Navigator Holdings Ltd. Announces Preliminary Results for the Three Months Ended March 31, 2017

LONDON, May 8, 2017 /PRNewswire/ --

Highlights  

- Navigator Holdings Ltd. reported net income of $2.7 million for the three months ended March 31, 2017 and earnings per share of $0.05, which included one-off costs totaling $4.2 million (or $0.07 per share) associated with the redemption of the Company's senior unsecured bonds that were due to mature in December 2017.

- Utilization increased to 92.4% for the three months ended March 31, 2017 compared to 87.6% for the three months ended March 31, 2016.

- Adjusted EBITDA^[1] was $33.5 million for the three months ended March 31, 2017.

- Took delivery of Navigator Nova the third of our four midsize semi-refrigerated ethane/ethylene capable vessels from Jiangnan, on January 12, 2017. Navigator Nova commenced on a time charter following delivery.

- Took delivery of Navigator Luga on January 24, 2017 and on April 5, 2017 Navigator Yauza, a sister ship, was delivered. These two handysize semi-refrigerated vessels from HMD immediately commenced on long term time charters.

- On February 10, 2017, the Company successfully issued 7.75% senior unsecured bonds in an aggregate principle amount of $100.0 million. The net proceeds of the issue together with the cash in hand were used to redeem in full $125.0 million of outstanding 9.0% senior unsecured bonds.

- The Company has benefited from increasing demand for the transportation of petrochemicals gases, with the proportion of our total revenue from long-haul trade increasing from 20% in the first quarter 2016 to approximately 52% in the first quarter 2017.

Charter revenue from the seaborne transportation of petrochemical gases continues to represent a significant percentage of our total revenue. For the first quarter of 2017, our revenue from the seaborne transportation of petrochemical gases represented approximately 52% of our total charter revenue. This reflects our migration towards a greater involvement in the olefins business, primarily through the seaborne transportation of ethylene, butadiene and propylene, which are used in the production process by the plastic industry. The ability to diversify into petrochemical olefins gases in addition to liquefied petroleum gases has improved our utilisation rate, which averaged approximately 92.4% for the first quarter of 2017. We continue to experience competition from the larger fully-refrigerated gas carriers, limiting much of the potential charter rate upside for the transportation of fully refrigerated LPG. We believe that the LPG freight environment must absorb a world orderbook of 38 Very Large Gas Carriers and 18 Medium Size Gas Carriers before we could begin to see any meaningful sustained rise in charter rates for the transportation of LPG.

^[1] EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. Adjusted EBITDA represents net income before net interest expense, income taxes, depreciation and amortization and other financing costs related to the redemption of debt. Management believes that EBITDA and Adjusted EBITDA are useful to investors in evaluating the operating performance of the Company. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to any financial measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. See the table below for a reconciliation of EBITDA and Adjusted EBITDA to net income, our most directly comparable financial measure calculated accordance with U.S. GAAP.

Reconciliation of Non-GAAP Financial Measures  

The following table sets forth a reconciliation of net income to EBITDA and adjusted EBITDA for the three months ended March 31, 2017:

$ '000's Net income $ 2,738 Interest expense 8,927 Interest income (113) Income taxes 159 Depreciation and amortization 17,634 EBITDA $ 29,345 Write off of call premium and redemption charges on 9% unsecured bond 3,517 Write off of deferred financing costs 653 Adjusted EBITDA $ 33,515

A Form 6-K with more detailed information on our first quarter 2017 financial results is being filed with the U.S. Securities and Exchange Commission simultaneous with this release for the quarter ended March 31, 2017.

Conference Call Details:  

Tomorrow, Tuesday, May 9, 2017, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111 (US Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Navigator" to the operator.

There will also be a live, and then archived, webcast of the conference call, available through the Company's website (http://www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A telephonic replay of the conference call will be available until Tuesday, May 16, 2017 by dialing 1(866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 11870348#

Navigator Gas  

Attention: Investor Relations Department  

New  York:    399 Park Avenue, 38th Floor, New York, NY 10022. Tel: +1 212 355 5893

London:    10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20 7340 4850

About Us  

Navigator Gas is the owner and operator of the world's largest fleet of handysize liquefied gas carriers and provides international and regional seaborne transportation of liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, including two newbuildings scheduled for delivery by July 2017.

FORWARD LOOKING STATEMENTS  

Statements included in this press release concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast, contain forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue," or the negative of these terms or other comparable terminology. These risks and uncertainties include, but are not limited to:

•    future operating or financial results;

•    pending acquisitions, business strategy and expected capital spending;

•    operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs;

•    fluctuations in currencies and interest rates;

•    general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;

•    our financial condition and liquidity, including our ability to refinance our indebtedness that matures in 2018 or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;

•    estimated future capital expenditures needed to preserve our capital base;

•    our expectations about the receipt of our two newbuildings and the timing of the receipt thereof;

•    our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;

•    our continued ability to enter into long-term, fixed-rate time charters with our customers;

•    changes in governmental rules and regulations or actions taken by regulatory authorities;

•    potential liability from future litigation;

•    our expectations relating to the payment of dividends;

•    our expectation that we will continue to provide in-house technical management for some vessels in our fleet and our success in providing such in-house technical management; and

•    other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.

We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.

 

Navigator Holdings Ltd. Consolidated Balance Sheets (Unaudited) December 31, March 31, 2016 2017 (in thousands except share data) Assets Current assets Cash and cash equivalents $ 57,272 $ 45,648 Accounts receivable, net 7,059 12,270 Accrued income 13,134 13,780 Prepaid expenses and other current assets 8,541 11,387 Inventories 6,937 7,283 Insurance recoverable 855 370 Total current assets 93,798 90,738 Non-current assets Vessels in operation, net 1,480,359 1,601,279 Vessels under construction 150,492 96,932 Property, plant and equipment, net 194 1,309 Total non-current assets 1,631,045 1,699,520 Total assets $ 1,724,843 $ 1,790,258 Liabilities and stockholders' equity Current liabilities Current portion of long-term debt, net of deferred financing costs $ 78,464 $ 215,526 Senior unsecured bond 25,000 - Accounts payable 6,388 5,618 Accrued expenses and other liabilities 11,377 12,395 Accrued interest 2,932 3,434 Deferred income 3,522 3,095 Total current liabilities 127,683 240,068 Non-current liabilities Secured term loan facilities, net of current portion and deferred financing costs 540,680 490,538 Senior unsecured bond 100,000 100,000 Total non-current liabilities 640,680 590,538 Total liabilities 768,363 830,606 Commitments and contingencies (see note 9) Stockholders' equity Common stock - $.01 par value; 400,000,000 shares authorized; 55,531,831 shares issued and outstanding, (2016: 55,436,087) 554 555 Additional paid-in capital 588,024 588,432 Accumulated other comprehensive loss (287) (262) Retained earnings 368,189 370,927 Total stockholders' equity 956,480 959,652 Total liabilities and stockholders' equity $ 1,724,843 $ 1,790,258 Navigator Holdings Ltd. Consolidated Statements of Income (Unaudited) Three months ended March 31, 2016 2017 (in thousands except share data) Revenues Operating revenue $ 76,375 $ 77,320 Expenses Brokerage commissions 1,502 1,525 Voyage expenses 7,093 15,000 Vessel operating expenses 22,405 23,905 Depreciation and amortization 14,575 17,634 General and administrative costs 2,957 2,752 Other corporate expenses 550 623 Total operating expenses 49,082 61,439 Operating income 27,293 15,881 Other income/(expense) Interest expense (7,783) (8,927) Write off of call premium and redemption charges on 9% unsecured bond - (3,517) Write off of deferred financing costs - (653) Interest income 78 113 Income before income taxes 19,588 2,897 Income taxes (194) (159) Net income $ 19,394 $ 2,738 Earnings per share: Basic: $ 0.35 $ 0.05 Diluted: $ 0.35 $ 0.05 Weighted average number of shares outstanding: Basic: 55,365,557 55,445,661 Diluted: 55,743,997 55,819,401 Navigator Holdings Ltd. Consolidated Statements of Cash Flows (Unaudited) Three Months Three Months ended ended March 31, March 31, 2016 2017 (in thousands) (in thousands) Cash flows from operating activities Net income $ 19,394 $ 2,738 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 14,575 17,634 (Payment) / credit of drydocking costs (2,030) 9 Insurance claim debtor (418) - Call option on redemption of 9.00% unsecured bond - 2,500 Amortization of share-based compensation 395 409 Amortization of deferred financing costs 732 1,345 Unrealized foreign exchange 17 17 Changes in operating assets and liabilities Accounts receivable (2,208) (5,211) Inventories (1,197) (346) Accrued income and prepaid expenses and other current assets (6,795) (3,492) Accounts payable, accrued interest and other liabilities (5,347) 323 Net cash provided by operating activities 17,118 15,926 Cash flows from investing activities Payment to acquire vessels (247) (636) Payment for vessels under construction (39,212) (84,597) Purchase of other property, plant and equipment (17) (1,160) Receipt of shipyard penalty payments 417 280 Insurance recoveries 4,700 486 Capitalized costs for the repairs of Navigator Aries (8,351) - Net cash used in investing activities (42,710) (85,627) Cash flows from financing activities Proceeds from secured term loan facilities 31,150 106,808 Issuance of 7.75% senior unsecured bonds - 100,000 Repayment of 9.00% senior unsecured bonds - (127,500) Issuance costs of 7.75% senior unsecured bonds - (1,798) Direct financing costs of senior term loan facilities (155) - Repayment of secured term loan facilities (16,051) (19,433) Net cash provided by financing activities 14,944 58,077 Net decrease in cash and cash equivalents (10,648) (11,624) Cash and cash equivalents at beginning of period 87,779 57,272 Cash and cash equivalents at end of period $ 77,131 $ 45,648 Supplemental Information Total interest paid during the period, net of amounts capitalized $ 5,527 $ 6,329 Total tax paid during the period $ 77 $ 82

SOURCE Navigator Gas