Global Ship Lease, Inc. (NYSE:GSL) (the “Company” or “Global Ship
Lease”), a containership charter owner, announced today its
unaudited results for the three months ended March 31, 2019.
First Quarter 2019 - Reported operating
revenues(1) of $64.5 million for the first quarter 2019.
- Reported net income(2) of $10.1 million for the first quarter
2019.
- Generated $40.5 million of Adjusted EBITDA(3) for the first
quarter 2019.
- Effected a one-for-eight reverse stock split
of the Company's Class A common shares following approval at a
special meeting of shareholders held on March 20, 2019. The reverse
stock split became effective as of the opening of trading on the
NYSE on March 25, 2019.
- Agreed a three-year charter with Hapag-Lloyd for the
2015-built, 9,115 TEU containership UASC Al Khor. The new charter,
which is in direct continuation of the current charter, is expected
to commence in June, 2019, with re-delivery in the second quarter
2022. The charter is expected to generate approximately $28 million
of Adjusted EBITDA.
- Agreed a minimum 30-month / maximum 38-month
charter with Maersk Line for the 2000-built, 5,936 TEU
containership Tasman. The new charter is expected to commence in
July 2019 on the completion of the current charter and is subject
to a further 12-month extension at the charterer’s option. The
charter is expected to generate approximately $5.3 million of
Adjusted EBITDA for the median firm period and an additional $4.4
million if the 12-month extension option is exercised.
- Agreed minimum 21-month / maximum 24-month
charters with ZIM for the 2000-built, 5,936 TEU containerships
Dimitris Y and Ian H. The new charters are expected to commence in
June and July, 2019 in direct continuation of their current
charters, and to generate approximately $4.4 million of Adjusted
EBITDA per vessel for the median firm period.
- Agreed new five year charters with MSC for 8,667 TEU GSL
Tianjin (built 2005) and OOCL Qingdao (built 2004) (to be renamed
MSC Tianjin and MSC Qingdao). The new charters are expected to
commence on redelivery of vessels by current charterers in late Q2
early Q3 and are expected to generate Adjusted EBITDA of
approximately $25.6 million per vessel for the median firm
period.
- Agreed to retrofit scrubbers on three vessels against longer
charters at premium rates, already announced.
George Youroukos, Executive Chairman of Global Ship Lease,
stated, “GSL has continued to benefit from the integrated
commercial platform created through the Poseidon merger and from
our ability to offer charterers vessels with what we believe to be
best-in-class specifications and which provide the lowest slot
costs in an increasingly cost-conscious liner industry. Amid
consistently strong demand for our high-specification
containerships, which are focused in vessel classes experiencing
net supply contraction, we have made substantial progress in
extending our forward contract coverage and locking in contracted
cashflow at a time when charter rates have shown significant
improvement. In particular, a recent surge of demand for high
reefer capacity post-panamax vessels has enabled us to secure
profitable, multi-year charters for some of the older vessels in
our fleet. Moving forward, we remain confident in the supportive
long-term fundamentals for mid-sized and smaller containerships,
and we will continue to take action to fully unlock the value of
GSL’s leading commercial capabilities, strong balance sheet,
extensive contracted revenue, and high-quality, modern fleet.”
Ian Webber, Chief Executive Officer of Global Ship Lease,
commented, “Having successfully integrated GSL and Poseidon, we are
seeing the anticipated wide-ranging benefits of our superior
platform which are reflected in every aspect of our business. Our
success in securing six longer-term charters in 2019 adds
approximately $146 million, or 21.4%, to mid-point contracted net
revenue, improving forward charter cover and cashflow visibility.
Altogether, we are ensuring that GSL is in a position to fully
benefit from opportunities arising out of the ongoing market
recovery.”
SELECTED FINANCIAL DATA – UNAUDITED (thousands
of U.S. dollars)
|
Three |
Three |
|
months ended |
months
ended |
|
March 31, 2019 |
March
31, 2018 |
|
|
|
Operating
Revenues (1) |
64,514 |
36,146 |
Operating
income |
29,225 |
15,491 |
Net Income
(2) |
10,052 |
4,192 |
Adjusted
EBITDA(3) |
40,527 |
23,653 |
|
|
|
The results for the three months ended March 31, 2019 include
the results of the Poseidon Containers containerships acquired on
November 15, 2018 (the “Poseidon Containers Fleet”).
(1) Operating Revenues are net of address commissions. Brokerage
commissions are included in Time charter and voyage expenses.
(2) Net Income available to common shareholders.
(3) Adjusted EBITDA is a non-US Generally Accepted Accounting
Principles (US GAAP) financial measure, as explained further in
this press release, and are considered by Global Ship Lease to be a
useful measure of its performance. For reconciliations of
this non-GAAP financial measure to net income, the most directly
comparable US GAAP financial measure, please see “Reconciliation of
Non-U.S. GAAP Financial Measure” below.
Following the Poseidon Transaction, minor reclassifications of
expenses and balance sheet items have been made.
Operating Revenues and Utilization The fleet generated operating
revenues from fixed-rate time charters of $64.5 million in the
three months ended March 31, 2019, an increase of $28.4 million
compared to $36.1 million for the first quarter of 2018, with the
increase principally due to the addition of the GSL Valerie in June
2018 and the Poseidon Containers Fleet on November 15, 2018,
partially offset by reduced revenue from GSL Ningbo as the charter
for this vessel renewed at a lower rate in September 2018. There
were 3,420 ownership days in the quarter, an increase of 111%
compared to 1,620 days in the first quarter of 2018, which was
primarily due to the addition of the GSL Valerie and the Poseidon
Containers Fleet. In the first quarter of 2019, there was no
planned offhire from regulatory drydocking and five days of
unplanned offhire, giving an overall utilization of 99.8%. There
were 17 days offhire in the first quarter of 2018, of which 13 were
for a scheduled drydocking, giving an overall utilization of
99.0%.
The table below shows our fleet utilization for the three months
ended March 31, 2019 and 2018 and for the years ended December 31,
2018, 2017, 2016, 2015 and 2014.
|
|
|
|
|
|
|
|
|
Three months ended |
Year ended |
|
Mar 31, |
Mar 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Days |
2019 |
2018 |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
|
|
|
|
|
|
Ownership days |
3,420 |
|
1,620 |
|
7,675 |
|
6,570 |
|
6,588 |
|
6,893 |
|
6,270 |
|
Planned offhire - scheduled drydockings |
0 |
|
(13 |
) |
(34 |
) |
(62 |
) |
(100 |
) |
(9 |
) |
(48 |
) |
Unplanned offhire |
(5 |
) |
(4 |
) |
(17 |
) |
(40 |
) |
(3 |
) |
(7 |
) |
(12 |
) |
Idle time |
0 |
|
0 |
|
(47 |
) |
0 |
|
0 |
|
(13 |
) |
(64 |
) |
Operating days |
3,415 |
|
1,603 |
|
7,577 |
|
6,468 |
|
6,485 |
|
6,864 |
|
6,146 |
|
|
|
|
|
|
|
|
|
Utilization |
99.8 |
% |
99.0 |
% |
98.7 |
% |
98.4 |
% |
98.4 |
% |
99.6 |
% |
98.0 |
% |
There were two regulatory drydockings in 2018 and four in 2017.
Four regulatory drydockings are due in 2019.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, repairs, maintenance, insurance and technical
management fees, were $21.0 million for the three months ended
March 31, 2019, compared to $10.4 million in the prior year period.
The increase was due to 1,800 (up 111%) additional ownership days
as a result of the acquisition of the Poseidon Containers Fleet and
the addition of GSL Valerie. The average cost per ownership day in
the quarter was $6,127, compared to $6,432 for the prior year
period, down $305 per day.
Time Charter and Voyage Expenses
Time charter and voyage expenses comprise mainly commission paid
to ship brokers, the cost of bunker fuel for owner’s account when a
vessel is off-hire or idle and miscellaneous costs associated with
a vessel’s voyage. Time charter and voyage expenses were $1.6
million for the three months ended March 31, 2019, compared to $0.1
million in the prior year period. The increase was mainly due to
the addition of the Poseidon Containers Fleet, all of which incur
such commission, compared to our legacy vessels, where commission
has been paid only for those which have completed their initial
charters to CMA CGM or OOCL and which have been employed on a new
charter obtained with the assistance of a broker.
Depreciation and amortization Depreciation and amortization for
the three months ended March 31, 2019 was $10.8 million, compared
to $8.2 million in the prior year period in 2018; the increase was
mainly due to the addition of the Poseidon Containers Fleet offset
by a reduction due to the effect of lower book values for a number
of vessels following an impairment charge taken in December 2018 as
well as a change in estimated scrap value per LWT to $400.
General and Administrative Expenses General and administrative
expenses were $2.0 million in the three months ended March 31,
2019, compared to $1.9 million in the prior year period. The
increase was mainly due to increase in payroll and other costs
associated with the Poseidon Transaction.
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was $40.5 million for
the three months ended March 31, 2019, an increase from $23.7
million for the prior year period, mainly as a result of the
addition of the Poseidon Containers Fleet.
Interest Expense Debt at March 31, 2019 totaled $882.9 million,
comprising $340.0 million of indebtedness on our 9.875% notes due
2022 (our “Notes”), $34.8 million of indebtedness under a secured
term loan, both collateralized by 18 vessels, $500.0 million bank
debt collateralized by the Poseidon Containers Fleet and $8.1
million drawn under our growth facility and secured by one
vessel.
Debt at March 31, 2018 totaled $414.8 million, comprised $360.0
million outstanding on our Notes and $54.8 million under the
secured term loan.
Interest expense for the three months ended March 31, 2019, was
$19.4 million, an increase of $8.6 million, or 80%, on the interest
expense for the prior year period of $10.8 million due to the
assumption of debt associated with the Poseidon Transaction.
Interest income for the three months ended March 31, 2019 was
$0.4 million, an increase of $0.1 million compared to the prior
year period. The increase was mainly due to higher average cash
balances and increased interest rates.
Other income, net
Other income, net is mainly comprised of gains in bunkers
following deliveries and redeliveries of vessels from charterers
and passenger income. Other income, net was $0.5 million in the
three months ended March 31, 2019, compared to $0.01 in the prior
year period; the increase was mainly due to the addition of the
Poseidon Containers Fleet.
Taxation
Taxation for the three months ended March 31, 2019 was $16,000
compared to $15,000 in the first quarter of 2018.
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost
of which for the three months ended March 31, 2019 was $0.8
million, the same as in the prior year period.
Net Income Available to Common Shareholders Net income for the
three months ended March 31, 2019 was $10.1 million, compared to
$4.2 million in the prior year period.
Fleet
The following table provides information about our fleet of 38
vessels as at March 31, 2019.
|
|
|
|
|
|
|
|
|
Vessel Name |
TEUs |
LWT |
Year Built |
Charterer |
Earliest Charter Expiry Date |
Latest Charter Expiry Date |
Daily Charter Rate $ |
|
|
|
|
|
|
|
|
CMA CGM Thalassa |
11,040 |
38,577 |
2008 |
CMA CGM |
4Q25 |
1Q26 |
47,200 |
UASC Al Khor(1) |
9,115 |
31,764 |
2015 |
Hapag-Lloyd |
1Q19 |
2Q19(2) |
40,000(2) |
Anthea Y(1) |
9,115 |
31,890 |
2015 |
COSCO |
2Q20 |
3Q20 |
39,200 |
Maira XL(1) |
9,115 |
31,820 |
2015 |
COSCO |
2Q20 |
3Q20 |
39,200 |
GSL Tianjin |
8,667 |
34,243 |
2005 |
CMA CGM |
2Q19 |
3Q19(3) |
13,000(3) |
OOCL Qingdao |
8,667 |
34,305 |
2004 |
OOCL |
2Q19 |
2Q19(3) |
14,000(3) |
GSL Ningbo |
8,667 |
34,243 |
2004 |
Maersk |
2Q19 |
4Q20 |
12,100(4) |
Mary(1) |
6,927 |
23,424 |
2013 |
CMA CGM |
3Q23 |
4Q23 |
25,910 |
Kristina (1) |
6,927 |
23,424 |
2013 |
Wan Hai |
2Q19 |
3Q19(5) |
19,500(5) |
Katherine(1) |
6,927 |
23,424 |
2013 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
Alexandra(1) |
6,927 |
23,424 |
2013 |
ONE |
2Q19 |
2Q19(5) |
20,750(5) |
Alexis(1)(6) |
6,882 |
23,919 |
2015 |
Hapag-Lloyd |
2Q19 |
2Q19(5) |
20,000(5) |
Olivia I(1)(7) |
6,882 |
23,864 |
2015 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
CMA CGM Berlioz |
6,621 |
26,776 |
2001 |
CMA CGM |
2Q21 |
4Q21 |
34,000 |
Agios Dimitrios |
6,572 |
24,746 |
2011 |
MSC |
3Q19 |
4Q23(8) |
12,500(8) |
Tasman |
5,936 |
25,010 |
2000 |
ZIM |
2Q19 |
3Q19(9) |
11,500(9) |
Dimitris Y |
5,936 |
25,010 |
2000 |
ZIM |
2Q19 |
3Q19(10) |
16,750(10) |
Ian H |
5,936 |
25,128 |
2000 |
ZIM |
2Q19 |
3Q19(10) |
17,000(10) |
Dolphin II |
5,095 |
20,596 |
2007 |
HMM |
2Q19 |
4Q19 |
7,700(11) |
Orca I |
5,095 |
20,696 |
2006 |
ZIM |
2Q19 |
3Q19 |
11,750 |
CMA CGM Alcazar |
5,089 |
20,087 |
2007 |
CMA CGM |
4Q20 |
2Q21 |
33,750 |
CMA CGM Château d’If |
5,089 |
20,100 |
2007 |
CMA CGM |
4Q20 |
2Q21 |
33,750 |
CMA CGM Jamaica |
4,298 |
17,272 |
2006 |
CMA CGM |
3Q22 |
1Q23 |
25,350 |
CMA CGM Sambhar |
4,045 |
17,355 |
2006 |
CMA CGM |
3Q22 |
1Q23 |
25,350 |
CMA CGM America |
4,045 |
17,355 |
2006 |
CMA CGM |
3Q22 |
1Q23 |
25,350 |
GSL Valerie |
2,824 |
11,971 |
2005 |
CMA CGM |
2Q19 |
3Q19 |
9,000 |
Athena |
2,762 |
13,538 |
2003 |
MSC |
1Q20 |
2Q20 |
9,000 |
Maira |
2,506 |
11,453 |
2000 |
MSC |
3Q19 |
3Q19 |
8,500 |
Nikolas |
2,506 |
11,370 |
2000 |
MSC |
1Q20 |
1Q20 |
9,000 |
Newyorker |
2,506 |
11,463 |
2001 |
MSC |
1Q20 |
1Q20 |
9,000 |
CMA CGM La Tour |
2,272 |
11,742 |
2001 |
CMA CGM |
3Q19 |
1Q20 |
15,300 |
CMA CGM Manet |
2,272 |
11,742 |
2001 |
CMA CGM |
3Q19 |
1Q20 |
15,300 |
CMA CGM Matisse |
2,262 |
11,676 |
1999 |
CMA CGM |
3Q19 |
1Q20 |
15,300 |
CMA CGM Utrillo |
2,262 |
11,676 |
1999 |
CMA CGM |
3Q19 |
1Q20 |
15,300 |
GSL Keta |
2,207 |
11,731 |
2003 |
ANL |
2Q19 |
3Q19 |
8,450 |
GSL Julie |
2,207 |
11,731 |
2002 |
CMA CGM |
3Q19 |
2Q20(12) |
7,200(12) |
Kumasi |
2,207 |
11,731 |
2002 |
CMA CGM |
4Q19 |
1Q21(13) |
9,800(13) |
Marie Delmas |
2,207 |
11,731 |
2002 |
CMA CGM |
4Q19 |
1Q21(13) |
9,800(13) |
|
|
|
|
|
|
|
|
|
- Modern design, high reefer capacity, fuel efficient
vessels.
- Thereafter, in direct continuation, three years at an implied
Adjusted EBITDA of $28.0 million for the period.
- Thereafter, five years to MSC at an implied Adjusted EBITDA of
$25.6 million for the period.
- Rate increased to $12,400 per day from April 21, 2019.
Charterer has option to extend by 12 months plus or minus 45 days
from September 21, 2019 at $18,000 per day.
- Thereafter, five years to CMA CGM at $25,910 per day
- Previously UASC Bubiyan; renamed Alexis, effective April 24,
2019.
- Previously UASC Yas; renamed Oliva I, effective March 19,
2019.
- Thereafter, option for four years at $20,000 per day, callable
by us
- Thereafter, new charter with Maersk Line for 30 - 38 months at
an implied Adjusted EBITDA of $5.3 million for the median
period. Additional 12 - month extension at charterer’s
option, for an additional implied Adjusted EBITDA of $4.4
million.
- Thereafter, in direct continuation, 21-24 month at an implied
Adjusted EBITDA $4.4 million per vessel for the median firm
period.
- Rate increases to $11,500 per day from August 15, 2019.
- $7,200 per day from March 16, 2019 to between August 16, 2019
and October 16, 2019, at charterer’s option, with an option in
favour of charterer to extend from October 16, 2019 at $8,500 per
day for six months plus or minus 30 days.
- Option at $9,800 per day to December 31, 2020 plus or minus 90
days, callable by us.
Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the
Company's results for the three months ended March 31, 2019 today,
Tuesday May 7, 2019 at 10:00 a.m. Eastern Time. There are two ways
to access the conference call:
(1) Dial-in: (877) 445-2556 or (908) 982-4670;
Passcode: 8458699Please 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 Thursday, May 23, 2019 at (855)
859-2056 or (404) 537-3406. Enter the code 8458699 to access the
audio replay. The webcast will also be archived on the Company’s
website: http://www.globalshiplease.com.
Annual Report on Form 20-F
The Company’s Annual Report for 2018 is on file with the
Securities and Exchange Commission. A copy of the report can
be found under the Investor Relations section (Annual Reports) of
the Company’s website at http://www.globalshiplease.com
Shareholders may request a hard copy of the audited financial
statements free of charge by contacting the Company at
info@globalshiplease.com or by writing to Global Ship Lease, Inc,
care of Global Ship Lease Services Limited, Portland House, Stag
Place, London SW1E 5RS or by telephoning +44 (0) 207 869 8806.
About Global Ship Lease
Global Ship Lease is a leading independent owner of
containerships with a diversified fleet of mid-sized and smaller
containerships. Incorporated in the Marshall Islands, Global Ship
Lease commenced operations in December 2007 with a business of
owning and chartering out containerships under fixed-rate charters
to top tier container liner companies. On November 15, 2018, it
completed a strategic combination with Poseidon Containers.
Global Ship Lease owns 38 vessels ranging from 2,207 to 11,040
TEU, of which nine are fuel efficient new-design wide beam, with a
total capacity of 200,615 TEU and an average age, weighted by TEU
capacity, of 11.3 years determined as at March 31, 2019.
The average remaining term of the charters at March 31,
2019, including subsequent announcements and to the mid-point of
redelivery, including options under owners control, was 3.0
years on a TEU-weighted basis. Contracted revenue on the same basis
is $826.3 million. Contracted revenue is $891.1, including options
under charterers control and with latest redelivery date,
representing a weighted average remaining term of 3.2 years.
Reconciliation of Non-U.S. GAAP Financial
Measure
Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and
expense including amortization of deferred finance costs, earnings
allocated to preferred shares, income taxes, depreciation and
amortization of drydocking costs. Adjusted EBITDA is a non-US
GAAP quantitative measure used to assist in the assessment of the
Company's ability to generate cash from its operations. We
believe that the presentation of Adjusted 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. Adjusted EBITDA is not defined in US
GAAP and should not be considered to be an alternate to Net income
or any other financial metric required by such accounting
principles. Our use of Adjusted EBITDA may vary from the use of
similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S.
dollars) |
|
|
|
Three |
Three |
|
|
months |
months |
|
|
ended |
ended |
|
|
Mar 31, |
Mar 31, |
|
|
2019 |
2018 |
|
|
|
|
Net income
available to common shareholders |
10,052 |
|
4,192 |
|
|
|
|
|
Adjust: |
Depreciation and amortization |
10,758 |
|
8,156 |
|
|
Interest
income |
(417 |
) |
(269 |
) |
|
Interest
expense |
19,352 |
|
10,793 |
|
|
Income
taxes |
16 |
|
15 |
|
|
Earnings
allocated to preferred shares |
766 |
|
766 |
|
|
|
|
|
Adjusted
EBITDA |
40,527 |
|
23,653 |
|
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 our charterers, particularly CMA
CGM, our principal charterer and main source of operating revenue,
and their ability to pay charterhire in accordance with the
charters;
- Global Ship Lease’s financial condition and liquidity,
including its level of indebtedness or ability to obtain additional
financing to fund capital expenditures, vessel acquisitions and
other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and
repay its credit facilities;
- 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;
- risks relating to the acquisition of Poseidon Containers and
Global Ship Lease’s ability to realize the anticipated benefits of
the acquisition;
- 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 or other vessel employment
arrangements;
- the continued performance of existing long-term, fixed-rate
time charters;
- Global Ship Lease’s ability to capitalize on its management’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
U.S Securities and Exchange Commission (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 Consolidated
Balance Sheets
|
|
|
|
As of |
|
Note |
|
|
March 31, 2019 |
|
|
December 31,
2018 |
ASSETS |
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
$ |
97,966 |
|
|
$ |
82,059 |
|
Restricted cash |
|
|
|
3,023 |
|
|
|
2,186 |
|
Accounts receivable,
net |
|
|
|
1,738 |
|
|
|
1,927 |
|
Inventories |
|
|
|
5,327 |
|
|
|
5,769 |
|
Prepaid expenses and
other current assets |
|
|
|
7,162 |
|
|
|
6,214 |
|
Due from related
parties |
5 |
|
|
1,086 |
|
|
|
817 |
|
Total current
assets |
|
|
$ |
116,302 |
|
|
$ |
98,972 |
|
NON-CURRENT
ASSETS |
|
|
|
|
|
|
|
Vessels in
operation |
3 |
|
$ |
1,103,604 |
|
|
$ |
1,112,766 |
|
Other fixed assets |
|
|
|
4 |
|
|
|
5 |
|
Intangible
assets-charter agreements |
|
|
|
4,430 |
|
|
|
5,400 |
|
Deferred charges,
net |
|
|
|
8,661 |
|
|
|
9,569 |
|
Other non-current
assets |
|
|
|
291 |
|
|
|
948 |
|
Restricted cash, net of
current portion |
|
|
|
5,938 |
|
|
|
5,827 |
|
Total
non-current assets |
|
|
|
1,122,928 |
|
|
|
1,134,515 |
|
TOTAL
ASSETS |
|
|
$ |
1,239,230 |
|
|
$ |
1,233,487 |
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
7,140 |
|
|
$ |
9,586 |
|
Accrued
liabilities |
|
|
|
21,576 |
|
|
|
15,407 |
|
Current portion of
long-term debt |
4 |
|
|
74,533 |
|
|
|
64,088 |
|
Deferred revenue |
|
|
|
2,637 |
|
|
|
3,118 |
|
Due to related
parties |
5 |
|
|
1,548 |
|
|
|
3,317 |
|
Total current
liabilities |
|
|
|
107,434 |
|
|
|
95,516 |
|
LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
Long-term debt, net of
current portion and deferred financing costs |
4 |
|
$ |
797,406 |
|
|
$ |
813,130 |
|
Intangible
liability-charter agreements |
|
|
|
7,967 |
|
|
|
8,470 |
|
Deferred tax
liability |
|
|
|
9 |
|
|
|
9 |
|
Total
non-current liabilities |
|
|
|
805,382 |
|
|
|
821,609 |
|
Total
liabilities |
|
|
$ |
912,816 |
|
|
$ |
917,125 |
|
Commitments and
Contingencies |
6 |
|
|
|
|
|
— |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
Class A common shares -
authorized 214,000,000 shares with a $0.01 par value 9,942,950
shares issued and outstanding (2018 – 9,017,205 shares) |
7 |
|
$ |
99 |
|
|
$ |
90 |
|
Class B common shares -
authorized 20,000,000 shares with a $0.01 par value nil shares
issued and outstanding (2018 – 925,745 shares) |
7 |
|
|
— |
|
|
|
9 |
|
Series B Preferred
Shares - authorized 16,100 shares with a $0.01 par value 14,000
shares issued and outstanding (2018 – 14,000 shares) |
7 |
|
|
— |
|
|
|
— |
|
Series C Preferred
Shares - authorized 250,000 shares with a $0.01 par value 250,000
shares issued and outstanding (2018 - 250,000 shares) |
7 |
|
|
3 |
|
|
|
3 |
|
Additional paid in
capital |
|
|
|
512,379 |
|
|
|
512,379 |
|
Accumulated
deficit |
|
|
|
(186,067 |
) |
|
|
(196,119 |
) |
Total
shareholders' equity |
|
|
|
326,414 |
|
|
|
316,362 |
|
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
$ |
1,239,230 |
|
|
$ |
1,233,487 |
|
Global Ship Lease, Inc.
Interim Unaudited Consolidated
Statements of Income
|
|
|
Three months ended March
31, |
|
Note |
|
|
2019 |
|
|
|
2018 |
|
OPERATING REVENUES |
|
|
|
|
|
|
|
Time charter
revenue |
|
|
$ |
29,881 |
|
|
$ |
5,770 |
|
Time charter
revenue-related parties |
5 |
|
|
34,633 |
|
|
|
30,376 |
|
|
|
|
|
64,514 |
|
|
|
36,146 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
Vessel operating
expenses |
|
|
|
19,150 |
|
|
|
10,098 |
|
Vessel operating
expenses-related parties |
5 |
|
|
1,805 |
|
|
|
322 |
|
Time charter and voyage
expenses |
|
|
|
1,121 |
|
|
|
144 |
|
Time charter and voyage
expenses-related parties |
|
|
|
430 |
|
|
|
— |
|
Depreciation and
amortization |
3 |
|
|
10,758 |
|
|
|
8,156 |
|
General and
administrative expenses |
|
|
|
2,025 |
|
|
|
1,935 |
|
Operating Income |
|
|
|
29,225 |
|
|
|
15,491 |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
417 |
|
|
|
269 |
|
Interest and other
financial expense |
|
|
|
(19,352 |
) |
|
|
(10,793 |
) |
Other income, net |
|
|
|
544 |
|
|
|
6 |
|
Total non operating expense |
|
|
|
(18,391 |
) |
|
|
(10,518 |
) |
Income before income taxes |
|
|
|
10,834 |
|
|
|
4,973 |
|
Income taxes |
|
|
|
(16 |
) |
|
|
(15 |
) |
Net Income |
|
|
$ |
10,818 |
|
|
$ |
4,958 |
|
Earnings allocated to
Series B Preferred Shares |
7 |
|
|
(766 |
) |
|
|
(766 |
) |
Net Income available to Common
Shareholders |
|
|
$ |
10,052 |
|
|
$ |
4,192 |
|
Earnings per Share |
|
|
|
|
|
|
|
Weighted average number of Class A common shares
outstanding |
|
|
|
|
|
|
|
Basic and
diluted (including RSU’s without service conditions) |
9 |
|
|
9,932,664 |
|
|
|
6,001,217 |
|
|
|
|
|
|
|
|
|
Net Income per Class A common share |
|
|
|
|
|
|
|
Basic and
diluted (including RSU’s without service conditions) |
9 |
|
$ |
0.44 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
Weighted average number of Class B common shares
outstanding |
|
|
|
|
|
|
|
Basic and
diluted |
9 |
|
|
nil |
|
|
|
925,745 |
|
|
|
|
|
|
|
|
|
Net Income per Class B common share |
|
|
|
|
|
|
|
Basic and
diluted |
9 |
|
$ |
nil |
|
|
$ |
nil |
|
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements
of Cash Flows
|
|
|
|
Three months ended March
31, |
|
Note |
|
|
2019 |
|
|
|
2018 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net
Income |
|
|
$ |
10,818 |
|
|
$ |
4,958 |
|
Adjustments to reconcile
net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
3 |
|
|
10,758 |
|
|
|
8,156 |
|
Amortization of deferred financing costs |
4 |
|
|
745 |
|
|
|
1,029 |
|
Amortization of original issue discount / premium on repurchase of
notes |
4 |
|
|
202 |
|
|
|
201 |
|
Amortization of intangible asset/liability-charter agreements |
|
|
|
468 |
|
|
|
(443 |
) |
Share
based compensation |
8 |
|
|
— |
|
|
|
45 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
Increase
in accounts receivable and other assets |
|
|
|
(94 |
) |
|
|
(1,104 |
) |
Decrease
(increase) increase in inventories |
|
|
|
442 |
|
|
|
(1,783 |
) |
Increase
in accounts payable and other liabilities |
|
|
|
3,719 |
|
|
|
7,850 |
|
(Decrease) increase in related parties' balances |
5 |
|
|
(2,038 |
) |
|
|
1,838 |
|
Decrease
in deferred revenue |
|
|
|
(481 |
) |
|
|
(312 |
) |
Unrealized foreign exchange (gain) loss |
|
|
|
(5 |
) |
|
|
4 |
|
Net cash provided by operating
activities |
|
|
|
24,534 |
|
|
|
20,439 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Cash paid
for vessel improvements |
|
|
|
(637 |
) |
|
|
(150 |
) |
Cash paid
for dry-dockings |
|
|
|
(50 |
) |
|
|
(373 |
) |
Cash paid
for vessel deposits |
|
|
|
— |
|
|
|
(1,128 |
) |
Net cash used in investing
activities |
|
|
|
(687 |
) |
|
|
(1,651 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Repayment
of credit facilities |
4 |
|
|
(6,226 |
) |
|
|
— |
|
Series B
Preferred Shares-dividends paid |
7 |
|
|
(766 |
) |
|
|
(766 |
) |
Net cash used in financing
activities |
|
|
|
(6,992 |
) |
|
|
(766 |
) |
Net increase in cash and
cash equivalents and restricted cash |
|
|
|
16,855 |
|
|
|
18,022 |
|
Cash and cash equivalents and
restricted cash at beginning of the period |
|
|
|
90,072 |
|
|
|
73,266 |
|
Cash and cash equivalents
and restricted cash at end of the period |
|
|
$ |
106,927 |
|
|
$ |
91,288 |
|
Supplementary Cash Flow
Information: |
|
|
|
|
|
|
|
Cash paid
for interest |
|
|
$ |
9,563 |
|
|
$ |
648 |
|
Cash paid
for income taxes |
|
|
$ |
— |
|
|
$ |
12 |
|
Non-cash investing activities: |
|
|
|
|
|
|
|
Unpaid
capitalized expenses |
|
|
$ |
826 |
|
|
$ |
— |
|
Investor and Media Contacts: The IGB GroupBryan
Degnan646-673-9701orLeon Berman 212-477-8438
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