Aegean Marine Petroleum Network Inc. Announces First Quarter 2013 Financial Results
PIRAEUS, Greece, May 15, 2013 /PRNewswire/ — Aegean Marine Petroleum Network Inc. (NYSE: ANW) (“Aegean” or the “Company”) today announced financial and operating results for the first quarter ended March 31, 2013.
First Quarter and Full Year Highlights
- Recorded sales volumes of 2,367,077 metric tons in Q1 2013.
- Reported gross profit of $70.7 million.
- Recorded operating income of $9.2 million in Q1 2013.
- Operating income adjusted for the sale of non-core assets was $12.4 million.
- Recorded net income attributable to Aegean shareholders of $7.2 million or $0.15 basic and diluted earnings per share in Q1 2013.
- Net income attributable to Aegean shareholders adjusted for the sale of non-core assets was $6.3 million or $0.13 basic and diluted earnings per share.
- Recorded EBITDA of $21.0 million in Q1 2013.
- EBITDA adjusted for the sale of non-core assets was $20.1 million.
Please see below for a reconciliation of EBITDA, a non-GAAP measure, to net income.
“We have continued to successfully execute on our growth initiatives, which has allowed us to make significant progress despite challenging macro headwinds,” said E. Nikolas Tavlarios, President. “During the first quarter we achieved a sequential increase in our gross spread and continued to reduce our expenses, resulting in our ninth consecutive quarter of profitability. As expected, we saw a typical seasonal decline in volumes and utilization; however, our focus on leveraging our infrastructure allowed us to capture voyage and storage revenue opportunities and drive profitability.”
Mr. Tavlarios continued, “We have entered 2013 with strong momentum, and believe we are executing the right strategy to sustain long-term growth. We continue to take a methodical approach to entering and exiting markets, diversifying our operations, and strengthening our integrated fuel logistics chain and we are confident that we are well-positioned to benefit when the market recovers from the current shipping cycle.”
The Company achieved net income attributable to Aegean shareholders for the three months ended March 31, 2013 of $7.2 million, or $0.15 basic and diluted earnings per share. Net income attributable to Aegean shareholders excluding a gain from the sale of non-core assets was $6.3 million or $0.13 basic and diluted earnings per share. For the three months ended March 31, 2012 the Company recorded net income attributable to AMPNI shareholders of $6.0 million, or $0.13 basic and diluted earnings per share.
Total revenues for the three months ended March 31, 2013, decreased by 13.3% to $1,570.5 million as compared to $1,810.9 million reported for the same period in 2012. For the three months ended March 31, 2013, sales of marine petroleum products decreased by 13.4% to $1,558.4 million compared to $1,799.3 million for the same period in 2012. Gross profit, which equals total revenue less directly attributable cost of revenue decreased by 7.4% to $70.7 million in the first quarter of 2013 compared to $76.4 million in the same period in 2012.
For the three months ended March 31, 2013, the volume of marine fuel sold by the Company decreased by 3.8% to 2,367,077 metric tons compared to 2,461,230 metric tons in the same period in 2012.
Operating income excluding a non-cash loss from the sale of vessels for the first quarter of 2013 amounted to $12.4 million compared to $13.4 million for the same period in 2012. Operating expenses excluding the non-cash loss from the sale of vessels decreased by $4.7 million, or 7.5%, to $58.3 million for the three months ended March 31, 2013, compared to $63.0 million for the same period in 2012.
Liquidity and Capital Resources
Net cash provided by operating activities was $42.2 million for the three months ended March 31, 2013. Net income, as adjusted for non-cash items (as defined in Note 9) was $13.6 million for the period.
Net cash used in investing activities was $3.0 million for the three months ended March 31, 2013, mainly due to the advances for other fixed assets under construction which were partly offset by the proceeds from the sale of two vessels and one of the Company’s subsidiaries.
Net cash used in financing activities was $54.1 million for the three months ended March 31, 2013, primarily driven by the pay down of net borrowings.
As of March 31, 2013, the Company had cash and cash equivalents of $61.7 million and working capital of $50.5 million. Non-cash working capital, or working capital excluding cash and debt, was $403.5 million.
As of March 31, 2013, the Company had $355.4 million in available liquidity, which includes unrestricted cash and cash equivalents of $61.7 million and available undrawn amounts under the Company’s working capital facilities of $293.7 million, to finance working capital requirements.
The weighted average basic and diluted shares outstanding for the three months ended March 31, 2013 were 45,660,166. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2012 were 45,438,383.
Spyros Gianniotis, Chief Financial Officer, stated, “Our first quarter results demonstrate the strength of our operating model and our ability to build and sustain new revenue streams and profitability in a tough operating environment. During the quarter we further streamlined our infrastructure by selling two vessels and reducing our operating expenses, both of which we expect to drive higher utilization and cash flow over the long-term. We have also taken significant steps to strengthen our balance sheet, including establishing a global trade finance facility that will provide significant additional liquidity.”
Summary Consolidated Financial and Other Data (Unaudited) For the Three Months Ended March 31, (in thousands of U.S. dollars, unless otherwise stated) 2012 2013 ---- ---- Income Statement Data: Revenues -third parties $1,792,925 $1,563,902 Revenues -related companies 17,990 6,589 ------ ----- Total revenues 1,810,915 1,570,491 Cost of revenues -third parties 1,648,321 1,416,481 Cost of revenues- related companies 86,193 83,287 ------ ------ Total cost of revenues 1,734,514 1,499,768 --------- --------- Gross profit 76,401 70,723 ------ ------ Operating expenses: Selling and distribution 55,560 50,956 General and administrative 7,060 6,965 Amortization of intangible assets 376 376 Loss on sale of vessels, net - 3,268 Operating income 13,405 9,158 Net financing cost (8,553) (6,153) Gain on sale of subsidiary - 4,174 Foreign exchange gains, net 1,654 399 Income taxes (225) (411) ---- ---- Net income 6,281 7,167 ----- ----- Less: (Income)/loss attributable to non-controlling interest (276) 19 ---- --- Net income attributable to AMPNI shareholders $6,005 $7,186 ====== ====== Basic earnings per share (U.S. dollars) $0.13 $0.15 Diluted earnings per share (U.S. dollars) $0.13 $0.15 EBITDA(1) $22,532 $21,021 Other Financial Data: Gross spread on marine petroleum products(2) $68,927 $63,184 Gross spread on lubricants(2) 746 1,059 Gross spread on marine fuel(2) 68,181 62,125 Gross spread per metric ton of marine 27.7 26.2 fuel sold (U.S. dollars) (2) Net cash (used in) /provided by operating activities $(28,658) $42,181 Net cash used in investing activities 10,978 3,020 Net cash provided by /(used in) financing activities 303 (54,131) Sales Volume Data (Marine Fuel Metric Tons): (3) Total sales volumes 2,461,230 2,367,077 --------- --------- Other Operating Data: Number of owned bunkering tankers, end of period(4) 58.0 55.0 Average number of owned bunkering tankers(4)(5) 58.0 55.4 Special Purpose Vessels, end of period(6) 1.0 1.0 Number of owned storage facilities, end of period(7) 8.0 6.0
Summary Consolidated Financial and Other Data (Unaudited) As of As of December 31, March 31, 2012 2013 ---- ---- (in thousands of U.S. dollars, unless otherwise stated) Balance Sheet Data: Cash and cash equivalents 77,246 61,716 Gross trade receivables 477,738 482,221 Allowance for doubtful accounts (3,503) (2,971) Inventories 180,826 174,474 Current assets 786,795 774,996 Total assets 1,431,843 1,418,513 Trade payables 242,899 277,708 Current liabilities (including current portion of long- term debt) 734,751 724,534 Total debt 653,286 602,355 Total liabilities 927,325 910,025 Total stockholder's equity 504,518 508,488 Working Capital Data: Working capital(8) 51,853 50,462 Working capital excluding cash and debt(8) 433,484 403,484
1. EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that recorded by other companies. EBITDA is included herein because it is a basis upon which the Company assesses its operating performance and because the Company believes that it presents useful information to investors regarding a company’s ability to service and/or incur indebtedness. The following table reconciles net income to EBITDA for the periods presented:
For the Three Months Ended March 31, --------------------------------- 2012 2013 ---- ---- (in thousands of U.S. dollars, unless otherwise stated) ----------------------- Net income attributable to Aegean shareholders 6,005 7,186 Add: Net financing cost including amortization 8,553 6,153 of financing costs Add: Income tax expense 225 411 Add: Depreciation and amortization excluding 7,749 7,271 amortization of financing costs EBITDA 22,532 21,021 ------ ------
2. Gross spread on marine petroleum products represents the margin the Company generates on sales of marine fuel and lubricants. Gross spread on marine fuel represents the margin that the Company generates on sales of various classifications of marine fuel oil (“MFO”) or marine gas oil (“MGO”). Gross spread on lubricants represents the margin that the Company generates on sales of lubricants. Gross spread on marine petroleum products, gross spread of MFO and gross spread on lubricants are not items recognized by U.S. GAAP and should be not be considered as an alternative to gross profit or any other indicator of a Company’s operating performance required by U.S. GAAP. The Company’s definition of gross spread may not be the same as that used by other companies in the same or other industries. The Company calculates the above-mentioned gross spreads by subtracting from the sales of the respective marine petroleum product the cost of the respective marine petroleum product sold and cargo transportation costs. For arrangements in which the Company physically supplies the respective marine petroleum product using its bunkering tankers, costs of the respective marine petroleum products sold represents amounts paid by the Company for the respective marine petroleum product sold in the relevant reporting period. For arrangements in which the respective marine petroleum product is purchased from the Company’s related company, Aegean Oil S.A., or Aegean Oil, cost of the respective marine petroleum products sold represents the total amount paid by the Company to the physical supplier for the respective marine petroleum product and its delivery to the custom arrangements in which the Company purchases cargos of marine fuel for its floating storage facilities, transportation costs may be included in the purchase price of marine fuels from the supplier or may be incurred separately from a transportation provider. Gross spread per metric ton of marine fuel sold represents the margin the Company generates per metric ton of marine fuel sold. The Company calculates gross spread per metric ton of marine fuel sold by dividing the gross spread on marine fuel by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants. The following table reflects the calculation of gross spread per metric ton of marine fuel sold for the periods presented:
For the Three Months Ended March 31, --------- 2012 2013 ---- ---- Sales of marine petroleum products 1,799,329 1,558,389 Less: Cost of marine petroleum products sold (1,730,402) (1,495,205) Gross spread on marine petroleum products 68,927 63,184 Less: Gross spread on lubricants (746) (1,059) ---- ------ Gross spread on marine fuel 68,181 62,125 Sales volume of marine fuel (metric tons) 2,461,230 2,367,077 --------- --------- Gross spread per metric ton of marine 27.7 26.2 fuel sold (U.S. dollars)
3. Sales volume of marine fuel is the volume of sales of various classifications of MFO and MGO for the relevant period and is denominated in metric tons. The Company does not use the sales volume of lubricants as an indicator.
The Company’s markets include its physical supply operations in the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe, Vancouver, Montreal, Mexico, Portland (U.K.), Trinidad and Tobago (Southern Caribbean), Tangiers (Morocco), Las Palmas, Tenerife, Panama, Hong Kong and Greece, where the Company conducts operations through its related company, Aegean Oil.
4. Bunkering fleet comprises both bunkering vessels and barges.
5. Figure represents average bunkering fleet number for the relevant period, as measured by the sum of the number of days each bunkering tanker or barge was used as part of the fleet during the period divided by the cumulative number of calendar days in the period multiplied by the number of bunkering tankers at the end of the period. This figure does not take into account non-operating days due to either scheduled or unscheduled maintenance.
6. Special Purpose Vessels consists of the Orion, a 550 dwt tanker which is based in our Greek market.
7. As of March 31, 2013, the Company owned one Aframax tanker, the Leader as a floating storage facility in the United Arab Emirates. Additionally, the Company operates a barge, the Mediterranean, as a floating storage facility in Greece and a small tanker, the Tapuit, as a floating storage facility in Northern Europe. The Company also has on-land storage facilities in Portland, Las Palmas and Tangiers.
The ownership of storage facilities allows the Company to mitigate its risk of supply shortages. Generally, storage costs are included in the price of refined marine fuel quoted by local suppliers. The Company expects that the ownership of storage facilities will allow it to convert the variable costs of this storage fee mark-up per metric ton quoted by suppliers into fixed costs of operating its owned storage facilities, thus enabling the Company to spread larger sales volumes over a fixed cost base and to decrease its refined fuel costs.
8. Working capital is defined as current assets minus current liabilities. Working capital excluding cash and debt is defined as current assets minus cash and cash equivalents minus restricted cash minus current liabilities plus short-term borrowings plus current portion of long-term debt.
9. Net income as adjusted for non-cash items, such as depreciation, provision for doubtful accounts, restricted stock, amortization, deferred income taxes, loss on sale of vessels, net, unrealized loss/(gain) on derivatives and unrealized foreign exchange loss/(gain), net, is an industry standard used to assist in evaluating a company’s ability to make quarterly cash distributions. Net income as adjusted for non-cash items is not recognized by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by accounting principles generally accepted in the United States.
First Quarter 2013 Dividend Announcement
On May 15, 2013, the Company’s Board of Directors declared a first quarter 2013 dividend of $0.01 per share payable on June 12, 2013 to shareholders of record as of May 29, 2013. The dividend amount was determined in accordance with the Company’s dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company’s Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.
Conference Call and Webcast Information
Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast on Thursday, May 16, 2013 at 8:30 a.m. Eastern Time, to discuss its first quarter results. Investors may access the webcast and related slide presentation, by visiting the Company’s website at www.ampni.com, and clicking on the webcast link. The conference call also may be accessed via telephone by dialing (888) 430-8705 (for U.S.-based callers) or (719) 325-2281 (for international callers) and enter the passcode: 2955268.
A replay of the webcast will be available soon after the completion of the call and will be accessible on www.ampni.com. A telephone replay will be available through May 30, 2013 by dialing (888) 203-1112 or (for U.S.-based callers) or (719) 457-0820 (for international callers) and enter the passcode: 2955268.
About Aegean Marine Petroleum Network Inc.
Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in 20 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore, Morocco, the Antwerp-Rotterdam-Amsterdam (ARA) region, Las Palmas, Tenerife, Panama and Hong Kong, and plans to commence operations in Barcelona, Spain during the second quarter of 2013. The Company has also entered into a strategic alliance to extend its global reach to China. To learn more about Aegean, visit http://www.ampni.com.
Cautionary Statement Regarding 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,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “may,” “should,” “expect” 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 our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements 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.
SOURCE Aegean Marine Petroleum Network Inc.