DORIAN LPG LTD., 10-Q filed on 7/31/2017
Quarterly Report
Document and Entity Information
3 Months Ended
Jun. 30, 2017
Jul. 24, 2017
Document and Entity Information
 
 
Entity Registrant Name
DORIAN LPG LTD. 
 
Entity Central Index Key
0001596993 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2017 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--03-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
55,105,318 
Document Fiscal Year Focus
2018 
 
Document Fiscal Period Focus
Q1 
 
Condensed Consolidated Balance Sheets (USD $)
Jun. 30, 2017
Mar. 31, 2017
Current assets
 
 
Cash and cash equivalents
$ 35,363,045 
$ 17,018,552 
Trade receivables, net and accrued revenues
2,730 
11,030 
Prepaid expenses and other receivables
2,688,092 
1,903,804 
Due from related parties
37,441,188 
42,457,000 
Inventories
2,458,407 
2,580,742 
Total current assets
77,953,462 
63,971,128 
Fixed assets
 
 
Vessels, net
1,587,588,137 
1,603,469,247 
Other fixed assets, net
246,628 
317,348 
Total fixed assets
1,587,834,765 
1,603,786,595 
Other non-current assets
 
 
Deferred charges, net
1,900,452 
1,884,174 
Derivative instruments
3,883,944 
5,843,368 
Due from related parties—non-current
19,800,000 
19,800,000 
Restricted cash
18,075,146 
50,874,146 
Other non-current assets
78,879 
75,469 
Total assets
1,709,526,648 
1,746,234,880 
Current liabilities
 
 
Trade accounts payable
4,451,775 
7,075,622 
Accrued expenses
6,412,584 
5,386,397 
Due to related parties
33,212 
11,162 
Deferred income
7,610,612 
7,313,048 
Current portion of long-term debt
45,658,482 
65,978,785 
Total current liabilities
64,166,665 
85,765,014 
Long-term liabilities
 
 
Long-term debt—net of current portion and deferred financing fees
674,665,830 
683,985,463 
Derivative instruments
410,767 
 
Other long-term liabilities
532,323 
482,685 
Total long-term liabilities
675,608,920 
684,468,148 
Total liabilities
739,775,585 
770,233,162 
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, 58,610,665 and 58,342,201 shares issued, 55,105,318 and 54,974,526 shares outstanding (net of treasury stock), as of June 30, 2017 and March 31, 2017, respectively
586,107 
583,422 
Additional paid-in-capital
854,495,905 
852,974,373 
Treasury stock, at cost; 3,505,347 and 3,367,675 shares as of June 30, 2017 and March 31, 2017, respectively
(34,982,171)
(33,897,269)
Retained earnings
149,651,222 
156,341,192 
Total shareholders' equity
969,751,063 
976,001,718 
Total liabilities and shareholders' equity
$ 1,709,526,648 
$ 1,746,234,880 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2017
Mar. 31, 2017
Condensed Consolidated Balance Sheets
 
 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
50,000,000 
50,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
450,000,000 
450,000,000 
Common stock, shares issued
58,610,665 
58,342,201 
Common stock, shares outstanding
55,105,318 
54,974,526 
Treasury stock, shares at cost
3,505,347 
3,367,675 
Condensed Consolidated Statements of Operations (USD $)
3 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Revenues.
 
 
Net pool revenues—related party
$ 28,475,359 
$ 37,659,385 
Time charter revenues
12,564,655 
12,532,351 
Other revenues, net
(14,542)
324,040 
Total revenues
41,025,472 
50,515,776 
Expenses
 
 
Voyage expenses
239,445 
755,804 
Vessel operating expenses
16,885,289 
16,095,552 
Depreciation and amortization
16,293,158 
16,192,745 
General and administrative expenses
8,534,909 
5,611,310 
Total expenses
41,952,801 
38,655,411 
Other income—related party
633,883 
552,901 
Operating income/(loss)
(293,446)
12,413,266 
Other income/(expenses)
 
 
Interest and finance costs
(7,477,734)
(7,038,209)
Interest income
15,816 
23,178 
Unrealized loss on derivatives
(2,370,191)
(4,369,859)
Realized loss on derivatives
(612,863)
(2,256,788)
Gain on early extinguishment of debt
4,117,364 
 
Foreign currency loss, net
(68,916)
(62,709)
Total other income/(expenses), net
(6,396,524)
(13,704,387)
Net loss
$ (6,689,970)
$ (1,291,121)
Loss per common share – basic (in dollars per share)
$ (0.12)
$ (0.02)
Loss per common share – diluted (in dollars per share)
$ (0.12)
$ (0.02)
Condensed Consolidated Statements of Shareholders' Equity (USD $)
Common stock
Treasury stock
Additional paid-in capital
Retained earnings/(Accumulated deficit)
Total
Balance at Mar. 31, 2016
$ 580,575 
$ (20,943,816)
$ 848,179,471 
$ 157,783,007 
$ 985,599,237 
Balance (in shares) at Mar. 31, 2016
58,057,493 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Net loss
 
 
 
(1,291,121)
(1,291,121)
Restricted share award issuances
2,570 
 
(2,570)
 
 
Restricted share award issuances (in shares)
256,950 
 
 
 
 
Stock-based compensation
 
 
1,421,636 
 
1,421,636 
Purchase of treasury stock
 
(11,853,983)
 
 
(11,853,983)
Balance at Jun. 30, 2016
583,145 
(32,797,799)
849,598,537 
156,491,886 
973,875,769 
Balance (in shares) at Jun. 30, 2016
58,314,443 
 
 
 
 
Balance at Mar. 31, 2017
583,422 
(33,897,269)
852,974,373 
156,341,192 
976,001,718 
Balance (in shares) at Mar. 31, 2017
58,342,201 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Net loss
 
 
 
(6,689,970)
(6,689,970)
Restricted share award issuances
2,685 
 
(2,685)
 
 
Restricted share award issuances (in shares)
268,464 
 
 
 
 
Stock-based compensation
 
 
1,524,217 
 
1,524,217 
Purchase of treasury stock
 
(1,084,902)
 
 
(1,084,902)
Balance at Jun. 30, 2017
$ 586,107 
$ (34,982,171)
$ 854,495,905 
$ 149,651,222 
$ 969,751,063 
Balance (in shares) at Jun. 30, 2017
58,610,665 
 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
3 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Cash flows from operating activities:
 
 
Net loss
$ (6,689,970)
$ (1,291,121)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
 
 
Depreciation and amortization
16,293,158 
16,192,745 
Amortization of financing costs
1,098,827 
948,407 
Unrealized (gain)/loss on derivatives
2,370,191 
4,369,859 
Stock-based compensation expense
1,524,217 
1,009,798 
Gain on early extinguishment of debt
(4,117,364)
 
Unrealized foreign currency (gain)/loss, net
(75,142)
88,067 
Other non-cash items
15,689 
20,953 
Changes in operating assets and liabilities
 
 
Trade receivables, net and accrued revenue
8,300 
18,482 
Prepaid expenses and other receivables
(784,288)
(35,827)
Due from related parties
5,015,812 
8,830,603 
Inventories
122,335 
156,030 
Other non-current assets
(3,410)
608 
Trade accounts payable
(2,511,722)
(212,475)
Accrued expenses and other liabilities
516,824 
(198,144)
Due to related parties
22,050 
(115,926)
Payments for drydocking costs
(395,189)
 
Net cash provided by operating activities
12,410,318 
29,782,059 
Cash flows from investing activities:
 
 
Capital expenditures
(276,396)
(1,241,220)
Restricted cash deposits
(1,000)
 
Restricted cash released
32,800,000 
 
Payments to acquire other fixed assets
 
(606)
Net cash provided by (used in) investing activities
32,522,604 
(1,241,826)
Cash flows from financing activities:
 
 
Proceeds from long-term debt borrowings
97,000,000 
 
Repayment of long-term debt borrowings
(120,738,340)
(15,657,054)
Purchase of treasury stock
(350,279)
(11,853,983)
Financing costs paid
(2,541,005)
(42,047)
Net cash used in financing activities
(26,629,624)
(27,553,084)
Effects of exchange rates on cash and cash equivalents
41,195 
(77,911)
Net increase in cash and cash equivalents
18,344,493 
909,238 
Cash and cash equivalents at the beginning of the period
17,018,552 
46,411,962 
Cash and cash equivalents at the end of the period
$ 35,363,045 
$ 47,321,200 
Basis of Presentation and General Information
Basis of Presentation and General Information

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.

 

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 (the "Financial Statements") have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by 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 Financial Statements. The Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended March 31, 2017 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on June 14, 2017.

 

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.

 

Our subsidiaries as of June 30, 2017, which are all wholly-owned and are incorporated in Republic of the Marshall Islands (unless otherwise noted), are listed below.

 

Vessel Owning Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

    

Type of

    

 

    

 

    

 

 

Subsidiary

 

vessel

 

Vessel’s name

 

Built

 

CBM(1)

 

CMNL LPG Transport LLC

 

VLGC

 

Captain Markos NL

 

2006

 

82,000

 

CJNP LPG Transport LLC

 

VLGC

 

Captain John NP

 

2007

 

82,000

 

CNML LPG Transport LLC

 

VLGC

 

Captain Nicholas ML

 

2008

 

82,000

 

Comet LPG Transport LLC

 

VLGC

 

Comet

 

2014

 

84,000

 

Corsair LPG Transport LLC

 

VLGC

 

Corsair

 

2014

 

84,000

 

Corvette LPG Transport LLC

 

VLGC

 

Corvette

 

2015

 

84,000

 

Dorian Shanghai LPG Transport LLC

 

VLGC

 

Cougar

 

2015

 

84,000

 

Concorde LPG Transport LLC

 

VLGC

 

Concorde

 

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)

 

 

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

Significant Accounting Policies
Significant Accounting Policies

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, 2017 (refer to Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2017).

 

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. The implementation of this guidance is anticipated to result in restricted cash transfers not reported as cash flow activities in the consolidated statements of cash flows, and, upon adoption, is not anticipated to have an impact on our consolidated balance sheets and statements of operations.

 

In August 2016, the FASB issued accounting guidance addressing specific cash flow issues with the objective of reducing the existing diversity in practice. The pronouncement is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We do not believe that the impact of the adoption of this amended guidance will have a material effect on our financial statements.

 

In February 2016, the FASB issued accounting guidance to update the requirements of financial accounting and reporting for lessees and lessors. The updated guidance, for lease terms of more than 12 months, will require a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. Lessor accounting remains largely unchanged. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The pronouncement is effective prospectively for public business entities for annual periods beginning after December 15, 2018, and interim periods within that reporting period. Early adoption is permitted for all entities. We are currently assessing the impact the amended guidance will have on our financial statements.

 

In July 2015, the FASB issued accounting guidance requiring entities to measure most inventory at the lower of cost and net realizable value. The pronouncement is effective prospectively for annual periods beginning after December 15, 2016, and interim periods within that reporting period. The impact of the adoption of this amended guidance did not have a material effect on our financial statements.

 

In May 2014, the FASB amended its accounting guidance for revenue recognition. The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and consideration that a company expects to receive for the services provided. It also requires additional disclosures necessary for the financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB voted to defer the effective date by one year for fiscal years beginning on or after December 15, 2017 and interim periods within that reporting period and permit early adoption of the standard, but not before the beginning of 2017. We are currently assessing the impact the amended guidance will have on our financial statements.