SOURCE: Costamare Inc.

Costamare Inc.

April 29, 2014 16:05 ET

Costamare Inc. Reports Results for the First Quarter Ended March 31, 2014

ATHENS, GREECE--(Marketwired - Apr 29, 2014) -  Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the first quarter ended March 31, 2014.

  • Voyage revenues of $114.9 million for the three months ended March 31, 2014.

  • Voyage revenues adjusted on a cash basis of $117.5 million for the three months ended March 31, 2014.

  • Adjusted EBITDA of $82.1 million for the three months ended March 31, 2014.

  • Net income of $19.8 million for the three months ended March 31, 2014.

  • Net income available to common stockholders of $17.2 million or $0.23 per share for the three months ended March 31, 2014.

  • Adjusted Net income available to common stockholders of $26.3 million or $0.35 per share for the three months ended March 31, 2014.

See "Financial Summary" and "Non-GAAP Measures" below for additional detail.

Dividend Announcements- Dividend Increase

  • On April 29, 2014, the Board of Directors approved a one cent increase in the quarterly dividend and the Company declared a dividend of $0.28 per share of common stock for the first quarter ended March 31, 2014, payable on May 13, 2014, to stockholders of record at the close of trading of the Company's common stock on the New York Stock Exchange on May 9, 2014. This will be the Company's fourteenth consecutive quarterly dividend since it commenced trading on the New York Stock Exchange.

  • On March 31, 2014, the Company declared a dividend of $0.476563 per share of its Series B Preferred Stock and a $0.495833 per share of its Series C Preferred Stock, both paid on April 15, 2014, to holders of record on April 14, 2014.

New Business Developments

  • On March 14 and April 28, the Company took delivery of the 9,403 TEU newbuild containership vessels MSC Ajaccio and MSC Amalfi, both built by Shanghai Jiangnan Changxing Heavy Industry in China. Upon delivery, both vessels commenced long term charters with MSC.

  • On April 16, 2014, the Company took delivery of the 2000-built, 1,645 TEU containership Neapolis. The vessel was purchased from an insolvency administrator. The acquisition was 90% funded out of bank financing provided by an existing lender to the Company. The vessel has been chartered to Yang Ming for a period of minimum 4 and maximum 6 months starting from around May 8, 2014, at a daily rate of $8,100.

  • The Company entered into the following charter agreements:
    • Agreed to extend the charter of the 5,928 TEU 2003-built Venetiko with PIL for a period of minimum 11 and maximum 15 months starting from April 20, 2014, at a daily rate of $12,250.
    • Agreed to extend the charter of the 3,842 TEU 1998-built Kyparissia with Evergreen for a period of minimum 20 and maximum 30 days starting from May 12, 2014, at a daily rate of $8,000.
    • Agreed to extend the charter of the 2,458 TEU 1997-built Messini with Evergreen for a period of six months starting from April 1, 2014, at a daily rate of $7,500.
    • Exercised our option to extend the charter of the 2,020 TEU 1991-built MSC Pylos with MSC for a period of approximately two years starting from February 28, 2014. The daily rate for the first year of the extension has been set at $7,600.
    • Agreed to charter the 1,504 TEU 1996-built Prosper with Evergreen for a period of minimum 4 and maximum 6 months starting from May 3, 2014, at a daily rate of $7,400.

Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:

"During the first quarter of the year, the Company delivered positive results while at the same time implementing its fleet renewal and expansion strategy.

Regarding our existing newbuilding program, we accepted delivery of all ten newbuildings ordered during 2011. All the ships have commenced their long-term charter employment.

Due to these business developments, we are pleased to announce that the Board of Directors has approved a dividend increase of one cent for the first quarter of the year as a result of our increasing long term cash flows.

Recently, we acquired from an insolvency administrator a 2000-built 1,645 TEU container vessel. The acquisition was funded 90% with bank debt and forms part of a broader agreement between the Company and the vessel's current lending bank. After delivery, the vessel will commence its charter employment.

Regarding our chartering arrangements, our re-chartering risk is minimized. The charters for the vessels opening in 2014 account for approximately 3% of our 2014 contracted revenues.

Finally, on March 31, we declared a dividend on our Series B and Series C Preferred Stock, paid on April 14.

We continue to execute successfully on our growth strategy. We feel we are well positioned to continue to grow selectively and on healthy grounds."

 
Financial Summary
         
    Three-month period ended March 31,
(Expressed in thousands of U.S. dollars, except share and per share data):   2013   2014
       
             
Voyage revenue   $ 91,536   $ 114,898
Accrued charter revenue (1)   $ 3,292   $ 2,646
Voyage revenue adjusted on a cash basis (2)   $ 94,828   $ 117,544
             
Adjusted EBITDA (3)   $ 61,226   $ 82,082
             
Adjusted Net Income available to common stockholders (3)   $ 21,939   $ 26,314
Weighted Average number of shares     74,800,000     74,800,000
Adjusted Earnings per share (3)   $ 0.29   $ 0.35
             
EBITDA (3)   $ 64,022   $ 72,995
Net Income   $ 24,735   $ 19,833
Net Income available to common stockholders   $ 24,735   $ 17,227
Weighted Average number of shares     74,800,000     74,800,000
             
Earnings per share   $ 0.33   $ 0.23
             
(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period, and during the last years of such charter cash received will exceed revenue recognized on a straight line basis.
(2) Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash "Accrued charter revenue" recorded under charters with escalating charter rates. However, Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the "Fleet List" below.
(3) Adjusted net income, adjusted earnings per share, EBITDA and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to EBITDA and adjusted EBITDA below.
   
   

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three-month periods ended March 31, 2014 and March 31, 2013. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income, (iii) Adjusted earnings per share, (iv) EBITDA and (v) Adjusted EBITDA.

   
Reconciliation of Net Income to Adjusted Net Income available to common stockholdersand Adjusted Earnings per Share  
   
             
    Three-month period ended March 31,  
(Expressed in thousands of U.S. dollars, except share and per share data)   2013     2014  
         
Net Income   $ 24,735     $ 19,833  
Distributed earnings allocated to Preferred Stock     -       (2,606 )
Net Income available to common stockholders     24,735       17,227  
Accrued charter revenue     3,292       2,646  
Gain on sale/disposals of vessels     (2,909 )     -  
Swaps breakage cost     -       6,712  
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments     -       2,503  
Realized Gain on Euro/USD forward contracts     (190 )     -  
Gain on derivative instruments     (2,989 )     (2,774 )
                 
Adjusted Net income available to common stockholders   $ 21,939     $ 26,314  
Adjusted Earnings per Share   $ 0.29     $ 0.35  
Weighted average number of shares     74,800,000       74,800,000  
                 

Adjusted Net income and Adjusted Earnings per Share represent net income before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, gain/ (loss) on sale/disposals of vessels, realized (gain) /loss on Euro/USD forward contracts, swaps breakage cost, unrealized loss from a swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, and non-cash changes in fair value of currency forwards and derivatives. "Accrued charter revenue" is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net income and Adjusted Earnings per Share are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Adjusted Net income and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net income and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net income and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net income and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net income and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net income and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

   
Reconciliation of Net Income to EBITDA and Adjusted EBITDA  
             
    Three-month period ended March 31,  
(Expressed in thousands of U.S. dollars)   2013     2014  
         
                 
Net Income   $ 24,735     $ 19,833  
Interest and finance costs     17,564       25,796  
Interest income     (209 )     (150 )
Depreciation     19,882       25,208  
Amortization of prepaid lease rentals     -       410  
Amortization of dry-docking and special survey costs     2,050       1,898  
EBITDA     64,022       72,995  
Accrued charter revenue     3,292       2,646  
Gain on sale/disposals of vessels     (2,909 )     -  
Swaps breakage cost     -       6,712  
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments     -       2,503  
Realized Gain on Euro/USD forward contracts     (190 )     -  
Gain on derivative instruments     (2,989 )     (2,774 )
Adjusted EBITDA   $ 61,226     $ 82,082  

EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease, depreciation and amortization of deferred dry-docking and special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease rentals, depreciation, amortization of deferred dry-docking and special survey costs, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, gain/ (loss) on sale/disposals of vessels, realized gain/ (loss) on Euro/USD forward contracts, swaps breakage cost, unrealized loss from swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, and non-cash changes in fair value of currency forwards and derivatives. "Accrued charter revenue" is attributed to the time difference between the revenue recognition and the cash collection. However, EBITDA and Adjusted EBITDA are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that EBITDA and Adjusted EBITDA are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that EBITDA and Adjusted EBITDA are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of EBITDA and Adjusted 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 and liquidity. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.

Results of Operations

Three-month period ended March 31, 2014 compared to the three-month period ended March 31, 2013

During the three-month periods ended March 31, 2014 and 2013, we had an average of 53.1 and 46.9 vessels, respectively, in our fleet. In the three-month period ended March 31, 2014, we accepted delivery of the newbuild vessels MSC Azov and MSC Ajaccio with an aggregate TEU capacity of 18,806. In the three-month period ended March 31, 2013, we accepted delivery of the newbuild vessel MSC Athens with a TEU capacity of 8,827, the secondhand vessel Venetiko with a TEU capacity of 5,928, and we sold the vessel MSC Washington, with a TEU capacity of 3,876. In the three-month periods ended March 31, 2014 and 2013, our fleet ownership days totaled 4,775 and 4,221 days, respectively. Ownership days are the primary driver of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

                         
(Expressed in millions of U.S. dollars,
except percentages)
  Three-month period ended March 31,              
2013     2014     Change     Percentage Change  
         
                               
Voyage revenue   $ 91.5     $ 114.9     $ 23.4     25.6 %
Voyage expenses     (0.7 )     (0.7 )     -     -  
Voyage expenses - related parties     (0.7 )     (0.9 )     0.2     28.6 %
Vessels' operating expenses     (27.9 )     (29.4 )     1.5     5.4 %
General and administrative expenses     (0.9 )     (1.1 )     0.2     22.2 %
Management fees - related parties     (3.9 )     (4.5 )     0.6     15.4 %
Amortization of dry-docking and special survey costs     (2.0 )     (1.9 )     (0.1 )   (5.0 %)
Depreciation     (19.9 )     (25.2 )     5.3     26.6 %
Amortization of prepaid lease rentals     -       (0.4 )     0.4     100.0 %
Gain on sale / disposals of vessels     2.9       -       (2.9 )   (100.0 %)
Foreign exchange gains/ (losses)     0.1       (0.1 )     (0.2 )   (200.0 %)
Interest income     0.2       0.2       -     -  
Interest and finance costs     (17.6 )     (25.8 )     8.2     46.6 %
Swaps breakage cost     -       (6.7 )     6.7     100.0 %
Equity loss on investments     -       (2.3 )     2.3     100.0 %
Other     0.6       0.9       0.3     50.0 %
Gain on derivative instruments     3.0       2.8       (0.2 )   (6.7 %)
Net Income   $ 24.7     $ 19.8                
                               
                               
                     
(Expressed in millions of U.S. dollars,
except percentages)
  Three-month period ended
March 31,
           
2013   2014   Change     Percentage
Change
 
                           
Voyage revenue   $ 91.5   $ 114.9   $ 23.4     25.6 %
Accrued charter revenue     3.3     2.6     (0.7 )   (21.2 %)
Voyage revenue adjusted on a cash basis   $ 94.8   $ 117.5   $ 22.7     23.9 %
                           
                           
Vessels operational data   Three-month period ended
March 31,
         
2013   2014   Change   Percentage
Change
 
                   
Average number of vessels   46.9   53.1   6.2   13.2 %
Ownership days   4,221   4,775   554   13.1 %
Number of vessels under dry-docking   2   2   -      
                   

Voyage Revenue

Voyage revenue increased by 25.6%, or $23.4 million, to $114.9 million during the three-month period ended March 31, 2014, from $91.5 million during the three-month period ended March 31, 2013. This increase was mainly due to (i) revenue earned by the newbuild vessels delivered to us during the nine-month period ended December 31, 2013 and the three-month period ended March 31, 2014; partly offset by (ii) decreased charter rates in certain of our vessels during the three-month period ended March 31, 2014, compared to the three-month period ended March 31, 2013, and (iii) revenues not earned by vessels which were sold for scrap during the nine-month period ended December 31, 2013.

 Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 23.9%, or $22.7 million, to $117.5 million during the three-month period ended March 31, 2014, from $94.8 million during the three-month period ended March 31, 2013. This increase was mainly due to (i) revenue earned by the newbuild vessels delivered to us during the nine-month period ended December 31, 2013 and the three-month period ended March 31, 2014; partly offset by (ii) decreased charter rates in certain of our vessels during the three-month period ended March 31, 2014, compared to the three-month period ended March 31, 2013, and (iii) revenues not earned by vessels which were sold for scrap during the nine-month period ended December 31, 2013.

Voyage Expenses

Voyage expenses were $0.7 million, during the three-month period ended March 31, 2014 and $0.7 million during the three-month period ended March 31, 2013. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.

Voyage Expenses - related parties

Voyage expenses - related parties in the amount of $0.9 million during the three-month period ended March 31, 2014 and in the amount of $0.7 million during the three-month period ended March 31, 2013, represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our group management agreement.

Vessels' Operating Expenses

Vessels' operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, increased by 5.4%, or $1.5 million, to $29.4 million during the three-month period ended March 31, 2014, from $27.9 million during the three-month period ended March 31, 2013. The increase was partly attributable to the increased ownership days of our vessels during the three-month period ended March 31, 2014 compared to the three-month period ended March 31, 2013.

General and Administrative Expenses

General and administrative expenses increased by 22.2%, or $0.2 million, to $1.1 million during the three-month period ended March 31, 2014, from $0.9 million during the three-month period ended March 31, 2013. General and administrative expenses for the three-month periods ended March 31, 2014 and 2013, included $0.25 million in each period for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our group management agreement. 

Management Fees - related parties

Management fees paid to our managers increased by 15.4%, or $0.6 million, to $4.5 million during the three-month period ended March 31, 2014, from $3.9 million during the three-month period ended March 31, 2013. The increase was primarily attributable to (i) the inflation related upward adjustment by 4% of the management fee for each vessel (effective January 1, 2014), as provided under our group management agreement and (ii) the increased average number of vessels during the three-month period ended March 31, 2014, compared to the three-month period ended March 31, 2013.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $1.9 million for the three-month period ended March 31, 2014 and $2.0 million for the three-month period ended March 31, 2013. During the three-month period ended March 31, 2014 two vessels underwent and completed their special survey. During the three-month period ended March 31, 2013 one vessel underwent and completed her special survey while one vessel was in process.

Depreciation

Depreciation expense increased by 26.6%, or $5.3 million, to $25.2 million during the three-month period ended March 31, 2014, from $19.9 million during the three-month period ended March 31, 2013. The increase was mainly attributable to the depreciation expense charged for the six newbuild vessels delivered to us during the nine-month period ended December 31, 2013 and for the two newbuild vessels delivered to us during the three-month period ended March 31, 2014, partly offset by the depreciation expense not charged for the vessels sold for scrap during the nine-month period ended December 31, 2013.

Gain on Sale/Disposals of Vessels

During the three-month period ended March 31, 2014, no vessels were sold. During the three-month period ended March 31, 2013, we recorded a gain of $2.9 million from the sale of one vessel.

Foreign Exchange Gains/(Losses)

Foreign exchange losses were $0.1 million during the three-month period ended March 31, 2014. Foreign exchange gains were $0.1 million during the three-month period ended March 31, 2013.

Interest Income

Interest income for the three-month period ended March 31, 2014 and 2013 amounted to $0.2 million and $0.2 million, respectively.

Interest and Finance Costs

Interest and finance costs increased by 46.6%, or $8.2 million, to $25.8 million during the three-month period ended March 31, 2014, from $17.6 million during the three-month period ended March 31, 2013. The increase was mainly attributable to the increased interest expense charged to the consolidated statement of income in relation with the loan facilities of the eight newbuild vessels which were delivered to us during the nine-month period ended December 31, 2013 and the three-month period ended March 31, 2014 and the write-off of deferred finance costs due to the refinancing of one of our bank loans; partly offset by the decreased loan commitment fees charged to us during the three-month period ended March 31, 2014, compared to the three-month period ended March 31, 2013.

Equity Loss on Investments

 The equity loss on investments of $2.3 million for the three-month period ended March 31, 2014, represents our share of the net losses of thirteen jointly owned companies pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of these companies. The net loss of $2.3 million was mainly attributable to an unrealized loss of $2.5 million deriving from a swap option agreement entered into by a jointly-owned company.

Gain on Derivative Instruments

 The fair value of our 25 interest rate derivative instruments which were outstanding as of March 31, 2014, equates to the amount that would be paid by us or to us should those instruments be terminated. As of March 31, 2014, the fair value of these 25 interest rate derivative instruments in aggregate amounted to a liability of $89.0 million. Twenty-four of the 25 interest rate derivative instruments that were outstanding as at March 31, 2014, qualified for hedge accounting and the effective portion of the change in their fair value is recorded in "Other Comprehensive Income" ("OCI"). For the three-month period ended March 31, 2014, a net gain of $11.4 million has been included in "OCI" and a net gain of $2.8 million has been included in "Gain on derivative instruments" in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended March 31, 2014. Furthermore, during the three-month period ended March 31, 2014, we terminated two interest rate derivative instruments that qualified for hedge accounting and we paid the counterparty breakage costs of $6.7 million, in aggregate.

Cash Flows

Three-month periods ended March 31, 2014 and 2013

             
Condensed cash flows   Three-month period ended March 31,  
(Expressed in millions of U.S. dollars)   2013     2014  
Net Cash Provided by Operating Activities   $ 34.9     $ 53.9  
Net Cash Used in Investing Activities   $ (149.6 )   $ (65.1 )
Net Cash Provided by Financing Activities   $ 30.2     $ 101.5  

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended March 31, 2014, increased by $19.0 million to $53.9 million, compared to $34.9 million for the three-month period ended March 31, 2013. The increase was primarily attributable to increased cash from operations of $22.7 million due to cash generated from the employment of the eight newbuild vessels delivered to us during the nine-month period ended December 31, 2013 and the three-month period ended March 31, 2014, and to favorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $11.6 million, partly offset by the increased payments for interest (including swap payments) during the period of $7.5 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $65.1 million in the three-month period ended March 31, 2014, which consisted of (a) $40.6 million for capitalized costs and advance payments for the construction and delivery of three newbuild vessels and (b) $24.5 million in payments, pursuant to the Framework Agreement with York, to hold an equity interest ranging from 25% to 49% in jointly-owned companies.

Net cash used in investing activities was $149.6 million in the three-month period ended March 31, 2013, which consisted of (a) $129.2 million advance payments for the construction and purchase of three newbuild vessels, (b) $22.2 million in payments for the acquisition of one secondhand vessel, (c) $2.4 million advance payment we received from the sale of one vessel for scrap which was delivered to her scrap buyers on April 24, 2013 and (d) $0.6 million in payments for expenses related to the sale of vessel MSC Washington (the related sale price was collected in advance in 2012).

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $101.5 million in the three-month period ended March 31, 2014, which mainly consisted of (a) $147.5 million of indebtedness that we repaid, (b) $171.1 million we received regarding the sale and leaseback transaction of two newbuild vessels that we delivered during the period, (c) $20.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2013, (d) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares for the period from October 15, 2013 to January 14, 2014 and (e) $96.5 million net proceeds we received from our public offering in January 2014, of 4.0 million shares of our 8.50% Series C Cumulative Redeemable Perpetual Preferred Shares, net of underwriting discounts and expenses incurred in the offering.

Net cash provided by financing activities was $30.2 million in the three-month period ended March 31, 2013, which mainly consisted of (a) $36.2 million of indebtedness that we repaid, (b) $87.9 million we drew down from two of our credit facilities and (c) $20.2 million we paid for dividends to our stockholders for the fourth quarter of the year ended December 31, 2012.

Liquidity and Capital Expenditures

Cash and cash equivalents

As of March 31, 2014, we had a total cash liquidity of $238.0 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of April 29, 2014, the following vessels were free of debt.

Unencumbered Vessels in the water(*)
(refer to fleet list for full charter details)
 
Vessel Name   Year
Built
  TEU
Capacity
NAVARINO   2010   8,531
VENETIKO   2003   5,928
MESSINI   1997   2,458
NEAPOLIS   2000   1,645
         
(*) Does not include three secondhand vessels acquired and nine newbuild vessels ordered pursuant to the Framework Agreement with York, which are also free of debt.

Capital commitments

As of April 29, 2014, we had outstanding commitments relating to our nine contracted newbuilds, aggregating approximately $ 316.8 million payable in installments until the vessels are delivered, which amount represents our interest in the relevant jointly-owned entities with York.

Conference Call details:

On Wednesday, April 30, 2014 at 8:30 a.m., ET, Costamare's management team will hold a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-866-524-3160 (from the US), 0808 238 9064 (from the UK) or +1-412-317-6760 (from outside the US). Please quote "Costamare".

A replay of the conference call will be available until May 30, 2014. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088, and the access code required for the replay is: 10045223.

Live webcast:

There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com) under the "Investors" section. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Costamare Inc.

Costamare Inc. is one of the world's leading owners and providers of containerships for charter. The Company has 40 years of history in the international shipping industry and a fleet of 68 containerships, with a total capacity in excess of 445,000 TEU, including nine newbuild containerships on order. Twelve of our containerships, including nine newbuilds, have been acquired pursuant to the Framework Agreement with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company's common stock, Series B Preferred Stock and Series C Preferred Stock trade on the New York Stock Exchange under the symbols "CMRE", "CMRE PR B" and "CMRE PR C", respectively.

Forward-Looking Statements

This earnings release contains "forward-looking statements". In some cases, you can identify these statements by forward-looking words such as "believe", "intend", "anticipate", "estimate", "project", "forecast", "plan", "potential", "may", "should", "could" and "expect" and similar expressions. These statements are not historical facts but instead represent only Costamare's belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare's control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.'s Annual Report on Form 20-F (File No. 001-34934) under the caption "Risk Factors".

Fleet List

The tables below provide additional information, as of April 29, 2014, about our fleet of containerships, including our newbuilds on order and the vessels acquired pursuant to the Framework Agreement with York. Each vessel is a cellular containership, meaning it is a dedicated container vessel.

    Vessel Name   Charterer Year Built   Capacity (TEU)   Time Charter Term(1)   Current Daily Charter Rate (U.S. dollars)   Expiration of Charter(1)   Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars)(2)
1   COSCO GUANGZHOU   COSCO 2006   9,469   12 years   36,400   December 2017   36,400
2   COSCO NINGBO   COSCO 2006   9,469   12 years   36,400   January 2018   36,400
3   COSCO YANTIAN   COSCO 2006   9,469   12 years   36,400   February 2018   36,400
4   COSCO BEIJING   COSCO 2006   9,469   12 years   36,400   April 2018   36,400
5   COSCO HELLAS   COSCO 2006   9,469   12 years   37,519   May 2018   37,519
6   MSC AZOV   MSC 2014   9,403   10 years   43,000   November 2023   43,000
7   MSC AJACCIO   MSC 2014   9,403   10 years   43,000   February 2024   43,000
8   MSC AMALFI   MSC 2014   9,403   10 years   43,000   March 2024   43,000
9   MSC ATHENS   MSC 2013   8,827   10 years   42,000   January 2023   42,000
10   MSC ATHOS   MSC 2013   8,827   10 years   42,000   February 2023   42,000
11   VALOR   Evergreen 2013   8,827   7 years
(i)
  41,700   April 2020(i)   41,700
12   VALUE   Evergreen 2013   8,827   7 years
(i)
  41,700   April 2020(i)   41,700
13   VALIANT   Evergreen 2013   8,827   7 years
(i)
  41,700   June 2020(i)   41,700
14   VALENCE   Evergreen 2013   8,827   7 years
(i)
  41,700   July 2020
(i)
  41,700
15   VANTAGE   Evergreen 2013   8,827   7 years
(i)
  41,700   September 2020
(i)
  41,700
16   NAVARINO   MSC 2010   8,531   1.0 year       February 2015    
17   MAERSK KAWASAKI
(ii)
  A.P. Moller-Maersk 1997   7,403   10 years   37,000   December 2017   37,000
18   MAERSK KURE
(ii)
  A.P. Moller-Maersk 1996   7,403   10 years   37,000   December 2017   37,000
19   MAERSK KOKURA
(ii)
  A.P. Moller-Maersk 1997   7,403   10 years   37,000   February 2018   37,000
20   MSC METHONI   MSC 2003   6,724   10 years   29,000   September 2021   29,000
21   SEALAND NEW YORK   A.P. Moller-Maersk 2000   6,648   11 years   30,375
(3)
  March 2018   26,127
22   MAERSK KOBE   A.P. Moller-Maersk 2000   6,648   11 years   38,179
(4)
  May 2018   26,612
23   SEALAND WASHINGTON   A.P. Moller-Maersk 2000   6,648   11 years   30,375
(5)
  June 2018   26,429
24   SEALAND MICHIGAN   A.P. Moller-Maersk 2000   6,648   11 years   25,375
(6)
  August 2018   26,020
25   SEALAND ILLINOIS   A.P. Moller-Maersk 2000   6,648   11 years   30,375
(7)
  October 2018   26,678
26   MAERSK KOLKATA   A.P. Moller-Maersk 2003   6,644   11 years   38,865
(8)
  November 2019   29,918
27   MAERSK KINGSTON   A.P. Moller-Maersk 2003   6,644   11 years   38,461
(9)
  February 2020   30,334
28   MAERSK KALAMATA   A.P. Moller-Maersk 2003   6,644   11 years   38,418
(10)
  April 2020   30,384
29   VENETIKO   PIL 2003   5,928   2.0 years   12,250   March 2015   12,250
30   ENSENADA EXPRESS
(*)
  Hapag Lloyd 2001   5,576   2.0 years   19,000   May 2015   19,000
31   MSC ROMANOS   MSC 2003   5,050   5.3 years   28,000   November 2016   28,000
32   ZIM NEW YORK   ZIM(**) 2002   4,992   13 years   23,150
(11)
  September 2015   23,150
(11)
33   ZIM SHANGHAI   ZIM(**) 2002   4,992   13 years   23,150
(11)
  September 2015   23,150
(11)
34   ZIM PIRAEUS   ZIM(**) 2004   4,992   10 years   22,150
(11)
  September 2015   22,150
(11)
35   OAKLAND EXPRESS   Hapag Lloyd 2000   4,890   8 years   30,500   September 2016   30,500
36   HALIFAX EXPRESS   Hapag Lloyd 2000   4,890   8 years   30,500   October 2016   30,500
37   SINGAPORE EXPRESS   Hapag Lloyd 2000   4,890   8 years   30,500   July 2016   30,500
38   MSC MANDRAKI   MSC 1988   4,828   7.8 years   20,000   August 2017   20,000
39   MSC MYKONOS   MSC 1988   4,828   8.2 years   20,000   September 2017   20,000
40   MSC ULSAN   MSC 2002   4,132   5.3 years   16,500   March 2017   16,500
41   MSC KYOTO   MSC 1981   3,876   9.5 years   13,500
(12)
  September 2018   13,500
42   KORONI   Evergreen 1998   3,842   2 years   11,500   May 2014   11,500
43   KYPARISSIA   Evergreen 1998   3,842   2 years   11,500
(13)
  June 2014   9,379
44   KARMEN     1991   3,351                
45   MARINA   Evergreen 1992   3,351   1.8 years   7,000   June 2014   7,000
46   KONSTANTINA   PIL 1992   3,351   0.1 years   3,750   May 2014   3,750
47   AKRITAS   Hapag Lloyd 1987   3,152   4 years   12,500   August 2014   12,500
48   MSC CHALLENGER   MSC 1986   2,633   4.8 years   10,000   July 2015   10,000
49   MESSINI   Evergreen 1997   2,458   2.0 years   7,500   October 2014   7,500
50   MSC REUNION
(iii)
  MSC 1992   2,024   6 years   11,500   June 2014   11,500
51   MSC NAMIBIA II
(iii)
  MSC 1991   2,023   6.8 years   11,500   July 2014   11,500
52   MSC SIERRA II
(iii)
  MSC 1991   2,023   5.7 years   11,500   June 2014   11,500
53   MSC PYLOS   MSC 1991   2,020   5 years   7,600   January 2016   7,600
54   X-PRESS PADMA
(*)
  Sea Consortium 1998   1,645   2.0 years   7,650
(14)
  June 2015   8,104
55   NEAPOLIS   Yang Ming 2000   1,645   0.4 years   8,100   September 2014   8,100
56   PROSPER   Evergreen 1996   1,504   0.4 years   7,400   September 2014   7,400
57   ZAGORA   MSC 1995   1,162   3.7 years   5,700
(15)
  April 2015   5,700
58   PETALIDI
(*)
  CMA CGM 1994   1,162   1.0 years   6,300   June 2014   6,300
59   STADT LUEBECK   CMA CGM 2001   1.078   1.7 years   6,400
(16)
  July 2014   6,400
                               
                               
Newbuilds
 
   
Vessel Name
 
Shipyard
 
Charterer
  Expected Delivery
(
based on latest shipyard schedule)
1   NCP0113(*)   Hanjin Subic Bay       4th Quarter 2015
2   NCP0114(*)   Hanjin Subic Bay       1st Quarter 2016
3   NCP0115(*)   Hanjin Subic Bay       2nd Quarter 2016
4   NCP0116(*)   Hanjin Subic Bay       2nd Quarter 2016
5   S2121(*)   Samsung Heavy   Evergreen   2nd Quarter 2016
6   S2122(*)   Samsung Heavy   Evergreen   2nd Quarter 2016
7   S2123(*)   Samsung Heavy   Evergreen   3rd Quarter 2016
8   S2124(*)   Samsung Heavy   Evergreen   3rd Quarter 2016
9   S2125(*)   Samsung Heavy   Evergreen   3rd Quarter 2016

Our newbuilds on order have an aggregate capacity in excess of 110,000 TEU.

(1) Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.
(2) This average rate is calculated based on contracted charter rates for the days remaining between April 29, 2014 and the earliest expiration of each charter. Certain of our charter rates change until their earliest expiration dates, as indicated in the footnotes below.
(3) This charter rate changes on May 8, 2014 to $26,100 per day until the earliest redelivery date.
(4) This charter rate changes on June 30, 2014 to $26,100 per day until the earliest redelivery date.
(5) This charter rate changes on August 24, 2014 to $26,100 per day until the earliest redelivery date.
(6) This charter rate changes on October 20, 2014 to $26,100 per day until the earliest redelivery date.
(7) This charter rate changes on December 4, 2014 to $26,100 per day until the earliest redelivery date.
(8) This charter rate changes on January 13, 2016 to $26,100 per day until the earliest redelivery date.
(9) This charter rate changes on April 28, 2016 to $26,100 per day until the earliest redelivery date.
(10) This charter rate changes on June 11, 2016 to $26,100 per day until the earliest redelivery date.
(11) The amounts in the table reflect the charter terms currently in effect, although Zim has not paid the full contracted amounts. The aggregate amount of the shortfall for the first quarter of 2014 is approximately $2.5million. We are participating in ongoing discussions among Zim, its shareholders and its creditors, including vessel and container lenders, shipowners, shipyards, unsecured lenders and bond holders, to restructure its debt and charter obligations which, if successful, will result in our granting concessions to the existing charter rate and receivables from Zim, in exchange for charter extensions for two out of our three vessels currently chartered to Zim, as well as the issuance to us of debt and equity securities of Zim. If we reach such an agreement, we will revise our contractual obligations table accordingly.
(12) As from December 1, 2012 until redelivery, the charter rate is to be a minimum of $13,500 per day plus 50% of the difference between the market rate and the charter rate of $13,500. The market rate is to be determined annually based on the Hamburg ConTex type 3500 TEU index published on October 1 of each year until redelivery.
(13) This charter rate changes on May 12, 2014 to $8,000 per day until the earliest redelivery date
(14) This charter rate changes on July 27, 2014 to $8,225 per day until the earliest redelivery date.
(15) This charter rate changes on May 1, 2014 to $6,200 per day until the earliest redelivery date
(16) The charterer has a unilateral option to extend the charter of the vessel for a period of six months at a rate of $8,500 per day.
   
(i) Assumes exercise of Owners unilateral options to extend the charter of these vessels for two one year periods.
(ii) The charterer has a unilateral option to extend the charter of the vessel for two periods of 30 months each +/-90 days on the final period performed, at a rate of $41,700 per day.
(iii) Owners have a unilateral option to extend the charters of the vessels for an additional period of two years at market rate, to be defined annually, based on the closest category on the Contex index.
(*) Denotes vessels acquired pursuant to the Framework Agreement with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.
   
   
   
COSTAMARE INC.  
Consolidated Statements of Income  
   
    Three-months ended
March 31,
 
(Expressed in thousands of U.S. dollars, except share and per share amounts)   2013     2014  
    (Unaudited)  
         
                 
REVENUES:                
Voyage revenue   $ 91,536     $ 114,898  
                 
EXPENSES:                
Voyage expenses     (679 )     (685 )
Voyage expenses - related parties     (692 )     (862 )
Vessels' operating expenses     (27,880 )     (29,384 )
General and administrative expenses     (963 )     (1,097 )
Management fees - related parties     (3,890 )     (4,471 )
Amortization of dry-docking and special survey costs     (2,050 )     (1,898 )
Depreciation     (19,882 )     (25,208 )
Amortization of prepaid lease rentals     -       (410 )
Gain on sale/disposals of vessels     2,909       -  
Foreign exchange gains/ (losses)     75       (63 )
Operating income   $ 38,484     $ 50,820  
                 
OTHER INCOME (EXPENSES):                
Interest income   $ 209     $ 150  
Interest and finance costs     (17,564 )     (25,796 )
Swaps breakage cost     -       (6,712 )
Equity loss on investments     -       (2,278 )
Other     617       875  
Gain on derivative instruments     2,989       2,774  
Total other income (expenses)   $ (13,749 )   $ (30,987 )
Net Income   $ 24,735     $ 19,833  
Distributed earnings allocated to Preferred Stock     -       (2,606 )
Net Income available to common stockholders   $ 24,735     $ 17,227  
                 
Earnings per common share, basic and diluted   $ 0.33     $ 0.23  
Weighted average number of shares, basic and diluted     74,800,000       74,800,000  
                 
                 
                 
COSTAMARE INC.  
Consolidated Balance Sheets  
   
    As of December 31,     As of
March 31,
 
(Expressed in thousands of U.S. dollars)   2013     2014  
    (Audited)     (Unaudited)  
ASSETS                
CURRENT ASSETS:                
Cash and cash equivalents   $ 93,379     $ 183,619  
Restricted cash     9,067       6,681  
Accounts receivable     16,145       11,114  
Inventories     11,005       12,091  
Due from related parties     2,679       382  
Insurance claims receivable     1,429       2,252  
Prepaid lease rentals     -       3,328  
Accrued charter revenue     409       409  
Prepayments and other     2,450       3,470  
Total current assets   $ 136,563     $ 223,346  
FIXED ASSETS, NET:                
Advances for vessels acquisitions   $ 240,871     $ 81,370  
Finance lease - Asset     -       170,500  
Vessels, net     2,187,388       2,162,872  
Total fixed assets, net   $ 2,428,259     $ 2,414,742  
NON-CURRENT ASSETS:                
Investment in affiliates   $ 23,732     $ 45,939  
Prepaid lease rentals, non-current     -       29,579  
Deferred charges, net     29,864       29,149  
Accounts receivable, non-current     7,334       7,334  
Restricted cash     49,826       47,652  
Accrued charter revenue     10,264       10,164  
Total assets   $ 2,685,842     $ 2,807,905  
LIABILITIES AND STOCKHOLDERS' EQUITY                
CURRENT LIABILITIES:                
Current portion of long-term debt   $ 206,717     $ 198,370  
Accounts payable     5,814       7,694  
Finance lease - obligation     -       8,245  
Accrued liabilities     14,386       14,873  
Unearned revenue     9,601       10,850  
Fair value of derivatives     55,322       47,700  
Other current liabilities     3,140       2,425  
Total current liabilities   $ 294,980     $ 290,157  
NON-CURRENT LIABILITIES                
Long-term debt, net of current portion   $ 1,660,859     $ 1,521,727  
Finance lease - obligation, net of current portion     -       162,220  
Fair value of derivatives, net of current portion     47,890       41,269  
Unearned revenue, net of current portion     25,164       26,692  
Total non-current liabilities   $ 1,733,913     $ 1,751,908  
COMMITMENTS AND CONTINGENCIES                
STOCKHOLDERS' EQUITY:                
Common stock   $ 8     $ 8  
Additional paid-in capital     762,142       858,665  
Accumulated deficit     (20,047 )     (23,016 )
Accumulated other comprehensive loss     (85,154 )     (69,817 )
Total stockholders' equity   $ 656,949     $ 765,840  
Total liabilities and stockholders' equity   $ 2,685,842     $ 2,807,905  

Contact Information

  • Contacts:

    Company Contact:
    Gregory Zikos
    Chief Financial Officer
    Konstantinos Tsakalidis
    Business Development
    Costamare Inc., Athens, Greece
    Tel: (+30) 210-949-0050
    Email: Email Contact

    Investor Relations Advisor/ Media Contact:
    Gus Okwu
    Allison+Partners, New York
    Telephone: (+1) 646-428-0638
    Email: Email Contact