Navigator Holdings Ltd. Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on February 29, 2016, reports the preliminary fourth quarter and full-year 2015 financial results for Navigator Holdings Ltd. (NYSE: NVGS). The Company is the owner and operator of the world's largest fleet of handysize liquefied gas carriers, transporting liquefied petroleum gas, petrochemical gases, and ammonia. As of December 31, 2015, the fleet consisted of 29 vessels in operation, with eight newbuildings on order for delivery between April 2016 and July 2017.
Key Financial Metrics
| Metric | Q4 2015 | Q4 2014 | Full Year 2015 | Full Year 2014 |
|---|---|---|---|---|
| Operating Revenue | $78.7 million | $78.4 million | $315.2 million | $304.9 million |
| Net Income | $23.8 million | $25.3 million | $98.1 million | $87.7 million |
| Earnings Per Share (Basic) | $0.43 | $0.46 | $1.77 | $1.59 |
| EBITDA | $45.6 million | $44.1 million | $182.1 million | $161.3 million |
| Cash and Cash Equivalents (Year End) | $87.8 million (Dec 31, 2015) | |||
| Total Debt (Current + Non-Current) | $505.3 million (Dec 31, 2015) |
Liquidity and Balance Sheet: Total assets increased to $1.57 billion from $1.38 billion in 2014. Stockholders' equity rose to $910.1 million. Net cash provided by operating activities for the full year 2015 was $149.6 million.
Material Changes vs. Prior Period
- Revenue Growth: Full-year operating revenue increased 3.4% to $315.2 million, driven by additional vessels in the fleet. Q4 revenue was flat at $78.7 million.
- Profitability: Full-year net income rose 11.8% to $98.1 million. Q4 net income decreased 6.0% to $23.8 million due to lower utilization and rates.
- Operational Rates: The average time charter equivalent rate for Q4 2015 was $921,069 per month, down from $932,170 in Q4 2014. Fleet utilization dropped to 92.7% in Q4 2015 from 94.8% in Q4 2014.
- Restatement: Financial data for 2014 and interim 2015 periods were restated due to an error in interest capitalization. This adjustment increased 2015 net income by $4.5 million and 2014 net income by $3.3 million.
Outlook, Risks, and Unusual Items
- Navigator Aries Incident: The vessel was involved in a collision on June 28, 2015, and was off-hire for repairs during Q4 2015. Repairs are complete, and the vessel is expected to take up a one-to-two-year time charter in Indonesia. The incident reduced Q4 2015 EPS by approximately $0.05 and full-year 2015 EPS by approximately $0.10.
- Fleet Expansion: Navigator Ceto was delivered on January 15, 2016. Eight newbuildings remain on order.
- Asset Sale: The Company sold the vessel Navigator Mariner in August 2015, realizing a profit of $0.55 million.
- Forward-Looking Risks: Management highlighted risks including future operating results, charter rates, vessel availability, financing capabilities, and potential liability from litigation.
Investor Verification Checklist
- Verify the impact of the interest capitalization restatement on comparative 2014 figures and the specific accounting treatment in the upcoming Form 20-F.
- Confirm the timing and terms of the new time charter for the repaired vessel, Navigator Aries.
- Monitor the delivery schedule and chartering status of the eight remaining newbuildings.
- Review the reconciliation of EBITDA to net income in Appendix A to ensure consistency with GAAP measures.
- Assess the Company's liquidity position given the $236.6 million cash outflow for vessels under construction in 2015.