ATHENS, GREECE--(Marketwire - Nov 2, 2011) - OceanFreight Inc. (
Financial Highlights
For the three months ended September 30, 2011, the Company reported a Net Loss of $19.2 million, or basic and diluted earnings equal to a loss of $3.23 per share. Included in these results are non-recurring costs associated with the proposed merger with a subsidiary of Dryships Inc. of $20.5 million.
Excluding this non-recurring costs, Net Income for the three months ended September 30, 2011 was $1.3 million, or basic and diluted earnings equal to $0.22 per share.
Third Quarter 2011 Results
For the three months ended September 30, 2011, the Company reported Voyage Revenues of $13.1 million, Operating Loss of $18.3 million and Net Loss of $19.2 million. During the same period, Net cash provided by operating activities was $4.8 million and Adjusted EBITDA was a loss of $7.9 million. Please see the reconciliation of Adjusted EBITDA to net cash provided by operating activities below.
The Company owns a fleet of eleven vessels, comprised of six drybulk vessels (four Capesize and two Panamaxes) and five under construction Very Large Ore Carriers (VLOC). The fleet has a combined deadweight tonnage of about 1.9 million tons. During the three months ended September 30, 2011, the Company operated an average of six drybulk vessels that earned an average time charter equivalent rate, or TCE, of $23,287 per day.
Fleet Data
| Three Months Ended September 30, |
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| 2010 | 2011 | ||||
| Average number of vessels (1) | 12 | 6 | |||
| Total voyage days for fleet (2) | 1,063 | 534 | |||
| Total calendar days for fleet (3) | 1,104 | 552 | |||
| Time charter equivalent rate (TCE) (4) | $ | 22,097 | $ | 23,287 | |
| Fleet utilization (5) | 96.3% | 96.7% | |||
| (1) | Average number of vessels is the number of vessels that comprised our operating 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 our operating 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. | |
| (5) | 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. | |
The following table reflects the calculation of the TCE for the periods then ended:
| (Dollars in thousands, except Average Daily results - unaudited) | Three Months Ended September 30, |
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| 2010 | 2011 | ||||
| Voyage revenue | 24,784 | 13,149 | |||
| Voyage expenses | (1,295) | (714) | |||
| Revenue on a time charter basis | 23,489 | 12,435 | |||
| Total voyage days for fleet | 1,063 | 534 | |||
| Time charter equivalent (TCE) rate | $ | 22,097 | $ | 23,287 | |
Financial Statements
The following are the Company's Consolidated Statements of Operations for the three months ended September 30, 2010 and 2011:
| Three Months Ended September 30, |
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| (Dollars in thousands, except for share and per share data) | ||||||
| 2010 | 2011 | |||||
| STATEMENT OF OPERATIONS DATA | (unaudited) | (unaudited) | ||||
| Voyage revenues | $ | 24,784 | $ | 13,149 | ||
| Loss on forward freight agreements | (124) | - | ||||
| Gross revenue | 24,660 | 13,149 | ||||
| Voyage expenses | (1,295) | (714) | ||||
| Vessels operating expenses | (10,113) | (4,575) | ||||
| Depreciation | (6,979) | (4,162) | ||||
| General and administrative expenses | (1,415) | (21,417) | ||||
| Survey and drydocking costs | (448) | (590) | ||||
| Loss on sale of vessels and vessels held for sale | (63,854) |
- |
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| Operating loss | (59,444) | (18,309) | ||||
| Interest income | 6 | 57 | ||||
| Interest expense and finance costs | (862) | (659) | ||||
| Loss on derivative instruments | (2,734) | (315) | ||||
| Net loss | $ | (63,034) | $ | (19,226) | ||
| Loss per common share, basic and diluted | $ | (16,32) | $ | (3,23) | ||
| Weighted average number of common shares, basic and diluted (1) | 3,863,333 |
5,946,180 |
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| (1) | The weighted average number of common shares gives effect to the 1:20 reverse stock split which took place on July 6, 2011. | |
The following are the Company's Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011:
| (Dollars in thousands, except per share data) | ||||||||
| 2010 | 2011 | |||||||
| ASSETS | (audited) | (unaudited) | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 9,549 | $ | 11,034 | ||||
| Vessels held for sale | 88,274 | - | ||||||
| Other current assets | 11,931 | 4,365 | ||||||
| Total current assets | 109,754 | 15,399 | ||||||
| FIXED ASSETS, NET: | ||||||||
| Vessels under construction | 46,618 | 95,329 | ||||||
| Vessels, net of accumulated depreciation | 311,144 | 298,908 | ||||||
| Other, net of accumulated depreciation | 597 | 418 | ||||||
| Total fixed assets, net | 358,359 | 394,655 | ||||||
| OTHER NON-CURRENT ASSETS | ||||||||
| Restricted cash | 5,511 | 3,011 | ||||||
| Other non -current assets | 5,239 | 5,372 | ||||||
| Total assets | 478,863 | 418,437 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt | 82,331 | 26,524 | ||||||
| Other current liabilities | 28,980 | 30,891 | ||||||
| Total current liabilities | 111,311 | 57,415 | ||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Derivative liability, net of current portion | 4,875 | 2,427 | ||||||
| Long-term debt, net of current portion | 127,441 | 111,187 | ||||||
| Total non-current liabilities | 132,316 | 113,614 | ||||||
| STOCKHOLDERS' EQUITY: | 235,236 | 247,408 | ||||||
| Total liabilities and stockholders' equity | 478,863 | 418,437 | ||||||
Adjusted EBITDA Reconciliation
The Company considers EBITDA to represent net income before interest, taxes, depreciation and amortization. Adjusted EBITDA excludes loss on sale of vessels and impairment on vessels. EBITDA and Adjusted EBITDA do not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by U.S. GAAP and our calculation of EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included in this earnings release because it is a basis upon which we assess our liquidity position, because it is used by our lenders as a measure of our compliance with certain loan covenants and because we believe that it presents useful information to investors regarding our ability to service and/or incur indebtedness.
The following table reconciles Net cash provided by operating activities to EBITDA as adjusted for the effect of the loss from the sale of vessels and impairment loss:
| Three Months Ended September 30, | ||||||
| (amounts in thousands of U.S. dollars) | 2010 | 2011 | ||||
| Net cash provided by operating activities | 8,043 | 4,782 | ||||
| Net increase/(decrease) in operating assets | (8,315 | ) | (597 | ) | ||
| Net (increase)/decrease in operating liabilities | 9,163 | (14,412 | ) | |||
| Net interest expense (*) | 2,764 | 2,387 | ||||
| Amortization of deferred financing costs included in interest expense | (130 | ) | (71 | ) | ||
| Adjusted EBITDA | 11,525 | (7,911 | ) | |||
| (*) Net interest expense includes the realized loss of interest rate swaps included in "Loss on interest rate swaps" in the interim consolidated unaudited statements of operations. |
Fleet List
The table below describes our fleet and current employment profile as of the date of this report:
| Vessel Name | Year Built | DWT | Type | Current Employment | Gross Rate per Day | Earliest Redelivery | Latest Redelivery |
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| Drybulk Vessels | ||||||||||||||
| M/V Robusto | 2006 | 173,949 | Capesize | TC | 26,000 | Aug-14 | Mar-18 | |||||||
| M/V Cohiba | 2006 | 174,200 | Capesize | TC | 26,250 | Oct-14 | May-18 | |||||||
| M/V Montecristo | 2005 | 180,263 | Capesize | TC | 23,500 | May-14 | Jan-18 | |||||||
| M/V Partagas | 2004 | 173,880 | Capesize | TC | 27,500 | Jul-12 | Dec-12 | |||||||
| M/V Topeka | 2000 | 74,710 | Panamax | TC | 15,000 | Jan-12 | Apr-13 | |||||||
| M/V Helena | 1999 | 73,744 | Panamax | TC | 32,000 | May-12 | Oct-16 | |||||||
| Vessels to be Acquired | ||||||||||||||
| Newbuilding VLOC #1 (1) | 2012 | 206,000 | Capesize | TC | 25,000 | Apr-15 | Apr-20 | |||||||
| Newbuilding VLOC #2 (2) | 2012 | 206,000 | Capesize | TC | 23,000 | Aug -17 | Aug -22 | |||||||
| Newbuilding VLOC #3 (3) | 2012 | 206,000 | Capesize | TC | 21,500 | Oct-19 | Oct-26 | |||||||
| Newbuilding VLOC #4 | 2012 | 206,000 | Capesize | Spot | ||||||||||
| Newbuilding VLOC #5 | 2013 | 206,000 | Capesize | Spot |
| (1) | Upon delivery of the vessel, which is expected in the first quarter of 2012, it is scheduled to commence time charter employment for a minimum period of three years at a gross daily rate of $25,000. | |
| (2) | Upon delivery of the vessel, which is expected in the second quarter of 2012, it is scheduled to commence time charter employment for a minimum period of five years at a gross daily rate of $23,000. In addition, the time charter contract provides for a 50% profit sharing arrangement when the daily Capesize average time charter rate is between $23,000 and $40,000 per day. | |
| (3) | Upon delivery of the vessel, which is expected in the fourth quarter of 2012, it is scheduled to commence time charter employment for a minimum period of seven years at a gross daily rate of $21,500. In addition, the time charter contract provides for a 50% profit sharing arrangement when the daily Capesize average time charter rate is between $21,500 and $38,000 per day. | |
About OceanFreight Inc.
The Company is an owner and operator of drybulk vessels that operate worldwide. The Company owns a fleet of eleven vessels, comprised of six drybulk vessels (four Capesize and two Panamaxes) and five newbuilding Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of about 1.9 million tons.
The Company'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 the Company 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, the Company 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 the Company'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.
Please see the Company's filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
Contact Information:
Investor Relations/Media:
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel: +1-212-661-7566
E-mail: oceanfreight@capitallink.com