Genco Shipping & Trading Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 gnk-20200331x10q.htm 10-Q gnk_Current folio_10Q

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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 March 31, 2020

☐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		98-043-9758
(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)

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 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 ☐

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)

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 6, 2020: Common stock, par value $0.01 per share — 41,801,753 shares.

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Genco Shipping & Trading Limited

			Page

	PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)		4

	a)	Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	4

	b)	Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2020 and 2019	5

	c)	Condensed Consolidated Statements of Comprehensive Loss for the Three Months ended March 31, 2020 and 2019	6

	d)	Condensed Consolidated Statements of Equity for the Three Months ended March 31, 2020 and 2019	7

	e)	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2020 and 2019	8

	f)	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		54

Item 4.	Controls and Procedures		54

	PART II —OTHER INFORMATION

Item 1A.	Risk Factors		56

Item 6.	Exhibits		57

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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.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Genco Shipping & Trading Limited

Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019

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

(Unaudited)


	March 31,		December 31,
	2020		2019

Assets
Current assets:
Cash and cash equivalents	$	134,338	$	155,889
Restricted cash		14,855		6,045
Due from charterers, net of a reserve of $665 and $1,064, respectively		15,004		13,701
Prepaid expenses and other current assets		10,865		10,049
Inventories		29,342		27,208
Vessels held for sale		23,129		10,303
Total current assets		227,533		223,195

Noncurrent assets:
Vessels, net of accumulated depreciation of $228,208 and $288,373, respectively		1,121,561		1,273,861
Deferred drydock, net of accumulated amortization of $6,993 and $11,862 respectively		17,704		17,304
Fixed assets, net of accumulated depreciation and amortization of $1,704 and $2,154, respectively		5,949		5,976
Operating lease right-of-use assets		7,904		8,241
Restricted cash		315		315
Total noncurrent assets		1,153,433		1,305,697

Total assets	$	1,380,966	$	1,528,892

Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses	$	34,170	$	49,604
Current portion of long-term debt		72,962		69,747
Deferred revenue		7,818		6,627
Current operating lease liabilities		1,698		1,677
Total current liabilities:		116,648		127,655

Noncurrent liabilities:
Long-term operating lease liabilities		9,393		9,826
Long-term debt, net of deferred financing costs of $12,143 and $13,094, respectively		403,729		412,983
Total noncurrent liabilities		413,122		422,809

Total liabilities		529,770		550,464

Commitments and contingencies (Note 14)

Equity:
Common stock, par value $0.01; 500,000,000 shares authorized; 41,801,753 and 41,754,413 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		418		417
Additional paid-in capital		1,714,385		1,721,268
Accumulated deficit		(863,607)		(743,257)
Total equity		851,196		978,428
Total liabilities and equity	$	1,380,966	$	1,528,892

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, 2020 and 2019

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

(Unaudited)


	For the Three Months Ended
	March 31,
	2020		2019
Revenues:
Voyage revenues	$	98,336	$	93,464

Total revenues		98,336		93,464

Operating expenses:
Voyage expenses		48,368		43,022
Vessel operating expenses		21,813		23,190
Charter hire expenses		3,075		2,419
General and administrative expenses (inclusive of nonvested stock amortization expense of $481 and $452, respectively)		5,767		6,310
Technical management fees		1,854		1,940
Depreciation and amortization		17,574		18,076
Impairment of vessel assets		112,814		—
Loss (gain) on sale of vessels		486		(611)

Total operating expenses		211,751		94,346

Operating loss		(113,415)		(882)

Other (expense) income:
Other (expense) income		(584)		329
Interest income		594		1,327
Interest expense		(6,945)		(8,575)

Other expense		(6,935)		(6,919)

Net loss	$	(120,350)	$	(7,801)

Net loss per share-basic	$	(2.87)	$	(0.19)
Net loss per share-diluted	$	(2.87)	$	(0.19)
Weighted average common shares outstanding-basic		41,866,357		41,726,106
Weighted average common shares outstanding-diluted		41,866,357		41,726,106

See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive Loss

For the Three Months Ended March 31, 2020 and 2019

(U.S. Dollars in Thousands)

(Unaudited)


	For the Three Months Ended
	March 31,
	2020		2019

Net loss	$	(120,350)	$	(7,801)

Other comprehensive income		—		—

Comprehensive loss	$	(120,350)	$	(7,801)

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, 2020 and 2019

(U.S. Dollars in Thousands)

(Unaudited)


			Additional
	Common		Paid-in		Accumulated
	Stock		Capital		Deficit		Total Equity
Balance — January 1, 2020	$	417	$	1,721,268	$	(743,257)	$	978,428

Net loss						(120,350)		(120,350)

Issuance of 47,341 shares of vested RSUs, net of forfeitures of 1,490 shares		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


			Additional
	Common		Paid-in		Accumulated
	Stock		Capital		Deficit		Total Equity
Balance — January 1, 2019	$	416	$	1,740,163	$	(687,272)	$	1,053,307

Net loss						(7,801)		(7,801)

Issuance of 12,477 shares of vested RSUs		—		—				—

Nonvested stock amortization				452				452

Balance — March 31, 2019	$	416	$	1,740,615	$	(695,073)	$	1,045,958

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, 2020 and 2019

(U.S. Dollars in Thousands)

(Unaudited)


	For the Three Months Ended
	March 31,
	2020		2019
Cash flows from operating activities:
Net loss	$	(120,350)	$	(7,801)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		17,574		18,076
Amortization of deferred financing costs		951		915
Noncash operating lease expense		337		285
Amortization of nonvested stock compensation expense		481		452
Impairment of vessel assets		112,814		—
Loss (gain) on sale of vessels		486		(611)
Insurance proceeds for protection and indemnity claims		101		226
Change in assets and liabilities:
(Increase) decrease in due from charterers		(1,303)		5,041
(Increase) decrease in prepaid expenses and other current assets		(1,074)		927
Increase in inventories		(2,134)		(1,077)
Decrease in accounts payable and accrued expenses		(9,916)		(2,114)
Increase (decrease) in deferred revenue		1,191		(1,907)
Decrease in operating lease liabilities		(412)		(390)
Deferred drydock costs incurred		(2,784)		(410)
Net cash (used in) provided by operating activities		(4,038)		11,612

Cash flows from investing activities:
Purchase of vessels and ballast water treatment systems, including deposits		(273)		(3,406)
Purchase of scrubbers (capitalized in Vessels)		(7,778)		(5,868)
Purchase of other fixed assets		(1,039)		(1,199)
Net proceeds from sale of vessels		14,510		6,351
Insurance proceeds for hull and machinery claims		157		—
Net cash provided by (used in) investing activities		5,577		(4,122)

Cash flows from financing activities:
Repayments on the $108 Million Credit Facility		(1,580)		(1,580)
Proceeds from $495 Million Credit Facility		11,250		—
Repayments on the $495 Million Credit Facility		(16,660)		(15,000)
Payment of common stock issuance costs		—		(105)
Cash dividends paid		(7,290)		—
Payment of deferred financing costs		—		(591)
Net cash used in financing activities		(14,280)		(17,276)

Net decrease in cash, cash equivalents and restricted cash		(12,741)		(9,786)

Cash, cash equivalents and restricted cash at beginning of period		162,249		202,761
Cash, cash equivalents and restricted cash at end of period	$	149,508	$	192,975

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. GS&T is incorporated under the laws of the Marshall Islands, and as of March 31, 2020, is the direct or indirect owner of all of the outstanding shares or limited liability company interests of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; Genco Shipping Pte. Ltd.; Genco Shipping A/S; Baltic Trading Limited (“Baltic Trading”); and the ship-owning subsidiaries as set forth below under “Other General Information.”

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 the overall 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 2020. However, an increase in the severity or duration or a resurgence of the COVID-19 pandemic 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.

Other General Information

Below is the list of the Company’s wholly owned ship-owning subsidiaries as of March 31, 2020:


Wholly Owned Subsidiaries	Vessel Acquired	Dwt	Delivery Date	Year Built

Genco Augustus Limited	Genco Augustus	180,151	8/17/07	2007
Genco Tiberius Limited	Genco Tiberius	175,874	8/28/07	2007
Genco London Limited	Genco London	177,833	9/28/07	2007
Genco Titus Limited	Genco Titus	177,729	11/15/07	2007
Genco Warrior Limited	Genco Warrior	55,435	12/17/07	2005
Genco Predator Limited	Genco Predator	55,407	12/20/07	2005
Genco Hunter Limited	Genco Hunter	58,729	12/20/07	2007
Genco Constantine Limited	Genco Constantine	180,183	2/21/08	2008
Genco Hadrian Limited	Genco Hadrian	169,025	12/29/08	2008
Genco Commodus Limited	Genco Commodus	169,098	7/22/09	2009
Genco Maximus Limited	Genco Maximus	169,025	9/18/09	2009
Genco Claudius Limited	Genco Claudius	169,001	12/30/09	2010
Genco Bay Limited	Genco Bay	34,296	8/24/10	2010
Genco Ocean Limited	Genco Ocean	34,409	7/26/10	2010
Genco Avra Limited	Genco Avra	34,391	5/12/11	2011
Genco Mare Limited	Genco Mare	34,428	7/20/11	2011
Genco Spirit Limited	Genco Spirit	34,432	11/10/11	2011
Genco Aquitaine Limited	Genco Aquitaine	57,981	8/18/10	2009
Genco Ardennes Limited	Genco Ardennes	58,018	8/31/10	2009
Genco Auvergne Limited	Genco Auvergne	58,020	8/16/10	2009
Genco Bourgogne Limited	Genco Bourgogne	58,018	8/24/10	2010
Genco Brittany Limited	Genco Brittany	58,018	9/23/10	2010
Genco Languedoc Limited	Genco Languedoc	58,018	9/29/10	2010
Genco Loire Limited	Genco Loire	53,430	8/4/10	2009
Genco Lorraine Limited	Genco Lorraine	53,417	7/29/10	2009
Genco Normandy Limited	Genco Normandy	53,596	8/10/10	2007
Genco Picardy Limited	Genco Picardy	55,257	8/16/10	2005

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Wholly Owned Subsidiaries	Vessel Acquired	Dwt	Delivery Date		Year Built

Genco Provence Limited	Genco Provence	55,317	8/23/10		2004
Genco Pyrenees Limited	Genco Pyrenees	58,018	8/10/10		2010
Genco Rhone Limited	Genco Rhone	58,018	3/29/11		2011
Genco Weatherly Limited	Genco Weatherly	61,556	7/26/18		2014
Genco Columbia Limited	Genco Columbia	60,294	9/10/18		2016
Genco Endeavour Limited	Genco Endeavour	181,060	8/15/18		2015
Genco Resolute Limited	Genco Resolute	181,060	8/14/18		2015
Genco Defender Limited	Genco Defender	180,021	9/6/18		2016
Genco Liberty Limited	Genco Liberty	180,032	9/11/18		2016
Baltic Lion Limited	Baltic Lion	179,185	4/8/15	(1)	2012
Baltic Tiger Limited	Genco Tiger	179,185	4/8/15	(1)	2011
Baltic Leopard Limited

Price	9.36	EPS	-1
Shares	42	P/E	-10
MCap	391	P/FCF	14
Net Debt	352	EBIT	-14
TEV	743	TEV/EBIT	-53
TTM 2019-09-30, in MM, except price, ratios

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	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

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GNK 10Q Quarterly Report

Genco Shipping & Trading Earnings 2020-03-31