Navios Maritime Holdings Inc. Reports Financial Results for the First Quarter Ended March 31, 2006
* Navios delivers 67.5% year-over-year EBITDA growth
* Navios launches a strategic initiative for a South American logistics
business
* Navios raises approximately $65.5 million from the exercise of
approximately 16.0 million warrants
* Navios announces a quarterly dividend of $0.0666 per share
PIRAEUS, Greece, June 7 /PRNewswire-FirstCall/ -- Maritime Holdings Inc. ("Navios") (Nasdaq: BULK, BULKU, BULKW), a vertically integrated global shipping company specializing in the dry-bulk shipping industry, today reported its financial results for the first quarter ended March 31, 2006.
For the following results and the selected financial data presented herein, Navios has compiled consolidated statements of operations for the three month periods ended March 31, 2006 (successor) and 2005 (predecessor). Both the 2006 and 2005 information was derived from unaudited financial statements. The successor period in the consolidated statement of operations is not directly comparable to the predecessor period because it includes the effects of fair value purchase accounting adjustments, which however, do not affect EBITDA.
First Quarter 2006 results (in 000's of US Dollars):
Successor Predecessor
Three Months ended Three Months ended
March 31, 2006 March 31, 2005
(Unaudited) (Unaudited)
Revenue 49,169 61,365
EBITDA 24,597 14,688
Net Income 4,982 12,964
Navios earns revenue from both owned and chartered-in vessels, contracts of affreightment and port terminal operations. Revenue for the three month period ended March 31, 2006 was $49.2 million as compared to $61.4 million for the same period of 2005. This decrease is mainly attributable to (a) the redelivery of chartered-in vessels during 2005 and the first quarter of 2006, following the expiration of these charters, which was partially mitigated by the increase in the number of vessels owned by the Company (see "Fleet Employment Profile") and (b) a decline in the freight market, resulting in lower charter-out daily hire rates in the first quarter of 2006 as compared to those of the same period in 2005. The available days for the fleet declined 1.8% from 2,434 days in 2005 to 2,390 days in 2006 and the achieved TCE (Time Charter Equivalent) rate per day, excluding Forward Freight Agreements (FFAs), decreased 19.5% from $22,153 per day in the three month period ended March 31, 2005 to $17,835 per day for the same period in 2006.
Revenue from port terminal operations for the first quarter of 2006 was $1.0 million as compared to $1.3 million in the same period of 2005. This is attributable to the decreased throughputs in the first quarter of 2006 of 325,000 tons as compared to 334,000 tons in the same period of 2005.
EBITDA was $24.6 million for the first quarter of 2006 as compared to $14.7 million for the same period of 2005. This $9.9 million increase in EBITDA is mainly attributable to (a) a gain in Forward Freight Agreement ("FFA") trading of $1.7 million in the first quarter of 2006 versus a $4.6 million loss in the same period last year, resulting in a favorable FFA variance of $6.2 million, and (b) a reduction in time charter and voyage expenses from $37.5 million in the first quarter of 2005 to $20.8 million in the same period of 2006. This was mainly due to the redelivery of higher cost chartered-in vessels and the exercise of purchase options that resulted in expansion of the owned fleet. The 44.6% reduction in time charter and voyage expenses more than offsets the decline in revenues as discussed above and increase in direct vessel expenses due to the expansion of the owned fleet from six vessels in the first quarter of 2005 to 15 vessels for the same period in 2006.
Net income for the first quarter ended March 31, 2006 was $5.0 million as compared to $13.0 million for the comparable period of 2005. In addition to the matters discussed above, the following also contributed to the decrease of net income: (a) a $3.3 million increase in depreciation due to the expansion of the owned fleet arising from new acquisitions and exercise of purchase options, as well as purchase accounting adjustments following the acquisition, (b) a $5.3 million increase in amortization costs related to the intangible assets established on the Company's balance sheet as part of the of the acquisition in accordance with purchase accounting principles under US GAAP and (c) an $8.7 million increase in interest expense due to the increased indebtedness used to finance the acquisition of the Company and the purchase of nine additional vessels.
Navios' cash and cash equivalents balance at March 31, 2006 was $31.8 million.
Dividend:
Navios' Board of Directors has approved the Company's quarterly cash dividend of $0.0666 per common share, payable on July 5, 2006 to stockholders of record as of June 15, 2006.
Strategic Logistics Initiative:
Navios today announced that it intends to build a South American logistics business by acquiring and building assets complementary to Navios's port terminal and storage facilities in Nueva Palmira in Uruguay. Navios's initial focus will be on the area extending from Brazil to Uruguay on the Paraguay and Parana rivers. Navios intends to expand the capacities and capabilities of Navios's existing port terminal and storage facilities. Navios's strategy is to capitalize on the region's growing agricultural and mineral exports, the cost effectiveness of river transport as compared to available alternatives and Navios's existing transportation infrastructure.
Angeliki Frangou said, "I am very excited about launching this logistics business. We are using a historical asset as the foundation for a new and exciting business that seeks to capitalize on prevailing trends in global trade. We anticipate building the core of this business over the course of the next twelve months and believe that when operational, the business will further provide diversity and create additional shareholder value as we will be further distinguished as a global vertically integrated shipping company."
Warrant Exercise:
Today, Navios raised gross proceeds of approximately $65.5 million from the exercise of warrants. Under the agreements with certain shareholders, the exercise price of the previously outstanding warrants was reduced from $5.00 per share to $4.10 per share and 15,978,280 shares of restricted common stock were issued. Navios has agreed to file a registration statement, registering the resale of such common stock by August 25, 2006, subject to certain penalties for failure to meet the deadline.
To comply with applicable securities laws, the transaction was limited to certain institutional holders and Navios's Chairman and principal stockholder. The exercise price for all warrants other than the warrants effected in this transaction remains at $5.00 per share.
Ms. Frangou, Navios's Chairman and principal stockholder, participated in this transaction and paid approximately $27.3 million to the Company to exercise 6,666,280 warrants. Ms. Frangou's unregistered shares will only be able to be sold pursuant to an exemption from registration.
Giving effect to these warrant exercises, Navios currently has 61,379,134 shares outstanding and 49,521,720 warrants outstanding. The shares outstanding do not include an additional 708,993 shares being issued to the Company's financial advisors. These shares initially will be unregistered and will be issued on or after June 16, 2006.
Summary Fleet Data:
The following table reflects certain key indicators indicative of the
Company's and its fleet performance for the three month periods ended March
31, 2006 and 2005.
Successor Predecessor
Three Months ended Three Months ended
March 31, 2006 March 31, 2005
(Unaudited) (Unaudited)
Available Days 2,390 2,434
Operating Days 2,385 2,410
Fleet Utilization 99.78% 99.02%
Time Charter
Equivalent including FFAs 18,530 20,277
Time Charter
Equivalent excluding FFAs 17,835 22,153
Available days: We define available days for the fleet as the number of the total calendar days the vessels were in our possession for the relevant period, after subtracting off-hire days associated with major repairs and scheduled dry-docks or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable to generating revenues.
Operating days: We define operating days as the number of available days in the relevant period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
Fleet utilization: We define fleet utilization as the percentage of time that our vessels were available for revenue generating, and is calculated by dividing the number of our operating days during the relevant period by the number of the available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels.
Time Charter Equivalent (TCE): We define TCE per ship per day rate as our voyage and time charter revenues less voyage expenses during the relevant period divided by the number of our available days during that period, which is consistent with industry standards. TCE rate is a shipping industry performance measure used primary to compare daily earnings generated by vessels on time charters with daily earning generated by vessels on voyage charters, because charter hire for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts.
Fleet Employment Profile:
Following is the "core fleet" employment profile, including newbuildings to be delivered. The "core fleet" includes the owned vessels and the long term chartered-in vessels. Navios' core fleet consists of a total of 32 vessels, totaling 2.10 million deadweight tones. Seven of these vessels are scheduled to be delivered to the fleet within the next two years.
Currently, the Company operates a fleet of 25 vessels of which 16 are owned and nine are chartered-in under long term time charters. These vessels aggregate approximately 1.61 million deadweight tons and have an average age of 4.3 years. Navios has currently fixed 87.6 % and 24.0% of its available days on a charter out basis for 2006 and 2007 respectively, equivalent to $138.2 million and $43.2 million in revenue, respectively. The average daily charter-out rate for the fleet is $17,242 for 2006. The current average daily charter-in rate for the active long term chartered-in vessels is $9,402.
Owned Vessels
Vessels Type Built DWT Charter Expiration
Rate(1) Date(2)
Navios Ionian Ultra Handymax 2000 52,068 15,152 01/25/2007
Navios Apollon Ultra Handymax 2000 52,073 16,150 08/21/2007
Navios Horizon Ultra Handymax 2001 50,346 14,725 04/30/2008
Navios Herakles Ultra Handymax 2001 52,061 15,437 02/19/2007
Navios Achilles Ultra Handymax 2001 52,063 15,533 10/08/2006
Navios Meridian Ultra Handymax 2002 50,316 20,045 10/15/2006
Navios Mercator Ultra Handymax 2002 53,553 21,175 10/01/2006
Navios Arc Ultra Handymax 2003 53,514 15,438 03/15/2007
Navios Hios Ultra Handymax 2003 55,180 19,237 09/15/2006
Navios Kypros Ultra Handymax 2003 55,222 16,844 04/05/2007
Navios Gemini S Panamax 1994 68,636 16,150 09/21/2006
Navios Libra II Panamax 1995 70,136 17,385 07/12/2006
Navios Felicity Panamax 1997 73,857 9,144 03/25/2007
Navios Magellan Panamax 2000 74,333 14,963 02/23/2007
Navios Galaxy I Panamax 2001 74,195 24,062 12/25/2007
Navios Alegria Panamax 2004 76,466 23,750 08/03/2006
Long Term Chartered-in Vessels
Vessels Type Built DWT Purchase Charter Expiration
Option(3) Rate(1) Date(2)
Navios Ultra
Vector Handymax 2002 50,296 No 8,811 12/17/2007
Navios Ultra
Astra Handymax 2006 53,400 Yes 17,100 04/19/2007
Navios
Star Panamax 2002 76,662 Yes 15,343 01/13/2007
Navios
Cielo Panamax 2003 75,834 No 16,863 08/30/2006
Navios
Hyperion Panamax 2004 75,500 Yes 15,400 01/05/2007
Navios
Orbiter Panamax 2004 76,602 Yes 16,150 10/16/2006
Navios
Aurora Panamax 2005 75,200 Yes 24,063 05/27/2008
Navios
Orion Panamax 2005 76,000 No 21,175 01/15/2007
Navios
Titan Panamax 2005 82,936 No 20,000 10/09/2007
Long Term Chartered-in Vessels on Order
Vessels Type To Be Built Purchase DWT
Option
Navios Altair Panamax 09/2006 No 82,300
Navios Sagittarius Panamax 11/2006 Yes 75,500
Navios TBN Ultra Handymax 04/2007 Yes 53,500
Navios TBN Panamax 09/2007 Yes 82,000
Navios TBN Panamax 11/2007 No 75,200
Navios TBN Panamax 03/2008 Yes 76,500
Navios TBN Ultra Handymax 05/2008 No 55,100
(1) Time Charter Revenue Rate per day net of commissions
(2) Estimated dates assuming earliest redelivery by charterers
Conference Call and Webcast:
As already announced, today, Wednesday, June 7, 2006 at 8:30 AM EST, the Company's management will host a conference call to discuss the results.
Conference Call Details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: (888) 802-8574 (from the US) or (973) 628-6885 (from outside the US). Pass Code: 7440447.
A telephonic replay of the conference call will be available until Wednesday, June 14, 2006; 11:59 PM EST, by dialing (877) 519-4471 (from the US) or (973) 341-3080 (from outside the US). Pass Code: 7440447
Webcast:
This call will simultaneously be Webcast at the following Web address: http://www.videonewswire.com/event.asp?id=34144
The Webcast will be archived and available at this same Web address for one year following the call.
ABOUT NAVIOS MARITIME INC.
On August 25, 2005, pursuant to a Stock Purchase Agreement dated February 28, 2005, as amended, by and among International Shipping Enterprises, Inc. ("ISE"), Navios Maritime Holdings Inc. ("Navios") and all the shareholders of Navios, ISE acquired Navios through the purchase of all of its outstanding shares of common stock. As a result of this acquisition, Navios became a wholly-owned subsidiary of ISE. In addition, on August 25, 2005, simultaneously with the acquisition of Navios, ISE effected a reincorporation from the State of Delaware to the Republic of the Marshall Islands through a downstream merger with and into its newly acquired wholly-owned subsidiary, whose name was and continued to be Navios Maritime Holdings Inc.
Navios owns and operates a fleet of ten Ultra Handymax and six Panamax vessels. It also time charters-in and operates a fleet of two Ultra Handymax and seven Panamax vessels that are employed to provide worldwide transportation of bulk commodities. Furthermore, it also operates a port and transfer terminal located in Nueva Palmira, Uruguay. The facility consists of docks, conveyors and silo storage capacity totaling 270,440 tons. The owned fleet has a total capacity of 964,019 dwt and an average age of approximately 5.6 years. Of the nine chartered-in vessels, currently in operation, Navios has options to acquire five of them. Furthermore, it also has seven long term chartered-in vessels on order which are expected to be delivered at various dates from September 2006 to May 2008. Navios has options to purchase four of the seven long term chartered-in vessels.
Forward Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenues and time charters. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(expressed in thousands of US Dollars)
Successor Successor
March 31, December 31,
2006 2005
(unaudited) (audited)
ASSETS
Current Assets
Cash and cash equivalents $31,774 $37,737
Restricted cash 6,792 4,086
Accounts receivable, net 5,296 13,703
Short term derivative assets 31,577 45,556
Short term backlog assets 6,320 7,019
Prepaid expenses and other current assets 7,207 6,438
Total current assets 88,966 114,539
Deposit on exercise of vessels purchase options 1,666 8,322
Vessels, port terminal and other
fixed assets, net 471,686 365,997
Long term derivative assets 169 28
Deferred financing costs, net 11,024 11,677
Deferred dry dock and special survey costs, net 3,317 2,448
Investments in affiliates 356 657
Long term back log asset 6,450 7,744
Trade name 88,320 89,014
Port terminal operating rights 30,538 30,728
Favorable lease terms and purchase options 88,384 117,440
Goodwill 40,789 40,789
Total non-current assets 742,699 674,844
Total Assets $831,665 $789,383
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $10,069 $13,886
Accrued expenses 6,570 11,253
Deferred voyage revenue 5,540 6,143
Short term derivative liability 23,825 39,992
Short term backlog liability 8,109 8,109
Current portion of long term debt 60,086 54,221
Total current liabilities 114,199 133,604
Long term debt, net of current portion 496,256 439,179
Long term liabilities 2,099 2,297
Long term derivative liability 313 598
Long term backlog liability 3,947 5,947
Total non-current liabilities 502,615 448,021
Total liabilities 616,814 581,625
Commitments and Contingencies - -
Stockholders' Equity
Preferred stock - $0.0001 par value,
authorized 1,000,000 shares.
None issued - -
Common stock - $ 0.0001 par value,
authorized 120,000,000 shares, issued
and outstanding 45,400,854 5 4
Additional paid-in capital 210,727 205,593
Retained earnings 4,119 2,161
Total stockholders' equity 214,851 207,758
Total Liabilities and Stockholders' Equity $831,665 $789,383
NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in thousands of US Dollars - except per share data)
Successor Predecessor
Three Month Three Month
Period Ended Period Ended
March 31, 2006 March 31, 2005
(unaudited) (unaudited)
Revenue $49,169 $61,365
Gain (loss) on Forward Freight Agreements 1,662 (4,567)
Time charter, voyage and port terminal expenses (20,767) (37,469)
Direct vessel expenses (4,164) (2,110)
General and administrative expenses (3,596) (3,644)
Depreciation and amortization (10,120) (1,489)
Interest income 468 302
Interest expense and finance cost, net (9,206) (475)
Other income 1,425 971
Other expense (43) (222)
Income before equity in net earning of
affiliate companies 4,828 12,662
Equity in net Earnings of Affiliated Companies 154 302
Net income $4,982 $12,964
Earnings per share, basic $0.11 $14.82
Weighted average number of shares, basic 45,336,324 874,584
Earnings per share, diluted $0.11 $14.82
Weighted average number of shares, diluted 45,336,324 874,584
NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in thousands of US Dollars)
Successor Predecessor
March 31, 2006 March 31, 2005
(unaudited) (unaudited)
OPERATING ACTIVITIES
Net income $4,982 $12,964
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 10,120 1,489
Amortization of deferred financing cost 653 13
Amortization of deferred dry dock costs 263 62
Amortization of backlog 494 -
Provision for losses on accounts receivable - (912)
Unrealized (gain)/loss on FFA derivatives (1,878) 16,905
Unrealized loss on foreign exchange contracts - 197
Unrealized (gain)/loss on interest rate swaps (926) (612)
Earnings in affiliates, net of dividends received 301 180
Changes in operating assets and liabilities:
Increase in restricted cash (2,706) (1,474)
Decrease (increase) in accounts receivable 8,407 (1,565)
(Increase) in prepaid expenses and other (769) (7,300)
(Decrease) in accounts payable (3,817) (689)
(Decrease) in accrued expenses (4,683) (2,639)
(Decrease) increase in deferred voyage revenue (603) 3,807
(Decrease) in long term liability (198) (235)
Increase (decrease) in derivative liability 189 (2,014)
Payments for drydock and special survey costs (1,132) -
Net cash provided by operating activities 8,697 18,177
INVESTING ACTIVITIES:
Acquisition of vessels (73,652) -
Purchase of property and equipment (927) (1,656)
Net cash used in investing activities (74,579) (1,656)
FINANCING ACTIVITIES:
Proceeds from long term loan 77,964 -
Repayment of long term debt (15,022) (250)
Dividends paid (3,023) -
Net cash provided (used in)
by financing activities 59,919 (250)
(Decrease) increase in cash and cash equivalents (5,963) 16,271
Cash and cash equivalents, beginning of year 37,737 46,758
Cash and cash equivalent, end of year $31,774 $63,029
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $8,581 $765
Disclosure of Non-GAAP Financial Measures
EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is a "non-GAAP financial measure" and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. EBITDA is presented to provide additional information with respect to the Company's ability to satisfy its obligations including debt service, capital expenditures, working capital requirements and determination of dividends. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.
EBITDA Reconciliation to Cash From Operations:
(in thousands of US Dollars)
Successor Predecessor
March 31, 2006 March 31, 2005
(unaudited) (unaudited)
Net cash provided by operating activities $8,697 $18,177
Net (decrease) increase in operating assets (4,932) 10,339
Net decrease in operating liabilities 9,112 1,770
Net interest cost 8,738 173
Deferred finance charges (653) (13)
Provision for losses on accounts receivable - 912
Unrealized gain (loss) on FFA derivatives, FECs
and interest rate swaps 2,804 (16,490)
Earnings in affiliates, net of dividends received (301) (180)
Payments for drydock and special survey costs 1,132 -
EBITDA $24,597 $14,688
Public & Investor Relations Contact:
Navios Maritime Holdings Inc.
Investor Relations
212-279-8820
investors@navios.com
SOURCE Navios Maritime Holdings Inc.
-0- 06/07/2006
/CONTACT: Navios Maritime Holdings Inc., Investor Relations,
+1-212-279-8820, investors@navios.com/
(BULK BULKU BULKW)
CO: Navios Maritime Holdings Inc.
ST: Greece
IN: TRN MAR OIL
SU: ERN CCA
WS
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7903 06/07/2006 07:45 EDT http://www.prnewswire.com