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Dryships Inc. Reports Financial and Operating results for the Fourth Quarter of 2018

ATHENS, Greece, Feb. 28, 2019 (GLOBE NEWSWIRE) -- DryShips Inc. (DRYS) (“DryShips” or the “Company”), a diversified owner and operator of ocean going cargo vessels, today announced its unaudited financial and operating results for the quarter ended December 31, 2018.

Fourth Quarter 2018 Financial Highlights

  • For the fourth quarter of 2018, the Company reported net income of $5.8 million, or $0.06 basic and diluted earnings per share.

    Included in the fourth quarter of 2018 results are:

    -- Losses from the sale of vessels to unaffiliated buyers and vessel impairments totaling $0.6 million, or $0.01 per share.

    -- Vessel dry-docking costs of $1.4 million, or $0.02 per share

    Excluding the above, the Company’s net results would have amounted to net income of $7.8 million, or $0.09 earnings per share.
  • The Company reported Adjusted EBITDA of $19.4 million for the fourth quarter of 2018.([1])

Recent Developments

  • Common Stock Repurchase Program

    As of February 28, 2019, the Company has repurchased a total of 6,523,854 shares of its common stock for an aggregate amount of $37.3 million, including commissions, pursuant to its previously announced new stock repurchase program under which the Company may repurchase up to $50.0 million of its outstanding common shares until October 29, 2019. Under its old $50.0 million stock repurchase program, which was completed in full on October 5, 2018, the Company had also repurchased a total of 10,864,227 shares of its common stock for an aggregate amount of $50.2 million, including commissions. The Company currently has outstanding 86,886,627 shares of common stock.

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(1) Adjusted EBITDA is a non-U.S. GAAP measure; please see later in this press release for reconciliation to net income / (loss).


Fleet List

The table below describes the Company’s fleet as of February 28, 2019:

  Year   Gross rate Redelivery
  Built DWT Per day Earliest Latest
Drybulk fleet          
           
Newcastlemax:          
Bacon 2013 205,170 T/C Index Linked Sep-19 Oct-19
Conquistador* 2016 209,090 T/C Index Linked N/A N/A
Huahine 2013 206,037 T/C Index Linked Sep-19 Oct-19
Judd 2015 205,796 T/C Index Linked Sep-19 Oct-19
Marini* 2014 205,854 T/C Index Linked Oct-19 Dec-19
Morandi 2013 205,854 T/C Index Linked Aug-19 Sep-19
Pink Sands* 2016 208,931 T/C Index Linked N/A N/A
Xanadu* 2017 208,827 T/C Index Linked N/A N/A
           
Kamsarmax:          
Castellani 2014 82,129 Spot N/A N/A
Kelly 2017 81,300 Spot N/A N/A
Matisse 2014 81,128 Spot N/A N/A
Nasaka 2014 81,918 Spot N/A N/A
Valadon 2014 81,198 Spot N/A N/A
           
Panamax:          
Catalina 2005 74,432 Spot N/A N/A
Levanto 2001 73,925 Spot N/A N/A
Ligari 2004 75,583 Spot N/A N/A
Majorca 2005 74,477 Spot N/A N/A
Rapallo 2009 75,123 Spot N/A N/A
Raraka 2012 76,037 Spot N/A N/A
           
Tanker fleet          
           
Very Large Crude Carrier:          
Shiraga 2011 320,105 Spot N/A N/A
           
Suezmax:          
Marfa 2017 159,513 Spot N/A N/A
Samsara** 2017 159,855 $18,000 Base rate plus profit share Mar.-22 May-25
           
Aframax:          
Balla 2017 113,293 Spot N/A N/A
Botafogo 2010 106,892 Spot N/A N/A
Stamos 2012 115,666 Spot N/A N/A
           
Offshore Supply fleet          
           
Platform Supply Vessels:          
Crescendo 2012 1,457 Laid up N/A N/A
Colorado 2012 1,430 Laid up N/A N/A
Oil Spill Recovery Vessels:          
Indigo 2013 1,401 Laid up N/A N/A
Jacaranda 2012 1,360 Laid up N/A N/A
Emblem 2012 1,363 Laid up N/A N/A
Jubilee 2012 1,317 Laid up N/A N/A

* The vessel is time chartered by TMS Dry Ltd., an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

** The vessel is time chartered by Cecilia Shipholdings Limited, an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.


Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited)
(U.S. Dollars in thousands, except average daily results)

Drybulk Three Months Ended
December 31,
  Year Ended
December 31,
  2017   2018   2017   2018
Average number of vessels(1) 22.0   17.1   18.1   19.2
Total voyage days for vessels(2) 1,952   1,553   6,534   6,947
Total calendar days for vessels(3) 2,022   1,576   6,604   7,024
Fleet utilization(4) 96.5%   98.5%   98.9%   98.9%
Time charter equivalent(5) $11,410   $14,023   $8,544   $12,405
Vessel operating expenses (daily)(6) $6,385   $5,907   $6,061   $6,343

               

Tanker Three Months Ended
December 31,
  Year Ended
December 31,
  2017   2018   2017   2018
Average number of vessels(1) 4.0   5.2   2.5   4.6
Total voyage days for vessels(2) 368   478   911   1,685
Total calendar days for vessels(3) 368   478   911   1,685
Fleet utilization(4) 100%   100%   100%   100%
Time charter equivalent(5) $17,003   $27,981   $13,216   $20,715
Vessel operating expenses (daily)(6) $7,745   $7,479   $9,693   $7,536


Gas Carrier Three Months Ended
December 31,
  Year Ended
December 31,
  2017   2018   2017   2018
Average number of vessels(1) 2.6   1.3   1.0   3.3
Total voyage days for vessels(2) 241   115   355   1,197
Total calendar days for vessels(3) 241   115   355   1,197
Fleet utilization(4) 100%   100%   100%   100%
Time charter equivalent(5) $28,058   $27,339   $27,994   $27,883
Vessel operating expenses (daily)(6) $13,220   $10,087   $16,183   $8,611

(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company’s 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 the Company’s possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(3) Calendar days are the total number of days the vessels were in the Company’s possession for the relevant period including off-hire days associated with drydockings or special or intermediate surveys and laid-up days.

(4) Fleet utilization is the percentage of time that the Company’s 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. The Company’s 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 the Company’s vessels, the most directly comparable U.S. GAAP measure, because it assists the Company’s 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 including dry-docking costs, is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.


Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) - continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. Dollars, and voyage days)

Drybulk   Three Months Ended December 31,   Year Ended December 31,
    2017   2018     2017   2018
Voyage revenues $ 25,808 $ 24,475   $ 65,724 $ 94,369
Voyage expenses   (3,536)   (2,698)     (9,900)   (8,190)
Time charter equivalent revenues $ 22,272 $ 21,777   $ 55,824 $ 86,179
Total voyage days for fleet    1,952   1,553     6,534   6,947
Time charter equivalent (TCE) $ 11,410 $ 14,023   $ 8,544 $ 12,405


Tanker   Three Months Ended December 31,   Year Ended December 31,
    2017   2018     2017   2018
Voyage revenues $ 9,786 $ 21,497   $ 20,858 $ 57,004
Voyage expenses   (3,529)   (8,122)     (8,818)   (22,100)
Time charter equivalent revenues $ 6,257 $ 13,375   $ 12,040 $ 34,904
Total voyage days for fleet    368   478     911   1,685
Time charter equivalent (TCE) $ 17,003 $ 27,981   $ 13,216 $ 20,715


Gas Carrier   Three Months Ended December 31,   Year Ended December 31,
    2017   2018     2017   2018
Voyage revenues $ 7,000 $ 3,290   $ 10,316 $ 34,762
Voyage expenses   (238)   (146)     (378)   (1,386)
Time charter equivalent revenues $ 6,762 $ 3,144   $ 9,938 $ 33,376
Total voyage days for fleet    241   115     355   1,197
Time charter equivalent (TCE) $ 28,058 $ 27,339   $ 27,994 $ 27,883
                   


DryShips Inc.

Financial Statements
Unaudited Condensed Consolidated Statements of Operations

(Expressed in Thousands of U.S. Dollars
except for share and per share data)
   

Three Months Ended December 31,
  Year Ended December 31,
    2017     2018       2017     2018  
                   
REVENUES:                  
Voyage revenues $ 42,593   $ 49,262     $ 100,716   $ 186,135  
    42,593     49,262       100,716     186,135  
                   
EXPENSES:                  
Voyage expenses   7,308     10,966       19,704     31,676  
Vessel operating expenses   19,192     14,235       60,260     68,391  
Depreciation   6,334     6,202       14,966     25,881  
Impairment loss,(gain)/loss from sale of vessels and other   (4,425 )   585       (4,125 )   (9,623 )
General and administrative expenses   7,334     6,314       30,972     28,314  
Other, net   -     (86 )     (12 )   853  
                   
Operating income/(loss)   6,850     11,046       (21,049 )   40,643  
                   
OTHER EXPENSES:                  
Interest and finance costs, net of interest income   (5,029 )   (5,346 )     (13,342 )   (18,946 )
Loss on private placement   -     -       (7,600 )   -  
Other, net   (32 )   128       (553 )   83  
Total other expenses, net   (5,061 )   (5,218 )     (21,495 )   (18,863 )
                   
Net income/(loss)   1,789     5,828       (42,544 )   21,780  
                   
Net income/(loss) attributable to DryShips Inc. common stockholders   1,789     5,828       (39,739 )   21,780  
Earnings/(Losses) per common share, basic and diluted $ 0.02   $ 0.06     $ (1.13 ) $ 0.22  
Weighted average number of shares, basic and diluted   103,088,937     91,050,308       35,225,784     98,113,545  
                           


DryShips Inc.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in Thousands of U.S. Dollars
 except for share data)
  December 31, 2017
  December 31, 2018
           
ASSETS          
             
  Cash, cash equivalents, including restricted cash (current and non-current) $ 30,226   $ 156,881  
  Other current and non-current assets    123,713     99,092  
  Advances for vessels under construction   31,898     -  
  Vessels, net   749,088     755,332  
  Total assets   934,925     1,011,305  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY            
               
               
  Total debt and finance lease liabilities   216,969     362,047  
  Total other liabilities   10,920     11,529  
  Total stockholders’ equity   707,036     637,729  
  Total liabilities and stockholders’ equity $ 934,925   $ 1,011,305  
         
         
SHARE COUNT DATA        
Common stock issued   104,274,708     104,274,708  
Less: Treasury stock   -     (17,042,680 )
Common stock issued and outstanding   104,274,708     87,232,028  
             


Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel sales and impairments and certain other non-cash items as described below. 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, and the Company’s 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 the Company’s lenders as a credit metric and 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:

(Expressed in Thousands of U.S. Dollars)   Three Months Ended
December 31,
    Year Ended
December 31,
    2017     2018       2017     2018  
                     
Net income/(loss) $ 1,789   $ 5,828     $ (42,544 ) $ 21,780  
                     
Add: Net interest expense   5,029     5,346       13,342     18,946  
Add: Depreciation   6,334     6,202       14,966     25,881  
Add: Dry-dockings   1,113     1,392       1,113     5,301  
Add: Impairment loss, (gain)/loss from sale of vessel and other   (4,425 )   585       (4,125 )   (9,623 )
Add: Loss on private placement   -     -       7,600     -  
Add: Write-off of capitalized expenses   -     -       -     470  
Add: Income taxes   71     2       152     6  
Adjusted EBITDA $ 9,911   $ 19,355     $ (9,496 ) $ 62,761  
                           


About DryShips Inc.

The Company is a diversified owner and operator of ocean going cargo vessels that operate worldwide. As of February 28, 2019, the Company operates a fleet of 31 vessels comprising of (i) 6 Panamax drybulk vessels; (ii) 8 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 3 Aframax tankers; (vi) 2 Suezmax tankers; and (vii) 6 Offshore Support Vessels, including 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 press 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 the Company’s 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 the Company’s records and other data available from third parties. Although the Company believes 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 the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in the Company’s 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, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company’s inability to procure acquisition financing, default by one or more charterers of the Company’s ships, changes in demand for drybulk, oil or natural gas commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company’s voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company’s relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips 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