Navios Maritime Partners, L.P. (NYSE:NMM)’s Share Price Advances After It Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2016

International owner and operator of container and dry bulk vessels, Navios Maritime Partners, L.P. (NYSE:NMM), reported financial results for Q3, 2016.

MONACO, Nov. 14, 2016 (GLOBE NEWSWIRE) — Navios Maritime Partners L.P. (“Navios Partners” or the “Company”) (NMM), an international owner and operator of container and dry bulk vessels, today reported its financial results for the third quarter and nine months ended September 30, 2016.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “For the third quarter of 2016, we recorded $50.3 million of revenue and $13.4 million of EBITDA. Our results were affected by one-time impairment charges on the sale of shares received in connection with HMM’s out-of-court restructuring. Yet, in a difficult dry bulk and container market, the Company has materially improved the Term Loan B collateral package, solidified its balance sheet and added liquidity.”

Angeliki Frangou continued, “Navios Partners is a unique platform in the dry sector. Since the beginning of 2016, we have repaid almost $107 million of debt and have net debt to book capitalization of 42.9%. In addition, we have no significant debt maturities until 2018.  Under our current cost structure and with current spot market rates, we expect to generate about $21 million in free cash flow for the remainder of 2016 and about $84 million in free cash flow for 2017.”

Debt Developments

  1. $30.2 million reduction of commercial bank loans

In November 2016, the Company reduced one of its commercial bank facilities by $30.2 million through prepayment of $28.0 million in cash and achieving a $2.2 million benefit to nominal value. Following the prepayment, six vessels were removed from the collateral package. The outstanding balance of the facility is currently $41.8 million and is repayable in the fourth of quarter of 2017 with a final balloon payment of $31.9 million.

  1. $50.5 million additional collateral to the Term Loan B

In November 2016, Navios Partners provided $50.5 million additional collateral to the Term B Loan consisting of:

  1. $37.0 million value of six drybulk vessels transferred from commercial bank facilities; and
  2. $13.5 million cash collateral. The cash collateral will be replaced with a Capesize vessel that is expected to be delivered within December 2016.

Following the above additions, within 2016, Navios Partners has increased the collateral package of the Term Loan B by $99.0 million and $152.5 million from Q1 2015. In addition, Navios Partners has prepaid $25.0 million during the first half of 2016.

Fleet Update

In October 2016, Navios Partners agreed to acquire a 2004 built Capesize vessel, for a total cash consideration of $15.1 million and paid a deposit of 10% in November 2016. The vessel is expected to be delivered in the fourth quarter of 2016. Upon delivery, the vessel will be added as collateral to the Term Loan B.

Charter developments

On August 31, 2016, one of the Company’s charterers, Hanjin Shipping Corporation Ltd. (“Hanjin”), filed for rehabilitation. Navios Partners had two Capesize vessels chartered to Hanjin at a net rate of $29,356 per day until December 2020. In September, both vessels were redelivered to Navios Partners’ commercial management and were rechartered to third parties. Navios is closely monitoring the developments and is proceeding with claims for the lost revenues.

Long-Term Cash Flow

Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of 2.7 years. Navios Partners has currently contracted out 99.1% of its available days for 2016, 58.8% for 2017 and 36.9% for 2018, including index-linked charters, respectively, expecting to generate revenues of approximately $192.2 million, $103.0 million and $82.4 million, respectively. The average expected daily charter-out rate for the fleet is $17,614, $23,742 and $26,690 for 2016, 2017 and 2018, respectively.

EARNINGS HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Partners has compiled consolidated statements of income for the three and nine months ended September 30, 2016 and 2015. The quarterly 2016 and 2015 information was derived from the unaudited condensed consolidated financial statements for the respective periods. Adjusted EBITDA, Earnings per Common unit, Adjusted Net Income and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners’ results.

  1. Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Common unit for the three months ended September 30, 2016 have been adjusted to exclude a $19.4 million loss on the disposal of the HMM shares.

 (2) Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Common unit for the nine months ended September 30, 2016 have been adjusted to exclude a $19.4 million loss on the disposal of the HMM shares and a $17.2 million impairment loss on one of our vessels.

(3) Adjusted Net Income and Adjusted Earnings per Common unit for the three and nine months ended September 30, 2016 do not include the $20.5 million loss from the non-cash accelerated amortization of the intangible assets relating to two vessels.

Three month periods ended September 30, 2016 and 2015

Time charter and voyage revenues for the three month period ended September 30, 2016 decreased by $6.8 million or 11.8% to $50.3 million, as compared to $57.1 million for the same period in 2015. The decrease was mainly attributable to the decrease in TCE to $16,968 per day for the three month period ended September 30, 2016, from $20,305 per day for the three month period ended September 30, 2015. The decrease in time charter and voyage revenues was primarily due to the decline in the freight market during 2016, as compared to the same period in 2015. The above decrease was partially mitigated by the increase in available days of the fleet to 2,812 days for the three month period ended September 30, 2016, as compared to 2,768 days for the three month period ended September 30, 2015 mainly due to approximately 84 drydock days during the third quarter of 2015.

EBITDA for the three months ended September 30, 2016 was negatively affected by the accounting effect of a $19.4 million loss on the disposal of the HMM shares. Excluding this item, Adjusted EBITDA decreased by $8.0 million to $32.9 million for the three month period ended September 30, 2016, as compared to $40.9 million for the same period in 2015. The decrease in Adjusted EBITDA was primarily due to a: (i) $6.8 million decrease in revenue; (ii) $2.5 million increase in other expense; (iii) $0.5 million increase in general and administrative expenses; and (iv) $0.4 million increase in management fees. The above decrease was partially mitigated by a: (i) $0.3 million decrease in time and voyage charter expenses; and (ii) $1.7 million increase in other income.

The reserve for estimated maintenance and replacement capital expenditures for the three month period ended September 30, 2016 and 2015 was $3.0 million and $3.5 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated Operating Surplus for the three month period ended September 30, 2016 of $23.2 million, compared to $30.4 million for the three month period ended September 30, 2015. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Net income for the three months ended September 30, 2016 was negatively affected by the accounting effect of a $19.4 million loss on the disposal of the HMM shares and a $20.5 million loss from the non-cash accelerated amortization of the intangible assets relating to two vessels. Excluding these items, Adjusted net income for the three months ended September 30, 2016 amounted to $6.1 million compared to $11.8 million for the three months ended September 30, 2015. The decrease in Adjusted net income of $5.7 million was due to a: (i) $8.0 million decrease in adjusted EBITDA; and (ii) $0.4 million increase in direct vessel expenses, comprising of the amortization of dry dock and special survey costs. The above decrease was partially mitigated by a: (i) $2.3 million decrease in depreciation and amortization expense (ii) $0.3 million decrease in interest expenses and finance cost, net; and (iii) $0.1 million increase in interest income.

Nine month periods ended September 30, 2016 and 2015

Time charter and voyage revenues for the nine month period ended September 30, 2016 decreased by $29.5 million or 17.3% to $140.9 million, as compared to $170.4 million for the same period in 2015. The decrease was mainly attributable to the decrease in TCE to $16,165 per day for the nine month period ended September 30, 2016, from $20,267 per day for the nine month period ended September 30, 2015. The decrease in time charter and voyage revenues was primarily due to the decline in the freight market during 2016, as compared to the same period in 2015, and was partially mitigated by an increase in revenue due to the delivery of the MSC Cristina in the second quarter of 2015. As a result of the vessel acquisition in April 2015, available days of the fleet increased to 8,442 days for the nine month period ended September 30, 2016, as compared to 8,199 days for the nine month period ended September 30, 2015.

EBITDA for the nine months ended September 30, 2016 was negatively affected by the accounting effect of a $17.2 million impairment loss on the sale of the MSC Cristina and a $19.4 million loss on the disposal of the HMM shares. Excluding these items, Adjusted EBITDA decreased by $27.6 million to $89.9 million for the nine month period ended September 30, 2016, as compared to $117.5 million for the same period in 2015. The decrease in Adjusted EBITDA was primarily due to a: (i) $29.5 million decrease in revenue; (ii)  $2.3 million increase in management fees due to the increased number of vessels and the increased daily management fee; (iii)  $1.7 million increase in general and administrative expenses; and (iv)  $3.1 million increase in other expenses. The above decrease was partially mitigated by a: (i) $1.5 million decrease in time charter and voyage expenses; and (ii) $7.6 million increase in other income.

The reserve for estimated maintenance and replacement capital expenditures for the nine month periods ended September 30, 2016 and 2015 was $8.9 million and $10.2 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated operating surplus for the nine month period ended Septembers 30, 2016 of $60.9 million, compared to $87.6 million for the nine month period ended September 30, 2015. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Net income for the nine months ended September 30, 2016 was negatively affected by the accounting effect of a $17.2 million impairment loss on the sale of the MSC Cristina, $19.4 million loss on the disposal of the HMM shares and a $20.5 million loss from the non-cash accelerated amortization of the intangible assets relating to two vessels. Excluding these items, Adjusted net income for the nine month period ended September 30, 2016 amounted to $6.7 million compared to $34.0 million for the nine month period ended September 30, 2015. The decrease in Adjusted net income of $27.3 million was due to a: (i) $27.6 million decrease in adjusted EBITDA; and (ii) $2.1 million increase in direct vessel expenses, comprising of the amortization of dry dock and special survey costs. The above decrease was partially mitigated by a: (i) $1.9 million decrease in depreciation and amortization expense, (ii) $0.4 decrease in interest expense and finance cost, net and (ii) $0.2 million increase in interest income.

Fleet Employment Profiles

(1         )           Available days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues.

(2         )           Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.

(3         )           Fleet utilization is the percentage of time that Navios Partners’ vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydockings or special surveys.

(4         )           TCE rates: TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.

Conference Call details:

Navios Partners’ management will host a conference call today, Monday, November 14, 2016 to discuss the results for the third quarter and nine months ended September 30, 2016.

Call Date/Time: Monday, November 14, 2016 at 8:30 am ET

Call Title: Navios Partners Q3 2016 Financial Results Conference Call

US Dial In: +1.866.394.0817

International Dial In: +1.706.679.9759

Conference ID: 9002 0668

The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:

US Replay Dial In: +1.800.585.8367

International Replay Dial In: +1.404.537.3406

Conference ID: 9002 0668

Slides and audio webcast:

There will also be a live webcast of the conference call, through the Navios Partners website (www.navios-mlp.com) under “Investors”. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A supplemental slide presentation will be available on the Navios Partners’ website under the “Investors” section by 8:00 am ET on the day of the call.

About Navios Maritime Partners L.P.

Navios Partners (NMM) is a publicly traded master limited partnership which owns and operates container and dry cargo vessels. For more information, please visit our website at www.navios-mlp.com.

Original Source

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Navios Maritime Partners, L.P. (NYSE:NMM) shares have moved +12.99% on the news thus far today and have traded in the range of $1.62 – 1.80 during the current session. In order to take a look at where the stock might be headed longer term, investors often look to research firms that cover the stock. Sell-side research firms currently have a consensus one-year price target of $1.41 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  The sell-side analysts are projecting earnings per share of $-0.04 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $0.04 per share according to First Call.

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In looking at where the stock is trading on a technical level, the stock is trading +27.50% away from its 50-day moving average of $1.36.  Based on the most recent available data, the equity is -64.71% off of its 52-week high of $4.93 and +120.25% away from its 52-week low which is $0.79.

In taking a look at the company’s valuation, the firm’s price to earnings ratio stands at 49.71.  This is a crucial indicator investors watch as higher ratios compared to peers, would suggest higher future earnings growth potential for the stock.  The price to current year EPS estimates from research analysts currently stands at 43.50.

Today, the stock opened at $1.80 and the last bid at the time of writing stood at $1.74.  During the session thus far, the equity dipped down to $1.62 and touched $1.80 as the high point.  Navios Maritime Partners, L.P. (NYSE:NMM) has a market cap of $147.51M and has seen an average daily volume of 378,928 over the past three months.

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