Scorpio Bulkers Inc. Announces Financial Results for the First Quarter of 2019 and Declares a Quarterly Dividend

Monaco - April 29, 2019

Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the “Company”), today reported its results for the three months ended March 31, 2019.

The Company also announced that on April 26, 2019, its Board of Directors declared a quarterly cash dividend of $0.02 per share on the Company’s common shares.

Results for the Three Months Ended March 31, 2019 and 2018

For the first quarter of 2019, the Company’s GAAP net loss was $3.5 million, or $0.05 loss per diluted share, including:

• an approximately $15.0 million non-cash gain and cash dividend income of $0.5 million, or $0.23 earnings per diluted share, from the Company’s equity investment in Scorpio Tankers Inc.; and

• a write-down of assets held for sale of approximately $7.5 million, or $0.11 loss per diluted share, related to the sale of the SBI Electra and SBI Flamenco. For the same period in 2018, the Company’s GAAP net loss was $5.8 million, or $0.08 loss per diluted share.

Total vessel revenues for the first quarter of 2019 were $50.4 million, compared to $54.3 million for the same period in 2018. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarters of 2019 and 2018 were $25.3 million and $20.4 million, respectively (see Non-GAAP Financial Measures below).

For the first quarter of 2019, the Company’s adjusted net income was $4.0 million, or $0.06 adjusted earnings per diluted share, which excludes the impact of the write-down of assets held for sale of $7.5 million. Adjusted EBITDA for the first quarter of 2019 was $32.8 million. There were no such non-GAAP adjustments to net income in the first quarter of 2018 (see Non-GAAP Financial Measures below).

TCE Revenue

TCE Revenue Earned during the First Quarter of 2019

• Our Kamsarmax fleet earned $11,176 per day
• Our Ultramax fleet earned $9,177 per day

Voyages Fixed thus far for the Second Quarter of 2019

• Kamsarmax fleet: approximately $10,487 per day for 42% of the days
• Ultramax fleet: approximately $9,488 per day for 48% of the days

Cash and Cash Equivalents

As of April 26, 2019, the Company had approximately $57.9 million in cash and cash equivalents.

Recent Significant Events

Vessel Sales

In March 2019, the Company entered into agreements with unaffiliated third parties to sell the SBI Electra and SBI Flamenco, two 2015 Chinese built Kamsarmax vessels, for approximately $48.0 million in aggregate. Delivery of the vessels is expected to take place in the second quarter of 2019. As a result, the Company recorded a write down of approximately $7.5 million in the first quarter of 2019. The Company will also write off approximately $0.4 million of deferred finance costs in the second quarter of 2019 when paying off the existing debt.

Dividend
In the first quarter of 2019, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.02 per share totaling approximately $1.4 million.

On April 26, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on or about May 31, 2019, to all shareholders of record as of May 15, 2019. As of April 26, 2019, 71,217,258 shares were outstanding.

Debt

CMBFL Lease Financing
In March 2019, the Company agreed to sell and leaseback three Ultramax vessels (SBI Pegasus, SBI Subaru and SBI Ursa) and four Kamsarmax vessels (SBI Lambada, SBI Macarena, SBI Carioca and SBI Capoeira) from CMB Financial Leasing Co., Ltd. Upon completion, which is estimated to take place in the second quarter of 2019, the Company’s liquidity is expected to increase by up to $57.2 million in aggregate, comprising of up to $45.4 million upon closing after the repayment of outstanding debt and an additional tranche of up to $11.8 million for installation of exhaust gas cleaning systems (“scrubbers”) on the seven vessels. As part of the agreements, the Company will bareboat charter-in the vessels for a period of seven years. In addition, the Company has purchase options beginning after the end of the third year of each agreement. There is also a purchase option for each vessel upon the expiration of each agreement.

Upon the closing of this financing, approximately $74.8 million of existing debt is expected to be prepaid and approximately $1.3 million of deferred financing costs are expected to be written off on the $330.0 Million Credit Facility.

$21.4 Million Lease Financing - SBI Samba
On April 15, 2019, the Company closed a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Samba, a 2015 Japanese built Kamsarmax vessel, for consideration of $21.4 million. As part of the transaction, the Company has agreed to make payments of $6,850 per day under a five-year bareboat charter agreement with the buyer. The transaction also provides the Company with the option to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement.

$42.0 Million Credit Facility
During April 2019, the Company prepaid approximately $14.1 million of its $42.0 Million Credit Facility and wrote off approximately $0.8 million of deferred financing costs as the SBI Samba is now financed by the $21.4 Million Lease Financing - SBI Samba.

$45.0 Million Lease Financing - SBI Virgo and SBI Libra
In April 2019, the Company entered into a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Virgo and SBI Libra, two 2017 Chinese built Ultramax vessels, for consideration of $21.0 million each. Upon completion, which is estimated to take place in the second quarter of 2019, the Company’s liquidity is expected to increase by up to $17.0 million in aggregate, comprising of $14.0 million upon closing after the repayment of outstanding debt and an additional tranche of up to $3.0 million for the installation of scrubbers on both vessels. As part of the agreements, the Company has agreed to bareboat charter-in the vessels for a period of 11 years and will have purchase options beginning after the end of the fourth year of each agreement.

Upon the closing of this financing, approximately $27.6 million of existing debt is expected to be prepaid and approximately $0.4 million of deferred financing costs are expected to be written off on the $85.5 Million Credit Facility

AVIC Lease Financing
In April 2019, the Company agreed to sell and leaseback six Ultramax vessels (SBI Antares, SBI Bravo, SBI Hydra, SBI Leo, SBI Lyra and SBI Maia) to AVIC International Leasing Co., Ltd. Upon completion, which is estimated to take place in the second quarter of 2019, the Company’s liquidity is expected to increase by up to $62.4 million in aggregate, comprising of up to $52.6 million upon closing after the repayment of outstanding debt and an additional tranche of up to $9.8 million for the installation of scrubbers on the six vessels. As part of the agreements, the Company will bareboat charter-in the vessels for a period of eight years and will have purchase options beginning after the end of the second year of each agreement as well as upon the expiration of each agreement.

Upon the closing of this financing, approximately $61.9 million of existing debt is expected to be prepaid and approximately $0.7 million of deferred financing costs are expected to be written off on the $330.0 Million Credit Facility.

Scrubber Financings
In addition to the scrubber financing available under the CMBFL Lease Financing, the $45.0 Million Lease Financing - SBI Virgo and SBI Libra and the AVIC Lease Financing, the Company reached agreements with certain lenders to increase certain existing credit facilities by up to $46.0 million in the aggregate to finance the installation of scrubbers on certain of its vessels. The additional amounts will be drawn upon the installation of the scrubbers on the respective vessels, are structured as upsizings of existing credit facilities, and have loan margins matching the loan margins on the respective existing credit facilities.

These financing arrangements will be subject to conditions precedent and the execution of definitive documentation.

Scorpio Bulkers Inc. press release