Media

Scorpio Bulkers Inc. Announces Financial Results for the Fourth Quarter of 2014

Mar 4, 2015

MONACO — (Marketwired) — 03/04/15 — Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers,” or the “Company”) today reported its results for the three months and year ended December 31, 2014. The Company had minimal operations from the period from March 20, 2013 (date of inception) to December 31, 2013.

Results for the three months and year ended December 31, 2014

For the three months ended December 31, 2014, the Company had a net loss of $72.0 million, or $0.48 basic and diluted loss per share. This loss includes the loss on disposal of assets of $55.5 million and the noncash amortization of stock-based compensation of $6.3 million. The Company’s adjusted net loss was $16.5 million (see Non-GAAP Measures section below), or $0.11 basic and diluted loss per share, which excludes a loss on disposal of assets of $55.5 million, or $0.37 loss per share.

For the year ended December 31, 2014, the Company had a net loss of $116.6 million, or $0.85 basic and diluted loss per share. This loss includes the loss on disposal of assets of $55.5 million and the noncash amortization of stock-based compensation of $23.9 million. The Company’s adjusted net loss was $61.1 million (see Non-GAAP Measures section below), or $0.45 basic and diluted loss per share, which excludes a loss on disposal of assets of $55.5 million, or $0.40 loss per share.

The Company had minimal operations during the period from March 20, 2013 (date of inception) to December 31, 2013 so the prior year periods are not comparable to results for the three months and year ended December 31, 2014.

Explanation of Components of Financial Results for the Fourth Quarter of 2014 and 2013

For the three months ended December 31, 2014, the Company recorded a net loss of $72.0 million. The Company recorded a net loss of $3.6 million for the three months ended December 31, 2013.

Time charter equivalent, or TCE revenue, a Non-GAAP measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management.

TCE revenue was $17.6 million for the three months ended December 31, 2014, associated with 22 vessels time chartered-in and two vessel owned, for which TCE revenue per day was $8,660 (see the breakdown of daily TCE averages below). Time charter equivalent revenue per day was adversely affected by a depressed rate environment for dry bulk carriers.

Vessel operating costs for the three months ended December 31, 2014 were $1.2 million related to two Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.

Charterhire expense was $23.7 million for the three months ended December 31, 2014 relating to the time chartered-in vessels including those described below. See the Company’s Fleet List below for the terms of these agreements.

Depreciation for the three months ended December 31, 2014 was $0.6 million and relates to two owned Kamsarmax vessels.

During the three months ended December 31, 2014 the Company recorded a loss of $55.5 million associated with writing down seven contracts to construct vessels that the Company has classified as held for sale as of December 31, 2014. These seven contracts to construct vessels include one Kamsarmax construction contract and six contracts for construction of LR2 product tankers (see recent significant events, below).

General and administrative expense was $8.5 million for the three months ended December 31, 2014. Such amount included $6.3 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors’ fees, professional fees and insurance. General and administrative expense was $4.8 million for the three months ended December 31, 2013, which includes $3.4 million of restricted stock amortization.

During the three months ended December 31, 2013, the Company recorded a $0.9 million gain in connection with a shareholder receivable denominated in Norwegian kroner that arose in September 2013 but was not settled in U.S. dollars until October 2013.

Explanation of Components of Financial Results for the Year Ended December 31, 2014 and the Period From March 20, 2013 (Date of Inception) to December 31, 2013

For the year ended December 31, 2014, the Company recorded a net loss of $116.6 million and recorded a net loss of $6.3 million during the period from March 20, 2013 (date of inception) to December 31, 2013.

TCE revenue was $45.4 million for the year ended December 31, 2014, associated with 24 vessels time chartered-in and two vessels owned, for which the time charter equivalent revenue per day was $7,957 (see the breakdown of daily TCE averages below). Time charter equivalent revenue per day was adversely affected by the integration of the time chartered vessels into our fleet which required significant time and fuel as they had to be repositioned for their first voyages as well as a depressed rate environment for dry bulk carriers.

Vessel operating costs for the year ended December 31, 2014 was $1.6 million related to two owned Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.

Charterhire expense was $73.2 million for the year ended December 31, 2014 relating to the time chartered-in vessels including those described below. See the Company’s Fleet List below for the terms of these agreements.

Depreciation for the year ended December 31, 2014 was $0.7 million and relates to two Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.

During the year ended December 31, 2014 the Company recorded a loss of $55.5 million associated with writing down seven contracts to construct vessels that the Company has classified as held for sale as of December 31, 2014. These seven contracts to construct vessels include one Kamsarmax construction contract and six contracts for construction of LR2 product tankers (see recent significant events, below).

General and administrative expense was $31.9 million for the year ended December 31, 2014. Such amount included $23.9 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors’ fees, professional fees and insurance. General and administrative expense was $5.5 million for the period from March 20, 2013 (date of inception) to December 31, 2013. Such amount included $3.4 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors’ fees, professional fees and insurance.

During the period from March 20, 2013 (date of inception) to December 31, 2013, the Company incurred a $1.1 million loss in connection with a shareholder receivable denominated in Norwegian kroner that arose in September 2013 but was not settled in U.S. dollars until October 2013.

Recent Significant Events

Agreements to Modify and Sell Existing Shipbuilding Contracts for Six Capesize Vessels

On December 17, 2014, the Company announced that it had (i) reached agreements with shipyards in South Korea and Romania to modify six newbuilding contracts for Capesize bulk carriers into newbuilding contracts for LR2 product tankers, (ii) reached an agreement to sell four of these LR2 newbuilding contracts to Scorpio Tankers Inc., a related party, and (iii) granted options to Scorpio Tankers Inc. to purchase the two remaining LR2 newbuilding contracts.

The sale price for each of the four LR2 newbuilding contracts is $51.0 million. The two option contracts, which expire on May 31, 2015, may be exercised by Scorpio Tankers Inc. for a fixed purchase price of $52.5 million for each contract.

Agreement to Sell Kamsarmax Newbuilding

On December 19, 2014, the Company announced that it had entered into an agreement to sell a Kamsarmax newbuilding dry bulk vessel for approximately $30.7 million. The vessel is currently being constructed at Tsuneishi Group (Zhoushan) Shipbuilding Inc., and has an expected delivery date in the third quarter of 2015.

Agreements to Modify Existing Shipbuilding Contracts for Three Capesize Vessels

On February 4, 2015, the Company announced that it had reached agreement with a shipyard in South Korea to modify existing newbuilding contracts for three Capesize vessels. The three contracts, two for vessels scheduled for delivery during the first quarter of 2016 and one for a vessel scheduled for delivery during the second quarter of 2016, will now provide for the construction of three LR1 product tankers, two of which will be scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017. As a result, the Company expects to incur a loss of approximately $22 million relating to writing down the contracts to their estimated fair market value. Also, upon completion of customary documentation, the LR1 contracts will be re-classified on the balance sheet as assets held for sale. Should the contracts be sold for their current fair market value, the estimated future cash obligations of the Company will be reduced by approximately $60 million. The Company has no plans for any further contract conversions. Scorpio Tankers Inc., has informed the Company that it will not purchase the LR1 vessels.

$409 Million Credit Facility

On December 30, 2014, the Company closed a $408.976 million senior secured credit facility arranged by two leading European financial institutions to finance a portion of the purchase price of 20 vessels (six Ultramax, nine Kamsarmax, and five Capesize vessels) with expected deliveries in 2015 and 2016. The facility was previously announced as a $540 million credit facility; however, the facility was reduced to $408.976 million due to the removal of the financing on the four Capesize vessels that the Company has agreed to convert into four LR2 product tankers (of which the Company will sell two LR2 product tankers to Scorpio Tankers Inc. and hold two LR2 product tankers for sale). The facility has a final maturity of six years from the date of signing.

$411.3 Million Credit Facility

On January 15, 2015, the Company closed a previously announced $411.264 million senior secured credit facility with a group of financial institutions to finance a portion of the purchase price of 12 Capesize vessels under construction at Sungdong Shipbuilding & Marine Engineering Co., Ltd. The facility matures in six years, and in certain circumstances up to 12 years, from the delivery of the final vessel securing the facility.

$42 Million Credit Facility

On January 30, 2015, the Company announced that it had closed a previously announced $42 million credit facility with a leading European financial institution to finance a portion of the purchase price of two Kamsarmax vessels (of which one Kamsarmax vessel was delivered in January 2015 to the Company from Imabari Shipbuilding Co. Ltd., Japan and one Kamsarmax vessel is under construction at Imabari Shipbuilding Co. Ltd., Japan). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard.

$26 Million Credit Facility

On February 27, 2015, the Company closed a senior secured credit facility of $26 million with ABN AMRO Bank N.V., The Netherlands. The facility has been used to finance a portion of the purchase price of one Capesize vessel, which was delivered to the Company in Q1 2015. The facility shall mature at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation (“Sinosure”) in respect of the $230.3 Million Credit Facility discussed below and drawings can be made under such facility. The terms and conditions of the facility, including covenants, are similar to those in the Company’s existing credit facilities and customary for financings of this type.

$19.8 Million Credit Facility

On March 2, 2015, the Company closed a senior secured credit facility of up to $19.8 million. The facility was previously announced as a $39.6 million credit facility, that has now been reduced to a size of $19.8 million due to the removal from the financing of one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover provided from the China Export & Credit Insurance Corporation (“Sinosure”). The facility will be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi Group Zhoushan Shipyard, China for delivery in Q1 2016. The facility shall mature 10 years from the date of delivery of the vessel. The terms and conditions of the facility, including covenants, are similar to those in the Company’s existing credit facilities and customary for financings of this type.

$230.3 Million Credit Facility

On March 2, 2015, the Company received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230.3 million. This commitment finalizes a previously announced memorandum of understanding for a $234.9 million credit facility. This facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover to be provided from the China Export & Credit Insurance Corporation (“Sinosure”). This facility will be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel has been delivered and six vessels are currently under construction at Shanghai Waigaoqiao Shipbuilding Co., Ltd, China) for delivery between Q1 2015 and Q2 2016. The terms and conditions of this facility, including covenants, will be similar to those in the Company’s existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation.

Update on Fleet Financing

Including the five credit facilities described above (excluding the $26 million Credit Facility), the Company has now either signed credit facility agreements for or received commitments for 70 of the vessels in its fleet, including five vessels which the Company intends to sell. In addition, the Company has agreed terms and conditions with a leading European financial institution to finance a portion of the cost of our additional five unfinanced vessels. The terms and conditions of these facilities, for which commitments are expected during the first half of 2015, are consistent with those of the Company’s existing credit commitments. The closing of any resultant credit facilities would remain subject to credit approval and customary conditions precedent, including negotiation and execution of definitive documentation.

Newbuilding Vessels Deliveries

Through March 2, 2015 the Company has taken delivery of the following Newbuilding vessels during 2015:

  • SBI Bravo, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd.
  • SBI Athena, an Ultramax vessel, was delivered from Chengxi Shipyard Co., Ltd.
  • SBI Samba, a Kamsarmax vessel, was delivered from Imabari Shipbuilding Co. Ltd.
  • SBI Antares, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd.
  • SBI Puro, a Capesize vessel, was delivered from Shanghai Waigaoqiao Shipbuilding Co., Ltd. The Company has agreed to time charter-out the SBI Puro to a major European charterer for 10-13 months at $13,800 per day.
  • SBI Leo, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd.
     

Current Liquidity

As of March 2, 2015, the Company had $182.1 million in cash and cash equivalents.

Debt

We made the following drawdowns from our credit facilities in November 2014:

 

                                         Drawdown amount
              Credit facility             ($ thousands)       Collateral
    ----------------------------------  ----------------  ------------------
 1  $39.6 Million Facility              $         16,775     SBI Cakewalk
 2  $39.6 Million Facility                        16,775    SBI Charleston

 

As of March 2, 2015, the Company’s outstanding debt balance, and amount available to draw is as follows:

 

                                       As of
                                    December 31,
                                        2014         As of March 2, 2015
                                   ------------- ---------------------------
                                       Amount        Amount        Amount
                                    outstanding   outstanding    available
                                   ------------- ------------- -------------
Senior Notes                       $      73,625$      73,625 $          --
$39.6 Million Credit Facility (1)         33,550        33,550            --
$408.976 Million Credit Facility
 (2)                                          --        14,988       393,988
$330 Million Credit Facility (1)              --        45,000       285,000
$42 Million Credit Facility (2)               --        20,400        21,000
$19.8 Million Credit Facility (2)             --            --        19,800
$67.5 Million Credit Facility (1)             --            --        67,500
$411.264 Million Credit Facility
 (3)                                          --            --       411,264
$230.3 Million Credit Facility (4)            --            --       230,325
$26 Million Credit Facility (5)               --        26,000            --
                                   ------------- ------------- -------------
Total                              $     107,175$     213,563$   1,428,877
                                   ============= ============= =============

(1) As most recently described in our press release dated July 30, 2014.

(2) As described above in this press release.

(3) As described above in this press release. This total commitment for 12
    Capesize vessels will be reduced by five Capesize vessels, two of which
    the Company has agreed to convert to LR2 product tankers under
    construction which are to be sold to Scorpio Tankers Inc. and three of
    which the Company has agreed to convert to LR1 product tankers under
    construction.

(4) As described in our press release dated December 5, 2014 and above in
    this press release.

(5) As described above in this press release. This is a credit facility
    which matures the earlier of (a) six months after the drawdown date or
    (b) ten business days after the date of which the $230.3 Million Credit
    Facility has been closed and can be drawn down.

 

Newbuilding Program

Our Newbuilding Program consists of contracts for the construction of 70 dry bulk vessels, comprised of 29 Ultramax newbuildings, 22 Kamsarmax newbuilding and 19 Capesize newbuildings. Through December 31, 2014, we have taken delivery of two Kamsarmax vessels. The aggregate construction price for the remaining 68 drybulk vessels is $2,496.9 million. As of March 2, 2015, we have paid a total of $946.6 million in installment payments due under these shipbuilding contracts including for those vessels delivered to us in 2015. The remaining $1,550.3 million is scheduled to be paid in installments through the delivery dates of each vessel. The estimated future payment dates and amounts are as follows(1):

 

                    Q1 2015  $           30.6 million(2)
                    Q2 2015             201.6
                    Q3 2015             469.4
                    Q4 2015             270.7
                    Q1 2016             281.6
                    Q2 2016             236.4
                    Q3 2016              60.0
                             ----------------
                             $        1,550.3 million
                             ================

(1) These are estimates only and are subject to change as construction
    progresses.
(2) Relates to payments expected to be made from March 2, 2015 to March 31,
    2015.

 

Vessels Under Construction To Be Sold

We also have contracts for ten vessels which we intend to sell, consisting of one Kamsarmax vessel under construction, six LR2 product tankers under construction (which were previously Capesize vessels under construction) and three Capesize vessels under construction to be converted to LR1 product tankers under construction. Through March 2, 2015, we have paid $171.5 million under these contracts, including payments made on the nine Capesize vessels under construction prior to their modification. These ten contracts, including the nine contracts for product tankers, have an aggregate construction price of $527.8 million of which $369.1 million has not been paid as of March 2, 2015. Until these contracts are sold, the remaining installment payments under the terms of these contracts are estimated to be payable as follows (1):

 

                    Q1 2015  $             -- million(2)
                    Q2 2015                --
                    Q3 2015              53.9
                    Q4 2015              24.8
                    Q1 2016              57.6
                    Q2 2016              25.4
                    Q3 2016              75.7
                    Q4 2016              38.4
                    Q1 2017              27.4
                    Q2 2017              44.4
                    Q3 2017              21.5
                             ----------------
                             $          369.1 million
                             ================

(1) These are estimates only and are subject to change as construction
    progresses.
(2) Relates to payments expected to be made from March 2, 2015 to March 31,
    2015.

 

Conference Call Details:
Wednesday, March 4, 2015 and will host a conference call later in the day at 11:30 AM Eastern Standard Time and 5:30 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (800)-236-9788 (U.S.) or 1 (913)-312-0975 (International). The conference participant passcode is 3379110. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website www.scorpiobulkers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL:http://www.visualwebcaster.com/event.asp?id=101761

 

                    Scorpio Bulkers Inc. and Subsidiaries
              Consolidated Statements of Operations (unaudited)
                (Dollars in Thousands, Except Per Share Data)


                                                               Period from
                                                                March 20,
                    Three Months  Three Months  For the year  2013 (date of
                        Ended         Ended         Ended     inception) to
                    December 31,  December 31,  December 31,   December 31,
                        2014          2013          2014           2013
                    ------------  ------------  ------------  -------------
Revenue:
  Vessel revenue    $     17,732  $         --  $     48,987  $          --
                    ------------  ------------  ------------  -------------
Operating expenses:
  Voyage expenses            161            --         3,579             --
  Vessel operating
   costs                   1,218            --         1,600             --
  Charterhire
   expense                23,746            --        73,214             --
  Vessel
   depreciation              569            --           686             --
  Loss on disposal
   of assets              55,487            --        55,487             --
  General and
   administrative
   expenses                8,524         4,829        31,909          5,505
                    ------------  ------------  ------------  -------------
Total operating
 expenses                 89,705         4,829       166,475          5,505
                    ------------  ------------  ------------  -------------
Operating loss           (71,973)       (4,829)     (117,488)        (5,505)
                    ------------  ------------  ------------  -------------
Other income
 (expense):
  Interest income            130           323         1,052            341
  Foreign exchange
   gain (loss)                43           945            43         (1,135)
  Other expense, net        (198)           (8)         (172)            (8)
                    ------------  ------------  ------------  -------------
Total other income
 (expense)                   (25)        1,260           923           (802)
                    ------------  ------------  ------------  -------------
Net loss            $    (71,998)$     (3,569)$   (116,565)$      (6,307)
                    ============  ============  ============  =============

Loss per common
 share- basic and
 diluted (1)        $      (0.48)$      (0.04)$      (0.85)$       (0.16)
Weighted-average
 shares outstanding-
 basic and diluted
 (1)                 151,119,957    91,023,403   137,592,861     39,925,160

(1) Diluted weighted-average shares outstanding, which would include the
    impact of restricted shares, for the three months ended December 31,
    2014 and 2013, for the year ended December 31, 2014 and for the period
    from March 20, 2013 (date of inception) to December 31, 2013, would be
    anti-dilutive since the Company is in a net loss position. As such,
    there is no difference between basic and diluted earnings per share for
    these periods.



                    Scorpio Bulkers Inc. and Subsidiaries
                   Consolidated Balance Sheets (unaudited)
                (Dollars in Thousands, Except Per Share Data)


                                                        December 31,
                                                     2014          2013
                                                 ------------  ------------
Current assets
  Cash and cash equivalents                      $    272,673$    733,896
  Due from charterers                                  12,411            --
  Due from related party                               31,277            --
  Prepaid expenses and other current assets             2,557            61
  Assets held for sale                                 43,781            --
                                                 ------------  ------------
Total current assets                                  362,699       733,957
                                                 ------------  ------------
Non-current assets
  Vessels, net                                         66,633            --
  Vessels under construction                          866,844       371,692
  Deferred financing costs, net                         3,181            --
  Other assets                                         24,848            35
                                                 ------------  ------------
  Total non-current assets                            961,506       371,727
                                                 ------------  ------------
Total assets                                     $  1,324,205$  1,105,684
                                                 ============  ============

Liabilities and shareholders' equity
Current liabilities
  Bank loans                                     $      3,300  $         --
  Accounts payable and accrued expenses                17,042         1,472
                                                 ------------  ------------
Total current liabilities                              20,342         1,472
                                                 ------------  ------------
Non-current liabilities
  Bank loans                                           30,250            --
  Senior Notes                                         73,625            --
                                                 ------------  ------------
Total non-current liabilities                         103,875            --
                                                 ------------  ------------
Total liabilities                                     124,217         1,472
                                                 ------------  ------------
Shareholders' equity
  Common stock, $0.01 par value per share;
   authorized 450,000,000 shares; issued and
   outstanding 180,299,695 and 133,403,931 shares
   as of December 31, 2014 and December 31, 2013,
   respectively                                         1,803         1,334
  Paid-in capital                                   1,321,057     1,109,185
  Accumulated deficit                                (122,872)       (6,307)
                                                 ------------  ------------
Total shareholders' equity                          1,199,988     1,104,212
                                                 ------------  ------------
Total liabilities and shareholders' equity       $  1,324,205$  1,105,684
                                                 ============  ============



                    Scorpio Bulkers Inc. and Subsidiaries
                    Statements of Cash Flows (unaudited)
                           (Dollars in Thousands)


                                                               Period from
                                                                March 20,
                                                For the year  2013 (date of
                                                    ended     inception) to
                                                December 31,   December 31,
                                                    2014           2013
                                                ------------  -------------
Operating activities
Net loss                                        $   (116,565)$      (6,307)
Adjustment to reconcile net loss to net cash
 used by operating activities:
  Restricted stock amortization                       23,869          3,359
  Amortization of deferred financing costs               150             --
  Vessel depreciation                                    686             --
  Loss on disposal of assets                          55,487             --
Changes in operating assets and liabilities:
  Increase in amounts due from charterers            (17,716)           (35)
  Increase in prepaid expenses and other current
   assets                                             (2,496)           (61)
  Increase in accounts payable and accrued
   expenses                                            6,245            807
                                                ------------  -------------
Net cash used in operating activities                (50,340)        (2,237)
                                                ------------  -------------
Investing activities
  Security deposit paid on assets held for sale      (31,277)            --
  Payments for vessels and vessels under
   construction                                     (651,505)      (371,692)
                                                ------------  -------------
Net cash used in investing activities               (682,782)      (371,692)
                                                ------------  -------------
Financing activities
  Proceeds from issuance of common stock             187,615      1,107,825
  Proceeds from bank loans                            33,550             --
  Proceeds from Senior Notes offering                 73,625             --
  Debt issue costs paid                              (22,891)            --
                                                ------------  -------------
Net cash provided by financing activities            271,899      1,107,825
                                                ------------  -------------
(Decrease) increase in cash and cash equivalents    (461,223)       733,896
Cash at cash equivalents, beginning of period        733,896             --
                                                ------------  -------------
Cash and cash equivalents, end of year          $    272,673$     733,896
                                                ============  =============



                    Scorpio Bulkers Inc. and Subsidiaries
                      Other Operating Data (unaudited)
                 (Dollars in Thousands, Except Per Day Data)


                                                                Period from
                                                                 March 20,
                        Three Months Three Months For the Year 2013 (date of
                            Ended        Ended        Ended    inception) to
                        December 31, December 31, December 31,  December 31,
                            2014         2013         2014          2013
                        ------------ ------------ ------------ -------------
Time Charter Equivalent
 Revenue (1):
  Vessel revenue        $     17,732 $         -- $     48,987 $          --
  Voyage expenses                161           --        3,579            --
                        ------------ ------------ ------------ -------------
  Time charter
   equivalent revenue   $     17,571 $         -- $     45,408 $          --
                        ============ ============ ============ =============
Time charter equivalent
 revenue attributable
 to:
  Kamsarmax             $     13,779 $         -- $     32,265 $          --
  Ultramax                     3,792           --       10,143            --
                        ------------ ------------ ------------ -------------
                        $     17,571 $         -- $     42,408 $          --
                        ============ ============ ============ =============
Revenue days (1):
  Kamsarmax                    1,570           --        4,527            --
  Ultramax                       459           --        1,180            --
                        ------------ ------------ ------------ -------------
Combined                       2,029           --        5,707            --
                        ============ ============ ============ =============
TCE per revenue day (1):
  Kamsarmax             $      8,777 $         -- $      7,790 $          --
  Ultramax              $      8,261 $         -- $      8,599 $          --
  Combined              $      8,660 $         -- $      7,957 $          --

(1) We define Time Charter Equivalent (TCE) revenue as voyage revenues less
    voyage expenses. Such TCE revenue, divided by the number of our
    available days during the period, or revenue days, is TCE per revenue
    day, which is consistent with industry standards. TCE per revenue day is
    a common shipping industry performance measure used primarily to compare
    daily earnings generated by vessels on time charters with daily earnings
    generated by vessels on voyage charters, because charter hire rates for
    vessels on voyage charters are generally not expressed in per-day
    amounts while charter hire rates for vessels on time charters generally
    are expressed in such amounts.



 

Fleet List as of March 2, 2015

Newbuilding Program

Owned vessels

 

           Vessel Name             Year Built      DWT        Vessel Type
-------------------------------- ------------- ---------- ------------------
SBI Puro                              2015        180,000      Capesize
                                               ----------
         Total Capesize                           180,000
SBI Cakewalk                          2014         82,000      Kamsarmax
SBI Charleston                        2014         82,000      Kamsarmax
SBI Samba                             2015         84,000      Kamsarmax
                                               ----------
         Total Kamsarmax                          248,000
SBI Antares                           2015         61,000      Ultramax
SBI Athena                            2015         64,000      Ultramax
SBI Bravo                             2015         61,000      Ultramax
SBI Leo                               2015         61,000      Ultramax
                                               ----------
         Total Ultramax                           247,000
                                               ----------
Total Owned Vessels DWT                           675,000
                                               ==========

 

Vessels under construction

 

Capesize
                                         Expected
               Vessel Name             Delivery (1)        DWT    Shipyard
  1 Hull H1310 - TBN SBI Valrico          Q3-15        180,000   Waigaoqiao
  2 Hull H1311 - TBN SBI Maduro           Q4-15        180,000   Waigaoqiao
  3 Hull H1364 - TBN SBI Belicoso         Q3-15        180,000   Waigaoqiao
  4 Hull H1365 - TBN SBI Corona           Q1-16        180,000   Waigaoqiao
  5 Hull H1366 - TBN SBI Diadema          Q1-16        180,000   Waigaoqiao
  6 Hull H1367 - TBN SBI Estupendo        Q2-16        180,000   Waigaoqiao
  7 Hull S1205 - TBN SBI Camacho          Q2-15        180,000    Sungdong
  8 Hull S1206 - TBN SBI Montesino        Q2-15        180,000    Sungdong
  9 Hull S1211 - TBN SBI Magnum           Q2-15        180,000    Sungdong
 10 Hull S1212 - TBN SBI Montecristo      Q3-15        180,000    Sungdong
 11 Hull S1213 - TBN SBI Aroma            Q3-15        180,000    Sungdong
 12 Hull S1214 - TBN SBI Cohiba           Q4-15        180,000    Sungdong
 13 Hull S1215 - TBN SBI Habano           Q1-16        180,000    Sungdong
 14 Hull H1059 - TBN SBI Churchill        Q4-15        180,000     Daewoo
 15 Hull H1060 - TBN SBI Perfecto         Q1-16        180,000     Daewoo
 16 Hull H1061 - TBN SBI Presidente       Q2-16        180,000     Daewoo
 17 Hull HN1058 - TBN SBI Behike          Q4-15        180,000     Daehan
 18 Hull HN1059 - TBN SBI Monterrey       Q4-15        180,000     Daehan
                                                    ----------
    Capesize NB DWT                                  3,240,000
                                                    ----------

Kamsarmax

                                      Expected
              Vessel Name           Delivery (1)           DWT    Shipyard
  1 Hull S1681 - TBN SBI Rumba         Q3-15            84,000    Imabari
  2 Hull 1090 - TBN SBI Electra        Q3-15            82,000  Yangzijiang
  3 Hull 1091 - TBN SBI Flamenco       Q3-15            82,000  Yangzijiang
  4 Hull 1092 - TBN SBI Rock           Q4-15            82,000  Yangzijiang
  5 Hull 1093 - TBN SBI Twist          Q1-16            82,000  Yangzijiang
  6 Hull SS179 - TBN SBI Merengue      Q1-16            81,600   Tsuneishi
  7 Hull S1228 - TBN SBI Capoeira      Q2-15            82,000     Hudong
  8 Hull S1722A - TBN SBI Conga        Q2-15            82,000     Hudong
  9 Hull S1723A - TBN SBI Bolero       Q3-15            82,000     Hudong
 10 Hull S1229 - TBN SBI Carioca       Q3-15            82,000     Hudong
 11 Hull S1724A - TBN SBI Sousta       Q3-15            82,000     Hudong
 12 Hull S1725A - TBN SBI Reggae       Q4-15            82,000     Hudong
 13 Hull S1726A - TBN SBI Zumba        Q1-16            82,000     Hudong
 14 Hull S1231 - TBN SBI Macarena      Q1-16            82,000     Hudong
 15 Hull S1735A - TBN SBI Parapara     Q2-16            82,000     Hudong
 16 Hull S1736A - TBN SBI Mazurka      Q2-16            82,000     Hudong
 17 Hull S1230 - TBN SBI Lambada       Q3-15            82,000     Hudong
 18 Hull S1232 - TBN SBI Swing         Q2-16            82,000     Hudong
 19 Hull S1233 - TBN SBI Jive          Q3-16            82,000     Hudong
                                                 -------------
    Kamsarmax NB DWT                                 1,559,600
                                                 -------------

Ultramax

                                      Expected
              Vessel Name           Delivery (1)           DWT    Shipyard
  1 Hull 1907 - TBN SBI Hera           Q2-16            60,200     Mitsui
  2 Hull 1906 - TBN SBI Zeus           Q2-16            60,200     Mitsui
  3 Hull 1911 - TBN SBI Poseidon       Q2-16            60,200     Mitsui
  4 Hull 1912 - TBN SBI Apollo         Q2-16            60,200     Mitsui
  5 Hull S870 - TBN SBI Echo           Q3-15            61,000    Imabari
  6 Hull S871 - TBN SBI Tango          Q3-15            61,000    Imabari
  7 Hull S-A098 - TBN SBI Achilles     Q4-15            61,000    Imabari
  8 Hull S-A089 - TBN SBI Cronos       Q4-15            61,000    Imabari
  9 Hull S-A090 - TBN SBI Hermes       Q1-16            61,000    Imabari
 10 Hull NE182 - TBN SBI Maia          Q3-15            61,000     Nacks
 11 Hull NE183 - TBN SBI Hydra         Q3-15            61,000     Nacks
 12 Hull NE194 - TBN SBI Hyperion      Q2-16            61,000     Nacks
 13 Hull NE195 - TBN SBI Tethys        Q2-16            61,000     Nacks
 14 Hull DE019 - TBN SBI Lyra          Q2-15            61,000     Dacks
 15 Hull DE020 - TBN SBI Subaru        Q2-15            61,000     Dacks
 16 Hull DE021 - TBN SBI Ursa          Q3-15            61,000     Dacks
 17 Hull CX0651 - TBN SBI Pegasus      Q3-15            64,000     Dacks
 18 Hull CX0652 - TBN SBI Orion        Q4-15            64,000    Chengxi
 19 Hull CX0612 - TBN SBI Thalia       Q4-15            64,000    Chengxi
 20 Hull CX0653 - TBN SBI Hercules     Q4-15            64,000    Chengxi
 21 Hull CX0627 - TBN SBI Perseus      Q1-16            64,000    Chengxi
 22 Hull CX0654 - TBN SBI Kratos       Q1-16            64,000    Chengxi
 23 Hull CX0655 - TBN SBI Samson       Q2-16            64,000    Chengxi
 24 Hull CX0613 - TBN SBI Phoebe       Q3-16            64,000    Chengxi
 25 Hull CX0656 - TBN SBI Phoenix      Q3-16            64,000    Chengxi
                                                 -------------
    Ultramax NB DWT                                  1,548,800
                                                 -------------
    Total Newbuild DWT                               6,348,400
                                                 =============

 

Vessels to be Sold

 

                                      Expected
              Vessel Name            Delivery(1)      DWT         Shipyard
  1 Hull S3120 - TBN SBI Parejo         Q3-16          115,000    Sungdong
  2 Hull S3121 - TBN SBI Tuscamina      Q3-16          115,000    Sungdong
  3 Hull H5023 - TBN SBI Panatela       Q4-16          112,000     Daewoo
  4 Hull H5024 - TBN SBI Robusto        Q1-17          112,000     Daewoo
  5 Hull H.5003 - TBN SBI Macanudo      Q1-16          115,000     Daehan
  6 Hull H.5004 - TBN SBI Cuaba         Q2-16          115,000     Daehan
                                                 -------------
    Total LR2 NB DWT                                   684,000
  1 Hull S3122 - TBN SBI Lonsdale       Q2-17           74,500    Sungdong
  2 Hull S3123 - TBN SBI Partagas       Q2-17           74,500    Sungdong
  3 Hull S3124 - TBN SBI Toro           Q3-17           74,500    Sungdong
                                                 -------------
    Total LR1 NB DWT                                   223,500
                                                 -------------
    Total Product Tankers NB DWT                       907,500
                                                 -------------
    Kamsarmax Held for Sale
  1 Hull SS164 - TBN SBI Salsa          Q3-15           81,600   Tsuneishi
                                                 -------------
    Total Kamsarmax NB DWT                              81,600
                                                 -------------
    Total Vessels Held for Sale DWT                    989,100
                                                 =============

 

As used in this earnings release “Dacks” refers to Dalian COSCO KHI Ship Engineering Co. Ltd., “Daehan” refers to Daehan Shipbuilding Co., Ltd., “Daewoo” refers to Daewoo Mangalia Heavy Industries S.A.,”Chengxi” refers to Chengxi Shipyard Co., Ltd., “Hudong” refers to Hudong-Zhonghua Shipbuilding (Group) Co., Inc., “Imabari” refers to Imabari Shipbuilding Co. Ltd., “Mitsui” refers to Mitsui Engineering & Shipbuilding Co. Ltd., “Nacks” refers to Nantong COSCO KHI Ship Engineering Co., Ltd., “Sungdong” refers to Sungdong Shipbuilding & Marine Engineering Co., Ltd., “Tsuneishi” refers to Tsuneishi Group (Zhoushan) Shipbuilding Inc., “Waigaoqiao” refers to Shanghai Waigaoqiao Shipbuilding Co., Ltd., and “Yangzijiang” refers to Jiangsu Yangzijiang Shipbuilding Co. Ltd.

 

(1) Expected delivery date relates to quarter during which each vessel is
    currently expected to be delivered from the shipyard.

 

Time chartered-in vessels

The Company has time chartered-in 14 dry bulk vessels. The terms of the time charter-in contracts are summarized as follows:

 

                                                 Daily Base
 Vessel Type  Year Built     DWT    Where Built     Rate     Earliest Expiry
------------- ---------- ---------- ----------- ----------- ----------------
Post-Panamax     2012        98,700    China    $    13,000  15-Oct-16  (1)
Post-Panamax     2009        93,000    China    See Note (2) 09-May-15  (2)
Post-Panamax     2011        93,000    China    $     9,500  11-Aug-15  (3)
Kamsarmax        2014        82,500 South Korea $    12,000  23-Jul-15  (4)
Kamsarmax        2012        82,000 South Korea $    15,500  23-Jul-17  (5)
Kamsarmax        2011        81,900 South Korea $    12,750  03-Apr-15  (6)
Kamsarmax        2011        81,500 South Korea $    15,000  15-Jan-16  (7)
Panamax          2004        77,500    China    $    14,000  03-Jan-17  (8)
Panamax          2014        76,000    China    See Note (9) 19-Jun-15  (9)
Ultramax         2010        61,000    Japan    $    14,200  01-Apr-17  (10)
Supramax         2010        58,000    China    $    14,250  12-Dec-15  (11)
Supramax         2008        58,000    China    $    12,250  13-Jun-16  (12)
Supramax         2015        55,000    Japan    $    14,000  27-Jan-18  (13)
Handymax         2002        48,500    Japan    $    12,000  31-Jan-17  (14)
                         ----------
 Total TC DWT             1,046,600
                         ==========

 

 

(1) This vessel has been time chartered-in for 21 to 25 months at the
    Company's option at $13,000 per day. The Company has the option to
    extend this time charter for one year at $14,000 per day. This vessel
    was delivered February 22, 2015.

(2) This vessel has been time chartered-in for ten to 14 months at the
    Company's option at a rate of 90% of the Baltic Panamax 4TC Index. The
    Company has the option to extend this time charter for an additional ten
    to 14 months at the same rate of hire. The vessel was delivered on July
    9, 2014.

(3) This vessel has been time chartered-in for 11 to 13 months at the
    Company's option at $9,500 per day. The Company has the option to extend
    this time charter for one year at $11,500 per day. The vessel was
    delivered on September 11, 2014.

(4) This vessel has been time chartered-in for 11 to 14 months at the
    Company's option at $12,000 per day. The Company has the option to
    extend this time charter for one year. The vessel was delivered on
    August 22, 2014.

(5) This vessel has been time chartered-in for 39 to 44 months at the
    Company's option at $15,500 per day. The Company has the option to
    extend this time charter for one year at $16,300 per day. The vessel was
    delivered on April 23, 2014.

(6) This vessel has been time chartered-in for 11 to 13 months at the
    Company's option at $12,750 per day. The Company has the option to
    extend this time charter for one year at $13,750 per day. The vessel was
    delivered on May 3, 2014.

(7) This vessel has been time chartered-in for 23 to 28 months at the
    Company's option at $15,000 per day. The Company has the option to
    extend the charter for an additional 11 to 13 months at $16,000 per day.
    This vessel was delivered on February 15, 2014

(8) This vessel has been time chartered-in for 32 to 38 months at the
    Company's option at $14,000 per day. The vessel was delivered on May 3,
    2014.

(9) This vessel has been time chartered-in for 10 to 13 months at Company's
    option at $5,000 per day for the first 40 days and $10,000 thereafter,
    per day. The Company has the option to extend the charter for an
    additional year. The vessel was delivered on August 10, 2014.

(10)This vessel has been time chartered-in for three years at $14,200 per
    day. The Company has options to extend the charter for up to three
    consecutive one year periods at $15,200 per day, $16,200 per day and
    $17,200 per day, respectively. This vessel was delivered on April 13,
    2014.

(11)This vessel has been time chartered-in for 20 to 24 months at the
    Company's option at $14,250 per day. The Company has the option to
    extend the charter for an additional ten to 12 months at $14,850 per
    day. This vessel was delivered on April 12, 2014.

(12)This vessel has been time chartered-in for 21 to 25 months at the
    Company's option at $12,250 per day. The Company has the option to
    extend this time charter for one year at $13,000 per day. The vessel was
    delivered on September 13, 2014.

(13)This vessel has been time chartered-in for three years at $14,000 per
    day. The Company has options to extend the charter for up to two
    consecutive one year periods at $15,000 per day and $16,000 per day,
    respectively. This vessel was delivered January 27, 2015.

(14)This vessel has been time chartered-in for 34 to 37 months at the
    Company's option at $12,000 per day. The Company has options to extend
    the charter for up to three consecutive one year periods at $12,750 per
    day, $13,600 per day and $14,800 per day, respectively. This vessel was
    delivered on March 31, 2014.

 

About Scorpio Bulkers Inc.

Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc. currently owns eight vessels, consisting of one Capesize, three Kamsarmax vessels and four Ultramax vessels. The Company also time charters-in 14 dry bulk vessels (consisting of one Handymax, one Ultramax, three Supramax, two Panamax, four Kamsarmax and three Post-Panamax vessels) and has contracted for 63 dry bulk vessels consisting of 25 Ultramax, 20 Kamsarmax (including one vessel held for sale) and 18 Capesize vessels, from shipyards in Japan, South Korea, China and Romania. The Company has also contracted for nine product tankers that are currently classified as held for sale, including six LR2’s and three LR1’s from shipyards in South Korea and Romania. Upon final delivery of all of the vessels the owned fleet is expected to have a total carrying capacity of approximately 7.0 million deadweight tonnes. Additional information about the Company is available on the Company’s website www.scorpiobulkers.com, which is not a part of this press release.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. 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. Forward-looking statements 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 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 this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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 our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

Non-GAAP Measures

This press release describes adjusted net income, which is not a measure prepared in accordance with GAAP. The Non-GAAP measure presented in this press release as we believe that it provides investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with GAAP.

Adjusted net loss

 

                               For the three months ended December 31,
                                   2014                      2013
                         ------------------------  ------------------------
                            Amount     Per share      Amount     Per share
                         (unaudited)  (unaudited)  (unaudited)  (unaudited)
                         -----------  -----------  -----------  -----------
Net loss                 $   (71,998)$     (0.48)$    (3,569)$     (0.04)
Adjustments:
  Loss on disposal of
   assets                     55,487         0.37           --           --
                         -----------  -----------  -----------  -----------
Adjusted net loss        $   (16,511)$     (0.11)$    (3,569)$     (0.04)
                         ===========  ===========  ===========  ===========



                                                     Period from March 20,
                            For the year ended     2013 (date of inception)
                             December 31, 2014       to December 31, 2013
                         ------------------------  ------------------------
                            Amount     Per share      Amount     Per share
                         (unaudited)  (unaudited)  (unaudited)  (unaudited)
                         -----------  -----------  -----------  -----------
Net loss                 $  (116,565)$     (0.85)$    (6,307)$     (0.16)
Adjustments:
  Loss on disposal of
   assets                     55,487         0.40           --           --
                         -----------  -----------  -----------  -----------
Adjusted net loss        $   (61,078)$     (0.45)$    (6,307)$     (0.16)
                         ===========  ===========  ===========  ===========

 

Contact:

Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)

Source: Scorpio Bulkers Inc.