QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | No | ☐ |
☒ | No | ☐ |
Large accelerated filer | ☐ | ☒ | Non-Accelerated filer | ☐ | ||||||||||||||||
Smaller reporting company | Emerging growth company |
Yes | No | ☒ |
Page | ||||||||
PART I | FINANCIAL INFORMATION | |||||||
ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | |||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
PART II | OTHER INFORMATION | |||||||
ITEM 1. | ||||||||
ITEM 1A. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
ITEM 5. | ||||||||
ITEM 6. | ||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | |||||||||||
ASSETS: | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of a reserve of $ | |||||||||||
Prepaid expenses | |||||||||||
Inventories | |||||||||||
Collateral on derivatives | |||||||||||
Fair value of derivative assets - current | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Noncurrent assets: | |||||||||||
Vessels and vessel improvements, at cost, net of accumulated depreciation of $ | |||||||||||
Advance for vessel purchase | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other fixed assets, net of accumulated depreciation of $ | |||||||||||
Restricted cash - noncurrent | |||||||||||
Deferred drydock costs, net | |||||||||||
Fair value of derivative assets - noncurrent | |||||||||||
Advances for ballast water systems and other assets | |||||||||||
Total noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES & STOCKHOLDERS' EQUITY: | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued interest | |||||||||||
Other accrued liabilities | |||||||||||
Fair value of derivative liabilities - current | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Unearned charter hire revenue | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Noncurrent liabilities: | |||||||||||
Global Ultraco Debt Facility, net of debt issuance costs | |||||||||||
Convertible Bond Debt, net of debt discount and debt issuance costs | |||||||||||
Noncurrent portion of operating lease liabilities | |||||||||||
Other noncurrent accrued liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
Revenues, net | $ | $ | $ | $ | |||||||||||||||||||
Voyage expenses | |||||||||||||||||||||||
Vessel operating expenses | |||||||||||||||||||||||
Charter hire expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Other operating expense | |||||||||||||||||||||||
Gain on sale of vessel | ( | ( | ( | ( | |||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Interest income | ( | ( | ( | ( | |||||||||||||||||||
Realized and unrealized (gain)/loss on derivative instruments, net | ( | ( | |||||||||||||||||||||
Loss on debt extinguishment | |||||||||||||||||||||||
Total other (income)/expense, net | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Per share amounts: | |||||||||||||||||||||||
Basic net income | $ | $ | $ | $ | |||||||||||||||||||
Diluted net income | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Net unrealized gain on cash flow hedges | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Common stock | Common stock amount | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Total stockholders’ equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
— | — | ( | — | ( | |||||||||||||||||||||||||||||||
Issuance of shares due to vesting of restricted shares | ( | — | — | ||||||||||||||||||||||||||||||||
Issuance of shares upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Fees for equity offerings | — | — | — | — | |||||||||||||||||||||||||||||||
Cash used to settle net share equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Issuance of shares due to vesting of restricted shares | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Cash used to settle net share equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Issuance of shares due to vesting of restricted shares | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Cash used to settle net share equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | $ |
Common stock | Common stock amount | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total stockholders’ equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of shares due to vesting of restricted shares | ( | — | — | ||||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Fees for equity offerings | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Cash used to settle net share equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at March 31, 2021 | ( | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of shares due to vesting of restricted shares | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issuance of shares upon conversion of warrants | — | — | |||||||||||||||||||||||||||||||||
Issuance of shares from ATM Offering, net of commissions and issuance costs | — | — | |||||||||||||||||||||||||||||||||
Issuance of shares upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Cash used to settle net share equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of shares upon conversion of Convertible Bond Debt | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of shares upon conversion of warrants | — | — | |||||||||||||||||||||||||||||||||
Issuance of shares upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Unrealized gain on cash flow hedges | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance costs for ATM Offering | — | — | ( | ( | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended | |||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of operating lease right-of-use assets | |||||||||||
Amortization of deferred drydocking costs | |||||||||||
Amortization of debt discount and debt issuance costs | |||||||||||
Loss on debt extinguishment | |||||||||||
Gain on sale of vessel | ( | ( | |||||||||
Net unrealized (gain)/loss on fair value of derivatives | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Drydocking expenditures | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts payable | |||||||||||
Accounts receivable | ( | ( | |||||||||
Accrued interest | ( | ||||||||||
Inventories | ( | ( | |||||||||
Operating lease liabilities current and noncurrent | ( | ( | |||||||||
Collateral on derivatives | ( | ||||||||||
Fair value of derivatives, other current and noncurrent assets | ( | ( | |||||||||
Other accrued liabilities | ( | ||||||||||
Prepaid expenses | ( | ( | |||||||||
Unearned charter hire revenue | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of vessels and vessel improvements | ( | ( | |||||||||
Advances for vessel purchases | ( | ( | |||||||||
Purchase of scrubbers and ballast water systems | ( | ( | |||||||||
Proceeds from hull and machinery insurance claims | |||||||||||
Proceeds from sale of vessel | |||||||||||
Purchase of other fixed assets | ( | ( | |||||||||
Net cash provided by/(used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from New Ultraco Debt Facility | |||||||||||
Repayment of Norwegian Bond Debt | ( | ||||||||||
Repayment of term loan under New Ultraco Debt Facility | ( | ||||||||||
Repayment of revolver loan under New Ultraco Debt Facility | ( | ||||||||||
Repayment of revolver loan under Super Senior Facility | ( | ||||||||||
Proceeds from revolver loan under New Ultraco Debt Facility | |||||||||||
Proceeds from Holdco Revolving Credit Facility | |||||||||||
Proceeds from issuance of shares under ATM Offering, net of commissions | |||||||||||
Repayment of term loan under Global Ultraco Debt Facility | ( | ||||||||||
Repurchase of Convertible Bond Debt | ( | ||||||||||
Cash received from exercise of stock options | |||||||||||
Cash used to settle net share equity awards | ( | ( | |||||||||
Equity offerings issuance costs | ( | ||||||||||
Financing costs paid to lenders | ( | ( | |||||||||
Dividends paid | ( | ||||||||||
Net cash (used in)/provided by financing activities | ( | ||||||||||
Net increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
Cash paid during the period for interest | $ | $ | |||||||||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | |||||||||
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities | $ | $ | |||||||||
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities | $ | $ | |||||||||
Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities | $ | $ | |||||||||
Accrual for issuance costs for ATM Offering included in Other accrued liabilities | $ | $ | |||||||||
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities | $ | $ |
(In thousands) | |||||
Vessels and vessel improvements, at December 31, 2021 | $ | ||||
Purchase of vessels and vessel improvements | |||||
Sale of vessel | ( | ||||
Scrubbers and BWTS | |||||
Depreciation expense | ( | ||||
Vessels and vessel improvements, at September 30, 2022 | $ |
(In thousands) | September 30, 2022 | December 31, 2021 | |||||||||
Convertible Bond Debt | $ | $ | |||||||||
Debt discount and debt issuance costs - Convertible Bond Debt | ( | ( | |||||||||
Convertible Bond Debt, net of debt discount and debt issuance costs | |||||||||||
Global Ultraco Debt Facility | |||||||||||
Debt discount and Debt issuance costs - Global Ultraco Debt Facility | ( | ( | |||||||||
Less: Current portion - Global Ultraco Debt Facility | ( | ( | |||||||||
Global Ultraco Debt Facility, net of debt issuance costs | |||||||||||
Total long-term debt | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||
Convertible Bond Debt interest | $ | $ | $ | $ | |||||||||||||||||||
Global Ultraco Debt Facility interest | |||||||||||||||||||||||
Holdco Revolving Credit Facility interest | |||||||||||||||||||||||
New Ultraco Debt Facility interest | |||||||||||||||||||||||
Norwegian Bond Debt interest | |||||||||||||||||||||||
Super Senior Facility interest | |||||||||||||||||||||||
Amortization of debt discount and debt issuance costs | |||||||||||||||||||||||
Commitment fees on revolving credit facilities | |||||||||||||||||||||||
Total Interest expense | $ | $ | $ | $ |
(In thousands) | Convertible Bond Debt | Global Ultraco Debt Facility | Total | |||||||||||||||||
Three months ending December 31, 2022 | $ | $ | $ | |||||||||||||||||
2023 | ||||||||||||||||||||
2024 | ||||||||||||||||||||
2025 | ||||||||||||||||||||
2026 | ||||||||||||||||||||
$ | $ | $ |
Interest Rate Swap detail | Notional Amount outstanding (in thousands) | |||||||||||||||||||
Trade date | Fixed rate | Start date | End date | September 30, 2022 | December 31, 2021 | |||||||||||||||
October 07, 2021 | % | October 12, 2021 | December 15, 2025 | $ | $ | |||||||||||||||
October 13, 2021 | % | October 15, 2021 | December 15, 2025 | |||||||||||||||||
October 14, 2021 | % | October 18, 2021 | December 15, 2025 | |||||||||||||||||
October 22, 2021 | % | October 26, 2021 | December 15, 2025 | |||||||||||||||||
$ | $ |
Derivatives designated as hedging instruments | Location of (gain)/loss in Statements of Operations | Effective portion of (gain)/loss reclassified from Accumulated other comprehensive income (in thousands) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||
Interest rate swaps | Interest expense | $ | ( | $ | $ | ( | $ |
Derivatives designated as hedging instruments (in thousands) | Balance Sheet location | September 30, 2022 | December 31, 2021 | ||||||||||||||
Interest rate swap | Fair value of derivative assets - current | $ | $ | ||||||||||||||
Interest rate swap | Fair value of derivative assets - noncurrent | $ | $ | ||||||||||||||
Interest rate swap | Fair value of derivative liabilities - current | $ | $ |
FFA Period | Number of Days Hedged | Average FFA Contract Price | |||||||||
Quarter ending December 31, 2022 - Sell Positions | 2,010 | $ | |||||||||
Quarter ending December 31, 2022 - Buy Positions | (1,335) | $ | |||||||||
Year ending December 31, 2023 - Sell Positions | 720 | $ | |||||||||
Year ending December 31, 2023 - Buy Positions | (855) | $ |
(In thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | Location of loss/(gain) in Statements of Operations | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||||
FFAs - realized (gain)/loss | Realized and unrealized (gain)/loss on derivative instruments, net | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
FFAs - unrealized (gain)/loss | Realized and unrealized (gain)/loss on derivative instruments, net | ( | ( | ( | |||||||||||||||||||||||||
Bunker swaps - realized gain | Realized and unrealized (gain)/loss on derivative instruments, net | ( | ( | ( | ( | ||||||||||||||||||||||||
Bunker swaps - unrealized loss/(gain) | Realized and unrealized (gain)/loss on derivative instruments, net | ( | |||||||||||||||||||||||||||
Total | $ | ( | $ | $ | ( | $ |
Derivatives not designated as hedging instruments (in thousands) | Balance Sheet location | September 30, 2022 | December 31, 2021 | ||||||||||||||
FFAs - Unrealized loss | Fair value of derivative liabilities - current | $ | $ | ||||||||||||||
FFAs - Unrealized gain | Fair value of derivative assets - current | ||||||||||||||||
Bunker swaps - Unrealized loss | Fair value of derivative liabilities - current | ||||||||||||||||
Bunker swaps - Unrealized gain | Fair value of derivative assets - current |
Fair Value | |||||||||||||||||
(In thousands) | Carrying Value (7) | Level 1 | Level 2 | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents (1) | $ | $ | $ | ||||||||||||||
Collateral on derivatives | |||||||||||||||||
Fair value of derivative assets - current (2) | |||||||||||||||||
Fair value of derivative assets - noncurrent (3) | |||||||||||||||||
Liabilities | |||||||||||||||||
Global Ultraco Debt Facility (4) | |||||||||||||||||
Convertible Bond Debt (5) | |||||||||||||||||
Fair value of derivative liabilities - current (6) |
Fair Value | |||||||||||||||||
(In thousands) | Carrying Value (7) | Level 1 | Level 2 | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents (1) | $ | $ | $ | ||||||||||||||
Collateral on derivatives | |||||||||||||||||
Fair value of derivative assets - current (2) | |||||||||||||||||
Fair value of derivative assets - noncurrent (3) | |||||||||||||||||
Liabilities | |||||||||||||||||
Global Ultraco Debt Facility (4) | |||||||||||||||||
Convertible Bond Debt (5) | |||||||||||||||||
Fair value of derivative liabilities - current (6) |
Description | Location in Balance Sheet | September 30, 2022 (1) | December 31, 2021 (1) | |||||||||||
Noncurrent assets: | (In thousands) | |||||||||||||
Chartered-in contracts greater than 12 months | Operating lease right-of-use assets | $ | $ | |||||||||||
Office leases | Operating lease right-of-use assets | |||||||||||||
Operating lease right-of-use assets | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||
Chartered-in contracts greater than 12 months | Current portion of operating lease liabilities | $ | $ | |||||||||||
Office leases | Current portion of operating lease liabilities | |||||||||||||
Lease liabilities - current portion | $ | $ | ||||||||||||
Chartered-in contracts greater than 12 months | Noncurrent portion of operating lease liabilities | $ | $ | |||||||||||
Office leases | Noncurrent portion of operating lease liabilities | |||||||||||||
Lease liabilities - noncurrent portion | $ | $ |
(In thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
Description | Location in Statement of Operations | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||||
Lease expense for chartered-in contracts less than 12 months | Charter hire expenses | $ | $ | $ | $ | ||||||||||||||||||||||||
Lease expense for chartered-in contracts greater than 12 months | Charter hire expenses | ||||||||||||||||||||||||||||
Total charter hire expenses | $ | $ | $ | $ | |||||||||||||||||||||||||
Lease expense for office leases | General and administrative expenses | $ | $ | $ | $ | ||||||||||||||||||||||||
Sublease income from chartered-in contracts greater than 12 months * | Revenues, net | $ | $ | $ | $ |
Supplemental Disclosure Information | Chartered-in contracts greater than 12 months | Office leases | Total Operating leases | ||||||||
(In thousands) | |||||||||||
Year: | |||||||||||
Three months ending December 31, 2022 | $ | $ | $ | ||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
$ | $ | $ | |||||||||
Present value of lease liability: | |||||||||||
Lease liabilities - short term | $ | $ | $ | ||||||||
Lease liabilities - long term | |||||||||||
Total lease liabilities | $ | $ | $ | ||||||||
Discount based on incremental borrowing rate | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||
Time charters | $ | $ | $ | $ | |||||||||||||||||||
Voyage charters | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands, except share and per share data) | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted Average Shares - Basic | |||||||||||||||||||||||
Dilutive effect of stock options, shares issuable under Convertible Bond Debt, restricted stock awards and restricted stock units | |||||||||||||||||||||||
Weighted Average Shares - Diluted | |||||||||||||||||||||||
Basic net income per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted net income per share | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||
Stock awards/Stock Option Plans | $ | $ | $ | $ |
(In thousands) | September 30, 2022 | December 31, 2021 | September 30, 2021 | December 31, 2020 | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Restricted cash - current * | |||||||||||||||||||||||
Restricted cash - noncurrent * | |||||||||||||||||||||||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
Ownership Days | 4,831 | 4,697 | 14,424 | 13,407 | |||||||||||||||||||
Chartered-in Days | 1,000 | 563 | 3,102 | 1,718 | |||||||||||||||||||
Available Days | 5,588 | 4,931 | 16,701 | 14,403 | |||||||||||||||||||
Operating Days | 5,574 | 4,908 | 16,662 | 14,308 | |||||||||||||||||||
Fleet Utilization (%) | 99.7 | % | 99.5 | % | 99.8 | % | 99.3 | % |
(In thousands, except owned available days and TCE) | For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||
Revenues, net | $ | 185,313 | $ | 183,393 | $ | 568,406 | $ | 409,816 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Voyage expenses | (40,792) | (30,273) | (120,710) | (81,411) | ||||||||||||||||||||||
Charter hire expenses | (19,772) | (10,724) | (63,768) | (25,374) | ||||||||||||||||||||||
Reversal of one legacy time charter (1) | — | — | — | (854) | ||||||||||||||||||||||
Realized gain/(loss) on FFAs and bunker swaps | 4,169 | (15,338) | 4,764 | (21,395) | ||||||||||||||||||||||
$ | 128,918 | $ | 127,058 | $ | 388,692 | $ | 280,782 | |||||||||||||||||||
Owned available days | 4,588 | 4,368 | 13,599 | 12,685 | ||||||||||||||||||||||
TCE | $ | 28,099 | $ | 29,088 | $ | 28,582 | $ | 22,135 | ||||||||||||||||||
Nine Months Ended | |||||||||||
(In thousands) | September 30, 2022 | September 30, 2021 | |||||||||
Net cash provided by operating activities | $ | 242,491 | $ | 120,915 | |||||||
Net cash provided by/(used in) investing activities | 4,090 | (106,767) | |||||||||
Net cash (used in)/provided by financing activities | (135,198) | 22,648 | |||||||||
Net increase in cash, cash equivalents and restricted cash | 111,383 | 36,796 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 86,222 | 88,849 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 197,605 | $ | 125,645 |
Projected Costs (1) (in millions) | |||||||||||||||||
Quarter Ending | Off-hire Days(2) | BWTS | Drydocks | Vessel Upgrades(3) | |||||||||||||
December 31, 2022 | 177 | $ | 0.3 | $ | 1.5 | $ | — | ||||||||||
March 31, 2023 | 233 | $ | 0.1 | $ | 5.4 | $ | 0.4 | ||||||||||
June 30, 2023 | 186 | $ | 0.7 | $ | 3.8 | $ | 0.4 | ||||||||||
September 30, 2023 | 193 | $ | 0.7 | $ | 4.0 | $ | 0.4 |
(1) Actual costs will vary based on various factors, including where the drydockings are performed. | ||
(2) Actual duration of off-hire days will vary based on the age and condition of the vessel, yard schedules and other factors. | ||
(3) Vessel upgrades represents capex relating to items such as high-spec low friction hull paint which improves fuel efficiency and reduces fuel costs, NeoPanama Canal chock fittings enabling vessels to carry additional cargo through the new Panama Canal locks, as well as other retrofitted fuel-saving devices. Vessel upgrades are discretionary in nature and evaluated on a business case-by-case basis. |
101* | The following materials from Eagle Bulk Shipping Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2022 and December 31, 2021, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2022 and 2021, (iii) Condensed Consolidated Statements of Comprehensive income (unaudited) for the three and nine months ended September 30, 2022 and 2021, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2022 and 2021, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2022 and 2021, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited). |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserve | $ 2,192 | $ 1,818 |
Vessels and vessel improvements, accumulated depreciation | 249,384 | 218,670 |
Other fixed assets, accumulated depreciation | $ 1,566 | $ 1,403 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 13,003,516 | 12,917,027 |
Common stock outstanding (in shares) | 13,003,516 | 12,917,027 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Statement [Abstract] | ||||
Revenues, net | $ 185,313 | $ 183,393 | $ 568,406 | $ 409,816 |
Voyage expenses | 40,792 | 30,273 | 120,710 | 81,411 |
Vessel operating expenses | 33,091 | 28,125 | 88,213 | 73,323 |
Charter hire expenses | 19,772 | 10,724 | 63,768 | 25,374 |
Depreciation and amortization | 15,407 | 13,570 | 45,241 | 39,187 |
General and administrative expenses | 9,666 | 7,948 | 29,611 | 23,559 |
Other operating expense | 2,469 | 792 | 2,643 | 2,312 |
Gain on sale of vessel | (9,336) | (3,962) | (9,336) | (3,962) |
Total operating expenses | 111,861 | 87,470 | 340,850 | 241,204 |
Operating income | 73,452 | 95,923 | 227,556 | 168,612 |
Interest expense | 4,236 | 8,511 | 13,021 | 25,561 |
Interest income | (881) | (19) | (1,100) | (52) |
Realized and unrealized (gain)/loss on derivative instruments, net | (11,293) | 8,991 | (13,281) | 45,588 |
Loss on debt extinguishment | 4,173 | 99 | 4,173 | 99 |
Total other (income)/expense, net | (3,765) | 17,582 | 2,813 | 71,196 |
Net income | $ 77,217 | $ 78,341 | $ 224,743 | $ 97,416 |
Weighted average shares outstanding | ||||
Basic (in shares) | 12,993,450 | 12,802,401 | 12,985,329 | 12,237,288 |
Diluted (in shares) | 16,201,852 | 15,936,374 | 16,219,264 | 15,354,481 |
Per share amounts | ||||
Basic net income (in usd per share) | $ 5.94 | $ 6.12 | $ 17.31 | $ 7.96 |
Diluted net income (in usd per share) | $ 4.77 | $ 4.92 | $ 13.86 | $ 6.34 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 77,217 | $ 78,341 | $ 224,743 | $ 97,416 |
Net unrealized gain on cash flow hedges | 4,554 | 80 | 15,405 | 724 |
Comprehensive income | $ 81,771 | $ 78,421 | $ 240,148 | $ 98,140 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividend declared (in dollars per share) | $ 2.20 | $ 2.00 | $ 2.05 |
Basis of Presentation and General Information |
9 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and General Information | Basis of Presentation and General Information The accompanying condensed consolidated financial statements include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or similar terms). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, charter and operation of drybulk vessels. The Company’s fleet is comprised of Supramax and Ultramax drybulk carriers, and the Company operates its business in one business segment. As of September 30, 2022, the Company owned and operated a modern fleet of 52 oceangoing vessels, including 26 Supramax and 26 Ultramax vessels with a combined carrying capacity of 3.14 million deadweight tons (“dwt”) and an average age of approximately 9.9 years. Additionally, the Company charters-in five Ultramax vessels on a long term basis with remaining lease terms of approximately one year each and also charters-in vessels on a short term basis for a period of less than one year. For the three and nine months ended September 30, 2022 and 2021, the Company’s charterers did not individually account for more than 10% of the Company’s gross charter revenue during those periods. The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on March 14, 2022 (the “Form 10-K”). The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year. In March 2021, the Company entered into an at market issuance sales agreement with B. Riley Securities, Inc., BTIG, LLC and Fearnley Securities, Inc., as sales agents (each, a “Sales Agent” and collectively, the “Sales Agents”), to sell shares of common stock, par value $0.01 per share, of the Company with aggregate gross sales proceeds of up to $50.0 million, from time to time through an “at-the-market” offering program (the “ATM Offering”). During the second quarter of 2021, the Company sold and issued an aggregate of 581,385 shares at a weighted average sales price of $47.97 per share under the ATM Offering for aggregate net proceeds of $27.1 million after deducting sales agent commissions and other offering costs. The proceeds were used for partial financing of vessel acquisitions and other corporate purposes. The preparation of condensed consolidated 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 disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company are residual value of vessels, the useful lives of vessels, the value of stock-based compensation, estimated losses on our trade receivables, fair value of Convertible Bond Debt (as defined below) and its equity component, fair value of operating lease right-of-use assets and operating lease liabilities and the fair value of derivatives. Actual results could differ from those estimates.
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Recent Accounting Pronouncements |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Significant Accounting Policies The Company's significant accounting policies are described in Note 2, Significant Accounting Policies, in the Notes to the Consolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies. Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU's guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, the entity will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. The Company adopted ASU 2020-06 as of January 1, 2022 under the modified retrospective approach. The Convertible Bond Debt (defined below) will no longer require bifurcation and separate accounting of the equity component. The resulting debt discount will no longer be amortized to interest expense over the life of the bond and thus an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit reflecting the cumulative impact of adoption. Additionally, a $20.7 million reduction to Additional paid-in capital was recorded to reverse the equity component and an offsetting $12.0 million was recorded within Convertible Bond Debt, net of debt discount and debt issuance costs as a reversal of the debt discount. Recently Issued Accounting Pronouncements Not Yet Effective The FASB has issued accounting standards that had not yet become effective as of September 30, 2022 and may impact the Company's condensed consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 addresses concerns about certain accounting consequences that could result from the anticipated transition away from the use of LIBOR and other interbank offered rates to alternative reference rates. ASU 2020-04 is elective and applies “to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.” ASU 2020-04 establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients. ASU 2020-04 is optional and effective for all entities as of March 12, 2020 and may be applied prospectively to contract modifications made on or before December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”), which clarifies certain provisions in Topic 848, if elected by an entity, to apply to derivative instruments that use interest rate for margining, discounting, or contract price alignment that is modified as a result of rate reference reform. The Company is currently evaluating the adoption of ASU 2020-04 on its debt under the Global Ultraco Debt Facility (as defined below) as it bears interest on outstanding borrowings at LIBOR plus a margin rate. Additionally, the Company is also evaluating the adoption of ASU 2021-01 on its interest rate swaps related to the Global Ultraco Debt Facility.
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Vessels |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Vessels | Vessels Vessels and Vessel Improvements As of September 30, 2022, the Company’s owned operating fleet consisted of 52 drybulk vessels. During the third quarter of 2018, the Company entered into a contract for the installation of ballast water treatment systems (“BWTS”) on 39 of our owned vessels. The projected cost, including installation, is approximately $0.5 million per BWTS. The Company intends to complete the installations during scheduled drydockings. The Company completed installation of BWTS on 32 vessels and recorded $19.8 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheets as of September 30, 2022. Additionally, the Company recorded $1.9 million as advances paid toward installation of BWTS on the remaining vessels recorded in Advances for ballast water systems and other assets in the Condensed Consolidated Balance Sheets as of September 30, 2022. On June 8, 2022, the Company signed a memorandum of agreement to sell the vessel Cardinal for a total consideration of $15.8 million. The vessel was delivered to the buyer during the third quarter of 2022. The Company recorded a gain of $9.3 million in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022. During the third quarter of 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built scrubber-fitted Ultramax bulkcarrier for a total consideration of $27.5 million. The vessel is expected to be delivered to the Company in November 2022. Activity in Vessels and vessel improvements for the nine months ended September 30, 2022 is below:
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Debt | Debt
Convertible Bond Debt On July 29, 2019, the Company issued $114.1 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2024 (the “Convertible Bond Debt”). After deducting debt discount of $1.6 million, the Company received net proceeds of approximately $112.5 million. Additionally, the Company incurred $1.0 million of debt issuance costs relating to this transaction. The Company used the proceeds to partially finance the purchase of six Ultramax vessels and for general corporate purposes, including working capital. During the three months ended September 30, 2022, the Company repurchased $10.0 million in aggregate principal amount of Convertible Bond Debt for $14.2 million in cash and cancelled the repurchased debt. Accordingly, a $4.2 million loss on debt extinguishment was recorded in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022. As a result of these repurchases, the Company’s weighted average diluted shares for the three and nine months ended September 30, 2022 decreased by 296,990 shares. The Convertible Bond Debt bears interest at a rate of 5.00% per annum on the outstanding principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, which commenced on February 1, 2020. The Convertible Bond Debt may bear additional interest upon certain events, as set forth in the indenture governing the Convertible Bond Debt (the “Indenture”). The Convertible Bond Debt will mature on August 1, 2024 (the “Maturity Date”), unless earlier repurchased, redeemed or converted pursuant to its terms. From time to time, the Company may, subject to market conditions and other factors and to the extent permitted by law, opportunistically repurchase the Convertible Bond Debt in the open market or through privately negotiated transactions. The Company may not otherwise redeem the Convertible Bond Debt prior to the Maturity Date. Each holder has the right to convert any portion of the Convertible Bond Debt, provided such portion is of $1,000 or a multiple thereof, at any time prior to the close of business on the business day immediately preceding the Maturity Date. As of September 30, 2022, the conversion rate of the Convertible Bond Debt after adjusting for a 1-for-7 reverse stock split effected on September 15, 2020 (the “Reverse Stock Split”) and the Company's cash dividends declared through September 30, 2022 is 29.699 shares of the Company's common stock per $1,000 principal amount of Convertible Bond Debt, which is equivalent to a conversion price of approximately $33.67 per share of common stock (subject to further adjustments for future dividends). Upon conversion of the remaining bonds, the Company will pay or deliver, as the case may be, either cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, to the holder (subject to shareholder approval requirements in accordance with the listing standards of the Nasdaq Global Select Market). If the Company undergoes a fundamental change, as set forth in the Indenture, each holder may require the Company to repurchase all or part of their Convertible Bond Debt for cash in principal amounts of $1,000 or a multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the Convertible Bond Debt to be repurchased, plus accrued and unpaid interest. If, however, the holders instead elect to convert their Convertible Bond Debt in connection with the fundamental change, the Company will be required to increase the conversion rate of the Convertible Bond Debt at a rate determined by a combination of the date the fundamental change occurs and the stock price of the Company's common stock on such date. The Convertible Bond Debt is the general, unsecured senior obligations of the Company. It ranks: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Bond Debt; (ii) equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company. The Indenture also provides for customary events of default. Generally, if an event of default occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the Convertible Bond Debt then outstanding may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Bond Debt then outstanding to be due and payable. In accordance with ASC 470, Debt, (“ASC 470”) the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) prior to the adoption of ASU 2020-06 were to be separately accounted for in a manner that reflected the issuer's non-convertible debt borrowing rate. The guidance required the initial proceeds received from the sale of convertible debt instruments to be allocated between a liability component and equity component in a manner that reflected the interest expense at the interest rate of similar non-convertible debt that could have been issued by the Company at the time of issuance. Prior to the adoption of ASU 2020-06, the Company accounted for the Convertible Bond Debt based on the above guidance and attributed a portion of the proceeds to the equity component. The resulting debt discount was amortized using the effective interest method over the expected life of the Convertible Bond Debt as interest expense. Additionally, the debt discount and issuance costs were allocated based on the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Bond Debt. The Company adopted ASU 2020-06 as of January 1, 2022 and made adjustments to account for the cumulative impact of the adoption. See Note 2, Recent Accounting Pronouncements, for discussion of the impact of ASU 2020-06 on the accounting for the Convertible Bond Debt and the condensed consolidated financial statements upon adoption on January 1, 2022. Share Lending Agreement In connection with the issuance of the Convertible Bond Debt, certain persons entered into an arrangement (the “Share Lending Agreement”) to borrow up to 511,840 shares of the Company’s common stock through share lending arrangements from Jefferies LLC (“JCS”), an initial purchaser of the Convertible Bond Debt, which in turn entered into an arrangement to borrow the shares from an entity affiliated with Oaktree Capital Management, LP, one of the Company’s shareholders. The number of shares under the Share Lending Agreement have been adjusted for the Reverse Stock Split. As of September 30, 2022, the fair value of the 511,840 outstanding loaned shares was $22.1 million based on the closing price of the common stock on September 30, 2022. In connection with the Share Lending Agreement, JCS paid $0.03 million representing a nominal fee per borrowed share, equal to the par value of the Company’s common stock. While the Share Lending Agreement does not require cash payment upon return of the shares, physical settlement is required (i.e., the loaned shares must be returned at the end of the arrangement). In view of this share return provision and other contractual undertakings of JCS in the Share Lending Agreement, which have the effect of substantially eliminating the economic dilution that otherwise would result from the issuance of borrowed shares, the loaned shares are not considered issued and outstanding for the purpose of computing and reporting the Company's basic and diluted weighted average shares or net income per share. If JCS were to file bankruptcy or commence similar administrative, liquidating or restructuring proceedings, the Company will have to consider 511,840 shares lent to JCS as issued and outstanding for the purposes of calculating net income per share. Global Ultraco Debt Facility On October 1, 2021, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its vessel-owning subsidiaries as guarantors, entered into a new senior secured credit facility (the “Global Ultraco Debt Facility”) with the lenders party thereto (the “Lenders”) Credit Agricole Corporate and Investment Bank (“Credit Agricole”), Skandinaviska Enskilda Banken AB (PUBL), Danish Ship Finance A/S, Nordea Bank ABP, Filial I Norge, DNB Markets Inc., Deutsche Bank AG, and ING Bank N.V., London Branch. The Global Ultraco Debt Facility provides for an aggregate principal amount of $400.0 million, which consists of (i) a term loan facility in an aggregate principal amount of $300.0 million (the “Term Facility”) and (ii) a revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Facility”) to be used for refinancing the outstanding debt, including accrued interest and commitment fees under the Holdco Revolving Credit Facility, New Ultraco Debt Facility and Norwegian Bond Debt (each as defined in Note 6, Debt, in the Notes to the Consolidated Financial Statements in the Form 10-K) and for general corporate purposes. The Company paid fees of $5.8 million to the Lenders in connection with the transaction. The Global Ultraco Debt Facility has a maturity date of five years from the date of borrowing on the Term Facility, which is October 1, 2026. Outstanding borrowings bear interest at a rate of LIBOR plus 2.10% to 2.80% per annum, depending on certain metrics such as the Company's financial leverage ratio and meeting sustainability linked criteria. Repayments of $12.45 million are due quarterly and began on December 15, 2021, with a final balloon payment of all outstanding principal and accrued interest due upon maturity. The loan is repayable in whole or in part without premium or penalty prior to the maturity date subject to certain requirements stipulated in the Global Ultraco Debt Facility. The Global Ultraco Debt Facility is secured by 49 of the Company's vessels. The Global Ultraco Debt Facility contains certain standard affirmative and negative covenants along with financial covenants. The financial covenants include: (i) minimum consolidated liquidity based on the greater of (a) $0.6 million per vessel owned directly or indirectly by the Company or (b) 7.5% of the Company's total debt; (ii) debt to capitalization ratio not greater than 0.60:1.00; and (iii) maintaining positive working capital. As of September 30, 2022, the Company was in compliance with all applicable financial covenants under the Global Ultraco Debt Facility. Pursuant to the Global Ultraco Debt Facility, the Company borrowed $350.0 million and together with cash on hand repaid the outstanding debt, accrued interest and commitment fees under the Holdco Revolving Credit Facility and New Ultraco Debt Facility. Concurrently, the Company issued a 10-day call notice to redeem the outstanding bonds under the Norwegian Bond Debt. Additionally, in October 2021, the Company entered into four interest rate swaps for the notional amount of $300.0 million of the Term Facility under the Global Ultraco Debt Facility at a fixed interest rate ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate (see Note 5, Derivative Instruments, for additional details). Interest Rates 2022 For the three and nine months ended September 30, 2022, the interest rate on the Convertible Bond Debt was 5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 5.25% and 5.35%, respectively. For the three months ended September 30, 2022, the interest rate on the Global Ultraco Debt Facility ranged from 3.93% to 5.39%, including a margin over LIBOR applicable under the terms of the Global Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolving credit facility of the Global Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 4.80%. For the nine months ended September 30, 2022, the interest rate on the Global Ultraco Debt Facility ranged from 2.35% to 5.39%, including a margin over LIBOR applicable under the terms of the Global Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolving credit facility of the Global Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.85%. 2021 For the three and nine months ended September 30, 2021, the interest rate on the Convertible Bond Debt was 5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 10.14%. For the three months ended September 30, 2021, the interest rate on the New Ultraco Debt Facility ranged from 2.61% to 2.68%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolving credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.39%. For the nine months ended September 30, 2021, the interest rate on the New Ultraco Debt Facility ranged from 2.60% to 2.72%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolving credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.28%. For the three and nine months ended September 30, 2021, the interest rate on the Norwegian Bond Debt was 8.25%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 9.05% and 9.02%, respectively. For the three and nine months ended September 30, 2021, the interest rate on our outstanding debt under the Super Senior Facility (as defined in Note 6, Debt, in the Notes to the Consolidated Financial Statements in the Form 10-K) was 2.24%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 2.58%. Additionally, we paid commitment fees of 40% of the margin on the undrawn portion of the Super Senior Revolver Facility. For the three and nine months ended September 30, 2021, the interest rate on our outstanding debt under the Holdco Revolving Credit Facility ranged from 2.55% to 2.60%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 6.15% and 5.61%, respectively. Additionally, we paid commitment fees of 40% of the margin on the undrawn portion of the Holdco Revolving Credit Facility. The following table summarizes the Company’s total interest expense:
Scheduled Debt Maturities The following table presents the scheduled maturities of principal amounts of our debt obligations as of September 30, 2022:
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Interest rate swaps During October 2021, the Company entered into four interest rate swaps for the notional amount of $300.0 million of the Term Facility under the Credit Agreement for the Global Ultraco Debt Facility at a fixed interest rate ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate. During 2020, the Company entered into a series of interest rate swap agreements to effectively convert a portion of its debt under the New Ultraco Debt Facility, excluding any amounts outstanding under the revolving credit facility as well as any new term loan borrowings from a floating to a fixed-rate basis. In August 2021, the Company cancelled the New Ultraco Debt Facility interest rate swaps. Concurrent with the cancellation, the Company entered into another interest rate swap which was subsequently cancelled on October 1, 2021 upon repayment of the New Ultraco Debt Facility. The interest rate swaps were designated and qualified as cash flow hedges. The Company uses interest rate swaps for the management of interest rate risk exposure, as an interest rate swap effectively converts a portion of the Company’s debt from a floating to a fixed rate. The interest rate swap is an agreement between the Company and counterparties to pay, in the future, a fixed-rate payment in exchange for the counterparties paying the Company a variable payment. The amount of the net payment obligation is based on the notional amount of the interest rate swap and the prevailing market interest rates. The Company may terminate the interest rate swaps prior to their expiration dates, at which point a realized gain or loss may be recognized, or may be amortized over the original life of the interest rate swap if the hedged debt remains outstanding. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move against the rate fixed for each swap. Tabular disclosure of derivatives location The following table summarizes the interest rate swaps in place as of September 30, 2022 and December 31, 2021:
The Company records the fair value of each interest rate swap as an asset or liability on its balance sheet. The effective portion of the swap is recorded in Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets. The estimated income that is currently recorded in Accumulated other comprehensive income as of September 30, 2022 that is expected to be reclassified into the earnings within the next twelve months is $7.7 million. No portion of the cash flow hedges were ineffective during the three and nine months ended September 30, 2022. The effect of the interest rate swaps on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 is below:
The following table shows the interest rate swap assets and liabilities as of September 30, 2022 and December 31, 2021:
Forward freight agreements and bunker swaps The Company trades in forward freight agreements (“FFAs”) and bunker swaps, with the objective of utilizing this market as economic hedging instruments that reduce the risk of specific vessels to changes in the freight market. The Company’s FFAs and bunker swaps have not qualified for hedge accounting treatment. As such, unrealized and realized gains are recorded in Other expense, net in the Condensed Consolidated Statements of Operations. The Company records the fair value of FFAs and bunker swaps as an asset or liability on its balance sheet. Derivatives are considered to be Level 2 instruments in the fair value hierarchy. For our bunker swaps, the Company may enter into master netting, collateral and offset agreements with counterparties. Cash collateral related to derivative instruments under its collateral security arrangements is recorded in Collateral on derivatives in the Condensed Consolidated Balance Sheets. As of September 30, 2022, the Company had International Swaps and Derivatives Association (“ISDA”) agreements with five applicable banks and financial institutions, which contain netting provisions. In addition to a master agreement with the Company supported by a primary parent guarantee on either side, the Company also has associated credit support agreements in place with two counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral, when the market value of transactions covered by these agreements exceeds specified thresholds. The Company does not anticipate non-performance by any of the counterparties. As of September 30, 2022, the Company had outstanding bunker swap agreements to purchase 15,800 metric tons of high and low sulfur fuel oil with prices ranging between $486 and $719 that expire on March 31, 2023. The volume represents less than 10% of our estimated consumption on our fleet for the year. The following table shows our open positions on FFAs as of September 30, 2022:
The Company will realize a gain or loss on these FFAs based on the price differential between the average daily Baltic Supramax Index (“BSI”) rate and the FFA contract price. The gains or losses are recorded in Realized and unrealized (gain)/loss on derivative instruments, net in the Condensed Consolidated Statements of Operations. The effect of non-designated derivative instruments on the Condensed Consolidated Statements of Operations and Balance Sheets is as follows:
Cash Collateral Disclosures The Company does not offset fair value amounts recognized for derivatives by the right to reclaim cash collateral or the obligation to return cash collateral. The amount of collateral to be posted is defined in the terms of respective master agreements executed with counterparties or exchanges and is required when agreed upon threshold limits are exceeded. As of September 30, 2022 and December 31, 2021, the Company posted cash collateral related to derivative instruments under its collateral security arrangements of $1.2 million and $15.1 million, respectively, which is recorded in Collateral on derivatives in the Condensed Consolidated Balance Sheets.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Cash, cash equivalents and restricted cash—the carrying amounts reported in the Condensed Consolidated Balance Sheets for interest-bearing deposits approximate their fair value due to the short-term nature thereof. Debt—the carrying values approximate fair value for bonds issued under the Convertible Bond Debt, which is traded in the over-the-counter market. The carrying amount of our term loan borrowing under the Global Ultraco Debt Facility approximates its fair value, due to its variable interest rates. The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 non-derivatives include cash, money-market accounts, restricted cash accounts and collateral on derivatives. Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our debt balances under the Convertible Bond Debt and the Global Ultraco Debt Facility. Freight forward agreements, bunker swaps and interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. See Note 5, Derivative Instruments. Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions). September 30, 2022
December 31, 2021
(1) Includes restricted cash (noncurrent) of $2.6 million at September 30, 2022 and $0.1 million at December 31, 2021. (2) Includes $10.8 million of unrealized mark-to-market gains on FFAs and $7.6 million of unrealized gains on our interest rate swaps as of September 30, 2022 and $4.7 million of unrealized mark-to-market gains on FFAs and bunker swaps as of December 31, 2021. (3) Includes $9.9 million and $3.1 million of unrealized gains on our interest rate swaps as of September 30, 2022 and December 31, 2021, respectively. (4) The fair value of the liabilities is based on the required repayment to the lenders if the debt was discharged in full on September 30, 2022 and December 31, 2021. (5) The fair value of the Convertible Bond Debt is based on the last trade on September 29, 2022 and December 16, 2021 on Bloomberg.com. (6) Includes $0.6 million of unrealized mark-to-market losses on bunker swaps as of September 30, 2022 and $3.4 million of unrealized mark-to-market losses on FFAs and $0.9 million of unrealized losses on our interest rate swaps as of December 31, 2021. (7) The outstanding debt balances represent the face value of the debt excluding debt discount and debt issuance costs.
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Commitments and Contingencies |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is involved in legal proceedings and may become involved in other legal matters arising in the ordinary course of its business. The Company evaluates these legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results of operations, financial condition or cash flows. In March 2021, the U.S. government began investigating an allegation that one of the Company's vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The investigation of this alleged violation of environmental laws is ongoing, and, although at this time we do not believe that this matter will have a material impact on the Company, our financial condition or results of operations, we cannot determine what penalties, if any, will be imposed. We have posted a surety bond as security for any fines, penalties or associated costs that may be issued, and the Company is cooperating fully with the U.S. government in its investigation of this matter. For the nine months ended September 30, 2022 and 2021, the Company incurred and recorded $0.3 million and $2.3 million, respectively, as Other operating expense in the Condensed Consolidated Statements of Operations relating to this incident, which include legal fees, surety bond expenses, vessel off-hire, crew changes and travel costs.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Time charter-in contracts The Company has time charter-in contracts for Ultramax vessels which are greater than 12 months as of the lease commencement date. A description of each of these contracts is below: (i) The Company entered into an agreement effective April 28, 2017, to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years with options for additional years. The hire rate for the first four years is $12,800 per day and the hire rate for the first optional year is $13,800 per day and $14,300 per day for the second optional year. In addition, the Company’s fair value below contract value of time charters acquired of $1.8 million as of December 31, 2018, which related to the unamortized value of a prior charter with the same counterparty that had been recorded at the time of the Company’s emergence from bankruptcy, was offset against the corresponding right of use asset on this lease as of January 1, 2019. On July 8, 2021, the Company exercised its option to extend the charter for another year at a hire rate of $13,800 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.0 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 8, 2021 was 1.36%. On June 16, 2022, the Company exercised its option to extend the charter for another year at a hire rate of $14,300 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.1 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of June 16, 2022 was 7.15%. (ii) On May 4, 2018, the Company entered into an agreement to charter-in a 61,425 dwt 2013 built Ultramax vessel for three years with an option for an additional two years. The hire rate for the first three years is $12,700 per day and $13,750 per day for the first year option and $14,750 per day for the second year option. The Company took delivery of the vessel in the third quarter of 2018. During the second quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party. Additionally, on June 28, 2021, the Company exercised its option to extend the charter for another year until October 19, 2022 at a hire rate of $13,750 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.8 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of June 28, 2021 was 1.34%. On September 15, 2022, the Company exercised its option to further extend the charter for eleven months at a hire rate of $14,750 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $4.5 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of September 15, 2022 was 6.54%. (iii) On December 9, 2018, the Company entered into an agreement to charter-in a 62,487 dwt 2016 built Ultramax vessel for two years. The hire rate for the vessel until March 2020 was $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. On December 25, 2019, the Company renegotiated the lease terms for another year at a hire rate of $11,600 per day and accordingly, the Company increased its lease liability and the corresponding right-of-use asset by $4.5 million. During the first quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party and accordingly, the Company increased its lease liability and the corresponding right-of-use asset by $1.0 million to reflect the change in lease term from minimum redelivery date to maximum redelivery date allowed under the charter party. On May 4, 2021, the Company exercised its option to extend the charter for another year until July 31, 2022 at a hire rate of $12,600 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $4.3 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 4, 2021 was 1.38%. On March 17, 2022, the Company further extended the lease to a minimum period of ten months and maximum period of twelve months with an option to further extend the lease for an additional minimum period of ten months and maximum period of he Company increased the lease liability and the corresponding right-of-use asset by $6.9 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of March 17, 2022 was 4.48%. (iv) On December 22, 2020, the Company entered into an agreement to charter-in a 63,634 dwt 2021 built Ultramax vessel for twelve months with an option for an additional three months at a hire rate of $5,900 per day plus 57% of the BSI 58 average of 10 time charter routes as published by the Baltic Exchange each business day. Additionally, following the initial fifteen month period the Company has an additional option to extend for a period of to thirteen months at an increased rate of $6,500 per day with no change in the rest of the terms. Also, the Company shall share the scrubber benefit with the owners 50% calculated as the price differential between the high sulfur and low sulfur fuel oil based on actual bunker consumption during the lease period. On July 7, 2021, the Company took delivery of the vessel and recorded $9.1 million as lease liability and corresponding right-of-use asset. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 7, 2021 was 1.33%. On May 17, 2022, the Company exercised its option to extend the charter for 11 months at a hire rate of $6,500 per day plus 57% of the BSI 58 average of 10 time charter routes as published by the Baltic Exchange each business day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $7.5 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 17, 2022 was 5.825%. (v) On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the fixed hire rate decreases to $10,750 per day with no change to the remaining terms. On May 17, 2022, the Company took delivery of the vessel and recorded $9.7 million as a lease liability and corresponding right-of-use asset. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 17, 2022 was 5.825%. Office leases On October 15, 2015, the Company entered into a commercial lease agreement as a sublessee for office space in Stamford, Connecticut. The lease is effective from January 2016 through June 2023, with an average annual rent of $0.4 million. The lease is secured by cash collateral of $0.1 million which is recorded as Restricted cash - noncurrent in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. On September 30, 2022, the Company entered into a lease agreement as the principal tenant to lease the existing office space. The lease is effective from July 1, 2023 through December 31, 2028, with an average annual rent of $0.5 million. The Company recognized a lease liability and corresponding right-of-use asset of $2.2 million. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of September 30, 2022 was 8.97%. In November 2018, the Company entered into an office lease agreement in Singapore, which was initially set to expire in October 2021, with an average annual rent of $0.3 million. On August 17, 2021, the Company renewed the lease on the existing office space for an additional 5 years with an average annual rent of $0.4 million and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $1.3 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of August 17, 2021 was 3.09%. Additionally, the Company entered into a new lease agreement for an additional office space in Singapore for 4.9 years beginning in the second quarter of 2022 with an average annual rent of $0.2 million. On February 15, 2022, the Company took possession of the additional office space and accordingly, the Company recognized a lease liability and corresponding right-of-use asset of $0.5 million. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of February 15, 2022 was 5.7%. The Company determined the three office leases to be operating leases and recorded the lease expense as part of General and administrative expenses in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021. Operating lease right-of-use assets and lease liabilities as of September 30, 2022 and December 31, 2021 are as follows:
(1) The Operating lease right-of-use assets and Operating lease liabilities represent the present value of lease payments for the remaining term of the lease. The discount rates used ranged from 1.33% to 8.97%. The weighted average discount rate used to calculate the lease liability as of September 30, 2022 and December 31, 2021 was 5.9% and 1.7%, respectively. The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and nine months ended September 30, 2022 and 2021:
* The sublease income represents only time charter revenue earned on time charter-in contracts with terms more than 12 months. There is additional revenue earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021. The cash paid for operating leases with terms greater than 12 months was $8.2 million and $21.1 million for the three and nine months ended September 30, 2022, respectively. The cash paid for operating leases with terms greater than 12 months was $5.4 million and $12.2 million for the three and nine months ended September 30, 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company obtained operating lease right-of-use assets of $39.0 million and $22.5 million, respectively, in exchange for operating lease liabilities. The weighted average remaining lease term on our operating lease contracts greater than 12 months as of September 30, 2022 was 14.8 months. The table below provides the total amount of remaining lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of September 30, 2022:
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Revenue from Contract with Customer |
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Revenue from Contract with Customer | Revenue Voyage charters In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or “dead” freight. The voyage contract generally has standard payment terms of 95% freight paid within three days after completion of loading. The voyage charter party generally has a “demurrage” or “despatch” clause. As per this clause, the charterer reimburses the Company for any delays that exceed the agreed to laytime at the ports visited, with the amounts recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime which is known as despatch and results in a reduction of revenue. In a voyage charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified time period. Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of the loading of cargo to completion of discharge. Voyage charter contracts are considered service contracts which fall under the provisions of ASC 606 because the Company, as the shipowner, retains control over the operations of the vessel such as directing the routes taken or the vessel speed. These contracts generally have variable consideration in the form of demurrage or despatch. The amount of revenue earned as demurrage, net of despatch incurred by the Company for the three and nine months ended September 30, 2022 was $7.8 million and $26.5 million respectively. The amount of revenue earned as demurrage, net of despatch incurred by the Company for the three and nine months ended September 30, 2021 was $8.6 million and $16.8 million, respectively. The following table shows the revenues earned from time charters and voyage charters for the three and nine months ended September 30, 2022 and 2021:
Contract costs In a voyage charter contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. These costs are considered contract fulfillment costs because the costs are direct costs related to the performance of the contract and are expected to be recovered. The costs incurred during the period prior to commencement of loading the cargo, primarily bunkers, are deferred as they represent setup costs and are recorded in Other current assets in the Condensed Consolidated Balance Sheets and are amortized on a straight-line basis as the related performance obligations are satisfied. As of September 30, 2022 and December 31, 2021, the Company recognized $0.7 million and $0.5 million, respectively, of deferred costs which represents bunker expenses and charter-hire expenses incurred prior to commencement of loading.
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Net income per Common Share |
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Net income per Common Share | Net Income per Common Share The computation of basic net income per share is based on the weighted average number of common stock outstanding for the three and nine months ended September 30, 2022 and 2021. Diluted net income per share gives effect to restricted stock awards, restricted stock units and stock options using the treasury stock method, unless the impact is anti-dilutive. Additionally, the Convertible Bond Debt is not considered a participating security and therefore not included in the computation of Basic net income per share for the three and nine months ended September 30, 2022 and 2021. The Company determined that it does not overcome the presumption of share settlement of outstanding debt and therefore the Company applied the if-converted method and included the potential shares to be issued upon conversion of Convertible Bond Debt in the calculation of Diluted net income per share for the three and nine months ended September 30, 2022 and 2021 as their effect was dilutive. Diluted net income per share for the three and nine months ended September 30, 2022 excluded 17,661 and 8,830 Restricted Stock Units (“RSUs”) related to EPS performance and TSR performance (defined below), respectively, as their effect was anti-dilutive. Additionally, diluted net income per share excluded 7,648 restricted shares for the three and nine months ended September 30, 2022 as their effect was anti-dilutive. Diluted net income per share for the three and nine months ended September 30, 2021 excluded 21,718 warrants and 28,046 restricted shares as their effect was anti-dilutive. The following table summarizes the calculation of basic and diluted net income per share:
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Stock Incentive Plans |
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Stock Incentive Plans | Stock Incentive Plans On December 15, 2016, the Company’s shareholders approved the 2016 Equity Compensation Plan (the “2016 Plan”) and the Company registered 764,087 shares of common stock adjusted for the Reverse Stock Split, which may be issued under the 2016 Plan. On June 7, 2019, the Company's shareholders approved an amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan by an additional 357,142 shares to a maximum of 1,121,229 shares of common stock. On June 14, 2022, the Company's shareholders approved a second amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan by an additional 300,000 shares to a maximum of 1,421,229 shares of common stock. Any director, officer, employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate in the 2016 Plan. The Company withheld shares related to restricted stock awards that vested in 2022 at the fair market value equivalent to the maximum statutory tax withholding obligation and remitted that amount in cash to the appropriate taxation authorities. On February 11, 2022, the Company granted 31,781 restricted shares as a Company-wide grant under the 2016 Plan. The aggregate fair value of the grant was $1.7 million based on the closing share price of $52.32 on February 11, 2022. The shares will vest in equal installments on January 2, 2023, January 2, 2024 and January 2, 2025. Additionally, on March 11, 2022, the Company granted 7,451 shares of fully vested common stock to the non-employee members of the Board of Directors. The aggregate fair value of the director grant was $0.5 million based on the closing share price of $65.88 on March 11, 2022. On April 5, 2022, the Company granted 7,468 restricted shares with 2-year cliff vesting to a member of its senior management team. The aggregate fair value of the grant was $0.5 million based on the closing share price of $63.24 on April 5, 2022. The amortization of the above grants was $0.3 million and $1.3 million for the three and nine months ended September 30, 2022, respectively, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations. On March 11, 2022, the Company granted 17,661 shares of time-based RSUs to certain members of its senior management team under the 2016 Plan. The units vest in equal installments on January 2, 2023, January 2, 2024 and January 2, 2025. The aggregate fair value of these units was $1.2 million based on the closing share price of $65.88 on March 11, 2022. The amortization of the above grant was $0.2 million and $0.5 million for the three and nine months ended September 30, 2022, respectively, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations. As discussed further below, on March 11, 2022, the Company granted performance-based RSUs to certain members of its senior management team under the 2016 Plan, which are contingent on certain performance criteria. The maximum number of performance-based RSUs that can be earned is 52,982. 17,661 target performance-based RSUs were granted based on earnings per share (“EPS performance”) for the performance period beginning January 1, 2022 and ending December 31, 2022 (with targets set forth during the three months ended March 31, 2022). The RSUs will vest in substantially equal installments (subject to achievement of performance criteria as of December 31, 2022) with the first installment vesting upon certification by the Compensation Committee and the second and third installments on January 2, 2024 and January 2, 2025, respectively. The total RSUs eligible to vest ranges from zero to 200% of the target number granted based on the EPS performance. The aggregate grant-date fair value of these RSUs was $1.2 million based on the closing share price of $65.88 on March 11, 2022 and assuming the target number is probable of vesting. The EPS performance is considered to be a performance condition under ASC 718, Share based payment awards, and therefore, the stock-based compensation expense is initially recorded based on the probable outcome that the performance condition will be achieved as of the grant date with subsequent adjustments to the probable outcome over time. The ultimate expense recognized is based on the actual performance outcome at the end of the performance period. As of September 30, 2022, the Company estimated that the target (100%) will be met and recorded $0.2 million and $0.4 million of stock-based compensation expense, which is included in General and administrative expenses in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022, respectively. 8,830 performance-based RSUs were granted based on relative total shareholder return (“TSR performance”) for the performance period beginning January 1, 2022 and ending December 31, 2022 (with targets set forth during the three months ended March 31, 2022). These market-based RSUs will vest in substantially equal installments (subject to achievement of performance criteria as of December 31, 2022) with the first installment vesting upon certification by the Compensation Committee and the second and third installments on January 2, 2024 and January 2, 2025, respectively. The total RSUs eligible to vest ranges from zero to 200% of the target number granted based on the TSR performance. All the vested TSR performance units are subject to a 1-year holding period after vesting. The TSR performance is based on the Company's total shareholder return compared to seven peer companies over the performance period. The TSR performance is calculated based on average daily closing stock price over a 20-trading-day period at each of the beginning and end of the performance period and is adjusted to reflect dividend payments by assuming additional shares are purchased with the dividend payments. The aggregate fair value of the TSR performance awards, which was calculated using a Monte Carlo simulation model, was $0.7 million. The assumptions used in the model were risk-free rate of return of 1.05% based on continuously compounded yield on zero-coupon treasury rates as of March 11, 2022; expected volatility of 54.74% based on 1-year historical daily volatility of the closing share prices for the Company; a dividend yield of 12.45%; and 11.41% discount applied for the 1-year holding period using the Finnerty model. Volatility for each of the peer companies as well as the correlation of returns between each of the companies was also determined as inputs into the Monte Carlo model. The Company recorded $0.1 million and $0.2 million of stock-based compensation expense, which is included in General and administrative expenses in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022. As of September 30, 2022 and December 31, 2021, stock awards, including RSUs, covering a total of 210,049 and 246,962 shares of the Company’s common stock, respectively, were outstanding under the 2016 Plan. The vesting terms are generally three years from the grant date, or as described above in the March 11, 2022 RSU and director stock grants or the April 5, 2022 stock grant. During the three months ended September 30, 2022, 24,369 restricted stock awards vested of which 10,034 were cancelled as a settlement for the liability relating to tax withholding. The Company is amortizing the grant date fair value of non-vested stock awards to stock-based compensation expense included in General and administrative expenses. As of December 31, 2021, 47,568 vested stock options were outstanding with exercise prices ranging from $32.97 to $38.92 per share. During the nine months ended September 30, 2022, all 47,568 stock options were exercised. In connection with the exercise, 8,077 shares of common stock were issued and 39,491 stock options were cancelled as a settlement for the liability relating to tax withholding as well as the exercise price owed to the Company. As of September 30, 2022 and December 31, 2021, there were no unvested options outstanding. Stock-based compensation expense for all stock awards, units and options included in General and administrative expenses:
The future compensation cost to be recognized for all the grants for the three months ending December 31, 2022, and the years ending December 31, 2023 and 2024 is expected to be $1.3 million, $2.7 million and $0.8 million, respectively.
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Cash, cash equivalents, and restricted cash |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents, and Restricted cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Condensed Consolidated Statements of Cash Flows:
*Amounts included in restricted cash posted to secure the letter of credit on our office leases and the cash required to be set aside by the Norwegian Bond Debt, which was repaid on October 18, 2021. Additionally, as of September 30, 2022, there was an amount paid to secure a bank guarantee related to a dispute with a vendor in the normal course of business included with the Restricted cash - noncurrent balance.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn October 27, 2022, the Company's Board of Directors declared a cash dividend of $1.80 per share to be paid on or about November 23, 2022 to shareholders of record at the close of business on November 15, 2022. The aggregate amount of the dividend is expected to be approximately $23.7 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made. |
Basis of Presentation and General Information (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on March 14, 2022 (the “Form 10-K”). |
Use of Estimates | The preparation of condensed consolidated 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 disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company are residual value of vessels, the useful lives of vessels, the value of stock-based compensation, estimated losses on our trade receivables, fair value of Convertible Bond Debt (as defined below) and its equity component, fair value of operating lease right-of-use assets and operating lease liabilities and the fair value of derivatives. Actual results could differ from those estimates. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Effective | Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU's guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, the entity will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. The Company adopted ASU 2020-06 as of January 1, 2022 under the modified retrospective approach. The Convertible Bond Debt (defined below) will no longer require bifurcation and separate accounting of the equity component. The resulting debt discount will no longer be amortized to interest expense over the life of the bond and thus an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit reflecting the cumulative impact of adoption. Additionally, a $20.7 million reduction to Additional paid-in capital was recorded to reverse the equity component and an offsetting $12.0 million was recorded within Convertible Bond Debt, net of debt discount and debt issuance costs as a reversal of the debt discount. Recently Issued Accounting Pronouncements Not Yet Effective The FASB has issued accounting standards that had not yet become effective as of September 30, 2022 and may impact the Company's condensed consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 addresses concerns about certain accounting consequences that could result from the anticipated transition away from the use of LIBOR and other interbank offered rates to alternative reference rates. ASU 2020-04 is elective and applies “to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.” ASU 2020-04 establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients. ASU 2020-04 is optional and effective for all entities as of March 12, 2020 and may be applied prospectively to contract modifications made on or before December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”), which clarifies certain provisions in Topic 848, if elected by an entity, to apply to derivative instruments that use interest rate for margining, discounting, or contract price alignment that is modified as a result of rate reference reform. The Company is currently evaluating the adoption of ASU 2020-04 on its debt under the Global Ultraco Debt Facility (as defined below) as it bears interest on outstanding borrowings at LIBOR plus a margin rate. Additionally, the Company is also evaluating the adoption of ASU 2021-01 on its interest rate swaps related to the Global Ultraco Debt Facility.
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Fair Value Measurements | Cash, cash equivalents and restricted cash—the carrying amounts reported in the Condensed Consolidated Balance Sheets for interest-bearing deposits approximate their fair value due to the short-term nature thereof. Debt—the carrying values approximate fair value for bonds issued under the Convertible Bond Debt, which is traded in the over-the-counter market. The carrying amount of our term loan borrowing under the Global Ultraco Debt Facility approximates its fair value, due to its variable interest rates. The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 non-derivatives include cash, money-market accounts, restricted cash accounts and collateral on derivatives. Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our debt balances under the Convertible Bond Debt and the Global Ultraco Debt Facility. Freight forward agreements, bunker swaps and interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. See Note 5, Derivative Instruments. Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions).
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Vessels (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of vessel and vessel improvements | Activity in Vessels and vessel improvements for the nine months ended September 30, 2022 is below:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
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Schedule Of Interest Expense | The following table summarizes the Company’s total interest expense:
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Schedule of Debt Maturities | The following table presents the scheduled maturities of principal amounts of our debt obligations as of September 30, 2022:
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Rate Swap Agreements | The following table summarizes the interest rate swaps in place as of September 30, 2022 and December 31, 2021:
The effect of the interest rate swaps on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 is below:
The following table shows our open positions on FFAs as of September 30, 2022:
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Schedule of Non-Designated Derivative Instruments Effect on Statement of Operations | The following table shows the interest rate swap assets and liabilities as of September 30, 2022 and December 31, 2021:
The effect of non-designated derivative instruments on the Condensed Consolidated Statements of Operations and Balance Sheets is as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | September 30, 2022
December 31, 2021
(1) Includes restricted cash (noncurrent) of $2.6 million at September 30, 2022 and $0.1 million at December 31, 2021. (2) Includes $10.8 million of unrealized mark-to-market gains on FFAs and $7.6 million of unrealized gains on our interest rate swaps as of September 30, 2022 and $4.7 million of unrealized mark-to-market gains on FFAs and bunker swaps as of December 31, 2021. (3) Includes $9.9 million and $3.1 million of unrealized gains on our interest rate swaps as of September 30, 2022 and December 31, 2021, respectively. (4) The fair value of the liabilities is based on the required repayment to the lenders if the debt was discharged in full on September 30, 2022 and December 31, 2021. (5) The fair value of the Convertible Bond Debt is based on the last trade on September 29, 2022 and December 16, 2021 on Bloomberg.com. (6) Includes $0.6 million of unrealized mark-to-market losses on bunker swaps as of September 30, 2022 and $3.4 million of unrealized mark-to-market losses on FFAs and $0.9 million of unrealized losses on our interest rate swaps as of December 31, 2021. (7) The outstanding debt balances represent the face value of the debt excluding debt discount and debt issuance costs.
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Leases (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities, Lease | Operating lease right-of-use assets and lease liabilities as of September 30, 2022 and December 31, 2021 are as follows:
|
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Charter Hire Expense | The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and nine months ended September 30, 2022 and 2021:
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Future Minimum Lease Payments | The table below provides the total amount of remaining lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of September 30, 2022:
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Revenue from Contract with Customer (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table shows the revenues earned from time charters and voyage charters for the three and nine months ended September 30, 2022 and 2021:
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Net income per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the calculation of basic and diluted net income per share:
|
Stock Incentive Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Noncash Compensation Expenses | Stock-based compensation expense for all stock awards, units and options included in General and administrative expenses:
|
Cash, cash equivalents, and restricted cash (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Condensed Consolidated Statements of Cash Flows:
*Amounts included in restricted cash posted to secure the letter of credit on our office leases and the cash required to be set aside by the Norwegian Bond Debt, which was repaid on October 18, 2021. Additionally, as of September 30, 2022, there was an amount paid to secure a bank guarantee related to a dispute with a vendor in the normal course of business included with the Restricted cash - noncurrent balance.
|
Vessels - Additional Information (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 08, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
vessel
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
vessel
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2018
USD ($)
vessel
|
|
Property, Plant and Equipment [Line Items] | ||||||
Number of vessels | vessel | 52 | 52 | ||||
Proceeds from sale of vessel | $ 14,944 | $ 9,159 | ||||
Asset acquisition, total consideration | $ 27,500 | |||||
Gain on sale of vessel | $ (9,336) | $ (3,962) | $ (9,336) | $ (3,962) | ||
Ballast Water Treatment System | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of vessels | vessel | 39 | |||||
Projected project costs | $ 500 | |||||
Number of vessels, installation complete | vessel | 32 | 32 | ||||
Transfer from advances paid for vessel purchases | $ 19,800 | |||||
Scrubbers and BWTS reclassified | $ 1,900 | |||||
Vessel Cardinal | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Proceeds from sale of vessel | $ 15,800 |
Vessels - Vessel and Vessel Improvements (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Movement in Property, Plant and Equipment [Roll Forward] | ||
Sale of vessel | $ (14,944) | $ (9,159) |
Vessels and Vessel Improvements | ||
Movement in Property, Plant and Equipment [Roll Forward] | ||
Vessels and vessel improvements, beginning balance | 908,076 | |
Purchase of vessels and vessel improvements | 703 | |
Sale of vessel | (5,592) | |
Scrubbers and BWTS | 8,709 | |
Depreciation expense | (35,349) | |
Vessels and vessel improvements, ending balance | $ 876,547 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 354,319 | |
Current portion of long-term debt | (49,800) | $ (49,800) |
Total long-term debt | 296,627 | 330,244 |
Convertible Debt | Convertible Bond Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 104,119 | 114,119 |
Debt discount and debt issuance costs | (694) | (13,165) |
Long-term debt, net of debt discount and debt issuance costs | 103,425 | 100,954 |
Term Loan | New Ultraco Debt Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 250,200 | 287,550 |
Debt discount and debt issuance costs | (7,198) | (8,460) |
Current portion of long-term debt | (49,800) | (49,800) |
Long-term debt, net of debt discount and debt issuance costs | $ 193,202 | $ 229,290 |
Debt - Share Lending Agreement (Details) - Affiliated Entity - Jefferies Capital Services LLC - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Jul. 29, 2019 |
|
Debt Instrument [Line Items] | ||
Commons stock available to affiliate (in shares) | 511,840 | 511,840 |
Outstanding loaned shares | $ 22,100 | |
Nominal fee per borrowed share | $ 30 | |
Shares subject to become issued and outstanding in case of restructuring proceedings (in shares) | 511,840 |
Debt - Schedule of Maturities of Principal Amounts of Debt Obligations (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Three months ending December 31, 2022 | $ 12,450 |
2023 | 49,800 |
2024 | 153,919 |
2026 | 49,800 |
2026 | 88,350 |
Long-term debt | 354,319 |
Convertible Bond Debt | |
Debt Instrument [Line Items] | |
Three months ending December 31, 2022 | 0 |
2023 | 0 |
2024 | 104,119 |
2026 | 0 |
2026 | 0 |
Long-term debt | 104,119 |
Global Ultraco Debt Facility | |
Debt Instrument [Line Items] | |
Three months ending December 31, 2022 | 12,450 |
2023 | 49,800 |
2024 | 49,800 |
2026 | 49,800 |
2026 | 88,350 |
Long-term debt | $ 250,200 |
Derivative Instruments - Summary of Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional Amount outstanding (in thousands) | $ 250,200 | $ 287,552 |
07 October 2021 | New Ultraco Debt Facility | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fixed interest rate | 0.83% | |
Notional Amount outstanding (in thousands) | $ 187,650 | 215,663 |
13 October 2021 | New Ultraco Debt Facility | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fixed interest rate | 0.94% | |
Notional Amount outstanding (in thousands) | $ 20,850 | 23,963 |
14 October 2021 | New Ultraco Debt Facility | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fixed interest rate | 0.93% | |
Notional Amount outstanding (in thousands) | $ 20,850 | 23,963 |
22 October 2021 | New Ultraco Debt Facility | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fixed interest rate | 1.06% | |
Notional Amount outstanding (in thousands) | $ 20,850 | $ 23,963 |
Derivative Instruments - Effect of Derivative Instruments on the Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Interest Rate Swap | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest expense | $ (619) | $ 151 | $ (304) | $ 447 |
Derivative Instruments - Interest Rate Swap Asset and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivative assets - current | $ 18,353 | $ 4,669 |
Fair value of derivative assets - noncurrent | 9,873 | 3,112 |
Fair value of derivative liabilities - current | 611 | 4,253 |
Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivative assets - current | 7,583 | 0 |
Fair value of derivative assets - noncurrent | 9,873 | 3,112 |
Fair value of derivative liabilities - current | $ 0 | $ 885 |
Derivative Instruments - Open Positions on Forward Freight Agreements (Details) - Forecast - Forward Freight Agreement - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2023 |
|
Short | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Average FFA Contract Price | $ 21,981 | $ 14,525 |
Number of Days Hedged | 2010 days | 720 days |
Long | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Average FFA Contract Price | $ 16,461 | $ 14,308 |
Number of Days Hedged | 1335 days | 855 days |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Loss Contingencies [Line Items] | ||||
Other operating expense | $ 2,469 | $ 792 | $ 2,643 | $ 2,312 |
U.S. Government Vessel Investigation | ||||
Loss Contingencies [Line Items] | ||||
Other operating expense | $ 300 | $ 2,300 |
Leases - Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 34,368 | $ 17,017 |
Lease liabilities - short term | 30,742 | 15,728 |
Lease liabilities - long term | $ 3,626 | $ 1,282 |
Discount rate | 5.90% | 1.70% |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Discount rate | 1.33% | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Discount rate | 8.97% | |
Chartered-in contracts greater than 12 months | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 30,281 | $ 15,039 |
Lease liabilities - short term | 29,989 | 15,039 |
Lease liabilities - long term | 293 | 0 |
Office leases | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | 4,087 | 1,978 |
Lease liabilities - short term | 753 | 689 |
Lease liabilities - long term | $ 3,333 | $ 1,282 |
Leases - Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Lessee, Lease, Description [Line Items] | ||||
Sublease Income | $ 8,402 | $ 7,550 | $ 25,072 | $ 14,303 |
Charter hire expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Short-term lease, cost | 11,759 | 5,857 | 43,317 | 13,512 |
Operating lease, expense | 8,013 | 4,867 | 20,451 | 11,862 |
Total charter hire expenses | 19,772 | 10,724 | 63,768 | 25,374 |
General and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, expense | $ 216 | $ 189 | $ 625 | $ 465 |
Leases - Lease Expense Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Cash paid on operating leases | $ 8,200 | $ 5,400 | $ 21,100 | $ 12,200 |
Weighted average remaining lease term (in months) | 14 years 9 months 18 days | 14 years 9 months 18 days | ||
Increase to lease liability and the corresponding right-of-use asset | $ 38,956 | $ 22,499 |
Revenue - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | |||||
Standard payment terms, percentage | 95.00% | 95.00% | |||
Standard payment terms (in days) | 3 days | 3 days | |||
Revenues, net | $ 185,313 | $ 183,393 | $ 568,406 | $ 409,816 | |
Deferred costs | 700 | 700 | $ 500 | ||
Voyage In Progress | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues, net | $ 7,800 | $ 8,600 | $ 26,500 | $ 16,800 |
Revenue from Contract with Customer (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | $ 185,313 | $ 183,393 | $ 568,406 | $ 409,816 |
Time charters | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | 95,132 | 91,653 | 274,755 | 180,386 |
Voyage charters | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | $ 90,181 | $ 91,740 | $ 293,651 | $ 229,430 |
Net income per Common Share - Additional Information (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 21,718 | 21,718 | ||
Restricted Stock, EPS Performance | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 17,661 | 28,046 | 28,046 | |
Restricted Stock, TSR Performance | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 8,830 | |||
Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 7,648 |
Net income per Common Share - Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||||||
Net income | $ 77,217 | $ 94,453 | $ 53,073 | $ 78,341 | $ 9,225 | $ 9,849 | $ 224,743 | $ 97,416 |
Weighted Average Shares - Basic (in shares) | 12,993,450 | 12,802,401 | 12,985,329 | 12,237,288 | ||||
Dilutive effect of stock options, shares issuable under Convertible Bond Debt and restricted stock awards (in shares) | 3,208,402 | 3,133,973 | 3,233,935 | 3,117,193 | ||||
Weighted Average Shares - Diluted (in shares) | 16,201,852 | 15,936,374 | 16,219,264 | 15,354,481 | ||||
Basic net income (in usd per share) | $ 5.94 | $ 6.12 | $ 17.31 | $ 7.96 | ||||
Diluted net income (in usd per share) | $ 4.77 | $ 4.92 | $ 13.86 | $ 6.34 |
Stock Incentive Plans - Schedule of Noncash Compensation Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 1,449 | $ 777 | $ 4,542 | $ 2,235 |
Cash, cash equivalents, and restricted cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 195,030 | $ 86,147 | $ 100,012 | $ 69,928 |
Restricted cash - current | 0 | 0 | 25,558 | 18,846 |
Restricted cash - noncurrent | 2,575 | 75 | 75 | 75 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 197,605 | $ 86,222 | $ 125,645 | $ 88,849 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Oct. 27, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Subsequent Event [Line Items] | ||||
Cash dividend declared (in dollars per share) | $ 2.20 | $ 2.00 | $ 2.05 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Cash dividend declared (in dollars per share) | $ 1.80 | |||
Aggregate amount of dividend | $ 23.7 |
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