Costamare Inc. Reports Results for the First Quarter Ended March 31, 2019
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MONACO, April 22, 2019 (GLOBE NEWSWIRE) -- Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the first quarter ended March 31, 2019.
- Adjusted Net Income available to common stockholders(1) of $13.6 million or $0.12 per share for the three-months ended March 31, 2019.
- Declared dividend of $0.10 per share on its common stock and dividends on all four classes of its preferred stock.
- Chartered in total 10 vessels over the quarter, with rates for Post-Panamax containerships (above 5,500 TEUs) posting substantial increases compared to their prior fixtures.
- Fully repaid the outstanding loan on the 1997-built, 7,403 TEU container vessel Kokura increasing the number of unencumbered vessels to seven.
- Agreed to install scrubbers on five Post Panamax container vessels of 14,424 TEU capacity each.
- Sold for demolition the 2004-built, 4,992 TEU container vessel Piraeus and the 1991-built, 2,020 TEU container vessel MSC Pylos.
(1) Adjusted Net Income available to common stockholders is a non-GAAP measure and should not be used in isolation or as a substitute for Costamare’s financial results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). For the definition and reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.
New Business Developments
A. New charter agreements
- The Company has chartered in total 10 vessels over the quarter. More specifically, the Company:
I. Vessels above 5,500 TEUs capacity (Post – Panamax)
- Agreed to charter the 2017-built, 11,010 TEU containership Cape Tainaro with ZIM for a period of 10 to 12.5 months at charterers’ option, starting from May 1, 2019, at a daily rate of $39,500. The daily rate of the previous fixture was $28,250.
- Agreed to charter the 2010-built, 8,531 TEU containership Navarino with Evergreen for a period starting from March 21, 2019 and expiring at charterers’ option during the period from February 14, 2020 to March 14, 2020, at a daily rate of $21,900. The daily rate of the previous fixture was $17,400.
- Agreed to extend the charter of the 2000-built, 6,648 TEU containership Maersk Kobe with Maersk for a period starting from May 15, 2019 and expiring at charterers’ option during the period from April 1, 2020 to June 30, 2020, at a daily rate of $17,000. The daily rate of the previous fixture was $16,000.
- Agreed to charter the 1997-built, 7,403 TEU containership Kokura with Maersk for a period of 50 to 75 days at charterers’ option, starting from February 7, 2019, at a daily rate of $12,000 and subsequently agreed to extend the charter with the same charterer for a period starting from April 15, 2019 and expiring at charterers’ option during the period from February 15, 2020 to May 1, 2020, at a daily rate of $17,050. The daily rate of the previous fixture was $11,000.
- Agreed to extend the charter of the 2001-built, 5,576 TEU containership Ensenada with ONE for a period starting from April 20, 2019 and expiring at charterers’ option during the period from September 1, 2019 to October 30, 2019, at a daily rate of $14,250. The daily rate of the previous fixture was $9,150.
II. Vessels below 5,500 TEUs capacity
- Agreed to extend the charter of the 1997-built, 2,458 TEU containership Messini with Evergreen for a period of 4 to 7 months at charterers’ option, starting from February 3, 2019, at a daily rate of $8,100.
- Agreed to extend the charter of the 2000-built, 2,474 TEU containership Areopolis with Evergreen for a period of 4 to 7 months at charterers’ option, starting from February 21, 2019, at a daily rate of $8,100.
- Agreed to extend the charter of the 2005-built, 2,556 TEU containership CMA CGM L’Etoile with CMA CGM for a period of 1 to 3 months at charterers’ option, starting from March 22, 2019, at a daily rate of $10,550.
- Agreed to charter the 2004-built, 2,586 TEU containership Lakonia with Evergreen for a period of 1 to 3 months at charterers’ option, starting from March 16, 2019, at a daily rate of $7,950.
- Agreed to extend the charter of the 1995-built, 1,162 TEU containership Zagora with MSC for a period of 11 to 13 months at charterers’ option, starting from June 1, 2019, at a daily rate of $6,500.
B. Vessel disposals
- In March 2019, we sold for demolition the 2004-built, 4,992 TEU container vessel Piraeus and the 1991-built, 2,020 TEU container vessel MSC Pylos.
C. Dividend announcements
- On April 1, 2019, we declared a dividend for the quarter ended March 31, 2019, of $0.10 per share on our common stock, payable on May 8, 2019, to stockholders of record of common stock as of April 22, 2019.
- On April 1, 2019, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, a dividend of $0.531250 per share on our Series C Preferred Stock, a dividend of $0.546875 per share on our Series D Preferred Stock and a dividend of $0.554688 per share on our Series E Preferred Stock, which were all paid on April 15, 2019 to holders of record as of April 12, 2019.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
“During the first quarter of the year the Company delivered solid results.
The larger vessels continue to benefit from strong fundamentals with low supply and strong demand.
The number of idle ships has fallen across all vessel segments as liner companies launch new services.
We have been active during the quarter and we have chartered in total 10 ships, benefiting from a rising market in the larger asset classes.
We have 15 post panamax ships opening over the next year which positions us favorably, should market momentum continue.”
Financial Summary
| Three-month period ended March 31, | |||
| (Expressed in thousands of U.S. dollars, except share and per share data): | 2018 | 2019 | |
| Voyage revenue | $92,754 | $112,974 | |
| Accrued charter revenue (1) | $(2,564) | $(1,849) | |
| Amortization of time-charter assumed | - | $47 | |
| Voyage revenue adjusted on a cash basis (2) | $90,190 | $111,172 | |
| Adjusted Net Income available to common stockholders (3) | $13,366 | $13,580 | |
| Weighted Average number of shares | 108,802,614 | 113,035,525 | |
| Adjusted Earnings per share (3) | $0.12 | $0.12 | |
| Net Income / (Loss) | $19,167 | $(1,654) | |
| Net Income / (Loss) available to common stockholders | $12,289 | $(9,297) | |
| Weighted Average number of shares | 108,802,614 | 113,035,525 | |
| Earnings / (Losses) per share | $0.11 | $(0.08) | |
(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period and during the last years of such charter cash received will exceed revenue recognized on a straight-line basis.
(2) Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash “Accrued charter revenue” recorded under charters with escalating charter rates. However, Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the “Fleet List” below.
(3) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are non-GAAP measures. Refer to the reconciliation of Net Income / (Loss) to Adjusted Net Income.
Non-GAAP Measures
The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures 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. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 31, 2019 and 2018. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.
Exhibit I
Reconciliation of Net Income / (Loss) to Adjusted Net Income available to common stockholders and Adjusted Earnings per Share
| Three-month period ended March 31, | ||||||
| (Expressed in thousands of U.S. dollars, except share and per share data) | 2018 | 2019 | ||||
| Net Income / (Loss) | $ | 19,167 | $ | (1,654) | ||
| Earnings allocated to Preferred Stock | (6,878) | (7,643) | ||||
| Net Income / (Loss) available to common stockholders | 12,289 | (9,297) | ||||
| Accrued charter revenue | (2,564) | (1,849) | ||||
| General and administrative expenses – non-cash component | 934 | 778 | ||||
| Amortization of prepaid lease rentals, net | 2,009 | 2,009 | ||||
| Amortization of Time charter assumed | - | 47 | ||||
| Realized (Gain) / loss on Euro/USD forward contracts (1) | (255) | 96 | ||||
| Loss on sale / disposal of vessels | - | 18,420 | ||||
| Vessels’ impairment loss | - | 3,042 | ||||
| Swaps’ breakage costs | 1,234 | - | ||||
| (Gain) / loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) | (281) | 334 | ||||
| Adjusted Net Income available to common stockholders | $ | 13,366 | $ | 13,580 | ||
| Adjusted Earnings per Share | $ | 0.12 | $ | 0.12 | ||
| Weighted average number of shares | 108,802,614 | 113,035,525 | ||||
Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income / (Loss ) after earnings allocated to preferred stock, but before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized (gain) / loss on Euro/USD forward contracts, vessels’ impairment loss, loss on sale / disposal of vessels, swaps’ breakage costs, non-cash general and administrative expenses and non-cash other items, amortization of prepaid lease rentals, amortization of time charter assumed, net and non-cash changes in fair value of derivatives. “Accrued charter revenue” is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are not recognized measurements under U.S. GAAP. We believe that the presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net Income available to common stockholders and Adjusted Earnings per Share, 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 Net Income available to common stockholders and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
(1) Items to consider for comparability include gains and charges. Gains positively impacting Net Income / (Loss) available to common stockholders are reflected as deductions to Adjusted Net Income available to common stockholders. Charges negatively impacting Net Income / (Loss) available to common stockholders are reflected as increases to Adjusted Net Income available to common stockholders.
Financial Report
Results of Operations
Three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018
During the three-month periods ended March 31, 2019 and 2018, we had an average of 61.9 and 53.0 vessels, respectively, in our fleet. In the three-month period ended March 31, 2019, we sold the container vessels MSC Pylos and Piraeus with an aggregate capacity of 7,012 TEU. In the three-month periods ended March 31, 2019 and 2018, our fleet ownership days totaled 5,575 and 4,770 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.
| (Expressed in millions of U.S. dollars, | Three-month period ended March 31, | Percentage | ||||||||||
| except percentages) | 2018 | 2019 | Change | Change | ||||||||
| Voyage revenue | $ | 92.8 | $ | 113.0 | $ | 20.2 | 21.8 | % | ||||
| Voyage expenses | (1.1) | (1.8) | 0.7 | 63.6 | % | |||||||
| Voyage expenses – related parties | (0.8) | (1.0) | 0.2 | 25.0 | % | |||||||
| Vessels’ operating expenses | (26.1) | (30.0) | 3.9 | 14.9 | % | |||||||
| General and administrative expenses | (1.5) | (1.3) | (0.2) | (13.3 | %) | |||||||
| Management fees – related parties | (4.7) | (5.5) | 0.8 | 17.0 | % | |||||||
| General and administrative expenses - non-cash component | (0.9) | (0.8) | (0.1) | (11.1 | %) | |||||||
| Amortization of dry-docking and special survey costs | (1.5) | (2.3) | 0.8 | 53.3 | % | |||||||
| Depreciation | (22.8) | (27.9) | 5.1 | 22.4 | % | |||||||
| Amortization of prepaid lease rentals, net | (2.0) | (2.0) | - | - | ||||||||
| Loss on sale / disposal of vessels | - | (18.4) | 18.4 | n.m. | ||||||||
| Vessels’ impairment loss | - | (3.0) | 3.0 | n.m. | ||||||||
| Foreign exchange gains | 0.1 | - | (0.1) | n.m. | ||||||||
| Interest income | 1.0 | 0.8 | (0.2) | (20.0 | %) | |||||||
| Interest and finance costs | (14.6) | (22.9) | 8.3 | 56.8 | % | |||||||
| Swaps’ breakage costs | (1.2) | - | (1.2) | n.m. | ||||||||
| Equity gain on investments | 2.3 | 1.7 | (0.6) | (26.1 | %) | |||||||
| Other | 0.1 | - | (0.1) | n.m. | ||||||||
| Gain / (Loss) on derivative instruments | 0.1 | (0.3) | (0.4) | n.m. | ||||||||
| Net Income / (Loss) | $ | 19.2 | $ | (1.7) | ||||||||
| (Expressed in millions of U.S. dollars, | Three-month period ended March 31, | Percentage | ||||||||||
| except percentages) | 2018 | 2019 | Change | Change | ||||||||
| Voyage revenue | $ | 92.8 | $ | 113.0 | $ | 20.2 | 21.8 | % | ||||
| Accrued charter revenue | (2.6) | (1.8) | (0.8) | (30.8 | %) | |||||||
| Amortization of time charter assumed | - | - | - | - | ||||||||
| Voyage revenue adjusted on a cash basis (1) | $ | 90.2 | $ | 111.2 | $ | 21.0 | 23.3 | % | ||||
| Vessels’ operational data | Three-month period ended March 31, | Percentage | ||||||||
| 2018 | 2019 | Change | Change | |||||||
| Average number of vessels | 53.0 | 61.9 | 8.9 | 16.8 | % | |||||
| Ownership days | 4,770 | 5,575 | 805 | 16.9 | % | |||||
| Number of vessels under dry-docking | 5 | 3 | (2 | ) | ||||||
(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles ("GAAP"). Refer to “Financial Summary” above for the reconciliation of Voyage revenue adjusted on a cash basis.
Voyage Revenue
Voyage revenue increased by 21.8%, or $20.2 million, to $113.0 million during the three-month period ended March 31, 2019, from $92.8 million during the three-month period ended March 31, 2018. The increase is mainly attributable to revenue earned by (i) ten vessels acquired during the nine-month period ended December 31, 2018 and (ii) decreased off-hire days for certain of our vessels during the three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018; partly offset by decreased charter rates for certain of our vessels and revenue not earned by two vessels sold for demolition in the first quarter of 2019.
Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 23.3%, or $21.0 million, to $111.2 million during the three-month period ended March 31, 2019, from $90.2 million during the three-month period ended March 31, 2018. Accrued charter revenue for the three-month periods ended March 31, 2019 and 2018, amounted to $1.8 million and $2.6 million, respectively.
Voyage Expenses
Voyage expenses were $1.8 million and $1.1 million for the three-month periods ended March 31, 2019 and 2018, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.
Voyage Expenses – related parties
Voyage expenses – related parties were $1.0 million and $0.8 million for the three-month periods ended March 31, 2019 and 2018, respectively. Voyage expenses – related parties represent (i) fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping Company S.A. (“Costamare Shipping”) and by Costamare Shipping Services Ltd. (“Costamare Services”) pursuant to the Framework Agreement between Costamare Shipping and us dated November 2, 2015 (the “Framework Agreement”), the Services Agreement between Costamare Services and our vessel-owning subsidiaries dated November 2, 2015 (the “Services Agreement”) and the individual ship-management agreements pertaining to each vessel and (ii) charter brokerage fees payable to Blue Net Chartering GmbH & Co. KG (“Blue Net”) pursuant to the Agreement Regarding Charter Brokerage dated January 1, 2018 between Costamare Shipping and Blue Net, as amended from time to time.
Vessels’ Operating Expenses
Vessels’ operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, were $30.0 million and $26.1 million during the three-month periods ended March 31, 2019 and 2018, respectively.
General and Administrative Expenses
General and administrative expenses were $1.3 million and $1.5 million during the three-month periods ended March 31, 2019 and 2018, respectively, and both include $0.63 million, which is part of the annual fee that Costamare Services receives based on the Services Agreement.
Management Fees – related parties
Management fees paid to our managers pursuant to the Framework Agreement were $5.5 million and $4.7 million during the three-month periods ended March 31, 2019 and 2018, respectively.
General and administrative expenses – non-cash component
General and administrative expenses – non-cash component were $0.8 million for the three-month period ended March 31, 2019, representing the value of the shares issued to Costamare Services on March 29, 2019, pursuant to the Services Agreement. For the three-month period ended March 31, 2018, the respective amount was $0.9 million, representing the fair value of the shares issued to Costamare Services on March 30, 2018, pursuant to the Services Agreement.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $2.3 million and $1.5 million during the three-month periods ended March 31, 2019 and 2018, respectively. During the three-month period ended March 31, 2019, three vessels underwent and completed their special survey. During the three-month period ended March 31, 2018, four vessels underwent and completed their special survey and one was in process of completing its special survey.
Depreciation
Depreciation expense increased by 22.4%, or $5.1 million, to $27.9 million during the three-month period ended March 31, 2019, from $22.8 million during the three-month period ended March 31, 2018. The increase was mainly attributable to the increased average number of vessels during the three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net was $2.0 million for each of the three-month periods ended March 31, 2019 and 2018.
Loss on sale / disposal of vessels
During the three-month period ended March 31, 2019, we recorded an aggregate loss of $18.4 million from the sale of the container vessels Piraeus and MSC Pylos. MSC Pylos was classified as asset held for sale as at December 31, 2018. During the three-month period ended March 31, 2018, no vessel was sold.
Vessels’ impairment loss
During the three-month period ended March 31, 2019, we recorded an impairment loss in relation to two of our vessels in the amount of $3.0 million, in the aggregate. During the three-month period ended March 31, 2018, no impairment loss was recorded.
Interest Income
Interest income was $0.8 million and $1.0 million for the three-month periods ended March 31, 2019 and 2018, respectively.
Interest and Finance Costs
Interest and finance costs were $22.9 million and $14.6 million during the three-month periods ended March 31, 2019 and 2018, respectively. The increase is mainly attributable to the increased average loan balance during the three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018.
Swaps’ Breakage Costs
During the three-month period ended March 31, 2018, we terminated three interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties breakage costs of $1.2 million.
Equity Gain on Investments
During the three-month period ended March 31, 2019, we recorded an equity gain on investments of $1.7 million representing our share of the net gain in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015 and as further amended on June 12, 2018 (the “Framework Deed”), between the Company and a wholly-owned subsidiary on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”) on the other hand. Since November 12, 2018, we have held 100% of the equity interest in five previously jointly owned companies with York, and as of that date these five companies are consolidated in our consolidated financial statements. As of March 31, 2019, 13 companies are jointly -owned with York. During the three-month period ended March 31, 2018, we recorded an equity gain on investments of $2.3 million also relating to investments under the Framework Deed.
Gain / (Loss) on Derivative Instruments
The fair value of our 15 interest rate derivative instruments which were outstanding as of March 31, 2019 equates to the amount that would be paid by us or to us should those instruments be terminated. As of March 31, 2019, the fair value of these 15 interest rate derivative instruments in aggregate amounted to a net asset of $4.8 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of operations. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of operations. For the three-month period ended March 31, 2019, a net loss of $2.3 million has been included in OCI and a net loss of $0.2 million has been included in Gain / (Loss) on derivative instruments in the consolidated statement of operations, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended March 31, 2019.
Cash Flows
Three-month periods ended March 31, 2019 and 2018
| Condensed cash flows | Three-month period ended March 31, | |||||||
| (Expressed in millions of U.S. dollars) | 2018 | 2019 | ||||||
| Net Cash Provided by Operating Activities | $41.6 | $47.7 | ||||||
| Net Cash Provided by / (Used in) Investing Activities | $(6.9) | $14.6 | ||||||
| Net Cash Used in Financing Activities | $(1.4) | $(73.5) | ||||||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended March 31, 2019, increased by $6.1 million to $47.7 million, from $41.6 million for the three-month period ended March 31, 2018. The increase is mainly attributable to the increased cash from operations of $21.0 million and the decreased special survey costs of $2.5 million during the three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018; partly offset by the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $4.9 million and increased payments for interest (including swap net receipts) of $7.7 million during the three-month period ended March 31, 2019 compared to the three-month period ended March 31, 2018.
Net Cash Provided by / (Used in) Investing Activities
Net cash provided by investing activities was $14.6 million in the three-month period ended March 31, 2019, which mainly consisted of proceeds we received from the sale of two vessel and advance payments for upgrades for certain of our vessels.
Net cash used in investing activities was $6.9 million in the three-month period ended March 31, 2018, which consisted of payments for upgrades to two of our vessels and payments for capital injection into certain entities pursuant to the Framework Deed.
Net Cash Used in Financing Activities
Net cash used in financing activities was $73.5 million in the three-month period ended March 31, 2019, which mainly consisted of (a) $59.2 million payments relating to our debt financing agreements (including the prepayments following the sale of two container vessels during the three-month period ended March 31, 2019), (b) $6.6 million we paid for dividends to holders of our common stock for the fourth quarter of 2018 and (c) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock”) and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (“Series E Preferred Stock”) for the period from October 15, 2018 to January 14, 2019.
Net cash used in financing activities was $1.4 million in the three-month period ended March 31, 2018, which mainly consisted of (a) $100.8 million net payments relating to our debt financing agreements, (b) $111.2 million net proceeds we received from our public offering in January 2018, of 4.6 million shares of our Series E Preferred Stock, net of underwriting discounts and expenses incurred in the offering, (c) $4.6 million we paid for dividends to holders of our common stock for the fourth quarter of 2017 and (d) $1.0 million we paid for dividends to holders of our Series B Preferred Stock, $2.1 million we paid for dividends to holders of our Series C Preferred Stock and $2.2 million we paid for dividends to holders of our Series D Preferred Stock, for the period from October 15, 2017 to January 14, 2018.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of March 31, 2019, we had a total cash liquidity of $155.3 million, consisting of cash, cash equivalents and restricted cash.
Debt-free vessels
As of April 22, 2019, the following vessels were free of debt.
Unencumbered Vessels
(Refer to fleet list for full details)
| Vessel Name | Year Built | TEU Capacity | |||
| CMA CGM L’ETOILE | 2005 | 2,556 | |||
| KOKURA | 1997 | 7,403 | |||
| MICHIGAN | 2008 | 1,300 | |||
| ENSENADA (*) | 2001 | 5,576 | |||
| ELAFONISOS (*) | 1999 | 2,526 | |||
| MONEMVASIA (*) | 1998 | 2,472 | |||
| ARKADIA (*) | 2001 | 1,550 | |||
(*) Vessels acquired pursuant to the Framework Deed with York.
Conference Call details:
On Tuesday, April 23, 2019 at 8:30 a.m. EST, Costamare’s management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or +1-412-317-9258 (from outside the US and the UK). Please quote “Costamare”. A replay of the conference call will be available until April 30, 2019. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088; and the access code required for the replay is: 10130852.
Live webcast:
There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About Costamare Inc.
Costamare Inc. is one of the world’s leading owners and providers of containerships for charter. The Company has 45 years of history in the international shipping industry and a fleet of 76 containerships, with a total capacity of approximately 541,000 TEU, including five newbuild containerships currently under construction. Eleven of our containerships have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock trade on the New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”, “CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.
Forward-Looking Statements
This earnings release contains “forward-looking statements”. In some cases, you can identify these statements by forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could”, “expect” and similar expressions. These statements are not historical facts but instead represent only Costamare’s belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare’s control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.’s most recent Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors”.
Company Contacts:
Gregory Zikos - Chief Financial Officer
Konstantinos Tsakalidis - Business Development
Costamare Inc., Monaco
Tel: (+377) 93 25 09 40
Email: [email protected]
Fleet List
The table below provides additional information, as of April 22, 2019, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.
| Vessel Name | Charterer | Year Built | Capacity (TEU) | Current Daily Charter Rate(1) (U.S. dollars) | Expiration of Charter(2) | |
| 1 | TRITON(ii) | Evergreen | 2016 | 14,424 | (*) | March 2026 |
| 2 | TITAN(ii) | Evergreen | 2016 | 14,424 | (*) | April 2026 |
| 3 | TALOS(ii) | Evergreen | 2016 | 14,424 | (*) | July 2026 |
| 4 | TAURUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
| 5 | THESEUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
| 6 | CAPE AKRITAS(i) | Evergreen | 2016 | 11,010 | 28,000 | June 2019 |
| 7 | CAPE TAINARO(i) | ZIM | 2017 | 11,010 | 39,500 | March 2020(3) |
| 8 | CAPE KORTIA(i) | Evergreen | 2017 | 11,010 | 28,000 | July 2019 |
| 9 | CAPE SOUNIO(i) | ZIM | 2017 | 11,010 | 33,500 | March 2020 |
| 10 | CAPE ARTEMISIO(i) | Hapag Lloyd | 2017 | 11,010 | 32,500 (net) | March 2020(4) |
| 11 | COSCO GUANGZHOU | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 12 | COSCO NINGBO | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 13 | COSCO YANTIAN | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 14 | COSCO BEIJING | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 15 | COSCO HELLAS | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 16 | MSC AZOV(ii) | MSC | 2014 | 9,403 | 43,000 | December 2026(5) |
| 17 | MSC AJACCIO(ii) | MSC | 2014 | 9,403 | 43,000 | February 2027(5) |
| 18 | MSC AMALFI(ii) | MSC | 2014 | 9,403 | 43,000 | March 2027(5) |
| 19 | MSC ATHENS(ii) | MSC | 2013 | 8,827 | 42,000 | January 2026(6) |
| 20 | MSC ATHOS(ii) | MSC | 2013 | 8,827 | 42,000 | February 2026(6) |
| 21 | VALOR | Evergreen | 2013 | 8,827 | 41,700 | April 2020 |
| 22 | VALUE | Evergreen | 2013 | 8,827 | 41,700 | April 2020 |
| 23 | VALIANT | Evergreen | 2013 | 8,827 | 41,700 | June 2020 |
| 24 | VALENCE | Evergreen | 2013 | 8,827 | 41,700 | July 2020 |
| 25 | VANTAGE | Evergreen | 2013 | 8,827 | 41,700 | September 2020 |
| 26 | NAVARINO | Evergreen | 2010 | 8,531 | 21,900 | February 2020 |
| 27 | MAERSK KLEVEN | Maersk | 1996 | 8,044 | 17,500 | April 2021 |
| 28 | MAERSK KOTKA | Maersk | 1996 | 8,044 | 17,500 | April 2021 |
| 29 | MAERSK KOWLOON | Maersk | 2005 | 7,471 | 16,000 | June 2022 |
| 30 | MAERSK KAWASAKI | Maersk | 1997 | 7,403 | 12,100 | May 2019 |
| 31 | KURE | COSCO | 1996 | 7,403 | 16,350 | May 2019 |
| 32 | KOKURA | Maersk | 1997 | 7,403 | 17,050 | February 2020 |
| 33 | MSC METHONI | MSC | 2003 | 6,724 | 29,000 | September 2021 |
| 34 | YORK (ex. SEALAND NEW YORK) | MSC | 2000 | 6,648 | 11,450 | October 2019 |
| 35 | MAERSK KOBE | Maersk | 2000 | 6,648 | 17,000 | April 2020 (7) |
| 36 | SEALAND WASHINGTON | Maersk | 2000 | 6,648 | (*) | March 2022(8) |
| 37 | SEALAND MICHIGAN | Maersk | 2000 | 6,648 | (*) | March 2022(8) |
| 38 | SEALAND ILLINOIS | Maersk | 2000 | 6,648 | (*) | March 2022(8) |
| 39 | MAERSK KOLKATA | Maersk | 2003 | 6,644 | 26,100 | March 2022(9) |
| 40 | MAERSK KINGSTON | Maersk | 2003 | 6,644 | 26,100 | March 2022(9) |
| 41 | MAERSK KALAMATA | Maersk | 2003 | 6,644 | 26,100 | March 2022(9) |
| 42 | VENETIKO | Hapag Lloyd | 2003 | 5,928 | 9,750 | June 2019 |
| 43 | ENSENADA (i) | ONE | 2001 | 5,576 | 14,250 | September 2019 |
| 44 | ZIM NEW YORK | ZIM | 2002 | 4,992 | 12,650 | September 2019(10) |
| 45 | ZIM SHANGHAI | ZIM | 2002 | 4,992 | 12,650 | September 2019(10) |
| 46 | LEONIDIO(ii) | Maersk | 2014 | 4,957 | 14,200 | December 2024 |
| 47 | KYPARISSIA(ii) | Maersk | 2014 | 4,957 | 14,200 | November 2024 |
| 48 | MEGALOPOLIS | Maersk | 2013 | 4,957 | (*) | July 2025 |
| 49 | MARATHOPOLIS | Maersk | 2013 | 4.957 | (*) | July 2025 |
| 50 | OAKLAND EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | November 2019 |
| 51 | HALIFAX EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | October 2020 |
| 52 | SINGAPORE EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | July 2020 |
| 53 | ULSAN | Maersk | 2002 | 4,132 | 10,900 | May 2019 |
| 54 | POLAR ARGENTINA(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | October 2024 |
| 55 | POLAR BRASIL(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | January 2025 |
| 56 | LAKONIA | Evergreen | 2004 | 2,586 | 7,950 | May 2019 |
| 57 | CMA CGM L’ETOILE | CMA CGM | 2005 | 2,556 | 10,550 | June 2019 |
| 58 | ELAFONISOS(i) | MSC | 1999 | 2,526 | (*) | April 2019 |
| 59 | AREOPOLIS | Evergreen | 2000 | 2,474 | 8,100 | June 2019 |
| 60 | MONEMVASIA(i) | Maersk | 1998 | 2,472 | 9,250 | November 2021 |
| 61 | MESSINI | Evergreen | 1997 | 2,458 | 8,100 | June 2019 |
| 62 | MSC REUNION | MSC | 1992 | 2,024 | 8,550 | August 2019 |
| 63 | MSC NAMIBIA II | MSC | 1991 | 2,023 | 9,170 | July 2019 |
| 64 | MSC SIERRA II | MSC | 1991 | 2,023 | 9,170 | June 2019 |
| 65 | NEAPOLIS | Evergreen | 2000 | 1,645 | 7,100 | June 2019 |
| 66 | ARKADIA(i) | Evergreen | 2001 | 1,550 | 9,800 | May 2019 |
| 67 | PROSPER | Evergreen | 1996 | 1,504 | 6,975 | May 2019 |
| 68 | MICHIGAN | MSC | 2008 | 1,300 | 7,200 | September 2019 |
| 69 | TRADER | - | 2008 | 1,300 | - | - |
| 70 | ZAGORA | MSC | 1995 | 1,162 | 6,500 | May 2020(11) |
| 71 | LUEBECK | MSC | 2001 | 1,078 | 6,200 | January 2020 |
Newbuilds
| Vessel Name | Shipyard | Capacity (TEU) | Charterer | Expected Delivery(12) | |
| 1 | YZJ2015-2057 | Jiangsu Yangzijiang Shipbuilding Group | 12,690 | Yang Ming | Q2 2020 |
| 2 | YZJ2015-2058 | Jiangsu Yangzijiang Shipbuilding Group | 12,690 | Yang Ming | Q3 2020 |
| 3 | YZJ2015-2059 | Jiangsu Yangzijiang Shipbuilding Group | 12,690 | Yang Ming | Q3 2020 |
| 4 | YZJ2015-2060 | Jiangsu Yangzijiang Shipbuilding Group | 12,690 | Yang Ming | Q2 2021 |
| 5 | YZJ2015-2061 | Jiangsu Yangzijiang Shipbuilding Group | 12,690 | Yang Ming | Q2 2021 |
(1) Daily charter rates are gross, unless stated otherwise. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.
(2) Charter terms and expiration dates are based on the earliest date charters could expire.
(3) This charter rate will be earned by Cape Tainaro from May 1, 2019. Until April 27, 2019 the vessel is chartered by OOCL at a daily charter rate of $28,250.
(4) This charter rate will be earned by Cape Artemisio from May 12, 2019. Until then the daily charter rate will be $27,000.
(5) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $43,000 until the original earliest redelivery dates of the vessels (December 2, 2023-MSC Azov, February 1, 2024-MSC Ajaccio and March 16, 2024-MSC Amalfi). The charters will also be extended for 3 years.
(6) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $42,000 until the original earliest redelivery dates of the vessels (January 29, 2023-MSC Athens and February 24, 2023-MSC Athos). The charters will also be extended for 3 years.
(7) This charter rate will be earned by Maersk Kobe from May 15, 2019. Until then the daily charter rate will be $16,000.
(8) The daily rate for Sealand Washington, Sealand Michigan and Sealand Illinois is a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.
(9) This charter rate will be earned by Maersk Kolkata, Maersk Kingston and Maersk Kalamata until November 14, 2019, February 28, 2020 and April 12, 2020, respectively. From the aforementioned dates until expiry of the charter, the daily rate for each of the three vessels will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions.
(10) The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under its 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of Zim’s equity and approximately $8.2 million in interest bearing notes maturing in 2023. In May 2018, the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for a one year period at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for this fourth optional year has been determined at $12,650 per day.
(11) This charter rate will be earned by Zagora from June 1, 2019. Until then the daily charter rate will be $7,800.
(12) Based on latest shipyard construction schedule, subject to change.
(i) Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.
(ii) Denotes vessels subject to a sale and leaseback transaction.
(*) Denotes charterer’s identity and/or current daily charter rates and/or charter expiration dates, which are treated as confidential.
COSTAMARE INC.
Consolidated Statements of Operations
| Three-month period ended March 31, | |||||||
| (Expressed in thousands of U.S. dollars, except share and per share amounts) | 2018 | 2019 | |||||
| REVENUES: | |||||||
| Voyage revenue | $ | 92,754 | $ | 112,974 | |||
| EXPENSES: | |||||||
| Voyage expenses | (1,094) | (1,836) | |||||
| Voyage expenses – related parties | (805) | (960) | |||||
| Vessels’ operating expenses | (26,068) | (29,964) | |||||
| General and administrative expenses | (1,544) | (1,263) | |||||
| Management fees - related parties | (4,646) | (5,548) | |||||
| Non-cash general and administrative expenses and non-cash other items | (934) | (778) | |||||
| Amortization of dry-docking and special survey costs | (1,534) | (2,276) | |||||
| Depreciation | (22,745) | (27,846) | |||||
| Amortization of prepaid lease rentals, net | (2,009) | (2,009) | |||||
| Loss on sale / disposal of vessels | - | (18,420) | |||||
| Vessels’ impairment loss | - | (3,042) | |||||
| Foreign exchange gains / (losses) | 96 | (11) | |||||
| Operating income | $ | 31,471 | $ | 19,021 | |||
| OTHER INCOME / (EXPENSES): | |||||||
| Interest income | $ | 1,000 | $ | 835 | |||
| Interest and finance costs | (14,588) | (22,933) | |||||
| Swaps’ breakage costs | (1,234) | - | |||||
| Equity gain on investments | 2,310 | 1,703 | |||||
| Other | 135 | 41 | |||||
| Gain / (Loss) on derivative instruments | 73 | (321) | |||||
| Total other income / (expenses) | $ | (12,304) | $ | (20,675) | |||
| Net Income / (Loss) | $ | 19,167 | $ | (1,654) | |||
| Earnings allocated to Preferred Stock | (6,878) | (7,643) | |||||
| Net Income / (Loss) available to common stockholders | $ | 12,289 | $ | (9,297) | |||
| Earnings / (Losses) per common share, basic and diluted | $ | 0.11 | $ | (0.08) | |||
| Weighted average number of shares, basic and diluted | 108,802,614 | 113,035,525 | |||||
COSTAMARE INC.
Consolidated Balance Sheets
| As of December 31, | As of March 31, | |||
| (Expressed in thousands of U.S. dollars) | 2018 | 2019 | ||
| ASSETS | (Unaudited) | |||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ | 113,714 | $ | 104,250 |
| Restricted cash | 5,600 | 6,538 | ||
| Accounts receivable | 5,625 | 9,022 | ||
| Inventories | 11,020 | 10,960 | ||
| Due from related parties | 4,681 | 2,017 | ||
| Fair value of derivatives | 3,514 | 2,808 | ||
| Insurance claims receivable | 6,476 | 3,483 | ||
| Prepaid lease rentals | 8,752 | 8,770 | ||
| Asset held for sale | 4,838 | - | ||
| Time charter assumed | 190 | 192 | ||
| Prepayments and other | 6,358 | 5,540 | ||
| Total current assets | $ | 170,768 | $ | 153,580 |
| FIXED ASSETS, NET: | ||||
| Capital leased assets | $ | 401,901 | $ | 398,508 |
| Vessels and advances, net | 2,206,786 | 2,158,418 | ||
| Total fixed assets, net | $ | 2,608,687 | $ | 2,556,926 |
| NON-CURRENT ASSETS: | ||||
| Equity method investments | $ | 131,082 | $ | 132,785 |
| Prepaid lease rentals, non-current | 34,167 | 31,991 | ||
| Deferred charges, net | 26,250 | 25,683 | ||
| Accounts receivable, non-current | 17,789 | 12,933 | ||
| Restricted cash | 47,177 | 44,480 | ||
| Fair value of derivatives, non-current | 3,727 | 1,984 | ||
| Time charter assumed, non-current | 1,222 | 1,174 | ||
| Other non-current assets | 9,942 | 10,081 | ||
| Total assets | $ | 3,050,811 | $ | 2,971,617 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Current portion of long-term debt | $ | 149,162 | $ | 180,225 |
| Accounts payable | 8,586 | 6,488 | ||
| Due to related parties | 196 | 217 | ||
| Capital lease obligations | 34,299 | 34,709 | ||
| Accrued liabilities | 17,624 | 16,640 | ||
| Unearned revenue | 12,432 | 12,179 | ||
| Fair value of derivatives | - | 83 | ||
| Other current liabilities | 2,370 | 2,349 | ||
| Total current liabilities | $ | 224,669 | $ | 252,890 |
| NON-CURRENT LIABILITIES | ||||
| Long-term debt, net of current portion | $ | 1,159,244 | $ | 1,078,822 |
| Capital lease obligations, net of current portion | 305,033 | 296,214 | ||
| Unearned revenue, net of current portion | 4,741 | 4,134 | ||
| Total non-current liabilities | $ | 1,469,018 | $ | 1,379,170 |
| COMMITMENTS AND CONTINGENCIES | ||||
| STOCKHOLDERS’ EQUITY: | ||||
| Preferred stock | $ | - | $ | - |
| Common stock | 11 | 11 | ||
| Additional paid-in capital | 1,313,840 | 1,319,284 | ||
| Retained earnings | 38,734 | 18,017 | ||
| Accumulated other comprehensive income | 4,539 | 2,245 | ||
| Total stockholders’ equity | $ | 1,357,124 | $ | 1,339,557 |
| Total liabilities and stockholders’ equity | $ | 3,050,811 | $ | 2,971,617 |
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