EARNINGS CONFERENCE CALL Third Quarter & Period Ended September 30, 2011

Transcription

1 EARNINGS CONFERENCE CALL Third Quarter & Period Ended September 30, 2011

2 Disclosures and Forward Looking Statements This presentation contains certain statements that may be deemed to be forward-looking statements within the meaning of the Securities Act. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, the outlook for fleet utilization and shipping rates, general industry conditions including bidding activity, future operating results of the Company s vessels, capital expenditures, asset sales, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of the world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, changes in our vessel operating expenses, including drydocking, crewing and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to perform these obligations under sales agreements and charter contracts on a timely basis, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further described in reports filed by Box Ships Inc. with the Securities and Exchange Commission. 2

3 Agenda 3Q 2011 Financial Highlights Company Update Industry Overview Financial Update Investment Summary 3

4 Company Overview Box Ships Inc. NYSE: TEU - Formed by Paragon Shipping Inc. (NYSE: PRGN) to pursue growth opportunities in the container industry. - Paragon Shipping and the CEO of TEU and PRGN own approximately 21.3% and 11% of outstanding TEU stock. - Positioned TEU in the mid-size segment, the work horses of the industry. Initial Fleet - Six containerships with an average age of 2.7 years and total carrying capacity of over 28,000 TEU s. - Vessels purchase price of $328 million (funded by stock, cash and debt). Additional Acquisitions - Purchased a 2004 built, 5,060 TEU containership for $55m financed with debt. Quarterly Dividend - Declared for the third quarter 2011 a $0.30 dividend and expect to pay the same amount in 4Q Supported by the investment in modern containership vessels with fixed employment and high utilization rate. - Current TEU-weighted time charter average duration is 30 months with 100%, 93% and 71% fixed employment for 2011, 2012 and 2013, respectively. Moderate Leverage - Manageable debt repayment schedule supported by high employment coverage. - 52% Net Debt to Total Capitalization. 4

5 Financial Highlights 3 Months Ended Period Ended September 30, 2011 September 30, 2011 Average No. of Vessels No. of Vessels at the end of the period 7 7 Average Daily TCE Rate $ 24,371 $ 24,194 Time Charter Revenues $ 15,326,056 $ 22,551,885 EBITDA $ 10,113,764 $ 14,698,949 Net Income $ 5,120,358 $ 7,379,328 EPS $ 0.32 $ 0.48 DPS $ 0.30 $ 0.45 Weighted average shares outstanding 16,000,000 15,126,953 Shares outstanding 16,108,000 16,108,000 5

6 Company Overview

7 A Young Fleet With A Diversified Portfolio of Charterers Our current TEU-weighted time charter average duration is 30 months Charter Overview Vessel Year Built Capacity (TEU) Charterer Charter Rate ($/Day) Remaining T/C Term Box Trader ,426 20,000 9 months Box Voyager ,426 20,000 9 months Aug-12 Aug-12 CMA CGM Kingfish ,095 23, months Apr-14 CMA CGM Marlin ,095 23, months MSC Emma ,060 28, months 1 May-14 Aug-14 Aug-15 MSC Siena ,546 28, months 2 Jan-14 Jan-18 Maule ,589 38, months 3 May-16 Fleet Average age / Capacity 3.9 Years 33,237 Base Charter Period Option Period Notes: 1 Charterer has option to extend term of charter for one additional, one-year term at the same gross daily charter rate ($28,500) 2 Charterer has option to extend term of charter for four additional, one-year terms at the same gross daily charter rate ($28,000) 3 Charterer has option to purchase the vessel upon expiration of the charter for $57mm (less 0.5% purchase commission) 4 Based on the latest redelivery dates Fixed Revenue Days 4 100% 93% 71% 7

8 Moderate Leverage $19.4 million of scheduled debt repayments through the end of 2012 Our dividend payments are after debt repayments Leverage Ratio 1 Scheduled Loan Repayments (USD Million) Cash $ 17 m Book Equity (as of Sept. 30, 2011) $ 181 m Box Trader/Box Voyager/Maule Facility $ 96 m CMA CGM Kingfish/Marlin Facility $ 43 m MSC Emma Facility $ 30 m MSC Siena Facility $ 29 m Paragon Facility $ 15 m Total Debt $ 213 m Net Debt $ 196 m Total Capitalization $ 377 m Net Debt/Total Capitalization 52% Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Debt Outstanding Scheduled Loan repayments Paid Installments Notes: 1 As of November 11,

9 Attractive Yield Declared second consecutive dividend on November 11 th of $0.30 per share Dividend substantially all of our operating cash flow less debt amortization TEU has the highest yield among US Listed Container Companies 14.00% 12.00% 11.92% PEER GROUP YIELD COMPARISON (1) 10.00% 8.00% 6.00% 8.68% 6.38% 4.00% 2.00% 0.00% 2.39% 0.00% 0.00% TEU CMRE SSW DCIX GSL DAC Notes: 1 Calculation is based on the last reported dividend annualized and share prices as of November 11 th, 2011 (after market close) Source: Companies fillings 9

10 Industry Overview

11 USD Million USD Historical Asset Values and Charter Rates Well positioned to weather the downturn in the industry Secondhand Vessel Prices 3,500 TEU (5 yr) 1 Year Time Charter Rate 3,500 TEU 70 5 Year Old Secondhand Price 60 Average since ,000 1 Year T/C Rate Average since , , , , Source: Clarkson s Shipping Intelligence October

12 Expected Containerships Demand Growth 20.0% Global Container Demand Historically Grows at 2.4x Global GDP 15.0% 10.0% 9.5% 9.6% 10.7% 11.3% 11.5% 5.0% 0.0% -5.0% -10.0% -15.0% World GDP Growth Rate Container Demand Growth Rate 2.4x World GDP Growth Rate Source: IMF, Braemar Seascope 12

13 '000 TEU '000 TEU Supply Side Orderbook is at Low Levels The Containership Orderbook stands at 29% of the current fleet, which remains low 70% of the current Orderbook is in sizes above 8,000 TEU Orderbook Current Fleet vs Orderbook 1,800 16,000 70% 1,600 14,000 60% 1,400 1,200 1, ,000 10,000 8,000 6,000 4,000 2,000 50% 40% 30% 20% 10% 0 Remaining % teu 1,000-2,999 teu 3,000-7,999 teu 8,000+ teu Global Fleet Orderbook Orderbook as a % of Global Fleet Source: Clarkson s Shipping Intelligence October

14 Y-o-Y Growth Fleet Growth vs Projected Demand for Tonnage Projections reveal tonnage demand to exceed fleet growth 12% 10% 8% 10.3% 9.6% 8.9% 9.2% 10.9% 10.3% 10.0% Additional Capacity Required 10.4% 7.2% 7.0% 6% 4% Fleet Growth Tonnage Demand Growth 2% 0% Source: Maersk Broker Research 14

15 Financial Overview

16 Operating Performance Quarter Ended September 30, 2011 Fleet Data Average number of vessels 6.64 Available days for fleet 611 Calendar days for fleet 611 F leet utiliz ation 100% Average Daily Results Time Charter Equivalent $ 14,890,711 24,371 % of TCE Vessel operating expenses 3,503,483 5, % Management fees 545, % G&A expenses 766,866 1, % Total Vessel Operating Expenses (TVOE) $ 4,816,077 7, % Other expenses (income) (39,130) (64) -0.26% EBITDA $ 10,113,764 $ 16, % Loan interest 1,817,776 2, % Loan repayments 3,625,000 5, % Add back: Non-cash items 1 (495,886) (812) -3.33% Free Cash Flow $ 5,166,874 $ 8, % 1 Non-cash items relate to the amortization of above / below market acquired time charters and share-based compensation 16

17 USD Per Day USD Million Fleet-wide Per Day Projections With strong charter coverage, we expect little fluctuations in our free cash flow Declared a dividend of $0.30 per share in the third quarter 30,000 Breakdown of Average Daily Results (1) $25,084 $24, Free Cash Flow During The Period (1) 25,000 20,000 8,456 7,742 15,000 5,933 6, Dividend 10,000 2,975 2,819 5,000 7,720 7, Q11A 4Q11E 4.0 3Q11A 4Q11E TVOE Debt Repayments Interest Expense Free Cash Flow 1 Please see appendix for assumptions used in calculations 17

18 Key Take-Aways Well-positioned in the mid-size segment, with strong industry fundamentals Young, high-quality fleet with an average age of 3.9 years Visible revenues with 100%, 93% and 71% fixed for 2011, 2012 and 2013, respectively, and an average charter life of 30 months Moderate leverage of 52% Free cash flows after debt repayments support attractive dividend of $0.30 per share 18

19 Appendix 19

20 Focused on the Work Horses Class Cargo Capacity (TEU) Typical Cargo Very Large 10,000+ Consumer goods Industrial products Intermediate and finished goods Large 8,000 9,999 Consumer goods Industrial products Intermediate and finished goods Post-Panamax 5,000 7,999 Consumer goods Industrial products Intermediate and finished goods Panamax 3,000 4,999 Consumer goods Industrial products Intermediate and finished goods Sub-Panamax 2,000 2,999 Consumer goods Industrial products Intermediate and finished goods Handy 1,000 1,999 Consumer goods Industrial products Intermediate and finished goods Feeder Consumer goods Industrial products Intermediate and finished goods Total # of % of Fleet by Routes Total TEU (000) Vessels TEU East-West East-West 244 2, Deep sea East-West trade routes Deep sea East-West trade routes 521 3, , Intermediate 714 1, Intermediate 1,214 1, Intra-regional 1, Source: Drewry 20

21 Income Statement 3Q11 000's (except for share and per share data) 3 Months Ended September 30, 2011 Revenue Time charter revenue $15,326 Less: Commisssions 338 Net Revenue 14,988 Ex penses Voyage ex penses 97 Vessel operating expenses 3,503 Management fees 546 Depreciation 3,1 7 6 General & adm inistrative ex penses 767 Total Operating Expenses 8,089 Operating Income 6,899 Other Income / (Expense) Interest and finance costs (1,820) Interest incom e 2 F oreign currency gain 39 Total Other Expenses, net (1,779) Net Income Weighted average number of shares Earnings per Common Share $5,120 16,000,000 $

22 Income Statement Period Ended September 30, 's (except for share and per share data) Period Ended September 30, 2011 Revenue Time charter revenue $22,552 Less: Commisssions 500 Net Revenue 22,052 Ex penses Voyage ex penses 108 Vessel operating expenses 5,071 Management fees 811 Depreciation 4,6 7 2 General & administrative expenses 1,401 Total Operating Expenses 12,063 Operating Income 9,989 Other Income / (Expense) Interest and finance costs (2,650) Interest incom e 2 F oreign currency gain 38 Total Other Expenses, net (2,610) Net Income Weighted average number of shares Earnings per Common Share $7,379 15,126,953 $

23 Balance Sheet (US$ 000's) September 30, 2011 Cash and restricted cash (current and non-current) 17,476 Other current assets 3,736 Vessels and other fixed assets, net 370,303 Other non-current assets 13,626 TOTAL ASSETS 405,141 Current liabilities, excluding short-term debt 4,506 Current portion of long-term debt 17,700 Long-term debt 197,925 Long-term liabilities 3,537 TOTAL LIABILITIES 223,668 Stockholders'equity 181,473 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 405,141 23

24 Drydockings 2012 & 2013 Drydocking Schedule for 2012 TEU Next DD Estimated Estimated Quarter Budget (1) Offhire Days (1) CMA CGM Kingfish 5,095 Q $ 500, CMA CGM Marlin 5,095 Q $ 500, Total 2012 $ 1,000, No scheduled drydockings for The costs reflected are estimates based on drydocking our vessels in China. We estimate that each drydock will result in 15 days off-hire. Actual costs may vary on various factors. We expect to fund these costs with cash from operations. 24

25 Non-cash Items 000's Q411 Q112 Q212 Q312 Q412 Amortization of above / below market acquired time charters 1 $497 $492 $492 $497 $497 Share-based compensation $598 $591 $591 $598 $598 Notes: 1. When vessels are acquired with time charters attached and the charter rate on such charters is above or below the then current market rates, the Company allocates the purchase price of the vessel and the attached time charter on a relative fair value basis. The asset or liability recorded is amortized over the remaining period of the time charter as a reduction or addition, respectively, to time charter revenue. 2. As of September 30,

26 Assumptions Used in Our Projections Revenues Contracted periods run until earliest charter redelivery dates. 99% utilization rate is used in calculations, excluding scheduled off-hire. Dry-dock off-hire scheduled for 15 days every five years for all vessels, and assumes a cost of $500,000 per drydocking. Operating Expenses Operating expenses as per company s 2011 budget. Interest Expenses Interest expense calculated based on forward US$ LIBOR curve as of September 30, 2011 (4Q11: 0.45%) 26