Safe Bulkers, Inc. Reports Second Quarter and Six Months 2017 Results

MONACO–(Marketwired – Jul 26, 2017) – Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three and six months period ended June 30, 2017.
Summary of Second Quarter 2017 Results

Net revenue for the second quarter of 2017 increased by 34% to $35.0 million from $26.2 million during the same period in 2016.

Net loss for the second quarter of 2017 was $1.6 million as compared to $9.0 million, during the same period in 2016. Adjusted net loss(1) for the second quarter of 2017 was $2.3 million as compared to $8.7 million, during the same period in 2016.

EBITDA(2) for the second quarter of 2017 increased to $17.0 million as compared to $8.4 million during the same period in 2016. Adjusted EBITDA3 for the second quarter of 2017 increased to $16.2 million from $8.8 million during the same period in 2016.

Loss per share4 and Adjusted loss per share4 for the second quarter of 2017 were $0.07 and $0.07 respectively, calculated on a weighted average number of 101,363,578 shares, compared to a Loss per share of $0.15 and Adjusted loss per share of $0.15 during the same period in 2016, calculated on a weighted average number of 83,571,957 shares.

Summary of Six Months Ended June 30, 2017 Results

Net revenues for the six months of 2017 increased by 34% to $68.3 million from $50.9 million during the same period in 2016.

Net loss for the six months of 2017 was $4.9 million as compared to $26.8 million, during the same period in 2016. Adjusted net loss1 for the six months of 2017 was $5.8 million as compared to $23.0 million, during the same period in 2016.

EBITDA2 for the six months of 2017 increased to $32.3 million as compared to $8.7 million during the same period in 2016. Adjusted EBITDA3 for the six months of 2017 increased to $31.4 million as compared to $12.5 million during the same period in 2016.

Loss per share4 and Adjusted loss per share4 for the six months of 2017 were $0.13 and $0.14, respectively, calculated on a weighted average number of 100,329,624 shares, as compared to Loss per share4 of $0.40 and Adjusted Loss per share4 of $0.36 during the same period in 2016, calculated on a weighted average number of 83,557,124 shares.

1 Adjusted Net income/(loss) is a non-GAAP measure. Adjusted Net income/(loss) represents Net income/(loss) before loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency. See Table 1.
2 EBITDA is a non-GAAP measure and represents Net income/(loss) plus net interest expense, tax, depreciation and amortization. See Table 1.
3 Adjusted EBITDA is a non-GAAP measure and represents EBITDA before loss on sale of assets, gain/( loss) on derivatives and gain/(loss) on foreign currency. See Table 1.
4 Earnings/(loss) per share and Adjusted Earnings/(loss) per share represent Net Income/(loss) and Adjusted Net income/(loss) less preferred dividend and preferred deemed dividend divided by the weighted average number of shares respectively. See Table 1.
Fleet and Employment Profile
As of July 19, 2017, our operational fleet comprised of 38 drybulk vessels with an average age of 7.1 years and an aggregate carrying capacity of 3.4 million dwt. Our fleet consists of 14 Panamax class vessels, nine Kamsarmax class vessels, 12 post- Panamax class vessels and three Capesize class vessels, all built 2003 onwards. Taking into account our last contracted drybulk newbuild Kamsarmax class vessel, scheduled for delivery in 2018, our fleet will comprise of 39 vessels, 11 of which will be eco-design vessels, with an aggregate carrying capacity of 3.5 million dwt, assuming no additional vessel acquisitions or disposals.
Set out below is a table showing the Company’s existing and newbuild vessels and their contracted employment as of July 19, 2017:

Vessel Name
DWT
Year Built
Country of construction
Gross Charter Rate  [USD/day]
Charter Duration1

Panamax

Maria
76,000
2003
  Japan
6,500
Aug 2016 – Feb 2018

Koulitsa
76,900
2003
  Japan
7,5002
Jan 2017 – Apr 2018

Paraskevi
74,300
2003
  Japan
           7,400
Apr 2017 – Jun 2018

Vassos
76,000
2004
  Japan
7,5003
Jan 2017 – Mar 2018

Katerina
76,000
2004
  Japan
7,500
Apr 2017 – Jun 2018

Maritsa
76,000 2005
  Japan
6,750
8,000
10,100
Jul 2016 – Jul 2017
Jul 2017 – Aug 2017
Aug 2017 – Aug 2018

Efrossini
75,000
2012
  Japan
8,500
Feb  2017 – Jul 2017

Zoe
75,000
2013
  Japan

6,2004
Aug 2016 – Nov 2017

Kypros Land
77,100
2014
  Japan
12,300
     Jul 2017  – Sep 2017

Kypros Sea
77,100
2014
  Japan
11,250
Jul 2017 – May 2018

Kypros Bravery
78,000
2015
  Japan
7,500
Sep 2016 – May 2018

Kypros Sky
77,100
2015
  Japan
9,100
Dec 2016 – Feb 2018

Kypros Loyalty
78,000
2015
  Japan
6,250
Jun 2016 – Sep 2017

Kypros Spirit
78,000
2016
          Japan
           11,750
Apr 2017 – Jul 2017

Kamsarmax

Pedhoulas Merchant
82,300
2006
  Japan
6,000
Jun 2016 – Sep 2017

Pedhoulas Trader
82,300
2006
  Japan
6,200
11,600
Jul 2016 – Sep 2017 Sep 2017 – Aug 2018

Pedhoulas Leader
82,300
2007
  Japan
10,550
Mar 2017- Dec 2017

Pedhoulas Commander
83,700
2008
  Japan
10,150
June 2017 – Feb 2018

Pedhoulas Builder 5
81,600
2012
  China
8,4007
Apr 2017 – Jun 2018

Pedhoulas Fighter 5
81,600
2012
  China
8,475
Jun 2017 – Jan 2018

Pedhoulas Farmer 6
    81,600
      2012
          China
           10,675
Mar 2017 – Dec 2017

Pedhoulas Cherry 6
82,000
2015
  China

6,600

     Apr 2017 – Oct 2018

Pedhoulas Rose 6
82,000
2017
  China
8,500 8
Jan 2017 – Mar 2018

Post-Panamax

Marina
87,000
2006
  Japan
9,000
Jun 2017 – Jul 2017

Xenia
87,000
2006
  Japan
 10,000 9
Feb 2017 – Jun 2018

Sophia
87,000
2007
  Japan
7,250
Apr 2016 – Nov 2018

Eleni
87,000
2008   Japan
9,750
Feb 2017 – Jul 2017

Martine
87,000
2009
  Japan
10,150
Jun 2017 – Aug 2017

Andreas K
92,000
2009
  South Korea
8,300
Jun 2017 – Aug 2017

Panayiota K
92,000
2010
  South Korea
7,500
17,500
Jun 2017 – Jul 2017       Jul 2017 – Aug 2017

Venus Heritage
95,800
2010
  Japan
8,600
Feb 2017 – Nov 2017

Venus History
95,800
2011
  Japan
8,850
Feb 2017 – Oct 2017

Venus Horizon
95,800
2012
  Japan
9,250
Jun 2017 – Oct 2017

Troodos Sun
85,000
2016
  Japan
         12,731
May 2017 – Jul 2017

Troodos Air
85,000
2016
  Japan
    11,350 10
Mar 2017 – Jul 2018

Capesize

Kanaris
178,100
2010
  China
  25,928
Sep 2011 – Jun 2031

Pelopidas
176,000
2011
  China
  38,000
Feb 2012 – Dec 2021

Lake Despina 181,400
2014
  Japan
     24,376 11
Jan 2014 – Jan 2024

Total dwt of existing fleet
3,421,800
 

 
 
 
 
 
 

Hull Number
DWT
Expected delivery
Country of construction
Gross Charter Rate  [USD/day]
Charter Duration1

Kamsarmax
 
 
 
 
 

Hull 1552
81,600
H1 2018
Japan
 
 

Total dwt of orderbook
81,600
 
 
 
 

1) The start date represents either the actual start date or, in the case of a contracted charter that had not commenced as of July 19, 2017, the scheduled start date. The actual start date and redelivery date may differ from the referenced scheduled start and redelivery dates depending on the terms of the charter and market conditions and does not reflect the options to extend the period time charter.
2) The charter agreement grants the charterer the option to extend the period time charter for an additional 10 to 14 months period at a gross daily charter rate of $9,000.
3) The charter agreement grants the charterer the option to extend the period time charter for an additional 10 to 14 months period at a gross daily charter rate of $9,000.
4) The charter agreement grants the charterer the option to extend the period time charter for an additional 10 to 15 months period at a gross daily charter rate of $8,200.
5) Vessel sold and leased back on a net daily bareboat charter rate of $6,500 for a period of 10 years, for which the Company agreed to exercise its purchase option in September 2017, at a predetermined purchase price.
6) Vessel sold and leased back on a net daily bareboat charter rate of $6,500 for a period of 10 years, with a purchase obligation at the end of the 10th year and purchase options in favor of the Company after the second year of the bareboat charter, at annual intervals and predetermined purchase prices.
7) The charter agreement grants the charterer the option to extend the period time charter for an additional 10 to 14 months period at a gross daily charter rate of $9,900.
8) The charter agreement grants the charterer the option to extend the period time charter for an additional 11 to 14 months period at a gross daily charter rate of $10,000.
9) The charter agreement grants the charterer the option to extend the period time charter for an additional 12 to 16 months period at a gross daily charter rate of $12,500.
10) The charter agreement grants the charterer the option to extend the period time charter for an additional 12 to 16 months period at a gross daily charter rate of $12,500.
11) A period time charter of ten years at a gross daily charter rate of $23,100 for the first two and a half years and of $24,810 for the remaining period. In January 2017, the period time charter was amended to reflect substitution of the initial charterer with its subsidiary guaranteed by the initial charterer and changes in payment terms; all other charter terms remained unchanged. The charter agreement grants the charterer an option to purchase the vessel at any time beginning at the end of the seventh year of the charter, at a price of $39 million less a 1.00% commission, decreasing thereafter on a pro-rated basis by $1.5 million per year. The Company holds a right of first refusal to buy back the vessel in the event that the charterer exercises its option to purchase the vessel and subsequently offers to sell such vessel to a third party. The charter agreement also grants the charterer the option to extend the period time charter for an additional twelve months at a time at a gross daily charter rate of $26,330, less 1.25% total commissions, which option may be exercised by the charterer a maximum of two times.
The contracted employment of fleet ownership days as of July 19, 2017 was:

2017 (remaining)
 
73%

2017 (full year)
 
88%

2018
 
27%

2019
 
8%

Order book, capital expenditure requirements and liquidity as of July 19, 2017 The remaining order book consisted of one newbuild vessel; our wholly-owned subsidiary Pinewood Shipping Corporation has contracted to acquire Hull No. 1552 with scheduled delivery date in 2018 and has agreed to issue $16.9 million of preferred equity to an unaffiliated investor upon delivery.
The remaining capital expenditure requirements amounted to $31.4 million, consisting of $4.1 million payable in 2017 and $27.3 million payable in 2018
We had liquidity of $98.9 million, consisting of $86.7 million in cash and bank time deposits and $12.2 million in restricted cash, in addition to $16.9 million of preferred equity financing and the capacity to borrow against one unencumbered vessel.
Update on the sale and leaseback transaction
In June 2017, we exercised options under the sale and leaseback agreements to purchase two Kamsarmax class vessels at an aggregate predetermined price of $43.8 million. The transaction will consummate in September 2017, and the Company will finance the acquisition of the vessels through cash on hand and committed credit facilities of up to $30.0 million.
The sale and leaseback transaction has been accounted as a financing transaction. Following the exercise of the purchase options, the outstanding obligation of these two vessels, amounting to $43.5 million as of end June 2017, has been included in the current portion of long term debt. Deferred finance costs will be written off upon the consummation of the transaction.
Preferred Shares Exchange offer
In March 2017, the Company announced the commencement of an exchange offer (the “Exchange Offer”) for any and all of its outstanding 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share (the “Series B Preferred Shares”). The Exchange Offer expired and was settled in April 2017.
Holders who elected to exchange their Series B Preferred Shares in the Exchange Offer received, for each such Series B Preferred Share, (i) $22.50 in cash and (ii) two newly issued shares of common stock of the Company.
Pursuant to the Exchange Offer, a total of 1,106,254 Series B Preferred Shares were tendered, representing 74.46% of the 1,485,768 Series B Preferred Shares outstanding at the commencement of the Exchange Offer. The Exchange Offer resulted in a cash payment of $24.9 million and the issuance of 2,212,508 shares of common stock to holders of validly tendered and accepted Series B Preferred Shares. Following settlement of the Exchange Offer, 379,514 shares of the Series B Preferred Shares remained outstanding.
The difference of $2.1 million, between (i) the cash paid to the preferred shareholders and the fair value of issued common shares and (ii) the carrying amount of the preferred stock immediately before the exchange net of issuance costs, was recorded as preferred deemed dividend during the second quarter of 2017.
Dividend Policy
The Company has not declared a dividend on the Company’s common stock for the second quarter of 2017. The Company had 101,515,760 shares of common stock issued and outstanding as of July 19, 2017.
The Company declared in July a cash dividend of $0.50 per share on its 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.B), on its 8.00% Series C Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.C) and on its 8.00% Series D Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.D) for the period from April 30, 2017 to July 29, 2017 payable on July 31, 2017 to the respective shareholders of record as of July 24, 2017.
The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) the Company’s earnings, financial condition and cash requirements and available sources of liquidity; (ii) decisions in relation to the Company’s growth and leverage strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future debt instruments; and (v) global economic and financial conditions.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: “In the second quarter of 2017, we continued to see improved rates for our new time charters resulting in improved quarterly revenues on a year over year basis. We are also targeting to reduce our financial outflows by refinancing two Kamsarmax vessels which were under a sale and leaseback arrangement”.
Conference Call
On Thursday, July 27, 2017 at 8:30 A.M. Eastern Time, the Company’s management team will host a conference call to discuss the Company’s financial results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111 (US Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote “Safe Bulkers” to the operator.
A telephonic replay of the conference call will be available until August 3, 2017 by dialing 1 (866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 1859591#
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the conference call, available through the Company’s website (www.safebulkers.com). Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Management Discussion of Second Quarter 2017 Results
Net loss for the second quarter of 2017 decreased to $1.6 million compared to net loss of $9.0 million during the same period in 2016, mainly due to the following factors:
Net revenues: Net revenues increased by 34% to $35.0 million for the second quarter of 2017, compared to $26.2 million for the same period in 2016, mainly due to an increase in charter rates and to a lesser extent an increase in the average number of vessels. The Company operated 38.00 vessels on average during the second quarter of 2017, earning a TCE(6) rate of $9,978, compared to 36.00 vessels and a TCE rate of $7,675 during the same period in 2016.
Interest expenses: Interest expense increased to $5.9 million in the second quarter of 2017 compared to $4.9 million for the same period in 2016, as a result of the increase in the weighted average interest rate of our loans and credit facilities.
6 Time charter equivalent rates, or TCE rate, represent the Company’s charter revenues less commissions and voyage expenses during a period divided by the number of our available days during such period.
4 See Table 2.
7 See Table 2.
8 Safety Management Overseas S.A. and Safe Bulkers Management Limited, each of which is a related party that is referred to in this press release as “our Manager” and collectively “our Managers”.
Vessel operating expenses: Vessel operating expenses, which include dry-docking cost and initial supplies expenses, increased to $13.5 million for the second quarter of 2017 compared to $12.5 million for the same period in 2016, mainly as a result of the increased average number of vessels by 6% to 38.00 vessels, from 36.00 vessels respectively. Furthermore, vessel operating expenses for the second quarter of 2017 included the cost of three dry-dockings, compared to one dry-docking during second quarter of 2016. 
Daily vessel operating expenses(7): Daily vessel operating expenses which are calculated by dividing vessel operating expenses for the relevant period by ownership days for such period, increased by 2% to $3,893 for the second quarter of 2017 compared to $3,814 for the same period in 2016.
Daily general and administrative expenses7: Daily general and administrative expenses, which include management fees payable to our Managers(8), increased by 4% to $1,157 for the second quarter of 2017, compared to $1,115 for the same period in 2016.

 
 

Unaudited Interim Financial Information and Other Data
 

 
 

SAFE BULKERS, INC.
 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 

(In thousands of U.S. Dollars except for share and per share data)
 

 
 

 
 
Three-Months Period Ended June 30,
 
 
Six-Months Period Ended June 30,
 

 
 
2016
 
 
2017
 
 
2016
 
 
2017
 

REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 

 
Revenues
 
27,189
 
 
36,431
 
 
52,817
 
 
71,094
 

 
Commissions
 
(949
)
 
(1,421
)
 
(1,877
)
 
(2,757
)

 
Net revenues
 
26,240
 
 
35,010
 
 
50,940
 
 
68,337
 

EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 

 
Voyage expenses
 
(1,180
)
 
(1,014
)
 
(4,971
)
 
(2,466
)

 
Vessel operating expenses
 
(12,494
)
 
(13,462
)
 
(24,583
)
 
(25,704
)

 
Depreciation
 
(12,260
)
 
(12,831
)
 
(24,126
)
 
(25,471
)

 
General and administrative expenses
 
(3,653
)
 
(4,002
)
 
(7,628
)
 
(7,937
)

 
Loss on sale of assets
 

 
 

 
 
(2,750
)
 
(120
)

 
Other operating expense
 

 
 

 
 

 
 
(475
)

 
Operating (loss)/income
 
(3,347
)
 
3,701
 
 
(13,118
)
 
6,164
 

 
 
 
 
 
 
 
 
 
 
 
 
 

OTHER (EXPENSE) / INCOME:
 
 
 
 
 
 
 
 
 
 
 
 

 
Interest expense
 
(4,864
)
 
(5,893
)
 
(9,685
)
 
(11,594
)

 
Other finance costs
 
(161
)
 
(296
)
 
(1,247
)
 
(345
)

 
Interest income
 
151
 
 
257
 
 
288
 
 
393
 

 
(Loss)/gain on derivatives
 
(265
)
 
(46
)
 
(1,228
)
 
55
 

 
Foreign currency (loss)/gain
 
(109
)
 
789
 
 
190
 
 
984
 

 
Amortization and write-off of deferred finance charges
 
(431
)
 
(108 )
 
(2,011
)
 
(507
)

 
Net loss
 
(9,026
)
 
(1,596
)
 
(26,811
)
 
(4,850
)

 
Less Preferred dividend
 
3,512
 
 
2,942
 
 
7,027
 
 
6,435
 

 
Less Preferred deemed dividend
 

 
 
2,146
 
 

 
 
2,146
 

 
Net loss available to common shareholders
 
(12,538
)
 
(6,684
)
 
(33,838
)
 
(13,431
)

 
Loss per share basic and diluted
 
(0.15
)
 
(0.07
)
 
(0.40
)
 
(0.13
)

Weighted average number of shares
 
83,571,957
 
 
101,363,578
 
 
83,557,124
 
 
100,329,624
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 

 
 
Six Months Period Ended
June 30,
 

 
 
2016
 
 
2017
 

(In millions of U.S. Dollars)
 
 
 
 
 
 
 
 

CASH FLOW DATA
 
 
 
 
 
 
 
 

Net cash (used in)/provided by operating activities
 
$
(1.0
)
 
$
26.6
 

Net cash provided by/(used in) investing activities
 
 
19.3
 
 
 
(23.4
)

Net cash used in financing activities
 
 
(66.0
)
 
 
(14.7
)

Net decrease in cash and cash equivalents
 
 
(47.7
)
 
 
(11.5
)

 
 
 
 
 
 
 
 
 

 

SAFE BULKERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands of U.S. Dollars)

 

 
 
December 31, 2016
 
June 30, 2017

ASSETS
 
 
 
 

 
Cash, restricted cash and time deposits
 
94,813
 
89,557

 
Other current assets
 
16,195
 
12,901

 
Vessels, net
 
1,038,719
 
1,044,069

 
Advances for vessel acquisition and vessels under construction
 
13,007
 

 
Restricted cash non-current
 
10,002
 
8,151

 
Other non-current assets
 
1,017
 
815

 
Total assets
 
1,173,753
 
1,155,493

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

LIABILITIES AND EQUITY
 
 
 
 

 
Other current liabilities
 
11,602
 
13,647

 
Current portion of long-term debt, net
 
12,177
 
53,946

 
Long-term debt, net
 
569,781
 
545,381

 
Other non-current liabilities
 
1,657
 
500

 
Shareholders’ equity
 
578,536
 
542,019

 
Total liabilities and equity
 
1,173,753
 
1,155,493

 
 
 
 
 

 
 

TABLE 1
 

RECONCILIATION OF ADJUSTED NET LOSS, EBITDA, ADJUSTED EBITDA AND ADJUSTED LOSS PER SHARE
 

 
 

 
 
Three-Months
Period Ended June 30,
 
 
Six-Months
Period Ended June 30,
 

(In thousands of U.S. Dollars except for share and per share data)
 
2016
 
 
2017
 
 
2016
 
 
2017
 

Net Loss – Adjusted Net Loss
 
 
 
 
 
 
 
 
 
 
 
 

Net loss
 
(9,026
)
 
(1,596
)
 
(26,811
)
 
(4,850
)

Plus Loss on sale of assets
 

 
 

 
 
2,750
 
 
120
 

Plus Loss/(gain) on derivatives
 
265
 
 
46
   
1,228
 
 
(55
)

Plus Foreign currency loss/(gain)
 
109
 
 
(789
)
 
(190
)
 
(984
)

Adjusted Net loss
 
(8,652
)
 
(2,339
)
 
(23,023
)
 
(5,769
)

 
 
 
 
 
 
 
 
 
 
 
 
 

EBITDA – Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
 

Net loss
 
(9,026
)
 
(1,596
)
 
(26,811
)
 
(4,850
)

Plus Net Interest expense
 
4,713
 
 
5,636
 
 
9,397
 
 
11,201
 

Plus Depreciation
 
12,260
 
 
12,831
 
 
24,126
 
 
25,471
 

Plus Amortization
 
431
 
 
108
 
 
2,011
 
 
507
 

EBITDA
 
8,378
 
 
16,979
 
 
8,723
 
 
32,329
 

Plus Loss on sale of assets
 

 
 

 
 
2,750
 
  120
 

Plus Loss/(gain) on derivatives
 
265
 
 
46
 
 
1,228
 
 
(55
)

Plus Foreign currency loss/(gain)
 
109
 
 
(789
)
 
(190
)
 
(984
)

ADJUSTED EBITDA
 
8,752
 
 
16,236
 
 
12,511
 
 
31,410
 

 
 
 
 
 
 
 
 
 
 
 
 
 

Loss per share
 
 
 
 
 
 
 
 
 
 
 
 

Net loss
 
(9,026
)
 
(1,596
)
 
(26,811
)
 
(4,850
)

Less Preferred dividend
 
3,512
 
 
2,942
 
 
7,027
 
 
6,435
 

Less Preferred deemed dividend
 

 
 
2,146
 
 

 
 
2,146
 

Net loss available to common shareholders
 
(12,538
)
 
(6,684
)
 
(33,838
)
 
(13,431
)

Weighted average number of shares
 
83,571,957
 
 
101,363,578
 
 
83,557,124
 
 
100,329,624
 

Loss per share  
(0.15
)
 
(0.07
)
 
(0.40
)
 
(0.13
)

 
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted Loss per share
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted Net loss
 
(8,652
)
 
(2,339
)
 
(23,023
)
 
(5,769
)

Less Preferred dividend
 
3,512
 
 
2,942
 
 
7,027
 
 
6,435
 

Less Deemed dividend
 

 
 
2,146
 
 

 
 
2,146
 

Adjusted Net loss available to common shareholders
 

(12,164
)
 

(7,427
)
 

(30,050
)
 

(14,350
)

Weighted average number of shares
 
83,571,957
 
 
101,363,578
 
 
83,557,124
 
 
100,329,624
 

Adjusted Loss per share
 
(0.15
)
 
(0.07
)
 
(0.36
)
 
(0.14
)

 
 
 
 
 
 
 
 
 
 
 
 
 

EBITDA, Adjusted EBITDA, Adjusted Net loss and Adjusted loss per share are not recognized measurements under US GAAP.

EBITDA represents Net income/(loss) before interest, income tax expense, depreciation and amortization.

Adjusted EBITDA represents EBITDA before loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency.

Adjusted Net loss represents Net loss before loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency.

Adjusted Loss per share represent Adjusted Net loss less preferred dividend and preferred deemed dividend divided by the weighted average number of shares.

EBITDA, Adjusted EBITDA, Adjusted Net loss and Adjusted loss per share are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Company believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Company believes that including these supplemental financial measures assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our financial and operational performance in assessing whether to continue investing in us.
The Company believes that EBITDA, Adjusted EBITDA, Adjusted Net loss and Adjusted loss per share are useful in evaluating the Company’s operating performance from period to period because the calculation of EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, the calculation of Adjusted EBITDA generally further eliminates the effects from loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency, items which may vary from year to year and for different companies for reasons unrelated to overall operating performance. Furthermore, the calculation of Adjusted Net loss generally eliminates the effects of loss on sale of assets, gain/(loss) on derivatives and gain/(loss) on foreign currency, items which may vary from year to year and for different companies for reasons unrelated to overall operating performance.
EBITDA, Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted Earnings/(loss) per share have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under US GAAP. EBITDA, Adjusted EBITDA, Adjusted Net Loss should not be considered as substitutes for net income and other operations data prepared in accordance with US GAAP or as a measure of profitability. While EBITDA and Adjusted EBITDA Adjusted Net income/(loss) and Adjusted Earnings/(loss) per share, are frequently used as measures of operating results and performance, they are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
In evaluating Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted Earnings/(loss) per share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA, Adjusted Net Loss and Adjusted Loss per share should not be construed as an inference that our future results will be unaffected by the excluded items.

 
 

TABLE 2: FLEET DATA AND AVERAGE DAILY INDICATORS

 

 
 

Three-Months
Period Ended
June 30,
 
 
Six-Months
Period Ended
June 30,
 

 
 
2016
 
 
2017
 
 
2016
 
 
2017
 

 
 
 
 
 
 
 
 
 
 
 
 
 

FLEET DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Number of vessels at period’s end
 
 
36
 
 
 
38
 
 
 
36
 
 
 
38
 

Average age of fleet (in years)
 
 
6.35
 
 
 
7.00
 
 
 
6.35
 
 
 
7.00
 

Ownership days (1)
 
 
3,276
 
 
 
3,458
 
 
 
6,585
 
 
 
6,862
 

Available days (2)
 
 
3,265
 
 
 
3,407
 
 
 
6,555
 
 
 
6,792
 

Operating days (3)
 
 
3,209
 
 
 
3,370
 
 
 
6,374
 
 
 
6,703
 

Fleet utilization (4)
 
 
98.0
%
 
 
97.5
%
 
 
96.8
%
 
 
97.7
%

Average number of vessels in the period (5)
 
 
36.00
 
 
 
38.00
 
 
 
36.18
 
 
 
37.91
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

AVERAGE DAILY RESULTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Time charter equivalent rate (6)
 
$
7,675
 
 
$
9,978
 
 
$
7,013
 
 
$
9,698  

Daily vessel operating expenses (7)
 
$
3,814
 
 
$
3,893
 
 
$
3,733
 
 
$
3,746
 

Daily general and administrative expenses (8)
 
$
1,115
 
 
$
1,157
 
 
$
1,158
 
 
$
1,157
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1) Ownership days represents the aggregate number of days in a period during which each vessel in our fleet has been owned by us.
2) Available days represents the total number of days in a period during which each vessel in our fleet was in our possession, net of off-hire days associated with scheduled maintenance, which includes major repairs, drydockings, vessel upgrades or special or intermediate surveys.
3) Operating days represents the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, excluding scheduled maintenance.
4) Fleet utilization is calculated by dividing the number of our operating days during a period by the number of our ownership days during that period.
5) Average number of vessels in the period is calculated by dividing ownership days in the period by the number of days in that period.
6) Time charter equivalent rate, or TCE rate, represents our charter revenues less commissions and voyage expenses during a period divided by the number of available days during such period.
7) Daily vessel operating expenses include the costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys and other miscellaneous items. Daily vessel operating expenses are calculated by dividing vessel operating expenses for the relevant period by ownership days for such period.
8) Daily general and administrative expenses include daily management fees payable to our Manager and costs in relation to our operation as a public company. Daily general and administrative expenses are calculated by dividing general and administrative expenses for the relevant period by ownership days for such period.
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for some of the world’s largest users of marine drybulk transportation services. The Company’s common stock, series B preferred stock, series C preferred stock and series D preferred stock are listed on the NYSE, and trade under the symbols “SB”, “SB.PR.B”, “SB.PR.C”, and “SB.PR.D”, respectively.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Exchange Act of 1933, as amended, and in Section 21E of the Securities Act of 1934, as amended) concerning future events, the Company’s growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for drybulk vessels, competitive factors in the market in which the Company operates, risks associated with operations outside the United States and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

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