Dryships Inc. reports financial and operating results for the third quarter of 2018
Athens, Greece - October 29, 2018
DryShips Inc. (NASDAQ: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 September 30, 2018.
Third Quarter 2018 Financial Highlights
• For the third quarter of 2018, the Company reported net income of $11.6 million, or $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 $5.1 million, or $0.05 earnings per share. Excluding the aforementioned gains and vessel impairments, the Company’s net results would have amounted to net income of $6.5 million, or $0.07 earnings per share.
• The Company reported Adjusted EBITDA of $17.2 million for the third quarter of 2018. (1)
Acquisition of Vessels
On October 29, 2018, the Company agreed to purchase four vessels from entities that may be deemed to be beneficially owned by the Company’s Chairman and Chief Executive Officer, Mr. George Economou, for an aggregate purchase price of $198.5 million. The vessels to be acquired are three Newcastlemax drybulk carriers, two of which 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 Mr. 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 Mr. 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.
On August 14, August 17 and August 20, 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 October 15, 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 $35.2 million loan balance was fully repaid along with its associated costs.
Common Stock Repurchase Program
On October 5, 2018, the Company completed in full its previously announced $50.0 million stock repurchase program (the “Repurchase Program”). Under the Repurchase Program, the Company has repurchased a total of 10,864,227 shares of its common stock for an aggregate amount of $50.5 million, including commissions. The current outstanding number of shares of the Company’s common stock is 93,410,481.
On October 29, 2018, the Company’s Board of Directors authorized a new stock repurchase program, under which the Company may repurchase up to $50 million of its outstanding common shares for a period of 12 months (the “New Repurchase Program”). DryShips may repurchase shares in privately negotiated or open-market 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 program 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 September 30, 2018. The New Repurchase Program may be suspended or discontinued at any time. The Company expects to finance the stock purchases with existing cash balances.
About DryShips Inc.
The Company is a diversified owner and operator of ocean going cargo vessels that operate worldwide. As of October 29, 2018, and not giving effect to any pending vessel transactions, the Company operates a fleet of 30 vessels comprising of (i) 6 Panamax drybulk vessels; (ii) 5 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 2 Aframax tankers; (vi) 2 Suezmax tanker; (vii) 3 Very Large Gas Carriers; and (viii) 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
DryShips Inc. press release