Ardmore Shipping Corporation Announces Financial Results for First Quarter 2014 Business Wire HAMILTON, Bermuda -- May 13, 2014 Ardmore Shipping Corporation (NYSE:ASC) (“Ardmore” or the “Company”) today announced results for the three months ended March 31, 2014. Highlights *Reported EBITDA (see Non-GAAP Measures section below) of $4.0 million for the three months ended March 31, 2014, an increase of $1.4 million from $2.6 million for the three months ended March 31, 2013. The Company reported a net loss of $0.40 million for the three months ended March31, 2014, or $0.021 basic and diluted net loss per share, as compared to a net loss of $0.04 million, or $0.005 basic and diluted net loss per share, for the three months ended March 31, 2013. *Reported adjusted EBITDA (see Non-GAAP Measures section below) of $4.3 million for the three months ended March 31, 2014, an increase of $1.7 million from $2.6 million for the three months ended March 31, 2013. The Company reported an adjusted net loss (see Non-GAAP Measures section below) of $0.06 million for the three months ended March31, 2014, or $0.003 basic and diluted adjusted loss per share (see Non-GAAP Measures section below), as compared to an adjusted net loss of $0.04 million, or $0.005 basic and diluted adjusted loss per share, for the three months ended March 31, 2013. *Successful completion of a follow-on equity offering raising gross proceeds of $108.7 million including over-allotment option exercised by underwriters on March 17, 2014. *Closed a senior debt facility on March 19, 2014 with ABN AMRO Bank N.V., Nordea Bank Finland Plc and Skandinaviska Enskilda Banken AB in the amount of $172 million to finance eight of our vessels currently on order. *Declared a cash dividend of $0.10 per share for the quarter ended March31, 2014. *Took delivery of two MR product and chemical newbuildings in the first quarter 2014. TheArdmore Seavantage and Ardmore Seavanguard are the third and fourth of Ardmore’s eco-design vessels, which delivered from SPP Shipbuilding Co., Ltd. inSouth Korea in January and February, respectively. *Took delivery of the Ardmore Seamariner, a 45,726 Dwt MR product tanker built in October 2006 at Minami Nippon Shipbuilding Co., Ltd., Japan, on January 7, 2014. Following delivery the vessel underwent a scheduled drydock and upgrading to Eco-mod and, on completion, commenced a time charter at $16,050 per day. *Completed a series of upgrades on the Ardmore Centurion which, following completion, commenced a time charter with an oil major trading in product and chemicals at $13,500 per day. *Commenced a one-year time charter for the Ardmore Seavaliant at a rate of $17,100 per day starting in February 2014. Anthony Gurnee, the Company’s Chief Executive Officer, commented: “We are pleased with the Company’s first quarter 2014 results, which reflect improvement in our chartering performance as well as continued fleet expansion. We took delivery of two newbuildings and one second-hand vessel during the quarter, so that now 52% of our fleet is on the water generating cash flow. Complementing our fleet growth during the quarter, we increased our financial flexibility significantly by raising $108.7 million from an upsized follow-on equity offering to fund vessel acquisitions, as well as closing on a $172 million senior debt facility to fund our existing newbuilding program. We believe Ardmore is well positioned to benefit from favorable long-term fundamentals for product and chemical tankers by continuing to engage in well-timed fleet growth.” Summary of Recent and First Quarter Events Fleet Operations On January7, 2014, Ardmore took delivery of the 2006-builtArdmore Seamariner, a 45,726 Dwt MR product tanker built at Minami-Nippon Shipbuilding Co., Ltd. inJapan, which was acquired by the Company in October 2013. On delivery, the vessel entered drydock, where it was upgraded to Eco-mod in conjunction with its scheduled intermediate survey.On completion of drydock, the vessel commenced employment on a three-month time charter at a rate of$16,050per day. We also took delivery of the Ardmore Seavantage and Ardmore Seavanguard on January 17, 2014 and February 14, 2014, respectively. These vessels are 49,997 Dwt IMO 3 Eco-design MR product and chemical tankers built at SPP Shipbuilding Co., Ltd.in South Korea.Following delivery, both vessels commenced employment under existing charter arrangements with a major oil trader. On January30, 2014, Ardmore completed upgrades to the Ardmore Centurion. The upgrades further improve fuel efficiency, allow carriage of a broader range of cargos and reduce cleaning time, which will enhance the vessel’s earnings potential. As a result of the above deliveries, Ardmore’s fleet currently stands at 11 ships in operation and 10 Eco-design product and chemical tankers on order, with our next vessel on order scheduled to deliver in November 2014. Financing On March 11, 2014, Ardmore closed an equity offering of 7,000,000 shares at $13.50 per share, an upsized offering from the initially launched offering of 6,000,000 shares on March 3, 2014. Our underwriters subsequently exercised an over-allotment option for an additional 1,050,000 shares, also at $13.50 per share, on March 17, 2014. Total gross proceeds to Ardmore amounted to $108.7 million. On March19, 2014, Ardmore closed a senior debt facility with ABN AMRO Bank N.V., Nordea Bank Finland Plc and Skandinaviska Enskilda Banken AB (“SEB”) in the amount of $172 million. The proceeds will be used to finance up to 65% of the purchase price of eight vessels that Ardmore currently has on order. The margin is 3.15% above LIBOR and the terms include an accordion option whereby, subject to lenders approval, Ardmore may request to increase the facility to finance the acquisition of additional vessels. Dividend On April15, 2014, Ardmore’s Board of Directors announced a cash dividend of $0.10 per share for the quarter ended March 31, 2014. The cash dividend is payable on May15, 2014 to all shareholders of record on April 30, 2014. Ardmore currently intends to pay our shareholders quarterly dividends of $0.10 per share, or $0.40 per share per year. Results for the three months ended March 31, 2014 and 2013 For the three months ended March31, 2014, the Company reported EBITDA (see Non-GAAP Measures section below) of $4.0 million, an increase of $1.4 million from $2.6 million for the three months ended March31, 2013. The Company reported a net loss of $0.40 million, or $0.021 basic and diluted loss per share, for the three months ended March31, 2014, as compared to a net loss of $0.04 million, or $0.005 basic and diluted loss per share, for the three months ended March31, 2013. For the three months ended March31, 2014, the Company reported adjusted EBITDA (see Non-GAAP Measures section below) of $4.3 million, an increase of $1.7 million from $2.6 million for the three months ended March31, 2013. Adjusted net loss (see Non-GAAP Measures section below) was $0.06 million, or $0.003 basic and diluted adjusted loss per share (see Non-GAAP Measures section below), for the three months ended March31, 2014 as compared to an adjusted net loss of $0.04 million, or $0.005 basic and diluted adjusted loss per share for the three months ended March31, 2013. EBITDA and net loss were adjusted for share based compensation (non-cash item) in each period, as applicable. Management’s Discussion and Analysis of Financial Results Revenue for the three months ended March31, 2014 was $12.4 million, an increase of $5.1 million from $7.3 million for the three months ended March31, 2013. Time charter revenue was $10.1 million for the three months ended March 31, 2014, an increase of $4.9 million from $5.2 million for the three months ended March 31, 2013. The increase primarily relates to additional revenue attributable to the Ardmore Seaventure, Ardmore Seavantage, Ardmore Seamariner and Ardmore Seavanguard, which commenced trading on June7, 2013, January 18, 2014, February 1, 2014 and February 17, 2014, respectively, along with increases in rates for time charter renewals since the three months ended March31, 2013. Pool revenue was $2.3 million for the three months ended March 31, 2014, an increase of $0.2 million from $2.1 million for the three months ended March 31, 2013. This increase is due to increased rates earned by the pool. Commissions and voyage related costs were $0.25 million for the three months ended March31, 2014, as compared to $0.18 million for the three months ended March31, 2013. This increase is due to increases in revenue days in-line with vessel deliveries outlined above. Vessel operating expenses were $5.9 million for the three months ended March31, 2014, an increase of $2.0 million from $3.9 million for the three months ended March31, 2013. This increase is primarily due to an increase in the number of vessels in operation for the three months ended March31, 2014 in addition to the timing of operating expenses between quarters. Fleet operating costs per day, including technical management fees, were $6,520 for the three months ended March 31, 2014 as compared to $6,502 for the three months ended March 31, 2013. Depreciation expense for the three months ended March31, 2014 was $3.0 million, an increase of $1.3 million from $1.7 million for the three months ended March31, 2013. The increase is due to an increase in the average number of owned vessels to 9.9 for the three months ended March 31, 2014 from 6.4 for the three months ended March31, 2013. Amortization of deferred dry dock expenditure for the three months ended March31, 2014 was $0.4 million, as compared with $0.3 million for the three months ended March31, 2013. The capitalized costs of drydocking are depreciated on a straight line basis to the next scheduled drydocking. As such, movement in amortization of deferred drydock expenditure is in-line with timing of vessels undergoing drydock. General and administrative expenses for the three months ended March31, 2014 were $2.3 million, as compared to $0.7 million for the three months ended March31, 2013. The increase is primarily due to costs associated with being a publicly listed company along with one-off overhead costs incurred with our most recent equity offering in March 2014. Interest expense and finance costs, which include loan interest, capital lease interest and amortization of deferred financing fees, were$0.9 millionfor the three months ended 31 March, 2014, an increase of$0.4 millionfrom$0.5 millionfor the three months ended March31, 2013. The increase relates to an increase in average debt balance following the delivery of vessels since March 31, 2013, additional interest costs associated with the capital lease facility for theArdmore CalypsoandArdmore Capellaentered into in April 2013, and an increase in deferred financing fees amortization due to new debt drawdowns and financing arrangements. These increases were offset by an increase in the amount of capitalized interest in line with deposits paid for Ardmore’s current vessels on order. Capitalized interest amounted to $0.9 million for the three months ended March 31, 2014, an increase of$0.7 millionfrom$0.2 millionfor the three months ended March31, 2013. Liquidity As of March31, 2014, the Company had $128.1 million (December 31, 2013: $56.9 million) available in cash and cash equivalents. The following debt and capital lease liabilities were outstanding as of: As of Mar 31, 2014 Dec 31, 2013 Debt 131,585,000 88,860,000 Capital Leases 30,008,544 30,379,015 Total 161,593,544 119,239,015 Conference Call The Company plans to have a conference call on Tuesday, May 13, 2014 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended March 31, 2014. All interested parties are invited to listen to the live conference call and slide presentation by choosing from the following options: 1.By dialing 888-510-1765 (U.S.) or 719-325-2361 (International) and entering the conference participant passcode 9150205. 2.By accessing the live webcast at Ardmore Shipping’s website at www.ardmoreshipping.com. Participants should dial into the call 10 minutes before the scheduled time. If you are unable to participate at this time, a replay of the call will be available for two weeks at 888-203-1112 or 719-457-0820. Enter the passcode 9150205 to access the audio replay. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information. About Ardmore Shipping Corporation Ardmore Shipping owns and operates a fleet of mid-size product and chemical tankers ranging from 17,500 Dwt to 50,300 Dwt. We provide seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies, with our modern, fuel-efficient fleet of tankers. Ardmore’s core strategy is to develop a modern, high-quality fleet of product and chemical tankers, build key long-term commercial relationships, maintain our cost advantage in assets, operations and overhead, while creating significant synergies and economies of scale as the Company grows. We provide our services to customers through voyage charters, commercial pools and time charters and enjoy close working relationships with key commercial and technical management partners. We view the continued development of these relationships as crucial to our long-term success. Ardmore Shipping Corporation Unaudited Condensed Interim Consolidated Balance Sheet (Expressed in U.S. dollars, unless otherwise stated) As at ASSETS Mar 31, 2014 Dec 31, 2013 Current assets Cash and cash equivalents 128,117,346 56,860,845 Receivables, trade 535,822 743,406 Working capital advances 516,937 534,571 Prepayments 593,148 471,563 Advances and deposits 1,316,909 1,894,317 Other receivables 454,277 321,810 Inventories 1,161,805 1,131,466 Total current assets 132,696,244 61,957,978 Non-current assets Vessels and vessel equipment, net 298,783,941 201,700,229 Deferred dry dock expenditure, net 2,219,550 1,339,238 Vessels under construction 67,113,541 89,015,139 Other non-current assets, net 170,660 158,308 Deferred finance charges, net 5,887,026 3,794,741 Total non-current assets 374,174,718 296,007,655 TOTAL ASSETS 506,870,962 357,965,633 LIABILITIES AND EQUITY Current liabilities Payables, trade 9,267,319 3,999,311 Charter revenue received in advance 2,208,877 1,806,600 Other payables 17,985 5,436 Accrued interest on loans 730,338 557,160 Current portion of long-term debt 11,916,000 9,100,000 Current portion of capital lease 1,608,882 1,578,686 obligations Total current liabilities 25,749,401 17,047,193 Non-current liabilities Non-current portion of long-term debt 119,669,000 79,760,000 Non-current portion of capital lease 28,399,662 28,800,329 obligations Total non-current liabilities 148,068,662 108,560,329 Equity Share capital 261,000 180,500 Additional paid in capital 345,730,317 244,702,577 Accumulated deficit (12,938,418) (12,524,966) Total equity 333,052,899 232,358,111 TOTAL LIABILITIES AND EQUITY 506,870,962 357,965,633 Ardmore Shipping Corporation Unaudited Condensed Statement of Operations (Expressed in U.S. dollars, unless otherwise stated) Three months ended Mar 31, 2014 Mar 31, 2013 REVENUE Revenue 12,386,264 7,275,085 OPERATING EXPENSES Commissions and voyage related costs 246,599 175,736 Vessel operating expenses 5,899,991 3,876,809 Depreciation 3,021,762 1,704,017 Amortization of deferred dry dock 441,585 348,896 expenditure General and administrative expenses 2,289,266 662,016 Total operating expenses 11,899,203 6,767,474 Profit from operations 487,061 507,611 Interest expense and finance costs (889,986) (542,536) Interest income 2,022 881 Loss before taxes (400,903) (34,044) Income tax (12,549) (6,648) Net loss (413,452) (40,692) Loss per share, basic and diluted (0.021) (0.005) Weighted average number of shares, basic 19,858,333 8,050,000 and diluted Ardmore Shipping Corporation Unaudited Condensed Interim Statement of Cash Flows (Expressed in U.S. dollars, unless otherwise stated) Three months ended Mar 31, 2014 Mar 31, 2013 OPERATING ACTIVITIES Net loss (413,452) (40,692) Non-cash items: Depreciation 3,021,762 1,704,017 Amortization of deferred dry dock 441,585 348,896 expenditure Share based compensation 353,855 - Amortization of deferred finance charges 201,451 90,356 Changes in operating assets and liabilities: Receivables, trade 207,584 232,577 Working capital advances 17,634 490,189 Prepayments (121,585) (45,493) Advances and deposits 577,408 (1,391,786) Other receivables (132,467) (591,921) Inventories (30,339) (163,372) Payables, trade 5,268,008 733,729 Charter revenue received in advance 402,277 82,996 Other payables 12,549 6,648 Accrued interest on loans 173,178 70,357 Deferred dry dock expenditure (1,321,897) (193,996) Net cash provided by operating activities 8,657,551 1,332,505 INVESTING ACTIVITIES Payments for acquisition of vessels and (68,532,225) (27,291,840) equipment Payments for vessels under construction (9,658,375) (15,695,292) Payments for other non-current assets (25,628) (11,868) Net cash used in investing activities (78,216,228) (42,999,000) FINANCING ACTIVITIES Short-term revolving credit facility - 8,500,000 Proceeds from long-term debt 45,000,000 26,290,000 Repayments of long-term debt (2,275,000) (1,205,000) Repayments of capital leases (370,471) - Payments for deferred finance charges (2,293,736) (677,663) Net proceeds from equity offering 102,559,385 - Payment of dividend (1,805,000) - Net cash provided by financing activities 140,815,178 32,907,337 Net increase / decrease in cash and cash 71,256,501 (8,759,158) equivalents Cash and cash equivalents at the beginning 56,860,845 15,334,123 of the year Cash and cash equivalents at the end of 128,117,346 6,574,965 the period Ardmore Shipping Corporation Unaudited Other Operating Data (Expressed in U.S. dollars, unless otherwise stated) Three months ended Mar 31, 2014 Mar 31, 2013 ADJUSTED EBITDA^(1) 4,304,263 2,560,524 AVERAGE DAILY DATA Fleet time charter equivalent per day^(2) 14,378 13,004 Fleet operating costs per day^(3) 6,156 6,109 Technical management fees per day^(4) 364 393 6,520 6,502 MR Tankers “Eco-Design” TCE per day^(2) 15,522 15,378^(6) Vessel operating costs per day^(5) 6,148 5,899 MR Tankers “Eco-Mod" TCE per day^(2) 14,447 13,507 Vessel operating costs per day^(5) 6,561 6,507 Chemical Tankers “Eco-Mod” TCE per day^(2) 12,870 12,021 Vessel operating costs per day^(5) 6,877 6,585 FLEET Average number of owned operating vessels 9.9 6.4 (1) Adjusted EBITDA is reconciled under the “Non-GAAP Measures” section below. Time Charter Equivalent (“TCE”) daily rate is the gross charter rate or gross pool rate, as appropriate, per revenue day plus Communication (2) Victualing and Entertainment Income (“CVE”). For vessels employed on voyage charters, TCE is the net rate after deducting voyage costs incurred by commercial managers. Fleet operating costs per day are routine operating expenses and (3) comprise, crewing, repairs and maintenance, insurance, stores, lube oils, communication costs. They do not include additional costs related to upgrading or enhancement of the vessels that are not capitalized. (4) Technical management are fees paid to third-party technical managers. (5) Vessel operating costs per day includes technical management fees. Charter rate for the Ardmore Seavaliant averaged $15,378 per day (6) commencing in February 2013. The rate was a blended rate of $17,049 per day for the first 60 days plus $15,049 thereafter. Ardmore Shipping Corporation Fleet List as at March31, 2014 Charter Vessel Name Type Dwt IMO Month Country Flag Rate Charter Specification Constructed Constructed $ / day Expires ^(1) In Operation Ardmore Product/Chemical 49,998 3 Feb-13 Korea MI 17,149 Feb-15 Eco-design Seavaliant Ardmore Product/Chemical 49,998 3 Jun-13 Korea MI 15,873 Jun-14 Eco-design Seaventure Ardmore Product/Chemical 49,997 3 Jan-14 Korea MI 15,600 Jan-15^(2) Eco-design Seavantage Ardmore Product/Chemical 49,998 3 Feb-14 Korea MI 15,600 Feb-15^(2) Eco-design Seavanguard Ardmore Product 47,141 — Dec-02 Japan MI 14,299 Aug-14 Eco-mod Seatrader Ardmore Product/Chemical 45,840 3 Sep-04 Japan MI 14,299 Jul-14 Eco-mod Seamaster Ardmore Product 45,744 — Aug-04 Japan MI 13,783 Jul-14 Eco-mod Seafarer Ardmore Product 45,726 — Oct-06 Japan MI 16,099 Apr-14^(3) Eco-mod Seamariner Ardmore Product/Chemical 29,006 2 Nov-05 Korea MI 13,549 Feb-15 Eco-mod Centurion Ardmore Product/Chemical 17,589 2 Jan-10 Korea MI Pool N/A Eco-mod Calypso Ardmore Product/Chemical 17,567 2 Jan-10 Korea MI Pool N/A Eco-mod Capella On Order SPP Hull Product/Chemical 50,300 3 1Q15 Korea MI Pool Eco-design S-1162 SPP Hull Product/Chemical 50,300 3 2Q15 Korea MI Pool Eco-design S-1163 SPP Hull Product/Chemical 50,300 3 2Q15 Korea MI Pool Eco-design S-1171 SPP Hull Product/Chemical 50,300 3 3Q15 Korea MI Pool Eco-design S-1172 HMD Hull Product/Chemical 37,000 2 1Q15 Korea MI TBD Eco-design H-2480 HMD Hull Product/Chemical 37,000 2 1Q15 Korea MI TBD Eco-design H-2481 FKA Hull Product/Chemical 25,000 2 4Q14 Japan MI TBD Eco-design N-2062 FKA Hull Product/Chemical 25,000 2 1Q15 Japan MI TBD Eco-design N-2063 FKA Hull Product/Chemical 25,000 2 3Q15 Japan MI TBD Eco-design N-2065 FKA Hull Product/Chemical 25,000 2 4Q15 Japan MI TBD Eco-design N-2067 Total 21 823,804 This table shows gross charter rates, averaged over the duration, as (1) applicable, plus CVE income and does not include commissions payable by us at a rate of 1.25%, where applicable. (2) Option to extend at a market based rate for a second and third year. (3) Option to extend at a market based rate. Non-GAAP Measures This press release describes EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per share, which are not measures prepared in accordance with U.S. GAAP. These Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how Ardmore’s management evaluate operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. All amounts are expressed in U.S. dollars, unless otherwise stated. EBITDA & Adjusted EBITDA Three months ended Mar 31, 2014 Mar 31, 2013 Net loss (413,452) (40,692) Interest income (2,022) (881) Interest expense and finance costs 889,986 542,536 Income tax 12,549 6,648 Depreciation 3,021,762 1,704,017 Amortization of deferred dry dock 441,585 348,896 expenditure EBITDA 3,950,408 2,560,524 Share based compensation (non-cash) 353,855 - Adjusted EBITDA 4,304,263 2,560,524 Adjusted net loss Three months ended Mar 31, 2014 Mar 31, 2013 Net loss (413,452) (40,692) Share based compensation (non-cash) 353,855 - Adjusted net loss (59,597) (40,692) Adjusted loss per share, basic and diluted (0.003) (0.005) Adjusted weighted average number of 19,858,333 8,050,000 shares, basic and diluted Forward Looking Statements Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, competition in the tanker industry, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents, piracy or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. Contact: Investor Relations Enquiries: The IGB Group Mr.Leon Berman, 212-477-8438 Fax: 212-477-8636 firstname.lastname@example.org
Ardmore Shipping Corporation Announces Financial Results for First Quarter 2014
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