SOURCE: DryShips Inc.

November 06, 2007 16:22 ET

DryShips Inc. Reports Results for the Third Quarter and Nine Months Ended September 30, 2007

ATHENS, GREECE--(Marketwire - November 6, 2007) - DryShips Inc. (NASDAQ: DRYS), a global provider of marine transportation services for drybulk cargoes, today announced its unaudited financial and operating results for the third quarter and nine months ended September 30, 2007.

Financial Highlights

--  The Company reported Net Income of $103.5 million or $2.92 per share,
    for the third quarter of 2007.  Included in the third quarter results is a
    capital gain on the sale of 2 vessels of $19.2 million or $0.54 per share.
    Excluding this gain, Net Income would amount to $84.3 million or $2.38 per
    share.
--  For the third quarter of 2007 the Company reported EBITDA, excluding
    vessel gains, of $117.3 million, which is the highest EBITDA reported in a
    single quarter since the Company's inception(1).
--  In September 2007 the Company declared its tenth consecutive quarterly
    cash dividend of $0.20 per common share which was paid on October 31, 2007.
    

George Economou, the Chairman and Chief Executive Officer of DryShips Inc., commented:

"We are pleased to report a third consecutive quarter with record EBITDA reflecting the strength of the current drybulk market. We continue to actively manage our fleet portfolio with a goal to ensure the longevity and quality of our fleet's earning capacity. Once the recently announced sale and purchase activity has been completed by the second quarter of 2008, the Company's fleet will consist of a total of 46 vessels (including 8 newbuildings) with an average age of 8.5 years, well below the industry average of about 13 years.

"We remain committed to implementing our chartering philosophy. By having the majority of the Company's vessels operating in the spot market we are able to take advantage of market opportunities as they arise. As of today, 36% of our fleet operating days for the fourth quarter of 2007 remain unfixed.

"The outlook for 2008 remains positive. We will have approximately 16% more fleet operating days compared to 2007 and approximately 85% of the fleet operating days unfixed. With overall debt leverage of just below 25% adjusted for the market values of its vessels, DryShips is in a unique position to seek growth opportunities as they arise."

Third Quarter 2007 Results

For the third quarter ended September 30, 2007, Time charter equivalent revenues (Voyage revenues less voyage expenses) amounted to $140.5 million as compared to $56.2 million for the third quarter ended September 30, 2006. Operating Income was $118.2 million for the quarter ended September 30, 2007, as compared to $15.7 million for the quarter ended September 30, 2006. Net Income for the third quarter ended September 30, 2007 was $103.5 million or $2.92 Earnings Per Share calculated on 35.49 million weighted average basic and diluted shares outstanding as compared to $3.5 million or $0.11 Earnings Per Share calculated on 33.23 million weighted average basic and diluted shares outstanding for the quarter ended September 30, 2006. EBITDA for the third quarter of 2007 was $136.5 million as compared to $35.8 million in the quarter ended September 30, 2006.(1)

An average of 33.7 vessels were owned and operated during the third quarter of 2007, earning an average Time Charter Equivalent, or TCE, rate of $45,525 per day as compared to an average of 29.8 vessels owned and operated during the third quarter of 2006 earning an average TCE rate of $20,808 per day.

Nine Months ended September 30, 2007 Results

For the nine months ended September 30, 2007, Time charter equivalent revenues (Voyage revenues less voyage expenses) amounted to $327.4 million as compared to $158.5 million for the nine months ended September 30, 2006. Operating Income was $316.2 million for the nine month period ended September 30, 2007, as compared to $50.3 million for the nine month period ended September 30, 2006. Net Income for the nine months ended September 30, 2007 was $280.2 million or $7.89 Earnings Per Share calculated on 35.49 million weighted average basic and diluted shares outstanding as compared to $20.8 million or $0.66 Earnings Per Share calculated on 31.34 million weighted average basic and diluted shares outstanding for the nine months ended September 30, 2006. EBITDA for the nine month period ended September 30, 2007 was $371.5 million as compared to $95.3 million for the nine month period ended September 30, 2006.(1)

An average of 32.8 vessels were owned and operated during the nine months ended September 30, 2007, earning an average or TCE rate of $37,108 per day as compared to an average of 28.4 vessels owned and operated during the nine months ended September 30, 2006 earning an average TCE rate of $20,902 per day.

Drydock related expenses

During the third quarter of 2007, one vessel completed drydocking for a total cost of $0.5 million. Such costs are capitalized and amortized until the vessels' next drydock.

(1) Please see later in this release for a reconciliation of EBITDA
    to net cash provided by Operating activities.

Capitalization

On September 30, 2007, debt to total capitalization (debt, net of deferred financing fees and stockholder's equity) was 53.81% and net debt (total debt less cash and cash equivalents) to total capitalization was 51.43%.

As of September 30, 2007, the Company had a total liquidity of approximately $74.7 million.

Financing activities

On August 30, 2007 the Company concluded a bridge facility of up to $30.1 million with HSH Nordbank. The loan bears interest at LIBOR plus 1.5% and will be repaid in one installment during the first quarter of 2008.

On October 2, 2007 the Company concluded a loan agreement of up to $35 million with Deutsche Schiffsbank in order to partly finance the acquisition cost of the second hand vessel MV Clipper Gemini. The loan bears interest at LIBOR plus 0.9% and will be repaid in thirty-six quarterly installments starting in the first quarter of 2008.

On October 5, 2007 the Company concluded a loan agreement of up to $90 million with Piraeus Bank in order to partly finance the acquisition cost of the second hand vessels MV Samatan and MV VOC Galaxy. The loan bears interest at LIBOR plus between 0.95% and 1.05% depending on corporate leverage and will be repaid in thirty-two quarterly installments starting in the first quarter of 2008.

As of November 6, 2007 the Company had a total of $794.2 million in debt outstanding under its main credit facility with HSH Nordbank.

Fleet Developments

Vessels Acquired and Delivered

On August 29, 2007, the Company took delivery of the MV Ecola, a 2001 built second-hand 73,931 dwt Panamax drybulk carrier, which it had agreed to acquire on November 23, 2006, for a purchase price of $39.7 million.

On October 9, 2007, the Company took delivery of the MV Clipper Gemini, a 2003 built second-hand 51,201 dwt Supramax drybulk carrier, which it had agreed to acquire on June 8, 2007, for a purchase price of $50.2 million. The vessel commenced a bareboat charter back to the Seller for a period of between 13 and 15 months at a daily bareboat rate of $27,000.

On October 17, 2007, the Company took delivery of the MV Samatan, a 2001 built second-hand 74,823 dwt Panamax drybulk carrier, which it had agreed to acquire on August 15, 2007, for a purchase price of $71.0 million.

Vessels Sold - To be delivered

On October 1, 2007 the Company entered into an agreement to sell the MV Matira, a 1994 built, 45,863 dwt Handymax drybulk carrier for a sale price of $46.5 million with delivery to the new owners scheduled to take place in the first quarter of 2008. The Company expects to realize a gain of approximately $24.6 million.

Newbuilding Acquisitions - To be delivered

On October 1, 2007 the Company entered into an agreement, with an unaffiliated third party, to acquire a resale contract for a 170,000 dwt Capesize bulk carrier under construction in South Korea, for a price of $147.5 million. The vessel is expected to be delivered during the second quarter of 2008.

The above vessel is being acquired as re-sale from the sellers and delivery to DryShips is expected to be "back to back" with the delivery of the vessel to the seller by the shipyard.

Gain on Vessel Disposals

As of September 30, 2007 DryShips has realized an aggregate gain on vessel disposals of $103.5 million or $2.92 per share and expects to realize additional vessel gains for the remainder of the year in the amount of approximately $31.0 million or $0.87 per share. For the whole of 2007 DryShips expects to realize a total gain on vessel disposals of approximately $134.5 million or $3.79 per share.

When all the second hand acquisitions and disposals are concluded by the end of the second quarter of 2008, DryShips' fleet will include 46 drybulk carriers comprising 6 Capesize, 31 Panamax, 2 Supramax, and 7 newbuilding drybulk vessels, with a combined deadweight capacity of approximately 4.2 million deadweight tons, and an average age of 8.4 years.

Fleet Employment Developments

The Company has entered its 2004 built 73,601 dwt Panamax bulk carrier MV Padre into a time charter for a period of about 12 months at a daily rate of $81,000. The vessel commenced its new charter on November 6, 2007.

The Company has entered its 2000 built 75,706 dwt Panamax bulk carrier MV Coronado into a time charter for a period of about 12 months at a daily rate of $81,750. The vessel commenced its new charter on November 2, 2007.

The Company has entered its 1998 built 72,495 dwt Panamax bulk carrier MV Primera into a time charter for a period of about 12 months at a daily rate of $78,600. The vessel commenced its new charter on October 19, 2007.

The Company has entered its 1996 built 70,349 dwt Panamax bulk carrier MV Iguana into a time charter for a period of about 12 months at a daily rate of $77,000. The vessel is expected to commence its new charter on or about November 13, 2007.

As of November 6, 2007, approximately 36% and 85% of the total vessel operating days for fourth quarter 2007 and calendar year 2008 respectively remain unfixed.

Capital expenditures

The Company expects to incur the following capital expenditures associated with vessel drydocking costs:

                                 Fourth quarter
                                      2007        2008
    Number of vessels                  1           5
    Expected cost in USD millions     0.5         4.5
    Off-hire days                      15         125

Such costs are capitalized and amortized until the vessel's next drydock. The actual days and expenses in connection with vessel drydockings will vary based on the shipyard schedule, weather, condition of the vessel and other factors.

In addition the Company expects to incur expenses for peripheral supplies and other repair works while the vessels will be in drydock which will be included in vessel operating expenses for the respective quarter.

Dividend Payment

In September 2007, DryShips declared its tenth consecutive quarterly cash dividend of $0.20 per common share which was paid on October 31, 2007 to stockholders of record on October 15, 2007. Since the Company's IPO in February 2005, DryShips has paid total dividends of $2.00 per common share.

Fleet Data

Third Quarter 2007

Total TCE revenue increased during the third quarter of 2007 compared to the third quarter of 2006, primarily as a result of an increase in the average number of vessels operated, from an average of 29.8 vessels in the third quarter of 2006 to 33.7 vessels in the third quarter of 2007, and an increase in the daily average TCE rate from $20,808 in the third quarter of 2006 to $45,525 in the third quarter of 2007.

Vessel operating expenses increased to $15.3 million for the third quarter of 2007 compared to $11.9 million for the third quarter of 2006. The increase is attributable to the increase in the number of vessels operated from an average of 29.8 vessels for the third quarter of 2006 to 33.7 vessels for the third quarter of 2007 and costs typically associated with the delivery of new vessels.

Depreciation and amortization increased to $20.8 million in the third quarter of 2007 compared to $15.5 million in the third quarter of 2006. This was a direct result of the increase in the Company's fleet from an average of 29.8 vessels in the third quarter of 2006 to an average of 33.7 vessels in the third quarter of 2007.

Management fees increased to $2.4 million in the third quarter of 2007 compared to $1.7 million in the third quarter of 2006 as a direct result of the increase in the number of fleet calendar days from 2,738 in the third quarter of 2006 to 3,098 in the third quarter of 2007 due to the growth of the fleet and the appreciation of the Euro versus the USD.

General and administrative expenses increased to $3.0 million in the third quarter of 2007 from $1.8 million in the third quarter of 2006. The increase results mainly from increased legal and audit fees, fees relating to compliance with the requirements of the Sarbanes-Oxley Act of 2002 and the appreciation of the Euro versus the USD.

Nine Months ended September 30, 2007

Total TCE revenue increased during the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006, primarily as a result of an increase in the average number of vessels operated, from an average of 28.4 vessels in the nine months ended September 30, 2006 to 32.8 vessels in the nine months ended September 30, 2007, and an increase in the daily average TCE rate from $20,902 in the nine months ended September 30, 2006 to $37,108 in the nine months ended September 30, 2007.

Vessel operating expenses increased to $44.3 million during the nine months ended September 30, 2007 compared to $33.5 million during the nine months ended September 30, 2006. The increase is attributable to the increase in the number of vessels operated from an average of 28.4 vessels during the nine months ended September 30, 2006 to 32.8 vessels during the nine months ended September 30, 2007 and costs typically associated with the delivery of new vessels.

Depreciation and amortization increased to $56.4 million during the nine months ended September 30, 2007 compared to $43.7 million during the nine months ended September 30, 2006. This was a direct result of the increase in the Company's fleet from an average of 28.4 vessels during the nine months ended September 30, 2006 to an average of 32.8 vessels during the nine months ended September 30, 2007.

Management fees increased to $7.0 million in the nine months ended September 30, 2007 compared to $4.7 million in the nine months ended September 30, 2006 as a direct result of the increase in the number of fleet calendar days from 7,743 during the nine months ended September 30, 2006 to 8,965 during the nine months ended September 30, 2007 due to the growth of the fleet and the appreciation of the Euro versus the USD.

General and administrative expenses increased to $6.9 million during the nine months ended September 30, 2007 from $3.8 million during the nine months ended September 30, 2006. The increase results mainly from increased legal and audit fees, fees relating to compliance with the requirements of Sarbanes-Oxley Act of 2002 and the appreciation of the Euro versus the USD.

Third Quarter 2007

(Dollars in thousands, except
Average Daily Results - unaudited)              Three Months  Three Months
                                                    Ended        Ended
                                                September 30, September 30,
                                                     2007         2006
                                                ============  ============
Average number of vessels (1)                           33.7          29.8
Total voyage days for fleet (2)                        3,086         2,700
Total calendar days for fleet (3)                      3,098         2,738
Fleet Utilization (4)                                   99.6%         98.6%
Time charter equivalent (5)                           45,525        20,808
Capesize                                              61,163        29,542
Panamax                                               43,174        19,219
Handymax                                              30,521        15,038
Vessel operating expenses (daily) (6)                  4,932         4,344
Management fees (daily)                                  780           625
General and administrative expenses (daily) (7)          973           661
Total vessel operating expenses (daily) (8)            6,685         5,630


Nine Months ended September 30, 2007

(Dollars in thousands, except
Average Daily Results - unaudited)   Nine Months Ended   Nine Months Ended
                                    September 30, 2007  September 30, 2006
                                    ==================  ==================
Average number of vessels (1)                     32.8                28.4
Total voyage days for fleet (2)                  8,823               7,582
Total calendar days for fleet (3)                8,965               7,743
Fleet Utilization (4)                             98.4%               97.9%
Time charter equivalent (5)                     37,108              20,902
Capesize                                        52,536              31,033
Panamax                                         35,331              18,913
Handymax                                        24,016              14,751
Vessel operating expenses (daily)
 (6)                                             4,941               4,325
Management fees (daily)                            787                 602
General and administrative expenses
 (daily) (7)                                       771                 493
Total vessel operating expenses
 (daily) (8)                                     6,499               5,420

(1) Average number of vessels is the number of vessels that constituted our
fleet for the relevant period, as measured by the sum of the number of days
each vessel was a part of our fleet during the period divided by the number
of calendar days in that period.
(2) Total voyage days for the fleet are the total days vessels were owned
by us for the relevant period net of off hire days associated with major
repairs, drydockings or special or intermediate surveys.
(3) Calendar days are the total days the vessels were owned by us for the
relevant period including off hire days associated with major repairs,
drydockings or special or intermediate surveys.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by dividing
voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined by
dividing voyage revenues (net of voyage expenses) by voyage days for the
relevant time period. Voyage expenses primarily consist of port, canal and
fuel costs that are unique to a particular voyage, which would otherwise be
paid by the charterer under a time charter contract, as well as
commissions. TCE is a standard shipping industry performance measure used
primarily to compare period-to-period changes in a shipping company's
performance despite changes in the mix of charter types (i.e., spot
charters, time charters and bareboat charters) under which the vessels may
be employed between the periods.
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and repairs
is calculated by dividing vessel operating expenses by fleet calendar days
for the relevant time period.
(7) Daily general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period
(8) Total vessel operating expenses, or TVOE, is a measurement of our total
expenses associated with operating our vessels. TVOE is the sum of vessel
operating expenses, management fees and general and administrative
expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days
for the relevant time period.

TCE Rates:

The following table reflects the calculation of our TCE rates for the periods then ended:

(Dollars in        Three          Three          Nine           Nine
 thousands)     Months Ended   Months Ended   Months Ended   Months Ended
               Sept. 30, 2007 Sept. 30, 2006 Sept. 30, 2007  Sept. 30, 2006
                -------------  -------------  -------------  -------------

Voyage revenues       150,011         59,968        349,182        169,324
Voyage expenses        (9,522)        (3,787)       (21,779)       (10,843)

                -------------  -------------  -------------  -------------
Time charter
 equivalent
 revenues             140,489         56,181        327,403        158,481
                =============  =============  =============  =============

Total voyage
 days for fleet         3,086          2,700          8,823          7,582

Time charter
 equivalent
 (TCE) rate            45,525         20,808         37,108         20,902

DryShips Inc. Fleet

As at September 30, 2007, the Company's fleet consisted of 34 vessels.

During the three month period ended September 30, 2007, the Company operated the following types of vessels:

                               Capesize   Panamax   Handymax    Total
                               --------   -------   --------    -----
Average number of vessels
 during period                    5.00      27.67      1.00      33.67
Number of vessels at end
 of period                        5.00      28.00      1.00      34.00
Dwt at end of period           792,657  2,054,965    45,863  2,893,485
DWT as percentage of
 total fleet                     27.39%     71.02%     1.59%    100.00%

During the nine month period ended September 30, 2007, the Company operated the following types of vessels:

                               Capesize   Panamax   Handymax    Total
                               --------   -------   --------    -----
Average number of vessels
 during period                    4.69      25.97      2.18     32.84
Number of vessels at end
 of period                        5.00      28.00      1.00     34.00
Dwt at end of period           792,657  2,054,965    45,863 2,893,485
DWT as percentage
 of total fleet                  27.39%     71.02%     1.59%   100.00%

Financial Statements

The following are DryShips Inc.'s Unaudited Condensed Consolidated Statements of Income for the three and nine-month periods ended September 30, 2007 and September 30, 2006:

(Dollars in thousands, except
 per share data - unaudited)       Nine       Nine      Three      Three
                                  Months     Months     Months     Months
                                  Ended      Ended      Ended      Ended
                                September  September  September  September
                                30, 2007   30, 2006   30, 2007   30, 2006
                                ---------- ---------- ---------- ----------

INCOME STATEMENT DATA

Voyage revenues                 $  349,182 $  169,324 $  150,011 $   59,968
Loss on forward freight
 agreements                                    22,473                 9,610
Voyage expenses                     21,779     10,843      9,522      3,787

Vessel operating expenses           44,296     33,490     15,279     11,894
Depreciation and amortization       56,423     43,749     20,826     15,475
Gain on sale of vessels           -103,512               -19,229
Management fees                      7,057      4,666      2,416      1,712
General and administrative           6,911      3,814      3,016      1,810

                                ---------- ---------- ---------- ----------
Operating Income                   316,228     50,289    118,181     15,680
                                ---------- ---------- ---------- ----------

Interest and finance costs, net    -34,887    -30,703    -12,125    -16,779
Other, net                          -1,155      1,233     -2,508      4,612
                                ---------- ---------- ---------- ----------
NET INCOME                      $  280,186 $   20,819 $  103,548 $    3,513
                                ========== ========== ========== ==========
Basic and fully diluted
 earnings per share             $     7.89 $     0.66 $     2.92 $     0.11
                                ========== ========== ========== ==========
Weighted average basic and
 diluted shares outstanding     35,490,097 31,343,241 35,490,097 33,233,421
                                ---------- ---------- ---------- ----------

The following are DryShips Inc.'s Consolidated Balance Sheets as at September 30, 2007 (unaudited) and December 31, 2006 (audited):

(Expressed in thousands of U.S. Dollars -
 except for share and per share data)
                                                December 31,  September 30,
                                                    2006          2007
                                                ------------- -------------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                             2,537        47,949
  Restricted cash                                       6,614         6,775
  Accounts receivable trade                             3,187         6,814
  Insurance claims                                        671         4,816
  Due from related parties                              3,353         6,690
  Inventories                                           2,571         2,873
  Prepayments and advances                              5,568         7,550
  Fair value of above market acquired time
   charter                                              1,335             -
  Financial instruments                                    39
                                                ------------- -------------
        Total current assets                           25,875        83,467
                                                ------------- -------------

FIXED ASSETS, NET:
  Advances for vessels under construction and
   acquisitions                                        27,380       111,444
  Vessels, net                                      1,084,924     1,340,657
                                                ------------- -------------
        Total fixed assets, net                     1,112,304     1,452,101
                                                ------------- -------------
OTHER NON CURRENT ASSETS:
  Deferred charges, net                                 6,200         2,495
  Restricted cash                                      20,000        20,000
  Financial instruments                                   946           564
  Other                                                 2,848         2,215

                                                ------------- -------------
        Total assets                                1,168,173     1,560,842
                                                ============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current portion of long-term debt                    71,412       110,198
  Accounts payable                                     11,423         8,261
  Due to related parties                               25,086             -
  Accrued liabilities                                   6,326        10,905
  Deferred revenue                                     12,270        10,131
  Financial Instruments                                 2,625             -
  Other current liabilities                               202           184
  Dividends payable                                         -         7,098
                                                ------------- -------------

        Total current liabilities                     129,344       146,777
                                                ------------- -------------

NON CURRENT LIABILITIES:
Fair value of below market acquired time
 charter                                                    -         2,385
Long term debt, net of current portion                587,330       708,538
Financial Instruments                                       -            89
Other                                                     607           367
                                                ------------- -------------
   Total non current liabilities                      587,937       711,379
                                                ------------- -------------

COMMITMENTS AND CONTIGENCIES                                -             -
STOCKHOLDERS' EQUITY:
  Preferred stock, $ 0.01 par value; 30,000,000
   shares authorized, none issued.                          -             -
  Common stock, $0.01 par value; 75,000,000
   shares authorized; 35,490,097 shares issued
   and outstanding.                                       355           355
  Additional paid-in capital                          327,446       327,446
  Retained earnings                                   123,091       374,885
                                                ------------- -------------
        Total stockholders' equity                    450,892       702,686
                                                ------------- -------------
        Total liabilities and stockholders'
         equity                                     1,168,173     1,560,842

                                                ============= =============

EBITDA Reconciliation

DryShips Inc. considers EBITDA to represent net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included herein because it is a basis upon which the Company assesses its liquidity position, it is used by our lenders as a measure of our compliance with certain loan covenants and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

The following table reconciles net cash from operating activities to EBITDA:

(Dollars in thousands)                3 Months Ended      3 Months Ended
                                    September 30, 2007  September 30, 2006
                                    ------------------  ------------------

Net cash provided by operating
 activities                                    102,409              27,575
Net (decrease) / increase in
 current assets                                  2,105             (12,826)
Net decrease / (increase) in
 current liabilities, excluding
 currrent portion of long term debt              1,162               9,486
Gain on sale of vessels                         19,229
Amortization of deferred revenue                 1,069              (1,750)
Amortization of free lubricants                     88                 203
Change in fair value of derivatives             (1,648)            (17,049)
Net Interest expense                            12,125              16,779
Amortization of deferred financing
 costs included in interest expense                230                (182)
Payments for dry-docking costs                    (318)                668
Freight Forward Agreements                           0              12,863
                                    ------------------  ------------------
EBITDA                                         136,451              35,767
                                    ==================  ==================


(Dollars in thousands)                9 Months Ended      9 Months Ended
                                    September 30, 2007  September 30, 2006
                                    ------------------  ------------------

Net cash provided by operating
 activities                                    219,489              73,442
Net (decrease) / increase in
 current assets                                 12,760               1,824
Net decrease / (increase) in
 current liabilities, excluding
 currrent portion of long term debt             (4,745)              3,965
Gain on sale of vessels                        103,512                   -
Amortization of deferred revenue                 3,724              (1,598)
Amortization of free lubricants                    258                 120
Change in fair value of derivatives              2,115             (13,927)
Net interest expense                            34,887              30,703
Amortization of deferred financing
 costs included in interest expense             (1,732)             (3,290)
Payments for dry-docking costs                   1,228               4,032
                                    ------------------  ------------------
EBITDA                                         371,496              95,271
                                    ==================  ==================

Fleet List

The table below describes in detail our fleet development and current employment profile as of November 6, 2007:

                                                   Gross
             Year                      Current      Rate      Redelivery
            Built   DWT       Type    Employment  per Day   Earliest Latest
Capesize:
Manasota     2004   171,061  Capesize       Spot $ 166,000   Prompt  Prompt
Alameda      2001   170,269  Capesize         TC $  73,000   Jan-08  Mar-08
Samsara      1996   150,393  Capesize         TC $  55,500   Prompt  Prompt
Netadola     1993   149,475  Capesize         TC $  52,500   Prompt  Prompt
Brisbane     1995   151,066  Capesize       Spot $  95,000   Prompt  Prompt
              9.0   792,264         5
Panamax:
Heinrich
 Oldendorff  2001    73,931   Panamax         BB $  28,000   Apr-08  Jun-08
Ligari       2004    75,583   Panamax         TC $  31,550   Prompt  Prompt
Padre        2004    73,601   Panamax         TC $  81,000   Oct-08  Nov-08
Mendocino    2002    76,623   Panamax         TC $  37,500   Prompt  Dec-07
Maganari     2001    75,941   Panamax         TC $  18,400   Apr-08  Jul-08
Coronado     2000    75,706   Panamax         TC $  81,750   Sep-08  Oct-08
Ocean
 Crystal     1999    73,688   Panamax         TC $  40,000   Prompt  Prompt
Primera      1998    72,495   Panamax         TC $  78,600   Sep-08  Oct-08
La Jolla     1997    72,126   Panamax         TC $  46,000   Prompt  Dec-07
Lanzarote    1996    73,008   Panamax         TC $  43,750   Prompt  Prompt
Iguana       1996    70,349   Panamax         TC $  77,000   Oct-08  Nov-08
Waikiki      1995    75,473   Panamax         TC $  36,750   Jan-08  Mar-08
Sonoma       2001    74,786   Panamax  Baumarine $  60,941
Toro         1995    73,034   Panamax  Baumarine $  58,742
Lacerta      1994    71,862   Panamax  Baumarine $  59,176
Catalina     2005    74,432   Panamax       Spot $  80,000   Prompt  Prompt
Majorca      2005    74,364   Panamax       Spot $  72,000   Prompt  Prompt
Bargara      2002    74,832   Panamax       Spot $  75,300   Prompt  Prompt
Capitola     2001    74,832   Panamax       Spot $  80,000   Prompt  Prompt
Samatan      2001    74,823   Panamax       Spot $  80,000   Prompt  Prompt
Ecola        2001    73,931   Panamax       Spot $  82,000   Prompt  Prompt
Redondo      2000    74,716   Panamax       Spot $  85,000   Prompt  Prompt
Marbella     2000    72,561   Panamax       Spot $  61,000   Prompt  Prompt
Xanadu       1999    72,270   Panamax       Spot $  84,500   Prompt  Prompt
Menorca      1997    71,662   Panamax       Spot $  75,000   Prompt  Prompt
Formentera   1996    70,002   Panamax       Spot $  72,000   Prompt  Prompt
Solana       1995    75,100   Panamax       Spot $  88,750   Prompt  Prompt
Paragon      1995    71,259   Panamax       Spot $  64,000   Prompt  Prompt
Tonga        1984    66,798   Panamax       Spot $  70,500   Prompt  Prompt
              8.2 2,129,788        29
Handymax:
Matira       1994    45,863  Handymax         TC $  32,300   Oct-07  Dec-07
             13.0    45,863         1
Supramax
Clipper
 Gemini      2003    51,201  Supramax         BB $  27,000   Nov-08  Jan-09
                4    51,201         1
Newbuildings:
TBN          2007   170,000  Capesize
TBN          2009   180,000  Capesize
TBN          2009   180,000  Capesize
TBN          2010   180,000  Capesize
TBN          2010    82,000  Kamsrmax
TBN          2010    82,000  Kamsrmax
TBN          2009    75,000   Panamax
TBN          2010    75,000   Panamax
                  1,024,000         8

Total Fleet   8.4 4,043,116        44

1. For spot vessels the TCE rate is for the current voyage
2. Prompt implies current month
3. For vessels trading in the Baumarine pool the TCE rate is the Pool's
   estimate for earnings in the month of October
4. The quoted rates are not indications of future earnings and the Company
   gives no assurance or guarrantee of future rates.


Conference Call and Webcast: November 7, 2007, at 10 a.m. EST

DryShips management team will host a conference call on November 7, 2007, at 10 a.m. Eastern Time to discuss the Company's financial results for the third quarter and nine months ended September 30, 2007.

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819- 7111 (from the US), 0(800) 953 953- 0329 (from the UK) or +(44) 1452 542 301 (from outside the US). Please quote "DryShips."

In case of any problem with the above numbers, please dial 1(866) 223 0615 (from the US), 0(800) 694- 1503 (from the UK) or +(44) 1452 586 -513 (from outside the US). Quote "DryShips."

A replay of the conference call will be available until November 14, 2007. The United States replay number is 1(866) 247 4222; the international replay number is (0(800) 953 -1533; from the UK or (+44) 1452- 550 000 and the access code required for the replay is: 2133051#.

Slides and audio webcast:

There will also be a simultaneous live webcast over the Internet, through the DryShips Inc. website (www.dryships.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About DryShips Inc.

DryShips Inc. is an international provider of drybulk cargo marine transportation services. Headquartered in Athens, Greece, DryShips owns and operates a fleet of 44 drybulk carriers comprising 5 Capesize, 29 Panamax, 1 Supramax, 1 Handymax and 8 newbuilding drybulk vessels, with a combined capacity of approximately 4.0 million deadweight tons.

DryShips Inc.'s common stock is listed on NASDAQ Global Market where it trades under the symbol "DRYS."

Visit our website at www.dryships.com

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although DryShips Inc. believes 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, DryShips Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

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 changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in DryShips Inc.'s operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the US Securities and Exchange Commission.

Contact Information