SOURCE: OceanFreight Inc.

OceanFreight Inc.

February 22, 2010 17:00 ET

OceanFreight Inc. Reports Financial Results for the Fourth Quarter and Year Ended 2009

ATHENS, GREECE--(Marketwire - February 22, 2010) - OceanFreight Inc. (NASDAQ: OCNF), a global provider of marine transportation services, today announced its financial results for the quarter ended December 31, 2009.

Financial Highlights

For the three-month period ended December 31, 2009, the Company reported Net Loss of $135.9 million or basic and diluted loss per share of $0.98. Included in these results are:

-- A book loss of approximately $18.2 million associated with
   the sale of the M/V Pierre and M/V Juneau.
-- An impairment loss of $116.4 million associated with the
   write down of the Company's tanker vessels to their fair
   market values.
-- A gain of $1.3 million associated with the change in the fair
   value of the interest rate swaps.
-- Excluding the above items Net loss for the fourth quarter of
   2009 would be $2.6 million or $0.02 per share.
-- EBITDA(1) for the year ended December 31, 2009 was $55.5
   million as adjusted for the effect of the loss from the sale
   of vessels and impairment loss.

Anthony Kandylidis, the Company's Chief Executive Officer, commented:

"We are pleased to have put behind us a very challenging 2009. The impairment loss on our tanker fleet is the last piece of the puzzle in cleaning up OceanFreight's balance sheet. Going forward we have created the foundation for positive earnings per share for our shareholders. With operating results in line with expectations and the dramatic improvement in our fleet age profile we are entering 2010 with strong optimism. Our secured cash flows and our proven access to tap the capital markets put us in a unique position to take advantage of the low point in the shipping cycle."

Fleet Developments
-- On December 9, 2009, the Company took delivery of the M/V
   Cohiba, a 2006-built 174,200 dwt Capesize drybulk carrier,
   for a total cost of $61.9 million. Upon delivery, the vessel
   commenced fixed rate employment for a five year minimum period
   at a gross daily rate of $26,250.
-- On December 11, 2009, we agreed to sell the M/V Pierre to a
   third party for a gross sale price of $22.6 million, resulting
   in a loss of approximately $17.4 million.  The vessel is
   scheduled to be delivered to its new owners between March 1, 2010
   and April 15, 2010.
-- In addition, as previously announced, the Company has entered
   into an agreement to purchase a 2005-built 180,263 dwt Capesize
   drybulk carrier, to be renamed M/V Montecristo, for a purchase
   price of $49.5 million. We expect to take delivery of the M/V
   Montecristo in the second quarter of 2010 following which it
   will commence on time charter employment for a minimum period of
   four years at a gross daily rate of $23,500.
-- Upon completion of the above transactions, our fleet will consist
   of 13 vessels, comprised of nine dry bulk carriers (4 Capesizes,
   5 Panamaxes) and 4 tankers (1 Suezmax, 3 Aframaxes) with a combined
   deadweight tonnage of approximately 1.5 million tons and a weighted
   average age of approximately 10.8 years.

Fourth Quarter 2009 Results

For the fourth quarter ended December 31, 2009, Voyage Revenues amounted to $28.2 million, Operating Loss amounted to $132.7 million which includes the effect of the loss from the sale of vessels of $18.2 million and impairment loss of $116.4 million. Net Loss amounted to $135.9 or $(0.98) per share. EBITDA(1) for the fourth quarter of 2009 was $11.4 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.

An average of 12.3 vessels were owned and operated during the fourth quarter of 2009, earning an average Time Charter Equivalent, or TCE rate, of $25,172 per day.

Year Ended December 31, 2009 Results

For the year ended December 31, 2009, Gross Revenue amounted to $118.5 million. Operating Loss was $164.9 million, which includes the effect of the loss from the sale of vessels of $69.3 million and impairment loss of $116.4 million. Net Loss amounted to $179.4 million or $(2.28) per share. EBITDA(1) for the year was $55.5 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.

An average of 12.7 vessels were owned and operated during the year 2009, earning an average Time Charter Equivalent, or TCE, rate of $28,523 per day.

Capitalization

On December 31, 2009, debt (debt, net of deferred financing fees) to total capitalization (debt and stockholders' equity) ratio was 50.8% and net debt (debt less cash, cash equivalents and restricted cash) to total capitalization ratio was 41.9%.

Financing

As of the date of this release we have raised approximately $98.2 million in net proceeds under the current Standby Equity Distribution Agreement with YA Global Master SPV ltd., an affiliate of Yorkville Advisors. The proceeds of this offering together with the existing loan facilities are expected to be sufficient to finance the vessel acquisitions announced to date. As of the date of this release the Company has 181,800,001 shares outstanding.

Liquidity

As of December 31, 2009, the Company had total liquidity of approximately $46.3 million including restricted cash.

(1) Please see later in this release for a reconciliation of adjusted EBITDA to net cash provided by Operating activities.

Fleet Data

(Dollars in thousands, except
 Average Daily results - unaudited) Three months Ended      Year Ended
                                        December 31,       December 31,
                                    ------------------  ------------------
                                      2008      2009      2008      2009
                                    --------  --------  --------  --------

Average number of vessels (1)           12.7      12.3      11.4      12.7
                                    --------  --------  --------  --------
Total voyage days for fleet (2)        1,135     1,125     4,125     4,466
                                    --------  --------  --------  --------
Total calendar days for fleet (3)      1,166     1,131     4,164     4,650
                                    --------  --------  --------  --------
Time charter equivalent (5)         $ 32,815  $ 25,172  $ 34,705  $ 28,523
                                    --------  --------  --------  --------
Fleet utilization (4)                   97.3%     99.5%     99.1%     96.1%
                                    --------  --------  --------  --------

(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) 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 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:

(Dollars in thousands, except       Three months Ended      Year Ended
 Average Daily results - unaudited)    December 31,        December 31,
                                    ------------------  ------------------
                                      2008      2009      2008      2009
                                    --------  --------  --------  --------

Gross revenue                         38,863    29,412   157,434   132,935
                                    --------  --------  --------  --------
Voyage expenses                       (1,618)   (1,094)  (14,275)   (5,549)
                                    --------  --------  --------  --------
Time charter equivalent               37,245    28,318   143,159   127,386
                                    --------  --------  --------  --------

                                    --------  --------  --------  --------
Total voyage days for fleet            1,135     1,125     4,125     4,466
                                    --------  --------  --------  --------
Time charter equivalent (TCE) rate  $ 32,815  $ 25,172  $ 34,705  $ 28,523
                                    --------  --------  --------  --------



Financial Statements

The following are OceanFreight Inc.'s Consolidated Statements of Operations
for the three-month periods and the years ended December 31, 2008 and 2009:

(Dollars in thousands,     Three Months Ended
 except for share and         December 31,        Year Ended December 31,
 per share data)        ------------------------  ------------------------
                            2008         2009         2008         2009
                        -----------  -----------  -----------  -----------
STATEMENT OF OPERATIONS
 DATA                   (unaudited)  (unaudited)    (audited)  (unaudited)

Voyage revenues         $    36,269  $    28,228  $   147,116  $   118,462
Gain /(loss) on forward
 freight agreements               -         (263)           -          570
Imputed revenue               2,594        1,184       10,318       14,473
                        -----------  -----------  -----------  -----------
Gross revenue                38,863       29,149      157,434      133,505

Voyage expenses              (1,618)      (1,094)     (14,275)      (5,549)
Vessels operating
 expenses                    (8,442)      (9,771)     (26,387)     (39,063)
Depreciation                (12,629)     (10,715)     (43,658)     (49,182)
Management fees                (831)      (1,361)      (2,593)      (4,852)
General and
 administrative
 expenses                    (3,495)      (4,322)      (9,127)      (8,540)
Dry docking costs              (736)           -         (736)      (5,570)
Loss from sale of
 vessels                          -      (18,150)           -      (69,250)
Impairment on vessels             -     (116,431)           -     (116,431)
                        -----------  -----------  -----------  -----------
Operating income / (loss)    11,112     (132,695)      60,658     (164,932)
                        -----------  -----------  -----------  -----------

Interest income                  91           17          776          271
Interest expense and
 finance costs               (5,437)      (4,485)     (17,565)     (19,834)
Gain/(loss) on
 derivative instruments     (17,333)       1,272      (16,147)       5,098
                        -----------  -----------  -----------  -----------
Net income/(loss)       $   (11,567) $  (135,891) $    27,722  $  (179,397)
                        ===========  ===========  ===========  ===========

Basic and fully diluted
 loss per share         $     (0.65) $     (0.98) $      1.94  $     (2.28)
Weighted average common
 and subordinated
 shares                  17,754,797  138,395,248   14,321,471   78,556,327



 The following are OceanFreight Inc.'s Consolidated Balance Sheets as at
                     December 31, 2008 and 2009

   (Dollars in thousands, except per share data)
                                                     2008         2009
                                                  -----------  -----------
ASSETS                                             (audited)   (unaudited)
CURRENT ASSETS:
  Cash and cash equivalent                        $    23,069  $    37,272
  Restricted cash                                           -        2,500
  Receivables                                           2,073        2,254
  Inventories                                           1,338        1,158
  Prepayments and other                                 2,197        4,753
  Vessel held for sale                                      -       22,580
                                                  -----------  -----------
    Total current assets                               28,677       70,517
                                                  -----------  -----------

FIXED ASSETS, NET:
  Advances for vessel acquisition                           -        9,900
  Vessels, net of accumulated depreciation of
   $56,837 and $223,577, respectively                 587,189      450,742
  Other, net of accumulated depreciation of $31 and
   $123, respectively                                     159          856
                                                  -----------  -----------
    Total fixed assets, net                           587,348      461,498
                                                  -----------  -----------

OTHER NON-CURRENT LIABILITIES
  Deferred financing fees, net of accumulated
   amortization of $1,634 and $2,378, respectively      2,081        1,362
  Restricted cash                                       6,511        6,511
  Other                                                   953        9,725
                                                  -----------  -----------
    Total assets                                      625,570      549,613
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Account payable                                       1,767        2,394
  Due to related parties                                  111          500
  Accrued liabilities                                   9,731       11,219
  Unearned revenue                                      1,822        1,323
  Derivative liability                                  6,771        7,443
  Sellers' credit                                      25,000            -
  Current portion of imputed deferred revenue          10,290        1,558
  Current portion of long-term debt                    60,889       47,030
                                                  -----------  -----------
    Total current liabilities                         116,381       71,467
                                                  ===========  ===========

NON-CURRENT LIABILITIES:
  Derivative liability, net of current portion          9,376        3,606
  Imputed deferred revenue, net of current portion      5,741            -
  Long-term debt, net of current portion              247,111      218,644
                                                  -----------  -----------
    Total non-current liabilities                     262,228      222,250
                                                  ===========  ===========

COMMITMENTS AND CONTINGENCIES:

STOCKHOLDERS' EQUITY:
Preferred shares, par value $0.01; 5,000,000
 shares authorized, none issued                             -            -
Common Shares, par value $0.01; 1,000,000,000
 shares authorized, 18,544,493 and 158,450,001
 shares issued and outstanding as of December 31,
 2008 and 2009, respectively                              185        1,584
Subordinated Shares, par value $0.01; 10,000,000
 shares authorized, none issued                             -            -
Additional paid-in capital                            271,824      458,757
Accumulated deficit                                   (25,048)    (204,445)
                                                  -----------  -----------
    Total stockholders' equity                        246,961      255,896
                                                  -----------  -----------
    Total liabilities and stockholders' equity        625,570      549,613
                                                  ===========  ===========

Adjusted EBITDA Reconciliation

OceanFreight Inc. 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   Year Ended
                                             December 31,     December 31,
                                             2008    2009    2008    2009
Net Cash provided by operating activities
Net cash from operating activities          12,970   6,314  82,309  26,552
Net increase in operating assets             2,293  (1,652)  3,941  11,329
Net (increase)/decrease in operating
 liabilities                                   672   2,453  (5,865) (1,198)
Net interest expense                         5,346   4,468  16,789  19,563
Amortization of deferred financing costs
 included in interest expense                 (119)   (169)   (475)   (744)
                                            ------  ------  ------  ------
Adjusted EBITDA                             21,162  11,414  96,699  55,502
                                            ======  ======  ======  ======

Fleet List

The table below describes our fleet and current employment profile as of February 22, 2010:

Current Gross Rate Earliest Latest Year Built DWT Type Employment per Day Redelivery Redelivery

                                              Gross
Vessel      Year                     Curent   Rate    Earliest   Latest
 Name       Built   DWT     Type   Employment per Day Redelivery Redelivery
            ----- ------- -------- ---------- ------- ---------- ----------
Drybulk
 Carriers
M/V
 Robusto     2006 173,949 Capesize         TC  26,000     Aug-14     Dec-14
M/V Cohiba   2006 174,200 Capesize         TC  26,250     Oct-14     Feb-15
M/V
 Partagas    2004 173,880 Capesize         TC  27,500     Jul-12     Dec-12
M/V Topeka
 (1)         2000  74,710  Panamax         TC  18,000     Jan-11     Mar-11
M/V Helena   1999  73,744  Panamax         TC  32,000     May-12     Jan-13
M/V
 Augusta     1996  69,053  Panamax         TC  16,000     Nov-11     Mar-12
M/V Austin   1995  75,229  Panamax         TC  26,000     Mar-10     Aug-10
M/V Trenton  1995  75,229  Panamax         TC  26,000     Apr-10     Aug-10

Tanker Vessels
M/T Olinda   1996 149,085  Suezmax       POOL       -          -          -
M/T Pink
 Sands       1993  93,723  Aframax         TC  27,450     Oct-10     Jan-11
M/T Tigani   1991  95,951  Aframax       POOL       -          -          -
M/T Tamara   1990  95,793  Aframax         TC  27,000     Dec-11     Mar-11

Drybulk Carrier
 to be Sold
M/V Pierre   1996  70,316  Panamax         TC  23,000     Mar-10     Apr-10

Drybulk
 Carrier
 to be
 Acquired
M/V
 Montecristo 2005 180,263 Capesize         TC  23,500     Apr-14     Sep-14

Conference Call and Webcast: Tuesday, February 23, 2010 at 08:30 A.M. EST

OceanFreight management team will host a conference call tomorrow, on February 23, 2010, at 08:30 A.M. Eastern Standard Time (EST) to discuss the Company's financial results for the Quarter and Year ended December 31, 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 March 2, 2010 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 (3 Capesize, 6 Panamaxes) and 4 crude carrier tankers (1 Suezmax, 3 Aframaxes) with a combined deadweight tonnage of about 1.4 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.

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