Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Eagle Bulk Shipping Inc. | egle-20210326.htm |
Exhibit 99.1
EAGLE BULK SHIPCO LLC
Eagle Bulk Shipco LLC (“Shipco” or “Issuer”), a wholly-owned subsidiary of Eagle Bulk Shipping Inc. (the “Parent Company”) is providing the unaudited condensed consolidated and unconsolidated financial information of Shipco for the three months ended December 31, 2020 and 2019 as required by those certain bond terms, dated as of November 22, 2017 (the "Bond Terms"), by and between Shipco, as issuer, and Nordic Trustee AS, a company existing under the laws of Norway, pursuant to which on November 28, 2017, Shipco issued $200.0 million in aggregate principal amount of 8.250% Senior Secured Bonds 2017/2022 (the “Norwegian Bond Debt”).
While the accompanying unaudited condensed consolidated and unconsolidated financial information are derived from the Parent Company’s audited consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States and included in the Parent Company's Annual Report on Form 10-K for the fiscal years ended December 31, 2020 and 2019 (the “Parent Company 10-K”), they have neither been reviewed nor audited by the Parent Company’s independent auditor. In accordance with the Bond Terms, Shipco’s audited unconsolidated and consolidated annual financial statements are required to be provided no later than 120 days after the end of the fiscal year end, or April 30, 2021. The unaudited financial information contained herein should be read in conjunction with the Parent Company’s audited consolidated financial statements and notes thereto included in the Parent Company 10-K, which was filed with the U.S. Securities and Exchange Commission on March 12, 2021.
EAGLE BULK SHIPCO LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended | |||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||
| Revenues, net | $ | 30,100,728 | $ | 28,595,909 | |||||||
| Voyage expenses | 8,828,264 | 8,021,517 | |||||||||
| Vessel operating expenses | 9,736,170 | 11,195,973 | |||||||||
| Depreciation and amortization | 5,455,066 | 5,366,016 | |||||||||
General and administrative expenses 1 | 3,732,059 | 3,949,240 | |||||||||
| Loss on sale of vessels | 298,065 | 65,240 | |||||||||
| Total operating expenses | 28,049,624 | 28,597,986 | |||||||||
| Operating income/(loss) | 2,051,104 | (2,077) | |||||||||
| Interest expense | 4,186,014 | 4,200,204 | |||||||||
| Interest income | (5,710) | (128,298) | |||||||||
| Other income, net | (117,220) | (667,056) | |||||||||
| Total other expenses, net | 4,063,084 | 3,404,850 | |||||||||
| Net loss and comprehensive loss | $ | (2,011,980) | $ | (3,406,927) | |||||||
1General and administrative expenses for the three months ended December 31, 2020 includes $1.6 million of management fees and $2.0 million of general and administrative costs which represent Shipco's share of the Parent Company's general and administrative costs, as per the existing management fee agreements. General and administrative expenses for the three months ended December 31, 2019 includes $1.7 million of management fees and $1.6 million of general and administrative costs which represent Shipco's share of the Parent Company's general and administrative costs, as per the existing management fee agreements.
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EAGLE BULK SHIPCO LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, 2020 | December 31, 2019 | ||||||||||
| ASSETS: | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 22,197,477 | $ | 6,444,499 | |||||||
| Restricted cash - current | 18,846,177 | 5,471,470 | |||||||||
| Accounts receivable | 5,466,788 | 9,272,790 | |||||||||
| Accounts receivable - related party | 717,917 | — | |||||||||
| Prepaid expenses | 521,973 | 1,162,068 | |||||||||
| Inventories | 2,980,501 | 7,431,172 | |||||||||
| Other current assets | 69,191 | 231,040 | |||||||||
| Total current assets | 50,800,024 | 30,013,039 | |||||||||
| Noncurrent assets: | |||||||||||
| Vessels and vessel improvements, at cost, net of accumulated depreciation of $91,932,076 and $91,003,680, respectively | 316,875,562 | 343,187,687 | |||||||||
| Advance for vessel purchase | 1,600,000 | — | |||||||||
| Deferred drydocking costs, net | 7,797,074 | 9,975,466 | |||||||||
| Deferred financing costs - Super Senior Revolver Facility | — | 166,111 | |||||||||
| Advances for scrubbers and ballast water systems and other assets | 970,365 | 8,032,399 | |||||||||
| Total noncurrent assets | 327,243,001 | 361,361,663 | |||||||||
| Total assets | $ | 378,043,025 | $ | 391,374,702 | |||||||
| LIABILITIES & STOCKHOLDER'S EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 7,898,093 | $ | 4,760,789 | |||||||
| Accrued interest | 1,373,364 | 1,415,333 | |||||||||
| Other accrued liabilities | 2,949,830 | 9,389,183 | |||||||||
| Unearned charter hire revenue | 2,732,227 | 1,917,822 | |||||||||
| Current portion of long-term debt - Norwegian Bond Debt | 8,000,000 | 8,000,000 | |||||||||
| Total current liabilities | 22,953,514 | 25,483,127 | |||||||||
| Noncurrent liabilities: | |||||||||||
| Norwegian Bond Debt, net of debt discount and debt issuance costs | 169,290,230 | 175,867,310 | |||||||||
| Super Senior Facility, net of debt issuance costs | 14,896,357 | — | |||||||||
| Total noncurrent liabilities | 184,186,587 | 175,867,310 | |||||||||
| Total liabilities | 207,140,101 | 201,350,437 | |||||||||
| Stockholder's equity: | |||||||||||
| Total stockholder's equity | 170,902,924 | 190,024,265 | |||||||||
| Total liabilities and stockholder's equity | $ | 378,043,025 | $ | 391,374,702 | |||||||
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EAGLE BULK SHIPCO LLC (ISSUER ONLY)
UNCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended | |||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||
| Interest expense | 4,186,014 | 4,200,204 | |||||||||
| Interest income | (5,710) | (128,298) | |||||||||
| Other income, net | (117,220) | (667,056) | |||||||||
| Total other expenses, net | 4,063,084 | 3,404,850 | |||||||||
| Equity in net income/(loss) of subsidiaries * | 2,051,104 | (2,077) | |||||||||
| Net loss and comprehensive loss | $ | (2,011,980) | $ | (3,406,927) | |||||||
* Eliminated in the consolidated financial statements of the Issuer.
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EAGLE BULK SHIPCO LLC (ISSUER ONLY)
UNCONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
| December 31, 2020 | December 31, 2019 | ||||||||||
| ASSETS: | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 22,120,306 | $ | 6,359,929 | |||||||
| Restricted cash - current | 18,846,177 | 5,471,470 | |||||||||
| Prepaid expenses | 57,193 | 60,469 | |||||||||
| Total current assets | 41,023,676 | 11,891,868 | |||||||||
| Noncurrent assets: | |||||||||||
| Investment in subsidiaries | 323,459,433 | 363,360,635 | |||||||||
| Deferred financing costs - Super Senior Revolver Facility | — | 166,111 | |||||||||
| Total noncurrent assets | 323,459,433 | 363,526,746 | |||||||||
| Total assets | $ | 364,483,109 | $ | 375,418,614 | |||||||
| LIABILITIES & STOCKHOLDER'S EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accrued interest | 1,373,364 | 1,415,333 | |||||||||
| Other accrued liabilities | 20,234 | 111,706 | |||||||||
| Current portion of long-term debt - Norwegian Bond Debt | 8,000,000 | 8,000,000 | |||||||||
| Total current liabilities | 9,393,598 | 9,527,039 | |||||||||
| Noncurrent liabilities: | |||||||||||
| Norwegian Bond Debt, net of debt discount and debt issuance costs | 169,290,230 | 175,867,310 | |||||||||
| Super Senior Facility, net of debt issuance costs | 14,896,357 | — | |||||||||
| Total noncurrent liabilities | 184,186,587 | 175,867,310 | |||||||||
| Total liabilities | 193,580,185 | 185,394,349 | |||||||||
| Stockholder's equity: | |||||||||||
| Total stockholder's equity | 170,902,924 | 190,024,265 | |||||||||
| Total liabilities and stockholder's equity | $ | 364,483,109 | $ | 375,418,614 | |||||||
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Basis of presentation
Shipco is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership, charter and operation of dry bulk vessels. Shipco's fleet is comprised of Supramax and Ultramax bulk carriers and Shipco operates its business in one business segment. The operations of the vessels are managed by Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company. As of December 31, 2020, the Company owned and operated a modern fleet of 19 oceangoing vessels.
During the fourth quarter of 2020, Shipco entered into a memorandum of agreement to purchase a high specification scrubber-fitted Ultramax bulk carrier for a total purchase price of $16.0 million excluding direct expenses of acquisition. The Company took delivery of the vessel in the first quarter of 2021. The Company paid $1.6 million in advance on the above mentioned vessel and this advance is recorded in Advance for vessel purchase in the condensed consolidated balance sheet as of December 31, 2020.
On November 28, 2017, Shipco issued into escrow $200,000,000 in aggregate principal amount of 8.250% Senior Secured Bonds 2017/2022 (the "Norwegian Bond Debt"), pursuant to the Bond Terms, dated as of November 22, 2017, by and between the Issuer and Nordic Trustee AS, as the Bond Trustee. After giving effect to an original issue discount of approximately 1% and deducting offering expenses of $3.1 million, the net proceeds from the issuance of the Norwegian Bond Debt were approximately $195.0 million.
Shipco entered into a commercial and technical management agreement on December 8, 2017 with Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company, for performance of technical and commercial services to vessels owned by Shipco at a fee of $150,000 per vessel per annum for commercial management services and $135,000 per vessel per annum for technical management services. Shipco also entered into an overhead sharing agreement which provides for an additional fee allocation of cash general and administrative expenses of Eagle Bulk Management LLC, based on relative ownership days of Shipco and its subsidiaries to the total consolidated ownership days of the Parent Company and all of its subsidiaries. The condensed statement of operations for the quarter ended December 31, 2020 consisted of $1.6 million of management fees and $2.0 million of allocated general and administrative expenses. The condensed consolidated balance sheet at December 31, 2020 included $0.7 million of accounts receivables from a related party for cash transfers due from an affiliate of the Parent Company which were paid after year-end. Accounts payable in the condensed consolidated balance sheets at December 31, 2020 and 2019 include $4.0 million and $0.7 million, respectively, of management fees owed to Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company as per the existing management fee agreements.
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