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Navigator Holdings Ltd. Preliminary Third Quarter 2017 Results

LONDON, Nov. 8, 2017 /PRNewswire/ --

Highlights

  • Navigator Holdings Ltd. (NYSE: NVGS) (the "Company") reported operating revenue of $70.2 million for the three months ended September 30, 2017.
  • EBITDA(1) was $27.1 million for the three months ended September 30, 2017.
  • Earnings were a net loss of $1.1 million for the three months ended September 30, 2017, or $0.02 loss per share.
  • Took delivery of Navigator Jorf, a 38,000 cbm fully-refrigerated vessel from HMD on July 20, 2017. The vessel commenced a ten year time charter on August 22, 2017.
  • Earlier today, we took delivery of Navigator Prominence, a 37,300 cubic meter semi-refrigerated gas carrier and our final newbuilding. We drew down $51.2 million from a bank loan facility to partially finance the delivery installment.
  • We continue to see strong demand for the proposed ethylene marine export terminal on the Houston Ship Channel, the proposed joint venture with Enterprise Product Partners L.P. announced in July.

Charter revenue from spot voyages remained significantly focused on the petrochemical sector, with the transportation of petrochemicals accounting for 96% of our spot revenue for the three months ended September 30, 2017. Typically, the summer months offer fewer opportunities in the LPG freight markets as was the case during the summer of 2017, which reflect a continuing lack of LPG and petrochemical arbitrage between producing and consuming areas. Our charter rates achieved during the quarter reflect a premium to those available to the general market as a result of our strategic positioning of seeking a mixed portfolio of customers and charter durations across the gas spectrum of LPG, petrochemicals and ammonia.

We delivered our first 38,000 cbm fully-refrigerated ammonia carrier to our partner, Office Cherifien des Phosphates ("OCP") on August 22, 2017, commencing a ten year time charter facilitating the transportation of ammonia from Europe and the U.S. to Morocco. We are also now discussing charter and contract of affreightment renewals with a number of charterers for at least eight vessels with contracts maturing over the coming months.

1 EBITDA is a non-GAAP financial measures. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. Management believes that EBITDA is useful to investors in evaluating the operating performance of the Company. EBITDA does not represent and should not be considered as an alternative to any financial measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. See the table below for a reconciliation of EBITDA to net income, our most directly comparable financial measure calculated accordance with U.S. GAAP.

Reconciliation of Non-GAAP Financial Measures

The following table sets forth a reconciliation of net income to EBITDA for the three months ended September 30, 2017:




$'000's

Net loss

$ (1,093)

Interest expense

9,426

Interest income

(139)

Income taxes

102

Depreciation and amortization

18,787

EBITDA

$ 27,083



A Form 6-K with more detailed information on our third quarter 2017 financial results is being filed with the U.S. Securities and Exchange Commission simultaneous with this release for the quarter ended September 30, 2017.

Conference Call Details:

Tomorrow, Thursday, November 9, 2017, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111 (US Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Navigator" to the operator.

There will also be a live, and then archived, webcast of the conference call, available through the Company's website (www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A telephonic replay of the conference call will be available until Thursday, November 16, 2017 by dialing 1(866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 11870348#

Navigator Gas

About Us

Navigator Gas is the owner and operator of the world's largest fleet of handysize liquefied gas carriers and provides international and regional seaborne transportation services of liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers.

FORWARD LOOKING STATEMENTS

Statements included in this press release concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast, contain forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue," or the negative of these terms or other comparable terminology. These risks and uncertainties include, but are not limited to:

  • future operating or financial results;
  • pending acquisitions, business strategy and expected capital spending;
  • operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs;
  • fluctuations in currencies and interest rates;
  • general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;
  • our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;
  • estimated future capital expenditures needed to preserve our capital base;
  • our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;
  • our continued ability to enter into long-term, fixed-rate time charters with our customers;
  • changes in governmental rules and regulations or actions taken by regulatory authorities;
  • potential liability from future litigation;
  • our expectations relating to the payment of dividends;
  • our expectation regarding providing in-house technical management for certain vessels in our fleet and our success in providing such in-house technical management;
  • our ability to enter into a definitive agreement with Enterprise regarding the proposed joint development of an ethylene marine export terminal on the Houston Ship Channel, our expectations regarding the ability to obtain sufficient long-term customer commitments for such terminal, our expectations regarding financing of our proposed investment in such terminal and our expectations regarding the financial success of such terminal; and
  • other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.

We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.

Navigator Holdings Ltd.

Consolidated Balance Sheets

(Unaudited)



December 31,
2016

September 30,
2017


(in thousands except share data)

Assets



Current assets



Cash and cash equivalents

$ 57,272

$ 35,138

Short-term investments

25,000

Accounts receivable, net

7,059

17,149

Accrued income

13,134

10,250

Prepaid expenses and other current assets

8,541

11,552

Bunkers and lubricant oils

6,937

7,507

Insurance recoverable

855

370

Total current assets

93,798

106,966




Non-current assets



Vessels in operation, net

1,480,359

1,673,139

Vessels under construction

150,492

28,591

Property, plant and equipment, net

194

1,605

Total non-current assets

1,631,045

1,703,335

Total assets

$ 1,724,843

$ 1,810,301




Liabilities and stockholders' equity



Current liabilities



Current portion of long-term debt, net of deferred financing costs

$ 78,464

$ 85,011

Senior unsecured bond

25,000

Accounts payable

6,388

8,057

Accrued expenses and other liabilities

11,377

11,208

Accrued interest

2,932

1,577

Deferred income

3,522

1,432

Total current liabilities

127,683

107,285

Non-current liabilities



Secured term loan facilities, net of current portion and deferred financing costs

540,680

641,266

Senior unsecured bond

100,000

100,000

Total non-current liabilities

640,680

741,266

Total liabilities

768,363

848,551

Commitments and contingencies (see note 9)



Stockholders' equity



Common stock—$.01 par value; 400,000,000 shares authorized;
55,531,831 shares issued and outstanding, (2016: 55,436,087

554

555

Additional paid-in capital

588,024

589,142

Accumulated other comprehensive loss

(287)

(35)

Retained earnings

368,189

372,088

Total stockholders' equity

956,480

961,750

Total liabilities and stockholders' equity

$ 1,724,843

$ 1,810,301




Navigator Holdings Ltd.

Consolidated Statements of Income

(Unaudited)



Three months ended
September 30,

(in thousands except share data)

Nine months ended
September 30,

(in thousands except share data)


2016

2017

2016

2017

Revenues





Operating revenue

$ 69,741

$ 70,211

$ 218,657

$ 221,911











Expenses





Brokerage commissions

1,372

1,191

4,382

4,105

Voyage expenses

11,869

12,246

28,287

40,761

Vessel operating expenses

22,126

25,106

68,243

74,012

Depreciation and amortization

15,804

18,787

45,655

54,725

General and administrative costs

3,120

3,932

9,180

10,262

Other corporate expenses

377

653

1,610

1,605

Write off of insurance claim receivable

504

504

Total operating expenses

55,172

61,915

157,861

185,470






Operating income

14,569

8,296

60,796

36,441






Other income/(expense)





Interest expense

(7,957)

(9,426)

(23,442)

(27,724)

Write off of deferred financing costs

(1,281)

Write off of call premium and redemption charges on 9% unsecured bond

(3,517)

Interest income

71

139

240

371

Income/(Loss) before income taxes

6,683

(991)

37,594

4,290

Income taxes

(207)

(102)

(602)

(391)

Net income/(Loss

$ 6,476

$ (1,093)

$ 36,992

$ 3,899

Earnings/(Loss) per share:





Basic

$ 0.12

$ (0.02)

$ 0.67

$ 0.07

Diluted

$ 0.12

$ (0.02)

$ 0.66

$ 0.07

Weighted average number of shares outstanding:





Basic

55,437,695

55,531,831

55,413,855

55,531,831

Diluted

55,812,935

55,905,571

55,790,240

55,877,163






Navigator Holdings Ltd.

Consolidated Statements of Cash Flows

(Unaudited)




Nine Months ended
September 30,
2016

Nine Months ended
September 30,
2017


(in thousands)

(in thousands)

Cash flows from operating activities



Net income

$ 36,992

$ 3,899




Adjustments to reconcile net income to net cash provided by operating activities



Depreciation and amortization

45,655

54,725

Payment of drydocking costs

(9,729)

(401)

Insurance claim debtor

167

Call option premium on redemption of 9.00% unsecured bond

2,500

Prior year expenses recovered in insurance claim

(504)

Amortization of share-based compensation

1,186

1,117

Amortization of deferred financing costs

2,233

3,107

Unrealized foreign exchange

84

243




Changes in operating assets and liabilities



Accounts receivable

(1,586)

(10,090)

Bunkers and lubricant oils

(3,269)

(570)

Accrued income and prepaid expenses and other current assets

(5,009)

(125)

Accounts payable, accrued interest and other liabilities

(7,970 )

(1,946 )

Net cash provided by operating activities

58,754

51,955




Cash flows from investing activities



Payment to acquire vessels

(1,372)

(1,112)

Payment for vessels under construction

(158,403)

(124,149)

Purchase of other property, plant and equipment

(42)

(1,623)

Receipt of shipyard penalty payments

417

280

Insurance recoveries

4,700

990

Capitalized costs for the repairs of Navigator Aries

(8,732)

Placement of short term investment

(25,000)

Net cash used in investing activities

(163,432)

(150,614)

Cash flows from financing activities



Proceeds from secured term loan facilities

116,970

333,983

Issuance of 7.75% senior unsecured bonds

100,000

Repayment of 9.00% senior unsecured bonds

(127,500)

Issuance costs of 7.75% senior unsecured bonds

(1,819)

Direct financing costs of senior term loan facilities

(155)

(2,054)

Repayment of secured term loan facilities

(50,069)

(226,085)

Net cash provided by financing activities

66,746

76,525

Net decrease in cash and cash equivalents

(37,932)

(22,134)

Cash and cash equivalents at beginning of period

87,779

57,272

Cash and cash equivalents at end of period

$ 49,847

$ 35,138




Supplemental Information



Total interest paid during the period, net of amounts capitalized

$ 21,997

$ 22,108

Total tax paid during the period

$ 454

$ 428




Attention: Investor Relations
New York: 650 Madison Ave, 25th Floor, New York, NY 10022. Tel: +1-212-355-5893
London: 10 Bressenden Place, London, SW1E 5DH. Tel: +44(0)20-7340-4850

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SOURCE Navigator Gas