Scorpio Bulkers Inc. Announces Financial Results for the Fourth Quarter of 2017 and Declares a Quarterly Dividend

Monaco - Feb. 05, 2018

Scorpio Bulkers Inc. (NYSE:SALT) (“Scorpio Bulkers”, or the “Company”), today reported its results for the three months and year ended December 31, 2017.

The Company also announced today that its Board of Directors has declared a quarterly cash dividend of $0.02 per share on the Company’s common stock.

Results for the Three Months and Year Ended December 31, 2017 and 2016
For the three months ended December 31, 2017, the Company’s GAAP net loss was $1.1 million, or $0.01 loss per diluted share. For the same period in 2016, the Company’s GAAP net loss was $20.6 million, or $0.29 loss per diluted share. Total vessel revenues for the three months ended December 31, 2017 were of $51.1 million, compared to $26.8 million for the three months ended December 31, 2016. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the fourth quarter of 2017 and 2016 were $22.9 million and $1.0 million, respectively (see Non-GAAP Financial Measures below).

For the year ended December 31, 2017, the Company’s GAAP net loss was $59.7 million, or $0.83 loss per diluted share compared to a GAAP net loss of $124.8 million, or $2.22 loss per diluted share for the prior year. EBITDA for the years ended December 31, 2017 and 2016 were $35.3 million and a loss of $45.7 million, respectively (see Non-GAAP Financial Measures below).

For the year ended December 31, 2017, the Company’s adjusted net loss was $41.6 million, or $0.57 adjusted loss per diluted share, which excludes the impact of a write down of assets held for sale of $17.7 million and a write off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million. For the year ended December 31, 2016, the Company’s adjusted net loss was $99.9 million, or $1.78 adjusted loss per diluted share, which excludes a loss/write off of vessels and assets held for sale of $12.4 million, the write off of deferred financing costs on credit facilities that will no longer be used of $2.5 million and a charterhire contract termination fee of $10.0 million. Adjusted EBITDA for the years ended December 31, 2017 and 2016 were $53.5 million and a loss of $20.8 million, respectively (see Non-GAAP Financial Measures below).

TCE Revenue

TCE Revenue Earned during the Fourth Quarter of 2017

• Our Kamsarmax fleet earned $12,605 per day
• Our Ultramax fleet earned $10,886 per day

Voyages Fixed thus far for the First Quarter of 2018

• Kamsarmax fleet: approximately $13,300 per day for 74% of the days
• Ultramax fleet: approximately $9,800 per day for 63% of the days

Cash and Cash Equivalents

As of February 2, 2018, the Company had approximately $69.1 million in cash and cash equivalents.

Recent Significant Events

Vessel Acquisitions
The Company acquired nine Chinese built Ultramax dry bulk vessels in two separate transactions for a total consideration of $207.0 million, of which $186.7 million was paid in cash and $20.3 million was in the form of the Company’s common stock. Two of the vessels were built in 2014, four were built in 2015, one was built in 2016, and two were built in 2017. All nine vessels were delivered to the Company as of December 31, 2017.

The Company also entered into an agreement to purchase one Kamsarmax dry bulk vessel for $25.5 million, of which $18.8 million remains unpaid at December 31, 2017. The Kamsarmax vessel is a resale unit which is expected to be delivered from Jiangsu New Yangzijiang Shipbuilding Co Ltd in China in the second quarter of 2018.

Liquidity and Debt

Share Repurchase Program
The Company repurchased approximately 1.5 million shares of its common stock under the Board of Directors authorized stock repurchase program at a cost of approximately $11.0 million, or at an average cost of $7.51 per share, which was funded from available cash resources. As of February 2, 2018, approximately $39.0 million of the $50.0 million authorized remains available for the repurchase of the Company’s common stock in open market or privately negotiated transactions. The specific timing and amounts of any repurchases will be in the sole discretion of management and may vary based on market conditions and other factors and the Company is not obligated under the terms of the program to repurchase any of its common stock. The authorization has no expiration date.

Senior Notes Repurchase Program
In December 2016, the Company’s Board of Directors authorized the repurchase of up to $20.0 million of the Company's outstanding 7.5% Senior Notes due in 2019, or Senior Notes, in open market or privately negotiated transactions. The specific timing and amounts of the repurchases, which will be funded by available cash, will be in the sole discretion of management and vary based on market conditions and other factors. This authorization has no expiration date. As of February 2, 2018, the entire $20.0 million remains available.

Dividend
In the fourth quarter of 2017, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.02 per share totaling approximately $1.5 million.

Today, the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on or about March 15, 2018, to all shareholders of record as of February 15, 2018. As of February 2, 2018, 77,141,140 shares were outstanding.

$38.7 Million Credit Facility
On December 13, 2017, the Company entered into a senior secured credit facility for up to $38.7 million (the “$38.7 Million Credit Facility”), which was used to finance a portion of the purchase price of three Ultramax vessels acquired in the fourth quarter of 2017. The facility has a maturity date of December 13, 2022 and bears interest at LIBOR plus a margin of 2.85% per annum. This facility is secured by, among other things, a first preferred mortgage on the three Ultramax vessels and guaranteed by each vessel owning subsidiary. The entire $38.7 million available under the credit facility was drawn down, all of which remains currently outstanding.

$85.5 Million Credit Facility
On December 5, 2017, the Company entered into a senior secured credit facility for up to $85.5 million (the “$85.5 Million Credit Facility”), which was used to finance a portion of the purchase price of six Ultramax vessels acquired in the fourth quarter of 2017. The facility has a maturity date of February 15, 2023 and bears interest at LIBOR plus a margin of 2.85% per annum. This facility is secured by, among other things, a first preferred mortgage on the six Ultramax vessels and guaranteed by each vessel owning subsidiary. The entire $85.5 million available under the credit facility was drawn down, all of which remains currently outstanding.

$19.6 Million Lease Financing
On October 20, 2017, the Company entered into a financing transaction in respect of one of its Kamsarmax vessels with unaffiliated third parties involving the sale and leaseback of the SBI Rumba (the “$19.6 Million Lease Financing”), a 2015 Japanese built Kamsarmax vessel, for consideration of approximately $19.6 million. As part of the transaction, the Company will make monthly payments of $164,250 under a nine and a half year bareboat charter agreement with the buyers, that the Company could extend for a further six months. The cost of the financing is equivalent to an implied fixed interest rate of 4.23% for 10 years. The agreement also provides the Company with options to repurchase the vessel beginning on the fifth anniversary of the sale through the end of the agreement.

$409 Million Credit Facility
During the fourth quarter of 2017, the Company drew down the $79.0 million available to it under the revolving line of credit available under the $409 Million Credit Facility. As of February 2, 2018, the Company is fully drawn on this facility.

Full report

Scorpio Bulkers Inc. press release