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Monaco - October 31, 2016 Scorpio Bulkers Inc. (NYSE: SALT) ("Scorpio Bulkers," or the "Company") today reported its results for the three and nine months ended September 30, 2016. Results for the three and nine months ended September 30, 2016 and 2015 For the three months ended September 30, 2016, the Company's GAAP net loss was $21.3 million, or $0.30 loss per diluted share. For the same period in 2015 the Company's GAAP net loss was $18.1 million, or $0.66 loss per diluted share. There were no non-GAAP adjustments to earnings in the three months ended September 30, 2016. For the three months ended September 30, 2015, the Company's adjusted net loss was $16.3 million or $0.60 adjusted loss per diluted share, which excludes a write down of assets held for sale of $0.3 million and the write off of deferred financing costs on credit facilities that will no longer be used of $1.4 million, or $0.06 loss per diluted share (see Non-GAAP Financial Measures below). For the nine months ended September 30, 2016, the Company had a GAAP net loss of $104.3 million, or $2.05 loss per diluted share. For the nine months ended September 30, 2016, the Company's adjusted net loss was $79.4 million, or $1.56 adjusted loss per diluted share. This excludes a loss/write off of vessels and assets held for sale of $12.4 million, the write off of deferred financing costs on credit facilities that will no longer be used of $2.5 million and a charterhire contract termination fee of $10.0 million. These adjustments total a $0.49 loss per diluted share (see Non-GAAP Financial Measures below). For comparison in the nine months ended September 30, 2015, the Company had a GAAP net loss of $208.8 million, or $10.77 loss per diluted share. The Company's adjusted net loss was $49.7 million or $2.57 adjusted loss per diluted share. This excludes a write down on assets held for sale of $151.7 million and the write off of deferred financing costs on credit facilities that will no longer be used of $7.3 million, or $8.20 loss per share (see Non-GAAP Financial Measures below). Recent Significant Events Financing Agreement Amendments The Company agreed with its lenders to amend the relevant loan agreements such that the interest coverage ratio, as defined in each agreement, will not be applicable until the first quarter of 2019, at which point the ratio will be 1.00 to 1.00 and will be calculated on a year-to-date basis for the first and second quarter of 2019. Thereafter, the interest coverage ratio will revert to its original covenant level of 2.50 to 1.00. The Company agreed, as outlined on a per facility basis below, with certain of its lenders to add three or four quarterly installment payments, depending on the vessel, to the respective balloon payments in exchange for an advance principal repayment of approximately $24.4 million. As a result of these agreements, the Company will not have to make the next six or eight scheduled quarterly installment payments, depending on the vessel, totaling $48.8 million. For the two undelivered ships under the $409 Million Credit Facility, the advance principal repayment amount is calculated on the basis of loan amount available. In respect of one of its credit facilities, the Company also reached an agreement with the lender to extend the maturity date of this facility from June 2019 to September 2020, subject to the Company meeting certain conditions on or before June 2019. In addition to the above-mentioned amendments, the Company has also agreed with certain of its lenders to amend definitions within its "leverage ratio" and "consolidated net worth" covenants to exclude $100.0 million of historical non-operating losses (which is in addition to them agreeing to exclude certain non-operating items, including impairments as announced in Q2 2016). Certain of the Company's lenders had agreed to amend the above-mentioned definitions in Q2 2016 to exclude all historical incurred losses/write downs on assets sold, all historical incurred losses on termination of shipbuilding contracts and certain future non-operating items including impairments. TCE Revenue Earned during the Third Quarter of 2016 • Our Kamsarmax fleet earned $6,349 per day • Our Ultramax fleet earned $7,083 per day Voyages Fixed thus far in the Fourth Quarter of 2016 • Kamsarmax fleet: approximately $7,064 per day for 77% of the days • Ultramax fleet: approximately $7,016 per day for 58% of the days Charter Employment Fixed since July 27, 2016 and thus far in Fourth Quarter of 2016 
Vessel Price Reductions and the Delay of Scheduled Vessel Deliveries The Company reached agreements with shipyards to reduce the price to be paid under the shipbuilding contracts of four Kamsarmax vessels and two Ultramax vessels that were to be delivered between Q3 2016 and Q4 2016 by an aggregate of $13.0 million. The Company also reached agreements to delay the delivery of the same six vessels by approximately one to three months each. These vessels, previously expected to be delivered between September 2016 and November 2016 will now be, or were, delivered between October 2016 and January 2017. Pursuant to these delays, $59.1 million that was previously expected to be paid to shipyards during Q4 2016 is now expected to be paid in Q1 2017. Newbuilding Vessels Deliveries During the third quarter of 2016, the Company took delivery from shipyards of the following newbuilding vessels: • SBI Tethys, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co. Ltd. • SBI Phoebe, an Ultramax vessel, was delivered from Chengxi Shipyard Co. Ltd. • SBI Poseidon, an Ultramax vessel, was delivered from Mitsui Engineering & Shipbuilding Co., Ltd. Between October 1, 2016 and October 28, 2016 the Company took delivery from shipyards of the following newbuilding vessels: • SBI Apollo, an Ultramax vessel, was delivered from Mitsui Engineering & Shipbuilding Co., Ltd. • SBI Zumba, a Kamsarmax vessel, was delivered from Hudong-Zhonghua (Group) Co., Ltd. Management Agreement Amendments Effective September 29, 2016, the Company amended its Administrative Services Agreement with Scorpio Services Holding Limited ("SSH") and its Master Agreement with Scorpio Commercial Management ("SCM") and Scorpio Ship Management ("SSM"). Under the terms of the amendments, (i) the fee of $250,000 payable to SSH in shares based on the volume weighted average price of our common shares over the 30 trading day period immediately preceding the contract date upon any future vessel purchase will be eliminated; (ii) in the event of the sale of one or more vessels, provided it does not amount to a sale of substantially all vessels the notice period to terminate the commercial and technical management agreements will be reduced from two years to three months and a fee equal to three months of management fees will be payable to SCM and SSM upon termination; and (iii) effective beginning on the fifth day within any 20 trading day period that the closing price of the Company's common shares on the New York Stock Exchange is equal to or greater than $5.00, the commission payable for commercial management will be reinstated to 1.75 per cent of all monies earned by a vessel from the current 1 per cent. There is no other consideration payable by the Company for these amendments. Full reprt at: www.scorpiobulkers.com Scorpio Bulkers Inc. press release |
