TOP Ships (TOPS) - 2022 Q1 - Quarterly Report

Full Year 2021 Financial and Operational Highlights TOP Ships Inc. achieved record net income and strong adjusted EBITDA in FY2021, alongside significant operational advancements and a robust charter backlog Financial Performance Summary (FY2021) TOP Ships Inc. achieved its highest net income since 2008 in FY2021, alongside strong adjusted EBITDA and increased total assets - Record net income for the year ended December 31, 2021, the highest since 2008[1] Financial Metrics (in millions of U.S. Dollars, except EPS) | Metric | Value | | :----------------- | :---------- | | Total Revenues | $56.4 million | | Net Income | $8.6 million | | Earnings per share | $0.14 | | Adjusted EBITDA | $35.2 million | | Total Assets | $330.8 million | Operational Developments The company concluded its newbuilding program, successfully sold the M/T Eco Los Angeles and repaid associated debt, and took delivery of the M/T Eco Oceano Ca, which immediately commenced a long-term time charter - Conclusion of the newbuilding program[1] - Sale of M/T Eco Los Angeles to an unaffiliated party; net proceeds used to repay $9 million of funds drawn under an unsecured credit facility[2] - Delivery of the 157,000 dwt newbuilding Suezmax tanker M/T Eco Oceano Ca, followed by a sale and leaseback for $48.2 million and commencement of a fifteen-year time charter employment[3] Fleet Status and Charter Backlog As of March 14, 2022, TOP Ships Inc. reported a substantial fixed revenue backlog and high charter coverage for the upcoming years, ensuring revenue visibility - Fixed revenue backlog of approximately $361 million[1] Time Charter Coverage | Year | Time Charter Coverage | | :--- | :-------------------- | | 2022 | 100% | | 2023 | 100% | | 2024 | 76% | | 2025 | 17% | | 2026+ | 10% | About TOP Ships Inc. TOP Ships Inc. is an international owner and operator of modern, fuel-efficient 'ECO' tanker vessels, with a specified number of outstanding preferred shares Company Profile TOP Ships Inc. is an international ship-owning company specializing in modern, fuel-efficient 'ECO' tanker vessels - TOP Ships Inc. is an international owner and operator of modern, fuel efficient 'ECO' tanker vessels[1][5] Outstanding Shares As of the earnings release date, the company had 4,763,000 Series F Preferred Shares issued and outstanding - 4,763,000 Series F Preferred Shares issued and outstanding as of the earnings release date[4] Unaudited Consolidated Financial Statements The unaudited consolidated financial statements present the company's comprehensive income, balance sheet, and cash flow, highlighting a significant financial turnaround in 2021 Consolidated Statements of Comprehensive (Loss)/Income The company demonstrated a significant financial turnaround in 2021, moving from net losses in prior years to a net income, primarily driven by improved operating income and substantially reduced interest and finance costs Net (Loss) / Income (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2019 | (14,773) | | 2020 | (22,818) | | 2021 | 8,616 | Revenues (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2019 | 66,088 | | 2020 | 60,222 | | 2021 | 56,367 | Operating Income/(Loss) (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2019 | 3,936 | | 2020 | (1,795) | | 2021 | 14,801 | Interest and Finance Costs (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2019 | (18,077) | | 2020 | (20,956) | | 2021 | (6,998) | Consolidated Balance Sheets The balance sheet shows an increase in total assets in 2021, primarily driven by growth in vessels held for sale and vessels, net, while total liabilities also increased significantly, largely due to debt associated with vessels held for sale and an overall rise in current liabilities Total Assets (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2020 | 293,032 | | 2021 | 330,788 | Total Liabilities (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2020 | 158,814 | | 2021 | 221,424 | Vessels Held for Sale (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2020 | 24,340 | | 2021 | 71,636 | Debt Related to Vessels Held for Sale (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2020 | - | | 2021 | 53,202 | Total Stockholders' Equity (in thousands of U.S. Dollars) | Year | Amount | | :--- | :------- | | 2020 | 120,701 | | 2021 | 93,222 | Non-US GAAP Measures This section defines and reconciles Adjusted EBITDA, a non-U.S. GAAP financial measure used to evaluate the company's financial and operating performance Adjusted EBITDA Definition and Purpose Adjusted EBITDA is a non-U.S. GAAP financial measure utilized by management and external users to evaluate the company's financial and operating performance, aiming to enhance comparability across periods by excluding certain non-core or non-cash items - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, other operating loss, operating lease expenses, vessel impairments, gains on sale of vessels and gains/losses on derivative financial instruments[14][15] - It is used as a supplemental financial measure to assess financial and operating performance and increase comparability from period to period by excluding items affected by financing methods, capital structure, and historical cost basis[16] - This non-U.S. GAAP measure should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP[17] Adjusted EBITDA Reconciliation The provided reconciliation details the adjustments made to Net (loss)/income to arrive at Adjusted EBITDA for the years 2019, 2020, and 2021, offering transparency into the calculation of this non-GAAP metric Adjusted EBITDA (in thousands of U.S. Dollars) | Year | Adjusted EBITDA | | :--- | :-------------- | | 2019 | 36,470 | | 2020 | 30,002 | | 2021 | 35,218 | - Key adjustments include adding back operating lease expense, vessel depreciation, impairment on vessel, interest and finance costs, and adjusting for derivative financial instruments and other operating items[18] Forward-Looking Statements This section provides a safe harbor statement for forward-looking information, outlining the inherent uncertainties and risks associated with such statements Safe Harbor Statement This section includes a safe harbor statement, in accordance with the Private Securities Litigation Reform Act of 1995, to protect forward-looking statements, emphasizing that such statements are based on assumptions and are inherently subject to significant uncertainties and contingencies that may cause actual results to differ - Matters discussed may constitute forward-looking statements, protected by the Private Securities Litigation Reform Act of 1995[8] - Forward-looking statements are identified by words such as 'believe,' 'anticipate,' 'intends,' 'estimate,' 'forecast,' 'project,' 'plan,' 'potential,' 'may,' 'should,' 'expect,' 'pending' and similar expressions[9] - These statements are based on assumptions that are inherently subject to significant uncertainties and contingencies, and there is no assurance that expectations, beliefs, or projections will be achieved[9]