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EX-32.2 - EX-32.2 - GENCO SHIPPING & TRADING LTDgnk-20170930ex322240a00.htm
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EX-31.2 - EX-31.2 - GENCO SHIPPING & TRADING LTDgnk-20170930ex312d7ba7b.htm
EX-31.1 - EX-31.1 - GENCO SHIPPING & TRADING LTDgnk-20170930ex3114d439c.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2017

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934

 

For the transition period from           to         

 

Commission file number 001-33393

 


 

GENCO SHIPPING & TRADING LIMITED

(Exact name of registrant as specified in its charter)

 

 

 

 

Republic of the Marshall Islands

 

98-043-9758

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

299 Park Avenue, 12th Floor, New York, New York 10171

(Address of principal executive offices) (Zip Code)

(646) 443-8550

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

 

 

 

 

 

 

 

 

Large accelerated filer 

 

Accelerated filer 

 

Non-accelerated filer 

 

Smaller reporting company 

 

 

 

 

(Do not check if a smaller reporting company)

 

Emerging growth company 

If emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act   

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes No

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of November 7, 2017: Common stock, $0.01 per share — 34,532,004 shares.

 

 


 

Genco Shipping & Trading Limited

 

 

 

Page

 

 

 

 

PART I — FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (unaudited)

4

 

 

 

 

a)

Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016

4

 

 

 

 

 

b)

Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2017 and 2016

5

 

 

 

 

 

c)

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months ended September 30, 2017 and 2016

6

 

 

 

 

 

d)

Condensed Consolidated Statements of Equity for the Nine Months ended September 30, 2017 and 2016

7

 

 

 

 

 

e)

Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2017 and 2016

8

 

 

 

 

 

f)

Notes to Condensed Consolidated Financial Statements

9

 

 

 

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

40

 

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

71

 

 

 

Item 4. 

Controls and Procedures

72

 

 

 

 

PART II —OTHER INFORMATION

 

 

Item 1. 

Legal Proceedings

73

 

Item 6.

 

Exhibits

73

 

2


 

Website Information

 

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

3


 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Genco Shipping & Trading Limited

Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016

(U.S. Dollars in thousands, except for share and per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

    

2017

    

2016

 

 

    

 

    

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

152,511

 

$

133,400

 

Restricted cash

 

 

8,593

 

 

8,242

 

Due from charterers, net of a reserve of $165 and $283, respectively

 

 

10,868

 

 

10,373

 

Prepaid expenses and other current assets

 

 

22,611

 

 

15,750

 

Vessels held for sale

 

 

 —

 

 

4,840

 

Total current assets

 

 

194,583

 

 

172,605

 

 

 

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

 

 

Vessels, net of accumulated depreciation of $197,090 and $163,053, respectively

 

 

1,281,918

 

 

1,354,760

 

Deferred drydock, net of accumulated amortization of $8,370 and $6,340 respectively

 

 

14,455

 

 

12,637

 

Fixed assets, net of accumulated depreciation and amortization of $932 and $759, respectively

 

 

1,012

 

 

1,018

 

Other noncurrent assets

 

 

514

 

 

514

 

Restricted cash

 

 

24,001

 

 

27,426

 

Total noncurrent assets

 

 

1,321,900

 

 

1,396,355

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,516,483

 

$

1,568,960

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

22,531

 

$

22,885

 

Current portion of long-term debt

 

 

12,076

 

 

4,576

 

Deferred revenue

 

 

2,632

 

 

1,488

 

Total current liabilities:

 

 

37,239

 

 

28,949

 

 

 

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

 

 

Long-term lease obligations

 

 

2,408

 

 

1,868

 

Long-term debt, net of deferred financing costs of $9,618 and $11,357, respectively

 

 

504,896

 

 

508,444

 

Total noncurrent liabilities

 

 

507,304

 

 

510,312

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

544,543

 

 

539,261

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Series A Preferred Stock, par value $0.01; aggregate liquidation preference of $0 and $120,789 at September 30, 2017 and December 31, 2016, respectively

 

 

 —

 

 

120,789

 

Common stock, par value $0.01; 500,000,000 shares authorized; issued and outstanding 34,434,538 and 7,354,449 shares at September 30, 2017 and December 31, 2016, respectively

 

 

344

 

 

74

 

Additional paid-in capital

 

 

1,627,839

 

 

1,503,784

 

Retained deficit

 

 

(656,243)

 

 

(594,948)

 

Total equity

 

 

971,940

 

 

1,029,699

 

Total liabilities and equity

 

$

1,516,483

 

$

1,568,960

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016

(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2017

    

2016

    

2017

    

2016

   

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Voyage revenues

 

$

51,161

 

$

37,871

 

$

134,780

 

$

89,461

 

Service revenues

 

 

 —

 

 

1,016

 

 

 —

 

 

2,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

51,161

 

 

38,887

 

 

134,780

 

 

91,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Voyage expenses

 

 

5,550

 

 

2,262

 

 

9,743

 

 

9,232

 

Vessel operating expenses

 

 

25,131

 

 

28,460

 

 

73,867

 

 

86,125

 

General and administrative expenses (inclusive of nonvested stock amortization expense of $1,255,  $3,584,  $3,536 and $14,512, respectively)

 

 

5,889

 

 

7,943

 

 

16,550

 

 

30,101

 

Technical management fees

 

 

1,883

 

 

2,210

 

 

5,735

 

 

6,760

 

Depreciation and amortization

 

 

17,836

 

 

18,127

 

 

54,194

 

 

58,152

 

Other operating income

 

 

 —

 

 

 —

 

 

 —

 

 

(182)

 

Impairment of vessel assets

 

 

18,654

 

 

 —

 

 

21,993

 

 

69,278

 

(Gain) loss on sale of vessels

 

 

 —

 

 

 —

 

 

(7,712)

 

 

77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

74,943

 

 

59,002

 

 

174,370

 

 

259,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(23,782)

 

 

(20,115)

 

 

(39,590)

 

 

(167,842)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of investment

 

 

 —

 

 

 —

 

 

 —

 

 

(2,696)

 

Other (expense) income

 

 

(37)

 

 

125

 

 

(152)

 

 

(49)

 

Interest income

 

 

494

 

 

49

 

 

1,006

 

 

143

 

Interest expense

 

 

(7,857)

 

 

(7,073)

 

 

(22,559)

 

 

(21,199)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

 

(7,400)

 

 

(6,899)

 

 

(21,705)

 

 

(23,801)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before reorganization items, net

 

 

(31,182)

 

 

(27,014)

 

 

(61,295)

 

 

(191,643)

 

Reorganization items, net

 

 

 —

 

 

(83)

 

 

 —

 

 

(243)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(31,182)

 

 

(27,097)

 

 

(61,295)

 

 

(191,886)

 

Income tax expense

 

 

 —

 

 

(417)

 

 

 —

 

 

(766)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(31,182)

 

$

(27,514)

 

$

(61,295)

 

$

(192,652)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share-basic

 

$

(0.90)

 

$

(3.80)

 

$

(1.80)

 

$

(26.65)

 

Net loss per share-diluted

 

$

(0.90)

 

$

(3.80)

 

$

(1.80)

 

$

(26.65)

 

Weighted average common shares outstanding-basic

 

 

34,469,998

 

 

7,245,268

 

 

34,135,736

 

 

7,228,660

 

Weighted average common shares outstanding-diluted

 

 

34,469,998

 

 

7,245,268

 

 

34,135,736

 

 

7,228,660

 

 

See accompanying notes to condensed consolidated financial statements.

5


 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive Loss

For the Three and Nine Months Ended September 30, 2017 and 2016

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(31,182)

 

$

(27,514)

 

$

(61,295)

 

$

(192,652)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 —

 

 

316

 

 

 —

 

 

311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(31,182)

 

$

(27,198)

 

$

(61,295)

 

$

(192,341)

 

 

See accompanying notes to condensed consolidated financial statements.

6


 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Equity

For the Nine Months Ended September 30, 2017 and 2016

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

Series A

 

 

 

 

Additional

 

Comprehensive

 

 

 

 

 

 

 

 

Preferred

 

Common

 

Paid-in

 

Income

 

Retained

 

 

 

 

 

Stock

 

Stock

 

Capital

 

(Loss)

 

Deficit

 

Total Equity

 

Balance — January 1, 2017

 

$

120,789

 

$

74

 

$

1,503,784

 

$

 —

 

$

(594,948)

 

$

1,029,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(61,295)

 

 

(61,295)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of 27,061,856 shares of Series A Preferred Stock

 

 

(120,789)

 

 

270

 

 

120,519

 

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 18,234 shares of vested RSUs

 

 

 

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested stock amortization

 

 

 

 

 

 

 

 

3,536

 

 

 

 

 

 

 

 

3,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — September 30, 2017

 

$

 —

 

$

344

 

$

1,627,839

 

$

 —

 

$

(656,243)

 

$

971,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Series A

 

 

 

 

Additional

 

Comprehensive

 

 

 

 

 

 

 

 

Preferred

 

Common

 

Paid-in

 

Income

 

Retained

 

 

 

 

 

 

Stock

 

Stock

 

Capital

 

(Loss)

 

Deficit

 

Total Equity

 

Balance — January 1, 2016

 

$

 —

 

$

73

 

$

1,483,105

 

$

(21)

 

$

(377,191)

 

$

1,105,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(192,652)

 

 

(192,652)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

311

 

 

 

 

 

311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 61,244 shares of nonvested stock

 

 

 

 

 

 1

 

 

(1)

 

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 3,138 shares of vested RSUs

 

 

 

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested stock amortization

 

 

 

 

 

 

 

 

14,512

 

 

 

 

 

 

 

 

14,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — September 30, 2016

 

$

 —

 

$

74

 

$

1,497,616

 

$

290

 

$

(569,843)

 

$

928,137

 

 

See accompanying notes to condensed consolidated financial statements.

7


 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

    

2017

    

2016

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(61,295)

 

$

(192,652)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

54,194

 

 

58,152

 

Amortization of deferred financing costs

 

 

1,739

 

 

2,195

 

PIK interest, net

 

 

4,575

 

 

 —

 

Amortization of nonvested stock compensation expense

 

 

3,536

 

 

14,512

 

Impairment of vessel assets

 

 

21,993

 

 

69,278

 

(Gain) loss on sale of vessels

 

 

(7,712)

 

 

77

 

Impairment of investment

 

 

 —

 

 

2,696

 

Realized gain on sale of investment

 

 

 —

 

 

(64)

 

Change in assets and liabilities:

 

 

 

 

 

 

 

(Increase) decrease in due from charterers

 

 

(495)

 

 

2,115

 

(Increase) decrease in prepaid expenses and other current assets

 

 

(6,861)

 

 

4,221

 

Increase (decrease) in accounts payable and accrued expenses

 

 

766

 

 

(5,392)

 

Increase in deferred revenue

 

 

1,144

 

 

438

 

Increase in lease obligations

 

 

540

 

 

539

 

Deferred drydock costs incurred

 

 

(7,685)

 

 

(2,022)

 

Net cash provided by (used in) operating activities

 

 

4,439

 

 

(45,907)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of vessels, including deposits

 

 

(252)

 

 

(425)

 

Purchase of other fixed assets

 

 

(198)

 

 

(284)

 

Net proceeds from sale of vessels

 

 

15,513

 

 

1,923

 

Sale of AFS securities

 

 

 —

 

 

3,905

 

Changes in deposits of restricted cash

 

 

3,074

 

 

 —

 

Net cash provided by investing activities

 

 

18,137

 

 

5,119

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Repayments on the $400 Million Credit Facility

 

 

(300)

 

 

 —

 

Repayments on the $100 Million Term Loan Facility

 

 

 —

 

 

(5,769)

 

Repayments on the $253 Million Term Loan Facility

 

 

 —

 

 

(15,225)

 

Repayments on the 2015 Revolving Credit Facility

 

 

 —

 

 

(4,923)

 

Repayments on the $44 Million Term Loan Facility

 

 

 —

 

 

(2,062)

 

Repayments on the $148 Million Credit Facility

 

 

 —

 

 

(8,991)

 

Repayments on the $22 Million Term Loan Facility

 

 

 —

 

 

(1,125)

 

Repayments on the 2014 Term Loan Facilities

 

 

(2,062)

 

 

(2,062)

 

Cash settlement of non-accredited Note holders

 

 

 —

 

 

(101)

 

Payment of Series A Preferred Stock issuance costs

 

 

(1,103)

 

 

 —

 

Net cash used in financing activities

 

 

(3,465)

 

 

(40,258)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

19,111

 

 

(81,046)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

133,400

 

 

121,074

 

Cash and cash equivalents at end of period

 

$

152,511