International Seaways Reports Third Quarter 2018 Results NEW YORK
International Seaways, Inc. (NYSE:INSW) (the “Company” or “INSW”), one
of the largest tanker companies worldwide providing energy
transportation services for crude oil and petroleum products in
International Flag markets, today reported results for the third quarter
2018.
Highlights
-
Net loss for the third quarter was $47.8 million, or $1.64 per share,
compared to net loss of $21.8 million, or $0.75 per share, in the
third quarter of 2017. Net loss this quarter reflects the impact of a
loss on vessel sales, including held for sale impairment charges, of
$17.4 million. Net loss excluding these items was $30.4 million, or
$1.04 per share.
-
Time charter equivalent (TCE) revenues(A) for the third
quarter were $51.3 million, compared to $56.5 million in the third
quarter of 2017.
-
Adjusted EBITDA(B) for the third quarter was $6.3 million,
compared to $16.0 million in the same period of 2017.
-
Cash(C) was $123.9 million as of September 30, 2018; total
liquidity was $173.9 million, including $50.0 million undrawn revolver.
-
Announced contract to install scrubbers on seven of its modern VLCCs,
intended to be funded with available liquidity. A further 3 options
were declared in October for a total of 10 scrubbers to be installed.
-
Sold a 2002-built Panamax and agreed to sell a 2001-built VLCC during
the quarter, which delivered to its buyer in October.
“During the third quarter, we maintained a lean and scalable model,
total liquidity of $173.9 million and took steps to enhance our earnings
power ahead of a market recovery, as we operated through a low point in
the tanker cycle,” said Lois K. Zabrocky, International Seaways’
president and CEO. “Following a comprehensive analysis, we signed
agreements to install Clean Marine scrubbers, a leading provider with
systems well suited to tankers, on our modern VLCC fleet with
engineering and installation to be provided by Hyundai Global System. We
believe the decision to install scrubbers on our largest ships is
consistent with our commitment to the environment and will provide the
Company with an economic advantage. As part of our fleet growth and
modernization program, which has resulted in the Company reducing the
average age of its fleet by 26% and increasing DWT by 13%, we have
continued to take steps to improve the age profile of our fleet with the
recent sale of two older vessels with an average age of 17.6 years.”
Ms. Zabrocky continued, “We remain well positioned to take advantage of
a market recovery in the crude and product tanker sectors. We have begun
seeing a much stronger rate environment develop, reinforcing our view
that we have passed the cycle’s lowest point based on supportive
long-term supply and demand fundamentals. Complementing our significant
spot market upside, we also continue to maintain a level of predictable
cash flows from our fixed rate charters and joint ventures.”
Third Quarter 2018 Results
Net loss for the third quarter was $47.8 million, or $1.64 per share,
compared to the net loss of $21.8 million, or $0.75 per share, in the
third quarter of 2017. The increase in the net loss in the third quarter
of 2018 primarily resulted from an increased loss on disposal of
vessels, including held for sale impairments, of $12.0 million, reduced
TCE revenues of $5.2 million, higher interest expense of $6.1 million
and a reduction in equity in income of affiliated companies of $7.5
million, as compared to the third quarter of 2017. These negative
factors were partially offset by decreases in vessel expenses,
third-party debt modification fees, depreciation and amortization, and
general and administrative expenses. Net loss for the nine months ended
September 30, 2018 was $95.9 million, or $3.29 per share, compared to
$15.4 million, or $0.53 per share, for the nine months ended September
30, 2017.
Consolidated TCE revenues for the third quarter of 2018 were $51.3
million, compared to $56.5 million in the third quarter of 2017.
Shipping revenues for the third quarter of 2018 were $60.9 million,
compared to $60.0 million in the third quarter of 2017. Consolidated TCE
revenues for the nine months ended September 30, 2018 were $150.1
million, compared to $209.9 million in the prior year period. Shipping
revenues for the nine months ended September 30, 2018 were $169.8
million compared to $220.7 million in the prior year period. The decline
in TCE revenues was due in part to a decline in average daily rates in
the VLCC and Product Carrier fleets. Fewer revenue days in the MR sector
resulting from vessel sales and redeliveries of charter-ins during 2017
and 2018 also contributed to the overall decline in revenue. Partially
offsetting these decreases was an increase in revenue days in the VLCC
fleet, reflecting the acquisition of seven modern VLCCs between November
2017 and June 2018.
The reduction in equity in income of affiliated companies was
principally attributable to decreases in earnings from the two FSO joint
ventures as charter rates in the five-year service contracts that
commenced during the third quarter of 2017 are lower than the charter
rates included in the service contracts under which the FSO joint
ventures had previously operated. In addition, interest expense for the
two FSO joint ventures increased in the third quarter of 2018 compared
to the third quarter of 2017 as a result of drawdowns on debt facilities
aggregating $220 million during April 2018. In addition, revenue
generated by the LNG joint venture during the third quarter of 2018 was
lower than revenue generated during the third quarter of 2017 as a
result of a reserve recorded for a potential offhire claim related to
damages to the engine of one of the joint venture’s vessels.
The increase in interest expense was primarily attributable to the
impact of debt facilities entered into by the Company during the second
quarter of 2018 in connection with the completion of acquisition of six
VLCCs from Euronav NV, accounting for $5.5 million, with the higher
average outstanding principal balances under the Company’s 2017 Credit
Agreement than under the 2014 facility that it replaced late in the
second quarter of 2017 and higher related interest rates accounting for
the balance.
Adjusted EBITDA was $6.3 million for the quarter, compared to $16.0
million in the third quarter of 2017. Adjusted EBITDA was $22.1 million
for the nine months ended September 30, 2018, compared to $94.6 million
for the nine months ended September 30, 2017.
Crude Tankers
TCE revenues for the Crude Tankers segment were $40.3 million for the
quarter, compared to $34.9 million in the third quarter of 2017. This
increase primarily resulted from the acquisition of modern VLCC and
Suezmax tonnage, which contributed an incremental $9.0 million and the
impact of higher average blended rates in the Aframax and Suezmax
sectors aggregating approximately $1.2 million. Aframax and Suezmax spot
rates increased to approximately $12,600 and $17,100 per day,
respectively. Lower average blended rates in the VLCC fleet accounted
for a decline in revenue of $4.2 million, with VLCC spot rates declining
to approximately $13,900 per day. There was a larger disparity in the
spot rates earned by the Company’s modern and non-modern VLCCs in the
current period versus the third quarter of 2017. VLCCs aged 15 years or
less earned an average daily rate of $15,398 per day compared to the
overall VLCC rate of $13,891 in the current period, while in the prior
year’s period the VLCCs under 15 years of age earned an average daily
rate of $16,489 per day compared to the overall VLCC rate of $16,171 per
day. Partially offsetting the increase in revenue days from the
acquisition of modern tonnage was the impact on revenue days of the
disposal of older tonnage: a 2001-built VLCC, which was idle from August
prior to its sale in October 2018, a 2000-built VLCC in April 2018, the
Company’s only ULCC in June 2018 and a 2001-built Aframax in May 2018.
Shipping revenues for the Crude Tankers segment were $49.9 million for
the quarter, compared to $38.3 million in the third quarter of 2017. TCE
revenues for the Crude Tankers segment were $104.0 million for the nine
months ended September 30, 2018, compared to $136.7 million for the same
period last year. Shipping revenues for the Crude Tankers segment were
$123.4 million for nine months ended September 30, 2018, compared to
$146.1 million for the same period last year.
Product Carriers
TCE revenues for the Product Carriers segment were $10.9 million for the
quarter, compared to $21.6 million in the third quarter of 2017. This
decrease was primarily due to a decline in average daily blended rates
earned by the MR, LR1 and LR2 fleets, with spot rates declining to
approximately $7,400, $9,500 and $8,900 per day, respectively,
aggregating approximately $4.1 million. Additionally, a 678-day decrease
in MR revenue days in the third quarter, arising primarily as a result
of the sales of five MRs between August 2017 and April 2018 and the
redelivery of three MRs to their owners between December 2017 and June
2018 at the expiry of their respective bareboat charters, accounted for
$6.4 million of the reduction in TCE revenues. Shipping revenues for the
Product Carriers segment were $11.0 million for the quarter, compared to
$21.7 million in the third quarter of 2017. TCE revenues for the Product
Carriers segment were $46.1 million for the nine months ended September
30, 2018, compared to $73.2 million in the 2017 nine-month period.
Shipping revenues for the Product Carriers segment were $46.4 million
for the nine months ended September 30, 2018, compared to $74.6 million
for the same period last year.
Vessel Sales
During the quarter, the Company sold a 2002-built Panamax, and agreed to
sell a 2001-built VLCC for further trading, which delivered to the new
owner in October. Subsequent to the end of the quarter, the Company sold
and delivered a 2001-built Aframax in October.
Conference Call
The Company will host a conference call to discuss its third quarter
2018 results at 9:00 a.m. Eastern Time (“ET”) on Wednesday, November 7,
2018.
To access the call, participants should dial (855) 940-9471 for domestic
callers and (412) 317-5211 for international callers. Please dial in ten
minutes prior to the start of the call.
A live webcast of the conference call will be available from the
Investor Relations section of the Company’s website at http://www.intlseas.com.
An audio replay of the conference call will be available starting at
12:00 p.m. ET on Wednesday, November 7, 2018 through 11:59 p.m. ET on
Wednesday, November 14, 2018 by dialing (877) 344-7529 for domestic
callers and (412) 317-0088 for international callers, and entering
Access Code 10125892.
About International Seaways, Inc.
International Seaways, Inc. (NYSE:INSW) is one of the largest tanker
companies worldwide providing energy transportation services for crude
oil and petroleum products in International Flag markets. International
Seaways owns and operates a fleet of 50 vessels as of October 24, 2018,
including 13 VLCCs, two Suezmaxes, six Aframaxes/LR2s, 11 Panamaxes/LR1s
and 12 MR tankers. Through joint ventures, it has ownership interests in
four liquefied natural gas carriers and two floating storage and
offloading service vessels. International Seaways has an experienced
team committed to the very best operating practices and the highest
levels of customer service and operational efficiency. International
Seaways is headquartered in New York City, NY. Additional information is
available at www.intlseas.com.
Forward-Looking Statements
This release contains forward-looking statements. In addition, the
Company may make or approve certain statements in future filings with
the Securities and Exchange Commission (SEC), in press releases, or in
oral or written presentations by representatives of the Company. All
statements other than statements of historical facts should be
considered forward-looking statements. These matters or statements may
relate to the Company’s plans to issue dividends, its prospects,
including statements regarding vessel acquisitions, trends in the tanker
markets, and possibilities of strategic alliances and investments.
Forward-looking statements are based on the Company’s current plans,
estimates and projections, and are subject to change based on a number
of factors. Investors should carefully consider the risk factors
outlined in more detail in the Annual Report on Form 10-K for 2017 for
the Company, and in similar sections of other filings made by the
Company with the SEC from time to time. The Company assumes no
obligation to update or revise any forward-looking statements.
Forward-looking statements and written and oral forward-looking
statements attributable to the Company or its representatives after the
date of this release are qualified in their entirety by the cautionary
statements contained in this paragraph and in other reports previously
or hereafter filed by the Company with the SEC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Shipping Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pool revenues
|
|
$
|
36,721
|
|
|
$
|
37,798
|
|
|
$
|
105,836
|
|
|
$
|
129,910
|
|
Time and bareboat charter revenues
|
|
|
5,932
|
|
|
|
12,024
|
|
|
|
20,453
|
|
|
|
43,816
|
|
Voyage charter revenues
|
|
|
18,273
|
|
|
|
10,146
|
|
|
|
43,524
|
|
|
|
46,949
|
|
Total Shipping Revenues
|
|
|
60,926
|
|
|
|
59,968
|
|
|
|
169,813
|
|
|
|
220,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses
|
|
|
9,673
|
|
|
|
3,479
|
|
|
|
19,747
|
|
|
|
10,774
|
|
Vessel expenses
|
|
|
34,433
|
|
|
|
37,095
|
|
|
|
102,619
|
|
|
|
106,196
|
|
Charter hire expenses
|
|
|
10,739
|
|
|
|
9,958
|
|
|
|
30,085
|
|
|
|
32,345
|
|
Depreciation and amortization
|
|
|
19,317
|
|
|
|
20,528
|
|
|
|
53,745
|
|
|
|
58,243
|
|
General and administrative
|
|
|
5,434
|
|
|
|
6,516
|
|
|
|
17,527
|
|
|
|
17,886
|
|
Third-party debt modification fees
|
|
|
(9
|
)
|
|
|
1,191
|
|
|
|
1,293
|
|
|
|
9,130
|
|
Separation and transition costs
|
|
|
-
|
|
|
|
(543
|
)
|
|
|
-
|
|
|
|
488
|
|
Loss on disposal of vessels and other property,
|
|
|
|
|
|
|
|
|
|
|
|
|
including impairments
|
|
|
17,360
|
|
|
|
5,406
|
|
|
|
17,193
|
|
|
|
5,406
|
|
Total operating expenses
|
|
|
96,947
|
|
|
|
83,630
|
|
|
|
242,209
|
|
|
|
240,468
|
|
Loss from vessel operations
|
|
|
(36,021
|
)
|
|
|
(23,662
|
)
|
|
|
(72,396
|
)
|
|
|
(19,793
|
)
|
Equity in income of affiliated companies
|
|
|
5,338
|
|
|
|
12,796
|
|
|
|
22,500
|
|
|
|
40,268
|
|
Operating (loss)/income
|
|
|
(30,683
|
)
|
|
|
(10,866
|
)
|
|
|
(49,896
|
)
|
|
|
20,475
|
|
Other income/(expense)
|
|
|
220
|
|
|
|
305
|
|
|
|
(3,964
|
)
|
|
|
(6,135
|
)
|
(Loss)/income before interest expense and income taxes
|
|
|
(30,463
|
)
|
|
|
(10,561
|
)
|
|
|
(53,860
|
)
|
|
|
14,340
|
|
Interest expense
|
|
|
(17,320
|
)
|
|
|
(11,232
|
)
|
|
|
(42,027
|
)
|
|
|
(29,677
|
)
|
Loss before income taxes
|
|
|
(47,783
|
)
|
|
|
(21,793
|
)
|
|
|
(95,887
|
)
|
|
|
(15,337
|
)
|
Income tax provision
|
|
|
(3
|
)
|
|
|
(23
|
)
|
|
|
(11
|
)
|
|
|
(31
|
)
|
Net loss
|
|
$
|
(47,786
|
)
|
|
$
|
(21,816
|
)
|
|
$
|
(95,898
|
)
|
|
$
|
(15,368
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
29,154,366
|
|
|
|
29,202,437
|
|
|
|
29,130,435
|
|
|
|
29,192,392
|
|
Diluted
|
|
|
29,154,366
|
|
|
|
29,202,437
|
|
|
|
29,130,435
|
|
|
|
29,192,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$
|
(1.64
|
)
|
|
$
|
(0.75
|
)
|
|
$
|
(3.29
|
)
|
|
$
|
(0.53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company adopted ASU No. 2017-07, Improving the Presentation of
Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
(ASC 715), which requires that an employer classify and report the
service cost component in the same line item or items in the statement
of operations as other compensation costs arising from services rendered
by the pertinent employees during the period and disclose by line item
in the statement of operations the amount of net benefit cost that is
included in the statement of operations. The other components of net
benefit cost would be presented in the statement of operations
separately from the service cost component and outside the subtotal of
income from operations. The Company adopted this accounting standard on
January 1, 2018 and has applied the guidance retrospectively.
|
|
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
91,547
|
|
$
|
60,027
|
Voyage receivables
|
|
|
73,946
|
|
|
58,187
|
Other receivables
|
|
|
5,125
|
|
|
4,411
|
Inventories
|
|
|
3,941
|
|
|
3,270
|
Prepaid expenses and other current assets
|
|
|
5,641
|
|
|
5,881
|
Current portion of derivative asset
|
|
|
619
|
|
|
16
|
Total Current Assets
|
|
|
180,819
|
|
|
131,792
|
|
|
|
|
|
|
|
Restricted Cash
|
|
|
32,313
|
|
|
10,579
|
Vessels and other property, less accumulated depreciation
|
|
|
1,354,359
|
|
|
1,104,727
|
Vessel held for sale, net
|
|
|
17,665
|
|
|
5,108
|
Deferred drydock expenditures, net
|
|
|
18,627
|
|
|
30,528
|
Total Vessels, Deferred Drydock and Other Property
|
|
|
1,390,651
|
|
|
1,140,363
|
Investments in and advances to affiliated companies
|
|
|
275,420
|
|
|
378,894
|
Long-term derivative asset
|
|
|
3,114
|
|
|
886
|
Other assets
|
|
|
4,389
|
|
|
1,970
|
Total Assets
|
|
$
|
1,886,706
|
|
$
|
1,664,484
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current liabilities
|
|
$
|
25,112
|
|
$
|
22,805
|
Payable to OSG
|
|
|
34
|
|
|
367
|
Payable associated with acquisition of vessels
|
|
|
20,935
|
|
|
-
|
Current installments of long-term debt
|
|
|
57,680
|
|
|
24,063
|
Current portion of derivative liability
|
|
|
770
|
|
|
-
|
Total Current Liabilities
|
|
|
104,531
|
|
|
47,235
|
Long-term debt
|
|
|
770,305
|
|
|
528,874
|
Other liabilities
|
|
|
3,822
|
|
|
2,721
|
Total Liabilities
|
|
|
878,658
|
|
|
578,830
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Total Equity
|
|
|
1,008,048
|
|
|
1,085,654
|
Total Liabilities and Equity
|
|
$
|
1,886,706
|
|
$
|
1,664,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(95,898
|
)
|
|
$
|
(15,368
|
)
|
Items included in net loss not affecting cash flows:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
53,745
|
|
|
|
58,243
|
|
Loss on write-down of vessels and other assets
|
|
|
17,367
|
|
|
|
7,346
|
|
Amortization of debt discount and other deferred financing costs
|
|
|
4,434
|
|
|
|
5,159
|
|
Deferred financing costs write-off
|
|
|
2,400
|
|
|
|
7,020
|
|
Stock compensation, non-cash
|
|
|
2,203
|
|
|
|
2,733
|
|
Earnings of affiliated companies
|
|
|
(22,965
|
)
|
|
|
(40,388
|
)
|
Other – net
|
|
|
436
|
|
|
|
132
|
|
Items included in net loss related to investing and financing
activities:
|
|
|
|
|
|
|
Gain on disposal of vessels and other property, net
|
|
|
(174
|
)
|
|
|
(1,940
|
)
|
Loss on extinguishment of debt
|
|
|
1,295
|
|
|
|
-
|
|
Cash distributions from affiliated companies
|
|
|
39,767
|
|
|
|
14,771
|
|
Payments for drydocking
|
|
|
(3,968
|
)
|
|
|
(19,787
|
)
|
Insurance claims proceeds related to vessel operations
|
|
|
5,125
|
|
|
|
1,005
|
|
Changes in operating assets and liabilities
|
|
|
(1,920
|
)
|
|
|
(7,836
|
)
|
Net cash provided by operating activities
|
|
|
1,847
|
|
|
|
11,090
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
Expenditures for vessels and vessel improvements
|
|
|
(135,215
|
)
|
|
|
(118,369
|
)
|
Proceeds from disposal of vessels and other property
|
|
|
132,886
|
|
|
|
7,662
|
|
Expenditures for other property
|
|
|
(333
|
)
|
|
|
(406
|
)
|
Investments in and advances to affiliated companies
|
|
|
2,891
|
|
|
|
(1,880
|
)
|
Repayments of advances from joint venture investees
|
|
|
95,987
|
|
|
|
11,729
|
|
Net cash provided by/(used in) investing activities
|
|
|
96,216
|
|
|
|
(101,264
|
)
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
Issuance of debt, net of issuance and deferred financing costs
|
|
|
70,266
|
|
|
|
584,963
|
|
Extinguishment of debt
|
|
|
(62,069
|
)
|
|
|
(458,416
|
)
|
Payments on debt
|
|
|
(52,596
|
)
|
|
|
(51,546
|
)
|
Repurchases of common stock
|
|
|
-
|
|
|
|
(3,177
|
)
|
Cash paid to tax authority upon vesting of stock-based compensation
|
|
|
(410
|
)
|
|
|
(261
|
)
|
Net cash (used in)/provided by financing activities
|
|
|
(44,809
|
)
|
|
|
71,563
|
|
Net increase in cash, cash equivalents and restricted cash
|
|
|
53,254
|
|
|
|
(18,611
|
)
|
Cash, cash equivalents and restricted cash at beginning of year
|
|
|
70,606
|
|
|
|
92,001
|
|
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
123,860
|
|
|
$
|
73,390
|
|
|
|
|
|
|
|
|
|
|
The Company adopted ASU No. 2016-18, Statement of Cash Flows (ASC
230), Restricted Cash, which requires that amounts generally described
as restricted cash and restricted cash equivalents be included with cash
and cash equivalents when reconciling the beginning-of-period and
end-of-period total amounts shown on the statement of cash flows. The
standard is effective for annual periods beginning after December 31,
2017 and interim periods within that reporting period. The Company
adopted this accounting standard on January 1, 2018. The adoption of
this accounting standard resulted in the inclusion of restricted cash of
$10,579 at December 31, 2017 in the beginning-of-period amount shown on
the statement of cash flows for the nine months ended September 30, 2018.
Spot and Fixed TCE Rates Achieved and Revenue Days
The following tables provides a breakdown of TCE rates achieved for spot
and fixed charters and the related revenue days for the three months
ended September 30, 2018 and the comparable period of 2017. Revenue days
in the quarter ended September 30, 2018 totaled 4,063 compared with
4,345 in the prior year quarter. A summary fleet list by vessel class
can be found later in this press release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
Spot
|
|
|
|
Fixed
|
|
|
|
Total
|
|
|
|
Spot
|
|
|
|
Fixed
|
|
|
|
Total
|
Crude Tankers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ULCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
|
$
|
32,175
|
|
|
|
|
Number of Revenue Days
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
92
|
|
|
|
92
|
VLCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
13,891
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
16,171
|
|
|
$
|
27,760
|
|
|
|
|
Number of Revenue Days
|
|
|
|
1,237
|
|
|
|
-
|
|
|
|
1,237
|
|
|
|
635
|
|
|
|
90
|
|
|
|
725
|
Suezmax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
17,138
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
14,464
|
|
|
$
|
-
|
|
|
|
|
Number of Revenue Days
|
|
|
|
184
|
|
|
|
-
|
|
|
|
184
|
|
|
|
133
|
|
|
|
-
|
|
|
|
133
|
Aframax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
12,576
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
10,762
|
|
|
$
|
-
|
|
|
|
|
Number of Revenue Days
|
|
|
|
515
|
|
|
|
-
|
|
|
|
515
|
|
|
|
588
|
|
|
|
-
|
|
|
|
588
|
Panamax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
10,010
|
|
|
$
|
11,593
|
|
|
|
|
|
|
$
|
11,118
|
|
|
$
|
12,014
|
|
|
|
|
Number of Revenue Days
|
|
|
|
184
|
|
|
|
462
|
|
|
|
646
|
|
|
|
267
|
|
|
|
376
|
|
|
|
643
|
Total Crude Tankers Revenue Days
|
|
|
|
2,120
|
|
|
|
462
|
|
|
|
2,582
|
|
|
|
1,623
|
|
|
|
558
|
|
|
|
2,181
|
Product Carriers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LR2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
8,868
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
11,964
|
|
|
$
|
-
|
|
|
|
|
Number of Revenue Days
|
|
|
|
92
|
|
|
|
-
|
|
|
|
92
|
|
|
|
91
|
|
|
|
-
|
|
|
|
91
|
LR1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
9,514
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
11,078
|
|
|
$
|
13,685
|
|
|
|
|
Number of Revenue Days
|
|
|
|
345
|
|
|
|
-
|
|
|
|
345
|
|
|
|
251
|
|
|
|
100
|
|
|
|
351
|
MR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average TCE Rate
|
|
|
$
|
7,425
|
|
|
$
|
5,294
|
|
|
|
|
|
|
$
|
10,063
|
|
|
$
|
5,294
|
|
|
|
|
Number of Revenue Days
|
|
|
|
952
|
|
|
|
92
|
|
|
|
1,044
|
|
|
|
1,630
|
|
|
|
92
|
|
|
|
1,722
|
Total Product Carriers Revenue Days
|
|
|
|
1,389
|
|
|
|
92
|
|
|
|
1,481
|
|
|
|
1,972
|
|
|
|
192
|
|
|
|
2,164
|
Total Revenue Days
|
|
|
|
3,509
|
|
|
|
554
|
|
|
|
4,063
|
|
|
|
3,595
|
|
|
|
750
|
|
|
|
4,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days in the above table exclude days related to full service
lighterings and days for which recoveries were recorded under the
Company’s loss of hire insurance policies.
Fleet Information
As of September 30, 2018, INSW’s owned and operated 52 vessels, 40 of
which were owned, 6 of which were chartered in, and 6 were held through
joint venture partnerships (2 FSO and 4 LNG vessels)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels Owned
|
|
|
Vessels Chartered-in
|
|
|
Total at September 30, 2018
|
Vessel Type
|
|
|
Number
|
|
|
Weighted by Ownership
|
|
|
Number
|
|
|
Weighted by Ownership
|
|
|
Total Vessels
|
|
|
Vessels Weighted by Ownership
|
|
|
Total Dwt
|
Operating Fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FSO
|
|
|
2
|
|
|
1.0
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
1.0
|
|
|
864,046
|
VLCC
|
|
|
14
|
|
|
14.0
|
|
|
-
|
|
|
-
|
|
|
14
|
|
|
14.0
|
|
|
4,248,751
|
Suezmax
|
|
|
2
|
|
|
2.0
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
2.0
|
|
|
316,864
|
Aframax
|
|
|
4
|
|
|
4.0
|
|
|
2
|
|
|
2.0
|
|
|
6
|
|
|
6.0
|
|
|
674,999
|
Panamax
|
|
|
7
|
|
|
7.0
|
|
|
-
|
|
|
-
|
|
|
7
|
|
|
7.0
|
|
|
487,490
|
Crude Tankers
|
|
|
29
|
|
|
28.0
|
|
|
2
|
|
|
2.0
|
|
|
31
|
|
|
30.0
|
|
|
6,592,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LR2
|
|
|
1
|
|
|
1.00
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
1.0
|
|
|
109,999
|
LR1
|
|
|
4
|
|
|
4.00
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
4.0
|
|
|
297,710
|
MR
|
|
|
8
|
|
|
8.00
|
|
|
4
|
|
|
4.0
|
|
|
12
|
|
|
12.0
|
|
|
591,910
|
Product Carriers
|
|
|
13
|
|
|
13.00
|
|
|
4
|
|
|
4.0
|
|
|
17
|
|
|
17.0
|
|
|
999,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Crude Tanker & Product Carrier
Operating Fleet
|
|
|
42
|
|
|
41.0
|
|
|
6
|
|
|
6.0
|
|
|
48
|
|
|
47.0
|
|
|
7,591,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LNG Fleet
|
|
|
4
|
|
|
2.0
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
2.0
|
|
|
864,800 cbm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,591,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
Total Operating Fleet
|
|
|
46
|
|
|
43.0
|
|
|
6
|
|
|
6.0
|
|
|
52
|
|
|
49.0
|
|
|
864,800 cbm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Non-GAAP Financial Information
The Company believes that, in addition to conventional measures prepared
in accordance with GAAP, the following non-GAAP measures may provide
certain investors with additional information that will better enable
them to evaluate the Company’s performance. Accordingly, these non-GAAP
measures are intended to provide supplemental information, and should
not be considered in isolation or as a substitute for measures of
performance prepared with GAAP.
(A) Time Charter Equivalent (TCE) Revenues
Consistent with general practice in the shipping industry, the Company
uses TCE revenues, which represents shipping revenues less voyage
expenses, as a measure to compare revenue generated from a voyage
charter to revenue generated from a time charter. Time charter
equivalent revenues, a non-GAAP measure, provides additional meaningful
information in conjunction with shipping revenues, the most directly
comparable GAAP measure, because it assists Company management in making
decisions regarding the deployment and use of its vessels and in
evaluating their financial performance. Reconciliation of TCE revenues
of the segments to shipping revenues as reported in the consolidated
statements of operations follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
($ in thousands)
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
TCE revenues
|
|
$
|
51,253
|
|
$
|
56,489
|
|
|
$
|
150,066
|
|
$
|
209,901
|
Add: Voyage expenses
|
|
|
9,673
|
|
|
3,479
|
|
|
|
19,747
|
|
|
10,774
|
Shipping revenues
|
|
$
|
60,926
|
|
$
|
59,968
|
|
|
$
|
169,813
|
|
$
|
220,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(B) EBITDA and Adjusted EBITDA
EBITDA represents net (loss)/income before interest expense, income
taxes and depreciation and amortization expense. Adjusted EBITDA
consists of EBITDA adjusted for the impact of certain items that we do
not consider indicative of our ongoing operating performance. EBITDA and
Adjusted EBITDA do not represent, and should not be a substitute for,
net income or cash flows from operations as determined in accordance
with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA
do not reflect our cash expenditures, or future requirements for capital
expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA
do not reflect changes in, or cash requirements for, our working capital
needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the
significant interest expense, or the cash requirements necessary to
service interest or principal payments, on our debt. While EBITDA and
Adjusted EBITDA are frequently used as a measure of operating results
and performance, neither of them is necessarily comparable to other
similarly titled captions of other companies due to differences in
methods of calculation. The following table reconciles net loss as
reflected in the consolidated statements of operations, to EBITDA and
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
($ in thousands)
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
Net loss
|
|
$
|
(47,786
|
)
|
|
$
|
(21,816
|
)
|
|
|
$
|
(95,898
|
)
|
|
$
|
(15,368
|
)
|
Income tax provision
|
|
|
3
|
|
|
|
23
|
|
|
|
|
11
|
|
|
|
31
|
|
Interest expense
|
|
|
17,320
|
|
|
|
11,232
|
|
|
|
|
42,027
|
|
|
|
29,677
|
|
Depreciation and amortization
|
|
|
19,317
|
|
|
|
20,528
|
|
|
|
|
53,745
|
|
|
|
58,243
|
|
EBITDA
|
|
|
(11,146
|
)
|
|
|
9,967
|
|
|
|
|
(115
|
)
|
|
|
72,583
|
|
Third-party debt modification fees and costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associated with extinguishment of debt
|
|
|
(9
|
)
|
|
|
1,191
|
|
|
|
|
1,293
|
|
|
|
9,130
|
|
Separation and transition costs
|
|
|
-
|
|
|
|
(543
|
)
|
|
|
|
-
|
|
|
|
488
|
|
Loss on disposal of vessels and other property,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
including impairments
|
|
|
17,360
|
|
|
|
5,406
|
|
|
|
|
17,193
|
|
|
|
5,406
|
|
Write-off of deferred financing costs
|
|
|
128
|
|
|
|
-
|
|
|
|
|
2,400
|
|
|
|
7,020
|
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,295
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
$
|
6,333
|
|
|
$
|
16,021
|
|
|
|
$
|
22,066
|
|
|
$
|
94,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(C) Total Cash
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
($ in thousands)
|
|
|
2018
|
|
|
|
2017
|
Cash and cash equivalents
|
|
$
|
91,547
|
|
|
$
|
60,027
|
Restricted cash
|
|
|
32,313
|
|
|
|
10,579
|
Total Cash
|
|
$
|
123,860
|
|
|
$
|
70,606
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at September 30, 2018 is before the settlement
of the $20.9 million payable balance related to the acquisition of the
six VLCCs in the first half of October and the payment of certain
principal and interest installments, otherwise due at quarter end on the
first business day in October, aggregating approximately $10.1 million.
Restricted cash will increase by approximately $26.9 million due to the
sale and delivery of two vessels (a 2001-built VLCC and a 2001-built
Aframax) in October 2018.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181107005116/en/ Copyright Business Wire 2018
Source: Business Wire
(November 7, 2018 - 6:45 AM EST)
News by QuoteMedia
www.quotemedia.com
|