Market Overview

Navios Maritime Acquisition Corporation Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2019

Share:
  • Revenue
    • 41.8% increase in Q3 2019 revenue to $59.0 million
    • 50.7% increase in 9M 2019 revenue to $194.7 million
  • Net Cash from Operating Activities
    • $19.5 million in Q3 2019
    • $21.1 million in 9M 2019
  • Adjusted EBITDA
    • 141.7% increase in Q3 2019 adjusted EBITDA to $23.9 million
    • 143.1% increase in 9M 2019 adjusted EBITDA to $87.3 million
  • Term Loan B refinancing completed
    • $184.8 million new financing
      • Extended maturities through 2027
  • Deleveraging
    • 4% debt reduction YTD ($45.3 million)
    • $15.0 million equity raised in October 2019
  • Returning capital to stockholders:
    • Quarterly dividend: $0.30 per share

MONACO, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Navios Maritime Acquisition Corporation ("Navios Acquisition") (NYSE:NNA), an owner and operator of tanker vessels, reported its financial results today for the third quarter and the nine month period ended September 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, "I am pleased with our results for the third quarter of 2019. Navios Acquisition recorded revenue of $59.0 million and Adjusted EBITDA of $23.9 million, reflecting increases of about 42% and 142%, respectively, over the third quarter of 2018. We declared a quarterly distribution of $0.30 cents per share for the third quarter of 2019, for a current yield of about 16%."

Angeliki Frangou continued, "In a robust tanker rate market, we have a good mix of fixed revenue and market exposure. We have cash flow visibility from $430.0 million in long-term contracted revenue. About 43% of available days in 2020 are fixed, almost half of which with profit sharing. At the same time, we are positioned to capture upside, as 61.7% of available days in 2020 are open or on floating rates. All of our delivered tankers are on the water generating revenue, as we have no tankers now being fit with scrubbers."

HIGHLIGHTS — RECENT DEVELOPMENTS

Quarterly dividend: $0.30 per share

On November 5, 2019, the Board of Directors declared a quarterly cash dividend in respect of the third quarter of 2019 of $0.30 per share of common stock, which will be paid on January 9, 2020, to stockholders of record as of December 17, 2019. The declaration and payment of any further dividends remain subject to the discretion of the Board of Directors and will depend on, among other things, Navios Acquisition's cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable.

Equity Offering

On October 20, 2019, Navios Acquisition completed a registered direct offering of 1,875,000 shares of its common stock at $8.00 per share, raising gross proceeds of $15.0 million. Total net proceeds of the above transaction, net of agents' costs of $0.7 million and estimated offering costs $0.3 million, amounted to $14.0 million.

Term Loan B Refinancing and other debt developments

In October 2019, Navios Acquisition fully prepaid its Term Loan B facility due in June 2020. The outstanding balance of the Term Loan B as of June 30, 2019 was $196.8 million. Navios Acquisition funded the repayment as follows:

  1. $153.0 million financing through sale-and-leaseback transactions. The sale and leaseback transactions have (a) an average amortization profile of approximately 17 years on an age-adjusted basis, (b) annual interest of LIBOR plus a margin ranging from 335 bps to 360 bps and (c) an average maturity of 7 years;

  2. $31.8 million facility from a commercial bank in order to finance one VLCC. The facility bears an annual interest of LIBOR plus 280 bps, and matures in one year; and

  3. $12.0 million from cash on balance sheet.

Following the completion of the repayment of the Term Loan B, Navios Acquisition has no debt maturities until the third quarter of 2020. In the fourth quarter 2019 Navios Acquisition repurchased $7.0 million of Ship Mortgage Notes for a cost of $5.8 million. Year to date, Navios Acquisition reduced its debt by 4% or $45.3 million, compared to the outstanding balance as of December 31, 2018.

Amendment of the Management Agreement and the Administrative Services Agreement

In August 2019, Navios Acquisition extended the duration of its existing management agreement (the "Management Agreement") with Navios Tankers Management Inc. (the "Manager") until January 1, 2025. In addition management fees are fixed for two years commencing from January 1, 2020 at: (a) $6,825 per day per MR2 product tanker and chemical tanker vessel; (b) $7,225 per day per LR1 product tanker vessel; and (c) $9,650 per day per VLCC. The agreement also provides for a technical and commercial management fee of $50 per day per vessel and an annual increase of 3% after January 1, 2022 for the remaining period unless agreed otherwise. Drydocking expenses are reimbursed at cost for all vessels.

In August 2019, Navios Acquisition extended the duration of its existing administrative services agreement (the "Administrative Services Agreement") with the Manager until January 1, 2025, which provides for allocable general and administrative costs.

Fleet employment

On October 8, 2019, Navios Acquisition sold the Nave Electron, a 2002-built VLCC vessel of 305,178 dwt to an unaffiliated third party for a sale price of $25.3 million.

On October 17, 2019 the Nave Synergy, a 2010-built VLCC was chartered to a major charterer for 62 - 74 months at charterers' option at a net base rate of $48,153 per day with profit sharing arrangements. The Nave Buena Suerte a 2011-built VLCC will take over the contract when released from existing commitment. The Nave Photon, a 2008-built VLCC was chartered to a major charterer for 74 - 86 months at charterers' option with delivery between December 2019 and February 2020 at a net base rate of $48,153 per day with profit sharing arrangements. The TBN III bareboat chartered-in VLCC will take over the contract upon delivery in the third quarter 2021.

As of November 7, 2019, Navios Acquisition's fleet consisted of a total of 41 vessels, of which 13 are VLCCs (including three bareboat chartered-in VLCCs expected to be delivered in the third and fourth quarters of 2020 and the third quarter of 2021), 26 are product tankers, two are chemical tankers.

Currently, Navios Acquisition has contracted 42.7% of its available days on a charter-out basis for 2020, which are expected to generate revenues of approximately $112.1 million. The average base contractual net daily charter-out rate for the 38.3% of available days that are contracted on base rate and/or base rate with profit sharing arrangements is expected to be $20,917.

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Acquisition has compiled its consolidated statements of operations operations for the three and nine months ended September 30, 2019 and 2018. The quarterly information for 2019 and 2018 was derived from the unaudited condensed consolidated financial statements for the respective periods.  

Following the completion of the merger, effective as of December 13, 2018, Navios Midstream Partners L.P. ("Navios Midstream") is included in the consolidated financial statements of Navios Acquisition, as a wholly-owned subsidiary.

(Expressed in thousands of U.S. dollars) Three Month
Period ended
September 30, 
2019
(unaudited)

    Three Month
Period ended
September 30, 
2018
(unaudited)

    Nine Month
Period ended
September 30, 
2019

(unaudited)
    Nine Month
Period ended
September 30,
2018

(unaudited)
 
Revenue $ 58,965     $ 41,589     $ 194,669     $ 129,218  
Net loss $ (56,396 )   $ (23,408 )   $ (72,085 )   $ (69,942 )
Adjusted net loss $ (16,186 ) (1)   $ (23,133 )(3)   $ (34,180 ) (2)   $ (62,830 )(4)
Net cash provided by / (used in) operating activities $ 19,513     $ 7,139     $ 21,058     $ (23,855 )
EBITDA $ 16,413     $ 9,627     $ 82,560     $ 29,114  
Adjusted EBITDA $ 23,934 (1)   $ 9,902 (3)   $ 87,296 (2)   $ 35,910 (4)
Loss per share (basic) $ (4.18 )   $ (2.34 )   $ (5.38 )   $ (6.87 )
Adjusted Loss per share (basic) $ (1.20 ) (1)   $ (2.25 )(3)   $ (2.56 ) (2)   $ (6.15 ) (4)


(1) EBITDA for the three month period ended September 30, 2019 has been adjusted to exclude $7.3 million impairment loss relating to the sale of one VLCC and $0.2 million of non-cash stock based compensation. Net loss and loss per share (basic) for the three month period ended September 30, 2019 have been further adjusted to exclude $32.7 million accelerated amortization of intangible assets in connection with early termination of certain contracts.
   
(2) EBITDA for the nine month period ended September 30, 2019 has been adjusted to exclude $7.3 million impairment loss relating to the sale of one VLCC, $3.2 million gain on sale of vessels and $0.7 million of non-cash stock based compensation. Net loss and loss per share (basic) for the nine month period ended September 30, 2019 have been further adjusted to exclude $32.7 million accelerated amortization of intangible assets in connection with early termination of certain contracts and $0.5 million write off of deferred finance costs.
   
(3) EBITDA, net loss and loss per share (basic) for the three month period ended September 30, 2018 have been adjusted to exclude $0.3 million of non-cash stock based compensation.
   
(4) EBITDA, net loss and loss per share (basic) for the nine month period ended September 30, 2018 have been adjusted to exclude: (i) $6.0 million of negative effect on equity/ (loss) in net earnings of affiliated companies, relating to the sale of the Shinyo Kannika by Navios Midstream; (ii) $0.8 million of non-cash stock based compensation; and (iii) $0.03 million of gain from the sale of the Nave Galactic. Net loss and loss per share (basic) for the nine month period ended September 30, 2018 have been further adjusted to exclude a $0.3 million write-off of deferred finance costs.

EBITDA, Adjusted EBITDA, Adjusted net loss and Adjusted loss per share (basic) are non-GAAP financial measures and should not be used in isolation or substitution for Navios Acquisition's results (see Exhibit II for reconciliation of EBITDA and Adjusted EBITDA).
   

Three month periods ended September 30, 2019 and 2018

Revenue for the three month period ended September 30, 2019 increased by $17.4 million, or 41.8%, to $59.0 million, as compared to $41.6 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $12.8 million due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during the three month period ended September 30, 2019 as compared to the same period of 2018. Available days of the fleet increased to 3,491 days for the three month period ended September 30, 2019, as compared to 3,178 days for the three month period ended September 30, 2018, mainly as a result of the merger with Navios Midstream effective as of December 13, 2018. The time charter equivalent rate, or TCE Rate, increased to $15,349 for the three month period ended September 30, 2019, from $12,394 for the three month period ended September 30, 2018.

Time charter and voyage expenses for the three month period ended September 30, 2019 decreased by $4.2 million, or 43.8%, to $5.4 million, as compared to $9.6 million for the same period of 2018. The decrease was mainly attributable to $7.4 million of backstop commitment incurred in the three month period ended September 30, 2018; partially mitigated by a: (i) $3.0 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the three month period ended September 30, 2019; and (ii) $0.2 million increase in brokers' commission.

Net loss for the three month period ended September 30, 2019 was $56.4 million as compared to $23.4 million loss for the same period of 2018. Net loss was affected by the items described in the table above. Adjusted net loss for the three month period ended September 30, 2019 was $16.2 million as compared to $23.1 million for the same period of 2018. The decrease in adjusted net loss was mainly attributable to a: (a) $14.0 million increase in adjusted EBITDA; and (b) $0.3 million increase in interest income, partially mitigated by a: (i) $3.6 million increase in interest expense and finance cost; (ii) $3.4 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018; and (iii) $0.4 million increase in direct vessel expenses.

Adjusted EBITDA affected by the items described in the table above, for the three month period ended September 30, 2019 increased by approximately $14.0 million to $23.9 million, as compared to $9.9 million for the same period of 2018. The increase in Adjusted EBITDA was mainly due to a: (a) $17.4 million increase in revenue; (b) $4.2 million decrease in time charter and voyage expenses; and (c) $0.2 million decrease in other expense; partially mitigated by a: (i) $3.5 million increase in management fees due to the acquisition of Navios Midstream in December 2018 and to the amendment of the fees under the Management Agreement in May 2018; (ii) $3.6 million decrease in equity/ (loss) in net earnings of affiliated companies; and (iii) $0.6 million increase in general and administrative expenses (excluding stock-based compensation) mainly due to the acquisition of Navios Midstream.

Nine month periods ended September 30, 2019 and 2018

Revenue for the nine month period ended September 30, 2019 increased by $65.5 million, or 50.7%, to $194.7 million, as compared to $129.2 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $46.0 million due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during the nine month period ended September 30, 2019 as compared to the same period of 2018. Available days of the fleet increased from 9,439 days for the nine month period ended September 30, 2018, to 10,678 days for the nine month period ended September 30, 2019. The TCE Rate increased from $13,287 for the nine month period ended September 30, 2018, to $16,888 for the nine month period ended September 30, 2019.

Time charter and voyage expenses for the nine month period ended September 30, 2019 decreased by $7.4 million to $14.3 million as compared to $21.7 million for the nine month period ended September 30, 2018. The decrease was attributable to $17.9 million of backstop commitment to Navios Midstream incurred in the nine month period ended September 30, 2018; partially mitigated by a (ii) $9.2 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the nine month period ended September 30, 2019; and (ii) a $1.3 million increase in broker commission costs.

Net loss for the nine month period ended September 30, 2019 was $72.1 million as compared to $69.9 million loss for the same period of 2018. Net loss was affected by the items described in the table above. Adjusted net loss for the nine month period ended September 30, 2019 was $34.2 million as compared to $62.8 million for the same period of 2018. The decrease in adjusted net loss was mainly due to a: (a) $51.4 million increase in adjusted EBITDA; and (b) $1.0 million increase in interest income, partially mitigated by: (i) an $11.4 million increase in interest expense and finance cost; (ii) a $10.5 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018; and (iii) a $1.9 million increase in direct vessel expenses.

Adjusted EBITDA affected by the items described in the table above, for the nine month period ended September 30, 2019 increased by $51.4 million to $87.3 million, as compared to $35.9 million for the same period of 2018. The increase in Adjusted EBITDA was mainly due to a: (a) $65.5 million increase in revenue; (b) $7.4 million decrease in time charter and voyage expenses; (c) $1.2 million decrease in other expense; and (d) $1.3 million increase in other income; partially mitigated by: (i) an $11.6 million increase in management fees due to the acquisition of Navios Midstream in December 2018 and to the amendment of the fees under the Management Agreement in May 2018; (ii) a $7.8 million decrease in equity/ (loss) in net earnings of affiliated companies (excluding the $6.0 million of negative effect on equity/ (loss) in net earnings of affiliated companies, relating to the sale of the Shinyo Kannika by Navios Midstream); and (iii) a $4.6 million increase in general and administrative expenses (excluding stock-based compensation) mainly due to the acquisition of Navios Midstream.

Fleet Employment Profile  

The following table reflects certain key indicators of the performance of Navios Acquisition and its core fleet for the three and the nine month periods ended September 30, 2019 and 2018.

                               
  Three month period ended
September 30,
    Nine month period ended
September 30,
 
  2019
(unaudited)
    2018
(unaudited)
    2019
(unaudited)
    2018
(unaudited)
 
FLEET DATA                              
Available days(1)   3,491       3,178       10,678       9,439  
Operating days(2)   3,472       3,153       10,642       9,386  
Fleet utilization(3)   99.4 %     99.2 %     99.7 %     99.4
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