SOURCE: OceanFreight Inc.

October 24, 2007 16:12 ET

OceanFreight Inc. Reports Third Quarter 2007 Results and Declares Target Dividend of 51 1/4 Cents for First Full Quarter of Operations

ATHENS, GREECE--(Marketwire - October 24, 2007) - OceanFreight Inc. (NASDAQ: OCNF), a NASDAQ listed bulk shipping company, today reported earnings of $1 million or $0.11 per common and subordinated share for its first full quarter of operations ended September 30, 2007. OceanFreight's Board of Directors also declared a dividend of 51 1/4 cents per share for the third quarter, the target dividend established at the time of its Initial Public Offering earlier this year. The dividend is payable on or about November 15, to shareholders of record as of November 5, 2007.

Commenting on the results of the third quarter, CEO Bob Cowen said, "During our first full quarter of operations, OceanFreight has already begun to execute on its growth strategy by announcing the acquisition of two additional Panamax bulkers. The Richmond will be employed initially on a two year time charter beginning next month at $28,000 per day net of commissions, and the Augusta on a one year time charter at $57,500 per day net of commissions, beginning in January of 2008; both charters are highly accretive to cash flow. We also completed taking delivery of our initial fleet of seven vessels, all of which are operating under long term charters. With the addition of the two Panamaxes, our fleet will comprise almost 750,000 deadweight tons, an increase of about 25% since the IPO.

"Equally important to our growth strategy, we closed on an expanded $325 million credit facility with Nordea Bank in October. This facility, which includes a revolving credit feature, provides us with additional capital and financial flexibility to support OceanFreight's further growth.

"I am also pleased to announce that Anthony Kandylidis of Basset, our major shareholder, has joined OceanFreight's Board of Directors."

Third Quarter 2007 Key Financial and Operating Results

OceanFreight Inc. commenced commercial operations during the second quarter of 2007 with the acquisition of its first vessel, therefore inclusion of or comparison to prior periods is not meaningful.

For the quarter ended September 30, 2007, OceanFreight Inc. reported total net voyage revenues of $13.0 million and net income of $1.0 million, or $0.11 per common and subordinated share, which includes $2.1 million of imputed deferred revenue (see description below). EBITDA for the period was approximately $6.0 million (see EBITDA reconciliation to net income below.) The Company took delivery of the final three vessels of its initial fleet of seven vessels during the quarter which were immediately deployed on long term time charters. The Company also deployed the Juneau on its long term time charter as the vessel concluded its dry dock. The Fleet's average time charter equivalent rate was approximately $25,399 per day.

     OceanFreight Inc.’s Summary Financial Results and Key Indicators

                                                             Three months
INCOME STATEMENT DATA                                           ended
(dollars in thousands, except earnings per share data)       September 30,

  Voyage revenue                                                    13,742
  Imputed deferred revenue (1)                                       2,088
       Total revenue                                                15,830

  Voyage expenses                                                     (763)
  Direct vessel operating expenses *                                (4,302)
  Total general and administrative expenses (cash and
   non-cash) **                                                     (1,125)
  Survey and drydocking costs                                       (1,685)
  Depreciation                                                      (5,647)

       Operating Income                                              2,308

  Interest income                                                      573
  Interest expense and finance costs                                (1,894)
  Other income, net                                                    (13)

       Net Income                                                      974

       Common earnings per share                           $          0.14
       Common ad Subordinated earnings per share           $          0.11

       Weighted average Common shares outstanding
        (thousands) (2)                                              6,992
       Weighted average Common and Subordinated shares
        outstanding (thousands) (2)                                  9,028

       * Includes costs incurred in connection with
         drydocking which for accounting purposes
         are classified as vessel operating expenses                   995
      ** Includes non-cash amortization of compensation
         related to restricted management stock                        177

(1) Imputed deferred revenue (IDR) - arises from the difference between
    the net present value of the time charter which is incorporated in
    the purchase contract of a vessel and the net present value of a
    market rate charter for the same vessel and same charter period
    determined at the date of delivery.  We amortize this difference to
    revenue on a straight line basis during the remaining life of the
    charter.  The table below shows the vessel, charter dates and
    duration, total IDR and daily depreciation of IDR for the relevant

            First Full Day  Last Full Day of  Charter
Vessel       of Charter          Charter        Days
            ============== ================== =======
Austin        June 7, 2007      April 4, 2010   1,034
            -------------- ------------------ -------
Pierre        June 7, 2007       June 3, 2010   1,094
            -------------- ------------------ -------
Topeka      August 3, 2007 September 29, 2010   1,155
            -------------- ------------------ -------
Trenton       June 5, 2007      April 2, 2010   1,034
            ============== ================== =======

              Imputed        Daily    Amortization
              Deferred   Amortization      of       Cumulative  Unamortized
Vessel       Revenue IDR    of IDR    for Quarter  Amortization   Balance
            ============ ============ ============ ============ ===========
Austin      $  3,700,000 $      3,578 $    329,207 $    415,087 $ 3,284,913
            ------------ ------------ ------------ ------------ -----------
Pierre      $  6,250,000 $      5,713 $    525,594 $    662,706 $ 5,587,294
            ------------ ------------ ------------ ------------ -----------

Topeka      $ 17,696,087 $     15,321 $    903,956 $    903,956 $16,792,131
            ------------ ------------ ------------ ------------ -----------
Trenton     $  3,700,000 $      3,578 $    329,207 $    422,244 $ 3,277,756
            ============ ============ ============ ============ ===========

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

TOTAL       $ 31,346,087 $     28,191 $  2,087,964 $  2,403,992 $28,942,095
            ============ ============ ============ ============ ===========

(2) Weighted average shares - for nine month period calculated from beginning of the year assuming issuance of Common stock, including restricted stock, on April 30, 2007.

BALANCE SHEET DATA, at end of period As of (dollars in thousands) September 30, 2007 ==================

Cash 17,668 Current assets including cash 19,245 Total Assets 367,183

Current portion of imputed deferred revenue 10,318 Current portion of long-term debt - Total current liabilities 16,014

Total long term imputed deferred revenue, including current portion 28,942 Total long-term debt, including current option 118,000

Stockholders' equity 214,545

Common shares outstanding at end of period 12,394 Common and Subordinated shares outstanding at end of period 14,457 ==================

================== STATEMENT OF CASH FLOWS DATA Three months ended (dollars in thousands) September 30, 2007 ==================

Net cash provided by operating activities 8,296 Net cash used in investing activities (91,716) Net cash provided by financing activities 30,890 ================== Cash Flow (52,530) ==================

================== OTHER FINANCIAL DATA Three months ended (dollars in thousands) September 30, 2007 ==================

EBITDA (1) 6,044 Weighted average long-term debt (2) 106


Total number of vessels at end of period 7 Average number of vessels for period (3) 6.3 Total ownership days for fleet (4) 578 Total voyage days for fleet (5) 511 Fleet utilization (6) 88.4%


Time Charter equivalent, TCE (7) 25,399 Direct vessel operating expenses per vessel (8) 5,721 General and administrative, cash cost (9) 1,640 Total vessel operating expenses (10) 7,362 EBITDA (11) 10,457 ==================

Net voyage revenue reconciliation Total revenue 15,830 - Imputed deferred revenue (2,088) - Voyage Expenses (763) ================== Net voyage revenue 12,979

EBITDA reconciliation Net Income 974 + Net interest expense and other income 1,334 + Depreciation and amortization, includes amortization of compensation of restricted management stock 5,824 - Imputed deferred revenue (2,088) ================== EBITDA 6,044

(1) EBITDA - represents net income plus net interest expense and other income, plus depreciation and amortization minus imputed deferred revenue. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Management of the Company uses EBITDA as a performance measure in its internal financial statements and it is presented for review at our board meetings. EBITDA is not an item recognized by GAAP. The definition of EBITDA used here may not be comparable to that used by other companies. (2) Weighted average long term debt - is the measurement of debt as of the close of each business day for the period divided by the number of calendar days in that period. (3) 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 whole days each vessel was a part of our fleet during the period divided by the number of calendar days in that period. (4) Ownership days - are the total whole calendar days that a vessel was in our possession for the relevant period including off hire days. (5) Voyage days - are the total whole days a vessel was in our possession for the relevant period net of off hire days. (6) Fleet utilization - is the percentage of time that our vessels were available for revenue generating operations and is determined by dividing voyage days by ownership days for the relevant period. (7) Time charter equivalent, or TCE - is a measure of the average daily revenue performance of a vessel on a per voyage basis. We believe that our method of calculating TCE is consistent with industry standards and is determined by dividing net voyage revenue (see reconciliation of net voyage revenue above) by voyage days (8) Direct vessel operating expenses - is calculated by dividing vessel operating expenses which includes crew costs, provisions, deck and engine stores, lubricating oils, insurance, maintenance and repairs and technical manager administrative costs by calendar days for the relevant period. For this purpose we have excluded expenses incurred during the course of a drydocking which for accounting purposes are not classified as survey costs. (9) General and administrative costs - is calculated by dividing general and administrative costs net of compensation of non-cash amortization of restricted management stock by the calendar days for the relevant period. (10)Total vessel operating expenses - is the sum of direct vessel operating expenses and general and administrative costs described above in notes 8 and 9.

Fleet Profile and Employment

As of September 30, 2007, OceanFreight's fleet consisted of 7 vessels: 6 Panamax and 1 Capesize bulker. The Company has also entered into MOAs to acquire two additional Panamax dry bulk vessels: the Richmond and the Augusta with delivery expected in November 2007 and January 2008, respectively. The Company's full fleet of nine vessels will have an average age of 11.7 years as of September 30, 2007 calculated on a dwt weighted average and a total carrying capacity of approximately 736,000 dwt.

                                 Vessel                 Year
Vessel                            Type   Acquired(1)   Built   DWT    LWT
                                ======== ===========  ====== ======= ======
                                          January 1,
Augusta                          Panamax    2008 (2)    1996  69,053  9,808
                                -------- -----------  ------ ------- ------
                                            June 7,
Austin                           Panamax     2007       1995  75,229 11,620
                                -------- -----------  ------ ------- ------
                                           July 30,
Helena                           Panamax     2007       1999  73,744  9,502
                                -------- -----------  ------ ------- ------
                                            July 5,
Lansing                          Panamax     2007       1996  73,040 10,788
                                -------- -----------  ------ ------- ------
                                            June 7,
Pierre                           Panamax     2007       1996  70,316  9,106
                                -------- -----------  ------ ------- ------
                                          December 1,
Richmond                         Panamax     2007 (2)   1995  75,265 11,585
                                -------- -----------  ------ ------- ------
                                          August 3,
Topeka                           Panamax     2007       2000  74,710 12,627
                                -------- -----------  ------ ------- ------
                                            June 5,
Trenton                          Panamax     2007       1995  75,229 11,620
                                -------- -----------  ------ ------- ------
                                           June 30,
Juneau                          Capesize     2007       1990 149,495 18,468
                                ======== ===========  ====== ======= ======

(1)  First whole day of ownership
(2)  Projected

All of the Company's vessels are currently operating or have been contracted to operate upon delivery under long term period charters with established charterers.

For the remainder of 2007, 100% of the Company's net ownership days are covered by time charters, with approximately 95% for 2008 and 68% for 2009.

            Vessel                                            Time Charter
Vessel       Type    Begin Charter (1)   Expiration Date (2)    Rate (3)
           ======== ===================  ===================  =============
Augusta(4)  Panamax  January 1, 2008 (5)   December 31, 2008         57,500
Austin      Panamax     June 7, 2007 (6)    April 4, 2010 (6)        24,700
Helena      Panamax    July 30, 2007        August 31, 2008          28,125
Lansing     Panamax     July 5, 2007          May 30, 2009           23,100
Pierre      Panamax     June 7, 2007 (6)     June 3, 2010 (6)        22,425
Richmond(4) Panamax December 1, 2007 (5)   November 30, 2009         28,000
Topeka      Panamax   August 3, 2007 (6) September 29, 2010 (6)      21,656
Trenton     Panamax     June 5, 2007 (6)    April 2, 2010 (6)        24,700
Juneau     Capesize  September 5, 2007      October 4, 2009          46,800
           ======== ===================  ===================  =============

(1)  First whole day of charter
(2)  Approximate expiration of charter
(3)  Net of commissions and imputed deferred revenue
(4)  Not yet acquired
(5)  Projected
(6)  Date used for calculation of imputed deferred revenue


The Company's policy is to pay a quarterly dividend of 51 1/4 cents per share to holders of its common shares subject to declaration at the discretion of the Board of Directors.

The Board of Directors of OceanFreight, has declared a dividend of 51 1/4 cents per share, payable on or about November 15, 2007, to all shareholders of record as of November 5, 2007.

Conference Call details:

A conference call has been scheduled with management for 8 am New York time on October 25, 2007, to discuss the Company's results for the third quarter. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "OceanFreight."

In case of any problems with the above numbers, please dial 1 866 223 0615 (US Toll Free Dial In), 0800 694 1503 (UK Toll Free Dial In) or +44 (0)1452 586 513 (Standard International Dial In). Quote "OceanFreight."

A telephonic replay of the conference call will be available until November 1, 2007 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK 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 live, and then archived, webcast of the conference call, available through OceanFreight's website ( Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About OceanFreight Inc.

OceanFreight Inc. was incorporated in 2006 to acquire high quality second-hand tonnage and deploy them on medium to long term charters. The Company began operations with the delivery of its first vessel in June 2007 and currently owns and operates a fleet of 7 vessels, consisting of 1 Capesize and 6 Panamax bulk carriers with a total carrying capacity of approximately 592,000 dwt. The Company has also entered into agreements to acquire 2 additional Panamax bulk carriers with delivery expected in November 2007 and January 2008. Once these acquisitions are completed, OceanFreight's fleet of 9 vessels will have a dwt weighted average age of approximately 11.7 years as measured on September 30, 2007, and a total carrying capacity of approximately 736,000 dwt.

The Company's shares are listed on the NASDAQ Global Select Market and trades under the symbol "OCNF."

Visit our website at

                            OceanFreight Inc.
                Consolidated Unaudited Statement of Income
            For the three-month period ended September 30, 2007
 (Expressed in thousands of U.S. Dollars - except for share and per share

  Voyage revenue                                                    13,742
  Imputed deferred revenue                                           2,088

  Voyage expenses                                                      763
  Vessels' operating expenses                                        4,302
  General and administrative expenses                                1,125
  Survey and dry-docking costs                                       1,685
  Depreciation                                                       5,647
  Operating income                                                   2,308

  Interest income                                                      573
  Interest and finance costs                                        (1,894)
  Other, net                                                           (13)
  Total other income (expenses), net                                (1,334)

NET INCOME                                                             974

Earnings per common share, basic                                      0.14
Earnings per common share, diluted                                    0.14
Earnings per subordinated share, basic                                   -
Earnings per subordinated share, diluted                                 -
Weighted number of common shares, basic                          6,991,532
Weighted average number of common shares, diluted                6,991,532
Weighted average number of subordinated shares, basic            2,035,628
Weighted average number of subordinated shares, diluted          2,035,628

                            OceanFreight Inc.
                        Consolidated Balance Sheets
                      September 30, 2007 (Unaudited)
                (Expressed in thousands of U.S. Dollars)

  Cash and cash equivalents                                         17,668
  Receivables                                                           30
  Inventories                                                          522
  Prepayments and other                                              1,025
       Total current assets                                         19,245

  Advances for vessels acquisitions                                 10,860
  Vessels, net                                                     335,887
  Other, net                                                            11
       Total fixed assets, net                                     346,758

  Deferred financing fees, net                                       1,156
  Other                                                                 24

  TOTAL ASSETS                                                     367,183


  Accounts payable                                                   2,777
  Due to related parties                                                32
  Accrued liabilities                                                1,990
  Unearned revenue                                                     897
  Current portion of imputed deferred revenue                       10,318
  Current portion of long-term debt                                      -
       Total current liabilities                                    16,014

  Long term imputed deferred revenue, net of current portion        18,624
  Long term debt, net of current portion                           118,000

       TOTAL LIABILITIES                                           152,638

  Preferred shares, par value $0.01; 5,000,000 shares
  authorized, none issued                                                -

  Common Shares, par value $0.01; 95,000,000 shares authorized,
   nil and 12,394,079 shares issued and outstanding at
   December 31, 2006 and September 30, 2007 respectively               124

  Subordinated Shares, par value $0.01; 10,000,000 shares
   authorized, 2,000,000 and 2,063,158 shares issued and
   outstanding at December 31, 2006 and September 30, 2007,
   respectively                                                         21
  Additional paid-in capital                                       218,036
  Accumulated deficit                                               (3,636)
  TOTAL STOCKHOLDERS' EQUITY                                       214,545

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       367,183

                            OceanFreight Inc.
            Consolidated Statements of Cash Flows (unaudited)
            For the three month period ended September 30, 2007
                 (Expressed in thousands of U.S. Dollars)

Cash Flows from Operating Activities:

  Net income/ (loss)                                                   974
  Adjustments to reconcile Net Income to net cash provided
   Operating Activities

       Depreciation                                                  5,647
       Amortization of financing costs                                  47
       Amortization of imputed deferred revenue                     (2,088)
       Amortization of stock based compensation                        177

  Changes in operating assets and liabilities:
       Receivables                                                     323
       Inventories                                                     296
       Prepayments and other                                          (674)
       Accounts payable                                              1,590
       Due to related parties                                          (31)
       Accrued liabilities                                           1,562
       Unearned revenue                                                473
       Net Cash provided by Operating Activities                     8,296

Cash Flows from Investing Activities:
  Additions to vessel cost                                         (91,716)
       Net cash used in Investing Activities                       (91,716)

Cash Flows from Financing Activities:
  Proceeds from long term debt                                      36,725
  Cash dividends                                                    (5,638)
  Payments of financing costs                                         (197)
       Net cash provided by Financing Activities                    30,890

Net increase in cash and cash equivalents                          (52,530)

Cash and cash equivalents at beginning of period                    70,198

Cash and cash equivalents at end of period                          17,668

Forward-Looking Statements

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 rates and vessel values, failure of a seller to deliver one or more vessels to us or delay in taking delivery of one or more vessels, default by one or more charterers of our vessels, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydocking, changes in OceanFreight Inc.'s operating expenses, length and number of off-hire periods and dependence on third-party managers, dry-docking and insurance costs, changes in governmental rules and regulations 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, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further discussed in documents filed by OceanFreight Inc. with the U.S. Securities and Exchange Commission.

Contact Information

  • Company Contact:
    James Christodoulou
    Chief Financial Officer
    Tel. (212) 488-5052

    Financial Media:
    Capital Link - New York