DryShips shares 3Q18 results

For the third quarter of 2018, the company reported net income of US$11.6 million, or US$0.12 basic and diluted earnings per share. Included in the third quarter of 2018 results are gains from the sale of vessels to unaffiliated buyers and vessel impairments totaling US$5.1 million, or US$0.05 earnings per share. Excluding the aforementioned gains and vessel impairments, the company’s net results would have amounted to net income of US$6.5 million, or US$0.07 earnings per share. - The company reported Adjusted EBITDA of US$17.2 million for 3Q18.

Acquisition of vessels

On 29 October 2018, the company agreed to purchase four vessels from entities that may be deemed to be beneficially owned by the company’s Chairman and CEO, George Economou, for an aggregate purchase price of US$198.5 million.

The vessels to be acquired are three newcastlemax dry bulk carriers, two of which were built in 2016 and one built in 2017 and one coated aframax tanker built in 2010. The purchase includes existing financing in place and will be effected by way of stock purchase agreements and/or long-term bareboat charter parties with purchase obligations.

 

All vessels are expected to be delivered to DryShips before the end of 2018 and in connection with the transaction, entities that may be deemed to be beneficially owned by George Economou, have also agreed to time charter the three newcastlemaxes on index-linked time charters of flexible durations, with optionality for DryShips to convert these index-linked time charters to fixed rate charters. TMS Dry Ltd. and TMS Tankers Ltd., entities that may be deemed to be beneficially owned by George Economou, have agreed to forgo all commissions effective under the various respective management agreements in connection with the aforementioned vessel purchases.

The vessel purchases were approved by the independent directors of the company’s board of directors, based on the fair market value of each vessel as determined by independent third party broker valuations.

Adjusted EBITDA is a non-US GAAP measure.

Vessel Deliveries

On 14 August, 17 August and 20 August 2018, the company’s panamax vessels Bargara, Capitola and Mendocino, were each delivered to their respective new owners according to the terms of the previously announced Memoranda of Agreement. On 15 October 2018, the VLGC Mont Gelé, in accordance to the terms of the previously announced Memorandum of Agreement, was delivered to its new owners and the vessel’s then outstanding US$35.2 million loan balance was fully repaid along with its associated costs.

Common stock repurchase programme

On 5 October 2018, the company completed in full its previously announced US$50.0 million stock repurchase programme. Under the repurchase programme, the company has repurchased a total of 10 864 227 shares of its common stock for an aggregate amount of US$50.5 million, including commissions. The current outstanding number of shares of the company’s common stock is 93 410 481. On 29 October 2018, the company’s Board of Directors authorised a new stock repurchase programme, under which the company may repurchase up to US$50 million of its outstanding common shares for a period of 12 months.

DryShips may repurchase shares in privately negotiated or openmarket purchases in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The specific timing and amount of repurchases, if any, will be at the discretion of the company’s management and will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations. The company is not obligated under the programme to purchase any shares. Due to applicable securities laws, the company’s repurchase of shares will not begin at the earliest until the second business day after the release of the company’s financial statements for the third quarter ending 30 September 2018.

The new repurchase programme may be suspended or discontinued at any time. The company expects to finance the stock purchases with existing cash balances.

Read the article online at: https://www.drybulkmagazine.com/shipping/01112018/dryships-shares-3q18-results/