UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

For the month of October 2018

Commission File Number: 001-36231
 

SCORPIO BULKERS INC.
(Translation of registrant's name into English)
 

9, Boulevard Charles III, Monaco 98000
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x   Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o.

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o.

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

























Attached to this report on Form 6-K as Exhibit 99.1 is a copy of the press release of Scorpio Bulkers Inc. (the "Company"), dated October 22, 2018, announcing the Company's financial results for the third quarter of 2018.

The information contained in this Report on Form 6-K, with the exception of the information contained on page 19 of Exhibit 99.1 under the heading "Conference Call on Results", is hereby incorporated by reference into the Company's registration statement on Form F-3 (File No. 333-217445), the Company's registration statement on Form F-3 (File No. 333-221441), the Company's registration statement on Form F-3 (File No. 333-222013) and the Company's registration statement on Form F-3 (File No. 333-222448).








SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
                    
 
 
SCORPIO BULKERS INC.
 
 
(registrant)
 
 
 
 
 
 
Dated:
October 22, 2018
By: /s/ Hugh Baker
 
 
Hugh Baker
 
 
Chief Financial Officer
 
 
 



Exhibit
EXHIBIT 99.1


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12506895&doc=3
Scorpio Bulkers Inc. Announces Financial Results for the Third Quarter of 2018 and Declares a Quarterly Dividend
MONACO - October 22, 2018 (GLOBE NEWSWIRE) - Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers”, or the “Company”), today reported its results for the three and nine months ended September 30, 2018.
The Company also announced today that on October 19, 2018, its Board of Directors declared a quarterly cash dividend of $0.02 per share on the Company’s common shares.
Results for the Three and Nine Months Ended September 30, 2018 and 2017
For the third quarter of 2018, the Company’s GAAP net loss was $0.4 million, or $0.01 loss per diluted share. These results include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt (see discussion below, “Debt”). For the same period in 2017, the Company’s GAAP net loss was $10.7 million, or $0.15 loss per diluted share. Total vessel revenues for the third quarter of 2018 were $62.5 million, compared to $38.6 million for the same period in 2017. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the third quarters of 2018 and 2017 were $28.8 million and $12.4 million, respectively (see Non-GAAP Financial Measures below).
For the nine months ended September 30, 2018, the Company’s GAAP net loss was $5.3 million or $0.07 loss per diluted share. For the same period in 2017, the Company’s GAAP net loss was $58.7 million, or $0.82 loss per diluted share. Total vessel revenues for the first nine months of 2018 were $177.3 million, compared to $111.1 million for the same period in 2017. EBITDA for the nine months ended September 30, 2018 and 2017 were $77.2 million and $12.3 million, respectively (see Non-GAAP Financial Measures below).
While the first nine months of 2018 did not include any non-GAAP adjustments to net income, the Company’s first nine months of 2017 GAAP net loss included a loss/write-off of vessels and assets held for sale of $17.7 million and the write-off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million. Excluding these items, the Company’s adjusted net loss for the first nine months of 2017 was $40.5 million, or $0.56 adjusted loss per diluted share. Adjusted EBITDA for the first nine months of 2017 was $30.0 million (see Non-GAAP Financial Measures below).
TCE Revenue
TCE Revenue Earned during the Third Quarter of 2018

Our Kamsarmax fleet earned $13,649 per day
Our Ultramax fleet earned $11,342 per day
Voyages Fixed thus far for the Fourth Quarter of 2018
Kamsarmax fleet: approximately $14,382 per day for 49% of the days
Ultramax fleet: approximately $13,388 per day for 47% of the days
Cash and Cash Equivalents
As of October 19, 2018, the Company had approximately $58.0 million in cash and cash equivalents.
Recent Significant Events
Share Repurchase Program

1



During the third quarter of 2018, the Company repurchased approximately 1.5 million shares of the Company’s common shares, at an average cost of $6.84 per share. The Company subsequently repurchased approximately 0.3 million shares of the Company’s common shares at an average cost of $6.60 per share from October 1, 2018 through October 12, 2018. These repurchases, totaling $11.9 million, were made under the Board of Directors authorized share repurchase program (the “Share Repurchase Program”) and funded from available cash resources. As of October 19, 2018, the Company had $18.4 million authorized remaining available under the Share Repurchase Program.
On October 19, 2018, the Company’s Board of Directors authorized a new share repurchase program to purchase up to an aggregate of $50.0 million of our common shares (the “New Share Repurchase Program”). This New Share Repurchase Program replaced our Share Repurchase Program that was previously authorized in September 2017 and that was terminated in conjunction with the New Share Repurchase Program. The specific timing and amounts of the repurchases will be in the sole discretion of management and may vary based on market conditions and other factors. The Company is not obligated under the terms of the program to repurchase any of its common shares. The authorization has no expiration date.
Dividend
In the third quarter of 2018, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.02 per share totaling approximately $1.5 million.
On October 19, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on or about December 14, 2018, to all shareholders of record as of November 14, 2018. As of October 19, 2018, 75,397,899 shares were outstanding.
Investment in Scorpio Tankers Inc.
On October 12, 2018, the Company invested $100.0 million in a related party, Scorpio Tankers Inc. (NYSE:STNG) ("Scorpio Tankers") for approximately 54.1 million, or 10.9%, of Scorpio Tankers’ issued and outstanding common shares. The investment was part of a larger $300.0 million equity raise through a public offering of common shares by Scorpio Tankers.
IMO 2020
The Company has agreed letters of intent, which are subject to the execution of definitive documentation, with suppliers, engineering firms, and ship repair facilities to cover the purchase and installation of Exhaust Gas Cleaning Systems (“Scrubbers”) on substantially all of its owned and finance leased Kamsarmax and Ultramax vessels between the second quarter of 2019 and the third quarter of 2020. The Scrubbers and their installation will cost between $1.5 - $2.2 million per vessel, and the Company anticipates that between 60-70% of these costs will be financed.

Charter Employment Fixed

The Company has entered into time charter-out agreements, for which certain information is summarized below.

Vessel
 
Type
 
Earliest Redelivery Date
 
Rate Per Day
SBI Jaguar
 
Ultramax
 
April 2019
 
$
16,000

SBI Ursa
 
Ultramax
 
June 2019
 
15,000

SBI Tango
 
Ultramax
 
March 2019
 
14,500

SBI Cougar
 
Ultramax
 
March 2019
 
16,500

SBI Echo
 
Ultramax
 
February 2019
 
15,000

SBI Thalia
 
Ultramax
 
April 2019
 
16,500

SBI Lyra
 
Ultramax
 
April 2019
 
16,500

SBI Bolero
 
Kamsarmax
 
May 2019
 
14,500

SBI Macarena
 
Kamsarmax
 
February 2019
 
16,000

SBI Mazurka
 
Kamsarmax
 
May 2019
 
16,000

SBI Samba
 
Kamsarmax
 
April 2019
 
15,500



2




Debt
$19.0 Million Lease Financing - SBI Echo
On July 18, 2018, the Company closed a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Echo, a 2015 Japanese built Ultramax vessel, for consideration of $19.0 million. As part of the transaction, the Company will make payments of $5,400 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus 1.97% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction is being treated as a financial lease for accounting purposes.

$19.0 Million Lease Financing - SBI Tango
On July 18, 2018, the Company closed a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Tango, a 2015 Japanese built Ultramax vessel, for consideration of $19.0 million. As part of the transaction, the Company will make payments of $5,400 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus 1.65% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction is being treated as a financial lease for accounting purposes.

$42.0 Million Credit Facility

During the third quarter of 2018, the Company repaid approximately $8.2 million of this loan as the SBI Tango is now financed under the $19.0 Million Lease Financing - SBI Tango.
$30.0 Million Credit Facility

On September 13, 2018, the Company entered into a senior secured credit facility for up to $30.0 million with ING Bank N.V. to refinance two of our Kamsarmax bulk carriers (SBI Zumba and SBI Parapara). The facility has a final maturity date of five years from drawdown date and bears interest at LIBOR plus a margin of 2.20% per annum. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax vessels and guaranteed by each of the vessel owning subsidiaries.

$60.0 Million Credit Facility

On September 11, 2018, the Company entered into a senior secured credit facility for up to $60.0 million. The loan facility will be used to finance up to 60% of the fair market value of two Ultramax dry bulk vessels (SBI Perseus and SBI Phoebe) and two Kamsarmax dry bulk vessels (SBI Electra and SBI Flamenco). The facility has a final maturity date of five years from drawdown date and bears interest at LIBOR plus a margin of 2.25% per annum. This facility is secured by, among other things, a first preferred mortgage on the four vessels and guaranteed by each of the vessel owning subsidiaries.

$67.5 Million Credit Facility

During the third quarter of 2018, the Company fully repaid this loan and terminated the credit facility. The four vessels previously financed by this loan are now financed under the $60.0 Million Credit Facility.

$184.0 Million Credit Facility

On September 21, 2018, the Company entered into a senior secured credit facility for up to $184.0 million with Nordea Bank AB (publ), acting through its New York branch, and Skandinaviska Enskilda Banken AB (publ) to refinance up to 60% of the fair market value of six Ultramax dry bulk vessels (SBI Athena, SBI Thalia, SBI Zeus, SBI Hera, SBI Poseidon and SBI Apollo) and six Kamsarmax dry bulk vessels (SBI Conga, SBI Bolero, SBI Sousta, SBI Rock, SBI Reggae and SBI Mazurka). The facility, which is comprised of a term loan of up to $104.0 million and a revolver of up to $80.0 million, has a final maturity date of five years from signing date and bears interest at LIBOR plus a margin of 2.40% per annum. This facility is

3



secured by, among other things, a first preferred mortgage on the twelve vessels and guaranteed by each of the vessel owning subsidiaries.

$409.0 Million Credit Facility

During the third quarter of 2018, the Company fully repaid this loan and terminated the credit facility. Two of the Kamsarmax vessels previously financed by this loan are now financed under the $30.0 Million Credit Facility, twelve vessels previously financed by this loan are now financed under the $184.0 Million Credit Facility and the SBI Echo is now financed under the $19.0 Million Lease Financing - SBI Echo.

$34.0 Million Credit Facility
On October 3, 2018, the Company entered into a senior secured credit facility for up to $34.0 million with a leading European financial institution to refinance up to 62.5% of the fair market value of two Kamsarmax bulk vessels (SBI Jive and SBI Swing).  The loan facility, which is comprised of a term loan up to $17.0 million and a revolver up to $17.0 million, has a final maturity date of seven years from signing date and bears interest at LIBOR plus a margin of 2.35% per annum. This facility is secured by, among other things, a first preferred mortgage on the two vessels and guaranteed by each of the vessel owning subsidiaries. On October 5, 2018, the Company drew down the entire $34.0 million available on this facility.
$330.0 Million Credit Facility
During October of 2018, the Company repaid approximately $23.1 million of this loan as two of the Kamsarmax vessels previously financed by this loan are now financed under the $34.0 Million Credit Facility.
An additional $61.7 million is expected to be repaid under this credit facility upon the closing of the $90.0 Million Credit Facility.
The drawdowns and repayments on our credit facilities between the third quarter of 2018 and October 19, 2018 related to the debt refinancing transactions described above are as follows:
Credit Facility
 
Drawdown (Repayment) Amount
($ thousands)
 
$19.0 Million Lease Financing - SBI Tango
 
$
19,000

 
$42.0 Million Credit Facility
 
(8,248
)
 
$19.0 Million Lease Financing - SBI Echo
 
19,000

 
$30.0 Million Credit Facility
 
29,975

 
$60.0 Million Credit Facility
 
60,000

 
$67.5 Million Credit Facility
 
(37,454
)
 
$184.0 Million Credit Facility
 
184,000

 
$409.0 Million Credit Facility
 
(169,248
)
 
$34.0 Million Credit Facility
 
34,000

 
$330.0 Million Credit Facility
 
(23,100
)
 

$90.0 Million Credit Facility
On October 3, 2018, the Company received a commitment from Nordea Bank Abp, acting through its New York branch, and DVB Bank SE for a loan facility of up to $90.0 million. The loan facility will be used to finance up to 60% of the fair market value of six Ultramax dry bulk vessels (SBI Orion, SBI Hyperion, SBI Tethys, SBI Hercules, SBI Samson and SBI Phoenix).
The loan facility has a final maturity date of five years from signing date and bears interest at LIBOR plus a margin of 2.35% per annum. This loan facility, which is expected to close during the fourth quarter of 2018, would increase the Company’s liquidity by approximately $28.0 million after repayment of the vessels’ existing debt. The terms and conditions are similar to those set forth in the Company's existing credit facilities and the loan facility is subject to customary conditions precedent and the execution of definitive documentation.

4



The Company expects to accelerate the amortization of between $1.5 million and $2.0 million of existing deferred financing costs upon the repayment the existing debt.
$20.5 Million Lease Financing - SBI Hermes
On September 27, 2018, the Company entered into a financing transaction with an unaffiliated third party involving the sale and leaseback of the SBI Hermes, a 2016 Japanese built Ultramax vessel, for consideration of $20.5 million. As part of the transaction, the Company will make payments of $5,850 per day under a five-year bareboat charter agreement with the buyer. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at the then prevailing swap rates would have been LIBOR plus a margin of 1.39% per annum.

The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement. This transaction, which is expected to close in the fourth quarter of 2018, will be treated as a financial lease for accounting purposes and increases the Company’s liquidity by approximately $11.3 million after repayment of the vessel’s existing loan.

Debt Overview

The Company’s outstanding debt balances, gross of unamortized deferred financing costs as of September 30, 2018 and October 19, 2018, are as follows (dollars in thousands):
 
 
As of September 30, 2018
 
As of October 19, 2018
Credit Facility
 
Amount Outstanding
 
Amount Outstanding
 
Amount Committed *
Senior Notes
 
$
73,625

 
$
73,625

 
$

$409 Million Credit Facility
 

 

 

$330 Million Credit Facility (1)(2)
 
229,488

 
206,388

 

$42 Million Credit Facility
 
14,105

 
14,105

 

$67.5 Million Credit Facility
 

 

 

$12.5 Million Credit Facility
 
9,596

 
9,596

 

$27.3 Million Credit Facility (3)
 
17,825

 
17,825

 

$85.5 Million Credit Facility
 
80,604

 
80,604

 

$38.7 Million Credit Facility
 
36,000

 
36,000

 
 
$19.6 Million Lease Financing - SBI Rumba
 
18,396

 
18,396

 

$12.8 Million Credit Facility
 
12,750

 
12,750

 

$19.0 Million Lease Financing - SBI Tango
 
18,727

 
18,636

 

$19.0 Million Lease Financing - SBI Echo
 
18,742

 
18,656

 
 
$30.0 Million Credit Facility
 
29,975

 
29,975

 
 
$60.0 Million Credit Facility
 
60,000

 
60,000

 

$184.0 Million Credit Facility
 
184,000

 
184,000

 
 
$34.0 Million Credit Facility
 

 
34,000

 
 
$90.0 Million Credit Facility
 

 

 
90,000

$20.5 Million Lease Financing - SBI Hermes
 

 

 
20,500

Total
 
$
803,833

 
$
814,556

 
$
110,500

(1) $23.1 million repaid upon the drawdown of the $34.0 Million Credit Facility in the fourth quarter of 2018.
(2) $61.7 million expected to be repaid upon the drawdown of the $90.0 Million Credit Facility in the fourth quarter of 2018.
(3) $8.8 million expected to be repaid upon the drawdown of the $20.5 Million Lease Financing - SBI Hermes in the fourth quarter of 2018.
* Reflects the maximum loan amount available on undrawn facility.

5



The Company’s projected quarterly debt repayments on our bank loans and senior notes and bareboat charter payments on our finance leases through 2019 are as follows (dollars in thousands):
        
 
 
Principal on Bank Loans and Senior Notes
 
Finance Lease
 
Total
Q4 2018 (1)
 
83,210

 
1,506

 
84,716

Q1 2019
 
14,847

 
2,012

 
16,859

Q2 2019
 
15,617

 
2,012

 
17,629

Q3 2019 (2)
 
88,817

 
2,012

 
90,829

Q4 2019
 
15,813

 
2,012

 
17,825

Total
 
$218,304
 
$9,554
 
$227,858
(1)
Relates to payments expected to be made from October 20, 2018 to December 31, 2018 including $61.7 million and $8.8 million to be repaid upon the respective drawdowns of the $90.0 Million Credit Facility and the $20.5 Million Lease Financing - SBI Hermes.
(2)
Includes $73.6 million repayment of Senior Notes due at maturity.
Financial Results for the Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017
For the third quarter of 2018, the Company’s GAAP net loss was $0.4 million, or $0.01 loss per diluted share compared to a GAAP net loss of $10.7 million, or $0.15 loss per diluted share in the same period in 2017. GAAP results for the third quarter of 2018 include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt. EBITDA for the third quarters of 2018 and 2017 were $28.8 million and $12.4 million, respectively (see Non-GAAP Financial Measures).
Total vessel revenues for the third quarter of 2018 were $62.5 million, an increase of $23.9 million from $38.6 million in the third quarter of 2017. Our TCE revenue (see Non-GAAP Financial Measures) for the third quarter of 2018 was $62.4 million, an increase of $23.8 million from the prior year period. Total vessel revenues benefited from strong grain activity from the East Coast South America market due to tariffs and potential trade wars, as well as increased demand for coal in China and India.
Total operating expenses for the third quarter of 2018 were $49.5 million compared to $41.2 million in the third quarter of 2017. The increase from the prior year period relates primarily to increases in vessel operating expenses and depreciation due principally to the growth of our fleet.

6



Ultramax Operations
 
Three Months Ended
September 30,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
39,722

 
$
23,069

 
$
16,653

 
72
Voyage expenses
80

 
16

 
64

 
400
TCE Revenue
$
39,642

 
$
23,053

 
$
16,589

 
72
Operating expenses:
 
 
 
 

 

Vessel operating costs
18,178

 
12,773

 
5,405

 
42
Charterhire expense
936

 
29

 
907

 
NA
Vessel depreciation
9,399

 
7,518

 
1,881

 
25
General and administrative expense
1,109

 
837

 
272

 
32
Total operating expenses
$
29,622

 
$
21,157

 
$
8,465

 
40
Operating income
$
10,020

 
$
1,896

 
$
8,124

 
428
Vessel revenue for our Ultramax Operations increased to $39.7 million for the third quarter of 2018 from $23.1 million in the prior year period due to strong South Atlantic grain activity, as U.S. tariffs caused Chinese buyers to continue buying large quantities of soybeans from the East Coast South America market extending the usual second quarter grain activity. In addition, strong coal demand from China benefited rates.
TCE revenue (see Non-GAAP Financial Measures) for our Ultramax Operations was $39.6 million for the third quarter of 2018 and was associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $23.1 million for the prior year period, associated with a day-weighted average of 28 vessels owned. TCE revenue per day was $11,342 and $8,949 for the third quarters of 2018 and 2017, respectively.
Dollars in thousands
Three Months Ended
September 30,
 
 
 
 
Ultramax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
39,642

 
$
23,053

 
$
16,589

 
72
TCE Revenue / Day
$
11,342

 
$
8,949

 
$
2,393

 
27
Revenue Days
3,495

 
2,576

 
919

 
36
Our Ultramax Operations vessel operating costs were $18.2 million for the third quarter of 2018, relating to the 37 vessels owned on average during the period, and included approximately $1.1 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $12.8 million and related to the 28 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the third quarters of 2018 and 2017 were $5,037 and $4,927, respectively. The increase versus the prior year period is due primarily to purchases of spares and stores, as well as repairs and maintenance. Sequentially, daily operating costs increased from $5,003 in the second quarter of 2018. The increase versus the trailing quarter is due primarily to the timing of repairs and maintenance, including certain annual class and certification costs.
Charterhire expense for our Ultramax Operations was approximately $0.9 million for the third quarter of 2018 and relates to the vessel time chartered-in at $10,125 per day since the end of the third quarter of 2017.
Ultramax Operations depreciation increased to $9.4 million in the third quarter of 2018 from $7.5 million in the prior year period, reflecting the increase in our weighted average vessels owned to 37 from 28.
General and administrative expense for our Ultramax Operations was $1.1 million for the third quarter of 2018 and $0.8 million in the prior year period. General and administrative expenses consist primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions. The increase versus the prior year period reflects the growth of our fleet.

7



Kamsarmax Operations
 
Three Months Ended
September 30,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
22,743

 
$
15,539

 
$
7,204

 
46

Voyage expenses
4

 
37

 
(33
)
 
(89
)
TCE Revenue
$
22,739

 
$
15,502

 
$
7,237

 
47

Operating expenses:
 
 
 
 

 

Vessel operating costs
8,833

 
8,223

 
610

 
7

Charterhire expense
108

 
769

 
(661
)
 
(86
)
Vessel depreciation
4,899

 
4,553

 
346

 
8

General and administrative expense
542

 
515

 
27

 
5

Total operating expenses
$
14,382

 
$
14,060

 
$
322

 
2

Operating income
$
8,357

 
$
1,442

 
$
6,915

 
480

Vessel revenue for our Kamsarmax Operations increased to $22.7 million in the third quarter of 2018 from $15.5 million in the prior year period due to a sustained grain import program from China. With trade war narratives escalating this summer, Chinese mills were making sure they purchased as much grain as they could from other origins notably the East Coast South America market. This coincided with the increase in Indian demand for coal from all origins, especially South Africa.
TCE revenue (see Non-GAAP Financial Measures) for our Kamsarmax Operations was $22.7 million for the third quarter of 2018 associated with a day-weighted average of 19 vessels owned, compared to $15.5 million for the prior year period associated with a day-weighted average of 18 vessels owned and one vessel time chartered-in. TCE revenue per day was $13,649 and $9,211 for the third quarters of 2018 and 2017, respectively.
Dollars in thousands
Three Months Ended
September 30,
 
 
 
 
Kamsarmax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
22,739

 
$
15,502

 
$
7,237

 
47

TCE Revenue / Day
$
13,649

 
$
9,211

 
$
4,438

 
48

Revenue Days
1,666

 
1,683

 
(17
)
 
(1
)
Kamsarmax Operations vessel operating costs were $8.8 million for the third quarter of 2018 relating to the 19 vessels owned on average during the period and included $0.4 million of takeover costs and contingency expenses. This compares to the prior year period of $8.2 million relating to 18 vessels owned on average during the period. Daily operating costs excluding takeover costs and contingency expenses for the third quarters of 2018 and 2017 were $4,931 and $4,989, respectively. Sequentially, daily operating costs increased from $4,801 in the second quarter of 2018, due primarily to an increase in spare and store purchases.
While we do not currently time charter-in any Kamsarmax vessels, we have a profit and loss sharing agreement with a third party related to one Kamsarmax vessel. During the third quarter of 2018, our share of the loss on that vessel was $0.1 million. Our share of the loss in the prior year period was $0.3 million. During the prior year period, a Kamsarmax vessel was time chartered-in through August 2017 at a cost of $0.5 million.
Kamsarmax Operations depreciation increased slightly to $4.9 million in the third quarter 2018 from $4.6 million in the prior year period. Our weighted average vessels owned were 19 in both the third quarters of 2018 and 2017.
General and administrative expense for our Kamsarmax Operations was $0.5 million for both the third quarters of 2018 and 2017. The expense consists primarily of administrative services fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions.

8



Corporate
Certain general and administrative expenses we incur and all of our financial expenses are not attributable to a specific segment. Accordingly, these costs are not allocated to our segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, were $5.4 million and $5.9 million in the third quarters of 2018 and 2017, respectively. The quarter over quarter decline is due primarily to reductions in restricted share amortization and legal fees.
Financial expenses, net increased to $13.3 million in the third quarter of 2018 from $8.0 million in the prior year period due to an increase in the LIBOR rate and higher levels of debt related to the increase in overall fleet size, as well as the write off of $2.0 million of deferred financing costs related to the refinancing of our debt. Between $1.5 million and $2.0 million of deferred financing costs are expected to be written off in the fourth quarter of 2018, related to the continued refinancing of certain debt.
Financial Results for the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017
For the first nine months of 2018, the Company’s GAAP net loss was $5.3 million or $0.07 loss per diluted share compared to a GAAP net loss of $58.7 million, or $0.82 loss per diluted share in the same period last year. GAAP results for the first nine months of 2018 include the write off of deferred financing costs of $2.0 million, or $0.03 per diluted share, related to the refinancing of existing debt. EBITDA for the first nine months of 2018 and 2017 were $77.2 million and $12.3 million, respectively (see Non-GAAP Financial Measures). Excluding the loss/write-off of vessels and assets held for sale of $17.7 million and the write-off of deferred financing costs on the credit facility related to those specific vessels of $0.5 million, the Company’s adjusted net loss for the first nine months of 2017 was $40.5 million, or $0.56 adjusted loss per diluted share (see Non-GAAP Financial Measures below). There were no such non-GAAP adjustments to the Company’s first nine months of 2018 net income. Adjusted EBITDA for the first nine months of 2017 was $30.0 million (see Non-GAAP Financial Measures below).
Total vessel revenues for the first nine months of 2018 were $177.3 million, an increase of $66.2 million from $111.1 million in the first nine months of 2017. Our TCE revenue (see Non-GAAP Financial Measures) for the first nine months of 2018 was $177.0 million, an increase of $66.3 million from the prior year period. Despite the negative macroeconomic noise, such as trade wars and sanctions, Ultramax Operations and Kamsarmax Operations have remained resilient in the steadily rising markets and both were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.
Total operating expenses for the first nine months of 2018 were $147.8 million compared to $144.5 million in the first nine months of 2017. The year over year increase relates to increases in vessel operating costs and depreciation resulting from the increase in the size of our fleet, offset in part to the loss/write-off of vessels and assets held for sale of $17.7 million recorded in the first nine months of 2017.

9



Ultramax Operations
 
Nine Months Ended September 30,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
112,778

 
$
64,113

 
$
48,665

 
76
Voyage expenses
264

 
82

 
182

 
222
TCE Revenue
$
112,514

 
$
64,031

 
$
48,483

 
76
Operating expenses:
 
 
 
 

 

Vessel operating costs
53,430

 
37,246

 
16,184

 
43
Charterhire expense
2,773

 
39

 
2,734

 
NA
Vessel depreciation
27,887

 
21,978

 
5,909

 
27
General and administrative expense
3,255

 
2,502

 
753

 
30
Total operating expenses
$
87,345

 
$
61,765

 
$
25,580

 
41
Operating income
$
25,169

 
$
2,266

 
$
22,903

 
NA
Vessel revenue for our Ultramax Operations increased to $112.8 million for the first nine months of 2018 from $64.1 million in the prior year period. We were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.
TCE revenue (see Non-GAAP Financial Measures) for our Ultramax Operations was $112.5 million for the first nine months of 2018 associated with a day-weighted average of 37 vessels owned and one time chartered-in vessel, compared to $64.0 million for the prior year period, associated with a day-weighted average of 28 vessels owned. TCE revenue per day was $10,895 and $8,519 for the nine months ended September 30, 2018 and 2017, respectively.
Dollars in thousands
Nine Months Ended September 30,
 
 
 
 
Ultramax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
112,514

 
$
64,031

 
$
48,483

 
76
TCE Revenue / Day
$
10,895

 
$
8,519

 
$
2,376

 
28
Revenue Days
10,327

 
7,516

 
2,811

 
37
Our Ultramax Operations vessel operating costs were $53.4 million for the first nine months of 2018, relating to the 37 vessels owned on average during the period and included approximately $3.1 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $37.2 million and related to the 28 vessels owned on average during the period. Daily operating costs excluding takeover costs, contingency expenses and other non-operating expenses for the first nine months of 2018 and 2017 were $4,983 and $4,875, respectively. The increase is due to an increase of purchases of spares and stores, as well as freight and forwarding expense.
Charterhire expense for our Ultramax Operations was approximately $2.8 million for the first nine months of 2018, and relates to the vessel we have time chartered-in at $10,125 per day since the end of the third quarter of 2017.
Ultramax Operations depreciation increased to $27.9 million in the first nine months of 2018 from $22.0 million in the prior year period reflecting the increase in our weighted average vessels owned to 37 from 28.
General and administrative expense for our Ultramax Operations was $3.3 million for the first nine months of 2018 and $2.5 million in the prior year period. General and administrative expenses consist primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions. The increase versus the prior year period reflects the growth of our fleet.

10



Kamsarmax Operations
 
Nine Months Ended September 30,
 
 
 
 
Dollars in thousands
2018
 
2017
 
Change
 
% Change
TCE Revenue:
 
 
 
 
 
 
 
Vessel revenue
$
64,552

 
$
46,965

 
$
17,587

 
37

Voyage expenses
107

 
250

 
(143
)
 
(57
)
TCE Revenue
$
64,445

 
$
46,715

 
$
17,730

 
38

Operating expenses:
 
 
 
 

 

Vessel operating costs
25,458

 
26,617

 
(1,159
)
 
(4
)
Charterhire expense
318

 
4,406

 
(4,088
)
 
(93
)
Vessel depreciation
14,306

 
13,692

 
614

 
4

General and administrative expense
1,515

 
1,592

 
(77
)
 
(5
)
Loss / write down on assets held for sale

 
17,701

 
(17,701
)
 
(100
)
Total operating expenses
$
41,597

 
$
64,008

 
$
(22,411
)
 
(35
)
Operating income (loss)
$
22,848

 
$
(17,293
)
 
$
40,141

 
232

Vessel revenue for our Kamsarmax Operations increased to $64.6 million in the first nine months of 2018 from $47.0 million in the prior year period. We were able to take advantage of premiums in the Atlantic driven by the strength of the fronthaul market from East Coast South America and the Black Sea to China and South East Asia, respectively, as well as the tightening of supply.
TCE revenue (see Non-GAAP Financial Measures) for our Kamsarmax Operations was $64.4 million for the first nine months of 2018 associated with a day-weighted average of 18 vessels owned, compared to $46.7 million for prior year period, associated with a day-weighted average of 18 vessels owned and one vessel time chartered-in. TCE revenue per day was $13,123 and $9,218 for the first nine months of 2018 and 2017, respectively.
Dollars in thousands
Nine Months Ended September 30,
 
 
 
 
Kamsarmax Operations:
2018
 
2017
 
Change
 
% Change
TCE Revenue
$
64,445

 
$
46,715

 
$
17,730

 
38

TCE Revenue / Day
$
13,123

 
$
9,218

 
$
3,905

 
42

Revenue Days
4,911

 
5,068

 
(157
)
 
(3
)
Kamsarmax Operations vessel operating costs were $25.5 million for the first nine months of 2018, which related to the 18 vessels owned on average during the period and included approximately $0.8 million of takeover costs and contingency expenses. Vessel operating costs for the prior year period were $26.6 million, and related to the 18 vessels owned on average during the period. Daily operating costs excluding takeover costs, contingency expenses and other non-operating expenses for the first nine months of 2018 and 2017 were $4,970 and $5,057, respectively.
While we do not time charter-in any Kamsarmax vessels, we have a profit and loss sharing agreement relating to one Kamsarmax vessel with a third party and during the first nine months of 2018, our share of the loss on that vessel was $0.3 million compared to $0.8 million in the prior year period. During the prior year period, a Kamsarmax vessel was time chartered-in through August 2017 at a cost of $3.6 million.
Kamsarmax Operations depreciation increased to $14.3 million in the first nine months of 2018 from $13.7 million in the prior year period. Our weighted average vessels owned was 18 in both the first nine months of 2018 and 2017.
General and administrative expense for our Kamsarmax Operations was $1.5 million and $1.6 million for the first nine months of 2018 and 2017, respectively. The expense consists primarily of administrative services fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions.
During the first nine months of 2017, we recorded a write-down on assets held for sale of $17.7 million related to the sale of two Kamsarmax vessels to an unaffiliated third party.

11



Corporate
Certain general and administrative expenses we incur and all of our financial expenses are not attributable to a specific segment. Accordingly, these costs are not allocated to our segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, remained relatively flat year over year totaling $18.5 million and $18.4 million in the first nine months of 2018 and 2017, respectively.
Financial expenses, net increased to $34.8 million in the first nine months of 2018 from $24.9 million in the prior year period due to an increase in the LIBOR rate and higher levels of debt related to the increase in overall fleet size, as well as the write off of $2.0 million of deferred financing costs related to the refinancing of our debt in 2018. Between $1.5 million and $2.0 million of deferred financing costs are expected to be written off in the fourth quarter of 2018, related to the continued refinancing of certain debt.

12

Scorpio Bulkers Inc. and Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)


 
 
Unaudited
 
 
Three Months Ended
September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
 
Vessel revenue
 
$
62,465

 
$
38,608

 
$
177,331

 
$
111,078

Operating expenses:
 


 


 


 


Voyage expenses
 
84

 
53

 
372

 
332

Vessel operating costs
 
27,011

 
20,996

 
78,888

 
63,863

Charterhire expense
 
1,044

 
798

 
3,091

 
4,445

Vessel depreciation
 
14,298

 
12,071

 
42,193

 
35,670

General and administrative expenses
 
7,043

 
7,245

 
23,283

 
22,530

Loss / write down on assets held for sale
 

 

 

 
17,701

Total operating expenses
 
49,480

 
41,163

 
147,827

 
144,541

Operating income (loss)
 
12,985

 
(2,555
)
 
29,504

 
(33,463
)
Other income (expense):
 
 

 
 
 
 

 
 

Interest income
 
327

 
289

 
756

 
903

Foreign exchange loss
 
(31
)
 
(91
)
 
(73
)
 
(277
)
Financial expense, net
 
(13,635
)
 
(8,317
)
 
(35,512
)
 
(25,821
)
Total other expense
 
(13,339
)
 
(8,119
)
 
(34,829
)
 
(25,195
)
Net loss
 
$
(354
)
 
$
(10,674
)
 
$
(5,325
)
 
$
(58,658
)
 
 
 
 
 
 
 
 
 
Loss per share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.01
)
 
$
(0.15
)
 
$
(0.07
)
 
$
(0.82
)
Diluted
 
$
(0.01
)
 
$
(0.15
)
 
$
(0.07
)
 
$
(0.82
)
 
 
 
 
 
 
 
 
 
Basic weighted average number of common shares outstanding
 
72,749

 
71,936

 
72,649

 
71,826

Diluted weighted average number of common shares outstanding
 
72,749

 
71,936

 
72,649

 
71,826



13

Scorpio Bulkers Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)

 
 
Unaudited
 
 
 
 
September 30, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
142,809

 
$
68,535

Accounts receivable
 
8,678

 
7,933

Prepaid expenses and other current assets
 
8,084

 
6,087

Total current assets
 
159,571

 
82,555

Non-current assets
 
 

 
 

Vessels, net
 
1,520,721

 
1,534,782

Vessels under construction
 

 
6,710

Deferred financing costs, net
 
3,214

 
3,068

Other assets
 
15,821

 
16,295

Total non-current assets
 
1,539,756

 
1,560,855

Total assets
 
$
1,699,327

 
$
1,643,410

 
 
 
 
 
Liabilities and shareholders’ equity
 
 

 
 

Current liabilities
 
 

 
 

Bank loans, net
 
$
57,849

 
$
46,993

Capital lease obligations
 
3,336

 
1,144

Senior Notes, net
 
73,120

 

Accounts payable and accrued expenses
 
14,546

 
10,453

Total current liabilities
 
148,851

 
58,590

Non-current liabilities
 
 

 
 

Bank loans, net
 
604,747

 
576,967

Capital lease obligations
 
51,338

 
17,747

Senior Notes, net
 

 
72,726

Total non-current liabilities
 
656,085

 
667,440

Total liabilities
 
804,936

 
726,030

Shareholders’ equity
 
 

 
 

Preferred shares, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding
 

 

Common shares, $0.01 par value per share; authorized 212,500,000 shares; issued and outstanding 75,678,177 and 74,902,364 shares as of September 30, 2018 and December 31, 2017, respectively
 
797

 
762

Paid-in capital
 
1,746,856

 
1,745,844

Common shares held in treasury, at cost; 4,106,927 and 1,465,448 shares at September 30, 2018 and December 31, 2017, respectively
 
(29,715
)
 
(11,004
)
Accumulated deficit
 
(823,547
)
 
(818,222
)
Total shareholders’ equity
 
894,391

 
917,380

Total liabilities and shareholders’ equity
 
$
1,699,327

 
$
1,643,410



14

Scorpio Bulkers Inc. and Subsidiaries
Statements of Cash Flows (unaudited)
(Amounts in thousands)

 
 
Nine Months Ended September 30,
 
 
2018
 
2017
Operating activities
 
 
 
 
Net loss
 
$
(5,325
)
 
$
(58,658
)
Adjustment to reconcile net loss to net cash used by
 
 
 
 

operating activities:
 
 
 
 

Restricted share amortization
 
5,625

 
10,418

Vessel depreciation
 
42,193

 
35,670

Amortization of deferred financing costs
 
6,483

 
4,249

Write-off of deferred financing costs
 

 
470

Loss / write-down on assets held for sale
 

 
16,471

Changes in operating assets and liabilities:
 
 

 
 

Decrease in accounts receivable
 
(745
)
 
(1,760
)
Increase (decrease) in prepaid expenses and other assets
 
(1,519
)
 
(1,007
)
Increase in accounts payable and accrued expenses
 
4,093

 
250

Net cash provided by operating activities
 
50,805

 
6,103

Investing activities
 
 

 
 

Proceeds from sale of assets held for sale
 

 
44,340

Payments for vessels and vessels under construction
 
(21,423
)
 
(23,285
)
Net cash (used in) provided by investing activities
 
(21,423
)
 
21,055

Financing activities
 
 

 
 

Proceeds from issuance of long-term debt
 
324,725

 
51,600

Repayments of long-term debt
 
(251,515
)
 
(118,097
)
Common shares repurchased
 
(18,710
)
 

Dividend paid
 
(4,579
)
 

Debt issue costs paid
 
(5,029
)
 

Net cash provided by (used in) financing activities
 
44,892

 
(66,497
)
Increase (decrease) in cash and cash equivalents
 
74,274

 
(39,339
)
Cash at cash equivalents, beginning of period
 
68,535

 
101,734

Cash and cash equivalents, end of period
 
$
142,809

 
$
62,395



15

Scorpio Bulkers Inc. and Subsidiaries
Other Operating Data (unaudited)


 
 
Three Months Ended
September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Time charter equivalent revenue ($000’s) (1):
 
 
 
 
 
 
 
 
Vessel revenue
 
$
62,465

 
$
38,608

 
$
177,331

 
$
111,078

Voyage expenses
 
(84
)
 
(53
)
 
(372
)
 
(332
)
Time charter equivalent revenue
 
$
62,381

 
$
38,555

 
$
176,959

 
$
110,746

Time charter equivalent revenue attributable to:
 
 

 
 

 
 

 
 

Kamsarmax
 
$
22,739

 
$
15,502

 
$
64,445

 
$
46,715

Ultramax
 
39,642

 
23,053

 
112,514

 
64,031

 
 
$
62,381

 
$
38,555

 
$
176,959

 
$
110,746

Revenue days:
 
 

 
 

 
 

 
 

Kamsarmax
 
1,666

 
1,683

 
4,911

 
5,068

Ultramax
 
3,495

 
2,576

 
10,327

 
7,516

Combined
 
5,161

 
4,259

 
15,238

 
12,584

TCE per revenue day (1):
 
 

 
 

 
 

 
 

Kamsarmax
 
$
13,649

 
$
9,211

 
$
13,123

 
$
9,218

Ultramax
 
$
11,342

 
$
8,949

 
$
10,895

 
$
8,519

Combined
 
$
12,087

 
$
9,053

 
$
11,613

 
$
8,801

(1)
We define Time Charter Equivalent (TCE) revenue as vessel revenues less voyage expenses. Such TCE revenue, divided by the number of our available days during the period, or revenue days, is TCE per revenue day, which is consistent with industry standards. TCE per revenue day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.
We report TCE revenue, a non-GAAP financial measure, because (i) we believe it provides additional meaningful information in conjunction with vessel revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii) it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii) it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods, and (iv) we believe that it presents useful information to investors. See Non-GAAP Financial Measures.


16




Fleet List as of October 19, 2018
Vessel Name
 
Year Built
 
 DWT
 
 Vessel Type
SBI Samba
 
2015
 
84,000

 
Kamsarmax
SBI Rumba
 
2015
 
84,000

 
Kamsarmax
SBI Capoeira
 
2015
 
82,000

 
Kamsarmax
SBI Electra
 
2015
 
82,000

 
Kamsarmax
SBI Carioca
 
2015
 
82,000

 
Kamsarmax
SBI Conga
 
2015
 
82,000

 
Kamsarmax
SBI Flamenco
 
2015
 
82,000

 
Kamsarmax
SBI Bolero
 
2015
 
82,000

 
Kamsarmax
SBI Sousta
 
2016
 
82,000

 
Kamsarmax
SBI Rock
 
2016
 
82,000

 
Kamsarmax
SBI Lambada
 
2016
 
82,000

 
Kamsarmax
SBI Reggae
 
2016
 
82,000

 
Kamsarmax
SBI Zumba
 
2016
 
82,000

 
Kamsarmax
SBI Macarena
 
2016
 
82,000

 
Kamsarmax
SBI Parapara
 
2017
 
82,000

 
Kamsarmax
SBI Mazurka
 
2017
 
82,000

 
Kamsarmax
SBI Swing
 
2017
 
82,000

 
Kamsarmax
SBI Jive
 
2017
 
82,000

 
Kamsarmax
SBI Lynx
 
2018
 
82,000

 
Kamsarmax
Total Kamsarmax
 
 
 
1,562,000

 
 
 
 
 
 
 
 
 
SBI Antares
 
2015
 
61,000

 
Ultramax
SBI Athena
 
2015
 
64,000

 
Ultramax
SBI Bravo
 
2015
 
61,000

 
Ultramax
SBI Leo
 
2015
 
61,000

 
Ultramax
SBI Echo
 
2015
 
61,000

 
Ultramax
SBI Lyra
 
2015
 
61,000

 
Ultramax
SBI Tango
 
2015
 
61,000

 
Ultramax
SBI Maia
 
2015
 
61,000

 
Ultramax
SBI Hydra
 
2015
 
61,000

 
Ultramax
SBI Subaru
 
2015
 
61,000

 
Ultramax
SBI Pegasus
 
2015
 
64,000

 
Ultramax
SBI Ursa
 
2015
 
61,000

 
Ultramax
SBI Thalia
 
2015
 
64,000

 
Ultramax
SBI Cronos
 
2015
 
61,000

 
Ultramax
SBI Orion
 
2015
 
64,000

 
Ultramax
SBI Achilles
 
2016
 
61,000

 
Ultramax
SBI Hercules
 
2016
 
64,000

 
Ultramax
SBI Perseus
 
2016
 
64,000

 
Ultramax
SBI Hermes
 
2016
 
61,000

 
Ultramax
SBI Zeus
 
2016
 
60,200

 
Ultramax
SBI Hera
 
2016
 
60,200

 
Ultramax
SBI Hyperion
 
2016
 
61,000

 
Ultramax
SBI Tethys
 
2016
 
61,000

 
Ultramax
SBI Phoebe
 
2016
 
64,000

 
Ultramax
SBI Poseidon
 
2016
 
60,200

 
Ultramax
SBI Apollo
 
2016
 
60,200

 
Ultramax
SBI Samson
 
2017
 
64,000

 
Ultramax
SBI Phoenix
 
2017
 
64,000

 
Ultramax
SBI Gemini
 
2015
 
64,000

 
Ultramax

17



Vessel Name
 
Year Built
 
 DWT
 
 Vessel Type
SBI Libra
 
2017
 
64,000

 
Ultramax
SBI Puma
 
2014
 
64,000

 
Ultramax
SBI Jaguar
 
2014
 
64,000

 
Ultramax
SBI Cougar
 
2015
 
64,000

 
Ultramax
SBI Aries
 
2015
 
64,000

 
Ultramax
SBI Taurus
 
2015
 
64,000

 
Ultramax
SBI Pisces
 
2016
 
64,000

 
Ultramax
SBI Virgo
 
2017
 
64,000

 
Ultramax
Total Ultramax
 
 
 
2,307,800

 
 
Total Owned or Finance Leased Vessels DWT
 
3,869,800

 
 
Time chartered-in vessels
The Company currently time charters-in one Ultramax vessel. The terms of the contract are summarized as follows:
Vessel Type
 
Year Built
 
DWT
 
Country of Build
 
Daily Base Rate
 
Earliest Expiry
Ultramax
 
2017
 
62,100

 
Japan
 
$
10,125

 
30-Sep-19
 
(1) 
Total TC DWT
 
 
 
62,100

 
 
 
 

 
 
 
 
(1)
This vessel is time chartered-in for 22 to 24 months at the Company’s option at $10,125 per day. The Company has the option to extend this time charter for one year at $10,885 per day. The vessel was delivered to the Company in September 2017.



18



Conference Call on Results:
A conference call to discuss the Company’s results will be held today, October 22, 2018, at 9:00 AM Eastern Daylight Time / 3:00 PM Central European Summer Time. Those wishing to listen to the call should dial 1 (866) 219-5268 (U.S.) or 1 (703) 736-7424 (International) at least 10 minutes prior to the start of the call to ensure connection. The conference participant passcode is 4664187.

There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website www.scorpiobulkers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: https://edge.media-server.com/m6/p/9a9q3tnx

About Scorpio Bulkers Inc.
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities.  Scorpio Bulkers Inc. has an operating fleet of 57 vessels consisting of 56 wholly-owned or finance leased dry bulk vessels (including 19 Kamsarmax vessels and 37 Ultramax vessels), and one time chartered-in Ultramax vessel. The Company’s owned and finance leased fleet has a total carrying capacity of approximately 3.9 million dwt and all of the Company’s owned vessels have carrying capacities of greater than 60,000 dwt. Additional information about the Company is available on the Company’s website www.scorpiobulkers.com, which is not a part of this press release.





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Non-GAAP Financial Measures
To supplement our financial information presented in accordance with accounting principles generally accepted in the U.S., (“GAAP”), management uses certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business than GAAP measures alone. In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of management’s control.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted net loss and related per share amounts, as well as adjusted EBITDA and TCE Revenue are non-GAAP performance measures that we believe provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP. Please see below for reconciliations of EBITDA, adjusted net loss and related per share amounts, and adjusted EBITDA. Please see “Other Operating Data” for a reconciliation of TCE revenue.
EBITDA (unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended September 30,
In thousands
2018
 
2017
 
2018
 
2017
Net loss
$
(354
)
 
(10,674
)
 
$
(5,325
)
 
$
(58,658
)
Add Back:
 
 
 
 
 
 
 
Net interest expense
9,791

 
6,546

 
28,273

 
20,199

Depreciation and amortization (1)
19,378

 
16,499

 
54,301

 
50,807

EBITDA
$
28,815

 
12,371

 
$
77,249

 
$
12,348

(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.
Adjusted net loss (unaudited)
 
 
Nine Months Ended September 30,
In thousands, except per share data
 
2017
 
 
Amount
 
Per share
Net loss
 
$
(58,658
)
 
$
(0.82
)
Adjustments:
 
 
 
 
Loss / write down on assets held for sale
 
17,701

 
0.25

Write down of deferred financing cost
 
470

 
0.01

Total adjustments
 
$
18,171

 
$
0.26

Adjusted net loss
 
$
(40,487
)
 
$
(0.56
)

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Adjusted EBITDA (unaudited)
 
 
Nine Months Ended September 30,
In thousands
 
2017
Net loss
 
$
(58,658
)
Impact of adjustments
 
18,171

Adjusted net loss
 
(40,487
)
Add Back:
 
 
Net interest expense
 
20,199

Depreciation and amortization (1)
 
50,337

Adjusted EBITDA
 
$
30,049

(1) Includes depreciation, amortization of deferred financing costs and restricted share amortization.


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Forward-Looking Statements 
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

Contact:

Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)


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