10-Q 1 gnk-20220930x10q.htm 10-Q
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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 September 30, 2022

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 November 9, 2022: Common stock, par value $0.01 per share — 42,327,181 shares.

Genco Shipping & Trading Limited

Page

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

4

a)

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

4

b)

Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2022 and 2021

5

c)

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months ended September 30, 2022 and 2021

6

d)

Condensed Consolidated Statements of Equity for the Three and Nine Months ended September 30, 2022 and 2021

7

e)

Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2022 and 2021

9

f)

Notes to Condensed Consolidated Financial Statements

10

Item 2.

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

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

51

Item 4.

Controls and Procedures

52

PART II —OTHER INFORMATION

Item 1A.

Risk Factors

52

Item 6.

Exhibits

53

2

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, filings with the U.S. Securities and Exchange Commission (the “SEC”), 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

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Genco Shipping & Trading Limited

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

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

(Unaudited)

September 30, 

December 31, 

    

2022

    

2021

 

    

    

 

Assets

Current assets:

Cash and cash equivalents

$

65,532

$

114,573

Restricted cash

 

5,643

 

5,643

Due from charterers, net of a reserve of $2,061 and $1,403, respectively

 

25,866

 

20,116

Prepaid expenses and other current assets

10,817

9,935

Inventories

32,181

24,563

Fair value of derivative instruments

5,724

Total current assets

 

145,763

 

174,830

Noncurrent assets:

Vessels, net of accumulated depreciation of $290,291 and $253,005, respectively

 

1,014,154

 

981,141

Deposits on vessels

 

 

18,543

Deferred drydock, net of accumulated amortization of $13,695 and $12,879 respectively

 

31,282

 

14,275

Fixed assets, net of accumulated depreciation and amortization of $5,611 and $3,984, respectively

 

8,125

 

7,237

Operating lease right-of-use assets

 

4,435

 

5,495

Restricted cash

 

315

 

315

Fair value of derivative instruments

 

1,659

 

1,166

Total noncurrent assets

 

1,059,970

 

1,028,172

Total assets

$

1,205,733

$

1,203,002

Liabilities and Equity

Current liabilities:

Accounts payable and accrued expenses

$

38,831

$

29,956

Deferred revenue

 

14,464

 

10,081

Current operating lease liabilities

2,025

1,858

Total current liabilities:

 

55,320

 

41,895

Noncurrent liabilities:

Long-term operating lease liabilities

4,652

6,203

Long-term debt, net of deferred financing costs of $6,505 and $7,771, respectively

173,245

238,229

Total noncurrent liabilities

 

177,897

 

244,432

Total liabilities

 

233,217

 

286,327

Commitments and contingencies (Note 13)

Equity:

Common stock, par value $0.01; 500,000,000 shares authorized; 42,327,181 and 41,924,597 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

423

419

Additional paid-in capital

1,621,185

1,702,166

Accumulated other comprehensive income

 

7,105

 

825

Accumulated deficit

 

(656,924)

 

(786,823)

Total Genco Shipping & Trading Limited shareholders’ equity

 

971,789

 

916,587

Noncontrolling interest

 

727

 

88

Total equity

 

972,516

 

916,675

Total liabilities and equity

$

1,205,733

$

1,203,002

See accompanying notes to Condensed Consolidated Financial Statements.

4

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021

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

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

   

Revenues:

Voyage revenues

$

135,970

$

155,252

$

409,961

$

363,851

Total revenues

135,970

 

155,252

409,961

 

363,851

Operating expenses:

Voyage expenses

39,496

 

37,797

110,420

 

109,572

Vessel operating expenses

22,090

 

21,788

78,567

 

59,622

Charter hire expenses

6,952

8,644

19,633

22,405

General and administrative expenses (inclusive of nonvested stock amortization expense of $840, $597, $2,356 and $1,670, respectively)

5,911

 

5,659

18,334

 

17,616

Technical management fees

761

1,631

2,378

4,400

Depreciation and amortization

15,582

 

14,200

44,162

 

41,409

Loss on sale of vessels

159

894

Total operating expenses

90,792

 

89,878

273,494

 

255,918

Operating income

45,178

 

65,374

136,467

 

107,933

Other income (expense):

Other (expense) income

(2,146)

 

84

617

 

440

Interest income

292

 

25

377

 

144

Interest expense

(2,276)

 

(3,943)

(6,923)

(12,955)

Loss on debt extinguishment

(4,408)

(4,408)

Other expense, net

(4,130)

 

(8,242)

(5,929)

 

(16,779)

Net income

$

41,048

$

57,132

130,538

91,154

Less: Net income attributable to noncontrolling interest

220

 

639

 

Net income attributable to Genco Shipping & Trading Limited

$

40,828

$

57,132

$

129,899

$

91,154

Earnings per share-basic

$

0.96

$

1.36

$

3.07

$

2.17

Earnings per share-diluted

$

0.95

$

1.34

$

3.03

$

2.14

Weighted average common shares outstanding-basic

42,529,865

 

42,095,211

42,361,797

 

42,047,115

Weighted average common shares outstanding-diluted

42,881,541

 

42,750,836

42,915,240

 

42,548,187

See accompanying notes to Condensed Consolidated Financial Statements.

5

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended September 30, 2022 and 2021

(U.S. Dollars in Thousands)

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

 

Net income

$

41,048

 

$

57,132

$

130,538

 

$

91,154

Other comprehensive income (loss)

1,488

 

(98)

6,280

 

40

Comprehensive income

$

42,536

$

57,034

$

136,818

$

91,194

Less: Comprehensive income attributable to noncontrolling interest

220

 

639

Comprehensive income attributable to Genco Shipping & Trading Limited

$

42,316

 

$

57,034

$

136,179

 

$

91,194

See accompanying notes to Condensed Consolidated Financial Statements.

6

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Equity

For the Three and Nine Months Ended September 30, 2022 and 2021

(U.S. Dollars in Thousands)

aaw

Genco

Shipping &

Accumulated

Trading

Additional

Other

Limited

Common

Paid-in

Comprehensive

Accumulated

Shareholders'

Noncontrolling

    

Stock

    

Capital

    

Income

    

Deficit

    

Equity

    

Interest

    

Total Equity

Balance — January 1, 2022

$

419

$

1,702,166

$

825

$

(786,823)

$

916,587

$

88

$

916,675

Net income

41,689

41,689

176

41,865

Other comprehensive income

3,293

3,293

3,293

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

2

(2)

Cash dividends declared ($0.67 per share)

(28,454)

(28,454)

(28,454)

Nonvested stock amortization

690

690

690

Balance — March 31, 2022

$

421

$

1,674,400

$

4,118

$

(745,134)

$

933,805

$

264

$

934,069

Net income

47,382

47,382

243

47,625

Other comprehensive income

1,499

1,499

1,499

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

2

(2)

Cash dividends declared ($0.79 per share)

(33,560)

(33,560)

(33,560)

Nonvested stock amortization

826

826

826

Balance — June 30, 2022

$

423

$

1,641,664

$

5,617

$

(697,752)

$

949,952

$

507

$

950,459

Net income

40,828

40,828

220

41,048

Other comprehensive income

1,488

1,488

1,488

Issuance of shares due to exercise of options

Cash dividends declared ($0.50 per share)

(21,319)

(21,319)

(21,319)

Nonvested stock amortization

840

840

840

Balance — September 30, 2022

$

423

$

1,621,185

$

7,105

$

(656,924)

$

971,789

$

727

$

972,516

7

Genco

Shipping &

Accumulated

Trading

Additional

Other

Limited

Common

Paid-in

Comprehensive

Accumulated

Shareholders'

Noncontrolling

    

Stock

    

Capital

    

Income

    

Deficit

    

Equity

    

Interest

    

Total Equity

Balance — January 1, 2021

$

418

$

1,713,406

$

$

(968,830)

$

744,994

$

$

744,994

Net income

1,985

1,985

1,985

Other comprehensive income

161

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)

(845)

Nonvested stock amortization