EX-99.1 2 shipcoq419.htm EX-99.1 Document

Exhibit 99.1
 
 EAGLE BULK SHIPCO LLC
 
Eagle Bulk Shipco LLC (“Shipco” or “Issuer”), a wholly-owned subsidiary of Eagle Bulk Shipping Inc. (the “Parent Company”) is providing the unaudited condensed consolidated and unconsolidated financial information of Shipco for the three months ended December 31, 2019 and 2018 as required by those certain bond terms, dated as of November 22, 2017 (the "Bond Terms"), by and between Shipco, as issuer, and Nordic Trustee AS, a company existing under the laws of Norway, pursuant to which on November 28, 2017, Shipco issued $200.0 million in aggregate principal amount of 8.250% Senior Secured Bonds 2017/2022 (the “Norwegian Bond Debt”).

While the accompanying unaudited condensed consolidated and unconsolidated financial information are derived from the Parent Company’s audited consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States and included in the Parent Company's Annual Report on Form 10-K for the fiscal years ended December 31, 2019 and 2018 (the “Parent Company 10-K”), they have neither been reviewed nor audited by the Parent Company’s independent auditor. In accordance with the Bond Terms, Shipco’s audited unconsolidated and consolidated annual financial statements are required to be provided no later than 120 days after the end of the fiscal year end, or April 29, 2020. The unaudited financial information contained herein should be read in conjunction with the Parent Company’s audited consolidated financial statements and notes thereto included in the Parent Company 10-K, which was filed with the U.S. Securities and Exchange Commission on March 12, 2020.







EAGLE BULK SHIPCO LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
 December 31, 2019December 31, 2018
Revenues, net$28,595,909  $38,880,520  
Voyage expenses8,021,517  10,268,187  
Vessel expenses11,195,973  11,742,012  
Depreciation and amortization5,351,315  5,242,408  
General and administrative expenses1
3,904,588  3,917,737  
Loss on sale of vessels65,240  104,496  
Total operating expenses28,538,633  31,274,840  
Operating income57,276  7,605,680  
Interest expense4,200,204  4,358,625  
Interest income(128,298) (113,463) 
Other income, net(667,056) (92,402) 
Total other expenses, net3,404,850  4,152,760  
Net (loss)/income$(3,347,574) $3,452,920  

1General and administrative expenses for the three months ended December 31, 2019 includes $1.7 million of management fees and $1.6 million of general and administrative costs which represent Shipco's share of the Parent Company's general and administrative costs, as per the existing management fee agreements. General and administrative expenses for the three months ended December 31, 2018 includes $1.8 million of management fees and $2.1 million of general and administrative costs which represent Shipco's share of the Parent Company's general and administrative costs, as per the existing management fee agreements.

























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EAGLE BULK SHIPCO LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

 December 31, 2019December 31, 2018
ASSETS: 
Current assets: 
Cash and cash equivalents$6,444,499  $19,273,740  
Restricted cash - current5,471,469  —  
Accounts receivable9,272,791  9,145,026  
Accounts receivable - related party—  2,620,894  
Prepaid expenses1,162,069  1,342,765  
Inventories7,431,172  8,411,747  
Vessels held for sale—  8,458,444  
Other current assets231,040  421,944  
Total current assets30,013,040  49,674,560  
Noncurrent assets: 
Vessels and vessel improvements, at cost, net of accumulated depreciation of $91,003,680 and $80,546,984, respectively 342,986,124  330,215,290  
Restricted cash - noncurrent—  10,878,968  
Deferred Drydocking costs, net9,975,466  6,386,377  
Deferred financing costs - Super Senior Revolver Facility166,111  285,342  
Advances for scrubbers and ballast water systems and other assets8,032,399  8,545,916  
Total noncurrent assets361,160,100  356,311,893  
Total assets$391,173,140  $405,986,453  
LIABILITIES & STOCKHOLDER'S EQUITY 
Current liabilities: 
Accounts payable$4,514,574  $6,521,222  
Accrued interest1,415,333  1,489,917  
Other accrued liabilities9,389,183  3,687,075  
Unearned charter hire revenue1,917,822  1,871,261  
Current portion of long-term debt - Norwegian Bond Debt8,000,000  8,000,000  
Total current liabilities25,236,912  21,569,475  
Noncurrent liabilities: 
Norwegian Bond Debt, net of debt discount and debt issuance costs175,867,310  182,469,155  
Total noncurrent liabilities175,867,310  182,469,155  
Total liabilities201,104,222  204,038,630  
Stockholder's equity: 
Total Stockholder's equity190,068,918  201,947,823  
Total liabilities and Stockholder's equity$391,173,140  $405,986,453  












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EAGLE BULK SHIPCO LLC (ISSUER ONLY)

UNCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME
(Unaudited)
For the Three Months Ended
 December 31, 2019December 31, 2018
Interest expense4,200,204  4,358,625  
Interest income(128,298) (113,463) 
Other income, net(667,056) (92,402) 
Total other expenses, net3,404,850  4,152,760  
Equity in net income of subsidiaries *57,276  7,605,680  
Net (loss)/income and comprehensive (loss)/income$(3,347,574) $3,452,920  


           * Eliminated in the consolidated financial statements of the Issuer.







































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EAGLE BULK SHIPCO LLC (ISSUER ONLY)

UNCONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)

 December 31, 2019December 31, 2018
ASSETS: 
Current assets: 
Cash and cash equivalents$6,359,929  $19,263,334  
Restricted cash - current5,471,469  —  
Accounts receivable - related party—  2,620,894  
Prepaid expenses60,469  42,509  
Total current assets11,891,867  21,926,737  
Noncurrent assets: 
Restricted cash - noncurrent—  10,878,968  
Investment in subsidiaries363,910,445  360,940,259  
Deferred financing costs - Super Senior Revolver Facility166,111  285,342  
Total noncurrent assets364,076,556  372,104,569  
Total assets$375,968,423  $394,031,306  
LIABILITIES & STOCKHOLDER'S EQUITY 
Current liabilities: 
Accounts Payable505,156  —  
Accrued interest1,415,333  1,489,917  
Other accrued liabilities111,706  124,411  
Current portion of long-term debt - Norwegian Bond Debt8,000,000  8,000,000  
Total current liabilities10,032,195  9,614,328  
Noncurrent liabilities: 
Norwegian Bond Debt, net of debt discount and debt issuance costs175,867,310  182,469,155  
Total noncurrent liabilities175,867,310  182,469,155  
Total liabilities185,899,505  192,083,483  
Stockholder's equity: 
Total Stockholder's equity190,068,918  201,947,823  
Total liabilities and Stockholder's equity$375,968,423  $394,031,306  





















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Basis of presentation
        
Shipco is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership, charter and operation of dry bulk vessels. Shipco's fleet is comprised of Supramax and Ultramax bulk carriers and Shipco operates its business in one business segment. The operations of the vessels are managed by Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company. As of December 31, 2019, the Company owned and operated a modern fleet of 24 oceangoing vessels.

        On November 28, 2017, Shipco issued into escrow $200,000,000 in aggregate principal amount of 8.250% Senior Secured Bonds 2017/2022 (the "Norwegian Bond Debt"), pursuant to the Bond Terms, dated as of November 22, 2017, by and between the Issuer and Nordic Trustee AS, as the Bond Trustee. After giving effect to an original issue discount of approximately 1% and deducting offering expenses of $3.1 million, the net proceeds from the issuance of the Norwegian Bond Debt were approximately $195.0 million.

        Shipco entered into a commercial and technical management agreement on December 8, 2017 with Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company, for performance of technical and commercial services to vessels owned by Shipco at a fee of $150,000 per vessel per annum for commercial management services and $135,000 per vessel per annum for technical management services. Shipco also entered into an overhead sharing agreement which provides for an additional fee allocation of cash general and administrative expenses of Eagle Bulk Management LLC, based on relative ownership days of Shipco and its subsidiaries to the total consolidated ownership days of the Parent Company and all of its subsidiaries. The condensed statement of operations for the quarter ended December 31, 2019 consisted of $1.7 million of management fees and $1.6 million of allocated general and administrative expenses. Accounts payable in the condensed consolidated balance sheets at December 31, 2019 and 2018 include $0.5 million and $0.2 million, respectively, of management fees owed to Eagle Bulk Management LLC, a wholly-owned subsidiary of the Parent Company as per the existing management fee agreements.
        

        

        









           










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