lpg_Current_Folio_10Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

FORM 10-Q 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2018

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________   to __________ 

Commission File Number: 001-36437 

 

W:\Word Team jobs\Bridge\2015\11 November\26\Dorian LPG, LTD\8K Earnings Release\Wip\image00001.jpg

Dorian LPG Ltd.

(Exact name of registrant as specified in its charter) 

 

 

 

 

Marshall Islands

 

66-0818228

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

c/o Dorian LPG (USA) LLC

 

06902

27 Signal Road, Stamford, CT

 

 

(Address of principal executive offices)

 

(Zip Code)

 

Registrant's telephone number, including area code: (203) 674-9900

Former name, former address and former fiscal year, if changed since last report: Not Applicable

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer

Accelerated filer  

Non-accelerated filer

 

Smaller reporting company

Emerging growth company  

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No     

As of January 25, 2019, there were 55,177,191 shares of the registrant’s common stock outstanding.

 

 


 

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FORWARD‑LOOKING STATEMENTS

 

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including analyses and other information based on forecasts of future results and estimates of amounts not yet determinable and statements relating to our future prospects, developments and business strategies. Forward-looking statements are generally identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. Forward-looking statements involve risks and uncertainties that may cause actual future activities and results of operations to be materially different from those suggested or described in this quarterly report.

 

These risks include the risks that are identified in the “Risk Factors” section of this quarterly report and of our Annual Report on Form 10-K for the fiscal year ended March 31, 2018, and also include, among others, risks associated with the following:

 

·

our future operating or financial results;

 

·

our acquisitions, business strategy and expected capital spending or operating expenses;

 

·

shipping trends, including changes in charter rates, scrapping rates and vessel and other asset values;

 

·

factors affecting supply of and demand for liquefied petroleum gas, or LPG, shipping;

 

·

changes in trading patterns that impact tonnage requirements;

 

·

potential costs and continuing uncertainty relating to the unsolicited proposal of BW LPG Limited to acquire the Company and the dissident director slate proposal by BW LPG Limited and its affiliates (“BW”), following the withdrawal of those proposals on October 8, 2018 (the “BW Proposal”);

 

·

changes in rules and regulations applicable to the LPG shipping industry, including, without limitation, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries;

 

·

general economic conditions and specific economic conditions in the oil and natural gas industry and the countries and regions where LPG is produced and consumed;

 

·

the supply of and demand for LPG, which is affected by the production levels and price of oil, refined petroleum products and natural gas, including production from U.S. shale fields;

 

·

completion of infrastructure projects to support marine transportation of LPG, including export terminals and pipelines;

 

·

changes to the supply and demand for LPG vessels as a result of the expansion of the Panama Canal;

 

·

oversupply of or limited demand for LPG vessels comparable to ours or higher specification vessels;

 

·

competition in the LPG shipping industry;

 

·

our ability to profitably employ our vessels, including vessels participating in the Helios Pool (defined below);

 

·

the failure of our or the Helios Pool’s significant customers to perform their obligations to us or to the Helios Pool;

 


 

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·

the performance of the Helios Pool;

 

·

the loss or reduction in business from our or the Helios Pool’s significant customers;

 

·

our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate purposes, the terms of such financing and our ability to comply with covenants set forth in our existing and future financing arrangements;

 

·

our costs, including crew wages, insurance, provisions, repairs and maintenance, and general and administrative expenses;

 

·

our dependence on key personnel;

 

·

the availability of skilled workers and the related labor costs;

 

·

the effects of new products and new technology in our industry;

 

·

operating hazards in the maritime transportation industry, including piracy;

 

·

the adequacy of our insurance coverage in the event of a catastrophic event;

 

·

compliance with and changes to governmental, tax, environmental and safety laws and regulations;

 

·

changes in domestic and international political and geopolitical conditions, including the imposition of tariffs or otherwise on LPG or LPG products;

 

·

compliance with the U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act 2010, or other applicable regulations relating to bribery; and

 

·

the volatility of the price of our common shares.

 

 

Actual results could differ materially from expectations expressed in the forward-looking statements in this quarterly report if one or more of the underlying assumptions or expectations proves to be inaccurate or is not realized. You should thoroughly read this quarterly report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this quarterly report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the forward-looking statements by these cautionary statements.

 

We caution readers of this quarterly report not to place undue reliance on forward-looking statements. Any forward-looking statements contained herein are made only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

As used in this quarterly report and unless otherwise indicated, references to “Dorian,” the “Company,” “we,” “our,” “us,” or similar terms refer to Dorian LPG Ltd. and its subsidiaries.

 


 

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Dorian LPG Ltd.

 

TABLE OF CONTENTS

 

 

 

 

 

PART I. 

FINANCIAL INFORMATION

 

 

 

 

ITEM 1. 

FINANCIAL STATEMENTS

 

 

Unaudited Condensed Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018

1

 

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and December 31, 2017 

2

 

Unaudited Condensed Consolidated Statements of Shareholders' Equity for the nine months ended December 31, 2018 and December 31, 2017

3

 

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2018 and December 31, 2017

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

 

 

 

ITEM 2. 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

17

ITEM 3. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

29

ITEM 4. 

CONTROLS AND PROCEDURES

29

 

 

 

 

 

 

PART II. 

OTHER INFORMATION

 

 

 

 

ITEM 1. 

LEGAL PROCEEDINGS

30

ITEM 1A. 

RISK FACTORS

30

ITEM 6. 

EXHIBITS

30

 

 

 

EXHIBIT INDEX 

 

31

SIGNATURES 

 

32

 

 

 

 

 

 

 


 

Table of Contents

PART I — FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

Dorian LPG Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in United States Dollars, except for share data)

 

 

 

 

 

 

 

 

 

 

    

As of

    

As of

 

 

 

December 31, 2018

 

March 31, 2018

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

34,947,580

 

$

103,505,676

 

Trade receivables, net and accrued revenues

 

 

8,203

 

 

336,162

 

Due from related parties

 

 

56,826,894

 

 

26,880,720

 

Inventories

 

 

2,146,557

 

 

2,012,907

 

Prepaid expenses and other current assets

 

 

3,632,923

 

 

2,471,415

 

Total current assets

 

 

97,562,157

 

 

135,206,880

 

Fixed assets

 

 

 

 

 

 

 

Vessels, net

 

 

1,493,150,911

 

 

1,539,111,833

 

Other fixed assets, net

 

 

125,007

 

 

203,678

 

Total fixed assets

 

 

1,493,275,918

 

 

1,539,315,511

 

Other non-current assets

 

 

 

 

 

 

 

Deferred charges, net

 

 

1,750,847

 

 

1,574,522

 

Derivative instruments

 

 

10,354,709

 

 

14,264,899

 

Due from related parties—non-current

 

 

20,900,000

 

 

19,800,000

 

Restricted cash—non-current

 

 

35,635,252

 

 

25,862,704

 

Other non-current assets

 

 

88,200

 

 

85,640

 

Total assets

 

$

1,659,567,083

 

$

1,736,110,156

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade accounts payable

 

$

5,312,513

 

$

6,329,193

 

Accrued expenses

 

 

9,670,170

 

 

4,702,808

 

Due to related parties

 

 

11,162

 

 

345,515

 

Deferred income

 

 

4,558,683

 

 

5,564,557

 

Current portion of long-term debt

 

 

63,968,414

 

 

65,067,569

 

Total current liabilities

 

 

83,520,942

 

 

82,009,642

 

Long-term liabilities

 

 

 

 

 

 

 

Long-term debt—net of current portion and deferred financing fees

 

 

647,362,343

 

 

694,035,583

 

Other long-term liabilities

 

 

1,208,060

 

 

651,569

 

Total long-term liabilities

 

 

648,570,403

 

 

694,687,152

 

Total liabilities

 

 

732,091,345

 

 

776,696,794

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued nor outstanding

 

 

 

 

 

Common stock, $0.01 par value, 450,000,000 shares authorized, 58,869,711 and 58,640,161 shares issued, 55,177,191 and 55,090,165 shares outstanding (net of treasury stock), as of December 31, 2018 and March 31, 2018, respectively

 

 

588,699

 

 

586,402

 

Additional paid-in-capital

 

 

862,295,309

 

 

858,109,882

 

Treasury stock, at cost; 3,692,520 and 3,549,996 shares as of December 31, 2018 and March 31, 2018, respectively

 

 

(36,356,446)

 

 

(35,223,428)

 

Retained earnings

 

 

100,948,176

 

 

135,940,506

 

Total shareholders’ equity

 

 

927,475,738

 

 

959,413,362

 

Total liabilities and shareholders’ equity

 

$

1,659,567,083

 

$

1,736,110,156

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

1


 

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Operations  

(Expressed in United States Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Nine months ended

 

 

    

December 31, 2018

    

December 31, 2017

    

December 31, 2018

    

December 31, 2017

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Net pool revenues—related party

 

$

46,683,295

 

$

31,610,427

 

$

94,816,738

 

$

80,554,166

 

Time charter revenues

 

 

8,370,000

 

 

12,498,849

 

 

28,477,881

 

 

37,570,898

 

Voyage charter revenues

 

 

 —

 

 

335,244

 

 

 —

 

 

2,068,491

 

Other revenues, net

 

 

60,000

 

 

101,069

 

 

270,500

 

 

106,527

 

Total revenues

 

 

55,113,295

 

 

44,545,589

 

 

123,565,119

 

 

120,300,082

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Voyage expenses

 

 

287,221

 

 

386,637

 

 

822,618

 

 

1,901,603

 

Vessel operating expenses

 

 

16,773,634

 

 

15,794,381

 

 

50,834,364

 

 

48,420,108

 

Depreciation and amortization

 

 

16,430,363

 

 

16,466,322

 

 

49,133,072

 

 

49,224,187

 

General and administrative expenses

 

 

5,156,573

 

 

5,536,028

 

 

18,768,996

 

 

19,492,082

 

Professional and legal fees related to the BW Proposal

 

 

7,766,847

 

 

 —

 

 

10,020,436

 

 

 —

 

Total expenses

 

 

46,414,638

 

 

38,183,368

 

 

129,579,486

 

 

119,037,980

 

Other income—related parties

 

 

614,633

 

 

633,883

 

 

1,843,782

 

 

1,905,836

 

Operating income/(loss)

 

 

9,313,290

 

 

6,996,104

 

 

(4,170,585)

 

 

3,167,938

 

Other income/(expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and finance costs

 

 

(10,000,018)

 

 

(8,683,257)

 

 

(30,526,971)

 

 

(24,763,421)

 

Interest income

 

 

413,546

 

 

103,446

 

 

1,326,442

 

 

147,488

 

Unrealized gain/(loss) on derivatives

 

 

(6,669,266)

 

 

3,771,160

 

 

(3,910,190)

 

 

2,053,129

 

Realized gain/(loss) on derivatives

 

 

881,276

 

 

(369,941)

 

 

2,494,832

 

 

(1,418,724)

 

Gain on early extinguishment of debt

 

 

 —

 

 

 —

 

 

 —

 

 

4,117,364

 

Other gain/(loss), net

 

 

(157,480)

 

 

(147,097)

 

 

(205,858)

 

 

(238,465)

 

Total other income/(expenses), net

 

 

(15,531,942)

 

 

(5,325,689)

 

 

(30,821,745)

 

 

(20,102,629)

 

Net income/(loss)

 

$

(6,218,652)

 

$

1,670,415

 

$

(34,992,330)

 

$

(16,934,691)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

54,441,203

 

 

54,086,431

 

 

54,356,060

 

 

54,013,164

 

Diluted

 

 

54,441,203

 

 

54,242,947

 

 

54,356,060

 

 

54,013,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per common share—basic

 

$

(0.11)

 

$

0.03

 

$

(0.64)

 

$

(0.31)

 

Earnings/(loss) per common share—diluted

 

$

(0.11)

 

$

0.03

 

$

(0.64)

 

$

(0.31)

 

 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

2


 

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(Expressed in United States Dollars, except for number of shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

                           

 

Additional

 

                           

 

 

 

 

 

 

common

 

Common

 

Treasury

 

paid-in

 

Retained

 

 

 

 

 

    

shares

    

stock

    

stock

    

capital

    

Earnings

    

Total

 

Balance, April 1, 2017

 

58,342,201

 

$

583,422

 

$

(33,897,269)

 

$

852,974,373

 

$

156,341,192

 

$

976,001,718

 

Net loss for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,689,970)

 

 

(6,689,970)

 

Restricted share award issuances

 

268,464

 

 

2,685

 

 

 —

 

 

(2,685)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,524,217

 

 

 —

 

 

1,524,217

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

(1,084,902)

 

 

 —

 

 

 —

 

 

(1,084,902)

 

Balance, June 30, 2017

 

58,610,665

 

$

586,107

 

$

(34,982,171)

 

$

854,495,905

 

$

149,651,222

 

$

969,751,063

 

Net loss for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(11,915,136)

 

 

(11,915,136)

 

Restricted share award issuances

 

10,062

 

 

100

 

 

 —

 

 

(100)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,175,571

 

 

 —

 

 

1,175,571

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Balance, September 30, 2017

 

58,620,727

 

$

586,207

 

$

(34,982,171)

 

$

855,671,376

 

$

137,736,086

 

$

959,011,498

 

Net income for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,670,415

 

 

1,670,415

 

Restricted share award issuances

 

9,714

 

 

97

 

 

 —

 

 

(97)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,277,431

 

 

 —

 

 

1,277,431

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Balance, December 31, 2017

 

58,630,441

 

$

586,304

 

$

(34,982,171)

 

$

856,948,710

 

$

139,406,501

 

$

961,959,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

common

 

Common

 

Treasury

 

paid-in

 

Retained

 

 

 

 

 

    

shares

    

stock

    

stock

    

capital

    

Earnings

    

Total

 

Balance, April 1, 2018

 

58,640,161

 

$

586,402

 

$

(35,223,428)

 

$

858,109,882

 

$

135,940,506

 

$

959,413,362

 

Net loss for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(20,596,558)

 

 

(20,596,558)

 

Restricted share award issuances

 

209,552

 

 

2,095

 

 

 —

 

 

(2,095)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,632,538

 

 

 —

 

 

1,632,538

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

(1,133,018)

 

 

 —

 

 

 —

 

 

(1,133,018)

 

Balance, June 30, 2018

 

58,849,713

 

$

588,497

 

$

(36,356,446)

 

$

859,740,325

 

$

115,343,948

 

$

939,316,324

 

Net loss for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8,177,120)

 

 

(8,177,120)

 

Restricted share award issuances

 

9,582

 

 

98

 

 

 —

 

 

(98)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,324,861

 

 

 —

 

 

1,324,861

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Balance, September 30, 2018

 

58,859,295

 

$

588,595

 

$

(36,356,446)

 

$

861,065,088

 

$

107,166,828

 

$

932,464,065

 

Net loss for the period      

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,218,652)

 

 

(6,218,652)

 

Restricted share award issuances

 

10,416

 

 

104

 

 

 —

 

 

(104)

 

 

 —

 

 

 —

 

Stock-based compensation

 

 —

 

 

 —

 

 

 —

 

 

1,230,325

 

 

 —

 

 

1,230,325

 

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Balance, December 31, 2018

 

58,869,711

 

$

588,699

 

$

(36,356,446)

 

$

862,295,309

 

$

100,948,176

 

$

927,475,738

 

 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in United States Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

Nine months ended

 

 

 

 

December 31, 2018

 

December 31, 2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

 

$

(34,992,330)

 

$

(16,934,691)

 

Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

49,133,072

 

 

49,224,187

 

Amortization of financing costs

 

 

 

2,383,918

 

 

4,585,593

 

Unrealized (gain)/loss on derivatives

 

 

 

3,910,190

 

 

(2,053,129)

 

Stock-based compensation expense

 

 

 

4,187,724

 

 

3,977,219

 

Gain on early extinguishment of debt

 

 

 

 —

 

 

(4,117,364)

 

Unrealized foreign currency (gain)/loss, net

 

 

 

285,938

 

 

(141,903)

 

Other non-cash items

 

 

 

121,397

 

 

77,342

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Trade receivables, net and accrued revenue

 

 

 

327,959

 

 

(228,360)

 

Prepaid expenses and other current assets

 

 

 

(704,832)

 

 

(769,410)

 

Due from related parties

 

 

 

(31,046,174)

 

 

10,620,942

 

Inventories

 

 

 

(133,650)

 

 

561,614

 

Other non-current assets

 

 

 

(2,560)

 

 

(7,089)

 

Trade accounts payable

 

 

 

(1,015,506)

 

 

(1,070,331)

 

Accrued expenses and other liabilities

 

 

 

4,061,128

 

 

(2,361,552)

 

Due to related parties

 

 

 

(334,353)

 

 

44,660

 

Payments for drydocking costs

 

 

 

(579,711)

 

 

(461,478)

 

Net cash provided by/(used in) operating activities

 

 

 

(4,397,790)

 

 

40,946,250

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Vessel-related capital expenditures

 

 

 

(2,703,247)

 

 

(297,534)

 

Purchases of investment securities

 

 

 

(499,690)

 

 

 —

 

Payments to acquire other fixed assets

 

 

 

(1,062)

 

 

(5,305)

 

Net cash used in investing activities

 

 

 

(3,203,999)

 

 

(302,839)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt borrowings

 

 

 

65,137,500

 

 

149,000,000

 

Repayment of long-term debt borrowings

 

 

 

(114,212,965)

 

 

(168,814,690)

 

Purchase of treasury stock

 

 

 

(1,238,642)

 

 

(1,084,902)

 

Financing costs paid

 

 

 

(628,144)

 

 

(3,002,235)

 

Net cash used in financing activities

 

 

 

(50,942,251)

 

 

(23,901,827)

 

Effects of exchange rates on cash and cash equivalents

 

 

 

(241,508)

 

 

81,967

 

Net increase/(decrease) in cash, cash equivalents, and restricted cash

 

 

 

(58,785,548)

 

 

16,823,551

 

Cash, cash equivalents, and restricted cash at the beginning of the period

 

 

 

129,368,380

 

 

67,892,698

 

Cash, cash equivalents, and restricted cash at the end of the period

 

 

$

70,582,832

 

$

84,716,249

 

 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars)

1.  Basis of Presentation and General Information

 

Dorian LPG Ltd. (“Dorian”) was incorporated on July 1, 2013 under the laws of the Republic of the Marshall Islands, is headquartered in the United States and is engaged in the transportation of liquefied petroleum gas (“LPG”) worldwide. Specifically, Dorian and its subsidiaries (together “we”, “us”, “our”, or the “Company”) are focused on owning and operating very large gas carriers (“VLGCs”), each with a cargo carrying capacity of greater than 80,000 cbm, in the LPG shipping industry. Our fleet currently consists of twenty-two VLGCs, including nineteen fuel-efficient 84,000 cbm ECO-design VLGCs (“ECO VLGCs”) and three 82,000 cbm VLGCs. Two of our ECO VLGCs are fitted with exhaust gas cleaning systems (commonly referred to as “scrubbers”) to reduce sulfur emissions. We have entered into contracts for an additional ten of our VLGCs to be fitted with scrubbers.

 

On April 1, 2015, Dorian and Phoenix Tankers Pte. Ltd. (“Phoenix”) began operations of Helios LPG Pool LLC (the “Helios Pool”), which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. Refer to Note 3 below for further description of the Helios Pool.

 

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and related Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In our opinion, all adjustments, consisting of normal recurring items, necessary for a fair presentation of financial position, operating results and cash flows have been included in the accompanying unaudited interim condensed consolidated financial statements and related notes. The accompanying unaudited interim condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended March 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on June 27, 2018.

 

Our interim results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

 

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Our subsidiaries as of December 31, 2018, which are all wholly-owned and are incorporated in the Republic of the Marshall Islands (unless otherwise noted), are listed below.

 

Vessel Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

    

Type of

    

 

    

 

    

 

 

Subsidiary

 

vessel

 

Vessel’s name

 

Built

 

CBM(1)

 

CMNL LPG Transport LLC

 

VLGC

 

Captain Markos NL(2)

 

2006

 

82,000

 

CJNP LPG Transport LLC

 

VLGC

 

Captain John NP(2)

 

2007

 

82,000

 

CNML LPG Transport LLC

 

VLGC

 

Captain Nicholas ML(2)

 

2008

 

82,000

 

Comet LPG Transport LLC

 

VLGC

 

Comet

 

2014

 

84,000

 

Corsair LPG Transport LLC

 

VLGC

 

Corsair(2)

 

2014

 

84,000

 

Corvette LPG Transport LLC

 

VLGC

 

Corvette(2)

 

2015

 

84,000

 

Dorian Shanghai LPG Transport LLC

 

VLGC

 

Cougar

 

2015

 

84,000

 

Concorde LPG Transport LLC

 

VLGC

 

Concorde(2)

 

2015

 

84,000

 

Dorian Houston LPG Transport LLC

 

VLGC

 

Cobra

 

2015

 

84,000

 

Dorian Sao Paulo LPG Transport LLC

 

VLGC

 

Continental

 

2015

 

84,000

 

Dorian Ulsan LPG Transport LLC

 

VLGC

 

Constitution

 

2015

 

84,000

 

Dorian Amsterdam LPG Transport LLC

 

VLGC

 

Commodore

 

2015

 

84,000

 

Dorian Dubai LPG Transport LLC

 

VLGC

 

Cresques

 

2015

 

84,000

 

Constellation LPG Transport LLC

 

VLGC

 

Constellation

 

2015

 

84,000

 

Dorian Monaco LPG Transport LLC

 

VLGC

 

Cheyenne

 

2015

 

84,000

 

Dorian Barcelona LPG Transport LLC

 

VLGC

 

Clermont

 

2015

 

84,000

 

Dorian Geneva LPG Transport LLC

 

VLGC

 

Cratis

 

2015

 

84,000

 

Dorian Cape Town LPG Transport LLC

 

VLGC

 

Chaparral

 

2015

 

84,000

 

Dorian Tokyo LPG Transport LLC

 

VLGC

 

Copernicus

 

2015

 

84,000

 

Commander LPG Transport LLC

 

VLGC

 

Commander

 

2015

 

84,000

 

Dorian Explorer LPG Transport LLC

 

VLGC

 

Challenger

 

2015

 

84,000

 

Dorian Exporter LPG Transport LLC

 

VLGC

 

Caravelle

 

2016

 

84,000

 

 

 Management Subsidiaries

 

 

 

 

Subsidiary

 

Dorian LPG Management Corp.

 

Dorian LPG (USA) LLC (incorporated in USA)

 

Dorian LPG (UK) Ltd. (incorporated in UK)

 

Dorian LPG Finance LLC

 

Occident River Trading Limited (incorporated in UK)

 

Dorian LPG (DK) ApS (incorporated in Denmark)

 

 

Dormant Subsidiaries

 

 

 

 

Subsidiary

 

SeaCor LPG I LLC

 

SeaCor LPG II LLC

 

Capricorn LPG Transport LLC

 

Constitution LPG Transport LLC

 

Grendon Tanker LLC

 


(1)

CBM: Cubic meters, a standard measure for LPG tanker capacity

(2)

Operated pursuant to a bareboat charter agreement. Refer to Note 6 below for further information.

 

 

 

 

2.  Significant Accounting Policies

 

The same accounting policies have been followed in these unaudited interim condensed consolidated financial statements as were applied in the preparation of our audited financial statements for the year ended March 31, 2018 (refer to Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2018), except as discussed herein.

 

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Accounting Pronouncements Adopted During the Nine Months Ended December 31, 2018

 

In November 2016, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance to require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The pronouncement is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and are applied using a retrospective transition method to each period presented. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

March 31, 2018

 

December 31, 2017

 

March 31, 2017

 

Cash and cash equivalents

 

$

34,947,580

 

$

103,505,676

 

$

55,633,291

 

$

17,018,552

 

Restricted cash—non-current

 

 

35,635,252

 

 

25,862,704

 

 

29,082,958

 

 

50,874,146