) $ 272,899     $ 8,536     $ 272,899     $ 9,125  

(1) Average number of vessels is the number of vessels that constituted the Company's fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company's fleet during the period divided by the number of calendar days in that period.

(2) Total voyage days for fleet are the total days the vessels were in the Company's possession for the relevant period net of dry-docking and laid-up days.

(3) Calendar days are the total number of days the vessels were in the Company's possession for the relevant period including dry-docking days and laid-up days.

(4) Fleet utilization is the percentage of time that the Company's vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. The Company's method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from the Company's vessels, the most directly comparable U.S. GAAP measure, because it assists the Company's management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.

(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.

Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) - continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. Dollars, and voyage days)

Drybulk   Three Months Ended June 30,   Six Months Ended June 30,
    2017     2018       2017       2018  
Voyage revenues $ 12,225   $ 22,748     $ 20,713     $ 45,281  
Voyage expenses   (2,376 )   (1,601 )     (4,292 )     (3,299 )
Time charter equivalent revenues $ 9,849   $ 21,147     $ 16,421     $ 41,982  
Total voyage days for fleet    1,410     1,850       2,580       3,740  
Time charter equivalent (TCE) $ 6,985   $ 11,431     $ 6,365     $ 11,225  


Tanker   Three Months Ended June 30,   Six Months Ended June 30,
    2017     2018       2017       2018  
Voyage revenues $ 3,606   $ 9,918     $ 3,606     $ 21,147  
Voyage expenses   (1,846 )   (4,082 )     (1,846 )     (8,116 )
Time charter equivalent revenues $ 1,760   $ 5,836     $ 1,760     $ 13,031  
Total voyage days for fleet    175     387       175       747  
Time charter equivalent (TCE) $ 10,057   $ 15,080     $ 10,057     $ 17,444  


Gas Carrier   Three Months Ended June 30,   Six Months Ended June 30,
    2017     2018       2017       2018  
Voyage revenues $ 50   $ 10,590     $ 50     $ 20,883  
Voyage expenses   (6 )   (424 )     (6 )     (832 )
Time charter equivalent revenues $ 44   $ 10,166     $ 44     $ 20,051  
Total voyage days for fleet    3     364       3       714  
Time charter equivalent (TCE) $ 14,667   $ 27,929     $ 14,667     $ 28,083  

DryShips Inc.

Financial Statements
Unaudited Condensed Consolidated Statements of Operations

(Expressed in Thousands of U.S. Dollars
except for share and per share data)
   

Three Months Ended June 30,
  Six Months Ended June 30,
    2017     2018       2017     2018  
                   
REVENUES:                  
Voyage revenues $ 16,381   $ 43,256     $ 28,189   $ 87,311  
    16,381     43,256       28,189     87,311  
                   
EXPENSES:                  
Voyage expenses   4,395     6,107       6,629     12,247  
Vessel operating expenses   15,532     20,560       23,686     38,660  
Depreciation   2,290     7,156       3,102     13,974  
Impairment loss,(gain)/loss from sale of vessel and other   300     (5,109 )     300     (5,109 )
General and administrative expenses   7,082     7,612       15,795     14,781  
Other, net   -     (347 )     (12 )   (365 )
                   
Operating income/(loss)   (13,218 )   7,277       (21,311 )   13,123  
                   
OTHER INCOME / (EXPENSES):                  
Interest and finance costs, net of interest income   (2,270 )   (3,915 )     (4,709 )   (8,805 )
Other, net   (156 )   214       (331 )   31  
Total other expenses, net   (2,426 )   (3,701 )     (5,040 )   (8,774 )
                   
Net income/(loss)   (15,644 )   3,576       (26,351 )   4,349  
                   
Net income/(loss) attributable to DryShips Inc.  

$
(15,644 )  

$
3,576     $ (26,351 ) $ 4,349  
                   
Net income/(loss) attributable to DryShips Inc. common stockholders   (15,644 )   3,576       (26,351 )   4,349  
Earnings/(Losses) per common share, basic and diluted (1) $ (37.12 ) $ 0.04     $ (108.25 ) $ 0.04  
Weighted average number of shares, basic and diluted (1)   421,418     100,581,638       243,433     102,123,365  
                   

(1) Share and per share data for 2017 give effect to the 1-for-7 reverse stock split on July 21, 2017.


DryShips Inc.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in Thousands of U.S. Dollars)   December 31, 2017    

 

 

June 30, 2018
         
ASSETS        
           
  Cash, cash equivalents, including restricted cash (current and non-current) $ 30,226 $ 140,241
  Other current and non-current assets    123,713   97,722
  Advances for vessels under construction   31,898   -
  Vessels, net   749,088   887,094
  Total assets   934,925   1,125,057
           
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
           
           
  Total debt   216,969   433,335
  Total other liabilities   10,920   7,953
  Total stockholders' equity   707,036   683,769
  Total liabilities and stockholders' equity $ 934,925 $ 1,125,057
           
           
           
SHARE COUNT DATA          
Common stock issued   104,274,708   104,274,708    
Less: Treasury stock   -   (5,565,792 )  
Common stock issued and outstanding   104,274,708   98,708,916    

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, and certain other non-cash items as described below. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, and the Company's calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by the Company's lenders as a credit metric and the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

The following table reconciles net income / (loss) to Adjusted EBITDA:

(U.S. Dollars in thousands)     Three Months Ended June 30, 2017   Three Months Ended June 30, 2018     Six Months Ended June 30, 2017     Six Months Ended June 30, 2018
                       
Net income/(loss) attributable to Dryships Inc   $ (15,644 ) $ 3,576     $ (26,351 )   $ 4,349  
                       
Add: Net interest expense     2,270     3,915       4,709       8,805  
Add: Depreciation     2,290     7,156       3,102       13,974  
Add: Dry-dockings and class survey costs     -     3,310       -       3,699  
Add: Impairment loss, (gain)/loss from sale of vessel and other     300     (5,109 )     300       (5,109 )
Add: Write-off of capitalized expenses     -     470       -       470  
Add: Income taxes     11     2       20       2  
Adjusted EBITDA   $ (10,773 ) $ 13,320     $ (18,220 )   $ 26,190  

About DryShips Inc.

The Company is a diversified owner and operator of ocean going cargo vessels that operate worldwide. As of July 31, 2018, and not giving effect to any pending vessel transactions, the Company operates a fleet of 34 vessels comprising of (i) 9 Panamax drybulk vessels; (ii) 5 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 2 Aframax tankers; (vi) 2 Suezmax tanker; (vii) 4 Very Large Gas Carriers; and (viii) 6 Offshore Support Vessels, including 2 Platform Supply and 4 Oil Spill Recovery Vessels.

DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."

Visit the Company's website at www.dryships.com

Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.

Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the the strength of world economies and currencies, general market conditions, including changes in charter rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company's inability to procure acquisition financing, default by one or more charterers of the Company's ships, changes in demand for drybulk, oil or natural gas commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company's voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company's relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F.

Investor Relations / Media:

Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com

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