ATHENS, GREECE--(Marketwire - Oct 26, 2011) - Costamare Inc. ("Costamare") (
Financial Highlights
- Voyage revenues of $99.9 million and $280.2 million for the three and the nine months ended September 30, 2011, respectively.
- Voyage revenues adjusted on a cash basis of $107.7 million and $303.4 million for the three and the nine months ended September 30, 2011, respectively.
- Adjusted EBITDA of $72.9 million and $200.0 million for the three and the nine months ended September 30, 2011, respectively.
- Net income of $17.4 million or $0.29 per share and $61.5 million or $1.02 per share for the three and the nine months ended September 30, 2011, respectively.
- Adjusted Net Income of $30.9 million or $0.51 per share and $80.2 million or $1.33 per share for the three and the nine months ended September 30, 2011, respectively.
New Business Developments
- Agreed to acquire the 6,724 TEU, 2003-built containership MSC Methoni (ex. MSC Viviana) for a purchase price of $60.0 million. The vessel was delivered on October 17, 2011 and commenced a time charter with Mediterranean Shipping Company S.A. ("MSC") for a duration of approximately 10 years, at a daily rate of $29,000.
- Reached an agreement to acquire, subject to final documentation, the 4,132 TEU, 2002-built containership MSC Ulsan for a purchase price of $30.0 million. The vessel is expected to be delivered within the first quarter of 2012 and immediately upon delivery it will commence a time charter with MSC for a duration of approximately 63 months, at a daily rate of $16,500.
- Entered into agreements to extend the time charters for the following six existing vessels:
- The time charter agreement with MSC for the 1991-built, 2,023 TEU c/v MSC Sierra II, has been extended as from July 1, 2012, for a further period of approximately two years, at a daily rate of $11,500.
- The time charter agreement with MSC for the 1991-built, 2,023 TEU, c/v MSC Namibia II, has been extended as from August 2, 2012, for a further period of approximately two years, at a daily rate of $11,500.
- The time charter agreement with MSC for the 1992-built, 2,024 TEU, c/v MSC Sudan II, has been extended as from July 27, 2012, for a further period of approximately two years, at a daily rate of $11,500.
- The time charter agreement with MSC for the 1991-built, 2,020 TEU, c/v MSC Pylos, has been extended as from February 28, 2012, for a further period of approximately two years, at a daily rate of $11,500.
- The time charter agreement with MSC for the 1986-built, 2,633 TEU, c/v MSC Challenger, has been extended as from October 13, 2012, for a further period until approximately August 30, 2015, at a daily rate of $10,000.
- The time charter agreement with MSC for the 1984-built, 3,584 TEU, c/v MSC Austria, has been extended as from December 1, 2012, for a further period until approximately October 1, 2018, at a minimum daily rate of $13,500 plus 50% of the amount by which the market rate exceeds the minimum daily rate. The market rate is to be determined annually during the extension period, based on the Hamburg Contex 3500 TEU index.
- Agreed to sell the 1978-built vessels MSC Tuscany and MSC Fado for demolition, with delivery due to the buyers by mid-December 2011, for a total sale price of approximately $8.8 million. The Company expects to realize capital gains of approximately $5 million from these disposals.
- Finalized the financing arrangements for three out of the five newbuild vessels ordered from Sungdong Shipbuilding & Marine Engineering Co., Ltd. of Korea, and chartered under long-term time charter agreements with members of the Evergreen Group, with a consortium of European and US financial institutions.
- Finalized the financing arrangements for the last two out of the five newbuild vessels ordered from Sungdong Shipbuilding & Marine Engineering Co., Ltd. of Korea, and chartered under long-term time charter agreements with members of the Evergreen Group, with a consortium of Asian and European financial institutions.
- Concluded a loan facility for up to $120 million, with an availability period until the end of the third quarter 2012, where certain of the currently unencumbered vessels will be used as collateral. The facility, entered into with a major European financial institution, is intended to be used for general corporate purposes and growth opportunities.
- On October 5th our container vessel Rena ran aground the Astrolabe Reef off New Zealand sustaining significant damage. The ship was fully certified. The company and vessel's underwriters have appointed the best professional responders, salvors and experts and are co-operating with the New Zealand authorities to control and minimize the consequences of this incident. The vessel has all internationally mandated insurances for pollution, salvage, clean up response, hull and machinery and third party claims with the Swedish Club, a member of the International Group of Protection and Indemnity Clubs and one of the world's most experienced and respected mutual marine insurers. On October 19th the vessel was determined to be a Constructive Total Loss for insurance purposes. The incident will have a financial impact on the Company, but due to the above-noted insurances which are in place, we currently expect this to be limited.
Dividend Announcements
- As previously announced on July 18, 2011, management recommended to the Board of Directors an 8% dividend increase, beginning with the third quarter 2011 dividend. On October 11, 2011, the Board of Directors approved management's recommendation and declared an increased dividend for the third quarter ended September 30, 2011, of $0.27 per share, from $0.25 per share, payable on November 7, 2011 to stockholders of record at the close of trading of the Company's common stock on the New York Stock Exchange on October 21, 2011.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
"During the third quarter of the year, the Company generated positive results."
"On the business development front, we acquired two secondhand vessels, which were chartered back to first class charterers, extended the charter of six ships on a forward basis and sold two vessels. All these transactions have enhanced shareholder value."
"On the financing front, we have now concluded the funding for the entirety of our newbuilding program. The latest loan agreements signed with European, Asian, and US banks provide for 80% leverage at very attractive terms. At the same time, we are taking advantage of the current low interest rate environment by hedging our debt commitments on a forward basis, thereby fixing our funding costs and adding to our cash flow visibility. In addition, we have recently concluded a loan facility of up to $ 120 million, where certain of our currently unencumbered assets will be used as collateral. The facility has an availability period until the end of the third quarter of 2012 and is intended to be used for general corporate purposes and fleet development."
"Consistent with management's recommendation announced in July, the Board of Directors approved an 8% dividend increase beginning with the third quarter."
"To close, I would like to refer to the incident of c/v Rena. From the first moment, we have been transparent and cooperative in order to find the causes of the accident. Together with our managers and insurance underwriters, we have engaged salvors, contractors and other experts in doing everything we can in order to minimize the effects of the incident."
| Financial Summary | |||||||||||||
| Nine-month period ended September 30, |
Three-month period ended September 30, |
||||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share amounts): | 2010 | 2011 | 2010 | 2011 | |||||||||
| (Unaudited) | |||||||||||||
| Voyage revenue | $ | 267,464 | $ | 280,165 | $ | 88,640 | $ | 99,886 | |||||
| Accrued charter revenue (1) | $ | (14,624 | ) | $ | 23,218 | $ | 3,788 | $ | 7,776 | ||||
| Voyage revenue adjusted on a cash basis (2) | $ | 252,840 | $ | 303,383 | $ | 92,428 | $ | 107,662 | |||||
| Adjusted EBITDA (3) | $ | 167,381 | $ | 199,998 | $ | 64,669 | $ | 72,891 | |||||
| Adjusted Net Income (3) | $ | 55,727 | $ | 80,168 | $ | 25,089 | $ | 30,914 | |||||
| Weighted Average number of shares | 47,000,000 | 60,300,000 | 47,000,000 | 60,300,000 | |||||||||
| Adjusted Earnings per share (3) | $ | 1.19 | $ | 1.33 | $ | 0.53 | $ | 0.51 | |||||
| EBITDA (3) | $ | 181,075 | $ | 181,340 | $ | 63,365 | $ | 59,368 | |||||
| Net Income | $ | 69,421 | $ | 61,510 | $ | 23,785 | $ | 17,391 | |||||
| Weighted Average number of shares | 47,000,000 | 60,300,000 | 47,000,000 | 60,300,000 | |||||||||
| Earnings per share | $ | 1.48 | $ | 1.02 | $ | 0.51 | $ | 0.29 | |||||
| (1) | Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. | |
| (2) | Voyage revenue adjusted on a cash basis represents Voyage revenue after cash changes in "Accrued charter revenue" deriving from escalating charter rates under which certain of our vessels operate. 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 and the nine-month periods ended September 30, 2011 and September 30, 2010. 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 | ||||||||||||||||
| Nine-month period ended September 30, |
Three-month period ended September 30, |
|||||||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share data) | 2010 | 2011 | 2010 | 2011 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| Net Income | $ | 69,421 | $ | 61,510 | $ | 23,785 | $ | 17,391 | ||||||||
| Accrued charter revenue | (14,624 | ) | 23,218 | 3,788 | 7,776 | |||||||||||
| Gain on sale of vessels | (9,588 | ) | (10,771 | ) | (1,735 | ) | - | |||||||||
| Realized (Gain) Loss on Euro/USD forward contracts | 1,555 | (1,566 | ) | 470 | (764 | ) | ||||||||||
| Gain (loss) on derivative instruments | 8,963 | 6,580 | (1,219 | ) | 6,511 | |||||||||||
| Initial purchases of consumable stores for newly acquired vessels | - | 1,197 | - | - | ||||||||||||
| Adjusted Net income | $ | 55,727 | $ | 80,168 | $ | 25,089 | $ | 30,914 | ||||||||
| Adjusted Earnings per Share | $ | 1.19 | $ | 1.33 | $ | 0.53 | $ | 0.51 | ||||||||
| Weighted average number of shares | 47,000,000 | 60,300,000 | 47,000,000 | 60,300,000 | ||||||||||||
Adjusted Net income and Adjusted Earnings per Share represent net income before gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, non-cash changes in "Accrued charter revenue" deriving from escalating charter rates under which certain of our vessels operate and the cash of partial purchases of consumable shares for newly acquired vessels. "Accrued charter revenue" is attributed to the time 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 Adjusted EBITDA | ||||||||||||||||
| Nine-month period ended September 30, |
Three-month period ended September 30, |
|||||||||||||||
| (Expressed in thousands of U.S. dollars) | 2010 | 2011 | 2010 | 2011 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| Net Income | $ | 69,421 | $ | 61,510 | $ | 23,785 | $ | 17,391 | ||||||||
| Interest and finance costs | 54,105 | 55,953 | 19,921 | 19,847 | ||||||||||||
| Interest income | (1,161 | ) | (354 | ) | (525 | ) | (45 | ) | ||||||||
| Depreciation | 52,573 | 58,092 | 18,126 | 20,079 | ||||||||||||
| Amortization of dry-docking and special survey costs | 6,137 | 6,139 | 2,058 | 2,096 | ||||||||||||
| EBITDA | 181,075 | 181,340 | 63,365 | 59,368 | ||||||||||||
| Accrued charter revenue | (14,624 | ) | 23,218 | 3,788 | 7,776 | |||||||||||
| Gain on sale of vessels | (9,588 | ) | (10,771 | ) | (1,735 | ) | - | |||||||||
| Realized (Gain) Loss on Euro/USD forward contracts | 1,555 | (1,566 | ) | 470 | (764 | ) | ||||||||||
| Gain (loss) on derivative instruments | 8,963 | 6,580 | (1,219 | ) | 6,511 | |||||||||||
| Initial purchases of consumable stores for newly acquired vessels | - | 1,197 | - | - | ||||||||||||
| Adjusted EBITDA | $ | 167,381 | $ | 199,998 | $ | 64,669 | $ | 72,891 | ||||||||
EBITDA represents net income before interest and finance costs, interest income, depreciation and amortization of deferred dry-docking & special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation, amortization of deferred dry-docking & special survey costs, gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, non-cash changes in "Accrued charter revenue" deriving from escalating charter rates under which certain of our vessels operate and the cash of partial purchases of consumable shares for newly acquired vessels. "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 September 30, 2011 compared to the three-month period ended September 30, 2010
During the three-month periods ended September 30, 2011 and 2010, we had an average of 48.5 and 41.9 vessels, respectively, in our fleet. In the three-month period ended September 30, 2011, we acquired one secondhand vessel with a TEU capacity of 5,060. In the three-month period ended September 30, 2010, we sold one vessel with a TEU capacity of 1,466. In the three-month periods ended September 30, 2011 and 2010, our fleet ownership days totaled 4,460 and 3,857 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 September 30, | Change | Percentage Change |
||||||||||||
| 2010 | 2011 | ||||||||||||||
| Voyage revenue | $ | 88.6 | $ | 99.9 | $ | 11.3 | 12.8 | % | |||||||
| Voyage expenses | (0.5 | ) | (0.8 | ) | 0.3 | 60.0 | % | ||||||||
| Voyage expenses - related parties | - | (0.8 | ) | 0.8 | 100.0 | % | |||||||||
| Vessels operating expenses | (25.0 | ) | (27.6 | ) | 2.6 | 10.4 | % | ||||||||
| General and administrative expenses | (0.1 | ) | (1.1 | ) | 1.0 | 1,000.0 | % | ||||||||
| Management fees - related parties | (2.7 | ) | (3.8 | ) | 1.1 | 40.7 | % | ||||||||
| Amortization of dry-docking and special survey costs | (2.1 | ) | (2.1 | ) | - | - | |||||||||
| Depreciation | (18.1 | ) | (20.1 | ) | 2.0 | 11.0 | % | ||||||||
| Gain on sale of vessels | 1.7 | - | (1.7 | ) | (100.0 | %) | |||||||||
| Foreign exchange gains / (losses) | 0.1 | (0.1 | ) | (0.2 | ) | (200.0 | %) | ||||||||
| Interest income | 0.6 | 0.1 | (0.5 | ) | (83.3 | %) | |||||||||
| Interest and finance costs | (19.9 | ) | (19.8 | ) | (0.1 | ) | (0.5 | %) | |||||||
| Other | - | 0.1 | 0.1 | 100.0 | % | ||||||||||
| Gain (loss) on derivative instruments | 1.2 | (6.5 | ) | $ | (7.7 | ) | (641.7 | %) | |||||||
| Net Income | $ | 23.8 | $ | 17.4 | (6.4 | ) | (26.9 | %) | |||||||
| (Expressed in millions of U.S. dollars, except percentages) |
Three-month period ended September 30, | Change | Percentage Change |
|||||||||
| 2010 | 2011 | |||||||||||
| Voyage revenue | $ | 88.6 | $ | 99.9 | $ | 11.3 | 12.8 | % | ||||
| Accrued charter revenue | 3.8 | 7.8 | 4.0 | 105.3 | % | |||||||
| Voyage revenue adjusted on a cash basis | $ | 92.4 | $ | 107.7 | $ | 15.3 | 16.6 | % | ||||
| Fleet operational data | Three-month period ended September 30, | Percentage Change |
||||||||
| 2010 | 2011 | Change | ||||||||
| Average number of vessels | 41.9 | 48.5 | 6.6 | 15.8 | % | |||||
| Ownership days | 3,857 | 4,460 | 603 | 15.6 | % | |||||
| Number of vessels under dry-docking | 3 | - | (3 | ) | ||||||
Voyage Revenue
Voyage revenue increased by 12.8%, or $11.3 million, to $99.9 million during the three-month period ended September 30, 2011, from $88.6 million during the three-month period ended September 30, 2010. This increase is due mainly to increased average number of vessels in our fleet during the three month period ended September 30, 2011 compared to the three month period ended September 30, 2010. Voyage revenues adjusted on a cash basis, increased by 16.6%, or $15.3 million, to $107.7 million during the three-month period ended September 30, 2011, from $92.4 million during the three-month period ended September 30, 2010. The increase is attributable to the increased ownership days of our fleet, as well as to the increased charter hire received in accordance with certain escalation clauses of our charters, during the three-month period ended September 30, 2011 compared to the three-month period ended September 30, 2010.
Voyage Expenses
Voyage expenses increased by 60.0%, or $0.3 million, to $0.8 million during the three-month period ended September 30, 2011, from $0.5 million during the three-month period ended September 30, 2010. The increase was primarily attributable to the third party commissions charged to us in the three-month period ended September 30, 2011 compared to the three-month period ended September 30, 2010.
Voyage Expenses - related parties
Voyage expenses - related parties in the amount of $0.8 million represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 4, 2010 (Initial Public Offering completion date).
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 10.4%, or $2.6 million, to $27.6 million during the three-month period ended September 30, 2011, from $25.0 million during the three-month period ended September 30, 2010. The increase is attributable to the increase of 15.6% of the ownership days of our fleet partly offset by more efficient logistics achieved in the three-month period ended September 30, 2011 compared to the three-month period ended September 30, 2010.
General and Administrative Expenses
General and administrative expenses increased by 1,000.0%, or $1.0 million, to $1.1 million during the three-month period ended September 30, 2011, from $0.1 million during the three-month period ended September 30, 2010. The increase in the three-month period ended September 30, 2011 was mainly attributable to increased public-company related expenses charged to us (i.e. legal, audit and Directors and Officers insurance) compared to the three-month period ended September 30, 2010 when the Company was private, including $0.25 million for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 4, 2010 (Initial Public Offering completion date).
Management Fees - related parties
Management fees paid to our managers increased by 40.7%, or $1.1 million, to $3.8 million during the three-month period ended September 30, 2011, from $2.7 million during the three-month period ended September 30, 2010. The increase was attributable to the new daily management fee charged by our managers subsequent to the completion of our Initial Public Offering on November 4, 2010 and to the increased fleet ownership days for the three-month period ended September 30, 2011, compared to the three-month period ended September 30, 2010.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $2.1 million for the three-month period ended September 30, 2011 and for the three-month period ended September 30, 2010. During the three-month period ended September 30, 2011 no vessel underwent her special survey. During the three-month period ended September 30, 2010 three vessels underwent their special survey.
Depreciation
Depreciation expense increased by 11.0%, or $2.0 million, to $20.1 million during the three-month period ended September 30, 2011, from $18.1 million during the three-month period ended September 30, 2010. The increase was primarily attributable to the depreciation expense charged for the two container vessels that were delivered to us in November 2010, to the eight container vessels that were delivered to us during the three-month period ended March 31, 2011 and to the one container vessel delivered to us during the three month period ended September 30, 2011.
Gain on Sale of Vessels
In the three-month period ended September 30, 2011, no vessels were sold. In the three-month period ended September 30, 2010, we recorded a gain of $1.7 million from the sale of vessel MSC Sicily.
Foreign Exchange Gains / (Losses)
Foreign exchange gains/(losses) were losses of $0.1 million during the three-month period ended September 30, 2011, compared to gains of $0.1 million during the three-month period ended September 30, 2010, representing a change of $0.2 million resulted from unfavorable currency exchange rate movements between the U.S. dollar and the Euro.
Interest Income
During the three-month period ended September 30, 2011, interest income decreased by 83.3%, or $0.5 million, to $0.1 million, from $0.6 million during the three-month period ended September 30, 2010. The change in interest income was mainly due to the decreased interest rates on our cash deposits in interest bearing accounts during the three-month period ended September 30, 2011 compared to the three month-period ended September 30, 2010.
Interest and Finance Costs
Interest and finance costs decreased by 0.5%, or $0.1 million, to $19.8 million during the three-month period ended September 30, 2011, from $19.9 million during the three-month period ended September 30, 2010. The decrease is partly attributable to the capitalized interest with regards to our newbuilding program.
Gain (Loss) on Derivative Instruments
The fair value of our 28 interest rate derivative instruments which were outstanding as of September 30, 2011 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2011, the fair value of these 28 interest rate derivative instruments in aggregate amounted to a liability of $173.3 million. Twenty-seven of the 28 interest rate derivative instruments that were outstanding as at September 30, 2011, qualified for hedge accounting and the effective portion in the change of their fair value is recorded in "Other comprehensive loss" in stockholders' equity. For the three-month period ended September 30, 2011, a loss of $52.8 million has been included in "Other comprehensive loss" in stockholders' equity and a loss of $4.7 million has been included in "Gain (loss) 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 September 30, 2011.
| Cash Flows | |||||||
| Three-month period ended September 30, 2011 and September 30, 2010 | |||||||
| Condensed cash flows | Three-month period ended September 30, |
||||||
| (Expressed in millions of U.S. dollars) | 2010 | 2011 | |||||
| Net Cash Provided by Operating Activities | $ | 32.9 | $ | 51.3 | |||
| Net Cash Provided By (Used in) Investing Activities | $ | 11.7 | $ | (61.1 | ) | ||
| Net Cash Provided By (Used in) Financing Activities | $ | (16.1 | ) | $ | 10.7 | ||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended September 30, 2011 increased by $18.4 million to $51.3 million, compared to $32.9 million for the three-month period ended September 30, 2010. The increase was primarily attributable to (a) increased cash from operations of $15.3 million deriving from increased number of ownership days and escalating charter rates, (b) to decreased dry-docking payments of $2.1 million and (c) 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 $8.2 million.
Net Cash Provided By (Used in) Investing Activities
Net cash used in investing activities was $61.1 million in the three-month period ended September 30, 2011, which primarily consists of (a) $55.0 million payments for the purchase of MSC Romanos, (b) $6.0 million advance payment for the acquisition of MSC Viviana scheduled to be delivered to us in the fourth quarter of 2011 and (c) $1.8 million in aggregate advance payments we received for the sale of two vessels scheduled to be delivered to their new owners in the fourth quarter of 2011.
Net cash provided by investing activities was $11.7 million in the three-month period ended September 30, 2010, which consists of (a) $8.0 million we received from the sale of government securities and (b) $3.7 million we received from the sale of one vessel.
Net Cash Provided By (Used in) Financing Activities
Net cash provided by financing activities was $10.7 million in the three-month period ended September 30, 2011, which mainly consists of (a) $34.6 million of indebtedness that we repaid, (b) $61.4 million we drew down from two of our credit facilities, and (c) $15.1 million we paid for dividends to our stockholders for the second quarter of the year 2011.
Net cash used in financing activities was $16.1 million in the three-month period ended September 30, 2010, which mainly consists of (a) $19.4 million of indebtedness that we repaid and (b) $2.4 million received from our stockholders in exchange of the issuance of 24,000,000 shares to them.
Results of Operations
Nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010
During the nine-month periods ended September 30, 2011 and 2010, we had an average of 47.6 and 42.6 vessels, respectively, in our fleet. In the nine-month period ended September 30, 2011, we accepted delivery of nine secondhand vessels with an aggregate TEU capacity of 22,518, and we sold three vessels with an aggregate TEU capacity of 4,914. In the nine-month period ended September 30, 2010, we acquired the vessel Hyundai Navarino with a TEU capacity of 8,531, and we sold four vessels with an aggregate TEU capacity of 10,766. In the nine-month periods ended September 30, 2011 and 2010, our fleet ownership days totaled 12,991 and 11,624 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) |
Nine-month period ended September 30, | Change | Percentage Change |
||||||||||||
| 2010 | 2011 | ||||||||||||||
| Voyage revenue | $ | 267.5 | $ | 280.2 | $ | 12.7 | 4.7 | % | |||||||
| Voyage expenses | (1.6 | ) | (3.3 | ) | 1.7 | 106.3 | % | ||||||||
| Voyage expenses - related parties | - | (2.1 | ) | 2.1 | 100.0 | % | |||||||||
| Vessels operating expenses | (76.7 | ) | (83.3 | ) | 6.6 | 8.6 | % | ||||||||
| General and administrative expenses | (0.8 | ) | (3.7 | ) | 2.9 | 362.5 | % | ||||||||
| Management fees - related parties | (8.2 | ) | (11.3 | ) | 3.1 | 37.8 | % | ||||||||
| Amortization of dry-docking and special survey costs | (6.1 | ) | (6.1 | ) | - | - | |||||||||
| Depreciation | (52.6 | ) | (58.1 | ) | 5.5 | 10.5 | % | ||||||||
| Gain on sale of vessels | 9.6 | 10.8 | 1.2 | 12.5 | % | ||||||||||
| Foreign exchange gains / (losses) | - | - | - | - | |||||||||||
| Interest income | 1.1 | 0.4 | (0.7 | ) | (63.6 | %) | |||||||||
| Interest and finance costs | (54.1 | ) | (56.0 | ) | 1.9 | 3.5 | % | ||||||||
| Other | 0.3 | 0.6 | 0.3 | 100.0 | % | ||||||||||
| Gain (loss) on derivative instruments | (9.0 | ) | (6.6 | ) | $ | (2.4 | ) | (26.7 | %) | ||||||
| Net Income | $ | 69.4 | $ | 61.5 | (7.9 | ) | (11.4 | %) | |||||||
| (Expressed in millions of U.S. dollars, except percentages) |
Nine-month period ended September 30, | Change | Percentage Change |
||||||||||
| 2010 | 2011 | ||||||||||||
| Voyage revenue | $ | 267.5 | $ | 280.2 | $ | 12.7 | 4.7 | % | |||||
| Accrued charter revenue | (14.6 | ) | 23.2 | 37.8 | 258.9 | % | |||||||
| Voyage revenue adjusted on a cash basis | $ | 252.9 | $ | 303.4 | $ | 50.5 | 20.0 | % | |||||
| Fleet operational data | Nine-month period ended September 30, | Percentage Change |
||||||||
| 2010 | 2011 | Change | ||||||||
| Average number of vessels | 42.6 | 47.6 | 5.0 | 11.7 | % | |||||
| Ownership days | 11,624 | 12,991 | 1,367 | 11.8 | % | |||||
| Number of vessels under dry-docking | 9 | 8 | (1 | ) | ||||||
Voyage Revenue
Voyage revenue increased by 4.7%, or $12.7 million, to $280.2 million during the nine-month period ended September 30, 2011, from $267.5 million during the nine-month period ended September 30, 2010. This increase is due mainly to increased average number of vessels in our fleet during the nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010. Voyage revenues adjusted on a cash basis, increased by 20.0%, or $50.5 million, to $303.4 million during the nine-month period ended September 30, 2011, from $252.9 million during the nine-month period ended September 30, 2010. The increase is attributable to the increased ownership days of our fleet, as well as to the increased charter hire received in accordance with certain escalation clauses of our charters, during the nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010.
Voyage Expenses
Voyage expenses increased by 106.3%, or $1.7 million, to $3.3 million during the nine-month period ended September 30, 2011, from $1.6 million during the nine-month period ended September 30, 2010. The increase was primarily attributable to (a) the off-hire expenses, mainly to bunkers consumption, of the eight out of nine container vessels which were delivered to us by their sellers in the nine-month period ended September 30, 2011 and the three vessels sold in the nine-month period ended September 30, 2011, and (b) the third party commissions charged to us in the nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010.
Voyage Expenses - related parties
Voyage expenses - related parties in the amount of $2.1 million represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 4, 2010 (Initial Public Offering completion date).
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 8.6%, or $6.6 million, to $83.3 million during the nine-month period ended September 30, 2011, from $76.7 million during the nine-month period ended September 30, 2010. The increase is attributable to the increase of 11.8% of the ownership days of our fleet partly offset by more efficient logistics achieved in the nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010.
General and Administrative Expenses
General and administrative expenses increased by 362.5%, or $2.9 million, to $3.7 million during the nine-month period ended September 30, 2011, from $0.8 million during the nine-month period ended September 30, 2010. The increase in the nine-month period ended September 30, 2011 was mainly attributable to increased public-company related expenses charged to us (i.e. legal, audit and Directors and Officers insurance) compared to the nine-month period ended September 30, 2010, when the Company was private, including $0.75 million for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 4, 2010 (Initial Public Offering completion date).
Management Fees - related parties
Management fees paid to our managers increased by 37.8%, or $3.1 million, to $11.3 million during the nine-month period ended September 30, 2011, from $8.2 million during the nine-month period ended September 30, 2010. The increase was attributable to the new daily management fee charged by our managers subsequent to the completion of our Initial Public Offering on November 4, 2010 and to the increased fleet ownership days for the nine-month period ended September 30, 2011, compared to the nine-month period ended September 30, 2010.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $6.1 million for the nine-month period ended September 30, 2011 and for the nine-month period ended September 30, 2010. During the nine-month period ended September 30, 2011, eight vessels underwent special survey. During the nine-month period ended September 30, 2010, nine vessels underwent special survey.
Depreciation
Depreciation expense increased by 10.5%, or $5.5 million, to $58.1 million during the nine-month period ended September 30, 2011, from $52.6 million during the nine-month period ended September 30, 2010. The increase was primarily attributable to the depreciation expense charged for the two container vessels that were delivered to us in November 2010 and to the nine container vessels that were delivered to us during the nine-month period ended September 30, 2011. Three out of the four vessels which were sold in the nine-month period ended September 30, 2010 were fully depreciated as of the date of their disposal.
Gain on Sale of Vessels
In the nine-month period ended September 30, 2011, we recorded a gain of $10.8 million from the sale of vessels MSC Sierra, MSC Namibia and MSC Sudan. In the nine-month period ended September 30, 2010, we recorded a gain of $9.6 million from the sale of the vessels MSC Germany, MSC Toba, MSC Mexico and MSC Sicily.
Foreign Exchange Gains / (Losses)
Foreign exchange gains/(losses) were $nil during the nine-month periods ended September 30, 2011 and 2010.
Interest Income
During the nine-month period ended September 30, 2011, interest income decreased by 63.6%, or $0.7 million, to $0.4 million, from $1.1 million during the nine-month period ended September 30, 2010. The change in interest income was mainly due to the decreased interest rates on our cash deposits in interest bearing accounts during the nine-month period ended September 30, 2011 compared to the nine-month period ended September 30, 2010.
Interest and Finance Costs
Interest and finance costs increased by 3.5%, or $1.9 million, to $56.0 million during the nine-month period ended September 30, 2011, from $54.1 million during the nine-month period ended September 30, 2010. The increase is partly attributable to increased financing costs and commitment fees charged to us mainly in relation to new credit facilities we entered into with regards to our newbuilding program partly off-set by the capitalized interest in relation with our newbuilding program.
Gain (Loss) on Derivative Instruments
The fair value of our 28 derivative instruments which were outstanding as of September 30, 2011 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2011, the fair value of these 28 interest rate swaps in aggregate amounted to a liability of $173.3 million. Twenty-seven of the 28 interest rate derivative instruments that were outstanding as at September 30, 2011, qualified for hedge accounting and the effective portion in the change of their fair value is recorded in "Other comprehensive loss" in stockholders' equity. For the nine-month period ended September 30, 2011, a loss of $59.0 million has been included in "Other comprehensive loss" in stockholders' equity and a loss of $6.4 million has been included in "Gain (loss) on derivative instruments" in the consolidated statement of income, resulting from the fair market value change of the interest rate swaps during the nine-month period ended September 30, 2011.
| Cash Flows | ||||||||
| Nine-month period ended September 30, 2011 and September 30, 2010 | ||||||||
| Condensed cash flows | Nine-month period ended September 30, |
|||||||
| (Expressed in millions of U.S. dollars) | 2010 | 2011 | ||||||
| Net Cash Provided by Operating Activities | $ | 89.0 | $ | 134.4 | ||||
| Net Cash Provided By (Used in) Investing Activities | $ | 2.5 | $ | (256.6 | ) | |||
| Net Cash Provided By (Used in) Financing Activities | $ | (72.8 | ) | $ | 33.1 | |||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the nine-month period ended September 30, 2011 increased by $45.4 million to $134.4 million, compared to $89.0 million for the nine-month period ended September 30, 2010. The increase was primarily attributable to (a) increased cash from operations of $50.5 million deriving from increased ownership days, escalating charter rates and the cash contributed by the additional eleven vessels we acquired, (b) 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 $9.7 million and (c) decreased dry-docking payments of $4.8 million.
Net Cash Provided by (Used in) Investing Activities
Net cash used in investing activities was $256.6 million in the nine-month period ended September 30, 2011, which consists of (a) $147.3 million advance payments and other capitalized costs for the construction and purchase of ten newbuild vessels, (b) $130.2 million in payments for the acquisition of nine secondhand vessels, (c) $6.0 million in advance payment for the acquisition of one second hand vessel scheduled to be delivered to us in the fourth quarter of 2011, (d) $19.0 million we received for the sale of three vessels, (e) $6.1 million we received from the sale of governmental bonds and (f) $1.8 million in aggregate we received as advances for the sale of two vessels scheduled to be delivered to their new owners in the fourth quarter of 2011.
Net cash provided by investing activities was $2.5 million in the nine-month period ended September 30, 2010, which consists of (a) $28.3 million in payments to the shipyard for the construction cost of Hyundai Navarino, (b) $22.7 million we received from the sale of four vessels and (c) $8.0 million we received from the sale of government securities.
Net Cash Provided By (Used in) Financing Activities
Net cash provided by financing activities was $33.1 million in the nine-month period ended September 30, 2011, which mainly consists of (a) $83.9 million of indebtedness that we repaid, (b) $169.0 million we drew down from four of our credit facilities and (c) $45.2 million, in aggregate, we paid for dividends to our stockholders for the fourth quarter of the year 2010, the first quarter of the year 2011 and the second quarter of the year 2011.
Net cash used in financing activities was $72.8 million in the nine-month period ended September 30, 2010, which mainly consists of (a) $63.5 million of indebtedness that we repaid and (b) $10.0 million we paid for dividends to our stockholders.
Liquidity and Capital Expenditures
Cash and cash equivalents
As of September 30, 2011, we had a total cash liquidity of $114.1 million, consisting of cash, cash equivalents and restricted cash.
Undrawn Credit Facilities
As of September 30, 2011 we had a total of undrawn credit facilities of $81.5 million.
As of October 20, 2011, we had a total of undrawn credit facilities of $159.5 million.
Debt-free vessels
As of October 20, 2011, the following vessels were free of debt:
| Unencumbered Vessels in the water | ||
| (refer to fleet list in page 16 for full charter details) | ||
| Vessel Name | Year Built |
TEU Capacity |
| HYUNDAI NAVARINO | 2010 | 8,531 |
| SEALAND MICHIGAN | 2000 | 6,648 |
| MSC AUSTRIA | 1984 | 3,584 |
| KARMEN | 1991 | 3,351 |
| MARINA | 1992 | 3,351 |
| KONSTANTINA | 1992 | 3,351 |
| AKRITAS | 1987 | 3,152 |
| MSC CHALLENGER | 1986 | 2,633 |
| MSC SUDAN II | 1992 | 2,024 |
| MSC NAMIBIA II | 1991 | 2,023 |
| MSC SIERRA II | 1991 | 2,023 |
| MSC PYLOS | 1991 | 2,020 |
| PROSPER | 1996 | 1,504 |
| MSC TUSCANY | 1978 | 1,468 |
| MSC FADO | 1978 | 1,181 |
| ZAGORA | 1995 | 1,162 |
| HORIZON | 1991 | 1,068 |
Capital commitments
As of October 20, 2011, we had outstanding commitments relating to our contracted newbuilds aggregating $810.7 million payable in installments until the vessels are delivered. In addition we had $30.0 million outstanding commitment relating to the acquisition of the secondhand vessel MSC Ulsan payable in full upon delivery of the vessel.
Conference Call details
On Thursday, October 27, 2011 at 8:30 a.m. EDT, 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) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "Costamare."
A replay of the conference call will be available until November 3, 2011. 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: 25306424#
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. Costamare Inc. has more than 36 years of history in the international shipping industry and a fleet of 60 containerships, with a total capacity of approximately 333,000 TEU, including 10 newbuilds on order and one secondhand vessel to be delivered. Costamare Inc.'s common shares trade on The New York Stock Exchange under the symbol "CMRE."
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 October 20, 2011, about our fleet of 60 containerships. 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 Hire (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 | HYUNDAI NAVARINO | HMM | 2010 | 8,531 | 1.2 years | 44,000 | March 2012 | 44,000 | |||||
| 7 | MAERSK KAWASAKI(i) | A.P. Moller-Maersk | 1997 | 7,403 | 10 years | 37,000 | December 2017 | 37.000 | |||||
| 8 | MAERSK KURE(i) | A.P. Moller-Maersk | 1996 | 7,403 | 10 years | 37,000 | December 2017 | 37.000 | |||||
| 9 | MAERSK KOKURA(i) | A.P. Moller-Maersk | 1997 | 7,403 | 10 years | 37,000 | February 2018 | 37,000 | |||||
| 10 | MSC METHONI | MSC | 2003 | 6,724 | 10 years | 29,000 | September 2021 | 29,000 | |||||
| 11 | SEALAND NEW YORK | A.P. Moller-Maersk | 2000 | 6,648 | 11 years | 34,875(3) | March 2018 | 27,946 | |||||
| 12 | MAERSK KOBE | A.P. Moller-Maersk | 2000 | 6,648 | 11 years | 42,679(4) | May 2018 | 31,219 | |||||
| 13 | SEALAND WASHINGTON | A.P. Moller-Maersk | 2000 | 6,648 | 11 years | 34,875(5) | June 2018 | 28,053 | |||||
| 14 | SEALAND MICHIGAN | A.P. Moller-Maersk | 2000 | 6,648 | 11 years | 29,875(6) | August 2018 | 25,912 | |||||
| 15 | SEALAND ILLINOIS | A.P. Moller-Maersk | 2000 | 6,648 | 11 years | 34,875(7) | October 2018 | 28,146 | |||||
| 16 | MAERSK KOLKATA | A.P. Moller-Maersk | 2003 | 6,644 | 11 years | 42,990(8) | November 2019 | 32,710 | |||||
| 17 | MAERSK KINGSTON | A.P. Moller-Maersk | 2003 | 6,644 | 11 years | 42,961(9) | February 2020 | 32,895 | |||||
| 18 | MAERSK KALAMATA | A.P. Moller-Maersk | 2003 | 6,644 | 11 years | 42,918(10) | April 2020 | 32,950 | |||||
| 19 | MSC ROMANOS | MSC | 2003 | 5,050 | 5.3 years | 28,000 | November 2016 | 28,000 | |||||
| 20 | ZIM NEW YORK | ZIM | 2002 | 4,992 | 10 years | 18,189(11) | July 2012 | 43,070 | |||||
| 21 | ZIM SHANGHAI | ZIM | 2002 | 4,992 | 10 years | 18,189(12) | August 2012 | 39,962 | |||||
| 22 | ZIM PIRAEUS(ii) | ZIM | 2004 | 4,992 | 10 years | 20,013(13) | March 2014 | 26,062 | |||||
| 23 | OAKLAND EXPRESS | Hapag Lloyd | 2000 | 4,890 | 8 years | 35,000(14) | September 2016 | 30,682 | |||||
| 24 | NEW YORK EXPRESS | Hapag Lloyd | 2000 | 4,890 | 8 years | 35,000(14) | October 2016 | 30,677 | |||||
| 25 | SINGAPORE EXPRESS | Hapag Lloyd | 2000 | 4,890 | 8 years | 35,000(14) | July 2016 | 30,687 | |||||
| 26 | MSC MANDRAKI | MSC | 1988 | 4,828 | 7.8 years | 22,200(15) | August 2017 | 20,014 | |||||
| 27 | MSC MYKONOS | MSC | 1988 | 4,828 | 8.2 years | 20,000 | September 2017 | 20,000 | |||||
| 28 | MSC ULSAN(iii) | MSC | 2002 | 4,312 | 5.3 years | 16,500 | March 2017 | 16,500 | |||||
| 29 | MSC ANTWERP | MSC | 1993 | 3,883 | 4.3 years | 17,500 | August 2013 | 17,500 | |||||
| 30 | MSC WASHINGTON | MSC | 1984 | 3,876 | 3.2 years | 20,000(16) | February 2013 | 17,554 | |||||
| 31 | MSC KYOTO | MSC | 1981 | 3,876 | 3.1 years | 20,000(17) | June 2013 | 17,530 | |||||
| 32 | MSC AUSTRIA | MSC | 1984 | 3,584 | 9.5 years | 21,100(18) | September 2018 | 14,173 | |||||
| 33 | KARMEN | Sea Consortium | 1991 | 3,351 | 1 year | 19,400 | April 2012 | 19,400 | |||||
| 34 | MARINA | PO Hainan | 1992 | 3,351 | 1 year | 18,000 | March 2012 | 18,000 | |||||
| 35 | KONSTANTINA | Sea Consortium | 1992 | 3,351 | 0.7 years | 17,400 | February 2012 | 17,400 | |||||
| 36 | AKRITAS | Hapag Lloyd | 1987 | 3,152 | 4 years | 12,500 | August 2014 | 12,500 | |||||
| 37 | GARDEN(iv) | Evergreen | 1984 | 2,922 | 5 years | 15,200 | November 2012 | 15,200 | |||||
| 38 | GENIUS I(iv) | Evergreen | 1984 | 2,922 | 3.3 years | 15,200 | November 2012 | 15,200 | |||||
| 39 | GATHER(iv) | Evergreen | 1984 | 2,922 | 5 years | 15,200 | November 2012 | 15,200 | |||||
| 40 | GIFTED(v) | Evergreen | 1984 | 2,922 | 2.4 years | 15,700 | December 2011 | 15,700 | |||||
| 41 | MSC CHALLENGER | MSC | 1986 | 2,633 | 4.8 years | 10,000 | July 2015 | 10,000 | |||||
| 42 | MSC SUDAN II | MSC | 1992 | 2,024 | 6 years | 12,000(19) | June 2014 | 11,643 | |||||
| 43 | MSC NAMIBIA II | MSC | 1991 | 2,023 | 6.8 years | 14,000(20) | July 2014 | 11,647 | |||||
| 44 | MSC SIERRA II | MSC | 1991 | 2,023 | 5.7 years | 14,000(21) | June 2014 | 11,609 | |||||
| 45 | MSC PYLOS | MSC | 1991 | 2,020 | 3 years | 9,200(22) | January 2014 | 11,138 | |||||
| 46 | PROSPER | TS Lines | 1996 | 1,504 | 1 year | 10,500 | March 2012 | 10,500 | |||||
| 47 | MSC TUSCANY(vi) | MSC | 1978 | 1,468 | 1.9 years | 7,920 | August 2012 | 7,920 | |||||
| 48 | MSC FADO(vi) | MSC | 1978 | 1,181 | 2 years | 7,400 | May 2012 | 7,400 | |||||
| 49 | ZAGORA | MSC | 1995 | 1,162 | 0.7 years | 7,000 | March 2012 | 7,000 | |||||
| 50 | HORIZON | OACL | 1991 | 1,068 | 7.1 years | 10,050 | April 2012 | 10,050 |
| Newbuilds | ||||||||||
| Vessel Name | Shipyard | Charterer | Expected Delivery | Approximate Capacity (TEU) |
||||||
| 1 | Hull S4010 | Sungdong Shipbuilding | MSC | 4th Quarter 2012 | 9,000 | |||||
| 2 | Hull S4011 | Sungdong Shipbuilding | MSC | 4th Quarter 2012 | 9,000 | |||||
| 3 | Hull S4020 | Sungdong Shipbuilding | Evergreen | 1st Quarter 2013 | 8,800 | |||||
| 4 | Hull S4021 | Sungdong Shipbuilding | Evergreen | 1st Quarter 2013 | 8,800 | |||||
| 5 | Hull S4022 | Sungdong Shipbuilding | Evergreen | 2nd Quarter 2013 | 8,800 | |||||
| 6 | Hull S4023 | Sungdong Shipbuilding | Evergreen | 2nd Quarter 2013 | 8,800 | |||||
| 7 | Hull S4024 | Sungdong Shipbuilding | Evergreen | 3rd Quarter 2013 | 8,800 | |||||
| 8 | H1068A | Jiangnan Changxing | MSC | November 2013 | 9,000 | |||||
| 9 | H1069A | Jiangnan Changxing | MSC | December 2013 | 9,000 | |||||
| 10 | H1070A | Jiangnan Changxing | MSC | January 2014 | 9,000 | |||||
| (1) | Charter terms and expiration dates are based on the earliest date charters could expire. | |
| (2) | This average rate is calculated based on contracted charter rates for the days remaining between October 20, 2011 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 January 1, 2012 to $30,375 and on May 8, 2014 to $26,100 per day until the earliest redelivery date. | |
| (4) | This charter rate changes on January 1, 2012 to $38,179 per day and on June 30, 2014 to $26,100 per day until the earliest redelivery date. | |
| (5) | This charter rate changes on January 1, 2012 to $30,375 and on August 24, 2014 to $26,100 per day until the earliest redelivery date. | |
| (6) | This charter rate changes on January 1, 2012 to $25,375 per day and on October 20, 2014 to $26,100 per day until the earliest redelivery date. | |
| (7) | This charter rate changes on January 1, 2012 to $30,375 per day and on December 4, 2014 to $26,100 per day until the earliest redelivery date. | |
| (8) | This charter rate changes on January 1, 2012 to $38,490 per day and on January 13, 2016 to $26,100 per day until the earliest redelivery date. | |
| (9) | This charter rate changes on January 1, 2012 to $38,461 per day and on April 28, 2016 to $26,100 per day until the earliest redelivery date. | |
| (10) | This charter rate changes on January 1, 2012 to $38,418 per day and on June 11, 2016 to $26,100 per day until the earliest redelivery date. | |
| (11) | This charter rate changes on January 1, 2012 to $16,205 per day and on July 1, 2012 to $23,150 per day until the earliest redelivery date. In addition, if the charterer does not exercise its unilateral option to extend the term, the charterer is required to make a one-time payment at the earliest redelivery of approximately $6.9 million. | |
| (12) | This charter rate changes on January 1, 2012 to $16,205 per day and on July 1, 2012 to $23,150 per day until the earliest redelivery date. In addition, if the charterer does not exercise its unilateral option to extend the term, the charterer is required to make a one-time payment at the earliest redelivery of approximately $6.9 million. | |
| (13) | This charter rate changes on January 1, 2012 to $18,150 per day, on May 8, 2012 to $18,274 per day and on January 1, 2013 to $22,150 per day until the earliest redelivery date. In addition, the charterer is required to repay the remaining amount accrued during the reduction period, or approximately $5.0 million, no later than July 2016. | |
| (14) | This charter rate changes on January 1, 2012 to $30,500 per day until the earliest redelivery. | |
| (15) | This charter rate changes on November 2, 2011 to $20,000 per day until the earliest redelivery. | |
| (16) | This charter rate changes on December 14, 2011 to $17,250 per day until the earliest redelivery date. | |
| (17) | This charter rate changes on December 19, 2011 to $17,250 per day until the earliest redelivery date. | |
| (18) | This charter rate changes on December 29, 2011 to $17,250 per day until the earliest redelivery date. As from December 1, 2012 until redelivery, hire to be minimum $13,500 per day plus 50% of the difference between the market rate and the hire rate of $13,500. Market rate to be evaluated each year based on the Hamburg ConTex type 3500TEU index published on October 1 of each year until redelivery. | |
| (19) | This charter rate changes on July 27, 2012 to $11,500 per day until the earliest redelivery date. | |
| (20) | This charter rate changes on December 17, 2011 to $11,500 per day until the earliest redelivery date. | |
| (21) | This charter rate changes on December 20, 2011 to $11,250 per day and on July 1, 2012 to $11,500 per day until the earliest redelivery date. | |
| (22) | This charter rate changes on February 28, 2012 to $11,500 per day until the earliest redelivery date. |
| (i) | Charterers have unilateral options to extend the charters of the vessels for two periods of 30 months +/-90 days at a rate of $41,700 per day. | |
| (ii) | Charterer has a unilateral option to extend the charter of the vessel for a period of 12 months +/-60 days at a rate of $27,500 per day. | |
| (iii) | The company has agreed to purchase the vessel MSC Ulsan, subject to final documentation. The vessel is expected to be delivered within the first quarter of 2012. | |
| (iv) | Charterers have unilateral options to extend the charters of the vessels for periods until 2014, at a rate of $14,000 per day. | |
| (v) | Charterers have a unilateral option to extend the charter of the vessel for a period of one year +/-30 days at a rate of $14,000 per day. | |
| (vi) | The company has agreed to sell the vessels for scrap. They are expected to be delivered to their scrap buyers within December 2011. |
| COSTAMARE INC. | ||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| Nine-months ended September 30, | Three-month ended September 30, | |||||||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share amounts) | 2010 | 2011 | 2010 | 2011 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| REVENUES: | ||||||||||||||||
| Voyage revenue | $ | 267,464 | $ | 280,165 | $ | 88,640 | $ | 99,886 | ||||||||
| EXPENSES: | ||||||||||||||||
| Voyage expenses | (1,567 | ) | (3,320 | ) | (544 | ) | (799 | ) | ||||||||
| Voyage expenses – related parties | - | (2,110 | ) | - | (753 | ) | ||||||||||
| Vessels' operating expenses | (76,723 | ) | (83,312 | ) | (24,972 | ) | (27,579 | ) | ||||||||
| General and administrative expenses | (775 | ) | (3,567 | ) | (110 | ) | (1,102 | ) | ||||||||
| Management fees - related parties | (8,181 | ) | (11,275 | ) | (2,702 | ) | (3,792 | ) | ||||||||
| Amortization of dry-docking and special survey costs | (6,137 | ) | (6,139 | ) | (2,058 | ) | (2,096 | ) | ||||||||
| Depreciation | (52,573 | ) | (58,092 | ) | (18,126 | ) | (20,079 | ) | ||||||||
| Gain on sale of vessels | 9,588 | 10,771 | 1,735 | - | ||||||||||||
| Foreign exchange gains (losses) | (38 | ) | (4 | ) | 109 | (77 | ) | |||||||||
| Operating income | $ | 131,058 | $ | 123,117 | $ | 41,972 | $ | 43,609 | ||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Interest income | $ | 1,161 | $ | 354 | $ | 525 | $ | 45 | ||||||||
| Interest and finance costs | (54,105 | ) | (55,953 | ) | (19,921 | ) | (19,847 | ) | ||||||||
| Other | 270 | 572 | (10 | ) | 95 | |||||||||||
| Gain (loss) on derivative instruments | (8,963 | ) | (6,580 | ) | 1,219 | (6,511 | ) | |||||||||
| Total other income (expenses) | $ | (61,637 | ) | $ | (61,607 | ) | $ | (18,187 | ) | $ | (26,218 | ) | ||||
| Net Income | $ | 69,421 | $ | 61,510 | $ | 23,785 | $ | 17,391 | ||||||||
| Earnings per common share, basic and diluted | $ | 1.48 | $ | 1.02 | $ | 0.51 | $ | 0.29 | ||||||||
| Weighted average number of shares, basic and diluted | 47,000,000 | 60,300,000 | 47,000,000 | 60,300,000 | ||||||||||||
| COSTAMARE INC. | ||||||||
| Consolidated Balance Sheets | ||||||||
| As of December 31, | As of September 30, | |||||||
| (Expressed in thousands of U.S. dollars) | 2010 | 2011 | ||||||
| (Audited) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 159,774 | $ | 70,613 | ||||
| Restricted cash | 5,121 | 5,094 | ||||||
| Receivables | 3,360 | 1,797 | ||||||
| Inventories | 9,534 | 11,365 | ||||||
| Due from related parties | 1,297 | 5,216 | ||||||
| Fair value of derivatives | 458 | 251 | ||||||
| Insurance claims receivable | 747 | 2,910 | ||||||
| Accrued charter revenue | 22,413 | 16,972 | ||||||
| Prepayments and other | 2,428 | 2,508 | ||||||
| Investments | 6,080 | - | ||||||
| Vessels held for sale | - | 3,147 | ||||||
| Total current assets | $ | 211,212 | $ | 119,873 | ||||
| FIXED ASSETS, NET: | ||||||||
| Advances for vessels acquisitions | $ | 3,830 | $ | 153,257 | ||||
| Vessels, net | 1,531,610 | 1,598,722 | ||||||
| Total fixed assets, net | $ | 1.535,440 | $ | 1,751,979 | ||||
| NON-CURRENT ASSETS: | ||||||||
| Deferred charges, net | $ | 30,867 | $ | 31,505 | ||||
| Restricted cash | 36,814 | 38,404 | ||||||
| Accrued charter revenue | 14,449 | - | ||||||
| Total assets | $ | 1,828,782 | $ | 1,941,761 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt | $ | 114,597 | $ | 146,661 | ||||
| Accounts payable | 4,128 | 5,861 | ||||||
| Accrued liabilities | 7,761 | 9,613 | ||||||
| Unearned revenue | 2,580 | 3,112 | ||||||
| Fair value of derivatives | 53,880 | 52,442 | ||||||
| Other current liabilities | 1,842 | 2,198 | ||||||
| Total current liabilities | $ | 184.788 | $ | 219,887 | ||||
| NON-CURRENT LIABILITIES | ||||||||
| Long-term debt, net of current portion | $ | 1,227,140 | $ | 1,280,145 | ||||
| Fair value of derivatives, net of current portion | 54,062 | 120,885 | ||||||
| Unearned revenue, net of current portion | 650 | 3,406 | ||||||
| Total non-current liabilities | $ | 1,281,852 | $ | 1,404,436 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock | $ | 6 | $ | 6 | ||||
| Additional paid-in capital | 519,971 | 519,971 | ||||||
| Other comprehensive loss | (82,895 | ) | (143,884 | ) | ||||
| Accumulated deficit | (74,940 | ) | (58,655 | ) | ||||
| Total stockholders' equity | $ | 362,142 | $ | 317,438 | ||||
| Total liabilities and stockholders' equity | $ | 1,828,782 | $ | 1,941,761 | ||||
| COSTAMARE INC. | ||||||||||||||||
| Statements of Cash Flows | ||||||||||||||||
| Nine-months ended September 30, | Three-month ended September 30, | |||||||||||||||
| (Expressed in thousands of U.S. dollars) | 2010 | 2011 | 2010 | 2011 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||
| Net income: | $ | 69,421 | $ | 61,510 | $ | 23,785 | $ | 17,391 | ||||||||
| Adjustments to reconcile net income to net | ||||||||||||||||
| cash provided by operating activities: | ||||||||||||||||
| Depreciation | 52,573 | 58,092 | 18,126 | 20,079 | ||||||||||||
| Amortization of financing costs | 1,139 | 2,026 | 688 | 691 | ||||||||||||
| Amortization of deferred dry-docking and special surveys | 6,137 | 6,139 | 2,058 | 2,096 | ||||||||||||
| Amortization of unearned revenue | (486 | ) | (486 | ) | (164 | ) | (164 | ) | ||||||||
| (Gain) Loss on sale of vessels | (9,588 | ) | (10,771 | ) | (1,735 | ) | - | |||||||||
| (Gain) Loss on sale of investments | (148 | ) | 7 | (148 | ) | - | ||||||||||
| Variable interest on cash flow hedge | - | (1,984 | ) | - | (1,123 | ) | ||||||||||
| Loss (gain) on derivative instruments | 8,963 | 6,580 | (1,219 | ) | 6,511 | |||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Receivables | $ | (2,064 | ) | $ | 1,563 | $ | (1,861 | ) | $ | 1,732 | ||||||
| Due from related parties | (4,184 | ) | (3,919 | ) | (3,795 | ) | (3,188 | ) | ||||||||
| Inventories | 2,475 | (1,831 | ) | 890 | 1,550 | |||||||||||
| Claims receivable | (64 | ) | (2,163 | ) | 4 | (476 | ) | |||||||||
| Prepayments and other | (307 | ) | (80 | ) | 763 | 562 | ||||||||||
| Accounts payable | (2,569 | ) | (23 | ) | 1,786 | (2,285 | ) | |||||||||
| Due to related parties | (7,253 | ) | - | (6,578 | ) | (338 | ) | |||||||||
| Accrued liabilities | 223 | 1,853 | (1,847 | ) | 548 | |||||||||||
| Unearned revenue | 519 | 447 | (61 | ) | 54 | |||||||||||
| Other liabilities | (292 | ) | 356 | 572 | (75 | ) | ||||||||||
| Dry-dockings | (10,877 | ) | (6,122 | ) | (2,107 | ) | - | |||||||||
| Accrued charter revenue | (14,624 | ) | 23,218 | 3,788 | 7,776 | |||||||||||
| Net Cash from Operating Activities | $ | 88,994 | $ | 134,412 | $ | 32,945 | $ | 51,341 | ||||||||
| Cash Flows from Investing Activities: | ||||||||||||||||
| Advances for vessels acquisitions | $ | - | $ | (147,257 | ) | $ | - | $ | (1,477 | ) | ||||||
| Vessel acquisitions/Addition to vessel cost | (28,281 | ) | (136,209 | ) | - | (61,366 | ) | |||||||||
| Proceeds from sale of available for sale securities | 8,030 | 6,082 | 8,030 | - | ||||||||||||
| Proceeds from the sale of vessels | 22,731 | 20,761 | 3,664 | 1,756 | ||||||||||||
| Net Cash provided by Investing Activities | $ | 2,480 | $ | (256,623 | ) | $ | 11,694 | $ | (61,087 | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||||||||||
| Stockholders' contributions | $ | 2,400 | $ | - | $ | 2,400 | $ | - | ||||||||
| Proceeds from long-term debt | - | 169,013 | - | 61,420 | ||||||||||||
| Repayment of long-term debt | (63,460 | ) | (83,944 | ) | (19,400 | ) | (34,623 | ) | ||||||||
| Payments for financing costs | (2,956 | ) | (5,231 | ) | - | (2,283 | ) | |||||||||
| Initial public offering related costs | (1,681 | ) | - | (903 | ) | - | ||||||||||
| Dividends paid | (10,000 | ) | (45,225 | ) | - | (15,075 | ) | |||||||||
| (Increase) decrease in restricted cash | 2,915 | (1,563 | ) | 1,784 | 1,292 | |||||||||||
| Net Cash used in Financing Activities | $ | (72,782 | ) | $ | 33,050 | $ | (16,119 | ) | $ | 10,731 | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | 18,692 | $ | (89,161 | ) | $ | 28,520 | $ | 985 | |||||||
| Cash and cash equivalents at beginning of period | 12,282 | 159,774 | 2,454 | 69,628 | ||||||||||||
| Cash and cash equivalents at end of period | 30,974 | 70,613 | 30,974 | 70,613 | ||||||||||||
Contact Information:
Contacts
Company Contact:
Gregory Zikos
Chief Financial Officer
Konstantinos Tsakalidis - Business Development
Costamare Inc., Athens, Greece
Tel: (+30) 210-949-0000
Email: ir@costamare.com
www.costamare.com
Investor Relations Advisor/ Media Contact:
Nicolas Bornozis - President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, N.Y. 10169
Tel: 212-661-7566
Email: costamare@capitallink.com