Dorian LPG(LPG) - 2020 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Shareholders' Equity, and Cash Flows, with detailed notes on accounting policies, debt, and revenue Unaudited Condensed Consolidated Balance Sheets | Balance Sheet Data | As of Sep 30, 2019 | As of Mar 31, 2019 | | :--- | :--- | :--- | | Total Assets | $1,642,210,973 | $1,625,370,017 | | Total Current Assets | $124,470,888 | $82,589,069 | | Vessels, net | $1,453,476,869 | $1,478,520,314 | | Total Liabilities | $687,839,029 | $712,687,459 | | Current portion of long-term debt | $63,968,414 | $63,968,414 | | Long-term debt (net) | $601,577,085 | $632,122,372 | | Total Shareholders' Equity | $954,371,944 | $912,682,558 | Unaudited Condensed Consolidated Statements of Operations | Statement of Operations | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Total Revenues | $91,624,875 | $40,807,542 | | Total Expenses | $42,672,532 | $41,710,876 | | Operating Income/(Loss) | $49,266,427 | $(318,702) | | Net Income/(Loss) | $40,711,896 | $(8,177,120) | | Diluted EPS | $0.74 | $(0.15) | | Statement of Operations | Six Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Total Revenues | $152,790,421 | $68,451,824 | | Total Expenses | $84,188,855 | $83,164,848 | | Operating Income/(Loss) | $69,538,933 | $(13,483,875) | | Net Income/(Loss) | $46,786,955 | $(28,773,678) | | Diluted EPS | $0.85 | $(0.53) | Unaudited Condensed Consolidated Statements of Cash Flows | Cash Flow Data (Six Months Ended) | Sep 30, 2019 | Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $60,804,329 | $(9,248,743) | | Net cash used in investing activities | $(4,276,995) | $(1,159,583) | | Net cash used in financing activities | $(39,244,113) | $(34,950,168) | | Net increase/(decrease) in cash | $17,196,048 | $(45,488,203) | Notes to Unaudited Condensed Consolidated Financial Statements - As of September 30, 2019, the company's fleet comprised 23 VLGCs, including 19 ECO-VLGCs, with three vessels equipped with scrubbers and nine more planned[27] - The company holds a 50% interest in Helios LPG Pool LLC, a joint venture operating 28 VLGCs, including 19 from Dorian's fleet as of September 30, 2019[47][48] Debt Obligations | Debt Obligations | Sep 30, 2019 | Mar 31, 2019 | | :--- | :--- | :--- | | Total 2015 Debt Facility | $471,603,308 | $496,620,495 | | Total Japanese Financings | $206,509,102 | $213,476,121 | | Total debt obligations | $678,112,410 | $710,096,616 | - A $50 million stock repurchase program was authorized on August 5, 2019, with approximately $6.2 million in shares repurchased by September 30, 2019[64] Future Commitments (as of Sep 30, 2019) | Future Commitments (as of Sep 30, 2019) | Amount | | :--- | :--- | | Scrubber Purchases (less than one year) | $8,810,894 | | Time Charter-in (total) | $11,825,000 | | Fixed Time Charter-out Receipts (total) | $68,141,365 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes improved financial results to significantly higher Time Charter Equivalent (TCE) rates, driven by strong spot market conditions and lower bunker prices, leading to a net income turnaround Results of Operations - For Q3 2019, revenues increased 124.5% to $91.6 million, driven by average TCE rates rising from $20,973 to $47,623 due to higher spot rates and lower bunker prices[107] - For the six months ended September 30, 2019, revenues grew 123.2% to $152.8 million, attributed to higher average TCE rates ($38,321 vs. $18,923) and increased fleet utilization (95.7% vs. 89.7%)[115] - Vessel operating expenses per day remained flat at $8,594 for Q3, but decreased to $8,324 for the six-month period due to lower repairs and maintenance costs[109][117] - Interest and finance costs decreased across both periods, reflecting a lower average indebtedness balance[113][120] Liquidity and Capital Resources - As of September 30, 2019, the company held $46.4 million in cash and $37.2 million in restricted cash, with $60.8 million generated from operations as the primary capital source[122][124] - A $50 million stock repurchase program was authorized on August 5, 2019, with $6.7 million in shares repurchased by October 25, 2019, leaving $43.3 million remaining[126] - Future liquidity needs encompass operating expenses, debt repayments, and capital expenditures for scrubbers and ballast water management systems, including $8.8 million in scrubber purchase commitments as of September 30, 2019[127][137] Cash Flow Summary (Six Months Ended) | Cash Flow Summary (Six Months Ended) | 2019 | 2018 | | :--- | :--- | :--- | | Net cash from operating activities | $60.8M | $(9.2M) | | Net cash used in investing activities | $(4.3M) | $(1.2M) | | Net cash used in financing activities | $(39.2M) | $(35.0M) | Critical Accounting Policies and Estimates - The company reviews vessels for impairment, and despite appraisals indicating potential impairment on fourteen VLGCs, a recoverability test concluded no impairment charge was necessary as of September 30, 2019[141][143][145] - A sensitivity analysis indicates a 30% reduction in 10-year historical average spot market TCE rates would not trigger impairment, while a 40% reduction would trigger approximately $16.4 million impairment on thirteen VLGCs[146] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the company's market risk exposure, primarily interest rate risk from variable-rate debt, mitigated through interest rate swap agreements - The company faces interest rate risk from its LIBOR-tied 2015 Debt Facility; a 20 basis point LIBOR change would impact unhedged debt interest expense by approximately $0.1 million over 12 months[149] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[150] - No material changes in internal control over financial reporting occurred during the quarter[152] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any material legal proceedings or claims requiring disclosure or provision in its financial statements - The company is not aware of any reasonably possible or probable claims requiring disclosure or provision in the financial statements[154] Item 1A. Risk Factors This section updates risk factors, highlighting global risks from international operations, including political conflicts, terrorism, and vessel attacks in the Middle East that could disrupt shipping - International operations expose the company to global risks, including political conflicts, terrorism, and recent vessel attacks in the Middle East, potentially disrupting shipping routes and adversely affecting operations[156] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's Q3 2019 equity security repurchases under a new $50 million share repurchase program authorized on August 5, 2019 Equity Securities Repurchased (Q3 2019) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Aug 1-31, 2019 | 389,152 | $10.27 | 372,619 | | Sep 1-30, 2019 | 213,768 | $10.83 | 213,768 | | Total for Q3 | 602,920 | $10.47 (approx.) | 586,387 | Item 6. Exhibits This section indexes exhibits filed with the Form 10-Q, including an amendment to the 2015 facility agreement and CEO/CFO Sarbanes-Oxley certifications - Exhibits include Amendment No. 3 to the 2015 facility agreement, CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and XBRL interactive data files[163]