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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2020

Commission File Number 001-36202

 

 

NAVIGATOR HOLDINGS LTD.

(Translation of registrant’s name into English)

 

 

c/o NGT Services (UK) Limited

10 Bressenden Place

London, SW1E 5DH

United Kingdom

(Address of principal executive office)

 

 

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  ☒    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).  Yes  ☐     No  ☒

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).  Yes  ☐     No  ☒

 

 

 


INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached to this Report on Form 6-K as Exhibit 1 is a copy of the press release issued by Navigator Holdings Ltd. (the “Company”) on May 28, 2020: Navigator Holdings Ltd. Preliminary First Quarter 2020 Results.


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.

 

   NAVIGATOR HOLDINGS LTD.
Date: May 28, 2020    By:   

/s/ Niall J Nolan

   Name:    Niall J Nolan
   Title:    Chief Financial Officer
EX-1

Exhibit 1

NAVIGATOR HOLDINGS LTD. PRELIMINARY FIRST QUARTER 2020 RESULTS

Highlights

 

   

Navigator Holdings Ltd. (the “Company”, “we”, “our” and “us”) (NYSE: NVGS) reported operating revenue of $81.3 million for the three months ended March 31, 2020, compared to $76.1 million for the three months ended March 31, 2019.

 

   

A net loss of $8.5 million (or a loss per share of $0.14) for the three months ended March 31, 2020, which includes COVID-19 related foreign exchange losses of $3.7 million and a $3.0 million loss on the 50/50 joint venture (the “Export Terminal Joint Venture”) relating to the ethylene export marine terminal at Morgan’s Point, Texas (the “Marine Export Terminal”) prior to the commencement of the take-or-pay contracts. This results in a loss relating to our vessels of $1.8 million (or a loss per share of $0.03) compared to a net loss of $3.3 million (or a loss per share of $0.06) for the three months ended March 31, 2019.

 

   

Adjusted EBITDA(1) was $26.0 million for the for the three months ended March 31, 2020, compared to $27.1 million for the three months ended March 31, 2019.

 

   

Fleet utilization improved to 89.0% for the three months ended March 31, 2020 compared to 84.8% for the three months ended March 31, 2019.

 

   

In April 2020 a further long-term throughput commitment was agreed for the Marine Export Terminal, increasing total offtake commitments to approximately 95% of nameplate capacity.

 

   

In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage a pool of up to fourteen vessels (“Luna Pool”) commencing in the second quarter 2020. The Luna Pool will focus on the transportation of ethylene and ethane to meet the growing demands of our customers.

 

   

We have achieved a record of 489 days without a Lost-Time-Incident (LTI) across our in-house technical managed fleet of 17 vessels.

 

   

The conversion last year of Navigator Aurora to using ethane for propulsion has resulted in carbon emissions decreasing by approximately 25% for the first quarter, which is the equivalent of taking around 5,000 cars off the road.

The Company’s financial information for the quarter ended March 31, 2020 included in this press release is preliminary and is subject to change in connection with the completion of the Company’s quarter-end close procedures and further financial review. Actual results may differ from these estimates as a result of the completion of the Company’s quarter-end closing procedures, review adjustments and other developments that may arise between now and the time such financial information for the quarter ended March 31, 2020 is finalized.

Recent Developments

Terminal

In April 2020, a further long-term throughput commitment was executed for the Marine Export Terminal, increasing total offtake commitments to approximately 95% of the one million ton annual nameplate capacity. The terminal is now fully functional and the throughput agreements are ramping up. The terminal is expected to operate at a level of approx. 600,000 tons per annum pro-rata until the cryogenic storage tank becomes operational later this year.

The Company did not make any contributions to the Export Terminal Joint Venture during the first quarter, However, since March 31, 2020 the Company has contributed $7.5 million to the Export Terminal Joint Venture by drawing down on the Company’s terminal credit facility. This is in addition to the $125.5 million contributed as of December 31, 2019 of our expected share of the approximate $150.0 million capital cost of the Marine Export Terminal.

 

1


Luna Pool

In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool, focusing on the transportation of ethylene and ethane to meet the growing demands of our customers. The Luna Pool became operational during the second quarter of 2020, initially with the introduction of seven vessels. It is expected that all 14 will have joined the pool by the end of the second quarter. Currently nine of the 12 vessels in the pool are transporting ethylene, two carrying ethane and one carrying propylene.

Trends

2020 began well in January this year, with healthy utilization of our vessels at 97% and Clarksons’ 12 month timecharter assessment reaching a high of $695,000 per calendar month. This upward trajectory was disrupted by the COVID-19 Pandemic and the subsequent lock-downs, first starting in Asia which were swiftly followed by the rest of the world. As a consequence, our February and March utilization levels fell to 84% and 85% respectively as a result of reduced economic activity. However, LPG demand remained relatively resilient to COVID-19 as it fulfills a fundamental energy need for heating and cooking among the world’s population. Most of the LPG transported in handysize vessels cater for this domestic demand and we expect the traditional intra-continent handysize LPG trades to remain largely unaffected. The larger gas carrier segment is more sensitive to changes in global LPG price arbitrage as well as to the replacement of LPG as a preferred feedstock in the petrochemical sector compared to the handysize segment. The U.S. became the largest exporter of LPG in 2019 and the volume is dependent on both local demand and global pricing which affects the monthly output from the country and more importantly the availability of tons to be shipped. This in turn impacts the rate levels for Very Large Gas Carriers. Handysize vessels distribute a small fraction of the U.S. LPG volume as the vast majority is transported long distance across the Pacific Ocean by larger vessels. By contrast, Handysize vessels are predominately employed in other LPG exporting and consuming areas which are more sheltered from global price arbitrage movements. Whereas the larger gas carrier segments have high price volatility, the handysize quoted timecharter index fell by only 5% to $665,000 per calendar month at the end of the first quarter.

April continued in the same vein as March in terms of utilization of our vessels. However China and many other countries are gradually beginning to ease out of lock-down and re-start manufacturing sites. Ethylene from the Marine Export Terminal re-commenced during May with the cargoes moving world-wide. U.S. produced propylene was exported for the first time in more than a decade on handysize vessels bound for Far Eastern destinations. European producers continued exporting butadiene to East of Suez importers. These deep-sea petrochemical trades provide robust ton-mile demand to the segment. Therefore, combining both LPG and petrochemical trends during the period, we see May utilization of our vessels regaining some lost ground and is on track to reach the approximately 90% level. 2020 has been and continues to be disrupted by COVID-19. Uncertainty remains as to the impact of COVID-19. As more and more countries ease themselves out of lock-downs and re-start their economies it is expected that demand for long haul petrochemical cargoes and regional LPG distribution will increase.

COVID-19

The impact of COVID-19 continues to affect global economic conditions that effect our business, financial condition and the results of our operations. The ultimate severity of COVID-19 is uncertain and its future effects depend on the spread of the outbreak, the reactions of various national governments and the duration of the impacts of the virus. Therefore an estimate of the likely impact cannot be made at this time.

The Company and its two third-party technical managers continue to have challenges with crew changes, consistent with most shipowners, although a small number of crew changes have recently taken place, as a result of some countries being more accessible than others. The Company continues to assess when it is safe and feasible to undertake crew changes.

Drydocking vessels and arranging surveyors to carry out Ship Inspection Report Programme (SIRE) and Chemical Distribution Institute (CDI) inspections also remains more complex, with flag state, classification societies, as well as our charterers currently taking a pragmatic approach when it comes to providing extensions or requiring vetting approvals for our vessels.

The Company has no debt facilities maturing during 2020 and has only one debt instrument maturing in 2021, a $100.0 million bond with Nordic Trustee AS as bond trustee, that matures in February 2021. The Company continues to assess the capital markets and is considering options for deferring its maturity or refinancing the bond using alternative capital raising.

 

2


Results of Operations for the Three Months Ended March 31, 2019 Compared to the Three Months Ended March 31, 2020

The following table compares our operating results for the three months ended March 31, 2019 and 2020:

 

     Three Months
Ended

March 31,
2019
     Three Months
Ended

March 31,
2020
     Percentage
Change
 
     (in thousands, except percentages)  

Operating revenue

   $ 76,103      $ 81,257        6.8

Operating expenses:

        

Brokerage Commissions

     1,309        1,255        (4.1 %) 

Voyage expenses

     13,357        17,544        31.3

Vessel operating expenses

     29,474        27,406        (7.0 %) 

Depreciation and amortization

     18,947        19,210        1.4

General and administrative costs

     4,803        6,031        25.6
  

 

 

    

 

 

    

Total operating expenses

     67,890        71,446        5.2
  

 

 

    

 

 

    

Operating income

     8,213        9,811        19.5

Foreign currency exchange (loss) / gain on senior secured bonds

     (184      11,417        n/a  

Unrealized gain / (loss) on non-designated derivative instruments

     783        (13,961      n/a  

Interest expense

     (12,153      (12,372      1.8

Interest income

     215        219        1.9
  

 

 

    

 

 

    

Loss before income taxes and share of result of equity accounted joint venture

     (3,126      (4,886      56.3

Income taxes

     (93      (168      80.6

Share of result of equity accounted joint venture

     (38      (3,041      —    
  

 

 

    

 

 

    

Net loss

     (3,257      (8,095      148.5

Net income attributable to non-controlling interest

     —          (422      —    
  

 

 

    

 

 

    

Net loss attributable to stockholders of Navigator Holdings Ltd.

   $ (3,257    $ (8,517      161.5
  

 

 

    

 

 

    

Operating Revenue. Operating revenue net of address commission, increased by $5.2 million or 6.8% to $81.3 million for three months ended March 31, 2020, from $76.1 million for the three months ended March 31, 2019. This increase was primarily due to:

 

   

an increase in operating revenue of approximately $3.0 million attributable to an increase in fleet utilization which rose from 84.8% for the three months ended March 31, 2019 to 89.0% for the three months ended March 31, 2020;

 

   

an increase in operating revenue of approximately $0.6 million attributable to an increase in vessel available days of 34 days or 1.0% for the three months ended March 31, 2020 primarily due to an increase in the number of ownership days for the leap year;

 

   

an increase in operating revenue of approximately $4.2 million primarily attributable to an increase in pass through voyage costs, as the number and duration of voyage charters during the three months ended March 31, 2020 increased, compared to the three months ended March 31, 2019; and

 

   

a decrease in operating revenue of approximately $2.6 million attributable to an decrease in average monthly time charter equivalent rates, which decreased to an average of approximately $634,350 per vessel per calendar month ($20,855 per day) for the three months ended March 31, 2020, compared to an average of approximately $662,526 per vessel per calendar month ($21,782 per day) for the three months ended March 31, 2019.

 

3


The following table presents selected operating data for the three months ended March 31, 2019 and 2020, which we believe is useful in understanding the basis for movements in operating revenue:

 

     Three Months Ended
March 31, 2019
    Three Months Ended
March 31, 2020
 

Fleet Data:

    

Weighted average number of vessels

     38.0       38.0  

Ownership days

     3,420       3,458  

Available days

     3,398       3,432  

Operating days

     2,881       3,055  

Fleet utilization

     84.8     89.0

Average daily time charter equivalent rate (*)

   $ 21,782     $ 20,855  

 

*

Non-GAAP Financial Measure -Time charter equivalent: Time charter equivalent (“TCE”), rate is a measure of the average daily revenue performance of a vessel. TCE is not calculated in accordance with U.S. GAAP. For all charters, we calculate TCE by dividing total operating revenues, less any voyage expenses, by the number of operating days for the relevant period. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate is a shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies.

Reconciliation of Operating Revenue to TCE rate

The following table represents a reconciliation of operating revenue to TCE rate. Operating revenue is the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.

 

     Three Months Ended
March 31, 2019
     Three Months Ended
March 31, 2020
 

Fleet Data:

     

Operating revenue

   $ 76,103        81,257  

Voyage expenses

     13,357        17,544  
  

 

 

    

 

 

 

Operating revenue less Voyage expenses

     62,746        63,713  
  

 

 

    

 

 

 

Operating days

     2,881        3,055  

Average daily time charter equivalent rate

   $ 21,782      $ 20,855  

Brokerage Commissions. Brokerage commissions, which typically vary between 1.25% and 2.0% of revenue, decreased by 4.1% to $1.3 million for the three months ended March 31, 2020, from $1.3 million for the three months ended March 31, 2019 despite an increase in operating revenue on which brokerage commissions are based. The decrease was primarily due to a reduction in the brokerage commissions percentage charged on some of our time charters.

Voyage Expenses. Voyage expenses increased by 31.3% to $17.5 million for three months ended March 31, 2020, from $13.4 million for the three months ended March 31, 2019. This was primarily due to an increase in the number and duration of voyage charters undertaken during the three months ended March 31, 2020, compared to the three months ended March 31, 2019, with these increased voyage costs being pass through costs, corresponding to an increase in operating revenue of the same amount.

Vessel Operating Expenses. Vessel operating expenses decreased by 7.0% to $27.4 million for the year three months ended March 31, 2020, from $29.5 million for the three months ended March 31, 2019. Average daily vessel operating expenses decreased by $693 per vessel per day, or 8.0%, to $7,925 per vessel per day for the three months ended March 31, 2020, compared to $8,618 per vessel per day for the three months ended March 31, 2019. This was primarily due to unexpected costs incurred for repairs and maintenance for the three months ended March 31, 2019, which have not reoccurred for the three months ended March 31, 2020.

 

4


Depreciation and Amortization. Depreciation and amortization expense increased by 1.4% to $19.2 million for the three months ended March 31, 2020, from $18.9 million for the three months ended March 31, 2019. Depreciation and amortization expense included amortization of capitalized drydocking costs of $2.1 million and $1.9 million for the three months ended March 31, 2020 and 2019 respectively.

General and Administrative Costs. General and administrative costs increased by $1.2 million or 25.6% to $6.0 million for the three months ended March 31, 2020, from $4.8 million for the three months ended March 31, 2019. The increase in general and administrative costs was primarily due to a revaluation of an Indonesian Rupiah bank account as at March 31, 2020, following a significant weakening of the Indonesian Rupiah against the U.S. dollar in March 2020 as a result of COVID-19, before regaining most of the lost value since the quarter end.

Non-operating Results

Foreign currency exchange gain on senior secured bonds. Exchange gains and losses relate to non-cash movements on our 600 million Norwegian Kroner 2018 Bonds which are translated to U.S. Dollars at the prevailing exchange rate as of March 31, 2020. The foreign currency exchange gain of $11.4 million for the three months ended March 31, 2020 was as a result of the Norwegian Kroner continuing to weaken against the U.S. dollar, being NOK10.5 to USD 1.0 as of March 31, 2020 compared to NOK8.8 to USD 1.0 as of December 31, 2019.

Unrealized loss on non-designated derivative instruments. The unrealized loss on non-designated derivative instruments of $14.0 million relates to the fair value movement in our cross-currency interest rate swap for the three months ended March 31, 2020 and is primarily due to the weakening of the Norwegian Kroner against the U.S. dollar. The unrealized gain on this swap for the three months ended March 31, 2019 was $0.8 million.

Interest Expense. Interest expense increased by $0.2 million, or 1.8%, to $12.4 million for the three months ended March 31, 2020, from $12.2 million for the three months ended March 31, 2019. This is primarily as a result of interest on the Marine Export Terminal that is no longer being capitalized, following the commencement of operations in December 2019, partially offset by a reduction in U.S. LIBOR on all of our floating rate debt facilities.

Income Taxes. Income tax relates to taxes on our subsidiaries incorporated in the United Kingdom, Poland and Singapore and our consolidated variable interest entity (“VIE”), incorporated in Malta. For the three months ended March 31, 2020, we accrued taxes of $168,000 compared to accrued taxes of $93,000 for the three months ended March 31, 2019.

Share of result of equity accounted joint venture. The share of result of the Company’s 50% ownership in the Export Terminal Joint Venture was a loss of $3.0 million for the three months ended March 31, 2020, primarily as a result of initial low volumes passing through the Marine Export Terminal following its commencement of operations in December 2019.

Non-Controlling Interest. We have entered into a sale and leaseback arrangement with a wholly-owned special purpose vehicle (“lessor SPV”) of a financial institution. While we do not hold any equity investments in this lessor SPV, we have determined that we are the primary beneficiary of this entity and accordingly, we are required to consolidate this VIE into our financial results. Thus, the income attributable to the financial institution of $0.4 million is presented as the non-controlling interest in our financial results.

 

5


Reconciliation of Non-GAAP Financial Measures

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2019 and 2020:

 

     (in thousands)  
     Three months ended March 31,  
     2019      2020  

Net loss

   $ (3,257    $ (8,095

Net interest expense

     11,938        12,153  

Income taxes

     93        168  

Depreciation and amortization

     18,947        19,210  
  

 

 

    

 

 

 

EBITDA(1)

   $ 27,721      $ 23,436  

Foreign currency exchange gain on senior secured bonds

     184        (11,417

Unrealized loss on non-designated derivative instruments

     (783      13,961  
  

 

 

    

 

 

 

Adjusted EBITDA(1)

   $ 27,122      $ 25,980  
  

 

 

    

 

 

 

 

1

EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP (non-GAAP financial measures). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. Management believes that EBITDA and Adjusted EBITDA are useful to investors in evaluating the operating performance of the Company. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to consolidated net income, cash generated from operations or any measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. See the table above for a reconciliation of EBITDA and Adjusted EBITDA to net loss, our most directly comparable financial measure calculated accordance with U.S. GAAP.

 

6


Our Fleet

The following table sets forth our vessels as of May 28, 2020:

 

Operating Vessel

   Year
Built
     Vessel Size
(CBM)
     Employment
Status
     Current Cargo      Charter
Expiration Date
 

Ethylene/ethane capable semi-refrigerated

              

Navigator Orion

     2000        22,085        Spot market        Ethylene         

Navigator Neptune

     2000        22,085        Time charter        Ethane        October 2020  

Navigator Pluto

     2000        22,085        Time charter        LPG        July 2020  

Navigator Saturn

     2000        22,085        Spot market        Ethylene         

Navigator Venus

     2000        22,085        Time charter        Ethane        November 2020  

Navigator Atlas

     2014        21,000        Contract of affreightment        Ethylene        July 2020

Navigator Europa

     2014        21,000        Contract of affreightment        Ethylene        August 2020  

Navigator Oberon

     2014        21,000        Spot market        Ethylene         

Navigator Triton

     2015        21,000        Spot market        Ethylene         

Navigator Umbrio

     2015        21,000        Spot market        Propylene         

Navigator Aurora

     2016        37,300        Time charter        Ethane        December 2026  

Navigator Eclipse

     2016        37,300        Spot market                

Navigator Nova

     2017        37,300        Time charter        Ethane        June 2020  

Navigator Prominence

     2017        37,300        Time charter        Ethane        October 2020  

Semi-refrigerated

              

Navigator Magellan

     1998        20,700        Drydock                

Navigator Aries

     2008        20,750        Time charter        LPG        July 2020  

Navigator Capricorn

     2008        20,750        Time charter        LPG        June 2020  

Navigator Gemini

     2009        20,750        Spot market        Butadiene         

Navigator Pegasus

     2009        22,200        Spot market        Propylene         

Navigator Phoenix

     2009        22,200        Spot market        Propylene         

Navigator Scorpio

     2009        20,750        Time charter        LPG        June 2020

Navigator Taurus

     2009        20,750        Spot market        LPG         

Navigator Virgo

     2009        20,750        Spot market        LPG         

Navigator Leo

     2011        20,600        Time charter        LPG        December 2023  

Navigator Libra

     2012        20,600        Time charter        LPG        December 2023  

Navigator Centauri

     2015        21,000        Spot market        Butadiene         

Navigator Ceres

     2015        21,000        Spot market        Butadiene         

Navigator Ceto

     2016        21,000        Spot market        Butadiene         

Navigator Copernico

     2016        21,000        Spot market        Butadiene         

Navigator Luga

     2017        22,000        Time charter        LPG        February 2022  

Navigator Yauza

     2017        22,000        Time charter        LPG        April 2022  

Fully-refrigerated

              

Navigator Glory

     2010        22,500        Time charter        Ammonia        June 2021  

Navigator Grace

     2010        22,500        Time charter        LPG        June 2020  

Navigator Galaxy

     2011        22,500        Spot market                

Navigator Genesis

     2011        22,500        Time charter        LPG        June 2020  

Navigator Global

     2011        22,500        Time charter        LPG        November 2020  

Navigator Gusto

     2011        22,500        Time charter        LPG        December 2020  

Navigator Jorf

     2017        38,000        Time charter        Ammonia        August 2027  

 

7


Conference Call Details:

Tomorrow, Friday, May 29 , 2020, at 9:00 A.M. ET, the Company’s management team will host a conference call to discuss the preliminary financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928 592 (Standard International Dial In). Please quote “Navigator” to the operator. There will also be a live, and then archived, webcast of the conference call, available through the Company’s website (www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A telephonic replay of the conference call will be available until June [ 5 ], 2020, by dialing 1(866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009 785 (Standard International Dial In). Access Code: 11870348#

Navigator Gas

Attention: Investor Relations Department —investorrelations@navigatorgas.com

New York:        650 Madison Ave, New York, NY 10022. Tel: +1 212 355 5893

London:            10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20 7340 4850

About Us

Navigator Holdings Ltd. is the owner and operator of the world’s largest fleet of handysize liquefied gas carriers and a global leader in the seaborne transportation of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas (“LPG”) and ammonia. Navigator’s fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, 14 of which are ethylene and ethane capable. The Company plays a vital role in the liquefied gas supply chain for energy companies, industrial consumers and commodity traders, with our sophisticated vessels providing an efficient and reliable ‘floating pipeline’ between the parties. We continue to build strong, long-term partnerships based on mutual trust, our depth of technical expertise and a modern versatile fleet. The Company also owns a 50% share, through a joint venture in an ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel, USA.

 

8


Navigator Holdings Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Unaudited)

 

     December 31, 2019     March 31, 2020  
     (in thousands, except share data)  

Assets

    

Current assets

    

Cash and cash equivalents

   $ 64,820     $ 51,027  

Restricted cash

     1,310       15,200  

Accounts receivable, net

     23,462       24,366  

Accrued income

     6,280       3,020  

Prepaid expenses and other current assets

     17,670       19,514  

Bunkers and lubricant oils

     9,645       10,705  

Insurance receivable

     2,939       3,228  
  

 

 

   

 

 

 

Total current assets

     126,126       127,060  

Non-current assets

    

Vessels in operation, net

     1,609,527       1,592,100  

Property, plant and equipment, net

     1,159       991  

Investment in equity accounted joint venture

     130,660       127,619  

Right-of-use asset for operating leases

     6,781       6,517  
  

 

 

   

 

 

 

Total non-current assets

     1,748,127       1,727,227  
  

 

 

   

 

 

 

Total assets

   $ 1,874,253     $ 1,854,287  
  

 

 

   

 

 

 

Liabilities and stockholders’ equity Current liabilities

    

Current portion of secured term loan facilities, net of deferred financing costs

   $ 64,703     $ 64,775  

Senior unsecured bond, net of deferred financing costs

           98,953  

Current portion of operating lease liabilities

     1,178       1,145  

Accounts payable

     10,472       12,276  

Accrued expenses and other liabilities

     14,124       16,531  

Accrued interest

     4,424       2,367  

Deferred income

     14,154       15,170  

Amounts due to related parties

     451       446  
  

 

 

   

 

 

 

Total current liabilities

     109,506       211,663  
  

 

 

   

 

 

 

Non-current liabilities

    

Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs

     578,676       562,443  

Senior secured bond, net of deferred financing costs

     67,503       56,142  

Senior unsecured bond, net of deferred financing costs

     98,513       —    

Derivative liabilities

     5,769       19,730  

Operating lease liabilities, net of current portion

     6,329       5,683  

Amounts due to related parties

     68,055       66,698  
  

 

 

   

 

 

 

Total non-current liabilities

     824,845       710,696  
  

 

 

   

 

 

 

Total liabilities

     934,351       922,359  

Commitments and contingencies

    

Stockholders’ equity

    

Common stock—$.01 par value per share; 400,000,000 shares authorized; 55,907,438 shares issued and outstanding, (December 31, 2019: 55,826,644)

     558       559  

Additional paid-in capital

     592,010       592,361  

Accumulated other comprehensive loss

     (331     (411

Retained earnings

     347,566       338,898  
  

 

 

   

 

 

 

Total Navigator Holdings Ltd. stockholders’ equity

     939,803       931,407  

Non-controlling interest

     99       521  
  

 

 

   

 

 

 

Total equity

     939,902       931,928  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,874,253     $ 1,854,287  
  

 

 

   

 

 

 

 

9


Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Income

(Unaudited)

 

    

Three months ended

March 31,

(in thousands except share data)

 
     2019     2020  

Revenues

    

Operating revenue

   $ 76,103     $ 81,257  
  

 

 

   

 

 

 

Expenses

    

Brokerage commissions

     1,309       1,255  

Voyage expenses

     13,357       17,544  

Vessel operating expenses

     29,474       27,406  

Depreciation and amortization

     18,947       19,210  

General and administrative costs

     4,803       6,031  
  

 

 

   

 

 

 

Total operating expenses

     67,890       71,446  
  

 

 

   

 

 

 

Operating income

     8,213       9,811  

Other income/(expense)

    

Foreign currency exchange (loss) / gain on senior secured bonds

     (184     11,417  

Unrealized gain / (loss) on non-designated derivative instruments

     783       (13,961

Interest expense

     (12,153     (12,372

Interest income

     215       219  
  

 

 

   

 

 

 

Loss before income taxes and share of result of equity accounted joint venture

     (3,126     (4,886

Income taxes

     (93     (168

Share of result of equity accounted joint venture

     (38     (3,041
  

 

 

   

 

 

 

Net loss

     (3,257     (8,095

Net income attributable to non-controlling interest

     —         (422
  

 

 

   

 

 

 

Net loss attributable to stockholders of Navigator Holdings Ltd.

   $ (3,257 )       (8,517
  

 

 

   

 

 

 

Earnings/loss per share:

    

Basic and diluted:

   $ (0.06 )     $ (0.14 )  
  

 

 

   

 

 

 

Weighted average number of shares outstanding:

    

Basic and diluted:

     55,680,889       55,838,186  
  

 

 

   

 

 

 

 

10


Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)

For the three months ended March 31, 2019:

 

     (In thousands, except share data)  
     Common stock                            
     Number of
shares
     Amount 0.01
par value
     Additional
Paid-in Capital
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
    Total  

December 31, 2018

     55,657,631      $ 557      $ 590,508      $ (363   $ 364,408     $ 955,110  

Adjustment to equity for the adoption of the new leasing standard

     —          —          —          —         (136     (136

Restricted shares issued March 20, 2019

     174,438        1        —          —         —         1  

Net income

     —          —          —          —         (3,257     (3,257

Foreign currency translation

     —          —          —          (48     —         (48

Share-based compensation plan

     —          —          345        —         —         345  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

March 31, 2019

     55,832,069      $ 558      $ 590,853      $ (411   $ 361,015     $ 952,015  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

For the three months ended March 31, 2020:

 

     Common stock                                   
     Number of
shares
     Amount 0.01
par value
     Additional
Paid-in Capital
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
    Non-controlling
interest
     Total  

December 31, 2019

     55,826,644      $ 558      $ 592,010      $ (331   $ 347,566     $ 99      $ 939,902  

Adjustment to equity for the adoption of the new credit losses standard

     —          —          —          —         (151     —          (151

Restricted shares issued March 19, 2020

     80,794        1      —          —         —         —          1

Net income

     —          —          —          —         (8,517     422      (8,095

Foreign currency translation

     —          —          —          (80     —         —          (80

Share-based compensation plan

     —          —          351      —         —         —          351  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

March 31, 2020

     55,907,438      $ 559      $ 592,361      $ (411   $ 338,898     $ 521      $ 931,928  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

11


Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

     Three months
ended
March 31,
2019
(in thousands)
    Three months
ended
March 31,
2020
(in thousands)
 

Cash flows from operating activities

    

Net loss

   $ (3,257 )     $ (8,095

Adjustments to reconcile net income to net cash provided by operating activities

    

Unrealized (gain) / loss on non-designated derivative instruments

     (783     13,961  

Depreciation and amortization

     18,947       19,210  

Payment of drydocking costs

     (1,675     (1,380

Amortization of share-based compensation

     346       352  

Amortization of deferred financing costs

     604       1,073  

Share of result of equity accounted affiliates

     38       3,041  

Insurance claim debtor

       (407

Unrealized foreign exchange loss / (gain) on senior secured bonds

     184       (11,417

Other unrealized foreign exchange gain/(loss)

     34       (432

Changes in operating assets and liabilities

    

Accounts receivable

     (6,585     (904

Bunkers and lubricant oils

     (2,706     (1,060

Prepaid expenses and other current assets

     (1,738     1,416  

Accounts payable, accrued interest and accrued expenses and other liabilities

     (626     3,589  
  

 

 

   

 

 

 

Net cash provided by operating activities

     2,783       18,947  
  

 

 

   

 

 

 

Cash flows from investing activities

    

Payment to acquire vessels

     (233     (294

Investment in equity accounted joint venture

     (32,385     —    

Purchase of other property, plant and equipment

     (68     (15

Insurance recoveries

     —         118  
  

 

 

   

 

 

 

Net cash used in investing activities

     (32,686     (191
  

 

 

   

 

 

 

Cash flows from financing activities

    

Proceeds from secured term loan facilities and revolving credit facilities

     107,000       —    

Issuance cost of refinancing of vessel

     —         (19

Direct financing cost of secured term loan and revolving credit facilities

     (1,442     —    

Direct financing cost of terminal credit facility

     —         (7

Repayment of secured term loan facilities and revolving credit facilities

     (93,275     (16,633

Repayment of refinancing of vessel to related parties

     —         (2,000
  

 

 

   

 

 

 

Net cash provided by/(used in) financing activities

     12,283       (18,659
  

 

 

   

 

 

 

Net (decrease)/increase in cash, cash equivalents and restricted cash

     (17,620     97  

Cash, cash equivalents and restricted cash at beginning of period

     71,515       66,130  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 53,895     $ 66,227  
  

 

 

   

 

 

 

 

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IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “foresee,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this press release. These risks and uncertainties include, but are not limited to:

 

   

the completion of the Company’s quarter-end close procedures and further financial review with respect to the Company’s financial statements for the quarter ended March 31, 2020, and other developments that may arise between now and the disclosure of the Company’s final results for such quarter;

 

   

global epidemics or other health crises such as the recent outbreak of coronavirus COVID-19, including its impact on our business;

 

   

future operating or financial results;

 

   

pending acquisitions, business strategy and expected capital spending;

 

   

operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs;

 

   

fluctuations in currencies and interest rates;

 

   

general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;

 

   

our ability to continue to comply with all our debt covenants;

 

   

our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;

 

   

estimated future capital expenditures needed to preserve our capital base;

 

   

our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;

 

   

our continued ability to enter into long-term, fixed-rate time charters with our customers;

 

   

the availability and cost of low sulfur fuel oil compliant with the International Maritime Organization sulfur emission limit reductions, generally referred to as “IMO 2020,” which took effect January 1, 2020;

 

   

our vessels engaging in ship to ship transfers of LPG or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge.

 

   

changes in governmental rules and regulations or actions taken by regulatory authorities;

 

   

potential liability from future litigation;

 

   

our expectations relating to the payment of dividends;

 

   

our expectation regarding providing in-house technical management for certain vessels in our fleet and our success in providing such in-house technical management;

 

   

our expectations regarding the completion of construction and financing of the Marine Export Terminal and the financial success of the Marine Export Terminal and our related Export Terminal Joint Venture with Enterprise Products Partners L.P.; and

 

   

other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.

All forward-looking statements included in this press release are made only as of the date of this press release. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.

 

13