10-Q 1 gnk-20230930x10q.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, 2023

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 8, 2023: Common stock, par value $0.01 per share — 42,538,665 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, 2023 and December 31, 2022

4

b)

Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2023 and 2022

5

c)

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months ended September 30, 2023 and 2022

6

d)

Condensed Consolidated Statements of Equity for the Three and Nine Months ended September 30, 2023 and 2022

7

e)

Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2023 and 2022

9

f)

Notes to Condensed Consolidated Financial Statements

10

Item 2.

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

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

50

Item 4.

Controls and Procedures

51

PART II —OTHER INFORMATION

Item 1A.

Risk Factors

51

Item 5.

Other Information

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, 2023 and December 31, 2022

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

(Unaudited)

September 30, 

December 31, 

    

2023

    

2022

 

    

    

 

Assets

Current assets:

Cash and cash equivalents

$

46,259

$

58,142

Restricted cash

 

5,643

 

5,643

Due from charterers, net of a reserve of $2,516 and $2,141, respectively

 

19,522

 

25,333

Prepaid expenses and other current assets

10,162

8,399

Inventories

27,567

21,601

Fair value of derivative instruments

2,369

6,312

Total current assets

 

111,522

 

125,430

Noncurrent assets:

Vessels, net of accumulated depreciation of $284,693 and $303,098, respectively

 

939,749

 

1,002,810

Deferred drydock, net of accumulated amortization of $19,431 and $15,456 respectively

 

32,982

 

32,254

Fixed assets, net of accumulated depreciation and amortization of $7,430 and $6,254, respectively

 

7,435

 

8,556

Operating lease right-of-use assets

 

2,994

 

4,078

Restricted cash

 

315

 

315

Fair value of derivative instruments

 

 

423

Total noncurrent assets

 

983,475

 

1,048,436

Total assets

$

1,094,997

$

1,173,866

Liabilities and Equity

Current liabilities:

Accounts payable and accrued expenses

$

27,428

$

29,475

Deferred revenue

 

6,534

 

4,958

Current operating lease liabilities

2,266

2,107

Total current liabilities:

 

36,228

 

36,540

Noncurrent liabilities:

Long-term operating lease liabilities

2,386

4,096

Long-term debt, net of deferred financing costs of $4,756 and $6,079, respectively

139,994

164,921

Total noncurrent liabilities

 

142,380

 

169,017

Total liabilities

 

178,608

 

205,557

Commitments and contingencies

Equity:

Common stock, par value $0.01; 500,000,000 shares authorized; 42,536,983 and 42,327,181 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

425

423

Additional paid-in capital

1,558,541

1,588,777

Accumulated other comprehensive income

 

2,257

 

6,480

Accumulated deficit

 

(646,055)

 

(628,247)

Total Genco Shipping & Trading Limited shareholders’ equity

 

915,168

 

967,433

Noncontrolling interest

 

1,221

 

876

Total equity

 

916,389

 

968,309

Total liabilities and equity

$

1,094,997

$

1,173,866

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, 2023 and 2022

(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, 

    

2023

    

2022

    

2023

    

2022

   

Revenues:

Voyage revenues

$

83,361

$

135,970

$

268,309

$

409,961

Total revenues

83,361

 

135,970

268,309

 

409,961

Operating expenses:

Voyage expenses

34,256

 

39,496

100,522

 

110,420

Vessel operating expenses

24,746

 

22,090

71,725

 

78,567

Charter hire expenses

2,026

6,952

6,731

19,633

General and administrative expenses (inclusive of nonvested stock amortization expense of $1,397, $840, $4,175 and $2,356, respectively)

6,585

 

5,911

21,267

 

18,334

Technical management fees

973

761

3,084

2,378

Depreciation and amortization

17,026

 

15,582

49,762

 

44,162

Impairment of vessel assets

28,102

28,102

Total operating expenses

113,714

 

90,792

281,193

 

273,494

Operating (loss) income

(30,353)

 

45,178

(12,884)

 

136,467

Other income (expense):

Other (expense) income

(100)

 

(2,146)

(298)

 

617

Interest income

588

 

292

1,877

 

377

Interest expense

(1,999)

 

(2,276)

(6,158)

(6,923)

Other expense, net

(1,511)

 

(4,130)

(4,579)

 

(5,929)

Net (loss) income

$

(31,864)

$

41,048

(17,463)

130,538

Less: Net income attributable to noncontrolling interest

140

 

220

345

 

639

Net (loss) income attributable to Genco Shipping & Trading Limited

$

(32,004)

$

40,828

$

(17,808)

$

129,899

Net (loss) earnings per share-basic

$

(0.75)

$

0.96

$

(0.42)

$

3.07

Net (loss) earnings per share-diluted

$

(0.75)

$

0.95

$

(0.42)

$

3.03

Weighted average common shares outstanding-basic

42,816,045

 

42,529,865

42,745,681

 

42,361,797

Weighted average common shares outstanding-diluted

42,816,045

 

42,881,541

42,745,681

 

42,915,240

See accompanying notes to Condensed Consolidated Financial Statements.

5

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive (Loss) Income

For the Three and Nine Months Ended September 30, 2023 and 2022

(U.S. Dollars in Thousands)

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2023

    

2022

    

2023

    

2022

 

Net (loss) income

$

(31,864)

 

$

41,048

$

(17,463)

 

$

130,538

Other comprehensive (loss) income

(1,602)

 

1,488

(4,223)

 

6,280

Comprehensive (loss) income

$

(33,466)

$

42,536

$

(21,686)

$

136,818

Less: Comprehensive income attributable to noncontrolling interest

140

 

220

345

639

Comprehensive (loss) income attributable to Genco Shipping & Trading Limited

$

(33,606)

 

$

42,316

$

(22,031)

 

$

136,179

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, 2023 and 2022

(U.S. Dollars in Thousands)

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, 2023

$

423

$

1,588,777

$

6,480

$

(628,247)

$

967,433

$

876

$

968,309

Net income

2,634

2,634

226

2,860

Other comprehensive loss

(1,628)

(1,628)

(1,628)

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

2

(2)

Cash dividends declared ($0.50 per share)

(21,516)

(21,516)

(21,516)

Nonvested stock amortization

1,559

1,559

1,559

Balance — March 31, 2023

$

425

$

1,568,818

$

4,852

$

(625,613)

$

948,482

$

1,102

$

949,584

Net income (loss)

11,562

11,562

(21)

11,541

Other comprehensive loss

(993)

(993)

(993)

Issuance of shares due to vesting of RSUs and exercise of options, net of forfeitures

Cash dividends declared ($0.15 per share)

(6,406)

(6,406)

(6,406)

Nonvested stock amortization

1,219

1,219

1,219

Balance — June 30, 2023

$

425

$

1,563,631

$

3,859

$

(614,051)

$

953,864

$

1,081

$

954,945

Net (loss) income

(32,004)

(32,004)

140

(31,864)

Other comprehensive loss

(1,602)

(1,602)

(1,602)

Issuance of shares due to vesting of RSUs

Cash dividends declared ($0.15 per share)

(6,487)

(6,487)

(6,487)

Nonvested stock amortization

1,397

1,397

1,397

Balance — September 30, 2023

$

425

$

1,558,541

$

2,257

$

(646,055)

$

915,168

$

1,221

$

916,389

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, 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)