Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
 December 7, 2015 - 4:05 PM EST
Print Email Article Font Down Font Up Charts


DryShips Inc. Reports Financial and Operating Results for the Third Quarter 2015

ATHENS, GREECE--(Marketwired - Dec 7, 2015) - DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, an international owner of drybulk carriers and offshore support vessels, today announced its unaudited financial and operating results for the third quarter ended September 30, 2015.

Third Quarter 2015 Financial Highlights

  • For the third quarter of 2015, the Company reported a net loss of $820.0 million, or $1.23 basic and diluted loss per share.

    Included in the third quarter 2015 results are impairment charges and loss on sales on the entire drybulk fleet, of $797.5 million, or $1.20 per share.

    Excluding these impairment charges and losses, the Company's net results would have amounted to a net loss of $22.5 million, or $0.03 per share.(1)

  • The Company reported Adjusted EBITDA of $30.1 million for the third quarter of 2015.(2)

Recent Highlights

  • As of December 7, 2015, the Company has delivered all of its tanker vessels and 13 drybulk vessels to their new owners under the previously disclosed sales agreements for 10 tanker vessels and 17 drybulk vessels.

  • As of November 24, 2015, the Company has acquired a 100% equity stake in Nautilus OffShore Services Inc. ("Nautilus"). Nautilus owns six offshore supply vessels on time charter to Petrobras.

  • On November 2, 2015, the Company concluded two Memoranda of Agreement to sell its two Supramax vessels, the Byron and the Galveston, for an aggregate sales price of $12.3 million. The vessels were delivered to their new owners during November 2015.

  • On October 21, 2015, as amended on November 11, 2015, the Company entered into a secured revolving credit facility of up to $60 million with an entity controlled by Mr. George Economou. The loan is secured by the shares that the Company holds in Ocean Rig UDW Inc. ("Ocean Rig") and in Nautilus, and by a first priority mortgage over one Panamax drybulk carrier. The loan has a tenor of three years and both the lenders and the borrowers have certain conversion rights.

  • On October 13, 2015, the Company received an additional 180-day grace period to regain compliance with the Nasdaq's minimum bid price requirement, which will end on April 11, 2016. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by effecting a reverse stock split, if necessary.

(1) The net result includes approximately 40.44% of Ocean Rig's results, which are owned by DryShips Inc. common shareholders.
(2) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.

 
Fleet List
The table below describes our fleet profile as of December 1, 2015:
 
    Year           Gross rate   Redelivery    
    Built   DWT   Type   Per day   Earliest   Latest
Drybulk fleet                        
                         
Capesize:                        
Rangiroa (1)   2013   206,026   Capesize   $12,500   Aug-19   Feb-20
Negonego (1)   2013   206,097   Capesize   $12,500   Aug-19   Feb-20
Fakarava (1)   2012   206,152   Capesize   $12,500   Aug-19   Feb-20
Alameda (1)   2001   170,662   Capesize   $12,500   Aug-19   Feb-20
                         
Panamax:                        
Raraka   2012   76,037   Panamax   Spot   N/A   N/A
Amalfi   2009   75,206   Panamax   Spot   N/A   N/A
Rapallo   2009   75,123   Panamax   T/C Index linked   Jul-16   Sep-16
Catalina   2005   74,432   Panamax   Spot   N/A   N/A
Majorca   2005   74,477   Panamax   Spot   N/A   N/A
Ligari   2004   75,583   Panamax   Spot   N/A   N/A
Sorrento   2004   76,633   Panamax   Spot   N/A   N/A
Mendocino   2002   76,623   Panamax   T/C Index linked   Sep-16   Nov-16
Bargara   2002   74,832   Panamax   T/C Index linked   Sep-16   Nov-16
Oregon   2002   74,204   Panamax   Spot   N/A   N/A
Ecola   2001   73,931   Panamax   Spot   N/A   N/A
Samatan   2001   74,823   Panamax   Spot   N/A   N/A
Sonoma   2001   74,786   Panamax   Spot   N/A   N/A
Capitola   2001   74,816   Panamax   Spot   N/A   N/A
Levanto   2001   73,925   Panamax   T/C Index linked   Aug-16   Oct-16
Maganari   2001   75,941   Panamax   Spot   N/A   N/A
Coronado   2000   75,706   Panamax   Spot   N/A   N/A
Marbella   2000   72,561   Panamax   Spot   N/A   N/A
Redondo   2000   74,716   Panamax   Spot   N/A   N/A
Ocean Crystal   1999   73,688   Panamax   Spot   N/A   N/A
                         
Offshore Supply fleet                        
                         
Platform Supply Vessels:                        
Vega Crusader   2012   1,457   PSV   T/C   Jan.-17   Jan.-21
Vega Corona   2012   1,430   PSV   T/C   Dec.-16   Dec.-20
Oil Spill Recovery Vessels:                        
Vega Inruda   2013   1,393   OSRV   T/C   Aug.-17   Aug.-21
Vega Jaanca   2012   1,393   OSRV   T/C   Jul.-17   Jul.-21
Vega Emtoli   2012   1,363   OSRV   T/C   May.-17   May.-21
Vega Juniz   2012   1,317   OSRV   T/C   Apr.-17   Apr.-21
   
(1) Sold, expect to be delivered to new owners during Q4 2015/Q1 2016.
   
 
Drybulk Carrier and Tanker Segment Summary Operating Data (unaudited)
(Dollars in thousands, except average daily results)
 
Drybulk   Three Months Ended September 30,     Nine Months Ended September 30,  
    2014     2015     2014     2015  
Average number of vessels(1)     39.0       38.8       38.6       38.9  
Total voyage days for vessels(2)     3,543       3,357       10,334       10,221  
Total calendar days for vessels(3)     3,588       3,567       10,534       10,626  
Fleet utilization(4)     98.7 %     94.1 %     98.1 %     96.2 %
Time charter equivalent(5)   $ 10,875     $ 8,938     $ 12,141     $ 10,104  
Vessel operating expenses (daily)(6)   $ 6,013     $ 7,368     $ 6,311     $ 6,758  
             
Tanker   Three Months Ended September 30,     Nine Months Ended September 30,  
    2014     2015     2014     2015  
Average number of vessels(1)     10.0       4.7       10.0       8.2  
Total voyage days for vessels(2)     920       334       2,730       2,140  
Total calendar days for vessels(3)     920       429       2,730       2,239  
Fleet utilization(4)     100.0 %     77.9 %     100.0 %     95.6 %
Time charter equivalent(5)   $ 20,901     $ 25,341     $ 20,430     $ 37,058  
Vessel operating expenses (daily)(6)   $ 6,900     $ 16,660     $ 7,109     $ 8,650  
   
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our possession for the relevant period net of dry-docking days.
(3) Calendar days are the total number of days the vessels were in our possession for the relevant period including dry-docking days.
(4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from our vessels, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.
(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
(7) Does not include accrual for the provision of the purchase options and write off in overdue receivables under certain time charter agreements.
 
 
(In thousands of U.S. dollars, except for TCE rate, which is expressed in Dollars, and voyage days)
 
Drybulk   Three Months Ended September 30,     Nine Months Ended September 30,  
    2014     2015     2014     2015  
Voyage revenues(7)   $ 48,570     $ 35,329     $ 151,593     $ 123,168  
Voyage expenses     (10,040 )     (5,323 )     (26,131 )     (19,890 )
Time charter equivalent revenues   $ 38,530     $ 30,006     $ 125,462     $ 103,278  
Total voyage days for fleet     3,543       3,357       10,334       10,221  
Time charter equivalent TCE   $ 10,875     $ 8,938     $ 12,141     $ 10,104  
                                 
Tanker   Three Months Ended September 30,     Nine Months Ended September 30,  
    2014     2015     2014     2015  
Voyage revenues   $ 37,870     $ 15,437     $ 117,809     $ 120,316  
Voyage expenses     (18,641 )     (6,973 )     (62,036 )     (41,011 )
Time charter equivalent revenues   $ 19,229     $ 8,464     $ 55,773     $ 79,305  
Total voyage days for fleet     920       334       2,730       2,140  
Time charter equivalent TCE   $ 20,901     $ 25,341     $ 20,430     $ 37,058  
 
 
DryShips Inc.
Financial Statements
Unaudited Interim Condensed Consolidated Statements of Operations
 
(Expressed in Thousands of U.S. Dollars except for share and per share data)  
Three Months Ended September 30,
    Nine Months Ended September 30,  
    2014     2015     2014     2015  
                         
REVENUES:                        
Voyage revenues   $ 86,440     $ 50,766     $ 269,402     $ 220,254  
Revenues from drilling contracts     515,514       -       1,317,711       725,805  
      601,954       50,766       1,587,113       946,059  
                                 
EXPENSES:                                
Voyage expenses     28,681       12,296       88,167       60,901  
Vessel operating expenses     27,921       33,430       85,891       91,180  
Drilling rigs and drillships operating expenses     198,413       -       533,017       259,623  
Depreciation and amortization     113,603       17,444       333,538       226,980  
Vessels impairment, loss on sales and other     1,307       797,494       1,307       966,303  
General and administrative expenses     48,441       15,291       139,076       90,098  
Legal settlements and other, net     571       -       1,441       (2,803 )
                                 
Operating income/(loss)     183,017       (825,189 )     404,676       (746,223 )
                                 
OTHER INCOME / (EXPENSES):                                
Interest and finance costs, net of interest income     (110,903 )     (22,237 )     (311,196 )     (168,585 )
Gain/(Loss) on interest rate swaps     4,558       (871 )     (7,845 )     (12,319 )
Other, net     292       (223 )     2,830       (6,658 )
Income taxes     (17,940 )     -       (41,873 )     (36,931 )
Total other expenses, net     (123,993 )     (23,331 )     (358,084 )     (224,493 )
                                 
Net income/(loss)     59,024       (848,520 )     46,592       (970,716 )
                                 
Loss due to deconsolidation of Ocean Rig     -       -       -       (1,347,106 )
Equity in earnings of affiliate     -       28,558       -       37,409  
Net (income) attributable to Non controlling interests     (42,354 )     -       (70,107 )     (39,029 )
                                 
Net income/(loss) attributable to DryShips Inc.   $ 16,670     $ (819,962 )   $ (23,515 )   $ (2,319,442 )
                                 
Net income/(loss) attributable to DryShips Inc. common stockholders     16,252       (820,266 )     (24,048 )     (2,320,012 )
Earnings/(loss) per common share, basic and diluted   $ 0.04     $ (1.23 )   $ (0.06 )   $ (3.49 )
Weighted average number of shares, basic and diluted     413,249,829       664,983,162       411,999,014       664,882,270  
                                 
 
DryShips Inc.
Unaudited Condensed Consolidated Balance Sheets
 
(Expressed in Thousands of U.S. Dollars)   December 31, 2014   September 30, 2015
         
ASSETS        
         
  Cash, cash equivalents and restricted cash (current and non-current)   $ 658,936   $ 111,592
  Assets held for sale     -     611,544
  Other current assets     568,341     42,731
  Advances for vessels and drillships under construction and related costs     623,984     -
  Vessels, net     2,141,617     -
  Drilling rigs, drillships, machinery and equipment, net     6,259,747     -
  Investment in affiliate     -     472,298
  Other non-current assets     118,978     1,193
  Total assets     10,371,603     1,239,358
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
  Total debt     5,517,613     327,543
  Liabilities held for sale     -     245,217
  Total other liabilities     563,602     35,515
  Total stockholders' equity     4,290,388     631,083
  Total liabilities and stockholders' equity   $ 10,371,603   $ 1,239,358
             

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel impairments and certain other non-cash items as described below, dry-dockings, class survey costs and gains or losses on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by our lenders as a measure of our compliance with certain covenants contained in our loan agreements and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

 
The following table reconciles net income/(loss) to Adjusted EBITDA:
 
(Dollars in thousands)   Three Months Ended September 30, 2014     Three Months Ended September 30, 2015     Nine Months Ended September 30, 2014     Nine Months Ended September 30, 2015  
                         
Net income/(loss) attributable to Dryships Inc   $ 16,670     $ (819,962 )   $ (23,515 )   $ (2,319,442 )
                                 
Add: Net interest expense     110,903       22,237       311,196       168,585  
Add: Depreciation and amortization     113,603       17,444       333,538       226,980  
Add: Dry-dockings and class survey costs     1,984       12,044       7,306       20,293  
Add: Impairments losses on sales and other     1,307       797,494       1,307       989,533  
Add: Loss due to deconsolidation of Ocean Rig     -       -       -       1,347,106  
Add: Income taxes     17,940       -       41,873       36,931  
Add: Gain /(loss) on interest rate swaps     (4,558 )     871       7,845       12,319  
Add: Net income attributable to Non controlling interests     42,354       -       70,107       39,029  
Adjusted EBITDA   $ 300,203     $ 30,128     $ 749,657     $ 521,334  
                                 

About DryShips Inc.

DryShips Inc. is an owner of drybulk carriers and offshore support vessels that operate worldwide. DryShips also owns approximately 40% of the outstanding shares of Ocean Rig UDW Inc. (NASDAQ: ORIG), an international drilling contractor. DryShips owns a fleet of 24 drybulk carriers, comprising 4 Capesize and 20 Panamax with a combined deadweight tonnage of approximately 2.3 million tons, and 6 offshore supply vessels, comprising 2 platform supply and 4 oil spill recovery vessels.

DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."

Visit the Company's website at www.dryships.com

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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 such safe harbor legislation.

Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, 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 it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and dayrates and vessel and drilling dayrates and drybulk vessel, drilling rig and drillship values, failure of a seller to deliver one or more vessels or drilling units, drillships or drybulk vessels, failure of a buyer to accept delivery of a drilling rig, drillship, or vessel, inability to procure acquisition financing, default by one or more customers, changes in demand for drybulk commodities or oil, changes in demand that may affect attitudes of time charterers and customer drilling programs, scheduled and unscheduled drydockings and upgrades, changes in our operating expenses, including bunker prices, drydocking and insurance costs, complications associated with repairing and replacing equipment in remote locations, limitations on insurance coverage, such as war risk coverage, in certain areas, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the U.S. Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F.

Investor Relations / Media:

Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com


Source: Marketwired (December 7, 2015 - 4:05 PM EST)

News by QuoteMedia
www.quotemedia.com