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Navigator Holdings Ltd. Preliminary Fourth Quarter and Financial Year 2016 Results

LONDON, Mar. 1, 2017 /PRNewswire/ --

Highlights

  •       Navigator Holdings Ltd. (NVGS) reports operating revenue of $75.5 million for the three months ended December 31, 2016. Operating revenue amounted to $294.1 million for the full year ended December 31, 2016.
  •       Net income was $7.6 million for the three months ended December 31, 2016. Net income was $44.6 million for the year ended December 31, 2016.
  •       Earnings per share was $0.14 for the three months ended December 31, 2016 and $0.81 for the full year ended December 31, 2016.
  •       EBITDA(1) was $33.8 million for the three months ended December 31, 2016 and $140.2 million for the year ended December 31, 2016.
  •       We took delivery of four newbuilding vessels during 2016, increasing our fleet to 33 vessels on the water as at December 31, 2016. In 2017 we have taken delivery of an additional two newbuildings, with the three remaining newbuildings expected to be delivered by July 2017.
  •       In October 2016, we entered into a new $220.0 million secured term loan and revolving credit facility, to refinance two loan facilities that were due to mature in April 2017, and to provide the finance for our final unfinanced newbuilding.
  •       In February 2017, two of our original ethylene carriers were placed on long-term time charters that will commence in either late 2017 or early 2018 with Braskem SA. These vessels will transport ethane from Enterprise Product Partners, Morgan's Point Terminal, in the Houston Ship Channel to the Braskem ethylene complex in Brazil.
  •       In February 2017, we successfully issued $100.0 million in new 7.75% senior unsecured bonds maturing in 2021 in the Norwegian bond market. The net proceeds and cash on hand were used to repay all of our outstanding $125.0 million aggregate principal amount of 9% senior unsecured bonds that were due to mature in December 2017.

Fourth Quarter 2016 Financial Results Overview

Operating revenue for the three months ended December 31, 2016 was $75.5 million, a decrease of $3.2 million, or 4.1%, compared to the $78.7 million of operating revenue for the three months ended December 31, 2015. This decrease was due to a softening of the LPG seaborne transportation market.

For the fourth quarter of 2016, the average time charter equivalent rate ("TCE") (2) across the entire fleet, including our fully-refrigerated vessels, was $692,213 per calendar month ($22,758 per day), compared to $921,069 per calendar month ($30,282 per day) for the comparable period in 2015.

Fleet utilization across the 33 vessels operating at the year end was 89.5% for the fourth quarter of 2016, up from 88.1% in the third quarter of 2016, but a reduction from 92.7% for the fourth quarter of 2015. This decrease from last year was primarily due to weaker demand for our vessels as a result of the softening of the LPG seaborne transportation market during the second half of 2016, leading to an increase in the number of idle days.

Operating revenue less voyage expenses amounted to $61.5 million for the three months ended December 31, 2016 compared to $72.3 million in the same three month period of 2015. This decrease was as a result of a reduction in TCE rates by $21.1 million, a reduction in utilization rates by $2.2 million, offset by a $12.5 increase due to additional vessels in our fleet during the three months ended December 31, 2016 compared to the three months ended December 31, 2015

Net income was $7.6 million for the three months ended December 31, 2016, or $0.14 per share compared to $23.8 million or $0.43 per share for the same period in 2015.

EBITDA(1) for the fourth quarter of 2016 was $33.8 million and $140.2 million for the full year ended December 31, 2016.

 

(1)      EBITDA is not a measure calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. EBITDA is a basis upon which we assess our financial performance. We believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness, and it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA does not represent and should not be considered as an alternative to consolidated net income or cash generated from operations, as determined by U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. See the table below for a reconciliation to the most directly comparable GAAP financial measure.

The following table sets forth a reconciliation of EBITDA to net income, the most directly comparable measure calculated in accordance with GAAP, for the periods presented:

 







Three months ended
December 31,
(in thousands)

 

Year ended
December 31,
(in thousands)

 


2015

 

2016

 

2015

 

2016

 






Net income.................................................................................................................................................................................................................................

$      23,821

$        7,646

$        98,094

$        44,638

Net interest expense................................................................................................................................................................................................................................

7,103

8,940

29,730

32,142

Income taxes.....................................................................................................................................................................................................................................

190

575

800

1,177

Depreciation and amortization.......................................................................................................................................................................................................................

14,515

16,625

53,453

62,280






EBITDA...................................................................................................................................................................................................................................

$      45,629

$      33,786

$      182,077

$      140,237






(2)      TCE rate is a non-GAAP financial measure. TCE rate is a measure of the average daily revenue performance of a vessel. TCE rate is a 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., time charters, voyage charters and contracts of affreightment, or "COAs") under which the vessels may be employed between the periods. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters we pay all voyage expenses. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with operating revenues less voyage expenses, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our method of calculating TCE rate is to divide operating revenue (net of voyage expenses) by operating days for the relevant time period. See the table below for a reconciliation to the most directly comparable GAAP financial measure.

The following table represents a reconciliation of TCE rate to operating revenue, the most directly comparable financial measure calculated in accordance with GAAP, for the periods presented:

 





Three months ended
December 31, 2015

 

Three months ended
December 31, 2016

 

Fleet Data:



Operating revenue..........................................................

$                       78,670

$                       75,455

Voyage expenses...........................................................

6,325

13,914




Operating revenue less Voyage expenses..................

72,345

61,541

Operating days...............................................................

2,389

2,704

Average daily time charter equivalent rate...............

$                       30,282

$                       22,758

 

Conference Call Details:

Tomorrow, Thursday, March 2, 2017, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111
(US Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Navigator" to the operator.

A telephonic replay of the conference call will be available until Thursday, March 9, 2017 by dialing 1(866) 247-4222
(US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 11870348#

Audio Webcast:

There will also be a live, and then archived, webcast of the conference call, available through the Company's website (www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Navigator Gas

Attention: Investor Relations Department



New York:

399 Park Avenue, 38th Floor, New York, NY 10022. Tel: +1 212 355 5893

London:

21 Palmer Street, London, SW1H 0AD.    Tel: +44 (0)20 7340 4850

About Us

Navigator Gas is the owner and operator of the world's largest fleet of handysize liquefied gas carriers and provides international and regional seaborne transportation of liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, including three newbuildings scheduled for delivery by July 2017.

FORWARD LOOKING STATEMENTS

Statements included in this press release concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast, contain forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue," or the negative of these terms or other comparable terminology. These risks and uncertainties include, but are not limited to:

•      future operating or financial results;

•      pending acquisitions, business strategy and expected capital spending;

•      operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs;

•      general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;

•      our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;

•      estimated future capital expenditures needed to preserve our capital base;

•      our expectations about the receipt of our three newbuildings and the timing of the receipt thereof;

•      our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;

•      our continued ability to enter into long-term, fixed-rate time charters with our customers;

•      changes in governmental rules and regulations or actions taken by regulatory authorities;

•      our expectation that in 2017 we will continue to provide in-house technical management for more of the vessels in our fleet;

•      potential liability from future litigation;

•      our expectations relating to the payment of dividends; and

•      other factors discussed in other periodic filings with the U.S. Securities and Exchange Commission.

We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.

 




Navigator Holdings Ltd.


Consolidated Balance Sheets

(Unaudited)




December 31,
2015

 

December 31,
2016

 


(in thousands except share data)

Assets






Current assets



Cash and cash equivalents......................................................................................................................................................................................................................

$          87,779

$          57,272

Accounts receivable, net.....................................................................................................................................................................................................................................

9,050

7,059

Accrued income.............................................................................................................................................................................................................................

5,647

13,134

Prepaid expenses and other current assets................................................................................................................................................................................................................................

8,754

8,541

Inventories............................................................................................................................................................................................................................

3,480

6,937

Insurance recoverable......................................................................................................................................................................................................................

10,289

855




Total current assets................................................................................................................................................................................................................................

124,999

93,798




Non-current assets



Vessels in operation, net.....................................................................................................................................................................................................................................

1,264,451

1,480,359

Vessels under construction....................................................................................................................................................................................................................

170,776

150,492

Property, plant and equipment, net.....................................................................................................................................................................................................................................

279

194




Total non-current assets................................................................................................................................................................................................................................

1,435,506

1,631,045




Total assets................................................................................................................................................................................................................................

$    1,560,505

$    1,724,843







Liabilities and stockholders' equity



Current liabilities



Current portion of long-term debt, net of deferred financing costs..................................................................................................................................................................................................................................

$          59,024

$          78,464

Senior unsecured bond.................................................................................................................................................................................................................................

25,000

Accounts payable............................................................................................................................................................................................................................

11,471

6,388

Accrued expenses and other liabilities...........................................................................................................................................................................................................................

9,065

11,377

Accrued interest..............................................................................................................................................................................................................................

3,117

2,932

Deferred income.............................................................................................................................................................................................................................

6,606

3,522




Total current liabilities.........................................................................................................................................................................................................................

89,283

127,683







Non-current liabilities



Secured term loan facilities, net of current portion and deferred financing costs..................................................................................................................................................................................................................................

436,131

540,680

Senior unsecured bond.................................................................................................................................................................................................................................

125,000

100,000




Total non-current liabilities...........................................................................................................................................................................................................................

561,131

640,680




Total liabilities.........................................................................................................................................................................................................................

650,414

768,363




Commitments and contingencies






Stockholders' equity



Common stock – $.01 par value; 400,000,000 shares authorized; 55,436,087 shares issued and outstanding, (2015: 55,363,467)

554

554

Additional paid-in capital..............................................................................................................................................................................................................................

586,451

588,024

Accumulated other comprehensive loss....................................................................................................................................................................................................................................

(465 )

(287 )

Retained earnings............................................................................................................................................................................................................................

323,551

368,189




Total stockholders' equity...............................................................................................................................................................................................................................

910,091

956,480




Total liabilities and stockholders' equity...............................................................................................................................................................................................................................

$    1,560,505

$    1,724,843




 

 

 






Navigator Holdings Ltd.


Consolidated Statements of Income

(Unaudited)



Three months ended
December 31,

(in thousands except share and per
share data)

Year ended

December 31,

(in thousands except share and per
share data)


2015

 

2016

 

2015

 

2016

 

Revenues





Operating revenue.....................................................................................................................................................................................................................................

$            78,670

$            75,455

$         315,223

$         294,112











Expenses





Brokerage commissions............................................................................................................................................................................................................................

1,804

1,430

6,995

5,812

Voyage expenses...................................................................................................................................................................................................................................

6,325

13,914

33,687

42,201

Vessel operating expenses...................................................................................................................................................................................................................................

21,150

22,611

78,842

90,854

Depreciation and amortization............................................................................................................................................................................................................................

14,515

16,625

53,453

62,280

General and administrative costs...........................................................................................................................................................................................................................................

2,915

3,348

11,011

12,528

Other corporate expenses...................................................................................................................................................................................................................................

239

366

2,553

1,976

Profit from sale of vessel.........................................................................................................................................................................................................................................

(550 )

Vessel write down following collision.....................................................................................................................................................................................................................................

10,500

Insurance recoverable from vessel repairs........................................................................................................................................................................................................................................

608

(9,892 )

504






Total operating expenses...................................................................................................................................................................................................................................

47,556

58,294

186,599

216,155











Operating income......................................................................................................................................................................................................................................

31,114

17,161

128,624

77,957






Other income/(expense)





Interest expense.....................................................................................................................................................................................................................................

(7,166 )

(8,879 )

(28,085 )

(32,321 )

Write off deferred finance costs...........................................................................................................................................................................................................................................

(102 )

(1,797 )

(102 )

Interest income......................................................................................................................................................................................................................................

63

41

152

281






Income before income taxes..........................................................................................................................................................................................................................................

24,011

8,221

98,894

45,815

Income taxes..........................................................................................................................................................................................................................................

(190 )

(575 )

(800 )

(1,177 )






Net income......................................................................................................................................................................................................................................

$            23,821

$              7,646

$            98,094

$            44,638











Earnings per share:





Basic:..............................................................................................................................................................................................................................................

$                0.43

$                0.14

$                1.77

$                0.81

Diluted:...........................................................................................................................................................................................................................................

$                0.43

$                0.14

$                1.76

$                0.80











Weighted average number of shares outstanding:





Basic:..............................................................................................................................................................................................................................................

55,363,467

55,436,087

55,360,004

55,418,626

Diluted:...........................................................................................................................................................................................................................................

55,741,907

55,810,365

55,706,104

55,794,481






 

 

 






Navigator Holdings Ltd.


Consolidated Statements of Comprehensive Income

(Unaudited)





Three months ended
December 31,
(in thousands)

Year ended
December 31,
(in thousands)


2015

 

2016

 

2015

 

2016

 






Net income.............................................................................................................................................................................................................................

$    23,821

$    7,646

$    98,094

$    44,638

Other Comprehensive Income/(Loss):





Foreign currency translation (loss)/gain........................................................................................................................................................................................................................

(135 )

114

(211 )

178






Total Comprehensive Income............................................................................................................................................................................................................................

23,686

7,760

97,883

44,816

 

 

 








Consolidated Statements of Stockholders' Equity

(Unaudited)



(in thousands except share data)


Number of

shares

Common
Stock at 0.01
par value

 

Additional
Paid-in
Capital

 

Accumulated
Other
Comprehensive
Income / (Loss)

 

Retained
Earnings

 

Total

 








January 1, 2015..........................................

55,346,613

$             553

$    584,808

$                (254 )

$    225,457

$    810,564








Restricted shares issued March 17, 2015.

16,854

1

1

Net income....................................................

98,094

98,094

Foreign currency translation.......................

(211 )

(211 )

Share-based compensation plan...............

1,643

1,643








December 31, 2015.....................................

55,363,467

$             554

$    586,451

$                (465 )

$    323,551

$    910,091








Restricted shares issued March 29, 2016

72,620

Net income....................................................

44,638

44,638

Foreign currency translation.......................

178

178

Share-based compensation plan...............

1,573

1,573















December 31, 2016.....................................

55,436,087

$             554

$    588,024

$                (287 )

$    368,189

$    956,480








 

 

 




Navigator Holdings Ltd.


Consolidated Statements of Cash Flows

(Unaudited)



Year ended
December 31,
2015

 

Year ended
December 31,
2016

 


(in thousands)

(in thousands)




Cash flows from operating activities



Net income.............................................................................................................................................................................................................................

$         98,094

$         44,638




Adjustments to reconcile net income to net cash provided by operating activities



Depreciation and amortization...................................................................................................................................................................................................................

53,453

62,280

Payment of drydocking costs..................................................................................................................................................................................................................................

(11,558 )

(9,902 )

Share-based compensation.................................................................................................................................................................................................................

1,643

1,573

Amortization of deferred financing costs..................................................................................................................................................................................................................................

4,806

3,091

Profit from sale of vessel................................................................................................................................................................................................................................

(550 )

Vessel write down following collision............................................................................................................................................................................................................................

10,500

Insurance recoverable from vessel repairs...............................................................................................................................................................................................................................

(10,289 )

60

Unrealized foreign exchange.........................................................................................................................................................................................................................

(205 )

208

Changes in operating assets and liabilities



Accounts receivable........................................................................................................................................................................................................................

(1,855 )

1,991

Inventories............................................................................................................................................................................................................................

1,331

(3,457 )

Prepaid expenses and other current assets................................................................................................................................................................................................................................

(4,408 )

(7,694 )

Accounts payable and other liabilities...........................................................................................................................................................................................................................

8,394

(6,040 )

Long-term accounts receivable........................................................................................................................................................................................................................

198




Net cash provided by operating activities..........................................................................................................................................................................................................................

149,554

86,748







Cash flows from investing activities



Payment to acquire vessels..............................................................................................................................................................................................................................

(3,348 )

(1,733 )

Payment for vessels under construction....................................................................................................................................................................................................................

(236,648 )

(239,179 )

Purchase of other property, plant and equipment.......................................................................................................................................................................................................................

(142 )

(75 )

Receipt of shipyard penalty payments.........................................................................................................................................................................................................................

1,933

1,901

Insurance recoveries.........................................................................................................................................................................................................................

391

9,374

Capitalized costs for the repair of Navigator Aries..................................................................................................................................................................................................................................

(8,441 )

Proceeds from sale of vessel net of costs..................................................................................................................................................................................................................................

31,958




Net cash used in investing activities..........................................................................................................................................................................................................................

(205,856 )

(238,153 )




Cash flows from financing activities



Proceeds from secured term loan facilities and revolving credit facilities............................................................................................................................................................................................................................

157,700

327,670

Direct financing costs of secured term loan facilities............................................................................................................................................................................................................................

(5,879 )

(2,680 )

Repayment of secured term loan facilities and revolving credit facilities............................................................................................................................................................................................................................

(70,266 )

(204,092 )




Net cash / provided by financing activities..........................................................................................................................................................................................................................

81,555

120,898




Net increase / (decrease) in cash and cash equivalents.....................................................................................................................................................................................................................

25,253

(30,507 )




Cash and cash equivalents at beginning of period..............................................................................................................................................................................................................................

62,526

87,779




Cash and cash equivalents at end of period..............................................................................................................................................................................................................................

$         87,779

$         57,272







Supplemental Information



Total interest paid during the year, net of amounts capitalized.......................................................................................................................................................................................................................

$         24,427

$         29,815




Total tax paid during the period...............................................................................................................................................................................................................................

$               632

$               601




 

 

 

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