DRYSHIPS INC.
|
||
(Registrant)
|
||
Dated: September 18, 2019
|
By:
|
/s/ Anthony Kandylidis
|
Anthony Kandylidis
|
||
President and Chief Financial Officer
|
|
Six-month period ended
|
|||||||||||||||
|
June 30,
|
Change
|
||||||||||||||
REVENUES:
|
2018
|
2019
|
Amount
|
%
|
||||||||||||
Voyage and time charter revenues
|
$
|
87,359
|
$
|
82,324
|
$
|
(5,035
|
)
|
(5.8
|
)%
|
|||||||
Service Revenues
|
-
|
1,251
|
1,251
|
N/A
|
||||||||||||
Total Revenues
|
87,359
|
83,575
|
(3,784
|
)
|
(4.3
|
)%
|
||||||||||
|
||||||||||||||||
EXPENSES:
|
||||||||||||||||
Voyage expenses
|
12,169
|
20,943
|
8,774
|
72.1
|
%
|
|||||||||||
Vessels operating expenses
|
38,660
|
34,486
|
(4,174
|
)
|
(10.8
|
)%
|
||||||||||
Depreciation and amortization
|
13,974
|
15,120
|
1,146
|
8.2
|
%
|
|||||||||||
Impairment loss, (gain)/loss from sale of vessels
|
(5,109
|
)
|
1,454
|
6,563
|
(128.5
|
)%
|
||||||||||
General and administrative expenses
|
14,781
|
15,185
|
404
|
2.7
|
%
|
|||||||||||
Other, net
|
(365
|
)
|
70
|
435
|
(119.2
|
)%
|
||||||||||
Operating income/(loss)
|
13,249
|
(3,683
|
)
|
(16,932
|
)
|
(127.8
|
)%
|
|||||||||
|
||||||||||||||||
OTHER INCOME /(EXPENSES):
|
||||||||||||||||
Interest and finance costs
|
(9,595
|
)
|
(9,575
|
)
|
20
|
(0.2
|
)%
|
|||||||||
Interest income
|
790
|
1,845
|
1,055
|
133.5
|
%
|
|||||||||||
Other, net
|
33
|
213
|
180
|
545.5
|
%
|
|||||||||||
Total other expenses, net
|
(8,772
|
)
|
(7,517
|
)
|
1,255
|
(14.3
|
)%
|
|||||||||
INCOME/(LOSS) BEFORE INCOME TAXES
|
4,477
|
(11,200
|
)
|
(15,677
|
)
|
(350.2
|
)%
|
|||||||||
Income taxes
|
(2
|
)
|
(74
|
)
|
(72
|
)
|
3,600.0
|
%
|
||||||||
NET INCOME/(LOSS) ATTRIBUTABLE TO DRYSHIPS INC.
|
$
|
4,475
|
$
|
(11,274
|
)
|
$
|
(15,749
|
)
|
(351.9
|
)%
|
Total
(in thousands)
|
||||
Due through June 30, 2020
|
$
|
45,123
|
||
Due through June 30, 2021
|
22,908
|
|||
Due through June 30, 2022
|
22,908
|
|||
Due through June 30, 2023
|
69,124
|
|||
Due through June 30, 2024
|
62,006
|
|||
Thereafter
|
57,039
|
|||
Total principal payments
|
279,108
|
|||
Less: Financing fees
|
(1,916
|
)
|
||
Total debt
|
$
|
277,192
|
Total
(in thousands)
|
||||
Due through June 30, 2020
|
$
|
12,004
|
||
Due through June 30, 2021
|
11,659
|
|||
Due through June 30, 2022
|
11,285
|
|||
Due through June 30, 2023
|
10,911
|
|||
Due through June 30, 2024
|
10,545
|
|||
Thereafter
|
65,752
|
|||
Total contractual obligation
|
$
|
122,156
|
Total
(in thousands
|
||||
Due through June 30, 2020
|
$
|
14,023
|
||
Due through June 30, 2021
|
13,538
|
|||
Due through June 30, 2022
|
9,150
|
|||
Due through June 30, 2023
|
333
|
|||
Due through June 30, 2024
|
311
|
|||
Thereafter
|
1,457
|
|||
Total contractual obligation
|
$
|
38,812
|
• |
our future operating or financial results;
|
• |
statements about planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and
insurance costs;
|
• |
our ability to procure or have access to financing, our liquidity and the adequacy of cash flow for our operations;
|
• |
our continued borrowing availability under our credit facilities, financing arrangements and finance lease agreements and compliance with the covenants contained;
|
• |
our leverage, including our ability to generate sufficient cash flow to service our existing debt and the incurrence of substantial indebtedness in the future;
|
• |
our ability to successfully employ our existing and newbuild drybulk, tanker, and offshore support vessels, as applicable;
|
• |
our future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of
completion thereof, the delivery and commencement of operations dates, expected downtime and lost revenue);
|
• |
statements about drybulk, tanker and offshore support market trends, charter rates and factors affecting supply and demand;
|
• |
our expectations regarding the availability of vessel acquisitions; and
|
• |
anticipated developments with respect to pending litigation and governmental proceedings.
|
|
Page
|
Consolidated Balance Sheets as of December 31, 2018 and June 30, 2019 (unaudited)
|
F-2
|
Unaudited Interim Condensed Consolidated Statements of Operations for the six-month periods ended June 30, 2018 and 2019
|
F-4
|
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income/(Loss) for the six-month periods ended June 30, 2018 and 2019
|
F-5
|
Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity for the six-month periods ended June 30, 2018 and 2019
|
F-6
|
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2018 and 2019
|
F-7
|
Notes to Unaudited Interim Condensed Consolidated Financial Statements
|
F-8
|
December 31,
|
June 30,
|
|||||||
2018
|
2019
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents (Note 3)
|
$
|
141,851
|
$
|
106,738
|
||||
Restricted cash (Note 3)
|
20
|
167
|
||||||
Trade accounts receivable, net of allowance for doubtful receivables of $306 and $305 at December 31, 2018 and June 30, 2019, respectively (Note 17)
|
13,713
|
12,236
|
||||||
Receivables from vessel owners
|
-
|
800
|
||||||
Due from related parties (Note 4)
|
27,864
|
30,036
|
||||||
Prepayments and advances
|
708
|
3,307
|
||||||
Other current assets (Note 5)
|
13,758
|
13,222
|
||||||
Total current assets
|
197,914
|
166,506
|
||||||
FIXED ASSETS, NET:
|
||||||||
Vessels, net (Notes 4, 6)
|
755,332
|
792,267
|
||||||
Property and equipment, net (Note 6)
|
-
|
1,137
|
||||||
Total fixed assets, net
|
755,332
|
793,404
|
||||||
OTHER NON-CURRENT ASSETS:
|
||||||||
Investment in affiliate (Notes 9, 13)
|
34,000
|
-
|
||||||
Right-of- use assets (Note 10)
|
-
|
35,987
|
||||||
Goodwill (Note 9)
|
-
|
10,888
|
||||||
Intangible assets (Note 7)
|
-
|
23,079
|
||||||
Available for sale debt securities (Note 13)
|
4,961
|
5,048
|
||||||
Restricted cash (Note 3)
|
15,010
|
15,352
|
||||||
Other non-current assets (Note 8)
|
4,088
|
16,403
|
||||||
Total other non-current assets
|
58,059
|
106,757
|
||||||
Total assets
|
$
|
1,011,305
|
$
|
1,066,667
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current portion of long-term debt, net of deferred finance costs (Note 11)
|
$
|
38,795
|
$
|
44,621
|
||||
Operating lease liability (Note 10)
|
-
|
12,508
|
||||||
Accounts payable and other current liabilities
|
5,844
|
8,900
|
||||||
Payables to vessel owners
|
-
|
2,392
|
||||||
Derivative liability (Note 13)
|
-
|
52
|
||||||
Accrued liabilities (Note 4)
|
3,387
|
9,295
|
||||||
Due to related parties (Notes 4, 12)
|
5,796
|
9,497
|
||||||
Deferred revenue (Note 17)
|
1,776
|
1,311
|
||||||
Total current liabilities
|
55,598
|
88,576
|
||||||
NON-CURRENT LIABILITIES
|
||||||||
Long-term debt, net of deferred finance costs (Note 11)
|
251,288
|
232,571
|
||||||
Operating lease liability (Note 10)
|
-
|
23,390
|
||||||
Due to related parties (Notes 4, 12)
|
66,690
|
87,136
|
||||||
Income tax payable (Note 21)
|
-
|
10,572
|
||||||
Total non-current liabilities
|
317,978
|
353,669
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 16)
|
||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2018 and June 30, 2019; 100,000,000 shares designated as Series A Convertible preferred stock; 100,000,000
shares designated as Series B Convertible preferred stock, 10,000 shares designated as Series C Convertible Preferred stock, 3,500,000 shares designated as Series D Preferred stock, 50,000 shares designated as Series E-1 Convertible
Preferred Stock, and 50,000 shares designated as Series E-2 Convertible Preferred Stock; 0 shares of Series A Convertible Preferred stock,0 shares of Series B Convertible Preferred stock, 0 shares of Series C Convertible Preferred stock; 0
shares of Series D Preferred stock, 0 shares of Series E1 Convertible Preferred stock and 0 shares of Series E2 Convertible Preferred stock issued and outstanding at December 31, 2018 and June 30, 2019, respectively
|
-
|
-
|
||||||
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2018 and June 30, 2019; 104,274,708 shares issued at December 31, 2018 and June 30, 2019; 87,232,028 and
86,886,627 shares outstanding at December 31, 2018 and June 30, 2019, respectively (Notes 14)
|
1,043
|
1,043
|
||||||
Treasury stock; $0.01 par value; 17,042,680 and 17,388,081 shares at December 31, 2018 and June 30, 2019, respectively (Note 14)
|
(85,378
|
)
|
(87,498
|
)
|
||||
Additional paid-in capital
|
4,067,124
|
4,067,124
|
||||||
Accumulated other comprehensive income/(loss) (Note 13)
|
(39
|
)
|
48
|
|||||
Accumulated deficit
|
(3,345,021
|
)
|
(3,356,295
|
)
|
||||
Total equity
|
637,729
|
624,422
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,011,305
|
$
|
1,066,667
|
Six-month period ended June 30,
|
||||||||
2018
|
2019
|
|||||||
REVENUES:
|
||||||||
Voyage and time charter revenues
|
$
|
87,359
|
$
|
82,324
|
||||
Service Revenues
|
-
|
1,251
|
||||||
Total Revenues (Notes 4, 17)
|
$
|
87,359
|
$
|
83,575
|
||||
OPERATING EXPENSES/(INCOME):
|
||||||||
Voyage expenses (Notes 4, 17)
|
12,169
|
20,943
|
||||||
Vessels’ operating expenses
|
38,660
|
34,486
|
||||||
Depreciation and amortization (Notes 6,7)
|
13,974
|
15,120
|
||||||
Impairment loss, (gain)/loss from sale of vessels (Note 6)
|
(5,109
|
)
|
1,454
|
|||||
General and administrative expenses (Note 4)
|
14,781
|
15,185
|
||||||
Other, net
|
(365
|
)
|
70
|
|||||
Operating income/(loss)
|
13,249
|
(3,683
|
)
|
|||||
OTHER INCOME / (EXPENSES):
|
||||||||
Interest and finance costs (Notes 4, 18)
|
(9,595
|
)
|
(9,575
|
)
|
||||
Interest income
|
790
|
1,845
|
||||||
Other, net
|
33
|
213
|
||||||
Total other expenses, net
|
(8,772
|
)
|
(7,517
|
)
|
||||
INCOME/(LOSS) BEFORE INCOME TAXES
|
4,477
|
(11,200
|
)
|
|||||
Income taxes (Note 21)
|
(2
|
)
|
(74
|
)
|
||||
NET INCOME/(LOSS)
|
$
|
4,475
|
$
|
(11,274
|
)
|
|||
NET INCOME/(LOSS) ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS (Note 20)
|
$
|
4,475
|
$
|
(11,274
|
)
|
|||
EARNINGS/(LOSSES) PER COMMON SHARE ATTRIBUTABLE TO DRYSHIPS INC. COMMON
STOCKHOLDERS, BASIC AND DILUTED (Note 20)
|
$
|
0.04
|
$
|
(0.13
|
)
|
|||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES, BASIC AND DILUTED (Note 20)
|
102,123,365
|
86,893,214
|
||||||
Dividends declared per share (Note 14)
|
$
|
0.05
|
$
|
-
|
Six-month period ended June 30,
|
||||||||
2018
|
2019
|
|||||||
- Net income/(loss)
|
$
|
4,475
|
$
|
(11,274
|
)
|
|||
Other comprehensive income:
|
||||||||
- Unrealized gain associated with the change in fair value of investment in available for sale debt securities (Note 13)
|
-
|
87
|
||||||
Other comprehensive income
|
$
|
-
|
$
|
87
|
||||
Comprehensive income/(loss) attributable to DryShips Inc.
|
$
|
4,475
|
$
|
(11,187
|
)
|
Common stock
|
Treasury stock
|
||||||||||||||||||||||||||||||||
Shares
|
Par value
|
Shares
|
Value
|
Additional Paid-in Capital
|
Accumulated Other Comprehensive Income/(Loss)
|
Accumulated deficit
|
Total DryShips Stockholders Equity
|
||||||||||||||||||||||||||
Balance December 31, 2017
|
104,274,708
|
$
|
1,043
|
—
|
$
|
—
|
$
|
4,066,083
|
$
|
—
|
$
|
(3,360,090
|
)
|
$
|
707,036
|
||||||||||||||||||
- Adoption of revenue and lease recognition accounting policy adjustment (Note 1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(1,711
|
)
|
(1,711
|
)
|
|||||||||||||||||||||||
- Net income
|
—
|
—
|
—
|
—
|
—
|
—
|
4,475
|
4,475
|
|||||||||||||||||||||||||
- Amortization of stock based compensation (Note 15)
|
—
|
—
|
—
|
—
|
345
|
—
|
—
|
345
|
|||||||||||||||||||||||||
-Common stock repurchase program (Note 14)
|
—
|
—
|
(5,565,792
|
)
|
(23,142
|
)
|
—
|
—
|
—
|
(23,142
|
)
|
||||||||||||||||||||||
-Gain from common control transaction
|
—
|
—
|
—
|
—
|
1,581
|
—
|
—
|
1,581
|
|||||||||||||||||||||||||
-Dividends paid
|
—
|
—
|
—
|
—
|
—
|
(5,000
|
)
|
(5,000
|
)
|
||||||||||||||||||||||||
Balance June 30, 2018
|
104,274,708
|
$
|
1,043
|
(5,565,792
|
)
|
$
|
(23,142
|
)
|
$
|
4,068,009
|
$
|
—
|
$
|
(3,362,326
|
)
|
$
|
683,584
|
Common stock
|
Treasury stock
|
|||||||||||||||||||||||||||||||
Shares
|
Par value
|
Shares
|
Value
|
Additional Paid-in Capital
|
Accumulated Other Comprehensive Income/(Loss)
|
Accumulated deficit
|
Total DryShips Stockholders Equity
|
|||||||||||||||||||||||||
Balance December 31, 2018
|
104,274,708
|
$
|
1,043
|
(17,042,680
|
)
|
$
|
(85,378
|
)
|
$
|
4,067,124
|
$
|
(39
|
)
|
$
|
(3,345,021
|
)
|
$
|
637,729
|
||||||||||||||
- Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(11,274
|
)
|
(11,274
|
)
|
||||||||||||||||||||||
- Other comprehensive income
|
—
|
—
|
—
|
—
|
—
|
87
|
—
|
87
|
||||||||||||||||||||||||
-Common stock repurchase program (Note 14)
|
—
|
—
|
(345,401
|
)
|
(2,120
|
)
|
—
|
—
|
—
|
(2,120
|
)
|
|||||||||||||||||||||
Balance June 30, 2019
|
104,274,708
|
$
|
1,043
|
(17,388,081
|
)
|
$
|
(87,498
|
)
|
$
|
4,067,124
|
$
|
48
|
$
|
(3,356,295
|
)
|
$
|
624,422
|
Six-month period ended June 30,
|
||||||||
2018
|
2019
|
|||||||
Net Cash Provided by Operating Activities
|
$
|
9,211
|
$
|
20,412
|
||||
Cash Flows from Investing Activities:
|
||||||||
Proceeds from sale of vessels
|
9,413
|
-
|
||||||
Prepaid vessels’ improvements
|
-
|
(12,006
|
)
|
|||||
Acquisition of Heidmar, net of cash acquired
|
-
|
5,132
|
||||||
Fixed assets additions
|
(43,824
|
)
|
(28,383
|
)
|
||||
Net Cash Used in Investing Activities
|
(34,411
|
)
|
(35,257
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Payments of finance lease liabilities
|
-
|
(4,209
|
)
|
|||||
Proceeds from long-term debt
|
250,109
|
-
|
||||||
Principal payments and prepayments of long-term debt
|
(84,072
|
)
|
(13,168
|
)
|
||||
Repurchase of common stock
|
(23,142
|
)
|
(2,402
|
)
|
||||
Dividends paid
|
(5,000
|
)
|
-
|
|||||
Payment of financing costs, net
|
(2,680
|
)
|
-
|
|||||
Net Cash Provided by/(Used in) Financing Activities
|
135,215
|
(19,779
|
)
|
|||||
Net increase / (decrease) in cash and cash equivalents and restricted cash
|
110,015
|
(34,624
|
)
|
|||||
Cash and cash equivalents and restricted cash at beginning of year
|
30,226
|
156,881
|
||||||
Cash and cash equivalents and restricted cash at end of year
|
$
|
140,241
|
$
|
122,257
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid during the year for:
|
||||||||
Interest, net of amount capitalized
|
$
|
(6,003
|
)
|
$
|
(7,644
|
)
|
||
Non cash investing activities:
|
||||||||
Fixed Assets additions (Note 4, 6)
|
$
|
(51,919
|
)
|
$
|
(25,012
|
)
|
||
Non cash financing activities:
|
||||||||
Loan drawdown for vessels additions (Notes 4, 12)
|
$ |
50,333
|
$ |
25,012
|
||||
Capital contribution/(distribution) for common control transaction (Note 6)
|
1,581
|
-
|
Consolidated Balance Sheets
|
December 31, 2017
|
Cumulative effect from adopting ASC 606
|
Cumulative effect from adopting ASC 842
|
January 1, 2018
|
||||||||||||
Assets
|
||||||||||||||||
Trade accounts receivable, net of allowance for doubtful receivables
|
$
|
14,526
|
$
|
(1,350
|
)
|
$
|
-
|
$
|
13,176
|
|||||||
Other current assets (includes deferred contract costs)
|
$
|
12,279
|
$
|
235
|
$
|
185
|
$
|
12,699
|
||||||||
Liabilities
|
||||||||||||||||
Accrued liabilities
|
$
|
4,758
|
$
|
(87
|
)
|
$
|
-
|
$
|
4,671
|
|||||||
Deferred Revenue
|
$
|
865
|
$
|
-
|
$
|
868
|
$
|
1,733
|
||||||||
Stockholders’ Equity
|
||||||||||||||||
Accumulated deficit
|
$
|
(3,360,090
|
)
|
$
|
(1,028
|
)
|
$
|
(683
|
)
|
$
|
(3,361,801
|
)
|
2. |
Significant Accounting policies:
|
- |
Seawolf Tankers Inc. (or “Seawolf Pool”), which operates a pool of very large crude carrier-sized tankers;
|
- |
Blue Fin Tankers Inc. (or “Blue Fin Pool”), which operates a pool of Suezmax-sized tankers;
|
- |
Sigma Tankers Inc. (or “Sigma Pool”), which operates a pool of Aframax-sized tankers;
|
- |
Star Tankers Inc. (or “Star Pool”), which operates a pool of Panamax-sized tankers;
|
2. |
Significant Accounting policies - continued:
|
Intangible assets
|
Years
|
|
Trade names
|
10
|
|
Customer relationships
|
10
|
2. |
Significant Accounting policies - continued:
|
2. |
Significant Accounting policies - continued:
|
3. |
Cash and Cash equivalents and restricted cash:
|
|
December 31, 2018
|
June 30, 2019 | ||||||
Cash and cash equivalents
|
$
|
141,851
|
$
|
106,738
|
||||
Restricted cash
|
20
|
167
|
||||||
Restricted cash, non-current
|
15,010
|
15,352
|
||||||
Total
|
$
|
156,881
|
$
|
122,257
|
4. |
Transactions with Related Parties:
|
December 31, 2018
|
June 30,
2019
|
|||||||
Balance Sheet
|
||||||||
Due from related parties
|
$
|
27,864
|
$
|
30,036
|
||||
Vessels, net (Note 6)
|
170,871
|
217,429
|
||||||
Due to related parties - current
|
(5,796
|
)
|
(9,497
|
)
|
||||
Due to related parties – non-current (Note 12)
|
(66,690
|
)
|
(87,136
|
)
|
||||
Accrued liabilities
|
(304
|
)
|
(325
|
)
|
Six-month period ended June 30,
|
||||||||
Statement of Operations
|
2018
|
2019
|
||||||
Voyage and time/pool charter revenues
|
$
|
3,377
|
$
|
11,859
|
||||
Service Revenues
|
-
|
1,120
|
||||||
Voyage expenses
|
(1,557
|
)
|
(1,772
|
)
|
||||
Depreciation (Note 6)
|
-
|
(3,442
|
)
|
|||||
General and administrative expenses
|
(11,946
|
)
|
(9,053
|
)
|
||||
Interest and finance costs (Note 18)
|
(2,585
|
)
|
(1,872
|
)
|
||||
Commissions for assets acquired or sold
|
$
|
(97
|
)
|
$
|
-
|
4. |
Transactions with Related Parties - continued:
|
4. |
Transactions with Related Parties - continued:
|
4. |
Transactions with Related Parties - continued:
|
4. |
Transactions with Related Parties - continued:
|
June 30, 2019
|
||||
Seawolf Pool
|
$
|
1,205
|
||
Blue Fin Pool
|
3,949
|
|||
Sigma Pool
|
5,550
|
|||
Accrued unbilled commissions
|
1,250
|
|||
Total
|
$
|
11,954
|
|
From June 7, to June 30, 2019
|
|||||||||||||||
Pool Revenue
|
Management Fees
|
Commissions
|
Total
|
|||||||||||||
Seawolf Pool
|
$
|
13
|
$
|
-
|
$
|
42
|
$
|
55
|
||||||||
Blue Fin Pool
|
516
|
177
|
255
|
948
|
||||||||||||
Sigma Pool
|
769
|
294
|
339
|
1,402
|
||||||||||||
Star Pool
|
-
|
9
|
4
|
13
|
||||||||||||
Total
|
$
|
1,298
|
$
|
480
|
$
|
640
|
$
|
2,418
|
5. |
Other Current assets
|
December 31, 2018
|
June 30, 2019
|
|||||||
Inventories
|
$
|
10,907
|
$
|
10,328
|
||||
Insurance claims (Note 16)
|
1,856
|
1,325
|
||||||
Deferred contract costs (Note 17)
|
496
|
721
|
||||||
Other
|
499
|
848
|
||||||
Other current assets
|
$
|
13,758
|
$
|
13,222
|
6. |
Fixed Assets, net
|
Cost
|
Accumulated
Depreciation
|
Net Book
Value
|
||||||||||
Balance, December 31, 2018
|
$
|
787,014
|
$
|
(31,682
|
)
|
$
|
755,332
|
|||||
Additions
|
53,343
|
-
|
53,343
|
|||||||||
Impairment loss
|
(1,875
|
)
|
421
|
(1,454
|
)
|
|||||||
Depreciation
|
-
|
(14,954
|
)
|
(14,954
|
)
|
|||||||
Balance, June 30, 2019
|
$
|
838,482
|
$
|
(46,215
|
)
|
$
|
792,267
|
6. |
Fixed Assets, net – continued:
|
6. |
Fixed Assets, net - continued:
|
6. |
Fixed Assets, net - continued:
|
Cost
|
Accumulated
Depreciation
|
Net Book
Value
|
||||||||||
Balance, June 7, 2019
|
$
|
1,098
|
$
|
-
|
$
|
1,098
|
||||||
Additions
|
52
|
-
|
52
|
|||||||||
Depreciation
|
-
|
(13
|
)
|
(13
|
)
|
|||||||
Balance, June 30, 2019
|
$
|
1,150
|
$
|
(13
|
)
|
$
|
1,137
|
7. |
Intangible assets, net:
|
Amount
|
Amortization
|
Net Book
Value
|
||||||||||
Trade Name
|
$
|
2,555
|
$
|
(17
|
)
|
$
|
2,538
|
|||||
Customer Relationships
|
20,677
|
(136
|
)
|
20,541
|
||||||||
Total
|
$
|
23,232
|
$
|
(153
|
)
|
$
|
23,079
|
June 30, 2020
|
$
|
2,327
|
||
June 30, 2021
|
2,321
|
|||
June 30, 2022
|
2,321
|
|||
June 30, 2023
|
2,321
|
|||
June 30, 2024
|
2,327
|
|||
Thereafter
|
11,462
|
|||
Total
|
$
|
23,079
|
8. |
Other non-current assets:
|
|
December 31, 2018 | June 30, 2019 | ||||||
Other non-current assets
|
$
|
4,088
|
$
|
16,403
|
||||
$
|
4,088
|
$
|
16,403
|
9. |
Acquisition of Heidmar:
|
Assets:
|
||||
Cash and cash equivalents
|
$
|
21,344
|
||
Receivables from affiliates
|
10,245
|
|||
Other current assets
|
3,174
|
|||
Property and Equipment, net (Note 6)
|
1,098
|
|||
Trade Name (Note 7, 13)
|
2,555
|
|||
Customer Relationships (Note 7, 13)
|
20,677
|
|||
Right of use asset non-current (Note 10)
|
36,966
|
|||
Other non-current assets
|
750
|
|||
Total assets acquired
|
$ |
96,809
|
9. |
Acquisition of Heidmar - continued:
|
Liabilities:
|
||||
Total current liabilities (Note 10)
|
$ |
21,950
|
||
Total non-current liabilities (Notes 10, 21)
|
34,922
|
|||
Total liabilities assumed
|
$ |
56,872
|
||
Net assets acquired
|
$
|
39,937
|
||
Cash consideration paid
|
16,825
|
|||
Fair Value of existed interest in Heidmar LLC
|
34,000
|
|||
Goodwill on acquisition
|
$
|
10,888
|
10. |
Right-of-use assets and operating lease liability:
|
|
June 30, 2019 | |||
Right-of-use asset - Vessels
|
$
|
31,955
|
||
Right-of-use asset - Offices
|
4,032
|
|||
Total Right-of-use assets (non-current)
|
$
|
35,987
|
|
June 30, 2019 | |||
Operating lease liability - Vessels
|
$
|
31,955
|
||
Operating lease liability - Offices
|
3,943
|
|||
Total Operating lease liability
|
$
|
35,898
|
||
Less: Current portion
|
(12,508
|
)
|
||
Operating lease liability – Non-current portion
|
$
|
23,390
|
10. |
Right-of-use assets and operating lease liability – continued:
|
Due through June 30, 2020
|
$
|
14,023
|
||
Due through June 30, 2021
|
13,538
|
|||
Due through June 30, 2022
|
9,150
|
|||
Due through June 30, 2023
|
333
|
|||
Due through June 30, 2024
|
311
|
|||
Thereafter
|
1,457
|
|||
Total principal payments
|
$
|
38,812
|
11. |
Long-term Debt:
|
December 31, 2018
|
June 30, 2019
|
|||||||
Secured Credit Facilities - Drybulk Segment
|
$
|
75,582
|
$
|
71,638
|
||||
Secured Credit Facilities - Tanker Segment
|
124,757
|
118,706
|
||||||
Secured financing arrangements - Drybulk Segment
|
91,937
|
88,764
|
||||||
Less: Deferred financing costs
|
(2,193
|
)
|
(1,916
|
)
|
||||
Total debt
|
290,083
|
277,192
|
||||||
Less: Current portion
|
(38,795
|
)
|
(44,621
|
)
|
||||
Long-term portion
|
$
|
251,288
|
$
|
232,571
|
||||
11. |
Long-term Debt - continued:
|
11. |
Long-term Debt - continued:
|
11. |
Long-term Debt - continued:
|
Due through June 30, 2020
|
$
|
45,123
|
||
Due through June 30, 2021
|
22,908
|
|||
Due through June 30, 2022
|
22,908
|
|||
Due through June 30, 2023
|
69,124
|
|||
Due through June 30, 2024
|
62,006
|
|||
Thereafter
|
57,039
|
|||
Total principal payments
|
279,108
|
|||
Less: Financing fees
|
(1,916
|
)
|
||
Total debt
|
$
|
277,192
|
12. |
Finance lease liability (Due to related parties):
|
June 30, 2019
|
||||
Netadola bareboat charter
|
$
|
25,143
|
||
Conquistador bareboat charter
|
23,640
|
|||
Pink Sands bareboat charter
|
22,743
|
|||
Xanadu bareboat charter
|
23,113
|
|||
Total finance lease liability
|
94,639
|
|||
Less: Current portion
|
(7,503
|
)
|
||
Long-term portion
|
$
|
87,136
|
12. |
Finance lease liability (Due to related parties) - continued:
|
Finance lease liability
|
December 31, 2018
|
New Finance lease obligation
|
Repayments
|
(Gain)/Loss on repayment
|
Finance lease interest expense
|
June 30, 2019
|
||||||||||||||||||
Netadola bareboat charter
|
$
|
-
|
$
|
50,000
|
$
|
(24,988
|
)
|
$
|
-
|
$
|
131
|
$
|
25,143
|
|||||||||||
Conquistador bareboat charter
|
24,491
|
-
|
(1,452
|
)
|
11
|
590
|
23,640
|
|||||||||||||||||
Pink Sands bareboat charter
|
23,511
|
-
|
(1,335
|
)
|
-
|
567
|
22,743
|
|||||||||||||||||
Xanadu bareboat charter
|
23,962
|
-
|
(1,422
|
)
|
(8
|
)
|
581
|
23,113
|
||||||||||||||||
$
|
71,964
|
$
|
50,000
|
$
|
(29,197
|
)
|
$
|
3
|
$
|
1,869
|
$
|
94,639
|
12. |
Finance lease liability (Due to related parties) - continued:
|
13. |
Financial Instruments and Fair Value Measurements:
|
13. |
Financial Instruments and Fair Value Measurements - continued:
|
Quoted Prices in Active Markets for Identical Assets/Liabilities
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Unobservable Inputs
(Level 3)
|
||||||||||
Recurring measurements:
|
||||||||||||
Investment in available for sale debt securities
|
$
|
5,048
|
$
|
-
|
$
|
-
|
||||||
Derivative liability
|
-
|
52
|
-
|
|||||||||
Total
|
$
|
5,048
|
$
|
52
|
$
|
-
|
Amount
|
||||
Available for sale debt securities:
|
||||
Loss recognized in Accumulated Other Comprehensive Income
|
$
|
(151
|
)
|
|
Income reclassified from Accumulated Other Comprehensive Income into Interest and finance cost
|
238
|
|||
Total gain recognized in Accumulated Other Comprehensive Income
|
$
|
87
|
13. |
Financial Instruments and Fair Value Measurements - continued:
|
Non-Recurring Measurements:
|
Quoted Prices in Active Markets for Identical Assets/ Liabilities
(Level 1) |
Significant Other Observable Inputs (Level 2)
|
Unobservable Inputs
(Level 3)
|
Impairment loss
|
||||||||||||
Vessels, net (Note 6)
|
$
|
-
|
$
|
14,250
|
$
|
-
|
$
|
1,454
|
||||||||
Total
|
$
|
-
|
$
|
14,250
|
$
|
-
|
$
|
1,454
|
14. |
Common Stock and Additional Paid-in Capital:
|
14. |
Common Stock and Additional Paid-in Capital - continued:
|
15. |
Equity incentive plan:
|
16. |
Commitment and contingencies:
|
16.1 |
Legal proceedings
|
16. |
Commitment and contingencies – continued:
|
16.1 |
Legal proceedings – continued:
|
16.2 |
Contractual charter revenue
|
16. |
Commitment and contingencies – continued:
|
16.3 |
Contractual finance lease liability
|
Due through June 30, 2020
|
$
|
12,004
|
||
Due through June 30, 2021
|
11,659
|
|||
Due through June 30, 2022
|
11,285
|
|||
Due through June 30, 2023
|
10,911
|
|||
Due through June 30, 2024
|
10,545
|
|||
Thereafter
|
65,752
|
|||
Total contractual obligation
|
$
|
122,156
|
16.4 |
Contractual obligations for vessels improvements
|
17. |
Revenue:
|
Drybulk segment
|
Tanker segment
|
Gas carrier segment
|
Tanker Pool Operations segment
|
Consolidated
|
||||||||||||||||||||||||||||||||
Six-month period ended June 30,
|
Six-month period ended June 30,
|
Six-month period ended June 30,
|
From June 7 to June 30,
|
Six-month period ended June 30,
|
||||||||||||||||||||||||||||||||
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2019
|
2018
|
2019
|
||||||||||||||||||||||||||||
Voyage charter revenues
|
$
|
689
|
$
|
-
|
$
|
17,889
|
$
|
41,523
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
18,578
|
$
|
41,523
|
||||||||||||||||||
Time / Pool charter revenues
|
44,640
|
36,245
|
3,258
|
3,258
|
20,883
|
-
|
1,298
|
68,781
|
40,801
|
|||||||||||||||||||||||||||
Service revenues
|
-
|
-
|
-
|
-
|
-
|
-
|
1,251
|
-
|
1,251
|
|||||||||||||||||||||||||||
Total Revenues
|
$
|
45,329
|
$
|
36,245
|
$
|
21,147
|
$
|
44,781
|
$
|
20,883
|
$
|
-
|
$
|
2,549
|
$
|
87,359
|
$
|
83,575
|
17. |
Revenue – continued:
|
December 31, 2018
|
June 30, 2019
|
|||||||
Trade Accounts Receivable, net of allowance for doubtful receivables
|
$
|
13,713
|
$
|
12,236
|
||||
Deferred Contract Costs (Note 5)
|
496
|
721
|
||||||
Deferred Revenue
|
$
|
1,776
|
$
|
1,311
|
18. |
Interest and Finance Costs:
|
Six-month period ended
June 30,
|
||||||||
2018
|
2019
|
|||||||
Interest incurred on long-term debt
|
$
|
6,358
|
$
|
7,556
|
||||
Interest on finance lease liability
|
-
|
1,872
|
||||||
Interest received from available for sale debt securities
|
-
|
(238
|
)
|
|||||
Interest, amortization and write off of financing fees on loan from related party
|
2,595
|
-
|
||||||
Amortization of financing fees and other fees
|
561
|
277
|
||||||
Commissions, commitment fees and other financial expenses
|
165
|
108
|
||||||
Capitalized interest and finance costs
|
(84
|
)
|
-
|
|||||
Total
|
$
|
9,595
|
$
|
9,575
|
Drybulk segment
|
Offshore support segment
|
Tanker segment
|
Gas Carrier segment
|
Tanker Pool Operations
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||
Six-month period ended June 30,
|
Six-month period ended June 30,
|
Six-month period ended June 30,
|
Six-month period ended June 30,
|
Six-month period ended June 30,
|
From June 7 to June 30,
|
Six-month period ended June 30,
|
||||||||||||||||||||||||||||||||||||||||||
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
|||||||||||||||||||||||||||||||||||||
Total Revenues
|
$
|
45,329
|
$
|
36,245
|
$
|
-
|
$
|
-
|
$
|
21,147
|
$
|
44,781
|
$
|
20,883
|
$ | - |
$
|
-
|
$
|
2,549
|
$
|
87,359
|
$
|
83,575
|
||||||||||||||||||||||||
Income taxes
|
-
|
-
|
(2
|
)
|
(2
|
)
|
-
|
-
|
-
|
-
|
-
|
(72
|
)
|
(2
|
)
|
(74
|
)
|
|||||||||||||||||||||||||||||||
Net income/(loss)
|
$
|
3,248
|
$
|
(15,246
|
)
|
$
|
(2,886
|
)
|
$
|
(4,915
|
)
|
$
|
(387
|
)
|
$
|
9,552
|
$
|
4,500
|
$
|
(143
|
)
|
$
|
-
|
$
|
(522
|
)
|
$
|
4,475
|
$
|
(11,274
|
)
|
Drybulk segment
|
Offshore support segment
|
Tanker segment
|
Gas Carrier segment
|
Tanker Pool Operations
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||
31-Dec-18
|
30-Jun-19
|
31-Dec-18
|
30-Jun-19
|
31-Dec-18
|
30-Jun-19
|
31-Dec-18
|
30-Jun-19
|
31-Dec-18
|
30-Jun-19
|
31-Dec-18
|
30-Jun-19
|
|||||||||||||||||||||||||||||||||||||
Total assets
|
$
|
663,235
|
$
|
647,381
|
$
|
17,771
|
$
|
15,899
|
$
|
296,256
|
$
|
295,755
|
$
|
43
|
$
|
89
|
$
|
34,000
|
$
|
107,543
|
$
|
1,011,305
|
$
|
1,066,667
|
Six-month period ended June 30,
|
||||||||||||||||||||||||
2018
|
2019
|
|||||||||||||||||||||||
Income
(numerator)
|
Weighted-
average
number of
outstanding
share
(denominator)
|
Amount
per share
|
Loss
(numerator)
|
Weighted-
average
number of
outstanding
shares
(denominator)
|
Amount
per share
|
|||||||||||||||||||
Net income/loss
|
$
|
4,475
|
-
|
$
|
-
|
$
|
(11,274
|
)
|
-
|
$
|
-
|
|||||||||||||
Basic and diluted EPS/(LPS)
|
||||||||||||||||||||||||
Income/(Loss) available to common stockholders
|
$
|
4,475
|
102,123,365
|
$
|
0.04
|
$
|
(11,274
|
)
|
86,893,214
|
$
|
(0.13
|
)
|
21. |
Income Taxes - continued:
|
Liability at June 7, 2019
|
$
|
10,448
|
||
Additions related to the current period
|
124
|
|||
Liability at June 30, 2019
|
$
|
10,572
|
22. |
Subsequent events - continued:
|
Commitment and contingencies |
6 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||
Commitment and contingencies [Abstract] | |||||||||||||||||||||||||||||
Commitment and contingencies: | 16.Commitment and contingencies:
16.1Legal proceedings
Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business.
The Company has obtained hull and machinery insurance for the assessed market value of the Company’s fleet and protection and indemnity insurance. However, such insurance coverage may not provide sufficient funds to protect the Company from all liabilities that could result from its operations in all situations. Risks against which the Company may not be fully insured or insurable include environmental liabilities, which may result from a blow-out or similar accident, or liabilities resulting from reservoir damage alleged to have been caused by the negligence of the Company.
As part of the normal course of operations, the Company’s customers may disagree on amounts due to us under the provision of the contracts which are normally settled through negotiations with the customer. Disputed amounts are normally reflected in revenues at such time as the Company reaches agreement with the customer on the amounts due.
On July 4, 2017, the Company announced that it and Mr. Economou had been named as defendants in a lawsuit filed in the High Court of the Republic of the Marshall Islands (Civil Action No. 2017-131) by Michael Sammons alleging, in relevant part, breaches of fiduciary duty, unjust enrichment, and conflict of interest.
The Company and Mr. Economou subsequently filed motions to dismiss. The Court finally determined those motions on February 26, 2018. Plaintiff filed a motion for voluntary dismissal without prejudice and the Court issued acknowledgement of voluntary dismissal without prejudice on March 8, 2018. Plaintiffs filed a new action in the U.S. District Court for the Western District of Texas on February 27, 2018, styled as Sammons v. Economou, No. 5:18-cv-00194 (W.D. Tex.) alleging breaches of fiduciary duty and violations of Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On March 14, 2018, Defendants moved for an order requiring Plaintiffs to pay Defendants’ costs incurred in the prior action, and for a stay pending payment of costs. On April 22, 2018, plaintiffs filed a first amended complaint propounding additional allegations for constructive or common law fraud or violation of Section 9 of the Securities Exchange Act of 1934. On October 10, 2018, the magistrate judge issued a report and recommendation, recommending that the Court grant Defendants’ motion for costs in part, and that the Court stay further proceedings pending Plaintiffs' satisfaction of the cost award.
On October 31, 2018, over the Plaintiff’s objection, the Court adopted the magistrate’s report and recommendation, granted defendants’ motion for costs and for stay pending payment of costs in part, and ordered that the case be stayed until plaintiffs satisfy the cost award.
The case was administratively closed by order dated October 31, 2018. Plaintiffs filed a notice of appeal of the district court’s order to the Fifth Circuit Court of Appeals on October 31, 2018 and filed their opening brief in that appeal on December 28, 2018. Defendants-appellees filed their brief in opposition on January 28, 2019, and Plaintiffs-appellants served their reply brief on or about the same day. On February 11, 2019, the Court docketed Plaintiffs-appellants’ motion for leave to file a substitute reply brief. On February 12, 2019, Defendants-appellees filed their response, and the court denied Plaintiffs-appellants’ motion on the same day. The appeal is now fully briefed. The Company and Mr. Economou believe that the complaint is without merit and intend to contest the allegations in the Texas action.
On August 2, 2017, a putative class action complaint was filed in the United States District Court for the Eastern District of New York (No. 17-cv-04547) by Herbert Silverberg on behalf of himself and all others similarly situated against, among others, the Company and two of its executive officers. The complaint alleges that the Company and two of its executive officers violated Sections 9, 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. An amended complaint was filed by the putative lead plaintiff on September 21, 2018 in accordance with the schedule set by the Court, adding a Section 20A claim against all defendants, and a Section 20(a) claim against one of the Company’s directors named as an additional defendant (collectively with the Company’s executive officers named in the complaint, the “DryShips Individual Defendants”).
On October 26, 2018, the Company served a motion to dismiss. On December 14, 2018, the Company filed the fully-briefed motion to dismiss and opposition papers. On November 30, 2018, putative lead plaintiffs served a motion to strike extraneous documents attached to our motion to dismiss filings. The putative lead plaintiffs filed the fully-briefed motion papers on December 26, 2018. On April 12, 2019, the Lead Plaintiffs filed a letter requesting permission to serve the DryShips Individual Defendants by alternate means. On April 18, 2019, the Court so-ordered a stipulation whereby counsel for the DryShips Individual Defendants agreed to accept service, and set a briefing schedule for the DryShips Individual Defendants’ motion to dismiss. On May 31, 2019, the DryShips Individual Defendants served a motion to dismiss and on July 12, 2019, filed fully-briefed motion to dismiss and opposition papers. The Court has scheduled a status conference for January 23, 2020. The Company and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations.
On August 31, 2017, a complaint was filed in the High Court of the Republic of the Marshall Islands (Civil Action No. 2017-198) by certain Ocean Rig creditors against, among others, the Company and two of its executive officers (who are currently directors) and TMS Offshore Services.
The complaint purports to allege nine causes of action, including claims for avoidance and recovery of actual and/or constructive fraudulent conveyances under common law or 6 Del. Code §§ 1304(A)(1), 1305, 1307, and 1308; aiding and abetting fraudulent conveyances; and declaratory judgment under 30 MIRC § 202. The Company (and all other defendants) moved to dismiss the case on October 31, 2017. Following briefing and oral argument, by order dated September 27, 2018, the High Court granted Defendants' Joint Motion to Dismiss Complaint, and Defendants George Economou and Antonios Kandylidis' Motion to Dismiss, dismissing the case in its entirety without leave to replead. On or about October 24, 2018, Plaintiffs filed a notice of appeal to the Marshall Islands Supreme Court. The plaintiff-appellant’s opening brief was filed on March 6, 2019, the defendant-appellee’s opposition briefs were filed on May 15, 2019 and the plaintiff-appellant’s reply brief was filed on June 17, 2019. Oral argument took place on August 16, 2019. The Marshall Islands Supreme Court issued an opinion on September 9, 2019 affirming the High Court’s dismissal of the complaint without leave to replead, and this matter has now been fully resolved in the Company’s favor.
Ocean Rig has funded a preserved claims trust, or PCT. The PCT was established to preserve, for the benefit of scheme creditors, any causes of action held by Ocean Rig, Agon Shipping Inc. and/or Ocean Rig Investments Inc. arising from the facts and circumstances identified in the complaint prepared by certain of Ocean Rig's creditors referenced above, and certain other claims. If the trustees under the PCT determine that there is merit to any such claims, the trustees may take legal action for the benefit of all the scheme creditors in the restructuring.
The Company and certain of its officers and directors have received subpoenas from the SEC requesting certain documents and information from the Company in connection with offerings made by the Company between June 2016 and August 2017. The Company is providing the requested information to the SEC and continues to respond to the ongoing requests from the SEC.
Other than the cases mentioned above, the Company is not a party to any material litigation where claims or counterclaims have been filed against the Company other than routine legal proceedings incidental to its business.
16.2Contractual charter revenue
Future minimum contractual charter revenue, based on vessels committed to non-cancelable, time charter contracts as of June 30, 2019, amounts to $32,678 for the twelve months ending June 30, 2020, $6,488 for the twelve months ending June 30, 2021, $5,830 for the twelve months ending June 30, 2022, $0 for the twelve months ending June 30, 2023 and $0 for the twelve months ending June 30, 2024 and after. These amounts do not include any assumed off-hire.
16.3 Contractual finance lease liability As part of the four bareboat charter agreements (Notes 4, 12), the Company also provided a guarantee contained into the four bareboat charter agreements pursuant to the terms of which the Company guarantees the obligations arising in respect of the hull cover ratio covenant under the existing secured credit facilities of the vessels Conquistador, Pink Sands, Xanadu and Netadola, expiring from April 2028 to May 2029 and amounted to $122,156 as June 30, 2019 (Note 10). The following table summarizes Company’s contractual finance lease obligations as of June 30, 2019:
16.4 Contractual obligations for vessels improvements The Company has scheduled and started implementing during 2019, an overall “future proofing plan” for its fleet by performing dry-dockings, installation of scrubbers and installation of BWTS (Notes 6, 8). Based on the contractual purchase price of the systems, the estimated installation fees and the dry-docking costs, the Company estimates a total cost of approximately $91,920, of which an amount of $10,066 was paid as of June 30, 2019. The Company expects to incur the remaining costs of approximately $81,854 during the second half of 2019 and the full year of 2020. |
Earnings/(Losses) per share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings/(Losses) per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings/ (Losses) per share: | 20.Earnings/(Losses) per share:
For the six-month period ended June 30, 2018, there were no available securities to be issued, thus, basic and diluted earnings per share are the same. For the six-month period ended June 30, 2019, the effect of including any potential common shares in the denominator of diluted per share computations would have been antidilutive and therefore, basic and diluted losses per share are the same.
|
Interest and Finance Costs (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Finance Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Finance Costs |
|
Finance lease liability (Due to related parties) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance lease liability (Due to related parties) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Finance Lease Liability |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Capital Leased Asssets |
|
Transactions with Related Parties - Sierra Investments Inc. (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 01, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jan. 31, 2018 |
|
Weighted Average Interest Rate | 5.26% | 4.31% | ||
Sierra Investments Inc. | Revolving Facility | ||||
Initiation date | May 23, 2017 | |||
Sierra Investments Inc. | Loan Facility Agreement | ||||
Initiation date | Oct. 25, 2017 | |||
Line of credit facility amount outstanding | $ 73,841 | |||
Variable rate basis | LIBOR plus 4.50% | |||
Spread on variable rate | 4.50% | |||
Loan's tenor | 5 years | |||
Line of credit facility, Collateral | The Loan was secured by four of the Company’s vessels, two tanker vessels (Samsara and Balla) and two drybulk carrier vessels (Judd and Castellani). | |||
Debt instrument covenant description | Fair market values of mortgaged vessels should be at least 200% of the Loan Facility Agreement outstanding amount | |||
Cash repayment in full | $ 73,841 | |||
Weighted Average Interest Rate | 6.05% |
Commitment and Contingencies - Contractual Finance Lease Liability (Table) (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Finance Lease, Liability, Payment, Due [Abstract] | |
Due through June 30, 2020 | $ 12,004 |
Due through June 30, 2021 | 11,659 |
Due through June 30, 2022 | 11,285 |
Due through June 30, 2023 | 10,911 |
Due through June 30, 2024 | 10,545 |
Thereafter | 65,752 |
Total contractual obligation | $ 122,156 |
Revenue - Trade Accounts Receivable and Contract Balances (Table) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Accounts Receivable, Net [Abstract] | |||
Trade Accounts Receivable, net of allowance for doubtful receivables | $ 12,236 | $ 13,713 | $ 14,526 |
Deferred Contract Costs (Note 5) | 721 | 496 | |
Deferred Revenue | $ 1,311 | $ 1,776 | $ 865 |
Other Non-Current Assets (Table) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
OTHER NON-CURRENT ASSETS: | ||
Other non-current assets | $ 16,403 | $ 4,088 |
Total | $ 16,403 | $ 4,088 |
Earnings/(Losses) per share (Table) (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings per Share Reconciliation [Abstract] | ||
Net income/(loss) | $ (11,274) | $ 4,475 |
Basic and diluted EPS/(LPS) | ||
Income/(Loss) available to common stockholders | $ (11,274) | $ 4,475 |
Weighted-average number of outstanding shares (denominator) | 86,893,214 | 102,123,365 |
Amount per share | $ (0.13) | $ 0.04 |
Cash and Cash equivalents and restricted cash (Table) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 106,738 | $ 141,851 | ||
Restricted cash | 167 | 20 | ||
Restricted cash, non-current | 15,352 | 15,010 | ||
Total | $ 122,257 | $ 156,881 | $ 140,241 | $ 30,226 |
Common Stock and Additional Paid-in Capital - Treasury stock (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|---|
Jan. 07, 2019 |
Feb. 06, 2018 |
Jun. 30, 2018 |
Oct. 05, 2018 |
Oct. 29, 2018 |
Dec. 31, 2018 |
Sep. 18, 2019 |
Jun. 30, 2019 |
|
Common stock shares outstanding | 87,232,028 | 86,886,627 | ||||||
Aggregate cost of shares repurchased | $ 85,378 | $ 87,498 | ||||||
Subsequent Event | ||||||||
Common stock shares outstanding | 86,886,627 | |||||||
Share Repurchase Program | ||||||||
Stock Repurchase Program, Authorized Amount | $ 50,000 | |||||||
Stock Repurchase Program, Period in Force | 12 months | |||||||
Common shares repurchased | 5,565,792 | 10,864,227 | ||||||
Gross consideration of shares acquired under cost method | $ 23,142 | $ 50,217 | ||||||
New Stock Repurchase Program | ||||||||
Stock Repurchase Program, Authorized Amount | $ 50,000 | |||||||
Stock Repurchase Program, Period in Force | 12 months | |||||||
Both Stock Repurchase Programs | ||||||||
Common shares repurchased | 345,401 | 17,042,680 | ||||||
Gross consideration of shares acquired under cost method | $ 2,120 | $ 85,378 |
Right-of-use Assets and Operating Lease Liability - Future Minimum Payments (Table) (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Leases, Operating [Abstract] | |
Due through June 30, 2020 | $ 14,023 |
Due through June 30, 2021 | 13,538 |
Due through June 30, 2022 | 9,150 |
Due through June 30, 2023 | 333 |
Due through June 30, 2024 | 311 |
Thereafter | 1,457 |
Total principal payments | $ 38,812 |
Financial Instruments and Fair Value Measurements - Recurring Measurements (Table) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Recurring measurements: | ||
Derivative liability | $ 52 | $ 0 |
Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | ||
Recurring measurements: | ||
Investment in available for sale debt securities | 5,048 | |
Total | 5,048 | |
Significant Other Observable Inputs (Level 2) | ||
Recurring measurements: | ||
Derivative liability | 52 | |
Total | $ 52 |
Long-Term Debt - Line of Credit (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Debt instrument covenant compliance | As of June 30, 2019, the Company was in compliance with the covenants regarding its secured credit facilities and financing arrangements. |
Secured credit facilities and financing arrangements | |
Debt instrument covenant description | Under the Company's credit facilities and financing arrangements, Mr. Economou must generally continue to beneficially own at least 50% of either (i) the Company's issued and outstanding share capital or (ii) the Company's issued and outstanding voting share capital. In addition, the Company's credit facilities and financing arrangements require the Company and its subsidiaries to satisfy certain financial covenants. Depending on the credit facility or financing arrangement, these financial covenants require the maintenance of: (i) minimum liquidity; (ii) a maximum leverage ratio; (iii) a minimum debt service cover ratio; (iv) a minimum market adjusted net worth; (v) a minimum solvency ratio and (vi) a minimum working capital level. Also, the credit facilities and financing arrangements, require the maintenance of specified financial ratios, mainly to ensure that the market value of the mortgaged vessels under the applicable credit facility, determined in accordance with the terms of that facility, does not fall below a certain percentage of the outstanding amount of the loan, which is referred as a value maintenance clause or loan-to-value ratio. All of the Company's credit facilities and financing arrangements also contain cross-acceleration or cross-default provisions that may be triggered by a default under one of the Company's other credit facilities and financing arrangements. These covenants may limit the ability of certain of the Company's subsidiaries to, among other things, without the relevant lenders' or counterparties' prior consent (i) incur additional indebtedness, (ii) change the flag, class or management of the vessel mortgaged under such facility, (iii) create or permit to exist liens on their assets, (iv) make loans, (v) make investments or capital expenditures, and (vi) undergo a change in ownership or control. |
Working Base Facility "WCF" | |
Line Of Credit Facility Maximum Borrowing Capacity | $ 100,000 |
Variable rate basis | LIBOR plus margin |
Working capital collateral amount | $ 40,000 |
Other Non-Current Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Payments for vessels improvements | $ 28,383 | $ 43,824 | |
Vessels improvements | |||
Payments for vessels improvements | $ 16,093 | $ 4,088 |
Transactions with Related Parties |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with Related Parties: | 4.Transactions with Related Parties:
The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:
(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)
TMS Bulkers Ltd. - TMS Offshore Services Ltd. - TMS Tankers Ltd. – TMS Cardiff Gas Ltd. – TMS Dry Ltd. (together the “TMS Managers”): Effective January 1, 2017, the Company entered into agreements (the “TMS Agreements”) with TMS Bulkers Ltd. (“TMS Bulkers”) and TMS Offshore Services Ltd. (“TMS Offshore Services”) to streamline the services offered by TMS Bulkers under the management agreements with each of the Company’s drybulk vessel owning subsidiaries and by TMS Offshore Services, pursuant to the respective management agreements with the Company’s offshore support vessel owning subsidiaries. Effective January 1, 2017, the Company also entered into agreements with TMS Cardiff Gas Ltd. (”TMS Cardiff Gas”) and TMS Tankers Ltd. (“TMS Tankers”) regarding its acquired tanker and gas carrier vessels on similar terms as the TMS Agreements (Notes 6). On May 31, 2018, the Company supplemented the management services providers under the TMS Agreements to include TMS Dry Ltd. (“TMS Dry”), which is the manager of the Newcastlemax drybulk carriers, the Huahine, Conquistador, Pink Sands, Xanadu and Netadola (Notes 6, 12). TMS Bulkers, TMS Offshore Services, TMS Cardiff Gas, TMS Tankers and TMS Dry are collectively referred to herein as the “TMS Managers”. The TMS Managers may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and Chief Executive Officer (“CEO”).
The TMS Agreements cover, among other things, executive management, commercial, accounting, reporting, financing, legal, manning, catering, information technology, attendance, insurance, technical and operations services. The all-in base cost for providing these services is $1,643/day per vessel, which is a 33% reduction from prior levels, based on a minimum of 20 vessels, decreasing thereafter to $1,500/day per vessel.
The management fee is payable in equal monthly installments in advance and can be adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. The TMS Agreements entitled the TMS Managers to an aggregate performance bonus for 2016 amounting to $6,000, as well as a one-time setup fee of $2,000.
Under the respective TMS Agreements, the TMS Managers are also entitled to (i) a discretionary performance fee (up to $20,000, in either cash or common stock, at the discretion of the Company’s board of directors), (ii) a commission of 1.25% on charter hire agreements that are arranged by the TMS Managers, (iii) a commission of 1% of the purchase price on sales or purchases of vessels in the Company’s fleet that are arranged by the TMS Managers, (iv) a financing and advisory commission of 0.50% and (v) reimbursement of out of pocket and travel expenses. The TMS Agreements have terms of ten years.
Under the TMS Agreements, if the TMS Managers are requested to supervise the construction of a newbuilding vessel, in lieu of the management fee, the Company will pay the TMS Managers an upfront fee equal to 10% of the budgeted supervision cost. For any additional attendance above the budgeted superintendent expenses, the Company will be charged extra at a standard rate of Euro 500 (or $569 based on the Euro/U.S. Dollar exchange rate at June 30, 2019) per day.
Further, in the event that the management agreements are terminated for any reason other than a default by TMS Managers or change of control of the vessel owning companies’ ownership, the Company is required to pay the management fee for a further period of three calendar months as from the date of termination. In the event of a change of control of the vessel owning companies’ ownership, the Company is required to pay TMS Managers a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Managers under the term of the agreements, which such payment shall not be less than the fees for a period of 36 months and not more than a period of 48 months. The Company may terminate the agreements for a convenience at any time for a fee of $50,000. Transactions with TMS Managers in Euros are settled on the basis of the average U.S. Dollar rate on the invoice date.
Cardiff Tankers Inc. – Cardiff Gas Ltd: Under certain charter agreements for the Company’s tankers and gas carrier vessels, Cardiff Tankers Inc. (“Cardiff Tankers”) and Cardiff Gas Ltd (“Cardiff Gas”), two Marshall Islands entities that may be deemed to be beneficially owned by the Company’s Chairman and CEO, Mr. George Economou, provide services related to the sourcing, negotiation and execution of charters, for which they are entitled to a 1.25% commission on charter hire earned by those vessels. Cardiff Gas provided the Company with such services until the disposal of its four very large gas carriers, or VLGCs (Note 6).
George Economou: Mr. George Economou is the Company’s Chairman and CEO. Additionally, as of the date of this report, SPII Holdings Inc. (“SPII”), an entity that may be deemed to be beneficially owned by Mr. George Economou, beneficially owns 72,421,515 common shares of the Company, which is approximately 83.4% of the Company's outstanding common stock. Mr. George Economou therefore may be deemed to have control over the actions of the Company.
Other: On May 15, 2017, the Company entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the purchase of all of the outstanding shares of the vessel owning company of the Suezmax newbuilding vessel Samsara. The transaction was approved by the independent members of the Company’s board of directors taking into account independent third-party broker charter free valuations certificates and the long-term employment on a fixed rate basis plus profit share, provided by the seller. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer’s option at a base rate plus profit share. The charterer was also granted purchase options at the end of each firm period.
On May 31, 2018, the Company entered into two separate share purchase agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the purchase of all of the outstanding shares of the vessel owning companies of the Newcastlemax drybulk carrier Huahine and the Suezmax tanker vessel Marfa, including their associated credit facilities, respectively. The transactions were approved by the independent members of the Company’s board of directors taking into account independent third-party broker charter free valuations certificates (Notes 6, 11).
On June 20, 2018, the Company entered into an index linked employment agreement for the Newcastlemax drybulk carrier Huahine with TMS Dry. Under the agreement, the Company could give 60-days advance termination notice and could then seek alternative or fixed rate employment. The transaction was approved by the independent members of the Company’s board of directors taking into account among other things the actual speed and consumption figures of the vessel, the terms of the proposed time charter party, fixtures of sister vessels the Company owns and general market activity. On July 30, 2018 and upon notice of termination, the employment agreement with TMS Dry was terminated.
On November 19, 2018, the Company entered into a share purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the purchase of all of the outstanding shares of the vessel owning company of the Aframax tanker vessel Botafogo, including its associated credit facility. The transaction was approved by the independent members of the Company’s board of directors taking into account independent third-party broker charter free valuations certificates (Notes 6, 11).
On November 19, 2018, the Company entered into three separate bareboat charter agreements for three Newcastlemax drybulk carriers, the Conquistador, Pink Sands and Xanadu, already mortgaged under secured credit facilities, with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for an aggregate bareboat charterhire of $171,500. These vessels were already secured by mortgages under secured credit facilities that expire from April 2028 to February 2029, bear interest at LIBOR plus a margin and are repayable in quarterly installments with balloon payments at maturity, and are guaranteed by entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO.
The bareboat charterhire is payable as follows: (i) an amount of $99,875 in advance (advance bareboat charterhire), being the difference between the aggregate bareboat charterhire and the then-outstanding balance of the aforementioned secured credit facilities, and (ii) an amount of $71,625 in quarterly installments equal to the respective installments of the aforementioned secured credit facilities, being the then outstanding balance of the relevant credit facilities, bearing the same interest (LIBOR plus margin) and balloon payments at maturity. As part of the agreements, there are purchase obligations for its vessel’s legal rights and titles and interests, upon payment of each balloon installment at each last repayment date.
On the same date, the Company entered into three separate index linked employment agreements for each of the aforementioned vessels with TMS Dry. Under the agreements, the Company can give 60-days advance termination notice and can then seek alternative or fixed rate employments. The transactions were approved by the independent members of the Company’s board of directors, which took into account, among other things, (i) independent third-party broker charter free valuations certificates and (ii) the actual speed and consumption figures of each vessel, the terms of the proposed time charter parties, fixtures of sister vessels the Company owns and general market activity (Notes 6, 12). The revenue recognized during the six-month period ended June 30, 2019 under those agreements amounted to $5,566.
On January 11, 2019, the Company entered into an index linked employment agreement for its 2014 built Newcastlemax drybulk carrier, the Marini, with TMS Dry. Under the charter, the gross rate is linked to the Baltic Capesize Index (BCI5TC) plus 16% and has an expected duration of 10 to 12 months. The transaction was approved by the independent members of the Company’s board of directors, which took into account, among other things the actual speed and consumption figures of the vessel, the terms of the proposed time charter party, fixtures of sister vessels the Company owns and general market activity. The revenue recognized during the six-month period ended June 30, 2019 under this agreement amounted to $1,249.
On May 16, 2019, the Company entered into a bareboat charter agreement for one Newcastlemax drybulk carrier built in 2017, the Netadola, already mortgaged under a secured credit facility, with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for an aggregate bareboat charterhire of $50,000. The vessel was already secured by mortgage under a secured credit facility that expires on May 2029, bears interest at LIBOR plus a margin and is repayable in quarterly installments with balloon payment at maturity, and is guaranteed by entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO.
The bareboat charterhire is payable as follows: (i) an amount of $24,988 in advance (advance bareboat charterhire), being the difference between the aggregate bareboat charterhire and the then-outstanding balance of the aforementioned secured credit facility, and (ii) an amount of $25,012 in quarterly installments equal to the respective installments of the aforementioned secured credit facility, being the then outstanding balance of the relevant credit facility, bearing the same interest (LIBOR plus margin) and balloon payment at maturity. As part of the agreement, there is a purchase obligation for the vessel’s legal rights and titles and interests, upon payment of the balloon installment at the last repayment date.
On the same date, the Company entered into an index linked employment agreement for the aforementioned vessel with TMS Dry. Under the agreement, the Company can give 60-days advance termination notice and can then seek alternative or fixed rate employments. The transactions were approved by the Company’s board of directors and a special committee of independent and disinterested directors based on the average fair market value of the vessel, as determined by independent third party brokers’ charter free valuations certificates and taking into account among other things, the actual speed and consumption figures of the vessel, the terms of the proposed time charter party, fixtures of sister vessels the Company owns and general market activity (Notes 6, 12). The revenue recognized during the six-month period ended June 30, 2019 under those agreements amounted to $489.
Sierra Investments Inc.: On October 25, 2017, the Company entered into a secured loan facility (“Loan Facility Agreement”) with Sierra Investments Inc. (“Sierra”) to refinance the then outstanding debt under a revolving facility agreement (“Revolving Facility”) with Sierra dated May 23, 2017, amounting to a total of $73,841. The Loan Facility Agreement carried an interest rate of LIBOR plus 4.5%, was non-amortizing, had a tenor of five years, had no arrangement or commitment fee and was secured by four of the Company’s vessels, two tanker vessels (Samsara and Balla) and two drybulk carrier vessels (Judd and Castellani). Furthermore, it contained only one financial covenant, according to which the fair market values of mortgaged vessels should be at least 200% of the Loan Facility Agreement outstanding amount. No arrangement fees or otherwise were charged in connection with the refinancing. The transaction was approved by the independent members of the Company’s board of directors on the basis of a fairness opinion.
On February 1, 2018, the Company repaid in full the then outstanding balance of $73,841 under the Loan Facility Agreement with Sierra.
The weighted-average interest rate on the Loan Facility Agreement was 6.05% for the six-month period ended June 30, 2018.
Heidmar: On August 29, 2017, following the closing of a private offering, the Company issued 12,000,000 common shares to SPII, an entity that may be deemed to be beneficially owned by Mr. George Economou, as a consideration for the purchase of the 100% issued and outstanding equity interests of Shipping Pool Investors Inc. (“SPI”), which directly held a 49.0% interest in Heidmar LLC, a global tanker pool operator. SPI was a member of Heidmar LLC, a Delaware limited liability company that directly owned 49.0% of the total issued equity interests of Heidmar LLC. The Company’s investment in Heidmar LLC was recorded at $34,000 upon the closing of the transaction (Notes 9, 13). On June 7, 2019, the Company acquired 100% of the issued and outstanding shares of Heidmar, a Marshall Islands company. Prior to that transaction, the Company indirectly owned approximately 49.8% of Heidmar through its affiliate Heidmar LLC (Note 9).
Tanker Pools: The Company earns revenue, management fees, and commissions from the non-consolidated pool subsidiaries (Note 2). As of June 30, 2019, the Company has receivables related primarily to voyage revenue, management fees and commissions earned from the non-consolidated pool subsidiaries (Note 2), as follows:
The amounts earned for the period from June 7, 2019 to June 30, 2019 were as follows:
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Other non-current assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Other non-current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current assets: | 8.Other non-current assets:
The amounts included in the accompanying consolidated balance sheets are as follows:
As of December 31, 2018 and June 30, 2019, the amount of $4,088 and $16,093, respectively, relates to Company’s prepayments regarding improvements for its drybulk and tanker carrier vessels. |
Finance lease liability (Due to related parties) |
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Finance lease liability (Due to related parties) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance lease liability (Due to related parties): | 12.Finance lease liability (Due to related parties):
On November 19, 2018, the Company entered into three separate bareboat charter agreements for three Newcastlemax drybulk carriers, the Conquistador, Pink Sands and Xanadu, already mortgaged under secured credit facilities, with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for an aggregate bareboat charterhire of $171,500.
The bareboat charterhire is payable as follows: (i) an amount of $99,875 in advance (advance bareboat charterhire), calculated as the difference between the aggregate bareboat charterhire and the outstanding balance of the secured credit facilities at the time of the agreements conclusion, and (ii) an aggregate amount of $71,625 in quarterly installments, bearing interest (LIBOR plus margin) and balloon payments at maturity, and are guaranteed by entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO. As part of the agreements and upon payment of each balloon installment at the final repayment date, the Company has the obligation to purchase the vessels. On November 27, 2018 (commencement date), the vessels were bareboat chartered to the Company upon payment of the advance bareboat charterhire amounts. The transactions were approved by the independent members of the Company’s board of directors, which took into account, among other things (i) independent third-party brokers’ charter free valuations certificates and (ii) the actual speed and consumption figures of each vessel, the terms of the proposed time charter parties, fixtures of sister vessels the Company owns and general market activity, respectively (Notes 4, 6, 13).
On May 16, 2019, the Company entered into a bareboat charter agreement for one Newcastlemax drybulk carrier built in 2017, the Netadola, already mortgaged under a secured credit facility, with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for an aggregate bareboat charterhire of $50,000.
The bareboat charterhire is payable as follows: (i) an amount of $24,988 in advance (advance bareboat charterhire), calculated as the difference between the aggregate bareboat charterhire and the outstanding balance of the secured credit facility at the time of the agreement’s conclusion, and (ii) an amount of $25,012 in quarterly installments, bearing interest (LIBOR plus margin) and balloon payment at maturity, and is guaranteed by entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO. As part of the agreement and upon payment of the balloon installment at the final repayment date, the Company has the obligation to purchase the vessel. On May 25, 2019 (commencement date), the vessel was bareboat chartered to the Company and on May 29, 2019, the Company paid the advance bareboat charterhire amount.
The transaction was approved by the Company’s board of directors and a special committee of independent and disinterested directors based on the average fair market value of the vessel, as determined by independent third-party brokers’ charter free valuations certificates (Notes 4, 6, 13).
The Company treated the aforementioned bareboat charter agreements (leases) in accordance with the new lease accounting standard (ASC 842). In accordance with ASC 842, the Company (lessee) classified the leases as finance leases due to the purchase obligation clauses included in the agreements. With regards to these contracts initial recognition the Company recognized (i) the vessels as right-of-use assets in its consolidated balance sheet under “Vessels, net” and is depreciating them over their remaining useful lives, as determined in accordance with Company’s depreciation policy for fixed assets and (ii) a finance lease liability being reduced by the lease payments and increased by period’s finance lease cost.
More precisely, the Company recorded in regards to Conquistador, Pink Sands and Xanadu lease agreements: (i) an aggregate finance lease liability amounting to $171,500 being the present value of their aggregate future finance lease liability, as determined using the lessor’s implicit rate (4.98%) to the lease and (ii) a right-of-use for the vessels at the same amount and in regards to Netadola lease agreement: (i) a finance lease liability amounted to $50,000 being the present value of its future finance lease liability, as determined using the lessor’s implicit rate (5.10%) to the lease and (ii) a right-of-use for the vessel at the same amount. No initial direct costs were incurred by the Company. Each future finance lease liability, consisted of (i) the respective advance bareboat charterhire, (ii) the respective fixed quarterly installments and (iii) the expected future interest payments, as determined on the respective commencement dates (4.91% in regards to Conquistador, Pink Sands and Xanadu finance lease liability and 5.02% in regards to Netadola finance lease liability- LIBORs at commencement dates plus margin).
The weighted average remaining term of the Company’s outstanding finance lease obligations was 9.7 and 9.4 years as of December 31, 2018 and June 30, 2019, respectively. As of June 30, 2019, the Company repaid the finance lease installments amounted to $29,197, resulting in a total loss of $3, with regards to the variable lease consideration that was not included in the finance lease liability, and included under “Interest and finance cost” in its accompanying unaudited interim condensed consolidated statement of operations for the six-month period ended June 30, 2019 (refer also to table below). The Company recognized finance lease interest expense amounted to $1,869 in its accompanying interim condensed consolidated statement of operations for the six-month period ended June 30, 2019, included in “Interest and finance cost” (Note 18). The Company recognized depreciation expense of the right-of-use assets amounted to $3,442 in its accompanying unaudited interim condensed consolidated statement of operations for the six-month period ended June 30 2019, included in “Depreciation” (Note 4).
The table below presents the movement of finance lease liabilities up to June 30, 2019:
On June 25, 2019, the Company entered into three separate addenda of the bareboat charter agreements for the three newcastlemax drybulk carriers with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, in order to partly finance the acquisition and installation of scrubbers in an amount up to $6,417. The respective amount was not yet drawn. |
Fixed Assets, net (Tables) |
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Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net |
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Heidmar Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net |
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Significant Accounting policies (Tables) |
6 Months Ended | |||||||||
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Jun. 30, 2019 | ||||||||||
Significant Accounting policies [Abstract] | ||||||||||
Schedule of intangible assets, Useful lives |
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Significant Accounting Policies (Details) |
6 Months Ended |
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Jun. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Assets, Amortization Method | straight-line |
Property, Plant and Equipment [Line Items] | |
Depreciation method | straight-line |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 1 year |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Transactions with Related Parties - Tanker Pools - (Tables) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Related Party Transaction [Line Items] | ||
Due from related parties | $ 30,036 | $ 27,864 |
Tanker Pools | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 11,954 | |
Accrued unbilled commissions | 1,250 | |
Seawolf Pool | Tanker Pools | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 1,205 | |
Blue Fin Pool | Tanker Pools | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 3,949 | |
Sigma Pool | Tanker Pools | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 5,550 |
Right-of-use Assets and Operating Lease Liability (Details) - Heidmar Inc. |
Jun. 30, 2019 |
---|---|
Vessels | |
Operating Leased Assets, Number of Units | 2 |
Office buildings | |
Operating Leased Assets, Number of Units | 3 |
Financial Instruments and Fair Value Measurements - Available for Sale Debt Securities (Table) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Debt Securities, Available-for-sale, Gain (Loss) [Abstract] | ||
Loss recognized in Accumulated Other Comprehensive Income | $ (151) | |
Income reclassified from Accumulated Other Comprehensive Income into Interest and finance cost | 238 | |
Total gain recognized in Accumulated Other Comprehensive Income | $ 87 | $ 0 |
Finance lease liability (Due to related parties) (Table) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Nov. 19, 2018 |
---|---|---|---|
Finance lease liability | $ 94,639 | $ 71,964 | $ 171,500 |
Less: Current portion | (7,503) | ||
Long-term portion | 87,136 | ||
Netadola bareboat charter | |||
Finance lease liability | 25,143 | ||
Conquistador bareboat charter | |||
Finance lease liability | 23,640 | 24,491 | |
Pink Sands bareboat charter | |||
Finance lease liability | 22,743 | 23,511 | |
Xanadu bareboat charter | |||
Finance lease liability | $ 23,113 | $ 23,962 |
Acquisition of Heidmar (Table) (Details) - Heidmar Inc. $ in Thousands |
5 Months Ended |
---|---|
Jun. 07, 2019
USD ($)
| |
Assets: | |
Cash and cash equivalents | $ 21,344 |
Receivables from affiliates | 10,245 |
Other current assets | 3,174 |
Property and Equipment, net (Note 6) | 1,098 |
Trade Name (Note 7, 13) | 2,555 |
Customer Relationships (Note 7, 13) | 20,677 |
Right of use asset non-current (Note 10) | 36,966 |
Other non-current assets | 750 |
Total assets acquired | 96,809 |
Liabilities: | |
Total current liabilities (Note 10) | 21,950 |
Total non-current liabilities (Notes 10, 21) | 34,922 |
Total liabilities assumed | 56,872 |
Net assets acquired | 39,937 |
Cash consideration paid | 16,825 |
Fair Value of existed interest in Heidmar LLC | 34,000 |
Goodwill on acquisition | $ 10,888 |
Common Stock and Additional Paid-in Capital - Dividends (Details) - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended | 4 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 06, 2018 |
Feb. 27, 2017 |
May 07, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Dividends Payable [Line Items] | |||||
Payment of dividends | $ 2,500 | $ 2,500 | $ 2,500 | $ 0 | $ 5,000 |
Date of dividend record | Feb. 20, 2018 | May 25, 2018 | |||
Date of dividend payment | Mar. 06, 2018 | Jun. 08, 2018 |
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