Company Quick10K Filing
Genco Shipping & Trading
Price9.36 EPS-1
Shares42 P/E-10
MCap391 P/FCF14
Net Debt352 EBIT-14
TEV743 TEV/EBIT-53
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-05
10-K 2020-12-31 Filed 2021-02-24
10-Q 2020-09-30 Filed 2020-11-04
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-05
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-02-28
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-11
10-K 2016-12-31 Filed 2017-03-28
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-03-15
10-Q 2015-09-30 Filed 2015-11-13
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-17
10-Q 2014-06-30 Filed 2014-08-15
10-Q 2014-03-31 Filed 2014-05-19
10-K 2013-12-31 Filed 2014-04-07
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-01
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-10
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-07-26
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-10
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-01
8-K 2021-01-11
8-K 2020-12-15
8-K 2020-11-04
8-K 2020-08-05
8-K 2020-07-15
8-K 2020-05-06
8-K 2020-03-17
8-K 2020-02-25
8-K 2020-01-29
8-K 2019-11-06
8-K 2019-10-25
8-K 2019-08-07
8-K 2019-06-11
8-K 2019-05-15
8-K 2019-05-08
8-K 2019-03-05
8-K 2018-12-18
8-K 2018-12-18
8-K 2018-11-07
8-K 2018-10-10
8-K 2018-08-14
8-K 2018-08-08
8-K 2018-07-18
8-K 2018-06-15
8-K 2018-06-14
8-K 2018-05-31
8-K 2018-05-15
8-K 2018-05-08
8-K 2018-04-05
8-K 2018-03-26
8-K 2018-02-27

GNK 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 gnk-20210331xex31d1.htm
EX-31.2 gnk-20210331xex31d2.htm
EX-32.1 gnk-20210331xex32d1.htm
EX-32.2 gnk-20210331xex32d2.htm

Genco Shipping & Trading Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
3.02.41.81.20.60.02012201420172020
Assets, Equity
0.20.10.0-0.0-0.1-0.22012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to         

Commission File Number 001-33393

GENCO SHIPPING & TRADING LIMITED

(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands

98-0439758

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

299 Park Avenue, 12th Floor, New York, New York 10171

(Address of principal executive offices) (Zip Code)

(646) 443-8550

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common stock, par value $0.01 per share

GNK

New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 5, 2021: Common stock, par value $0.01 per share — 41,912,432 shares.

Table of Contents

Genco Shipping & Trading Limited

Page

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

4

a)

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

4

b)

Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2021 and 2020

5

c)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months ended March 31, 2021 and 2020

6

d)

Condensed Consolidated Statements of Equity for the Three Months ended March 31, 2021 and 2020

7

e)

Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2021 and 2020

8

f)

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

49

Item 4.

Controls and Procedures

50

PART II —OTHER INFORMATION

Item 1A.

Risk Factors

51

Item 6.

Exhibits

51

2

Table of Contents

Website Information

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

3

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Genco Shipping & Trading Limited

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

(U.S. Dollars in thousands, except for share and per share data)

(Unaudited)

March 31, 

December 31, 

    

2021

    

2020

 

    

    

 

Assets

Current assets:

Cash and cash equivalents

$

123,191

$

143,872

Restricted cash

 

40,519

 

35,492

Due from charterers, net of a reserve of $493 and $669, respectively

 

11,243

 

12,991

Prepaid expenses and other current assets

13,149

10,856

Inventories

24,148

21,583

Vessels held for sale

15,630

22,408

Total current assets

 

227,880

 

247,202

Noncurrent assets:

Vessels, net of accumulated depreciation of $215,970 and $204,201, respectively

 

924,468

 

919,114

Vessels held for exchange

38,214

Deferred drydock, net of accumulated amortization of $9,377 and $8,124 respectively

 

14,374

 

14,689

Fixed assets, net of accumulated depreciation and amortization of $2,664 and $2,266, respectively

 

6,139

 

6,393

Operating lease right-of-use assets

 

6,538

 

6,882

Restricted cash

 

315

 

315

Fair value of derivative instruments

 

629

 

Total noncurrent assets

 

952,463

 

985,607

Total assets

$

1,180,343

$

1,232,809

Liabilities and Equity

Current liabilities:

Accounts payable and accrued expenses

$

24,402

$

22,793

Current portion of long-term debt

 

65,277

 

80,642

Deferred revenue

 

7,389

 

8,421

Current operating lease liabilities

1,788

1,765

Total current liabilities:

 

98,856

 

113,621

Noncurrent liabilities:

Long-term operating lease liabilities

7,606

8,061

Contract liability

 

 

7,200

Long-term debt, net of deferred financing costs of $8,677 and $9,653, respectively

327,064

358,933

Total noncurrent liabilities

 

334,670

 

374,194

Total liabilities

 

433,526

 

487,815

Commitments and contingencies (Note 13)

Equity:

Common stock, par value $0.01; 500,000,000 shares authorized; 41,912,432 and 41,801,753 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

419

418

Additional paid-in capital

1,713,082

1,713,406

Accumulated other comprehensive income

 

161

 

Accumulated deficit

 

(966,845)

 

(968,830)

Total equity

 

746,817

 

744,994

Total liabilities and equity

$

1,180,343

$

1,232,809

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020

(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

(Unaudited)

For the Three Months Ended

March 31, 

    

2021

    

2020

   

Revenues:

Voyage revenues

$

87,591

$

98,336

Total revenues

87,591

 

98,336

Operating expenses:

Voyage expenses

35,074

 

48,368

Vessel operating expenses

19,046

 

21,813

Charter hire expenses

5,435

3,075

General and administrative expenses (inclusive of nonvested stock amortization expense of $522 and $481, respectively)

6,102

 

5,767

Technical management fees

1,464

1,854

Depreciation and amortization

13,441

 

17,574

Impairment of vessel assets

112,814

Loss on sale of vessels

720

486

Total operating expenses

81,282

 

211,751

Operating income (loss)

6,309

 

(113,415)

Other income (expense):

Other income (expense)

146

 

(584)

Interest income

71

 

594

Interest expense

(4,541)

(6,945)

Other expense, net

(4,324)

 

(6,935)

Net income (loss)

$

1,985

$

(120,350)

Net earnings (loss) per share-basic

$

0.05

$

(2.87)

Net earnings (loss) per share-diluted

$

0.05

$

(2.87)

Weighted average common shares outstanding-basic

41,973,782

 

41,866,357

Weighted average common shares outstanding-diluted

42,276,380

 

41,866,357

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021 and 2020

(U.S. Dollars in Thousands)

(Unaudited)

For the Three Months Ended

March 31, 

    

2021

    

2020

 

Net income (loss)

$

1,985

 

$

(120,350)

Other comprehensive income

161

 

Comprehensive income (loss)

$

2,146

 

$

(120,350)

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2021 and 2020

(U.S. Dollars in Thousands)

Accumulated

Additional

Other

Common

Paid-in

Comprehensive

Accumulated

Stock

Capital

Income

Deficit

Total Equity

Balance — January 1, 2021

$

418

$

1,713,406

$

$

(968,830)

$

744,994

Net income

1,985

1,985

Other comprehensive income

161

161

Issuance of shares due to vesting of RSUs and exercise of options

1

(1)

Cash dividends declared ($0.02 per share)

(845)

(845)

Nonvested stock amortization

522

522

Balance — March 31, 2021

$

419

$

1,713,082

$

161

$

(966,845)

$

746,817

Accumulated

Additional

Other

Common

Paid-in

Comprehensive

Accumulated

Stock

Capital

Income

Deficit

Total Equity

Balance — January 1, 2020

$

417

$

1,721,268

$

$

(743,257)

$

978,428

Net loss

(120,350)

(120,350)

Issuance of shares due to vesting of RSUs, net of forfeitures

1

(1)

Cash dividends declared ($0.175 per share)

(7,363)

(7,363)

Nonvested stock amortization

481

481

Balance — March 31, 2020

$

418

$

1,714,385

$

$

(863,607)

$

851,196

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020

(U.S. Dollars in Thousands)

(Unaudited)

For the Three Months Ended

March 31, 

    

2021

    

2020

 

Cash flows from operating activities:

Net income (loss)

 

$

1,985

$

(120,350)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

13,441

 

17,574

Amortization of deferred financing costs

976

 

951

Right-of-use asset amortization

344

337

Amortization of nonvested stock compensation expense

522

 

481

Impairment of vessel assets

 

112,814

Loss on sale of vessels

720

 

486

Amortization of premium on derivative

69

Interest rate cap premium payment

(240)

Insurance proceeds for protection and indemnity claims

41

101

Change in assets and liabilities:

Decrease (increase) in due from charterers

1,748

 

(1,303)

Increase in prepaid expenses and other current assets

(2,692)

 

(1,074)

Increase in inventories

(2,565)

(2,134)

Increase (decrease) in accounts payable and accrued expenses

1,548

 

(9,916)

(Decrease) increase in deferred revenue

(1,032)

 

1,191

Decrease in operating lease liabilities

(432)

(412)

Deferred drydock costs incurred

(939)

 

(2,784)

Net cash provided by (used in) operating activities

13,494

 

(4,038)

Cash flows from investing activities:

Purchase of vessels and ballast water treatment systems, including deposits

(1,190)

 

(273)

Purchase of scrubbers (capitalized in Vessels)

(41)

(7,778)

Purchase of other fixed assets

(152)

 

(1,039)

Net proceeds from sale of vessels

21,272

14,510

Insurance proceeds for hull and machinery claims

61

157

Net cash provided by investing activities

19,950

 

5,577

Cash flows from financing activities:

Repayments on the $133 Million Credit Facility

(22,740)

(1,580)

Proceeds from the $495 Million Credit Facility

11,250

Repayments on the $495 Million Credit Facility

(25,470)

(16,660)

Cash dividends paid

(888)

(7,290)

Net cash used in financing activities

(49,098)

 

(14,280)

Net decrease in cash, cash equivalents and restricted cash

(15,654)

 

(12,741)

Cash, cash equivalents and restricted cash at beginning of period

179,679

 

162,249

Cash, cash equivalents and restricted cash at end of period

 

$

164,025

$

149,508

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

(U.S. Dollars in Thousands, Except Per Share and Share Data)

Notes to Condensed Consolidated Financial Statements (unaudited)

1 - GENERAL INFORMATION

The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”) and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels and operates in one business segment.

At March 31, 2021, the Company’s fleet consists of 41 drybulk vessels, including 17 Capesize drybulk carriers, nine Ultramax drybulk carriers and 15 Supramax drybulk carriers, with an aggregate carrying capacity of approximately 4,422,300 dwt and an average age of approximately 10.3 years.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus strain, or COVID-19, to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Governments have implemented measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, working from home, supply chain logistical changes, and closure of non-essential businesses. This has led to a significant slowdown in overall economic activity levels globally and a decline in demand for certain of the raw materials that our vessels transport.

At present, it is not possible to ascertain any future impact of COVID-19 on the Company’s operational and financial performance, which may take some time to materialize and may not be fully reflected in the results for 2021.  However, an increase in the severity or duration or a resurgence of the COVID-19 pandemic, any potential variants and the timing of wide-scale vaccine distribution could have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition, the carrying value of the Company’s assets, the fair values of the Company’s vessels, and the Company’s ability to pay dividends. 

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of GS&T and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020 (the “2020 10-K”). The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2021.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates include vessel valuations, the valuation of amounts due from charterers, residual value of

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vessels, useful life of vessels and the fair value of derivative instruments, if any.  Actual results could differ from those estimates.

Cash, cash equivalents and restricted cash

The Company considers highly liquid investments, such as money market funds and certificates of deposit with an original maturity of three months or less to be cash equivalents. Current and non-current restricted cash includes cash that is restricted pursuant to our credit facilities. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:

March 31, 

December 31, 

    

2021

    

2020

 

Cash and cash equivalents

 

$

123,191

 

$

143,872

Restricted cash - current

40,519

35,492

Restricted cash - noncurrent

 

315

 

315

Cash, cash equivalents and restricted cash

 

$

164,025

 

$

179,679

Vessels held for sale

 

The Company’s Board of Directors has approved a strategy of divesting specifically identified older, less fuel-efficient vessels as part of a fleet renewal program to streamline and modernize the Company’s fleet.

On January 22, 2021 and January 25, 2021, the Company entered into agreements to sell the Genco Lorraine and the Baltic Leopard. The relevant vessels assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of March 31, 2021. The Baltic Leopard was sold on April 8, 2021 and the Genco Lorraine is expected to be sold during the second quarter of 2021. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreements.

On November 3, 2020, November 27, 2020 and November 30, 2020, the Company entered into agreements to sell the Baltic Panther, the Baltic Hare and the Baltic Cougar, respectively. The relevant vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2020. The Baltic Panther, the Baltic Hare and the Baltic Cougar were sold on January 4, 2021, January 15, 2021 and February 24, 2021, respectively.

Vessels held for exchange

The vessel assets for the remaining five vessels to be exchanged as part of an agreement entered into by the Company on December 17, 2020 have been classified as vessels held for exchange in the Condensed Consolidated Balance Sheet as of December 31, 2020 in the amount of $38,214, after recognition of impairment. This includes the vessel assets for the Baltic Cove, the Baltic Fox, the Genco Avra, the Genco Mare and the Genco Spirit. These vessels were exchanged during the first quarter of 2021. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement.

Voyage expense recognition

In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters, spot market-related time charters and pool agreements. Refer to Note 11 — Voyage Revenues for further discussion of the

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accounting for fuel expenses for spot market voyage charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, the Company records lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. These differences in bunkers, including any lower of cost and net realizable value adjustments, resulted in a net (gain) loss of ($493) and $841 during the three months ended March 31, 2021 and 2020, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.

Impairment of vessel assets

During the three months ended March 31, 2021 and 2020, the Company recorded $0 and $112,814, respectively, related to the impairment of vessel assets in accordance with Accounting Standards Codification (“ASC”) 360 — “Property, Plant and Equipment” (“ASC 360”).

At March 31, 2020, the Company determined that the expected estimated future undiscounted cash flows for four of its Supramax vessels, the Genco Picardy, the Genco Predator, the Genco Provence and the Genco Warrior, did not exceed the net book value of these vessels as of March 31, 2020. The Company adjusted the carrying value of these vessels to their respective fair market values as of March 31, 2020. This resulted in an impairment loss of $27,046 during the three months ended March 31, 2020.

On February 24, 2020, the Board of Directors determined to dispose of the Company’s following ten Handysize vessels: the Baltic Hare, the Baltic Fox, the Baltic Wind, the Baltic Cove, the Baltic Breeze, the Genco Ocean, the Genco Bay, the Genco Avra, the Genco Mare and the Genco Spirit, at times and on terms to be determined in the future.  Given this decision, and that the revised estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel given the estimated probabilities of whether the vessels will be sold, the Company adjusted the values of these older vessels to their respective fair market values during the three months ended March 31, 2020. Subsequent to February 24, 2020, the Company has entered into agreements to sell three of these vessels during the three months ended March 31, 2020, namely the Baltic Wind, the Baltic Breeze and the Genco Bay, which were adjusted to their net sales price. This resulted in an impairment loss of $85,768 during the three months ended March 31, 2020.

Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the sale of certain aforementioned vessels. 

Loss on sale of vessels

During the three months ended March 31, 2021, the Company recorded a net loss of $720 related to the sale of vessels. The net loss of $720 recorded during the three months ended March 31, 2021 related primarily to the sale of the Baltic Panther, Baltic Hare and Baltic Cougar, as well as net losses associated with the exchange of the Baltic Cove, Baltic Fox, Genco Spirit, Genco Avra and Genco Mare. During the three months ended March 31, 2020, the Company recorded a net loss of $486 related to the sale of vessels. The net loss of $486 recorded during the three months ended March 31, 2020 related primarily to the sale of the Genco Charger and Genco Thunder. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the sale of these vessels.

Recent accounting pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”)” which provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848) –

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Scope (“ASU 2021-01”),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modification made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modification made on or before December 31, 2022. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and ASU 2021-01 on its condensed consolidated financial statements and related disclosures.

3 - CASH FLOW INFORMATION

For the three months ended March 31, 2021, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $975 for the Purchase of vessels and ballast water treatment systems, including deposits, $17 for the Purchase of Scrubbers, $154 for the Purchase of other fixed assets and $61 for the Net proceeds from sale of vessels. For the three months ended March 31, 2021, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $71 for Cash dividends payable.

For the three months ended March 31, 2020, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $2,950 for the Purchase of scrubbers, $1,314 for the Purchase of vessels and ballast water treatment systems, including deposits, $548 for the Purchase of other fixed assets and $196 for the Net proceeds from sale of vessels. For the three months ended March 31, 2021, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $97 for Cash dividends payable.

During the three months ended March 31, 2021 and 2020, cash paid for interest was $3,583 and $6,051, respectively.

During the three months ended March 31, 2021 and 2020, there was no cash paid for income taxes.

During the three months ended March 31, 2021, the Company made a reclassification of $15,630 from Vessels, net of accumulated depreciation to Vessels held for sale as the Company entered into agreements to sell the Baltic Leopard and Genco Lorraine prior to March 31, 2021.  Refer to Note 4 — Vessel Acquisitions and Dispositions.

During the three months ended March 31, 2020, the Company made a reclassification of $23,129 from Vessels, net of accumulated depreciation to Vessels held for sale as the Company entered into agreements to sell the Baltic Wind, Baltic Breeze and Genco Bay prior to March 31, 2020.  Refer to Note 4 — Vessel Acquisitions and Dispositions.

On February 23, 2021, the Company issued 103,599 restricted stock units and options to purchase 118,552 shares of the Company’s stock at an exercise price of $9.91 to certain individuals. The fair value of these restricted stock units and stock options were $1,027 and $513, respectively.

On February 25, 2020, the Company issued 173,749 restricted stock units and options to purchase 344,568 shares of the Company’s stock at an exercise price of $7.06 to certain individuals. The fair value of these restricted stock units and stock options were $1,227 and $693, respectively.

Refer to Note 14 — Stock-Based Compensation for further information regarding the aforementioned grants.

Supplemental Condensed Consolidated Cash Flow information related to leases is as follows:

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For the Three Months Ended

March 31, 

2021

2020

 

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating lease

$

557

$

557

4 - VESSEL ACQUISITIONS AND DISPOSITIONS

Vessel Exchange

On December 17, 2020, the Company entered into an agreement to acquire three Ultramax vessels in exchange for six Handysize vessels for a fair value of $46,000 less a 1.0% commission payable to a third party. The Genco Magic, a 2014-built Ultramax vessel, and the Genco Vigilant and the Genco Freedom, both 2015-built Ultramax vessels, were delivered to the Company on December 23, 2020, January 28, 2021 and February 20, 2021, respectively. The Genco Ocean, the Baltic Cove and the Baltic Fox, all 2010-built Handysize vessels, were delivered to the buyers on December 29, 2020, January 30, 2021 and February 2, 2021, respectively. The Genco Spirit, the Genco Avra and the Genco Mare, all 2011-built Handysize vessels, were delivered to the buyers on February 15, 2021, February 21, 2021 and February 24, 2021, respectively. As of December 31, 2020, the vessel assets for the Baltic Cove, the Baltic Fox, the Genco Avra, the Genco Mare and the Genco Spirit have been classified as held for exchange in the Condensed Consolidated Balance Sheet.

Vessel Dispositions

On January 25, 2021, the Company entered into an agreement to sell the Baltic Leopard, a 2009-built Supramax vessel, to a third party for $8,000 less a 2.0% commission payable to a third party. The sale was completed on April 8, 2021. The vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of March 31, 2021.

On January 22, 2021, the Company entered into an agreement to sell the Genco Lorraine, a 2009-built Supramax vessel, to a third party for $7,950 less a 2.5% commission payable to a third party. The sale is expected to be completed during the second quarter of 2021. The vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of March 31, 2021.

During November 2020, the Company entered into agreements to sell the Baltic Cougar, the Baltic Hare and the Baltic Panther. These vessels have been classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2020. The sale of the Baltic Hare, Baltic Panther and Baltic Cougar were completed on January 15, 2021, January 4, 2021 and February 24, 2021, respectively.

As of March 31, 2021 and December 31, 2020, the Company has recorded $40,519 and $35,492 of restricted cash in the Condensed Consolidated Balance Sheets which represents the net proceeds received from the sale of nine and eight vessels, respectively, that served as collateral under the $495 Million Credit Facility. The net proceeds for each vessel will remain classified as restricted cash for 360 days following the respective sale dates. These amounts can be used towards the financing of a replacement vessel or vessels meeting certain requirements and added as collateral under the facility. If such a replacement vessel is not added as collateral within such 360 day period, the Company will be required to use the proceeds as a loan prepayment.  Refer to Note 7 — Debt for further information.

Refer to the “Impairment of vessel assets” and “Loss on sale of vessels” sections in Note 2 — Summary of Significant Accounting Policies for discussion of impairment expense and the net loss on sale of vessels recorded during the three months ended March 31, 2021 and 2020.

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5 – NET EARNINGS (LOSS) PER SHARE

The computation of basic net earnings (loss) per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net earnings (loss) per share assumes the vesting of nonvested stock awards and the exercise of stock options (refer to Note 14 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. There were 215,240 restricted stock units and 87,358 stock options that were dilutive during the three months ended March 31, 2021. There were 288,185 restricted stock units and 837,338 stock options excluded from the computation of diluted net loss per share during the three months ended March 31, 2020 because they were anti-dilutive (refer to Note 14 — Stock-Based Compensation).

The Company’s diluted net earnings (loss) per share will also reflect the assumed conversion of the equity warrants issued when the Company emerged from bankruptcy on July 9, 2014 (the “Effective Date”) and MIP Warrants issued by the Company (refer to Note 14 — Stock-Based Compensation) if the impact is dilutive under the treasury stock method. The equity warrants have a 7-year term that commenced on the day following the Effective Date and are exercisable for one tenth of a share of the Company’s common stock. All MIP Warrants during the three months ended March 31, 2020 were excluded from the computation of diluted net earnings (loss) per share because they were anti-dilutive. The MIP Warrants expired on August 7, 2020. There were 3,936,761 equity warrants excluded from the computation of diluted net earnings (loss) per share during the three months ended March 31, 2021 and 2020 because they were anti-dilutive. The equity warrants expire at 5:00 p.m. on July 9, 2021.

The components of the denominator for the calculation of basic and diluted net earnings (loss) per share are as follows:

For the Three Months Ended

March 31, 

    

2021

    

2020

 

Common shares outstanding, basic:

Weighted-average common shares outstanding, basic

41,973,782

 

41,866,357

Common shares outstanding, diluted:

Weighted-average common shares outstanding, basic

41,973,782

 

41,866,357

Dilutive effect of warrants

 

Dilutive effect of stock options

87,358

Dilutive effect of restricted stock awards

215,240