-- The Company reported Net Income of $110.2 million or $3.11 per share,
for the second quarter of 2007. Included in the second quarter results is
a capital gain on the sale of 5 vessels of $53.8 million or $1.52 per
share. Excluding this gain, Net Income would amount to $56.4 million or
$1.59 per share.
-- For the second quarter of 2007 the Company reported EBITDA, excluding
vessel gains, of $87.3 million, which is the highest EBITDA excluding
vessel gains reported in a single quarter since the Company's inception.
-- In July 2007 the Company declared and paid its ninth consecutive
quarterly cash dividend of $0.20 per common share.
Fleet Renewal Highlights
-- The Company has entered into agreements with unaffiliated third parties
to acquire for an aggregate purchase price of $201.5 million:
- One 2002 built, 51,201 dwt Supramax bulk carrier, scheduled to be
delivered in the fourth quarter of 2007. Upon delivery to DryShips,
the vessel will commence a bareboat charter back to the Seller for
a period until September 14, 2008 at a daily bareboat rate of
$27,000. The charter will continue for a further period of between
24 and 29 months at a daily bareboat rate of $20,250.
- One 2004 built, 75,500 dwt Panamax bulk carrier, scheduled to be
delivered charter free in the fourth quarter of 2007.
- One 2001 built, 74,823 dwt Panamax bulk carrier, scheduled to be
delivered charter free in the fourth quarter of 2007.
-- The Company has entered into an agreement with an unaffiliated third
party to sell its 1996 built, 70,002 dwt Panamax bulk carrier MV
Formentera, scheduled to be delivered to the new owners in the fourth
quarter of 2007. The Company expects to realize a gain of approximately
$31.0 million which will be recognized in the fourth quarter of 2007.
George Economou, the Company's Chairman and Chief Executive Officer of
DryShips Inc., commented:
"We are pleased to report a second consecutive quarter with record EBITDA.
We remain committed to implementing our previously stated chartering
philosophy and to position more vessels to trade in the spot market on a
voyage by voyage basis as the vessels are coming off previously concluded
short-term charters. As of today, 52% of our fleet operating days for the
remainder of 2007 remain unfixed.
"We continue to selectively add new and modern vessels to our existing
fleet while disposing of older and smaller vessels, with a goal towards
ensuring the longevity and quality of our fleet's earning capacity. Once
the recently announced sale and purchase activity has been completed by the
end of the first quarter of 2008 the Company's fleet will consist of a
total of 46 vessels (including 7 new buildings) with an average age of just
below 9 years, well below the industry average of about 13 years.
"The outlook for 2008 remains positive with fewer vessels being delivered
from the shipyards and Chinese demand projected to remain strong. DryShips
will have approximately 17% more fleet operating days compared to 2007 and
with approximately 97% of its fleet operating days unfixed it is in a
unique position to take full advantage of this opportunity."
Second Quarter 2007 Results
For the second quarter ended June 30, 2007, Time charter equivalent
revenues (Voyage revenues less voyage expenses) amounted to $105.5 million
as compared to $51.5 million for the second quarter ended June 30, 2006.
Operating Income was $120.9 million for the quarter ended June 30, 2007, as
compared to $10.5 million for the quarter ended June 30, 2006. Net Income
for the second quarter ended June 30, 2007 was $110.2 million or $3.11
Earnings Per Share ("EPS") calculated on 35.49 million weighted average
basic and diluted shares outstanding as compared to a loss of $(0.81)
million or $(0.03) Loss Per Share ("LPS") calculated on 30.41 million
weighted average basic and diluted shares outstanding for the quarter ended
June 30, 2006. EBITDA for the second quarter of 2007 was $141.1 million as
compared to $25.2 million in the quarter ended June 30, 2006.(1)
(1) Please see later in this release for a reconciliation of EBITDA to net
cash provided by Operating activities.
An average of 32.7 vessels were owned and operated during the second
quarter of 2007, earning an average Time Charter Equivalent, or TCE, rate
of $36,092 per day as compared to an average of 28.3 vessels owned and
operated during the second quarter of 2006 earning an average TCE rate of
$20,603 per day.
First Half 2007 Results
For the first half year ended June 30, 2007, Time charter equivalent
revenues (Voyage revenues less voyage expenses) amounted to $186.9 million
as compared to $102.3 million for the first half year ended June 30, 2006.
Operating Income was $198.0 million for the first half year ended June 30,
2007, as compared to $34.6 million for the first half year ended June 30,
2006. Net Income for the first half year ended June 30, 2007 was $176.6
million or $4.98 Earnings Per Share ("EPS") calculated on 35.49 million
weighted average basic and diluted shares outstanding as compared to $17.3
million or $0.57 Earnings Per Share ("EPS") calculated on 30.38 million
weighted average basic and diluted shares outstanding for the first half
year ended June 30, 2006. EBITDA for the first half year ended of 2007 was
$234.9 million as compared to $61.3 million in the first half year ended
June 30, 2006.(1)
(1) Please see later in this release for a reconciliation of EBITDA to net
cash provided by Operating activities.
An average of 32.4 vessels were owned and operated during the first half
year ended June 30, 2007, earning an average or TCE rate of $32,580 per day
as compared to an average of 27.7 vessels owned and operated during the
first half year ended June 30, 2006 earning an average TCE rate of $20,955
per day.
Drydock related expenses
During the second quarter of 2007, two vessels were drydocked for a total
cost of $0.4 million. Such costs are capitalized and amortized until the
vessels' next drydock.
Capitalization
On June 30, 2007, debt to total capitalization (debt, net of deferred
financing fees and stockholders equity) was 56.87% and net debt (total debt
less cash and cash equivalents) to total capitalization was 54.96%.
As of June 30, 2007, the Company had a total liquidity of approximately
$60.2 million.
Financing activities
As of August 21, 2007 the Company had a total of $796.5 million in debt
outstanding under its credit facility with HSH Nordbank.
Fleet Developments
Vessels Acquired and Delivered
On June 1, 2007, the Company took delivery of the MV Capitola, a 2001 built
second-hand 74,832 dwt Panamax drybulk carrier, which it had agreed to
acquire on April 11, 2007, for a purchase price $49.0 million.
On June 7, 2007, the Company took delivery of the MV Menorca, a 1997 built
second-hand 71,662 dwt Panamax drybulk carrier, which it had agreed to
acquire on January 18, 2007, for a purchase price $41.0 million.
On June 11, 2007, the Company took delivery of the MV Heinrich Oldendorff,
a 2001 built second-hand 73,931 dwt Panamax drybulk carrier, which it had
agreed to acquire on March 23, 2007, for a purchase price $49.0 million.
On June 11, 2007, the Company took delivery of the MV Majorca, a 2005 built
second-hand 74,364 dwt Panamax drybulk carrier, which it had agreed to
acquire on March 26, 2007, for a purchase price $53.5 million.
Vessels Sold and Delivered
On June 8, 2007, the MV Hille Oldendorff, a 2005 built 55,566 dwt Supramax
drybulk carrier was delivered to her new owners for a sale price of $50.5
million. The Company realized a gain of $12.9 million that was recognized
in the second quarter of 2007.
On June 12, 2007, the MV Alona, a 2002 built 48,640 dwt Handymax drybulk
carrier was delivered to her new owners for a sale price of $39.5 million.
The Company realized a gain of $7.3 million that was recognized in the
second quarter of 2007.
On July 3, 2007, the MV Mostoles, a 1981 built 75,395 dwt Panamax drybulk
carrier was delivered to her new owners for a sale price of $13.3 million.
The Company will realize a gain of approximately $10.8 million to be
recognized in the third quarter of 2007.
On July 27, 2007, the MV Lanikai, a 1988 built, 68,676 dwt Panamax drybulk
carrier was delivered to her new owners for a sale price of $26.1 million.
The Company will realize a gain of $9.1 million to be recognized in the
third quarter of 2007.
Vessels Sold - To be delivered
On August 7, 2007 the Company entered into an agreement to sell the MV
Formentera, a 1996 built, 70,002 dwt Panamax drybulk carrier for a sale
price of $63.0 million with delivery to the new owners scheduled to take
place during the fourth quarter of 2007. The Company expects to realize a
gain of approximately $31.0 million to be recognized in the fourth quarter
of 2007.
Vessel Acquisitions - To be delivered
On June 8, 2007, the Company agreed to acquire the MV Clipper Gemini, a
2003 built second-hand 51,201 dwt Supramax drybulk carrier, delivery of
which is expected during the third quarter of 2007, for a purchase price of
$50.2 million. Upon delivery to DryShips, the vessel will commence a
bareboat charter back to the Seller for a period of between 13 and 15
months at a daily bareboat rate of $27,000.
On July 13, 2007, the Company agreed to acquire the MV Oregon, a 2002 built
second-hand 74,204 dwt Panamax drybulk carrier, charter free delivery of
which is expected during the fourth quarter of 2007, for a purchase price
of $67.2 million.
On July 26, 2007, the Company agreed to acquire the MV Avoca, a 2004 built
second-hand 76,500 dwt Panamax drybulk carrier, charter free delivery of
which is expected during the first quarter of 2008, for a purchase price of
$69.5 million.
On August 6, 2007, the Company agreed to acquire the MV Saldahna, a 2004
built second-hand 75,500 dwt Panamax drybulk carrier, charter free delivery
of which is expected during the forth quarter of 2007, for a purchase price
of $75.0 million.
On August 8, 2007, the Company agreed to acquire the MV VOC Galaxy, a 2002
built second-hand 51,201 dwt Supramax drybulk carrier, delivery of which is
expected during the fourth quarter of 2007, for a purchase price of $55.5
million. Upon delivery to DryShips, the vessel will commence a bareboat
charter back to the Seller for a period until September 14, 2008 at a daily
bareboat rate of $27,000. The charter will continue for a further period of
between 24 and 29 months at a daily bareboat rate of $20,250.
On August 15, 2007, the Company agreed to acquire the MV Samatan, a 2001
built second-hand 74,823 dwt Panamax drybulk carrier, charter free delivery
of which is expected during the fourth quarter of 2007, for a purchase
price of $71.0 million.
Newbuilding Acquisitions - To be delivered
On July 27, 2007 the Company agreed to acquire a 180,000 dwt Capesize bulk
carrier under construction in South Korea, for a price of $114.0 million.
The vessel is expected to be delivered during the second quarter of 2009.
On July 30, 2007 the Company agreed to acquire two 180,000 dwt Capesize
bulk carriers under construction in South Korea, for a price of $105.5
million each. The vessels are expected to be delivered in the fourth
quarter of 2009 and the first quarter of 2010, respectively.
On July 31, 2007 the Company agreed to acquire two 82,000 dwt Kamsarmax
bulk carriers under construction in China, for a price of $54.3 million
each. The vessels are expected to be delivered during the second quarter
and third quarter of 2010, respectively.
All of the above vessels are being acquired as re-sales from the sellers
and delivery to DryShips shall be "back to back" with the delivery of the
vessels to the sellers by the respective builder.
Gain on Vessel Disposals
As of June 30, 2007 DryShips has realized an aggregate gain on vessel
disposals of $84.3 million or $2.37 per share and expects to realize
additional vessel gains for the remainder of the year in the amount of
approximately $50.9 million or $1.43 per share. For the whole of 2007
DryShips expects to realize a total gain on vessel disposals of
approximately $135.2 million or $3.80 per share.
When all the second hand acquisitions and disposals are concluded by the
end of the first quarter of 2008, DryShips' fleet will include 46 drybulk
carriers comprising 5 Capesize, 31 Panamax, 2 Supramax, 1 Handymax and 7
newbuilding drybulk vessels, with a combined deadweight capacity of
approximately 4.0 million deadweight tons, and an average age of 8.9 years.
Fleet Employment Developments
As of August 21, 2007, approximately 52% and 97% of the total vessel
operating days for 2007 and 2008 respectively remain unfixed.
Capital expenditures
The Company expects to incur the following capital expenditures associated
with vessel drydocking costs:
Fourth quarter
2007 2008
-------------- --------------
Number of vessels 2 7
-------------- --------------
Expected cost in USD millions 0.8 5.2
-------------- --------------
Off-hire days 30 138
-------------- --------------
Such costs are capitalized and amortized until the vessels' next drydock.
The actual days and expenses in connection with vessel drydockings will
vary based on the shipyard schedule, weather, condition of the vessel and
other factors.
In addition the Company expects to incur expenses for peripheral supplies
and other repair works while the vessels will be in drydock which will be
included in Vessel Operating Expenses for the respective quarter.
Dividend Payment
In July 2007, DryShips declared and paid its ninth consecutive quarterly
cash dividend of $0.20 per common share. Since the Company's listing on the
Nasdaq Global Market in February 2005, DryShips has paid total dividends of
$1.80 per common share.
As of August 21, 2007, the Company has a total of 35,490,097 shares of
common stock outstanding.
Fleet Data
Second Quarter 2007
Total TCE revenue increased during the second quarter of 2007 compared to
the second quarter of 2006, primarily as a result of an increase in the
average number of vessels operated, from an average of 28.3 vessels in the
second quarter of 2006 to 32.7 vessels in the second quarter of 2007, and
an increase in the daily average TCE rate from $20,603 in the second
quarter of 2006 to $36,092 in the second quarter of 2007.
Vessel operating expenses increased to $15.2 million for the second quarter
of 2007 compared to $11.1 million for the second quarter of 2006. The
increase is attributable to the increase in the number of vessels operated
from an average of 28.3 vessels for the second quarter of 2006 to 32.7
vessels for the second quarter of 2007.
Depreciation and amortization increased to $18.7 million in the second
quarter of 2007 compared to $14.5 million in the second quarter of 2006.
This was a direct result of the increase in the Company's fleet from an
average of 28.3 vessels in the second quarter of 2006 to an average of 32.7
vessels in the second quarter of 2007.
Management fees increased to $2.4 million in the second quarter of 2007
compared to $1.5 million in the second quarter of 2006 as a direct result
of the increase in the number of fleet calendar days from 2,575 in the
second quarter of 2006 to 2,980 in the second quarter of 2007 due to the
growth of the fleet and an increase in the Euro/USD exchange rate.
General and administrative expenses increased to $2.0 million in the second
quarter of 2007 from $1.0 million in the second quarter of 2006. The
increase results mainly from increased legal and audit fees, fees relating
to compliance with the requirements of the Sarbanes-Oxley Act of 2002 and
an increase in the Euro/USD exchange rate.
First Half 2007
Total TCE revenue increased during the first half of 2007 compared to the
first half of 2006, primarily as a result of an increase in the average
number of vessels operated, from an average of 27.7 vessels in the first
half of 2006 to 32.4 vessels in the first half of 2007, and an increase in
the daily average TCE rate from $20,955 in the first half of 2006 to
$32,580 in the first half of 2007.
Vessel operating expenses increased to $29.0 million for the first half of
2007 compared to $21.6 million for the first half of 2006. The increase is
attributable to the increase in the number of vessels operated from an
average of 27.7 vessels for the first half of 2006 to 32.4 vessels for the
first half of 2007.
Depreciation and amortization increased to $35.6 million in the first half
of 2007 compared to $28.3 million in the first half of 2006. This was a
direct result of the increase in the Company's fleet from an average of
27.7 vessels in the first half of 2006 to an average of 32.4 vessels in the
first half of 2007.
Management fees increased to $4.6 million in the first half of 2007
compared to $2.9 million in the first half of 2006 as a direct result of
the increase in the number of fleet calendar days from 5,005 in the first
half of 2006 to 5,867 in the first half of 2007 due to the growth of the
fleet and an increase in the Euro/USD exchange rate.
General and administrative expenses increased to $3.9 million in the first
half of 2007 from $2.0 million in the first half of 2006, the increase
results mainly from increased legal and audit fees, fees relating to
compliance with the requirements of Sarbanes-Oxley Act of 2002 and an
increase in the Euro/USD exchange rate.
Second Quarter 2007
(Dollars in thousands, except Three Months Three Months
Average Daily Results - unaudited) Ended Ended
June 30, 2007 June 30, 2006
============= =============
Average number of vessels (1) 32.7 28.3
Total voyage days for fleet (2) 2,924 2,501
Total calendar days for fleet (3) 2,980 2,575
Fleet Utilization (4) 98.1% 97.1%
Time charter equivalent (5) 36,092 20,603
Capesize 55,618 29,823
Panamax 33,628 19,897
Handymax 24,625 16,805
Vessel operating expenses (daily) (6) 5,110 4,311
Management fees (daily) 820 586
General and administrative expenses (daily) (7) 673 402
Total vessel operating expenses (daily) (8) 6,603 5,299
First Half 2007
(Dollars in thousands, except Six Months Six Months
Average Daily Results - unaudited) Ended Ended
June 30, 2007 June 30, 2006
============= =============
Average number of vessels (1) 32.4 27.7
Total voyage days for fleet (2) 5,737 4,882
Total calendar days for fleet (3) 5,867 5,005
Fleet Utilization (4) 97.8% 97.5%
Time charter equivalent (5) 32,580 20,955
Capesize 47,696 31,829
Panamax 30,831 19,799
Handymax 22,931 16,083
Vessel operating expenses (daily) (6) 4,945 4,314
Management fees (daily) 791 590
General and administrative expenses (daily) (7) 663 400
Total vessel operating expenses (daily) (8) 6,399 5,304
(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 owned
by us 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 owned by us 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.
TCE Rates:
The following table reflects the calculation of our TCE rates for the
periods then ended:
Three Three Six Six
Months Months Months Months
(Dollars in thousands) Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
--------- --------- --------- ---------
Voyage revenues 112,521 54,548 199,171 109,356
Voyage expenses (6,987) (3,021) (12,257) (7,056)
--------- --------- --------- ---------
Time charter equivalent
revenues 105,534 51,527 186,914 102,300
========= ========= ========= =========
Total voyage days for fleet 2,924 2,501 5,737 4,882
Time charter equivalent (TCE)
rate 36,092 20,603 32,580 20,955
DryShips Inc. Fleet
As at June 30, 2007, the Company's fleet consisted of 35 vessels.
During the three month period ended June 30, 2007, the Company operated the
following types of vessels:
Capesize Panamax Handymax Total
--------- --------- --------- ---------
Average number of vessels
during period 4.55 25.65 2.54 32.74
Number of vessels at end of
period 5.00 29.00 1.00 35.00
Dwt at end of period 793,657 2,125,307 45,863 2,964,827
Dwt as percentage of total
fleet 26.77% 71.68% 1.55% 100.00%
During the six month period ended June 30, 2007, the Company operated the
following types of vessels:
Capesize Panamax Handymax Total
--------- --------- --------- ---------
Average number of vessels
during period 4.53 25.11 2.77 32.41
Number of vessels at end of
period 5.00 29.00 1.00 35.00
Dwt at end of period 793,657 2,125,307 45,863 2,964,827
Dwt as percentage of total
fleet 26.77% 71.68% 1.55% 100.00%
Financial Statements
The following are DryShips Inc.'s Unaudited Condensed Consolidated
Statements of Income for the three and six-month periods ended June 30,
2007 and June 30, 2006:
(Dollars in thousands,
except per share data and
Average Daily Results - Six Months Six Months Three Months Three Months
unaudited) Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
(Restated) (Restated)
INCOME STATEMENT DATA
Voyage revenues $ 199,171 $ 109,356 $ 112,521 $ 54,547
Loss on Forward Freight
Agreements $ 12,863 $ 12,863
Voyage expenses 12,257 7,056 6,987 3,020
Vessel operating expenses 29,017 21,596 15,228 11,102
Depreciation and
amortization 35,597 28,274 18,743 14,509
Gain on sale of vessels (84,283) (53,786)
Management fees 4,641 2,954 2,445 1,510
General and administrative 3,895 2,004 2,007 1,036
---------- ---------- ---------- ----------
Operating Income 198,047 34,609 120,897 10,507
---------- ---------- ---------- ----------
Interest and finance costs,
net (22,762) (15,756) (12,174) (11,465)
Other, net 1,353 (1,544) 1,514 150
---------- ---------- ---------- ----------
NET INCOME $ 176,638 $ 17,309 $ 110,237 $ (808)
========== ========== ========== ==========
Basic and fully diluted
earnings per share $ 4.98 $ 0.57 $ 3.11 $ (0.03)
========== ========== ========== ==========
Weighted average basic and
diluted shares outstanding 35,490,097 30,381,294 35,490,097 30,412,245
---------- ---------- ---------- ----------
The following are DryShips Inc.'s Consolidated Balance Sheets as at June
30, 2007 (unaudited) and December 31, 2006 (audited):
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
December 31, June 30,
2006 2007
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 2,537 33,466
Restricted cash 6,614 6,738
Accounts receivable trade 3,187 8,169
Insurance claims 671 6,237
Due from related parties 3,353 3,625
Inventories 2,571 2,754
Prepayments and advances 5,568 6,300
Fair value of above market acquired time
charter 1,335 -
Financial instruments 39
------------ ------------
Total current assets 25,875 67,289
------------ ------------
FIXED ASSETS, NET:
Advances for vessels under construction and
acquisitions 27,380 22,847
Vessels, net 1,084,924 1,338,256
------------ ------------
Total fixed assets, net 1,112,304 1,361,103
------------ ------------
OTHER NON CURRENT ASSETS:
Deferred charges, net 6,200 4,227
Restricted cash 20,000 20,000
Financial instruments 946 2,123
Other 2,848 1,768
------------ ------------
Total assets 1,168,173 1,456,510
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt 71,412 81,118
Accounts payable 11,423 8,409
Due to related parties 25,086 -
Accrued liabilities 6,326 10,501
Deferred revenue 12,270 11,521
Financial Instruments 2,625 -
Other current liabilities 202 230
------------ ------------
Total current liabilities 129,344 111,779
------------ ------------
NON CURRENT LIABILITIES:
Fair value of below market acquired time charter - 3,454
Long term debt, net of current portion 587,330 727,534
Other 607 409
------------ ------------
Total non current liabilities 587,937 731,397
------------ ------------
COMMITMENTS AND CONTIGENCIES - -
STOCKHOLDERS' EQUITY:
Preferred stock, $ 0.01 par value; 30,000,000
shares authorized, none issued. - -
Common stock, $0.01 par value; 75,000,000
shares authorized; 35,490,097 shares issued
and outstanding. 355 355
Additional paid-in capital 327,446 327,446
Retained earnings 123,091 285,533
------------ ------------
Total stockholders' equity 450,892 613,334
------------ ------------
Total liabilities and stockholders'
equity 1,168,173 1,456,510
============ ============
EBITDA Reconciliation
DryShips Inc. considers EBITDA to represent net income before interest,
taxes, depreciation and amortization. EBITDA does not represent and should
not be considered as an alternative to net income or cash flow from
operations, as determined by United States generally accepted accounting
principles, or U.S. GAAP, and our calculation of EBITDA may not be
comparable to that reported by other companies. EBITDA is included herein
because it is a basis upon which the Company assesses its liquidity
position, it is used by our lenders as a measure of our compliance with
certain loan covenants and because the Company believes that it presents
useful information to investors regarding a company's ability to service
and/or incur indebtedness.
The following table reconciles net cash from operating activities to
EBITDA:
(Dollars in thousands) 3 Months Ended 3 Months Ended
June 30, 2007 June 30, 2006
-------------- --------------
Net cash provided by operating activities 74,471 19,355
Net (decrease) / increase in current assets 4,885 13,405
Net decrease / (increase) in current
liabilities, excluding current portion of
long term debt (7,767) (6,903)
Gain on Sale of Vessel 53,786 -
Amortization of deferred revenue 1,356 (209)
Amortization of free lubricants 137 (43)
Change in fair value of derivatives 2,657 1,417
Net Interest expense 12,174 11,465
Amortization of deferred financing costs
included in interest expense (975) (2,987)
Payments for dry-docking costs 430 2,528
Loss on FFA's - (12,863)
-------------- --------------
EBITDA 141,154 25,165
============== ==============
(Dollars in thousands) 6 Months Ended 6 Months Ended
June 30, 2007 June 30, 2006
-------------- --------------
Net cash provided by operating activities 117,080 45,867
Net (decrease) / increase in current assets 10,655 14,650
Net decrease / (increase) in current
liabilities, excluding current portion of
long term debt (5,907) (5,521)
Gain on Sale of Vessel 84,283 -
Amortization of deferred revenue 2,655 152
Amortization of free lubricants 170 (83)
Change in fair value of derivatives 3,763 3,122
Net Interest expense 22,762 15,756
Amortization of deferred financing costs
included in interest expense (1,414) (3,108)
Payments for dry-docking costs 950 3,364
Loss on FFA's - (12,863)
-------------- --------------
EBITDA 234,997 61,336
============== ==============
Fleet List
The table below describes in detail our fleet development and current
employment profile as of August 21, 2007:
Gross
Year Current Rate Redelivery
Built Dwt Type Employment per Day Earliest Latest
Capesize:
Manasota 2004 171,061 Capesize TC $ 55,000 Prompt Nov-07
Alameda 2001 170,269 Capesize TC $ 73,000 Jan-08 Mar-08
Samsara 1996 150,393 Capesize TC $ 55,500 Sep-07 Nov-07
Netadola 1993 149,475 Capesize TC $ 52,500 Oct-07 Nov-07
Brisbane 1995 151,066 Capesize Spot $ 93,000 Prompt Prompt
9.0 792,264 5
Panamax:
Heinrich
Oldendorff 2001 73,931 Panamax BB $ 28,000 Apr-08 Jun-09
Ligari 2004 75,583 Panamax TC $ 31,550 Sep-07 Nov-07
Padre 2004 73,601 Panamax TC $ 30,000 Sep-07 Nov-07
Mendocino 2002 76,623 Panamax TC $ 37,500 Oct-07 Dec-07
Maganari 2001 75,941 Panamax TC $ 18,400 Apr-08 Jul-08
Ocean Crystal 1999 73,688 Panamax TC $ 40,000 Sep-07 Nov-07
La Jolla 1997 72,126 Panamax TC $ 46,000 Oct-07 Dec-07
Lanzarote 1996 73,008 Panamax TC $ 43,750 Sep-07 Nov-07
Iguana 1996 70,349 Panamax TC $ 28,000 Sep-07 Nov-07
Waikiki 1995 75,473 Panamax TC $ 36,750 Jan-08 Mar-08
Sonoma 2001 74,786 Panamax Baumarine $ 53,585
Toro 1995 73,034 Panamax Baumarine $ 51,652
Lacerta 1994 71,862 Panamax Baumarine $ 52,033
Catalina 2005 74,432 Panamax Spot $ 54,000 Prompt Prompt
Majorca 2005 74,364 Panamax Spot $ 49,000 Prompt Prompt
Bargara 2002 74,832 Panamax Spot $ 64,500 Prompt Prompt
Capitola 2001 74,832 Panamax Spot $ 50,000 Prompt Prompt
Coronado 2000 75,706 Panamax Spot $ 51,000 Prompt Prompt
Redondo 2000 74,716 Panamax Spot $ 60,000 Prompt Prompt
Marbella 2000 72,561 Panamax Spot $ 65,500 Prompt Prompt
Xanadu 1999 72,270 Panamax Spot $ 69,000 Prompt Prompt
Primera 1998 72,495 Panamax Spot $ 55,000 Prompt Prompt
Menorca 1997 71,662 Panamax Spot $ 50,000 Prompt Prompt
Formentera 1996 70,002 Panamax Spot $ 42,000 Prompt Prompt
Solana 1995 75,100 Panamax Spot $ 64,250 Prompt Prompt
Paragon 1995 71,259 Panamax Spot $ 58,500 Prompt Prompt
Tonga 1984 66,798 Panamax Spot $ 43,000 Prompt Prompt
8.3 1,981,034 27
Handymax:
Matira 1994 45,863 Handymax TC $ 32,300 Oct-07 Dec-07
13.0 45,863 1
Newbuildings:
TBN 2009 180,000 Capesize
TBN 2009 180,000 Capesize
TBN 2010 180,000 Capesize
TBN 2010 82,000 Kamsarmax
TBN 2010 82,000 Kamsarmax
TBN 2009 75,000 Panamax
TBN 2010 75,000 Panamax
854,000 7
Total Fleet 8.6 3,673,161 40
1. For spot vessels the TCE rate is for the current voyage.
2. For vessels trading in the Baumarine pool the TCE rate is the Pool's
estimate for earnings in the month of August.
3. The MV Heinrich Oldendorff is employed under a bareboat charter.
4. The quoted rates are not indications of future earnings and the Company
gives no assurance or guarantee of future rates.
Conference Call and Webcast: August 22, 2007, at 10 a.m. EDT
DryShips' management team will host a conference call on August 22, 2007,
at 10 a.m. Eastern Time to discuss the Company's financial results for the
second quarter and first half of 2007.
Conference Call details:
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) 1452 542 301 (from outside the US). Please
quote "DryShips."
In case of any problem with the above numbers, please dial 1(866) 223-0615
(from the US), 0(800) 694-1503 (from the UK) or +(44) (0) 1452 586 513
(from outside the US.) Quote "DryShips."
A replay of the conference call will be available until August 29th, 2007.
The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number +(44) (0) 1452-55 00 00
and the access code required for the replay is: 2133051#.
Slides and audio webcast:
There will also be a simultaneous live webcast over 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.
About DryShips Inc.
DryShips Inc. is an international provider of drybulk cargo marine
transportation services. Headquartered in Athens, Greece, DryShips owns
and operates a fleet of 40 drybulk carriers comprising 5 Capesize, 27
Panamax, 1 Handymax and 7 newbuilding drybulk vessels, with a combined
capacity of approximately 3.7 million deadweight tons.
DryShips Inc.'s common stock is listed on NASDAQ Global Market where it
trades under the symbol "DRYS."
Visit our website at www.dryships.com
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.
Contact Information: Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel. 212-661-7566 E-mail: nbornozis@capitallink.com