UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2019
Commission File Number 001-33922
DRYSHIPS INC.
c/o DryShips Management Services Inc.
80 Kifissias Avenue
GR 151 25, Marousi
Athens, Greece
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X]       Form 40-F [  ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [  ].
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ].
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.


INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 to this Report on Form 6-K is a press release of DryShips Inc. dated September 17, 2019: DryShips Inc. Reports Financial and Operating Results for the Second Quarter of 2019.
The information contained in this Report on Form 6-K is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-216826).


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
DRYSHIPS INC.
 
(Registrant)
   
     
     
Dated:  September 17, 2019
By:
/s/ Anthony Kandylidis
   
Name: Anthony Kandylidis
   
Title: President and Chief Financial Officer


Exhibit 99.1



DRYSHIPS INC. REPORTS FINANCIAL AND OPERATING
RESULTS FOR THE SECOND QUARTER OF 2019

September 17, 2019, Athens, Greece. DryShips Inc. (NASDAQ:DRYS) (“DryShips” or the “Company”), a diversified owner and operator of ocean going cargo vessels, and through the acquisition of Heidmar Inc. (“Heidmar”), a global tanker pool operator, today announced its unaudited financial and operating results for the quarter ended June 30, 2019.
Second Quarter 2019 Financial Highlights


-
For the second quarter of 2019, the Company reported net loss of $12.7 million, or $0.15 basic and diluted losses per share.

-
Included in the second quarter of 2019 results are the following:

Vessel dry-docking costs of $5.7 million, or $0.07 per share

Vessel impairments of $1.5 million, or $0.02 per share
Excluding the above, the Company’s net results would have amounted to a net loss of $5.5 million, or $0.06 per share.


-
The Company reported Adjusted EBITDA of $6.4 million for the second quarter of 2019. (1)

Other Developments


Future Proofing of the Company’s fleet – Update

Further to the Company’s plan to future proof its fleet, as of September 17, 2019, we have completed the dry-docking, installation of ballast water treatment systems (“BWTS”) and scrubbers on 7 vessels, incurring approximately $26.1 million of total costs and 300 off-hire days. For the balance of 2019 and the full year 2020, we expect to continue to execute our plan to upgrade additional vessels and we expect to incur approximately 843 off-hire days for a total estimated cost of $65.8 million.

In connection with the installation of scrubbers on our vessels we have entered into agreements, directly or indirectly, with internationally recognized financial institutions and/or export credit agencies to borrow up to $36.4 million to partly finance such installations. The loans have not yet been drawn and they are guaranteed by entities that may be deemed to be affiliated with our Chairman and CEO, Mr. George Economou.


Pending Merger with SPII

As previously announced, on August 18, 2019 the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, SPII Holdings Inc. (“SPII”), a company that may be deemed to be beneficially owned by the Company’s Chairman and Chief Executive Officer, Mr. George Economou, and Sileo Acquisitions Inc., (“Merger Sub”) a wholly owned subsidiary of SPII. Pursuant to the Merger Agreement Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation after the merger and a wholly owned subsidiary of SPII (the “Merger”). Pursuant to the Merger Agreement, at the effective time of the Merger, each share  of the Company Common Stock that is issued and outstanding immediately prior to the effective time (other than shares of Company Common Stock held by SPII or any subsidiary of either SPII or the Company) will be automatically converted into the right to receive the merger consideration of  $5.25 per share in cash, without interest and less any required withholding taxes. The Company has called a special meeting of its shareholders (the “Special Meeting”) to be held on October 9, 2019, at 4 p.m., local time, at 80 Kifissias Avenue, GR 151 25, Marousi, Athens, Greece. At the Special Meeting, shareholders will be asked to consider and vote on a proposal to authorize and approve the Merger Agreement. Only shareholders of record as of the close of business on August 30, 2019, which has been fixed as the record date for the Special Meeting, will be entitled to vote at the Special Meeting. The merger is also subject to the satisfaction or waiver of other customary closing conditions but not to any financing condition. The merger is expected to close in the fourth quarter of 2019. Refer to the Transaction Statement on Schedule 13E-3 and the proxy statement, dated September 9, 2019, attached thereto, as filed by the Company with the U.S. Securities and Exchange Commission on September 9, 2019 for additional information on the Merger.






(1)    Adjusted EBITDA is a non-U.S. GAAP measure; please see later in this press release for reconciliation to net income/ (loss).

1

Fleet List
The table below describes the Company’s fleet as of September 17, 2019:

 
Year
 
Gross rate
Redelivery
 
Built
DWT
Per day
Earliest
Latest
Drybulk fleet
         
           
Newcastlemax:
         
Bacon*
2013
205,170
Spot
N/A
N/A
Conquistador*
2016
209,090
T/C Index Linked
N/A
N/A
Huahine
2013
206,037
T/C Index Linked
Sep-19
Oct-19
Judd
2015
205,796
T/C Index Linked
Sep-19
Oct-19
Marini*
2014
205,854
T/C Index Linked
Oct-19
Dec-19
Morandi
2013
205,854
T/C Index Linked
Sep-19
Sep-19
Netadola*
2017
208,998
T/C Index Linked
N/A
N/A
Pink Sands*
2016
208,931
T/C Index Linked
N/A
N/A
Xanadu*
2017
208,827
T/C Index Linked
N/A
N/A
           
Kamsarmax:
         
Castellani
2014
82,129
Spot
N/A
N/A
Kelly
2017
81,300
Spot
N/A
N/A
Matisse
2014
81,128
Spot
N/A
N/A
Nasaka
2014
81,918
Spot
N/A
N/A
Valadon
2014
81,198
Spot
N/A
N/A
           
Panamax:
         
Catalina
2005
74,432
Spot
N/A
N/A
Levanto
2001
73,925
Spot
N/A
N/A
Ligari
2004
75,583
Spot
N/A
N/A
Majorca
2005
74,477
Spot
N/A
N/A
Rapallo
2009
75,123
Spot
N/A
N/A
Raraka
2012
76,037
Spot
N/A
N/A
       
Tanker fleet
         
           
Very Large Crude Carrier:
         
Shiraga
2011
320,105
Spot
N/A
N/A
           
Suezmax:
         
Marfa
2017
159,513
Spot
N/A
N/A
Samsara**
2017
159,855
$18,000 Base rate plus profit share
Mar.-22
May-25
           
Aframax:
         
Balla
2017
113,293
Spot
N/A
N/A
Botafogo
2010
106,892
Spot
N/A
N/A
Stamos
2012
115,666
Spot
N/A
N/A
 
Offshore Supply fleet
         
           
Platform Supply Vessels:
         
Crescendo
2012
1,457
Laid up
N/A
N/A
Colorado
2012
1,430
Laid up
N/A
N/A
Oil Spill Recovery Vessels:
         
Indigo
2013
1,401
Laid up
N/A
N/A
Jacaranda
2012
1,360
Laid up
N/A
N/A
Emblem
2012
1,363
Laid up
N/A
N/A
Jubilee
2012
1,317
Laid up
N/A
N/A



* The vessel is time chartered by TMS Dry Ltd., an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.

** The vessel is time chartered by Cecilia Shipholdings Limited, an entity that may be deemed to be beneficially owned by our Company’s Chairman and CEO.
2


Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited)
(U.S. Dollars in thousands, except average daily results)

Drybulk
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2018
   
2019
   
2018
   
2019
 
Average number of vessels(1)
   
20.9
     
19.4
     
21.0
     
19.2
 
Total voyage days for vessels(2)
   
1,850
     
1,524
     
3,740
     
3,233
 
Total calendar days for vessels(3)
   
1,903
     
1,765
     
3,793
     
3,475
 
Fleet utilization(4)
   
97.2
%
   
86.3
%
   
98.6
%
   
93.0
%
Time charter equivalent(5)
 
$
11,246
   
$
9,535
   
$
11,281
   
$
9,778
 
Vessel operating expenses (daily)(6)
 
$
7,543
   
$
8,786
   
$
6,841
   
$
7,216
 



Tanker

Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2018
   
2019
   
2018
   
2019
 
Average number of vessels(1)
   
4.3
     
6.0
     
4.1
     
6.0
 
Total voyage days for vessels(2)
   
387
     
546
     
747
     
1,086
 
Total calendar days for vessels(3)
   
387
     
546
     
747
     
1,086
 
Fleet utilization(4)
   
100.0
%
   
100.0
%
   
100.0
%
   
100.0
%
Time charter equivalent(5)
 
$
15,116
   
$
23,767
   
$
17,333
   
$
26,217
 
Vessel operating expenses (daily)(6)
 
$
7,674
   
$
7,480
   
$
7,764
   
$
7,179
 



(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company’s fleet during the period divided by the number of calendar days in that period.
(2) Total voyage days for vessels are the total days the vessels were in the Company’s possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys and laid-up days.
(3) Total calendar days are the total number of days the vessels were in the Company’s possession for the relevant period including off-hire days associated with drydockings or special or intermediate surveys and laid-up days.
(4) Fleet utilization is the percentage of time that the Company’s vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. The Company’s method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from the Company’s vessels, the most directly comparable U.S. GAAP measure, because it assists the Company’s management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.
(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs including dry-docking costs, is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.
3


Drybulk, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) - continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. Dollars, and voyage days)



Drybulk
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2018
   
2019
   
2018
   
2019
 
Voyage revenues
 
$
22,053
   
$
17,034
   
$
45,329
   
$
36,245
 
Voyage expenses
   
(1,248
)
   
(2,503
)
   
(3,139
)
   
(4,634
)
Time charter equivalent revenues
 
$
20,805
   
$
14,531
   
$
42,190
   
$
31,611
 
Total voyage days for fleet
   
1,850
     
1,524
     
3,740
     
3,233
 
Time charter equivalent (TCE)
 
$
11,246
   
$
9,535
   
$
11,281
   
$
9,778
 


Tanker
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2018
   
2019
   
2018
   
2019
 
Voyage revenues
 
$
9,990
   
$
20,912
   
$
21,147
   
$
44,781
 
Voyage expenses
   
(4,140
)
   
(7,935
)
   
(8,199
)
   
(16,309
)
Time charter equivalent revenues
 
$
5,850
   
$
12,977
   
$
12,948
   
$
28,472
 
Total voyage days for fleet
   
387
     
546
     
747
     
1,086
 
Time charter equivalent (TCE)
 
$
15,116
   
$
23,767
   
$
17,333
   
$
26,217
 

4



DryShips Inc.

Financial Statements
Unaudited Condensed Consolidated Statements of Operations

(Expressed in Thousands of U.S. Dollars
except for share and per share data)
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
REVENUES:
                       
Voyage, time charter revenues and services revenue
 
$
42,633
   
$
40,495
   
$
87,359
   
$
83,575
 
     
42,633
     
40,495
     
87,359
     
83,575
 
                                 
EXPENSES:
                               
Voyage expenses
   
5,811
     
10,438
     
12,169
     
20,943
 
Vessel operating expenses
   
20,560
     
21,083
     
38,660
     
34,486
 
Depreciation and amortization
   
7,156
     
7,783
     
13,974
     
15,120
 
Impairment loss,(gain)/loss from sale of vessel
   
(5,109
)
   
1,454
     
(5,109
)
   
1,454
 
General and administrative expenses
   
7,612
     
8,365
     
14,781
     
15,185
 
Other, net
   
(347
)
   
(55
)
   
(365
)
   
70
 
                                 
Operating income/(loss)
   
6,950
     
(8,573
)
   
13,249
     
(3,683
)
                                 
OTHER INCOME / (EXPENSES):
                               
Interest and finance costs, net of interest income
   
(3,915
)
   
(4,062
)
   
(8,805
)
   
(7,730
)
Other, net
   
214
     
(90
)
   
31
     
139
 
Total other expenses, net
   
(3,701
)
   
(4,152
)
   
(8,774
)
   
(7,591
)
                                 
Net income/(loss)
   
3,249
     
(12,725
)
   
4,475
     
(11,274
)
                                 
                                 
Net income/(loss) attributable to DryShips Inc. common stockholders
   
3,249
     
(12,725
)
   
4,475
     
(11,274
)
Earnings/(Losses) per common share, basic and diluted
 
$
0.03
   
$
(0.15
)
 
$
0.04
   
$
(0.13
)
Weighted average number of shares, basic and diluted
   
100,581,638
     
86,886,627
     
102,123,365
     
86,893,214
 




5



DryShips Inc.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in Thousands of U.S. Dollars)
 
December 31, 2018
   
June 30, 2019
 
             
ASSETS
           
             
Cash, cash equivalents, including restricted cash (current and non-current)
 
$
156,881
   
$
122,257
 
Other current and non-current assets
   
99,092
     
151,006
 
Fixed assets, net
   
755,332
     
793,404
 
Total assets
   
1,011,305
     
1,066,667
 
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
                 
Total debt and finance lease liabilities
   
362,047
     
371,831
 
Total other current and non-current liabilities
   
11,529
     
70,414
 
Total stockholders’ equity
   
637,729
     
624,422
 
Total liabilities and stockholders’ equity
 
$
1,011,305
   
$
1,066,667
 
                 
                 
                 
SHARE COUNT DATA
               
Common stock issued
   
104,274,708
     
104,274,708
 
Less: Treasury stock
   
(17,042,680
)
   
(17,388,081
)
Common stock issued and outstanding
   
87,232,028
     
86,886,627
 


6

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessels sales and impairments and certain other non-cash items as described below. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, and the Company’s calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by the Company’s lenders as a credit metric and the Company believes that it presents useful information to investors regarding a company’s ability to service and/or incur indebtedness.
The following table reconciles net income / (loss) to Adjusted EBITDA:
 
(U.S. Dollars in thousands)
 
Three Months Ended June 30, 2018
   
Three Months Ended June 30, 2019
   
Six Months Ended June 30, 2018
   
Six Months Ended June 30, 2019
 
                         
Net income/(loss) attributable to Dryships Inc
 
$
3,249
   
$
(12,725
)
 
$
4,475
   
$
(11,274
)
                                 
Add: Net interest expense
   
3,915
     
4,062
     
8,805
     
7,730
 
Add: Depreciation and amortization
   
7,156
     
7,783
     
13,974
     
15,120
 
Add: Dry-dockings and class survey costs
   
3,310
     
5,737
     
3,699
     
6,412
 
Add: Impairment loss, (gain)/loss from sale of vessel
   
(5,109
)
   
1,454
     
(5,109
)
   
1,454
 
Add: Write-off of capitalized expenses
   
470
     
-
     
470
     
-
 
Add: Income taxes
   
2
     
73
     
2
     
74
 
Adjusted EBITDA
 
$
12,993
   
$
6,384
   
$
26,316
   
$
19,516
 

About DryShips Inc.

The Company is a diversified owner and operator of ocean-going cargo vessels that operate worldwide through three segments: drybulk, offshore support and tanker. In addition, DryShips owns 100% of Heidmar, a leading commercial tanker pool operator.  As of September 17, 2019, the Company operates a fleet of 32 vessels comprising of (i) 9 Newcastlemax drybulk vessels; (ii) 5 Kamsarmax drybulk vessels; (iii) 6 Panamax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 2 Suezmax tankers; (vi) 3 Aframax tankers; and (vii) 6 Offshore Support Vessels, including 2 Platform Supply and 4 Oil Spill Recovery Vessels.

DryShips’ common stock is listed on the NASDAQ Capital Market where it trades under the symbol “DRYS.”

For more information about DryShips, please visit www.dryships.com.

For more information about Heidmar, please visit www.heidmar.com.
7


Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.

Forward-looking statements reflect the Company’s current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include the conditions to the completion of the Merger, including the authorization and approval of the Merger Agreement by the Company’s shareholders, not being satisfied, the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, the strength of world economies and currencies, general market conditions, including changes in charter rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company’s inability to procure acquisition financing, default by one or more charterers of the Company’s ships, changes in demand for drybulk, oil or natural gas commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company’s voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Comany’s relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists. Additionally, actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the inability to obtain the requisite shareholder approval for the proposed transaction or the failure to satisfy other conditions to completion of the proposed transaction, risks that the proposed transaction disrupts current plans and operations, the ability to recognize the benefits of the transaction, and the amount of the costs, fees, and expenses and charges related to the transaction.

Risks and uncertainties are further described in reports filed by DryShips with the U.S. Securities and Exchange Commission, including the Company’s most recently filed Annual Report on Form 20-F. The statements in this news release speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Investor Relations / Media:

Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com

8