SOURCE: OceanFreight Inc.

OceanFreight Inc.

November 10, 2009 16:05 ET

OceanFreight Inc. Reports Financial Results for the Third Quarter 2009

ATHENS, GREECE--(Marketwire - November 10, 2009) - OceanFreight Inc. (NASDAQ: OCNF), a global provider of marine transportation services, today announced its financial results for the quarter ended September 30, 2009.

Financial Highlights

For the three-month period ended September 30, 2009, the Company reported Net Loss of $13.3 million or basic and diluted loss per share of $0.15. Included in these results are:

--  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,
--  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
--  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
--  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.


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.


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


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)
  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
                                            --------------  --------------


  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
                                            --------------  --------------


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


  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
                                            --------------  --------------

  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
                                            --------------  --------------


  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
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


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

                                                           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 ( 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

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.

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