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Eagle Bulk Shipping Inc. Reports Second Quarter 2012 Results

Stocks in this article: EGLE

The following table summarizes the Company's selected consolidated financial and other data for the periods indicated below.

         
CONSOLIDATED STATEMENT OF OPERATIONS
     
  Three Months Ended Six Months Ended
  June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
         
Revenues, net of commissions  $48,537,233 $76,405,388 $101,153,633 $163,098,163
         
Voyage expenses  6,888,920 8,125,284 13,890,624 23,946,796
Vessel expenses  23,869,262 21,289,772 46,311,324 40,763,171
Charter hire expenses  11,029,811 606,573 26,954,493
Depreciation and amortization  19,427,957 17,640,372 38,861,314 34,799,216
General and administrative expenses  9,419,220 8,038,757 20,053,880 21,935,182
 Total operating expenses  59,605,359 66,123,996 119,723,715 148,398,858
         
         
Operating income (loss)  (11,068,126) 10,281,392 (18,570,082) 14,699,305
         
Interest expense  12,053,342 11,672,428 23,014,252 23,008,907
Interest income  (8,153) (29,464) (16,191) (87,134)
Other (Income) expense  (7,076) 76,706 (1,028,375) (973,909)
 Total other expense, net  12,038,113 11,719,670 21,969,686 21,947,864
         
Net loss  $(23,106,239) $(1,438,278) $(40,539,768) $(7,248,559)
         
Weighted average shares outstanding* :        
Basic  15,880,392 15,642,830 15,815,594 15,641,477
Diluted  15,880,392 15,642,830 15,815,594 15,641,477
         
Per share amounts:
Basic net loss  $(1.46) $(0.09) $(2.56) $(0.46)
Diluted net loss  $(1.46) $(0.09) $(2.56) $(0.46)
         
*Adjusted to give effect to the 1 for 4 reverse stock split that became effective on May 22, 2012.
Fleet Operating Data        
         
  Three Months Ended Six Months Ended 
  June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
         
Ownership Days 4,095 3,682 8,190 7,230
Chartered-in under operating lease Days -- 629 32 1,658
Available Days 4,081 4,290 8,175 8,847
Operating Days 4,062 4,268 8,103 8,779
Fleet Utilization 99.5% 99.5% 99.1% 99.2%
     
CONSOLIDATED BALANCE SHEETS
     
   June 30, 2012 (unaudited) December 31, 2011
ASSETS:    
Current assets:    
Cash and cash equivalents  $17,148,510 $25,075,203
Accounts receivable, net  10,250,226 13,960,777
Prepaid expenses  5,048,180 3,969,905
Inventories  12,581,899 11,083,331
Investment  227,354 988,196
Fair value above contract value of time charters acquired  557,881 567,315
Fair value of derivative instruments  246,110
 Total current assets  45,814,050 55,890,837
Noncurrent assets:    
Vessels and vessel improvements, at cost, net of accumulated depreciation of $276,929,765 and $239,568,767, respectively  1,752,078,568 1,789,381,046
Other fixed assets, net of accumulated amortization of $420,668 and $324,691, respectively  519,683 605,519
Restricted cash  291,891 670,418
Deferred drydock costs  3,067,188 3,303,363
Deferred financing costs  28,321,603 11,766,779
Fair value above contract value of time charters acquired  2,766,769 3,041,496
Other assets  2,292,075 2,597,270
 Total noncurrent assets  1,789,337,777 1,811,365,891
Total assets $1,835,151,827 $1,867,256,728
     
LIABILITIES & STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable  $6,629,148 $10,642,831
Accrued interest  3,067,461 2,815,665
Other accrued liabilities  17,652,035 11,822,582
Current portion of long-term debt  32,094,006
Deferred revenue and fair value below contract value of time charters acquired  4,637,875 5,966,698
Unearned charter hire revenue  4,086,738 5,779,928
 Total current liabilities  36,073,257 69,121,710
Noncurrent liabilities:    
Long-term debt  1,130,186,429 1,097,384,735
Deferred revenue and fair value below contract value of time charters acquired  15,386,221 17,088,464
Fair value of derivative instruments  6,223,622 9,486,116
 Total noncurrent liabilities  1,151,796,272 1,123,959,315
Total liabilities 1,187,869,529 1,193,081,025
Commitment and contingencies    
Stockholders' equity:    
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued 
Common stock, $.01 par value, 100,000,000 shares authorized, 15,771,496 shares issued and outstanding*   157,715  157,508
Additional paid‑in capital*  757,090,198 745,945,694
 Retained earnings (net of dividends declared of $262,118,388 as of June 30, 2012 and December 31, 2011, respectively)  (103,014,254) (62,474,486)
Accumulated other comprehensive loss  (6,951,361) (9,453,013)
 Total stockholders' equity  647,282,298 674,175,703
Total liabilities and stockholders' equity $1,835,151,827 $1,867,256,728
     
*Adjusted to give effect to the 1 for 4 reverse stock split that became effective on May 22, 2012.
     
CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  Six Months Ended
  June 30, 2012 June 30, 2011
Cash flows from operating activities:    
Net loss  $(40,539,768) $(7,248,559)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Items included in net loss not affecting cash flows:    
Depreciation  37,456,975 33,055,698
Amortization of deferred drydocking costs  1,404,339 1,743,518
Amortization of deferred financing costs  2,332,293 1,918,410
Amortization of fair value below contract value of time charter acquired  (2,434,040) (2,566,329)
Payment-in-kind interest on debt  707,688
Unrealized gain from forward freight agreements, net  246,110 308,578
Allowance for accounts receivable  5,339,080 6,586,900
Non‑cash compensation expense  4,881,924 4,939,137
Drydocking expenditures  (1,168,164) (1,284,121)
Changes in operating assets and liabilities:    
Accounts receivable  (1,628,529) (11,473,011)
Other assets  305,195 (635,571)
Prepaid expenses  (1,078,275) 931,577
Inventories  (1,498,568) (5,339,055)
Accounts payable  (4,013,683) 2,373,987
Accrued interest  251,796 (2,339,449)
Accrued expenses  (21,678) 4,433,934
Deferred revenue  (312,865) 138,722
Unearned revenue  (1,693,190) 901,124
Net cash (used in) provided by operating activities (1,463,360) 26,445,490
     
 Cash flows from investing activities:    
Vessels and vessel improvements and advances for vessel construction  (58,520) (100,369,716)
Purchase of other fixed assets  (10,141) (198,732)
Changes in restricted cash  378,527 (1,157,481)
Net cash provided by (used in) investing activities 309,866 (101,725,929)
     
Cash flows from financing activities:    
Changes in restricted cash  (1,500,000)
Deferred financing costs  (6,773,199)
Cash used to settle net share equity awards (1,210,177)
Net cash used in financing activities (6,773,199) (2,710,177)
     
Net decrease in cash  (7,926,693) (77,990,616)
Cash at beginning of period  25,075,203 129,121,680
Cash at end of period $17,148,510 $51,131,064
     

The following table represents certain information about our revenue earning charters on our operating fleet as of June 30, 2012:

         
Vessel Year Built Dwt Charter Expiration (1) Daily Charter Hire Rate
         
Avocet (2) 2010 53,462 Jul 2012 Voyage(3)
         
Bittern (2) 2009 57,809 Jul 2012  $11,990(3) 
         
Canary (2) 2009 57,809 Aug 2012 to Nov 2012 $12,000  
         
Cardinal 2004 55,362 Nov 2012 to Feb 2013 Index(4)
         
Condor 2001 50,296  Jul 2012  $7,000(3) 
         
Crane (2) 2010 57,809  Jul 2012  $7,000(3) 
         
Crested Eagle 2009 55,989 Aug 2012 to Oct 2012   $12,000(3) 
         
Crowned Eagle 2008 55,940 Aug 2012 to Oct 2012  $14,000
         
Egret Bulker 2010 57,809 Oct 2012 to Feb 2013 $17,650(5) (with 50%
        profit share over $20,000)
         
Falcon 2001 50,296 Aug 2012  $10,550(3) 
         
Gannet Bulker 2010 57,809 Jan 2013 to May 2013 $17,650(5) (with 50%
        profit share over $20,000)
         
Golden Eagle 2010 55,989 Jul 2012  $7,500
         
Goldeneye 2002 52,421 Oct 2012 to Jan 2013 Index(4)
         
Grebe Bulker 2010 57,809 Feb 2013 to Jun 2013 $17,650(5) (with 50%
        profit share over $20,000)
         
Harrier 2001 50,296 Jul 2012   $6,500(3) 
         
Hawk I 2001 50,296 Jul 2012  Spot(3)
         
Ibis Bulker 2010 57,775 Mar 2013 to Jul 2013 $17,650(5) (with 50%
        profit share over $20,000)
         
Imperial Eagle 2010 55,989 Nov 2012 to Feb 2013 Index(4)
         
Jaeger 2004 52,248 Nov 2012 to Jan 2013 Index(4)
         
Jay(2) 2010 57,802 Jul 2012  $6,750(3) 
         
Kestrel I 2004 50,326 Jul 2012 to Aug 2012  Index(4)
         
 Kingfisher (2) 2010 57,776 Aug 2012 to Nov 2012 $12,500
         
Kite 1997 47,195 Aug 2012 to Nov 2012 $7,250
         
Kittiwake 2002 53,146 Jul 2012 Spot(3)
         
Martin(2) 2010 57,809 Jul 2012  $10,500(3)
         
Merlin 2001 50,296 Jul 2012 to Aug 2012 Voyage(3)
         
Nighthawk(2) 2011 57,809 Aug 2012  $10,000(3)
         
Oriole(2) 2011 57,809 Aug 2012 $12,250(3)
         
Osprey I 2002 50,206 Jul 2012 to Aug 2012  $10,000(3)
         
Owl(2) 2011 50,809 Jul 2012 Voyage(3)
         
Peregrine 2001 50,913 Jul 2012  $7,000(3)
         
Petrel Bulker 2011 57,809 May 2014 to Sep 2014 $17,650(5) (with 50%
        profit share over $20,000)
         
Puffin Bulker 2011 57,809 May 2014 to Sep 2014 $17,650(5) (with 50%
        profit share over $20,000)
         
Redwing 2007 53,411 Aug 2012  $5,000(3)
         
Roadrunner Bulker 2011 57,809 Aug 2014 to Dec 2014 $17,650(5) (with 50%
        profit share over $20,000)
         
Sandpiper Bulker 2011 57,809 Aug 2014 to Dec 2014 $17,650(5) (with 50%
        profit share over $20,000)
         
Shrike 2003 53,343 Dec 2012 to Mar 2013  $11,300(3)
         
Skua 2003 53,350 Aug 2012  $10,500(3)
         
Sparrow 2000 48,225 Jul 2012  $10,000(3)
         
Stellar Eagle 2009 55,989 Mar 2013 to Jun 2013 Index(4)
         
Tern 2003 50,200 Jul 2012 to Oct 2012  $10,000(3)
         
Thrasher (2) 2010 53,360 Jul 2012 to Aug 2012  $10,000(3)
         
Thrush 2011 53,297 Jul 2012 $7,000(3)
         
 Woodstar (2) 2008 53,390 Jul 2012  $8,000(3)
         
Wren (2) 2008 53,349 Jul 2012  $7,000(3)
         
(1) The date range provided represents the earliest and latest date on which the charterer may redeliver the vessel to the Company upon the termination of the charter. The time charter hire rates presented are gross daily charter rates before brokerage commissions, ranging from 0.625% to 6.25%, to third party ship brokers.
(2) The charter rate does not include any shortfall between the vessels' actual daily earnings and the $17,000 per day for which KLC is responsible. Revenue from KLC will be recognized when collectability is assured. In addition, through December 2015, we are entitled to100% of the profits on earnings between $17,000 to $21,000 per day and a 50% profit share on earnings above $17,000 per day from January 2016 to December 2018. 
(3) Upon conclusion of the previous charter, the vessel will commence a short-term charter for up to six months.
(4) Index, an average of the trailing Baltic Supramax Index.
(5) The charterer has an option to extend the charter by two periods of 11 to 13 months each.

Glossary of Terms:

Ownership days: The Company defines ownership days as the aggregate number of days in a period during which each vessel in its fleet has been owned. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that is recorded during a period.

Chartered-in under operating lease days: The Company defines chartered-in under operating lease days as the aggregate number of days in a period during which the Company chartered-in vessels.

Available days: The Company defines available days as the number of ownership days less the aggregate number of days that its vessels are off-hire due to vessel familiarization upon acquisition, scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

Operating days: The Company defines operating days as the number of its available days in a period less the aggregate number of days that the 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 : The Company calculates fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. Our fleet continues to perform at very high utilization rates.

Conference Call Information

As previously announced, members of Eagle Bulk's senior management team will host a teleconference and webcast at 8:30 a.m. ET on Thursday, August 9th to discuss the results.

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