Fleet Profile (As of November 23, 2009)
Year
Vessel Name Type DWT Built
----------- --------- --------- ---------
Star Alpha (1) Capesize 175,075 1992
Star Beta Capesize 174,691 1993
Star Sigma Capesize 184,403 1991
Star Ypsilon Capesize 150,940 1991
Star Gamma Supramax 53,098 2002
Star Delta Supramax 52,434 2000
Star Epsilon Supramax 52,402 2001
Star Zeta Supramax 52,994 2003
Star Theta Supramax 52,425 2003
Star Kappa Supramax 52,055 2001
Star Omicron Supramax 53,489 2005
Star Cosmo Supramax 52,247 2005
Grand Total 12 1,106,253
(1) The Company has agreed to sell the Star Alpha to a third party for a
contracted sale price of $19.85 million. The Company expects to deliver
the vessel to the buyers in December 2009.
Third Quarter 2009 and 2008 Results
For the quarter ended September 30, 2009, total revenues amounted to $33.6
million compared to $65.2 million for the quarter ended September 30, 2008
mainly due to lower charter rates for most of our vessels imposed by the
market. Operating loss amounted to $70.7 million for the quarter ended
September 30, 2009 compared to operating income of $37.6 million for the
quarter ended September 30, 2008. Net loss for the third quarter of 2009
amounted to $72.9 million or $1.19 loss per share calculated on 61,049,760
weighted average number of shares, basic and diluted. Net income for the
third quarter of 2008 amounting to $35.2 million or $0.63 per basic share
calculated on 55,873,973 weighted average number of shares, $0.62 per
diluted share calculated on 56,971,504 weighted average number of shares.
The third quarter of 2009 net loss figure includes the following non-cash
items:
-- Impairment loss of $75.1 million or $1.23 per basic and diluted share,
in connection with the sale of the vessel Star Alpha, which has been
classified as an asset held for sale and recorded at fair value less cost
to sell.
-- A loss of $10.1 million or $0.17 per basic and diluted share
associated with a loss on the time charter agreement termination which
mainly relates to the reversal of unamortized fair value of an above-market
acquired time charter on a vessel due to an early redelivery date.
Third quarter of 2008 net income figure includes the following non-cash
items:
-- Gain of $1.02 million, or $0.02 per basic and diluted share, in
connection with the sale of the vessel Star Iota.
-- Net revenue of $16.89 million or $0.30 per basic and diluted share,
representing amortization of fair value of below/above market acquired time
charters, attached to vessels acquired, over the remaining period of the
time charter into revenue.
-- Expenses of $0.44 million, or $0.01 per basic and diluted share
relating to stock-based compensation recognized in connection with the
vesting of a portion of 315,000 restricted common shares issued to
directors.
Adjusted EBITDA for the third quarter of 2009 and 2008 excluding the above
items was $28.3 million and $34.2 million, respectively. A reconciliation
of EBITDA and adjusted EBITDA to net cash provided by cash flows from
operating activities is set forth below.
An average of 12 and 12.1 vessels were owned and operated during the third
quarter of 2009 and 2008, respectively, earning an average Time Charter
Equivalent, ('TCE") rate per day of $29,474 and per day $45,756,
respectively. We refer you to the information under the heading "Summary
of Selected Data" later in this release for further information regarding
our calculation of TCE rates.
Total expenses, excluding the impairment loss from the sale of vessel Star
Alpha, decreased approximately 16% to $24.1 million for the
three-month period ended September 30, 2009 compared to $28.6 million for
the three-month period ended September 30, 2008 mainly due to lower vessel
operating expenses and a gain of $2.8 million related to FFA's. Vessel
operating expenses were $7.5 million for the third quarter of 2009 compared
to $9.4 million for the same period last year. The decrease in vessel
operating expenses is mainly due to the change of management of half of our
vessels during the three-month period ended September 30, 2009. Vessels
managed
in-house are proving to be substantially more cost effective than vessels
managed by third party managers.
Depreciation expenses decreased to $13.7 million for the third quarter of
2009 from $14.0 million for the third quarter of 2008.
General and administrative expenses decreased approximately 37% to $1.7
million for the quarter ended September 30, 2009 from $2.7 million for the
quarter ended September 30, 2008, respectively. This decrease is mainly
due to lower stock-based compensation expense.
Dividend Declaration:
On November 6, 2009, the Company announced that its Board of Directors
declared a cash dividend of $0.05 per outstanding share of the Company's
common stock for the three months ending September 30, 2009. The dividend
is payable on or about December 4,2009 to shareholders of record as of
November 27, 2009. The Company received written consent from each of its
lenders for the declaration and payment of this dividend in respect of the
third quarter of 2009, as required under the terms of the Company's waiver
agreements with its lenders, in effect up to February 2010.
Nine-month period ended September 30, 2009 and 2008 Results
For the nine-month period ended September 30, 2009, total revenues amounted
to $111.1 million compared to $166.1 million for the nine-month period
ended September 30, 2008. This decrease is mainly due to lower charter
rates earned for most of our vessels during 2009. Operating loss amounted
to $46.5 million for the nine-month period ended September 30, 2009
compared to operating income of $88.5 million for the nine-month period
ended September 30, 2008. Net loss for the nine-month period ended
September 30, 2009 amounted to $53.9 million representing $0.89 loss per
basic and diluted share calculated on 60,813,996 weighted average number of
shares. Net income for the nine-month period ended September 30, 2008
amounted to $83.5 million or $1.63 per basic share calculated on 51,201,845
weighted average number of shares, and $1.54 per diluted share calculated
on 54,200,802 weighted average number of shares.
Nine-month period ended September 30, 2009 net income figure includes the
following non-cash items:
-- Impairment loss of $75.1 million or $1.23 per basic and diluted share,
in connection with the sale of the vessel Star Alpha, which has been
classified as an asset held for sale and recorded at fair value less cost
to sell.
-- Net revenue of $5.4 million or $0.09 per basic and diluted share,
representing amortization of fair value of below/above market acquired time
charters, attached to vessels acquired, over the remaining period of the
time charter into revenue.
-- A gain of $0.8 million or $0.01 per basic and diluted share associated
with the gain on the time charter agreement termination which mainly
relates to the reversal of unamortized fair value of below-market acquired
time charter on a vessel due to an early redelivery date.
-- Expenses of $1.8 million, or $0.03 per basic and diluted share
relating to the stock-based compensation recognized in connection with the
vesting of a portion of 1,385,000 restricted shares (vested and unvested)
issued to directors and employees.
Nine-month period ended September, 2008 net income figure includes the
following non-cash items:
-- Vessel impairment loss of $3.6 million, or $0.07 per basic and diluted
share, in connection with the sale of the vessel Star Iota.
-- Net revenue of $51.8 million, or $1.01 and $0.96 per basic and diluted
share, respectively, attributable to the amortization of the fair value of
time charters attached to vessels acquired, over the remaining period of
the time charter.
-- Expenses of $2.7 million, or $0.05 per basic and diluted share,
respectively, relating to the stock-based compensation recognized in
connection with the vesting of a portion of 315,000 restricted common
shares issued to directors.
Adjusted EBITDA for the nine-months period ended September 30, 2009 and
2008 excluding all the above items was $69.6 million and $78.0 million
respectively. A reconciliation of EBITDA and adjusted EBITDA to net cash
provided by cash flows from operating activities is set forth below.
An average of 12 and 10.3 vessels were owned and operated during the
nine-months period ended September 30, 2009 and 2008, respectively, earning
an average TCE rate per day of $31,515 and $43,353, respectively. We refer
you to the information under the heading "Summary of Selected Data" later
in this release for further information regarding our calculation of TCE
rates.
Total expenses increased to $88.6 million for the nine-month period ended
September 30, 2009 compared to $74.0 million for the nine-month period
ended September 30, 2008 due to higher vessel operating and voyage expenses
and depreciation as a result of a longer operation period. Vessel operating
expenses were $23.3 million for the nine-month period ended September 30
2009 compared to $19.7 million for the same period last year. The increase
in vessel operating expenses was due to the operation of a larger fleet,
higher crewing and insurance expenses.
Depreciation expenses increased approximately 29% to $45.2 million for the
nine-month period ended September 30, 2009 from $35.0 million for the
nine-month period ended September 30, 2008 due to a longer operating period
of our fleet.
General and administrative expenses decreased approximately 22% to $6.3
million for the
nine-months period ended September 30, 2009 from $8.1 million the
nine-month period ended September 30, 2008, respectively. This decrease
was mainly due to lower stock based compensation.
Liquidity and Capital Resources
Cash Flows
Net cash provided by operating activities for the nine months ended
September 30, 2009 and 2008, was $59.0 million and $83.7 million,
respectively. Net cash provided by operating activities for the nine-month
period ended September 30, 2009 was primarily a result of recorded net loss
of $53.9 million, adjusted for depreciation of $45.2 million, and an
impairment loss from sale of vessel Star Alpha which has been classified as
asset held for sale and recorded at fair value less costs to sell of $75.1
million, and amortization of fair value of below/above market acquired time
charter agreements of $5.4 million. Net cash provided by operating
activities for the nine-months ended September 30, 2008 was primarily a
result of recorded net income of $83.5 million, adjusted for depreciation,
stock based compensation and the vessel impairment loss related to the sale
of the vessel Star Iota of $41.3 million offset by the amortization of the
fair value of below/above market acquired time charter agreements of $51.8
million.
Net cash used in investing activities for the nine-months ended September
30, 2009 and 2008, was $21.5 million and $440.8 million, respectively. For
the nine-month period ended September 30, 2009, there was an increase in
restricted cash of $21.5 million relating to the waivers obtained for
existing loan agreements and the FFA's. For the nine-months ended
September 30, 2008 the cash used in investing activities related mainly to
the payment of the cash consideration of $413.4 million paid for our
initial fleet, $14.4 million related to the purchase price allocated to the
above-market time charters and $13.0 million related to an increase in
restricted cash.
Net cash used in financing activities for the nine months ended September
30, 2009 was $38.4 million as compared to $343.0 million of net cash
provided by financing activities for the nine-months ended September 30,
2008. For the nine months ended September 30, 2009, net cash used in
financing activities consisted of the payments of loan installments
amounting to $37.0 million and a cash dividend payment of $3.1 million,
mainly offset by cash provided from our directors' dividend reinvestment of
$1.9 million. For the nine-month period ended September 30, 2008 net cash
provided by financing activities consisted of the drawdown of $317.5
million related to our loan facilities and the proceeds from exercise of
warrants of $94.2 million mainly offset by $42.8 million of cash dividends
paid, $12.5 million of repayments under our loan agreements and payments of
$11.7 million in connection with our repurchase of common stock and
warrants.
Summary of Selected Data
------------------------
(TCE rates expressed in U.S. dollars)
3 months ended 3 months ended
September 30, September 30,
2008 2009
------------- -------------
Average number of vessels(1) 12.1 12.0
------------- -------------
Number of vessels (as of the last day of the
periods reported) 13 12
------------- -------------
Average age of operational fleet (in years)(2) 10.6 10.4
------------- -------------
Ownership days (3) 1,116 1,104
------------- -------------
Available days (4) 1,056 1,090
------------- -------------
Voyage days for fleet (5) 1,030 1,046
------------- -------------
Fleet utilization (6) 97.5% 96.0%
------------- -------------
Average per-day TCE rate (7) $ 45,756 $ 29,474
------------- -------------
9 months ended 9 months ended
September 30, September 30,
2008 2009
------------- -------------
Average number of vessels(1) 10.3 12
------------- -------------
Number of vessels (as of the last day of the
periods reported) 13 12
------------- -------------
Average age of operational fleet (in years)(2) 10.6 10.4
------------- -------------
Ownership days (3) 2,818 3,276
------------- -------------
Available days (4) 2,629 3,192
------------- -------------
Voyage days for fleet (5) 2,573 3,117
------------- -------------
Fleet Utilization (6) 97.9% 97.7%
------------- -------------
Average per-day TCE rate (7) $ 43,353 $ 31,515
------------- -------------
(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) Average age of operational fleet is calculated as at September 30, 2008
and 2009, respectively.
(3) Ownership days are the total calendar days each vessel in the fleet was
owned by Star Bulk for the relevant period.
(4) Available days for the fleet are the ownership days after subtracting
for off-hire days with major repairs, dry-docking or special or
intermediate surveys or transfer of ownership.
(5) Voyage days are the total days the vessels were in our possession for
the relevant period after subtracting all off-hire days incurred for any
reason (including off-hire for dry-docking, major repairs, special or
intermediate surveys).
(6) Fleet utilization is calculated by dividing voyage days by available
days for the relevant period and takes into account the dry-docking
periods.
(7) Represents the weighted average per-day TCE rates, of our entire fleet.
TCE rate is a measure of the average daily revenue performance of a vessel
on a per voyage basis. Our method of calculating TCE rate is determined by
dividing voyage revenues (net of voyage expenses and amortization of fair
value of above/below market acquired time charter agreements) 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 rate 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. We included TCE revenues, a non-GAAP
measure, as it provides additional meaningful information in conjunction
with voyage revenues, the most directly comparable GAAP measure, because it
assists our management in making decisions regarding the deployment and use
of its vessels and in evaluating their financial performance. TCE rate is
also included herein because it 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 and because we believe that it presents
useful information to investors.
Unaudited Consolidated Condensed Statement of Operations
(Expressed in
thousands of U.S. 3 months 3 months 9 months 9 months
dollars except for ended ended ended ended
share and per September 30, September 30, September 30, September 30,
share data) 2008 2009 2008 2009
------------ ------------ ------------ ------------
Revenues: 65,179 33,638 166,100 111,123
Expenses:
Voyage expenses (1,158) (2,859) (2,743) (7,479)
Vessel operating
expenses (9,413) (7,486) (19,746) (23,325)
Drydocking expenses (837) (981) (7,229) (4,754)
Depreciation (13,993) (13,719) (35,039) (45,216)
Management fees (477) (169) (1,067) (702)
Gain/(loss) on
FFA's - 2,808 - (802)
General and
administrative
expenses (2,682) (1,717) (8,126) (6,318)
------------ ------------ ------------ ------------
Total expenses (28,560) (24,123) (73,950) (88,596)
Vessel impairment
(loss)/gain 1,017 (75,092) (3,625) (75,092)
(Loss)/gain on time
charter agreement
termination - (5,097) - 6,082
------------ ------------ ------------ ------------
Operating income
/(loss) 37,636 (70,674) 88,525 (46,483)
------------ ------------ ------------ ------------
Interest and
finance costs (2,617) (2,382) (5,859) (7,858)
Interest income 225 191 871 486
------------ ------------ ------------ ------------
Total other
expenses, net (2,392) (2,191) (4,988) (7,372)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income / (loss) 35,244 (72,865) 83,537 (53,855)
============ ============ ============ ============
Earnings/ (loss)
per share, basic 0.63 (1.19) 1.63 (0.89)
============ ============ ============ ============
Earnings /(loss)
per share, diluted 0.62 (1.19) 1.54 (0.89)
============ ============ ============ ============
Weighted average
number of shares
outstanding, basic 55,873,973 61,049,760 51,201,845 60,813,996
============ ============ ============ ============
Weighted average
number of shares
outstanding,
diluted 56,971,504 61,049,760 54,200,802 60,813,996
============ ============ ============ ============
Unaudited Consolidated Condensed Balance Sheets
-----------------------------------------------
(Expressed in thousands of U.S. dollars)
December 31, September 30,
2008 2009
ASSETS
Cash and restricted cash 31,961 35,751
Other current assets 10,312 14,698
Vessel held for sale - 19,250
-------------- --------------
TOTAL CURRENT ASSETS 42,273 69,699
Fixed assets, net 821,284 681,775
Restricted cash 12,010 27,510
Other non-current assets 15,809 2,039
-------------- --------------
TOTAL ASSETS 891,376 781,023
============== ==============
Current portion of long-term debt 49,250 60,400
Other current liabilities 8,037 11,162
-------------- --------------
TOTAL CURRENT LIABILITIES 57,287 71,562
Long-term debt 247,250 199,100
Other non-current liabilities 26,699 3,495
-------------- --------------
TOTAL LIABILITIES 331,236 274,157
STOCKHOLDERS' EQUITY 560,140 506,866
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 891,376 781,023
============== ==============
Unaudited Cash Flow Data
9 months 9 months
ended ended
September 30, September 30,
(Expressed in thousands of U.S. dollars) 2008 2009
------------- -------------
Net cash provided by operating activities 83,692 58,977
Net cash (used in) investing activities (440,789) (21,544)
Net cash provided by/(used in) financing
activities 343,006 (38,399)
EBITDA and adjusted EBITDA Reconciliation
Star Bulk considers EBITDA to represent net income before interest, income
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, ("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 the Company's ability to service
and/or incur indebtedness.
The Company excluded amortization of the fair value of above/below market
acquired time charters associated with time charters attached to vessels
acquired, vessel impairment loss, non-cash gain or loss related to early
time charter termination and expenses relating to the amortization of
stock-based compensation recognized during the period, to derive adjusted
EBITDA. The Company excluded the above non-cash items to derive adjusted
EBITDA because the Company believes that these non-cash items do not
reflect the operational cash inflows and outflows of the Company's fleet.
The following table reconciles net cash provided by operating activities to
EBITDA and adjusted EBITDA:
3 months 3 months 9 months 9 months
period period period period
ended ended ended ended
(Expressed in thousands of September September September September
U.S. dollars) 30, 30, 30, 30,
2008 2009 2008 2009
---------- ---------- ---------- ----------
Net cash provided by
operating activities 36,045 16,841 83,692 58,977
Net increase in current
assets 618 2,772 2,500 3,127
Net (increase)/decrease in
current liabilities,
excluding current portion
of long term debt (4,864) 6,826 (12,954) 667
Amortization of fair value
of above/below market
acquired time charter
agreements 16,892 47 51,811 5,405
Vessel impairment loss/
adjustment 1,017 (75,092) (3,625) (75,092)
Other non cash charges 31 (6) (43) (6)
Amortization of deferred
finance charges (66) (313) (147) (498)
Stock - based compensation (436) (84) (2,658) (1,750)
Change in fair value of
derivatives - - - (251)
Non-cash (loss)/gain on
time charter agreement
termination - (10,137) - 782
Net Interest expense 2,392 2,191 4,988 7,372
---------- ---------- ---------- ----------
EBITDA 51,629 (56,955) 123,564 (1,267)
========== ========== ========== ==========
Less:
Amortization of fair value
of above/below market
acquired time charter
agreements (16,892) (47) (51,811) (5,405)
Vessel impairment
adjustment (1,017) - - -
Non-cash (gain) on time
charter agreement
termination - - - (782)
Plus:
Stock - based compensation 436 84 2,658 1,750
Change in fair value of
derivatives - - - 251
Non-cash loss on time
charter agreement
termination 10,137 -
Vessel impairment loss 75,092 3,625 75,092
---------- ---------- ---------- ----------
Adjusted EBITDA 34,156 28,311 78,036 69,639
========== ========== ========== ==========
Results of the 2009 Annual General Meeting
All proposals on the agenda at the 2009 Annual Meeting of Shareholders held
on, November 23, 2009 at the Company's executive offices were approved and
adopted.
Conference Call details:
Star Bulk's management team will host a conference call to discuss the
Company's financial results tomorrow, Tuesday, November 24, 2009, at 9:30
a.m., Eastern Standard Time (EST).
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) 953-0329
(from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote
"Star Bulk."
A replay of the conference call will be available until December 1, 2009.
The United States replay number is 1(866) 247-4222; from the UK 0(800)
953-1533; the standard international replay number is (+44) (0) 1452 550
000 and the access code required for the replay is: 3128607#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the Star Bulk website (www.starbulk.com). Participants to the live webcast
should register on the website approximately 10 minutes prior to the start
of the webcast.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne
transportation solutions in the dry bulk sector. Star Bulk's vessels
transport major bulks, which include iron ore, coal and grain and minor
bulks such as bauxite, fertilizers and steel products. Star Bulk was
incorporated in the Marshall Islands on December 13, 2006 and is
headquartered in Athens, Greece. Its common stock and warrants trade on the
Nasdaq Global Market under the symbols "SBLK" and "SBLKW" respectively.
Currently, Star Bulk has an operating fleet of twelve dry bulk carriers.
The total fleet consists of four Capesize, and eight Supramax dry bulk
vessels with an average age of approximately 10.5 years and a combined
cargo carrying capacity of 1,106,253 deadweight tons.
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides
safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their
business. Forward-looking statements 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 Company desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The
words "believe," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "may," "should," "expect," "pending" and
similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, examination by the Company's management of
historical operating trends, data contained in its records and other data
available from third parties. Although the Company 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 the Company's control,
the Company cannot assure you that it will achieve or accomplish these
expectations, beliefs or projections.
In addition to these important factors, other important factors that, in
the Company's 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
fluctuations in charter rates and vessel values, changes in demand for dry
bulk shipping capacity, changes in the Company's operating expenses,
including bunker prices, drydocking and insurance costs, the market for the
Company's vessels, availability of financing and refinancing, changes in
governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation, general
domestic and international political conditions, potential disruption of
shipping routes due to accidents or political events, vessels breakdowns
and instances of off-hires and other factors. Please see our filings with
the Securities and Exchange Commission for a more complete discussion of
these and other risks and uncertainties. The information set forth herein
speaks only as of the date hereof, and the Company disclaims any intention
or obligation to update any forward-looking statements as a result of
developments occurring after the date of this communication.
Contact Information: Contacts : Company: George Syllantavos CFO Star Bulk Carriers Corp. c/o Star Bulk Management Inc. 7 Fragoklisias Str. Maroussi 15125 Athens, Greece www.starbulk.com Investor Relations / Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: starbulk@capitallink.com www.capitallink.com