This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Global Ship Lease Reports Results For The Second Quarter Of 2010

        Please dial in at least 10 minutes prior to 10:30 a.m. Eastern Time to ensure a prompt start to the call. 

   (2) Live Internet webcast and slide presentation: http://www.globalshiplease.com

If you are unable to participate at this time, a replay of the call will be available through Thursday, August 26, 2010 at (866) 932-5017 or (347) 366-9565. Enter the code 8030416 to access the audio replay. The webcast will also be archived on the Company's website: http://www.globalshiplease.com .

About Global Ship Lease

Global Ship Lease is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. 

Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010 of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately $77 million each, that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option.

Reconciliation of Non-U.S. GAAP Financial Measures

A. Adjusted Cash From Operations Adjusted cash from operations is a non-US GAAP measure and is reconciled to the financial information below. It represents net cash provided by operating activities adjusted for certain non-cash items such as deferred taxation. Movements in working capital -- changes in receivables and payables -- are also adjusted as these are essentially timing differences. We also deduct cash paid to settle derivatives and an allowance for the cost of future drydockings, which due to their substantial and periodic nature could otherwise distort quarterly adjusted cashflow. Adjusted cash from operations is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash. Adjusted cash from operations is not defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. We believe that adjusted cash from operations is a useful measure with which to assess the Company's operating performance as it adjusts for the effects of non-cash items and includes the effect of certain cash items.

ADJUSTED CASH FROM OPERATIONS - UNAUDITED
(thousands of U.S. dollars)
         
  Three months ended Jun 30, 2010 Three months ended Jun 30, 2009 Six months ended Jun 30, 2010 Six months ended Jun 30, 2009
         
Cash provided by operating activities 25,687 18,285 45,028 35,583
         
Adjust: Deferred taxation (80) (203) (159) (410)
   Movement in receivables (655) 506 (460) 123
   Movement in payables (3,643) (67) (870) 1,464
   Settlement of derivatives (3,935) (2,781) (8,330) (4,815)
  Allowance for future dry-docks (975) (900) (1,950) (1,800)
         
Adjusted cash from operations 16,399 14,840 33,259 30,145

B. Normalized net earnings Normalized net earnings is a non-US GAAP measure and is reconciled to the financial information below. It represents net earnings adjusted for the change in fair value of derivatives and the accelerated write off of a portion of deferred financing costs. Normalized net earnings is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net earnings for non-operating items such as change in fair value of derivatives to eliminate the effect of non cash non-operating items that do not affect operating performance or cash generated. Normalized net earnings is not defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. Normalized net earnings per share is calculated based on normalized net earnings and the weighted average number of shares in the relevant period.

NORMALIZED NET EARNINGS -- UNAUDITED
(thousands of U.S. dollars except share and per share data)
         
  Three months ended Jun 30, 2010 Three months ended Jun 30, 2009 Six months ended Jun 30, 2010 Six months ended Jun 30, 2009
         
         
         
Net (loss) income (4,954) 22,762 (1,672) 33,918
         
Adjust:    Change in value of derivatives 12,454 (16,652) 17,333 (20,961)
         
Normalized net earnings 7,500 6,110 15,661 12,957
         
Weighted average number of Class A and B common shares outstanding (1)        
       Basic 54,236,423 53,786,150 54,236,423 53,786,150
       Diluted 54,236,423 53,786,150 54,236,423 53,922,780
         
Net (loss) income per share on reported earnings        
        Basic (0.09) 0.42 (0.03) 0.63
        Diluted (0.09) 0.42 (0.03) 0.63
         
Normalized net income per share        
        Basic 0.14 0.11 0.29 0.24
        Diluted 0.14 0.11 0.29 0.24

(1) The weighted average number of shares (basic and diluted) for the three and six months ended June 30, 2010 and the three months ended June 30, 2009 excludes the effect of outstanding warrants and stock based incentives as these were antidilutive. For the six months ended June 30, 2009, the diluted weighted average number of shares includes the incremental effect of outstanding stock based incentive awards but excludes the effect of outstanding warrants as these were antidilutive.  Safe Harbor Statement This communication contains forward-looking statements. Forward-looking statements provide Global Ship Lease's current expectations or forecasts of future events. Forward-looking statements include statements about Global Ship Lease's expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "will" or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements are based on assumptions that may be incorrect, and Global Ship Lease cannot assure you that these projections included in these forward-looking statements will come to pass. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. The risks and uncertainties include, but are not limited to:

  • future operating or financial results;
  • expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
  • the financial condition of CMA CGM, our charterer and sole source of operating revenue, and its ability to pay charterhire in accordance with the charters;
  • Global Ship Lease's financial condition and liquidity, including its ability to obtain additional waivers which might be necessary under the existing credit facility or obtain additional financing to fund capital expenditures, contracted and yet to be contracted vessel acquisitions including the two newbuildings to be purchased from German interests in the fourth quarter of 2010, and other general corporate purposes;
  • Global Ship Lease's ability to meet its financial covenants and repay its credit facility;
  • Global Ship Lease's expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its credit facility;
  • future acquisitions, business strategy and expected capital spending;
  • operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance costs;
  • general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
  • assumptions regarding interest rates and inflation;
  • changes in the rate of growth of global and various regional economies;
  • risks incidental to vessel operation, including piracy, discharge of pollutants and vessel accidents and damage including total or constructive total loss;
  • estimated future capital expenditures needed to preserve its capital base;
  • Global Ship Lease's expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
  • Global Ship Lease's continued ability to enter into or renew long-term, fixed-rate charters;
  • the continued performance of existing long-term, fixed-rate time charters;
  • Global Ship Lease's ability to capitalize on its management team's and board of directors' relationships and reputations in the containership industry to its advantage;
  • changes in governmental and classification societies' rules and regulations or actions taken by regulatory authorities;
  • expectations about the availability of insurance on commercially reasonable terms;
  • unanticipated changes in laws and regulations including taxation;
  • potential liability from future litigation.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Global Ship Lease's actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in Global Ship Lease's filings with the SEC.  Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Global Ship Lease undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Global Ship Lease describes in the reports it will file from time to time with the SEC after the date of this communication.

Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements of Income
(Expressed in thousands of U.S. dollars except share data)
         
  Three months ended June 30, Six months ended June 30,
  2010 2009 2010 2009
         
         
Operating Revenues        
Time charter revenue $39,611 $36,193 $78,762 $71,201
                         
         
Operating Expenses        
Vessel operating expenses  10,156 10,508  19,748 21,231
Depreciation 9,984 8,986 19,855 17,772
General and administrative 2,084 2,445 3,919 4,581
Other operating income (51) (50) (603) (106)
                         
Total operating expenses 22,173 21,889 42,919 43,478
                         
         
Operating Income 17,438 14,304 35,843 27,723
         
Non Operating Income (Expense)        
Interest income 60 163 95 305
Interest expense (6,048) (5,554) (11,904) (10,208)
Realized and unrealized (loss) gain on interest rate derivatives (16,389) 13,872 (25,663) 16,146
                         
         
(Loss) Income before Income Taxes (4,939) 22,785 (1,629) 33,966
         
Income taxes (15) (23) (43) (48)
                       
Net (Loss) Income  $(4,954) $22,762 $(1,672) $33,918
                 
         
         
Earnings per Share        
         
Weighted average number of Class A common shares outstanding        
Basic 46,830,467 46,380,194 46,830,467 46,380,194
Diluted 46,830,467 46,380,194 46,830,467 46,516,824
         
Net income in $ per Class A common share         
Basic $(0.11) $0.42 $(0.04) $0.63
Diluted $(0.11) $0.42 $(0.04) $0.63
         
Weighted average number of Class B common shares outstanding        
 Basic and diluted  7,405,956  7,405,956  7,405,956  7,405,956
         
Net income in $ per Class B common share        
 Basic and diluted $ nil $0.42 $ nil $0.63
 
Global Ship Lease, Inc.
Interim Unaudited Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
     
     
     
  June 30, 2010 December 31, 2009
     
Assets    
     
Cash and cash equivalents $31,329 $30,810
Restricted cash 3,026 3,026
Accounts receivable 6,551 7,838
Prepaid expenses 1,241 685
Other receivables 724 613
Deferred tax 388 285
Deferred financing costs 903 903
         
Total current assets 44,162 44,160
         
     
Vessels in operation 942,689 961,708
Vessel deposits 16,541 16,243
Other fixed assets 15 9
Deferred tax 217 161
Deferred financing costs 4,626 5,077
         
Total non-current assets 964,088 983,198
         
Total Assets $1,008,250 $1,027,358
         
Liabilities and Stockholders' Equity    
     
Liabilities    
     
Intangible liability – charter agreements $2,119 $2,119
Current portion of long term debt 60,300 68,300
Accounts payable 3,010 3,502
Accrued expenses 5,795 4,589
Derivative instruments 13,784 15,971
         
Total current liabilities 85,008 94,481
         
     
Long term debt 492,841 519,892
Preferred shares 48,000 48,000
Intangible liability – charter agreements 23,229 24,288
Derivative instruments 32,663 13,142
         
Total long-term liabilities 596,733 605,322
         
     
Total Liabilities $681,741 $699,803
         
     
Stockholders' Equity    
     
Class A Common stock – authorized 214,000,000 shares with a $0.01 par value; 46,830,467 shares issued and outstanding $468 $467
Class B Common stock – authorized 20,000,000 shares with a $0.01 par value; 7,405,956 shares issued and outstanding  74 74
     
Additional paid in capital 350,944 350,319
Accumulated deficit (24,977) (23,305)
         
Total Stockholders' Equity 326,509 327,555
         
Total Liabilities and Stockholders' Equity $1,008,250 $1,027,358
         
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
         
  Three months ended June 30, Six months ended June 30,
  2010 2009 2010 2009
         
         
Cash Flows from Operating Activities        
Net income $(4,954) $22,762 $(1,672) $33,918
         
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities         
Depreciation  9,984 8,986 19,855 17,772
Amortization of deferred financing costs 225 251 451 625
Change in fair value of certain derivative instruments 12,454 (16,652) 17,333 (20,961)
Amortization of intangible liability (529) (311) (1,059) (622)
Settlements of hedges which do not qualify for hedge accounting 3,935 2,781 8,330 4,815
Share based compensation 315 863 626 1,579
Decrease (increase) in other receivables and other assets 655 (506) 460 (123)
Increase (decrease) in accounts payable and other liabilities 3,643 67 870 (1,464)
Costs relating to drydocks -- -- (164) --
Unrealized foreign exchange loss  (41) 44 (2) 44
                 
Net Cash Provided by Operating Activities  25,687 18,285 45,028 35,583
                 
Cash Flows from Investing Activities         
Settlements of hedges which do not qualify for hedge accounting (3,935) (2,781) (8,330) (4,815)
Cash paid for purchases of vessels, vessel prepayments and vessel deposits (820) (154) (1,128) (734)
                 
Net Cash Used in Investing Activities  (4,755) (2,935) (9,458) (5,549)
                 
Cash Flows from Financing Activities         
Repayments of debt (30,959) -- (35,051) --
Issuance costs of debt -- -- -- (3,293)
Dividend payments  -- -- -- (12,371)
                 
Net Cash Used in Financing Activities  (30,959) -- (35,051) (15,664)
                 
Net (Decrease) Increase in Cash and Cash Equivalents (10,027) 15,350 519 14,370
Cash and Cash Equivalents at start of Period 41,356 25,383 30,810 26,363
                 
Cash and Cash Equivalents at end of Period $31,329 $40,733 $31,329 $40,733
                 
         
Supplemental information        
         
Non cash investing and financing activities        
         
Total interest paid  $4,776 $4,968 $10,568 $8,733
         
Income tax paid  $14 $77 $14 $77
                 
CONTACT:  The IGB Group
          Investor and Media Contact: 
          Michael Cimini
          212-477-8261

8 of 8

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,740.90 -139.46 -0.83%
S&P 500 1,960.37 -9.70 -0.49%
NASDAQ 4,421.3320 -41.57 -0.93%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs