Danaos Q4 2024 Earnings Report

Badger Meter EPS Results

• Actual EPS: $6.50
• Consensus EPS: $6.52
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

Badger Meter Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $266.00 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Badger Meter Announcement Details

• Quarter: Q4 2024
• Date: 2/10/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, February 11, 2025
• Conference Call Time: 9:00AM ET

Badger Meter (NYSE:BMI) manufactures and markets flow measurement, quality, control, and communication solutions worldwide. It offers mechanical or static water meters, and related radio and software technologies and services to municipal water utilities market. The company also provides flow instrumentation products, including meters, valves, and other sensing instruments to measure and control fluids going through a pipe or pipeline, including water, air, steam, and other liquids and gases to original equipment manufacturers as the primary flow measurement device within a product or system, as well as through manufacturers' representatives. In addition, the company offers ORION Cellular endpoints to power network as a service; ORION mobile read endpoints support for deploying AMR solution; radio products; hardware, instruments, and sensors, and related software, to enhance connected data to a water utility's operation; water quality monitoring solutions, including optical sensing and electrochemical instruments; and high frequency pressure and leak detection sensors to aid in burst pipe and leak events; as well as BEACON, a secure cloud-hosted software suite that establishes alerts for specific conditions and allows consumer engagement tools that permit end water customers to view and manage their water usage activity. Its flow instrumentation products are used in water/wastewater, heating, ventilating and air conditioning, and corporate sustainability markets. The company serves water utilities, commercial, and industrial industries; and provides training, project management, technical support, and other collaborative services for customers. It sells its products and software directly, as well as through resellers and representatives. The company was incorporated in 1905 and is based in Milwaukee, Wisconsin.

Danaos Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good

[Operator]

day, and welcome to the Danaos Corporation Conference Call to discuss Financial Results for the Three Months Ended 12/31/2024. As a reminder, today's call is being recorded. Hosting the call today is Doctor. John Coustis, Chief Executive Officer at Danaos Corporation and Mr. Evangelos Hatzis, Chief Financial Officer at Danaos Corporation.

[Operator]

Doctor. Coustis and Mr. Hatzis will be making some introductory comments, and then we will open the call to a question and answer session. Gentlemen, the floor is yours.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Thank you, operator. Good morning to everyone, and thank you for joining us this morning. Before we begin, I quickly want to remind everyone that management's remarks this morning may contain certain forward looking statements and that actual results could differ materially from those projected today. These forward looking statements are made as of today, and we undertake no obligation to update them. Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review these detailed safe harbor and risk factor disclosures.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Please also note that where we feel appropriate, we will continue to refer to non GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, time charter equivalent revenues and time charter equivalent dollars per day to evaluate our business. Reconciliations of non GAAP financial measures to GAAP financial measures are included in our earnings release and the accompanying materials. With that, let me now turn the call over to Doctor. John Cousteres, who will provide the broad overview of the quarter. John?

[John Coustas, Chairman, President & CEO at Danaos]

Thank you, Evangelos. Good morning and thank you all for joining today's call to discuss our results for the fourth quarter of twenty twenty four. The world is entering uncharted territory and any near term predictions about the direction of shipping markets are inherently unreliable. The tariff war is bound to generate disruptions, which have historically benefited shipping. However, an economic slowdown might negate these benefits.

[John Coustas, Chairman, President & CEO at Danaos]

The drybulk market continues to suffer from ongoing malaise due to the pace of the recovery of the Chinese economy, which has not shown signs of accelerating. The delivery of new tonnage starting this year will lie to these weakness, particularly in the Panamax and smaller segments where the order book is concentrated. The Capesize segment where our fleet is concentrated continues to have an order book that remains at historically low levels. The container charter market remains healthy, albeit liners are exhibiting more caution, particularly with respect to forward dates. While box rates are weakening, they are still much higher than pre pandemic levels.

[John Coustas, Chairman, President & CEO at Danaos]

We'll have to wait until after Chinese New Year to gauge the effect of the front loading of exports that occurred in anticipation of tariffs and the demand pattern in the new trade environment. Danau is highly insulated from near term market uncertainty with 97% categories for 2025 and '70 '9 percent for 2026 at healthy rates, shielding out for market volatility. Our chartered backlog of $3,400,000,000 provides us with a certainty of income and firepower to explore accretive investments. We've chartered 13 out of our 15 new buildings for five years and have arranged a new $850,000,000 facility from the bank syndicate to fully cover the financing of all vessels in order. Our profitability remains consistent and we're using our strong balance sheet to increase dividends, continue the share buyback and source opportunities to grow our company for the benefit of our shareholders.

[John Coustas, Chairman, President & CEO at Danaos]

Our strategic focus remains on maintaining a robust financial position, securing long term contracts for vessels coming off charter and investing in more than fuel efficient container vessels to enhance our competitive position in the market. We are committed to delivering value to our shareholders through prudent financial management and strategic growth initiatives. With that, I'll hand the call back to Evangelos, who will take you through the financials for the quarter. Evangelos?

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Thank you, John, and good morning again to everyone. I will briefly review the results for the quarter and then open the call to Q and A. We are reporting adjusted EPS for the fourth quarter of twenty twenty four of $6.93 per share or adjusted net income of $133,300,000 compared to adjusted EPS of $6.99 per share or adjusted net income of $136,000,000 for the fourth quarter of twenty twenty three. This $2,700,000 decrease in adjusted net income between the two quarters is a result of an $11,000,000 increase in total OpEx, mainly due to the recognition during the current quarter of voyage costs related to voyage charters of our drybulk Capesize fleet and a $4,900,000 increase in net finance costs, partially offset by an $8,900,000 increase in net operating revenues, a $2,200,000 net improvement on income from investments and dividends from such investments and $2,100,000 collected in relation to our Hanjin bankruptcy claim. Vessel operating expenses increased by $5,500,000 to $45,600,000 in the current quarter from $40,100,000 in the fourth quarter of twenty twenty three as a result of the increase in the average number of vessels in our fleet, while our daily operating costs slightly improved to $6,135 per vessel per day for the current quarter compared to $6,188 per vessel per day for the fourth quarter of twenty twenty three.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Our operating costs continue to remain among the most competitive in the industry. G and A expenses decreased by $700,000 to $21,700,000 in the current quarter compared to $22,400,000 in the fourth quarter of twenty twenty three, mainly due to a decrease in stock based non cash costs. Interest expense, excluding amortization of finance costs, increased by $6,000,000 to $9,100,000 in the current quarter compared to $3,100,000 in the fourth quarter of twenty twenty three. The increase this increase in interest expense is a combined result of a $5,300,000 increase due to higher average indebtedness of around $330,000,000 between the two periods. That was partially offset by a reduction in the cost of debt service by approximately 78 basis points as a result of a decrease in software cost between the two periods, while we also had a $700,000 increase in interest expense due to lower capitalized interest on vessels under construction between the two periods.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

At the same time, interest income came in at $3,900,000 Adjusted EBITDA increased by 9.9% or by $17,100,000 to $189,700,000 in the current quarter compared to $172,600,000 in the fourth quarter of twenty twenty three for the reasons that have been already outlined earlier on this call. We also encourage you to review our updated investor presentation that is posted on our website as well as subsequent events disclosures. Allow me to give you a few highlights. Since the date of our last earnings release, we have added $336,000,000 to our contracted revenue backlog. As a result, our contracted revenue backlog remains strong and has increased to $3,400,000,000 with a three point seven year average charter duration, while contract coverage is at 97% for 2025 and seventy nine percent for 2026.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Our investor presentation has analytical disclosure on our contracted charter book. On 07/2025, we entered into an $850,000,000 syndicated loan facility agreement to finance all of our remaining new building container vessels, including the two additional recent orders, all of whom all of which have deliveries between 2026 and 2028. As of 12/31/2024, our net debt stood at $291,000,000 dollars In the current interest rate environment, this position changes from higher interest costs. Additionally, the company's net debt to adjusted EBITDA ratio stood at 0.4 times, while 53 out of our 84 vessels are currently unencumbered and debt free. We continue to repurchase stock.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

And since the date of the last earnings release, we have repurchased an additional $45,600,000 To date, we have executed on total share repurchases of $168,800,000 out of the $200,000,000 authority that has been provided by our board. Finally, as of the end of the fourth quarter, cash was at $453,400,000 while total liquidity, including availability under our revolving credit facility and marketable securities, stood at $8.00 $7,000,000 giving us ample flexibility to pursue accretive capital deployment opportunities. With that, I would like to thank you all for listening to this first part of our call. Operator, we are now ready to open the call to Q and A.

[Operator]

Thank you. We will now begin the question and answer session. And the first question will come from Omar Nochta with Jefferies. Please go ahead.

[Omar Nokta, Managing Director at Jefferies LLC]

Thank you. Hi, John and Evangelos.

[John Coustas, Chairman, President & CEO at Danaos]

Hi, Omar.

[Omar Nokta, Managing Director at Jefferies LLC]

Obviously another hi, hi. Just another strong quarter with some real free cash flow generation.

[Omar Nokta, Managing Director at Jefferies LLC]

And as you note in the presentation, you generated $30 a share in free cash flow in 2024. It looks like that can pretty much be repeated in 2025. I guess a couple of things. It looks like you're back to being on pace to that getting into that net cash position again sometime during 2025. I guess, do you agree with that, that you're on pace to get to net cash position yet again?

[Omar Nokta, Managing Director at Jefferies LLC]

And then also, do you want to be in a net cash position or do you prefer to keep more leverage in place?

[John Coustas, Chairman, President & CEO at Danaos]

We are looking as we saw, we have arranged an $850,000,000 facility, which covers all the financing of our new building program at 60%. Of course, we are generating and we are keeping substantial amounts of cash for opportunities. At present with all our newbuilding program, we don't even going forward manage to go to a negative net cash position. So we're still, let's say, in surplus and this is also one of the reasons that we've continued and expanded our newbuilding program with ships that we believe are going to be required in the market and in line with the other vessels that we have already ordered.

[Operator]

The next question will come from Clement Mullins with Value Investors Edge. Please go ahead.

[Clement Mullins, Analyst at Value Investor's Edge]

Hi, good afternoon. Thank you for taking my questions. I wanted to start by asking about the utilization on drybulk side. This was mostly attributable to scheduled of hard days. And I was wondering, could you talk a bit about what that includes and how many drydockings were conducted during the quarter?

[Clement Mullins, Analyst at Value Investor's Edge]

And secondly, how many dry dockings do you have planned on that side of fleet throughout 2025?

[John Coustas, Chairman, President & CEO at Danaos]

Are you talking about just the drybulk fleet or are you talking about the whole fleet?

[Clement Mullins, Analyst at Value Investor's Edge]

About drybulk fleet?

[John Coustas, Chairman, President & CEO at Danaos]

Yes. The drybulk, we have decided to put all our drybulk vessels in drydock. And presently, apart from one, all the rest have been have completed their drydocking in the last six months, where we've installed appendages and paints which are extremely efficient. So we even would manage for example vessels that were rideship E rated to move them up to a C plus rating. So we've done a lot of investment on these ships and we believe that when the drybulk market picks up, we're going to enjoy that.

[John Coustas, Chairman, President & CEO at Danaos]

We will not have dry dockings of the drybulk fleet over the next at least two to three years.

[Clement Mullins, Analyst at Value Investor's Edge]

That's helpful. Thank you. Dragout rates have been quite soft recently and asset values have declined a tad from the highs. Is there any appetite to potentially add additional vessels going forward? And if so, would you still focus on Capesizers or would you be willing to add CancerMAXs or Ultramaxs as well?

[John Coustas, Chairman, President & CEO at Danaos]

No, we are concentrating on Capesizes. Yes, if prices are attractive. We've already said we are going to increase our presence in the sector.

[Clement Mullins, Analyst at Value Investor's Edge]

Thanks for the color. I'll turn it over. Thank you for taking my questions and congratulations for the quarter.

[John Coustas, Chairman, President & CEO at Danaos]

Thank you.

[Operator]

The next question is a follow-up from Omar Okta with Jefferies. Please go ahead.

[Omar Nokta, Managing Director at Jefferies LLC]

Thank you. Sorry, Ed. Thanks for letting me back on. Just a couple of quick ones or maybe not so much in this first one, but you mentioned, John, in your presentation or I think in the press release and in your opening comments, near term forecasts are basically unreliable in this climate. You've ordered the two new ships after a bit of pause.

[Omar Nokta, Managing Director at Jefferies LLC]

Just wanted to ask, what gave you confidence to kind of jump back in to the newbuildings side of

[Omar Nokta, Managing Director at Jefferies LLC]

things?

[John Coustas, Chairman, President & CEO at Danaos]

Well, first of all, we believe that the sector needs more efficient ships, especially in this size bracket. And secondly, we have arranged financing charter for everything else. So there is very little, let's say, risk if any by our investment.

[Omar Nokta, Managing Director at Jefferies LLC]

Okay. And then just separately, obviously, you stepped up the share repurchases pretty meaningfully here the past few months. I just wanted to ask, are you able to give us a snapshot of what the share count looks like today?

[John Coustas, Chairman, President & CEO at Danaos]

Evangelos can answer that.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

Can you repeat, Omar, are you referring to the share count?

[Omar Nokta, Managing Director at Jefferies LLC]

Yes, just the share count post the latest repurchases.

[Evangelos Chatzis, VP, CFO, Treasurer & Secretary at Danaos]

It's just a path below 19,000,000 shares, something like 18,800,000.0, 18 point 9 million at this point.

[Omar Nokta, Managing Director at Jefferies LLC]

Got it. Okay. Well, thank you. Thanks, John. Thanks, Edangelos.

[John Coustas, Chairman, President & CEO at Danaos]

Thank you.

[Operator]

It appears we have no further questions at this time. I would like to turn the call back over to Doctor. Koussis for any closing remarks. Please go ahead, sir.

[John Coustas, Chairman, President & CEO at Danaos]

Yes. Thank you for your continued interest of Astoria. We will continue to implement our program for the benefit of our shareholders. Thank you.

[Operator]

Thank you all for joining the conference call and for your continued interest in OurStory. We look forward to hosting you on our next earnings call. Have a nice day.

Participants

Executives

• Evangelos Chatzis, VP, CFO, Treasurer & Secretary
• John Coustas, Chairman, President & CEO

Analysts

• Omar Nokta, Managing Director at Jefferies LLC
• Clement Mullins, Analyst at Value Investor's Edge