In short, NCL posted a reasonably positive-mixed quarterly earnings. They beat their earnings per share by $0.02, however missed their target revenue by $14.86 million. This last parts a killer. Their stock is trading lower now because of it. But for a company that’s always struggled to stay in the black, these aren’t terrible earnings.
Full results after the jump:
Norwegian Cruise Line (Nasdaq:NCLH) (Norwegian Cruise Line Holdings Ltd., NCL Corporation Ltd., “Norwegian” or “the Company”), today reported results for the quarter ended June 30, 2013, and provided guidance for the third quarter and full year 2013.
Quarter Highlights
- Adjusted Net Income growth of 67.1% to $60.2 million with Adjusted EPS of $0.29
- Adjusted EBITDA increase of 12.8% to $152.3 million
- Net Yield increase of 3.5% (3.7% on a Constant Currency basis)
- Successful delivery and launch of Norwegian Breakaway
- Refinancing transactions strengthen balance sheet, lower interest expense going forward
Second Quarter 2013 Results
“While the addition of Norwegian Breakaway to our fleet was undoubtedly the highlight of the quarter, our strong results, which include our twentieth consecutive quarter of year-over-year Adjusted EBITDA growth, are equally as notable,” said Kevin Sheehan, president and chief executive officer of Norwegian Cruise Line. “Other initiatives in the quarter, from the refinancing of certain credit facilities to further optimize our capital structure, to the enhancements carried out on Pride of America at her recent dry-dock, demonstrate our culture of leaving no stone unturned in order to add incremental value for our shareholders and enhance the cruise experience for our guests.”
The Company reported Adjusted Net Income for the second quarter of 2013 of $60.2 million and Adjusted EPS of $0.29 compared to $36.0 million and$0.20 in 2012, respectively. Adjusted Net Income and Adjusted EPS exclude expenses totaling $70.1 million related to refinancing transactions in the quarter (see “Transactions in the Quarter”). On a GAAP basis, net loss and diluted loss per share were $(8.8) million and $(0.04), respectively.
An increase in Capacity Days and improvement in Net Yield resulted in a 12.0% increase in Net Revenue in the quarter. The addition of Norwegian Breakaway to the fleet, partially offset by planned Dry-docks for Pride of America and Norwegian Pearl, contributed to the 8.2% increase in Capacity Days while improvements in both passenger ticket and onboard revenue resulted in a 3.5% (3.7% on a Constant Currency basis) increase in Net Yield.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 4.8% on both an as reported and Constant Currency basis over prior year due to the timing of planned Dry-docks along with inaugural and launch expenses related to Norwegian Breakaway. Fuel price per metric ton, net of hedges, was essentially flat to prior year at $686 compared to $684 in 2012.
Interest expense, net in the quarter exceeded prior year by $54.8 million primarily due to expenses totaling $70.1 million related to the refinancing of certain credit facilities and the redemption of the remaining balance of the Company’s $350 million 9.5% Senior Unsecured Notes due 2018 (see “Transactions in the Quarter”).
Transactions in the Quarter
During the quarter the Company completed two refinancing transactions which strengthened the Company’s balance sheet and will reduce interest expense going forward. The first transaction, a new $1.3 billion credit facility comprised of a $675 million term loan and a $625 million non-amortizing revolving credit facility, refinanced certain credit facilities secured by Norwegian Star, Spirit, Sun, Dawn, Pearl and Gem. In conjunction with this transaction the Company redeemed the remaining $228 million outstanding balance of its $350 million 9.5% Senior Unsecured Notes due 2018. The second transaction amended certain credit facilities secured by Norwegian Jewel, Jade and Pride of America to reduce applicable margins and enhance certain terms and conditions. These transactions resulted in no material change in debt levels. Expenses related to the transactions, including write-off of deferred financing fees and premiums for the redemption of the Senior Unsecured Notes, totaled $70.1 million and are included in interest expense.