-- Net revenue for the fourth quarter of 2009 decreased by 21% to
$36.6 million from $46.6 million for the same period in 2008. The
Company operated 14 vessels on average during the fourth quarter of 2009
earning a Time Charter Equivalent ("TCE")(1) rate of $28,605 compared to
11.53 vessels and a TCE rate of $44,276 during the fourth quarter of
2008. The decrease in the TCE rate is a result mainly of lower period
time charter rates earned during the fourth quarter 2009 compared to the
same period in 2008.
-- Net income was $23.2 million, or earnings per share of $0.42, in the
fourth quarter of 2009, an increase of 95% from net income of
$11.9 million, or earnings per share of $0.22, in the fourth quarter of
2008. The increase in net income of $11.3 million reflects mainly:
(i) net revenue of $36.6 million compared to $46.6 million,
(ii) interest expense of $1.5 million compared to $4.0 million and
(iii) loss on derivatives of $1.2 million compared to $21.0 million, for
the fourth quarters ended December 31, 2009 and 2008, respectively.
-- EBITDA(2) was $28.4 million in the fourth quarter of 2009, an increase
of 56% from $18.2 million in the fourth quarter of 2008, mainly due to
higher net income.
-- A dividend of $0.15 per share was declared for the fourth quarter
of 2009. See "Dividend Declaration" below.
Summary of Full Year 2009 Results
-- Net revenue for the year ended December 31, 2009 decreased by 18% to $164.6 million from $200.8 million for the year ended December 31, 2008. The Company operated 13.20 vessels on average during the year ended December 31, 2009, earning a TCE rate of $34,208, compared to an average of 11.13 vessels and a TCE rate of $49,626 during the year ended December 31, 2008. The decrease in the TCE rate is mainly a result of lower period time charter rates earned during the year ended December 31, 2009, including lower period time charter rates associated with vessels subject to early redelivery which entered into new charter contracts with lower rates compared to those previously contracted. -- Net income was $165.4 million, or earnings per share of $3.03, for the year ended December 31, 2009 compared to $119.2 million, or earnings per share of $2.19, for the year ended December 31, 2008. The increase in net income of $46.2 million reflects mainly: (i) net revenue of $164.6 million compared to $200.8 million, (ii) early redelivery income of $75.0 million compared to early redelivery cost of $0.6 million, (iii) loss on asset cancellations of $20.7 million compared to none, (iv) loss on derivatives of $4.4 million compared to $19.5 million, (v) foreign currency gain of $0.8 million compared to foreign currency loss of $9.5 million and (vi) interest expense of $10.3 million compared to $16.4 million, for the years ended December 31, 2009 and 2008, respectively. -- EBITDA was $187.6 million for the year ended December 31, 2009, an increase of 29% from $144.9 million for the year ended December 31, 2008.Dividend Declaration The Company declared a cash dividend on its common stock of $0.15 per share payable on or about February 26, 2009 to shareholders of record at the close of trading of the Company's common stock on the New York Stock Exchange ("NYSE") on February 19, 2009. The Company had 54,514,643 shares of common stock outstanding as of today. The Board of Directors of the Company is continuing a policy of paying out a portion of the Company's free cash flow at a level it considers prudent in light of the current economic and financial environment. The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) our earnings, financial condition and cash requirements and availability, (ii) our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy, (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends, (iv) restrictive covenants in our existing and future debt instruments and (v) global financial conditions. We can give no assurance that dividends will be paid in the future. Fleet and Employment Profile
-- The Company's operational fleet comprised of 13 drybulk vessels with an average age of 3.64 years as of January 31, 2010. The Company has also contracted for six additional drybulk newbuild vessels with deliveries scheduled through 2012. -- As of January 31, 2010, the contracted employment of the Company's fleet under period time charters was as follows: 86% of fleet ownership days for the remaining days of 2010, 59% for 2011 and 51% for 2012. This includes all vessels which will be delivered to us through 2012. -- On January 7, 2010, the Company sold and delivered to third party buyers its oldest Panamax-class drybulk vessel, Efrossini, built in 2003, and received sale proceeds of $33.0 million, all of which was applied to retire the $34.5 million debt outstanding associated with the vessel.Management Commentary Polys Hajioannou, Chairman of the Board of Directors and Chief Executive Officer of the Company, said: "In what we believe was one of the worst years in the global economy, we managed to considerably increase the annual earnings per share to $3.03, strengthen our balance sheet and maintain our dividend of $0.15 per share for the quarter ended December 31, 2009. In parallel we continue to maintain a high charter coverage ratio and continue to implement our strategy of selective fleet expansion." Conference Call On Wednesday, February 10, 2010 at 10:00 A.M. EST, the Company's management team will host a conference call to discuss the financial results. 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), 0 (800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Safe Bulkers" to the operator. A telephonic replay of the conference call will be available until February 19, 2010 by dialling 1 (866) 247-4222 (US Toll Free Dial In), 0 800 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 1859591# Slides and Audio Webcast There will also be a live, and then archived, webcast of the conference call, available through the Company's website (www.safebulkers.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. Management Discussion of Fourth Quarter 2009 Results Net income increased by 95% to $23.2 million for the fourth quarter of 2009 from $11.9 million for the fourth quarter of 2008. This increase is attributable to the following factors: Net revenues: Net revenues were $36.6 million for the fourth quarter of 2009, a 21% decrease compared to $46.6 million for the fourth quarter of 2008. The decrease in revenues resulted mainly from lower charter rates earned during the fourth quarter of 2009. Vessel operating expenses: Vessel operating expenses increased by 4% to $5.2 million for the fourth quarter of 2009, compared to $5.0 million for the same period in 2008, mainly due to an increase in ownership days. Daily vessel operating expenses decreased by 14% to $4,053 for the fourth quarter 2009, compared to $4,722 for the fourth quarter of 2008. The decrease in daily operating expenses is mainly attributed to a decrease in repairs and maintenance, including drydocking costs, general stores and insurance costs. Interest expense: Interest expense decreased to $1.5 million in the fourth quarter of 2009 from $4.0 million for the same period in 2008, notwithstanding the increase in weighted average indebtedness. The decrease in interest expense is attributable to a lower weighted average annual interest rate of 1.263% p.a. in the fourth quarter of 2009, as compared to 3.749% p.a. in the fourth quarter of 2008. The weighted average of loans outstanding during the fourth quarter of 2009 amounted to $472.1 million, compared to $450.2 million during the fourth quarter of 2008. Loss on derivatives: Loss on derivatives decreased to $1.2 million for the fourth quarter of 2009, compared to a loss of $21.0 million for the same period in 2008, as a result of the mark-to-market valuation of the Company's interest rate swap transactions, which were transacted to manage the risk and interest rate exposure of our loan and credit facilities. At the end of 2009, the aggregate notional amount of interest rate swap transactions outstanding was $452.5 million, compared to $445.2 million at the end of 2008. These swaps economically hedged the interest rate exposure of approximately 96% of the Company's aggregate loans outstanding as of December 31, 2009. The valuation of these interest rate swap transactions at the end of each quarter is affected by the prevailing interest rates at that time. Cash, time deposits, restricted cash and investments: As of December 31, 2009, we had $82.7 million in cash, short-term time deposits and short-term restricted cash, $4.8 million in long-term restricted cash and $50.0 million in a long-term floating rate note. (1) Refer to the definition of "TCE" in Note 6 of the Fleet Data Table. (2) EBITDA represents net income plus net interest expense, income tax, depreciation and amortization. See "EBITDA Reconciliation."
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE PERIODS ENDED DECEMBER 31, 2008 AND DECEMBER 31, 2009
Three Month Period Twelve Month Period
Ended Ended
December 31, December 31,
---------------------- ----------------------
(In thousands of U.S.
Dollars except for share
and per share data) 2008 2009 2008 2009
---------- ---------- ---------- ----------
REVENUES:
Revenues 48,124 37,435 208,411 168,400
Commissions (1,486) (867) (7,639) (3,794)
Net revenues 46,638 36,568 200,772 164,606
EXPENSES:
Voyage expenses (104) (97) (273) (577)
Vessel operating expenses (5,010) (5,220) (17,615) (19,628)
Depreciation (2,830) (3,941) (10,614) (13,893)
General and administrative
expenses (1,703) (1,544) (8,045) (7,046)
Early redelivery
(cost)/income - - (565) 74,951
Loss on asset
cancellations - - - (20,699)
Operating income 36,991 25,766 163,660 177,714
OTHER (EXPENSE) / INCOME:
Interest expense (4,010) (1,523) (16,392) (10,342)
Other finance costs (145) (51) (408) (442)
Interest income 536 298 1,492 2,164
Loss on derivatives (20,965) (1,241) (19,509) (4,416)
Foreign currency
(loss)/gain (498) (65) (9,501) 838
Amortization and write-off
of deferred finance charges (22) (20) (131) (106)
Net income 11,887 23,164 119,211 165,410
Earnings per share 0.22 0.42 2.19 3.03
Weighted average number
of shares 54,501,334 54,513,787 54,500,889 54,510,587
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF DECEMBER 31, 2008 AND DECEMBER 31, 2009
December 31, December 31,
(In thousands of U.S. Dollars) 2008 2009
------------ -------------
ASSETS
Cash, time deposits, and restricted cash 81,605 82,714
Asset held for sale -- 16,969
Other current assets 6,481 5,965
Total fixed assets 387,296 467,513
Restricted cash non-current 4,750 4,763
Long-term investment -- 50,000
Other non-current assets 2,150 800
Total assets 482,282 628,724
LIABILITIES AND EQUITY
Current portion of long-term debt & liability
directly associated with asset held for sale 54,807 50,242
Other current liabilities 16,056 15,309
Long-term debt, net of current portion 413,483 420,994
Other non-current liabilities 33,481 44,960
Shareholders (deficit)/equity (35,545) 97,219
Total liabilities and equity 482,282 628,724
Fleet Data
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2009 2008 2009
-------- -------- -------- --------
Number of vessels at period's end 12 14 12 14
Average age of fleet (in years) at
period's end 3.33 3.80 3.33 3.80
Ownership days (1) 1,061 1,288 4,075 4,817
Available days (2) 1,051 1,275 4,040 4,795
Operating days (3) 1,049 1,273 4,025 4,778
Fleet utilization (4) 98.8% 98.8% 98.8% 99.2%
Average number of vessels in the
period (5) 11.53 14.00 11.13 13.20
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 44,276 $ 28,605 $ 49,626 $ 34,208
Daily vessel operating expenses (7) $ 4,722 $ 4,053 $ 4,323 $ 4,075
(1) Ownership days represent the aggregate number of days in a period
during which each vessel in our fleet has been owned by us.
(2) Available days represent the total number of days in a period during
which each vessel in our fleet was in our possession net of off-hire days
associated with scheduled maintenance, which includes major repairs,
drydockings, vessel upgrades or special or intermediate surveys.
(3) Operating days represent the number of our available days in a period
less the aggregate number of days that our vessels are off-hire due to any
reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of our operating
days during a period by the number of our ownership days during that
period.
(5) Average number of vessels in the period is calculated by dividing
ownership days in the period by the number of days in the period.
(6) Time charter equivalent rates, or TCE rates, represent our charter
revenues less commissions and voyage expenses during a period divided by
the number of our available days during the period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance, statutory and classification expense, drydocking, intermediate
and special surveys and other miscellaneous items. Daily vessel operating
expenses are calculated by dividing vessel operating expenses by ownership
days for the relevant period.
EBITDA RECONCILIATION
(In thousands of U.S. Dollars)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2009 2008 2009
Net Income 11,887 23,164 119,211 165,410
Plus Net Interest Expense 3,474 1,225 14,900 8,178
Plus Depreciation 2,830 3,941 10,614 13,893
Plus Amortization 22 20 131 106
EBITDA 18,213 28,350 144,856 187,587
EBITDA represents net income before interest, income tax expense, depreciation and amortization. EBITDA is not a recognized measurement under US GAAP. EBITDA assists the Company's management and investors by increasing the comparability of the Company's fundamental performance from period to period and against the fundamental performance of other companies in the Company's industry that provide EBITDA information. The Company believes that EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in the Company's industry because the calculation of EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the Company's results as reported under US GAAP. EBITDA should not be considered a substitute for net income and other operations data prepared in accordance with US GAAP or as a measure of profitability. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
Existing Fleet Employment Profile as of January 31, 2010
Set out below is a table showing our existing vessels and their
contracted employment.
Charter
Year Rate (a)
Vessel Name DWT Built USD/day Charter Duration (b)
----------- ------ ------ -------- -------------------------
18,000 Jun 2009 - Aug 2010
MV Maria 76,000 2003 17,750 Sep 2010 - Apr 2011
------ ------ -------- -------------------------
MV Vassos 76,000 2004 29,000 Nov 2008 - Oct 2013
------ ------ -------- -------------------------
MV Katerina 76,000 2004 15,500 Jun 2009 - May 2011
------ ------ -------- -------------------------
15,500 Jan 2009 - Feb 2010
MV Maritsa 76,000 2005 28,000(c) Mar 2010 - Mar 2015
------ ------ -------- -------------------------
MV Pedhoulas Merchant 82,300 2006 43,120(d) Jan 2009 - Mar 2010
------ ------ -------- -------------------------
MV Pedhoulas Trader 82,300 2006 41,500(e) Aug 2008 - Jul 2013
------ ------ -------- -------------------------
MV Pedhoulas Leader 82,300 2007 18,500 Jul 2009 - Jun 2011
------ ------ -------- -------------------------
32,000 Jan 2010 - Mar 2010
MV Stalo 87,000 2006 34,160 Mar 2010 - Feb 2015
------ ------ -------- -------------------------
MV Marina 87,000 2006 41,500(f) Dec 2008 - Dec 2013
------ ------ -------- -------------------------
MV Sophia 87,000 2007 34,720 Oct 2008 - Sep 2013
------ ------ -------- -------------------------
MV Eleni 87,000 2008 41,640(g) Nov 2008 - Mar 2015
------ ------ -------- -------------------------
MV Martine 87,000 2009 40,500 Feb 2009 - Feb 2014
------ ------ -------- -------------------------
MV Andreas K 92,000 2009 20,500 Nov-2009 - Nov 2010
------ ------ -------- -------------------------
(a) Either gross charter rate or average gross charter rate for charter
parties with variable rates among periods or for consecutive charter
parties with the same charterer under similar basic terms.
(b) Delivery/redelivery dates reflect the Company's best estimates, but
actual delivery/redelivery dates can differ pursuant to the terms of the
relevant charter contract.
(c) Reflects average rate among various options available to the charterer.
(d) In December 2009, we agreed with the charterer of the vessel Pedhoulas
Merchant to terminate the existing charter during February or March 2010.
In exchange for the early redelivery of this vessel, the charterer agreed
to pay cash compensation ranging from $5.1 million to $6.5 million, net of
commissions, depending on the vessel's actual redelivery date.
(e) Five-year variable rate contract, first year at $69,000, second year at
$56,500, third year at $42,000, fourth and fifth years at $20,000.
(f) Five-year variable rate contract, $61,500 from Dec. 2008 to Mar. 2009,
$57,500 from Apr. 2009 to Dec. 2009, $52,500 from Dec. 2009 to Dec. 2010,
$42,500 from Dec. 2010 to Dec. 2011, $32,500 from Dec. 2011 to Oct. 2012,
$31,500 from Oct. 2012 to Dec. 2012 and $21,500 from Dec. 2012 to Dec.
2013.
(g) Three contracts in direct continuation, the first from Nov. 2008 to
Oct. 2009 at $70,000, the second from Oct. 2009 to Mar. 2010 at $66,400 and
the third from Apr. 2010 to Apr. 2015 at $34,160.
The contracted charter coverage including newbuilds, based on the Company's
best estimates as of January 31, 2010 is:
2010.....................86%
2011.....................59%
2012.....................51%
About Safe Bulkers, Inc.
The Company's subsidiaries provide marine drybulk transportation services,
transporting bulk cargoes, particularly coal, grain and iron ore, along
worldwide shipping routes for some of the world's largest users of such
services. The Company's common stock is listed on the NYSE where it trades
under the symbol "SB." The Company's subsidiaries currently own 13 drybulk
vessels, all built post-2003, and have contracted to acquire six additional
drybulk newbuild vessels to be delivered at various times through 2012.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Exchange Act of 1933, as amended, and in
Section 21E of the Securities Act of 1934, as amended) concerning future
events, the Company's growth strategy and measures to implement such
strategy, including expected vessel acquisitions and entering into further
time charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates" and variations of such words and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to, changes in the demand
for drybulk vessels, competitive factors in the market in which the Company
operates, risks associated with operations outside the United States and
other factors listed from time to time in the Company's filings with the
Securities and Exchange Commission. The Company expressly disclaims any
obligations or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any change in
the Company's expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
Contact Information: For further information please contact: Company Contact: Dr. Loukas Barmparis President Safe Bulkers, Inc. Athens, Greece Tel.: +30 (210) 899-4980 Fax: +30 (210) 895-4159 E-Mail: directors@safebulkers.com Investor Relations / Media Contact: Ramnique Grewal Vice President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212) 661-7566 Fax: (212) 661-7526 E-Mail: safebulkers@capitallink.com