Hamilton, Bermuda, June 6, 2019.
Nordic American Offshore Ltd., (the "Company")
announces its financial results for the three months ended March
31, 2019, the change of the Company's name to Hermitage Offshore
Services Ltd. and the appointment of a new Chief Financial
Officer.
Results for the Three Months Ended March 31,
2019 and 2018
For the three months ended March 31, 2019, the
Company's net loss was $7.2 million or $0.98 basic and diluted loss
per share (based on 7,374,034 weighted average shares outstanding
during the first quarter of 2019). There were no adjusting
items to the net loss for the three months ended March 31,
2019.
For the three months ended March 31, 2018, the
Company's net loss was $9.5 million or $1.53 basic and diluted loss
per share (based on 6,198,685 weighted average shares outstanding
during the first quarter of 2018). There were no adjusting
items to the net loss for the three months ended March 31,
2018.
Share and per share results included herein have
been retroactively adjusted to reflect the one-for-ten reverse
stock split of the Company's common shares, which took effect on
January 28, 2019. There are 18,740,671 common shares
outstanding as of the date of this press release.
Company Name Change to Hermitage Offshore
Services Ltd.
At the Company's annual meeting of shareholders
held on June 4, 2019, the Company's shareholders approved changing
the name of the Company to "Hermitage Offshore Services Ltd." which
became effective on June 4, 2019. The Company's common stock
is expected to begin trading on the New York Stock Exchange under
its new name and the ticker symbol "PSV" at the start of trading on
June 7, 2019. The Company's common stock will be assigned a new
CUSIP number of G4511M 108 in connection with the name change.
Appointment of New Chief Financial
Officer
The Company has appointed Mr. Christopher Avella
as Chief Financial Officer of the Company effective June 4, 2019
succeeding Mr. Bjørn Giæver. Mr. Avella joins the Company
from Scorpio Tankers Inc. (NYSE: STNG), a related party affiliate,
where he has served since 2010 and has held the position of
Controller since 2014. Prior to joining Scorpio Tankers Inc.,
he was with Ernst & Young in its audit practice from 2002
through 2006 and its transaction advisory services practice from
2006 through 2010 where he was a senior manager. Mr. Avella
is a certified public accountant and has a B.S. in accounting from
Rutgers University, an M.B.A. from Seton Hall University and an
M.S. in finance from Georgetown University.
Emanuele A. Lauro, Chairman and Chief Executive
Officer, commented "Nordic American Offshore began a new chapter in
the second quarter of 2019 with the agreement to extend waivers
under its existing credit facility and the commitment for a new
credit facility with the Company's current lenders (subject to
certain conditions precedent) under more favorable terms.
This agreement was followed by the April 2019 recapitalization of
the Company through a new equity line of credit and the acquisition
of two anchor handling tug supply vessels and 11 crew boats in
exchange for common shares. Collectively, these transactions
have stabilized our balance sheet by significantly reducing our
financial leverage and providing liquidity.
I am pleased to report that these transactions,
together with the change in the name of the Company to Hermitage
Offshore Services Ltd. and the appointment of a new CFO, have
brought us into the next phase of our development. As a
result, we believe that we are well-positioned in an offshore
market that is showing signs of a broader structural recovery.
The first quarter of 2019 reflects the results
of the Company's fleet of 10 PSVs under significantly weaker market
conditions. While the next several quarters will reflect some
legacy contracts from this weaker period, we are encouraged by
developments during the second quarter of 2019. Not only has
the market shown significant signs of improvement, but we have
re-activated three PSVs during the current quarter that were
previously in lay-up. Spot rates in the North Sea have
improved to over $20,000 per day, and utilization has increased.
Consequently, we expect our second quarter of 2019 fixtures
and overall financial results to show a clear improvement as
compared to the first quarter of 2019.
On behalf of the Company, I want to especially
thank Bjørn Giæver, outgoing CFO, for his contribution to the
Company during the last 18 months, and I want to welcome Chris
Avella as the CFO of Hermitage Offshore Services Ltd."
Summary of First Quarter of 2019 and Other
Recent Events
- The Company's platform supply vessels, or PSVs, earned dayrates
of $8,863 per on-hire day with an average utilization rate of 73.1%
of the available days, resulting in an effective dayrate of $6,481
per available day during the first quarter of 2019. Three of
the 10 PSVs were in warm lay-up during the quarter for a total of
259 days. These days are not considered as part of the
available days.
- The Company reactivated three PSVs from warm lay-up in the
second quarter of 2019. These vessels were laid up for an
aggregate of 45 days during the second quarter of 2019. All
10 of the Company's PSVs are now active.
- Following the Company's April 2019 acquisition of two anchor
handling tug supply vessels, or AHTS vessels, and 11 crew boats (as
described below) from Scorpio Offshore Holding Inc., or SOHI (a
related party affiliate), the Company's average effective dayrates
that have been fixed thus far in the second quarter of 2019 are as
follows:
- 10 PSVs (primarily operating in the North Sea) - an effective
dayrate of $11,500 for 90% of the available days. There were
three PSVs in warm lay-up during the quarter for a total of 45
days. These days are not considered as part of the available
days.
- Two AHTS vessels (primarily operating in West Africa) - an
effective dayrate of $6,000 for 85% of the available days since the
acquisition date of these vessels of April 10, 2019. No AHTS
vessels were laid up during the quarter.
- 11 crew boats (primarily operating in West Africa) - an
effective dayrate of $1,100 for 83% of the available days since the
acquisition date of these vessels of April 8, 2019. No crew
boats were laid up during the quarter.
- In April 2019, the Company entered into an agreement with the
lenders under its term loan facility, DNB Bank ASA and
Skandinaviska Enskilda Banken AB (publ), (the "Initial Credit
Facility"), pursuant to which the lenders further extended the
waiver of the Company's compliance with certain financial covenants
under such facility until January 31, 2020.
- In April 2019, the Company received a commitment from the
lenders under the Initial Credit Facility, subject to certain
conditions precedent, for a new $132.9 million term loan facility
to refinance the Initial Credit Facility. The main terms of
this commitment are described below.
- In April 2019, the Company acquired 13 vessels consisting of
two AHTS vessels and 11 crew boats from SOHI in exchange for
8,126,219 common shares of the Company at approximately $2.78 per
share for an aggregate consideration of $22.6 million. As
part of this acquisition, the Company assumed the aggregate
outstanding indebtedness of $9.0 million under a term loan facility
with DVB Bank SE, Nordic Branch, or the DVB Credit Facility,
relating to the two AHTS vessels. A summary of the DVB Credit
Facility is included below.
- In March 2019, the Company entered into an Equity Line of
Credit with Scorpio Offshore Investments Inc., or SOI, a related
party affiliate, and Mackenzie Financial Corporation. The
Equity Line of Credit provides for $20.0 million to be available to
the Company on demand in exchange for common shares of the Company
priced at 0.94 multiplied by the then-prevailing 30-day trailing
volume weighted average price. In April 2019, the Company
issued 3,240,418 common shares under the Equity Line of Credit
equally to SOI and Mackenzie Financial Corporation for
approximately $2.78 per share or net proceeds of $9.0 million.
There is $11.0 million available under this Equity Line of
Credit as of the date of this press release.
- In January 2019, the Company effected a one-for-ten reverse
stock split pursuant to which every ten of the Company's issued
common shares were combined into one issued common share. The
Company's Bye-laws permit the board of directors to effect a
reverse stock split without shareholder consent. Additional
information is included below.
Liquidity
As of June 5, 2019, the Company had $8.2 million
in cash and cash equivalents.
Drydock Update
The Company's two AHTS vessels are scheduled for
their class required special survey in June and July of 2019.
Each of these vessels are expected to be offhire for approximately
20 days, and the drydock costs are estimated to be approximately
$1.4 million per vessel.
Debt
The following table sets forth the principal
balance of the Company's debt outstanding, all of which is
classified as current, excluding unamortized deferred financing
fees:
|
As of |
In thousands of U.S.
dollars |
March 31, 2019 |
May 30, 2019 |
Initial Credit Facility |
132,900 |
132,900 |
DVB Credit Facility |
- |
9,000 |
|
132,900 |
141,900 |
Waiver Extension of Initial Credit
Facility
In April 2019, the lenders to the Company's
Initial Credit Facility agreed extend the waivers of certain
financial covenants which the Company was not in compliance until
January 31, 2020. Moreover, the Company has received a
written commitment from the lenders under its Initial Credit
Facility, upon the satisfaction of certain conditions precedent by
the Company, including the requirement to raise a minimum of an
additional $15.0 million of equity before January 31, 2020, to a
new $132.9 million term loan facility with a maturity of December
6, 2023 to refinance the Initial Credit Facility, which has an
outstanding balance of $132.9 million as of the date of this press
release.
The new $132.9 million term loan is expected to
(i) be collateralized by the ten PSVs that currently collateralize
the Initial Credit Facility in addition to the 11 crew boats
acquired from SOHI, (ii) bear interest at LIBOR plus a margin 3.50%
(which is subject to reduction if the Company meets certain Net
Debt to EBITDA thresholds) and (iii) be repayable in equal,
semi-annual installments of $7.5 million beginning in December 2021
with a balloon payment due upon the maturity date of December 6,
2023. This new credit facility is also expected to contain
the following financial covenants:
- Cash and cash equivalents shall at all times be equal to or
greater than (i) $12,500,000 and (ii) $750,000 per vessel above
2,500 DWT.
- Current assets shall at all times exceed current liabilities
less the current portion of long term liabilities.
- The ratio of net debt to total capitalization shall be no
greater than 0.60 to 1.00.
Acquisition
of assets from Scorpio Offshore Holding Inc. and assumption of $9
million of debt
In April 2019, the Company acquired 13 vessels
consisting of two AHTS vessels and 11 crew boats from SOHI in
exchange for an aggregate of 8,126,219 common shares of the Company
at approximately $2.78 per share for an aggregate consideration of
$22.6 million. This transaction was part of the
aforementioned series of transactions that the Company entered into
in order to stabilize the Company's financial position and create a
more efficient investment vehicle. Specifically, this
transaction enabled the Company to simultaneously expand its fleet
and reduce its financial leverage through the issuance of common
shares. The Company has preliminarily concluded that the
transaction will be accounted for as an asset acquisition as
substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable group of similar identifiable
assets. Furthermore, the Company is in the process of
assessing whether this transaction will be accounted for as a
common control and/or a reverse acquisition of assets.
As part of this acquisition, the Company assumed
the aggregate outstanding indebtedness of $9.0 million under the
DVB Credit Facility relating to the two AHTS vessels. The DVB
Credit Facility was supplemented on April 10, 2019, (the "DVB
Supplemental Agreement"), as part of this
transaction.
Under the terms of the DVB Supplemental
Agreement, DVB has the right, but not the obligation, to unwind the
acquisition of the two AHTS vessels if the minimum of $15.0 million
of additional equity (as described above) is not raised by October
31, 2019. Under this scenario, the shares in the vessel
owning subsidiaries for these two vessels (which would include the
related net working capital and outstanding indebtedness under the
DVB Credit Facility) would be exchanged for the shares of the
Company that were previously issued as consideration for the two
AHTS vessel transaction on the date of the unwinding.
The DVB Credit Facility bears interest at LIBOR
plus a margin of 2.75% and contains a financial covenant whereby
the Company must maintain minimum liquidity of an aggregate of
$0.75 million in the bank accounts that are pledged as security
under the facility. The terms of this credit facility also
require that the Company fund any Excess Earnings (defined as each
vessels' earnings less budgeted operating expenses, interest
payments and the maintenance of the minimum liquidity requirement)
related to such vessels, up to $3.6 million in aggregate, to a
drydock reserve account, the proceeds of which are to be utilized
for the vessels' next scheduled drydock.
For the first 36 months after the initial
drawdown date (through September 2020), any Excess Earnings related
to each vessel, after funding the minimum liquidity requirement and
drydock reserve account, shall be utilized to repay the credit
facility. Starting 39 months after the initial drawdown date,
the DVB Credit Facility shall be repaid in consecutive quarterly
installments of $0.2 million in aggregate with a balloon payment
due upon the maturity date of September 2022.
January 2019 Reverse Stock Split
On January 28, 2019, the Company effected a
one-for-ten reverse stock split pursuant to which every ten of the
Company's issued common shares were combined into one issued common
share. The purpose of this transaction was to (i) increase
the market price for the Company's common shares and thereby cure
the deficiency of the NYSE's listing rules and (ii) improve the
marketability and liquidity of the Company's common shares in an
effort to encourage interest and trading in the Company's common
shares. The Company's Bye-laws permit the Board of Directors
to effect a reverse stock split without shareholders' consent.
There are 18,740,671 common shares outstanding
as of the date of this press release.
Nordic American Offshore Ltd. and
Subsidiaries
Condensed Consolidated Statements of Income or
Loss(unaudited)
|
|
For the three months ended March 31, |
|
|
2019 |
|
2018 |
Amounts in USD
'000 |
|
|
|
|
|
|
Charter revenue |
|
4,561 |
|
3,407 |
|
|
|
|
|
Vessel Operating Expenses |
|
(5,904) |
|
(5,720) |
Voyage Expenses |
|
(392) |
|
(592) |
General and Administrative
Expenses |
|
(1,144) |
|
(1,169) |
Depreciation |
|
(2,026) |
|
(4,261) |
Operating Costs |
|
(9,466) |
|
(11,742) |
Net
Operating Loss |
|
(4,905) |
|
(8,335) |
|
|
|
|
|
Interest Income |
|
19 |
|
88 |
Interest Expense |
|
(2,357) |
|
(1,367) |
Other Financial Income
(Expense) |
|
30 |
|
122 |
Total Other Costs |
|
(2,308) |
|
(1,157) |
Net
Loss |
|
(7,213) |
|
(9,492) |
Basic
Loss per Share |
|
(0.98) |
|
(1.53) |
Weighted Average Number of Common Shares Outstanding - Basic and
Diluted |
|
7,374,034 |
|
6,198,685 |
Total
Common Shares Outstanding |
|
7,374,034 |
|
6,198,685 |
Nordic American Offshore Ltd. and
Subsidiaries
Condensed Consolidated Balance
Sheets(unaudited)
|
|
|
|
As of: |
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
Amounts in USD
'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
|
2,399 |
|
8,446 |
|
Accounts Receivable, net |
|
|
|
2,931 |
|
2,602 |
|
Prepaid Expenses |
|
|
|
982 |
|
755 |
|
Inventory |
|
|
|
981 |
|
1,181 |
|
Other Current Assets |
|
|
|
1,098 |
|
1,176 |
|
Total Current Assets |
|
|
|
8,391 |
|
14,160 |
|
Vessels, Net |
|
|
|
175,660 |
|
176,914 |
|
Total Non-current Assets |
|
|
|
175,660 |
|
176,914 |
|
Total Assets |
|
|
|
184,051 |
|
191,074 |
|
|
|
|
|
|
|
|
|
Accounts Payable |
|
|
|
1,309 |
|
842 |
|
Accounts Payable, related
party |
|
|
|
309 |
|
492 |
|
Other Current Liabilities |
|
|
|
2,965 |
|
3,147 |
|
Current Debt |
|
|
|
132,546 |
(1), (2) |
0 |
|
Total Current Liabilities |
|
|
|
137,129 |
|
4,481 |
|
Non-current Debt |
|
|
|
0 |
|
132,457 |
(1) |
Other Long-term
Liabilities |
|
|
|
71 |
|
71 |
|
Total Non-current Liabilities |
|
|
|
71 |
|
132,528 |
|
Shareholders' Equity |
|
|
|
46,851 |
|
54,065 |
|
Total Liabilities and Shareholders' Equity |
|
184,051 |
|
191,074 |
|
(1) The
outstanding principal balance under the Company's Initial Credit
Facility was $132.9 million at each of March 31, 2019 and December
31, 2018. The amount presented is net of unamortized deferred
financing costs of $0.4 million at each of March 31, 2019 and
December 31, 2018. |
|
|
|
|
|
|
|
|
(2) The
outstanding balance under the Company's Initial Credit Facility has
been classified as current as of March 31, 2019. As described
above, the Company was in breach of certain of its financial
covenants under its Initial Credit Facility and has obtained
waivers of such covenants, the last one extending until January 31,
2020. Given that this waiver period does not extend 12 months
beyond the balance sheet date of March 31, 2019, the debt has been
classified as current. |
Nordic American Offshore Ltd. and
Subsidiaries
Condensed Consolidated Statements of Cash
Flows(unaudited)
|
|
For the three months ended March 31 |
Amounts
in USD '000 |
|
2019 |
|
2018 |
Operating
Activities |
|
|
|
|
Net Loss |
|
$ |
(7,214) |
|
$ |
(9,492) |
Depreciation |
|
2,026 |
|
4,261 |
Amortization of Deferred
Finance Cost |
|
90 |
|
90 |
Overhaul of Engine Costs and
Drydock |
|
(654) |
|
(488) |
Foreign Currency Gain |
|
(25) |
|
(85) |
|
|
|
|
|
Changes in Operating Assets
and Liabilities: |
|
|
|
|
Accounts Receivables |
|
(329) |
|
(573) |
Prepaid and Other Current
Assets |
|
(150) |
|
(521) |
Inventory |
|
200 |
|
(78) |
Accounts Payable and Accrued
Liabilities |
|
285 |
|
(146) |
Accounts Payable, Related
party |
|
(183) |
|
(21) |
Net Cash Outflow from Operating Activities |
|
(5,954) |
|
(7,053) |
|
|
|
|
|
Investing
Activities |
|
|
|
|
Investment in Vessels |
|
(118) |
|
- |
Net Cash Outflow from Investing Activities |
|
(118) |
|
- |
|
|
|
|
|
Financing
Activities |
|
|
|
|
Cash Dividends Paid to
Shareholders |
|
- |
|
(1,240) |
Net Cash Outflow from Financing Activities |
|
- |
|
(1,240) |
Net
Decrease in Cash and Cash Equivalents |
|
(6,072) |
|
(8,293) |
Cash and Cash Equivalents at
January 1, |
|
8,446 |
|
31,506 |
Effect of Exchange Rate
Changes on Cash |
|
25 |
|
85 |
Cash and Cash Equivalents at March 31, |
|
$ |
2,399 |
|
$ |
23,298 |
Nordic American Offshore Ltd. and
Subsidiaries
Other operating data for the three months
ended March 31, 2019 and 2018(unaudited)
|
For the three months ended March 31, |
|
2019 |
2018 |
|
|
|
Adjusted EBITDA
(1) |
$ |
(2,879) |
$ |
(4,074) |
|
|
|
Platform supply vessels |
|
|
Average dayrates per on-hire
day (2) |
$ |
8,863 |
$ |
9,014 |
Utilization rate % (3) |
73.1% |
54.5% |
Effective dayrates (4) |
6,481 |
4,916 |
|
|
|
Vessel operating expenses per
day (5) |
6,560 |
6,356 |
|
|
|
Average number of active
vessels |
7.12 |
7.00 |
Average number of vessels in
layup |
2.88 |
3.00 |
Average number of vessels |
10.00 |
10.00 |
(1) |
See Non-GAAP Measures section below. |
(2) |
Average dayrates are calculated by subtracting voyage expenses,
including bunkers and port charges, from charter revenue and
dividing the net amount (net charter revenue) by the number of
revenue days in the period. Revenue days are the number of
days the vessel is owned or chartered-in less the number of days
the vessel is unutilized (which includes days in layup) or offhire
for drydock and repairs. |
(3) |
Utilization rates are determined by the number of revenue days
divided by the total number of available days (including offhire
days and unutilized days) in the period. |
(4) |
Effective dayrates represent the average day rate multiplied by the
utilization rate for the respective period. |
(5) |
Vessel operating costs per day represent vessel operating costs
divided by the number of operating days during the period.
Operating days are the total number of days (including offhire days
and days in layup) in a period. Vessel operating expenses are
lower while a vessel is in lay-up. There were an aggregate of
259 days and 270 days which vessels were in lay-up during the first
quarter of 2019 and 2018, respectively. |
About the Company
Hermitage Offshore Services Ltd. (formerly
Nordic American Offshore Ltd.) is an offshore support vessel
company that owns 23 vessels consisting of 10 platform supply
vessels, or PSVs, two anchor handling tug supply vessels, or AHTS
vessels, and 11 crew boats. The Company's vessels primarily
operate in the North Sea or the West Coast of Africa.
Additional information about the Company is available at the
Company's website www.hermitage-offshore.com, which is not a part
of this press release.
Non-GAAP Measures
This press release describes net charter revenue
and adjusted EBITDA which are not measures prepared in accordance
with U.S. GAAP ("Non-GAAP" measures). The Non-GAAP measures are
presented in this press release as we believe that they provide
investors and other users of the Company's financial statements,
such as its lenders, with a means of evaluating and understanding
how the Company's management evaluates the Company's operating
performance. These Non-GAAP measures should not be considered in
isolation from, as substitutes for, or superior to financial
measures prepared in accordance with U.S. GAAP.
The Company believes that the presentation of
net charter revenue and adjusted EBITDA are useful to investors or
other users of its financial statements, such as its lenders,
because they facilitate the comparability and the evaluation of
companies in the Company's industry. In addition, the Company
believes that net charter revenue and adjusted EBITDA are useful in
evaluating its operating performance compared to that of other
companies in the Company's industry. The Company's definitions of
net charter revenue and adjusted EBITDA may not be the same as
reported by other companies in the offshore supply vessel industry
or other industries.
Reconciliation of Net Loss to Adjusted EBITDA
|
|
For the three months ended March 31, |
|
|
2019 |
|
2018 |
Amounts in USD
'000 |
|
Net Loss |
|
(7,213) |
|
(9,492) |
Interest Income |
|
(19) |
|
(88) |
Interest Expense |
|
2,357 |
|
1,367 |
Other Financial Income
(Expense) |
|
(30) |
|
(122) |
Depreciation |
|
2,026 |
|
4,261 |
Adjusted EBITDA |
|
(2,879) |
|
(4,074) |
CAUTIONARY STATEMENT REGARDING
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," "expect," "anticipate," "estimate," "intend,"
"plan," "target," "project," "likely," "may," "will," "would,"
"could" 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, management's examination of historical operating
trends, data contained in the Company's records and other data
available from third parties. Although management believes that
these assumptions were reasonable when made, because these
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond the Company's control, there can be no assurance that the
Company will achieve or accomplish these expectations, beliefs or
projections. The Company undertakes no obligation, and specifically
declines any obligation, except as required by law, to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Important factors that, in the Company's view,
could cause actual results to differ materially from those
discussed in the forward-looking statements include the strength of
world economies and currencies, general market conditions,
including fluctuations in charter rates and vessel values, changes
in demand in the offshore support vessel (OSV) market, changes in
charter hire rates and vessel values, demand in offshore supply
vessels, the Company's operating expenses, including bunker prices,
dry docking and insurance costs, governmental rules and
regulations or actions taken by regulatory authorities as well as
potential liability from pending or future litigation, general
domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events,
the availability of financing and refinancing, vessel breakdowns
and instances of off-hire and other important factors described
from time to time in the reports filed by the Company with the
Securities and Exchange Commission.
Contacts:
Hermitage Offshore Services Ltd.+ 377 9798 5717 (Monaco)+ 1 646
432 3315 (New York)Web-site: www.hermitage-offshore.com
- 1st Quarter 2019 Result.pdf
Nordic American Offshore Ltd. (NYSE:NAO)
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から 8 2024 まで 9 2024
Nordic American Offshore Ltd. (NYSE:NAO)
過去 株価チャート
から 9 2023 まで 9 2024