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Pioneer Marine Inc. Announces Financial Results for the Second Quarter and Six Months Ended June 30, 2018

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MAJURO, Marshall Islands, Aug. 28, 2018 (GLOBE NEWSWIRE) -- Pioneer Marine Inc. and its subsidiaries (OTC:PNRM) ("Pioneer Marine," or the "Company") a leading shipowner and global drybulk handysize transportation service provider announced its financial and operating results for the second quarter ended June 30, 2018.

Financial Highlights:

  • Net Income
    • $1.1 million or $0.04 per share for Q2 2018, increased by $3.0 million compared to a loss of $1.9 million for Q2 2017.
    • $2.4 million or $0.08 per share for the six months period of 2018, increased by $9.2 million compared to the same period in 2017 where a loss of $6.8 million was reported.
       
  • Time Charter equivalent (TCE) revenue
    • $13.6 million for Q2 2018, increased by $2.5 million or 23% compared to Q2 2017.
    • $26.5 million for the six months in 2018, increased by $5.4 million or 25% compared to the same period in 2017.
       
  • Adjusted EBITDA*
    • $5.8 million for Q2 2018, increased by $2.7 million compared to $3.1 million for Q2 2017
    • $10.4 million for the six months in 2018, increased by $6.1 million compared to the same period in 2017 where Adjusted EBITDA was $4.3 million.

Recent Events:

  • On June 13, 2018 the Company entered into a credit facility with ABN Amro Bank N.V. for an amount of $64.4 million, with significantly improved terms for the Company. The facility was used to partially finance the acquisition of the three second-hand vessels and to refinance one of the Company's existing loan facilities.
     
  • On June 5, 2018 Pioneer took delivery of M/V Monterey Bay (a 36,887 dwt Korean bulk carrier) and on June 18, 2018 the M/V Alsea Bay (a 36,892 dwt Korean bulk carrier) was delivered to the Company.
     
  • On July 2, 2018 Pioneer took delivery of M/V Liberty Bay (a 36,892 DWT Korean bulk carrier) and increased the total fleet vessel to 19 bulkers, comprising of 17 Handysize vessels, one Handymax and one Supramax.
    This delivery concluded the acquisitions of the three modern bulk carriers from Interorient Navigation Company Limited of Cyprus for a total purchase price of $39.0 million.
  • The Company repurchased 1,543,910 of its ordinary shares at a discount compared to its Net Asset Value ("NAV").

As of June 30, 2018, the Company had a total liquidity of $52.8 million inclusive of $13.7 million in restricted cash.  The Company has no capital commitments.

*For reconciliation and definition of Adjusted EBITDA refer to "Summary of Operating Data (unaudited)" section within this press release.

Torben Janholt, Chief Executive Officer commented: "We are pleased with the development of Pioneer over the last six months. Good cooperation between our board, management and engaged employees have made our positive results possible. The Company reported net income of $ 2.4 million for the first half of 2018 as well as an increased EBITDA of $10.4 million.  The acquisition of three modern second-hand vessels combined with new attractive finance for the Company is evidence for the positive momentum we are experiencing and an indicator of our Company's potential.

"Now with a fleet of 19 efficient vessels and an increase in chartering activity Pioneer is more than ever ready to serve customers worldwide. In spite of looming trade wars the dry bulk market still experiences a reasonable balance between supply and demand and for the remainder of the year we look forward with optimism."

Financial Review:  Three months ended June 30, 2018

TCE revenue for the three-month period ended June 30, 2018 increased by $2.5 million, or 23%, to $13.6 million as compared to $11.1 million for the respective period of 2017. The increase is mainly attributable to the increase in the market rates for the second quarter of 2018, and partly due to the additions of the M/V Monterey and the M/V Alsea Bay. TCE rate for the second quarter of 2018 increased to $9,484 per day as compared to $8,009 per day for the second quarter of 2017, increased by 18%.

Adjusted EBITDA for the three-month period ended June 30, 2018 increased by $2.7 million compared to same period in previous year. The increase is mainly due to: i) $2.5 million increase in TCE revenue as described above, ii) the decrease of $0.2 million in Operating Expenses resulting from efficient cost control initiatives and iii) $0.2 decrease in General and Administrative expenses attributable to the efficiencies achieved, partially offset with the increase of $0.2 million in Other expenses, net.

One off items for the three month period ended June 30, 2018 include the $0.8 million loss on debt extinguishment resulting from the refinancing of one of the Company's existing facilities, while one off items for the three months ended June 30, 2017 include the $0.1 million loss on vessel disposition resulting from the sale of M/V Azure Bay and the $1.0 million restructuring costs expensed in the same period.

After adjusting net income/loss for the one-off items occurred within the three months ended June 30, 2018 and 2017 respectively, the Adjusted Net Income was increased by $2.7 million for the second quarter of 2018 as compared to same period in previous year. The increase is attributable to the increased Adjusted EBITDA of $2.7 million as described above, the decrease of $0.1 million in depreciation expense, drydock cost and taxes, net partially offset with the increase of $0.1 million in Interest expense and interest income, net resulting from the increased floating rates.

Financial Review:  Six months ended June 30, 2018

TCE revenue for the six-month period ended June 30, 2018 increased by $5.4 million, or 25%, to $26.5 million as compared to $21.1 million for the respective period of 2017. The increase is mainly attributable to the increase in the market rates during 2018, and partly due to the additions of the M/V Monterey and the M/V Alsea Bay. TCE rate for the first half of 2018 increased to $9,240 per day as compared to $7,495 per day for the second quarter of 2017, increased by 23%.

Adjusted EBITDA for the six-month period ended June 30, 2018 increased by $6.1 million compared to same period in previous year. The increase is mainly due to: i) $5.4 million increase in TCE revenue as described above, ii) the decrease of $0.6 million in Operating Expenses resulting from efficient cost control initiatives and iii) $0.4 decrease in General and Administrative expenses attributable to the efficiencies achieved, partially offset with the increase of $0.3 million in Other expenses, net.

One off items for the six month period ended June 30, 2018 include the $0.8 million loss on debt extinguishment resulting from the refinancing of the Company's existing  loan facilities, while one off items for the six months ended June 30, 2017 include the $0.1 million loss on vessel disposition resulting from the sale of M/V Azure Bay and the $1.0 million restructuring costs expensed in the same period.

After adjusting net income/loss for the one-off items occurred within the six months ended June 30, 2018 and 2017 respectively, the Adjusted Net Income was increased by $8.8 million for the first half of 2018 as compared to same period in previous year. The increase is attributable to the increased Adjusted EBITDA of $6.1 million as described above, the decrease of $0.1 million in Interest expense and interest income, net and the decrease of $2.6 million relating to the drydock expense due to the fact that during 2018 two fleet vessels underwent drydock as compared to six vessels during same period in 2017.

Current Fleet List

Vessel Yard
DWT Year Built
           
Handysize      
Calm Bay Saiki Heavy Industries 37,534 2006
Reunion Bay Kanda Shipbuilding 32,354 2006
Fortune Bay Shin Kochijyuko 28,671 2006
Ha Long Bay Kanda Kawajiri 32,311 2007
Teal Bay Kanda Kawajiri 32,327 2007
Eden Bay Shimanami Shipyard 28,342 2008
Emerald Bay Kanda Shipbuilding 32,258 2008
Mykonos Bay Jinse Shipbuilding 32,411 2009
Resolute Bay Hyundai Vinashin 36,767 2012
Jupiter Bay Tsuji Heavy Industries 30,153 2012
Venus Bay Tsuji Heavy Industries 30,003 2012
Orion Bay Tsuji Heavy Industries 30,009 2012
Falcon Bay Yangzhou Guoyu Shipbuilding 38,464 2015
Kite Bay Yangzhou Guoyu Shipbuilding 38,419 2016
Alsea Bay Hyundai Mipo Dockyard Co. Ltd 36,892 2011
Liberty Bay Hyundai Mipo Dockyard Co. Ltd 36,892 2012
Monterey Bay Hyundai Mipo Dockyard Co. Ltd 36,887 2013
       
Handymax      
Paradise Bay Oshima Shipbuilding 46,232 2003
       
Supramax      
Tenacity Bay Jiangsu Hantong Ship Heavy Industry 56,842 2008
       

Summary of Operating Data (unaudited)
(In thousands of U.S. Dollars except per share data)

      Three
Months
Ended
June 30,
2018

  Three
Months
Ended June
30, 2017
  Six Months
Ended June
30, 2018
Six Months
Ended
June 30,
2017

 
Revenue, net     16,699   12,398   32,059 23,268  
Voyage expenses     (3,052)   (1,290)   (5,596) (2,168)  
Time charter equivalent revenue      13,647   11,108   26,463 21,100  
             
Vessel operating expense     (6,709)   (6,898)   (13,898) (14,544)  
Drydock expense     (553)   (598)   (594) (3,217)  
Depreciation expense     (2,052)   (2,010)   (4,087) (4,149)  
General and administration expense     (881)   (1,082)   (1,752) (2,194)  
Loss on vessel disposition     -   (62)   - (62)  
Loss on debt extinguishment     (755)   -   (755) -  
Restructuring costs     -   (1,001)   - (1,001)  
Interest expense and finance cost     (1,538)   (1,393)   (2,934) (2,852)  
Interest income     212   160   422 298  
Other expenses and taxes, net     (300)   (121)   (493) (155)  
Net Income/ (loss)     1,071   (1,897)   2,372 (6,776)  
Adjusted net income/(loss)(2)     1,826   (834)   3,127 (5,713)  
                   
Net income /(loss) per share, basic and diluted     0.04   (0.06)   0.08 (0.23)  
Adjusted net income/(loss) per share, basic and diluted(2)     0.07   (0.03)   0.11 (0.19)  
           
      Three
Months
Ended
June 30,
2018

  Three
Months
Ended June
30, 2017
  Six Months
Ended June
30, 2018
Six Months
Ended
June 30,
2017
 
             
Net Income/ (loss)     1,071   (1,897)   2,372 (6,776)  
Add: Loss on vessel disposition     -   62   - 62  
Add: Restructuring costs     -   1,001   - 1,001  
Add: Loss on debt extinguishment     755   -   755 -  
Adjusted Net Income/ (loss)     1,826   (834)   3,127 (5,713)  
Add: Depreciation expense     2,052   2,010   4,087 4,149  
Add: Drydock expense     553   598   594 3,217  
Add: Interest expense and finance cost     1,538   1,393   2,934 2,852  
Add: Other taxes     27   70   85 103  
Less: Interest income     (212)   (160)   (422) (298)  
Adjusted EBITDA(1)     5,784   3,077   10,405 4,310  

(1) Adjusted EBITDA represents net income/(loss) before interest, other taxes, depreciation and amortization, drydock expense, loss on vessel disposition, restructuring costs and loss on debt extinguishment and is used as a supplemental financial measure by management to assess our financial and operating performance.  We believe that Adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period.  We believe that including Adjusted EBITDA as a financial and operating measure benefits investors in selecting between investing in us and other investment alternatives.  Adjusted EBITDA does not represent and should not be considered as an alternative to net income/(loss) or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies.

(2) Adjusted net income/(loss) and related per share amounts is not a measure prepared in accordance with U.S. GAAP and should not be used in isolation or substitution of Company's results.             

           
Vessel Utilization:   Three
Months
Ended June
30, 2018
Three
Months
Ended June
30, 2017
Six Months
Ended June
30, 2018
Six Months
Ended June
30, 2017
Ship days (2)   1,494   1,459   2,934   2,989  
Less: Off-hire days   39   16   54   74  
Less: Off-hire days due to drydock   16   56   16   100  
Operating days (3)   1,439   1,387   2,864   2,815  
Fleet Utilization (4)   96%   95%   98%   94%  
           
TCE per day- $ (1)   9,484   8,009   9,240   7,495  
Opex per day- $ (6)   4,491   4,727   4,737   4,865  
G&A expenses per day- $ (7)   590   742   597   734  
Vessels at period end   18   16   18   16  
Average number of vessels during the period (5)   17   16   16   17  
           

(1) Time Charter Equivalent, or TCE revenue, are non-GAAP measures.  Our method of computing TCE revenue is determined by voyage revenues less voyage expenses (including bunkers and port charges).  Such TCE revenue, divided by the number of our operating days during the period, is TCE per day, which is consistent with industry practice.  TCE revenue is included because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters and time charters), and it provides useful information to investors and management.
(2) Ship days: We define ship days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us.  Ship days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
(3) Operating days: We define operating days as the number of our ship days in a period less days required to prepare vessels acquired for their initial voyage and off-hire days associated with off-hire for undergoing repairs, drydocks or special surveys.  The Company uses operating days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
(4) Fleet utilization is defined as the ratio of operating days to ship days.
(5) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of ship days divided by the number of calendar days in that period.
(6) Opex per day: is calculated by dividing vessel operating expenses by ship days for the relevant time period.
(7) G&A expenses per day: is calculated by dividing general and administrative expenses by ship days for the relevant time period.


Condensed Consolidated Balance Sheets (Unaudited)  
(In thousands of U.S. Dollars)  

As at   June 30, 2018 December 31, 2017
ASSETS      
Cash & cash equivalents   39,093 61,354
Restricted cash (current and noncurrent)   13,738 12,468
Vessels, net   193,503 171,387
Other receivables   8,068 5,449
Advances for vessels acquisitions   13,000 -
Other assets   57 62
Total assets   267,459 250,720
       
LIABILITIES AND EQUITY      
       
Accounts payable and accrued liabilities   5,200 4,249
Deferred revenue   1,105 656
Total debt, net of deferred finance costs   111,748 92,535
Total liabilities   118,053 97,440
       
Shareholders' equity   149,406 153,280
Total liabilities and shareholders' equity   267,459 250,720
       

Condensed Consolidated Statement of Cash Flows (Unaudited) 
(In thousands of U.S. Dollars)                                                     

      Six Months Ended
June 30, 2018
  Six Months Ended
June 30, 2017
 
Cash flows from operating activities      
Net Income/ (Loss)     2,372   (6,776)  
Adjustments to reconcile net income/ (loss) to net cash provided by/ (used in)    
operating activities:        
Depreciation     4,087   4,149  
Amortization of deferred finance fees     363   415  
Loss on debt extinguishment     755   -  
Loss on vessel disposition     -   62  
Changes in operating assets and liabilities   (1,453)   (96)  
Net cash provided by/ (used in) operating activities   6,124   (2,246)  
             
Cash flows from investing activities            
Payments for vessel acquisition and improvements   (26,149)   (151)  
Advances for vessels acquisitions   (13,000)   -  
Cash proceed from vessel sale -   6,982  
Purchase of other fixed assets     (17)   (7)  
Increase in short term investment     -   (15,083)  
Net cash used in by investing activities   (39,166)   (8,259)  
             
Cash flows from financing activities            
Loan Proceeds     64,400   -  
Payment of Debt extinguishment fees     (338)   -  
Loan repayments and prepayments     (45,587)   (9,866)  
Payment of deferred finance fees and other loan fees   (193)   (44)  
Repurchase of common stock   (6,231)   -  
Net cash provided by/ (used in) financing activities   12,051   (9,910)  
           
Net decrease in cash and cash equivalents   (20,991)   (20,415)  
Cash and cash equivalents and Restricted cash at the beginning of the period 73,822   81,822  
Cash and cash equivalents and Restricted cash at period end 52,831   61,407  
     

About Pioneer Marine Inc.

Pioneer Marine is a leading ship owner and global drybulk handysize transportation service provider. Pioneer Marine currently owns seventeen Handysize, one Handymax and one Supramax drybulk carriers.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. 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. Forward-looking statements 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 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 this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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 our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydock and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors.

Contact:
Pioneer Marine Inc.
Torben Janholt CEO
+45 21 639 232, +30 212222 3750

Investor Relations / Media
Capital Link, Inc.
Paul Lampoutis
+212 661 7566
pioneermarine@capitallink.com

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