UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

For the month of January 2019

Commission File Number: 001-36231
 

SCORPIO BULKERS INC.
(Translation of registrant's name into English)
 

9, Boulevard Charles III, Monaco 98000
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x   Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o.

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o.

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

























Attached as Exhibit 99.1 is a copy of the press release of Scorpio Bulkers Inc., dated January 28, 2019, announcing the financial results for the fourth quarter of 2018.

The information contained in this Report on Form 6-K, with the exception of the information contained on page 18 of Exhibit 99.1 under the heading "Conference Call on Results", is hereby incorporated by reference into the Company's registration statement on Form F-3 (File No. 333-217445), the Company's registration statement on Form F-3 (File No. 333-221441), the Company's registration statement on Form F-3 (File No. 333-222013) and the Company's registration statement on Form F-3 (File No. 333-222448).












SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
                    
 
 
SCORPIO BULKERS INC.
 
 
(registrant)
 
 
 
 
 
 
Dated:
January 28, 2019
By: /s/ Hugh Baker
 
 
Hugh Baker
 
 
Chief Financial Officer
 
 
 



Exhibit
EXHIBIT 99.1


https://cdn.kscope.io/6ad6be1c3be198e29de848a3b602e5a5-sbiletterheadimageforprsa49.jpg
Scorpio Bulkers Inc. Announces Financial Results for the Fourth Quarter of 2018, Declares a Quarterly Dividend and Increases Share Repurchase Authorization
MONACO - January 28, 2019 (GLOBE NEWSWIRE) - Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the “Company”), today reported its results for the three months and year ended December 31, 2018.
The Company also announced that on January 25, 2019, 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 Twelve Months Ended December 31, 2018 and 2017
For the fourth quarter of 2018, the Company’s GAAP net loss was $7.4 million, or $0.11 loss per diluted share. These results include a non-cash loss of $7.7 million and cash dividend income of $0.5 million, or $0.10 loss per diluted share from the Company’s equity investment in Scorpio Tankers Inc. and a write-off of deferred financing costs of $1.7 million, or $0.03 loss 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 $1.1 million, or $0.01 loss per diluted share. Total vessel revenues for the fourth quarter of 2018 were $65.2 million, compared to $51.1 million for the same period in 2017. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the fourth quarters of 2018 and 2017 were $23.3 million and $22.9 million, respectively (see Non-GAAP Financial Measures below).
For the year ended December 31, 2018, the Company’s GAAP net loss was $12.7 million or $0.18 loss per diluted share, including a non-cash loss of $7.7 million and cash dividend income of $0.5 million, or $0.10 loss per diluted share from the Company’s equity investment in Scorpio Tankers Inc. and a write-off of deferred financing costs of $3.8 million, or $0.05 loss per diluted share, related to the refinancing of existing debt. For the year ended December 31, 2017, the Company’s GAAP net loss was $59.7 million, or $0.83 loss per diluted share. Total vessel revenues for 2018 were $242.5 million, compared to $162.2 million for 2017. EBITDA for the years ended December 31, 2018 and 2017 were $100.6 million and $35.3 million, respectively (see Non-GAAP Financial Measures below).
While the results for the year ended December 31, 2018 did not include any non-GAAP adjustments to net income, the Company’s 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 2017 was $41.6 million, or $0.57 adjusted loss per diluted share. Adjusted EBITDA for 2017 was $53.5 million (see Non-GAAP Financial Measures below).
TCE Revenue
TCE Revenue Earned during the Fourth Quarter of 2018

Our Kamsarmax fleet earned $13,148 per day
Our Ultramax fleet earned $12,213 per day
Voyages Fixed thus far for the First Quarter of 2019
Kamsarmax fleet: approximately $12,913 per day for 60% of the days
Ultramax fleet: approximately $11,072 per day for 56% of the days
Cash and Cash Equivalents

1



As of January 25, 2019, the Company had approximately $74.3 million in cash and cash equivalents.
Recent Significant Events
Share Repurchase Program
During the fourth quarter of 2018, the Company repurchased a total of approximately 4.5 million shares of the Company’s common shares under the then existing share repurchase programs at an aggregate cost of approximately $27.0 million, or an average cost of $6.05 per share, which was funded from available cash resources. There have been no share repurchases since December 31, 2018. As of January 25, 2019, $24.8 million remained available under the then existing share repurchase program.
On January 25, 2019, the Company’s Board of Directors authorized a new share repurchase program to purchase up to an aggregate of $50.0 million of the Company’s common shares. This new share repurchase program replaced the Company’s previous share repurchase program that was authorized in October 2018 and that was terminated in conjunction with the authorization of 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 fourth 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 January 25, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on or about March 15, 2019, to all shareholders of record as of February 15, 2019. As of January 25, 2019, 71,217,258 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 (as of October 12, 2018) 10.9%, of Scorpio Tankers’ issued and outstanding common shares. The investment was part of a larger $337.0 million equity raise through a public offering of common shares by Scorpio Tankers.
The Company measures its investment in Scorpio Tankers based on the quoted market price of Scorpio Tankers’ common stock, discounted for a temporary lack of marketability as at December 31, 2018 pursuant to the terms of the lock-up agreement entered into by the Company at the time of the investment. The lock-up agreement expired on January 7, 2019. At December 31, 2018, the Company recorded a $7.7 million non-cash loss and $0.5 million cash dividend related income from the investment in Scorpio Tankers, which were recorded in Investment income (loss) and Dividend income, respectively, on the Consolidated Statement of Operations.
On January 18, 2019, Scorpio Tankers effected a one-for-ten reverse stock split and as such the Company now owns approximately 5.4 million common shares of Scorpio Tankers.
On January 25, 2019, the fair value of the Scorpio Tankers’ common stock owned by the Company was approximately $110.4 million.
IMO 2020
In November 2018, the Company entered into an agreement with third parties to purchase exhaust gas cleanings systems (“scrubbers”) for 18 of its vessels in 2019 and for 10 of its vessels in 2020.  The total value of these agreements is estimated to be $41.9 million.  The systems that are being fitted are of ‘hybrid ready’ design, which allows them to be upgraded to a ‘closed loop’ configuration at a future date. As part of the agreement, the Company also has an option to purchase exhaust gas cleaning systems for up to 18 additional vessels in 2020.
The Company is in discussions with its existing lenders, as well as leasing companies, to provide secured financing for substantially all of the estimated total cost of the scrubber installation program as well as to provide additional operating liquidity.  These discussions are ongoing, however the Company expects to be able to make announcements within the first quarter of 2019.     

2



The Company’s projected scrubber installation schedule and estimated payments for such installation on all the vessels in the Company’s fleet is as follows (dollars in thousands):
 
 
Number of Vessels by Type
 
Estimated Payments
 
 
 
Ultramax
 
Kamsarmax
 
 
Q1 2019
 

 

 
$
7,046

 
Q2 2019
 

 
3

 
11,271

 
Q3 2019
 
9

 
1

 
23,147

 
Q4 2019
 
1

 
4

 
17,399

 
Q1 2020
 
11

 
1

 
24,322

 
Q2 2020
 
9

 
6

 
24,529

 
Q3 2020
 
4

 
4

 
12,223

 
Q4 2020
 
3

 

 
4,980

 
Q1 2021
 

 

 
859

 
Total
 
37

 
19

 
$
125,776

 

Charter Employment Fixed

The following table summarizes certain information for the Company’s vessels that have been fixed via a time charter.

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 Libra
 
Ultramax
 
April 2019
 
15,250

SBI Hera
 
Ultramax
 
April 2019
 
14,850

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
$34.0 Million Credit Facility

On October 3, 2018, we entered into a senior secured credit facility for up to $34.0 million with a leading European financial institution, or the “$34.0 Million Credit Facility,” 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 of 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 is 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.


3



$330.0 Million Credit Facility

During October of 2018, the Company repaid approximately $23.1 million of our $330.0 Million Credit Facility as two of the Kamsarmax vessels previously financed by this loan are now financed under the $34.0 Million Credit Facility.

During November of 2018, the Company repaid an additional approximately $61.7 million under this credit facility upon the closing of the $90.0 Million Credit Facility discussed below.

$20.5 Million Lease Financing - SBI Hermes

On November 16, 2018, we closed a financing transaction with an unaffiliated third party for 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 has agreed with the buyer to bareboat charter the vessel for a period of five years at $5,850 per day. The transaction also provides the Company with an option to repurchase the SBI Hermes beginning on the third anniversary of the sale until the end of the bareboat charter agreement. 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 1.43% per annum.

$27.3 Million Credit Facility

During November of 2018, the Company repaid approximately $8.8 million on its $27.3 Million Credit Facility as the SBI Hermes, an Ultramax vessel that was previously financed under this credit facility, is now financed under our $20.5 Million Lease Financing - SBI Hermes.

$90.0 Million Credit Facility

On November 8, 2018, the Company entered into a senior secured credit facility for up to $90.0 million with Nordea Bank Abp, acting through its New York branch, and DVB Bank SE. The loan facility, which has a final maturity date of five years from the signing date and bears interest at LIBOR plus a margin of 2.35% per annum, is being 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). This facility is secured by, among other things, a first preferred mortgage on the six vessels and is guaranteed by each of the vessel owning subsidiaries. On November 13, 2018, the Company drew down the entire $90.0 million available on this facility.

Summary of Recent Drawdowns and Repayments on Credit Facilities

The drawdowns and repayments on the Company’s credit facilities during the fourth quarter of 2018 related to the debt refinancing transactions described above are as follows:

Credit Facility
 
Drawdown (Repayment) Amount
($ thousands)
 
$34.0 Million Credit Facility
 
$
34,000

 
$90.0 Million Credit Facility
 
90,000

 
$330.0 Million Credit Facility
 
(84,803
)
 
$20.5 Million Lease Financing - SBI Hermes
 
20,500

 
$27.3 Million Credit Facility
 
(8,817
)
 

Debt Overview

4



The Company’s outstanding debt balances, gross of unamortized deferred financing costs as of December 31, 2018 and January 25, 2019, are as follows (dollars in thousands):
 
 
As of December 31, 2018
 
As of January 25, 2019
 
Credit Facility
 
Amount Outstanding
 
Senior Notes
 
$
73,625

 
$
73,625

 
$330 Million Credit Facility
 
140,677

 
140,677

 
$42 Million Credit Facility
 
14,105

 
14,105

 
$12.5 Million Credit Facility
 
9,400

 
9,400

 
$27.3 Million Credit Facility
 
9,008

 
9,008

 
$85.5 Million Credit Facility
 
78,972

 
78,972

 
$38.7 Million Credit Facility
 
35,100

 
35,100

 
$19.6 Million Lease Financing - SBI Rumba
 
18,101

 
18,003

 
$12.8 Million Credit Facility
 
12,325

 
12,325

 
$19.0 Million Lease Financing - SBI Tango
 
18,450

 
18,359

 
$19.0 Million Lease Financing - SBI Echo
 
18,481

 
18,394

 
$30.0 Million Credit Facility
 
29,420

 
29,420

 
$60.0 Million Credit Facility
 
58,797

 
58,797

 
$184.0 Million Credit Facility
 
180,229

 
180,229

 
$34.0 Million Credit Facility
 
34,000

 
34,000

 
$90.0 Million Credit Facility
 
90,000

 
90,000

 
$20.5 Million Lease Financing - SBI Hermes
 
20,299

 
20,199

 
Total
 
$
840,989

 
$
840,613

 
    
The Company’s projected quarterly debt repayments on its bank loans and senior notes and bareboat charter payments on its finance leases through 2019 are as follows (dollars in thousands):
        
 
 
Principal on Bank Loans and Senior Notes
 
Finance Lease
 
Total
Q1 2019 (1)
 
14,847

 
1,341

 
16,188

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
 
$135,094
 
$7,377
 
$142,471
(1)
Relates to payments expected to be made from January 26, 2019 to March 31, 2019.
(2)
Includes $73.6 million repayment of Senior Notes due at maturity.
Financial Results for the Three Months Ended December 31, 2018 Compared to the Three Months Ended December 31, 2017
For the fourth quarter of 2018, the Company’s GAAP net loss was $7.4 million, or $0.11 loss per diluted share compared to a GAAP net loss of $1.1 million, or $0.01 loss per diluted share in the same period in 2017. Results for the fourth quarter of 2018 include a non-cash loss of $7.7 million and cash dividend income of $0.5 million, or $0.10 loss per diluted share from the Company’s equity investment in Scorpio Tankers Inc. and a write-off of deferred financing costs of $1.7 million, or $0.03 loss per diluted share, related to the refinancing of existing debt. EBITDA for the fourth quarters of 2018 and 2017 were $23.3 million and $22.9 million, respectively (see Non-GAAP Financial Measures).
Total vessel revenues for the fourth quarter of 2018 were $65.2 million compared to $51.1 million in the fourth quarter of 2017. The Company’s TCE revenue (see Non-GAAP Financial Measures) for the fourth quarter of 2018 was $65.0 million, an increase

5



of $14.0 million from the prior year period. During the fourth quarter of 2018, rates earned by the Company’s Ultramax Operations were driven by the South American and Black Sea grain markets as well as demand for petcoke and coal exports from the United States Gulf. Rates earned by the Company’s Kamsarmax vessels were lower than anticipated due to the restriction of coal imports by the Chinese government, mild winter temperatures and the lack of grain cargoes from the United States to the Far East.
Total operating expenses for the fourth quarter of 2018 were $51.4 million compared to $43.2 million in the fourth 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 the Company’s fleet, as well as general administrative expenses due to an increase in consulting and employee compensation.
Ultramax Operations
 
Three Months Ended
December 31,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
42,419

 
$
30,266

 
$
12,153

 
40
Voyage expenses
65

 
47

 
18

 
38
TCE Revenue
$
42,354

 
$
30,219

 
$
12,135

 
40
Operating expenses:
 
 
 
 

 

Vessel operating costs
17,791

 
14,082

 
3,709

 
26
Charterhire expense
981

 
936

 
45

 
5
Vessel depreciation
9,401

 
7,819

 
1,582

 
20
General and administrative expense
1,089

 
881

 
208

 
24
Total operating expenses
$
29,262

 
$
23,718

 
$
5,544

 
23
Operating income
$
13,092

 
$
6,501

 
$
6,591

 
101
Vessel revenue for the Company’s Ultramax Operations increased to $42.4 million for the fourth quarter of 2018 from $30.3 million in the prior year period. During the fourth quarter of 2018, both the South American and Black Sea grain markets supported Ultramax rates in the Atlantic as Chinese buyers replaced their usual grain imports from the United States Gulf with imports from those markets. The United States Gulf market was able to replace some of that lost demand with petcoke and coal, as prices for those commodities fell. However, high levels of Chinese coal stockpiles, coupled with government year-end restrictions on imports from October onwards negatively affected Pacific round voyage levels.
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Ultramax Operations was $42.4 million for the fourth quarter of 2018 and was associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $30.2 million for the prior year period, associated with a day-weighted average of 29 vessels owned. TCE revenue per day was $12,213 and $10,886 for the fourth quarters of 2018 and 2017, respectively.
Dollars in thousands
Three Months Ended
December 31,
 
 
 
 
Ultramax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
42,354

 
$
30,219

 
$
12,135

 
40
TCE Revenue / Day
$
12,213

 
$
10,886

 
$
1,327

 
12
Revenue Days
3,468

 
2,776

 
692

 
25

6



The Company’s Ultramax Operations vessel operating costs were $17.8 million for the fourth 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 $14.1 million and related to the 29 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the fourth quarters of 2018 and 2017 were $4,901 and $4,749, respectively. Daily operating costs for the fourth quarter of 2018 decreased from $5,037 in the third quarter of 2018. The fluctuations from period to period are due primarily to the timing of spare and store purchases, as well as repairs and maintenance, including certain annual class and certification costs.
Charterhire expense for the Company’s Ultramax Operations was approximately $1.0 million for both the third quarters of 2018 and 2017 and relates to the vessel time chartered-in at $10,125 per day.
Ultramax Operations depreciation increased to $9.4 million in the fourth quarter of 2018 from $7.8 million in the prior year period, reflecting the increase in the Company’s weighted average vessels owned to 37 from 29.
General and administrative expense for the Company’s Ultramax Operations was $1.1 million for the fourth quarter of 2018 and $0.9 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 the Company’s fleet.
Kamsarmax Operations
 
Three Months Ended
December 31,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
22,752

 
$
20,861

 
$
1,891

 
9

Voyage expenses
112

 
50

 
62

 
124

TCE Revenue
$
22,640

 
$
20,811

 
$
1,829

 
9

Operating expenses:
 
 
 
 

 

Vessel operating costs
8,796

 
8,719

 
77

 
1

Charterhire expense
104

 
11

 
93

 
845

Vessel depreciation
5,013

 
5,021

 
(8
)
 

General and administrative expense
554

 
324

 
230

 
71

Total operating expenses
$
14,467

 
$
14,075

 
$
392

 
3

Operating income
$
8,173

 
$
6,736

 
$
1,437

 
21

Vessel revenue for the Company’s Kamsarmax Operations increased to $22.8 million in the fourth quarter of 2018 from $20.9 million in the prior year period. Kamsarmax rates were lower in the fourth quarter of 2018 when compared to the first nine months of 2018 due to the restriction of coal imports by the Chinese government, mild winter temperatures and the lack of grain cargoes from the United States to the Far East.
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Kamsarmax Operations was $22.6 million for the fourth quarter of 2018 associated with a day-weighted average of 19 vessels owned, compared to $20.8 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 $13,148 and $12,605 for the fourth quarters of 2018 and 2017, respectively.
Dollars in thousands
Three Months Ended
December 31,
 
 
 
 
Kamsarmax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
22,640

 
$
20,811

 
$
1,829

 
9
TCE Revenue / Day
$
13,148

 
$
12,605

 
$
543

 
4
Revenue Days
1,722

 
1,651

 
71

 
4

7



Kamsarmax Operations vessel operating costs were $8.8 million for the fourth quarter of 2018 relating to the 19 vessels owned on average during the period and included $0.3 million of takeover costs and contingency expenses. This compares to the prior year period of $8.7 million relating to 18 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the fourth quarters of 2018 and 2017 were $4,857 and $4,943, respectively. Vessel operating expenses decreased from $4,931 in the third quarter of 2018, due primarily to a decrease in spare and store purchases.
While the Company did not time charter-in any Kamsarmax vessels in either the fourth quarter of 2018 or 2017, it has a profit and loss sharing agreement with a third party related to one Kamsarmax vessel, for which it recorded its share of the losses.
Kamsarmax Operations depreciation was $5.0 million in both the fourth quarters of 2018 and 2017 as the Company’s weighted average vessels owned were 19 and 18 in the same periods.
General and administrative expense for the Company’s Kamsarmax Operations was $0.6 million and $0.3 million for the fourth quarters 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.
Corporate
Certain general and administrative expenses the Company incurs, all of its financial expenses and investment income or losses are not attributable to a specific segment. Accordingly, these costs are not allocated to the Company’s 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 $7.4 million and $5.3 million in the fourth quarters of 2018 and 2017, respectively. The quarter over quarter increase is due primarily to increases in compensation and consulting fees.
The Company recorded a non-cash loss of $7.7 million for the fourth quarter of 2018 and a cash dividend of $0.5 million on its equity investment in Scorpio Tankers.
Financial expenses, net increased to $14.4 million in the fourth quarter of 2018 from $9.1 million in the prior year period due to an increase in the LIBOR rate and higher levels of debt due to refinancing, as well as the write-off of $1.7 million of deferred financing costs related to such refinancing.
Financial Results for the Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017
For the year ended December 31, 2018, the Company’s GAAP net loss was $12.7 million or $0.18 loss per diluted share compared to a GAAP net loss of $59.7 million, or $0.83 loss per diluted share in the same period in 2017. Results for the year ended December 31, 2018 include a non-cash loss of $7.7 million and a cash dividend of $0.5 million, or $0.10 loss per diluted share from the Company’s equity investment in Scorpio Tankers and a write-off of deferred financing costs of $3.8 million, or $0.05 loss per diluted share, related to the refinancing of existing debt. EBITDA for the years ended December 31, 2018 and 2017 were $100.6 million and $35.3 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 year ended December 31, 2017 was $41.6 million, or $0.57 adjusted loss per diluted share and adjusted EBITDA was $53.5 million (see Non-GAAP Financial Measures below). There were no such non-GAAP adjustments to the Company’s net income for the year ended December 31, 2018.
Total vessel revenues for the year ended December 31, 2018 were $242.5 million, an increase of 50% from $162.2 million for the same period in 2017. The Company’s TCE revenue (see Non-GAAP Financial Measures) for the year ended December 31, 2018 was $242.0 million compared to $161.8 million for the same period in 2017. The rates earned in 2018 by both the Company’s Ultramax and Kamsarmax Operations were driven by a decrease in the supply of tonnage and the United States and China trade war which resulted in longer voyages as Chinese imports from the United States were replaced with imports from South America.
Total operating expenses for the year ended December 31, 2018 were $199.2 million compared to $187.8 million for the same period in 2017. The year over year increase relates to increases in vessel operating costs and depreciation resulting from the increase in the size of the Company’s fleet, offset in part to the loss/write-off of vessels and assets held for sale of $17.7 million recorded in 2017.

8



Ultramax Operations
 
Year Ended December 31,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
155,197

 
$
94,380

 
$
60,817

 
64
Voyage expenses
330

 
129

 
201

 
156
TCE Revenue
$
154,867

 
$
94,251

 
$
60,616

 
64
Operating expenses:
 
 
 
 

 

Vessel operating costs
71,220

 
51,445

 
19,775

 
38
Charterhire expense
3,754

 
975

 
2,779

 
285
Vessel depreciation
37,287

 
29,797

 
7,490

 
25
General and administrative expense
4,344

 
3,389

 
955

 
28
Total operating expenses
$
116,605

 
$
85,606

 
$
30,999

 
36
Operating income
$
38,262

 
$
8,645

 
$
29,617

 
343
Vessel revenue for the Company’s Ultramax Operations increased to $155.2 million for the year ended December 31, 2018 from $94.4 million in the prior year. Despite tariffs and sanctions disrupting 2018, rates earned by the Company’s Ultramax Operations increased by 24% compared to 2017 due to lower levels of tonnage supply, grain exports from the South American and Black Sea markets and petcoke and coal cargoes out of the United States Gulf.
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Ultramax Operations was $154.9 million for the year ended December 31, 2018 associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $94.3 million for the prior year period, associated with a day-weighted average of 29 vessels owned. TCE revenue per day was $11,226 and $9,159 for the year ended December 31, 2018 and 2017, respectively.
Dollars in thousands
Year Ended December 31,
 
 
 
 
Ultramax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
154,867

 
$
94,251

 
$
60,616

 
64
TCE Revenue / Day
$
11,226

 
$
9,159

 
$
2,067

 
23
Revenue Days
13,795

 
10,291

 
3,504

 
34
The Company’s Ultramax Operations vessel operating costs were $71.2 million for the year ended December 31, 2018, relating to the 37 vessels owned on average during the period and included approximately $4.2 million of takeover costs and contingency expenses. Vessel operating costs for the prior year were $51.4 million and related to the 29 vessels owned on average during the period. Daily operating costs excluding takeover costs, contingency expenses and other non-operating expenses for the years ended December 31, 2018 and 2017 were $4,962 and $4,842, respectively. The increase is due to an increase of purchases of spares and stores, as well as freight and forwarding expense.
Charterhire expense for the Company’s Ultramax Operations was approximately $3.8 million for the year ended December 31, 2018, and relates to the vessel the Company has time chartered-in at $10,125 per day since the end of the third quarter of 2017.
Ultramax Operations depreciation increased to $37.3 million for the year ended December 31, 2018 from $29.8 million in the prior year reflecting the increase in the Company’s weighted average vessels owned to 37 from 29.
General and administrative expense for the Company’s Ultramax Operations was $4.3 million for 2018 and $3.4 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 reflects the growth of the Company’s fleet.

9



Kamsarmax Operations
 
Year Ended December 31,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
87,305

 
$
67,825

 
$
19,480

 
29

Voyage expenses
219

 
300

 
(81
)
 
(27
)
TCE Revenue
$
87,086

 
$
67,525

 
$
19,561

 
29

Operating expenses:
 
 
 
 

 

Vessel operating costs
34,254

 
35,336

 
(1,082
)
 
(3
)
Charterhire expense
422

 
4,417

 
(3,995
)
 
(90
)
Vessel depreciation
19,320

 
18,713

 
607

 
3

General and administrative expense
2,069

 
1,916

 
153

 
8

Loss / write down on assets held for sale

 
17,701

 
(17,701
)
 
(100
)
Total operating expenses
$
56,065

 
$
78,083

 
$
(22,018
)
 
(28
)
Operating income (loss)
$
31,021

 
$
(10,558
)
 
$
41,579

 
394

Vessel revenue for the Company’s Kamsarmax Operations increased to $87.3 million for the year ended December 31, 2018 from $67.8 million in the prior year. Rates earned by the Company’s Kamsarmax Operations during the year ended December 31, 2018 increased 31% compared to 2017, as supply was down due to a lack of new deliveries, as well as increased ton per mile utilization due to an increase in voyages from the east coast of South America to China resulting from the United States and China trade wars.
TCE revenue (see Non-GAAP Financial Measures) for the Company’s Kamsarmax Operations was $87.1 million for the year ended December 31, 2018 associated with a day-weighted average of 19 vessels owned, compared to $67.5 million for prior year, associated with a day-weighted average of 18 vessels owned and one vessel time chartered-in. TCE revenue per day was $13,127 and $10,051 for the years ended December 31, 2018 and 2017, respectively.
Dollars in thousands
Year Ended December 31,
 
 
 
 
Kamsarmax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
87,086

 
$
67,525

 
$
19,561

 
29

TCE Revenue / Day
$
13,127

 
$
10,051

 
$
3,076

 
31

Revenue Days
6,634

 
6,718

 
(84
)
 
(1
)
Kamsarmax Operations vessel operating costs were $34.3 million for the year ended December 31, 2018, which related to the 19 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 were $35.3 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 years ended December 31, 2018 and 2017 were $4,940 and $5,028, respectively.
While the Company does not time charter-in any Kamsarmax vessels, it has a profit and loss sharing agreement relating to one Kamsarmax vessel with a third party and during the year ended December 31, 2018, the Company’s share of the loss on that vessel was $0.4 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 $19.3 million for the year ended December 31, 2018 from $18.7 million in the prior year period. The Company’s weighted average vessels owned was 19 and 18 for the years ended December 31, 2018 and 2017, respectively.

10



General and administrative expense for the Company’s Kamsarmax Operations was $2.1 million and $1.9 million for the years ended December 31, 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 year ended December 31, 2017, the Company 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 the Company incurs as well as all of its financial expenses and investment income or losses are not attributable to a specific segment. Accordingly, these costs are not allocated to the Company’s 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, increased slightly year over year totaling $25.9 million and $23.8 million for the years ended December 31, 2018 and 2017, respectively.
The Company recorded a non cash loss of $7.7 million for the fourth quarter of 2018 and a cash dividend of $0.5 million on its equity investment in Scorpio Tankers.
Financial expenses, net increased to $49.9 million in the year ended December 31, 2018 from $33.9 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 and debt refinancing, as well as the write-off of $3.8 million of deferred financing costs related to such refinancing.

11

Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)


 
 
Unaudited
 
 
Three Months Ended
December 31,
 
Year Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
 
Vessel revenue
 
$
65,171

 
$
51,127

 
$
242,502

 
$
162,205

Operating expenses:
 


 


 


 


Voyage expenses
 
177

 
97

 
549

 
429

Vessel operating costs
 
26,587

 
22,801

 
105,475

 
86,664

Charterhire expense
 
1,085

 
947

 
4,176

 
5,392

Vessel depreciation
 
14,414

 
12,840

 
56,607

 
48,510

General and administrative expenses
 
9,102

 
6,551

 
32,385

 
29,081

Loss / write down on assets held for sale
 

 

 

 
17,701

Total operating expenses
 
51,365

 
43,236

 
199,192

 
187,777

Operating income (loss)
 
13,806

 
7,891

 
43,310

 
(25,572
)
Other income (expense):
 
 

 
 
 
 

 
 

Interest income
 
351

 
197

 
1,107

 
1,100

Dividend income
 
541

 

 
541

 

Investment income (loss)
 
(7,719
)
 

 
(7,719
)
 

Foreign exchange loss
 
5

 
(15
)
 
(68
)
 
(292
)
Financial expense, net
 
(14,357
)
 
(9,141
)
 
(49,869
)
 
(34,962
)
Total other expense
 
(21,179
)
 
(8,959
)
 
(56,008
)
 
(34,154
)
Net loss
 
$
(7,373
)
 
$
(1,068
)
 
$
(12,698
)
 
$
(59,726
)
 
 
 
 
 
 
 
 
 
Loss per share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.11
)
 
$
(0.01
)
 
$
(0.18
)
 
$
(0.83
)
Diluted
 
$
(0.11
)
 
$
(0.01
)
 
$
(0.18
)
 
$
(0.83
)
 
 
 
 
 
 
 
 
 
Basic weighted average number of common shares outstanding
 
69,387

 
71,702

 
71,827

 
71,794

Diluted weighted average number of common shares outstanding
 
69,387

 
71,702

 
71,827

 
71,794



12

Scorpio Bulkers Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)

 
 
Unaudited
 
 
 
 
December 31, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
67,495

 
$
68,535

Accounts receivable
 
10,290

 
7,933

Prepaid expenses and other current assets
 
6,314

 
6,087

Total current assets
 
84,099

 
82,555

Non-current assets
 
 

 
 

Vessels, net
 
1,507,918

 
1,534,782

Vessels under construction
 

 
6,710

Equity method investment
 
92,281

 

Deferred financing costs, net
 
3,706

 
3,068

Other assets
 
15,822

 
16,295

Total non-current assets
 
1,619,727

 
1,560,855

Total assets
 
$
1,703,826

 
$
1,643,410

 
 
 
 
 
Liabilities and shareholders’ equity
 
 

 
 

Current liabilities
 
 

 
 

Bank loans, net
 
$
60,310

 
$
46,993

Capital lease obligations
 
4,594

 
1,144

Senior Notes, net
 
73,253

 

Accounts payable and accrued expenses
 
14,457

 
10,453

Total current liabilities
 
152,614

 
58,590

Non-current liabilities
 
 

 
 

Bank loans, net
 
621,179

 
576,967

Capital lease obligations
 
69,229

 
17,747

Senior Notes, net
 

 
72,726

Total non-current liabilities
 
690,408

 
667,440

Total liabilities
 
843,022

 
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 71,217,258 and 74,902,364 shares as of December 31, 2018 and December 31, 2017, respectively
 
796

 
762

Paid-in capital
 
1,747,648

 
1,745,844

Common shares held in treasury, at cost; 8,567,846 and 1,465,448 shares at December 31, 2018 and December 31, 2017, respectively
 
(56,720
)
 
(11,004
)
Accumulated deficit
 
(830,920
)
 
(818,222
)
Total shareholders’ equity
 
860,804

 
917,380

Total liabilities and shareholders’ equity
 
$
1,703,826

 
$
1,643,410



13

Scorpio Bulkers Inc. and Subsidiaries
Statements of Cash Flows (unaudited)
(Amounts in thousands)

 
 
Year Ended December 31,
 
 
2018
 
2017
Operating activities
 
 
 
 
Net loss
 
$
(12,698
)
 
$
(59,726
)
Adjustment to reconcile net loss to net cash used by
 
 
 
 

operating activities:
 
 
 
 

Restricted share amortization
 
7,881

 
12,645

Vessel depreciation
 
56,607

 
48,510

Amortization of deferred financing costs
 
9,582

 
6,085

Write-off of deferred financing costs
 

 
470

Loss / write-down on assets held for sale
 

 
16,471

Net unrealized losses on investments
 
7,719

 

Changes in operating assets and liabilities:
 
 

 
 

Decrease in accounts receivable
 
(2,356
)
 
(882
)
Increase (decrease) in prepaid expenses and other assets
 
250

 
(4,032
)
Increase in accounts payable and accrued expenses
 
4,002

 
41

Net cash provided by operating activities
 
70,987

 
19,582

Investing activities
 
 

 
 

Equity investment
 
(100,000
)
 

Proceeds from sale of assets held for sale
 

 
44,340

Scrubber payments
 
(1,235
)
 

Payments for vessels and vessels under construction
 
(21,799
)
 
(217,033
)
Net cash used in investing activities
 
(123,034
)
 
(172,693
)
Financing activities
 
 

 
 

Proceeds from issuance of long-term debt
 
469,225

 
287,554

Repayments of long-term debt
 
(358,858
)
 
(153,003
)
Common shares repurchased
 
(45,716
)
 
(11,004
)
Dividend paid
 
(6,042
)
 
(1,509
)
Debt issue costs paid
 
(7,602
)
 
(2,126
)
Net cash provided by financing activities
 
51,007

 
119,912

Decrease in cash and cash equivalents
 
(1,040
)
 
(33,199
)
Cash at cash equivalents, beginning of period
 
68,535

 
101,734

Cash and cash equivalents, end of period
 
$
67,495

 
$
68,535



14

Scorpio Bulkers Inc. and Subsidiaries
Other Operating Data (unaudited)


 
 
Three Months Ended
December 31,
 
Year Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Time charter equivalent revenue ($000’s) (1):
 
 
 
 
 
 
 
 
Vessel revenue
 
$
65,171

 
$
51,127

 
$
242,502

 
$
162,205

Voyage expenses
 
(177
)
 
(97
)
 
(549
)
 
(429
)
Time charter equivalent revenue
 
$
64,994

 
$
51,030

 
$
241,953

 
$
161,776

Time charter equivalent revenue attributable to:
 
 

 
 

 
 

 
 

Kamsarmax
 
$
22,640

 
$
20,811

 
$
87,086

 
$
67,525

Ultramax
 
42,354

 
30,219

 
154,867

 
94,251

 
 
$
64,994

 
$
51,030

 
$
241,953

 
$
161,776

Revenue days:
 
 

 
 

 
 

 
 

Kamsarmax
 
1,722

 
1,651

 
6,634

 
6,718

Ultramax
 
3,468

 
2,776

 
13,795

 
10,291

Combined
 
5,190

 
4,427

 
20,429

 
17,009

TCE per revenue day (1):
 
 

 
 

 
 

 
 

Kamsarmax
 
$
13,148

 
$
12,605

 
$
13,127

 
$
10,051

Ultramax
 
$
12,213

 
$
10,886

 
$
11,226

 
$
9,159

Combined
 
$
12,523

 
$
11,527

 
$
11,844

 
$
9,511

(1)
The Company defines Time Charter Equivalent (TCE) revenue as vessel revenues less voyage expenses. Such TCE revenue, divided by the number of the Company’s 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.
The Company reports TCE revenue, a non-GAAP financial measure, because (i) the Company believes it provides additional meaningful information in conjunction with vessel revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii) it assists the Company’s management in making decisions regarding the deployment and use of its 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) the Company believes that it presents useful information to investors. See Non-GAAP Financial Measures.


15




Fleet List as of January 25, 2019
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

16



Vessel Name
 
Year Built
 
 DWT
 
 Vessel Type
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.



17



Conference Call on Results:
A conference call to discuss the Company’s results will be held today, January 28, 2019, at 11:00 AM Eastern Standard Time / 5:00 PM Central European 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 5951238.

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/cv278uhs

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.





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Non-GAAP Financial Measures
To supplement the Company’s 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 the Company’s financial condition and results of operations, and therefore a more complete understanding of factors affecting its 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 the Company believes 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
December 31,
 
Year Ended December 31,
In thousands
2018
 
2017
 
2018
 
2017
Net loss
$
(7,373
)
 
(1,068
)
 
$
(12,698
)
 
$
(59,726
)
Add Back:
 
 
 
 
 
 
 
Net interest expense
10,907

 
7,107

 
39,180

 
27,307

Depreciation and amortization (1)
19,769

 
16,903

 
74,070

 
67,710

EBITDA
$
23,303

 
22,942

 
$
100,552

 
$
35,291

(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.
Adjusted net loss (unaudited)
 
 
Year Ended December 31,
In thousands, except per share data
 
2017
 
 
Amount
 
Per share
Net loss
 
$
(59,726
)
 
$
(0.83
)
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
 
$
(41,555
)
 
$
(0.57
)

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Adjusted EBITDA (unaudited)
 
 
Year Ended December 31,
In thousands
 
2017
Net loss
 
$
(59,726
)
Impact of adjustments
 
18,171

Adjusted net loss
 
(41,555
)
Add Back:
 
 
Net interest expense
 
27,307

Depreciation and amortization (1)
 
67,710

Adjusted EBITDA
 
$
53,462

(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.


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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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