Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2023
“Danaos reports yet another solid quarter, despite the continuing geopolitical uncertainty and the turmoil in the financial markets.
Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s largest independent owners of containerships, today reported unaudited results for the first quarter ended March 31, 2023.
Highlights for the First Quarter Ended March 31, 2023:
- Adjusted net income1 of $145.3 million, or $7.14 per share, for the three months ended March 31, 2023 compared to $235.3 million, or $11.36 per share, for the three months ended March 31, 2022, a decrease of 38.2%. Our adjusted net income for the three months ended March 31, 2022 included a non-recurring $110.0 million dividend from ZIM that accounted for $5.31 per share.
- Net income of $146.2 million, or $7.18 per share, for the three months ended March 31, 2023 compared to $331.5 million, or $16.00 per share, for the three months ended March 31, 2022. Our net income for the three months ended March 31, 2022 included a non-recurring $209.5 million total gain on ZIM investment that accounted for $10.11 per share.
- Cash and cash equivalents were $359.6 million as of March 31, 2023.
- Total liquidity was $730.8 million as of March 31, 2023, including undrawn available commitments under our Revolving Credit Facility.
- As of the date of this release, Danaos has repurchased in total 683,889 shares of its common stock in the open market for $40.5 million, under its share repurchase program of up to $100 million announced in June 2022.
- During the three months ended March 31, 2023, we invested $4.3 million for a 49% shareholding interest in a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.
- Operating revenues of $243.6 million for the three months ended March 31, 2023 compared to $229.9 million for the three months ended March 31, 2022, an increase of 6.0%.
- During the last three months, we concluded new charter agreements for $380.7 million of contracted revenues that included $262.0 million related to 3-year charters for six under construction containerships expected to be delivered during the second half of 2024.
- On May 12, 2023, we made an early prepayment of our outstanding leaseback obligations related to two of our vessels, which amounted to $66.3 million as of March 31, 2023. As a result of this early prepayment, we currently have no lease obligations on the balance sheet.
- Adjusted EBITDA1 of $179.0 million for the three months ended March 31, 2023 compared to $269.5 million for the three months ended March 31, 2022, a decrease of 33.6%. Our adjusted EBITDA for the three months ended March 31, 2022 included a non-recurring $110.0 million dividend from ZIM.
- Total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, were $2.3 billion as of March 31, 2023. The remaining average contracted charter duration was 3.2 years, weighted by aggregate contracted charter hire.
- Contracted operating days charter coverage is currently 97.3% for 2023, and 73.2% for 2024.
- As of March 31, 2023, Net Debt2 was $137.9 million, and Net Debt / LTM Adjusted EBITDA was 0.18x, while 44 of our vessels are debt-free currently.
- Danaos has declared a dividend of $0.75 per share of common stock for the first quarter of 2023, which is payable on June 7, 2023, to stockholders of record as of May 26, 2023.
Three Months Ended March 31, 2023
Financial Summary - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
|
|
Three months ended |
|
Three months ended |
||||
|
March 31, |
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
|
|
|
|
|
||||
|
Operating revenues |
$ |
243,574 |
|
|
$ |
229,901 |
|
|
Net income |
$ |
146,201 |
|
|
$ |
331,465 |
|
|
Adjusted net income1 |
$ |
145,255 |
|
|
$ |
235,297 |
|
|
Earnings per share, diluted |
$ |
7.18 |
|
|
$ |
16.00 |
|
|
Adjusted earnings per share, diluted1 |
$ |
7.14 |
|
|
$ |
11.36 |
|
|
Diluted weighted average number of shares (in thousands) |
|
20,349 |
|
|
|
20,717 |
|
|
Adjusted EBITDA1 |
$ |
179,040 |
|
|
$ |
269,484 |
|
|
1 |
Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to adjusted EBITDA provided below. |
|
2 |
Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents. |
Danaos’ CEO Dr. John Coustas commented:
“Danaos reports yet another solid quarter, despite the continuing geopolitical uncertainty and the turmoil in the financial markets. Box rates strengthened after the Chinese New Year due to the blank sailings and discipline on the part of liner companies. In addition, the charter market improved due to the very limited supply of charter-free vessels as well as the impact of speed reduction as charterers seek to comply with CII regulations.
Danaos has continued its successful chartering and asset management strategy, driving steady and predictable performance and laying the groundwork for continued growth while also pursuing environmentally sound policies. Our chartering strategy delivered another strong quarter, and we have operating days charter coverage of 97% for 2023 and 73% for 2024. Our strong chartering capabilities and our business strategy continue to drive solid performance.
In the first quarter, we successfully secured more than $380 million of contracted revenue through multi-year charters, including $262 million for all six new buildings that will be delivered to us in 2024. In addition, we have placed an order for two additional 6,000 TEU vessels of the latest eco design to be delivered in the fourth quarter of 2024 and the second quarter of 2025. Our modernization efforts that are key to the future of the Company, highlight our commitment to maintaining a high quality fleet while supporting the ongoing decarbonization of the industry.
We are very well positioned to navigate the operating environment with the new regulatory requirements that are becoming very demanding and complex. Our very strong operating platform provides us significant competitive advantage in complying with upcoming regulations, while strengthening our value proposition and ties with our customers as the industry focuses on achieving environmental goals and closer cooperation between owners and charterers becomes increasingly important.
We appreciate the ongoing support of our customers and employees and will continue to work diligently for the benefit of our shareholders.”
Three months ended March 31, 2023 compared to the three months ended March 31, 2022
During the three months ended March 31, 2023, Danaos had an average of 68.3 containerships compared to 71.0 containerships during the three months ended March 31, 2022. Our fleet utilization for the three months ended March 31, 2023 was 96.8% compared to 97.4% for the three months ended March 31, 2022.
Our adjusted net income amounted to $145.3 million, or $7.14 per share, for the three months ended March 31, 2023 compared to $235.3 million, or $11.36 per share, for the three months ended March 31, 2022. We have adjusted our net income in the three months ended March 31, 2023 for a $1.6 million gain on sale of vessel and a $0.7 million non-cash finance fees amortization. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The $90.0 million decrease in adjusted net income for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 is primarily attributable to a $110.0 million dividend from ZIM (net of withholding taxes) recognized in the three months ended March 31, 2022. We also incurred a $2.6 million equity loss on investments in the three months ended March 31, 2023 and a $1.2 million increase in total operating expenses, which were partially offset by a $13.7 million increase in operating revenues and a $10.1 million decrease in net finance expenses.
On a non-adjusted basis, net income amounted to $146.2 million, or $7.18 earnings per diluted share, for the three months ended March 31, 2023 compared to net income of $331.5 million, or $16.00 earnings per diluted share, for the three months ended March 31, 2022. Our net income for the three months ended March 31, 2022 included a total gain on our investment in ZIM of $209.5 million, net of withholding taxes on dividend.
Operating Revenues
Operating revenues increased by 6.0%, or $13.7 million, to $243.6 million in the three months ended March 31, 2023 from $229.9 million in the three months ended March 31, 2022.
Operating revenues for the three months ended March 31, 2023 reflected:
- a $30.4 million increase in revenues in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 mainly as a result of higher charter rates;
- a $3.3 million decrease in revenues in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to vessel disposals;
- a $3.3 million decrease in revenues in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to lower non-cash revenue recognition in accordance with US GAAP; and
- a $10.1 million decrease in revenues in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to decreased amortization of assumed time charters.
Vessel Operating Expenses
Vessel operating expenses increased by $1.4 million to $40.6 million in the three months ended March 31, 2023 from $39.2 million in the three months ended March 31, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,807 per vessel per day for the three months ended March 31, 2023 compared to $6,307 per vessel per day for the three months ended March 31, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance and crew expenses. Management believes that our daily operating costs remain among the most competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 5.4%, or $1.8 million, to $31.5 million in the three months ended March 31, 2023 from $33.3 million in the three months ended March 31, 2022 due to our recent sale of three vessels.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $1.1 million to $3.8 million in the three months ended March 31, 2023 from $2.7 million in the three months ended March 31, 2022.
General and Administrative Expenses
General and administrative expenses decreased by $0.6 million to $6.8 million in the three months ended March 31, 2023, from $7.4 million in the three months ended March 31, 2022. The decrease was primarily attributable to decreased management fees due to the recent sale of three vessels and decreased stock-based compensation expenses.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by $0.7 million to $7.9 million in the three months ended March 31, 2023 from $7.2 million in the three months ended March 31, 2022 primarily as a result of the increase in commissions due to the increase in revenue per vessel, which was partially offset by a decrease in the average number of vessels in our fleet.
Gain on Sale of Vessels
In January 2023, we completed the sale of the Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.
Interest Expense and Interest Income
Interest expense decreased by 60.8%, or $10.4 million, to $6.7 million in the three months ended March 31, 2023 from $17.1 million in the three months ended March 31, 2022. The decrease in interest expense is a result of:
- a $5.7 million decrease in interest expense due to a decrease in our average indebtedness by $849.0 million between the two periods. Average indebtedness was $507.7 million in the three months ended March 31, 2023, compared to average indebtedness of $1,356.7 million in the three months ended March 31, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 3.0%;
- a $3.4 million decrease in interest expense due to capitalized interest on our vessels under construction in the three months ended March 31, 2023 compared to none in the three months ended March 31, 2022;
- a $2.7 million decrease in the amortization of deferred finance costs and debt discount related to our refinancing; and
- a $1.4 million reduction of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were fully repaid in May 2022.
As of March 31, 2023, outstanding debt, gross of deferred finance costs, was $431.1 million, which included $262.8 million aggregate principal amount of our Senior Notes, and our leaseback obligations of $66.3 million. These balances compare to debt of $1,118.6 million and a leaseback obligations of $210.2 million as of March 31, 2022.
Interest income increased by $2.7 million to $2.7 million in the three months ended March 31, 2023 compared to nil in the three months ended March 31, 2022 mainly as a result of increased interest income earned on time deposits in the three months ended March 31, 2023.
Gain on investments
The gain on investments of $221.7 million in the three months ended March 31, 2022 consisted of the change in fair value of our shareholding interest in ZIM of $99.5 million and dividends recognized on ZIM ordinary shares of $122.2 million. In April and September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $246.6 million.
Other finance expenses, net
Other finance expenses, net increased by $0.4 million to $1.0 million in the three months ended March 31, 2023 compared to $0.6 million in the three months ended March 31, 2022 mainly due to an increase in commitment fees for our revolving credit facility.
Equity loss on investments
Equity loss on investments amounting to $2.6 million in the three months ended March 31, 2023 relates to our share of initial expenses of a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended March 31, 2023 and March 31, 2022.
Other income/(expenses), net
Other income, net was $0.2 million in the three months ended March 31, 2023 compared to other income, net of $0.5 million in the three months ended March 31, 2022.
Income taxes
Income taxes of $12.2 million in the three months ended March 31, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares and compared to no income tax in the three months ended March 31, 2023.
Adjusted EBITDA
Adjusted EBITDA decreased by 33.6%, or $90.5 million, to $179.0 million in the three months ended March 31, 2023 from $269.5 million in the three months ended March 31, 2022. As outlined above, the decrease is primarily attributable to a recognition of a $110.0 million dividend from ZIM in the three months ended March 31, 2022. We also incurred a $1.7 million increase in total operating expenses and a $2.6 million equity loss on investments in the three months ended March 31, 2023, which were partially offset by a $23.8 million increase in operating revenues. Adjusted EBITDA for the three months ended March 31, 2023 is adjusted for a $1.6 million gain on sale of vessel. Tables reconciling Net Income to Adjusted EBITDA can be found at the end of this earnings release.
Dividend Payment
Danaos has declared a dividend of $0.75 per share of common stock for the first quarter of 2023, which is payable on June 7, 2023 to stockholders of record as of May 26, 2023.
Recent Developments
As of the date of this release, we have repurchased in total 683,889 shares of our common stock in the open market for $40.5 million, under our share repurchase program of up to $100 million announced in June 2022.
On May 12, 2023, we made an early prepayment of our outstanding leaseback obligations related to two of our vessels, which amounted to $66.3 million as of March 31, 2023.
On April 28, 2023, we entered into contracts for the construction of two 6,000 TEU container vessels with the latest eco design characteristics. The vessels are expected to be delivered in the fourth quarter of 2024 and second quarter of 2025, respectively.
Conference Call and Webcast
On Tuesday, May 16, 2023 at 9:00 A.M. ET, the Company's management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.
A telephonic replay of the conference call will be available until May 23, 2023 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 9465910# as the access code.
Audio Webcast
There will also be a live and then archived webcast of the conference call on the Danaos website (www.danaos.com). Participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Slide Presentation
A slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 68 containerships aggregating 421,293 TEUs and 8 under construction containerships aggregating 58,398 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions. Although Danaos Corporation believes 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, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized cargo, the ability and willingness of charterers to perform their obligations to us, charter rates for containerships, shipyards constructing our contracted newbuilding vessels, performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, including the conflict in Ukraine and related sanctions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 44 unscheduled off-hire days in the three months ended March 31, 2023. The following table summarizes vessel utilization and the impact of the off-hire days on the Company’s revenue.
|
Vessel Utilization (No. of Days) |
First Quarter |
First Quarter |
|||||
|
2023 |
2022 |
||||||
|
Ownership Days |
|
6,150 |
|
|
6,390 |
|
|
|
Less Off-hire Days: |
|||||||
|
Scheduled Off-hire Days |
|
(150 |
) |
|
(148 |
) |
|
|
Other Off-hire Days |
|
(44 |
) |
|
(16 |
) |
|
|
Operating Days |
|
5,956 |
|
|
6,226 |
|
|
|
Vessel Utilization |
|
96.8 |
% |
|
97.4 |
% |
|
|
|
|||||||
|
Operating Revenues (in '000s of US Dollars) |
$ |
243,574 |
|
$ |
229,901 |
|
|
|
Average Gross Daily Charter Rate |
$ |
40,896 |
|
$ |
36,926 |
|
|
Fleet List
The following table describes in detail our fleet deployment profile as of May 12, 2023:
|
Vessel Name |
Vessel Size (TEU) |
|
Year Built |
|
Expiration of Charter(1) |
|
Hyundai Ambition |
13,100 |
|
2012 |
|
June 2024 |
|
Hyundai Speed |
13,100 |
|
2012 |
|
June 2024 |
|
Hyundai Smart |
13,100 |
|
2012 |
|
May 2024 |
|
Hyundai Respect |
13,100 |
|
2012 |
|
March 2024 |
|
Hyundai Honour |
13,100 |
|
2012 |
|
February 2024 |
|
Express Rome |
10,100 |
|
2011 |
|
May 2024 |
|
Express Berlin |
10,100 |
|
2011 |
|
August 2026 |
|
Express Athens |
10,100 |
|
2011 |
|
May 2024 |
|
Le Havre |
9,580 |
|
2006 |
|
June 2028 |
|
Pusan C |
9,580 |
|
2006 |
|
May 2028 |
|
Bremen |
9,012 |
|
2009 |
|
January 2028 |
|
C Hamburg |
9,012 |
|
2009 |
|
January 2028 |
|
Niledutch Lion |
8,626 |
|
2008 |
|
May 2026 |
|
Kota Manzanillo |
8,533 |
|
2005 |
|
February 2026 |
|
Belita |
8,533 |
|
2006 |
|
July 2026 |
|
CMA CGM Melisande |
8,530 |
|
2012 |
|
June 2024 |
|
CMA CGM Attila |
8,530 |
|
2011 |
|
October 2023 |
|
CMA CGM Tancredi |
8,530 |
|
2011 |
|
November 2023 |
|
CMA CGM Bianca |
8,530 |
|
2011 |
|
January 2024 |
|
CMA CGM Samson |
8,530 |
|
2011 |
|
March 2024 |
|
America |
8,468 |
|
2004 |
|
April 2028 |
|
Europe |
8,468 |
|
2004 |
|
May 2028 |
|
Kota Santos |
8,463 |
|
2005 |
|
August 2026 |
|
CMA CGM Moliere |
6,500 |
|
2009 |
|
March 2027 |
|
CMA CGM Musset |
6,500 |
|
2010 |
|
September 2025 |
|
CMA CGM Nerval |
6,500 |
|
2010 |
|
November 2025 |
|
CMA CGM Rabelais |
6,500 |
|
2010 |
|
January 2026 |
|
Racine (ex CMA CGM Racine) |
6,500 |
|
2010 |
|
February 2024 |
|
YM Mandate |
6,500 |
|
2010 |
|
January 2028 |
|
YM Maturity |
6,500 |
|
2010 |
|
April 2028 |
|
Zim Savannah |
6,402 |
|
2002 |
|
May 2024 |
|
Dimitra C |
6,402 |
|
2002 |
|
January 2024 |
|
Suez Canal |
5,610 |
|
2002 |
|
February 2024 |
|
Kota Lima |
5,544 |
|
2002 |
|
November 2024 |
|
Wide Alpha |
5,466 |
|
2014 |
|
March 2024 |
|
Stephanie C |
5,466 |
|
2014 |
|
June 2025 |
|
Maersk Euphrates |
5,466 |
|
2014 |
|
April 2024 |
|
Wide Hotel |
5,466 |
|
2015 |
|
May 2024 |
|
Wide India |
5,466 |
|
2015 |
|
November 2025 |
|
Wide Juliet |
5,466 |
|
2015 |
|
October 2025 |
|
Seattle C |
4,253 |
|
2007 |
|
October 2024 |
|
Vancouver |
4,253 |
|
2007 |
|
November 2024 |
|
Derby D |
4,253 |
|
2004 |
|
January 2027 |
|
Tongala |
4,253 |
|
2004 |
|
November 2024 |
|
Rio Grande |
4,253 |
|
2008 |
|
November 2024 |
|
Paolo (ex ZIM Sao Paolo) |
4,253 |
|
2008 |
|
July 2023 |
|
ZIM Kingston |
4,253 |
|
2008 |
|
June 2025 |
|
ZIM Monaco |
4,253 |
|
2009 |
|
October 2024 |
|
Dalian |
4,253 |
|
2009 |
|
March 2026 |
|
ZIM Luanda |
4,253 |
|
2009 |
|
August 2025 |
|
Dimitris C |
3,430 |
|
2001 |
|
November 2025 |
|
Express Black Sea |
3,400 |
|
2011 |
|
January 2025 |
|
Express Spain |
3,400 |
|
2011 |
|
January 2025 |
|
Express Argentina |
3,400 |
|
2010 |
|
May 2023 |
|
Express Brazil |
3,400 |
|
2010 |
|
June 2025 |
|
Express France |
3,400 |
|
2010 |
|
September 2025 |
|
Singapore |
3,314 |
|
2004 |
|
May 2024 |
|
Colombo |
3,314 |
|
2004 |
|
January 2025 |
|
Zebra |
2,602 |
|
2001 |
|
November 2024 |
|
Artotina |
2,524 |
|
2001 |
|
May 2025 |
|
Advance |
2,200 |
|
1997 |
|
January 2025 |
|
Future |
2,200 |
|
1997 |
|
December 2024 |
|
Sprinter |
2,200 |
|
1997 |
|
December 2024 |
|
Stride |
2,200 |
|
1997 |
|
January 2025 |
|
Progress C |
2,200 |
|
1998 |
|
November 2024 |
|
Bridge |
2,200 |
|
1998 |
|
December 2024 |
|
Highway |
2,200 |
|
1998 |
|
July 2023 |
|
Phoenix D |
2,200 |
|
1997 |
|
March 2025 |
|
Vessels under construction |
|
|
|
|
|
|
Hull Number |
Vessel Size (TEU) |
|
Expected Delivery Year |
|
Minimum Charter Duration |
|
Hull No. C7100-7 |
7,165 |
|
2024 |
|
3 Years |
|
Hull No. C7100-8 |
7,165 |
|
2024 |
|
3 Years |
|
Hull No. HN4009 |
8,010 |
|
2024 |
|
3 Years |
|
Hull No. HN4010 |
8,010 |
|
2024 |
|
3 Years |
|
Hull No. HN4011 |
8,010 |
|
2024 |
|
3 Years |
|
Hull No. HN4012 |
8,010 |
|
2024 |
|
3 Years |
|
Hull No. CV5900-07 |
6,014 |
|
2024 |
|
- |
|
Hull No. CV5900-08 |
6,014 |
|
2025 |
|
- |
|
(1) |
Earliest date charters could expire. Some charters include options for the charterer to extend their terms. |
DANAOS CORPORATION
Condensed Consolidated Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
|
Three months ended |
Three months ended |
||||||
|
March 31, |
March 31, |
||||||
|
|
2023 |
2022 |
|||||
|
OPERATING REVENUES |
$ |
243,574 |
|
$ |
229,901 |
|
|
|
OPERATING EXPENSES |
|
|
|||||
|
Vessel operating expenses |
|
(40,639 |
) |
|
(39,164 |
) |
|
|
Depreciation & amortization |
|
(35,364 |
) |
|
(36,079 |
) |
|
|
General & administrative |
|
(6,845 |
) |
|
(7,391 |
) |
|
|
Other operating expenses |
|
(7,883 |
) |
|
(7,189 |
) |
|
|
Gain on sale of vessels |
|
1,639 |
|
|
- |
|
|
|
Income From Operations |
|
154,482 |
|
|
140,078 |
|
|
|
|
|
|
|||||
|
OTHER INCOME/(EXPENSES) |
|
|
|||||
|
Interest income |
|
2,723 |
|
|
1 |
|
|
|
Interest expense |
|
(6,722 |
) |
|
(17,114 |
) |
|
|
Gain on investments |
|
- |
|
|
221,717 |
|
|
|
Other finance expenses |
|
(976 |
) |
|
(605 |
) |
|
|
Equity loss on investments |
|
(2,588 |
) |
|
- |
|
|
|
Other income/(expenses), net |
|
175 |
|
|
499 |
|
|
|
Realized loss on derivatives |
|
(893 |
) |
|
(893 |
) |
|
|
Total Other Income/(Expenses), net |
|
(8,281 |
) |
|
203,605 |
|
|
|
Income Before Income Taxes |
|
146,201 |
|
|
343,683 |
|
|
|
Income taxes |
|
- |
|
|
(12,218 |
) |
|
|
Net Income |
$ |
146,201 |
|
$ |
331,465 |
|
|
|
EARNINGS PER SHARE |
|
|
|||||
|
Basic earnings per share |
$ |
7.18 |
|
$ |
16.02 |
|
|
|
Diluted earnings per share |
$ |
7.18 |
|
$ |
16.00 |
|
|
|
Basic weighted average number of common shares (in thousands of shares) |
|
20,349 |
|
|
20,697 |
|
|
|
Diluted weighted average number of common shares (in thousands of shares) |
|
20,349 |
|
|
20,717 |
|
|
Non-GAAP Measures1
Reconciliation of Net Income to Adjusted Net Income – Unaudited
|
|
Three months ended |
|
Three months ended |
||||
|
March 31, |
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
|
Net income |
$ |
146,201 |
|
|
$ |
331,465 |
|
|
Change in fair value of investments |
|
- |
|
|
|
(99,539 |
) |
|
Gain on sale of vessels |
|
(1,639 |
) |
|
|
- |
|
|
Amortization of financing fees and debt discount |
|
693 |
|
|
|
3,371 |
|
|
Adjusted Net Income |
$ |
145,255 |
|
|
$ |
235,297 |
|
|
Adjusted Earnings Per Share, diluted |
$ |
7.14 |
|
|
$ |
11.36 |
|
|
Diluted weighted average number of shares (in thousands of shares) |
|
20,349 |
|
|
|
20,717 |
|
1 The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 31, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
DANAOS CORPORATION
Condensed Consolidated Balance Sheets - Unaudited
(Expressed in thousands of United States dollars)
|
As of |
|
As of |
|||||
|
March 31, |
|
December 31, |
|||||
|
|
2023 |
|
2022 |
||||
|
ASSETS |
|
|
|||||
|
CURRENT ASSETS |
|
|
|||||
|
Cash, cash equivalents and restricted cash |
$ |
359,580 |
|
$ |
267,668 |
|
|
|
Accounts receivable, net |
|
7,574 |
|
|
5,635 |
|
|
|
Other current assets |
|
102,631 |
|
|
99,218 |
|
|
|
|
|
469,785 |
|
|
372,521 |
|
|
|
NON-CURRENT ASSETS |
|
|
|||||
|
Fixed assets, net |
|
2,691,699 |
|
|
2,721,494 |
|
|
|
Advances for vessels under construction |
|
194,738 |
|
|
190,736 |
|
|
|
Deferred charges, net |
|
31,461 |
|
|
25,554 |
|
|
|
Investments in affiliates |
|
1,675 |
|
|
- |
|
|
|
Other non-current assets |
|
91,964 |
|
|
89,923 |
|
|
|
|
|
3,011,537 |
|
|
3,027,707 |
|
|
|
TOTAL ASSETS |
$ |
3,481,322 |
|
$ |
3,400,228 |
|
|
|
|
|
|
|||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|||||
|
CURRENT LIABILITIES |
|
|
|||||
|
Long-term debt, current portion |
$ |
27,500 |
|
$ |
27,500 |
|
|
|
Long-term leaseback obligations, current portion |
|
65,594 |
|
|
27,469 |
|
|
|
Accounts payable, accrued liabilities & other current liabilities |
|
159,786 |
|
|
173,438 |
|
|
|
|
|
252,880 |
|
|
228,407 |
|
|
|
LONG-TERM LIABILITIES |
|
|
|||||
|
Long-term debt, net |
|
396,003 |
|
|
402,440 |
|
|
|
Long-term leaseback obligations, net |
|
- |
|
|
44,542 |
|
|
|
Other long-term liabilities |
|
142,202 |
|
|
164,425 |
|
|
|
|
|
538,205 |
|
|
611,407 |
|
|
|
|
|
|
|||||
|
STOCKHOLDERS’ EQUITY |
|
|
|||||
|
Common stock |
|
203 |
|
|
203 |
|
|
|
Additional paid-in capital |
|
745,914 |
|
|
748,109 |
|
|
|
Accumulated other comprehensive loss |
|
(73,130 |
) |
|
(74,209 |
) |
|
|
Retained earnings |
|
2,017,250 |
|
|
1,886,311 |
|
|
|
|
|
2,690,237 |
|
|
2,560,414 |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
3,481,322 |
|
$ |
3,400,228 |
|
|
DANAOS CORPORATION
Condensed Consolidated Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
|
Three months ended |
|
Three months ended |
|||||
|
March 31, |
|
March 31, |
|||||
|
|
2023 |
|
2022 |
||||
|
Operating Activities: |
|
|
|
||||
|
Net income |
$ |
146,201 |
|
|
$ |
331,465 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization of right-of-use assets |
|
31,529 |
|
|
|
33,359 |
|
|
Amortization of deferred drydocking & special survey costs, finance cost and debt discount |
|
4,528 |
|
|
|
6,091 |
|
|
Amortization of assumed time charters |
|
(6,536 |
) |
|
|
(16,651 |
) |
|
Prior service cost and periodic cost |
|
492 |
|
|
|
- |
|
|
Gain on investments |
|
- |
|
|
|
(99,539 |
) |
|
Gain on sale of vessels |
|
(1,639 |
) |
|
|
- |
|
|
Payments for drydocking/special survey |
|
(9,742 |
) |
|
|
(9,255 |
) |
|
Equity loss on investments |
|
2,588 |
|
|
|
- |
|
|
Amortization of deferred realized losses on cash flow interest rate swaps |
|
893 |
|
|
|
893 |
|
|
Stock based compensation |
|
- |
|
|
|
124 |
|
|
Accounts receivable |
|
(1,939 |
) |
|
|
(15 |
) |
|
Other assets, current and non-current |
|
(8,794 |
) |
|
|
(133,417 |
) |
|
Accounts payable and accrued liabilities |
|
(5,085 |
) |
|
|
5,641 |
|
|
Other liabilities, current and long-term |
|
(24,902 |
) |
|
|
768 |
|
|
Net Cash provided by Operating Activities |
|
127,594 |
|
|
|
119,464 |
|
|
|
|
|
|
||||
|
Investing Activities: |
|
|
|
||||
|
Vessel additions and advances for vessels under construction |
|
(5,736 |
) |
|
|
(2,043 |
) |
|
Proceeds and advances received from sale of vessels |
|
3,914 |
|
|
13,000 |
|
|
|
Investments in affiliates |
|
(4,263 |
) |
|
|
- |
|
|
Net Cash provided by/(used in) Investing Activities |
|
(6,085 |
) |
|
|
10,957 |
|
|
|
|
|
|
||||
|
Financing Activities: |
|
|
|
||||
|
Debt repayment |
|
(6,875 |
) |
|
|
(24,300 |
) |
|
Payments of leaseback obligations |
|
(6,629 |
) |
|
|
(16,293 |
) |
|
Dividends paid |
|
(15,262 |
) |
|
|
(15,535 |
) |
|
Repurchase of common stock |
|
(581 |
) |
|
|
- |
|
|
Payments of accumulated accrued interest |
|
- |
|
|
|
(1,435 |
) |
|
Finance costs |
|
(250 |
) |
|
|
(3,950 |
) |
|
Net Cash used in Financing Activities |
|
(29,597 |
) |
|
|
(61,513 |
) |
|
Net increase in cash, cash equivalents and restricted cash |
|
91,912 |
|
|
|
68,908 |
|
|
Cash, cash equivalents and restricted cash, beginning of period |
|
267,668 |
|
|
|
129,756 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
359,580 |
|
|
$ |
198,664 |
|
DANAOS CORPORATION
Reconciliation of Net Income to Adjusted EBITDA - Unaudited
(Expressed in thousands of United States dollars)
|
|
Three months ended |
|
Three months ended |
||||
|
March 31, |
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
|
Net income |
$ |
146,201 |
|
|
$ |
331,465 |
|
|
Depreciation and amortization of right-of-use assets |
|
31,529 |
|
|
|
33,359 |
|
|
Amortization of deferred drydocking & special survey costs |
|
3,835 |
|
|
|
2,720 |
|
|
Amortization of assumed time charters |
|
(6,536 |
) |
|
|
(16,651 |
) |
|
Amortization of deferred finance costs, debt discount and commitment fees |
|
1,451 |
|
|
|
3,371 |
|
|
Amortization of deferred realized losses on interest rate swaps |
|
893 |
|
|
|
893 |
|
|
Interest income |
|
(2,723 |
) |
|
|
(1 |
) |
|
Interest expense |
|
6,029 |
|
|
|
13,743 |
|
|
Income taxes |
|
- |
|
|
|
12,218 |
|
|
Gain on investments and dividend withholding taxes |
|
- |
|
|
(111,757 |
) |
|
|
Gain on sale of vessels |
|
(1,639 |
) |
|
- |
|
|
|
Stock based compensation |
|
- |
|
|
|
124 |
|
|
Adjusted EBITDA(1) |
$ |
179,040 |
|
|
$ |
269,484 |
|
|
(1) |
Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividend, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred finance costs, debt discount and commitment fees, amortization of deferred realized losses on interest rate swaps, gain/loss on investments, gain on sale of vessels and stock based compensation. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or “GAAP.” We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. |
|
|
Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income. |
||
|
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 31, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. |
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