Eagle Bulk Shipping Inc.

Good day, and thank you for standing by. Welcome to the Eagle Bulk Shipping Report's first quarter 2023 results. All participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will hear a message advising your hand is raised. To withdraw the question, simply press star 11 again. And be advised that today's conference is being recorded. I would now like to hand the conference over to Gary Pogo. The floor is yours.

Thank you, and good morning. I would like to welcome everyone to Eagle Vault's first quarter 2023 earnings call. To supplement our remarks today, I would encourage participants to access a slide presentation that is available on our website at eagleships.com. Please note, that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance and are inherently subject to risk and uncertainties. You should not place undue reliance on these forward-looking statements. Please refer to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties that may have a direct bearing on our operating results, our performance, and our financial condition. Our discussion today also includes certain non-GAAP financial measures, including TCE, TCE revenues, adjusted net income, EBITDA, and adjusted EBITDA. Please refer to the appendix in the presentation and our earnings release filed with the Securities and Exchange Commission for more information concerning non-GAAP financial measures and a reconciliation to the most comparable GAAP financial measures. Before I turn to our earnings presentation, I would like to take this opportunity to address an incident that occurred on board one of our vessels earlier this week. On Tuesday morning, three of our seafarers were kidnapped from the Grebe Boker while she was anchored at Owendo Gabon. While this is an ongoing situation and I'm limited in what I can say, I would like to convey that Eagle's committed to ensuring the safe and proper turn of the kidnapped men and the safety of their colleagues on board this ship as a matter of utmost urgency. Our highest priority is the safety and well-being of our seafarers and their families. We greatly appreciate the support of the authorities and our maritime industry colleagues as we work to bring these men safely home. Given the sensitive nature of the situation, we will be unable to provide further comment. Please turn to slide six. Against the backdrop of the seasonally weak market in Q1, and in line with previous information provided on TCE for the quarter, we generated a net income of $3.2 million, or 25 cents per share, basic. Based on this result, and consistent with our stated capital allocation strategy, EGLE's Board of Directors declared a cash dividend of 10 cents per share, equating to 40% of net income. On the vessel sale and purchase front, we've continued to act opportunistically. Following our recent acquisition of four modern high-specification Ultramaxes during a market pullback, we have taken advantage of a recent increase in both S&P liquidity and ship values and sold three non-core, non-scrubber-fitted Supermax vessels for total consideration of $49.8 million. These ships were the only non-scrubber fitted super maxes in our fleet and were purchased opportunistically just two years ago for total consideration of $28.2 million. Based on our calculations, we generated a levered IRR of 70% on this S&P trade, inclusive of cash generated during the period. Please turn to slide seven. For Q1, we achieved a net TCE of $12,917, representing an outperformance versus the benchmark BSI index of roughly 31%, or $3,041 per shift per day. Given the seasonal low we experienced during the quarter and our general view of markets for the balance of the year, we believe Q1 will represent a low in 2023 for both the BSI and our TCE. As we look to the second quarter, spot rates have improved considerably. We will discuss market fundamentals later on in the call, but as of today, we have fixed approximately 65% of our owned available days for Q2 at a net TCE of $16,030. I would now like to turn the call over to Costa Tsudoplidis, who took over the role of CFO on April 1st. For those of you who may not be aware, Costa has been with EGLE since 2010, and most recently served as our Chief Strategy Officer. Costa?

Thank you, Gary, and good morning, everyone. Before I begin with my prepared remarks, I would like to take this opportunity to thank my predecessor, Frank DiCostanzo, for his guidance and support over the past few months, as well as my colleagues within the finance group who have helped make my transition to the CFOC a seamless one. With that, let's proceed with a discussion of our financial results. Please turn to slide nine. For this quarter, we have revamped and simplified the presentation of our finance slides to provide readers with additional insight and perspective on our financial results for the period, as well as increased visibility on the quarter ahead. On slide nine, we're showcasing our P&L reformatted slightly from the GAAP presentation. Reflective of the seasonally week Q1, market our net top line performance or tce revenue came in at 59.2 million dollars for the period and based on 4581 actual owned available days we achieved the tce of 12 917 representing a significant outperformance against our benchmark index as gary indicated earlier Special operating expenses decreased roughly 12% quarter-on-quarter to total $31.3 million, or $6,497 per vessel per day, in line with our previous guidance. OpEx for the period included one-time takeover costs related to the Gibraltar Eagle, which was delivered to the company in February. Additionally, OpEx continued to be impacted by elevated crew costs related to wages, travel, and our seafarer nationality makeup which is primarily Eastern European. As we have discussed on previous calls, the Russia-Ukraine war has created challenges for us in terms of crew sourcing, management, and support for general well-being and has ultimately contributed to the cost inflation we have been experiencing. As a result of these challenges, we have added a new crew manager in order to diversify our source makeup and are currently in the process of reallocating the crew management on 20 of our ships. This transition is expected to negatively impact our crew-related costs for the next few quarters until the management changeover has been completed. General and administrative expenses decreased 5% quarter-in-quarter to a total of $10.9 million. This decrease is attributable to lower employee-related costs. CASH G&A expenses equated to $9.1 million or $18.90 per vessel per day. It is worth noting that our G&A figure per ship per day does not include our chartered-in fleet. If we were to include those days, our G&A figure would be approximately $1,580 per ship per day. During Q1, we sold and delivered the Jaeger, our oldest vessel in the fleet, and realized a gain on sale of $3.3 million. I think it's important to note that we sold the vessel just ahead of our statutory dry dock, allowing us to save on the associated and required CapEx spend. Net interest expense, inclusive of cash interest expense, cash interest income, and non-cash deferred financing fees, came in at $2 million for the quarter, in line with our prior guidance. The unrealized P&L on our outstanding FFA and bunker swap positions as of quarter end was negative $240,000. Adjust net income, which is net income adjusted for the unrealized gains and losses in the FFAs and bunker swaps, came in at $3.4 million, or 26 cents per share basic and diluted. Please note that the convertible bond was deemed to be anti-dilutive this quarter from an EPS perspective, and as such, the shares underlying the security were not included in the diluted share count. Adjusted EBITDA amounted to $18.7 million. Please turn to slide 10. We ended the quarter with a total cash position of $155.9 million, down 33.9 million as compared to December 31st. We generated positive cash flow of 7.4 million from operations, used 18.5 million for net vessel sale and purchase transactions, and made 21.1 million in debt repayments and dividend distributions. Please turn to slide 11. As of March 31st, we owned 53 vessels and had a total liquidity equal to $255.9 million. Total debt outstanding was $329.4 million, comprised of $225 million on the term loan and $104 million faced on the convert. Based on vessel values assessment of our fleet, we estimate our net debt to fleet ratio at 15.4%. In Q2, we expect to take delivery of the Halifax Eagle and the Vancouver Eagle and make associated payments for the remaining balance due of $54.2 million. On the sales side, we closed on the Newport Eagle this week and expect to complete the sales of the Montauk Eagle and Sankity Eagle by the end of the second quarter. We expect to receive total net sale proceeds of $48.6 million for the three ships and realize a total gain on sale of $17 million. Pro forma for these transactions, our fleet will total 52 ships with an estimated total cash and liquidity of $150 million and $235 million, respectively. Please turn to slide 12. As we look ahead into Q2, we are providing you with an informational outlook. Based on our current vessel S&P delivery timelines, we are forecasting a total of 4,805 owned days for the second quarter and 4,512 owned available days after taking into consideration estimates for both scheduled and unscheduled off-hire. As Gary indicated earlier, as of today, we have fixed approximately 65% of our owned available days at a TCE of 16,030. Please note that this figure is inclusive of our pro rata estimate for realized FFA gains and losses for the period on a mark-to-market basis. On the expense side, we are estimating the following. Vessel operating expenses are expected to come in line with Q1 with an estimated range of $6,300 to $6,600 per vessel per day. This range takes into consideration two vessel takeovers, planned spend on repairs and discretionary upgrades, as well as our estimate for costs associated with the crew management changeover initiative I discussed earlier. Excluding these non-recurring items, adjusted operating expenses is expected to come in between $5,900 and $6,300 per vessel per day. Non-cash depreciation amortization expenses to come in between $3,100 and $3,400 per vessel per day. G&A cash expenses to come in between $1,700 and $1,900 Non-cash stock-based compensation to come in between $350 and $450 per vessel per day. Net interest expense to come in between $500 and $700 per vessel per day. This concludes my remarks. I will now turn the call back to Gary, who will discuss the industry fundamentals.