SOURCE: Navios Maritime Midstream Partners L.P.

Navios Maritime Midstream Partners L.P.

January 27, 2015 06:24 ET

Navios Maritime Midstream Partners L.P. Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2014

Dividend of $0.1973 per Unit for the Period From November 18, 2014 to December 31, 2014

MONACO--(Marketwired - Jan 27, 2015) - Navios Maritime Midstream Partners L.P. ("Navios Midstream") (NYSE: NAP), an owner and operator of tanker vessels, reported its financial results today for the period from November 18, 2014, when it formally launched its shipping operations, through December 31, 2014. The reporting period consists of 44 of 92 days in the calendar quarter. On November 18, 2014, Navios Midstream completed its initial public offering ("IPO") and raised net proceeds of approximately $110.1 million through the sale of 8.1 million units to the public.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Midstream stated, "We are excited to report Navios Midstream's initial results for the quarter ending December 31, 2014. On a pro forma basis, assuming the fleet had been operational in Navios Midstream with its existing balance sheet for the entire quarter, Navios Midstream earned $16.0 million of revenue and $11.9 million of EBITDA. Navios Midstream declared a cash distribution of $0.1973 per unit, which translates into $0.4125 per unit on a quarterly basis, providing our unit holders with a yield of almost 11.5%. This yield is well in excess of the Alerian index yield, and we feel that it does not properly account for the growth characteristics of Navios Midstream."

Angeliki Frangou continued, "We believe the dramatic decline in the price of oil is unequivocally positive for oil consumption and ultimately oil transportation. Current spot rates for VLCCs are three times greater than the average VLCC spot rate for 2014 -- it appears that people are restocking in this low price environment. We do not believe that this behavior will be  short-lasting given the stimulative impact of the price decline in oil. With oil at about $50 per barrel, global consumers save about $4.5 billion a day compared to their oil expenditures in 2014. This amounts to annual savings of more than $1.6 trillion dollars, which should act to stimulate the global economy. This boost to the economy is in addition to the structural change in the demand for oil transportation, as ton miles have increased because oil consumption has effectively moved eastward while oil supply has effectively moved westward."

RECENT DEVELOPMENTS

Cash Distribution
The Board of Directors of Navios Midstream declared a cash distribution for the 44-day period from November 18, 2014 to December 31, 2014, of $0.1973 per unit ($0.4125 per unit on a quarterly basis). The cash distribution is payable on February 12, 2015 to unitholders of record on February 9, 2015. 

Credit Facility
In November 2014, Navios Midstream entered into a new credit facility of $126.0 million to finance a portion of the purchase price payable in connection with the acquisition of its four VLCCs. The facility bears interest at LIBOR plus 300 basis points per annum and has an amortization profile of 12 years.

Fleet Expansion-Options
Navios Midstream operates a fleet of four VLCCs and has options, exercisable for a period of two years following the closing of the IPO on November 18, 2014, to acquire up to seven additional VLCCs at fair market value from Navios Maritime Acquisition Corporation ("Navios Acquisition").

Navios Acquisition has provided a backstop commitment to Navios Midstream for three of the seven option vessels, for a period ranging from 2.0 to 4.0 years at the net time charter-out rate per day (net of commissions) of $35,000, if the market charter rate during the backstop period is lower than the agreed upon floor rate.

Long-Term Cash Flow
Navios Midstream has entered into long-term time charter-out agreements for its vessels with a remaining average term of 7.4 years, providing a stable base of revenue and distributable cash flow. Navios Acquisition has provided a backstop commitment to Navios Midstream for the Shinyo Ocean and the Shinyo Kannika for a period of 2.0 years following the scheduled redelivery of each vessel, at their currently contracted rates. Navios Midstream has currently contracted out 100% of its available days for each of the years 2015 and 2016, expecting to generate revenues of approximately $63.0 million and $63.2 million, respectively. The average expected daily charter-out rate for the fleet is $43,183, for each of the years 2015 and 2016. 

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Midstream has compiled a consolidated and combined statement of income for the three month period ended December 31, 2014 and a consolidated statement of income for the 44-day period post IPO, from November 18, 2014 to December 31, 2014. The historical quarterly 2014 and 44-day information was derived from the unaudited consolidated and combined financial statements for the respective periods. EBITDA and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Midstream's results.

Navios Midstream is also presenting a pro forma statement of income for the three month period ended December 31, 2014, which assumes that the IPO and related transactions occurred on October 1, 2014. Navios Midstream believes that pro forma statement of income is more representative of the quarterly results of Navios Midstream, given that it assumes a reduction in the quarterly interest expense of $3.0 million as a result of the new credit facility that the company entered into in connection with its IPO. Prior to the IPO, the four VLCCs were financed through the 8.125% Senior Notes due 2021 that were issued by Navios Acquisition ("2021 Notes") and these 2021 Notes were not assumed by Navios Midstream.

                   

(in thousands of U.S. dollars except per unit data)
  Historical
Period from November 18, 2014 to December 31, 2014
(unaudited)
    Historical
Three Month Period ended December 31, 2014
(unaudited)
    Pro Forma
Three Month Period ended December 31, 2014
(unaudited)
 
Revenues   $ 7,643     $ 16,008     $ 16,008  
Time charter expenses     (87 )     (183 )     (183 )
Direct vessel expenses     (138 )     (289 )     (289 )
Management fees     (1,672 )     (3,496 )     (3,496 )
General and administrative expenses     (264 )     (540 )     (540 )
Depreciation and amortization     (2,285 )     (4,877 )     (4,877 )
Interest expense and finance cost, net     (646 )     (4,130 )     (1,169 )
Other income     -       119       119  
Other expense     -       (5 )     (5 )
Net Income   $ 2,551     $ 2,607     $ 5,568  
                         
EBITDA   $ 5,620     $ 11,903     $ 11,903  
Earnings per Common unit (basic and diluted)   $ 0.13     $ 0.13     $ 0.29  
Operating Surplus   $ 4,593     $ N/A(1)     $ 8,714  
Maintenance and Replacement Capital expenditure reserve   $ 1,027     $ N/A(1)     $ 2,148  
                         
(1) Respective information is not applicable for periods prior to the IPO given the change in the business.
 

Period from November 18, 2014 to December 31, 2014 and Pro Forma and Historical results for the three month period ended December 31, 2014

For the 44-day period from November 18, 2014 to December 31, 2014 (the "44-day period"), Navios Midstream's time charter revenue amounted to $7.6 million, generating a time charter equivalent ("TCE") of $42,931. Other expenses including management fees and general and administrative expenses amounted to $1.9 million.

On a pro forma and historical basis, Navios Midstream's time charter revenue amounted to $16.0 million for the three month period ended December 31, 2014. Other expenses including management fees and general and administrative expenses amounted to $4.0 million, on both pro forma and historical basis for the three month period ended December 31, 2014.

EBITDA for the 44-day period was $5.6 million, whereas on a pro forma and historical basis for the three month period ended December 31, 2014, Navios Midstream generated EBITDA of $11.9 million.

The reserve for estimated maintenance and replacement capital expenditures for the 44-day period was $1.0 million ($2.1 million on a pro forma basis assuming full quarter operations). Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Midstream's capital assets.

Navios Midstream generated an Operating Surplus for the 44-day period of $4.6 million ($8.7 million on a pro forma basis for the three month period ended December 31, 2014). Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership's ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Depreciation and amortization expense for the 44-day period (including amortization of drydocking and special survey costs presented under direct vessel expenses) was $2.4 million and interest expense and finance cost related to the new facility agreement of $126.0 million was $0.6 million. Depreciation and amortization expense for the three month period ended December 31, 2014, was 5.2 million on both pro forma and historical basis. Interest expense and finance cost for three month period ended December 31, 2014, was $1.2 million and $4.1 million on a pro forma and historical basis, respectively. Prior to the IPO, the four VLCCs were financed through the 2021 Notes that were issued by Navios Acquisition and these 2021 Notes were not assumed by Navios Midstream.

Net income for the 44-day period was $2.6 million. Net income for the three month period ended December 31, 2014 was $5.6 million and $2.6 million on a pro forma and historical basis, respectively.

Fleet Employment Profile

The following table reflects certain key indicators of Navios Midstream's core fleet performance for the period from November 18, 2014 to December 31, 2014.

     
  Period from November 18, 2014 to December 31, 2014
(unaudited)
 
Available Days(1)   176  
Operating Days(2)   176  
Fleet Utilization(3)   100 %
Time Charter Equivalent (per day)(4) $ 42,931  
Vessels operating at period end   4  
       
(1)   Available days for the fleet represent total calendar days the vessels were in Navios Midstream's possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues.
     
(2)   Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
     
(3)   Fleet utilization is the percentage of time that Navios Midstream's vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydockings or special surveys.
     
(4)   Time Charter Equivalent ("TCE") rates: TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.
     

Conference Call details:

Navios Midstream's management will host a conference call today, Tuesday, January 27, 2015 to discuss the results for the fourth quarter ended December 31, 2014.

Conference Call details:

Call Date/Time: Tuesday, January 27, 2015 at 08:30 am ET
Call Title: Navios Midstream Q4 2014 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 6947 0658

The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:

US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 6947 0658

Slides and audio webcast:
There will also be a live webcast of the conference call, through the Navios Midstream's website (www.navios-midstream.com) under "Investors". Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A supplemental slide presentation will be available on the Navios Midstream's website under the "Investors" section by 8:00 am ET on the day of the call.

About Navios Maritime Midstream Partners L.P.

Navios Maritime Midstream Partners L.P. is a publicly traded master limited partnership which owns and operates crude oil tankers under long-term employment contracts. For more information, please visit our website at www.navios-midstream.com.

Forward-Looking Statements

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios Midstream's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "may", "expects", "intends", "plans", "believes", "anticipates", "hopes", "estimates", and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. Although the Navios Midstream believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Midstream. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand, competitive factors in the market in which Navios Midstream operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Midstream's filings with the Securities and Exchange Commission. Navios Midstream expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Midstream's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

 
EXHIBIT 1
NAVIOS MARITIME MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND COMBINED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars)
         
    December 31,
2014
  December 31,
2013
    (unaudited)   (unaudited)
ASSETS            
Current assets            
Cash and cash equivalents   $ 30,877   $ 9,152
Accounts receivable, net     653     817
Prepaid expenses and other current assets     212     219
Due from related parties     -     35,756
             
Total current assets     31,742     45,944
             
Vessels, net     320,229     336,452
Deferred finance costs, net     1,913     8,057
Intangible assets     31,736     35,022
Deferred dry dock and special survey costs, net     1,955     3,238
             
Total non-current assets     355,833     382,769
             
Total assets   $ 387,575   $ 428,713
             
LIABILITIES AND PARTNERS' CAPITAL            
Current liabilities            
Accounts payable   $ 1,243   $ 371
Accrued expenses     4,174     186
Due to related parties     736     472
Deferred revenue     1,938     1,938
Current portion of long-term debt     10,504     -
             
Total current liabilities     18,595     2,967
             
Long-term debt     115,496     341,034
             
Total non-current liabilities     115,496     341,034
             
Total liabilities   $ 134,091   $ 344,001
             
Commitments and contingencies     -     -
Owner's net investment     -     84,712
Partners' capital     253,484     -
             
Total liabilities, Partners' capital and owner's net investment   $ 387,575   $ 428,713
 
See notes to consolidated and combined financial statements.
 
 
 
NAVIOS MARITIME MIDSTREAM PARTNERS L.P.  
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS  
(Expressed in thousands of U.S. Dollars, except per unit amounts)  
                         
    Three Month
Period ended
December 31,
2014
(unaudited)
    Three Month
Period ended
December 31,
2013
(unaudited)
    Year ended
December 31,
2014
(unaudited)
    Year ended
December 31,
2013
(unaudited)
 
Revenues   $ 16,008     $ 16,049     $ 63,534     $ 63,659  
Time charter expenses     (183 )     (211 )     (762 )     (900 )
Direct vessel expenses     (289 )     (479 )     (1,283 )     (1,919 )
Management fees     (3,496 )     (3,680 )     (14,166 )     (14,600 )
General and administrative expenses     (540 )     (269 )     (1,296 )     (866 )
Depreciation and amortization     (4,877 )     (4,876 )     (19,509 )     (19,508 )
Interest expense and finance cost, net     (4,130 )     (7,518 )     (25,473 )     (31,249 )
Loss on bond extinguishment     -       (23,188 )     -       (23,188 )
Other income     119       -       119       -  
Other expense     (5 )     (54 )     -       (74 )
Net income/ (loss)   $ 2,607     $ (24,226 )   $ 1,164     $ (28,645 )
                                 
                                 
Earnings per unit:                        
                         
                         
    Three Month
Period ended
December 31,
2014
(unaudited)
    Three Month
Period ended
December 31,
2013
(unaudited)
    Year ended
December 31,
2014
(unaudited)
    Year ended
December 31,
2013
(unaudited)
 
Net income attributable to common units   $ 1,250       N/A     $ 1,250       N/A  
Earnings per unit:                                
Common unit (basic and diluted)   $ 0.13       N/A     $ 0.13       N/A  
                                 
                                 
                                 
NAVIOS MARITIME MIDSTREAM PARTNERS L.P.  
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS  
(Expressed in thousands of U.S. Dollars)  
   
    Year ended
December 31,
2014
    Year ended
December 31,
2013
 
Operating Activities                
Net income/ (loss)   $ 1,164     $ (28,645 )
Adjustments to reconcile net income/ (loss) to net cash provided by/ (used in) operating activities:                
Depreciation and amortization     19,509       19,508  
Amortization of deferred finance fees and bond premium     712       934  
Non-cash loss on extinguishment of 2017 Notes     -       5,442  
Amortization of dry dock and special survey costs     1,283       1,919  
Changes in operating assets and liabilities:                
Decrease/ (increase) in prepaid expenses and other current assets     7       (91 )
Decrease/ (increase) in accounts receivable     164       (176 )
Increase/ (decrease) in accounts payable     351       (59 )
Increase in accrued expenses     1,479       55  
Increase/ (decrease) in due to related parties     2,592       (37,941 )
                 
Net cash provided by/ (used in) operating activities   $ 27,261     $ (39,054 )
                 
Investing Activities                
Due from related parties     (52,314 )     (4,531 )
                 
Net cash used in investing activities   $ (52,314 )   $ (4,531 )
                 
Financing Activities                
                 
Loan and senior notes proceeds, net of deferred financing costs     124,027       332,883  
Repayment of 2017 Notes     -       (354,693 )
Cash remittance to Navios Acquisition     (214,854 )     -  
IPO proceeds, net of underwriting discount     113,906       -  
IPO expenses     (469 )     -  
Owner's net investment     24,168       69,771  
                 
Net cash provided by financing activities   $ 46,778     $ 47,961  
                 
Net increase in cash and cash equivalents     21,725       4,376  
Cash and cash equivalents, beginning of year     9,152       4,776  
                 
Cash and cash equivalents, end of year   $ 30,877     $ 9,152  
                 
Supplemental disclosures of cash flow information                
  Cash interest paid   $ 27,786     $ 31,695  
  Non-cash financing activities                
  Non-cash contributions by owners   $ -     $ -  
  Accrued IPO expenses   $ 3,290       -  
  Assets and liabilities retained by Navios Acquisition:                
  Long-term debt   $ 341,034       -  
  Due from related parties   $ (88,070 )     -  
  Due to related parties   $ 2,588       -  
  Deferred financing costs   $ (7,405 )     -  
                   
                   
                   
EXHIBIT 2
 
Owned Vessels Type Built Capacity (DWT)
Shinyo Kieran VLCC 2011 297,066
Shinyo Saowalak VLCC 2010 298,000
Shinyo Kannika VLCC 2001 287,175
Shinyo Ocean VLCC 2001 281,395
       
       
Option Vessels(1) Type Built Capacity (DWT)
Nave Buena Suerte VLCC 2011 297,491
Nave Quasar VLCC 2010 297,376
Nave Galactic VLCC 2009 297,168
Nave Celeste VLCC 2003 298,717
Nave Neutrino VLCC 2003 298,287
Nave Electron VLCC 2002 305,178
C. Dream VLCC 2000 298,570
       
(1)   Navios Midstream has options, exercisable for a period of two years following the closing of the IPO on November 18, 2014, to acquire up to seven VLCCs at fair market value, from Navios Acquisition.
     
EXHIBIT 3

Disclosure of Non-GAAP Financial Measures

1. EBITDA

EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes.

EBITDA is presented because Navios Midstream believes that EBITDA is a basis upon which liquidity can be assessed and present useful information to investors regarding Navios Midstream's ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. EBITDA is a "non-GAAP financial measure" and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.

2. Operating Surplus

Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense and estimated maintenance and replacement capital expenditures. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Midstream's capital assets.

Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

3. Available Cash  
Available Cash generally means for each fiscal quarter, all cash on hand at the end of the quarter:

  • less the amount of cash reserves established by the Board of Directors to:

    • provide for the proper conduct of Navios Midstream's business (including reserve for maintenance and replacement capital expenditures);

    • comply with applicable law, any of Navios Midstream's debt instruments, or other agreements; or

    • provide funds for distributions to the unitholders and to the general partner for any one or more of the next four quarters;

  • plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under any revolving credit or similar agreement used solely for working capital purposes or to pay distributions to partners.

Available Cash is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Available cash is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

4. Reconciliation of Non-GAAP Financial Measures

                   
    Historical
Period from
November 18, 2014
to December 31,
2014
($ '000)
(unaudited)
    Historical
Three Month period
ended
December 31,
2014
($ '000)
(unaudited)
    Pro Forma
Three Month period
ended
December 31,
2014
($ '000)
(unaudited)
 
  Net cash provided by operating activities   $ 8,213     $ 12,232     $ 15,163  
  Net decrease in operating assets     (552 )     (109 )     (109 )
  Net decrease in operating liabilities     (2,627 )     (4,192 )     (4,192 )
  Net interest cost     646       4,130       1,169  
Amortization of deferred financing costs     (60 )     (158 )     (128 )
  EBITDA(1)   $ 5,620     $ 11,903     $ 11,903  
  Cash paid for interest     -       (13,778 )     (1,041 )
  Maintenance and replacement capital expenditures     (1,027 )     N/A       (2,148 )
  Operating Surplus   $ 4,593     $ N/A     $ 8,714  
  Cash reserves     (831 )     N/A       (849 )
  Available cash for distribution   $ 3,762     $ N/A     $ 7,865  
                         
                         
(1)                        
                         
  Net cash provided by operating activities   $ 8,213     $ 12,232     $ 15,163  
  Net cash used in investing activities   $ -     $ (13,408 )   $ (13,408 )
  Net cash provided by financing activities   $ 22,610     $ 25,996     $ 25,996  
                         

Contact Information

  • Investor Relations Contacts

    Navios Maritime Midstream Partners L.P.
    +1 (212) 906 8647
    Email Contact