-- A book loss of approximately $20.8 million associated with the sale of
the M/V Richmond which was delivered to the new owners on September 30,
2009.
-- A loss of $2 million associated with the change in fair value of
interest rate swaps.
Excluding the above items Net Income for the third quarter of 2009 would be
$9.5 million or $0.11 per share.
Anthony Kandylidis, the Company's President and Chief Executive Officer,
commented:
"Excluding the one off charges due to the sale of an older panamax vessel,
our net income on an operating basis would have been about 11 cents per
share, well above analyst expectations. OceanFreight is very privileged not
to have any capital commitments at this time. With our proven access to
capital and our track record of sourcing modern high quality tonnage with
fixed employment we continue to renew our fleet and enhance the longevity
of our cash flows. As of the day of this press release we have secured
gross revenues of $115 million until the end of 2010 with 92% fleet charter
coverage for the remainder of 2009 and 72% for 2010. We remain uniquely
positioned among our competitors to use fresh capital to finance asset
opportunities at historically low values, which we believe will be
accretive to shareholder value over the long term."
Fleet Developments
-- The Company delivered to their new owners the vessels M/V Lansing, the
M/V Richmond and the M/V Juneau on July 1, 2009, September 30, 2009 and
October 23, 3009, respectively, for an aggregate sale price of $62.4
million.
-- The Company took delivery of the M/V Partagas, a 2004-built 173,880
dwt Capesize drybulk carrier and the M/V Robusto a 2006-built 173,949
Capesize drybulk carrier, on July 30, 2009 and October 19, 2009,
respectively, for a total cost of $117.25 million. Upon delivery, the
vessels commenced fixed rate employment on time charters for a three year
and five year minimum period at a gross daily rate of $27,500 and $26,000
per day, respectively.
-- In addition, as previously announced the Company has entered into
agreements to purchase a 2006-built 174,200 dwt Capesize drybulk carrier,
to be renamed M/V Cohiba, for a purchase price of $61.25 million and a 2005-
built 180,263 dwt Capesize drybulk carrier, to be renamed M/V Montecristo,
for a purchase price of$49.5 million. We expect to take delivery of the M/V
Cohiba in December 2009 following which it will commence a time charter
employment for a minimum period of five years at a daily gross rate of
$26,250. We expect to take delivery of the M/V Montecristo in the second
quarter of 2010 following which it will commence on a time charter
employment for a minimum period of four years at a gross daily rate of
$23,500.
-- Upon completion of the above transactions, our fleet will consist of
14 vessels, comprised of 10 dry bulk carriers (4 Capesizes, 6 Panamaxes)
and 4 tankers (1 Suezmax, 3 Aframaxes) with a combined deadweight tonnage
of approximately 1.6 million tons and a weighted average age of
approximately 10.2 years.
Third Quarter 2009 Results
For the third quarter ended September 30, 2009, Voyage Revenues amounted to
$29.5 million, Operating Loss amounted to $6.7 million which includes the
effect of the loss from the sale of vessels and Net Loss amounted to $13.3
million or $(0.15) per share. EBITDA(1) for the third quarter of 2009 was
$17.7 million as adjusted for the effect of the loss from the sale of
vessels.
An average of 12.7 vessels were owned and operated during the third quarter
of 2009, earning an average Time Charter Equivalent, or TCE rate, of
$31,495 per day.
(1) Please see later in this release for a reconciliation of adjusted
EBITDA to net cash provided by Operating activities.
Financing
As of the date of this release we have raised approximately $62 million in
net proceeds under the current Standby Equity Distribution Agreement with
YA Global Master SPV ltd., an affiliate of Yorkville Advisors. The proceeds
of this offering together with the existing loan facilities are expected to
be sufficient to finance the vessel acquisitions announced to date. As of
the date this release the Company has 142,600,001 shares outstanding.
Liquidity
As of September 30, 2009, the Company had total liquidity of approximately
$65.5 million.
Fleet Data
(Dollars in thousands, except Average
Daily Results - unaudited) Three Months Ended
September 30,
2008 2009
----------------- -----------------
Average number of vessels (1) 11 12.7
Total voyage days for fleet (2) 1,005 1,154
Total calendar days for fleet (3) 1,012 1,167
Time charter equivalent (4) $ 35,649 $ 31,495
(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 fleet are the total days the vessels were in our
possession for the relevant period net of off -hire.
(3) Calendar days are the total days the vessels were in our possession for
the relevant period including off -hire days.
(4) Time charter equivalent rate, 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 gross 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.
The following table reflects the calculation of our TCE rates for the
periods then ended:
(Dollars in thousands, Three Months Ended
except Average Daily Results - September 30,
unaudited) 2008 2009
---------------- ----------------
Voyage revenue $ 37,703 $ 29,493
Imputed revenue $ 2,593 $ 8,186
Voyage expenses $ (4,470) $ (1,334)
---------------- ----------------
Time charter equivalent revenues $ 35,826 $ 36,345
================ ================
Total voyage days for fleet 1,005 1,154
Time charter equivalent (TCE) rate $ 35,649 $ 31,495
Financial Statements
The following are OceanFreight Inc.'s Consolidated Statements of Income for
the
three-month periods ended September 30, 2008 and 2009:
(Dollars in thousands, except for Three Months Ended September 30,
share and per share data) 2008 2009
---------------- ----------------
Unaudited Unaudited
INCOME STATEMENT DATA
Voyage revenues $ 37,704 $ 29,494
Gain on forward freight agreements - 242
Imputed revenue 2,593 8,185
---------------- ----------------
Gross Revenue 40,297 37,921
Voyage expenses (4,470) (1,334)
Vessels operating expenses (6,286) (8,248)
Depreciation (10,485) (12,767)
Management fees (721) (1,348)
General and administrative expenses (2,063) (1,152)
Loss from sale of vessel - (19,819)
---------------- ----------------
Operating Income/(loss) 16,272 (6,747)
---------------- ----------------
Interest and finance costs (4,084) (4,715)
Interest income 370 95
Loss on derivative instruments (3,628) (1,984)
Other - 91
---------------- ----------------
Net Income/(loss) $ 8,930 $ (13,260)
================ ================
Basic and fully diluted earnings/(loss)
per share $ 0.61 $ (0.15)
Weighted average common shares
outstanding 14,659,201 90,394,493
The following are OceanFreight Inc.'s Consolidated Balance Sheets as at
December 31, 2008 and September 30, 2009:
(Expressed in thousands of U.S. Dollars -
except for share and per share data) 2008 2009
-------------- --------------
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 23,069 $ 36,369
Restricted Cash - 23,100
Receivables 2,073 3,984
Inventories 1,338 1,062
Prepayments and other 2,197 5,303
Vessel held for sale - 20,238
-------------- --------------
Total current assets 28,677 90,056
-------------- --------------
FIXED ASSETS, NET:
Advances for vessels acquisition - 24,500
Vessels, net of accumulated depreciation
and vessel impairment of $56,838 and
$70,742 respectively 587,189 493,675
Other, net of accumulated depreciation of
$31 and $78, respectively 159 111
-------------- --------------
Total fixed assets, net 587,348 518,286
-------------- --------------
OTHER NON CURRENT ASSETS:
Deferred financing fees, net of
accumulated amortization of $1,634 and
$2,209, respectively 2,081 1,531
Restricted cash 6,511 6,011
Other 953 9,193
-------------- --------------
Total assets $ 625,570 $ 625,077
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,767 $ 2,853
Due to related parties 111 750
Accrued liabilities 9,731 12,720
Unearned revenue 1,822 1,356
Derivative liability 6,771 7,749
Sellers' credit 25,000 -
Current portion of imputed deferred
revenue 10,290 2,743
Current portion of long-term debt 60,889 45,576
-------------- --------------
Total current liabilities 116,381 73,747
-------------- --------------
NON-CURRENT LIABILITIES:
Derivative liability, net of current
portion 9,376 4,572
Imputed deferred revenue, net of current
portion 5,741 -
Long-term debt, net of current portion 247,111 233,847
-------------- --------------
Total non-current liabilities 262,228 238,419
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred shares, par value $0.01;
5,000,000 shares authorized, nil shares
issued and outstanding - -
Common Shares, par value $0.01;
95,000,000 shares and 1,000,000,000
shares authorized at December 31, 2008
and September 30, 2009 respectively,
18,544,493 and 90,394,493 shares issued
and outstanding at December 31, 2008 and
September 30, 2009, respectively. 185 904
Subordinated Shares, par value $0.01;
10,000,000 shares authorized, nil shares
issued and outstanding. - -
Additional paid-in capital 271,824 380,560
Accumulated deficit (25,048) (68,553)
-------------- --------------
Total stockholders' equity 246,961 312,911
-------------- --------------
Total liabilities and stockholders'
equity $ 625,570 $ 625,077
============== ==============
EBITDA Reconciliation
OceanFreight Inc. considers EBITDA to represent net income before interest,
taxes, depreciation and amortization and other non-cash items. 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 provided by operating activities to
EBITDA as adjusted for the effect of the loss from the sale of vessels:
(Dollars in thousands) Three Months Ended September 30,
2008 2009
-------------- --------------
Net cash provided by operating activities 24,866 781
Net (decrease)/increase in current assets,
excluding cash and cash equivalents (3,223) 9,976
Net increase in current liabilities,
excluding derivative liability, current
portion of long term debt and imputed
deferred revenue current portion 260 2,553
Net Interest expense 3,714 4,620
Amortization of deferred financing costs
included in interest expense (123) (185)
-------------- --------------
Adjusted EBITDA 25,494 17,745
============== ==============
Fleet List
The table below describes our fleet and current employment profile as of
November 10, 2009:
Current Gross Latest
Year Employ- Rate per Earliest Redel-
Built DWT Type ment Day Redelivery ivery
DRYBULK
Robusto 2006 173,949 Capesize TC $ 26,000 Sep-14 Jan-15
Partagas 2004 173,880 Capesize TC $ 27,500 Jul-12 Dec-12
Topeka 2000 74,710 Panamax TC $ 18,000 Jan-11 Mar-11
Helena 1999 73,744 Panamax TC $ 32,000 May-12 Jan-13
Pierre 1996 70,316 Panamax TC $ 23,000 Jun-10 Oct-10
Augusta 1996 69,053 Panamax TC $ 16,000 Nov-11 Mar-12
Austin 1995 75,229 Panamax TC $ 26,000 Apr-10 Aug-10
Trenton 1995 75,229 Panamax TC $ 26,000 Apr-10 Aug-10
TANKERS
Olinda 1996 149,085 Suezmax Pool - Blue Fin Tankers
Tigani 1991 95,951 Aframax TC $ 29,800 Sep-09 Nov-09
Tamara 1990 95,793 Aframax TC $ 27,000 Nov-10 Mar-11
Pink Sands 1993 93,723 Aframax TC $ 27,450 Oct-10 Jan-11
DRYBULK CARRIERS TO BE ACQUIRED
5 years from
Cohiba 2006 174,200 Capesize TC $ 26,250 delivery
4 years from
Montecristo 2005 180,263 Capesize TC $ 23,500 delivery
Conference Call and Webcast: Wednesday, November 11, 2009 at 08:30 A.M. EST
OceanFreight management team will host a conference call tomorrow, on
November 11, 2009, at 08:30 A.M. Eastern Standard Time (EST) to discuss the
Company's financial results for the Quarter ended September 30, 2009.
Conference Call details:
Participants should Dial-Into the call 10 minutes before the scheduled time
using the following numbers: 1 866 819 7111 (U.S. Toll Free Dial -In), 0800
953 0329 (U.K. Toll Free Dial -In) or +44 (0) 1452 542 301 (Standard
International Dial -In). Please quote "OceanFreight."
A telephonic replay of the conference call will be available until November
18, 2009 by dialing 1 866 247 4222 (U.S. Toll Free Dial-In), 0800 953 1533
(U.K. Toll Free Dial-In) or +44 (0) 1452 550 000 (Standard International
Dial-In). Access Code: 7445162#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the OceanFreight Inc. website (www.oceanfreightinc.com). Participants to
the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
About OceanFreight Inc.
OceanFreight Inc. is an owner and operator of both drybulk and tanker
vessels that operate worldwide. As of the date of this release,
OceanFreight owns a fleet of 12 vessels, comprised of 8 drybulk vessels (2
Capesize, 6 Panamaxes) and 4 crude carrier tankers (1 Suezmax, 3 Aframaxes)
with a combined deadweight tonnage of about 1.22 million tons.
The company has agreed to acquire two Capesize dry bulk vessels and upon
the delivery of these vessels to OceanFreight its fleet will consist of 14
vessels, comprised of 10 dry bulk carriers (4 Capesizes, 6 Panamaxes) and 4
tankers (1 Suezmax, 3 Aframaxes) with a combined deadweight tonnage of
approximately 1.6 million tons.
OceanFreight Inc.'s common stock is listed on the NASDAQ Global Market
where it trades under the symbol "OCNF." Visit our website at
www.oceanfreightinc.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 OceanFreight 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, OceanFreight
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 charter hire rates and vessel values, changes in
demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in OceanFreight 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
OceanFreight Inc. with the U.S. Securities and Exchange Commission.
Contact Information: Company Contact: Demetris Nenes Tel: +30-210-809-0514 E-mail: management@oceanfreightinc.com Investor Relations/Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel: +1-212-661-7566 E-mail: oceanfreight@capitallink.com