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, 2020.
First Quarter 2020
- Reported operating revenues(1) of $70.9 million for the first
quarter 2020.
- Reported net income(2) of $0.6 million for the first quarter
2020 after a non-cash impairment charge of $7.6 million and $2.3
million premium paid following the redemption of $46.0 million of
our 9.875% Senior Secured Notes due 2022 (“2022 Notes); resulting
in a normalized net income(3) of $10.5 million.
- Generated $39.6 million of Adjusted EBITDA(3) for the first
quarter 2020.
- On February 13, 2020, our credit facility that
matured on December 31, 2020 was fully refinanced through the
utilization of the $38.0 million second tranche of our $268.0
million New Senior Loan, secured by Mary, and an additional
facility of $9.0 million which we entered with an international
bank, secured by Maira, Nikolas and Newyorker.
- On February 10, 2020, we redeemed $46.0
million principal amount of our 2022 Notes. During March 2020, we
purchased $9.1 million of these notes in the open market at an
average price of $0.9814.
- Between January 1, 2020 and March 31, 2020, a
further $18.9 million net proceeds was raised under our ATM program
for our 8.00% Senior Unsecured Notes due 2024 (“2024 Notes”) and a
further $4.0 million net proceeds under our ATM program for our
8.75% Series B Preferred Shares (“Series B Preferred Shares”).
- Since January 1, 2020, up to May 11, 2020, we
have agreed short charter extensions for nine of our smaller ships:
Manet, Maira, Nikolas, Newyorker, Athena, GSL Valerie, Matisse,
Utrillo and GSL Keta. The extensions are all at rates of between
$8,000 and $9,000 per day and range in duration from a few months
to a year. We have also agreed to extend the charter of one of our
Post-Panamax ships (New Purchase One) for 70 – 90 days, from early
April, at a charter rate expected to generate Adjusted EBITDA of
around $1.2 million for the median extension period.
George Youroukos, Executive Chairman of Global Ship Lease,
stated, “Our extensive contract cover and high-quality fleet have
largely insulated us from the coronavirus-related disruptions that
have expanded to affect the global economy. During the first
quarter, we generated strong, consistent earnings and took delivery
of two new ships. Our total contracted revenue is now around
$696.0 million over a TEU-weighted average remaining duration of
2.3 years, with many of our charters extending for multiple years.
The flexibility of our mid-sized and smaller containership fleet,
as well as our low slot costs and high reefer capacity, enable us
to support our liner partners with reliable, cost-efficient ships
at a time when the industry is under pressure. We maintain close
relationships with our customers, for whom we provide a vital
service, and will continue to focus on providing them
uninterrupted, best-in-class operations.”
“As the spread of COVID-19 has had an increasing impact on
global supply chains, the containership industry is taking active
measures to maintain market discipline and adapt to changing market
conditions. During this time, Global Ship Lease’s highest priority
remains the health and safety of our seafarers and staff on shore.
While the full extent of the economic impact of the pandemic and
the shape of the subsequent recovery remain to be seen, our strong
contract cover, consistent operational excellence, and close
relationships with our customers position us well to weather the
current storm. Once the global economy turns the corner, we expect
that the contraction in vessel supply of mid-sized and smaller
vessels in recent years and the negligible order book moving
forward will position Global Ship Lease to benefit in the medium
and long term.”
Ian Webber, Chief Executive Officer of Global Ship Lease,
commented, “We have always prioritized resilience and have focused
on maintaining a strong balance sheet while building contract cover
with market-leading charterers. As a result of pro-actively
refinancing our nearer term debt maturities over the last few
months, we now have negligible debt maturities through 2020 and
none in 2021. Further, during the first quarter 2020, we took
steps to reduce our cost of capital by opportunistically retiring
$46.0 million of high-cost debt. We also put additional charters in
place to further improve cash flow visibility over the coming
months. We are minimizing discretionary spend without compromising
safety or our ability to consistently service our charterers at a
high level, and are likely to dispose of our two oldest vessels
rather than invest in their upcoming drydocks. Our strong balance
sheet and maturity profile, with extensive cash on hand, five
unencumbered vessels, and only approximately $5.0 million of debt
maturing between now and late 2022, ensures that we are well suited
to endure a volatile global trade environment.”
SELECTED FINANCIAL DATA – UNAUDITED (thousands
of U.S. dollars)
|
Three |
Three |
|
months ended |
months ended |
|
March 31, 2020 |
March 31, 2019 |
|
|
|
Operating Revenues (1) |
70,947 |
64,514 |
Operating Income |
20,396 |
28,796 |
Net Income (2) |
621 |
9,623 |
Adjusted EBITDA(3) |
39,550 |
40,098 |
Normalized Net Income(3) |
10,477 |
9,623 |
|
|
|
The results for the three months ended March 31, 2020 and 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 and Normalized Net Income are non-US
Generally Accepted Accounting Principles (US GAAP) financial
measures, 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 these non-GAAP financial
measure to net income, the most directly comparable US GAAP
financial measure, please see “Reconciliation of Non-U.S. GAAP
Financial Measures” below.
Operating Revenues and Utilization
The fleet generated operating revenues from fixed-rate time
charters of $70.9 million in the three months ended March 31, 2020,
an increase of $6.4 million compared to $64.5 million for the first
quarter of 2019, with the increase principally due to the addition
of five vessels between April 1, 2019 and December 31, 2019 and two
vessels during first quarter 2020. There were 4,016 ownership days
in the quarter, an increase of 17% compared to 3,420 days in the
first quarter of 2019, which was primarily due to the addition of
the seven vessels noted above. In the first quarter of 2020, the
time taken for scheduled drydockings and scrubber installations was
adversely affected by congestion and slow down in workings or
shutdowns in yards due to COVID-19 resulting in 224 days for
planned offhire days. There were a further 39 days of unplanned
offhire and 56 idle days, giving an overall utilization of 92.1%.
There were five days of unplanned offhire in the first quarter of
2019, giving an overall utilization of 99.8%.
The table below shows our fleet utilization for the three months
ended March 31, 2020 and 2019 and for the years ended December 31,
2019, 2018, 2017, 2016 and 2015.
|
|
|
|
|
|
|
|
|
Three months ended |
Year ended |
|
Mar 31, |
Mar 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Days |
2020 |
2019 |
2019 |
2018 |
2017 |
2016 |
2015 |
|
|
|
|
|
|
|
|
Ownership days |
4,016 |
3,420 |
14,326 |
7,675 |
6,570 |
6,588 |
6,893 |
Planned offhire - scheduled
drydockings |
(224) |
0 |
(537) |
(34) |
(62) |
(100) |
(9) |
Unplanned offhire |
(39) |
(5) |
(105) |
(17) |
(40) |
(3) |
(7) |
Idle time |
(56) |
0 |
(164) |
(47) |
0 |
0 |
(13) |
Operating days |
3,697 |
3,415 |
13,520 |
7,577 |
6,468 |
6,485 |
6,864 |
|
|
|
|
|
|
|
|
Utilization |
92.1% |
99.8% |
94.4% |
98.7% |
98.4% |
98.4% |
99.6% |
There were three regulatory drydockings in first quarter 2020
and two scrubber installations in progress and none in first
quarter 2019. A further seven regulatory drydockings are due in
2020.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, repairs, maintenance, insurance and technical
management fees, were $25.5 million for the three months ended
March 31, 2020, compared to $21.0 million in the prior year period.
The increase was mainly due to 596 additional ownership days (up
17%) as a result of the acquisition of the seven vessels noted
above all of which are post-panamax with higher daily operating
expenses. The average cost per ownership day in the quarter was
$6,352, compared to $6,127 for the prior year period, up $225 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 $3.5
million for the three months ended March 31, 2020, compared to $1.6
million in the prior year period. The increase was mainly due to
the addition of the seven vessels noted above and the re-chartering
of a number of legacy vessels that did not previously incur
brokerage commission.
Depreciation and amortization Depreciation and amortization for
the three months ended March 31, 2020 was $11.5 million, compared
to $10.8 million in the prior year period; the increase was mainly
due to the addition of the seven vessels noted above.
Vessel impairment losses
We approved a plan for the vessels Utrillo and GSL Matisse to be
sold. As of March 31, 2020, the vessels were not
immediately available for sale and did not qualify as assets held
for sale as of March 31, 2020. As of March 31, 2020, we had a
current expectation that the vessels would be sold before the end
of its previously estimated useful life, and as a result performed
an impairment test of the specific asset group. An impairment loss
of $7.6 million has been recognized for the three months ended
March 31, 2020. No impairment charges were recognized in the prior
year period.
General and Administrative Expenses
General and administrative expenses were $2.4 million in the
three months ended March 31, 2020, compared to $2.5 million in the
prior year period.
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was $39.6 million for
the three months ended March 31, 2020, a slight decrease from $40.1
million for the prior year period.
Interest and other finance expenses (including premium on 2022
Notes)
Debt at March 31, 2020 totaled $866.1 million, comprising $267.6
million of indebtedness on our 2022 Notes, $12.1 million of
indebtedness under a secured term loan, both collateralized by 18
legacy vessels, $59.0 million of indebtedness on our 2024 Notes,
and $527.5 million other debt collateralized by our other
vessels. Five vessels are unencumbered.
Debt at March 31, 2019 totaled $882.9 million, comprising $340.0
million of indebtedness on our 2022 Notes, $34.8 million of
indebtedness under the secured term loan, and $508.1 million other
debt collateralized by our other vessels.
Interest and other finance expenses for the three months ended
March 31, 2020, were $19.6 million, an increase of $0.2 million, or
1%, on the interest and other finance expenses for the prior year
period of $19.4 million. The increase is mainly due to $2.3 million
premium paid on the optional redemption of the $46.0 million
principal amount of our 2022 Notes in March 2020, offset by a
reduction in interest cost.
Interest income for the three months ended March 31, 2020 was
$0.6 million, an increase of $0.2 million on $0.4 million for 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 $21,000 in the three
months ended March 31, 2020, compared to $0.5 million in the prior
year period.
Taxation
Taxation for the three months ended March 31, 2020 was $nil
compared to $16,000 in the prior year period.
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, 2020 was $0.9
million, compared to $0.8 million in the prior year period, with
the increase being due to the issuance of additional Series B
Preferred Shares under our ATM program.
Net Income Available to Common Shareholders
Net income for the three months ended March 31, 2020 was $0.6
million, compared to $9.6 million in the prior year period.
Fleet
The following table provides information about
our fleet of 45 ships. One ship was delivered in January 2020 and
one in February 2020. The table includes charters agreed up to May
11, 2020.
Vessel Name |
Capacityin TEUs |
Lightweight(tons) |
YearBuilt |
Charterer |
Earliest CharterExpiry Date |
Latest CharterExpiry Date |
Daily CharterRate $ |
|
|
|
|
|
|
|
|
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 |
1Q22 |
2Q22 |
34,000 |
Anthea Y(1) |
9,115 |
31,890 |
2015 |
COSCO |
2Q20 |
2Q20 |
39,200 |
Maira XL(1) |
9,115 |
31,820 |
2015 |
COSCO |
3Q20 |
3Q20 |
39,200 |
MSC Tianjin (2) |
8,603 |
34,325 |
2005 |
MSC |
2Q24 |
3Q24 |
Confidential |
MSC Qingdao (2) |
8,603 |
34,305 |
2004 |
MSC |
2Q24 |
3Q24 |
Confidential |
GSL Ningbo |
8,603 |
34,340 |
2004 |
Maersk |
3Q20 |
4Q20 |
18,000 |
GSL Eleni |
7,847 |
29,261 |
2004 |
Maersk |
3Q24 |
4Q24(3) |
Confidential |
GSL Kalliopi |
7,847 |
29,105 |
2004 |
Maersk |
4Q22 |
4Q24(3) |
Confidential |
GSL Grania |
7,847 |
29,190 |
2004 |
Maersk |
3Q22 |
4Q24(3) |
Confidential |
Mary(1) |
6,927 |
23,424 |
2013 |
CMA CGM |
3Q23 |
4Q23 |
25,910 |
Kristina(1) |
6,927 |
23,421 |
2013 |
CMA CGM |
2Q24 |
3Q24 |
25,910 |
Katherine (1) |
6,927 |
23,403 |
2013 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
Alexandra (1) |
6,927 |
23,348 |
2013 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
Alexis (1) |
6,882 |
23,919 |
2015 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
Olivia I (1) |
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 |
4Q23 |
1Q24 |
20,000 |
New Purchase One |
6,422 |
27,954 |
2002 |
Confidential |
2Q20 |
3Q20 |
Confidential (4) |
New Purchase Two |
6,422 |
28,070 |
2002 |
Confidential |
2Q20 |
4Q20 |
Confidential (4) |
GSL Vinia |
6,080 |
23,737 |
2004 |
Confidential |
2Q24 |
1Q25 |
Confidential (5) |
GSL Christel Elisabeth |
6,080 |
23,745 |
2004 |
Confidential |
2Q24 |
1Q25 |
Confidential (5) |
Tasman |
5,936 |
25,010 |
2000 |
Maersk |
2Q22 |
3Q23(6) |
12,500(6) |
Dimitris Y |
5,936 |
25,010 |
2000 |
ZIM |
2Q21 |
3Q21 |
14,500 |
Ian H |
5,936 |
25,128 |
2000 |
ZIM |
1Q21 |
2Q21 |
14,500 |
Dolphin II |
5,095 |
20,596 |
2007 |
Feedertech |
3Q20 |
4Q20 |
12,500 |
Orca I |
5,095 |
20,633 |
2006 |
Maersk |
2Q20(7) |
2Q21(7) |
9,000(7) |
CMA CGM Alcazar |
5,089 |
20,087 |
2007 |
CMA CGM |
4Q20 |
2Q21 |
33,750 |
CMA CGM Château d’If |
5,089 |
19,994 |
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 |
17,429 |
2006 |
CMA CGM |
3Q22 |
1Q23 |
25,350 |
CMA CGM America |
4,045 |
17,428 |
2006 |
CMA CGM |
3Q22 |
1Q23 |
25,350 |
GSL Valerie |
2,824 |
11,971 |
2005 |
MSC |
3Q20 |
3Q20 |
9,000 |
Athena |
2,762 |
13,538 |
2003 |
MSC |
1Q21 |
1Q21 |
9,000 |
Maira |
2,506 |
11,453 |
2000 |
MSC |
3Q20 |
3Q20 |
8,250 (8) |
Nikolas |
2,506 |
11,370 |
2000 |
MSC |
3Q20 |
3Q20 |
9,000 |
Newyorker |
2,506 |
11,463 |
2001 |
MSC |
4Q20 |
1Q21 |
9,000 |
La Tour |
2,272 |
11,742 |
2001 |
MSC |
4Q20 |
4Q20 |
8,800 |
Manet |
2,272 |
11,727 |
2001 |
COSCO |
2Q20 |
2Q20 |
9,900 |
GSL Matisse |
2,262 |
11,676 |
1999 |
Confidential |
2Q20 |
2Q20 |
Confidential (9) |
Utrillo |
2,262 |
11,676 |
1999 |
CMA CGM |
1Q20 |
1Q20 |
8,500 (10) |
GSL Keta |
2,207 |
11,731 |
2003 |
OOCL |
3Q20 |
3Q20 |
9,400 (11) |
Julie |
2,207 |
11,731 |
2002 |
CMA CGM |
2Q20 |
2Q20 |
8,500 |
Kumasi |
2,207 |
11,791 |
2002 |
CMA CGM |
4Q20 |
1Q21 |
9,800 |
Marie Delmas |
2,207 |
11,731 |
2002 |
CMA CGM |
4Q20 |
1Q21 |
9,800 |
(1) Modern design, high reefer
capacity fuel efficient vessel |
|
(2) Five-year charters which
commenced 2Q2019. Approximately $44 million of Adjusted EBITDA,
aggregate across the two ships, is expected to be generated for the
median period remaining on the charters, from March 31, 2020. |
|
(3) GSL Eleni delivered
3Q2019 and is chartered for five years; GSL Kalliopi (delivered
4Q2019) and GSL Grania (delivered 3Q2019) are chartered for three
years plus two successive periods of one year at the option of the
charterer. Approximately $29 million of Adjusted EBITDA, aggregate
across the three ships, is expected to be generated for the median
firm period remaining on the charters, from March 31, 2020. This
increases by approximately $16 million if all options are exercised
by the Charterer. |
|
(4) New Purchase One was
delivered in late January 2020 and New Purchase Two was delivered
in February 2020. The initial charter of New Purchase One was
extended by 70 - 90 days and, if not extended further, will now
expire in 2Q2020 or 3Q2020. Approximately $1.2 million of Adjusted
EBITDA is expected to be generated during the median extension
period. |
|
(5) GSL Vinia and GSL Christel
Elisabeth delivered in December 2019, and are contracted on 52 – 60
months charters. Approximately $20 million of Adjusted EBITDA,
aggregate across the two ships, is expected to be generated for the
median period remaining on the charters, from March 31, 2020. |
|
(6) 12-month extension at
charterer’s option callable in 2Q2022, at an increased rate of
$20,000 per day. |
|
(7) 12-24 month charter
(which commenced in June 2019), at charterer’s option. Rate
increases to $10,000 per day from September 1, 2020 |
|
(8) Rate increases to $9,000 per
day from April 1, 2020; |
|
(9) A new short-term charter, on
confidential terms, commenced on April 4, 2020, and concluded on
April 25, 2020; |
|
(10) Charter with CMA CGM expired
February 16, 2020; a new short-term charter, to a different
counterparty and on confidential terms, commenced February 29, 2020
and concluded March 27, 2020. |
|
(11) Charter extended from April
9, 2020, at a rate of $8,000 per day |
|
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, 2020 today, Tuesday May 12, 2020
at 10:30 a.m. Eastern Time. There are two ways to access the
conference call:
(1) Dial-in: (877) 445-2556 or
(908) 982-4670; Passcode: 9988266
Please 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 Saturday, May 28, 2020 at (855)
859-2056 or (404) 537-3406. Enter the code 9988266 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 2019 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, 25 Wilton Road, London
SW1V ILW or by telephoning +44 (0) 203 998 0063.
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 45 ships, ranging from 2,207 to 11,040
TEU, of which nine are fuel-efficient new-design wide-beam, with a
total capacity of 248,968 TEU and an average age, weighted by TEU
capacity, of 13.1 years as at March 31, 2020.
Adjusted to include all charters agreed up to May 11, 2020, the
average remaining term of the Company’s charters at March 31, 2020,
to the mid-point of redelivery, including options under the
Company’s control, was 2.3 years on a TEU-weighted basis.
Contracted revenue on the same basis was $696.0 million. Contracted
revenue was $777.0 million, including options under charterers’
control and with latest redelivery date, representing a weighted
average remaining term of 2.6 years.
Reconciliation of Non-U.S. GAAP Financial
Measure
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and
expense, earnings allocated to preferred shares, income taxes,
depreciation and amortization of drydocking costs and impairment
losses. 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, |
|
|
2020 |
2019 |
|
|
|
|
Net income
available to common shareholders |
621 |
|
9,623 |
|
|
|
|
|
Adjust: |
Depreciation and amortization |
11,548 |
|
10,758 |
|
|
Vessel impairment losses |
7,585 |
|
- |
|
|
Interest income |
(638 |
) |
(417 |
) |
|
Interest expense |
19,555 |
|
19,352 |
|
|
Income taxes |
- |
|
16 |
|
|
Earnings allocated to
preferred shares |
879 |
|
766 |
|
|
|
|
|
Adjusted
EBITDA |
39,550 |
|
40,098 |
|
B. Normalized net income
Normalized net income represents net income
adjusted for impairment charges and the premium paid on redemption
of 2022 notes. Normalized net income is a non-GAAP quantitative
measure which we believe will assist investors and analysts who
often adjust reported net loss for items that do not affect
operating performance or operating cash generated. Normalized net
income 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 Normalized net income may
vary from the use of similarly titled measures by others in our
industry.
NORMALIZED
NET INCOME – UNAUDITED(thousands of U.S. dollars) |
|
|
|
|
Three |
Three |
|
|
months |
months |
|
|
ended |
ended |
|
|
Mar 31, |
Mar 31, |
|
|
2020 |
2019 |
|
|
|
|
Net income
available to common shareholders |
621 |
9,623 |
|
|
|
|
Adjust: |
Impairment charges |
7,585 |
- |
|
Premium paid on redemption of
2022 Notes |
2,271 |
- |
Normalized net
income |
10,477 |
9,623 |
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
(Expressed in thousands of U.S
dollars)
|
|
|
|
As of, |
|
March 31, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
86,961 |
|
|
$ |
138,024 |
|
Restricted cash |
|
4,569 |
|
|
|
3,909 |
|
Accounts receivable, net |
|
2,252 |
|
|
|
2,350 |
|
Inventories |
|
5,991 |
|
|
|
5,595 |
|
Prepaid expenses and other
current assets |
|
8,438 |
|
|
|
8,132 |
|
Due from related parties |
|
6,018 |
|
|
|
3,860 |
|
Total current
assets |
$ |
114,229 |
|
|
$ |
161,870 |
|
NON - CURRENT
ASSETS |
|
|
|
|
|
Vessels in operation |
$ |
1,165,052 |
|
|
$ |
1,155,586 |
|
Advances for vessels
acquisitions and other additions |
|
9,620 |
|
|
|
10,791 |
|
Intangible assets - charter
agreements |
|
486 |
|
|
|
1,467 |
|
Deferred charges, net |
|
17,576 |
|
|
|
16,408 |
|
Restricted cash, net of
current portion |
|
6,204 |
|
|
|
5,703 |
|
Total non - current
assets |
|
1,198,938 |
|
|
|
1,189,955 |
|
TOTAL
ASSETS |
$ |
1,313,167 |
|
|
$ |
1,351,825 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
Accounts payable |
$ |
10,672 |
|
|
$ |
9,052 |
|
Accrued liabilities |
|
27,847 |
|
|
|
22,916 |
|
Current portion of long - term
debt |
|
89,841 |
|
|
|
87,532 |
|
Deferred revenue |
|
6,678 |
|
|
|
9,987 |
|
Due to related parties |
|
333 |
|
|
|
109 |
|
Total current
liabilities |
$ |
135,371 |
|
|
$ |
129,596 |
|
LONG-TERM
LIABILITIES |
|
|
|
|
|
Long - term debt, net of
current portion and deferred financing costs |
$ |
760,412 |
|
|
$ |
809,357 |
|
Intangible liability-charter
agreements |
|
5,968 |
|
|
|
6,470 |
|
Total non - current
liabilities |
|
766,380 |
|
|
|
815,827 |
|
Total
liabilities |
|
901,751 |
|
|
|
945,423 |
|
Commitments and
Contingencies |
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Class A common shares -
authorized 214,000,000 shares with a $0.01 par value 17,556,738
shares issued and outstanding (2019 – 17,556,738 shares) |
|
175 |
|
|
|
175 |
|
Series B Preferred Shares -
authorized 44,000 shares with a $0.01 par value 16,074 shares
issued and outstanding (2019 – 14,428 shares) |
|
- |
|
|
|
- |
|
Series C Preferred Shares -
authorized 250,000 shares with a $0.01 par value 250,000 shares
issued and outstanding (2019 - 250,000 shares) |
|
3 |
|
|
|
3 |
|
Additional paid in
capital |
|
569,979 |
|
|
|
565,586 |
|
Accumulated deficit |
|
(158,741 |
) |
|
|
(159,362 |
) |
Total shareholders'
equity |
|
411,416 |
|
|
|
406,402 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
1,313,167 |
|
|
|
1,351,825 |
|
|
|
|
|
|
|
Global Ship Lease, Inc.
Interim Unaudited Consolidated
Statements of Operations
(Expressed in thousands of U.S dollars
except share data)
|
|
Three months ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
OPERATING
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
Time charter revenues (include
related party revenues of $37,676 and $34,633 for each of the
period ended March 31, 2020 and 2019, respectively) |
$ |
70,947 |
|
|
$ |
64,514 |
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
Vessels operating expenses
(include related party vessels operating expenses of $3,037 and
$1,805 for each of the period ended March 31, 2020 and 2019,
respectively) |
|
25,512 |
|
|
|
20,955 |
|
Time charter and voyage
expenses (include related party time charter and voyage expenses of
$610 and $430 for each of the period ended March 31, 2020 and 2019,
respectively) |
|
3,469 |
|
|
|
1,551 |
|
Depreciation and
amortization |
|
11,548 |
|
|
|
10,758 |
|
Vessel impairment losses |
|
7,585 |
|
|
|
— |
|
General and administrative
expenses |
|
2,437 |
|
|
|
2,454 |
|
Operating
Income |
|
20,396 |
|
|
|
28,796 |
|
|
|
|
|
|
|
Interest income |
|
638 |
|
|
|
417 |
|
Interest and other financial
expense (including premium on 2022 Notes) |
|
(19,555 |
) |
|
|
(19,352 |
) |
Other income, net |
|
21 |
|
|
|
544 |
|
Total non-operating
expense |
|
(18,896 |
) |
|
|
(18,391 |
) |
Income before income
taxes |
|
1,500 |
|
|
|
10,405 |
|
Income taxes |
|
— |
|
|
|
(16 |
) |
Net
Income |
$ |
1,500 |
|
|
$ |
10,389 |
|
Earnings allocated to Series B
Preferred Shares |
|
(879 |
) |
|
|
(766 |
) |
|
|
|
|
|
|
|
|
Net Income available
to Common Shareholders |
$ |
621 |
|
|
$ |
9,623 |
|
|
|
|
|
|
|
Earnings per
Share |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
Class A common shares outstanding |
|
|
|
|
|
Basic |
|
17,556,738 |
|
|
|
9,932,664 |
|
Diluted |
|
17,682,453 |
|
|
|
10,022,041 |
|
|
|
|
|
|
|
Net Earnings per Class A
common share |
|
|
|
|
|
Basic |
$ |
0.02 |
|
|
$ |
0.42 |
|
Diluted |
$ |
0.02 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements
of Cash Flows
(Expressed in thousands of U.S
dollars)
|
|
Three months ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
Cash flows from
operating activities: |
|
|
|
|
|
Net income |
$ |
1,500 |
|
|
$ |
10,389 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation and
amortization |
$ |
11,548 |
|
|
$ |
10,758 |
|
Vessel Impairment losses |
|
7,585 |
|
|
|
- |
|
Amortization of deferred
financing costs |
|
927 |
|
|
|
745 |
|
Amortization of original issue
discount/premium on repurchase of notes |
|
2,139 |
|
|
|
202 |
|
Amortization of intangible
liability/asset-charter agreements |
|
479 |
|
|
|
468 |
|
Share based compensation |
|
429 |
|
|
|
429 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
Increase in accounts
receivable and other assets |
$ |
(208 |
) |
|
$ |
(94 |
) |
(Increase)/decrease in
inventories |
|
(396 |
) |
|
|
442 |
|
Increase in accounts payable
and other liabilities |
|
6,595 |
|
|
|
3,719 |
|
Decrease in related parties'
balances, net |
|
(1,934 |
) |
|
|
(2,038 |
) |
Decrease in deferred
revenue |
|
(3,309 |
) |
|
|
(481 |
) |
Unrealized foreign exchange
gain |
|
- |
|
|
|
(5 |
) |
Net cash provided by
operating activities |
$ |
25,355 |
|
|
$ |
24,534 |
|
Cash flows from
investing activities: |
|
|
|
|
|
Acquisition of vessels |
$ |
(23,060 |
) |
|
$ |
- |
|
Cash paid for vessel
expenditure |
|
(1,108 |
) |
|
|
(637 |
) |
Advances for vessel
acquisitions and other additions |
|
(200 |
) |
|
|
- |
|
Cash paid for drydockings |
|
(4,072 |
) |
|
|
(50 |
) |
Net cash used in
investing activities |
$ |
(28,440 |
) |
|
$ |
(687 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds from issuance of 2024
Notes |
$ |
19,193 |
|
|
$ |
- |
|
Repurchase of 2022 Notes,
including premium |
|
(57,197 |
) |
|
|
- |
|
Proceeds from drawdown of
credit facilities |
|
47,000 |
|
|
|
- |
|
Repayment of credit
facilities |
|
(13,452 |
) |
|
|
(6,226 |
) |
Repayment of refinanced
debt |
|
(44,366 |
) |
|
|
- |
|
Deferred financing costs
paid |
|
(880 |
) |
|
|
- |
|
Proceeds from offering of
Class A common shares, net of offering costs |
|
(39 |
) |
|
|
- |
|
Proceeds from offering of
Series B preferred shares, net of offering costs |
|
3,803 |
|
|
|
- |
|
Series B Preferred
Shares-dividends paid |
|
(879 |
) |
|
|
(766 |
) |
Net cash used in
financing activities |
$ |
(46,817 |
) |
|
$ |
(6,992 |
) |
Net
(decrease)/increase in cash and cash equivalents and restricted
cash |
|
(49,902 |
) |
|
|
16,855 |
|
Cash and cash equivalents and
restricted cash at beginning of the period |
|
147,636 |
|
|
|
90,072 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
97,734 |
|
|
$ |
106,927 |
|
|
|
|
|
|
|
Supplementary Cash
Flow Information: |
|
|
|
|
|
Cash paid for interest |
|
11,189 |
|
|
|
9,563 |
|
Non-cash Investing
activities: |
|
|
|
|
|
Unpaid drydocking
expenses |
|
2,037 |
|
|
|
- |
|
Unpaid vessel additions |
|
3,436 |
|
|
|
- |
|
|
|
|
|
|
|
Investor and Media Contacts: The IGB GroupBryan
Degnan646-673-9701orLeon Berman 212-477-8438
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