Navios Maritime Acquisition Corporation Reports Financial Results for the Q2

OREANDA-NEWS. Navios Maritime Acquisition Corporation (“Navios Acquisition”) (NYSE:NNA), an owner and operator of tanker vessels, reported its financial results today for the second quarter and the six month period ended June 30, 2016. 

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “Navios Acquisition reported net income of $12.2 million or $0.08 per share for the second quarter of 2016 and $36.0 million or $0.23 per share for the first half of 2016. This included $1.3 million of profit sharing in the second quarter of 2016 of a total of $7.4 million in the first half of 2016.  We declared a dividend of $0.05 per share for the quarter, resulting in a dividend yield of about 13% on an annualized basis.” 

Angeliki Frangou continued, “NNA has 38 vessels with an average age of 5.4 years, all of which are generating cash flow. Our fleet is 98.2% fixed for 2016 and 56.6% fixed for 2017, and our operating costs are fixed through mid-2018, at rates that are about 11% below industry average through our operating agreements with Navios Holdings.” 

HIGHLIGHTS — RECENT DEVELOPMENTS 

Dividend of $0.05 per share of common stock

On August 10, 2016, the Board of Directors of Navios Acquisition declared a quarterly cash dividend for the second quarter of 2016 of $0.05 per share of common stock. The dividend is payable on September 21, 2016 to stockholders of record as of September 14, 2016 and provides a current annualized yield of 12.7%.

Profit sharing

During the second quarter of 2016, Navios Acquisition benefited from the healthy spot market and earned $1.3 million under its profit sharing arrangements. Profit sharing recognized for the six months ended June 30, 2016 was $7.4 million.

Time Charter Coverage

Navios Acquisition currently owns 38 vessels, of which eight are VLCCs, 26 are product tankers and four are chemical tankers which include the two vessels, the Nave Constellation, a 2013-built chemical tanker of 45,281 dwt, and the Nave Universe, a 2013-built chemical tanker of 45,513 dwt, that Navios Acquisition has agreed to sell following the completion of their chartering commitments, expected during the second half of 2016. 

As of August 18, 2016, Navios Acquisition had contracted 98.2% and 56.6% of its available days on a charter-out basis for 2016 and 2017, respectively, expecting to generate revenues of approximately $256.9 million and $118.7 million, respectively. The average contractual daily charter-out rate for the fleet is expected to be $20,679 and $21,020 for 2016 and 2017, respectively.   

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Acquisition has compiled its consolidated statement of income for the three months and six months ended June 30, 2016 and 2015. The quarterly information for 2016 and 2015 was derived from the unaudited condensed consolidated financial statements for the respective periods.  

(Expressed in thousands of U.S. dollars)			Three Month Period ended June 30,  2016 (unaudited)				Three Month Period ended June 30,  2015 (unaudited)					Six Month Period ended June 30,  2016 (unaudited)				Six Month Period ended June 30, 2015 (unaudited)
Revenue			$	74,495			$	80,408				$	154,914			$	159,019
Net cash provided by operating activities			$	24,176			$	20,034				$	50,237			$	54,144
EBITDA			$	45,186			$	60,398				$	102,954			$	113,606
Adjusted EBITDA(1)			$	45,450			$	55,289				$	101,200			$	109,153
Net income			$	12,184			$	26,362				$	35,954			$	46,396
Adjusted net income (1)			$	12,448			$	22,029				$	34,414			$	42,719
Earnings per share (basic)			$	0.08			$	0.17				$	0.23			$	0.29
Adjusted earnings per share (basic) (1)			$	0.08			$	0.14				$	0.22			$	0.27

(1) Adjusted EBITDA, Adjusted net income and Adjusted earnings per share (basic) for the three month period ended June 30, 2016 in this document exclude non-cash stock-based compensation of $0.3 million.  

Adjusted EBITDA, Adjusted net income and Adjusted earnings per share (basic) for the six month period ended June 30, 2016 in this document exclude gain on sale of vessel of $2.3 million and non-cash stock-based compensation of $0.5 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.2 million write-off of deferred finance cost.  

Adjusted EBITDA, Adjusted net income and Adjusted earnings (basic) for the three month period ended June 30, 2015 in this document exclude stock-based compensation of $0.7 million and gain on sale of vessels of $5.8 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.8 million write off of deferred finance cost and debt prepayment expenses.

Adjusted EBITDA, Adjusted net income and Adjusted earnings (basic) for the six month period ended June 30, 2015 in this document exclude stock-based compensation of $1.3 million and gain on sale of vessels of $5.8 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.8 million write off of deferred finance cost and debt prepayment expenses.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be used in isolation or substitution for Navios Acquisition’s results (see Exhibit II for reconciliation of EBITDA and Adjusted EBITDA). 

Three month periods ended June 30, 2016 and 2015   

Revenue for the three month period ended June 30, 2016 decreased by $5.9 million or 7.4% to $74.5 million, as compared to $80.4 million for the same period of 2015. The decrease was mainly attributable to: (i) the decrease in profit sharing by $7.2 million to $1.3 million recognized in the three month period ended June 30, 2016, as compared to $8.6 million for the same period in 2015; and (ii) the decrease in revenue by $6.9 million due to the sale of two VLCCs in June 2015 and one MR2 tanker vessel in January 2016. The decrease was partially mitigated by the increase in revenue following the deliveries of two vessels from April 2015 until June 30, 2016. Available days of the fleet decreased to 3,437 days for the three month period ended June 30, 2016, as compared to 3,523 days for the three month period ended June 30, 2015. The TCE Rate decreased to $21,380 for the three month period ended June 30, 2016, from $22,541 for the three month period ended June 30, 2015.

EBITDA for the three month period ended June 30, 2016 decreased by $15.2 million to $45.2 million from $60.4 million in the same period of 2015. The decrease in EBITDA was mainly due to: (i) a $5.9 million decrease in revenue; (ii) $5.8 million of gain from sale of vessels recognized in the three month period ended June 30, 2015; (iii) a $2.1 million increase in general and administrative expenses; (iv) a $0.8 million increase in other expense, net; and (v) $0.7 million increase in direct vessel expenses (excluding amortization of dry dock and special survey costs), partially mitigated by a $0.1 million increase in equity in net earnings of affiliated companies. 

Net income for the three month period ended June 30, 2016, decreased by approximately $14.2 million to $12.2 million compared to $26.4 million, for the same period in 2015. The decrease was due to: (i) a decrease of $15.2 million in EBITDA; and (ii) an increase of $0.3 million in amortization of dry docking and special survey costs included in direct vessel expenses. The decrease was partially mitigated by: (a) an increase of $0.6 million in interest income; (b) a decrease of $0.6 million in depreciation and amortization; and (c) a decrease of $0.2 million in interest expense and finance cost.

Six month periods ended June 30, 2016 and 2015

Revenue for the six month period ended June 30, 2016 decreased by $4.1 million or 2.6% to $154.9 million, as compared to $159.0 million for the same period of 2015. The decrease was mainly attributable to: (i) the decrease in profit sharing by $8.8 million to $7.4 million recognized in the six month period ended June 30, 2016, as compared to $16.2 million for the same period in 2015; and (ii) the decrease in revenue by $14.7 million due to the sale of two VLCCs in June 2015 and one MR2 tanker vessel in January 2016. The decrease was partially mitigated by the increase in revenue following deliveries of four vessels during the period from January 2015 until June 30, 2016. Available days of the fleet decreased to 6,914 days for the six month period ended June 30, 2016, as compared to 6,961 days for the six month period ended June 30, 2015. The TCE Rate slightly decreased to $22,055 for the six month period ended June 30, 2016, from $22,531 for the six month period ended June 30, 2015.

EBITDA for the six month period ended June 30, 2016 decreased by $10.7 million to $103.0 million from $113.6 million in the same period of 2015. The decrease in EBITDA was mainly due to: (i) a $4.1 million decrease in revenue; (ii) the decrease in the gain on sale of vessels by $3.5 million; (iii) a $2.4 million increase in general and administrative expenses; (iv) a $1.0 million increase in other expense, net; (v) a $0.3 million increase in time charter expenses; (vi) a $0.2 million increase in management fees; and (vii) $0.7 million increase in direct vessel expenses (excluding amortization of dry dock and special survey costs), partially mitigated by a $1.5 million increase in equity in net earnings of affiliated companies.

Net income for the six month period ended June 30, 2016 decreased by $10.4 million to $36.0 million from $46.4 million for the same period of 2015. The decrease was due to: (i) a decrease of $10.7 million in EBITDA; (ii) an increase of $0.7 million in interest expense and finance cost; and (iii) an increase of $0.6 million in amortization of dry docking and special survey costs included in direct vessel expenses. The decrease was partially mitigated by: (a) an increase of $1.0 million in interest income; and (b) a decrease of $0.6 million in depreciation and amortization.

Fleet Employment Profile

The following table reflects certain key indicators of the performance of Navios Acquisition and its core fleet for the three and six months ended June 30, 2016 and 2015.

		Three month period ended June 30,								Six month period ended June 30,
		2016 (unaudited)				2015 (unaudited)				2016 (unaudited)				2015 (unaudited)
FLEET DATA
Available days(1)			3,437				3,523				6,914				6,961
Operating days(2)			3,428				3,511				6,899				6,936
Fleet utilization(3)			99.8	%			99.7	%			99.8	%			99.7	%
Vessels operating at period end			38				37				38				37
AVERAGE DAILY RESULTS
Time Charter Equivalent (“TCE”) Rate per day(4)		$	21,380			$	22,541			$	22,055			$	22,531

(1) Available days: Available days for the fleet represent the total calendar days the vessels were in Navios Acquisition’s possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
                               
(2) Operating days: Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
                               
(3) Fleet utilization: Fleet utilization is the percentage of time that Navios Acquisition’s vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off hire for reasons other than scheduled repairs, dry dockings or special surveys.                               

(4) TCE Rate: Time Charter Equivalent Rate is defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE Rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels of various types of charter contracts for the number of available days of the fleet.

Conference Call, Webcast and Presentation Details:
As previously announced, Navios Acquisition will host a conference call today, Thursday, August 18, 2016 at 8:30 am ET, at which time Navios Acquisition's senior management will provide highlights and commentary on earnings results for the second quarter and the six month period ended June 30, 2016.

 

									EXHIBIT I
NAVIOS MARITIME ACQUISITION CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in thousands of U.S. Dollars except share data)
				June 30, 2016 (unaudited)				December 31, 2015 (unaudited)
ASSETS
Current assets
Cash and cash equivalents				$	69,536			$	54,805
Restricted cash					6,904				6,840
Accounts receivable, net					15,939				14,202
Due from related parties, short-term					21,661				17,837
Prepaid expenses and other current assets					2,261				3,665
Total current assets					116,301				97,349
Vessels, net					1,335,363				1,441,635
Vessels held for sale					62,072				—
Goodwill					1,579				1,579
Other long-term assets					5,850				1,920
Deferred dry dock and special survey costs, net					10,186				10,326
Investment in affiliates					201,711				204,808
Due from related parties, long-term					28,257				16,474
Total non-current assets					1,645,018				1,676,742
Total assets				$	1,761,319			$	1,774,091
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable				$	2,366			$	2,753
Accrued expenses					13,211				9,802
Deferred revenue					6,516				7,600
Current portion of long-term debt, net of deferred finance cost					74,864				62,643
Total current liabilities					96,957				82,798
Long-term debt, net of current portion, premium and net of deferred finance cost					1,089,901				1,134,940
Deferred gain on sale of assets					8,459				8,982
Total non-current liabilities					1,098,360				1,143,922
Total liabilities				$	1,195,317			$	1,226,720
Commitments and contingencies					—				—
Puttable common stock 450,000 and 650,000 shares issued and outstanding with $4,500 and $6,500 redemption amount as of June 30, 2016 and December 31, 2015, respectively					4,500				6,500
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 1,000 series C shares and 4,000 series A and C shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively					—				—
Common stock, $0.0001 par value; 250,000,000 shares authorized; 150,782,990 and 149,782,990 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively					15				15
Additional paid-in capital					541,384				540,856
Retained earnings					20,103				—
Total stockholders’ equity					561,502				540,871
Total liabilities and stockholders’ equity				$	1,761,319			$	1,774,091

NAVIOS MARITIME ACQUISITION CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Expressed in thousands of U.S. dollars- except share and per share data)
				For the Three					For the Three					For the Six						For the Six
				Months					Months					Months						Months
				Ended					Ended					Ended						Ended
				June 30, 2016					June 30, 2015					June 30, 2016						June 30, 2015
				(unaudited)					(unaudited)					(unaudited)						(unaudited)
Revenue				$	74,495				$	80,408						$	154,914			$	159,019
Time charter and voyage expenses					(1,017		)			(996		)					(2,438	)			(2,186		)
Direct vessel expenses					(1,405		)			(348		)					(2,049	)			(697		)
Management fees					(24,318		)			(24,293		)					(48,504	)			(48,335		)
General and administrative expenses					(5,981		)			(3,903		)					(9,510	)			(7,068		)
Depreciation and amortization					(14,294		)			(14,880		)					(29,177	)			(29,771		)
Gain on sale of vessels					—					5,771							2,282				5,771
Interest income					880					302							1,534				573
Interest expense and finance cost					(18,913		)			(19,110		)					(38,038	)			(37,315		)
Equity in net earnings of affiliated companies					3,731					3,651							8,622				7,089
Other expense, net					(994		)			(240		)					(1,682	)			(684		)
Net income				$	12,184				$	26,362						$	35,954			$	46,396
Dividend on Series B preferred shares					—					(27		)					—				(54		)
Dividend on Series D preferred shares					—					(61		)					—				(199		)
Dividend declared on restricted shares					(35		)			(70		)					(70	)			(140		)
Undistributed income attributable to Series C participating preferred shares					(591		)			(1,271		)					(1,752	)			(2,233		)
Net income attributable to common shareholders, basic				$	11,558				$	24,933						$	34,132			$	43,770
Dividend on Series B preferred shares					—					27							—				54
Dividend on Series D preferred shares					—					61							—				199
Dividend declared on restricted shares					35					70							70				140
Net income attributable to common shareholders, diluted				$	11,593				$	25,091						$	34,202			$	44,163
Net income per share, basic				$	0.08				$	0.17						$	0.23			$	0.29
Weighted average number of shares, basic					150,084,084					150,580,595							149,668,699				150,455,682
Net income per share, diluted				$	0.08				$	0.16						$	0.23			$	0.29
Weighted average number of shares, diluted					150,784,089					154,197,621							150,836,836				154,340,946

NAVIOS MARITIME ACQUISITION CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of U.S. dollars)
				For the Six Months Ended June 30, 2016 (unaudited)					For the Six Months Ended June 30, 2015 (unaudited)
Operating Activities
Net income				$	35,954				$	46,396
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					29,177					29,771
Amortization and write-off of deferred finance cost and bond premium					1,864					1,993
Amortization of deferred dry dock and special survey costs					1,319					697
Stock based compensation					528					1,318
Gain on sale of vessels					(2,282		)			(5,771		)
Equity in net earnings of affiliated companies, net of dividends received					(833		)			(1,159		)
Changes in operating assets and liabilities:
Decrease in prepaid expenses and other current assets					1,404					1,388
Increase in accounts receivable					(1,737		)			(3,143		)
Increase in due from related parties short-term					(3,824		)			(2,860		)
Increase in restricted cash					(64		)			(50		)
(Increase)/ decrease in other long term assets					(3,930		)			210
(Decrease)/ increase in accounts payable					(387		)			726
Increase in accrued expenses					3,409					638
Payments for dry dock and special survey costs					(2,324		)			—
Increase in due from related parties long-term					(6,430		)			—
Decrease in due to related parties					—					(17,462		)
(Decrease)/ increase in deferred revenue					(1,607		)			1,452
Net cash provided by operating activities				$	50,237				$	54,144
Investing Activities
Acquisition of vessels					—					(29,397		)
Dividends received from affiliates					2,853					757
Net proceeds from sale of vessels					18,449					71,224
Investment in affiliates					—					(4,826		)
Loans receivable from affiliates					(4,275		)			(3,289		)
Net cash provided by investing activities				$	17,027				$	34,469
Financing Activities
Loan proceeds, net of deferred finance cost					—					25,954
Loan repayments					(34,682		)			(64,198		)
Dividend paid					(15,851		)			(16,170		)
Payment to related party					—					(11,265		)
Decrease in restricted cash					—					(130		)
Redemption of convertible shares and puttable common stock					(2,000		)			(3,500		)
Net cash used in financing activities				$	(52,533		)		$	(69,309		)
Net increase in cash and cash equivalents					14,731					19,304
Cash and cash equivalents, beginning of year					54,805					54,493
Cash and cash equivalents, end of period				$	69,536				$	73,797

														EXHIBIT II
Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities
		Three Month				Three Month				Six Month				Six Month
		Period				Period				Period				Period
		Ended				Ended				Ended				Ended
		June 30,				June 30,				June 30,				June 30,
		2016				2015				2016				2015
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Expressed in thousands of U.S. dollars
Net cash provided by operating activities		$	24,176			$	20,034			$	50,237			$	54,144
Net (decrease)/ increase in operating assets			(5,054	)			(677	)			16,905				4,455
Net decrease/ (increase) in operating liabilities			8,774				20,666				(1,415	)			14,646
Net interest cost			18,033				18,808				36,504				36,742
Amortization of deferred finance cost			(822	)			(1,263	)			(1,864	)			(1,993	)
Earnings in affiliates, net of dividends received			343				(2,279	)			833				1,159
Stock based compensation			(264	)			(662	)			(528	)			(1,318	)
Gain on sale of vessels			—				5,771				2,282				5,771
EBITDA			45,186				60,398				102,954				113,606
Stock based compensation			264				662				528				1,318
Gain on sale of vessels			—				(5,771	)			(2,282	)			(5,771	)
Adjusted EBITDA		$	45,450			$	55,289			$	101,200			$	109,153
		Three Month				Three Month				Six Month				Six Month
		Period				Period				Period				Period
		Ended				Ended				Ended				Ended
		June 30,				June 30,				June 30,				June 30,
		2016				2015				2016				2015
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Net cash provided by operating activities		$	24,176			$	20,034			$	50,237			$	54,144
Net cash provided by investing activities		$	1,935			$	61,902			$	17,027			$	34,469
Net cash used in financing activities		$	(21,216	)		$	(65,742	)		$	(52,533	)		$	(69,309	)

Disclosure of Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA 

EBITDA for the three and six months ended June 30, 2016 in this document represents net income plus interest and finance costs plus depreciation and amortization and income taxes less interest income.

Adjusted EBITDA for the three and six months ended June 30, 2016 in this document represents, net income plus interest expense and finance cost, plus depreciation and amortization less interest income, unless otherwise stated and excludes certain items as described under “Financial Highlights.”

EBITDA and Adjusted EBITDA represent net income before interest and finance cost, before depreciation and amortization, income taxes, gain on sale of vessel and stock-based compensation. We use EBITDA and Adjusted EBITDA as liquidity measures and reconcile Adjusted EBITDA to net cash provided by/ (used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA and Adjusted EBITDA in this document are calculated as follows: net cash provided by/(used in) operating activities adding back, when applicable and as the case may be, the effect of: (i) net increase/(decrease) in operating assets; (ii) net (increase)/decrease in operating liabilities; (iii) net interest cost; (iv) amortization of deferred finance cost and other related expenses; (v) provision for losses on accounts receivable; (vi) equity in net earnings of affiliated companies, net of dividends received; (vii) payments for dry dock and special survey costs; (viii) gain/(loss) on sale of assets/subsidiaries; and (ix) impairment charges. Navios Acquisition believes that EBITDA and Adjusted EBITDA are the basis upon which liquidity can be assessed and present useful information to investors regarding Navios Acquisition’s ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Acquisition also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.