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Scorpio Bulkers Inc. Announces Financial Results for the Third Quarter of 2018 and Declares a Quarterly Dividend

Oct 22, 2018

MONACO, Oct. 22, 2018 (GLOBE NEWSWIRE) — Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the “Company”), today reported its results for the three and nine months ended September 30, 2018.

The Company also announced today that on October 19, 2018, its Board of Directors declared a quarterly cash dividend of $0.02 per share on the Company’s common shares.

Results for the Three and Nine Months Ended September 30, 2018 and 2017

For the third quarter of 2018, the Company’s GAAP net loss was $0.4 million, or $0.01 loss per diluted share. These results include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt (see discussion below, “Debt”). For the same period in 2017, the Company’s GAAP net loss was $10.7 million, or $0.15 loss per diluted share. Total vessel revenues for the third quarter of 2018 were $62.5 million, compared to $38.6 million for the same period in 2017. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the third quarters of 2018 and 2017 were $28.8 million and $12.4 million, respectively (see Non-GAAP Financial Measures below).

For the nine months ended September 30, 2018, the Company’s GAAP net loss was $5.3 million or $0.07 loss per diluted share. For the same period in 2017, the Company’s GAAP net loss was $58.7 million, or $0.82 loss per diluted share. Total vessel revenues for the first nine months of 2018 were $177.3 million, compared to $111.1 million for the same period in 2017. EBITDA for the nine months ended September 30, 2018 and 2017 were $77.2 million and $12.3 million, respectively (see Non-GAAP Financial Measures below).

While the first nine months of 2018 did not include any non-GAAP adjustments to net income, the Company’s first nine months of 2017 GAAP net loss included a loss/write-off of vessels and assets held for sale of $17.7 million and the write-off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million. Excluding these items, the Company’s adjusted net loss for the first nine months of 2017 was $40.5 million, or $0.56 adjusted loss per diluted share. Adjusted EBITDA for the first nine months of 2017 was $30.0 million (see Non-GAAP Financial Measures below).

TCE Revenue

TCE Revenue Earned during the Third Quarter of 2018

  • Our Kamsarmax fleet earned $13,649 per day
  • Our Ultramax fleet earned $11,342 per day

Voyages Fixed thus far for the Fourth Quarter of 2018

  • Kamsarmax fleet: approximately $14,382 per day for 49% of the days
  • Ultramax fleet: approximately $13,388 per day for 47% of the days

Cash and Cash Equivalents

As of October 19, 2018, the Company had approximately $58.0 million in cash and cash equivalents.

Recent Significant Events

Share Repurchase Program

During the third quarter of 2018, the Company repurchased approximately 1.5 million shares of the Company’s common shares, at an average cost of $6.84 per share. The Company subsequently repurchased approximately 0.3 million shares of the Company’s common shares at an average cost of $6.60 per share from October 1, 2018 through October 12, 2018. These repurchases, totaling $11.9 million, were made under the Board of Directors authorized share repurchase program (the “Share Repurchase Program”) and funded from available cash resources. As of October 19, 2018, the Company had $18.4 million authorized remaining available under the Share Repurchase Program.

On October 19, 2018, the Company’s Board of Directors authorized a new share repurchase program to purchase up to an aggregate of $50.0 million of our common shares (the “New Share Repurchase Program”). This New Share Repurchase Program replaced our Share Repurchase Program that was previously authorized in September 2017 and that was terminated in conjunction with the New Share Repurchase Program. The specific timing and amounts of the repurchases will be in the sole discretion of management and may vary based on market conditions and other factors. The Company is not obligated under the terms of the program to repurchase any of its common shares. The authorization has no expiration date.

Dividend

In the third quarter of 2018, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.02 per share totaling approximately $1.5 million.

On October 19, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on or about December 14, 2018, to all shareholders of record as of November 14, 2018. As of October 19, 2018, 75,397,899 shares were outstanding.

Investment in Scorpio Tankers Inc.

On October 12, 2018, the Company invested $100.0 million in a related party, Scorpio Tankers Inc. (NYSE:STNG) (“Scorpio Tankers”) for approximately 54.1 million, or 10.9%, of Scorpio Tankers’ issued and outstanding common shares. The investment was part of a larger $300.0 million equity raise through a public offering of common shares by Scorpio Tankers.

IMO 2020

The Company has agreed letters of intent, which are subject to the execution of definitive documentation, with suppliers, engineering firms, and ship repair facilities to cover the purchase and installation of Exhaust Gas Cleaning Systems (“Scrubbers”) on substantially all of its owned and finance leased Kamsarmax and Ultramax vessels between the second quarter of 2019 and the third quarter of 2020. The Scrubbers and their installation will cost between $1.5 – $2.2 million per vessel, and the Company anticipates that between 60-70% of these costs will be financed.

Charter Employment Fixed

The Company has entered into time charter-out agreements, for which certain information is summarized below.

                                           
Vessel   Type   Earliest Redelivery Date   Rate Per Day                              
SBI Jaguar   Ultramax   April 2019   $16,000                              
SBI Ursa   Ultramax   June 2019   15,000                              
SBI Tango   Ultramax   March 2019   14,500                              
SBI Cougar   Ultramax   March 2019   16,500                              
SBI Echo   Ultramax   February 2019   15,000                              
SBI Thalia   Ultramax   April 2019   16,500                              
SBI Lyra   Ultramax   April 2019   16,500                              
SBI Bolero   Kamsarmax   May 2019   14,500                              
SBI Macarena   Kamsarmax   February 2019   16,000                              
SBI Mazurka   Kamsarmax   May 2019   16,000                              
SBI Samba   Kamsarmax   April 2019   15,500                              
                                           

Debt

$19.0 Million Lease Financing – SBI Echo

On July 18, 2018, the Company closed a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Echo, a 2015 Japanese built Ultramax vessel, for consideration of $19.0 million. As part of the transaction, the Company will make payments of $5,400 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus 1.97% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction is being treated as a financial lease for accounting purposes.

$19.0 Million Lease Financing – SBI Tango

On July 18, 2018, the Company closed a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Tango, a 2015 Japanese built Ultramax vessel, for consideration of $19.0 million. As part of the transaction, the Company will make payments of $5,400 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus 1.65% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction is being treated as a financial lease for accounting purposes.

$42.0 Million Credit Facility

During the third quarter of 2018, the Company repaid approximately $8.2 million of this loan as the SBI Tango is now financed under the $19.0 Million Lease Financing – SBI Tango.

$30.0 Million Credit Facility

On September 13, 2018, the Company entered into a senior secured credit facility for up to $30.0 million with ING Bank N.V. to refinance two of our Kamsarmax bulk carriers (SBI Zumba and SBI Parapara). The facility has a final maturity date of five years from drawdown date and bears interest at LIBOR plus a margin of 2.20% per annum. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax vessels and guaranteed by each of the vessel owning subsidiaries.

$60.0 Million Credit Facility

On September 11, 2018, the Company entered into a senior secured credit facility for up to $60.0 million. The loan facility will be used to finance up to 60% of the fair market value of two Ultramax dry bulk vessels (SBI Perseus and SBI Phoebe) and two Kamsarmax dry bulk vessels (SBI Electra and SBI Flamenco). The facility has a final maturity date of five years from drawdown date and bears interest at LIBOR plus a margin of 2.25% per annum. This facility is secured by, among other things, a first preferred mortgage on the four vessels and guaranteed by each of the vessel owning subsidiaries.

$67.5 Million Credit Facility

During the third quarter of 2018, the Company fully repaid this loan and terminated the credit facility. The four vessels previously financed by this loan are now financed under the $60.0 Million Credit Facility.

$184.0 Million Credit Facility

On September 21, 2018, the Company entered into a senior secured credit facility for up to $184.0 million with Nordea Bank AB (publ), acting through its New York branch, and Skandinaviska Enskilda Banken AB (publ) to refinance up to 60% of the fair market value of six Ultramax dry bulk vessels (SBI Athena, SBI Thalia, SBI Zeus, SBI Hera, SBI Poseidon and SBI Apollo) and six Kamsarmax dry bulk vessels (SBI Conga, SBI Bolero, SBI Sousta, SBI Rock, SBI Reggae and SBI Mazurka). The facility, which is comprised of a term loan of up to $104.0 million and a revolver of up to $80.0 million, has a final maturity date of five years from signing date and bears interest at LIBOR plus a margin of 2.40% per annum. This facility is secured by, among other things, a first preferred mortgage on the twelve vessels and guaranteed by each of the vessel owning subsidiaries.

$409.0 Million Credit Facility

During the third quarter of 2018, the Company fully repaid this loan and terminated the credit facility. Two of the Kamsarmax vessels previously financed by this loan are now financed under the $30.0 Million Credit Facility, twelve vessels previously financed by this loan are now financed under the $184.0 Million Credit Facility and the SBI Echo is now financed under the $19.0 Million Lease Financing – SBI Echo.

$34.0 Million Credit Facility

On October 3, 2018, the Company entered into a senior secured credit facility for up to $34.0 million with a leading European financial institution to refinance up to 62.5% of the fair market value of two Kamsarmax bulk vessels (SBI Jive and SBI Swing). The loan facility, which is comprised of a term loan up to $17.0 million and a revolver up to $17.0 million, has a final maturity date of seven years from signing date and bears interest at LIBOR plus a margin of 2.35% per annum. This facility is secured by, among other things, a first preferred mortgage on the two vessels and guaranteed by each of the vessel owning subsidiaries. On October 5, 2018, the Company drew down the entire $34.0 million available on this facility.

$330.0 Million Credit Facility

During October of 2018, the Company repaid approximately $23.1 million of this loan as two of the Kamsarmax vessels previously financed by this loan are now financed under the $34.0 Million Credit Facility.

An additional $61.7 million is expected to be repaid under this credit facility upon the closing of the $90.0 Million Credit Facility.

The drawdowns and repayments on our credit facilities between the third quarter of 2018 and October 19, 2018 related to the debt refinancing transactions described above are as follows:

                         
Credit Facility   Drawdown (Repayment) Amount
($ thousands)
                   
$19.0 Million Lease Financing – SBI Tango   $ 19,000                     
$42.0 Million Credit Facility   (8,248)                    
$19.0 Million Lease Financing – SBI Echo   19,000                     
$30.0 Million Credit Facility   29,975                     
$60.0 Million Credit Facility   60,000                     
$67.5 Million Credit Facility   (37,454)                    
$184.0 Million Credit Facility   184,000                     
$409.0 Million Credit Facility   (169,248)                    
$34.0 Million Credit Facility   34,000                     
$330.0 Million Credit Facility   (23,100)                    
                         

$90.0 Million Credit Facility

On October 3, 2018, the Company received a commitment from Nordea Bank Abp, acting through its New York branch, and DVB Bank SE for a loan facility of up to $90.0 million. The loan facility will be used to finance up to 60% of the fair market value of six Ultramax dry bulk vessels (SBI Orion, SBI Hyperion, SBI Tethys, SBI Hercules, SBI Samson and SBI Phoenix).

The loan facility has a final maturity date of five years from signing date and bears interest at LIBOR plus a margin of 2.35% per annum. This loan facility, which is expected to close during the fourth quarter of 2018, would increase the Company’s liquidity by approximately $28.0 million after repayment of the vessels’ existing debt. The terms and conditions are similar to those set forth in the Company’s existing credit facilities and the loan facility is subject to customary conditions precedent and the execution of definitive documentation.

The Company expects to accelerate the amortization of between $1.5 million and $2.0 million of existing deferred financing costs upon the repayment the existing debt.

$20.5 Million Lease Financing – SBI Hermes

On September 27, 2018, the Company entered into a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Hermes, a 2016 Japanese built Ultramax vessel, for consideration of $20.5 million. As part of the transaction, the Company will make payments of $5,850 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus a margin of 1.39% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction, which is expected to close in the fourth quarter of 2018, will be treated as a financial lease for accounting purposes and increases the Company’s liquidity by approximately $11.3 million after repayment of the vessel’s existing loan.

Debt Overview

The Company’s outstanding debt balances, gross of unamortized deferred financing costs as of September 30, 2018 and October 19, 2018, are as follows (dollars in thousands):

         
    As of September 30, 2018   As of October 19, 2018
Credit Facility   Amount Outstanding   Amount Outstanding   Amount Committed *
Senior Notes   $ 73,625     $ 73,625     $  
$409 Million Credit Facility            
$330 Million Credit Facility (1)(2)   229,488     206,388      
$42 Million Credit Facility   14,105     14,105      
$67.5 Million Credit Facility            
$12.5 Million Credit Facility   9,596     9,596      
$27.3 Million Credit Facility (3)   17,825     17,825      
$85.5 Million Credit Facility   80,604     80,604      
$38.7 Million Credit Facility   36,000     36,000      
$19.6 Million Lease Financing – SBI Rumba   18,396     18,396      
$12.8 Million Credit Facility   12,750     12,750      
$19.0 Million Lease Financing – SBI Tango   18,727     18,636      
$19.0 Million Lease Financing – SBI Echo   18,742     18,656      
$30.0 Million Credit Facility   29,975     29,975      
$60.0 Million Credit Facility   60,000     60,000      
$184.0 Million Credit Facility   184,000     184,000      
$34.0 Million Credit Facility       34,000      
$90.0 Million Credit Facility           90,000  
$20.5 Million Lease Financing – SBI Hermes           20,500  
Total   $ 803,833     $ 814,556     $ 110,500  
                         

 

(1)     $23.1 million repaid upon the drawdown of the $34.0 Million Credit Facility in the fourth quarter of 2018.
(2)     $61.7 million expected to be repaid upon the drawdown of the $90.0 Million Credit Facility in the fourth quarter of 2018.
(3)     $8.8 million expected to be repaid upon the drawdown of the $20.5 Million Lease Financing – SBI Hermes in the fourth quarter of 2018.
*     Reflects the maximum loan amount available on undrawn facility.
       

The Company’s projected quarterly debt repayments on our bank loans and senior notes and bareboat charter payments on our finance leases through 2019 are as follows (dollars in thousands):

             
    Principal on Bank Loans and Senior Notes   Finance Lease   Total
Q4 2018 (1)     83,210       1,506       84,716  
Q1 2019     14,847       2,012       16,859  
Q2 2019     15,617       2,012       17,629  
Q3 2019 (2)     88,817       2,012       90,829  
Q4 2019     15,813       2,012       17,825  
Total   $218,304     $9,554     $227,858  
                   

 

(1)     Relates to payments expected to be made from October 20, 2018 to December 31, 2018 including $61.7 million and $8.8 million to be repaid upon the respective drawdowns of the $90.0 Million Credit Facility and the $20.5 Million Lease Financing – SBI Hermes.
(2)     Includes $73.6 million repayment of Senior Notes due at maturity.
       

Financial Results for the Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017

For the third quarter of 2018, the Company’s GAAP net loss was $0.4 million, or $0.01 loss per diluted share compared to a GAAP net loss of $10.7 million, or $0.15 loss per diluted share in the same period in 2017. GAAP results for the third quarter of 2018 include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt. EBITDA for the third quarters of 2018 and 2017 were $28.8 million and $12.4 million, respectively (see Non-GAAP Financial Measures).

Total vessel revenues for the third quarter of 2018 were $62.5 million, an increase of $23.9 million from $38.6 million in the third quarter of 2017. Our TCE revenue (see Non-GAAP Financial Measures) for the third quarter of 2018 was $62.4 million, an increase of $23.8 million from the prior year period. Total vessel revenues benefited from strong grain activity from the East Coast South America market due to tariffs and potential trade wars, as well as increased demand for coal in China and India.

Total operating expenses for the third quarter of 2018 were $49.5 million compared to $41.2 million in the third quarter of 2017. The increase from the prior year period relates primarily to increases in vessel operating expenses and depreciation due principally to the growth of our fleet.

 
Ultramax Operations
           
  Three Months Ended
September 30,
       
Dollars in thousands 2018   2017   Change   % Change
TCE Revenue:              
Vessel revenue $ 39,722     $ 23,069     $ 16,653     72  
Voyage expenses 80     16     64     400  
TCE Revenue $ 39,642     $ 23,053     $ 16,589     72  
Operating expenses:              
Vessel operating costs 18,178     12,773     5,405     42  
Charterhire expense 936     29     907     NA  
Vessel depreciation 9,399     7,518     1,881     25  
General and administrative expense 1,109     837     272     32  
Total operating expenses $ 29,622     $ 21,157     $ 8,465     40  
Operating income $ 10,020     $ 1,896     $ 8,124     428  
                             

Vessel revenue for our Ultramax Operations increased to $39.7 million for the third quarter of 2018 from $23.1 million in the prior year period due to strong South Atlantic grain activity, as U.S. tariffs caused Chinese buyers to continue buying large quantities of soybeans from the East Coast South America market extending the usual second quarter grain activity. In addition, strong coal demand from China benefited rates.

TCE revenue (see Non-GAAP Financial Measures) for our Ultramax Operations was $39.6 million for the third quarter of 2018 and was associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $23.1 million for the prior year period, associated with a day-weighted average of 28 vessels owned. TCE revenue per day was $11,342 and $8,949 for the third quarters of 2018 and 2017, respectively.

           
Dollars in thousands Three Months Ended
September 30,
       
Ultramax Operations: 2018   2017   Change   % Change
TCE Revenue $ 39,642     $ 23,053     $ 16,589     72  
TCE Revenue / Day $ 11,342     $ 8,949     $ 2,393     27  
Revenue Days 3,495     2,576     919     36  
                       

Our Ultramax Operations vessel operating costs were $18.2 million for the third quarter of 2018, relating to the 37 vessels owned on average during the period, and included approximately $1.1 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $12.8 million and related to the 28 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the third quarters of 2018 and 2017 were $5,037 and $4,927, respectively. The increase versus the prior year period is due primarily to purchases of spares and stores, as well as repairs and maintenance. Sequentially, daily operating costs increased from $5,003 in the second quarter of 2018. The increase versus the trailing quarter is due primarily to the timing of repairs and maintenance, including certain annual class and certification costs.

Charterhire expense for our Ultramax Operations was approximately $0.9 million for the third quarter of 2018 and relates to the vessel time chartered-in at $10,125 per day since the end of the third quarter of 2017.

Ultramax Operations depreciation increased to $9.4 million in the third quarter of 2018 from $7.5 million in the prior year period, reflecting the increase in our weighted average vessels owned to 37 from 28.

General and administrative expense for our Ultramax Operations was $1.1 million for the third quarter of 2018 and $0.8 million in the prior year period. General and administrative expenses consist primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions. The increase versus the prior year period reflects the growth of our fleet.

           
Kamsarmax Operations          
           
  Three Months Ended
September 30,
       
Dollars in thousands 2018   2017   Change   % Change
TCE Revenue:              
Vessel revenue $ 22,743     $ 15,539     $ 7,204     46  
Voyage expenses 4     37     (33 )   (89 )
TCE Revenue $ 22,739     $ 15,502     $ 7,237     47  
Operating expenses:              
Vessel operating costs 8,833     8,223     610     7  
Charterhire expense 108     769     (661 )   (86 )
Vessel depreciation 4,899     4,553     346     8  
General and administrative expense 542     515     27     5  
Total operating expenses $ 14,382     $ 14,060     $ 322     2  
Operating income $ 8,357     $ 1,442     $ 6,915     480  
                             

Vessel revenue for our Kamsarmax Operations increased to $22.7 million in the third quarter of 2018 from $15.5 million in the prior year period due to a sustained grain import program from China. With trade war narratives escalating this summer, Chinese mills were making sure they purchased as much grain as they could from other origins notably the East Coast South America market. This coincided with the increase in Indian demand for coal from all origins, especially South Africa.

TCE revenue (see Non-GAAP Financial Measures) for our Kamsarmax Operations was $22.7 million for the third quarter of 2018 associated with a day-weighted average of 19 vessels owned, compared to $15.5 million for the prior year period associated with a day-weighted average of 18 vessels owned and one vessel time chartered-in. TCE revenue per day was $13,649 and $9,211 for the third quarters of 2018 and 2017, respectively.

           
Dollars in thousands Three Months Ended
September 30,
       
Kamsarmax Operations: 2018   2017   Change   % Change
TCE Revenue $ 22,739     $ 15,502     $ 7,237     47  
TCE Revenue / Day $ 13,649     $ 9,211     $ 4,438     48  
Revenue Days 1,666     1,683     (17 )   (1 )
                       

Kamsarmax Operations vessel operating costs were $8.8 million for the third quarter of 2018 relating to the 19 vessels owned on average during the period and included $0.4 million of takeover costs and contingency expenses. This compares to the prior year period of $8.2 million relating to 18 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the third quarters of 2018 and 2017 were $4,931 and $4,989, respectively. Sequentially, daily operating costs increased from $4,801 in the second quarter of 2018, due primarily to an increase in spare and store purchases.

While we do not currently time charter-in any Kamsarmax vessels, we have a profit and loss sharing agreement with a third party related to one Kamsarmax vessel. During the third quarter of 2018, our share of the loss on that vessel was $0.1 million. Our share of the loss in the prior year period was $0.3 million. During the prior year period, a Kamsarmax vessel was time chartered-in through August 2017 at a cost of $0.5 million.

Kamsarmax Operations depreciation increased slightly to $4.9 million in the third quarter 2018 from $4.6 million in the prior year period. Our weighted average vessels owned were 19 in both the third quarters of 2018 and 2017.

General and administrative expense for our Kamsarmax Operations was $0.5 million for both the third quarters of 2018 and 2017. The expense consists primarily of administrative services fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions.

Corporate

Certain general and administrative expenses we incur and all of our financial expenses are not attributable to a specific segment. Accordingly, these costs are not allocated to our segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, were $5.4 million and $5.9 million in the third quarters of 2018 and 2017, respectively. The quarter over quarter decline is due primarily to reductions in restricted share amortization and legal fees.

Financial expenses, net increased to $13.3 million in the third quarter of 2018 from $8.0 million in the prior year period due to an increase in the LIBOR rate and higher levels of debt related to the increase in overall fleet size, as well as the write off of $2.0 million of deferred financing costs related to the refinancing of our debt. Between $1.5 million and $2.0 million of deferred financing costs are expected to be written off in the fourth quarter of 2018, related to the continued refinancing of certain debt.

Financial Results for the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017

For the first nine months of 2018, the Company’s GAAP net loss was $5.3 million or $0.07 loss per diluted share compared to a GAAP net loss of $58.7 million, or $0.82 loss per diluted share in the same period last year. GAAP results for the first nine months of 2018 include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt. EBITDA for the first nine months of 2018 and 2017 were $77.2 million and $12.3 million, respectively (see Non-GAAP Financial Measures). Excluding the loss/write-off of vessels and assets held for sale of $17.7 million and the write-off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million, the Company’s adjusted net loss for the first nine months of 2017 was $40.5 million, or $0.56 adjusted loss per diluted share (see Non-GAAP Financial Measures below). There were no such non-GAAP adjustments to the Company’s first nine months of 2018 net income. Adjusted EBITDA for the first nine months of 2017 was $30.0 million (see Non-GAAP Financial Measures below).

Total vessel revenues for the first nine months of 2018 were $177.3 million, an increase of $66.2 million from $111.1 million in the first nine months of 2017. Our TCE revenue (see Non-GAAP Financial Measures) for the first nine months of 2018 was $177.0 million, an increase of $66.3 million from the prior year period. Despite the negative macroeconomic noise, such as trade wars and sanctions, Ultramax Operations and Kamsarmax Operations have remained resilient in the steadily rising markets and both were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.

Total operating expenses for the first nine months of 2018 were $147.8 million compared to $144.5 million in the first nine months of 2017. The year over year increase relates to increases in vessel operating costs and depreciation resulting from the increase in the size of our fleet, offset in part to the loss/write-off of vessels and assets held for sale of $17.7 million recorded in the first nine months of 2017.

           
Ultramax Operations
           
  Nine Months Ended
September 30,
       
Dollars in thousands 2018   2017   Change   % Change
TCE Revenue:              
Vessel revenue $ 112,778     $ 64,113     $ 48,665     76  
Voyage expenses 264     82     182     222  
TCE Revenue $ 112,514     $ 64,031     $ 48,483     76  
Operating expenses:              
Vessel operating costs 53,430     37,246     16,184     43  
Charterhire expense 2,773     39     2,734     NA  
Vessel depreciation 27,887     21,978     5,909     27  
General and administrative expense 3,255     2,502     753     30  
Total operating expenses $ 87,345     $ 61,765     $ 25,580     41  
Operating income $ 25,169     $ 2,266     $ 22,903     NA  
                             

Vessel revenue for our Ultramax Operations increased to $112.8 million for the first nine months of 2018 from $64.1 million in the prior year period. We were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.

TCE revenue (see Non-GAAP Financial Measures) for our Ultramax Operations was $112.5 million for the first nine months of 2018 associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $64.0 million for the prior year period, associated with a day-weighted average of 28 vessels owned. TCE revenue per day was $10,895 and $8,519 for the nine months ended September 30, 2018 and 2017, respectively.

           
Dollars in thousands Nine Months Ended September 30,        
Ultramax Operations: 2018   2017   Change   % Change
TCE Revenue $ 112,514     $ 64,031     $ 48,483     76  
TCE Revenue / Day $ 10,895     $ 8,519     $ 2,376     28  
Revenue Days 10,327     7,516     2,811     37  
                       

Our Ultramax Operations vessel operating costs were $53.4 million for the first nine months of 2018, relating to the 37 vessels owned on average during the period and included approximately $3.1 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $37.2 million and related to the 28 vessels owned on average during the period. Daily operating costs excluding takeover costs, contingency expenses and other non-operating expenses for the first nine months of 2018 and 2017 were $4,983 and $4,875, respectively. The increase is due to an increase of purchases of spares and stores, as well as freight and forwarding expense.

Charterhire expense for our Ultramax Operations was approximately $2.8 million for the first nine months of 2018, and relates to the vessel we have time chartered-in at $10,125 per day since the end of the third quarter of 2017.

Ultramax Operations depreciation increased to $27.9 million in the first nine months of 2018 from $22.0 million in the prior year period reflecting the increase in our weighted average vessels owned to 37 from 28.

General and administrative expense for our Ultramax Operations was $3.3 million for the first nine months of 2018 and $2.5 million in the prior year period. General and administrative expenses consist primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions. The increase versus the prior year period reflects the growth of our fleet.

           
Kamsarmax Operations
           
  Nine Months Ended September 30,        
Dollars in thousands 2018   2017   Change   % Change
TCE Revenue:              
Vessel revenue $ 64,552     $ 46,965     $ 17,587     37  
Voyage expenses 107     250     (143 )   (57 )
TCE Revenue $ 64,445     $ 46,715     $ 17,730     38  
Operating expenses:              
Vessel operating costs 25,458     26,617     (1,159 )   (4 )
Charterhire expense 318     4,406     (4,088 )   (93 )
Vessel depreciation 14,306     13,692     614     4  
General and administrative expense 1,515     1,592     (77 )   (5 )
Loss / write down on assets held for sale     17,701     (17,701 )   (100 )
Total operating expenses $ 41,597     $ 64,008     $ (22,411 )   (35 )
Operating income (loss) $ 22,848     $ (17,293 )   $ 40,141     232  
                             

Vessel revenue for our Kamsarmax Operations increased to $64.6 million in the first nine months of 2018 from $47.0 million in the prior year period. We were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.

TCE revenue (see Non-GAAP Financial Measures) for our Kamsarmax Operations was $64.4 million for the first nine months of 2018 associated with a day-weighted average of 18 vessels owned, compared to $46.7 million for prior year period, associated with a day-weighted average of 18 vessels owned and one vessel time chartered-in. TCE revenue per day was $13,123 and $9,218 for the first nine months of 2018 and 2017, respectively.

           
Dollars in thousands Nine Months Ended September 30,        
Kamsarmax Operations: 2018   2017   Change   % Change
TCE Revenue $ 64,445     $ 46,715     $ 17,730     38  
TCE Revenue / Day $ 13,123     $ 9,218     $ 3,905     42  
Revenue Days 4,911     5,068     (157 )   (3 )
                       

Kamsarmax Operations vessel operating costs were $25.5 million for the first nine months of 2018, which related to the 18 vessels owned on average during the period and included approximately $0.8 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $26.6 million, and related to the 18 vessels owned on average during the period. Daily operating costs excluding takeover costs, contingency expenses and other non-operating expenses for the first nine months of 2018 and 2017 were $4,970 and $5,057, respectively.

While we do not time charter-in any Kamsarmax vessels, we have a profit and loss sharing agreement relating to one Kamsarmax vessel with a third party and during the first nine months of 2018, our share of the loss on that vessel was $0.3 million compared to $0.8 million in the prior year period. During the prior year period, a Kamsarmax vessel was time chartered-in through August 2017 at a cost of $3.6 million.

Kamsarmax Operations depreciation increased to $14.3 million in the first nine months of 2018 from $13.7 million in the prior year period. Our weighted average vessels owned was 18 in both the first nine months of 2018 and 2017.

General and administrative expense for our Kamsarmax Operations was $1.5 million and $1.6 million for the first nine months of 2018 and 2017, respectively. The expense consists primarily of administrative services fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions.

During the first nine months of 2017, we recorded a write-down on assets held for sale of $17.7 million related to the sale of two Kamsarmax vessels to an unaffiliated third party.

Corporate

Certain general and administrative expenses we incur and all of our financial expenses are not attributable to a specific segment. Accordingly, these costs are not allocated to our segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, remained relatively flat year over year totaling $18.5 million and $18.4 million in the first nine months of 2018 and 2017, respectively.

Financial expenses, net increased to $34.8 million in the first nine months of 2018 from $24.9 million in the prior year period due to an increase in the LIBOR rate and higher levels of debt related to the increase in overall fleet size, as well as the write off of $2.0 million of deferred financing costs related to the refinancing of our debt in 2018. Between $1.5 million and $2.0 million of deferred financing costs are expected to be written off in the fourth quarter of 2018, related to the continued refinancing of certain debt.

 
Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
     
    Unaudited
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Revenue:                
Vessel revenue   $ 62,465     $ 38,608     $ 177,331     $ 111,078  
Operating expenses:                
Voyage expenses   84     53     372     332  
Vessel operating costs   27,011     20,996     78,888     63,863  
Charterhire expense   1,044     798     3,091     4,445  
Vessel depreciation   14,298     12,071     42,193     35,670  
General and administrative expenses   7,043     7,245     23,283     22,530  
Loss / write down on assets held for sale               17,701  
Total operating expenses   49,480     41,163     147,827     144,541  
Operating income (loss)   12,985     (2,555 )   29,504     (33,463 )
Other income (expense):                
Interest income   327     289     756     903  
Foreign exchange loss   (31 )   (91 )   (73 )   (277 )
Financial expense, net   (13,635 )   (8,317 )   (35,512 )   (25,821 )
Total other expense   (13,339 )   (8,119 )   (34,829 )   (25,195 )
Net loss   $ (354 )   $ (10,674 )   $ (5,325 )   $ (58,658 )
                 
Loss per share:                
Basic   $ (0.01 )   $ (0.15 )   $ (0.07 )   $ (0.82 )
Diluted   $ (0.01 )   $ (0.15 )   $ (0.07 )   $ (0.82 )
                 
Basic weighted average number of common shares outstanding   72,749     71,936     72,649     71,826  
Diluted weighted average number of common shares outstanding   72,749     71,936     72,649     71,826  
                         

 

         
Scorpio Bulkers Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
         
    Unaudited    
    September 30, 2018   December 31, 2017
Assets        
Current assets        
Cash and cash equivalents   $ 142,809     $ 68,535  
Accounts receivable   8,678     7,933  
Prepaid expenses and other current assets   8,084     6,087  
Total current assets   159,571     82,555  
Non-current assets        
Vessels, net   1,520,721     1,534,782  
Vessels under construction       6,710  
Deferred financing costs, net   3,214     3,068  
Other assets   15,821     16,295  
Total non-current assets   1,539,756     1,560,855  
Total assets   $ 1,699,327     $ 1,643,410  
         
Liabilities and shareholders’ equity        
Current liabilities        
Bank loans, net   $ 57,849     $ 46,993  
Capital lease obligations   3,336     1,144  
Senior Notes, net   73,120      
Accounts payable and accrued expenses   14,546     10,453  
Total current liabilities   148,851     58,590  
Non-current liabilities        
Bank loans, net   604,747     576,967  
Capital lease obligations   51,338     17,747  
Senior Notes, net       72,726  
Total non-current liabilities   656,085     667,440  
Total liabilities   804,936     726,030  
Shareholders’ equity        
Preferred shares, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding        
Common shares, $0.01 par value per share; authorized 212,500,000 shares; issued and outstanding 75,678,177 and 74,902,364 shares as of September 30, 2018 and December 31, 2017, respectively   797     762  
Paid-in capital   1,746,856     1,745,844  
Common shares held in treasury, at cost; 4,106,927 and 1,465,448 shares at September 30, 2018 and December 31, 2017, respectively   (29,715 )   (11,004 )
Accumulated deficit   (823,547 )   (818,222 )
Total shareholders’ equity   894,391     917,380  
Total liabilities and shareholders’ equity   $ 1,699,327     $ 1,643,410  
                 

 

     
Scorpio Bulkers Inc. and Subsidiaries
Statements of Cash Flows (unaudited)
(Amounts in thousands)
     
    Nine Months Ended September 30,
    2018   2017
Operating activities        
Net loss   $ (5,325 )   $ (58,658 )
Adjustment to reconcile net loss to net cash used by        
operating activities:        
Restricted share amortization   5,625     10,418  
Vessel depreciation   42,193     35,670  
Amortization of deferred financing costs   6,483     4,249  
Write-off of deferred financing costs       470  
Loss / write-down on assets held for sale       16,471  
Changes in operating assets and liabilities:        
Decrease in accounts receivable   (745 )   (1,760 )
Increase (decrease) in prepaid expenses and other assets   (1,519 )   (1,007 )
Increase in accounts payable and accrued expenses   4,093     250  
Net cash provided by operating activities   50,805     6,103  
Investing activities        
Proceeds from sale of assets held for sale       44,340  
Payments for vessels and vessels under construction   (21,423 )   (23,285 )
Net cash (used in) provided by investing activities   (21,423 )   21,055  
Financing activities        
Proceeds from issuance of long-term debt   324,725     51,600  
Repayments of long-term debt   (251,515 )   (118,097 )
Common shares repurchased   (18,710 )    
Dividend paid   (4,579 )    
Debt issue costs paid   (5,029 )    
Net cash provided by (used in) financing activities   44,892     (66,497 )
Increase (decrease) in cash and cash equivalents   74,274     (39,339 )
Cash at cash equivalents, beginning of period   68,535     101,734  
Cash and cash equivalents, end of period   $ 142,809     $ 62,395  
                 

 

         
Scorpio Bulkers Inc. and Subsidiaries
Other Operating Data (unaudited)
         
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Time charter equivalent revenue ($000’s) (1):                
Vessel revenue   $ 62,465     $ 38,608     $ 177,331     $ 111,078  
Voyage expenses   (84 )   (53 )   (372 )   (332 )
Time charter equivalent revenue   $ 62,381     $ 38,555     $ 176,959     $ 110,746  
Time charter equivalent revenue attributable to:                
Kamsarmax   $ 22,739     $ 15,502     $ 64,445     $ 46,715  
Ultramax   39,642     23,053     112,514     64,031  
    $ 62,381     $ 38,555     $ 176,959     $ 110,746  
Revenue days:                
Kamsarmax   1,666     1,683     4,911     5,068  
Ultramax   3,495     2,576     10,327     7,516  
Combined   5,161     4,259     15,238     12,584  
TCE per revenue day (1):                
Kamsarmax   $ 13,649     $ 9,211     $ 13,123     $ 9,218  
Ultramax   $ 11,342     $ 8,949     $ 10,895     $ 8,519  
Combined   $ 12,087     $ 9,053     $ 11,613     $ 8,801  
                                 

 

(1)

 

    We define Time Charter Equivalent (TCE) revenue as vessel 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.

We report TCE revenue, a non-GAAP financial measure, because (i) we believe it provides additional meaningful information in conjunction with vessel revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii) it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii) 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 bareboat charters) under which the vessels may be employed between the periods, and (iv) we believe that it presents useful information to investors. See Non-GAAP Financial Measures.

 

             
Fleet List as of October 19, 2018
             
Vessel Name   Year Built    DWT    Vessel Type
SBI Samba   2015   84,000     Kamsarmax
SBI Rumba   2015   84,000     Kamsarmax
SBI Capoeira   2015   82,000     Kamsarmax
SBI Electra   2015   82,000     Kamsarmax
SBI Carioca   2015   82,000     Kamsarmax
SBI Conga   2015   82,000     Kamsarmax
SBI Flamenco   2015   82,000     Kamsarmax
SBI Bolero   2015   82,000     Kamsarmax
SBI Sousta   2016   82,000     Kamsarmax
SBI Rock   2016   82,000     Kamsarmax
SBI Lambada   2016   82,000     Kamsarmax
SBI Reggae   2016   82,000     Kamsarmax
SBI Zumba   2016   82,000     Kamsarmax
SBI Macarena   2016   82,000     Kamsarmax
SBI Parapara   2017   82,000     Kamsarmax
SBI Mazurka   2017   82,000     Kamsarmax
SBI Swing   2017   82,000     Kamsarmax
SBI Jive   2017   82,000     Kamsarmax
SBI Lynx   2018   82,000     Kamsarmax
Total Kamsarmax       1,562,000      
             
SBI Antares   2015   61,000     Ultramax
SBI Athena   2015   64,000     Ultramax
SBI Bravo   2015   61,000     Ultramax
SBI Leo   2015   61,000     Ultramax
SBI Echo   2015   61,000     Ultramax
SBI Lyra   2015   61,000     Ultramax
SBI Tango   2015   61,000     Ultramax
SBI Maia   2015   61,000     Ultramax
SBI Hydra   2015   61,000     Ultramax
SBI Subaru   2015   61,000     Ultramax
SBI Pegasus   2015   64,000     Ultramax
SBI Ursa   2015   61,000     Ultramax
SBI Thalia   2015   64,000     Ultramax
SBI Cronos   2015   61,000     Ultramax
SBI Orion   2015   64,000     Ultramax
SBI Achilles   2016   61,000     Ultramax
SBI Hercules   2016   64,000     Ultramax
SBI Perseus   2016   64,000     Ultramax
SBI Hermes   2016   61,000     Ultramax
SBI Zeus   2016   60,200     Ultramax
SBI Hera   2016   60,200     Ultramax
SBI Hyperion   2016   61,000     Ultramax
SBI Tethys   2016   61,000     Ultramax
SBI Phoebe   2016   64,000     Ultramax
SBI Poseidon   2016   60,200     Ultramax
SBI Apollo   2016   60,200     Ultramax
SBI Samson   2017   64,000     Ultramax
SBI Phoenix   2017   64,000     Ultramax
SBI Gemini   2015   64,000     Ultramax
SBI Libra   2017   64,000     Ultramax
SBI Puma   2014   64,000     Ultramax
SBI Jaguar   2014   64,000     Ultramax
SBI Cougar   2015   64,000     Ultramax
SBI Aries   2015   64,000     Ultramax
SBI Taurus   2015   64,000     Ultramax
SBI Pisces   2016   64,000     Ultramax
SBI Virgo   2017   64,000     Ultramax
Total Ultramax       2,307,800      
Total Owned or Finance Leased Vessels DWT   3,869,800      
           

Time chartered-in vessels

The Company currently time charters-in one Ultramax vessel. The terms of the contract are summarized as follows:

                     
Vessel Type   Year Built   DWT   Country of Build   Daily Base Rate   Earliest Expiry
Ultramax   2017   62,100     Japan   $ 10,125     30-Sep-19   (1)
Total TC DWT       62,100                  
 

 

(1)     This vessel is time chartered-in for 22 to 24 months at the Company’s option at $10,125 per day. The Company has the option to extend this time charter for one year at $10,885 per day. The vessel was delivered to the Company in September 2017.   
       

Conference Call on Results:

A conference call to discuss the Company’s results will be held today, October 22, 2018, at 9:00 AM Eastern Daylight Time / 3:00 PM Central European Summer Time. Those wishing to listen to the call should dial 1 (866) 219-5268 (U.S.) or 1 (703) 736-7424 (International) at least 10 minutes prior to the start of the call to ensure connection. The conference participant passcode is 4664187.

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: https://edge.media-server.com/m6/p/9a9q3tnx

About Scorpio Bulkers Inc.

Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc. has an operating fleet of 57 vessels consisting of 56 wholly-owned or finance leased dry bulk vessels (including 19 Kamsarmax vessels and 37 Ultramax vessels), and one time chartered-in Ultramax vessel. The Company’s owned and finance leased fleet has a total carrying capacity of approximately 3.9 million dwt and all of the Company’s owned vessels have carrying capacities of greater than 60,000 dwt. Additional information about the Company is available on the Company’s website www.scorpiobulkers.com, which is not a part of this press release.

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with accounting principles generally accepted in the U.S., (“GAAP”), management uses certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business than GAAP measures alone. In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of management’s control.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted net loss and related per share amounts, as well as adjusted EBITDA and TCE Revenue are non-GAAP performance measures that we believe provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP. Please see below for reconciliations of EBITDA, adjusted net loss and related per share amounts, and adjusted EBITDA. Please see “Other Operating Data” for a reconciliation of TCE revenue.

       
EBITDA (unaudited)
 
       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
In thousands 2018   2017   2018   2017
Net loss $ (354 )   (10,674 )   $ (5,325 )   $ (58,658 )
Add Back:              
Net interest expense 9,791     6,546     28,273     20,199  
Depreciation and amortization (1) 19,378     16,499     54,301     50,807  
EBITDA $ 28,815     12,371     $ 77,249     $ 12,348  
                             
(1)  Includes depreciation, amortization of deferred financing costs and restricted share amortization.

 

     
Adjusted net loss (unaudited)    
     
    Nine Months Ended
September 30,
In thousands, except per share data   2017
    Amount   Per share
Net loss   $ (58,658 )   $ (0.82 )
Adjustments:        
Loss / write down on assets held for sale   17,701     0.25  
Write down of deferred financing cost   470     0.01  
Total adjustments   $ 18,171     $ 0.26  
Adjusted net loss   $ (40,487 )   $ (0.56 )
                 

 

     
Adjusted EBITDA (unaudited)    
    Nine Months Ended
September 30, 
In thousands   2017
Net loss   $ (58,658 )
Impact of adjustments   18,171  
Adjusted net loss   (40,487 )
Add Back:    
Net interest expense   20,199  
Depreciation and amortization (1)   50,337  
Adjusted EBITDA   $ 30,049  
         
(1)  Includes depreciation, amortization of deferred financing costs and restricted share amortization.
 

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.

Contact:

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

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Source: Scorpio Bulkers