United Maritime (USEA) - 2023 Q3 - Quarterly Report

Financial & Operational Highlights Q2 & 6M 2023 Financial Results United Maritime reported Q2 2023 Net Revenues of $10.0 million and a Net Loss of $3.0 million, also declaring a quarterly dividend Summary Financial Results | Metric | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Net Revenues | $10.0 million | $12.8 million | | Net loss | $(3.0) million | $(7.9) million | | Adjusted net loss | $(2.1) million | $(5.7) million | | Adjusted EBITDA | $2.0 million | $0.5 million | | Loss per share (Basic & Diluted) | $(0.37) | $(1.00) | | Adjusted loss per share (Basic & Diluted) | $(0.25) | $(0.72) | - The Time Charter Equivalent (TCE) rate for the fleet was $16,072 per day in Q2 2023 and $14,335 per day for the first six months of 2023[4][5] - The company declared a quarterly cash dividend of $0.075 per common share for the second quarter of 2023[3] Key Developments & Strategic Execution United Maritime completed its first tanker investment cycle, initiated a new dry bulk vessel investment cycle, and continued shareholder returns - Completed the first investment cycle with the sale of the remaining LR2 tanker, achieving a return on equity of approximately 400% and a combined profit of $48 million from four tanker transactions in under a year[6] - Initiated a second investment cycle focused on larger dry bulk vessels, investing $143.6 million in two Capesize, two Kamsarmax, and three Panamax vessels without shareholder dilution[6] - Declared a quarterly cash dividend of $0.075 per share for Q2 2023, bringing total declared dividends to $1.225 per share ($9.4 million) since November 2022[6] - Executed common share buybacks of approximately $0.2 million in Q2 2023, totaling $3.4 million in repurchases over the last 12 months at an average price of $1.84[6] Management Commentary CEO's Statement CEO highlighted successful tanker investment cycle completion, reinvestment into dry bulk, and shareholder returns, noting Q2 results were impacted by fleet transition - The sale of the M/T Epanastasea for $37.5 million marks the end of a successful tanker investment cycle, generating a profit of approximately $48 million. Proceeds are being reinvested into dry bulk vessels[8] - The company has expanded its fleet by agreeing to add two Japanese-built Panamax vessels, increasing the fleet size to eight dry bulk vessels upon delivery. The total investment of $143.6 million has been funded without diluting shareholders[9] - Q2 2023 results were impacted by the fleet's transitional growth stage, low utilization due to a vessel's dry-docking, and volatility in the dry bulk market. However, management expects strong ton-mile demand to translate into higher charter rates in coming quarters[10] Fleet Status Current and Future Fleet Composition The company's fleet consists of eight dry bulk vessels and one LR2 tanker held for sale, with an additional Panamax vessel pending delivery Fleet Composition | 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 | | Oasea | Dry Bulk / Kamsarmax | 82,217 | 2010 | | Cretansea | Dry Bulk / Kamsarmax | 81,508 | 2009 | | Chrisea | Dry Bulk / Panamax | 78,173 | 2013 | | Synthesea | Dry Bulk / Panamax | 78,020 | 2015 | | Epanastasea | Tanker / LR2 | 109,647 | 2008 | - One Panamax dry bulk vessel, the 'Santa Barbara' (to be renamed Exelixsea), built in 2011 with a capacity of 76,361 DWT, is scheduled to be delivered[13] Fleet Operational Data In Q2 2023, the fleet achieved a 93.3% utilization rate and a TCE rate of $16,072 per day, with daily operating expenses averaging $6,714 Fleet Operational Metrics | Metric | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Ownership days | 611 | 916 | | Operating days | 570 | 815 | | Fleet utilization | 93.3% | 89.0% | | TCE rate | $16,072 | $14,335 | | Daily Vessel Operating Expenses | $6,714 | $7,063 | Financial Performance Analysis and Non-GAAP Reconciliations Reconciliation of Net Revenues to TCE Rate The company reconciles vessel revenue to the non-GAAP TCE rate, showing Q2 2023 vessel revenue of $10.0 million yielded a TCE rate of $16,072 Time Charter Equivalent (TCE) Rate Reconciliation | (In thousands of U.S. Dollars) | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Vessel revenue, net | 10,011 | 12,832 | | Less: Voyage expenses | 850 | 1,149 | | Time charter equivalent revenues | 9,161 | 11,683 | | Operating days | 570 | 815 | | TCE rate | $16,072 | $14,335 | Reconciliation of Net Loss to EBITDA and Adjusted EBITDA For Q2 2023, the company reconciled its Net Loss of $3.0 million to an EBITDA of $1.0 million and an Adjusted EBITDA of $2.0 million, primarily adjusting for non-cash items EBITDA and Adjusted EBITDA Reconciliation | (In thousands of U.S. Dollars) | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Net loss | (3,027) | (7,914) | | Add: Net interest and finance cost | 1,722 | 2,692 | | Add: Depreciation and amortization | 2,343 | 3,569 | | EBITDA | 1,038 | (1,653) | | Add: Stock based compensation | 957 | 2,175 | | Adjusted EBITDA | 1,995 | 522 | Reconciliation of Net Loss to Adjusted Net Loss The company's Q2 2023 Net Loss of $3.0 million was adjusted for stock-based compensation, resulting in an Adjusted Net Loss of $2.1 million and Adjusted Loss Per Share of ($0.25) Adjusted Net Loss Reconciliation | (In thousands of U.S. Dollars) | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Net loss | (3,027) | (7,914) | | Add: Stock based compensation | 957 | 2,175 | | Adjusted net loss | (2,070) | (5,739) | | Adjusted loss per common share | (0.25) | (0.72) | Outlook and Recent Developments Third Quarter 2023 TCE Rate Guidance United Maritime projects an estimated Q3 2023 TCE rate of approximately $15,980, with 47% of operating days fixed and the remainder based on FFA rates - Approximately 47% of the fleet's expected operating days in Q3 2023 are fixed at an estimated TCE rate of $19,490[23] - The overall estimated TCE for Q3 2023 is approximately $15,980, assuming the remaining operating days achieve an average FFA rate of $11,710 per day[23] Corporate Actions and Fleet Transactions The company declared a Q2 2023 dividend and continued share repurchases, while executing key fleet changes including vessel deliveries, charters, acquisitions, and a tanker sale - Declared a cash dividend of $0.075 per common share for Q2 2023, payable around October 6, 2023[25] - Repurchased 67,231 common shares for $0.2 million in Q2 2023 under its share repurchase program[26] - Agreed to sell its remaining LR2 tanker, M/T Epanastasea, for a gross price of $37.5 million, with an expected accounting profit of approximately $12.0 million to be realized in Q3 2023[30] - Expanded the dry bulk fleet by taking delivery of M/V Cretansea, entering a bareboat charter for M/V Synthesea, and agreeing to acquire M/V Exelixsea[27][28][29] Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Balance Sheets As of June 30, 2023, United Maritime reported total assets of $153.6 million, total liabilities of $94.4 million, and stockholders' equity of $59.2 million Condensed Consolidated Balance Sheets | (In thousands of U.S. Dollars) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | 7,282 | 69,932 | | Vessels and related assets, net | 138,437 | 50,200 | | TOTAL ASSETS | 153,580 | 125,655 | | LIABILITIES & EQUITY | | | | Long-term debt & liabilities, net | 78,248 | 42,606 | | Stockholders' equity | 59,176 | 64,568 | | TOTAL LIABILITIES AND EQUITY | 153,580 | 125,655 | Unaudited Condensed Consolidated Statements of Operations For Q2 2023, the company generated $10.0 million in vessel revenue, resulting in an operating loss of $1.3 million and a net loss of $3.0 million Condensed Consolidated Statements of Operations | (In thousands of U.S. Dollars) | Q2 2023 | 6M 2023 | | :--- | :--- | :--- | | Vessel revenue, net | 10,011 | 12,832 | | Operating loss | (1,308) | (5,174) | | Net loss | (3,027) | (7,914) | | Net loss per common share | (0.37) | (1.00) | Unaudited Condensed Consolidated Cash Flow Data For 6M 2023, net cash used in operating activities was $0.8 million, net cash used in investing activities was $75.8 million, and net cash provided by financing activities was $14.0 million Condensed Consolidated Cash Flow Data | (In thousands of U.S. Dollars) | Six months period ended June 30, 2023 | | :--- | :--- | | Net cash used in operating activities | (844) | | Net cash used in investing activities | (75,776) | | Net cash provided by financing activities | 13,970 | Company Information About United Maritime Corporation United Maritime Corporation is an international shipping company specializing in seaborne transportation, with a post-transaction fleet of eight dry bulk vessels trading on Nasdaq under "USEA" - The company specializes in worldwide seaborne transportation services[41] - Post-transactions, the operating fleet will comprise eight dry bulk vessels with an aggregate cargo carrying capacity of 922,054 dwt[41] - The company's common shares are traded on the Nasdaq Capital Market under the ticker symbol "USEA"[42] Forward-Looking Statements This section contains forward-looking statements subject to various risks and uncertainties, including shipping industry trends, regulatory changes, and market conditions - The press release contains forward-looking statements concerning future events, which are subject to known and unknown risks[44] - Key risk factors include shipping industry trends (charter rates, vessel values), regulatory changes, operating costs, and broader market impacts from geopolitical events or pandemics[44]