TOP Ships (TOPS) - 2023 Q1 - Quarterly Report

Executive Summary & Company Highlights TOP Ships Inc. achieved record net income in 2022, demonstrating significant financial growth and implementing shareholder-friendly measures - TOP Ships Inc. announced record net income for the year ended December 31, 2022, marking the highest reported net income since 2008 and a 120% increase from 2021[1][2] Key Financial Highlights (Year Ended December 31, 2022) | Metric | Amount (Millions USD) | Change from 2021 | | :-------------------------- | :-------------------- | :--------------- | | Total Revenues | $80.7 | +43% | | Net Income | $18.9 | +120% | | EBITDA | $46.6 | +100% | | Total Assets | $469.3 | +42% | | Total Cash and cash equivalents (including Restricted Cash) | $24.5 | +285% | - The Company adopted shareholder-friendly measures for the period from the release date to December 31, 2023, including[2][6] * No new equity offerings (public or private) * No reverse stock splits, except if deemed advisable by the Board for Nasdaq listing compliance * No bonuses to executive management * Neither the CEO nor his affiliates will sell any common shares - Mr. Evangelos J. Pistiolis, President, CEO, and Director, stated that the current trading price of common shares does not reflect the Company's intrinsic value and that the announced actions will benefit all shareholders[2] About the Company TOP Ships Inc. operates internationally as an owner and operator of modern, fuel-efficient "ECO" tanker vessels - TOP Ships Inc. is an international owner and operator of modern, fuel-efficient "ECO" tanker vessels[1][3] Forward-Looking Statements The press release includes forward-looking statements that are inherently subject to significant uncertainties and contingencies - The press release contains forward-looking statements, protected by the Private Securities Litigation Reform Act of 1995, which include plans, objectives, goals, strategies, future events, or performance[4][5] - These statements are based on various assumptions, which are inherently subject to significant uncertainties and contingencies beyond the Company's control, meaning that actual results may differ from expectations, beliefs, or projections[5][7] Financial Statements The company's financial statements reveal significant growth in net income and total assets, despite a net loss attributable to common shareholders due to preferred dividends Consolidated Statements of Comprehensive (Loss)/Income TOP Ships Inc. reported a significant increase in net income to $18.9 million in 2022 from $8.6 million in 2021, driven by higher revenues and improved operating income. However, substantial preferred share dividends and deemed dividend equivalents resulted in a net loss attributable to common shareholders Consolidated Statements of Comprehensive (Loss)/Income (in thousands of U.S. Dollars) | Metric | 2020 | 2021 | 2022 | YoY Change (2021-2022) | | :------------------------------------------------ | :------- | :------- | :------- | :--------------------- | | Revenues | 60,222 | 56,367 | 80,656 | +43.1% | | Operating (loss)/income | (1,795) | 14,801 | 32,619 | +120.4% | | Net (loss)/income and comprehensive (loss)/income | (22,818) | 8,616 | 18,948 | +120.0% | | Net (loss) / income attributable to common shareholders | (28,780) | 5,396 | (9,187) | -270.3% | | (Loss) / Earnings per common share, basic and diluted | (24.48) | 2.71 | (3.03) | -211.8% | - The increase in net income was primarily driven by a 43.1% increase in revenues and a 120.4% increase in operating income year-over-year[8] - Despite the strong net income, significant preferred shares dividend ($12.39 million) and deemed dividend equivalents ($14.40 million) led to a net loss attributable to common shareholders of $9,187 thousand in 2022[8][9] Consolidated Condensed Balance Sheets The Company's total assets increased significantly by 41.9% to $469.3 million in 2022, primarily due to a substantial increase in vessels, net. This asset growth was supported by increases in debt and stockholders' equity Consolidated Condensed Balance Sheets (in thousands of U.S. Dollars) | Metric | December 31, 2021 | December 31, 2022 | Change | | :------------------------------------------ | :------------------ | :------------------ | :------- | | Cash and cash equivalents | 2,370 | 20,544 | +766.8% | | Vessels, net | 156,585 | 389,059 | +148.5% | | Total Assets | 330,788 | 469,337 | +41.9% | | Debt | 150,570 | 233,714 | +55.2% | | Total Liabilities | 221,424 | 272,314 | +23.0% | | Stockholders' Equity | 93,222 | 110,672 | +18.7% | - The substantial increase in 'Vessels, net' by 148.5% from $156,585 thousand to $389,059 thousand was the primary driver for the overall asset growth[10] - Cash and cash equivalents saw a significant increase of 766.8% from $2,370 thousand in 2021 to $20,544 thousand in 2022[10] Non-GAAP Financial Measures The company utilizes non-GAAP financial measures like EBITDA to provide additional insights into operational performance, complementing U.S. GAAP metrics Definition and Purpose of EBITDA EBITDA is a non-U.S. GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization. It is used by management and investors to assess financial and operating performance by enhancing comparability across periods and companies, but it is not a substitute for U.S. GAAP measures - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, and is considered a Non-US GAAP measure[11] - Management and external users utilize EBITDA to assess financial and operating performance, as it increases comparability by excluding disparate effects of financing methods, capital structure, and historical cost basis[12][13] - EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered an alternative to net income, operating income, or cash flow from operating activities[14] Reconciliation of Net (Loss)/Income to EBITDA The reconciliation shows that EBITDA for 2022 was $46.6 million, a 100% increase from 2021, primarily driven by the higher net income and the add-back of vessel depreciation and interest and finance costs Reconciliation of Net (Loss)/Income to EBITDA (in thousands of U.S. Dollars) | Metric | 2020 | 2021 | 2022 | YoY Change (2021-2022) | | :-------------------------- | :------- | :------- | :------- | :--------------------- | | Net (loss)/income | (22,818) | 8,616 | 18,948 | +120.0% | | Add: Vessel depreciation | 13,174 | 7,670 | 13,289 | +73.3% | | Add: Interest and finance costs | 20,956 | 6,998 | 14,365 | +105.3% | | Less: Interest income | (34) | - | (48) | N/A | | EBITDA | 11,278 | 23,284 | 46,554 | +100.0% | - EBITDA doubled year-over-year from $23,284 thousand in 2021 to $46,554 thousand in 2022, reflecting strong operational performance before non-operating and non-cash items[15]