Monaco – May 18, 2017
Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three month period ended March 31, 2017.
Summary of First Quarter 2017 Results
• Net revenue for the first quarter of 2017 increased by 35% to $33.3 million from $24.7 million during the same period in 2016.
• Net loss for the first quarter of 2017 was $3.3 million as compared to $17.8 million, during the same period in 2016. Adjusted net loss (1) for the first quarter of 2017 was $3.4 million as compared to $14.4 million, during the same period in 2016.
• EBITDA (2) for the first quarter of 2017 increased to $15.4 million compared to $0.3 million during the same period in 2016. Adjusted EBITDA (3) for the first quarter of 2017 increased to $15.2 million from $3.8 million during the same period in 2016.
• Loss per share (4) and Adjusted loss per share (4) for the first quarter of 2017 were $0.07 and $0.07 respectively, calculated on a weighted average number of shares outstanding of 99,284,181, compared to a Loss per share of $0.25 and Adjusted loss per share of $0.21 during the same period in 2016, calculated on a weighted average number of shares outstanding of 83,542,291.
(1) Adjusted Net income/(loss) is a non-GAAP measure. Adjusted Net income/(loss) represents Net income/(loss) before loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency.
(2) EBITDA is a non-GAAP measure and represents Net income/(loss) plus net interest expense, tax, depreciation and amortization.
(3) Adjusted EBITDA is a non-GAAP measure and represents EBITDA before loss on sale of assets, gain/( loss) on derivatives and gain/(loss) on foreign currency.
(4) Earnings/(loss) per share and Adjusted Earnings/(loss) per share represent Net Income/(loss) and Adjusted Net income/(loss) less preferred dividend divided by the weighted average number of shares respectively.
Exchange Offer for Series B Preferred Shares
In April 2017, the Company concluded an exchange offer (the “Exchange Offer”) for any and all of its outstanding 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares, par value $0.01 per share, liquidation preference $25.00 per share (the “Series B Preferred Shares”). Pursuant to the Exchange Offer, the Company accepted for purchase the 1,106,254 Series B preferred Shares that were validly tendered and not withdrawn, representing74.46% of the Series B Preferred Shares outstanding prior to the completion of the Exchange Offer.
In the aggregate, the Exchange Offer resulted in a cash payment of $24.9 million and the issuance of 2,212,508 shares of common stock to holders of validly tendered and accepted Series B Preferred Shares. As of May 12, 2017, 379,514 Series B Preferred Shares, with an aggregate face value of $9.5 million, remain outstanding.
Fleet and Employment Profile
In January 2017, the Company took delivery of Pedhoulas Rose (Hull No. 1146), a 82,000 dwt, newbuild Kamsarmax class vessel. The delivery installment of $17.4 million was financed by a pre-agreed sale and leaseback arrangement of $24.8 million, which enhanced our liquidity. The lease period is 10 years, with a net daily bareboat charter rate of $6,500, with a purchase obligation for the Company at the end of the 10th year at a price of $14.5 million. The arrangement also includes purchase options in favor of the Company after the second year of the bareboat charter, at annual intervals and at predetermined purchase prices. The Company has determined that this sale and leaseback arrangement is a financing transaction, and therefore, the vessel’s cost was recorded under fixed assets and will be depreciated over the vessel’s useful life, and the sale proceeds were recorded as debt on the Company’s balance sheet.
In January 2017, the Company took delivery of Hull No. 1551, a 81,600 dwt, newbuild Kamsarmax class vessel which was subsequently sold to our Chief Executive Officer and Chairman of our Board of Directors, Polys Hajioannou, pursuant to a previously disclosed agreement which had been evaluated and approved by a Special Committee of the Company’s Board of Directors, which committee was wholly comprised of independent members of the Board and advised by independent counsel. The commission of 1% of the contract price payable to the related party management company with respect to the newbuild, was waived in the Company’s favor.
As of May 12, 2017, our operational fleet was comprised of 38 drybulk vessels with an average age of 6.9 years and an aggregate carrying capacity of 3.4 million dwt. Our fleet consists of 14 Panamax class vessels, nine Kamsarmax class vessels, 12 post- Panamax class vessels and three Capesize class vessels, all built 2003 onwards. Taking into account our last contracted drybulk newbuild Kamsarmax class vessel, scheduled for delivery in 2018, our fleet will be comprised of 39 vessels, 11 of which will be eco-design vessels, with an aggregate carrying capacity of 3.5 million dwt, assuming no additional vessel acquisitions or disposals.
Safe Bulkers, Inc. press release