SOURCE: Scorpio Bulkers Inc.

Scorpio Bulkers Inc.

March 04, 2014 08:51 ET

Scorpio Bulkers Inc. Announces Financial Results for the Fourth Quarter of 2013

MONACO--(Marketwired - Mar 4, 2014) -  Scorpio Bulkers Inc. (NYSE: SALT) (OSLO-OTC: SALT) ("Scorpio Bulkers," or the "Company") today reported its results for the three months ended December 31, 2013 and for the period from March 20, 2013 (date of inception) to December 31, 2013.

Results for the three months ended December 31, 2013

For the three months ended December 31, 2013, the Company had a net loss of $3.6 million, or $0.04 basic and diluted loss per share. 

For the three months ended December 31, 2013, the Company had no vessels in operation. As such, the Company had no revenues, voyage expenses or vessel related expenses. General and administrative expense was $4.8 million for the three months ended December 31, 2013, most of which relates to amortization of stock-based compensation and salaries of New York and Monaco based personnel, including officers. Amortization of stock-based compensation was $3.4 million for the three months ended December 31, 2013.

Results for the Period from March 20, 2013 (date of inception) to December 31, 2013

For the period from March 20, 2013 (date of inception) to December 31, 2013, the Company had a net loss of $6.3 million, or $0.16 basic and diluted loss per share. 

For the period from March 20, 2013 (date of inception) to December 31, 2013, the Company had no vessels in operation. As such, the Company had no revenues, voyage expenses or vessel related expenses. General and administrative expense was $5.5 million for the period from March 20, 2013 (date of inception) to December 31, 2013, the majority of which relates to amortization of stock-based compensation and salaries of New York and Monaco based personnel, including officers. Amortization of stock-based compensation was $3.4 million for the period from March 20, 2013 (date of inception) to December 31, 2013. 

Emanuele Lauro, Chairman of the Board and Chief Executive Officer, commented, "We have seen improvements in dry bulk rates over the past year, particularly in the fourth quarter of 2013. We believe rates will increase over the next few years, and our fleet of 74 newbuilding dry bulk vessels are poised to be delivered into favorable rate environments. Also, in anticipation of an increase in rates, we have time chartered-in ten modern dry bulk vessels at favorable rates." 

Recent Significant Events

Underwriters Exercise Option to Purchase Additional Shares

In January 2014, the underwriters in the Company's initial public offering, which closed on December 17, 2013, exercised in full their option to purchase an additional 4,695,000 common shares at the public offering price of $9.75 per share. The sale of these common shares resulted in net proceeds to the Company of approximately $42.6 million, after deducting underwriters' discounts and commissions. 

Newbuilding vessel orders

In January 2014, the Company announced that it had entered into agreements for the purchase of 20 Capesize dry bulk vessels and two Kamsarmax dry bulk vessels. The total purchase price for these 22 vessels is approximately $1,171 million and the deliveries of the vessels are expected to occur between the first quarter of 2015 and the third quarter of 2016.

Time chartered-in vessels

In February 2014, the Company announced that that it has agreed to time charter-in ten dry bulk vessels. The terms of the time charter-in contracts are summarized as follows:

 
Time Chartered-In vessels
                     
Vessel Type   Year Built   DWT   Where Built   Daily Base Rate   Earliest Expiry
Post-Panamax   2010   93,000   China   $13,250   28-Oct-14 (1)
Kamsarmax   2012   81,500   South Korea   $14,500   31-Dec-14 (2)
Kamsarmax   2011   81,500   South Korea   $15,000   31-Jan-16 (3)
Kamsarmax   2012   81,000   South Korea   $15,000   28-Feb-15 (4)
Kamsarmax   2012   79,500   China   $14,000   1-Jan-15 (5)
Panamax   2014   77,000   Japan   $16,000   31-Mar-15 (6)
Panamax   2009   76,500   Japan   $15,900   23-Jun-14 (7)
Ultramax   2010   61,000   Japan   $14,200   1-Apr-17 (8)
Supramax   2010   58,000   China   $14,250   31-Dec-16 (9)
Supramax   2015   55,000   Japan   $14,000   30-Jun-18 (10)
Total TC DWT       744,000            
                     
(1) This vessel has been time chartered-in for eight to ten months at Company's option at $13,250 per day. The vessel was delivered on February 23, 2014.
 
(2) This vessel has been time chartered-in for ten to twelve months at Company's option at $14,500 per day. The vessel was delivered on February 7, 2014.
 
(3) This vessel has been time-chartered in for 23 to 28 months at the Company's option at $15,000 per day. The Company has the option to extend the charter for an additional 11 to 13 months at $16,000 per day. This vessel was delivered on February 15, 2014.
 
(4) This vessel has been time chartered-in for twelve to fourteen months at Company's option at $15,000 per day. The vessel was delivered on February 10, 2014.
 
(5) This vessel has been time-chartered in for 11 to 14 month at the Company's option at $14,000 per day. The Company has the option to extend the charter for an additional 11 to 14 months at $14,750 per day. This vessel was delivered on February 23, 2014.
 
(6) This vessel has been time chartered-in for twelve to thirteen months at Company's option at $16,000 per day. The vessel is expected to be delivered by the end of March 2014.
 
(7) This vessel has been time chartered-in for five to seven months at Company's option at $15,900 per day. The vessel was delivered on January 23, 2014.
 
(8) This vessel has been time-chartered in for three years at $14,200 per day. The Company has options to extend the charter for up to three consecutive one year periods at $15,200 per day, $16,200 per day and $17,200 per day, respectively. This vessel is expected to be delivered during April 2014.
 
(9) This vessel has been time-chartered in for 20 to 24 month at the Company's option at $14,250 per day. The Company has the option to extend the charter for an additional 10 to 12 months at $14,850 per day. This vessel is expected to be delivered during the second quarter of 2014.
 
(10) This vessel has been time-chartered in for three years at $14,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $15,000 per day and $16,000 per day, respectively. This vessel is expected to be delivered during the first half of 2015.
 

Completion of Exchange Offer

On February 12, 2014, the Company completed its offer to exchange an aggregate of 96,065,411 unregistered common shares issued in equity private placements between July and October 2013 for an equivalent number of registered common shares. Pursuant to the exchange offer, holders of 95,766,779 unregistered common shares tendered such shares in exchange for registered common shares representing participation of 99.7%. The Company expects to terminate the Oslo OTC listing of its common shares during the second quarter of 2014.

$67.5 million Loan Facility

On February 25, 2014, the Company received a commitment from a leading European financial institution for a Loan Facility (the Facility) of up to $67.5 million. The Facility will be used to finance up to 60% of the purchase price upon delivery of two Ultramax and two Kamsarmax vessels currently under construction. The Facility has a final maturity of seven years from the date of delivery of each vessel. The terms and conditions of this commitment are consistent with those of the Company's existing credit commitments. The closing of the Facility remains subject to customary conditions precedent, including negotiation and execution of final documentation.

Conference Call

The Company will have a conference call on March 4, 2014 at 11:00 AM Eastern Standard Time and 5:00 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(888) 259-8724 (U.S.) or 1(913) 312-1477 (International). The conference participant passcode is 5083888. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website www.scorpiobulkers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: http://www.visualwebcaster.com/event.asp?id=98293

Current Liquidity

As of March 3, 2014, the Company had $668 million in cash and cash equivalents.

Newbuilding Program

The aggregate purchase price of our 74 vessels contracted to be constructed is approximately $2,765.5 million. As of March 3, 2014, we have paid a total of $476.4 million in installment payments due under our shipbuilding contracts for our Initial Fleet. The remaining $2,289.1 million is scheduled to be paid in installments through the delivery dates of each vessel. The Company currently has 28 Ultramax newbuildings, 23 Kamsarmax newbuildings and 23 Capesize newbuildings. The estimated future payment dates and amounts including the newbuilding contracts signed in 2014 are as follows*:

         
Installments by Quarter
         
         
Q1 2014   $ 175.7   million **
Q2 2014     118.5   million
Q3 2014     50.5   million
Q4 2014     34.1   million
Q1 2015     179.6   million
Q2 2015     139.2   million
Q3 2015     471.1   million
Q4 2015     339.5   million
Q1 2016     315.3   million
Q2 2016     343.4   million
Q3 2016     122.2   million
           
Total   $ 2,289.1   million
           

* These are estimates only and are subject to change as construction progresses. 
** Relates to payments expected to be made from March 4, 2014 to March 31, 2014.

             
Scorpio Bulkers Inc. and Subsidiaries  
(a development stage company)  
Consolidated Statement of Operations  
(Dollars in Thousands, Except Per Share Data)  
(unaudited)  
   
    Three months ended December 31, 2013     Period from March 20, 2013 (date of inception) to December 31, 2013  
Revenue:                
Vessel revenue   $ -     $ -  
                 
Operating expenses:                
Voyage expenses     -       -  
Vessel operating expenses     -       -  
Depreciation and amortization     -       -  
General and administrative expenses     4,829       5,505  
Total operating expenses     4,829       5,505  
                 
Operating loss     (4,829 )     (5,505 )
                 
Other income:                
Interest income     322       341  
Foreign exchange gain (loss)     945       (1,135 )
Other expense, net     (8 )     (8 )
Total other income     1,259       (802 )
                 
Net loss   $ (3,570 )   $ (6,307 )
                 
Loss per common share- basic and diluted (1)   $ (0.04 )   $ (0.16 )
                 
Weighted-average shares outstanding- basic and diluted (1)     91,021,923       39,924,201  
                 
(1) Diluted weighted-average shares outstanding, which would include the impact of restricted shares, for the three months ended December 31, 2013 and for the period from March 20, 2013 (date of inception) to December 31, 2013 would be anti-dilutive since the Company is in a net loss position. As such, there is no difference between basic and diluted earnings per share for these periods. 
 
 
 
Scorpio Bulkers Inc. and Subsidiaries  
(a development stage company)  
Consolidated Balance Sheet  
(Dollars in Thousands, Except Per Share Data)  
(unaudited)  
       
       
Assets   December 31, 2013  
         
Current assets        
  Cash and cash equivalents   $ 733,896  
  Prepaid expenses and other current assets     61  
Total current assets     733,957  
         
Non-current assets        
  Vessels under construction     371,692  
  Other assets     35  
Total non-current assets     371,727  
         
Total assets   $ 1,105,684  
         
Liabilities and shareholders' equity        
         
Current liabilities        
  Accounts payable and accrued expenses   $ 1,472  
Total current liabilities     1,472  
         
Non-current liabilites     -  
         
Total liabilities     1,472  
         
Shareholders' equity        
  Common stock, $0.01 par value per share; authorized 450,000,000 shares; 133,402,431 shares issued and outstanding shares as of December 31, 2013    
1,334
 
  Paid-in capital     1,109,185  
  Deficit accumulated during the development stage     (6,307 )
Total shareholders' equity     1,104,212  
         
Total liabilities and shareholders' equity   $ 1,105,684  
         
See notes to consolidated financial statements.        
         
         
         
Scorpio Bulkers Inc. and Subsidiaries  
(a development stage company)  
Consolidated Statement of Cash Flows  
(Dollars in Thousands)  
(unaudited)  
             
    Three Months Ended
December 31, 2013
    Period from March 20, 2013 (date of inception) to December 31, 2013  
Operating activities                
Net loss   $ (3,570 )   $ (6,307 )
Restricted stock amortization     3,359       3,359  
Increase in prepaid expenses and other current assets     (57 )     (61 )
Increase in other assets     (35 )     (35 )
Increase in accounts payable and accrued expenses     172       807  
Net cash used in operating activities     (131 )     (2,237 )
                 
Investing activities                
Payments for vessels under construction     (301,639 )     (371,692 )
Net cash used in investing activities     (301,639 )     (371,692 )
                 
Financing activities                
Proceeds from issuance of common stock     862,623       1,107,825  
Net cash provided by financing activities     862,623       1,107,825  
                 
Increase in cash and cash equivalents     560,853       733,896  
Cash at cash equivalents, beginning of period     173,043       -  
Cash and cash equivalents, end of period   $ 733,896     $ 733,896  
                 
                 
                 
Fleet List as of March 3, 2014
 
Newbuilds Under Construction        
                 
                 
    Capesize   Expected        
    Vessel Name   Delivery (1)   DWT   Shipyard
1   SBI Puro   Q1-15   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
2   SBI Valrico   Q2-15   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
3   SBI Maduro   Q3-15   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
4   SBI Belicoso   Q4-15   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
5   SBI Corona   Q1-16   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
6   SBI Diadema   Q2-16   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
7   SBI Estupendo   Q3-16   180,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
8   SBI Montesino   Q2-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
9   SBI Magnum   Q3-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
10   SBI Montecristo   Q3-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
11   SBI Aroma   Q3-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
12   SBI Cohiba   Q4-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
13   SBI Habano   Q4-15   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
14   SBI Lonsdale   Q1-16   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
15   SBI Partagas   Q1-16   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
16   SBI Parejo   Q2-16   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
17   SBI Toro   Q2-16   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
18   SBI Tuscamina   Q2-16   180,000   Sungdong Shipbuilding & Marine Engineering Co., Ltd.
19   SBI Churchill   Q4-15   180,000   Daewoo Mangalia Heavy Industries S.A.
20   SBI Perfecto   Q4-15   180,000   Daewoo Mangalia Heavy Industries S.A.
21   SBI Presidente   Q1-16   180,000   Daewoo Mangalia Heavy Industries S.A.
22   SBI Panatela   Q1-16   180,000   Daewoo Mangalia Heavy Industries S.A.
23   SBI Robusto   Q2-16   180,000   Daewoo Mangalia Heavy Industries S.A.
    Capesize NB DWT       4,140,000    
                 
    Kamsarmax            
        Expected        
    Vessel Name   Delivery (1)   DWT   Shipyard
1   SBI Cakewalk   Q2-14   82,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
2   SBI Charleston   Q3-14   82,000   Shanghai Waigaoqiao Shipbuilding Co., Ltd.
3   SBI Samba   Q1-15   84,000   Imabari Shipbuilding Co., Ltd.
4   SBI Rumba   Q3-15   84,000   Imabari Shipbuilding Co., Ltd.
5   SBI Electra   Q3-15   82,000   Jiangsu Yangzijiang Shipbuilding Co., Ltd.
6   SBI Flamenco   Q3-15   82,000   Jiangsu Yangzijiang Shipbuilding Co., Ltd.
7   SBI Rock   Q4-15   82,000   Jiangsu Yangzijiang Shipbuilding Co., Ltd.
8   SBI Twist   Q1-16   82,000   Jiangsu Yangzijiang Shipbuilding Co., Ltd.
9   SBI Salsa   Q3-15   81,600   Tsuneishi Group (Zhoushan) Shipbuilding Inc.
10   SBI Merengue   Q1-16   81,600   Tsuneishi Group (Zhoushan) Shipbuilding Inc.
11   SBI Capoeira   Q3-15   82,000   Hudong-Zhonghua (Group) Co., Ltd.
12   SBI Conga   Q3-15   82,000   Hudong-Zhonghua (Group) Co., Ltd.
13   SBI Bolero   Q3-15   82,000   Hudong-Zhonghua (Group) Co., Ltd.
14   SBI Carioca   Q4-15   82,000   Hudong-Zhonghua (Group) Co., Ltd.
15   SBI Sousta   Q4-15   82,000   Hudong-Zhonghua (Group) Co., Ltd.
16   SBI Reggae   Q1-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
17   SBI Lambada   Q1-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
18   SBI Zumba   Q1-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
19   SBI Macerena   Q2-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
20   SBI Swing   Q3-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
21   SBI Jive   Q3-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
22   SBI Parapara   Q1-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
23   SBI Mazurka   Q2-16   82,000   Hudong-Zhonghua (Group) Co., Ltd.
    Kamsarmax NB DWT   1,889,200    
                 
    Ultramax            
        Expected        
    Vessel Name   Delivery (1)   DWT   Shipyard
1   SBI Echo   Q2-15   61,000   Imabari Shipbuilding Co., Ltd.
2   SBI Cronos   Q3-15   61,000   Imabari Shipbuilding Co., Ltd.
3   SBI Tango   Q4-15   61,000   Imabari Shipbuilding Co., Ltd.
4   SBI Hermes   Q1-16   61,000   Imabari Shipbuilding Co., Ltd.
5   SBI Hera   Q2-16   60,200   Mitsui Engineering & Shipbuilding Co., Ltd.
6   SBI Zeus   Q2-16   60,200   Mitsui Engineering & Shipbuilding Co., Ltd.
7   SBI Poseidon   Q3-16   60,200   Mitsui Engineering & Shipbuilding Co., Ltd.
8   SBI Apollo   Q3-16   60,200   Mitsui Engineering & Shipbuilding Co., Ltd.
9   SBI Bravo   Q1-15   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
10   SBI Antares   Q1-15   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
11   SBI Maia   Q3-15   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
12   SBI Hydra   Q3-15   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
13   SBI Hyperion   Q2-16   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
14   SBI Tethys   Q2-16   61,000   Nantong COSCO KHI Ship Engineering Co. Ltd.
15   SBI Leo   Q2-15   61,000   Dalian COSCO KHI Ship Engineering Co. Ltd.
16   SBI Lyra   Q3-15   61,000   Dalian COSCO KHI Ship Engineering Co. Ltd.
17   SBI Subaru   Q3-15   61,000   Dalian COSCO KHI Ship Engineering Co. Ltd.
18   SBI Ursa   Q4-15   61,000   Dalian COSCO KHI Ship Engineering Co. Ltd.
19   SBI Athena   Q1-15   64,000   Chengxi Shipyard Co. Ltd.
20   SBI Pegasus   Q3-15   64,000   Chengxi Shipyard Co. Ltd.
21   SBI Orion   Q4-15   64,000   Chengxi Shipyard Co. Ltd.
22   SBI Thalia   Q4-15   64,000   Chengxi Shipyard Co. Ltd.
23   SBI Hercules   Q1-16   64,000   Chengxi Shipyard Co. Ltd.
24   SBI Kratos   Q1-16   64,000   Chengxi Shipyard Co. Ltd.
25   SBI Perseus   Q2-16   64,000   Chengxi Shipyard Co. Ltd.
26   SBI Samson   Q2-16   64,000   Chengxi Shipyard Co. Ltd.
27   SBI Phoebe   Q2-16   64,000   Chengxi Shipyard Co. Ltd.
28   SBI Phoenix   Q3-16   64,000   Chengxi Shipyard Co. Ltd.
    Ultramax NB DWT       1,734,800    
                 
74   Total Newbuild DWT   7,764,000    
             
(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.
 

About Scorpio Bulkers Inc.

Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc. currently has ten time chartered-in dry bulk vessels (one Ultramax, two Supramax, two Panamax, four Kamsarmax and one Post-Panamax vessels) and has contracted and agreed to purchase 74 dry bulk vessels consisting of 28 Ultramax, 23 Kamsarmax and 23 Capesize vessels to be delivered starting from the second quarter of 2014 from shipyards in Japan, Korea, China and Romania. Upon final delivery of all of the vessels, the owned fleet is expected to have a total carrying capacity of approximately eight million deadweight tonnes. Additional information about the Company is available on the Company's website www.scorpiobulkers.com, which is not a part of this press release.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

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

Contact Information

  • Contact:
    Scorpio Bulkers Inc.
    +377-9798-5715 (Monaco)
    +1-646-432-1675 (New York)