SOURCE: DryShips Inc.

March 15, 2006 16:58 ET

DryShips Inc. Reports Fourth Quarter and Year 2005 Results

ATHENS, GREECE -- (MARKET WIRE) -- March 15, 2006 -- DryShips Inc. (NASDAQ: DRYS) announced today its results for the fourth quarter 2005 and the year ended December 31, 2005.

A decision was made in 2005, with effect from 2004, to change the fiscal year end to December 31 from October 31 so that the Company's financial reports would be in line with other publicly listed shipping companies. Therefore, comparisons are made from the three-month period ended December 31, 2005 to the two-month period ended December 31, 2004 and the year ended October 31, 2004.

Net revenues for the fourth quarter of 2005 were $66.5 million compared to $15.7 million for the two months ended December 31, 2004. Operating Income for the fourth quarter of 2005 was $33.4 million compared to $11.4 million for the two months ended December 31, 2004. Net income for the fourth quarter 2005 was $26.1 million compared to $10.8 million for the two months ended December 31, 2004. Basic earnings per share, based on average number shares outstanding, was $ 0.86 for the fourth quarter of 2005.

Net revenues for the year ended December 31, 2005 were $228.9 million compared to $63.4 million for the year ended October 31, 2004. Operating income was $131.1 million for the year ended December 31, 2005, compared to $40.3 million for the year ended October 31, 2004. Net income for the year ended December 31, 2005 was $111.4 million compared to $39.1 million for the year ended October 31, 2004. Basic earnings per share, based on average number shares outstanding, was $ 3.85 for the year ended December 31, 2005.

The following are DryShips Inc. Condensed Income Statements for the three months period and the year ended December 2005, the two-month period ended December 31, 2004 and the year ended October 31, 2004.

(Dollars in thousands, except per         3 Months Ended   2 Months Ended
 share data and Average Daily              Dec. 31, 2005    Dec. 31, 2004
 Results - unaudited)                       -----------------------------
                                               Unaudited        Unaudited

INCOME STATEMENT DATA
Voyage revenues                                  $66,477          $15,699
Voyage expenses                                    3,221            1,136
Timecharter Equivalent Revenue                    63,256           14,563

Vessels operating expenses                        13,623            1,756
Depreciation and amortization                     13,575            1,134
Management fees                                    1,411              238
General and administrative                         1,215               67

Operating Income                                  33,432           11,368

Interest and finance costs, net                   (7,458)            (507)
Other, net                                           131               (5)

NET INCOME                                       $26,105          $10,856

Basic and fully diluted earnings per share         $0.86            $0.70
Weighted average basic and diluted shares
 outstanding                                  30,350,000       15,400,000

(Dollars in thousands, except per        12 Months Ended  12 Months Ended
 share data and Average Daily              Dec. 31, 2005     Oct. 31 2004
 Results - unaudited)                       -----------------------------
                                               Unaudited

INCOME STATEMENT DATA
Voyage revenues                                 $228,912          $63,458
Voyage expenses                                    9,592            5,481
 Timecharter Equivalent Revenue                  219,320           57,977

Vessels operating expenses                        36,720            9,769
Depreciation and amortization                     42,610            6,451
Management fees                                    4,962            1,261
General and administrative                         3,897              198

Operating Income                                 131,131           40,298

Interest and finance costs, net                  (19,649)          (1,503)
Other, net                                           (85)             318

NET INCOME                                      $111,397          $39,113

Basic and fully diluted earnings per share         $3.85            $2.54
Weighted average basic and diluted shares
 outstanding                                  28,957,397       15,400,000

The following are DryShips Inc. Condensed Balance Sheets as at December 31, 2005 and October 31, 2004.

(Dollars in thousands)                               As at           As at
                                                 Dec. 31, 2005  Oct. 31, 04
                                                    -------         -------

BALANCE SHEET DATA      Unaudited
Cash and cash equivalents                             5,184           6,171
Other current assets                                 13,594          63,173
Vessels, net                                        864,735          51,688
Other non current assets                             27,049          62,521
                                                    -------         -------
TOTAL ASSETS                                        910,562         183,553
                                                    =======         =======

Current portion of long-term debt                   107,738          25,453
Other currrent liabilities                           28,285          72,725
Long-term debt, net of currrent portion             417,615          89,749
Total Liabilities                                   553,638         187,927

Total Stockholders' equity                          356,924          -4,374
                                                    -------         -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          910,562         183,553
                                                    =======         =======

Capitalization

Debt to total capitalization (debt and stockholders' equity) at December 31, 2005 was 59.5% and net debt (total debt less cash and cash equivalents) to total capitalization was 60.3%.

Fleet Data

(Dollars in thousands, except per share data and
Average Daily Results - unaudited)    3 Months 2 Months 12 Months 12 Months
                                          Ended    Ended    Ended    Ended
                                        Dec. 31, Dec. 31, Dec. 31, Oct. 31,
                                           2005     2004     2005    2004
                                          ------   ------   ------  ------
Average number of vessels (1)              27.00     6.00    21.37     5.9
Total voyage days for fleet (2)            2,437      366    7,663    2066
Total calendar days for fleet (3)          2,484      366    7,866    2166
Fleet Ultilization (4)                      98.1%   100.0%    97.4%   95.4%
Time Charter equivalent (5)               25,465   39,790   28,446   28062
Capesize                                  35,463   67,930   46,254     n/a
Panamax                                   21,768   34,162   25,900     n/a
Handymax                                  15,892      n/a   20,714     n/a
Vessel operating expenses (6)              5,484    4,798    4,668    4510
Management fees                              568      650      631     582
General and administrative expenses (7)      489       84      496      91
Total vessel operating expenses (8)        6,541    5,532    5,795   5,183

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(2) Total voyage days for fleet are the total days the vessels were in our possession for the relevant period net of off hire days associated with major repairs, drydockings or special or intermediate surveys.

(3) Calendar days are the total days the vessels were in our possession for the relevant period including off hire days associated with major repairs, drydockings or special or intermediate surveys.

(4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods.

(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(7) Daily general and administrative expense is calculated by dividing general and administrative expense by fleet calendar days for the relevant time period.

(8) Total vessel operating expenses, or TVOE is a measurement of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, management fees and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

DryShips Inc. Fleet

As at December 31, 2005 DryShips Inc.'s fleet consisted of 27 vessels.

During the three-month period ended December 31, 2005, the Company operated the following types of vessels:

                               Capesize     Panamax   Handymax       Total
                               --------     -------   --------       -----
Average number of vessels
 during period                     4.00       21.00       2.00       27.00
Number of vessels at end of
 period                            4.00       21.00       2.00       27.00
Dwt at end of period            657,256   1,512,456     94,503   2,264,215
DWT as percentage of total
 fleet                            29.03%      66.80%      4.17%     100.00%
Average age at end of period       9.50       10.81       7.00       10.33

During the year ended December 31, 2005 the Company operated the following types of vessels:

                               Capesize     Panamax   Handymax       Total
                               --------     -------   --------       -----
Average number of vessels
 during the year                   3.10       16.79       1.48       21.37
Number of vessels at end of
 year                              4.00       21.00       2.00       27.00
Dwt at end of year              657,256   1,512,456     94,503   2,264,215
DWT as percentage of total
 fleet                            29.03%      66.80%      4.17%     100.00%
Average age at end of year         9.50       10.81       7.00       10.33
Fleet Employment

We actively and strategically employ our vessels in the spot charter market (under charters that generally last for periods of 10 days to four months), under period time charters (which can last up to several years) and in drybulk carrier pools.

Timecharter revenue increased during the three-month period and the year ended December 31, 2005 compared to the two-month period ended December 31, 2004 and the year ended October 31, 2004, primarily as a result of an increase in the number of vessels from six vessels as at October 31, 2004 and December 31, 2004 to 27 vessels as at December 31, 2005.

Vessel operating expenses increased to $13.6 million for the three-month period ended December 31, 2005 and $36.7 million for the year ended December 31, 2005 compared to $1.7 million and $9.8 million for the two months ended December 31, 2004 and the year ended October 31, 2004 respectively. Increase in depreciation and amortization was a direct result of the acquisition of 21 vessels during the period February to August 2005.

Fleet Deployment

The table below describes in detail our fleet development and current employment profile:

             Year                                Current    Redelivery
            Built Deadweight     Type         Employment Earliest  Latest
            ----- ---------- --------  ----------------- --------  ------
Capesize
Manasota     2004    171,061 Capesize            $46,000   Sep-06  Nov-06
Alameda      2001    170,662 Capesize            $39,000
Shibumi      1984    166,058 Capesize     Spot - $20,000
Netadola     1993    149,475 Capesize     Spot - $28,600
Panamax
Conrad
 Oldendorff  2002     76,623  Panamax            $42,000   Nov-06  Feb-07
Coronado     2000     75,706  Panamax     Spot - $15,750
Waikiki      1995     75,473  Panamax     Spot - $15,750
Mostoles     1981     75,395  Panamax  Baumarine $11,665
Linda
 Oldendorff  1995    75,100   Panamax            $43,250   Jul-06  Oct-06
Sonoma       2001    74,786   Panamax  Baumarine $16,028
Catalina     2005    74,432   Panamax     Spot - $17,150
Ocean
 Crystal     1999    73,688   Panamax     Spot - $14,000
Belmonte     2004    73,601   Panamax            $42,000   Apr-06  Jul-06
Toro **      1995    73,034   Panamax  Baumarine $15,860
Xanadu       1999    72,270   Panamax            $35,000   Jun-06  Sep-06
La Jolla     1997    72,126   Panamax     Spot - $17,900
Lacerta **   1994    71,862   Panamax  Baumarine $15,767
Panormos **  1995    71,747   Panamax  Baumarine $16,362
Paragon      1995    71,259   Panamax            $30,000   Aug-06  Oct-06
Iguana       1996    70,349   Panamax     Spot - $14,500
Daytona **   1989    69,703   Panamax  Baumarine $13,788
Lanikai **   1988    68,676   Panamax  Baumarine $13,988
Tonga **     1984    66,798   Panamax  Baumarine $11,100
Flecha       1982    65,081   Panamax  Baumarine $11,660
Striggla **  1982    64,747   Panamax  Baumarine $12,130
Handymax
Alona **     2002    48,640  Handymax  Baumarine $13,255
Matira       1994    45,863  Handymax     Spot - $11,250
DRYSHIPS FLEET    2,264,215

* Where the Redelivery column is left blank it signifies that the vessel is trading in the spot market. For those vessels where rates are quoted, the Company has calculated the estimated rates under current specific contracted voyages. The Company gives no guarantee that these rates are correct, or that the rates are sustainable beyond the duration of the current voyage. The quoted rates are not indications of future earnings and the Company gives no assurance or guarantee of future rates after the current voyage.

** Indicates vessels that are trading in the Baumarine Pool. Rates quoted refer to the vessels earnings as last reported, usually the previous month's earnings.

About DryShips Inc.

DryShips Inc., based in Greece, is an owner and operator of drybulk carriers that operate worldwide. As of the day of this Release, DryShips owns a fleet of 27 drybulk consisting 4 Capesize, 21 Panamax and 2 Handymax vessels, with a combined deadweight tonnage of approximately 2.3 million. DryShips is the second largest Panamax operator in the world.

DryShips Inc.'s common stock is listed on NASDAQ National Market where it trades under the symbol "DRYS."

Conference Call and Webcast

On Thursday, March 16, 2006 at 11:00 am EST, the company's management will host a conference call to discuss the results.

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1866 819 7111 (from the US), 0800 953 0329 (from the UK) or +44 1452 542 301 (from outside the US). Please quote "DryShips."

In case of any problem with the above numbers, please dial 1866 869 2352 (from the US), 0800 694 1449 (from the UK) or +44 1452 560 304 (from outside the US). Quote "DryShips."

A telephonic replay of the conference call will be available until Friday, March 23rd, 2006 by dialling 1866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 1452 550 000 (from outside the US). Access Code: 2133051#

Slides and audio webcast: There will also be a live -- and then archived -- webcast of the conference call, through the internet through the DryShips, Inc. website (www.dryships.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although DryShips Inc. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, DryShips Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in DryShips Inc.'s operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the US Securities and Exchange Commission.

Visit our website at www.dryships.com

Contact Information

  • Company Contact:
    Christopher J. Thomas
    Chief Financial Officer
    DryShips Inc.
    Tel. 011-30-210-809-0570
    E-mail: management@dryships.com

    Investor Relations / Media:
    Nicolas Bornozis
    Capital Link, Inc. (New York)
    Tel. 212-661-7566
    E-mail: nbornozis@capitallink.com