FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2020
Commission File Number: 001-35025
PERFORMANCE SHIPPING INC.
(Translation of registrant's name into English)
Pendelis 18, 175 64 Palaio Faliro, Athens, Greece
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ].
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ].
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this Report on Form 6-K as Exhibit 99.1 is a press release dated July 30, 2020 of Performance Shipping Inc. (the “Company”) announcing the Company's financial results for the second quarter and six months ended June 30, 2020.
The information contained in this Report on Form 6-K, excluding the included quote by Mr. Andreas Michalopoulos, is hereby incorporated by reference into the Company's registration statement on Form F-3 (File no. 333-197740), filed with the U.S. Securities and Exchange Commission (the "SEC") with an effective date of August 13, 2014, and the Company's registration statement on Form F-3 (File No. 333-237637), filed with the SEC with an effective date of April 23, 2020.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PERFORMANCE SHIPPING INC.
(registrant)
| Dated: July 31, 2020 | By: | /s/ Andreas Michalopoulos | |
| | | Andreas Michalopoulos | |
| | | Chief Financial Officer | |
Exhibit 99.1
| | Corporate Contact: |
| | Andreas Michalopoulos |
| | Deputy Chief Executive Officer, |
| | Chief Financial Officer, Treasurer and Secretary |
| | Telephone: + 30-216-600-2400 |
| | Email: amichalopoulos@pshipping.com |
| | Website: www.pshipping.com |
For Immediate Release | |
| | Investor and Media Relations: |
| | Edward Nebb |
| | Comm-Counsellors, LLC |
| | Telephone: + 1-203-972-8350 |
| | Email: enebb@optonline.net |
PERFORMANCE SHIPPING INC. REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2020
ATHENS, GREECE, July 30, 2020 – Performance Shipping Inc. (NASDAQ: PSHG) (the “Company”), a global shipping company specializing in the ownership of vessels, today reported net income and net income attributable to common stockholders of $4.6 million for the second quarter of 2020, compared to a net loss and net loss attributable to common stockholders of $1.6 million for the same period in 2019. Earnings per common share, basic and diluted, for the second quarter of 2020 were $0.09, while loss per share for the second quarter of 2019 was $0.06.
Voyage and time charter revenues were $16.0 million ($11.8 million net of voyage expenses) for the second quarter of 2020, compared to $4.5 million ($4.2 million net of voyage expenses) for the same period in 2019. This increase was mainly attributable to the increased time-charter equivalent rates (TCE rates) contributed by our Aframax tanker vessels. Fleetwide, the average time charter equivalent rate for the second quarter of 2020 was $26,092, compared with an average rate of $11,599 for the same period of 2019. As a result, during the second quarter of 2020, net cash provided by operating activities was $2.9 million, compared with net cash used in operating activities of $0.7 million for the second quarter of 2019.
Net income for the six months ended June 30, 2020 amounted to $5.9 million, compared to a net loss of $1.7 million for the six months ended June 30, 2019. Net income attributable to common stockholders for the six months ended June 30, 2020, amounted to $7.4 million, due to a one-time gain of $1.5 million derived from the repurchase of the Series C preferred shares, and resulted in earnings per common share, basic and diluted, of $0.15. Net loss attributable to common stockholders for the six months ended June 30, 2019, was $1.7 million, resulting in a loss per share of $0.08.
Other Second Quarter 2020 Developments:
| • | Delivery of the containership M/V Rotterdam to her new owners in April 2020 |
| • | Issuance of 600,000 common shares pursuant to conversions of Series B-2 preferred shares |
| • | Repurchase and cancellation of all remaining Series B-2 preferred shares in April 2020 |
| • | Repurchase and cancellation of 365,086 common shares under the Share Repurchase Program |
| • | Receipt of NASDAQ notification for extension of the compliance period to cure the bid price deficiency to November 2020 |
Commenting on the results of the second quarter of 2020, Mr. Andreas Michalopoulos, the Company’s Deputy Chief Executive Officer, stated:
“During the second quarter of 2020, we continued to operate profitably with all four Aframax tankers contributing to our operations. We took advantage of favorable market conditions to secure a time charter contract of minimum seventeen (17) months to maximum nineteen (19) months for our M/T Blue Moon at $28,000 per day. The tanker charter market, as expected, has weakened on the back of lower demand due to COVID-19 and lower supply as OPEC cuts output and a flattening oil price curve. We believe the tanker market will recover during the fall and winter months, and we will be ready to take advantage of that possible recovery should it occur. ”
Novel Coronavirus Risks:
On March 11, 2020, the World Health Organization declared the Novel coronavirus disease (“COVID-19”) outbreak a pandemic. In response to the ongoing outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines, travel restrictions, and physical distancing requirements. Such measures have, and will likely continue to, negatively affect the global economy. Any prolonged restrictive measures in order to control the spread of COVID-19 or other adverse public health developments in Asia or in other geographies in which the Company’s vessels operate may significantly impact the demand for the Company’s vessels. The extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity and duration of the virus and the actions to contain or treat its impact or a potential second wave, among others. Accordingly, an estimate of the impact cannot be made at this time. However, if the COVID-19 pandemic worsens, additional restrictions are imposed, or current restrictions are imposed for a longer period of time in response to the outbreak, it may have a material adverse effect on the Company’s future results of operation and financial condition.
| Summary of Selected Financial & Other Data |
| | | For the three months ended June 30, | | | For the six months ended June 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | |
| STATEMENT OF OPERATIONS DATA (in thousands of US Dollars): | |
| | | | | | | | | | | | | |
| Voyage and time charter revenues | | $ | 16,031 | | | $ | 4,547 | | | $ | 29,535 | | | $ | 10,016 | |
| Voyage expenses | | | 4,159 | | | | 325 | | | | 8,467 | | | | 603 | |
| Vessel operating expenses | | | 3,224 | | | | 3,182 | | | | 6,320 | | | | 5,829 | |
| Net income / (loss) | | | 4,641 | | | | (1,566 | ) | | | 5,936 | | | | (1,747 | ) |
| Net income / (loss) attributable to common stockholders | | | 4,641 | | | | (1,566 | ) | | | 7,436 | | | | (1,747 | ) |
| Earnings / (Loss) per common share, basic | | | 0.09 | | | | (0.06 | ) | | | 0.15 | | | | (0.08 | ) |
| Earnings / (Loss) per common share, diluted | | | 0.09 | | | | (0.06 | ) | | | 0.15 | | | | (0.08 | ) |
| FLEET DATA | |
| Average number of vessels | | | 5.0 | | | | 4.0 | | | | 4.9 | | | | 4.0 | |
| Number of vessels | | | 5.0 | | | | 4.0 | | | | 5.0 | | | | 4.0 | |
| Ownership days | | | 455 | | | | 364 | | | | 885 | | | | 724 | |
| Available days | | | 455 | | | | 364 | | | | 885 | | | | 724 | |
| Operating days, excluding ballast leg (1) | | | 361 | | | | 340 | | | | 675 | | | | 696 | |
| Operating days, including ballast leg (2) | | | 428 | | | | 340 | | | | 801 | | | | 696 | |
| Fleet utilization, excluding ballast leg | | | 79.3 | % | | | 93.4 | % | | | 76.3 | % | | | 96.1 | % |
| Fleet utilization, including ballast leg | | | 94.1 | % | | | 93.4 | % | | | 90.5 | % | | | 96.1 | % |
| AVERAGE DAILY RESULTS | |
| Time charter equivalent (TCE) rate (3) | | $ | 26,092 | | | $ | 11,599 | | | $ | 23,806 | | | $ | 13,001 | |
| Daily vessel operating expenses (4) | | $ | 7,086 | | | $ | 8,742 | | | $ | 7,141 | | | $ | 8,051 | |
___________________
| (1) | Operating days, excluding ballast leg, are the number of available days in a period less the aggregate number of days that our vessels are off-hire. The specific calculation counts the ballast leg of spot voyages as off-hire days, even if a charter party exists, so as to be in line with the accounting guidelines of ASC 606 for the revenue recognition (“loading” to “discharging” accounting). The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. |
| (2) | Operating days, including ballast leg, are the number of available days in a period less the aggregate number of days that our vessels are off-hire. The specific calculation does not count as off-hire the days of the ballast leg of the spot voyages, as long as a charter party is in place. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. |
| (3) | Time charter equivalent rates, or TCE rates, are defined as our voyage and time charter revenues, less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels despite changes in the mix of charter types (i.e., voyage (spot) charters, time charters and bareboat charters). |
| (4) | Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, lubricant costs, tonnage taxes, regulatory fees, environmental costs, lay-up expenses and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period. |
| Fleet Employment Profile (As of July 30, 2020) | |
| Performance Shipping Inc.’s fleet is employed as follows: | |
| | | | | | | | | | |
| Vessel | Year of Built | Capacity | Builder | Gross Rate (USD Per Day) | Com* | Charterers | Delivery Date to Charterers** | Redelivery Date to Owners*** | Notes |
| 4 Aframax Tanker Vessels |
| BLUE MOON | 2011 | 104,623 DWT | Sumitomo Heavy Industries Marine & Engineering Co., LTD. | $28,000 | 5.00% | Aramco Trading Company, Saudi Arabia | 19-Jun-20 | 19-Nov-21 - 18-Jan-22 | |
| BRIOLETTE | 2011 | 104,588 DWT | Sumitomo Heavy Industries Marine & Engineering Co., LTD. | Spot | - | - | - | - - - | |
| P. FOS | 2007 | 115,577 DWT | Sasebo Heavy Industries Co. Ltd | Spot | - | - | - | - - - | |
| P. KIKUMA | 2007 | 115,915 DWT | Samsung Heavy Industries Co Ltd., Geoje, South Korea | Spot | - | - | - | - - - | |
| 1 Panamax Container Vessel |
| | | | | | | | | | |
| DOMINGO | 2001 | 3,739 TEU | Samsung Heavy Industries Co Ltd., Koje, South Korea | $4,500 | 3.75% | Mediterranean Shipping Company S.A. | 30-Jun-20 | 5-Sep-20 | 1 |
| * Total commission paid to third parties. |
| ** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of the vessel to the Company. |
| *** Range of redelivery dates, with the actual date of redelivery being at the Charterers’ option, but subject to the terms, conditions, and exceptions of the particular charterparty. |
| 1 Estimated redelivery date. |
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of vessels. The Company’s vessels are employed primarily on spot charters with leading charterers.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other 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 world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for our vessels, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, the length and severity of the recent novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessel breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
(See financial tables attached)
| PERFORMANCE SHIPPING INC. |
| FINANCIAL TABLES |
| Expressed in thousands of U.S. Dollars, except for share and per share data |
| | | | | | | | | | |
| UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS |
| | | For the three months ended June 30, | | | For the six months ended June 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| REVENUES: | | | | | | | | | | | | |
| Voyage and time charter revenues | | $ | 16,031 | | | $ | 4,547 | | | $ | 29,535 | | | $ | 10,016 | |
| | | | | | | | | | | | | | | | | |
| EXPENSES: | | | | | | | | | | | | | | | | |
| Voyage expenses | | | 4,159 | | | | 325 | | | | 8,467 | | | | 603 | |
| Vessel operating expenses | | | 3,224 | | | | 3,182 | | | | 6,320 | | | | 5,829 | |
| Depreciation and amortization of deferred charges | | | 1,578 | | | | 874 | | | | 2,679 | | | | 1,740 | |
| Management fees | | | 79 | | | | - | | | | 271 | | | | - | |
| General and administrative expenses | | | 1,794 | | | | 1,555 | | | | 4,406 | | | | 3,463 | |
| Impairment losses | | | - | | | | 261 | | | | 339 | | | | 261 | |
| Loss on vessel's sale | | | 27 | | | | - | | | | 27 | | | | - | |
| Provision for doubtful receivables | | | 45 | | | | - | | | | 131 | | | | - | |
| Foreign currency (gains) / losses | | | (15 | ) | | | - | | | | 7 | | | | 5 | |
| Operating income / (loss) | | $ | 5,140 | | | $ | (1,650 | ) | | $ | 6,888 | | | $ | (1,885 | ) |
| | | | | | | | | | | | | | | | | |
| OTHER INCOME / (EXPENSES): | | | | | | | | | | | | | | | | |
| Interest and finance costs | | | (510 | ) | | | - | | | | (1,037 | ) | | | - | |
| Interest income | | | 11 | | | | 84 | | | | 85 | | | | 138 | |
| Total other income /(expenses), net | | $ | (499 | ) | | $ | 84 | | | $ | (952 | ) | | $ | 138 | |
| | | | | | | | | | | | | | | | | |
| Net income / (loss) | | $ | 4,641 | | | $ | (1,566 | ) | | $ | 5,936 | | | $ | (1,747 | ) |
| | | | | | | | | | | | | | | | | |
| Gain from repurchase of preferred shares | | | - | | | | - | | | | 1,500 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Net income / (loss) attributable to common stockholders | | $ | 4,641 | | | $ | (1,566 | ) | | | 7,436 | | | | (1,747 | ) |
| | | | | | | | | | | | | | | | | |
| Earnings / (Loss) per common share, basic | | $ | 0.09 | | | $ | (0.06 | ) | | $ | 0.15 | | | $ | (0.08 | ) |
| | | | | | | | | | | | | | | | | |
| Earnings / (Loss) per common share, diluted | | $ | 0.09 | | | $ | (0.06 | ) | | $ | 0.15 | | | $ | (0.08 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares, basic | | | 49,322,054 | | | | 24,961,196 | | | | 48,059,696 | | | | 21,710,494 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares, diluted | | | 49,420,403 | | | | 24,961,196 | | | | 49,168,086 | | | | 21,710,494 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) |
| | | For the three months ended June 30, | | | For the six months ended June 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | | | | | | | | | | | | |
| Net income / (loss) | | $ | 4,641 | | | $ | (1,566 | ) | | $ | 5,936 | | | $ | (1,747 | ) |
| | | | | | | | | | | | | | | | | |
| Comprehensive income/ (loss) | | $ | 4,641 | | | $ | (1,566 | ) | | $ | 5,936 | | | $ | (1,747 | ) |
| | | | | | | | | | | | | | | | | |
| CONDENSED CONSOLIDATED BALANCE SHEET DATA | | | | |
| (Expressed in thousands of US Dollars) | | | | |
| | | June 30, 2020 | | | December 31, 2019* | |
ASSETS | | (unaudited) | | | | |
| | | | | | | |
| Cash and cash equivalents | | $ | 32,054 | | | $ | 26,363 | |
| Advances for vessel acquisitions and other vessels' costs | | | - | | | | 11,017 | |
| Vessels, net | | | 114,066 | | | | 82,871 | |
| Other fixed assets, net | | | 1,032 | | | | 993 | |
| Other assets | | | 8,574 | | | | 9,325 | |
| Total assets | | $ | 155,726 | | | $ | 130,569 | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Long-term debt, net of unamortized deferred financing costs | | $ | 53,816 | | | $ | 32,283 | |
| Other liabilities | | | 2,997 | | | | 4,048 | |
| Total stockholders' equity | | | 98,913 | | | | 94,238 | |
| Total liabilities and stockholders' equity | | $ | 155,726 | | | $ | 130,569 | |
| | | | | | | | | |
| * The balance sheet data as of December 31, 2019 has been derived from the audited consolidated financial statements at that date. |
| OTHER FINANCIAL DATA | | | | | | | |
| | | | | | | | | | | | | |
| | | For the three months ended June 30, | | | For the six months ended June 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | |
| Net Cash provided by / (used in) Operating Activities | | $ | 2,912 | | | $ | (652 | ) | | $ | 10,006 | | | $ | (644 | ) |
| Net Cash provided by / (used in) Investing Activities | | $ | 18,063 | | | $ | (2 | ) | | $ | (23,209 | ) | | $ | 441 | |
| Net Cash provided by / (used in) Financing Activities | | $ | (3,113 | ) | | $ | - | | | $ | 18,894 | | | $ | 6,452 | |
