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Scorpio Bulkers Inc. Announces Financial Results For The Third Quarter Of 2015

The following excerpt is from the company's SEC filing.

MONACO-(Marketwired -

November 2, 2015

) - Scorpio Bulkers Inc. (NYSE: SALT) (“Scorpio Bulkers,” or the “Company”) today reported its results for the three and

months ended

September 30, 2015

Results for the

three and nine

For the three months ended

, the Company’s adjusted net loss was

$16.3 million

adjusted loss per diluted share, which excludes (i) a loss / write down on assets held for sale of

$0.3 million

and (ii) the

$1.4 million

write off of a portion of the deferred financing costs of two credit fa cilities, or

loss per diluted share (see Non-GAAP Measures section below). For the three months ended

, the Company had a GAAP net loss of

$18.1 million

loss per diluted share. This loss includes the loss / write down on assets held for sale, the write off of a portion of deferred financing costs accumulated on two credit facilities for which the commitments were reduced pursuant to the removal from the facilities of certain vessels that have been classified as held for sale, and the noncash amortization of stock-based compensation of

$6.3 million

September 30, 2014

, the Company had a net loss of

$18.9 million

loss per diluted share including noncash amortization of stock-based compensation of

$49.7 million

$151.7 million

$7.3 million

write off of a portion of the deferred financing costs of three credit facilities, or

$208.8 million

loss per diluted share. This loss includes the loss / write down on assets held for sale, the write off of a portion of deferred financing costs accumulated on three credit facilities for which the commitments were reduced pursuant to the removal from the facilities of certain vessels that have been classified as held for sale, and the noncash amortization of stock-based compensation of

$18.5 million

$44.6 million

$17.6 million

Recent Significant Events

Fleet Financing Update and Credit Facility Amendments

Including the credit facilities described below, the Company has now either signed credit facility agreements or received commitments for 59 of the 60 vessels in its fleet. In addition, the Company has received a proposal from a leading European financial institution to finance a portion of the cost of our one remaining unfinanced dry bulk vessel. The terms and conditions of this facility, for which commitment is expected during the fourth quarter of 2015, are consistent with those of the Company's existing credit commitments. The closing of any resultant credit facilities would remain subject to credit approval and customary conditions precedent, including negotiation and execution of definitive documentation.

Between September 30, 2015 and October 30, 2015, the Company reached agreements to amend each of its loan agreements such that the interest coverage ratio, as defined in each agreement, will not be applicable until the first quarter of 2017, at which point the ratio will be 1.00 to 1.00 and will be calculated on a year-to-date basis for calendar year 2017. Prior to these amendments, the interest coverage ratio was applicable to the third quarter of 2015; however, because the Company has no consolidated net interest expense through September 30, 2015, this covenant would not have been applicable for the period ended September 30, 2015.

$411.3 Million Credit Facility

On July 14, 2015, the Company's $411.3 million senior secured credit facility, which was expected to finance a portion of the purchase price of seven Capesize vessels under construction at Sungdong Shipbuilding & Marine Engineering Co., Ltd., was further reduced by approximately $34 million pursuant to the sale of one Capesize vessel contract described below, and the facility will be used to finance a portion of the purchase price of six Capesize vessels, three of which have been delivered. Please refer to the table below which shows the amounts outstanding and amounts available on this credit facility as of October 29, 2015. As a result of this reduction, we wrote off approximately $0.9 million of deferred financing costs accumulated on this facility which

represents the portion of the facility that can no longer be utilized. This write off is reflected in financial expense, net in the Consolidated Statement of Operations.

330 Million Credit Facility

On August 4, 2015, our $330 Million Credit Facility, which was to finance a portion of the purchase price of 22 of our newbuilding vessels (consisting of 16 Ultramax vessels and six Kamsarmax vessels), was reduced by $15 million pursuant to the sale of one of the Ultramax vessel contracts. Please refer to the table below which shows the amounts outstanding and amounts available on this credit facility as of October 29, 2015. As a result of this reduction, we wrote off approximately $0.5 million of deferred financing costs accumulated on this facility which represents the portion of the facility that can no longer be utilized. This write off is reflected in financial expense, net in the Consolidated Statement of Operations.

$76.5 Million Credit Facility

On October 12, 2015, the Company entered into a $76.5 million credit agreement with ABN AMRO Bank N.V. and The Export-Import Bank of China for a senior secured loan facility. This facility was arranged by ABN AMRO Bank N.V., with insurance cover to be provided from China Export & Credit Insurance Corporation, or Sinosure. The insurance coverage has now recently been approved by Sinosure. This credit facility will be used to finance a portion of the purchase price of three Capesize vessels (of which one vessel has been delivered for which we borrowed $26 million in bridge financing, a second vessel delivered during Q4 2015 and one vessel is currently under construction at Shanghai Waigaoqiao Shipbuilding Co., Ltd., China for delivering in Q4 2015). The terms and conditions of this facility, including covenants, are similar to those in the Company's existing credit facilities and customary for financings of this type. This facility supplants the commitment for the $230.3 Million Credit Facility, described in prior press releases, which would have been used to finance a portion of the purchase price of seven Capesize vessels.

Proposed $13.5 Million Upsize to the $42 Million Credit Facility

On September 30, 2015, we received a commitment from a leading European financial institution for a $13.5 million upsize to our original $42 million senior secured credit facility. The proceeds of the upsized commitment will finance a portion of the purchase price of one Ultramax vessel that was delivered to the Company in Q3 2015 from Imabari Shipbuilding Co. Ltd. This facility is expected to mature in September 2021. The terms and conditions of this facility, including covenants, are similar to those in the Company's existing credit facilities and customary for facilities of this type. The closing of this loan facility is subject to customary conditions precedent, including the execution of definitive documentation.

Proposed $27.25 Million Credit Facility

On October 5, 2015, we received a commitment from ABN AMRO Bank N.V. for a $27.25 million senior secured loan facility. The proceeds of this facility are expected to finance a portion of the purchase price of two Ultramax vessels currently under construction at Imabari Shipbuilding Co. Ltd., with expected deliveries in Q1 2016. This facility is expected to have two tranches, which are expected to mature 5 years from the date of drawdown of each vessel. The terms and conditions of this facility, including covenants, are similar to those in the Company's existing credit facilities and customary for facilities of this type. The closing of this loan facility is subject to customary conditions precedent, including the execution of definitive documentation.

Summary of Voyages Fixed Thus Far in the Fourth Quarter of 2015

Below is a summary of the voyages fixed thus far in the fourth quarter of 2015:

For the Kamsarmax fleet: approximately $7,900 per day for 55% of the days

For the Ultramax fleet: approximately $7,900 per day for 56% of the days

For the Capesize fleet: approximately $11,900 per day for 81% of the days

Vessel Sale Program Update

During the three months ended September 30, 2015, we completed the sale of 11 newbuilding contracts that we had classified as assets held for sale at June 30, 2015, consisting of four LR2 newbuilding product tankers, two newbuilding Aframax tankers, three Capesize newbuilding vessels, one Kamsarmax newbuilding vessel and one Ultramax newbuilding vessel. This brings the total newbuilding contract sales to 20. We are no longer under any obligation for remaining contractual installments under those contracts.

Newbuilding Vessels Deliveries

Between July 1, 2015 and

October 29, 2015

the Company has taken delivery from shipyards of the following newbuilding vessels:

SBI Echo, an Ultramax vessel, was delivered from Imabari Shipbuilding Co., Ltd.

SBI Montesino, a Capesize vessel, was delivered from Sungdong Shipbuilding & Marine Engineering Co., Ltd.

SBI Lyra, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd.

SBI Rumba, a Kamsarmax vessel, was delivered from Imabari Shipbuilding Co., Ltd.

SBI Tango, an Ultramax vessel, was delivered from Imabari Shipbuilding Co., Ltd.

SBI Maia, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co. Ltd.

SBI Subaru, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd.

SBI Hydra, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co. Ltd.

SBI Capoeira, a Kamsarmax vessel, was delivered from Hudong-Zhonghua (Group) Co., Ltd.

SBI Electra, a Kamsarmax vessel, was delivered from Jiangsu Yangzijiang Shipbuilding Co., Ltd.

SBI Valrico, a Capesize vessel, was delivered from Shanghai Waigaoqiao Shipbuilding Co., Ltd.

SBI Pegasus, an Ultramax vessel, was delivered from Chengxi Shipyard Co. Ltd.

SBI Carioca, an Ultramax vessel, was delivered from Hudong-Zhonghua (Group) Co., Ltd.

SBI Magnum, a Capesize vessel, was delivered from Sungdong Shipbuilding & Marine Engineering Co., Ltd.

SBI Conga, a Kamsarmax vessel, was delivered from Hudong-Zhonghua (Group) Co., Ltd.

SBI Flamenco, a Kamsarmax vessel, was delivered from Jiangsu Yangzijiang Shipbuilding Co., Ltd.

SBI Ursa, an Ultramax...


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