United Maritime (USEA) - 2023 Q1 - Quarterly Report

Q1 2023 Financial Results United Maritime Corporation reported a net loss of $4.9 million for Q1 2023, alongside negative Adjusted EBITDA, while also announcing a dividend and significant fleet expansion plans Financial Highlights For the first quarter of 2023, United Maritime Corporation reported net revenues of $2.8 million and a net loss of $4.9 million. The company's Adjusted EBITDA was negative at $1.5 million, with a Time Charter Equivalent (TCE) rate of $10,294 per day. Despite the loss, the company declared a quarterly cash dividend of $0.075 per share and highlighted agreements to acquire six new vessels Q1 2023 Key Financial Metrics | Metric | Value (USD) | | :--- | :--- | | Net Revenues | $2.8 million | | Net Loss | $4.9 million | | Adjusted Net Loss | $3.7 million | | Negative Adjusted EBITDA | $1.5 million | | Loss Per Share (basic & diluted) | $0.64 | | Adjusted Loss Per Share | $0.48 | | TCE Rate | $10,294 per day | Balance Sheet Position as of March 31, 2023 | Metric | Value (USD) | | :--- | :--- | | Cash and cash-equivalents | $20.0 million | | Shareholders' equity | $61.9 million | | Long-term debt, lease liability & other financial liabilities | $69.5 million | | Book value of fleet | $117.0 million | - The company declared a quarterly dividend of $0.075 per share for Q1 2023, bringing total declared dividends to $1.15 per share since November 2022[2][7] - United entered into agreements to acquire six vessels for a total of $126 million, consisting of two Capesize, two Kamsarmax, and two Panamax vessels[7] Management Commentary and Outlook Management addressed Q1 performance, highlighted strategic fleet expansion and shareholder returns, and provided optimistic Q2 TCE guidance reflecting significant improvement CEO Statement Chairman & CEO Stamatis Tsantanis acknowledged that Q1 2023 operating results were impacted by a reduced fleet size following profitable tanker sales and a vessel drydocking. He emphasized the company's swift execution of a fleet expansion strategy, acquiring six dry bulk vessels for approximately $126 million without shareholder dilution. He expressed strong optimism for the future, citing favorable dry bulk market fundamentals and a significant projected increase in Q2 TCE rates - Q1 2023 operating results, with a TCE of $10,294, were affected by a reduced average fleet size of less than 3 ships due to profitable tanker sales in late 2022 and one tanker being in drydock[5] - The company swiftly executed a fleet regrowth plan, acquiring six dry bulk vessels for approximately $126 million, funded without diluting shareholders[5] - The company has returned $14.7 million to shareholders in the past nine months through $8.7 million in cash dividends and $6 million in share buybacks, representing 62% of its market cap as of May 16, 2023[10] - Looking forward, the company will operate a fleet of seven dry bulk vessels and one tanker with moderate leverage, focusing on further growth and shareholder rewards[9] Q2 2023 Outlook For the second quarter to date, United has secured coverage for 71% of its ownership days at an average TCE rate of $18,856 per day. The company estimates the full quarter's TCE to average approximately $18,000, which is a 75% improvement over Q1, on a fleet that will be double in size and operating days - As of the report date, 71% of Q2 ownership days are covered at an average TCE of $18,856 per day[8] - The estimated daily net TCE for Q2 is expected to average approximately $18,000, a 75% increase over Q1, with a fleet double in size and operating days[8] Fleet Status The company's current operating fleet comprises seven vessels with 877,320 DWT, with an additional Panamax vessel expected to expand the fleet to eight Current and Future Fleet Composition As of the report, United's operating fleet consists of seven vessels with a total capacity of 877,320 DWT and an average age of 15.2 years. The fleet includes Capesize, Kamsarmax, and Panamax dry bulk vessels, plus one LR2 tanker. An additional Panamax vessel, M/V Synthesea, is expected to be delivered between July and October 2023, expanding the fleet to eight vessels Current Company Fleet | Vessel Name | Sector | Capacity (DWT) | Year Built | | :--- | :--- | :--- | :--- | | Gloriuship | Dry Bulk / Capesize | 171,314 | 2004 | | Goodship | Dry Bulk / Capesize | 177,536 | 2005 | | Tradership | Dry Bulk / Capesize | 176,925 | 2006 | | Chrisea | Dry Bulk / Panamax | 78,173 | 2013 | | Oasea | Dry Bulk / Kamsarmax | 82,217 | 2010 | | Cretansea | Dry Bulk / Kamsarmax | 81,508 | 2009 | | Epanastasea | Tanker / LR2 | 109,647 | 2008 | | Total/Average | | 877,320 | 15.2 years | - The Panamax vessel M/V Synthesea (78,020 DWT, built 2015) is expected to be delivered between July and October 2023 under a 12-month bareboat charter with a purchase option[12] Financial Performance Analysis Detailed Q1 2023 operational metrics, including 80.3% fleet utilization and $10,294 TCE, are presented alongside non-GAAP reconciliations and Q2 TCE guidance Q1 2023 Operational and Financial Metrics In Q1 2023, the company achieved a fleet utilization of 80.3% across 305 ownership days. The Time Charter Equivalent (TCE) rate was $10,294 per day, derived from $2.5 million in TCE revenues over 245 operating days. Daily vessel operating expenses averaged $7,764 Q1 2023 Fleet Data | Metric | Value | | :--- | :--- | | Ownership days | 305 | | Operating days | 245 | | Fleet utilization | 80.3% | | TCE rate | $10,294 | | Daily Vessel Operating Expenses | $7,764 | TCE Rate Reconciliation (Q1 2023) | Item | Amount (in thousands USD) | | :--- | :--- | | Vessel revenue, net | 2,821 | | Less: Voyage expenses | 299 | | Time charter equivalent revenues | 2,522 | Non-GAAP Reconciliations The company provided reconciliations for non-GAAP measures. The Q1 2023 net loss of $4.9 million was reconciled to an Adjusted EBITDA of -$1.5 million and an Adjusted Net Loss of $3.7 million. The primary adjustment was for $1.2 million in stock-based compensation. Net interest and finance costs of $970k were reconciled to cash interest and finance costs of $796k Net Loss to Adjusted EBITDA Reconciliation (Q1 2023) | Item | Amount (in thousands USD) | | :--- | :--- | | Net loss | (4,887) | | Add: Interest and finance costs, net | 970 | | Add: Depreciation and amortization | 1,226 | | EBITDA | (2,691) | | Add: Stock based compensation | 1,218 | | Adjusted EBITDA | (1,473) | Net Loss to Adjusted Net Loss Reconciliation (Q1 2023) | Item | Amount (in thousands USD) | | :--- | :--- | | Net loss | (4,887) | | Add: Stock based compensation | 1,218 | | Adjusted net loss | (3,669) | Interest and Finance Costs Reconciliation (Q1 2023) | Item | Amount (in thousands USD) | | :--- | :--- | | Interest and finance costs, net | (970) | | Add: Amortization of deferred finance charges | 174 | | Cash interest and finance costs | (796) | Q2 2023 TCE Guidance United Maritime provides detailed guidance for its Q2 2023 Time Charter Equivalent (TCE) rate. Approximately 71% of operating days are already fixed at an average TCE of $18,856. Based on current FFA rates for the remaining days, the company projects a blended TCE for the entire quarter of approximately $17,923 Q2 2023 TCE Guidance Breakdown | Charter Type | Operating Days | TCE (USD) | | :--- | :--- | :--- | | TCE - fixed rate (index-linked conversion) | 182 | 16,115.45 | | TCE - fixed rate | 87 | 38,284.78 | | TCE – index-linked unhedged (projected) | 336 | 13,617.62 | | Total / Average | 605 | 17,922.61 | - The guidance assumes that for unhedged index-linked days, the TCE will equal the average Forward Freight Agreement (FFA) rate of $16,376 per day as of May 12, 2023[23] Recent Corporate Developments Recent corporate activities include the declaration of Q1 2023 dividends, updates on share capital, and strategic vessel acquisitions supported by new financing facilities Dividends and Share Capital The company maintained its shareholder return policy by paying a Q4 2022 dividend of $0.075 per share in April 2023 and declaring an identical dividend for Q1 2023, payable in July 2023. As of May 17, 2023, the company had 8,959,443 common shares outstanding, reflecting shares issued from warrant exercises - A cash dividend of $0.075 per share for Q1 2023 was declared, payable on or about July 6, 2023, to shareholders of record as of June 22, 2023[24] - As of May 17, 2023, the Company has 8,959,443 common shares issued and outstanding, which includes 1,037,230 shares issued from warrant exercises for proceeds of $2.7 million[33] Vessel Transactions and Financing During Q1 and early Q2 2023, United significantly expanded its dry bulk fleet by taking delivery of four vessels (two Capesize, two Kamsarmax) and securing two Panamax vessels via bareboat charters with purchase options. To support this expansion, the company entered into a $24.5 million sale-and-leaseback facility for two of the newly acquired Kamsarmax vessels. Additionally, the company's tanker, M/T Epanastasea, completed its dry-docking and is now being considered for sale - Took delivery of two Capesize vessels, M/V Goodship and M/V Tradership, in February 2023 for an aggregate price of $36.25 million[25] - Took delivery of two Kamsarmax vessels, M/V Oasea (March 2023) and M/V Cretansea (April 2023), for a combined price of $39.2 million[27][28] - Entered into bareboat charter agreements with purchase options for two Panamax vessels, M/V Chrisea and M/V Synthesea[29][30] - Secured a $24.5 million sale-and-leaseback facility to finance the acquisition of M/V Oasea and M/V Cretansea, with an interest rate of 4.25% plus 3-month Term SOFR[32] - The tanker M/T Epanastasea completed its dry-docking and is currently being considered for sale, with the company in advanced discussions with prospective buyers[31] Consolidated Financial Statements The unaudited condensed consolidated financial statements for Q1 2023 present the balance sheet, statements of operations, and cash flow data Unaudited Condensed Consolidated Balance Sheets As of March 31, 2023, United Maritime reported total assets of $142.4 million, a notable increase from $125.7 million at year-end 2022, primarily due to vessel acquisitions. Total liabilities increased to $80.4 million from $61.1 million, while stockholders' equity slightly decreased to $61.9 million. Cash and cash equivalents stood at $20.0 million, down from $69.9 million at the end of 2022 Condensed Consolidated Balance Sheets (in thousands USD) | | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | 20,001 | 69,932 | | Vessels and right-of-use assets, net | 117,028 | 50,200 | | TOTAL ASSETS | 142,361 | 125,655 | | LIABILITIES & EQUITY | | | | Long-term debt, lease liability, etc. | 69,455 | 42,606 | | Other liabilities | 10,963 | 18,481 | | Stockholders' equity | 61,943 | 64,568 | | TOTAL LIABILITIES & EQUITY | 142,361 | 125,655 | Unaudited Condensed Consolidated Statements of Operations For the three-month period ending March 31, 2023, the company generated $2.8 million in vessel revenue. After accounting for all expenses, including operating, administrative, and interest costs, the company recorded a net loss of $4.9 million, or a loss of $0.64 per basic and diluted share Condensed Consolidated Statements of Operations (Q1 2023, in thousands USD) | Item | Amount | | :--- | :--- | | Vessel revenue, net | 2,821 | | Vessel operating expenses | (3,111) | | General and administrative expenses | (1,819) | | Depreciation and amortization | (1,226) | | Operating loss | (3,866) | | Interest and finance costs, net | (970) | | Net loss | (4,887) | | Net loss per common share | (0.64) | Unaudited Condensed Consolidated Cash Flow Data For the first quarter of 2023, cash flow from operating activities was negative $4.1 million. Investing activities used $52.1 million, primarily for vessel acquisitions. Financing activities provided $6.3 million in cash Condensed Consolidated Cash Flow Data (Q1 2023, in thousands USD) | Activity | Net Cash Flow | | :--- | :--- | | Net cash used in operating activities | (4,060) | | Net cash used in investing activities | (52,135) | | Net cash provided by financing activities | 6,264 | Company Overview United Maritime Corporation is an international shipping company operating a fleet of dry bulk vessels and one tanker, listed on Nasdaq under 'USEA' About United Maritime Corporation United Maritime Corporation is an international shipping company focused on worldwide seaborne transportation. Its current fleet includes one LR2 tanker and seven dry bulk vessels. Following a pending delivery, the fleet will grow to eight vessels with a combined cargo capacity of 955,340 DWT. The company is incorporated in the Marshall Islands, has executive offices in Greece, and its common shares are listed on the Nasdaq Capital Market under the ticker "USEA" - The company operates a fleet of one LR2 tanker and seven dry bulk vessels (one Panamax, three Capesize, and two Kamsarmax)[42] - Upon the delivery of one more Panamax vessel, the fleet will consist of eight vessels with an aggregate cargo carrying capacity of 955,340 DWT[42] - The company's common shares trade on the Nasdaq Capital Market under the symbol "USEA"[43]