-- The sale of M/V Lansing which was delivered to the new owners July 1,
2009. The sale resulted in a book loss of approximately $14.8 million.
-- The impairment loss of M/V Juneau of $16.5 million due to its
contemplated sale.
-- Drydocking of three vessels with a total cost including peripheral
expenses of $6.7 million.
-- Gain from the change in fair value of interest rate swaps of
approximately $4.9 million.
Excluding the above items Net Income for the second quarter of 2009 would
be $0.3 million or cents 0.4 per share.
Recent Developments
-- In the second quarter of 2009, the Company commenced execution of its fleet renewal plan. The Company agreed to purchase a 2004-built 173,088 dwt Capesize drybulk carrier for a total cost of $56 million. The vessel was delivered to the Company on July 30, 2009 and commenced a three year time charter at a daily gross rate of $27,500 per day. In addition the Company entered into two agreements to purchase two 2006-built Capesize drybulk carriers (173,949 dwt and 174,200 dwt) for $61.25 million each. The vessels are expected to be delivered to the Company in the fourth quarter of 2009 upon which they are scheduled to commence time charter employment with a daily gross rate of $26,000 and $26,250 per day, respectively for a minimum of five years and a maximum of 8 and 9 years. On July 1, 2009 the Company delivered to the new owners the M/V Lansing for a sale price of $21.9 million. In addition, in July 2009 the Company entered into an agreement to sell the 1990-built Capesize M/V Juneau for a sale price of $19.9 million with expected delivery in the fourth quarter of 2009. Upon completion of the above transactions, our fleet will consist of 14 vessels, comprised of 10 dry bulk carriers (3 Capesize, 7 Panamaxes) and 4 tankers (1 Suezmax, 3 Aframaxes) with a combined deadweight tonnage of approximately 1.5 million tons with an average age of approximately 10 years. Anthony Kandylidis, the Company's President and Chief Executive Officer, commented: "OceanFreight is uniquely positioned to take advantage of opportunities as they arise. With our proven access to capital and our track record of sourcing modern high quality tonnage with fixed employment we are renewing our fleet while enhancing the longevity of our cash flows. Today our fleet average age is approximately 10 years, while the IPO fleet had an average age of approximately 14, and we have secured cashflows of 92% and 72% of the fleet operating days for the balance of 2009 and 2010 respectively."Second Quarter 2009 Results For the second quarter ended June 30, 2009, Voyage Revenues amounted to $29.1 million, Operating Loss amounted to $1.7 million before the effect of the impairment loss from vessel and vessel held for sale of $31.3 million and Net Loss amounted to $32.8 million or $(0.51) per share. EBITDA(1) for the second quarter of 2009 was $8.6 million. (1) Please see later in this release for a reconciliation of EBITDA to net cash provided by Operating activities. An average of 13 vessels were owned and operated during the second quarter of 2009, earning an average Time Charter Equivalent, or TCE rate, of $28,071 per day. Liquidity As of June 30, 2009, the Company had total liquidity of approximately $111.2 million. Fleet Data
(Dollars in thousands, except Average
Daily Results - unaudited) Three Months Ended
June 30,
2008 2009
---------- ----------
Average number of vessels (1) 11 13
Total voyage days for fleet (2) 1,001 1,065
Total calendar days for fleet (3) 1,001 1,183
Time charter equivalent (4) $ 35,672 $ 28,071
(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.
(3) Calendar days are the total days the vessels were in our possession for
the relevant period including off-hire days.
(4) Time charter equivalent rate, 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 gross 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.
The following table reflects the calculation of our TCE rates for the
periods then ended:
Three Months Ended
(Dollars in thousands, except Average June 30,
Daily Results - unaudited) 2008 2009
-------- --------
Voyage revenue $ 37,349 $ 29,123
Imputed revenue $ 2,566 $ 2,565
Voyage expenses $ (4,207) $ (1,792)
-------- --------
Time charter equivalent revenues $ 35,708 $ 29,896
======== ========
Total voyage days for fleet 1,001 1,065
Time charter equivalent (TCE) rate $ 35,672 $ 28,071
Financial Statements
The following are OceanFreight Inc.'s Consolidated Statements of Income for
the three-month periods ended June 30, 2008 and 2009:
(Dollars in thousands, except for share and Three Months Ended
per share data) June 30,
2008 2009
---------- ----------
Unaudited Unaudited
INCOME STATEMENT DATA
Voyage revenues $ 37,349 $ 29,123
Gain on forward freight agreements - 591
Imputed revenue 2,566 2,565
---------- ----------
Gross Revenue 39,915 32,279
Voyage expenses (4,207) (1,792)
Vessels operating expenses (5,930) (11,615)
Depreciation (10,370) (12,921)
Management fees (580) (1,185)
General and administrative expenses (1,118) (1,817)
Impairment loss on vessel and vessel held for sale - (31,281)
Drydocking cost - (4,691)
---------- ----------
Operating Income/(loss) 17,710 (33,023)
---------- ----------
Interest and finance costs (4,007) (4,896)
Interest income 142 148
Gain/(loss) on derivative instruments 10,110 4,934
---------- ----------
Net Income/(loss) $ 23,955 $ (32,837)
========== ==========
Basic and fully diluted earnings per share $ 1.65 $ (0.51)
Weighted average common and subordinated shares
outstanding 14,531,896 64,077,460
The following are OceanFreight Inc.'s Consolidated Balance Sheets as at
December 31, 2008 and June 30, 2009:
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
2008 2009
----------- -----------
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 23,069 $ 104,686
Receivables 2,073 1,940
Inventories 1,338 1,617
Prepayments and other 2,197 5,056
Vessel held for sale - 21,950
----------- -----------
Total current assets 28,677 135,249
----------- -----------
FIXED ASSETS, NET:
Vessels, net of accumulated depreciation and
vessel impairment of $56,838 and $93,146,
respectively 587,189 508,979
Other, net of accumulated depreciation of $31
and $47, respectively 159 127
----------- -----------
Total fixed assets, net 587,348 509,106
----------- -----------
OTHER NON CURRENT ASSETS:
Deferred financing fees, net of accumulated
amortization of $1,634 and $1,828, respectively 2,081 1,716
Restricted cash 6,511 6,511
Other 953 4,495
----------- -----------
Total assets $ 625,570 $ 657,077
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,767 $ 4,609
Due to related parties 111 354
Accrued liabilities 9,731 13,854
Unearned revenue 1,822 1,504
Derivative liability 6,771 7,329
Sellers' credit 25,000 -
Current portion of imputed deferred revenue 10,290 9,519
Current portion of long-term debt 60,889 46,014
----------- -----------
Total current liabilities 116,381 83,183
----------- -----------
NON-CURRENT LIABILITIES:
Derivative liability, net of current portion 9,376 3,008
Imputed deferred revenue, net of current portion 5,741 1,409
Long-term debt, net of current portion 247,111 243,104
----------- -----------
Total non-current liabilities 262,228 247,521
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred shares, par value $0.01; 5,000,000
shares authorized, 0 shares issued and
outstanding - -
Common Shares, par value $0.01; 95,000,000
shares authorized, 18,544,493 and 90,394,493
shares issued and outstanding at December 31,
2008 and June 30, 2009, respectively 185 904
Subordinated Shares, par value $0.01;
10,000,000 shares authorized, 0 shares issued
and outstanding - -
Additional paid-in capital 271,824 380,762
Accumulated deficit (25,048) (55,293)
----------- -----------
Total stockholders' equity 246,961 326,373
----------- -----------
Total liabilities and stockholders' equity $ 625,570 $ 657,077
=========== ===========
EBITDA Reconciliation
OceanFreight Inc. considers EBITDA to represent net income before interest,
taxes, depreciation and amortization and other non-cash items. 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 provided by operating activities to
EBITDA:
(Dollars in thousands) Three Months Ended June 30,
2008 2009
----------- -----------
Net cash provided by operating activities 26,477 6,660
Net increase in current assets, excluding cash
and cash equivalents 1,365 1,731
Net increase in current liabilities, excluding
derivative liability, current portion of long
term debt and imputed deferred revenue current
portion (4,839) (4,330)
Net Interest expense 3,865 4,749
Amortization of deferred financing costs included
in interest expense (121) (196)
----------- -----------
EBITDA 26,747 8,614
=========== ===========
Fleet List The table below describes our fleet development and current employment profile as of August 5, 2009:
Gross
Year Current Rate Earliest Latest
Built DWT Type Employment per Day Redelivery Redelivery
DRYBULK
Trenton 1995 75,229 Panamax TC $26,000 Apr-10 Aug-10
Pierre 1996 70,316 Panamax TC $23,000 Jun-10 Oct-10
Austin 1995 75,229 Panamax TC $26,000 Apr-10 Aug-10
Juneau (1) 1990 149,495 Capesize TC $48,700 Sep-09 Nov-09
Partagas 2004 173,880 Capesize TC $27,500 Jul-12 Dec-12
Helena 1999 73,744 Panamax TC $32,000 May-12 Jan-13
Topeka 2000 74,710 Panamax TC $18,000 Jan-11 Mar-11
Richmond 1995 75,265 Panamax TC $18,100 Jul-10 Oct-10
Augusta 1996 69,053 Panamax TC $16,000 Nov-11 Mar-12
TANKERS
Pink Sands 1993 93,723 Aframax TC $27,450 Oct-10 Jan-11
Olinda 1996 149,085 Suezmax Pool - Blue Fin Tankers
Tigani 1991 95,951 Aframax TC $29,800 Sep-09 Nov-09
Tamara 1990 95,793 Aframax TC $27,000 Nov-10 Mar-11
(1) The Company has agreed to sell the M/V Juneau and expects delivery of
the vessel to the new owners to take place no later than November 30, 2009.
Conference Call and Webcast: August 6, 2009 at 08:30 A.M. EDT
OceanFreight management team will host a conference call on August 6, 2009,
at 08:30 A.M. Eastern Daylight Time (EDT) to discuss the Company's
financial results for the Quarter ended June 30, 2009.
Conference Call details:
Participants should Dial-Into the call 10 minutes before the scheduled time
using the following numbers: 1 866 819 7111 (U.S. Toll Free Dial-In), 0800
953 0329 (U.K. Toll Free Dial-In) or +44 (0) 1452 542 301 (Standard
International Dial-In). Please quote "OceanFreight."
A telephonic replay of the conference call will be available until August
13th, 2009 by dialing 1 866 247 4222 (U.S. Toll Free Dial-In), 0800 953
1533 (U.K. Toll Free Dial-In) or +44 (0) 1452 550 000 (Standard
International Dial-In). Access Code: 7445162#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the OceanFreight Inc. website (www.oceanfreightinc.com). Participants to
the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
About OceanFreight Inc.
OceanFreight Inc., is an owner and operator of both drybulk and tanker
vessels that operate worldwide. As of the date of this release,
OceanFreight owns a fleet of 13 vessels, comprised of 9 drybulk vessels (2
Capesize, 7 Panamaxes) and 4 crude carrier tankers (1 Suezmax, 3 Aframaxes)
with a combined deadweight tonnage of about 1.2 million tons.
OceanFreight Inc.'s common stock is listed on the NASDAQ Global Market
where it trades under the symbol "OCNF." Visit our website at
www.oceanfreightinc.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 OceanFreight 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, OceanFreight
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 charter hire rates and vessel values, changes in
demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in OceanFreight 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
OceanFreight Inc. with the U.S. Securities and Exchange Commission.
Contact Information: Company Contact: Demetris Nenes Tel: +30-210-809-0514 E-mail: management@oceanfreightinc.com Investor Relations/Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel: +1-212-661-7566 E-mail: nbornozis@capitallink.com